BEST MYT Order - Final Order - Case 26 of 2013-28 08 2013

Case No.
26 of 2013 - MERC Order on BEST Petition for True-up of FY 2010-11and FY 2011-12 and MYT Petition for FY 2012-13 to FY 2015-16
Before the MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai 400 005 Tel. No. 022 22163964/65/69 Fax 022 22163976 E-mail: mercindia@mercindia.org.in/ mercindia@merc.gov.in Website: www.mercindia.org.in / www.merc.gov.in Case No._26 of 2013 IN THE MATTER OF Petition filed by Brihanmumbai Electric Supply and Transport Undertaking (BEST) for approval of Truing Up of the Aggregate Revenue Requirement for FY 2010-11 and FY 2011-12 and Multi Year Tariff for the second Control Period (FY 2012-13 to FY 2015-16) Shri V. P. Raja, Chairman Shri Vijay L. Sonavane, Member
Date: 28 August, 2013 ORDER In accordance with the Maharashtra Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2005 and Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2011, and upon directions from the Maharashtra Electricity Regulatory Commission (hereinafter referred as MERC or the Commission), Brihanmumbai Electric Supply and Transport Undertaking (BEST), submitted its Application on affidavit for approval of the Truing Up of the Aggregate Revenue Requirement (ARR) for FY 2010-11 and FY 2011-12 and determination of ARR and Multi Year Tariff for the period from FY 2012-13 to FY 2015-16. The Commission, in exercise of the powers vested in it under Section 61 and Section 62 of the Electricity Act, 2003 (EA 2003) and all other powers enabling it in this behalf, and after taking into consideration all the submissions made by BEST, the issues raised during the Public Hearing, and all other relevant material, issues the following Order.
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Case No.26 of 2013 - MERC Order on BEST Petition for True-up of FY 2010-11and FY 2011-12 and MYT Petition for FY 2012-13 to FY 2015-16
Table of Contents
1 BACKGROUND AND BRIEF HISTORY ......................................................................... 7 1.1 1.2 1.3 1.4 BACKGROUND .............................................................................................................. 7 MERC TARIFF REGULATIONS ................................................................................... 8 MERC MYT REGULATIONS ........................................................................................ 8 MERC ORDER ON APR PETITION OF BEST FOR FY 2009-10 AND TARIFF
DETERMINATION FOR FY 2010-11 ...................................................................................... 8 1.5 MERC ORDER ON PETITION FOR TRUING UP OF FY 2009-10 AND PROVISIONAL TRUING-UP FOR FY 2010-11 ...................................................................... 9 1.6 ATE ORDER ON APR FOR FY 2009-10 AND TARIFF DETERMINATION FOR FY 2010-11 ....................................................................................................................................... 9 1.7 MERC ORDER ON APPROVAL OF ARR AND TARIFF DETERMINATION FOR FY 2011-12 ................................................................................................................................. 9 1.8 SUO-MOTU ORDER FOR IMPLEMENTATION OF ATE JUDGMENT DATED 22 MARCH, 2012 IN APPEAL NO. 8 OF 2011 ............................................................................. 9 1.9 MERC ORDER FOR INCLUSION AND ALLOWANCE IN FAVOUR OF BEST DEFICIT OF TRANSPORT BUSINESS OF BEST, IN THE DETERMINATION OF ARR AND TARIFF FOR THE PERIOD FROM FY 2004-05 TO FY 2008-09 .............................. 10 1.10 BUSINESS PLAN ORDER FOR BEST FOR MYT CONTROL PERIOD .............. 10
1.11 PETITION FOR APPROVAL OF TRUING UP OF ARR FOR FY 2010-11 AND FY 2011-12 AND DETERMINATION OF ARR AND MYT FOR FY 2012-13 TO FY 2015-16, ADMISSION OF THE MYT PETITION AND PUBLIC PROCESS ..................................... 10 1.12 2 ORGANISATION OF THE ORDER......................................................................... 12
OBJECTIONS RECEIVED, BESTS RESPONSE AND COMMISSIONS RULING 17 2.1 2.2 2.3 2.4 2.5 BEST AS A LOCAL AUTHORITY ............................................................................. 17 MONOPOLY OF BEST ................................................................................................ 17 TARIFF PETITION ....................................................................................................... 18 POWER PURCHASE EXPENSES ............................................................................... 19 AVERAGE COST OF SUPPLY (ACOS) ..................................................................... 21 Page 2 of 308
2.6 2.7 2.8 2.9 2.10 2.11
DISTRIBUTION LOSSES ............................................................................................ 23 METERING AND BILLING......................................................................................... 24 OPERATION AND MAINTENANCE (O&M) EEXPENSES ..................................... 26 ENERGY CHARGES .................................................................................................... 26 FUEL ADJUSTMENT COST (FAC) ........................................................................ 27 LOAD PROFILE AND POWER FACTOR PENALTY ........................................... 28
2.12 COMPARISON OF FUEL AND OPERATING MATERIALS AND ESTABLISHMENT COST ...................................................................................................... 29 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 3 INCREASE IN TARIFF ............................................................................................. 30 TOD TARIFF ............................................................................................................. 31 CROSS SUBSIDY ..................................................................................................... 32 TRANSPORT DIVISION LOSS RECOVERY CHARGE (TDLR) ......................... 33 CARRYING COST .................................................................................................... 36 SALES AND REVENUE AT EXISTING TARIFF .................................................. 36 COMPARISON OF PAST REVENUE (GAP)/SURPLUS ....................................... 37 ENERGY EFFICIENCY ............................................................................................ 38 FEES FOR FILING A PETITION ............................................................................. 38
TRUING UP OF AGGREGATE REVENUE REQUIREMENT FOR FY 2010-11 .... 40 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 SALES ............................................................................................................................ 40 DISTRIBUTION LOSSES AND ENERGY INPUT REQUIREMENT ....................... 42 POWER PURCHASE QUANTUM AND COST FOR FY 2010-11 ............................ 43 O&M EXPENSES FOR FY 2010-11 ............................................................................ 50 CAPITAL EXPENDITURE AND CAPITALISATION ............................................... 58 DEPRECIATION ........................................................................................................... 63 INTEREST EXPENSES ................................................................................................ 64 RETURN ON INTERNAL FUNDS .............................................................................. 67 RETURN ON EQUITY ................................................................................................. 69
3.10 INTEREST ON WORKING CAPITAL AND CONSUMERS SECURITY DEPOSIT FOR FY 2010-11 ..................................................................................................... 71 Page 3 of 308
3.11 3.12 3.13 3.14 3.15 3.16
OTHER EXPENSES FOR FY 2010-11 ..................................................................... 75 CONTRIBUTION TO CONTINGENCY RESERVES ............................................. 75 NON-TARIFF INCOME FOR FY 2010-11 .............................................................. 76 SHARING OF GAINS AND LOSSES IN FY 2010-11 ............................................ 79 INCLUSION OF DEFICIT OF TRANSPORT DIVISION ....................................... 82 VIGILANCE DRIVE AMOUNT ............................................................................... 83
3.17 AGGREGATE REVENUE REQUIREMENT (ARR) AND REVENUE GAP OF BEST FOR FY 2010-11............................................................................................................ 84 4 TRUING UP OF AGGREGATE REVENUE REQUIREMENT FOR FY 2011-12 .... 89 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 SALES ............................................................................................................................ 89 DISTRIBUTION LOSSES AND ENERGY INPUT REQUIREMENT ....................... 90 POWER PURCHASE QUANTUM AND COST FOR FY 2011-12 ............................ 92 O&M EXPENSES FOR FY 2011-12 ............................................................................ 99 CAPITAL EXPENDITURE AND CAPITALISATION ............................................. 107 DEPRECIATION ......................................................................................................... 111 INTEREST EXPENSES .............................................................................................. 112 RETURN ON INTERNAL FUNDS ............................................................................ 115 RETURN ON EQUITY ............................................................................................... 116
4.10 INTEREST ON WORKING CAPITAL AND CONSUMERS SECURITY DEPOSIT FOR FY 2011-12 ................................................................................................... 118 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 OTHER EXPENSES FOR FY 2011-12 ................................................................... 120 CONTRIBUTION TO CONTINGENCY RESERVES ........................................... 120 NON-TARIFF INCOME FOR FY 2011-12 ............................................................ 123 SHARING OF GAINS AND LOSSES IN FY 2011-12 .......................................... 125 INCLUSION OF DEFICIT OF TRANSPORT DIVISION ..................................... 128 CARRYING COST .................................................................................................. 129 VIGILANCE DRIVE AMOUNT ............................................................................. 132 INCOME TAX ......................................................................................................... 133
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4.19 AGGREGATE REVENUE REQUIREMENT (ARR) AND REVENUE GAP/(SURPLUS) OF BEST FOR FY 2011-12 ..................................................................... 133 5 AGGREGATE REVENUE REQUIREMENT FOR THE CONTROL PERIOD FROM FY 2012-13 TO FY 2015-16 ........................................................................................ 138 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 SALES .......................................................................................................................... 138 DISTRIBUTION LOSS AND ENERGY INPUT REQUIREMENT .......................... 142 POWER PURCHASE PLAN ...................................................................................... 144 O&M EXPENSES ....................................................................................................... 158 CAPITAL EXPENDITURE AND CAPITALISATION ............................................. 165 DEPRECIATION ......................................................................................................... 169 INTEREST EXPENSES .............................................................................................. 170 RETURN ON EQUITY ............................................................................................... 174 PROVISION FOR BAD AND DOUBTFUL DEBTS................................................. 176 CONTRIBUTION TO CONTINGENCY RESERVES ........................................... 177 OTHER EXPENSES ................................................................................................ 178 NON-TARIFF INCOME .......................................................................................... 179 WIRE AVAILABILITY AND SUPPLY AVAILABILITY.................................... 181 RECOVERY OF INCREMENTAL REVENUE GAP FOR FY 2011-12 ............... 189 RECOVERY OF REGULATORY ASSETS WITH CARRYING COST .............. 190 IMPACT OF THE COMMISSIONS ORDER IN CASE NO 62 OF 2012 ............ 191 TRANSPORT DEFICIT........................................................................................... 191 AGGREGATE REVENUE REQUIREMENT FOR THE CONTROL PERIOD.... 195 ARR INCLUDING PAST RECOVERIES .............................................................. 198
6 TARIFF PHILOSOPHY AND CATEGORY-WISE TARIFFS PROPOSAL FOR THE CONTROL PERIOD FROM FY 2013-14 TO FY 2015-16 .................................................. 201 6.1 6.2 6.3 APPLICABILITY OF REVISED TARIFFS ............................................................... 201 BESTS TARIFF PROPOSAL .................................................................................... 201 COMMISSIONS TARIFF PHILOSOPHY ................................................................ 214
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6.4 14) 6.5 6.6 6.7
REVISED TARIFFS WITH EFFECT FROM 1 SEPTEMBER, 2013 (FOR FY 2013223 REVISED TARIFFS WITH EFFECT FROM 1 APRIL, 2014 (FOR FY 2014-15) ... 226 REVISED TARIFFS WITH EFFECT FROM 1 APRIL, 2015 (FOR FY 2015-16) ... 229 INCENTIVES AND DISINCENTIVES ...................................................................... 233
7 SUMMARY OF DIRECTIVES UNDER MYT BUSINESS PLAN ORDER AND BEST'S REPLIES AND COMPLIANCE .............................................................................. 236 7.1 REGARDING SEPARATE SECTION FOR TRUING UP OF ARR FOR FY 2011-12 236
7.2 SUBMISSION OF DSM SCHEMES FOR THE COMMISSIONS APPROVAL AND CONSIDERATION OF SAVINGS IN ENERGY DUE TO DSM IN THE POWER PURCHASE REQUIREMENTS ............................................................................................ 236 7.3 CONSIDERATION OF REVISED SUBMISSION OF TPC-G IN ITS MYT PETITION IN CASE NO 177 OF 2011 OR THE COST APPROVED BY THE COMMISSION IN TPC-GS MYT ORDER ......................................................................... 237 7.4 7.5 IMPACT OF WAGE AGREEMENT .......................................................................... 238 DELAYED PAYMENT CHARGES PAYABLE TO TPC-G..................................... 239
7.6 PROJECTION OF REBATE FOR PROMPT PAYMENT OF POWER PURCHASE BILLS ..................................................................................................................................... 240 7.7 7.8 7.9 FIRM FUNDING ARRANGEMENT ......................................................................... 240 RECOVERY OF THE IMPACT DUE TO ATES JUDGMENT ............................... 241 TIE-UP FOR RENEWABLE ENERGY POWER PURCHASE TO MEET ITS RPO241
7.10 BESTS PRAYER TO MODIFY/REVISE THE BUSINESS PLAN ON YEARLY BASIS 242 8 APPLICABILITY OF THE ORDER ............................................................................. 243
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1 BACKGROUND AND BRIEF HISTORY

1.1 BACKGROUND
A Petition has been filed by the Brihanmumbai Electric Supply and Transport Undertaking (BEST) for approval of the Truing Up of the Aggregate Revenue Requirement (ARR) for FY 2010-11 and FY 2011-12 and ARR and Multi Year Tariff for the period from FY 2012-13 to FY 2015-16, for its Distribution Business. The Brihanmumbai Electric Supply and Transport Undertaking (BEST) is an undertaking of the Brihanmumbai Mahanagarpalika and is in the business of distributing electricity to consumers in the old city limits and providing public road transport in the entire city limits as well as in some adjoining areas of Mumbai city. It has a consumer base of 10.02 Lakh consumers (as on 31 March, 2012), and purchased 4,635 MU and 4637 MU of power at T-D interface in FY 2010-11 and FY 2011-12, respectively. BEST submitted that the erstwhile Bombay Electric Supply & Tramways Company started supplying electricity to the Bombay city in 1905. BEST submitted that until 1926, it was generating its own electricity for distribution to its consumers; however, later it started purchasing electricity from M/s Tata Electric Company (now Tata Power). In 1947, the Company was municipalised and came to be known as the Bombay Electric Supply & Transport Undertaking, which was later changed to Brihanmumbai Electric Supply and Transport Undertaking. BEST submitted that it distributes electricity from Colaba in South Mumbai to Sion/Mahim in the North and is renowned for quick restoration of supply in the event of any interruptions in the distribution system and its reliability indices are among the best in the country and comply with the Standards of Performance (SOP) prescribed by the Commission.
Special Status of BEST BEST submitted that it is an Undertaking of Brihanmumbai Mahanagarpalika and is in the business of providing electricity in the old city limits and public transport (Bus transport) covering the entire city and suburbs and some areas of the Mumbai Metropolitan Region. BEST submitted that it is recognised as a Local Authority under the Electricity Act, 2003. BEST submitted that historically there was a common administration set up for both the business activities, i.e., the Electric Supply division and the Transport division and prior to enactment of Page 7 of 308
the EA 2003, the revenue of electricity division was approved under provisions of Schedule VI of the Electricity Supply Act, 1948. However, as the Local Authority was exempted from applicability of provisions of Schedule VI of the Electric (Supply) Act, 1948, BEST being a Local Authority, and with the objective of providing better and essential services of Electricity Supply and Transport to the citizens of Mumbai, the surplus generated by the Electric Supply Division, if any, was used for subsidising the Transport business of BEST. 1.2 MERC TARIFF REGULATIONS
The Commission, in exercise of the powers conferred by the EA 2003, notified the Maharashtra Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2005, (hereinafter referred as the "MERC Tariff Regulations") on August 26, 2005. These Regulations superseded the MERC (Terms and Conditions of Tariff) Regulations, 2004. 1.3 MERC MYT REGULATIONS
The Commission, in exercise of the powers conferred by the EA 2003, notified the Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2011, (hereinafter referred as the MERC MYT Regulations, 2011) on 4 February, 2011. These Regulations are applicable for the second Control Period starting from FY 2011-12 to FY 2015-16. The said Regulations were amended vide notification dated 21 October, 2011 called Maharashtra Electricity Regulatory Commission (Multi Year Tariff) (First Amendment) Regulations, 2011. As per the said Amendment, the Commission has specified that for the Generating Company or Transmission Licensee or Distribution Licensee for whom there is no Order of exemption under Regulation 4.1 and if the Commission is satisfied that there is a difficulty in giving effect to the determination of tariff with effect from 1 April, 2011 under these Regulations and in the event tariff is required to be determined from 1 April, 2012 or any further period under these Regulations, the repealed Regulations in respect of the said tariff determination shall continue to be in-force, and the provisions of these Regulations shall not apply to the determination of tariff for the period till 1 April, 2012 or such further period. 1.4 MERC ORDER ON APR PETITION OF BEST FOR FY 2009-10 AND TARIFF DETERMINATION FOR FY 2010-11
BEST filed an APR Petition for FY 2009-10 on 31 December, 2009 as per MERC (Terms and Conditions of Tariff) Regulations, 2005, wherein it sought approval for (i) True up of FY 200809, (ii) APR of FY 2009-10, and (iii) ARR and Tariff Petition for FY 2010-11. The Commission passed an Order in this matter on 12 September, 2010 in which it had disallowed certain Page 8 of 308
expenditures claimed by BEST. Partly aggrieved by the aforesaid Order, BEST filed an Appeal before the Honble Appellate Tribunal for Electricity (ATE) under Appeal No. 8 of 2011.
1.5
MERC ORDER ON PETITION FOR TRUING UP OF FY 2009-10 AND PROVISIONAL TRUING-UP FOR FY 2010-11
BEST filed an APR Petition for FY 2010-11 as per MERC (Terms and Conditions of Tariff) Regulations, 2005, wherein it sought approval for (i) True up for FY 2009-10, and (ii) APR for FY 2010-11. The Commission passed an Order in this matter on 16 March, 2012 in which it disallowed certain expenditures claimed by BEST. In the said Order, the Commission implemented the Honble Supreme Courts Judgment dated 8 February, 2011 in Civil Appeal No. 848 of 2007 allowing recovery of Transport Division deficit from the electricity consumers. 1.6 ATE ORDER ON APR FOR FY 2009-10 AND TARIFF DETERMINATION FOR FY 2010-11
The Honble ATE, vide its Judgment dated 22 March, 2012 in Appeal No. 8 of 2011 allowed the Appeal partly in favour of BEST and remanded back certain issues to the Commission for reexamination. 1.7 MERC ORDER ON APPROVAL OF ARR AND TARIFF DETERMINATION FOR FY 2011-12
BEST filed the Petition for approval of ARR and Tariff for FY 2011-12 as per MERC (Terms and Conditions of Tariff) Regulations, 2005 in Case No. 171 of 2011. The Commission issued the Order in Case No. 171 of 2011 for BEST on 16 May, 2012. In its Order, the Commission approved the ARR and revised tariffs prospectively from 1 June, 2012, with an average tariff increase of 27.6%. The Commission created the Transport Division Loss Recovery Charge to account for the Transport Divisions losses being passed on through the Electricity Supply Divisions tariffs.
1.8
SUO-MOTU ORDER FOR IMPLEMENTATION OF ATE JUDGMENT DATED 22 MARCH, 2012 IN APPEAL NO. 8 OF 2011
The Honble ATE, vide its Judgment dated 22 March, 2012 in Appeal No. 8 of 2011, partly accepted the Appeal and directed the Commission to re-examine certain issues. The Commission scheduled a suo-motu hearing in the matter on 17 May, 2012 in Case No. 62 of 2012 for the Page 9 of 308
implementation of the aforesaid Judgment. The Commission issued the Order in Case No. 62 of 2012 on 26 August, 2012 wherein it allowed an additional impact of Rs. 64.99 Crore to be included in the subsequent Tariff Petition.
1.9
MERC ORDER FOR INCLUSION AND ALLOWANCE IN FAVOUR OF BEST DEFICIT OF TRANSPORT BUSINESS OF BEST, IN THE DETERMINATION OF ARR AND TARIFF FOR THE PERIOD FROM FY 2004-05 TO FY 2008-09
BEST filed a Petition (Case No. 80 of 2012) for inclusion and allowance of the deficit of the Transport Business of BEST, in the determination of ARR and Tariff for the period from FY 2004-05 to FY 2008-09. In view of the Honble Supreme Courts Judgment dated 8 February, 2011 in Civil Appeal No. 848 of 2011, the Commissions Order dated 16 March, 2012 in Case No. 125 of 2011 and the Commissions Order dated 16 May, 2012 in Case No. 171 of 2011, the Commission p assed its Order in Case No. 80 of 2012 on 26 December, 2012 allowing Transport Deficit of Rs. 1187.71 Crore to be recovered during the Control Period.
1.10
BUSINESS PLAN ORDER FOR BEST FOR MYT CONTROL PERIOD
Pursuant to notification of MERC MYT Regulations on 4 February, 2011, the Commission vide letter dated 25 March, 2011 directed all Licensees and Generating Companies to submit their MYT Business Plan and MYT Petition for the Second Control Period from FY 2011-12 to FY 2015-16, latest by 31 March, 2011. BEST submitted its MYT Business Plan Petition for the second Control Period under affidavit on, 25 August 2011. The Commission issued the Business Plan Order on 15 January, 2013 in Case No. 124 of 2011.
1.11 PETITION FOR APPROVAL OF TRUING UP OF ARR FOR FY 2010-11 AND FY 2011-12 AND DETERMINATION OF ARR AND MYT FOR FY 2012-13 TO FY 2015-16, ADMISSION OF THE MYT PETITION AND PUBLIC PROCESS
The MERC MYT Regulations, 2011 provide for filing of Business Plan for the Control Period, and for filing the MYT Petition based on the approved Business Plan.
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The Commission in its MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011 had directed BEST to file the MYT Petition for the second Control Period from FY 201213 to FY 2015-16. However, for FY 2011-12, the Commission directed BEST to file the Truing Up Petition for FY 2011-12 as per MERC Tariff Regulations. Further, vide its letter dated 31 January, 2013, BEST requested the Commission to allow BEST to file the final Truing up Petition for FY 2010-11 and FY 2011-12 as per MERC Tariff Regulations, 2005 as a separate Section, in its MYT Petition. Accordingly, BEST filed its MYT Petition on 14 February, 2013. The Commission scheduled a Technical Validation Session (TVS) on the MYT Petition on 6 March, 2013 in the presence of Consumer Representatives authorised under Section 94(3) of the EA 2003 to represent the interest of consumers in the proceedings before the Commission. The list of individuals who participated in the TVS held on 6 March, 2013 is provided at Appendix1. Further, the Commission vide email dated 6 March, 2013 communicated the preliminary data gaps identified in the MYT Petition. BEST submitted its replies to the preliminary data gaps and information requirement on 20 March, 2013. BEST filed the revised MYT Petition vide its letter dated 9 April, 2013 after incorporating all required information, with the following main prayers: i) Admit the Petition for true-up of FY 2010-11 and FY 2011-12 in accordance with the guidelines and principles outlined in the MERC (Terms and Conditions of Tariff) Regulations, 2005 and the MYT Petition for the period FY 2012-13 to FY 2015-16 in accordance with the guidelines and principles outlined in the MERC (MYT) Regulations, ii) iii) 2011; The Honble Commission be pleased to true up for FY 2010-11 and FY 2011-12 the claim as prepared by BEST; The Honble Commission be pleased to approve the ARR for FY 2010-11 and FY 201112 along with revenue gap of Rs. 1219.50 crores incurred during FY 2010-11 to FY 2011-12; Approve the aggregate revenue requirement for FY 2012-13 to FY 2015-16; Approve recovery mechanism for the revenue requirement through the category-wise tariff proposed for FY 2012-13 to FY 2015-16;
iv) v)
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vi) Condone any inadvertent omission / errors and grant the liberty to BEST to add/ change/ modify /alter this petition and make further submissions as may be required at a future date; vii) Pass such further and other orders, as the Honble Commission may deem fit and proper, keeping in view the facts and circumstances of the case.
The Commission admitted the MYT Petition of BEST on 2 May, 2013. In accordance with Section 64 of the EA 2003, the Commission directed BEST to publish its Petition in the prescribed abridged form and manner, to ensure adequate public participation. The Commission also directed BEST to reply expeditiously to all the suggestions and objections received from stakeholders on its Petition. BEST issued the Public Notice in newspapers inviting suggestions and objections from stakeholders on its Petition. The Public Notice was published in Times of India (English), DNA (English), Maharashtra Times (Marathi), and Samana (Marathi) newspapers on 8 May, 2013. The copies of BESTs Petition and its summary were made available for inspection/purchase to members of the public at BESTs offices and on BESTs website (www.bestundertaking.com) in downloadable format. The copy of the Public Notice and Executive Summary of the Petition was also available on the website of the Commission (www.mercindia.org.in) in downloadable format. The Public Notice stipulated that the suggestions and objections, either in English or Marathi, may be filed on affidavit along with the proof of service on BEST. The Commission received written suggestions and objections on various issues. The Public Hearing was held on 14 June, 2013 at 11:00 hours at Centrum Hall- 1st Floor, Centre 1, World Trade Centre, Cuffe Parade, Mumbai - 400005. The list of persons who participated in the Public Hearing is provided in Appendix 2. The Commission has ensured that the due process as contemplated under the law to ensure transparency and public participation was followed at every stage meticulously and adequate opportunity was given to all the persons concerned to file their say in the matter. Various suggestions and objections that were raised on BESTs Petition after issuance of the Public Notice, both in writing as well as orally during the Public Hearing, along with BESTs response and the Commissions rulings have been detailed in Section 2 of this Order. 1.12 ORGANISATION OF THE ORDER This Order is organised in the following eight Sections:
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Section 1 of the Order provides a brief history of the quasi-judicial regulatory process undertaken by the Commission. For the sake of convenience, a list of abbreviations with their expanded forms has been included. Section 2 of the Order lists out the various suggestions and objections raised by the objectors in writing as well as during the Public Hearing before the Commission. The various suggestions and objections have been summarized issue-wise, followed by the response of BEST and the rulings of the Commission on each of the issues. Section 3 of the Order details the Truing-Up of ARR of BEST for FY 2010-11, including sharing of efficiency gains/losses due to controllable factors. Section 4 of the Order details the Truing-Up of ARR of BEST for FY 2011-12, including sharing of efficiency gains/losses due to controllable factors. Section 5 of the Order details the approval of the ARR for the second Control Period from FY 2012-13 to 2015-16. Section 6 of the Order details the Tariff Philosophy adopted by the Commission and the category-wise tariffs approved by the Commission. Section 7 of the Order summarizes the directives given by the Commission under MYT Business Plan Order and BEST's responses.
Section 8 covers the applicability of the Order.
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List of Abbreviations
A&G ACOS APR ARR ATE BEST BMC BPL CAGR Capex CEA CoS CSD D.A. DPR DSM DSS EDEI FAC FBSM FY GIS GFA GoM HT HV IBSM IDC IDS IEX InSTS IoWC IPS Administrative and General Average Cost of Supply Annual Performance Review Aggregate Revenue Requirement Appellate Tribunal for Electricity Brihanmumbai Electric Supply & Transport Undertaking Brihanmumbai Municipal Corporation Below Poverty Line Compound Annual Growth Rate Capital Expenditure Central Electricity Authority Cost of Supply Consumer Security Deposit Dearness Allowance Detailed Project Report Demand Side Management Distribution Substation Electricity Distribution Efficiency Incentive Fuel Adjustment Cost Final Balancing and Settlement Mechanism Financial Year Gas Insulated Switchgear Gross Fixed Assets Government of Maharashtra High Tension High Voltage Interim Balancing & Settlement Mechanism Interest During Construction Intrusion Detection System Indian Energy Exchange Intra-State Transmission System Interest on Working Capital Intrusion Prevention System
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ISBT IT IVRS kVA kVAh kW kWh LT MERC MERC Tariff Regulations MERC 2011 MoD MSEDCL MSLDC MU MW MYT MVA NTI O&M OLA PF PPA PSERC R&M RE REC RoE RoIF RPO RPO Regulations RPS MYT
Inter State Bus Terminal Information Technology Interactive Voice Responsive System kilo-Volt Ampere kilo-Volt Ampere hour kilo Watt kilo Watt hour Low Tension Maharashtra Electricity Regulatory Commission MERC (Terms and Conditions of Tariff) Regulations, 2005 Regulations, MERC (Multi Year Tariff) Regulations, 2011 Mumbai Metropolitan Region Development Authority Merit Order Despatch Maharashtra State Electricity Distribution Company Ltd. Maharashtra State Load Despatch Centre Million Units MegaWatt Multi Year Tariff Mega-Volt Ampere Non-Tariff Income Operation and Maintenance Outside Licence Area Provident Fund Power Purchase Agreement Punjab State Electricity Regulatory Commission Repair and Maintenance Renewable Energy Renewable Energy Certificate Return on Equity Return on Internal Funds Renewable Purchase Obligation MERC (Renewable Purchase Obligation, its Compliance and implementation of REC framework) Regulations, 2010 Renewable Purchase Specification
MMRDA
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SAIDI SBI PLR SCADA SLDC SOP TDLR TOD TPC-G TSO TSR TVS VRS WPI YoY
System Average Interruption Duration Index State Bank of India Prime Lending Rate Supervisory Control And Data Acquisition State Load Despatch Centre Standards Of Performance Transport Division Loss Recovery Time of Day The Tata Power Company-Generation Business
Temporary Supply Others Temporary Supply Religious
Technical Validation Session Voluntary Retirement Scheme Wholesale Price Index Year on Year
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2 OBJECTIONS RECEIVED, COMMISSIONS RULING

2.1 BEST AS A LOCAL AUTHORITY
BESTs
RESPONSE
AND
Shri Ponrathnam and Shri Kamlakar Shenoy submitted that BEST cannot claim to be a Local Authority, when it is neither a Planning Authority nor does it have control over the Local Funds. Shri Kamlakar Shenoy further submitted that since, BMC and BEST have different working conditions and pay scales, salary and promotion procedure for staff of BEST is different from that of BMC, therefore, BEST cannot be termed as a Local Authority. Shri Kamlakar Shenoy and Shri Balkrishna Shetty submitted that BEST has misrepresented facts in front of the Honble ATE and the Honble Supreme Court of India to obtain the Judgment in its favour.
BESTs Reply BEST denied the objectors contention that it has obtained the Order from the Honble ATE and the Honble Supreme Court of India by misrepresentation of facts and false submissions.
Commissions Ruling The Honble Appellate Tribunal as well as the Honble Supreme Court of India have settled the status of BEST being a Local Authority in the Judgments in Appeal No. 61 of 2006 and Civil Appeal 848 of 2007 respectively. The Commission is duty bound to implement the said Judgments. Therefore, this issue cannot be agitated again and again before this Commission. 2.2 MONOPOLY OF BEST
Shri Kamlakar Shenoy submitted that BEST is not allowing TPC-D to supply electricity in the island city, hence, the consumers in Mumbai are being forced to pay more to BEST on account of its monopoly. He further submitted that had BEST been acting in the capacity of Local Authority, it would have acted in the interest of public at large by welcoming competition from TPC. He further submitted that BEST has not only established monopoly in the electricity business but also in the transport business. He submitted that there has been a huge increase in the transport tariff of BEST and yet the transport business of BEST is incurring losses without any improved services. He submitted that if BEST is unable to improve the efficiency of its
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transport business then it should either privatise the transport business so that better services can be provided to the common people or completely shut down its Transport Division. He further requested the Commission to take action against the inefficiency of BEST. BESTs Reply BEST has not replied to the above objection.
Commissions Ruling The Commission has already clarified its stand on this issue in its previous Orders. However, for the purpose of present MYT Order, the Commission is reiterating its views that in the island city of Mumbai, apart from BEST, TPC-D also has the distribution licence to supply electricity, and the Commission had passed an Order dated 22 February, 2010 in Case Nos. 60, 81, 83, 84, 85 and 86 of 2009, directing TPC-D to set up its own network in the licence area overlapping with that of BEST, in order to supply electricity to consumers desirous of getting supply from TPC-D. This Order of the Commission was subsequently upheld by the Hon'ble ATE vide its Judgment dated 4 April, 2012 in Appeal No. 149 of 2010. However, the Honble Supreme Court of India, vide its Order dated 10 May, 2012 has stayed the Order of Hon'ble ATE and granted sta tus quo in favour of BEST. Since, the matter is subjudice before the Honble Supreme Court of India, it would not be appropriate on the Commissions part to give any ruling on the same. As regards the contentions on the level of efficiency of the Transport business of BEST or whether it should privatise the same or not, is not a matter on which this Commission is concerned with in the present proceedings. 2.3 TARIFF PETITION
Shri Ponrathnam submitted that since MYT Petition is for fixing tariff for MYT Control Period, BEST and the Commission should ensure that the tariffs do not change till the next Control Period. He also added that calculation based on category-wise cost of supply should be mentioned in the Tariff Petition. Shri Ponrathnam, Shri Kamalkar Shenoy and Shri Balkrishna Shetty submitted that the tariff should be a stable and a single tariff should prevail throughout the Control Period as opposed to many tariffs being proposed by BEST. They further submitted that the Petition is difficult to understand for the common people who are not well versed with technical and regulatory aspects of the Tariff Petition.
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BESTs Reply BEST replied that it has submitted the MYT Petition under MERC MYT Regulations, 2011 and has accordingly proposed the tariff for FY 2013-14 to FY 2015-16 based on the estimated expenditure for the same period. BEST submitted that as per Regulation 11 of MERC MYT Regulations, 2011, there is a provision of Mid-Term Performance Review during the Control Period and the actual figures may vary from the proposed figures and necessary truing up shall be done during the Mid-Term Review. In response to Shri Ponrathnams suggestion regarding the calculation of tariff based on category wise cost of supply, BEST submitted that it will abide by the directives given by the Commission in the matter. Commissions Ruling BEST has submitted the MYT Petition in accordance with MERC MYT Regulations and Guidelines prescribed by the Commission wherein BEST has proposed the category-wise and consumption slab-wise tariffs to recover the projected ARR, and also ensure cross-subsidy reduction, etc. The Commission has revised the tariffs in this Order based on BESTs submission, the Commissions own analysis and in accordance with the EA 2003 and other Regulations and Policies. The same has been detailed in Section 6 of this MYT Order. As per the EA 2003, there is no requirement to determine the tariffs based on category-wise cost of supply. The issue of determination of tariff on the basis of average cost of supply or voltage-wise cost of supply has also been deliberated and ruled upon in Section 6 of this MYT Order. Further, the Commission, in accordance with MERC MYT Regulations, has directed BEST to file its Mid Term Performance Review Petition by November 30, 2014, as detailed in Section 8 of this Order. 2.4 POWER PURCHASE EXPENSES
Shri P.P Karhade and Shri Pramod Muzumdar, representing the Urja Prabhodan Kendra, submitted that Power Purchase cost of FY 2013-14 has shown a phenomenal rise of 45% over the power purchase expense of FY 2012-13 even though the quantum of power purchased has increased by only 10%. They further submitted that the Power Purchase cost for FY 2014-15 and FY 2015-16 has decreased as compared to Power Purchase cost for FY 2013-14. They enquired regarding the reasons for the same and any resultant impact of the reduction of power purchase expense on tariff. They further sought clarifications about the term RPS used in the MYT Petition.
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Shri A.R. Bapat submitted that the power purchase cost is Rs. 5.863 per unit, Rs. 7.777 per unit, Rs. 6.930 per unit, and Rs. 5.26 per unit for FY 2012-13, FY 2013-14, FY 2014-15, and FY 2015-16, respectively. He enquired from BEST regarding the reasons for sudden increase in power purchase cost in FY 2013-14 and then a reduction in the same in FY 2015-16. He further submitted that if an effort is made to effect the reduction in power purchase cost for FY 2015-16 in FY 2013-14 and FY 2014-15 also, it would be beneficial for the Utility as well as consumers. Shri George John submitted that BEST has procured about 200 MU from Spark Green at Rs. 4.75/kWh, while Maharashtra State Electricity Distribution Company (MSEDCL) has declared procurement of quantum of 600 MU for FY 2013-14 and has shown willingness to sell the same at Rs. 3.70/kWh. He enquired from BEST as to why such cheap sources of power are not being considered by it. Shri Ashok Pendse, representing the Thane Belapur Industries Association, submitted that the Power Purchase Cost of BEST is higher than that of MSEDCL and RInfra. He enquired as to when BEST intends to tap other cheap sources of power purchase. Shri Balkrishna Shetty, Shri Kamlakar Shenoy and Shri D.K. Shetty submitted that BEST has been purchasing surplus power when the demand is less thereby burdening the consumers with excessive power purchase cost.
BESTs Reply BEST submitted that during FY 2013-14, it has included amount of Rs. 395.04 Crore pertaining to prior period charges based on TPC-Gs proposal in its revised MYT Petition and hence, power purchase expense for FY 2013-14 is showing an increase. BEST further submitted that in its MYT Petition, TPC-G has proposed to convert Unit No. 6 from oil based to coal based and accordingly the power purchase cost is projected to reduce substantially in FY 2015-16. BEST further submitted that it has entered into the second MYT Control Period, i.e., from FY 2012-13 to FY 2015-16 with certain past revenue gaps and although it has not proposed to recover the entire revenue requirement for the Control Period including the past gaps yet reduction in tariff from FY 2014-15 to FY 2015-16 is not feasible even though the power purchase cost has come down in FY 2015-16. BEST further submitted that the Power Purchase Cost projected in the MYT Petition is in line with the figures approved by the Commission and in accordance with the directives given by the Commission vide the MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011. BEST submitted that in line with the Commissions directive, it has updated power purchase expense to the extent as submitted by TPC-G in its revised MYT Petition for the Page 20 of 308
Control Period from FY 2013-14 onwards in Case No. 177 of 2011. BEST added that the rise of 45% in Power Purchase expense in FY 2013-14 over FY 2012-13 is mainly due to past period recovery of Rs. 395.02 Crore as claimed by TPC-G in FY 2013-14. BEST clarified that RPS stands for Renewable Power Source and accordingly BEST intends to purchase renewable power from a company named Spark Green to meet its Renewable Power Obligation. BEST submitted that it has not received any such offer from MSEDCL to sell renewable power, however, BEST assured that it will interact with MSEDCL about any such offer and will follow up the matter. BEST added that it has entered into EPA with M/s Spark Green to meet the Renewable Power Obligation (RPO) target set by the Commission and that the rate is in line with the Commissions philosophy. In reply to the objections of Shri B.S. Shetty, Shri Kamlakar Shenoy and Shri D.K. Shetty, BEST submitted that the objectors have computed surplus purchase (MU) during FY 2004-05 to FY 2012-13. BEST submitted that while computing the surplus power purchase, the objectors have compared the total sale in MU at consumer end and the power purchase quantum in MU at Transmission < > Distribution (T< > D) and Generation < > Transmission (G < > T) interface. BEST clarified that there is an important element of transmission loss and distribution loss in between the units purchased and units sold to consumers and the same has been probably missed during the computation of the surplus power as provided by the objectors. BEST added that though the objectors have taken into account the sum of power purchased by BEST through various sources, viz. TPC-G, RPS, Bilateral (MPMG), MSLDC pool imbalance, however, OLA sale and sale through imbalance pool has not been accounted for.
BEST further submitted the detailed energy balance as approved by the Commission, for more clarity in the matter.
Commissions Ruling The Commissions observations and ruling as regards power purchase quantum and cost are detailed in Section 5.3 of this Order. 2.5 AVERAGE COST OF SUPPLY (ACOS)
Shri A.R. Bapat submitted that BEST has submitted different ACOS in the Executive Summary and different ACOS in the MYT Petition. He further submitted that it is confusing to find
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different ACOS at different places and enquired about the basis of fixing the same. He further objected that since the power purchase cost has declined in FY 2015-16, ACOS should have declined and not increased by 80 paise per unit as submitted by BEST. He further submitted that MSEDCLs recent Business Plan Petition is somewhat consumer friendly, wherein MSEDCL has provided realistic scenario for ACOS. He submitted that the licensees, though differently situated and managed, can exchange views in this regard. Shri Ponrathnam submitted that BEST has computed ACOS based on projected expenditure and on the basis of projected recovery, however, there is a variation in the two computations. He submitted that logically ACOS should be same and BEST should provide the reason for such variation. He further submitted that ACOS from FY 2012-13 to FY 2015-16 has shown an increase of 14%, 46%, 14%, and 18% respectively, which denotes a vast variation in proposed tariff. He enquired from BEST, whether it has included fuel cost in this calculation and if yes the amount of Z-factor and FAC considered for this calculation.
BESTs Reply BEST submitted that ACOS {i.e., Rs. 8.17 per kWh (FY 2012-13), Rs. 9.82 per kWh (FY 201314), Rs. 10.54 per kWh (FY 2014-15), and Rs. 11.31 per kWh (FY 2015-16)} shown in Table 16 of Public Notice and Table 48 of Executive Summary have been worked out on the basis of recovery of ARR proposed through the tariff in the respective year. BEST submitted that Voltage wise ACOS {i.e., Rs. 9.49 per kWh (FY 2012-13), Rs. 13.82 per kWh (FY 2013-14), Rs. 11.89 per kWh (FY 2014-15), and Rs. 9.76 per kWh (FY 2015-16)} has also been shown as depicted in Table 20 of the Public Notice and the same is based on the total ARR of the respective year. In reply to the objection on increase in ACOS for FY 2015-16, BEST submitted that it has entered into the second MYT Control Period, i.e., from FY 2012-13 to FY 2015-16 with past revenue gaps. BEST submitted that it has not proposed to recover the entire revenue requirement for the Control Period including past gaps. BEST added that ACOS has not reduced even after reduction in power purchase expense as the recovery of past revenue gaps have been included in the ARR. In response to the suggestion regarding MSEDCLs Business Plan, BEST submitted that is has taken note of the same. As regards the difference in ACOS projections BEST submitted that as a general principle, projected revenue recovery should match projected expenditure, however, in the projected ARR
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from FY 2012-13 to FY 2015-16 as shown in Table 16 of the MYT Petition, it has included the deficit of transport operations from FY 2004-05 to FY 2015-16. BEST submitted that in case it would have proposed tariff to recover the entire projected expenditure from FY 2013-14 to FY 2015-16, then there would have been a tariff shock to its consumers. BEST submitted that to avoid the tariff shock it has proposed part of ARR to be recovered through tariff and accordingly ACOS has been calculated on projected recovery to be made through tariff. BEST further submitted that the figures shown in Table 20 of the MYT Petition are based on the Commissions directives to BEST for carrying out an exercise of determining voltage wise cost of supply considering the Honble ATEs Judgment dated 26 July, 2012 and accordingly it had submitted a separate chapter on voltage wise cost of supply as shown in Table 20, however, the calculations were based on certain assumptions and therefore, ACOS in Table 16 and Table 20 are different. BEST submitted that since FY 2012-13 is already over, it has not proposed any tariff hike for FY 2012-13. BEST submitted that the YOY variation in proposed tariff for FY 2013-14 to FY 2015-16 is 20%, 7% and 7% respectively, the details of which are provided in Section 5.4 of the MYT Petition. BEST clarified that it has not considered Z factor for any calculation. BEST also submitted that it has not considered any increase in fuel cost while proposing the tariff and the fuel cost levied to consumers shall depend upon the FAC levied by TPC-G. BEST further submitted that it has considered power purchase cost as per TPC-Gs revised MYT Petition (Case No.177 of 2011).
Commissions Ruling The Commission has analyzed in detail all the components of the ARR and hence, the ACOS, as detailed in subsequent Sections of this Order. 2.6 DISTRIBUTION LOSSES
Shri A. R. Bapat and Shri George John commended the reduction in the distribution losses achieved by BEST. Shri George John submitted that the performance of BEST and RInfra are comparable. He submitted that while BESTs distribution losses are lower, the transmission losses are higher when compared with that of RInfra. He enquired from BEST about distribution loss spread over the last three years so as to see the time frame in which BEST has been able to achieve the present loss level.
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Shri Karhade and Shri Muzumdar submitted that the distribution losses and InSTS losses seem to be very high. They further enquired from BEST regarding the calculation of InSTS losses and the industry norm or CEA guidelines for computation of these loss figures.
BESTs Reply BEST submitted that it has made sincere efforts to reduce distribution losses and has achieved one of the lowest distribution losses in the country. BEST added that it shall continue its endeavour to keep the trend of maintaining low distribution loss levels in future as well. BEST submitted that the Maharashtra State Transmission System loss approved by the Commission is included in InSTS loss. BEST further submitted that its distribution loss is governed as per the trajectory set by the Commission and the actual distribution losses of BEST are well below the trajectory stipulated by the Commission. BEST submitted the distribution loss level during the last three years as shown in the following Table:
Particulars
FY 2010-11 7.94%
FY 2011-12 7.56%
FY 2012-13 (Provisional) 7.40%
Distribution Loss
Commissions Ruling The Commission is of the view that BEST has performed well over the years on this aspect, and the distribution losses have been lower than the targets set by the Commission. Further, the distribution loss trajectory considered by the Commission for the Control Period has been elaborated in subsequent Sections of this Order. 2.7 METERING AND BILLING
Shri Karhade and Shri Muzumdar enquired whether changeover to electronic meters has been budgeted in the capital expenditure, and in case it has been included, BEST should provide the details of the budgeted amount and the time period required for changing existing meters to electronic meters. In addition, they also enquired whether one Lakh meters that were found defective have been replaced by the manufacturers. They further submitted that BEST should provide the details of
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estimated tariff loss on account of defective meters and the burden on the consumers on account of this loss. Shri Kamlakar Shenoy submitted that the electricity bill given by BEST is not at all user friendly and the quality of electricity bills have actually degraded and earlier the electricity bills used to be printed in both English and Marathi languages, whereas at present, the bills are printed in Marathi only and are not even in an understandable format, which causes inconvenience to some of the consumers.
BESTs Reply As regards changeover to electronic meters, BEST submitted that the same has been budgeted in the proposed Capital Expenditure. BEST submitted that it has proposed a provision of Rs. 12.51 Crore, Rs 13.71 Crore and Rs. 15.71 Crore for FY 2013-14, FY 2014-15, and FY 2015-16, respectively. BEST submitted that same is evident from CAPEX figures shown in Table 97 under the head of Energy Meters in the MYT Petition. BEST submitted that presently its rate of meter replacement is around 60,000 meters per year and all endeavours are being made to increase this rate and complete this project at the earliest. BEST submitted that as on 1 June, 2013, 79682 meters were found to be defective out of which 46778 meters have been replaced. BEST submitted that the work of replacement of defective meters has been expedited. BEST further informed that the cost of replacement of faulty meters has been borne by the supplier and no charge has been passed on to the consumers in this regard. BEST further submitted that immediate remedial actions are initiated for adjustment of under billing for consumers, thereby eliminating revenue loss, and disputes in billing due to these defective meters are handled on case to case basis.
Commissions Ruling BEST should take note of the issues raised by the consumers regarding the information conveyed through its electricity bills and ensure that all necessary information is provided to the consumers in a legible manner. As regards replacement of faulty meters, BEST should ensure that it recovers all the damages from the suppliers who have supplied the defective meters, in accordance with the contractual terms.
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2.8
OPERATION AND MAINTENANCE (O&M) EEXPENSES
Shri Karhade and Shri Muzumdar submitted that audited figures of O&M expenses include employee expenses of Rs. 220.75 Crore as against the approved employee expenses of Rs. 182 Crore. They enquired from BEST regarding the reasons for the increase. Shri Ashok Pendse submitted that O&M expenses have virtually doubled in six years time and requested BEST to control the O&M expenses, as consumers cannot afford these prices. Shri Kamlakar Shenoy, Shri Balkrishna Shetty, and Shri D.K. Shetty submitted that the establishment costs in FY 2011-12 when compared to FY 2003-04 have increased by 80.31%.
BESTs reply BEST submitted that O&M expenses shown in the MYT Petition in Executive Summary under Table 30 and Table 82 of the Petition as Rs. 220.75 Crore are as per the audited accounts. BEST submitted that the O&M expenses of Rs. 182 Crore approved by the Commission were provisionally approval based on estimates submitted by it and the actual expenses are subject to variation for various reasons. BEST submitted that the detailed reasoning for the same under major components has already been provided under Section 3.5.1 on Page No. 50 to 53 of the MYT Petition.
Commissions Ruling The Commissions detailed analysis and ruling as regards O&M expenses have been elaborated in subsequent Sections of this Order. 2.9 ENERGY CHARGES
Shri Karhade and Shri Muzumdar submitted that the year on year increase of 12%, 10%, and 15% in the energy charges for LT III category consumers appears to be very high. They enquired from BEST regarding the reason for more than 15% increase in energy charges for several categories for FY 2013-14.
Shri Bapat sought reconciliation of the year on year increase in the total Variable Cost mentioned in Table 53 of the Executive Summary and that mentioned in Table 18 of Public Notice submitted by BEST.
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BESTs Reply BEST submitted that the revised tariff for FY 2011-12 was implemented after FY 2011-12 was over because of which, the revenue gap for FY 2011-12 has been created. BEST submitted that since FY 2012-13 is already over it has not proposed any tariff hike for FY 2012-13. BEST added that during FY 2013-14, an amount of Rs. 395.04 crore pertaining to net prior period gap recovery has been included in ARR. BEST submitted that all these factors have contributed towards increase in energy charges of various tariff categories. In reply to Shri Bapats query, BEST submitted that in Table 53 of Executive Summary, the total variable charge includes energy charge as well as TDLR charge whereas in Table 18 of Public Notice, individual increase in fixed charge, energy charge, and TDLR charge is shown as per the format prescribed by the Commission.
Commissions Ruling The Commissions observations and ruling as regards variable charges are detailed in Section 6 of this Order. 2.10 FUEL ADJUSTMENT COST (FAC) Shri Kamlakar Shenoy enquired from BEST regarding the rationale behind collection of FAC because as per Page No. 16 of the tariff booklet, there is a ceiling on the recovery of FAC charges, which is limited to 10% of energy charges. However, the FAC charges collected is around 25% and 28% from residential consumers and commercial consumers, respectively. He alleged misappropriation of funds on part of BEST. He enquired from the Commission as to why the Commission was allowing BEST to recover various charges from consumers and promoting BESTs inefficiency.
BESTs Reply BEST has not replied to the above objection.
Commissions Ruling The Commission clarifies that the Distribution Licensees are allowed to recover the variation in fuel and power purchase costs through the FAC formula, which is specified in the MERC Tariff Regulations, 2005 and MERC MYT Regulations, 2011, in line with Section 62(4) of EA 2003.
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The FAC ceiling has been enhanced to 20% and levy of proportionate FAC has been approved by the Commission through its Orders. 2.11 LOAD PROFILE AND POWER FACTOR PENALTY Shri Ponrathnam enquired from BEST whether there has been an improvement in the load profile with the mechanism of incentive/disincentive as illustrated in previous Orders passed by the Commission. In addition, he enquired about the increase in efficiency on account of the mechanism of power factor penalty. He also enquired regarding the efficacy of the power factor penalty mechanism. Further, he enquired from BEST whether with levy of MDI based tariff, it has been able to reduce its requirement in MW terms and whether MDI based tariff should be levied for domestic consumers as well. He asked BEST to submit details of impact of these mechanisms on cost of supply and assure that these mechanisms are not just methods for increasing the revenue.
BESTs Reply BEST submitted that the parameters such as power factor, maximum demand and load factor are vital to smooth functioning of power system and in order to keep these under control, it is standard industry practice to levy surcharge on defaulters or give incentive to performers. BEST submitted that the practice of levying of power factor surcharge, ToD surcharge, and LF incentive are therefore from the point of view of system operation and is not a tool for generating additional revenue. BEST submitted that it has been able to maintain a very good power factor of above 0.98 and the maximum demand that occurred in FY 2009-10 was 900 MW, in FY 2010-11 it was 894 MW, while in FY 2011-12 it was 883 MW respectively. BEST submitted that its distribution loss is lowest amongst all the distribution utilities in the State of Maharashtra and one of the lowest in India. BEST added that this has been possible due to the principle of incentive/ penalty levied in the consumers tariff. BEST further mentioned that generally the total penalty amount offsets the total incentives.
Commissions Ruling The Commission is of the view that the present system of Power Factor penalty and incentive is well established and has been approved by the Commission only after following the due regulatory processes. Further, all revenue earned though penalties as well as expense incurred
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due to such incentives are considered as part of the revenue and expenses, and hence, do not lead to any additional revenue to the Licensee. 2.12 COMPARISON OF FUEL ESTABLISHMENT COST AND OPERATING MATERIALS AND
Shri B.S. Shetty, Shri Kamlakar Shenoy and Shri D.K. Shetty submitted that on comparison of Fuel and Operating materials and establishment cost for past years, i.e, from FY 2003-04 to FY 2011-12, it is observed that the fuel and operating materials cost has increased by 78.94% in FY 2011-12 while establishment cost compared to FY 2003-04 has increased by 80.31%. They further submitted that total dues from State Government and other Local bodies amount to Rs. 1928 Lakh in FY 2010-11. They further submitted that BEST has taken Loan from State Government in FY 1998-99 of Rs. 3.83 Crore at high interest rate of 14.25% p.a. They submitted that as a result of all these, not only has BEST increased electricity tariff by approximately 600% when compared to that in FY 2003-04 but it has also increased the bus fares by approximately 400%.
BESTs Reply BEST submitted that percentages are required to be worked out on year on year basis instead of taking base year as FY 2003-04, and submitted the detailed analysis of year on year increase in income and expenditure of the Transport Division. As regards the dues from State Government and other Local Bodies, BEST submitted that it is following up to recover the overdue amount. As regards Loan from the State Government, BEST submitted that it has paid 15 instalments of the loan till FY 2012-13 and balance 9 instalments are yet to be paid against DPDC loan granted by State Government. BEST submitted that it is following up the matter with the State Government for pre payment of said loan due to higher rate of interest. As regards increase in bus fares, BEST replied that the bus fares have been increased by 146% if the base year is considered as FY 2003-04 and not 400% as mentioned by the objectors. BEST stated that similar issues have been raised and were dealt in the regulatory process in Case No. 20 of 2013 and 21 of 2013 and after due diligence, the Commission had issued its Order dated 5 June, 2013. Page 29 of 308
Commissions Ruling The Commission analyses all the expenses and incomes and only after prudence check, the same is allowed to be recovered through the ARR and tariffs, as elaborated in subsequent Sections of this Order. The Commission directs BEST to expedite the process of recovery of the pending dues from the State Government and other Local Bodies. 2.13 INCREASE IN TARIFF Shri Balkrishna Shetty and others submitted that on comparing the tariff in FY 2003-04 to the tariff in FY 2011-12, there has been an increase of nearly 600%. Shri Kamalkar Shenoy submitted that tariffs have been increased based on misleading projections in BESTs Vigilance Report. He submitted that at the time of projection BEST includes large amount as recovery from Vigilance drive; however, at the time of actual recovery the amount recovered is low as compared to projections thereby resulting in increased tariff. Shri Ashok Pendse submitted that BEST will soon become the costliest power supply company in the country and that the common man is incapable of paying such high prices.
BESTs Reply BEST submitted that the revised tariff for FY 2011-12 was implemented after FY 2011-12 was over and this created revenue gap for FY 2011-12. BEST submitted that it has not proposed any tariff hike for FY 2012-13 as the financial year is already over. BEST further submitted that during FY 2013-14, payments to TPC-G for Rs 395.04 Crore towards net prior period gap have also been included based on TPC-Gs proposal in its revised MYT Petition. All these factors have contributed towards increase in tariff of various categories including residential consumers.
Commissions Ruling The Commission has done detailed analysis of the Tariff proposal submitted by BEST and has approved tariffs for different consumer categories, during the Control Period from FY 2013-14 to FY 2015-16 as detailed in Section 6 of this Order, in order to recover the approved ARR and revenue gap. The Commission has made an endeavour to ensure that none of the consumer categories are subjected to tariff shock due to the revised tariffs during the Control Period.
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2.14 TOD TARIFF Shri Ponrathnam enquired from BEST as to why no TOD tariff is being considered for residential consumers. He further submitted that consumption of residential consumers is generally during off peak hours when costly generation is not required and hence, the domestic consumers consumption forms the low cost power in MoD stack whereas consumption of commercial consumers is more during peak hours, which add the costly power to the stack. He added that the commercial consumption leads to a higher ACOS and it is reasonable that these consumers subsidise the domestic consumers by paying for actual ACOS.
BESTs Reply
BEST submitted that the objective behind the TOD tariff is the intention of shifting demand from the present peak hours of distribution licensees system to the present off peak hours of the distribution licensees system. BEST submitted that its peak demand occurs during the afternoon hours of the day, i.e., 12.00 hrs to 16.00 hours, which is mainly on account of the AC load of commercial category consumers, who comprise around 45% of BESTs total consumption. BEST submitted that residential consumers use electricity during off peak hours and therefore, introduction of TOD tariff to residential consumers will not benefit the system. BEST further added that it will abide by the directives of the Commission in this case.
Commissions Ruling
The Commission has noted the suggestions presented by the objector. The residential category consumption occurs mainly during evening hours, which are system peak hours if the whole State system is considered, though it falls within the off-peak hours if BESTs load curve is considered in isolation. The Commission has been determining TOD tariffs for all the distribution licensees in the State on the basis of the system peak and off-peak hours, rather than the respective licensees load curve, since, it is beneficial if the peak hours of different licensees occur at different times during the day, so that the contracted power can be reduced and all licensees can utilise the same power during their respective peak hours, under the Balancing and Settlement system prevalent in the State. Moreover, the Commission is of the view that it is impractical to implement TOD tariffs for residential category consumers, not only on account of the significant cost of metering involved, but also on account of the fact that residential consumers have very low ability to shift their consumption because of the nature of their consumption. The Commission has elaborated its views on the issue of Retail Supply Tariffs, in Section 6 of this Order. Page 31 of 308
2.15 CROSS SUBSIDY Shri Ponrathnam submitted that as per National Tariff Policy (NTP) and Electricity Act 2003 (EA 2003), cross subsidy should decrease. He added that BEST is levying additional cross subsidy in the form of TDLR and that the reduction of cross subsidy to 20% mandated in NTP is being violated in this case. He also enquired regarding the roadmap for reduction in cross subsidy. He further enquired from BEST whether it has considered total ACOS for calculating cross subsidy or it has computed cross subsidy by using voltage wise ACOS. He submitted that BEST should provide a timeline when it plans to calculate cross subsidy in terms of actual cost of supply instead of average cost of supply. Shri George John submitted that ACOS considered for working out cross subsidy is at variance with the proposed ARR. He enquired about the reasons for the same. He further enquired from BEST regarding the cross subsidy in absolute value instead of cross subsidy reduction in percentage terms.
BESTs Reply BEST submitted that it has considered ACOS with respect to ARR proposed to be recovered in the respective year through tariff while calculating the cross-subsidy surcharge. BEST submitted that to calculate the cross subsidy in terms of actual cost of supply instead of average cost of supply, a detailed study of network so as to identify category-wise / slab-wise cost of supply and to identify tariff category-wise losses are required. BEST submitted that this being a highly complex activity, it would like to follow necessary regulatory guidelines in the matter. BEST submitted the proposed category-wise cross subsidy component in absolute terms for FY 2013-14 to FY 2015-16 on per unit basis. BEST further submitted that it has proposed reduction in the cross-subsidy generally in accordance with the Commissions cross-subsidy reduction roadmap submitted to Government of Maharashtra (GoM) vide letter dated 21 June, 2012. BEST further submitted that it has provided details in Table 122 and Table 123 on Page No. 109 and Page No.110, respectively, of the MYT Petition. As regards Shri George Johns objection, BEST submitted that it has considered ARR and ACOS for calculation of cross subsidy as follows:
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FY Particulars ARR (Proposed to be recovered through tariff) (A) Estimated Energy Sales (B) ACOS = A/B*10 Unit 2013-14 Rs. Crore MU Rs/kWh 4643.14 4729.22 9.82
FY 2014-15 5289.38 5016.57 10.54
FY 2015-16 6037.26 5338.43 11.31
Commissions Ruling The computation of prevalent cross-subsidy and cross-subsidy reduction based on revised tariffs approved by the Commission are elaborated in Section 6 of this Order, along with the detailed rationale for the same. 2.16 TRANSPORT DIVISION LOSS RECOVERY CHARGE (TDLR) Shri N. Ponrathnam submitted that TDLR is supposed to be reduced and finally eliminated towards the end of the Control Period. He further enquired from BEST regarding any roadmap being followed for reduction of the same. Shri Balkrishna Shetty, Shri Kamlakar Shenoy and Shri D.K. Shetty submitted that on comparison of expenditure and interest cost in FY 2007-08 to that in FY 2011-12, it is observed that there has been an exorbitant increase in the two heads. They further submitted that the interest expense alone forms 27% of the total increase in expenses of the Transport Division expenditure. They further submitted that Air Conditioned (AC) Bus division loss is Rs. 400 Crore, which is approximately 83% of total increase in expenses. They submitted that this clearly indicates that electricity consumers of the island city of Mumbai are subsidizing AC bus customers. They added that the electricity consumers of BEST in the island city of Mumbai are less than 15% of the total electricity consumers including consumers of other distribution licensees. They further submitted that the allowance of TDLR has been based upon misrepresentation of facts and the Commission does not have jurisdiction over Transport Loss. They further requested the Commission that arrangement should be made such that BESTs accounts should be audited by some third party from amongst the public rather than relying on accounts audited by the municipal auditor.
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Shri Karhade, Shri Muzumdar and Shri Kiran Parekh submitted that the methodology of estimation of TDLR is not understood. They further objected to the inclusion of AC bus division loss in TDLR. Shri Ashok Pendse, submitted that burden on the consumers on account of transport division loss is to the extent of Rs. 1944 Crore, which is approximately 50% of the Aggregate Revenue Requirement (ARR) for FY 2012-13. Shri Ashok Pendse, Smt. Anju Tolani and others suggested that BMC has enough funds and BEST should look towards BMC or the State Government for subsidizing transport loss instead of imposing this burden on the electricity consumers. Shri George John submitted that BEST has consciously created a deficit in FY 2012-13 and that at the end of the Control Period, the cumulative deficit would be around Rs. 3998 Crore. He argued that in such scenario BEST would be left with three options: a) Government bailout b) Government backs out, resulting in an increase in tariff shock c) Reduction of inefficiency He submitted that none of the options seems feasible and therefore, BEST should try to improve its efficiency and performance in the transport division.
BESTs Reply BEST submitted that the details of transport deficit have been submitted in Table No. 105 on Page No. 93 of the MYT Petition and in the same table, the actual transport deficit from FY 2004-05 to FY 2012-13 along with projected transport deficit from FY 2013-14 to FY 2015-16 has been given. BEST submitted that from the same it is evident that the transport deficit is being reduced gradually by FY 2015-16. BEST submitted that TDLR charge is determined by apportioning the proposed recovery of transport deficit over the total estimated unit sales for respective years. BEST submitted that a detailed explanation is given under Section 4.2.11 at Page No. 92 and 93 of the MYT Petition along with the year-wise deficit approved by the Commission. BEST submitted that the actual audited figures of FY 2010-11 and FY 2011-12, and provisional figures of FY 2012-13 have also been shown in MYT Petition. BEST further submitted that as per the details given in Table 105 at Page No. 93 of the MYT Petition, the estimated loss for FY 2013-14 is Rs 260.21 Crore whereas the provisional amount of Transport deficit net of RoE and RoIF for FY 2012-13 is Rs. 273.03 Crore, thereby showing a reduction of Rs. 12.82 Crore (i.e., less by 4.7%) and not 240% as contended by the objectors.
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BEST further submitted that the accumulated Transport Division loss over the years from FY 2004-05 to FY 2008-09 was approved by the Commission for recovery vide its Order dated 26 December, 2012 in Case No. 80 of 2012. BEST submitted that the recovery of accumulated deficit has been apportioned over FY 2012-13 to FY 2015-16 and therefore, deficit recovery figure shown in the Petition is not standalone transport deficit for FY 2013-14. BEST submitted that the total increase in cost has been worked out by the objectors by taking the base year as FY 2007-08 due to which an astonishing increase in the cost over the period is being observed, however, the same is incorrect and illogical. BEST submitted the increase in the expenditure and percentage rise on year on year basis and difference in interest cost from FY 2007-08 to FY 2011-12.
As regards the burden of losses of AC bus being imposed on the electricity consumers, BEST submitted that the operation of AC buses was started for giving more comfort to the commuters and also to avoid the traffic congestion in the city of Mumbai. BEST further clarified that the exact figures of Income & Expenditure of AC Bus operations for FY 2011-12 were Rs 44.91 Crore (Income) and Rs 151.07 Crore (Expenditure) resulting in a loss of 106.16 Crore in FY 2011-12 and not Rs. 400 Crore as contended by the objectors. BEST added that the management has already taken the decision to curtail the said AC bus operations from FY 2013-14.
BEST further submitted that it is already taking various steps to curtail the deficit of Transport Division and loss due to operation of various AC buses/routes. BEST added that under the MYT Petition, although it has proposed to recover the Transport deficit through TDLR, however, it is trying to make Transport Division self-sufficient by FY 2015-16.
Commissions Ruling As regards the objection on the pass-through of losses incurred by the Transport Division of BEST through the electricity tariffs, this issue is not open before this Commission as the Commission had already implemented the Honble Supreme Courts Judgment dated 8 February, 2011 in Civil Appeal No 848 of 2007 by issuing an Order dated 16 May, 2012 in Case No 171 of 2011. Further, the Commissions observations and ruling as regards the transport deficit are detailed in Section 5 of this Order.
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2.17 CARRYING COST Shri Karhade and Shri Muzumdar submitted that BEST has proposed carrying cost of Rs. 148.73 Crore against the approved figure of Rs. 12.23 Crore. They enquired from BEST regarding the reasons for the same.
BESTs Reply As regards the carrying cost, BEST submitted that a detailed explanation with various reference Orders of the Honble ATE has been provided in Section 3.21 on Page No. 70 to 73 of the MYT Petition. Commissions Ruling The Commissions observations and computation of the carrying cost are detailed in the relevant Sections of this Order. 2.18 SALES AND REVENUE AT EXISTING TARIFF Shri Karhade and Shri Muzumdar enquired regarding the reasons for revenue at existing tariff being lower than the approved figure. They also submitted that sales projections for FY 2013-14 for LT II category has shown a reduction of 25% and enquired from BEST regarding the reasons for the same. Shri Ponrathnam submitted that BEST has stated that normally the licensee should recover at least 30%-40% of its fixed cost through fixed charges so that revenue stability is assured irrespective of the consumption. He enquired from BEST regarding the basis of calculation to arrive at this 30%-40% level. He further submitted that BEST should provide details of revenue recovered in the form of Demand Charges and Energy Charges.
BESTs Reply As regards reduction in sales projections for FY-2013-14 for LT II category, BEST submitted that the Commission vide its Order dated 16 May, 2012 in Case No.171 of 2011 had introduced new tariff category for Hospitals and Educational institutions classified under category LT IX (a) and LT IX (b). BEST submitted that for estimating sales for LT II categories, proportionate sales estimated for LT IX (a) and LT IX (b) have been deducted due to which there appears to be a reduction in the sales growth of commercial categories. BEST submitted that combined sales
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projections for LT II categories and Hospitals and Educational institutions show a growth of 7.5%. BEST submitted that details of projected category-wise revenue has been provided in the form of demand charge and energy charge in Format 15.1 to Format 15.4 of MYT Petition. BEST further submitted that the Commission in its Order dated 16 May, 2012 in Case No. 171 of 2011 has stated that normally the licensee should recover at least 30-40% of its fixed costs through the fixed charges and therefore, it has proposed tariffs in accordance with the Commissions tariff philosophy.
Commissions Ruling The Commissions observations and ruling as regards sales projections are detailed in Section 5.1 of this Order. The revenue from existing tariff has been computed by multiplying the prevalent tariff with the respective category-wise sales and demand, etc. The approved fixed and demand charges are detailed in Section 6 of this Order. 2.19 COMPARISON OF PAST REVENUE (GAP)/SURPLUS Shri Balkrishna Shetty, Shri Kamlakar Shenoy and Shri D.K. Shetty submitted that on analysis of BESTs Income and Expenditure over the past 10 year periods, it is observed that during the third 10 year period, BEST was showing a surplus of Rs. 42.59 Crore. However, in the fourth 10 year period, BEST has been claiming a deficit of Rs. 2459.85 Crore. They enquired from BEST regarding the reasons for the same.
BESTs Reply BEST submitted that the Electric Supply Business has always earned surplus, while the Transport Business (Buses) has always been in a deficit situation and in the 30 year period from FY 1973-1974 to FY 2002-03, the surplus (difference between income and expenditure) earned by the Electric Supply Business was generally sufficient to off-set the revenue deficit of the Transport Business and there had been no significant net surplus / (deficit), which ranges between 1% to 2% of the total income. BEST further submitted that from FY 2004-05 onwards, it was not able to entirely off-set Transport Business losses, on account of the Commissions decision to disallow cross-subsidy of Transport Business by Electric Supply Business, which has now been set aside by the Honble Supreme Court vide its Judgment dated February 8, 2011 in Civil Appeal No. 848 of 2007 and subsequent allowance by the Commission.
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Commissions Ruling
The Commission is of the view that this issue has been discussed at length in previous Orders of the Commission and various Judgments of the Honble ATE and the Honble Supreme Court of India. The concerned authorities have given their Judgments, upon which the Commission cannot comment. All these issues have been settled in the respective Judgments and therefore, these issues are hit by res judicata. 2.20 ENERGY EFFICIENCY Shri George John submitted that for FY 2013-14, the difference between ACOS and the per unit rate for category having 0-100 units consumption per month is about Rs. 7 per unit. He suggested that BEST should make efforts to implement energy efficiency measures for this consumption slab by providing them with energy efficient systems on instalment or even on subsidy.
BESTs Reply BEST submitted that BEST has taken initiatives for implementing a pilot project for Demand Side Management for the consumers residing in A Ward. BEST submitted that according to the pilot project, energy efficient T5-Fluorescent Tube Lights would be given to 25000 consumers and BEEs 5 star label Ceiling Fans will be given to 5000 consumers at subsidized rates. BEST submitted that it has appointed a supplier for the execution of the said pilot project. BEST added that it is giving adequate publicity by way of posters displayed in its ward offices, electricity bill collection centres, electricity bills, BESTs website, etc. BEST also submitted the details of the pilot DSM scheme that it has initiated.
Commissions Ruling The Commission approves DSM schemes submitted by BEST under a separate process after due scrutiny, and the expenses and benefits towards the same are included in the Petition as applicable. 2.21 FEES FOR FILING A PETITION Shri Kamlakar Shenoy submitted that though filing a Petition is open to any member of the public, the fees and charges associated with filing the Petition are very high. He added that Page 38 of 308
Commission is duty bound to work towards consumer protection and levying of such exorbitant charges towards Petition filing fees is not justifiable. He added that the Commission should keep such charges as low as possible to encourage the public to put forward their views before the Commission on any matter.
BESTs Reply BEST has not replied to the above objection.
Commissions Ruling The objection regarding fees and charges for filing the Petition is not within the purview of the present exercise, which is being undertaken to approve the truing up of the ARR for FY 2010-11 and FY 2011-12 and Multi Year Tariff Determination for BEST.
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3 TRUING UP OF AGGREGATE REVENUE REQUIREMENT FOR FY 2010-11

The Commission, in its Order dated 15 January, 2013 in Case No. 124 of 2011 for approval of MYT Business Plan for the second Control Period from FY 2012-13 to FY 2015-16 had directed BEST to submit its Truing Up Petition for FY 2011-12 as per MERC Tariff Regulations, 2005, as a separate Section in its MYT Petition for FY 2012-13 to FY 2015-16. Vide its letter dated 31 January, 2013, BEST sought the Commissions permission to file the Petition for final true-up for FY 2010-11 and FY 2011-12, along with the MYT Petition. Accordingly, in its MYT Petition, BEST has submitted a separate Section and sought approval for the final truing up of expenditure and revenue for FY 2010-11 and FY 2011-12 based on actual expenditure and revenue as per the audited accounts. Accordingly, in this Section, the Commission has analysed all the elements of actual expenditure and revenue for BEST for FY 2010-11 and has undertaken the truing up of expenses and revenue after prudence check. Further, for FY 2010-11, the Commission has approved the sharing of gains and losses on account of controllable factors between BEST and the consumers, in accordance with Regulation 19 of the MERC Tariff Regulations, 2005 in this Section. 3.1 SALES
BEST submitted that in its supply area, Residential and Commercial category consumers comprise the bulk of the consumption. BEST submitted that in FY 2010-11, Residential category and Commercial category accounted for 41% and 50% of the total energy sold, respectively, while Industrial consumers accounted for 7% of the total energy sold. BEST submitted that for FY 2010-11 the actual sale was 4267.11 MU which is same as that approved in APR Order dated 16 March, 2012 in Case No. 125 of 2011. The actual category wise sales for FY 2010-11 along with the provisional sales for FY 2010-11 approved in APR Order dated 16 March, 2012, as submitted by BEST is shown in the following Table:
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Table: Comparison of Sales for FY 2010-11submitted by BEST (MU) Approved FY 2009-10 Sl. No. Consumer category Final Trueup, Case No. 125 of 2011 Approved FY 2010-11 Provisional True-up, Case No. 125 of 2011 Audited FY 2010-11
Actual
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
LOW TENSION CATEGORIES LT I BPL LT I Residential LT II A Commercial upto 20 KW LT II B Commercial >20KW<=50KW LT II C Commercial <50KW LT III Industrial upto 20 KW LT IV A Industrial >20KW<=100KW LT IV B Industrial >100KW LT V Advt.& Hoardings LT VI St.Ltg. LT VII A Temp. Religious LT VII B Temp. Others LT VIII Crematorium & Burial Grounds HIGH TENSION CATEGORIES HT I Industries HT II - Commercial HT III - Group Housing HT IV -Temp. Supply Total
0.09 1693.88 876.83 254.38 526.89 57.39 53.09 48.66 2.85 28.88 0.05 30.82 1.21 136.53 374.81 32.15 2.64 4121.17
0.13 1712.82 895.22 274.76 555.10 53.72 62.27 48.11 3.59 26.96 0.10 35.63 1.10 132.15 425.55 32.22 7.70 4267.11
0.13 1712.81 895.21 274.76 555.10 53.72 62.27 48.11 3.59 26.96 0.10 35.63 1.10 132.15 425.55 32.22 7.70 4267.11
BEST submitted that there has been a growth of 3.54% in sales in FY 2010-11 as compared to that in FY 2009-10. The Commission has accepted BESTs submission in this regard and approved actual sales for FY 2010-11 as submitted by BEST in the Petition under the truing up process. The summary of the sales approved by the Commission for FY 2010-11 as compared to the sales approved by the Commission in APR Order is given below:
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Table: Approved Sales for FY 2010-11(MU) Particulars APR Order Actuals Approved after Truingup 4267.11
Sales 3.2
4267.11
4267.11
DISTRIBUTION LOSSES AND ENERGY INPUT REQUIREMENT
BEST submitted that the actual distribution loss in FY 2010-11 was 7.94%, as against 7.91% approved by the Commission in APR Order dated 16 March, 2012 in Case No. 125 of 2011 as given in the Table below: Table: Distribution Losses for FY 2010-11 as submitted by BEST (%) Particulars Distribution Losses APR Order 7.91% Actuals 7.94%
Energy Balance summary for FY 2010-11 as submitted by BEST is shown in the following Table: Table: Summary of Energy Balance for FY 2010-11 as submitted by BEST (MU) Sr. No. 1 2 3 4 5 Sales Distribution Loss Energy Requirement at T< >D interface Intra-State Transmission Loss Energy Requirement at G< >T interface Particulars FY 2010-11 APR Order 4267.11 7.91% 4633.39 4.31% 4842.08 Actuals 4267.11 7.94% 4635.28 4.38% 4847.79
It is observed that the actual intra-State transmission losses for FY 2010-11 as per MSLDC website (http://mahasldc.in/wp-content/reports/Transmission-loss-for-2011-12.pdf) are 4.31%, and accordingly, the Commission has considered Transmission losses at 4.31% based on which the distribution loss for FY 2010-11 works out to 8.01%. Accordingly, while Truing- Up, the Commission has approved distribution loss at 8.01% for FY 2010-11. In view of the above, the Commission has accepted BESTs submission of energy balance stating the energy requirement of 4847.79 MU at G < > T Interface, considering the actual sales
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of 4267.11 MU, and the actual distribution loss of 8.01% for FY 2010-11 as shown in the Table below: Table: Summary of Energy Balance for FY 2010-11 approved by the Commission (MU) Sr. No. 1 2 3 4 5 Sales Distribution Loss Energy Requirement at T< >D interface Intra-State Transmission Loss Energy Requirement at G< >T interface Particulars FY 2010-11 4267.11 8.01% 4638.85 4.31% 4847.79
Since, the actual distribution losses are lower than the targeted distribution loss of 9.50% for FY 2010-11, the corresponding efficiency gains have been shared between BEST and the consumers, as elaborated in subsequent paragraphs of this Section of the Order. 3.3 POWER PURCHASE QUANTUM AND COST FOR FY 2010-11
BEST submitted that for FY 2010-11 it had procured power primarily from TPC-G, while remaining power was procured from renewable power sources, external sources, IEX, bilateral sources, etc. BEST further submitted that for FY 2010-11, it has considered source-wise power purchase expense as per the audited accounts of FY 2010-11, as summarised in the Table below: Table: Source wise Power Purchase Cost for FY 2010-11 as submitted by BEST
APR Order (Case No. 125 of 2011) Rs. MU Crore Rs./kWh Actual Rs. Crore
Particulars
MU
Rs./kWh
TPC-G (excluding Unit 8) TPC-G Unit 8 RPS Additional Power Purchase / (Sale) Sales by BEST (including Pool imbalance) Standby Charges Incentive Less: Hydel Rebate Transmission Charges
4343.33 781.94 215.36 65.96 (564.51)
1541.34 291.71 76.58 43.01 (277.92) 109.63 16.82 (37.91) 111.11
3.55 3.73 3.56 6.52
4343.33 781.94 218.91 65.96
1629.17 203.87 109.59 43.01 (275.46) 109.63 16.82 (37.91) 111.11
3.75 2.61 5.01 6.52 4.9
4.92 (562.36)
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Particulars
APR Order (Case No. 125 of 2011) Rs. MU Crore Rs./kWh
MU
Actual Rs. Crore
Rs./kWh
SLDC Charges Miscellaneous Charges Less: Rebate Given by TPC-G Total Power Purchase Expenses
0.63 17.43 (23.83) 4842.08 1868.61 3.86 4847.79
0.69 17.43 (22.44) 1905.52 3.93
3.3.1 Procurement from TPC-G BEST submitted that the overall rate of power purchase has increased from Rs. 3.86/ kWh to Rs. 3.93/kWh, which is primarily on account of increase in overall charge levied by TPC-G for all Units except Unit 8. BEST added that this charge has increased from Rs. 3.55 per unit to Rs. 3.75 per unit for all Units except Unit-8. The Commission has approved the actual cost of power purchase by BEST from TPC-G, since, it is in accordance with the tariff approved by the Commission for sale of energy by TPC-G. The summary of power purchased by BEST from TPC-G for FY 2010-11 as approved after final Truing-up is tabulated below: Table: Power Purchase from TPC-G for FY 2010-11 approved by the Commission
APR Order (Case No. 125 of 2011) Particulars Actuals Quantum (MU) 4343.33 781.94 5125.27 Cost (Rs Crore) 1629.17 203.87 1833.04 Average Rate (Rs. Per unit) 3.75 2.61 3.58 Approved after Truing Up Quantum (MU) 4343.33 781.94 5125.27 Cost (Rs Crore) 1541.34 291.71 1833.04 Average Rate (Rs. Per unit) 3.55 3.73 3.58
MU
TPC-G: Existing 4343.33 781.94 5125.27 Units (Units 4-7 and Hydro) TPC-G Unit 8 TOTAL
Rs. Crore
1541.34 291.71 1833.04
Rs./k Wh
3.55 3.73 3.58
3.3.2 Renewable Purchase Obligations (RPO) BEST submitted that the increase in RPO cost is on account of the fact that the actual cost of power procurement from RPO (Rs. 4.91/kWh, i.e., total cost of Rs. 111.53 Crore divided by energy purchased at the seller end, i.e., 227.22 MU) is higher than the approved cost (Rs.
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3.56/kWh). The source-wise energy purchase from renewable energy sources for FY 2010-11 as submitted by BEST is given below: Table 9: Details of Power Purchase from RE sources in FY 2010-11 as submitted by BEST
Energy Purchased @Seller End Energy Purchased @InSTS (Energ y+ O.A.) Cost/Unit @ Purchase End Cost/Unit @MSETC L (InSTS)$
Month
Energy charges
O.A. Charges
Rebate
Short Payment
Total Cost
MU Apr'10 May'10 Jun'10 Jul'10 Aug'10 Sep'10 Oct'10 Nov'10 Dec'10 Jan'11 Feb'11 Mar'11 TOTAL 16.49 18.73 18.92 20.94 19.06 11.41 6.88 12.34 39.27 28.51 15.26 19.42
MU 15.91 18.01 18.11 19.98 17.91 10.72 6.49 11.91 38.61 27.97 14.69 18.59
Rs. Million 81.56 87.48 81.47 83.43 75.76 47.13 30.01 60.17 198.43 143.87 78.55 98.15
Rs. Million 0.94 1.02 1.05 1.18 1.03 0.53 0.32 0.77 2.48 1.97 0.84 1.22
Rs. Million 82.50 88.50 82.53 84.61 76.80 47.66 30.33 60.94 200.91 145.84 79.39 99.38
Rs/kWh 5.00 4.73 4.36 4.04 4.03 4.18 4.41 4.94 5.12 5.11 5.20 5.12
Rs/kWh 5.19 4.91 4.56 4.23 4.29 4.44 4.67 5.12 5.20 5.21 5.40 5.34
Rs. Million 1.02 0.99 0.08 0.98 0.75 0.49 0.28 0.88 3.77 2.26 1.14 1.15
Rs. Cr. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.11
Rs. Cr. 8.35 8.95 8.36 8.56 7.75 4.81 3.06 6.18 20.47 14.81 8.05 10.05 111.53
227.22 218.91 1066.02 13.36 1079.38 4.75 4.93 14.77 $-The tariff is inclusive of Transmission Charges, Wheeling Charges, and Wheeling Losses
BEST submitted that vide APR Order dated 16 March, 2012 in Case No. 125 of 2011, the Commission had approved RPO cost of Rs. 53.06 Crore against actual cost of Rs. 93.73 Crore for FY 2009-10 and RPO cost of Rs. 76.58 Crore as against actual cost of Rs. 109.59 Crore for FY 2010-11. BEST submitted that the difference in actual RE purchase cost and the cost approved by the Commission for FY 2009-10 and FY 2010-11 is Rs. 40.67 Crore and Rs. 33.01 Crore, respectively. BEST submitted that being partly aggrieved by the above referred Order of the Commission, BEST has filed Appeal No. 265 of 2012 before the Honble ATE, which has been admitted for further hearing. BEST submitted that since, the Judgment of the Honble ATE is still awaited, it has not included the disallowed amount of Rs. 33.01 Crore in the present Petition, for the computation of ARR of FY 2010-11. BEST added that the total cost of Rs. 73.68 Crore would be included in the Mid-term Review Petition as and when the Judgment of the Honble ATE is passed.
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As regards average rate of power purchase, the Commission observed that BEST has procured power from RE sources at a rate much higher than the preferential tariff approved by the Commission in its various Orders. In line with the approach adopted in its previous Orders, the Commission has considered the preferential tariff as submitted by BEST and recomputed the allowable power purchase cost for RE power purchase. As regards non-fulfilment of the RPO targets, the Commission, vide its Order dated 17 April, 2013 in Case No. 30 of 2012 had ruled as follows: 10. Having heard the Petitioner and after considering the relevant material placed on record, the Commission observed that BEST has already fulfilled its non-solar RPO target for the FY 2010-11 and 2011-12. It is also observed that BEST is likely to fulfil the non-solar target for FY 2012-13 before 31 March, 2013. 11. The Commission is of the view that BEST has given adequate justification to demonstrate that it has undertaken all the efforts in procuring Solar power in order to meet its RPO targets and in spite of the efforts undertaken by it, it faced a genuine difficulty in meeting its solar RPO target. Further, the Commission opines that any constraint regarding availability of Solar power or Solar RECs for meeting Solar RPO targets in future could be mitigated by tying up adequate quantum and sources for Solar power in a timely manner through advance actions and/or timely purchase of Solar RECs from the market. 12. As per Regulation 18.1 of MERC (RPO-REC) Regulations, 2010, the Commission has powers to relax or waive any of the provision of the said Regulations after giving an opportunity of being heard to parties likely to be affected. Relevant extract of said Regulations is as under: 18.1 The Commission may by general or special order, for reasons to be recorded in writing, and after giving an opportunity of hearing to the parties likely to be affected may relax or may waive any of the provisions of these Regulations on its own motion or on an application made before it by an interested person. 13. Thus, the Commission hereby relaxes/waives the Solar RPO targets as stipulated under Regulation 7.1 of the MERC (RPO-REC) Regulation 2010 for BEST for FY 201011 and FY 2011-12 and directs BEST to fulfil the solar target on a cumulative basis by FY 2015-16.
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14. Regarding the shortfall in RPO targets for non-solar (including mini/micro hydro targets) for FY 2010-11 and FY 2011-12 and RPO targets for FY 2012-13 cumulatively before 31 March, 2013, the same shall be reviewed by the Commission in the proceeding for Verification and Compliance of RPO targets for FY 2012-13 as specified under MERC (RPO-REC) Regulations, 2010. From the above extracts of the Order, it is evident the Commission has allowed a carry forward of RPO compliance of FY 2010-11 and FY 2011-12 cumulatively in FY 2012-13, which has been achieved by BEST and the same has been discussed in detail in Section 5 of this MYT Order. Therefore, for FY 2010-11, the Commission has considered the quantum of purchase from Renewable energy sources as submitted by BEST in the Petition. Considering the above, the Commission has approved power purchase of 218.91 MU from renewable sources at purchase cost of Rs. 82.19 Crore which includes REC purchase of Rs. 0.06 Crore for FY 2010-11 as shown in the Table below: Table: Renewable Energy Purchase Cost approved by the Commission for FY 2010-11 (Rs. Crore) Preferential Tariff approved by Commission 4.79 2.99 2.52 4.55 Power Purchase Cost approved by the Commission 45.37 5.21 21.14 10.41 0.06 82.19
Source Bagasse Co-Gen Small Hydro Wind- Zone 1 Wind- Zone 2 REC Total
Quantum 94.73 17.43 83.89 22.87 218.91
3.3.3 Power Purchase/(Sale) from Short-term sources and Imbalance Pool BEST submitted that the actual power purchased from the short-term sources was 65.96 MU at a cost of Rs. 43.01 Crore and accordingly the price of short-term power works out to Rs.6.52 per unit. BEST further submitted that it has sold extra power to the Imbalance Pool and others to the extent of 562.36 MU at a cost of Rs. 275.46 Crore, the per unit cost of which works out to Rs.4.90 per unit.
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The Commission has accepted BESTs submission in this regard. The breakup of additional Power Purchase/(Sale) and Imbalance Pool purchase as submitted by BEST and as approved by the Commission is as follows: Table: Power Purchase/(Sale) from Short-term Sources and Imbalance Pool for FY 2010-11 approved by the Commission APR Order (Case No. Approved after Truing Actuals 125 of 2011) Up Source of Power Cost Cost Quantum Cost Quantum Quantum (Rs Crore) (Rs Crore) (MU) (Rs Crore) (MU) (MU) Additional Power Purchase 65.96 43.01 65.96 43.01 65.96 43.01 /(Sale) Pool Imbalance (564.51) (277.92) (562.36) (275.46) (562.36) (275.46) purchase /(Sale)
3.3.4 MSLDC and Transmission Charges BEST submitted that the Transmission Charges for FY 2010-11 were Rs. 111.80 Crore including MSLDC charges to the extent of Rs 0.69 Crore as against Rs. 111.74 Crore approved by the Commission in its APR Order dated 16 March, 2012 in Case No. 125 of 2011. BEST requested the Commission to allow the differential amount of Rs. 0.06 Crore on the basis of actuals while doing the final truing up of FY 2010-11. The Commission has considered BESTs submissions in this regard and has accordingly approved Transmission Charges and MSLDC Charges at Rs. 111.180 Crore under the truing up exercise. 3.3.5 Stand-by Charges As regards Standby Charges being paid to the Maharashtra State Electricity Distribution Company limited (MSEDCL), BEST submitted that it has considered an amount of Rs. 109.63 Crore based on the actuals and the same has been approved by the Commission in its APR Order dated 16 March, 2012 in Case No. 125 of 2011. The Commission has accepted BESTs submission in this regard and has approved Standby Charges of Rs. 109.63 Crore under final truing-Up exercise of FY 2010-11.
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3.3.6 Miscellaneous Charges BEST submitted that in the present Petition for Truing up of FY 2010-11, it has also considered the payment related to the following: An amount of Rs. 8.57 Crore paid to TPC-G as per Order in Case No. 35 of 2009. An amount of Rs. 6.24 Crore as per Order in Case No. 96 of 2009. An amount of Rs. 2.62 Crore as per Order in Case No. 71 of 2010.
BEST submitted that the Commission has accepted BESTs submission in its APR Order dated 16 March, 2012 in Case No. 125 of 2011 and has approved Miscellaneous Charges of Rs. 17.43 Crore for FY 2010-11. The details of various miscellaneous charges as submitted by BEST are shown in the table below: Table: Miscellaneous Charges submitted by BEST for FY 2010-11 (Rs. Crore) Approved (Case 125 of 2011) (A) 6.24 2.62 8.57 17.43 FY 2010-11 Actual (Audited) (B) 6.24 2.62 8.57 17.43 True-up Amount (B-A) 0.00 0.00 0.00 0.00
Sl. No. 1 2 3 4
Particulars Payment in Case No.96 of 2009 Payment in Case No.71 of 2010 Miscellaneous charges (as per order on Case No. 35 of 2009) Total (Rs. Crore)
The Commission has accepted BESTs submissions in this regard and approved miscellaneous charges of Rs. 17.43 Crore, which has also been approved in APR Order dated 16 March, 2012 in Case No. 125 of 2011. 3.3.7 Summary of Power Purchase related Costs The summary of power purchase quantum and costs, including Standby Charges and Transmission Charges for FY 2010-11 as submitted by BEST and approved by the Commission after final truing up, is given in the following table:
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Table: Summary of Power Purchase Quantum and Costs for FY 2010-11approved by the Commission Particulars MU TPC-G Renewable Sources (RPS) Renewable Sources (REC) Additional Power Purchase/(Sale) Imbalance Pool Purchase/(Sale) Standby Charges
Incentive Less: Hydel Rebate Transmission Charges SLDC Charges Miscellaneous Charges Less: Rebate Given by TPC-G Total
Actuals Rs. Crore 1833.04 109.59 43.01 (275.46) 109.63 16.82 (37.91) 111.11 0.69 17.43 (22.44) 4847.79 1905.52
Approved after Truing Up MU 5125.27 218.91 65.96 (562.36) Rs. Crore 1833.04 82.13 0.06 43.01 (275.46) 109.63 16.82 (37.91) 111.11 0.69 17.43 (22.44) 4847.79 1878.12
5125.27 218.91 65.96 (562.36)
3.4
O&M EXPENSES FOR FY 2010-11
3.4.1 Employee Expenses BEST submitted that the actual employee expenses for FY 2010-11 as per its audited accounts were Rs. 199.32 Crore as against revised employee expenses of Rs. 189.93 Crore approved by the Commission vide Order dated 26 August, 2012 in Case No. 62 of 2012. The employee expenses submitted by BEST are shown in the following table: Table: Employee expenses submitted by BEST (Rs. Crore) MERC Approval FY 2010-11 Case 62 of 2012 189.93 Actual Audited FY 2010-11 199.32 Page 50 of 308
Sl. No.
Particulars
APR Order of FY 2010-11 (Case 125 of 2011) 166.56
Net Employee Expenses
The detailed break up of employee expenses for FY 2010-11 as submitted by BEST is shown in the following table: Table: Detailed break up of employee expenses submitted by BEST (Rs. Crore)
FY 2010-11 Sl. No. Particulars Approved in Case No. 125 of 2011 MERC Approval FY 2010-11 Case No. 62 of 2012 18.30 7.59 2.62 216.75 Actual Audited FY 2010-11 61.17 81.05 9.70 0.42 1.48 2.27 3.70 4.87 8.11 12.55 1.92 1.00 Difference (MERC approvalActual) -
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
19
20
Basic Salary Dearness Allowance (DA) House Rent Allowance Conveyance allowance Leave Travel Allowance Earned Leave Encashment Medical Allowance Overtime Payment Bonu/Ex.-Gratia Payments Functional Allowance as per Agreement 07-11-09 Interim/Wage settlement VRS Expenses/ Retirement Compensation Special Benefit Provident Fund Contribution Gratuity Payment Cost of bus token/passes Gross Employee Expenses Less: Establishment of CAS (0.57), T&E (0.29) & ST.LTG.(12.21) & Electrical Works(1.96)Dept. Net Employee Expenses
17.43
166.56
189.93
199.32
-9.39
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BEST submitted that the Commission in its Tariff Order dated 12 September, 2010 in Case No. 95 of 2009 had provisionally approved employee expenses of Rs. 165.38 Crore for FY 2010-11. Further, the Commission vide its APR Order dated 16 March, 2012 in Case No. 125 of 2011 had approved employee expense of Rs. 166.56 Crore for FY 2010-11. Subsequently, vide Order dated 26 August, 2012 in Case No. 62 of 2012, the Commission had revised the employee expenses to Rs. 189.93 Crore by considering the escalation factor of 8.49% over actual employee expenses of FY 2009-10, i.e., Rs. 174.76 Crore. However, as per CPC Index declared by Ministry of Labour and Employment Govt. of India, the escalation rate (average) in FY 2010-11 is 11.99% p.a. as against 8.49% considered by the Commission in the said Order in Case No. 62 of 2012. BEST submitted that in case the said rate of 11.99% is applied on approved employee expenses (under Case No. 62 of 2012) of FY 2009-10 (i.e., Rs. 174.76 Crore), it works out to Rs. 195.71 Crore and against this amount, the actual audited expense are Rs. 199.32 Crore, i.e., excess by only Rs. 3.61 Crore. BEST further submitted that the following factors have contributed to the increase in employee expenses: a) Increase in basic salary by Rs. 6.58 Crore and dearness allowance by Rs. 6.29 Crore due to an increase in the number of employees from 8411 during FY 2009-10 to 8862. b) Increase in the basic salary as well as the payment made to ex-employees who had opted for Voluntary Retirement Scheme (VRS) in FY 2010-11, the provident fund (PF) contribution amount is also higher by Rs. 2.34 Crore. c) Payment of interim relief against wage settlement for the wage agreement period of FY 2006-07 to FY 2010-11, for which an amount of Rs. 4,500 was paid to each employee leading to an additional burden of Rs. 1.92 Crore. d) In case of other items, i.e., conveyance allowance, ex-gratia payment, gratuity payment, and cost of bus tokens, there has been a marginal increase of Rs. 0.03 Crore, Rs. 0.77 Crore, Rs. 0.87 Crore, and Rs. 0.75 Crore, respectively. e) There has been a decrease in expenditure in case of HRA, LTA, leave encashment, medical allowance, overtime payment, and VRS expenses/compensation amounting to Rs. 0.69 Crore, Rs. 0.16 Crore, Rs. 1.85 Crore, Rs. 0.06 Crore, Rs. 1.21 Crore, and Rs. 3.20 Crore respectively. The expenditure under the VRS sub-head has reduced as BEST has decided to discontinue the said scheme. BEST submitted that in order to facilitate department-wise accounting of expenditure, BEST has implemented codification method, which has led to introduction of a revised Chart of Account
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from April 1, 2009. Hence, the expenditure under the sub-heads Incentive, functional allowance, which includes field duty allowance, hazardous allowance, incentive to the staff member, distribution loss allowance, shift duty allowance, and EDEI (Electricity Distribution Efficiency Incentive) have been accounted for separately and accordingly the said figure of Rs. 12.55 Crore has been submitted in this Petition. BEST requested the Commission to approve the actual employee expenses of FY 2010-11 in the light of approval of actual employee expenses under Case No. 62 of 2012 for FY 2008-09 and 2009-10. In reply to a specific query of the Commission, BEST submitted the computation of escalation factor considered by BEST in its Petition for Truing up of FY 2010-11. On analysis of the same it was observed that BEST has computed escalation factor equivalent to CPI and WPI figures for FY 2010-11 by taking the average figures of April-March of FY 2010-11 over average figures of April-March of FY 2009-10. However, for the purpose of computation of escalation factor, the Commission has considered point to point inflation over CPI numbers for Industrial Workers (as per Labour Bureau, Government of India) for a period of five years, i.e., FY 2006-07 to FY 2010-11 (up to March 2011), to smoothen the inflation curve, and accordingly the escalation factor for employee expense equivalent to inflation in CPI index works out to 9.26% for FY 2010-11. Further, the Commission has done the prudence check of each sub-head of employee expenses for FY 2010-11 in order to determine the allowable employee expenses for FY 2010-11. Based on BESTs submission and prudence check, the Commission has allowed the employee expenses as per actuals submitted by BEST under final truing up. The summary of employee expenses as approved by the Commission in APR Order, actual employee expenses claimed by BEST, and employee expenses approved after final truing up for FY 2010-11, is shown in the following table: Table: Employee expenses for FY 2010-11 approved by the Commission (Rs. Crore) Particulars Employee Expenses MERC Approval FY 2010-11 Case No. 62 of 2012 189.93 Actual 199.32 Approved by the Commission 199.32
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Since, the Commission has approved the actual employee expenses which are higher than the employee expenses provisionally approved in Order dated 26 August, 2012 in Case No. 62 of 2012, hence, no sharing of gains and losses has been done for this expense head.
3.4.2 A&G Expenses BEST submitted that the actual A&G expenses for FY 2010-11 as per its audited accounts were Rs. 82.75 Crore as against revised A&G expenses of Rs. 83.61 Crore approved by the Commission in its Order dated 26 August, 2012 in Case No. 62 of 2012. The detailed break up of A&G expenses for FY 2010-11 as submitted by BEST is shown in the following table: Table: A&G expenses in FY 2010-11 as submitted by BEST (Rs. Crore) FY 2010-11 Earlier APR Petition submission (Under Case No. 95 of 2009) (1) 3.42 0.16 2.50 1.45 0.88 5.88 6.40 2.71 0.76 1.42 0.48 0.00 0.55 APR order (Case No. 125 of 2011) (2) MERC Actual Approval Audited FY 2010Difference FY 11 (Case = (4-1) 2010-11 No. 62 of (4) 2012) (3) 4.02 0.37 3.60 1.11 0.12 5.99 8.95 2.42 0.38 3.31 3.13 0.01 0.19 0.60 0.21 1.10 -0.34 -0.76 0.11 2.55 -0.29 -0.38 1.89 2.65 0.01 -0.36
Sl. No.
Particulars
1 2 3 4 5 6 7 8 9 10 11 12 13
Rent Rates & Taxes Insurance Telephone & Postage, etc. Legal charges & Audit fee Professional, Consultancy, Technical fee Electricity charges Security arrangements Printing & Stationery Advertisements License Fee and Other related fee Vehicle Running Expenses Training Bank Charges
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FY 2010-11 Earlier APR Petition submission (Under Case No. 95 of 2009) (1) 6.36 11.61 39.57 84.15 APR order (Case No. 125 of 2011) (2) 82.63 MERC Actual Approval Audited FY 2010Difference FY 11 (Case = (4-1) 2010-11 No. 62 of (4) 2012) (3) 83.61 7.48 6.53 35.14 82.75 1.12 -5.08 -4.43 -1.40
Sl. No.
Particulars
14 15 16 17
Property Insurance Fund Others Share of General Administration Expenses Gross A&G Expenses
BEST submitted that the Commission had approved A&G expenses amounting to Rs. 83.61 Crore under Case No. 62 of 2012, as against actual A&G expenses of Rs. 82.75 Crore for FY 2010-11. BEST submitted that the actual expenses are lower by Rs. 0.86 Crore as compared to expenses approved by the Commission, and requested the Commission to approve the actual A&G expenses of Rs. 82.75 Crore along with allowing of sharing of gains in accordance with MERC Tariff Regulations, 2005. After considering BESTs submission and prudence check, the Commission has approved A&G expense of Rs. 82.75 Crore for FY 2010-11 based on the actuals. The summary of allowable A&G expense approved by the Commission in APR Order, actual A&G expenses claimed by BEST, and A&G expenses approved after truing up for FY 2010-11 has been shown in the following table: Table: A&G expenses approved by the Commission (Rs. Crore) Particulars A&G Expenses A&G Expenses approved in Case No. 62 of 2012 83.61 Actual 82.75 Approved by the Commission 82.75
Since, the Commission has approved the actual A&G expenses which are lower than the A&G expenses provisionally approved in Order dated 26 August, 2012 in Case No. 62 of 2012 hence,
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the difference between the two is paragraphs of this Section. 3.4.3 R&M Expenses
treated as efficiency gain as discussed in subsequent
The R&M expenses approved by the Commission in its Order dated 26 August, 2012 in Case No. 62 of 2012, which is same as that approved in APR Order dated 16 March, 2012 in Case No. 125 of 2011, and actual expenses incurred by BEST as per the audited accounts submitted by BEST are shown below: Table: R&M Expenses as submitted by BEST (Rs. Crore) ARR Petition FY 2010-11 34.12 ARR Order FY 2010-11 28.61 MERC Approval FY 2010-11 in Case 62 of 2012 28.61 Actual Audited FY 2010-11 34.72
Particulars Net R&M Expenses
BEST submitted that in its Order dated 26 August, 2012 in Case No. 62 of 2012, the Commission had not revised R&M expenses of Rs. 28.61 Crore approved earlier for FY 20102011 which is lower than the actual audited R&M expenses by Rs. 6.11 Crore. BEST submitted that out of this, major increase has been on account of reinstatement charges paid to the MCGM which is an uncontrollable factor, as the said rates are decided by MCGM only. BEST submitted that the payment of these charges is inevitable on account of excavation, due to underground cable faults occurring in the Mumbai region during the year. BEST requested the Commission to approve the actual R&M expenses as per the audited accounts, i.e., Rs. 34.72 Crore. BEST submitted that vide Order dated 26 August, 2012 in Case No. 62 of 2012, the Commission has approved Repair and Maintenance Expenses of Rs. 26.68 Crore for FY 2009-10. BEST submitted that if escalation factor of 9.56% is applied on the approved R&M expenses of FY 2009-10, the R&M expenses for FY 2010-11 works out as Rs. 29.23 Crore which is lower than the actual R&M expenses of FY 2010-11 by Rs. 5.49 Crore. Table: R&M expenses of FY 2010-11 using escalation factor submitted by BEST (Rs. Crore) Sl. No. 1 2 Particulars R&M Escalation factor FY 2009-10 (Approved in order 62 of 2012) 26.68 9.56% FY 2010-11 (Using Escalation Factor) 29.23 FY 2010-11 (Audited) 34.72
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The head wise detail of R&M expenses as submitted by BEST is as given in the table below: Table: R&M expenses as submitted by BEST (Rs. Crore) FY 2010-11 MERC Approval FY 2010-11 Case 62 of 2012 28.61
Sl. No.
Particulars
ARR Petition FY 201011 2.75 2.81 0.05 0.43 7.93 12.58 2.38 0.64 4.55 34.12
ARR Order FY 2010-11 28.17
Actual Audited FY 2010-11 5.25 0.11 0.03 0.29 5.02 11.26 2.35 0.10 10.31 34.72
Difference (APR OrderActual) 6.11
1 2 3 4 5 6 7 8 9 10 11
Central Office and Service of office equipment etc. Material Stock Adjustment Dead Stock Repairs & Maintenance R&D S/S Building (Civil) Mains Aerial Meter Installation Meter Testing Reinstatement Charges Gross R&M Expenses
BEST submitted that it has been able to reduce item-wise R&M cost for most of the items except Reinstatement Charges and the reason behind the increase is higher re-instatement charges being levied by MCGM. BEST requested that in the light of above reasoning, the Commission may approve R&M expenses at actual, i.e., Rs. 34.72 Crore. After considering BESTs submission and prudence check, the Commission observes that R&M expenses as claimed by BEST is about 2.2% of total GFA and the same is a reasonable amount for any Utility to spend on R&M expenses. Based on the above, the Commission approves the actual R&M expenses of Rs. 34.72 Crore for FY 2010-11. The summary of R&M expenses approved by the Commission in its APR Order, actual R&M expenses claimed by BEST, and R&M expenses approved after truing up for FY 2010-11 is shown in the following table:
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Table: R&M expenses for FY 2010-11 approved by the Commission (Rs. Crore) Particulars R&M Expenses APR Order 28.61 Actual 34.72 Approved by the Commission 34.72
Since, the Commission has approved the actual R&M expenses, which are higher than the R&M expenses provisionally approved in Order dated 26 August, 2012 in Case No. 62 of 2012, hence, no sharing has been done for this expense head.
3.4.4 Total O&M Expenses for FY 2010-11 The total O&M expenditure approved by the Commission for FY 2010-11 is summarised in the Table below: Table: O&M Expenses for FY 2010-11 approved by the Commission (Rs. Crore) Particulars Employee Expenses A&G Expenses R&M Expenses Total APR Order 189.93 83.61 28.61 302.15 Actual 199.32 82.75 34.72 316.79 Approved by the Commission 199.32 82.75 34.72 316.79
3.5 3.5.1
CAPITAL EXPENDITURE AND CAPITALISATION Capitalisation
BEST submitted that in its Order dated 16 March, 2012 in Case No. 125 of 2011, the Commission has not considered the DPR schemes pending for approval and had accordingly approved capitalization of Rs. 172.40 Crore and IDC of Rs. 12.31 Crore for FY 2010-11. BEST submitted that the balance capitalization of Rs. 6.88 Crore pertaining to DPR scheme pending for approval has now been approved by the Commission on 30 April, 2012 and 14 May, 2012, respectively and the approval letter has been annexed along with the MYT Petition. BEST requested the Commission to approve capitalization of Rs. 179.28 Crore and IDC of Rs. 12.31 Crore.
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The actual Capital Expenditure incurred in FY 2010-11, as submitted by BEST is given in the table below: Table: Actual Capital Expenditure for FY 2010-11 as submitted by BEST (Rs. Crore) Sl. No. 1 2 3 4 5 6 7 8 9 Particulars New receiving station of 33-22/11 kV Augmentation and replacement at existing RSS New Distribution substation and augmentation & alteration to existing DSS Extension of Distribution network (Laying of HV & LV cable) SCADA, Digitisation & Communication, Business Process Automation Energy Meters Generation plant Street lighting (lamps & cables) Furniture & office equipment (Rs. 1.68 Crore), Tools (Rs. 1.48 Crore), Civil Engineering works (Rs. 0.01 Crore), Motor Vehicle (Rs. 0.68 Crore), Share of G.A. expenses (Rs. 0.28 Crore) Grand Total Capital Expenditure Actual Submission (Audited) 12.63 40.83 18.73 16.50 40.98 51.90 44.00 39.50 1.50 1.50 7.33 218.07 33.16 43.68 38.02 13.30 0.00 2.01 4.13 191.62
BEST submitted that capitalization and IDC for FY 2010-11 are Rs. 179.28 Crore and Rs. 12.31 Crore, respectively, as summarized in the following table: Table: Capitalization and IDC for FY 2010-11 as submitted by BEST (Rs. Crore) Scheme Head Code 1 DPR Name of the scheme 2 New Receiving Station of 33-22/11 kv Augmentati on & Replacemen t at existing CWIP 2010-11 3 12.02 Addl. cap. Expenditure during 201011 4 28.81 Total (3+4) 5 40.83 Capitalized in 2010-11 6 34.57 Balance c/f to 2011-12 (WIP) 7 6.26 70% of work Completed 8 24.20 IDC 11% for 1 year 9 2.66
DPR
7.15
9.35
16.50
10.41
6.09
7.29
0.80
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Scheme Head Code
Name of the scheme RSS New DSS Augmentati on & Alteration Laying of HV & LV Cable SCADA Business Process Automation Energy Meter Street Lighting Furniture, Office Equip, Tools, MV & Share of GA TOTAL
CWIP 2010-11
Addl. cap. Expenditure during 201011
Total (3+4)
Capitalized in 2010-11
Balance c/f to 2011-12 (WIP)
70% of work Completed
IDC 11% for 1 year
DPR
33.16
33.16
33.16
23.21
2.55
DPR DPR DPR DPR Non DPR
0 0 0 0 0
43.68 3.77 34.25 13.30 2.01
43.68 3.77 34.25 13.30 2.01
43.68 3.77 34.25 13.30 2.01
0 0 0 0.00 0
30.58 2.64 23.98 9.31 0
3.36 0.29 2.64 0 0
Non DPR
4.13
4.13
4.13
19.17
172.46
191.63
179.28
12.35
121.20
12.31
BEST submitted that IDC in FY 2007-08 and FY 2008-09 amounting to Rs 11.05 Crore and Rs 9.44 Crore, respectively, has been brought under books of accounts in FY 2010-11 as the Commission had approved revised capitalisation for FY 2007-08 under para 3.5 of the Order dated 12 September, 2010 in Case No. 95 of 2011 and also accepted IDC for FY 2008-09 inprinciple in its counter affidavit filed with the Honble ATE in Appeal No. 8 of 2011. BEST submitted that requisite Capital expenditure is needed for creating sufficient redundancy in the network to give reliable and quality power to consumers, for meeting the Universal Supply Obligation and future growth in demand, and deliver better service and meet the MERC Standards of Performance obligations through IT/Automation.
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Table 28: Details of Capital Expenditure over past few years submitted by BEST (Rs. Crore) Sl. Year No. 1 2 3 4 5 6 7 FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11 Opening CWIP 6.35 10.11 9.83 35.65 13.22 8.87 19.16 Capex in the year 73.40 63.49 99.69 121.12 118.21 146.35 172.46 Total Works Capitalized 69.64 63.77 73.87 143.55 122.56 136.04 179.28 Works Capitalized from CWIP 5.59 8.19 7.61 28.36 9.16 7.15 15.66 Closing CWIP 10.11 9.83 35.65 13.22 8.87 19.16 12.35
As regards capitalisation during FY 2010-11, the Commission has examined the actual capitalisation claimed by BEST in detail as against various Capex schemes approved by Commission. The Commission observes that out of total works capitalisation of Rs. 179.27 Crore claimed by BEST during FY 2010-11, the DPR schemes relate to new receiving station (Rs. 34.56 Crore), augmentation and replacement at existing RSS (Rs. 3.53 Crore), new distribution substation and augmentation and alteration to existing DSS (Rs. 33.16 Crore), extension of distribution network (Rs. 43.68 Crore), SCADA, Energy meters (Rs. 51.32 Crore), and capitalisation of non-DPR related schemes have been proposed as Rs. 13.02 Crore. As regards approval of capitalisation of DPR schemes, the capitalisation towards schemes approved in-principle by the Commission has been considered. It is also observed that the capitalisation against non-DPR schemes during FY 2009-10 is within the limit (of 20% of DPR schemes) as directed in the previous APR Orders and the same has been considered for approval. As regards IDC of FY 2007-08 and FY 2008-09 amounting to Rs 11.05 Crore and Rs 9.44 Crore respectively, the Commission has already included the same while approving the capitalisation in its previous Orders, hence, the Commission has not considered the same for the purpose for truing up of FY 2010-11. While analysing the IDC claimed by BEST for FY 2010-11, the Commission observes that some of the capital asset schemes including New DSS Augmentation & alteration, Laying of HV & LV cables, SCADA, and Business Process Automation were started and completed during the same year itself, hence, there would be no IDC component for such schemes. Further, BEST has calculated IDC for the whole year, though the capital expenditure would have been undertaken during the course of the year. Therefore the Commission has disallowed IDC of Rs. 8.84 crore pertaining to these schemes which were
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started and completed in the same year, while for the remaining schemes, the Commission has computed IDC only for half the year based on average funds blocked in the project. Accordingly, for the purpose of Truing-Up for FY 2010-11, the Commission has approved capitalisation of Rs 179.27 Crore and IDC of Rs. 1.74 Crore, on the basis of necessary prudence check carried out by the Commission. The Capitalisation approved by the Commission for FY 2010-11 is shown in the following Table: Table: Actual Capitalisation for FY 2010-11 as approved by the Commission (Rs. Crore) Particulars Capitalisation IDC Total APR Order 172.29 12.31 184.60 Actual 179.27 12.31 191.58 Approved after Truing-up 179.27 1.74 181.01
3.5.2 Funding of Capitalisation BEST submitted that it is committed towards its aim to serve its consumers by offering the best services. BEST submitted that the financing plan linked to Capital Expenditure Plan has been prepared based on the existing approved funding and the limitations in terms of infusion of equity or internal accrual. BEST submitted that in FY 2010-11, it has incurred capital expenditure of Rs. 191.62 Crore, out of which Rs. 179.28 Crore has been capitalized excluding IDC of Rs. 12.31 Crore. BEST submitted that since, interest on loan capital has to be provided corresponding to the assets put in use, the funding of capitalization has been shown including IDC of Rs. 12.31 Crore, i.e., for Rs. 191.59 Crore. BEST added that it has assumed normative debt equity ratio of 70:30 (after deducting the connection fee received from consumers). BEST submitted the details of funding for capitalisation during FY 2010-11 as shown in the table below:
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Table: Funding Plan for Capitalization during FY 2010-11 as submitted by BEST (Rs. Crore) Sl. No. 1 2 3 4 Particulars Capital Connection Fee Government Grant Loan Internal Sources Total Submission in previous APR Petition for FY 2009-10 10.00 0.00 150.00 58.07 218.07 Submission by BEST for FY 2010-11 9.59 0.00 127.40 54.60 191.59
Accordingly, the sources of capitalisation considered by the Commission are Consumer Contribution (Rs. 9.59 Crore), grant from Government (Nil), Normative Equity (Rs. 51.42 Crore), and loan of Rs. 119.99 Crore. 3.6 DEPRECIATION
BEST submitted that as per audited accounts, it has incurred depreciation expenses of Rs. 51.59 Crore against the approved depreciation expenses of Rs. 52.20 Crore as shown in the following Table: Table: Depreciation for FY 2010-11submitted by BEST (Rs. Crore) FY 2010-11 Sl. No. 1 2 3 Particulars Depreciation Opening GFA Average Rate of depreciation (Approved under case no 125 of 2011) 52.20 1573.70 3.32% Actual 51.59 1545.12 3.33%
BEST submitted that the Commission in its APR Order dated 16 March 2012, in Case No. 125 of 2011 had approved depreciation expenses of Rs. 48.92 Crore for FY 2010-11. BEST submitted that the Commission in Case No. 125 of 2011 had remarked that there was a significant difference in the Opening GFA being considered by the Commission in the Tariff Orders based on BESTs submission on Affidavit and Opening GFA as reported under the audited accounts. BEST further submitted that accordingly, in Case No. 171 of 2011, BEST had reconciled Opening GFA reported under audited accounts and submitted to the Commission as a part of the queries raised by the Commission. BEST submitted that in accordance to the same it has revised
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the opening GFA for FY 2010-11 as Rs. 1545.11 Crore. BEST further submitted that the average depreciation rate works out to 3.33% on opening GFA of Rs. 1545.11 Crore for FY 2010-11. BEST also submitted the asset-wise depreciation details along with the present Petition. BEST requested the Commission to approve actual depreciation expenses as submitted by it in the Petition. Further, BEST in its additional submissions, confirmed that depreciation has not been claimed beyond 90% of the asset value in line with the MERC Tariff Regulations. The Commission has considered opening GFA for FY 2010-11 equal to the closing GFA of FY 2009-10 as approved in Case No. 62 of 2012. Accordingly, for the purpose of Truing-up for FY 2010-11, the Commission has considered the Opening GFA of BESTs distribution business for FY 2010-11 at Rs. 1575.31 Crore, which is higher than BESTs estimate of Rs. 1545.12 Crore. The depreciation expenditure approved by the Commission for FY 2010-11 has been summarised in the following Table: Table: Depreciation approved by the Commission (Rs Crore) Particulars Depreciation Opening GFA APR Order 52.20 1573.70 Actual 51.59 1545.12 Allowed after Truing-up 52.75 1575.31
3.7
INTEREST EXPENSES
The details of the interest expenses incurred in each half of FY 2010-11 as submitted by BEST is as shown in the table below: Table: Interest Expenses in H1 of FY 2010-11 as submitted by BEST (Rs. Crore) FY 2010-11 (H1) Sl. No. 1 2 3 4 Particulars Public Loan MMRDA (Mega city Project) DPDC APDRP Loan Opening Balance 1.00 0.00 1.92 37.98 Addition Repayment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Closing Balance 1.00 0.00 1.92 37.98 Interest as per Form No. 5 0.05 0.00 0.00 0.00
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FY 2010-11 (H1) Sl. No. Particulars Opening Balance Addition Repayment Closing Balance Interest as per Form No. 5 3.15 (Canara Bank)+ 1.98 (Vijaya Bank) 5.18
Short Term financial Assistance
218.38
0.00
170.44
47.94
Total
259.28
0.00
170.44
88.84
BEST submitted that out of the total outstanding Short Term Financial Assistance of Rs. 218.38 Crore, Rs. 170.44 Crore was due for repayment in first half of FY 2010-11 and it has made the repayment accordingly. The details of interest calculation in H2 of FY 2010-11as submitted by BEST are shown below: Table: Interest Expenses in H2 of FY 2010-11 as submitted by BEST (Rs. Crore) FY 2010-11 (H2) Sl. No. Particulars Public Loan MMRDA (Mega city Project) DPDC APDRP Loan Opening Balance 1.00 0.00 1.92 37.98 Addition 0.00 0.00 0.00 0.00 Repayment 0.50 0.00 0.16 0 Closing Balance 0.50 0.00 1.76 37.98 Interest as per Form No. 5 0.06 0.00 0.27 3.32 1.60 (Canara Bank) + 2.72 (Vijaya Bank) 7.97 13.15
1 2 3 4
Short Term financial Assistance
47.94
180
85.88
142.06
6 7
Total Grand Total of Interest (H1+H2)
88.84
180
86.54
182.3
BEST submitted that in the second half, the repayment of earlier short-term financial assistance amounting to Rs. 47.94 Crore was due for payment and therefore, it was necessary to raise Rs. 50 Crore short term financial assistance in addition to Rs. 130 Crore for funding the Page 65 of 308
capitalisation. BEST submitted that to maintain the liquidity for capital expenditure, it was necessary to raise Rs. 180 Crore short term finance. BEST submitted that while approving the capital expenditure the Commission had not considered funding through equity and has instead considered entire amount as debt, i.e., Rs. 140 Crore, which was arrived after deducting Rs. 10 Crore towards Capital connection fee from the approved capitalisation amount of Rs. 150 Crore. BEST further submitted that during FY 2010-11, BEST has received Rs. 9.59 Crore through Capital Connection fee, Rs. 127.40 Crore (say an amount of Rs. 130 Crore) as a loan [i.e., 70% debt after deducting the Capital Connection fee from the capitalised amount of Rs. 179.28 Crore + IDC of Rs. 12.31 Crore, and balance Rs. 54.60 Crore through Internal sources, i.e., 30% normative equity. BEST added that it had raised additional loan of Rs. 50 Crore for repayment of earlier short-term finance loan. BEST submitted that the principle of raising short term finance loan for Capital expenditure was in-principle agreed to by the Commission as BEST had earlier submitted that it has to adhere to the stringent provisions of MMC Act, 1888 for raising of any long term loan and BEST has to follow the provisions of Section 106 and procedures laid under the said Act wherein approval of the Government of Maharashtra is necessary. BEST further submitted that the same is a very time consuming activity and hence, BEST has to rollover the short term loan thereby effectively using it as a long term fund till BEST gets exemption under Section 106 of MMC Act. BEST submitted that it has already forwarded the proposal to that effect to the Government of Maharashtra, however, till date the Government of Maharashtra has not taken any action for making amendment as suggested by BEST. BEST added that a consistent follow up in this regard has also been made with the Urban Development Department. BEST submitted that the actual Interest expenses for FY 2010-11 is Rs. 13.15 Crore as against the provisional approval of Rs. 16.71 Crore, i.e., lower by Rs 3.56 Crore. BEST further submitted that in its Order dated 26 August, 2012 in Case No. 62 of 2012, the Commission had approved Rs. 9.65 Crore as Interest expenses. BEST requested the Commission to approve the actual Interest expenses as Rs. 13.15 Crore incurred during FY 2010-11 taking into account funding requirement of Rs. 191.59 Crore. Further, in line with the philosophy adopted in its previous Orders, the Commission is of the view that the actual loans taken by BEST for funding the repayment have to be adjusted against the depreciation allowed. Moreover, the MERC Tariff Regulations and also the ATE Judgment dated 22 March, 2012 in Appeal No. 8 of 2011 clearly provide that the loans can be allowed only
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against assets put to use and not against capital expenditure or other purposes such as repayment of loan. Accordingly, the Commission has not approved additional loans for repayment of earlier short-term finance claimed by BEST. The interest expenditure on actual loan amount admitted has been considered at the rate of 9.50% p.a. for the loans from Canara Bank and Vijaya Bank as proposed by BEST in its Petition. The Commission has considered the interest expenditure on the existing loans from public loans, MMRDA loans for Mega City project, DPDC loans, APDRP loan at Rs 3.67 Crore while, for the balance loans, the Commission has re-calculated the interest expenses. Accordingly, interest expenses approved for FY 2010-11 are summarised in the following Table: Table: Interest Expense for FY 2010-11 approved by the Commission (Rs Crore) Particulars Opening Balance of Loan Loan Addition Loan Repayment Cl. Balance of Loan Interest Rate (Weighted Average) Interest Expenses Actuals 259.28 180.00 256.98 182.30 13.15% 13.15 Approved by the Commission 127.95 119.99 113.00 134.94 7.17%% 9.42
3.8
RETURN ON INTERNAL FUNDS
BEST submitted that it has the interest on internal funds amounted to Rs 5.28 Crore in FY 201011. BEST submitted that the cumulative grant at the end of FY 2010-11 was Rs. 87.99 Crore, after considering no additional grants and total interest on internal funds at 6%. The detailed computations of the interest on internal funds as submitted by BEST are given in the following table:
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Table: Interest on Internal Funds for FY 2010-11 as submitted by BEST (Rs. Crore) Previous Year (FY 2009-10) (Actual/Audited) Capitalisation during the year 2 IDC Less: Consumer 3 Contribution received during the year Les: Govt. Grnat Received 3 during the year 4 Allowable Capital cost Cumulative Grants at the 1 end of the year Interest on Internal funds 2 (at 6%) a) Normative debt component On Government assistance b) at the start of the year 1 136.04 0.00 11.09 1.46 123.49 86.53 5.19 0.00 5.19 150.00 0.00 10.00 0.00 140.00 86.53 5.19 0.00 5.19 172.40 13.28 9.59 0.00 176.09 87.99 5.28 0.00 5.28 179.28 12.31 9.59 0.00 182.00 87.99 5.28 0.00 5.28 Approved under APR Order case for FY 2009- No.62 of 10 2012 Audited (FY 2010-11)
Sl. No.
Particulars
BEST requested the Commission to approve the actual Interest on internal funds at Rs. 5.28 Crore for FY 2010-11. The Commission has accepted BESTs claim in this regard. The Interest on Internal funds, at the rate of 6% for FY 2010-11 as projected by BEST and approved by the Commission is given below: Table: Interest on Internal Funds for FY 2010-11approved by the Commission (Rs. Crore) Approved under Case No. 62 of 2012 172.40 13.28 Audited (FY 2010-11) 179.28 12.31 Approved after Truing-up
179.27 12.31
Sl. No. 1 2
Particulars
Capitalisation during the year IDC
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Sl. No.
Particulars
Approved under Case No. 62 of 2012
Audited (FY 2010-11)
Approved after Truing-up

9.59 0.00 181.99 87.99
3 3 4 5
Less: Consumer Contribution received during the year Les: Govt. Grnat Received during the year Allowable Capital cost Cumulative Grants at the end of the year
9.59 0.00 176.09 87.99 5.28 0.00 5.28
9.59 0.00 182.00 87.99 5.28 0.00 5.28
6 Interest on Internal funds (at 6%) a) Normative debt component On Government assistance at the start of b) the year
5.28 0.00 5.28
3.9
RETURN ON EQUITY
BEST submitted that it has considered normative equity equivalent to 30% of the approved net capitalisation, after reducing Consumer Contribution and Government Grants. BEST submitted it has computed Return on Equity (RoE) for FY 2010-11 on the opening balance of equity as well as 50% of equity component of the assets capitalised during FY 2010-11, which is in accordance with the MERC Tariff Regulations, as applicable for the Distribution business. The Return on Equity calculated by BEST for FY 2010-11 is summarised in the following table: Table: Return on Equity for FY 2010-11 as submitted by BEST (Rs. Crore) FY 2010-11 Revised BEST's submission under Case No.62 of 2012 695.09 185.68 9.59 176.09
Sl. No.
Particulars
Provided in APR Order for FY 2009-10 619.76 140.00 0.00 0.00
Revised approval under Case No. 62 of 2012 694.63 185.68 9.59 176.09
Actual
1 2 3 4
Regulatory Equity at the beginning of the year Allowable Capitalization amount including IDC (less) Capital connection fee Net Allowable Capitalisation amount
694.63 191.59 9.59 182.00
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Sl. No.
Particulars
Provided in APR Order for FY 2009-10 0.00 619.76
FY 2010-11 Revised BEST's submission under Case No.62 of 2012 52.83 747.92
Revised approval under Case No. 62 of 2012 52.83 747.48
Actual
Equity portion of capitalization Regulatory Equity at the end 6 of the year Return Computation Return on Regulatory Equity 7 at the beginning of the year (16%*(1)) Return on Equity portion of 8 capital expenditure (16%(5)/2) Total Return on Regulatory 9 Equity ((7)+(8)) 5
54.60 749.23
99.16
111.21
111.14
111.14
0 99.16
4.23 115.44
4.23 115.37
4.37 115.51
BEST requested the Commission to approve the actual Return on Equity of Rs. 115.51 Crore for FY 2010-11. For the purpose of Truing up of FY 2010-11, the Commission has considered normative equity equivalent to 30% of the approved net capitalisation, after reducing Consumer Contribution and Government Grants, amounting to normative equity of Rs. 51.42 Crore for FY 2010-11. The Return on Equity approved by the Commission for FY 2010-11 is given in the Table below:
Table: Return on Equity for FY 2010-11 approved by Commission Revised approval under case no. 62 of 2012 694.63 185.68 9.59 176.09
(Rs Crore) Approved after Truing-up
Sl. No.
Particulars
Actual
1 2 3 4
Regulatory Equity at the beginning of the year Allowable Capitalization amount including IDC (less) Capital connection fee Net Allowable Capitalisation amount
694.63 191.59 9.59 182.00
694.63 181.09 9.59 171.42 Page 70 of 308
Sl. No.
Particulars
5 6 7 8 9
Equity portion of capitalization Regulatory Equity at the end of the year Return on Regulatory Equity at the beginning of the year (16%*(1)) Return on Equity portion of capital expenditure (16% * (5)/2) Total Return on Regulatory Equity ((7)+(8))
Revised approval under case no. 62 of 2012 52.83 747.48 111.14 4.23 115.37
Actual
54.60 749.23 111.14 4.37 115.51
51.42 746.05 111.14 4.11 115.25
3.10 INTEREST ON WORKING CAPITAL AND CONSUMERS SECURITY DEPOSIT FOR FY 2010-11 BEST submitted that it has computed Interest on Working capital (IOWC) on normative basis as per MERC (Terms and Conditions of Tariff) Regulations, 2005. BEST submitted that the Commission in its Order dated 16 May, 2012 in Case No. 171 of 2011 had directed as follows: BEST should be allowed credit period of 9 days as against one month equivalent of cost of power purchased specified in the MERC Tariff Regulations, based on the annual power procurement plan BEST submitted that the Commission in its Order dated 26 August 2012, in Case No. 62 of 2012, had approved normative IOWC of Rs. 9.01 Crore. BEST requested the Commission to approve normative Interest on working capital incurred to the extent of Rs. 26.38 Crore for FY 2010-11. Table: Normative Interest on Working Capital submitted by BEST (Rs Crore) S. No. 1 Particulars One-twelfth of the amount of Operations and Maintenance Expenses Audited (FY 2010-11) 26.40
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S. No. 2 3 Less: 4 5 6 7 8 9 10
Particulars One-twelfth of the sum of the book value of stores, materials and supplies Two months of the expected revenue from sale of electricity at the prevailing tariffs Amount of Security Deposit Security Deposit from Consumers Security Deposit from Distribution System users Cost of power purchased (9 day basis) Total Working Capital = (1+2+3) - (5+6+7) Rate of Interest Interest on Working Capital
Audited (FY 2010-11) 1.08 446.26
220.65 0.00 46.17 206.92 12.75% 26.38
BEST further submitted that the Commission vide its Order dated 16 May, 2012 in Case No. 171 of 2011 had directed BEST as follows: Further, BEST has requested the Commission to allow the actual interest on Working Capital from FY 2008-09 onwards since, the actual interest on working capital was lower than the normative interest on working capital calculated on this revised principle. The Commission directs BEST to claim the said impact on interest on working capital from FY 2008-09 in the next tariff filing, along with necessary computations in accordance with the philosophy adopted by the Commission, for the Commissions approval. Accordingly, BEST has submitted the additional Interest on Working Capital for FY 2008-09 and FY 2009-10 as shown in the following Table: Table: Additional Interest on Working capital of FY 2008-09 & FY 2009-10 submitted by BEST (Rs Crore) S. No. 1 2 Particulars One-twelfth of the amount of Operations and Maintenance Expenses One-twelfth of the sum of the book value of stores, materials and supplies Approved (FY 2008-09) 21.56 1.85 Approved (FY 2009-10) 21.30 1.96
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S. No. 3 Less: 4 5 6 7 8 9 10 11 12 13
Particulars Two months of the expected revenue from sale of electricity at the prevailing tariffs Amount of Security Deposit Security Deposit from Consumers Security Deposit from Distribution System users Cost of power purchased (9 day basis) Total Working Capital = (1+2+3) - (5+6+7) Rate of Interest Interest on Working Capital IWC Approved by Commission IOWC Gap IOWC Gap to be Carried forward
Approved (FY 2008-09) 475.39
Approved (FY 2009-10) 482.76
207.63 0.00 55.43 235.74 12.75% 30.06 10.89 19.17 34.09
218.29 41.26 246.47 13.00% 32.04 17.12 14.92
BEST requested the Commission to consider Rs. 34.09 Crore as additional Interest on Working Capital for FY 2008-09 and FY 2009-10. Interest on Consumer Security Deposit The Interest on Consumer Security Deposit during FY 2010-11 as submitted by BEST is given in the table below: Table: Interest on consumer security deposit for FY 2010-11 as submitted by BEST (Rs. Crore) S. No. Particulars 1 Consumer security deposit 2 Rate of Interest claimed 3 Interest on consumer security deposit Additional interest on consumer deposit amount paid in 4 FY 2010-11 for earlier year 5 Net Interest on consumer security deposit Actual (Audited ) 220.65 6.00% 13.24 0.55 13.79
BEST submitted that the actual interest on consumer deposit has been calculated as per the stipulated interest rate of 6% on net security deposit with BEST, which works out to Rs. 13.79 Crore for FY 2010-11. BEST requested the Commission to approve the same.
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The Commission has estimated the normative working capital interest for FY 2010-11 in accordance with the MERC Tariff Regulations and based on expenses approved in this Order after Truing-Up. However, in accordance with the MERC Tariff Regulations and the approach adopted by the Commission in the previous APR Orders for BEST, the Commission has not directly allowed the actual interest on working capital incurred by BEST, but has computed the sharing of losses on the difference between normative working capital interest and the actual working capital interest incurred, since this is a controllable parameter. In the case of BEST, the actual interest on working capital is higher than the normative interest on working capital, and hence, the difference between actual and normative working capital interest has been considered as a controllable efficiency loss, and hence, shared between BEST and the consumers. The details of the sharing have been elaborated later in this Section. The MERC Tariff Regulations stipulates that the rate of interest on working capital shall be considered on normative basis and shall be equal to the short-term Prime Lending Rate of State Bank of India as on the date on which the application for determination of tariff is made. As the short-term Prime Lending Rate of State Bank of India at the time when BEST filed the Petition for tariff determination for FY 2010-11 was 12.75%, the Commission has considered the interest rate of 12.75% for estimating the normative interest on working capital, which works out to Rs 26.29 Crore, while the Commission has considered actual interest on consumer security deposit. The Interest on Working Capital approved by the Commission is tabulated below: Table: Interest on Working Capital approved by the Commission Particulars Interest on working capital Interest on Consumers Security Deposits APR Order 9.01 14.41 Actuals/ Normative 26.38 13.79 (Rs. Crore) Allowed after truing up 26.38 13.79
As regards the additional Interest on Working Capital for FY 2008-09 and FY 2009-10, the Commission in line with the directions given vide Order dated 16 May, 2012 in Case No. 171 of 2011 approves additional IOWC of Rs. 33.10 Crore under the Truing up of FY 2010-11.
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Table: Additional Interest on Working capital of FY 2008-09 & FY 2009-10 approved by the Commission (Rs Crore) S. No. 1 2 3 Particulars IWC Approved by Commission IOWC Gap IOWC Gap to be Carried forward Approved Approved (FY 2008-09) (FY 2009-10) 10.88 18.12 19.18 13.92 33.10
3.11 OTHER EXPENSES FOR FY 2010-11 BEST submitted that for FY 2010-11, it has incurred other expenses of Rs. 54.63 Crore as against the amount of Rs. 54.63 Crore approved vide APR Order dated 16 March, 2012 in Case No. 125 of 2011. The break-up of other expenses as submitted by BEST is given in the table below: Table: Break-up of other expenses submitted by BEST (Rs. Crore) Sl. No. 1 2 3 4 5 Particulars Power Factor Incentive Prompt Payment Discount ECS Discount DSM Load factor discount Total Approved in Case No. 125 of 2011 Actual expense incurred 46.72 7.62 0.28 0.00 0.01 54.63
54.63
BEST requested the Commission to approve other expenses of Rs. 54.63 Crore on the basis of actual for FY 2010-11. The Commission has accepted BESTs submission for other expenses of FY 2010-11 and considered the same under the Truing-up exercise for FY 2010-11. 3.12 CONTRIBUTION TO CONTINGENCY RESERVES BEST submitted that vide Order dated 12 September, 2010, the Commission had approved contribution to Contingency Reserve at the rate of 0.25% of Opening Gross Fixed Assets instead of 0.5% on Opening GFA as submitted by BEST in its APR Petition. BEST submitted that in accordance with the same, it has computed contribution to contingency reserve at 0.25% on Opening GFA (Rs. 1545.11 Crore), i.e., Rs. 3.86 Crore for FY 2010-11. BEST further submitted that since it is providing contingency reserve at rate of 0.5% on Opening GFA from FY 2008-09
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and invested in Securities approved under the Indian Trust Act, the same were transferred from contingency reserve to the General Investment Account of BEST. BEST requested the Commission to approve Contingency reserve amount of Rs. 3.86 Crore as against actual of Rs. 7.70 Crore. On a specific query asked by the Commission, BEST submitted documentary evidence showing that the Contingency Reserves created in FY 2010-11 have been invested in approved securities in accordance with MERC Tariff Regulations, 2005. Accordingly, the Commission has allowed provisioning towards contingency reserve for FY 2010-11 at Rs. 3.94 crore (i.e., 0.25% of Opening GFA) under the truing up exercise, in accordance with MERC Tariff Regulations and the Commissions philosophy outlined under earlier Orders. 3.13 NON-TARIFF INCOME FOR FY 2010-11 BEST submitted that the actual Non-Tariff Income for FY 2010-11 was Rs. 49.12 Crore against the previous submission (APR Petition in Case No. 125 of 2011) of Rs. 71.56 Crore. BEST submitted that the audited Non-Tariff income is lower than the estimated Non-Tariff income submitted earlier, which can be attributed to the fact that the income from customer charges/ contract charges has been zero as compared to estimated Rs. 8 Crore during the year. BEST added that there has been a significant reduction in income from delayed payment and miscellaneous charges as projected earlier by BEST. The details of the Non-tariff income as submitted by BEST are as shown in the table below: Table: Non Tariff Income for FY 2010-11 submitted by BEST (Rs. Crore) FY 2009-10 APR Order BEST Submission in previous APR Petition (Under Case No. 125 of 2011) 8.00 Audited Income Received in FY 2010-11 0.00
Sl. No.
Particulars
1 2 A
Customer Charges/ Contract charges Other receipts Delayed payment (Rs.11.49 Crore), Interest on Arrears (Rs. 12.26 Crore)
28.00
23.75
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Sl. No.
Particulars
FY 2009-10 APR Order
BEST Submission in previous APR Petition (Under Case No. 125 of 2011) 0.07 0.04 28.00
Audited Income Received in FY 2010-11
B C 3
Other Receipts (Reconnection, Requisition, Damaged meter charges, etc.) Electricity Duty collection charges MISC [Rent of Buildings-Rs.0.37 Crore, Advertisement ReceiptsRs.11.47 Crore, & Others-Rs.5.62 Crore) Share of Receipts of General Administration Interest on contingency Reserve Total
0.36 0.04 17.46
4 5
90.49
7.00 0.45 71.56
7.51 0.00 49.12
BEST requested the Commission to approve the actual Non-Tariff income of Rs. 49.12 Crore for FY 2010-11. Details of the heads of Non-tariff income as submitted by BEST are as under: Table: Non Tariff Income for FY 2010-11 as submitted by BEST Sl. No. Particulars Explanation The total revenue under the Contract charges is Rs. 17.57 Crore. As against this, the total expenditure is Rs. 17.60 Crore thus Contract charges are now shown as Nil. The main reason for increase in the expenditure is on account of Employee Expenses which has increased from Rs. 12.21 Crore in FY 2009-10 to Rs. 14.49 Crore in FY 2010-11. Similarly in case of Material Cost, the same is increased from Rs. 2.38 Crore in FY 2009-10 to Rs. 3.11 Crore in FY 2010-11
Contract charges
Other Receipts
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Sl. No. (a)
Particulars
Explanation
This includes the Delayed payment charges recovered from the Delayed Payment Charges & consumers amounting to Rs. 11.49 Crore and Rs. 12.26 Crore Interest on Arrears towards Interest on arrears payment against the Electricity bills Reconnection, Requisition, Other charges related to Reconnection charges, Requisition Damaged meter charges, etc) charges, Damaged meter charges, etc. amounting to Rs. 0.36 Crore. Electricity Charges Duty Collection These are charges towards Electricity duty collected on behalf of Government of Maharashtra at a rate of Rs. 45 per 100 consumers.
(b)
(c)
This includes three heads i.e. Rent of building and land, Advertisement receipts and other receipts. i) Rent of building and land This consists of the rent recovery from the staff/officers who are occupying the quarters of the Undertaking. In addition to this there are certain premises wherein shops are allotted to the outside Miscellaneous (Rent of parties. The rent of said shops shall vary as per the location of the Buildings, Advertisement premises and offer given by the bidder. ii) Advertisement Receipts Receipts) This consists of Advertisement Receipts received from highest bidder on monthly guaranteed revenue on Kiosks i.e. Advertisement on Street lighting poles. iii) Other receipts This consists of Cash discount received from various suppliers, penalty recovered from the suppliers/employees etc. Share of General Administration receipt This consists of share of General Administration Receipts wherein interest on deposit and investment, sale of scrap material (net) Rent of building and land, Apprentice premium received from the Government etc. Interest on Contingency Reserve from FY 2008-09 was transferred from the Investment of Contingency Reserve A/c. to Non-Tariff Income in the FY 2011-12 and hence same was shown as Nil here.
Interest on Contingency Reserve
As per the standard practice followed by the Commission, interest on contingency reserve has been considered under the Non-Tariff Income. Thus, the Commission has computed interest on entire balance of contingency reserve as Rs. 4.74 Crore, which has been included under the head
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of Non- tariff income. After the analysis of the components of Non-Tariff income considered by BEST, the summary of Non-tariff income approved in the APR Order, actuals and approved after Truing-Up for FY 2010-11, has been shown in the following Table:
Table: Non-Tariff income for FY 2010-11 considered by Commission (Rs Crore) Particulars Non-Tariff Income APR Order 48.80 Actuals 49.12 Allowed after truing up 53.86
3.14 SHARING OF GAINS AND LOSSES IN FY 2010-11 The relevant provisions under the MERC Tariff Regulations stipulating sharing of gains/losses due to controllable factors are reproduced below: 17.6.2 Some illustrative variations or expected variations in the performance of the applicant which may be attributed by the Commission to controllable factors include, but are not limited to, the following: (a) Variations in capital expenditure on account of time and/ or cost overruns/efficiencies in the implementation of a capital expenditure project not attributable to an approved change in scope of such project, change in statutory levies or force majeure events; (b) Variations in technical and commercial losses, including bad debts; (c) Variations in the number or mix of consumers or quantities of electricity supplied to consumers as specified in the first and second proviso to clause (b) of Regulation 17.6.1; (d) Variations in working capital requirements; (e) Failure to meet the standards specified in the Standards of Performance Regulations, except where exempted in accordance with those Regulations; (f) Variations in labour productivity; (g) Variations in any variable other than those stipulated by the Commission under Regulation 15.6 above, except where reviewed by the Commission under the second proviso to this Regulation 17.6. 19.1 The approved aggregate gain to the Generating Company or Licensee on account of controllable factors shall be dealt with in the following manner: (a) One-third of the amount of such gain shall be passed on as a rebate in tariffs over such period as may be specified in the Order of the Commission under Regulation 17.10;
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(b) In case of a Licensee, one-third of the amount of such gain shall be retained in a special reserve for the purpose of absorbing the impact of any future losses on account of controllable factors under clause (b) of Regulation 19.2; and (c) The balance amount of gain may be utilized at the discretion of the Generating Company or Licensee. 19.2 The approved aggregate loss to the Generating Company or Licensee on account of controllable factors shall be dealt with in the following manner: (a) One-third of the amount of such loss may be passed on as an additional charge in tariffs over such period as may be specified in the Order of the Commission under Regulation 17.10; and (b) The balance amount of loss shall be absorbed by the Generating Company or Licensee. The Commission has considered the various expenses for computing the sharing of gains/losses in accordance with the MERC Tariff Regulations, as elaborated below:
3.14.1 Operation and Maintenance Expenses The actual A&G expenditure in FY 2010-11 is lower as compared to A&G expenditure provisionally approved by the Commission in its Order dated 16 August, 2012 in Case No. 62 of 2012. The actual A&G expense for FY 2010-11 is Rs. 82.75 Crore as against Rs. 83.61 Crore provisionally approved by the Commission. The efficiency gain has been computed for O&M expenses, and shared according to the MERC Tariff Regulations. The efficiency gain approved by the Commission to be passed on to the consumers works out to Rs. 0.29 Crore as shown in Table below: Table: Gains and losses approved by the Commission due to variation in O&M Expenses (Rs. Crore) Approved Efficiency after Gain/ Truing(Loss) up Efficiency Gain/ (Loss) shared with consumers Net Entitlement including amount transferred to special reserves 317.36
SL. No.
Particulars
APR Order
Actual
Operation & Maintenance Expenses
302.15
316.79
316.79
0.86
0.29
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3.14.2 Incentive for Reduction in Distribution Losses BEST submitted that it has achieved actual distribution loss of 7.94% against the target of 9.50% approved by the Commission in the APR Order dated 12 September, 2010 in Case No. 95 of 2009 for FY 2010-11, hence, it is eligible for claiming incentive for reduction of Distribution loss. The incentive for FY 2010-11 on account of reduction in distribution loss as submitted by BEST is given below:
Table: Incentive for reduction in Distribution Loss for FY 2010-11 as submitted by BEST Sl. No. 1 2 3 4 5 6 7 8 9 Particulars Normative Distribution loss Normative sales considering same Energy input Actual sales in FY 2010-11 Additional sales due to actual distribution loss less than the normative target at 9.50% Actual revenue for the year Average billing rate Additional revenue due to actual distribution loss Amount retained by BEST (2/3rd of above incentive) Amount passed to consumers by BEST Units % MU MU MU Rs. Crore Rs. / Unit Rs. Crore Rs. Crore Rs. Crore Amount 9.50% 4194.93 4267.11 72.18 2677.57 6.27 45.29 30.20 15.10
BEST requested the Commission to allow the above incentive of Rs. 30.20 Crore for FY 201011 as the same is in accordance with MERC (Terms and conditions of Tariff) Regulations, 2005. The Commission observed that BEST has retained 2/3rd of efficiency gain on account of reduction in distribution loss in the Petition. According to the MERC Tariff Regulations, 1/3rd of efficiency gains has to be passed on to the consumers, 1/3rd has to be passed on to special reserves and 1/3rd can be retained by the Distribution Licensee. The efficiency gain/loss computed by the Commission to be shared with the consumers works out to Rs. 14.42 Crore, as shown below:
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Table: Incentive for reduction in Distribution Loss for FY 2010-11 as approved by the Commission Sl. No. 1 2 3 4 5 6 7 8 9 10 Particulars Normative Distribution loss Normative sales considering same Energy input Actual sales in FY 2010-11 Additional sales due to actual distribution loss less than the normative target at 9.50% Actual revenue for the year Average billing rate Additional revenue due to actual distribution loss Amount passed on to the special reserve (1/3rd of above incentive) Amount retained by BEST (1/3rd of above incentive) Amount passed on to consumers by BEST (1/3rd of above incentive) Units % MU MU MU Rs. Crore Rs. / unit Rs. Crore Allowed after Truing-up 9.50% 4198.16 4267.11 68.95 2677.57 6.27 43.27 14.42 Rs. Crore Rs. Crore 14.42 14.42
3.15 INCLUSION OF DEFICIT OF TRANSPORT DIVISION BEST submitted that in FY 2010-11, the deficit of Transport Division operations was Rs. 400.38 Crore. BEST submitted that it has included the deficit of Transport Division in ARR of FY 201011 as part of the true-up exercise of FY 2010-11. BEST submitted that the Commission has duly adjudicated and decided the methodology and the necessity of allowing Transport deficit after adjusting ROE and ROIF vide its Order dated 16 March, 2012 in Case No. 125 of 2011 and 16 May, 2012 in Case No. 171 of 2011. Accordingly, BEST has claimed net Transport deficit of Rs. 279.56 Crore for FY 2010-11, after adjusting ROE and ROIF as shown in the following table: Table: Transport Deficit for FY 2010-11submitted by BEST (Rs. Crore) Sl. No. 1 2 3 Particulars Transport Deficit (Actual Audited) Less: RoE & RoIF Net Transport Deficit Amount (Rs. Crore) 400.38 120.82 279.56
In line with the philosophy adopted by the Commission in its previous Orders and after checking the actual Transport deficit from the audited accounts submitted by BEST, the Commission
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accepts BESTs claim in this respect. The net Transport deficit after adjusting RoE and RoIF for FY 2010-11 as approved by the Commission is shown in the Table below: Table: Transport Deficit for FY 2010-11approved by the Commission (Rs. Crore) Sl. No. 1 2 3 Particulars Transport Deficit (Actual Audited) Less: RoE & RoIF Net Transport Deficit Allowed after Truing-up 400.38 120.53 279.85
3.16 VIGILANCE DRIVE AMOUNT BEST submitted that it has recovered Rs. 17.09 Crore on account of vigilance drive, however, no liquidation has been received during FY 2010-11 for the said amount. BEST submitted that the liquidation received in FY 2010-11 was pertaining to FY 2008-09 and FY 2009-10. BEST further submitted that it has paid Rs. 0.63 Crore towards Electricity duty and Maharashtra Tax and since, the Commission has considered the total amount of vigilance drive as revenue therefore, BEST has adjusted the amount of Rs. 0.63 Crore against actual sale of energy of FY 2010-11. BEST submitted that the recovery of Rs. 17.09 Crore on account of Vigilance drive in FY 201011 is pursuant to Section 126 and/or Section 135 of the Electricity Act, 2003 and has been considered as provisional in nature. BEST added that after giving full opportunity to the consumers to plead their case, it was able to settle claims amounting to Rs. 7.61 Crore till March, 2013 for FY 2010-11 after deducting Electricity duty and Maharashtra Tax from the provisional amount. The vigilance drive amounts for FY 2010-11 as submitted by BEST are shown in the table below: Table: Vigilance drive amount for FY 2010-11 as submitted by BEST (Rs. Crore) Sl. No. 1 2 3 4 Particulars Provisional amount recovered against Vigilance drive Amount settled in FY 2011-12 Amount settled in FY 2012-13 Balance to be settled FY 2010-11 17.09 1.75 5.86 9.48
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BEST submitted that it has also appointed additional Review Committee in order to expedite the said cases and assured that Vigilance drive claims will be settled at the earliest. BEST requested the Commission to consider the net amount settled as Revenue for respective years. In line with the philosophy adopted by the Commission in its previous Orders the Commission has considered the entire additional revenue from vigilance drives amounting to Rs. 17.09 Crore as a part of Revenue of FY 2010-11. 3.17 AGGREGATE REVENUE REQUIREMENT (ARR) AND REVENUE GAP OF BEST FOR FY 2010-11 BEST submitted that Truing up for FY 2010-11 is based on comparison of the actual expenses incurred and revenue earned during the year vis--vis the amounts approved by the Commission in its Order dated 16 March, 2012 in Case No. 125 of 2011 and Order dated 26 August, 2012 in Case No.62 of 2012. BEST submitted that in accordance with the directives of the Commission vide its Order dated 26 August, 2012 in Case No 62 of 2012, it has included the amount of Rs. 40.56 Crore for FY 2008-09 and FY 2009-10 in the true-up of FY 2010-11. BEST further submitted that since, it is claiming the actual expenses for FY 2010-11, it has not included additional impact of Rs. 24.43 Crore separately for FY 2010-11. Based on the above discussion, BEST submitted the ARR for FY 2010-11 as shown in the following Table: Table: Aggregate Revenue Requirement submitted by BEST (Rs. Crore) Approved under Case No.125 of 2011 1647.23 277.80 166.56 82.63 28.61 On the basis of approved figure of Case 125 of 2011 & Case 62 of 2012 1647.23 302.15 189.93 83.61 28.61
Sl. No.
Particulars
Actual Audited
1 2 2.1 2.2 2.3
Power Purchase Expenses ( including External Power Purchase) Operation & Maintenance Expenses Employee Expenses Administration & General Expenses Repair & Maintenance Expenses
1684.09 316.79 199.32 82.75 34.72
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Sl. No.
Particulars
Approved under Case No.125 of 2011 52.20 11.28 8.77 0.00 14.41 0.00 54.63 0.00 109.63 111.11 0.63 3.93 0.00 2291.62 99.16 5.28 2396.07 48.80 295.94 2643.21 11.95 (1.34) 467.33
On the basis of approved figure of Case 125 of 2011 & Case 62 of 2012 52.32 9.65 9.01 0.00 14.41 0.00 54.63 0.00 109.63 111.11 0.63 3.93 0.00 2314.70 115.37 5.28 2435.35 48.80 279.73 2666.28 11.95 1.34 467.33 40.56
Actual Audited
3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Depreciation, including advance against depreciation Interest on Long-term Loan Capital & Short Term Finance Interest on Working Capital ( Normative) Interest on Working Capital (Additional) Interest on Consumer Deposits Bad Debts Written off Other Expenses Income Tax Stand-by charges payable to MSEDCL Transmission Charges payable to Transmission licensee Annual SLDC fees & charges Contribution to contingency reserves Incentive for reduction in Distribution loss Total Revenue Expenditure Return on Equity Capital Return as Interest on Internal funds Aggregate Revenue Requirement Less: Non-Tariff Income Add: Transport Deficit (Net of RoE and RoIF) Aggregate Revenue Requirement from Retail Tariff Impact of Review Order (Case no. 44 of 2009) Impact due to truing up for FY 2007-08, after cost-benefit analysis Revenue gap / (surplus) after final truingup of FY 2009-10 Impact of FY 2008-09 and FY 2009-10 in case no 62 of 2012
51.59 13.15 26.38 0.00 13.79 0.00 54.63 0.00 109.63 111.11 0.69 3.86 30.20 2415.91 115.51 5.28 2536.70 49.12 279.59 2767.17 11.95 1.34 467.33 40.56
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Sl. No.
Particulars
Approved under Case No.125 of 2011
On the basis of approved figure of Case 125 of 2011 & Case 62 of 2012
Actual Audited
27 28 29 30 31 32 33
Impact of Int. on working capital for FY 2008-09 & FY 2009-10 Net Aggregate Revenue Requirement (Less) RPS Cost Disallowed by the Hon'ble Commission in case no 125 of 2011 Mtax & ED amount of FY 2008-09 & FY 2009-10 Net ARR Revenue from Sale of Energy Revenue Gap 3121.12 3187.46
34.09 3322.44 (33.01) 0.63 3121.15 2677.57 443.58 3187.46 2677.57 509.89 3290.06 2677.57 612.49
The Commission observes that BEST has indicated amount recovered through vigilance drives in FY 2010-11 of Rs. 17.09 Crore and accordingly, the Commission has added the same to the revenue from sale of electricity of Rs. 2677.57 Crore, thus, resulting in total revenue of Rs. 2694.66 Crore. After considering the net revenue from retail tariff after final truing up of FY 2010-11 at Rs. 2694.66 Crore and the previous adjustments, the Commission approves net revenue Gap of Rs. 589.33 Crore for FY 2010-11, as shown in the Table below: Table: Revenue Gap/ (Surplus) for FY 2010-11 approved by the Commission (Rs. Crore) Net Entitlement including amount passed to special reserves 1656.68 0.29 317.36 199.32
Sl. No.
Particulars
Actual
Approved (MERC)
Efficiency Gain /(Loss) shared with consumers
1 2 2.1
Power Purchase Expenses ( including External Power Purchase) Operation & Maintenance Expenses Employee Expenses
1684.08 316.79 199.32
1656.68 316.79 199.32
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Sl. No.
Particulars
Actual
Approved (MERC)
Efficiency Gain /(Loss) shared with consumers 0.29
2.2 2.3 3 4 5 5.1 5.2 6 7 8 9 10 11 11 12 14 15 16 17 18 19 20 21 22 23
Administration & General Expenses Repair & Maintenance Expenses Depreciation, including advance against depreciation Interest on Long-term Loan Capital & Short Term Finance Interest on Working Capital ( Normative) Interest on Working Capital (Additional) Interest on Consumer Deposits Bad Debts Written off Other Expenses Income Tax Stand-by charges payable to MSEDCL Transmission Charges payable to Transmission licensee Annual SLDC fees & charges Contribution to contingency reserves Incentive for reduction of distribution loss Total Revenue Expenditure Return on Equity Capital Return as Interest on Internal funds Aggregate Revenue Requirement Less: Non -Tariff Income Add: Deficit in Transport Division Aggregate Revenue Requirement from Retail Tariff Impact of Review Order (Case No. 44 of 2009) Impact due to truing up for FY 2007-08, after cost-benefit analysis Revenue gap / (surplus) after final truing-up of FY 2009-10
82.75 34.72 51.59 13.15 26.38 0.00 13.79 0.00 54.63 0.00 109.63 111.11 0.69 3.86 30.20 2415.91 115.51 5.28 2536.69 49.12 279.59 2767.17 11.95 (1.34) 467.33
82.75 34.72 52.75 9.42 26.38 0.00 13.79 0.00 54.63 0.00 109.63 111.11 0.69 3.94
Net Entitlement including amount passed to special reserves 83.32 34.72 52.75 9.42 26.38 13.79 0.00 54.63 0.00 109.63 111.11 0.69 3.94
14.42 2355.82 115.25 5.28 2476.36 53.86 279.85 2702.34 11.95 (1.34) 467.33
28.84 2385.24 115.25 5.28 2505.78 53.86 279.85 2731.76 11.95 (1.34) 467.33
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Sl. No.
Particulars
Actual
Approved (MERC)
Net Entitlement including amount passed to special reserves 40.56 33.10 3283.36 2677.57 17.09 0.63 2694.66 589.33
24 25 27 28 29 30 31 32
Impact of FY 2008-09 & FY 2009-10 in Case No 62 of 2012 Impact of Interest on working capital for FY 2008-09 and FY 2009-10 Net Aggregate Revenue Requirement Revenue from existing tariff Revenue from vigilance drive M-tax & ED amount of FY 2008-09 & FY 2009-10 Net Revenue from electricity sales Net Revenue Gap/(Surplus)
40.56 34.09 3322.43 2677.57
40.56 33.10 3253.94 2677.57 17.09 0.63 2694.66 559.91
0.63 2677.57 645.50
The Aggregate Revenue Requirement for FY 2010-11 is lower than that projected by BEST is primarily due to the following reasons: (a) Reduction in power purchase cost from RE sources. (b) Reduction in Interest on long-term loan due to consideration of funding requirement based on approved capitalization. (c) Increase in Non Tariff Income due to consideration of interest on contingency reserve investment.
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4 TRUING UP OF AGGREGATE REVENUE REQUIREMENT FOR FY 2011-12

In this Section, the Commission has analysed all the elements of actual expenditure and revenue for BEST for FY 2011-12 and has undertaken the truing up of expenses and revenue after prudence check. Further, for FY 2011-12, the Commission has approved the sharing of gains and losses on account of controllable factors between BEST and the consumers, in accordance with Regulation 19 of the MERC Tariff Regulations, 2005 in this Section. 4.1 SALES
BEST submitted that in its supply area, Residential and Commercial category consumers comprise the bulk of the consumption. BEST submitted that in FY 2011-12, Residential category and Commercial category accounted for 41% and 50%, respectively, of the total energy sold while Industrial consumers accounted for 7% of the total energy sold. BEST submitted that for FY 2011-12, the actual sale was 4286.05 MU as against the sale of 4300.96 MU approved in Tariff Order dated 16 May, 2012 in Case No. 171 of 2011. The actual category wise sales for FY 2011-12 along with the provisional sales for FY 2011-12 approved in Tariff Order dated 16 May, 2012, as submitted by BEST is shown in the following Table: Table: Comparison of Sales for FY 2011-12 as submitted by BEST (MU) Approved FY 2011-12 ARR, Case 171 of 2011 0.21 1739.51 902.40 346.96 472.64 50.60 53.94 Audited FY 2011-12
Sl. No.
Consumer category LOW TENSION CATEGORIES LT I BPL LT I Residential LT II A Commercial up to 20 kW LT II B Commercial > 20 kW 50 kW LT II C Commercial < 50 kW LT III Industrial up to 20 kW LT IV A Industrial > 20 kW 100 kW
1 2 3 4 5 6 7
0.23 1731.06 896.82 273.14 546.12 50.52 54.45
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Sl. No. 8 9 10 11 12 13 14 15 16 17 18
Consumer category LT IV B Industrial > 100 kW LT V Advertisement and Hoardings LT VI St. Ltg. LT VII A Temp. Religious LT VII B Temp. Others LT VIII Crematorium and Burial Grounds HIGH-TENSION CATEGORIES HT I - Industries HT II - Commercial HT III - Group Housing HT IV - Temp. Supply Total
Approved FY 2011-12 ARR, Case 171 of 2011 48.49 3.29 30.16 0.40 40.46 1.00 147.46 426.53 31.76 5.18 4300.96
Audited FY 2011-12 48.57 3.21 29.90 0.09 40.76 1.26 149.14 423.99 31.76 5.02 4286.05
BEST submitted that there has been a growth of 0.44% in the sales in FY 2011-12 as compared to that in FY 2010-11. The Commission has accepted BESTs submission in this regard and approved actual sales for FY 2011-12 as submitted by BEST. The summary of the sales approved by the Commission for FY 2011-12 after truing up as compared to the sales approved by the Commission in Tariff Order dated 16 May, 2012 in Case No. 171 of 2011 is given below: Table: Summary of the Commission approved Sales (MU) Particulars Sales Tariff Order 4300.96 Actuals 4286.05
4.2
DISTRIBUTION LOSSES AND ENERGY INPUT REQUIREMENT
BEST submitted that the actual distribution loss in FY 2011-12 was 7.56%, as against 7.94% approved by the Commission in Tariff Order dated 16 May, 2012 in Case No. 171 of 2011 as given in the Table below:
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Table: Distribution Losses as submitted by BEST (%) Particulars Distribution Losses Tariff Order 7.94% Actuals 7.56%
The Energy Balance summary for FY 2011-12 as submitted by BEST is shown in the following Table: Table: Energy Balance for FY 2011-12 as submitted by BEST (MU) Sr. No. 1 2 3 4 5 Sales Distribution Loss Energy Requirement at T< >D interface Intra-State Transmission Loss Energy Requirement at G< >T interface Particulars FY 2011-12 Tariff Order (Case No. 171 of 2011) 4300.96 7.94% 4671.90 4.26% 4879.90 Actuals 4286.05 7.56% 4636.71 4.38% 4849.11
It is observed that the actual intra-State transmission losses for FY 2011-12 as per MSLDC website (http://mahasldc.in/wp-content/reports/Transmission-loss-for-2011-12.pdf) are 4.25%, and accordingly, the Commission has considered Transmission losses at 4.25% based on which the distribution loss for FY 2011-12 works out to 7.69%. Accordingly, while Truing-up, the Commission has approved distribution loss at 7.69% for FY 2011-12. In view of the above, the Commission has restated the energy balance considering the energy requirement of 4848.97 MU at G < > T Interface, actual sale of 4286.05 MU, and the actual distribution loss of 7.69% for FY 2011-12, as shown in the Table below: Table: Summary of Energy Balance for FY 2011-12 approved by the Commission (MU) Sr. No. 1 2 3 4 5 Sales Distribution Loss Energy Requirement at T<>D interface Intra-State Transmission Loss Energy Requirement at G<>T interface Particulars FY 2011-12 4286.05 7.69% 4642.89 4.25% 4848.97
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Since, the actual distribution losses are lower than the targeted distribution loss of 9% for FY 2011-12, the corresponding efficiency gains have been shared between BEST and the consumers, as elaborated in subsequent paragraphs of this Section of the Order. 4.3 POWER PURCHASE QUANTUM AND COST FOR FY 2011-12
BEST submitted that for FY 2011-12, it had procured power primarily from TPC-G, while remaining power was procured from renewable power sources, external sources, IEX, bilateral sources, etc. BEST further submitted that for FY 2011-12, it has considered source-wise power purchase expense as per the audited accounts of FY 2011-12, as summarised in the Table below: Table: Source wise Power Purchase quantum and Cost as submitted by BEST for FY 2011-12
Tariff Order (Case No. 171 of 2011) Rs. MU Crore Rs./kWh Actual Rs. Crore
Particulars TPC-G ( including Unit 8 and hydel and Fixed Charges RPS Additional Power Purchase / (Sale) Sales by BEST (including Pool imbalance) Standby Charges Less: Hydel Rebate Transmission Charges SLDC Charges IBSM and UI Settlement Less: Rebate Given by TPC-G Total Power Purchase Expenses
MU
Rs./kWh
5039.48 239.56 77.23 (476.37) 4879.90
2409.23 116.44 30.88 (284.85) 107.85 127.63 0.96 0.44 (25.02) 2483.55
4.78 4.86 4.00 5.98
5110.39 218.21 88.00
2490.30 112.70 34.39
4.87 5.16 3.91 7.39
(567.49) (419.43) 107.85 127.64 0.96 (28.73) 2425.68
5.09
4849.11
5.00
4.3.1 Procurement from TPC-G BEST submitted that the rate for power purchase from TPC-G has increased significantly during FY 2011-12. BEST submitted that it is purchasing a major portion of power from TPC-G and the main reason behind increase in power purchase cost is the increase in fuel cost. BEST submitted that considerable amount of power generated by TPC-G is based on oil and imported coal and the cost of oil and imported coal has increased significantly during FY 2011-12. BEST submitted
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the rise in energy charge (Rs./kWh) Unit-wise and fuel-wise from the rates approved for TPC-G vide Order dated 8 September, 2010 in Case No. 96 of 2009 as shown in the following table: Table: Fuel Cost for FY 2011-12 submitted by BEST Sl. No. 1 2 3 4 5 6 TPC-G (Units) Unit 4 Unit 5 Unit 5 Unit 6 Unit 6 Unit 7 Fuel LSHS LSHS Coal RLNG LSHS Gas Approved under Case No. 96 of 2009 (Rs. /unit) 8.01 7.49 2.22 3.70 7.15 1.69 Actual for Nov. 2011 (Rs./unit) 14.13 4.04 6.75 13.50 3.16 % Rise 88.65% 81.98% 82.43% 88.81% 86.98%
BEST submitted that actual per unit power purchase cost from TPC-G is significantly higher than the per unit cost approved by the Commission vide Order dated 8 September, 2012 in Case No. 96 of 2009. BEST further submitted that though FBSM mechanism has been implemented in the State of Maharashtra with effect from August 2011, the quantum and cost of power purchased by BEST from TPC-G is based on TPC-Gs bills as FBSM bills prepared by MSLDC are provisional and are yet to be finalized. BEST added that as and when FBSM bills will be finalized, it would then duly reconcile power purchase quantum and cost for FY 2011-12. The Commission has approved the actual cost of power purchase by BEST from TPC-G, since, it is in accordance with the tariff approved by the Commission for sale of energy by TPC-G. The summary of power purchase by BEST from TPC-G as approved after final truing up is tabulated below: Table: Power Purchase by BEST from TPC-G for FY 2011-12 as approved by the Commission Actuals Approved after Truing Up Average Average Particulars Quantum Cost (Rs Quantum Cost (Rs Rate (Rs. Rate (Rs. (MU) Crore) (MU) Crore) Per unit) Per unit) TPC-G: Existing Units 4431.98 2245.67 5.07 4431.98 2245.67 5.07 (Units 4-7 and Hydro) Page 93 of 308
Actuals Particulars TPC-G Unit 8 TOTAL Quantum (MU) Cost (Rs Crore) Average Rate (Rs. Per unit) 3.61
678.41 5110.39
244.63 2490.30
Approved after Truing Up Average Quantum Cost (Rs Rate (Rs. (MU) Crore) Per unit) 678.41 244.63 3.61
4.87
5110.39
2490.30
4.87
4.3.2 Renewable Purchase Obligation (RPO) BEST submitted that in FY 2011-12, the actual quantum of Renewable power purchased by BEST was 218.21 MU, which is lower than the approved quantum of 239.56 MU, which has resulted in decrease of power purchase cost from renewable sources as compared to that approved in the Tariff Order dated 16 May, 2012 in Case No. 171 of 2011. In reply to the Commissions query regarding source-wise quantum and cost of RE power purchase, BEST submitted the following details: Table: Source-wise quantum and cost of RE Power Purchase as submitted by BEST
$ Total Cost at MSETCL Periphery (Energy+Tra ding Margin+O.A ) Rs in Cr C 15.79 2.32 * Preferential Tariff approved by MERC Rs./kWh G 4.79 4.79
SOURCE Sr No NAME of GENERATOR 1 2 TPTCL(LOKMANGAL) TPTCL(LOKMANGAL AGRO) TPTCL M/s Celerity Power (Small Hydro COD 09.10.2009) TPTCL-(A.A. Energy) TPTCL-(Yash Agro Energy Ltd) TYPE of RE Bagasse Bagasse
Quantum of Energy Purchased
Energy Accounted in IBSM
Wheeling Loss
Wheeling Charges
Rate at MSETCL Periphery
MU's A 32.05 4.56
MU's B 32.05 4.290
% D 0% 6%
Rs/ kWh E 0.00 0.04
Rs/ kWh F=C*10/B 4.93 5.42
Small Hydro
9.14
8.587
2.69
6%
0.04
3.13
3.02
4 5
Biomass Biomass
41.86 26.06
41.69 23.70
21.43 13.45
0% 6%
0.00 0.04
5.14 5.67
4.98 4.98
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Sr No
SOURCE
Quantum of Energy Purchased
Energy Accounted in IBSM
$ Total Cost at MSETCL Periphery (Energy+Tra ding Margin+O.A ) 2.11 7.53 14.33 1.22 11.03 18.51
Wheeling Loss
Wheeling Charges
Rate at MSETCL Periphery
* Preferential Tariff approved by MERC
6 7 8 9 10 11
TPTCL- (Pioneer Distilleries Ltd) TPTCL- (Indra Power Gen Ltd) Knowledge Infra (RR Energy) GEPL ( Jamkhandi Sugar) Knowledge Infra (Godawari) TPTCL-Shri Nakoda Ispat Ltd TOTAL
Biogass Biomass Biomass Bagasses Bagasses Biomass
3.91 14.69 28.00 2.46 22.33 36.16
4.13 14.69 28.00 2.43 22.33 36.16
6% 0% 0% 0% 0% 0%
0.04 0.00 0.00 0.00 0.00 0.00
5.11 5.13 5.12 5.00 4.93 5.12
4.98 4.98 4.98 4.79 4.79 4.98
221.22
218.07
110.39
Note: $Cost at MSETCL periphery is inclusive of Trading Margin (upto 30 Nov., 2012), Transmission
Charges/loss, Wheeling Charges/loss *Preferential Tariff is not inclusive of Transmission Charges/loss, and Wheeling Charges/loss. Preferential Tariff includes Trading Margin from 1 Dec, 2011.
BEST further submitted that it has purchased RECs worth Rs. 0.29 Crore in FY 2011-12. As regards average rate of power purchase, the Commission observes that BEST has procured power from RE sources at a rate much higher than the preferential tariff approved by the Commission in its various Orders. Accordingly, the Commission has considered the preferential tariff as submitted by BEST and recomputed the allowable power purchase cost for RE power purchase. As regards non-fulfilment of the RPO target, the Commission, vide its Order dated 17 April, 2013 in Case No. 30 of 2012 had ruled as follows: 10. Having heard the Petitioner and after considering the relevant material placed on record, the Commission observed that BEST has already fulfilled its non-solar RPO
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target for the FY 2010-11 and 2011-12. It is also observed that BEST is likely to fulfil the non-solar target for FY 2012-13 before 31 March, 2013. 11. The Commission is of the view that BEST has given adequate justification to demonstrate that it has undertaken all the efforts in procuring Solar power in order to meet its RPO targets and in spite of the efforts undertaken by it, it faced a genuine difficulty in meeting its solar RPO target. Further, the Commission opines that any constraint regarding availability of Solar power or Solar RECs for meeting Solar RPO targets in future could be mitigated by tying up adequate quantum and sources for Solar power in a timely manner through advance actions and/or timely purchase of Solar RECs from the market. 12. As per Regulation 18.1 of MERC (RPO-REC) Regulations, 2010, the Commission has powers to relax or waive any of the provision of the said Regulations after giving an opportunity of being heard to parties likely to be affected. Relevant extract of said Regulations is as under: 18.1 The Commission may by general or special order, for reasons to be recorded in writing, and after giving an opportunity of hearing to the parties likely to be affected may relax or may waive any of the provisions of these Regulations on its own motion or on an application made before it by an interested person. 13. Thus, the Commission hereby relaxes/waives the Solar RPO targets as stipulated under Regulation 7.1 of the MERC (RPO-REC) Regulation 2010 for BEST for FY 201011 and FY 2011-12 and directs BEST to fulfil the solar target on a cumulative basis by FY 2015-16. 14. Regarding the shortfall in RPO targets for non-solar (including mini/micro hydro targets) for FY 2010-11 and FY 2011-12 and RPO targets for FY 2012-13 cumulatively before 31 March, 2013, the same shall be reviewed by the Commission in the proceeding for Verification and Compliance of RPO targets for FY 2012-13 as specified under MERC (RPO-REC) Regulations, 2010. From the above extracts of the Order, it is evident the Commission has allowed a carry forward of RPO compliance of FY 2010-11 and FY 2011-12 cumulatively in FY 2012-13, which has been achieved by BEST and the same has been discussed in detail in Section 5 of this MYT
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Order. Therefore, for FY 2011-12, the Commission has considered the quantum of purchase from Renewable energy sources as submitted by BEST in the Petition. Considering the above, the Commission has approved power purchase of 218.07 MU from renewable sources at purchase cost of Rs. 106.05 Crore including REC purchase of Rs. 0.29 Crore for FY 2011-12, as shown in the Table below: Table: Renewable Energy Purchase Cost approved by the Commission for FY 2011-12 (Rs. Crore) Preferential Tariff approved by Commission 4.79 3.02 4.98 4.98 Power Purchase Cost approved by the Commission 29.27 2.59 71.83 2.06 0.29 218.07 106.05
Source Bagasse Small Hydro Biomass Biogas REC Total
Quantum 61.10 8.59 144.24 4.13
4.3.3 Power Purchase/(Sale) from Short-term sources and Imbalance Pool BEST submitted that the actual power purchased from the short-term sources was 88.00 MU at a cost of Rs. 34.39 Crore and accordingly the price of short-term power works out to Rs.3.91 per unit. BEST further submitted it has sold extra power to the Imbalance Pool and others to the extent of 567.49 MU at a cost of Rs. 419.43 Crore, the per unit cost of which works out to Rs.7.39 per unit. The Commission has accepted BESTs submission in this regard. The breakup of additional Power Purchase/(Sale) and Imbalance Pool purchase as approved by the Commission is as follows:
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Table: Power Purchase/(Sale) from Short-term Sources and Imbalance Pool for FY 2011-12 as approved by the Commission Approved under Approved after Actuals Case No. 171 of 2011 Truing Up Source of Power Cost (Rs Cost (Rs Quantum Cost (Rs Quantum Quantum Crore) Crore) (MU) Crore) (MU) (MU) Additional 77.23 30.88 Power Purchase 88.00 34.39 88.00 34.39 /(Sale) Pool Imbalance (476.37) (284.85) (567.49) (419.43) (567.49) (419.43) purchase /(Sale)
4.3.4 MSLDC and Transmission Charges BEST submitted that the Transmission Charges for FY 2011-12 were Rs.128.60 Crore including MSLDC charges to the extent of Rs 0.96 Crore, which is same as that approved by the Commission in its Tariff Order dated 16 May, 2012 in Case No. 171 of 2011. The Commission has considered BESTs submissions in this regard and has accordingly approved Transmission Charges and MSLDC Charges at Rs. 128.60 Crore under the truing up exercise 4.3.5 Stand-by Charges As regards Standby Charges being paid to the Maharashtra State Electricity Distribution Company Limited (MSEDCL), BEST submitted that it has considered an amount of Rs. 107.85 Crore based on the actuals and the same has been approved by the Commission in its Tariff Order dated 16 May, 2012 in Case No. 171 of 2011 for FY 2011-12. The Commission has accepted BESTs submission in this regard and has approved Standby Charges of Rs. 107.85 Crore under final truing-Up exercise for FY 2011-12.
4.3.6 Summary of Power Purchase related Costs The summary of power purchase quantum and costs, including Standby Charges and Transmission Charges for FY 2011-12 as submitted by BEST and approved by the Commission after final truing up, is given in the following table:
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Table: Summary of Power Purchase Quantum and Costs approved by the Commission for FY 2011-12
Actual Rs. Crore Approved after Truing-up Rs. MU Crore Rs./kWh
Particulars TPC-G ( including Unit 8 and hydel and Fixed Charges) RPS REC Additional Power Purchase / (Sale) Sales by BEST (including Pool imbalance) Standby Charges Less: Hydel Rebate Transmission Charges SLDC Charges IBSM and UI Settlement Less: Rebate Given by TPC-G Total Power Purchase Expenses
MU
Rs./kWh
5110.39 218.21 88.00
2490.30 112.70 34.39
4.87 5.16 3.91
5110.39 218.07 88.00
2490.30 105.75 0.29 34.39 (419.43) 107.85 127.64 0.96 (28.73) 2419.03
4.87 4.85 3.91 7.39
(567.49) (419.43) 4849.11 107.85 127.64 0.96 (28.73) 2425.68
7.39 (567.49) 5.00 4848.97
4.99
4.4
O&M EXPENSES FOR FY 2011-12
4.4.1 Employee Expenses BEST submitted that the actual employee expenses for FY 2011-12 as per its audited accounts were Rs. 220.75 Crore as against employee expenses of Rs. 182.00 Crore approved by the Commission in Order dated 16 May, 2012 in Case No. 171 of 2011. The employee expenses submitted by BEST are shown in the following table: Table: Employee expenses submitted by BEST for FY 2011-12 Sl. No. Particulars 1 Employee Expenses Audited Expense (FY 2010-11) 199.32 (Rs. Crore) Approved in Case No. 171 of 2011 182.00 Audited Expense (FY 2011-12) 220.75
The detailed break up of employee expenses for FY 2011-12 as submitted BEST is shown in the following table: Page 99 of 308
Table: Detailed break up of employee expenses as submitted by BEST for FY 2011-12 (Rs. Crore) As submitted in petition 66.36 87.95 10.52 0.46 1.61 2.46 4.01 5.28 4.09 8.34 13.62 0.00 0.00 19.85 8.23 2.84 235.62 Approved in Case No. 171 of 2011 Audited expense incurred 66.36 94.41 9.79 0.43 1.52 2.81 3.76 4.62 4.03 8.37 10.98 0.00 0.00 19.64 10.29 2.57 240.73 Difference = Audited Expense Submitted in previous APR petition 0.00 6.46 (0.73) (0.03) (0.09) 0.35 (0.25) (0.66) (0.03) 0.03 (2.64) 0.00 0.00 (0.21) 2.06 (0.27) 3.96
Sl. No.
Particulars
1 2 3 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19
Basic Salary Dearness Allowance (DA) House Rent Allowance Conveyance Allowance Leave Travel Allowance Earned Leave Encashment Medical Allowance Overtime Payment Bonus/Ex-Gratia Payments Interim Relief/Wage Settlement Functional Allowance as per Agreement VRS Expenses/Retrenchment Compensation Special Benefit Provident Fund Contribution Gratuity Payment Cost of Bus Token/Passes Gross Employee Expenses Less: Expenses Capitalised Less: Establishment of CAS (0.40), T&E (0.14)& ST.LTG. (14.49) & Electrical Works(2.40) Dept. Net Employee Expenses
20
18.91
18.83
(0.08)
20
216.71
182.00
220.75
4.04
BEST submitted that the Commission in its Order dated 16 May, 2012 in Case No. 171 of 2011 for FY 2011-12, had provisionally approved the employee expense of Rs. 182.00 Crore for FY Page 100 of 308
2011-12. In its Order dated 26 August, 2012 in Case No. 62 of 2012, the Commission had approved revised employee expenses for FY 2010-11 amounting to Rs. 189.93 Crore after considering escalation factor of 8.49% over revised level of employee expenses of FY 2009-10, i.e., Rs. 174.76 Crore. BEST submitted that if the said rate of 8.49% is applied on the escalated amount of employee expenses of FY 2010-11 (i.e., Rs. 195.71 Crore), it works out to Rs. 212.32 Crore as against actual audited expense of Rs. 220.75 Crore. BEST further submitted that the actual employee expenses incurred is very close to the estimated employee expenses (using escalation factor) as shown in the following table: Table: Employee Expenses for FY 2011-12 using escalation factor submitted by BEST (Rs Crore) Actual Figures of FY 2010-11 using Escalation Factor 1 Employee Expense Escalation factor 195.71 8.49% Approved under MERCs order in Case No 171 of 2011 2 182 Using Escalation Factor 3 = 1*Escalation Factor 212.32 Actual Audited 4 220.75
Particulars
BEST submitted that if the escalation factor is considered, the audited amount is slightly higher than the estimated employee expenses. A detailed item-wise analysis of the employee expenses giving reasons for the increment in employee expenses as submitted by BEST is shown below: a) Increase in Dearness allowance by Rs. 6.46 Crore due to CPI index increase to the extent of 8.49 % over FY 2010-11. b) Marginal increase of Rs. 0.35 Crore, Rs. 0.03 Crore, and Rs. 2.06 Crore in other items, i.e., encashment of leave, interim relief, and gratuity, respectively. c) Due to fire incidence at Backbay 110 kV RSS on 16 October 2011, the gas insulated switchgear system was affected on account of abnormal temperature condition and carbon contaminated environment. The cable was also damaged, and to restore the supply to Nariman Point area, BEST had to deploy manpower for cable replacement and related works. The cost of such labour deployment was Rs. 0.81 Crore and the same is included in the employee expenses. d) Functional Allowances in FY 2010-11 were Rs.12.55 Crore, which reduced to Rs.10.98 Crore in FY 2011-12, i.e., a reduction of Rs. 1.57 Crore. At the same time, Interim /Wage Page 101 of 308
settlement in FY 2010-11 was Rs.1.92 Crore, which increased to Rs.8.37 Crore in FY 2011-12, , i.e., an increase of Rs.6.45 Crore, which was mainly on account of Industrial court award, and Managements decision to pay Rs.5000/- per employee against wage settlement for Festival of Ganapati and Ramzan Id in the month of July, 2011 vide BEST Committees Resolution No.186 dated 29 August, 2011. Total burden on account of this was Rs.4.16 Crore. Similarly Rs.5000/- was given as advance for Diwali Festival vide BEST Committees Resolution No.266 dated 20 October, 2011 and burden against this was Rs.4.21 Crore. Both these amounts were adjusted against the final wage settlement. e) Decrease was observed in the expenditure in case of HRA, conveyance allowance, LTA, medical allowance, overtime payment, ex-gratia, functional allowance, PF contribution, cost of bus token, amounting to Rs. 0.73 Crore, Rs. 0.03 Crore, Rs. 0.09 Crore, Rs. 0.25 Crore, Rs. 0.66 Crore, Rs. 0.03, Rs. 2.64 Crore, Rs. 0.21 Crore, and Rs. 0.27 Crore, respectively. BEST requested the Commission to approve the actual employee expenses of Rs. 220.75 Crore for FY 2011-12. The Commission has done the prudence check of each sub-head of employee expenses for FY 2011-12 in order to determine the allowable employee expenses for FY 2011-12.Based on BESTs submission and prudence check, the Commission has allowed the employee expenses as per actuals submitted by BEST under final truing up. The summary of employee expenses as approved by the Commission in Tariff Order dated 16 May, 2011 in Case No. 171 of 2011, actual employee expenses claimed by BEST, and employee expenses approved after final truing up for FY 2011-12, is shown in the following table: Table: Employee expense approved by the Commission for FY 2011-12 (Rs. Crore) Particulars Employee Expense Approved in Case No. 171 of 2011 182.00 Actual 220.75 Approved by the Commission 220.75
Since, the Commission has approved the actual employee expenses, which are higher than the employee expenses provisionally approved in Tariff Order dated 17 May, 2012 in Case No. 171 of 2011, hence, no sharing of efficiency gains/losses has been done for this expense head.
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4.4.2 A&G Expenses BEST submitted the A&G expenses approved by the Commission as against the actual A&G expenses incurred by BEST as per the audited accounts for FY 2011-12 as shown in the table below: Table: A&G expenses as submitted by BEST for FY 2011-12 (Rs. Crore) Sl. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 ARR Petition (Case No. 171 of 2011) 4.20 0.40 3.85 1.19 0.13 6.41 9.58 2.59 0.41 3.54 3.35 0.01 0.30 8.01 6.97 37.61 88.55 89.20 Approved in Case No. 171 of 2011 Audited expense incurred 2.95 0.45 3.40 0.99 0.24 5.21 10.34 2.32 1.59 2.19 3.46 0.00 0.27 8.44 6.31 36.96 85.09 Difference = APR Petition Expense incurred (1.25) 0.05 (0.45) (0.20) 0.11 (1.20) 0.76 (0.27) 1.18 (1.35) 0.11 (0.01) (0.30) 0.43 (0.66) (0.68) (3.46)
Particulars
Rent Rates and Taxes Insurance Telephone and Postage, etc. Legal Charges and Audit Fee Professional, Consultancy, Technical Fee Electricity Charges Security Arrangements Printing and Stationery Advertisements License Fee and Other Related Fee Vehicle Running Expenses Training Bank Charges Property Insurance Fund Other Costs Share of General Administration Expenses Gross A&G Expenses
BEST submitted that vide Tariff Order dated 16 May, 2012 in Case No. 171 of 2011, the Commission had approved A&G expenses of Rs. 89.20 Crore against its submission of Rs. 88.55 Crore after taking into account escalation of 7.96% per annum on account of inflation factor corresponding to increase in WPI & CPI over the revised level of A&G expenses approved for FY 2010-11, i.e., Rs. 82.75 Crore. BEST submitted that against this, it has incurred actual A&G expense of Rs. 85.09 Crore for FY 2011-12 which is less than the approved A&G expense by Rs. Page 103 of 308
4.11 Crore, and requested the Commission to approve actual A&G expenses of Rs. 85.09 Crore along with sharing of gains in accordance with MERC Tariff Regulations 2005. After considering BESTs submission and prudence check, the Commission has approved the actual A&G expenses of Rs. 85.09 Crore for FY 2011-12. The summary of allowable A&G expenses approved by the Commission in Tariff Order, actual A&G expenses claimed by BEST, and A&G expenses approved after truing up for FY 2011-12 is shown in the following table: Table: A&G expense approved by the Commission for FY 2011-12 (Rs. Crore) Particulars A&G Expense Allowable A&G Expenses 89.20 Actual 85.09 Approved by the Commission 85.09
The difference between A&G expenses approved by the Commission in the Tariff Order (i.e., Rs. 89.20 Crore) and the actual employee expenses for FY 2011-12 as claimed by BEST (i.e., Rs. 85.09 Crore), is required to be treated as a controllable gain as discussed in subsequent paragraphs of this Section. 4.4.3 R&M Expenses The R&M expenses approved by the Commission in its Tariff Order dated 16 May, 2012 in Case No. 171 of 2011 and actual R&M expenses incurred by BEST as per the audited accounts submitted by BEST are shown below: Table: R&M Expenses submitted by BEST (Rs. Crore) FY 2011-12 Sl. No. As submitted in previous APR Petition 5.57 0.12 0.03 0.31 5.32 Approved in Case No. 171 of 2011 Audited expense incurred Difference = Expense incurred Submission in previous APR Petition (0.62) (0.06) 0.00 (0.15) 2.77
Particulars
1 2 3 4 5
Central Office and Service of Office Equipment etc. Material Stock Adjustment Dead Stock Repairs and Maintenance RSS & DSS
4.95 0.06 0.03 0.16 8.09
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FY 2011-12 Sl. No. As submitted in previous APR Petition 11.94 2.49 0.11 10.93 36.82 Approved in Case No. 171 of 2011 30.63 Audited expense incurred Difference = Expense incurred Submission in previous APR Petition 2.26 0.06 (0.02) (5.22) (0.98)
Particulars
6 7 8 9 10
Mains Aerial (Cable Network) Meter Installation Meter Testing Reinstatement Charges Total
14.20 2.55 0.09 5.71 35.84
BEST submitted that in the Tariff Order dated 16 May, 2012 in Case No. 171 of 2011, R&M expenses for FY 2011-12 were increased by 7.08% per annum on account of inflation factor corresponding to the increase in WPI over the revised level of R&M expenses as approved for FY 2010-11 (Rs. 28.61 Crore), which worked out to Rs. 30.63 Crore as against BESTs submission for FY 2011-12 of Rs. 36.82 Crore. BEST submitted that as per its computation, the escalation factor (average) should be 8.94% as compared to the escalation factor of 7.08% approved by the Commission. BEST submitted the impact of escalation factor computed by it on R&M expenses approved by the Commission in its Order dated 26 August, 2012 in Case No. 62 of 2012 as shown in the following table: Table: R&M expenses for FY 2011-12 using escalation factor as submitted by BEST (Rs. Crore) Actual Figures of FY 2010-11 using Escalation Factors 1 1 2 Repair & Maintenance Expenses Escalation factor 29.23 8.94% Approved under Tariff Order in Case No. 171 of 2011
Sl. No.
Particulars
Using Escalation Factor 3= 1*Escalation Factor 31.84
Actual Audited
2 30.63
4 35.84
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BEST submitted that the R&M expenses, considering an escalation factor of 8.94% over the escalated R&M expense figure of Rs. 29.23 Crore of FY 2010-11, works out to Rs. 31.84 Crore, which is close to the actual audited figure of Rs. 35.84 Crore. BEST submitted that the actual audited R&M expenses are Rs. 35.84 Crore, i.e., it is less by Rs. 0.98 Crore than its own submission and higher by Rs. 5.21 Crore than the expenses approved by the Commission.. BEST further submitted that out of this additional Rs. 5.21 Crore, major increase has been on account of the fire incidence at Backbay 110 kV Receiving Station on 16 October, 2011, because of which the expenses pertaining to Repairs & Maintenance RSS & DSS and Mains Aerial (Cable Network) have increased by Rs. 2.77 Crore and Rs. 2.26 Crore, respectively. BEST submitted that to assess the damage and corrective actions for Gas Insulated Switchgears (GIS) of the said receiving station, it had to take necessary actions apart from inspection and testing of the site, further it had to arrange for other consumable spare parts from Nissin Electrical Co. Ltd., Japan, who is the manufacturer and supplier of the said gas insulated switchgears. BEST submitted that the expenditure on account of this was Rs. 1.99 Crore out of total increase of Rs. 2.77 Crore. BEST submitted that similarly, in case of mains and aerial, i.e., cable network, an amount of Rs. 0.45 Crore was incurred due to the fire. BEST further submitted that the total expenses as the result of fire were to the extent of Rs. 2.44 Crore on account of material and Rs. 0.81 Crore on account of labour cost as claimed under the Employee expenses. BEST requested the Commission to approve R&M expenses as per the audited accounts, i.e., Rs. 35.84 Crore. After considering BESTs submission and after prudence check, the Commission observes that R&M expenses as claimed by BEST is about 2% of total GFA and the same is reasonable amount for any Utility to spend on R&M expenses. Based on the above, the Commission approves the actual R&M expenses of Rs.35.84 Crore for FY 2011-12. The summary of R&M expenses approved by the Commission in its Tariff Order, actual R&M expenses claimed by BEST, and R&M expenses approved after truing up for FY 2011-12 is shown in the following table: Table: R&M expense approved by the Commission for FY 2011-12 (Rs. Crore) Particulars R&M Expenses ARR Order 30.63 Actual 35.84 Approved by the Commission 35.84
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Since, the Commission has approved the actual R&M expenses, which are higher than the R&M expenses provisionally approved in Tariff Order dated 16 May, 2012 in Case No. 171 of 2011, hence, no sharing has been done for this expense head.
4.4.4 Total O&M Expenses for FY 2011-12 The total O&M expenditure for FY 2011-12 approved by the Commission is summarised in the Table below: Table: O&M Expenses approved by the Commission for FY 2011-12 (Rs. Crore) Particulars Employee Expenses A&G Expenses R&M Expenses Total Tariff Order (Case No. 171 of 2011) 182.00 89.20 30.63 301.83 Actual 220.75 85.09 35.84 341.68 Approved by the Commission 220.75 85.09 35.84 341.68
4.5 4.5.1
CAPITAL EXPENDITURE AND CAPITALISATION Capitalisation
The actual Capital Expenditure and capitalisation in FY 2011-12, as submitted by BEST is given in the Table below: Table: Actual Capital Expenditure and Capitalisation as submitted by BEST for FY 2011-12 (Rs. Crore) Sl. No. Capital expenditure BESTs Submission Actual in Case No. audited 171 of 2011 27.28 15.76 17.11 20.90 Capitalization BESTs Submission Actual in Case No. audited 171 of 2011 27.26 14.21 4.07 13.38
Project schemes
1 2
New receiving station of 3322/11 kV Augmentation and replacement at existing RSS
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Sl. No.
Project schemes
Capital expenditure BESTs Submission Actual in Case No. audited 171 of 2011 42.78 22.78
Capitalization BESTs Submission Actual in Case No. audited 171 of 2011 42.78 22.77
5 6 7 8
New distribution substation and augmentation and alteration to existing DSS Extension of distribution network (Laying of HV and LV cables) SCADA, digitisation and communication, business process automation * Energy meters Generation plant Street lighting (lamps and cables) Furniture, office equipment (Rs. 5.40 Crore) , tools (Rs. 1.24 Crore), motor Vehicle (Rs. 1.02 Crore), share of GA expenses (Rs. 0.67 Crore) Grand Total
35.55
40.99
35.55
40.99
24.76 27.35 0.00 3.31
9.60 12.70 0.00 2.50
24.76 10.00 0.00 3.31
1.53 12.70 0.00 2.44
15.21
8.33
15.21
8.33
10
192.00
134.91
173.08
106.22
*Note: The Capex for SCADA and digitisation and communication includes Rs. 1.31 crore for business process automation and Rs. 8.29 crore for SCADA, digitisation and communication and distribution substation automation, out of which Rs. 1.31 crore for business automation is capitalized and the remaining Rs. 0.22 crore is capitalized against SCADA, digitization and communication, and distribution substation automation.
BEST submitted that vide Tariff Order dated 16 May, 2012 in Case No.171 of 2011, the Commission had approved Capitalisation of Rs.161.62 Crore and IDC of Rs. 12.44 Crore for FY 2011-12. BEST submitted that against this BEST has incurred capital expenditure of Rs. 134.91 Crore, out of which Rs. 106.22 Crore has been capitalised in FY 2011-12. BEST submitted that IDC for FY 2009-10, FY 2010-11 and FY 2011-12 are Rs. 8.24 Crore, 12.31 Crore and Rs. 6.37 Crore, respectively. BEST submitted that capitalization and IDC expenses for FY 2011-12 are Rs. 106.22 Crore and Rs. 6.37 Crore respectively as summarized in the following table:
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Table: Capitalization and IDC submitted by BEST for FY 2011-12 (Rs. Crore)
CWIP FY 1112 3 6.27 Additional CAPEX during FY 1112 incl. IDC of FY 2009-10 & FY 10-11 4 10.84 Total Capex (3+4) 5 17.11 70% of work completed 8 2.85 IDC (11% for 1 Year) 9 0.31
Name of the Scheme
Capitalisation in FY 11-12
Balance c/f
2 New Receiving Station of 3322/11 kV Augmentation & Replacement at existing RSS New DSS Augmentation & Alteration Laying of HV & LV Cable SCADA Business Process Automation Energy Meter Street Lighting Furniture, Office Equip , Tools, MV & Share of GA TOTAL
6 4.07
7 13.04
6.09
14.81
20.90
13.38
7.52
9.37
1.03
0.00 0.00 0.00 0.00 0.00 0.00 0.00 12.36
22.78 40.99 9.60 0.00 12.70 2.50 8.33 122.50
22.78 40.99 9.60 0.00 12.70 2.50 8.33 134.91
22.78 40.99 1.53 0.00 12.70 2.44 8.33 106.22
0.00 0.00 8.07 0.00 0.00 0.06 0.00 28.69
15.95 29.69 1.07 0.00 8.89 1.71 5.83 74.35
1.75 3.16 0.12 0.00 0.00 0.00 0.00 6.37
BEST submitted that it has included IDC of Rs. 6.37 Crore for funding of capitalisation. As regards capitalisation during FY 2011-12, the Commission has examined the actual capitalisation claimed by BEST in detail as against various Capex schemes approved by Commission. The Commission observes that out of total works capitalisation of Rs. 106.21 Crore claimed by BEST during FY 2011-12, the DPR schemes relate to new receiving station (Rs. 4.07 Crore), augmentation and replacement at existing RSS (Rs. 6.35 Crore), new distribution substation and augmentation and alteration to existing DSS (Rs. 22.7 Crore), extension of distribution network (Rs. 40.99 Crore), SCADA, Energy meters (Rs. 14.23 Crore), and capitalisation of non-DPR related schemes have been proposed as Rs. 17.80 Crore. As regards approval of capitalisation of DPR schemes, the capitalisation towards schemes approved in-principle by the Commission has been considered. It is also observed that the
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capitalisation against non-DPR schemes during FY 2011-12 is within the limit (of 20% of DPR schemes) as directed in the previous APR Orders and the same has been considered for approval. While analysing the IDC claimed by BEST for FY 2011-12, the Commission observes that some of the capital asset schemes viz., New DSS Augmentation & alteration and Laying of HV & LV cables were started and completed during the same year itself, hence, there would be no IDC component for such schemes. Further, BEST has calculated IDC for the whole year, though the capital expenditure would have been undertaken during the course of the year. Therefore the Commission has disallowed IDC of Rs. 4.91 crore pertaining to these schemes, which were started and completed in the same year, while for the remaining schemes, the Commission has computed IDC only for half the year based on average funds blocked in the project. Accordingly, for the purpose of Truing-Up for FY 2011-12, the Commission has approved capitalisation of Rs. 106.09 Crore and IDC of Rs. 0.73 Crore, based on the details of established benefits vis-a-vis projected benefits of various capex schemes as submitted by BEST and on the basis of necessary prudence check carried out by the Commission. The Capitalisation approved by the Commission for FY 2011-12 is shown in the following Table: Table: Actual Capitalisation for FY 2011-12 as approved by the Commission (Rs. Crore) Particulars Capitalisation IDC Total Tariff Order in Case No. 171 of 2011 161.62 12.44 174.06 Actual 106.22 6.37 112.59 Approved after Truing-up 106.09 0.73 106.82
4.5.2 Funding of Capitalisation BEST submitted that in FY 2011-12 it has incurred a capital expenditure of Rs. 134.91 Crore, out of which Rs. 106.22 Crore has been capitalized excluding IDC of Rs. 6.37 Crore. BEST submitted that since, interest on loan capital has to be provided corresponding to the asset put to use, the funding of capitalization has been considered including IDC of Rs. 6.37 Crore, as shown in the Table below:
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Table: Funding Plan for Capitalization during FY 2011-12 submitted by BEST (Rs. Crore) Sl. No. 1 2 3 4 5 Particulars Capital Connection Fee Government Grant Loan Internal Sources Total Submission in previous APR Petition for FY 2009-10* 12.00 0.00 122.09 52.32 186.41 Actual for FY 2011-12 7.78 0.00 73.77 31.44 112.59
*BEST has erroneously submitted APR Petition for FY 2009-10, however, it is ARR Petition of FY 201112
BEST submitted that as per APR Order dated 12 September, 2010 in Case No. 95 of 2009, the return is approved by the Commission only to the extent of capitalization approved for each year. BEST further submitted that achieving 100% capitalization for all capital expenditure executed by a Utility in any given year would be difficult, hence, it has to arrange the funding plan for execution of capital expenditure schemes as envisaged for each year. Accordingly, the sources of capitalisation considered by the Commission while truing up of FY 2011-12 are Consumer Contribution (Rs. 7.78 Crore) grant from Government (Nil), Normative Equity (Rs. 29.71 Crore), and loan of Rs. 69.33 Crore. 4.6 DEPRECIATION
BEST submitted that in FY 2011-12, it has incurred depreciation expenses of Rs. 60.46 Crore. BEST further submitted that the Commission in its APR Order for FY 2009-10 had approved depreciation expenses of Rs. 48.92 Crore for FY 2010-11. BEST submitted that in Case No. 171 of 2011, BEST had reconciled Opening GFA reported under audited accounts and submitted to the Commission as a part of the queries raised by the Commission. BEST submitted that accordingly, it has revised the opening GFA for FY 2011-12 as Rs. 1738.51 Crore. BEST further submitted that the average depreciation rate works out to 3.47% on Opening GFA of Rs. 1,738.51 Crore for FY 2011-12. BEST also submitted the asset-wise depreciation details along with the Petition. BEST requested the Commission to approve actual depreciation expenses as submitted by it in the Petition.
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Table: Depreciation for FY 2011-12 submitted by BEST (Rs. Crore) Sl. No. 1 2 3 Particulars Depreciation Opening GFA Average Rate of Depreciation FY 2011-12 Approved in Case No. 171 of 2011 60.85 1752.91 3.47%
Actual 60.46 1737.97 3.47%
The Commission has considered closing GFA for FY 2010-11 as approved in previous Section of this Order as the opening GFA for FY 2011-12. Accordingly, for the purpose of Truing-up for FY 2011-12, the Commission has considered the Opening GFA of BESTs distribution business for FY 2011-12 at Rs. 1749.50 Crore, which is higher than BESTs submission of Rs. 1737.97 Crore. The depreciation expenditure approved by the Commission for FY 2011-12 is summarised in the following Table: Table: Depreciation approved by the Commission for FY 2011-12 (Rs Crore) Particulars Depreciation Opening GFA 4.7 INTEREST EXPENSES Tariff Order (Case 171 of 2011) 60.85 1752.91 Actual 60.46 1737.97 Approved after Truing-up 60.95 1749.50
The detail of the interest expenses incurred in each half of FY 2011-12 as submitted by BEST is as shown in the table below: Table: Interest Expenses in H1 submitted by BEST for FY 2011-12 (Rs. Crore) Sl. No. 1 2 3 4 5 6 FY 2011-12 (H1) Particulars Public Loan MMRDA (Mega City Project) DPDC APDRP Loan Short-Term Financial Assistance Total Opening Balance 0.50 0.00 1.76 37.98 142.06 182.30 Addition Repayment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 89.11 89.11 Closing Balance 0.50 0.00 1.76 37.98 52.95 93.19 Interest as per Form No. 5 0.00 0.00 0.00 0.00 1.35 (Canara Bank) + 3.66 (Vijaya Bank) 5.01 Page 112 of 308
BEST submitted that out of the total outstanding Short Term Financial Assistance of Rs. 182.30 Crore, Rs. 89.11 Crore was due for repayment in first half of FY 2011-12 and it has made the repayment accordingly. The details of interest calculation in H2 of FY 2011-12 as submitted by BEST are shown below: Table: Interest Expenses in H2 submitted by BEST for FY 2011-12 (Rs. Crore) Sl. No. 1 2 3 4 5 6 7 8 FY 2011-12 (H2) Particulars Public Loan MMRDA (Mega City Project) DPDC APDRP Loan Short-Term Financial Assistance Short-Term Finance Vijaya Bank 09-1-2012 Total Grand Total (H1 + H2) Opening Balance 0.50 0.00 1.76 37.98 52.95 Addition Repayment 0.00 0.00 0.00 0.00 0.00 75.00 93.19 75.00 0.50 0.00 0.16 0.00 52.95 12.00 65.61 Closing Balance 0.00 0.00 1.60 37.98 0.00 63.00 102.58 Interest as per Form No. 5 0.06 0.00 0.25 3.11 0.22 (Canara Bank) + 0.67 (Vijaya Bank) 1.69 6.00 11.01
BEST submitted that in the second half, the repayment of earlier short term financial assistance amounting to Rs. 52.95 Crore was due for payment and therefore it was necessary to raise Rs. 73.37 Crore short term financial assistance to maintain the liquidity for capital expenditure, out of which Rs. 12.00 Crore has been repaid as per the terms and conditions. BEST further submitted that during FY 2011-12, BEST has received Rs. 7.78 Crore through Capital Connection fee, Rs. 73.37 Crore as a loan [i.e. 70% debt after deducting the Capital Connection fee from the capitalised amount of Rs. 106.22 Crore + IDC of Rs. 6.37 Crore and balance Rs. 31.44 Crore through Internal sources, i.e., 30% normative equity. BEST submitted that in the Tariff Order dated 16 May, 2012 in Case No. 171 of 2011, it had claimed the Interest expense for FY 2011-12 at Rs. 15.65 Crore against which, the Commission had provisionally approved interest expense of Rs. 13.77 Crore. BEST requested the
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Commission to approve the actual Interest expenses incurred during FY 2011-12 at Rs. 11.01 Crore. As regards the funding of capitalisation during FY 2011-12, the Commission has considered the sources of capitalisation as contributions from consumer (Rs. 7.78 Crore), Grant from Government (Nil), Normative Equity (Rs. 29.71 Crore), and loan of Rs. 69.33 Crore. The Commission has considered the loans equal to allowable capital cost after deducting consumer contribution and grants. As discussed in detail in Section 3 of this Order, the Commission is of the view that the loans can be allowed only against assets put to use and not against capital expenditure or other purposes such as repayment of loan and therefore, the Commission has not approved additional loans for repayment of short-term finance claimed by BEST. The interest expenditure on actual loan amount admitted has been considered at the rate of 9.50% p.a. for the loans from Canara Bank and Vijaya Bank as proposed by BEST in its Petition. For the new loan from Vijaya Bank, the Commission has considered a rate of 9%, based on documentary evidence submitted by BEST in reply to data gaps. The Commission has considered the interest expenditure on the existing loans from public loans, MMRDA loans for Mega City project, DPDC loans, APDRP loan at Rs. 3.38 Crore while, for the balance loans, the Commission has re-calculated the interest expenses. Accordingly, interest expenses approved for FY 2011-12 is summarised in the following Table: Table: Interest Expenses approved by the Commission for FY 2011-12 (Rs Crore) Particulars Opening Balance of Loan Loan Addition Loan Repayment Closing Balance of Loan Interest Rate (Weighted Average) Interest Expenses Actuals submitted by BEST 182.30 75.00 154.72 102.58 7.73% 11.01 Approved by the Commission 134.94 69.33 106.45 97.82 9.02% 10.50
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4.8
RETURN ON INTERNAL FUNDS
BEST submitted that as a Local Authority, it is eligible to claim return as interest on internal funds at the rate of 6%. BEST further submitted that the Commission in its APR Order for FY 2009-10, has approved the interest on internal funds at 6% and the same has been proposed by it to claim return on internal funds for FY 2011-12. BEST submitted that in this respect it has incurred interest of Rs 5.28 Crore for FY 2011-12. The detailed computations of interest on internal funds as submitted by BEST are given in the table below:
Table: Interest on Internal Funds for FY 2011-12 as submitted by BEST (Rs. Crore) Sl. No. 1 2 3 4 Particulars Capitalisation including IDC during the year IDC Less: Consumer contribution received during the year Ref. FY 2010-11 (Audited accounts) 179.27 13.80 9.59 0.00 183.49 87.99 6% 5.28 0.00 5.28 Actual (FY 2011-12) 112.59 0.00 7.78 0.00 104.81 87.99 5.28 0.00 5.28
Less: Government grant received during the year 5 Allowable capital cost Cumulative Grants at the end of the 6 year 7 Interest on internal funds (at 6%) a) Normative debt component On Government assistance at the start b) of the year
BEST requested the Commission to approve the actual Interest on internal funds at Rs. 5.28 Crore for FY 2011-12. The Commission has accepted BESTs claim in this regard. The Interest on Internal funds, at the rate of 6% for FY 2010-11 as projected by BEST and approved by the Commission is given below:
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Table: Interest on Internal Funds for FY 2011-12 as approved by the Commission (Rs. Crore) Sl. No. 1 3 4 Particulars Capitalisation including IDC during the year Less: Consumer contribution received during the year Ref. Actual (FY 2011-12) 112.59 7.78 0.00 104.81 87.99 5.28 0.00 5.28 Approved After Truing-up 112.46 7.78 0.00 104.68 87.99 5.28 0.00 5.28
Less: Government Grant received during the year 5 Allowable capital cost 6 Cumulative grants at the end of the year 7 Interest on internal funds (at 6%) a) Normative debt component On Government assistance at the start of the b) year
6%
4.9
RETURN ON EQUITY
BEST submitted that in its ARR and Tariff Petition for FY 2011-12, it had submitted the Return on Equity for FY 2011-12 as Rs. 129.35 Crore against which the Commission had approved Rs. 103.05 Crore. BEST submitted it has computed RoE for FY 2011-12 on the opening balance of equity as well as 50% of equity component of the assets capitalised during FY 2011-12, which is in accordance with the MERC Tariff Regulations, as applicable for the Distribution business. The Return on equity calculated by BEST for FY 2011-12 is summarised in the following table: Table: Return on Equity for FY 2011-12 as submitted by BEST (Rs. Crore) (FY 2011-12) Sl. No. Particulars FY 2010-11 (Actual) Submission in the Petition in Case No. 171 of 2011 784.30 173.03 12.00 161.08 48.34 832.63 Actual 749.23 112.79 7.78 106.22 31.44 780.67
1 2
3 4
Regulatory equity at the beginning of the year Allowable capitalization amount (Less) Capital connection fee Net allowable capitalisation amount Equity portion of capitalization Regulatory equity at the end of the year
694.63 193.08 9.59 183.49 55.05 749.68
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(FY 2011-12) Sl. No. Particulars FY 2010-11 (Actual) Submission in the Petition in Case No. 171 of 2011 125.49 3.87 129.35 Actual
5 6 7
Return computation Return on regulatory equity at the beginning of the year (16%*(1)) Return on equity portion of capital expenditure (16%*(3)/2) Total return on regulatory equity (5) + (6)
111.14 4.40 115.54
119.88 2.95 122.39
BEST requested the Commission to approve the actual Return on Equity of Rs. 122.39 Crore for FY 2011-12. For the purpose of Truing up of FY 2011-12, the Commission has considered normative equity equivalent to 30% of the approved net capitalisation, after reducing Consumer Contribution and Government Grants, amounting to normative equity of Rs. 29.71 Crore for FY 2011-12. The Return on Equity approved by the Commission for FY 2011-12 is given in the Table below: Table: Return on Equity for FY 2011-12 as approved by Commission Tariff Order (Case 171 of 2011) 619.76 174.06 12.00 162.06 48.62 668.38 99.16 (Rs Crore) Approved after Truing-up
Sl. No.
Particulars Regulatory Equity at the beginning of the year Allowable Capitalization amount (less) Capital connection fee Net Allowable Capitalisation amount Equity portion of capitalization Regulatory Equity at the end of the year Return on Regulatory Equity at the beginning of the year (16%*(1))
Actual
1 2 3 4 5 6 7
749.23 112.79 7.78 104.81 31.44 780.67 119.88
746.05 106.82 7.78 99.04 29.71 775.77 119.37
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Sl. No.
Particulars Return on Equity portion of capital expenditure (16%(5)/2) Total Return on Regulatory Equity ((7)+(8))
Tariff Order (Case 171 of 2011) 3.89 103.05
Actual
8 9
2.95 122.39
2.38 121.75
4.10 INTEREST ON WORKING CAPITAL AND CONSUMERS SECURITY DEPOSIT FOR FY 2011-12 BEST submitted that it has computed the Interest on Working capital (IOWC) on normative basis as per MERC (Terms and Conditions of Tariff) Regulations, 2005. BEST submitted that the Commission in its Order dated 16 May 2012 in Case No. 171 of 2011 has accepted its proposal and accordingly worked out the interest on working capital (normative) after taking in account nine days credit period. The normative interest on working capital as submitted by BEST is shown in the Table below: Table: Normative Interest on Working Capital submitted by BEST Sl. No. 1 2 3 Less: 4 5 6 7 8 9 10 Particulars One-twelfth of the Amount of Operations and Maintenance Expenses One-twelfth of the Sum of the Book Value of Stores, Materials, and Supplies Two Months of the Revenue from Sale of Electricity at the Prevailing Tariffs Amount of Security Deposit Security Deposit from Consumers Security Deposit from Distribution System Users Cost of Power Purchased (9-day Basis) Total Working Capital = (1 + 2 + 3) - (5 + 6 + 7) Rate of Interest (14.75% p.a.) IOWC (Rs. Crore) Audited (FY 2011-12) 28.57 1.15 424.60
232.70 0.00 59.81 161.71 14.75% 23.85
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Hence, BEST requested the Commission to approve the normative interest on working capital, i.e., Rs. 23.85 Crore. Interest on Consumer Security Deposit The Interest on consumer deposit during FY 2011-12 as submitted by BEST is shown in the Table below: Table: Interest on consumer security deposit for FY 2011-12 as submitted by BEST (Rs. Crore) Sl. No. 1 2 3 4 5 Particulars Consumer security deposit (in Rs. Crore) Rate of interest claimed Interest on consumer security deposit (Rs. Crore) Additional interest on consumer deposit amount paid in FY 2011-12 of earlier year Net interest on consumer security deposit Approved in Case No. 171 of 2011 242.56 6.00% 14.55 Actual 232.70 6.00% 13.96 0.33 14.29
BEST submitted that the interest on consumers security deposits has been calculated as per the stipulated interest rate of 6% on the net security deposit with it for FY 2011-12, which works out to Rs. 14.29 Crore. BEST requested the Commission to approve the same The Commission has estimated the normative working capital interest for FY 2011-12 in accordance with the MERC Tariff Regulations and based on expenses approved in this Order after Truing-Up. The MERC Tariff Regulations specify that the rate of interest on working capital shall be considered on normative basis and shall be equal to the short-term Prime Lending Rate of State Bank of India as on the date on which the application for determination of tariff is made. As the short-term Prime Lending Rate of State Bank of India at the time when BEST filed the Petition for tariff determination for FY 2011-12 was 14.75%, the Commission has considered the interest rate of 14.75% for estimating the normative interest on working capital, which works out to Rs 23.85 Crore. The Interest on working capital approved by the Commission is tabulated below:
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Table: Interest on Working Capital approved by the Commission Particulars Interest on working capital Interest on Consumers Security Deposits 4.11 OTHER EXPENSES FOR FY 2011-12 Actuals/Normative 23.85 14.29
(Rs. Crore) Allowed after truing up 23.85 14.29
BEST submitted that for FY 2011-12, it has incurred other expenses of Rs. 54.50 Crore as against the approved amount of Rs. 57.71 Crore. The break-up of other expenses as submitted by BEST is given in the table below: Table: Break-up of other expenses (Rs. Crore) Sl. No. 1 2 3 4 5 6 7 Particulars Power Factor Incentive Prompt Payment Discount ECS Discount DSM* Power Factor Discount Load Factor Incentive Total Approved in Case No. 171 2012 57.71 Actual expense incurred 47.35 6.48 0.29 0.00 0.00 0.38 54.50
Note: * In FY 2011-12, activities such as load research, energy auditing, capacity building, and consumer awareness/education were carried out under DSM. The actual expense incurred in FY 2011-12 is Rs. 43 Lakh. This expense would be adjusted under the LMC fund available with BEST. The opening balance of this fund was Rs. 6.53 Crore at the end of FY 2010-11, and the balance of LMC fund was Rs. 6.10 Crore. Since DSM expenses are met through LMC funds, BEST has not included them in the other expenses.
BEST requested the Commission to approve other expenses of Rs. 54.50 Crore for FY 2011-12. The Commission has accepted BESTs submission for other expenses as Rs. 54.50 Crore for FY 2011-12 and approved the same under the Truing-up exercise for FY 2011-12. 4.12 CONTRIBUTION TO CONTINGENCY RESERVES BEST submitted that vide Order dated 12 September, 2010, in Case No. 95 of 2009 the Commission had approved contribution to Contingency Reserve at the rate of 0.25% of Opening Gross Fixed Assets instead of 0.5% on Opening GFA as submitted by BEST in its APR Petition.
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BEST submitted that in accordance to the same it has computed contribution to contingency reserve at 0.25% on Opening GFA, i.e., Rs. 4.34 Crore for FY 2011-12. BEST further submitted that since it is providing contingency reserve at rate of 0.5% on Opening GFA from FY 2008-09 and invested in Securities approved under the Indian Trusts Act, the same were transferred from contingency reserve to the General Investment Account of BEST. BEST requested the Commission to approve Contingency reserve amount of Rs. 4.34 Crore. Table: Contingency Reserve Invested by BEST (Rs Crore)
Balance available under investment in contingency reserve Interest earned transferred to non-tariff income
Sl. No.
Particulars
Provision
Investment
Details of investment
Transfer to general investment
1 2
2008-09 2009-10
6.45 7.04 7.70 + Int. 1.00
6.48 7.00
8.20% GOI Oil bond dated 3 Dec., 09 9.97 % APPF dated 23 Feb., 2012 and 5.985% APPPF dated 15 March, 2012
3.24 3.50
3.24 3.50
0.17 0.83
2010-11
6.80 + 1.90
3.40 & 0.95
3.40 & 0.95
1.23
Total
11.09
11.09
2.24
BEST submitted that due to the fire incidence at Backbay 110 kV Receiving Station on 16 October, 2011, it incurred an expenditure of Rs. 3.25 Crore (i.e., Rs. 2.44 Crore towards material and Rs. 0.81 Crore towards labour) that was unforeseen and beyond the control of the management. BEST submitted that as per Regulation 76.9.2 of the MERC Tariff Regulations, 2005, the amount invested in contingency reserve can be drawn with the prior permission of the Commission. BEST further submitted that it has started investing amount under contingency reserve from FY 2008-09 and all these amounts are invested in long-term instruments. As such, BEST requested the Commission instead of pre-maturing the said investments under contingency reserve for incurring the unforeseen expenses, the Commission may make a lower provision for contingency reserve in FY 2012-13 to the extent of expenditure incurred (i.e., Rs. 3.25 Crore) against the fire incidence at Backbay 110 kV Receiving Station. BEST further submitted that the
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expected contingency reserve provision at 0.25% on Opening GFA of FY 2012-13 will be Rs. 4.62 Crore. BEST requested the Commission to permit such adjustment in FY 2012-13. On a specific query by the Commission, BEST submitted documentary evidence showing that the Contingency Reserves created in FY 2011-12 have been invested in approved securities in accordance with MERC Tariff Regulations, 2005. Accordingly, the Commission has allowed provisioning towards contingency reserve for FY 2011-12 at Rs. 4.37 Crore (i.e., 0.25% of Opening GFA) under the truing up exercise, in accordance with MERC Tariff Regulations and the Commissions philosophy outlined under earlier Orders. As regards the contingency reserves, the provisions of MERC Tariff Regulations stipulates as follows: 76.9.2 The Contingency Reserve shall not be drawn upon during the term of the licence except to meet such charges as may be approved by the Commission as being: (a) Expenses or loss of profits arising out of accidents, strikes or circumstances which the management could not have prevented; (b) Expenses on replacement or removal of plant or works other than expenses requisite for normal maintenance or renewal; (c) Compensation payable under any law for the time being in force and for which no other provision is made: Provided that such drawal from Contingency Reserve shall be computed after making due adjustments for any other compensation that may have been received by the Licensee as part of an insurance cover. The Commission observes that as per the MERC Tariff Regulations, such drawal from Contingency reserves can be claimed after due adjustments from any other compensation received by the utility as part of an insurance cover. Further, BEST is directed to submit the actual details of any kind of compensation received as part of insurance cover for the Backbay fire incidence while submitting its Petition for Final Truing up of FY 2012-13. In light of the above the Commission approves adjustment of Rs. 3.25 Crore in the Contingency Reserves of FY 2012-13, subject to final Truing up for FY 2012-13.
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4.13 NON-TARIFF INCOME FOR FY 2011-12 BEST submitted that the actual Non-Tariff income (NTI) for FY 2011-12 was Rs. 48.09 Crore against the approved figure (under Tariff Order dated 16 May, 2012 in Case No. 171 of 2011) of Rs. 53.51 Crore. BEST submitted that due to reduction in miscellaneous charges the audited Non- Tariff Income is lower than the approved Non- Tariff Income. The details of the Non-tariff income as submitted by BEST are as shown in the table below: Table: Non Tariff Income for FY 2011-12 as submitted by BEST (Rs. Crore) Sl. No. 1 2 a b c 3 Particulars Customer Charges/Contract Charges Other Receipts Delayed Payment Charges (Rs. 11.50 Crore), Interest on Arrears (Rs. 13.57 Crore) Electricity Duty Collection Charges Other Receipts (Reconnection, Requisition, Damaged Meter Charges, etc.) Approved in Case No. 171 of 2011 Audited Income Received in the Year 0.00 25.07 0.04 0.37
MISC (Rent of Buildings Rs. 0.52 Crore, Advertisement 13.59 Receipts Rs. 12.16 Crore, and Others Rs. 0.91 Crore) 4 Share of Receipt of General Administration 6.78 5 Interest on Contingency Reserve 2.24 Total 53.51 48.09 *This includes rebate received from TPC (G) and RPS at the time of submission. Subsequently rebate amount adjusted in power purchase cost. BEST requested the Commission to approve the actual Non-Tariff income of Rs. 48.09 Crore for FY 2011-12. Details of the Non-tariff income as submitted by BEST are as under: Table: Various heads of NTI for FY 2011-12 submitted by BEST Sl. No. Particulars Explanation The total revenue under the contract charges is Rs. 19.37 Crore As against this, the total expenditure is Rs. 19.94 1 Contract charges crore; thus, contract charges are now shown as Nil. The main reason for increase in the expenditure is the increase in employee expenses, which increased from Rs. 14.49
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Sl. No.
Particulars
Explanation crore in FY 2010-11 to Rs. 16.17 Crore in FY 2011-12, and A&G expenses Rs. 0.79 Crore. However, in case of material cost, the same decreased from Rs. 3.11 Crore in FY 2010-11 to Rs. 2.88 Crore in FY 2011-12.
2 a
Other receipts Delayed payment charges and Interest on arrears This includes the delayed payment charges recovered from the consumers amounting to Rs. 11.50 Crore and Rs. 13.57 Crore towards interest on arrears from the consumers.
Other receipt Other charges related to reconnection charges, requisition (Reconnection, Requisition, charges, damaged meter charges, etc., amounting to Rs. Damaged meter charges, 0.37 Crore. etc.) These are charges towards electricity duty collected on Electricity Duty Collection behalf of the Government of Maharashtra at a rate of Rs. 45 Charges per 100 consumers. This includes three heads: rent of building and land, advertisement receipts, and other receipts. i. Rent of building and land This consists of the rent recovered from the staff/officers who are occupying the quarters of the undertaking. In addition, there are certain premises wherein shops allotted to the outside parties. The rent of said shops shall vary as per the location of the premises and offer given by the bidder. ii. Advertisement receipts These consist of advertisement receipts received from the highest bidder on monthly guaranteed revenue on kiosks, i.e., advertisement on street light poles. iii. Other receipts These consist of prompt payment discount on bulk power purchase of electricity received from TATA, cash discount received from various suppliers, penalty recovered from the suppliers/employees, etc. Share of General Administration receipt Interest on Contingency This consists of share of general administration receipts wherein interest on deposit and general investment, sale of scrap material (net) rent of building and land, apprentice premium received from the government etc. Interest on contingency reserve from FY 2008-09 was
Miscellaneous (Rent of Buildings, Advertisement Receipts)
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Sl. No. Reserve
Particulars
Explanation transferred from the investment of contingency reserve A/c. to Non-Tariff Income in FY 2011-12.
As per the standard practice followed by the Commission, interest on contingency reserve has been considered under the Non-Tariff Income. Thus, the Commission has computed interest on entire balance of contingency reserve, which has been included under the head of Non- tariff income. After the analysis of the components of Non-Tariff income considered by BEST, the summary of Non-tariff income submitted by BEST and approved by the Commission after Truing-Up for FY 2011-12, has been shown in the following Table:
Table: Non-Tariff income for FY 2011-12 as approved by the Commission (Rs Crore) Actuals submitted by Particulars Non-Tariff Income BEST 48.09 Allowed after truing up 52.83
4.14 SHARING OF GAINS AND LOSSES IN FY 2011-12 The relevant provisions under the MERC Tariff Regulations stipulating sharing of gains/losses due to controllable factors are reproduced below: 17.6.2 Some illustrative variations or expected variations in the performance of the applicant which may be attributed by the Commission to controllable factors include, but are not limited to, the following: (a) Variations in capital expenditure on account of time and/ or cost overruns/efficiencies in the implementation of a capital expenditure project not attributable to an approved change in scope of such project, change in statutory levies or force majeure events; (b) Variations in technical and commercial losses, including bad debts; (c) Variations in the number or mix of consumers or quantities of electricity supplied to consumers as specified in the first and second proviso to clause (b) of Regulation 17.6.1; (d) Variations in working capital requirements; (e) Failure to meet the standards specified in the Standards of Performance Regulations, except where exempted in accordance with those Regulations; (f) Variations in labour productivity;
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(g) Variations in any variable other than those stipulated by the Commission under Regulation 15.6 above, except where reviewed by the Commission under the second proviso to this Regulation 17.6. 19.1 The approved aggregate gain to the Generating Company or Licensee on account of controllable factors shall be dealt with in the following manner: (a) One-third of the amount of such gain shall be passed on as a rebate in tariffs over such period as may be specified in the Order of the Commission under Regulation 17.10; (b) In case of a Licensee, one-third of the amount of such gain shall be retained in a special reserve for the purpose of absorbing the impact of any future losses on account of controllable factors under clause (b) of Regulation 19.2; and (c) The balance amount of gain may be utilized at the discretion of the Generating Company or Licensee. 19.2 The approved aggregate loss to the Generating Company or Licensee on account of controllable factors shall be dealt with in the following manner: (a) One-third of the amount of such loss may be passed on as an additional charge in tariffs over such period as may be specified in the Order of the Commission under Regulation 17.10; and Case No.125 of 2011 MERC Order for BEST for True-Up of FY 2009-10and Provisional True-Up for FY 2010-11 (b) The balance amount of loss shall be absorbed by the Generating Company or Licensee. The Commission has considered the various expenses for computing the sharing of gains/losses in accordance with the MERC Tariff Regulations, as elaborated below:
4.14.1 Operation and Maintenance Expenses The actual A&G expenditure in FY 2011-12 is lower as compared to A&G expenditure provisionally approved by the Commission in its Order dated 16 August, 2012 in Case No. 62 of 2012. The actual A&G expenses for FY 2011-12 was Rs. 85.09 Crore as against Rs. 89.20 Crore as provisionally approved by the Commission. The efficiency gain/loss has been computed for O&M expenses, and shared according to the MERC Tariff Regulations. The efficiency gain approved by the Commission to be passed on to the consumers works out to Rs. 2.74 Crore as shown in Table below:
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Table: Gains and losses approved by the Commission due to variation in O&M Expenses (Rs. Crore)
Tariff Order (Case No. 171 of 2011) 301.84 Efficiency Gain/ (Loss) shared with consumers 1.37 Net Entitlement
SL. No.
Particulars
Actual
Efficiency Gain/ (Loss)
including amount transferred to special reserves

344.42
Operation & Maintenance Expenses
341.68
341.68
4.11
4.14.2 Incentive for Reduction in Distribution Losses BEST submitted that it has achieved actual distribution loss of 7.94% against the target of 9.00% approved by the Commission in Tariff Order dated 16 May, 2012 in Case No. 171 of 2011 for FY 2011-12, hence, it is eligible for claiming incentive for reduction of Distribution loss. The incentive for FY 2011-12 on account of reduction in distribution loss as submitted by BEST is given below: Table: Incentive for reduction in Distribution Loss for FY 2011-12 as submitted by BEST Sl. No. 1 2 3 4 5 6 7 8 9 Particulars Normative Distribution loss Normative sales considering same Energy input Actual sales in FY 2011-12 Additional sales due to actual distribution loss less than the normative target at 9.00% Actual revenue for the year Average billing rate Additional revenue due to actual distribution loss Amount retained by BEST (2/3rd of above incentive) Amount passed to consumers by BEST Units % MU MU MU Rs. Crore Rs. / unit Rs. Crore Rs. Crore Rs. Crore Amount 9.00% 4219.41 4286.05 66.64 2547.57 5.94 39.61 26.41 13.20
BEST requested the Commission to allow the above incentive of Rs. 26.41 Crore for FY 201112 as the same is in accordance to MERC (Terms and conditions of Tariff) Regulations, 2005. The efficiency gain/loss computed by the Commission to be shared with the consumers works out to Rs. 12.09 Crore, as tabulated below: Page 127 of 308
Table: Incentive for reduction in Distribution Loss for FY 2011-12 as approved by the Commission Sl. No. 1 2 3 4 5 6 7 8 9 10 Particulars Normative Distribution loss Normative sales considering same Energy input Actual sales in FY 2011-12 Additional sales due to actual distribution loss less than the normative target at 9.00% Actual revenue for the year Average billing rate Additional revenue due to actual distribution loss Amount passed on to the special reserve (1/3rd of above incentive) Amount retained by BEST (1/3rd of above incentive) Amount passed on to consumers by BEST (1/3rd of above incentive) Units % MU MU MU Rs. Crore Rs. / unit Rs. Crore Allowed after Truing-up 7.94% 4225.03 4286.05 61.02 2547.57 5.94 36.27 12.09 Rs. Crore Rs. Crore 12.09 12.09
4.15 INCLUSION OF DEFICIT OF TRANSPORT DIVISION BEST submitted that in FY 2011-12, the deficit of Transport Division operations was Rs. 391.72 Crore. BEST submitted that it has included the deficit of Transport Division in ARR of FY 201112 as part of the True-up exercise of FY 2011-12. BEST submitted that the Commission has duly adjudicated and decided the methodology and the necessity of allowing Transport deficit after adjusting ROE and ROIF vide its Order dated 16 March 2012 in Case No. 125 of 2011 and 16 May 2012 in Case No. 171 of 2011. Accordingly, BEST has claimed net Transport deficit of Rs. 264.05 Crore for FY 2011-12, after adjusting ROE and ROIF, as against Rs. 215.68 Crore provisionally allowed by the Commission in Order dated 16 May, 2012 in Case No. 171 of 2011 as shown in the following table: Table: Transport Deficit for FY 2011-12submitted by BEST (Rs. Crore) Sl. No. 1 2 3 Particulars Transport Deficit (Actual Audited) Less: RoE & RoIF Net Transport Deficit Amount (Rs. Crore) 391.72 127.67 264.05
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In line with the philosophy adopted by the Commission in its previous Orders and after checking the actual Transport deficit from the audited accounts submitted by BEST, the Commission accepts BESTs claim in this respect. The net Transport deficit after adjusting RoE and RoIF for FY 2011-12 as approved by the Commission is shown in the Table below: Table: Transport Deficit for FY 2011-12 approved by the Commission (Rs. Crore) Sl. No. 1 2 3 Particulars Transport Deficit (Actual Audited) Less: RoE & RoIF Net Transport Deficit Allowed after Truing-up 391.72 127.03 264.69
4.16 CARRYING COST BEST submitted that in the Order in Case No 171 of 2011, the Commission has stated: This period starts from August 2007, i.e., the date when Honble ATE clarified the computation of RoE and RoIF till the period of implementation of Commissions order dated 6 June 2008, when the revenue gap was added to the revenue requirement of FY 2008-09. A carrying cost of Rs. 12.23 crore has been computed based on the weighted average SBI PLR of FY 2007-08 and FY 2008-09. No further carrying cost, i.e., from FY 2008-09 to FY 2010-11, has been allowed on the basis that the said amount has been already passed in revenue requirement of FY 2008-09. BEST submitted that in the previous Orders, the Commission adopted the philosophy that the time taken for the process of Truing-up for any year should not be treated as a delay for computing carrying cost. BEST further submitted that the Commission was of the view that truing up has been done within a reasonable time frame, and hence, the said amounts are not entitled to carrying cost. BEST submitted that it has claimed carrying cost on return on equity of Rs. 72.62 Crore (Rs. 34.41 Crore for FY 2004-05 and Rs. 38.21 Crore for FY 2005-06) and carrying cost on revenue gap of Rs. 502.17 Crore (Rs. 276.38 Crore for FY 2006-07 and Rs. 225.79 Crore for FY 200708). BEST submitted that as per the ruling of the Honble ATE in Appeal No. 153 of 2009 the total carrying cost works out to Rs. 160.07 Crore. BEST further submitted that it has also gone through some of the Judgments of the other Electricity Regulatory Commissions across the country, which in effect has helped it to calculate the carrying cost for the specified period. Page 129 of 308
BEST submitted that in Appeal No. 153 of 2009, Honble ATE has ruled as follows: 45. The carrying cost is allowed based on the financial principle that whenever the recovery of cost is deferred, the financing of the gap in cash flow arranged by the distribution company from and/or promoters and/or accruals, has to be paid for by way of carrying cost. This principle has been well recognized in the regulatory practices as laid down by this Tribunal as well as the Honble Supreme Court. In 2007 APTEL 193, this Tribunal has held that along with the expenses, carrying cost is also to be given as legitimate expense. BEST submitted that recovery of RoE claimed by it was deferred from the time it became recoverable, i.e., Rs. 34.41 Crore from FY 2004-05 and Rs. 38.21 Crore from FY 2005-06 , till the time it was actually allowed by the Commission and recovered, i.e., FY 2008-09. BEST further submitted that it is eligible for carrying cost for 4 years on the amount of Rs. 34.41 Crore from FY 2004-05 to FY 2007-08 and 3 years on Rs. 38.21 Crore from FY 2005-06 to FY 200708. BEST submitted that the Commissions claim that the computation became clear only after Judgment of the Honble ATE in August, 2007 does not mean that the claim became recoverable only after August, 2007, since the claim already existed since FY 2004-05/FY 2005-06. BEST submitted that on the aspect of Commissions claim that recovery of carrying cost should not be allowed during the two year period that it takes to true-up any particular year, the principle of recovery of carrying cost from the time the cost became recoverable is well established and being utilized by many Regulatory Commissions. BEST submitted that in the Tariff Order for FY 2011-12, the Punjab State Electricity Regulatory Commission (PSERC) has also allowed carrying cost on the Trued-up gap of FY 2009-10 from FY 2009-10. BEST submitted that in NDPLs Tariff Order for FY 2009-10, the Delhi Electricity Regulatory Commission (DERC) has also provided carrying cost on the trued-up gap for FY 2007-08 from FY 2007-08 till FY 2009-10. BEST further submitted that in the Truing-up Order for Hukeri RECS for the Period FY 2001-02 to FY 2006-07, KERC has also computed the carrying cost in a similar way.
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BEST submitted that in light of the above, carrying cost should be allowed on revenue gap of Rs. 276.38 Crore for FY 2006-07 and Rs. 225.79 Crore for FY 2007-08 for FY 2006-07, FY 2007-08 and FY 2007-08, FY 2008-09, respectively. BEST submitted that in Appeal No. 153 of 2009, the Honble ATE has only ruled against the rate used by DERC for computing the carrying cost and not in any way challenged the methodology employed by DERC to compute carrying cost from FY 2007-08. BEST submitted the carrying cost computation in the following Table: Table: Carrying Cost submitted by BEST (Rs. Crore) Sl. No. 1 2 3 4 5 6 7 8 Year SBI PLR Return on equity for FY 2004-05 34.41 3.53 3.53 3.53 4.38 14.96 Return Revenue on equity gap for for FY FY 20062005-06 07 38.21 276.38 3.92 3.92 28.33 4.86 35.16 12.69 63.48 148.73 Revenue gap for FY 200708 225.79 28.72 28.88 57.60
FY 2004-05 10.25% FY 2005-06 10.25% FY 2006-07 10.25% FY 2007-08 12.72% FY 2008-09 12.79% Total (Rs. Crore) Grand total (Rs. Crore)
Summary of carrying cost claimed by BEST: Table: Summary of carrying cost submitted by BEST (Rs. Crore) Sl. No. 1 2 3 Particulars Grand Total Approved in Case 171 of 2011 Additional amount to be recovered Amount (Rs. Crore) 148.73 12.23 136.50
In order to implement the Judgments of the Honble ATE, the Commission is allowing the carrying cost on these amounts as claimed by BEST. Accordingly, the Commission has approved total recovery including interest at Rs. 119.73 Crore as against Rs. 136.50 Crore submitted by BEST. Further, it should be noted that the Commission has filed a Statutory Appeal on this issue before the Honble Supreme Court of India, which has been fixed for final hearing in the month of November 2013 and hence, the Commission is allowing the carrying cost. The Carrying Cost
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on Gap/(surplus) of previous years approved by the Commission is shown in the following Table: Table: Carrying Cost approved on deferred revenue gaps (Rs. Crore)
Sr. No. 1 3 Issue Gap /(Surplus) for respective years When was the principle amount recovered Total Recovery for Interest Calculation Months of interest for amounts due in Rate of the following years Financial Interest Year FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 4 (%) 10.25% 11.09% 12.48% 12.79% 11.87% FY 05 12 12 12 6 12 12 6 12 6 12 6 FY 06 FY 07 FY 08 3.53 3.82 4.29 2.20 0.00 0.00 13.84 4.24 4.77 2.44 0.00 0.00 11.45 0.00 34.49 17.67 0.00 0.00 52.17 0.00 0.00 28.88 13.40 0.00 42.28 119.73 FY 05 34.41 FY 09 34.41 FY 06 38.21 FY 09 38.21 FY 07 276.38 FY 09 276.38 FY 08 225.79 FY 10 225.79 Total
Total Recovery including Interest
4.17 VIGILANCE DRIVE AMOUNT BEST submitted that the recovery of Rs. 7.80 Crore on account of Vigilance drive in FY 201112 pursuant to Section 126 and/or Section 135 of the Electricity Act, 2003 and have been considered as provisional in nature. BEST added that after giving the full opportunity to the consumers to plead their case, it has been able to settle claims amounting to Rs. 7.01 Crore for FY 2011-12 after deducting Electricity duty and Maharashtra Tax amount from the provisional amount. The vigilance drive amounts for FY 2011-12 as submitted by BEST are shown in the table below: Table: Vigilance drive amount for FY 2011-12 (Rs. Crore) Sl. No. 1 2 3 4 Particulars Provisional amount recovered against vigilance drive Amount settled in FY 2011-12 Amount settled in FY 2012-13 Balance to be settled FY 2011-12 7.80 0.00 7.01 0.79
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BEST requested the Commission to consider the amount settled as Revenue in FY 2012-13 against the vigilance drive amount as same is already included in the total revenue. In line with the philosophy adopted by the Commission in its previous Orders the Commission has considered the additional revenue from vigilance drives amounting to Rs. 7.80 Crore as a part of Revenue of FY 2011-12. 4.18 INCOME TAX BEST submitted that as per the Income Tax Act under Section 10(20), the income of local authority is exempted. The said provision submitted by BEST is reproduced below: 10(20) the income of a local authority which is chargeable under the head Income from house property, Capital gains or Income from other sources or from a trade or business carried on by it which accrues or arises from the supply of a commodity or services [(not being water or electricity) within its own jurisdictional area or from the supply of water or electricity within or outside its own jurisdictional area]. Explanation For the purpose of this clause, the expression local authority means: i. Panchayat as referred to in clause (d) of article 243 of the Constitution; or ii. Municipality as referred to in clause (e) of article 243 P of the Constitution, or iii. Municipal Committee and District Board, legally entitled to, or entrusted by the Government with, the control or management of a Municipal or local fund, or iv. Cantonment Board as defined in Section 3 of the Cantonments Act, 1924 (2 of 1924) The Commission accepts BEST submissions that under Section 10 (20) of the Income Tax Act, the income of Local Authority is exempted. Hence, BEST is not paying any income tax. The Commission has hence, not considered any income tax for FY 2011-12. 4.19 AGGREGATE REVENUE REQUIREMENT GAP/(SURPLUS) OF BEST FOR FY 2011-12 (ARR) AND REVENUE
Based on the above discussions, BEST submitted the ARR for FY 2011-12 as shown in the following Table:
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Table: Aggregate Revenue Requirement submitted by BEST for FY 2011-12 (Rs. Crore)
BESTs submission in Case No. 171 of 2011 (1) Tariff Order in Case No. 171 of 2011 (2) Audited actual (3)
Sl. No.
Particulars
1 2 2.1 2.2 2.3 2.3 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Power Purchase Expenses ( including External Power Purchase) Operation & Maintenance Expenses Employee Expenses Impact of wage revision Administration & General Expenses Repair & Maintenance Expenses Depreciation, including advance against depreciation Interest on Long-term Loan Capital & Short Term Finance Interest on Working Capital (Normative) Interest on Working Capital (Additional) Interest on Consumer Deposits Bad Debts Written off Other Expenses Income Tax Stand-by charges payable to MSEDCL Transmission Charges payable to Transmission licensee Annual SLDC fees & charges Contribution to contingency reserves Incentive for reduction in Distribution loss Total Revenue Expenditure Return on Equity Capital Return as Interest on Internal funds Aggregate Revenue Requirement Less: Non-Tariff Income Transport Deficit of FY 2011-12 Aggregate Revenue Requirement from Retail Tariff Carrying cost
2220.06 439.21 216.71 97.13 88.55 36.82 60.46 15.65 30.58 0.00 13.37 0.00 55.72 0 107.85 127.64 0.96 8.69
2247.11 301.84 182.00 0.00 89.20 30.63 60.85 13.77 23.56 0.00 14.55 0.00 55.71 0.00 107.85 127.63 0.96 4.38 0.00
2189.23 341.68 220.75 0.00 85.09 35.84 60.46 11.01 23.85 0.00 14.29 0.00 54.50 0.00 107.85 127.64 0.96 4.34 26.41 2962.22 122.39 5.28 3089.89 48.09 264.05 3305.85 148.73
3080.20 129.36 5.28 3214.84 72.95 324.00 3465.89 170.34
2958.21 103.05 5.28 3066.54 53.51 215.68 3228.71 12.23
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Sl. No.
Particulars
BESTs submission in Case No. 171 of 2011 (1)
Tariff Order in Case No. 171 of 2011 (2)
Audited actual (3)
24 25
Add. Truing up for FY 2009-10 & FY 2010-11 Net Aggregate Revenue Requirement
443.58 3636.23 3684.53
0.00 3454.58
BEST submitted that the Commission had approved revenue from sale of power as Rs. 3384.53 Crore in its Tariff Order dated 16 May, 2012 in Case No. 171 of 2011, whereas the actual revenue earned in FY 2011-12 is Rs. 2547.57 Crore. The revenue gap for FY 2011-12 submitted by BEST is shown in the table below: Table: Revenue Gap for FY 2011-12 as submitted by BEST (Rs. Crore) Sl. No. 1 2 3 4 5 Particulars Net ARR Revenue from Sale of Power Revenue Gap/(Surplus) of FY 2011-12 Regulatory Assets approved Net Revenue Gap of FY 2011-12 excluding Regulatory Assets MERC Approved 3684.53 3384.53 300 Actual (Audited) 3454.58 2547.57 907.01 300.00 607.01
The summary of total revenue gap for FY 2010-11 and FY 2011-12 submitted by BEST is shown in the Table below: Table: Summary of Revenue Gap submitted by BEST Sl. No. 1 2 3 Particulars Revenue Gap of FY 2010-11 (audited) Revenue Gap of FY 2011-12 (audited) (excl. regulatory Assets of Rs. 300 Crore) Total Revenue Gap / (Surplus) Amount (Rs. Crore) 612.49 607.01 1219.50
The Commission observed that BEST has indicated the amount recovered through vigilance drives in FY 2010-11 of Rs. 7.80 Crore and accordingly, the Commission has added the same to the revenue from sale of electricity of Rs. 2547.57 Crore, thus, resulting in total revenue of Rs. 2555.37 Crore.
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After considering the net revenue from retail tariff after final truing up of FY 2011-12 at Rs. 2555.37 Crore and the previous adjustments, the Commission approves net revenue Gap of Rs. 559.34 Crore (excluding Regulatory Assets of Rs. 300 crore already created in the earlier Order) for FY 2011-12 as shown in the Table below: Table: Revenue Gap/ (Surplus) approved by the Commission for FY 2011-12
Sl. No. 1 2 2.1 2.2 2.3 3 4 5 5.1 5.2 6 7 8 9 10 11 11 12 14 15 16 17 18 19 Particulars Power Purchase Expenses ( including External Power Purchase) Operation & Maintenance Expenses Employee Expenses Administration & General Expenses Repair & Maintenance Expenses Depreciation, including advance against depreciation Interest on Long-term Loan Capital & Short Term Finance Interest on Working Capital ( Normative) Interest on Working Capital (Additional) Interest on Consumer Deposits Bad Debts Written off Other Expenses Income Tax Stand-by charges payable to MSEDCL Transmission Charges payable to Transmission licensee Annual SLDC fees & charges Contribution to contingency reserves Incentive for reduction of distribution loss Total Revenue Expenditure Return on Equity Capital Return as Interest on Internal funds Aggregate Revenue Requirement Less: Non Tariff Income Add: Deficit in Transport Division Actual 2189.23 341.68 220.75 85.09 35.84 60.46 11.01 23.85 0.00 14.29 0.00 54.50 0.00 107.85 127.64 0.96 4.34 26.41 2962.23 122.39 5.28 3089.90 48.09 264.05 2929.17 121.75 5.28 3056.19 52.83 264.69 14.29 0.00 54.50 0.00 107.85 127.64 0.96 4.37 12.09 14.29 0.00 54.50 0.00 107.85 127.64 0.96 4.37 24.18 2956.09 121.75 5.28 3083.11 52.83 264.69 Approved 2182.58 341.68 220.75 85.09 35.84 60.95 10.50 23.85 1.37 1.37
(Rs. Crore)
Net Entitlement 2182.58 344.42 220.75 87.83 35.84 60.95 10.50 23.85
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Sl. No.
Particulars Carrying Cost Aggregate Revenue Requirement from Retail Tariff Revenue from existing tariff Revenue from Vigilance drive Net Revenue from electricity sales Regulatory Assets approved Net Revenue Gap/(Surplus)
Actual 148.73 3454.60 2547.57 2547.57 300.00 607.03
Approved 119.73 3387.79 2547.57 7.80 2555.37 300.00 532.42
Net Entitlement 119.73 3414.71 2547.57 7.80 2555.37 300.00 559.34
20 21 22 24 25 26
The Aggregate Revenue Requirement for FY 2011-12 is lower than that projected by BEST is primarily due to the following reasons: (d) Reduction in power purchase cost from RE sources. (e) Reduction in Interest on long-term loan due to consideration of funding requirement based on approved capitalization. (f) Increase in Non Tariff Income due to higher interest on contingency reserve investment. (g) Reduction in carrying cost computed by the Commission.
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5 AGGREGATE REVENUE REQUIREMENT FOR CONTROL PERIOD FROM FY 2012-13 TO FY 2015-16
THE
BEST has submitted details of the projected expenses over the Control Period from FY 2012-13 to FY 2015-16 under various heads, viz., power purchase expenses, O&M expenses, depreciation, interest on loans, interest on working capital, etc., as per the data formats prescribed by the Commission. The Commission has discussed the expenditure allowed on each of the expense heads and the total expenditure of BEST approved by the Commission for the Control Period from FY 2012-13 to FY 2015-16, in the subsequent paragraphs, including recovery of Transport Business deficit.
5.1
SALES
BEST submitted that for estimating sales for FY 2012-13, it has considered actual category-wise sales from April 2012 to January 2013 and the sales figures for February 2013 and March 2013 have been calculated on pro-rata basis. BEST submitted that for projecting sales for the period from FY 2013-14 to FY 2015-16, it has considered category-wise sales as approved by the Commission vide its MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011. The Table below provides the summary of category-wise sales submitted by BEST for the second Control Period: Table: Category-wise Energy Sales for the Control Period as submitted by BEST (MU) Tariff Category LT Category 1 BPL 2 LT-I Sl. No. Slabs 0-30 0-100 101-300 301-500 > 500 0-500 > 500 all units all units 0-500 FY 2012-13 0.51 685.09 574.59 175.25 345.30 543.38 376.16 256.59 510.87 23.33 FY 2013-14 0.25 729.58 614.57 187.90 361.38 404.60 288.01 280.27 536.18 24.64 FY 2014-15 0.25 768.50 649.50 199.40 381.39 420.42 299.63 299.69 573.35 25.53 FY 2015-16 0.26 810.89 688.64 212.75 403.56 438.57 313.13 321.32 614.71 26.53
3 4 5 6
LT-II (a) LT-II (b) LT-II (c) LT-III
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Sl. No. 7 8 9 10 11 12 13 14 15
Tariff Category
Slabs > 500 all units all units all units all units all units all units all units all units all units
FY 2012-13 26.63 53.95 49.64 2.72 30.25 1.68 36.63 1.17 10.57 34.51 3738.83 172.44 379.91 32.23 3.58 28.59 616.75 4355.58
FY 2013-14 28.63 57.41 52.19 3.38 33.12 0.10 48.11 1.34 265.19 103.17 4020.02 162.49 437.22 33.70 5.30 70.49 709.20 4729.22
FY 2014-15 29.67 59.50 54.61 3.51 35.18 0.10 52.76 1.40 280.59 109.16 4224.14 171.18 482.89 35.03 5.49 77.85 772.44 5016.57
FY 2015-16 30.83 61.82 57.29 3.64 37.46 0.10 58.01 1.46 297.66 115.80 4494.43 180.82 534.73 36.52 5.70 86.21 843.98 5338.43
LT-IV (a) LT-IV (b) LT-V LT-VI LT-VII (a) LT-VII (b) LT-VIII LT-IX (a) LT-IX (b) Sub-total HT Category 16 HT-I 17 HT-II 18 HT-III 19 HT-IV 20 HT-V Sub-total Total
all units all units all units all units all units
BEST further submitted that it has not considered savings in MU due to DSM expenses at this stage, however, the same will be considered during the Mid Term Review. Since, FY 2012-13 was over, the Commission directed BEST to submit the actual category-wise sales in FY 2012-13, and in reply, BEST submitted the month-wise sales data up to March 2013 for each consumer category. In reply to the Commissions query regarding the status of new demand in Wadala Truck Terminal, Dharavi makeover project and Mill land development project in FY 2012-13 and whether BEST wished to revise its sales projections for the Control Period keeping in view the actual sales in FY 2012-13, BEST submitted that the demand had materialised in all the three projects, with a total Connected Load of 44.36 MW. BEST further submitted that the load in all these three projects is likely to pick up in next three years as envisaged in MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011, therefore, it has considered the same demand for the remaining Control Period as approved in the MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011.
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In accordance with the approach adopted by the Commission in the MYT Business Plan Order for BEST dated 15 January, 2013 in Case No. 124 of 2011, the Commission has approved sales for the remaining Control Period based on provisional sales for FY 2012-13 after deducting the new demand that has materialised in FY 2012-13, and considering 35% load factor for the new load as submitted by BEST and approved by the Commission in the MYT Business Plan Order and escalating the same for each year of MYT Control Period based on CAGR in consumption as shown in the Table below: Table: Category-wise growth rates considered by the Commission for sales computation CAGR considered by Commission 30.81% 0.67% 12.10% 0.00% 0.66% 0.00% 1.46% 7.36% 0.98% 12.10% 7.45% 2.61% 0.12% 0.00% 0.00%
Consumer Category LT Category BPL LT-I Residential LT-II Commercial LT-III Industrial < 20 kW LT-IV Industrial > 20 kW LT-V Advertisement & Hoardings LT-VI Street Lighting LT-VII Temporary Supply LT-VIII Crematorium & Burial Grounds LT-IX Hospitals & Educational Institutions HT Category HT-I Industry HT-II Commercial HT-III Group Housing Society HT-IV Temporary Supply HT-V Hospitals & Educational Institutions
Basis 5-year CAGR 5-year CAGR 5-year CAGR Negative growth, hence, no growth considered 3-year CAGR Negative growth, hence, no growth considered 3-year CAGR 3-year CAGR 3-year CAGR Considered CAGR of LT II category 3-year CAGR 5-year CAGR 3 year CAGR Negative growth, hence, no growth considered Considered CAGR of HT II category
For new Load Development, the Commission has considered actual sales for FY 2012-13, however, from FY 2013-14 onwards, the Commission has accepted BESTs submission and has considered the sales as approved in MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011.
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The category-wise sales approved by the Commission for the Control Period is summarised in the table below: Table: Category-wise Energy Sales for the Control Period approved by the Commission (MU) Sl. No. 1 2 Tariff Category LT Category BPL LT I Slabs FY 2012-13 0.39 687.86 584.31 178.53 349.57 543.37 379.49 260.89 516.42 22.44 25.81 54.28 49.51 2.66 30.17 1.60 36.61 1.24 10.64 35.80 all units all units all units all units all units 169.40 381.59 32.27 4.01 34.11 4392.95 FY 2013-14 0.52 701.10 596.34 182.53 356.48 627.29 438.54 303.52 601.50 23.71 27.28 57.60 52.52 2.84 32.31 1.72 41.78 1.32 25.60 45.45 190.40 371.96 34.05 4.28 37.74 4758.37 FY 2014-15 0.68 731.65 624.27 191.90 372.41 716.38 501.33 349.46 691.90 24.61 28.33 60.05 54.79 2.96 34.04 1.85 46.67 1.39 37.16 54.24 210.10 399.50 35.32 4.47 40.71 5216.16 FY 2015-16 0.89 765.46 656.23 203.06 390.39 816.68 572.19 401.55 794.39 25.61 29.49 62.74 57.33 3.10 35.98 1.99 52.21 1.45 50.48 64.23 231.72 431.68 36.75 4.69 44.38 5734.66
0 - 30 0 - 100 101 - 300 301 - 500 > 501
3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
LT - II (a) LT - II (b) LT - II (c) LT III LT - IV (a) LT - IV (b) LT V LT VI LT - VII (a) LT - VII (b) LT - VIII LT - IX (a) LT - IX (b) HT Category HT I HT II HT III HT IV HT V Total
0 - 500 > 500 all units all units 0 - 500 >500 all units all units all units all units all units all units all units
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5.2
DISTRIBUTION LOSS AND ENERGY INPUT REQUIREMENT
BEST submitted that it has estimated Energy Balance for FY 2012-13 using actual sales figures from April, 2012 to January, 2013 and estimated sales figures for the month of February, 2013 and March, 2013. BEST submitted that energy purchased at G < > T Interface has been calculated based on the actual Power Purchase quantum for the months of April, 2012 to February, 2013. BEST further submitted that for the month of March, 2013, the actual figures of purchase from Renewable Energy sources and External Sources were available, however, the actual figures for purchase from TPC-G were not available. BEST added that for computing the quantum of power purchased from TPC-G for March, 2013 the actual quantum of energy recorded at T < > D interface for March, 2013 has been considered. BEST submitted that for estimating the total energy purchased at G < > T level, it has added InSTS loss figure (considered as 4.28% based on 11 months actuals for FY 2012-13) to the energy at T < > D level. BEST further submitted that the energy procured from TPC-G has been derived, as energy procured from RE sources and external sources were already known. BEST submitted that it has calculated energy balance figures for FY 2013-14 to FY 2015-16 based on sales figures approved by the Commission for the respective years in its MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011. BEST submitted that distribution loss and InSTS loss figures have been taken from MYT Business Plan as shown below: Table: Energy Requirement for the Control Period submitted by BEST (MU) Sl. No. 1 2 3 4 5 Particulars Energy Sales (MU) Distribution loss (%) Energy at T<>D interface (MU) InST loss (%) Energy at G<>T interface (MU) FY 2012-13 4355.58 7.40% 4703.59 4.28% 4914.10 FY 2013-14 4729.22 8.00% 5140.46 4.85% 5402.48 FY 2014-15 5016.57 7.50% 5423.32 4.85% 5699.76 FY 2015-16 5338.43 7.00% 5740.25 4.85% 6032.84
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BEST requested the Commission to re-consider the distribution loss target for FY 2015-16 as 7.5% because such reduction cannot be accomplished when the loss levels have already been reduced to such an extent that the scope for further reduction is very little. The Commission, in its MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011 had projected a distribution loss trajectory for the Control Period from FY 2012-13 to FY 2015-16, which has been revised in the present MYT Order on the basis of actual distribution loss of FY 2011-12 and FY 2012-13, which are much below the target distribution loss levels. As detailed in the previous Section of this Order, the actual distribution loss in FY 2011-12 was 7.69%, which is significantly lower than the target loss level of 9.00% for FY 2011-12. Also, the actual distribution losses indicated for FY 2012-13 are even lower, at 6.69%. Hence, the Commission has considered the target distribution losses of 7.50% for FY 2012-13. Further for FY 2013-14, the Commission has considered target distribution losses of 7.00% which is a further reduction of 0.5% over the distribution loss level considered for FY 2012-13. However, for FY 2014-15 and FY 2015-16, the Commission has considered reduction of 0.25% every year over the previous years distribution loss target. The Commission is of the view that there is no merit in BESTs argument that the loss levels should be considered at 7.50% for computation of distribution loss reduction incentive for FY 2015-16. There is still sufficient incentive for BEST and its employees, even by considering the target distribution loss level as discussed above, and this philosophy is also consistent with the philosophy adopted by the Commission in the previous years, and the same has also been borne out by the fact that BEST has managed to achieve even lower levels of distribution loss. The distribution loss trajectory approved by the Commission for the Control Period is shown in the Table below:
Table: Distribution Loss Trajectory for the Control Period as approved by the Commission Particulars Distribution Loss FY 2012-13 7.50% FY 2013-14 7.00% FY 2014-15 6.75% FY 2015-16 6.50%
Further, the Commission has observed that the transmission loss of the Intra-State Transmission System (InSTS) since past few years has been decreasing. The Transmission loss trajectory for last few years as available on MSLDC website is shown in the following Table:
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Table: InSTS Transmission Losses (%) FY Particulars 2008-09 Transmission Losses

Source: MSLDC website
FY 2009-10 4.61%
FY 2010-11 4.31%
FY 2011-12 4.25%
FY 2012-13 4.20%
4.88%
As evident from the above Table, transmission losses have been decreasing and hence, the Commission finds no merit in approving the Power Purchase requirement at G < > T interface with the same transmission loss as approved in the past and subsequently having to change the same at the time of Truing-Up. Further, considering a higher transmission loss level will result in over-estimating the energy requirement and increase the burden on the consumers. For the purpose of this Order, the Commission has considered Transmission losses at 4.20% (actuals for FY 2012-13) for each year of the Control Period. Accordingly, the total energy requirement approved by the Commission for the MYT Control Period is shown in the Table below:
Table: Total Energy Requirement for the Control Period approved by the Commission (MU) Sl. No. 1 2 3 4 5 Particulars Energy Sales (MU) Distribution loss (%) Energy at T< >D interface (MU) InSTS loss (%) Energy at G< >T interface (MU) FY 2012-13 4392.95 6.69%* 4707.71 4.20% 4914.10 FY 2013-14 4758.37 7.00% 5116.53 4.20% 5340.85 FY 2014-15 5216.16 6.75% 5593.74 4.20% 5838.97 FY 2015-16 5734.66 6.50% 6133.32 4.20% 6402.22
Note: * The target distribution loss for FY 2012-13 is 7.50%, but since, the actual distribution losses are available, the same has been considered for the purposes of the Energy Balance; BEST will be entitled to the incentive on account of having lower distribution losses vis-a-vis the target loss of 7.50% 5.3 POWER PURCHASE PLAN
BEST has proposed to meet the Power Purchase requirement for MYT Control Period from the following sources:
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Power Purchase from TPC-G Purchase from Renewable Energy Sources External Sources
5.3.1 Power Purchase from TPC-G BEST submitted that it procures power primarily from TPC-G to meet majority of its demand and the receiving voltages are 110 kV and 22/33 kV. BEST further submitted that it has a PPA with TPC-G for 932 MW till 31 March, 2018. The quantum and cost of power purchase from TPC-G considered in MYT Business Plan Order in Case 124 of 2011 are as follows: Table: Quantum and Cost of Power Purchase from TPC-G for the Control Period considered by the Commission in MYT Business Plan Order Source of Power FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16
MU Rs. Crore MU Rs. Crore MU Rs. Crore MU Rs. Crore 2387.12 4970.18 2624.05 5160.96 2589.36 5607.39 2252.65 TPC-G 4982.74 BEST submitted that the Commission in its MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011 has directed BEST to consider the revised MYT Petition filed by TPC-G for its power purchase expenses. Accordingly, BEST has submitted power purchase cost based on revised MYT Petition submitted by TPC-G. BEST submitted that for the purpose of present Petition, it has considered actual power purchase quantum and cost for the period from April, 2012 to February, 2013 however, for March, 2013 it has considered actual figure available at T< >D interface. Power purchased from TPC-G in FY 2012-13 as submitted by BEST is given in the Table below: Table: Actual Power Purchase from TPC-G in FY 2012-13 submitted by BEST (MU) Month April-12 May-12 June-12 TPC-G 443.09 455.25 473.01
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Month July-12 August-12 September-12 October-12 November-12 December-12 January-13 February-13 March-13 Total (April 2012 to March 2013)
TPC-G 446.80 432.81 426.30 472.28 405.24 407.62 358.46 331.57 431.55 5083.97
BEST submitted that for the remaining Control Period from FY 2013-14 to FY 2015-16, it has considered number of units purchased and power purchase cost as given in revised MYT Petition of TPC-G. The summary of quantum and cost of power purchase from TPC-G, as submitted by BEST, is given in the Table below: Table: Quantum and Cost of Power Purchase from TPC-G estimated by BEST for the Control Period Source of Power FY 2012-13 (Provisional) MU Rs. Crore FY 2013-14 MU Rs. Crore FY 2014-15 MU Rs. Crore FY 2015-16 MU Rs. Crore 2794.84
TPC-G 5083.97
2739.19 5021.22
3646.03 5285.30
3368.05 5642.11
BEST further submitted that it has to pay Rs. 395.04 Crore to TPC-G, as settlement of past gaps, hence, it has added the same amount to the power purchase cost of FY 2013-14. In reply to the Commissions query regarding quantum and cost of power purchase from TPC -G in FY 2012-13, BEST submitted the relevant month-wise details for FY 2012-13. The Commission has accordingly considered actual quantum and cost of power purchase from TPCG for FY 2012-13. Further, the Commission has not considered any purchase from Unit 6 on Oil and RLNG for FY 2013-14 and FY 2014-15 and from Unit 4 (on oil) for various years of the Control Period, since, the power from these sources is costly and will not be dispatched based on Merit Order Despatch (MOD) principles, hence, for the purpose of the present MYT Order, the Commission has not considered the power purchase from these sources. Further, it is observed
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that the energy charges from Unit 5 (RLNG) and Unit 7 (RLNG) is around Rs. 9/kWh and Rs. 6/kWh respectively. In this regard, the Commission is of the view that since, power is available in the market at rates that are lower than the cost of generation from these Units, hence, it will not be appropriate to burden the consumers with high cost of power purchase when cheaper power is available. Therefore, for the purpose of present MYT Order the Commission has not considered the power purchase from Unit 5 (RLNG) and Unit 7 (RLNG), instead the Commission has considered the required balance quantum of power purchase to be met through external sources, as elaborated subsequently. The cost of power purchase from TPC-G for these years has been reworked based on the tariffs approved in TPC-Gs MYT Order dated 5 June, 2013 in Case No. 177 of 2011. The quantum and cost of power purchase from TPC-G approved by the Commission for the Control Period is shown in the following Table: Table: Quantum and Cost of Power Purchase from TPC-G approved by the Commission for the Control Period Source of Power FY 2012-13 (Provisional) MU Rs. Crore FY 2013-14 MU Rs. Crore FY 2014-15 MU Rs. Crore FY 2015-16 MU Rs. Crore 2542.30
TPC-G 5083.97
2739.21 3722.14
1761.94 4053.59
1935.13 5589.97
As regards settlement of past gaps pertaining to TPC-G, the Commission has approved recovery of Rs. 304.15 Crore as against Rs. 395.04 Crore on the basis of the amount approved in TPCGs MYT Order dated 5 June, 2013 in Case No. 177 of 2011. Further, the Commission has considered recovery of the same in the subsequent paragraphs of this Order. 5.3.2 Purchase from Renewable Energy Sources The Renewable Energy purchase quantum and cost approved in the MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011 for the Control Period, is summarised below: Table: Renewable Energy Purchase Quantum and Cost for the Control Period considered by the Commission in MYT Business Plan Order in Case No. 124 of 2011 Source of Power RPS (Spark Green) FY 2012-13 MU 70.96 Rs. Crore 31.93 FY 2013-14 MU 212.87 Rs. Crore 101.11 FY 2014-15 MU 283.82 Rs. Crore 142.20 FY 2015-16 MU 283.82 Rs. Crore 150.14
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Source of Power RPS Solar RPS-other Solar
FY 2012-13 MU 0.70 12.19 Rs. Crore 1.09 186.42 13.61
FY 2013-14 MU 16.60 246.34 10.41 Rs. Crore 25.91 139.68 11.62
FY 2014-15 MU 16.60 200.66 11.90 Rs. Crore 25.91 113.77 13.28
FY 2015-16 MU 16.60 228.97 13.56 Rs. Crore 25.91 129.82 15.14
RPS-other non-solar 328.78
BEST submitted that it has considered the actual quantum and cost of power purchase from Renewable sources for FY 2012-13. BEST further submitted that it has purchased Non-Solar Renewable Energy Certificates (RECs) worth Rs. 65.31 Crore in FY 2012-13. Renewable Energy purchase during FY 2012-13, as submitted by BEST, is summarised in the table below: Table: Actual Renewable Energy Purchase for FY 2012-13 submitted by BEST (MU) Month April-12 May-12 June-12 July-12 August-12 September-12 October-12 November-12 December-12 January-13 February-13 March-13 Total (April 2012 to March 2013) Renewable Energy Purchased 0.48 1.40 0.68 4.33 6.69 6.27 9.93 12.06 15.75 13.28 15.86 17.52 104.25
BEST submitted that pursuant to the Commission's directive vide Order dated 26 December, 2012 in Case No. 100 of 2012, in the matter of BEST's RPO compliance for FY 2010-11 and FY 2011-12, it had advertised an EOI on 16 November, 2012, for procuring solar power on long term basis. BEST submitted that based on the response to this EOI, it has entered into MoU with M/s Welspun Energy Maharashtra Pvt. Ltd. for procuring solar power from their proposed 20 MW solar project at tariff of Rs. 8.56/Unit for 25 years. BEST added that after completion of
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various formalities, Power Purchase Agreement (PPA) will be executed between BEST and M/s Welspun, and the same shall be submitted to the Commission for approval. BEST submitted it has also shortlisted another solar power developer, viz., M/s Accad Power for 10 MW of solar power at the same rate of Rs. 8.56/kWh and the process for entering into MoU with the firm has been initiated. BEST added that for the purpose of MYT Petition it has considered solar power from both these sources as shown in the subsequent table. BEST submitted that as approved by BEST Committee, it has initiated steps to terminate the solar power PPA entered into with MahaGenco on 16 May, 2011. BEST submitted that it has taken this step since the project has failed to come up by 31 March, 2012 as per the terms and conditions of PPA. Accordingly, BEST has not considered solar power from MahaGenco in the present MYT Petition. BEST submitted that it is periodically issuing advertisements in prominent newspapers for procuring renewable power on short term basis. BEST further submitted that in order to achieve its long term RE procurement it has entered into EPA with M/s Spark Green Energy for 50 MW biomass power. BEST added that the firm is in process of installing the project, which is expected to be commissioned this year. BEST submitted that it is also in touch with MCGM regarding procurement of renewable power from their proposed MidVaitarna hydro project. BEST added that it is making efforts to procure renewable power to meet its obligation and to reduce its dependence on REC route as directed by the Commission in its MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011. The summary of power purchase quantum and cost from Renewable Energy sources submitted by BEST is shown in the Table below: Table: Quantum and Cost of Renewable Energy Purchase estimated by BEST for the Control Period FY 2012-13 (Provisional) Source of Power MU RPS (Spark Green) RPS Solar RPS-other Non-Solar REC TOTAL 104.25 104.25 55.16 65.31 120.46 504.21 279.31 529.48 294.49 557.79 318.48 Rs. Crore FY 2013-14 Rs. Crore 101.11 38.52 139.68 FY 2014-15 Rs. Crore 142.20 38.52 113.77 FY 2015-16 Rs. Crore 150.14 38.52 129.82
MU 212.87 45.00 246.34
MU 283.82 45.00 200.66
MU 283.82 45.00 228.97
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In reply to the Commissions query regarding quantum and cost of power purchase from RE sources for FY 2012-13, BEST submitted month-wise details of the same for FY 2012-13. The Commission has accepted BESTs submission in this regard subjected to final truing up of FY 2012-13. Based on the sales and energy requirement approved in this Order, the Commission has recomputed the quantum of power purchase from RE sources to meet RPO target for the Control Period as given below: Table: Renewable Energy Requirement approved by the Commission (MU) Particulars RPO Solar RPO Non- Solar Total BEST total energy requirement at G< >T Interface RPO Solar (MU) RPO Non -Solar (MU) Met through Tie-ups RPO Solar RPO Non Solar Balance RE Requirement RPO Solar RPO Non- Solar FY 2012-13 0.25% 7.75% 8.00% 4914.10 12.29 380.84 0.00 0.00 12.29 380.84 FY 2013-14 0.50% 8.50% 9.00% 5340.85 26.70 453.97 26.70 212.87 0.00 241.10 FY 2014-15 0.50% 8.50% 9.00% 5838.97 29.19 496.31 29.19 283.82 0.00 212.49 FY 2015-16 0.50% 8.50% 9.00% 6402.22 32.01 544.19 32.01 283.82 0.00 260.37
As regards compliance of RPO obligations by BEST, the Commission vide its Order dated 17 April, 2013 in Case No. 30 of 2013 had directed as follows:
Commissions Decision with reasons:
10. Having heard the Petitioner and after considering the relevant material placed on record, the Commission observed that BEST has already fulfilled its non-solar RPO target for the FY 2010-11 and 2011-12. It is also observed that BEST is likely to fulfil the non-solar target for FY 2012-13 before 31 March, 2013 13. Thus, the Commission hereby relaxes/waives the Solar RPO targets as stipulated under Regulation 7.1 of the MERC (RPO-REC) Regulation 2010 for BEST for FY 2010-
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11 and FY 2011-12 and directs BEST to fulfil the solar target on a cumulative basis by FY 2015-16. 14. Regarding the shortfall in RPO targets for non-solar (including mini/micro hydro targets) for FY 2010-11 and FY 2011-12 and RPO targets for FY 2012-13 cumulatively before 31 March, 2013, the same shall be reviewed by the Commission in the proceeding for Verification and Compliance of RPO targets for FY 2012-13 as specified under MERC (RPO-REC) Regulations, 2010. From the above extract of the Commissions Order dated 17 April, 2013 it is observed that BEST has already complied with its Non-Solar Renewable Purchase Obligation for FY 2010-11 and FY 2011-12. Further, from the actual Renewable purchase data submitted by BEST for FY 2012-13, it is evident that BEST has complied with its Non-Solar Renewable Purchase Obligation for FY 2012-13 also. The Commission, vide its above referred Order has directed BEST to comply with it cumulative Solar Renewable Purchase Obligation by end of the Control Period, i.e., by FY 2015-16. Therefore, the same has been considered in the present MYT Order also. As regards rate of power purchase from M/s Spark Green for the Control Period, the Commission has considered the same in accordance with the PPA, which stipulates as under: The Tariff Rate and Structure for the project (Exhibit C) shall be as stipulated by MERC in Tariff Orders from time to time. However for first 5 years the tariff whichever is lower of following shall be applicable. (i) Stipulated Tariff by MERC (ii) Rs. 5 per unit with escalation of 5% per annum Further, for the purpose of the present MYT Order, the Commission has considered the same rate of power purchase from M/s Welspun Energy Maharashtra Pvt. Ltd. and M/s Accad Power as submitted by BEST in its MYT Petition as it is lower than the preferential tariff approved by the Commission. As discussed above, the RE sources (Non-Solar) tied-up by BEST are not sufficient to meet its RPO requirement during the second Control Period. In such scenario, BEST will have to procure power from other sources for which the preferential tariff is not known. In line with the principle adopted in MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011, the Commission has considered the levelised tariff of Wind Zone 1 of Rs 5.81/kWh for Non-Solar
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sources for FY 2013-14 as given in Order dated 22 March, 2013 in Case No. 6 of 2013, for the second Control Period. The RE power purchase quantum and cost approved by the Commission is summarised in the Table below: Table: Quantum and Cost of Renewable Energy Purchase approved by the Commission for the Control Period FY 2012-13 (Provisional) Source of Power MU RPS (Spark Green) RPS Solar RPS-other Non-Solar REC TOTAL 0.00 0.00 104.66 0.00 104.66 Rs. Crore 0.00 0.00 55.49 66.78 122.27 498.97 279.71 541.31 304.18 589.19 339.93 FY 2013-14 Rs. Crore 101.11 38.52 140.08 FY 2014-15 Rs. Crore 142.20 38.52 123.46 FY 2015-16 Rs. Crore 150.14 38.52 151.27
MU 212.87 45.00 241.10
MU 283.82 45.00 212.49
MU 283.82 45.00 260.37
5.3.3 Energy purchase/sale from External sources The External power purchase/sale quantum and cost approved in the MYT Business Plan Order for the second Control Period are summarised below: Table: External Power Purchase/sale Quantum and Cost for the Second Control Period approved in MYT Business Plan Order in Case No. 124 of 2011 Source Power of FY 2012-13 MU FY 2013-14 FY 2014-15 FY 2015-16 Rs. Crore (52.88)
Rs. Crore MU (106.89) (53.93)
Rs. Crore MU (24.27) 25.82
Rs. Crore MU 11.62 (117.51)
External (237.54) Purchase/ (Sale)
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Table: Actual External Power Purchase/(Sale) for FY 2012-13 submitted by BEST (MU) Month April-12 May-12 June-12 July-12 August-12 September-12 October-12 November-12 December-12 January-13 February-13 March-13 Total (April 2012 to March13) OLA SALE 0.00 0.00 (0.84) (0.25) (0.60) 0.00 (0.51) 0.00 0.00 0.00 0.00 0.00 (2.20) MSLDC Pool Imbalance (13.25) (22.30) (27.85) (13.70) (15.69) (25.18) (48.84) (39.28) (50.40) (32.26) (19.16) (44.88) (352.79) External purchase 9.52 22.97 10.82 5.72 3.80 5.16 15.48 2.90 0.51 0.00 1.83 2.17 80.87
In reply to the Commissions data gaps, BEST submitted the actual power purchase quantum and cost from external sources for FY 2012-13. From the reply it was observed that BEST has purchased 76.44 MU under external purchase and quantum of 7.16 MU under Standby purchase amounting to total external purchase of 83.59 MU. On further reconciliation of the data submitted by BEST, it was observed that BEST had not included the power purchase under Standby for the month of October and November under the external power purchase given in MYT Petition, thereby indicating external power purchase of 80.87 MU, as against actual purchase of 83.59 MU, including purchase under Standby arrangement. The summary of quantum of power purchase/ sale and cost from External sources as submitted by BEST is shown in the Table below: Table: Power Purchase Cost estimated by BEST for the Control Period FY 2012-13 (Provisional) MU Rs. Crore 35.74 FY 2013-14 Rs. Crore (55.33) FY 2014-15 Rs. Crore (51.76) FY 2015-16 Rs. Crore (75.18)
Source of Power
MU
MU
MU
External Purchase/
80.87
(122.95)
(115.02)
(167.06)
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Source of Power
FY 2012-13 (Provisional) MU Rs. Crore
FY 2013-14 Rs. Crore
MU
MU
MU
(Sale) OLA MSLDC Imbalance Pool The Commission has not considered any power purchase from the Intra-state Imbalance Pool for FY 2013-14 to FY 2015-16 as the same is determined only on real-time basis and cannot be projected in the MYT Order. For the purpose of present MYT Order, the Commission has treated power purchase from external sources and power purchase under Standby separately. The Commission has considered the rate of external power purchase for FY 2012-13 based on the actual power purchase cost, which works out to Rs. 4.41/kWh. Further, for FY 2013-14 to FY 2015-16, the Commission has re-computed the quantum of power purchase from external sources, based on the projected sales and energy availability from TPC-G and RE sources as discussed in earlier paragraphs. The Commission has considered the rate of external power purchase for the Control Period based on the actual power purchase cost for FY 2012-13, which works out to Rs. 4.41/kWh. The quantum and cost of power purchase/(sale) from external sources approved by the Commission for the Control Period, is given below: (2.20) (352.79) (1.13) (355.13) -
Table: External Power Purchase/(Sale) Quantum and Cost approved by the Commission for the Control Period FY 2012-13 (Provisional) Source of Power MU External Purchase/ (Sale) Rs. Crore 33.69 FY 2013-14 Rs. Crore FY 2014-15 Rs. Crore 548.37 FY 2015-16 Rs. Crore 98.32
MU
MU
MU
76.44
1119.74
493.57 1244.07
223.06
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FY 2012-13 (Provisional) Source of Power MU OLA MSLDC Imbalance Pool (2.20) (355.92) Rs. Crore (1.13) (312.19)
FY 2013-14 Rs. Crore -
MU
MU
MU
5.3.4 Standby Charges Standby Charges payable to MSEDCL for the Control Period as submitted by BEST are as follows: Table: Standby Charges submitted by BEST (Rs. Crore) Particulars Standby Charges payable by BEST FY 2012-13 107.85 FY 2013-14 111.80 FY 2014-15 111.80 FY 2015-16 111.80
The Commission has considered the average of coincident peak demand and non-coincident peak demand of BEST to total demand as considered by the Commission in its Order dated 13 May, 2013 in Case No. 56 of 2013 in the matter of Suo-motu Determination of Transmission Tariff for Intra-State Transmission System (InSTS) for FY 2013-14 to FY 2015-16 of the second MYT Control Period. Accordingly, the Standby Charges payable by BEST as approved by the Commission for the Control Period are as shown below: Table: Standby charges approved by the Commission (Rs. Crore) Particulars Standby Charges Payable to MSEDCL Allocation to BEST Standby Charges 107.85 Actual FY 2012-13 396.00 FY 2013-14 396.00 27.61% 109.33 FY 2014-15 396.00 27.61% 109.33 FY 2015-16 396.00 27.61% 109.33
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5.3.5 Transmission Charges & SLDC Charges The Transmission and SLDC charges for the MYT Control Period as submitted by BEST are shown in the following Table: Table: Transmission and SLDC Charges submitted by BEST (Rs. Crore) Particulars Transmission Charges SLDC charges Total Transmission & SLDC charges FY 2012-13 193.08 0.75 193.83 FY 2013-14 216.59 0.78 217.37 FY 2014-15 227.42 0.82 228.24 FY 2015-16 238.79 0.86 239.65
The Commission, vide its Suo Motu Order dated 13 May, 2013 in Case No. 56 of 2013 has determined the Transmission Tariff for Intra-State Transmission System (InSTS) for FY 2013-14 to FY 2015-16. Accordingly, the Commission has considered the Transmission Charges payable by BEST as approved in the above-said Order. Further, while approving SLDC charges payable by BEST, the Commission has considered SLDC charges for FY 2013-14 as approved vide Order dated 22 March, 2013 in Case No. 133 of 2012. Further, the Commission has escalated the SLDC charges at the rate of 5% for the Control Period. The Transmission and SLDC Charges for the Control Period approved by the Commission is shown in the Table below: Table: Transmission and SLDC Charges approved by the Commission (Rs. Crore) FY Particulars Transmission Charges SLDC charges Total Transmission & SLDC charges 2012-13 (Actual) 193.08 0.75 193.83 FY 2013-14 341.57 1.27 469.41 FY 2014-15 311.38 1.28 428.17 FY 2015-16 361.61 1.28 497.04
Summary of Power Purchase Cost Summary of Power Purchase cost estimated by BEST for the Control Period is summarised in the table below:
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Table: Summary of Power Purchase Expenses for the Control Period submitted by BEST
FY 2012-13 (Provisional) Source of Power MU TPC-G RPS (Spark Green) RPS-Solar RPS-Other non-solar RPS-REC External power purchase/(Sale) External power purchase OLA Sale Pool Imbalances Transmission Charges SLDC Charges Standby Charges (Rebate from TPC G) Delayed payment Charges & Interest to TPC G Total Average Power Purchase Cost (Rs./kWh) 5083.97 0.00 0.00 104.25 Rs. Crore 2739.19 0.00 0.00 55.16 65.31 35.74 (1.13) (355.13) 193.08 0.75 107.85 0.00 40.33 2881.14 5.86 FY 2013-14 MU 5021.22 212.87 45.00 246.34 (122.95) 80.87 (2.20) (352.79) Rs. Crore 3646.03 101.11 38.52 139.68 (55.33) FY 2014-15 MU 5285.30 283.82 45.00 200.66 (115.02) Rs. Crore 3368.05 142.20 38.52 113.77 (51.76) FY 2015-16 MU 5642.11 283.82 45.00 228.97 (167.06) Rs. Crore 2794.84 150.14 38.52 129.82 (75.18)
4914.10
5402.48
216.59 0.78 111.80 0.00
5699.76
227.42 0.82 111.80 0.00
6032.84
238.79 0.86 111.80 0.00
4199.19 7.77
3950.82 6.93
3389.59 5.62
In its submission regarding actual power purchase for FY 2012-13, BEST submitted that it has also procured 7.16 MU under Standby at a total cost of Rs. 3.20 Crore. The Commission has considered BESTs submission for FY 2012-13 in this regard. However, for rest of the Control Period, i.e., from FY 2013-14 to FY 2015-16, the Commission has not considered any additional energy being procured under standby since it can be considered on real time basis only. Further, the Commission has not considered the delayed payment charges and interest paid by BEST to TPC-G in FY 2012-13, as BEST is expected to pay its bills on time, and all due working capital interest and carrying cost on delayed recovery of revenue gaps are being allowed, hence, the consumers cannot be expected to also bear the cost of delayed payment of bills by BEST. Accordingly, the summary of Power Purchase Quantum and Cost approved by the Commission for the Control Period is summarised in the table below:-
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Table: Summary of Power Purchase Expenses for the Control Period approved by the Commission
FY 2012-13 (Provisional) Source of Power MU TPC-G RPS (Spark Green) RPS-Solar RPS-Other non-solar RPS-REC (with Rebate) External power purchase/(Sale) OLA Sale Pool Imbalances Standby Energy Purchase Transmission Charges SLDC Charges Standby Charges (Rebate from TPC G) Total Average Power Purchase Cost (Rs./kWh) 5083.97 0.00 0.00 104.66 0.00 76.44 (2.20) (355.92) 7.16 Rs. Crore 2739.21 0.00 0.00 55.49 66.78 33.69 (1.13) (312.19) 3.20 193.08 0.75 107.85 0.00 2886.73 5.96 FY 2013-14 MU 3722.14 212.87 45.00 241.10 0.00 1119.74 Rs. Crore 1761.94 101.11 38.52 140.08 0.00 493.57 FY 2014-15 MU 4053.59 283.82 45.00 212.49 0.00 1244.07 Rs. Crore 1935.13 142.20 38.52 123.46 0.00 548.37 FY 2015-16 MU 5589.97 283.82 45.00 260.37 0.00 223.06 Rs. Crore 2542.30 150.14 38.52 151.27 0.00 98.32
5340.85
341.57 1.27 109.33 0.00 2987.39 5.59
5838.97
311.38 1.28 109.33 0.00 3209.67 5.50
6402.22
361.61 1.28 109.33 0.00 3452.78 5.39
4914.10
5.4
O&M EXPENSES
BEST submitted that the Operation and Maintenance (O&M) expenses are calculated as a sum of Employee expenses, Administration and General (A&G) expenses and Repair & Maintenance (R&M) expenses. BEST submitted that it has also considered impact of wage revision during the period from FY 2012-13 to FY 2015-16 under O&M expenses. BEST submitted that the Commission in its MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2012 has estimated O&M expenses for FY 2012-13 to FY 2015-16, in accordance with the provisions of MERC MYT Regulations, 2011, based on the computed sales and wheeled energy for FY 2012-13 to FY 2015-16 along with the capitalisation projected by the Commission during the years starting from FY 2012-13. BEST further submitted that the Commission has considered the closing GFA of Rs. 1924.99 Crore for FY 2011-12 as approved Page 158 of 308
in the Commission's Order dated 16 May, 2012 in Case No. 171 of 2011, as the opening GFA for FY 2012-13. BEST submitted that based on the above, the Commission had estimated O&M expense for the Control Period in Case No. 124 of 2011 for Wires Business and Supply Business as given in the table below: Table: O&M expenses computed by Commission in Case 124 of 2011 as submitted by BEST S.N. A Particulars Units FY 2012-13 18.13 18.17 4.50% 4490.52 1006 1924.99 350.83 0.00 350.83 0.00 350.83 Second Control Period FY FY FY 2013-14 2014-15 2015-16 19.17 18.97 4.50% 4729.22 1010 2161.48 379.53 0.00 379.53 74.31 453.84 20.26 20.06 4.50% 5016.57 1014 2208.38 404.43 0.00 404.43 74.31 478.74 21.42 21.21 4.50% 5338.43 1018 2252.98 431.67 0.00 431.67 74.31 505.98
Composite O&M Norms For Sales in Distribution 1 Business For No. of Consumers in 2 Distribution Business 3 4 5 6 R&M Expenses for Distribution Business O&M Charges Norm Sales No. of Consumers in Distribution Business Opening GFA Total O&M Expenses less O&M Expenses Capitalized Net O&M Expenses Impact of wage revision Total O&M Expenses
Paise /kWh Rs. Lakh /'000 Consumers % of GFA MU 000 Consumers Rs. Crore Rs. Crore Rs. Crore Rs. Crore Rs. Crore Rs. Crore
B 1 C D E
BEST submitted that it has computed O&M expenses based on the provisional figures for FY 2012-13, as summarized below: Table: Provisional O&M Expenses for FY 2012-13 a submitted by BEST Particulars Employee Expenses A&G Expenses R&M Expenses Total O&M Expenses Rs. Crore 299.33 86.67 38.86 424.86
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5.4.1 Employee Expenses BEST submitted that the employee expenses for FY 2012-13 have been computed on the basis of actual/provisional figures for FY 2012-13. BEST further submitted that employee expenses have increased due to the implementation of Wage Agreement for FY 2006-07 to FY 2010-11 and FY 2011-12 to FY 2015-16, respectively, and the same has been brought into effect from August, 2012 for the employees and from January, 2013 for the officers. BEST added that the additional cost towards basic salary, DA, HRA and PF is amounting to Rs. 79.87 Crore, and has been accounted in FY 2012-13. The details of Employee Expenses for FY 2012-13 as submitted by BEST are shown in the Table below: Table: Provisional Employee Expenses for FY 2012-13 submitted by BEST S. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 (Less) 18 Particulars Basic salary Dearness Allowances House rent Allowances Conveyance Allowances Leave Travel Allowance Earned Leave Allowance Medical Allowances Overtime Allowances Bonus,/Ex-Gratia Allowances Interim Relief/Wage settlement Functional Allowances VRS Compensation Special benefit Provident fund Gratuity Cost of bus token/passes Gross Employees Expenses Est of CAS, TDE, ST. LTG, Ele. Work Net Employees Expenses Grand Total 113.69 110.04 20.69 0.44 4.01 3.00 4.63 5.26 0.00 0.41 13.64 0.00 0.00 25.55 15.59 0.00 316.95 17.62 299.33
A&G Expenses BEST submitted that it has calculated the A&G expenses by taking the actual/provisional figures of FY 2012-13, as summarized in Table below: Page 160 of 308
Table: Provisional A&G Expenses for FY 2012-13 S. No. 1 2 3 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Particulars Rent Rates & Taxes Insurance Telephone & postage Legal Charges & Audit fees Professional / consultancy charges Electricity charges Security arrangement Printing & Stationery Advertisement License Fees & other Related Fees Vehicle running expenses Training Bank charges Cont Reserve Fund Property Insurance Fund Others Shares of G.A.-Security Arrangement Total Grand Total 3.28 0.01 1.07 1.00 0.54 6.91 12.59 1.66 0.53 0.39 0.59 0.01 1.15 0.00 9.00 8.65 39.29 86.67
R&M Expenses BEST submitted that it has calculated R&M expenses by taking the actual/provisional figures of FY 2012-13, as summarized in Table below: Table: Provisional R&M Expenses for FY 2012-13 (Rs. Crore) S. No. 1 2 3 4 5 6 7 8 Particulars Central office and service of office Equip Material Stock Adjustment Dead stock R&M of substation Building (Civil) Main Aerial Meter Installation Grand Total 10.56 0.08 0.00 0.12 4.42 0.00 14.00 3.49
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S. No. 9 10
Particulars Meter testing Reinstatement charges TOTAL
Grand Total 0.07 6.12 38.86
BEST submitted that for the period from FY 2013-14 to FY 2015-16, it has computed normative O&M expenses in accordance with the provisions of MERC MYT Regulations, 2011 based on the projected sales and wheeled energy for FY 2012-13 to FY 2015-16 along with the capitalisation projected by the Commission during the years starting from FY 2012-13. The normative O&M expenses for FY 2012-13 to FY 2015-16 as submitted by BEST are shown in the Table below: Table: O&M Expenses as per MYT Norms submitted by BEST S. No. A Particulars Composite O&M Norms For Sales in Distribution Business For No. of Consumers in Distribution Business R&M Expenses for Distribution Business O&M Charges Norm Sales No. of Consumers in Distribution Business Opening GFA Total O&M Expenses less O&M Expenses Capitalized Net O&M Expenses Impact of wage revision Total O&M Expenses Units Second MYT Control Period FY FY FY FY 2012-13 2013-14 2014-15 2015-16 18.13 18.17 4.50% 4355.58 1024.29 1847.26 348.21 0 348.21 0 348.21 19.17 18.97 4.50% 4729.22 1034.53 2066.86 379.92 0 379.92 74.31 454.23 20.26 20.06 4.50% 5016.57 1044.88 2336.30 416.37 0 416.37 74.31 490.68 21.42 21.21 4.50% 5338.43 1055.33 2621.14 456.14 0 456.14 74.31 530.45
Paise /kWh Rs. Lakh/'000 Consumers % of GFA MU 000 Consumers Rs. Crore Rs. Crore Rs. Crore Rs. Crore Rs. Crore Rs. Crore
C D E
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BEST submitted that the difference between the normative O&M expenses and actual O&M expenses for FY 2012-13 are because of increase in employee expenses on account of implementation of Wage Agreement for FY 2006-07 to FY 2010-11 and FY 2011-12 to FY 2015-16, respectively, as explained in above paragraphs. BEST requested the Commission to approve O&M expenses as per the actuals for FY 2012-13 and as per the norms for the period from FY2013-14 to FY 2015-16. Table: O&M Expenses as per BEST S. No. Particulars 1 Total O&M Expenses (Rs. Crore) FY 2012-13 424.86 Second MYT Control Period FY FY 2013-14 2014-15 454.23 490.68 FY 2015-16 530.45
BEST submitted that for FY 2013-14 to FY 2015-16, O&M expenses estimated by BEST are in line with that approved by the Commission in its MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011. BEST further submitted that it will claim any variation in above expenses on the basis of actuals at the time of Mid-Term Review. As regards BESTs request for approval of revised O&M expenses for FY 2012-13, it is to be noted that the Commission had addressed the issue in detail vide its MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011. The Commission reiterates that since, it is already approving the impact of Wage Agreement separately in this MYT Order; hence, there is no merit in revising norms for O&M expenses. The Commission has approved O&M expenses for FY 2012-13 to FY 2015-16 in accordance with the provisions of MERC MYT Regulations, 2011, based on the approved sales and wheeled energy for FY 2012-13 to FY 2015-16 along with the capitalisation approved by the Commission during the years starting from FY 2012-13. Further, to arrive at opening GFA for FY 2012-13, the closing GFA of FY 2011-12 has been considered as approved by the Commission in Section 4 of this Order. The Commission has approved O&M expenses during MYT Control Period for Wires Business and Supply Business, as summarised in the Tables below:
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Table: O&M expenses approved by the Commission Sl. No. A Particulars Composite O&M Norms For Sales in Distribution Business For No. of Consumers in Distribution Business R&M Expenses for Distribution Business O&M Charges Norm Sales No. of Consumers in Distribution Business Opening GFA B C Total O&M Expenses less O&M Expenses Capitalized Net O&M Expenses MU 000 Consumers Rs. Crore Rs. Crore Rs. Crore Rs. Crore Units Second MYT Control Period FY FY FY FY 2012-13 2013-14 2014-15 2015-16 18.13 18.17 4.50% 0.00 4392.95 1024.37 1838.84 348.52 0.00 348.52 19.17 18.97 4.50% 0.00 4758.37 1034.61 2058.44 380.11 0.00 380.11 20.26 20.06 4.50% 0.00 5216.16 1044.96 2327.87 420.05 0.00 420.05 21.42 21.21 4.50% 0.00 5734.66 1055.41 2612.72 464.26 0.00 464.26
Paise /kWh Rs. Lakh/'000 Consumers % of GFA
In reply to the Commissions query regarding justification for higher amount claimed through Wage Impact in revised Petition compared to earlier submission in MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011, BEST submitted that impact of Wage Agreement as submitted in MYT Business Plan Petition was Rs. 425.49 Crore and the same had to be revised under following circumstances and limitations: 1 2 3 It was based on the number of employees on rolls as on 1 April, 2012. It did not include the payment to be made to the supervisory staff of the Undertaking on rolls. The said projection included only Basic pay, Dearness Allowance, House Rent Allowance and Medical Allowance. Other category specific allowances were not included. Also, few new allowances such as Performance Allowance, Travelling Allowance are introduced. Several employees and officers had stagnated in their pay scales / grades. The stagnation was removed with effect from 1 April, 2006. Its impact was not considered while working out the earlier estimate. While working out the earlier estimate of Rs. 425.49 Crore, the number of employees / officers was taken as 45600 (approximately). Whereas while calculating the revised figure of Rs. 741. 39 Crore (inadvertently mentioned in the compliance report to the directives of the Commission in Case No.124 of 2011 at Sr. No. `d as Rs.731.49 Crore). No. of employees
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considered is 48017 (approximately, which is on roll position on February 2013). This burden is calculated by practically running the pay-roll of each employee till 2015-16 on the basis of staff position as on February. 2013. In reply to the Commissions query on the Wage Agreement, BEST submitted that the arrears excluding the share of Common Administrative Department and A&B Grade officers, for the period from FY 2006-07 to FY 2015-16 was Rs. 133.46 Crore for Supply Business. BEST further submitted that it has already paid Rs. 70.78 Crore as revised Pay scale upto FY 2012-13 and Rs. 62.68 Crore is yet to be paid. The Commission has accepted BEST submission pertaining to the arrears of Rs. 133.46 Crore for the period from FY 2006-07 to FY 2015-16 for Supply Business and payment of Rs. 70.78 Crore on account of revised pay scale upto FY 201213. For computing the total arrears, the Commission has also considered share of arrears for Common Administrative department and A&B Grade officers as submitted by BEST in the revised Petition. The revised arrears for the Supply Business computed by the Commission works out to Rs. 162.85 Crore from FY 2005-06 to FY 2015-16. Further, the Commission has considered the amount to be disbursed in three equal instalments starting from FY 2013-14, as shown under: Table: O&M expenses and Impact of Wage Agreement approved by the Commission (Rs. Crore) Particulars Impact of Wage Agreement for respective years O&M expenses Total O&M Expenses Second MYT Control Period FY FY FY FY 2012-13 2013-14 2014-15 2015-16 58.35 54.28 54.28 54.28 348.52 406.87 380.11 434.40 420.05 474.34 464.26 518.54
5.5
CAPITAL EXPENDITURE AND CAPITALISATION
BEST submitted that it has been following the policy of developing adequate system capacity that meets the entire requirement and builds adequate reserves in the system in all its Capex projects so that the network is able to meet the increased demand and also during any unforeseen outages. BEST submitted that it has estimated capital expenditure and capitalisation from FY 2012-13 to FY 2015-16 considering all the DPRs approved by the Commission till date.
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BEST submitted that the proposed Capex for the second Control Period is mainly for the implementation of enhanced distribution infrastructure for effectively catering to increasing load, replacing old cables, equipments, etc., laying of new lines, load balancing, establishment of new distribution substations, automation and digitalization of electrical distribution infrastructure, implementation of Interactive Voice Response System for quick and prompt redressal of consumer complains, implementation of advanced metering infrastructure, establishment of equipment helping in distribution loss reduction, energy efficiency and demand side management, etc. BEST further submitted that the proposed Capex for the second Control Period is in accordance with Regulation 41 of MERC MYT Regulations, 2011. BEST submitted that it has assumed that all schemes will be capitalized in three years and accordingly, the estimated capital expenditure from FY 2012-13 to FY 2015-16 is tabulated below:Table: Capital Expenditure for FY 2012-13 to FY 2015-16 as submitted by BEST (Rs Crore) Project No. Project Title FY 13 (A) DPR SCHEMES (already approved by the Commission) Load Growth New Receiving Substations DPR 1 25.65 Commissioning DPR 2 DPR 3 DPR 4 DPR 5 Revamping existing Receiving Substations New Distribution Substations and augmentation and alteration to existing equipment Laying of HV & LV cables and associated equipment 32.21 63.89 60.00 FY 14 FY 15 FY 16
32.83 42.60 95.80 47.59
36.24 33.95 104.86 52.77 16.23 20.89 19.17
9.01 36.63 116.52 53.24 15.13 23.03 36.64
SCADA, Digitization & 16.22 21.74 Communications Distribution Loss Reduction DPR 6 Energy Meters 17.29 19.34 Wadala track Terminal DPR 9 (b+c) 9.63 23.48 Development (B) DPR SCHEMES referred back Wadala truck Terminal DPR 9 (a) 2.00 32.00 Development ( C) DPR SCHEMES yet to be submitted to the Commission for approval DSM Demand Side Management 4.79
35.00
0.00
5.03
5.28
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Project No. Project Title (D) NON- DPR SCHEMES Furniture, office equipment, Tools, Civil engineering works, motor works, Share of G.A. expenses Street lighting (lamps & cables) Sub total TOTAL excluding DSM and DPR 9 (a)
FY 13
FY 14
FY 15
FY 16
7.85 3.65 238.39 236.39
3.30 4.36 327.83 291.04
3.65 4.80 332.59 392.56
6.87 5.28 307.63 302.35
BEST submitted that the total capital expenditure has been calculated after excluding the DSM and DPR 9(a) schemes, since they have not yet been approved by the Commission. BEST further submitted that on similar lines capitalization for the entire Control Period has also been computed after excluding DSM and DPR 9(a) schemes. The following table provides the capitalization details for FY 2012-13 to FY 2015-16 as submitted by BEST: Table: Capitalisation for FY 2012-13 to FY 2015-16 as submitted by BEST (Rs. Crore) Project No. Project Title (A) DPR SCHEMES (already approved by MERC) Load Growth New Receiving Substations DPR 1 Commissioning DPR 2 DPR 3 DPR 4 DPR 5 DPR 6 Revamping existing Receiving Substations New Distribution Substations and augmentation and alteration to existing equipment Laying of HV & LV cables and associated equipment SCADA, Digitization & Communications Distribution Loss Reduction Energy Meters FY 13 FY 14 FY 15 FY 16
25.65 32.21 63.89 60.00 16.22 17.29
32.83 42.60 95.80 47.59 21.74 19.34
36.24 33.95 104.86 52.77 16.23 20.89 20.54 28.10
9.01 36.63 116.52 53.24 15.13 23.03 23.30 27.55
DPR 9 (b+c) Wadala track Terminal Development 1.93 10.96 (B) DPR SCHEMES referred back DPR 9 (a) Wadala track Terminal Development 0.40 7.70 ( C) DPR SCHEMES yet to be submitted to the Commission for approval
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Project No. Project Title DSM Demand Side Management (D) NON -DPR SCHEMES Furniture, office equipment, Tools, Civil engineering works, motor works, Share of G.A. expenses Street lighting (lamps & cables) Sub total TOTAL excluding DSM and DPR 9 (a)
FY 13
FY 14 4.79
FY 15 5.03
FY 16 5.28
7.85 3.65 229.09 228.69
3.30 4.36 291.01 278.52
3.65 4.80 327.06 293.93
6.87 5.28 321.84 289.01
BEST submitted that it shall claim any variation in above expenses on the basis of actual at the time of Mid-Term Review. The Commission has verified the projected Capital Investment Plan vis--vis the in-principle approved schemes and has approved the capital cost for the purpose of MYT Petition, after giving due consideration to regulatory provisions under MERC MYT Regulations, 2011 in relation to capital expenditure and subsequent submissions provided by BEST during the regulatory process. The Commission has approved certain DPR schemes after the issue of the MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011 and accordingly, the Commission has also considered these schemes while considering the capex for the Control Period. Based on BESTs submission and the Commissions ruling relating to capex discussed above, for the purpose of present MYT Order, the Commission has considered DPR schemes, which have already been granted in-principle approval by the Commission. Further, as per Regulation 27.5 of MERC MYT Regulations, 2011 the Commission has considered an additional amount equivalent to 20% of the total capitalisation approved towards unplanned capital expenditure. However, in case the capitalisation proposed by BEST against DPR schemes that are yet to be approved by the Commission for a given financial year is less than 20% of approved capitalisation for that year, the Commission has considered the capitalisation proposed by BEST. For the purpose of present MYT Order, the Commission has approved the following Capital Expenditure and Capitalisation for the Control Period:
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Table: Capital Expenditure and Capitalisation approved by the Commission (Rs. Crore) Particulars Capital Expenditure Capitalisation with IDC 5.6 DEPRECIATION FY 2012-13 244.84 243.48 FY 2013- 14 298.11 297.28 FY 2014-15 279.10 313.70 FY 2015-16 300.34 307.95
BEST submitted that the Depreciation for the second Control Period has been computed by applying depreciation rates approved by the Commission on the opening Gross Fixed Assets (GFA) and as per MERC MYT Regulations, 2011. Table: Depreciation for the Control Period submitted by BEST (Rs. Crore) Particulars Depreciation FY 2012-13 94.73 FY 2013-14 105.90 FY 2014-15 119.45 FY 2015-16 133.81
BEST submitted that any variation in above expenses will be claimed on actual basis at the time of Mid-Term Review. The Commission, for the purpose of the present MYT Order, has computed depreciation for the Control Period as under. Closing GFA for FY 2011-12 as approved in Section 4 of this Order has been considered as opening GFA for FY 2012-13. Further, the revised approved capitalisation for subsequent years in the Control Period has been considered for the purpose of computation of depreciation. For retirement of assets, the Commission has accepted BESTs submission for the Control Period. The Commission, for the purpose of the present MYT Order, has approved depreciation for the years under consideration of the second Control Period starting from FY 2012-13 as under: Table: Depreciation for the Control Period approved by the Commission (Rs. Crore) Particulars Depreciation FY 2012-13 94.43 FY 2013-14 105.61 FY 2014-15 119.33 FY 2015-16 133.69
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5.7
INTEREST EXPENSES
5.7.1 Interest on Loans BEST submitted that the Interest on long-term loan has been calculated in accordance with Regulation 33 of MERC (MYT) Regulations, 2011. The Table below provides the detailed calculation of Interest on Long term/ short term loan submitted by BEST: Table: Interest on Long Term Capital submitted by BEST (Rs. Crore) New Loans Opening balance of Existing loan Loan drawal during the year Total loan Loan repayment during the year as per Depreciation provision (i.e. Regulation 33.3) Closing balance Average Balance Applicable Interest Rate (%) Interest Expenses on new loans Total Interest Expenses (Existing Loan) Total Interest expenses FY 2012-13 0.00 164.94 164.94 94.73 70.21 35.11 10.75% 17.73 5.90 23.63 FY 2013-14 70.21 202.60 272.81 105.90 166.91 118.56 10.75% 12.75 2.84 15.59 FY 2014-15 166.91 214.09 381.01 119.45 261.55 214.23 10.75% 23.03 2.59 25.62 FY 2015-16 261.55 210.07 471.62 133.81 337.81 299.68 10.75% 32.22 2.34 34.56
BEST submitted that for FY 2012-13 it has computed interest expenses on new loans by applying interest rate on the Loan Drawal during the year while for FY 2013-14 to FY 201516, the interest rate has been applied on the average balance to calculate the interest expenses on new loans. BEST further submitted that the total interest expenses have been calculated by adding interest on existing loans to the interest on new loans. BEST submitted that it will claim any variation in above expenses on the basis of actual at the time of Mid-Term Review. The Commission has reworked the opening loan for FY 2012-13 on the basis of closing loan for FY 2011-12 approved by the Commission while doing the truing up for FY 2011-12 as discussed in Section 4 of this Order. The Commission has considered debt amount for each year of the Control Period from FY 2012-13 to FY 2015-16 based on the capitalisation approved by the Commission in the present MYT Order.
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Further, the loan repayments have to be considered at the same level as the depreciation for the respective years in accordance with Regulation 33.3 of the MERC MYT Regulations. The rates of interest considered for FY 2012-13 to FY 2015-16 have been computed based on the weighted average rate of interest calculated on the basis of the actual loan portfolio at beginning of FY 2012-13 through FY 2015-16 in accordance with Regulation 33.5 of MERC MYT Regulations. However, in case of BEST, there are no long-term loans in the real sense of the term, and BEST has been rolling over the short-term loans. Hence, the Commission has considered the rate of interest for the period from FY 2013-14 to FY 2015-16 as 10.75% as proposed by BEST. The interest on loan has been calculated on the normative average loan for each year of the Control Period by applying the above rate of interest. The Interest expenses on long-term loan approved by the Commission for FY 2012-13 to FY 2015-16, is summarised in the Table below: Table: Interest on Long Term Capital approved by the Commission (Rs. Crore) Particulars Opening Balance of Loan Loan drawal during the year (New loan) Loan repayment during the year Closing Balance of Loan Applicable Interest Rate (%) (Avg. rate) Interest Expenses FY 2012-13 97.82 164.94 94.43 168.32 10.25% 13.64 FY 2013-14 166.75 202.60 105.61 265.32 10.75% 23.31 FY 2014-15 262.20 214.09 119.33 360.08 10.75% 33.62 FY 2015-16 355.43 210.07 133.69 436.46 10.75% 42.81
5.7.2 Interest on Working Capital BEST submitted that it has computed Interest on Working Capital (IoWC) on normative basis in accordance with Regulation 35.4 of MERC MYT Regulations, 2011. BEST submitted it has computed the Interest on Working Capital at the rate of 14.45% which is same as the interest rate estimated in ARR Petition for FY 2011-12 in Case No. 171 of 2011.
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Table: Interest on working capital as submitted by BEST (Rs Crore) S. No. 1 Particulars One-twelfth of the amount of Operations and Maintenance Expenses One-twelfth of the sum of the book value of stores, materials and supplies Two months of the expected revenue from sale of electricity at the prevailing tariffs Amount of Security Deposit Security Deposit from Consumers Security Deposit from Distribution System Users Cost of power purchased (1 months for FY 2012-13 to FY 2015-16 and 9 days for FY 2010-11 to FY 2011-12) Total Working Capital = (1+2+3)-(5+6+7) Rate of interest Interest on Working Capital FY 2012-13 (Provisional) 35.41 FY 2013-14 37.85 FY 2014-15 40.89 FY 2015-16 44.20
1.21
1.27
1.33
1.40
3 Less: 4 5 6
592.93
773.86
881.56
1006.21
237.97 0.00
245.08 0.00
252.43 0.00
260.00 0.00
240.09
349.93
329.23
282.47
8 9 10
151.51 14.45% 21.89
217.96 14.45% 31.50
342.12 14.45% 49.44
509.35 14.45% 73.60
BEST submitted that it will claim any variation in the above expenses on the basis of actuals at the time of Mid-term Review. The Commission has computed the total working capital requirement in accordance with the provisions of MERC MYT Regulations 2011, and has computed the interest on working capital by considering the SBAR of 14.45% as on date of filing of the Petition. The Interest on Working Capital as approved by the Commission is shown in table below:
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Table: Interest on working Capital approved by the Commission (Rs Crore) S. No. 1 2 3 Less: 4 5 6 7 8 9 10 Amount of Security Deposit Security Deposit from Consumers Security Deposit from Distribution System Users Cost of power purchased (1 months for FY 2012-13 to FY 2015-16 and 9 days for FY 2010-11 to FY 2011-12) Total Working Capital = (1+2+3)-(5+6+7) Rate of interest Interest on Working Capital 237.94 0.00 245.08 0.00 252.43 0.00 260.00 0.00 Particulars One-twelfth of the amount of Operations and Maintenance Expenses One-twelfth of the sum of the book value of stores, materials and supplies Two months of the expected revenue from sale of electricity at the prevailing tariffs FY 2012-13 33.91 1.21 647.10 FY 2013-14 36.20 1.27 671.26 FY 2014-15 39.53 1.33 715.54 FY 2015-16 43.21 1.40 726.85
240.56 203.71 14.45% 29.44
248.95 214.70 14.45% 31.02
267.47 236.50 14.45% 34.17
287.73 223.73 14.45% 32.33
5.7.3 Interest on consumer security deposit BEST submitted it has computed Interest on Consumer Security Deposit (CSD) at the rate of 9% per annum, which is the same rate that has been approved by the Commission in MYT Business Plan Order dated 15 January, 2013 in Case No 124 of 2011. BEST submitted that the Commission in its MYT Business Plan Order dated 15 January, 2013 in Case No 124 of 2011 had escalated consumer security deposit by 3% based on the past trends from FY 2009-10 to FY 2011-12, and had computed the interest on the same by considering the prevailing RBI Bank Rate of 9%. BEST submitted that for the present MYT Petition it has considered the same interest on consumer security deposit for the Control Period as shown in the table below:
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Table: Interest on Consumer Security Deposit submitted by BEST (Rs. Crore) S. No. 1 2 Particulars Consumer Security Deposit Interest on Consumer Deposit FY 2012-13 237.94 21.41 FY 2013-14 245.08 22.06 FY 2014-15 252.43 22.72 FY 2015-16 260.00 23.40
BEST submitted that it will claim any variation in above expenses on the basis of actual at the time of Mid-Term Review. As regards Interest on Security Deposit, the Commission has computed Interest on Security Deposit at the rate of 9.00%, considering CSD as approved in MYT Business Plan Order dated 15 January, 2013 in Case No 124 of 2011, as shown in table below: Table: Interest on Consumer Security Deposit approved by the Commission (Rs. Crore) S. No. 1 2 Particulars Consumer Security Deposit Interest on Consumer Deposit FY 2012-13 237.94 21.41 FY 2013-14 245.08 22.06 FY 2014-15 252.43 22.72 FY 2015-16 260.00 23.40
5.8
RETURN ON EQUITY
BEST submitted that for FY 2012-13 it has computed Return on Equity (RoE) and Return on Internal Funds (RoIF) based on actuals while for FY 2013-14 onwards it has considered the capitalization and Interest During Construction (IDC) approved in MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011, to work out RoE and RoIF values as shown in following table: Table: Return on equity as submitted by BEST (Rs Crore) S. No. 1 Particulars Regulatory Equity at the beginning of the year Total Capitalization Capitalization during the year (including IDC less consumer contribution) FY 2012-13 (Provisional) 780.67 FY 2013-14 848.79 FY 2014-15 933.05 FY 2015-16 1022.23
235.63
289.43
305.85
300.10
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S. No. 3 4 5 6 7 8 9 10 11
Particulars Equity Portion of the capitalization during the year (30%) Reduction in EquityRetirement/Replacement of Assets) Regulatory Equity at the end of the year Return Computation Return on Regulatory Equity at the beginning of the year (15.76%) Return on Equity portion of the capital expenditure during the year (15.76%/2) Total Return on Regulatory Equity Returns approved as Interest on Internal funds Total Returns
FY 2012-13 (Provisional) 70.69 2.57 848.79
FY 2013-14 86.83 2.57 933.05
FY 2014-15 91.75 2.57 1022.23
FY 2015-16 90.03 2.57 1109.70
123.03 5.37 128.40 5.28 133.68
133.77 6.64 140.41 5.28 145.69
147.05 7.03 154.08 5.28 159.36
161.10 6.89 168.00 5.28 173.28
BEST submitted it will claim any variation in above computations on the basis of actual at the time of Mid-Term Review. As regards impact of de-capitalisation/retirement of assets in computation of RoE for FY 201213 to FY 2015-16, BEST has considered the impact of the replacement of the assets by reducing the Equity to the extent of 30 % of the GFA of the assets that have been retired. For the propose of arriving at the Regulatory Equity at the beginning of the year for FY 2012-13, the closing equity at the end of FY 2011-12 as approved by the Commission in Section 4 of the present Order has been considered. Further, the Commission has considered weighted average rate of ROE at 15.76% as approved in MYT Business Plan Order dated 15 January, 2013 in Case 124 of 2011. For the assets capitalised during the year, the Commission has considered 50% of the approved levels of asset capitalisation during each year of the Control Period by applying the normative debt: equity ratio of 70:30. The Commission has accepted BESTs submission as regards ROIF. ROE and ROIF approved by the Commission for the Control Period is shown in the following Table:
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Table: Return on Equity and Internal Funds approved by the Commission (Rs Crore) Sl. No. 1 Particulars Regulatory Equity at the beginning of the year Total Capitalization Capitalization during the year (including IDC less consumer contribution) Equity Portion of the capitalization during the year (30%) Reduction in Equity-Retirement/Replacement of Assets) Regulatory Equity at the end of the year Return Computation Return on Regulatory Equity at the beginning of the year (15.76%) Return on Equity portion of the capital expenditure during the year (15.76%/2) Total Return on Regulatory Equity Returns approved as Interest on Internal funds Total Returns FY 2012-13 775.77 0.00 235.63 70.69 2.57 843.89 0.00 122.26 5.37 127.63 5.28 132.91 FY 2013-14 843.89 0.00 289.43 86.83 2.57 928.15 0.00 133.00 6.64 139.64 5.28 144.92 FY 2014-15 928.15 0.00 305.85 91.75 2.57 1017.33 0.00 146.28 7.03 153.30 5.28 158.58 FY 2015-16 1017.33 0.00 300.10 90.03 2.57 1104.79 0.00 160.33 6.89 167.22 5.28 172.50
2 3 4 5 6 7 8 9 10 11
5.9
PROVISION FOR BAD AND DOUBTFUL DEBTS
BEST submitted that for FY 2012-13 to FY 2015-16, it has considered provision for Bad debts, at 1.5% of the audited figure of receivables for FY 2010-11, which is in line with Regulation 78.6 and Regulation 92.9 of MERC MYT Regulations, 2011. Provision for bad debts as submitted by BEST is shown in the following table: Table: Provision for Bad debts submitted by BEST Particulars Bad debts written off/Provision for bad and doubtful debts FY 2012-13 5.71 FY 2013-14 5.71 (Rs. Crore) FY 2014-15 5.71 FY 2015-16 5.71
From the audited accounts, it is observed that nil bad debts have been written off by BEST for FY 2010-11 and FY 2011-12. The Commission finds no merit in approving an amount of Rs. 5.71 Crore towards provision for bad debts and loading the consumers with unnecessary cost.
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Therefore, the Commission has considered nil Provision for Bad debts for the Control Period. However, any variation in the same shall be trued up on the basis of actual during Mid-Term Performance Review 5.10 CONTRIBUTION TO CONTINGENCY RESERVES BEST submitted that it does not have any equity in the traditional sense and does the funding through internal resources only. BEST submitted that it has started the contingency reserve fund from March, 2009 onwards. BEST submitted that Regulation 36.1 of MERC MYT Regulations, 2011 provides for creation of contingency reserves at the rate of 0.25% to 0.5% of the opening GFA for the year. BEST submitted that in accordance with the aforesaid Regulations it has considered 0.25% of the Opening GFA as contribution to contingency reserves as shown in the following table:
Table: Contribution to Contingency Reserves submitted by BEST (Rs. Crore) Sl. No. Particulars 1 2 3 Opening GFA % of opening GFA Contribution to Contingency Reserve FY 2012-13 1847.26 0.25% 4.62 FY 2013-14 2066.86 0.25% 5.17 FY 2014-15 2336.30 0.25% 5.84 FY 2015-16 2621.14 0.25% 6.55
For the propose of arriving at the value of contingency reserve at the beginning of the year for FY 2012-13, the closing value of contingency reserve at the end of FY 2011-12 as approved by the Commission in Section 4 of the present Order has been considered. The Contribution to Contingency Reserves approved by the Commission for the Control Period is summarized below: Table: Contribution to contingency reserves approved by the Commission (Rs. Crore) Sl. No. 1 2 3 Particulars Opening GFA % of opening GFA Contribution to Contingency Reserve FY 2012-13 1838.84 0.25% 4.60 FY 2013-14 2058.44 0.25% 5.15 FY 2014-15 2327.87 0.25% 5.82 FY 2015-16 2612.72 0.25% 6.53
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5.11 OTHER EXPENSES BEST submitted that for FY 2012-13, it has considered other expenses as per actual/provisional item-wise values. The details of other expenses for FY 2012-13 as submitted by BEST are shown in the following Table: Table: Other expenses submitted by BEST (Rs Crore) S. No. 1 2 3 4 5 6 Particulars Power factor incentive Prompt payment discount ECS Discount DSM Power Factor Discount Load factor incentive TOTAL Grand Total 69.75 11.14 0.37 0.00 0.00 0.00 81.26
BEST submitted that for FY 2013-14 to FY 2015-16, it has considered other expenses same as that in FY 2012-13. BEST submitted that the Commission vide its MYT Business Plan Order dated 15 January, 2012 in Case No. 124 of 2011 has considered other expenses at the same level as that in FY 2011-12 for the Control Period from FY 2012-13 to FY 2015-16. BEST submitted that in line with the same philosophy as adopted by the Commission in this regard it has also considered the actual/ provisional figures of FY 2012-13, for the remaining Control Period as shown in the Table below: Table: Other Expenses for the Control Period submitted by BEST (Rs. Crore) S. No. 1 2 3 4 5 6 Particulars Power factor incentive Prompt payment discount ECS Discount DSM Power Factor Discount Load factor incentive TOTAL FY 2012-13 69.75 11.14 0.37 0.00 0.00 0.00 81.26 FY 2013-14 69.75 11.14 0.37 0.00 0.00 0.00 81.26 FY 2014-15 69.75 11.14 0.37 0.00 0.00 0.00 81.26 FY 2015-16 69.75 11.14 0.37 0.00 0.00 0.00 81.26
The Commission accepts BESTs submission in this regard and approves other expenses at the same level as that of FY 2012-13 for the remaining Control Period. The other expenses approved by the Commission are shown in Table below:
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Table: Other Expenses for the Control Period approved by the Commission (Rs. Crore) S. No. 1 2 3 4 5 6 Particulars Power factor incentive Prompt payment discount ECS Discount DSM Power Factor Disc Load factor incentive TOTAL FY 2012-13 69.75 11.14 0.37 0.00 0.00 0.00 81.26 FY 2013-14 69.75 11.14 0.37 0.00 0.00 0.00 81.26 FY 2014-15 69.75 11.14 0.37 0.00 0.00 0.00 81.26 FY 2015-16 69.75 11.14 0.37 0.00 0.00 0.00 81.26
5.12 NON-TARIFF INCOME BEST submitted that for FY 2012-13, it has estimated Non-Tariff Income (NTI) based on actual/provisional figures of FY 2012-13. BEST submitted that it has not included prompt payment discount from TPC-G in NTI, as it does not envisage receiving the same in future. BEST further submitted that it has computed interest on contingency reserves based on closing balance of investments for FY 2011-12, and subsequent additions during FY 2012-13 to FY 2015-16. BEST submitted that for computing Non-Tariff income for FY 2013-14 to FY 2015-16, it has considered annual escalation of 10% on NTI for FY 2012-13. BEST further submitted that it has considered interest on additional contribution to Contingency reserves at the rate of 9.36%, in addition to the previous year's interest on Contingency Reserve approved by the Commission vide Order dated 16 May, 2012 in Case No. 171 of 2011 for the respective years of the second Control Period, in accordance with MERC MYT Regulations, 2011. Accordingly, NTI projected by BEST for the Control Period is as follows: Table: Non-Tariff Income for FY 2012-13 to FY 2015-16 as submitted by BEST (Rs. Crore) Sr. No. 1 2 3 A Particulars Customer/Contract Charges Sale & Repairs of Lamps and Apparatus Other Receipts Delayed Payment & Interest on Arrears FY 2012-13 (Provisional) 0.00 0.00 33.63 FY 2013-14 0.00 0.00 36.99 FY 2014-15 0.00 0.00 40.69 FY 2015-16 0.00 0.00 44.76
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Sr. No. B C 4 5 6
Particulars Electricity Duty Collection Charges Others-Reconnection, Requisition Damaged Meter Charges Misc.-Rent of Bldg., Advertisement Receipt & Others Share of receipt of General Administration Interest on Contingency Reserve TOTAL
FY 2012-13 (Provisional) 0.04 0.71 17.10 3.62 1.24 56.34
FY 2013-14 0.04 0.78 18.81 3.98 1.36 61.97
FY 2014-15 0.05 0.86 20.69 4.38 1.48 68.17
FY 2015-16 0.05 0.95 22.76 4.82 1.62 74.99
BEST submitted that it will consider any variation in above income on the basis of actuals at the time of Mid-Term Review. The Commission has considered annual escalation of 10% on the NTI in line with the philosophy adopted in the MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011, over the Non-Tariff Income of FY 2012-13. The Commission has computed interest on additional Contingency Reserves at an interest rate of 9.36%, as submitted by BEST and approved by the Commission in the MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011, in addition to previous years interest on Contingency Reserve. Accordingly, the Non-Tariff Income as approved by the Commission is summarised in the Table below: Table: Non-Tariff Income for FY 2012-13 to FY 2015-16 approved by the Commission (Rs. Crore) Sr. No. 1 2 3 A B C 4 5 Particulars Customer/Contract Charges Sale & Repairs of Lamps and Apparatus Other Receipts Delayed Payment & Interest on Arrears Electricity Duty Collection Charges Others-Reconnection, Requisition Damaged Meter Charges Misc.-Rent of Bldg., Advertisement Receipt & Others Share of receipt of General Administration FY 2012-13 (Provisional) 0.00 0.00 0.00 33.63 0.04 0.71 17.10 3.62 FY 2013-14 0.00 0.00 0.00 36.99 0.04 0.78 18.81 3.98 FY 2014-15 0.00 0.00 0.00 40.69 0.05 0.86 20.69 4.38 FY 2015-16 0.00 0.00 0.00 44.76 0.05 0.95 22.76 4.82
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Sr. No. 6
Particulars Interest on Contingency Reserve TOTAL
FY 2012-13 (Provisional) 7.41 62.51
FY 2013-14 7.89 68.50
FY 2014-15 8.44 75.11
FY 2015-16 9.05 82.39
5.13 WIRE AVAILABILITY AND SUPPLY AVAILABILITY 5.13.1 Wire Availability As regards Wires Availability, Regulation 84 of MERC MYT Regulations, 2011 specifies as follows: 84.1 The target Wires Availability for full recovery of Return on Equity Capital for Wires Business shall be as under: (a) Rural Areas 90 percent (b) Towns and cities 95 percent Provided that the Commission may stipulate a trajectory for achieving the target Availability for Wires Business of the Distribution Licensee as part of the Order on the Business Plan filed by the Distribution Licensee: Provided further that for every 1 percent under-achievement in Wires Availability, Rate of Return on Equity Capital shall be reduced by 0.1%: Provided further that for every 1 percent over-achievement in Wires Availability, Rate of Return on Equity Capital shall be increased by 0.1%. 84.2 Wires Availability shall be computed in accordance with the following formula: Wires Availability = (1- (SAIDI / 8760)) x 100 where Provided that the SAIDI shall be calculated in accordance with the definition specified in Maharashtra Electricity Regulatory Commission (Standards of Performance of Distribution Licensees, Period for Giving Supply and Determination of Compensation) Regulations, 2005, as amended from time to time. 84.3 Wires Availability shall be measured over the course of a year and shall be expressed in percentage terms. The Commission, vide MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011, has not addressed this issue. However, since the impact of the same will be observed
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during the time of Truing up of ARR for the second Control Period, the Commission in line with the above Regulations has stipulated a trajectory for achieving the target availability for the Wires Business of BEST, as discussed in the subsequent paragraphs of this MYT Order. In reply to the Commissions query regarding detailed computation of SAIDI for FY 2012-13 along with the latest available data, BEST submitted the following computation: Table: SAIDI for FY 2012-13 (up to January, 2013) submitted by BEST MONTH in minute Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 YTD 13.27 13.36 13.07 17.05 11.64 10.73 11.88 7.91 9.09 7.25 115.25 SAIDI
Wires Availability submitted by BEST for the Control Period is shown in Table below: Table: Wire Availability for the Control Period as submitted by BEST Sr. No. Particulars FY 2012-13 Town & Cities a) b) SAIDI (minute/consumer) Wires Availability (%) 131.60 98.50% FY 2013-14 Town & Cities 128.50 98.53% FY 2014-15 Town & Cities 125.60 98.57% FY 2015-16 Town & Cities 122.70 98.60%
For computing Wires availability for FY 2012-13 the Commission has computed provisional SAIDI based on the monthly SAIDI data from April, 2012 to January, 2013 as submitted by
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BEST in reply to data gaps. Further, the Commission has computed the average of the above data and computed the SAIDI for the month of February, 2013 and March, 2013. The provisional SAIDI computed by the Commission works out to 138.30 minute/consumer for FY 2012-13. The Commission has stipulated the Wires Availability trajectory considering Wires Availability at 98.42% for FY 2012-13 as the base level for MYT Control Period. However, the Commission is of the view in accordance with SOP Regulations, BEST has to improve its performance therefore, the Commission stipulates a trajectory of Wire Availability of 99% annually for the remaining Control Period. The Wires Availability approved by the Commission is shown in Table below: Table: Wires Availability Trajectory for the Control Period approved by the Commission Particulars Wires Availability FY 2012-13 98.42% FY 2013-14 99.00% FY 2014-15 99.00% FY 2015-16 99.00%
Further, the reduction and increase in ROE shall be computed below/ above the stipulated target based on the under/over achievement vis-a-vis the set target of Wires Availability by BEST. 5.13.2 Supply Availability As regards Supply availability, Regulation 97 of MERC MYT Regulations, 2011 specifies as follows: Supply Availability shall comprise of the following parameters in the proportion as mentioned below: (a) Base load Supply Availability 75 percent (b) Peak load Supply Availability 25 percent 97.2 Target Supply Availability for full recovery of Return on Equity Capital for Retail Supply of electricity is in the range of 85 percent to 95 percent, as may be determined by the Commission as part of the Order on the Business Plan filed by the Distribution Licensee: Provided that the Commission may stipulate a trajectory for achieving the target Supply Availability for Retail Supply of electricity as part of the Order on the Business Plan filed by the Distribution Licensee: Provided that for every 1 percent under-achievement in Supply Availability, rate of Return on Equity Capital shall be reduced by 0.1%.
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Provided that for every 1 percent over-achievement in Supply Availability, rate of Return on Equity Capital shall be increased by 0.1%. 97.3 Base load Supply Availability shall be computed in accordance with the following formula: = (Actual Contracted Base Load Supply in MW) (Base load in MW) Provided that the base load shall be calculated based on unrestricted demand of a Distribution Licensee for the retail supply of electricity. 97.4 Peak load Supply Availability shall be computed in accordance with the following formula: = (Actual Contracted Peak Load Supply in MW) (Peak load in MW) Provided that the peak load shall be calculated based on unrestricted demand of a Distribution Licensee for the retail supply of electricity. The Commission, vide MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011, has not addressed this issue. However, since the impact of the same will be observed during the time of Truing up of ARR for the Control Period, the Commission in line with the above Regulations has stipulated a trajectory for achieving the target availability for the Supply Business of BEST, as discussed in subsequent paragraphs of this MYT Order. Supply Availability for the Control Period as submitted by BEST is as shown below: Table: Supply Availability for the Control Period submitted by BEST Particulars Base Load Supply Availability Actual Contracted Base Load Supply (MW) Base Load (MW) Base Load Supply Availability (%) Peak Load Supply Availability Actual Contracted Peak Load Supply (MW) d 218.00 218.00 218.00 218.00 a b c=ab 673.00 546.95 123.05% 673.00 582.61 115.52% 673.00 630.37 106.76% 673.00 703.67 95.64% Details FY 2012-13 FY 2013- 14 FY 2014-15 FY 2015-16
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Particulars Peak Load (MW) Peak Load Supply Availability (%) Supply Availability (%)
Details e f=de (0.75*c + 0.25*f)
FY 2012-13 382.82 56.95%
FY 2013- 14 407.78 53.46%
FY 2014-15 441.21 49.41%
FY 2015-16 492.51 44.26%
106.52%
100.00%
92.42%
82.80%
In reply to the Commissions query regarding Supply Availability, BEST submitted month-wise Supply Availability for FY 2011-12 and FY 2012-13. BEST submitted that it has considered Base Load as the minimum of all loads experienced in 15-minute time slots during the month. BEST submitted that since this load is at T < > D interface, it has grossed up the same for transmission loss. BEST further submitted that similarly the System Peak Load considered by BEST is the maximum of all loads experienced in 15minute time slots during the month. BEST submitted that it has computed Peak component of system peak load by subtracting Base load during the month from System Peak Load during the same month. BEST added that Base load and Peak component of system peak load denote the base and peak components of the total supply required to be contracted by it. BEST submitted that on the supply side, Base Load Contracted Capacity is the supply contracted from TPC-G for meeting its base load requirements. BEST submitted that for deriving the base load contracted capacity, it has considered the ex-bus allocation from each Unit of TPC-G (Units 4, 5, 6, 7, 8 and Hydro). BEST submitted that the base load component of the supply has been derived on the basis of following assumptions: U-4: 0% of ex-bus allocation U-5: 100% of ex-bus allocation U-6: 150/500 of ex-bus allocation (150 MW is technical minimum of the 500 MW total capacity of the unit) U-7: 100% of ex-bus allocation U-8: 100% of ex-bus allocation Hydro: 0% of ex-bus allocation
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BEST submitted that the peak load component of the supply has been derived by subtracting the base load component derived above from the ex-bus allocation. BEST submitted that on the basis of above computations, of total ex-bus allocation of 954 MW from TPC-G for BEST, 499 MW has been derived as base component and 455 MW as peak component. BEST submitted that the Additional Purchase during peak time denotes the peak components of supplies contracted for meeting the Peak component of system peak load, which includes 455 MW derived above from TPC-G and the other capacities procured from RE sources, Bilateral and IEX/PXIL. BEST submitted that based on above, it has computed Supply Availability as follows: Base load Supply Availability = Base Load Contracted Capacity / Base Load Peak Load Supply Availability = Peak Contracted Capacity / Peak component of system peak load Overall Supply Availability = 75% x Base load Supply Availability + 25% x Peak Load Supply Availability It is observed that BEST has computed Supply Availability reasonably correctly, except that it has considered Unit 6 also as base load supply and short term power purchases under peak load contracted capacity. However, the Commission is of the view that Unit 6 cannot be considered under base load capacity, since, it is effectively a standby Unit in FY 2013-14 and FY 2014-15, and also, short-term power purchase cannot be considered under contracted peak-load capacity. The detailed reasoning and the Commissions ruling on the same is discussed in the following paragraphs. For the purpose of computing the Supply Availability, the Commission has considered ex-bus contracted capacity from Unit 5, Unit 7 and Unit 8 as base load capacity, since these are coalthermal stations and cannot be ramped up and down quickly. However, since, hydro generating stations are supposed to be peak power stations, the Commission has considered contracted capacity from hydro stations as peak load capacity. Also, TPC-G has been using Unit 4 as a standby Unit and hence, the same cannot be included under base load capacity. Further, as Unit 6 uses Oil and Gas as fuel its energy charges are very high resulting in a lower ranking in MOD stack because of which the Commission has considered the same under Peak load contracted capacity. Also, since Wind and Solar power are infirm sources of power, the same has to be considered in contracted Peak Capacity. Therefore, the Commission has considered ex bus
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contracted capacity from Unit 4, Unit 6 and Hydro, contracted capacity from RE power excluding Power from Imbalance Pool as Peak power. Further, the Commission has reduced the normative auxiliary consumption, while considering the capacity available to meet the Base Load and Peak Load. As regards short term power purchase the Commission has not considered the same as contracted capacity since, power purchase from exchanges are not contracted power in nature rather it is the power purchased on the basis of demand and is purchased only as and when there is an additional requirement to be met. In reply to the Commissions query on details of base load and peak load BEST submitted the month-wise base load and peak load supply data for FY 2011-12 and FY 2012-13. To compute the base load and peak load for the remaining Control Period, the Commission has considered ratio of FY 2012-13 base load to total peak load. For the purpose of present MYT Order, the Commission has not computed the Supply Availability for the entire Control Period. However, for the purpose of better understanding, the Commission has explained the correct methodology to be adopted by the Distribution Licensee in future for computing Supply Availability, as shown in the following illustration: Table: Supply Availability for the Control Period as projected by the Commission Particulars Base Load Supply Availability Actual Contracted Base Load Supply (MW) Base Load (MW) Base Load Supply Availability (%) Peak Load Supply Availability Actual Contracted Peak Load Supply (MW) Peak Load (MW) Peak Load Supply Availability (%) Supply Availability (%) d e f=de (0.75*c + 0.25*f) 355.75 217.21 163.78% 97.59% a b c=ab 530.30 702.09 75.53% Details FY 2012-13
In the above illustration, the actual Base Load considered is the minimum load in FY 2012-13 obtained from the monthly base load and peak load submitted by BEST. Similarly, for the computation of actual Peak load, the Commission has considered the maximum Load that occurred in FY 2012-13.
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It is clarified that the above illustration is solely for the purpose of reference for future and BEST should follow similar approach while submitting its Petition for Mid-Term Performance Review or Truing up at the end of the Control Period. Further, the Commission is of the view that in Mumbai Supply Area, load shedding is not done, and the Distribution Licensees have been allowed to purchase high cost power to avoid load shedding in extreme cases, and in such a scenario BEST must have Supply Availability of 100% during the Control Period. Any incentive/disincentive for achieving Supply Availability above/below the targeted Supply Availability shall be considered at the time of Truing-up. Further, based on the data and computations submitted by BEST there are certain observations of the Commission based on which BEST has to revisit its projections and submit the desired information correctly during the time of mid-term performance review. The observations of the Commission are discussed in following paragraphs. Firstly, from the base load and peak load data submitted by BEST, it is observed that the base load at T < > D interface and G < > T interface, ranges from 229 MW- 407 MW for FY 2012-13, while for computation of Supply Availability in Form F13, BEST has considered Base load of 546.95 MW. Also, the minimum base load requirement as per BESTs submission is 229 MW, which appears too low and therefore, the Commission directs BEST to revisit the base load and peak data submitted by it and accordingly revise its submission during the mid-term performance review. Secondly, the contracted capacity of BEST is lower than the demand projected for the Control Period. Although, the Commission has for the purpose of computation of power purchase cost considered the balance power to be purchased from short term sources as detailed in earlier paragraphs of this Section, considering the Supply Availability projections made by BEST, it is evident that the present contracted capacity alone cannot meet BESTs demand and may result in load shedding which is not allowed. In view of the above, the Commission directs BEST to arrange for more contracted capacity and reduce its dependence on un-contracted power to meet its demand.
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5.14 RECOVERY OF INCREMENTAL REVENUE GAP FOR FY 2011-12 BEST submitted that actual Revenue gap for FY 2010-11 and FY 2011-12, has been determined as follows: Table: Revenue gap for FY2011-12 submitted by BEST (Rs. Crore) Sl. No. 1 2 3 Particulars Revenue Gap of FY 2010-11 (audited) Revenue Gap of FY 2011-12 (audited) (excl. regulatory Assets of Rs. 300 Crore) Total Revenue Gap/ (Surplus) Amount (Rs. Crore) 612.49 607.01 1219.50
BEST submitted that there is an additional revenue gap of Rs 1219.50 Crore for FY 2011-12, which has primarily risen on account of revision of Tariff after the financial year was completed, and therefore, the impact of Tariff revision could not materialize during the financial year. BEST has proposed to recover the additional gap in three equal instalments starting from FY 2013-14, along with the carrying cost, as tabulated below:
Table: Recovery of Incremental Revenue Gap for FY 2011-12 submitted by BEST (Rs. Crore) Sl. No. 1 2 3 4 5 6 7 FY 2012-13 Opening Balance 1 1219.50 Recovery During the Year 2 0.00 Closing Balance 3=1-2 1219.50 Average Balance 4=Average(1,3) 1219.50 Interest Rate 5 14.62% Carrying Cost 6=4*5 178.29 Recovery including 7=2+6 178.29 Carrying Cost Particulars Notation FY FY 2013-14 2014-15 1219.50 813.00 406.50 406.50 813.00 406.50 1016.25 609.75 14.62% 14.62% 148.58 89.15 555.08 495.65 FY 2015-16 406.50 406.50 0.00 203.25 14.62% 29.72 436.22
The Commission has approved Revenue gap for FY 2010-11 and FY 2011-12 in Section 3 and Section 4 respectively of this MYT Order, as summarized below:
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Table: Revenue gap for FY 2010-11 and FY 2011-12 along with carrying cost approved by the Commission (Rs. Crore) Sr. No. 1 2 3 4 5 6 7 8 Particulars Revenue Gap of FY 2010-11 Carrying Cost for FY 2011-12 (14.39%) Carrying Cost for FY 2012-13 (14.62%) Total amounts recoverable (including carrying cost) =1+2+3 (Gap)/Surplus of BEST for FY 2011-12 Carrying Cost for FY 2012-13 for gap of FY 2011-12 (14.62%) Total Amount Recoverable for FY 2011-12 including carrying cost =5+6 Total Amount Recoverable for BEST =4+7 Approved by the Commission 589.33 84.80 86.16 760.29 559.34 81.78 641.12 1401.42
BEST has included the recovery of additional Revenue Gap along with carrying cost as part of ARR of the respective years of the Control Period. However, the Commission has considered the recovery of additional revenue gap of FY 2010-11 and FY 2011-12 separately as discussed in subsequent paragraphs.
5.15 RECOVERY OF REGULATORY ASSETS WITH CARRYING COST BEST submitted that the Commission in its Order dated May 16, 2012 in Case No. 171 of 2011 had approved Regulatory Assets of Rs. 300 Crore to be recovered in FY 2012-13, along with carrying cost. BEST further submitted that the Commission vide its MYT Business Plan Order dated 15 January, 2013 in Case No. 124 of 2011 had directed BEST to recover the entire amount in one year. BEST submitted that since, FY 2012-13 is almost over, it proposes to recover the entire amount of Rs. 300 Crore in FY 2013-14. The recovery of Regulatory Assets approved in Case No. 171 of 2011, to be recovered in FY 2013-14 with carrying cost, as submitted by BEST is shown in the table below:
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Table: Recovery of Regulatory Assets approved in Case No. 171 of 2011 as submitted by BEST (Rs. Crore) Particulars Opening Balance Recovery During the Year Closing Balance Average Balance Interest Rate Carrying Cost Recovery including Carrying Cost Notation 1 2 3=1-2 4=Average (1,3) 5 6=4*5 7=2+6 FY 2012-13 300.00 0.00 300.00 300.00 14.62% 43.86 43.86 FY 2013-14 300.00 300.00 0.00 150.00 14.62% 21.93 321.93
The Commission has noted BESTs submission in this regards. However, the Commission has not included recovery of Regulatory Assets in the ARR of FY 2013-14, but has allowed recovery of the same along with the recovery of all past period revenue gaps including Transport Business deficit of previous years, by spreading the combined amount of past period revenue gaps over the remaining years of the Control Period, as detailed in subsequent paragraphs of this Section. 5.16 IMPACT OF THE COMMISSIONS ORDER IN CASE NO 62 OF 2012 BEST submitted that it in its True Up Petition for FY 2010-11 it has included the impact of allowance of Rs 64.99 Crore (along with Carrying Cost), as approved by the Commission (Case No. 62 of 2012), under several ARR heads, for the period from FY 2008-09 to FY 2010-11 and therefore, the same has not been included in the MYT Petition. BEST further submitted that out of the approved amount of Rs. 64.99 Crore, Rs. 24.43 Crore has been included in the True-up Petition of FY 2011-12 and Rs. 40.26 Crore has been added to the ARR of FY 2010-11. The Commission has noted BESTs submission in this regard and the same has already been considered by the Commission while doing the Truing up of FY 2010-11 and FY 2011-12 as discussed in Section 3 and Section 4, respectively, of this Order. 5.17 TRANSPORT DEFICIT BEST submitted that on 8 February, 2011, the matter of Civil Appeal No. 848 of 2007 between the Municipal Corporation of Greater Mumbai (MCGM) (the Appellant) and the Commission and others was called for hearing in the Honble Supreme Court of India. BEST further
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submitted that Appeal was filed against the impugned Judgment and Order dated 18 August, 2006 of the Honble ATE and is concerned with Section 51 of the Electricity Act 2003. BEST submitted that the Judgment pronounced by the Honble Supreme Court on 8 February, 2011 states as follows: Undisputedly the appellant was engaged inter alia in the business of distribution of electricity prior to the commencement of the Act. In our opinion it would not be correct to hold that despite the third proviso to Section 51 of the Act, the distribution licensee must not only maintain separate accounts for each of its businesses but must also ensure that the electricity distribution business should not subsidize the other business undertakings. Hence the view of the Tribunal in paragraphs 56 and 57 of its order is not correct. In our opinion in view of the third proviso to Section 51 of the Act a certain limited electricity distribution licensees are exempt from the operation of the Section insofar as the requirement of prior intimation to the commission or the obligations of the first and second proviso are concerned. The appellant is admittedly doing business of transport besides electricity distribution for several decades. On the facts of the case, we are of the opinion that the third proviso to Section 51 of the Act applies and hence the impugned judgment and order cannot be sustained. The appeal is allowed. The impugned judgment and order is set aside. BEST submitted that the Commission in its Order dated 16 March, 2012 in the matter of True-up for FY 2009-10 and Provisional true-up for FY 2010-11 in Case No. 125 of 2011 and in the matter of approval of ARR and determination of tariff for FY 2011-12 Case No. 171 of 2011, had approved the inclusion of Transport deficit to the extent of reduction in Return on Equity and Return on Internal Funds (ROIF) payable for the year. BEST submitted that the net amount allowed by the Commission towards Transport Division deficits (net of RoE and RoIF) for the period from FY 2004-05 to FY 2008-09, FY 2009-10 to FY 2011-12 and MYT period FY 2012-13 to FY 2015-16 and actual recoveries/proposed recoveries during the same period is as shown below:
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Table: Transport Deficit till date and Proposed Recovery submitted by BEST (Rs. Crore) Transport deficit net of RoE & RoIF (Rs. Crore) 1187.71 400.53 279.59 264.05 273.03 260.21 228.08 0.00 2893.19 Recovery through TDLR (Rs. Crore) 0.00 0.00 0.00 0.00 496.95 727.17 772.47 823.32 2819.89 Average TDLR (Rs/kWh) 0.00 0.00 0.00 0.00 1.14 1.54 1.54 1.54
Sl. No.
Period FY 2004-05 to FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 Total
MERC Order
1 2 3 4 5 6 7 8 9
Case No. 80 of 2012 Case No. 125 of 2011 Actual Audited Actual Audited Provisional Case No. 124 of 2011 Case No. 124 of 2011 Case No. 124 of 2011
BEST submitted that although the transport deficit approved by the Commission from FY 200405 to FY 2015-16 has been calculated as Rs 2893.19 Crore, however, it is proposing to recover Rs. 2819.89 Crore only during the Control Period with present average TDLR charge of Rs 1.54 per unit. BEST further submitted that the unrecovered amount at the end of the MYT Control Period works out as Rs. 73.30 Crore. BEST submitted that the existing category-wise TDLR is required to be continued for the second Control Period as shown below: Table: Category-wise TDLR for FY 2012-13 to FY 2015-16 as submitted by BEST (Rs. /kWh) SL. Tariff Category NO. LT Category 1 BPL 2 LT-I 3 4 5 6 LT-II (a) 7 8 LT-II (b) 9 LT-II (c) 10 11 12 LT-III LT-IV (a) Slabs 0-30 0-100 101-300 301-500 > 500 0-500 > 500 all units all units 0-500 > 500 all units TDLR (Rs/kWh) 0.12 0.55 1.03 1.44 1.85 1.48 2.20 2.15 2.18 1.40 1.96 1.75 Page 193 of 308
SL. Tariff Category NO. 13 LT-IV (b) 14 LT-V 15 LT-VI 16 LT-VII (a) 17 LT-VII (b) 18 LT-VIII 19 LT-IX (a) 20 LT-IX (b) HT Category 21 HT-I 22 HT-II 23 HT-III 24 HT-IV 25 HT-V Average
Slabs all units all units all units all units all units all units all units all units all units all units all units all units all units
TDLR (Rs/kWh) 1.72 3.16 1.52 0.87 2.53 0.83 1.83 1.83 1.59 1.71 0.91 2.33 1.51 1.54
The total transport deficit to be recovered during the Control Period as submitted by BEST is as follows: Table: Transport Deficit submitted by BEST (Rs. Crore) Parameters Deficit/Surplus for the year RoE & RoIF for the year Transport Division Deficit(Net of RoE & RoIF) Transport Division deficit FY 2004-05 to FY 2008-09 Total Recovery Towards Transport Division Deficit FY 2012-13 406.71 133.68 273.03 0.00 273.03 FY 2013- 14 405.89 145.69 260.21 395.91 656.12 FY 2014-15 387.44 159.36 228.08 395.91 623.99 FY 2015-16 152.16 173.28 0.00 395.91 395.91
The Commission has included Transport Deficit net of RoE and ROIF in the ARR of each year of the Control Period as shown in the following table:
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Table: Transport Deficit computed by the Commission (Rs. Crore) Parameters Deficit/Surplus for the year RoE & RoIF for the year Transport Division Deficit (Net of RoE and RoIF) FY 2012-13 406.71 132.91 273.80 FY 2013- 14 405.89 144.92 260.98 FY 2014-15 387.44 158.58 228.85 FY 2015-16 152.16 172.50 (20.34)
Further, it is clarified that the Commission shall consider the actual deficit as per audited accounts of BEST during Mid-term review for the respective years. As regards the recovery of past period transport deficit, i.e., from FY 2005 to FY 2009, approved by the Commission in its Order dated 16 December, 2012 in Case No. 80 of 2012, the Commission has considered it separately as discussed in subsequent paragraphs of this Section. 5.18 AGGREGATE REVENUE REQUIREMENT FOR THE CONTROL PERIOD The Aggregate Revenue Requirement for the Control Period as submitted by BEST is shown in the Table below: Table: ARR Summary for the Control Period as submitted by BEST (Rs. Crore) Sl. No. 1 2 3 4 5 6 7 8 9 10 11 Particulars Power Purchase Expenses Operation & Maintenance Expenses Depreciation Interest on Long-term Loan Capital Interest on Working Capital Interest on Consumer Deposit Bad Debts Written off Other Expenses Contribution to contingency reserves Incentive for reduction of distribution loss Total Revenue Expenditure FY 2012-13 (Provisional) 2881.14 424.86 94.73 23.63 21.89 21.41 5.71 81.26 4.62 0.00 3559.25 FY 2013-14 FY 2014-15 4199.19 454.23 105.90 15.59 31.50 22.06 5.71 81.26 5.17 0.00 4920.60 3950.82 490.68 119.45 25.62 49.44 22.72 5.71 81.26 5.84 0.00 4751.54 FY 2015-16 3389.59 530.45 133.81 34.56 73.60 23.40 5.71 81.26 6.55 0.00 4278.93
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Sl. No. 12 13 14 15 16
Particulars Return on Equity Capital Return as Interest on Internal Funds Aggregate Revenue Requirement Less: Non-Tariff Income Less: Income from Other Business Recovery of Regulatory Assets as approved in Case No. 171 of 2011 (with carrying cost) Add: Revenue Gap FY 2011-12 (Incremental over Commission approved Regulatory Asset) (with carrying cost) Total Aggregate Revenue Requirement Deficit of Transport operations (04-05 to 0809) and individual years Aggregate Revenue Requirement, including deficit in Transport operations ARR proposed to be recovered through tariff ACOS (Rs./kWh)
FY 2012-13 (Provisional) 128.40 5.28 3692.93 56.34 0.00
FY 2013-14 FY 2014-15 140.41 5.28 5066.28 61.97 0.00 154.08 5.28 4910.90 68.17 0.00
FY 2015-16 168.00 5.28 4452.21 74.99 0.00
17
43.86
321.93
0.00
0.00
18
178.29
555.08
495.65
436.22
19 20
3858.74 273.03
5881.32 656.12
5338.37 623.99
4813.44 395.91
21
4131.77
6537.43
5962.36
5209.35
22 23
3557.59 8.17
4643.14 9.82
5289.38 10.54
6037.26 11.31
BEST submitted that the ACOS for FY 2012-13 to FY 2015-16 has been calculated by considering the ARR proposed to be recovered during each of the respective years. BEST requested the Commission to approve the above ARR for the Control Period. Based on the analysis detailed in previous paragraphs of this MYT Order, the Commission has approved the ARR for BEST for the second Control Period from FY 2012-13 to FY 2015-16, as summarised in the Tables below:
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Table: ARR approved by the Commission for the Control Period (Rs. Crore) Sl. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 FY 2012-13 (Provisional) 2886.73 406.87 94.43 13.64 29.44 21.41 0.00 81.26 4.60 3538.38 127.63 5.28 3671.29 62.51 0.00 3608.78 273.80 3882.57 FY 2013-14 2987.39 434.40 105.61 23.31 31.02 22.06 0.00 81.26 5.15 3690.18 139.64 5.28 3835.10 68.50 0.00 3766.59 260.98 4027.57 FY 2014-15 3209.67 474.34 119.33 33.62 34.17 22.72 0.00 81.26 5.82 3980.92 153.30 5.28 4139.51 75.11 0.00 4064.40 228.85 4293.25 FY 2015-16 3452.78 518.54 133.69 42.81 32.33 23.40 0.00 81.26 6.53 4291.35 167.22 5.28 4463.86 82.39 0.00 4381.47 (20.34) 4361.12
Particulars
Power Purchase Expenses Operation & Maintenance Expenses Depreciation Interest on Long-term Loan Capital Interest on Working Capital Interest on Consumer Deposit Bad Debts Written off Other Expenses Contribution to contingency reserves Total Revenue Expenditure Return on Equity Capital Return as Interest on Internal Funds Aggregate Revenue Requirement Less: Non-Tariff Income Less: Income from Other Business Total Aggregate Revenue Requirement Deficit of Transport operations Net Aggregate Revenue Requirement
The variation between the ARR approved by the Commission for the second Control Period from FY 2012-13 to FY 2015-16 and that petitioned by BEST is primarily due to the following reasons: a. Variation in sales projections based on actual sales in FY 2012-13. b. Reduction in Power purchase quantum and cost due to variation in sales, lower distribution losses considered by the Commission, and reduction in quantum of power purchase from TPC-G, which has been replaced by purchase from cheaper short-term sources of power. c. Variation in capitalisation. d. Reduction in interest expenses on long term loans due to revised interest rate considered by the Commission for the Control Period.
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e. Recovery of Revenue Gap of FY 2010-11 and FY 2011-12 has been considered separately and not included in the above ARR for the Control Period. f. Recovery of Regulatory Assets and Recovery of Transport Deficit of FY 2004-05 to FY 2008-09 as a separate head. g. Past recoveries pertaining to TPC-G has been considered separately. 5.19 ARR INCLUDING PAST RECOVERIES 5.19.1 PAST RECOVERIES INCLUDING REVENUE (GAP)/SURPLUS FOR FY 201011 AND FY 2011-12 BEST has included all the past recoveries in the ARR. However, as mentioned in earlier paragraphs the Commission has allowed all the past recoveries as a separate head to be included in the ARR. The details of past period recoveries including the carrying costs, as and approved by the Commission as discussed in above Sections are shown in the Table below: Table: Past Recoveries including carrying cost (Rs. Crore) Approved by the Commission 589.33 84.80 86.16 760.29 559.34 81.78 641.12 1401.42 300 43.86 343.86 1187.71 304.15 3237.14 Page 198 of 308
Particulars Revenue Gap of FY 2010-11 Carrying Cost for FY 2011-12 Carrying Cost for FY 2012-13 Total amounts recoverable (including carrying cost) (Gap)/Surplus of BEST for FY 2011-12 Carrying Cost for FY 2012-13 for gap of FY 2011-12 Total Amount Recoverable for gap of FY 2011-12 8=5+6 including carrying cost Total Amount Recoverable pertaining to Revenue 9=4+8 Gap of FY 2010-11 and FY 2011-12 Regulatory Assets as per Order dated 16 May, 2012 in 10 Case No. 171 of 2011 11 Carrying Cost for FY 2012-13 12=10+11 Total regulatory assets including carrying cost 13 Transport Deficit for FY 2004-05 to FY 2008-09 14 Past Recovery of TPC-G including carrying cost 15=9+12+ Total Recoverable Amount 13+14
Sr. No. 1 2 3 4=1+2+3 5 6
14.39% 14.62%
14.62%
14.62%
5.19.2 REVENUE (GAP)/SURPLUS OF FY 2012-13 BEST, in its Petition has not computed Net (Gap)/Surplus for FY 2012-13. However, since, FY 2012-13 is already over, the Commission has projected the Revenue Gap for FY 2012-13 based on the approved ARR for FY 2012-13 and the projected revenue for FY 2012-13. The Commission, in the earlier paragraphs of this Section of the Order, has approved the ARR for FY 2012-13 as Rs.3882.57 Crore and the total revenue from existing tariff for FY 2012-13 works out to Rs.3610.73 Crore. Accordingly, the Commission has arrived at a Net Revenue Gap of Rs. 271.85 Crore to be recovered during the Control Period. The tabulation for the same is provided as under: Table: Revenue (Gap)/ Surplus for FY 2012-13 (Rs. Crore) Sr. No. 1 2 3 Particulars ARR for FY 2012-13 Revenue at existing Tariff Revenue (Gap)/Surplus Amount 3882.57 3610.73 (271.85)
Thus, the Commission has approved a total amount of Rs. 3508.98 Crore pertaining to revenue gap of FY 2010-11, FY 2011-12 and FY 2012-13, Regulatory Assets, Transport Deficit for FY 2004-05 to FY 2008-09 and past recoveries of TPC-G including carrying cost. The amount to be recovered is quite large and therefore, the Commission has spread the same into three equal instalments of Rs. 1169.66 Crore to be recovered each year starting from FY 2013-14 to FY 2015-16. The Commission has further computed the carrying cost on the average recovery during each year as shown in the following Table: Table: Amount to be recovered during the Control Period (Rs. Crore) Particulars Past Recoveries Opening Balance Recovery Closing Balance Average Balance Interest Rate Carrying Cost Formula FY 2013-14 3508.98 1169.66 2339.32 2924.15 14.62% 427.51 FY 2014-15 2339.32 1169.66 1169.66 1754.49 14.62% 256.51 FY 2015-16 1169.66 1169.66 0.00 584.83 14.62% 85.50
1 2 3= 1-2 4= Average (1 and 3) 5 6=4*5
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Particulars Recovery including carrying cost
Formula 7=2+6
FY 2013-14 1597.17
FY 2014-15 1426.17
FY 2015-16 1255.16
The summary of the revenue (gap)/surplus approved by the Commission and total ARR to be considered for subsequent years is tabulated below: Table: ARR including Past Period Recovery approved by the Commission (Rs. Crore) Particulars Net Aggregate Revenue Requirement Past Recoveries of BEST including Revenue Gap of FY 2012-13 along with carrying cost Total ARR including Regulatory Asset Recovery FY 2012-13 3882.57 FY 2013-14 4027.57 FY 2014-15 4293.25 FY 2015-16 4361.12
1597.17 3882.57 5624.75
1426.17 5719.42
1255.16 5616.29
The Commission has approved the tariff for the Control Period in order to recover the above determined ARR and Revenue Gaps, as discussed in detail in the next Section.
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6 Tariff Philosophy and Category-wise Tariffs Proposal for the Control Period from FY 2013-14 to FY 2015-16
6.1 APPLICABILITY OF REVISED TARIFFS
The revised tariffs will be applicable from 1 September, 2013 onwards during the Control Period from FY 2013-14 to FY 2015-16. The Commission has determined the category-wise tariffs applicable for FY 2013-14 (from 1 September, 2013 to 31 March, 2014), FY 2014-15, and FY 2015-16 in this Order. In cases, where there is a billing cycle difference for a consumer with respect to the date of applicability of the revised tariffs, then the revised tariff should be made applicable on a pro-rata basis for the consumption. The bills for the respective periods as per existing tariff and revised tariffs shall be calculated based on the pro-rata consumption (units consumed during respective period arrived at on the basis of average unit consumption per day multiplied by number of days in the respective period falling under the billing cycle). 6.2 BESTS TARIFF PROPOSAL
In Section 5 of this Order, the revenue requirement projected by BEST and revenue requirement approved by the Commission for BEST for the Control Period have been elaborated. BEST has proposed change in category-wise tariffs over the years of the Control Period to partly recover this revenue gap. 6.2.1 Revenue to be recovered from Tariffs The total revenue to be recovered from the tariffs over the Control Period has been projected by BEST as summarized below: Table: Revenue to be recovered from tariffs during the Control Period as submitted by BEST (Rs. Crore) Sl. No. 1 2 3 Particulars ARR of supply business Proposed recovery of Transport deficit Total revenue to be recovered from tariffs FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 3858.74 5881.32 5338.37 4813.44 273.03 4131.77 656.12 6537.43 623.99 5962.36 395.91 5209.35
BEST submitted that the total revenue to be recovered from tariffs is essentially the sum of ARR of the Supply Business and revenue recovery towards Transport deficit. The detailed plan to
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recover the above revenue requirement as submitted by BEST is discussed in the following paragraphs.
6.2.2 BESTs Tariff Philosophy BEST submitted that the revenue requirement as derived in the above Table includes both revenue requirement of the Electricity Supply Business and the deficit arising out of the Transport Business, therefore, the tariffs proposed by BEST in the MYT Petition have been targeted towards recovering the overall revenue requirement. BEST further submitted that it has maintained the philosophy adopted by the Commission in its Order dated 16 May, 2012 in Case No. 171 of 2011 of specifying a separate charge [Transport Deficit Loss Recovery (TDLR) charge] for recovering the Transport deficit. BEST submitted that while proposing the base tariffs (energy charge, fixed charge and demand charge to be levied on monthly basis), it has kept in mind the revenue being recovered from consumers through FAC charge and TDLR charge. BEST submitted that it has ensured that the overall revenue recovered from consumers through base tariffs, FAC charge and TDLR charge does not cause a tariff shock to the consumers. BEST submitted that for FY 2012-13, it has estimated the revenues based on 10-months actual data. BEST added that for the remaining two months, revenue figures have been estimated based on the sales figures projected on pro-rata basis. BEST further submitted that since FY 2012-13 is already over, hence, it has not proposed any tariff hike for FY 2012-13 and has continued with the existing tariff of FY 2011-12.
6.2.3 Tariff Proposed by BEST BEST submitted that vide its Order dated 16 May, 2012 in Case No. 171 of 2011, while deciding the fixed/demand charges the Commission had observed as follows: As regards BEST's request to increase the fixed charges/demand charges applicable for different consumer categories by around 50% over the exiting level, the Commission has analysed the recovery of the fixed costs of BEST through the fixed/demand charges. It needs to be understood that all the ARR components, except the variable cost of power purchase, are fixed in nature. Out of the ARR of Rs. 3385 crore approved for recovery, the fixed cost component amounts to around Rs. 1519 crore. However, in case of BEST,
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the recovery of fixed costs through the existing Fixed/Demand Charges is very low, at around 12%. Normally, the Licensee should recover at least 30-40% of its fixed costs through the fixed charges, so that it is assured of stability of revenue irrespective of the consumption, and the consumer also pays for the costs in line with the nature of the costs. However, it is not appropriate to increase the fixed/demand charges steeply, hence, the Commission has decided to gradually increase the fixed/demand charges to achieve the overall objective enumerated above. Hence, in this Order, the Commission has increased the fixed/demand charges for all categories, such that the recovery of fixed costs through the fixed charges is increased, to around 15.7%. BEST submitted that in line with the above observation of the Commission, it has proposed to progressively enhance fixed/demand charges for all categories. BEST submitted that an increase in fixed/ demand charge has been proposed for all categories especially Commercial category and HT categories consumers. BEST submitted that it has been investing significantly for the last few years to extend and upgrade its networks to facilitate uninterrupted supply and maintain high reliability of service. BEST submitted that the main beneficiaries of such investments are Commercial and HT consumers, hence, the proposed increase in fixed/demand charges are more for these consumer categories. BEST further submitted that the fixed charges paid to the generators and transmission companies have increased significantly and because these costs are uncontrollable in nature, there is no option but to increase fixed/demand charges for all the categories. BEST submitted that the domestic consumers use electricity only for their subsistence whereas Commercial category consumers use electricity for the purpose of profit making. BEST added that such commercial consumers include malls, multiplexes, shops, etc., which are typical power guzzlers and the cost of power consumed by these establishments is ultimately being passed on to their customers. BEST submitted that the consumption by Residential category consumers is generally during the off-peak period when costly generation is not being utilised; hence, the domestic consumers consumption utilises the low cost power in the MOD stack whereas consumption of Commercial consumers is more during peak hours and adds to the requirement of costly power. BEST added that in view of the above, it is evident that Commercial category consumption leads to higher ACOS and therefore it is reasonable that these consumers should subsidise the domestic consumers by paying for actual ACOS arising out of the commercial use.
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BEST submitted that this will help in mitigating to some extent the discrimination towards domestic consumers in the Tariff Policy as per which domestic consumers pay at 100% ABR/ACOS ratio which also includes paying for commercial consumption. BEST submitted that as against this, commercial establishments pay only 20% more (ABR/ACOS = 120%). BEST submitted that this will further give fillip to DSM measures being adopted by commercial consumers and help them to reduce their power consumption and also give rise to certain new concepts like Demand Response mechanism, which is being implemented in countries like Singapore. BEST submitted that such arrangements will benefit both the consumer as well as the Utility. The tariff proposed for all years of the Control Period as submitted by BEST is shown in the following Tables: Table: Tariff proposed by BEST for FY 2013-14 FY 13-14 Components of tariff Demand Total Energy Charge TDLR Variable Charge (Rs./ (Rs. / Charge (Rs. / kVA / kWh) (Rs. / kWh) month) kWh) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 300.00 300.00 0.00 0.00 300.00 300.00 0.00 300.00 0.00 0.53 2.78 5.14 7.24 8.92 7.43 10.20 10.00 10.52 7.03 9.46 8.48 8.63 16.45 7.92 4.36 0.12 0.55 1.03 1.44 1.85 1.48 2.20 2.15 2.18 1.40 1.96 1.75 1.72 3.16 1.52 0.87 0.65 3.33 6.17 8.68 10.77 8.91 12.40 12.15 12.70 8.43 11.42 10.23 10.35 19.61 9.44 5.23
Sl. No.
Tariff Category
Slabs
FC (Rs./ connection / month)
LT Category 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
BPL LT-I
LT-II(a) LT-II(b) LT-II(c) LT-III LT-IV(a) LT-IV(b) LT-V LT-VI LT-VII(a)
0-30 5.00 0-100 50.00 101-300 100.00/150.00 301-500 100.00/150.00 >501 150.00/150.00 0-500 400.00 >500 400.00 all units 0.00 all units 0.00 0-500 400.00 >500 600.00 all units 0.00 all units 0.00 all units 500.00 all units 0.00 all units 250.00
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Sl. No.
Tariff Category
Slabs
FC (Rs./ connection / month) 250.00 250.00 350.00 0.00 0.00 0.00 0.00 400.00 0.00
17 18 19 20 HT Category 21 22 23 24 25
LT-VII(b) LT-VIII LT-IX(a) LY-IX(b) HT-I HT-II HT-III HT-IV HT-V
all units all units all units all units all units all units all units all units all units
FY 13-14 Components of tariff Demand Total Energy Charge TDLR Variable Charge (Rs./ (Rs. / Charge (Rs. / kVA / kWh) (Rs. / kWh) month) kWh) 0.00 14.09 2.53 16.62 0.00 4.34 0.83 5.17 0.00 9.18 1.83 11.01 300.00 9.18 1.83 11.01 300.00 300.00 300.00 0.00 300.00 7.97 7.94 5.78 11.25 7.28 1.59 1.71 0.91 2.33 1.51 9.56 9.65 6.69 13.58 8.79
Table: Tariff proposed by BEST for FY 2014-15 FY 14-15 Components of tariff Tariff Category Slabs FC (Rs./ connection / month) Demand Charge (Rs./ kVA / month) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 400.00 400.00 0.00 0.00 400.00 400.00 0.00 Energy TDLR Charge (Rs. (Rs. / / kWh) kWh) Total Variable Charge (Rs. / kWh) 0.65 3.61 6.69 8.89 11.21 10.39 12.91 12.65 13.22 9.14 11.90 11.07 11.21 21.26
LT Category BPL LT-I
LT-II(a) LT-II(b) LT-II(c) LT-III LT-IV(a) LT-IV(b) LT-V
0-30 5.00 0-100 50.00 101-300 100.00/150.00 301-500 100.00/150.00 >501 150.00/150.00 0-500 500.00 >500 500.00 all units 0.00 all units 0.00 0-500 500.00 >500 700.00 all units 0.00 all units 0.00 all units 600.00
0.53 3.06 5.66 7.45 9.36 8.91 10.71 10.50 11.04 7.74 9.94 9.32 9.49 18.10
0.12 0.55 1.03 1.44 1.85 1.48 2.20 2.15 2.18 1.40 1.96 1.75 1.72 3.16
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FY 14-15 Components of tariff Tariff Category Slabs FC (Rs./ connection / month) 0.00 350.00 350.00 350.00 400.00 0.00 0.00 0.00 0.00 500.00 0.00 Demand Charge (Rs./ kVA / month) 400.00 0.00 0.00 0.00 0.00 400.00 400.00 400.00 400.00 0.00 400.00 Energy TDLR Charge (Rs. (Rs. / / kWh) kWh) 8.72 4.80 15.49 4.77 10.10 10.10 7.97 7.94 6.94 11.81 8.01 1.52 0.87 2.53 0.83 1.83 1.83 1.59 1.71 0.91 2.33 1.51 Total Variable Charge (Rs. / kWh) 10.24 5.67 18.02 5.60 11.93 11.93 9.56 9.65 7.85 14.14 9.52
LT-VI LT-VII(a) LT-VII(b) LT-VIII LT-IX(a) LY-IX(b) HT Category HT-I HT-II HT-III HT-IV HT-V
all units all units all units all units all units all units all units all units all units all units all units
Table: Tariff proposed by BEST for FY 2015-16 FY 15-16 Components of tariff Sl. No. Tariff Category Slabs FC (Rs./ connection / month) Demand Charge (Rs./ kVA / month) Energy Charge (Rs. / kWh) TDLR (Rs. / kWh) Total Variable Charge (Rs. / kWh)
LT Category 1 2 3 4 5 6 7 8 9 10 11 12
BPL LT-I
LT-II(a) LT-II(b) LT-II(c) LT-III LT-IV(a)
0-30 5.00 0-100 75.00 101-300 150.00/150.00 301-500 150.00/150.00 >501 200.00/200.00 0-500 600.00 >500 600.00 all units 0.00 all units 0.00 0-500 600.00 >500 800.00 all units 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 500.00 500.00 0.00 0.00 500.00
0.58 3.37 6.22 8.20 9.83 9.80 11.25 10.50 11.04 8.90 10.93 9.79
0.12 0.55 1.03 1.44 1.85 1.48 2.20 2.15 2.18 1.40 1.96 1.75
0.70 3.92 7.25 9.64 11.68 11.28 13.45 12.65 13.22 10.30 12.89 11.54
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FY 15-16 Components of tariff Sl. No. Tariff Category Slabs FC (Rs./ connection / month) 0.00 700.00 0.00 500.00 500.00 500.00 500.00 0.00 Demand Charge (Rs./ kVA / month) 500.00 0.00 600.00 0.00 0.00 0.00 0.00 500.00 Energy Charge (Rs. / kWh) 9.96 19.90 9.59 5.76 17.04 5.25 11.11 11.11 TDLR (Rs. / kWh) 1.72 3.16 1.52 0.87 2.53 0.83 1.83 1.83 Total Variable Charge (Rs. / kWh) 11.68 23.06 11.11 6.63 19.57 6.08 12.94 12.94
13 14 15 16 17 18 19 20 HT Category 21 22 23 24 25
LT-IV(b) LT-V LT-VI LTVII(a) LTVII(b) LT-VIII LT-IX(a) LY-IX(b)
all units all units all units all units all units all units all units all units
HT-I HT-II HT-III HT-IV HT-V
0.00 0.00 0.00 600.00 0.00
500.00 500.00 500.00 0.00 500.00
8.76 8.73 7.63 11.81 8.01
1.59 1.71 0.91 2.33 1.51
10.35 10.44 8.54 14.14 9.52
BEST submitted that the above tariff rates are in accordance with the roadmap suggested by the Commission for reduction of cross subsidy as shown in the Table below: Table: Cross Subsidy Reduction Proposed by BEST Customer Proposed Slabs FY 2012-13 Category LT Category BPL 0-30 8% LT-I 0-100 101-300 Residential 67% 301-500 >501 LT-II (a) 0-500 122% >500 Commercial LT-II (b) all units 139% LT-II (c) all units 140%
FY 201314 7% 36% 70% 93% 112% 118% 132% 134% 140%
FY 201415 7% 36% 70% 88% 108% 129% 129% 132% 138%
FY 201516 7% 38% 73% 90% 105% 133% 126% 126 132%
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Proposed LT Category LT-III LT-IV(a) LT-IV(b) LT-V LT-VI LT-VII(a) LT- VII (b) LT-VIII LT-IX(a) LT-IX(b) HT Category HT-I HT-II HT-III HT-IV HT-V
Customer Category
Slabs 0-500 >500 all units all units all units all units all units all units 0-20 kW > 20 kW
FY 2012-13
FY 201314 99% 122% 118% 115% 217% 106% 53% 170% 53% 112% 122%
FY 201415 102% 119% 122% 118% 220% 109% 54% 172% 54% 113% 125%
FY 201516 107% 120% 122% 117% 223% 115% 59% 175% 55% 115% 129%
113% 115% 112% 206% 101% 100% 153% 51% 114% 119%
Industrial Adv. & Hoarding Street Lighting Temp Religious Temp Others Crematorium Hospital/ Educational Inst Hospital/ Educational Inst
Industry Commercial Group Housing Temp Hospital/ Educational Inst
104% 112% 64% 141% 100%
105% 106% 76% 138% 98%
100% 102% 88% 134% 101%
103% 105% 91% 125% 97%
6.2.4 Revenue at Proposed Tariff and Resultant Revenue Gap BEST submitted that the revenue from base tariff, FAC and TDLR has been computed based on the proposed tariffs. BEST further submitted that it has computed Standalone revenue gap/(surplus) for each year of the Control Period along with the accumulated revenue gap assuming carrying cost at the rate of 14.62%, as shown in the Table below: Table: Revenue to be recovered from tariffs during the Control Period submitted by BEST (Rs. Crore) Sl. No. 1 2 3 Particulars ARR Tariff Revenue from Supply Business TDLR revenue FY 2012-13 4131.77 3060.65 496.95 FY 2013-14 6537.43 3915.97 727.17 FY 2014-15 5962.36 4516.91 772.47 FY 2015-16 5209.35 5213.95 823.32
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Sl. No. 4
Particulars Per unit Revenue through Tariff Per unit YoY growth Add: Expected Revenue through FAC Total Revenue (with FAC) Standalone Yearly revenue Gap/ (Surplus) Accumulated Gap with Carrying cost
FY 2012-13 1.14 3557.59 8.17
5 6 7 8
3557.59 574.17 574.17
FY 2013-14 1.54 4643.14 9.82 20% 551.06 5194.19 1343.24 2001.36
FY 2014-15 1.54 5289.38 10.54 7% 518.46 5807.85 154.52 2448.47
FY 2015-16 1.54 6037.26 11.31 7% 444.81 6482.08 (1272.73) 1533.71
BEST submitted that from the above Table it is evident that the tariffs have been proposed in such a way that it causes minimal tariff shock to consumers and the annual growth for all years are in line with the expected inflation rate (except for FY 2013-14 as no tariff hike is effected/ proposed for FY 2012-13). BEST further submitted that at the end of the Control Period, a gap of Rs. 1533.71 Crore will remain and the same will have to be passed on to the next Control Period with carrying cost. The tariff philosophy adopted by the Commission and the category-wise tariffs approved by the Commission have been elaborated later in this Section.
6.2.5 Security Deposit BEST submitted that Regulation 11.3 of MERC (Electricity Supply Code and Other Conditions of Supply) Regulations, 2005 specifies as under: Where the distribution licensee requires security from a consumer at the time of commencement of service, the amount of such security shall be estimated by the distribution licensee based on the tariff category and contract demand/sanctioned load, load factor, diversity factor and number of working shifts of the consumer. BEST submitted that it is difficult to assess the electricity consumption of various categories of consumer at the stage of commencement of service for calculation of security deposit amount, and therefore, in its Petition in Case No. 90 of 2012 for approval of Schedule of Charges, BEST had submitted the following proposal to collect the security deposit amount from the consumer at the time of commencement of service:
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a) Permanent Connection BEST had proposed to charge security deposit of Rs. 500 per kW for Residential Category consumers and Rs. 1000 per kW for other consumers having permanent connection. b) Temporary Connection BEST submitted that the security deposit for temporary connections is to be estimated by considering the applied load and keeping in view the existing tariff for temporary connections. BEST further submitted that necessary adjustments would be made, if and when there will be any variation in tariff, electricity duty and taxes, etc. BEST had proposed to charge security deposit at Rs. 100/- per kW per day for Religious Temporary Supply category and Rs. 200/- per kW per day for Other Purpose Temporary Supply category. BEST in its Petition had further submitted that it has proposed security deposit amount on kW basis at the commencement of service based on the formula stipulated in the Draft Amendment to MERC (Electricity Supply Code) Regulations, 2005 and has accordingly worked out security deposit amount based on this methodology at existing tariff. BEST submitted that thereafter, in accordance with Supply Code Regulations, the amount of security deposit will be reviewed every year based on actual billing of the consumer and the difference would be demanded/refunded from/to the consumer. BEST submitted that the Commission in its Order dated 28 December, 2012 in Case No. 90 of 2012 gave the following ruling: As clarified in the earlier Order, the Security Deposit against regular payment of energy is a tariff related issue, accordingly, the Commission directs BEST to collect security deposit for regular electricity consumption as per the directives given in the Tariff Order from time to time. Further, BEST is at liberty to submit its proposal in this regard, in its Tariff Petition. BEST submitted that in view of the above, it proposes to collect security deposit from the consumer at the time of commencement of service through Schedule of Electricity Tariff of MYT and further requested the Commission to approve the same. The proposal made by BEST in this regard is shown in the following Table:
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Table: Security Deposit Proposed by BEST Sl. No. 1.1 a b 1.2 a b Security Deposit Permanent supply Residential Consumers (new connection/additional sanctioned load) Other Consumers (new connection/additional sanctioned load) Temporary Supply Religious Supply Other Consumers (new connection/additional sanctioned load) Rs. 100/- per KW or part thereof per day Rs. 200/- per KW or part thereof per day Amount
Rs. 500/- per kW or part thereof Rs. 1000/- per kW or part thereof
Commissions Ruling The Commission is of the view that the Security Deposit amount sought to be recovered by BEST at the time of commencement of service is very high and cannot be accepted. The Security Deposit amount has to be commensurate with the expected monthly billing. Accordingly, the Commission approves the following revised Schedule for collection of Security Deposit amount at the time of commencement of service: Table: Security Deposit approved by the Commission Sl. No. 1.1 A b 1.2 a b Security Deposit Permanent supply Residential Consumers (new connection/additional sanctioned load) Other Consumers (new connection/additional sanctioned load) Temporary Supply Religious Supply Other Consumers (new connection/additional sanctioned load) Rs. 20/- per KW or part thereof per day Rs. 500/- per KW or part thereof Amount
Rs. 200/- per kW or part thereof Rs. 500/- per kW or part thereof
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6.2.6 BESTs Voltage-wise cost of supply BEST submitted that in accordance with the directions given by the Commission, it has carried out an exercise to determine the Voltage-wise cost of supply, considering the Judgment dated 26 July, 2012 given by the Honble ATE. BEST further submitted that the calculation of Voltage-wise average cost of supply is based on bifurcation of the Aggregate Revenue Requirement from FY 2012-13 to FY 2015-16 for each consumer category by dividing each ARR component in the ratio of asset utilized by LT and HT category, respectively. BEST apportioned the total power purchase cost to each consumer category on the basis of category-wise sales and certain assumptions regarding distribution losses and transmission losses. Similarly, the O&M expenses have been apportioned on the basis of number of consumers of applicable consumer category. The voltage-wise break-up of the assets have been used to apportion the asset-related costs such as interest, return on equity, depreciation. The interest on CSD, interest on working capital and other expenses have been apportioned on the basis of ratio of total Sales. BEST submitted that the above calculations are based on certain assumptions and equitable apportioning of various cost components of ARR and it hence does not give the real projections about voltage-wise cost of supply. The practical problem in determining voltage-wise cost of supply involves bifurcation of assets with respect to their use, which is a tough task. It also needs a detailed study of network and to identify tariff-category wise losses, which require dynamic metering at all voltage levels and node points. In this context, the Commission has ensured that the HT tariffs are lower than the LT tariffs for the same category of consumer, as the cost of supply at higher voltage is lower than the cost of supply at lower voltages, due to the lower losses at higher voltages, and the lower network related costs since the electricity does not have to stepped down to lower voltages. In this regard, the Honble APTEL, in its Judgment dated 26 July, 2012 in Appeal No. 13 of 2010, Appeal No. 198 of 2010 and Appeal No. 42 of 2011, ruled as under: 15.4 The issue relating to voltage-wise cost of supply and cross subsidy has been decided in the judgment dated 30.05.2011 in Appeal nos. 102 of 2010 and batch in the matter of Tata Steel Ltd. Vs. Orissa Electricity Regulatory Commission & Another. The relevant extracts of the judgment are reproduced below:22. After cogent reading of all the above provisions of the Act, the Policy and the Regulations we infer the following: Page 212 of 308
... 31. We appreciate that the determination of cost of supply to different categories of consumers is a difficult exercise in view of non-availability of metering data and segregation of the network costs. However, it will not be prudent to wait indefinitely for availability of the entire data and it would be advisable to initiate a simple formulation which could take into account the major cost element to a great extent reflect the cost of supply. There is no need to make distinction between the distribution charges of identical consumers connected at different nodes in the distribution network. It would be adequate to determine the voltage-wise cost of supply taking into account the major cost element which would be applicable to all the categories of consumers connected to the same voltage level at different locations in the distribution system. Since the State Commission has expressed difficulties in determining voltage wise cost of supply, we would like to give necessary directions in this regard. 32. Ideally, the network costs can be split into the partial costs of the different voltage level and the cost of supply at a particular voltage level is the cost at that voltage level and upstream network. However, in the absence of segregated network costs, it would be prudent to work out the voltage-wise cost of supply taking into account the distribution losses at different voltage levels as a first major step in the right direction. As power purchase cost is a major component of the tariff, apportioning the power purchase cost at different voltage levels taking into account the distribution losses at the relevant voltage level and the upstream system will facilitate determination of voltage wise cost of supply, though not very accurate, but a simple and practical method to reflect the actual cost of supply. ... 34. Thus Power Purchase Cost which is the major component of tariff can be segregated for different voltage levels taking into account the transmission and distribution losses, both commercial and technical, for the relevant voltage level and upstream system. As segregated network costs are not available, all the other costs such as Return on Equity, Interest on Loan, depreciation, interest on working capital and O&M costs can be pooled and apportioned equitably, on pro-rata basis, to all the voltage levels including the appellants category to determine the cost of supply. Segregating Power Purchase cost taking into account voltage-wise transmission and distribution losses will be a major step in the right direction for determining the actual cost of supply to various consumer categories. All consumer categories connected to the same voltage will have the same cost of supply.
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Further, refinements in formulation for cost of supply can be done gradually when more data is available. ... 37. We, however, direct the State Commission to determine the cross subsidy for each consumer category after working out the voltage-wise cost of supply based on the directions given in the preceding paragraphs. The cross subsidy will be calculated as the difference between the average tariff realization for that category as per the Annual Revenue Requirement and the cost of supply for the consumer category based on voltage-based cost of supply.(emphasis added) As can be seen from the above extract of the Honble Appellate Tribunals Judgment, the Honble Tribunal has ruled that the voltage-wise cost of supply should be used to determine the category-wise cross-subsidy, and in the absence of requisite data, the Honble Tribunal has further advised that the power purchase costs, which are the major component of the Distribution Licensees costs, can be apportioned to different voltage levels in proportion to the distribution losses at the respective voltage levels. As discussed above, BEST has made an attempt to calculate the voltage-wise cost of supply by using certain assumptions regarding apportionment of losses and power purchase cost, however, BEST has apportioned the costs to each category and consumption slab, rather than apportioning the costs to only the voltage of supply. The assumptions used by BEST have also not been verified, and BEST has itself submitted that the voltage-wise cost of supply computed by BEST may not be realistic projections. The consumers need to be presented with better data in order to enable them to submit their comments and suggestions on the proposal to determine tariffs and cross-subsidy on the basis of voltage-wise cost of supply. Therefore, the Commission is of the view that it would not be appropriate to determine tariffs on the basis of voltage-wise cost of supply at this point in time, and hence, for the purpose of this Order, the Commission has continued to compute the cross-subsidy with respect to the Average Cost of Supply. However, the Commission has attempted to ensure that the overall objective of reduction of cross-subsidies to be within the limits of +20% of the Average Cost of Supply, as laid down in the Tariff Policy as well as several Judgments of the Honble Tribunal. 6.3 COMMISSIONS TARIFF PHILOSOPHY
The Commission has increased the category-wise tariffs in order to meet the approved revenue requirement, as detailed in Section 5 of this Order, while at the same time, reducing the crosssubsidy prevailing between consumer categories, over the levels approved by the Commission in Page 214 of 308
the previous Tariff Order dated 16 May, 2012 in Case No. 171 of 2011 for FY 2011-12. The Commission has also attempted to ensure that the cross-subsidies are within the limits of +20% of the Average Cost of Supply, as laid down in the Tariff Policy as well as several Judgments of the Honble Tribunal. The revenue from existing tariffs for FY 2012-13 has been considered based on the actual revenue data submitted by BEST. As discussed in Section 5 of this Order, the Commission has determined the total revenue requirement for FY 2013-14, FY 2014-15, and FY 2015-16 as Rs. 5624.75 Crore, Rs. 5719.42 Crore, and Rs. 5616.29 Crore, respectively, after considering all past recoveries including the revenue (gap) / surplus of FY 2010-11 and FY 2011-12 after final truing up and projected revenue (gap)/surplus for FY 2012-13, Transport Deficit recovery, as well as past recovery pertaining to TPC-G. The revenue from existing tariff for FY 2013-14 has been computed by considering the prevailing category-wise tariff and the approved category-wise sales, and the revenue gap has been accordingly worked out. For FY 2014-15, however, the revenue from existing tariff has been computed by considering the approved category-wise sales and the revised tariffs for FY 2013-14, as approved by the Commission in this Order, since the existing tariff for FY 2014-15 has to be the tariff that is being charged in FY 2013-14. This approach also ensures that the base tariff considered for tariff revision in future years is appropriate and reflecting the ground reality. Similarly, for FY 2015-16, the revenue from existing tariff has been computed by considering the approved category-wise sales and the revised tariffs for FY 201415, as approved by the Commission in this Order. In the first step, the Commission has revised the tariffs in such a manner that the respective revenue requirement of each year is met, in order to assess the annual tariff increase required on an average, as shown in the Table below: Table: Annual Tariff Increase required (%) Particulars Total ARR incl. Regulatory Asset recovery (Rs. Crore) Sales (MU) Revenue at existing tariff (Rs. Crore) Revenue Gap/(Surplus) (Rs. Crore) FY 2013-14 5624.75 4758.37 4356.53 1268.21 FY 2014-15 5719.42 5216.16 5247.96 471.46 FY 2015-16 5616.29 5734.66 6315.23 (698.95)
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Particulars Average Cost of Supply (ACOS) (Rs/kWh) Average Tariff Increase/(Decrease) (%)
FY 2013-14 11.82 29.11%
FY 2014-15 10.96 8.98%
FY 2015-16 9.79 (11.07)%
As observed from the above Table, if each of the years is considered on a stand-alone basis and tariffs revised in such a manner that the respective revenue requirement of each year is met, the average tariff increase required varies from a steep 29.11% in FY 2013-14 to 8.98% in FY 201415 and a reduction of 11.07% in FY 2015-16. The Commission is of the view that an average tariff increase of 29% in FY 2013-14 would be too steep, since, the cross-subsidies have to also be reduced gradually, and the tariff increase for the subsidised categories would have to be even higher. Further, under a MYT regime, it would be better to have a smooth tariff trajectory. Hence, the Commission has adjusted the revenue requirement of each year, by deferring certain amounts for recovery in future periods, in such a manner that the average tariff increase for all three years is similar. The Commission has also allowed commensurate carrying cost, on the amount of revenue gap deferred to future periods. The average tariff increase thus approved by the Commission, works out to around 8.5 to 9.0 % annually, as shown in the Table below: Table: Annual Tariff Increase approved by the Commission (%) Particulars Total ARR incl. Regulatory Asset recovery (Rs. Crore) Sales (MU) Revenue at existing tariff (Rs. Crore) Revenue Gap (Rs. Crore) Average Cost of Supply (ACOS) (Rs/kWh) Average Tariff Increase (%) Equalised Revenue Gap (Rs. Crore) Carrying Cost on deferred revenue gap (Rs. Crore) Revenue Gap for tariff recovery (Rs. Crore) Average Tariff Increase (%) ACOS for tariff determination (Rs/kWh) FY 2013-14 5624.75 4758.37 4356.53 1268.21 11.82 29.11% 236.91 150.78 387.68 8.90% 9.97 FY 2014-15 5719.42 5216.16 5247.96 471.46 10.96 8.98% 271.91 179.95 451.86 8.61% 10.93 FY 2015-16 5616.29 5734.66 6315.23 (698.95) 9.79 (11.07)% 531.91 0.00 531.91 8.42% 11.94
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With the above determined average tariff increase of 8.5 to 9.0 % every year, the Commission has determined the category-wise tariffs in line with the tariff philosophy adopted by it in the past, and the provisions of law. The tariffs and tariff categorisation have been determined so that the cross-subsidies are reduced gradually without subjecting any consumer category to a tariff shock. Rationalisation of Tariff Categories/Consumption Slabs In the previous Tariff Orders, the Commission has already rationalised the consumer categories and consumption slabs across different Distribution Licensees in the State of Maharashtra, to a large extent. The applicability of tariffs for different consumer categories has been stipulated in the approved Tariff Schedule, which is annexed as a part of this Order (Annexure II). Rationalization of Tariff Components The Commission has continued to determine the tariffs such that there is an in-built incentive to consumers to reduce their consumption, as the impact on the bills is designed to increase as the consumption increases, on account of the higher telescopic tariffs applicable for the higher consumption slabs, while at the same time ensuring that even the consumers falling in the higher consumption slabs are charged lower for the consumption corresponding to the lower consumption slab. As regards BEST's request to further increase the fixed charges/demand charges applicable for different consumer categories, though the Commission agrees with the overall philosophy that the fixed/demand charges should be increased gradually so that the Licensee should recover a reasonable part of its fixed costs through the fixed charges, so that it is assured of stability of revenue irrespective of the consumption, and the consumer also pays for the costs in line with the nature of the costs, the Commission is of the view that the demand charges have been raised by around 25-30% in the previous Tariff Order and it may not be appropriate to increase it further in this Order. Also, the Commission has tried to ensure that the fixed charges being charged by all Distribution Licensees operating in the Mumbai licence area have similar fixed/demand charges. Hence, in this Order, the Commission has retained the fixed/demand charges at the existing level. The applicability of the BPL category tariffs has been retained same as that specified in the previous Tariff Order, read with any clarification thereon. The eligibility criteria has been
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retained at an annual limit of 360 units. The applicability of BPL category will have to be assessed at the end of each financial year. In case any BPL consumer has consumed more than 360 units in the previous financial year, then the consumer will henceforth, be considered under the LT-I residential category. Once a consumer is classified under the LT-I category, then he cannot be classified under BPL category. The Time of Day (ToD) tariffs will be applicable compulsorily to HT I, HT II, and HT V categories, and LT II (B) and (C), LT IV (A) and (B) category consumers having TOD meters, and LT IX (B) categories, as well as optionally available to LT- II (A), LT III, and LT IX (A) category consumers, who have TOD meters. The TOD tariffs have been retained at the existing levels. Five time slots, viz., (a) 2200 to 0600 hours, (b) 0600 to 0900 hours, (c) 0900 to 1200 hours, (d) 1200 to 1800 hours, and (e) 1800 to 2200 hours. Additional peak hour tariff will be payable for consumption during the peak hours in the State, viz., 0900 to 1200 hours morning peak, and 1800 to 2200 hours evening peak, in the following manner: 0900 to 1200 hours : Additional 0.50 Rs/kWh 1800 to 2200 hours : Additional 1.00 Rs/kWh For consumption during night off-peak hours, viz., 2200 to 0600 hours, a rebate of 0.75 Rs/kWh will be available Neither additional tariff nor rebate will be applicable for consumption during 0600 to 0900 hours and 1200 to 1800 hours. Additional demand charges of Rs. 20 per kVA per month would be chargeable for the stand by component, for CPPs, only if the actual demand recorded exceeds the Contract Demand. The Billing Demand definition has been retained at the existing levels, i.e., Monthly Billing Demand (for HT categories) will be the higher of the following: a) Actual Maximum Demand recorded in the month during 0600 hours to 2200 hours; b) 75% of the highest billing demand/Contract Demand, whichever is lower, recorded during the preceding eleven months; c) 50% of the Contract Demand. Monthly Billing Demand (for LT categories) will be the higher of the following: a) 65% of the actual Maximum Demand recorded in the month during 0600 hours to 2200 hours.
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b) 40% of the Contract Demand. Fuel Adjustment Charges The existing Fuel Adjustment Cost (FAC) Charge has been equated to zero, on account of the adoption of the existing fuel costs and power purchase costs for projection of the power purchase expenses. In case of any variation in the fuel prices and power purchase prices with respect to these levels, BEST shall pass on adjustments, due to changes in the cost of power procured due to change in fuel cost, through the Fuel Adjustment Cost (FAC) component of Z-factor Charge, as specified in Regulations 13.4 to 13.9 of the MERC MYT Regulations, 2011. It should be noted that BEST has already charged FAC for FY 2012-13 as well as the initial months of FY 2013-14, vis-a-vis the fuel costs considered in the prevailing Tariff Order (Case No. 171 of 2011) and the Regulations considered for that Order (MERC Tariff Regulations, 2005). However, the ARR for the Control Period from FY 2012-13 to FY 2015-16 has been determined in accordance with MERC MYT Regulations, 2011, and hence, post-facto vetting for this period would have to be done vis-a-vis the norms specified in the MERC MYT Regulations and the fuel costs considered in this Order for FY 2012-13 and thereafter. Any difference, positive or negative, due to the change in applicability of Regulations considered for charging FAC and that considered for vetting, vis-a-vis the FAC already charged by BEST for these periods, shall be passed through in the second half of FY 2013-14 and spread over the six months of H2 of FY 2013-14, after approval by the Commission. BEST shall submit the details in the stipulated format to the Commission for the first half of FY 2013-14, for prior approval of Z-factor charge to be recovered in the second Control Period, as stipulated by the Commission, within sixty (60) days of completion of first half. Thereafter, BEST shall submit details in the stipulated format to the Commission for the subsequent half yearly periods of the second Control Period, for prior approval of Z-factor charge to be recovered in the ensuing half yearly periods of the second Control Period, within 60 days of completion of such half. Further, BEST shall submit the Z-factor Charge levied to all consumers for the preceding half yearly period vis-a-vis the Z-factor component recoverable, along with the detailed computations and supporting documents as may be required for verification by the Commission.
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Average Cost of Supply The Average Cost of Supply (CoS) for the period from FY 2013-14 to FY 2015-16 is given below: Table: Average Cost of Supply approved by the Commission (Rs/kWh) Particulars Sales (MU) Revenue at existing tariff (Rs. Crore) Revenue Gap for tariff recovery (Rs. Crore) ACOS for tariff determination (Rs/kWh) FY 2013-14 4758.37 4356.53 387.68 9.97 FY 2014-15 5216.16 5247.96 451.86 10.93 FY 2015-16 5734.66 6315.23 531.91 11.94
Cross-Subsidy Reduction Trajectory The category-wise cross-subsidy reduction trajectory approved by the Commission for the period from FY 2013-14 to FY 2015-16 is given in the Tables below: Table: Movement of Average Billing Rate towards Average Cost of Supply for FY 2013-14
Average Billing Rate (Rs./unit) Average Cost of Supply (Rs./unit) Ratio of Average Billing Rate to Average Cost of Supply (% ) Existing Tariff to current ACOS 92% 98% 55% 127% 89% 7% 60% 108% 124% 126% 104% 105% 100% 188% 90% 48% 139% 45% 104% 107% Revised Tariff to current ACOS 102% 109% 75% 141% 99% 8% 67% 118% 129% 134% 109% 112% 110% 206% 101% 51% 151% 52% 109% 112% Approved percentag e increase in tariff (% ) 11% 12% 36% 11% 11% 17% 12% 9% 4% 6% 4% 7% 10% 9% 12% 6% 9% 15% 5% 5%
Category HT Category HT I - Industry HT II - Commercial HT III - Group Housing Society HT IV - Temporary Supply HT V - Hospitals & Edu Inst. LT Category LT I - BPL LT I - Residential LT II A - Commercial upto 20 kW LT II B - Commercial > 20 kW & <=50 kW LT II C - Commercial above 50 kW LT III - LT Industrial upto 20 kW LT-IV A - LT Industrial >20 kW LT-IV B - LT Industrial >100 kW LT V - Advertisement & Hoardings LT-VI - Street Lighting LT VII (A) - Temporary Religious LT VII (B) - Temporary - Others LT-VIII - Crematorium & Burial Grounds LT IX A - Hospitals & Edu Inst. below 20 kW LT IX B - Hospitals & Edu Inst. Above 20 kW
Existing Tariff 9.12 9.75
Tariff Proposed by BEST 10.31 10.40 7.45 13.58 9.64 0.72 6.61 12.16 13.11 13.73 10.94 11.59 11.29 21.26 10.41 5.25 16.71 5.22 11.04 11.97
Revised Tariff 10.12 10.90 7.44 14.01 9.84 0.77 6.71 11.76 12.82 13.33 10.82 11.19 10.99 20.53 10.03 5.10 15.10 5.17 10.88 11.19
Tariff Order dt. 16.05.12 104% 112% 64% 141% 100% 8% 67% 122% 139% 140% 113% 115% 112% 206% 101% 100% 153% 51% 114% 119%
9.97
5.47 12.66 8.84 0.66 6.01 10.78 12.37 12.57 10.37 10.46
9.97
9.98 18.78 8.94 4.83 13.90 4.51 10.38 10.69
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Table: Movement of Average Billing Rate towards Average Cost of Supply for FY 2014-15
Average Billing Rate (Rs./unit) Average Cost of Supply (Rs./unit) Ratio of Average Billing Rate to Average Cost of Supply (% ) Revised Tariffs Existing Revised applicable Tariff to Tariff to wef current current 01.09.13 ACOS ACOS 101% 109% 75% 140% 99% 8% 67% 118% 129% 134% 108% 112% 110% 206% 101% 51% 151% 52% 109% 112% 93% 100% 70% 128% 90% 7% 61% 107% 117% 122% 99% 102% 101% 187% 92% 47% 138% 47% 99% 102% 103% 110% 75% 140% 101% 9% 68% 115% 125% 130% 106% 110% 108% 195% 102% 55% 147% 55% 108% 112%
Category HT Category HT I - Industry HT II - Commercial HT III - Group Housing Society HT IV - Temporary Supply HT V - Hospitals & Edu Inst. LT Category LT I - BPL LT I - Residential LT II A - Commercial upto 20 kW LT II B - Commercial > 20 kW & <=50 kW LT II C - Commercial above 50 kW LT III - LT Industrial upto 20 kW LT-IV A - LT Industrial >20 kW LT-IV B - LT Industrial >100 kW LT V - Advertisement & Hoardings LT-VI - Street Lighting LT VII (A) - Temporary Religious LT VII (B) - Temporary - Others LT-VIII - Crematorium & Burial Grounds LT IX A - Hospitals & Edu Inst. below 20 kW LT IX B - Hospitals & Edu Inst. Above 20 kW
Revised Tariff 11.22 12.06 8.25 15.26 10.99 1.02 7.47 12.60 13.67 14.18 11.56 12.04 11.84 21.33 11.18 6.00 16.08 5.97 11.81 12.19
Approved percentag e increase in tariff (% ) 11% 10% 8% 9% 12% 32% 11% 8% 7% 6% 7% 8% 8% 4% 11% 18% 7% 15% 9% 9%
10.93
7.64 14.01 9.84 0.77 6.70 11.68 12.82 13.33 10.80 11.19
10.93
10.99 20.48 10.03 5.10 15.08 5.17 10.81 11.19
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Table: Movement of Average Billing Rate towards Average Cost of Supply for FY 2015-16
Average Billing Rate (Rs./unit) Average Cost of Supply (Rs./unit) Ratio of Average Billing Rate to Average Cost of Supply (% ) Revised Tariffs Existing Revised applicable Tariff to Tariff to wef current current 01.04.14 ACOS ACOS 103% 110% 75% 140% 101% 9% 68% 115% 125% 130% 106% 110% 108% 195% 102% 55% 147% 55% 108% 112% 94% 101% 69% 128% 92% 9% 62% 105% 115% 119% 97% 101% 99% 178% 94% 50% 135% 50% 99% 102% 102% 110% 75% 134% 101% 10% 70% 113% 123% 127% 103% 108% 105% 184% 102% 54% 143% 55% 104% 108%
Category HT Category HT I - Industry HT II - Commercial HT III - Group Housing Society HT IV - Temporary Supply HT V - Hospitals & Edu Inst. LT Category LT I - BPL LT I - Residential LT II A - Commercial upto 20 kW LT II B - Commercial > 20 kW & <=50 kW LT II C - Commercial above 50 kW LT III - LT Industrial upto 20 kW LT-IV A - LT Industrial >20 kW LT-IV B - LT Industrial >100 kW LT V - Advertisement & Hoardings LT-VI - Street Lighting LT VII (A) - Temporary Religious LT VII (B) - Temporary - Others LT-VIII - Crematorium & Burial Grounds
Revised Tariff 12.22 13.16 8.92 16.01 12.04 1.22 8.31 13.51 14.67 15.18 12.24 12.84 12.49 21.93 12.18 6.49 17.06 6.52 12.46 12.89
Approved percentag e increase in tariff (% ) 9% 9% 8% 5% 10% 20% 11% 8% 7% 7% 6% 7% 5% 3% 9% 8% 6% 9% 6% 6%
11.94
8.25 15.26 10.99 1.02 7.46 12.53 13.67 14.18 11.54 12.04
11.94
11.84 21.28 11.18 5.99 16.06 5.97 11.76 12.19
LT IX A - Hospitals & Edu Inst. below 20 kW LT IX B - Hospitals & Edu Inst. Above 20 kW
The above Tables show that the Commission has reduced the cross-subsidy levels for most consumer categories, while at the same time, increasing the tariff for all consumer categories, since the reference tariff and cross-subsidy levels have to be considered based on the Tariff Order for FY 2011-12. While the tariffs have been determined such that the revenue gap allowed to be recovered through the revised tariffs is met entirely through the revision in tariffs, it is possible that the actual revenue earned by BEST may be higher or lower than that considered by the Commission, on account of the changes in consumption pattern. The revenue shortfall/surplus, if any, will be trued up based on actuals.
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It should be noted that all previous clarifications given by the Commission through its various Orders continue to be applicable, unless they are specifically contrary to anything that has been stated in this Order, wherein the clarifications given in this Order shall prevail. 6.4 REVISED TARIFFS WITH EFFECT FROM 1 SEPTEMBER, 2013 (FOR FY 201314) Tariffs Fixed/ Demand Charge Sl. Consumer category & Consumption Slab Variable Charge (Rs./kWh) Transport Division Loss Recovery Charge (Rs./kWh) 0.12
Energy Charge (Rs./kWh)
LOW TENSION CATEGORIES 1 LT I - Residential (BPL) LT I Residential 0-100 units 101-300 units 301 to 500 units Above 500 units (balance units) 2 LT II - LT Non-Residential or Commercial (A) 0-20 kW 0-500 units Above 500 units (balance units) (B) > 20 kW and 50 kW (C) > 50 kW 3 LT III - LT Industrial category (0-20 kW) 0-500 units Above 500 units (balance units) Rs. 325 per month Rs. 425 per month 7.70 1.96 5.70 1.40 Rs. 250 per month Rs. 200 per kVA per month 6.55 9.05 8.45 8.85 1.48 2.20 2.15 2.18 Rs. 40 per month Rs. 75 per month$$ Rs. 100 per month$$ 2.45 4.50 6.35 8.00 0.55 1.03 1.44 1.85 Rs. 3 per month 0.55
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Tariffs Fixed/ Demand Charge Sl. Consumer category & Consumption Slab Variable Charge (Rs./kWh) Transport Division Loss Recovery Charge (Rs./kWh) 1.75 1.72 3.16 1.52
4 LT IV - LT Industrial (Above 20 kW ) (A) LT Industrial above 20 kW and upto 100 kW load (B) LT Industrial above 100 kW load 5 LT V - Advertisement & Hoardings, incl. floodlights & neon signs 6 LT VI Streetlights 7 LT VII Temporary Supply (A) TSR Temporary Supply Religious (B) TSO Temporary Supply Others 8 LT VIII Crematoriums and Burial Grounds 9 LT IX (A) - Hospitals & Educational Institutions (0 - 20 kW) 10 LT IX (B) - Hospitals & Educational Institutions (Above 20 kW) TOD Tariffs (in addition to above base tariffs) compulsory for LT II (B) and (C), LT IV (A) and (B), and LT IX (B) categories, and optional for LT II (A), LT III, and LT IX (A) categories 0600 hours to 0900 hours 0.00 Rs 200 per month Rs 400 per month Rs 200 per month Rs 250 per month Rs. 200 per kVA per month 3.50 10.50 3.75 7.30 7.30 0.87 2.53 0.83 1.83 1.83 Rs. 400 per month Rs 200 per kVA per month# Rs 200 per kVA per month 7.25 7.40 13.50 6.75
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Tariffs Fixed/ Demand Charge Sl. Consumer category & Consumption Slab Variable Charge (Rs./kWh) Transport Division Loss Recovery Charge (Rs./kWh)
0900 hours to 1200 hours 1200 hours to 1800 hours 1800 hours to 2200 hours 2200 hours to 0600 hours HIGH TENSION CATEGORIES 7 HT I Industry 8 HT II Commercial 9 HT III Group Housing Society 10 HT IV Temporary Supply 11 HT V - Hospitals Institutions & Educational Rs 200 per kVA per month Rs 200 per kVA per month Rs 200 per kVA per month Rs 250 per month Rs 200 per kVA per month
0.50 0.00 1.00 -0.75
6.90 7.50 5.37 10.00 6.60
1.59 1.71 0.91 2.33 1.51
TOD Tariffs (in addition to above base tariffs) for HT I, HT II and HT V categories 0600 hours to 0900 hours 0900 hours to 1200 hours 1200 hours to 1800 hours 1800 hours to 2200 hours 2200 hours to 0600 hours 0.00 0.50 0.00 1.00 -0.75
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Notes: 1. 2. 3. Fuel Adjustment Cost (FAC) will be applicable to all consumers and will be charged over the above tariffs, on the basis of the FAC formula specified by the Commission in MERC MYT Regulations, 2011. $$: Fixed charge of Rs. 150 per month will be levied on residential consumers availing 3 phase supply. Additional Fixed Charge of Rs. 100 per 10 kW load or part thereof above 10 kW load shall be payable. #: Street lightings having 'automatic timers' for switching 'on/off' would be levied Demand Charges on the lower of the following: (A. 50% of the Contract Demand (B. Actual Recorded Demand
6.5
REVISED TARIFFS WITH EFFECT FROM 1 APRIL, 2014 (FOR FY 2014-15) Tariffs Fixed/ Demand Charge Variable Charge (Rs./kWh) Transport Division Loss Recovery Charge (Rs./kWh) 0.12
Sl.
Consumer category & Consumption Slab
LOW TENSION CATEGORIES 1 LT I - Residential (BPL) LT I Residential 0-100 units 101-300 units 301 to 500 units Above 500 units (balance units) 2 LT II - LT Non-Residential or Commercial (A) 0-20 kW 0-500 units Above 500 units (balance units) (B) > 20 kW and 50 kW (C) > 50 kW Rs. 250 per month Rs. 200 per kVA per month 7.45 10.00 9.30 9.70 1.48 2.20 2.15 2.18 Rs. 40 per month Rs. 75 per month$$ Rs. 100 per month$$ 2.65 5.35 7.50 9.55 0.55 1.03 1.44 1.85 Rs. 3 per month 0.80
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Tariffs Fixed/ Demand Charge Sl. Consumer category & Consumption Slab Variable Charge (Rs./kWh) Transport Division Loss Recovery Charge (Rs./kWh) 1.40 1.96
3 LT III - LT Industrial category (0-20 kW) 0-500 units Above 500 units (balance units) 4 LT IV - LT Industrial (Above 20 kW ) (A) LT Industrial above 20 kW and upto 100 kW load (B) LT Industrial above 100 kW load 5 LT V - Advertisement & Hoardings, incl. floodlights & neon signs 6 LT VI Streetlights 7 LT VII Temporary Supply (A) TSR Temporary Supply Religious (B) TSO Temporary Supply Others 8 LT VIII Crematoriums and Burial Grounds 9 LT IX (A) - Hospitals & Educational Institutions (0 - 20 kW) 10 LT IX (B) - Hospitals & Educational Institutions (Above 20 kW) TOD Tariffs (in addition to above base tariffs) compulsory for LT II (B) and (C), Rs 200 per month Rs 400 per month Rs 200 per month Rs 250 per month Rs. 200 per kVA per month 11.50 4.55 8.30 8.30 2.53 0.83 1.83 1.83 4.40 0.87 Rs. 400 per month Rs 200 per kVA per month# Rs 200 per kVA per month 8.10 8.25 14.35 7.90 1.75 1.72 3.16 1.52 Rs. 325 per month Rs. 425 per month 6.35 8.55
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LT IV (A) and (B), and LT IX (B) categories, and optional for LT II (A), LT III, and LT IX (A) categories 0600 hours to 0900 hours 0900 hours to 1200 hours 1200 hours to 1800 hours 1800 hours to 2200 hours 2200 hours to 0600 hours HIGH TENSION CATEGORIES 7 HT I Industry 8 HT II Commercial 9 HT III Group Housing Society 10 HT IV Temporary Supply 11 HT V - Hospitals Institutions & Educational Rs 200 per kVA per month Rs 200 per kVA per month Rs 200 per kVA per month Rs 250 per month Rs 200 per kVA per month 8.00 8.60 5.97 11.25 7.75 1.59 1.71 0.91 2.33 1.51 0.00 0.50 0.00 1.00 -0.75
TOD Tariffs (in addition to above base tariffs) for HT I, HT II and HT V categories 0600 hours to 0900 hours 0900 hours to 1200 hours 1200 hours to 1800 hours 0.00 0.50 0.00
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1800 hours to 2200 hours 2200 hours to 0600 hours

Notes: 4. 5. 6.
1.00 -0.75
Fuel Adjustment Cost (FAC) will be applicable to all consumers and will be charged over the above tariffs, on the basis of the FAC formula specified by the Commission in MERC MYT Regulations, 2011. $$: Fixed charge of Rs. 150 per month will be levied on residential consumers availing 3 phase supply. Additional Fixed Charge of Rs. 100 per 10 kW load or part thereof above 10 kW load shall be payable. #: Street lightings having 'automatic timers' for switching 'on/off' would be levied Demand Charges on the lower of the following: (A. 50% of the Contract Demand (B. Actual Recorded Demand
6.6
REVISED TARIFFS WITH EFFECT FROM 1 APRIL, 2015 (FOR FY 2015-16) Tariffs Fixed/ Demand Charge Variable Charge (Rs./kWh) Transport Division Loss Recovery Charge (Rs./kWh) 0.12 0.55
Sl.
Consumer category & Consumption Slab
LOW TENSION CATEGORIES 1 LT I - Residential (BPL) LT I Residential 0-100 units Rs. 40 per 3.00 Rs. 3 per month 1.00
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Tariffs Fixed/ Demand Charge Sl. Consumer category & Consumption Slab Variable Charge (Rs./kWh) Transport Division Loss Recovery Charge (Rs./kWh) 1.03 1.44 1.85
month 101-300 units 301 to 500 units Above 500 units (balance units) 2 LT II - LT Non-Residential or Commercial (A) 0-20 kW 0-500 units Above 500 units (balance units) (B) > 20 kW and 50 kW (C) > 50 kW 3 LT III - LT Industrial category (0-20 kW) 0-500 units Above 500 units (balance units) 4 LT IV - LT Industrial (Above 20 kW ) (A) LT Industrial above 20 kW and upto 100 kW load (B) LT Industrial above 100 kW load 5 LT V - Advertisement & Hoardings, incl. floodlights & neon signs 6 LT VI Streetlights 7 LT VII Temporary Supply (A) TSR Temporary Supply Religious Rs 200 per 4.90 0.87 Rs. 400 per month Rs 200 per kVA per month# Rs 200 per kVA per month 8.90 8.90 15.00 8.90 1.75 1.72 3.16 1.52 Rs. 325 per month Rs. 425 per month 7.00 9.30 1.40 1.96 Rs. 250 per month Rs. 200 per kVA per month 8.45 10.95 10.30 10.70 1.48 2.20 2.15 2.18 Rs. 75 per month$$ Rs. 100 per month$$ 6.40 8.80 10.80
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Tariffs Fixed/ Demand Charge Sl. Consumer category & Consumption Slab Variable Charge (Rs./kWh) Transport Division Loss Recovery Charge (Rs./kWh) 2.53 0.83 1.83 1.83
month (B) TSO Temporary Supply Others 8 LT VIII Crematoriums and Burial Grounds 9 LT IX (A) - Hospitals & Educational Institutions (0 - 20 kW) 10 LT IX (B) - Hospitals & Educational Institutions (Above 20 kW) TOD Tariffs (in addition to above base tariffs) compulsory for LT II (B) and (C), LT IV (A) and (B), and LT IX (B) categories, and optional for LT II (A), LT III, and LT IX (A) categories 0600 hours to 0900 hours 0900 hours to 1200 hours 1200 hours to 1800 hours 1800 hours to 2200 hours 2200 hours to 0600 hours HIGH TENSION CATEGORIES 7 HT I Industry 8 HT II Commercial 9 HT III Group Housing Society Rs 200 per kVA per month Rs 200 per kVA per month Rs 200 per kVA 9.00 9.70 6.65 1.59 1.71 0.91 0.00 0.50 0.00 1.00 -0.75 Rs 400 per month Rs 200 per month Rs 250 per month Rs. 200 per kVA per month 12.50 5.10 9.00 9.00
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Tariffs Fixed/ Demand Charge Sl. Consumer category & Consumption Slab Variable Charge (Rs./kWh) Transport Division Loss Recovery Charge (Rs./kWh) 2.33 1.51
per month 10 HT IV Temporary Supply 11 HT V - Hospitals Institutions & Educational Rs 250 per month Rs 200 per kVA per month 12.00 8.80
TOD Tariffs (in addition to above base tariffs) for HT I, HT II and HT V categories 0600 hours to 0900 hours 0900 hours to 1200 hours 1200 hours to 1800 hours 1800 hours to 2200 hours 2200 hours to 0600 hours 0.00 0.50 0.00 1.00 -0.75
Notes: 7. Fuel Adjustment Cost (FAC) will be applicable to all consumers and will be charged over the above tariffs, on the basis of the FAC formula specified by the Commission in MERC MYT Regulations, 2011. 8. 9. $$: Fixed charge of Rs. 150 per month will be levied on residential consumers availing 3 phase supply. Additional Fixed Charge of Rs. 100 per 10 kW load or part thereof above 10 kW load shall be payable. #: Street lightings having 'automatic timers' for switching 'on/off' would be levied Demand Charges on the lower of the following: (A. 50% of the Contract Demand (B. Actual Recorded Demand
The detailed computation of category-wise revenue with revised tariffs for FY 2013-14, FY 2014-15, and FY 2015-16 are given as Annexure IA, Annexure IB, and Annexure IC to this Order. The approved Tariff Schedule is given as Annexure II(A), II(B), and II(C) to this Order.
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6.7
INCENTIVES AND DISINCENTIVES
Power Factor Incentive (Applicable for HT I, HT II and HT V categories, and LT II (B), LT II (C), LT IV (A), LT IV (B) and LT IX (B) categories) Whenever the average power factor is more than 0.95, an incentive shall be given at the rate of the following percentages of the amount of the monthly bill including energy charges, reliability charges, FAC, and Fixed/Demand Charges, but excluding Taxes and Duties: Sl. 1 2 3 4 5 6 Range of Power Factor 0.951 to 0.954 0.955 to 0.964 0.965 to 0.974 0.975 to 0.984 0.985 to 0.994 0.995 to 1.000 Power Factor Level 0.95 0.96 0.97 0.98 0.99 1.00 Incentive 0% 1% 2% 3% 5% 7%
Note: PF to be measured/computed upto 3 decimals, after universal rounding off Power Factor Penalty (Applicable for HT I, HT II and HT V categories, and LT II (B), LT II (C), LT IV (A), LT IV (B) and LT IX (B) categories) Whenever the average PF is less than 0.9, penal charges shall be levied at the rate of the following percentages of the amount of the monthly bill including energy charges, reliability charges, FAC, and Fixed/Demand Charges, but excluding Taxes and Duties: Sl. 1 2 3 4 5 6 7 8 9 10 ... Range of Power Factor 0.895 to 0.900 0.885 to 0.894 0.875 to 0.884 0.865 to 0.874 0.855 to 0.864 0.845 to 0.854 0.835 to 0.844 0.825 to 0.834 0.815 to 0.824 0.805 to 0.814 ... Power Factor Level 0.90 0.89 0.88 0.87 0.86 0.85 0.84 0.83 0.82 0.81 ... Penalty 0% 2% 3% 4% 5% 6% 7% 8% 9% 10% ...
Note: PF to be measured/computed upto 3 decimals, after universal rounding off
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Prompt Payment Discount A prompt payment discount of one percent on the monthly bill (excluding Taxes and Duties) shall be available to the consumers if the bills are paid within a period of 7 working days from the date of issue of the bill. Delayed Payment Charges (DPC) In case the electricity bills are not paid within the due date mentioned on the bill, delayed payment charges of 2 percent on the total electricity bill (including Taxes and Duties) shall be levied on the bill amount. For the purpose of computation of time limit for payment of bills, the day of presentation of bill or the date of the bill or "the date of issue of the bill", etc. as the case may be, will not be excluded. Rate of Interest on Arrears The rate of interest chargeable on arrears will be as given below for payment of arrearsInterest Rate p.a. (%) 12% 15% 18%
Sr. No. 1 2 3
Delay in Payment (months) Payment after due date upto 3 months (0 - 3) Payment made after 3 months and before 6 months (3 - 6) Payment made after 6 months (> 6)
Load Factor Incentive Consumers having load factor over 75% upto 85% will be entitled to a rebate of 0.75% on the energy charges for every percentage point increase in load factor from 75% to 85%. Consumers having a load factor over 85 % will be entitled to an additional rebate of 1% on the energy charges for every percentage point increase in load factor from 85%. The total rebate under this head will be subject to a ceiling of 15% of the energy charges for that consumer. This incentive is limited to HT I, HT II, and HT V categories only. Further, the load factor rebate will be available only if the consumer has no arrears with BEST, and payment is made within seven days from the date of the bill. However, this incentive will be applicable to consumers where payment of arrears in instalments has been granted by BEST, and the payments are being made as scheduled. BEST has to take a commercial decision on the issue of how to determine the timeframe for which the payments should have been made as scheduled, for the consumer to be eligible for the Load Factor incentive. The Load Factor has been defined below:
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Load Factor
Consumption during the month in MU Maximum Consumption Possible during the month in MU
Maximum consumption possible = Contract Demand (kVA) x Actual Power Factor x (Total no. of hrs during the month less planned load shedding hours*) * - Interruption/non-supply to the extent of 60 hours in a 30 day month has been built in the scheme. In case the billing demand exceeds the contract demand in any particular month, then the load factor incentive will not be payable in that month. (The billing demand definition excludes the demand recorded during the non-peak hours, i.e., 22:00 hrs to 06:00 hrs and therefore, even if the maximum demand exceeds the contract demand during the month, load factor incentives would be applicable. However, the consumer would be subjected to the penal charges for exceeding the contract demand and has to pay the applicable penal charges).
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7 SUMMARY OF DIRECTIVES UNDER MYT BUSINESS PLAN ORDER AND BEST's REPLIES AND COMPLIANCE
The Commission, in the MYT Business Plan Order for BEST, had given several directives to BEST to be complied with while filing the MYT Petition for the Second Control Period. In pursuance of such directions, BEST in the present MYT Petition has submitted the compliance status or responses to such directives of the Commission. The following Section summarizes the directives of the Commission and responses thereto as submitted by BEST. Wherever necessary, the Commission has given its findings on the responses of BEST. 7.1 REGARDING SEPARATE SECTION FOR TRUING UP OF ARR FOR FY 2011-12 Directive BEST shall submit its Truing-up Petition for FY 2011-12 as per MERC Tariff Regulations, 2005, as a separate Section, in its MYT Petition for FY 2012-13 to FY 2015-16 Response BEST submitted that it has included the Truing-up for FY 2010-11 and FY 2011-12 as per MERC Tariff Regulations 2005 as a separate Section in the MYT Petition. Commissions Observations/Ruling The Commission has noted the response of BEST to the directive, and has approved Truing up for FY 2010-11 and FY 2011-12 in accordance with MERC Tariff Regulations, 2005, as elaborated in Section 3 and Section 4, respectively, of this Order. 7.2 SUBMISSION OF DSM SCHEMES FOR THE COMMISSIONS APPROVAL AND CONSIDERATION OF SAVINGS IN ENERGY DUE TO DSM IN THE POWER PURCHASE REQUIREMENTS
Directive The Commission directs BEST to submit the DSM schemes for the Commissions approval and include the corresponding details in its MYT Petition along with the savings in MU due to implementation of these schemes. The Commission is of the view that the savings on account of
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implementation of DSM schemes should be considered while computing the Power Purchase requirement as the expenses towards the same are considered in the ARR over the Control Period. Thus, it would be in the interest of the consumers to avail the benefit of DSM schemes as the expense towards the same is being passed on to the consumers. Response BEST submitted that it has not considered saving in terms of MU due to DSM expenses at this stage, however, it will consider the same during the mid-term review. Commissions Observations/Ruling The Commission has noted the response of BEST to this directive. However, the Commission once again directs BEST to expedite its submissions in the matter. 7.3 CONSIDERATION OF REVISED SUBMISSION OF TPC-G IN ITS MYT PETITION IN CASE NO 177 OF 2011 OR THE COST APPROVED BY THE COMMISSION IN TPC-GS MYT ORDER Directive The Commission directs BEST to consider the revised submission of TPC-G in its MYT Petition in Case No. 177 of 2011 or the cost approved by the Commission in TPC-G's MYT Order, in case the Order is issued in the meantime. Response BEST submitted that as regards power purchase cost from TPC-G, it has considered the revised submission of TPC-G made in its MYT Petition in Case No. 177 of 2011, however, for FY 201213 it has considered the actual/ provisional power purchase quantum and cost. Commissions Observations/Ruling The Commission has noted the response of BEST to this directive. The Commission has considered the tariff approved by the Commission for TPC-G in TPC-Gs MYT Order, while approving the power purchase cost of BEST. The detailed observations and ruling of the Commission in this regard have been discussed in Section 5 of this Order.
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7.4 IMPACT OF WAGE AGREEMENT Directive As regards impact of Wage Agreement, the Commission hereby directs BEST to submit the details of actual payment made to the employees under the Basic, DA, H.R.A and Medical Allowance along with interim adjustments like Interim Relief, Wage Settlement, Interim DA, etc., with regard to the Wage Agreement, till FY 2011-12. The Commission further directs BEST to submit the additional impact after considering such payments already made and also submit the payment schedule for the same in the MYT Petition. Response BEST submitted that its Wage Agreement period started from FY 2006-07 to FY 2010-11 and from FY 2011-12 to FY 2015-16. BEST submitted that arrears payment due to the staff members have been worked out as per the Agreement period, which has been shown in Annexure VI annexed along with this MYT Petition. BEST further submitted that if it considers the payment till FY 2011-12 as per revised pay-scales and allowances, for subsequent financial years from FY 2012-13 to FY 2015-16, the total additional financial burden works out to Rs.826.98 crore irrespective of amount already paid to the staff members, which is Rs.350.59 crore. BEST further submitted that the Commission vide its email dated 27 November, 2012 and 5 December, 2012 had forwarded the additional queries in respect of Wage Agreement submitted by BEST in the matter of approval of MYT Business Plan Petition and accordingly, the revised impact of financial burden of Wage Agreement period from FY 2006-07 to FY2010-11 and FY 2011-12 to FY2015-16 was prepared. BEST submitted that in addition to this, Rs.60 crore wage burden for A and B Grade Officers was also estimated for pre- Agreement period. Accordingly, revised impact for each Agreement period was prepared and forwarded under Annexure VII annexed along with MYT Petition. BEST submitted that the total payment of Rs. 350.59 crore made till FY 2011-12, has been considered for arriving at the per year burden for Supply and Transport Division, which has been submitted to the Commission. BEST submitted that as per the revised calculation, the burden for the Agreement period from FY 2006-07 to FY 2011-12 worked out to Rs.521.77 crore, as against the earlier submission of Rs.688.76 crore. BEST submitted that the major difference was on account of no arrears being paid to A & B Grade Officers for Wage Agreement period from FY 2006-07 to FY 2010-11
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and hence, no additional impact was observed for Supply Business employees for the period from FY 2006-07 to 2008-09. BEST submitted that for the Agreement period from FY 2011-12 to FY 2015-16, total burden worked out to Rs. 731.49 crore, as against the earlier submission of Rs. 425.49 crore. BEST submitted that the reason for increase is that the wage impact for A and B Grade Officers became effective from 1 April, 2011 and also DA Index has been considered at 125 points per month from January, 2013 onwards. BEST submitted that DA Index from April, 2012 to December, 2012 has increased from 23550 to 26027 points, which was an uncontrollable factor. BEST added that the said wage burden has been estimated based on the assumption that the number of employees will remain constant till FY 2015-16. BEST submitted that initially total additional wage burden for both Agreement periods was estimated at Rs.1114.25 crore and the same has now been revised to Rs.1177.57 crore for the whole Undertaking, resulting in an increase of Rs.63.32 crore. BEST submitted that actual additional burden for Supply business for the two agreement period works out to Rs. 113.29 crore, Rs. 640.31 crore for Transport business and Rs.65.64 crore for Common Administrative Department which has to be shared between Supply and Transport business. BEST provided the detailed calculation of the same in Annexure VI annexed along with the MYT Petition. BEST added that this impact does not include burden of Gratuity payment and other related payments like Encashment, Incentives, Overtime, etc., which might be 13% to 14% of the revised Basic pay and DA. As regards scheduled date of payment, BEST submitted that it has already informed in its replies to the Additional Data Gap queries of MYT Business Plan Petition that the same will be claimed as and when paid to the staff members in the next MYT Control Period. Commissions Observations/Ruling The Commission has noted the response of BEST to this directive, and has considered these details, while computing the O&M expenses for the second Control Period.
7.5 DELAYED PAYMENT CHARGES PAYABLE TO TPC-G Directive As regards Delayed Payment Charges paid to TPC-G for the Control Period, the Commission directs BEST to resolve the issue of cash crunch and take appropriate measures to make timely payment to TPC-G and avail rebates from TPC-G as being done in FY 2011-12.
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Response BEST submitted that it has already taken measures to obtain temporary advance from Brihanmumbai Municipal Corporation amounting to Rs.1600 crore and the State Government has given its approval for taking temporary advance from MCGM. BEST submitted that first instalment of Rs. 400 crore has been obtained and utilized for payment of outstanding bills of TPC-G. BEST further submitted that it will make efforts to make timely payment to TPC-G in future. Commissions Observations/Ruling The Commission has noted the response of BEST to this directive. 7.6 PROJECTION OF REBATE FOR PROMPT PAYMENT OF POWER PURCHASE BILLS
Directive BEST should project the rebate for prompt payment of power purchase bills in proportion to the projected power purchase cost. Response BEST submitted that in future it will make efforts to avail rebate for prompt payment of power purchase bills in proportion to the projected power purchase cost, however, it has not considered rebate from TPC-G in the MYT Petition. Commissions Observations/Ruling The Commission has noted the response of BEST to this directive. Further, for the purpose of this MYT Order, the Commission has not considered rebate for prompt payment to TPC-G. However, the same shall be considered during the mid-term performance review based on the actuals. The Commission once again directs BEST to ensure timely payment of its bills, in order to avail the prompt payment discounts. 7.7 FIRM FUNDING ARRANGEMENT
Directive BEST to put in place firm funding arrangement, either from Financial Institutions or from its internal accruals, to finance its funding requirements for the MYT Control Period, so as to ensure timely fund availability for achieving capitalization planned during the Control Period.
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Response BEST submitted that as explained in earlier paragraphs once the temporary advance from Brihanmumbai Municipal Corporation amounting to Rs. 1600 crore is obtained BEST will arrange funds for capitalization in MYT Control Period. Commissions Observations/Ruling The Commission has noted the response of BEST to this directive. 7.8 RECOVERY OF THE IMPACT DUE TO ATES JUDGMENT
Directive While proposing the recovery of the impact due to ATE Judgment in its MYT Petition, BEST may reconsider the proposal to spread this amount over three years, since the amount is relatively smaller, and delaying the recovery adds to the Carrying Cost. Response BEST submitted that impact due to the Honble ATEs Judgment has been considered under the truing-up exercise of FY 2010-11 as per the Commissions directives. Commissions Observations/Ruling The Commission has noted the response of BEST to this directive and has considered the same while undertaking the Truing up exercise for FY 2010-11 as elaborated in Section 5 of this Order. 7.9 TIE-UP FOR RENEWABLE ENERGY POWER PURCHASE TO MEET ITS RPO
Directive As outlined in Section 5.3.3, BEST should expedite the process of RE Power Purchase tie-up for the MYT Control Period, thereby reducing its dependence on REC/ Bilateral sources to meet the RPO target. Response BEST submitted that it had advertised an EOI on 16 November 2012, for procuring solar power on long term basis and based on the responses to EOI, BEST is in process of entering into PPA with suitable bidder/s, which shall be submitted to the Commission for regulatory approval.
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BEST further submitted that it has also been periodically issuing advertisement in prominent newspapers for procuring renewable power on short term basis. BEST further submitted that in order to achieve its long term RE procurement it has entered into EPA with M/s Spark Green Energy for 50 MW biomass power and the Firm is in process of installing the project, which is expected to be commissioned this year. BEST submitted that it is also in touch with MCGM regarding procurement of renewable power from its proposed Mid-Vaitarna hydro project. BEST further submitted that since the renewable power procured through these measures may not be sufficient to meet BESTs RPO, BEST has also adopted the REC route for meeting its RPO. Commissions Observations/Ruling The Commission has noted the response of BEST to this directive. The detailed observations and the Commissions rulings in this regards has been elaborated in earlier Sections of this Order. 7.10 BESTS PRAYER TO MODIFY/REVISE THE BUSINESS PLAN ON YEARLY BASIS Directive As regards BEST's prayer to permit BEST to modify/revise the Business Plan on yearly basis, the Commission is of the view that the whole purpose of the MYT Business Plan is to inculcate the discipline of long-term planning, and if the Business Plan is allowed to be modified every year, then the very purpose of approving the Business Plan for the entire Control Period will be defeated. Further, the MERC MYT Regulations do not permit such modification/revision of the Business Plan on an annual basis. Response BEST submitted that it in agreement with the Commissions views in this regard. However, BEST requested the Commission to allow at least one mid-term review during the Control Period so as to incorporate the effect of substantial changes during this period such as changes in Government policies such as pooling of coal costs, direct taxation regime, etc. BEST submitted that such changes should not result in large scale revenue gaps which will ultimately be recovered along with carrying cost from the consumers. BEST further requested that a mandatory review should be provided in case of major policy changes. Commissions Observations/Ruling The Commission has noted the response of BEST to this directive. In accordance with MERC MYT Regulations, the Commission will undertake the mid-term review of BESTs performance as discussed in the subsequent Section of this Order. Page 242 of 308
8 APPLICABILITY OF THE ORDER

This Order on the trued-up ARR of BEST for FY 2010-11and FY 2011-12 and MYT for the second Control Period from FY 2012-13 to FY 2015-16 shall come into force with effect from 1 September, 2013 and shall continue to be in force for the entire Control Period till 31 March, 2016. The Commission will undertake the mid-term review of BESTs performance during the third quarter of FY 2014-15. BEST is directed to submit its Petition for mid-term review of its performance during the third quarter of FY 2014-15, with detailed reasons for deviations, if any, in performance, latest by 30 November, 2014. With the above, BESTs Petition in Case No.26 of 2013 stands disposed off.
Sd/(Vijay L. Sonavane) Member
Sd/(V. P. Raja) Chairman
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APPENDIX-1 List of People who attended Technical Validation Session held on 6 March, 2013 Sr. No. 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21) 22) 23) 24) 25) 26) 27) 28) 29) 30) 31) Name of Individuals Shri.O.P.Gupta Shri.S.R.Khedkar Shri.S.B.Mali Shri.N.P.Jagaldas Shri.H.V.Vagal Shri.Umesh Patil Shri.M.W.Vohra Shri.S.A.Jadhav R.C.Kulkarni Shri.R.K.Kamble Shri.V.U.Kurade Shri.G.V.Bomble Shri.V.K.Rokade Shri.K.P.Khadke Shri.R.U.Patil Shri.R.B.Patil Shri.A.V.Kadam Shri.S.D.Darne Shri.S.D.Pawar Shri.M.M.Daware Shri.S.A.Bakre Shri.N.V.Bhandari Shri.R.D.Pawar Shri.A.S.Jmntah Shri.S.B.Dhole Shri.V.M.Kamat Shri.A.R.Talegaonkar Shri.Billal Shaikh Shri.R.M.Pradhan Shri.R.D.Waikar Shri.S.H.Parab Individual/ Institution BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking. BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking Individual BEST Undertaking BEST Undertaking
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Sr. No. 32) 33)
Name of Individuals Shri.R.K.Waghchoure Shri.R.D.Patsute
Individual/ Institution BEST Undertaking BEST Undertaking
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APPENDIX-2 List of People who attended Public Hearing on 14 June, 2013 Sr. No. 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21) 22) 23) 24) 25) 26) 27) 28) 29)
Name of the Objector/ Individuals Institution/Individual
Shri.O.P.Gupta Shri.N Ponrathnam Shri.D.K.Shetty Shri.Kamalakar Shenoy Shri.S.D.Pawar Shri.M.M.Davare Shri.R.M.Pradhan Shri.Bilal Shaikh Shri.S.A.Bakra Shri.S.B.Mali Shri.R.K.Kamble Shri.V.U.Kurade Shri. George John Shri.B.S.Gosavi Shri.R.B.Patil Shri.N.V.Bhandari Shri.V.K.Rokade Shri.S.A.Jadhav Shri.P.R.B.Nair Shri.R.D.Patsute Shri.Shrikant Khedkar Shri.M.B.Urunkar Shri.S.P.Malwane Shri.S.D.Darne Shri.A.S.Tamboli Shri.M.V.Bhlugare Shri.M.S.Varade Shri.R.D.Pawar Shri.G.V.Bamble,.
BEST Undertaking Vel Induction Hardenings Individual Individual BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking Individual BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking
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Sr. No. 30) 31) 32) 33) 34) 35) 36) 37) 38) 39) 40) 41) 42) 43) 44) 45) 46) 47) 48) 49) 50) 51) 52) 53) 54) 55) 56) 57) 58) 59) 60) 61)
Name of the Objector/ Individuals
Institution/Individual
Shri.D.S.Kharat, Shri.V.M.Kamat, Shri.S.V.Varodkar, Shri.H.H.Vohra Smt.Mrinal Sharma Shri.Gaurav Jha Shri.Emlon Jirkey Smt.Monami Chakroborty Smt.Riddhi Banergy Shri.Dipesh Suvarna Shri.Rakesh Kumar Shri.Rohit Agarwal Shri.Vijendra Verma Shri.H.I.Inamdar Smt.Ambika Garg Smt.Chhavi Chauhan Shri. Rahul K.Mishra Shri.Anupam Dubey Shri.Kisan Parekh Shri.Shoban Badgujar Shri.Dunpshok Kholyon Shri. Nikhil Agrawal Shri.Dinesh Shri.K.R.Sher Shri.S.S.Kamble Shri.Subhan Kadam Smt.Sachi Walghode Shri.Abhijit Dhamdhere Smt.Anju Tolani Shri.Karn Pallav Shri.Kunal Dhekate Shri.Shashank Rao
BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking TISS TISS TISS Individual TISS TISS TISS TISS TISS TPC TPC ABPS Infra CRISIL CRISIL Individual TISS TISS PMAA ABPS Infra AAP Priyadarshini Priyadarshini TISS IPPAI Earth First RInfra Tata Institute Mid day
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Sr. No. 62) 63) 64) 65) 66) 67) 68) 69) 70)
Name of the Objector/ Individuals
Institution/Individual
Shri.A.S.Dalvi Shri.N.Somarajan Shri.M.M.Shaikh Shri.H.V.Vagal Shri.M.V.Janhi Shri.Shri.D.E.Saene Shri.D.V.Khalati Shri.R.D.Waikar Shri.S.B.Doddannavan
BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking BEST Undertaking Individual
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Annexure I (a) Category-wise Revenue from Revised Tariffs for FY 2013-14

Revenue Calculation
Transport Division Energy Loss charge (Rs. Single Three Recovery Demand / kWh) phase phase Energy Charge charge meter (Rs./ meter (Rs./ (Rs/kWh) consumpti (Rs./ kVA / connection connection on (kWh) month) / month) / month) 3.00 40.00 75.00 75.00 100.00 250.00 250.00 200.00 200.00 325.00 425.00 200.00 200.00 400.00 200.00 200.00 400.00 200.00 250.00 200.00 150.00 150.00 150.00 0.55 2.45 4.50 6.35 8.00 6.55 9.05 8.45 8.85 5.70 7.70 7.25 7.40 13.50 6.75 3.50 10.50 3.75 7.30 7.30 0.12 0.55 1.03 1.44 1.85 1.48 2.20 2.15 2.18 1.40 1.96 1.75 1.72 3.16 1.52 0.87 2.53 0.83 1.83 1.83 Components of tariff Relevant sales & load/demand data for revenue calculation Revenue from fixed charges (Rs. Crore) Total Total Revenue Revenue Revenue from from from TDLR Energy charges Electricity Electricity (Rs Crore) (Rs. Crore) And Business Demand Total Fixed Transport (Rs. Crore) Charges charge (Rs Crore) 0.0007 14.73 33.85 6.80 5.75 67.24 10.68 19.48 41.44 2.49 1.16 21865.88 13736.07 0.45 8643.05 0.00 0.74 0.01 0.62 12156.02 144.51 2.92 74.46 2.07 5.25 3.30 19.48 41.44 2.49 1.16 5.25 3.30 0.45 2.07 0.00 0.74 0.01 0.62 2.92 218.97 0.03 171.77 268.35 115.90 285.18 410.87 396.88 256.48 532.33 13.52 21.01 41.76 38.87 3.83 21.81 0.60 43.87 0.50 18.69 33.18 2675.42 0.03 186.50 302.20 122.70 290.94 478.11 407.57 275.96 573.77 16.00 22.16 47.01 42.16 4.28 23.89 0.60 44.61 0.50 19.30 36.09 2894.38 0.01 38.56 61.42 26.28 65.95 92.84 96.48 65.26 131.13 3.32 5.35 10.08 9.03 0.90 4.91 0.15 10.57 0.11 4.68 8.32 635.34 0.04 225.06 363.63 148.99 356.88 570.95 504.04 341.22 704.89 19.32 27.51 57.09 51.20 5.17 28.80 0.75 55.18 0.61 23.99 44.41 3529.73
Tariff Category
Slab
Billing Demand (kVA)
Fixed charge (Single phase) 0.00 14.73 33.85 6.80 5.75 67.24 10.68
Total Revenue FAC Revenue From FAC Rates including (Rs. (Rs/kWh) FAC (Rs. Crore) Crore) 0.09 0.38 0.73 1.05 1.34 1.10 2.50 1.58 1.61 1.04 2.16 1.28 1.24 2.29 1.12 0.72 1.89 0.55 1.51 1.42 0.00 26.64 43.53 19.17 47.77 69.00 109.64 47.96 96.84 2.47 5.89 7.37 6.51 0.65 3.62 0.12 7.90 0.07 3.87 6.45 0.04 251.70 407.16 168.15 404.65 639.95 613.68 389.17 801.74 21.79 33.41 64.46 57.71 5.82 32.42 0.88 63.08 0.68 27.85 50.87
BPL LT - I
0 - 30 0 - 100 101 - 300 301 - 500 > 501
0.52 701.10 596.34 182.53 356.48 627.29 438.54 303.52 81182.32
LT - II (a)
0-500 > 500
LT - II (b) LT - II (c) LT - III
all units all units 0 - 500 > 500
601.50 172654.36 23.71 27.28 57.60 52.52 2.84 32.31 1.72 41.78 1.32 25.60 45.45
LT - IV (a) LT - IV (b) LT - V LT - VI LT - VII (a) LT - VII (b) LT - VIII
all units all units all units all units all units all units all units
LT - IX (a) Pub. hosp/Sch.a ll units LT - IX (b) Charitable org. a ll units Total LT HT Category HT - I HT - II HT - III HT - IV HT-V Total HT Total all units all units all units all units all units all units
4119.95 310237.70
200.00 200.00 200.00 250.00 200.00
6.90 7.50 5.37 10.00 6.60
1.59 1.71 0.91 2.33 1.51
190.40 371.96 34.05 4.28 37.74
40012.43 78168.59 7155.46 0.00 8882.69 0.00 144.51
9.60 18.76 1.72
9.60 18.76 1.72 0.00
131.37 278.97 18.27 4.28 24.91 457.80 3,133.22
140.98 297.73 19.99 4.28 27.04 490.01 3,384.40
30.27 63.61 3.10 1.00 5.70 103.67 739.02
171.25 361.34 23.08 5.28 32.74 593.69 4,123.41
2.13 32.21 106.67
2.13 32.21 251.18
1.13 1.19 0.66 1.68 1.17
21.51 44.26 2.25 0.72 4.42

73.16
192.76 405.60 25.33 6.00 37.15

666.85
638.42 134219.16 4758.37
578.63 4702.05
Penalty (PF) TOD CHARGES Penalty (CD)
15.80 16.78 10.76 4745.40
Total including other Revenues
Page 249 of 308
Annexure I (b) Category-wise Revenue from Revised Tariffs for FY 2014-15

Revenue Calculation
Relevant sales & No. of consumers Components of tariff Transport load/demand data for Division revenue calculation Energy Loss charge (Rs. Single Three Recovery Demand / kWh) phase phase Energy Billing Charge Single Three Total charge meter (Rs./ meter (Rs./ consumpti Demand (Rs/kWh) phase Phase Consumer (Rs./ kVA / connection connection on (kWh) (kVA) month) / month) / month) 206 295241 329585 38490 9925 204795 14034 65 2 2688 122 11 1 801 570 1 117 8 1456 3 898121 0 14706 25140 18901 25670 21567 21932 6045 2667 3754 2166 1225 128 144 130 3 1444 15 621 405 146663 206 309947 354725 57391 35595 226362 35966 6110 2669 6442 2288 1236 129 945 700 4 1561 23 2077 408 1044784 200.00 400.00 200.00 250.00 200.00 400.00 200.00 325.00 425.00 200.00 200.00 3.00 40.00 75.00 75.00 100.00 250.00 250.00 200.00 200.00 150.00 150.00 150.00 0.80 2.65 5.35 7.50 9.55 7.45 10.00 9.30 9.70 6.35 8.55 8.10 8.25 14.35 7.90 4.40 11.50 4.55 8.30 8.30 0.12 0.55 1.03 1.44 1.85 1.48 2.20 2.15 2.18 1.40 1.96 1.75 1.72 3.16 1.52 0.87 2.53 0.83 1.83 1.83 0.68 731.65 624.27 191.90 372.41 716.38 501.33 349.46 93468.91 Revenue from fixed charges (Rs. Crore) Total Total Revenue Revenue from Revenue from Energy from TDLR Electricity charges (Rs. Crore) Electricity (Rs Crore) Fixed And Business charge for Total Fixed Transport (Rs. Crore) kVA charge (Rs Crore) demand 0.00 14.88 34.19 6.87 5.81 67.91 10.79 22.43 47.66 2.51 1.17 22795.19 14329.85 0.45 9104.09 0.00 0.00 0.75 0.01 0.62 14507.94 352809 146 3.48 85 2.18 5.47 3.44 22.43 47.66 2.51 1.17 5.47 3.44 0.45 2.18 0.00 0.75 0.01 0.62 3.48 231 0.05 193.89 333.98 143.92 355.65 533.70 501.33 325.00 671.15 15.63 24.22 48.64 45.20 4.25 26.89 0.81 53.67 0.63 30.85 45.02 3354 0.06 208.76 368.17 150.79 361.46 601.61 512.12 347.43 718.81 18.14 25.39 54.11 48.64 4.70 29.08 0.81 54.42 0.64 31.47 48.50 3585 0.01 40.24 64.30 27.63 68.90 106.02 110.29 75.13 150.84 3.45 5.55 10.51 9.42 0.93 5.17 0.16 11.81 0.11 6.80 9.93 707 0.06 249.00 432.47 178.42 430.36 707.63 622.41 422.56 869.65 21.58 30.94 64.62 58.07 5.63 34.25 0.97 66.22 0.75 38.27 58.43 4292
Tariff Category
Slab
Total FAC Revenue Revenue Rates From FAC including FAC 0.09 0.01 0.38 27.80 0.73 45.57 1.05 20.15 1.34 49.90 1.10 78.80 2.50 125.33 1.58 55.21 1.61 111.40 1.04 2.56 2.16 6.12 1.28 7.69 1.24 6.79 2.29 0.68 1.12 3.81 0.72 0.13 1.89 8.82 0.55 0.08 1.51 5.61 1.42 7.70
564
BPL LT - I
0 - 30 0 - 100 101 - 300 301 - 500 > 500
LT - II (a)
0-500 > 500
691.90 198603.23 24.61 28.33 60.05 54.79 2.96 34.04 1.85 46.67 1.39 37.16 54.24 4526
LT - IX (a) Pub. all hosp/Sch. units LT - IX (b) Charitable all units org. Total LT HT Category HT - I HT - II HT - III HT - IV HT-V Total HT Total all units all units all units all units all units all units
0.07 276.81 478.04 198.57 480.26 786.44 747.75 477.78 981.04 24.14 37.06 72.30 64.86 6.31 38.06 1.11 75.04 0.83 43.88 66.13
4856
0 0 0 0 0 0 898121
42 103 10 3 15 173 146836
42 103 10 3 15 173 1044957 250.00
200.00 200.00 200.00
8.00 8.60 5.97 11.25
1.59 1.71 0.91 2.33 1.51
210.10 399.50 35.32 4.47 40.71 690
44153.99 94032.15 10392.45 0.00 9581.35 158160 0
10.60 22.57 2.49
10.60 22.57 2.49 0.00
168.08 343.57 21.10 5.03 31.55 569 3,923.81
178.68 366.14 23.59 5.03 33.85 607 4,192.39
33.41 68.32 3.21 1.04 6.15 112 819.34
212.09 434.46 26.81 6.07 39.99 719 5,011.73
200.00
7.75
2.30 38 122.63
2.30 38 268.59
1.13 1.19 0.66 1.68 1.17
23.74 47.54 2.33 0.75 4.76

79
235.83 482.00 29.14 6.83 44.76

799
5216.16 510969.15
643.30
5655.03
Penalty (PF) TOD CHARGES Penalty (CD) Total including other Revenues
17.32 18.40 11.80 5702.54 Rs. Crore
Page 250 of 308
Annexure I (c) Category-wise Revenue from Revised Tariffs for FY 2015-16

Revenue Calculation
No. of consumers Tariff Category Slab Single phase Three Phase Transport Division Energy Loss charge (Rs. Single Three phase Demand / kWh) Recovery phase Energy Charge Total meter (Rs./ charge meter (Rs./ consumpti (Rs/kWh) Consumer connection / (Rs./ kVA / connection on (kWh) month) month) / month) 208 313047 358273 57965 35950 228626 36325 6172 2695 6507 2311 1248 130 954 707 4 1577 23 2097 412 1055231 200.00 400.00 200.00 250.00 200.00 400.00 200.00 325.00 425.00 200.00 200.00 3.00 40.00 75.00 75.00 100.00 250.00 250.00 200.00 200.00 150.00 150.00 150.00 1.00 3.00 6.40 8.80 10.80 8.45 10.95 10.30 10.70 7.00 9.30 8.90 8.90 15.00 8.90 4.90 12.50 5.10 9.00 9.00 0.12 0.55 1.03 1.44 1.85 1.48 2.20 2.15 2.18 1.40 1.96 1.75 1.72 3.16 1.52 0.87 2.53 0.83 1.83 1.83 Components of tariff Relevant sales & load/demand data for revenue calculation Revenue from fixed charges (Rs. Crore) Total Total Revenue Revenue from Revenue from Energy from TDLR Electricity charges (Rs. Crore) Electricity (Rs Crore) Fixed And Business charge for Total Fixed Transport (Rs. Crore) kVA charge (Rs Crore) demand 0.00 15.03 34.53 6.93 5.87 68.59 10.90 25.78 54.73 25.78 54.73 2.54 1.18 5.72 3.60 5.72 3.60 0.46 2.31 2.31 0.00 0.76 0.01 0.63 4.12 96.25 4.12 244 0.09 229.64 419.99 178.69 421.62 690.09 626.55 413.60 850.00 17.92 27.42 55.83 51.02 4.64 32.02 0.97 65.27 0.74 45.43 57.81 4189 0.09 244.66 454.52 185.63 427.49 758.68 637.45 439.38 904.72 20.46 28.60 61.55 54.62 5.10 34.33 0.97 66.03 0.75 46.06 61.93 4433 0.01 42.10 67.59 29.24 72.22 120.87 125.88 86.33 173.18 3.58 5.78 10.98 9.86 0.98 5.47 0.17 13.21 0.12 9.24 11.75 789 0.10 286.76 522.11 214.87 499.71 879.55 763.33 525.71 1,077.90 24.05 34.38 72.53 64.48 6.08 39.80 1.15 79.24 0.87 55.30 73.69 5222
Billing Demand (kVA)
Total FAC Revenue Revenue Rates From FAC including FAC 0.09 0.38 0.73 1.05 1.34 1.10 2.50 1.58 1.61 1.04 2.16 1.28 1.24 2.29 1.12 0.72 1.89 0.55 1.51 1.42 0.01 0.11 29.09 315.85 47.90 570.02 21.32 236.19 52.31 552.03 89.83 969.38 143.05 906.38 63.45 589.16 127.90 1205.80 2.66 26.71 6.37 40.75 8.03 80.56 7.11 71.59 0.71 6.79 4.03 43.83 0.14 1.29 9.87 89.10 0.08 0.95 7.62 62.92 9.12 82.81
631 5852
BPL LT - I
0 - 30 0 - 100 101 - 300 301 - 500 > 500
208 298194 332881 38875 10024 206843 14174 66 2 2715 124 11 1 809 576 1 118 8 1470 3 907103
0 14853 25392 19090 25926 21783 22151 6106 2693 3792 2187 1237 129 145 131 3 1459 15 627 409 148128
0.89 765.46 656.23 203.06 390.39 816.68 572.19 401.55 794.39 25.61 29.49 62.74 57.33 3.10 35.98 1.99 52.21 1.45 50.48 64.23 4985 17,180 401035 9,622 23,816 14,992 107,403 228,021
LT - II (a)
0-500 > 500
2.538 1.179 0.458 0.001 0.757 0.006 0.629 147
LT - IX (a) Pub. all hosp/Sch. units LT - IX (b) Charitable all units org. Total LT HT Category HT - I HT - II HT - III HT - IV HT-V Total HT Total all units all units all units all units all units all units
0 0 0 0 0 0 907103
42 104 10 3 15 174 148302
42 104 10 3 15 174 1055405 250.00
200.00 200.00 200.00
9.00 9.70 6.65 12.00
1.59 1.71 0.91 2.33 1.51
231.72 431.68 36.75 4.69 44.38 749 5734.66
48,697 101,606 10,811
0.001
11.69 24.39 2.59
11.69 24.39 2.59 0.00
208.55 418.73 24.42 5.62 39.06 696 4,885.74
220.24 443.12 27.02 5.63 41.57 738 5,170.58
36.84 73.82 3.34 1.09 6.70 122 910.37
257.08 516.94 30.36 6.72 48.27 859 6,080.95
200.00
8.80
10,447 171561
0.001
2.51 41
2.51 41
1.13 1.19 0.66 1.68 1.17
26.18 51.37 2.43 0.79 5.19

86
283.27 568.31 32.79 7.51 53.46

945
716.56 6797.51
Penalty (PF) TOD CHARGES Penalty (CD)
19.05 20.22 12.97 6849.76 Rs. Crore
Total including other Revenues
Page 251 of 308
ANNEXURE II (A) THE BEST UNDERTAKING (Of the Brihan Mumbai Mahanagarpalika) SCHEDULE OF ELECTRICITY TARIFFS (With Effect from 1 September, 2013) The Maharashtra Electricity Regulatory Commission, in exercise of the powers vested in it under Section 61 and Section 62 of the Electricity Act, 2003 and all other powers enabling it in this behalf, has determined, by its Order dated 28 August, 2013 in Case No.26 of 2013, the tariff for supply of Electricity by BEST for various classes of consumers as applicable from 1 September, 2013. General 1. These tariffs supersede all tariffs so far in force including in the case where any agreement provides specifically for continuance of old agreemental tariff, or any modifications thereof as may have been already agreed upon. 2. Tariffs are subject to revision and/or surcharge that may be levied by BEST from time to time as per the directives of the Commission. 3. The tariffs are exclusive of Electricity Duty, Tax on Sale of Electricity (ToSE) and other charges as levied by Government or other competent authorities and the same, will be payable by the consumers in addition to the charges levied as per the tariffs hereunder. 4. The tariffs are applicable for supply at one point only. 5. BEST reserves the right to measure the Maximum Demand on any period shorter than 30 minutes period of maximum use, subject to conformity with the prevalent Supply Code, in cases where BEST considers that there are considerable load fluctuations in operation. 6. The tariffs are subject to the provisions of the MERC (Electricity Supply Code and Other Conditions of Supply) Regulation, 2005 in force (i.e., as on 1 September, 2013) and directions, if any that may be issued by the Commission from time to time. 7. Unless specifically stated to the contrary, the figures of Energy Charge relate to Rupees per unit (kWh) charge for energy consumed during the month. 8. Fuel Adjustment Costs (FAC) Charge as may be approved by the Commission from time to time shall be applicable to all categories of consumers and will be charged over and above the tariffs on the basis of FAC formula specified by the Commission and computed on a half yearly basis.
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LOW TENSION (LT) TARIFF LT I: LT Residential (BPL) Applicability Residential consumers who have a sanctioned load of upto and less than 0.1 kW, and who have consumed less than 360 units per annum in the previous financial year. The applicability of Below Poverty Line (BPL) category will have to be assessed at the end of each financial year. In case any BPL consumer has consumed more than 360 units in the previous financial year, then the consumer will henceforth, be considered under the LT-I residential category. Once a consumer is classified under the LT-I category, then he cannot be classified under BPL category. The categorisation of such BPL consumers will be reassessed at the end of the financial year, on a pro-rata basis. Similarly, the classification of BPL consumers who have been added during the previous year would be assessed on a pro-rata basis, i.e., 30 units per month. All the new consumers subsequently added in any month with sanctioned load of upto and less than 0.1 kW and consumption between 1 to 30 units (on pro rata basis of 1 unit/day) in the first billing month, will be considered in BPL Category. Rate Schedule - Effective from 1 September, 2013 to 31 March, 2014 (FY 2013-14) Consumption Slab ( kWh) Fixed/Demand Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) 0.55 Transport Deficit Loss Recovery Charge (Rs/kWh) 0.12
BPL Category
Rs. 3 per month
LT I: LT Residential Applicability Electricity used at Low/Medium Voltage for operating various appliances used for purposes like lighting, heating, cooling, cooking, washing/cleaning, entertainment/leisure, pumping in the following places: a) Private residential premises, b) Premises exclusively used for worship such as temples, gurudwaras, churches, mosques, etc. Provided that Halls, Gardens or any other portion of the premises that may be let out for consideration or used for commercial activities would be charged at LT-II tariff as applicable. c) All Students Hostels affiliated to Educational Institutions. d) All Ladies Hostels, such as Students (Girls) Hostels, Working Women Hostels, etc.
Page 253 of 308
e) Other type of Hostels, like (i) Homes/Hostels for Destitute, Handicap or Mentally deranged persons (ii) Remand Homes (iii) Dharamshalas, etc., subject to verification and confirmation by BESTs concerned Zonal Chief Engineer. f) Telephone booth owned/operated by handicapped person subject to verification and confirmation by BESTs concerned Zonal Chief Engineer. g) Residential premises used by professionals like Lawyers, Doctors, Professional Engineers, Chartered Accountants, etc., in furtherance of their professional activity in their residences but shall not include Nursing Homes and any Surgical Wards or Hospitals. Rate Schedule Effective from 1 September, 2013 to 31 March, 2014 (FY 2013-14) Consumption Slab ( kWh) Fixed/ Demand Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) 2.45 4.50 6.35 8.00 Transport Deficit Loss Recovery Charge (Rs/kWh) 0.55 1.03 1.44 1.85
0-100 units 101 300 units 301 500 units Above 500 units (balance units) Note: a)
Rs. 40 per month Rs. 75 per month$$ Rs. 100 per month$$
$$
: Above fixed charges are for single phase connections. Fixed charge of Rs. 150 per month will be levied on residential consumers availing 3 phase supply. Additional Fixed Charge of Rs. 150 per 10 kW load or part thereof above 10 kW load shall be payable.
LT II: Low Tension Non-Residential or Commercial Applicability Electricity used at Low/Medium Voltage in all non-residential, non-industrial premises and/or commercial premises for commercial consumption meant for operating various appliances used for purposes such as lighting, heating, cooling, cooking, washing/cleaning, entertainment/leisure, pumping in following places: a) Non-Residential, Commercial and Business premises, including Shopping malls b) Combined lighting and power services for Entertainment including film studios, cinemas and theatres, including multiplexes, Hospitality, Leisure, Meeting Halls and Recreation places. c) Electricity used for the external illumination of monumental/historical/heritage buildings approved by MTDC. Page 254 of 308
Rate Schedule - Effective from 1 September, 2013 to 31 March, 2014 (FY 2013-14) Consumption Slab Fixed/Demand ( kWh) Charge (a) 0-20 kW 0-500 units Rs. 250 Above 500 units month (balance units) per 6.55 9.05 8.45 8.85 0.00 0.50 0.00 1.00 -0.75 1.48 2.20 2.15 2.18 Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh)
(b) > 20 kW and Rs. 200 per 50 kW kVA per month (c ) > 50 kW 0600 to 0900 hours 0900 to 1200 hours 1200 to 1800 hours 1800 to 2200 hours 2200 to 0600 hours
TOD Tariffs (in addition to above base tariffs)
Note: a) The ToD tariff is applicable to LT-II (B) and (C) category, and optionally available to LT- II (A) having ToD meter installed. LT III: LT- Industrial upto 20 kW Applicability Electricity used at Low/Medium Voltage in premises for purpose of manufacturing, including that used within these premises for general lighting, heating/cooling, etc., having a sanctioned load upto and including 20 kW (26.8 HP). This consumer category also includes IT industry and IT enabled services (as defined in the Government of Maharashtra Policy). Rate Schedule - Effective from 1 September, 2013 to 31 March, 2014 (FY 2013-14) Consumption Slab Fixed/Demand ( kWh) Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 0-20 kW 0-500 units Rs. 325 per 5.70 1.40
Page 255 of 308
Consumption Slab Fixed/Demand ( kWh) Charge
Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh)
month Above 500 units Rs. 425 (balance units) month 0600 to 0900 hours 0900 to 1200 hours 1200 to 1800 hours 1800 to 2200 hours 2200 to 0600 hours per 7.70 1.96
TOD Tariffs ( Optional - in addition to above base tariffs) 0.00 0.50 0.00 1.00 -0.75
Note: a) The ToD tariff is optionally available to LT- III category consumers having ToD meter installed. LT IV: LT Industrial above 20 kW load Applicability Electricity used at Low/Medium Voltage in premises for purpose of manufacturing including that used within these premises for general lighting, heating/cooling, etc. and having sanctioned load greater than 20 kW (26.8 HP). This consumer category also includes IT industry and IT enabled services (as defined in the Government of Maharashtra Policy). Rate Schedule - Effective from 1 September, 2013 to 31 March, 2014 (FY 2013-14) Consumption Slab Fixed/Demand ( kWh) Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 1.75 1.72
(a) Above 20 kW Rs. 200 per and upto 100 kW kVA per month (b) Above 100 kW
7.25 7.40
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0600 to 0900 hours 0900 to 1200 hours 1200 to 1800 hours 1800 to 2200 hours 2200 to 0600 hours
0.00 0.50 0.00 1.00 -0.75
LT V: LT - Advertisements and Hoardings Applicability Electricity used for the purpose of advertisements, hoardings and other conspicuous consumption such as external flood light, displays, neon signs at departmental stores, malls, multiplexes, theatres, clubs, hotels and other such entertainment/leisure establishments except those specifically covered under LT-II as well as electricity used for the external illuminations of monumental, historical/heritage buildings approved by MTDC, which shall be covered under LT-II category depending upon Sanctioned Load. Rate Schedule - Effective from 1 September, 2013 to 31 March, 2014 (FY 2013-14) Consumption Slab Fixed/Demand ( kWh) Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 3.16
All Units
Rs. 400 month
per
13.50
Note a) The electricity, that is used for the purpose of indicating/displaying the name and other details of the shops or Commercial premises, for which electric supply is rendered, shall not be under LT V tariff Category. Such usage of electricity shall be covered under the prevailing tariff of such shops or commercial premises. LT VI: LT- Street Lights Applicability Electricity used at Low/Medium Voltage for purpose of public street lighting, lighting in public gardens, traffic island, bus shelters, public sanitary conveniences, police chowkies, traffic lights, public fountains, other such common public places irrespective of whether such facilities are being provided by the Government or the Municipality, or Port Trust or other private parties.
Page 257 of 308
Rate Schedule - Effective from 1 September, 2013 to 31 March, 2014 (FY 2013-14) Consumption Slab Fixed/Demand ( kWh) Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 1.52
All Units
Rs. 200 per kVA per month
6.75
Note Street Lightings having Automatic Timers for switching On/Off the street lights would be levied Demand Charges on lower of the following a) 50 percent of Contract Demand or b) Actual Recorded Demand
LT VII: LT-Temporary Supply Applicability LT VII (A) Temporary Supply Religious (TSR) Electricity supplied at Low/Medium Voltage for temporary purposes during public religious functions like Ganesh Utsav, Navaratri, Eid, Moharam, Ram Lila, Ambedkar Jayanti, Diwali, Christmas, Guru Nanak Jayanti, etc., or areas where community prayers are held. LT VII (B) - Temporary Supply Others (TSO) Electricity used at Low/Medium Voltage on a temporary basis for any construction work, decorative lighting for exhibitions, circus, film shooting, marriages, etc. and any activity not covered under tariff LT VII (A), and electricity used at low/medium voltage on an emergency basis for purpose of fire fighting activity by the fire department in residential/other premises. Rate Schedule - Effective from 1 September, 2013 to 31 March, 2014 (FY 2013-14) Consumption Slab ( kWh) Fixed/Demand Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 0.87
LT VII (A) All Rs. 200 per month Units
3.50
Page 258 of 308
Consumption Slab ( kWh)
Fixed/Demand Charge
Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 2.53
LT VII (B) All Rs. 400 per month Units
10.50
Note : In case of LT VII (B) the Additional fixed charges of Rs. 200 per 10 kW load or part thereof above 10 kW load shall be payable. LT VIII: LT- Crematorium and Burial Grounds Applicability Electricity used at Low/Medium Voltage in Crematorium and Burial Grounds for all purposes including lighting, and will be applicable only to the portion catering to such activities, and in case part of the area is being used for other commercial purposes, then a separate meter will have to be provided for the same, and the consumption in this meter will be chargeable under LT-II Commercial rates as applicable. Rate Schedule - Effective from 1 September, 2013 to 31 March, 2014 (FY 2013-14) Consumption Slab Fixed/Demand ( kWh) Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 0.83
All Units
Rs. 200 month
per
3.75
LT IX: LT-Hospitals & Educational Institutions Applicability LT IX (A) Hospitals & Educational Institutions (0 to 20 kW) Electricity used at low/medium voltage in premises exclusively used by Hospitals, Dispensaries, Schools, Colleges and such other Educational institutions, irrespective of ownership, and religious and charitable institutions, and having a sanctioned load upto and including 20 kW (26.8 HP). Halls or gardens or any portion of the premises that may be let out for consideration or used for commercial activities at any time would be charged as per the LT II categories.
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LT IX (B) Hospitals & Educational Institutions (Above 20 kW) Electricity used at low/medium voltage in premises exclusively used by Hospitals, Dispensaries, Schools, Colleges and such other Educational institutions, irrespective of ownership, and religious and charitable institutions, and having a sanctioned load above 20 kW (26.8 HP). Halls or gardens or any portion of the premises that may be let out for consideration or used for commercial activities at any time would be charged as per the LT II categories. Rate Schedule - Effective from 1 September, 2013 to 31 March, 2014 (FY 2013-14) Variable Charges (Rs/kWh) Consumption Slab (kWh) Fixed/Demand Charge Transport Division Loss Recovery Charge (Rs/kWh) 1.83 1.83
Energy Charge (Rs./kWh) 7.30 7.30
LT IX (A) All Units LT IX (B) All Units
Rs. 250 per month Rs. 200 per kVA per month
TOD Tariffs (in addition to above base tariffs) 0600 to 0900 hours 0900 to 1200 hours 1200 to 1800 hours 1800 to 2200 hours 2200 to 0600 hours 0.00 0.50 0.00 1.00 -0.75
Note: a) The ToD tariff is applicable to LT-IX (B) category, and optionally available to LT- IX (A) having ToD meter installed.
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HIGH TENSION (HT) - TARIFF HT I: HT Industry Applicability This category includes consumers taking 3-phase electricity supply at High Voltage for purpose of manufacturing. This Tariff shall also be applicable to IT Industry & IT enabled services (as defined in the Government of Maharashtra policy), taking 3-phase electricity supply at High Voltage.
Rate Schedule - Effective from 1 September, 2013 to 31 March, 2014 (FY 2013-14) Consumption Slab ( kWh) Fixed/ Demand Charge Variable Charges (Rs/kWh) Transport Division Loss Recovery Charge (Rs/kWh) 1.59
Energy Charge (Rs./kWh) All Units Rs 200 per kVA per month 6.90
HT II: HT- Commercial Applicability This category includes consumers taking electricity supply at High Voltage for commercial purposes, including Hotels, Shopping Malls, film studios, cinemas and theatres, including multiplexes. The Consumers belonging to HT II requiring a single point supply for the purpose of downstream consumption by separately identifiable entities will have to either operate through a franchisee route or such entities will have to take individual connections under relevant category. These downstream entities will pay appropriate tariff as applicable as per BEST Tariff Schedule, i.e., LT II.
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Rate Schedule - Effective from 1 September, 2013 to 31 March, 2014 (FY 2013-14) Consumption Slab ( kWh) Fixed/ Demand Charge Variable Charges (Rs/kWh) Transport Division Loss Recovery Charge (Rs/kWh) 1.71
HT III: HT- Group Housing Society Applicability This category includes Group Housing Societies taking single point electricity supply at High Voltage for consumption by individual dwellings. Such individual dwellings will pay appropriate tariff LT I: LT- Residential as per BEST Tariff Schedule in force. Rate Schedule - Effective from 1 September, 2013 to 31 March, 2014 (FY 2013-14) Consumption Slab ( kWh) Fixed/ Demand Charge Variable Charges (Rs/kWh) Transport Division Loss Recovery Charge (Rs/kWh) 0.91
HT IV- HT - Temporary Supply Applicability Electricity used at High Voltage on a temporary basis of supply for any construction work, decorative lighting for exhibitions, circus, film shooting, marriages, etc.
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This category also includes electricity supplied at High Voltage for temporary purposes during public religious functions like Ganesh Utsav, Navaratri, Eid, Moharam, Ram Lila, Ambedkar Jayanti, Diwali, Christmas, Guru Nanak Jayanti, etc., or areas where community prayers are held. Rate Schedule - Effective from 1 September, 2013 to 31 March, 2014 (FY 2013-14) Consumption Slab ( kWh) Fixed/ Demand Charge Variable Charges (Rs/kWh) Transport Division Loss Recovery Charge (Rs/kWh) 2.33
Energy Charge (Rs./kWh) All Units Rs. 250 month per 10.00
HT V- HT - Hospitals & Educational Institutions Applicability Electricity used at High voltage in premises exclusively used by Hospitals, Dispensaries, School, Colleges and such other Educational institutions, irrespective of ownership, and religious and charitable institutions. Halls or gardens or any portion of the premises that may be let out for consideration or used for commercial activities at any time would be charged as per the HT II category. Rate Schedule - Effective from 1 September, 2013 to 31 March, 2014 (FY 2013-14) Consumption Slab ( kWh) Fixed/ Demand Charge Variable Charges (Rs/kWh) Energy Charge (Rs./kWh) All Units Rs. 200 per kVA per month 6.60 Transport Division Loss Recovery Charge (Rs/kWh) 1.51
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MISCELLANEOUS AND GENERAL CHARGES Fuel Adjustment Cost (FAC) Charges The FAC charge will be determined based on the approved Formula and relevant directions, as may be given by the Commission from time to time and will be applicable to all consumer categories for their entire consumption.
In case of any variation in the fuel prices and power purchase prices with respect to these levels, BEST shall pass on adjustments, due to changes in the cost of power procured due to change in
fuel cost, through the Fuel Adjustment Cost (FAC) component of Z-factor Charge, as specified in Regulations 13.4 to 13.9 of the MERC MYT Regulations, 2011.
The details for each month shall be available on BEST website www.bestundertaking.com Electricity Duty and Tax on Sale of Electricity The electricity duty and Tax on Sale of Electricity will be charged in addition to charges levied as per the tariffs mentioned hereunder (as approved by the Commission) as per the Government guidelines from time to time. However, the rate and the reference number of the Government Resolution/ Order vide which the Electricity Duty and Tax on Sale of Electricity is made effective, shall be stated in the bill. A copy of the said resolution / Order shall be made available on the website www.bestundertaking.com Power Factor Calculation Wherever, the average power factor measurement is not possible through the installed meter, the following method for calculating the average power factor during the billing period shall be adopted-
Average Power Factor =
Total (kWH ) Total (kVAh )
Wherein the kVAh is
(kWh) ( RkVAh )
2
(i.e. Square Root of the summation of the squares of kWh and RkVAh ) Power Factor Incentive (Applicable for HT I, HT II and HT V categories, and LT II (B), LT II (C), LT IV (A), LT IV (B) and LT IX (B) categories)
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Whenever the average power factor is more than 0.95, an incentive shall be given at the rate of the following percentages of the amount of the monthly bill including energy charges, reliability charges, FAC, and Fixed/Demand Charges, but excluding Taxes and Duties: Sl. 1 2 3 4 5 6 Range of Power Factor 0.951 to 0.954 0.955 to 0.964 0.965 to 0.974 0.975 to 0.984 0.985 to 0.994 0.995 to 1.000 Power Factor Level 0.95 0.96 0.97 0.98 0.99 1.00 Incentive 0% 1% 2% 3% 5% 7%
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Prompt Payment Discount A prompt payment discount of one percent on the monthly bill (excluding Taxes and Duties) shall be available to the consumers if the bills are paid within a period of 7 working days from the date of issue of the bill. Delayed Payment Charges (DPC) In case the electricity bills are not paid within the due date mentioned on the bill, delayed payment charges of 2 percent on the total electricity bill (including Taxes and Duties) shall be levied on the bill amount. For the purpose of computation of time limit for payment of bills, the day of presentation of bill or the date of the bill or "the date of issue of the bill", etc. as the case may be, will not be excluded. Rate of Interest on Arrears The rate of interest chargeable on arrears will be as given below for payment of arrearsSr.No. 1 2 3 Delay in Payment ( months) Payment after due date upto 3 months ( 0-3) Payment made after 3 months and before 6 months (3-6) Payment made after 6 months (>6) Interest Rate per annum (%) 12% 15% 18%
Load Factor Incentive Consumers having load factor over 75% upto 85% will be entitled to a rebate of 0.75% on the energy charges for every percentage point increase in load factor from 75% to 85%. Consumers having a load factor over 85 % will be entitled to rebate of 1% on the energy charges for every percentage point increase in load factor from 85%. The total rebate under this head will be subject to a ceiling of 15% of the energy charges for that consumer. This incentive is limited to HT I, HT II and HT V categories only. Further, the load factor rebate will be available only if the consumer has no arrears with BEST, and payment is made within seven days from the date of the bill. However, this incentive will be applicable to consumers where payment of arrears in instalments has been granted by BEST, and the same is being made as scheduled. BEST has to take a commercial decision on the issue of how to determine the time frame for which the payments should have been made as scheduled, in order to be eligible for the Load Factor incentive. The Load Factor has been defined below: Page 266 of 308
Load Factor
Maximum consumption possible = Contract Demand (kVA) x Actual Power Factor x (Total no. of hrs during the month less planned load shedding hours*) * - Interruption/non-supply to the extent of 60 hours in a 30 day month has been built in the scheme. In case the billing demand exceeds the contract demand in any particular month, then the load factor incentive will not be payable in that month. (The billing demand definition excludes the demand recorded during the non-peak hours i.e. 22:00 hrs to 06:00 hrs and therefore, even if the maximum demand exceeds the contract demand in that duration, load factor incentives would be applicable. However, the consumer would be subjected to the penal charges for exceeding the contract demand and has to pay the applicable penal charges). Penalty for exceeding Contract Demand In case, a consumer (availing Demand based Tariff) exceeds his Contract Demand, he will be billed at the appropriate Demand Charge rate for the Demand actually recorded and will be additionally charged at the rate of 150% of the prevailing Demand Charges (only for the excess Demand over the Contract Demand). In case any consumer exceeds the Contract Demand on more than three occasions in a calendar year, the action taken in such cases would be governed by the Supply Code. Additional Demand Charges for Consumers having Captive Power Plant For customers having Captive Power Plant (CPP), the additional demand charges would be at a rate of Rs. 20/kVA/month only on extent of Stand-by demand component, and not on the entire Contract Demand. Additional Demand Charges will be levied on such consumers on the Standby component, only if the consumers demand exceeds the Contract Demand. Security Deposit 1) Subject to the provisions of sub-section (5) of Section 47 of the Act, BEST would require any person to whom supply of electricity has been sanctioned to deposit a security in accordance with the provisions of clause (a) of subsection (1) of Section 47 of the Electricity Act, 2003. 2) The amount of the security shall be an equivalent of the average of three months of billing or the billing cycle period, whichever is lesser. For the purpose of determining the
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average billing, the average of the billing to the consumer for the last twelve months, or in cases where supply has been provided for a shorter period, the average of the billing of such shorter period, shall be considered 3) Where BEST requires security from a consumer at the time of commencement of service, the amount of such security shall be estimated by the Distribution Licensee based on the tariff category and contract demand/sanctioned load, load factor, diversity factor and number of working shifts of the consumer. 4) BEST shall re-calculate the amount of security based on the actual billing of the 5) consumer once in each financial year. Where the amount of security deposit maintained by the consumer is higher than the security required to be maintained under this Supply Code Regulation 11, BEST shall refund the excess amount of such security deposit in a single payment: Provided that such refund shall be made upon request of the person who gave the security and with an intimation to the consumer, if different from such person, shall be, at the option of such person, either by way of adjustment in the next bill or by way of a separate cheque payment within a period of thirty (30) days from the receipt of such request: Provided further that such refund shall not be required where the amount of refund does not exceed the higher of ten (10) per cent of the amount of security deposit required to be maintained by the consumer or Rupees Three Hundred. Where the amount of security re-calculated pursuant as above, is higher than the security deposit of the consumer, BEST shall be entitled to raise a demand for additional security on the consumer. Provided that the consumer shall be given a time period of not less than thirty days to deposit the additional security pursuant to such demand. Upon termination of supply, BEST shall, after recovery of all amounts due, refund the remainder amount held by the Distribution Licensee to the person who deposited the security, with an intimation to the consumer, if different from such person. A consumer - (i) with a consumption of electricity of not less than one lakh (1,00,000) kilo-watt hours per month; and (ii) with no undisputed sums payable to BEST under Section 56 of the Act may, at the option of such consumer, deposit security, by way of cash, irrevocable letter of credit or unconditional bank guarantee issued by a scheduled commercial bank. BEST shall pay interest on the amount of security deposited in cash (including cheque and demand draft) by the consumer at a rate equivalent to the bank rate of the Reserve Bank of India: Provided that such interest shall be paid where the amount of security deposited in cash under this Regulation 11 of Supply Code is equal to or more than Rupees Fifty.
6)
7)
8)
9)
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10) Interest on cash security deposit shall be payable from the date of deposit by the consumer till the date of dispatch of the refund by BEST. Definitions: Maximum Demand Maximum Demand in Kilowatts or Kilo-Volt-Amperes, in relation to any period shall, unless otherwise provided in any general or specific Order of the Commission, means twice the largest number of kilowatt-hours or kilo-Volt-Ampere-hours supplied and taken during any consecutive thirty minute blocks in that period. Contract Demand Contract Demand means demand in Kilowatt (kW) / Kilo Volt Ampere (kVA), mutually agreed between BEST and the consumer as entered into in the agreement or agreed through other written communication (For conversion of kW into kVA, Power Factor of 0.80 shall be considered). Sanctioned Load Sanctioned Load means load in Kilowatt (kW) mutually agreed between BEST and the consumer
Billing Demand (for LT categories): Monthly Billing Demand will be the higher of the following: a) 65% of the actual Maximum Demand recorded in the month during 0600 hours to 2200 hours. b) 40% of the Contract Demand. Note: c) Demand registered during the period 0600 to 2200 Hrs. will only be considered for determination of the Billing demand. d) In case of change in Contract Demand, the period specified in Clause (a) above will be reckoned from the month following the month in which the change of Contract Demand takes place. Billing Demand (for HT categories): Monthly Billing Demand will be the higher of the following:
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a) Actual Maximum Demand recorded in the month during 0600 hours to 2200 hours. b) 75% of the highest billing demand recorded during preceding eleven months subject to limit of contract demand. c) 50% of the Contract Demand. Note: d) Demand registered during the period 0600 to 2200 Hrs. will only be considered for determination of the Billing demand. e) In case of change in Contract Demand, the period specified in Clause (a) above will be reckoned from the month following the month in which the change of Contract Demand takes place.
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ANNEXURE II (B) THE BEST UNDERTAKING (Of the Brihan Mumbai Mahanagarpalika) SCHEDULE OF ELECTRICITY TARIFFS (With Effect from 1 April, 2014) The Maharashtra Electricity Regulatory Commission, in exercise of the powers vested in it under Section 61 and Section 62 of the Electricity Act, 2003 and all other powers enabling it in this behalf, has determined, by its Order dated 28 August, 2013 in Case No.26 of 2013, the tariff for supply of Electricity by BEST for various classes of consumers as applicable from 1 April, 2014. General 9. These tariffs supersede all tariffs so far in force including in the case where any agreement provides specifically for continuance of old agreemental tariff, or any modifications thereof as may have been already agreed upon. 10. Tariffs are subject to revision and/or surcharge that may be levied by BEST from time to time as per the directives of the Commission. 11. The tariffs are exclusive of Electricity Duty, Tax on Sale of Electricity (ToSE) and other charges as levied by Government or other competent authorities and the same, will be payable by the consumers in addition to the charges levied as per the tariffs hereunder. 12. The tariffs are applicable for supply at one point only. 13. BEST reserves the right to measure the Maximum Demand on any period shorter than 30 minutes period of maximum use, subject to conformity with the prevalent Supply Code, in cases where BEST considers that there are considerable load fluctuations in operation. 14. The tariffs are subject to the provisions of the MERC (Electricity Supply Code and Other Conditions of Supply) Regulation, 2005 in force (i.e., as on 1 April, 2014) and directions, if any that may be issued by the Commission from time to time. 15. Unless specifically stated to the contrary, the figures of Energy Charge relate to Rupees per unit (kWh) charge for energy consumed during the month. 16. Fuel Adjustment Costs (FAC) Charge as may be approved by the Commission from time to time shall be applicable to all categories of consumers and will be charged over and above the tariffs on the basis of FAC formula specified by the Commission and computed on a monthly basis.
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LOW TENSION (LT) TARIFF LT I: LT Residential (BPL) Applicability Residential consumers who have a sanctioned load of upto and less than 0.1 kW, and who have consumed less than 360 units per annum in the previous financial year. The applicability of Below Poverty Line (BPL) category will have to be assessed at the end of each financial year. In case any BPL consumer has consumed more than 360 units in the previous financial year, then the consumer will henceforth, be considered under the LT-I residential category. Once a consumer is classified under the LT-I category, then he cannot be classified under BPL category. The categorisation of such BPL consumers will be reassessed at the end of the financial year, on a pro-rata basis. Similarly, the classification of BPL consumers who have been added during the previous year would be assessed on a pro-rata basis, i.e., 30 units per month. All the new consumers subsequently added in any month with sanctioned load of upto and less than 0.1 kW and consumption between 1 to 30 units (on pro rata basis of 1 unit/day) in the first billing month, will be considered in BPL Category. Rate Schedule - Effective from 1 April, 2014 to 31 March, 2015 (FY 2014-15) Consumption Slab ( kWh) Fixed/Demand Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) 0.80 Transport Deficit Loss Recovery Charge (Rs/kWh) 0.12
BPL Category
Rs. 3 per month
LT I: LT Residential Applicability Electricity used at Low/Medium Voltage for operating various appliances used for purposes like lighting, heating, cooling, cooking, washing/cleaning, entertainment/leisure, pumping in the following places: h) Private residential premises, i) Premises exclusively used for worship such as temples, gurudwaras, churches, mosques, etc. Provided that Halls, Gardens or any other portion of the premises that may be let out for consideration or used for commercial activities would be charged at LT-II tariff as applicable. j) All Students Hostels affiliated to Educational Institutions.
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k) All Ladies Hostels, such as Students (Girls) Hostels, Working Women Hostels, etc. l) Other type of Hostels, like (i) Homes/Hostels for Destitute, Handicap or Mentally deranged persons (ii) Remand Homes (iii) Dharamshalas, etc., subject to verification and confirmation by BESTs concerned Zonal Chief Engineer. m) Telephone booth owned/operated by handicapped person subject to verification and confirmation by BESTs concerned Zonal Chief Engineer. n) Residential premises used by professionals like Lawyers, Doctors, Professional Engineers, Chartered Accountants, etc., in furtherance of their professional activity in their residences but shall not include Nursing Homes and any Surgical Wards or Hospitals. Rate Schedule Effective from 1 April, 2014 to 31 March, 2015 (FY 2014-15) Consumption Slab ( kWh) Fixed/ Demand Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) 2.65 5.35 7.50 9.55 Transport Deficit Loss Recovery Charge (Rs/kWh) 0.55 1.03 1.44 1.85
0-100 units 101 300 units 301 500 units Above 500 units (balance units) Note: b)
$$
LT II: Low Tension Non-Residential or Commercial Applicability Electricity used at Low/Medium Voltage in all non-residential, non-industrial premises and/or commercial premises for commercial consumption meant for operating various appliances used for purposes such as lighting, heating, cooling, cooking, washing/cleaning, entertainment/leisure, pumping in following places: d) Non-Residential, Commercial and Business premises, including Shopping malls e) Combined lighting and power services for Entertainment including film studios, cinemas and theatres, including multiplexes, Hospitality, Leisure, Meeting Halls and Recreation places.
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f) Electricity used for the external illumination of monumental/historical/heritage buildings approved by MTDC. Rate Schedule - Effective from 1 April, 2014 to 31 March, 2015 (FY 2014-15) Consumption Slab Fixed/Demand ( kWh) Charge (a) 0-20 kW 0-500 units Rs. 250 Above 500 units month (balance units) per 7.45 10.00 9.30 9.70 0.00 0.50 0.00 1.00 -0.75 1.48 2.20 2.15 2.18 Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh)
Note: a) The ToD tariff is applicable to LT-II (B) and (C) category, and optionally available to LT- II (A) having ToD meter installed. LT III: LT- Industrial upto 20 kW Applicability Electricity used at Low/Medium Voltage in premises for purpose of manufacturing, including that used within these premises for general lighting, heating/cooling, etc., having a sanctioned load upto and including 20 kW (26.8 HP). This consumer category also includes IT industry and IT enabled services (as defined in the Government of Maharashtra Policy).
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Rate Schedule - Effective from 1 April, 2014 to 31 March, 2015 (FY 2014-15) Consumption Slab Fixed/Demand ( kWh) Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh)
0-20 kW 0-500 units Rs. 325 month per per 6.35 8.55 1.40 1.96
Above 500 units Rs. 425 (balance units) month 0600 to 0900 hours 0900 to 1200 hours 1200 to 1800 hours 1800 to 2200 hours 2200 to 0600 hours
Note: a) The ToD tariff is optionally available to LT- III having ToD meter installed. LT IV: LT Industrial above 20 kW load Applicability Electricity used at Low/Medium Voltage in premises for purpose of manufacturing including that used within these premises for general lighting, heating/cooling, etc. and having sanctioned load greater than 20 kW (26.8 HP). This consumer category also includes IT industry and IT enabled services (as defined in the Government of Maharashtra Policy). Rate Schedule - Effective from 1 April, 2014 to 31 March, 2015 (FY 2014-15) Consumption Slab Fixed/Demand ( kWh) Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 1.75 1.72
(a) Above 20 kW Rs. 200 per and upto 100kW kVA per month (b) Above 100 kW
8.10 8.25
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LT V: LT - Advertisements and Hoardings Applicability Electricity used for the purpose of advertisements, hoardings and other conspicuous consumption such as external flood light, displays, neon signs at departmental stores, malls, multiplexes, theatres, clubs, hotels and other such entertainment/leisure establishments except those specifically covered under LT-II as well as electricity used for the external illuminations of monumental, historical/heritage buildings approved by MTDC, which shall be covered under LT-II category depending upon Sanctioned Load. Rate Schedule - Effective from 1 April, 2014 to 31 March, 2015 (FY 2014-15) Consumption Slab Fixed/Demand ( kWh) Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 3.16
All Units
Rs. 400 month
per
14.35
Note b) The electricity, that is used for the purpose of indicating/displaying the name and other details of the shops or Commercial premises, for which electric supply is rendered, shall not be under LT V tariff Category. Such usage of electricity shall be covered under the prevailing tariff of such shops or commercial premises. LT VI: LT- Street Lights Applicability Electricity used at Low/Medium Voltage for purpose of public street lighting, lighting in public gardens, traffic island, bus shelters, public sanitary conveniences, police chowkies, traffic lights, public fountains, other such common public places irrespective of whether such facilities are being provided by the Government or the Municipality, or Port Trust or other private parties.
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Rate Schedule - Effective from 1 April, 2014 to 31 March, 2015 (FY 2014-15) Consumption Slab Fixed/Demand ( kWh) Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 1.52
All Units Note
7.90
Street Lightings having Automatic Timers for switching On/Off the street lights would be levied Demand Charges on lower of the following c) 50 percent of Contract Demand or d) Actual Recorded Demand
LT VII: LT-Temporary Supply Applicability LT VII (A) Temporary Supply Religious (TSR) Electricity supplied at Low/Medium Voltage for temporary purposes during public religious functions like Ganesh Utsav, Navaratri, Eid, Moharam, Ram Lila, Ambedkar Jayanti, Diwali, Christmas, Guru Nanak Jayanti, etc., or areas where community prayers are held. LT VII (B) - Temporary Supply Others (TSO) Electricity used at Low/Medium Voltage on a temporary basis for any construction work, decorative lighting for exhibitions, circus, film shooting, marriages, etc. and any activity not covered under tariff LT VII (A), and electricity used at low/medium voltage on an emergency basis for purpose of fire fighting activity by the fire department in residential/other premises. Rate Schedule - Effective from 1 April, 2014 to 31 March, 2015 (FY 2014-15) Consumption Slab ( kWh) Fixed/Demand Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 0.87 2.53
LT VII (A) All Rs. 200 per month Units LT VII (B) All Rs. 400 per month Units
4.40 11.50
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Note : In case of LT VII (B) the Additional fixed charges of Rs. 150 per 10 kW load or part thereof above 10 kW load shall be payable. LT VIII: LT- Crematorium and Burial Grounds Applicability Electricity used at Low/Medium Voltage in Crematorium and Burial Grounds for all purposes including lighting, and will be applicable only to the portion catering to such activities, and in case part of the area is being used for other commercial purposes, then a separate meter will have to be provided for the same, and the consumption in this meter will be chargeable under LT-II Commercial rates as applicable. Rate Schedule - Effective from 1 April, 2014 to 31 March, 2015 (FY 2014-15) Consumption Slab Fixed/Demand ( kWh) Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 0.83
All Units
Rs. 200 month
per
4.55
LT IX: LT-Hospitals & Educational Institutions Applicability LT IX (A) Hospitals & Educational Institutions (0 to 20 kW) Electricity used at low/medium voltage in premises exclusively used by Hospitals, Dispensaries, Schools, Colleges and such other Educational institutions, irrespective of ownership, and religious and charitable institutions, and having a sanctioned load upto and including 20 kW (26.8 HP). Halls or gardens or any portion of the premises that may be let out for consideration or used for commercial activities at any time would be charged as per the LT II categories. LT IX (B) Hospitals & Educational Institutions (Above 20 kW) Electricity used at low/medium voltage in premises exclusively used by Hospitals, Dispensaries, Schools, Colleges and such other Educational institutions, irrespective of ownership, and religious and charitable institutions, and having a sanctioned load above 20 kW (26.8 HP). Halls or gardens or any portion of the premises that may be let out for consideration or used for commercial activities at any time would be charged as per the LT II categories.
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Rate Schedule - Effective from 1 April, 2014 to 31 March, 2015 (FY 2014-15) Variable Charges (Rs/kWh) Consumption Slab (kWh) Fixed/Demand Charge Transport Division Loss Recovery Charge (Rs/kWh) 1.83 1.83
Note: b) The ToD tariff is applicable to LT-IX (B) category, and optionally available to LT- IX (A) having ToD meter installed.
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Rate Schedule - Effective from 1 April, 2014 to 31 March, 2015 (FY 2014-15) Consumption Slab ( kWh) Fixed/ Demand Charge Variable Charges (Rs/kWh) Transport Division Loss Recovery Charge (Rs/kWh) 1.59
HT II: HT- Commercial Applicability This category includes consumers taking electricity supply at High Voltage for commercial purposes, including Hotels, Shopping Malls, film studios, cinemas and theatres, including multiplexes. The Consumers belonging to HT II requiring a single point supply for the purpose of downstream consumption by separately identifiable entities will have to either operate through a franchisee route or such entities will have to take individual connections under relevant category. These downstream entities will pay appropriate tariff as applicable as per BEST Tariff Schedule i.e. LT II. Page 280 of 308
HT III: HT- Group Housing Society Applicability This category includes Group Housing Societies taking single point electricity supply at High Voltage for consumption by individual dwellings. Such individual dwellings will pay appropriate tariff LT I: LT- Residential as per BEST Tariff Schedule in force. Rate Schedule - Effective from 1 April, 2014 to 31 March, 2015 (FY 2014-15) Consumption Slab ( kWh) Fixed/ Demand Charge Variable Charges (Rs/kWh) Transport Division Loss Recovery Charge (Rs/kWh) 0.91
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This category also includes electricity supplied at High Voltage for temporary purposes during public religious functions like Ganesh Utsav, Navaratri, Eid, Moharam, Ram Lila, Ambedkar Jayanti, Diwali, Christmas, Guru Nanak Jayanti, etc. or areas where community prayers are held. Rate Schedule - Effective from 1 April, 2014 to 31 March, 2015 (FY 2014-15) Consumption Slab ( kWh) Fixed/ Demand Charge Variable Charges (Rs/kWh) Transport Division Loss Recovery Charge (Rs/kWh) 2.33
Energy Charge (Rs./kWh) All Units Rs. month 250 per 11.25
HT V- HT - Hospitals & Educational Institutions Applicability Electricity used at High voltage in premises exclusively used by Hospitals, Dispensaries, School, Colleges and such other Educational institutions, irrespective of ownership, and religious and charitable institutions. Halls or gardens or any portion of the premises that may be let out for consideration or used for commercial activities at any time would be charged as per the HT II category. Rate Schedule - Effective from 1 April, 2014 to 31 March, 2015 (FY 2014-15) Consumption Slab ( kWh) Fixed/ Demand Charge Variable Charges (Rs/kWh)
Energy Charge (Rs./kWh) All Units Rs. 200 per kVA per month 7.75
Transport Division Loss Recovery Charge (Rs/kWh) 1.51
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MISCELLANEOUS AND GENERAL CHARGES Fuel Adjustment Cost (FAC) Charges The FAC charge will be determined based on the approved Formula and relevant directions, as may be given by the Commission from time to time and will be applicable to all consumer categories for their entire consumption. In case of any variation in the fuel prices and power purchase prices with respect to these levels, BEST shall pass on adjustments, due to changes in the cost of power procured due to change in fuel cost, through the Fuel Adjustment Cost (FAC) component of Z-factor Charge, as specified in Regulations 13.4 to 13.9 of the MERC MYT Regulations, 2011. The details for each month shall be available on BEST website www.bestundertaking.com. Electricity Duty and Tax on Sale of Electricity The electricity duty and Tax on Sale of Electricity will be charged in addition to charges levied as per the tariffs mentioned hereunder (as approved by the Commission) as per the Government guidelines from time to time. However, the rate and the reference number of the Government Resolution/ Order vide which the Electricity Duty and Tax on Sale of Electricity is made effective, shall be stated in the bill. A copy of the said resolution / Order shall be made available on the website www.bestundertaking.com. Power Factor Calculation Wherever, the average power factor measurement is not possible through the installed meter, the following method for calculating the average power factor during the billing period shall be adopted-
Wherein the kVAh is
(kWh) ( RkVAh )
2
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Load Factor
Maximum consumption possible = Contract Demand (kVA) x Actual Power Factor x (Total no. of hrs during the month less planned load shedding hours*) * - Interruption/non-supply to the extent of 60 hours in a 30 day month has been built in the scheme. In case the billing demand exceeds the contract demand in any particular month, then the load factor incentive will not be payable in that month. (The billing demand definition excludes the demand recorded during the non-peak hours i.e. 22:00 hrs to 06:00 hrs and therefore, even if the maximum demand exceeds the contract demand in that duration, load factor incentives would be applicable. However, the consumer would be subjected to the penal charges for exceeding the contract demand and has to pay the applicable penal charges). Penalty for exceeding Contract Demand In case, a consumer (availing Demand based Tariff) exceeds his Contract Demand, he will be billed at the appropriate Demand Charge rate for the Demand actually recorded and will be additionally charged at the rate of 150% of the prevailing Demand Charges (only for the excess Demand over the Contract Demand). In case any consumer exceeds the Contract Demand on more than three occasions in a calendar year, the action taken in such cases would be governed by the Supply Code. Additional Demand Charges for Consumers having Captive Power Plant For customers having Captive Power Plant (CPP), the additional demand charges would be at a rate of Rs. 20/kVA/month only on extent of Stand-by demand component, and not on the entire Contract Demand. Additional Demand Charges will be levied on such consumers on the Standby component, only if the consumers demand exceeds the Contract Demand. Security Deposit 11) Subject to the provisions of sub-section (5) of Section 47 of the Act, BEST would require any person to whom supply of electricity has been sanctioned to deposit a security in accordance with the provisions of clause (a) of subsection (1) of Section 47 of the Electricity Act, 2003. 12) The amount of the security shall be an equivalent of the average of three months of billing or the billing cycle period, whichever is lesser. For the purpose of determining the
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average billing, the average of the billing to the consumer for the last twelve months, or in cases where supply has been provided for a shorter period, the average of the billing of such shorter period, shall be considered 13) Where BEST requires security from a consumer at the time of commencement of service, the amount of such security shall be estimated by the Distribution Licensee based on the tariff category and contract demand/sanctioned load, load factor, diversity factor and number of working shifts of the consumer. 14) BEST shall re-calculate the amount of security based on the actual billing of the consumer once in each financial year. 15) Where the amount of security deposit maintained by the consumer is higher than the security required to be maintained under this Supply Code Regulation 11, BEST shall refund the excess amount of such security deposit in a single payment: Provided that such refund shall be made upon request of the person who gave the security and with an intimation to the consumer, if different from such person, shall be, at the option of such person, either by way of adjustment in the next bill or by way of a separate cheque payment within a period of thirty (30) days from the receipt of such request: Provided further that such refund shall not be required where the amount of refund does not exceed the higher of ten (10) per cent of the amount of security deposit required to be maintained by the consumer or Rupees Three Hundred. 16) Where the amount of security re-calculated pursuant as above, is higher than the security deposit of the consumer, BEST shall be entitled to raise a demand for additional security on the consumer. Provided that the consumer shall be given a time period of not less than thirty days to deposit the additional security pursuant to such demand. 17) Upon termination of supply, BEST shall, after recovery of all amounts due, refund the remainder amount held by the Distribution Licensee to the person who deposited the security, with an intimation to the consumer, if different from such person. 18) A consumer - (i) with a consumption of electricity of not less than one lakh (1,00,000) kilo-watt hours per month; and (ii) with no undisputed sums payable to BEST under Section 56 of the Act may, at the option of such consumer, deposit security, by way of cash, irrevocable letter of credit or unconditional bank guarantee issued by a scheduled commercial bank. 19) BEST shall pay interest on the amount of security deposited in cash (including cheque and demand draft) by the consumer at a rate equivalent to the bank rate of the Reserve Bank of India: Provided that such interest shall be paid where the amount of security deposited in cash under this Regulation 11 of Supply Code is equal to or more than Rupees Fifty.
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20) Interest on cash security deposit shall be payable from the date of deposit by the consumer till the date of dispatch of the refund by BEST. Definitions: Maximum Demand Maximum Demand in Kilowatts or Kilo-Volt-Amperes, in relation to any period shall, unless otherwise provided in any general or specific Order of the Commission, means twice the largest number of kilowatt-hours or kilo-Volt-Ampere-hours supplied and taken during any consecutive thirty minute blocks in that period. Contract Demand Contract Demand means demand in Kilowatt (kW) / Kilo Volt Ampere (kVA), mutually agreed between BEST and the consumer as entered into in the agreement or agreed through other written communication (For conversion of kW into kVA, Power Factor of 0.80 shall be considered). Sanctioned Load Sanctioned Load means load in Kilowatt (kW) mutually agreed between BEST and the consumer
Billing Demand (for LT categories): Monthly Billing Demand will be the higher of the following: e) 65% of the actual Maximum Demand recorded in the month during 0600 hours to 2200 hours. f) 40% of the Contract Demand. Note: g) Demand registered during the period 0600 to 2200 Hrs. will only be considered for determination of the Billing demand. h) In case of change in Contract Demand, the period specified in Clause (a) above will be reckoned from the month following the month in which the change of Contract Demand takes place. Billing Demand (for HT categories): Monthly Billing Demand will be the higher of the following:
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d) Actual Maximum Demand recorded in the month during 0600 hours to 2200 hours. e) 75% of the highest billing demand recorded during preceding eleven months subject to limit of contract demand. f) 50% of the Contract Demand. Note: f) Demand registered during the period 0600 to 2200 Hrs. will only be considered for determination of the Billing demand. g) In case of change in Contract Demand, the period specified in Clause (a) above will be reckoned from the month following the month in which the change of Contract Demand takes place.
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ANNEXURE II (C) THE BEST UNDERTAKING (Of the Brihan Mumbai Mahanagarpalika) SCHEDULE OF ELECTRICITY TARIFFS (With Effect from 1 April, 2015) The Maharashtra Electricity Regulatory Commission, in exercise of the powers vested in it under Section 61 and Section 62 of the Electricity Act, 2003 and all other powers enabling it in this behalf, has determined, by its Order dated 28 August, 2013 in Case No.26 of 2013, the tariff for supply of Electricity by BEST for various classes of consumers as applicable from 1 April, 2015. General 17. These tariffs supersede all tariffs so far in force including in the case where any agreement provides specifically for continuance of old agreemental tariff, or any modifications thereof as may have been already agreed upon. 18. Tariffs are subject to revision and/or surcharge that may be levied by BEST from time to time as per the directives of the Commission. 19. The tariffs are exclusive of Electricity Duty, Tax on Sale of Electricity (ToSE) and other charges as levied by Government or other competent authorities and the same, will be payable by the consumers in addition to the charges levied as per the tariffs hereunder. 20. The tariffs are applicable for supply at one point only. 21. BEST reserves the right to measure the Maximum Demand on any period shorter than 30 minutes period of maximum use, subject to conformity with the prevalent Supply Code, in cases where BEST considers that there are considerable load fluctuations in operation. 22. The tariffs are subject to the provisions of the MERC (Electricity Supply Code and Other Conditions of Supply) Regulation, 2005 in force (i.e., as on 1 April, 2015) and directions, if any that may be issued by the Commission from time to time. 23. Unless specifically stated to the contrary, the figures of Energy Charge relate to Rupees per unit (kWh) charge for energy consumed during the month. 24. Fuel Adjustment Costs (FAC) Charge as may be approved by the Commission from time to time shall be applicable to all categories of consumers and will be charged over and above the tariffs on the basis of FAC formula specified by the Commission and computed on a monthly basis.
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LOW TENSION (LT) TARIFF LT I: LT Residential (BPL) Applicability Residential consumers who have a sanctioned load of upto and less than 0.1 kW, and who have consumed less than 360 units per annum in the previous financial year. The applicability of Below Poverty Line (BPL) category will have to be assessed at the end of each financial year. In case any BPL consumer has consumed more than 360 units in the previous financial year, then the consumer will henceforth, be considered under the LT-I residential category. Once a consumer is classified under the LT-I category, then he cannot be classified under BPL category. The categorisation of such BPL consumers will be reassessed at the end of the financial year, on a pro-rata basis. Similarly, the classification of BPL consumers who have been added during the previous year would be assessed on a pro-rata basis, i.e., 30 units per month. All the new consumers subsequently added in any month with sanctioned load of upto and less than 0.1 kW and consumption between 1 to 30 units (on pro rata basis of 1 unit/day) in the first billing month, will be considered in BPL Category. Rate Schedule - Effective from 1 April, 2015 to 31 March, 2016 (FY 2015-16) Consumption Slab ( kWh) Fixed/Demand Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) 1.00 Transport Deficit Loss Recovery Charge (Rs/kWh) 0.12
BPL Category
Rs. 3 per month
LT I: LT Residential Applicability Electricity used at Low/Medium Voltage for operating various appliances used for purposes like lighting, heating, cooling, cooking, washing/cleaning, entertainment/leisure, pumping in the following places: o) Private residential premises, p) Premises exclusively used for worship such as temples, gurudwaras, churches, mosques, etc. Provided that Halls, Gardens or any other portion of the premises that may be let out for consideration or used for commercial activities would be charged at LT-II tariff as applicable. q) All Students Hostels affiliated to Educational Institutions. r) All Ladies Hostels, such as Students (Girls) Hostels, Working Women Hostels, etc.
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s) Other type of Hostels, like (i) Homes/Hostels for Destitute, Handicap or Mentally deranged persons (ii) Remand Homes (iii) Dharamshalas, etc., subject to verification and confirmation by BESTs concerned Zonal Chief Engineer. t) Telephone booth owned/operated by handicapped person subject to verification and confirmation by BESTs concerned Zonal Chief Engineer. u) Residential premises used by professionals like Lawyers, Doctors, Professional Engineers, Chartered Accountants, etc., in furtherance of their professional activity in their residences but shall not include Nursing Homes and any Surgical Wards or Hospitals. Rate Schedule Effective from 1 April, 2015 to 31 March, 2016 (FY 2015-16) Consumption Slab ( kWh) Fixed/ Demand Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) 3.00 6.40 8.80 10.80 Transport Deficit Loss Recovery Charge (Rs/kWh) 0.55 1.03 1.44 1.85
0-100 units 101 300 units 301 500 units Above 500 units (balance units) Note: c)
$$
LT II: Low Tension Non-Residential or Commercial Applicability Electricity used at Low/Medium Voltage in all non-residential, non-industrial premises and/or commercial premises for commercial consumption meant for operating various appliances used for purposes such as lighting, heating, cooling, cooking, washing/cleaning, entertainment/leisure, pumping in following places: g) Non-Residential, Commercial and Business premises, including Shopping malls h) Combined lighting and power services for Entertainment including film studios, cinemas and theatres, including multiplexes, Hospitality, Leisure, Meeting Halls and Recreation places. i) Electricity used for the external illumination of monumental/historical/heritage buildings approved by MTDC. Page 292 of 308
Rate Schedule - Effective from 1 April, 2015 to 31 March, 2016 (FY 2015-16) Consumption Slab Fixed/Demand ( kWh) Charge (a) 0-20 kW 0-500 units Rs. 250 Above 500 units month (balance units) per 8.45 10.95 10.30 10.70 0.00 0.50 0.00 1.00 -0.75 1.48 2.20 2.15 2.18 Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh)
Note: a) The ToD tariff is applicable to LT-II (B) and (C) category, and optionally available to LT- II (A) having ToD meter installed. LT III: LT- Industrial upto 20 kW Applicability Electricity used at Low/Medium Voltage in premises for purpose of manufacturing, including that used within these premises for general lighting, heating/cooling, etc., having a sanctioned load upto and including 20 kW (26.8 HP). This consumer category also includes IT industry and IT enabled services (as defined in the Government of Maharashtra Policy). Rate Schedule - Effective from 1 April, 2015 to 31 March, 2016 (FY 2015-16) Consumption Slab Fixed/Demand ( kWh) Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh)
0-20 kW 0-500 units Rs. 325 month per 7.00 1.40
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Consumption Slab Fixed/Demand ( kWh) Charge
Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 1.96
Above 500 units Rs. 425 (balance units) month 0600 to 0900 hours 0900 to 1200 hours 1200 to 1800 hours 1800 to 2200 hours 2200 to 0600 hours
per
9.30
Note: a) The ToD tariff is optionally available to LT- III having ToD meter installed. LT IV: LT Industrial above 20 kW load Applicability Electricity used at Low/Medium Voltage in premises for purpose of manufacturing including that used within these premises for general lighting, heating/cooling, etc. and having sanctioned load greater than 20 kW (26.8 HP). This consumer category also includes IT industry and IT enabled services (as defined in the Government of Maharashtra Policy). Rate Schedule - Effective from 1 April, 2015 to 31 March, 2016 (FY 2015-16) Consumption Slab Fixed/Demand ( kWh) Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 1.75 1.72
(a) Above 20 kW Rs. 200 per and upto 100kW kVA per month (b) Above 100 kW
8.90 8.90
TOD Tariffs (in addition to above base tariffs) 0600 to 0900 hours 0900 to 1200 hours 0.00 0.50
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1200 to 1800 hours 1800 to 2200 hours 2200 to 0600 hours
0.00 1.00 -0.75
LT V: LT - Advertisements and Hoardings Applicability Electricity used for the purpose of advertisements, hoardings and other conspicuous consumption such as external flood light, displays, neon signs at departmental stores, malls, multiplexes, theatres, clubs, hotels and other such entertainment/leisure establishments except those specifically covered under LT-II as well as electricity used for the external illuminations of monumental, historical/heritage buildings approved by MTDC, which shall be covered under LT-II category depending upon Sanctioned Load. Rate Schedule - Effective from 1 April, 2015 to 31 March, 2016 (FY 2015-16) Consumption Slab Fixed/Demand ( kWh) Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 3.16
All Units
Rs. 400 month
per
15.00
Note c) The electricity, that is used for the purpose of indicating/displaying the name and other details of the shops or Commercial premises, for which electric supply is rendered, shall not be under LT V tariff Category. Such usage of electricity shall be covered under the prevailing tariff of such shops or commercial premises. LT VI: LT- Street Lights Applicability Electricity used at Low/Medium Voltage for purpose of public street lighting, lighting in public gardens, traffic island, bus shelters, public sanitary conveniences, police chowkies, traffic lights, public fountains, other such common public places irrespective of whether such facilities are being provided by the Government or the Municipality, or Port Trust or other private parties.
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Rate Schedule - Effective from 1 April, 2015 to 31 March, 2016 (FY 2015-16) Consumption Slab Fixed/Demand ( kWh) Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 1.52
All Units Note
8.90
Street Lightings having Automatic Timers for switching On/Off the street lights would be levied Demand Charges on lower of the following e) 50 percent of Contract Demand or f) Actual Recorded Demand
LT VII: LT-Temporary Supply Applicability LT VII (A) Temporary Supply Religious (TSR) Electricity supplied at Low/Medium Voltage for temporary purposes during public religious functions like Ganesh Utsav, Navaratri, Eid, Moharam, Ram Lila, Ambedkar Jayanti, Diwali, Christmas, Guru Nanak Jayanti, etc., or areas where community prayers are held. LT VII (B) - Temporary Supply Others (TSO) Electricity used at Low/Medium Voltage on a temporary basis for any construction work, decorative lighting for exhibitions, circus, film shooting, marriages, etc. and any activity not covered under tariff LT VII (A), and electricity used at low/medium voltage on an emergency basis for purpose of fire fighting activity by the fire department in residential/other premises. Rate Schedule - Effective from 1 April, 2015 to 31 March, 2016 (FY 2015-16) Consumption Slab ( kWh) Fixed/Demand Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 0.87 2.53
LT VII (A) All Rs. 200 per month Units LT VII (B) All Rs. 400 per month Units
4.90 12.50
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Note : In case of LT VII (B) the Additional fixed charges of Rs. 150 per 10 kW load or part thereof above 10 kW load shall be payable. LT VIII: LT- Crematorium and Burial Grounds Applicability Electricity used at Low/Medium Voltage in Crematorium and Burial Grounds for all purposes including lighting, and will be applicable only to the portion catering to such activities, and in case part of the area is being used for other commercial purposes, then a separate meter will have to be provided for the same, and the consumption in this meter will be chargeable under LT-II Commercial rates as applicable. Rate Schedule - Effective from 1 April, 2015 to 31 March, 2016 (FY 2015-16) Consumption Slab Fixed/Demand ( kWh) Charge Variable Charge (Rs./kWh) Energy Charge (Rs./kWh) Transport Deficit Loss Recovery Charge (Rs/kWh) 0.83
All Units
Rs. 200 month
per
5.10
LT IX: LT-Hospitals & Educational Institutions Applicability LT IX (A) Hospitals & Educational Institutions (0 to 20 kW) Electricity used at low/medium voltage in premises exclusively used by Hospitals, Dispensaries, Schools, Colleges and such other Educational institutions, irrespective of ownership, and religious and charitable institutions, and having a sanctioned load upto and including 20 kW (26.8 HP). Halls or gardens or any portion of the premises that may be let out for consideration or used for commercial activities at any time would be charged as per the LT II categories. LT IX (B) Hospitals & Educational Institutions (Above 20 kW) Electricity used at low/medium voltage in premises exclusively used by Hospitals, Dispensaries, Schools, Colleges and such other Educational institutions, irrespective of ownership, and religious and charitable institutions, and having a sanctioned load above 20 kW (26.8 HP). Halls or gardens or any portion of the premises that may be let out for consideration or used for commercial activities at any time would be charged as per the LT II categories.
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Rate Schedule - Effective from 1 April, 2015 to 31 March, 2016 (FY 2015-16) Variable Charges (Rs/kWh) Consumption Slab (kWh) Fixed/Demand Charge Transport Division Loss Recovery Charge (Rs/kWh) 1.83 1.83
Note: c) The ToD tariff is applicable to LT-IX (B) category, and optionally available to LT- IX (A) having ToD meter installed.
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HT II: HT- Commercial Applicability This category includes consumers taking electricity supply at High Voltage for commercial purposes, including Hotels, Shopping Malls, film studios, cinemas and theatres, including multiplexes. The Consumers belonging to HT II requiring a single point supply for the purpose of downstream consumption by separately identifiable entities will have to either operate through a franchisee route or such entities will have to take individual connections under relevant category. These downstream entities will pay appropriate tariff as applicable as per BEST Tariff Schedule i.e. LT II. Page 299 of 308
HT III: HT- Group Housing Society Applicability This category includes Group Housing Societies taking single point electricity supply at High Voltage for consumption by individual dwellings. Such individual dwellings will pay appropriate tariff LT I: LT- Residential as per BEST Tariff Schedule in force. Rate Schedule - Effective from 1 April, 2015 to 31 March, 2016 (FY 2015-16) Consumption Slab ( kWh) Fixed/ Demand Charge Variable Charges (Rs/kWh) Transport Division Loss Recovery Charge (Rs/kWh) 0.91
Page 300 of 308
This category also includes electricity supplied at High Voltage for temporary purposes during public religious functions like Ganesh Utsav, Navaratri, Eid, Moharam, Ram Lila, Ambedkar Jayanti, Diwali, Christmas, Guru Nanak Jayanti, etc. or areas where community prayers are held. Rate Schedule - Effective from 1 April, 2015 to 31 March, 2016 (FY 2015-16) Consumption Slab ( kWh) Fixed/ Demand Charge Variable Charges (Rs/kWh) Transport Division Loss Recovery Charge (Rs/kWh) 2.33
Energy Charge (Rs./kWh) All Units Rs. month 250 per 12.00
HT V- HT - Hospitals & Educational Institutions Applicability Electricity used at High voltage in premises exclusively used by Hospitals, Dispensaries, School, Colleges and such other Educational institutions, irrespective of ownership, and religious and charitable institutions. Halls or gardens or any portion of the premises that may be let out for consideration or used for commercial activities at any time would be charged as per the HT II category. Rate Schedule - Effective from 1 April, 2015 to 31 March, 2016 (FY 2015-16) Consumption Slab ( kWh) Fixed/ Demand Charge Variable Charges (Rs/kWh)
Energy Charge (Rs./kWh) All Units Rs. 200 per kVA per month 8.80
Transport Division Loss Recovery Charge (Rs/kWh) 1.51
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MISCELLANEOUS AND GENERAL CHARGES Fuel Adjustment Cost (FAC) Charges The FAC charge will be determined based on the approved Formula and relevant directions, as may be given by the Commission from time to time and will be applicable to all consumer categories for their entire consumption.
In case of any variation in the fuel prices and power purchase prices with respect to these levels, BEST shall pass on adjustments, due to changes in the cost of power procured due to change in
fuel cost, through the Fuel Adjustment Cost (FAC) component of Z-factor Charge, as specified in Regulations 13.4 to 13.9 of the MERC MYT Regulations, 2011. The details for each month shall be available on BEST website www.bestundertaking.com. Electricity Duty and Tax on Sale of Electricity The electricity duty and Tax on Sale of Electricity will be charged in addition to charges levied as per the tariffs mentioned hereunder (as approved by the Commission) as per the Government guidelines from time to time. However, the rate and the reference number of the Government Resolution/ Order vide which the Electricity Duty and Tax on Sale of Electricity is made effective, shall be stated in the bill. A copy of the said resolution / Order shall be made available on the website www.bestundertaking.com. Power Factor Calculation Wherever, the average power factor measurement is not possible through the installed meter, the following method for calculating the average power factor during the billing period shall be adopted-
Wherein the kVAh is
(kWh) ( RkVAh )
2
Page 302 of 308
Page 303 of 308
Load Factor
Maximum consumption possible = Contract Demand (kVA) x Actual Power Factor x (Total no. of hrs during the month less planned load shedding hours*) * - Interruption/non-supply to the extent of 60 hours in a 30 day month has been built in the scheme. In case the billing demand exceeds the contract demand in any particular month, then the load factor incentive will not be payable in that month. (The billing demand definition excludes the demand recorded during the non-peak hours i.e. 22:00 hrs to 06:00 hrs and therefore, even if the maximum demand exceeds the contract demand in that duration, load factor incentives would be applicable. However, the consumer would be subjected to the penal charges for exceeding the contract demand and has to pay the applicable penal charges). Penalty for exceeding Contract Demand In case, a consumer (availing Demand based Tariff) exceeds his Contract Demand, he will be billed at the appropriate Demand Charge rate for the Demand actually recorded and will be additionally charged at the rate of 150% of the prevailing Demand Charges (only for the excess Demand over the Contract Demand). In case any consumer exceeds the Contract Demand on more than three occasions in a calendar year, the action taken in such cases would be governed by the Supply Code. Additional Demand Charges for Consumers having Captive Power Plant For customers having Captive Power Plant (CPP), the additional demand charges would be at a rate of Rs. 20/kVA/month only on extent of Stand-by demand component, and not on the entire Contract Demand. Additional Demand Charges will be levied on such consumers on the Standby component, only if the consumers demand exceeds the Contract Demand. Supply at 100 kV a) In the event power is supplied at 100 kV, then the Consumer shall be allowed a rebate of 2% of the monthly energy charges, over the energy charges applicable for supply at 11 kV/22 kV/33 kV.
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Security Deposit 21) Subject to the provisions of sub-section (5) of Section 47 of the Act, BEST would require any person to whom supply of electricity has been sanctioned to deposit a security in accordance with the provisions of clause (a) of subsection (1) of Section 47 of the Electricity Act, 2003. 22) The amount of the security shall be an equivalent of the average of three months of billing or the billing cycle period, whichever is lesser. For the purpose of determining the average billing, the average of the billing to the consumer for the last twelve months, or in cases where supply has been provided for a shorter period, the average of the billing of such shorter period, shall be considered 23) Where BEST requires security from a consumer at the time of commencement of service, the amount of such security shall be estimated by the Distribution Licensee based on the tariff category and contract demand/sanctioned load, load factor, diversity factor and number of working shifts of the consumer. 24) BEST shall re-calculate the amount of security based on the actual billing of the consumer once in each financial year. 25) Where the amount of security deposit maintained by the consumer is higher than the security required to be maintained under this Supply Code Regulation 11, BEST shall refund the excess amount of such security deposit in a single payment: Provided that such refund shall be made upon request of the person who gave the security and with an intimation to the consumer, if different from such person, shall be, at the option of such person, either by way of adjustment in the next bill or by way of a separate cheque payment within a period of thirty (30) days from the receipt of such request: Provided further that such refund shall not be required where the amount of refund does not exceed the higher of ten (10) per cent of the amount of security deposit required to be maintained by the consumer or Rupees Three Hundred. 26) Where the amount of security re-calculated pursuant as above, is higher than the security deposit of the consumer, BEST shall be entitled to raise a demand for additional security on the consumer. Provided that the consumer shall be given a time period of not less than thirty days to deposit the additional security pursuant to such demand. 27) Upon termination of supply, BEST shall, after recovery of all amounts due, refund the remainder amount held by the Distribution Licensee to the person who deposited the security, with an intimation to the consumer, if different from such person. 28) A consumer - (i) with a consumption of electricity of not less than one lakh (1,00,000) kilo-watt hours per month; and (ii) with no undisputed sums payable to BEST under Section 56 of the Act may, at the option of such consumer, deposit security, by way of
Page 306 of 308
cash, irrevocable letter of credit or unconditional bank guarantee issued by a scheduled commercial bank. 29) BEST shall pay interest on the amount of security deposited in cash (including cheque and demand draft) by the consumer at a rate equivalent to the bank rate of the Reserve Bank of India: Provided that such interest shall be paid where the amount of security deposited in cash under this Regulation 11 of Supply Code is equal to or more than Rupees Fifty. 30) Interest on cash security deposit shall be payable from the date of deposit by the consumer till the date of dispatch of the refund by BEST. Definitions: Maximum Demand Maximum Demand in Kilowatts or Kilo-Volt-Amperes, in relation to any period shall, unless otherwise provided in any general or specific Order of the Commission, means twice the largest number of kilowatt-hours or kilo-Volt-Ampere-hours supplied and taken during any consecutive thirty minute blocks in that period. Contract Demand Contract Demand means demand in Kilowatt (kW) / Kilo Volt Ampere (kVA), mutually agreed between BEST and the consumer as entered into in the agreement or agreed through other written communication (For conversion of kW into kVA, Power Factor of 0.80 shall be considered). Sanctioned Load Sanctioned Load means load in Kilowatt (kW) mutually agreed between BEST and the consumer
Billing Demand (for LT categories): Monthly Billing Demand will be the higher of the following: i) 65% of the actual Maximum Demand recorded in the month during 0600 hours to 2200 hours. j) 40% of the Contract Demand. Note: k) Demand registered during the period 0600 to 2200 Hrs. will only be considered for determination of the Billing demand.
Page 307 of 308
l) In case of change in Contract Demand, the period specified in Clause (a) above will be reckoned from the month following the month in which the change of Contract Demand takes place. Billing Demand (for HT categories): Monthly Billing Demand will be the higher of the following: g) Actual Maximum Demand recorded in the month during 0600 hours to 2200 hours. h) 75% of the highest billing demand recorded during preceding eleven months subject to limit of contract demand. i) 50% of the Contract Demand. Note: h) Demand registered during the period 0600 to 2200 Hrs. will only be considered for determination of the Billing demand. i) In case of change in Contract Demand, the period specified in Clause (a) above will be reckoned from the month following the month in which the change of Contract Demand takes place.
Page 308 of 308

BEST MYT Order - Final Order - Case 26 of 2013-28 08 2013

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BEST MYT Order - Final Order - Case 26 of 2013-28 08 2013

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Case No.

2.6 2.7 2.8 2.9 2.10 2.11

3.11 3.12 3.13 3.14 3.15 3.16

6.4 14) 6.5 6.6 6.7

1 BACKGROUND AND BRIEF HISTORY

BUSINESS PLAN ORDER FOR BEST FOR MYT CONTROL PERIOD

2 OBJECTIONS RECEIVED, COMMISSIONS RULING

FY 2012-13 (Provisional) 7.40%

OPERATION AND MAINTENANCE (O&M) EEXPENSES

BESTs Reply BEST has not replied to the above objection.

FY 2014-15 5289.38 5016.57 10.54

FY 2015-16 6037.26 5338.43 11.31

BESTs Reply BEST has not replied to the above objection.

3 TRUING UP OF AGGREGATE REVENUE REQUIREMENT FOR FY 2010-11

DISTRIBUTION LOSSES AND ENERGY INPUT REQUIREMENT

4343.33 781.94 215.36 65.96 (564.51)

1541.34 291.71 76.58 43.01 (277.92) 109.63 16.82 (37.91) 111.11

3.55 3.73 3.56 6.52

4343.33 781.94 218.91 65.96

1629.17 203.87 109.59 43.01 (275.46) 109.63 16.82 (37.91) 111.11

3.75 2.61 5.01 6.52 4.9

APR Order (Case No. 125 of 2011) Rs. MU Crore Rs./kWh

Actual Rs. Crore

0.63 17.43 (23.83) 4842.08 1868.61 3.86 4847.79

0.69 17.43 (22.44) 1905.52 3.93

Quantum 94.73 17.43 83.89 22.87 218.91

5125.27 218.91 65.96 (562.36)

O&M EXPENSES FOR FY 2010-11

APR Order of FY 2010-11 (Case 125 of 2011) 166.56

Net Employee Expenses

treated as efficiency gain as discussed in subsequent

Particulars Net R&M Expenses

ARR Order FY 2010-11 28.17

Difference (APR OrderActual) 6.11

CAPITAL EXPENDITURE AND CAPITALISATION Capitalisation

Scheme Head Code

Addl. cap. Expenditure during 201011

Balance c/f to 2011-12 (WIP)

70% of work Completed

IDC 11% for 1 year

DPR DPR DPR DPR Non DPR

43.68 3.77 34.25 13.30 2.01

43.68 3.77 34.25 13.30 2.01

43.68 3.77 34.25 13.30 2.01

30.58 2.64 23.98 9.31 0

3.36 0.29 2.64 0 0

Short Term financial Assistance

Short Term financial Assistance

Total Grand Total of Interest (H1+H2)

RETURN ON INTERNAL FUNDS

Capitalisation during the year IDC

Approved under Case No. 62 of 2012

Audited (FY 2010-11)

Approved after Truing-up

9.59 0.00 176.09 87.99 5.28 0.00 5.28

9.59 0.00 182.00 87.99 5.28 0.00 5.28

5.28 0.00 5.28

Provided in APR Order for FY 2009-10 619.76 140.00 0.00 0.00

694.63 191.59 9.59 182.00

Provided in APR Order for FY 2009-10 0.00 619.76

Revised approval under Case No. 62 of 2012 52.83 747.48

(Rs Crore) Approved after Truing-up

694.63 191.59 9.59 182.00