Final Order - Case No 38 of 2014

MAHARASHTRA ELECTRICITY REGULATORY COMMISSION
World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai 400 005
Tel. 022 22163964/ 65/ 69 Fax 022 22163976
Email: mercindia@merc.gov.in
Website: www.merc.gov.in
Case No. 38 of 2014
Final Order in the matter of Petition filed by Maharashtra State Electricity Distribution
Company Limited for approval of Truing up for FY 2011-12 and FY 2012-13, carrying
cost for delayed approvals, revision in cross subsidy surcharge and Additional Energy
Charge for recovery thereof
Smt. Chandra Iyengar, Chairperson

Shri Vijay L. Sonavane, Member
Maharashtra State Electricity Distribution Co. Ltd.
Registered office:
Prakashgad, Bandra (East),
Mumbai 400 051
.Petitioner
ORDER
Dated: 11 June, 2014
Maharashtra State Electricity Distribution Company Limited, a distribution licensee in
Maharashtra under the meaning of Section 14 of the Electricity Act, 2003, submitted a
Petition on 27 January, 2014, seeking final Truing up for the years FY 2011-12 and FY 201213, approval of carrying costs on delayed allowances, approval of Additional Energy Charges
for recovery of the Trued up amount along with the carrying costs and determination of cross
subsidy surcharge based on the Truing up. It further submitted a revised Petition on 6
February, 2014 amending its prayers to seek immediate admittance of the Petition and grant
of interim financial relief before final dispensation of its main Petition. This Petition was
registered as Case No. 38 of 2014.
The Petitioner stated that it submitted the Petition under the provisions of Maharashtra
Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2005. It
also stated that it sought the interim relief under the provisions of Section 94(2) of the
Electricity Act, 2003. Following prayers were made by the Petitioner in its Petition:
1. To immediately admit the Petition seeking Final True up of FY 2011-12 and Final
True Up of FY 2012-13 as per the provisions of MERC (Terms and Conditions of
Tariff) Regulations, 2005;
Order in Case No 38 of 2014
Page 1 of 148
2. To approve the Final True up of FY 2011-12 and Final True Up of FY 2012-13 as

submitted by MSEDCL;
3. To allow the carrying cost on the final trued amount of FY 2011-12 and FY 2012-13
as submitted by MSEDCL;
4. To allow to recover the revenue gap by way of additional charge AEC-1 as proposed
by MSEDCL for different categories of consumers;
5. To approve the cross subsidy surcharge as worked out by MSEDCL considering
AEC-1 and AEC-2 which will be applicable for existing as well as new Open Access
consumers;
6. Pending final disposal of the Petition of Final true up of FY 2011-12 and FY 2012-13,
an Interim Relief to the extent of at least 75% of the proposed Revenue Gap may be
provided as per the provisions of the Section 94 (2) of the Electricity Act 2003
7. To grant any other relief as the Hon'ble Commission may deem fit;
8. To pass any other order as the Honble Commission may deem fit and appropriate
under the circumstances of the case and in the interest of justice;
9. To condone any error/omission and to give opportunity to rectify the same;
10. To permit the Petitioner to make further submissions, addition and alteration to this
Petition as may be necessary from time to time.
Following MSEDCLs prayer and proceeding with the due regulatory process of admitting
the Petition and public notification inviting suggestions and objections, and considering the
major objections received, the Commission passed an Interim Order on 3 March, 2014
approving Interim Charges to be levied from 1 March 2014. However in this Interim Order
the Commission had clarified that ...this Order is interim dispensation in the matter in Case
No. 38 of 2014. The Commission will consider all the suggestions and objections received,
examine MSEDCLs submissions in detail and also consider any other matter that will be
relevant for final disposal of MSEDCLs Petition in this matter, including re-examination of
the revenue shortfall reported by MSEDCL that has formed the basis of granting interim
relief to MSEDCL. The final Order in this respect will be passed in due course of time.
Accordingly, the 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, and
after taking into consideration submissions made by MSEDCL, suggestions and objections of
the public, and responses of MSEDCL thereto, issues raised during the Public Hearing, and
all other relevant material, hereby conducts the final True Up for FY 2011-12 and FY 201213.
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Table of Contents
BACKGROUND AND SALIENT FEATURES OF THE ORDER ....................................................................... 11

1.1
1.2
1.3
1.4
BACKGROUND ............................................................................................................................................ 11
ADMISSION OF THE PETITION AND REGULATORY PROCESS ................................................................................... 13
INTERIM RELIEF ........................................................................................................................................... 14
ORGANISATION OF THE ORDER ...................................................................................................................... 15
OBJECTIONS, MSEDCLS RESPONSE AND COMMISSIONS RULING ......................................................... 16

2.1
2.2
MAJOR OBJECTIONS ALREADY CONSIDERED IN THE INTERIM RELIEF ORDER DATED 3 MARCH, 2014 ............................ 16
OPTION TO EXERCISE CHOICE BETWEEN CONTINUOUS AND NON-CONTINUOUS TYPE OF SUPPLY BY CONSUMERS CONNECTED
ON EXPRESS FEEDERS ............................................................................................................................................. 16
2.3 RECONSIDERATION/ REVIEW OF THE CONCEPT OF EXPRESS FEEDER AND NON-EXPRESS FEEDER .................................. 17
2.4 FRAMING OF BASIC TARIFF STRUCTURE/ CATEGORY FOR EHV CONSUMERS ............................................................. 18
2.5 POWER PURCHASE COST ............................................................................................................................... 18
2.6 CARRYING COST .......................................................................................................................................... 20
2.7 GOMS DECISION REGARDING REDUCTION IN ELECTRICITY RATES ........................................................................... 21
2.8 INTEREST ON RLC AND REFUND OF ELECTRICITY DUTY ON ASC ............................................................................ 22
2.9 HIGH TARIFF RATE FOR INDUSTRIES ................................................................................................................. 23
2.10
HIGH O&M COSTS ................................................................................................................................. 24
2.11
BAD DEBT/ ARREARS .............................................................................................................................. 25
2.12
CAPITAL EXPENDITURE............................................................................................................................. 28
2.13
RETURN ON EQUITY CAPITAL .................................................................................................................... 29
2.14
INTEREST ON WORKING CAPITAL ............................................................................................................... 29
2.15
PGCIL CHARGES .................................................................................................................................... 30
2.16
POWER PURCHASE FROM RENEWABLE ENERGY SOURCES ............................................................................... 31
2.17
INDUSTRIAL SALES .................................................................................................................................. 31
2.18
ISSUE OF TARIFF IN MPECS AREA .............................................................................................................. 32
2.19
CHANGE IN CONSUMER CATEGORY ............................................................................................................ 33
2.20
LACK OF CLARITY ABOUT IMPACT OF RELIEF ON THE TARIFF.............................................................................. 34
2.21
CLASSIFICATION OF ALL EXPENSES AS UNCONTROLLABLE ................................................................................. 34
2.22
TARIFF APPLICABLE TO AGRICULTURE CATEGORY ........................................................................................... 35
2.23
MSEDCL AND MSPGCL ACCOUNTS NOT MATCHING ................................................................................... 36
2.24
TRANSMISSION CHARGES.......................................................................................................................... 36
2.25
NON CONSIDERATION OF RS. 2000 CRORE TOWARDS REVENUE FOR FY 2012-13 .............................................. 37
2.26
ENERGY BALANCE ................................................................................................................................... 38
2.27
CONSIDERATION OF REGULATORY ASSETS FOR FY 2012-13 AS REVENUE.......................................................... 40
2.28
CROSS SUBSIDY SURCHARGE ..................................................................................................................... 41
2.29
CROSS SUBSIDY SURCHARGE AND GOM DECISION: ....................................................................................... 42
2.30
ROAD MAP FOR CROSS SUBSIDY REDUCTION: ................................................................................................ 42
2.31
NON-FILING OF MYT PETITION: ................................................................................................................ 42
2.32
OPEN ACCESS ........................................................................................................................................ 43
2.33
TOD REBATE ......................................................................................................................................... 43
2.34
VOLTAGE SURCHARGE ............................................................................................................................. 44
2.35
LOAD FACTOR AND POWER FACTOR INCENTIVE ............................................................................................ 44
2.36
AGRICULTURAL CONSUMPTION ................................................................................................................. 44
2.37
LOAD SHEDDING..................................................................................................................................... 45
Page 3 of 148
TRUE UP FOR FY 2011-12 ...................................................................................................................... 47

3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
3.13
3.14
3.15
3.16
3.17
3.18
3.19
3.20
3.21
3.22
3.23
3.24
BACKGROUND ............................................................................................................................................ 47
SALES FOR FY 2011-12 ............................................................................................................................... 47
ENERGY BALANCE AND DISTRIBUTION LOSS ....................................................................................................... 50
POWER PURCHASE COST ............................................................................................................................... 53
TRANSMISSION CHARGES AND SLDC CHARGES FOR FY 2011-12.......................................................................... 59
O&M EXPENSES FOR FY 2011-12 ................................................................................................................. 59
CAPITAL EXPENDITURE AND CAPITALISATION FOR FY 2011-12 ............................................................................. 67
DEPRECIATION FOR FY 2011-12 ................................................................................................................... 71
INTEREST EXPENSES...................................................................................................................................... 72
INTEREST ON WORKING CAPITAL AND CONSUMERS SECURITY DEPOSITS AND OTHER INTEREST AND FINANCE CHARGES
75
INCENTIVES AND DISCOUNTS..................................................................................................................... 77
OTHER EXPENSES .................................................................................................................................... 78
RLC REFUND ......................................................................................................................................... 79
ASC REFUND ......................................................................................................................................... 79
PROVISION FOR BAD DEBTS ...................................................................................................................... 80
CONTRIBUTION TO CONTINGENCY RESERVES ................................................................................................ 81
PRIOR PERIOD CHARGES .......................................................................................................................... 81
RETURN ON EQUITY (ROE) ....................................................................................................................... 83
INCOME TAX.......................................................................................................................................... 84
NON TARIFF INCOME .............................................................................................................................. 85
INCOME FROM WHEELING CHARGES ........................................................................................................... 85
REVENUE FROM SALE OF POWER ................................................................................................................ 86
SHARING OF EFFICIENCY GAINS & LOSSES FOR FY 2011-12 DUE TO CONTROLLABLE FACTORS .............................. 87
AGGREGATE REVENUE REQUIREMENT AND REVENUE GAP FOR FY 2011-12 AFTER TRUING UP ............................. 89
TRUE UP FOR FY 2012-13 ...................................................................................................................... 91

4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.20
SUMMARY OF MSEDCL TRUE UP FOR FY 2012-13 .......................................................................................... 91

SALES FOR FY 2012-13 ............................................................................................................................... 92
ENERGY BALANCE AND DISTRIBUTION LOSS ....................................................................................................... 95
POWER PURCHASE COST ............................................................................................................................... 98
RENEWABLE PURCHASE OBLIGATION FOR FY 2012-13 .................................................................................... 101
TRANSMISSION CHARGES AND SLDC CHARGES FOR FY 2012-13........................................................................ 102
O&M EXPENSES FOR FY 2012-13 ............................................................................................................... 102
CAPITAL EXPENDITURE AND CAPITALISATION FOR FY 2012-13 ........................................................................... 108
DEPRECIATION FOR FY 2012-13 ................................................................................................................. 112
INTEREST EXPENSES FOR FY 2012-13 ...................................................................................................... 113
INTEREST ON WORKING CAPITAL AND CONSUMERS SECURITY DEPOSITS AND OTHER INTEREST AND FINANCE CHARGES
115
PROVISION FOR BAD DEBTS FOR FY 2012-13 ............................................................................................ 116
OTHER EXPENSES FOR FY 2012-13 ......................................................................................................... 117
INCENTIVES AND DISCOUNTS FOR FY 2012-13 .......................................................................................... 118
RLC AND ASC REFUND FOR FY 2012-13 ................................................................................................. 118
PRIOR PERIOD CHARGES FOR FY 2012-13 ................................................................................................ 119
CONTRIBUTION TO CONTINGENCY RESERVES .............................................................................................. 120
INCOME TAX FOR FY 2012-13................................................................................................................ 121
RETURN ON EQUITY FOR FY 2012-13 ...................................................................................................... 121
NON-TARIFF INCOME FOR FY 2012-13 .................................................................................................... 122
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4.21
4.22
4.23
4.24
4.25
5
INCOME FROM WHEELING CHARGES, CROSS-SUBSIDY SURCHARGE AND OPEN ACCESS ....................................... 122
REVENUE FROM SALE OF POWER FOR FY 2012-13..................................................................................... 123
SHARING OF EFFICIENCY GAINS AND LOSSES FOR FY 2012-13 ....................................................................... 124
OTHER CLAIMS AND ORDERS IMPACTING THE REVENUE GAP OF MSEDCL ....................................................... 126
AGGREGATE REVENUE REQUIREMENT AND REVENUE GAP FOR FY 2012-13 AFTER TRUING UP ........................... 127
CONSOLIDATED REVENUE GAP ........................................................................................................... 129

5.1
5.2
5.3
5.4
5.5
CONSOLIDATED REVENUE GAP FOR AFTER TRUING UP OF FY 2011-12 AND FY 2012-13 ...................................... 129
REVENUE GAP RECOVERY MECHANISM ......................................................................................................... 129
CROSS SUBSIDY SURCHARGE........................................................................................................................ 130
COMPLIANCE WITH DIRECTIVES .................................................................................................................... 130
DIRECTIVES IN THIS ORDER .......................................................................................................................... 130
Page 5 of 148
List of Tables
Table 1: Consolidated revenue gap for MSEDCL approved in Case No. 19 of 2012 .................................... 12
Table 2: Summary of Revenue Gap for FY 2011-12 and FY 2012-13 submitted by MSEDCL ....................... 13
Table 3: Total amount claimed by MSEDCL for Truing up ........................................................................... 13
Table 4: Total Interim relief approved for MSEDCL in Case 38 of 2014 ....................................................... 14
Table 5: Variation in heads of expenditure as submitted by Urja Prabodhan Kendra (Rs. crore) ............... 24
Table 6: Variation in RoE as submitted by Urja Prabodhan Kendra (Rs. crore) ........................................... 29
Table 7: Variation in Interest on Working Capital as submitted by FIA (Rs. crore) ..................................... 29
Table 8: Details of estimated, approved and actual charges paid to PGCIL as submitted by MSEDCL ....... 31
Table 9: Growth of Industrial category as submitted by MSEDCL ............................................................... 32
Table 10: Year wise Tariff applicable to Agriculture category as submitted by MSEDCL ............................ 35
Table 11: Summary of workings provided by Tata Motors ......................................................................... 37
Table 12: Details provided by MSEDCL ........................................................................................................ 38
Table 13: Sales and Revenue for FY 2011-12 as submitted by MSEDCL ...................................................... 47
Table 14: Agriculture Category Consumer details as submitted by MSEDCL .............................................. 49
Table 15: Sales for FY 2011-12 (MU) ........................................................................................................... 50
Table 16: Source wise ZLS Power Purchase as submitted by MSEDCL ........................................................ 50
Table 17: Details of power purchase from traders for FY 2011-12 as submitted by MSEDCL ..................... 50
Table 18: Energy Balance Statement for FY 2011-12 as submitted by MSEDCL and as approved by the
Commission ................................................................................................................................................. 52
Table 19: Source wise break - up of power purchase cost for FY 2011-12 .................................................. 54
Table 20: Details of other adjustments as submitted by MSEDCL ............................................................... 56
Table 21: Details of RPO as submitted by MSEDCL ..................................................................................... 57
Table 22: Procurement from NCE sources for FY 2011-12 as per MSEDCL .................................................. 57
Table 23: Power purchase expenses for FY 2011-12 (Rs. crore) .................................................................. 59
Table 24: Transmission charges including SLDC charges for FY 2011-12
(Rs. crore) .............................. 59
Table 25: Analysis of employee expenses for FY 2011-12 ........................................................................... 60
Table 26: Bifurcation of amount of leave encashment for FY 2011-12 as provided by MSEDCL (Rs. crore) 62
Table 27: Details of amount of gratuity payment made to employees in FY 2011-12 as provided by
MSEDCL (Rs. crore) ...................................................................................................................................... 62
Table 28: Employee expenses for FY 2011-12 (Rs. crore) ............................................................................ 63
Table 29: Analysis of A&G expenses for FY 2011-12 ................................................................................... 64
Table 30: Details of A&G expenses having sizeable change over previous year to FY 2011-12 as provided
by MSEDCL (Rs. crore) ................................................................................................................................. 65
Table 31: Break up of expenses booked under head others as submitted by MSEDCL ............................... 66
Table 32: Approved A&G expenses for FY 2011-12
(Rs. crore)............................................................... 66
Table 33: Approved R&M expenses for FY 2011-12 .................................................................................... 67
Table 34: DPR schemes in FY 2011-12 (Rs. crore)........................................................................................ 67
Table 35: Non-DPR schemes in FY 2011-12 (Rs. crore) ................................................................................ 69
Table 36: Capitalisation for FY 2011-12
(Rs. crore) ................................................................................ 71
Table 37: Depreciation for FY 2011-12 (Rs. crore) .................................................................................. 72
Table 38: Details of GoM loans (RGGVY loans) as provided by MSEDCL (Rs. crore) ................................... 73
Table 39: Funding patter of capital expenditure as per audited accounts of MSEDCL (Rs. crore) .............. 73
Table 88: Funding Pattern submitted by MSEDCL and approved by the Commission for FY 2011-12 ........ 74
Table 42: Interest expense for FY 2011-12 (Rs. crore)............................................................................. 75
Table 43: Detailed break up of Finance Charges as submitted by MSEDCL ................................................ 75
Page 6 of 148
Table 44: Interest on working capital, other interest and finance charges including interest on consumers'
security deposit for FY 2011-12 (Rs. crore) .................................................................................................. 77
Table 45: Incentives/ Discounts for FY 2011-12 (Rs. crore) ..................................................................... 78
Table 46: Break up of other expenses incurred in FY 2011-12 (Rs. crore) ............................................... 78
Table 47: Other expenses for FY 2011-12
(Rs. crore) ............................................................................. 79
Table 48: RLC Refund for FY 2011-12
(Rs. crore) .................................................................................... 79
Table 49: ASC Refund for FY 2011-12
(Rs. crore) ................................................................................... 80
Table 50: Provision for bad debts for FY 2011-12
(Rs. crore) ................................................................. 81
Table 51: Contribution to contingency reserves for FY 2011-12.................................................................. 81
Table 52: Break up of prior period charges for FY 2011-12 as submitted by MSEDCL ................................ 82
Table 53: Prior Period Expenses for FY 2011-12 (Rs. crore) .................................................................... 83
Table 54: Return on equity for FY 2011-12 (Rs. crore) ................................................................................ 84
Table 55: Income Tax for FY 2011-12 (Rs. crore) .................................................................................... 85
Table 56: Non-Tariff Income for FY 2011-12 (Rs. crore) .......................................................................... 85
Table 57: Income from Wheeling Charges for FY 2011-12
(Rs. crore)................................................... 85
Table 58: Details of unbilled revenue for FY 2011-12 (Rs. crore) ............................................................ 86
Table 59: Revenue from sale of power for FY 2011-12 (Rs. crore) ............................................................. 87
Table 60: Efficiency gain/ (loss) due to O&M expenses for FY 2011-12 (Rs. crore) ..................................... 88
Table 61: Efficiency loss due to Interest on Working Capital for FY 2011-12 (Rs. crore) ............................. 88
Table 62: Efficiency gain due to lower distribution losses in FY 2011-12 .................................................... 89
Table 63: Summary of Efficiency Gain/ (loss) to be considered in ARR for FY 2011-12 (Rs. crore) .............. 89
Table 64: Aggregate Revenue Requirement for FY 2011-12 (Rs. crore) .................................................. 90
Table 65: Aggregate Revenue Requirement as submitted by MSEDCL for FY 2012-13 ............................... 91
Table 66: Sales and Revenue for FY 2012-13 as submitted by MSEDCL ...................................................... 93
Table 67: Statistics of Metered and Unmetered Agricultural consumers as on March 2014 ...................... 94
Table 68: Bifurcation of feeders having agricultural consumers ................................................................. 94
Table 69: MSEDCL Roadmap for metering unmetered agricultural consumers .......................................... 94
Table 70: Energy Sales for FY 2012-13 ........................................................................................................ 95
Table 71: Energy Balance Statement for FY 2012-13 as submitted by MSEDCL and approved by the
Commission ................................................................................................................................................. 97
Table 72: Source-wise break-up of power purchase cost for FY 2012-13 .................................................... 98
Table 73: Comparison of Power Purchase for FY 2012-13 .......................................................................... 99
Table 74: MSEDCL submission towards Renewable Purchase Obligation for FY 2012-13 (in MU) ........... 101
Table 75: Power Purchase Expense for FY 2012-13 ................................................................................... 102
Table 76: Transmission charges including SLDC charges for FY 2012-13 .................................................. 102
Table 77: Analysis of Employee Expenses ................................................................................................. 103
Table 78: Applicable rates of Dearness Allowance .................................................................................... 104
Table 79: Employee Expense for FY 2012-13 ............................................................................................. 105
Table 80: Analysis of Employee Expenses ................................................................................................. 106
Table 81: A&G Expense for FY 2012-13 ..................................................................................................... 107
Table 82: R&M Expense for FY 2012-13 .................................................................................................... 108
Table 83: Scheme-wise Capitalisation for FY 2012-13............................................................................... 109
Table 84: Capitalisation for FY 2012-13 (Rs. crore) .................................................................................. 111
Table 85: Capitalisation under no specific scheme and under schemes for FY 2012-13 ........................... 111
Table 86: Depreciation for FY 2012-13 ...................................................................................................... 112
Table 87: Interest Expense submitted by MSEDCL for FY 2012-13 ............................................................ 113
Table 88: Funding Pattern submitted by MSEDCL and approved by the Commission for FY 2012-13 ...... 114
Table 89: Interest on long-term debt for FY 2012-13 ................................................................................ 114
Table 90: Interest on Working Capital, Consumers Security Deposit and other interest and finance
Page 7 of 148
charges for FY 2012-13.............................................................................................................................. 116

Table 91: Bad Debts Written-off during FY 2012-13 ................................................................................. 116
Table 92: Provision for Bad debts for FY 2012-13 ..................................................................................... 117
Table 93: Other Expenses for FY 2012-13 .................................................................................................. 117
Table 94: Incentives/Discounts for FY 2012-13 ......................................................................................... 118
Table 95: RLC and ASC refund for FY 2012-13 ........................................................................................... 119
Table 96: Summary of Prior Period expenses as submitted by MSEDCL ................................................... 119
Table 97: Approved Prior Period Charges FY 2012-13 ............................................................................... 120
Table 98: Contribution to Contingency Reserves for FY 2012-13 .............................................................. 121
Table 99: Income-tax for FY 2012-13 ........................................................................................................ 121
Table 100: Return on Equity for FY 2012-13 .............................................................................................. 121
Table 101: Non tariff income for FY 2012-13 ............................................................................................ 122
Table 102: Income from Wheeling charges, Cross-subsidy surcharge and Open Access .......................... 122
Table 103: Revenue from Sale of Power for FY 2012-13 ........................................................................... 124
Table 104: Efficiency gain/ (loss) due to O&M expenses for FY 2012-13 .................................................. 125
Table 105: Efficiency loss due to Interest on Working Capital for FY 2012-13 (Rs. crore) ......................... 125
Table 106: Efficiency gain due to lower distribution losses in FY 2012-13 ................................................ 126
Table 107: Summary of Efficiency Gain/ (loss) to be considered in ARR for FY 2011-12 (Rs. crore) .......... 126
Table 108: Additional Claims of MSEDCL .................................................................................................. 127
Table 109: Aggregate Revenue Requirement for FY 2012-13 ................................................................... 127
Table 110: Consolidated Revenue Gap claimed by MSEDCL and approved by the Commission ............... 129
Page 8 of 148
List of Abbreviations
Abbreviation
AAD
A&G
ABR
AFC
AS
ASC
ATE
BEST
CAGR
CBA
CERC
CPI
CPP
Commission/ MERC
CSS
CWIP
DA
DPC
EHV
ESO
FAC
FY
GFA
GoMWRD
HT
IDC
InSTS
kVA
kW
kWh
LT
MCCIA
MEDA
MIDC
MPECS
MSEDCL
MSETCL
MSPGCL
MU
MYT
NCE
NPCIL
NTPC
Expansion
Advance Against Depreciation
Administration and General
Average Billing Rate
Annual Fixed Cost
Accounting Standard
Additional Supply Charge
Appellate Tribunal for Electricity
Brihanmumbai Electric Supply and Transport
Compounded Annual Growth Rate
Cost Benefit Analysis
Central Electricity Regulatory Commission
Consumer Price Index
Captive Power Plant
Maharashtra Electricity Regulatory Commission
Cross Subsidy Surcharge
Capital Work in Progress
Dearness Allowance
Delayed Payment Charges
Extra High Voltage
Energy Sent Out
Fuel Adjustment Cost
Financial Year
Gross Fixed Assets
Government of Maharashtra Water Resources Department
High Tension
Interest During Construction
Intra-State Transmission System
Kilo Volt Ampere
Kilo Watt
Kilo Watt Hour
Low Tension
Mahratta Chamber of Commerce, Industries and Agriculture
Maharashtra Energy Development Agency
Maharashtra Industrial Development Corporation
Mula Pravara Electric Co-operative Society
Maharashtra State Electricity Distribution Company Limited
Maharashtra State Electricity Transmission Company Limited
Maharashtra State Power Generation Company Limited
Million Units
Multi Year Tariff
Non Conventional Energy
Nuclear Power Corporation of India Limited
National Thermal Power Corporation Limited
Page 9 of 148
Abbreviation
O&M
PGCIL
PPA
POC
RBI
REL
RGGVY
RGPPL
RLC
RPO
RoE
SLDC
SoP
STU
TSSIA
TPC
TVS
UI
UMPP
VCCI
VIA
VRS
WPI
ZLS
Expansion
Operation and Maintenance
Power Grid Corporation of India Limited
Power Purchase Agreement
Point of Connection
Reserve Bank of India
Reliance Energy Limited
Rajiv Gandhi Gram Vidyutikaran Yojana
Ratnagiri Gas and Power Private Limited
Regulatory Liability Charge
Renewable Purchase Obligation
Return on Equity
State Load Despatch Centre
Standard of Performance
State Transmission Utility
Thane Small Scale Industries Limited
The Tata Power Company Limited
Technical Validation Session
Unscheduled Interchange
Ultra Mega Power Project
Vidarbha Chamber of Commerce and Industries
Vidarbha Industries Association
Voluntary Retirement Scheme
Wholesale Price Index
Zero Load Shedding
Page 10 of 148
1
1.1
BACKGROUND AND SALIENT FEATURES OF THE ORDER

Background
1.1.1 The Petitioner, MSEDCL, is a Company formed under the Government Resolution
No. ELA-1003/P.K.8588/Bhag-2/Urja-5 dated 24 January, 2005, of the Government
of Maharashtra, with effect from 6 June, 2005 according to the provisions envisaged
in Part XIII of the Electricity Act, 2003. The provisional Transfer Scheme was
notified under Section 131(5)(g) of the EA 2003 on 6 June, 2005, which resulted in
the creation of the following four successor Companies and MSEB Residual
Company, from the erstwhile Maharashtra State Electricity Board (MSEB), namely,
a) MSEB Holding Company Limited;
b) Maharashtra State Power Generation Company Limited (MSPGCL);
c) Maharashtra State Electricity Transmission Company Limited (MSETCL); and
d) Maharashtra State Electricity Distribution Company Limited (MSEDCL).
1.1.2 Multi Year Tariff (MYT) Regulations, 2011: On 4 February, 2011, the Commission
notified the Maharashtra Electricity Regulatory Commission (Multi Year Tariff)
Regulations, 2011 (hereinafter referred to as the MYT Regulations, 2011). These
Regulations were to be applicable for determination of Tariff from 1 April, 2011 and
onwards up to FY 2015-16 for all existing and future Generating Companies,
Transmission Licensees and Distribution Licensees in the State of Maharashtra.
1.1.3 Exemption from MYT Regulations, 2011 (Case No. 24 of 2011): MSEDCL
submitted a Petition on 22 February, 2011 under Section 94 (2) of the EA 2003 and
Regulation 85 (a) of the MERC (Conduct of Business) Regulations, 2004, Regulation
4.1 and Regulations 99 and 100 of the MYT Regulations, 2011, seeking exemption
from the determination of Tariffs under MYT Regulations, 2011. On this Petition
filed by MSEDCL, an exemption was granted to MSEDCL, under Regulation 4.1 of
the MYT Regulations, 2011, vide the Commissions Order dated 23 August, 2011 in
Case No. 24 of 2011, for two years (till 31 March, 2013) from the determination of
Tariff under the MYT Regulations, 2011. Furthermore, an amendment to the MYT
Regulations, 2011 was notified on 21 October, 2011, in which the distribution
licensees who have been exempted for certain periods from the determination of
Tariff under the MYT Regulations, 2011, were permitted to continue to file ARR and
Tariff applications under the Tariff Regulations, 2005.
1.1.4 MSEDCL vide letter no. SE/TRC/MYT FY 13-16/2258 dated 22 January 2014 had
requested the Honble Commission for extension for submission of MYT Petition for
Second Control Period for one year considering the uncertainty in the electricity
market in India and the difficulty in correct prediction of power purchase, sales and
thereby annual revenue requirement. The Commission had rejected MSEDCLs
prayer and directed MSEDCL to submit its MYT Petition by 31 May, 2014 without
any further delay.
Page 11 of 148
1.1.5 However, based on the Commissions Order in Case No. 24 of 2011, and Regulation
102 of the MYT Regulations, 2011 on transitory provisions, the present Petition filed
by MSEDCL for the Truing up of FY 2011-12 and FY 2012-13 would be governed
under the Tariff Regulations, 2005.
1.1.6 Order in Case No. 19 of 2012 for Truing up for FY 2010-11, determination of ARR of
FY 2011-12 and FY 2012-13, determination of Tariff for FY 2012-13, and revision in
schedule of charges: The Commission issued the Order on the above on 16 August,
2012 and approved revised tariffs with effect from 1 August, 2012. The consolidated
gap and as approved by the Commission in Case No. 19 of 2012 is shown below.
Table 1: Consolidated revenue gap for MSEDCL approved in Case No. 19 of 2012
Rs. crore
S.No. Particulars
1
2
3
As submitted
by MSEDCL
Gap of FY 2010-11
Gap of FY 2011-12
Gap of FY 2012-13
Capitalisation disallowed by the
Commission for FY 2008-09
Gap approved to be uncovered for FY
2010-11 (as approved in Case 100 of
2011)
Honble ATE Judgment (124 of 2010)
Approved Gap of MSPGCL
610
Approved Gap of MSETCL
230
4
5
9
10
11
Add: Impact of Case No. 21 of 2012

(Review of Order in Case. No. 100 of
2011)
Less: Impact of Case No. 43 of 2012
(Order on FAC)
Total Gap to be recovered from Tariff
Approved by the
Commission
(491)
2,853
3,351
(767)
1,429
5,932
237
228
405
405
427
427
Considered in
Sr. No. 2, 3
Considered in
Sr. No. 3
NA
750
NA
(1,483)
7,623
6,921
1.1.7 Order in Case No. 28 of 2013 and Case No. 44 of 2013: The Commission vide
Order dated 3 September, 2013 allowed MSPGCL to recover Rs. 735.34 crore
towards impact of Honble ATE Judgement on Case 107 of 2011 and 69 of 2011. The
Commission vide Order in Case No. 44 of 2013 approved the revised fixed cost and
energy charges for Khaperkheda Unit 5 for FY 2012-13. MSEDCL was also allowed
to recover these costs from consumers under the appropriate mechanism approved in
the respective Orders.
1.1.8 Suo-moto determination of supplemental charges of MSEDCL in Case No. 95 of
2013: The Commission vide Order dated 5 September, 2013 allowed MSEDCL to
recover additional costs arising on account of various Order issued by the
Commission post the Order in Case No. 19 of 2012. MSEDCL was allowed to recover
Page 12 of 148
Rs. 2,037.78 crore towards additional expenses accrued till August 2013.
1.1.9 Summary of the revenue gap for FY 2011-12 and FY 2012-13 as sought by MSEDCL
following Truing up, is tabulated below. Over and above the revenue gap of each of
these years, The background leading to the filing of the present Petition is discussed
in the following paragraphs.
Table 2: Summary of Revenue Gap for FY 2011-12 and FY 2012-13 submitted by MSEDCL
Rs. crore
FY 2011-12
FY 2012-13
Approved Actual Diff
Approved Actual
Particulars
Aggregate Revenue
Requirement from
Retail Tariff
Net Revenue
Revenue Gap
39,243
41,786
2,543
50,049
37,814
1,429
39,221
2,566
1,407
1,136
50,049*
-
Diff
50,089
(320)
44,280 (6,129)
5,809
5,809
*Revenue including Rs. 1,483 crore allowed to be recovered separately in Order in Case No. 43 of 2012.
1.1.10 MSEDCL also added certain carrying costs for Truing up in this Petition. Total final
amount claimed by MSEDCL for Truing up is summarised below.
Table 3: Total amount claimed by MSEDCL for Truing up
Particulars
Expense variation (including O&M cost) for FY 2011-12 and FY 2012-13

Revenue shortfall for FY 2011-12 and FY 2012-13
Carrying cost on proposed Truing up of FY 2011-12 and FY 2012-13
Carrying cost on various deferred recoveries computed up to the date of
recovery of the same
Total
1.2
Rs. crore
2,223
4,722
1,317
1,051
9,312
Admission of the Petition and Regulatory process
1.2.1 Admission and Notification: MSEDCLs Petition was admitted on 6 February, 2014
by the Commission. As per the requirement under Section 64 of the EA 2003,
MSEDCL published a notice on 7 February, 2014 in the prescribed abridged form and
manner inviting suggestions and objections on its Petition. The notices were published
in two widely circulated Marathi (Lokmat and Sakal) newspapers and two widely
circulated English (The Times of India and DNA) newspapers. Further, as directed by
the Commission, MSEDCL made available the copies of the Executive Summary of
its Petition (in both English and Marathi version) and the full Petition admitted by the
Commission for inspection/ purchase by members of the public at MSEDCL's offices.
It was also made available on MSEDCL's website (www.mahadiscom.in) in free
downloadable format. The Executive Summary and Public Notice were also made
available on the website of the Commission (www.merc.gov.in) in downloadable
format.
Page 13 of 148
1.2.2 Public Hearing: A Public Hearing in the matter of Truing up and Interim Relief was
held at Centrum Hall, 1st Floor, Centre 1, World Trade Centre, Cuffe Parade, Colaba,
Mumbai -400 005 on 28 February, 2014. This hearing was attended by several
authorised consumer representatives, other stakeholders and public in general. The
Commission received written objections expressing concerns on several issues,
including Tariff of MSEDCL, Tariff categorisation, procedural issues, distribution
losses, sales projections, power purchase, cross-subsidy, schedule of charges, etc. The
list of objectors, who participated in the Public Hearing or submitted written
objections, is provided in Appendix- I.
1.2.3 The Commission has ensured that the due process, contemplated under law, was
followed at every stage meticulously to ensure transparency and public participation.
Adequate opportunity was given to all the persons concerned to submit their response
in the matter. Various objections that were raised on MSEDCLs Petition after issuing
the Public Notice both in writing as well as during the Public Hearings, along with
MSEDCLs response and the Commissions rulings have been summarised in Section
2 of this Order.
1.3
Interim Relief
1.3.1 The Commission vide Order dated 3 March, 2014 approved an Interim Relief of Rs
5,022 crore to MSEDCL against Rs. 9,312 crore claimed by MSEDCL. While passing
the Interim Relief Order the Commission had considered the major objections
received from various objectors. The interim relief is recoverable as Interim Charge
for a period of twelve (12) months starting 1 March, 2014. The interim relief
approved by the Commission, subject to approval of final True up for FY 2011-12
and FY 2012-13 is summarised below:
Table 4: Total Interim relief approved for MSEDCL in Case 38 of 2014
Rs. crore
Particulars
MSEDCL Approved Remarks
Expense variation (including

O&M cost) for FY 2011-12
and FY 2012-13
2,223
Revenue shortfall for FY

2011-12 and FY 2012-13
4,722
4,000
Carrying cost on proposed

Truing up of FY 2011-12 and
FY 2012-13
1,317
Carrying cost on various

deferred recoveries
computed up to the date of
recovery of the same
1,051
1,022
Prudence check is required

and will be considered at the
time of final disposal of
Petition.
Variation in Revenue due to
abnormal change in sales mix
Prudence check is required
and will be considered at the
time of final disposal of
Petition.
As per ATE Judgment
Page 14 of 148
Particulars
Total
1.4
MSEDCL Approved Remarks
9,312
5,022
Organisation of the Order
1.4.1 For the sake of convenience, a list of abbreviations with their expanded forms has
been included at the beginning of this Order. Thereafter, this Order is organised in the
following Sections:
Section 1 of the Order provides a brief background of the process undertaken by the
Commission;
Section 2 of the Order summarises the various objections raised by the objectors in
writing as well as during the Public Hearings before the Commission. Each of the
objections is followed by the response of MSEDCL and the ruling of the Commission
on each of the issues;
Section 3 of the Order details the Commissions analysis and decisions on the Final
Truing up sought by MSEDCL for FY 2011-12;
Section 4 of the Order details the Commissions analysis and decisions on the Final
Truing up sought by MSEDCL for FY 2012-13. The section also summarises the
consolidated revenue gap of MSEDCL for FY 2011-12 and FY 2012-13; and
Section 5 of the Order discusses about the final consolidated revenue gap, cross
subsidy surcharge and directives issued to MSEDCL in this Order.
Page 15 of 148
2.1
OBJECTIONS, MSEDCLS RESPONSE AND COMMISSIONS

RULING
Major objections already considered in the Interim Relief Order dated 3 March,
2014
2.1.1 As mentioned earlier in paragraph 1.3.1, the Commission had already considered the
major objections in the Interim Relief Order passed on 3 March, 2014. These
objections were related to holding of Public Hearing in only one place deviating from
the usual practice of holding the public hearings in six different places, distribution
loss reported by MSEDCL including that of metering and consumption of agricultural
consumers, increase in O&M costs, and Interim Charges applicable to the HT Ports
category.
2.1.2 Since the Commission has already considered the above objections in the Interim
Relief Order, these are not repeated again in this final Order. It may also be noted that
certain directions were issued by the Commission in the Interim Relief Order in
relation to some of the objections mentioned above.
2.2
Option to exercise choice between continuous and non-continuous type of supply

by consumers connected on express feeders
2.2.1 Dicitex Furnishings Ltd., M/s. Mudra Lifestyle Ltd., Arti Drugs Ltd. and others
submitted that the Commission vide its Order in Case No. 44 of 2008 dated 12
September, 2008 had clarified that industrial consumer connected on express feeder
has the absolute right regarding the option to exercise the choice between continuous
and non-continuous type of supply once in a year, within the first month after issue of
the Tariff Order for the relevant tariff period. Further, MSEDCL has not been filing
Petition for revision of Tariff and the Commission has been extending the Tariff
determined as per the Tariff Order in Case No. 19 of 2012. These objectors and others
requested the Commission to direct MSEDCL to allow HT I (Continuous category)
consumers the exercise of choice between continuous and non-continuous type of
supply on an urgent basis. Approval granted by the Commission to MSEDCL for
recovery of revenue gap through AEC be treated as Tariff determined by the
Commission. Failure of MSEDCL to accord approval beyond 7 days from date of
submission of request from Dicitex Furnishings Pvt. Ltd., M/s Mudra Lifestyle Ltd.,
Arti Drugs Ltd. and others to exercise its option of type of supply be treated as
automatic entitlement of being granted such approval from 8th day onwards.
MSEDCLs reply
2.2.2 MSEDCL submitted that it has been allowing the consumers to switch from
continuous to non-continuous category after following the due process in accordance
with the relevant terms and conditions and guidelines of the Commission. In case
there are multiple consumers on a continuous feeder and only one continuous
Page 16 of 148
category consumer requests for change in category to non-continuous, then MSEDCL

approves the change in category subject to the technical feasibility, financial viability,
availability of nearby non-continuous feeder, space constraints to create new noncontinuous feeder. In case a continuous category consumer connected on link line
between two sub-stations requests for change to non-continuous category, then such
request is considered subject to concurrence of the consumer to shift on noncontinuous feeders since MSEDCL has to maintain continuous supply on link line.
MSEDCL further submitted that it has taken due note of the submissions made by
consumers and it will initiate the appropriate action on case to case basis.
Commissions ruling
2.2.3 The Commission has noted the submission made by the objectors as well as that of
MSEDCL. The issue brought out in the objection does not pertain to the present Case
of Truing up of MSEDCLs accounts. However, the Commission directs MSEDCL to
make a separate submission before the Commission, within forty five (45) days from
the date of this Order, stating the action taken by it since the date of the objectors
application.
2.3
Reconsideration/ review of the concept of Express Feeder and Non-Express

Feeder
2.3.1 Bharat Forge and Garware Polyester Ltd. submitted that Express feeder consumers
pay 15% higher rates than that paid by Non-express feeder consumers. This is based
on the logic that Non-express feeder consumers are not required to face load
shedding, get supply of electricity 24X7 and do not observe staggered holiday. This
Tariff philosophy was adopted by MERC/ MSEDCL at the time when Tariffs were
revised w.e.f. 1 June, 2008. However, GoM and MSEDCL have already declared in
January 2013 that, all the Industrial feeders in the State as load shedding free. Hence
classification on ground of load shedding and type of feeders in case of EHV/ HT
Industrial consumers does not hold good. Further, all express feeder consumers are
supposed to incur the total cost of providing such facility with 1.3% supervision
charges. Thus, the cost of infrastructure up to point o supply is fully borne by express
feeder consumers and not by MSEDCL. Considering this the energy rates of express
feeder consumers should be lower than those fixed for non-express feeder consumers.
MSEDCLs reply
2.3.2 MSEDCL submitted that the present Petition is for Final True Up of FY 2011-12 and
FY 2012-13. MSEDCL in the present Petition has not proposed any change in the
tariff philosophy or any change in the present tariff categorization. MSEDCL
submitted that the Commission in its earlier Orders has already defined the basis of
bifurcating Industrial category in to Express Feeder continuous and non-continuous
supply. In the present Petition MSEDCL has not suggested any change in basis for
bifurcation. The issue raised by the consumer pertains to re-categorisation of
consumers which is dealt in Tariff Petition. MSEDCL further submitted that the issue
Page 17 of 148
can be raised during next Tariff Petition as the current Petition doesnt propose any
Tariff philosophy or change in Tariff category.
Commissions ruling
2.3.3 The Commission has taken note of the suggestions/ objections raised. The issue raised
is related to Tariff Philosophy which is not within the scope of present Petition.
Therefore, it will be appropriate if the objector makes a separate submission in the
matter of MSEDCLs MYT determination exercise.
2.4
Framing of basic Tariff structure/ category for EHV consumers
2.4.1 Bharat Forge submitted that in the present Tariff structure there is no separate Tariff
for EHV consumers and these consumers are considered in HT category. In the last
Tariff revision the Commission as a first step towards a separate Tariff for EHV
consumers granted 3% EHV rebate on energy charges to EHV consumers for whom
HT I Tariff is applicable. Bharat Forge submitted that this is a proper time to frame
a basic Tariff structure/ category for EHV consumers instead of giving EHV supply
rebate on energy charge. Further, the 3% EHV supply rebate given to EHV consumers
is on energy charges and TOD charges. Fuel Adjustment Charges (FAC) though are a
part of the energy charges, are not considered while computing the rebate. Bharat
Forge requested the Commission to direct MSEDCL to give 3% EHV supply rebate
on energy charge as well as on TOD charge and FAC. Further, the EHV supply rebate
is offered only if the consumer has no arrears with MSEDCL. The consumer
requested to review the condition stipulated in 3% EHV supply rebate clause as rebate
and arrears are two separate issues.
MSEDCLs reply
2.4.2 MSEDCL submitted that as per its Tariff Order for FY 2012-13 (Case No. 19 of
2012) it has allowed a rebate of 3% on Energy Charges to all consumers taking supply
at EHV level, i.e. at voltages of 66 kV and above. The present Petition is for Final
True up of FY 2011-12 and FY 2012-13. MSEDCL has not proposed any change in
the Tariff philosophy, in the present tariff categorization or in the other tariff
conditions related to incentives/discounts in the Petition.
Commissions ruling
2.4.3 The Commission has taken note of the suggestions/ objections raised. The
Commission views that the issues raised are not covered under the scope of the
current True up Petition and hence the issues may be raised during the exercise of
MYT Tariff determination of MSEDCL.
2.5
Power purchase cost
2.5.1 Bharat Forge submitted that power purchase from MSPGCL is made at higher rates.
This is attributable to low Plant Load Factor of power stations of MSPGCL resulting
in high generation cost. These high costs are ultimately proposed to be recovered from
Page 18 of 148
consumers of MSEDCL. Mahratta Chamber of Commerce, Industries and Agriculture

(MCCIA) further submitted that MSEDCL purchased 44% of its total power
requirement from MSPGCL. MCCIA highlighted that MSEDCL did not procure the
approved power quantum from NTPC which was the cheaper source of power,
thereby violating Merit Order Despatch principles. These high costs are ultimately
proposed to be recovered from consumers of MSEDCL.
2.5.2 Vidarbha Industries Association (VIA) submitted that MSEDCL is purchasing power
from MSPGCL by considering the average rate of supply by clubbing all their power
stations and then considering average rate of supply. By this way under Merit Order
dispatch principles, MSEDCL is purchasing power by considering MSPGCL power
cost below Rs. 3 per unit deducting fixed cost from average cost of power of
MSPGCL. VIA further submitted that mismanagement in coal purchase has increased
costs to MSPGCL. MSEDCL has ultimately passed these costs to the consumers.
2.5.3 Urja Prabodhan Kendra and Federation of Industries Association submitted that there
is a need for stopping discriminatory power purchases from MSPGCL.
2.5.4 Aam Aadmi Party requested the Commission to remove discriminatory clauses in the
agreements between MSEDCL and MSPGCL on payment of fixed cost and make the
agreements at par with other sources of power purchase.
2.5.5 Avinash Prabhune and Marathwada Industries Association submitted that cost of
power being purchased from MSPGCL was 63% higher than that of NTPC and
NPCIL. They submitted that the rates quoted by power traders were also lower
compared to cost of power being purchased from MSPGCL. Therefore, they
requested the Commission to carry out thorough analysis of the matter, whether
MSPGCL was being preferred because it is a part of MSEB holding company.
2.5.6 Mahratta Chamber of Commerce, Industries and Agriculture (MCCIA) and The
Millowners Association highlighted their observation that the average power
purchase cost of MSEDCL increased by 6.44% while the Average Billing Rate (ABR)
increased by 13%. MCCIA submitted that the abovementioned observation indicated
that MSEDCL was burdening its consumers for its inefficiencies. George John
requested information on the compulsions for procurement of energy from RGPPL at
Rs. 4.35 per unit at a time when it can be procured from traders at Rs. 3.80 per unit.
2.5.7 Vidarbha Chamber of Commerce & Industry (VCCI) submitted that actual generation
from the capacities of MSPGCL was 62% leading to costlier purchase from the
market. In addition to this, improper anticipation of growth led to purchase of costlier
power. Therefore, VCCI requested the Commission to refrain from passing the results
of mismanagement of MSEDCL onto the consumers.
MSEDCLs reply
2.5.8 MSEDCL submitted that it purchases the power from MSPGCL at the rates approved
by the Commission. MSPPGCL is a separate corporate entity and MSEDCL does not
Page 19 of 148
have any specific comment to offer.

2.5.9 MSEDCL further submitted that out of total power purchase; almost 95% of total
power procurement is done at Regulated Tariffs as approved by the MERC or CERC.
The balance power required is procured on RTC basis or for specific period is
purchased through power exchanges or through competitive bidding on transparent etendering basis. Further curtailment of such power purchase cost (from approved
sources) would result in lower availability of power.
2.5.10 As regards procurement of power from RGPPL, MSEDCL submitted that it has
entered into a long term PPA with RGPPL. MSEDCL has highlighted that the rates
from the traders vary month on month and the availability of specific quantum of
power cannot be assured from the trading companies. Further, considering the long
term contract obligations and other technical and commercial parameters, MSEDCL
scheduled power from RGPPL.
Commissions ruling
2.5.11 In the present Order, the Commission has undertaken detailed analysis for
MSEDCLs power purchase quantum and costs during FY 2011-12 and FY 2012-13.
The Commissions views and analysis on the same are provided in the respective
section for Power purchase for FY 2011-12 and FY 2012-13 of the Order.
2.6
Carrying cost
2.6.1 Bharat Forge submitted that MSEDCL has proposed to recover Carrying costs of
deferred approvals from the consumers. The consumers are not responsible for
deferred approvals but, are made to pay for it. Bharat Forge suggested that while
approving True up, arrears not recovered by MSEDCL for FY 2011-12 and FY 201213 be considered and amount of True up be reduced to the extent of arrears during this
period.
2.6.2 VIA, Federation of Industries Association and Urja Prabodhan Kendra submitted that
MSEDCL has claimed carrying cost of Rs. 1051 crore on Orders of MERC and
APTEL from 20 October, 2006 to 30 December, 2011. While approving these Orders
neither MERC nor the Honble APTEL approved any carrying cost. Allowing any
amount of carrying cost will be against the interest of consumers. Further, MSEDCL
is claiming Rs. 1317 crore of carrying cost in True up for FY 2011-12 and FY 201213. MSEDCL is responsible for not submitting Petitions on time hence these carrying
costs should not be allowed.
2.6.3 Prayas Energy Group submitted that the Petition includes carrying cost on deferred
recovery of Rs. 1051 crore which has been calculated considering amounts pertaining
to Orders dating from 2008. However in the intervening period several Tariff
revisions have occurred. No explanation has been provided in the Petition as to why
such costs were not recovered in the intervening period. It also highlighted that the
Petition includes carrying cost of Rs. 1317 crore on True up of FY 2011-12 and FY
Page 20 of 148
2012-13. As per the Tariff Regulations MSEDCL should have filed the Petition in
November 2012. Thus, MSEDCL has delayed submission of Petition by 14 months.
The carrying cost of Rs. 1317 crore could have been easily avoided by MSEDCL and
consumers do not have any role in this delay. Hence, this carrying cost should not be
imposed as Tariff burden on the consumers.
MSEDCLs reply
2.6.4 MSEDCL submitted that usually for power distribution companies the concept of
carrying cost pertains to the cost related to the expenses disapproved during the Tariff
determination process, but subsequently allowed either by the Commission after
review process or by the Appellate Authority in case the utility has contested the
original decision of the Commission. As a consequence of such belated approvals, the
servicing (through tariff) of such legitimately incurred cost however also gets delayed,
which further results in MSEDCL paying higher cost by way of interest on working
capital. Later on when such legitimately incurred costs are allowed, MSEDCL needs
to be simultaneously compensated for the time value of money lost during the
dormant period, when MSEDCL was prevented from recovery of such legitimately
incurred cost.
2.6.5 It is pertinent to note that MSEDCL is always required to incur the cost in advance i.e.
much before such recovery is allowed by MERC. This adds further to the hardships of
MSEDCL since those payments are made by defaulting on legitimate generation
payments. This has a severe cascading effect which at times makes it difficult for
generation companies (especially MSPGCL) to effect advance payment for coal
supply. This has happened practically in every True-up Petition and hence MSEDCL
has requested to permanently address this issue by allowing the carrying cost.
Accordingly, MSEDCL has sought the cost of carrying disallowed costs over the
years until approved by the appropriate Authority. These are all legitimate expenses
duly audited but the recovery of the same is delayed. Therefore, MSEDCL has
calculated the carrying cost at a rate of 12% p.a.
Commissions ruling
2.6.6 The Commission has explained its rationale for allowing carrying cost on delayed
recoveries in the Interim relief Order in Case No. 38 of 2014 dated 3 March 2014. The
rationale is based on the settled principle as per the Judgment of the Honble ATE in
Appeal No. 153 of 2009 in the matter of North Delhi Power Limited vs. Delhi
Electricity Regulatory Commission. However, the Commission has not allowed
MSEDCLs claim of carrying cost of Rs. 1317 crore on Truing up amount of FY
2011-12 & FY 2012-13. This has been discussed in paragraph 4.24.2 and 4.24.3 of
this Order.
2.7
GoMs decision regarding reduction in electricity rates
2.7.1 Bharat Forge submitted that MSEDCLs Petition does not mention anything regarding
Page 21 of 148
GoMs decision dated 29 January, 2014 related to reduction in electricity rates in

respect of residential/ commercial/ Industrial/ Agriculture consumers. It is not clear
how much relief the above mentioned consumer categories are supposed to get if
Governments subsidy as well as proposed Interim relief (AEC 1 & 2) are considered.
MSEDCLs reply
2.7.2 MSEDCL submitted that the Government of Maharashtra has taken a decision to
provide the relaxation to residential (consumption limited to 0-300 units); industrial,
commercial, agriculture and power-loom consumers vide G.R. No. Sankirna
2013/Pr.Kr. 278/ (Bhag-1)/Urja-5 dated. 29 January, 2014. Even though, it has sought
increase in energy charges, the consumers of above mentioned categories shall
continue to pay reduced energy charges considering the above referred GR (i.e. about
20% reduction over September 2013 Tariffs). Thus the consumers ultimately shall
continue to pay lower tariffs as hike approved by the Commission will be neutralized
by subsidy provided by Government of Maharashtra in line with the Government
resolution. However, as per the provisions of the Electricity Act 2003, the
Commission has been vested the powers of determination of Tariff and Government
of Maharashtra does not have any role to play in Tariff determination. Therefore,
MSEDCL has not mentioned anything about the decision of Government of
Maharashtra.
Commissions ruling
2.7.3 The Commission noted the submissions of MSEDCL. Section 65 of the EA 2003
empowers the State Government to grant subsidy to any consumer or class of
consumers in the tariff determined by the State Commission under Section 62 of the
EA 2003.
2.8
Interest on RLC and Refund of Electricity Duty on ASC
2.8.1 Bharat Forge submitted that the issue of paying interest charges on the recovery of
RLC amount be finalised immediately and MSEDCL be directed to make necessary
provision in their ARR proposal. Bharat Forge also submitted that the refund of
Electricity Duty on the eligible amount of ASC refund has not been considered and
MSEDCL has not worked out/ considered the refund of electricity duty so far. Bharat
Forge requested the Commission to direct MSEDCL to refund the appropriate portion
of Electricity Duty after getting necessary sanctions from GoM.
MSEDCLs reply
2.8.2 MSEDCL submitted that the present Petition is for Final True up of FY 2011-12 and
FY 2012-13. MSEDCL in the present Petition has not proposed any change in the
Tariff philosophy. However allowing interest on RLC or refund of electricity duty on
ASC comes under the purview of the Commission.
Commissions ruling
Page 22 of 148
2.8.3 The issue of interest payment on RLC is sub-judice before the Honble Supreme
Court in Civil Appeal No. 2286 of 2012. Therefore, the Commission is of the view
that it is not appropriate to take any view on the subject matter.
2.9
High Tariff rate for Industries
2.9.1 Thane Small Scale Industries Association (TISSIA), The Millowners Association
submitted that average power rate in other nearby states like Andhra Pradesh, Gujarat,
Madhya Pradesh is around Rs. 4 to 4.50 whereas it is Rs. 6.34 in case of MSEDCL.
Due to this MSMEs are not in a position to take any additional burden of steep hike.
2.9.2 Marathwada Industries Association submitted that the proposed Additional Energy
Charges would lead to a steep Tariff hike for the consumers and hence need not be
allowed. Vidarbha Chamber of Commerce & Industry submitted that the Commission
had fixed the power purchase rate of Rs. 3.39 per unit in August, 2012 while the
actual power purchase rate is Rs. 3.92 per unit as per the Petition. Vidarbha Chamber
of Commerce & Industry therefore requested the Commission to reject the request.
MSEDCLs reply
2.9.3 The Tariff rate of MSEDCL prima facie appears to be on higher side compared to
Tariff rates of other State utilities, however following issues need to be considered:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
The difference in power generation, power purchase expenses considering

the diversity in the power generation sources, available power resources
(Thermal/Hydro/Nuclear/NCE);
MSEDCL distributes electricity in the largest geographical area in India as
compared to other Distribution Utilities;
Geographical diversity in the State;
Variation in power purchase cost in different states;
Diversity in consumer mix and consumption pattern;
Economic/Industrial/Agricultural Policy of the State;
Other terms and conditions of tariff;
Historically followed principles and policies regarding determination of
tariff etc.
Financial Position of Utilities including unrealistic assets and liabilities carry
forwarded due to unbundling into Companies
2.9.4 Considering above parameters, it is not appropriate to compare stand alone Tariff of
MSEDCL with the Tariffs of other State distribution utilities. The electricity Tariff
applicable to HT-Industry consumer need not to be seen in isolation, since terms &
conditions of Tariff, incentives /rebates available also played an important role. As far
as MSEDCL is concerned, the existing tariff provides ToD rebate, LF/PF incentives
etc. which considered together provides 20-25% reduction in Tariff to HT industry,
which makes efficient use of electricity and optimum utilisation of demand.
2.9.5 As regards the objection against the steep tariff hike, MSEDCL submitted that there
has been no Tariff hike since the Order of the Commission on 16 August, 2012 till
Page 23 of 148
date. It has also submitted that the recent charges being recovered as per Order of the
Commission dated 3, 4 and 5 September, 2013 are temporary in nature and are
applicable for only six months. MSEDCL submitted in its Petition that AEC was
created in order to recover the gap computed based on audited accounts. MSEDCL
submitted that similar methodology was adopted by the Commission in earlier Orders.
2.9.6 MSEDCL submitted that it was under financial stress and its request for AEC was in
line with the National Tariff Policy and the Tariff Regulations, 2005 whereby the
variance between the approved cost / revenue with the actual audited cost /revenue is
claimed as gap. MSEDCL has also highlighted that the claim for the energy charges is
as per the actual cost incurred in the past.
Commissions ruling
2.9.7 The extant Regulations for Tariff determination is on the principles of cost-plus Tariff
determination, under which the Commission allows recovery of all approved costs
and expenses along with return on equity. Based on these principles the Commission
determines Tariff or allows any pass through of additional recovery. Based on
MSEDCLs Petition, the Commission has already approved recovery of additional
energy charges in the form of Interim Charge. The Commission views that increase in
tariff is inevitable when increase in admissible costs are passed to consumers.
However, it may also be noted that the Commission has not allowed any further
additional recovery following final Truing up in this Order.
2.10 High O&M costs
2.10.1 TSSIA, Avinash Prabhune and Garware Polyester Ltd. submitted that the
administrative costs of MSEDCL need to be reduced. VIA submitted that the
Commission has liberally approved increase in O&M expenses and MSEDCL has
submitted higher amount of O&M expenses for approval.
is large variation on following heads of expenditure:
Table 5: Variation in heads of expenditure as submitted by Urja Prabodhan Kendra (Rs. crore)
Particulars
FY 2011-12 A&G Expenses
FY 2012-13 Employee Expenses
FY 2012-13 A&G Expenses
Approved
290
2438
314
Actual
444
3121
462
Deviation
50%
28%
47%
2.10.3 As per MSEDCL these expenses are uncontrollable. If the Commission allows this
expenditure then the licensees will be under no pressure of projecting/ controlling
these expenses within approved figures.
2.10.4 Neo Sanyas Foundation submitted that an independent audit needs to be conducted
into the accounts of MSEDCL along with an unbiased independent study into the
functioning and management of MSEDCL. Neo Sanyas Foundation submitted that
Page 24 of 148
such audits need to be carried out before granting any Tariff rise.
MSEDCLs reply
2.10.5 MSEDCL submitted that while approving, the A&G expenses for FY 2012-13, the
Commission considered the weighted average CAGR of Consumer Price Index for
Industrial Workers (40%) and Wholesale Price Index (60%) between March 2007 and
March 2012 i.e. 8.27%. The Commission escalated the approved net A&G expenses
for FY 2011-12 by 8.27% to arrive at the approved A&G expenses for FY 2012-13.
Further, there is always increase in the rent after expiry of lease period.
2.10.6 Moreover, Pandharpur & Akluj Division under Solapur O&M circle have paid
Grampanchayat Tax for the year FY 2008-09, FY 2009-10, FY 2010-11, 2011-12 and
FY 2012-13. Solapur Rural Division has paid NA Tax & Grampanchayat tax for the
period April 2006 to March 2013. Thane O&M circle has paid property tax for last 5
years in FY 2012-13.
2.10.7 There is normal increase in expenditure on insurance of vehicles. Further; during the
year new vehicles have also been acquired. There is increase in conveyance & travel
in FY 2012-13 due to increase in diesel, petrol rates and revision of rates of travelling
allowance. Due to reasons mentioned above, the A&G Expenses are on higher side
than those approved. These are legitimate expenses and accordingly have been
submitted for the Commissions approval.
Commissions ruling
2.10.8 The Commission has noted the objections in this regard and also MSEDCLs response
to these objections. The Commission has dealt with this issue in detail in the section
on A&G Expenses for FY 2011-12 and FY 2012-13 respectively.
2.11 Bad Debt/ Arrears
2.11.1 TISSIA and Kolhapur Zilha Shetkari Vinkari Sahakari Soot Girani Ltd. submitted that
the burden of bad debt should not be passed on to honest consumers.
2.11.2 Urja Sahyog submitted that details of arrears as on the date of submission of the
Petition have not been shown anywhere in the executive summary and proposal. It is
estimated that Agriculture category consumers contribute to nearly Rs. 8000 crore
arrears whereas total arrears considering all other category consumers is around Rs.
14000 crore to Rs. 15000 crore. These figures can be corrected to actual and if
recovered the burden on account of interest on long term loans, working capital and
part of short fall in revenue can be met with and not required to pass on to the
consumes.
2.11.3 Tata Motors submitted that considering improvement in financial performance of
MSEDCL in last 3 years, provision for bad debts should not be allowed to MSEDCL
for FY 2011-12 and FY 2012-13.
Page 25 of 148
2.11.4 Vidarbha Chamber of Commerce & Industry submitted that dues of about Rs. 23,000
crore were outstanding from various consumers and that no efforts were being taken
up to recover them.
MSEDCLs reply
2.11.5 MSEDCL submitted that the arrears to be recovered from the consumers of different
categories are no doubt mounting (in terms of absolute value) and needs effective &
concentrated efforts for recovery of the same. It shall however not be reasonable &
proper to look at this in isolation to the extent of increasing level of receivables. But
at the same time, one needs to look into the reasons for accumulation of arrears, the
permissible action which could be taken for recovery and the time consumed in this
process, the constraints & limitations of the MSEDCL to resort to coercive action, etc.
It cannot be presumed that all the consumers shall pay their dues in time and therefore
it is but natural that there will always be some arrears to be recovered from the
consumers. In the circumstances, the recovery of some portion from the past arrears
remains less than the actual arrears. It shall therefore be necessary to judge the
efficiency of the MSEDCL in respect of recovery of arrears by way of comparing the
assessment during a particular month and recovery of arrears during that particular
month. It is seen that, the MSEDCL has been able to recover the amount equivalent to
assessment during the respective months, except a few categories like agriculture,
rural public water works, etc. MSEDCL have taken the following steps to curb the
arrears:
a) Introduction of photo billing, due to which manual errors are reduced and
consumer have a check on his reading
b) Damini Squad is introduced to have check over the reading taken by private
agency
c) Reduction of average billing, locked status by taking meters out the rooms.
d) To reduce the arrears burden on Sarvajanik Nal Pani Yojana and to increase the
revenue of the MSEDCL, GoM vide order dated 15 June, 2009 had introduced the
Jeevan Sanjivani Yojana. The said scheme was applicable for rural Public
Water Works.
2.11.6 If a consumer of electricity either neglects or fails to pay the energy bills of the
MSEDCL, then the powers have been conferred upon the MSEDCL to disconnect his
power supply after giving him a notice of clear 15 day as per section 56 of Electricity
Act 2003. MSEDCL exercises this power for recovery of arrears. It would not be
appropriate to presume that, once the power supply is disconnected, the dues are
received from a defaulting consumer immediately. Moreover, in case of such
consumer where power supply plays an important role in maintaining its financial
viability (like industrial, agricultural. etc) disconnection of power supply may
drastically reduce his payment capacity and then it would be very difficult for
Page 26 of 148
MSEDCL to recover the dues in case his financial status deteriorates beyond a certain
limit. In such situations, the consumers undertaking shall become sick and may close
down, and then the only option left with the MSEDCL shall be to initiate legal
proceedings for recovery of dues. In the present system, the legal proceedings needs
considerable, time to conclude and even if MSEDCL succeeds, then also recovery is
difficult. General measures taken for recovery of arrears are as under:
a) To issue notices to pay the energy bills.
b) To disconnect the power supply.
c) To file a legal suit for recovery of arrears.
d) To encourage the consumers to pay the arrears by giving various facilities such as
payment by easy installments, waiver of minimum charges, waiver of DPC and
concessional interest, etc.
e) Whenever necessary to introduce the concession schemes so that it becomes easy
for consumers to clear their arrears. Wide publicity is given through available
media for such schemes.
f) The consumers are contacted personally by our local offices and educated to pay
the bills.
g) Disconnection drive is regularly arranged. In such a drive, Engineer along with
Janmitra and staff from Account section visit the premises and recovery on the
spot is done by giving receipts on the spot.
2.11.7 MSEDCL further submitted that it maintains its accounts on accrual basis i.e. income
and expenses are recorded as they occur, regardless of whether or not cash has
actually changed hands. The financial statements have been prepared based on accrual
method of accounting in accordance with the generally accepted accounting principles
and the provisions of the Companies Act, 1956 as adopted consistently by MSEDCL.
So arrears if any would automatically reflect in receivables in current assets and
recovery of arrears is adjusted against the same account. Revenue billed irrespective
of actual recovery of revenue is considered for ARR and therefore any accrual of
arrears or receipt of arrears will not affect the proposed gap. Further barring few
categories, collection efficiency has improved significantly. However, efforts are
being done to improve the collection efficiency in other categories as well.
2.11.8 As regard Tata Motors objection, MSEDCL replied that bad debts are inseparable
incident of every business including the business of electricity distribution. The
Commission has been following the principle that bad debts shall not exceed 1.5% of
revenue in any financial year and accordingly approving the provision for bad debt on
normative basis. Accordingly, MSEDCL has made the provision for bad debt as per
MERC principle, which needs to be considered as a legitimate item of expenditure.
Page 27 of 148
Commissions ruling
2.11.9 The Commission approves various components of ARR including provision for bad
debts based on provisions in MERC (Terms and conditions of Tariff) Regulations,
2005. Accordingly, the Commission has dealt with this issue in detail in sections on
Provision for bad and doubtful debts for FY 2011-12 and FY 2012-13 respectively.
2.12 Capital Expenditure
2.12.1 VIA submitted that depreciation, interest on long term loans and return on equity of
MSEDCL have been increasing steeply year on year due to high capital expenditure
but, the results of the capital expenditure are nil and consumers are burdened with
higher tariffs. Aam Aadmi Party requested the Commission to direct MSEDCL to
furnish benefits of capital expenditure.
2.12.2 Ichalkaranji Sahakari Pani Purawatha Sanstha Maryadit, Krantimata Lakshmibai
Nayakvadi Sahakari Panipurawatha Sanstha Maryadit, and others submitted that there
has been no return to the consumers for the capital expenditure undertaken by
MSEDCL, though MSEDCL has recovered this amount from the consumers. It is
necessary to undertake cost benefit analysis and decide the right amount for capital
expenditure.
MSEDCLs reply
2.12.3 MSEDCL submitted that the basic need/ objective of incurring the capital expenditure
are to upgrade the ageing and weak distribution network to desirable standards so as
to provide better network reliability and sustainable performance. It has been
therefore felt essential to take necessary measures, in order to meet the challenges
thrown by the Electricity Act 2003 and rules made there under like Standard of
Performance (SoP) Regulation framed by the Commission. The Capital Expenditure
also envisaged re-enforcement of the system to provide quality, security and
availability of power supply to the consumers, to undertake system development to
meet the load growth, achieving the targeted reduction in system losses, undertake
automation and other improvement works to enhance customer service and fulfill
social obligation such as electrification of un-served areas.
2.12.4 The Commission has given in-principle approval to all infrastructure schemes having
capital expenditure more than Rs. 10 crore. While giving approval the Commission
had already scrutinized these expenditures on each scheme. MSEDCL also submits
the cost benefit analysis (CBA) for all infrastructure schemes to the Commission. This
cost benefit analysis will also be examined and investigated by the Commission. The
reduced distribution loss, higher collection efficiency, no of new connections released
and time taken for release of new connections are some of the tangible benefits of
capital expenditure which MSEDCL has achieved.
Commissions ruling
Page 28 of 148
2.12.5 MSEDCL has submitted the cost-benefit analysis of various capital expenditure
schemes undertaken by it. The Commission has analysed the submissions of
MSEDCL and has addressed this in the section on Capital expenditure and
capitalisation for FY 2011-12 and FY 2012-13 respectively in this Order.
2.13 Return on Equity Capital
2.13.1 Urja Prabodhan Kendra submitted that there is large variation on following heads of
expenditure:
Table 6: Variation in RoE as submitted by Urja Prabodhan Kendra (Rs. crore)
Particulars
FY 2011-12 RoE
Approved
849
Actual
1009
Deviation
18%
FY 2012-13 RoE
989
1234
24.7%
MSEDCLs reply
2.13.3 MSEDCL submitted that the return on equity has been calculated based on the actual
equity position in audited Accounts and provisions of the MERC (Terms and
Conditions of Tariff) Regulations 2005.
Commissions ruling
on Return on Equity for FY 2011-12 and FY 2012-13 respectively.
2.14 Interest on Working Capital
is large variation on following heads of expenditure:
Table 7: Variation in Interest on Working Capital as submitted by FIA (Rs. crore)
Particulars
FY 2011-12 Interest on Working Capital
Approved
317
Actual
709
Deviation
123%
FY 2012-13 Interest on Working Capital
550
717
30%
2.14.3 Tata Motors submitted that MSEDCL has considered Rs. 709 crore and Rs. 717 crore
Page 29 of 148
as actual interest on working capital and on consumer security deposit for FY 2011-12
and FY 2012-13 respectively. As per the provisions of MERC (Terms and conditions
of Tariff) Regulations, 2005 MSEDCL should get nil interest on working capital.
MSEDCLs reply
2.14.4 MSEDCL submitted that the Commission has not allowed any interest on working
capital since the working capital requirement based on normative principle works out
to nil, the provision of reducing the working capital by the total amount of security
deposits is making the net working capital as negative. The amount of security deposit
as reflected in the books of accounts of MSEDCL is just a notional amount, such
amount though reflects on the balance sheet in the transfer scheme; MSEDCL has not
physically received such deposit in cash from erstwhile Maharashtra State Electricity
Board.
2.14.5 Further, the disallowance of certain cost in past and approved subsequently has
affected the cash flow position of MSEDCL whereby even the interest on working
capital claimed by MSEDCL in the Tariff Order has been disallowed by the
Commission. Such a situation has resulted in a dual adverse impact on the financial
position of MSEDCL, on one side the legitimately incurred cost is disapproved by the
Commission during the issue of tariff order and on the other side; the interest on
working capital used to meet such legitimate cost is also disallowed. Due to this, the
interest on working capital has seen a variation.
2.14.6 As regard Tata Motors objection MSEDCL replied that the calculation of the interest
on working capital is as per the provisions of the MERC (Terms and Conditions of
Tariff) Regulations 2005 and the same is correct as per the Audited Accounts.
Therefore, there is no need to review the same.
Commissions ruling
on Interest on Working capital and on consumer security deposit for FY 2011-12 and
FY 2012-13 respectively.
2.15 PGCIL Charges
2.15.1 Urja Prabodhan Kendra submitted that the Power Grid and other charges for FY
2011-12 and FY 2012-13 are Rs. 741 crore and Rs. 1004 crore respectively. These
charges are very high. The corresponding power purchase in MU is not shown. From
the Petition it is not clear on what account these charges were shown and the original
estimate in ARR.
MSEDCLs reply
2.15.2 MSEDCL submitted that PGCIL charge is the charge paid to PGCIL, the Central
Transmission Utility, to facilitate transmission of power across the State from central
Page 30 of 148
Generating Stations such as NTPC, NPCIL etc. These charges are paid as per the
approved rates by CERC in accordance with the POC charges Regulation. Details of
estimated, approved and actual charges paid to PGCIL are given in following table.
Table 8: Details of estimated, approved and actual charges paid to PGCIL as submitted by MSEDCL
FY2011-12 (Rs. crore)

Estimated Approved Actual
853
853
751
FY 2012-13 (Rs. crore)

Estimated Approved Actual
960
960
991
Commissions ruling
on Transmission charges and SLDC charges for FY 2011-12 and FY 2012-13
respectively.
2.16 Power Purchase from Renewable Energy Sources
2.16.1 Urja Prabodhan Kendra and Federation of Industries Association submitted that from
the Petition it is not clear how much wind energy and solar energy was purchased in
FY 2011-12 and FY 2012-13.
MSEDCLs reply
2.16.2 MSEDCL submitted that the following table shows the Wind Energy purchased
during FY 2011-12 and FY 2012-13.
Category
FY 2011-12 (MU)
FY 2012-13 (MU)
Wind Energy
2,625
3,407
2.16.3 MSEDCL submitted that the following table shows the Solar Energy purchased
during FY 2011-12 and FY 2012-13.
Category
Solar Energy
FY 2011-12 (MU)
11
FY 2012-13 (MU)
37
Commissions ruling
on Renewable purchase obligation for FY 2011-12 and FY 2012-13 respectively.
2.17 Industrial Sales
2.17.1 Urja Prabodhan Kendra submitted that the executive summary shows drastic
reduction in HT and LT Industrial sales for year FY 2012-13. It is questioned whether
Industrial growth in Maharashtra has declined.
MSEDCLs reply
Page 31 of 148
2.17.2 MSEDCL submitted that the year on year growth of industrial category is around 1%
for MSEDCL. MSEDCL has projected the Industrial sales purely on the basis of past
sales growth, mitigation of load shedding, proposal of increasing ToD rate by Rs. 1.50
per unit, uninterrupted power supply and various other positive reasons. MSEDCL
states that though the sales of industrial category for MSEDCL as a whole has
decreased, the overall consumption of Industries in Maharashtra served by MSEDCL
has witnessed a growth of ~8% in FY 2012-13 considering the fact that many
industries has opted for open access resulting in shortfall in consumption of MSEDCL
power. The following table highlights the growth of Industrial category as follows:
Table 9: Growth of Industrial category as submitted by MSEDCL
Category of consumers
HT Industrial Consumption
Open Access
HT Industrial Consumption with Open
Access
LT Industrial
Total Industrial
MSEDCL
FY 2011- FY 2012Growth
12
13
MU
MU
%
26,470
26,683
0.81%
297
2,768 831.99%
26,766
29,451 10.03%
6,976
33,742
7,136
36,587
2.29%
8.43%
2.17.3 Further, MSEDCL submitted that Indias Index of Industrial Production (IIP) data for
March 2013 shows the slowest annual Industrial growth of 1% in last 20 years, and
the second lowest since 1982, but Maharashtra has witnessed a growth in Industrial
GDP at 9.10% which is a notable achievement. However, due to the impact of open
access, MSEDCL has witnessed a marginal growth in the sales as compared to
projection.
Commissions ruling
2.17.4 The issue has been dealt in detail in the Interim Order issued on 3 March, 2014.
2.18 Issue of Tariff in MPECS area
2.18.1 Shri. Sunil Sonawane and others submitted that on 27 January, 2011 the Commission
granted license to MSEDCL to supply electricity in the area of Mula Pravara Electric
Co-operative Society area. An Appeal (Appeal No. 39 of 2011) was filed before the
Honble ATE against the grant of license. The Honble ATE ruled against the grant of
license to MSEDCL and directed to follow the procedure for grant of license as per
the Electricity Act. Since last 2 years the Commission has started working on the
directions but, final decision is pending. In these circumstances application of
MSEDCLs increased Tariff rates to the consumers of Mula Pravara Co-operative
Society area without deciding the license issue is against law. The consumers
requested the Commission to hold independent hearing for the consumers in MPECS
area.
Page 32 of 148
MSEDCLs reply
2.18.2 MSEDCL submitted that on 31 January, 2011 the license of MPECS to supply
electricity in MPECS area expired. As per the Order issued by the Commission on 27
January, 2011 MSEDCL started supplying electricity in MPECS area. The Tariff
charged to the consumers in MPECS area is as determined by the Commission. As per
the Honble ATE Judgement in the Appeal No. 39 of 2011 the hearings in the matter
are underway. Also Honble ATE has specified that MSEDCL shall continue to
supply in the current conditions. The Honble ATEs Judgement has not been stayed
by any other higher court. Prior to 31 January, 2011 the consumers in MPECS were
expected to be charged as per the Tariff determined by the Commission. Currently as
MSEDCL has been supplying power to MPECS area the proposed increase in Tariff
is also applicable to the consumers in MPECS area which does not lead to any
illegality. If any consumer desires to express his views in this matter then the same
may be expressed at the time of Public Hearing arranged for this purpose.
Commissions ruling
2.18.3 This issue is being dealt with in the ongoing hearings before the Commission in Case
No. 85 of 2010 and Case No. 87 of 2010. The issue raised by the objector is not
related in the proceedings of the present case.
2.19 Change in Consumer Category
2.19.1 Maharashtra Industrial Development Corporation (MIDC) submitted that currently
HT II commercial Tariff is being charged to water works in some of the MIDC area.
The rate charged should be uniform and same as that applicable to other public water
works i.e. HT IV category. MIDC also requested that the bills charged by MSEDCL
as per the Interim Order of the Honble Mumbai High Court to charge as per HT II
(commercial) category be annulled.
2.19.2 The Association of the Managements of Un-aided Engineering Colleges, Maharashtra
submitted that the consumers need to be categorized as per the purpose for which the
supply is required and that such consumers are spared from the proposed increase in
Tariff.
MSEDCLs reply
2.19.3 MSEDCL submitted that the present proceedings are for the approval of Truing up of
ARR for FY 2011-12 and FY 2012-13. In the present Petition, MSEDCL has not
proposed any change in the present categorisation as well as Tariff philosophy. The
change in consumer category is out of purview of the present proceedings. As per EA
2003, and MERC (Terms and conditions for determination of Tariff) Regulations,
2005, the Commission has been assigned the right to form independent category for
any consumer/ group of consumers as well as to form category as per consumers
consumption and determination of electricity rate for consumers in various categories.
The Commission determines the Tariff for various consumer categories and
Page 33 of 148
accordingly MSEDCL charges the Tariff.

2.19.4 During the public hearing held on 28 February, 2014 MSEDCL submitted that it was
agreeable, in principle, to the applicability of tariff of PWW category to the water
works of MIDC.
Commissions ruling
2.19.5 The Commission has taken note of the suggestions/ objections raised as well as the
submission of MSEDCL. However, the present case does not have the scope of
change or redetermination of consumer categories. Therefore, the Commission views
that the issues raised are not relevant to the current Truing up Petition. The objectors
may raise the issues during the proceedings of MYT Tariff Petition of MSEDCL.
2.19.6 Regarding the objection of MIDC the Commission is of the opinion that the water
works of MIDC is akin to the services rendered by the Public Water Works owned,
operated, and managed by local self Government bodies as it supplies water to
industries as well as for residential purposes in general. Therefore, the Commission
views that the tariff, which is applicable to Public Water Works category, shall be
applicable to MIDC.
2.20 Lack of clarity about impact of relief on the Tariff
2.20.1 Prayas Energy Group submitted that as per the Petition MSEDCL has filed an Appeal
before the Honble ATE Judgement dated 16 August, 2012 in Appeal No. 227 of
2012. The impact on Tariff of this anticipated relief due to pending litigation if
resolved in favour of MSEDCL has not been quantified in the Petition as per the
prevailing practice.
MSEDCLs reply
2.20.2 MSEDCL did not provide any reply.
Commissions ruling
2.20.3 The Commission directs MSEDCL that it shall, in all its future Petitions, provide
details of any pending litigation and expected impact on Tariff in case it is settled in
its favour.
2.21 Classification of all expenses as uncontrollable
2.21.1 Prayas Energy Group submitted that the MERC (Terms and Condition of Tariff)
Regulations, 2005 divide cost components of Tariff into two categories, viz.
controllable and uncontrollable. The Order in Case No. 19 of 2012 made it clear that
all the cost components cannot be considered as uncontrollable. In spite of this the
Petition considers all costs and expenses as uncontrollable.
MSEDCLs reply
Page 34 of 148
2.21.2 MSEDCL did not provide any reply.

Commissions ruling
2.21.3 The Commission is of the view that all the expenses cannot be deemed as
uncontrollable. Though MSEDCL has considered all expenses as uncontrollable, the
Commission has considered various heads of expenses to be controllable and has
determined the sharing of efficiency gains/ losses on account of controllable
parameters for FY 2011-12 and FY 2012-13 in the respective chapters on True-up of
FY 2011-12 and FY 2012-13.
2.22 Tariff applicable to Agriculture category
2.22.1 Shri Siddheshwar Sahakari Pani Purawatha Mandali Ltd., Shri Birdev Sahakari Pani
Purawatha Mandali Ltd., Shri Arjuneshwar Sahakari Pani Purawatha Mandali Ltd,
Kurukali Sahakari Pani Purawatha Sanstha Maryadit and others submitted that
currently there is only 8 hours of supply for Agriculture which again is intermittent.
The tariff applicable to Ag pumps is high and is unaffordable to farmers hence,
MSEDCLs demand for increasing electricity tariff for Ag- pumps should not be met
and the Tariff applicable for Ag- pumps should be kept at the prevailing Tariff rate at
least for next 3 years.
MSEDCLs reply
2.22.2 MSEDCL submitted that the Tariff applicable to Agriculture category consumers
since the last 8 years was less than the average cost of supply.
Table 10: Year wise Tariff applicable to Agriculture category as submitted by MSEDCL
FY
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
Tariff applicable to metered Average cost

consumers as per MERC (Rs.) Supply (Rs.)
1.10
4.09
1.10
3.71
1.10
3.99
1.37
4.48
1.60
4.70
1.76
5.21
2.10
6.00
of
2.22.3 The Tariff charged to the Agriculture category consumers is cross-subsidised by

means of charging higher Tariff to Industrial and commercial category consumers
who are charged Tariff which is higher than the average cost of supply. Further, GoM
provides subsidy for Agriculture category, hence the actual Tariff charged to the
Agriculture category consumers is lower than the Tariff as determined by the
Commission. As per the GoM notification dated 29 January, 2014 subsidised rates
have been offered for LT and HT Agriculture consumers. Metered Agriculture
consumers are charged Rs. 0.55 to Rs. 0.92 per unit rate based on connected load.
Page 35 of 148
Unmetered Agriculture consumers are charged Rs. 85 to Rs. 129 per HP per month
rate based on connected load and category. Considering this the Agriculture category
consumers have been charged very moderate Tariff.
Commissions ruling
2.22.4 The present Petition of MSEDCL is for approval of True up for FY 2011-12 and FY
2012-13 and doesnt deal with Tariff fixation. Therefore, the objections and
suggestions made are not relevant for this Petition. However, the objectors may come
up with their objections and suggestions during the proceedings of MYT Tariff
Petition of MSEDCL.
2.23 MSEDCL and MSPGCL Accounts not matching
2.23.1 Tata Motors submitted that the data of power purchase from MSPGCL for FY 201112 as furnished by MSEDCL does not match with account statements of MSPGCL.
Tata Motors further submitted that as per Audited Accounts of MSPGCL for FY
2011-12 MSPGCL has received Rs. 12744.38 crore. Further MSPGCLs Account
statement does not reflect any of demand/ shortfall/ loss towards payment of dues of
Rs.700 crore.
MSEDCLs reply
2.23.2 MSEDCL and MSPGCL are two separate corporate entities and their Accounts are
prepared separately. Due to adjustments and provisions made in income and
expenditures, the Accounts may or may not match. MSPGCL may not make the same
provisions as made by MSEDCL in their Accounts since making provisions is a
prerogative of each corporate entity.
Commissions ruling
2.23.3 The Commission scrutinizes the audited accounts of MSEDCL and MSPGCL
separately. Based on detailed scrutiny and due diligence carried out by the
Commission the Aggregate Revenue Requirement for MSEDCL and MSPGCL are
approved separately.
2.24 Transmission charges
2.24.1 Tata Motors submitted that at page 32 of the Petition MSEDCL submitted that Rs.
2200 crore are paid as transmission charges to MSETCL. However as per Truing-up
Order of MSETCL (Case No. 30 of 2013), MSETCL has received Rs 2264.25 crore
as revenue from Transmission Tariff and same is approved by the Commission. As
per Intra State Transmission Tariff Order MSEDCL is contributing around 80% of
cost of Total Transmission System Cost. Based on this Tata Motors has worked out
actual payment to MSETCL by MSEDCL for FY 2011-12 as shown below:
Page 36 of 148
Table 11: Summary of workings provided by Tata Motors
Sr.
No.
1
2
3
Parameter Description
As computed by Remarks
Tata Motors
Actual Revenue earned by MSETCL Rs. 2264. 25 crore
Page No. 95, MERC
from Transmission charges in FY 2011Case No. 39 of 2013
12
% share of MSEDCL
80%
2.24.2
Actual payment by MSEDCL to Rs. 1811 crore
Whereas MSEDCL
MSETCL towards Transmission Charges
has considered Rs.
in FY 2009-10
2200 crore
MSEDCLs reply
2.24.3 MSEDCL submitted that it pays Transmission Charges to STU as per the Tariff
decided by the Commission. STU further distributes the amount amongst the
Transmission Licensees of the State including MSETCL.
Commissions ruling
on Transmission charges for FY 2012-13.
2.25 Non consideration of Rs. 2000 crore towards revenue for FY 2012-13
2.25.1 Tata Motors submitted that MSEDCLs Account Statement for revenue of Rs. 44318
crore covers actual receipt up to March 2013. Rs. 2000 crore received under Case No.
28, 44 and 95 of 2013 is with effect from September 2013. Rs. 2000 crore revenue is
not getting considered in revenue table on page iii of Executive Summary under
actual of Rs. 44280 crore. Tata Motors requested the Commission to consider Rs.
2000 crore at revenue side while working out revenue gap for FY 2012-13. It further
stated that non consideration of Rs. 2000 crore towards revenue side would lead to
double recovery.
MSEDCLs reply
2.25.2 MSEDCL replied that the Commission vide Letter dated 20 September, 2012, has
allowed Rs. 424.53 crore to MSPGCL for provisional True up of FY 2011-12.
Further, as per the Order dated 8 February, 2013 in Case No. 77 of 2012, the
Commission has allowed Rs. 143 crore to MSPGCL as net impact on final True up of
FY 2010-11 and also approved the fixed charges for new stations Khaparkheda U5
and Bhusawal U4 i.e. a net impact of Rs.545 crore. Thereafter, the Commission issued
various Orders in respect of MSPGCL and MSETCL in September 2013. Some of the
expenses for MSPGCL were pertaining to previous years. As per the Accounting
Practice, a provision of Rs. 960 crore was made in FY 2012-13 accounts as per the
Page 37 of 148
following details.
Table 12: Details provided by MSEDCL
Particulars
Amount Rs. crore
Paras 4 and Parli 7 (Appeal No. 34 of 2012)
106
True Up of FY 09-10 and APR for FY 10-11 (Appeal No. 47 of
629
2012)
Difference in revenue due to Provisional and Final Energy Charges
178
for FY 2012-13
Fixed Charges for Khaparkheda 5 for FY 12-13
46
Total
960
2.25.3 Further, as specified in the Audited Report, MSEDCL has made provision of Rs
1821.03 crore as income which is getting reflected in revenue. However, the actual
cash will be realized in FY 2013-14. MSEDCL further submitted that the provisions
are made as per the Accounting Practice and are duly audited by the Statutory
Auditors. MSEDCL stated that there is no discrepancy in the data submitted by
MSEDCL.
Commissions ruling
on Revenue for FY 2012-13.
2.26 Energy Balance
2.26.1 Tata Motors submitted that the information pertaining to the power purchase units,
energy sale, power purchase cost, revenue amount from sale of power for FY 2012-13
as provided by MSEDCL is not trustworthy and leads to incorrect ARR gap of Rs.
6945 crore. Considering present Tariff MSEDCL must be earning windfall profits.
Tata Motors requested the Commission to examine submission made by MSEDCL
through third party audit.
2.26.2 Avinash Prabhune and Urja Prabodhan Kendra submitted that figure for energy
available for sale in the executive summary is lower than the Energy Sales which is
not understood. George John also submitted that the figures for NPCIL energy
quantum and the figures for NPCIL Tarapur differ. He also submitted that more
information including breakup of various other figures need to be provided.
MSEDCLs reply
2.26.3 MSEDCL provided point wise reply as follows:
Discrepancy in quantum of power purchase
2.26.4 MSEDCL submitted that net energy payable calculated by MSEDCL is correct. The
Page 38 of 148
power at Distribution Periphery injected and drawn at 33kV is not the power for
which MSEDCL needs to pay. It is the portion of energy which is injected and drawn
at 33kV which is included in the Energy at distribution periphery on which no
interstate transmission losses would be applicable.
Discrepancy in Sales
2.26.5 MSEDCL submitted that in the Petition, MSEDCL has clearly stated that the sales in
MU shown in Tables for Category wise sales and revenue (both Table 1 and Table 33)
include the sales to Distribution Franchisees at the input level.
2.26.6 However while calculating energy balance of MSEDCL as a whole, the sale to the
consumers of the Distribution Franchisee area has been considered rather than the
sales at input level. Since the Distribution Franchisee is an Agent to MSEDCL as per
the Franchisee Agreement, MSEDCL has to consider the loss within the Franchisee
area for Energy Balance.
2.26.7 Accordingly, as per the energy balance indicated in the Petition the energy available
for sale represents the category wise sale in Distribution Franchisee areas and the total
energy shown in the table for sales represents the energy sold to Distribution
Franchisees at input point is indicated.
SLDC Report and Discrepancy in Energy
2.26.8 MSEDCL submitted that it pays the generators as per the Regional Energy
Accounting Statement issued by WRLDC. MSEDCL further submitted that it pays the
generators on the basis of scheduled energy. However, in case the energy injection is
less, the generators get penalised as per the UI mechanism.
2.26.9 As regard query raised by Avinash Vinayak Prabhune and Urja Prabodhan Kendra,
MSEDCL submitted that in the Petition, MSEDCL has stated that the sales in MU
shown in category wise sales and revenue include the sales to Distribution
Franchisees at the input level. However while calculating energy balance of MSEDCL
as a whole, the sale to the consumers of the Distribution Franchisee area has been
considered rather than the sales at input level. MSEDLC submitted that since the
Distribution Franchisee is an agent to MSEDCL as per the Franchisee Agreement,
MSEDCL has to consider the loss within the franchisee area for energy balance.
Accordingly, in energy balance, the energy available for sale includes the category
wise sale in distribution franchisee areas and in Sales, the total energy includes the
energy sold to Distribution Franchisees at input.
2.26.10As regards the figures of energy procured from NPCIL, MSEDCL submitted that it
procures power from NPCIL Tarapur as well as NPCIL Kakrapara. Hence figures for
NPCIL energy quantum include figures for NPCIL Tarapur and NPCIL Kakarapara.
Commissions ruling
Page 39 of 148
2.26.11The Commission has noted the objections in this regard and also MSEDCLs response
to these objections. The Commission has dealt with this issue in detail in section on
Energy Balance for FY 2012-13.
2.27 Consideration of Regulatory Assets for FY 2012-13 as Revenue
2.27.1 Tata Motors submitted that Regulatory Asset is mainly due to difference in Revenue
and Expenditure. If this difference is positive then it needs to be passed on to the
consumers as Revenue in ARR. Tata Motors further requested the Commission to
consider Rs. 1256 crore as revenue while working out Revenue Gap for FY 2012-13
MSEDCLs reply
2.27.2 MSEDCL replied that Rs. 1256 crore is the corresponding credit effect of recognition
of regulatory assets in the books of accounts. Further, as per the Guidance Note on
Accounting for Rate Regulated Activities issued by the Institute of Chartered
Accountants of India, a rate regulated entity is allowed to recognise in its financial
statements the right to recover cost incurred or the obligation to refund amount
received for which cost have been incurred through future tariff. Also, the Matching
Concept of Accounting requires the recognition of the income in the same financial
year in which expenditure for generating the income have been incurred.
2.27.3 MSEDCL is of the view that Recognition of Regulatory Assets / Liabilities will
reflect in true and fair view of Assets and Liabilities and will recognise Income /
expenses in the appropriate accounting period in the financial statements of the
Company. Accordingly MSEDCL, being a rate regulated entity, has decided to adopt
the accounting policy to recognise the Regulatory Assets / Liabilities in the financial
statements with effect from the financial year 2012-13. During FY 2012-13,
MSEDCL has recognised Regulatory Asset of Rs. 1,256 crore with corresponding
credit effect shown as Regulatory Income in the financial statements based on the
measurement criteria prescribed in the said Guidance Note after considering the actual
revenue expenditure incurred and revenue income accounted in the books of accounts.
MSEDCL further submitted that the corresponding debit effect for Regulatory income
has been given to Regulatory Assets in audited balance sheet.
2.27.4 At the time of Truing up of FY 2012-13, the Commission will determine the Trued up
gap for FY 2012-13 based on actual expenditure & income without considering the
income arising out of regulatory assets. MSEDCL also submitted that the consumers
will be billed accordingly. The Regulatory Income shall be realized as and when the
consumers pay the bills. In the Truing of FY 2012-13, the actual expenditure and
income will be considered and Regulatory income shall not be considered.
Accordingly, MSEDCL has not considered the Regulatory Income as a part of
Revenue from sale of power.
Commissions ruling
Page 40 of 148
for Revenue of FY 2012-13 respectively.
2.28 Cross Subsidy Surcharge
2.28.1 Deepak Nitrite Limited, Marathwada Industries Association, Bharat Forge, Federation
of Industries Association and Jindal Poly Film Ltd submitted that the prevalent CSS
fixed by the Commission for EHV Consumers as per its Orders dated 9 September,
2011, 21 February, 2013 and 29 October 2013 are higher as compared to the other HT
Consumers at 33/22/11 kV even though all consumers were billed under the same
consumer category of HT-I Industrial. Bharat Forge expressed its objection to the
MSEDCLs proposal of further increase in the CSS applicable to the EHV
Consumers.
2.28.2 Bharat Forge also highlighted that formula for calculation of CSS adopted by the
Commission considers different Tariffs for consumers based on cost of supply for
different voltage levels. But in case of MSEDCL, EHV and HT consumers are billed
under the same category though the system losses are substantially lower in case of
EHV. Therefore, Bharat Forge suggested separate Tariff category for EHV consumers
based on various costs of supply at the corresponding voltage level.
2.28.3 Vidarbha Industries Association (VIA) submitted that abnormal CSS hike as proposed
in the Petition shall make open access unviable and shall make cost of availing open
access prohibitive.
MSEDCLs Reply
2.28.4 MSEDCL submitted that the CSS is recovered from the open access consumers to
compensate for the component of cross subsidy built into the distribution Tariff as
mandated by the Electricity Act, 2003 and the National Electricity Policy.
2.28.5 MSEDCL also submitted that the ABR of the consumers would increase owing to the
AEC as claimed. This would result in increase in the CSS. Therefore, MSEDCL
highlighted the need to re-determine the CSS. The increased CSS claimed in the
Petition by MSEDCL is based on the Commissions Orders in Case No. 107 of 2012,
Case No. 138 of 2012 and Case No. 107 of 2013.
Commissions Ruling
2.28.6 The Commission has noted the objections as well as the response of MSEDCL in this
respect. However, the Commission is of the opinion that cross subsidy surcharge shall
be determined after the Commission has determined the Tariff for consumers of
MSEDCL. The Commission has already determined the cross subsidy surcharge for
MSEDCL through its Order in Case No. 185 of 2013 dated 27 March, 2014.
MSEDCL may file its application for re-determination of cross subsidy surcharge
along with its MYT Petition.
Page 41 of 148
2.29 Cross Subsidy Surcharge and GoM Decision:

2.29.1 Deepak Nitrite Limited inquired about the impact of the subsidy provided by the
Government of Maharashtra on CSS applicable on open access consumers
MSEDCLs Reply
2.29.2 MSEDCL submitted that GoM has subsidized certain category of consumers,
therefore reducing the Tariff payable by the consumers in contention. The
Commission determined Tariff would stay the same and therefore, the CSS applicable
for open access consumers due to the above mentioned category of consumers would
not change.
Commissions Ruling
2.29.3 The Commission is of the opinion that change in cross subsidy surcharge will be
considered only after determination of tariff by the Commission.
2.30 Road map for cross subsidy reduction:
2.30.1 Deepak Nitrite Limited requested for a road map for reduction of cross subsidy from
MSEDCL.
MSEDCLs Reply
2.30.2 MSEDCL submitted that the formulation of road map is in initial stages and the same
shall be carried out after consultative process of all stake holders including
Government. MSEDCL highlighted that cross subsidy is directly linked to ARR and
depends on various uncontrollable factors which need to be analysed. MSEDCL
submitted that the Commission is yet to finalise the road map for reduction of cross
subsidy and its philosophy and therefore, MSEDCL cannot comment on the same.
Commissions Ruling
2.30.3 The Commission is aware of the fact that there is a need to reduce cross subsidy. The
Govt. of Maharashtra (GoM) had issued specific instructions to the Commission in
this respect under Section 108 of the EA 2003. The Commission has already
submitted a draft report to the GoM, which proposes to lay down a roadmap for
reducing cross subsidies in Maharashtra. At present the report is under consideration
of the GoM. However, the Commission has noted the objections in this regard and
also MSEDCLs response to these objections. The Commission may finalize the
roadmap once it receives the response of GoM in this respect.
2.31 Non-Filing of MYT Petition:
2.31.1 Marathwada Industries Association submitted that MSEDCL has not submitted an
MYT Petition as directed by the Commission.
MSEDCLs Reply
Page 42 of 148
2.31.2 MSEDCL submitted that the Commission directed MSEDCL to submit MYT Petition
within 60 days of the issuance of the Order in Case No. 134 of 2013. This Order was
issued on 26 August, 2013. MSEDCL submitted that it requested the Commission to
extend the time period for submission of the MYT petition. It further requested the
Commission for extension for submission of MYT Petition for Second Control Period
by one year in its letter dated 22 January, 2014.
Commissions Ruling
2.31.3 The Commission has directed MSEDCL in its Interim Order in Case No. 38 of 2014
to submit MYT Petition for the remaining part of the second control period starting
from FY 2013-14 to FY 2015-16 by 31 May, 2014.
2.32 Open Access
2.32.1 The Millowners Association and Jindal Poly Film Ltd submitted that eligibility
criteria mentioned in the MERC (Distribution Open Access) Regulation, 2005 states
that a consumer with contract demand greater than 5 MVA would be allowed open
access only after the publication of the Regulations in Official Gazette. They have
submitted that the existing threshold limit is set at a higher level therefore restricting
the open access only to very large consumers of power. They have highlighted that
the wheeling charges, overhead charges and applicable conditions should also be
consumer-friendly.
MSEDCL Reply
2.32.2 MSEDCL submitted that it has been providing the Open Access to all the eligible
consumers as per the provisions of the MERC (Open Access) Regulations, 2005.
Commissions Ruling
Commission views that the issues raised are not relevant to the current True up
Petition and hence the issues may be raised during the appropriate proceedings.
2.33 TOD Rebate
2.33.1 The Millowners Association and Garware Polyester Ltd. submitted that the
applicability of ToD rebate as per the Order issued by the Commission on 7 October,
2013 was restricted until the issuance of the new Tariff Order. The Millowners
Association, Mumbai requested the Commission to extend the same for a further
period of two years.
MSEDCL Reply
2.33.2 MSEDCL welcomed the suggestion of the association further stating that no change
was proposed in that regard in the Petition.
Commissions Ruling
Page 43 of 148
2.33.3 The ToD rebate is applicable until the issue of next Tariff Order. Accordingly, during
the proceedings of next Tariff Petition the Commission will provide appropriate
decision on this issue.
2.34 Voltage Surcharge
2.34.1 The Millowners Association highlighted that the Commission approved levy of
voltage surcharge of 2% on additional units being billed for supply to the consumers
at voltage lower than that specified in SoP Regulations as per its Order dated 12
September, 2010 in Case No. 111 of 2009. In another Order in Case No. 31 of 2011,
the Commission clarified that the levy would not be applicable for consumers
connected on express feeders and amounts collected in that respect be refunded. The
Millowners Association, Mumbai requested the Commission to authorize the
grievance committees / superintending engineers at the circle offices to refund the
voltage surcharge as described in the earlier section instead of individual consumers
being required to appear before the Commission for the same. Garware Polyester Ltd
also submitted that the measurement of the energy may be done at output of
MSEDCL located near the express feeder so as to avoid the levy of 2% surcharge.
MSEDCL Reply
2.34.2 MSEDCL submitted that the matter of refund of voltage surcharge for express
consumers is not directly linked to the Petition and the issue can be raised at during its
MYT proceedings.
Commissions Ruling
2.35 Load Factor and Power Factor Incentive
2.35.1 Garware Polyester Ltd. suggested that provision of Load Factor and Power Factor
incentives should be extended and the incentives should be increased.
MSEDCLs Reply:
2.35.2 MSEDCL submitted that MSEDCL has not proposed any change in the prevailing
incentives/ discounts in its petition.
Commissions Ruling
2.36 Agricultural Consumption
2.36.1 Avinash Vinayak Prabhune and Urja Prabhodan Kendra submitted that the sale under
Page 44 of 148
Agriculture category seem doubtful and enquired whether the figures were based on
metered or estimated values. Avinash Vinayak Prabhune also highlighted that
MSEDCL should be directed to carryout independent energy audit for Agriculture
consumption.
MSEDCLs Reply
2.36.2 MSEDCL submitted that energy consumption of agricultural consumers is based on
the metered as well as unmetered sale. The unmetered sale is computed as per the
methodology approved by the Commission. MSEDCL also submitted that a rise in
normal status metered consumers is observed due to improvement in metering and
meter reading system of agriculture category in each year over the previous year,
thereby improving the estimated unmetered Ag sale.
2.36.3 As regards effective metering, MSEDCL submitted that the agricultural consumers
are geographically scattered in the State and the meter reading of such consumers is a
challenging task, wherein MSEDCL shall make a gradual improvement. With the
implication of different corrective approaches, viz. proper metering, proper meter
reading, photo meter reading, etc.
Commissions Ruling
2.36.4 The Commission in Interim Relief Order in Case No. 38 of 2014 dated 3 March 2014
directed MSEDCL to submit a roadmap for completion of metering of unmetered
agricultural consumers within sixty (60) days from the date of the Order. The
Commission has specified that the roadmap shall contain budget, and time bound
implementation plan with milestones for completion of metering. Accordingly,
MSEDCL has submitted a plan for the Commissions consideration. This has been
dealt with in detail in the para 4.2.8.
2.37 Load Shedding
2.37.1 VCCI submitted that 23% of total feeders were under load shedding for a period of
5.5 7.5 hours on a day to day basis owing to heavy distribution losses and low
revenue recovery from the corresponding consumers. VCCI highlighted that
MSEDCL has claimed reduction of losses to 12% and revenue recovered to the extent
of 98%. Under such circumstances, VCCI requested MSEDCL to end the load
shedding.
MSEDCL Reply
2.37.2 MSEDCL submitted that load shedding is carried out on feeders with heavy
distribution losses and low revenue recovery. MSEDCL highlighted that such an
arrangement encourages lower losses and higher revenue recovery. Due to such an
arrangement, MSEDCL is successful in making 84% feeders load shedding free. As
per the policy of the Government, MSEDCL submitted that 3 phase electricity supply
to the Agricultural consumers is being ensured in a cyclical manner.
Page 45 of 148
Commissions Ruling
2.37.3 The Commission had issued suo motu Order on 26 November, 2012 in Case No. 41 of
2012 in the matters related to load shedding protocol being implemented by
MSEDCL. In this Order, various issues related to load shedding have been already
dealt with.
Page 46 of 148
3
3.1
TRUE UP FOR FY 2011-12

Background
3.1.1 MSEDCL, in its Petition in Case No. 38 of 2014, sought approval for Final Truing up
of expenditure and revenue for FY 2011-12 based on the actual expenditure and
revenue for FY 2011-12 as per the Audited Accounts. In this Section, the Commission
has analysed all the elements of actual revenue and expenses for FY 2011-12, and has
undertaken the Truing up of expenses and revenue after due prudence check. Further,
for FY 2011-12, the Commission has approved the sharing of gains and losses
between MSEDCL and the consumers on account of controllable factors, in
accordance with Regulation 19 of the MERC (Terms and Conditions of Tariff)
Regulations, 2005.
3.2
Sales for FY 2011-12
3.2.1 MSEDCL submitted that during FY 2011-12 total sales in its licensed area of supply
was 80,132 MU including energy sold to consumers in Bhiwandi, Aurangabad,
Nagpur and Jalgaon franchisee area and for ZLS. It also submitted month-wise
category-wise break-up of sales for its entire licensed area. However, it submitted that
if sales to Bhiwandi, Aurangabad, Nagpur and Jalgaon franchisees are considered at
input level then the total sales would be 81,568 MU.
Table 13: Sales and Revenue for FY 2011-12 as submitted by MSEDCL
Category
Residential
Commercial (HT + LT)
HT-Industrial
LT-Industrial (Including
Powerloom)
PWW
Street Light
Agriculture
Railways
Group Hsg Soc
Others
Sales to DF at Input
Standby Charges
Total Sales for FY 2011-12
Approved in
Case No. 19 of 2012
Revenue
MU
(Rs. crore)
Actual
Revenue
(Rs. crore)
MU
13,103
5,089
25,545
5,003
5,696
4,364
15,643
3,216
13,099
5,067
25,074
4,957
5,800
4,594
16,122
3,093
1,658
831
22,036
1,344
272
66
6,371
681
351
4,431
952
136
88
2,181
396
38,135
1,706
934
21,643
1,325
271
62
6,936
495
81,568
695
385
4,641
1,009
127
249
2,430
397
39,542
81,318
Page 47 of 148
3.2.2 The Commission verified that MSEDCLs statutory auditors have also reported total
sales at 80,132 MU in the notes to MSEDCLs audited accounts.
3.2.3 In reply to a query raised by the Commission regarding credit sales MSEDCL
submitted that credit sales is equivalent to net units given to HT consumers as credit
in their bill against energy pumped by them in grid (mainly NCE sources like wind
energy generators). This is applicable to only those consumers, availing benefit of
third party sale where they get net bill (Actual energy consumed Credit energy on
account of third party sale). For the purpose of energy accounting MSEDCL considers
actual consumption recorded on meters and shows such credit sales separately.
3.2.4 As regards sales to PD consumers MSEDCL submitted that the units shown under the
head Sales to PD Consumers represents the Credit/debit effect given to all
Permanently Disconnected (PD) Consumers during a financial year.
3.2.5 In reply to a query raised by the Commission regarding details of Agriculture
category consumers MSEDCL submitted quarter wise details of number of
consumers, connected load in HP and sales in MU since FY 2009-10 to FY 2013-14
for LT- Ag Metered, LT- Ag Unmetered and HT Ag consumers. The following
table summarise the quarter-wise number of consumers, connected load and sales
pertaining to Agriculture category consumers in the State of Maharashtra.
Page 48 of 148
Table 14: Agriculture Category Consumer details as submitted by MSEDCL

Financial
Year
Quarter
FY 09-10 Q1
FY200910
FY201011
FY201112
FY201213
FY201314
(Apr-13 to
Dec13)
LT-METERED AG
No. of
Conn
Sales
consumers Load (HP)
(MU)
1264324
5343075
1,259
LT-UNMETERED AG
No. of
Conn
Sales
consumers
Load (HP)
(MU)
1438573
6074090
1,747
No. of
consumers
973
HT-AG
Conn Load
(HP)
328626
Sales
(MU)
144
No. of
consumers
2703870
Total
Conn
Load (HP)
11745791
Sales
(MU)
3,150
FY 09-10 Q2
1302147
5507049
1,332
1428914
6033561
1,770
982
354380
52
2732043
11894990
3,153
FY 09-10 Q3
1344806
5691608
1,483
1416867
5982021
1,990
980
354264
69
2762653
12027893
3,541
FY 09-10 Q4
1393567
5885311
1,673
1407668
5940885
2,147
974
353862
125
2802209
12180058
3,945
FY 10-11 Q1
1449226
6125495
1,701
1402859
5924732
2,056
970
354614
141
2853055
12404841
3,897
FY 10-11 Q2
1493072
6419390
1,331
1398020
6126018
1,626
970
354765
39
2892062
12900173
2,997
FY 10-11 Q3
1566393
6818123
1,750
1452688
6441111
1,993
974
355577
68
3020055
13614811
3,811
FY 10-11 Q4
1621818
7650990
2,507
1535159
7252058
2,802
1004
362467
130
3157981
15265515
5,439
FY 11-12 Q1
1673869
8096215
2,316
1551880
7364728
2,669
1005
363862
164
3226754
15824805
5,149
FY 11-12 Q2
1685874
8245391
2,024
1523857
7276327
2,330
1009
365082
85
3210740
15886800
4,439
FY 11-12 Q3
1765765
8557718
2,772
1603206
7797000
3,159
1012
377966
169
3369983
16732683
6,100
FY 11-12 Q4
1818894
9250877
2,790
1616157
8705848
2,873
1018
385382
226
3436069
18342107
5,889
FY 12-13 Q1
1850811
9373740
2,513
1620434
8682439
2,537
1023
390992
203
3472268
18447171
5,253
FY 12-13 Q2
1890469
9589015
2,107
1623940
8686999
2,153
1031
402366
183
3515440
18678379
4,443
FY 12-13 Q3
1917225
9670210
2,743
1626026
8675596
2,615
1032
397190
148
3544283
18742996
5,507
FY 12-13 Q4
1937097
9746049
2,816
1624228
8648480
2,585
1031
409953
233
3562356
18804482
5,635
FY 13-14 Q1
1949275
9805044
2,374
1620647
8582335
2,165
1044
417234
248
3570966
18804614
4,787
FY 13-14 Q2
1963947
9838786
1,975
1612249
8560698
1,934
1046
416130
144
3577242
18815614
4,053
FY 13-14 Q3
2006801
10022753
2,951
1603138
8457832
2,749
1053
422758
132
3610992
18903342
Total
7,300
6,848
Page 49 of 148
523
5,832
14,671
3.2.6 The summary of actual sales reported by MSEDCL and sales approved by the
Commission for FY 2011-12 is given in the table below:
Table 15: Sales for FY 2011-12 (MU)
Order in Case
No. 19 of 2012
Particulars
Total MSEDCL sales
(including sales in DF area)
3.3
74,947
Actual
81,568
Approved after
final Truing up
81,568
Energy balance and distribution loss
3.3.1 MSEDCL submitted that its actual distribution loss for FY 2011-12 had been 16.03%
against 16.27% approved in Order in Case No. 19 of 2012.
3.3.2 MSEDCL submitted that during FY 2011-12, Zero Load Shedding (ZLS) Scheme was
implemented only during the first quarter i.e. up to June 2011. Major portion of the
power procured for implementation of ZLS as well as power procured from traders in
FY 2011-12 was coming from sources within State only. MSEDCL further submitted
the source wise power purchased for ZLS as follows:
Table 16: Source wise ZLS Power Purchase as submitted by MSEDCL
Sr. No.
Source
Quantum (MU)
1
2
3
4
TPTCL
NVVN
CPP
NETSL
49
206
124
97
Total
476
Amount
(Rs. crore)
21
95
59
43
Source Location
Within State
Outside State
Within State
Within State
218
3.3.3 MSEDCL submitted that around 57% of ZLS Power is procured from sources within
State and balance 43% from sources outside State. Accordingly, MSEDCL has
allocated the same % for calculation of energy balance.
3.3.4 Further, MSEDCL submitted the details of the power purchase from traders. The
same are as shown below:
Table 17: Details of power purchase from traders for FY 2011-12 as submitted by MSEDCL
Sr. No. Source

1
2
3
4
TPTCL
NVVN
PTC
Indrajeet Power
Quantum (MU)
48
124
157
43
Amount
crore)
17
50
50
17
(Rs. Source
Location
Within State
Outside State
Outside State
Within State
Page 50 of 148
Sr. No. Source

5
6
7
8
9
10
11
12
IEX
GEPL
PXIL
RIL
RETL
JSW PTCL
NETSL
Korba
Total
Quantum (MU)
483
38
4
83
64
1385
10
373
2812
Amount (Rs. Source

crore)
Location
168
Outside State
13
Outside State
2
Outside State
30
Outside State
22
Within State
495
Within State
4
Within State
97
Outside State
965
3.3.5 MSEDCL submitted that around 55% of power is procured from traders within the
State and balance 45% power is procured from traders outside the State. Accordingly,
MSEDCL has allocated the same % for calculation of energy balance.
3.3.6 MSEDCL further submitted that the bifurcation of power received from traders
outside and within the State is given up to quarter ending September 2011, thereafter
from quarter ending December 2011; MSEDCL has made changes in the tender
documents whereby the delivery point is MSETCL periphery. Thus, the bills are
raised and paid for quantum received at MSETCL bus and as such now bifurcation is
not required.
3.3.7 MSEDCL submitted that Final Energy Balancing and Settlement Mechanism (FBSM)
under Intra State ABT has been implemented in the State w. e. f. 1 August, 2011 for
UI and IBSM. With the implementation of ABT, the regional UI which earlier was
allocated to MSEDCL is now allocated to State Pool Participants. Based on this and
under/ over drawl and injection in the State, the net pool imbalance charges are
calculated by Maharashtra State Power Committee (MSPC) considering the net
energy at MSETCL periphery. Hence MSEDCL has considered the entire UI energy
as within the State.
3.3.8 MSEDCL submitted that it has considered NPCIL Tarapur as source within
Maharashtra. Also, there is some portion of energy which is injected and drawn at
33kV which is included in the energy at distribution periphery on which no interstate
transmission losses are applicable.
3.3.9 For energy at distribution periphery injected from 33 kV and above, MSEDCL
submitted that it gets actual energy reading only at three points; (a) at the generation
bus bar; (b) at the T<>D interface (distribution periphery); and (c) at the retail sales
made to consumers. All others figures/ values are derived numbers. Further,
MSEDCL considers metered energy at distribution periphery and metered sales at
consumer end to calculate the distribution loss of MSEDCL. The losses submitted by
MSETCL are taken as Intra-State Loss and balance considered as inter-state loss.
Thus interstate loss is a derived figure.
Page 51 of 148
3.3.10 MSEDCL submitted that there is some portion of energy which is received by
MSEDCL, on 33/22/11 kV feeders from MSPGCL & other generators directly
connected to MSEDCL. This energy however gets included in the energy at
distribution periphery on which no intrastate transmission losses would be applicable.
Hence, MSEDCL has shown it separately, under the head Energy at distribution
periphery injected and drawn at 33 kV. Further, the term Other Power on MSEDCL
network relates to the power which has been wheeled over the State transmission
network and accounted for by SLDC as input to the State.
3.3.11 In reply to a query raised by the Commission MSEDCL submitted that due to certain
practical difficulties in laying distribution network, an arrangement is made between
Goa Electricity Department and MSEDCL. According to this arrangement MSEDCL
supplies power to some of the villages in Goa in the border area and MSEDCL also
receives power to some of the villages in Maharashtra in the border area. As such the
units supplied to Goa and units received from Goa are netted off. Such net off gets
reflected in Inter-State sales.
3.3.12 In Order in Case No. 19 of 2012 the Commission had not approved energy balance for
FY 2011-12. The Commission had directed MSEDCL to submit actual energy balance
by properly taking into account the injection and drawl of power wheeled for open
access. In the current Petition MSEDCL has complied with these directions.
3.3.13 The Commission observes that MSEDCL has considered intra-state transmission loss
in FY 2011-12 at 4.29%. However, the SLDCs report on State grid losses for FY
2011-12 shows the same at 4.25%. The Commission has considered the loss level for
intra-state transmission as per SLDCs report. Accordingly, the inter-state loss has
been worked out to 2.32% based on the energy balance for FY 2011-12.
3.3.14 The energy balance reported by MSEDCL and approved by the Commission for FY
2011-12 is presented in the table below.
Table 18: Energy Balance Statement for FY 2011-12 as submitted by MSEDCL and as approved by the
Commission
Sr.
No.
1
A
B
C
D
E
F
Units
FY 2011-12
Particulars
Actual
Purchase within Maharashtra
Purchase from MSPGCL
NPCIL Tarapur
Purchases from other sources & Medium
Term
ZLS
Traders
IBSM + FBSM
Approved
after final
Truing up
MU
MU
43,074.91
3,934.96
43,074.91
3,934.96
MU
21,377.57
21,377.57
MU
MU
MU
271.11
3,541.44
54.14
271.11
3,541.44
54.14
Page 52 of 148
Sr.
No.
F
H
d
2
a
b
c
3
d
e
f
B
4
a
b
c
d
e
f
C
3.4
Units
FY 2011-12
Particulars
MU
MU
MU
1,599.12
736.26
74,589.53
Approved
after final
Truing up
1,599.12
736.26
74,589.52
MU
22,569.71
22,569.71
MU
MU
MU
%
2,897.55
204.53
25,671.78
4.00%
2,897.55
204.53
25,671.79
2.31%
MU
24,620.04
25,079.41
MU
100,261.31
100,261.31
MU
99,209.57
99,668.93
4.29%
4.25%
MU
94,953.48
94,953.48
MU
479.52
479.52
MU
%
MU
MU
95,433.00
16.03%
15,297.91
80,132.47
95,433.00
16.03%
15,300.53
80,132.47
Actual
Other Power on MSEDCL Network
UI
Total Purchase within Maharashtra
Purchase outside Maharashtra
Central Generating Station + NPCIL +
UMPP + Case I + Sardar Sarovar + Pench +
Banking
Traders
Zero Load Shedding
Total Purchase outside Maharashtra
Inter-State Transmission Loss
Total Purchase at Maharashtra
Periphery
Total Power Purchase Payable
Total Power Available at Transmission
Periphery
Energy Available at Distribution
periphery
Intra-state Loss
Energy at Distribution Periphery injected
from 33 kV and above
Energy at Distribution Periphery injected
and drawn at 33 kv
Energy at Distribution Periphery
Distribution Losses
Distribution Losses
Energy Available for Sale
Power purchase cost
3.4.1 MSEDCL submitted that during FY 2011-12, it has purchased power from MSPGCL,
NTPC, NPCIL, Sardar Sarovar Project, RGPPL, JSW, CGPL Mundra UMPP,
Dodson, captive power projects, Non Conventional Energy sources and other sources.
MSEDCL has submitted that the total power purchase cost for FY 2011-12 was Rs.
32,920 crore, including ZLS Power and Rs. 32,702 crore excluding ZLS Power. The
source-wise break-up of power purchase and power purchase costs as submitted by
MSEDCL is given in the table given below.
Page 53 of 148
Table 19: Source wise break - up of power purchase cost for FY 2011-12
Sr. No.
1
2
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Particulars
MSPGCL
NTPC
KSTPS
KSTPS III
VSTP I
VSTP II
VSTP III
Kawas
Gandhar
FSTPP-EP
KhSTPS-I
KhSTPS-II
TSTPS
Sipat TPS 2
Sipat TPS 1
Total NTPC
NPCIL
KAPP
TAPP 1&2
TAPP 3&4
Total NPCIL
SSP
Pench
U.I. Charges/ FBSM
FBSM
Dodson I
Dodson II
RGPPL
Trading Company
Zero Load Shedding
Medium term
IPP - JSW
Powergrid
Reactive Energy Charges
CGPL Mundra UMPP
IBSM
Wheeling Charges
Total Power Purchase
Non Conv. Energy Excl CPP
CPP
Total PP including NCE
Net units sent out

for MSEDCL
(MU)
43,074.91
Total Cost
(Rs. crore)
Per unit rate

(Rs./kWh)
13,177.63
3.06
4,553.35
885.27
3,469.20
2,741.31
2,487.32
1,002.23
1,036.99
741.61
2,541.39
622.97
20,081.65
644.70
206.75
998.60
648.40
676.58
490.74
495.51
2.69
7.27
295.04
2.52
649.15
153.72
5,271.66
1.42
2.34
2.88
2.37
2.72
4.90
4.78
3.98
2.55
2.47
2.63
1,192.21
1,257.37
2,677.59
5,127.17
1,148.13
140.76
736.26
60.03
65.28
11,223.58
6,438.99
475.64
2,614.22
1,880.24
6.96
54.14
93,127.96
4,424.81
1,109.42
98,662.19
303.38
122.28
771.04
1,196.70
235.37
28.86
275.78
12.83
16.40
4,963.79
2,626.01
217.83
1,087.05
600.53
750.77
(11.51)
0.50
55.81
1.81
30,507.84
1,938.29
473.97
32,920.09
2.54
0.97
2.88
2.33
2.05
2.05
3.75
2.14
2.51
4.42
4.08
4.58
4.16
3.19
0.72
10.31
3.28
4.38
4.27
3.34
3.4.2 In respect of payments to MSPGCL, MSEDCL submitted that Rs. 197 crore were
paid for Ghatghar O&M costs further, additional reconciliation bill of Paras Parli
amounting to Rs. 132 crore was also paid during FY 2011-12. Also, Rs. 216 crore
were paid as Truing up for the period FY 2004-05 to FY 2008-09. Other adjustments
to the tune of Rs. 130 crore were made during FY 2011-12. Due to shut down of
Chandrapur Plant, there was lower generation from MSPGCL by 900 MU during FY
2011-12.
3.4.3 MSEDCL submitted that Honble CERC has approved Tariff for various stations
Page 54 of 148
based on CERC Tariff Regulations 2009 this has resulted in upward trend in power
purchase from NTPC stations for FY 2011-12. Also, due to higher availability of
power from Korba U3 and Sipat I, there was increase in power purchase quantum and
cost from NTPC. Further, MSEDCL submitted that though MSEDCL has not
purchased energy from some eastern region sources of NTPC in the FY 2011-12 and
FY 2012-13, it has made payments towards revised bills raised by these sources
pertaining to earlier period in FY 2011-12 and FY 2012-13.
3.4.4 MSEDCL submitted that the variation in costs pertaining to power purchase from
RGPPL can be attributed to two reasons. Firstly, the Honble CERC has approved
tariff on 20 March 2012 in respect of Ratnagiri Gas and Power Private Ltd (RGPPL),
for the period from 1 September, 2007 to 31 March 2009, this has led to additional
impact of Rs 539.82 crore. Secondly, payment of Advance Income tax of Rs 155.30
crore for FY 2007 to FY 2009, has contributed to the variation in power purchase
costs pertaining to RGPPL. The Commission verified the bills raised and payment
challan pertaining to payment of Advance Income tax of Rs. 155.30 crore as
submitted by MSEDCL and found them to be correct.
3.4.5 MSEDCL submitted that in the Tariff Petition (Case No. 19 of 2012), MSEDCL had
estimated a quantum of 8098 MU from Traders at a rate of Rs. 3.70 per unit.
However, during FY 2011-12 due to higher availability from Korba U3 and Sipat I,
there was lower requirement of power from Traders than that approved by the
Commission.
3.4.6 MSEDCL submitted that for medium term power purchase the Commission had
approved the tariff of Rs. 4.10 per unit for FY 2011-12 the same has been compiled
by MSEDCL. However, in addition to this, MSEDCL has paid transmission charges
pertaining to the power purchase to MSETCL and has also paid the capacity charges
for deemed generation i.e. units not scheduled by MSEDCL.
3.4.7 In reply to a query raised by the Commission MSEDCL submitted that Ghatghar
Pumped Storage Hydro Power Station (250 MW) is operated and maintained by
MSPGCL and is owned by Government of Maharashtra Water Works Department
(GoMWRD). The power house complex of the scheme comprises of two caverns to
accommodate turbine generator units of 125 MW each. On 1 January, 2005,
GoMWRD (Secretary, CAD) and MSPGCL (erstwhile MSEB) had signed a MoU
wherein MSPGCL agreed to take over Ghatghar PSS for O&M on a lease basis for 35
years after the successful commissioning of the project. MSPGCL pays the approved
yearly lease rent to GoMWRD, quarterly on a pro-rata basis as per the Order dated 27
December 2012. As regard payment of Rs. 197 crore for Ghatghar O&M costs
MSEDCL submitted that the Lease Rent of Ghatghar was considered Rs 196.77 crore
on provisional basis for FY 2011-12. However, since the Commission has now
included the Lease rent in MSPGCLs fixed cost for hydro stations, the same is
withdrawn in FY 2013-14.
Page 55 of 148
3.4.8 Further, MSEDCL submitted that Pench Hydro Electric Project (2 x 80 MW)
(wherein Maharashtras share is 53 MW) is an interstate project between Madhya
Pradesh and Maharashtra. Cost and benefits of the Power Part of the project are
shared in the ratio of 2:1 between Madhya Pradesh and Maharashtra. O & M of the
power station is looked after by Madhya Pradesh Electricity Board and maintenance
of civil works of the project is looked after by Maharashtra Government. Narmada
Hydro Electric Project (Sardar Sarovar Project: 6 X 200 MW + 5 X 50 MW) is a
multipurpose inter-state project amongst Madhya Pradesh, Gujarat and Maharashtra.
The total installed capacity of the project is 1450 MW. Maharashtras share of power
from this project is 27% i.e. 391.5 MW. SSP and Pench both are GoM Undertaking
Hydro projects for which Rs. 3 per unit rate was fixed but as decided in Minutes of
Board Meeting (dated 12th January 2007); MSEDCL has been paying Rs 2.05 per
unit.
3.4.9 In reply to a query raised by the Commission regarding additional reconciliation bill
of Paras Parli amounting to Rs. 132 crore, MSEDCL submitted that the Commission,
vide Order dated 13 April 2011, in the matter of Truing up for FY 2007-08 and FY
2008-09 for Parli Unit 6 and Truing up of Paras Unit 3, Annual Performance Review
for FY 2009-10 and determination of Tariff for FY 2010-11 for Parli Unit 6 and Paras
Unit 3 had approved annual fixed cost for Parli Unit 6 and Paras Unit 3 for FY 201011 and accordingly the differential amount of Rs 132 crore is paid to MSPGCL. The
Commission verified the reconciliation bills of Paras Unit 3 and Parli Unit 6
amounting to Rs. 132 crore as submitted by MSEDCL.
3.4.10 In reply to a query raised by the Commission regarding payment of Rs. 216 crore
towards Truing up for the period FY 2004-05 to FY 2008-09, MSEDCL submitted
that the Commission had issued a review Order in Case No. 1 of 2011 on 31 May,
2011 pertaining to its Order dated September 12, 2010 in Case No. 102 of 2009
regarding approval of APR for the year FY 2009-10 and for determination of tariff
and approval of ARR for the year FY 2010-11 of MSPGCL, whereby the Commission
approved recovery of Rs 432.5 crore from MSEDCL in a phased manner (monthly
instalment of Rs 72.08 crore). Out of 6 instalments, 3 instalments were paid in FY
2010-11 and balance 3 instalments amounting to Rs. 216 crore were paid in FY 201112. The Commission verified a sample bill amounting to payment of Rs. 72.08 crore
for the month of May 2011 as submitted by MSEDCL.
3.4.11 In reply to a query raised by the Commission regarding other adjustments to the tune
of Rs. 130 crore made during FY 2011-12 MSEDCL submitted following details:
Table 20: Details of other adjustments as submitted by MSEDCL
Sr. No.
1
2
3
Description
Energy bills reconciliation for FY 2011-12
Energy bills reconciliation for Sept 2006 to Mar 2007
Energy bills reconciliation for FY 2010-11
Amount in Rs.
Crore
(8.84)
0.37
5.62
Page 56 of 148
Sr. No.
4
Amount in Rs.
Crore
178.37
Description
MERC Order in Case No 107 of 2011 dt 30.12.11
Khaparkheda Unit 5 fuel expenses before synchronization
disallowed
Bhusawal fuel expenses before synchronization disallowed
Total
5
6
(28.05)
(18.11)
129.37
3.4.12 The Commission verified proofs of payment as submitted by MSEDCL for the above
mentioned details of other adjustments and found them to be correct.
3.4.13 The Commission observes that the short term power (excluding ZLS) is 6.53% of the
total power purchased (excluding ZLS). The average rate of short term power
purchase was Rs. 4.08 per kWh. As per the Report on Short-term Power market in
India: 2011-12 published by the Honble CERC in FY 2011-12, the average rate of
bilaterally traded power was Rs. 4.18 per kWh and the average rate of power traded at
the power exchange was Rs. 3.57 per kWh. The Commission observes that the
average rate of short term power purchase is lower than the average rate of bilaterally
traded power for FY 2011-12, but higher than the average rate of power traded at
power exchange for FY 2011-12.
Renewable Purchase Obligation for FY 2011-12
3.4.14 As per the MERC (Renewable Purchase Obligation, its Compliance and
implementation of REC framework) Regulations, 2010 (RPO Regulations) notified on
June 7, 2010, each distribution licensee is required to meet 7% of its requirement
through renewable sources for FY 2011-12, including 0.25% through solar sources.
3.4.15 In reply to a query raised by the Commission regarding details of renewable purchase
obligation along with a detailed source wise break up of energy procured MSEDCL
submitted following information:
Table 21: Details of RPO as submitted by MSEDCL
Year of
RPO
FY 2010-11
FY 2011-12
Cogeneration
Biomass
(MU)
991.523
1328.99
Hydro
(MU)
Wind
(MU)
Total RE
(MU)
% RPO
Target
1306.19
1526.29
2401.8
3610.2
4928.1
6779.1
5.75%
6.75%
Gross
consumption
in MU
85357
94967
% RPO
achieved
5.77%
7.14%
3.4.16 MSEDCL submitted the following details of procurement through renewable energy
sources for FY 2011-12.
Table 22: Procurement from NCE sources for FY 2011-12 as per MSEDCL
Source
Bagasse
Biomass
Sale to MSEDCL in MU
As per Accounts (Rs. crore)
1396.30
642.85
248.66
122.85
Page 57 of 148
Source
Wind
Hydro
Solar
Total
Sale to MSEDCL in MU
As per Accounts (Rs. crore)
2624.64
1095.17
144.32
54.52
10.89
22.89
4424.80
1938.29
3.4.17 In reply to a query regarding payment made for power procurement from NCE
sources MSEDCL submitted that the audited monthly report regarding procurement of
NCE and payment made to the generator is received from circle offices and are
consolidated at Corporate Office. The payment is made to the generator as per
prevailing tariff decided by MERC from time to time.
3.4.18 In reply to a query raised by the Commission regarding variation in the actual power
procurement from NCE sources vis a vis approved procurement plan MSEDCL
submitted that, actual quantum of NCE procurement is always likely to vary from the
estimated quantum.
3.4.19 MSEDCL further submitted that in July 2010 the Commission determined Wind Zone
wise Tariff (Wind zone 1, 2, 3, 4) based on the wind power density and Capacity
Utilization Factor (CUF). Zone 1 Tariff was the highest with lowest CUF and Zone 4
Tariff was the lowest with highest CUF. The classification of wind zones was
entrusted to MEDA. MEDA took time to device the procedure for classification of
wind power projects into particular wind zone. Hence, initially wind power generators
were paid the lowest Tariff of wind Zone 4, which was subject to reconciliation after
wind zone classification. During FY 2011-12 the Commission during its Suo-moto
proceedings for RE tariff determination directed MSEDCL to make payments as per
Zone 2 tariff pending MEDA classification which was further subjected to
reconciliation. MEDA subsequently devised the procedure and initiated classification
of wind power projects into particular wind zones. Most of the wind power projects
were classified under wind zone 1 with highest Tariff and MSEDCL had to pay the
difference in tariff to the eligible wind generators. This led to increase in cost for wind
power procurement than the estimated cost.
3.4.20 The Commission has dealt with RPO targets of MSEDCL for FY 2011-12 in Order in
Case No. 180 of 2013 dated 12 March, 2014. As per the said Order MSEDCL is
required to fulfil its solar RPO target cumulatively by FY 2015-16 and Mini/ Micro
Hydro target cumulatively by FY 2015-16.
3.4.21 The Commission verified sample bills submitted by MSEDCL for NPCIL stations,
RGPPL and JSW - Ratnagiri for the months of June 2011, September 2011,
December 2011 and March 2012. The Commission also verified sample bills
submitted by MSEDCL for NTPC power stations for the months of April 2011 and
March 2012; for MSPGCL and Mundra UMPP for the month of March 2012. The
Commission has considered the power purchase cost from MSPGCL as per the
audited accounts. The Commission approves the net power purchase expenses
Page 58 of 148
(excluding ZLS power) of Rs.32, 702.09 crore as submitted by MSEDCL.

Table 23: Power purchase expenses for FY 2011-12 (Rs. crore)
Particulars
Power Purchase Expenses
3.5
Order in Case
Actual
No. 19 of 2012
31,116.00
32,702.09
Approved
after
final Truing up
32,702.09
Transmission charges and SLDC charges for FY 2011-12
3.5.1 MSEDCL submitted that it had paid actual intra-state transmission charges including
SLDC charges of Rs. 2,200 crore. Further, it has paid Rs. 750 crore as transmission
charges to PGCIL. The Commission verified this amount in Schedule-23 of the
audited accounts of MSEDCL and has found the amount claimed by MSEDCL to be
accurate. Therefore, the Commission approves the same for Truing up of FY 2011-12.
Particulars
Transmission charges including
SLDC charges
3.6
(Rs. crore)
Order in
Case No. 19
of 2012
Actual
Approved after
final Truing up
2,200
2,200
2,200
O&M expenses for FY 2011-12
3.6.1 Operation and maintenance (O&M) expenses comprise employee expenses, A&G
expenses and R&M expenses. MSEDCL, in its Petition, has submitted that the actual
net O&M expenses for FY 2011-12 were Rs. 3,295 crore, comprising employee
expenses of Rs. 2,299 crore, A&G expenses of Rs. 444 crore and R&M expenses of
Rs. 553 crore. MSEDCLs submission and Commissions ruling on each sub-head of
O&M expenses are given below.
Employee Expenses
3.6.2 MSEDCL submitted that the net employee expenses in FY 2011-12 were Rs. 2,299
crore as against Rs. 2,204 crore approved by the Commission in the Order dated 16
August, 2012 in Case No. 19 of 2012.
3.6.3 MSEDCL submitted that dearness allowance incurred during the year FY 2011-12
was Rs. 631 crore whereas the same was Rs. 429 crore for the FY 2010-11 which is
an increase of almost 50%. Also, the earned leave encashment and gratuity has
increased by 29% and 28% respectively over the previous year.
3.6.4 MSEDCL further submitted that during the FY 2011-12, the actual addition to Capital
Work in Progress (CWIP) is more as compared to estimated addition to CWIP at the
time of submission of the Tariff Petition for FY 2012-13. This has resulted in greater
capitalization of employee expenses as compared to the estimated capitalization
which has resulted in reduction in Net Employee cost.
Page 59 of 148
3.6.5 The Commission found the expenses under some sub-heads under the employee
expenses had increased substantially as compared to that incurred in FY 2010-11. The
analysis of the year on year increase between FY 2010-11 and FY 2011-12 is given in
the table given below. The Commission asked MSEDCL to justify such steep
increases in the sub-heads in which the increase was substantially high.
Table 25: Analysis of employee expenses for FY 2011-12
FY 2011-12 (Rs. crore)
Sr. No.
Particulars
As approved in
Order in Case No.
19 of 2012
As per Petition
Basic Salary
1,201.33
1,211.62
Dearness Allowance (DA)
428.54
630.80
House Rent Allowance
142.17
141.31
Conveyance Allowance
11.83
15.01
Leave Travel Allowance
1.20
1.04
Earned Leave Encashment
156.62
203.27
Other Allowances
84.48
83.32
Medical Reimbursement
21.33
21.86
Overtime Payment
23.30
26.00
10
35.41
41.01
13.94
17.09
0.07
0.43
14
Bonus/Ex-Gratia Payments
Interim Relief / Wage
Revision
Staff welfare expenses
VRS Expenses/
Retrenchment
Compensation
Commission to Directors
15
Training Expenses
16
Payment under Workmen's

Compensation Act
1.45
1.03
17
Net Employee Costs
2,121.67
2,393.79
18
198.39
207.97
20
Terminal Benefits
Provident Fund
Contribution
Provision for PF Fund
21
Pension Payments
0.54
0.65
22
Gratuity Payment
260.69
333.96
23
Others
27.37
7.61
24
Gross Employee Expenses
2,608.66
2,943.98
25
Less: Expenses Capitalised
561.79
645.46
26
Net Employee Expenses
2,046.87
2,298.53
11
12
13
19
3.6.6 In response to the directives issued by the Commission in the Interim Order dated 3
Page 60 of 148
March 2014 (Case No. 38 of 2014) MSEDCL submitted that the employee expenses
are entirely uncontrollable. The employee expenses incurred by the company are
purely on the basis of the guidelines issued by competent authorities/ service
regulations of the company. The major elements of employee expenses are basic pay,
dearness allowance and terminal benefits. The basic pay, annual increments and
increments on promotion are based as per already decided rules & regulations of the
company. Further, the dearness allowance is given as applicable to the State
Government and Central Government employees. The terminal benefits such as
gratuity and leave encashment are based on Gratuity Act/ companys Rules &
Regulations. Moreover, the valuation of Gratuity and leave encashment is done
through third party i.e. Actuary. Hence, the entire expenditure incurred by the
company is a legitimate expenditure and any variation is beyond its control.
3.6.7 As regard increase in Dearness Allowance (DA) MSEDCL submitted that the DA to
the employees of MSEDCL is given at the same rate as that to the employees of the
State Government. Further, the State Government follows the rate of DA given to the
Employees of Central Government. Whenever the Central Government announces
increase in DA, the same is followed by the State Government. However, payment of
the same to MSEDCL employees is generally deferred for three to four months after
increase in DA to the Central Government employees, since the State Government has
to announce the applicability of the same for State Government Employees. MSEDCL
extends benefit of increased DA to its employees in the same month in which the
State Government adopts the increased DA. Further, during FY 2011-12, there is an
increase of in Rs. 202.26 crore in DA, i.e. around 47% as compared to the DA paid in
FY 2010-11. During the FY 2011-12 the rate of DA has been increased by 14% (i.e.
in July 2011 by 7% and further in January 2012 by 7%). Further, the increase in DA
of 6% which was due in the FY 2010-11, was deferred by 3 months and the same has
actually been given in the FY 2011-12. Thus the impact of the overall increase in DA
in FY 2011-12 in actual terms stands at 47%. Further, there will also be impact on
increase in DA due to increase in the amount of basic salary. Considering this, there
was increase in DA by 46.7% in the FY2011-12 over FY 2010-11.
3.6.8 As regard increase in earned leave encashment MSEDCL submitted that there are two
types of earned leave encashment benefits given to the employees:
3.6.9 Earned leave encashment during service period: Wherein an employee can encash
maximum of 30 days leave at a time out of his accumulated leave balance within a
block period of two years. Amount paid for leave encashment is on the basis of salary
drawn (i.e. Basic Salary, Dearness Allowance, Compensatory Leave Allowance) for
the month for which leave is encashed.
3.6.10 Leave Encashment on Retirement: Wherein on retirement, an employee is entitled for
leave encashment for accumulated leave balance not exceeding 300 days on the basis
of last salary drawn.
Page 61 of 148
3.6.11 MSEDCL further provided the bifurcation of leave encashment into two types as
follows:
Table 26: Bifurcation of amount of leave encashment for FY 2011-12 as provided by MSEDCL (Rs.
crore)
Sr.
No.
1
2
Particulars
Earned leave encashment during
service period
Leave encashment on retirement
Payment to retired employees
during the year
Provision for employees to be
retired in future
Total
FY
2010-11
FY
2011-12
Increase/
(decrease) over
previous period
49.96
19.47
(30.49)
99.02
110.18
11.16
7.64
73.59
65.95
156.62
203.24
46.62
3.6.12 MSEDCL submitted that in case of earned leave encashment during service period,
every year 30 earned leaves are added and the employees encash the leaves for which
the cumulative earned leaves are expected to exceed 300 days. An employee can
encash leave once in a block period of two years. Generally in the beginning of the
block year there is higher encashment. In case of leave encashment on retirement to
the employees during the year, the payment depends on the number of employees
retired during the year. In the FY 2011-12 the number of employees retired was 3711.
In case of leave encashment provision for employees to be retired in future, the
provision is made on the basis of actuarial valuation from experts as per AS-15. The
actuary considers various parameters & assumptions such as discount rate, salary
escalation rate etc. and decide the amount of liability towards leave encashment of the
employees to be retired in future as on year end accordingly issues certificate. Thus
the same is based on actuarial valuation.
3.6.13 MSEDCL submitted breakup of comparison of gratuity payments made to employees
in FY 2010-11 and FY 2011-12 as follows:
Table 27: Details of amount of gratuity payment made to employees in FY 2011-12 as provided by
MSEDCL (Rs. crore)
Sr.
No.
1
2
Particulars
Payment of Gratuity to Retired
Employees during the year
Provision of Gratuity for
Employees to be retired in
future
Total
FY
2010-11
FY
2011-12
Increase over
previous period
173.70
227.45
53.75
86.99
106.51
19.52
260.69
333.96
73.27
Page 62 of 148
3.6.14 MSEDCL submitted that payment of gratuity to retired employees during the year
depends on the number of employees retired during the year. In FY 2011-12 number
of employees retired was 3711. As regard provision of gratuity for employees to be
retired in future the provision is made on the basis of actuarial valuation from expert
as per AS -15. The actuary considers various parameters & assumptions such as
discount rate, salary escalation rate etc. and decide the amount of liability towards
gratuity of the employees to be retired in future as on year end accordingly issues
certificate. Thus the same is based on actuarial valuation.
3.6.15 MSEDCL submitted that it has capitalised employee expenses to the extent of Rs.
645.46 crore in FY 2011-12. The Commission approves the capitalised employee
expenses of Rs. 645.46 crore as submitted by MSEDCL, which is as per audited
accounts.
3.6.16 The Commission verified all heads of the employee expenses as claimed by MSEDCL
in the Schedule-24 of the audited accounts of MSEDCL and has found the amounts
claimed by MSEDCL to be accurate. Also, the explanation submitted by MSEDCL
for increase in employee expenses compared to the approval is found to be
satisfactory. Therefore, the Commission approves the net employee expenses of Rs.
2298.53 crore for FY 2011-12, as submitted by MSEDCL.
3.6.17 The Commission while approving the Employee expenses in Order in Case No. 19 of
2012 considered the increase in point to point inflation between March 2011 and
March 2012 in the Consumer Price Index (CPI) for Industrial Workers. The
Commission had escalated the Trued-up employee expenses for FY 2010-11 by the
point to point inflation to arrive at the approved gross employee expenses for FY
2011-12. The Commission, after considering the above submissions by MSEDCL,
approves the gross actual Employee expenses for FY 2011-12 as submitted.
Table 28: Employee expenses for FY 2011-12 (Rs. crore)
Sr.
No.
1
2
3
Particulars
Gross Employee expenses
Less Employee expenses
capitalised
Net Employee expenses
As per Order in
Case No. 19 of
Actual
2012
2,608.66 2,943.98
561.79
Approved
after final
Truing up
2,943.98
645.46
645.46
2,046.87 2,298.53
2,298.53
A&G Expenses
3.6.18 MSEDCL submitted that the net A&G expenses in FY 2011-12 were Rs. 444 crore as
against Rs. 290 crore approved by the Commission in the Order dated 16 August,
2012 in Case No. 19 of 2012.
3.6.19 The Commission found that the expenses under some sub-heads under the A&G
expenses had increased substantially as compared to that incurred in FY 2010-11. The
Page 63 of 148
analysis of the year-on-year increase in various sub-heads of A&G Expenses between

FY 2010-11 and FY 2011-12 is given in the table given below. The Commission
asked MSEDCL to justify such steep increases in the sub-heads in which the increase
was substantially high.
Table 29: Analysis of A&G expenses for FY 2011-12
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
Particulars
Rent Rates & Taxes
Insurance
Telephone & Postage, etc.
Legal charges & Audit fee
Professional, Consultancy, Technical
fee
Conveyance & Travel
Electricity charges
Water charges
Security arrangements
Fees & subscription
Books & periodicals
Computer Stationery
Printing & Stationery
Advertisements
Purchase Related Advertisement
Expenses
Contribution/Donations
License Fee and other related fee
Vehicle Running Expenses Truck /
Delivery Van
Vehicle Hiring Expenses Truck /
Delivery Van
Cost of services procured
Outsourcing of metering and billing
system
Freight On Capital Equipments
V-sat, Internet and related charges
Training
Bank Charges
Miscellaneous Expenses
Office Expenses
Others
Gross A&G Expenses
Less: Expenses Capitalised
Net A&G Expenses
FY 2010-11
(Rs. crore)*
FY 2011-12
(Rs. crore)
45.69
0.33
17.86
11.97
40.97
0.42
21.75
13.75
10.14
14.33
17.73
15.73
4.02
38.09
19.36
0.11
52.65
15.63
9.30
17.39
106.27
3.89
44.31
37.19
0.20
58.29
12.46
6.09
0.34
0.44
8.85
9.31
23.00
27.11
65.83
66.01
1.38
47.75
0.66
9.95
23.38
439.75
207.78
231.97
0.43
49.17
1.15
10.86
25.18
566.97
122.94
444.03
Page 64 of 148
*Expenses as incurred by MSEDCL in FY 2010-11 as per Petition in Case No. 19 of 2012.
3.6.20 Regarding increase in electricity charges MSEDCL submitted that as compared to

estimated amount of Rs.17 crore the actual expenditure on electricity charges was Rs.
106 crore. The increase is due to the change in policy of booking of electricity charges
for energy consumed by MSEDCLs own offices throughout the State, which was
earlier used to be set-off against revenue from sale of power.
3.6.21 Regarding increase in fees and subscriptions MSEDCL submitted that as compared to
estimated amount of Rs.21 crore the actual expenditure incurred was Rs. 37 crore.
The variation of Rs. 16 crore has mainly resulted due to the hike in MERC license
fees by Rs.13 crore. The remaining amount is towards the payment of Petition filing
fees, subscriptions etc. as this account code is not operated for license fees only.
3.6.22 MSEDCL further submitted that there is major reduction in expenditure pertaining to
rent & rates, conveyance & travelling, advertisement, computer stationery &
expenditure on consumer billing etc. amounting to Rs.50 crore in total.
3.6.23 In response to the directives issued by the Commission in the Interim Order dated 3
March 2014 (Case No. 38 of 2014) MSEDCL submitted that following components of
A&G expenses have seen sizeable change over previous year.
Table 30: Details of A&G expenses having sizeable change over previous year to FY 2011-12 as provided
by MSEDCL (Rs. crore)
Sr.
No.
1
2
3
4
Particulars
Electricity charges
Fees & subscription
Computer stationery
Others
Total
FY 2010-11
FY 2011-12
15.73
19.36
52.65
352.01
439.75
106.27
37.19
58.29
365.22
566.97
Increase/
(decrease) over
previous period
90.54
17.83
5.64
13.21
127.22
3.6.24 As regard fees & subscription MSEDCL submitted that expenditure on Account of
distribution license fee for the FY 2012-13 amounting to Rs. 24.36 crore has been
wrongly expensed out in the FY 2011-12 instead of showing it as prepaid expenses in
that year. Hence there is an increase in expenses pertaining to fees & subscription in
FY 2011-12 and reduction in FY 2012-13. As regard increase in expense pertaining to
computer stationery MSEDCL submitted that the increase in expenses is due to
increase in number of consumers. Further the increase in the prices of stationery and
overall inflation has contributed to the overall increase. Considering the present trend
of inflation, there is increase over previous year in most of the expense heads such as
conveyance and travel, freight on capital equipment, vehicle running and vehicle hire
expenses etc. Further increase has also resulted due to increase in fuel prices, increase
in no. of consumers, special recovery drive, theft detection drive, public awareness etc
3.6.25 In reply to a query raised by the Commission regarding Rs. 25 crore booked by
Page 65 of 148
MSEDCL under the head others MSEDCL submitted a breakup of the A&G
expenses booked under the head others.
Table 31: Break up of expenses booked under head others as submitted by MSEDCL
Sr. No.
1
2
Expenses booked under the head others

Amount (Rs. crore)
Remuneration to Recovery Officer/ Inspector
0.51
Fees for Boards installation
24.66
Total
25.17
3.6.26 MSEDCL submitted that it has capitalised A&G expenses to the extent of Rs. 123
crore in FY 2011-12. The Commission approves the capitalised A&G expenses of Rs.
123 crore as submitted by MSEDCL.
3.6.27 The Commission while approving the A&G expenses in Order in Case No. 19 of 2012
considered the weighted average increase in point to point inflation between March
2011 and March 2012 in the Consumer Price Index (CPI) for Industrial Workers
(weightage 40%) and Wholesale Price Index (WPI) (weightage 60%). Based on the
this weighted average increase the Commission escalated the approved net A&G
expenses for FY 2010-11 to arrive at the approved A&G expenses for FY 2011-12.
Hence, for computation of gains and losses, the Commission has considered the actual
expenses of Rs. 444.03 crore for comparison with the approved A&G expenses of Rs.
290 crore approved by the Commission in the Order in Case No. 19 of 2012 as well as
in this Order. The Commission has carried out the computation of gains and losses in
Section 3.23 of this Order.
Table 32: Approved A&G expenses for FY 2011-12
Sr.
No.
1.
Particulars
Net A&G expenses
(Rs. crore)
As per Order in
Case No. 19 of
2012
Actual
Approved
after final
Truing up
290
444.03
290
R&M expenses
3.6.28 MSEDCL submitted that the R&M expenses in FY 2011-12 were Rs. 553 crore as
against Rs. 569 crore approved by the Commission in the Order dated 16 August,
2012 in Case No. 19 of 2012.
3.6.29 The Commission while approving the R&M expenses in Order in Case No. 19 of
2012 considered the increase in point to point inflation between March 2011 and
March 2012 in the Wholesale Price Index (WPI). The Commission had escalated the
Trued-up employee expenses for FY 2010-11 by the point to point inflation to arrive
at the approved Net R&M expenses for FY 2011-12.
Page 66 of 148
3.6.30 The Commission verified the amount claimed by MSEDCL for Net R&M expenses
with that in the Schedule-25 of the audited accounts of MSEDCL and has found the
amount claimed by MSEDCL to be accurate. However, after Truing up, the
Commission approves the normative expense of Rs. 569 crore as was approved in the
Order in Case No. 19 of 2012 based on inflation indices. For computation of gains
and losses, the Commission has considered the Trued-up expenses of Rs. 569 crore
for comparison with the actual net R&M expenses of Rs. 553 crore. The Commission
has carried out the computation of gains and losses in Section 3.23 of this Order.
Table 33: Approved R&M expenses for FY 2011-12
Sr.
No.
Particulars
Gross R&M expenses

Less R&M expenses
capitalised
Net R&M expenses
2
3
3.7
As per Order in
Case No. 19 of
2012
569
553
Approved
after final
Truing up
569
569
553
569
Actual
Capital expenditure and capitalisation for FY 2011-12
3.7.1 MSEDCL submitted the capitalisation for FY 2011-12 as Rs. 6,659 crore, of which
Rs. 6,053 crore was on account of capitalisation of DPR schemes. This was against
Rs. 5,987 crore approved in the Order dated 16 August, 2012 in Case No. 19 of 2012.
The project details, capital expenditure and capitalisation submitted by MSEDCL are
shown below:
8382.98
3970.01
6742.97
GFSS - I
894.71
29.33
1032.93
50.62
968.00
73.29
GFSS - II
1299.91
79.85
1055.85
459.69
994.40
209.48
91.73
226.21
112.24
205.95
GFSS - III
Fixed Capacitor
Scheme
56.50
39.40
41.30
0.62
2.52
AMR
47.52
14.79
10.53
APDRP
Capitalisation during the

year
Overrun of capital
expenditure
Project Title
Sr. No.
Infra Plan Works
Excess Capitalisation
3426.89
Cumulative capitalisation
Cumulative Capital
Expenditure
9013.96
MERC Approved Cost
Capital expenditure during

the year
Table 34: DPR schemes in FY 2011-12 (Rs. crore)
Page 67 of 148
778.77
103.65
496.77
Phase-II
237.53
37.72
331.71
170.02
R-APDRP A
300.59
62.00
69.47
21.81
21.81
R-APDRP B
3406.05
0.10
Internal Reform
a
b
DTC Metering
Phase-II ( Part I &
II )
92.49
20.70
141.85
23.18
141.49
49.00
Phase-III
149.59
47.06
127.66
40.88
90.76
SPA:PE
2462.01
765.69
2201.94
831.64
2051.44
10
P:SI
276.73
147.01
482.84
38.54
309.46
11
P:IE
187.84
63.40
317.66
70.53
310.97
12
DRUM
147.38
0.06
187.47
1.60
187.01
39.63
13
924.73
235.86
797.62
271.75
627.02
14
RGGVY
Elimination of 66
KV line
147.70
0.04
0.04
15
INFRA PH II
6323.34
16
721.21
302.00
302.00
130.93
18
GFSS IV
LT Capacitor
Scheme I& II
Single Phasing Left out villages
267.71
35.98
35.98
33.79
33.79
19
GFSS (Shrirampur)
87.43
20
Scada Part A
161.88
0.29
0.29
28.21
36.40
7.06
0.75
21
22
23
24
25
26
New Schemes
Smart Grid Project
Pilot at Baramati
Deogad Wind
Power Project
Establishment of
meter testing
NABL Labs at
Napur & Pune
Ag DSM-Pilot
project in
Mangalwedha
solapur
Star rated celing
fan Phase-I
Star rated celing
fan Phase-II
Overrun of capital
expenditure
Project Title
Sr. No.
17
1136.56
Cumulative Capital
Expenditure

year

the year
Phase-I
MERC Approved Cost
Page 68 of 148
Additional GFSS
Left Out
28
Solar Ag Pump
Total

year
Overrun of capital
expenditure
Cumulative Capital
Expenditure

the year
MERC Approved Cost
Project Title
Sr. No.
27
427.30
2.07
29385.56
5407.62
16552.11
6053.20
13387.60
161.92
3.7.2 The information as submitted by MSEDCL for FY 2011-12 for Non-DPR schemes is
as below:
Table 35: Non-DPR schemes in FY 2011-12 (Rs. crore)
Sr.
No.
Particulars
1
2
3
4
a
b
c
d
e
5
a
b
c
d
6
7
8
9
10
FMS
MIS
Load Management
Distribution Scheme
P.F.C. Urban Distribution
Scheme
MIDC Interest free Loan
Scheme
Evacuation
Evacuation Wind Generation
Agriculture Metering
R E Dist
I- R E / N D
DPDC / Non-Tribal
DPDC / SCP
DPDC / TSP + OTSP
Rural Electrification ( Grant )
JBIC
New consumers
Back log
AG AMR
Single Phasing
Capital
Capitalisation
Expenditure during during FY 2011FY 2011-12
12
2.02
0.96
8.77
15.59
43.50
41.32
88.83
25.27
26.32
8.00
48.98
87.60
737.79
-
48.06
40.65
81.78
34.91
44.08
8.90
15.07
87.60
202.60
25.14
Page 69 of 148
Sr.
No.
11
Particulars
ERP
Total
Capital
Capitalisation
Expenditure during during FY 2011FY 2011-12
12
1,118.40
605.34
3.7.3 The Commission observed some deviations from the in-principle approval and
directed MSEDCL to submit the actual year-wise phasing of capital expenditure and
capitalisation for each of the schemes, the reasons for excess capitalisation, if any, and
the benefits accrued in each of the capital expenditure schemes. The Commission
noticed that there have been incidences of cost over-run in few of the DPR schemes.
The Commission also noticed that the total over-run in costs against the approved
capitalisation was Rs. 161.92 crore. However, MSEDCL provided the reasons for
such cost over-run and the Commission has found the reasoning provided to be
satisfactory.
3.7.4 MSEDCL submitted that the capitalisation for Non-DPR schemes was Rs. 605 crore
in FY 2011-12, which works out to 10 % of DPR schemes. The Non-DPR
capitalisation is less than 20% of capitalisation of DPR schemes for FY 2011-12
which is well within the norm followed by the Commission.
3.7.5 MSEDCL submitted that as per the Schedule 12 of the audited accounts the Addition
to Gross Block is Rs. 6,770 crore. In Form 4, MSEDCL has shown only Scheme
Related Capitalisation whereas total capitalisation includes land and land rights,
buildings etc. i.e. additional amount of Rs. 112 crore as other adjustments by
Corporate Office.
3.7.6 In reply to a query raised by the Commission regarding other adjustments by
Corporate office MSEDCL submitted that there are certain items of General Assets
such as land & land rights, buildings, vehicles, furniture & fixtures, office equipments
& other civil works etc. which are not covered in any infrastructure schemes, but
these assets are necessary to run day to day business activities. Hence these items
have been shown as other adjustments. The Commission has adopted the approach for
dealing with assets capitalised but not forming part of any specific scheme as per
Order in Case No. 19 of 2012 which was based on the submission made by MSEDCL.
Accordingly, the Commission has considered the impact of Rs. 112 crore
capitalisation only on depreciation and not on interest and return on equity
computation.
3.7.7 The Commission approves capitalisation as submitted by MSEDCL for FY 2011-12.
The capitalisation approved for FY 2011-12 is as follows:
Page 70 of 148
Table 36: Capitalisation for FY 2011-12
Particulars
Order in Case No.

19 of 2012
DPR Schemes
Non-DPR Schemes
Other Adjustments by
Corp Office
Total Capitalization
3.8
(Rs. crore)
Actual
Approved after
final Truing up
5095.00
6053.20
6053.20
892.00
-
605.34
112.00
605.34
112.00
5987.00
6770.54
6770.54
Depreciation for FY 2011-12
3.8.1 The depreciation for FY 2011-12 was approved at Rs. 815.25 crore in the Order in
Case No. 19 of 2012. In the present Petition, MSEDCL has claimed depreciation of
Rs. 871 crore for FY 2011-12. The Advance Against Depreciation (AAD) for FY
2011-12 was approved at Rs. 198.84 crore in the Order in Case No. 19 of 2012. In the
present Petition, MSEDCL has claimed AAD of Rs. 22 crore for FY 2011-12.
3.8.2 MSEDCL submitted that depreciation has been calculated taking into consideration
the opening balance of assets in the beginning of the year and the capitalization for
the year. The depreciation rates are taken as per the MERC (Terms and Conditions of
Tariff) Regulations, 2005
3.8.3 The Commission checked for the maximum allowable limit for accumulated
depreciation for various assets, and found that the assets have been depreciated up to
the maximum allowable limit of 90% of the original cost of the assets as per the
Regulation 34.4.1 of MERC (Terms and conditions of Tariff) Regulations, 2005.
3.8.4 The opening balance of GFA for FY 2011-12 has been considered the same as the
closing balance of GFA for FY 2010-11. The Commission has considered the average
depreciation rate as submitted by MSEDCL for computation of depreciation.
3.8.5 In addition to the depreciation, MSEDCL has claimed an amount of Rs. 198.84 crore
as Advance Against Depreciation (AAD) for FY 2011-12. However, the Commission
noticed that MSEDCL had not submitted the required information as required in Form
4 of the Tariff filing formats. The Commission had directed MSEDCL to submit the
information during the proceedings of Truing up for FY 2011-12 and FY 2012-13. In
this regard MSEDCL submitted that the cumulative figures of assets, depreciation,
loan or AAD is not available for the assets created at the time of erstwhile MSEB and
therefore there is a practical difficulty in providing the information on AAD as per
Form 4.
3.8.6 Hence, the Commission directs MSEDCL to furnish the information on AAD as
required in Form 4 of the Tariff filing formats during the submission of MYT Petition
for Tariff determination. MSEDCL is required to furnish details of the cumulative
Page 71 of 148
loans taken and repayment, accumulated depreciation, AAD and all information
required in Form 4 of the formats for each of the following three cases, (i) for all the
on-going schemes, (ii) all schemes from FY 2005-06 as per actual, and (iii) estimates
from the MSEB period, based on certain capital expenditure funding assumptions, if
information is not available with MSEDCL.
3.8.7 The Commission has approved AAD in accordance with Regulation 34.4.2 of MERC
(Terms and conditions of Tariff) Regulations, 2005. Accordingly, the Commission
approves depreciation, including AAD for FY 2011-12 as shown below.
Table 37: Depreciation for FY 2011-12
Particulars
Opening GFA
Addition to GFA during the year
Retirement of assets during the year
Closing GFA
Depreciation
Depreciation (as % of Average GFA)
Repayment
AAD
Depreciation + AAD
3.9
(Rs. crore)
Order in
Approved
Case No.
Actual
after final
19 of 2012
Truing up
19316.57 20,499.64
19,316.57
5987.33
6,658.54
6,658.54
0.47
0.47
25303.9 27,157.71
25,974.64
815.25
871.20
827.94
3.65%
3.66%
3.66%
1014.09
892.76
892.76
198.84
21.56
64.81
1014.09
892.76
892.76
Interest expenses
3.9.1 The Commission, in its Order dated 16 August, 2012, had approved interest expenses
of Rs. 802.65 crore after considering the interest on debt corresponding to capitalised
assets only. MSEDCL submitted that the actual net interest expense on long-term
loans in FY 2011-12 was Rs. 845 crore. The actual loan addition during FY 2011-12
reported by MSEDCL was Rs. 4150 crore.
3.9.2 In reply to a query raised by the Commission regarding interest rate applicable to loan
from Ratnagiri DCC Bank and Sindhudurg Bank MSEDCL submitted that on 29
March 2010 it availed a loan of Rs.100 crore from Ratanagiri DCC Bank at a fixed
interest rate of 9% for 7 years and subsequently another tranche of loan of Rs. 50
crore on 24 March, 2011 with a fixed rate of interest of 10% for 5 years. Also Rs.75
crore loan was availed on 30 July, 2010, from Sindhudurg Bank with fixed rate of
9.25% for 7 years. Debt servicing is done and interest expenses are booked as per the
terms and conditions of the loan agreements executed with above bankers at a fixed
rate of interest of 9%, 10% and 9.25%.
3.9.3 In reply to a query raised by the Commission regarding EMI Swapping of loan/
debt restructuring premium MSEDCL submitted that in the FY 2002-03, the
Page 72 of 148
erstwhile MSEB approached REC and requested to swap old high interest rate bearing
loan (with interest rates of 14% to 15%) with loans (with prevailing lower interest rate
of 10.05%) for 378 schemes having outstanding balance of Rs. 188.72 crore.
Considering, the request, REC restructured the high interest rate bearing loan with
lower interest rate bearing loan. After unbundling of erstwhile MSEB the same
reflected in the books of accounts of MSEDCL. The loans have outstanding amount
as on 31 March, 2013 as Rs. 2.94 crore, further MSEDCL has paid Rs. 0.79 crore
towards EMI - Swapping of Loan/Debt Restructuring Premium for FY 2011-12.
3.9.4 In reply to a query raised by the Commission regarding GoM loan MSEDCL provided
following details.
Table 38: Details of GoM loans (RGGVY loans) as provided by MSEDCL (Rs. crore)
Sr. No.
1
2
3
4
Particulars
Loan for Harijan Basti
Loan for regional imbalance
Plan loan
APDRP loan
Total
FY 2011-12
145.94
142.63
102.39
17.09
408.05
3.9.5 In its Petition, MSEDCL did not submit the amount of consumer contribution and
grants received to fund the capital expenditure of FY 2011-12. The Commission
raised this query and MSEDCL provided details of the funding pattern of capital
expenditure for FY 2011-12. The Commission also reconciled the funding pattern
from the audited accounts of MSEDCL and found it to be accurate.
Table 39: Funding patter of capital expenditure as per audited accounts of MSEDCL (Rs. crore)
Sr. No.
1
2
3
4
Particulars
Consumer Contribution
Grants received during the year
Equity
Debt
Total Capital Expenditure
Amount
248
2128
4150
6526
%
0.00%
3.80%
33.90%
66.10%
3.9.6 The Commission has considered the funding pattern for capitalisation for FY 2011-12
in the same ratio as that of the capital expenditure. As per MSEDCLs submission for
Return on Equity Rs. 1,818 crore is funded via equity out of the total capital
expenditure excluding grants of Rs. 6,278 crore during FY 2011-12. Also,
correspondingly Rs. 1,854.79 crore pertains to equity portion of capitalisation for FY
2011-12. However as per the forms for capital expenditure submitted by MSEDCL,
Rs. 2,128 crore of equity funding was reported for capital expenditure in FY 2011-12.
As this means a contribution of 33.90% of equity, it was above the limit of
permissible 30%. Due to lack of reconciliation the Commission has considered the
equity at Rs. 1,854.79 crore for funding of capitalisation, as submitted by MSEDCL
in the form for computation of Return on Equity. This is also within the limit of 30%
Page 73 of 148
equity contribution in capitalisation. Garants and consumer contributions have been

considered in the same ratio as per the pattern in capital expenditure. The figure of
loans has been accordingly derived by the Commission.
Table 40: Funding Pattern submitted by MSEDCL and approved by the Commission for FY 2011-12
(Rs. crore)
Particulars
ARR Order
(Case No. 19
of 2012)
Funding pattern of capital expenditure

Total Capital
Expenditure
Consumer
Contribution
Grants received
during the year
Equity
Actual
As per
ROE
submission
Allowed after
Truing up
As per Capital
Expenditure
form
6,526
6,526
6,526
248
248
2,128
1,818
4,150
4,460
6,658.54
6,658.54
1,818
Debt
Funding pattern for capitalization during FY 2012-13
Total Capitalisation
Grants received
during the year
5,987.33
6,658.54
196.10
Equity
1,039.09
Debt
4,503.28
253.04
1,854.79
1,854.79
4,550.71
3.9.7 The interest rate for the long-term loans has been considered as per the actual
effective interest rate of MSEDCL for FY 2011-12, arrived by dividing the gross
interest expense by the average balance of opening and closing loans. This interest
expense has been computed as 10.92%. Moreover, the repayment has been considered
equal to the depreciation allowed for FY 2011-12. In this regard, it may be noted that
the Tariff Regulations of the Commission requires repayment to be considered as
equal to depreciation allowed. The relevant portion of the Tariff Regulations, 2005 are
quoted below.
The loan capital calculated using the normative debt:equity ratio under Regulation
61 above shall be assumed to be repaid each year based on a normative repayment
schedule:
Provided that the amount of such normative repayment for a year shall be equal to
the amount of depreciation on the fixed asset to which such loan relates:
Provided further that where the outstanding normative loan balance is less than the
Page 74 of 148
amount of normative loan repayment calculated as above, the repayment shall be

assumed to be equal to the outstanding normative loan balance and no further
amount shall be permitted on account of such loan..
3.9.8 The summary of the interest expenses for long-term debt approved for FY 2011-12 is
as follows:
Table 41: Interest expense for FY 2011-12
(Rs. crore)
Opening Balance
5,795.45
8,170.81
Additions
4,503.28
4150.42
Approved
after final
Truing up
5,795.45
4,550.71
Repayments
Closing Balance
Gross interest expense
Less: IDC
Net Interest expense
Average interest rate (%)
1,014.09
9,284.64
802.65
802.65
10.60%
892.76
11,428.47
1,070.16
225.01
845.15
10.92%
827.94
9,518.22
836.16
836.16
10.92%
Particulars
Order in Case
No. 19 of 2012
Actual
3.10 Interest on working capital and consumers Security Deposits and Other Interest
and Finance Charges
3.10.1 MSEDCL submitted that the Commission has not allowed any interest on working
capital since the provision of reducing the working capital by the total amount of
security deposits leads to negative net working capital which results in the zero
working capital requirement based on normative principle. Further, the amount of
security deposits as reflected in the books of accounts of MSEDCL is just a notional
amount. MSEDCL has not physically received such deposit in cash from erstwhile
MSEB as a part of the Transfer Scheme. MSEDCL requested the Commission to
allow this expense.
3.10.2 MSEDCL submitted that other interest and finance charges include interest on
security deposits at 6% p.a., guarantee charges, finance charges, stamp duty and
service fee for availing loans. Further, MSEDCL submitted detailed break up of
Finance Charges for FY 2011-12 as shown below.
Table 42: Detailed break up of Finance Charges as submitted by MSEDCL
Sr. No.
1
2
3
4
5
Particulars
Bank charges for Remittances
Other Bank Charges
Commitment Charges
Amount payable to Mahagenco on account
of late payment of power supply bills
Other interest payments
Amount (Rs. crore)

2.21
14.49
0.05
81.57
1.7
Page 75 of 148
Total
100.02
3.10.3 MSEDCL further submitted a detailed breakup of Rs. 121.38 crore as deposits
collected from consumers in FY 2011-12 for service connections, deposits against
burnt meters, advance payment against energy bills, miscellaneous deposits etc.
MSEDCL submitted that these deposits are not security deposits and hence it has not
considered these as part of the computation for interest on consumer security deposit.
3.10.4 MSEDCL submitted that it has filed an Appeal before the Honble ATE contesting
disallowance of interest on working capital in Tariff Order dated 16 August, 2012.
The present Petition has been submitted without prejudice to any of its rights and
contentions taken by MSEDCL in the said Appeal. MSEDCL reserves its right to
again approach the Commission depending on the final decision on the Appeal.
3.10.5 Further, the Judgement in the said Appeal (Appeal no. 227 of 2012 & IA no. 20 of
2014) has been passed by the Honble ATE on 30 May, 2014. In the said Judgement
the Honble ATE has upheld the decision of the Commission, observing, Interest on
working capital: The contention of the Appellant regarding deduction of consumer
security deposit from the working capital requirement is rejected as it is inconsistent
with the Tariff Regulations and the consumers cannot be burdened on this account
especially as they had deposited the security with the erstwhile Electricity Board
which is reflected in the books of accounts of the Appellant.
3.10.6 The Tariff Regulations, 2005 clearly stipulate that working capital interest has to be
considered on normative basis. In MSEDCLs case, because of the significant amount
of consumers security deposit lying with MSEDCL (as per its books of accounts),
and the credit period of one-month considered on power purchase expenses, the
normative working capital requirement works out to be negative for FY 2011-12.
Hence, the Commission has considered the interest on working capital as nil for FY
2011-12.
3.10.7 MSEDCL submitted interest on consumer security deposit for FY 2011-12 as Rs.
252.28 crore. The Commission verified this amount as per the audited accounts and
found it to be correct. Hence, the Commission has considered Rs. 252.28 crore
towards interest on consumer security deposit for FY 2011-12
3.10.8 As regards amount payable to Mahagenco on account of late payment of power
supply bills, the Commission enquired the reason for incurrence of this expense. In
reply to this query MSEDCL submitted that for FY 2011-12, MSEDCL did not
receive any Tariff hike and the Commission vide Order in Case No. 115 of 2009 dated
31 March 2010 ruled that the existing Tariff would continue to be in force till such
time as revised Tariff is determined by the Commission. Hence, MSEDCL continued
with the same Tariff approved by the Commission for FY 2010-11 in FY 2011-12.
MSEDCL further submitted that its cash flow situation aggravated due to power
purchase at high rate of Rs. 4.05 per unit from Traders and non passage of FAC to the
Page 76 of 148
consumers immediately, due to ceiling of 10% on FAC passage. MSEDCL further

submitted that as per the clause 9.3 of the PPA signed by it with MSPGCL it is
required to pay late payment surcharge to MSPGCL at the rate of 1.25% per month
for payment made beyond due date of payment of bill (i.e. 60 days from the date of
bill). MSEDCL submitted that it has calculated interest charge at 1.25% per month
and has made provision of Rs. 81.57 crore in FY 2011-12.
3.10.9 The Commission observes that MSEDCL has only created a provision in its accounts
for payment of interest amounting Rs. 81.57 crore to MSPGCL for delayed payment
of power purchase. It has not submitted that it has actually made the payment to
MSPGCL. Therefore, the Commission is not considering the merit of allowing this as
expense to MSEDCL. However, if MSEDCL submits at a later stage that it has
actually made the payment to MSPGCL, then the Commission will consider the merit
of the case along with documentary evidence of the payment of the same. Therefore,
the amount of Rs. 81.57 crore claimed by MSEDCL towards amount payable to
Mahagenco on account of late payment of power supply bills is not allowed in this
Order.
3.10.10The Commission verified Guarantee charges, Finance charges and Stamp duty with
Schedule 28 of the audited accounts and found these to be correct.
3.10.11The interest on working capital, other interest and finance charges including interest
on consumers security deposit, approved by the Commission for FY 2011-12 is as
given below.
Table 43: Interest on working capital, other interest and finance charges including interest on consumers' security
deposit for FY 2011-12 (Rs. crore)
Particulars
Interest on working capital
Interest on security deposit
Guarantee charges
Finance charges
Stamp duty
Total interest on working
capital, other interest and
finance charges
Order in Case
No. 19 of 2012
Actual
Approved
after final
Truing up
259.37
14.33
31.67
11.86
339.37
252.28
11.65
100.02
5.48
252.28
11.65
18.45
5.48
317.23
708.80
287.86
3.11 Incentives and Discounts

3.11.1 In its Petition, MSEDCL submitted that the incentives and discounts paid/ allowed to
consumers during FY 2011-12 were Rs. 221 crore, as compared to the Rs. 150 crore
approved by the Commission in the Order in Case No. 19 of 2012 dated 16 August,
2012.
3.11.2 This amount was verified with Schedule-28 of the audited accounts of MSEDCL,
Page 77 of 148
where incentives/ discounts are shown as Rs. 221 crore. However, the amount
claimed by MSEDCL also includes an amount of Rs. 0.17 crore paid as incentive to
distribution franchisee. MSEDCL has also not provided any details as to what this
amount pertains to. Since, this expense does not form a part of the regulatory
accounts; the Commission has not accepted the claim of MSEDCL in this regard. The
Commission therefore approves Rs. 220.83 crore as Incentives and Discounts for FY
2011-12, as shown in the table below:
Table 44: Incentives/ Discounts for FY 2011-12
(Rs. crore)
Particulars
As per Order in
Case No. 19 of 2012
Actual
Approved after
Truing up
Incentives/ Discounts
150
221
220.78
3.12 Other expenses

3.12.1 MSEDCL submitted that the Other expenses for FY 2011-12 comprise of the
expenditure on account of interest to suppliers/ contractors, rebate to consumers and
other expenses viz. compensation for injuries to staff and outsiders. MSEDCL
submitted that other expenses for FY 2011-12 was Rs. 28 crore as against Rs. 9 crore
approved by the Commission in the Order in Case No. 19 of 2012 dated 16 August,
2012.
3.12.2 MSEDCL submitted the breakup of other expenses incurred in FY 2011-12 which are
shown in the table below:
Table 45: Break up of other expenses incurred in FY 2011-12
Sr. No.
1
2
3
4
5
(Rs. crore)
Particulars
Compensation for injuries, death and damages to staff
Compensation for injuries, death and damages to outsiders
Intangible Assets written off
Interest on staff welfare Fund
Non-moving items written off
Total
Amount
7
10
7
3
1
28
3.12.3 In reply to a query raised by the Commission MSEDCL submitted that intangible
assets written off pertain to the cost of oracle software, license procured for data
centre for Rs. 22.19 crore, which is written off over the period of 3 years. Nonmoving items written off pertain to the material lying for more than 3 years, which is
written off
3.12.4 The Commission observes that Intangible assets written off, non moving items written
off, write off of deferred revenue expenditure and small and low value write off/
scraped do not form part of the regulated accounts. Hence the Commission has
disallowed the expenses under the abovementioned heads.
Page 78 of 148
3.12.5 The Commission verified expenses booked under compensation for injuries, death
and damages to staff, compensation for injuries, death and damages to outsiders and
interest on staff welfare fund as per Schedule-27 of audited accounts. The same were
found correct. Accordingly, the Commission has approved other expenses as
summarised below.
Table 46: Other expenses for FY 2011-12
Particulars
Interest to suppliers / contractors
Compensation for injuries, death
and damages to staff
Compensation for injuries, death
and damages to outsiders
Interest on Staff Welfare Fund
Bad debts w/off dues from
consumers
Intangible asset written off
Non moving items written off
Write off of deferred revenue
expenditure
Small and low value write off /
scraped
Other expenses (Total)
(Rs. crore)
Order in
Case No. 19
of 2012
9.00
Approved
after final
Truing up
-
6.68
6.68
9.97
9.97
2.73
2.73
7
1
0.29
0.17
28.07
19.38
Actual
3.13 RLC Refund

3.13.1 MSEDCL submitted that it had refunded a total RLC refund amount of Rs. 419 crore
to the consumers in FY 2011-12. In the Order dated 16 August, 2012, the
Commission had considered the amount of Rs. 443 crore towards RLC refund in FY
2011-12. Further MSEDCL submitted that refund of RLC is done as per the Order
and methodology prescribed in Case No.144 of 2008.
3.13.2 In Schedule-27 of its audited accounts, the expenditure due to refund of RLC is
shown as Rs. 419 crore. Accordingly the Commission has approved RLC refund for
FY 2011-12 as summarised below:
Table 47: RLC Refund for FY 2011-12
Particulars
RLC Refund
As per Order in
Case No. 19 of 2012
443
(Rs. crore)
Actual
419
Approved after
Truing up
419
3.14 ASC Refund

3.14.1 MSEDCL submitted that it had refunded a total ASC refund amount of Rs. 4 crore to
the consumers in FY 2011-12. In the Order dated 16 August, 2012, the Commission
Page 79 of 148
had not considered any amount towards ASC refund in FY 2011-12. However
MSEDCL submitted that it has actually paid Rs. 4 crore as ASC refund for FY 201112.
3.14.2 In Schedule-27 of its audited accounts, the expenditure due to refund of RLC is
shown as Rs. 4 crore. Accordingly the Commission has approved ASC refund for FY
2011-12 as summarised below:
Table 48: ASC Refund for FY 2011-12
(Rs. crore)
Particulars
As per Order in
Case No. 19 of 2012
Actual
Approved after
Truing up
ASC Refund
3.15 Provision for Bad Debts

3.15.1 MSEDCL submitted that the Commission did not consider the ZLS revenue while
approving the provision for bad debt for FY 2011-12 in the Order dated 16 August,
2012. MSEDCL submitted that the revenue from ZLS scheme is also an integral part
of MSEDCLs Revenue; which cannot be separated for the purpose of computation of
provision for bad debt. Further, there might be some ZLS beneficiary consumers who
would default in payment and provision for the same needs to be considered.
Accordingly, MSEDCL has computed provision for bad debts at 1.5% of the accrued
revenue from sale of power for FY 2011-12 which is Rs. 593 crore. The Commission
verified this amount from Schedule-27 of the audited accounts of MSEDCL and
found it to be accurate.
3.15.2 The Commission notes the concerns of MSEDCL. However, the ZLS scheme was
introduced by MSEDCL for the consumers in its six divisional headquarters.
MSEDCL proposed the scheme as revenue neutral scheme, i.e. the normal revenue
and costs pertaining to the ARR were to remain unaffected by this proposed scheme.
The concept was to extend benefit of withdrawal of load shedding to the consumers in
the revenue headquarters against levy of additional charges pertaining to cost of
additional power purchase. Therefore, the scheme was introduced for a set of specific
consumers, keeping it out of the purview of the ARR determination in accordance
with the Tariff Regulations, 2005. Therefore, any mechanism introduced by the
licensee to a select set of consumers or for specific geographic areas not covering the
entire area of supply cannot be considered under the normal ARR and Tariff
determination. For the purpose of Truing up, the Commission has not considered the
revenue from sale of ZLS power. Accordingly, the Commission approves the
provision for bad debts at 1.5% of the actual revenue (excluding ZLS) for FY 201112.
Page 80 of 148
Table 49: Provision for bad debts for FY 2011-12
(Rs. crore)
As per Order in
Case No. 19 of
2012
Actual
Approved
after Truing
up
Income billed (Revenue

excluding ZLS)
37,814
39,555
39,233
Bad debts
567.21
593.33
588.50
1.5%
1.5%
1.5%
Particulars
Bad debts provision as % of

income billed (excluding
ZLS revenue)
3.16 Contribution to Contingency Reserves

3.16.1 MSEDCL submitted that it has created a contingency reserve equal to the amount
approved for FY 2011-12 in the Order dated 16 August, 2012 which is Rs. 48 crore.
3.16.2 In reply to a query raised by the Commission in this regard, MSEDCL submitted that
due to unavailability of sufficient funds to discharge its liabilities towards power
procurement, it has not made any investment towards contribution to contingency
reserves for FY 2011-12. For FY 2011-12, it has inadvertently claimed Rs. 48 crore
towards contribution to contingency reserves; the same may please be ignored.
Accordingly the Commission has approved contribution to contingency reserves for
FY 2011-12 as summarised below:
Table 50: Contribution to contingency reserves for FY 2011-12
Particulars
As per Order in
Case No. 19 of 2012
Actual
Approved after
Truing up
Contribution to
contingency reserves
48
3.17 Prior Period Charges

3.17.1 MSEDCL submitted that net prior period credits/ (charges) amounted to Rs. 73 crore
for FY 2011-12. The Commission verified this amount from Schedule - 27 of the
audited accounts for FY 2011-12 and found the amount to be accurate.
3.17.2 MSEDCL submitted that prior period charges are primarily on account of the net
adjustment to the billing related to previous years. When a consumer approaches with
the complaint regarding billing adjustment to the past billing, the adjustments are
carried out. When this adjustment is with reference to the billing period prior to the
respective financial year for which the accounts are prepared, it is booked as a prior
period expenditure as per the Accounting Standard - 5 (AS-5) issued by the Institute
of Chartered Accountants of India. Prior period items as defined in the AS - 5 are the
items of income or expenses which arise in the current period as a result of errors or
omissions in the preparation of the financial statements of one or more prior periods.
Page 81 of 148
3.17.3 MSEDCL submitted the breakup of prior period charges as follows:

Table 51: Break up of prior period charges for FY 2011-12 as submitted by MSEDCL
Sr. No.
Particulars
A
1
2
3
4
5
6
Income relating to previous year
B
7
8
9
10
11
12
13
14
Receipts from Consumers

Interest Income
Excess provision for Depreciation
Excess provision for Interest and Finance Charges
Other Excess Provision
Other Income
Sub-total
Expenses/ Losses relating to previous year
Short provision for Power Purchase
Operating expenses
Employee Costs
Depreciation under provided
Interest and other charges
Administration Expenses
Material related expenses
Adjustment to past billing
Sub-total
Net prior period expenditure (B-A)
Amount (Rs. crore)
96.07
0.24
22.33
5.35
15.96
171.96
311.93
13.61
1.61
0.81
20.30
12,91
2.81
5.30
327.23
384.61
72.68
3.17.4 In reply to a query raised by the Commission regarding various expenses booked
under prior period credit/ charges, MSEDCL submitted that prior period expenses
against depreciation are due to short depreciation accounted for in previous years due
to error/ omission in depreciation calculation, delayed capitalisation of assets etc.
prior period expenses against interest cost are due to short provision of interest such
as interest on consumers / cash collection agencys security deposits, borrowings etc.
Prior period expenses against O&M costs are also due to errors & omissions in the
accounting of various items of O&M expenses in previous years.
3.17.5 The Commission has not received the details of capitalisation adjusted for prior
periods. Also, capitalisation is approved by the Commission for every year based on
prudence check. The Commission has not been able to consider the claim of
MSEDCL for any excess/ short provision of depreciation and excess/ short provision
for interest. Adjustments for depreciation and capitalisation cannot be allowed in
regulatory accounting as the Commission approves capitalisation and corresponding
depreciation for every year based on prudence check and provisions of Regulations.
The Commission has also not accepted the claim for prior period operating, R&M and
administrative expenses as they are controllable factors, and are approved as per the
Page 82 of 148
principles set out in all the previous Tariff Orders in the first control period.
3.17.6 As regard short provision for power purchase for FY 2011-12 MSEDCL submitted
that this includes short provision of Rs. 11.82 crore towards power purchase from
MSPGCL. After reconciliation of energy units for the period September 2006 to
March 2007, April 2009 to March 2010 & April 2010 to March 2011, short provision
against power purchase has been accounted for.
3.17.7 Given below is the summary of prior period charges approved by the Commission for
FY 2011-12.
Table 52: Prior Period Expenses for FY 2011-12
Particulars
Interest Income
Excess provision for Interest and
Finance Charges
Other Income
Sub-total of Income
Operating expenses
Employees Costs
Interest & Other Charges
Material Related Expenses
Adjustment to Past billing
Sub-total of expenses
Net Prior Period credits/ (charges)
(Rs. crore)
Order in
Approved
Case No. Actual
after
final
19 of 2012
Truing up
96.07
96.07
0.24
0.24
22.33
-
No
prior
period
income/
expenses
approved
5.35
15.96
171.96
311.91
13.61
1.61
0.81
20.3
12.91
2.81
5.3
327.23
384.58
72.67
15.96
171.96
284.23
13.61
327.23
340.84
56.61
3.18 Return on Equity (RoE)

3.18.1 MSEDCL submitted that MERC (Terms and conditions of Tariff) Regulations 2005
allows a normative RoE of 16% p.a. on opening regulatory equity. Accordingly, it has
computed the return on equity at 16% of the average equity based on the opening
balance of equity of Rs. 5377 crore as per the audited accounts of FY 2011-12. The
RoE as computed is Rs. 860 crore.
3.18.2 MSEDCL further submitted that it has considered equity portion of capitalisation for
FY 2011-12 by considering the same ratio as that of equity contribution towards
Page 83 of 148
funding of capital expenditure undertaken in FY 2011-12. Based on this proportion

28.96% of the capitalisation has been considered as funded through equity.
3.18.3 As per the above method, Rs. 1854.79 crore was derived by MSEDCL as equity
portion of capitalisation in FY 2011-12, considering equity portion of capital
expenditure of Rs. 1818 crore. However, in reply to queries raised by the Commission
MSEDCL reported that the equity portion of capital expenditure was Rs. 2128 crore,
though no reconciliation was provided vis a vis its submission in the original Petition.
Due to lack of reconciliation the Commission has considered that the equity portion of
capitalisation as Rs. 1854.79 crore, which MSEDCL submitted in its Petition as well
as in the data forms annexed to the Petition.
3.18.4 The Commission has considered regulatory equity at the beginning of the year for FY
2011-12 as the regulatory equity approved by the Commission at the end of the year
for FY 2010-11. Equity portion of capitalisation for FY 2011-12 has been added and
equity portion of assets retired during the year has been reduced from the regulatory
equity at the beginning of the year to arrive at regulatory equity at the end of the year.
The return on equity approved for MSEDCL for FY 2011-12 is as given below.
Table 53: Return on equity for FY 2011-12 (Rs. crore)
Particulars
Regulatory equity at the
beginning of the year
Equity portion of capitalisation
(excluding grants and consumer
contribution)
Equity portion of assets retired
during the year
Regulatory equity at the end of
the year
Return on regulatory equity at
beginning of the year (@16%)
Return on equity portion of
capital expenditure capitalised
(@8%)
Total return on regulated
equity
Order in Case
No. 19 of 2012
Approved
after final
Truing up
Actual
4787
5,376.67
4,786.51
1039
1,854.79
1,854.79
0.13
5826
7,231.46
6,641.17
765.92
860.27
765.84
83.12
148.38
148.37
849.04
1008.65
914.21
3.19 Income Tax

3.19.1 In its present Petition, MSEDCL submitted that it has paid Rs. 12 crore towards
income tax in FY 2011-12.
3.19.2 In reply to a query raised by the Commission pertaining to submission of Income Tax
Page 84 of 148
payments and Tax Challan, MSEDCL did not submit any information regarding
payment of Income Tax and the Tax Challan. The Commission, in the absence of such
information, has not approved any income tax for FY 2011-12. MSEDCL is directed
to provide a detailed breakup of the tax paid including interest / penalty, if any, paid
on delayed payment of tax along with the tax challan or the income tax return for
Commissions analysis along with the MYT Petition.
3.19.3 The approval of Income Tax expenditure for FY 2011-12 would be based on the
submissions made by MSEDCL during MYT submissions. Accordingly, Income Tax
approved for FY 2011-12 is given as shown in table below.
Table 54: Income Tax for FY 2011-12
Order in Case
No. 19 of 2012
-
Particulars
Income Tax
(Rs. crore)
Actual
12
Approved after
final Truing up
-
3.20 Non Tariff Income

3.20.1 MSEDCL submitted that non-Tariff income for FY 2011-12 was Rs. 1,247 crore as
against Rs. 1,314 crore approved in the Order dated 16 August, 2012. It was observed
that, 70.49% of the Non Tariff income was on account of receipt of delayed payment
charges and interest on delayed payment charges. The Commission verified the same
from Schedule 22 of the audited accounts of MSEDCL and therefore approves Rs.
1,247 crore as non-Tariff income for FY 2011-12.
Table 55: Non-Tariff Income for FY 2011-12
(Rs. crore)
Particulars
As per Order in
Case No. 19 of
2012
Actual
Approved after
Truing up
Non-Tariff Income
1,314
1,247
1,247
3.21 Income from wheeling charges

3.21.1 MSEDCL submitted that the income from wheeling charges for FY 2011-12 was Rs.
13 crore. The Commission verified the same from Schedule- 21 of the audited
accounts of MSEDCL and found it to be accurate. Accordingly, the Commission
approves the same.
Table 56: Income from Wheeling Charges for FY 2011-12
Particulars
Income from Wheeling
Charges
(Rs. crore)
As per Order in
Case No. 19 of
2012
Actual
Approved after
Truing up
16.78
13
13
Page 85 of 148
3.22 Revenue from sale of power

3.22.1 MSEDCL submitted that the revenue from sale of power in FY 2011-12 was Rs.
39,221 crore as against Rs. 37,814 crore approved by the Commission in the Order
dated 16 August, 2012. MSEDCL submitted that it has excluded the revenue from
ZLS scheme as it was a revenue neutral scheme.
3.22.2 MSEDCL submitted that in the annual account, there is provision of unbilled revenue
of Rs. 1478 crore. Further, the unbilled revenue is the revenue which has accrued but
which has not been billed to the consumers as on 31 March 2012. The reconciliation
between the provisional revenue from sale of power and the audited revenue from sale
of power is as shown below.
Table 57: Details of unbilled revenue for FY 2011-12
Sr. No.
1
2
3
3.1
3.2
4
5
6
7
(Rs. crore)
Particulars
FY 2011-12
FY 2010-11
FAC for Last 3 Months (Jan to March for
2241
691
corresponding year
Energy Charges Recoverable (MERC Order
750
dated 15 June, 2012 Case No 21 of 2012)
Sundry Debtors accrued but due including
980
Additional Energy Charges (MERC Orders
764
dated 26 th July 2012)
Additional FAC
MERC Order 31 March, 2011 Case No 1 of
216
2011)
FAC Provision made for Mula Pravara
6
Unbilled Revenue Provision made by Field
1337
1186
Offices
Total Unbilled Revenue
4335
2857
Net Impact of Unbilled Revenue
1478
1628
3.22.3 MSEDCL submitted that the unbilled revenue is estimated on the basis of past trend
of revenue. Net impact of unbilled revenue is the difference between the total unbilled
revenue provided for at the year end and the total unbilled revenue of the previous
year reversed at the beginning of the year.
3.22.4 In reply to a query raised by the Commission regarding standby charges of Rs. 397
crore MSEDCL submitted that these charges pertain to the standby charges payable to
MSEDCL from the distribution licensees in the State, viz., TPC-Distribution, RELDistribution and BEST. These standby charges are on the basis of their noncoincident peak demand in accordance with ruling of the Commission in Order in
Page 86 of 148
Case No. 54 of 2005. Further, MSEDCL charges the Mumbai Licensees as per the
System Marginal Price and the same is applicable on the net supply between utilities
for the thirty-minute time block.
3.22.5 As per the audited accounts submitted by MSEDCL, the revenue is Rs. 39,555 crore,
which includes the revenue from ZLS sales and wheeling charges. Out of this
revenue, an amount of Rs. 321 crore was on account of revenue from sale of ZLS
power. The Commission, has therefore considered the net revenue, after deducting the
ZLS revenue and wheeling charges from the total revenue, to arrive at 39,221 crore.
The approved revenue from sale of power in FY 2011-12 is given below:
Table 58: Revenue from sale of power for FY 2011-12 (Rs. crore)
As per Order in
Approved after
Particulars
Case No. 19 of
Actual
Truing up
2012
Revenue from sale of
power
37,814
39,221
39,221
3.23 Sharing of Efficiency Gains & Losses for FY 2011-12 due to Controllable Factors
3.23.1 MSEDCL categorised all the expenditure as uncontrollable and hence, did not
compute the gains and losses for the controllable heads of expenditure. Further,
MSEDCL submitted that considering the inflationary increase in expenses and
ignoring practical and unforeseen expenses and terming the same under controllable
expenses and allowing only partial expenditure will have direct bearing on cash
flows of MSEDCL.
3.23.2 The Commission is of the view that all expenditure and revenue heads cannot be
considered as uncontrollable, which would mean that the licensee has no control over
any of its activities, particularly when this is a regulated business, and the actual
allowable costs have to be passed through to the consumers. The Commission has
considered certain controllable expenses and revenue for computing the sharing of
gains/ losses in accordance with the provisions of MERC (Terms and conditions of
Tariff) Regulations, 2005, as elaborated in the following paragraphs.
3.23.3 O&M Expenditure: The actual A&G expenditure has been greater than that
approved by the Commission in Order in Case No. 19 of 2012. The actual R&M
expenditure has been lower than that approved by the Commission in Order in Case
No. 19 of 2012. Not all of these expenses are uncontrollable and hence, there is
efficiency loss in case of A&G expenditure and efficiency gain in case of R&M
expenditure. These efficiency loss and gain are shared with the consumers in
accordance with the Tariff Regulations 2005. One third of the efficiency loss and gain
have been passed on to the consumers through Trued up ARR of FY 2011-12. The
Page 87 of 148
summary of sharing of efficiency gains/ loss is shown in table below.

Table 59: Efficiency gain/ (loss) due to O&M expenses for FY 2011-12 (Rs. crore)
Actual
Case No.
19 Order
Allowed as
per this
Order
Efficiency
Gains/
(losses)
Efficiency
Gains/
(losses)
shared with
consumers
A&G
expenses
444.03
290.00
290.00
(154.03)
(51.34)
R&M
expenses
552.88
569.00
569.00
16.12
5.37
Sharing of
efficiency
gains/
(losses)
3.23.4 Interest on working capital: The actual interest on working capital incurred by
MSEDCL during FY 2011-12 is Rs. 339.37 crore, as against 'Nil' normative interest
on working capital approved by the Commission. As stated earlier, the Commission
has considered the difference between the actual interest on working capital and
normative interest, amounting to Rs. 339.37 crore, as an efficiency loss and shared the
same between MSEDCL and the consumers in accordance with the Tariff
Regulations, 2005. Thus, Rs. 113.12 crore (1/3rd of Rs. 339.37 crore) has been passed
on to the consumers through increase in ARR. The balance amount of the efficiency
loss has to be absorbed by MSEDCL.
Table 60: Efficiency loss due to Interest on Working Capital for FY 2011-12 (Rs. crore)
Sharing of
efficiency
gains/
(losses)
Interest on
working
capital
Actual
Case No.
19 Order
Allowed
as per this
Order
Efficiency
Gains/
(losses)
Efficiency Gains/
(losses) shared
with consumers
339.37
(339.37)
(113.12)
3.23.5 Distribution loss achievement: MSEDCL reported the actual distribution loss in FY
2011-12 as 16.03 % against a target of 16.27 % as set by the Commission in Case No.
19 of 2012. The Commission has approved distribution loss for MSEDCL during FY
2011-12 at 16.03 %. Considering the target distribution loss of 16.27 %, there is an
over-achievement of 0.24%. Therefore, this efficiency gain has to be shared between
MSEDCL and the consumers in accordance with the MERC (Terms and conditions of
Tariff) Regulations, 2005.
3.23.6 In this Order, the Commission has computed the efficiency gain due to over
Page 88 of 148
achievement of distribution loss reduction based on the actual average billing rate of
MSEDCL in FY 2011-12, as shown in the table below:
Table 61: Efficiency gain due to lower distribution losses in FY 2011-12
Particulars
Normative distribution losses
Actual distribution losses
Actual energy input
Normative sales
Actual sales
Approved sales
Additional/ (lower) sales due to lower distribution loss
Average billing rate*
Efficiency gains to be retained with MSEDCL
Efficiency gains passed on to consumers
Unit
%
%
MU
MU
MU
MU
MU
Rs/ kWh
Rs. crore
Rs. crore
Rs. crore
Amount
16.27%
16.03%
95,433.00
79906.05
80,132.47
80,132.47
226.42
4.87
110.17
73.45
36.72
*Based on Revenue from sale of power as per Schedule 21 of Audited Accounts of MSEDCL
excluding standby charges, Miscellaneous charges from consumers, wheeling charges and theft
recovery income.
3.23.7 In accordance with the above analysis, the sharing of efficiency gains/ (losses) in
relation to A&G expenses, R&M expenses, Interest on Working Capital and Revenue
will be allowed to pass through to the consumers. The summary of efficiency gains/
losses is as below:
Table 62: Summary of Efficiency Gain/ (loss) to be considered in ARR for FY 2011-12 (Rs. crore)
Sharing of
efficiency gains/
(losses)
Case No.
19 Order
Actual
Allowed as
per this
Order
Efficiency
Gains/
(losses)
Efficiency Gains/
(losses) shared
with consumers
A&G expenses
444.03
290
290.00
(154.03)
(51.34)
R&M expenses
552.88
569
569.00
16.12
5.37
339.37
(339.37)
(113.12)
16.03%
16.27%
16.03%
110.17
36.72
(367.11)
(122.37)
Interest on working
capital
Distribution loss
achievement
Total addition to
ARR
3.24 Aggregate Revenue Requirement and Revenue Gap for FY 2011-12 after Truing
up
3.24.1 The Aggregate Revenue Requirement for FY 2011-12 after final Truing up is
Page 89 of 148
summarised in the Table below.

Table 63: Aggregate Revenue Requirement for FY 2011-12
Sr.
No.
1
2
2.1
2.2
2.3
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
19
20
21
22
23
24
25
26
27
Particulars
O&M Expenses
Employee Expenses
Administration & General Expenses
Repair & Maintenance Expenses
Depreciation including Advance against
Depreciation
Interest on long term loan capital
Interest on working capital and on
consumer security deposit
Provision for bad debts
Other expenses
Income tax
Transmission charges paid to transmission
licensees
Contribution to contingency reserves
Incentives/ discounts paid to consumers
Total Revenue Expenditure
Return on equity
Aggregate Revenue Requirement
Less: Non Tariff Income
Less: Income from wheeling charges
Less: Income from CSS
Add: RLC Refund
Add: ASC refund
Add: Prior period credit/ charges
Add: Sharing of efficiency loss
Aggregate Revenue Requirement from
Retail Tariff
Revenue from Sale of Power at Existing
Tariff with ZLS
Less: Revenue from ZLS power
Net Revenue
Revenue Gap/ (surplus)
(Rs. crore)
Order in
Case No.
19 of 2012
31,116.00
3,063.00
2,204.00
290.00
569.00
32,702.09
3,295.43
2,298.53
444.03
552.88
Approved
after final
Truing up
32,702.09
3,157.53
2,298.53
290.00
569.00
1,014.09
892.76
892.76
802.65
845.15
836.16
317.23
708.80
287.86
567.21
9.00
-
593.33
28.11
12.00
588.50
19.38
-
2,200.00
2,200.10
2,200.10
48.00
150.00
39,287.18
849.04
40,136.22
1,314.00
16.78
4.00
443.00
-
48.00
220.95
41,546.71
1,008.65
42,555.36
1,246.88
12.95
5.00
419.22
3.80
72.69
-
220.78
40,905.15
914.21
41,819.36
1,246.88
12.95
5.00
419.22
3.80
56.61
122.37
39,244.44
41,786.24
41,156.54
38,135.00
39,541.56
39,541.56
321.00
37,814.00
1,430.44
321.00
39,220.56
2,565.68
321.00
39,220.56
1,935.98
Actual
3.24.2 Therefore, the Commission approves Rs. 1,935.98 crore as revenue gap after Final
Truing up for FY 2011-12.
Page 90 of 148
TRUE UP FOR FY 2012-13

MSEDCL in its Petition has sought approval for True up for FY 2012-13 based on the
actual expenditure and revenue for FY 2012-13 as per the Audited Accounts. In this
Section, the Commission has analysed all the elements of actual revenue and expenses
for FY 2012-13, and has undertaken the Truing up of expenses and revenue after due
prudence check. Further, the Commission has approved the sharing of gains and
losses between MSEDCL and the consumers on account of controllable factors, in
accordance with Regulation 19 of the Tariff Regulations, 2005.
4.1
Summary of MSEDCL True up for FY 2012-13
4.1.1 MSEDCL has submitted Rs. 5,809 crore as the Revenue Gap for FY 2012-13. The
Commission noted that MSEDCL has included Rs. 1,483 crore approved by the
Commission in Order in Case No. 43 of 2012 as a part of the approved ARR for FY
2012-13. The Commission had excluded this amount of Rs. 1,483 crore while
approving the revenue of Rs. 48,926 crore and consolidated gap of Rs. 6,921 crore in
the ARR Order in Case No. 19 of 2012 for FY 2012-13 since it was allowed to be
recovered separately in six equal instalments. The Commission raised a query to
MSEDCL to explain if the actual revenue of Rs. 44,280 crore for FY 2012-13
includes the revenue of Rs. 1,483 crore. MSEDCL in its reply submitted that since the
approved amount of Rs. 1,483 crore was pertaining to FY 2011-12, the said amount is
considered in revenue of FY 2011-12 and the ARR for FY 2012-13 has not been
reduced. Accordingly, the ARR for FY 2012-13 stands at Rs. 50,409 crore.
Table 64: Aggregate Revenue Requirement as submitted by MSEDCL for FY 2012-13
(Rs. crore)
S.No. Particulars
1
2
2.1
2.2
2.3
3
4
5
6
7
8

Operation & Maintenance Expenses
Employee Expenses
Administration & General Expenses
Repair & Maintenance Expenses
Depreciation, including advance
against depreciation
Interest on Long-term Loan Capital
Interest on Working Capital and on
consumer security deposits
Provisions for Bad Debts
Other Expenses
Income Tax
ARR Order
(Case No.
19 of 2012)
Actual
Deviation
37,238
35,730
(1,508)
3,363
2,438
314
611
4,193
3,121
462
611
830
683
148
0
1,309
1,235
(74)
1,127
1,266
139
559
717
158
756
9
0
684
19
65
(72)
10
65
Page 91 of 148
S.No. Particulars
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
4.2
Transmission Charges paid to

Transmission Licensee
Contribution to contingency reserves
Incentives/Discounts
Total Revenue Expenditure
Return on Equity Capital
Less: Non Tariff Income
Less: Income from wheeling charges
Less: Income from Open Access
Charges
Add: Net Prior Period Credit /
Charges
Add: RLC Refund (Non PD
Consumers)
Add: RLC Refund (PD Consumers)
Add: ASC Refund
Capitalisaiton of FY 2008-09
Additional impact of Honble ATE
Order
Unrecovered gap approved in Case
No. 100 of 2011
Provisional Amount of sharing gain Case No. 21 of 2012
Approved Gap of FY 2010-11
Approved Gap of FY 2011-12
from Retail Tariff
ARR Order
(Case No.
19 of 2012)
Actual
Deviation
3,105
3,128
23
63
157
47,686
989
48,675
(1,379)
(18)
230
47,268
1,234
48,502
(1,430)
(39)
(63)
73
(418)
245
(173)
(51)
(21)
(9)
(10)
(1)
133
133
500
462
(38)
166
0
228
0
(2)
228
(166)
(2)
-
427
427
405
405
750
750
(767)
1,430
(767)
1,430
50,409
50,089
(320)
50,409
-
44,280
5,809
(6,129)
5,809
Revenue from existing tariff

Revenue Gap
Sales for FY 2012-13
4.2.1 MSEDCL submitted that during FY 2012-13 total sales in its licensed area of supply
were 83,488 MU including energy sold to consumers in franchisee area. It also
submitted month-wise and category-wise break-up of sales for its entire licensed area.
However, it submitted that if sales to franchisees are considered at input level then the
total sales would be 85,218 MU.
Page 92 of 148
Table 65: Sales and Revenue for FY 2012-13 as submitted by MSEDCL
Category
Residential
Commercial (HT + LT)
HT-Industrial
LT-Industrial (Including
Powerloom)
PWW
Street Light
Agriculture
Railways
Group Hsg Soc
Public Service (HT + LT)
Others
Sales to DF at Input
Standby Charges
Additional FAC (as per Case
No. 43 of 2012)
Total Sales for FY 2012-13
Approved in ARR
Revenue
MU
(Rs.
crore)
15,149
7,408
4,004
4,158
28,435
20,138*
Actual
14,439
5,625
25,253
Revenue
(Rs.
crore)
7,230
5,257
15,611
MU
5,347
3,842
5,002
3,538
1,727
831
22,054
1,460
328
2,094
75
8,052
817
388
5,327
1,141
178
1,576
115
3,441
396
1,821
1,159
20,891
1,477
251
409
1,287
7,604
795
555
5,366
1,150
156
367
222
3,613
419
85,218
44,280
1,483
89,556
50,409
*Net of LF / PF Incentive and EHV Rebate
4.2.2 In response to Commissions query on the computation of unmetered sales, MSEDCL

submitted that index of unmetered agricultural consumption is determined based on
consumption recorded by metered agricultural consumers who have normal
progressive status of meter reading, i.e. excluding meters with zero or negative
consumption. For the metered consumer, the maximum consumption was capped at
224 kWh/HP/month based on a maximum of 10 hours of supply per day and 300 days
of operation per annum. Based on the submissions of MSEDCL, the Commission is
inclined to accept the submission of MSEDCL in regard to unmetered agricultural
sales for FY 2012-13.
4.2.3 However, it is to be noted that MSEDCL, in earlier proceedings before the
Commission, has itself submitted that due to several constraints it is unable to
properly determine the index for unmetered agricultural sales. The Commission has
directed MSEDCL in its previous Orders in Case No. 100 of 2011 and Case No. 19 of
2012 to institute a study to determine the correct specific consumption for unmetered
agricultural connections based on consumption of metered connections. As per the
direction in Order in Case No. 19 of 2012, MSEDCL was to submit the report
containing the findings of such study to the Commission before December 30, 2012.
MSEDCL has complied with this directive and submitted a report containing the
findings of such study.
Page 93 of 148
4.2.4 The Commission in the Interim Order in Case No. 38 of 2014 dated March 3, 2014
directed MSEDCL to submit a roadmap for completion of metering of unmetered
agricultural consumers within sixty (60) days from the date of the Order. MSEDCL
submitted the roadmap containing time bound implementation plan with milestones
for completion of metering on May 16, 2014. In the letter MSEDCL submitted that it
is releasing new agricultural connections on metered basis only. MSEDCL also
provided the following status of metering:
Table 66: Statistics of Metered and Unmetered Agricultural consumers as on March 2014
Particulars
Nos
Total number of agricultural consumers

No. of metered agricultural consumers
No. of Unmetered agricultural consumers
% Metering of Agricultural consumers
3,602,262
2,003,174
1,599,088
56%
4.2.5 With regards to roadmap of metering 16 lakh unmetered agricultural consumers

MSEDCL submitted its plan to complete the metering on a feeder wise basis.
Table 67: Bifurcation of feeders having agricultural consumers
Particulars
Nos
Total Ag feeders as per MSEDCL

Ag separated feeders
Ag separated feeders with SDT
Single Phasing feeders
LIS and Other feeders
6,980
1,431
2,448
2,997
104
4.2.6 In the initial phase MSEDCL has proposed to cover 100 Ag separated feeders in high
agricultural potential circles at a per-unit cost of Rs. 4,330 per consumer. Thereafter
additional 100 Ag separated feeders would be selected as shown below.
Table 68: MSEDCL Roadmap for metering unmetered agricultural consumers
Phase
1st Phase
2nd Phase
No. of Ag
Separated feeders
100
Date of completion of Metering

December 31, 2014
100
March 31, 2015
300
December 31, 2015
4.2.7 Metering of remaining unmetered agricultural consumers will be planned based on the
performance of the energy meters in terms of meter reading, billing, etc.
4.2.8 The Commission has noted MSEDCLs submission in this regard. The Commission
observes that in a period of two years MSEDCL has proposed to cover only 500
Page 94 of 148
separated Ag feeders out of total 6980 feeders. Under this plan it will take MSEDCL a
very long time to complete the metering. MSEDCL needs to significantly increase its
efforts for metering all the unmetered agricultural consumers. Therefore, the
Commission directs MSEDCL to re-organise its plan for implementation in a shorter
time and accordingly submit the metering plan along with MYT Petition.
4.2.9 For the purpose of Truing up of sales for FY 2012-13 the Commission is accepting
MSEDCLs submission for the time being. However, after receipt of the report on
correct specific consumption for unmetered agricultural consumers, the Commission
may revisit the unmetered agricultural sales of MSEDCL for FY 2012-13.
Accordingly, the Commission may re-determine the sales of MSEDCL for FY 201213, if necessary at a later stage. In case of such re-determination, distribution loss
computation of MSEDCL may also undergo change and accordingly the computation
of sharing of losses and gains may change for FY 2012-13. However, the impact of
such change will not carry any carrying cost either on MSEDCL or on consumers, as
the case may be.
4.3
Energy balance and distribution loss
4.3.1 In the earlier paragraphs the Commission has approved total retail sales of 85,218 MU
in FY 2012-13 which includes sales to Distribution franchisees at input level.
However while calculating energy balance of MSEDCL as a whole, the sale to the
consumers of the Distribution Franchisee area have been considered rather than sales
at input level. The following table shows the computation of energy available for sale:
Table 69: Energy Sales for FY 2012-13
Particulars
Energy Sales by MSEDCL for FY 2012-13
Less: Energy sales to Distribution franchisee at Input point
Add: Energy sales of Distribution franchisee (category wise)
Total energy available for sale
MU
85,218
7,604
5,874
83,488
4.3.2 MSEDCL submitted that its actual distribution loss for FY 2012-13 had been 14.67%
against 15.77% approved in its ARR Order in Case No. 19 of 2012.
4.3.3 MSEDCL made the following submissions with respect to computation of energy
balance for FY 2012-13:
Classification of power purchase within and outside Maharashtra: MSEDCL
submitted that during the FY 2012-13 power purchases outside Maharashtra includes
the central generation stations of NTPC, NPCIL KAPP, Sardar Sarovar Project, Pench
and Coastal Gujarat UMPP. MSEDCL submitted that from FY 2012-13 it has been
buying the power from Traders at Maharashtra Transmission Periphery only. With
regards Other Power on MSEDCL network MSEDCL clarified that it relates to the
power which has been wheeled over the State transmission network and accounted for
Page 95 of 148
by SLDC as input to the State. In Case No. 19 of 2012, while approving the ARR of
MSEDCL the Commission had observed that although MSEDCL included the impact
of injection of Open Access power in the energy balance, it did not account for the
drawal of the same. MSEDCL submitted that this is the energy accounted for by the
SLDC as input energy to the State of Maharashtra which has been wheeled over the
T&D network of MSEDCL for Open Access consumers. The Commission raised a
query under the current petition and asked MSEDCL to submit the details of drawal
of energy by the open access consumers. MSEDCL in its reply dated 3 May, 2014
submitted that the reply to this query would be submitted subsequently. However, the
Commission did not receive any reply of MSEDCL in this regard.
4.3.4 Inter-state transmission losses: MSEDCL reiterated that it gets actual energy reading
only at three points; (a) at the generation bus bar; (b) at the T<>D interface
(distribution periphery); and (c) at the metered sales made to consumers. All others
are derived numbers. MSEDCL submitted that it procures power from Central
Generating Stations located in Western, Eastern and Northern Region and it would be
difficult to differentiate power at Transmission periphery. Additionally the respective
RLDCs give the Pooled transmission losses for every week for a particular regional
grid and the average of Pooled transmission losses for 52 weeks of a particular
regional grid would give incorrect losses due to wide variation in weekly losses.
MSEDCL also submitted it considers metered energy at Distribution periphery and
metered sales at consumer end and calculates the Distribution Loss of MSEDCL. The
losses submitted by MSETCL are taken as Intra State Loss and balance considered as
inter-state loss. Thus, interstate loss is a derived figure.
4.3.5 Intra-state transmission losses: The Commission observes that MSEDCL has
considered intra-state transmission loss in FY 2012-13 at 4.24% as approved in InSTS
Order dated 21 May, 2012 in Case No. 51 of 2012.
2012-13 is presented in the table below. For the purpose of Truing up for FY 2012-13
the Commission is accepting MSEDCLs energy balance submission for the time
being. However, after receipt of MSEDCLs reply the Commission may revisit the
energy balance of MSEDCL for FY 2012-13. MSEDCL is directed to submit the
replies raised by the Commission in relation to energy accounting and energy balance,
along with its MYT Petition. Accordingly, the Commission may re-determine the
distribution loss of MSEDCL for FY 2012-13, if necessary at a later stage. In case of
such re-determination the computation of sharing of losses and gains will change for
FY 2012-13. However, the impact of such change will not carry any carrying cost
either on MSEDCL or on consumers, as the case may be.
4.3.7 MSEDCL has achieved a distribution loss of 14.67% as compared to the target loss of
15.77%. The efficiency gain computation for distribution loss has been presented in
the Section 4.23.
Page 96 of 148
4.3.8 The Commission observes that MSEDCL has considered intra-state transmission loss
in FY 2012-13 at 4.24%. However, the SLDCs report on State grid losses for FY
2012-13 shows the same at 4.12%. The Commission has considered the loss level for
intra-state transmission as per SLDCs report. Accordingly, the inter-state loss has
been worked out to 4.70% based on the energy balance for FY 2012-13.
2012-13 is presented in the table below.
Table 70: Energy Balance Statement for FY 2012-13 as submitted by MSEDCL and approved by the
Commission
Sr.
No.
1
a
b
c
d
e
f
g
h
2
a
b
c
3
4
5
a
b
c
Particulars
Within Maharashtra
Purchase from MSPGCL
NPCIL Tarapur
Purchases from other sources &
Medium Term
ZLS
Traders
IBSM + FBSM
Other Power on MSEDCL Network
UI
Total Purchase within Maharashtra
Outside Maharashtra
Central Generating Station + NPCIL +
UMPP + Case I + Sardar Sarovar +
Pench + Banking
Traders
Zero Load Shedding
Total Purchase outside Maharashtra
Inter-State Transmission Loss
Total Purchase at Maharashtra
Periphery
Total Power Purchase Payable
Total Power Available at
Transmission Periphery
Energy Available at Distribution
periphery
Intra-state Loss
injected from 33 kV and above
injected and drawn at 33 kv
Units
2012-13
Approved
Actual
after Final
Truing up
MU
MU
43,280
3,840
43,280
3,840
MU
17,528
17,528
MU
MU
MU
MU
MU
MU
6,312
26
3,804
74,790
6,312
26
3,804
74,790
MU
28,082
28,082
MU
MU
MU
%
28,082
4.25%
28,082
4.70%
MU
26,888
26,761
MU
102,872
99,068
MU
101,678
101,551
4.24%
4.12%
MU
97,367
97,367
MU
479
479
Page 97 of 148
Sr.
No.
d
e
f
6
4.4
Particulars
Units

Distribution Losses
Distribution Losses
Energy Available for Sale
2012-13
Approved
Actual
after Final
Truing up
MU
%
MU
MU
97,846
14.67%
14,358
83,488
97,846
14.67%
14,358
83,488
Power purchase cost
4.4.1 MSEDCL submitted that the total power purchase cost for FY 2012-13 was Rs.
35,730 crore. The source-wise break-up of power purchase and power purchase costs
as submitted by MSEDCL is given in the table given below.
Table 71: Source-wise break-up of power purchase cost for FY 2012-13
Particulars
MSPGCL
NTPC
KSTPS
KSTPS III
VSTP I
VSTP II
VSTP III
VSTP IV
Kawas
Gandhar
FSTPP-EP
KhSTPS-I
KhSTPS-II
TSTPS
Sipat TPS 2
Sipat TPS 1
Mauda
Total NTPC
NPCIL
KAPP
TAPP 1&2
TAPP 3&4
Total NPCIL
SSP
Pench
Net units sent out to

MSEDCL (MU)
43,280
Total cost
(Rs. crore)
17,006
Per unit rate

(Rs./ kWh)
3.93
5,150
1,092
3,499
2,780
2,463
28
1,040
1,218
859
3,307
2,033
1
23,471
907
275
766
608
621
8
399
471
3
2
286
2
917
532
2
5,799
1.76
2.52
2.19
2.19
2.52
2.77
3.83
3.87
2.77
2.62
14.02
2.47
1,084
728
3,113
4,924
974
108
261
73
904
1,238
200
22
2.41
1.00
2.90
2.51
2.05
2.05
3.33
Page 98 of 148
Net units sent out to

MSEDCL (MU)
26
37
47
4,904
6,312
3,064
2,072
2,446
123
Particulars
FBSM
Dodson I
Dodson II
RGPPL
Trading Company
Medium Term Power
IPP JSW
CGPL Mundra
Adani Power
Power Grid
Reactive Energy Charge
Total PP
Non Conv. Energy Excl
CPP
CPP
Total PP including NCE
Per unit rate

(Rs./ kWh)
36.18
2.41
3.65
4.35
3.81
4.13
3.28
2.41
1.68
91,787
Total cost
(Rs. crore)
94
9
17
2,133
2,404
1,266
680
589
21
991
12
32,479
5,483
2,390
4.36
1,798
99,068
862
35,730
4.79
3.61
3.54
4.4.2 MSEDCL submitted a comparison with the approved power purchase cost for the FY
2012-13 as per Order in Case No. 19 of 2012. The Commission noted that the
quantum of power purchase is lesser by 9.8% as compared to reduction in sales by
4.8%. Additionally the power purchase cost has reduced by 4% as compared to the
approved cost.
Table 72: Comparison of Power Purchase for FY 2012-13
Approved
Actual
Sources
Quantum
(MU)
MSPGCL
NTPC
NPCIL
SSP
Pench
RGPPL
Dodson
Traders
NCE
CPP
Medium
Term
(JSW and
Adani)
47,663
23,127
5,333
990
72
5,256
131
10,675
7,744
900
14,986
5,349
1,308
203
15
3,053
24
4,804
3,496
383
43,280
23,471
4,924
974
108
4,904
84
6,312
5,483
1,798
Cost
(in Rs.
crore)
17,006
5,799
1,238
200
22
2,133
26
2,404
2,390
862
3,141
1,288
3,064
1,266
Cost
(in Rs. crore)
Quantum
(MU)
%
change
in MU
%
change
in Cost
-9.2%
1.5%
-7.7%
-1.6%
50.0%
-6.7%
-35.9%
-40.9%
-29.2%
99.8%
13.5%
8.4%
-5.4%
-1.5%
46.7%
-30.1%
8.3%
-50.0%
-31.6%
125.1%
-2.5%
-1.7%
Page 99 of 148
Approved
Sources
IPPs
(JSW,
CGPL and
Adani)
Powergrid
and Other
Charges
UI and
FBSM
Total
Power
Purchase
Quantum
(MU)
Actual
Cost
(in Rs. crore)
4,815
Quantum
(MU)
1,370
4,641
960
%
change
in MU
Cost
(in Rs.
crore)
1,289
-3.6%
1,004
26
94
109,847
37,238
99,068
35,730
%
change
in Cost
-5.9%
4.6%
-9.8%
-4.0%
4.4.3 MSEDCL submitted the following reasons for the major variation in source wise
power purchase cost:
4.4.4 MSPGCL: MSEDCL submitted that it has made provisioning towards the impact of
the Orders in Case No. 28, 44 and 95 of 2013 for the costs pertaining to FY 2012-13.
Additionally Rs. 120 crore towards Ghatghar O&M costs has been included. Further
MSEDCL submitted that during FY 2012-13, due to shut down of Parli Plant there
was lower generation from MSPGCL. Further, due to delay in commissioning of
Bhusawal Unit 4 and 5, lower energy was received from MSPGCL resulting into
deviation in power purchase quantum.
4.4.5 NTPC: MSEDCL submitted that due to higher availability of power from Korba U3
and Sipat I, there was increase in power purchase quantum from NTPC thereby
resulting in deviation in the power purchase quantum as well as cost of NTPC power.
Further, due to additional supplementary bills and other charges, the cost of power
from NTPC has increased.
4.4.6 RGPPL: MSEDCL submitted that Annual Fixed Charges (AFC) are paid to RGPPL
on a pro-rata basis considering the actual availability vis--vis target availability. Due
to this, there has been reduction of Capacity Charges. However, RGPPL has
approached CERC for revision in normative annual plant availability factor for full
fixed cost recovery till the supply of KG-D6 gas is fully restored to the
allocated/contracted quantity which is still pending with CERC.
4.4.7 Captive Power Plants: MSEDCL submitted that increase in Open Access transactions
and purchase of over injection of power by MSEDCL has led to an increase in
quantum by about 900 MU and cost by around Rs. 480 crore.
4.4.8
Non Conventional Energy: MSEDCL submitted that in FY 2012-13, there was a

reduction in quantum of power purchase from NCE sources due to delay in issuance
of wind permissions on account of various litigations. Draught during the crushing
Page 100 of 148
season has resulted in lesser co-generation as majority of biomass plants were non
operative. Also water shortage resulted in lower generation from small hydro power
plants.
4.4.9 The Commission verified sample power purchase bills of RGPPL for June 2012,
September 2012 and December 2012, all NTPC stations for March 2013, bills of June
2012, September 2012, October 2012 and January 2013 for JSW, bills of June 2012,
September 2012, December 2012 and March 2013 for CGPL, NPCIL bills for June
2012. MSEDCL also submitted the supplementary IT bills of FY 2012-13 for NPCIL
stations for the Commissions verification.
4.4.10 The Commission in the ARR Order for FY 2012-13 in Case No. 19 of 2012 had
determined the average rate of short term power purchase as Rs. 4.5 per kWh.
MSEDCL submitted that due to higher availability from Korba U3 and Sipat I, there
was lower requirement of power from Traders than approved power by MERC. Also
the average rate of short term power procured by MSEDCL is Rs.3.81 per kWh. The
average rate of bilaterally traded power was Rs. 4.33 per kWh and the average rate of
power traded at the power exchange was Rs. 3.67 per kWh as per the Report on
Short-term Power market in India: 2012-13 published by the Honble CERC. The
Commission observes that this rate is lower than the average rate of bilaterally traded
power for FY 2012-13. Therefore, the Commission finds that the cost of short term
power procured by MSEDCL were within acceptable limits.
4.5
Renewable Purchase Obligation for FY 2012-13
4.5.1 As per the MERC (Renewable Purchase Obligation, its Compliance and
implementation of REC framework) Regulations, 2010 (RPO Regulations) notified on
June 7, 2010, each distribution licensee is required to meet 8% of its requirement
through renewable sources for FY 2012-13, including 0.25% through solar sources.
4.5.2 The Commission noted that MSEDCL had not submitted any details of RPO in its
Petition and a data gap was raised for the same. MSEDCL in its reply dated May 5,
2014 submitted the following details with regards to its renewable purchase obligation
for FY 2012-13:
Table 73: MSEDCL submission towards Renewable Purchase Obligation for FY 2012-13 (in MU)
Year
Cogen,
Biomass
Hydro
Wind
Total RE
%
RPO
Target
Gross
Cons
%RPO
achieved
2010-11
991.523
1306.19
2401.8
4928.1
5.75
85357
5.77
2011-12
1328.99
1526.29
3610.2
6779.1
6.75
94967
7.14
2012-13
1542.45
1363.8
3636
6542.3
7.75
93265
7.02
4.5.3 MSEDCL also submitted that vide Commissions Order dated March 12, 2014 in
Page 101 of 148
Case No. 180 of 2013 it was permitted to carry forward the surplus NCE procurement
in 2010-11 (18.37 MU) and FY 2011-12 (368.15 MU) for meeting the RPO target of
2012-13. Therefore the effective RPO target achieved for FY 2012-13 is 7.43%.
4.5.4 The Commission has dealt with RPO targets of MSEDCL for FY 2012-13 in Order in
Case No. 180 of 2013 dated 12 March, 2014. As per the said Order MSEDCL is
required to fulfil its solar RPO target cumulatively by FY 2015-16, Mini/ Micro
Hydro target cumulatively by FY 2015-16 and meet its Non-Solar RPO shortfall for
FY 2012-13 in FY 2013-14 on cumulative basis.
4.5.5 The Commission has considered the power purchase cost as per the Audited Accounts
of MSEDCL. The Commission approves the net power purchase expenses of Rs.
35,730 crore as submitted by MSEDCL.
Table 74: Power Purchase Expense for FY 2012-13
(Rs. crore)
Particulars
Power Purchase Cost
4.6
ARR Order
(Case No. 19
of 2012)
Actual
Allowed after
Truing up
37,238
35,730
35,730
Transmission charges and SLDC charges for FY 2012-13
4.6.1 MSDECL submitted that it has paid Rs. 3,128 crore as Transmission Charges to
MSETCL as against Rs. 3,105 crore approved in the ARR Order. The Commission
verified this amount in Schedule-23 of the Audited Accounts of MSEDCL and noted
Rs. 4,120 crore as transmission charges. Out of this MSEDCL has claimed Rs. 991
crore as PGCIL charges under power purchase expenses. The net amount of Rs. 3,128
crore is approved by the Commission for Truing up of FY 2012-13.
(Rs. crore)
Particulars
Transmission Charges
4.7
ARR Order
(Case No. 19
of 2012)
3,105
Actual
3,128
Allowed after
Truing up
3,128
O&M expenses for FY 2012-13
4.7.1 Operation and maintenance (O&M) expenses comprise employee expenses, A&G
expenses and R&M expenses. MSEDCL, in its Petition, has submitted that the actual
net O&M expenses for FY 2012-13 were Rs. 4,193 crore (net of capitalisation),
comprising employee expenses of Rs. 3,121 crore, A&G expenses of Rs. 462 crore
and R&M expenses of Rs. 611 crore.
4.7.2 The Commission while approving the O&M expenses of Rs. 3,363 crore for FY 201213 had applied the principle of approving O&M expenditure based on inflation
indices for FY 2011-12 and FY 2012-13. It may be reiterated here that while Truing
Page 102 of 148
up the O&M expenses for the past years the Commission has always considered the
submissions of MSEDCL and approved reasonable and justifiable expenses as per
Tariff Regulations, 2005. MSEDCLs submission and Commissions ruling on each
sub-head of O&M expenses are given below.
Employee Expenses
4.7.3 MSEDCL submitted that the net employee expenses in FY 2012-13 were Rs. 3,121
crore as against Rs. 2,438 crore approved by the Commission in the Order dated 16
August, 2012 in Case No. 19 of 2012.
4.7.4 The Commission verified the employee expenses from Schedule 24 of the Audited
accounts for FY 2012-13 and found them to be accurate.
4.7.5 The Commission noted that gross employee expenses have increased by 25% over
actual expenses of FY 2011-12. Substantial increase in leave encashment, gratuity in
addition to dearness allowance, conveyance allowance has led to a sharp increase in
employee expenses. The Commission asked MSEDCL to justify such steep increases
in the sub-heads in which the increase was substantially high.
Table 76: Analysis of Employee Expenses
Actual Expenses (Rs. in crore)
Year on year increase
200910
201011
201112
201213
201011
201112
201213
1,054
1,201
1,212
1,195
14%
1%
-1%
Dearness Allowance (DA)
391
429
631
777
10%
47%
23%
House rent allowance
103
142
141
136
38%
0%
-4%
Conveyance allowance
12
15
20
100%
25%
30%
Leave travel allowance
0%
4%
38%
Earned leave encashment
38
157
203
579
313%
29%
185%
Other allowances
75
84
83
84
12%
-1%
0%
Medical reimbursement
21
21
22
24
0%
4%
8%
Overtime payment
19
23
26
26
21%
13%
2%
Bonus/Ex-Gratia payments
30
35
41
48
17%
17%
17%
Staff welfare expenses
10
14
17
18
40%
22%
3%
18
-100%
NA
996%
-75%
3%
-16%
178
198
208
225
11%
5%
8%
0%
-35%
-17%
Particulars
Basic Salary
VRS / Retrenchment
expenses
Payment under Workmen's
Compensation Act
Provident fund contribution
Pension payments
Page 103 of 148
200910
201011
201112
201213
201011
201112
201213
120
261
334
529
118%
28%
58%
27
238%
-72%
12%
Gross Employee Expenses
2,077
2,607
2,944
3,676
26%
13%
25%
Less: Expenses capitalized
238
562
645
555
136%
15%
-14%
1,839
2,045
2,299
3,121
11%
12%
36%
Particulars
Gratuity payment
Others
Net employee expenses
4.7.6 MSEDCL in its letter dated 15 March, 2014 submitted detailed explanation for the
increase in operation and maintenance expenses. With regards the increase of 23% in
dearness allowance MSEDCL claimed that this was on account of change in the rates
of Dearness Allowance from 58% in FY 2011-12 to 80%. The Commission noted the
increase of 15% in the applicable rate of dearness allowance and 23% increase in
absolute terms in dearness allowance during FY 2011-12 and FY 2012-13 as shown
below.
Table 77: Applicable rates of Dearness Allowance
Particulars
FY 2011-12
FY 2012-13
April to June (3 months)
51%
65%
July to December (6 months)
58%
72%
January to March (3 months)
65%
80%
Average DA rate
58%
72.3%
4.7.7 For the increase in leave encashment MSEDCL submitted that benefit to employees is
provided via leave encashment during service period and leave encashment on
retirement. During FY 2012-13 MSEDCL incurred Rs. 579 crore as leave encashment
which includes:
a) Rs. 67.26 crore payment against earned leave encashment during service period.
MSEDCL stated that the block year for leave encashment is 2012-14 and
employees can encash leave only once in two years and generally in the
beginning of the block year there is increased encashment.
b) Rs. 154.67 crore payment towards retired employees during FY 2012-13.
MSEDCL submitted that during In the FY 2011-12 the number of employees
retired was 3711 whereas it was 4687 in FY 2012-13. Hence, there is increase in
FY 2012-13.
c) Rs. 357.32 crore against provision for leave encashment based on actuarial
valuation.
Page 104 of 148
4.7.8 MSEDCL in its additional submission provided the breakup between gratuity
payment made to retired employees and provision for gratuity. Of the total gratuity
expense of Rs. 529 crore, Rs. 292.92 was incurred toward payment to retired
employees during the year and Rs. 235.69 crore was created as provision based on
actuarial valuation. MSEDCL further submitted that in the FY 2011-12 the number of
employees retired was 3,711 whereas it was 4,687 in FY 2012-13. Hence, there is
increase in FY 2012-13.
4.7.9 MSEDCL also claimed that increase in dearness allowance affects the computation of
provision for gratuity and leave encashment leading to increase in these components.
4.7.10 The Commission accepts MSEDCLs submissions with respect to increase in the
various sub-heads of employee expenses. Accordingly the Commission approves the
gross employee expenses for FY 2012-13 amounting to Rs. 3,676 crore as submitted
by MSEDCL.
4.7.11 MSEDCL submitted that it has capitalised employee expenses to the extent of Rs. 555
crore in FY 2012-13. MSEDCL submitted that capitalisation of employee expenses is
directly related with capital expenditure incurred during the year. Any increase in
employee expenses will result into higher capitalisation. Capital expenditure incurred
during the FY 2012-13 is less as compared to that of FY 2011-12, therefore less
expenses were capitalised in FY 2012-13. The Commission approves the capitalised
employee expenses of Rs. 555 crore as submitted by MSEDCL.
4.7.12 The Commission thus approves the net employee expenses of Rs. 3,121 crore for FY
2012-13, as submitted by MSEDCL.
Table 78: Employee Expense for FY 2012-13
(Rs. crore)
Particulars
Gross Employee expenses
Less: Employee expense capitalised
Net Employee expenses
ARR Order
(Case No. 19
of 2012)
Allowed after
Truing up
Actual
3,107
3,676
3,676
669
555
555
2,438
3,121
3,121
Administrative and General Expenses

4.7.13 MSEDCL submitted that the net A&G expenses in FY 2012-13 were Rs. 462 crore as
against Rs. 314 crore approved by the Commission in the Order dated 16, August
2012 in Case No. 19 of 2012.
4.7.14 The Commission verified the A&G expenses from Schedule 26 of the Audited
accounts for FY 2012-13 and found them to be accurate. The Commission found that
the expenses under some sub-heads under the A&G expenses had increased
substantially as compared to that incurred in FY 2011-12. The analysis of the year-onOrder in Case No 38 of 2014
Page 105 of 148
year increase in various sub-heads of A&G Expenses between FY 2009-10 and FY

2012-13 is given in the table below. The Commission asked MSEDCL to justify the
variation in the sub-heads in which the increase was substantially high.
Table 79: Analysis of Employee Expenses
Particulars
200910
201011
201112
201213
201011
201112
201213
Rent rates & taxes
36
46
41
50
28%
-11%
22%
Insurance
NA
NA
17%
Telephone & postage, etc.
19
18
22
21
-5%
21%
-2%
Legal charges & audit fee
19
12
14
15
-37%
15%
8%
Professional,
technical fee
12
10
14
11
-17%
43%
-25%
Conveyance & travel
19
18
17
22
-5%
-3%
24%
Electricity charges
13
16
106
55
23%
564%
-48%
Water charges
33%
-3%
10%
Security arrangements
30
38
44
51
27%
17%
16%
Fees & subscription
18
19
37
6%
96%
-88%
Books & periodicals
NA
NA
41%
Computer stationery
44
53
58
81
20%
10%
38%
Printing & stationery
17
16
12
12
-6%
-22%
-4%
Advertisements
125%
-32%
-12%
NA
NA
9%
11
13%
3%
14%
21
23
27
29
10%
18%
8%
57
66
66
91
16%
0%
38%
Freight
0%
-57%
26%
Bank charges for collection

from consumers
47
48
49
56
2%
2%
15%
Miscellaneous expenses
0%
15%
-51%
Office expenses
10
11
11
25%
9%
3%
Others
13
23
25
20
77%
9%
-21%
consultancy,
License Fee and other

related fee
Vehicle running expenses
truck delivery van
Vehicle hiring expenses
truck / delivery van
Outsourcing of metering
and billing system
Page 106 of 148
Particulars
200910
201011
201112
201213
201011
201112
201213
Gross A&G expenses
390
440
567
552
13%
29%
-3%
Less: expenses capitalized
88
208
123
90
136%
-41%
-26%
Net A&G Expenses
302
232
444
462
-23%
91%
4%
4.7.15 MSEDCL submitted that the Commission had approved net A&G expenses by
escalating the FY 2011-12 expenses by 8.27% which was not reflective of the actual
increase in costs. Additionally Pandharpur & Akluj Division under Solapur O&M
circle paid Gram-panchayat Tax for FY 2008-09 to FY 2011-12 in FY 2012-13.
Solapur Rural Division paid NA Tax & Gram-panchayat tax for the period April 2006
to March 2013 and Thane O&M circle had paid Property Tax for last 3-5 years in
FY2012-13. This led to increase in rent, rates and taxes during FY 2012-13.
4.7.16 MSEDCL provided that the increase in Conveyance & travel in FY 2012-13 is due to
increase in diesel, petrol rates and revision of rates of travelling allowance. For
increase in computer stationery and outsourcing of metering and billing expenses
MSEDCL submitted that this is on account of increase in number of consumers,
issuance of computerised receipts and overall increase in inflation.
4.7.17 MSEDCL submitted that it has capitalised employee expenses to the extent of Rs. 90
crore in FY 2012-13. MSEDCL submitted that capitalisation of employee expenses is
directly related with capital expenditure incurred during the year. Capital expenditure
incurred during the FY 2012-13 is less as compared to that of FY 2011-12, therefore
less expenses were capitalised in FY 2012-13.
4.7.18 The Commission, after considering the above submissions by MSEDCL, approves the
gross actual A&G expenses for FY 2012-13 as per ARR approved in Case No. 19 of
2012. The following table represents the A&G expenses as per MSEDCLs
submission and Commissions approval. The variation in actual and approved
expenses has been passed on as efficiency gain / loss. For computation of gains and
losses, the Commission has considered the Trued up expenses of Rs. 462 crore for
comparison with the target A&G expenses of Rs. 314 crore approved by the
Commission in the ARR Order. The Commission has carried out the computation of
gains and losses in Section 4.23 of this Order.
Table 80: A&G Expense for FY 2012-13
(Rs. crore)
Particulars
Gross A&G expenses
Less: A&G expense capitalised
ARR Order
(Case No. 19
of 2012)
314
Allowed after
Truing up
Actual
552
314
90
Page 107 of 148
ARR Order
(Case No. 19
of 2012)
Particulars
Allowed after
Truing up
Actual
Net A&G expenses
462
Repairs and Maintenance Expenses

4.7.19 MSEDCL submitted that the R&M expenses in FY 2012-13 were Rs. 611 crore as
against Rs. 611 crore approved by the Commission in the ARR Order for FY 2012-13.
The increase in actual R&M expense of 10.6% as compared to FY 2011-12 is within
the projected increase and is on account of inflation. The Commission verified the
R&M expense from Schedule 25 of the Audited accounts for FY 2012-13.
4.7.20 For FY 2012-13, the actual R&M expenses of MSEDCL have been in line with that
approved by the Commission in the Order dated 16 August 2012. The following table
presents the summary of R&M cost Trued up for FY 2012-13.
Table 81: R&M Expense for FY 2012-13
(Rs. crore)
Particulars
ARR Order
(Case No. 19
of 2012)
Plant & Machinery
9.36
Civil Works
34.28
Lines & Cable Networks
466.9
Vehicles
1.45
Furniture & Fixtures
0.50
Office Equipment
7.16
Total R&M Expense
Allowed after
Truing up
90.92
Buildings
4.8
Actual
611
611
611
Capital expenditure and capitalisation for FY 2012-13
4.8.1 MSEDCL submitted that it has undertaken capitalisation of Rs. 5,927 crore in FY
2012-13 against approved capitalisation of Rs. 6,436 crore. The capitalisation was
verified from Schedule-12 of the Annual Accounts. Capitalisation as per annual
accounts was noted as Rs. 6,005 crore. The additional Rs. 77 crore represents
capitalisation under no specific scheme.
4.8.2 The scheme wise details of capitalisation in FY 2012-13 of Rs. 5,927 crore are shown
in the table below.
Page 108 of 148
1.1
2
2.1
2.2
2.3
2.4
3
INFRA PLAN
MSEDCL/FY08/75
(total 120 DPR)
MSEDCL FY/07/01
PHASE I
MSEDCL FY/07/02
PHASE II
MSEDCL FY/10/19
PHASE III
Phase IV - Demand
Side Mgt
Fixed Capacitor
Scheme
AMR
4.1
MSEDCL/FY-05/01
AMR
APDRP
5.1
PHASE I
MERC/CAP/DPR/12/
08/1549 dt
30.07.2008
5-1
6-1
9014
11361
2458
3184
10841
9927
1827
913
895
1050
17
68
1050
1036
155
141
1300
1443
262
305
1318
1299
18
209
297
40
52
266
257
57
49
721
485
136
302
136
57
43
41
48
48
15
11
1137
779
91
779
588
238
482
151
482
174
244
301
327
93
60
162
82
3406
2949
65
16
65
16
92
149
149
148
57
56
150
168
41
46
168
137
18
2462
3711
785
832
2919
2686
457
224
Excess
Capitalisation
Cumulative
Captialisation
Excess Expenditure
Cumulative Capital
Expenditure
Revised Estimate
2
PHASE II
MERC/CAP/DPR/12/
09/1006 dt
26.05.2009
5.3
GFSS
5.2
Captialisation
during the year
Particulars
MERC Approved
Cost
S.N
o
Capital Expenditure
during the year
Table 82: Scheme-wise Capitalisation for FY 2012-13

(Rs. crore)
R-APDRP A
MERC/CAP/DPR/12/
10/2573 dt
11.11.2009
5.4
R-APDRP B
Internal Reforms
6.1
Phase I-I ( Part -I &

Part II) DTC Metering
Phase II
6.2
Phase - III
SPA: PE
P:SI
477
790
57
54
540
364
63
P:IE
188
519
102
87
419
227
231
39
10
DRUM
147
187
187
187
40
40
11
RGGVY
924.73
1109
92
140
889
767
148
133
268
151
67
59
103
93
12
13
MSEDCL FY/10/38
66 kV Elimination
Single Phasing (Left
out villages)
Page 109 of 148
5-1
6-1
87
87
Excess
Capitalisation
Cumulative
Captialisation
Excess Expenditure
Captialisation
during the year
Cumulative Capital
Expenditure
Capital Expenditure
during the year
Revised Estimate
Particulars
MERC Approved
Cost
S.N
o
14
GFSS (Shrirampur)
15
Scada Part A
162
104
26
26
27
26
16
LT Capacitor Scheme
I& II
131
130
22560
26504
4261
5168
20723
18165
3168
1461
Total DPR
FMS
MIS
Load Management
10
17
4
5
P.F.C.Urban
Distribution Scheme
MIDC Interest free
Loan Scheme
Evacuation
Evacuation Wind
Generation **
Agriculture Metering
46
37
DPDC / Non-Tribal
104
113
10
DPDC / SCP
30
29
11
DPDC / TSP + OTSP
48
61
12
Rural Electrification (
Grant )
22
16
13
JBIC
15
33
14
New consumers
103
89
15
Back log
190
350
16
Single Phasing
17
Special Action Plan

(Nandurbar)
14
10
587
759
4848
5927
Total Non DPR

Total
22560
1461
4.8.3 Capitalisation under DPR schemes: MSEDCL submitted the required information
in reply to the queries raised by the Commission. The Commission noticed that there
have been incidences of cost over-run in few of the DPR schemes. The Commission
also noticed that the total over-run in costs against the approved capitalisation was
Rs.1,461 crore and asked MSEDCL to provide reasons for this difference. MSEDCL
in its reply dated May 5, 2014 submitted that the increase is on account of change in
scope of work, rise in costs of material and services and change in taxation. The
Commission has analysed the cost overrun and found the reasoning provided to be
satisfactory. Therefore, the Commission approves capitalisation as submitted by
Page 110 of 148
MSEDCL for FY 2012-13.

4.8.4 Capitalisation under Non-DPR schemes: MSEDCL submitted that the
capitalisation for Non-DPR schemes was Rs. 749 crore in FY 2012-13, which works
out to 14.5% of DPR schemes. For three of the schemes, namely SPA:PE (Special
Project for Agricultural pump electrification, P:SI (Project for System Improvement)
and P:IE (Project for intensive electrification, MSEDCL has considered complete
capitalisation under DPR schemes. While approving the capitalisation in the ARR
Order for FY 2012-13 the Commission had approved the DPR:Non-DPR ratio of
85:15 for the purpose of these schemes. MSEDCL in response to the Commissions
query replied that SPA:PE and P:IE are almost 100% DPR schemes while for P:SI
scheme the DPR value is to 50% extent.
4.8.5 The Commission it its APR Order of FY 2008-09 for MSEDCL had ruled that the
total capitalisation on non-DPR schemes in any year shall not exceed 20% of that of
DPR schemes. Taking into consideration this fact, the Commission is allowing the
entire capitalisation of Non-DPR schemes of MSEDCL for FY 2012-13.
Table 83: Capitalisation for FY 2012-13 (Rs. crore)
Particulars
DPR Schemes
Non-DPR Schemes
Total
ARR Order (Case

No. 19 of 2012)
5,314
1,122
6,436
Actual
5,178
749
5,927
Approved after
Truing up
5,178
749
5,927
4.8.6 Capitalisation under no specific scheme: In addition to the above, assets capitalised
but not forming part of any specific scheme, amounting to Rs. 77 crore as claimed by
MSEDCL, have been allowed by the Commission. However, as MSEDCL has
considered the impact of these assets only on depreciation and not on interest and
return on equity computation, the Commission has also considered the impact of these
assets on depreciation only.
Table 84: Capitalisation under no specific scheme and under schemes for FY 2012-13
(Rs. crore)
Particulars
Amount
Land & Land Rights
23.97
Buildings
13.32
Vehicles
2.97
Furniture & Fixtures
2.63
Office Equipments
19.26
Other Civil Work
14.84
Total
76.99
Page 111 of 148
Particulars
4.9
Amount
Scheme wise capitalization as per Form 4
5,927
Total Capitalization for depreciation
6,005
Depreciation for FY 2012-13
4.9.1 The depreciation for FY 2012-13 was approved at Rs. 1,309 crore in the previous
ARR Order in Case No. 19 of 2012. In its present Petition, MSEDCL has claimed
depreciation of Rs. 1,235 crore for FY 2012-13. In the previous ARR Order, the
Commission approved an average depreciation rate of 3.65% as against 3.66%
submitted by MSEDCL in the current petition
4.9.2 For the purpose of Truing up of FY 2012-13, the Commission has considered the
average depreciation rate as submitted by MSEDCL. However, since the opening
GFA as considered by MSEDCL is different from the opening GFA as approved by
the Commission, the approved depreciation is accordingly computed. The opening
balance of GFA for FY 2012-13 has been considered the same as the approved
closing balance of GFA for FY 2011-12.
4.9.3 For the purpose of depreciation MSEDCL has included Rs. 77 crore as additions apart
from the scheme wise capitalisation and Rs. 5 crore as retirement of assets during the
FY 2012-13 as provided in the Annual Accounts.
4.9.4 Additionally MSEDCL has claimed Rs. 127 crore under AAD for FY 2012-13.
MSEDCL has computed the AAD based on the depreciation for the year and
repayment for the year. The Commission noted that MSEDCL has not provided the
required information on cumulative loans as required under the Tariff Regulations,
2005 which state that Provided that the advance against depreciation shall be
restricted to 1/10th of the principal amount of loans that are to be repaid in such
financial year minus the amount of allowable depreciation.
4.9.5 In the absence of information on cumulative repayment of loan, cumulative loans
taken and excess of cumulative loans over cumulative depreciation, which is required
for estimating the AAD, the Commission has determined the AAD on the basis of
maximum of approved depreciation and repayment for FY 2012-13.
Table 85: Depreciation for FY 2012-13
(Rs. crore)
Particulars
Opening GFA
Addition to GFA during the year
Retirement of assets during the year
ARR Order
(Case No. 19
of 2012)
25,304
Allowed after
Truing up
Actual
27,268
25,975
6,436
6,005
6,005
Page 112 of 148
Closing GFA
ARR Order
(Case No. 19
of 2012)
31,740
Depreciation
Particulars
Depreciation (as a % of Average

GFA)
Repayment
33,268
31,974
1,042
1,108
1,061
3.65%
3.66%
3.66%
1,309
1,235
1,235
267
127
174
1,309
1,235
1,235
AAD
Depreciation + AAD
Allowed after
Truing up
Actual
4.10 Interest expenses for FY 2012-13

4.10.1 MSEDCL submitted that the interest on long term debt for FY 2012-13 is Rs. 1,466
crore out which Rs. 181 crore has been capitalised. The interest and capitalised
interest figures were traced to Schedule 28 of the Annual Accounts.
4.10.2 The interest rate for the long-term loans has been considered as per the estimated
effective interest rate of MSEDCL for FY 2012-13, arrived by dividing the gross
interest expense by the average balance of opening and closing loan.
Source of Loan
PFC - Total
REC - Project
EMI - Swapping
of Loan/Debt
Restructuring
Premium
Raigad DCC
Bank
Ratanagiri DCC
Bank
Sindhudurg DCC
Bank
GoM (incl.
RGGVY Loan)
Gross Total
Table 86: Interest Expense submitted by MSEDCL for FY 2012-13

(Rs. crore)
Balance
Weighted
Loan
Loan
Interest
Rate of
Loan at the
at the
Average
drawl
repayment
Expense
Interest
beginning
end of
Interest
during the during the
during
(% p.a.) of the year
the
Rate (%
year
year
the year
year
p.a.)
8.104,539
1,167
480
5,226
580
11.87
13.00
8.506,159
2,345
621
7,884
805
11.47
14.50
-
0.57
11.39
9.00
105
26
79
8.29
9.0010.00
119
22
97
10
9.42
9.25
57
11
46
9.33
10.5011.50
408
43
74
378
38
9.74
11,428
3,556
1,235
13,749
1,446
11.49
4.10.3 Commission has considered the funding pattern for capitalisation for FY 2012-13 in
the same ratio as that of the capital expenditure. As per MSEDCLs submission for
Page 113 of 148
Return on Equity Rs. 790 crore is funded via equity out of the total capital
expenditure of Rs. 4,848 crore during FY 2012-13. Also, Rs. 966 crore pertains to
equity portion of capitalisation. However as per the forms for capital expenditure
submitted by MSEDCL, Rs. 1,095 crore of equity funding of capital expenditure was
reported. Due to lack of reconciliation the Commission has considered the equity at
Rs. 966 crore for funding of capitalisation, as submitted by MSEDCL, in the form for
computation of Return on Equity. This is also within the limit of 30% equity
contribution in capitalisation. The figure of loans has been accordingly derived by the
Commission.
Table 87: Funding Pattern submitted by MSEDCL and approved by the Commission for FY 2012-13
(Rs. crore)
Actual
ARR Order
(Case No. 19
of 2012)
Particulars
As per
ROE
submission
Funding pattern of capital expenditure

Total Capital
Expenditure
Consumer
176.77
Contribution
Grants received
275.29
during the year
Equity
705.82
Debt
Allowed after
Truing up
As per Capital
Expenditure
form
4,848
4,848
4,848
198
198
1,095
790
3,555
3,860
5,927
5,927
790
5278.47
Funding pattern for capitalization during FY 2012-13

Total Capitalisation
6,436
5,927
Grants received
during the year
242
Equity
966
966
Debt
4,719
4.10.4 The summary of the interest expenses for long-term debt approved for FY 2012-13 is
as follows:
Table 88: Interest on long-term debt for FY 2012-13
(Rs. crore)
Particulars
Opening loan balance
Addition
Repayments
Closing Balance
ARR Order
(Case No. 19
of 2012)
9,285
5,278
(1,309)
13,254
Actual
Allowed after
Truing up
11,428
3,556
1,235
13,749
9,518
4,720
1,061
13,117
Page 114 of 148
Particulars
Gross Interest Expense
Less: IDC
Net Interest Expense
Average Interest Rate (%)
ARR Order
(Case No. 19
of 2012)
1,127
1,127
10.0%
Actual
Allowed after
Truing up
1,466
181
1,266
11.49%
1,304
1,304
11.49%
4.11 Interest on working capital and consumers Security Deposits and Other Interest
and Finance Charges
4.11.1 MSEDCL submitted that the actual working capital interest incurred was Rs. 301
crore, as compared to Rs. 49.89 crore interest on working capital approved by the
Commission in its previous ARR Order.
4.11.2 MSEDCL submitted that the regulatory provision of reducing working capital by the
total amount of security deposits is leading to a negative working capital which is not
MSEDCLs true situation. MSEDCL further claimed that the amount of security
deposits as reflecting in the books of accounts of MSEDCL is just a notional amount,
since such amount though reflects in the Balance Sheet in the Transfer Scheme;
MSEDCL has not physically received such deposit in cash from erstwhile
Maharashtra State Electricity Board.
4.11.3 Further, the Judgement in the said Appeal (Appeal no. 227 of 2012 & IA no. 20 of
2014) has been passed by the Honble ATE on 30 May, 2014. In the said Judgement
the Honble ATE has upheld the decision of the Commission, observing, Interest on
working capital: The contention of the Appellant regarding deduction of consumer
security deposit from the working capital requirement is rejected as it is inconsistent
with the Tariff Regulations and the consumers cannot be burdened on this account
especially as they had deposited the security with the erstwhile Electricity Board
which is reflected in the books of accounts of the Appellant.
4.11.4 The Tariff Regulations, 2005 clearly stipulate that working capital interest has to be
considered on normative basis. In MSEDCLs case, because of the significant amount
of consumers security deposit lying with MSEDCL (as per the books of accounts),
and the credit period of one-month considered on power purchase expenses, the
normative working capital requirement works out to be negative. Hence, the
Commission has considered the interest on working capital as nil for FY 2012-13.
However, the difference between normative and actual interest on working capital has
been considered as a controllable loss and shared between MSEDCL and the
consumers in accordance with Regulation 19 of the Tariff Regulations, 2005, as
explained later in this Section.
4.11.5 Other interest and finance charges include interest on security deposits, guarantee
charges, finance charges and stamp duty. MSEDCL submitted that the actual
expenditure on security deposit of consumers and other finance charges amounted to
Page 115 of 148
Rs. 416 crore against Rs. 512 crore approved by the Commission in Case No. 19 of
2012.
4.11.6 Rs. 378 crore is on account of interest on consumer deposits which the Commission
has verified from the Audited Accounts of MSDECL.
4.11.7 The actual expenditure of Rs. 37 crore on other interest and finance charges has been
accepted by the Commission as per the Audited Accounts. Thus, the interest on
working capital, other interest and finance charges including interest on consumers
security deposit, approved by the Commission for FY 2012-13 works out to Rs. 416
crore.
Table 89: Interest on Working Capital, Consumers Security Deposit and other interest and finance
charges for FY 2012-13
(Rs. crore)
Particulars
Interest on working capital
Interest on Security Deposit
Guarantee Charges
Finance Charges
Stamp Duty
Order
in Case No.
19 of 2012
50
452
14
32
12
Total
559
Actual
Allowed after
Truing up
301
378
9
21
7
378
9
21
7
717
416
4.12 Provision for Bad debts for FY 2012-13

4.12.1 MSEDCL submitted that the provision made for bad debts was Rs. 684 crore for FY
2012-13. MSEDCLs provision amounts to 1.5% of the revenue billed during FY
2012-13. The Commission noted that MSEDCL has considered the revenue as per
Schedule-21 of the Audited Accounts which includes wheeling charges of Rs. 39
crore and regulatory income of 1,256 crore. The Commission also inquired with
regards the write off of bad debts during FY 2012-13. MSEDCL in its reply dated
May 5, 2014 provided the following movement in its bad debt provision:
Table 90: Bad Debts Written-off during FY 2012-13
(Rs. crore)
Particulars
FY 2012-13
Opening Balance
560.82
Add: Provision
683.62
Less: Write off
702.50
Closing Balance of Provision for Bad Debts (As per Schedule

15 and 17 of the Audited Accounts for FY 2012-13)
541.94
4.12.2 The Commission is of the view that since the regulatory income of Rs. 1,256 crore is
not billed to consumers during FY 2012-13, provision for bad debts against this
Page 116 of 148
regulatory income does not arise. The Commission has however included wheeling
charges for the computation of bad debts for FY 2012-13.
Table 91: Provision for Bad debts for FY 2012-13
(Rs. crore)
Particulars
ARR Order
(Case No. 19
of 2012)
Actual
Allowed after
Truing up
50,409
45,575
44,319
756
684
665
1.5%
1.5%
1.5%
Revenue / Income Billed

Provision for bad debts
Bad debts provision as % of income
billed
4.13 Other Expenses for FY 2012-13

4.13.1 MSEDCL submitted that the Other expenses for FY 2012-13 was Rs. 19 crore as
against the approved amount of Rs. 9 crore.
4.13.2 The Commission examined the break-up of Other Expenses and observed that
MSEDCL claimed expenses under some heads which do not form a part of the
regulated accounts. Therefore, the Commission has not allowed the expenses under
Intangible asset written off, Non moving items written off, and Small and low value
write off / scraped since they do not form a part of the regulated accounts.
4.13.3 The amount claimed by MSEDCL also includes an amount of Rs. 0.16 crore paid as
incentive to Bhiwandi distribution franchisee for the collection of arrears prior to
handing over the area to franchisee. Since, this expense does not form a part of the
regulatory accounts; the Commission has not accepted the claim of MSEDCL in this
regard.
4.13.4 Accordingly, the Commission has approved other expenses summarised below.
Table 92: Other Expenses for FY 2012-13
(Rs. crore)
Particulars
Compensation for injuries, death and
damages to staff
Compensation for injuries, death and
damages to outsiders
ARR Order
(Case No. Actual
19 of 2012)
Allowed after
Truing up
3.97
3.97
6.30
6.30
Intangible asset written off
7.40
Non moving items written off
1.45
Incentive to distribution franchise
0.16
Small and low value write off / scraped
0.08
Page 117 of 148
ARR Order
(Case No. Actual
19 of 2012)
Particulars
Other Expenses (Total)
19.37
Allowed after
Truing up
10.28
4.14 Incentives and Discounts for FY 2012-13

4.14.1 In its Petition, MSEDCL submitted that the incentives and discounts paid/allowed to
consumers during FY 2012-13 were Rs. 230 crore, as compared to the Rs. 157 crore
approved by the Commission in the ARR Order. This amount was verified with
Schedule-28 Finance Costs of the Audited Accounts of MSEDCL.
4.14.2 With regards the large increase in incentives and discounts for FY 2012-13 as
compared to the approved amount in Case No. 19 of 2012 and lower sales in FY
2012-13 against approved, the Commission asked MSEDCL to explain the variation.
MSEDCL in its reply submitted that in Case No. 19 of 2012 it had projected the
incentives/ discounts based on the information available at the time of filing Petition.
Based on the Audited Accounts of FY 2010-11, the incentives/ discounts were Rs.
143 crore and considering a nominal increase of 5% p.a. Rs. 150 crore for FY 201112 and Rs.157 crore for FY 2012-13 was estimated. However during FY 2012-13,
there is an increase of 12% in consumers availing the incentives/ discounts over FY
2011-12. Further due to the tariff hike in FY 2012-13 vide Tariff Order dated 16
August, 2012 the actual incentive/discount is higher as compared to the approved
amount.
4.14.3 However, the amount claimed by MSEDCL also includes an amount of Rs. 0.16 crore
paid as incentive to distribution franchisee. MSEDCL has also not provided any
details as to what this amount pertains to. Since, this expense does not form a part of
the regulatory accounts; the Commission has not accepted the claim of MSEDCL in
this regard. The Commission therefore approves Rs. 229.88 crore as Incentives and
Discounts for FY 2012-13, as shown in the Table below:
Table 93: Incentives/Discounts for FY 2012-13
(Rs. crore)
Particulars
ARR Order
(Case No. 19
of 2012)
Actual
Allowed after
Truing up
157
230.05
229.88
Incentives / Discounts to Consumers
4.15 RLC and ASC refund for FY 2012-13

4.15.1 MSEDCL submitted that it had refunded a total amount of Rs. 462 crore to the
consumers in FY 2012-13. In the previous ARR Order dated 19 August, 2012, the
Commission had considered the amount of Rs. 666 crore towards RLC refund in FY
2012-13. MSEDCL also submitted Rs. (2) crore as ASC refund.
Page 118 of 148
4.15.2 The RLC and ASC refund amount was verified with Schedule-27 of the Audited
Accounts of MSEDCL. The Commission has accepted the claim of MSEDCL on
RLC and ASC refund to consumers in its distribution area for FY 2012-13.
Table 94: RLC and ASC refund for FY 2012-13
(Rs. crore)
ARR Order
(Case No. 19
of 2012)
Actual
Allowed after
Truing up
RLC Refund
666
462
462
ASC Refund
(2)
(2)
Particulars
4.16 Prior Period Charges for FY 2012-13

4.16.1 MSEDCL submitted that the net prior period expenses for FY 2012-13 are Rs. 133
crore. Details of prior period expenses and income as submitted by MSEDCL are
tabulated below. The Commission also verified this amount from Schedule-27 of the
Audited Accounts for FY 2012-13.
Table 95: Summary of Prior Period expenses as submitted by MSEDCL
(Rs. crore)
S.No. Net Prior Period Expenses
Actual
A.
Income Relating to Previous Year
Interest Income
Excess provision for Interest and Finance Charges
14.57
48.80
Other Income
Sub-total
106.93
0.021
4.48
5.64
180.44
B.
Expenses relating to Previous Year
Operating expenses
5.12
Employees Costs
1.80
Interest & Other Charges
9.76
2.54
Material Related Expenses
2.80
(208.66)
36.43
Page 119 of 148
S.No. Net Prior Period Expenses
Actual
463.30
Adjustment to Past billing
313.09
Sub-total
C
132.66
Net Prior Period Expenses
4.16.2 The Commission asked MSEDCL to provide details on Rs. (208.66) crore shown as
short provision for power purchase. MSEDCL in its reply dated May 5, 2014
submitted that this is on account of withdrawal of provision of expenses of Rs.200
crore for Ghatghar station. The Commission is allowing the amount of Rs. (208.66)
under prior period expenses for FY 2012-13. However the Commission cannot
consider the claim of MSEDCL towards operating expenses, employee costs,
depreciation, interest and finance charges and administrative expenses as they are
controllable factors, and approved to MSEDCL as per the principles set out in all the
previous Tariff Orders. Given below is the summary of prior period charges approved
by the Commission for FY 2012-13.
Table 96: Approved Prior Period Charges FY 2012-13
(Rs. crore)
Particulars
ARR Order
(Case No. 19
of 2012)
Prior Period Income

Prior Period Expenses
Net Prior Period Expense / (Income)
Actual
Allowed after
Truing up
(180.44)
(161.39)
313.09
254.64
132.66
93.25
4.17 Contribution to Contingency Reserves

4.17.1 MSEDCL did not submit any details of contribution to contingency reserve for FY
2012-13 in its petition. In the ARR summary for FY 2012-13, contribution to
contingency reserves was shown as Nil by MSEDCL.
4.17.2 The Commission noted that Rs. 63 crore was approved as contribution to contingency
reserve for FY 2012-13 in the earlier ARR Order in Case No. 19 of 2012 and also
appears in Schedule 4 of the Audited accounts for FY 2012-13. Accordingly the
Commission requested MSEDCL to provide the evidence of investments made in the
specified securities for FY 2012-13.
4.17.3 MSEDCL in its response submitted that due to unavailability of sufficient funds to
discharge its liabilities towards power procurement, it had not made any investment
towards contribution to contingency reserves for FY 2012-13. Accordingly, in FY
2012-13, MSEDCL has not claimed the contribution to contingency reserves in final
True up of FY 2012-13.
Page 120 of 148
4.17.4 Accordingly the Commission has not approved contribution to contingency reserves
for FY 2012-13 in accordance with the Tariff Regulations, 2005.
Table 97: Contribution to Contingency Reserves for FY 2012-13
(Rs. crore)
Particulars
Contribution to Contingency
reserves
ARR Order
(Case No. 19
of 2012)
Actual
Allowed after
Truing up
63
4.18 Income tax for FY 2012-13

4.18.1 In its present Petition, MSEDCL submitted that it has paid Rs. 65 crore towards
income tax in FY 2012-13. MSEDCL also submitted that this was in lieu of
undisputed tax liability for AY 2008-09.
4.18.2 The Commission verified the tax paid with the bank receipt submitted by MSEDCL.
The Commission noted that the payment of Rs. 65 crore is towards tax for AY 200809 however MSEDCL has not submitted a detailed breakup of the tax paid including
interest / penalty, if any, paid on delayed payment of tax and has not provided the tax
challan or the income tax return for Commissions analysis. The Commission, in the
absence of such information, has not approved any income tax for FY 2012-13.
MSEDCL is directed to provide the detailed information along with the MYT
petition.
Table 98: Income-tax for FY 2012-13
(Rs. crore)
ARR Order
(Case No. 19
of 2012)
-
Particulars
Income Tax
Actual
Allowed after
Truing up
65
4.19 Return on Equity for FY 2012-13

4.19.1 MSEDCL submitted that the equity portion of the capitalisation during FY 2012-13
was Rs. 966 crore. Additionally MSEDCL submitted that the equity proportion is
16.98% of the total capital expenditure.
4.19.2 Based on the funding pattern submitted by MSEDCL and Commissions analysis
elaborated in Section 4.10.3 the equity portion of capitalisation has been considered as
Rs. 966 crore.
Table 99: Return on Equity for FY 2012-13
(Rs. crore)
Particulars
Opening balance of regulatory

equity
ARR Order
(Case No.
19 of 2012)
Actual
Allowed after
Truing up
5,826
7,231
6,641
Page 121 of 148
ARR Order
(Case No.
19 of 2012)
Actual
Allowed after
Truing up
706
965
966
0.8
Regulatory Equity at the end of

the year
6,531
8,197
7,606
Total Return on Regulated Equity
989
1,234
1,140
Particulars
Equity Portion of Capitalisation

(excluding grants and consumer
contribution)
Equity Portion of Assets retired
4.20 Non-tariff Income for FY 2012-13

4.20.1 MSEDCL submitted that non-Tariff income for FY 2012-13 was Rs. 1,430 crore as
against Rs. 1,379 crore approved in the ARR Order. It was observed that, 75.3% of
the Non Tariff income was on account of receipt of delayed payment charges and
interest on delayed payments.
4.20.2 The Commission verified the same from Schedule 22 of the Audited Accounts of
MSEDCL and noted other income as per Audited accounts is Rs. 1,440 crore which
includes Rs. 9.7 crore income from open access charges which has been shown
separately in the ARR by MSEDCL. The Commission approves Rs. 1,430 crore as
submitted by MSEDCL as non-Tariff income for FY 2012-13.
Table 100: Non tariff income for FY 2012-13
(Rs. crore)
Particulars
Non Tariff Income
ARR Order
(Case No. 19
of 2012)
Actual
Allowed after
Truing up
1,379
1,430
1,430
4.21 Income from Wheeling charges, Cross-subsidy surcharge and Open Access
4.21.1 MSEDCL submitted that the income from wheeling charges was Rs. 39 crore against
Rs. 18 crore approved in the ARR Order. The same was verified from Schedule-21 of
the Audited Accounts of MSEDCL and found to be accurate. Accordingly, the
Commission approves the same.
4.21.2 MSEDCL also submitted that the income from cross subsidy surcharge and open
access was Rs. 10 crore against Rs. 9 crore approved in the ARR Order. The same
was verified from Schedule-22 of the Audited Accounts of MSEDCL and found to be
accurate. Accordingly, the Commission approves the same.
Table 101: Income from Wheeling charges, Cross-subsidy surcharge and Open Access
(Rs. crore)
Particulars
ARR Order
(Case No. 19
of 2012)
Actual
Allowed after
Truing up
Page 122 of 148
Particulars
Income from Wheeling Charges
ARR Order
(Case No. 19
of 2012)
Actual
Allowed after
Truing up
18
39
39
10
10
Income from CSS and Open access
4.22 Revenue from Sale of Power for FY 2012-13

4.22.1 MSEDCL has submitted that the revenue from sale of power in FY 2012-13 was Rs.
44,280 crore as against Rs. 50,409 crore approved by the Commission in the previous
ARR Order. The Commission had in the Order in Case No. 19 of 2012 approved
revenue from sale of power of Rs. 48,926 crore after accounting for the cumulative
revenue gap. The revenue of Rs 48,926 crore was after adjusting Rs. 1,483 crore
approved as Additional FAC for FY 2011-12 under Case No. 43 of 2012 which was to
be recovered from consumers from June 2012 November 2012. In the True up
petition MSEDCL has presented the revenue recovered under additional FAC in the
revenue for FY 2011-12. Accordingly the approved ARR for FY 2012-13 is revised
from Rs 48,926 crore to Rs 50,409 crore for True up computation.
4.22.2 MSEDCL further submitted that the revenue estimated in the previous ARR Order for
FY 2012-13 was based on the projected sales and there has been considerable
decrease in sales to industrial consumers resulting in lower revenue. Additionally
revised tariffs approved in Case No. 19 of 2012 were applicable from 01 August,
2012. Thus MSEDCL received only 8 months revenue at revised tariffs thereby
lowering the annual revenue. Further, MSEDCL has provided additional time of day
(ToD) rebate of Rs. 1.50 per unit from January 2013 making revenue further lower
than approved.
4.22.3 The Commission verified the revenue from the annual accounts of MSEDCL for FY
2012-13 and noted revenue from sale of power has been indicated as Rs. 45,575 crore
which includes income from wheeling charges Rs.39 crore and regulatory income of
Rs. 1,256 crore. MSEDCL has submitted revenue from sale of power of Rs. 44,280
which is net of regulatory income and wheeling charges. In this regard, MSEDCL
submitted that the corresponding debit effect for Regulatory income has been given to
Regulatory Assets and that the consumers will be billed subsequently. MSEDCL
submitted that Rs. 1256 crore is the corresponding credit effect of recognition of
regulatory assets in the books of accounts. Further, as per the Guidance Note on
Accounting for Rate Regulated Activities issued by the Institute of Chartered
Accountants of India, a rate regulated entity is allowed to recognise in its financial
statements the right to recover cost incurred or the obligation to refund amount
received for which cost have been incurred through future tariff. Also, the Matching
Concept of Accounting requires the recognition of the income in the same financial
year in which expenditure for generating the income have been incurred.
4.22.4 Accordingly MSEDCL, being a rate regulated entity, has decided to adopt the
accounting policy to recognise the Regulatory Assets / Liabilities in the financial
Page 123 of 148
statements with effect from the financial year 2012-13. During FY 2012-13,
MSEDCL has recognised Regulatory Asset of Rs. 1,256 crore with corresponding
credit effect shown as Regulatory Income in the financial statements based on the
measurement criteria prescribed in the said Guidance Note after considering the actual
revenue expenditure incurred and revenue income accounted in the books of accounts.
MSEDCL further submitted that at the time of Truing up of FY 2012-13, the
Commission will determine the Trued up gap for FY 2012-13 based on actual
expenditure & income without considering the income arising out of regulatory assets.
The Regulatory Income would be realised as & when the consumers pay the bills and
will be reflected in revenue from sale of power in FY 2013-14. Accordingly,
MSEDCL has not considered the Regulatory Income as a part of Revenue from sale
of power for the purpose of Truing up of FY 2012-13.
4.22.5 The Commission asked MSEDCL to quantify and provide for Commissions analysis,
the impact of various reasons for lower revenue in FY 2012-13 including impact of
lower sales, revenue at revised tariffs only for part of the year and additional TOD
rebate. However, no reply was received from MSEDCL.
Table 102: Revenue from Sale of Power for FY 2012-13
(Rs. crore)
Particulars
Revenue from Sale of Power
Additional FAC
Total Revenue
ARR Order
(Case No. 19
of 2012)
Actual
Allowed after
Truing up
44,280
44,280
44,280
44,280
48,926
1,483
50,409
4.23 Sharing of Efficiency gains and losses for FY 2012-13

4.23.1 MSEDCL categorised all the expenditure as uncontrollable and hence, did not
compute the gains and losses for the controllable heads of expenditure. Further,
MSEDCL submitted that considering the inflationary increase in expenses and
ignoring practical and unforeseen expenses and terming the same under controllable
expenses and allowing only partial expenditure will have direct bearing on cash
flows of MSEDCL.
4.23.2 The Commission is of the view that all expenditure and revenue heads cannot be
considered as uncontrollable, which would mean that the licensee has no control over
any of its activities, particularly when this is a regulated business, and the actual
allowable costs have to be passed through to the consumers. The Commission has
considered certain controllable expenses and revenue for computing the sharing of
gains/ losses in accordance with the provisions of MERC (Terms and conditions of
Tariff) Regulations, 2005, as elaborated in the following paragraphs.
4.23.3 O&M Expenditure: The actual A&G expenditure has been greater than that approved
Page 124 of 148
by the Commission in Order in Case No. 19 of 2012. Not all of these expenses are
uncontrollable and hence, there is efficiency loss in case of A&G expenditure. This
efficiency loss is shared with the consumers in accordance with the MERC Tariff
Regulations 2005. One third of the efficiency loss has been passed on to the
consumers through. The summary of sharing of efficiency gains/ loss on account of
O&M expense is shown in the table below.
Table 103: Efficiency gain/ (loss) due to O&M expenses for FY 2012-13
Allowed as
per this
Order
Efficiency
Gains/ (losses)
Efficiency
Gains/ (losses)
shared with
consumers
Sharing of
efficiency
gains/ (losses)
Actual
Case No.
19 Order
A&G expenses
461.71
313.60
313.60
(148.11)
(49.37)
R&M
expenses
610.63
610.55
610.55
(0.08)
(0.03)
4.23.4 Interest on working capital: The actual interest on working capital incurred by
MSEDCL during FY 2012-13 is Rs. 301 crore, as against 'Nil' normative interest on
working capital approved by the Commission. As stated earlier, the Commission has
considered the difference between the actual interest on working capital and
normative interest, amounting to Rs. 301 crore, as an efficiency loss and shared the
same between MSEDCL and the consumers in accordance with the Tariff
Regulations, 2005. The balance amount of the efficiency loss has to be absorbed by
MSEDCL.
Table 104: Efficiency loss due to Interest on Working Capital for FY 2012-13 (Rs. crore)
Sharing of
efficiency
gains/ (losses)
Interest on
working
capital
Actual
300.93
Case No.
19 Order
Allowed as
per this
Order
49.89
Efficiency
Gains/
(losses)
(300.93)
Efficiency Gains/
(losses) shared
with consumers
(100.31)
4.23.5 Distribution loss achievement: MSEDCL reported the actual distribution loss in FY
2011-12 as 14.67 % against a target of 15.77 % as set by the Commission in Case No.
19 of 2012. The Commission has approved distribution loss for MSEDCL during FY
2011-12 at 14.67 %. Considering the target distribution loss of 15.77 %, there is an
over-achievement of 1.10%. Therefore, this efficiency gain has to be shared between
MSEDCL and the consumers in accordance with the MERC (Terms and conditions of
Tariff) Regulations, 2005.
4.23.6 In this Order, the Commission has computed the efficiency gain due to over
Page 125 of 148
achievement of distribution loss reduction based on the actual average billing rate of
MSEDCL in FY 2012-13, as shown in the table below:
Table 105: Efficiency gain due to lower distribution losses in FY 2012-13
Particulars
Normative distribution losses
Actual distribution losses
Actual energy input
Normative sales
Actual sales
Approved sales
Average billing rate*
Efficiency gains to be retained by MSEDCL
Efficiency gains passed on to consumers
Unit
%
%
MU
MU
MU
MU
MU
Rs/ kWh
Rs. crore
Rs. crore
Rs. crore
Amount
15.77%
14.67%
97,846.39
82416.01
83,488.05
83,488.05
1,072.04
5.24
561.38
374.25
187.13
*Based on Revenue from sale of power as per Schedule 21 of Audited Accounts of MSEDCL
excluding standby charges, Miscellaneous charges from consumers, wheeling charges and theft
recovery income.
4.23.7 In accordance with the above analysis, the sharing of efficiency gains/ (losses) in
relation to A&G expenses, Interest on Working Capital and Revenue will be allowed
to pass through to the consumers. The summary of efficiency gains/ losses is as
below:
Table 106: Summary of Efficiency Gain/ (loss) to be considered in ARR for FY 2011-12 (Rs. crore)
Sharing of
efficiency
gains/
(losses)
A&G
expenses
R&M
expenses
Interest
on
working
capital
Distribution
loss
achievement
Actual
Case No.
19 Order
Allowed as
per this
Order
Efficiency Gains/
(losses)
Efficiency Gains/
(losses) shared
with consumers
461.71
314.00
314.00
(148.11)
(49.24)
610.63
610.55
610.55
(0.08)
(0.03)
300.93
49.89
(300.93)
(100.31)
561.38
187.13
112.26
37.42
Total
4.24 Other Claims and Orders impacting the revenue gap of MSEDCL
4.24.1 The Commission while approving the consolidated revenue gap for FY 2012-13 in
Case No. 19 of 2012 had approved MSEDCLs claims against following Orders.
Accordingly while approving the final Truing up for FY 2012-13 these claims have
Page 126 of 148
also been included in determination of the revenue gap for FY 2012-13

Table 107: Additional Claims of MSEDCL
Sr.
No.
Particulars
As submitted by
MSEDCL
Approved by
the Commission
237
228
405
405
Capitalisation disallowed by the Commission for FY

2008-09
Gap approved to be recovered for FY 2010-11 (as
approved in Case 100 of 2011)
1
2
3
Honble ATE Judgement (124 of 2010)
427
427
Add: Impact of Case No. 21 of 2012 (Review of

Order in Case. No. 100 of 2011)
NA
750
4.24.2 Additional carrying cost on APTEL Orders: MSEDCL in its application of interim
relief had claimed carrying cost on various deferred recoveries computed up to the
date of recovery of the same. The Commission in the Interim relief Order has
approved Rs. 1,022 crore as carrying cost on delayed recovery against Rs. 1,051 crore
claimed by MSEDCL.
4.24.3 Carrying cost on True up of FY 2011-12 and FY 2012-13: MSEDCL in its petition
has claimed Rs. 1,317 crore as carrying cost towards True up of FY 2011-12 and FY
2012-13 calculated at a rate of 12% per annum. MSEDCL submitted that it is entitled
to carrying cost on claims of legitimate expenses which are already incurred but the
recovery is deferred. MSEDCL further submitted that the Trued up amount of FY
2011-12 and FY 2012-13 is as per the audited accounts statements duly audited by
statutory auditors. These are all legitimate expenses duly audited but the recovery of
which is delayed. The Commission is of the view that the delay was on account of
MSEDCLs delay in filing Truing-up Petition for FY 2011-12 and FY 2012-13. Even,
MSEDCL had earlier withdrawn its Petition for Truing up of FY 2011-12 after
submission and TVS. Therefore, the Commission finds no merit in the submission
made by MSEDCL for providing carrying cost due to delay in True up.
4.25 Aggregate Revenue Requirement and Revenue Gap for FY 2012-13 after Truing
up
Based on the above analysis, the summary of ARR as claimed by MSEDCL and approved by
the Commission after Truing up is presented in the table below.
Table 108: Aggregate Revenue Requirement for FY 2012-13
(Rs. crore)
Sr.
No.
Particulars
1 Power Purchase Expenses

2 O&M Expenses
Order in
Case No. 19
of 2012
37,238.26
3,362.13
Actual
35,730.11
4,193.22
Approved
after final
Truing up
35,730.11
4,045.11
Page 127 of 148
Sr.
No.
Particulars
2.1 Employee Expenses

2.2 Administration & General Expenses
2.3 Repair & Maintenance Expenses
Depreciation including Advance
3
against Depreciation
4 Interest on long term loan capital
Interest on working capital and on
5
consumer security deposit
6 Provision for bad debts
7 Other expenses
8 Income tax
Transmission charges paid to
9
transmission licensees
10 Contribution to contingency reserves
Incentives/ discounts paid to
11
consumers
12 Total Revenue Expenditure
13 Return on equity
14 Aggregate Revenue Requirement
15 Less: Non Tariff Income
16 Less: Income from wheeling charges
17 Less: Income from CSS
19 Add: RLC Refund
20 Add: ASC refund
21 Add: Prior period credit/ charges
22 Effect of sharing of gains/ (losses)
23 Capitalisation of FY 2008-09
Additional impact of Honble ATE
24
Order
Unrecovered gap approved in Case
25
No. 100 of 2011
Provisional Amount of sharing gain 26
Case No. 21 of 2012
27 Approved Gap of FY 2010-11
28 Approved Gap of FY 2011-12
Aggregate Revenue Requirement from
29
Retail Tariff
Revenue from Sale of Power at
30
Existing Tariff
31 Revenue Gap
Order in
Case No. 19
of 2012
2,437.98
313.60
610.55
1,309.05
3,120.88
461.71
610.63
1,234.84
Approved
after final
Truing up
3,120.88
313.60
610.63
1,234.84
1,126.89
559.48
1,265.84
717.10
1,303.71
416.18
756.14
9.40
3,105.31
683.62
19.37
65.03
3,128.40
664.78
10.28
3,128.40
63.26
157.24
230.05
229.88
47,687.14
988.56
48,675.70
1,378.76
17.62
8.92
500.00
166.39
228.45
427.00
47,267.58
1,234.26
48,501.85
1,430.49
39.14
9.66
462.11
(2.34)
132.66
228.45
427.00
46,763.29
1,139.75
47,903.04
1,430.49
39.14
9.66
462.11
(2.34)
93.25
(37.42)
228.45
427.00
405.00
405.00
405.00
750.00
750.00
750.00
(767.06)
1,429.05
50,409.00
(767.00)
2,565.71
51,223.91
(767.06)
1,935.98
49,918.48
50,409.00
44,279.68
44,279.68
6,944.23
5,638.80
Actual
Page 128 of 148
5
5.1
CONSOLIDATED REVENUE GAP

Consolidated Revenue Gap for after Truing up of FY 2011-12 and FY 2012-13
5.1.1 Based on the analysis and item wise Truing up the summary of the revenue gap of FY
2011-12 and FY 2012-13 as proposed by MSEDCL and as approved by the
Commission is provided in the table below:
Table 109: Consolidated Revenue Gap claimed by MSEDCL and approved by the Commission
(Rs. crore)
Particulars
Revenue Gap for FY 2011-12
Revenue Gap for FY 2012-13
Carrying cost on deferred recovery
Carrying cost on True Up of FY 2011-12 and FY 2012-13
Total Revenue Gap
Interim Relief provided
Balance Revenue Gap
5.2
As per
MSEDCL
Petition
2,565.68
4,378.72
1,051.00
1,317.00
9,312.40
Approved
1,935.98
3,702.82
1,022.10
6,660.90
5,022.10
1,638.80
Revenue Gap Recovery Mechanism
5.2.1 Based on the final proposed True up for FY 2011-12 and FY 2012-13, amounting to
Rs. 9312 crore, MSEDCL proposed to recover the same in the form of Additional
Energy Charges in proportion to the Average Billing Rate for the respective
categories. It further stated that since the revised Average Billing Rate for the FY
2013-14 was not available, MSEDCL used the approved figures for Average Billing
Rate for FY 2012-13 in the Order dated 16 August, 2012 (Case No. 19 of 2012) for
calculation of Additional Energy Charge.
5.2.2 MSEDCL further stated that over and above this, Rs. 285 crore per month have
already been approved for MSPGCL/ MSETCL by the Commission vide its Orders in
September 2013, which will be continued to be recovered through another stream of
Additional Energy Charges.
5.2.3 The Commission observed that MSEDCL had prayed for an immediate interim relief
of at least 75% of the proposed revenue gap. However, it did not propose any
mechanism of adjusting the proposed interim relief from the proposed revenue gap for
final recovery. It proposed a recovery mechanism for the full and final proposed
revenue gap. This is not commensurate with the prayer of interim relief. Therefore,
MSEDCLs proposal for recovery of Additional Energy Charges is flawed on its own
merit.
Page 129 of 148
5.2.4 However, the Commission has already approved recovery of Rs. 5022.10 crore
through the Interim Relief Order of 3 March, 2014. At this stage the Commission is
also aware that MSEDCL needs to comply with the Commissions direction of filing
its MYT petition. Granting MSEDCL to recover the balance approved revenue gap of
Rs. 1628.88 crore through another stream of additional energy charges will result into
revising the Tariff of MSEDCL within three months of changing the Tariff. Also,
when the determination of MYT for MSEDCL is imminent, it is appropriate that the
balance approved revenue gap be considered together with the ARR in MSEDCLs
MYT Petition. This will help the Commission to take a comprehensive view of all the
revenue gap and various additional energy charges and Interim Charges, which
MSEDCL has been allowed to recover and determine a single Tariff schedule for
MSEDCL. Therefore, the Commission is not approving any new recovery mechanism
for MSEDCL, apart from the existing Tariff and already approved additional recovery
mechanisms.
5.3
Cross Subsidy Surcharge
5.3.1 MSEDCL made a specific prayer for allowing it to revise the cross subsidy charges
and proposed to revised schedule of cross subsidy surcharge applicable for FY 201415 based on the proposed True up of FY 2011-12 and FY 2012-13 and
correspondingly proposed additional energy charges.
5.3.2 The Commission has already determined the cross subsidy surcharge for MSEDCL
through its Order in Case No. 185 of 2013 dated 27 March, 2014. As directed by the
Commission, MSEDCL is required to file its MYT Petition for FY 2013-14 to FY
2015-16. After the filing of MYT Petition, the Commission will determine the tariff
for FY 2014-15 to FY 2015-16. Therefore, the Commission is of the opinion that it
will be appropriate for MSEDCL to file its application for re-determination of cross
subsidy surcharge for FY 2014-15 along with its MYT Petition.
5.4
Compliance with Directives
5.4.1 MSEDCL submitted the status of compliance with directives along with the Petition
in Case No. 38 of 2014. However, the Commission has not evaluated the status of
compliance of the directives in this Order, as majority of the directions are to be
complied with or status has to be furnished with its MYT Petition by MSEDCL. The
Commission directs MSEDCL to submit complete status of compliance along with its
MYT Petition.
5.5
Directives in this Order
5.5.1 The Commission directs MSEDCL to henceforth provide in its Petitions impact
on Tariff due to resolution of any pending litigation in its favour.
5.5.2 MSEDCL has proposed a plan to cover only 500 separated Ag feeders for
metering out of total 6980 feeders in two years (up to December 2015). Under
this plan it will take MSEDCL a very long time to complete the metering. The
Page 130 of 148
Commission directs MSEDCL to re-organise its plan for implementation in a

shorter time and accordingly submit the metering plan along with MYT Petition.
5.5.3 The Commission directs MSEDCL to furnish the information on AAD as
required in Form 4 of the Tariff filing formats during the submission of MYT
Petition for Tariff determination. MSEDCL is required to furnish details of the
cumulative loans taken and repayment, accumulated depreciation, AAD and all
information required in Form 4 of the formats for each of the following three
cases, (i) for all the on-going schemes, (ii) all schemes from FY 2005-06 as per
actual, and (iii) estimates from the MSEB period, based on certain capital
expenditure funding assumptions, if information is not available with MSEDCL.
5.5.4 The Commission directs MSEDCL to submit the replies raised by the
Commission in relation to energy accounting and energy balance, which
MSEDCL has not replied yet, along with its MYT Petition.
5.5.5 The Commission directs MSEDCL to submit the Tax challan and return for FY
2011-12 and FY 2012-13.
5.5.6 The Commission directs MSEDCL to follow the regulatory procedure towards
contingency reserve investments for FY 2011-12 and FY 2012-13 and submit the
details of investment made with sixty (60) days from the date of this Order.
With the above the Commission disposes of the Petition in Case No. 38 of 2014
sd/Vijay L. Sonavane
Member
sd/Chandra Iyengar
Chairperson
Page 131 of 148
Appendix I: List of Objectors at Public Hearing
Sr. No.
1.
Name of the Objector

Prayas, Energy Group,
2.
Mumbai Grahak Panchayat,
3.
Thane Belapur Industries Association,
4.
Vidarbha Industries Association,
5.
Maharashtra Chamber of Commerce,

Industry & Agriculture,
Oricon House, 6th Foor,
12 K. Dubash Marg, Fort,
Mumbai-400 001
(Nashik Branch)
6.
Shri.Vinay.V.Kore
Member of Legislative Assembly, Maharashtra
Varnanagar,
Tal. Pahnala, Dist. Kolhapur 416 113
Shri George John,
Mumbai
Shreenath Chemicals Tarapur,
Boisar - 401 506
Kaygaon Paper Mills Limited,
Aurangabad - 431 005
Shri Satish S. Shah, Nasik - 422 001
Janata Dal (S) Maharashtra
Ichalkarnji,- 416 115
Dist-Kolhapur
M. E. Energy Pvt. Ltd. Markal,
Tal. - Khed, Dist. - Pune - 412 105
Shri Dilip Sukhdev Batwal, Chakan, Tal. - Khed, Dist. - Pune
Smt Urmila Dilip Batwal, Chakan, Tal. Khed, Dist. Pune
Pune Municipal Corporation
Pune - 411 005
Sahyadri Sahakari Sakhar Karkhana Ltd.
Yeshwant Nagar,
Tal.- Karad,
Dist. - Satara - 415 115
Minda Stoneridge Instrument Ltd.,
S.N.287, At Nanekarwadi,
Tal. Khed, Pune
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Modi Naresh Kumar,
Page 132 of 148
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39.
Bahiratwadi,
Pune - 411 016
Advance Plastics,
Kharabwadi, Chakan,
Tal. Khed, Pune - 410 501
Raymond Zambaiti Limited,
Sangaon, Tal. - Kagal, Dist.- Kohpaur 416 216
Shri Ramdas K Pingale,
Sambhajinagar, Pune - 411 019
Shri Jethanand A. Nathpotani, Pimpri,
Pune - 411 018.
Shri Kiran Jadhav, Chikhali, Pradhikaran,
Pune - 411 039.
Shri Sayaji Subhash Navadkar
At Post Bahe Tal. - Valava, Dist - Sangali
Kolhapur Zilla Sahakari Pani Purvatha Sansthacha Sahakari Sangh Maryadit,
, Kolhapur
Karveer Taluka Sahakari Dharan & Pani Purvatha Sansthacha Sahakari Sangh
Maryadit, Kolhapur
Sangam Sahakari Pani Purvatha Sanstha Maryadit, Munde Tal. - Karad, DistSatara
Krushnai Sahakari Pani Purvatha Sanstha Maryadit, Peral, Indoli, Bhuyachwadi,
Tal. - Karad, Dist.- Satara
Shree Umeshwar Sahakari Pani Purvatha Maryadit, Umbraj,Tal. - Karad, Dist.
Satara
Shree Koteshwar Sahakari Pani Purvatha Maryadit, Korti,Tal.- Karad, Dist.Satara
Shree Bhagyalaxmi Sahakari Pani PurvathaMaryadit,
Aarewadi, Gamewadi, Delewadi
Tal. Karad, Dist. - Satara
Sangli Miraj M.I.D.C Manufacturing Association,
Miraj - 416 410
Autoline Industries Ltd,
Gat No. 613/2,Mahalunge,
Tal. - Khed, Dist.- Pune
Maharashtra Rajya erigation Federation, Kolhapur
M/s. Sun Diapet,
Vasai (East), Thane - 401 208
Alpha Pneumatics Pvt. Ltd.,
Vasai (East), Thane - 401 208
Teryair Equipment Pvt. Ltd.,
Vasai (East),
Thane - 401 208
Khushubu Engineers,
Shiroli,Kolhapur 416 112
NTB International Pvt. Ltd.,
622/2 Kuruli,
Tal. - Khed, Dist. Pune -410 501
Page 133 of 148
40.
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59.
60.
61.
Mantri Metallics Pvt.Ltd,

Shiroli, Kolhapur - 416 122
Agarwal Packaging Pvt. Ltd0,
Chakan, Kharabwadi,
Tal. Khad, Dist. Pune
Shri Sunil Sonawane,
Shrirampur
Trio Enterprises,
B-4, MIDC, Shiroli, Kolhapur - 416 122
Mantri Metallics Pvt.Ltd, Unit -2,
Randivewadi,
Tal. - Kagal, Dist. Kolhapur - 416 212
Mantri Autocast Halsawade,
Dist-Kolhapur
Maharashtra Rajya Sahakari Vashtroudyog Mahasangh Maryadit,
Mumbai - 400 001
Shree Jaibhavani Sahakari Pani Purvatha Sanstha Maryadit, Male,
Tal. - Panhala, Dist. - Kolhapur
Ambap, Talsande Warana Sahakari Pani Purvatha Sanstha Maryadit ,Talsande,
Tal. - Hatakanangle, Dist. - Kolhapur
Shree Harhar Mahadev Sahakari Pani
Purvatha Sanstha Maryadit, Mharul
Tal. - Karveer, Dist. - Kolhapur
Shree Koteshwar Vikas Seva Sanstha Maryadit, Bahireshwar,
Tal.-Karveer, Dist. Kolhapur
Padali-Pargaon Warana Sahakari Pani Purvatha Sanstha Maryadit, Padali,
Tal.-Hatakanangle, Dist. -Kolhapur
Map Alloys,
Chakan, Pune- 410 501
Sumeet Packers Pvt. Ltd.,
Chakan, Tal. Khed, Pune - 410 501
Kolhapur Engineering Association
, Kolhapur- 416 008
Shriram Foundry Ltd.,
Kolhapur- 416 001
E. D. Steels Pvt. Ltd.,
Kolhapur- 416 001
Neeta Engineering Works
Kolhapur- 416 001
S. J. Iron & Steel Pvt. Ltd.
Shiroli, Kolhapur 416 122
Alka Engineering Works
Kolhapur- 416 001
Shashi Industries,
Shiroli,
Kolhapur 416 122
Shankar Sahakari Pani Purawatha Yojana Maryadit, Barad,
Tal. - Faltan, Dist. Satara
Page 134 of 148
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83.
84.
Shree Dhudhganga Sahakari Pani Purawatha Sanstha Maryadit, Sangaon,

Tal. Kagal, Dist. - Kolhapur
Yede-Narshihapur Sahakari Pani Purawatha Sanstha Maryadit, Yedemachindra,
Tal.- Valva, Dist.- Sangali
Shindhraj Sahakari Sheti Pani Purawatha Sanstha No. 2
Maryadit,
Kavatheekand,
Tal. Tasgaon, Dist. Sangali
Varana Jallaxmi Sahakari Pani Purawatha Sanstha Maryadit, Kini,
Tal. - Hatkangale, Dist. - Kolhapur
Shree Annapurna Sahakari Pani Purwatha Sanstha Maryadit, Vhanali,
Tal. - Kagal, Dist. - Kolhapur
Shree Nemgonda A. Patil (Anna) Kisan Varana Sahakari Pani Purwatha Sanstha
Maryadit, Kini
Tal.- Hatkangale, Dist. - Kolhapur
Shree Kumbhi Nadi Sahakari Pani Purwtha Sanstha Maryadit, Aamashi
Tal.- Karveer, Dist. Kolhapur
Janseva Pani Purawtha Seva Sahakari Sanstha Maryadit, Padli Khurda,
Bhogawati Sahakari Pani Purwatha Mandali Ltd., Donawade,
Shree Tuljabhavani Sahakari Pani Purwatha sanstha Maryadit, Vanali,
Tal. - Kagal, Dist. - Kolhapur
Shree Kedarnath Sahakari Pani Purawtha Sanstha Maryadit, Donavde,
Yashwantrao Atigre Sahakari Panipurawtha Sanstha Maryadit, Koge
Shree Vitthal Pani Purawtha Seva Sahakari Sanstha Maryadit, Savarwadi,
Shree Bhaveshwari Sahakari Pani Purwatha Sanstha Maryadit, Ganeshwadi,
Tal.- Karveer, Dist. - Kolhapur
Shree Someshwar Sahakari Pani Purwatha Sanstha Maryadit, Kasegaon,
Tal. - Valva, Dist. - Sangali
Shree Parshnath Varana Sahakari Pani Purwatha Sanstha Maryadit, Kini,
Tal.Hathkanagle, Dist.-Kolhapur - 416 112
Solapur Zill Yantramag Dharak Sangh,
Solapur - 6
Shri Jyotirling Sahakari Upsa Jalsinchan Sanstha Maryadit, Kiroli,
Tal. Koregaon Dist. Satara
Shri Naikba Sahakari Pani Purvatha Sanstha Maryadit, Bheldare,
Tal. Karad, Dist. Satara
Shri Jyotirling Sahakari Pani Purvatha Sanstha Maryadit, Charegoan,
Tal. Karad, Dist. Satara- 264 673
Kale-Dhondewadi (Pachwad) Upsa Jalsinchan Yojana Seva Maryadit, Kale,
Kirpe-Yenake-Potale Upsa Jalsinchan Yojana Seva Maryadit, Yenake,
Shree Krushna Sahakari Pani Purvatha Mandali Limited, Mahe,
Page 135 of 148
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104.
105.
Tal. Karveer, Dist. Kolhapur

Shree Gurudatta Sahakari Pani Purvatha Sanstha Maryadit, Sangaon,
Tal. Kangal, Dist. Kolhapur
Shree Hanuman Sahakari Pani Purvatha Sanstha Limited, Aasurle, Post Porle,
Tal. Panhala, Dist. Kolhapur
Vivekanand Sahakari Pani Purvatha Mandali Limited, Kavatheguland,
Tal. Shirol, Dist. Kolhapur
Jaybharat Sahakari Pani Purvatha Mandali Limited, Shedshal,
Tal. Shirol, Dist. Kolhapur
Ganesh Sahakari Pani Purvatha Mandali Limited, Ganeswadi
Tal. Shirol, Dist. Kolhapur 416 105
Shree Khandeshwar Pani Purvatha Seva Sanstha Maryadit, Khandobachiwadi,
Tal. Palus, Dist. Sagali
Yervale-Ving-Gharewadi Upsa Jalsinchan Sahakari Seva Society Maryadit,
Ving,
Kalvde Belvade Upsa Jalsinchan Sahakari Seva Society Maryadit, Shivnagar,
Post Shivnagar,
Kedarnath Upsa Jalsinchan Sahakari Pani Purvatha Sanstha Maryadit, PethNerle,
Tal. Valva, Dist. Sagali
Bichud-Bhavaninagar-Rethare Harnash
Sahakari Pani Purvatha Sanstha
Maryadit, Bhichud-Bhavaninagar
Tal. Valva, Dist. Sagali
Chaware-Ghunaki Sahakari Pani Purvatha Mandali Ltd., Chaware,
Tal. Hatkangale, Dist. Kolhapur - 416112
Tope-Vadgaon-Tasgaon-Minache Sahakari Pani Purvatha Sanstha Maryadit,
Peth Vadgaon, Top,
Tal. Hatkangale, Dist. Kolhapur
Shree Mahalaxmi Warna Sahakari Pani Purvatha Sanstha Maryadit, Peth
Vadgaon,
Tal. Hatkangale, Dist. Kolhapur
Janakrosh,Nagpur 440 010
Yaswantrao Chavan Sahakari Pani Purvatha Sanstha Maryadit, Shirgaon,
Polson Limited,Kolhapur 416 001
Yaswantrao Mohite Krushana Sahakari Sakhar Karkhana Ltd.
Rethere, Post. Shivnagar,
Tal. Karad, Dist. Satara - 415 108
Chachegaon Upsa Jalsinchan Yojana Seva Sahakari Sanstha Maryadit,
Chachegaon,
Karve Dhanai Upsa Jalsinchan Yojana Seva Sahakari Sanstha Maryadit, Karve
Tembhu-Sayapur-Koregaon Upsa Jalsinchan Yojana Seva Sahakari Sanstha
Maryadit, Aogalewadi
Satyashwar Sahakari Pani Purvatha Sanstha Maryadit, Kundal
Page 136 of 148
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Tal. Palus, Dist. Sangli - 416 309

Dr. Patangrao Kadam Yaswant Sahakari Pani Purvatha Sanstha Maryadit, Palus
Krushna Verala Magasvargiya Sahakari Soot Girani Maryadit, Palus
Shree Basveshwar Sahakari Pani Purvatha Sanstha Maryadit, Kundal
Tupari, Dhyari, Ghogaon, Ganeshwadi Sahakari Pani Purvatha Sanstha
Maryadit, Kundal
Shriram Sahakari Pani Purvatha Sanstha Maryadit, Madilage,
Tal.-Bhudargad, Dist-Kolhapur
Sangali Jilha Sahakari Pani Purvathacha Sahakri Sangh, Sangali,
Tal. Miraj, Dist.- Sangali
Shindraj Sahkari Pani Purvtha Sanstha No. 1, Kavthe Ekand, Tal. Tasgaon Dist.
Sangli
Avinash Vinayak Prabhune
Ranapratap Nagar, Nagpur - 440 022
Bharat Forge Limited ,
Mundhwa, Pune-411036
Hemant A. Kapadia,
Aurangabad.
Tamdlage Sahakari Pani Purvatha Sanstha Maryadit, Tamadlage,
Tal. Shirol, Dist.- Kolhapur
Bahirewadi Jakhale Varana Sahakari Pani Purvatha Sanstha Maryadit,
Bahirewadi,
Tal. Panhala, Dist.- Kolhapur
Shree Datta Pani Purvatha Seva Sahakari Sanstha Maryadit, Kodoli-Karave,
Shree Yashoda Varana Sahakari Pani Purvatha Sanstha Maryadit, Mohare,
Sathave Varana Sahakari Pani Purvatha Sanstha Maryadit, Sathave,
Shree Varana Sahakari Pani Purvatha Sanstha Maryadit, Kakhe,
Shree Narshinha Sahakari Pani Purvatha Sanstha Maryadit, Latwade,
Tal. Hatakanangle, Dist.- Kolhapur
Shideshwar Sahakari Pani Purvatha Sanstha Maryadit, Sendur,
Tal. Kagal, Dist.- Kolhapur
Sahyadri Varana Sahakari Sheti Pani Purvatha Sanstha Maryadit, Kodoli,
Shree Hanuman Sahakari Pani Vapar & Vatap Sanstha Maryadit, VaghveGolivade,
Shree Jotirling Sahakari Pani Purvatha Sanstha Maryadit, Ghunaki,
Tal. Hatakanangle, Dist.- Kolhapur
Tatyasaheb Kore Varana Sahakari Pani Purvatha Seva Sanstha Maryadit,
Ghunaki,
Page 137 of 148
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148.
Tal. Hatakanangle, Dist.Kolhapur- 416 112

Datta Shetkari Vinkari Sahakari Soot Girani Ltd, Ichalkaranji,Hatkanagale - 416
109, Dist.- Kolhapur
Shree Mangesh Varana Sahakari Pani Purvatha Seva Sanstha Maryadit, Ghunaki,
Tal.Hatakanangle, Dist.-Kolhapur- 416 112
Shree Vibhavlaxmi Sahakari Pani Purvatha Sanstha Maryadit, Aalate,
Bhiravnath Varana Sahakari Pani Purvatha Sanstha Maryadit, Ghunaki,
Shree Kunthusagar Sahakari Pani Purvatha Sanstha Maryadit, Aalate,
Pashwanath Sahakari Pani Purvatha Sanstha Maryadit, Majale,
Tal.- Hatakanangle, Dist.-Kolhapur
Padhmavati Sahakari Pani Purvatha Sanstha Maryadit, Aalate,
Jindal Poly Film Limited.,
28 Km Stone Village- Mundhegaon,
Tal. Igatpuri Dist. Nasik - 422 403
Shree Vidyasagar Sahakari Pani Purvatha Sanstha Maryadit, Majale,
Tal.-Hatakanangle, Dist.Kolhapur- 416 109
Shree Jalganga Sahakari Pani Purvatha Sanstha Maryadit, Aalate,
Shree Mahadev Swami Sahakari Pani Purvatha Mandali Maryadit, Shedshal,
Tal.- Shirol, Dist.-Kolhapur
The Ichalkaranji Sizing Co-op. Society Ltd., Ichalkaranji
Sutanntu Sizers Pvt Ltd; 10/72,
Station Road, Ichalkaranji - 416 115
Marvelous Metals Pvt. Ltd.,
C-12, MIDC, Gokul Shirgaon,
Kolhapur - 416 234
Tulip Casting Pvt. Ltd.,
Plot No. 29, Opp. SBI MIDC Shiroli,
Kolhapur - 416 122
Caspro Metal Industries Pvt. Ltd.,
E-1, MIDC Industrial Estate, Shiroli, Kolhapur - 416 122
Shiroli Manufacturers Association, Kolhapur
P-12, Smak Building, MIDC Area Shiroli, Kolhapur - 416 122
K & K Craftsman Pvt. Ltd.,
Plot No. C-39/2, MIDC, Shiroli,
Kolhapur - 416 122
Maharashtra Veej Grahak Sanghtana,
Nandura Taluka,
Jay Shriram Welding Works, At. Post Nimgaon, Tal.- Nandura,
Buldhana - 443 404
Urja Sahayog,
Plot No. 96, N-5 Sector H, Satyam Nagar, CIDCO, Aurangabad 431 003
Hutatma Sureshkumar Sheti Sahakari Pani Purvatha Society Maryadit, Dhavali,
Tal. - Valva, Dist. - Sangali
Shree Masaidevi Sahkari Pani Puravtha Sanstha maryadit, Porle,
Page 138 of 148
170.
Tal.- Palhala, Dist. - Kolhapur

Indira Gandhi Mahila Sahakari Soot Girani Ltd, Ichalkaraji,
Awade Nagar, Shivnakwadi,
Tal. - Shirol, Dist. - Kolhapur - 416 143
K & K Foundry Pvt. Ltd,
D-49/1, MIDC, Shiroli, Kolhapur - 416122
Shree Kaleshwar Sahakari Pani Puravatha Mandali, Shirol,
Tal. - Shirol, Dist. - Kolhapur
Kolhapur Jilha Sahakari Powerloom Association,
2/148, Gujari Corner, Ichalkaranji,
Tal: Hatkanangle, Dist: Kolhapur
Shri Vyankatesh Shetkari Vinkari Sahakari Soot Girni Ltd, Ichalkaranji, HuapriYalgud, Tal Hatkanangale, Dist: Kolhapur
Shri Ram Sahakari Pani Puravtha Mandal Ltd., Khupire,
Tal: Karveer, Dist: Kolhapur
Shri Jyotirling Sahakari Pani Puravtha Santha Maryadit, Karanjphen,
Tal: Panhala, Dist: Kolhapur
Shri Kalamma Sahakari Pani Puravtha Seva Santha Maryadit, Shindewadi,
Shri Basgounda Shivgounda Bisadar, Ichalkaranji, , Takve Road.
Shree Kedarling Sahakari Pani Puravtha Society Ltd, Wakare, Tal: Karveer,
Dist: Kolhapur
Shree Kalamma Sahakari Pani Puravtha Seva Santha Maryadit, Kupeer &
Shindewadi, Tal: Karveer, Dist: Kolhapur
Shree Vitthal Sahakari Pani Puravtha Sanstha Maryadit., Khupire, No.- 2,
Shree Vitthal Sahakari Pani Puravtha (Rabbi Scheme) Sanstha Maryadit.,
Khupire,
Choundeshwari Sahakari Soot Girni ltd. Ichalkaranji,
Tal: Shirol, Dist: Kolhapur
Shree Hanuman Sahakari Pani Puravtha Sanstha Ltd, Asurle, Post Porle,
Shree Vidyasagar Sahakari Pani Puravtha Sanstha Maryadit, A. Lat No. 1 & 2, A
Lat, Tal: Shirol, Dist: Kolhapur
Shree Hanuman Sahakari Pani Puravtha Mandali Ltd, Udgaon,
Shree Vitthal Pani Puravtha Seva Sahakari Sanstha Ltd., Savarwadi, Tal:
Karveer, Dist: Kolhapur
Balasaheb Shahapure Sahakari Pani Puravatha Sanstha Maryadit, Bubanal,
Tal: Shirol, Dist: Kolhapur
Vasant Pani Puravatha Mandal,
Kasbe Digraj Skim No. 2,
Tal : Miraj, Dist: Sangali
Shree Bhagyalaxmi Sahakari Pani Puravtha Sanstha, Kasbe Digraj,
Tal: Miraj, Dist: Sangali
Vaibhav Jalcinchan ,Digraj, Skim No. 4, Tal: Miraj, Dist: Sangali
171.
Sagreshwar Sahakari Soot Girni Maryadit, Kadegaon, Tal: Kadegaon, Dist:
149.
150.
151.
152.
153.
154.
155.
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157.
158.
159.
160.
161.
162.
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164.
165.
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168.
169.
Page 139 of 148
Sangali
172.
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186.
187.
188.
189.
Deshbhakta Ratnappanna Kumbhar Panchaganga Sahakari Sakhar Karkhana

Ltd., Ichalkaranji, Dist: Kolhapur
Loknayak Jaiprakash Narayan Shetkari Sahakri Soot Girni Ltd., Kamal Nagar,
Untawad-Hol,
Tal: Shahada, Dist: Nandurbar
Bhuvaneshwar Lift Irigation Skim No.3, Bhilwadi,
Shree Hanuman Lift Irigation Skim No.1, Dhangaon, Tal: Palus, Dist: Sangali
Shree Datta Varna Sahakari Pani Puravtha Sanstha Maryadit, Latwade,
Tal: Hatkangale, Dist: Kolhapur
Shree Datta Sahakari Pani Puravtha Sanstha Maryadit, Kerle,
Tal: Karveer, Dist: Kolhapur - 416 229
Kisan Lift Irigation No.1, Valva,
Tal: Valva, Dist: Sangali
Bhairvanath Sahakari Pani Puravtha Sanstha, Valva,
Kisan No.3, Sahakari Pani Puravtha Sanstha, Valva,
Shree Hanuman Sakahari Pani Puravtha Sanstha, Akondi,
Tal: Kagal, Dist: Kolhapur
Shree Laxmi Sahakari Pani Puravtha Sanstha, Halsawade,
Vidarbha Chamber of Commerce & Industry, Akola - 444 001
Udgaon Sahakari Pani Puravtha Manadli Ltd, Udgaon, Tal: Shirol, Dist:
Kolhapur
Shree Hanuman Sahakari Pani Puravtha Sanstha, Chikurde, Tal: Valva, Dist:
Sangali
Kranti Upsa Jalcinchan Sahakari Sanstha Maryadit, Kudal, Balwadi, Andhali,
Palus, Tal: Palus, Dist: Sangali - 416 309
Shree Sawarde Latwade Varna Sheti Pani Puravtha Mandal, Sawarde,
Tal: Hatkangale, Dist: Kolhapur
Lokneta Balasaheb Desai Sahakari Upsa Jalchinchan Sanstha Maryadit,
GhadhiTakdi, Post. Marul Haveli,
Tal: Patan, Dist: Satara - 415 212
Shree Datta Varna Sahakari Pani Puravtha Sanstha Maryadit, Chikurde
190.
Shree Varna Shetkari Sahakari Pani Puravtha Seva Sanstha Maryadit, Kini,
Tal: Hatkanangale, Dist: Kolhapur
191.
Shri Mahadev Warana Sahakari Pani Puravatha Seva Sanstha Maryadit, Vathar,
Udgaon, Tal. Hatkangale, Dist, Kolhapur
Vilasrao Kore Warana Upsa Jalsichan Sahakari Sanstha Maryadit, Chikurde,
Tal. Walwa, Dist- Sangli
M/s. Map Alloys, Chakan, Pune-410 501.
Shri Shivaji Seva Sahakari Jalsinchan Yojana Maryadit, Dudhordi No.1,
Tal. Palus, Dist. Sangli
Jyotirling Warna Sahakari Panipuravatha Sanstha Maryadit, Bhadole, Tal.
192.
193.
194.
195.
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216.
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218.
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221.
222.
Hatkangale, Dist. Kolhapur

Shri Bhagatsing Warana Sahakari Pani Puravatha Sanstha Maryadit, Arale, Tal.
Panhala, Dist. Kolhapur
Shri Hanuman Warana Sahakari Panipuravatha Sanstha Maryadit, Bhadole, Tal.
Shri Ram Warana Sahakari Panipuravatha Sanstha Maryadit, Bhadole, Tal.
Nathaji Naik Ghalwad Sahakari Pani Puravatha Mandali Ltd. Ghalwad, Tal.
Shirol, Dist. Kolhapur
Tara Industries,Jaysingpur, Dist. Kolhapur
Shri Ravso Bhauso Patil Warana Sahakari Pani Puravatha Sanstha Maryadit,
Bhadole, Tal. Hatkangale, Dist. Kolhapur
Shri Masaidevi Sahakari Pani Puravatha Sanstha Maryadit, Porle, Tal. Panhale,
Dist. Kolhapur
Win Win Industries, MIDC Shiroli, Kolhapur
Shilp Enterprises, MIDC Shiroli, Kolhapur
Shri Hanuman Sahakari Pani Puravatha Sanstha Maryadit, Kutwad, Tal. Shirol,
Dist. Kolhapur
Dhantek Warana Sahakari Pani Puravatha Sanstha Maryadit,
Tal. Shirala, Dist. Sangli
Maharashtra Rajya Irrigation Federation, B/S-5, Prabhakar Plaza, 2nd Floor,
Station Road, Kolhapur
Cosmo Films Ltd.,Waluj, Aurangabad
Jindal Poly Film Ltd., Mundhegaon, Tal-Igatpuri, Nashik
Shri Shivaji Sahakari Pani Puravatha Sanstha Maryadit, Dudhondi No.2,
Tal- Palus, Dist. Sangli
Avinash Vinayak Prabhune
Shri Mahalaxmi Sahakari Pani Puravatha Sanstha Maryadit, Tardal, Tal.
Krantisinh Nana Patil Sahakari Pani Puravatha Yojana Maryadit,
Bramhanandnagar (Burungwadi), Bhilwade Station,Tal. Palus, Dist. Sangli
Shri Bhairavnath Sahakari Pani Puravatha Sanstha Maryadit, Ahirwadi, Tal.
Walva, Dist. Sangli
Dnyanoba Savvase Sahakari Pani Puravatha Sanstha Maryadit, Walva, Dist.
Sangli
Krantimata Laxmibai Nayakwadi Sahakari Pani Puravatha Sanstha Maryadit,
Walva, Khed No. 2, Tal. Walval, Dist. Sangli
Kurukali Sahakari Pani Puravatha Sanstha Maryadit, Kurukali, Tal. Karveer,
Dist. Kolhapur
Shree Rajashri Shahu Sahakari Pani Puravatha Sanstha Maryadit, Sidhanerli, Tal.
Kagal, Dist. Kolhapur
Ichalkaranji Sahakari Pani Puravatha Sanstha Maryadit, Ichalkarnji
Shri Dinkar Hindurao Patil,
Bhadole, Tal. Hatkangale
Shri Sharad Balkrishna Patil,
Bhadole, Tal. Hatkanagale, Dist. Kolhapur
Shri Datta Warana Sahakari Pani Puravatha Sanstha Maryadit,
Page 141 of 148
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244.
245.
Karanjwade, Tal. Walva, Dist. Sangli

Shri Arjuneshwar Sahakari Pani Puravatha Sanstha Maryadit, Arjunwad, Tal.
Buvache Vathar Warana Sahakari Pani Puravatha Sanstha Maryadit, Wathar,
Udgaon, Tal. Hatkangale, Dist. Kolhapur
Shri Birdev Sahakari Pani Puravatha Mandali Maryadit, Arujunwad, Tal. Shirol,
Dist. Kolhapur
Shri Siddheshwar Sahakari Pani Puravatha Mandali Maryadit, Arujunwad, Tal.
Smt. Gujar Pornima Sachin,
Shrirampur
Shri Tupe Balasaheb Ganpat,, Shrirampur
Dist. A. Nagar
Shri Degale Prakash Vishvanath, Srirampur
Shri Rahane Lahanu Bhikaji,
Shrirampur, Dist. A. Nagar
Baban Adhik,
Shrirampur
Smt. Nisha Nagpal,
Shrirampur
Shri Khandare Nandkishor Dattatrya,
Shrirampur
Shri Zaware Swapnil Sudhakar,
Taharabad Tal. Rahuri, Dist. A. Nagar
Shri Gaikawad S. A.
At Post Shrisgaon, Tal. Shrirampur,
Dist. A. Nagar
Shri Shinde S. E.
Shrirampur,
Dist. A. Nagar
M/s Pragaon Tyre
Dr. V. V. Patil
SSK, Pravaranagar
M/s Bhagwandas Tyre
Shri Yogesh Patil,
At. Boghegaon, Post. Pedhegaon
Dr. L. D. Bhor
Shrirampur,
Dist. A. Nagar
Shetkari Mahila Sahakari Vashranirman Soot Girani Maryadit, Sangole
Shetkari Sahakari Soot Girni Ltd.,
Sangole, Dist. Solapur - 413307
Shri Baban Raghunath Adik
At Post Kanapur, Tal. Shrirampur,
Dist. A. Nagar
Shri Wadankar Dinesh Shankarrao,
Page 142 of 148
246.
247.
248.
249.
250.
251.
252.
253.
254.
255.
256.
257.
258.
259.
260.
261.
262.
263.
264.
265.
266.
267.
268.
269.
270.
271.
272.
273.
274.
Indranagar, Shrirampur Dist. A. Nagar

Maharashtra Veej Ghark Sangatana
Ichalkaranji-416 115, Dist-Kolhapur
Shri Ravi KhilnaniUlhasnagar - 421 005
The Millowners Association, Mumbai Dadar (West), Mumbai 400 028
Bhiwandi Padmangar Powerloom Weavers Association , New Kaneri
Padmanagar, Dist-Thane, Bhiwandi- 421 305
Shree Renuka Sahakari Pani Puravatha Sanstha Maryadit, Dindnerli
Tal-Karveer, Dist-Kolhapur
Shree Bhairavnath Sahakari Pani Puravatha Society Ltd, Bhade
Tal-Khandala, Dist-Satara
Shree Gurudatta Sahakari Pani Puravatha Sanstha Maryadit, Morave
Tal-Khandala
Joytirling Sahakari Pani Puravatha Sanstha Maryadit, Pathar Bu.
Dyneshwar Sahakari Pani Puravatha Sanstha Maryadit, Pathar Bu.
Maskobanath Pani Puravatha Sahakari Sanstha Maryadit, Shegadewadi
Indian Freedom Fighter & Heirs Association, Charchgate,
Mumbai- 400 020
Wada Induction Furance Association,Majiwada, Thane- 400 601
Mutha Engineering (P) Ltd, Satara
Adoni Tech,Satara
Gurukrupa Enterprises,
Satara
Manufacturers Association of Satara
Additional MIDC, Satara
Bharat Enterprises,
B17/2, Old MIDC, Satara
Shri Jaypal Babu Ugare,
Post-Gourwad, Tal-Shirol, Dist-Kolhapur
Shri Pavan Baburao Suryavanshi, Post - Gourwad, Tal-Shirol, Dist-Kolhapur
Shri Bhau Bapu Aarbale
Post - Gourwad, Tal-Shirol,
Dist-Kolhapur
Bubnal Sahakari Pani Puravatha Sanstha Maryadit , Bubnal, Tal-Shirol, DistKolhapur
Kothali Sahakari Panipuravtha Mandali Ltd, Kothali,
Tal-Karvir, Dist-Kolhapur
Hanuman Sahakari Panipuravtha Mandali Ltd, Yevati,
Shri Manohar V. Mudgal, Echal
Shri Nanaso Vaman Mudgal, Echal
Nagaon Vividh Karyakari Saha. (Vikas) Seva Sanstha Marya, Nagaon
Tal- Hatkanangale, Dist-Kolhapur
Chamber of Marathwada Industries Association, Aurangabad
Jawahar Shetkari Sahakari Soot Girni Ltd, Dhule- 424 001
Shree Tatayasaheb Kore Warna Sahakari Pani Puravatha Sanstha Maryadit,
Page 143 of 148
275.
276.
277.
278.
279.
280.
281.
282.
283.
284.
285.
286.
287.
288.
289.
290.
291.
292.
293.
294.
295.
296.
297.
298.
299.
300.
301.
302.
303.
304.
305.
306.
307.
308.
309.
Aitwade Ku., Tal-Walva, Dist-Sangli

Ichalkaranji Engineering Association,Ichalkaranji- 416 115, Dist-Kolhapur
Ameya Casting Private Limited, Hatkanangale, Dist-Kolhapur- 416 109
Manik Steel Re-Rolling Pvt Ltd., Hatkanangale, Dist-Kolhapur- 416 109
United Thermocoats ,Hatkanangale, Dist-Kolhapur- 416 109
Dnyanaplast Pvt Ltd,
Hatkanangale, Dist-Ichalkarnji- 416 109
M/s.Sun Irrigation System Pvt Ltd, Hatkanangale,
M/s.Kolhapur Rubber Factory, Hatkanangale
Siddharth Industries, Addl-M.I.D.C. Satara- 415 004
Hindustan Structurals , M.I.D.C. Satara- 415 004
Cooper corporation Pvt Ltd, Post Kodoli, Satara
Jai Hanuman Warana Sahakari Pani Puravatha Sanstha Maryadit,
Karanjwade, Tal. Walva, Dist. Sangli
Ganga Industries,, Hatkanangale,
Shri Narsaiah Venkati Jumma, Bhiwandi
Glorious Fexledes, S/o Hafsan Ali, Panjabi Compound, Bhiwandi, Thane
Poly Pet, Old MIDC, Satara
Mutha Founders Pvt. Ltd, Satara
Dhanashree Industries, Old MIDC, Satara
Perfect Plastics, Old MIDC, Satara
Mutha Spherocast (India) Pvt Ltd, K-1, Addl. MIDC, Degaon Road, At Post
Kodoli, Satara
Shree Bajirao Balaji Patil Warna Sah. Panu Purvatha Sanstha Maryadit, Etavade
Khudda, Tal-Walva, Dist-Sangli
Shree Bhairavnath Warna Sah. Panu Purvatha Sanstha Maryadit, Etavade
Khudda, Tal-Walva, Dist-Sangli
Kisan No.2 Sah. Panipuravatha Sanstha Maryadit, Walva, Ahirwadi,
Tal-Walva, Dist-Sangli
The Ichalkaranji Powerloom Weavers Co-op. Association Ltd, Ichalkaranji
Chinchvad Vividh Karykari Sah. (Vikas) Seva Sanstha Maryadit, Chinchvad,
Shriradwad Shivanakwadi
Panchganga Sahakari Pani Purwatha Mandal Ltd, Shiradwad, Tal-Shirol, DistKolhapur
Black Rose Ind. Ltd, 11-18, Laxmi Co-op Ind. Estate, Phase-II, Hatkanangale,
Kolhapur
Shriniwas Industries, Plot No. D-23,II Phase, Laxmi Coop Ind Estate,
Hatkanangle, Kolhapur
Shrileela Industries , Hatkanangle, Kolhapur
M/s Net Mech Founders Pvt Ltd, Hatkanangle, Dist-Kolhpur
Z S Engineers, N-17, Addl. MIDC, Kodoli, Satara
Mahatma Phule Anusuchit Jati Jamati Shetkari Sah. Sut Girani Niymit,
Wagholi, Tal-Mohol, Dist-Solapur
Karan Exports, Hatkanangale, Dist-Kolhapur
Technovision Auto Components Pvt Ltd, Hatkanangale
Manere Textiles, Hatkanangale, Dist Kolhapur
Sun Irrigation Systems Pvt Ltd, (PVC Division), Hatkanangale
Page 144 of 148
310.
311.
312.
313.
314.
315.
316.
317.
318.
319.
320.
321.
322.
323.
324.
325.
326.
327.
328.
329.
330.
331.
332.
333.
334.
335.
336.
337.
338.
339.
340.
341.
342.
343.
344.
345.
Samarth Metallurgicals (PL II), Dist-Kolhapur

Purav Industries,Hatkanangale, Dist- Kolhapur
Technocraft Engineers, Hatkanangale,
R K Packaging , Hatkanangale
M/s Arvind Doublers, Hatkanangale
Arvind Dyeing & Bleaching Mills Pvt Ltd, Hatkanangale, Dist Kolhapur
Shree Gajraj Industries, Hatkanangale, Dist Kolhapur
Kashyap Arvindbhai Patel, Hatkanangale, Dist Kolhapur
Lat Baygatdar Sahakari Pani Puravatha Mandal Ltd, Abdul Lat, Tal. Shirol,
Dist. Kolhapur
Satara Zilla Sahakari Pani Puravatha Sansthacha Sangh Maryadit, Karad, DistSatara
Sadoli Khalasa Pani Puravatha Mandali Ltd, Sadoli Khalasa, Tal-Karveer, DistKolhapur
M/s. Reliable Polymers, Hatkanangale-416 109
M/s. Om Cast Cleaners, Hatkanangale-416 109
Shree Bhairavnath Sahakari Pani Puravatha Sanstha Maryadit, Tal-Karveer, DistKolhapur
Kakaso Tatyaso Jadhav Warana Sahakari Pani Puravatha Seva Sanstha Maryadit,
Yelur, Tal. Walva, Dist. Sangli
Samarth Foundry Services Pvt Ltd, Hatkanangale, Dist-Kolhapur- 416 109
Powercraft Electronics Pvt Ltd, Hatkanangale, Dist-Kolhapur
M/s. Om Foundars, Hatkanangale, Dist-Kolhapur-416 109
Seema Sudam Chavan, Hatkanangale
M/s.Jain Granite , Hatkanangale,
M/s.Manga Industries, Hatkanangale, Dist-Kolhapur- 416 109
Autoline, Hatkanangale, Dist-Kolhapur- 416 109
Rajendra K. Swami
M/s.Param Industries, Hatkanangale
Dilip Ghansham Biyani, Hatkanangale, Dist-Kolhapur-416 109
M/s.Sanmati CNC Engg.Works, Hatkanangale, Dist-Kolhapur-416 109
M/s.Chaitanya Enginggering Works, Hatkanangale, Dist-Kolhapur-416 109
M/s.Vimal Enginggering Works,Hatkanangale, Dist-Kolhapur-416 109
M/s. Bharath Auto Industries
Hatkanangale, Dist-Kolhapur-416 109
M/s. Auto Machine Centre,
M/s.MD Alloys,
Hatkanangale, Dist-Kolhapur- 416 109
M/s. Fie Spherotech,
M/s. Auto Founders,
M/s. Ramkumar Laxmikant Purohit
M/s. Mahalaxmi Synthetics Mills Ichalkaranji
M/s. Sam Polymers,Hatkanangale, Dist-Kolhapur- 416 109
M/s. Excel Industires,, Hatkanangale,
Dist-Kolhapur- 416 109
Page 145 of 148
346.
347.
348.
349.
350.
351.
352.
353.
354.
355.
356.
357.
358.
359.
360.
361.
362.
363.
364.
365.
366.
367.
368.
369.
370.
371.
372.
373.
374.
375.
376.
377.
378.
Smt. Parvatidevi Rameshwarlal Bagadu

, Hatkanangale, Dist-Kolhapur-416 109
M/s.Jhanjhri Stones,
Hatkanangale,
Dist-Kolhapur- 416 109
M/s.Tirupati Packaging Pvt Ltd,Industrial Estate Ltd, Hatkanangale, DistKolhapur- 416 109
Akhil Bhartiya Grahak Panchyat
Savkarapura, Anjangaon, Post-Anjangaon Surji, Dist-Amravati
Shri Baban Sonasa Khandare
Pratinidhi Grahak Panchyat Anjangaon
Savkarapura, Anjangaon, Post-Anjangaon Surji, Dist-Amravati
Maharashtra Electricity Consumers Association
H No. 55/5, Shop No.4, Gr. Floor, Murlidhar Compound, Kalyan Road,
Bhiwandi, Dist-Thane
M/s Arvind Cotsyn (India) Ltd,Hatkanangale
Shri Padmavati CNC Engineers, Hatkanangale, Dist Kolhapur
Adinath CNC Engg Works, Hatkanangale
Malati Founders Pvt Ltd, Hatkanangale, Dist Kolhapur
Champion CNC Engg. Works, Dist-Kolhapur
Samarth Metallurgicals (PL II), Dist-Kolhapur
Sanmati Components Pvt Ltd,Hatkanangale, Dist- Kolhapur
Shri Pravin D. Thakkar, Bhioand
Maharashtra State Powerloom Fedration, Bhiwandi, Dist-Thane
Padmavati Industries
113/B, Laxmi Co-op Ind Estate, Hatkanangale
Shri Ramprasad Engg. Works, Hatkanangale
Magna Industries, Hatkanangale, Dist Kolhapur
Padamba Engineers Works, Hatkanangale
Pragati Founders Pvt Ltd, Hatkanangale, Dist Kolhapur
Polygon Product Solutions, Ichalkaranji
Aditya Idustries, Hatkanangale
Mahesh Textile Processors, Hatkanangale
Auto Tech Engineers, Hatkanangale
Shree Datta Warna Sah. Pani Purvatha Sanstha Marya. Etavade Khurd,
Tal-Walva, Dist-Sangli
Shree Kalleshwar Sahakari Pani Puravatha Sanstha Marya, A Lat, Tal-Shirala,
Dist-Kolhapur
Shri Hanuman Sah Pani Puravatha Sanstha Marya. Espurti, Tal-Karvir, DistKolhapur
Association of the Managents,, Nashik
Osho International Foundation, Pune - 411 001
Association of Hospitals in Pune, Pune - 411 001
Neo Sanyas Foundation, Pune - 411 001
R N Kulkarni & Sons Textiles Pvt Ltd
P L No. 12/13, 1st Phase, Sector A, Shri Laxmi Sah Aoudyogik Vasahat Ltd,
Hatkanangale
Page 146 of 148
379.
380.
381.
Pioneers Engineers, Hatkanangale

Excel Industries Prop Sameers M Watharse Hatkanangale, Dist-Kolhapur
MIDC,
Udyog Sarathi, Mahakali Gumfa Marg, Andheri (E), Mumbai
382.
Shri Hanuman Sah Pani Puravatha Sanstha Marya. Kogil Bu, Tal-Karvir, DistKolhapur
Malati Enterprises, Hatkanangale, Dist-Kolhapur
Signet International Pvt Ltd, Hatkanangale, Dist-Kolhapur
Flowhite Chemicals Pvt Ltd, Hatkanangale, Dist-Kolhapur
Shreyash Industries , Hatkanangale, Dist-Kolhapur
Madhu Industries, Hatkanangale, Dist-Kolhapur
Mahalaxmi Co-op Processors Ltd
Plot No. 27-35, Shri Laxmi Co-op Ind Estate, Hatkanangale, Dist-Kolhapur
M/s Unique Concrete Industries,Hatkanangale, Dist-Kolhapur
M/s Padmavati Plastics, Hatkanangale, Dist-Kolhapur
Shri Venkteshwara Co-op Foods Grains Processing Siciety Ltd.
Ich.Hatkanangale, Dist-Kolhapur
Shri Hanuman Sah Pani Purvatha Sanstha Marya, Kerle, Tal-Karvir, DistKolhapur
Peeth Girni Malak Mahasangh , Maharashtra State, 2 Manasi Complex, Near
Devrukh S T Stand, Tal-Sangmeshwar, Dist-Ratnagiri
Shri Basweshwar Sah. Pani Puravatha Sanstha Marya. Ispurli, Tal-Karvir, DistKolhapur
Siddha Engineering , Hatkanangale, Dist-Kolhapur
Smt. Maske Reshma Ashok
Subhashwadi, Belapur Shrirampur
Shri Jagtap Mangal Babasaheb At Post. Khanapur Tal. Shrirampur, Dist A.Nagar
Smt Rathod Priyanka Dipak,
Shrirampur
Shri Bavke Balasaheb Bhimaji Tal. Shrirampur, Dist A.Nagar
383.
384.
385.
386.
387.
388.
389.
390.
391.
392.
393.
394.
395.
396.
397.
398.
399.
400.
401.
402.
403.
404.
405.
406.
407.
408.
409.
410.
411.
412.
413.
Shri Vivek Velankar, Pune

Shri Arun Gupta,Sakoli - 441 802
Dist- Bhandara
H P Industries,Sadar, Nagpur - 440 001
Marathwada Association of Small Scale Industries & Agriculture,, Waluj,
Aurangabad - 431 136
Shri Adhav Bapusaheb Raosaheb,Matapur, Tq. Shrirampur,Dist. Ahmednagar
Shri Sayyad Kaiyum Rashid,Shrirampur
TATA Motors Ltd., Pimpri , Pune-411 018
Garware Polyester Ltd., P.O. WalujDist. Aurangabad 431 133
Manan Contsyn Pvt. Ltd ,Tarapur Dist. Thane
Maharashtra State Electricity Works Federation,, Chaoni, Nagpur - 440 013
Urja Prabodhan Kendra,, Mumbai400 004
Shri Batara Rajesh Bhagwansing, Dhshmeshnagar
Shrirampur Dist. A. Nagar
Shri Rajendra Kalamkar Parvati,A.Nagar
Shri. Chandratre Yogiraj Vishvanath, Shrirampur
Page 147 of 148
414.
415.
416.
417.
418.
419.
420.
421.
422.
423.
424.
425.
426.
Prof. Waghmare Bahusaheb Sambhaji,

At Post. Rahata, Dist. A. Nagar
Dr. S R Barvale, Shrirampur
Dr. Ujawala BhorShrirampur, Dist. A. Nagar
Shri Pawar Nana Chandrabhan,Tal. Kopargaon Dist. A. Nagar
Dr. Barhate Gorakh Haribhau
Shrirampur, Dist. A. Nagar
Smt. Vijaya Balasheb Labade
Fedration Of Industries Association Vidharbha, Amravati
Shri Dyaneshwar Bajirao Ghotekar,Kolgaon, Tal Nifad, Dist Nashik
Shri Godake Bapusaheb Gorakh, Anvali, Tal. Pandarpur, Dist. Solapur
Shri Shirsagar Ganesh Sopan, Akrudhe, Tal. Rahata Dist. A. Nagar
Shri Wagh Prakash Kodiram
Bank colony, Kadegaon
Shri Patil Bapusaheb Ganpat, Shrirampur
Dist. A. Nagar
Shri Jadhav Nilesh Shivaji, Shrirampur, Dist. A. Nagar
Page 148 of 148

Final Order - Case No 38 of 2014

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Final Order - Case No 38 of 2014

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MAHARASHTRA ELECTRICITY REGULATORY COMMISSION

Smt. Chandra Iyengar, Chairperson

2. To approve the Final True up of FY 2011-12 and Final True Up of FY 2012-13 as

Order in Case No 38 of 2014

BACKGROUND AND SALIENT FEATURES OF THE ORDER ....................................................................... 11

OBJECTIONS, MSEDCLS RESPONSE AND COMMISSIONS RULING ......................................................... 16

Order in Case No 38 of 2014

TRUE UP FOR FY 2011-12 ...................................................................................................................... 47

TRUE UP FOR FY 2012-13 ...................................................................................................................... 91

SUMMARY OF MSEDCL TRUE UP FOR FY 2012-13 .......................................................................................... 91

Order in Case No 38 of 2014

CONSOLIDATED REVENUE GAP ........................................................................................................... 129

Order in Case No 38 of 2014

Order in Case No 38 of 2014

Order in Case No 38 of 2014

charges for FY 2012-13.............................................................................................................................. 116

Order in Case No 38 of 2014

Order in Case No 38 of 2014

Order in Case No 38 of 2014

BACKGROUND AND SALIENT FEATURES OF THE ORDER

Approved Gap of MSPGCL

Approved Gap of MSETCL

Add: Impact of Case No. 21 of 2012

Approved Actual Diff

Expense variation (including O&M cost) for FY 2011-12 and FY 2012-13

Admission of the Petition and Regulatory process

MSEDCL Approved Remarks

Expense variation (including

Revenue shortfall for FY

Carrying cost on proposed

Carrying cost on various

Order in Case No 38 of 2014

Prudence check is required

MSEDCL Approved Remarks

Organisation of the Order

Order in Case No 38 of 2014

OBJECTIONS, MSEDCLS RESPONSE AND COMMISSIONS

Option to exercise choice between continuous and non-continuous type of supply

category consumer requests for change in category to non-continuous, then MSEDCL

Reconsideration/ review of the concept of Express Feeder and Non-Express

Framing of basic Tariff structure/ category for EHV consumers

Power purchase cost

consumers of MSEDCL. Mahratta Chamber of Commerce, Industries and Agriculture

have any specific comment to offer.

GoMs decision regarding reduction in electricity rates

GoMs decision dated 29 January, 2014 related to reduction in electricity rates in

Interest on RLC and Refund of Electricity Duty on ASC

High Tariff rate for Industries

The difference in power generation, power purchase expenses considering

Order in Case No 38 of 2014

Order in Case No 38 of 2014

FY 2012-13 Interest on Working Capital

FY2011-12 (Rs. crore)

FY 2012-13 (Rs. crore)

accordingly MSEDCL charges the Tariff.

Order in Case No 38 of 2014

2.21.2 MSEDCL did not provide any reply.

Tariff applicable to metered Average cost

2.22.3 The Tariff charged to the Agriculture category consumers is cross-subsidised by

Order in Case No 38 of 2014

Table 11: Summary of workings provided by Tata Motors

Discrepancy in quantum of power purchase

SLDC Report and Discrepancy in Energy