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Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 1 of 445
Before the
MAHARASHTRA ELECTRICITY REGULATORY COMMISSION
World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai 400 005
Tel. No. 022 22163964/65/69 – Fax 022 22163976
E-mail: mercindia@merc.gov.in
Website: www.merc.gov.in
Case No. 325 of 2019
Case of Adani Electricity Mumbai Limited (Distribution Business) for Approval of
Truing-up of FY 2017-18 and FY 2018-19, Provisional Truing-up for FY 2019-20
and Aggregate Revenue Requirement (ARR) and Multi-Year Tariff (MYT) for 4th
Control Period from FY 2020-21 to FY 2024-25
Coram
Shri I.M. Bohari, Member
Shri Mukesh Khullar, Member
Date: 30 March 2020
ORDER
In accordance with Regulation 5 of the Maharashtra Electricity Regulatory Commission
(Multi Year Tariff) Regulations, 2019 (‘MYT Regulations’), Adani Electricity Mumbai
Limited (Distribution Business) (AEML-D), has submitted its Petition for approval of
truing up of FY 2017-18 and FY 2018-19, provisional truing up of 2019-20 and Aggregate
Revenue Requirement (ARR) and Tariff for the 4th MYT Control Period from FY 2020-21
to 2024-25. The original Petition was filed on 30 November 2019 and AEML-D submitted
the revised Petition on 07 January 2020.
The Commission, in exercise of the powers vested in under Section 61,62 and 86 of
Elecricity Act (EA) 2003 and all other powers enabling it in this behalf and after taking into
consideration the submissions made by AEML-D and the suggestions and comments
received through the Public Consultation Process and after considering all other relevant
material, has approved the Truing -up of Annual Revenue Requirement (ARR) for FY
2017-18 and FY-2018-19, Provisional Truing -up of ARR for FY 2019-20 and ARR and
Tariff for the Fourth Control Period from 2020-21to 2024-25.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 2 of 445
TABLE OF CONTENTS
1 BACKGROUND AND BRIEF HISTORY ....................................................................................... 27
1.1 BACKGROUND ............................................................................................................................. 27
1.2 MYT ORDER FOR 3RD CONTROL PERIOD FROM FY 2016-17 TO 2019-20 ............................. 27
1.3 MID-TERM REVIEW ORDER FOR 3RD CONTROL PERIOD ..................................................... 27
1.4 MYT REGULATIONS, 2019 .......................................................................................................... 28
1.5 PETITION FOR APPROVAL OF MULTI YEAR TARIFF, ADMISSION OF THE PETITION
AND PUBLIC PROCESS ......................................................................................................................... 28
1.6 ORGANISATION OF THE ORDER............................................................................................... 30
2 SUGGESTIONS/OBJECTIONS, AEML-D’S RESPONSES AND COMMISSION’S RULING31
2.1 POWER PURCHASE COST ........................................................................................................... 31
2.2 CATEGORISATION AND TARIFF DETERMINATION ............................................................. 35
2.3 WHEELING CHARGES AND CROSS-SUBSIDY SURCHARGE (CSS) .................................... 38
2.4 FIXED/DEMAND CHARGES ........................................................................................................ 39
2.5 VARIABLE CHARGES .................................................................................................................. 40
2.6 CONSUMER SECURITY DEPOSIT .............................................................................................. 41
2.7 FINANCIAL MANAGEMENT AND CONTROL ......................................................................... 42
2.8 BILLING ......................................................................................................................................... 44
2.9 FUEL ADJUSTMENT CHARGES (FAC) ...................................................................................... 44
2.10 TRANSMISSION AND DISTRIBUTION LOSS....................................................................... 46
2.11 CAPITAL EXPENDITURE ....................................................................................................... 48
2.12 CHANGE IN O&M WIRES COST ............................................................................................ 49
2.13 TIME OF DAY METERING ...................................................................................................... 49
2.14 CUMULATIVE FULFILMENT OF NON-SOLAR RPO........................................................... 50
2.15 DSM PROGRAM ....................................................................................................................... 50
2.16 5 STAR RATED PRODUCT ...................................................................................................... 51
2.17 ALTERNATE ENERGY SOURCES ......................................................................................... 51
2.18 CUSTOMER RELATIONSHIP RELATED ............................................................................... 52
2.19 RETENTION OF DATA ............................................................................................................ 53
2.20 MISUSE OF STANDBY SUPPORT .......................................................................................... 53
2.21 GRID SUPPORT CHARGES ..................................................................................................... 55
2.22 TAX ON SALE OF ELECTRICITY (TOSE) ............................................................................. 56
2.23 UNIFORM TARIFF CHANGES OVER MYT PERIOD ............................................................ 56
2.24 CIRCULATION OF PUBLIC NOTICE WITH THE BILLS ...................................................... 57
2.25 INCREASE IN RETURN ON EQUITY AND CAPITAL EXPENDITURE .............................. 57
2.26 OTHERS ..................................................................................................................................... 58
3 TRUING UP FOR FY 2017-18 AND FY 2018-19 ............................................................................ 59
3.1 SALES FOR FY 2017-18 AND FY 2018-19 ..................................................................................... 59
3.2 OPEN ACCESS CONSUMPTION ................................................................................................. 63
3.3 DEMAND-SIDE MANAGEMENT (DSM) MEASURES .............................................................. 64
3.4 DISTRIBUTION LOSSES AND ENERGY BALANCE ................................................................ 64
3.5 POWER PROCUREMENT ............................................................................................................. 68
3.6 OPERATION AND MAINTENANCE (O&M) EXPENSES .......................................................... 93
3.7 CAPITAL EXPENDITURE AND CAPITALISATION ................................................................ 108
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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3.8 OPENING GROSS BLOCK FOR FY 2017-18 ............................................................................. 120
3.9 DEPRECIATION .......................................................................................................................... 121
3.10 FINANCING PLAN AND INTEREST EXPENSES ................................................................ 125
3.11 RETURN ON EQUITY (ROE) ................................................................................................. 140
3.12 INTEREST ON WORKING CAPITAL (IOWC)...................................................................... 143
3.13 INTEREST ON CONSUMERS’ SECURITY DEPOSIT ......................................................... 146
3.14 PROVISION FOR BAD AND DOUBTFUL DEBTS ............................................................... 147
3.15 CONTRIBUTION TO CONTINGENCY RESERVE ............................................................... 149
3.16 INCOME TAX .......................................................................................................................... 150
3.17 NON-TARIFF INCOME .......................................................................................................... 156
3.18 INCOME FROM OTHER BUSINESS ..................................................................................... 162
3.19 EFFICIENCY GAIN/ (LOSS) FOR FY 2017-18 AND FY 2018-19 .......................................... 163
3.20 SUMMARY OF AGGREGATE REVENUE REQUIREMENT .............................................. 170
3.21 REVENUE ................................................................................................................................ 178
3.22 REVENUE FROM WHEELING CHARGES FROM CHANGE-OVER AND OPEN ACCESS
CONSUMERS ........................................................................................................................................ 179
3.23 REVENUE FROM CROSS-SUBSIDY SURCHARGE FROM OA CONSUMERS ................ 181
3.24 REVENUE GAP ....................................................................................................................... 182
3.25 REGULATORY ASSETS RECOVERY IN FY 2017-18 AND FY 2018-19 ............................ 187
4 PROVISIONAL TRUING-UP FOR FY 2019-20........................................................................... 189
4.1 SALES ........................................................................................................................................... 189
4.2 DISTRIBUTION LOSSES AND ENERGY BALANCE .............................................................. 199
4.3 POWER PROCUREMENT ........................................................................................................... 201
4.4 OPERATION AND MAINTENANCE EXPENSES ..................................................................... 218
4.5 CAPITAL EXPENDITURE AND CAPITALISATION ............................................................... 221
4.6 DEPRECIATION .......................................................................................................................... 224
4.7 FINANCING PLAN AND INTEREST EXPENSES ..................................................................... 226
4.8 RETURN ON EQUITY ................................................................................................................. 228
4.9 INTEREST ON WORKING CAPITAL ........................................................................................ 230
4.10 INTEREST ON CONSUMER’S SECURITY DEPOSIT ......................................................... 232
4.11 PROVISION FOR BAD AND DOUBTFUL DEBTS ............................................................... 233
4.12 CONTRIBUTION TO CONTINGENCY RESERVE ............................................................... 234
4.13 DSM EXPENSES ..................................................................................................................... 235
4.14 INCOME TAX .......................................................................................................................... 236
4.15 NON-TARIFF INCOME .......................................................................................................... 237
4.16 INCOME FROM OTHER BUSINESS ..................................................................................... 240
4.17 SUMMARY OF AGGREGATE REVENUE REQUIREMENT .............................................. 241
4.18 REVENUE ................................................................................................................................ 246
4.19 REVENUE GAP/SURPLUS FOR FY 2019-20 FOR THE WIRES BUSINESS AND SUPPLY
BUSINESS .............................................................................................................................................. 248
4.20 REGULATORY ASSET RECOVERY IN FY 2019-20 ........................................................... 251
5 AGGREGATE REVENUE REQUIREMENT FOR FY 2020-21 TO FY 2024-25 ..................... 252
5.1 SALES ........................................................................................................................................... 252
5.2 DISTRIBUTION LOSSES AND ENERGY BALANCE .............................................................. 259
5.3 POWER PURCHASE QUANTUM AND COST .......................................................................... 262
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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5.4 OPERATION AND MAINTENANCE EXPENSES ..................................................................... 279
5.5 CAPITAL EXPENDITURE AND CAPITALISATION ............................................................... 286
5.6 DEPRECIATION .......................................................................................................................... 289
5.7 INTEREST ON LONG-TERM LOAN .......................................................................................... 291
5.8 INTEREST ON WORKING CAPITAL ........................................................................................ 294
5.9 INTEREST ON CONSUMER SECURITY DEPOSIT .................................................................. 296
5.10 RETURN ON EQUITY ............................................................................................................ 296
5.11 PROVISION FOR BAD AND DOUBTFUL DEBTS ............................................................... 300
5.12 CONTRIBUTION TO CONTINGENCY RESERVE ............................................................... 300
5.13 NON-TARIFF INCOME .......................................................................................................... 301
5.14 DEMAND SIDE MANAGEMENT EXPENSES ..................................................................... 304
5.15 INCOME FROM OTHER BUSINESS .................................................................................... 305
5.16 PAYMENT OF TPC-G FOR STANDBY ................................................................................ 306
5.17 GAP/(SURPLUS) OF AEML-G AFTER TRUING-UP OF FY 2017-18 AND FY 2018-19 AND
APR OF FY 2019-20 ............................................................................................................................... 306
5.18 AGGREGATE REVENUE REQUIREMENT FOR 4TH CONTROL PERIOD ........................ 306
6 CUMULATIVE REVENUE GAP, TARIFF PHILOSOPHY AND CATEGORY-WISE
TARIFFS FOR 4TH CONTROL PERIOD FROM FY 2020-21 TO FY 2024-25 .................................. 312
6.1 INCREMENTAL REVENUE GAP/SURPLUS FOR FY 2017-18 ................................................ 312
6.2 REVENUE GAP / SURPLUS FOR FY 2018-19 ........................................................................... 313
6.3 PROVISIONAL REVENUE GAP/ SURPLUS FOR FY 2019-20 ................................................. 313
6.4 CARRYING/(HOLDING) COST TILL FY 2019-20 ON REVENUE GAP/(SURPLUS) OF FY
2017-18 AND FY 2018-19 ...................................................................................................................... 314
6.5 RECOVERY OF REGULATORY ASSET ................................................................................... 319
6.6 RECOVERY OF AMOUNTS PERTAINING TO RINFRA ......................................................... 323
6.7 PROVISIONAL RECOVERY OF NEAR CERTAIN FUTURE COST ........................................ 327
6.8 CUMULATIVE REVENUE GAP / SURPLUS TILL FY 2019-20 ............................................... 329
6.9 APPROACH FOR RECOVERY OF PAST GAP / (SURPLUS) ................................................... 331
6.10 WHEELING CHARGES .......................................................................................................... 335
6.11 CROSS SUBSIDY SURCHARGE (CSS) ................................................................................. 338
6.12 TARIFF DESIGN CONSIDERATION .................................................................................... 342
6.13 COMMISSION’S TARIFF PHILOSOPHY.............................................................................. 370
6.14 REVISED TARIFF FOR THE CONTROL PERIOD ............................................................... 380
6.15 REVISED TARIFFS EFFECTIVE FROM 1 APRIL, 2020 (FY 2020-21) ................................ 380
6.16 REVISED TARIFFS EFFECTIVE FROM 1 APRIL, 2021 (FY 2021-22) ................................ 382
6.17 REVISED TARIFFS EFFECTIVE FROM 1 APRIL, 2022 (FY 2022-23) ................................ 383
6.18 REVISED TARIFFS EFFECTIVE FROM 1 APRIL, 2023 (FY 2023-24) ................................ 385
6.19 REVISED TARIFFS EFFECTIVE FROM 1 APRIL, 2024 (FY 2024-25) ................................ 387
6.20 GRID SUPPORT CHARGES ................................................................................................... 388
7 SCHEDULE OF CHARGES ........................................................................................................... 393
8 APPLICABILITY ............................................................................................................................ 397
8.1 APPLICABILITY OF REVISED TARIFF .................................................................................... 397
8.2 APPLICABILITY OF ORDER ..................................................................................................... 397
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 5 of 445
ANNEXURE – 1(A): REVENUE WITH REVISED TARIFFS FOR FY 2020-21 ............................... 399
ANNEXURE – 1(B): REVENUE WITH REVISED TARIFFS FOR FY 2021-22 ............................... 400
ANNEXURE – 1(C): REVENUE WITH REVISED TARIFFS FOR FY 2022-23 ............................... 401
ANNEXURE – 1(D): REVENUE WITH REVISED TARIFFS FOR FY 2023-24 ............................... 402
ANNEXURE – 1(E): REVENUE WITH REVISED TARIFFS FOR FY 2024-25 ............................... 403
ANNEXURE – 2: APPROVED TARIFF SCHEDULE FOR MYT CONTROL PERIOD ................. 404
APPENDIX – 1: LIST OF PERSONS WHO ATTENDED THE TECHNICAL VALIDATION
SESSION (TVS) HELD ON 24 DECEMBER, 2019 ............................................................................... 445
APPENDIX – 2: LIST OF PERSONS WHO ATTENDED PUBLIC HEARING DATED 04
FEBRUARY, 2020 ..................................................................................................................................... 445
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 6 of 445
List of Tables
Table 3-1 : Own sales and Change-over sales for FY 2017-18 as submitted by AEML-D
(MU) ................................................................................................................................... 60
Table 3-2 : Own sales and Change-over sales for FY 2018-19 as submitted by AEML-D
(MU) ................................................................................................................................... 61
Table 3-3: Own Sales and Change-over Sales for FY 2017-18 as approved by the
Commission (MU) .............................................................................................................. 62
Table 3-4: Own Sales and Change-over Sales for FY 2018-19 as approved by the
Commission (MU) .............................................................................................................. 63
Table 3-5: OA Consumption for FY 2017-18 and FY 2018-19 as submitted by AEML-
D(MU) ................................................................................................................................ 63
Table 3-6: Open Access Consumption for FY 2017-18 in AEML-D licence area as approved
by the Commission (MU) ................................................................................................... 63
Table 3-7: Open Access Consumption for FY 2018-19 in AEML-D licence area as approved
by the Commission (MU) ................................................................................................... 63
Table 3-8: Energy Saving due to DSM Programmes as submitted by AEML-D (MU) .... 64
Table 3-9: Distribution Loss for FY 2017-18 as submitted by AEML-D .......................... 64
Table 3-10: Distribution Loss for FY 2018-19 as submitted by AEML-D ........................ 65
Table 3-11: Energy Balance approved by the Commission for FY 2017-18 ..................... 66
Table 3-12: Energy Balance approved by the Commission for FY 2018-19 ..................... 67
Table 3-13: Energy Requirement approved by the Commission for FY 2017-18 ............. 67
Table 3-14: Energy Requirement approved by the Commission for FY 2018-19 ............. 68
Table 3-15: Power Purchase Cost from ADTPS for FY 2017-18 as submitted by AEML-D
............................................................................................................................................ 69
Table 3-16: Power Purchase Cost from ADTPS for FY 2018-19 as submitted by AEML-D
............................................................................................................................................ 69
Table 3-17: Power Purchase from ADTPS approved by Commission after truing up for FY
2017-18 and FY 2018-19 ................................................................................................... 70
Table 3-18: Power Purchase Cost from VIPL-G for FY 2017-18 as submitted by AEML-D
............................................................................................................................................ 71
Table 3-19: Power Purchase Cost from VIPL-G for FY 2018-19 as submitted by AEML-D
............................................................................................................................................ 71
Table 3-20: Power Purchase from VIPL-G for FY 2017-18 and FY 2018-19 approved by
Commission ........................................................................................................................ 72
Table 3-21: Cost of Solar Power Purchase in FY 2017-18 and FY 2018-19, as submitted by
AEML-D ............................................................................................................................ 73
Table 3-22: Cumulative Shortfall in Solar RPO Target till FY 2017-18 as Approved in
Order in Case No. 39 of 2019 ............................................................................................ 73
Table 3-23: Revised Cumulative Shortfall in Solar RPO Target till FY 2017-18 ............. 74
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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Table 3-24: Solar RPO Procurement Cost for FY 2017-18 and FY 2018-19 as approved by
the Commission .................................................................................................................. 75
Table 3-25: Cumulative Shortfall in Solar RPO for FY 2017-18 as approved by Commission
............................................................................................................................................ 75
Table 3-26: Cumulative Shortfall in Solar RPO for FY 2018-19 as approved by ............. 76
Table 3-27: Power Purchase Cost from Non-Solar Sources for FY 2017-18 and FY 2018-
19 as submitted by AEML-D ............................................................................................. 76
Table 3-28: Cumulative Shortfall in Non-Solar RPO Target till FY 2017-18 as approved in
Order in Case No. 39 of 2019 ............................................................................................ 77
Table 3-29: Revised Cumulative Shortfall in Non-Solar RPO Target till FY 2017-18 ..... 77
Table 3-30: Non-Solar RE Purchase for FY 2017-18 as approved by the Commission .... 78
Table 3-31: Non-Solar RE Purchase for FY 2018-19 as approved by the Commission .... 78
Table 3-32: Cumulative Shortfall in Non-Solar RPO for FY 2017-18 as approved by
Commission ........................................................................................................................ 79
Table 3-33: Cumulative Shortfall in Non-Solar RPO for FY 2018-19 as approved by
Commission ........................................................................................................................ 79
Table 3-34: Power Purchase from Short Term Sources for FY 2017-18 and FY 2018-19 as
submitted by AEML-D ....................................................................................................... 82
Table 3-35: Short Term Power Purchase for FY 2017-18 as approved by the Commission
............................................................................................................................................ 83
Table 3-36: Short-Term Power Purchase for FY 2018-19 as approved by the Commission
............................................................................................................................................ 83
Table 3-37: Revenue from Surplus Sale for FY 2017-18 and FY 2018-19 as submitted by
AEML-D ............................................................................................................................ 85
Table 3-38: Sale of Surplus Power in FY 2017-18 and FY 2018-19 as approved by
Commission ........................................................................................................................ 86
Table 3-39 : Transmission Charges for FY 2017-18 and FY 2018-19 as submitted by
AEML-D (Rs Crore) .......................................................................................................... 88
Table 3-40: Transmission Charges for FY 2017-18 and FY 2018-19 as approved by the
Commission (Rs. Crore) ..................................................................................................... 88
Table 3-41 : MSLDC Charges for FY 2017-18 and FY 2018-19 as submitted by AEML-D
(Rs. Crore) .......................................................................................................................... 89
Table 3-42: MSLDC Charges for FY 2017-18 and FY 2018-19 as approved by Commission
(Rs. Crore) .......................................................................................................................... 89
Table 3-43 : Stand-by Charges for FY 2017-18 and FY 2018-19 as submitted by AEML-D
(Rs. Crore) .......................................................................................................................... 90
Table 3-44: Standby Charges approved by the Commission for FY 2017-18 and FY 2018-
19 (Rs. Crore) ..................................................................................................................... 90
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 8 of 445
Table 3-45 : Power Purchase Quantum and Cost for FY 2017-18 as submitted by AEML-
D ......................................................................................................................................... 91
Table 3-46 : Power Purchase Quantum and Cost for FY 2018-19 as submitted by AEML-
D ......................................................................................................................................... 91
Table 3-47: Power Purchase approved by the Commission for FY 2017-18 ..................... 92
Table 3-48: Power Purchase approved by the Commission for FY 2018-19 ..................... 93
Table 3-49: O&M Expenses approved in MTR Order for FY 2017-18 and FY 2018-19 (Rs.
Crore) ................................................................................................................................. 93
Table 3-50: Inflation Factor for Truing-up of O&M Expenses for FY 2017-18 ............... 94
Table 3-51: Permissible and Actual O&M Expenses for FY 2017-18 (Rs. Crore) ........... 95
Table 3-52: Inflation Factor for Truing-up of O&M Expenses for FY 2018-19 ............... 95
Table 3-53: Permissible and Actual O&M Expense for FY 2018-19 (Rs. Crore) ............. 96
Table 3-54 : O&M Expenses claimed in Truing up of FY 2017-18 (Rs Crore) ................ 99
Table 3-55 : O&M Expenses claimed in Truing up of FY 2018-19 (Rs Crore) ................ 99
Table 3-56: Inflation Factor approved for FY 2017-18 ................................................... 101
Table 3-57: Inflation Factor approved for FY 2018-19 ................................................... 102
Table 3-58: Other Allowances approved for FY 2017-18 ............................................... 104
Table 3-59: Corporate Expense Allocation for FY 2017-18 and FY 2018-19 of AEML 104
Table 3-60: Corporate Expense Allocation approved by the Commission for FY 2018-19
.......................................................................................................................................... 106
Table 3-61: O&M expenses Disallowed in FY 2017-18 and FY 2018-19 for AEML-D (Rs.
Crore) ............................................................................................................................... 106
Table 3-62: O&M expenses Disallowed in FY 2017-18 and FY 2018-19 for Wires & Supply
(Rs. Crore) ........................................................................................................................ 107
Table 3-63: O&M Expenses allowed by the Commission after truing up for FY 2017-18
and FY 2018-19 for Wires Business (Rs. Crore) ............................................................. 107
Table 3-64: O&M Expenses allowed by the Commission after truing up for FY 2017-18
and FY 2018-19 for Supply Business (Rs. Crore) ........................................................... 108
Table 3-65: Capital Expenditure and Capitalisation for Wires Business and Supply Business
as submitted by AEML-D for FY 2017-18 (Rs. Crore) ................................................... 109
Table 3-66: Capital Expenditure and Capitalisation for Wires Business and Supply Business
as submitted by AEML-D for FY 2018-19 (Rs. Crore) ................................................... 109
Table 3-67: Capitalisation approved by the Commission after truing up for FY 2017-18 (Rs.
Crore) ............................................................................................................................... 119
Table 3-68: Capitalisation approved by the Commission after truing up for FY 2018-19 (Rs.
Crore) ............................................................................................................................... 119
Table 3-69 : Opening GFA for Wires and Supply Business for FY 2017-18 as submitted by
AEML-D (Rs Crore) ........................................................................................................ 121
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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Table 3-70 : Opening GFA for Wires and Supply Business for FY 2017-18 as approved by
Commission (Rs Crore) .................................................................................................... 121
Table 3-71 : Depreciation Rates for calculating Depreciation submitted by AEML-D ... 121
Table 3-72 : Depreciation for Wires Business for FY 2017-18 as submitted by AEML-D
(Rs. Crore) ........................................................................................................................ 122
Table 3-73 : Depreciation for Wires Business for FY 2018-19 as submitted by AEML-D
(Rs. Crore) ........................................................................................................................ 122
Table 3-74 : Depreciation for Supply Business for FY 2017-18 and FY 2018-19 as
submitted by AEML-D (Rs. Crore).................................................................................. 123
Table 3-75: Depreciation for Wires Business for FY 2017-18 as approved by the
Commission (Rs. Crore) ................................................................................................... 124
Table 3-76: Depreciation for Supply Business for FY 2017-18 as approved by the
Commission (Rs. Crore) ................................................................................................... 124
Table 3-77: Depreciation for Wires Business for FY 2018-19 as approved by the
Commission (Rs. Crore) ................................................................................................... 124
Table 3-78: Depreciation for Supply Business for FY 2018-19 as approved by the
Commission (Rs. Crore) ................................................................................................... 124
Table 3-79: Interest on Loans for FY 2017-18 as submitted by AEML-D (Rs. Crore) ... 125
Table 3-80: Interest on Loans for FY 2017-18 as submitted by AEML-D (Rs. Crore) ... 126
Table 3-81: Interest on Loans for FY 2018-19 as submitted by AEML-D (Rs. Crore) ... 127
Table 3-82: Total outstanding debt of AEML raised by AEML post transaction ............ 129
Table 3-83: Segregation of Refinancing Charges among ADTPS, AEML-T and AEML-D
.......................................................................................................................................... 129
Table 3-84: PV of Interest cost saving in FY 2018-19 .................................................... 130
Table 3-85: Interest Expenses for FY 2017-18 as approved by Commission (Rs. crore) 131
Table 3-86: Interest Expenses for FY 2018-19 as approved by Commission (Rs. crore) 132
Table 3-87: Payment to SBI Capital Markets Limited by AEML ................................... 135
Table 3-88: Computation of eligible Refinancing Cost for Regulatory Loan of AEML-D
(Rs. Crore) ........................................................................................................................ 137
Table 3-89: Refinancing Cost and sharing of Net Saving for FY 2018-19 for the Wires
Business, as approved by the Commission (Rs. Crore) ................................................... 140
Table 3-90: Refinancing Cost and sharing of Net Saving for FY 2018-19 for the Supply
Business, as approved by the Commission (Rs. Crore) ................................................... 140
Table 3-91 : Return on Regulatory Equity for Wires Business for FY 2017-18 and FY 2018-
19 as submitted by AEML-D (Rs Crore) ......................................................................... 141
Table 3-92 : Return on Regulatory Equity for Supply Business for FY 2017-18 and FY
2018-19 as submitted by AEML-D ( Rs Crore) ............................................................... 141
Table 3-93: Return on Equity for FY 2017-18 for Wires and Supply Business as approved
by the Commission (Rs. Crore) ........................................................................................ 142
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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Table 3-94: Return on Equity for FY 2018-19 for Wires and Supply Business as approved
by the Commission (Rs. Crore) ........................................................................................ 143
Table 3-95 : Interest on Working Capital for Wires Business for FY 2017-18 and FY 2018-
19 as submitted by AEML-D (Rs. Crore) ........................................................................ 144
Table 3-96 : Interest on Working Capital for Supply Business for FY 2017-18 as submitted
by AEML-D (Rs. Crore) .................................................................................................. 144
Table 3-97: Interest on Working Capital for Wires Business for FY 2017-18 approved by
the Commission (Rs. Crore) ............................................................................................. 145
Table 3-98: Interest on Working Capital for Wires Business for FY 2018-19 approved by
the Commission (Rs. Crore) ............................................................................................. 145
Table 3-99: Interest on Working Capital for Supply Business for FY 2017-18 approved by
the Commission ................................................................................................................ 145
Table 3-100: Interest on Working Capital for Supply Business for FY 2018-19 approved by
the Commission ................................................................................................................ 146
Table 3-101: Interest on Consumer Security Deposit for FY 2017-18 and FY 2018-19 as
submitted by AEML-D (Rs. Crore).................................................................................. 147
Table 3-102: Interest on Consumer Security Deposit for FY 2017-18 as approved by
Commission (Rs. crore) .................................................................................................... 147
Table 3-103: Interest on Consumer Security Deposit for FY 2018-19 as approved by
Commission (Rs. crore) .................................................................................................... 147
Table 3-104 : Provision for Bad and Doubtful Debts for FY 2017-18 and FY 2018-19 as
submitted by AEML-D (Rs. Crore).................................................................................. 148
Table 3-105: Provision for Bad and Doubtful Debts for FY 2017-18 and FY 2018-19
approved by the Commission (Rs. Crore) ........................................................................ 148
Table 3-106 : Contribution to Contingency Reserve for Wires Business & Supply Business
for FY 2017-18 as submitted by AEML-D (Rs. Crore) ................................................... 149
Table 3-107 : Contribution to Contingency Reserve for Wires Business & Supply Business
for FY 2018-19 as submitted by AEML-D (Rs. Crore) ................................................... 149
Table 3-108:Contribution to Contingency Reserves for FY 2017-18 for Wires and Supply
Business approved by the Commission (Rs. Crore) ......................................................... 150
Table 3-109:Contribution to Contingency Reserves for FY 2018-19 for Wires and Supply
Business approved by the Commission (Rs. Crore) ......................................................... 150
Table 3-110 : Income Tax Computation for FY 2017-18 as submitted by AEML-D (Rs.
Crore) ............................................................................................................................... 150
Table 3-111 : Income Tax for Wires Business and Supply Business for FY 2017-18 as
submitted by AEML-D (Rs. Crore).................................................................................. 151
Table 3-112 : Income Tax Computation for FY 2018-19 as submitted by AEML-D (Rs.
Crore) ............................................................................................................................... 152
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 11 of 445
Table 3-113 : Income Tax for Wires Business and Supply Business for FY 2018-19 as
submitted by AEML-D (Rs. Crore).................................................................................. 153
Table 3-114: Income Tax for FY 2017-18 as approved by Commission (Rs. crore) ...... 154
Table 3-115: Income Tax for FY 2018-19 as approved by Commission (Rs. crore) ...... 155
Table 3-116: Non-Tariff Income for Wires Business for FY 2017-18 and FY 2018-19 as
submitted by AEML-D (Rs. Crore).................................................................................. 158
Table 3-117: Non-Tariff Income for Supply Business for FY 2017-18 and FY 2018-19, as
submitted by AEML-D (Rs. Crore).................................................................................. 161
Table 3-118: Non-Tariff Income for FY 2017-18 and FY 2018-19 as approved by the
Commission (Rs. Crore) ................................................................................................... 161
Table 3-119: Income from Other Business for FY 2017-18 as submitted by AEML-D (Rs.
Crore) ............................................................................................................................... 162
Table 3-120: Income from Other Business for FY 2018-19 as submitted by AEML-D (Rs.
Crore) ............................................................................................................................... 163
Table 3-121: Income from Other Business for FY 2017-18 as approved by the Commission
(Rs. Crore) ........................................................................................................................ 163
Table 3-122: Income from Other Business for FY 2018-19 as approved by the Commission
(Rs. Crore) ........................................................................................................................ 163
Table 3-123: Efficiency Gains due to Overachievement in Distribution Losses for FY 2017-
18 as submitted by AEML-D ........................................................................................... 164
Table 3-124: Efficiency Gains due to Overachievement in Distribution Losses for FY 2018-
19 as submitted by AEML-D ........................................................................................... 164
Table 3-125: Sharing of Efficiency Gain on account of lower than target Distribution Loss
for FY 2017-18, as approved by Commission ................................................................. 165
Table 3-126: Sharing of Efficiency Gain on account of lower than target Distribution Loss
for FY 2018-19, as approved by Commission ................................................................. 166
Table 3-127: Sharing of Efficiency (Gains)/Loss on deviation in O&M Expenses for FY
2017-18 as submitted by AEML-D (Rs. Crore) ............................................................... 167
Table 3-128: Sharing of Efficiency (Gains)/Loss on deviation in O&M Expenses for FY
2018-19 as submitted by AEML-D (Rs. Crore) ............................................................... 167
Table 3-129: Sharing of Efficiency (Gains)/Loss on deviation in O&M Expenses for FY
2017-18, as approved by the Commission (Rs. Crore) .................................................... 167
Table 3-130: Sharing of Efficiency (Gains)/Loss on deviation in O&M Expenses for FY
2018-19, as approved by Commission (Rs. Crore) .......................................................... 168
Table 3-131: Sharing of Gain/Loss on Interest on Working Capital for FY 2017-18 as
submitted by AEML-D (Rs. Crore).................................................................................. 168
Table 3-132: Sharing of Gain/Loss on Interest on Working Capital for FY 2018-19 as
submitted by AEML-D (Rs. Crore).................................................................................. 168
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 12 of 445
Table 3-133: Sharing of Gain/Loss on Interest on Working Capital for FY 2017-18 as
approved by the Commission (Rs. Crore) ........................................................................ 169
Table 3-134: Sharing of Gain/Loss on Interest on Working Capital for FY 2018-19 as
approved by the Commission (Rs. Crore) ........................................................................ 169
Table 3-135: ARR of Wires Business for FY 2017-18 as submitted by AEML-D (Rs. Crore)
.......................................................................................................................................... 170
Table 3-136: ARR of Wires Business for FY 2018-19 as submitted by AEML-D (Rs. Crore)
.......................................................................................................................................... 170
Table 3-137: ARR for Supply Business in FY 2017-18 as submitted by AEML-D (Rs.
Crore) ............................................................................................................................... 171
Table 3-138: ARR for Supply Business in FY 2018-19 as submitted by AEML-D (Rs.
Crore) ............................................................................................................................... 172
Table 3-139: Combined ARR for Wires Business and Supply Business in FY 2017-18 as
submitted by AEML-D (Rs. Crore).................................................................................. 173
Table 3-140: Combined ARR for Wires Business and Supply Business in FY 2018-19 as
submitted by AEML-D (Rs. Crore).................................................................................. 173
Table 3-141: ARR for Wires Business for FY 2017-18 as approved by Commission (Rs.
Crore) ............................................................................................................................... 174
Table 3-142: ARR for Wires Business for FY 2018-19 as approved by Commission (Rs.
Crore) ............................................................................................................................... 175
Table 3-143: ARR for Supply Business for FY 2017-18 as approved by Commission (Rs.
Crore) ............................................................................................................................... 175
Table 3-144: ARR for Supply Business for FY 2018-19 as approved by Commission (Rs.
Crore) ............................................................................................................................... 176
Table 3-145: Combined ARR for Wires and Supply Business for FY 2017-18 as approved
by the Commission (Rs. Crore) ........................................................................................ 176
Table 3-146: Combined ARR for Wires and Supply Business for FY 2018-19 as approved
by Commission (Rs. Crore) .............................................................................................. 177
Table 3-147: Revenue from Sales (excluding RA) submitted by AEML-D for FY 2017-18
.......................................................................................................................................... 178
Table 3-148: Revenue from Sales (excluding RA) submitted by AEML-D for FY 2018-19
.......................................................................................................................................... 178
Table 3-149: Revenue and Average Billing Rate for FY 2017-18 as approved by
Commission (Rs. Crore) ................................................................................................... 179
Table 3-150: Revenue and Average Billing Rate for FY 2018-19 as approved by
Commission (Rs. Crore) ................................................................................................... 179
Table 3-151: Wheeling Revenue from Change-over and OA Consumers in FY 2017-18 as
submitted by AEML-D (Rs. Crore).................................................................................. 180
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 13 of 445
Table 3-152: Wheeling Revenue from Change-over and OA Consumers in FY 2018-19 as
submitted by AEML-D (Rs. Crore).................................................................................. 180
Table 3-153: Wheeling Revenue from Change-over and OA Consumers in FY 2017-18 as
approved by Commission (Rs. Crore) .............................................................................. 180
Table 3-154: Wheeling Revenue from Change-over and OA Consumers in FY 2018-19 as
approved by Commission (Rs. Crore) .............................................................................. 180
Table 3-155: Revenue from CSS in FY 2017-18 as submitted by AEML-D (Rs. Crore) 181
Table 3-156: Revenue from CSS in FY 2018-19 as submitted by AEML-D (Rs. Crore) 181
Table 3-157: Revenue from CSS in FY 2017-18 as approved by Commission (Rs. Crore)
.......................................................................................................................................... 181
Table 3-158: Revenue from CSS in FY 2018-19 as approved by Commission (Rs. Crore)
.......................................................................................................................................... 181
Table 3-159: Revenue Gap for Wires Business for FY 2017-18 as submitted by AEML-D
(Rs Crore) ......................................................................................................................... 182
Table 3-160: Revenue Gap/(Surplus) for Supply Business in FY 2017-18 as submitted by
AEML-D (Rs. Crore) ....................................................................................................... 182
Table 3-161: Combined Revenue Gap for Wires Business and Supply Business in FY 2017-
18 as submitted by AEML-D (Rs. Crore) ........................................................................ 183
Table 3-162: Revenue Gap for Wires Business for FY 2018-19 as submitted by AEML-D
(Rs Crore) ......................................................................................................................... 183
Table 3-163: Revenue Gap/(Surplus) for Supply Business in FY 2018-19 as submitted by
AEML-D (Rs. Crore) ....................................................................................................... 184
Table 3-164: Combined Revenue Gap for Wires Business and Supply Business in FY 2018-
19 as submitted by AEML-D (Rs. Crore) ........................................................................ 184
Table 3-165: Revenue Gap/(Surplus) for Wires Business for FY 2017-18 as approved by
the Commission (Rs. Crore) ............................................................................................. 185
Table 3-166: Revenue Gap/(Surplus) for Supply Business for FY 2017-18 as approved by
the Commission (Rs. Crore) ............................................................................................. 185
Table 3-167: Combined Revenue Gap for Wires Business and Supply Business in FY 2017-
18 as submitted by AEML-D (Rs. Crore) ........................................................................ 185
Table 3-168: Revenue Gap/(Surplus) for Wires Business for FY 2018-19 as approved by
the Commission (Rs. Crore) ............................................................................................. 186
Table 3-169: Revenue Gap/(Surplus) for Supply Business for FY 2018-19 as approved by
the Commission (Rs. Crore) ............................................................................................. 186
Table 3-170: Combined Revenue Gap for Wires Business and Supply Business in FY 2018-
19 as approved by the Commission (Rs. Crore) ............................................................... 186
Table 3-171: Actual Regulatory Assets Recovery in FY 2017-18 as submitted by AEML-
D (Rs. Crore) .................................................................................................................... 187
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 14 of 445
Table 3-172: Actual Regulatory Assets Recovery in FY 2018-19 as submitted by AEML-
D (Rs. Crore) .................................................................................................................... 187
Table 3-173: Regulatory Asset Over/Under Recovery in FY 2017-18 as approved by the
Commission (Rs. Crore) ................................................................................................... 188
Table 3-174: Actual Regulatory Assets Recovery in FY 2018-19 as approved by the
Commission (Rs. Crore) ................................................................................................... 188
Table 4-1: Estimated OA Consumption in H1 of FY 2019-20 as submitted by AEML-D
(MU) ................................................................................................................................. 189
Table 4-2: Own Sales of Actual H1 and estimated H2 for FY 2019-20 as submitted by
AEML-D (MU) ................................................................................................................ 191
Table 4-3: Estimated Changeover Sales of H1 and H2 of FY 2019-20 as submitted by
AEML-D (MU) ................................................................................................................ 192
Table 4-4: Estimated OA consumption of FY 2019-20 as submitted by AEML-D (MU)
.......................................................................................................................................... 194
Table 4-5: Category-wise CAGR considered for projection of Energy Sales ................. 196
Table 4-6: Category-Wise Own Sales for FY 2019-20 as approved by Commission (MU)
.......................................................................................................................................... 197
Table 4-7: Category-Wise Change-over Sales of FY 2019-20 as approved by Commission
(MU) ................................................................................................................................. 198
Table 4-8: OA Consumption for FY 2019-20 as approved by the Commission (MU) ... 199
Table 4-9: Energy Balance for FY 2019-20 as submitted by AEML-D .......................... 199
Table 4-10: Energy Requirement for FY 2019-20 as submitted by AEML-D (MU) ...... 200
Table 4-11: Energy Balance for FY 2019-20 as approved by the Commission .............. 201
Table 4-12: Energy Requirement of AEML-D for FY 2019-20 as approved by the
Commission ...................................................................................................................... 201
Table 4-13: Power Procurement from ADTPS in FY 2019-20 as submitted by AEML-D
.......................................................................................................................................... 202
Table 4-14: Quantum & Cost of Power Purchase from AEML-G for FY 2019-20 as
approved by Commission ................................................................................................. 202
Table 4-15: Power Purchase Quantum and Cost from VIPL-G in FY 2019-20 as submitted
by AEML-D ..................................................................................................................... 203
Table 4-16: Power Purchase from VIPL-G for FY 2019-20 as approved by the Commission
.......................................................................................................................................... 204
Table 4-17: Power Purchase from DSPPL in FY 2019-20 as submitted by AEML-D .... 204
Table 4-18: Solar RPO Target till FY 2019-20 as submitted by AEML-D ..................... 205
Table 4-19: Power Purchase from DSPPL in FY 2019-20 as approved by the Commission
(MU) ................................................................................................................................. 205
Table 4-20: Cumulative shortfall of Solar RPO Target till FY 2019-20 as approved by the
Commission (MU) ............................................................................................................ 206
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 15 of 445
Table 4-21: Estimated Non-Solar RE Purchase in FY 2019-20 as submitted by AEML-D
.......................................................................................................................................... 207
Table 4-22: Non-Solar RPO target for FY 2019-20 as submitted by AEML-D .............. 207
Table 4-23: Non-Solar RE power purchase for FY 2019-20 as approved by Commission
.......................................................................................................................................... 208
Table 4-24: Cumulative shortfall of Non-Solar RPO Target till FY 2019-20 as approved by
the Commission (MU) ...................................................................................................... 208
Table 4-25: Power Purchase from Short-Term sources for FY 2019-20 as submitted by
AEML-D .......................................................................................................................... 210
Table 4-26: Short Term Power Purchase for FY 2019-20 as provisionally approved by the
Commission ...................................................................................................................... 212
Table 4-27: Sale of Surplus Power in FY 2019-20 as submitted by AEML-D ............... 213
Table 4-28: Transmission Charges for FY 2019-20 as submitted by AEML-D (Rs. Crore)
.......................................................................................................................................... 215
Table 4-29: Transmission Charges for FY 2019-20 approved by Commission (Rs. Crore)
.......................................................................................................................................... 215
Table 4-30: MSLDC Charges for FY 2019-20 as submitted by AEML-D (Rs. Crore) ... 216
Table 4-31: MSLDC Charges for FY 2019-20 approved by Commission (Rs. Crore) ... 216
Table 4-32: Stand-by Charges for FY 2019-20 as submitted by AEML-D (Rs Crore) ... 216
Table 4-33: Stand-by Charges for FY 2019-20 as approved by Commission (Rs. Crore)
.......................................................................................................................................... 217
Table 4-34: Power Purchase for FY 2019-20 as submitted by AEML-D ........................ 217
Table 4-35: Power Purchase for FY 2019-20 approved by the Commission (MU) ........ 218
Table 4-36: Summary of O&M Expenses for FY 2019-20 for Wires Business as submitted
by AEML-D (Rs Crore) ................................................................................................... 219
Table 4-37: Summary of O&M Expenses for FY 2019-20 for Retail Supply Business as
submitted by AEML-D (Rs Crore)................................................................................... 219
Table 4-38: Summary of O&M Expenses for FY 2019-20 for Wires and Retail Supply
Business as submitted by AEML-D (Rs Crore) ............................................................... 219
Table 4-39: O&M Expenses for FY 2019-20 for Wires Business as approved by the
Commission (Rs. Crore) ................................................................................................... 221
Table 4-40: O&M Expenses for FY 2019-20 for Retail Supply Business as approved by the
Commission (Rs. Crore) ................................................................................................... 221
Table 4-41: O&M Expenses for FY 2019-20 for Wires and Retail Supply Business as
approved by the Commission (Rs. Crore) ........................................................................ 221
Table 4-42: Capital Expenditure and Capitalization for Wires Business for FY 2019-20
.......................................................................................................................................... 222
Table 4-43: Capital Expenditure and Capitalization for Retail Supply Business for FY 2019-
20 ...................................................................................................................................... 222
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 16 of 445
Table 4-44: Capitalization approved by the Commission for FY 2019-20 ...................... 224
Table 4-45: Depreciation in FY 2019-20 for Wires Business as submitted by AEML-D (Rs.
Crore) ............................................................................................................................... 224
Table 4-46: Depreciation in FY 2019-20 for Supply Business as submitted by AEML-D
(Rs. Crore) ........................................................................................................................ 225
Table 4-47: Depreciation for Wires Business for FY 2019-20 as approved by the
Commission (Rs. Crore) ................................................................................................... 225
Table 4-48: Depreciation for Supply Business for FY 2019-20 as approved by the
Commission (Rs. Crore) ................................................................................................... 226
Table 4-49: Interest on Loans for FY 2019-20 as submitted by AEML-D (Rs. Crore) ... 226
Table 4-50: Applicable Rate of Interest for FY 2019-20 (Rs. Crore) .............................. 227
Table 4-51: Interest Expenses for FY 2019-20 as approved by the Commission (Rs. Crore)
.......................................................................................................................................... 228
Table 4-52: Return on Equity for FY 2019-20 for Wires Business as submitted by AEML-
D (Rs. Crore) .................................................................................................................... 228
Table 4-53: Return on Equity for FY 2019-20 for Supply Business as submitted by AEML-
D (Rs. Crore) .................................................................................................................... 229
Table 4-54: Return on Equity for Wires Business and Supply Business for FY 2019-20 as
approved by the Commission (Rs. Crore) ........................................................................ 230
Table 4-55:Interest on Working Capital for FY 2019-20 for Wires Business as submitted
by AEML-D (Rs. Crore) .................................................................................................. 231
Table 4-56:Interest on Working Capital for FY 2019-20 for Supply Business as submitted
by AEML-D (Rs. Crore) .................................................................................................. 231
Table 4-57: Interest on Working Capital for Wires Business for FY 2019-20 approved by
the Commission (Rs. Crore) ............................................................................................. 232
Table 4-58: Interest on Working Capital for Supply Business for FY 2019-20 approved by
the Commission (Rs. Crore) ............................................................................................. 232
Table 4-59: Interest on Consumer’s Security Deposit in FY 2019-20 as submitted by
AEML-D (Rs. Crore) ....................................................................................................... 233
Table 4-60: Provision for Bad and Doubtful Debts for FY 2019-20 as submitted by AEML-
D (Rs. Crore) .................................................................................................................... 233
Table 4-61: Provision for Bad and Doubtful Debts for FY 2019-20 approved by the
Commission (Rs. Crore) ................................................................................................... 234
Table 4-62: Contribution to Contingency Reserves in FY 2019-20 for Wires Business as
submitted by AEML-D (Rs. Crore).................................................................................. 234
Table 4-63: Contribution to Contingency Reserves in FY 2019-20 for Supply Business as
submitted by AEML-D (Rs. Crore).................................................................................. 234
Table 4-64: Contribution to Contingency Reserves for FY 2019-20 approved by the
Commission (Rs. Crore) ................................................................................................... 235
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 17 of 445
Table 4-65: DSM Expenses for FY 2019-20 as submitted by AEML-D (Rs. Crore) ...... 235
Table 4-66: Income Tax for FY 2019-20 as submitted by AEML-D (Rs. Crore) ........... 236
Table 4-67: Income Tax for FY 2019-20 approved by the Commission (Rs. Crore) ...... 236
Table 4-68: Non-Tariff Income in FY 2019-20 for Wires Business as submitted by AEML-
D (Rs. Crore) .................................................................................................................... 238
Table 4-69: Non-Tariff Income in FY 2019-20 for Retail Supply Business as submitted by
AEML-D (Rs. Crore) ....................................................................................................... 239
Table 4-70: Non-Tariff Income for FY 2019-20 approved by Commission (Rs. Crore) . 239
Table 4-71: Income from Other Business for FY 2019-20 as submitted by AEML-D (Rs.
Crore) ............................................................................................................................... 241
Table 4-72: Income from Other Business for FY 2019-20 approved by the Commission (Rs.
Crore) ............................................................................................................................... 241
Table 4-73: ARR for Wires Business for FY 2019-20 as submitted by AEML-D (Rs. Crore)
.......................................................................................................................................... 242
Table 4-74: ARR for Supply Business in FY 2019-20 as submitted by AEML-D (Rs. Crore)
.......................................................................................................................................... 242
Table 4-75: Combined ARR for Wires Business and Supply Business in FY 2019-20 as
submitted by AEML-D (Rs. Crore).................................................................................. 243
Table 4-76: ARR for Wires Business for FY 2019-20 approved by the Commission (Rs.
Crore) ............................................................................................................................... 243
Table 4-77: ARR for Supply Business for FY 2019-20 approved by the Commission (Rs.
Crore ................................................................................................................................. 244
Table 4-78: Combined ARR for Wires Business and Supply Business for FY 2019-20
approved by the Commission (Rs. Crore) ........................................................................ 245
Table 4-79: Wheeling Revenue from Change-over and OA Consumers in FY 2019-20 as
submitted by AEML-D (Rs. Crore).................................................................................. 246
Table 4-80: Wheeling Revenue from Change-over & Open Access Consumers in FY 2019-
20 approved by the Commission (Rs. Crore) ................................................................... 246
Table 4-81: Estimated Revenue from CSS in FY 2019-20 as submitted by AEML-D (Rs.
Crore) ............................................................................................................................... 247
Table 4-82: Revenue from CSS in FY 2019-20 approved by the Commission (Rs. Crore)
.......................................................................................................................................... 247
Table 4-83: Estimated Revenue from sale of power in FY 2019-20 as submitted by AEML-
D ....................................................................................................................................... 248
Table 4-84: Total Revenue in FY 2019-20 approved by Commission (Rs. Crore) ......... 248
Table 4-85: Revenue Gap/(Surplus) for Wires Business in FY 2019-20 as submitted by
AEML-D (Rs. Crore) ....................................................................................................... 248
Table 4-86: Revenue Gap/(Surplus) for Supply Business in FY 2019-20 as submitted by
AEML-D (Rs. Crore) ....................................................................................................... 249
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 18 of 445
Table 4-87: Revenue Gap for Wires & Supply Business in FY 2019-20 as submitted by
AEML-D (Rs. Crore) ....................................................................................................... 249
Table 4-88: Provisional Revenue Gap/(Surplus) for the Wires Business for FY 2019-20 as
approved by the Commission (Rs. Crore) ........................................................................ 249
Table 4-89: Provisional Revenue Gap/(Surplus) for the Supply Business for FY 2019-20 as
approved by the Commission (Rs. Crore) ........................................................................ 250
Table 4-90: Total Revenue Gap/Surplus for FY 2019-20 as approved by the Commission
(Rs. Crore) ........................................................................................................................ 250
Table 4-91: Regulatory Assets Recovery in FY 2019-20 as submitted by AEML-D (Rs.
Crore) ............................................................................................................................... 251
Table 4-92: Regulatory Asset Over/Under-recovery in FY 2019-20 approved by
Commission (Rs. Crore) ................................................................................................... 251
Table 5-1: Projected Sales for 4th Control Period as submitted by AEML-D (MU) ....... 253
Table 5-2: Projected OA consumption for 4th Control Period as submitted by AEML-D
(MU) ................................................................................................................................. 253
Table 5-3: Category-wise Direct Sales approved for 4th Control Period (MU) ............... 255
Table 5-4: Category-wise Change-over Sales approved for 4th Control Period (MU) .... 257
Table 5-5: Category-wise OA Consumption approved for 4th Control Period (MU) ..... 259
Table 5-6: Distribution Loss for 4th Control Period submitted by AEML-D .................. 259
Table 5-7: Energy Balance for 4th Control Period as submitted by AEML-D (MU) ...... 260
Table 5-8: Power Purchase Requirement for 4th Control Period as submitted by AEML-D
(MU) ................................................................................................................................. 260
Table 5-9: Distribution Loss approved for 4th Control Period ........................................ 261
Table 5-10: HT and LT losses approved for 4th Control Period ..................................... 262
Table 5-11: Energy Input requirement approved for 4th Control Period (MU) ............... 262
Table 5-12: Energy Availability from ADTPS from FY 2020-21 to FY 2024-25 .......... 263
Table 5-13: Power Purchase from ADTPS from FY 2020-21 to FY 2024-25 ................ 263
Table 5-14: Power Purchase from ADTPS approved by the Commission from FY 2020-21
to FY 2024-25 .................................................................................................................. 264
Table 5-15: Power Purchase from DSPPL for FY 2020-21 to FY 2024-25 .................... 265
Table 5-16: Power Purchase from DSPPL approved by the Commission for FY 2020-21 to
FY 2024-25 ...................................................................................................................... 265
Table 5-17: Energy Availability from Non-Solar for FY 2020-21 to FY 2024-25 (MU) 266
Table 5-18: Power Purchase Cost from Non-Solar for FY 2020-21 to FY 2024-25 (Rs.
Crore) ............................................................................................................................... 266
Table 5-19: Power Purchase from Non-solar Re Purchase approved by the Commission for
FY 2020-21 to FY 2024-25 .............................................................................................. 267
Table 5-20: Power Purchase Cost from new Hybrid RE Sources for FY 2020-21 to FY
2024-25 ............................................................................................................................. 268
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 19 of 445
Table 5-21: Power Purchase Cost from new Hybrid RE Source approved by the
Commission for FY 2020-21 to FY 2024-25 ................................................................... 268
Table 5-22: Solar RPO Shortfall till FY 2020-21 ............................................................ 268
Table 5-23: Non-Solar RPO Shortfall till FY 2020-21 .................................................... 269
Table 5-24: Standalone Solar RPO target and projected solar achievement from FY 2021-
22 to FY 2024-25 ............................................................................................................. 269
Table 5-25: Standalone Non-Solar RPO target and projected Non-Solar achievement from
FY 21-22 to FY 24-25 ...................................................................................................... 269
Table 5-26: Cumulative Solar RPO Shortfall approved by the Commission till FY 2024-25
(MU) ................................................................................................................................. 270
Table 5-27: Cumulative Non-Solar RPO Shortfall approved by the Commission till FY
2024-25 ............................................................................................................................. 270
Table 5-28: Short Term Power Purchase Cost for FY 2020-21 to FY 2024-25 .............. 271
Table 5-29: Short Term Power Purchase Cost approved by the Commission for FY 2020-
21 to FY 2024-25 ............................................................................................................. 272
Table 5-30: Revenue from Surplus Power for FY 2020-21 to FY 2024-25 .................... 272
Table 5-31: Transmission Charges for FY 2020-21 to FY 2024-25 (Rs. Crore) ............. 274
Table 5-32: Transmission Charges approved by the Commission for FY 2020-21 to FY
2024-25 (Rs. Crore) .......................................................................................................... 274
Table 5-33: SLDC Charges for FY 2020-21 to FY 2024-25 (Rs. Crore) ........................ 275
Table 5-34: SLDC Charges approved by the Commission for FY 2020-21 to FY 2024-25
(Rs. Crore) ........................................................................................................................ 275
Table 5-35: Standby Charges for FY 2020-21 to FY 2024-25 (Rs. Crore) ..................... 275
Table 5-36: Standby Charges approved by the Commission for FY 2020-21 to FY 2024-25
(Rs. Crore) ........................................................................................................................ 276
Table 5-37: Power Purchase Cost Projected by AEML-D for 4th Control Period .......... 277
Table 5-38 Power Purchase Cost approved by the Commission for 4th Control Period . 278
Table 5-39 Consumer Growth Rate from FY 2017-18 to FY 2019-20 ............................ 279
Table 5-40 Projected O&M Expenses for Wires and Supply Business ........................... 281
Table 5-41 Total O&M Expenses segregated between Wires & Supply Business .......... 281
Table 5-42: Normative O&M Expenses for FY 2019-20 (Rs. Crore) ............................. 283
Table 5-43: Escalation Rates for 4th Control Period ....................................................... 284
Table 5-44: Normative O&M Expenses approved for 4th Control Period (Rs. Crore) ... 284
Table 5-45: Provisional Actual Submitted by AEML-D for H1 of FY 2019-20 ............. 285
Table 5-46: Capital Expenditure and Capitalisation for 4th Control Period as submitted by
AEML-D for Wire Business (Rs. Crore) ......................................................................... 287
Table 5-47: Capital Expenditure and Capitalisation for 4th Control Period as submitted by
AEML-D for Retail Supply Business (Rs. Crore) ............................................................ 287
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 20 of 445
Table 5-48: Capitalisation against DPR schemes yet to be approved by the Commission
(Rs. Crore) ........................................................................................................................ 288
Table 5-49: Past Trend of Capitalisation for AEML-D (Rs. Crore) ................................ 289
Table 5-50: Capitalisation approved for 4th Control Period (Rs. Crore) ......................... 289
Table 5-51: Depreciation for Wires Business for 4th Control Period as submitted by AEML-
D (Rs. Crore) .................................................................................................................... 290
Table 5-52: Depreciation for Supply Business for 4th Control Period as submitted by
AEML-D (Rs. Crore) ....................................................................................................... 290
Table 5-53: Depreciation approved for Wires Business for 4th Control Period .............. 291
Table 5-54: Depreciation approved for Supply Business for 4th Control Period ............ 291
Table 5-55: Interest on Long-Term Loan for Wires Business for 4th Control Period as
submitted by AEML-D (Rs. Crore).................................................................................. 292
Table 5-56: Interest on Long-Term Loan for Supply Business for 4th Control Period as
submitted by AEML-D (Rs. Crore).................................................................................. 293
Table 5-57: Interest Expenses approved for Wires Business for 4th Control Period ...... 293
Table 5-58: Interest Expenses approved for Supply Business for 4th Control Period ..... 294
Table 5-59: IoWC for Wires Business for 4th Control Period as submitted by AEML-D (Rs.
Crore) ............................................................................................................................... 294
Table 5-60: IoWC for Supply Business for 4th Control Period as submitted by AEML-D
(Rs. Crore) ........................................................................................................................ 295
Table 5-61: IoWC approved for Wires Business for 4th Control Period (Rs. Crore) ...... 295
Table 5-62: IoWC approved for Supply Business for 4th Control Period (Rs. Crore) .... 295
Table 5-63: Interest on Security Deposit for 4th Control Period as submitted by AEML-D
(Rs. Crore) ........................................................................................................................ 296
Table 5-64: Interest on CSD approved for the Supply Business for 4th Control Period (Rs.
Crore) ............................................................................................................................... 296
Table 5-65: Return on Equity for Wires Business for 4th Control Period as submitted by
AEML-D (Rs. Crore) ....................................................................................................... 297
Table 5-66: Return on Equity for Supply Business for 4th Control Period as submitted by
AEML-D (Rs. Crore) ....................................................................................................... 298
Table 5-67: RoE approved for Wires Business for 4th Control Period (Rs. Crore) ........ 299
Table 5-68: RoE approved for Supply Business for 4th Control Period (Rs. Crore) ....... 299
Table 5-69: Provision for Bad Debts for 4th Control Period as submitted by AEML-D (Rs.
Crore) ............................................................................................................................... 300
Table 5-70: Provision for Bad Debts for 4th Control Period approved by the Commission
(Rs. Crore) ........................................................................................................................ 300
Table 5-71: Contribution to Contingency Reserve for Wires Business and Supply Business
for 4th Control Period as submitted by AEML-D (Rs. Crore) ......................................... 301
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Table 5-72: Contribution to Contingency Reserve approved for Wires Business for 4th
Control Period (Rs. Crore) ............................................................................................... 301
Table 5-73: Contribution to Contingency Reserve approved for Retail Supply Business for
4th Control Period (Rs. Crore) ......................................................................................... 301
Table 5-74: Non-Tariff Income of Wires Business for 4th Control Period as submitted by
AEML-D (Rs. Crore) ....................................................................................................... 303
Table 5-75: Non-Tariff Income of Retail Supply Business for 4th Control Period as
submitted by AEML-D (Rs. Crore).................................................................................. 303
Table 5-76: Non-Tariff Income approved for 4th Control Period (Rs. Crore) ................ 304
Table 5-77: DSM Expenses submitted by AEML-D for 4th Control Period (Rs. Crore) 304
Table 5-78: DSM Cost approved for 4th Control Period (Rs. Crore) .............................. 305
Table 5-79: Income from Other Business submitted by AEML-D for 4th Control Period
(Rs. Crore) ........................................................................................................................ 305
Table 5-80: Income from Other Business approved for 4th Control Period (Rs. Crore) . 305
Table 5-81: ARR for Wires Business for 4th Control Period as submitted by AEML-D (Rs.
Crore) ............................................................................................................................... 306
Table 5-82: ARR for Supply Business for 4th Control Period as submitted by AEML-D (Rs.
Crore) ............................................................................................................................... 307
Table 5-83: Approved ARR for Wires Business for 4th Control Period (Rs. Crore) ...... 308
Table 5-84: Approved ARR for Supply Business for 4th Control Period (Rs. Crore) .... 308
Table 5-85: Approved ARR for Combined Wires Business and Supply Business for 4th
Control Period (Rs. Crore) ............................................................................................... 310
Table 6-1: Incremental Revenue Gap/(Surplus) for FY 2017-18 .................................... 312
Table 6-2: Incremental Revenue Gap/(Surplus) approved for FY 2017-18 ..................... 312
Table 6-3: Revenue Gap/(Surplus) for FY 2018-19 ......................................................... 313
Table 6-4: Revenue Gap/(Surplus) Approved for FY 2018-19 ........................................ 313
Table 6-5: Provisional Revenue Gap/(Surplus) for FY 2019-20 ..................................... 313
Table 6-6: Provisional Revenue Gap/(Surplus) Approved for FY 2019-20 .................... 314
Table 6-7: Carrying/(Holding) cost till FY 2019-20 on Wires Gap /(Surplus) of FY 2017-
18 ...................................................................................................................................... 315
Table 6-8: Carrying/(Holding) cost till FY 2019-20 on Supply Gap/(Surplus) of FY 2017-
18 ...................................................................................................................................... 315
Table 6-9: Carrying/(Holding) cost till FY 2019-20 on Wires and Supply Gap/(Surplus) of
FY 2017-18 ...................................................................................................................... 315
Table 6-10: Carrying/(Holding) cost till FY 2019-20 on Wires Gap/(Surplus) of FY 2018-
19 ...................................................................................................................................... 316
Table 6-11: Carrying/(Holding) cost till FY 2019-20 on Supply Gap/(Surplus) of FY 2018-
19 ...................................................................................................................................... 316
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Table 6-12: Carrying/(Holding) cost till FY 2019-20 on Wires and Supply Gap/(Surplus)
of FY 2018-19 .................................................................................................................. 316
Table 6-13: Carrying/(Holding) cost till FY 2020-21 on Approved Wires Gap/(Surplus) of
FY 2017-18 (Rs. Crore) ................................................................................................... 317
Table 6-14: Carrying/(Holding) cost till FY 2020-21 on Approved Supply Gap/(Surplus) of
FY 2017-18 (Rs. Crore) ................................................................................................... 318
Table 6-15: Carrying/(Holding) cost till FY 2020-21 on Approved Wires & Supply
Gap/(Surplus) of FY 2017-18 (Rs. Crore) ....................................................................... 318
Table 6-16: Carrying/(Holding) cost till FY 2020-21 on Approved Wires Gap/(Surplus) of
FY 2018-19 (Rs. Crore) ................................................................................................... 318
Table 6-17: Carrying/(Holding) cost till FY 2020-21 on Approved Supply Gap/(Surplus) of
FY 2018-19 (Rs. Crore) ................................................................................................... 319
Table 6-18: Carrying/(Holding) cost till FY 2020-21 on Approved Wires & Supply
Gap/(Surplus) of FY 2018-19 (Rs. Crore) ....................................................................... 319
Table 6-19: RA Recovery Allowed Vs Actual / estimated RA Recovery ....................... 320
Table 6-20: RA Principal and RA Carrying Cost ............................................................ 320
Table 6-21: Under/(Over) recovery in RA principal along with carrying/(holding) cost till
FY 2019-20 ...................................................................................................................... 321
Table 6-22: RA Principal and RA Carrying Cost Recovery approved by the Commission
.......................................................................................................................................... 321
Table 6-23: Under/(Over) recovery in RA principal along with carrying/(holding) cost
approved till FY 20202-21 (Rs. Crore) ............................................................................ 322
Table 6-24: Under Recovery of RA Carrying Cost .......................................................... 324
Table 6-25: Under Recovery of RA Carrying Cost approved by the Commission (Rs. Crore)
.......................................................................................................................................... 325
Table 6-26: Provisional FBSM Pool cost for FY 2018-19 and FY 2019-20 ................... 328
Table 6-27: Recovery of Cumulative Revenue Gap / Surplus till FY 2020-21 (Rs. Crore)
.......................................................................................................................................... 329
Table 6-28: Approved Cumulative Revenue Gap/(Surplus) of Wires Business till FY 2020-
21 (Rs. Crore) ................................................................................................................... 330
Table 6-29: Approved Cumulative Revenue Gap/(Surplus) of Supply Business till FY
2020-21 (Rs. Crore) .......................................................................................................... 330
Table 6-30: Approved Cumulative Revenue Gap/(Surplus) of combined Distribution
Business till FY 2020-21 (Rs. Crore) ............................................................................... 331
Table 6-31: Proposed Tariff Increase/(Decrease) in each year of Control Period ........... 332
Table 6-32: Average Cost of Supply for Wires Business approved by the Commission 333
Table 6-33: Average Cost of Supply for Supply Business approved by the Commission
.......................................................................................................................................... 334
Table 6-34: Combined Average Cost of Supply approved by the Commission .............. 334
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Table 6-35: Combined Average Cost of Supply approved by the Commission .............. 335
Table 6-36: Wheeling Charges proposed by AEML-D for 4th Control Period ............... 336
Table 6-37: Existing Wheeling Charges and Proposed Wheeling Charges (Rs./ kWh) .. 337
Table 6-38: Revenue from Wheeling Charges from Changeover & OA consumers ....... 337
Table 6-39: Approved Wheeling Charges ........................................................................ 338
Table 6-40: Revenue from Wheeling Charges (Rs. Crore) .............................................. 338
Table 6-41: Existing CSS and CSS Proposed by AEML-D (Rs/kWh) ............................ 338
Table 6-42: Proposed CSS for consumer categories with load more than 20 kW (Rs/kVAh)
.......................................................................................................................................... 340
Table 6-43: Revenue from Proposed CSS ........................................................................ 340
Table 6-44: Transmission and Wheeling Charges considered by the Commission (Rs./kWh)
.......................................................................................................................................... 341
Table 6-45: Approved CSS for FY 2020-21 to FY 2024-25 (Rs/kWh) ........................... 341
Table 6-46: Approved CSS for FY 2020-21 to FY 2024-25 (Rs/kVAh) ......................... 342
Table 6-47: VCOS from FY 2020-21 to FY 2024-25 as submitted by AEML-D (Rs/kWh)
.......................................................................................................................................... 344
Table 6-48: Existing and Proposed Fixed Charges and Demand Charges ....................... 348
Table 6-49: Percentage of Fixed Cost Recovery from Revenue from Fixed / Demand
Charges ............................................................................................................................. 349
Table 6-50: Existing and Proposed Energy Charges (Rs/kWh) ....................................... 351
Table 6-51: Category-wise Power Factor ......................................................................... 352
Table 6-52: Energy Charges in kVAh terms (Rs/kVAh) ................................................. 353
Table 6-53: Category-wise Cross Subsidy Proposed by AEML-D .................................. 355
Table 6-54: Category-wise Cross Subsidy approved by the Commission (%) ................ 357
Table 6-55: No. of consumers whose cheques bounce multiples times within a year ..... 366
Table 6-56: Consumer and sales details for categories identified for merging by the
Commission ...................................................................................................................... 372
Table 6-57: Summary of categories merged by the Commission .................................... 374
Table 6-59: Proposed Grid Support Charges for FY 2020-21 to FY 2024-25 ................. 389
Table 7-1: Approved Schedule of Charges ...................................................................... 394
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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List of Abbreviations
A&G Administrative and General
AAD Advance Against Depreciation
ABR Average Billing Rate
ACoS Average Cost of Supply
AEML Adani Electricity Mumbai Limited
AEML-D Adani Electricity Mumbai Limited – Distribution
AEML-G Adani Electricity Mumbai Limited – Generation
AEML-T Adani Electricity Mumbai Limited – Transmission
AIH All-in-Hire
AMNEPL Abhijeet MADC Nagpur Energy Pvt. Ltd.
APR Annual Performance Review
ARR Aggregate Revenue Requirement
ASCI Administrative Staff College of India
Appellate Tribunal for Electricity
ATL Adani Transmission Limited
BEST Brihanmumbai Electric Supply & Transport Undertaking
BIS Bureau of Indian Standards
BPL Below Poverty Line
BPP Bilateral Power Purchase
BUEUS Bharatiya Udhami Evam Upbhokta Sangh
CAGR Compound Annual Growth Rate
Capex Capital Expenditure
CBA Cost Benefit Analysis
CERC Central Electricity Regulatory Commission
CGRF Consumer Grievance Redressal Forum
CPD Coincident Peak Demand
CPI Consumer Price Index
CSD Consumer Security Deposit
CSS Cross Subsidy Surcharge
DERC Delhi Electricity Regulatory Commission
DGCEI Directorate General of Central Excise Intelligence
DISCOM Distribution Company
DMRC Delhi Metro Rail Corporation
DPC Delayed Payment Charge
DPR Detailed Project Report
DSM Demand Side Management
DSPPL Dhursar Solar Power Plant Ltd.
DSS Distribution Sub-station
DTPS Dahanu Thermal Power Station
EA, 2003 Electricity Act, 2003
ECS Electronic Clearing System
EPA Energy Purchase Agreement
FAC Fuel Adjustment Cost
FBSM Final Balancing and Settlement Mechanism
FCR Fixed Cost Reconciliation
FY Financial Year
G, T & D Generation, Transmission and Distribution
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G<>T Generation - Transmission Interface
GFA Gross Fixed Assets
GoM Government of Maharashtra
GST Goods and Services Tax
HT High Tension
IDC Interest During Construction
IDEMI Institute for Design of Electrical Measuring Instruments
IEX Indian Energy Exchange
IGRC Internal Grievance Redressal Cell
InSTS Intra-State Transmission System
IoWC Interest on Working Capital
IT Income Tax
IT/ITeS Information Technology / Information Technology enabled
Services
kVA kilo Volt Ampere
kW Kilo Watt
kWh Kilo Watt hour
KYC Know Your Customer
LCC Load Control Centre
LMC Load Management Charges
LT Low Tension
MAT Minimum Alternate Tax
MCGM Municipal Corporation of Greater Mumbai
MCLR Marginal Cost of Lending Rate
MD Maximum Demand
MD Charges Maximum Demand Charges
MERC/Commission Maharashtra Electricity Regulatory Commission
MMOPL Mumbai Metro One Private Limited
MOD Merit Order Dispatch
MSEDCL Maharashtra State Electricity Distribution Company Ltd.
MSLDC Maharashtra State Load Despatch Centre
MSME Micro Small and Medium Enterprises
MTPR Mid-Term Performance Review
MTR Mid-Term Review
MU Million Units
MVA Mega-Volt Ampere
MW Mega Watt
MYT Multi Year Tariff
MYT (First Amendment)
Regulations, 2017
Maharashtra Electricity Regulatory Commission (Multi
Year Tariff) (First Amendment) Regulations, 2017
MYT Regulations, 2011 MERC (Multi Year Tariff) Regulations, 2011
MYT Regulations, 2015 MERC (Multi Year Tariff) Regulations, 2015
MYT Regulations, 2019 MERC (Multi Year Tariff) Regulations, 2019
NCD Non-convertible Debentures
NCPD Non-Coincident Peak Demand
NTI Non-Tariff Income
O&M Operation and Maintenance
OA Open Access
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PAN Permanent Account Number
PBT Profit Before Tax
PPA Power Purchase Agreement
PS Public Services
PV Photo Voltaic
R&M Repair and Maintenance
RE Renewable Energy
REC Renewable Energy Certificate
REGSL Reliance Electric Generation and Supply Pvt. Ltd.
RInfra Reliance Infrastructure Limited
RInfra-D Reliance Infrastructure Limited- Distribution Business
RInfra-G Reliance Infrastructure Limited- Generation Business
RInfra-T Reliance Infrastructure Limited- Transmission Business
RoC Registrar of Companies
RoE Return on Equity
RPO Renewable Purchase Obligation
RPO Regulations, 2016 MERC (Renewable Purchase Obligation, its Compliance
and implementation of REC framework) Regulations, 2016
RPO Regulations, 2019 MERC (Renewable Purchase Obligation, its Compliance
and implementation of REC framework) Regulations, 2019
RTC Round the Clock
RPS Renewable Purchase Specification
RTS Roof Top Solar
SAIDI System Average Interruption Duration Index
SBAR State Bank of India Advance Rate
SBI PLR State Bank of India Prime Lending Rate
SCADA Supervisory Control and Data Acquisition
SLDC State Load Despatch Centre
SoC Schedule of Charges
T<>D Transmission - Distribution Interface
Tariff Regulations MERC (Terms and Conditions of Tariff) Regulations, 2005
TBIA Thane Belapur Industries Association
TL Transmission Loss
TOD Time of Day
TOSE Tax on Sale of Electricity
TPC-D The Tata Power Company-Distribution
TSU Transmission System User
TVS Technical Validation Session
UI Unscheduled Interchange
VCoS Voltage-wise Cost of Supply
VIPL Vidarbha Industries Private Limited
WL Wheeling Loss
WPCL Wardha Power Company Limited
WPI Wholesale Price Index
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BACKGROUND AND BRIEF HISTORY
1.1 BACKGROUND
Adani Electricity Mumbai Limited (AEML) is an integrated Utility engaged in Generation,
Transmission and Distribution of electricity.
The Commission vide its Order dated 28 June 2018, in Case No. 140 of 2017, approved the
assignment of the Distribution Licence of Reliance Infrastructure Limited (RInfra) to
Reliance Electric Generation and Supply Pvt. Ltd. (REGSL). In the same Order, the
Commission has also approved the sale of 100% shareholding of REGSL to Adani
Transmission Limited (ATL). RInfra-D, vide its submission dated 5 September, 2018,
requested the Commission for substitution of name ‘M/s. Reliance Infrastructure Limited’
(RInfra) with ‘M/s. Adani Electricity Mumbai Ltd.’ (formerly known as M/s. Reliance
Electric Generation and Supply Limited – REGSL) as per the Order dated 19 January , 2017
and___ November 2017, by Hon’ble the Bombay High Court. RInfra-D also enclosed the
copy of the Certificate of Incorporation pursuant to change in name from ‘Reliance Electric
Generation and Supply Limited’ to ‘Adani Electricity Mumbai Limited’ issued by Registrar
of Companies (RoC).
The Distribution Business of AEML, i.e., AEML-D, has a Distribution Licence for the
distribution and supply of electricity in parts of Mumbai, for a period of 25 years with effect
from 16 August , 2011.
1.2 MYT ORDER FOR 3RD CONTROL PERIOD FROM FY 2016-17 TO 2019-20
In its Order dated 21 October , 2016 in Case No. 34 of 2016 (‘MYT Order’), the
Commission carried out the true-up for FY 2014-15, provisional true up for FY 2015-16
and approved the ARR for FY 2016-17 to FY 2019-20 and retail Tariffs and Wheeling
Charges for FY 2016-17 to FY 2019-20, in accordance with the MERC (Multi-Year Tariff)
Regulations, 2015 (MYT Regulations, 2015).
1.3 MID-TERM REVIEW ORDER FOR 3RD CONTROL PERIOD
In its Order dated 12 September , 2018 in Case No. 200 of 2017 (‘MTR Order’), the
Commission approved the true-up for FY 2015-16 and FY 2016-17, provisional true-up for
FY 2017-18, and revised ARR and Tariff for FY 2018-19 and FY 2019-20.
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1.4 MYT REGULATIONS, 2019
The Commission notified the MERC (Multi-Year Tariff) Regulations, 2019 (MYT
Regulations, 2019) on 1 August, 2019 for the 4th Control Period from FY 2020-21 to FY
2024-25.
1.5 PETITION FOR APPROVAL OF MULTI YEAR TARIFF, ADMISSION OF
THE PETITION AND PUBLIC PROCESS
AEML-D filed its Petition for approval of truing up for FY 2017-18 and FY 2018-19,
provisional truing up for FY 2019-20 and ARR and Tariff for FY 2020-21 to FY 2024-25
on 30 November, 2019. The Commission sought replies on the preliminary data gaps raised
on 10 December, 2019 and also certain other information from AEML-D, replies to which
were submitted by AEML-D on 20 December, 2019.
The Technical Validation Session (TVS) was held on 24 December, 2019. The list of
persons who attended the TVS is at Appendix-1. The Commission asked AEML-D to
provide additional information and clarifications on the issues raised during the TVS.
AEML-D submitted its replies and filed its revised MYT Petition on 7 January, 2020, with
the following main prayers:
1) “Admit the petition as submitted herewith;
2) Approve the actual revenue gap/surplus arising on account of truing-up for FY
2017-18 and FY 2018-19 along with the carrying cost as worked out in this petition;
3) Approve the provisional ARR and revenue gap/surplus for FY 2019-20 as worked
out in this petition;
4) Approve the cumulative revenue gap till FY 2019-20 as worked out in this petition
and allow recovery of the same in the manner as presented in this petition.
5) Approve the ARR for each year of Control Period FY 2020-21 to FY 2024-25, as
projected in this Petition;
6) Approve the Retail Tariffs, Wheeling Charges and Cross-Subsidy Surcharge as
proposed in this Petition for each year of the Control Period FY 2020-21 to FY
2024-25;
7) Approve the revisions in Schedule of Charges as proposed in this petition;
8) Take on record the change in Registered Address of Adani Electricity Mumbai
Limited;
9) Allow for specific deviations from the MYT Regulations, 2015 and MYT
Regulations, 2019, wherever sought in this petition;
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10) Grant specific prayers, wherever made in this petition, for reconsideration /
relaxation of rulings made in previous Tariff Orders;
11) Allow additions / alterations / modifications / changes to the Petition at a future
date;
12) Allow any other relief, order or direction, which the Hon’ble Commission deems fit
to be issued;”
The Commission admitted the MYT Petition on January 8, 2020. In accordance with
Section 64 of the Electricity Act, 2003 (EA 2003), the Commission directed AEML-D to
publish its Petition in the prescribed abridged form and manner so as to ensure adequate
public participation, and to reply expeditiously to all the suggestions and objections
received. AEML-D issued a Public Notice inviting suggestions and objections from the
public on its Petition. The Public Notice was published in the daily newspapers, viz,
Hindustan Times and Indian Express (English), on 10 January, 2020 and in Loksatta and
Saamna (Marathi) on 11 January 2020.
The Petition and its summary were made available for inspection/purchase at AEML-D’s
offices and on its website (www.adanielectricity.com). The Public Notice and Executive
Summary of the Petition were also made available on the websites of the Commission
(www.merc.gov.in) in downloadable format. The Public Notice stipulated that the
suggestions and objections, in English or Marathi, may be filed with proof of service on
AEML-D, latest by 31 January, 2020.
The Commission received written suggestions and objections, as well as oral submissions
on various issues at the Public Hearing held on 4 February, 2020 at 10:00 hrs at Centrum
Hall, First floor, World Trade Centre, Centre No. 1, Cuffe Parade, Mumbai 400005. The
list of persons who attended the Public Hearing is at Appendix-2.
The Commission has ensured that the due process contemplated under law to ensure
transparency and public participation was followed at every stage and adequate opportunity
was given to all concerned to file their say.
The suggestions and objections made in writing as well as during the Public Hearing, along
with AEML-D’s responses and the Commission’s rulings, have been summarised in
Chapter 2 of this Order.
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1.6 ORGANISATION OF THE ORDER
This Order consists of the following chapters as outlined below:
▪ Chapter 1 provides a brief history of the regulatory process undertaken by the
Commission. A list of abbreviations with their expanded forms has been included.
▪ Chapter 2 lists out the suggestions and objections received in writing as well as during
the Public Hearing. These have been summarized issue-wise, followed by the response
of AEML-D and the rulings of the Commission.
▪ Chapter 3 details the Truing-up of FY 2017-18 and FY 2018-19.
▪ Chapter 4 details the Provisional Truing up of FY 2019-20
▪ Chapter 5 details the ARR for FY 2020-21 to FY 2024-25.
▪ Chapter 6 details the Cumulative Revenue Gap/(Surplus), Tariff Philosophy and
category-wise Tariffs for FY 2020-21 to FY 2024-25.
▪ Chapter 7 details the changes approved in the Schedule of Charges
▪ Chapter 8 details the Applicability of the Order
▪ Annexure I details the revenue from revised tariffs for FY 2020-21 to FY 2024-25
▪ Annexure II details the approved Tariff Schedule for FY 2020-21 to FY 2024-25
▪ Appendix-1: List of persons who attended Technical Validation Session (TVS) dated
24 December, 2019
Appendix-2: List of persons who attended Public Hearing dated 04 February, 2020
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SUGGESTIONS/OBJECTIONS, AEML-D’S RESPONSES
AND COMMISSION’S RULING
1.7 POWER PURCHASE COST
The Tata Power Company Limited (Distribution) [TPC-D] submitted that AEML-D has
neither considered fixed cost of VIPL for FY 2019-20, nor has it considered the past Gap
pertaining to VIPL in the Tariff petition.
TPC-D submitted that in the proposed MYT Petition of AEML-D, it is heavily reliant on
the short-term / infirm sources of power and has not presented any Power Purchase plan for
the entire Control Period. TPC-D also submitted that Renewable Energy (RE) power being
infirm, AEML-D may have to procure power from real time markets to meet the sudden
demands on account of unpredictability of RE power, the cost of which cannot be known
upfront and would be passed onto consumers. TPC-D submitted that the Commission
should factor in these costs while approving the power purchase of AEML-D as FAC cannot
be a tool to suppress tariffs and subsequently recover full costs through FAC.
TPC-D stated that AEML-D has considered a rate of Rs. 3.50/kWh for deriving the short-
term power purchase cost for the 4th Control Period, which seems to be lower considering
the actual short-term power purchase rate for FY 2018-19. TPC-D submitted that typically
the actual power purchase rate experienced in the truing up year is considered for projection
of the ensuing years.
Shri Mahaveer Kumar Jain suggested that solar power should be used to meet internal
electricity requirement of AEML-D’s offices, as it will save energy cost. Though in
previous MTR Petition of AEML-D, it was stated that 6 offices of AEML-D have got a
total of 80kWp solar power generation, it is not sufficient and AEML-D should go for solar
in each of its buildings/structures having capability of installation of Solar.
Shri Ashok Pendse submitted that there may be severe impact on AEML-D Tariff to the
tune of Rs. 1600 Crore due to VIPL-G’s pending MTR Petition and requested the
Commission to issue the order on VIPL-G’s Petition before passing the Order on present
MYT Petition of AEML-D.
Shri Ashok Pendse also submitted that for Power Purchase for FY 2020-21, AEML-D has
considered the proposed rate of Rs. 3.35/kWh for the hybrid Solar-Wind project rather than
the approved rate of Rs. 3.24/kWh, which has resulted in an additional impact of Rs. 340
Crore, and which needs modification. Shri Pendse further stated that short-term power
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 32 of 445
purchase rate has been assumed at Rs. 3.50/kWh, as compared to the rate of Rs. 3.30/kWh
that can be achieved through long-term power purchase. Shri Pendse added that the rate for
purchase from AEML-G is Rs 4.63 for five years. Mumbai has a problem of transmission
constraints, which is likely to be eased in about two years, and when AEML-G PPA will
come for review. Power should be purchased via competitive bidding, instead of depending
on costly source.
M/s Modern Manufacturing Company and Others submitted that AEML-D is planning to
procure 66% of annual power requirement from the Power Exchange, which does not
guarantee certainty of proposed tariff trajectories. They also requested to scrutinize AEML-
D’s proposal (VIPL’s liability, FBSM Settlement payment) thoroughly to examine whether
they have hidden any cost leading to an unfair competitive situation.
Shri Pavan Kapoor submitted that AEML-D has entered into long-term purchase of power
for only 1/3rd of its power supply requirement. The remaining power requirement is planned
to be procured through short-term sources, which is subjected to market fluctuation. Shri
Kapoor was apprehensive that any increase in prices of short-term power sources would be
passed on to the consumer through FAC and suggested the Commission to either force
AEML-D to procure more power from long-term sources or to put a cap on FAC and share
the burden of power cost escalation beyond the proposed rate of power procurement for
short-term power purchase.
AEML-D’s Response
On the issue of non-consideration of VIPL-G fixed cost and past Gap, AEML-D replied
that VIPL-G is under shut down from January 2019 and the availability of VIPL in FY
2019-20 till date has been zero. Accordingly, no Fixed Charges are payable to VIPL-G in
FY 2019-20. As regards inclusion of the past gap of VIPL-G, AEML-D cannot
hypothetically consider any amount and un-necessarily show a tariff increase as that would
mean proposing to recover the costs which are neither incurred, nor accrued and not having
any certainty of accrual, either.
AEML-D submitted that its Power Purchase plan is robust, as it not only has base load
power from ADTPS, but it shall also have hybrid RE from FY 2021-22, which will be
available from solar during the day and from wind during the off-peak night times. This
allows the availability of power to closely match the demand pattern, as opposed to
contracting long-term thermal power which will be available on RTC basis, leading to
surplus and its consequential cost on consumers. Further, the short-term market is fairly
liquid in the present scheme of things, which ensures both availability and stable pricing.
Going forward, developments such as Real-Time Market and Market Based Economic
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Dispatch will only allow even greater availability of short-term power and reduction in
prices. AEML-D also takes initiatives such as Banking, where it absorbs surplus power
available in other States when AEML-D needs it and vice versa. These arrangements,
including short-term procurement, instead of procurement from VIPL-G, has helped bring
down the cost of power of AEML-D in FY 2018-19 and FY 2019-20 and there is no reason
why the same would not continue to bear fruit going forward.
As regards the projected short-term power purchase rate, AEML-D submitted that TPC-D
has also considered short term rate of Rs. 3.50/kWh for deriving the short-term power
purchase cost for 4th Control Period in its MYT Petition. The rate of short-term power based
on actual short-term purchase in H1 of FY 19-20 for AEML-D is Rs. 3.80/kWh. AEML-D
has procured 1,558.37 MU of short-term power through bilateral mechanism on RTC basis
in H2 of FY 2019-20. Thus, the weighted average rate of RTC power discovered through
bids is Rs. 3.60/kWh. Considering the downward trend of short-term price, AEML-D has
considered the rate of Rs. 3.50/kWh for future. FAC is anyway a mechanism provided in
the Electricity Act, 2003 to recover additional power purchase cost over what is approved,
and that applies equally to TPC-D as well.
AEML-D submitted that it has installed solar PV modules at six office locations so far and
more will be installed in future.
AEML-D submitted that at the time of submission of MYT Petition, the Order in Case No.
281 of 2019 had not been issued. Accordingly, AEML-D has considered the rate at Rs.
3.35/kWh in accordance with the Petition for adoption of tariff in Case No. 281 of 2019.
AEML-D submitted that it carries out procurement of short-term power either through
Power Exchanges or through MoP DEEP Portal. Even bilateral procurement, if any, is at
Exchange-linked rates only and hence, the discovered rates are competitive and as per
market conditions. The actual rate would be different for different times of day and cannot
be forecast with any certainty for a five-year period. It has been assumed as Rs. 3.50 per
unit for the purposes of the Petition. Any variation in power purchase rate shall be adjusted
in FAC.
AEML-D submitted that the observation about long-term thermal power availability at Rs.
3.30 per unit is far from realistic. Further, the MYT Petition of AEML-G (Case No. 298 of
2019) elaborates on the various advantages of ADTPS and the justification of why PPA
should be extended.
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As regards the issue of procurement of 66% of power from Exchange and consequent
uncertainty of tariff trajectories, AEML-D submitted that it has entered into a contract for
procurement of wind-solar hybrid power, which, as projected in the Petition, will be
available from FY 2021-22. Thereafter, the purchase from short-term sources will reduce.
The average annual Round the Clock short-term power rate realised by AEML-D from
Power Exchanges since FY 2014-15 till Dec. 2019 is in the range of Rs. 2.71 to 4.24 per
unit, with the average being Rs. 3.41 per unit. Such consistent trend leads a fair degree of
certainty to the ARR forecast, where short-term price is estimated at Rs. 3.50 per unit.
AEML-D further submitted that short-term purchase allows flexibility to AEML-D for
buying power as and when required rather than being saddled with surplus power during
off-peak hours, which is sold at a loss and which burdens the tariff of the consumers.
AEML-D submitted that all crystallized liabilities, including provisional liability towards
FBSM settlement of FY 2018-19 and FY 2019-20 are included in its projections. AEML-
D has even included estimated FCR liability in its ARR, which is likely to arise as a result
of the Commission’s Order.
AEML-D submitted that based on the existing tie-ups for power procurement, the share of
long-term procurement should increase to around 65%-70% of the total power requirement
in FY 2021-22. In any event, short-term procurement is made today from a very liquid
market, which ensures that neither prices nor availability is volatile. However, as a
Licensee, AEML-D continuously explores cheaper alternatives of power and will therefore,
take future actions depending on the market conditions, availability and the economic long-
term/ medium-term alternatives as may be available.
Commission’s Ruling
As regards non-consideration of power purchase from VIPL-G by AEML-D in its Power
Procurement Plan, the PPA has been terminated by AEML-D, which has been upheld by
the Commission. Further, VIPL-G’s availability was very low in FY 2018-19 and zero in
FY 2019-20 due to non-availability of coal. Though this has increased AEML-D’s reliance
on short-term sources of power, it has also benefited AEML-D in terms of reduction of
power purchase cost. As regards the impact of the past period true-up of VIPL-G, the
Petition filed by VIPL-G in this regard is pending with the Commission, on account of the
matter being sub-judice before the Hon’ble Supreme Court.
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The Commission has considered the cost of Wind-Solar Hybrid at the rate of Rs. 3.24 per
unit as stated in the Order on adoption of the competitively discovered rate. The
Commission has considered the rate of Rs. 3.50 per unit for short term sources in line with
the submission of AEML-D.
The Commission’s analysis of the power purchase quantum from various sources and the
rate of power purchase is detailed in the respective Chapters of this Order, along with the
observations on the high reliance on short-term power by AEML-D.
1.8 CATEGORISATION AND TARIFF DETERMINATION
TPC-D submitted that AEML-D has projected its tariff based on the Voltage-wise Cost of
Supply (VCoS) instead of Average Cost of Supply (ACoS). TPC-D stated that the Tariff
should be based strictly on ACoS but taking into account cost of supply at different Voltage
levels according to Regulation 91 of the MYT Regulations, 2019.
TPC-D submitted that the cross-subsidy provided to 0-100-units residential category
consumers by AEML-D is significantly higher as compared to that by other Distribution
Licensees, hence, AEML-D’s contentions in this regard in the Petition are not correct.
Shri Pavan Kapoor and several others above 100 in numbers (have submitted exactly
identitical comments, some have only signed the letter), stated that AEML-D has reduced
the Tariff of HT Commercial and Industrial Consumers and increased the Tariff of
residential consumers so much that the proposed Tariff of residential consumers having
consumption more than 100 units is more than the proposed tariff of HT and LT
Commercial and Industrial Consumers. Shri Kapoor stated that AEML-D’s proposal was
very unfair and requested the Commission to reduce tariff of residential category
substantially.
Shri Ashok Pendse submitted that for the first time, residential consumers consuming less
than 300 units per month have become cross-subsidizing consumers, as per AEML-D’s
tariff proposal. Shri Pendse requested the Commission to not allow this methodology to
propagate.
Shri Rakshpal Abrol, on behalf of Bhartiya Udhami Evam Upbhokta Sangh (BUEUS),
submitted that AEML-D does not adhere to the Commission’s Order stipulating that
Residential consumers carrying out Commercial/Industrial activities and having a yearly
consumption of 3600 Units should be charged at Residential Tariff. On the contrary, they
serve notices to many premises under Section 126(2), Section 126 (5), and Section 135 of
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the Act. The consumers are not authorised to file Appeals under Section 127 to the
Appellate Authority and are debarred to move the civil courts.
Shri Abrol also submitted that low/medium voltage consumers with food manufacturing
facilities should be under LT-V-Industry and not LT-II non-residential/commercial, and
they are charged higher fixed charges and higher tariff. Shri Abrol suggested to the
Commission to consider small tea shops, hotels, restaurants who are manufacturing and
processing food articles and use electricity at premises for operation of appliances like
lighting, heating, cooling, washing/cleaning, entertainment/leisure, pumping as industry
and categorised as LT-III and not LT-II(A) 0-20 kW and above 20 kW to 50 kW under LT-
III(B) not under LT-II(B).
AEML-D’s Response
AEML-D submitted that it has followed the intent that retail supply tariff shall be
determined on the basis of Retail ARR only. AEML-D submitted that the Wires cost is fully
recovered by way of Wheeling Charges. The total cost allocated to HT and LT is fully
recovered by HT and LT Wheeling Charges separately, meaning thereby that there is
absolutely no cross subsidy in Wheeling Charges. So, ACoS should be determined without
considering network cost.
AEML-D submitted that it has worked out VCoS to show that representation of cross
subsidy based on ACoS is actually incorrect. Tariff setting with respect to ACoS, without
keeping an eye on the actual cost to serve based on voltage of supply, leads to incorrect
conclusion of cross subsidization among their respective consumers. Hence, AEML-D
requested the Commission to determine retail Tariffs w.r.t Retail ARR only, in accordance
with the intent of the MYT Regulations, 2019.
As regards the issue of cross-subsidy to 0-100 units of residential category consumer,
AEML-D submitted that attempts to equalise the tariffs of 0-100 units consumers across
Licensees has resulted in increase of cross-subsidy requirement for AEML-D consumers in
this slab, which has to then be filled by raising tariffs of other slabs of residential and of
subsidising consumers. AEML-D submitted that the cross-subsidy requirement of 0-100
units consumers, which was at 61% in FY 2015-16 is brought down to 46%, due to a
significant reduction in their tariffs with a view to equalise the same across Licensees. It is
in this context that AEML-D has made its submissions in the MYT Period.
As regards the issue of unfair tariff proposed for residential consumers with consumption
more than 100 units, AEML-D submitted that tariffs are proposed based on the cost of
supply. The Electricity Act, 2003 and the Tariff Policy requires that tariff should be brought
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closer to the cost of supply. The network cost (Wheeling Charges) is determined as per
voltage of supply and therefore it is lower for HT as compared to LT. This makes HT cost
of supply lower and consequently their tariffs are lower than LT tariffs. However, within
LT, Residential tariffs are lower than Commercial and Industrial tariffs. Further, the benefit
of lower tariffs of up to 100 units is available to all higher slabs, on account of telescopic
tariff for residential category. Hence, while individual slab of 101-300 units may appear as
cross-subsidizing, in reality, the break-even units for cross-subsidizing are actually much
higher. AEML-D submits that in the MTR Order itself, the tariff for FY 2019-20 is
approved such that the slab 101-300 units appears as cross-subsidizing, when the actual
break-even (due to telescopic application) is at 535 units.
Similarly, in AEML-D proposal for FY 2020-21, the actual break-even for cross-
subsidization is 487 units, thereby representing high end residential consumers.
As regards the issue of incorrect tariff categorization of residential consumers carrying out
commercial activities, AEML-D submitted that it follows the Commission’s Tariff Order
in this regard and submits that the allegations are without any specifics, substance or basis.
Further, if the annual consumption exceeds that limit in a financial year, the tariff is to be
changed to Commercial (LT-II) or Industrial (LT-III) from the next financial year. It has
followed the Tariff Schedule strictly and changed tariff of such premises to commercial or
industrial, as the case may be, in accordance with these provisions. Industrial tariff is
offered in accordance with the purposes designed in the Tariff schedule and after
submission of relevant documents issued to the consumer by appropriate authorities.
AEML-D submitted that it is following the categorization as per applicable Tariff Orders
and any change in the same is a prerogative of the Commission.
Commission’s Ruling
Regulation 91.3 of the MYT Regulations, 2019 specifies that the retail supply Tariff shall
be determined on the basis of ACoS. The Commission’s Tariff Philosophy is elaborated in
Chapter 6 of this Order.
The Commission has worked out retail supply tariffs based on ACoS and existing Average
Billing Rate (ABR) of each consumer category. The Commission has increased the Fixed
Charges to all consumer categories in order to rationalise the recovery of fixed component
of ARR from Fixed/Demand Charges in line with the methodology adopted in MTR Order.
The Commission has accordingly reduced the Energy Charges to meet the tariff hike
(decrement) after adjustment of Fixed/Demand Charges. The Commission, to the extent
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possible, has tried to maintain the ratio of ABR/ACoS in the prescribed range of +-20%.
The details have been elaborated in the Section on Tariff Philosophy/Design.
1.9 WHEELING CHARGES AND CROSS-SUBSIDY SURCHARGE (CSS)
Shri N Ponrathnam has stated that Wheeling Losses and Cross-Subsidy Surcharge (CSS)
are being levied unjustifiably.
Shri Rakshpal Abrol submitted that Wheeling Charges are not being calculated as per
Section 2(76), nor as per Section 62 on the issue of payment of charges. Further, as per the
Hon’ble Supreme Court Judgment dated 8 July, 2008, the Licensees who have not laid
down the distribution lines to supply electricity in retail have to bear the Wheeling Charges
for supplying electricity to consumers. Also, the Service Line Charges have been approved
under Schedule of Charges (SoC).
AEML-D’s Response
As regards the issue of Wheeling loss, AEML-D submitted that there is a certain loss in
transport of power in an electrical system, due to heat loss, core loss in transformers and
other devices. The amount of loss depends on the extent, type and other particulars of the
network, including length of lines, O&M and capex practices, etc. The Regulations specify
a target level of distribution loss to be built into the tariffs and also a corresponding level
of Wheeling Loss for energy accounting of Open Access and change-over transactions. The
Distribution Licensee faces an efficiency loss, in monetary terms, in case it is unable to
maintain the losses within the specified target. Therefore, the losses, only up to a level
deemed efficient, are allowed to be passed on to the consumers.
AEML-D submitted that CSS is being levied in accordance with the Electricity Act, 2003
and Distribution Open Access Regulations, 2016. The option of providing Direct Subsidy
to consumers rests with the Government of Maharashtra.
AEML-D submitted that the Wheeling Charges are shown as part of the tariff and represent
the cost of network usage, and are levied on change-over consumers in accordance with the
Commission’s Orders. AEML-D submitted that the Schedule of Charges only recover the
cost of last-mile connectivity, whereas Wheeling Charges represented the cost of overall
network, since use of network involves use of entire network as per voltage of the consumer
and not just the last mile connectivity.
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Commission’s Ruling
The Commission has determined the Wheeling Charges for AEML-D based on the units
wheeled and the approved costs in accordance with the MYT Regulations, 2019. Wheeling
Charges are intended to recover the fixed network cost, in terms of capital related expenses
like interest, depreciation and RoE, and revenue expenses like O&M expenses, and Interest
on Working Capital. The Commission has determined the Wheeling Charges based on the
methodology adopted by the Commission in previous Tariff Orders.
Wheeling losses are payable to compensate the Distribution Licensee for the loss of energy
from injection point to drawal point, and are allowed to be recovered in accordance with
the OA Regulations. The Commission has also determined the Wheeling Loss for HT and
LT levels as elaborated in Chapter 6 in this Order. The Changeover and Open Access
consumers shall bear the approved Wheeling Losses of the Distribution System as per the
prevailing methodology.
The Commission has determined the CSS in line with the formula prescribed in the Tariff
Policy, and on similar lines as done in previous Tariff Orders. The CSS is recovered from
Open Access and Change-over consumers, to offset the loss of cross-subsidy provided by
the subsidizing consumers, in accordance with the Electricity Act, 2003 and the APTEL
Judgment in the matter.
1.10 FIXED/DEMAND CHARGES
Shri Rakshpal Abrol submitted that Demand Charges are based on kVA and consumption
on kWh, which is incorrect, and the consumers should be charged either in kW or kVA.
Shri N Ponrathnam submitted that the proposed increase in Demand Charges are exorbitant
and the Commission should change this philosophy. Shri Ponrathnam also stated that
Demand Charges should be charged in Rs./kWh like Wheeling Charges instead of
Rs./KVA/month.
AEML-D’s Response
The consumers with demand-based Tariffs are levied charges for billed demand in Rs.
/kVA/month and energy consumption in Rs. /kWh/month, as per the Tariff Schedule
approved by the Commission from time to time.
As regards the proposed increase in demand charges, AEML-D submitted that the
Commission had been following this philosophy from FY 2016-17 and has been increasing
the Fixed Charges gradually to enable Distribution Licensees to recover a larger share of
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Fixed Cost through Fixed/Demand Charges. In accordance with the philosophy followed
by the Commission, AEML-D has proposed increase in Fixed/Demand Charges.
AEML-D submitted that Wheeling Charges were being determined in Rs./kWh terms by
the Commission, primarily for ease of implementation. However, Demand Charges should
be charged in Rs./kVA/month in order to recover the cost of capacity reserved for the
consumer by the Distribution Licensee.
Commission’s Ruling
There is no inconsistency in Demand Charges being levied on the basis of kVA of
Contract/Billing Demand and Energy Charges being levied on the basis of consumption in
kWh. Demand is recorded in kVA and energy consumption is recorded in kWh. From this
Order, the Commission has introduced kVAh based Energy Charges for HT categories.
The Commission's views and decisions on the increased Fixed/Demand Charges proposed
by AEML-D have been elaborated in Chapter 6 of this Order. Typically, around 50% of the
total ARR of the Distribution Licensee, including the Fixed cost of power purchase, is fixed
in nature, i.e., it has to be incurred irrespective of whether any energy is sold to the
consumer or not. Against this, the recovery of fixed costs through Fixed/Demand Charges
is much lower, i.e., only a part of the Fixed costs of the Licensee are recovered through
Fixed/Demand Charges, and the balance are recovered through Wheeling Charges and
Energy Charges, which are linked to the actual energy sold to consumers. The Distribution
Licensee is entitled to some level of assurance regarding recovery of its fixed costs and,
while the entire fixed costs may not be recovered through Fixed/Demand Charges, a
reasonable proportion of fixed costs should be recovered through them. The Distribution
Licensee is revenue neutral under the Tariff determination process and shall not have any
windfall gain on account of increased Demand Charges.
The Fixed/Demand Charges for every category have been determined keeping in view the
present levels, the Average Billing Rate (ABR), and the cross-subsidy ratio.
The Commission has rationalised the Fixed/Demand Charges keeping in view the share of
fixed costs in the total ARR and the present recovery through Fixed/Demand Charges, as
elaborated in Chapter 6 of this Order.
1.11 VARIABLE CHARGES
Shri N Ponrathnam objected to the introduction of KVAh billing and suggested that the
Distribution Licensee should maintain PF instead of consumers facing a penalty for not
doing so. Shri Rakshpal Abrol also requested the Commission to not approve any kVAh
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based charging system even in HT as kWh is globally recognised unit for measuring and
billing A.C. current.
AEML-D Response
AEML-D submitted that it has proposed kVAh billing for categories with load more than
20 kW according to the intent and directions of the Commission stated in the MTR Order
dated 12 September 2018. Further, even at present, there are PF Incentives and Penalties
and they have been in existence since the regulatory process of tariff determination. In the
proposed system of kVAh billing, the PF is inherent, which means if PF is poor, the kVAh
would be higher and so is the energy bill and if PF is well maintained, the energy bill will
be lower. So, kVAh billing is essentially the same system as existing and will provide the
same signal to consumers for maintaining their PF. The Distribution Licensee’s
responsibility is to install Capacitor Banks at appropriate places in the electricity grid.
APFC installed at substations improves the PF of upstream system resulting in reduction of
losses of upstream system, improving voltage profile, etc. However, in the consumer
apparatus, it is the responsibility of the consumer to do so, so as to prevent injection of
reactive power into the grid.
Commission’s Ruling
The Commission has noted the Objection and also reply submitted by AEML-D. The
Commission intends to introduce kVAh based billing in the State in a phased manner. The
Commission has approved kVAh Tariff only for HT consumers through this Tariff Order.
The analysis and ruling of the Commission on kVAh billing are elaborated in Chapter 6 of
this Order.
1.12 CONSUMER SECURITY DEPOSIT
Shri Mahaveer Kumar submitted that as per the Supply Code Regulations and past Tariff
Orders, AEML-D has started collecting Security Deposit and started submitting the relevant
data to the Commission yearly. He requested the Commission to issue direction to AEML-
D to provide category-wise overdue Security Deposit as on 31 March, 2019.
Shri Rakshpal Abrol submitted that AEML-D had not refunded the interest on Security
Deposit paid under Section 47 of EA, 2003. They have not adjusted the security deposit and
excess amount of Rs. 486 Crore due to consumers as mentioned in the Order of the
Distribution Licensee.
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AEML-D Response
AEML-D submitted that it has recovered the Consumer Security Deposit (CSD) from
consumers while providing new connections in accordance with the Supply Code, 2005. It
carries out re-assessment of CSD in every financial year as required by the Regulations,
based on the consumer billing.
As regards the issue of Interest on security deposit, AEML-D submitted that the Order dated
1 November 2018 was a Corrigendum Order issued by the Commission in Case No. 200 of
2017, where the Commission had only modified the para about Interest on CSD by
including a reference to MYT Regulations, 2015. AEML-D submitted that it was providing
interest to consumers in accordance with the Regulations and Orders of the Commission.
Commission’s Ruling
The Commission notes the replies of AEML-D in this regard. However, the Distribution
Licensees, as per the Regulatory provisions, are required to do the needful to ensure that
the due amount of CSD is recovered/refunded from/to the consumers. AEML-D is directed
to adjust the excess security deposit, if any, in the bill of the consumer at the time of
reassessment of the Security Deposit amount at the end of the year.
1.13 FINANCIAL MANAGEMENT AND CONTROL
Shri Mahaveer Kumar Jain submitted that AEML-D has submitted huge unexplained
expense relating to A&G, insurance, Security arrangement, Printing and stationery, and
Employee expenses. These huge unexplained expenses that are much beyond past trend,
mostly due to takeover of Mumbai licence area from R-Infra by AEML-D and not due to
operational reasons, and are liable to be rejected. Shri Jain also submitted that expenses
incurred on account of change of name from RInfra to AEML should not be allowed.
Shri Jain sought the information relating to the use of resources by AEML-D of other
Divisions and Group Companies and vice-versa, which needs to be disallowed:
a) Use of property/resources by other divisions and Group Companies.
b) Use of property by Companies of Group / Related parties
Shri Jain also sought information on the expenses on Professional, Consultancy &
Technical Fees from FY 2012-13 to FY 2018-19.
AEML-D Response
AEML-D property or resources are currently not being used by any other Division / Group
Companies / related parties. AEML-D has submitted the Accounting Statement Formats as
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certified by the Statutory Auditors of the Company, which certified that all expenses and
assets claimed in AEML-D MYT Petition pertain to AEML-D only.
AEML-D submitted that, in future, if AEML-D intends to utilise its properties to make
more optimal use of it, it will be within the framework of optimum utilisation of assets as
allowed under Section 51 of the Electricity Act and any income from the same will be
passed on to the consumers in the proportion as prescribed by the Commission in the Tariff
Regulations.
As regards the issue of expenses incurred on account of change of name from RInfra to
AEML, AEML-D submitted that the expenses towards printing of stationery, bills, etc., is
anyway a regular expense even when there is no change of name, as these are ongoing
business expenses in any given year. Further, it is necessary to change signages, etc., on
offices for customers to be aware that their Distribution Licensee is now AEML and not
Reliance Infrastructure. These expenses are therefore essential for the furtherance of the
distribution business.
In any event, AEML-D has controlled its A&G expenses such that the total O&M expenses
are within the normative level approved by the Commission and customers are not unduly
burdened.
As regards the increase in A&G expenses in FY 2017-18 and FY 2018-19, AEML-D
submitted that these expenses keep varying depending upon the actual requirements and
they also depend on several factors such as directions of IRDAI, increase in security guards’
salaries by the Maharashtra Security Guard Board, volume and nature of printing required,
variances in the number of advertisements published in a given year, etc. Some of the
factors are business as usual, while others are external and uncontrollable. In any event,
these are legitimate business expenses. There is absolutely no trend in these expenses from
year to year – there has been significant jumps in the past and then there have been declines
as well. In fact, in Printing and Stationery costs, the expenses for FY 2017-18 and FY 2018-
19 are lower than those incurred up to FY 2015-16.
As regards the increase in Professional, Consultancy & Technical Fees in FY 2018-19,
AEML-D submitted that till FY 2017-18, the allocable Corporate expenses of RInfra were
being allocated to different expenses heads of the O&M expense in the ARR. From FY
2018-19, the corporate expense allocation is included in Professional, Consultancy &
Technical Fees of A&G expense, on the advice of Statutory Auditor of AEML. The
different services being availed by AEML from its Group Companies, against which the
Corporate Expenses are allocated to it, have been submitted in detail in the MYT Petition.
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Commission’s Ruling
The Commission has scrutinized the actual O&M expenses claimed in FY 2017-18 and FY
2018-19 and had queried AEML-D in this regard. The Commission has detailed AEML-
D’s replies and the Commission’s analysis in O&M section of Truing-up of FY 2017-18
and FY 2018-19. For FY 2019-20 onwards, the Commission has approved normative O&M
expenses for AEML-D.
1.14 BILLING
Shri Mahaveer Kumar Jain submitted that AEML-D has not provided any data on the bill
generation efficiency. Shri Jain stated that the billing should be done on the date of Meter
reading itself so that the impact of delay is not borne by the consumers. Shri Jain requested
the Commission to issue direction to AEML-D to provide summary information in respect
of bill generation showing category wise bill amount, average days from FY 2015-16 to FY
2018-19.
AEML-D Response
AEML-D submitted that its billing systems were prompt and bills were generated within
three days from Meter reading. AEML-D is in the process of replacing the conventional
meters with smart meters. The first phase of the same shall commence from the East
Division, which will further reduce the time taken for generation of bill. Further, time taken
for bill generation subsequent to availability of meter reading does not depend upon
consumer category.
Commission’s Ruling
The Commission has noted the Objection and the response of AEML-D. AEML-D should
ensure that the time period for raising bills after meter reading is as per the Supply Code
Regulations, 2005.
1.15 FUEL ADJUSTMENT CHARGES (FAC)
TPC-D submitted that AEML-D’s FAC rate remains at Rs. 0.50/kWh even though the
power purchase cost in the Petition seems to have increased in the range of Rs. 0.30/kWh
only compared to approved tariff. TPC-D requested the Commission to carry out a prudence
check.
Shri Pavan Kapoor and others submitted that the FAC levied to all categories by AEML
has been much higher than that charged by TPC-D. Shri Kapoor requested the Commission
to allow only reasonable and fair amount of FAC to be charged to the consumers. Shri N
Ponrathnam enquired about the justification for FAC.
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Shri Ashok Pendse submitted that despite power purchase cost decreasing year-on-year by
3-8% in last 3 years when compared to MYT Order, FAC was charged to all consumers.
Shri Pendse requested the Commission to look into the matter.
AEML-D Response
AEML-D submitted that it has charged the FAC in accordance with Section 62(4) of the
Electricity Act, 2003 and the MYT Regulations, 2015 and the FAC till September 2019 has
been submitted to the Commission for post-facto approval.
As regards the issue of charging FAC despite reduction in power purchase cost, AEML-D
submitted that FAC represented the rate variation, which is a result of source-wise variation
in rate of purchase as well as the variation of source-mix, vis-à-vis that approved in the
Order. The power purchase cost in absolute Rs. Cr. terms varies on account of both the
variation in rate as well as the variation in quantum of energy purchased and hence, lower
sales will result in lower purchase quantum and cost, but that will not affect FAC due to
mix and rate variance. The actual weighted average rate of power purchase as realised was
higher than that approved.
Further, for FY 2017-18, the cost of Imbalance Pool has been considered as per FBSM bills
for FY 2017-18 available so far and cost of Stand-by energy (from MSEDCL) has not been
considered as no bills have been raised by MSEDCL. This brings down the actual cost of
power purchase as shown in the MYT Petition vis-à-vis the MTR Order. As these facts are
known now, they have been considered in the Petition to reflect actual power purchase cost.
However, in the MTR Order, these costs were included in power purchase cost on
provisional basis. FAC was also charged during FY 2017-18 using the provisional
estimates.
For FY 2018-19, the actual power purchase cost shown in the Petition does not include cost
towards energy drawn from Imbalance Pool and Stand-by energy purchased from
MSEDCL, as no bills have been received from MSLDC or MSEDCL, respectively.
However, till October 2018, FAC was being calculated considering estimated cost towards
Imbalance Pool and cost of Stand-by energy. In its post-facto FAC approval Orders dated
24 October, 2018 and 14 November, 2018, the Commission considered revised FAC
methodology, where neither energy nor cost was considered for purchase from Imbalance
Pool, due to absence of bills. In fact, due to change in methodology, an additional recovery
of about Rs. 54 crore was approved through FAC, which was recovered over September
2018 to December 2018 period. From November 2018, AEML-D is following the revised
methodology as approved by the Commission and has adopted the same for Stand-by
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energy (as bills are not raised by MSEDCL) as well as Banked energy (as cost towards
return of banked energy in incurred in the subsequent year). Due to the above reasons, the
per unit rate of power purchase for FAC has been higher than the approved rate of power
purchase for FY 2018-19 as per Order, resulting in FAC.
For FY 2019-20, the estimated power purchase cost (without Stand-by charges) is lower
than the cost approved in the MTR Order by about Rs. 130 crore. However, the absolute
reduction in power purchase cost is on account of lower sales and hence, correspondingly
lowers purchase. However, FAC is a rate variance, which depends only on source-wise rate
variation and source-mix variation. The total variance of Rs. 130 crore in power purchase
cost comprises (+) Rs. 118 crore rate variance and (-) Rs. 248 crore Quantum variance.
Therefore, FAC is appearing due to positive rate variance.
Commission’s Ruling
Distribution Licensees are allowed to recover the variation in fuel and power purchase costs
through the FAC formula specified in the MYT Regulations, 2015, in line with Section
62(4) of EA, 2003. The Regulations require Distribution Licensees to submit the details of
FAC to the Commission for post facto approval on a quarterly basis. The details of the
Commission's approval for levy of FAC are required to be made available on their websites.
The FAC is approved by the Commission after prudence check for any variation in fuel cost
and power purchase cost and is accordance with the regulatory provisions and the EA, 2003
and the Regulations made thereunder. Regarding objection on levying FAC even after
reduction in power purchase expenses, it is to be noted that FAC mechanism envisages levy
/ refund of charges if per unit power purchase cost undergoes a change from that approved
in the Tariff Order. Per unit rate of power purchase is dependent on power purchase
quantum, source mix and rate of each source. Also, FAC mechanism envisage only actual
incurred cost to be considered for calculation and hence, provisional costs on FBSM was
not allowed to be included in FAC. Hence, it may not be proper to assume that on reduction
of power purchase expenses in absolute amount, FAC will also become negative or zero.
Nevertheless, as stated above, the Commission is scrutinising all FAC computations of
Distribution Licensee on post-facto basis. However, the Commission notes that the impact
of frequent variation in rate on account of FAC needs to be minimised to the extent possible.
Multi-year tariff frame work is also a method for achieving consistency in Tariff. In Order
to address this issue to the extent possible, the Commission has slightly modified the FAC
mechanism as explained subsequentrly in this Order.
1.16 TRANSMISSION AND DISTRIBUTION LOSS
TPC-D submitted that the methodology used by AEML-D for deriving the energy
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Requirement at T< >D for AEML-D consumers by subtracting the normative Change -over
and OA sales is not correct. TPC-D submitted that AEML-D has considered different
figures of energy at T<>D interface than that considered for energy requirement, while
calculating the efficiency gains for reduction in Distribution loss. TPC-D further stated that
the payments made by TPC-D for change-over consumers are on the basis of normative
Distribution losses of AEML-D.
TPC-D submitted that AEML-D has proposed to pass on commercial as well as technical
loss to all consumers including Change-over consumers.
AEML-D Response
As regards the issue of loss computation for Energy Requirement, AEML-D submitted that
the Energy requirement at T-D for AEML-D consumers is derived by subtracting the
grossed-up Changeover sales and OA Consumption (grossed up by approved wheeling loss)
from actual energy drawal at T-D. It is calculated this way because AEML-D is not
responsible for supplying TPC-D consumers connected to its lines and OA consumers. This
is needed as AEML-D has to procure additional power for TPC-D Changeover and OA
consumers and AEML-D’s own consumers has to bear the costs. To prevent these kinds of
situation the present methodology is adopted. Also, AEML-D has considered all sales
(including change-over and OA) to arrive at the Distribution loss, which is apparent from
Table 11 of AEML-D MYT Petition.
As regards the issue of considering different figures of energy at T-D interface, AEML-D
submitted that this is incorrect. AEML-D has computed efficiency gains / losses in
distribution loss achievement as per the methodology in place for several years now. In this
methodology, first the normative total sales (at consumer level, including own, change-over
and OA) is determined by applying normative losses over actual T-D input. By this, AEML-
D works out what the total network sales will have been if actual losses were equal to
normative. From that quantity, the Change-over and OA sales is subtracted to determine
own normative sales, which is then compared with own actual sales to determine additional
sales to own consumers due to loss reduction.
As regards the issue of payments for TPC-D’s changeover consumers, AEML-D submitted
that TPC-D remits the Wheeling Charges, RAC and CSS to AEML-D and all these charges
are applied on metered energy of change-over consumers and not on loss grossed up energy.
Only TPC-D’s own retail tariff charges are applied on metered energy grossed up with
approved wheeling losses of AEML-D network and that revenue is kept by TPC-D itself.
The claim by TPC-D that it has paid surplus revenue to AEML-D is therefore, devoid of
facts and betrays an utter lack of understanding.
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As regards the issue of impact of commercial loss on change-over consumers, AEML-D
submitted that it has proposed technical losses of 1.59% for HT and 7.41% for LT for each
year of the fourth Control Period, which are required to be borne by Change-over and OA
consumers, as evident from Table 223 of the MYT Petition. Form F1.3 only shows the
break-up of Distribution loss into commercial and technical loss – the technical and
commercial losses shown there are not used in the computations.
Commission’s Ruling
The Commission has revised the loss levels to be borne by Change-over and OA consumers,
in Chapter 6 of this Order. The Commission is of the view that in case of normal OA, only
technical losses should be borne by the OA consumer, as the Wires Licensee is responsible
for the metering and billing. However, in case of change-over, not only are the meters
owned by the Supply Licensee, the Supply Licensee is also responsible for all metering
related activity comprising accurate metering and billing of the electricity consumption.
Hence, commercial losses, if any, are to the account of the Supply Licensee, and the
Change-over consumers cannot be charged only Technical Losses..
The standard method of computing the Energy Balance of AEML-D, after factoring the
change-over and OA sales, has been adopted for the next Control Period also. The method
of computing the efficiency gains on account of lower than normative Distribution Losses
has been revised as elaborated in Chapter 3 of this Order.
1.17 CAPITAL EXPENDITURE
TPC-D submitted that AEML-D has proposed very high capital expenditure and it needs to
be scrutinized whether AEML-D under garb of network augmentation and replacement, is
actually trying to expand its network such that for every application for which M-DNAC is
approached, only AEML-D is in a position to supply power.
AEML-D Response
AEML-D submitted that its capital expenditure plan is composed mainly of schemes
required to replace the old and obsolete infrastructure. About 77% of total capital
expenditure proposed is towards replacement of age-old assets and modernisation and
technological advancements, such as Smart Meter deployment. The overall approach to
capital expenditure plan for the MYT Control Period has been explained in the Petition and
reply to data gaps, along with its benefits for reliability improvement and betterment of
customer services and customer experience. AEML-D has followed the requirements under
the Commission’s Order in Case No. 182 of _2014, while providing new connections or for
switchover and its DPRs for new supply accordingly demonstrate the same.
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Commission’s Ruling
The Commission has scrutinized the submissions made by AEML-D as regards Capital
Expenditure and Capitalization for the next Control Period, which has been elaborated in
Chapter 5 of this Order.
1.18 CHANGE IN O&M WIRES COST
TPC-D submitted that AEML-D has requested for a change in methodology of computing
O&M expenses by allocating the total O&M cost in the ratio of 47%:53% to Wires and
Supply without any detailed justification or reason for deviating from MYT Regulations,
2019. AEML-D has proposed the allocation based on turnover ratio where majority
turnover in Supply business is on account of power purchase cost, which has no correlation
with O&M expenditure.
AEML-D Response
AEML-D submitted that the argument that turnover ratio cannot be used to allocate O&M
cost is incorrect, as the idea of cost allocation using turnover ratio is driven by resource
effort involved to produce output. Corporate expenses also represented shared O&M Cost,
but have been allocated in the ratio of turnover, which is an established methodology for
corporate expenses.
Commission’s Ruling
The Commission has not considered the submission of AEML-D as regards change in
allocation of O&M cost between Wires and Supply, for reasons elaborated in Chapter 6 of
this Order.
1.19 TIME OF DAY METERING
Shri Mahavir Jain submitted that ToD meters should be made mandatory for consumers
with load more than 15 kW. Shri Jain requested the Commission to give due consideration
to the fact that peak hours are not evening 06:00 to 10:00 pm, but from 03:00 pm onwards.
AEML-D Response
AEML-D submitted that at present ToD applicability is to consumer categories approved
by the Commission in the Tariff Order and meters are installed accordingly. Any change in
ToD applicability is the prerogative of the Commission. As regards the ToD time slot,
AEML-D submitted that it has proposed ToD timeslots after considering its load curve.
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Commission’s Ruling
The Commission has not modified the ToD time slots, Tariffs and category of consumers
to which it is being charged, for reasons elaborated in Chapter 6 of this Order.
1.20 CUMULATIVE FULFILMENT OF NON-SOLAR RPO
TPC-D has objected to AEML-D’s proposal to make up the Non-Solar RPO shortfall
through Solar purchase, in view of the Commission’s past Orders in this regard.
AEML-D Response
AEML-D submitted that its plan for meeting RPO for the Control Period in the MYT
Petition and its Hybrid RE procurement is also approved by the Commission at Rs. 3.24
per unit, which PPA, AEML-D is in the process of executing. AEML-D’s MYT Petition is
aligned with the Order of the Commission approving the said RE procurement and the
Commission’s proposed RPO-REC Regulations.
Commission’s Ruling
The Commission has taken a considered view on the Solar and Non-Solar shortfall
computed in line with the RPO-REC Regulations, 2015, and the proposed mitigation of the
same during FY 2020-21 to FY 2024-25. The details of the same are elaborated in Chapter
5 of this Order.
1.21 DSM PROGRAM
Shri Mahaveer Kumar Jain submitted that DSM Program should provide a special rebate
for using Thermal Energy Storage (TES) so that usage can be shifted from peak day time
to off peak times. Shri Jain also requested the Commission to direct the Distribution
Licensees to evolve DSM program for Energy saving instruments like 35 W Brushless
Direct Current (BLDC) fan for larger adoption.
AEML-D Response
AEML-D submitted that it has a dedicated DSM wing, which identifies appropriate DSM
schemes from time to time based on the need and potential for savings and load flattening.
The schemes are then proposed to the Commission and are executed after obtaining
approval. The suggestions regarding BLDC scheme will be considered by AEML and if
any changes to the scheme are warranted, appropriate proposals shall be put for the
consideration of the Commission.
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Commission’s Ruling
The Commission’s DSM Implementation Framework Regulations,2010 provide a
comprehensive framework for Distribution Licensees to plan and excute cost-effective
DSM measures and to meet their costs.In order to give futher impetus to DSM
measures,AEML-D should encourage the installation of energy-efficient appliances in new
residential,industrial and commercial premises.This may include approaching the
developers as well as consumers,and other means.
The Commission expects DSM Plans/schemes from AEML-D as per Commission’s DSM
Implementation Framework Regulations,2010 for future. The Commission has approved
the DSM expenses for the next Control Period,as elaborated in Chapter 5 of this Order.
1.22 5 STAR RATED PRODUCT
Shri Mahaveer Kumar Jain submitted that AEML-D should not only advocate use of 5 star
rated product but also use it itself. He also requested the Commission to issue direction to
buy only 5 star rated products.
AEML-D Response
AEML-D submitted that generally the appliances in its Offices are energy efficient and
AEML-D always endeavours to procure energy efficiency products only.
Commission’s Ruling
AEML-D’s reply is noted.
1.23 ALTERNATE ENERGY SOURCES
Shri Mahaveer Kumar Jain suggested that the Commission should direct all industries
having load more than 1000 kW to mandatorily procure power from RE or non- pollutant
sources to the extent of 10% of their existing demand. Shri Jain stated that facade buildings,
which use at least 200% more energy than regular buildings should mandatorily source at
least 30% of their energy demand from Solar sources or biogas from Sewage Treatment
Plants (STP)/Food waste.
AEML-D Response
AEML-D submitted that these matters are not within the purview of the present proceedings
of approval of ARR and tariff for next Control Period.
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Commission’s Ruling
The Commission noted the suggestions and replies of AEML-D.This issue is not relevant
to the present MYT Petition.
1.24 CUSTOMER RELATIONSHIP RELATED
Shri Mahaveer Kumar Jain stated that the soft copy of AMR meter data should be made
available to the consumer for their own review and record purposes by email and online on
portal. Shri Jain also requested to enhance the use of IT infrastructure in processing
consumer requests and reduce the time taken to process the same. Shri Jain further requested
to update the load certificate of consumers periodically.
Ms. Mihika Kulkarni stated that there is no proper customer relationship centre available
for consumers of AEML.
AEML-D Response
AEML-D submitted that at present it provides the electricity bill to consumers in physical
form and E-Bill (pdf copy) if opted by consumers. The Bills carry monthly consumption
data (meter reading) for a period of 12 months. Therefore, the information being sought by
the Objector to be provided in txt file is already available on the energy bill. Moreover, only
HT consumers are covered under AMR, while meters of cycle consumers (LT residential,
commercial and industrial) are read manually. AEML-D has proposed to undertake AMR
of all the consumers above 20 kW which after approvals of the Commission shall be
implemented. Thereafter, such consumers will also be able to view their real time
consumption.
AEML-D submits that there are eight Customer Care Centres, spread across the licence
area, available for AEML-D consumers. The address of the Customer Care Centres can be
found from the AEML website www.adanielectricity.com. The details of various other
customer-service touch points are provided in the Petition.
Commission’s Ruling
The Commission has noted the submission of Shri Mahaveer Jain and the reply submitted
by AEML-D. The Commission expects AEML-D to transparently share the consumer
billing data with the individual consumer (to the extent possible) and also explore other
consumer friendly facilities which may enable the consumers to take a considered decision
on energy efficient usage.
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Regarding updation of consumer load data, the Commission notes that meter records the
actual demand of the consumer. However, for categories where demand-based tariff is not
applicable, such recorded demand is not used for any purpose. The Commission opines that
based on such recorded demand, after consulting concerned Consumer, Distribution
Licensee shall update connected load of consumer. Also, consumer related data such as
contact number / mobile number, communication address (subject to the requisite data
security measures) needs to be updated on regular basis. With use of appropriate
technological solutions, such works can be undertaken easily.
1.25 RETENTION OF DATA
Shri Mahaveer Kumar Jain suggested that all submission/data presented during the tariff
process should remain in public domain so that all relevant information is always available.
AEML-D Response
AEML-D submitted that it has an Archive section in its website (URL:
https://www.adanielectricity.com/Archive-Regulatory) where past Petitions and Orders
remain available. At present, the MTR Petitions are available.
Commission’s Ruling
As regards the suggestion on retention of data on Tariff filing, the Licensees make available
the Petition and related data for inspection/purchase at their offices and on their website for
public review and to ensure adequate public participation. Retaining the data on their
website is up to the Licensee and is not a mandatory requirement. The Orders issued by the
Commission, which capture the relevant submissions of the Petitioners, are always
available on the Commission’s website.
1.26 MISUSE OF STANDBY SUPPORT
MSEDCL has submitted that it is obligated to provide Standby support to Mumbai
Licensees to the extent of 500 MW. However, AEML-D has been using the provision of
Standby support not as emergency tool for procurement of power but as a means of
commercial gain. To provide AEML-D with Standby power, MSEDCL has had to often
curtail its own demand in other parts of Maharashtra to provide power to Mumbai city,
which is financial hub of the nation. Hence, AEML-D’s use of Standby power not as a last
resort but a way of commercial gain should be frowned upon. Further, MSEDCL has denied
Standby support to AEML-D for reasons such as “Outage under coal shortage scenario” of
Long Term contracted units and shortage of power from STOA/ IEX. Further MSEDCL
has denied Standby support where AEML-D was trying to use Standby supply arrangement
as a mean of commercial gain. However, even though MSEDCL has not given consent to
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AEML-D for Standby support it never requested load curtailment in AEML-D area. As
regards the rate for standby power supply, MSEDCL considers highest power purchase rate
of the time block in which power is provided to Mumbai utilities as rate for Standby supply
as per MSEDCL letter dated 17.11.2014 prescribed in line with CERC’s DSM Regulations,
2014. MSEDCL further stated that AEML-D should not be allowed to discontinue existing
Standby arrangement in view of necessity of uninterrupted power supply to the financial
hub of our country.
AEML-D Response
AEML-D submitted that the Standby arrangement with MSEDCL is a Standby facility
available to the Mumbai Licensees to serve their demand in the event of outage or non-
availability or constrained availability of any of their contracted/ scheduled generation
regardless if it is planned or forced as observed by the Commission in the Order in Case
No. 7 of 2000 dated 07.12.2001.
As regards settlement of Stand-by power, the Commission has clarified through its Order
in Case No. 76 of 2006 dated 15.05.2007 that energy supplied under Standby is to be
charged at the weighted average rate of marginal sources of MSEDCL, however MSEDCL
has been charging the same at the marginal rate including the DSM rate at regional level on
time block basis. Also, in cases where MSEDCL has been surplus and incrementing the
pool, while also supplying power to AEML-D under Stand-by, MSEDCL is billing the
stand-by supply considering the rate of same sources. In view of this AEML-D submitted
that despite paying exorbitant Fixed Charges for stand-by facility, its Mumbai customers
are being denied proper Stand-by support by MSEDCL as and when such support is
required by them, which is significantly denting the value proposition of Stand-by facility
to Mumbai consumers.
AEML-D further rejected all the allegations made by MSEDCL and stated as under:
(a) During FY 2017-18 to FY 2019-20, AEML-D has requested Standby on 116 occasions
out of which on only 47 occasions, the Standby was approved by MSEDCL as sought
by AEML-D.
(b) At all times, the power is arranged on Day Ahead basis to meet the entire demand
without maintaining shortfall. In case of increase in demand in real time every attempt
is made to arrange the power through contingency/bilateral market. However, whenever
any long-term generator is already under outage, AEML-D seeks Standby to avoid over-
drawal from the Pool.
(c) As regards alleged usage of Stand-by support for commercial gain, MSEDCL is always
charging at the costliest source of MSEDCL including Exchange purchase for the stand-
by support. Therefore, at all times while providing Standby support, MSEDCL is
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always cost-neutral. So, applying its discretion and carrying out its due diligence on
why a Distribution Licensee is seeking Standby support is not required as long as that
support is sought in order to meet demand due to outage of any contracted source of the
Licensee.
(d) AEML-D submitted that, when it overdraws from grid, it has to pay Net UI Charges,
Additional UI charges, etc. Further, in the integrated grid operations, power flows from
State participants/ISTS Grid and it is not possible to state certainly that only MSEDCL
has provided such support.
(e) Despite paying entire charges towards Standby facility, which are built in the tariffs,
AEML-D’s consumers are not getting commensurate benefits out of the arrangement.
Hence, there is a need to review the Standby Arrangement as it has not been available
as and when required by AEML-D even after paying exorbitant charges.
Considering this, AEML-D requested the Commission to direct MSEDCL to provide
Standby support whenever availability is reduced from contracted sources, instead of
carrying out its due diligence and applying its own restrictions, which are inconsistent with
the Commission’s Order.
Commission’s Ruling
The Commission is of the view that Standby Support is to be used for contingency situations
and should not be considered as a long-term source of power to meet the demand of its
consumers or to be used for commercial gain purposes. The Commission observed that
there has been purchase made from Standby arrangements during FY 2017-18 and FY
2018-19. However, the quantum has been negligible as compared to the total quantum of
power purchase of AEML-D. Considering the importance of reliable power supply to
Mumbai and surplus capacity available with MSEDCL, it is in the best interest of all
stakeholders to continue the existing Standby Arrangement. The Standby Arrangement
should be honoured by all Parties including MSEDCL.
1.27 GRID SUPPORT CHARGES
M/s Mumbai Metro One Pvt. Ltd. (MMOPL) has requested for waiver of the Grid Support
Charges on HT V – HT Metro and monorail category.
AEML-D Response
AEML-D submitted that as per the Maharashtra Electricity Regulatory Commission (Grid
Interactive Rooftop Renewable Energy Generating Systems) Regulations, 2019, Grid
Support Charges are payable by consumers who have installed Roof Top Solar under Net
Metering Systems. However, MMOPL is not a consumer with Roof Top Solar under Net
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Metering or Net Billing arrangement in accordance with the above Regulations. MMOPL
falls under the third category, which is the set of consumers who neither avail Net Metering,
nor Net Billing, but have installed RE generating sets behind the meter. For such consumers,
the Regulations provide for levy of additional Fixed Charges / Demand Charges in the
Tariff Order, based on the proposal of the Distribution Licensee.
AEML-D submitted that, in its MYT Petition, it has shown the losses caused to it in terms
of inter alia, loss of wheeling charges, cross-subsidy, etc., on account of parallel operation
of grid interactive RE generation. AEML-D has not actually proposed Grid Support
Charges or additional Fixed / Demand Charges, it is the prerogative of the Commission to
fix such charges.
Commission’s Ruling
AEML-D’s has not actually proposed Grid Support Charges or additional Fixed / Demand
Charges, but has only discussed the probable options for levying the same. The
Commission’s analysis and decision on the issue of Grid Support Charges for AEML-D are
elaborated in Chapter 6 of this Order.
1.28 TAX ON SALE OF ELECTRICITY (TOSE)
Shri N Ponrathnam objected to the imposition of Tax on Sale of Electricity (TOSE).
AEML-D Response
TOSE is being collected from consumers in accordance with Maharashtra Tax on Sale of
Electricity Act, 1983 and is remitted to the State Government.
Commission’s Ruling
Imposition of TOSE is within the purview of the State Government.
1.29 UNIFORM TARIFF CHANGES OVER MYT PERIOD
Shri N Ponratnam suggested that consumers should be given uniform Tariff increase or
reduction year on year, rather than have a spike in the same from year to year.
AEML-D Response
AEML-D submitted that it has proposed Tariffs with a view to not have drastic decline or
increase from one year to the next. This philosophy is explained in detail in the Petition.
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Commission’s Ruling
The Commission has elaborated its views on the overall design philosophy of the Retail
Supply Tariffs, including determination of Fixed Charges/Demand Charges, wheeling
charges, energy charges in Chapter 6 of this Order.
1.30 CIRCULATION OF PUBLIC NOTICE WITH THE BILLS
Shri N Ponratnam suggested that Public Notice should be circulated with the bills.
AEML-D Response
In this regard, AEML-D submitted that it has published the Public Notice in accordance
with the prevailing Regulations and the directions of the Commission.
Commission’s Ruling
The Provisions of MYT Regulations, 2019 lay down specific guidelines not only to publish
the Public Notice but also make the copy of the Petition along with all regulatory filings,
information etc. on the website of the Petitioner and office locations of the Licensee. The
same is sufficient as per the law and has been complied with by AEML-D.
1.31 INCREASE IN RETURN ON EQUITY AND CAPITAL EXPENDITURE
Shri Ashok Pendse submitted that from FY 2019-20 to FY 2020-21, RoE jumps by 25%
and by FY 2024-25, it almost doubles. Further, Shri Pendse observed that almost Rs. 5000
Crore would be spent over the MYT Period as capex, which will give rise to O&M,
depreciation. etc. as expenses and hence, the same should not be allowed without proper
vetting.
AEML-D Response
AEML-D submitted that from FY 2020-21 onwards, RoE has increased because the MYT
Regulations, 2019 permit Income Tax by way of grossing up the RoE by the applicable
Income Tax rate. Therefore, from FY 2020-21 onwards, there is no separate Income Tax
component in the ARR and the RoE is grossed up by the Tax rate.
AEML-D has prepared its capital expenditure plan for the MYT Period, focusing the same
on asset replacements. The overall approach to capital expenditure plan for the MYT
Control Period has been explained in the Petition and later in reply to data gaps, along with
its benefits for reliability improvement and betterment of customer services and customer
experience.
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Commission’s Ruling
The Commission has allowed pre-tax RoE for the next Control Period in line with the
MYT Regulations, 2019. As regards capitalization, the Commission has approved the
capitalization from FY 2017-18 to FY 2024-25 after prudence check, as elaborated in
relevant Chapters of this Order.
1.32 OTHERS
Shri Rakshpal Abrol submitted that AEML-D has failed to give justification on why they
have not been able to erect new power receiving stations and substations in Mumbai suburb
area including Mira Bhayandar Municipal Corporation Area.
Shri N. Ponrathnam requested the Commission to direct AEML to enter into formal
agreements for space used for installing substation complying with Section 5.5 of Supply
Code, 2005.
AEML-D Response
AEML-D submitted that the issue is not related to the present proceedings under MYT
Petition in Case No. 325 of 2019. In any event, AEML-D enters into lease arrangement
with the developer / society for substation space.
Commission’s Ruling
The Commission is of the view that the above issues are not directly linked to the present
tariff proceedings.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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TRUING UP FOR FY 2017-18 and FY 2018-19
AEML-D submitted that it has filed its Petition for final truing up of expenditure and
revenue for FY 2017-18 and FY 2018-19 based on actual and audited costs and revenue,
vis-à-vis the amounts provisionally approved by the Commission in the MTR Order dated
12 September, 2018 in Case No. 200 of 2017, and provided the justification for the
deviations.
During FY 2018-19, vide a Scheme of Arrangement, which has been duly approved by
Hon’ble the High Court of Bombay vide its Order dated 20 November 2017 read with
earlier Order dated 19 January 2017, the Mumbai Generation, Transmission and
Distribution business (“GTD Business”) of the erstwhile Reliance Infrastructure Limited
was vested with AEML (formerly known as Reliance Electric Generation and Supply
Limited). Accordingly, AEML started conducting the Mumbai GTD business in its own
name from 29 August, 2018.
In this Chapter, the Commission has analysed all the elements of actual expenditure and
revenue of AEML-D for FY 2017-18 and FY 2018-19 and has approved the truing up of
expenses and revenue after prudence check.
1.33 SALES FOR FY 2017-18 and FY 2018-19
AEML-D’s Submission
AEML-D submitted that it sold 8,332.30 MU and 8,361.60 MU to its own consumers in
FY 2017-18 and FY 2018-19, respectively, as against the Commission’s approved sales of
8,321.05 MU and 8,579.21 MU, respectively in the MTR Order (Case No. 200 of 2017),
based on AEML-D’s provisional submissions during MTR proceedings. AEML-D
submitted the category-wise breakup of actual sales in FY 2017-18 and FY 2018-19 in its
Petition.
The energy sold by TPC-D to change-over consumers in FY 2017-18 and FY 2018-19 was
1,696.06 MU and 1,571.86 MU, as against 1,700.91 MU and 1,667.97 MU approved by the
Commission in AEML-D’s MTR Order (Case No. 200 of 2017). AEML-D submitted the
category-wise comparison of own and change-over sales with that approved in the MTR
Order as shown in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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Table 0-1 : Own sales and Change-over sales for FY 2017-18 as submitted by
AEML-D (MU)
Particulars
Own Sales Changeover Sales
MTR
Order Actual
MTR
Order Actual
LT Category
LT I - Below Poverty Line 0.02 0.02 - 0.04
LT -I Residential (Single Phase) -
0-100 1,626.69 1,626.69 515.07 497.69
101-300 1,080.89 1,080.89 458.39 439.90
301-500 184.38 184.38 74.38 87.49
500 and above 66.30 66.30 20.66 34.57
LT -I Residential (Three Phase) -
0-100 243.60 243.60 91.41 86.61
101-300 362.38 362.38 141.35 132.17
301-500 190.59 190.59 70.44 68.17
500 and above 376.68 376.68 89.50 103.06
LT II (a) - 0-20 kW 1,783.07 1,783.07 115.85 118.82
LT II (b) - 20-50 kW 231.70 231.70 26.65 27.54
LT II (c) - above 50 kW 536.48 536.48 47.57 51.55
LT III (a) - LT Industrial up to 20 kW 174.56 174.56 20.82 19.27
LT III (b) - LT Industrial above 20 kW 406.14 406.14 13.61 17.58
LT IV - Public Water Works 13.08 13.08 - -
LT-V: LT- Advertisements and Hoardings 3.47 3.47 0.02 0.01
LT VI: LT -Street Lights 58.45 58.45 - -
LT-VII (A): LT -Temporary Supply
Religious 2.00 2.00 - -
LT-VII (B): LT -Temporary Supply Others 14.18 14.18 0.02 0.04
LT VIII: LT - Crematorium & Burial
Grounds 1.22 1.22 0.28 0.29
LT IX (a): PS - Govt. EI & Hospitals 21.98 21.98 - -
LT IX (b): PS - Others 97.88 97.88 3.75 0.26
LT X (a): Agriculture - Pump sets 0.05 0.05 - -
LT X (a): Agriculture - Others 0.13 0.13 - -
Total LT 7475.90 7475.90 1,689.77 1,685.07
33 kV Category
HT V - HT Metro & Monorail 30.93 30.93 - -
11 kV Category
HT I: HT-Industry 299.04 294.11 0.93 0.93
HTII: HT- Commercial 372.09 390.48 10.20 10.05
HT III: HT-Group Housing Society 40.97 40.97 - -
HT IV: HT -Public Water Works 7.25 7.25 - -
HT V - HT Metro & Monorail - - - -
HT VI (a):PS - Govt. EI & Hospitals 7.14 7.14 - -
HT VI (b):PS - Others 84.92 82.70 - -
HT VII: Temporary Supply 2.81 2.81 - -
Total HT 845.15 856.39 11.13 10.98
Total 8321.05 8332.30 1,700.91 1,696.05
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 61 of 445
Table 0-2 : Own sales and Change-over sales for FY 2018-19 as submitted by
AEML-D (MU)
Particulars
Own Sales Changeover Sales
MTR
Order Actual
MTR
Order Actual
LT Category
LT I - Below Poverty Line 0.02 0.01 0
LT -I Residential (Single Phase)
0-100 1,639.50 1,624.04 502.00
101-300 1,108.32 1,064.20 430.43
301-500 192.01 185.94 70.81
500 and above 69.04 69.19 19.25
LT -I Residential (Three Phase)
0-100 245.52 257.22 88.32
101-300 371.58 375.75 131.97
301-500 198.48 195.28 63.00
500 and above 392.27 398.67 74.75
LT II (a) - 0-20 kW 1,860.49 1,783.80 95.64
LT II (b) - 20-50 kW 236.59 232.58 23.09
LT II (c) - above 50 kW 546.07 542.85 32.90
LT III (a) - LT Industrial up to 20 kW 180.93 172.55 17.90
LT III (b) - LT Industrial above 20 kW 398.79 394.56 10.47
LT IV - Public Water Works 13.44 12.77 0
LT-V: LT- Advertisements and
Hoardings 3.56 3.21 0.02
LT VI: LT -Street Lights 58.96 56.14 0
LT-VII (A): LT -Temporary Supply
Religious 2.06 1.89 0
LT-VII (B): LT -Temporary Supply
Others 11.36 10.43 0.02
LT VIII: LT - Crematorium & Burial
Grounds 1.31 1.24 0.34
LT IX (a): PS - Govt. EI & Hospitals 23.78 23.84 0
LT IX (b): PS - Others 126.32 117.27 2.97
LT X (a): Agriculture - Pump sets 0.05 0.06 0
LT X (a): Agriculture - Others 0.13 0.19 0
Total LT 7680.56 7523.67 1,563.86
33 kV Category
HT V - HT Metro & Monorail 31.24 29.97 -
11 kV Category
HT I: HT-Industry 369.18 275.57 0.38
HTII: HT- Commercial 348.98 365.03 7.65
HT III: HT-Group Housing Society 38.97 38.72 -
HT IV: HT -Public Water Works 6.99 8.13 -
HT VI (a):PS - Govt. EI & Hospitals 7.86 6.90 -
HT VI (b):PS - Others 92.58 101.31 -
HT VII: Temporary Supply 2.84 12.29 -
Total HT 898.65 837.93 8.02
Total 8579.21 8361.60 1,667.97 1,571.88
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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AEML-D referred to the ATE Judgment in Appeal No. 85 of 2012, which held that the
assessed sales should be considered in actual sales for determination of Distribution Loss.
AEML-D submitted that the assessed sales in FY 2017-18 and FY 2018-19 for its own
consumers were 8.38 MU and 9.17 MU, respectively, which has been included in the actual
sales of own consumers. It has included revenue from such assessment in Non-Tariff
Income, instead of sales revenue, in accordance with the direction of the Commission in
Case No. 126 of 2011.
Commission's Analysis and Ruling
The Commission has compared the change-over sales data for FY 2017-18 and FY 2018-
19 submitted by AEML-D and Tata Power Company Ltd. Distribution Business (TPC-D).
TPC-D’s change-over sales figure of 1854.62 MU does not tally with AEML-D’s figure of
1696.06 MU for FY 2017-18. For FY 2018-19, TPC-D’s change-over sales figure is
1721.63 MU, as compared to 1571.86 MU of AEML-D. The Commission sought
clarification from both AEML-D and TPC-D in this regard.
In its reply, AEML-D submitted that it does not have the category-wise change-over sales
reported by TPC-D. Hence, category wise reconciliation of changeover consumers is not
possible. However, as a general practice, sales provided by TPC-D is at T<>D interface
level. Hence, the comparison of change-over sales as reported by AEML-D and TPC-D
after grossing up the HT and LT sales reported by AEML-D with the HT and LT wheeling
losses for respective years. Based on the comparison, AEML-D submitted that the
difference between overall changeover sales as reported by AEML-D and by TPC-D is not
significant. The minor difference could be because of the 15-day adjustment done by TPC-
D while presenting sales at the time of truing-up.
Based on the above explanation and reconciliation provided by AEML-D, the Commission
has approved the actual sales to own consumers and change-over sales for FY 2017-18 and
FY 2018-19 as submitted by AEML-D. The sales approved by the Commission after truing
up for FY 2017-18 and FY 2018-19 is summarised in the Table below:
Table 0-3: Own Sales and Change-over Sales for FY 2017-18 as approved by the
Commission (MU)
Particulars
Own Sales Changeover Sales
MTR
Order
True-up
Petition
Approved after
truing up
MTR
Order
True-up
Petition
Approved after
truing up
Total LT 7,475.90 7,475.90 7,475.90 1,689.77 1,685.07 1,685.07
Total HT 845.15 856.39 856.39 11.13 10.98 10.98
Total 8,321.05 8,332.30 8,332.30 1,700.91 1,696.05 1,696.05
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 63 of 445
Table 0-4: Own Sales and Change-over Sales for FY 2018-19 as approved by the
Commission (MU)
Particulars
Own Sales Changeover Sales
MTR
Order
True-up
Petition
Approved after
truing up
MTR
Order
True-up
Petition
Approved after
truing up
Total LT 7680.56 7523.67 7523.67 1,563.86 1,563.86
Total HT 898.65 837.93 837.93 8.02 8.02
Total 8579.21 8361.60 8361.60 1,667.97 1,571.88 1,571.88
1.34 OPEN ACCESS CONSUMPTION
AEML-D’s Submission
AEML-D submitted the Open Access (OA) consumption in its licence area for FY 2017-
18 and FY 2018-19, as shown in the Table below:
Table 0-5: OA Consumption for FY 2017-18 and FY 2018-19 as submitted by
AEML-D(MU)
Particulars FY 2017-18 FY 2018-19
MTR Order True-up
Petition
MTR
Order
True-up
Petition
OA Consumption 225.70 214.46 225.70 235.25
Commission’s Analysis and Ruling
The Commission has approved the actual OA consumption in AEML-D’s licence area for
FY 2017-18 and FY 2018-19 as submitted by AEML-D in the Petition, as shown in the
Table below:
Table 0-6: Open Access Consumption for FY 2017-18 in AEML-D licence area as
approved by the Commission (MU)
Particulars MTR Order True-up
Petition
Approved after
truing up
OA Consumption 225.70 214.46 214.46
Table 0-7: Open Access Consumption for FY 2018-19 in AEML-D licence area as
approved by the Commission (MU)
Particulars MTR Order True-up
Petition
Approved after
truing up
OA Consumption 225.70 235.25 235.25
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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1.35 DEMAND-SIDE MANAGEMENT (DSM) MEASURES
AEML-D’s Submission
AEML-D submitted that it undertakes various DSM schemes for reduction of system
demand and energy consumption after obtaining the Commission’s approval. As to the
estimated reduction in sales due to these schemes in FY 2017-18 and FY 2018-19, AEML-
D clarified that the figures for own sales in MU are net of reduction through DSM measures.
The total energy savings in FY 2017-18 and FY 2018-19 from DSM activities as shown in
the Table below:
Table 0-8: Energy Saving due to DSM Programmes as submitted by AEML-D (MU)
Programme Consumer Category Savings (MU)
in FY 2017-18
Savings (MU) in
FY 2018-19
Solar rooftop PV plants Internal Installations 0.11 0.09
Five Star Refrigerators – Ph I Residential 2.51 2.70
Five Star Fans – Ph II Residential 1.57 1.57
Five Star Split A/C – Ph II Commercial 1.78 1.87
Five Star Split A/C Residential 1.09 1.14
Large Scale Ceiling Fan Residential 0.0008 0.034
Large Scale Refrigerator Residential 0.10 0.44
Total 7.16 7.844
Commission’s Analysis and Ruling
The sales quantum submitted by AEML-D and approved by the Commission for FY 2017-
18 and FY 2018-19 are inclusive of reduction in sales due to DSM activities.
1.36 DISTRIBUTION LOSSES AND ENERGY BALANCE
AEML-D’s Submission
AEML-D’s Distribution Loss in FY 2017-18 and FY 2018-19 was 8.153% and 7.848%,
respectively, as against 8.86% and 8.61% approved in the MYT Order. AEML-D has thus,
achieved a reduction of 0.707% and 0.762% in FY 2017-18 and FY 2018-19, respectively,
over and above the target, and hence, entitled to claim efficiency gains for its efforts. The
Distribution Loss for FY 2017-18 and FY 2018-19 is shown in the Tables below, along
with the Distribution Loss considered by the Commission during provisional true-up of FY
2017-18 and revised ARR of FY 2018-19, respectively:
Table 0-9: Distribution Loss for FY 2017-18 as submitted by AEML-D
Particulars UoM MTR Order True-up Petition
Energy Sold by AEML-D MU 8,321.05 8,332.30
Consumption by Change-over
Consumers
MU 1,700.91 1,696.05
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Page 65 of 445
Particulars UoM MTR Order True-up Petition
Consumption by OA Consumers MU 225.70 214.46
Total MU 10,247.66 10,242.80
Distribution Loss % 8.11% 8.153%
Energy Input at T<>D interface MU 11,151.99 11,151.99
Table 0-10: Distribution Loss for FY 2018-19 as submitted by AEML-D
Particulars UoM MTR Order True-up Petition
Energy Sold by AEML-D MU 8,579.21 8,361.60
Consumption by Change-over
Consumers
MU 1,667.97 1,571.88
Consumption by OA Consumers MU 225.70 235.25
Total MU 10,472.88 10,168.73
Distribution Loss % 8.61% 7.848%
Energy Input at T<>D interface MU 11,456.61 11,034.78
From the Energy Balance of FY 2017-18 and FY 2018-19, the energy requirement of
AEML-D for its own consumers has been submitted by AEML-D as shown in the Tables
below:
Table 3-11: Energy Balance for FY 2017-18 as submitted by AEML-D
Particulars UoM MTR Order True-up Petition
Migrated HT Sales + OA
consumption MU 236.83 225.43
HT Loss % 1.71% 1.71%
HT grossed up energy at T<>D MU 240.95 229.36
Migrated LT Sale MU 1,689.77 1,685.07
LT Loss % 8.47% 8.47%
LT grossed up energy at T<>D MU 1,846.14 1,841.01
Total T<>D energy attributable to
TPC-D sale & OA consumption MU 2,087.09 2,070.36
Net T<>D energy attributable to
AEML-D sale MU 9,064.89 9,081.62
InSTS Loss % % 3.30% 3.31%
Total requirement of AEML-D
(MU) at G-T MU 9,374.24 9,392.23
Table 3-12: Energy Balance for FY 2018-19 as submitted by AEML-D
Particulars UoM MTR Order True-up Petition
Migrated HT Sales + OA consumption MU 243.27
HT Loss % 1.71%
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Page 66 of 445
Particulars UoM MTR Order True-up Petition
HT grossed up energy at T<>D MU 247.51
Migrated LT Sale MU 1,563.86
LT Loss % 8.28%
LT grossed up energy at T<>D MU 1,705.04
Total T<>D energy attributable to
TPC-D sale & OA consumption MU 1,817.74 1,952.54
Net T<>D energy attributable to
AEML-D sale MU 9,638.87 9,082.24
InSTS Loss % % 3.30% 3.10%
Total requirement of AEML-D
(MU) at G-T MU 9,967.81 9,372.79
Commission’s Analysis and Ruling
The Commission has considered the actual Transmission Losses of 3.30% for FY 2017-18
and 3.11% for FY 2018-19 based on inputs from the Maharashtra State Load Despatch
Centre (MSLDC). The change-over sales have been considered as approved earlier in this
Chapter. The Commission has considered the HT and LT losses as 1.71% and 8.47%,
respectively, for FY 2017-18 and 1.71% and 8.28%, respectively for FY 2018-19, as
approved by the Commission for FY 2017-18 and FY 2018-19 in the MTR Order. The
Commission has considered the energy drawn by AEML-D at T<>D interface as 11,152.79
MU for FY 2017-18 and 11,034.31 MU for FY 2018-19, based on State-wide DISCOM-
wise energy drawal data provided by MSLDC, as per usual practice. Accordingly, the
Distribution Losses and Energy Balance approved by the Commission after final true-up
for FY 2017-18 and FY 2018-19, are shown in the Tables below:
Table 0-11: Energy Balance approved by the Commission for FY 2017-18
Particulars UoM MTR Order True-up
Petition
Approved after
truing up
Sales (Own) MU 8,321.05 8,332.30 8,332.30
Sales (change-over) MU 1,700.91 1,696.05 1,696.05
Consumption by OA consumers MU 225.70 214.46 214.46
Total MU 10,247.66 10,242.80 10,242.80
Distribution Loss % 8.11% 8.153% 8.16%
Energy Input to Distribution
System MU 11,151.99 11,151.99 11,152.79
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Page 67 of 445
Table 0-12: Energy Balance approved by the Commission for FY 2018-19
Particulars UoM MTR Order True-up
Petition
Approved after
truing up
Sales (Own) MU 8,579.21 8,361.60 8,361.60
Sales (change-over) MU 1,667.97 1,571.88 1,571.88
Consumption by OA consumers MU 225.70 235.25 235.25
Total MU 10,472.88 10,168.73 10,168.73
Distribution Loss % 8.61% 7.848% 7.84%
Energy Input to Distribution
System MU 11,456.61 11,034.78 11,034.31
It can be seen that the Distribution Loss approved by the Commission by considering the
energy drawn by AEML-D at T<>D interface based on MSLDC data, works out to 8.16%
for FY 2017-18 and 7.84% for FY 2018-19, which is slightly different than that submitted
by AEML-D in the True-up Petition. The approved loss trajectory for AEML-D for FY
2017-18 and FY 2018-19 was 8.86% and 8.61%, respectively. The efficiency gain on
account of Distribution Losses lower than target loss levels has been computed
subsequently in this Chapter.
The Energy Requirement approved by the Commission after truing up for FY 2017-18 and
FY 2018-19 is given in the Tables below:
Table 0-13: Energy Requirement approved by the Commission for FY 2017-18
Particulars UoM MTR
Order True-up
Petition Approved
after truing up Migrated HT sales + OA
consumption MU 236.83 225.43 225.43
HT Loss % 1.71% 1.71% 1.71% HT grossed up energy at T<>D
boundary MU 240.95 229.36 229.36
Migrated LT sale MU 1,689.77 1,685.07 1,685.07 LT loss % 8.47% 8.47% 8.47% LT grossed up energy at T<>D
boundary MU 1,846.14 1,841.01 1,841.01
Total T<>D energy attributable to
TPC-D sale & OA consumption (A) MU 2,087.09 2,070.36 2,070.36
Total Energy Input at T<>D interface
of AEML-D system (B) MU 11,151.99 11,151.99 11,152.79
Net T<>D energy attributable to
AEML-D sale (B) – (A) MU 9,064.89 9,081.62 9,082.43
InSTS losses % % 3.30% 3.31% 3.30% Total requirement of AEML-D
(MU) at G-T MU 9,374.24 9,392.23 9,392.37
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Page 68 of 445
Table 0-14: Energy Requirement approved by the Commission for FY 2018-19
Particulars UoM MTR
Order True-up
Petition Approved
after truing up Migrated HT sales + OA
consumption MU 243.27 243.27
HT Loss % 1.71% 1.71%
HT grossed up energy at T<>D
boundary MU 247.51 247.51
Migrated LT sale MU 1,563.86 1,563.86
LT loss % 8.28% 8.28%
LT grossed up energy at T<>D
boundary MU 1,705.04 1,705.04
Total T<>D energy attributable to
TPC-D sale & OA consumption (A) MU 1,817.74 1,952.54 1,952.54
Total Energy Input at T<>D interface
of AEML-D system (B) MU 11,456.61 11,034.78 11,034.31
Net T<>D energy attributable to
AEML-D sale (B) – (A) MU 9,638.87 9,082.24 9,081.77
InSTS losses % % 3.30% 3.10% 3.11%
Total requirement of AEML-D
(MU) at G-T MU 9,967.81 9,372.79 9,373.27
1.37 POWER PROCUREMENT
AEML-D’s Submission
During FY 2017-18 and FY 2018-19, AEML-D has procured power under its long-term
Power Purchase Arrangement with AEML-G (ADTPS) and Power Purchase Agreement
(PPA) with Vidarbha Industries Power Ltd.-Generation (VIPL-G). After accounting for the
availability from long-term sources, the shortfall in power requirement was met by purchase
from contracted short-term sources and from the Power Exchanges. AEML-D has also
contracted Renewable Energy (RE) power from different sources for meeting the
Renewable Purchase Obligation (RPO) specified by the Commission for FY 2017-18 and
FY 2018-19. The surplus power available at different times was sold outside its Licence
area through the Power Exchanges. Further there was offtake (decrement) from the
Imbalance Pool as per real time deviation.
1.37.1 AEML-G (ADTPS)
AEML-D submitted that pursuant to the directions of the Commission vide its Order in
Case No. 8 of 2008, AEML-D had entered into a 10-year Power Purchase Arrangement
with AEML-G valid till 23 February, 2018. The PPA was further extended for five years,
i.e., up to 22 February, 2023 vide Order dated 8 February, 2018 in Case No. 5 of 2017. For
FY 2017-18, AEML-D has considered the Fixed Charge of Rs. 331.45 Crore, as approved
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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by the Commission in ADTPS’s MYT Order dated 18 August 2016 (Case No. 14 of 2016),
and actual Variable Charge including FAC of Rs. 3.57 per kWh, amounting to Rs. 1,137.31
Crore payable to ADTPS.
For FY 2018-19, AEML-D has considered the Fixed Charges payable to ADTPS as Rs.
182.94 Crore, as approved by the Commission in ADTPS MTR Order dated 12 September
2018 in Case No. 202 of 2017. However, till the time ADTPS MTR Order was issued,
AEML-D had been charged the Fixed Charges of ADTPS as per the ADTPS MYT Order
dated 18 August, 2016 in Case No. 14 of 2016, wherein the Commission had approved
Fixed Charges of Rs. 350.74 Crore. Thus, for first three months of FY 2018-19, AEML-D
has considered Rs. 29.23 Crore per month and for rest nine months, AEML-D has
considered Rs. 10.58 Crore per month as the Fixed Charges of ADTPS, such that the total
Annual Capacity Charges are limited to the approved amount of Rs. 182.94 Crore as per
the MTR Order. The actual variable cost of generation works out to Rs. 3.88/kWh (Rs.
1,267.13 Crore), which includes the applicable FAC as per MYT Regulations, 2015.
The incentive applicable to ADTPS in FY 2017-18 and FY 2018-19 was zero, as the actual
PLF was lower than 85%. The FAC has been computed as per MYT Regulations, 2015.
The summary of power purchase from ADTPS in FY 2017-18 and FY 2018-19 is
summarized in the Table below:
Table 0-15: Power Purchase Cost from ADTPS for FY 2017-18 as submitted by
AEML-D
Source -
DTPS
Purchase
(MU)
Fixed Cost
(Rs.
Crore)
Variable
Cost (Rs.
Crore)
Incentive
(Rs.
Crore)
Total
Cost (Rs.
Crore)
Rate
(Rs.
/kWh)
MYT Order 3,800.65 331.45 1,235.45 - 1,566.90 4.12
MTR Order 3,189.75
1,468.76 4.60
Actual 3,189.76 331.45 1,137.31 - 1,468.76 4.60
Table 0-16: Power Purchase Cost from ADTPS for FY 2018-19 as submitted by
AEML-D
Source -
DTPS
Purchase
(MU)
Fixed Cost
(Rs.
Crore)
Variable
Cost (Rs.
Crore)
Incentive
(Rs.
Crore)
Total
Cost (Rs.
Crore)
Rate
(Rs.
/kWh)
MTR Order 3,764.17
1,453.35 3.86
Actual 3,268.16 182.94 1,267.13 - 1,450.07 4.44
Commission’s Analysis and Ruling
The cost of power purchase from ADTPS claimed by AEML-D is in line with the Fixed
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 70 of 445
Charges and Variable Charges approved by the Commission for AEML-G for FY 2017-18
and FY 2018-19, as well as the revenue considered by ADTPS from sale of power in FY
2017-18 and FY 2018-19. The same has also been approved in MYT Order for AEML-G
dated 30 March 2020 in Case No. 298 of 2019. Hence, the Commission has approved the
actual quantum and cost of power purchase from ADTPS for FY 2017-18 and FY 2018-19,
as follows:
Table 0-17: Power Purchase from ADTPS approved by Commission after truing up
for FY 2017-18 and FY 2018-19
Source
MTR Order True-up Petition Approved after truing up
Quantu
m (MU)
Cost
(Rs.
Crore)
Rate
(Rs./
kWh)
Quantu
m (MU)
Cost
(Rs.
Crore)
Rate
(Rs./
kWh)
Quantu
m (MU)
Cost
(Rs.
Crore)
Rate
(Rs./
kWh)
FY 2017-18 3,189.75 1,468.76 4.60 3,189.76 1,468.76 4.60 3,189.80 1,468.76 4.60
FY 2018-19 3,764.17 1,453.35 3.86 3,268.16 1,450.07 4.44 3,268.03 1,450.07 4.44
1.37.2 Vidarbha Industries Power Ltd.
AEML-D’s Submission
AEML-D has signed a long-term PPA with VIPL-G. The PPA with Unit-2 of VIPL-G was
approved by the Commission vide Order dated 20 February 2013 (Case No. 2 of 2013),
while PPA with Unit-1 was approved vide Order dated 19 July 2013 (Case No. 76 of 2013).
Vide the same Order, the Commission approved a consolidated PPA (Unit 1 and Unit 2
combined) between AEML-D and VIPL-G. The Commission approved the tariff for VIPL-
G from FY 2016-17 to FY 2019-20 in VIPL’s MYT Order dated 20 June 2016 in Case No.
91 of 2015.
In the MYT Order for VIPL-G dated 20 June 2016, the Commission had determined the
variable charge of VIPL-G as Rs. 2.183/kWh for FY 2017-18. Accordingly, AEML-D has
paid the said variable charges to VIPL-G for FY 2017-18. As against fixed charges of Rs.
901.85 Crore approved in MYT Order, AEML-D has paid fixed charges of Rs. 796.42 Crore
to VIPL-G in FY 2017-18 as the actual availability was 75.1% and hence, the capacity
charges were correspondingly pro-rated.
During FY 2018-19, the actual quantum and cost of power from VIPL-G was significantly
lower than the approved quantum and cost, as the actual availability of VIPL-G in FY 2018-
19 was only 46.5%. The reason for low availability given by VIPL in its availability
declarations to MSLDC is lack of availability of coal.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 71 of 445
The summary of power purchase quantum and cost from VIPL-G for FY 2017-18 and FY
2018-19 is shown in the Table below:
Table 0-18: Power Purchase Cost from VIPL-G for FY 2017-18 as submitted by
AEML-D
Source -
VIPL
Purchase
(MU)
Fixed Cost
(Rs. Crore)
Variable Cost
(Rs. Crore)
Total Cost (Rs.
Crore)
Rate (Rs.
/kWh)
MTR Order 3,113.59 1,476.12 4.74
Actual 3,113.59 796.42 679.71 1,476.13 4.74
Table 0-19: Power Purchase Cost from VIPL-G for FY 2018-19 as submitted by
AEML-D
Source -
VIPL
Purchase
(MU)
Fixed Cost
(Rs. Crore)
Variable Cost
(Rs. Crore)
Total Cost (Rs.
Crore)
Rate (Rs.
/kWh)
MTR Order 3,896.43 1,743.65 4.47
Actual 2,026.27 488.40 442.36 930.76 4.59
VIPL-G has filed a Petition (Case No. 199 of 2017) for revised Truing up of FY 2014-15,
truing up of FY 2015-16 and FY 2016-17, provisional truing up of FY 2017-18 and
approval of revised ARR and tariff for FY 2018-19 and FY 2019-20. The Order is yet to be
issued by the Commission. Hence, as a result of this Order, if there is an incremental impact
due to revision in fixed charges and variable charges of VIPL-G, the same will have to be
recovered from consumers.
Commission Analysis and Ruling
VIPL-G has filed its revised MTR Petition in Case No. 199 of 2017, in line with the
directions of the Commission vide Daily Order dated 14 September 2018 in M.A. Nos.
3,4,5 and 6 of 2018 based on the Judgment passed by the Hon’ble Supreme Court in Civil
Appeal No 5399-5400 of 2016 [Energy Watchdog vs CERC] (hereinafter referred to as
"the SC Judgment"). In the SC Judgment, the curtailment of coal supply as well as
non-availability of coal from Coal India Limited (CIL)/ Subsidiaries under Fuel Supply
Agreements (FSAs) / Letter of Assurances (LoAs) issued under the New Coal
Distribution Policy, 2007 (NCDP, 2007) leading to inadequate fuel supply to operate the
plant at Normative Availability / Plant Load Factor (PLF) as well as non-signing of
the FSA despite having granted the Letter of Assurances, has been held as ‘Change in
Law’ event. The Petition filed by VIPL-G in this regard is pending with the Commission,
on account of an Appeal filed by the Commission against the APTEL Judgment being sub-
judice before the Hon’ble Supreme Court. As the matter is sub-judice, it is difficult to assess
the amount payable by AEML-D, if any, to VIPL. As the Commission has yet not been able
to issue its Order on this Petition, based on the latest available Orders issued by the
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 72 of 445
Commission for VIPL-G, the Commission has considered the cost of power purchase from
VIPL-G for FY 2017-18 at the same level as allowed by the Commission in AEML-D’s
MTR Order dated 12 September 2018 (Case No. 200 of 2017), which is the same as actual
payment made by AEML-D to VIPL-G.
For FY 2018-19, the Commission has considered the actual quantum and cost of VIPL-G
as submitted by AEML-D in its Petition. The following Table shows the cost and quantum
approved for purchase from VIPL-G after truing up for FY 2017-18 and FY 2018-19:
Table 0-20: Power Purchase from VIPL-G for FY 2017-18 and FY 2018-19 approved
by Commission
Source
MTR Order True-up Petition Approved after truing up
MU Rs.
crore
Rate
(Rs./
kWh)
MU Rs.
crore
Rate
(Rs./
kWh)
MU Rs.
crore
Rate
(Rs./
kWh)
FY
2017-18 3,113.59 1,476.12 4.74 3,113.59 1,476.13 4.74 3,113.59 1,476.13 4.74
FY
2018-19 3,896.43 1,743.65 4.47 2,026.27 930.76 4.59 2,026.27 930.76 4.59
1.37.3 Renewable Energy Procurement
1.37.3.1 Solar RPO
AEML-D’s Submission
AEML-D signed an Energy Purchase Agreement (EPA) dated 28 March, 2011, for purchase
of energy generated from the 40 MW Solar PV plant of Dhursar Solar Power Pvt. Ltd.
(DSPPL) with effect from 2 September, 2013. The actual power purchase rate from DSPPL
for FY 2017-18 (65.45 MU) was Rs 17.91/kWh, which was restricted to Rs. 10.51/kWh for
FY 2017-18 by the Commission in AEML-D’s MTR Order in Case No. 200 of 2017.
AEML-D has challenged the issue before the Hon’ble ATE in Appeal No. 12 of 2017.
The actual power purchase rate from DSPPL for FY 2018-19 (66.20 MU) was restricted to
Rs. 10.31/kWh based on the methodology adopted by the Commission in MTR Order.
AEML-D has adopted similar approach and derived DSPPL rate of Rs. 10.46/kWh for FY
2018-19, without prejudice to the matters challenged in Appeal No. 12 of 2017.
Accordingly, AEML-D, for the purpose of this Petition has claimed the cost of DSPPL for
FY 2017-18 and FY 2018-19 using the rate derived by the Commission’s methodology.
AEML-D has purchased 93,144 units and 0.48 MU (consumer end) of energy from Roof
Top Solar generators in AEML-D licence area in FY 2017-18 and FY 2018-19, respectively
as per the MERC (Net Metering for Roof Top Solar PV System) Regulations, 2015 [MERC
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 73 of 445
Net Metering Regulations, 2015]. The cost of such purchase is accounted in the power
purchase expense for FY 2018-19 and FY 2019-20, respectively. The cost of purchase from
Roof Top Solar generators in AEML-D licence area in FY 2016-17 (8,932 units at consumer
end) and FY 2017-18 (93,144 units at consumer end) of Rs. 36,380/- and Rs. 0.04 Crore is
accounted in FY 2017-18 and FY 2018-19, respectively, as the settlement for balance
unutilised energy happens after the end of the year.
Table 0-21: Cost of Solar Power Purchase in FY 2017-18 and FY 2018-19, as
submitted by AEML-D
Particulars
FY 2017-18 FY 2018-19
Quant
um
(MU)
Rate
(Rs./
kWh)
Cost
(Rs.
Crore)
Quant
um
(MU)
Rate
(Rs./
kWh)
Cost
(Rs.
Crore)
MTR Order 65.45 10.51 68.79 68.52 10.31 70.64
DSPPL 65.45 10.51 68.79 66.20 10.46 69.24
Purchase from RTS
Generators
0.01
0.04
Total 65.45 10.51 68.80 66.20 10.47 69.28
AEML-D submitted that there has been 3.06 MU and 7.96 MU of Roof Top Solar
generation in its licence area during FY 2017-18 and FY 2018-19 respectively, which is
considered for meeting a part of the solar RPO, as all the generation pertains to consumers,
who themselves are not ‘Obligated Entities’. Thus, the total solar quantum to be considered
for meeting a part of solar RPO in FY 2017-18 and FY 2018-19 is 68.52 MU and 74.16
MU, respectively in accordance with MERC Net Metering Regulations, 2015.
AEML-D has not purchased Solar RECs to meet the balance Solar RPO target in FY 2017-
18 due to the stay of trading of Solar RECs in Power Exchanges for a major part of FY
2017-18. The same was also accepted by the Commission in the Order for verification of
RPO for FY 2017-18 for AEML-D in Case No. 39 of 2019 dated 4 April 2019. The
cumulative shortfall in Solar RPO till FY 2017-18, as approved in the Order in Case No.
39 of 2019 dated 4 April 2019 is shown in the Table below:
Table 0-22: Cumulative Shortfall in Solar RPO Target till FY 2017-18 as Approved
in Order in Case No. 39 of 2019
Particulars
Till FY
2015-16
FY 2016-17 FY 2017-18 Till FY
2017-
18
MU % MU % MU
Gross Energy Consumption 8,987.64 9,374.24
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 74 of 445
Particulars
Till FY
2015-16
FY 2016-17 FY 2017-18 Till FY
2017-
18
MU % MU % MU
RPO Target 186.13 1 89.88 2 187.48 463.49
Achievement 267.05 0.74 66.55 0.73 68.52 402.12
Shortfall / (Surplus) (80.92) 0.26 23.32 1.27 118.97 61.37
Due to changes in Gross Energy Consumption in FY 2017-18 (due to change in own sales,
Change-over sales and Open Access consumption), the cumulative solar shortfall till FY
2017-18 stands revised, as under:
Table 0-23: Revised Cumulative Shortfall in Solar RPO Target till FY 2017-18
Particulars
Till FY
2015-16
FY 2016-17 FY 2017-18 Till FY
2017-
18
MU % MU % MU
Gross Energy Consumption 8,987.64 9,392.23
RPO Target 186.13 1 89.88 2 187.84 463.85
Achievement 267.05 0.74 66.55 0.73 68.52 402.12
Shortfall / (Surplus) (80.92) 0.26 23.32 1.27 119.33 61.73
AEML-D has not purchased any Solar RECs during FY 2018-19 and has requested the
Commission to allow it to meet the Solar RE shortfall of FY 2018-19 through contracted
Hybrid RE Power in the next Control Period.
Commission’s Analysis and Ruling
The Commission has considered the Solar RPO requirement of AEML-D for FY 2017-18
at 2% and 2.75% of the Gross Energy Requirement approved in this Order, in accordance
with Solar RPO target for FY 2017-18 and FY 2018-19, respectively, as specified in the
MERC RPO-REC Regulations, 2016.
The Commission has approved the Solar power purchase cost as submitted by AEML-D
for FY 2017-18 and FY 2018-19 to meet the RPO requirement as per the methodology
followed by it in the MTR Order, as shown in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 75 of 445
Table 0-24: Solar RPO Procurement Cost for FY 2017-18 and FY 2018-19 as
approved by the Commission
Particulars
FY 2017-18 FY 2018-19
Quant
um
(MU)
Rate
(Rs./
kWh)
Cost
(Rs.
Crore)
Quant
um
(MU)
Rate
(Rs./
kWh)
Cost
(Rs.
Crore)
MTR Order 65.45 10.51 68.79 68.52 10.31 70.64
Actual 65.45 10.51 68.80 66.20 10.47 69.28
Approved after truing up 65.45 10.51 68.79 66.20 10.31 68.25
Further, the rate for purchase from DSPPL has been considered as approved in the MTR
Order, and has not been revised as proposed by AEML-D, as the Solar generation quantum
for each year and the rate is now fixed, and cannot be revised every year, depending on the
quantum of generation in that year.
AEML-D has considered 3.06 MU and 7.96 MU of Roof Top Solar generation in its licence
area for meeting a part of solar RPO for FY 2017-18 and FY 2018-19, respectively.
Therefore the Commission , considers the total solar quantum of 68.52 MU and 74.16 MU
for meeting solar RPO for FY 2017-18 and FY 2018-19, respectively, as per MERC Net
Metering Regulations, 2015. However, the quantum of 3.06 MU and 7.96 MU of Roof Top
Solar generation has not been considered towards the power purchase quantum and cost.
The Commission has not considered any purchase of Solar RECs by AEML-D in FY 2017-
18 and FY 2018-19, based on the submissions made by AEML-D.
Accordingly, the Commission has considered the revised Cumulative Shortfall in Solar
RPO after final truing up for FY 2017-18 and FY 2018-19, as shown in the Tables below:
Table 0-25: Cumulative Shortfall in Solar RPO for FY 2017-18 as approved by
Commission
Particulars
Till FY
2016-
17
FY 2017-18 as
submitted by
AEML-D
FY 2017-18 as
approved
Approved
till FY
2017-18
MU % MU % MU
Gross Energy
Consumption 9,392.23 9,392.37
RPO Target 276.01 2.00 187.84 2.00 187.85 463.86
Achievement 333.60 0.73 68.52 0.73 68.52 402.11
Shortfall /
(Surplus) (57.59) 1.27 119.33 1.27 119.33 61.74
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 76 of 445
Table 0-26: Cumulative Shortfall in Solar RPO for FY 2018-19 as approved by
Commission
Particulars
Approved
till FY
2017-18
FY 2018-19 as
approved
Approved
till FY
2018-19
MU % MU
Gross Energy
Consumption 9,373.27
RPO Target 463.86 2.75 257.76 721.62
Achievement 402.11 0.79 74.16 476.27
Shortfall /
(Surplus) 61.74 1.96 183.61 245.35
For the purpose of arriving at cost implications, the Commission has considered that
AEML-D shall meet the cumulative shortfall of Solar RPO up to FY 2018-19 during the
next Control Period in the ratio of the contracted power of Wind-Solar Hybrid RE
However, final decision on allowing carried forward of shortfall in next control period
would be taken during RPO verification process for FY 2018-19.
1.37.4 Non-Solar RPO
AEML-D’s Submission
AEML-D has procured Non-Solar RE power from its contracted sources for meeting its
Non-Solar RPO in FY 2017-18 and FY 2018-19, as shown in the Table below:
Table 0-27: Power Purchase Cost from Non-Solar Sources for FY 2017-18 and FY
2018-19 as submitted by AEML-D
Source FY 2017-18 FY 2018-19
Purchase
(MU)
Cost
(Rs.
Crore)
Rate
(Rs.
/kWh)
Purchase
(MU)
Cost
(Rs.
Crore)
Rate
(Rs.
/kWh)
MTR Order 200.67 102.27 5.10 204.59 106.03 5.18
AEML-D Petition
Reliance Innoventures 76.76 36.08 4.70 89.60 43.46 4.85
AAA Sons Enterprise 2.23 1.05 4.70 2.83 1.34 4.73
Vector Green Energy
Pvt. Ltd. 31.71 14.90 4.70 34.75 16.85 4.85
Vector Green Energy
Pvt. Ltd. 11.53 5.84 5.07 12.28 6.23 5.07
Tembhu Power Pvt.
Limited 7.58 3.23 4.26 5.61 2.39 4.26
Reliance Clean Power
Pvt. Ltd. 70.87 41.17 5.81 69.46 40.35 5.81
Total 200.67 102.27 5.10 214.53 110.62 5.16
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 77 of 445
AEML-D has not purchased any Non-Solar RECs during FY 2017-18 and FY 2018-19 to
meet its Non-Solar RPO for the respective years. AEML-D has received an incentive of Rs.
0.13 Crore from Indian Energy Exchange (IEX) for purchase of Non-solar REC’s in earlier
years. The same has been considered in power purchase cost for FY 2017-18.
The cumulative shortfall in Non-solar RPO till FY 2017-18, as approved in the Order for
verification of RPO for FY 2017-18 for AEML-D in Case No. 39 of 2019 dated 4 April
2019, is shown in the Table below:
Table 0-28: Cumulative Shortfall in Non-Solar RPO Target till FY 2017-18 as
approved in Order in Case No. 39 of 2019
Particulars
Till FY
2015-16
FY 2016-17 FY 2017-18 Till FY
2017-18
MU % MU % MU
Gross Energy Consumption 8,987.64 9,374.24
Non-Solar RPO
Target 3,734.62 10 898.76 10.50 984.30 5,617.68
Achievement 3,749.98 7.45 669.23 2.14 200.60 4,619.80
Shortfall / (Surplus) (15.36) 2.55 229.54 8.36 783.70 997.88
Mini / Micro RPO
Target 5.90 0.20 1.80 0.20 1.97 9.67
Achievement 5.91 0.00 0.00 0.00 0.00 5.91
Shortfall / (Surplus) (0.01) 0.20 1.80 0.20 1.97 3.76
Due to change in Gross Energy Consumption in FY 2017-18 (due to change in own sales,
Change-over sales and Open Access consumption), the cumulative Non-Solar shortfall till
FY 2017-18 stands revised, as under:
Table 0-29: Revised Cumulative Shortfall in Non-Solar RPO Target till FY 2017-18
Particulars
Till FY
2015-16
FY 2016-17 FY 2017-18 Till FY
2017-18
MU % MU % MU
Gross Energy Consumption 8,987.64 9,392.23
Non-Solar RPO
Target 3,734.62 10 898.76 10.50 986.18 5,619.57
Achievement 3,749.98 7.45 669.23 2.14 200.67 4,619.88
Shortfall / (Surplus) (15.36) 2.55 229.54 8.36 785.51 999.69
Mini / Micro RPO
Target 5.90 0.20 1.80 0.20 1.97 9.67
Achievement 5.91 0.00 0.00 0.00 0.00 5.91
Shortfall / (Surplus) (0.01) 0.20 1.80 0.20 1.97 3.76
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 78 of 445
AEML-D has requested the Commission to allow it to meet the Non-Solar RE shortfall of
FY 2018-19 through contracted Hybrid RE Power in the next Control Period.
Commission’s Analysis and Ruling
The Commission has computed the quantum of Non-solar RPO for FY 2017-18 and FY
2018-19 at 10.50% and 11.00%, respectively, of the Gross Energy Requirement approved
in this Order, in accordance with Non-Solar RPO target for FY 2017-18 and FY 2018-19
specified in the MERC RPO-REC Regulations, 2016. The Commission has not considered
any purchase of Non-Solar RECs during FY 2017-18 and FY 2018-19, as submitted by
AEML-D. The following Table shows the summary of Non-Solar RE purchase approved
by the Commission in the truing up for FY 2017-18 and FY 2018-19:
Table 0-30: Non-Solar RE Purchase for FY 2017-18 as approved by the Commission
Particulars
MTR Order True-up Petition Approved after truing up
Quant
um
(MU)
Cost
(Rs.
crore)
Rate
(Rs./
kWh)
Quant
um
(MU)
Cost
(Rs.
crore)
Rate
(Rs./
kWh)
Quant
um
(MU)
Cost
(Rs.
crore)
Rate
(Rs./
kWh)
Non-Solar
Power Purchase 200.67 102.27 5.10 200.67 102.27 5.10 200.67 102.27 5.10
Non-Solar REC
Purchase - -
Incentive from
IEX - (0.13) (0.13) (0.13)
Total 200.67 102.14 5.10 200.67 102.14 5.10 200.67 102.14 5.10
Table 0-31: Non-Solar RE Purchase for FY 2018-19 as approved by the Commission
Particulars
MTR Order True-up Petition Approved after truing up
Quant
um
(MU)
Cost
(Rs.
crore)
Rate
(Rs./
kWh)
Quant
um
(MU)
Cost
(Rs.
crore)
Rate
(Rs./
kWh)
Quant
um
(MU)
Cost
(Rs.
crore)
Rate
(Rs./
kWh)
Non-Solar Power
Purchase 204.59 106.03 5.18 214.53 110.62 5.16 214.53 110.62 5.16
Non-Solar REC
Purchase
Total 204.59 106.03 5.18 214.53 110.62 5.16 214.53 110.62 5.16
The Commission has considered the revised Cumulative Shortfall in Non-Solar RPO till
FY 2017-18 and FY 2018-19, as shown in the Tables below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 79 of 445
Table 0-32: Cumulative Shortfall in Non-Solar RPO for FY 2017-18 as approved by
Commission
Particulars
Till FY
2016-17
FY 2017-18 as
submitted by
AEML-D
FY 2017-18 as
approved
Approved
till FY
2017-18
MU % MU % MU
Gross Energy
Consumption 9,392.23 9,392.37
Non-Solar RPO
RPO Target 4,633.38 10.50 986.18 10.50 986.20 5,619.58
Achievement 4,419.21 2.14 200.67 2.14 200.67 4,619.88
Shortfall / (Surplus) 214.17 8.36 785.51 8.36 785.53 999.70
Mini / Micro RPO
RPO Target 7.70 0.20 1.97 0.20 1.97 9.67
Achievement 5.91 0.00 0.00 0.00 0.00 5.91
Shortfall / (Surplus) 1.79 0.20 1.97 0.20 1.97 3.76
Table 0-33: Cumulative Shortfall in Non-Solar RPO for FY 2018-19 as approved by
Commission
Particulars
Till FY
2017-18
FY 2018-19 as
approved
Approved till
FY 2018-19
MU % MU
Gross Energy Consumption 9,373.27
Non-Solar RPO
RPO Target 5,619.58 11.00 1,031.06 6,650.64
Achievement 4,619.88 2.29 214.53 4,834.41
Shortfall / (Surplus) 999.70 8.71 816.53 1,816.23
Mini / Micro RPO
RPO Target 9.67 0.20 2.06 11.73
Achievement 5.91 0.00 0.00 5.91
Shortfall / (Surplus) 3.76 0.20 2.06 5.82
For the purpose of arriving at cost implications, the Commission has considered that
AEML-D shall meet the cumulative shortfall of Non-Solar RPO up to FY 2018-19 during
the next Control Period in the ratio of the contracted power of Wind-Solar Hybrid RE.
However, final decision on allowing carried forward of shortfall in next control period
would be taken during RPO verification process for FY 2018-19.
1.37.5 Short-Term Power Purchase
AEML-D’s Submission
After considering the procurement from long-term sources and RE sources, AEML-D has
purchased the balance requirement from firm short-term sources as well as from Power
Exchanges on day-ahead basis. Further, under the Stand-by arrangement, AEML-D has
procured power from MSEDCL to meet its contingency requirements.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 80 of 445
FY 2017-18
AEML-D has also drawn power from the State Imbalance Pool in FY 2017-18. MSLDC
has issued the provisional FBSM bills only up to last week of February 2018. Accordingly,
AEML-D has considered the estimated pool quantum for the balance period of FY 2017-
18, for the purpose of true up. The pool quantum for the period for which bills are yet to be
issued by MSLDC is estimated considering transmission losses of 3.30% and actual T-D
input and energy sales to own, change-over and open access consumers.
In the MTR Petition (Case No. 200 of 2017), AEML-D had claimed the FBSM cost for FY
2015-16 and FY 2016-17 on provisional basis as no bills were available from MSLDC
(stated as MSEDCL in Petition). The provisional bills were available later in FY 2017-18
and accordingly adjustments for difference between estimated pool cost and provisional
bills for the period from 26 October 2015 to 31 March 2016 (Rs. 2.59 Crore) and 1 April
2016 to 3 April 2016 (Rs. 2.56 Crore) have been made in FAC of FY 2017-18 and
accordingly included in the FBSM cost for FY 2017-18. Further, the bill for power procured
from MSEDCL through Stand-by arrangement has not been received yet and therefore, the
cost for the same has not been claimed at present.
Further, surplus energy of OA consumers is also available to AEML-D and included in its
power purchase quantum. This includes 4.46 MU of lapsed energy from firm OA
consumers, 1.33 MU of banking fee for non-firm OA consumers, 7.11 MU of purchase
from non-firm OA consumers, and 6.39 MU of lapsed energy from non-firm OA
consumers. The cost of purchase of power from non-firm OA consumers in FY 2016-17 is
Rs. 1.58 Crore and has been accounted in FY 2017-18, as the actual payments have been
made in FY 2017-18. The cost of purchase of power from Non-firm OA consumers in FY
2017-18 is accounted in FY 2018-19 (as payments are made in FY 2018-19) and is claimed
in the truing up of FY 2018-19.
FY 2018-19
AEML-D has entered into energy banking contracts from October 2018 onwards. As per
the transaction, AEML-D received energy in the months of October 2018 to March 2019
and returned it in the period from July 2019 to September 2019. Since AEML-D has only
paid for the Open Access charges related to the banking transactions in FY 2018-19,
AEML-D has included only the Open Access charges in the power purchase cost for FY
2018-19. As the actual cost incidence is in FY 2019-20 for the energy procured to return
the banked energy, the same is included in the power purchase cost for FY 2019-20.
Further, under the Stand-by arrangement, AEML-D has procured power from MSEDCL to
meet its contingency requirements. AEML-D has also drawn power from the State
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 81 of 445
Imbalance Pool in FY 2018-19. MSLDC has issued the provisional FBSM bills only up to
February 2018 and it is, thus, not possible to submit the energy decrement from Pool from
the provisional FBSM statements. Hence, AEML-D has derived the energy decrement from
Pool by considering the total energy input at T-D, energy at T-D for changeover and open
access consumers, quantum of energy procured from different sources (as per the bills
raised by generators) and the actual transmission loss of 3.11% for FY 2018-19 as per
MSLDC. The Commission had, in the FAC approvals dated 24 October, 2018 and 14
November, 2018, approved the FAC for AEML-D without considering the FBSM cost as
the cost of FBSM booked by AEML-D was on provisional basis. Considering the same
approach, AEML-D has claimed the actual cost based on provisional FBSM bills for FY
2017-18 received in the truing up of FY 2017- 18. As the provisional FBSM bills for FY
2018-19 have not been received so far, AEML-D has not claimed any cost towards energy
decrement from Imbalance Pool for FY 2018-19, under the power purchase cost.
For truing up of FY 2016-17, AEML-D in the MTR Petition (Case No. 200 of 2017) had
claimed the FBSM cost for FY 2016-17 on provisional basis. The adjustments for the period
4 April, 2016 to 31 March, 2017 [(-) Rs. 49.28 Crore] have been passed on in FY 2018-19
as the provisional bills for this period were received in FY 2018-19. Adjustments for the
period 1 April, 2016 to 3 April, 2016 have been included in FBSM cost claimed in the
truing up of FY 2017-18. Further, as the bill for power procured from MSEDCL through
Stand-by arrangement has not been received yet, the cost for the same has not been claimed
at present. Further, surplus energy of OA consumers is also available to AEML-D and is
included in its power purchase quantum. This includes 2.00 MU of lapsed energy from firm
OA consumers, 1.94 MU of banking fee for non-firm OA consumers, 11.45 MU of purchase
from non-firm OA consumers, and 9.06 MU of lapsed energy from non-firm OA
consumers. The cost of purchase of power from Non-firm OA consumers in FY 2017-18 is
Rs. 2.72 Crore and has been accounted in FY 2018-19, as the actual payments have been
made in FY 2018-19. The cost of purchase of power from Non-firm OA consumers in FY
2018-19 is accounted in FY 2019-20 (as payments are made in FY 2019-20).
The summary of short-term power purchase for FY 2017-18 and FY 2018-19 as submitted
by AEML-D is shown in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 82 of 445
Table 0-34: Power Purchase from Short Term Sources for FY 2017-18 and FY 2018-
19 as submitted by AEML-D
Source
FY 2017-18 FY 2018-19
Purchase
(MU)
Cost
(Rs.
crore)
Rate
(Rs.
/kWh)
Purchase
(MU)
Cost
(Rs.
crore)
Rate
(Rs.
/kWh)
Approved in MTR
Order 2,829.22 1,058.42 3.74 968.27 338.99 3.50
True-up Petition
Bilateral 326.75 123.73 3.79 442.11 188.96 4.27
Power Exchange 1,629.38 625.95 3.84 470.41 15.88
Stand-by Arrangement
with MSEDCL 11.22 - - 2,119.63 969.32 4.57
Lapsed power from
firm OA consumers 4.46 - - 40.84
Banking fee 1.33 - - 2.00
Purchase from Non-
firm OA consumers 7.11 1.58 - 1.94
Lapsed power from
Non-firm OA
consumers
6.39 - - 11.45 2.72
State Imbalance Pool 860.58 226.91 2.64 9.06
Total 2,847.21 978.18 3.44 733.26 (49.28)
3,830.70 1,127.60 2.94
AEML-D submitted that in the MTR Order, the Commission had provisionally approved a
rate of Rs. 3.74 per unit and 3.50 per unit for purchase of short-term power (including
imbalance pool rate) for FY 2017-18 and FY 2018-19, respectively, and had directed to
submit detailed justification for exceeding the stipulated ceiling rate for purchase of short-
term power. AEML-D has submitted the detailed justification in Compliance to Directives.
Commission’s Analysis and Ruling
The details of actual short-term power purchase in FY 2017-18 and FY 2018-19 submitted
by AEML-D have been analysed.
The Commission notes that the quantum of energy purchased through the Imbalance Pool
is significantly high, at around 9% of the overall power purchase quantum. However, the
quantum purchased through Imbalance Pool in FY 2017-18 is lower than the combined
purchase from Bilateral Sources and Power Exchanges. Though the rate of power purchase
through the Imbalance Pool is lower than that of Bilateral Sources or Power Exchange, the
Imbalance Pool mechanism should not be treated as a source of procuring power and is only
meant for settling the deviations in the real-time power interchange between various pool
participants. Accordingly, AEML-D should plan its power procurement in a way that the
purchases from the Imbalance Pool are minimised.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 83 of 445
The quantum and cost of short-term power purchase approved by the Commission after
truing up for FY 2017-18 and FY 2018-19 is shown in the Tables below:
Table 0-35: Short Term Power Purchase for FY 2017-18 as approved by the
Commission
Particulars
MTR Order True-up Petition Approved after Truing
up
Qtm. Cost
Rate
per
Unit
Qtm. Cost
Rate
per
Unit
Qtm. Cost
Rate
per
Unit
(MU) (Rs.
crore)
(Rs/
kWh) (MU)
(Rs.
crore)
(Rs/
kWh) (MU)
(Rs.
crore)
(Rs/
kWh)
Bilateral 326.75 123.73 3.79 326.75 123.68 3.79
Power
Exchanges 1,629.38 625.95 3.84 1,629.38 625.95 3.84
Firm OA
Lapsed 4.46 - - 4.46 - -
Banking fee 1.33 - - 1.33 - -
Non-firm OA
Purchased 7.11 1.58 - 7.11 1.58 -
Non-firm OA
Lapsed 6.39 - - 6.39 - -
RTS 0.09 - -
Short-Term
Power
Purchase
1,975.42 751.27 3.80 1,975.51 751.22 3.80
MSEDCL
Stand-by 11.22 - - 11.22 - -
Imbalance
Pool 860.58 226.91 2.64 860.58 226.91 2.64
Total Short-
term
Purchase
2,829.22 1,058.42 3.74 2,847.21 978.18 3.44 2,847.21 978.13 3.44
Table 0-36: Short-Term Power Purchase for FY 2018-19 as approved by the
Commission
Particulars
MTR Order True-up Petition Approved after Truing up
Qtm. Cost
Rate
per
Unit
Qtm. Cost
Rate
per
Unit
Qtm. Cost
Rate
per
Unit
(MU) (Rs.
crore)
(Rs/
kWh) (MU)
(Rs.
crore)
(Rs/
kWh) (MU)
(Rs.
crore)
(Rs/
kWh)
Bilateral 442.11 188.96 4.27 442.11 188.96 4.27
Banking 470.41 15.88 470.41 15.88
Power
Exchanges 2,119.63 969.32 4.57 2,119.63 969.32 4.57
Firm OA
Lapsed 2.00 2.00
Banking fee 1.94 1.94
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 84 of 445
Particulars
MTR Order True-up Petition Approved after Truing up
Qtm. Cost
Rate
per
Unit
Qtm. Cost
Rate
per
Unit
Qtm. Cost
Rate
per
Unit
(MU) (Rs.
crore)
(Rs/
kWh) (MU)
(Rs.
crore)
(Rs/
kWh) (MU)
(Rs.
crore)
(Rs/
kWh)
Non-firm OA
Purchased 11.45 2.72 11.45 2.72
Non-firm OA
Lapsed 9.06 9.06
RTS 0.04 0.48 0.04
Short-Term
Power
Purchase
3,056.61 1,176.66 3.85 3,057.09 1,176.66 3.85
MSEDCL
Stand-by 40.84 - - 40.84 - -
Imbalance
Pool 733.26 (49.28) - 733.26 (49.48) -
Total Short-
term
Purchase
968.27 338.99 3.50 3,830.70 1,127.60 2.94 3,831.18 1,127.38 2.94
FY 2017-18
The Commission approved the ceiling rate of Rs. 3.14 per unit for purchase from short-
term sources for FY 2017-18 in the MYT Order dated 21 October 2016. At the time of
MTR, AEML-D submitted a rate of Rs. 3.74 per unit, which was higher than the stipulated
rate of Rs. 3.14 per unit. The Commission had directed AEML-D, at the time of MTR to
submit detailed justification for exceeding the stipulated ceiling rate for purchase of short-
term power. In accordance with the direction, AEML-D justified that the increase in rate of
short term power is on account of various factors such as reduction in hydro generation due
to lower rainfall in southern and western States, shortage in coal supply by CIL and coal
logistics issues, which were not accounted for in the rate of Rs. 3.14 per unit.
AEML-D submitted that the difference in the rate approved in the MTR Order and now
submitted in Truing-up Petition is on account of change in State Imbalance Pool Quantum
as a result of change in sales and quantum of purchase/ lapsed energy/banking for FY 2017-
18, which was not considered at the time of MTR due to pending finalization of bills. The
Commission based on the justification submitted by AEML-D considers the rate of Rs. 3.79
per unit from Bilateral Sources as submitted in its Petition.
FY 2018-19
The Commission at the time of MTR had approved the ceiling rate of Rs. 3.50 per unit for
purchase from Bilateral Sources. AEML-D filed a Petition (Case No. 335 of 2018) for
approval of procurement of additional power on account of shortfall from approved sources
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 85 of 445
due to anticipated increase in demand . The Commission vide its Order dated 1 January
2019, considered the submission of AEML-D with regard to actual discovery of short-term
rates on DEEP Portal and hence increased the ceiling rate from Rs. 3.50 per unit, as
approved in MTR Order, to Rs. 5.00 per unit for FY 2018-19 and FY 2019-20. AEML-D
submitted that the actual rate achieved during FY 2018-19 from Bilateral Sources is Rs.
4.27 per unit, which is still lesser than the ceiling rate of Rs. 5.0 per unit approved vide
Order in Case No. 335 of 2019. The Commission therefore, approves the purchase from
Bilateral Sources as submitted by AEML-D in its Petition.
The Commission has also verified the submission made by AEML-D for procurement
through Power Exchanges during FY 2017-18 and FY 2018-19. The Commission
accordingly approves the quantum and cost submitted by AEML-D for procurement
through Power Exchanges.
1.37.6 Sale of Surplus Power
AEML-D’s Submission
AEML-D submitted that surplus energy during certain hours of the day resulting from
varying load patterns in FY 2017-18 and FY 2018-19, has been sold outside the Licence
area through the Power Exchanges. The summary of revenue realized from such sale has
been considered to reduce the power purchase cost for FY 2017-18 and FY 2018-19. The
summary of sale of surplus power in FY 2017-18 and FY 2018-19 as submitted by AEML-
D is as under:
Table 0-37: Revenue from Surplus Sale for FY 2017-18 and FY 2018-19 as submitted
by AEML-D
Source
FY 2017-18 FY 2018-19
Quantum
(MU)
Revenue
(Rs.
Crore)
Rate
(Rs./kWh)
Quantum
(MU)
Revenue
(Rs.
Crore)
Rate
(Rs./kWh)
MTR Order (24.45) (8.77) 3.59 (31.64) (11.35) 3.59
True-up Petition (24.45) (8.77) 3.59 (32.94) (10.59) 3.22
Commission’s Analysis and Ruling
The Commission has approved the actual revenue earned by AEML-D from sale of surplus
power in the truing up for FY 2017-18 and FY 2018-19, as shown in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 86 of 445
Table 0-38: Sale of Surplus Power in FY 2017-18 and FY 2018-19 as approved by
Commission
Particulars FY 2017-18 FY 2018-19
Quantu
m
(MU)
Revenue
(Rs.
crore)
Rate
(Rs./
kWh)
Quantu
m (MU)
Revenue
(Rs. crore)
Rate
(Rs./
kWh)
Approved in MTR
Order (24.45) (8.77) 3.59 (31.64) (11.35) 3.59
True-up Petition (24.45) (8.77) 3.59 (32.94) (10.59) 3.22
Approved in this
Order (24.45) (8.77) 3.59 (32.94) (10.59) 3.22
1.37.7 Amount payable to Abhijeet MADC Nagpur Pvt. Ltd.
AEML-D’s Submission
AEML had entered into a PPA with Abhijeet MADC Nagpur Energy Pvt. Ltd. (AMNEPL)
on 04.08.10 for supply of power from FY 2011-12 to FY 2013-14. AMNEPL had filed a
Petition before the Commission (Case No. 35 of 2016) asking for additional amount
towards Change in Law with interest. The Commission, in its Order dated 2 April, 2018 in
Case No. 35 of 2016, has allowed the prayers of AMNEPL partly. The Commission, in the
MTR Order dated 12 September 2018 (Case No. 200 of 2017), had ruled that any payment
made by AEML-D to AMNEPL in view of this Order shall be considered at the time of
truing up of FY 2018-19. AEML-D has paid an amount of Rs. 9.66 Crore to AMNEPL after
the issuance of the above Order, which has been considered in the power purchase cost for
FY 2018-19.
Commission’s Analysis and Ruling
The Commission has considered the amount claimed by AEML-D to be paid to AMNEPL
in the power purchase cost of FY 2018-19.
1.37.8 FBSM Provisional Fixed Cost
AEML-D’s Submission
The Commission, in its Daily Order dated 6 February, 2019 in Case No. 25 of 2019 and
Case No. 28 of 2019, had directed AEML-D to deposit 20% of the provisional Fixed Charge
bill raised by MSEDCL on 25 January, 2019 under intra-State ABT for FY 2011-12 to FY
2017-18. AEML-D has paid the amount of Rs. 24.92 Crore and has considered the same as
part of power purchase cost for FY 2018-19.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 87 of 445
Commission’s Analysis and Ruling
The Commission has considered the amount claimed by AEML-D to be paid to MSEDCL
as directed in Daily Order dated 6 February 2019 against FBSM Fixed Cost in power
purchase cost of FY 2018-19.
1.37.9 WRPC DSM Bills
AEML-D’s Submission
AEML-D submitted that the FBSM billing is delayed by almost 2 years whereas the WRPC
billing is happening with just 2 weeks delay. Whenever WRPC bill is payable, MSLDC
does not have sufficient Funds as the FBSM bills are not in sync. This matter was discussed
in MSPC meeting dated 25 March, 2019. It was decided that MSLDC will raise provisional
bill for payment towards the WRPC bills. Since billing data is not available, it was decided
that each DISCOM will pay 25% share in the interim. Accordingly, AEML-D pays the
WRPC bills as per the provisional bills raised by MSLDC. The actual payment made in FY
2018-19 (Rs. 59,65,478/-) is included in the power purchase cost for FY 2018-19.
Commission’s Analysis and Ruling
The Commission has considered the amount claimed by AEML-D towards payment as
WRPC DSM bills in the power purchase cost of FY 2018-19.
1.37.10Gap/(Surplus) on account of True-up of TPC-G
AEML-D’s Submission
The Commission had allowed an amount of Rs. (0.25) Crore as AEML-D’s share on
account of truing up of previous years of TPC-G (in Case No. 65 of 2018). The same has
been received from TPC-G and has been considered as part of power purchase cost for FY
2018-19.
Commission’s Analysis and Ruling
The Commission has considered the amount claimed by AEML-D against the gap/(surplus)
on account of True-up of TPC-G in the power purchase cost of FY 2018-19.
1.37.11Transmission Charges, SLDC Charges and Standby Charges
1.37.11.1 Transmission Charges
AEML-D’s Submission
FY 2017-18 : The Commission had approved Transmission Charges of Rs. 402.02 Crore
to be paid by AEML-D for FY 2017-18 in the Suo Motu Order for determination of Intra-
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 88 of 445
State Transmission Charges dated 22 July 2016 in Case No. 91 of 2016. Accordingly,
AEML-D has paid Transmission Charges of Rs. 402.00 Crore to STU in FY 2017-18, which
was also considered by the Commission in the MTR Order in Case No. 200 of 2017, based
on provisional submissions of AEML-D.
FY 2018-19: The Commission had approved Transmission Charges of Rs. 437.03 Crore
for FY 2018-19 in the InSTS MYT Order dated 22 July 2016 in Case No. 91 of 2016. Later,
the Commission determined the Transmission Charges of Rs. 358.49 Crore for FY 2018-
19 in the InSTS MTR Order dated 12 September, 2018 in Case No. 265 of 2017. AEML-D
had paid Transmission Charges in accordance with InSTS MYT Order (Case No. 91 of
2016) till August 2018 and in accordance with InSTS MTR Order (Case No. 265 of 2017)
from September 2018 to March 2019.
The summary of Transmission Charges for FY 2017-18 and FY 2018-19 is shown in the
Table below:
Table 0-39 : Transmission Charges for FY 2017-18 and FY 2018-19 as submitted by
AEML-D (Rs Crore)
Particulars FY 2017-18 FY 2018-19
MTR Order True-up
Petition MTR Order
True-up
Petition
Transmission
Charges 402.00 402.00 358.49 391.19
Commission’s Analysis and Ruling
The Commission has approved the actual Transmission Charges paid by AEML-D for FY
2017-18 and FY 2018-19, which are as per relevant InSTS Orders issued by the
Commission, as shown in the Table below:
Table 0-40: Transmission Charges for FY 2017-18 and FY 2018-19 as approved by
the Commission (Rs. Crore)
Particulars FY 2017-18 FY 2018-19
MTR
Order
True-up
Petition
Approved
after
Truing up
MTR
Order
True-up
Petition
Approved
after
Truing up
Transmission
Charges 402.00 402.00 402.00 358.49 391.19 391.19
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Page 89 of 445
1.37.11.2 MSLDC Charges
AEML-D’s Submission
The Commission had approved MSLDC charges of Rs. 1.30 Crore for FY 2017-18 and Rs.
1.29 Crore for FY 2018-19 in the Order dated 22 July, 2016 in Case No. 20 of 2016.
Accordingly, AEML-D has paid Rs. 1.30 Crore of SLDC charges in FY 2017-18. For FY
2018-19 the Commission determined SLDC charges of 1.18 Crore for FY 2018-19 in the
MSLDC MTR Order dated 12 September, 2018 in Case No. 171 of 2017. AEML-D paid
SLDC charges in accordance with MSLDC MYT Order (Case No. 20 of 2016) till August
2018 and in accordance with MSLDC MTR Order (Case No. 171 of 2017) from September
2018 to March 2019. The summary of SLDC charges for FY 2017-18 and FY 2018-19 is
shown in the Table below:
Table 0-41 : MSLDC Charges for FY 2017-18 and FY 2018-19 as submitted by
AEML-D (Rs. Crore)
Particulars
FY 2017-18 FY 2018-19
MTR Order True-up
Petition MTR Order True-up Petition
MSLDC Charges 1.30 1.30 1.18 1.23
Commission’s Analysis and Ruling
The Commission has approved the actual MSLDC Charges paid by AEML-D in the truing
up for FY 2017-18 and FY 2018-19, as the same are in accordance with the MSLDC
Charges approved by the Commission, as shown in the Table below:
Table 0-42: MSLDC Charges for FY 2017-18 and FY 2018-19 as approved by
Commission (Rs. Crore)
Particulars
FY 2017-18 FY 2018-19
MTR
Order
True-up
Petition
Approved
after
truing up
MTR
Order
True-up
Petition
Approved
after
truing up
SLDC Charges 1.30 1.30 1.30 1.18 1.23 1.23
1.37.11.3 Standby Charges
AEML-D’s Submission
FY 2017-18
The Commission had approved Standby Charges of Rs. 171.12 Crore for FY 2017-18 - in
AEML-D’s MYT Order dated 21 October 2016 (Case No. 34 of 2016) for third Control
Period. AEML-D has paid the Standby Charges of Rs. 171.12 Crore in FY 2017-18, which
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 90 of 445
was also considered by the Commission in the MTR Order in Case No. 200 of 2017, based
on provisional submissions of AEML-D.
FY 2018-19
The Commission had approved Standby Charges of Rs. 167.60 Crore for FY 2018-19 for
AEML-D in MSEDCL’s MYT Order in Case No. 48 of 2016. Later, the Commission
approved the Standby Charges of Rs. 180.90 Crore for FY 2018-19 for AEML-D in
MSEDCL’s MTR Order in Case No. 195 of 2017. AEML-D had paid Standby Charges in
accordance with MSEDCL MYT Order (Case No. 48 of 2016) till August 2018 and in
accordance with MSEDCL MTR Order (Case No. 195 of 2017) from September 2018 to
March 2019. The summary of Standby Charges for FY 2017-18 and FY 2018-19 is shown
in Table below:
Table 0-43 : Stand-by Charges for FY 2017-18 and FY 2018-19 as submitted by
AEML-D (Rs. Crore)
Particulars
FY 2017-18 FY 2018-19
MTR Order True-up
Petition MTR Order
True-up
Petition
Stand-by Charges 171.12 171.12 180.90 175.38
Commission’s Analysis and Ruling
The Commission has approved the actual Standby Charges paid by AEML-D in the truing
up for FY 2017-18 and FY 2018-19, as the same are in accordance with the Standby
Charges approved by the Commission in respective Tariff Orders, as shown in the Table
below:
Table 0-44: Standby Charges approved by the Commission for FY 2017-18 and FY
2018-19 (Rs. Crore)
Particulars
FY 2017-18 FY 2018-19
MTR
Order
True-
up
Petition
Approved
after
truing up
MTR
Order
True-up
Petition
Approved
after
truing up
Stand-by Charges 171.12 171.12 171.12 180.90 175.38 175.38
1.37.12Summary of Power Purchase Cost for FY 2017-18 and FY 2018-19
AEML-D’s Submission
The actual power purchase quantum and cost for FY 2017-18 and FY 2018-19, as against
that approved in the MTR Order, is summarised in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 91 of 445
Table 0-45 : Power Purchase Quantum and Cost for FY 2017-18 as submitted by
AEML-D
Source
MTR Order True-up Petition
Quantum
(MU)
Cost
(Rs.
Crore)
Rate
(Rs.
/kWh)
Quantum
(MU)
Cost
(Rs.
Crore)
Rate
(Rs.
/kWh)
ADTPS 3,189.75 1,468.76 4.60 3,189.75 1,468.76 4.60
VIPL-G 3,113.59 1,476.12 4.74 3,113.59 1,476.13 4.74
Renewable-Solar 65.45 68.79 10.51 65.45 68.80 10.51
Renewable-Non-Solar 200.67 102.27 5.10 200.67 102.27 5.10
Non-Solar REC (0.13) (0.13)
Short-term Purchase 1,956.13 749.69 3.83 1,975.42 751.27 3.80
Surplus Sale (24.45) (8.77) 3.59 (24.45) (8.77) 3.59
Purchase under Standby
arrangement 11.22 4.49 4.00 11.22 - -
Imbalance Pool 861.88 302.66 3.51 860.58 226.91 2.64
Surplus RE bought
from OA consumers - 1.59 - -
Transmission Charges 402.00 402.00
MSLDC Charges 1.30 1.30
Standby Charges 171.12 171.12
Total 9,374.24 4,739.88 5.06 9,392.23 4,659.65 4.96
Table 0-46 : Power Purchase Quantum and Cost for FY 2018-19 as submitted by
AEML-D
Source
MTR Order True-up Petition
Quantum
(MU)
Cost
(Rs.
Crore)
Rate
(Rs.
/kWh)
Quantum
(MU)
Cost
(Rs.
Crore)
Rate
(Rs.
/kWh)
ADTPS 3,764.17 1,453.35 3.86 3,268.03 1,450.07 4.44
VIPL-G 3,896.43 1,743.65 4.47 2,026.27 930.76 4.59
AMNEPL 0 0 9.66
Renewable-Solar 68.52 70.64 10.31 66.20 69.24 10.46
Solar-New 205.60 72.48 3.53 0 0
Renewable-Non-Solar 204.59 106.03 5.18 214.53 110.62 5.16
Non-Solar New 891.87 308.12 3.45 0 0
Short-term Purchase
including Imbalance
Pool
968.27 338.89 3.50 3,830.70 1,127.63 2.94
Surplus Sale (31.64) (11.35) 3.59 (32.94) (10.59) 3.22
FBSM fixed Cost 0 0 24.92
WRPC DSM Bills 0 0 0.60
Sub-Total 9,967.81 4,081.81 4.09 9,372.79 3,712.91 3.96
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 92 of 445
Source
MTR Order True-up Petition
Quantum
(MU)
Cost
(Rs.
Crore)
Rate
(Rs.
/kWh)
Quantum
(MU)
Cost
(Rs.
Crore)
Rate
(Rs.
/kWh)
Transmission Charges 358.49 391.19
MSLDC Charges 1.18 1.23
Standby Charges 180.90 175.38
MSPC Charges 0 0.01
Revenue Gap/
(Surplus) of TPC-G (0.25) (0.25)
Total 9,967.81 4,622.81 4.64 9,372.79 4,280.46 4.57
Commission’s Analysis and Ruling
Based on the source-wise approval of power purchase as discussed above, the power
purchase quantum and cost approved after truing-up for FY 2017-18 and FY 2018-19 is as
shown in the following Tables:
Table 0-47: Power Purchase approved by the Commission for FY 2017-18
Particulars
MTR Order True-up Petition Approved after truing up
Quantum Cost Rate Quantum Cost Rate Quantum Cost Rate
(MU) (Rs.
crore)
(Rs./
kWh) (MU)
(Rs.
crore)
(Rs./
kWh) (MU)
(Rs.
crore)
(Rs./
kWh)
ADTPS 3,189.75 1,468.76 4.60 3,189.75 1,468.76 4.60 3,189.80 1,468.76 4.60
VIPL-G 3,113.59 1,476.12 4.74 3,113.59 1,476.13 4.74 3,113.59 1,476.13 4.74
RE – Solar 65.45 68.79 10.51 65.45 68.80 10.51 65.45 68.79 10.51
RE – Non-Solar 200.67 102.27 5.10 200.67 102.27 5.10 200.67 102.27 5.10
Non – Solar REC (0.13) (0.13) (0.13)
Short Term
Purchase 1,956.13 749.69 3.83 1,975.42 751.27 3.80 1,975.51 751.22 3.80
Purchase under
Standby
arrangement
11.22 4.49 4.00 11.22 - - 11.22 - -
Imbalance Pool 861.88 302.66 3.51 860.58 226.91 2.64 860.58 226.91 2.64
Surplus Sale (24.45) (8.77) 3.59 (24.45) (8.77) 3.59 (24.45) (8.77) 3.59
Surplus RE from
OA consumers
1.59
-
-
Transmission
Charges
402.00
402.00
402.00
MSLDC Charges 1.30 1.30 1.30
Standby Charges 171.12 171.12 171.12
Total 9,374.24 4,739.88 5.06 9,392.23 4,659.65 4.96 9,392.37 4,659.60 4.96
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Table 0-48: Power Purchase approved by the Commission for FY 2018-19
Particulars
MTR Order True-up Petition Approved in this Order
Quantum Cost Rate Quantum Cost Rate Quantum Cost Rate
(MU) (Rs.
crore)
(Rs./
kWh) (MU)
(Rs.
crore)
(Rs./
kWh) (MU)
(Rs.
crore)
(Rs./
kWh)
ADTPS 3,764.17 1,453.35 3.86 3,268.03 1,450.07 4.44 3,268.03 1,450.07 4.44
VIPL-G 3,896.43 1,743.65 4.47 2,026.27 930.76 4.59 2,026.27 930.76 4.59
AMNEPL 0 0 9.66 9.66
RE -Solar 68.52 70.64 10.31 66.20 69.24 10.46 66.20 68.25 10.31
Solar-New 205.60 72.48 3.53 0 0 0 0 0
RE -Non-Solar 204.59 106.03 5.18 214.53 110.62 5.16 214.53 110.62 5.16
Non-Solar New 891.87 308.12 3.45 0 0
Short-term Purchase
including Imbalance
Pool
968.27 338.89 3.50 3,830.70 1,127.63 2.94 3,831.18 1,127.38 2.94
Surplus Sale (31.64) (11.35) 3.59 (32.94) (10.59) 3.22 (32.94) (10.59) 3.22
FBSM fixed Cost 0 0 24.92 24.92
WRPC DSM Bills 0 0 0.60 0.60
Sub-Total 9,967.81 4,081.81 4.09 9,372.79 3,712.91 3.96 9,373.27 3,711.91 3.96
Transmission
Charges 358.49 391.19
391.19
MSLDC Charges 1.18 1.23 1.23
Standby Charges 180.90 175.38 175.38
MSPC Charges 0 0.01 0.01
Revenue Gap/
(Surplus) of TPC-G (0.25) (0.25)
(0.25)
Total 9,967.81 4,622.81 4.64 9,372.79 4,280.46 4.57 9,373.27 4,279.46 4.57
1.38 OPERATION AND MAINTENANCE (O&M) EXPENSES
1.38.1 Allowable O&M Expenses for FY 2017-18 and FY 2018-19
AEML-D’s Submission
The Commission approved the following O&M expenses for FY 2017-18 and FY 2018-19
for AEML-D in the MTR Order (Case No. 200 of 2017)
Table 0-49: O&M Expenses approved in MTR Order for FY 2017-18 and FY 2018-
19 (Rs. Crore)
Particulars FY 2017-18 FY 2018-19
Wires Business 810.80 851.79
Supply Business 399.99 420.22
Total 1,210.80 1,272.01
AEML-D quoted Regulation 72.2 and 72.3 of MYT (First Amendment) Regulations, 2017
which provides for approval of O&M expenses for Wire Business at the time of ARR and
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true-up. While allowing O&M expenses for FY 2017-18 and FY 2018-19 in the MTR Order
in Case No. 200 of 2017, the Commission had considered an escalation factor of 5.06%.
This escalation factor was derived based on 70% CPI inflation and 30% WPI inflation (for
the period from FY 2012-13 to FY 2016-17) for FY 2017-18 and (for the period from FY
2013-14 to FY 2017-18) for FY 2018-19. The Commission had used Wholesale Price
Indices (WPI) of 2004-05 series for deriving the escalation factor of 5.06%. However, from
FY 2017-18, WPI based on 2004-05 series are no longer published and they have been
replaced by WPI based on 2011-12 series. Since the escalation factor originally considered
was based on WPI of 2004-05 series, the escalation factor to be applied at the time of truing
up should also be based on WPI of 2004-05 (equivalent) series. Therefore, AEML-D has
modified the WPI based on 2011-12 series for FY 2017-18 and FY 2018-19 appropriately
to reflect WPI based on 2004-05 series.
FY 2017-18
Based on the above workings, the inflation factor based on 30% of WPI inflation and 70%
of CPI inflation from FY 2013-14 to FY 2017-18, reduced by efficiency factor of 1%, works
out to 3.76%, as shown in the Table below:
Table 0-50: Inflation Factor for Truing-up of O&M Expenses for FY 2017-18
Year WPI WPI
Inflation CPI
CPI
Inflation
FY 2012-13 168 215
FY 2013-14 178 5.98% 236 9.68%
FY 2014-15 181 2.00% 251 6.29%
FY 2015-16 177 -2.46% 265 5.65%
FY 2016-17 183 3.64% 276 4.12%
FY 2017-18 189 2.92% 284 3.08%
Average from FY 2013-
14 to FY 2017-18 2.41% 5.76%
Weight 30% 70%
Escalation Factor 4.76%
Efficiency Factor 1.00%
Escalation Factor Net
of Efficiency Factor 3.76%
Accordingly, the permissible normative O&M expenses has been computed, along with the
actual O&M Expenses for FY 2017-18 as shown in the Table below:
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Table 0-51: Permissible and Actual O&M Expenses for FY 2017-18 (Rs. Crore)
Particulars / (Rs. Crore)
Approved
O&M
Expense for
FY 2016-17
Inflation
Factor
(%)
Permissible
O&M
Expense for
FY 2017-18
Actual O&M
Expense in
FY 2017-18
Wires Business 771.78 3.76% 800.80 791.21
Supply Business 380.74 3.76% 395.06 383.55
Total 1152.52 3.76% 1195.85 1174.76
As the actual O&M Expenses in FY 2017-18 are lower than the permissible O&M Expenses
for FY 2017-18, AEML-D is eligible for efficiency gains on O&M Expenses.
FY 2018-19
Based on the workings, the inflation factor based on 30% of WPI inflation and 70% of CPI
inflation from FY 2014-15 to FY 2018-19, reduced by efficiency factor of 1%, works out
to 3.07%, as shown in the Table below:
Table 0-52: Inflation Factor for Truing-up of O&M Expenses for FY 2018-19
Year WPI WPI
Inflation CPI
CPI
Inflation
FY 2013-14 178 236
FY 2014-15 181 2.00% 251 6.29%
FY 2015-16 177 -2.46% 265 5.65%
FY 2016-17 183 3.64% 276 4.12%
FY 2017-18 189 2.92% 284 3.08%
FY 2018-19 197 4.33% 300 5.45%
Average from FY
2013-14 to FY 2018-
19
2.08% 4.92%
Weight 30% 70%
Escalation Factor 4.07%
Efficiency Factor 1.00%
Escalation Factor Net
of Efficiency Factor 3.07%
AEML-D submitted that the Efficiency Factor of 1% prescribed in the MYT Regulations,
2015 is for each year of the Control Period, due to which it aggregates and becomes 4% by
the end of the Control Period, which is a lot of reduction estimated on account of efficiency.
The efficiency measures are not unlimited and, after a point, further efficiency may not be
achievable as all measures for efficiency are deployed. Therefore, 1% efficiency factor each
year is un-realistic and should be reviewed. As a general rule, it can be said that higher
efficiency factor may be needed in high inflation scenarios to dampen the impact of high
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inflation on O&M expenses. However, when inflation in the economy is already at a
considerably low level, the same level of efficiency at 1% each year should not be expected.
AEML-D has hence, not considered the efficiency factor of 1% to arrive at normative O&M
expenses for FY 2018-19, as the escalation rate is too low, and requested the Commission
to waive the requirement of efficiency factor in the truing up for FY 2018-19. Accordingly,
the permissible normative O&M expenses has been computed, along with the actual O&M
Expenses for FY 2018-19 as shown in the Table below:
Table 0-53: Permissible and Actual O&M Expense for FY 2018-19 (Rs. Crore)
Particulars / (Rs. Crore)
Approved
O&M
Expense for
FY 2017-18
Inflation
Factor
(%)
Permissible
O&M
Expense for
FY 2018-19
Actual O&M
Expense in
FY 2018-19
Wires Business 810.80 4.07% 843.80 852.43
Supply Business 399.99 4.07% 416.27 419.03
Total 1,210.79 4.07% 1,260.07 1,271.46
As the actual O&M Expenses in FY 2018-19 are higher than the permissible O&M
Expenses for FY 2018-19, AEML-D is eligible for efficiency loss on O&M Expenses.
AEML-D submitted that for FY 2018-19, there has been an allocation of Corporate cost
from RInfra for the period from 01.04.2018 to 28.08.2018, which is included in the actual
O&M expenses for pre-AEML period. The Corporate expenses of RInfra represent the
expenses pertaining to common services of Central Procurement, Group Finance and HR,
Centralized IT services, Administration, Security and other common departments where the
resources and personnel available were rendering the services to the entire RInfra Corporate
and accordingly the expenses pertaining to these departments were allocated to all the
individual business segments within RInfra, such as the Mumbai energy vertical, EPC
business, Wind power plants, etc., on the basis of Turnover of these individual business
segments.
Further, subsequent to the transfer of business (i.e., from 29.08.2018), these services
continue to be required by AEML. However, as AEML is a separate Subsidiary Company
of Adani Transmission Limited, a common pool of corporate resources / expertise is no
longer available within AEML and these services are therefore required to be sourced by
AEML from within the expertise and resources available in the Adani Group as a whole.
The cost pertaining to common resources of Adani Group, pertaining to Adani Enterprises
Ltd. (AEL) which are utilized by all Adani Group companies, is required to be allocated on
all such Companies. Accordingly, an allocation of the same for the period 29.08.2018 to
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31.03.2019 has been made on AEML as well, to the extent of Rs. 65.93 Crore which, on
the advice of the Auditors, is booked in AEML books under “professional and consultancy
fee” sub-head of A&G expenses.
In addition to the above, specific services have been procured by AEML from Adani
Transmission Ltd. (ATL) and Adani Enterprises Ltd. (AEL) towards Master Data
Migration, Corporate Communication, HR, IT and Administration services, procurement
support and MIS, etc. AEML has made payment to ATL and AEL towards procurement of
such services of Rs. 5.90 Crore and Rs. 29.47 Crore respectively, against invoices raised,
which is also booked under A&G expenses under the same head of professional and
consultancy fee.
The total cost (corporate allocation plus cost of services procured) booked under AEML
books pertain to the G-T-D business as a whole and accordingly for allocating the cost to
AEML-D (or to generation or transmission business), ratio of revenue of business segment
to total regulated revenue of AEML has been used.
Further, the next wage revision of Unionized employees and contract labour is expected in
FY 2020-21, which would be effective from July 2018. Therefore, AEML-D has made
wage revision provision in its books of accounts (Rs 34 Crore towards Employee Expenses
and Rs. 16 Crore towards wage revision effect on contract labour cost booked in R&M
Expense). The same has not been included the actual expenses shown above, in line with
the philosophy adopted by the Commission in earlier Orders, wherein actual pay-outs due
to wage revisions were allowed in O&M expenses (in the year in which they are incurred)
and not the provisions.
Impact of GST: AEML-D submitted that from July 2017 onwards, Service Tax has been
replaced by Goods and Services Tax (GST), thus, increasing the tax burden from 15% to
18%. The base O&M Expense for calculating the permissible O&M expense for FY 2017-
18 is the approved O&M Expense for FY 2016-17, wherein the Service tax rate was 15%.
The increase in tax rate has increased the O&M Expense for FY 2017-18, which is a Change
in Law event and is uncontrollable as per MYT Regulations, 2015. The Commission in the
MTR Order had directed AEML-D to submit the uncontrollable element of O&M Expense
for FY 2017-18 at the time of truing up. Accordingly, the impact of GST due to increase of
tax rate from 15% to 18% in FY 2017-18 is Rs. 7.82 Crore. The impact of GST due to
increase of tax rate from 15% to 18% in FY 2018-19 is Rs. 10.18 Crore.
Further, vide letter dated 3 May 2018 (Ref. No. AEML-D/MERC/GST Circular/01),
AEML-D has informed the Commission that the Department of Revenue, Govt. of India
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has, vide its Circular No. 34/8/2018-GST, bearing Ref. No. F No. 354/17/2018-TRU, dated
1 March 2018, directed that allied services of transmission and distribution (non-energy
receipts from consumers) are chargeable to GST. AEML-D had further informed the
Commission that due to this, it has started charging GST on income from charges recovered
under the Schedule of Charges from consumers, from 1 April 2018 onwards and, since the
GST regime is effective from 1 July 2017, the GST on these charges from 1 July 2017 up
to 31 March 2018, shall be recovered from ARR, because it would be very difficult to
identify the beneficiaries. The GST paid to the Govt. for the period 1 July 2017 to 31 March
2018, pertaining to these activities of Rs. 0.86 Crore is added as expenditure in A&G
expenses. AEML-D has deducted these amounts from the actual O&M expenses to
determine the net O&M Expenses for FY 2017-18 and has then determined the net
entitlement for FY 17-18.
Access Charges: Mumbai Metropolitan Region Development Authority (MMRDA) has
demanded Access Charges of Rs. 0.91 Crore from AEML-D at the rate of Rs. 100 per
running meter for cables laid in MMRDA area for the period 10 September 2014 to 10
September 2017 for the entire length of all cables ever laid by AEML-D in MMRDA
jurisdiction. AEML-D had paid Rs. 0.10 Crore in FY 2017-18 to MMRDA only for the
cables additionally laid during the period 10 September 2014 to 10 September 2017 and
requested MMRDA not to levy access charges on cables laid prior to 10 September 2014,
as it has direct impact on consumer tariffs. MMRDA has rejected the request of AEML-D
and has claimed the balance amount vide its letter dated 25 April 2018. The balance amount
is hence, paid in FY 2018-19. AEML-D had appraised the Commission regarding the
Access Charges paid to MMRDA in the MTR Petition (Case No.200 of 2017). The
Commission had stated in the MTR Order dated 12 September 2018 that it will consider
the impact of Access Charges paid to MMRDA at the time of truing up of FY 2018-19.
AEML-D has therefore, claimed the Access Charges paid to MMRDA (Rs. 0.10 Crore)
separately in O&M expenses for FY 2017-18. The remaining cost of Rs. 0.81 Crore is
claimed in the O&M expenses for FY 2018-19.
Way Leave charges: Western Railway had claimed way leave charges of Rs. 22.60 Crore
from RInfra for old abandoned cables in its premises. RInfra had contested the matter in the
Hon’ble Bombay High Court, which is pending for decision. In FY 2018-19, permission
was required from Western Railways for laying of cables in its corridor. Western Railways
had communicated that the request for permission can be considered if AEML-D deposits
an amount of Rs. 2 Crore (Rs. 2.36 Crore with GST). Being an uncontrollable expense
never incurred earlier, this expense does not form part of the normative O&M allowance
for FY 18-19. Accordingly, AEML-D has also claimed this amount separately in the O&M
expenses for FY 2018-19.
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The O&M expenses claimed in truing up for FY 2017-18 and FY 2018-19 is shown in the
Tables below:
Table 0-54 : O&M Expenses claimed in Truing up of FY 2017-18 (Rs Crore)
Particulars / (Rs. Crore) Notation Wires Supply Total
Normative O&M Expense A 800.80 395.06 1195.85
Actual O&M Expense B 791.21 383.55 1174.76
Uncontrollable Expense - GST
Impact on taxes C 6.32 1.50 7.82
Uncontrollable Expense - GST
Impact on SoC for FY 18 D 0.56 0.30 0.86
Access charges paid to MMRDA
– Uncontrollable e 0.10 0 0.10
Net Actual O&M Expenses for
comparing with normative f = b-(c+d+e) 784.32 381.75 1166.07
Net Entitlement g = f+(a-f)/3 789.8 386.18 1176.00
O&M Expense claimed in this
Petition h = g+(c+d+e) 796.70 387.99 1184.78
Table 0-55 : O&M Expenses claimed in Truing up of FY 2018-19 (Rs Crore)
Particulars / (Rs. Crore) Notation Wires Supply Total
Normative O&M Expense A 843.80 416.27 1260.07
Actual O&M Expense B 852.43 419.03 1271.46
Uncontrollable Expense - GST
Impact on taxes C 8.04 2.10 10.14
Access charges paid to
MMRDA D 0.81 0 0.81
Way leave charges paid to
Western railways e 2.36 0 2.36
Net Actual O&M Expense for
comparing with normative f = b-(c+d+e) 841.22 416.93 1258.15
Net Entitlement g = f+(a-f)/3 842.08 416.49 1258.57
O&M Expense claimed in this
Petition h = g+(c+d+e) 853.29 418.59 1271.88
AEML-D apprised the Commission about the matters, which are at different stages of
litigation and may impact the O&M expenses of AEML-D in case the rulings are made
against AEML-D. It has not made any claim in the Petition with regard to the likely
expenses that might arise as a result of such rulings going against AEML-D, even though
provisions may have been made in accounts, in line with the Commission’s own approach
of considering such expenses only on actual payment basis. Accordingly, as and when any
actual payment is made, AEML-D shall suitably approach the Commission with its claim
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of recovery. The various issues that could have impact on the O&M expenses are listed
below:
▪ Access Charges
▪ Equal Wages for Equal work
▪ Permanency Claim
▪ Service Tax on Cable Laying charges
▪ Employee State Insurance Corporation (ESIC) Matters
Some of these issues, once settled, could have a recurring effect on O&M expenses.
Accordingly, as and when any payment is made by AEML-D, the nature of such expense
will decide whether it is to be claimed as a one-time expense or whether a revision in Base
O&M expenses for the Control Period is also necessary, in case the expense is of recurring
nature. Accordingly, AEML-D shall claim suitable relief in its future Petition(s).
Commission’s Analysis and Ruling
Regulation 72 and Regulation 81 of MERC MYT Regulations, 2015, as amended from time
to time, provides for determination of O&M expenses for Wire Business and Supply
Business respectively for each year of the Control Period. The relevant extracts for Wire
Business are as follows:
“72.2 The Operation and Maintenance expenses shall be derived on the basis of
the average of the Final Trued-up Operation and Maintenance expenses after
adding/deducting the sharing of efficiency gains/losses, for the three years ending
March 31, 2016, excluding abnormal expenses, if any, subject to prudence check by
the Commission, and shall be considered as the Base Year Operation and
Maintenance expenses.
72.3 The Operation and Maintenance expenses for each subsequent year shall be
determined by escalating these Base Year expenses for FY 2015-16 by an inflation
factor with 30% weightage to the average yearly inflation derived based on the
monthly Wholesale Price Index of the past five financial years as per the Office of
Economic Advisor of Government of India and 70% weightage to the average yearly
inflation derived based on the monthly Consumer Price Index for Industrial
Workers (all-India) of the past five financial years as per the Labour Bureau,
Government of India, as reduced by an efficiency factor of 1% or as may be
stipulated by the Commission from time to time, to arrive at the permissible
Operation and Maintenance expenses for each year of the Control Period:
Provided that, in the Truing-up of the Operation and Maintenance expenses for any
particular year of the Control Period, an inflation factor with 30% weightage to the
average yearly inflation derived based on the monthly Wholesale Price Index of the
past five financial years (including the year of Truing-up) and 70% weightage to
the average yearly inflation derived based on the monthly Consumer Price Index
for Industrial Workers (all-India) of the past five financial years (including the year
of Truing-up), as reduced by an efficiency factor of 1% or as may be stipulated by
the Commission from time to time, shall be applied to arrive at the permissible
Operation and Maintenance Expenses for that year
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The Commission has therefore, considered the O&M expenses approved in the Truing-up
for FY 2016-17 as base O&M expenses for arriving at normative O&M expenses for FY
2017-18 and correspondingly, for FY 2018-19. As specified in the above Regulations, the
Commission has computed the inflation factor considering 30% weightage of average
yearly inflation derived based on the monthly WPI of the past five years and 70% weightage
to the average yearly inflation derived based on the monthly Consumer Price Index (CPI)
for Industrial Workers of the past five financial years.
The Commission is of the view that since. the escalation factor originally considered in the
MYT Order was based on WPI of 2004-05 series, the escalation factor to be applied at the
time of truing up should also be based on WPI of 2004-05 series. However, from FY 2017-
18, WPI based on 2004-05 series is no longer published and they have been replaced by
WPI based on 2011-12 series. Hence, the Commission has modified the WPI based on
2011-12 series for FY 2017-18 and FY 2018-19 appropriately to reflect WPI based on 2004-
05 series so as to maintain consistency for comparison of approved numbers vis-à-vis truing
up.
As regards AEML-D’s request to not consider the Efficiency Factor of 1% while
considering the escalation factor to arrive at normative O&M expenses for FY 2018-19, the
Commission is of the view that Efficiency Factor has been specified in the MYT
Regulations, and was also considered for escalating the O&M expenses in the MYT and
MTR Orders. Further, applying the same rationale as adopted above, the Commission has
retained the approach adopted in the MYT and MTR Orders, and has reduced the escalation
factor for FY 2017-18 and FY 2018-19 by the Efficiency Factor of 1%. For the next MYT
Control Period, the Commission has specified certain qualifying criteria for non-
consideration of the Efficiency Factor, as elaborated in a subsequent Chapter of this Order.
The inflation factor worked out for FY 2017-18 and FY 2018-19 is stated in the Table
below:
Table 0-56: Inflation Factor approved for FY 2017-18
Year WPI WPI
Inflation CPI
CPI
Inflation
FY 2012-13 167.62 215.17
FY 2013-14 177.64 5.98% 236.00 9.68%
FY 2014-15 181.19 2.00% 250.83 6.29%
FY 2015-16 176.68 -2.49% 265.00 5.65%
FY 2016-17 183.20 3.69% 275.92 4.12%
FY 2017-18 188.55 2.92% 284.42 3.0%
Average from FY 2013-
14 to FY 2017-18 2.42% 5.76%
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Year WPI WPI
Inflation CPI
CPI
Inflation
Weight 30% 70%
Escalation Factor 4.76%
Efficiency Factor 1.00%
Escalation Factor Net
of Efficiency Factor 3.76%
Table 0-57: Inflation Factor approved for FY 2018-19
Year WPI WPI
Inflation CPI
CPI
Inflation
FY 2013-14 177.64 236.00
FY 2014-15 181.19 2.00% 250.83 6.29%
FY 2015-16 176.68 -2.49% 265.00 5.65%
FY 2016-17 183.20 3.69% 275.92 4.12%
FY 2017-18 188.55 2.92% 284.42 3.08%
FY 2018-19 196.62 4.28% 299.92 5.45%
Average from FY
2014-15 to FY 2018-19 2.08% 4.92%
Weight 30% 70%
Escalation Factor 4.07%
Efficiency Factor 1.00%
Escalation Factor Net
of Efficiency Factor 3.07%
The Commission has escalated the normative O&M expenses approved in the truing up for
FY 2016-17 with the escalation rate arrived in the above Table to compute normative O&M
expenses for FY 2017-18 and correspondingly for FY 2018-19.
As regards the other impacts considered by AEML-D as uncontrollable, the Commission is
of the view as under:
Impact of GST: The Commission is of the view that the change in Tax regime from Service
Tax to GST is merely change in name. The taxes levied under Service Tax are of same
nature of the taxes levied under GST and therefore, there is no New tax that is being levied
on account of GST. Further, O&M expenses have been linked to escalation index arrived
based on WPI and CPI published by the Govt. of India. Both WPI and CPI include the
impact of all taxes and duties applicable at that point of time. Therefore, as escalation factor
arrived as above already includes impact of all taxes, no separate impact on O&M expenses
on account of GST needs to be allowed. Therefore, the Commission does not consider the
contentions of AEML-D to separately allow impact of GST as an uncontrollable
expenditure under ‘Change in Law’.
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Access Charges: As submitted by AEML-D, MMRDA has levied Access Charges at the
rate of Rs. 100 per running meter for laying cables in MMRDA area. The Commission had
directed AEML-D to include the impact at the time of Truing-up. Accordingly, AEML-D
has submitted the actual amounts paid as Access Charges during FY 2017-18 and FY 2018-
19. The Commission is of the view that the Access Charges are uncontrollable in nature
and a new expense head that is not included in the base O&M expenses. The Commission
has therefore, considered the Access Charges actually paid by AEML-D during FY 2017-
18 and FY 2018-19 as uncontrollable expenses to be allowed separately in O&M expenses.
Way Leave Charges: The Commission has considered the actual Way Leave charges paid
by AEML-D to Western Railway during FY 2018-19 as uncontrollable expenses to be
allowed separately in O&M expenses
The Commission has verified the actual O&M expenses submitted by AEML-D for FY
2017-18 and FY 2018-19 in line with the audited accounts for the respective year and
reconciliation statement of regulated businesses submitted by AEML-D. The Commission
has undertaken prudence check of the actual O&M expenses claimed by AEML-D and
disallowed certain O&M expenses in the truing up for FY 2018-19, as discussed below:
The Commission observed that there was significant increase in some heads of actual O&M
expenses claimed by AEML-D in FY 2017-18 and FY 2018-19, as compared to actuals of
FY 2016-17. The Commission sought justification on the following heads of O&M
expenses, where significant increase was observed:
1. Other Allowances, which have increased from Rs. 92.00 Crore in FY 2016-17 to
Rs. 144.43 Crore in FY 2017-18;
2. Gratuity Payments in FY 2018-19;
3. Professional and Consultancy Fees in FY 2018-19.
AEML-D provided the following reasons for increase in the above expenses:
Other Allowances for FY 2017-18: AEML-D submitted the break-up of expenses but was
not able to justify its claim. The components under Other Allowances are LTA Payments,
Overtime Payments, PLI Payment, Retention allowance, Special Allowances, Shift
Allowances, part of Corporate Allocation, and reversal of old provisions. The Commission
again asked AEML-D for justification, to which AEML-D replied that it has approached
RInfra to seek reasons for the same however, RInfra has not responded till date. AEML-D
submitted that the Commission may take an appropriate call in this matter.
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The Commission is of the view that despite repeated queries, AEML-D has not been able
to justify the steep increase in Other Allowances for FY 2017-18. Therefore, the
Commission has allowed Other Allowances for FY 2017-18 after considering normative
escalation of 3.76%, as arrived in this Order, on actual expenses of FY 2016-17. The
following Table shows the Other allowances approved for FY 2017-18:
Table 0-58: Other Allowances approved for FY 2017-18
Particulars FY 2016-17 CAGR FY 2017-18
Other Allowances for Wires 59.07
3.76%
61.29
Other Allowances for Supply 32.93 34.17
Total Other Allowances 92.00 95.46
Gratuity Payments in FY 2018-19: Terminal Benefits have increased from Rs. 64.23
Crore in FY 2017-18 to Rs. 109.52 Crore in FY 2018-19. Similarly, Gratuity Payments
have increased from Rs. 13.37 Crore in FY 2017-18 to Rs. 59.61 Crore in FY 2018-19.
AEML-D submitted that Gratuity is considered based on inputs from the Registered
Actuarial Valuer at the end of the year for the employees who are on the payroll as on the
Balance Sheet date. The Commission has considered the submissions made by AEML-D
and accordingly approved Rs. 63.80 Crore for FY 2018-19.
Professional and Consultancy Fees in FY 2018-19: Professional and Consultancy Fees
have increased from Rs. 18.42 Crore in FY 2017-18 to Rs. 111.90 Crore in FY 2018-19. In
response to the Commission’s query, AEML-D submitted that the major component in
professional and consultancy fees has been the Corporate Allocation booked in FY 2018-
19 under this head as per the recommendation of its Auditor. On further scrutinizing the
submissions of AEML-D, it is observed that the Corporate Allocation expenses have
increased significantly in FY 2018-19 as compared to the expenses booked in FY 2017-18.
The following Table shows the amount of expenses incurred as Corporate Allocation
Expenses in FY 2017-18 and FY 2018-19, booked under various Business segments based
on the revenue earned from those segments:
Table 0-59: Corporate Expense Allocation for FY 2017-18 and FY 2018-19 of AEML
Particulars FY 2017-18
FY 2018-19 (Pre-AEML)
FY 2018-19 (Post
AEML)
FY 2018-19 (Other
Allocation)
FY 2018-19 (Total)
Generation Business 15.00 3.58 11.11 4.56 19.25
Transmission Business 2.98 0.73 2.26 0.93 3.92
Distribution Business 70.09 18.84 58.46 23.99 101.29
Total Corporate Expenses 88.07 23.15 71.83 29.47 124.46
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The expenses covered under ‘Other Allocation’ in above Table are Services availed from
ATL Master Data migration, corporate communication, HR, IT, and Administration
Services, procurement, support and MIS, etc., which are also Corporate Expenses only, and
have hence, been considered along with Corporate Allocation, for the purpose of analysis.
As seen from the above Table, total Corporate Expenses of AEML have increased from Rs.
88.07 Crore in FY 2017-18 to Rs. 124.46 Crore in FY 2018-19, i.e., an increase of 41.31%.
The Corporate Expenses that have been allotted to AEML-D have increased from 7% of
the total O&M expenses to 10% of the total O&M expenses in FY 2018-19.
The Distribution Business of RInfra was taken over by AEML in FY 2018-19. As seen from
the above Table, the Corporate Expense in Pre-AEML period (1st April 2018 to 28th August
2018) is not as high as the Corporate Expenses in Post-AEML period (29th August 2018 to
31st March 2019). AEML-D has provided auditor certificate for authentication of these
expenses in pre and post AEML-D period and also provided the expenses, which are coming
under the Corporate Allocation.
The Commission is of the view that Corporate expenses allowed to Regulated Entities
cannot be exorbitantly high even though the same is certified by the Statutory Auditor.
There needs to be a cap on the expenses which are allowed under Corporate Allocation.
The Commission is of the view that taking over of Business by AEML from RInfra should
not result in increase in Corporate Expenses and Corporate Allocation for the Regulated
entities. Moreover, RInfra and AEML, while seeking the Commission’s approval for the
transfer of assets and licence from RInfra to AEML in Case No. 139 of 2017, confirmed
that there would not be any tariff impact on the consumers on account of the Transaction.
The relevant extracts of the Commission’s Order in Case No. 139 of 2017 are as follows.
“78 RInfra and ATL have confirmed that the transaction shall not have any adverse
impact on tariff payable by the consumers, as the tariff shall continue to be
determined on the basis of regulated books of accounts.”
The Commission also confirmed that there would not be any adverse impact of the
Transaction on the consumers. The relevant extracts are as follows.
“79 The Commission confirms that the transaction shall not have any adverse
impact on tariff payable by the consumers, as the tariff shall continue to be
determined on the basis of regulated books of accounts.
…
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80 The Commission is of the view that the Petitioners’ proposals for assignment of
licence and transfer of assets can be approved only if it is ensured that the same
shall not have any adverse impact on the tariff payable by the consumers. Hence,
the Commission directs that REGSL/ATL shall not claim any amount from the
consumers on account of the proposed transaction, including inter-alia, any
interest/penalty payable by REGSL/ATL to RInfra as per the terms and conditions
of the Scheme of Arrangement and the SPA. The Commission further directs that
the approval to RInfra to assign the Transmission Licence to REGSL and transfer
transmission assets to REGSL, and sale of 100% shareholding in REGSL to ATL, is
conditional and subject to the above restriction….”(emphasis added)
However, as seen from the above submissions of AEML-D, the takeover of Distribution
Business from RInfra to AEML-D has increased the Corporate Allocation expenses in FY
2018-19 and thereby the cost proposed to be passed on to the consumers. Thus, the
Corporate expenses booked/claimed in FY 2018-19 is against the intent of the approval
given for the transaction in Case No. 139 of 2017.
The Commission has therefore, considered the Corporate Expenses of FY 2017-18 and
escalated the same by the inflation rate considered for escalation of normative O&M
expenses in FY 2018-19, i.e., 3.07% and approved Corporate expenses for FY 2018-19.
The Commission has considered the corporate expenses allocation for AEML-D in
proportion to the expenses submitted in the data gaps reply. The following Table shows the
Corporate Expenses allocation considered for AEML-D:
Table 0-60: Corporate Expense Allocation approved by the Commission for FY 2018-19
Particulars FY 2017-18 Escalation Rate FY 2018-19
Generation Business 15.00
3.07%
15.46
Transmission Business 2.98 3.07
Distribution Business 70.09 72.24
Total Corporate Expenses 88.07 90.77
Based on the above discussion, the following Table shows the amount of expenses that have
been disallowed in O&M expenses for FY 2017-18 and FY 2018-19:
Table 0-61: O&M expenses Disallowed in FY 2017-18 and FY 2018-19 for AEML-D (Rs.
Crore)
Particulars FY 2017-18 FY 2018-19
Other Allowances
Claimed 144.43 -
Approved 95.46 -
Corporate Allocation under Professional and Consultancy fees
Claimed - 101.29
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Particulars FY 2017-18 FY 2018-19
Approved - 72.24
Disallowed in O&M expenses 48.97 29.05
The Commission has disallowed the following amounts under O&M expenses for Wires
and Supply Business:
Table 0-62: O&M expenses Disallowed in FY 2017-18 and FY 2018-19 for Wires & Supply
(Rs. Crore)
Particulars Other Allowances in FY 2017-18 Corporate Allocation for FY
2018-19
Wires Supply Total Wires Supply Total
Claimed 92.68 51.75 144.43 62.29 39.00 101.29
Approved 61.29 34.17 95.46 44.43 27.81 72.24
Disallowance 31.39 17.58 48.97 17.86 11.19 29.05
As regards the other expenses mentioned by AEML-D in its Petition, which may arise if
rulings on pending litigations go against AEML-D, the Commission shall take a view at the
appropriate time.
The O&M Expenses approved by the Commission after true up for FY 2017-18 and FY
2018-19 are summarised in the Table below:
Table 0-63: O&M Expenses allowed by the Commission after truing up for FY 2017-
18 and FY 2018-19 for Wires Business (Rs. Crore)
Particulars
FY 2017-18 FY 2018-19
Submitted
by
AEML-D
Approved
after truing
up
Submitted
by
AEML-D
Approved
after
truing up
Approved O&M Expenses for
previous Year 771.78 771.78 810.80 800.80
Escalation Rate considered 3.76% 3.76% 4.07% 3.07%
Normative O&M Expenses 800.80 800.80 843.80 825.38
Uncontrollable Expense - GST
Impact on taxes 6.32 - 8.04 -
Uncontrollable Expense - GST
Impact on Schedule of Charges 0.56 0.56 0.81 0.81
Access charges paid to MMRDA 0.10 0.10 2.36 2.36
Total Allowable Normative O&M
Expenses 784.22 801.46 841.22 828.55
Actual O&M Expenses 791.21 791.21 852.43 852.43
Actual Expenses Disallowed 31.39 17.86
Actual Prudent O&M Expenses 759.82 834.57
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As the actual O&M Expenses are higher/lower than the allowable O&M expenses, and
since O&M expenses are controllable in nature, sharing of the Efficiency Losses/Gains has
been done in accordance with the MYT Regulations 2015, as elaborated subsequently.
Table 0-64: O&M Expenses allowed by the Commission after truing up for FY 2017-
18 and FY 2018-19 for Supply Business (Rs. Crore)
Particulars
FY 2017-18 FY 2018-19
Submitted
by
AEML-D
Approved
after truing
up
Submitted
by
AEML-D
Approved
after
truing up
Approved O&M Expenses for
previous Year 380.74 380.74 399.99 395.06
Escalation Rate considered 3.76% 3.76% 4.07% 3.07%
Normative O&M Expenses 395.06 395.06 416.27 407.18
Uncontrollable Expense - GST
Impact on taxes 1.50 - 2.10 -
Uncontrollable Expense - GST
Impact on Schedule of Charges 0.30 0.30 - -
Access charges paid to MMRDA - - - -
Total Allowable Normative O&M
Expenses 381.75 395.36 416.93 407.18
Actual O&M Expenses 383.55 383.55 419.03 419.03
Actual Expenses Disallowed 17.58 11.19
Actual Prudent O&M Expenses 365.97 407.84
As the actual O&M Expenses are lower/higher than the allowable O&M expenses, and
since O&M expenses are controllable in nature, sharing of the Efficiency Gains/Losses has
been done in accordance with the MYT Regulations 2015, as elaborated subsequently.
1.39 CAPITAL EXPENDITURE AND CAPITALISATION
AEML-D’s Submission
AEML-D stated it has carried out capital expenditure against the schemes that were
approved in-principle by the Commission, along with minor works for which DPR
submission is not required as per the Capital Expenditure Guidelines of the Commission.
The actual Capital Expenditure and Capitalisation for the Wires Business and Supply
Business as submitted by AEML-D for FY 2017-18 and FY 2018-19 is shown in the Table
below:
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Table 0-65: Capital Expenditure and Capitalisation for Wires Business and Supply
Business as submitted by AEML-D for FY 2017-18 (Rs. Crore)
Particulars MTR Order AEML-D Petition
Wires Supply Total Wires Supply Total
Capital
Expenditure
DPR
324.40 19.98 344.38
Non DPR 26.97 - 26.97
Total 351.37 19.98 371.35
Capitalisation DPR
319.45 19.98 339.43
Non DPR 19.09 - 19.09
Total 319.63 19.52 339.15 338.53 19.98 358.51
Table 0-66: Capital Expenditure and Capitalisation for Wires Business and Supply
Business as submitted by AEML-D for FY 2018-19 (Rs. Crore)
Particulars MTR Order AEML-D Petition
Wires Supply Total Wires Supply Total
Capital
Expenditure
DPR
364.58 22.68 387.26
Non DPR 38.36 0 38.26
Total 402.94 22.68 425.62
Capitalisation DPR
375.94 22.68 398.62
Non DPR 41.39 0 41.39
Total 255.46 38.63 294.09 417.33 22.68 440.01
AEML-D submitted that the above capitalisation includes Interest During Construction
(IDC), for which interest rates for FY 2017-18 and FY 2018-19, and for each intervening
year till FY 2017-18 and FY 2018-19 till the jobs remained in progress, have been
considered as approved by the Commission. The IDC has been calculated for assets
capitalized in Wires Business only and not in Supply Business. Further, IDC has not been
calculated on assets, which were started and completed in FY 2017-18 and FY 2018-19,
itself.
Brief description of Works carried out in FY 2017-18 and FY 2018-19
a. 33/11kV Receiving Station
b. 11kV Mains Network Strengthening
c. Low Tension Mains
d. Low Tension Services
e. Street Lights
f. Metering
g. Instruments (Non-DPR)
h. Information Technology (IT) Infrastructure (Non-DPR)
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i. Others (Non-DPR)
j. Civil (Non-DPR)
k. R&D, Safety and DSM (Non-DPR)
AEML-D submitted justification for the following works for which capitalization was
restricted by the Commission in MTR Order in Case No. 200 of 2017:
a. LT Mains Improvement DPR for FY 2016-17
b. Services New Supply DPR for FY 2016-17
c. Services Improvement DPR for FY 2016-17
d. Street Light New Supply DPR for FY 2016-17
e. Shifting of Airport Receiving station DPR for FY 2017-18
f. LT Mains New Supply DPR FY 2017-18
g. LT Mains Improvement DPR for FY 2017-18
h. Services Improvement DPR for FY 2017-18
i. Metering DPR FY 2018-19
AEML-D submitted justification for increase in capitalization of Services New Supply DPR
for FY 2016-17. The following were the reasons for escalation in capitalization as compared
to approved by the Commission:
a. Lower Quantity consideration in approved DPR
b. Increase in RI charges
c. Increase in Labour Charges
d. Quantity variation
e. Associated cost of extending services
AEML-D submitted justification for disallowance in capitalization of Services
Improvement DPR for FY 2016-17 and FY 2017-18. The following were the reasons for
escalation in capitalization as compared to approved by the Commission:
a. Lower Quantity consideration in approved DPR
b. Increase in RI charges and GST on RI charges
c. Reduction in unit rates of materials
d. Increase in Labour Charges
Commission’s Analysis and Ruling
The Commission has undertaken scheme-wise prudence check, and has accordingly
approved the capitalisation in the truing-up, based on the in-principle approval for the
schemes undertaken by AEML-D. It has approved capitalisation only for those schemes
that have been completed and put to use, based on the addition to GFA reported in the
Accounts, and the half-yearly Reports of progress and status of projects, and the Cost-
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Benefit-Analysis reports submitted by AEML-D. The Commission has primarily analysed
the Schemes, which have incurred cost overrun with respect to the approved DPR cost.
The Scheme-wise analysis undertaken by the Commission is as follows:
LT Mains Improvement DPR FY 2016-17:
The approved DPR cost is Rs. 27.35 Cr. AEML-D has claimed cumulative capitalization
up to FY 2018-19 of Rs. 30.63 Cr. The Commission in the MTR Order in Case No 200 of
2017 had approved capitalisation of Rs 23.27 Cr for FY 2016-17 and provisionally
approved capitalization of Rs. 4.08 Cr in FY 2017-18 as against the actual capitalization of
Rs. 6.44 Cr, thereby limiting the capitalisation to the approved Scheme Cost of Rs 27.35
Cr. The Commission in the Order has stated that final approval of the capitalisation may be
granted after third-party verification and directed AEML-D to inform the Commission after
completion of the scheme.
AEML-D in the present MYT Petition submitted that LT Mains (16-17) Improvement
scheme is completed and the same has been intimated to the Commission vide letter dated
27 August 2019. AEML-D stated that the Commission had allowed the entire capitalization
on this DPR scheme during truing up of FY 2016-17, pending third-party verification after
completion of the scheme. AEML-D requested to allow the entire capitalization of Rs. 6.44
Crore in FY 2017-18 during truing up of FY 2017-18. AEML-D further stated that increase
in the actual capital expenditure is due to the higher Road Reinstatement (RI) charges
actually paid to MCGM and increase in labour charges due to wage Revision. AEML-D
has submitted the bifurcation for the cost over run of the scheme component wise vis-a vis
to the estimated as follows:
LT Mains Improvement DPR for FY 16-17 (Closed)
Particulars Material RI Labour Expenses Total
DPR Estimates 12.15 8.24 11.12 7.15 38.66
31% 21% 29% 18% 100%
Actual Capital
Expenditure till 31st
Dec 19
9.52 9.44 7.89 3.84 30.69
31% 24% 20% 10% 79%
The Commission notes that while approving DPR, the Commission has not given separate
approval for each item such as RI, Labour, taxes etc but it has approved consolidated unit
rate. Therefore, the Commission has carried out the analysis of approved DPR amount
applying the percentile as per AEML-D vis-a vis actual capitalisation and tabularised as
follows:
LT Mains Improvement DPR for FY 16-17 (Closed)
Particulars Material RI Labour Expenses Total
Approved 8.595512 5.829384 7.866839 5.058264 27.35
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LT Mains Improvement DPR for FY 16-17 (Closed)
Particulars Material RI Labour Expenses Total
31% 21% 29% 18% 100%
Actual Capital
Expenditure till
31st Dec 19
9.52 9.44 7.89 3.84 30.69
31% 24% 20% 10% 79%
The Commission has also observed there is increase in expenses due to increase in material
as well as RI charges. The Commission also verified the RI charges paid by AEML-D.
The Commission notes that AEML-D had incurred capitalisation of Rs 23.27 Cr up to FY
2016-17, which was within the limit of the approved cost and therefore, the Commission
had approved capitalisation of Rs 23.27 Cr at the time of true up of FY 2016-17. During
provisional true up of FY 2017-18, the Commission in the MTR Order has specified that
approval to the excess capitalisation in the Scheme would be subject to the third-party
verification. As AEML-D has now intimated that the Scheme has been completed, the
Commission may carry out the third party verification of the Scheme.
In light of above, the Commission is approving the actual capitalisation claimed by AEML-
D in FY 2017-18 of Rs 6.44 Cr and Rs 0.91 Cr in FY 2018-19 due to higher expenditure
for RI charges subject to the third-party verification and final capitalization will be
approved based on the third-party verification.
FY 2017-18: - AEML-D claimed capitalization of Rs. 6.44 Cr. The Commission is allowing
the capitalization of Rs. 6.44 Cr. subject to third-party verification.
FY 2018-19: - AEML-D claimed capitalization of Rs. 0.91 Cr. The Commission is allowing
the capitalization of Rs. 0.91 Cr subject to third party verification.
Services New supply DPR FY 2016-17
The approved DPR cost is Rs. 45.13 Cr. AEML-D has claimed cumulative capitalization
up to FY 2019-20 of Rs. 71.98 Cr. The Commission in the MTR Order in Case No 200 of
2017 had approved capitalisation of Rs.41.93 Cr for FY 2016-17 and provisionally
approved capitalization of Rs. 3.20 Cr. in FY 2017-18 as against the actual capitalization
of Rs. 23.20 Cr., thereby limiting the capitalisation to the approved Scheme Cost of Rs
45.13 Cr.
AEML-D in its justification stated that increase in the actual capital expenditure is due to
the higher RI charges actually paid to MCGM and increase in labour charges due to wage
Revision.
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AEML-D has raised this issue in Appeal No 106 of 2019 filed before APTEL against the
Commission’s MTR Order in Case No 200 of 2017. As the matter is pending in APTEL,
the Commission will revisit the issue, if required, depending on the outcome of the Appeal.
FY 2017-18: - AEML-D claimed capitalization of Rs. 23.20 Cr. The Commission is
allowing the capitalization of Rs. 3.20 Cr. thereby limiting the capitalisation to the approved
Scheme Cost. The Commission has considered IDC of Rs 0.09 Cr in proportion to the
approved cost as against IDC of Rs 0.67 Cr. Claimed.
FY 2018-19: - AEML-D claimed capitalization of Rs. 4.52 Cr. and IDC of Rs 0.26 Cr. The
Commission disallows this capitalization along with IDC claimed, as the claimed cost is in
excess of DPR approved cost.
Services Improvement DPR for FY 2016-17
The approved DPR cost is Rs. 0.97 Cr. AEML-D has claimed cumulative capitalization of
Rs. 1.61 Cr. up to FY 2018-19. The Commission in the MTR Order in Case No 200 of 2017
had approved capitalisation of Rs.0.97 Cr for FY 16-17 and disapproved the provisional
capitalization of Rs. 0.28 Cr. for FY 17-18 and Rs. 0.45 Cr for FY 18-19, thereby limited
the capitalisation to the approved Scheme Cost of Rs 0.97 Cr.
AEML-D in its justification stated that increase in the actual capital expenditure is due to
the higher RI charges actually paid to MCGM and increase in labour charges due to wage
Revision.
AEML-D has raised this issue in Appeal No 106 of 2019 filed before APTEL against the
Commission’s MTR Order in Case No 200 of 2017. As the matter is pending in APTEL,
the capital expenditure over and above approved DPR amount can not be granted by the
Commission.
FY 2017-18: - AEML-D claimed capitalization of Rs. 0.28 Cr. and IDC of Rs 0.02 Cr. The
Commission disallows this capitalization along with IDC claimed.
FY 2018-19: - AEML-D claimed capitalization of Rs. 0.3 Cr. The Commission disallows
the capitalization claimed by AEML-D.
LT Mains New Supply DPR FY 2017-18
The approved DPR cost is Rs. 9.38 Cr. AEML-D has claimed cumulative capitalization of
Rs 10.42 Crore up to FY 2019-20. AEML-D, in its justification for cost overrun, has stated
that actual capex in LT Mains New Supply (2017-18) DPR till December 2019 has reached
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about Rs. 10.38 Cr as compared to 9.38 Cr in-principle approval. The approval for LT cable
is of 29 km but the actual cable utilised till December 2019 is about 36 km under the DPR.
Furthermore, the RI amount actually paid to various authorities till December, 2019 is about
Rs. 5.21 Cr against approved RI cost of about Rs. 1.70 Cr. The capex incurred in order to
release new supply is part of AEML-D’s obligation as a distribution licensee and the over
expenditure (compared to the in-principle approval) is primarily due to more cable laid to
release new supply applications and higher payment of RI to various authorities.
AEML-D has submitted the bifurcation for the cost over-run of the scheme component wise
vis-a vis to the estimated as follows:
LT Mains New Supply DPR for FY 17-18 (WIP)
Particulars Material RI Labour Expenses Total
DPR Estimates (As
submitted by AEML-D)
6.81 4.41 5.01 3.61 19.84
34% 22% 25% 18% 100%
Actual Capital Expenditure
till 31st Dec 19
2.85 5.21 1.42 0.90 10.38
27% 50% 14% 9% 100%
The Commission notes that while approving DPR, the Commission has not given separate
approval for each item such as RI, Labour, taxes etc but it has approved consolidated unit
rate. Therefore, the Commission has carried out the analysis of approved DPR amount
applying the percentile as per AEML-D vis-a vis actual capitalisation and tabulated as
follows:
LT Mains new Supply DPR for FY 17-18 (WIP)
Particulars Material RI Labour Expenses Total
Approved 3.1892 2.0636 2.345 1.6884 9.38
34% 22% 25% 18% 100%
Actual Capital
Expenditure till
31st Dec 19
2.85 5.21 1.42 0.90 10.38
27% 50% 14% 9% 100%
As seen from the table above, actual RI component has increased in comparison with the
estimated RI Component. The Commission also verified the RI charges paid by AEML-D
The Commission notes that while approving the subject DPR on for “LT mains network
Improvement Scheme and New Supply Scheme for FY 16-17 and FY 17-18” through its in
principal approval letter dated 6 March, 2018, the Commission has stated that it may
conduct independent third party asset verification before final approval of capitalization
and its recovery cost through ARR. AEML-D submitted that the scheme is closing in FY
19-20.
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In light of the above, the Commission is approving the actual capitalisation claimed by
AEML-D due to higher expenditure for RI charges subject to the third-party verification
and final capitalisation will be approved based on the third party verification. AEML-D is
directed to inform the Commission immediately after completion of the scheme.
Accordingly, the year wise approval of the scheme is as follows:
FY 2017-18: - AEML-D claimed capitalization of Rs. 6.76 Cr. with IDC of Rs 0.67 Cr. The
Commission is allowing the capitalization of Rs. 6.76 Cr along with IDC of Rs 0.67 Cr
subject to third party verification.
FY 2018-19: - AEML-D claimed capitalization of Rs. 3.20 Cr. and IDC of Rs 0.16 Cr.
The Commission is allowing the capitalization of Rs. 3.20 Cr. and IDC of Rs 0.16 Cr.
subject to third party verification.
LT Mains Improvement DPR FY 2017-18
The approved DPR cost is Rs. 13.94 Cr. AEML-D has claimed cumulative capitalization
of Rs. 15.92 Cr up to FY 2019-20. The Commission in the MTR Order in Case No 200 of
2017 had approved capitalisation of Rs 13.94 Cr against Rs 14.09 Cr for FY 2017-18 and
disapproved the claimed capitalization of Rs. 1.32 Crore in FY 2018-19 thereby limiting
the capitalisation to the approved Scheme Cost of Rs 13.94 Cr. The Commission in the
Order has stated that final approval of the capitalisation may be after third-party verification
and directed AEML-D to inform the Commission after completion of the scheme.
AEML-D, in its justification for cost overrun, has stated that actual capex in LT Mains
Improvement (2017-18) DPR till December 2019 has reached about Rs. 15.68 Cr as
compared to 13.94 Cr in-principle approved by the Commission. The approval included
about 98 km of LT cable but actual cable utilisation till December 2019 is about 99 km
under the DPR. Furthermore, the RI amount actually paid to various authorities till
December,2019 is about Rs. 2.99 Cr against approved RI cost of about Rs. 1.60 Cr. Also,
the increase in Labour charges post wage revision in September 2016 resulted in increased
overall labour service expenses under the DPR - about Rs. 4.92 Cr till Dec-19 against in-
principle approved Rs. 4.21 Cr.
The higher expenditure (compared to the in-principle approval) is primarily due to higher
payment of RI to various authorities and increased labour expenses under the DPR.
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AEML-D has submitted the bifurcation for the cost over-run of the scheme component
wise vis-a vis to the estimated as follows:
LT Mains Improvement DPR for FY 17-18
Particulars Material RI Labour Expenses Total
DPR Estimates 15.61 5.88 9.99 6.69 38.17
41% 15% 26% 18% 100%
Actual Capital
Expenditure till 31st
Dec 19
5.66 2.99 4.92 2.11 15.68
36% 19% 31% 13% 100%
The Commission notes that while approving DPR, the Commission has not given separate
approval for each item such as RI, Labour, taxes etc but it has approved consolidated unit
rate. Therefore, the Commission has carried out the analysis of approved DPR amount
applying the percentile as per AEML-D vis-a vis actual capitalisation and tabulated as
follows:
LT Mains Improvement DPR for FY 17-18 (WIP)
Particulars Material RI Labour Expenses Total
Approved 5.7154 2.091 3.6244 2.5092 13.94
41% 15% 26% 18% 100%
Actual Capital
Expenditure till 31st
Dec 19
5.66 2.99 4.92 2.11 15.68
36% 19% 31% 13% 100%
The Commission notes that during provisional true up of FY 17-18, the Commission in the
MTR Order has specified that approval for the excess capitalisation in the Scheme would
be subject to the third-party verification after closure of the scheme. AEML-D submitted
that the scheme is closing in FY 19-20.
In light of the above, the Commission is approving the actual capitalisation claimed by
AEML-D due to higher expenditure for RI and labour charges subject to the third-party
verification and final capitalisation will be approved based on the third party verification.
AEML-D is directed to inform the Commission immediately after completion of the
scheme.
FY 2017-18: - AEML-D claimed capitalization of Rs. 14.09 Cr. The Commission is
allowing the capitalization of Rs. 14.09 Cr. subject to third party verification.
FY 2018-19: - AEML-D claimed capitalization of Rs. 1.45 Cr. along with IDC of Rs 0.08
Cr. The Commission is allowing the capitalization subject to third party verification.
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Services New Supply DPR FY 2017-18
The approved DPR cost is. Rs. 42.70 Cr. AEML-D has claimed cumulative capitalization
up to FY 2019-20 of Rs. 62.09 Cr. The Commission in the MTR Order in Case No 200 of
2017 had approved capitalisation of Rs.31.22 Cr for FY 2017-18 and provisionally
approved capitalization of Rs. 11.48 Cr. for FY 2018-19 as against the actual capitalization
of Rs. 17.07 Cr., thereby limiting the capitalisation to the approved Scheme Cost of Rs
42.70 Cr.
AEML-D in its justification stated that increase in the actual capital expenditure is due to
the higher RI charges actually paid to MCGM and increase in labour charges due to wage
Revision.
AEML-D has raised this issue in Appeal No 106 of 2019 filed before APTEL against the
Commission’s MTR Order in Case No 200 of 2017. As the matter is pending in APTEL,
the Commission will revisit the issue, if required, depending on the outcome of the Appeal.
FY 2017-18: - AEML-D claimed capitalization of Rs. 31.22 Cr. The Commission considers
the capitalization of Rs. 31.22 Cr.
FY 2018-19: - AEML-D claimed capitalization of Rs. 25.51 Cr. and IDC of Rs 0.9 Cr. The
Commission considers capitalisation of Rs 11.48 Cr, thereby, limiting the capitalisation to
the approved Scheme Cost and disallowing IDC.
Services Improvement DPR FY 2017-18
The approved DPR cost is. Rs. 0.86 Cr. AEML-D has claimed cumulative capitalization of
Rs. 2.27 Cr up to FY 2018-19. The Commission in the MTR Order in Case No 200 of 2017
had approved provisional capitalization of Rs.0.86 Cr for FY 2017-18 against claim of Rs
1.49 Cr and disapproved capitalization of Rs. 0.86 Cr. for FY 2018-19, thereby limited the
capitalization to the approved Scheme Cost of Rs 0.86 Cr.
AEML-D in its justification stated that increase in the actual capital expenditure is due to
the higher RI charges actually paid to MCGM and increase in labour charges due to wage
Revision.
AEML-D has raised this issue in Appeal No 106 of 2019 filed before APTEL against the
Commission’s MTR Order in Case No 200 of 2017. As the matter is pending in APTEL,
the Commission will revisit the issue, if required, depending on the outcome of the Appeal.
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FY 2017-18: - AEML-D claimed capitalization of Rs. 1.49 Cr. The Commission considers
capitalisation of Rs 0.86 Cr, limiting the capitalisation to the approved Scheme Cost.
FY 2018-19: - AEML-D claimed capitalization of Rs. (0.32) Cr. and IDC of Rs 0.02 Cr
The Commission disallows this capitalization claimed along with IDC.
Street Light New Supply DPR FY 2016-17
The approved DPR cost is. Rs. 8.27 Cr. AEML-D has claimed cumulative capitalization of
Rs. 9.56 Cr up to FY 2019-20. The Commission in the MTR Order in Case No 200 of 2017
had approved additional capitalization of 1 Cr for FY 2018-19.
AEML-D submitted that the execution of streetlight schemes is an obligation on part of
AEML-D. The requirement for the same is received from MCGM, MBMC, and MMRDA
(State Government bodies). The requirement is thus “mandatory” in nature. AEML-D is
carrying out the work in order to avoid inconvenience to motorists and pedestrians. AEML-
D stated that as per the Work Orders issued by MCGM and MBMC, new streetlights are
commissioned. Conversion of HPMV lamps to HPSV lamps is also done. Difference in the
approved vis-à-vis actual quantity is as follows:
Sr. No. Description DPR Submission Actual
1. Installation of Street Light Poles 2190 2754 nos.
2. Installation of Luminaires 1830 1860 nos.
3. Laying of LT cables 58 77 km
The Commission considering the nature of obligation approves the actual cost incurred
against the Scheme as follows:
FY 2017-18: - AEML-D claimed capitalization of Rs. 4.41 Cr. The Commission considers
this capitalisation.
FY 2018-19: - AEML-D claimed capitalization of Rs. 0.47 Cr. The Commission approves
the capitalisation.
Shifting of Airport Sub-station
The approved DPR cost is. Rs. 18.44 Cr. AEML-D has claimed cumulative capitalization
of Rs. 22.48 Cr up to FY 2019-20 and submitted the scheme closure report. The
Commission in the MTR Order in Case No 200 of 2017 had approved additional
capitalization of 3.7 Cr. capitalization for FY 2018-19 due to variation in civil cost after
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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verification of the work orders. Therefore, the Commission allows the actual expenditure
as follows: -
FY 2017-18: - AEML-D claimed capitalization of Rs. 20.10 and IDC of Rs 0.01 Cr as per
the approved DPR. The Commission therefore, approves this capitalization.
FY 2018-19: - AEML-D claimed capitalization of Rs. 0.87 Cr. and IDC of Rs 1.39 as per
approved DPR. The Commission therefore, approves this capitalization.
For the few other schemes, there is no cost overrun. However, as stated by the Commission,
third party verification may be carried out after the scheme completion. The Schemes
covered under third party verification for the Control Period are LT mains scheme, New
supply and Improvement, Services New Supply and Improvement, 11 kV network
strengthening schemes and New Supply and improvement. Pending third-party verification,
the capitalization is being allowed as claimed (which is below DPR approved cost) on
provisional basis for each year and final capitalization shall be approved after third-party
verification.
The capitalisation approved after truing up for FY 2017-18 and FY 2018-19 is shown in the
Tables below:
Table 0-67: Capitalisation approved by the Commission after truing up for FY 2017-
18 (Rs. Crore)
Particulars
FY 2017-18
MTR Order AEML-D Petition Approved after truing up
Wires Supply Total Wires Supply Total Wires Supply Total
Capitalisa
tion
DPR 299.64 19.99 319.63 319.45 19.98 339.43 297.96 19.98 317.94
Non
DPR 19.52 - 19.52 19.09 - 19.09 19.09 - 19.09
Total 319.16 19.99 339.15 338.53 19.98 358.51 317.05 19.98 337.03
Table 0-68: Capitalisation approved by the Commission after truing up for FY 2018-
19 (Rs. Crore)
Particulars
FY 2018-19
MTR Order AEML-D Petition Approved after truing up
Wires Supply Total Wires Supply Total Wires Supply Total
Capitalisa
tion
DPR 375.94 22.68 398.62 356.24 22.68 378.92
Non
DPR 41.39 0 41.39 41.39 0 41.39
Total 255.46 38.63 294.09 417.33 22.68 440.01 397.63 22.68 420.31
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1.40 OPENING GROSS BLOCK FOR FY 2017-18
AEML-D’s Submission
AEML-D, in its MYT Petition, had submitted the depreciation for FY 2014-15, which was
calculated by the SAP system. During the MYT proceedings, the Commission observed an
error in the depreciation calculation and directed AEML-D, vide its letter dated 16 May
2016, to recalculate the depreciation from FY 2012-13 onwards and submit the same.
AEML-D vide its letter dated 28 June 2016, accepted the error in the calculation and
submitted the revised calculation from FY 2012-13 onwards.
During the process of correcting the mistake related to depreciation, it was found that there
were errors in retirement of assets as well. Correcting these errors led to re-determination
of depreciation, interest on loans and RoE from FY 2012-13 onwards. However, the
Commission held that the true-up of earlier years cannot be reopened and, therefore, while
the depreciation claim of FY 2014-15 was allowed, the incremental interest, return,
depreciation of previous years, etc., was not permitted. AEML-D has raised this issue in the
Appeal before ATE (Appeal No. 12 of 2017) against the MYT Order dated 21 October 2016
and it is pending for decision.
During the proceedings on MTR Petition in Case No. 200 of 2017, AEML-D submitted that
the changes in the previous years on account of asset retirement also lead to the opening
balance of GFA as on 1 April 2015 being different from that approved by the Commission
in the MYT Order. AEML-D submitted that while the issue of whether incremental claims
of already trued-up years can be permitted or not is a subject matter of Appeal No. 12 of
2017 in ATE, the opening balance of asset base as on 1 April, 2015 ought to be corrected
to reflect the figures as per regulatory books of AEML-D. The Commission, however, did
not consider the request of AEML-D and continued with the opening balances as considered
by it in earlier Tariff Orders, stating that the issue is already a subject matter in Appeal No.
12 of 2017. AEML-D has again raised this issue in its Appeal before ATE against the MTR
Order in Case No. 200 of 2017 dated 12 September 2018. Depending on the outcome of
these proceedings, if there is any change required in the opening balances and capitalisation,
the incremental impact of the same shall be presented in subsequent Petition(s).
For the purpose of this Petition, AEML-D has, without prejudice to its contentions,
considered the opening GFA for FY 2017-18 as considered by the Commission in the MTR
Order as shown in the Table below:
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Table 0-69 : Opening GFA for Wires and Supply Business for FY 2017-18 as
submitted by AEML-D (Rs Crore)
Particulars MTR Order True-up Petition
Wires Business 4,916.06 5,274.46
Supply Business 507.08 505.96
TOTAL 5,423.14 5,780.42
Commission’s Analysis and Ruling
The Commission has ruled in the previous MTR Order that it does not consider it advisable
to restate the GFA values when the matter is sub-judice. Therefore, the Commission has
considered the Opening Balance of GFA of AEML-D for FY 2017-18 equal to the Closing
Balance of GFA for FY 2016-17, as approved in the MTR Order at the time of Truing-up.
Table 0-70 : Opening GFA for Wires and Supply Business for FY 2017-18 as
approved by Commission (Rs Crore)
Particulars MTR Order True-up Petition Approved after
truing up Wire Business 4,916.06 5,274.46 4,916.06*
Supply Business 507.08 505.96 507.08
TOTAL 5,423.14 5,780.42 5,423.14
*Opening GFA considered after excluding Consumer Contribution as submitted by AEML-D
1.41 DEPRECIATION
AEML-D’s Submission
AEML-D submitted that it has calculated the Depreciation on assets for FY 2017-18 and
FY 2018-19 in accordance with the rates specified in the MYT Regulations, 2015, for
depreciating the assets till 70% of the asset value and by considering the depreciation rates
as submitted in its letter dated 28 June 2016 after the asset is depreciated till 70% of the
asset value. The depreciation rates used after accumulated depreciation of an asset reaches
70% is as under:
Table 0-71 : Depreciation Rates for calculating Depreciation submitted by AEML-D
Sr.
No. Type of Asset
Depreciation
Rate till
70%
Useful Life
Year
Lapsed
till
70%
Remaining
Life After
70%
Depreciation
After 70%
1 Lease Hold Land 3.34% 90 21 69 0.29%
2 Building 3.34% 60 21 29 0.51%
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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Sr.
No. Type of Asset
Depreciation
Rate till
70%
Useful Life
Year
Lapsed
till
70%
Remaining
Life After
70%
Depreciation
After 70%
3 Plant & Machinery 5.28% 25 14 11 1.46%
4 Distribution System 5.28% 35 14 21 0.77%
5 Vehicles 9.50% 10 8 2 7.00%
6 Furniture/Fixture 6.33% 14 12 2 7.02%
7 Office Equipment 6.33% 14 12 2 7.02%
8 Computer & Software 15.00% 6 5 1 15.00%
9 Elect. Fittings 6.33% 14 12 2 7.02%
10 Refrigerators &
Domestic Appliances 6.33% 14 12 2 7.02%
The effect of retirement of assets and withdrawal of corresponding accumulated
depreciation has been considered while computing depreciation in FY 2017-18 and FY
2018-19. The Depreciation calculation for Wires Business of AEML-D for FY 2017-18 and
FY 2018-19 is shown in the Tables below:
Table 0-72 : Depreciation for Wires Business for FY 2017-18 as submitted by
AEML-D (Rs. Crore)
Particulars MTR Order
True-up Petition
With
Consumer
Contribution
Consumer
Contribution
Without
Consumer
Contribution
Opening GFA 4,916.06 5,274.46 357.75 4,916.71
Addition 290.44 338.53 28.72 309.81
Retirement 21.00 21.44 1.48 19.96
Closing GFA 5,185.50 5,591.55 384.99 5,206.56
Depreciation 214.36 236.62 220.44
Depreciation (as %
average balance) 4.23% 4.36% 4.36%
Table 0-73 : Depreciation for Wires Business for FY 2018-19 as submitted by
AEML-D (Rs. Crore)
Particulars MTR Order
True-up Petition
With
Consumer
Contribution
Consumer
Contribution
Without
Consumer
Contribution
Opening GFA 5185.50 5,591.55 384.99 5,206.56
Addition 226.74 417.33 22.29 395.04
Retirement 13.52 0.92 12.60
Closing GFA 5,412.24 5,995.37 406.36 5,589.01
Depreciation 224.38 253.80 236.26
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Particulars MTR Order
True-up Petition
With
Consumer
Contribution
Consumer
Contribution
Without
Consumer
Contribution
Depreciation (as %
average balance) 4.23% 4.38% 4.38%
The Table below shows the depreciation for Supply Business of AEML-D for FY 2017-18
and FY 2018-19:
Table 0-74 : Depreciation for Supply Business for FY 2017-18 and FY 2018-19 as
submitted by AEML-D (Rs. Crore)
Particulars FY 2017-18 FY 2018-19
MTR
Order
True-up
Petition
MTR
Order
True-up
Petition
Opening GFA 507.08 505.96 512.87 507.14
Addition 19.99 19.98 38.63 22.68
Retirement 14.20 18.80 0.00 24.95
Closing GFA 512.87 507.14 551.50 504.87
Depreciation 21.20 23.40 22.12 25.59
Depreciation (as % average balance) 4.16% 4.62% 4.16% 5.06%
Commission’s Analysis and Ruling
For computation of Depreciation for FY 2017-18 and FY 2018-19, the Commission has
considered the opening balance of GFA for Wires Business and Supply Business as
approved in the final truing-up of FY 2016-17 in the MTR Order. The Commission has
considered asset addition for FY 2017-18 and FY 2018-19 in line with the approved
capitalisation. As regards asset retirement, it has accepted the submission of AEML-D.
The Commission has considered the weighted average depreciation rate of 4.36% for Wires
Business and 4.62% for Supply Business for FY 2017-18 based on the actual depreciation
and the average GFA as per audited accounts of FY 2017-18. Similarly, the Commission
has considered the weighted average depreciation rate of 4.38% for Wires Business and
5.06% for Supply Business for FY 2018-19 based on the actual depreciation and the average
GFA as per audited accounts of FY 2018-19. Based on the average depreciation rate, the
Commission has worked out Depreciation for Wires Business and Supply Business for FY
2017-18 and FY 2018-19. The Commission has approved depreciation for Wires Business
and Supply Business of AEML-D after final truing up for FY 2017-18 and FY 2018-19, as
shown in the Tables below:
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Table 0-75: Depreciation for Wires Business for FY 2017-18 as approved by the
Commission (Rs. Crore)
Particulars MTR Order True-up Petition Approved after
truing up
Opening GFA 4,916.06 4,916.71 4,916.06
Addition 290.44 309.81 288.33*
Retirement 21.00 19.96 19.96
Closing GFA 5,185.50 5,206.56 5,184.43
Depreciation 214.36 220.44 219.95
Depreciation (as % of GFA) 4.23% 4.36% 4.36%
*After deducting Consumer Contribution during the year
Table 0-76: Depreciation for Supply Business for FY 2017-18 as approved by the
Commission (Rs. Crore)
Particulars MTR Order True-up Petition Approved after
truing up
Opening GFA 507.08 505.96 507.08
Addition 19.99 19.98 19.98
Retirement 14.20 18.80 18.80
Closing GFA 512.87 507.14 508.26
Depreciation 21.20 23.40 23.12
Depreciation (as % of
GFA) 4.16% 4.62% 4.62%
Table 0-77: Depreciation for Wires Business for FY 2018-19 as approved by the
Commission (Rs. Crore)
Particulars MTR Order True-up Petition Approved after
truing up
Opening GFA 5185.50 5,206.56 5,184.43
Addition 226.74 395.04 375.34*
Retirement 12.60 12.60
Closing GFA 5,412.24 5,589.01 5,547.17
Depreciation 224.38 236.26 235.07
Depreciation (as % of GFA) 4.23% 4.38% 4.38%
*After deducting Consumer Contribution during the year
Table 0-78: Depreciation for Supply Business for FY 2018-19 as approved by the
Commission (Rs. Crore)
Particulars MTR Order True-up Petition Approved after
truing up
Opening GFA 512.87 507.14 508.26
Addition 38.63 22.68 22.68
Retirement 0 24.95 24.95
Closing GFA 551.50 504.87 505.99
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Particulars MTR Order True-up Petition Approved after
truing up
Depreciation 22.12 25.59 25.65
Depreciation (as % of GFA) 4.16% 5.06% 5.06%
1.42 FINANCING PLAN AND INTEREST EXPENSES
AEML-D’s Submission
FY 2017-18
AEML-D submitted that, till FY 2017-18, the ownership of Mumbai Distribution business
was with RInfra. No new borrowings were made for capital expenditure in the distribution
division of RInfra in FY 2017-18 and all capital expenditure was funded through internal
accruals. Therefore, AEML-D has considered 70% of capitalization (net of Consumer
Contribution during FY 2017-18) as normative debt for calculation of interest expenses.
The weighted average interest rate for FY 2017-18 based on the actual interest paid on the
term loan and NCDs of erstwhile RInfra-D was 10.51%, as shown in the Table below:
Table 0-79: Interest on Loans for FY 2017-18 as submitted by AEML-D (Rs. Crore)
Particulars / (Rs. Crore) Opening
FY 17-18
Closing
FY 17-18
Interest
Paid
Interest
Rate (%)
Term Loan - Central Bank of India 224.00 0.00 22.71 10.94%
NCDs:
1000 Cr (LIC, NACIL, Yes Bank)
Series 5 585.00 585.00 61.43 10.50%
Series 6 16.67 0.00 1.71 10.26%
Series 8,9 & 10 124.00 0.00 13.83 11.15%
500 Cr (IDBI)
Series 11A, 11C, 12A, 12D, 13B &
14 318.70 318.70 31.87 10.00%
Series 11B, 11D, 12B, 12C, & 13A 131.30 131.30 12.87 9.80%
Series 16 25.00 25.00 2.55 10.20%
Series 17 25.00 25.00 2.55 10.20%
250 Cr (Axis)
Series 18 200.00 200.00 23.00 11.50%
Series 19 50.00 50.00 5.12 10.24%
Total 1,699.67 1,335.00 177.64 10.51%
Accordingly, AEML-D has submitted the computation of interest expenses for FY 2017-
18 for Wires Business and Retail Supply Business as shown in the Table below:
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Table 0-80: Interest on Loans for FY 2017-18 as submitted by AEML-D (Rs. Crore)
Particulars MTR Order True-up Petition
Wires Business
Opening Balance 1,517.85 1,517.85
Addition of new loans 203.31 216.87
Repayment 213.87 220.44
Reduction in loans due to retirement in loans - 3.78
Closing Balance 1,507.29 1,510.50
Interest Rate (%) 10.53% 10.51%
Interest on Loans 159.27 159.14
Supply Business
Opening Balance 93.54 93.54
Addition of new loans 13.62 13.62 Repayment 21.20 21.20
Reduction in loans due to retirement in loans - 0.53
Closing Balance 85.96 83.59
Interest Rate (%) 10.53% 10.51%
Interest on Loans 9.45 9.31
AEML-D submitted that some of the assets that were retired in FY 2017-18 were already
depreciated for more than 70% of their historical cost and therefore the corresponding debt
is considered as already repaid. However, there were some assets which were not
depreciated till 70% of their historical cost and therefore, the outstanding debt (70% of
historical cost less accumulated depreciation till retirement) has been reduced from the
outstanding debt for FY 2017-18.
FY 2018-19
In FY 2018-19, AEML took over Mumbai Generation, Transmission and Distribution
business of RInfra and, in the process, took over the liabilities pertaining to regulated
business as well, albeit, by replacing the existing loans with lower cost loans. Loans worth
Rs. 8500 Crore were drawn, in the process replacing the existing regulatory loans as well
as 70% of the opening CWIP (normative debt equivalent) as on 29 August, 2018.
For capital expenditure during the period from 01.04.2018 up to 28.08.2018, no actual
borrowings were made / allocated to distribution business and hence, the funding of such
capital expenditure was from internal accruals. Subsequent to acquisition of RInfra’s
business, i.e., from 29 August, 2018, AEML-D has actually borrowed capital from lending
institutions [State Bank of India (SBI) and Yes Bank] towards funding of capital
expenditure. A total of Rs. 79.79 Crore was borrowed by AEML towards capital
expenditure, out of which Rs. 56.51 Crore was borrowed specifically for distribution
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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business. This amount has been utilized for funding a part of capital expenditure and
capitalization in post-AEML period. In addition, other loans from SBI, Yes Bank and
funding available from Inter-Corporate Deposits have also been utilised for partly funding
capital expenditure during FY 2018-19.
Considering the total funding available, i.e., the loans allocated towards opening CWIP of
FY 2018-19 and fresh borrowings during the year, the actual debt-equity ratio for FY 2018-
19 works out to 67%:33%. Hence AEML-D has considered the debt:equity ratio of
70%:30% for working out interest expenses and return on equity, in accordance with the
MYT Regulations, 2015.
Refinancing of Debt: As stated above, subsequent to acquisition of RInfra’s business, the
total outstanding debt of Rs. 8500 Crore allocated to REGSL was refinanced by borrowing
new debt from various Financial Institutions. The interest on loan capital is being claimed
considering the weighted average rate of interest pertaining to the original loans for the
period 01.04.2018 to 28.08.2018 and thereafter, based on the interest rate of the new loans.
Interest on Loan Capital for FY 2018-19: As per first proviso of Regulation 29.5 of the
MYT Regulations, 2015, at the time of Truing-Up, the weighted average rate of interest
based on actual loan portfolio during the concerned year needs to be considered as the rate
of interest. The weighted average rate of interest of Pre-AEML period, based on the actual
portfolio of loans of RInfra-D for that period, was 10.43%. Further, post 29.08.2018, actual
loan has been drawn for funding the capex and hence actual interest rate has been
considered. Hence, for the entire FY 2018-19, weighted average interest rate has been
considered, which works out to 9.31%. by considering weighted average loans and interest
rate applicable for both periods.
The interest expenses for Wires Business and Supply Business for FY 2018-19 is shown in
the Table below:
Table 0-81: Interest on Loans for FY 2018-19 as submitted by AEML-D (Rs. Crore) Particulars MTR Order True-up Petition
Wires Business
Opening Balance 1,507.29 1,510.50
Addition of new loans 0 0.53
Repayment 158.72 276.53
Reduction in loans due to retirement in loans
224.38 236.26
Closing Balance 1,441.64 1,550.24
Interest Rate (%) 10.44% 9.31%
Interest on Loans 153.93 142.49
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Particulars MTR Order True-up Petition
Supply Business
Opening Balance 85.96 83.59
Addition of new loans 0 3.38
Repayment 27.04 15.88
Reduction in loans due to
retirement in loans 22.12 25.59
Closing Balance 90.87 70.50
Interest Rate (%) 10.44% 9.31%
Interest on Loans 9.23 7.67
Finance Charges
Other Finance Charges mainly comprise Service Charges and other bank charges such as
bank remittance charges, bank commission, stamp duty towards working capital limit
enhancement, consultancy charges for arranging loans, LC opening charges, BG
commission, etc. Accordingly, an amount of Rs. 9.64 Crore has been claimed towards
Finance Charges for Distribution Business. Further, there are finance charges incurred
specifically for AEML-D and the same is considered only for the said business.
Refinancing Cost and Savings in Interest Expenses
AEML has refinanced the outstanding loans by lower cost loans from a consortium of
banks. The Commission, in the Order dated 2 January, 2019 in Case No. 341 of 2018 (Case
of AEML seeking approval of the assignment of its Distribution Licence in favour of
Security Trustee i.e. SBICAP Trustee Company Limited), had observed that the interest
rates of AEML loans are lower than the interest rates approved in the MTR Orders. Thus,
such financing shall reduce the burden of interest cost on the consumers in tariff and
therefore, the same is in the interest of the consumers. The Commission had directed AEML
to submit the actual benefit that may accrue to the consumers on account of proposed
financing in the MYT Petition. The relevant section of the Order is reproduced below:
“AEML is directed to submit the actual benefit that may accrue to the consumers on
account of proposed financing, while submitting its next Tariff Petition.”
Regulation 29.10 of the MERC (MYT) Regulations, 2015 provides the mechanism for
computation of gains associated with savings in interest cost in case of refinancing of loans
and further sharing of the same with the beneficiaries. The relevant extract of the
Regulations is quoted as follows:
"29.10 The Generating Company or the Licensee or MSLDC, as the case may be,
shall make every effort to re-finance the loan as long as it results in net savings on
interest and in that event, the costs associated with such Re-financing shall be borne
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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by the Beneficiaries and the net savings shall be shared between the Beneficiaries
and them in the ratio of 2:1, subject to prudence check by the Commission:
Provided that the Generating Company or the Licensee or the MSLDC, as the case
may be, shall submit documentary evidence of the costs associated with such re-
financing:
Provided further that the net savings in interest shall be calculated as an annuity
for the term of the loan, and the annual net savings shall be shared between the
entity and Beneficiaries in the specified ratio."
Table 0-82: Total outstanding debt of AEML raised by AEML post transaction
Sr No Purpose Lender Loan Amount
(Rs. Cr.)
Tenure / Repayment
Period
Interest
Rate *
1
Term
loan
State Bank of
India 3,000
61 quarterly
instalments 9.05%
2 Yes Bank
Limited 2,550
61 quarterly
instalments 9.05%
3 Bank of India 2,000
61 quarterly
instalments 9.05%
4 ICICI Bank
Limited 750
61 quarterly
instalments 9.05%
5 HDFC Bank
Limited 200
61 quarterly
instalments 9.05%
* Interest rate will change as per Marginal Cost of Funds based Lending rate (MCLR)
For the refinancing of loan, AEML has incurred total expenditure of Rs. 157.18 Crore as
refinancing charges. The said expenditure is apportioned among the G, T & D businesses
considering the regulated outstanding debt as on August 29, 2018. The break-up of
refinancing charges is provided below:
Table 0-83: Segregation of Refinancing Charges among ADTPS, AEML-T and
AEML-D
Particulars/ (Rs. Crore) ADTPS AEML-
T
AEML-D
(W)
AEML-D
(S) Total
Upfront Fee 9.87 26.75 87.65 3.99 128.26
Loan underwriting Fee 0.48 1.30 4.25 0.19 6.22
Stamp duty 0.02 0.04 0.14 0.01 0.20
Consultancy charges for
arranging loans 1.73 4.69 15.38 0.70 22.50
Total 12.10 32.78 107.41 4.89 157.18
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In accordance with the Regulations, AEML has determined the net saving in interest cost
for each year over the remaining duration term of the loans and determined the Present
Value of the savings. In order to compute the Present Value (PV) of net savings, AEML
has used discount rate that is equal to the post tax cost of debt for AEML, which is 5.89%.
The net savings in interest cost are then worked out by subtracting the refinancing cost from
the present value of interest savings. The summary of net savings due to refinancing is
shown in the following Table:
Table 0-84: PV of Interest cost saving in FY 2018-19
Particulars / (Rs. Crore) ADTPS AEML-T AEML-D
(W)
AEML-D
(S) Total
Total Interest cost saving 21.99 61.97 174.61 9.45 268.02
Total Interest cost saving (NPV) 16.60 46.78 131.81 7.14 202.31
Refinancing Charges 12.10 32.78 107.41 4.89 157.18
Net Saving 4.50 14.00 24.39 2.25 45.13
Share of consumers 3.00 9.33 16.26 1.50 30.09
Share of Utility 1.50 4.67 8.13 0.75 15.04
AEML-D submits that there has been net savings of Rs. 24.39 Crore for Wires Business
and Rs. 2.25 Crore for Supply Business on account of refinancing and, therefore, AEML-
D proposed to share the net savings on interest in ratio of 2:1 with consumers.
Commission’s Analysis and Ruling
The Commission asked AEML-D to submit the documentary evidence for the opening
balance of loans and the actual interest rates for all outstanding loans on 1 April 2017 and
1 April 2018. AEML-D submitted bank certificate of Term Loan of Central Bank of India
(CBI) and certificate of the outstanding balance of NCDs as on 1 April 2017 and 1 April
2018.
For FY 2018-19, the details were sought in two parts, viz.,
(i) Loan and corresponding Interest outstanding from 1 April 2018 to 28 August
2018
(ii) Loan and corresponding Interest outstanding from 29 August 2018 to 31 March
2019
Accordingly, the Commission has considered the rate of interest on long-term loans for FY
2017-18 as 10.36% and for FY 2018-19 as 9.24% (Weighted average of 10.47% and
9.05%). AEML-D has allocated these loans to the Wires Business and the Supply Business.
The Commission has considered the same rate of interest for long-term loan for both Wires
Business and Supply Business.
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The Commission has considered the Closing Balance of Normative Loan for FY 2016-17
as approved in the MTR Order as the Opening Balance of Normative Loan for FY 2017-
18. For the assets capitalised in FY 2017-18, the Commission has considered 70% of the
additional asset value less Consumer Contribution as normative debt, in accordance with
the MYT Regulations, 2015. The repayment of the loan has been considered equal to the
Depreciation approved for the year. Accordingly, the Commission has approved the interest
on Loan for FY 2017-18, as shown in the Table below:
Table 0-85: Interest Expenses for FY 2017-18 as approved by Commission (Rs.
crore)
Particulars MTR
Order
True-up
Petition Approved after truing up
Wires Business
Opening Balance 1,517.85 1,517.85 1,517.85
Less: Reduction of normative loan due
to retirement of assets 0 3.78 3.78
Addition of new loans 203.31 216.87 201.83
Repayment 213.87 220.44 219.95
Closing Balance 1,507.29 1,510.50 1,495.96
Interest 159.27 159.14 156.14
Supply Business
Opening Balance 93.54 93.54 93.54
Less: Reduction of normative loan due
to retirement of assets 0 0.53 0.53
Addition of new loans 13.62 13.98 13.99
Repayment 21.20 23.40 23.12
Closing Balance 85.96 83.59 83.87
Interest 9.45 9.31 9.19
Similarly, the Commission has considered the Opening Balance of the Normative Loan for
FY 2018-19 as equal to the revised Closing Balance of Normative Loan for FY 2017-18,
as approved in this Order. For the assets capitalised in FY 2018-19, the Commission has
considered 70% of the additional asset value less Consumer Contribution as normative debt,
in accordance with the MYT Regulations, 2015. The repayment of the loan has been
considered equal to the Depreciation approved for the year.
Accordingly, the Commission has approved the interest on Loan for FY 2018-19, as shown
in the Table below:
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Table 0-86: Interest Expenses for FY 2018-19 as approved by Commission (Rs.
crore)
Particulars MTR
Order
True-up
Petition
Approved in
this Order
Wires Business
Opening Balance 1,507.29 1,510.50 1,495.96
Less: Reduction of normative loan due to
retirement of assets 0 0.53 0.53
Addition of new loans 158.72 276.53 262.74
Repayment 224.38 236.26 235.07
Closing Balance 1,441.64 1,550.24 1,523.10
Interest 153.93 142.49 139.45
Finance Charges 9.14 9.14
Interest & Finance Charges 153.93 151.63 148.59
Supply Business
Opening Balance 85.96 83.59 83.87
Less: Reduction of normative loan due to
retirement of assets 0
3.38 3.38
Addition of new loans 27.04 15.88 15.88
Repayment 22.12 25.59 25.65
Closing Balance 90.87 70.50 70.71
Interest 9.23 7.17 7.14
Finance Charges 0.49 0.49
Interest & Finance Charges 9.23 7.67 7.64
Refinancing Cost and Savings in Interest Expenses
AEML has refinanced the total loan portfolio of Rs 8500 Crore and has considered the
refinance cost of Rs 157.18 crore.
The Commission has analysed the refinance agreement and other supporting documents of
AEML with consortium of Banks provided as an Exhibit-L and Exhibit-S of the Petition.
As per Credit Facility letter dated 29 March, 2018 along with its amendment which is also
dated 29 March, 2018 provided by Yes Bank, loan facility of Rs. 5,500 Crore was
sanctioned and Rs. 97.35 Crore (inclusive of taxes) was paid as an upfront fees. The relevant
Tax Invoice has been provided as Annexure 1 as part of Exhibit-L along with the Petition
in support of the claim. As per the Credit Facility letter, the loan facility of Yes Bank was
to be utilized by the AEML towards the following purposes:
▪ Meeting the Purchase Consideration, other than equity as agreed between Promoter and
Reliance Infrastructure Limited (RINFRA) for Generation, Transmission and
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Distribution (GTD) business acquisition including repayment of/ prepayment of any
funding availed by the Borrower (other than YBL facility)
▪ Meeting the transaction cost (other than equity)/ financing expenses & other costs
including cost of refinancing/ prepayment, if any;
▪ Meeting of any statutory dues and other duties;
▪ Payments of creditors/ loans of REGSL availed from RINFRA towards acquisition of
GTD business;
Further, as per the Sanction Letter of State Bank of India dated 26 June, 2018, loan facility
of Rs. 3,000 Crore was sanctioned and Rs. 19.67 Crore (inclusive of taxes) was paid as
upfront fees. The relevant Tax Invoice has been provided as Annexure 2 as part of Exhibit-
L along with the Petition. As per the terms of the Sanction Letter, the loan facility of State
Bank of India was to be utilized by AEML towards the following purposes:
▪ Repayment/ prepayment/ refinancing of the existing debt/ NCD of the Borrower;
▪ Repayment/ prepayment of Loan/ NCD from Reliance Infrastructure Limited for
repayment of its identified borrowings;
▪ Meeting the transaction cost/ financing expenses & other costs including cost of
refinancing/ prepayment, if any;
▪ Meeting of any statutory dues and other duties.
It is evident from the above submissions that the higher amount of loan refinanced by
AEML was mainly for the purpose of financing the transaction costs towards acquisition of
the business of RInfra by REGSL.
Subsequent to the above, Yes Bank has undertaken down-selling of its portfolio to other
banks like Bank of India, ICICI Bank and HDFC Bank. Yes Bank has reduced its exposure
from Rs. 5,500 Crore to Rs. 2,550 Crore. As a part of the down-selling process, Bank of
India has approved loan amount of Rs. 2,000 Crore, ICICI has approved loan amount of Rs.
750 Crore and HDFC Bank has approved loan amount of Rs. 200 Crore. To avail the
facility, AEML paid Rs. 8.26 Crore to Bank of India, Rs. 2.21 Crore to ICICI Bank, and
Rs. 0.77 Crore to HDFC Bank as upfront fees. Relevant invoices have been provided by
AEML-D as Annexure 3, Annexure 4 and Annexure 5 to the Petition for Bank of India,
ICICI Bank and HDFC Bank, respectively. Further, Yes Bank has charged underwriting
fees of Rs. 6.22 Crore for the entire loan of Rs. 5,500 Crore and Tax Invoice for the same
has been provided as an Annexure 6 as part of Exhibit-L along with the Petition. AEML
has also incurred stamp duty fees of Rs. 0.2 Crore for the entire transaction.
AEML has refinanced the loan to the tune of Rs. 8,500 Crore and Yes Bank has further
down sold its loan exposure to other banks as per the terms of the Credit Facility Letter
issued to AEML by Yes Bank and agreed by both the parties. As discussed in the earlier
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paragraph, for undertaking the above transaction, AEML has incurred Rs. 134.68 Crore as
refinancing cost, which is claimed for recovery through the ARR subject to the relevant
provisions of the MYT Regulations, 2015.
Further, AEML has also availed services of SBI Capital Markets Limited for providing
M&A Advisory and syndication services for which Agreement was signed on 18 January,
2018. As per Agreement, services to be provided by SBI Capital Markets Limited were as
under:
• M&A Services:
o Assistance in preparation of a detailed financial model for the project, to represent the
base case and financial and operative sensitives to various parameters
o Assisting the management of the Client in negotiation and discussions with the Seller
and finalization of the definitive term sheet for the transaction
o Assisting the Client in finalization of capital structure and structuring of the term loan
for optimizing the valuation.
o Advising the Client on certain measures which may improve the valuation of the
Project post acquisition including refinancing term loan
• Syndication Services:
o The Advisor would provide syndication services mainly by assisting the Company in
arranging the proposed funding for refinancing of the existing debt and additional debt
for capital expenditure requirement for the project. The Advisor would also assist the
Company in arranging the proposed Working capital facilities determined in the course
of financial analysis/ advisory for the Project. The Working Capital Facilities would
comprise of Working Capital Fund based Facilities (FB), Bank Guarantee (BG),
Derivative Limit and other Working Capital Non-Fund based Facilities (NFB).
As can be seen from the above, the scope of services provided by SBI Capital Markets
Limited included activities, which did not pertain to the refinancing of term loans
undertaken by AEML and against which AEML is seeking the refinancing cost incurred as
a pass through in the tariff under the relevant provisions of the MYT Regulations, 2015.
Further, AEML has submitted details of various payments made to SBI Capital Markets
Limited amounting to Rs. 14.24 Crore through five invoices and supporting documents are
provided as Annexure in Exhibit-L of the Petition. The details of the payment and services
provided are as under:
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Table 0-87: Payment to SBI Capital Markets Limited by AEML
Sr.
No.
Services provided by SBI
Capital
Invoice No. Invoice
Date
Amount
(Rs.
Crore)
Supporting
Document –
Exhibit L of
the Petition
1 M&A Buy Side Advisory 18182710137 9/28/2018 5.90 Annexure 7
2 Working Capital 18192710138 9/28/2018 0.32 Annexure 8
3 Term Loan 18192710139 9/28/2018 1.50 Annexure 9
4 Working Capital II 18192710149 10/11/2018 0.35 Annexure 10
5 Term Loan II 18192710150 10/11/2018 6.83 Annexure 11
It is clearly evident from the above that AEML has paid SBI Capital Markets Limited for
services other than refinancing related services for term loan. AEML has paid SBI Capital
Markets for availing M&A Buy side advisory and working capital facility services, which
are not eligible for recovery under refinancing cost. Consequently, only the payments made
to SBI Capital Markets Limited for Term Loan (Rs. 1.50 Crore) and Term Loan II (Rs. 6.83
Crore) are eligible for recovery as part of refinancing cost.
In addition, AEML has also considered Rs. 8.26 Crore paid to Adani Finserve Limited as
part of refinancing cost. AEML has provided letter written by Adani Finserve Limited to
AEML dated 13 September, 2018 for providing financial advisory services for loan
facilities as Annexure 12a of Exhibit S of the Petition. The letter has been signed by only
one party. AEML has made payment of Rs. 8.26 Crore to Adani Finserve on 22 October,
2018 against the services provided under this arrangement.
As per letter, scope of services included the following:
• Advise on refinancing through replacing an existing debt obligation and/or to
attain a change in terms.
• Support on running a competitive financing process with various lenders
• Support for managing dialogue with financiers and compare and analyse offers.
Based on the details submitted by AEML, the process of refinancing of loans was completed
by 29 August, 2018 as the data of opening loans shared by AEML for the post AEML period
shows an opening loan balance of Rs. 8500 Crore with the revised rate of interest of 9.05%
as on 29 August, 2018. In this context, the letter sent by Adani Finserve to AEML for
providing financial advisory services is dated 13 September, 2018, i.e., period after the
process of refinancing of loans was completed. The relevant excerpts of the letter from
Adani Finserve Private Limited mentioning about providing services for the proposed
refinancing of term loans is reproduced below for reference:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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“Dear Sir:
Re: Financial Advisory Services for Loan Facilities
We refer to discussions on our engagement for providing financial services
(“Services”) to Adani Electricity Mumbai Limited (“Company”) in relation to
the proposed refinancing of the Company’s term loan facilities, and the raising
of working capital and capital expenditure loan facilities by the Company
(“Engagement”).
…”
It is evident from the above that the services to be provided by Adani Finserve is possibly
for future refinancing activities to be undertaken by the Company and not for the
refinancing carried out in the past by AEML. Hence, the cost of Rs. 8.26 Crore has not been
considered as part of the refinancing cost incurred by AEML for the refinancing carried out
for Rs. 8,500 Crore of term loans and is hence, not eligible for recovery through the ARR.
Accordingly, the refinancing cost of Rs. 142.35 Crore could be considered subject to due
diligence.
It is also clearly evident from the above that loan amount of Rs. 8,500 Crore refinanced by
AEML is not solely for the purpose repayment of existing loans taken for Generation,
Transmission and Distribution business. AEML has used the loans for other purposes like
financing transaction cost, statutory dues, etc.
The Commission in its Order in Case No. 139 of 2017 has provided approval of Licence
Assignment and Asset Transfer with certain conditions. One of the conditions was that
REGSL shall not claim any amount from the consumers on account of the proposed
transaction. The Commission also approved the sale of 100% shareholding in REGSL to
ATL under Section 17(3) of the Act, subject to various conditions and one of the conditions
was that REGSL/ATL shall not claim any amount from the consumers on account of the
proposed transaction. Relevant part of the Order in Case No. 139 of 2017 is reproduced
below for reference.
“Conditions for Approval of Licence Assignment and Asset Transfer
88. In accordance with the above analysis and rulings, the Commission
approves the assignment of the Transmission Licence of RInfra to REGSL and
transfer of transmission utility including transmission assets from RInfra to
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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REGSL, in accordance with the Scheme of Arrangement under Section 17(3) of
the Act, subject to the following conditions:
…..
h. REGSL shall not claim any amount from the consumers on account of the
proposed transaction;
…..
89. In accordance with the above analysis and rulings, the Commission
approves the sale of 100% shareholding in REGSL to ATL under Section 17(3)
of the Act, subject to the following conditions:
…
b. REGSL/ATL shall not claim any amount from the consumers on account
of the proposed transaction;
…”(emphasis added)
Considering the above, it is clear that AEML is not eligible for any amount incurred for the
transaction between RInfra and ATL. AEML is only eligible for proportionate recovery of
refinancing cost pertaining to normative loans as on 29 August, 2018. Outstanding
normative loans as on 29 August, 2018 for AEML-D Wires Business and Supply Business
was Rs. 1437.01 Crore and Rs. 77.81 Crore respectively. Hence, refinancing cost on pro-
rata basis works out to Rs. 24.07 Crore and Rs. 1.30 Crore for AEML-D Wires Business
and Supply Business, respectively. The computation of the proportionate sharing of costs
is provided in the Table below:
Table 0-88: Computation of eligible Refinancing Cost for Regulatory Loan of
AEML-D (Rs. Crore)
Particulars Amount
Total Loan Refinanced by AEML 8,500.00
Total Refinancing Cost claimed by AEML 157.10
Total Eligible Refinancing Cost 142.35
AEML (G, T & D) Regulatory Loan 2,189.01
Pro-rata Refinancing Cost eligible for AEML (G, T & D)
Regulatory Loan 36.66
AEML-D Wires Business Regulatory Loan 1,437.01
AEML-D Supply Business Regulatory Loan 77.81
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Pro-rata Refinancing Cost applicable for AEML-D
Wires Business Regulatory Loan 24.07
Pro-rata Refinancing Cost applicable for AEML-D
Supply Business Regulatory Loan 1.30
For the purpose of working out the benefit from the refinancing transaction, AEML has
considered weighted average interest rate of 10.48%. However, AEML-D has not provided
any supporting documents or basis for the weighted average interest rate of 10.48%.
Further, the credit facility letter from Yes Bank dated 29 March, 2018 included the offered
revised rate of 9.05%. Accordingly, the benefit computation should consider the applicable
interest rates for the existing loan portfolio as on 31 March, 2018 (i.e., date of signing of
the credit facility letter with Yes Bank) and the revised interest rate after signing of the
credit facility letter for refinancing of the term loans.
AEML-D has submitted the details of applicable interest rate for FY 2017-18 and FY 2018-
19. Accordingly, as per details submitted by AEML-D for bank wise outstanding loan and
applicable interest rate, the weighted average interest rate as on 31 March, 2018 was
10.33%.
Accordingly, the Commission has considered 10.33% as weighted average interest rate of
the existing loan portfolio of AEML-D as on 31 March 2018 for working out benefits due
to refinancing of loan. AEML has refinanced the loan at 9.05% and same has been
considered as revised rate for working out benefits due to refinancing of loan.
In order to compute the Present Value of net savings, AEML-D has considered discounting
rate post tax cost of debt for AEML, which is 5.89%. As per MYT Regulations, 2015,
AEML-T is eligible for Income Tax as per PBT method and hence, there will not be any
impact of Income Tax on savings accruing due to refinancing of loan. In cost plus regulatory
regime, approved income allowed for recovery is dependent on the expenses (ARR)
approved for the respective year. Hence, if there is any reduction in expenses (ARR) due to
refinancing, income allowed for recovery through the Tariff Order is automatically adjusted
and taxable income as per PBT method remains unchanged. In view of the same, the
Commission has considered discounting rate of 9.05%, which is cost of debt for the purpose
of working out the present value of net savings.
The Regulation 29.10 of MYT Regulations, 2015 specifies that any saving in interest cost
due to refinancing of loans is to be shared in the ratio of 2:1 and the relevant para is
reproducedbelow:
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“29.10 The Generating Company or the Licensee or the MSLDC, as the case
may be, shall make every effort to re-finance the loan as long as it results in net
savings on interest and in that event, the costs associated with such re-financing
shall be borne by the Beneficiaries and the net savings shall be shared between
the Beneficiaries and them in the ratio of 2:1, subject to prudence check by the
Commission:
Provided that the Generating Company or the Licensee or the MSLDC, as the
case may be, shall submit documentary evidence of the costs associated with
such re-financing:
Provided further that the net savings in interest shall be calculated as an annuity
for the term of the loan, and the annual net savings shall be shared between the
entity and Beneficiaries in the specified ratio.”
For working out the net benefits, though AEML-D has considered repayment schedule as
per loan agreement, as per the provisions of the MYT Regulations, 2015, repayment during
the year shall be deemed to be equal to the depreciation allowed for the year. The
Commission has considered opening normative loan and depreciation approved for FY
2018-19 for calculating saving due to refinancing of existing loan portfolio. For FY 2018-
19, saving is calculated for the number of days for which new rates were applicable and for
remaining period of loan, saving is calculated for full financial year.
The Commission has carried out a Cost-Benefit Analysis of the refinancing transaction and
resultant savings in interest cost. The Commission has considered opening normative loan
for FY 2018-19 as opening loan and the repayment is considered same as the approved
depreciation for FY 2018-19 to compute the closing balance of the loans. The computation
has been carried out till the entire existing normative loan is repaid. No additions to the
normative loans has been assumed for the purpose of this benefit computation as any new
capitalisation proposed by the Licensee during this period will be funded through separate
loans to be approved by the Commission. The year-wise savings in interest cost has been
worked out as the difference between the interest payable considering the existing interest
rate of 10.33% and that payable considering the revised interest rate of 9.05%. The saving
for FY 2018-19 is considered pro-rata to number of days for which revised rate on loan was
applicable and for remaining years, it is considered for full financial year.
To compute the net savings from the transaction, net present value of the year wise savings
is worked out using a discounting rate of 9.05%. This net present value is then compared
with the cost of refinancing incurred by AEML-D and eligible for recovery through the
ARR and the difference between the two is deemed to be the net savings from the
transactions and which is to be shared between the consumers and AEML-D in the ratio
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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specified in the MYT Regulations, 2015. The cost of refinancing eligible for recovery from
the ARR is allowed for recovery over and above the share of benefit of AEML-D to be
recovered through the ARR. The Tables below provides the detailed computation of the
sharing of benefit between AEML-D and the consumers:
Table 0-89: Refinancing Cost and sharing of Net Saving for FY 2018-19 for the
Wires Business, as approved by the Commission (Rs. Crore)
Table 0-90: Refinancing Cost and sharing of Net Saving for FY 2018-19 for the
Supply Business, as approved by the Commission (Rs. Crore)
The Commission approves refinancing cost of Rs. 24.07 Crore and sharing of benefits of
Rs. 4.78 Crore for the Wires Business for FY 2018-19. As there is no net saving in case of
the Supply Business, the refinancing cost has not been approved for the Supply Business.
1.43 RETURN ON EQUITY (ROE)
AEML-D’s Submission
AEML-D submitted that it has computed RoE by applying the rate of return for Wires
Business and Retail Supply Business as specified in the MYT Regulations, 2015, and
considering the equity portion of new capitalisation in FY 2017-18 and FY 2018-19 as 30%
of the capitalisation in that year, after reducing the Consumer Contribution of Rs. 28.72
Financial Year FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24
Opening Balance of Loan 1,437.01 1,202.21 946.60 665.51 364.03 49.67
Addition
Repayment 234.80 255.61 281.09 301.48 314.36 49.67
Closing Balance of Loan 1,202.21 946.60 665.51 364.03 49.67 -
Average Loan Balance 1,319.61 1,074.40 806.05 514.77 206.85 24.83
Interest @ Existing Rate (10.33%) 80.30 110.99 83.27 53.18 21.37 2.57
Interest @ Revised Rate (9.05%) 70.35 97.23 72.95 46.59 18.72 2.25
Saving in Interest 9.95 13.75 10.32 6.59 2.65 0.32
NPV of Saving @ Revised Rate (9.05%) 38.40
Refinancing Cost to be recovered as part of ARR 24.07
Net Saving 14.33
Share of AEML-D in Net Saving 4.78
Financial Year FY 2018-19 FY 2019-20 FY 2020-21
Opening Balance of Loan 77.81 52.16 26.16
Addition
Repayment 25.65 26.00 26.16
Closing Balance of Loan 52.16 26.16 -
Average Loan Balance 64.98 39.16 13.08
Interest @ Existing Rate (10.33%) 3.95 4.04 1.35
Interest @ Revised Rate (9.05%) 3.46 3.54 1.18
Saving in Interest 0.49 0.50 0.17
NPV of Saving @ Revised Rate (9.05%) 1.09
Refinancing Cost to be recovered as part of ARR 1.30
Net Saving -0.21
Share of AEML-D in Net Saving -0.07
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 141 of 445
crore received in FY 2017-18 and Rs. 22.29 Crore received in FY 2018-19. The details of
the RoE computations for the Wires Business for FY 2017-18 and FY 2018-19 along with
RoE provisionally considered by the Commission for FY 2017-18 and FY 2018-19 for
Wires Business in AEML-D’s MTR Order are given in the Table below:
Table 0-91 : Return on Regulatory Equity for Wires Business for FY 2017-18 and
FY 2018-19 as submitted by AEML-D (Rs Crore)
Particulars
FY 2017-18 FY 2018-19
MTR
Order
True-up
Petition
MTR
Order
True-up
Petition
Regulatory Equity at the beginning of
year 1,879.84 1,879.84 1,960.07 1,966.80
Capitalisation during the year 319.16 338.53 255.46 417.33
Consumer Contribution and Grants
during the year towards capital works 28.72 28.72 28.72 22.29
Equity portion of capitalisation during
the year 87.13 92.94 68.02 118.51
Reduction in Equity Capital on account
of retirement / replacement of assets 6.90 5.99 - 3.78
Regulatory Equity at the end of year 1,960.08 1,966.80 2,028.09 2,081.53
Return on Regulatory Equity (%) 15.50% 15.50% 15.50% 15.50%
Return on Regulatory Equity 297.59 298.58 309.08 314.04
The details of the RoE computations for the Supply Business for FY 2017-18 and FY 2018-
19 along with RoE provisionally considered by the Commission for FY 2017-18 for Supply
Business in AEML-D’s MTR Order are given in the below Table:
Table 0-92 : Return on Regulatory Equity for Supply Business for FY 2017-18 and
FY 2018-19 as submitted by AEML-D ( Rs Crore)
Particulars
FY 2017-18 FY 2018-19
MTR
Order
True-up
Petition
MTR
Order
True-up
Petition
Regulatory Equity at the beginning of
year 156.11 156.11 157.85 156.46
Capitalisation during the year 19.99 19.98 38.63 22.68
Consumer Contribution and Grants
during the year towards capital works 0 0 0
Equity portion of capitalization during
the year 6.00 5.99 11.59 6.80
Reduction in Equity Capital on account
of retirement / replacement of assets 4.26 5.64 7.48
Regulatory Equity at the end of year 157.85 156.46 169.44 155.78
Return on Regulatory Equity (%) 17.50% 17.50% 17.50% 17.50%
Return on Regulatory Equity 27.47 27.84 28.64 27.98
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 142 of 445
Commission’s Analysis and Ruling
To determine the equity eligible for returns as per MYT Regulations, 2015, the Commission
has considered the Closing Equity for FY 2016-17 as approved in the MTR Order, as the
Opening Equity for FY 2017-18. Additional equity has been considered as 30% of the
approved capitalisation in the year after deducting the Consumer Contribution from the
Capitalisation. Further, 30% of the asset retirement approved is reduced to arrive at the
amount of equity eligible for returns as per the Regulations. The Commission has
considered the RoE as 17.50% for Supply Business and 15.50% for the Wires Business, in
accordance with the Regulations. Accordingly, the approved RoE for FY 2017-18 is as
given in the Table below:
Table 0-93: Return on Equity for FY 2017-18 for Wires and Supply Business as
approved by the Commission (Rs. Crore)
Particulars MTR
Order
True-up
Petition
Approved
after truing
up
Wires Business
Regulatory Equity at the beginning of the year 1,879.84 1,879.84 1,879.84
Capitalisation during the year 319.16 338.53 317.05
Consumer Contribution and Grants 28.72 28.72 28.72
Equity portion of capitalisation during the year 87.13 92.94 86.50
Equity portion of asset retired during the year 6.90 5.99 5.55
Regulatory Equity at the end of the year 1,960.08 1,966.80 1,960.79
Rate of Return (%) 15.50% 15.50% 15.50%
Total RoE 297.59 298.58 298.08
Supply Business
Regulatory Equity at the beginning of the year 156.11 156.11 156.11
Capitalisation during the year 19.99 19.98 19.98
Consumer Contribution and Grants 0 0 -
Equity portion of capitalisation during the year 6.00 5.99 5.99
Equity portion of asset retired during the year 4.26 5.64 5.64
Regulatory Equity at the end of the year 157.85 156.46 156.46
Rate of Return (%) 17.50% 17.50% 17.50%
Total RoE 27.47 27.84 27.84
Similarly, the Commission has considered the Closing Equity of FY 2017-18 as approved
in this Order, as the Opening Equity for FY 2018-19. Additional equity has been considered
as 30% of the approved capitalisation in the year after deducting the Consumer Contribution
from the Capitalisation. Further, 30% of the asset retirement approved is reduced to arrive
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 143 of 445
at the amount of equity eligible for returns as per the Regulations. The Commission has
considered the RoE as 17.50% for Supply Business and 15.50% for the Wires Business, in
accordance with the Regulations. Accordingly, the approved RoE for FY 2018-19 is as
given in the Table below:
Table 0-94: Return on Equity for FY 2018-19 for Wires and Supply Business as
approved by the Commission (Rs. Crore)
Particulars MTR
Order
True-up
Petition
Approved
after truing
up
Wires Business
Regulatory Equity at the beginning of the year 1,960.07 1,966.80 1,960.79
Capitalisation during the year 255.46 417.33 397.63
Consumer Contribution and Grants 28.72 22.29 22.29
Equity portion of capitalisation during the year 68.02 118.51 112.60
Equity portion of asset retired during the year - 3.78 3.50
Regulatory Equity at the end of the year 2,028.09 2,081.53 2,069.89
Rate of Return (%) 15.50% 15.50% 15.50%
Total RoE 309.08 314.04 312.65
Supply Business
Regulatory Equity at the beginning of the year 157.85 156.46 156.46
Capitalisation during the year 38.63 22.68 22.68
Consumer Contribution and Grants 0 0
Equity portion of capitalisation during the year 11.59 6.80 6.80
Equity portion of asset retired during the year 7.48 7.48
Regulatory Equity at the end of the year 169.44 155.78 155.78
Rate of Return (%) 17.50% 17.50% 17.50%
Total RoE 28.64 27.98 27.98
1.44 INTEREST ON WORKING CAPITAL (IOWC)
AEML-D’s Submission
AEML-D submitted that it has calculated normative Interest on Working Capital (IoWC)
for the Wires Business and Supply Business in accordance with Regulation 31.3 and 31.4
of the MYT Regulations, 2015. As per MYT (First Amendment) Regulations, 2017, the
Base Rate has been defined as One-year MCLR of SBI plus 150 basis points. However, the
Amendment applies prospectively from date of publication. Hence, for FY 2017-18,
AEML-D has considered a weighted average rate worked out using SBI Base Rate plus 150
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 144 of 445
basis points from 1 April 2017 to 29 November 2017 and One-year SBI MCLR for the
remaining period (30 November 2017 to 31 March 2018). This works out to 10.18% for FY
2017-18. Similarly, AEML-D has considered weighted average SBI one-year MCLR plus
150 basis points at 9.89% for FY 2018-19. Considering this, the normative interest on
working capital for Wires Business, , is shown in the Table below:
Table 0-95 : Interest on Working Capital for Wires Business for FY 2017-18 and FY
2018-19 as submitted by AEML-D (Rs. Crore)
Particulars
FY 2017-18 FY 2018-19
MTR
Order
True-up
Petition
MTR
Order
True-up
Petition
O&M Expenses for a month 67.55 66.73 70.98 70.32
Maintenance spares at 1% of Opening
GFA 52.74 52.74 55.71 55.92
One and half months of revenue from
charges for use of Distribution Wires 191.96 192.18 191.92 195.22
Less: - -
Amount of Security Deposit from
Distribution System Users - -
Total Working Capital 312.26 311.66 318.61 321.45
Rate of Interest 10.20% 10.18% 9.45% 9.89%
Interest on Working Capital 31.85 31.73 30.11 31.79
The summary of IoWC for Supply Business for FY 2017-18 and FY 2018-19 is shown in
the Table below:
Table 0-96 : Interest on Working Capital for Supply Business for FY 2017-18 as
submitted by AEML-D (Rs. Crore)
Particulars
FY 2017-18 FY 2018-19
MTR
Order
True-up
Petition
MTR
Order
True-up
Petition
O&M Expenses for a month 33.33 32.92 35.02 34.69
Maintenance spares at 1% of Opening GFA 5.07 5.06 5.13 5.07
One and half months of revenue from sale of
electricity including revenue from CSS 669.71 671.79 713.65 733.23
Less:
Amount of Security Deposit from Supply
Consumers 405.72 407.30 426.01 431.87
One-month equivalent of cost of power
purchased 273.14 264.62 278.83 235.80
Total Working Capital 29.25 37.85 48.96 105.32
Rate of Interest 10.20% 10.18% 9.45% 9.89%
Interest on Working Capital 2.98 3.85 4.63 10.42
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 145 of 445
Commission’s Analysis and Ruling
The Commission has approved IoWC for AEML-D's Wires Business and Supply Business
in accordance with Regulations 31.3 and 31.4 of the MYT Regulations, 2015. The
Commission has considered 10.18% as the interest rate for computation of IoWC for FY
2017-18, being the weighted average rate worked out using SBI Base Rate plus 150 basis
points from 1 April 2017 to 29 November 2017 and One-year SBI MCLR for the remaining
period (30 November 2017 to 31 March 2018). Similarly, Commission has considered the
one-year SBI MCLR plus 150 basis points, i.e., 9.89% as the interest rate for IoWC for FY
2018-19. Accordingly, the IoWC approved by the Commission is as given in the Tables
below:
Table 0-97: Interest on Working Capital for Wires Business for FY 2017-18
approved by the Commission (Rs. Crore)
Particulars MTR
Order
True-up
Petition
Approved after
truing up
O&M Expenses for a month 67.55 66.73 64.47
Maintenance spares at 1% of Opening GFA 52.74 52.74 49.16
One and half months of revenue from charges
for use of Distribution Wires 191.96 192.18 192.18
Total Working Capital 312.26 311.66 305.81
Rate of Interest (% p.a.) 10.20% 10.18% 10.18%
Interest on Working Capital 31.85 31.73 31.13
Table 0-98: Interest on Working Capital for Wires Business for FY 2018-19
approved by the Commission (Rs. Crore)
Particulars MTR
Order
True-up
Petition
Approved after
truing up
O&M Expenses for a month 70.98 70.32 69.21
Maintenance spares at 1% of Opening GFA 55.71 55.92 51.84
One and half months of revenue from charges
for use of Distribution Wires 191.92 195.22 195.15
Total Working Capital 318.61 321.45 316.21
Rate of Interest (% p.a.) 9.45% 9.89% 9.89%
Interest on Working Capital 30.11 31.79 31.27
Table 0-99: Interest on Working Capital for Supply Business for FY 2017-18
approved by the Commission
Particulars MTR
Order
True-up
Petition
Approved
after truing up
O&M Expenses for a month 33.33 32.92 31.31
Maintenance spares at 1% of Opening GFA 5.07 5.06 5.07
One and half months of revenue from sale of
electricity including revenue from CSS 669.71 671.79 669.86
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 146 of 445
Particulars MTR
Order
True-up
Petition
Approved
after truing up
Less:
Amount of Security Deposit from Supply
Consumers 405.72 407.30 407.30
One-month equivalent of cost of power
purchased 273.14 264.62 264.62
Total Working Capital 29.25 37.85 34.32
Rate of Interest 10.20% 10.18% 10.18%
Interest on Working Capital 2.98 3.85 3.49
Table 0-100: Interest on Working Capital for Supply Business for FY 2018-19
approved by the Commission
Particulars MTR
Order
True-up
Petition
Approved
after truing up
O&M Expenses for a month 35.02 34.69 33.95
Maintenance spares at 1% of Opening GFA 5.13 5.07 5.08
One and half months of revenue from sale of
electricity including revenue from CSS 713.65 733.23 731.15
Less:
Amount of Security Deposit from Supply
Consumers 426.01 431.87 431.87
One-month equivalent of cost of power
purchased 278.83 235.80 234.40
Total Working Capital 48.96 105.32 103.91
Rate of Interest 9.45% 9.89% 9.89%
Interest on Working Capital 4.63 10.42 10.28
1.45 INTEREST ON CONSUMERS’ SECURITY DEPOSIT
AEML-D’s Submission
AEML-D submitted that it has paid interest on consumer security deposit of Rs. 36.29 Crore
for FY 2017-18 at SBI MCLR as on 1 April 2017 plus 150 Basis Points, and Rs. 38.50
Crore for FY 2018-19 at SBI MCLR as on 1 April 2018 plus 150 Basis Points, in accordance
with MYT (First Amendment) Regulations, 2017. The Commission had also approved
interest on consumer security deposit of Rs. 36.29 Crore for FY 2017-18 and Rs. 39.30
Crore for FY 2018-19 in the MTR Order in Case No. 200 of 2017, based on submissions of
AEML-D. The following Table shows the Interest on Security Deposit claimed by AEML-
D.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 147 of 445
Table 0-101: Interest on Consumer Security Deposit for FY 2017-18 and FY 2018-19
as submitted by AEML-D (Rs. Crore)
Particulars
FY 2017-18 FY 2018-19
MTR
Order
True-up
Petition
MTR
Order
True-up
Petition
Interest on Security Deposit 36.29 36.29 39.30 38.50
Commission’s Analysis and Ruling
The Commission has approved the actual interest on CSD paid by AEML-D, in the truing
up for FY 2017-18 and FY 2018-19, as shown in the Table below:
Table 0-102: Interest on Consumer Security Deposit for FY 2017-18 as approved by
Commission (Rs. crore)
Particular MTR Order True-up Petition Approved after truing up
Interest on CSD 36.29 36.29 36.29
Table 0-103: Interest on Consumer Security Deposit for FY 2018-19 as approved by
Commission (Rs. crore)
Particular MTR Order True-up Petition Approved after truing up Interest on CSD 39.30 38.50 38.50
1.46 PROVISION FOR BAD AND DOUBTFUL DEBTS
AEML-D’s Submission
AEML-D submitted that it has made an actual provision of Rs. 11.74 Crore and Rs. 21.97
Crore towards bad and doubtful debts for FY 2017-18 and FY 2018-19, respectively, in its
accounts. As per the MYT Regulations, 2015, a provision of up to 1.5% of receivables (as
per the Audited Accounts, allocated to Wires and Supply Businesses) is allowable as
provision for bad debts. Accordingly, the provision for bad and doubtful debts works out to
Rs. 16.30 Crore for FY 2017-18 and Rs. 15.99 Crore for FY 2018-19. For FY 2017-18 since
the actual provision made is lower than the allowable amount, AEML-D has restricted its
claim to the lower of the two, i.e., Rs. 11.74 Crore. However, for FY 2018-19, the normative
provision is lower than the actual provision made in annual accounts for FY 2018-19.
Therefore, the normative provision for bad debts of Rs. 15.99 Crore has been considered.
AEML-D has segregated the amount between Wires Business and Supply Business in the
ratio of revenue of Wires and Supply Business in FY 2017-18 and FY 2018-19, as shown
in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 148 of 445
Table 0-104 : Provision for Bad and Doubtful Debts for FY 2017-18 and FY 2018-19
as submitted by AEML-D (Rs. Crore)
Particulars
FY 2017-18 FY 2018-19
MTR
Order
True-up
Petition
MTR
Order
True-up
Petition
Receivables 1,086.74 1065.84
% of Receivables 1.50% 1.50%
Provision for Bad Debts –Total 16.30 15.99
Provision for Bad Debts –Actual (considered) 11.74 21.97
Total Revenue - Wires Business 1,537.43 1561.73
Total Revenue - Supply Business 5,357.26 5849.17
Provision for Bad Debts – Wires Business 2.61 2.62 2.61 3.37
Provision for Bad Debts –Supply Business 9.13 9.12 9.13 12.62
Commission’s Analysis and Ruling
Regulations 73 and 82 of the MYT Regulations, 2015 for Wires Business and Retail Supply
Business, respectively, specify the maximum provision for bad and doubtful debts for a
year as 1.5% of the receivables of the respective businesses, provided that it is within 5%
of the receivables. The Regulation also specifies that the provision to be allowed for any
year shall not exceed the provision made by the Licensee in its audited accounts.
Accordingly, the Commission has considered the actual provision made in the audited
accounts for FY 2017-18 and normative provision as per Regulations for FY 2018-19. For
applying these provisions, the Commission has allocated the total value of provision for
bad doubtful debts in the ratio of revenue of Wires and Supply Business in FY 2017-18 and
FY 2018-19, as submitted by AEML-D.
Accordingly, the Commission has approved the provision for bad and doubtful debts as
shown in the following Table:
Table 0-105: Provision for Bad and Doubtful Debts for FY 2017-18 and FY 2018-19
approved by the Commission (Rs. Crore)
Particulars
FY 2017-18 FY 2018-19
MTR
Order
True-up
Petition
Approved
after truing
up
MTR
Order
True-up
Petition
Approved
after truing
up
Wires Business 2.61 2.62 2.62 2.61 3.37 3.37
Supply Business 9.13 9.12 9.12 9.13 12.62 12.62
Total 11.74 11.74 11.74 11.74 15.99 15.99
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 149 of 445
1.47 CONTRIBUTION TO CONTINGENCY RESERVE
AEML-D’s Submission
In accordance with Regulation 34.1 of the MYT Regulations, 2015, AEML-D has created
a contingency reserve as 0.25% of the opening GFA of Supply Business and Wires Business
for FY 2017-18 and FY 2018-19, respectively. The summary of contribution to
Contingency Reserve is as shown in the Tables below:
Table 0-106 : Contribution to Contingency Reserve for Wires Business & Supply
Business for FY 2017-18 as submitted by AEML-D (Rs. Crore)
Particulars Wires Business Supply Business
MTR Order True-up
Petition
MTR
Order
True-up
Petition
Opening Balance of GFA 5,274.37 5,274.37 507.08 505.96
% Contribution 0.25% 0.25% 0.25% 0.25%
Contribution to
Contingency Reserves 13.19 13.19 1.27 1.26
Table 0-107 : Contribution to Contingency Reserve for Wires Business & Supply
Business for FY 2018-19 as submitted by AEML-D (Rs. Crore)
Particulars Wires Business Supply Business
MTR Order True-up
Petition
MTR
Order
True-up
Petition
Opening Balance of GFA 5,572.00 5,591.55 512.00 508.26
% Contribution 0.25% 0.25% 0.25% 0.25%
Contribution to
Contingency Reserves 13.93 13.98 1.28 1.27
Commission’s Analysis and Ruling
As per Regulation 34.1 of MYT Regulations, 2015, the contribution to the Contingency
Reserves in a year shall be between 0.25% and 0.50% of the original cost of fixed assets.
The Commission had queried AEML-D on the opening balance of contingency reserves for
FY 2017-18 and FY 2018-19 and documentary evidence for investment in various
securities, to which AEML-D replied with the requisite details. AEML-D has invested the
Contingency Reserve contribution in specified securities, in accordance with the MYT
Regulations. The Commission has approved the Contribution to Contingency Reserves for
Wires and Supply Business for FY 2017-18 and FY 2018-19 at 0.25% of the approved value
of the Opening GFA for the respective Businesses as shown in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 150 of 445
Table 0-108:Contribution to Contingency Reserves for FY 2017-18 for Wires and
Supply Business approved by the Commission (Rs. Crore)
Particulars Wires Business Supply Business
MTR
Order
True-up
Petition
Approved
after truing up
MTR
Order
True-up
Petition
Approved after
truing up
Opening
Balance of GFA 5,274.37 5,274.46 5,273.81* 507.08 505.96 507.08
% Contribution 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Contribution to
CR 13.19 13.19 13.18 1.27 1.26 1.27
*Includes Consumer Contribution
Table 0-109:Contribution to Contingency Reserves for FY 2018-19 for Wires and
Supply Business approved by the Commission (Rs. Crore)
Particulars Wires Business Supply Business
MTR
Order
True-up
Petition
Approved after
truing up
MTR
Order
True-up
Petition
Approved after
truing up
Opening
Balance of GFA 5,572.00 5,591.55 5,569.42* 512.00 508.26 508.26
% Contribution 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Contribution to
CR 13.93 13.98 13.92 1.28 1.27 1.27
*Includes Consumer Contribution
1.48 INCOME TAX
AEML-D’s Submission
AEML-D submitted that for FY 2017-18 and FY 2018-19, the Commission, in the MTR
Order in Case No. 200 of 2017, had approved Income Tax provisionally at the same level
as approved for FY 2016-17, in accordance with MYT Regulations, 2015. Till FY 2017-
18, the ownership of Mumbai Distribution Business was with RInfra, which had other
regulated / unregulated businesses in addition to the regulated business of distribution.
Therefore, Income Tax for FY 2017-18 has been calculated as per Regulatory Profit Before
Tax (PBT) method, in line with the approach adopted by the Commission in its previous
Orders, which is also in accordance with MYT Regulations, 2015. The workings are shown
below:
Table 0-110 : Income Tax Computation for FY 2017-18 as submitted by AEML-D
(Rs. Crore)
Particulars / (Rs. Crore) FY 2017-18
Revenue from sale of Electricity including RAC from
own consumers 7,181.12
Revenue from RAC from Changeover Consumers 119.18
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 151 of 445
Particulars / (Rs. Crore) FY 2017-18
Income from Wheeling Charges from Changeover and
OA consumers 285.59
Income on account of CSS from OA consumers 161.76
Non-Tariff Income 195.06
Total Revenue 7,942.71
Power Purchase Expenses 4,256.35
O&M Expenses 1,184.72
Depreciation 243.84
Interest on Long Term Loans 168.45
Interest on Working Capital 11.86
Interest on Consumer Security Deposit 36.29
Provision for bad and doubtful debts 11.74
Contribution to contingency reserves 14.45
Transmission Charges - intra State 402.00
MSLDC Fees & Charges 1.30
Total Expense 6,331.00
Profit Before Tax 1,611.71
Add: Depreciation considered in Expenses 243.84
Less: Tax Depreciation 299.91
Total Taxable Income 1,555.64
Corporate Tax Rate (%) 34.61%
Income Tax as per Corporate Tax Rate 538.37
Computation of MAT
Total Taxable Income 1,611.71
MAT (%) 21.34%
MAT 343.94
MAT Credit (FY 16-17 available) 299.19
MAT credit utilization in FY 17-18 194.44
Income Tax applicable (Net of MAT Credit utilization) 343.94
The above Income Tax has been segregated in Wires Business and Supply Business, in the
ratio of Regulatory Profit Before Tax of Wires Business and Supply Business respectively,
as shown in the Table below:
Table 0-111 : Income Tax for Wires Business and Supply Business for FY 2017-18 as
submitted by AEML-D (Rs. Crore)
Particulars MTR Order True-up Petition
Income Tax - Wires 62.61 105.49
Income Tax - Retail 191.84 238.45
Total 254.45 343.94
In FY 2018-19, the ownership of Mumbai Licensee was transferred to AEML. AEML also
has other businesses in addition to the regulated business of distribution (the regulated
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 152 of 445
businesses of generation and transmission). Therefore, Income Tax for FY 2018-19 has
been calculated as per Regulatory PBT method, in accordance with MYT Regulations,
2015. AEML-D has claimed Income Tax as per the philosophy adopted in AEML-D’s MTR
Order in Case No. 200 of 2017. In FY 2018-19, ATL took over Mumbai Generation,
Transmission and Distribution business of RInfra, and in the process took over the liabilities
pertaining to regulated business as well, albeit, by replacing the existing loans with lower
cost loans. The acquisition required loans worth Rs. 8500 Crore and, in the process, the
existing regulatory loans were replaced. The depreciation in the audited accounts and
subsequently the tax depreciation for Income Tax purposes is substantially high as
compared to Regulated depreciation resulting in lower PBT for actual tax purposes.
However, as the consumers have not been burdened with higher interest cost of loans
availed other than Regulated loan and higher depreciation, it is imperative that tax
depreciation is also computed considering the regulatory asset base only. The computation
of Income Tax for FY 2018-19 is shown in the Table below:
Table 0-112 : Income Tax Computation for FY 2018-19 as submitted by AEML-D
(Rs. Crore)
Particulars / (Rs. Crore) FY 2018-19
Revenue from sale of Electricity including RAC from
own consumers 7,509.92
Revenue from RAC from Changeover Consumers 80.09
Income from Wheeling Charges from Changeover and
OA consumers 274.64
Income on account of CSS from OA consumers 127.22
Non-Tariff Income 150.32
Less: Eff gains on Dist Loss of FY 16 & FY 17 16.08
Less: Wires and Supply Availability Incentive of FY 16 0.33
Total Revenue 8,125.79
Power Purchase Expenses 3,888.04
O&M Expenses 1,271.88
Depreciation 261.86
Interest on Long Term Loans 159.30
Financing Charges 0.66
Refinancing Cost 112.30
NPV of Interest cost saving 8.88
Interest on Working Capital 28.28
Interest on Consumer Security Deposit 38.50
Provision for bad and doubtful debts 15.99
Contribution to contingency reserves 15.25
Transmission Charges - intra State 391.19
MSLDC Fees & Charges 1.23
Total Expense 6,193.35
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Page 153 of 445
Particulars / (Rs. Crore) FY 2018-19
Profit Before Tax 1,932.44
Add: Depreciation considered in Expenses 261.86
Add: Other disallowance while computing IT 301.42
Less: Tax Depreciation 309.51
Less: Other expenses allowed for computing IT 268.24
Total Taxable Income 1,917.96
Corporate Tax Rate (%) 34.95%
Income Tax as per Corporate Tax Rate 670.33
Computation of MAT
Profit Before Tax 1,932.44
Add: Provision for Bad Debts and other disallowances 24.57
Less: Reversal of provision for bad debts against earlier
years provision and other reversals 0
Total Taxable Income 1,957.01
MAT (%) 21.55%
MAT 421.74
MAT Credit (FY 16-17 available) 104.75
MAT credit utilization in FY 17-18 104.75
Income Tax applicable (Net of MAT Credit utilization) 565.57
The above Tax has been segregated in Wires Business and Supply Business, in the ratio of
Regulatory PBT of Wires Business and Supply Business, respectively, as shown in the
Table below:
Table 0-113 : Income Tax for Wires Business and Supply Business for FY 2018-19 as
submitted by AEML-D (Rs. Crore)
Particulars MTR Order True-up Petition
Income Tax - Wires 62.61 84.73
Income Tax – Supply 191.8 480.85
Total 254.45 565.57
Commission’s Analysis and Ruling
The Commission has computed the regulatory PBT and the Income Tax liability thereon on
a stand-alone basis, in accordance with the approach followed in the MTR Order. The
Commission has considered the Revenue heads and Expense heads as approved after true-
up for FY 2017-18 and FY 2018-19, which are different from the actual expenses
considered by AEML-D in its Petition.
The Commission has computed Income Tax in accordance with Regulation 33.1 of MYT
Regulations, 2015 and the ATE Judgment dated 2 December 2013 in Case No. 138 and
Case No. 139 of 2012.
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Page 154 of 445
As specified in the MYT Regulations, 2015 and ATE Judgment, the Commission has
arrived at Income Tax paid based on Regulatory PBT considering the normative cost
allowed by the Commission. The ratio with regard to tax liability is calculated on the
regulatory income and cost within the MYT regime considering the applicable tax
depreciation for computation of the Income Tax. Accordingly, the calculation of Income
Tax provides the tax payable for the Regulatory business whereby all the items of ARR and
Revenue are considered on normative basis for tariff purpose. Also, in line with MYT
Regulations, 2015, efficiency gains and incentive have not been considered for computation
of Tax on PBT basis.
The computation of the Income Tax for FY 2017-18 and FY 2018-19 as submitted by
AEML-D and as approved by the Commission is given in the Tables below:
Table 0-114: Income Tax for FY 2017-18 as approved by Commission (Rs. crore)
Particulars / (Rs. Crore) MTR
Order AEML-D
Approved after
truing up
Revenue from sale of Electricity including RAC
from own consumers
7,181.12 7,181.12
Revenue from RAC from Changeover Consumers 119.18 119.18
Income from Wheeling Charges from Changeover
and OA consumers
285.59 285.59
Income on account of CSS from OA consumers 161.76 161.76
Non-Tariff Income 195.06 195.06
Less: Efficiency gains on O&M Expenses 7.03
Less: Efficiency gains on IoWC 10.38
Less: Efficiency gains on Distribution loss - FY
2015-16 and FY 2016-17
8.68
Total Revenue 7,942.71 7,916.61
Power Purchase Expenses 4,256.35 4,256.30
O&M Expenses 1,184.72 1,149.86
Depreciation 243.84 243.07
Interest on Long Term Loans 168.45 165.34
Interest on Working Capital 11.86 11.54
Interest on Consumer Security Deposit 36.29 36.29
Provision for bad and doubtful debts 11.74 11.74
Contribution to contingency reserves 14.45 14.45
Transmission Charges - intra State 402.00 402.00
MSLDC Fees & Charges 1.30 1.30
Total Expense 6,331.00 6,291.89
Profit Before Tax 1,611.71 1,624.72
Add: Depreciation considered in Expenses 243.84 243.07
Less: Tax Depreciation 299.91 299.91
Total Taxable Income 1,555.64 1,567.88
Corporate Tax Rate (%) 34.61% 34.608%
Income Tax as per Corporate Tax Rate 538.37 542.61
Computation of MAT
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Page 155 of 445
Particulars / (Rs. Crore) MTR
Order AEML-D
Approved after
truing up
Total Taxable Income 1,611.71 1,624.72
MAT (%) 21.34% 21.34%
MAT 343.94 346.72
MAT Credit (FY 2016-17 available) 299.19 299.19
MAT credit utilization in FY 2017-18 194.44 195.90
Income Tax applicable (Net of MAT Credit
utilization) 254.45 343.94 346.72
Note: As MAT credit is utilized in FY 2017-18 also as per the Commission’s computations, the
closing balance of MAT credit available works out to Rs. 103.29 Crore (299.19 – 195.90)
Table 0-115: Income Tax for FY 2018-19 as approved by Commission (Rs. crore)
Particulars / (Rs. Crore)
MTR
Order
AEML-D
Approved
after truing
up
Revenue from sale of Electricity including RAC
from own consumers
7,509.92 7,509.92
Revenue from RAC from Changeover Consumers 80.09 80.09
Income from Wheeling Charges from Changeover
and OA consumers
274.64 274.64
Income on account of CSS from OA consumers 127.22 127.22
Non-Tariff Income 150.32 150.32
Less: Efficiency Gains on IoWC 6.96
Less: Eff gains on Dist loss - FY 2015-16, FY
2016-17, and FY 2017-18
16.08 25.00
Less: Wires & Supply Availability Incentive - FY
16
0.33 0.33
Total Revenue 8,125.79 8,109.90
Power Purchase Expenses 3,888.04 3,887.05
O&M Expenses 1,271.88 1,249.16
Depreciation 261.86 260.72
Interest on Long Term Loans 159.30 156.22
Financing Charges 0.66 -
Refinancing Cost 112.30 24.07
NPV of Interest cost saving 8.88 4.78
Interest on Working Capital 28.28 48.29
Interest on Consumer Security Deposit 38.50 38.50
Provision for bad and doubtful debts 15.99 15.99
Contribution to contingency reserves 15.25 15.19
Transmission Charges - intra State 391.19 391.19
MSLDC Fees & Charges 1.23 1.23
Total Expense 6,193.35 6,092.39
Profit Before Tax 1,932.44 2,017.51
Add: Depreciation considered in Expenses 261.86 260.72
Add: Other disallowance while computing IT 301.42 301.42
Less: Tax Depreciation 309.51 309.51
Less: Other expenses allowed for computing IT 268.24 268.24
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Page 156 of 445
Particulars / (Rs. Crore)
MTR
Order
AEML-D
Approved
after truing
up
Total Taxable Income 1,917.96 2,001.89
Corporate Tax Rate (%) 34.95% 34.95%
Income Tax as per Corporate Tax Rate 670.33 699.66
Computation of MAT
Profit Before Tax 1,932.44 2,017.51
Add: Provision for Bad Debts and other
disallowances
24.57 24.57
Less: Reversal of provision for bad debts against
earlier years provision and other reversals
0 0
Total Taxable Income 1,957.01 2,042.09
MAT (%) 21.55% 21.55%
MAT 421.74 440.07
MAT Credit (FY 2017-18 available) 104.75 103.29
MAT credit utilization in FY 2018-19 104.75 103.29
Income Tax applicable (Net of MAT Credit
utilization) 254.45 565.57 596.37
Note: As MAT credit is utilized in FY 2018-19 also as per the Commission’s computations, the
closing balance of MAT credit available works out to Nil Crore (103.29 – 103.29)
1.49 NON-TARIFF INCOME
1.49.1 Non-Tariff Income of Wires Business
1.49.1.1 Interest on contingency Reserve Investment
AEML-D’s Submission
AEML-D has calculated the interest on contingency reserves as on 31 March 2018 and 31
March 2019 by applying the weighted average rate of interest on investments on
contingency reserves as per Annual Accounts of AEML-D for FY 2017-18 and FY 2018-
19, respectively.
Commission’s Analysis and Ruling
The Commission has verified the details submitted by AEML-D with regards to interest
income on contingency Reserve Investment. The Commission accordingly approves the
income from Contingency Reserve Investment as submitted by AEML-D.
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Page 157 of 445
1.49.1.2 Land Usage Charges
AEML-D’s Submission
AEML-T has commissioned 5 nos. of EHV stations at Goregaon, Gorai, Saki, Borivali and
Chembur on existing Receiving stations plots of AEML-D. Similarly, there are a few
installations of AEML-D at Aarey, Versova and Ghodbunder EHV station plots and located
on the land, which is part of AEML-T asset base. AEML-D has included the rent receivable
from AEML-T in NTI of Wires Business, while the rent payable by AEML-D is included
in the A&G Expenses of AEML-D.
Commission’s Analysis and Ruling
The Commission has verified the documents received from AEML-D with regard to the
minutes of meeting for arrangement of Land usage charges between AEML-T and AEML-
D. The Commission accordingly approves the income from Land Usage Charges as
submitted by AEML-D.
1.49.1.3 Other Miscellaneous Receipts of Wires Business
AEML-D’s Submission
Out of the Other Miscellaneous Receipts of Rs. 137.76 Crore, revenue from All-in-Hire
(AIH) charges received in FY 2017-18 was Rs. 135.36 Crore. Further, out of Rs. 135.36
Crore, Rs. 55.53 Crore pertains to arrears of AIH charges because of revision in AIH
charges with effect from 1 April 2016. The other components of “Other Miscellaneous
Receipts” of Wires Business include asset usage recovery (equipment hire charges) of Rs.
0.18 Crore, liquidated damages of Rs. 1.48 Crore, forex related income of Rs. 0.07 Crore,
tender document fees of Rs. 0.02 Crore and other income of Rs. 0.66 Crore.
Similarly, for FY 2018-19, out of the Other Miscellaneous Receipts of Rs. 107.96 Crore,
revenue from AIH charges received was Rs. 107.56 Crore. In addition, there is further
income from sale of scrap, investments, profit on sale of assets, etc.
Commission’s Analysis and Ruling
The Commission has considered the Miscellaneous Receipt of Rs. 137.76 Crore and Rs.
107.96 Crore under Miscellaneous Receipt in Non-Tariff Income for FY 2017-18 and FY
2018-19, respectively, as submitted by AEML-D.
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Page 158 of 445
1.49.1.4 Liabilities Written back in Wire Business
AEML-D’s Submission
Liabilities written back in Wires Business of Rs. 7.24 Crore in FY 2017-18 pertain to
reversal of provisions of Octroi payment made in previous years.
Commission’s Analysis and Ruling
The Commission has considered the amount of Rs. 7.24 Crore in Non-Tariff Income of FY
2017-18.
The summary of Non-Tariff Income in Wires Business for FY 2017-18 and FY 2018-19 as
submitted by AEML-D is shown in the Table below:
Table 0-116: Non-Tariff Income for Wires Business for FY 2017-18 and FY 2018-19
as submitted by AEML-D (Rs. Crore)
Particulars
FY 2017-18 FY 2018-19
MTR
Order
True-up
Petition
MTR
Order
True-up
Petition
Rents of land & building 0.52 0.10
Sale of Scrap 0.45 1.60
Income from Investments 8.38 6.58
Other/Miscellaneous receipts 137.76 107.96
Interest on Other Investments 0.14 0.45
Liabilities no longer required written 7.24 0.51
Profit on Sale of Asset 0.01 1.25
Land Usage Charges 5.09 5.34
Total 159.58 159.60 115.04 123.79
Commission’s Analysis and Ruling
The Commission has considered the Non-Tariff Income submitted by AEML-D for FY
2017-18 and FY 2018-19 for Wires Business.
1.49.2 Non-Tariff Income of Supply Business
1.49.2.1 Rebate on Power Purchase Cost
AEML-D’s Submission
Rebate on Power Purchase Cost availed by AEML-D in FY 2017-18 has been included in
the Non-Tariff Income of Supply Business for FY 2017-18 as per the directions of the
Commission in its Order dated 15 June 2012 (Case No. 180 of 2011)
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 159 of 445
Commission’s Analysis and Ruling
The Commission has considered the rebate on power purchase cost availed by AEML-D
during FY 2017-18 and FY 2018-19 as submitted by AEML-D.
1.49.2.2 Other Miscellaneous Receipts for Supply Business
AEML-D’s Submission
Other Miscellaneous Receipts of Supply Business (Rs. 0.83 Crore) consists of Rs. 0.58 Core
of charges for reinstallation of meters, asset usage recovery of Rs. 0.03 Crore, SLDC
charges collected from OA consumers of Rs. 0.03 Crore and other income of Rs. 0.20 Crore.
Commission’s Analysis and Ruling
The Commission has considered other miscellaneous receipts for Supply Business as
submitted by AEML-D.
1.49.2.3 Liabilities Written Back in Supply Business
AEML-D’s Submission
Liabilities written back in Supply Business of Rs. 12.30 Crore in FY 2017-18 consists of
old consumer receivables written back of Rs. 4.04 Crore and unclaimed CSD of
disconnected consumers of Rs. 8.26 Crore.
Commission’s Analysis and Ruling
The Commission has considered the above income under Non-Tariff Income for FY 2017-
18.
1.49.2.4 Delayed Payment Charges and Interest on Delayed Payment
AEML-D’s Submission
In accordance with Regulation 36.3 of the MYT Regulations, 2015, Delayed Payment
Charges and Interest on Delayed Payment received in FY 2017-18 are not included in the
Non-Tariff Income of Supply Business for FY 2017-18 and FY 2018-19.
Commission’s Analysis and Ruling
The Commission has not considered Delayed Payment Charges and Interest on Delayed
Payment received in line with the MYT Regulations, 2015 and as per submission of AEML-
D.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 160 of 445
1.49.2.5 Income from Consumer Charges levied in accordance with Schedule of Charges
AEML-D’s Submission
Vide letter dated 3 May 2018 (Ref. No. RInfra-D/MERC/GST Circular/01), AEML-D had
informed the Commission that the Department of Revenue, Govt. of India has, vide its
Circular No. 34/8/2018-GST, bearing Ref. No. F No. 354/17/2018-TRU, dated 1 March
2018, directed that allied services of transmission and distribution (non-energy receipts
from consumers) are chargeable under GST. AEML-D had further informed the
Commission that it has started charging GST on income from charges recovered under the
Schedule of Charges from consumers, from 1 April 2018 onwards and, since the GST
regime is effective from 1 July 2017, the GST on these charges from 1 July 2017 up to 31
March 2018, shall be recovered from ARR, because it would be very difficult to identify
the beneficiaries. In this regard, the portion of GST of Rs. 0.86 crore paid to Govt. relating
to jobs such as service shifting, etc. which are recovered on actual basis as per Schedule of
Charges, is included in the A&G expenses. Further, GST paid to the Govt. on other incomes
under Schedule of Charges, such as cheque bounce charges, meter testing charges,
connection / reconnection charges, burnt meter recovery charges, open access operating
charges, is reduced from Non-Tariff Income of FY 2017-18 and only the Net Income is
shown in the Petition.
Commission’s Analysis and Ruling
The Commission has considered Income from Consumer Charges levied in accordance with
Schedule of Charges, as per submission of AEML-D, under Non-Tariff Income from
Supply Business.
1.49.2.6 Income from Staff Loans
AEML-D has not included interest on staff loans received in FY 2018-19 in the Non-Tariff
Income for FY 2018-19, as these are loans extended out of the Company’s Regulated
Return, which is the capital available to the Company to invest, extend loans, declare
dividend, etc. Also, no corresponding cost of extending the loans is included in the O&M
expenses. The Commission had also accepted the contention of AEML-D in the MTR Order
in Case No. 200 of 2017 and has not included the interest on staff loans while approving
Non-Tariff Income.
Commission’s Analysis and Ruling
The Commission has not considered Income from Staff Loans under Non-Tariff Income in
accordance with the approach adopted by the Commission in MTR Order. The relevant
extract of the MTR Order is given below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 161 of 445
“Further, in line with methodology followed by the Commission in the Truing up of
FY 2015-16, Interest from Staff Loan has not been included in the Non-Tariff
Income for FY 2016-17…”
The summary of Non-Tariff Income claimed by AEML-D for the Supply Business for FY
2017-18 and FY 2018-19 is as under:
Table 0-117: Non-Tariff Income for Supply Business for FY 2017-18 and FY 2018-
19, as submitted by AEML-D (Rs. Crore)
Particulars
FY 2017-18 FY 2018-19
MTR
Order
True-up
Petition
MTR
Order
True-up
Petition
Income from Investment 1.18 0.88
Income from consumer charges levied in
accordance with Schedule of Charges
4.53
5.77
Income from recovery against theft and/or
pilferage of electricity
15.45
16.65
Other/Miscellaneous receipts 0.83 0.86
Rebate on power purchase 0.15 0.76
Liabilities no longer required written back 12.30 -
Burnt Meter Recovery 1.02 0.88
Delayed Payment Charges - -
Interest on Delayed Payment - -
Profit on Sale of Assets 0.73
Total 35.46 35.46 37.01 26.53
Commission’s Analysis and Ruling
The Commission has approved the Non-Tariff Income for FY 2017-18 and FY 2018-19, as
summarised in the Table below:
Table 0-118: Non-Tariff Income for FY 2017-18 and FY 2018-19 as approved by the
Commission (Rs. Crore)
Particulars
FY 2017-18 FY 2018-19
MTR
Order
True-
up
Petition
Approved
after
truing up
MTR
Order
True-up
Petition
Approved
after
truing up
Wires Business 159.58 159.60 159.60 115.04 123.79 123.79
Supply
Business 35.46 35.46 35.46 37.01 26.53 26.53
Total 195.04 195.06 195.06 152.05 150.32 150.32
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Page 162 of 445
1.50 INCOME FROM OTHER BUSINESS
AEML-D’s Submission
AEML-D submitted that it has considered the rental income of Rs. 0.59 Crore received
from RInfra Corporate for FY 2017-18, two third of which is considered as Other Business
Income in accordance with the MYT Regulations, 2015. In FY 2018-19, no income towards
rent from RInfra-Corporate for occupancy of Devidas Lane Office was booked as the
premises were vacated.
Reliance Communication (RCOM) is utilizing rooftops of some of the receiving stations of
AEML-D by installing its BTS (Telecom) Towers. Two third of the total of actual rental
income in FY 2017-18 and FY 2018-19 from RCOM towers has been considered as Other
Business Income in accordance with the MYT Regulations, 2015.
There was an arrangement between RInfra-D and RInfra-Corporate in FY 2016-17 for
payment of rent by RInfra-Corporate to RInfra-D for occupancy of corporate employees at
Santacruz. For the period before the transfer of business, i.e., from 01.04.2018 to
28.08.2018, rent receivable from RInfra Corporate has been considered for the purpose of
truing-up. As the property is not transferred to AEML-D, no rental income for the period
thereafter has been considered. In the MTR Order, the Commission has also acknowledged
that rent from the property shall not be received for the whole of FY 2018-19.
Two third of the actual rent received from erstwhile RInfra-Corporate has been considered
as Other Business Income in accordance with the MYT Regulations, 2015.
An agreement has been made between REGSL (AEML-D) and RCOM on 28 August 2018
through which RCOM has been using the optic fibre network of AEML-D for providing
the backup path for its network. The rent received from RCOM for usage of optic fibre
network has been considered as income from other business and two third of the rent has
been considered for reduction from ARR.
The summary of Other Business Income for FY 2017-18 and FY 2018-19 is shown in the
Table below:
Table 0-119: Income from Other Business for FY 2017-18 as submitted by AEML-D
(Rs. Crore)
Particulars MTR Order True-up Petition
Rent from Devidas Lane Office 0.39 0.39
Rental Income from RCOM 0.58 0.58
Rental Income from Santacruz Property 25.00 25.00
Total 25.98 25.98
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Page 163 of 445
Table 0-120: Income from Other Business for FY 2018-19 as submitted by AEML-D
(Rs. Crore)
Particulars MTR Order True-up Petition
Rental Income for BTS tower business 0.58 0.69
Rental Income for optic fiber business 0 0.12
Rental Income from Santacruz Property 25.00 10.27
Total 25.58 11.08
Commission’s Analysis and Ruling
The Commission has considered two third of the actual Income from Other Business as
submitted by AEML-D in line with the MYT Regulations, 2015, as shown in the Table
below:
Table 0-121: Income from Other Business for FY 2017-18 as approved by the
Commission (Rs. Crore)
Particulars MTR Order True-up
Petition
Approved after
truing up
Rent from Devidas Lane Office 0.39 0.39 0.39
Rental Income from RCOM 0.58 0.58 0.58
Rental Income from Santacruz
Property 25.00 25.00 25.00
Total 25.98 25.98 25.98
Table 0-122: Income from Other Business for FY 2018-19 as approved by the
Commission (Rs. Crore)
Particulars MTR Order True-up
Petition
Approved after
truing up
Rental Income for BTS tower business 0.58 0.69 0.69
Rental Income for optic fiber business 0 0.12 0.12
Rental Income from Santacruz
Property 25.00 10.27 10.27
Total 25.58 11.08 11.08
1.51 EFFICIENCY GAIN/ (LOSS) FOR FY 2017-18 and FY 2018-19
1.51.1 Efficiency Gains due to overachievement of Distribution Losses
AEML-D’s Submission
AEML-D submitted that the Distribution Loss for FY 2017-18 has been 8.153%, against
the target of 8.86% approved by the Commission in AEML-D’s MTR Order in Case No.
200 of 2017. AEML-D has achieved a reduction of 0.707% over and above the target.
AEML-D is, therefore, entitled to claim Efficiency Gains for its efforts on loss reduction,
as under:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 164 of 445
Table 0-123: Efficiency Gains due to Overachievement in Distribution Losses for FY
2017-18 as submitted by AEML-D
Particulars UoM True-up Petition
Target Loss % 8.860%
Actual Losses % 8.153%
Difference % -0.707%
Input to Distribution System (Actual) MU 11,151.99
Sales @target loss level MU 10,163.92
Less: Change-over sales & OA sales MU 1,910.51
Net energy sales @ target loss level MU 8,253.41
Sales (Actual) MU 8,332.30
Increase in Sales - A MU 78.88
ABR (Average Billing Rate) - B Rs/kWh 8.62
Efficiency (Gains)/Losses Rs. Crore (67.97)
(Gains)/Losses to be passed on to the
consumers Rs. Crore
(45.31)
(Gains)/Losses to be
retained/absorbed by AEML-D Rs. Crore (22.66)
Similarly, for FY 2018-19, AEML-D submitted that the Distribution Loss has been 7.848%,
against the target of 8.61% approved by the Commission in AEML-D’s MTR Order in Case
No. 200 of 2017. AEML-D has achieved a reduction of 0.762% over and above the target.
AEML-D is, therefore, entitled to claim Efficiency Gains for its efforts on loss reduction,
as under:
Table 0-124: Efficiency Gains due to Overachievement in Distribution Losses for FY
2018-19 as submitted by AEML-D
Particulars UoM True-up Petition
Target Loss % 8.610%
Actual Losses % 7.848%
Difference % -0.762%
Input to Distribution System (Actual) MU 11,034.78
Sales @target loss level MU 10,084.68
Less: Change-over sales & OA sales MU 10,403.98
Net energy sales @ target loss level MU (319.30)
Sales (Actual) MU (235.25)
Increase in Sales – A MU 84.05
ABR (Average Billing Rate) - B Rs/kWh 8.98
Efficiency (Gains)/Losses Rs. Crore (75.49)
(Gains)/Losses to be passed on to the consumers Rs. Crore (50.33)
(Gains)/Losses to be retained/absorbed by
AEML-D Rs. Crore (25.16)
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 165 of 445
Commission’s Analysis and Ruling
The Commission has considered Distribution Loss as a controllable parameter, in
accordance with the MYT Regulations, 2015. As the computation of Distribution Losses
for FY 2017-18 and FY 2018-19 shows that the actual losses are lesser than the normative
losses, the Commission has computed the Efficiency Gain on this account considering the
target Distribution Loss in the MYT Order.
The sharing of Efficiency Gains on account of lower Distribution Loss has been computed
considering the difference in actual power purchase quantum and expected power purchase
quantum with target distribution loss. The approach to computation of gains/losses on this
account has been modified from considering additional/lower revenue to additional/lower
power purchase, as AEML-D is already selling all the power that it possibly can, and there
is no load shedding also in Mumbai. Hence, the impact of the lower Distribution Losses
would translate to lower power purchase quantum rather than additional sales revenue.
The average power purchase cost approved by the Commission for the respective year has
been considered for computing the Efficiency Gain. The sharing of Efficiency Gain on
account of lower than target Distribution Loss for FY 2017-18 and FY 2018-19 is shown
in the following Table:
Table 0-125: Sharing of Efficiency Gain on account of lower than target Distribution
Loss for FY 2017-18, as approved by Commission
Particulars UoM True-up
Petition
Approved after
truing up
Target Loss % 8.860% 8.86%
Actual Losses % 8.153% 8.16%
Difference % -0.707% -0.70%
Input to Distribution System (Actual) MU 11,151.99
Sales @target loss level MU 10,163.92
Less: Change-over sales & OA sales MU 1,910.51
Net energy sales @ target loss level MU 8,253.41
Sales (Actual) MU 8,332.30 8,332.30
Increase in Sales MU 78.88
Target Power Purchase MU 9,142.30
Actual Power Purchase MU 9,082.42
Increase/(Reduction) in Power Purchase MU (59.88)
ABR (Average Billing Rate) Rs/kWh 8.62
Average Power Purchase Rate Rs/kWh 4.35
Efficiency (Gains)/Losses Rs. Crore (67.97) (26.04)
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 166 of 445
Particulars UoM True-up
Petition
Approved after
truing up
(Gains)/Losses to be passed on to the
consumers Rs. Crore (45.31) (17.36)
(Gains)/Losses to be retained/absorbed
by AEML-D Rs. Crore (22.66) (8.68)
Table 0-126: Sharing of Efficiency Gain on account of lower than target Distribution
Loss for FY 2018-19, as approved by Commission
Particulars UoM True-up
Petition
Approved after
truing up
Target Loss % 8.61% 8.61%
Actual Losses % 7.85% 7.84%
Difference % -0.76% -0.77%
Input to Distribution System (Actual) MU 11034.78
Sales @target loss level MU 10084.68
Less: Change-over sales & OA sales MU 1807.13
Net energy sales @ target loss level MU 8277.55
Sales (Actual) MU 8361.60 8,361.60
Increase in Sales MU 84.05
Target Power Purchase MU 9,149.36
Actual Power Purchase MU 9,081.76
Increase/(Reduction) in Power Purchase MU (67.60)
ABR (Average Billing Rate) Rs/kWh 8.98
Average Power Purchase Rate Rs/kWh 3.96
Efficiency (Gains)/Losses Rs. Crore (75.49) (26.77)
(Gains)/Losses to be passed on to the
consumers Rs. Crore (50.33) (17.85)
(Gains)/Losses to be retained/absorbed
by AEML-D Rs. Crore (25.16) (8.92)
1.51.2 Efficiency Gain/Loss on O&M Expenses
AEML-D’s Submission
AEML-D submitted that the actual O&M expenses in FY 2017-18 and FY 2018-19 were
lower than normative O&M expenses allowable at the time of truing up. AEML-D has
calculated the net entitlement after reducing the uncontrollable expenses from the actual
O&M expenses, as shown in the Tables below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 167 of 445
Table 0-127: Sharing of Efficiency (Gains)/Loss on deviation in O&M Expenses for
FY 2017-18 as submitted by AEML-D (Rs. Crore)
Particulars Allowable
O&M Expenses
for FY 2017-18
Actuals Deviation 1/3rd Efficiency
(Gains)/
Loss
Net Entitlement of
O&M Expenses for
FY 2017-18
Total O&M
Expenses 1,195.85 1,165.97 (29.98) (9.96) 1,175.93
Table 0-128: Sharing of Efficiency (Gains)/Loss on deviation in O&M Expenses for
FY 2018-19 as submitted by AEML-D (Rs. Crore)
Particulars Allowable
O&M Expenses
for FY 2017-18
Actuals Deviation 1/3rd Efficiency
(Gains)/
Loss
Net Entitlement of
O&M Expenses for
FY 2017-18
Total O&M
Expenses 1,260.07 1,258.15 (1.92) (0.64) 1,258.57
Commission’s Analysis and Ruling
As already mentioned earlier in this Chapter, the Commission has followed the
methodology adopted by it in the MTR Order and allowed the component-wise O&M
Expenses, and has accordingly computed the Gain / Loss on account of O&M Expenses as
shown in the Table below:
Table 0-129: Sharing of Efficiency (Gains)/Loss on deviation in O&M Expenses for
FY 2017-18, as approved by the Commission (Rs. Crore)
Particulars
Allowable
expenses
approved in
this Order
Actual (Gain)/
Loss
Shared
with
consumers
(Retained)/
Borne by
AEML-D
Net
Entitlement
Wires
Business 801.46 759.82 (41.64) (13.88) (27.76) 773.70
Supply
Business 395.36 365.97 (29.39) (9.80) (19.59) 375.77
Wires +
Supply 1,196.81 1,125.79 (71.02) (23.67) (47.35) 1,149.46
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 168 of 445
Table 0-130: Sharing of Efficiency (Gains)/Loss on deviation in O&M Expenses for
FY 2018-19, as approved by Commission (Rs. Crore)
Particulars
Allowable
expenses
approved in
this Order
Actual (Gain)/
Loss
Shared
with
consumers
(Retained)/
Borne by
AEML-D
Net
Entitlement
Wires
Business 828.55 834.57 6.02 2.01 4.01 830.56
Supply
Business 407.18 407.84 0.66 0.22 0.44 407.40
Wires +
Supply 1,235.73 1,242.41 6.68 2.23 4.45 1,237.96
1.51.3 Efficiency Gain/Loss on Interest on Working Capital
AEML-D’s Submission
AEML-D has claimed the net entitlement in interest on working capital, as per the
Commission’s philosophy in the MTR Order in Case No. 200 of 2017, without prejudice to
the contentions it has raised in the Appeal against the MTR Order. The sharing of efficiency
gains/losses as submitted by AEML-D for FY 2017-18 and FY 2018-19, is shown in the
Tables below:
Table 0-131: Sharing of Gain/Loss on Interest on Working Capital for FY 2017-18 as
submitted by AEML-D (Rs. Crore)
Particulars Wires Supply Total
Normative IoWC 31.73 3.85 35.58
Actual IoWC 0 0 0
Net Entitlement 10.58 1.28 11.86
Table 0-132: Sharing of Gain/Loss on Interest on Working Capital for FY 2018-19 as
submitted by AEML-D (Rs. Crore)
Particulars Wires Supply Total
Normative IoWC 31.79 10.42 42.21
Actual IoWC 16.06 5.26 21.32
Net Entitlement 21.30 6.98 63.53
Commission’s Analysis and Ruling
AEML-D has submitted actual Interest on Working Capital (IoWC) as zero for FY 2017-
18. The Commission has accordingly worked out Sharing of Gains/(Losses) on IoWC for
FY 2017-18 in line with the MYT Regulations, 2015.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 169 of 445
For FY 2018-19, AEML-D submitted actual Interest on Working Capital of Rs. 16.06 crore
for Wires Business and Rs. 5.26 Crore for Supply Business. Regulation 31.6 provides for
receipt of Delayed Payment Charges and interest on Delayed Payment Charges to be
adjusted in actual IoWC for carrying out Sharing of Gains/(Losses). The relevant extract is
as follows.
“31.6 For the purpose of Truing-up for each year, the variation between the
normative interest on working capital computed at the time of Truing-up and the
actual interest on working capital incurred by the Generating Company or Licensee
or MSLDC, substantiated by documentary evidence, shall be considered as an
efficiency gain or efficiency loss, as the case may be, on account of controllable
factors, and shared between it and the respective Beneficiary or consumer as the
case may be, in accordance with Regulation 11:
Provided that the contribution of delay in receipt of payment to the actual interest
on working capital shall be deducted from the actual interest on working capital,
before sharing of the efficiency gain or efficiency loss, as the case may
be”(emphasis added)
In line with the above Regulations, the Commission has adjusted the Delayed Payment
Charges and interest on Delayed Payment Charges of Rs. 42.98 Crore (Rs. 26.30 Crore
+Rs. 16.68 Crore) as reflecting in Note 21 of audited accounts of FY 2018-19 against actual
IoWC of Rs. 21.32 Crore (Rs. 16.06 for Wires and Rs. 5.26 for Supply). The net actual
IOWC thus, works out to be negative, and is hence, considered to be zero for FY 2018-19.
The Commission has worked out Sharing of Gains on account of savings in Interest on
Working Capital in line with Regulation 11.1 of the MYT Regulations, 2015 as shown in
the following Table:
Table 0-133: Sharing of Gain/Loss on Interest on Working Capital for FY 2017-18 as
approved by the Commission (Rs. Crore)
Particulars Wires Supply Total
Normative IoWC 31.13 3.49 34.63
Actual IoWC 0 0 0
Net Entitlement 10.38 1.16 11.54
Table 0-134: Sharing of Gain/Loss on Interest on Working Capital for FY 2018-19 as
approved by the Commission (Rs. Crore)
Particulars Wires Supply Total
Normative IoWC 31.27 10.28 41.55
Actual IoWC 0 0 0
Net Entitlement 10.42 3.43 13.85
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 170 of 445
1.52 SUMMARY OF AGGREGATE REVENUE REQUIREMENT
AEML-D’s Submission
The summary of the ARR for the Wires Business for FY 2017-18 and FY 2018-19 is as
shown in the Tables below:
Table 0-135: ARR of Wires Business for FY 2017-18 as submitted by AEML-D (Rs.
Crore)
Particulars MTR Order True-up
Petition
Net entitlement
Operation & Maintenance
Expenses 810.80 784.22 789.75
Uncontrollable Expense - GST
Impact on taxes in FY 18 0 6.32 6.32
Uncontrollable Expense - GST
Impact on SoC for FY 18 0 0.56 0.56
Access charges paid to MMRDA 0 0.10 0.10
Depreciation 214.36 220.44 220.44
Interest on Loan Capital 159.27 159.14 159.14
Interest on Working Capital 31.85 31.73 10.58
Provision for bad and doubtful
debts 2.61 2.62 2.62
Contribution to contingency
reserves 13.19 13.19 13.19
Income Tax 62.61 105.49 105.49
Total Revenue Expenditure 1,294.69 1,323.81 1,308.18
Add: Return on Equity Capital 297.59 298.58 298.58
Aggregate Revenue
Requirement 1,592.28 1,622.39 1,606.76
Less: Non-Tariff Income 159.58 159.60 159.60
Less: Income from other business 25.98 25.98 25.98
Net Aggregate Revenue
Requirement 1,406.72 1,436.81 1,421.19
Table 0-136: ARR of Wires Business for FY 2018-19 as submitted by AEML-D (Rs.
Crore)
Particulars MTR Order True-up Petition
O&M Expenses - Net Entitlement 851.79 842.08
Uncontrollable Expense - GST Impact on taxes in
FY 19 0 8.04
Access charges paid to MMRDA 0 0.81
Way leave charges paid to Western railways 0 2.36
Depreciation 228.23 236.26
Interest on Loan Capital 153.93 151.63
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 171 of 445
Particulars MTR Order True-up Petition
Other Charges 0 0.63
Refinancing Cost 0 107.41
PV of Interest cost saving 0 8.13
Interest on Working Capital - Net Entitlement 30.11 21.30
Provision for bad and doubtful debts 2.61 3.37
Contribution to contingency reserves 13.93 13.98
Income Tax 62.61 84.73
Total Revenue Expenditure 1,343.22 1,480.73
Add: Return on Equity Capital 309.08 314.04
Aggregate Revenue Requirement 1,652.30 1,794.77
Less: Non-Tariff Income 115.04 123.79
Less: Income from other business 25.58 11.08
Net Aggregate Revenue Requirement 1,511.68 1,659.90
The following Tables gives the summary of the ARR for the Supply Business of AEML-D
for FY 2017- 18 and FY 2018-19:
Table 0-137: ARR for Supply Business in FY 2017-18 as submitted by AEML-D (Rs.
Crore)
Particulars MTR Order True-up
Petition
Net entitlement
Power Purchase Expenses
(including Inter-State Transmission
Charges)
4,336.58 4,256.35 4,256.35
Operation & Maintenance Expenses 399.99 381.75 386.18
Uncontrollable Expense - GST
Impact on taxes in FY 18 0 1.50 1.50
Uncontrollable Expense - GST
Impact on SoC for FY 18 0 0.30 0.30
Depreciation 21.20 23.40 23.40
Interest on Loan Capital 9.45 9.31 9.31
Interest on Working Capital 2.98 3.85 1.28
Interest on deposit from Consumers
and Distribution System Users 36.29 36.29 36.29
Provision for bad and doubtful
debts 9.13 9.12 9.12
Contribution to contingency
reserves 1.27 1.26 1.26
Intra-State Transmission Charges 402.00 402.00 402.00
MSLDC Fees & Charges 1.30 1.30 1.30
Income Tax 191.84 238.45 238.45
Total Revenue Expenditure 5,412.00 5,364.89 5,366.75
Add: Return on Equity Capital 27.47 27.84 27.84
Aggregate Revenue Requirement 5,439.47 5,392.73 5,394.60
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 172 of 445
Particulars MTR Order True-up
Petition
Net entitlement
Less: Non-Tariff Income 35.46 35.46 35.46
Less: Income from other business 0 0 0
Add: Efficiency Gain/(Loss) - Dist
Loss 0 22.66 22.66
Net Aggregate Revenue
Requirement 5,404.04 5,379.93 5,381.80
Table 0-138: ARR for Supply Business in FY 2018-19 as submitted by AEML-D (Rs.
Crore)
Particulars / (Rs. Crore) MTR Order True-up
Petition
Power Purchase Expenses (including Inter-State
Transmission Charges) 4,262.46 3,888.04
O&M Expenses - Net Entitlement 420.22 416.49
Uncontrollable Expense - GST Impact on taxes in FY
19 0 2.10
Depreciation 22.12 25.59
Interest on Loan Capital 9.23 7.67
Other Charges 0 0.03
Refinancing Cost 0 4.89
PV of Interest cost saving 0 0.75
Interest on Working Capital - Net Entitlement 4.63 6.98
Interest on deposit from Consumers and Distribution
System Users 39.30 38.50
Provision for bad and doubtful debts 9.13 12.62
Contribution to contingency reserves 1.28 1.27
Intra-State Transmission Charges 358.49 391.19
MSLDC Fees & Charges 1.18 1.23
DSM Expense 2.22 0
Income Tax 191.84 480.85
Total Revenue Expenditure 5,322.10 5,278.19
Add: Return on Equity Capital 28.64 27.98
Aggregate Revenue Requirement 5,350.73 5,306.16
Less: Non-Tariff Income 37.01 26.53
Less: Income from other business 0 0
Add: Efficiency Gain/(Loss) - Dist Loss 0 25.16
Net Aggregate Revenue Requirement 5,313.72 5,304.79
The summary of the ARR for the combined Wires Business and Supply Business for FY
2017-18 and FY 2018-19 is as shown in the Tables below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 173 of 445
Table 0-139: Combined ARR for Wires Business and Supply Business in FY 2017-18
as submitted by AEML-D (Rs. Crore)
Particulars MTR Order True-up Petition Net entitlement
Power Purchase Expenses (including Inter-
State Transmission Charges) 4,336.58 4,256.35 4,256.35
Operation & Maintenance Expenses 1,210.79 1,165.97 1,175.93
Uncontrollable Expense - GST
Impact on taxes in FY 18 0 7.82 7.82
Uncontrollable Expense - GST Impact on
SoC for FY 18 0 0.86 0.86
Access charges paid to MMRDA 0 0.10 0.10
Depreciation 235.56 243.84 243.84
Interest on Loan Capital 168.72 168.45 168.45
Interest on Working Capital 34.83 35.58 11.86
Interest on deposit from Consumers and
Distribution System Users 36.29 36.29 36.29
Provision for bad and doubtful debts 11.74 11.74 11.74
Contribution to contingency reserves 14.45 14.45 14.45
Intra-State Transmission Charges 402.00 402.00 402.00
MSLDC Fees & Charges 1.30 1.30 1.30
Income Tax 254.45 343.94 343.94
Total Revenue Expenditure 6,706.72 6,688.70 6,674.94
Add: Return on Equity Capital 325.06 326.42 326.42
Aggregate Revenue Requirement 7,031.78 7,015.12 7,001.36
Less: Non-Tariff Income 195.04 195.06 195.06
Less: Income from other business 25.98 25.98 25.98
Add: Efficiency Gain/(Loss) - Dist Loss 0 22.66 22.66
Net Aggregate Revenue Requirement 6,810.76 6,816.74 6,802.98
Table 0-140: Combined ARR for Wires Business and Supply Business in FY 2018-19
as submitted by AEML-D (Rs. Crore)
Particulars MTR Order True-up Petition
Power Purchase Expenses (including Inter-
State Transmission Charges) 4,262.46 3,888.04
O&M Expenses - Net Entitlement 1,272.01 1,258.57
Uncontrollable Expense - GST Impact
on taxes in FY 19 0 10.14
Access charges paid to MMRDA 0 0.81
Way leave charges paid to Western railways 0 2.36
Depreciation 250.35 261.86
Interest on Loan Capital 163.16 159.30
Other Charges 0 0.66
Refinancing Cost 0 112.30
PV of Interest cost saving 0 8.88
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 174 of 445
Particulars MTR Order True-up Petition
Interest on Working Capital - Net
Entitlement 34.74 28.28
Interest on deposit from Consumers and
Distribution System Users 39.30 38.50
Provision for bad and doubtful debts 11.74 15.99
Contribution to contingency reserves 15.21 15.25
Intra-State Transmission Charges 358.49 391.19
MSLDC Fees & Charges 1.18 1.23
DSM Expense 2.22 0
Income Tax 254.45 565.57
Total Revenue Expenditure 6,665.31 6,758.92
Add: Return on Equity Capital 337.72 342.01
Aggregate Revenue Requirement 7,003.03 7,100.93
Less: Non-Tariff Income 152.05 150.32
Less: Income from other business 25.58 11.08
Add: Efficiency Gain/(Loss) - Dist Loss 0 25.16
Net Aggregate Revenue Requirement 6,825.40 6,964.70
Commission’s Analysis and Ruling
Based on the components as approved in the above paragraphs, the Commission has
approved the ARR for Wires Business and Supply Business for FY 2017-18 and FY 2018-
19, as shown in the Tables below:
Table 0-141: ARR for Wires Business for FY 2017-18 as approved by Commission
(Rs. Crore)
Particulars MTR Order True-up
Petition
Approved
after truing up
O&M Expenses 810.80 796.73 773.70
Depreciation 214.36 220.44 219.95
Interest on Loan Capital 159.27 159.14 156.14
Interest on Working Capital 31.85 31.73 10.38
Provision for bad and doubtful debts 2.61 2.62 2.62
Contribution to contingency reserves 13.19 13.19 13.18
Income Tax 62.61 105.49 106.34
Total Revenue Expenditure 1,294.69 1,323.81 1,282.31
Add: Return on Equity Capital 297.59 298.58 298.08
Aggregate Revenue Requirement 1,592.28 1,622.39 1,580.39
Less: Non-Tariff Income 159.58 159.60 159.60
Less: Income from other business 25.98 25.98 25.98
Net Aggregate Revenue
Requirement 1,406.72 1,436.81 1,394.81
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 175 of 445
Table 0-142: ARR for Wires Business for FY 2018-19 as approved by Commission
(Rs. Crore)
Particulars MTR
Order
True-up
Petition
Approved after
truing up
O&M Expenses - Net Entitlement 851.79 853.29 830.56
Depreciation 228.23 236.26 235.07
Interest on Loan Capital 153.93 151.63 148.59
Other Charges 0 0.63 -
Refinancing Cost 0 107.41 24.07
PV of Interest cost saving 0 8.13 4.78
Interest on Working Capital - Net Entitlement 30.11 21.30 10.42
Provision for bad and doubtful debts 2.61 3.37 3.37
Contribution to contingency reserves 13.93 13.98 13.92
Income Tax 62.61 84.73 89.34
Total Revenue Expenditure 1,343.22 1,480.73 1,360.12
Add: Return on Equity Capital 309.08 314.04 312.65
Aggregate Revenue Requirement 1,652.30 1,794.77 1,672.77
Less: Non-Tariff Income 115.04 123.79 123.79
Less: Income from other business 25.58 11.08 11.08
Net Aggregate Revenue Requirement 1,511.68 1,659.90 1,537.90
Table 0-143: ARR for Supply Business for FY 2017-18 as approved by Commission
(Rs. Crore)
Particulars MTR
Order
True-up
Petition
Approved after
truing up
Power Purchase Expenses (including Inter-
State Transmission Charges) 4,336.58 4,256.35 4,256.30
Operation & Maintenance Expenses 399.99 387.98 375.77
Depreciation 21.20 23.40 23.12
Interest on Loan Capital 9.45 9.31 9.19
Interest on Working Capital 2.98 1.28 1.16
Interest on deposit from Consumers and
Distribution System Users 36.29 36.29 36.29
Provision for bad and doubtful debts 9.13 9.12 9.12
Contribution to contingency reserves 1.27 1.26 1.27
Intra-State Transmission Charges 402.00 402.00 402.00
MSLDC Fees & Charges 1.30 1.30 1.30
Income Tax 191.84 238.45 240.37
Total Revenue Expenditure 5,412.00 5,366.74 5,355.90
Add: Return on Equity Capital 27.47 27.84 27.84
Aggregate Revenue Requirement 5,439.47 5,394.59 5,383.74
Less: Non-Tariff Income 35.46 35.46 35.46
Less: Income from other business 0 0 0
Add: Efficiency Gain/(Loss) - Dist Loss 0 22.66 8.68
Net Aggregate Revenue Requirement 5,404.04 5,381.79 5,356.96
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 176 of 445
Table 0-144: ARR for Supply Business for FY 2018-19 as approved by Commission
(Rs. Crore)
Particulars / (Rs. Crore) MTR Order True-up
Petition
Approved after
truing up
Power Purchase Expenses (including Inter-State
Transmission Charges) 4,262.46 3,888.04 3,887.05
O&M Expenses - Net Entitlement 420.22 418.59 407.40
Depreciation 22.12 25.59 25.65
Interest on Loan Capital 9.23 7.67 7.64
Other Charges 0 0.03 -
Refinancing Cost 0 4.89 -
PV of Interest cost saving 0 0.75 -
Interest on Working Capital - Net Entitlement 4.63 6.98 3.43
Interest on deposit from Consumers and
Distribution System Users 39.30 38.50 38.50
Provision for bad and doubtful debts 9.13 12.62 12.62
Contribution to contingency reserves 1.28 1.27 1.27
Intra-State Transmission Charges 358.49 391.19 391.19
MSLDC Fees & Charges 1.18 1.23 1.23
DSM Expense 2.22 0
Income Tax 191.84 480.85 507.03
Total Revenue Expenditure 5,322.10 5,278.19 5,282.99
Add: Return on Equity Capital 28.64 27.98 27.98
Aggregate Revenue Requirement 5,350.73 5,306.16 5,310.97
Less: Non-Tariff Income 37.01 26.53 26.53
Less: Income from other business 0 0 0
Add: Efficiency Gain/(Loss) - Dist Loss 0 25.16 8.92
Net Aggregate Revenue Requirement 5,313.72 5,304.79 5,293.36
Table 0-145: Combined ARR for Wires and Supply Business for FY 2017-18 as
approved by the Commission (Rs. Crore)
Particulars MTR
Order
True-up
Petition
Approved after
truing up
Power Purchase Expenses (including
Inter-State Transmission Charges) 4,336.58 4,256.35 4,256.30
Operation & Maintenance Expenses 1,210.79 1,184.71 1,149.46
Depreciation 235.56 243.84 243.07
Interest on Loan Capital 168.72 168.45 165.34
Interest on Working Capital 34.83 11.86 11.54
Interest on deposit from Consumers
and Distribution System Users 36.29 36.29 36.29
Provision for bad and doubtful debts 11.74 11.74 11.74
Contribution to contingency reserves 14.45 14.45 14.45
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 177 of 445
Particulars MTR
Order
True-up
Petition
Approved after
truing up
Intra-State Transmission Charges 402.00 402.00 402.00
MSLDC Fees & Charges 1.30 1.30 1.30
Income Tax 254.45 343.94 346.72
Total Revenue Expenditure 6,706.72 6,674.93 6,638.21
Add: Return on Equity Capital 325.06 326.42 325.92
Aggregate Revenue Requirement 7,031.78 7,001.35 6,964.13
Less: Non-Tariff Income 195.04 195.06 195.06
Less: Income from other business 25.98 25.98 25.98
Add: Efficiency Gain/(Loss) - Dist
Loss 0 22.66 8.68
Net Aggregate Revenue
Requirement 6,810.76 6,802.98
6,751.78
Table 0-146: Combined ARR for Wires and Supply Business for FY 2018-19 as
approved by Commission (Rs. Crore)
Particulars MTR
Order
True-up
Petition
Approved after
truing up
Power Purchase Expenses (including Inter-
State Transmission Charges) 4,262.46 3,888.04 3,887.05
O&M Expenses - Net Entitlement 1,272.01 1,271.88 1,237.96
Depreciation 250.35 261.86 260.72
Interest on Loan Capital 163.16 159.30 156.22
Other Charges 0 0.66 -
Refinancing Cost 0 112.30 24.07
PV of Interest cost saving 0 8.88 4.78
Interest on Working Capital - Net
Entitlement 34.74 28.28 13.85
Interest on deposit from Consumers and
Distribution System Users 39.30 38.50 38.50
Provision for bad and doubtful debts 11.74 15.99 15.99
Contribution to contingency reserves 15.21 15.25 15.19
Intra-State Transmission Charges 358.49 391.19 391.19
MSLDC Fees & Charges 1.18 1.23 1.23
DSM Expense 2.22 0 0
Income Tax 254.45 565.57 596.37
Total Revenue Expenditure 6,665.31 6,758.92 6,643.11
Add: Return on Equity Capital 337.72 342.01 340.63
Aggregate Revenue Requirement 7,003.03 7,100.94 6,983.73
Less: Non-Tariff Income 152.05 150.32 150.32
Less: Income from other business 25.58 11.08 11.08
Add: Efficiency Gain/(Loss) - Dist Loss 0 25.16 8.92
Net Aggregate Revenue Requirement 6,825.40 6,964.70 6,831.26
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 178 of 445
1.53 REVENUE
AEML-D’s Submission
For FY 2017-18, AEML-D has charged tariffs as approved in AEML-D’s MYT Order in
Case No. 34 of 2016. The revenue [excluding Regulatory Asset (RA) recovery] earned from
sales of energy and FAC charged to the consumers in FY 2017-18 is Rs. 6,448.92 Crore.
The Commission had approved Rs 6,447.33 Crore as revenue from sales in AEML-D’s
MTR Order in Case No. 200 of 2017, based on provisional submissions of AEML-D.
Table 0-147: Revenue from Sales (excluding RA) submitted by AEML-D for FY
2017-18
Particulars MTR Order True-up Petition
Revenue (Rs. Crore) 6,447.33 6,448.92
Own Sales (MU) 8,321.05 8,332.30
ABR (Rs. /kWh) 7.75 7.74
The Commission, in AEML-D’s MYT Order (Case No. 9 of 2013), had directed AEML-D
to separately account for RA recovery. Accordingly, the revenue received though
Regulatory Asset Charges (RAC) from own consumers is not included in the revenue shown
in the above Table.
From April 2018 to August 2018, AEML-D has charged tariffs as approved for FY 2018-
19 in AEML-D’s MYT Order dated 21 October 2016 in Case No. 34 of 2016. From
September 2018 to March 2019, AEML-D has charged tariffs as approved in AEML-D’s
MTR Order (Case No. 200 of 2017). The revenue (excluding RA recovery) earned from
sales of energy to the consumers in FY 2018-19 is shown in the Table below:
Table 0-148: Revenue from Sales (excluding RA) submitted by AEML-D for FY
2018-19
Particulars MTR Order True-up Petition
Revenue (Rs. Crore) 7008.88 7009.04
Own Sales (MU) 8579.21 8361.60
ABR (Rs. /kWh) 8.17 8.38
The Commission, in AEML-D’s MYT Order (Case No. 9 of 2013), had directed AEML-D
to separately account for RA recovery. Accordingly, the revenue received though RAC
from own consumers is not included in the revenue shown in the above Table.
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Commission’s Analysis and Ruling
The Commission asked for the audited Reconciliation Statement showing income and
expenses and their allocation to generation, transmission and distribution businesses of
AEML. From the Reconciliation Statement, the Commission has verified the revenue from
sale of power.
The Commission has accepted the submission of AEML-D regarding revenue from
assessed sales. Accordingly, it has not been considered as part of revenue, since it is
included in Non-Tariff Income.
Accordingly, the Commission approves the actual total revenue from sale of electricity to
own consumers, as shown in the Table below:
Table 0-149: Revenue and Average Billing Rate for FY 2017-18 as approved by
Commission (Rs. Crore)
Particulars MTR Order True-up Petition Approved after
truing up
Revenue (Rs. Crore) 6,447.33 6,448.92 6,448.92
Own Sales (MU) 8,321.05 8,332.30 8,332.30
ABR (Rs. /kWh) 7.75 7.74 7.74
Table 0-150: Revenue and Average Billing Rate for FY 2018-19 as approved by
Commission (Rs. Crore)
Particulars MTR Order True-up Petition Approved after
truing up
Revenue (Rs. Crore) 7,008.88 7,009.04 7,009.04
Own Sales (MU) 8,579.21 8,361.60 8,361.60
ABR (Rs. /kWh) 8.17 8.38 8.38
1.54 REVENUE FROM WHEELING CHARGES FROM CHANGE-OVER AND
OPEN ACCESS CONSUMERS
AEML-D’s Submission
The revenue earned from Wheeling Charges in FY 2017-18 paid by Change-over
consumers and OA consumers is Rs. 285.59 Crore. The Commission, in AEML-D’s MTR
Order (Case 200 of 2017), had provisionally approved revenue from Wheeling Charges of
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Rs. 283.83 Crore, considering the provisional figures provided by AEML-D. The details of
revenue from Wheeling Charges are as under:
Table 0-151: Wheeling Revenue from Change-over and OA Consumers in FY 2017-
18 as submitted by AEML-D (Rs. Crore)
Particulars MTR
Order AEML-D
Petition Revenue from Wheeling Charges from Change-over &
OA Consumers 283.83 285.59
The revenue earned from Wheeling Charges in FY 2018-19, paid by Change-over
consumers and OA consumers is Rs. 274.64 Crore. The Commission, in AEML-D’s MTR
Order (Case 200 of 2017), had approved revenue from Wheeling Charges of Rs. 299.87
Crore. The details of revenue from Wheeling Charges are as under:
Table 0-152: Wheeling Revenue from Change-over and OA Consumers in FY 2018-
19 as submitted by AEML-D (Rs. Crore)
Particulars MTR
Order AEML-D
Petition Revenue from Wheeling Charges from Change-over &
OA Consumers 299.87 274.64
Reduction in revenue from Wheeling Charges vis-à-vis the MTR Order is on account of
lower network sales and is hence, uncontrollable.
Commission’s Analysis and Ruling
The Commission has approved the actual revenue from Wheeling Charges from change-
over and OA consumers as submitted by AEML-D, as shown in the following Table:
Table 0-153: Wheeling Revenue from Change-over and OA Consumers in FY 2017-
18 as approved by Commission (Rs. Crore)
Particulars MTR
Order AEML-D
Petition Approved after
truing up
Revenue from Wheeling Charges from
Changeover & OA Consumers 283.83 285.59 285.59
Table 0-154: Wheeling Revenue from Change-over and OA Consumers in FY 2018-
19 as approved by Commission (Rs. Crore)
Particulars MTR
Order AEML-D
Petition Approved after
truing up
Revenue from Wheeling Charges from
Changeover & OA Consumers 299.87 274.64 274.64
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1.55 REVENUE FROM CROSS-SUBSIDY SURCHARGE FROM OA
CONSUMERS
AEML-D’s Submission
The revenue earned from CSS in FY 2017-18, paid by Change-over consumers and OA
consumers is Rs. 161.76 Crore. The Commission, in AEML-D’s MTR Order (Case No. 200
of 2017), had provisionally approved revenue from CSS of Rs. 162.17 Crore, considering
the provisional figures provided by AEML-D. The details of revenue from CSS are as
below:
Table 0-155: Revenue from CSS in FY 2017-18 as submitted by AEML-D (Rs.
Crore)
Particulars MTR Order True-up Petition
Revenue from CSS 162.17 161.76
The revenue earned from CSS in FY 2018-19, paid by Change-over consumers and OA
consumers is Rs. 127.22 Crore. The Commission in AEML-D’s MTR Order (Case No. 200
of 2017) had approved revenue from CSS of Rs. 111.07 Crore. The details of revenue from
CSS are as under:
Table 0-156: Revenue from CSS in FY 2018-19 as submitted by AEML-D (Rs.
Crore)
Particulars MTR Order True-up Petition
Revenue from CSS 111,07 127.22
Commission’s Analysis and Ruling
The Commission has verified the revenue from CSS from the audited Reconciliation
Statement, and has approved it as shown in the following Table:
Table 0-157: Revenue from CSS in FY 2017-18 as approved by Commission (Rs.
Crore)
Particulars MTR
Order
True-up
Petition
Approved after
truing up
Revenue from CSS 162.17 161.76 161.76
Table 0-158: Revenue from CSS in FY 2018-19 as approved by Commission (Rs.
Crore)
Particulars MTR
Order
True-up
Petition
Approved after
truing up
Revenue from CSS 111,07 127.22 127.22
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1.56 REVENUE GAP
AEML-D’s Submission
FY 2017-18
The Revenue Gap for the Wires Business as per Net Entitlement and as approved in the
MTR Order in Case No. 200 of 2017 are as under:
Table 0-159: Revenue Gap for Wires Business for FY 2017-18 as submitted by
AEML-D (Rs Crore)
Particulars MTR Order Net Entitlement
Wires ARR 1,406.72 1,421.19
Revenue Gap/(Surplus) allowed in MYT
Order 179.36 179.36
Wires ARR with Revenue Gap 1,586.08 1,600.55
Revenue from Wheeling Charges from
changeover and OA consumers 283.83 285.59
Net Wires ARR 334.24 348.71
Revenue from Wheeling Charges from
Own Consumers 1,251.84 1,251.84
Revenue Gap/(Surplus) of Wires
Business 50.41 63.12
The Revenue Gap for Supply Business as per Net Entitlement and as approved in the MTR
Order in Case No. 200 of 2017 are as under:
Table 0-160: Revenue Gap/(Surplus) for Supply Business in FY 2017-18
as submitted by AEML-D (Rs. Crore)
Particulars MTR Order Net Entitlement
Supply ARR 5,404.04 5,381.80
Revenue Gap/(Surplus) allowed in MYT
Order 98.86 98.86
Supply ARR with Revenue Gap 5,502.90 5,480.66
Revenue from CSS from change-over and OA
consumers 162.17 161.76
Net Supply ARR 5,340.73 5,318.90
Revenue from Sales 5,195.50 5,197.08
Revenue Gap/(Surplus) of Supply Business 145.23 121.81
The combined Revenue Gap for Wires and Supply Business as per Net Entitlement and as
approved in the MTR Order in Case No. 200 of 2017 are as under:
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Table 0-161: Combined Revenue Gap for Wires Business and Supply Business in FY
2017-18 as submitted by AEML-D (Rs. Crore)
Particulars / (Rs. Crore) MTR Order Net
Entitlement
Wire and Supply ARR 6,810.76 6,802.98
Revenue Gap allowed in MYT Order (Case No.
36 of 2016) 278.22 278.22
Wires & Supply ARR with Revenue Gap 7,088.98 7,081.20
Revenue from Wheeling Charges and CSS from
changeover and OA consumers 446.00 447.35
Net Wires and Supply ARR 6,642.96 6,633.85
Revenue from Sales from Own Consumers 6,447.34 6,448.92
Revenue Gap of Wires and Supply Business 195.64 184.93
FY 2018-19
The Commission had allowed a Revenue Gap of Rs. 242.47 Crore (Rs. 162.69 Crore in
Wires Business and Rs. 79.78 Crore in Supply Business) to be recovered in FY 2018-19 in
the MYT Order dated 21 October 2016 in Case No. 34 of 2016. The Tariffs decided in
MYT Order for FY 2018-19 were applied for the first five months of FY 2018-19 before
getting revised as per the MTR Order. In the revised ARR/tariffs of FY 2018-19 as per the
MTR Order, a further Revenue Gap of Rs. 250.65 Crore was added in the Supply Business
(no amount was added in the Wires Business ARR). Therefore, while the Revenue Gap of
Rs. 242.47 Crore was recovered throughout FY 2018-19, the addition Revenue Gap of Rs.
250.65 Crore could be recovered from tariffs from 1 September 2018 onwards only.
Based on the above principle, the Revenue Gap for Wires Business as per Net Entitlement
and as approved in the MTR Order in Case No. 200 of 2017 are as under:
Table 0-162: Revenue Gap for Wires Business for FY 2018-19 as submitted by
AEML-D (Rs Crore)
Particulars / (Rs. Crore) MTR
Order
Net
Entitlement
Wires ARR 1,511.68 1,659.90
Revenue Gap allowed in MYT Order (Case No. 36 of 2016) 162.69 162.69
Revenue Gap allowed in MTR Order (Case No. 200 of 2017) 0 0
Wires ARR with Revenue Gap 1,674.37 1,822.59
Revenue from Wheeling Charges from changeover and OA
consumers 299.87 274.64
Net Wires ARR 1,374.50 1,547.95
Revenue from Wheeling Charges from Own Consumers 1,374.50 1,287.09
Revenue Gap of Wires Business 0 260.86
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The Revenue Gap for Supply Business as per Net Entitlement and as approved in the MTR
Order in Case No. 200 of 2017 are as under:
Table 0-163: Revenue Gap/(Surplus) for Supply Business in FY 2018-19
as submitted by AEML-D (Rs. Crore)
Particulars / (Rs. Crore) MTR
Order
Net
Entitlement
Supply ARR 5,313.72 5,304.79
Revenue Gap allowed in MYT Order (Case No. 36 of 2016) 79.78 79.78
Revenue Gap allowed in MTR Order (Case No. 200 of 2017) 250.65 250.65
Supply ARR with Revenue Gap 5,644.15 5,635.22
Revenue from CSS 111.07 127.22
Net Supply ARR 5,533.08 5,508.00
Revenue from Sales from Own Consumers 5,531.84 5,721.95
Revenue Gap of Supply Business 1.24 (213.95)
The combined Revenue Gap for Wires and Supply Business as per Net Entitlement and as
approved in the MTR Order in Case No. 200 of 2017 are as under:
Table 0-164: Combined Revenue Gap for Wires Business and Supply Business in FY
2018-19 as submitted by AEML-D (Rs. Crore)
Particulars / (Rs. Crore) MTR
Order
Net
Entitlement
Wire and Supply ARR 6,825.40 6,964.70
Revenue Gap allowed in MYT Order (Case No. 36 of 2016) 242.47 242.47
Revenue Gap allowed in MTR Order (Case No. 200 of 2017) 250.65 250.65
Wires & Supply ARR with Revenue Gap 7,318.52 7,457.82
Revenue from Wheeling Charges and CSS from changeover
and OA consumers 410.94 401.86
Net Wires and Supply ARR 6,907.58 7,055.95
Revenue from Sales from Own Consumers 6,906.34 7,009.04
Revenue Gap of Wires and Supply Business 1.24 46.92
Commission’s Analysis and Ruling
Based on the approved ARR and Revenue as discussed in the previous paragraphs, the
Commission has approved the Revenue Gap/(Surplus) for the Wires Business and Supply
Business of AEML-D for FY 2017-18 and FY 2018-19 as shown in the Tables below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 185 of 445
Table 0-165: Revenue Gap/(Surplus) for Wires Business for FY 2017-18 as approved
by the Commission (Rs. Crore)
Particulars MTR Order True-up
Petition
Approved after
truing up
Wires ARR 1,406.72 1,421.19 1,394.81
Revenue Gap/(Surplus) allowed in
MYT Order 179.36 179.36 179.36
Wires ARR with Revenue Gap 1,586.08 1,600.55 1,574.17
Revenue from Wheeling Charges from
changeover and OA consumers 283.83 285.59 285.59
Net Wires ARR 1,302.25 1,314.96 1,288.58
Revenue from Wheeling Charges from
Own Consumers 1,251.84 1,251.84 1,251.84
Revenue Gap/(Surplus) of Wires
Business 50.41 63.12 36.75
Table 0-166: Revenue Gap/(Surplus) for Supply Business for FY 2017-18 as
approved by the Commission (Rs. Crore)
Particulars MTR Order True-up
Petition
Approved
after truing up
Supply ARR 5,404.04 5,381.79 5,356.96
Revenue Gap/(Surplus) allowed in
MYT Order 98.86 98.86 98.86
Supply ARR with Revenue Gap 5,502.90 5,480.65 5,455.82
Revenue from CSS from change-
over and OA consumers 162.17 161.76 161.76
Net Supply ARR 5,340.73 5,318.90 5,294.06
Revenue from Sales 5,195.50 5,197.08 5,197.08
Revenue Gap/(Surplus) of Supply
Business 145.23 121.81 96.98
Table 0-167: Combined Revenue Gap for Wires Business and Supply Business in FY
2017-18 as submitted by AEML-D (Rs. Crore)
Particulars / (Rs. Crore) MTR
Order
True-up
Petition
Approved after
truing up
Wire and Supply ARR 6,810.76 6,802.98 6,751.78
Revenue Gap allowed in MYT Order (Case No.
36 of 2016) 278.22 278.22 278.22
Wires & Supply ARR with Revenue Gap 7,088.98 7,081.20 7,030.00
Revenue from Wheeling Charges and CSS from
changeover and OA consumers 446.00 447.35 447.35
Net Wires and Supply ARR 6,642.96 6,633.85 6,582.65
Revenue from Sales from Own Consumers 6,447.34 6,448.92 6,448.92
Revenue Gap of Wires and Supply Business 195.62 184.93 133.72
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Table 0-168: Revenue Gap/(Surplus) for Wires Business for FY 2018-19 as approved
by the Commission (Rs. Crore)
Particulars / (Rs. Crore) MTR
Order
True-up
Petition
Approved
after truing up
Wires ARR 1,511.68 1,659.90 1,537.90
Revenue Gap allowed in MYT Order (Case No.
36 of 2016) 162.69 162.69 162.69
Revenue Gap allowed in MTR Order (Case No.
200 of 2017) 0 0 0
Wires ARR with Revenue Gap 1,674.37 1,822.59 1,700.59
Revenue from Wheeling Charges from
changeover and OA consumers 299.87 274.64 274.64
Net Wires ARR 1,374.50 1,547.95 1,425.95
Revenue from Wheeling Charges from Own
Consumers 1,374.50 1,287.09 1,287.09
Revenue Gap of Wires Business 0 260.86 138.86
Table 0-169: Revenue Gap/(Surplus) for Supply Business for FY 2018-19 as
approved by the Commission (Rs. Crore)
Particulars / (Rs. Crore) MTR
Order
True-up
Petition
Approved after
truing up
Supply ARR 5,313.72 5,304.79 5,293.36
Revenue Gap allowed in MYT Order (Case No.
36 of 2016) 79.78 79.78 79.78
Revenue Gap allowed in MTR Order (Case No.
200 of 2017) 250.65 250.65 250.65
Supply ARR with Revenue Gap 5,644.15 5,635.22 5,623.79
Revenue from CSS 111.07 127.22 127.22
Net Supply ARR 5,533.08 5,508.00 5,496.57
Revenue from Sales from Own Consumers 5,531.84 5,721.95 5,721.95
Revenue Gap of Supply Business 1.24 (213.95) (225.38)
Table 0-170: Combined Revenue Gap for Wires Business and Supply Business in FY
2018-19 as approved by the Commission (Rs. Crore)
Particulars / (Rs. Crore) MTR
Order
True-up
Petition
Approved
after truing
up
Wire and Supply ARR 6,825.40 6,964.70 6,831.26
Revenue Gap allowed in MYT Order (Case No.
36 of 2016) 242.47 242.47 242.47
Revenue Gap allowed in MTR Order (Case No.
200 of 2017) 250.65 250.65 250.65
Wires & Supply ARR with Revenue Gap 7,318.52 7,457.82 7,324.38
Revenue from Wheeling Charges and CSS from
changeover and OA consumers 410.94 401.86 401.86
Net Wires and Supply ARR 6,907.58 7,055.95 6,922.52
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Page 187 of 445
Particulars / (Rs. Crore) MTR
Order
True-up
Petition
Approved
after truing
up
Revenue from Sales from Own Consumers 6,906.34 7,009.04 7,009.04
Revenue Gap/(Surplus) of Wires and Supply
Business 1.24 46.92 (86.52)
As regards Carrying Cost on the Revenue Gap/(Surplus), the same has been elaborated
subsequently while discussing the ‘Recovery of Past Gaps’.
1.57 REGULATORY ASSETS RECOVERY IN FY 2017-18 AND FY 2018-19
AEML-D’s Submission
AEML-D has levied Regulatory Asset Charges in FY 2017-18 as approved in MYT Order
in Case No. 34 of 2016 for FY 2017-18. The actual RA recovery in FY 2017-18 from all
consumers was Rs. 851.37 Crore. The RA under recovery in FY 2017-18 is thus, Rs. 42.51
Crore. The Commission had also considered RA under recovery based on the submissions
of AEML-D of Rs. 42.51 Crore for FY 2017-18 in the MTR Order in Case No. 200 of 2017.
Table 0-171: Actual Regulatory Assets Recovery in FY 2017-18 as submitted by
AEML-D (Rs. Crore)
Particulars MTR Order True-up Petition
RA Recovery approved in FY 17-18 893.88 893.88
Actual RA Recovery in FY 17-18 851.37 851.37
Under recovery in FY 17-18 42.51 42.51
For the first five months of FY 2018-19, Regulatory Asset Charges levied to consumers
were as per the MYT Order dated 21st October 2016 in Case No. 34 of 2016. From 1
September 2018 onwards, the Regulatory Asset Charges levied to consumers were as per
the MTR Order dated 12 September 2018. The actual RA recovery in FY 18-19 is shown
in the table below:
Table 0-172: Actual Regulatory Assets Recovery in FY 2018-19 as submitted by
AEML-D (Rs. Crore)
Particulars True-up Petition
Recovery from own consumers 500.88
Recovery from changeover consumers 80.09
Total 580.98
The Commission, in the MTR Order dated 12 September 2018, had approved RA recovery
of Rs. 471.43 Crore in FY 2018-19. As can be seen from the table above, there is an over
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recovery of RA in FY 2018-19. This is because for the first five months of FY 2018-19, the
RAC was higher than the RAC approved in the MTR Order dated 12 September 2018.
Commission’s Analysis and Ruling
The Commission has considered the actual RA recovery as submitted by AEML-D. The
RA over/under-recovery determined by the Commission after true-up is given in the
following Table:
Table 0-173: Regulatory Asset Over/Under Recovery in FY 2017-18 as approved by
the Commission (Rs. Crore)
Particulars True-up Petition Approved in
this Order
RA Recovery approved in FY 2017-18 893.88 893.88
Actual RA Recovery in FY 2017-18 851.37 851.37 Under recovery in FY 2017-18 42.51 42.51
Table 0-174: Actual Regulatory Assets Recovery in FY 2018-19 as approved by the
Commission (Rs. Crore)
Particulars True-up Petition Approved in
this Order
Recovery from own consumers 500.88 500.88
Recovery from changeover consumers 80.09 80.09 Total 580.98 580.98
The treatment of this Over/Under Recovery of Regulatory Asset is discussed along with the
treatment of Cumulative Revenue Gap/(Surplus) in Chapter 6 of this Order.
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PROVISIONAL TRUING-UP FOR FY 2019-20
AEML-D submitted that it has filed its Petition for provisional truing-up of expenditure and
revenue for FY 2019-20, in accordance with Regulation 5.1 (a) of the MYT Regulations,
2019, which require the Distribution Licensee to file the MYT Petition comprising inter
alia, provisional truing up for FY 2019-20 to be carried out under the MYT Regulations,
2015. Accordingly, in this Chapter, AEML-D has presented the unaudited actuals of H1 of
FY 2019-20 and the estimates of H2 of FY 2019-20. A comparison with the approved
figures as per MTR Order is also presented along with reasons for deviations, wherever
required.
The Commission has analysed the estimated expenses and revenue under each head and
provisionally approved the expenditure and revenue of AEML-D for FY 2019-20, in
accordance with the MYT Regulations, 2015, as discussed in the subsequent paragraphs.
1.58 SALES
AEML-D’s Submission
1.58.1 Actuals for H1 of FY 19-20
AEML-D submitted the actual category-wise own sales and change-over sales in H1 of FY
2019-20.
AEML-D submitted that it is not possible to quantify the exact quantum of OA consumption
till September 2019, as the Generation Credit Note (GCN) of non-firm OA consumers till
September 2019 has not been received yet. AEML-D has therefore, estimated the OA
consumption in H1 of FY 2019-20, based on the OA consumption during H1 of FY 2018-
19, as shown in the Table below:
Table 0-1: Estimated OA Consumption in H1 of FY 2019-20 as submitted by AEML-
D (MU)
Particulars H1 of FY 19-20 -Estimates
HT I - Industrial 49.70
HT II - Commercial 74.09
HT VI(B) - Public Service
(Others) 2.69
Total 126.48
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1.58.2 Estimates for H2 of FY 19-20
AEML-D has estimated the sales to own consumers in H2 of FY 2019-20 by considering
migration and reverse migration of consumers., AEML-D has considered the average of
number of consumers migrated in the months from April 2019 to August 2019 as the
monthly number of consumers migrating in H2 of FY 2019-20.
As regards reverse migration of change-over consumers back to AEML-D, the tariff of LT
– I (Residential high end with consumption of more than 500 units per month), LT II(a),
LT II(c) and LT III(a) consumers in change-over category is higher than AEML-D tariff.
Therefore, most of the reverse migration is happening in these categories. For these
categories, AEML-D has considered the average number of consumers from April 2019 to
August 2019 as the number of consumers that will migrate back to AEML-D in H2 of FY
2019-20.
Post the issuance of the Order in Case No. 182 of 2014 dated 12 June, 2017, there was
switch-over of consumers from AEML-D network to TPC-D. During H1 of FY 2019-20,
mostly residential consumers (consuming up to 500 units per month) and LT II(a)
consumers have switched over to TPC-D, both from change-over and AEML-D direct.
AEML-D expects the trend to continue in H2 of FY 2019-20. Hence AEML-D has
considered the average number of consumers in these categories who had switched over
from April 2019 to August 2019 as the number of consumers switching over to TPC-D in
H2 of FY 2019-20. Further, AEML-D expects some of the consumers of HT – I Industry
category with annual consumption of about 180 MU to switch-over to AEML-D from TPC-
D in H2 of FY 2019-20. 70% of this sale is expected to be addition in OA sales and rest
30% is expected to be addition in own sales of AEML-D. AEML-D has appropriately
factored in this sale in own and OA sales in FY 2019-20.
At present, AEML-D is carrying out two DSM programs – large scale refrigerator program
and large-scale ceiling fan program, after getting approval from the Commission. The
estimated incremental reduction in sales due to these two programs has been factored in the
sales projections by AEML-D. AEML-D expects reduction of 0.169 MU in sales of H2 of
FY 2019-20.
In FY 2018-19, a total of 7,680.56 kW Roof top solar (RTS) PV has been installed in
AEML-D licence area as per MERC (Net Metering for Solar Roof-top PV systems)
Regulations, 2015. For the purpose of estimating increase in Solar PV installations, AEML-
D has considered the same capacity addition of 7,680.56 kW in FY 2019-20 as well.
AEML-D expects a reduction of 8.94 MU in sales of H2 of FY 2019-20, in different
categories, on account of energy generation by RTS system.
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AEML-D has provided detailed methodology for computation of sales of H2 of FY 2019-
20 and has accordingly estimated sales for H2 and subsequently total sales for entire FY
2019-20.
The actual own sales in H1 of FY 19-20 and the estimated own sales in H2 of FY 19-20
worked out based on the methodology and assumptions is shown as under:
Table 0-2: Own Sales of Actual H1 and estimated H2 for FY 2019-20 as submitted by
AEML-D (MU)
Particulars / (MU) MTR Order
FY 2019-20
Own Sales
(H1) -
Provisional
Actuals
Own Sales
(H2) -
Estimates
Own Sales
(Total) -
Estimates
LT Category
LT I - Below Poverty Line 0.02 0.00 0.01 0.01
LT -I Residential (Single Phase)
0-100 1,656.03 838.66 819.13 1,657.78
101-300 1,141.55 632.08 480.10 1,112.18
301-500 201.39 124.91 68.12 193.03
500 and above 72.59 47.03 18.72 65.75
LT -I Residential (Three Phase)
0-100 247.99 133.31 138.23 271.54
101-300 382.72 205.20 196.95 402.15
301-500 208.17 115.61 94.77 210.37
500 and above 412.42 227.80 177.19 404.99
LT II (a) - 0-20 kW 1,934.67 934.90 842.57 1,777.46
LT II (b) - 20-50 kW 241.35 124.17 116.49 240.66
LT II (c) - above 50 kW 552.58 292.88 273.61 566.49
LT III (a) - LT Industrial upto 20
kW 186.82 83.76 79.40 163.16
LT III (b) - LT Industrial above 20
kW 394.49 194.13 183.43 377.56
LT IV - Public Water Works 13.81 6.49 6.51 12.99
LT-V: LT- Advertisements and
Hoardings 3.65 1.23 1.27 2.51
LT VI: LT -Street Lights 59.47 23.43 25.92 49.36
LT-VII (A): LT -Temporary
Supply Religious 2.13 0.55 1.62 2.17
LT-VII (B): LT -Temporary
Supply Others 8.24 5.58 5.46 11.04
LT VIII: LT - Crematorium &
Burial Grounds 1.40 0.65 0.68 1.33
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 192 of 445
Particulars / (MU) MTR Order
FY 2019-20
Own Sales
(H1) -
Provisional
Actuals
Own Sales
(H2) -
Estimates
Own Sales
(Total) -
Estimates
LT IX (a): PS - Govt. EI &
Hospitals 25.80 13.04 12.65 25.69
LT IX (b): PS - Others 162.50 62.95 59.97 122.93
LT X (a): Agriculture - Pumpsets 0.06 0.03 0.03 0.06
LT X (b): Agriculture - Others 0.14 0.12 0.11 0.23
LT XI: EV Charging Stations 0 0.00 0.01 0.01
Total LT 7,909.99 4,068.51 3,602.94 7,671.45
HT Category
HT I: HT-Industry 442.14 142.58 144.76 287.34
HT II: HT- Commercial 345.26 250.73 227.13 477.86
HT III: HT-Group Housing
Society 40.04 20.78 18.35 39.13
HT IV: HT -Public Water Works 6.74 4.42 3.89 8.31
HT V - HT Metro & Monorail 31.56 15.87 11.91 27.78
HT VI (a):PS - Govt. EI &
Hospitals 8.66 3.13 2.68 5.81
HT VI (b):PS - Others 100.16 52.45 51.53 103.98
HT VII: Temporary Supply 2.87 0.78 2.48 3.26
HT VIII: EV Charging Stations 0 0 0 0
Total HT 977.43 490.74 462.72 953.47
Total 8,887.42 4,559.25 4,065.66 8,624.92
The estimated change-over sales in H2 of FY 2019-20 is worked out based on the
methodology and assumptions adopted for estimating own sales for H2 of FY 2019-20 and
is shown as under:
Table 0-3: Estimated Changeover Sales of H1 and H2 of FY 2019-20 as submitted by
AEML-D (MU)
Particulars / (MU) MTR Order
FY 2019-20
Changeover
Sales (H1) -
Provisional
Actuals
Changeover
Sales (H2) -
Estimates
Changeover
Sales (Total)
- Estimates
LT Category
LT I - Below Poverty Line 0 0 0
LT -I Residential (Single Phase)
0-100 260.04 248.32 508.36
101-300 259.41 188.42 447.83
301-500 49.76 21.45 71.22
500 and above 13.28 3.68 16.96
LT -I Residential (Three Phase)
0-100 44.54 45.29 89.83
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 193 of 445
Particulars / (MU) MTR Order
FY 2019-20
Changeover
Sales (H1) -
Provisional
Actuals
Changeover
Sales (H2) -
Estimates
Changeover
Sales (Total)
- Estimates
101-300 70.63 64.78 135.41
301-500 36.80 26.69 63.48
500 and above 41.04 27.27 68.31
LT II (a) - 0-20 kW 45.64 38.85 84.49
LT II (b) - 20-50 kW 11.82 10.76 22.58
LT II (c) - above 50 kW 13.05 10.40 23.46
LT III (a) - LT Industrial upto 20
kW
7.92 7.40 15.32
LT III (b) - LT Industrial above 20
kW
4.95 4.47 9.42
LT IV - Public Water Works 0 0 0
LT-V: LT- Advertisements and
Hoardings
0.01 0.01 0.01
LT VI: LT -Street Lights 0 0 0
LT-VII (A): LT -Temporary
Supply Religious
0 0 0
LT-VII (B): LT -Temporary
Supply Others
0.01 0.02 0.03
LT VIII: LT - Crematorium &
Burial Grounds
0.12 0.14 0.26
LT IX (a): PS - Govt. EI &
Hospitals
0 0 0
LT IX (b): PS - Others 1.27 1.22 2.50
LT X (a): Agriculture - Pumpsets 0 0 0
LT X (b): Agriculture - Others 0 0 0
LT XI: EV Charging Stations 0 0 0
Total LT 860.30 699.17 1,559.48
HT Category
HT I: HT-Industry 0.10 0.09 0.19
HTII: HT- Commercial 2.25 1.99 4.24
HT III: HT-Group Housing
Society
0 0 0
HT IV: HT -Public Water Works 0 0 0
HT V - HT Metro & Monorail 0 0 0
HT VI (a):PS - Govt. EI &
Hospitals
0 0 0
HT VI (b):PS - Others 0 0 0
HT VII: Temporary Supply 0 0 0
HT VIII: EV Charging Stations 0 0 0
Total HT 2.35 2.08 4.43
Total 1,664.01 862.66 701.25 1,563.91
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 194 of 445
The Commission had approved changeover sales of 1,664.01 MU for FY 2019-20 in the
MTR Order dated 12 September 2018 on provisional basis. The actuals are expected to be
lower than the same, considering the actuals of H1 of FY 2019-20 and also the fact that the
actuals of previous years have been lower than the figures considered by the Commission.
The estimated OA consumption for H1 and H2 of FY 2019-20 are shown in the table below:
Table 0-4: Estimated OA consumption of FY 2019-20 as submitted by AEML-D
(MU)
Particulars /(MU) MTR
Order
OA
Consumption
(H1) -
Estimates
OA
Consumption
(H2) -
Estimates
OA
Consumption
(Total) -
Estimates
HT I - Industrial 49.70 94.88 144.59
HT II - Commercial 74.09 56.52 130.60
HT VI(B) - Public Service
(Others)
2.69 1.95 4.64
Total 225.70 126.48 153.34 279.83
Commission’s Analysis and Ruling
For projecting sales in the Control Period, the Commission in previous MYT and MTR
Order had adopted a holistic approach as it is difficult to establish any trend in the growth
rates for specific consumer categories due to migration and reverse migration of consumers
in some categories from AEML-D to TPC-D and back to AEML-D over past 2-3 years. The
Commission projected total consolidated category-wise sales as the summation of the direct
sales of TPC-D, direct sales of AEML-D, the change-over sales and OA consumption.
Before projecting the energy sales for FY 2019-20 and subsequently for fourth Control
Period, it is important to review the projections for FY 2017-18 and FY 2018-19 made in
MTR Order as against the actual sales achieved during this period. The Commission had
projected energy sales for own consumers of AEML-D as 8321.05 MU for FY 2017-18 and
8,579.21 MU for FY 2018-19. As against this, the actual sales were 8,332.30 MU for FY
2017-18 and 8,361.60 MU for FY 2018-19. As the provisional actuals of FY 2017-18 were
available at the time of the MTR Order, no significant variation is expected for this year.
The variation of actual sales from the approved sales for FY 2018-19 are within the range
of +-5%.
Further, actual changeover sales during FY 2017-18 and FY 2018-19 also did not deviate
much from the projected changeover sales of FY 2017-18 and FY 2018-19. The actual
changeover sales during FY 2018-19 were 1,571.86 MU as against the projected sales of
1,667.97 MU. Moreover, OA consumption projected was also in line with actual
consumption during FY 2018-19.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 195 of 445
Hence, the methodology adopted by the Commission for sales projections is appropriate
given the difficulties in assessing the category-wise trend of sales of AEML-D and TPC-D
on stand-alone basis. In view of the above, for FY 2019-20 and for fourth Control Period
(i.e., FY 2020-21 to FY 2024-25), the Commission has continued with the holistic approach
and projected the energy sales accordingly, as elaborated in the following paragraphs:
(a) The Commission has analysed the growth trend of the category-wise total energy
sales for past period. The Commission has analysed the growth trend of past sales in
various segments as AEML-D Own sales, Changeover Sales, TPC-D Direct sales in
AEML-D’s area of supply, TPC-D Direct sales in BEST’s area of supply, Open
Access sales on TPC-D’s network, and OA sales on AEML-D’s network.
(b) The overall trend of growth in consolidated sales gives a realistic picture of category-
wise trends, which have been used to project the overall category-wise sales for TPC-
D and AEML-D combined for the area of supply overlapping with AEML-D.
(c) Since, the actual energy sales for FY 2018-19 are available now, the Commission has
considered the past sales up to FY 2018-19 for growth trend analysis. The energy
sales for FY 2018-19 has been considered as base value for projecting the energy
sales for FY 2019-20 and for the fourth Control Period, i.e., FY 2020-21 to FY 2024-
25.
(d) CAGR of actual consolidated sales for different periods in the past eight years, i.e.,
FY 2010-11 to FY 2018-19, has been analysed and an appropriate CAGR has been
considered.
(e) Direct sales of TPC-D were projected based on past trends as these are not affected
by migration or reverse migration and are sales on TPC-D’s own distribution network.
Further, TPC-D’s overall sales have been projected based on past growth trends in
different segments, viz., sales in AEML-D’s area of supply, sales in BEST’s area of
supply, sales because of new Direct consumers in BEST area, sales because of new
Direct Consumers in AEML-D’s area and OA sales on TPC-D’s network.
(f) Different CAGRs have been considered for TPC-D for the areas overlapping with
AEML-D and BEST areas.
(g) The Commission has not considered any additional change-over sales on account of
change-over of residential category consumers in the 0-300 units slab since it is
difficult to anticipate the extent of consumers shifting considering the difference in
tariffs. The impact, if any, on this account shall be addressed at the time of truing up.
(h) The category-wise CAGR considered for projecting the revised energy sales for FY
2019-20 and for the fourth Control Period (i.e. FY 2020-21 to FY 2024-25), is shown
in the following Table:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 196 of 445
Table 0-5: Category-wise CAGR considered for projection of Energy Sales
Consumer Category
CAGR
Considered
for
Consolidat
ed Sales
TPC-D
Direct Sales
CAGR in
AEML-D
area
TPC-D
Direct Sales
CAGR in
BEST area
LT Category
LT I - Below Poverty Line 0% 0% 0%
LT -I Residential
0-100 3% 15% 26%
101-300 3% 15% 26%
301-500 3% 15% 26%
500 and above 3% 15% 26%
LT Commercial
LT II (a) - 0-20 kW 3% 15% 5%
LT II (b) - 20-50 kW 3% 15% 8%
LT II (c) - above 50 kW 1% 4% 6%
LT III (a) - LT Industrial up to 20 kW 1% -3% 8%
LT III (b) - LT Industrial above 20 kW 0% 3% 14%
LT IV - Public Water Works 0% 0% 0%
LT-V: LT- Advertisements and Hoardings -2% 14% 0%
LT VI: LT -Street Lights -4% -16% 0%
LT-VII (A): LT -Temporary Supply
Religious -2% -39% 0%
LT-VII (B): LT -Temporary Supply
Others 0% 0% 0%
LT VIII: LT - Crematorium & Burial
Grounds 6% 0% 0%
LT X: LT -Public Service
LT IX(A) - Public Service Govt Hosp &
Edu Inst 13% 13% 8%
LT IX(B) - Public Services Others 20% -49% 8%
LT X: LT -Agriculture 26% 0% 0%
HT Category
HT I: HT-Industry 4% 5% 0%
HT II: HT- Commercial -6% -5% 0%
HT III: HT-Group Housing Society -2% 25% 0%
HT IV - PWW & Sewage Treatment Plants 0% 0% 0%
HT V (A) - Railways 1% 1% 0%
HT V (B): Metro/Monorail 0% -39% -39%
HT VI - Public Service 1% 3% 0%
HT VII: HT - Temporary Supply 29% 31% 0%
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 197 of 445
(i) The energy sales for AEML-D have been derived after deducting the TPC-D sales,
Changeover Sales and Open Access Sales from the projected consolidated energy
sales for FY 2019-20 and for fourth Control Period.
In view of the above, the category-wise energy sales approved by the Commission for
FY 2019-20 are shown in the following Table:
Table 0-6: Category-Wise Own Sales for FY 2019-20 as approved by Commission
(MU)
Particulars MTR
Order
AEML-D
Petition
Approved after
Provisional
truing up
LT Category
LT I - Below Poverty Line 0.02 0.01 0.01
LT -I Residential (Single Phase)
0-100 1,656.03 1,657.78 1,974.73
101-300 1,141.55 1,112.18 1,515.95
301-500 201.39 193.03 398.68
500 and above 72.59 65.75 476.80
LT -I Residential (Three Phase)
0-100 247.99 271.54
101-300 382.72 402.15
301-500 208.17 210.37
500 and above 412.42 404.99
LT II (a) - 0-20 kW 1,934.67 1,777.46 1,824.38
LT II (b) - 20-50 kW 241.35 240.66 233.53
LT II (c) - above 50 kW 552.58 566.49 537.37
LT III (a) - LT Industrial up to 20 kW 186.82 163.16 178.15
LT III (b) - LT Industrial above 20 kW 394.49 377.56 392.59
LT IV - Public Water Works 13.81 12.99 12.77
LT-V: LT- Advertisements and Hoardings 3.65 2.51 3.13
LT VI: LT -Street Lights 59.47 49.36 54.19
LT-VII (A): LT-Temporary Supply Religious 2.13 2.17 1.86
LT-VII (B): LT -Temporary Supply Others 8.24 11.04 10.43
LT VIII: LT - Crematorium & Burial Grounds 1.40 1.33 1.32
LT IX (a): PS - Govt. EI & Hospitals 25.80 25.69 27.12
LT IX (b): PS – Others 162.50 122.93 142.23
LT X (a): Agriculture – Pump sets 0.06 0.06 0.07
LT X (a): Agriculture - Others 0.14 0.23 0.24
LT XI: EV Charging Stations - 0.01 -
Total LT 7909.98 7,671.45 7,785.54
HT 33 kV Category
HT V – HT Metro and Monorail 31.56 27.78 30.51
HT 11 kV Category
HT I: HT-Industry 442.14 287.34 305.56
HT II: HT- Commercial 345.26 477.86 333.31
HT III: HT-Group Housing Society 40.04 39.13 36.84
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 198 of 445
Particulars MTR
Order
AEML-D
Petition
Approved after
Provisional
truing up
HT IV: HT-Public Water Works 6.74 8.31 8.13
HT VI (a):PS - Govt. EI & Hospitals 8.66 5.81 6.68
HT VI (b):PS - Others 100.16 103.98 100.04
HT VII: Temporary Supply 2.87 3.26 15.41
Total HT 977.43 953.47 836.50
Total 8887.41 8,624.92 8,622.04
Accordingly, the Change-over Sales provisionally approved by the Commission for FY
2019-20 is as stated in the Table below:
Table 0-7: Category-Wise Change-over Sales of FY 2019-20 as approved by
Commission (MU)
Particulars MTR
Order
AEML-D
Petition
Approved after
Provisional
truing up
LT Category
LT I - Below Poverty Line 0 0
LT -I Residential (Single Phase)
0-100 508.36 567.08
101-300 447.83 540.27
301-500 71.22 128.54
500 and above 16.96 90.30
LT -I Residential (Three Phase)
0-100 89.83
101-300 135.41
301-500 63.48
500 and above 68.31
LT II (a) - 0-20 kW 84.49 95.64
LT II (b) - 20-50 kW 22.58 23.09
LT II (c) - above 50 kW 23.46 32.90
LT III (a) - LT Industrial up to 20 kW 15.32 14.02
LT III (b) - LT Industrial above 20 kW 9.42 6.36
LT IV - Public Water Works 0 0
LT-V: LT- Advertisements and Hoardings 0.01 0.02
LT VI: LT -Street Lights 0 0
LT-VII (A): LT-Temporary Supply Religious 0 0
LT-VII (B): LT -Temporary Supply Others 0.03 0.02
LT VIII: LT - Crematorium & Burial
Grounds
0.26 0.35
LT IX (a): PS - Govt. EI & Hospitals 0 0
LT IX (b): PS - Others 2.50 3.72
LT X (a): Agriculture – Pump sets 0 0
LT X (a): Agriculture - Others 0 0
LT XI: EV Charging Stations 0 0
Total LT 1,559.48 1,502.31
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 199 of 445
Particulars MTR
Order
AEML-D
Petition
Approved after
Provisional
truing up
HT 33 kV Category
HT V – HT Metro and Monorail 0 0
HT 11 kV Category
HT I: HT-Industry 0.19 0.16
HT II: HT- Commercial 4.24 3.48
HT III: HT-Group Housing Society 0 0
HT IV: HT-Public Water Works 0 0
HT VI (a):PS - Govt. EI & Hospitals 0 0
HT VI (b):PS - Others 0 0
HT VII: Temporary Supply 0 0
Total HT 4.43 3.63
Total 1,664.01 1,563.91 1,505.94
The Commission has also provisionally approved the figures of OA consumption as shown
in the Table below:
Table 0-8: OA Consumption for FY 2019-20 as approved by the Commission (MU)
Particulars /(MU) MTR
Order
AEML-D
Petition
Approved after
Provisional
truing up
HT I - Industrial 144.59 136.85
HT II - Commercial 130.60 93.77
HT VI(B) - Public Service (Others) 4.64 4.63
Total 225.70 279.83 235.25
1.59 DISTRIBUTION LOSSES AND ENERGY BALANCE
AEML-D’s Submission
The Commission had approved Distribution Loss of 8.36% for FY 2019-20 for AEML-D.
The actual distribution loss for FY 2018-19 was 7.85%. For FY 2019-20, AEML-D has
considered 0.05% reduction in losses over the actual distribution loss of FY 2018-19. The
energy input to the distribution system of AEML-D for FY 2019-20 considering estimated
sales to own consumers, change-over consumption and OA consumption is shown in the
table below:
Table 0-9: Energy Balance for FY 2019-20 as submitted by AEML-D
Particulars MTR Order AEML-D
Petition
Energy Sold (MU) by AEML-D 8,887.41 8,624.92
Consumption (MU) by Changeover Consumers 1,664.01 1,563.91
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 200 of 445
Particulars MTR Order AEML-D
Petition
Consumption (MU) by OA Consumers 225.70 279.83
Total (MU) 10,777.12 10,468.65
Distribution Loss 8.36% 7.80%
Energy Input (MU) at T<>D 11,757.39 11,354.36
The Energy Balance for FY 2019-20 based on the estimated energy input to AEML-D
distribution system and the wheeling losses of HT consumers (1.71%) and LT consumers
(8.08%) and State Transmission Losses of 3.30% is shown in the Table below:
Table 0-10: Energy Requirement for FY 2019-20 as submitted by AEML-D (MU)
Particulars MTR
Order
AEML-D
Petition
Migrated HT Sales + OA consumption 284.26
HT Loss 1.71%
HT grossed up energy at T<>D 289.20
Migrated LT Sale 1,559.48
LT Loss 8.08%
LT grossed up energy at T<>D 1,696.56
Total T<>D energy attributable to TPC-D sale & OA
consumption 1,809.49 1,985.76
Net T<>D energy attributable to AEML-D sale 9,947.90 9,368.60
InSTS Loss % 3.30% 3.30%
Total requirement of AEML-D (MU) at G-T 10,287.38 9,688.32
AEML-D submitted that though for provisional true-up, Distribution Losses of 7.80% have
been considered, instead of the MYT approved level of 8.36%, the same does not amount
to resetting of target losses for the purposes of measuring efficiency gains at the time of
true-up of FY 19-20. For that purpose, the actual performance on losses must be compared
to the target approved in the MYT Order, i.e., 8.36% only. This approach of considering
estimated actual Distribution Losses for provisional true-up stems from the Commission’s
own approach in case of Generation Business, where the actual estimated performance in
terms of SHR, aux. consumption, etc., is considered for estimating fuel cost for provisional
true-up purposes only, while the efficiency gains are determined compared to normative
performance at the time of final true-up.
Commission’s Analysis and Ruling
The Commission has considered the normative HT wheeling losses of 1.71% and LT
Wheeling loss of 8.08% as approved for FY 2019-20 in MTR Order. The Commission has
considered the Transmission Losses of 3.18% for FY 2019-20 based on actual Transmission
Loss of FY 2019-20 as per inputs from MSLDC. The change-over sales have been
considered as approved earlier in this Chapter. The Commission has considered the energy
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 201 of 445
drawn by AEML-D at T<>D interface as 11,240.02 MU. Accordingly, the Distribution
Losses and Energy Balance provisionally approved by the Commission for FY 2019-20 are
shown in the Tables below:
Table 0-11: Energy Balance for FY 2019-20 as approved by the Commission
Particulars UoM MTR
Order
AEML-
D
Approved after
Provisional
truing up
Sales (Own) MU 8,887.41 8,624.92 8,622.04
Sales (Change-over) MU 1,664.01 1,563.91 1,505.94
Consumption by OA consumers MU 225.70 279.83 235.25
Total MU 10,777.12 10,468.65 10,363.23
Distribution Loss % 8.36% 7.80% 7.80%
Energy Input to the Distribution System MU 11,757.39 11,354.36 11,240.02
The Commission has approved the Distribution Loss of 7.80% in line with the submissions
made by AEML-D for FY 2019-20. The following Table shows the Energy requirement
worked out for FY 2019-20 by the Commission based on the approved Distribution Losses:
Table 0-12: Energy Requirement of AEML-D for FY 2019-20 as approved by the
Commission
Particulars UoM MTR
Order AEML-D
Approved after
Provisional
truing up
Migrated HT sales + OA consumption MU 284.26 238.88
HT Loss % 1.71% 1.71%
HT grossed up energy at T<>D boundary MU 289.20 243.04
Migrated LT sale MU 1,559.48 1,502.31
LT loss % 8.08% 8.08%
LT grossed up energy at T<>D boundary MU 1,696.56 1,634.36
Total T<>D energy attributable to TPC-D
sale & OA consumption (A) MU 1,809.49 1,985.76 1,877.40
Total Energy Input at T<>D interface of
AEML-D system (B) MU 9,947.90 9,368.60 9,351.51
InSTS losses % % 3.30% 3.30% 3.18%
Total requirement of AEML-D (MU) at
G-T MU 10,287.38 9,688.32 9,658.66
1.60 POWER PROCUREMENT
1.60.1 AEML-G (ADTPS)
AEML-D’s Submission
AEML-D submitted the energy availability from ADTPS as per actuals for the first half of
FY 2019-20. No PLF incentive is payable to ADTPS as the PLF of ADTPS had been less
than 85% during first half of FY 2019-20. Regarding H2 of FY 2019-20, AEML-D has
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 202 of 445
considered the projections of energy from ADTPS considering the actual details of ADTPS
available with it so far, with projections for the balance period. AEML-D has considered
the variable cost of ADTPS as per the MYT Petition of AEML-G (Case No. 298 of 2019).
Fixed Charges for the whole of FY 2019-20 have been considered as approved by the
Commission in ADTPS MTR Order dated 12 September 2018 (Case No. 202 of 2017). No
PLF Incentive is at present estimated for H2 of FY 2019-20.
AEML-D submitted that it has considered backing down ADTPS to its technical minimum,
till the generation schedule matches the demand requirement of AEML-D considering
surplus for H2 of FY 2019-20. Technical minimum is considered since AEML-D is not in
a position to estimate demand and availability of generating stations for the State as a whole,
which has an impact on the backing down of the generating station. AEML-D has submitted
the following power purchase from ADTPS in FY 2019-20.
Table 0-13: Power Procurement from ADTPS in FY 2019-20 as submitted by
AEML-D
Particulars MTR Order AEML-D Petition
H1 Provisional Actuals 1,609.00
H2 Estimates 1,639.02
Total Quantum (MU) 3,775.15 3,248.02
Fixed Cost (Rs. Crore)
346.62
Variable Cost (Rs. Crore) 1,211.18
Incentive (Rs. Crore) -
Rate (Rs./kWh) 4.29 4.80
Total Cost (Rs. Crore) 1,620.73 1,557.80
Commission’s Analysis and Ruling
The Commission has considered the quantum of power from ADTPS for FY 2019-20 in
line with the generation approved for AEML-G in its Provisional Truing-up of FY 2019-
20. The Commission has considered the fixed and variable cost as approved by the
Commission in Provisional Truing-up of AEML-G for FY 2019-20.
Table 0-14: Quantum & Cost of Power Purchase from AEML-G for FY 2019-20 as
approved by Commission
DTPS
MTR Order AEML-D Petition Approved after Provisional
truing up
Quantum
(MU)
Cost
(Rs.
Crore)
Rate
(Rs./
kWh)
Quantum
(MU)
Cost
(Rs.
Crore)
Rate
(Rs./
kWh)
Quantum
(MU)
Cost
(Rs.
Crore)
Rate
(Rs./
kWh)
FY
2019-
20
3,775.15 1,620.73 4.29 3,248.02 1,557.80 4.80 3,290.05 1,573.45 4.78
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 203 of 445
1.60.2 Vidarbha Industries Power Ltd.
AEML-D’s Submission
AEML-D had issued a termination letter to VIPL-G on 20 April 2019 for termination of the
PPA between AEML-D and VIPL-G. VIPL-G has filed a Petition before the Commission
challenging the validity and legality of the termination letter (Case No. 247 of 2019). The
Commission has issued the Order in Case No. 247 of 2019 on 16 December 2019. As per
the said Order, the Termination Notice is held valid and the Termination Notice shall be
deemed to have been issued to the Lenders on the date of the Order. The Lenders may take
further necessary action as per the provisions of the PPA to exercise their right of
substituting VIPL with an entity for operating the thermal station for recovery of their dues.
Thus, considering the termination of the PPA, AEML-D has not considered any power
purchase from VIPL-G for FY 2019-20.
VIPL-G has drawn power from grid for its auxiliary operations in H1 of FY 2019-20.
AEML-D has charged VIPL at the rate of energy charge for HT – I (Industry) as approved
in the MTR Order dated 12 September 2018 in Case No. 200 of 2017. VIPL filed a Petition
(Case No. 232 of 2019) seeking a clarification on netting off the energy drawn by it with
the energy injected into the grid for supply to AEML-D. The Commission in the Order
dated 17 October 2019 in Case No. 232 of 2019 has stated that for the period till October
2019 energy drawn by VIPL from the grid has to be settled with AEML-D at the energy
charge rate of AEML-D as approved in the MTR Order dated 12 September 2018 in Case
No. 200 of 2017. Accordingly, the revenue corresponding to the energy drawn from grid
by VIPL till September 2019 is adjusted in the power purchase expense for H1 of FY 2019-
20.
The actual revenue in October 2019 together with revenue till September 2019 will be
presented at the time of truing up of FY 2019-20. Considering the above, the summary of
power purchase from VIPL-G in FY 2019-20 is shown in table below:
Table 0-15: Power Purchase Quantum and Cost from VIPL-G in FY 2019-20 as
submitted by AEML-D
Particulars MTR Order AEML-D Petition
H1 Provisional Actuals (2.23)
H2 Estimates 0
Quantum (MU) 4,000.97 (2.23)
Fixed Cost (Rs. Crore)
0
Variable Cost (Rs. Crore) (1.73)
Rate (Rs./kWh) 4.40 7.75
Total Cost (Rs. Crore) 1,759.25 (1.73)
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 204 of 445
Commission’s Analysis and Ruling
The Commission vide its Order dated 16 December 2019 in Case No. 247 of 2019 has
already considered the termination notice as valid. Hence the Commission accepts the
submission made by AEML-D and, not consider any power purchase from VIPL-G in FY
2019-20. The Power Purchase quantum and cost approved by the Commission from VIPL-
G is shown in the Table below:
Table 0-16: Power Purchase from VIPL-G for FY 2019-20 as approved by the
Commission
VIPL-G
MTR Order AEML-D Petition Approved after
Provisional truing up
Quantu
m (MU)
Cost
(Rs.
Crore)
Rate
(Rs./
kWh)
Quantu
m (MU)
Cost
(Rs.
Crore)
Rate
(Rs./
kWh)
Quantu
m (MU)
Cost
(Rs.
Crore)
Rate
(Rs./
kWh)
FY 2019-20 4,000.97 1,759.25 4.40 (2.23) (1.73) 7.75 (2.23) (1.73) 7.75
1.60.3 RENEWABLE ENERGY PROCUREMENT
1.60.3.1 Solar Power Procurement
AEML-D’s Submission
In the MTR Order dated 12 September 2018, the Commission had considered that the RPO
shortfall till FY 2017-18 and the stand-alone RPO requirement of FY 2019-20 shall be met
through purchase of Solar power in FY 2019-20 and, for this purpose, all the additional
Solar power requirement was considered by the Commission as being available from a new
source at Rs. 2.72/kWh. Subsequently, vide its Order in Case No. 39 of 2019, dated 4 April
2019, the Commission allowed AEML-D to meet its Solar and Non-solar RPO
cumulatively till FY 2019-20. AEML-D has not tied up with any new source for procuring
Solar RE and has procured Solar power from its existing contracted source of DSPPL only,
in H1 of FY 2019-20. For estimating the energy availability from DSPPL in H2 of FY 2019-
20, AEML-D has considered the trend in generation of DSPPL in second half of previous
years. The actual power purchase details from DSPPL in H1 of FY 2019-20 and the cost
for estimated power purchase from DSPPL in H2 of FY 2019-20 are shown in the table
below:
Table 0-17: Power Purchase from DSPPL in FY 2019-20 as submitted by AEML-D
Particulars MTR Order AEML-D
Petition
H1 Provisional Actuals 29.33
H2 Estimates 32.79
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 205 of 445
Particulars MTR Order AEML-D
Petition
Quantum (MU) 68.70 62.12
Rate (Rs. /kWh) 10.30 10.30
Cost (Rs. Crore) 70.75 63.99
AEML-D submitted the Solar RPO target for FY 2019-20 as per RPO-REC Regulations,
2016 as shown in the Table below:
Table 0-18: Solar RPO Target till FY 2019-20 as submitted by AEML-D
Particulars / (MU) H1 of FY 19-20 -
Provisional Actuals
H2 of FY 19-
20 - Estimates
FY 19-20 (Total)
- Estimates
Total Power Purchase 5,086.70 4,601.62 9,688.32
Solar RPO (%) 3.50% 3.50% 3.50%
Solar RPO Target 178.03 161.06 339.09
RE Purchase 29.33 32.79 62.12
Solar RE Shortfall 148.70 128.27 276.97
AEML-D submitted that it plans to meet the Solar RPO till FY 2019-20 during the period
from FY 20202-21 to FY 2024-25, as elaborated in the respective Chapter.
Commission’s Analysis and Ruling
The Commission has considered the actual power purchase of H1 and estimated power
purchase from H2 from DSPPL Solar as submitted by AEML-D. The Commission has
considered the rate of DSPPL in line with the rate approved in MTR Order. The
Commission has approved Solar purchase from DSPPL as shown in the Table below:
Table 0-19: Power Purchase from DSPPL in FY 2019-20 as approved by the
Commission (MU)
Particulars MTR Order AEML-D
Petition
Approved after
Provisional truing up
H1 Provisional Actuals 29.33 29.33
H2 Estimates 32.79 32.79
Quantum (MU) 68.70 62.12 62.12
Rate (Rs. /kWh) 10.30 10.30 10.30
Cost (Rs. Crore) 70.75 63.99 63.99
Accordingly, the Commission has worked out the shortfall of Solar RPO till FY 2019-20
based on the cumulative shortfall till FY 2018-19 approved in previous Chapter and targets
for FY 2019-20 as per RPO-REC Regulations, 2016, as shown in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 206 of 445
Table 0-20: Cumulative shortfall of Solar RPO Target till FY 2019-20 as approved
by the Commission (MU)
Particulars
Approved
till FY
2018-19
FY 2019-20 as
approved
Approved
till FY
2019-20
MU % MU
Gross Energy Consumption 9,658.66
RPO Target 721.62 3.50 338.05 1,059.68
Achievement 476.27 0.65 62.12 538.39
Shortfall / (Surplus) 245.35 2.85 275.93 521.28
Accordingly, the Commission has approved the shortfall of 521.28 MU of Solar RPO till
FY 2019-20 as shown in the Table above. The above shortfall in Solar RPO has been
considered for cost implications in next Control Period. However, it does not automatically
means that Commission has allowed carry forward of RPO. Decision of carry forward can
be made only under RPO verification process under MERC RPO Regulations. AEML-D
needs to justify its request of allowing carry forward in that proceedings.
1.60.3.2 Non-Solar Power Procurement
AEML-D’s Submission
In the MTR Order, the Commission had considered that the RPO shortfall till FY 2017-18
and the stand-alone RPO requirement of FY 2019-20 shall be met through purchase of Non-
Solar power in FY 2019-20 and for this purpose, all the additional Non-Solar power
requirement was considered by the Commission as being available from a new source (other
than Mini/Micro hydro) at Rs. 2.87/kWh and from Mini/Micro hydro source at Rs
5.64/kWh. Subsequently, vide its Order in Case No. 39 of 2019 dated 4 April 2019, the
Commission allowed AEML-D to meet its Solar and Non-solar RPO cumulatively till FY
2019-20.
AEML-D has not tied up with any new source for procuring Non-Solar RE and has procured
Non-Solar power from its existing contracted sources only, in H1 of FY 2019-20. For
estimating the energy availability from existing contracted sources in H2 of FY 2019-20,
AEML-D has considered the trend in generation from the sources in second half of previous
years. The summary of power procured by AEML-D from different sources for meeting its
Non-Solar RPO in FY 2019-20 is as shown in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 207 of 445
Table 0-21: Estimated Non-Solar RE Purchase in FY 2019-20 as submitted by
AEML-D
Particulars Total (MU) (Rs. /kWh) Cost (Rs.
Crore)
MTR Order 204.83 5.26 107.82
AEML-D Petition
Reliance Innoventures 77.66 5.00 38.83
AAA Sons Enterprise 2.89 5.00 1.44
Vector Green Energy Pvt. Ltd 33.60 5.00 16.80
Vector Green Energy Pvt. Ltd 10.29 5.07 5.22
Tembhu Power Private Limited 4.64 4.26 1.97
Reliance Clean Power Pvt. Ltd 78.66 5.81 45.70
Total 207.74 5.29 109.97
The Non-Solar RPO target and estimated achievement for FY 2019-20 as per RPO-REC
Regulations, 2016 is shown in the Table below:
Table 0-22: Non-Solar RPO target for FY 2019-20 as submitted by AEML-D
Particulars / (MU) H1 of FY 19-20 -
Provisional Actuals
H2 of FY 19-
20 - Estimates
FY 19-20
(Total) -
Estimates
Total Power Purchase 5,086.70 4,601.62 9,688.32
Non-Solar RPO (%) 11.50% 11.50% 11.50%
Non-Solar RPO Target 584.97 529.19 1,114.16
Non-Solar RE Purchase 170.26 37.48 207.74
Non-Solar RE Shortfall 414.71 491.70 906.41
AEML-D submitted that the plan for meeting the Non-Solar RPO till FY 2019-20 is
presented in the section of ARR for FY 2020-21 to FY 2024-25.
Commission’s Analysis and Ruling
The Commission observed that the quantum and cost from Non-solar RE purchase has been
estimated by AEML-D based on the long term/medium term contracts tied -up by AEML-
D in FY 2019-20. The Commission has therefore, considered the submission made by
AEML-D for Non-Solar RE purchase in provisional Truing-up of FY 2019-20. The
following Table shows the Non-Solar RE purchase considered by the Commission:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 208 of 445
Table 0-23: Non-Solar RE power purchase for FY 2019-20 as approved by
Commission
Particulars
MTR Order AEML-D Petition Approved after Provisional
truing up
Quant
um
(MU)
Cost
(Rs.
Crore)
Rate
(Rs./
kWh)
Quantu
m
(MU)
Cost
(Rs.
Crore)
Rate
(Rs./
kWh)
Quantu
m
(MU)
Cost
(Rs.
Crore)
Rate
(Rs./
kWh)
Reliance
Innoventures 77.66 38.83 5.00 77.66 38.83 5.00
AAA Sons
Enterprise 2.89 1.44 5.00 2.89 1.44 5.00
Vector Green
Energy Pvt. Ltd 33.60 16.80 5.00 33.60 16.80 5.00
Vector Green
Energy Pvt. Ltd 10.29 5.22 5.07 10.29 5.22 5.07
Tembhu Power
Private Limited 4.64 1.97 4.26 4.64 1.97 4.26
Reliance Clean
Power Pvt. Ltd 78.66 45.70 5.81 78.66 45.70 5.81
Total 204.83 107.82 5.26 207.74 109.97 5.29 207.74 109.97 5.29
Accordingly, the Commission has worked out the shortfall of Non-Solar RPO till FY 2019-
20 based on the cumulative shortfall till FY 2018-19 approved in previous Chapter and
targets for FY 2019-20 as per RPO-REC Regulations, 2016, as shown in the Table below:
Table 0-24: Cumulative shortfall of Non-Solar RPO Target till FY 2019-20 as
approved by the Commission (MU)
Particulars
Till FY
2018-19
FY 2019-20 as
approved
Approved till
FY 2019-20
MU % MU
Gross Energy Consumption 9,658.66
Non-Solar RPO
RPO Target 6,650.64 11.50 1,110.75 7,761.38
Achievement 4,834.41 2.18 207.74 5,042.15
Shortfall / (Surplus) 1,816.23 9.32 903.00 2,719.23
Mini / Micro RPO
RPO Target 11.73 0.20 2.22 13.96
Achievement 5.91 - - 5.91
Shortfall / (Surplus) 5.82 0.20 2.22 8.05
Accordingly, the Commission has approved the shortfall of 2,719.23 MU of Non-Solar
RPO till FY 2019-20 as shown in the Table above. The Commission additionally approves
cumulative shortfall of Mini / Micro RPO of 8.05 MU till FY 2019-20. The above shortfall
in non-Solar RPO has been considered for cost implications in next Control Period.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 209 of 445
However, it does not automatically mean that Commission has allowed carry forward of
RPO. Decision of carry forward can be made only under RPO verification process under
MERC RPO Regulations. AEML-D needs to justify its request of allowing carry forward
in that proceedings.
1.60.4 SHORT-TERM POWER PURCHASE
AEML-D’s Submission
AEML-D has considered the actual short-term purchase during H1 of FY 2019-20 from
Bilateral Sources and Power Exchanges. For H2, AEML-D has estimated that MSLDC shall
raise the revised energy settlement bills for the period from FY 2011-12 to FY 2017-18 as
per the said Order within the present financial year (FY 2019-20). However, there is no way
of estimating at present as to what would be the differential amount recoverable or payable
to the consumers, considering the pool cost as per the revised bills for these periods vs. the
pool cost already approved in truing-up of each of these years. Accordingly, if the revised
bills are received before the MYT Order on this Petition, the differential can be built in the
new tariffs, else it shall be recoverable / refundable in FAC, subsequent to the MYT Order.
20.
Further, 470.41 MU of energy was availed by AEML-D through banking in FY 2018-19.
Return transaction for the same was made in H1 of FY 2019-20. The corresponding cost of
the banking return is included in power purchase cost for H1 of FY 2019-20.
In order to estimate the short-term power purchase in H2 of FY 2019-20, AEML-D has
considered the hourly demand forecast and generation / availability forecast from firm
sources in H2 of FY 2019-20. After meeting the demand with estimated generation from
firm sources, the shortfall is estimated to be procured from short-term sources. No Standby
purchase from MSEDCL has been considered in H2 of FY 2019-20, as the same cannot be
forecast with any degree of certainty. Similarly, no increment / decrement to State
Imbalance Pool has been estimated in H2 of FY 2019-20, as the same would be included in
the hourly deficit / surplus as forecast. AEML-D submitted that it intends to procure
1,558.37 MU of short-term power through bilateral mechanism on RTC basis in H2 of FY
2019-20. AEML-D has conducted the competitive bidding process through DEEP portal.
The weighted average rate of RTC power discovered through the bids is Rs. 3.60/kWh.
AEML-D has considered the same for estimating the cost of short-term power to be
purchased on RTC basis in H2 of FY 2019-20. Also, AEML-D has also entered into banking
contracts in H2 of FY 2019-20 similar to the banking contracts entered in FY 2018-19,
under which, AEML-D shall receive 226.80 MU of energy in H2 of FY 2019-20 and return
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 210 of 445
it in FY 2020-21. Since AEML-D will have to pay only OA charges for this banking
transaction in FY 2019-10, the same is included in the power purchase cost for H2 of FY
2019-20 on provisional basis. For the remaining short-term requirement (intra-day, non-
RTC), AEML-D has considered the short-term rate equivalent to the average of Market
Clearing Prices (MCP) at IEX (09:00 Hours to 24:00 Hours) for the period April 2019 to
September 2019. The power purchase quantum and cost from short-term sources for H1
and H2 of FY 2019-20 are as under:
Table 0-25: Power Purchase from Short-Term sources for FY 2019-20 as submitted
by AEML-D
Particulars
FY 2019-20 (H1) FY 2019-20 (H2)
Quantu
m (MU) Rate
(Rs.
/kWh)
Cost
(Rs.
Crore)
Quantum
(MU) Rate (Rs.
/kWh)
Cost
(Rs.
Crore)
Bilateral 1,145.04 3.86 442.18 1,558.37 3.60 561.01
Power Exchanges 1,630.73 3.67 597.77 1,113.94 3.85 428.87
Cost of banked energy 210.85 226.80 8.36
Energy from OA consumers 2.90
Standby arrangement
with MSEDCL 4.40 -
State Imbalance Pool 500.17 -
Total 3,280.33 3.79 1,244.70 2,899.11 3.44 998.24
Commission’s Analysis and Ruling
The Commission has considered the submissions made by AEML-D as regards short term
purchase. The shortfall in purchase from VIPL-G is being met through short-term sources.
VIPL-G had generated 2,026.27 MU in FY 2018-19 at a rate of Rs. 4.59 per unit, which
came down to almost Nil generation in FY 2019-20. Consequntly, there is an estimated
increase in short-term (Bilateral Sources and Power Exchange) purchase by 2,886.33 MU
at Rs. 3.73 per unit in FY 2019-20 as compared to FY 2018-19. Therefore, the quantum of
short-term purchase has been higher than the estimated quantum from short-term
sources.The Commission has verified that actual purchase made in H1 of FY 2019-20 is
through competitive bidding platform from DEEP portal.
The Commission observed that the average rate of Rs. 3.73 per kWh is lower than the
revised approved ceiling rate of Rs. 5.0 per kWh as approved by the Commission vide Order
in Case No. 335 of 2018 for FY 2019-20. Further, though the rate is higher than that in the
previous year, it is still lower than the VIPL-G rate. The Commission has therefore,
accepted the short-term power purchase rate as submitted by AEML-D for FY 2019-20.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 211 of 445
AEML-D is directed to submit detailed justification with documentary proof on the final
rate discovered through DEEP Portal at the time of Truing-up of FY 2019-20.
The Commission for the purpose of estimation has considered the actual procurement of
short-term sources in H1 of FY 2019-20 and accordingly approved the same for FY 2019-
20. The actual rates from these short-term sources in H1 have been considered for the
purpose of projection for FY 2019-20.
The Commission has considered the balance purchase of energy requirement after
considering the power purchase quantum from short-term contracted sources of FY 2019-
20, to be met through Power Exchanges. The rate considered for purchase from Power
Exchanges is equal to the actual rate in H1 of FY 2019-20.
Banking of Energy
The Commission observed that AEML-D has made certain banking transactions in FY
2018-19 and FY 2019-20. The Commission asked AEML-D to submit the details of the
banking transactions. AEML-D submitted that it had received 470.41 MU in FY 2018-19
under banking arrangement, against which it had paid only OA charges and Trading Margin
in FY 2018-19. The energy was returned in FY 2019-20 for which Energy Charges, OA
charges and Trading Margin are claimed in the Petition.
In FY 2019-20, AEML-D received 226.80 MU of energy under Banking Arrangement for
which OA charges are claimed in FY 2019-20. The energy shall be returned in FY 2020-21
and consequent cost of energy with OA charges and Trading Margin shall be claimed in FY
2020-21.
In view of the above clarification, the quantum of banking energy is received in previous
year while the cost of energy purchase is booked in the subsequent year. The Commission
analysed the banking energy received in FY 2018-19 and the cost booked in H1 of FY 2019-
20. The per unit cost of the banking transaction works out to Rs. 4.04 per unit.
The Commission is of the view that energy banking transaction should benefit the end
consumers by bringing down the average power purchase cost of AEML-D. The
Commission observed that in FY 2018-19, there was significant reduction in generation of
VIPL-G, and AEML-D had to rely on short-term/Power Exchanges to meet its power
purchase quantum. The rates discovered in Power Exchanges during FY 2018-19 were quite
high as compared to FY 2019-20. AEML-D has purchased power at average rate of Rs.
4.60 per unit from IEX during FY 2018-19. From the above, it can be concluded that the
banking transaction made by AEML-D in FY 2018-19 for which the cost is booked in FY
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 212 of 445
2019-20 is a beneficial transaction since the energy rate for the return banking transaction
is lower than the IEX rate in that year.
However, the Commission feels that the energy rate of Rs. 4.04 per unit for the return
banking transaction is still on a higher side and AEML-D needs to review its banking
arrangements in order to further bring down the cost of banking transactions. The
Commission therefore, approves the cost of banking claimed in FY 2019-20 for provisional
Truing-up. The Commission also directs AEML-D to further evaluate its banking
arrangements with the contracted parties and substantiate and submit the party-wise
benefits of such transactions at the time of filing of Truing-up Petition for FY 2019-20. The
Commission has dealt with the cost of energy received in FY 2019-20 that has been claimed
in FY 2020-21, in the subsequent MYT Chapter.
The Commission has considered the submission of AEML-D, whereby it has claimed the
actual quantum of Standby arrangement from MSEDCL and Imbalance Pool in H1 of FY
2019-20. The Commission has not considered any cost against such quantum as submitted
by AEML-D, in the provisional truing up of FY 2019-20. The Commission has dealt with
the matter of cost of Imbalance Pool in the Chapter on Cumulative Revenue Gap till FY
2019-20.
Accordingly, the Commission has provisionally approved the power procurement from the
short-term sources in FY 2019-20, as shown in the Table below:
Table 0-26: Short Term Power Purchase for FY 2019-20 as provisionally approved
by the Commission
Particulars
MTR Order AEML-D Petition Approved after Provisional
truing up
Quantum Cost Rate per
Unit Quantum Cost
Rate per
Unit Quantum Cost
Rate per
Unit
(MU) (Rs.
Crore)
(Rs/
kWh) (MU)
(Rs.
Crore)
(Rs/
kWh) (MU)
(Rs.
Crore)
(Rs/
kWh)
Bilateral / Power
Exchanges 5,448.07 2,029.83 3.73 5,369.61 2,013.15 3.75
Cost of banked
energy 226.80 210.21 - 226.80 210.21 -
Standby
Arrangement 4.40 - - 4.40 - -
State Imbalance
Pool 500.17 - - 500.17 - -
Total Short-
Term Purchase - - - 6,179.44 2,242.94 3.63 6,100.97 2,223.36 3.64
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 213 of 445
The weighted average per unit rate for procurement of short-term purchase during FY 2019-
20 works out to Rs. 3.64 per unit.
1.60.5 Sale of Surplus Power
AEML-D’s Submission
There was no sale of surplus power through Power Exchange in H1 of FY 2019-20. In order
to estimate the surplus quantum in H2 of FY 2019-20, AEML-D has considered the hourly
demand forecast and generation / availability forecast from firm sources in H2 of FY 2019-
20. Wherever the generation from firm sources in any time block was more than the energy
requirement, generation from the ADTPS is reduced (backed down) up to its technical
minimum. The excess available generation (since the sources have to run at technical
minimum level) from firm sources over demand will be sold through Power Exchanges.
Most of the surplus sale occurs during off-peak periods (night hours) when the demand of
AEML-D consumers is low. For estimating the revenue from sale of surplus power, AEML-
D has considered the average MCP of night period (10:00 Hours to 06:00 Hours) of W2
region of IEX for H1 of FY 2019-20, which works out to Rs. 3.20/kWh. Considering a
margin of Rs. 0.17/kWh towards OA charges payable, the net realisable rate of surplus sale
is considered at Rs. 3.03/kWh. AEML-D has considered this rate for estimating the revenue
from sale of surplus power in H2 of FY 2019-20 The details of sale of surplus power in FY
2019-20 (provisional actuals) are as under:
Table 0-27: Sale of Surplus Power in FY 2019-20 as submitted by AEML-D
Particulars MTR Order AEML-D Petition
Quantum (MU) (632.04) (6.78)
Rate (Rs. / kWh) 3.59 3.03
Cost (Rs. Crore) (226.75) (2.05)
Commission’s Analysis and Ruling
There was no sale of surplus power through Power Exchange in H1 of FY 2019-20. The
Commission has considered the balance amount of energy requirement to be purchased
from Power Exchanges, after considering all the purchase from contracted long-term/short-
term sources. Therefore, the Commission has not considered any surplus sale for FY 2019-
20 as there is no surplus power considered to be procured in FY 2019-20. Any such quantum
and revenue shall be considered at the time of true-up for FY 2019-20, based on prudence
check.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 214 of 445
1.60.6 Power purchase cost from OA consumers
AEML-D’s Submission
The actual cost of power purchase from OA consumers as per DOA Regulations, 2016 in
H1 of FY 2019-20 is Rs. 2.90 Crore, for the purchase done in FY 2018-19. No additional
purchase cost has been estimated at present for H2 of FY 2019-20, and the same shall be
presented at the time of true-up.
Commission’s Analysis and Ruling
The Commission will take a considered view regarding the quantum of purchase at the time
of True up of FY 2019-20, based on the detailed submissions to be made by AEML-D.
1.60.7 Payment towards WRPC DSM bills
AEML-D’s Submission
As discussed in the true-up of FY 2018-19, each DISCOM is required to pay 25% interim
share towards WRPC bills. Accordingly, AEML-D pays the WRPC bills as per the
provisional bills raised by MSLDC. The actual payment made in H1 of FY 2019-20 is
included in the power purchase cost for H1 of FY 2019-20. However, no estimates of the
same have been made for H2 of FY 2019-20. The actual payment made shall be claimed at
the time of truing up of FY 2019-20.
Commission’s Analysis and Ruling
The Commission has allowed the actual amount paid in H1 of FY 2019-20, to the extent of
Rs. 11.16 Crore in the provisional Truing-up of FY 2019-20.
1.60.8 Impact on Hon’ble Supreme Court Judgment regarding Additional Energy
Charges (AEC)
AEML-D’s Submission
The Hon’ble Supreme Court in its interim Order dated 14 December, 2009 in CA No 4161
of 2008 and 4423 of 2008 has directed AEML to deposit Rs. 25 Crore and furnish Bank
Guarantee (BG) of Rs. 10 Crore. AEML had complied with the said order. The amount of
Rs. 25 Crore was withdrawn by TPC as per the said Order of the Hon’ble Supreme Court.
The Civil Appeals of AEML and TPC were finally disposed of by the Hon’ble Supreme
Court by its Judgment dated 23 July, 2019, wherein it has upheld the Order of Hon’ble
APTEL but reduced the interest to 9% p.a. As per the said Judgment, TPC raised a demand
of Rs. 41.92 Crore in September 2019. The said amount of Rs. 41.92 Crore has been paid
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by AEML-D to TPC-D and included in the estimated power purchase cost of FY 2019-20.
Balance amount of Rs. 47.88 Crore is shown separately to be recovered through tariff.
Commission’s Analysis and Ruling
In line with the direction of the Hon’ble Supreme Court, the Commission has considered
the amount of Rs. 41.92 Crore to be passed in power purchase for provisional; Truing-up
of FY 2019-20. The balance amount pending to be paid is included separately in the
Cumulative Revenue Gap/(Surplus).
1.60.9 TRANSMISSION, MSLDC AND STANDBY CHARGES
1.60.9.1 Transmission Charges
AEML-D’s Submission
The actual transmission charges paid by AEML-D in H1 of FY 2019-20 are Rs. 199.38
Crore. Similarly, for H2 of FY 2019-20, Transmission Charges of Rs. 199.34 Crore is
payable by AEML-D. The summary of Transmission Charges for FY 2019-20 is shown in
Table below:
Table 0-28: Transmission Charges for FY 2019-20 as submitted by AEML-D (Rs.
Crore)
Particulars MTR Order AEML-D Petition
Transmission Charges 398.72 398.72
STU has levied charges of Rs. 4.40 Crore as Additional Transmission Charges, in addition
to the charges for Base TCR as approved in the InSTS Order for FY 2019-20. AEML-D
has not claimed any charges. AEML-D requested the Commission to provide clarity
regarding the billing of the same in accordance with the provisions of MYT Regulations,
2015 and the approved Power Procurement plan.
Commission’s Analysis and Ruling
The Commission has approved the actual Transmission Charges paid by AEML-D for H1
of FY 2019-20 and estimated for H2 of FY 2019-20, as the same are in accordance with the
Transmission Charges approved by the Commission in the MTR Order, as shown in the
Table below:
Table 0-29: Transmission Charges for FY 2019-20 approved by Commission (Rs.
Crore)
Particulars
FY 2019-20
MTR Order AEML-D
Petition
Approved after
provisional truing up
Transmission Charges 398.72 398.72 398.72
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The Commission has not considered the Additional Transmission Charges levied by STU
in the provisional truing up for FY 2019-20. The same shall be considered based on actuals
at the time of truing up, if applicable.
1.60.9.2 MSLDC Charges
AEML-D’s Submission
The actual SLDC charges paid by AEML-D in H1 of FY 2019-20 are Rs. 1.00 Crore.
Similarly, for H2 of FY 2019-20, SLDC charges of Rs. 1.00 Crore is payable by AEML-D.
The summary of SLDC charges for FY 2019-20 is shown in the Table below:
Table 0-30: MSLDC Charges for FY 2019-20 as submitted by AEML-D (Rs. Crore)
Particulars MTR Order AEML-D Petition
MSLDC Charges 2.00 2.00
Commission’s Analysis and Ruling
The Commission has approved the MSLDC Charges estimated by AEML-D for FY 2019-
20, as the same are in accordance with the MSLDC Charges approved by the Commission
in the MTR Order, as shown in the Table below:
Table 0-31: MSLDC Charges for FY 2019-20 approved by Commission (Rs. Crore)
Particulars MTR Order AEML-D
Petition
Approved after
provisional truing up
MSLDC Charges 2.00 2.00 2.00
1.60.9.3 Stand-by Charges
AEML-D’s Submission
The actual Standby charges paid by AEML-D in H1 of FY 2019-20 is Rs. 91.16 Crore.
Similarly, for H2 of FY 2019-20, Standby charges of Rs. 91.16 Crore is payable by AEML-
D. The summary of Standby charges for FY 2019-20 is shown in table below:
Table 0-32: Stand-by Charges for FY 2019-20 as submitted by AEML-D (Rs Crore)
Particulars MTR Order AEML-D Petition
Stand-by Charges 182.32 182.32
Commission’s Analysis and Ruling
The Commission has approved the Standby Charges submitted by AEML-D, as the same
are in accordance with the Standby Charges approved by the Commission in MTR Order,
as shown in the Table below:
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Table 0-33: Stand-by Charges for FY 2019-20 as approved by Commission (Rs.
Crore)
Particulars MTR Order AEML-D Petition Approved after
provisional truing up
Stand-by Charges 182.32 182.32 182.32
1.60.10SUMMARY OF POWER PURCHASE
AEML-D Submission
The summary of estimated power purchase quantum and cost for FY 2019-20 as against the
quantum and cost approved by the Commission in AEML-D’s MTR Order is as under:
Table 0-34: Power Purchase for FY 2019-20 as submitted by AEML-D
Source
MTR Order AEML-D Petition
Quantum
(MU)
Cost (Rs.
Crore)
Rate (Rs.
/ kWh)
Quantum
(MU)
Cost (Rs.
Crore)
Rate (Rs.
/ kWh)
DTPS 3,775.15 1,620.73 4.29 3,248.02 1,557.80 4.80
VIPL 4,000.97 1,759.25 4.40 (2.23) (1.73) 7.75
DSPPL 68.70 70.75 10.30 62.12 63.99 10.30
New Solar 437.43 118.98 2.72 0 0
Non-Solar - Existing
sources 204.83 107.82 5.26 207.74 109.62 5.28
New Non-Solar 2,432.34 703.78 2.89 0 0
Short Term Purchase 6,179.44 2,240.04 3.63
Purchase from OA 2.90
Surplus Sale (632.04) (226.75) 3.59 (6.78) (2.05) 3.03
Impact of SC Judgment
(AEC matter) 41.92
WRPC DSM Bills 11.16
Sub-Total 10,287.38 4,154.56 4.04 9,688.32 4,023.64 4.15
Transmission Charges 398.72 398.72
SLDC Charges 2.00 2.00
Standby Charges 182.32 182.32
Total 10,287.38 4,737.60 4.61 9,688.32 4,606.68 4.75
Commission’s Analysis and Ruling
Based on the source-wise approval of power purchase as discussed above, the power
purchase quantum and cost approved after provisional truing-up for FY 2019-20 is as shown
in the following Table:
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Table 0-35: Power Purchase for FY 2019-20 approved by the Commission (MU)
Particulars
MTR Order AEML-D Petition Approved after provisional
truing up
Quantu
m
(MU)
Cost
(Rs.
Crore)
Rate
(Rs./
kWh)
Quantu
m
(MU)
Cost
(Rs.
Crore)
Rate
(Rs./
kWh)
Quantu
m
(MU)
Cost
(Rs.
Crore)
Rate
(Rs./
kWh)
DTPS 3,775.15 1,620.73 4.29 3,248.02 1,557.80 4.80 3,290.05 1,573.45 4.78
VIPL 4,000.97 1,759.25 4.40 (2.23) (1.73) 7.75 (2.23) (1.73) 7.75
DSPPL 68.70 70.75 10.30 62.12 63.99 10.30 62.12 63.99 10.30
New Solar 437.43 118.98 2.72 0 0 0 0 0
Non-Solar - Existing
sources 204.83 107.82 5.26 207.74 109.62 5.28 207.74 109.97 5.29
New Non-Solar 2,432.34 703.78 2.89 0 0
Short Term Purchase 6,179.44 2,240.04 3.63 6,100.97 2,223.36 3.64
Cost of OA consumer 2.90 -
Surplus Sale (632.04) (226.75) 3.59 (6.78) (2.05) 3.03 0 0 0
Impact of SC
Judgment (AEC
matter)
41.92 41.92
WRPC DSM Bills 11.16 11.16
Sub-Total 10,287.38 4,154.56 4.04 9,688.32 4,023.64 4.15 9,658.66 4,022.12 4.16
Transmission
Charges 398.72 398.72 398.72
SLDC Charges 2.00 2.00 2.00
Standby Charges 182.32 182.32 182.32
Total 10,287.38 4,737.60 4.61 9,688.32 4,606.68 4.75 9,658.66 4,605.16 4.77
1.61 OPERATION AND MAINTENANCE EXPENSES
AEML-D Submission
AEML-D submitted the actual O&M expense for H1 of FY 2019-20. AEML-D submitted
that the next wage revision of Unionized employees and contract labour will be made in FY
2020-21, which is effective from July 2018. Therefore, it has made wage revision provision
in its books of accounts (Rs 22.5 Crore towards Employee Expenses and Rs. 13 Crore
towards wage revision effect on contract labour cost booked in R&M Expenses). However,
the same has not been considered in actual H1 of FY 2019-20.
AEML-D submitted that it has considered the Base O&M expenses of FY 2018-19 as
approved in the MTR Order dated 12 September 2018 and the escalation factor of 4.07%
as worked out for FY 2018-19 true-up has been applied to arrive at the allowable normative
O&M expenses of FY 2019-20. The escalation factor has been considered up to FY 2018-
19 only at present as FY 2019-20 index numbers are available till August/September only.
AEML-D submitted that in accordance with the reasoning given in the section on truing up
of FY 2018-19, Efficiency Factor of 1% has not been considered, in view of the fact that
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the inflation based escalation factor is itself very moderate and reducing it further would
squeeze the cash available to manage its day to day operations effectively.
Further, in accordance with the Judgment of the Hon’ble Supreme Court on the issue of
contribution to Provident Fund, an additional impact on O&M expenses of Rs. 4.22 Crore
is estimated and included in O&M cost for FY 2019-20. As per MYT Regulations, 2015
the above falls under definition of “Change in Law” (Regulation 2.1 (14)). Thus, the same
may be considered as uncontrollable as per Regulation 9.1 (b) and claimed to be allowed
above the normative O&M expenses for FY 2019-20. The summary of the O&M expenses
as estimated by AEML-D for FY 2019-20 for Wires and Supply Business is shown in the
Table below:
Table 0-36: Summary of O&M Expenses for FY 2019-20 for Wires Business as
submitted by AEML-D (Rs Crore)
Particulars / (Rs. Crore)
Approved for
FY 18-19 in
MTR Order
Escalation
Rate (%)
Allowable for
FY 19-20
Base O&M Expense 851.79 4.07% 886.46
Impact of GST on O&M Expenses 8.37
Impact of SC Judgment / GoM
notification on O&M Expense 8.16
Total 851.79 902.99
Table 0-37: Summary of O&M Expenses for FY 2019-20 for Retail Supply Business
as submitted by AEML-D (Rs Crore)
Particulars / (Rs. Crore)
Approved for
FY 18-19 in
MTR Order
Escalation
Rate (%)
Allowable for
FY 19-20
Base O&M Expense 420.22 4.07% 437.32
Impact of GST on O&M Expenses 2.19
Impact of SC Judgment / GoM
notification on O&M Expense 4.03
Total 420.22 443.54
The summary of Wires and Supply O&M expenses for FY 2019-20 is shown in table below:
Table 0-38: Summary of O&M Expenses for FY 2019-20 for Wires and Retail
Supply Business as submitted by AEML-D (Rs Crore)
Particulars / (Rs. Crore)
Approved for
FY 18-19 in
MTR Order
Escalation
Rate (%)
Allowable for
FY 19-20
Base O&M Expense 1,272.01 4.07% 1,323.78
Impact of GST on O&M Expenses 10.55
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Particulars / (Rs. Crore)
Approved for
FY 18-19 in
MTR Order
Escalation
Rate (%)
Allowable for
FY 19-20
Impact of SC Judgment / GoM
notification on O&M Expense 12.19
Total 1,272.01 1,346.52
AEML-D also submitted that there are certain ongoing litigations between AEML and
Employee Unions / other statutory authorities. In case of adverse impact of the litigations
on AEML, the expenses incurred shall be claimed separately by AEML-D in future
Petitions. The nature of such expenses will decide whether it is to be claimed as a one-time
expense or a recurring one, which will require a revision in Base O&M expenses for the
next Control Period.
Commission’s Analysis and Ruling
For the provisional truing up of FY 2019-20, the Commission has escalated the trued up
Normative O&M Expenses for FY 2018-19 as approved in this Order, by the Escalation
Factor of 3.07% worked out for FY 2018-19 as per MYT Regulations, 2015, to arrive at the
Normative O&M Expenses for FY 2019-20. The Commission has excluded the Access
Charges and Way leave Charges allowed separately in FY 2018-19, at the time of
considering the base expenses for projecting O&M expense for FY 2019-20. The
Commission shall take a view on these charges at the time of Truing-up pf FY 2019-20.
AEML-D has estimated an impact of Rs. 12.19 Crore on account of the Judgment of the
Hon’ble Supreme Court on the issue of contribution to Provident Fund and incremental
gratuity pay out to employees due to the revision in wages on account of the GoM Order.
The Commission is of the view that though these are legitimate expenses, which are bound
to be incurred in FY 2019-20, it would be appropriate to consider these expenses on the
basis of actual payout at the time of Truing-up of FY 2019-20, rather than on estimation
basis.
The Commission in accordance with the methodology adopted in Truing-up of FY 2018-
19 has not considered the Impact of GST as claimed by AEML-D for FY 2019-20.
Accordingly, the Commission has approved the O&M Expenses as shown in the Table
below:
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Table 0-39: O&M Expenses for FY 2019-20 for Wires Business as approved by the
Commission (Rs. Crore)
Particulars / (Rs. Crore)
Approved for
FY 2018-19 in
this Order
Escalation
Rate (%)
Allowable for
FY 2019-20
Base O&M Expense 825.38 3.07% 850.72
Impact of GST on O&M Expense -
Impact of SC Judgment / GoM
notification on O&M Expense -
Total 850.72
Table 0-40: O&M Expenses for FY 2019-20 for Retail Supply Business as approved
by the Commission (Rs. Crore)
Particulars / (Rs. Crore)
Approved for
FY 2018-19 in
this Order
Escalation
Rate (%)
Allowable for
FY 2019-20
Base O&M Expense 407.18 3.07% 419.68
Impact of GST on O&M Expense -
Impact of SC Judgment / GoM
notification on O&M Expense -
Total 419.68
Table 0-41: O&M Expenses for FY 2019-20 for Wires and Retail Supply Business as
approved by the Commission (Rs. Crore)
Particulars / (Rs. Crore)
Approved for
FY 2018-19 in
this Order
Escalation
Rate (%)
Allowable for
FY 2019-20
Base O&M Expense 1,232.57 3.07% 1,270.41
Impact of GST on O&M Expense -
Impact of SC Judgment / GoM
notification on O&M Expense -
Total 1,270.41
1.62 CAPITAL EXPENDITURE AND CAPITALISATION
AEML-D Submission
AEML-D submitted that at the time of MTR, many of the capex schemes were pending for
approval with the Commission. Accordingly, in the MTR Order, the Commission only
provisionally considered 20% of the capitalisation towards such schemes and hence, the
projected capitalisation as considered in the MTR Order was on the lower side.
Subsequently, several DPR schemes have been approved by the Commission. Accordingly,
the revised projections of FY 2019-20 include the likely capitalisation against all those
schemes as well, based on the progress of indenting / works. The actual capital expenditure
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and capitalization in H1 of FY 2019-20 and estimated capital expenditure and capitalization
in H2 of FY 2019-20 in Wires Business is shown in table below:
Table 0-42: Capital Expenditure and Capitalization for Wires Business for FY 2019-
20
Particulars / (Rs.
Crore) MTR Order
H1 of FY 19-
20 -
Provisional
Actuals
H2 of FY 19-
20 - Estimates
FY 19-20
(Total) -
Estimates
Capital Expenditure - 226.44 514.53 740.97
Capitalization 216.01 66.24 639.71 705.95
AEML-D has submitted Services New Connection DPR (Extension) for FY 19-20 to the
Commission on 24 October 2019, which is awaiting in-principle approval. AEML-D has
included the capital expenditure estimated for the said DPR, in the Capital expenditure for
H2 of FY 19-20 shown in table above.
As seen from above, most of the capitalization is proposed to be made in H2 of FY 19-20.
This is in line with the historical trend of capitalization, because first half is mostly monsoon
months where excavation permission is not available from MCGM.
The actual capital expenditure and capitalization in H1 of FY 19-20 and estimated for H2
of FY 19-20 for Supply Business are shown in table below:
Table 0-43: Capital Expenditure and Capitalization for Retail Supply Business for
FY 2019-20
Particulars MTR
Order
H1 of FY 19-20
- Provisional
Actuals
H2 of FY 19-20 -
Estimates
FY 19-20
(Total) –
Estimates
Capital Expenditure 8.48 163.36 171.84
Capitalization 21.99 8.48 163.36 171.84
AEML-D has submitted Smart Metering DPR on 21 May 2019, which has been accorded
in-principle approval vide MERC Order dated 22 October 2019. AEML-D has also
submitted a DPR for Automatic Meter Reading using 4G cellular modems DPR to the
Commission vide letter dated 22 July 2019, which is awaiting approval. AEML-D has
included the capital expenditure and capitalization estimated against these DPRs in FY
2019-20 in H2 of FY 2019-20 shown in table above.
For H2 of FY 2019-20, AEML-D has considered asset-class wise capitalization in the
proportion of asset class wise capitalization of FY 2018-19. AEML-D has calculated
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Interest During Construction (IDC) on provisional basis on assets capitalized in Wires
Business using appropriate interest rates.
Commission’s Analysis and Ruling
In a clarification sought by the Commission, AEML-D submitted that there have been cost
over-runs in some schemes due to uncontrollable factors such as due to the higher RI
charges actually paid to MCGM and increase in labour charges due to wage Revision.
As discussed in the earlier Chapter on Truing up for FY 2017-18 and FY 2018-19, there is
cost overrun in certain Schemes, and the capitalisation against certain Schemes has already
been capped up to the approved Scheme cost. Hence, for such Schemes, the capitalisation
claimed by AEML-D has not been allowed, as detailed below:
i. Services (16-17) New Supply: AEML-D claimed capitalization of Rs. 1.37 Cr. and
IDC of Rs 0.02 Cr., which has been disallowed, as the Scheme cost has exceeded the
DPR approved cost.
ii. LT Mains (17-18) New Supply: AEML-D claimed capitalization of Rs. 0.46 Crore,
which has been allowed by the Commission. However, final capitalisation will be
approved based on the third-party verification. AEML-D is directed to inform the
Commission immediately after completion of the scheme.
iii. LT Mains (17-18) Improvement: AEML-D claimed capitalization of Rs. 0.39 Crore,
which has been allowed by the Commission. However, final capitalisation will be
approved based on the third-party verification. AEML-D is directed to inform the
Commission immediately after completion of the scheme.
iv. Services (17-18) New Supply: AEML-D claimed capitalization of Rs. 5.35 Crore. and
IDC of Rs 0.08 Crore, which has been disallowed, as the Scheme cost has exceed the
DPR approved cost.
v. Services (17-18) Improvement: AEML-D claimed capitalization of Rs. 1.11 Cr. and
IDC of Rs 0.02 Cr, which has been disallowed, as the Scheme cost has exceeded the
DPR approved cost.
vi. Street Light (16-17) New Supply: AEML-D submitted that the execution of street
light schemes is an obligation on part of AEML-D, and is thus "mandatory" in nature.
AEML claimed capitalisation of Rs. 0.20 crore, which has been approved by the
Commission.
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For the few other schemes there is no cost overrun. However, third party verification may
be carried out after the scheme completion. The Schemes covered under third party
verification for the Control Period are LT mains scheme new supply and Improvement,
services New Supply and Improvement, 11 kV network strengthening schemes new Supply
and improvement. Considering third party verification, the capitalization is being allowed
as claimed (which is below DPR approved cost) on provisional basis for each year and final
capitalization shall be approved after third party verification.
The following Table shows the approved capitalization for FY 2019-20:
Table 0-44: Capitalization approved by the Commission for FY 2019-20
(Rs. Crore) Particulars
MTR Order AEML-D Petition Approved after
provisional truing up
Wires Supply Total Wires Supply Total Wires Supply Total
DPR Schemes 151.66 21.99 173.65 601.98 171.84 773.82 598.72 22.00 620.72
Non DPR Schemes 34.01 - 34.01 62.03 62.03 62.03 - 62.03
20% towards planned
/ unplanned DPRs yet
to be approved
30.33 - 30.33 41.94 41.94 - -
Total 216.01 21.99 238.00 705.95 171.85 877.84 660.75 22.00 682.75
1.63 DEPRECIATION
AEML-D’s Submission
AEML-D submitted that it has computed depreciation on provisional basis by considering
the asset class-wise average depreciation rate for FY 2018-19. Consumer contribution
received in H1 of FY 2019-20 is Rs. 10.50 Crore. AEML-D has considered the expected
consumer contribution in H2 of FY 2019-20 at the same level of Rs. 10.50 Crore.
Depreciation on consumer contribution estimated for Wires Business is not considered, in
accordance with the MYT Regulations. 2015. The estimate of depreciation for Wires
Business for FY 2019-20 is shown in table below:
Table 0-45: Depreciation in FY 2019-20 for Wires Business as submitted by AEML-
D (Rs. Crore)
Particulars MTR
Order
AEML-D Petition
With CC
Consumer
Contributio
n (CC)
Without
CC
Opening GFA 5,412.25 5,995.37 406.36 5,589.01
Addition 187.28 705.96 21.01 684.95
Retirement 0 9.18 0.63 8.55
Closing GFA 5,599.53 6,692 426.74 6,265.41
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Particulars MTR
Order
AEML-D Petition
With CC
Consumer
Contributio
n (CC)
Without
CC
Depreciation 233.14 274.95 256.48
Depreciation (% of Av. Balance) 4.23% 4.33% 4.33%
Actual asset retirement in H1 of FY 2019-20 has been considered while computing
depreciation. No asset retirement has been estimated for H2 of FY 2019-20 at present. The
estimated depreciation for Supply Business for FY 2019-20 is shown in the table below
Table 0-46: Depreciation in FY 2019-20 for Supply Business as submitted by AEML-
D (Rs. Crore)
Particulars MTR Order AEML-D Petition
Opening GFA 551.50 504.87
Addition 21.99 171.84
Retirement 0.00 5.88
Closing GFA 573.49 670.83
Depreciation 23.38 27.70
Depreciation (as % of average balance) 4.16% 4.71%
Commission’s Analysis and Ruling
For computation of Depreciation for FY 2019-20, the Commission has considered the
Opening Balance of GFA as the Closing Balance of GFA net of CC as approved in the final
True up for FY 2018-19 in this Order. The Commission has considered asset addition for
FY 2019-20 in line with the approved Capitalisation elaborated above. The Commission
has considered asset retirements in line with the submissions of AEML-D for provisional
Truing-up. .. The CC for asset addition during the year has been considered in proportion
to the Consumer Contribution received in FY 2017-18 and FY 2018-19 with regards to the
capitalization, and has been reduced from the addition to GFA, for the purpose of
computation of Depreciation for the Wires Business, in accordance with the MYT
Regulations, 2015. Accordingly, the Commission has approved the Depreciation for FY
2019-20 as shown in the Tables below:
Table 0-47: Depreciation for Wires Business for FY 2019-20 as approved by the
Commission (Rs. Crore)
Particulars
FY 2019-20
MTR Order AEML-D
Petition
Approved after
provisional truing up
Opening GFA 5,412.25 5,589.01 5,547.17
Addition 187.28 684.95 613.59
Retirement 0 8.55 8.55
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Particulars
FY 2019-20
MTR Order AEML-D
Petition
Approved after
provisional truing up
Closing GFA 5,599.53 6,265.41 6,152.20
Depreciation 233.14 256.48 256.27
Depreciation (as % of GFA) 4.23% 4.33% 4.38%
Table 0-48: Depreciation for Supply Business for FY 2019-20 as approved by the
Commission (Rs. Crore)
Particulars
FY 2019-20
MTR Order AEML-D
Petition
Approved after
provisional truing up
Opening GFA 551.50 504.87 505.99
Addition 21.99 171.84 22.00
Retirement 0.00 5.88 5.88
Closing GFA 573.49 670.83 522.11
Depreciation 23.38 27.70 26.00
Depreciation (as % of GFA) 4.16% 4.71% 5.06%
1.64 FINANCING PLAN AND INTEREST EXPENSES
AEML-D’s Submission
AEML-D submitted that some loans have been tied up for the proposed capex during the
year, while others are under negotiation. However, AEML-D shall fund its capital
expenditure requirement by debt to the extent of 70% only. Therefore, for the purposes of
ARR and tariff for FY 2019-20, AEML-D has considered normative funding of capex
schemes in the ratio of 70:30 for the purpose of computation of RoE and Interest on loan.
As per the MYT Regulations, 2015, interest expenses at the time of approving ARR shall
be allowed on the basis of weighted average interest rate of opening balance of all existing
actual loans for the year. The weighted average interest rate of opening balance of loans in
the loan portfolio of AEML in FY 2019-20 is 9.05%. Accordingly, AEML-D has
considered this interest rate for calculation of interest expense on the normative loans for
FY 2019-20. 70% of the capitalization (net of consumer contribution estimated for FY 19-
20) has been considered as normative loan addition in FY 2019-20.
Table 0-49: Interest on Loans for FY 2019-20 as submitted by AEML-D (Rs. Crore)
Particulars MTR Order AEML-D Petition
Wires
Opening Balance 1,441.64 1,550.24
Addition of new loans 131.10 479.47
Repayment 233.14 256.48
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Page 227 of 445
Particulars MTR Order AEML-D Petition
Closing Balance 1,339.61 1,773.22
Interest 146.29 150.39
Supply
Opening Balance 90.87 70.50
Addition of new loans 15.39 120.29
Repayment 23.38 27.70
Closing Balance 82.87 163.08
Interest 9.14 10.57
Financing Charges
As explained earlier, other Finance Charges mainly comprise Service Fees and other bank
charges such as bank remittance charges, bank commission, stamp duty towards working
capital limit enhancement, consultancy charges for arranging loans, LC opening charges,
BG commission, etc. Since all these charges will depend on the actual loan borrowed and
Bank Charges incurred based on the business requirement, no estimation of Finance
Charges has been made at this stage. Actual Finance Charges incurred for FY 2019-20 shall
be claimed at the time of truing up of FY 2019-20.
Commission’s Analysis and Ruling
The Commission has considered the weighted average interest rate on the opening balance
of loans for FY 2019-20, in accordance with the MYT Regulations, 2015, as given below:
Table 0-50: Applicable Rate of Interest for FY 2019-20 (Rs. Crore)
Source of loan
Amount
outstanding as on 1
April, 2019
Applicable interest
rate as on 1 April, 2019
Consortium Loan 5,707.40 9.05%
SBI Bank 26.33 9.05%
Yes Bank 30.08 9.05%
Total 5,763.81 9.05%
The Commission has considered the closing balance of loan approved for FY 2018-19 as
the opening balance of loan for FY 2019-20. For assets capitalised in FY 2019-20, it has
considered 70% of the additional asset value as normative debt, in accordance with the
MYT Regulations, 2015. The repayment of loan has been considered equal to the
Depreciation allowed for the Year. Accordingly, the Commission has approved interest on
loan for FY 2019-20 as given in the following Table:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 228 of 445
Table 0-51: Interest Expenses for FY 2019-20 as approved by the Commission (Rs.
Crore)
Particulars MTR
Order
AEML-D
Petition
Approved after
provisional truing up
Wires Business
Opening Balance 1,441.64 1,550.24 1,523.10
Less: Reduction of normative loan due
to retirement of assets
Addition of new loans 131.10 479.47 447.82
Repayment 233.14 256.48 256.27
Closing Balance 1,339.61 1,773.22 1,714.65
Interest Rate (%) 9.05% 9.05%
Interest 146.29 150.39 146.51
Supply Business
Opening Balance 90.87 70.50 70.71
Less: Reduction of normative loan due
to retirement of assets
Addition of new loans 15.39 120.29 15.40
Repayment 23.38 27.70 26.00
Closing Balance 82.87 163.08 60.12
Interest Rate 9.05% 9.05%
Interest 9.14 10.57 5.92
1.65 RETURN ON EQUITY
AEML-D’s Submission
Return on Equity (RoE) has been determined by applying the rates specified in the MYT
Regulations, 2015. As stated earlier, Consumer Contribution received in H1 of FY 2019-
20 is Rs. 10.50 Crore. AEML-D has considered the expected consumer contribution in H2
of FY 2019-20 at the same level of Rs. 10.50 Crore. 30% of capitalization, net of consumer
contribution, has been considered as equity addition in FY 2019-20. The estimates of RoE
for the Wires Business and Supply Business for FY 2019-20 is shown in the Tables below:
Table 0-52: Return on Equity for FY 2019-20 for Wires Business as submitted by
AEML-D (Rs. Crore)
Particulars MTR Order AEML-D
Petition
Regulatory Equity at the beginning of the year 2,028.10 2,081.53
Capitalisation during the year 216.00 705.96
Consumer Contribution and Grants during the year
towards capital works 28.72 21.01
Equity portion of capitalisation during the year 56.19 205.49
Reduction in Equity Capital on account of
retirement / replacement of assets 0 2.75
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 229 of 445
Particulars MTR Order AEML-D
Petition
Regulatory Equity at the end of the year 2,084.29 2,284.26
Rate of Return (%) 15.50% 15.50%
Total RoE 318.71 338.56
Table 0-53: Return on Equity for FY 2019-20 for Supply Business as submitted by
AEML-D (Rs. Crore)
Particulars MTR Order AEML-D
Petition
Regulatory Equity at the beginning of the year 169.44 155.78
Capitalisation during the year 21.99 171.84
Consumer Contribution and Grants during the year
towards capital works
- 0
Equity portion of capitalisation during the year 6.60 51.55
Reduction in Equity Capital on account of
retirement / replacement of assets
0 0
Regulatory Equity at the end of the year 176.04 207.33
Rate of Return (%) 17.50% 17.50%
Total RoE 30.23 31.77
No asset retirement and corresponding reduction in regulatory equity has been estimated in
H2 of FY 19-20 at present.
Commission’s Analysis and Ruling
The Commission has computed RoE for FY 2019-20 in accordance with Regulation 28 of
the MYT Regulations, 2015. The Commission has considered the closing equity of FY
2018-19 as approved in the final true up in this Order, as the opening equity for FY 2019-
20. Additional equity has been approved as 30% of the approved Capitalisation in FY 2019-
20, after deducting the Consumer Contribution. The Commission has considered Consumer
Contribution in line with the submission of AEML-D. Further, 30% of the equity
corresponding to asset retirement during the year has been reduced to arrive at the amount
of equity eligible for returns as per the Regulations.
The rate of Return on Equity has been taken as 15.5% for the Wires Business and 17.5%
for the Supply Business, in accordance with Regulation 28 of the MYT Regulations, 2015.
The RoE approved by the Commission for Wires Business and Supply Business for FY
2019-20 is as shown in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 230 of 445
Table 0-54: Return on Equity for Wires Business and Supply Business for FY 2019-
20 as approved by the Commission (Rs. Crore)
Particulars MTR
Order
AEML-D
Petition
Approved after
provisional
truing up
Wires Business
Regulatory Equity at the beginning of the year 2,028.10 2,081.53 2,069.89
Capitalisation during the year 216.00 705.96 660.75
Consumer Contribution and Grants 28.72 21.01 21.01
Equity portion of capitalisation during the year 56.19 205.49 191.92
Equity portion of asset retired during the year 0 2.75 2.38
Regulatory Equity at the end of the year 2,084.29 2,284.26 2,259.44
Rate of Return (%) 15.50% 15.50% 15.50%
Total RoE 318.71 338.56 335.71
Supply Business
Regulatory Equity at the beginning of the year 169.44 155.78 155.78
Capitalisation during the year 21.99 171.84 22.00
Consumer Contribution and Grants - 0 0
Equity portion of capitalisation during the year 6.60 51.55 6.60
Equity portion of asset retired during the year 0 0 1.76
Regulatory Equity at the end of the year 176.04 207.33 160.62
Rate of Return (%) 17.50% 17.50% 17.50%
Total RoE 30.23 31.77 27.84
1.66 INTEREST ON WORKING CAPITAL
AEML-D’s Submission
AEML-D has calculated the interest on working capital for the Wires Business and Supply
Business in accordance with Regulation 31.3 and 31.4 of the MYT Regulations, 2015.
While there shall be actual working capital borrowings in FY 2019-20 as in the previous
year, the extent of the same and the interest cost thereon cannot be estimated at this stage.
Therefore, for provisional true-up, the normative working capital interest as per MYT
Regulations, 2015 has been considered. As per the MYT Regulations, 2015, the interest of
working capital on normative working capital while approving ARR shall be allowed at
SBI MCLR existing on the date of filing of Petition plus 150 basis points, which works out
to 9.50%. The same has been used for calculating interest on working capital for provisional
truing up of FY 19-20. The interest on working capital for Wires Business computation is
shown in table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 231 of 445
Table 0-55:Interest on Working Capital for FY 2019-20 for Wires Business as
submitted by AEML-D (Rs. Crore)
Particulars MTR Order AEML-D
Petition
O&M Expenses for a month 74.57 75.25
Maintenance spares at 1% of Opening GFA 59.53 59.95
One and half months of revenue from charges for
use of Distribution Wires
202.72 193.04
Total Working Capital 336.82 328.24
Rate of Interest (%) 9.45% 9.50%
Interest on Working Capital 31.83 31.18
The actual consumer security deposit as on 30 September 2019 is Rs. 456.72 Crore, while
it was Rs. 431.87 Crore on 31 March 2019. Thus, the additional security deposit received
in H1 of FY 2019-20 is Rs. 24.85 Crore. AEML-D has considered additional security
deposit of Rs. 24.85 Crore in H2 of FY 2019-20 as well. Thus, the estimated security deposit
on 31 March 2019 has been considered as Rs. 481.57 Crore. The interest on working capital
for Supply Business computation is shown in the table below:
Table 0-56:Interest on Working Capital for FY 2019-20 for Supply Business as
submitted by AEML-D (Rs. Crore)
Particulars MTR Order AEML-D
Petition
O & M Expenses for a month 36.79 36.96
Maintenance spares at 1% of Opening GFA 5.51 5.05
One and half months of revenue from sale of
electricity including revenue from CSS
728.51 807.63
Less:
Amount of Security Deposit from supply
consumers
447.31 481.57
One-month equivalent of cost of power purchased 290.73 252.71
Total Working Capital 32.77 115.35
Rate of Interest (%) 9.45% 9.50%
Interest on Working Capital 3.10 10.96
Commission’s Analysis and Ruling
The Commission has approved the IoWC for FY 2019-20 in accordance with Regulations
31.3 and 31.4 of the MYT Regulations, 2015. The Commission has considered the
applicable rate of IoWC as 9.50%, which is the SBI MCLR during FY 2019-20 plus 150
basis points. Accordingly, IoWC approved by the Commission is given in the Tables below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 232 of 445
Table 0-57: Interest on Working Capital for Wires Business for FY 2019-20
approved by the Commission (Rs. Crore)
Particulars
FY 2019-20
MTR
Order
AEML-D
Petition
Approved
after
provisional
truing up
O & M Expenses for a month 74.57 75.25 70.89
Maintenance spares at 1% of Opening GFA 59.53 59.95 55.47
One and half months of revenue from charges for
use of Distribution Wires 202.72 193.04 194.58
Total Working Capital 336.82 328.24 320.95
Rate of Interest (%) 9.45% 9.50% 9.50%
Interest on Working Capital 31.83 31.18 30.49
Table 0-58: Interest on Working Capital for Supply Business for FY 2019-20
approved by the Commission (Rs. Crore)
Particulars
FY 2019-20
MTR
Order
AEML-D
Petition
Approved
after
provisional
truing up
O & M Expenses for a month 36.79 36.96 34.97
Maintenance spares at 1% of Opening GFA 5.51 5.05 5.06
One and half months of revenue from sale of
electricity including revenue from CSS
728.51 807.63 801.64
Less:
Amount of Security Deposit from supply consumers 447.31 481.57 481.57
One-month equivalent of cost of power purchased 290.73 252.71 202.69
Total Working Capital 32.77 115.35 157.41
Rate of Interest (%) 9.45% 9.50% 9.50%
Interest on Working Capital 3.10 10.96 14.95
1.67 INTEREST ON CONSUMER’S SECURITY DEPOSIT
AEML-D’s Submission
As per MYT Regulations, 2015, the Interest on Consumer Security Deposit is to be allowed
at SBI MCLR as on 1 April of a financial year plus 150 Basis Points. The SBI MCLR
prevailing on 1 April 2019 was 8.55%. Accordingly, AEML-D has calculated the interest
on consumer security deposit by applying the interest rate of 10.05% to the average balance
of actual security deposit on 1 April 2019 and estimated security deposit on 31 March 2020.:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 233 of 445
Table 0-59: Interest on Consumer’s Security Deposit in FY 2019-20 as submitted by
AEML-D (Rs. Crore)
Particulars MTR Order AEML-D Petition
CSD as on 31.03.20 447.31 481.57
Interest on CSD 41.26 45.90
Commission’s Analysis and Ruling
The Commission has provisionally approved the interest on CSD for FY 2019-20 for the
Supply Business at Rs. 45.90 Crore, as estimated by AEML-D.
1.68 PROVISION FOR BAD AND DOUBTFUL DEBTS
AEML-D’s Submission
AEML-D has considered the provision for bad debts for FY 19-20 at the same level as
considered for truing up of FY 18-19 as per first proviso to Regulation 73 and 82 of MYT
Regulations, 2015.
Table 0-60: Provision for Bad and Doubtful Debts for FY 2019-20 as submitted by
AEML-D (Rs. Crore)
Particulars MTR Order AEML-D Petition
Provision for Bad Debts - Wires 2.61 3.37
Provision for Bad Debts - Supply 9.13 12.62
Provision for Bad Debts - Total 11.74 15.99
Commission’s Analysis and Ruling
Regulation 73 of the MYT Regulations, 2015 states as under:
“For any Year, the Commission may allow …
Provided that the Commission, in its MYT Order, shall provisionally approve provision
for bad and doubtful debts for each Year of the Control Period, based on the actual
provision for bad and doubtful debts made by the Distribution Licensee in the latest
Audited Accounts available for the Petitioner, as allowed by the Commission:
…”
The Commission has approved the provision for Bad and Doubtful Debts for FY 2019-20
as approved in Truing-up of FY 2018-19, in accordance with the above Regulations and as
per submissions of AEML-D. The following Table shows the Provision for Bad and
Doubtful Debts considered for FY 2019-20.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 234 of 445
Table 0-61: Provision for Bad and Doubtful Debts for FY 2019-20 approved by the
Commission (Rs. Crore)
Particulars MTR Order AEML-D
Petition
Approved after
provisional truing up
Wires Business 2.61 3.37 3.37
Supply Business 9.13 12.62 12.62
Total 11.74 15.99 15.99
1.69 CONTRIBUTION TO CONTINGENCY RESERVE
AEML-D’s Submission
AEML-D, in accordance with Regulation 34.1 of MYT Regulations, 2015, has considered
the contribution to contingency reserve equal to 0.25% of the respective opening GFA of
Supply Business and Wires Business for FY 2019-20. The Table below gives the summary
of contribution to Contingency Reserve for the Wires and Supply Business for FY 2019-
20:
Table 0-62: Contribution to Contingency Reserves in FY 2019-20 for Wires Business
as submitted by AEML-D (Rs. Crore)
Particulars MTR Order AEML-D Petition
Opening GFA 5,824.00 5,995.37
% Contribution 0.25% 0.25%
Contribution to CR 14.56 14.99
Table 0-63: Contribution to Contingency Reserves in FY 2019-20 for Supply
Business as submitted by AEML-D (Rs. Crore)
Particulars MTR Order AEML-D Petition
Opening GFA 552.00 504.87
% Contribution 0.25% 0.25%
Contribution to CR 1.38 1.26
Commission’s Analysis and Ruling
As per Regulation 34, the Contribution to Contingency Reserves in a year shall be between
0.25% and 0.50% of the original cost of fixed assets. The Commission has approved the
contribution to Contingency Reserves for Wires Business and Supply Business for FY
2019-20 at 0.25% of the approved value of the opening GFA for the respective Businesses
as shown in the following Table:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 235 of 445
Table 0-64: Contribution to Contingency Reserves for FY 2019-20 approved by the
Commission (Rs. Crore)
Particulars MTR Order AEML-D
Petition
Approved after
provisional truing up
Wires Business
Opening Balance of GFA 5,824.00 5,995.37 5,547.17
% Contribution 0.25% 0.25% 0.25%
Contribution to CR 14.56 14.99 13.87
Supply Business
Opening Balance of GFA 552.00 504.87 505.99
% Contribution 0.25% 0.25% 0.25%
Contribution to CR 1.38 1.26 1.26
Total Contribution to
Contingency Reserves 15.94 16.25 15.13
1.70 DSM EXPENSES
AEML-D’s Submission
The Commission had allowed DSM expenses of Rs. 3.84 Crore in FY 19-20 towards solar
water heating system program, large scale ceiling fan program and large-scale refrigerator
program. However, as stated in the section on truing up of FY 18-19, the response to the
two programs - large scale ceiling fan and large-scale refrigerator - has been very poor and
hence the expense on these programs is very less. The LMC fund balance at the beginning
of FY 19-20 is Rs. 1.48 Crore. The estimated expense on these two programs in FY 19-20
is Rs. 23.30 Lakh based on the estimated number of new installations in FY 19-20 and
hence the estimated balance of LMC fund at the end of FY 19-20 is likely to be Rs. 1.25
Crore. As these expenses would be met out of LMC fund, no additional amount is estimated
to be claimed from ARR in FY 19-20.
Table 0-65: DSM Expenses for FY 2019-20 as submitted by AEML-D (Rs. Crore)
Particulars MTR Order AEML-D Petition
DSM Expense 3.84 -
Commission’s Analysis and Ruling
The Commission considered the submissions of AEML-D and has not added any expenses
towards DSM in provisional Truing-up of FY 2019-20.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 236 of 445
1.71 INCOME TAX
AEML-D’s Submission
In the MTR Order in Case No. 200 of 2017, the Commission has considered the Income
Tax for FY 2019-20 at the same level as that approved for FY 2016-17. AEML-D is
engaged in more than one regulated businesses and therefore, in accordance with the
Regulations 33.1 of the MYT Regulations, 2015, the Income Tax for AEML-D has been
provisionally considered for FY 2019-20 at the same level as the actually payable Income
Tax for FY 2018-19 worked out on the basis of Regulated Profit Before Tax. Based on the
above reasoning, the Income Tax approved in the MTR Order and that re-estimated now is
provided in the Table below:
Table 0-66: Income Tax for FY 2019-20 as submitted by AEML-D (Rs. Crore)
Particulars MTR Order AEML-D Petition
Income Tax-Wires 62.61 84.73
Income Tax- Supply 191.84 480.85
Total 254.45 565.57
Commission’s Analysis and Ruling
Regulation 33.1 of the MYT Regulations, 2015 specifies as follows:
“33.1 The Commission, in its MYT Order, shall provisionally approve Income Tax
payable for each year of the Control Period based on the actual Income Tax paid
by the Generating Company or Licensee or MSLDC, in case the Generating
Company or Licensee or MSLDC has not engaged in any other regulated or
unregulated Business or Other Business, as allowed by the Commission relating to
the electricity Business regulated by the Commission, as per latest available Audited
Accounts, subject to prudence check :
…
Provided also that the Income Tax shall be computed for the Generating Company
as a whole, and not Unit-wise/Station-wise.”
The Commission has considered the same Income Tax as approved for FY 2018-19, in
accordance with the MYT Regulations, 2015. Accordingly, the Commission has approved
the Income Tax for FY 2019-20 as shown in the Table below:
Table 0-67: Income Tax for FY 2019-20 approved by the Commission (Rs. Crore)
Particulars MTR Order AEML-D
Petition Approved in this Order
Income Tax-Wires 62.61 84.73 89.34
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 237 of 445
Particulars MTR Order AEML-D
Petition Approved in this Order
Income Tax- Supply 191.84 480.85 507.03
Total 254.45 565.57 596.37
1.72 NON-TARIFF INCOME
AEML-D’s Submission
AEML-D has adopted the following approach for different components of Non-Tariff
Income of Wire Business as follows:
a) Interest on Contingency Reserve Investment: Earlier, the contingency reserve
investments were made in Govt. of India securities as per Indian Trust Act, 1882.
In FY 2019-20, AEML moved the Contingency Reserve investments from Govt. of
India securities to Mutual Funds. The interest received from Govt. of India
Securities on the contingency reserve investments in H1 of FY 2019-20 was Rs.
1.41 Crore. Further, the gains received from redemption of Mutual Fund
investments of contingency reserve was Rs. 0.89 Crore in H1 of FY 2019-20. Thus,
a total of Rs. 2.30 Crore (segregated between Wires Business and Supply Business
in the ratio of cumulative contingency reserve till FY 2019-20) has been considered
in Non-Tariff Income for H1 of FY 2019-20. For H2 of FY 2019-20, AEML-D has
estimated a further gain of Rs. 0.89 Crore from mutual fund investments of
contingency reserve in Non-Tariff Income (segregated between Wires Business and
Supply Business in the ratio of cumulative contingency reserve till FY 2019-20).
b) Land Usage Charges: As stated in the section of truing up of FY 2017-18 and FY
2018-19, the land usage charges payable by AEML-T to AEML-D has been
considered in the Non-Tariff Income for FY 2019-20.
c) Other Miscellaneous Receipt of Wires Business: AEML-D has received Rs. 52.44
Crore of AIH charges from MCGM/MBMC in H1 of FY 2019-20 for maintenance
of streetlights, which has been accounted as other miscellaneous receipts of Wires
Business. AEML-D has considered the same amount as estimate in H2 of FY 2019-
20.
d) Sale of Scrap: The income generated from sale of scrap in H1 of FY 2019-20 was
Rs. 1.75 Crore. Since there is no certainty of this income in future, AEML-D has
not estimated any income from sale of scrap in H2 of FY 2019-20.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 238 of 445
e) Insurance Claim received: The insurance claim received in H1 of FY 2019-20 was
Rs. 0.09 Crore. Since there is no certainty of this income in future, AEML-D has
not estimated any income from insurance claim in H2 of FY 2019-20.
f) Liabilities written back in Wires Business: There has been no revenue on account
of liabilities written back in H1 of FY 2019-20. However, AEML-D has estimated
the revenue from liabilities written back in FY 2019-20 at the same level as that of
FY 18-19.
AEML-D has estimated the other components of Non-Tariff Income for Wires Business for
FY 2019-20 by escalating their values for FY 2018-19 by 5%. The actual values in H1 of
FY 2019-20 were deducted from the estimated values for FY 2019-20 and were considered
for H2 of FY 2019-20. The summary of Non-Tariff Income for Wires Business for FY 19-
20 is as under:
Table 0-68: Non-Tariff Income in FY 2019-20 for Wires Business as submitted by
AEML-D (Rs. Crore)
Particulars MTR
Order
AEML-D
Petition
Rents of land & building 0.11
Sale of Scrap 1.75
Income from CR Investments 2.83
Other/Miscellaneous receipts 104.88
Interest on Other Investments 0.47
Liabilities no longer required written back 0.51
Insurance Claim received 0.09
Land Usage Charges 5.61
Total 113.50 116.24
AEML-D has adopted the following approach for different components of Non-Tariff
Income of Supply Business as follows:
a) Interest on Contingency Reserve Investment: As stated in earlier section, a total of
Rs. 2.30 Crore (segregated between Wires Business and Supply Business in the ratio
of cumulative contingency reserve till FY 19-20) has been considered in Non-Tariff
Income for H1 of FY 2019-20. For H2 of FY 2019-20, AEML-D has considered a
gain of Rs. 0.89 Crore from mutual fund investments of contingency reserve in Non-
Tariff Income (segregated between Wires Business and Supply Business in the ratio
of cumulative contingency reserve till FY 2019-20)
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Page 239 of 445
b) Rebate on Power Purchase Cost: AEML-D has availed rebate on power purchase
of Rs. 8.18 Crore in H1 of FY 2019-20. AEML-D has estimated the rebate on power
purchase in H2 of FY 2019-20 at the same level.
c) Recovery from Theft of Electricity: The recovery from theft of electricity in H1 of
FY 2019-20 is Rs. 0.40 Crore (provisional actuals). AEML-D has considered the
recovery from theft of electricity for FY 2019-20 at the same level as that of FY
2018-19 (Rs. 16.65 Crore). The difference of Rs. 16.25 Crore has been considered
in H2 of FY 2019-20.
AEML-D has estimated the other components of Non-Tariff Income for Supply Business
for FY 2019-20 by escalating their values for FY 2018-19 by 5%. The actual values in H1
of FY 2019-20 were deducted from the estimated values for FY 2019-20 and were
considered for H2 of FY 2019-20. The summary of Non-Tariff Income for Supply Business
for FY 2019-20 is as under:
Table 0-69: Non-Tariff Income in FY 2019-20 for Retail Supply Business as
submitted by AEML-D (Rs. Crore)
Particulars MTR Order AEML-D
Petition
Income from CR Investments 0.36
Income from consumer charges levied in accordance
with Schedule of Charges approved by the Commission
6.06
Income from recovery against theft and/or pilferage of
electricity
16.65
Other/Miscellaneous receipts 0.91
Rebate on power purchase 16.36
Burnt Meter Recovery 0.92
Total 38.99 41.25
Commission’s Analysis and Ruling
The Commission has provisionally accepted Non-Tariff Income estimated by AEML-D for
the Wires Business and Supply Business for FY 2019-20, as shown in the Table below:
Table 0-70: Non-Tariff Income for FY 2019-20 approved by Commission (Rs. Crore)
Non-tariff Income
FY 2019-20
MTR Order AEML-D Petition Approved in this
Order
Wires Business 113.50 116.24 116.24
Supply Business 38.99 41.25 41.25
Total 152.49 157.49 157.49
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Page 240 of 445
The Commission has observed that AEML-D has invested in Mutual Fund Growth Option
wherein the investments are market linked and carries greater market risk. The Net Asset
Value (NAV) of Mutual Fund is volatile due to dependency on market conditions and there
can be instances wherein the losses are incurred. Therefore, the investment in Mutual Funds
does not serve the intent of the MYT Regulations, 2015 regarding making investment
towards Contingency Reserves. The intent of making investment towards Contingency
Reserves is to create a Reserve Fund by the Utility to deal with certain situations. The
situations wherein the utility is allowed to draw from the Contingency Reserve are clearly
identified in Regulation 34.2 of the MYT Regulations, 2015.
While framing of MYT Regulations, the Commission had envisaged that the Utilities will
invest only in securities which are safe, and the reserve created out of these investments
would be available to them in Force Majeure situations. However, though mutual funds are
part of the list of securities authorised under the Indian Trusts Act, 1882, investment in such
instruments exposes the reserve created to market risk. While the Regulation 34.3 of the
MYT Regulations, 2015 clearly mentions that no diminution in the value of Contingency
Reserve will be permitted, the Commission does not want the utilities to land in difficult
situations wherein the value of the Contingency Reserve is negatively impacted due to
market fluctuations. This in a way defeats the intent of the Regulations. Considering the
above, the Commission is of the view that the Licensee shall not invest the Contingency
Reserves amount in market linked instruments such as Mutual Funds, etc., since
considering the purpose of this reserve, the risk cannot be passed on to consumers and also
should not create situations wherein the fund is not available with the utility when it is
required the most. Therefore, the Commission in exercise of its “Power to remove
difficulties” as per Regulation 102 of MYT Regulations, 2015 directs AEML-D to transfer
the existing Mutual Fund investment towards Contribution to Contingency Reserve to safer
instruments, i.e., Government Securities (G-Sec) within the 6 months of the issue of this
Order. AEML-D also to ensure that the Contribution to Contingency Reserve for future
period shall be invested only in the above specified investments.
1.73 INCOME FROM OTHER BUSINESS
AEML-D’s Submission
Rental Income from RCOM Towers: The agreement between Reliance Communication and
AEML-D for utilizing rooftops of some of the receiving stations of AEML-D has been
discontinued in FY 2019-20. Hence, no rent has been received in H1 of FY 2019-20.
AEML-D has also not considered any rent in H2 of FY 2019-20 from RCOM
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 241 of 445
Rental Income from Fibre Optics: As stated in the section on truing up of FY 2018-19, an
agreement was made between REGSL (AEML-D) and RCOM on 28 August 2018 through
which RCOM was using the optic fibre network of AEML-D for providing the backup path
for its network. The initial agreement was valid till 31 March 2019. The agreement was
renewed in September 2019 and the rental income from RCOM has been received in
September 2019. Two thirds of the rent (Rs. 0.01 Crore) has been considered as part of
Non-Tariff Income in H1 of FY 2019-20. An estimate for the same is included in H2 of FY
2019-20.
In the MTR Order, rental income from use of Santacruz property of erstwhile RInfra was
included. However, in accordance with the Order dated 28 June 2018 in Case No. 140 of
2017, the properties are not retained by AEML-D post transaction and hence, no income
has been considered on this account in FY 2019-20. The summary of other business income
for FY 2019-20 considered in Wires Business is as under.
Table 0-71: Income from Other Business for FY 2019-20 as submitted by AEML-D
(Rs. Crore)
Particulars MTR Order AEML-D Petition
Rental Income from RCOM 0.58 0
Rental Income from Santacruz Property 25.00 0
Rental Income from Optic Fibre 0 0.08
Total 25.58 0.08
Commission’s Analysis and Ruling
The Commission has provisionally accepted Other Income estimated by AEML-D for the
Wires Business and Supply Business for FY 2019-20, as shown in the Table below.
Table 0-72: Income from Other Business for FY 2019-20 approved by the
Commission (Rs. Crore)
Particulars MTR
Order
AEML-
D
Petition
Approved after
provisional truing
up
Rental Income from RCOM 0.58 0 0
Rental Income from Santacruz Property 25.00 0 0
Rental Income from Optic Fibre 0 0.08 0.08
Total 25.58 0.08 0.08
1.74 SUMMARY OF AGGREGATE REVENUE REQUIREMENT
AEML-D’s Submission
The summary of the ARR for the Wires Business is shown in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 242 of 445
Table 0-73: ARR for Wires Business for FY 2019-20 as submitted by AEML-D (Rs.
Crore)
Particulars MTR Order AEML-D
Petition
O&M Expenses 894.86 886.46
Impact of GST on O&M Expense 0 8.37
Impact of SC Judgment / GoM notification on O&M
Expense
0 8.16
Depreciation 244.59 256.48
Interest on Long-term Loan Capital 146.29 150.39
Interest on Working Capital 31.83 31.18
Provisioning for Bad & Doubtful Debts 2.61 3.37
Contribution to contingency reserves 14.56 14.99
Income Tax 62.61 84.73
Total Revenue Expenditure 1,397.36 1,444.12
Return on Equity Capital 318.71 338.56
Aggregate Revenue Requirement 1,716.07 1,782.68
Less: Non-Tariff Income 113.50 116.24
Less: Income from Other Business 25.58 0.08
Net Aggregate Revenue Requirement 1,576.99 1,666.36
The summary of the ARR for the Supply Business is shown in the Table below:
Table 0-74: ARR for Supply Business in FY 2019-20 as submitted by AEML-D (Rs.
Crore)
Particulars MTR
Order
AEML-D
Petition
Power Purchase Expenses 4,336.89 4,205.96
O&M Expenses 441.46 437.32
Impact of GST on O&M Expense 0.00 2.19
Impact of SC Judgment / GoM notification on O&M
Expense
0.00 4.03
Depreciation 23.38 27.70
Interest on Long-term Loan Capital 9.14 10.57
Interest on Working Capital 3.10 10.96
Interest on Consumer Security Deposits 41.26 45.90
Provisioning for Bad & Doubtful Debts 9.13 12.62
Contribution to contingency reserves 1.38 1.26
Intra State Transmission Charges 398.72 398.72
MSLDC Charges 2.00 2.00
DSM Expenses 3.84 0
Income Tax 191.84 480.85
Total Revenue Expenditure 5,462.14 5,640.07
Return on Equity Capital 30.23 31.77
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Page 243 of 445
Particulars MTR
Order
AEML-D
Petition
Aggregate Revenue Requirement 5,492.37 5,671.85
Less: Non-Tariff Income 38.99 41.25
Net Aggregate Revenue Requirement 5,453.38 5,630.59
The summary of the ARR for the combined Wires Business and Supply Business is as
shown in the Table below:
Table 0-75: Combined ARR for Wires Business and Supply Business in FY 2019-20
as submitted by AEML-D (Rs. Crore)
Particulars MTR Order AEML-D Petition
Power Purchase Expenses 4,336.89 4,205.96
O&M Expenses 1,336.32 1,323.78
Impact of GST on O&M Expense 0 10.55
Impact of SC Judgment / GoM notification
on O&M Expense
0 12.19
Depreciation 267.97 284.18
Interest on Long-term Loan Capital 155.43 160.96
Interest on Working Capital 34.93 42.14
Interest on Consumer Security Deposits 41.26 45.90
Provisioning for Bad & Doubtful Debts 11.74 15.99
Contribution to contingency reserves 15.94 16.25
Intra State Transmission Charges 398.72 398.72
MSLDC Charges 2.00 2.00
DSM Expenses 3.84 0
Income Tax 254.45 565.57
Total Revenue Expenditure 6,859.43 7,084.20
Return on Equity Capital 348.94 370.33
Aggregate Revenue Requirement 7,208.37 7,454.53
Less: Non-Tariff Income 152.49 157.50
Less: Income from Other Business 25.58 0.08
Net Aggregate Revenue Requirement 7,030.30 7,296.96
Commission’s Analysis and Ruling
Based on the components of the ARR approved in the above paragraphs, the Commission
has approved the ARR for Wires Business and Supply Business for FY 2019-20 as shown
in the Tables below:
Table 0-76: ARR for Wires Business for FY 2019-20 approved by the Commission
(Rs. Crore)
Particulars MTR Order AEML-D
Petition
Approved after
provisional
truing up
O&M Expenses 894.86 886.46 850.72
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Page 244 of 445
Particulars MTR Order AEML-D
Petition
Approved after
provisional
truing up
Impact of GST on O&M Expense 0 8.37 -
Impact of SC Judgment / GoM
notification on O&M Expense 0 8.16 -
Depreciation 244.59 256.48 256.27
Interest on Long-term Loan Capital 146.29 150.39 146.51
Interest on Working Capital 31.83 31.18 30.49
Provisioning for Bad & Doubtful
Debts 2.61 3.37 3.37
Contribution to contingency
reserves 14.56 14.99 13.87
Income Tax 62.61 84.73 89.34
Total Revenue Expenditure 1,397.36 1,444.12 1,390.56
Return on Equity Capital 318.71 338.56 335.71
Aggregate Revenue Requirement 1,716.07 1,782.68 1,726.27
Less: Non-Tariff Income 113.50 116.24 116.24
Less: Income from Other Business 25.58 0.08 0.08
Net Aggregate Revenue
Requirement 1,576.99 1,666.36 1,609.95
The main reasons for the difference between the Wires ARR claimed by AEML-D for FY
2019-20 and that approved in this Order are:
1. Normative O&M Expenses approved in this Order are lower than that claimed by
AEML-D, on account of consideration of lower escalation rate;
2. Interest on Loan Capital approved in this Order is lower than that claimed by
AEML-D;
3. RoE is lower than that claimed by AEML-D, on account of the lower capitalisation.
Table 0-77: ARR for Supply Business for FY 2019-20 approved by the Commission
(Rs. Crore
Particulars MTR
Order
AEML-D
Petition
Approved after
provisional
truing up
Power Purchase Expenses 4,336.89 4,205.96 4,204.44
O&M Expenses 441.46 437.32 419.68
Impact of GST on O&M Expense 0.00 2.19 -
Impact of SC Judgment / GoM
notification on O&M Expense 0.00 4.03
-
Depreciation 23.38 27.70 26.00
Interest on Long-term Loan Capital 9.14 10.57 5.92
Interest on Working Capital 3.10 10.96 14.95
Interest on Consumer Security Deposits 41.26 45.90 45.90
Provisioning for Bad & Doubtful Debts 9.13 12.62 12.62
Contribution to contingency reserves 1.38 1.26 1.26
Intra State Transmission Charges 398.72 398.72 398.72
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Page 245 of 445
Particulars MTR
Order
AEML-D
Petition
Approved after
provisional
truing up
MSLDC Charges 2.00 2.00 2.00
DSM Expenses 3.84 0 -
Income Tax 191.84 480.85 507.03
Total Revenue Expenditure 5,462.14 5,640.07 5,638.53
Return on Equity Capital 30.23 31.77 27.84
Aggregate Revenue Requirement 5,492.37 5,671.85 5,666.37
Less: Non-Tariff Income 38.99 41.25 41.25
Net Aggregate Revenue Requirement 5,453.38 5,630.59 5,625.12
The main reasons for the difference between the Supply ARR claimed by AEML-D and
that approved in this Order for FY 2019-20 are:
1. O&M Expenses allowed in this Order are lower than that claimed by AEML-D, on
account of consideration of lower escalation rate;
2. Interest on Working Capital is higher than that claimed by AEML-D
3. Income Tax allowed in this Order is higher than that claimed by AEML-D, as the
Income Tax has been claimed at the same level as that approved for FY 2018-19 in
this Order, in accordance with the MYT Regulations, 2015.
Table 0-78: Combined ARR for Wires Business and Supply Business for FY 2019-20
approved by the Commission (Rs. Crore)
Particulars
FY 2019-20
MTR Order AEML-D
Petition
Approved after
provisional
truing up
Power Purchase Expenses 4,336.89 4,205.96 4,204.44
O&M Expenses 1,336.32 1,323.78 1,270.41
Impact of GST on O&M Expense 0 10.55 -
Impact of SC Judgment / GoM
notification on O&M Expense
0 12.19 -
Depreciation 267.97 284.18 282.26
Interest on Long-term Loan Capital 155.43 160.96 152.43
Interest on Working Capital 34.93 42.14 45.44
Interest on Consumer Security Deposits 41.26 45.90 45.90
Provisioning for Bad & Doubtful Debts 11.74 15.99 15.99
Contribution to contingency reserves 15.94 16.25 15.13
Intra State Transmission Charges 398.72 398.72 398.72
MSLDC Charges 2.00 2.00 2.00
DSM Expenses 3.84 0 -
Income Tax 254.45 565.57 596.37
Total Revenue Expenditure 6,859.43 7,084.20 7,029.09
Return on Equity Capital 348.94 370.33 363.55
Aggregate Revenue Requirement 7,208.37 7,454.53 7,392.64
Less: Non-Tariff Income 152.49 157.50 157.50
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 246 of 445
Particulars
FY 2019-20
MTR Order AEML-D
Petition
Approved after
provisional
truing up
Less: Income from Other Business 25.58 0.08 0.08
Net Aggregate Revenue Requirement 7,030.30 7,296.96 7,235.07
1.75 REVENUE
1.75.1 Revenue from Wheeling charges from Change-over and Open Access
Consumers
AEML-D’s Submission
The actual revenue from wheeling charges from change-over and OA consumers in H1 of
2019-20 along with the estimated revenue from the same in H2 of FY 2019-20 are shown
in the Table below:
Table 0-79: Wheeling Revenue from Change-over and OA Consumers in FY 2019-
20 as submitted by AEML-D (Rs. Crore)
Particulars MTR Order AEML-D Petition
OA consumers
24.88
Change-over Consumers (HT) 245.89
Change-over Consumers (LT)
Total 274.35 270.77
Commission’s Analysis and Ruling
The Commission has worked out the revenue based on the sales estimated for changeover
and OA consumers as elaborated in the earlier Sections of this Chapter, grossed up with
corresponding LT and HT level losses approved by the Commission for AEML-D and
corresponding Wheeling Charges applicable to particular category during the year, as
shown in the Table below:
Table 0-80: Wheeling Revenue from Change-over & Open Access Consumers in FY
2019-20 approved by the Commission (Rs. Crore)
Particulars MTR
Order
AEML-D
Petition
Approved after
provisional truing
up
Wheeling Revenue from Change-
over & Open Access Consumers 274.35 270.77 274.09
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Page 247 of 445
1.75.2 Revenue from Cross-Subsidy Surcharge (CSS)
AEML-D’s Submission
The actual revenue from CSS from changeover and OA consumers in H1 of FY 2019-20
and the revenue from CSS from estimated changeover sales in H2 of FY 2019-20 are shown
in the table below:
Table 0-81: Estimated Revenue from CSS in FY 2019-20 as submitted by AEML-D
(Rs. Crore)
Particulars MTR Order AEML-D Petition
OA consumers
34.74
Changeover Consumers 110.82
Total 158.08 145.56
Commission’s Analysis and Ruling
The Commission has estimated the revenue from CSS from OA consumers and Changeover
consumers based on the category wise cross subsidy surcharge applicable to estimated
consumption, grossed up with corresponding LT and HT level losses approved by the
Commission for AEML-D. The revenue from CSS estimated for FY 2019-20 is as shown
in the Table below.
Table 0-82: Revenue from CSS in FY 2019-20 approved by the Commission (Rs.
Crore)
Particulars MTR
Order
AEML-D
Petition
Approved after
provisional
truing up
Revenue from CSS 158.08 145.56 166.38
.
1.75.3 Revenue from sale of Electricity
AEML-D’s Submission
In H1 of FY 2019-20, AEML-D has charged tariffs as approved by the Commission in
AEML-D’s MTR Order dated 12 September 2018. The actual revenue (excluding the
revenue from RAC) from energy sales along with the FAC charged in accordance with the
MYT Regulations, 2015 in H1 of FY 2019-20 is shown in the Table below. Further, the
revenue expected from energy sales in H2 of FY 2019-20 is also presented in the Table
below. AEML-D has estimated the revenue in second half of FY 2019-20 by applying the
approved tariffs for FY 2019-20 to the estimated sales of second half of FY 2019-20. The
actual revenue billed in H1 of FY 2019-20 (excluding RA Recovery) and the revenue from
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 248 of 445
estimated sales in H2 of FY 2019-20 (at approved tariffs without RAC) is summarized
below:
Table 0-83: Estimated Revenue from sale of power in FY 2019-20 as submitted by
AEML-D
Particulars MTR Order AEML-D Petition
Revenue (Rs. Crore) 7,263.69 7,574.35
Sales (MU) 8,887.42 8,624.92
ABR (Rs. /kWh) 8.17 8.78
Commission’s Analysis and Ruling
The Commission has computed the revenue based on estimated sales for FY 2019-20 and
applicable Tariff approved for FY 2019-20 in MTR Order dated 12 September 2018, as
shown in the following Table:
Table 0-84: Total Revenue in FY 2019-20 approved by Commission (Rs. Crore)
Particulars MTR Order AEML-D
Petition
Approved after
provisional truing up
Revenue from Wheeling Charges
from own consumers 1,309.49 1,273.56 1,282.56
Revenue from Sale of Electricity
from own consumers 5,954.20 6,298.80 6,246.77
Total Revenue (Rs. Crore) 7,263.69 7,574.35 7,529.33
Own Sales (MU) 8,887.42 8,624.92 8,622.04
ABR (Rs. /kWh) 8.17 8.78 8.73
1.76 REVENUE GAP/SURPLUS FOR FY 2019-20 FOR THE WIRES BUSINESS
AND SUPPLY BUSINESS
AEML-D’s Submission
The estimated Revenue Gap/(Surplus) for FY 2019-20 for the Wires Business and Supply
Business is as shown in the Tables below:
Table 0-85: Revenue Gap/(Surplus) for Wires Business in FY 2019-20 as submitted
by AEML-D (Rs. Crore)
Particulars MTR
Order
AEML-D
Petition
Wires ARR 1,576.99 1,666.36
Revenue Gap allowed in MTR Order 18.46 18.46
Wires ARR with Revenue Gap 1,595.45 1,684.82
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 249 of 445
Particulars MTR
Order
AEML-D
Petition
Revenue from Wheeling Charges from changeover and OA
consumers
274.35 270.77
Net Wires ARR 1,321.10 1,414.06
Revenue from Wheeling Charges from Own Consumers 1,309.49 1,273.56
Revenue Gap of Wires Business 11.61 140.50
Table 0-86: Revenue Gap/(Surplus) for Supply Business in FY 2019-20 as submitted
by AEML-D (Rs. Crore)
Particulars MTR Order AEML-D
Petition
Supply ARR 5,453.38 5,630.59
Revenue Gap allowed in MTR Order 649.30 649.30
Supply ARR with Revenue Gap 6,102.68 6,279.89
Revenue from CSS from changeover and OA consumers 158.08 145.56
Net Supply ARR 5,944.60 6,134.33
Revenue from Sales 5,954.20 6,298.80
Revenue Gap of Supply Business (9.60) (164.46)
Table 0-87: Revenue Gap for Wires & Supply Business in FY 2019-20 as submitted
by AEML-D (Rs. Crore)
Particulars MTR Order AEML-D
Petition
Wires & Supply ARR 7,030.37 7,296.96
Revenue Gap allowed in MTR Order 667.76 667.76
Wires & Supply ARR with Revenue Gap 7,698.13 7,964.72
Revenue from Wheeling Charges / CSS from
Changeover Consumers 432.43 416.33
Net ARR 7,265.70 7,548.39
Revenue from Sales 7,263.69 7,572.35
Revenue Gap 2.01 (23.96)
Commission’s Analysis and Ruling
Based on the ARR and revenue provisionally approved for FY 2019-20 in the earlier
paragraphs, the Revenue Gap/(Surplus) for the Wires Business and Supply Business for FY
2019-20 as provisionally approved by the Commission is shown in the Tables below:
Table 0-88: Provisional Revenue Gap/(Surplus) for the Wires Business for FY 2019-
20 as approved by the Commission (Rs. Crore)
Particulars MTR Order AEML-D
Petition
Approved after
provisional
truing up
Wires ARR 1,576.99 1,666.36 1,609.95
Revenue Gap allowed in MTR
Order 18.46 18.46 18.46
Wires ARR with Revenue Gap 1,595.45 1,684.82 1,628.41
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Page 250 of 445
Particulars MTR Order AEML-D
Petition
Approved after
provisional
truing up
Revenue from Wheeling Charges
from changeover and OA
consumers
274.35 270.77 274.09
Net Wires ARR 1,321.10 1,414.06 1,354.32
Revenue from Wheeling Charges
from Own Consumers 1,309.49 1,273.56 1,282.56
Revenue Gap of Wires Business 11.61 140.50 71.76
Table 0-89: Provisional Revenue Gap/(Surplus) for the Supply Business for FY 2019-
20 as approved by the Commission (Rs. Crore)
Particulars MTR Order AEML-D Petition Approved after
provisional truing up
Supply ARR 5,453.38 5,630.59 5,625.12
Revenue Gap allowed in
MTR Order 649.30 649.30 649.30
Supply ARR with
Revenue Gap 6,102.68 6,279.89 6,274.42
Revenue from CSS from
changeover and OA
consumers
158.08 145.56 166.38
Net Supply ARR 5,944.60 6,134.33 6,108.03
Revenue from Sales 5,954.20 6,298.80 6,246.77
Revenue Gap of Supply
Business (9.60) (164.46) (138.74)
Table 0-90: Total Revenue Gap/Surplus for FY 2019-20 as approved by the
Commission (Rs. Crore)
Particulars MTR Order AEML-D
Petition
Approved after
provisional
truing up
Wires & Supply ARR 7,030.37 7,296.96 7,235.07
Revenue Gap allowed in MTR
Order 667.76 667.76 667.76
Wires & Supply ARR with
Revenue Gap 7,698.13 7,964.72 7,902.83
Revenue from Wheeling Charges /
CSS from Changeover Consumers 432.43 416.33 440.48
Net ARR 7,265.70 7,548.39 7,462.35
Revenue from Sales 7,263.69 7,572.35 7,529.33
Revenue Gap 2.01 (23.96) (66.98)
The treatment of the above Revenue Gap/(Surplus) is discussed along with the treatment of
Cumulative Revenue Gap / (Surplus), in subsequent Chapter of this Order.
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Page 251 of 445
1.77 REGULATORY ASSET RECOVERY IN FY 2019-20
AEML-D’s Submission
The Commission had approved RA recovery of Rs. 451.08 Crore in FY 2019-20 in the
MTR Order dated 12 September 2018. Based on the estimated sales for H2 of FY 2019-20,
the total RA recovery in FY 2019-20 is likely to be Rs. 411.13 Crore and the RA under
recovery in FY 2019-20 is Rs. 39.95 Crore, as shown below:
Table 0-91: Regulatory Assets Recovery in FY 2019-20 as submitted by AEML-D
(Rs. Crore)
Particulars AEML-D Petition
RA Recovery approved by the Commission 451.08
Actual RA Recovery 411.13
Under-recovery 39.95
Commission’s Analysis and Ruling
The Commission has worked out the RA recovery based on estimated own and Changeover
sales in FY 2019-20 and the RAC approved for FY 2019-20 in MTR Order dated 12
September 2019. The RA under-recovery determined by the Commission in provisional
true-up for FY 2019-20 is given in the following Table:
Table 0-92: Regulatory Asset Over/Under-recovery in FY 2019-20 approved by
Commission (Rs. Crore)
Particulars AEML-D Petition Approved after
provisional
truing up
RA Recovery approved by the Commission 451.08 451.08
Actual RA Recovery 411.13 409.36 Under-recovery 39.95 41.72
The treatment of this Over / Under Recovery of Regulatory Asset is discussed along with
the treatment of Cumulative Revenue Gap / (Surplus) in subsequent Chapter of this Order.
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Page 252 of 445
5 AGGREGATE REVENUE REQUIREMENT FOR FY 2020-
21 TO FY 2024-25
In accordance with the MYT Regulations, 2019, AEML-D submitted the projected ARR
for each year of the 4th Control Period, along with projected expenses over the Control
Period for the Wires Business and Supply Business separately. The Commission has
discussed the expenditure allowed on each of the expense heads and the total expenses
approved by it for the 4th Control Period in the subsequent paragraphs.
5.1 SALES
AEML-D's Submission
AEML-D has projected the total energy sales to all consumers connected to its network,
including Change-over and OA consumers and thereafter subtract the projected Change-
over and OA consumption from the same.
5.1.1 Total Network Sales
AEML-D has considered a conventional approach considering growth factors of past few
years, which is less prone to errors with the growth rate rendering a combined effect of
various factors affecting energy consumption. Accordingly, AEML-D has considered
CAGR based forecast for total network energy sales of the licence area (own + change-over
+ OA).
5.1.2 Migration of consumers from / to AEML-D Supply
As stated in the provisional true-up for FY 2019-20, AEML-D expects that the rate of
migration of residential (0-500) consumers will continue at the same pace in future also.
Therefore, AEML-D has considered the average of number of consumers migrated in the
months from April 2019 to August 2019 as the monthly number of consumers migrating in
each year of the Control Period. Most of the reverse migration happens in tariff of LT – I
(Residential high end with consumption of more than 500 units per month), LT II(a), LT
II(c) and LT III(a) category as TPC-D tariff is higher than the AEML-D tariff. Therefore
AEML-D has considered the average number of consumers from April 2019 to August
2019 as the monthly number of consumers that will migrate back to AEML-D in each year
of the Control Period.
5.1.3 Switchover of consumers from/to AEML-D Supply
AEML-D has considered the average number of consumers in residential category
(consuming up to 500 units per month) and LT II(a) consumers who had switched over
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 253 of 445
from April 2019 to August 2019 as the number of consumers switching over to TPC-D in
each year of the Control Period.
5.1.4 Reduction in Sales due to DSM Programs
AEML-D has estimated reduction in sales due to two DSM programs, i.e., large-scale
refrigerator program and large-scale ceiling fan program for the Control Period.
5.1.5 Reduction in Sales due to Roof Top Solar Generation
AEML-D has considered the same capacity of 7,680.56 kW of Rooftop Solar, in line with
the actual capacity in FY 2018-19, for each year of the Control Period. /
5.1.6 Sales Forecast Methodology
AEML-D has continued to follow the sales forecast methodology detailed in provisional
Truing-up of FY 2019-20 for projection of category-wise sales for 4th Control Period.
5.1.7 Total Projected Sales for 4th Control Period
Based on the above assumptions, projected Direct Sales and Change-over Sales for the 4th
Control Period are shown in the Table below:
Table 5-1: Projected Sales for 4th Control Period as submitted by AEML-D (MU)
Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Direct Sales 8,871.31 9,045.30 9,219.33 9,396.31 9.579.52
Change-over Sales 1,572.70 1,583.27 1,598.17 1,613.57 1,629.18
Overall Sales 10.444.01 10,628.57 10,817.50 11,009.88 11,208.70
AEML-D has also worked out the OA consumption for the 4th Control Period as shown in
the Table below:
Table 5-2: Projected OA consumption for 4th Control Period as submitted by
AEML-D (MU)
Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
HT-I Industry 235.84 241.51 247.32 253.69 259.42
HT-II Commercial 131.91 137.23 142.73 148.99 154.28
HT VI PS Others 4.68 4.87 5.07 5.29 5.48
Total 372.43 383.61 395.12 407.97 419.18
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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Commission’s Analysis and Ruling
The Commission has adopted a holistic approach and projected the own sales, change over
sales and OA consumption for FY 2019-20 and for the 4th Control Period (i.e., FY 2020-21
to FY 2024-25) as elaborated earlier in the section on Sales projection for FY 2019-20. For
projecting the energy sales for the 4th Control Period, the category-wise CAGR, as shown
in Chapter 4 of this Order, has been applied on category-wise energy sales approved for FY
2019-20.
In view of the above, the category-wise Direct Sales approved for the 4th Control Period are
given in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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Table 5-3: Category-wise Direct Sales approved for 4th Control Period (MU)
Consumer Category
AEML-D Petition Approved in this Order
FY 2020-21
FY 2021-22
FY 2022-23
FY 2023-24
FY 2024-25
FY 2020-21
FY 2021-22
FY 2022-23
FY 2023-24
FY 2024-25
LT I - Below Poverty Line 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01
LT -I Residential (Single Phase)
0-100 1,709.09 1,754.40 1,801.14 1,849.43 1,899.24 1,757.32 1,817.31 1,877.45 1,937.51 1,997.17
101-300 1,155.77 1,186.90 1,218.79 1,251.62 1,285.27 1,152.32 1,189.56 1,226.29 1,262.33 1,297.35
301-500 204.83 211.76 218.76 225.96 233.23 196.90 201.65 206.12 210.29 214.03
500and above 70.22 73.11 76.07 78.90 81.90 68.03 68.36 68.30 67.64 66.54
LT -I Residential (Three Phase)
0-100 280.44 289.41 298.66 308.15 317.91 288.35 299.79 311.31 322.83 334.30
101-300 418.76 432.92 447.49 462.42 477.70 417.51 433.89 450.24 466.37 482.19
301-500 222.25 231.43 240.77 250.27 259.92 213.66 220.38 226.85 232.91 238.53
500and above 425.53 441.96 459.01 476.64 494.88 412.24 413.25 412.12 408.62 402.03
LT II (a) - 0-20 kW 1,801.78 1,821.07 1,840.65 1,860.52 1,880.68 1,864.62 1,904.30 1,943.16 1,980.91 2,017.19
LT II (b) - 20-50 kW 242.06 242.35 242.65 242.95 243.25 233.40 231.98 229.04 224.31 217.48
LT II (c) - above 50 kW 578.75 587.76 592.77 597.55 602.39 531.48 525.16 518.38 511.14 503.41
LT III (a) - LT Industrial upto 20 kW 166.08 168.46 170.88 173.33 175.82 182.89 186.97 190.52 193.66 196.48
LT III (b) - LT Industrial above 20 kW 382.14 385.11 388.11 391.16 394.25 388.81 383.85 378.08 371.72 364.92
LT IV - Public Water Works 13.15 13.29 13.44 13.59 13.74 12.77 12.77 12.77 12.77 12.77
LT-V: LT- Advertisements and Hoardings 2.55 2.57 2.60 2.62 2.65 3.04 2.95 2.87 2.78 2.69
LT VI: LT -Street Lights 50.45 50.95 51.46 51.97 52.49 52.30 50.47 48.70 46.99 45.33
LT-VII (A): LT -Temporary Supply Religious 2.85 2.90 2.96 3.02 3.08 1.82 1.79 1.75 1.72 1.68
LT-VII (B): LT -Temporary Supply Others 11.12 11.23 11.35 11.46 11.57 10.43 10.43 10.43 10.43 10.43
LT VIII: LT - Crematorium & Burial Grounds 1.44 1.54 1.65 1.76 1.88 1.41 1.50 1.61 1.71 1.83
LT IX (a): PS - Govt. EI & Hospitals 26.25 26.54 26.84 27.14 27.44 30.85 35.09 39.92 45.41 51.66
LT IX (b): PS - Others 124.69 125.83 126.99 128.17 129.36 171.62 206.62 248.53 298.80 359.18
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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Consumer Category
AEML-D Petition Approved in this Order
FY 2020-21
FY 2021-22
FY 2022-23
FY 2023-24
FY 2024-25
FY 2020-21
FY 2021-22
FY 2022-23
FY 2023-24
FY 2024-25
LT X (a): Agriculture - Pumpsets 0.06 0.06 0.07 0.07 0.07 0.09 0.11 0.14 0.18 0.23
LT X (b): Agriculture - Others 0.22 0.23 0.23 0.23 0.23 0.30 0.38 0.48 0.61 0.76
LT XI: EV Charging Stations 0.01 0.01 0.01 0.01 0.01 - - - - -
LT Total 7,890.49 8,061.82 8,233.34 8,408.95 8,588.98 7,992.17 8,198.59 8,405.08 8,611.66 8,818.19
HT I: HT-Industry 312.50 313.91 315.27 316.19 317.86 339.76 375.11 411.70 449.59 488.81
HTII: HT- Commercial 477.71 477.68 477.53 476.68 476.87 304.26 276.26 249.75 224.84 201.55
HT III: HT-Group Housing Society 39.60 39.73 39.87 40.00 40.14 34.70 32.24 29.37 25.98 21.95
HT IV: HT -Public Water Works 8.35 8.44 8.52 8.61 8.69 8.13 8.13 8.13 8.13 8.13
HT V - HT Metro & Monorail 27.52 27.80 28.08 28.36 28.64 30.84 31.04 31.17 31.24 31.29
HT VI (a):PS - Govt. EI & Hospitals 5.91 5.97 6.03 6.09 6.15 6.45 6.21 5.96 5.69 5.41
HT VI (b):PS - Others 105.64 106.34 107.04 107.72 108.45 98.67 97.20 95.61 93.90 92.07
HT VII: Temporary Supply 3.58 3.62 3.65 3.69 3.73 19.30 24.13 30.13 37.56 46.75
HT VIII: EV Charging Stations 0 0 0 0 0 0 0 0 0 0
Sub-total 980.81 983.48 985.99 987.35 990.54 842.12 850.33 861.82 876.95 895.96
Total 8,871.31 9,045.30 9,219.33 9,396.31 9,579.52 8,834.29 9,048.92 9,266.90 9,488.60 9,714.15
The category-wise Change-over sales approved for the 4th Control Period are given in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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Table 5-4: Category-wise Change-over Sales approved for 4th Control Period (MU)
Consumer Category
AEML-D Petition Approved in this Order
FY 2020-21
FY 2021-22
FY 2022-23
FY 2023-24
FY 2024-25
FY 2020-21
FY 2021-22
FY 2022-23
FY 2023-24
FY 2024-25
LT Category
LT I - Below Poverty Line 0 0 0 0 0 0.00 0.00 0.00 0.00 0.00
LT -I Residential (Single Phase)
0-100 520.58 533.58 546.68 559.82 573.06 483.15 484.36 485.55 486.68 487.77
101-300 457.90 468.82 480.07 491.52 503.31 416.87 418.98 421.05 423.05 425.01
301-500 71.40 71.64 72.01 72.36 72.83 68.93 70.00 71.12 72.23 73.40
500and above 16.31 15.54 14.75 14.16 13.45 18.28 18.64 19.10 19.94 20.89
LT -I Residential (Three Phase)
0-100 90.44 91.12 91.80 92.49 93.18 83.93 82.72 81.53 80.40 79.31
101-300 135.55 135.72 135.93 136.20 136.50 123.40 121.29 119.22 117.22 115.27
301-500 61.74 59.92 58.14 56.41 54.71 59.61 58.54 57.42 56.31 55.14
500and above 64.27 59.75 54.99 49.97 44.71 72.02 71.66 71.20 70.36 69.41
LT II (a) - 0-20 kW 82.22 79.72 77.17 74.55 71.88 95.64 95.64 95.64 95.64 95.64
LT II (b) - 20-50 kW 22.80 23.03 23.26 23.49 23.73 23.09 23.09 23.09 23.09 23.09
LT II (c) - above 50 kW 18.30 14.09 13.94 14.08 14.22 32.90 32.90 32.90 32.90 32.90
LT III (a) - LT Industrial up to 20 kW 14.37 13.33 12.27 11.19 10.08 10.99 8.61 6.75 5.29 4.14
LT III (b) - LT Industrial above 20 kW 9.52 9.61 9.71 9.81 9.90 3.87 2.35 1.43 0.87 0.53
LT IV - Public Water Works 0 0 0 0 0 - - - - -
LT-V: LT- Advertisements and Hoardings 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02
LT VI: LT -Street Lights 0 0 0 0 0 - - - - -
LT-VII (A): LT -Temporary Supply Religious 0 0 0 0 0 - - - - -
LT-VII (B): LT -Temporary Supply Others 0.03 0.03 0.03 0.03 0.03 0.02 0.02 0.02 0.02 0.02
LT VIII: LT - Crematorium & Burial Grounds 0.26 0.27 0.27 0.27 0.27 0.36 0.38 0.39 0.40 0.42
LT IX (a): PS - Govt. EI & Hospitals 0 0 0 0 0 - - - - -
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 258 of 445
Consumer Category
AEML-D Petition Approved in this Order
FY 2020-21
FY 2021-22
FY 2022-23
FY 2023-24
FY 2024-25
FY 2020-21
FY 2021-22
FY 2022-23
FY 2023-24
FY 2024-25
LT IX (b): PS - Others 2.52 2.55 2.57 2.60 2.62 4.64 5.81 7.26 9.07 11.34
LT X (a): Agriculture - Pumpsets 0 0 0 0 0 0 0 0 0 0
LT X (b): Agriculture - Others 0 0 0 0 0 0 0 0 0 0
LT XI: EV Charging Stations 0 0 0 0 0 0 0 0 0 0
LT Total 1,568.22 1,578.75 1,593.61 1,608.96 1,624.52 1,497.72 1,495.00 1,493.68 1,493.49 1,494.29
HT I: HT-Industry 0.19 0.19 0.19 0.20 0.20 0.06 0.03 0.01 0.00 0.00
HTII: HT- Commercial 4.28 4.33 4.37 4.41 4.46 1.58 0.72 0.33 0.15 0.07
HT III: HT-Group Housing Society 0 0 0 0 0 0 0 0 0 0
HT IV: HT -Public Water Works 0 0 0 0 0 0 0 0 0 0
HT V - HT Metro & Monorail 0 0 0 0 0 0 0 0 0 0
HT VI (a):PS - Govt. EI & Hospitals 0 0 0 0 0 0 0 0 0 0
HT VI (b):PS - Others 0 0 0 0 0 0 0 0 0 0
HT VII: Temporary Supply 0 0 0 0 0 0 0 0 0 0
HT VIII: EV Charging Stations 0 0 0 0 0 0 0 0 0 0
Sub-total 4.48 4.52 4.57 4.61 4.66 1.64 0.75 0.34 0.15 0.07
Total 1,572.70 1,583.27 1,598.17 1,613.57 1,629.18 1,499.36 1,495.74 1,494.02 1,493.64 1,494.36
The category-wise OA consumption approved for the 4th Control Period are given in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 259 of 445
Table 5-5: Category-wise OA Consumption approved for 4th Control Period (MU)
Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
HT-I Industry 136.85 136.85 136.85 136.85 136.85
HT-II Commercial 93.77 93.77 93.77 93.77 93.77
HT VI PS Others 4.63 4.63 4.63 4.63 4.63
Total 235.25 235.25 235.25 235.25 235.25
5.2 DISTRIBUTION LOSSES AND ENERGY BALANCE
AEML-D's Submission
AEML-D submitted that considering the target losses of 8.36% for FY 2019-20 and a
further reduction of 0.25% over the same, the target losses for FY 2020-21 would be 8.11%.
However, AEML-D has already reached a Distribution loss level of 7.80% in FY 2019-20
and is therefore commencing the next Control Period at a loss level, which is already much
lower than what would be if the target losses are approved moving along the previously
approved trajectory. AEML-D has therefore considered the following Distribution Loss
Trajectory from FY 2020-21 to FY 2024-25:
Table 5-6: Distribution Loss for 4th Control Period submitted by AEML-D
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Distribution Loss 7.60% 7.45% 7.35% 7.30% 7.30%
Loss Reduction
Trajectory 0.20% 0.15% 0.10% 0.05% 0.00%
AEML-D submitted that if the Distribution Losses are approved extrapolating the
previously approved trajectory of 0.25% reduction each year, the starting losses (FY 2020-
21) would be higher at 8.11% and the ending losses (FY 2024-25) would be lower at 7.11%,
as against the proposed trajectory, which starts at 7.60% and ends at 7.30% respectively.
AEML-D has worked out the additional revenue from sale of electricity in each year of the
Control Period considering both the trajectories and has worked out the net benefit to
consumers over the Control Period. AEML-D also submitted zone-wise Distribution loss
of FY 2018-19 and stated the reasons for increased losses in Eastern Zone. AEML-D
submitted the number of steps taken to reduce these losses. AEML-D submitted that it has
to employ dedicated manpower for carrying out various loss reduction activities, which
results in additional cost of manpower and other resources. Therefore, the O&M cost of
AEML-D is also higher as compared to other Licensees such as BEST.
The energy requirement at T-D periphery for the next Control Period as submitted by
AEML-D is shown in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 260 of 445
Table 5-7: Energy Balance for 4th Control Period as submitted by AEML-D (MU)
Particulars FY 2020-
21
FY 2021-22
FY 2022-23
FY 2023-24
FY 2024-25
Own Sales 8,871.31 9,045.30 9,219.33 9,396.31 9,579.52
Changeover Sales 1,572.70 1,583.27 1,598.17 1,613.57 1,629.18
OA Consumption 372.43 383.61 395.12 407.97 419.18
Total 10,816.44 11,012.18 11,212.62 11,417.85 11,627.88
Distribution Loss (%) 7.60% 7.45% 7.35% 7.30% 7.30%
Energy Requirement at T<>D 11,705.67 11,898.20 12,101.71 12,316.59 12,543.18
AEML-D submitted that based on the Technical Loss assessment study for FY 2018-19,
the actual Technical Loss for HT consumers works out to 1.59% and actual Technical Loss
for LT consumers works out to 7.41%. AEML-D has considered this Technical Loss for the
next Control Period for deriving the Energy Balance. AEML-D has considered the
Transmission Loss of 3.30% approved in the MTR Order, as the Transmission Loss for
each year of the Control Period. The power purchase requirement for each year of the
Control Period is submitted in the Table below:
Table 5-8: Power Purchase Requirement for 4th Control Period as submitted by
AEML-D (MU)
Particulars / (MU) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Migrated HT Sales + OA 376.91 388.13 399.69 412.58 423.84
Wheeling Loss - HT (%) 1.59% 1.59% 1.59% 1.59% 1.59%
Migrated HT Sales + OA at T<>D 383.00 394.40 406.14 419.25 430.68
Migrated LT Sales 1,568.22 1,578.75 1,593.61 1,608.96 1,624.52
Wheeling Loss - LT (%) 7.41% 7.41% 7.41% 7.41% 7.41%
Migrated LT Sales at T<>D 1,693.73 1,705.10 1,721.14 1,737.73 1,754.53
Total migrated Sales + OA at T<>D 2,076.73 2,099.50 2,127.28 2,156.97 2,185.22
Energy Requirement of AEML-D
consumers at T<>D 9,628.94 9,798.70 9,974.43 10,159.61 10,357.96
Transmission Loss (%) 3.30% 3.30% 3.30% 3.30% 3.30%
Energy Requirement of AEML-D
consumers at G<>T 9,957.54 10,133.10 10,314.82 10,506.32 10,711.44
Commission’s Analysis and Ruling
AEML-D has achieved actual Distribution Loss lower than the target Distribution Loss in
FY 2018-19. The Commission observes that AEML-D has projected Distribution Loss for
the 4th Control Period considering a reducing trend every year starting from 0.20% in FY
2020-21 to 0.00% in FY 2024-25.
The Commission appreciates the fact that AEML-D has been able to achieve actual
Distribution Loss lower than the target Distribution Loss, for which AEML has been able
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 261 of 445
to retain its share of the efficiency gains. However, overachievement of Distribution Loss
in previous Control Period does not mean that the loss reduction trajectory to be set for the
next Control Period should be less stringent.
The Commission has to determine the trajectory for Distribution Loss for the 4th Control
Period in accordance with Regulation 7 of the MYT Regulations, 2019. The Commission
has considered the Distribution Loss projected by AEML-D for FY 2019-20, for approving
the Loss trajectory for the next Control Period.
The Commission is of the view that AEML-D should continue to take efforts to bring down
the losses in its Eastern Zone to optimum levels. It may be noted that the Commission has
also been allowing significant Capitalization proposed by AEML-D for each year, which
also includes the capex for reduction in Distribution Losses through meter replacement,
cable replacement, etc., which will help in reducing the Technical Losses as well as
Commercial Losses.
The Commission is of the view that Distribution Licensees like Torrent Power Limited
operating in cities like Surat and Ahmedabad, which have similar demographics as those of
AEML-D, have been able to achieve Distribution Losses as low as around 3.59% in the
past. Even BEST, which operates in the city of Mumbai, and is very much comparable to
AEML-D in terms of HT:LT ratio and geography, has achieved Distribution Losses of
4.18% in FY 2018-19. Therefore, there is enough scope for AEML-D to put in more efforts
to achieve optimum Distribution Loss levels.
The Commission has therefore, adopted a similar approach as it had adopted in the previous
MYT Control Period and accordingly considers the Distribution Loss reduction of 0.25%
annually for each year of the Control Period, taking the base distribution loss of 7.80%
approved for FY 2019-20. The following Table shows the approved Distribution Loss for
4th Control Period:
Table 5-9: Distribution Loss approved for 4th Control Period Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
Distribution Loss 7.55% 7.30% 7.05% 6.80% 6.55%
For the Control Period from FY 2020-21 to FY 2024-25, the Commission has considered
the Transmission Loss of 3.18%, i.e., same as provisional Transmission Loss for FY 2019-
20. The Direct Sales and Change-over Sales have been considered as approved earlier in
this Section.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 262 of 445
The Commission has considered LT and HT Losses of FY 2020-21 as submitted by AEML-
D in Form F1.3, for applicability for OA and Changeover consumers for the entire Control
Period. The Commission approves the HT and LT Distribution Losses for the 4th Control
Period, applicable for Change-over and OA consumption, as given in the Table below:
Table 5-10: HT and LT losses approved for 4th Control Period AEML-D Approved
Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
HT Loss 1.59% 1.59% 1.59% 1.59% 1.59% 1.59% 1.59% 1.59% 1.59% 1.59%
LT Loss 7.41% 7.41% 7.41% 7.41% 7.41% 6.43% 6.43% 6.43% 6.43% 6.43%
Accordingly, the Distribution Losses and Energy Balance provisionally approved the
Commission for FY 2020-21 to FY 2024-25 are shown in the Tables below:
Table 5-11: Energy Input requirement approved for 4th Control Period (MU)
Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
Own Sales 8,834.29 9,048.92 9,266.90 9,488.60 9,714.15
Change-over Consumption 1,499.36 1,495.74 1,494.02 1,493.64 1,494.36
OA consumption 235.25 235.25 235.25 235.25 235.25
Total 10,568.90 10,779.92 10,996.16 11,217.49 11,443.75
Distribution Loss (%) 7.55% 7.30% 7.05% 6.80% 6.55%
Energy Input at T<>D Interface 11,432.10 11,628.90 11,830.27 12,036.02 12,245.94
Energy Injected by TPC-D for
Changeover consumers 1,562.43 1,546.71 1,532.99 1,520.66 1,509.43
InSTS Loss 3.18% 3.18% 3.18% 3.18% 3.18%
Energy Requirement at G<>T
Interface 9,869.67 10,082.19 10,297.29 10,515.36 10,736.51
5.3 POWER PURCHASE QUANTUM AND COST
AEML-D's Submission
AEML-D has prepared the Power Procurement plan for the Control Period considering the
available sources with which AEML-D is having long-term power procurement
arrangement and the identified new source with which AEML-D intends to enter PPA.
5.3.1 Procurement from ADTPS (AEML-G)
AEML-D has a Power Purchase Arrangement with ADTPS valid till 22nd February 2023 as
approved by the Commission vide Order dated 8 February 2018 in Case No. 5 of 2017.
AEML-D intends to extend the PPA with ADTPS for which it will separately approach the
Commission in accordance with the provisions of the MYT Regulations, 2019. At present,
AEML-D has considered the energy availability from ADTPS for the Control Period, as
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 263 of 445
projected by ADTPS in its MYT Petition for 4th Control Period. The following Table shows
the power purchase projected by AEML-D for the Control Period:
Table 5-12: Energy Availability from ADTPS from FY 2020-21 to FY 2024-25
Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Capacity (MW) 500 500 500 500 500
Availability (%) 94.38% 94.38% 94.38% 93.45% 94.38%
Aux. Consumption (%) 10.50% 10.50% 10.50% 10.50% 10.50%
Net Generation (MU) 3,699.93 3,699.93 3,699.93 3,710.50 3,699.93
5.3.2 Backing Down of ADTPS (AEML-G)
AEML-D submitted that the Commission has issued the MERC (Deviation Settlement
Mechanism and Related Matters) Regulations, 2019, which will be effective from 1st April
2020. As per these Regulations, the Distribution Licensees are required to back down their
contracted sources as per their demand requirement. In order to make a realistic assessment
of generation availability for AEML-D from ADTPS, the energy balance of AEML-D is
evaluated on hourly basis.
Generation availability based on the generation plan submitted by ADTPS in its MYT
Petition is considered. RE generation from contracted sources is considered as per historical
trend. Mapping of estimated demand requirement and generation is done at hourly intervals.
Wherever power is surplus, ADTPS is considered as backed down up to Technical
Minimum. Balance surplus, if any, is considered for short-term sale. The short-term sale is
minimum and only during few hours in night off-peak period during monsoon and winter
months. Shortfall, if any, after considering the energy availability from ADTPS and the new
solar source is considered for short-term purchase. Fixed and Variable Cost of ADTPS have
been considered in line with the cost projected by ADTPS in its MYT Petition.
Table 5-13: Power Purchase from ADTPS from FY 2020-21 to FY 2024-25
Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Power Purchase Quantum (MU) 3,699.93 3,649.70 3,662.71 3,676.83 3,675.61
Fixed Charges (Rs. Crore) 339.26 373.80 381.70 386.16 394.54
Variable Charges (Rs./kWh) 3.71 3.71 3.71 3.71 3.71
Variable Charges (Rs. Crore) 1,374.15 1,355.50 1,360.33 1,365.57 1,365.12
Total Charges (Rs. Crore) 1,713.41 1,729.30 1,742.03 1,751.73 1,759.66
Commission’s Analysis and Ruling
Since the total installed capacity of ADTPS is allocated to AEML-D, the Commission has
considered the generation quantum and cost as approved for AEML-G (ADTPS) in its MYT
Order for the 4th Control Period vide Order dated 30 March 2020 in Case No. 298 of 2019,
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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as power purchase quantum and cost for AEML-D. The Commission has considered the
power purchase from ADPTS till FY 2024-25, even though the existing PPA is valid up to
22 February 2023, only for the purpose of estimating the power purchase cost for this MYT
Order. The mere fact that the Commission has considered this source beyond the period of
validity of the Arrangement, does not convey explicit or implicit approval of the
Commission for extension of the Arrangement. AEML-D shall approach the Commission
at least 6 months before expiration of its Arrangement, in case of extension of Arrangement
or power purchase from alternate source. The Commission may take a considered view on
the extension of the Arrangement or approval of the alternate source, at the appropriate
time. While submitting its Power Procurement plan, AEML-D has to ensure that the most
optimum power purchase tie-ups are made to secure the supply for its consumers,
irrespective of whether the generator is a Group Company or otherwise.
The following Table shows the quantum and cost of AEML-G considered in power
purchase of AEML-D, for the 4th Control Period:
Table 5-14: Power Purchase from ADTPS approved by the Commission from FY
2020-21 to FY 2024-25
Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
PP Quantum (MU) 3,733.00 3,733.00 3,733.00 3,743.84 3,733.00
Fixed Charges (Rs. Crore) 313.81 326.87 337.97 341.37 352.53
Variable Charges (Rs. /kWh) 3.79 3.90 4.02 4.14 4.26
Variable Charges (Rs. Crore) 1,414.81 1,456.99 1,500.67 1,549.95 1,591.38
Total Charges (Rs. Crore) 1,728.62 1,783.86 1,838.64 1,891.32 1,943.91
5.3.3 Procurement from VIPL-G
AEML-D's Submission
AEML-D issued a termination letter to VIPL-G on 20th April 2019 for termination of PPA
between AEML-D and VIPL-G. VIPL filed a Petition before the Commission challenging
the validity and legality of the termination letter (Case No. 247 of 2019). The Commission
has issued the Order in Case No. 247 of 2019 on 16 December 2019. As per the said Order,
the Termination Notice is held valid and the Termination Notice shall be deemed to have
been issued to the Lenders on the date of the Order. Thus, considering the termination of
the PPA, purchase from VIPL-G has not been considered in the power purchase of AEML-
D.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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Commission’s Analysis and Ruling
The Commission in line with the Order in Case No. 247 of 2019 issued on 16 December
2019 and as per the submission made by AEML-D, has not considered any power purchase
from VIPL-G in the 4th Control Period.
5.3.4 Solar Purchase
AEML-D's Submission
AEML-D has an Energy Purchase Agreement (EPA) with Dhursar Solar Power Private Ltd.
(DSPPL) for 40 MW. AEML-D has considered the energy availability from DSPPL for
each year of the Control Period at the same level as the actuals of FY 2018-19. The projected
power purchase cost for purchase from DSPPL, considering the rate of Rs. 10.30/kWh (as
considered for FY 2019-20 on provisional basis) is shown in the Table below:
Table 5-15: Power Purchase from DSPPL for FY 2020-21 to FY 2024-25
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
PP Quantum (MU) 66.19 66.19 66.19 66.39 66.19
PP Rate (Rs./kWh) 10.30 10.30 10.30 10.30 10.30
PP Cost (Rs. Crore) 68.38 68.38 68.38 68.38 68.38
Commission’s Analysis and Ruling
The Commission has considered the submission made by AEML-D with regard to quantum
of power purchase from DSPPL. The Commission has considered the rate approved for
purchase from DSPPL in FY 2019-20 for the entire Control Period. The Commission
accordingly approves the Solar Power Purchase from DSPPL for the 4th Control Period as
shown in the Table below:
Table 5-16: Power Purchase from DSPPL approved by the Commission for FY
2020-21 to FY 2024-25
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
PP Quantum (MU) 66.19 66.19 66.19 66.19 66.19
PP Rate (Rs. /kWh) 10.30 10.30 10.30 10.30 10.30
PP Cost (Rs. Crore) 68.17 68.17 68.17 68.17 68.17
5.3.5 Non-Solar Purchase
AEML-D's Submission
AEML-D has EPA with six sources for procurement of Non-Solar RE power. Some of the
PPAs are expiring during the tenure of the next Control Period. AEML-D has considered
the availability from these sources till the expiry of EPA with these sources. The energy
availability from these sources has been considered at the same level as actuals of FY 2018-
19. Based on the projected availability of energy, AEML-D has projected the power
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 266 of 445
purchase cost considering the rates as per EPA with these sources. The energy availability
from the presently available Non-Solar RE sources during the Control Period is as under:
Table 5-17: Energy Availability from Non-Solar for FY 2020-21 to FY 2024-25 (MU)
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Reliance
Innoventures 78.84 78.84 0 0 0
AAA Sons Enterprise 6.21 6.21 0.14 0 0
Vector Green Energy
Pvt. Ltd 31.54 31.54 0 0 0
Vector Green Energy
Pvt. Ltd 10.51 10.51 10.51 0.78 0
Tembhu Power
Private Limited 11.83 11.83 11.83 11.86 11.83
Reliance Clean
Power Pvt. Ltd 75.15 75.15 75.02 74.42 75.12
Total 214.08 214.08 97.63 87.05 86.95
Based on the rates as per EPA, AEML-D has projected the power purchase cost for FY
2020-21 to FY 2024-25 from Non-Solar RE sources, as shown in the Table below:
Table 5-18: Power Purchase Cost from Non-Solar for FY 2020-21 to FY 2024-25 (Rs.
Crore)
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Reliance
Innoventures 40.60 41.79 0 0 0
AAA Sons
Enterprise 3.20 3.29 0.07 0 0
Vector Green Energy
Pvt. Ltd 16.24 16.71 0 0 0
Vector Green Energy
Pvt. Ltd 5.33 5.33 5.33 0.39 0
Tembhu Power
Private Limited 5.04 5.04 5.04 5.05 5.04
Reliance Clean
Power Pvt. Ltd 43.66 43.66 43.59 43.24 43.65
Total 114.07 115.82 54.03 48.68 48.68
Commission’s Analysis and Ruling
The Commission has accepted the power purchase quantum projected by AEML-D for FY
2020-21 and has kept the same quantum from respective sources for the entire Control
Period. The Commission has considered the date of expiration of EPA as submitted by
AEML-D and accordingly has reduced the quantum of power purchase from these sources
for the respective years.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 267 of 445
The Commission has considered the per unit cost of each of the Non-Solar RE sources, as
approved in provisional Truing-up of FY 2019-20. Accordingly, the Commission has
worked out the power purchase quantum and cost from each of the Non-Solar RE sources
and approved the same for the 4th Control Period, as shown in the Table below:
Table 5-19: Power Purchase from Non-solar Re Purchase approved by the
Commission for FY 2020-21 to FY 2024-25
Particulars Unit FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Reliance
Innoventures
MU 78.84 78.84
Rs/kWh 5.00 5.00
Rs. Crore 39.42 39.42
AAA Sons
Enterprise
MU 6.21 6.21 0.14
Rs/kWh 5.00 5.00 5.00
Rs. Crore 3.10 3.10 0.07
Vector Green
Energy Pvt. Ltd
MU 31.54 31.54
Rs/kWh 5.00 5.00
Rs. Crore 15.77 15.77
Vector Green
Energy Pvt. Ltd
MU 10.51 10.51 10.51 0.78
Rs/kWh 5.07 5.07 5.07 5.07
Rs. Crore 5.33 5.33 5.33 0.39
Tembhu Power
Private Limited
MU 11.83 11.83 11.83 11.83 11.83
Rs/kWh 4.26 4.26 4.26 4.26 4.26
Rs. Crore 5.04 5.04 5.04 5.04 5.04
Reliance Clean
Power Pvt. Ltd
MU 75.15 75.15 75.02 75.02 75.05
Rs/kWh 5.81 5.81 5.81 5.81 5.81
Rs. Crore 43.66 43.66 43.59 43.59 43.60
Total
MU 214.08 214.08 97.49 87.62 86.87
Rs/kWh 5.25 5.25 5.54 5.59 5.60
Rs. Crore 112.32 112.32 54.02 49.02 48.64
5.3.6 Proposed Wind Solar Hybrid Source
AEML-D's Submission
AEML-D intends to tie up power from a new 350 MW wind-solar hybrid power plant with
a green-shoe option of additional 350 MW wind-solar hybrid power. AEML-D conducted
the competitive bidding process consistent with the Standard Bidding Guidelines issued
separately for procurement of Solar and Wind power by MoP, National Wind-Solar Hybrid
Policy dated 14th May 2018, and various Orders issued by the Commission from time to
time. The rate discovered from the L1 bidder through the bidding process was Rs. 3.35/
kWh. AEML-D has filed a Petition before the Commission for adoption of tariff for the
new source of power procurement under Section 63 of the Electricity Act, 2003. The power
from the new source is expected to be available from FY 2021-22. Hence, AEML-D has
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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considered the same from FY 2021-22 onwards. The projected power purchase cost from
the new hybrid RE source is shown in the Table below:
Table 5-20: Power Purchase Cost from new Hybrid RE Sources for FY 2020-21 to
FY 2024-25
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
PP Quantum (MU) 0 3,068.77 3,068.77 3,076.77 3,068.77
PP Rate (Rs. /kWh) 0 3.35 3.35 3.35 3.35
PP Cost (Rs. Crore) 0 1,028.04 1,028.04 1,030.72 1,028.04
Commission’s Analysis and Ruling
The Commission has accorded approval for the power purchase from Wind Solar Hybrid
Source vide Order dated 8 January 2020 (Case No. 281 of 2019). The Commission in this
Order has directed AEML-D to re-negotiate the rate discovered through competitive
bidding and thereby lowered the rate to Rs. 3.24 per unit. Therefore he Commission hence,
approves the rate of Rs. 3.24 per unit as stated in the aforesaid Order. As regards the Power
Purchase quantum, the Commission has considered installed capacity of 700 MW
(including green shoe option) and CUF of 50%, as committed by the selected Bidder. The
following Table shows the Power purchase quantum and cost approved from Hybrid Wind
Solar RE Source:
Table 5-21: Power Purchase Cost from new Hybrid RE Source approved by the
Commission for FY 2020-21 to FY 2024-25
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
PP Quantum (MU) 0 3,066.00 3,066.00 3,066.00 3,066.00
PP Rate (Rs. /kWh) 0 3.24 3.24 3.24 3.24
PP Cost (Rs. Crore) 0 993.38 993.38 993.38 993.38
5.3.7 Solar and Non-Solar RPO for Control Period
AEML-D's Submission
AEML-D has proposed to procure power from Hybrid Wind-Solar RE Source from FY
2021-22 and has therefore, not proposed to purchase any REC in FY 2020-21 for meeting
standalone or cumulative shortfall till FY 2020-21. AEML-D has worked out the following
Solar and Non-Solar Shortfall till FY 2020-21:
Table 5-22: Solar RPO Shortfall till FY 2020-21
Particulars Till FY 17-18 FY 18-19 FY 19-20 FY 20-21 Till FY 20-21
MU % MU % MU % MU MU
Gross Energy
Consumption 9,372.79 9,688.32 9,957.54
Target 463.85 2.75% 257.75 3.50% 339.09 4.50% 448.09 1,508.78
Achievement 402.12 0.79% 74.16 0.64% 62.12 0.66% 66.19 604.59
Shortfall /
(Surplus) 61.73 1.96% 183.59 2.86% 276.97 3.84% 381.90 904.19
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 269 of 445
Table 5-23: Non-Solar RPO Shortfall till FY 2020-21
Particulars Till FY 17-18 FY 18-19 FY 19-20 FY 20-21
Till FY 20-
21
MU % MU % MU % MU MU
Gross Energy
Consumption 9,372.79 9,688.32 9,957.54
Target 5,619.57 10.98% 1,028.94 11.48% 1,111.93 11.50% 1,145.12 8,905.56
Achievement 4,619.88 2.29% 214.53 2.14% 207.74 2.15% 214.08 5,256.23
Shortfall / (Surplus) 999.69 8.69% 814.42 9.33% 904.18 9.35% 931.04 3,649.33
Mini / Micro RPO
Target 9.67 0.20% 2.06 0.20% 2.22 0% 0 13.95
Achievement 5.91 0.00% 0.00 0.00% 0.00 0% 0 5.91
Shortfall / (Surplus) 3.76 0.20% 2.06 0.20% 2.22 0% 0 8.04
AEML-D hence submitted a cumulative shortfall of 4,561.59 MU for Solar and Non-Solar
RPO till FY 2020-21. AEML-D proposed to meet the shortfall in Solar and Non-Solar RPO
through Hybrid RE purchase as stated above. The following Table shows the Standalone
Solar and Non-Solar RPO target and projected solar achievement by AEML-D:
Table 5-24: Standalone Solar RPO target and projected solar achievement from FY
2021-22 to FY 2024-25
Particulars / (MU) FY 21-22 FY 22-23 FY 23-24 FY 24-25
Gross Energy Consumption 10,133.10 10,314.82 10,506.32 10,711.44
Solar RPO (%) 6.00% 8.00% 10.50% 13.50%
Solar RPO (MU) 607.99 825.19 1,103.16 1,446.04
Achievement
DSPPL 66.19 66.19 66.39 66.19
New Hybrid Source 1,534.38 1,534.38 1,538.38 1,534.38
Total 1,600.57 1,600.57 1,604.78 1,600.57
Shortfall / (Surplus) (992.59) (775.39) (501.61) (154.53)
Shortfall till FY 20-21 904.19
Shortfall / (Surplus) after
meeting Shortfall till FY 20-
21
(88.40) (775.39) (501.61) (154.53)
Table 5-25: Standalone Non-Solar RPO target and projected Non-Solar achievement
from FY 21-22 to FY 24-25
Particulars / (MU) FY 21-22 FY 22-23 FY 23-24 FY 24-25
Gross Energy Consumption 10,133.10 10,314.82 10,506.32 10,711.44
Solar RPO (%) 11.50% 11.50% 11.50% 11.50%
Solar RPO (MU) 1,165.31 1,186.20 1,208.23 1,231.82
Achievement
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 270 of 445
Particulars / (MU) FY 21-22 FY 22-23 FY 23-24 FY 24-25
Existing Non-Solar 214.08 97.49 87.05 86.95
New Hybrid Source 1,534.38 1,534.38 1,538.38 1,534.38
Total 1,748.46 1,631.87 1,625.43 1,621.33
Shortfall / (Surplus) (583.16) (445.67) (417.21) (389.52)
AEML-D requested the Commission to allow it to offset its cumulative Non-Solar shortfall
against the surplus in Solar purchase as per RPO-REC Regulations, 2019 and has
accordingly proposed to purchase Non-Solar REC in FY 2024-25 for balance shortfall.
Commission’s Analysis and Ruling
The Commission has computed the cumulative shortfall in Solar and Non-Solar RPO till
FY 2019-20 in the Chapter on Provisional Truing-up of FY 2019-20 in this Order. The
Commission has computed the Solar and Non-Solar cumulative surplus / shortfall till FY
2024-25 after considering the power purchase from New Wind-Solar Hybrid Source and in
line with the obligation specified in RPO REC Regulations, 2019, as shown in the Table
below:
Table 5-26: Cumulative Solar RPO Shortfall approved by the Commission till FY
2024-25 (MU) Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 Cumulative
Gross Energy
Consumption
9,869.67 10,082.19 10,297.29 10,515.36 10,736.51
RPO Target 444.13 604.93 823.78 1,104.11 1,449.43 5,486.07
DSPPL 66.19 66.19 66.19 66.19 66.19 869.34
Wind-Solar Hybrid
(50% of purchase) - 1,533.00 1,533.00 1,533.00 1,533.00 6,132.00
Shortfall / (Surplus) 377.95 (994.26) (775.41) (495.08) (149.76) (1,515.27)
Table 5-27: Cumulative Non-Solar RPO Shortfall approved by the Commission till
FY 2024-25 Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 Cumulative
Gross Energy
Consumption
9,869.67 10,082.19 10,297.29 10,515.36 10,736.51
RPO Target 1,135.01 1,159.45 1,184.19 1,209.27 1,234.70 13,684.00
Non-Solar Purchase 214.08 214.08 97.49 87.62 86.87 5,742.30
Wind-Solar Hybrid (50%
of purchase) - 1,533.00 1,533.00 1,533.00 1,533.00 6,132.00
Shortfall / (Surplus) 920.93 (587.62) (446.31) (411.36) (385.17) 1,809.70
The Commission has considered expenses on Wind-Solar Hybrid project for the purpose of
4th MYT Control Period. However, AEML-D has requested to carry forward the shortfall
of 3rd Control Period in 4th Control Period. As ruled in provisional true-up section, such
decision can be taken only after RPO verification process under REPO Regulations, 2016.
Further, AEML-D has also requested to carry forward RPO compliance till end of 4th
Control Period. In this regard, the Commission notes that RPO Regulations, 2019 allows
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 271 of 445
carry forward till 3rd Year of Control Period and subsequently to 5th year. Hence, this request
of AEML-D also could not be allowed through present proceeding. AEML-D may raise
these issues during next RPO verification process for Commission’s consideration.
5.3.8 Short-Term Power Purchase
AEML-D's Submission
AEML-D has projected the hourly demand and generation availability from ADTPS,
DSPPL, existing contracted Non-Solar RE sources and new hybrid RE sources as described
above and determined, on an hourly basis, the surplus and shortfall in energy for entire
Control Period from FY 2020-21 to FY 2024-25. AEML-D expects that short-term power
from FY 2020-21 onwards shall be available at a weighted average rate of Rs. 3.50 / kWh
and has considered the same for projecting the short-term power purchase cost for each year
of the Control Period, as shown in the Table below:
Table 5-28: Short Term Power Purchase Cost for FY 2020-21 to FY 2024-25
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
PP Quantum (MU) 5,977.34 3,151.02 3,430.64 3,610.17 3,820.58
PP Rate (Rs./kWh) 3.50 3.50 3.50 3.50 3.50
PP Cost (Rs. Crore) 2,092.07 1,102.86 1,200.72 1,263.56 1,337.20
Commission’s Analysis and Ruling
The Commission asked AEML-D to justify its plan to procure such a high quantum of
power from short-term sources, rather than other long-term/medium/term sources through
competitive bidding, to replace the power originally tied-up with VIPL-G. In reply, AEML-
D submitted that it had filed a Petition for adoption of tariff for its proposed purchase of
350 MW + 350 MW (green shoe option) RE hybrid energy on long-term basis. Once the
tariff is adopted by the Commission, the power flow is expected to commence sometime in
FY 2021-22, which has been considered in the MYT Petition. AEML-D submits that based
on the power available from the proposed long-term source, AEML-D shall assess its
balance energy requirement, including its peak and RTC requirements and shall plan its
future procurement of long-term/medium-term power and suitably approach the
Commission.
It is observed that the quantum of power purchase from short-term sources has been high
in case of AEML-D even in the past, and ranges around 30-40% of the total power purchase
quantum. For the next Control Period, the quantum of power purchase from short-term
sources projected by AEML-D is in excess of 50% of the total energy requirement, and is
projected to reduce to around 30-33% by the end of the next Control Period. This is a very
high reliance on short-term power purchase, given the price volatility of such short-term
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 272 of 445
power and the uncertainty attached to such short-term power. It is expected that a
Distribution Licensee of the size of AEML-D supplying electricity to consumers in the
financial capital of the country, would secure the power supply by tying-up power from
long-term/medium-term sources at optimum rates for the bulk of its requirement and rely
on short-term power for only around 10-12% of its power requirement. The Commission
accordingly directs AEML-D to rationalise its Power Procurement plan with the view to
ensure security of power supply at the most optimum rates, so that the consumers are not
subjected to any risks of supply failure or spike in the power purchase rates.
For the purpose of this MYT Order, the Commission has computed the balance amount of
energy required after taking into account all the long-term/medium-term sources tied-up by
AEML-D for each year of the Control Period, which has been considered as purchase from
short-term sources. The Commission has considered the rate of Rs. 3.50 per unit as
submitted by AEML-D in its submission. The following Table shows the power purchase
quantum and cost considered from short-term sources:
Table 5-29: Short Term Power Purchase Cost approved by the Commission for FY
2020-21 to FY 2024-25
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
PP Quantum (MU) 5,856.40 3,002.93 3,334.60 3,551.71 3,784.45
PP Rate (Rs./kWh) 3.50 3.50 3.50 3.50 3.50
PP Cost (Rs. Crore) 2,049.74 1,051.02 1,167.11 1,243.10 1,324.56
5.3.9 Surplus Sale
AEML-D's Submission
AEML-D has projected hourly surplus power that will be available during the Control
Period for sale, considering availability of different sources and likely backing down of
base load sources. AEML-D has assumed that all surplus power will be sold through Power
Exchanges. Regarding the rate of sale of surplus power, AEML-D has considered the
estimated sale rate of Rs. 3.03/kWh for projecting the revenue from surplus sale. Based on
the above, the estimated revenue from sale of surplus power over the Control Period is
shown in the Table below:
Table 5-30: Revenue from Surplus Power for FY 2020-21 to FY 2024-25
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
PP Quantum (MU) 0.00 (16.66) (10.98) (10.88) (6.66)
PP Rate (Rs./kWh) 3.03 3.03 3.03 3.03 3.03
PP Cost (Rs. Crore) 0.00 (5.05) (3.33) (3.30) (2.02)
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 273 of 445
Commission’s Analysis and Ruling
The Commission has computed the short-term purchase after considering the balance
energy requirement during each year of the 4th Control Period. Therefore, the Commission
has not considered any surplus sale for any year of the Control Period. The quantum and
revenue from surplus sale, if any, shall be considered at the time of true-up for the respective
years, based on the necessary justification to be provided by AEML-D.
5.3.10 Cost of Banked Energy in H2 of FY 2019-20
AEML-D's Submission
As stated in the section on Provisional Truing up of FY 2019-20, AEML-D intends to bank
226.80 MU of energy in H2 of FY 2019-20, which will be returned in FY 2020-21. AEML-
D has included the cost of this energy on provisional basis in the power purchase cost for
FY 2020-21, as the cost for returning this power shall be incurred in FY 2020-21. The rate
at which this energy shall be procured for returning the same is considered equivalent to
the rate of procurement of short-term power in FY 2019-20, i.e., Rs. 3.73 per unit. Further,
OA charges for this energy return (estimated at the same level as estimated for H2 of FY
2019-20) is also included in the power purchase cost for FY 2020-21.
Commission’s Analysis and Ruling
The Commission has considered the per unit cost of this banking transaction as Rs. 3.73 per
unit (226.80 MU @ Rs. 84.50 Crore). The Commission observed that the per unit cost of
banking is comparable to the average purchase cost from Power Exchanges during FY
2019-20. The Commission therefore approves the cost of banking power as Rs. 84.50 crore
in the power purchase cost of FY 2020-21. The Commission also considers Rs. 8.36 Crore
towards OA charges for banked energy in FY 2019-20.
The Commission reiterates that the banking transactions carried out by AEML-D should
benefit the consumers and therefore, AEML-D shall review the banking arrangement with
each of the parties and justify to the Commission that such transactions are in the overall
benefit to the consumers, in its next Tariff Petition. The Commission based on the
submissions made by AEML-D shall take a considered view on the banking transactions at
the time of MTR Order for the 4th Control Period.
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5.3.11 Power Purchase from OA consumers and Solar Roof Top Systems
AEML-D's Submission
No projection of purchase from OA consumers and RTS generation has been made, as this
energy is in the nature of imbalance and it cannot be projected. Any actual power purchase
made from OA consumers or Solar Rooftop PV systems will be presented at the time of
truing up of respective years.
Commission’s Analysis and Ruling
The Commission has not considered any power purchase from Open Access and RTS
generation, in line with AEML-D submission.
5.3.12 Transmission Charges
AEML-D's Submission
AEML-D has considered the Transmission Charges as per the revised Petition for
determination of Intra-State Transmission tariff for the 4th Control Period by the State
Transmission Utility (STU). Accordingly, the Transmission Charges for the Control Period
as considered in this Petition are as under:
Table 5-31: Transmission Charges for FY 2020-21 to FY 2024-25 (Rs. Crore)
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Transmission Charges 835.32 507.05 527.21 567.14 607.62
Commission’s Analysis and Ruling
The Commission has considered the Transmission Charges for the 4th Control Period in line
with the share of AEML-D as approved in the InSTS Order dated 30 March 2020 in Case
No. 327 of 2019 for FY 2020-21 to FY 2024-25. The following Table shows the approved
Transmission Charges for AEML-D:
Table 5-32: Transmission Charges approved by the Commission for FY 2020-21 to
FY 2024-25 (Rs. Crore)
Particulars/ (Rs.
Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Transmission Charges 476.65 480.59 484.83 488.14 486.30
5.3.13 SLDC Charges
AEML-D's Submission
AEML-D has considered the SLDC charges payable in each year of the Control Period at
the same level as the approved SLDC Charges for FY 2019-20. Accordingly, the SLDC
Charges for the Control Period as considered in this Petition are as under:
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Table 5-33: SLDC Charges for FY 2020-21 to FY 2024-25 (Rs. Crore)
Particulars/ (Rs.
Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
SLDC Charges 2.00 2.00 2.00 2.00 2.00
Commission’s Analysis and Ruling
The Commission has considered the SLDC charges for the 4th Control Period in line with
the SLDC charges approved by the Commission for AEML-D in the MYT Order for
MSLDC dated 30 March 2020 in Case No. 291 of 2019.
Table 5-34: SLDC Charges approved by the Commission for FY 2020-21 to FY
2024-25 (Rs. Crore)
Particulars/ (Rs.
Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
SLDC Charges 2.36 2.22 2.39 2.55 2.58
5.3.14 Standby Charges
AEML-D's Submission
AEML-D submitted that it does not see any value in continuing with the Stand-by support
from MSEDCL and requests the Commission to allow discontinuation of the same in the
interest of its consumers. This will provide much needed tariff relief to the consumers.
However, as the present arrangement of stand-by continues, without prejudice to its views,
AEML-D has considered the cost of Stand-by Charges in the ARR forecast for each year
of the Control Period. AEML-D has considered the average of Coincident Peak Demand
(CPD) and Non-coincident Peak Demand (NCPD) of AEML-D, TPC-D and BEST as per
the revised Petition for determination of Intra-State Transmission tariff for the 4th Control
Period by the State Transmission Utility (STU) and has calculated its share of Standby
Charges. The Standby Charges considered for each year of the fourth Control Period is
shown in the Table below:
Table 5-35: Standby Charges for FY 2020-21 to FY 2024-25 (Rs. Crore)
Particulars/ (Rs.
Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Standby Charges 189.49 190.71 191.94 193.16 194.38
Commission’s Analysis and Ruling
The Commission has considered AEML-D’s share of Standby Charges for the 4th Control
Period, as approved in MSEDCL’s MYT Order dated 30 March 2020 in Case No. 322 of
2019, as shown in the Table below:
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Table 5-36: Standby Charges approved by the Commission for FY 2020-21 to FY
2024-25 (Rs. Crore)
Particulars/ (Rs.
Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Standby Charges 183.25 184.15 185.04 185.93 186.81
5.3.15 Summary of Power Purchase
AEML-D's Submission
AEML-D submitted the following power purchase quantum and cost based on the
discussions made in above sections:
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Table 5-37: Power Purchase Cost Projected by AEML-D for 4th Control Period
Unit
FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
Quantum (MU)
Rate (Rs/
kWh)
Cost (Rs Crore)
Quantum (MU)
Rate (Rs/
kWh)
Cost (Rs
Crore)
Quantum (MU)
Rate (Rs/
kWh)
Cost (Rs
Crore)
Quantum (MU)
Rate (Rs/
kWh)
Cost (Rs
Crore)
Quantum (MU)
Rate (Rs/
kWh)
Cost (Rs
Crore)
ADTPS 3,699.93 4.63 1,713.41 3,649.70 4.74 1,729.30 3,662.71 4.76 1,742.03 3,676.83 4.76 1,751.73 3,675.61 4.79 1,759.66
DSPPL 66.19 10.30 68.17 66.19 10.30 68.17 66.19 10.30 68.17 66.39 10.30 68.38 66.19 10.30 68.17
Existing Non-Solar Sources
214.08 5.33 114.07 214.08 5.41 115.82 97.49 5.54 54.03 87.05 5.59 48.68 86.95 5.60 48.68
New Wind-Solar Hybrid
0 - 0 3,068.77 3.35 1,028.04 3,068.77 3.35 1,028.04 3,076.77 3.35 1,030.72 3,068.77 3.35 1,028.04
Short Term Sources
5,977.34 3.50 2,092.07 3,151.02 3.50 1,102.86 3,430.64 3.50 1,200.72 3,610.17 3.50 1,263.56 3,820.58 3.50 1,337.20
Surplus Sales 0 - 0 (16.66) 3.03 (5.05) (10.98) 3.03 (3.33) (10.88) 3.03 (3.30) (6.66) 3.03 (2.02)
Cost of banking for FY 19-20
84.50
OA charges for energy banked in FY 19-20
8.36
REC Cost 0.00
Sub-Total 4,080.59 4,039.14 4,089.67 4,159.78 4,239.74
Transmission Charges
835.32
507.05
527.21
567.14
607.62
SLDC Charges 2.00 2.00 2.00 2.00 2.00
Standby Charges
189.49
190.71
191.94
193.16
194.38
Total 9,957.54 5.13 5,107.40
10,133.10
4.68 4,738.90 10,314.8
2 4.66 4,810.81
10,506.32
4.68 4,922.08 10,711.4
4 4.71 5,043.75
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Commission’s Analysis and Ruling
Based on the analysis submitted above, the Commission has approved the Power Purchase quantum and cost for 4th Control Period as given in the
Table Below:
Table 5-38 Power Purchase Cost approved by the Commission for 4th Control Period
Unit
FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
Quantum (MU)
Rate (Rs/
kWh)
Cost (Rs Crore)
Quantum (MU)
Rate (Rs/
kWh)
Cost (Rs
Crore)
Quantum (MU)
Rate (Rs/
kWh)
Cost (Rs
Crore)
Quantum (MU)
Rate (Rs/
kWh)
Cost (Rs
Crore)
Quantum (MU)
Rate (Rs/
kWh)
Cost (Rs
Crore)
ADTPS 3733.00 4.63 1,728.62 3733.00 4.78 1,783.86 3733.00 4.93 1,838.64 3,743.84 5.05 1,891.32 3,733.00 5.21 1,943.91
DSPPL 66.19 10.30 68.17 66.19 10.30 68.17 66.19 10.30 68.17 66.19 10.30 68.17 66.19 10.30 68.17
Existing Non-Solar Sources
214.08 5.25 112.32 214.08 5.25 112.32 97.49 5.54 54.02 87.62 5.59 49.02 86.87 5.60 48.64
New Wind-Solar Hybrid
3,066.00 3.24 993.38 3,066.00 3.24 993.38 3,066.00 3.24 993.38 3,066.00 3.24 993.38
Short Term Sources
5,856.40 3.50 2,049.74 3,002.93 3.50 1,051.02 3,334.60 3.50 1,167.11 3,551.71 3.50 1,243.10 3,784.45 3.50 1,324.56
Banking 84.50
OA charges 8.36
Sub-Total 9,869.67 4.11 4,051.72
10,082.19
3.98 4,008.77 10,297.2
9 4.00 4,121.33
10,515.36
4.04 4,244.99 10,736.5
1 4.08 4,378.66
Transmission Charges
476.65 480.59 484.83 488.14 486.30
SLDC Charges
2.36
2.22 2.39 2.55 2.58
Standby Charges
183.25
184.15 185.04 185.93 186.81
Total 9,869.67 4.78 4,713.98
10,082.19
4.64 4,675.73 10,297.2
9 4.66 4,793.59
10,515.36
4.68 4,921.62 10,736.5
1 4.71 5,054.36
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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5.4 OPERATION AND MAINTENANCE EXPENSES
AEML-D's Submission
In accordance with the MYT Regulations, 2019, AEML-D has considered the Net
entitlement of total O&M expenses for FY 2016-17 to FY 2018-19 and averaged the same
to arrive at the midpoint, i.e., FY 2017-18. For FY 2016-17, AEML-D has considered the
total O&M expenses (net entitlement) approved by the Commission in AEML-D’s MTR
Order dated 12 September 2018 in Case No. 200 of 2017. For FY 2017-18 and FY 2018-
19, AEML-D has considered the O&M expenses (net entitlement) as claimed in the sections
on truing up of FY 2017-18 and FY 2018-19. Thereafter, the escalation rate for FY 2018-
19 and FY 2019-20 have been applied to arrive at the Base Year (FY 2019-20) O&M
expenses for the next Control Period.
As regards the escalation rate for each year subsequent to FY 2019-20, Regulation 73.3
specifies that it shall be derived based on 30% WPI (2011-12 series) inflation and 70% CPI
inflation for the past five years, reduced by the Efficiency Factor of 1%, while approving
ARR for each year of the Control Period. Since the escalation factor based on 30% WPI
(2011-12 series) inflation and 70% CPI inflation for the past five years till FY 2019-20
works out to 3.84%, the same has been considered for determining O&M expenses from
FY 2020-21 on provisional basis.
As per the MYT Regulations, the 1% Efficiency Factor shall be considered as zero
depending upon growth of consumers in the last three years. In case the increase in number
of consumers is lower than 2% annually over the last three years, then reduction in
Efficiency Factor shall be considered in proportion to the percentage growth in number of
consumers. In this regard, AEML-D has analysed the growth rate of consumers as below
(considering projected number of consumers for FY 2019-20):
Table 5-39 Consumer Growth Rate from FY 2017-18 to FY 2019-20
Number of consumers FY 16-17 FY 17-18 FY 18-19 FY 19-20 CAGR
Own supply consumers (A) 2,405,026 2,445,618 2,466,420 2,499,828
Change-over consumers (B) 566,260 563,233 563,980 567,716
Open Access consumers (C) 40 66 62 62
Total (A+B+C) 2,971,326 3,008,917 3,030,462 3,067,606 1.07%
Based on the above, it can be seen that the growth rate of consumers works out to 1.07%.
Accordingly, as per the MYT Regulations, 2019, the Efficiency Factor has been considered
as 0.47% and the net escalation factor for projecting O&M expenses in each year of the
Control Period works out to 3.37 %.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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AEML-D reviewed costs, which were being directly considered under ‘Wires’ and ‘Supply’
and those which were being considered under “Common” and are subsequently allocated
to Wires and Supply. It was found that A&G expenses were largely identified entirely under
“Common” expenses, which AEML-D submits is a correct proposition as A&G expenses
are related to the business as a whole and cannot be identified with Wires or Supply
functions directly. Similarly, certain costs such as housekeeping was being considered
under R&M, which should be more appropriately considered as “Common” A&G cost,
instead. AEML-D has also reviewed the way the ‘common’ costs are being allocated
between Wires and Supply and has found that the allocation of costs leaves much room for
improvement to make it reflective of actual cost incidence.
As a result of this exercise, AEML-D has not only moved out some costs from Wires /
Supply to Common expense head, but has also allocated the ‘Common’ costs between
Wires and Supply in a more logical manner using the ratio of Turnover of Wires and Supply
business. The turnover ratio for FY 2018-19 for Wires and Supply business is 20:80, which
has been considered to allocate the common costs. Given that presently the common costs
were being allocated in a largely adhoc manner between Wires and Supply, the proposed
method ensures that the same will be done in a logical way going forward. This method of
allocation reflects the cause-effect relationship better because the common employees,
resources, activities and services are rendered for the business as a whole and hence, the
allocation of this cost input to a function must represent the output of the function. In RInfra
period, the Corporate expenses of RInfra were also being allocated on all its business
segments in the ratio of turnover. This methodology was also following the logic of a closer
representation of input with output and was accepted by the Commission as well. Similarly,
the expenses for common corporate services incurred by AEML as a whole and recorded
under ‘professional and consultancy fee’ in A&G expenses are also allocated to AEML-G,
AEML-T and AEML-D in the ratio of Turnover.
The exercise when carried using FY 2018-19 data yields a revised ratio of 47%:53% for
Wires:Supply cost allocation. As the normative allowance for Wires and Supply O&M cost
for the past years, which are being trued-up or provisionally trued-up in this Petition have
been approved based on the norms prepared using the past data, the re-allocation of costs
is only proposed from FY 2020-21 onwards, i.e., for the new Control Period. The expenses
for FY 2017-18 to FY 2019-20 are being recorded in the books in Wires and Supply in the
existing manner only, so as to remain comparable with the normative allowances for the
two segments.
Due to proposed change in ratio of expenses between Wires and Supply business, it is not
possible to apply the escalation rate directly to the Base Wires or Supply O&M expense for
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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the MYT Control Period. Hence, AEML-D has applied the escalation rate to the Base O&M
expenses for the Distribution business as a whole to project the total Distribution O&M
expenses allowable for each year from FY 20-21 to FY 24-25 and thereafter segregated the
same into Wires and Supply considering the ratio 47:53. AEML-D has requested the
Commission to consider these submissions and approve the O&M expenses accordingly.
AEML-D has additionally claimed O&M expenses on account of Impact of GST and
Impact of SC Judgement / GoM Notification over and above the normative O&M claimed
in its Petition, as shown in the Table below:
Table 5-40 Projected O&M Expenses for Wires and Supply Business Particulars / (Rs.
Crore)
FY 16-
17
FY 17-
18
FY 18-
19
Averag
e FY 19-20
FY 20-
21
FY 21-
22
FY 22-
23
FY 23-
24
FY 24-
25
Base O&M
Expense (Net
Entitlement)
1,158.53 1,175.93 1,258.57 1,197.68 1,299.39 1,343.23 1,388.56 1,435.41 1,483.85 1,533.91
Impact of GST 10.53 10.88 11.25 11.63 12.02 12.43
Impact of SC
Judgment/GoM
notification
12.19 12.60 13.03 13.47 13.92 14.39
Total 1,366.72 1,412.83 1,460.51 1,509.79 1,560.73
The total O&M Expenses are segregated between Wires Business and Supply Business in
the ratio of 47%:53%, as shown in the Table below:
Table 5-41 Total O&M Expenses segregated between Wires & Supply Business
Particulars / (Rs. Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Wires Business 646.05 667.85 690.38 713.68 737.76
Supply Business 720.67 744.99 770.12 796.11 822.97
Total 1,366.72 1,412.83 1,460.51 1,509.79 1,560.73
Commission’s Analysis and Ruling
Regulations 75 and 84 of the MYT Regulations, 2019 specify the methodology for
determination of O&M expenses for the Control Period from FY 2020-21 to FY 2024-25
for the Wires Business and Supply Business, respectively. The relevant Regulations are
quoted as below (Only for Wires):
75.2 The Operation and Maintenance expenses shall be derived on the basis of the average
of the Trued-up Operation and Maintenance expenses after adding/deducting the share of
efficiency gains/losses, for the three Years ending March 31, 2019, excluding abnormal
Operation and Maintenance expenses, if any, subject to prudence check by the Commission:
Provided that the average of such Operation and Maintenance expenses shall be considered
as Operation and Maintenance expenses for the Year ended March 31, 2018, and shall be
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escalated at the respective escalation rate for FY 2018-19 and FY 2019-20, to arrive at the
Operation and Maintenance expenses for the base year ending March 31, 2020:
Provided further that the escalation rate for FY 2018-19 and FY 2019-20 shall be computed
by considering 30% weightage to the average yearly inflation derived based on the monthly
Wholesale Price Index of the respective past five financial years as per the Office of
Economic Advisor of Government of India and 70% weightage to the average yearly
inflation derived based on the monthly Consumer Price Index for Industrial Workers (all-
India) of the respective past five financial years as per the Labour Bureau, Government of
India:
Provided also that at the time of true-up for each Year of this Control Period, the Operation
and Maintenance expenses shall be derived on the basis of the Final Trued-up Operation
and Maintenance expenses after adding/deducting the sharing of efficiency gains/losses,
for the base year ending March 31, 2020, excluding abnormal expenses, if any, subject to
prudence check by the Commission, and shall be considered as the Base Year Operation
and Maintenance expenses.
75.3 The Operation and Maintenance expenses for each subsequent year shall be
determined by escalating these Base Year expenses of FY 2019-20 by an inflation factor
with 30% weightage to the average yearly inflation derived based on the monthly Wholesale
Price Index of the respective past five financial years as per the Office of Economic Advisor
of Government of India and 70% weightage to the average yearly inflation derived based
on the monthly Consumer Price Index for Industrial Workers (all-India) of the past five
financial years as per the Labour Bureau, Government of India, as reduced by an efficiency
factor of 1% or as may be stipulated by the Commission from time to time, to arrive at the
permissible Operation and Maintenance expenses for each year of the Control Period:
Provided that, in the Truing-up of the O&M expenses for any particular year of the Control
Period, an inflation factor with 30% weightage to the average yearly inflation derived
based on the monthly Wholesale Price Index of the respective past five financial years
(including the year of Truing-up) and 70% weightage to the average yearly inflation
derived based on the monthly Consumer Price Index for Industrial Workers (all-India) of
the respective past five financial years (including the year of Truing-up), as reduced by an
efficiency factor of 1% or as may be stipulated by the Commission from time to time, shall
be applied to arrive at the permissible Operation and Maintenance Expenses for that year:
Provided further that the efficiency factor shall be considered as zero, in case there is an
increase in the number of consumers including Open Access consumers connected to the
Distribution Wires of at least 2 percent annually over the last 3 years:
Provided also that in case such increase in the number of consumers is lower than 2 percent
annually over the last 3 years, then the reduction in efficiency factor shall be considered in
proportion to the percentage growth in the number of consumers.”
Accordingly, the Commission has considered the O&M expenses approved in the Truing-
up of FY 2016-17 to FY 2018-19, after deducting sharing of gains/(losses), to arrive at 3-
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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year average expenses. The average expenses thus arrived are considered as average
expenses for FY 2017-18 and are escalated twice, i.e., by escalation rate of FY 2018-19 and
FY 2019-20 to arrive at normative expenses for FY 2019-20, to be considered as base O&M
expenses for projecting O&M expenses for the MYT Control Period.
The computation of normative O&M expenses for FY 2019-20 in accordance with the MYT
Regulations, 2019 is shown in the Table below:
Table 5-42: Normative O&M Expenses for FY 2019-20 (Rs. Crore)
Particulars
FY
2016-17
FY
2017-18
FY
2018-19 Average
Normative O&M
expenses for FY
2019-20
O&M Expenses for Wires
Business 774.08 773.48 828.45 792.00 847.01
O&M Expenses for Retail
Supply Business 384.45 375.67 407.40 389.17 416.20
Total O&M Expenses 1,158.53 1,149.14 1,235.85 1,181.17 1,263.21
The Commission has considered the WPI and CPI as per the 2011-12 series to work out
escalation rates for the next Control Period, in accordance with the MYT Regulations, 2019.
As specified in the above Regulations, the Commission has computed the inflation factor
considering 30% weightage of average yearly inflation derived based on the monthly WPI
of the past five years and 70% weightage to the average yearly inflation derived based on
the monthly Consumer Price Index (CPI) for Industrial Workers of the past five financial
years. Based on the above computation, the Commission has worked out the escalation rate
of 3.83% for FY 2020-21 and onwards for projection of O&M expenses, before accounting
for the Efficiency Factor.
The Commission observes that AEML-D has considered the Efficiency Factor of 0.47% for
computing the Escalation Rate, in accordance with the MYT Regulations, 2019. In this
regard, AEML-D submitted that as per Regulations 75.3 of the MYT Regulations, 2019,
Efficiency Factor would be considered zero if increase in number of consumers for past
three years are more than 2% annually. The extract of the Regulation is reproduced below:
“Provided further that the efficiency factor shall be considered as zero, in case there is
an increase in the number of consumers including Open Access consumers connected to
the Distribution Wires of at least 2 percent annually over the last 3 years:
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Provided also that in case such increase in the number of consumers is lower than 2
percent annually over the last 3 years, then the reduction in efficiency factor shall be
considered in proportion to the percentage growth in the number of consumers”
Accordingly, since increase in consumer numbers are around 1.07% annually over the past
three years, AEML-D has considered any efficiency factor of 0.47%. The Commission has
verified the increase in number of consumers of AEML-D in the past three years. The
Commission observed an increase of 1.07% in Wires Consumers and 1.02% Supply
consumers. Accordingly, the Efficiency Factor has been considered as 0.47% and 0.49%
for Wires Business and Supply Business, respectively, in line with the MYT Regulations,
2019.
After consideration of Efficiency Factor as stated above, the escalation rate for 4th Control
Period is reduced to 3.36% for Wires Business and 3.34% for Supply Business. The
following Table shows the Escalation rates derived for Wires and Supply considering the
Efficiency Factor based on the consumer growth in past three years:
Table 5-43: Escalation Rates for 4th Control Period
Particulars Wires
Business
Supply
Business
Escalation Rate for FY 2018-19 3.76% 3.76%
Escalation Rate for FY 2019-20 3.07% 3.07%
Escalation Rate from FY 2020-21 onwards 3.83% 3.83%
Consumer growth rate 1.07% 1.02%
Efficiency Factor 0.47% 0.49%
Escalation Rate from FY 2020-21 onwards
considering Efficiency Factor 3.36% 3.34%
The Commission has worked out the Normative O&M expenses based on the above
escalation rates as shown in the Table below:
Table 5-44: Normative O&M Expenses approved for 4th Control Period (Rs. Crore)
Particulars
Normative
FY 2019-
20
FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
O&M Expenses for
Wires Business 847.01 875.50 904.96 935.41 966.88 999.40
O&M Expenses for
Supply Business 416.20 430.09 444.45 459.28 474.61 490.45
Total O&M
Expenses 1,263.21 1,305.60 1,349.41 1,394.69 1,441.49 1,489.86
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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Re-Allocation of O&M Expenses
The Commission observes that AEML-D has sought re-allocation of O&M expenses
between Wires Business and Supply Business in the ratio of 47:53 respectively. The
Commission is of the view that the Business with higher asset base requires more O&M
expenses as compared to Businesses with lower asset base. Wires Business is capital
intensive business and requires more asset handling than Supply Business. The Commission
had accordingly considered the ratio of 65:35 for Wires Business and Supply Business in
the MYT Regulations, 2019.
Further, the the O&M expenses actually incurred in H1 of FY 2019-20 as submitted by
AEML-D in Form F3.2 to F3.4 is shown in the Table below:
Table 5-45: Provisional Actual Submitted by AEML-D for H1 of FY 2019-20
Particulars Wires Supply Total
Employee Expenses 217.35 165.86 383.22
A&G expenses 86.62 58.47 145.09
R&M Expenses 145.75 8.99 154.74
Total O&M expenses 449.73 233.32 683.05
% of O&M expenses 65.84% 34.16% 100%
AEML-D has stated that expenses for FY 2017-18 to FY 2019-20 are being recorded in the
books in Wires and Supply in the existing manner only, so as to remain comparable with
the normative allowances for the two segments. As seen from the above Table, the actual
O&M expenses as submitted by AEML-D for H1 of FY 2019-20 is in the ratio of 66:34 for
Wires and Supply Business, which is in line with the Allocation Matrix specified in the
MYT Regulations, 2019. The Commission has been considering the allocation of expenses
between Wires Business and Supply Business as submitted by AEML-D all these years,
based on AEML-D contention that it is allocating the expenses using some rationale, and
hence, it is not required to adopt the Allocation Matrix specified in the MYT Regulations,
2015 (or MYT Regulations, 2011 earlier, where the same Allocation Matrix was specified).
The Commission is very clear that for a Distribution Licensee like AEML-D with an
established distribution network spread evenly across its area of supply, higher O&M
expenses would be incurred in the Wires Business as compared to Supply Business, which
is in contradiction to the submissions made by AEML-D. The Commission has therefore,
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 286 of 445
not re-allocated the O&M expenses between Wires Business and Supply Business, for the
next Control Period, as sought by AEML-D.
5.5 CAPITAL EXPENDITURE AND CAPITALISATION
AEML-D's Submission
AEML-D has proposed Capital Expenditure and Capitalization in the following Schemes:
1. 33/11 kV Receiving Station
a. Installation & commissioning of new 33-22/11kV substations
b. Augmentation of capacity at existing 33-22/11kV substations
c. Laying of 33kV cables for diversion/reconfiguration of existing network
d. Replacement of old and obsolete equipment/ cables
e. Any other associated works
2. 11 kV Mains Network Strengthening
a. Installation & commissioning of new 11/0.433 kV substations along with
the associated 11kV feeders.
b. 11kV network improvement schemes to relieve over-loaded infrastructure.
c. Up-gradation of cable network.
d. Replacement of old and obsolete switchgears (Oil-type RMU) / cables
e. Any other associated works
3. Low Tension Mains
a. Laying of new LT feeders and installation of LT pillars
b. LT network improvement schemes to relieve loaded infrastructure.
c. Replacement of old and obsolete equipment/ cables
d. Any other associated works
4. Low Tension Services
5. Street Lights
6. System Modernization
7. Instruments
8. Information Technology (IT) Infrastructure
9. Others
10. Civil
11. R&D, Safety & DSM
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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The Summary of the capital expenditure and capitalization proposed by AEML-D for the
Wires Business for each year of the Control Period is shown in the Table below:
Table 5-46: Capital Expenditure and Capitalisation for 4th Control Period as
submitted by AEML-D for Wire Business (Rs. Crore) Particulars FY
2020-21
FY
2021-22
FY
2022-23
FY
2023-24
FY
2024-25
Capital Expenditure
DPR Schemes 1,066.28 920.58 899.42 1,027.92 1,042.24
Non-DPR Schemes 84.00 119.00 103.00 85.00 92.00
Total 1,150.28 1,039.58 1,002.42 1,112.92 1,134.24
Capitalization
DPR Schemes 980.34 951.08 915.56 1,063.33 996.76
Non-DPR Schemes 81.08 114.85 112.24 88.61 92.57
Total 1,061.42 1,065.93 1,027.80 1,151.94 1,089.33
AEML-D submitted the Smart Metering DPR on 21 May 2019, which has been accorded
in-principle approval vide MERC Order dated 22 October 2019. The Capital expenditure
proposed to be incurred in that DPR in FY 2020-21 and FY 2021-22 has been considered
in the capital expenditure plan. The conventional Metering DPRs are under preparation and
will be submitted for approval after finalization. In the absence of Metering DPRs, AEML-
D has considered the capital expenditure at Rs. 22 Crore for each year of the Control Period
(at the same level as approved for FY 2019-20 in the approved Metring DPR for FY 2019-
20).
The summary of capital expenditure and capitalization proposed by AEML-D for the
Supply Business for each year of the Control Period is shown in the Table below:
Table 5-47: Capital Expenditure and Capitalisation for 4th Control Period as
submitted by AEML-D for Retail Supply Business (Rs. Crore)
Particulars / (Rs. Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Capital Expenditure 218.57 174.74 22.00 22.00 22.00
Capitalization 218.57 174.74 22.00 22.00 22.00
Commission’s Analysis and Ruling
The Commission has undertaken prudence check of the capitalisation proposed during the
Control Period. The Commission has considered the Capital Expenditure and Capitalization
submitted by AEML-D for the Control Period based on the DPR schemes approved by the
Commission till date. The Commission has considered the DPR approved cost for
approving capitalization for the Control Period.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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The Commission also observes that AEML-D has proposed capitalisation in the Control
Period against DPR schemes that are submitted to the Commission, but yet to be approved
by the Commission. The summary of proposed capitalisation against such DPR schemes
for Wires Business and Supply Business is given in the Table below:
Table 5-48: Capitalisation against DPR schemes yet to be approved by the
Commission (Rs. Crore)
Particulars FY
2020-21
FY
2021-22
FY
2022-23
FY
2023-24
FY
2024-25
Wires Business 445.38 674.08 738.89 1048.68 996.76
Supply Business 22.00 22.00 22.00 22.00 22.00
If DPR schemes are pending approval, then additional capitalisation up to 20% of
capitalisation approved for that year may be added, in accordance with Regulation 24.6 of
MYT Regulations, 2019, as reproduced below:
“24.6 The Commission may approve, for each year of the Control Period, an additional
amount equivalent to 20% of the total capital expenditure approved for that year,
towards planned or unplanned capital expenditure that is yet to be approved by the
Commission.”
Accordingly, against DPR schemes pending for approval, the Commission has allowed
additional capitalisation at 20% of the approved DPR capitalisation for Wires Business and
Supply Business for FY 2021-22 to FY 2024-25.
Non-DPR to DPR ratio for Wires Business is within the limit of 20% in FY 2020-21 and
FY 2021-22. Therefore, Non-DPR capitalisation for these years is considered same as
submitted by AEML-D. However, from FY 2022-23 onwards, Non-DPR to DPR ratio
works out to be higher than the limit of 20%. Therefore, the Commission has approved
capitalisation against Non-DPR schemes at 20% of approved DPR capitalisation for Wires
Business for FY 2022-23, FY 2023-24 and FY 2024-25.
The Commission notes that after allowing additional DPR capitalisation of 20% against
Schemes pending for approval and Non-DPR capitalisation as above, the approved
capitalisation for the Wires Business is found to be very low for the period from FY 2022-
23 to FY 2024-25 as compared to the past average capitalisation. The Commission has
computed 50% of average capitalisation of past 5 years (FY 2014-15 to FY 2018-19) for
which Truing-up has been completed by the Commission and is as shown in the Table
below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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Table 5-49: Past Trend of Capitalisation for AEML-D (Rs. Crore)
Particulars FY 2014-
15 FY 2015-
16 FY 2016-
17 FY 2017-
18 FY 2018-
19 Average
Wires Business (A) 660.75 449.34 400.03 317.04 397.63 444.96
Supply Business (B) 22.00 22.63 16.94 19.98 22.68 20.85
50% average capitalisation of past 5 years for Wires Business (A*50%) 222.48
50% average capitalisation of past 5 years for Supply Business (B*50%) 10.42
For FY 2023-24 and FY 2024-25, the sum of DPR and Non-DPR capitalisation approved
by the Commission for Wires Business and Supply Business is lower than 50% of the
average capitalisation, i.e., Rs. 222.48 Crore and Rs. 10.42 Crore, respectively. Therefore,
the Commission has allowed additional capitalisation equal to the difference between the
approved capitalisation and Rs. 222.48 Crore for Wires Business and Rs. 10.42 Crore for
Supply Business, towards DPRs yet to be submitted/yet to be approved.
For FY 2020-21 to FY 2022-23, the DPR and Non-DPR capitalisation approved by the
Commission for Wires Business and Supply Business is higher than Rs.222.48 Crore and
Rs. 10.42 Crore, respectively, therefore, no additional capitalisation is considered towards
DPR schemes yet to be approved and DPRs yet to be submitted.
It is to be noted that mere consideration of capital expenditure/capitalisation in the MYT
Order does not mean that the same is approved. No Scheme shall be undertaken unless the
same is approved by the Commission under the separate in-principle approval process or
qualifies under Non-DPR scheme.
The capitalisation approved by the Commission for FY 2020-21 to FY 2024-25 is
summarised in the Table below:
Table 5-50: Capitalisation approved for 4th Control Period (Rs. Crore) Particulars FY
2020-21
FY
2021-22
FY
2022-23
FY
2023-24
FY
2024-25
Capitalisation - Wires Business 629.83 388.45 246.83 222.48 222.48
Capitalisation - Supply Business 130.49 218.57 174.74 10.42 10.42
5.6 DEPRECIATION
AEML-D's Submission
AEML-D has considered opening balance of assets and depreciation for each year of the
Control Period on such assets is determined by considering the depreciation rates as per
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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MYT Regulations, 2019. AEML-D has calculated the depreciation on assets net of
consumer contribution, which is received for asset creation of Wires Business only. Asset
retirement has not been projected at this time, as no estimate for the same is presently
available. Actual asset retirement for each year would be presented at the time of true-up.
The summary of depreciation for each year of the Control Period for Wires Business is
shown below:
Table 5-51: Depreciation for Wires Business for 4th Control Period as submitted by
AEML-D (Rs. Crore)
Depreciation FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
Opening GFA 6,265.41 7,305.82 8,350.74 9,357.54 10,488.47
Addition 1,040.41 1,044.92 1,006.79 1,130.94 1,068.32
Retirement 0.00 0.00 0.00 0.00 0.00
Closing GFA 7,305.82 8,350.74 9,357.54 10,488.47 11,556.79
Depreciation 289.93 336.38 413.60 426.98 438.63
Depreciation (%) 4.27% 4.30% 4.67% 4.30% 3.98%
AEML-D submitted that the addition of Consumer Contribution for each year of the Control
Period has been kept at the same level as the estimated addition of Consumer Contribution
in FY 2019-20. The summary of depreciation for Supply Business for each year of the
Control Period is shown below:
Table 5-52: Depreciation for Supply Business for 4th Control Period as submitted by
AEML-D (Rs. Crore)
Depreciation FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
Opening GFA 670.83 889.40 1,064.14 1,086.14 1,108.14
Addition 218.57 174.74 22.00 22.00 22.00
Closing GFA 0.00 0.00 0.00 0.00 0.00
Dep Rate 889.40 1,064.14 1,086.14 1,108.14 1,130.14
Depreciation 36.66 47.57 38.03 39.02 40.16
Depreciation (%) 4.70% 4.87% 3.54% 3.56% 3.59%
Commission’s Analysis and Ruling
The Commission has computed the Depreciation for the 4th Control Period in accordance
with Regulation 28 of the MYT Regulations, 2019 for the Distribution Wires and Retail
Supply Business, separately.
It has considered the closing GFA for FY 2019-20 as approved in this Order, as the opening
GFA for FY 2020-21, and the addition of GFA equivalent to the capitalisation approved.
The asset addition has been considered net of projected Consumer Contribution, which has
been considered in proportion to the approved capitalisation. It has computed the
Depreciation on the average GFA for the year by applying the weighted average
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 291 of 445
Depreciation rate as approved for FY 2018-19 in this Order. The Commission has applied
the weighted average Depreciation rate of 4.38% for the Wires Business and 5.06% for
Retail Supply Business, based on the average depreciation rates approved in the truing up
for FY 2018-19.
The Depreciation approved by the Commission for Wires and Supply Business for the
Control Period is shown in the Table below:
Table 5-53: Depreciation approved for Wires Business for 4th Control Period
(Rs. Crore) Particulars FY 2020-21 FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Opening GFA 6,152.20 6,737.08 7,097.80 7,327.02 7,533.62
Addition (net of CC) 584.88 360.72 229.22 206.60 206.60
Closing GFA 6,737.08 7,097.80 7,327.02 7,533.62 7,740.22
Depreciation 282.33 303.04 315.97 325.51 334.56
% Depreciation 4.38% 4.38% 4.38% 4.38% 4.38%
Table 5-54: Depreciation approved for Supply Business for 4th Control Period
(Rs. Crore) Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Opening GFA 522.11 652.60 871.17 1,045.91 1,056.33
Addition 130.49 218.57 174.74 10.42 10.42
Closing GFA 652.60 871.17 1,045.91 1,056.33 1,066.75
Depreciation 29.71 38.53 48.48 53.16 53.69
% Depreciation 5.06% 5.06% 5.06% 5.06% 5.06%
5.7 INTEREST ON LONG-TERM LOAN
AEML-D's Submission
Regulation 27 of the MERC MYT Regulations, 2019 specifies the funding of capex
schemes as per the Debt-Equity ratio of 70:30. AEML-D submitted that currently no loans
have been tied up for the proposed capex for the next Control Period. AEML-D submitted
that it will endeavour to restrict the actual loan drawal to 70% of the total capitalisation
during the year. Future debt shall be tied up gradually during the Control Period, which will
also depend upon the Commission’s in-principle approvals of Schemes before and during
the Control Period. Therefore, for the purposes of ARR and tariff for each year of the
Control Period, AEML-D has considered normative funding of capex schemes in the ratio
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 292 of 445
of 70:30 for the purpose of computation of RoE and Interest on loan for each year of the
Control Period.
AEML-D has considered a normative Debt:Equity ratio of 70:30 for capitalized assets
during each year of the Control Period in accordance with the MYT Regulations, 2019.
Regulation 30.5 of the MERC MYT Regulations, 2019 specifies that for computing interest
on loan capital allowable in the ARR, the rate of interest shall be the weighted average rate
of interest computed on the basis of the actual long-term loan portfolio at the beginning of
each year. In this regard, AEML-D submitted that the weighted average rate of interest as
on 01.04.2020 has been considered as per the existing loans, which is 9.05%. Further, the
weighted average interest rate for each year going forward from FY 2020-21 to FY 2024-
25 has been assumed as per the existing loan portfolio, because further debt shall be tied up
during the Control Period, for which the interest rate cannot be estimated at this stage.
Accordingly, the weighted average interest rate based on actual loan works out to 9.05%.
AEML-D submitted that the abovementioned weighted average interest rate has been
applied on the average of opening and closing normative loan balance for each year,
considering the closing loan balance of previous year as worked out in this Petition and the
loan added during current year corresponding to 70% of capitalisation during the year. In
accordance with Regulation 30.3, loan repayment during each year of the Control Period
has been considered equal to the depreciation claimed for that year. Further, as per
Regulation 30.4, no moratorium has been considered and repayment of loan has been
considered from the first year of commercial operation of the scheme. Based on the above,
the interest expenses estimated for the Control Period from FY 2020-21 to FY 2024-25 are
shown in the Tables below:
Table 5-55: Interest on Long-Term Loan for Wires Business for 4th Control Period
as submitted by AEML-D (Rs. Crore)
Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Opening Balance 1,773.22 2,226.29 2,636.06 2,941.92 3,321.30
Additions 743.00 746.15 719.46 806.36 762.53
Repayments 289.93 336.38 413.60 426.98 438.63
Closing Balance 2,226.29 2,636.06 2,941.92 3,321.30 3,645.20
Average Balance 1,999.75 2,431.17 2,788.99 3,131.61 3,483.25
Effective Interest Rate 9.05% 9.05% 9.05% 9.05% 9.05%
Total Interest Expenses 180.98 220.02 252.40 283.41 315.23
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 293 of 445
Table 5-56: Interest on Long-Term Loan for Supply Business for 4th Control Period
as submitted by AEML-D (Rs. Crore)
Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Opening Balance 116.79 233.13 307.88 285.24 261.62
Additions 153.00 122.32 15.40 15.40 15.40
Repayments 36.66 47.57 38.03 39.02 40.16
Closing Balance 233.13 307.88 285.24 261.62 236.86
Average Balance 174.96 270.50 296.56 273.43 249.24
Effective Interest Rate 9.05% 9.05% 9.05% 9.05% 9.05%
Total Interest Expenses 15.83 24.48 26.84 24.75 22.56
Commission’s Analysis and Ruling
The opening loan for FY 2020-21 has been considered equal to the closing loan for FY
2019-20 as approved in the provisional Truing-up for FY 2019-20, in earlier Sections of
this Order.
The Commission has considered the debt amount for each year of the 4th Control Period
equal to 70% of the capitalisation approved. The loan repayments have been considered
equal to the depreciation approved for the respective years. The interest rate has been
considered equal to the rate of interest considered for FY 2019-20 and the interest on long-
term loan has been computed on the normative average loan for each year of the 4th Control
Period.
The interest expenses on long-term loans approved by the Commission for FY 2020-21 to
FY 2024-25 are summarised in the Tables below:
Table 5-57: Interest Expenses approved for Wires Business for 4th Control Period
(Rs. Crore) Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Opening Balance of Loan 1,714.65 1,873.20 1,842.07 1,698.89 1,529.11
Additions during the Year 440.88 271.91 172.78 155.74 155.74
Loan Repayment during the year 282.33 303.04 315.97 325.51 334.56
Closing Balance of Loan 1,873.20 1,842.07 1,698.89 1,529.11 1,350.29
Average Balance 1,793.93 1,857.64 1,770.48 1,614.00 1,439.70
Interest Rate 9.05% 9.05% 9.05% 9.05% 9.05%
Interest Expenses 162.35 168.12 160.23 146.07 130.29
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 294 of 445
Table 5-58: Interest Expenses approved for Supply Business for 4th Control Period
(Rs. Crore) Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Opening Balance of Loan 60.12 121.75 236.22 310.06 264.20
Additions during the Year 91.34 153.00 122.32 7.29 7.29
Loan Repayment during the
year 29.71 38.53 48.48 53.16 53.69
Closing Balance of Loan 121.75 236.22 310.06 264.20 217.80
Average Balance 90.94 178.99 273.14 287.13 241.00
Interest Rate 9.05% 9.05% 9.05% 9.05% 9.05%
Interest Expenses 8.23 16.20 24.72 25.99 21.81
5.8 INTEREST ON WORKING CAPITAL
AEML-D's Submission
AEML-D has calculated IoWC as per Regulation 32.3 and Regulation 32.4 of the MYT
Regulations, 2019. At present the prevailing SBI MCLR is 8.00%. Therefore, AEML-D has
considered interest rate of 9.50% for determining interest on Working Capital (Base Rate
plus 150 basis points as per MYT Regulations, 2019). The summary of IoWC for Wires
Business for each year of the Control Period is shown below:
Table 5-59: IoWC for Wires Business for 4th Control Period as submitted by
AEML-D (Rs. Crore)
Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
O&M 53.84 55.65 57.53 59.47 61.48
Maintenance Spares 66.92 77.54 88.19 98.47 109.99
Receivables 238.39 204.30 228.05 243.90 259.96
Less: Amount of Security Deposit
Total Working Capital Requirement 359.15 337.49 373.78 401.84 431.43
Rate of interest 9.50% 9.50% 9.50% 9.50% 9.50%
Interest on Working Capital 34.12 32.06 35.51 38.18 40.99
For working out working capital requirement for Supply Business, AEML-D has estimated
consumer security deposit by considering the annual addition of security deposit at the same
level as the estimated addition in FY 2019-20. The summary of IoWC for Supply Business
for each year of the Control Period is shown below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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Table 5-60: IoWC for Supply Business for 4th Control Period as submitted by
AEML-D (Rs. Crore) Particulars FY
2020-21
FY
2021-22
FY
2022-23
FY
2023-24
FY
2024-25
O&M 60.06 62.08 64.18 66.34 68.58
Maintenance Spares 6.71 8.89 10.64 10.86 11.08
Receivables 769.33 703.28 715.60 732.83 755.77
Less: Amount of Security Deposit 531.27 580.97 630.67 680.37 730.07
Less: One-month equivalent cost of power 281.40 249.30 254.15 262.54 274.75
Total Working Capital Requirement 23.42 (56.01) (94.40) (132.87) (169.39)
Rate of Interest 9.50% 9.50% 9.50% 9.50% 9.50%
Interest on Working Capital 2.22 0.00 0.00 0.00 0.00
Commission’s Analysis and Ruling
The Commission has computed the IoWC for the Wires Business and Supply Business in
accordance with Regulations 32.3 and 32.4 of the MYT Regulations, 2019. The
Commission has considered the rate of interest for computation of IoWC as 9.50%
considering the applicable MCLR of SBI plus 150 basis points, in accordance with the MYT
Regulations, 2019. It has accepted the submission of AEML-D regarding the amount of
CSD for Supply consumers. The IoWC approved by the Commission for the Wires and the
Business for FY 2020-21 to FY 2024-25 is shown in the Tables below:
Table 5-61: IoWC approved for Wires Business for 4th Control Period (Rs. Crore) Particulars FY
2020-21
FY
2021-22
FY
2022-23
FY
2023-24
FY
2024-25
O&M Expenses 72.96 75.41 77.95 80.57 83.28
Maintenance Spares 61.52 67.37 70.98 73.27 75.34
Receivables 195.95 200.01 204.14 208.32 212.56
Less: Amount of Security Deposit
Total Working Capital Requirement 330.43 342.80 353.07 362.17 371.18
Rate of interest 9.50% 9.50% 9.50% 9.50% 9.50%
Interest on Working Capital 31.39 32.57 33.54 34.41 35.26
Table 5-62: IoWC approved for Supply Business for 4th Control Period (Rs. Crore) Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
O&M Expenses 35.84 37.04 38.27 39.55 40.87
Maintenance Spares 5.22 6.53 8.71 10.46 10.56
Receivables 797.43 815.23 833.53 850.85 868.51
Less: Amount of Security Deposit 531.27 580.97 630.67 680.37 730.07
Less: One-month equivalent cost of
power 248.78 240.99 246.25 252.52 259.20
Total Working Capital Requirement 58.45 36.83 3.60 (32.03) (69.33)
Rate of interest 9.50% 9.50% 9.50% 9.50% 9.50%
Interest on Working Capital 5.55 3.50 0.34 0.00 0.00
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5.9 INTEREST ON CONSUMER SECURITY DEPOSIT
AEML-D's Submission
Regulation 30.11 of the MYT Regulations, 2019 provides that interest shall be allowed on
the amount held in cash as security deposit from retail consumers at the Bank Rate as
declared by RBI as on 1st April of the year. Accordingly, considering the prevailing Bank
Rate of RBI of 5.40%, AEML-D has considered interest rate of 5.40% for projecting the
interest on consumer security deposit for each year of the Control Period, as given below:
Table 5-63: Interest on Security Deposit for 4th Control Period as submitted by
AEML-D (Rs. Crore) Security Deposit FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
CSD at the end of the year 531.27 580.97 630.67 680.37 730.07
Interest Rate (%) 5.40% 5.40% 5.40% 5.40% 5.40%
Interest on CSD 27.35 30.03 32.71 35.40 38.08
Commission’s Analysis and Ruling
For approving the Interest on CSD, the Commission has taken the Bank Rate as on 1st April
2019 of 5.40%, as specified in the MYT Regulations, 2019. It has accepted the amount of
CSD as projected by AEML-D. Accordingly, the Interest on CSD approved by the
Commission is shown in the Table below:
Table 5-64: Interest on CSD approved for the Supply Business for 4th Control
Period (Rs. Crore) Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
Interest on CSD 27.35 30.03 32.71 35.40 38.08
5.10 RETURN ON EQUITY
AEML-D's Submission
Regulation 29.2 of the MERC MYT Regulations, 2019 specifies the provision of Base RoE
capital @ 14% per annum for Distribution Wires and 15.5% for Retail Supply, and
Regulation 29.8 and 29.9 specifies additional RoE of 1.5% for Distribution Wires and 2%
for Retail Supply, based on performance in terms of Wires Availability and Assessed Bills
and Collection Efficiency, respectively, for the two segments. Regulation 29.3.a specifies
that RoE shall be allowed at 14% on the equity capital at the commencement of the year.
Regulation 29.3.b specifies that RoE shall also be allowed on 50% of the equity capital
portion of the allowable capital cost, for the investment put to use such year.
AEML-D submitted that allowing additional RoE at the time of true-up only amounts to
deferring a near-certain cost impact in case of AEML-D, as AEML-D’s Wires Availability
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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and its performance on Collection Efficiency has historically been significantly better than
the thresholds considered for additional RoE in the said Regulations.
AEML-D submitted the actual Wires Availability and Supply Availability from FY 2016-
17 to FY 2018-19 and Percentage of Assessed Bills from FY 2016-17 to FY 2019-20 (up
to October 2019) and stated that the performance in the past has been much better than the
threshold set in the Regulations. Accordingly, AEML-D has considered the RoE as 15.5%
for Wires and 17.5% for Supply business for each year of the Control Period in its Petition.
Regulation 34.2 of the MERC MYT Regulations, 2019 specifies that the rate of RoE,
including additional rate of RoE as allowed by the Commission, at the time of true-up, shall
be grossed up with the effective tax rate of respective financial year.
Further, the second Proviso of Regulation 34.4 of the MERC MYT Regulations, 2019
specifies that effective tax rate shall be estimated for future years based on actual tax paid
as per latest available Audited accounts, subject to prudence check. For AEML, the latest
available Audited Accounts is for FY 2018-19 and during the year Minimum Alternate Tax
(MAT) has been paid at the rate of 21.55%.
AEML-D has considered the effective tax rate of 17.47% for grossing up the RoE rate, for
the benefit of consumers. The actual tax rate based on actual tax paid by AEML shall be
used for grossing up the RoE at the time of truing up. Rate of pre-tax return on equity
considered for estimating the RoE on pre-tax basis for each year of the Control Period works
out to 17.845%
Pre-tax Return on equity for each year of the Control Period for Wires Business is as shown
below:
Table 5-65: Return on Equity for Wires Business for 4th Control Period as
submitted by AEML-D (Rs. Crore)
Particulars FY 2020-
21 FY 2021-
22 FY 2022-
23 FY 2023-
24 FY 2024-
25
Regulatory Equity at the beginning of year 2,095.50 2,407.62 2,721.10 3,023.14 3,362.42
Capitalization during the year 1,061.42 1,065.93 1,027.80 1,151.94 1,089.33
Consumer Contribution and Grants during the year towards capital works
21.01 21.01 21.01 21.01 21.01
Equity portion of capitalization during the year
312.12 313.48 302.04 339.28 320.50
Reduction in Equity Capital on account of retirement / replacement of assets
0.00 0.00 0.00 0.00 0.00
Regulatory Equity at the end of year 2,407.62 2,721.10 3,023.14 3,362.42 3,682.91
Pre-Tax Rate of Return (%) 18.78% 18.78% 18.78% 18.78% 18.78%
Return on Regulatory Equity 422.88 481.63 539.43 599.65 661.61
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 298 of 445
AEML-D submitted that the addition of consumer contribution for each year of the Control
Period has been kept at the same level as the estimated addition of consumer contribution
in FY 2019-20. RoE for each year of the Control Period for Supply Business is as shown
below:
Table 5-66: Return on Equity for Supply Business for 4th Control Period as
submitted by AEML-D (Rs. Crore)
Particulars FY
2020-21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Regulatory Equity at the beginning of year 158.33 223.90 276.32 282.92 289.52
Capitalization during the year 218.57 174.74 22.00 22.00 22.00
Consumer Contribution and Grants during the year towards capital works
0.00 0.00 0.00 0.00 0.00
Equity portion of capitalization during the year 65.57 52.42 6.60 6.60 6.60
Reduction in Equity Capital on account of retirement / replacement of assets
0.00 0.00 0.00 0.00 0.00
Regulatory Equity at the end of year 223.90 276.32 282.92 289.52 296.12
Pre-Tax Rate of Return (%) 21.20% 21.20% 21.20% 21.20% 21.20%
Return on Regulatory Equity 40.53 53.04 59.29 60.69 62.09
Commission’s Analysis and Ruling
The Commission has computed the RoE for the Control Period in accordance with
Regulation 29 of the MERC MYT Regulations, 2019. The Closing Equity of FY 2019-20
has been considered as Opening Equity of FY 2020-21 and onwards. Addition to equity is
considered equal to 30% of the capitalization approved in this Order for respective year of
the Control Period as specified in the MYT Regulations, 2019.
Further, Regulation 34 of the MYT Regulations, 2019 provides for pre-tax RoE to be
computed for the Control Period. The MYT Regulations, 2019 specify that the effective tax
rate as per latest truing up year shall be considered for grossing up the RoE for MYT Control
Period. The MAT rate for FY 2017-18 and FY 2018-19 was 21.34% and 21.55%,
respectively. The Corporate Tax Rate for FY 2017-18 and FY 2018-19 was 34.608% and
34.95%, respectively. However, the Government of India (GoI) has reduced the effective
Income Tax rates recently. The effective MAT rate is reduced to 17.472% and effective
Corporate Tax rate is reduced to 25.17%. Therefore, the Commission has considered the
Effective Income Tax rate after factoring the reduced Tax rates, for allowing pre-tax RoE
for the MYT Control Period, so that the benefit of reduced Tax rates is passed on to the
consumers.
Since Tax payable for AEML-D for FY 2018-19 has been calculated under MAT rate, the
Commission has considered the effective Tax rate of 17.472% which has been applied on
base rate of RoE of 14% for Wires Business and 15.50% for Retail Supply Business to
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 299 of 445
arrive at pre-tax RoE to be allowed for the Control Period. Further, as regards AEML-D’s
request to consider the entire RoE rate (base rate and additional rate) at the tariff
determination stage itself, the Commission is of the view that this would be in violation of
the provisions of the MYT Regulations, 2019, and amount to pre-empting the process of
assessment of performance at the true-up stage, to ascertain whether the Licensee is entitled
to the additional RoE. Hence, the Commission has allowed the RoE at the Base Rate only,
duly grossed up by the applicable Tax rate.
The pre-tax ROE approved by the Commission for the Wires Business and Supply Business
for the Control Period is shown in the Tables below:
Table 5-67: RoE approved for Wires Business for 4th Control Period (Rs. Crore) Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Equity at the beginning of the year (A) 2,259.44 2,434.90 2,543.12 2,611.88 2,673.86
Capitalization during the year (B) 629.83 388.45 246.83 222.48 222.48
Consumer Contribution and Grants
during the year for Capitalization 44.95 27.73 17.62 15.88 15.88
Equity portion of the capital
expenditure capitalised during the year
(C=B*30%)
175.46 108.22 68.76 61.98 61.98
Equity at the end of the year 2,434.90 2,543.12 2,611.88 2,673.86 2,735.84
Return on equity at the beginning of
the year (D=A* 16.964%) 383.29 413.06 431.41 443.08 453.59
Return on Equity on Capitalization
during the year 14.88 9.18 5.83 5.26 5.26
Total Return on Regulatory Equity 398.17 422.23 437.25 448.34 458.85
Table 5-68: RoE approved for Supply Business for 4th Control Period (Rs. Crore) Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Equity at the beginning of the year (A) 160.62 199.77 265.34 317.76 320.89
Capitalization during the year (B) 130.49 218.57 174.74 10.42 10.42
Equity portion of the capital
expenditure capitalised during the year
(C=B*30%)
39.15 65.57 52.42 3.13 3.13
Equity at the end of the year 199.77 265.34 317.76 320.89 324.01
Return on equity at the beginning of
the year (D=A* 18.78%) 30.17 37.52 49.83 59.68 60.27
Return on Equity on Capitalization
during the year 3.68 6.16 4.92 0.29 0.29
Total Return on Regulatory Equity 33.84 43.68 54.76 59.97 60.56
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 300 of 445
5.11 PROVISION FOR BAD AND DOUBTFUL DEBTS
AEML-D's Submission
AEML-D submitted that the provision for bad debts as per the latest audited books of
accounts of AEML are both for Wires Business and Supply Business and there is no
segregation between Wires Business and Supply Business. Hence, for the purpose of
projections, AEML-D has considered the provision for Bad and Doubtful debts at the same
level as actuals for FY 2018-19. The following Table shows the provision for bad and
doubtful debts proposed by AEML-D:
Table 5-69: Provision for Bad Debts for 4th Control Period as submitted by AEML-
D (Rs. Crore)
Particulars / (Rs. Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Provision for Bad Debts - Wires 3.37 3.37 3.37 3.37 3.37
Provision for Bad Debts - Supply 12.62 12.62 12.62 12.62 12.62
Provision for Bad Debts - Total 15.99 15.99 15.99 15.99 15.99
Commission’s Analysis and Ruling
The Commission has considered the provision for bad and doubtful debts in line with the
figures approved in Provisional Truing-up of FY 2019-20. The following Table shows the
provision for bad and doubtful debts approved by the Commission for the 4th Control
Period.
Table 5-70: Provision for Bad Debts for 4th Control Period approved by the
Commission (Rs. Crore)
Particulars / (Rs. Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Provision for Bad Debts - Wires 3.37 3.37 3.37 3.37 3.37
Provision for Bad Debts - Supply 12.62 12.62 12.62 12.62 12.62
Provision for Bad Debts - Total 15.99 15.99 15.99 15.99 15.99
5.12 CONTRIBUTION TO CONTINGENCY RESERVE
AEML-D's Submission
Regulation 35.1 of the MYT Regulations, 2019 specify that a sum not less than 0.25 per
cent and not more than 0.5 per cent of the original cost of fixed assets shall be allowed as
Contribution to Contingency Reserve. AEML-D has calculated the contribution to
contingency reserve for each year of the Control Period as 0.25% of the opening GFA of
that year for Wires Business and Supply Business separately.
The summary of contribution to contingency reserve for each year of the Control Period is
shown in the Table below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 301 of 445
Table 5-71: Contribution to Contingency Reserve for Wires Business and Supply
Business for 4th Control Period as submitted by AEML-D (Rs. Crore)
Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Contribution to CR - Wires 16.73 19.38 22.05 24.62 27.50
Contribution to CR - Supply 1.68 2.22 2.66 2.72 2.77
Contribution to CR- Total 18.41 21.61 24.71 27.33 30.27
Commission’s Analysis and Ruling
The Commission has computed the Contribution to Contingency Reserves at 0.25 % of the
Opening GFA in accordance with the MYT Regulations, 2019 and based on the
capitalisation approved for FY 2020-21 to FY 2024-25, as shown in the Tables below:
Table 5-72: Contribution to Contingency Reserve approved for Wires Business for
4th Control Period (Rs. Crore) Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
Opening Balance of GFA 6,152.20 6,737.08 7,097.80 7,327.02 7,533.62
% Contribution 0.25% 0.25% 0.25% 0.25% 0.25%
Contribution to Contingency
Reserves 15.38 16.84 17.74 18.32 18.83
Table 5-73: Contribution to Contingency Reserve approved for Retail Supply
Business for 4th Control Period (Rs. Crore) Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
Opening Balance of GFA 522.11 652.60 871.17 1,045.91 1,056.33
% Contribution 0.25% 0.25% 0.25% 0.25% 0.25%
Contribution to Contingency
Reserves 1.31 1.63 2.18 2.61 2.64
5.13 NON-TARIFF INCOME
AEML-D's Submission
Wires Business
Interest on Contingency Reserve Investment: The gains received from Mutual Fund
investments of Contingency Reserve have been estimated as Rs. 1.78 Crore for FY 2019-
20. For each year of the Control Period, AEML-D has worked out the estimated gains
(income) of FY 2019-20 as a percentage of investment and applied the same RoI so arrived
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 302 of 445
at on the projected balance of Contingency Reserve in each year of the Control Period and
segregated the same between Wires business and Supply business in the ratio of cumulative
contribution in each business. Actual gains from Mutual Fund investments of Contingency
Reserve shall be presented at the time of truing up for the respective years.
Land Usage Charges: Land usage charges are paid by AEML-T to AEML-D for usage of
AEML-D land by AEML-T. The existing MoM between AEML-T and AEML-D is valid
till FY 2019-20. In the absence of any MoM for the future period, AEML-D has
provisionally considered the estimated land usage charges for FY 2019-20, as the land
usage charges for each year of the Control Period. AEML-D shall present the actual land
usage charges for each year of Control Period at the time of truing up of respective years.
Other Miscellaneous Receipts of Wire Business: AEML-D has received Rs. 52.44 Crore
of All-in-Hire (AIH) charges from MCGM/MBMC in H1 of FY 2019-20 for maintenance
of streetlights, which has been accounted as other Miscellaneous Receipts of Wires
Business. AEML-D has considered the same amount as estimate in H2 of FY 2019-20.
Sales of Scrap: The income generated from sale of scrap in H1 of FY 2019-20 was Rs.
1.75 Crore. Since there is no certainty of this income in future, AEML-D has not estimated
any income from sale of scrap in each year of the Control Period.
Insurance Claim Received: The insurance claim received in H1 of FY 2019-20 was Rs.
0.09 Crore. Since there is no certainty of this income in future, AEML-D has not estimated
any income from insurance claim in each year of the Control Period.
Liabilities Written Back: There has been no revenue on account of liabilities written back
in H1 of FY 2019-20. AEML-D has estimated the revenue from liabilities written back in
FY 2019-20 at the same level as that of FY 2018-19. For each year of the Control Period,
AEML-D has considered the revenue from liabilities written off at the same level as that of
FY 2018-19.
AEML-D has estimated the other components of Non-Tariff Income for Wires Business for
each year of the Control Period by escalating their estimated values for FY 2019-20 by 5%.
The summary of Non-Tariff Income for Wires Business for each year of the Control Period
is as under:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 303 of 445
Table 5-74: Non-Tariff Income of Wires Business for 4th Control Period as
submitted by AEML-D (Rs. Crore)
Particulars / (Rs. Crore) FY 20-
21
FY 21-
22
FY 22-
23
FY 23-
24
FY 24-
25
Rents of land & building 0.11 0.12 0.13 0.13 0.14
Sale of Scrap 1.75 1.75 1.75 1.75 1.75
Income from CR Investments 1.77 1.99 2.23 2.51 2.82
Other/Miscellaneous receipts 110.12 115.63 121.41 127.48 133.86
Interest on Other Investments 0.50 0.52 0.55 0.57 0.60
Liabilities no longer required
written back 0.51 0.51 0.51 0.51 0.51
Land Usage Charges 5.61 5.61 5.61 5.61 5.61
Total 120.36 126.12 132.18 138.56 145.28
Retail Supply Business
Interest on Contingency Reserve Investment: Gains received from Mutual Fund
investments of Contingency Reserve have been estimated as Rs. 1.78 Crore for the whole
of FY 2019-20. For each year of Control Period, AEML-D has worked out the estimated
gains (income) of FY 2019-20 as a percentage of investment and applied the same RoI so
arrived at on the projected balance of Contingency Reserve in each year of the Control
Period and segregated the same between Wires Business and Supply Business in the ratio
of cumulative contribution in each business.
Recovery from Theft of Electricity: Since there is no certainty of revenue from recovery
of theft, AEML-D has considered the same for each of the Control Period at the same level
as that of FY 18-19.
AEML-D has estimated the other components of Non-Tariff Income for Supply Business
for each year of the Control Period by escalating their estimated values for FY 2019-20 by
5%. The summary of Non-Tariff Income for Supply Business for each year of the Control
Period is as under:
Table 5-75: Non-Tariff Income of Retail Supply Business for 4th Control Period as
submitted by AEML-D (Rs. Crore)
Particulars / (Rs. Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Income from CR Investments 0.22 0.25 0.28 0.31 0.34
Income from consumer charges levied in
accordance with Schedule of Charges
approved by the Commission
6.37 6.69 7.02 7.37 7.74
Income from recovery against theft
and/or pilferage of electricity 16.65 16.65 16.65 16.65 16.65
Other/Miscellaneous receipts 0.95 1.00 1.05 1.10 1.16
Rebate on power purchase 17.17 18.03 18.93 19.88 20.87
Burnt Meter Recovery 0.97 1.01 1.06 1.12 1.17
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 304 of 445
Particulars / (Rs. Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Total 42.32 43.62 44.99 46.42 47.93
Commission’s Analysis and Ruling
The Commission has considered the submissions of AEML-D for 4th Control Period and
has accordingly approved the Non-Tariff Income for Wires and Supply Business, as shown
in the Table below:
Table 5-76: Non-Tariff Income approved for 4th Control Period (Rs. Crore)
Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
NTI- Wires Business 120.36 126.12 132.18 138.56 145.28
NTI- Supply Business 42.32 43.62 44.99 46.42 47.93
However, as stated in the provisional truing up for FY 2019-20, the Commission has
directed AEML-D to transfer the existing Mutual Fund investment towards Contribution to
Contingency Reserve to safer instruments, i.e., Government Securities (G-Sec) within 6
months of the issue of this Order. AEML-D has to also ensure that the Contribution to
Contingency Reserve for future period shall be invested only in the above specified
investments.
5.14 DEMAND SIDE MANAGEMENT EXPENSES
AEML-D's Submission
The expected closing balance of LMC fund at the end of FY 2019-20 is Rs. 1.25 Crore.
AEML-D has projected the expenses on two DSM programs in each year of the Control
Period, as shown in the Table below. Based on the projected expenses, the LMC fund is
likely to be exhausted in FY 2023-24. The balance expenses have been considered to be
met out of ARR of the Supply Business. The Table showing the projected expenses to be
met from LMC Fund and those from ARR in each year of the Control Period as shown
below:
Table 5-77: DSM Expenses submitted by AEML-D for 4th Control Period (Rs.
Crore)
Particulars / (Rs. Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Opening Balance of LMC Fund 1.25 0.96 0.61 0.21 0
Expenses on DSM programs 0.29 0.35 0.41 0.41 0.47
Utilization from LMC Fund 0.29 0.35 0.41 0.21 0
Utilization through ARR 0 0 0 0.20 0.47
Closing Balance of LMC Fund 0.96 0.61 0.21 0 0
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 305 of 445
Commission’s Analysis and Ruling
The Commission has accepted the contentions of AEML-D and accordingly approved the
DSM expenses for FY 2023-24 and FY 2024-25, as shown in the Table below:
Table 5-78: DSM Cost approved for 4th Control Period (Rs. Crore)
Particulars FY
2020-21
FY
2021-22
FY
2022-23
FY
2023-24
FY
2024-25
Total DSM Expenses - - - 0.20 0.47
However, AEML-D shall obtain the necessary approvals before undertaking the DSM
Schemes.
5.15 INCOME FROM OTHER BUSINESS
AEML-D's Submission
Rental Income from RCOM Towers: The Agreement between Reliance Communication
and AEML-D for utilizing rooftops of some of the receiving stations of AEML-D has been
discontinued in FY 2019-20. Hence AEML-D has not considered any revenue towards
rental income from RCOM towers in the Control Period.
Rental Income from Fibre Optics: As stated in the provisional truing up of FY 2019-20,
the agreement between REGSL (AEML-D) and RCOM through which RCOM can use the
optic fibre network of AEML-D for providing the backup path for its network was renewed
in September 2019. AEML-D has considered the per month rental income of Rs. 0.01 Crore
(two third amount) as the income from Other Business for each year of the Control Period.
The summary of Income from Other Business considered for reduction from Wires ARR is
as under:
Table 5-79: Income from Other Business submitted by AEML-D for 4th Control
Period (Rs. Crore)
Particulars / (Rs. Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Rental Income from Optic Fibre 0.13 0.13 0.13 0.13 0.13
Commission’s Analysis and Ruling
The Commission has accepted the contentions of AEML-D and accordingly approved
Income from Other Business for 4th Control Period, as shown in the Table below:
Table 5-80: Income from Other Business approved for 4th Control Period (Rs.
Crore)
Particulars FY
2020-21
FY
2021-22
FY
2022-23
FY
2023-24
FY
2024-25
Rental Income from Optic Fibre 0.13 0.13 0.13 0.13 0.13
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 306 of 445
5.16 PAYMENT OF TPC-G FOR STANDBY
The Commission has approved AEML-D’s share of Standby Charges of past period to be
paid to TPC-G in TPC-G’s MYT Order for FY 2020-21 to FY 2024-25 in Case No. 300 of
2019. The Commission has considered the cost of Rs. 88.28 Crore in the ARR of FY 2020-
21 to be paid to TPC-G.
5.17 GAP/(SURPLUS) OF AEML-G AFTER TRUING-UP OF FY 2017-18 AND
FY 2018-19 AND APR OF FY 2019-20
Commission’s Analysis and Ruling
The Commission in its MYT Order for AEML-G for FY 2020-21 to FY 2024-25 in Case
No. 298 of 2019 has worked out the cumulative Surplus of Rs. 91.96 Crore, which is to be
passed on to AEML-D being its sole beneficiary and to the ultimate consumers. The
Commission therefore considers the adjustment of this surplus in the ARR of AEML-D for
FY 2020-21.
5.18 AGGREGATE REVENUE REQUIREMENT FOR 4TH CONTROL PERIOD
AEML-D's Submission
The summary of the ARR for the Wires Business and Supply Business for the 4th Control
Period is given in the Tables below:
Table 5-81: ARR for Wires Business for 4th Control Period as submitted by AEML-
D (Rs. Crore)
Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
O&M Expenses 646.05 667.85 690.38 713.68 737.76
Depreciation 289.93 336.38 413.60 426.98 438.63
Interest on Long-term Loan Capital 180.98 220.02 252.40 283.41 315.23
Interest on Working Capital 34.12 32.06 35.51 38.18 40.99
Provisioning for Bad & Doubtful Debts 3.37 3.37 3.37 3.37 3.37
Contribution to contingency reserves 16.73 19.38 22.05 24.62 27.50
Total Revenue Expenditure 1,171.17 1,279.06 1,417.31 1,490.23 1,563.48
Return on Equity Capital 422.88 481.63 539.43 599.65 661.61
Aggregate Revenue Requirement 1,594.04 1,760.69 1,956.74 2,089.88 2,225.08
Less: Non-Tariff Income 120.36 126.12 132.18 138.56 145.28
Less: Income from Other Business 0.13 0.13 0.13 0.13 0.13
Net Aggregate Revenue Requirement 1,473.55 1,634.44 1,824.42 1,951.18 2,079.67
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 307 of 445
Table 5-82: ARR for Supply Business for 4th Control Period as submitted by AEML-
D (Rs. Crore) Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Power Purchase Expenses 4,270.08 4,229.85 4,281.60 4,352.94 4,467.94
O&M Expenses 720.67 744.99 770.12 796.11 822.97
Depreciation 36.66 47.57 38.03 39.02 40.16
Interest on Long-term Loan Capital 15.83 24.48 26.84 24.75 22.56
Interest on Working Capital 2.22 0.00 0.00 0.00 0.00
Interest on Consumer Security Deposits 27.35 30.03 32.71 35.40 38.08
Provisioning for Bad & Doubtful Debts 12.62 12.62 12.62 12.62 12.62
Contribution to contingency reserves 1.68 2.22 2.66 2.72 2.77
Intra State Transmission Charges 835.32 507.05 527.21 567.14 607.62
MSLDC Charges 2.00 2.00 2.00 2.00 2.00
DSM Expenses 0.00 0.00 0.00 0.20 0.47
Total Revenue Expenditure 5,924.43 5,600.81 5,693.80 5,832.89 6,017.19
Return on Equity Capital 40.53 53.04 59.29 60.69 62.09
Aggregate Revenue Requirement 5,964.96 5,653.84 5,753.09 5,893.58 6,079.28
Less: Non-Tariff Income 42.32 43.62 44.99 46.42 47.93
Net Aggregate Revenue Requirement 5,922.63 5,610.22 5,708.11 5,847.16 6,031.35
Commission’s Analysis and Ruling
Based on the components of the ARR approved in the above paragraphs, the Commission
has approved the ARR for the Wires and the Supply Business for the 4th Control Period as
shown in the Tables below:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 308 of 445
Table 5-83: Approved ARR for Wires Business for 4th Control Period (Rs. Crore) Particulars AEML-D Petition Approved by the Commission
FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
O&M expenses 646.05 667.85 690.38 713.68 737.76 875.50 904.96 935.41 966.88 999.40
Depreciation 289.93 336.38 413.60 426.98 438.63 282.33 303.04 315.97 325.51 334.56
Interest Expense 180.98 220.02 252.40 283.41 315.23 162.35 168.12 160.23 146.07 130.29
Interest on working capital 34.12 32.06 35.51 38.18 40.99 31.39 32.57 33.54 34.41 35.26
Provision for bad and doubtful
debts 3.37 3.37 3.37 3.37 3.37 3.37 3.37 3.37 3.37 3.37
Contribution to Contingency
Reserves 16.73 19.38 22.05 24.62 27.50 15.38 16.84 17.74 18.32 18.83
Total Revenue Expenditure 1,171.17 1,279.06 1,417.31 1,490.23 1,563.48 1,370.33 1,428.90 1,466.25 1,494.55 1,521.73
Return on Equity 422.88 481.63 539.43 599.65 661.61 398.17 422.23 437.25 448.34 458.85
Aggregate Revenue
Requirement 1,594.04 1,760.69 1,956.74 2,089.88 2,225.08 1,768.50 1,851.13 1,903.50 1,942.88 1,980.57
Less: Non-Tariff Income 120.36 126.12 132.18 138.56 145.28 120.36 126.12 132.18 138.56 145.28
Less: Income from Other
Business 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13
Total Wires ARR 1,473.55 1,634.44 1,824.42 1,951.18 2,079.67 1,648.00 1,724.88 1,771.19 1,804.19 1,835.16
Table 5-84: Approved ARR for Supply Business for 4th Control Period (Rs. Crore) Particulars AEML-D Petition Approved by the Commission
FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Power Purchase expenses 4,270.08 4,229.85 4,281.60 4,352.94 4,467.94 4,234.97 4,192.92 4,306.37 4,430.92 4,565.47
O&M Expenses 720.67 744.99 770.12 796.11 822.97 430.09 444.45 459.28 474.61 490.45
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Particulars AEML-D Petition Approved by the Commission
FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Depreciation 36.66 47.57 38.03 39.02 40.16 29.71 38.53 48.48 53.16 53.69
Interest on Long Term Loans 15.83 24.48 26.84 24.75 22.56 8.23 16.20 24.72 25.99 21.81
Interest on Working Capital 2.22 0.00 0.00 0.00 0.00 5.55 3.50 0.34 - -
Interest on Consumer Security
Deposit 27.35 30.03 32.71 35.40 38.08 27.35 30.03 32.71 35.40 38.08
Bad and Doubtful Debts 12.62 12.62 12.62 12.62 12.62 12.62 12.62 12.62 12.62 12.62
Contribution to Contingency
Reserve 1.68 2.22 2.66 2.72 2.77 1.31 1.63 2.18 2.61 2.64
Intra-State Transmission
Charges 835.32 507.05 527.21 567.14 607.62 476.65 480.59 484.83 488.14 486.30
MSLDC Fees & Charges 2.00 2.00 2.00 2.00 2.00 1.65 1.82 1.97 2.12 2.16
DSM expenses 0.00 0.00 0.00 0.20 0.47 - 0.20 0.47
Payment to TPC-G for
Standby 88.28
True-up Gap/(Surplus) of
AEML-G (91.96)
Total Revenue Expenditure 5,924.43 5,600.81 5,693.80 5,832.89 6,017.19 5,224.44 5,222.28 5,373.49 5,525.77 5,673.69
Add: RoE 40.53 53.04 59.29 60.69 62.09 33.84 43.68 54.76 59.97 60.56
Aggregate Revenue
Requirement 5,964.96 5,653.84 5,753.09 5,893.58 6,079.28 5,258.28 5,265.96 5,428.25 5,585.74 5,734.25
Less: Non-Tariff Income 42.32 43.62 44.99 46.42 47.93 43.62 43.62 44.99 46.42 47.93
Total Annual Revenue
Requirement 5,922.63 5,610.22 5,708.11 5,847.16 6,031.35 5,215.96 5,222.34 5,383.26 5,539.32 5,686.32
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The summary of the approved ARR for the combined Wires Business and Supply Business for each year of the Control Period is shown in the
Table below:
Table 5-85: Approved ARR for Combined Wires Business and Supply Business for 4th Control Period (Rs. Crore) Particulars AEML-D Petition Approved by the Commission
FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Power purchase expenses 4,270.08 4,229.85 4,281.60 4,352.94 4,467.94 4,234.97 4,192.92 4,306.37 4,430.92 4,565.47
O&M Expenses 1,366.72 1,412.83 1,460.51 1,509.79 1,560.73 1,305.60 1,349.41 1,394.69 1,441.49 1,489.86
Depreciation 326.59 383.95 451.63 466.00 478.79 312.04 341.58 364.44 378.67 388.25
Interest on Long Term Loans 196.81 244.50 279.24 308.16 337.79 170.58 184.31 184.95 172.05 152.10
Interest on Working Capital 36.34 32.06 35.51 38.18 40.99 36.94 36.06 33.88 34.41 35.26
Interest on Consumer Security
Deposit 27.35 30.03 32.71 35.40 38.08 27.35 30.03 32.71 35.40 38.08
Bad and Doubtful Debt 15.99 15.99 15.99 15.99 15.99 15.99 15.99 15.99 15.99 15.99
Contribution to Contingency
Reserve 18.41 21.61 24.71 27.33 30.27 16.69 18.47 19.92 20.93 21.47
Intra-State Transmission
Charges 835.32 507.05 527.21 567.14 607.62 476.65 480.59 484.83 488.14 486.30
MSLDC Fees & Charges 2.00 2.00 2.00 2.00 2.00 1.65 1.82 1.97 2.12 2.16
DSM expenses 0.00 0.00 0.00 0.20 0.47 0.20 0.47
Payment to TPC-G for
Standby 88.28
True-up Gap/(Surplus) of
AEML-G (91.96)
Total Revenue Expenditure 7,095.60 6,879.87 7,111.11 7,323.12 7,580.66 6,594.77 6,651.18 6,839.75 7,020.32 7,195.41
Add: RoE 463.40 534.66 598.72 660.34 723.70 432.02 465.91 492.00 508.31 519.41
Aggregate Revenue 7,559.00 7,414.53 7,709.83 7,983.46 8,304.37 7,026.78 7,117.09 7,331.75 7,528.63 7,714.82
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Particulars AEML-D Petition Approved by the Commission
FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Requirement
Less: Non-Tariff Income 162.69 169.74 177.17 184.99 193.21 162.69 169.74 177.17 184.99 193.21
Less: Less: Income from Other
Business 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13
Total Annual Revenue
Requirement 7,396.18 7,244.66 7,532.53 7,798.34 8,111.02 6,863.96 6,947.22 7,154.45 7,343.51 7,521.48
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6 CUMULATIVE REVENUE GAP, TARIFF PHILOSOPHY
AND CATEGORY-WISE TARIFFS FOR 4TH CONTROL
PERIOD FROM FY 2020-21 TO FY 2024-25
6.1 INCREMENTAL REVENUE GAP/SURPLUS FOR FY 2017-18
AEML-D's Submission
AEML-D has considered the Revenue Gap/(Surplus) for FY 2017-18 as calculated in its
Petition. The Commission had determined provisional Revenue Gap for FY 2017-18 at Rs.
195.65 Crore (Rs. 50.41 Crore in Wires Business and Rs. 145.24 Crore in Supply Business)
in AEML-D’s MTR Order dated 12 September, 2018 as shown in the Table below:
Table 6-1: Incremental Revenue Gap/(Surplus) for FY 2017-18
Particulars / (Rs. Crore)
Revenue Gap /
(Surplus) allowed
in MTR Order
Revenue Gap /
(Surplus) after
truing up
Incremental
Gap /
(Surplus)
Wires Business 50.41 63.12 12.71
Supply Business 145.24 121.81 (23.43)
Wires & Supply Business 195.65 184.93 (10.72)
Commission’s Analysis and Ruling
The Commission had determined provisional Revenue Gap for FY 2017-18 at Rs. 195.65
Crore (Rs. 50.41 Crore in Wires Business and Rs. 145.24 Crore in Supply Business) in
AEML-D’s MTR Order dated 12 September, 2018. The Commission has now approved
Revenue Gap of Rs. 36.75 Crore for Wires Business and Rs. 96.98 Crore for Supply
Business, after truing up for FY 2017-18 in this Order. The Commission has thus, approved
Total Revenue Gap of Rs. 133.72 Crore for the Wires and Supply Business in Truing-up
for FY 2017-18. The following Table shows the Incremental Gap/(Surplus) approved by
the Commission after truing up for FY 2017-18:
Table 6-2: Incremental Revenue Gap/(Surplus) approved for FY 2017-18
Particulars / (Rs. Crore)
Revenue Gap /
(Surplus)
allowed in MTR
Order
Revenue
Gap
Approved
after truing
up
Incremental
Gap /
(Surplus)
Wires Business 50.41 36.75 (13.66)
Supply Business 145.24 96.98 (48.25)
Wires & Supply Business 195.65 133.72 (61.89)
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6.2 REVENUE GAP / SURPLUS FOR FY 2018-19
AEML-D's Submission
The Revenue Gap/(Surplus) for FY 2018-19 has been calculated by AEML-D as shown in
the Table below:
Table 6-3: Revenue Gap/(Surplus) for FY 2018-19
Particulars / (Rs. Crore) Wires Business Supply
Business
Wires & Supply
Business
Revenue Gap / (Surplus) 260.86 (213.95) 46.92
Commission’s Analysis and Ruling
The Commission has approved the Revenue Gap of Rs. 139.41 Crore for Wires Business
and Revenue Surplus of Rs. 225.38 Crore for the Supply Business, after truing up for FY
2018-19. The Commission has thus, approved Total Revenue Surplus of Rs. 85.98 Crore
for the Wires Business and Supply business after Truing-up for FY 2018-19, as shown in
the Table below:
Table 6-4: Revenue Gap/(Surplus) Approved for FY 2018-19
Particulars / (Rs. Crore) Wires
Business
Supply
Business
Wires & Supply
Business
Revenue Gap/(Surplus) 138.86 (225.38) (86.52)
6.3 PROVISIONAL REVENUE GAP/ SURPLUS FOR FY 2019-20
AEML-D's Submission
The provisional Revenue Gap/(Surplus) for FY 2019-20 as computed by AEML-D is shown
in the Table below:
Table 6-5: Provisional Revenue Gap/(Surplus) for FY 2019-20
Particulars / (Rs. Crore) Wires
Business
Supply
Business
Wires & Supply
Business
Provisional Revenue Gap / (Surplus) 140.50 (164.46) (23.96)
Commission’s Analysis and Ruling
The Commission has approved Revenue Gap of Rs. 71.76 Crore for the Wires Business and
Revenue Surplus of Rs. 138.74 Crore for the Supply Business, after provisional truing up
for FY 2019-20. The Commission has thus, approved Total Revenue Surplus of Rs. 66.98
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Crore for the Wires Business and Supply Business after provisional truing-up for FY 2019-
20, as shown in the Table below:
Table 6-6: Provisional Revenue Gap/(Surplus) Approved for FY 2019-20
Particulars / (Rs. Crore) Wires
Business
Supply
Business
Wires & Supply
Business
Provisional Revenue Gap / (Surplus) 71.76 (138.74) (66.98)
6.4 CARRYING/(HOLDING) COST TILL FY 2019-20 ON REVENUE
GAP/(SURPLUS) OF FY 2017-18 AND FY 2018-19
AEML-D's Submission
In AEML-D’s MTR Order dated 12 September 2018, the Commission had determined the
provisional Revenue Gap for FY 2017-18 at Rs. 195.66 Crore and the cumulative Revenue
Gap till FY 2017-18 at Rs. 835.51 Crore. The said amount of Rs. 835.51 Crore was allowed
to be recovered in the balance two years of the third Control Period considering 30%
recovery in FY 2018-19 and 70% recovery in FY 2019-20. Thus, the amount of Rs. 195.66
Crore was allowed to be recovered in the balance two years of the third Control Period
considering 30% recovery in FY 2018-19 and 70% recovery in FY 2019-20. The recovery
of 30% of the amount in FY 2018-19 and 70% of the amount in FY 2019-20 has been
appropriately considered while calculating the carrying cost on Gap/(Surplus) of FY 2017-
18 till FY 2019-20.
AEML-D has considered the SBI Base Rate plus 150 basis points from 1 April 2017 to 29
November 2017 and one-year SBI MCLR plus 150 basis points for the remaining period
(30 November 2017 to 31st March 2018), in accordance with the First Amendment to the
MYT Regulations, 2015. This works out to 10.20% for FY 2017-18. For FY 2018-19,
AEML-D has considered the interest rate at 9.89%, which is the weighted average SBI
MCLR for FY 2018-19 plus 150 basis points. For FY 2019-20, AEML-D has considered
the rate at 9.50% (SBI MCLR prevailing at the time of filing of Petition plus 150 basis
Points).
As per the Judgment of Hon’ble the APTEL dated 11 November 2011 in OP 1 of 2011, if
the Regulatory Asset/Gap is recognized in a given year, the carrying cost on the same is
required to be allowed in the said year itself. As the Revenue Gap for a given year is realized
mid-year, the same is required to be financed in the said year itself. Therefore, Revenue
Gap of a given financial year is considered by including the cost of funding such gap in the
said year itself and the total Revenue Gap is carried forward till year of recovery, along
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 315 of 445
with further carrying cost, determined on simple interest basis. AEML-D has calculated the
carrying/(holding) cost on Gap/(Surplus) of FY 2017-18 and FY 2018-19 by including the
carrying/(holding) cost for half year to the gap/(surplus) for that year. The total
carrying/(holding) cost till FY 2019-20 on the Gap/(Surplus) of FY 2017-18 for the Wires
Business, Supply Business, and combined Distribution Business is shown in the Tables
below:
Table 6-7: Carrying/(Holding) cost till FY 2019-20 on Wires Gap /(Surplus) of FY
2017-18
Particulars / (Rs. Crore) FY 2017-18 FY 2018-19 FY 2019-20
Carrying Cost (%) 10.18% 9.89% 9.50%
Opening Balance 0 66.33 51.21
Addition 63.12 0 0
Recovery 0 15.12 35.28
Closing Balance 63.12 51.21 15.93
Carrying cost 3.21 5.81 3.19
Total Carrying Cost 12.21
Table 6-8: Carrying/(Holding) cost till FY 2019-20 on Supply Gap/(Surplus) of FY
2017-18
Particulars / (Rs. Crore) FY 2017-18 FY 2018-19 FY 2019-20
Carrying Cost (%) 10.18% 9.89% 9.50%
Opening Balance 0 128.01 84.44
Addition 121.81 0 0
Recovery* 0 43.57 101.67
Closing Balance 121.81 84.44 (17.23)
Carrying cost 6.20 10.51 3.19
Total Carrying Cost 19.90
Table 6-9: Carrying/(Holding) cost till FY 2019-20 on Wires and Supply
Gap/(Surplus) of FY 2017-18
Particulars / (Rs. Crore) FY 2017-18 FY 2018-19 FY 2019-20
Carrying Cost (%) 10.18% 9.89% 9.50%
Opening Balance 0 194.34 135.65
Addition 184.93 0 0
Recovery 0 58.69 136.95
Closing Balance 184.93 135.65 (1.30)
Carrying cost 9.41 16.32 6.38
Total Carrying Cost 32.11
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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The total carrying/(holding) cost till FY 2019-20 on Gap/(Surplus) of the Wires Business,
Supply Business, and combined Distribution Business for FY 2018-19 is shown in the
Tables below:
Table 6-10: Carrying/(Holding) cost till FY 2019-20 on Wires Gap/(Surplus) of FY
2018-19
Particulars / (Rs. Crore) FY 2018-19 FY 2019-20
Carrying Cost (%) 9.89% 9.50%
Opening Balance 0 273.76
Addition 260.86 0
Recovery 0 0
Closing Balance 260.86 273.76
Carrying cost 12.90 26.01
Total Carrying Cost 38.91
Table 6-11: Carrying/(Holding) cost till FY 2019-20 on Supply Gap/(Surplus) of FY
2018-19
Particulars / (Rs. Crore) FY 2018-19 FY 2019-20
Carrying Cost (%) 9.89% 9.50%
Opening Balance 0 (224.53)
Addition (213.95) 0
Recovery 0 0
Closing Balance (213.95) (224.53)
Carrying cost (10.58) (21.33)
Total Carrying Cost (31.91)
Table 6-12: Carrying/(Holding) cost till FY 2019-20 on Wires and Supply
Gap/(Surplus) of FY 2018-19
Particulars / (Rs. Crore) FY 2018-19 FY 2019-20
Carrying Cost (%) 9.89% 9.50%
Opening Balance 0 49.24
Addition 46.92 0
Recovery 0 0
Closing Balance 46.92 49.24
Carrying cost 2.32 4.68
Total Carrying Cost 7.00
Commission’s Analysis and Ruling
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 317 of 445
The Commission has considered the Revenue Gap/(Surplus) approved after Truing-up of
FY 2017-18 and FY 2018-19 for Wires Business and Supply Business and accordingly
computed the Carrying/(Holding) cost till FY 2020-21, as the amounts shall be
recovered/adjusted from FY 2020-21 onwards.
The Commission has considered the interest rate of 10.18% for FY 2017-18, which is the
weighted average rate of SBI Base Rate plus 150 basis points before the amendment of
MYT Regulations, 2015 and one-year SBI MCLR rate plus 150 basis points, after the
amendment of the MYT Regulations, 2015. For FY 2018-19, FY 2019-20, and the 4th
Control Period the interest rate has been considered equal to the one-year SBI MCLR rate
plus 150 basis points, at 9.89% and 9.50%, respectively.
The Commission had approved certain amount in the Provisional Truing-up of FY 2017-
18 and had passed on the same without any carrying cost in FY 2018-19 and FY 2019-20
in the ratio of 30% and 70%, respectively. The Commission has therefore, considered the
incremental Revenue Gap/(Surplus) for FY 2017-18 and accordingly computed the
carrying/(holding) cost on the same.
However, in case of FY 2018-19, the Commission has considered the entire Revenue
Gap/(Surplus) approved in the Truing-up in this Order. The Revenue Gap/(Surplus) along
with carrying/(holding) cost is computed till FY 2020-21.
In case of FY 2019-20, the Commission has considered only the Standalone Revenue
Gap/(Surplus) worked out in Provisional Truing-up in this Order without considering any
carrying/(holding) cost as per the methodology adopted by the Commission in previous
Tariff Orders. The Commission shall consider the carrying cost for FY 2019-20 based on
the Revenue Gap/(Surplus) approved at the time of final Truing-up of FY 2019-20.
The following Tables shows the Revenue Gap/(Surplus) for FY 2017-18 and FY 2018-19
along with carrying/(holding) cost computed till FY 2020-21:
Table 6-13: Carrying/(Holding) cost till FY 2020-21 on Approved Wires
Gap/(Surplus) of FY 2017-18 (Rs. Crore)
Particulars FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21
Carrying Cost (%) 10.18% 9.89% 9.50% 9.50%
Opening Balance 0 36.75 21.62 (13.66)
Addition 36.75 0.00 0.00 0.00
Recovery 0 15.12 35.28 (13.66)
Closing Balance 36.75 21.62 (13.66) 0.00
Carrying cost 1.87 2.89 0.38 (0.65)
Total Carrying Cost 4.49
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Table 6-14: Carrying/(Holding) cost till FY 2020-21 on Approved Supply
Gap/(Surplus) of FY 2017-18 (Rs. Crore)
Particulars FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21
Carrying Cost (%) 10.18% 9.89% 9.50% 9.50%
Opening Balance 0.00 96.98 53.41 (48.25)
Addition 96.98 0.00 0.00 0.00
Recovery 0.00 43.57 101.66 (48.25)
Closing Balance 96.98 53.41 (48.25) 0.00
Carrying cost 4.94 7.44 0.24 (2.29)
Total Carrying Cost 10.33
Table 6-15: Carrying/(Holding) cost till FY 2020-21 on Approved Wires & Supply
Gap/(Surplus) of FY 2017-18 (Rs. Crore)
Particulars FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21
Carrying Cost (%) 10.18% 9.89% 9.50% 9.50%
Opening Balance 0.00 133.72 75.03 (61.91)
Addition 133.72 0.00 0.00 0.00
Recovery 0.00 58.69 136.95 (61.91)
Closing Balance 133.72 75.03 (61.91) 0.00
Carrying cost 6.81 10.32 0.62 (2.94)
Total Carrying Cost 14.81
The total carrying/(holding) cost on approved Gap/(Surplus) for the Wires Business, Supply
Business, and combined Distribution Business for FY 2018-19, till FY 2020-21 is shown
in the Tables below:
Table 6-16: Carrying/(Holding) cost till FY 2020-21 on Approved Wires
Gap/(Surplus) of FY 2018-19 (Rs. Crore)
Particulars FY 2018-19 FY 2019-20 FY 2020-21
Carrying Cost (%) 9.89% 9.50% 9.50%
Opening Balance 0.00 138.86 138.86
Addition 138.86 0.00 0.00
Recovery 0.00 0.00 138.86
Closing Balance 138.86 138.86 0.00
Carrying cost 6.87 13.19 6.60
Total Carrying Cost 26.65
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Table 6-17: Carrying/(Holding) cost till FY 2020-21 on Approved Supply
Gap/(Surplus) of FY 2018-19 (Rs. Crore)
Particulars FY 2018-19 FY 2019-20 FY 2020-21
Holding Cost (%) 9.89% 9.50% 9.50%
Opening Balance 0.00 (225.38) (225.38)
Addition (225.38) 0.00 0.00
Recovery 0.00 0.00 (225.38)
Closing Balance (225.38) (225.38) 0.00
Carrying cost (11.15) (21.41) (10.71)
Total Holding Cost (43.26)
Table 6-18: Carrying/(Holding) cost till FY 2020-21 on Approved Wires & Supply
Gap/(Surplus) of FY 2018-19 (Rs. Crore)
Particulars FY 2018-19 FY 2019-20 FY 2020-21
Holding Cost (%) 9.89% 9.50% 9.50%
Opening Balance 0 (86.52) (86.52)
Addition (86.52) 0 0
Recovery 0 0 (86.52)
Closing Balance (86.52) (86.52) 0.00
Carrying cost (4.28) (8.22) (4.11)
Total Holding Cost (16.61)
The Commission has included the above amounts in the cumulative Revenue Gap/(Surplus)
of Wires Business and Supply Business till FY 2020-21 along with other relevant costs.
6.5 RECOVERY OF REGULATORY ASSET
AEML-D's Submission
The Commission had determined the Regulatory Asset (RA) principal amount of Rs. 861.45
Crore as on 1 April 2018 in the MTR Order dated 12 September 2018 in Case No. 200 of
2017. AEML-D subsequently filed Petition for Review of the MTR Order (Case No. 317
of 2018), wherein AEML-D, inter-alia, submitted that there was an error in calculation of
carrying cost while approving the RA recovery in FY 2018-19. In Order dated 24 December
2018 in Case No. 317 of 2018, the Commission acknowledged the error in calculation of
carrying cost and allowed additional carrying cost of Rs. 20.35 Crore in FY 2018-19. As
against the RA recovery allowed in FY 2018-19 and FY 2019-20, the actual RA recovery
in FY 2018-19 and estimated RA recovery in FY 2019-20 (based on estimated sales for FY
2019-20) are shown in the Table below:
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Table 6-19: RA Recovery Allowed Vs Actual / estimated RA Recovery
Particulars / (Rs. Crore) FY 2018-19 FY 2019-20
RA Recovery allowed 471.43 451.08
Actual / Estimated RA Recovery 580.98 411.13
The actual RA recovery in FY 2018-19 was more than the allowed recovery as the
Regulatory Asset Charges (RAC) for first five months of FY 2018-19 (approved in the
MYT Order dated 21 October 2016 in Case No. 34 of 2016) were higher, even though the
actual network sales in FY 2018-19 was lower than the network sales approved for FY
2018-19 in the MTR Order dated 12 September 2018. The Commission had considered the
recovery of RA principal out of the actual RA recovery by segregating the actual RA
recovery in the ratio of RA principal and RA carrying cost allowed for recovery at the time
of its approval. The Commission had considered this philosophy at the time of issuance of
MYT Order dated 21 October 2016. AEML-D has raised this issue in its Appeal against the
MYT Order (Appeal No. 12 of 2017). Pending the decision of Hon’ble ATE on this issue,
AEML-D had presented the RA principal recovery and RA carrying cost recovery in FY
2016-17 and FY 2017-18 as per the Commission’s philosophy. AEML-D has presented the
RA principal recovery and RA carrying cost recovery in FY 2018-19 and FY 2019-20 also
using the Commission’s philosophy. AEML-D shall claim the consequential impact on RA
recovery in future, based on the decision of Hon’ble ATE in Appeal No. 12 of 2017.
The RA principal and RA carrying cost recovery allowed by the Commission in the MTR
Order dated 12 September 2018 is shown in the Table below:
Table 6-20: RA Principal and RA Carrying Cost
Particulars / (Rs. Crore) FY 2018-19 FY 2019-20
As per MTR Order
RA Recovery allowed 471.43 451.08
Principal Recovery 430.73 430.73
Carrying cost Recovery 40.70 20.35
Actual/ Estimated
Actual / Estimated RA Recovery 580.98 411.13
Principal Recovery 530.82 392.58
Carrying cost recovery 50.16 18.55
As the estimated RA recovery in FY 2019-20 is lower than the allowed RA recovery in FY
2019-20, the estimated RA principal recovery in FY 2019-20 is less than the RA principal
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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recovery allowed for FY 2019-20 in the MTR Order. The under/(over) recovery of RA
principal together with holding/(carrying) cost till FY 2019-20 is shown in the Table below:
Table 6-21: Under/(Over) recovery in RA principal along with carrying/(holding)
cost till FY 2019-20
Particulars / (Rs. Crore) FY 2018-19 FY 2019-20
Interest Rate 9.89% 9.50%
Opening Balance 0 (100.09)
(Over) / Under Recovery in Principal (100.09) 38.15
Closing Balance (100.09) (61.94)
(Holding) / Carrying cost (4.95) (7.70)
Total with holding cost (74.59)
AEML-D has included the above amount in the cumulative Revenue Gap/(Surplus) of the
Wires Business till FY 2019-20, since this amount pertains to over recovery of RA, which
was being recovered from network consumers only.
Commission’s Analysis and Ruling
The Commission has considered the recovery of RA Principal amount with carrying cost
as submitted by AEML-D for FY 2018-19, based on the actual recovery. For FY 2019-20,
the Commission has worked out the RA recovery based on the estimated Own and
Changeover sales for FY 2019-20 and the RAC charge per unit applied approved for FY
2019-20 in the MTR Order dated 12 September 2019.
The following Tables show the RA recovery approved by the Commission for FY 2018-19
and FY 2019-20 and accordingly worked out the RA under/(over) recovery and
corresponding carrying/(holding) cost on RA recovery till FY 2020-21, as these amounts
shall be recovered/adjusted in FY 2020-21.
Table 6-22: RA Principal and RA Carrying Cost Recovery approved by the
Commission
Particulars / (Rs. Crore) FY 2018-19 FY 2019-20
As per MTR order
RA Recovery allowed 471.43 451.08
Principal Recovery 430.73 430.73
Carrying cost Recovery 40.70 20.35
Actual/ Estimated
Actual / Estimated RA Recovery 580.98 409.36
Principal Recovery 530.82 390.89
Carrying cost recovery 50.16 18.47
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Table 6-23: Under/(Over) recovery in RA principal along with carrying/(holding)
cost approved till FY 20202-21 (Rs. Crore)
Particulars FY 2018-19 FY 2019-20 FY 2020-21
Interest Rate 9.89% 9.50% 9.50%
Opening Balance 0.00 (100.09) (60.25)
Under/(Over) Recovery in Principal (100.09) 39.84 0.00
Recovery (60.25)
Closing Balance (100.09) (60.25) 0.00
Carrying/(Holding) cost (4.95) (7.62) (2.86)
Total with holding cost (75.68)
In the MTR Order, the Commission had stated that any balance arising out of over-
recovery/under-recovery of Regulatory Asset may be adjusted through the Revenue
Gap/(Surplus) of Supply Business. However, both AEML-D and TPC-D and AEML-D
requested that the Gap/(Surplus) against RA recovery should be adjusted against the Wires
ARR.
The Commission needs to take the same approach to adjust the Gap/(Surplus) appropriately
for TPC-D and AEML-D, being parallel licensees operating in the same area of supply. The
Commission notes that the Regulatory Assets were created to recover the gap of Supply
Business, however, in actual it is recovered only from the consumers of the Wires Business.
A similar approach exists in case of recovery of CSS, which is recovered from the
consumers of the Wires Business against the cross-subsidy requirement of the Supply
Business but the revenue from CSS is considered against the Supply Business. Hence, by
applying same rationale, the Gap/(Surplus) against RAC should also be adjusted against the
ARR of the Supply Business.
However, given that the Wheeling Charges are quite high and both competing Distribution
Licensees have desired that the Gap/(Surplus) against RAC should be adjusted against the
ARR of the Wires Business, the Commission decides to adjust the Gap/(Surplus) from RAC
recovery against the ARR of the Wires Business.
Therefore, the Commission has adjusted the estimated over recovery of Rs. 75.68 Crore
against the Wires Business, rather than the Supply Business.
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6.6 RECOVERY OF AMOUNTS PERTAINING TO RINFRA
6.6.1 Impact of Supreme Court Judgment regarding Additional Energy Charges
(AEC)
AEML-D's Submission
RInfra-D (erstwhile Licensee) had filed an Appeal in the Hon’ble Supreme Court (Appeal
No. 4161 of 2009) in the matter of Additional Energy Charges payable to TPC-D (total
claim of Rs 34.98 Crore), against the Hon’ble APTEL’s Judgment dated 12.05.2008 in
Appeal No. 3 of 2008, wherein the Hon’ble APTEL had directed RInfra to pay Rs. 0.32 per
unit Additional Energy Charges (the difference between unit rate of Rs. 2.09 demanded by
TPC and Rs. 1.77 per unit paid by RInfra), in respect of the payment of energy drawn at
220 kVA interconnection.
During the proceedings of the case, the Hon'ble Supreme Court, vide Daily Order dated
14.12.2009 in the said Appeal No. 4161 of 2009 had directed RInfra-D to deposit Rs. 25
Crore with Secretary General of the Supreme Court, which can be withdrawn by TPC
subjected to their giving undertaking to the Court that in the event any of these Appeals are
decided against them, the amount may be refunded to RInfra without demur together with
interest as may be determined by the Court. The Hon’ble Supreme Court also directed
RInfra to submit a Bank Guarantee for the remaining principal amount of Rs. 9.98 Crore to
TPC.
Pursuant to the direction of Hon’ble Supreme Court, RInfra-D had made payment of Rs. 25
Crore on 31.01.2010. RInfra-D, in its Petition in Case No. 72 of 2010 for True up of FY
2008-09, Annual Performance Review for FY 2009-10 and Tariff determination for FY
2010-11, had apprised the Commission that it has deposited a sum of Rs. 25 Crore with the
Hon’ble Supreme Court following the directions of the Hon’ble Court in Civil Appeal No.
4161 of 2009 and RInfra-D had included this amount in the ARR of FY 2009-10 in the said
Petition in Case No. 72 of 2010. However, the Commission did not consider this amount in
ARR stating that the matter is pending before the Hon’ble Supreme Court and based on
final outcome the same will be considered for recovery.
In Case No. 126 of 2011, RInfra-D had not included this amount of Rs. 25 Crore in the
ARR of FY 2009-10 for final truing up purposes as per the directions of the Commission
issued in the Order in Case No. 72 of 2010. The Hon’ble Supreme Court has now
pronounced its Judgment in the pending matter. As per the said Judgment, TPC raised a
demand of Rs. 41.92 Crore in September 2019, after adjusting for Rs. 25 Crore already
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deposited by RInfra. As stated in the provisional true-up of FY 2019-20, the said Rs. 41.92
Crore has been paid by AEML-D to TPC-D and included in the estimated power purchase
cost of FY 2019-20. Therefore, now the amount of Rs. 25 Crore deposited by RInfra, which
was earlier not allowed to be recovered from ARR, shall have to be passed on for recovery
in tariff, along with applicable carrying cost @ 9% in accordance with the said Judgment.
Accordingly, AEML-D has considered the total amount of Rs. 47.88 Crore (Rs. 25 Crore
Principal + Rs. 22.88 Crore carrying cost up to the close of FY 2019-20) to the cumulative
Revenue Gap/(Surplus) till FY 2019-20.
Commission’s Analysis and Ruling
The Commission is of the view that the amounts towards Additional Energy Charges are to
be paid by AEML-D (erstwhile RInfra-D) to TPC-D as per the Judgment of the Hon’ble
Supreme Court. The Commission therefore allows the amount of Rs. 47.88 Crore to be paid
by RInfra-D to TPC-D in the Cumulative Gap/(Surplus) till FY 2019-20, as this amount
was not allowed for recovery in the previous Tariff Orders.
6.6.2 Recovery of understated carrying cost on the Regulatory Asset recovery in FY
2018-19 due to error in calculation of carrying cost for FY 2018-19
AEML-D's Submission
In the MTR Order dated 12 September 2018, there was an error in calculation of carrying
cost for FY 2018-19. The recovery of Regulatory Asset for FY 2018-19 with correct
carrying cost should have been Rs. 491.78 Crore instead of Rs. 471.43 Crore. AEML-D has
now proposed the under recovery of the carrying cost, as shown in the Table below:
Table 6-24: Under Recovery of RA Carrying Cost
Particulars / (Rs. Crore) FY 2018-19 FY 2019-20
Interest Rate 9.89% 9.50%
Opening Balance 0.00 20.35
Addition 20.35 0.00
Closing Balance 20.35 20.35
Carrying cost 1.01 1.93
Total with holding cost 23.29
Commission’s Analysis and Ruling
The Commission has considered the recovery of understated carrying cost on the RA
recovery in FY 2018-19. The Commission approves the amount of Rs. 24.26 Crore,
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considering the principal amount and carrying cost till FY 2020-21, in the Cumulative
Revenue Gap/(Surplus) as shown in the Table below:
Table 6-25: Under Recovery of RA Carrying Cost approved by the Commission (Rs.
Crore)
Particulars FY 2018-19 FY 2019-20 FY 2020-21
Interest Rate 9.89% 9.50% 9.50%
Opening Balance 0.00 20.35 20.35
Addition 20.35 0.00 0.00
Recovery 20.35
Closing Balance 20.35 20.35 0.00
Carrying cost 1.01 1.93 0.97
Total with holding cost 24.26
6.6.3 Recovery of way leave charges payable to Western Railways
Western Railways, citing reference of the master Circular issued vide Railway Board’s
letter No. 97/LML/24/3 dated 27.11.2001, had demanded Rs. 35.94 crore vide letter dated
13.11.2009 being Way leave charges for 27 cables for 2 blocks of 10 years. RInfra-D had
paid Rs. 5.57 Crore (for 23 cables) against total way leave charges on 28.09.2012 reducing
the liability to Rs. 30.37 Crore. However, in view of repeated demands from Western
Railway, RInfra-D, under protest, by its letter dated 28.09.2012 made a payment of Rs. 5.57
Crores in respect of cables which were live and in-service. This action of Western Railways
is contested by RInfra-D in correspondence and it is sought to be contended that Way Leave
Charges in respect of these 4 cables is not at all applicable. However, joint inspections were
undertaken in December 2012 and June 2013 pursuant to which Western Railway decided
to waive off the demand for the remainder duration in respect of two cables. Resultantly,
the revised final demand stands at Rs. 22.60 Crore for four cables. RInfra-D has challenged
the enhanced levy of Way Leave Charges and the discrimination made between Private
Utility and Public Utility in levy of Way Leave Charges. In order to get permission for
HDD crossing near Ram Mandir Road Station on an immediate basis from Western
Railway, AEML-D (the present Licensee) pursuant to its request, was required to pay Way
Leave charges of Rs. 2.00 Crore on 25.01.2019, towards part payment of the disputed
demand of Way Leave Charges in respect of the 4 disputed cables. Hence, Rs. 2.36 Crore
with GST has been claimed as an uncontrollable expense.
To avoid delay in execution of cable related work, Way leave charges needs to be paid to
Western Railways. Hence AEML-D requested to allow recovery of Rs. 22.60 Crore Way
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Leave charges. The said amount has been included in the amount of Revenue Gap till FY
2019-20.
Commission’s Analysis and Ruling
The Commission has already allowed the actual amount paid in this regard separately in
O&M expenses of FY 2019-20. However, the balance amount is yet to be paid and is in
dispute. The Commission is of the view that such amount can be allowed to be passed
through only after payment. The Commission has therefore, not accepted the submission of
AEML-D and has not included the Way leave charges of Rs. 22.60 Crore in cumulative
Revenue Gap/(Surplus) till FY 2019-20. As and when this amount become actually payable
and is actually paid by AEML-D, the same may be claimed at the time of true-up for the
respective years, along with the necessary documentary proof of payment.
6.6.4 Recovery of Service Tax and associated cost paid on cheque bounce charges
AEML-D's Submission
The office of Commissioner of Central GST Audit quantified/observed that the Service Tax
amounting to Rs.1.45 Crore on amount received towards Bounced Cheque Charges is
payable stating that amount collected falls under the declared service in terms of Section
66 E(e) of Finance Act, 1994. RInfra had contested this demand vide written reply dated
14.02.2019 that these charges are collected for delayed payment of consumer’s electricity
bill on account of dishonouring of the cheques as mandated by the Commission. However,
RInfra’s contention was not accepted and the demand was imposed. Service Tax being an
uncontrollable item, the recovery of the same for the past period is proposed separately.
Therefore, this amount along with carrying cost has been included as part of cumulative
Revenue Gap/(Surplus) till FY 2019-20.
AEML-D added that in addition to the Service Tax on cheque bounce charges mentioned
above, Service Tax has also been demanded on the Delayed Payment Charges, penalty for
actual demand exceeding the contract demand and street light maintenance charges. At
present no payment has been made against these demands and as on when any payment due
is finalized, AEML-D will approach the Commission for recovery of the same through
tariff.
Commission’s Analysis and Ruling
The Commission has accepted AEML-D’s submission as regards to Service Tax on Cheque
Bounce Charges and has included the recovery of Rs. 1.52 Crore in the Cumulative
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Revenue Gap/(Surplus).
As regards AEML-D’s submissions regarding additional Service Tax demand on the
delayed payment charges, penalty for actual demand exceeding the contract demand and
street light maintenance charges, the same shall be considered at the appropriate time based
on actual payment and prudence check. It is also clarified that as Delayed Payment Charges
are not considered as income by the Commission, any Service Tax/GST on such income
shall not be passed through to the consumers.
6.7 PROVISIONAL RECOVERY OF NEAR CERTAIN FUTURE COST
AEML-D's Submission
AEML-D submitted that there are certain other costs, which have already accrued and for
which payments shall be made in the next year itself. AEML-D has not considered these
costs in the stand-alone ARR for FY 2020-21 or in any other year during the Control Period
but it is necessary to recognise and provide for these costs in tariffs now, so as to avoid a
significant tariff decline now, only to result in a tariff shock almost immediately after the
commencement of the Control Period, in the form of high FAC.
6.7.1 FBSM Pool Cost for FY 2018-19 and FY 2019-20
AEML-D has not considered any cost towards energy decrement from Imbalance Pool in
FY 2018-19 and FY 2019-20, since MSLDC has issued the provisional FBSM bills till
February 2018 only. The impact of this cost of energy decrement in FY 2018-19 and FY
2019-20 will be realized in future, which will then have to be recovered from consumers
and passed on to MSLDC. AEML-D proposes to set off the cumulative surplus in the
Supply Business against the provisional cost of the FBSM Pool decrement in FY 2018-19
and FY 2019-20.
For estimating the provisional cost of the FBSM Pool decrement in FY 2018-19, AEML-D
has considered the derived FBSM Pool quantum for FY 2018-19 and the variable rate of
ADTPS for FY 2018-19. Similarly, for FY 2019-20, AEML-D has considered the derived
FBSM Pool quantum for H1 of FY 2019-20 and the variable rate of ADTPS for H1 of FY
2019-20. No provision towards FBSM Pool cost for H2 of FY 2019-20 has been made at
present, since AEML-D has not forecast any separate Pool decrement in H2 of FY 2019-20
and the same is subsumed in the short-term power purchase estimated for H2 of FY 2019-
20. The estimated provisional FBSM pool cost for FY 2018-19 and FY 2019-20 are shown
in the Table below:
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Table 6-26: Provisional FBSM Pool cost for FY 2018-19 and FY 2019-20
Particulars Quantum
(MU)
Rate
(Rs./kWh)
Cost (Rs.
Crore)
Cost of FBSM Pool for FY 2018-19 733.26 3.88 284.31
Cost of FBSM Pool for FY 2019-20 500.17 3.73 186.66
Total 1,233.42 470.97
AEML-D submitted that the above amounts have not been included in the Truing up of FY
2018-19 and FY 2019-20, as these costs are provisional and including these amounts in the
respective power purchase cost for FY 2018-19 and FY 2019-20 would have increased the
Revenue Gap/decreased the Revenue Surplus of corresponding years. This would have
attracted carrying cost till FY 2019-20.
6.7.2 Fixed cost Reconciliation
MSLDC is in the process of finalising the Fixed Cost Reconciliation (FCR) bills and the
same could be raised at any time in the next few months. As per the provisional bill raised
earlier (dated 25 January 2019) AEML-D’s share in FCR was Rs. 124.60 Crore out of which
provisionally 20% payment was made in FY 2018-19 and the same is included in this
Petition for true-up of FY 2018-19. AEML-D proposes to set off the cumulative Surplus in
its Supply Business as at the start of the Control Period, with the provisional amount
towards FCR and for this AEML-D has considered the differential FCR of Rs. 99.68 Crore
as per the earlier provisional bill raised (i.e., the total amount as per provisional bill, less
the 20% payment already made).
Commission’s Analysis and Ruling
AEML-D has submitted that the ARR of FY 2018-19 and FY 2019-20 is suppressed in the
absence of FBSM Pool cost in both the years. The Commission finds merit in AEML-D’s
submission that passing on this surplus to consumers in the tariffs for 4th Control Period
shall decrease the retail tariff initially, but the same cost will then get included in the FAC,
when the revised energy bills are raised by MSLDC.
The Commission has estimated the likely impact of above aspect on AEML-D for FY 2018-
19 and FY 2019-20, as under. The Commission has applied the FBSM rate of Rs. 2.86/kWh
based on latest data on the pool imbalance purchase of 733.26 MU for FY 2018-19 to
estimate the likely FBSM claim, which works out to Rs. 209.71 Crore. Similar, FBSM
impact of Rs. 209.71 Crore is considered for FY 2019-20 also. Overall, the Commission
considers FBSM payment of Rs. 419.42 Crore for FY 2020-21.
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Approval of likely impact of FBSM payment by the Commission is over and above the
power purchase cost approved by the Commission, to provide buffer to the Distribution
Licensee in case payments are required to be made for the past period. This will not be
considered as part of power purchase cost for calculation of FAC. AEML-D should make
payment of FBSM bills through this Fund and should not load such bill amount in FAC
computation. In case actual bill amount of FBSM is more than the above Fund, such
incremental amount may be considered for FAC computation. As this Fund is being
provided over and above the approved power purchase cost, the Holding cost on such Fund
shall be computed at the time of true-up, based on complete data and calculations to be
submitted by AEML-D.
As regards AEML-D’s claim for pass through of balance 80% of the Fixed Cost
Reconciliation amount, the Commission is of the view that this amount is yet to be
crystallised by SLDC. Such amounts shall be payables as and when SLDC raises the final
bills on the Distribution Licensees, after adjusting for the payments (20%) already made.
Such payments by the Distribution Licensee against FCR reconciliation may be recovered
through FAC at the appropriate time.
6.8 CUMULATIVE REVENUE GAP / SURPLUS TILL FY 2019-20
AEML-D's Submission
The past Gap/(Surplus) proposed by AEML-D is shown in the Table below:
Table 6-27: Recovery of Cumulative Revenue Gap / Surplus till FY 2020-21 (Rs.
Crore)
Particulars Wires
Business
Supply
Business Total
Incremental Revenue Gap of FY 2017-18 13.32 (24.54) (11.22)
Revenue Gap of FY 2018-19 273.26 (224.11) 49.14
Provisional Revenue Gap of FY 2019-20 147.18 (172.28) (25.10)
Carrying cost on Revenue Gap of FY
2017-18 12.79 20.84 33.64
Carrying cost on Revenue Gap of FY
2018-19 40.76 (33.43) 7.33
Over recovery in RA with holding cost (78.13) 0 (78.13)
Cost of FBSM Pool for FY 2018-19 &
FY 2019-20 0 493.34 493.34
Impact of FBSM FCR till FY 2017-18 0 104.42 104.42
Impact of AEC (SC Judgment) 0 50.15 50.15
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Particulars Wires
Business
Supply
Business Total
Impact of RA Carrying cost allowed in
Case No. 347 of 2018 24.40 0 24.40
Way Leave Charges payable to Western
Railways 23.67 0 23.67
Service Tax paid on Cheque Bounce
Charges 0 1.59 1.59
Total 457.24 215.99 673.22
Commission’s Analysis and Ruling
The Commission approves the cumulative Revenue Gap/(Surplus) of Wires Business,
Supply Business and combined Distribution Business till FY 2020-21, based on the
amounts approved in earlier paragraphs, as shown in the Tables below:
Table 6-28: Approved Cumulative Revenue Gap/(Surplus) of Wires Business till FY
2020-21 (Rs. Crore)
Particulars AEML-D
Petition
Approved by the
Commission
Incremental Revenue Gap of FY 2017-18 13.32 (13.66)
Revenue Gap of FY 2018-19 273.26 138.86
Provisional Revenue Gap of FY 2019-20 147.18 71.76
Carrying cost on Revenue Gap of FY 2017-18 12.79 4.49
Carrying cost on Revenue Gap of FY 2018-19 40.76 26.65
Over recovery in RA with holding cost (78.13) (75.68)
Impact of RA Carrying cost allowed in Case No.
347 of 2018 24.40 24.26
Way Leave Charges payable to Western Railways 23.67 0.00
Total 457.24 176.68
Table 6-29: Approved Cumulative Revenue Gap/(Surplus) of Supply Business till FY
2020-21 (Rs. Crore)
Particulars AEML-D
Petition
Approved by the
Commission
Incremental Revenue Gap of FY 2017-18 (24.54) (48.25)
Revenue Gap of FY 2018-19 (224.11) (225.38)
Provisional Revenue Gap of FY 2019-20 (172.28) (138.74)
Carrying cost on Revenue Gap of FY 2017-18 20.84 10.33
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Particulars AEML-D
Petition
Approved by the
Commission
Carrying cost on Revenue Gap of FY 2018-19 (33.43) (43.26)
Cost of FBSM Pool for FY 2018-19 & FY 2019-20 493.34 419.42
Impact of FBSM FCR till FY 2017-18 104.42 0.00
Impact of AEC (SC Judgment) 50.15 50.15
Service Tax paid on Cheque Bounce Charges 1.59 1.59
Total 215.99 25.85
Table 6-30: Approved Cumulative Revenue Gap/(Surplus) of combined Distribution
Business till FY 2020-21 (Rs. Crore)
Particulars AEML-D
Petition
Approved by the
Commission
Incremental Revenue Gap of FY 2017-18 (11.22) (61.91)
Revenue Gap of FY 2018-19 49.14 (86.52)
Provisional Revenue Gap of FY 2019-20 (25.10) (66.98)
Carrying cost on Revenue Gap of FY 2017-18 33.64 14.81
Carrying cost on Revenue Gap of FY 2018-19 7.33 (16.61)
Over recovery in RA with holding cost (78.13) (75.68)
Cost of FBSM Pool for FY 2018-19 & FY 2019-20 493.34 419.42
Impact of FBSM FCR till FY 2017-18 104.42 0.00
Impact of AEC (SC Judgment) 50.15 50.15
Impact of RA Carrying cost allowed in Case No.
347 of 2018 24.40 24.26
Way Leave Charges payable to Western Railways 23.67 0.00
Service Tax paid on Cheque Bounce Charges 1.59 1.59
Total 673.22 202.53
6.9 APPROACH FOR RECOVERY OF PAST GAP / (SURPLUS)
AEML-D has proposed to recover the entire Revenue Gap/Surplus till FY 2019-20 in FY
2020-21 itself (with half year carrying cost), as deferring the past gap recovery in future
years would mean that consumers will be burdened with corresponding carrying cost as
well. Further, AEML-D has considered the Gap/(Surplus) of the Wires Business against the
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Wires ARR for the Control Period, rather than combining the same with the Gap/(Surplus)
of the Supply Business for the Control Period.
AEML-D has proposed tariffs based on the tariff hike /(decrease) in each year of the Control
Period as shown in the Table below:
Table 6-31: Proposed Tariff Increase/(Decrease) in each year of Control Period
Particulars / (Rs. Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Wires and Supply ARR 7,396.47 7,244.66 7,532.53 7,798.34 8,111.02
Past Gap Recovery 673.22 0 0 0 0
Total to be recovered 8,069.69 7,244.66 7,532.53 7,798.34 8,111.02
Revenue at revised Wheeling
Charge & CSS from changeover
consumers
503.11 433.17 467.24 494.65 519.09
Net ARR to be recovered from
own consumers 7,566.58 6,811.49 7,065.29 7,303.70 7,591.94
Revenue at existing tariff from
own consumers 8,120.28 7,713.83 6,942.27 7,202.09 7,446.43
Short fall / (Excess) at existing
Tariff (553.70) (902.34) 123.02 101.61 145.51
Tariff Hike / (Decrease)
required -6.82% -11.70% 1.77% 1.41% 1.95%
AEML-D submitted that despite including accrued costs related to FBSM and FCR, there
is a reduction in tariff proposed for FY 2020-21 as compared to the existing tariff of FY
2019-20. This is primarily because of absence of RAC in FY 2020-21. There is no past gap
recovery from FY 2021-22 onwards. Hence, there is further drop in tariffs in FY 2021-22
with respect to the proposed tariff for FY 2020-21. After FY 2021-22, there is marginal
increase in tariff every year till FY 2024-25.
Commission’s Analysis and Ruling
So far, though the ARR of the Wires Business and Supply Business have been determined
separately, the Commission has been combining the Gap/(Surplus) of the Wires Business
and Supply Business and recovering the same through the combined ACoS and Supply
tariffs. However, the normal consumer who is taking Wires and Supply from the same
Distribution Licensee would be paying Wheeling Charges and Energy Charges of the same
Licensee, and would hence, be neutral to recovery of such past Gap/(Surplus) from Wires
Business or Supply Business. However, for consumers who are only availing Wheeling
facility, if Gap/(Surplus) is recovered from the Supply Business, then it would lead to
subsiding of such Wheeling consumer by the Supply consumer. Hence, from this MYT
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Order, the Commission has commenced recovery of the Gap/(Surplus) of the Wires
Business through the Wires ARR, rather than combining it with the combined ARR of
Wires Business and Supply Business.
The Commission has computed the total ARR for recovery through tariff including past
revenue gaps vis-à-vis existing tariff. For computation of revenue at existing tariff, the
Commission has considered the tariff for FY 2019-20 as approved in the MTR Order, plus
the prevalent category-wise FAC and RAC.
Further, the Commission has ensured recovery of the Revenue Gap/(Surplus) of the Wires
Business and Supply Business in the first year of the Control Period, viz., FY 2020-21, for
both AEML-D and TPC-D, considering the quantum of Gap/(Surplus) and to minimise the
incidence of Carrying Cost and in order to ensure similarity in approach between the two
competing Distribution Licensees..
The Commission has approved the Tariff in the manner such that the revenue requirements
for the respective years are adequately met, and also tariff is almost flat during the Control
Period. Further, there would be Mid-Term Review undertaken in FY 2022-23, wherein the
revised ARR and Tariffs for FY 2023-24 and FY 2024-25 would be determined. At that
time, these amounts would have been crystallised and the impact, whether positive or
negative, can be passed through the revised ARR and Tariffs.
Accordingly, the Commission has computed the Revenue Gap at existing tariff including
prevalent RAC and prevalent FAC for the month of March 2020 for the Wires Business and
Supply Business, as shown in the following Tables:
Table 6-32: Average Cost of Supply for Wires Business approved by the Commission
Particulars Legend
Wires Business
FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Standalone ARR - Rs Crore 1 1648.00 1724.88 1771.19 1804.19 1835.16
Past Recovery including
carrying cost - Rs Crore 2 176.68 - - - -
Less: Revenue from Revised
Wheeling Charges from OA
& Change-over consumers
3 252.91 234.49 236.38 236.54 236.52
Total ARR Requirement -
Rs Crore 4=1+2-3 1,571.78 1,490.39 1,534.81 1,567.64 1,598.64
Total Sale - MU 5 10568.90 10779.92 10996.16 11217.49 11443.75
Average Cost - Rs/kWh 6=4/5
*10 1.49 1.38 1.40 1.40 1.40
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Table 6-33: Average Cost of Supply for Supply Business approved by the
Commission
Particulars Legend
Supply Business
FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Standalone ARR - Rs Crore 1 5215.96 5222.34 5383.26 5539.32 5686.32
Past Recovery including
carrying cost - Rs Crore
2 25.85 - - - -
Less: Revenue from Revised
CSS from OA & Change-
over consumers
3
68.04 89.20 88.30 77.51 74.39
Total ARR Requirement -
Rs Crore
4=1+2-3 5,173.77 5,133.14 5,294.96 5,461.81 5,611.93
Total Sale - MU 5 8834.29 9048.92 9266.90 9488.60 9714.15
Average Cost - Rs/kWh 6=4/5
*10 5.86 5.67 5.71 5.76 5.78
Table 6-34: Combined Average Cost of Supply approved by the Commission
Particulars Legebd
Total ARR for Distribution Business
FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
Standalone ARR - Rs Crore 1 6863.96 6947.22 7154.45 7343.51 7521.48
Past Recovery including
carrying cost - Rs Crore 2 202.53 - - - -
Less: Expected Revenue from
OA 3 320.94 323.69 324.67 314.06 310.91
Total ARR Requirement - Rs
Crore 4=1+2-3 6,745.55 6,623.53 6,829.78 7,029.45 7,210.57
Revenue from existing tariff 8042.93 8235.83 8412.57 8592.39 8775.46
Revenue Gap at existing tariff (1297.38) (1612.30) (1582.79) (1562.94) (1564.89)
Tariff Increase/(Reduction) % -16% -4.1% 0.7% 0.5% 0.2%
Total Sale - MU 5 8834.29 9048.92 9266.90 9488.60 9714.15
Average Cost - Rs/kWh 6=4/5*10 7.64 7.32 7.37 7.41 7.42
Note: The average tariff increase from second year of the Control Period onwards has been
computed assuming that the tariff revision of the first year is in place, whereas the Revenue
Gap/(Surplus) has been computed considering the existing tariff as on date
As can be seen from the above Table 6-34, the average tariff reduction is 16% in FY 2020-
21, with further reduction possible in FY 2021-22 and future years. The Commission has
recast the Revenue Requirement in such a manner that the steeper tariff reduction takes
place in FY 2020-21, and the tariffs remain almost flat thereafter over the Control Period.
This will impart tariff stability to the consumers and the Distribution Licensees. The
corresponding carrying/(holding) cost has also been considered. The revised Revenue
Requirement for each year of the Control Period and revised ACoS are shown in the Tables
below, along with the computation of Carrying/(Holding) Cost:
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Table 6-35: Combined Average Cost of Supply approved by the Commission Particulars
Total ARR for Distribution Business
FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
Total ARR
Requirement - Rs Crore 1 6,745.55 6,623.53 6,829.78 7,029.45 7,210.57
ARR adjustment for tariff
levelisation 2 (150) 100 50
Carrying cost on
adjustment/deferment 3 7.13 9.50 2.38
Revised ARR 4 = 1 +2
+3 6,602.67 6,733.03 6,882.15 7,029.45 7,210.57
Revenue from existing
tariff 5 8042.93 8235.83 8412.57 8592.39 8775.46
Revenue Gap at existing
tariff 6 = 4 - 5 (1440.26) (1502.80) (1530.42) (1562.94) (1564.89)
Average Tariff
Increase/(Reduction) % 7 = 6/5 -17.9% -0.4% -0.2% -0.2% 0.2%
Total Sale - MU 8 8834.29 9048.92 9266.90 9488.60 9714.15
Average Cost - Rs/kWh 9=4/8
*10 7.47 7.44 7.43 7.41 7.42
As can be seen from the above Table, the Revenue Requirement has been adjusted in such
a manner that the average tariff reduction is around 18% in FY 2020-21, and the tariffs are
remaining in the range of +1% thereafter.
6.10 WHEELING CHARGES
AEML-D's Submission
AEML-D has proposed the Wheeling Charges in terms of Rupees/kWh for the 4th Control
Period in accordance with Regulation 73.2 of the MYT Regulations, 2019. However, for
consumers with load more than 20 kW, Wheeling Charges has been proposed in terms of
Rupees/kVAh, as Energy Charges have also been proposed in Rs/kVAh terms for these
categories. As there are no EHT consumers on AEML-D network, the Wires ARR is
distributed between HT and LT consumers and accordingly AEML-D has proposed
Wheeling Charges for HT and LT consumers only. AEML-D has calculated the Wheeling
Charges for the 4th Control Period as per the methodology followed in the past by the
Commission. The total wires revenue requirement is distributed between HT and LT
voltage levels on the basis of GFA at these voltage levels and thereafter, the cost allocated
to HT is shared between HT and LT by distributing the HT allocated cost in proportion to
the sales volume at HT and LT.
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Table 6-36: Wheeling Charges proposed by AEML-D for 4th Control Period
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Wires ARR (Rs. Crore) 1,473.83 1,634.44 1,824.42 1,951.18 2,079.67
Past Gap Recovery (Rs.
Crore) 457.24 0 0 0 0
Wires Recovery (Rs.
Crore) 1,931.07 1,634.44 1,824.42 1,951.18 2,079.67
GFA attributable to 11
kV Network (%) 43.34% 43.34% 43.34% 43.34% 43.34%
GFA attributable to LT
Network (%) 56.66% 56.66% 56.66% 56.66% 56.66%
Charge recoverable
from 11 kV consumers
(Rs. Crore)
836.91 708.35 790.69 845.63 901.31
Charge recoverable
from LT consumers (Rs.
Crore)
1,094.16 926.08 1,033.73 1,105.56 1,178.36
Total HT Sales (MkWh) 1,357.72 1,371.61 1,385.68 1,399.93 1,414.38
Total HT Sales
(MkVAh) 1,410.15 1,424.59 1,439.21 1,454.04 1,469.06
Total LT Sales (MkWh) 9,458.72 9,640.57 9,826.94 10,017.92 10,213.50
Total LT Sales (MkWh)
- below 20 kW 8,141.55 8,314.36 8,491.59 8,673.31 8,859.52
Total LT Sales (MkWh)
- above 20 kW 1,317.17 1,326.20 1,335.35 1,344.61 1,353.98
Total LT Sales
(MkVAh) - above 20
kW
1,559.09 1,569.70 1,580.44 1,591.31 1,602.31
Charge recoverable
from HT consumers (Rs.
Crore)
105.05 88.23 97.72 103.68 109.63
Charge recoverable
from LT consumers (Rs.
Crore)
1,826.02 1,546.21 1,726.71 1,847.50 1,970.04
Charge recoverable
from LT consumers (Rs.
Crore) - below 20 kW
1,571.74 1,333.51 1,492.07 1,599.53 1,708.87
Charge recoverable
from LT consumers (Rs.
Crore) - above 20 kW
254.28 212.70 234.64 247.97 261.16
HT Wheeling Charge
(Rs./kVAh) 0.74 0.62 0.68 0.71 0.75
LT Wheeling Charge
(Rs./kWh) - for
consumers with load
below 20 kW
1.93 1.60 1.76 1.84 1.93
LT Wheeling Charge
(Rs./kVAh) - for 1.63 1.36 1.48 1.56 1.63
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Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
consumers with load
above 20 kW
The summary of proposed Wheeling Charges for the 4th Control Period along with the
prevailing Wheeling Charges is shown in the Table below:
Table 6-37: Existing Wheeling Charges and Proposed Wheeling Charges (Rs./ kWh)
Particulars / (Rs./kWh) FY 19-20
(Existing) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
HT Wheeling Charge
(Rs./kVAh) 0.72 0.74 0.62 0.68 0.71 0.75
LT Wheeling Charge
(Rs./kWh) - for consumers
with load below 20 kW
1.57
1.93 1.60 1.76 1.84 1.93
LT Wheeling Charge
(Rs./kVAh) - for
consumers with load
above 20 kW
1.63 1.36 1.48 1.56 1.63
Table 6-38: Revenue from Wheeling Charges from Changeover & OA consumers
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Total Revenue from Wheeling
Charges from Changeover and OA
consumers (Rs. Crore)
331.91 278.18 308.20 327.28 346.20
Commission’s Analysis and Ruling
The Commission has distributed the total Wires ARR over HT and LT consumers and
computed the Wheeling Charges for HT and LT category. The Wires ARR is distributed
between HT and LT voltage levels based on the basis of GFA at these voltage levels. In this
regard, it is observed that AEML-D has changed the ratio of GFA between HT and LT from
48.92:51.08 proposed by AEML-D and approved in the MTR Order to 43.34:56.66 in the
present MYT Petition. However, AEML-D has not submitted any rationale or justification
for the proposed revision in HT:LT asset ratio.
The proposed revision in HT:LT asset ratio is quite significant and does not appear justified.
The Commission is of the view that these asset ratios cannot be modified every time,
depending on the prevalent competitive strategies of the competing Distribution Licensees.
There has to be a proper study of the asset ratios being claimed by the Distribution
Licensees. In the absence of any submission, leave alone justification for the modified
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HT:LT asset ratio, the Commission has computed the Wheeling Charges based on the
HT:LT asset ratio of 48.92:51.08 considered in the MTR Order. Thereafter, the cost
allocated to HT is shared between HT and LT by distributing the HT allocated cost in
proportion to the sales volume at HT and LT.
The Wheeling Charges determined by the Commission for AEML-D’s Wire consumers for
the Control Period from FY 2020-21 to FY 2024-25, and the Revenue from Wheeling
Charges are shown in the Table below:
Table 6-39: Approved Wheeling Charges
Particulars / (Rs./kWh) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
HT Wheeling Charge (Rs/kWh) 0.73 0.68 0.68 0.68 0.68
HT Wheeling Charge (Rs/kVAh) 0.70 0.65 0.66 0.66 0.66
LT Wheeling Charge (Rs/kWh)* 1.57 1.46 1.47 1.48 1.48
Note: * as kVAh billing has not been introduced for LT categories in this MYT Order, the
Wheeling Charges have been determined in Rs/kWh only
Table 6-40: Revenue from Wheeling Charges (Rs. Crore)
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Total Revenue from Wheeling Charges
from Changeover and OA consumers 252.91 234.49 236.38 236.54 236.52
6.11 CROSS SUBSIDY SURCHARGE (CSS)
AEML-D's Submission
AEML-D has ensured that the category-wise CSS determined using the formula as per the
Tariff Policy does not exceed 20% of the tariff (ABR) applicable to the category, as per the
provisions of Tariff Policy. The category-wise CSS determined for each year of the 4th
Control Period along with the prevailing CSS are shown in the Table below:
Table 6-41: Existing CSS and CSS Proposed by AEML-D (Rs/kWh)
Particulars FY 19-20
(Existing) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
HT Category
HT I: HT-Industry 1.80 1.56 1.35 1.33 1.30 1.28
HTII : HT- Commercial 1.97 1.57 1.37 1.36 1.38 1.35
HT III: HT-Group Housing
Society 1.73 1.24 0.68 0.52 0.38 0.21
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Particulars FY 19-20
(Existing) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
HT IV : HT -Public Water
Works 1.61 1.46 0.98 0.86 0.77 0.70
HT V - HT Metro & Monorail 1.60 1.61 1.39 1.39 1.40 1.41
HT VI (a):PS - Govt. EI &
Hospitals 1.66 1.54 1.18 1.19 1.16 1.10
HT VI (b):PS - Others 1.84 1.33 0.97 0.92 0.97 0.93
HT VII: Temporary Supply 1.80 1.68 1.49 1.49 1.50 1.51
HT VIII: EV Charging
Stations 0 0 0 0 0 0
LT Category
LT I - Below Poverty Line 0 0 0 0 0 0
LT -I Residential 0.59 0.61 0.56 0.58 0.63 0.65
LT II (a) - 0-20 kW 1.89 1.91 1.69 1.73 1.75 1.78
LT II (b) - 20-50 kW 2.02 1.55 1.38 1.37 1.38 1.35
LT II (c) - above 50 kW 2.13 1.78 1.53 1.50 1.48 1.42
LT III (a) - LT Industrial upto
20 kW 1.69 1.18 1.01 0.96 0.86 0.76
LT III (b) - LT Industrial
above 20 kW 1.82 1.55 1.38 1.35 0.95 0.93
LT IV - Public Water Works 1.64 1.34 1.16 1.14 1.13 1.14
LT-V : LT- Advertisements
and Hoardings 2.16 2.13 1.87 1.91 1.93 1.97
LT VI: LT -Street Lights 1.69 1.51 1.29 1.30 1.32 1.37
LT-VII (A): LT -Temporary
Supply Religious 0.74 0.67 0.57 0.50 0.47 0.52
LT-VII (B): LT -Temporary
Supply Others 2.13 1.63 1.47 1.52 1.58 1.61
LT VIII: LT - Crematorium &
Burial Grounds 0 0 0 0 0 0
LT IX (a): PS - Govt. EI &
Hospitals 1.13 0.72 0.64 0.68 0.66 0.69
LT IX (b): PS - Others 1.47 1.31 1.12 1.16 1.14 1.11
LT X (a): Agriculture -
Pumpsets 0 0 0 0 0 0
LT X (b): Agriculture - Others 0.30 0.03 0 0 0 0
LT XI: EV Charging Stations 0 1.17 1.03 0.98 1.02 1.01
As AEML-D has proposed Energy and Wheeling Charges in Rs./kVAh terms for
consumers categories with load more than 20 kW, the CSS for consumer categories with
load more than 20 kW is also proposed in Rs./kVAh terms, by applying the category-wise
Power Factor (PF) to the CSS in Rs./kWh terms. The category wise CSS in Rs./kVAh terms
for consumers with load more than 20 kW are shown in the Table below:
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Table 6-42: Proposed CSS for consumer categories with load more than 20 kW
(Rs/kVAh)
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
HT Category
HT I: HT-Industry 1.50 1.30 1.27 1.24 1.23
HTII : HT- Commercial 1.52 1.32 1.32 1.33 1.30
HT III: HT-Group
Housing Society 1.22 0.67 0.51 0.37 0.20
HT IV : HT -Public Water
Works 1.42 0.96 0.83 0.75 0.68
HT V - HT Metro &
Monorail 1.49 1.29 1.29 1.30 1.30
HT VI (a):PS - Govt. EI &
Hospitals 1.42 1.10 1.10 1.08 1.02
HT VI (b):PS - Others 1.28 0.94 0.89 0.94 0.90
HT VII: Temporary
Supply 1.51 1.34 1.34 1.35 1.36
LT Category
LT II (b) - 20-50 kW 1.25 1.12 1.11 1.11 1.09
LT II (c) - above 50 kW 1.56 1.34 1.32 1.30 1.25
LT III (b) - LT Industrial
above 20 kW 1.28 1.14 1.12 0.78 0.76
LT IV - Public Water
Works 1.19 1.03 1.01 1.00 1.01
LT VI: LT -Street Lights 1.21 1.04 1.04 1.06 1.10
LT XI: EV Charging
Stations 0.94 0.83 0.79 0.82 0.82
Table 6-43: Revenue from Proposed CSS
Particulars (Rs. Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Revenue from Proposed
CSS 171.20 154.99 159.04 167.36 172.89
Commission’s Analysis and Ruling
The Commission has computed the CSS based on the Formula stipulated in the Tariff
Policy, 2016 as detailed below:
S= T – [C/ (1-L/100) + D+ R],
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To arrive at the CSS for the various consumer categories, the values considered for the
components of the CSS are as below:
The Transmission Loss has been considered as 3.18% as approved in the InSTS Tariff
Order, while Wheeling Losses have been considered as 1.59% for HT and 6.43% for LT
voltage. Transmission Charges have been computed based on the Transmission Charges
approved and total sales (including OA sales) approved for the Control Period. These
charges have been deducted for computing the CSS. The Transmission Charge and
Wheeling Charge considered for the Control Period is as shown in the Table below:
Table 6-44: Transmission and Wheeling Charges considered by the Commission
(Rs./kWh) Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
Wheeling Charges
HT Charges 0.73 0.68 0.68 0.68 0.68
LT Charges 1.58 1.46 1.48 1.48 1.48
Transmission Charges
HT Charges 0.54 0.53 0.52 0.51 0.50
LT Charges 0.54 0.53 0.52 0.51 0.50
There is Nil per unit carrying cost for each year.
Based on the above, the category-wise CSS approved by the Commission for FY 2020-21
to FY 2024-25 in Rs/kWh and Rs/kVAh terms is as given in the Tables below:
Table 6-45: Approved CSS for FY 2020-21 to FY 2024-25 (Rs/kWh)
Consumer Categories FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
HT I – Industry 1.58 1.56 1.55 1.53 1.53
HT II – Commercial 1.79 1.84 1.89 1.97 2.08
HT III - Group Housing Society
(Residential) 1.55 1.56 1.56 1.60 1.67
HT IV – Railways, Metro &
Monorail 1.54 1.51 1.58 1.59 1.61
HT V - Public Services
a) Govt. Edu. Inst. & Hospitals 1.60 1.61 1.65 1.64 1.68
b) Others 1.66 1.66 1.64 1.67 1.71
HT VI - EV Charging Stations - - - - -
LT CUSTOMERS
LT I (A) - Residential (BPL) - - - - -
LT I (B) - Residential - 0.16 0.16 0.07 0.04
LT II - Commercial
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Consumer Categories FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
(A) - Upto 20 kW 1.66 1.64 1.61 1.62 1.62
(B) - > 20 kW & < 50kW 1.86 1.82 1.84 1.86 1.90
(C ) - > 50kW 1.92 1.93 1.95 1.96 1.99
LT III (A) - Industry < 20 kW 0.84 1.01 1.00 0.90 0.90
LT III (B) - Industry > 20kW 1.73 1.72 1.74 1.76 1.78
LT IV- Public Services
a) Govt. Edu. Inst. & Hospitals 0.62 0.77 0.74 0.71 0.67
b) Others 1.00 1.15 1.12 1.08 1.05
LT V - EV Charging Stations - - - - -
Table 6-46: Approved CSS for FY 2020-21 to FY 2024-25 (Rs/kVAh)
Consumer Categories FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
HT I – Industry 1.51 1.50 1.48 1.47 1.47
HT II – Commercial 1.73 1.78 1.83 1.91 2.01
HT III - Group Housing Society 1.52 1.54 1.53 1.57 1.64
HT V(B) - Railways Metro &
Monorail 1.43 1.40 1.46 1.47 1.49
HT VI - Public Services
HT VI - Public Services 1.48 1.50 1.53 1.52 1.56
HT VI - Public Services 1.60 1.61 1.59 1.61 1.65
HT VII - EV Charging Stations - - - - -
Note: CSS has not been determined in Rs/kVAh terms for LT categories as kVAh tariffs
have not been introduced for LT categories in this Order
The CSS is calculated as the difference between the ABR and cost elements for that
category/sub-category. However, on account of the telescopic nature of tariffs for the
Residential category, the ABR for any slab, if calculated, shall also include the revenue
against consumption of consumers consuming higher than that slab. Hence, the
Commission computes the ABR as well as the CSS for the category/sub-category as a
whole, rather than the consumption slab. Further, the Tariff Policy does not stipulate
anywhere that CSS cannot be levied for subsidised categories. Hence, the Commission has
continued to determine the CSS for the category/sub-category as a whole. Further, in order
to ensure consistency in approach, the CSS has been determined in the same manner for
AEML-D and TPC-D.
6.12 TARIFF DESIGN CONSIDERATION
The Commission’s views on each aspect of Tariff Philosophy raised by AEML-D as well
as on other relevant aspects are detailed below.
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The Commission has considered the main objectives of the Electricity Act, 2003 (“EA,
2003”) including the protection of the interest of consumers, the supply of electricity to all
areas and rationalisation of tariffs. The EA, 2003 also enjoins the Commission to maintain
a healthy balance between the interest of the Utilities and the reasonableness of the cost of
power being supplied to consumers. The Commission has also kept in view the principles
of tariff determination set out in Sections 61 and Section 62 of the EA, 2003, the Tariff
Policy, 2016 and the MYT Regulations, 2019, and also taken into consideration TPC-D’s
submissions as well as the Public responses in these MYT proceedings.
Apart from tariff levels, the complexity of the tariff structure plays an important role in
building transparency and limiting the discretionary power of Distribution Licensees
(Discoms). A simpler tariff structure helps easy understanding by consumers and on the
other hand, creation of many different categories gives discretionary power to Discoms
while charging tariffs.
At the national level, there is a thought process that the tariff structure across the States has
become very complex and there is a need to not only simplify and rationalize the tariff
structure, but also to make it harmonious across States. The Draft proposed Amendments
to Tariff Policy suggests that new tariff structure should have maximum five categories
having different slabs in Sanction Load and units consumed. It also suggests to provide
rebate to incentivise bulk customers to take power at higher voltage category, adopt kW
and kWh or kVA and kVAh based tariff linked to the load, create EV category, etc. among
other suggestions.
As a progressive step towards simpler and rationalized tariff structure, the Commission
intends to reduce the number of categories from the existing tariff structure, as detailed
subsequently.
6.12.1 Cross Subsidy
AEML-D's Submission
AEML-D submits that even Voltage-wise Cost of Supply (VCoS) method is inferior and
under-states cross-subsidy and needs further refinement in terms of allocation of power
purchase and related costs based on coincident demand factors and further refinements in
network cost allocation as well. These further refinements lead to the Cost of Supply, which
in industry parlance is termed Category-wise Cost to Serve, because in this method cost of
supply of one consumer category is different from that of the other, i.e., the differentiation
is not just limited to voltage-levels, but drills down to category-level. However, the
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application of this superior method requires great deal of data availability in terms of
representative load profiles of each consumer category, coincident demand of each
category, identification of demand, energy and customer related cost, etc.
In Maharashtra, while the present Wheeling Charges for Distribution Licensees are being
determined on a voltage-wise basis, the retail tariffs are still determined using the total
Average Cost of Supply. As a result, there is distortion in the representation of cross-
subsidy and the true cross-subsidisation of one category by another is under-stated, leading
to incorrect conclusions.
AEML-D has compared the Category-wise Cross Subsidy from FY 2016-17 to FY 2019-
20 based on ACoS and VCoS. It was observed that the ACoS methodology as determined
by the Commission resulted into more subsidizing sales and less subsidized sales as
compared to the VCoS methodology.
AEML-D has proposed tariffs based on VCoS methodology and requested the Commission
to approve tariffs based on VCoS methodology instead of ACoS as the same is affecting
AEML-D adversely.
Table 6-47: VCOS from FY 2020-21 to FY 2024-25 as submitted by AEML-D
(Rs/kWh)
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
VCoS - LT (Rs./kWh) 8.87 7.84 7.97 8.09 8.24
VCoS - HT (Rs./kWh) 5.81 5.03 5.07 5.11 5.20
Commission’s Analysis and Ruling
Regulation 91 of the MYT Regulations, 2019 provides for methodology to be adopted for
determination of Retail Supply Tariff. The relevant extracts are as follows.
“91.3 The retail supply tariff for different consumer categories shall be determined
on the basis of the Average Cost of Supply, computed as the ratio of the Aggregate
Revenue Requirement of the Distribution Licensee for the Year determined in
accordance with Regulation 81, and including unrecovered revenue gaps of
previous years to the extent proposed to be recovered, to the total sales of the
Distribution Licensee for the respective Year.
91.4 The Commission shall endeavour to gradually reduce the cross-subsidy
between consumer categories with respect to the Average Cost of Supply in
accordance with the provisions of the Act.
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91.5 While determining the tariff, the Commission shall also keep in view the
cost of supply at different voltage levels and the need to minimise tariff shock to
consumers…”(emphasis added)
As seen from the above extract, the Regulation clearly specifies that the retail supply tariffs
shall be determined based on the ACoS and the cross-subsidy shall also reduce over a period
of time with respect to ACoS. Though, the Commission may consider the VCoS at the time
of deciding the tariffs, the Commission shall approve tariff based on ACoS. The
Commission therefore rejects the plea of AEML-D to approve the category-wise tariffs
based on VCoS.
6.12.2 Considerations for Cross – Subsidization and Tariff Design with respect to fair
competition
AEML-D's Submission
In the case of AEML-D and TPC-D, while both are Distribution Licensees in the same area
of supply, there is a vast difference between the consumer mix and cost structure of the two
on account of the way the businesses evolved. AEML-D started off as a conventional
Distribution Licensee, which slowly and gradually rolled out its distribution network in its
entire area of supply and served each and every consumer that applied to it for power
supply, without regard to economic strata of the consumer, voltage level or its geographical
location. TPC-D, on the other hand, chose to remain a Bulk Licensee for more than 80
years, supplying power only to bulk power consumers and Distribution Licensees and only
thereafter, from about 2004-05 onwards, TPC-D started showing interest in retail supply.
AEML-D has its network laid over the years all across the area and thereby has a
depreciated network with associated economies of scale, which allows lower cost of
incremental expansion. This helps AEML-D keep its network costs lower than the parallel
licensee. However, the retail cost of AEML-D (other than power purchase) is higher than
the parallel licensee on account of its consumer profile and spread of consumers. The
overall load factor of consumers on parallel Licensee’s network is around 75%, whereas
the load factor for AEML-D is around 65%. This also makes the retail cost of AEML-D
higher than the parallel Licensee. The contrast between the two Licensees has remained
over the years and would continue to remain in foreseeable future, offering an advantage of
suppressed cost of supply to the parallel Licensee.
The competition between AEML-D and the parallel Licensee is, therefore, not being played
out on a level playing field inasmuch as the cost structure and per unit cost of supply of the
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two Licensees is deeply influenced by the extent of network reach, number and type of
customers being served by them. In order to ensure sustenance of competition and choice
of supply, it is important that future tariffs are set in such manner that the present tariff
differences between the two Licensees should endeavour to correct the mix balance so as
to create a level playing field between the two Licensees whose cost structure are different
only because of legacy they have inherited and not due to any other factor.
Commission’s Analysis and Ruling
The Commission feels that in a parallel Licence environment, all the Licensees shall
compete on a level playing field. The Commission has, therefore, while determining tariffs
for the 4th Control Period, has tried to adopt the same principles for determining the revenue
requirement and tariffs of both competing Distribution Licensees, viz., AEML-D and TPC-
D.
The Commission is of the view that the approach suggested by AEML-D, i.e., to determine
the retail tariff with respect to the Supply ACoS only, is nothing else, but tariff
determination based on VCoS. As already stated, the MYT Regulations, 2019 specifies that
tariffs shall be determined on the basis of ACoS.
The Commission has hence, considered the ACoS of the combined Distribution Business
to ensure reduction of the cross-subsidy. the Commission has adopted the same approach
for both AEML-D and TPC-D.
The Commission determines the category-wise tariffs of Distribution Licensees with the
following primary objectives:
▪ Reduction in the cross-subsidies between the Licensee’s consumers with respect to
the prevalent cross-subsidies;
▪ No category is subjected to a tariff shock;
▪ To meet the approved revenue requirement through the revised tariffs;
In case of AEML-D and TPC-D, the Commission has to also to consider the added aspect
of ensuring that the same tariff philosophy is adopted for both and that the inter-se
competitiveness is also not affected. The category-wise tariffs are also impacted by the
consumer and consumption mix of different Distribution Licensees. The situation also
varies with whether there is an overall tariff increase or tariff reduction. In case of overall
tariff reduction, it is easier to achieve most of the above stated objectives.
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However, this is a delicate balancing job, and it is likely that some unintended consequences
or anomalies in tariff structure creep in. The Commission is always responsive to
suggestions of tariff rationalisation, and even attempts to match the sometimes-conflicting
proposals made by the Distribution Licensees.
In the past, in order to correct certain anomalies in the consumer mix, the Commission had
consciously decided the category-wise tariffs of the competing Distribution Licensees, in
order to achieve the larger objective of having fair competition and a level playing field.
Over the years, the anomalies are been corrected though not fully and the Commission is
aware that the same cannot be achieved overnight.
It is observed that based on the tariff measures implemented by the Commission in the
previous Tariff Orders, the consumption mix of TPC-D and AEML-D are now similar to
each other, in terms of mix of subsidising and subsidised sales and mix of residential sales
to overall sales. The consumption of residential category is primarily the subsidised
category in both Distribution Licensees, and comprises 41% of the total sales in case of
TPC-D and 46% of total sales in case of AEML-D. The share of subsidised sales is same
as the share of residential sales. The Commission has hence, continued to rationalise the
category-wise tariffs to achieve the primary objectives stated above.
6.12.3 Fixed Charges and Demand Charges
AEML-D's Submission
The Commission, in the MYT Order dated 21 October 2016 in Case No. 34 of 2016, had
decided to gradually increase the Fixed Charges and Demand Charges of consumers to
increase the percentage recovery of Fixed Cost in the ARR through Fixed Charges and
Demand Charges. In continuation with the same principle, the Commission, in the MTR
Order dated 12 September 2018, increased the Fixed Charges and Demand Charges in FY
2018-19 and FY 2019-20 over the Fixed and Demand Charges applicable for FY 2017-18.
As per the MTR Order, the recovery of Fixed Cost from Fixed Charge / Demand Charge is
around 27% in FY 2019-20. The Fixed Cost includes the fixed cost of power purchase
contracts (capacity charges), Transmission Charges, Stand-by charges, SLDC charges and
the fixed cost of retail supply business. In order to increase the percentage recovery of Fixed
Cost through Fixed Charges, AEML-D has proposed gradual increase in Fixed Charges and
Demand Charges from the current level. The category-wise proposed Fixed and Demand
Charges for each year of the Control Period along with the existing Fixed / Demand Charges
are shown in the Table below:
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Table 6-48: Existing and Proposed Fixed Charges and Demand Charges
Particulars UoM FY 19-20
(Existing)
FY 20-
21
FY 21-
22
FY 22-
23
FY 23-
24
FY 24-
25
LT Category
LT I - Below Poverty
Line Rs./Consumer/Month 10 10 10 10 10 10
LT -I Residential
(Single Phase)
0-100 Rs./Consumer/Month 65 100 120 140 160 180
101-300 Rs./Consumer/Month 105 140 170 200 230 260
301-500 Rs./Consumer/Month 105 150 180 210 240 270
500 and above Rs./Consumer/Month 130 160 200 240 280 320
LT -I Residential
(Three phase)
0-100 Rs./Consumer/Month 130 160 200 240 280 320
101-300 Rs./Consumer/Month 130 160 200 240 280 320
301-500 Rs./Consumer/Month 130 160 200 240 280 320
500 and above Rs./Consumer/Month 130 160 200 240 280 320
LT II (a) - 0-20 kW Rs./Consumer/Month 365 425 500 575 600 700
LT II (b) - 20-50 kW Rs./kVA/ Month 305 350 425 500 600 700
LT II (c) - above 50
kW Rs./kVA/ Month 305 350 425 500 600 700
LT III (a) - LT
Industrial upto 20 kW Rs./Consumer/Month 365 425 500 575 600 700
LT III (b) - LT
Industrial above 20
kW
Rs./kVA/ Month 305 350 425 500 600 700
LT IV - Public Water
Works Rs./kVA/ Month 305 350 425 500 600 700
LT-V : LT-
Advertisements and
Hoardings
Rs./Consumer/Month 585 610 675 725 775 825
LT VI: LT -Street
Lights Rs./kVA/ Month 305 350 425 500 600 700
LT-VII (A): LT -
Temporary Supply
Religious
Rs./Consumer/Month 305 425 500 575 600 700
LT-VII (B): LT -
Temporary Supply
Others
Rs./Consumer/Month 585 610 675 725 775 825
LT VIII: LT -
Crematorium &
Burial Grounds
Rs./Consumer/Month 305 425 500 575 600 700
LT IX (a): PS - Govt.
EI & Hospitals Rs./Consumer/Month 365 425 500 575 600 700
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Particulars UoM FY 19-20
(Existing)
FY 20-
21
FY 21-
22
FY 22-
23
FY 23-
24
FY 24-
25
LT IX (b): PS –
Others Rs./Consumer/Month 365 425 500 575 600 700
LT X (a): Agriculture
- Pumpsets Rs./HP 40 40 40 40 40 40
LT X (b): Agriculture
- Others Rs./kW 95 95 95 95 95 95
LT XI: EV Charging
Stations Rs./kVA/ Month 70 70 70 70 70 70
HT Category
HT I: HT-Industry Rs./kVA/ Month 305 350 425 500 600 700
HTII : HT-
Commercial Rs./kVA/ Month 305 350 425 500 600 700
HT III: HT-Group
Housing Society Rs./kVA/ Month 305 350 425 500 600 700
HT IV : HT -Public
Water Works Rs./kVA/ Month 305 350 425 500 600 700
HT V - HT Metro &
Monorail Rs./kVA/ Month 305 350 425 500 600 700
HT VI (a):PS - Govt.
EI & Hospitals Rs./kVA/ Month 305 350 425 500 600 700
HT VI (b):PS –
Others Rs./kVA/ Month 305 350 425 500 600 700
HT VII: Temporary
Supply Rs./Consumer/Month 585 610 675 725 775 825
HT VIII: EV
Charging Stations Rs./kVA/ Month 70 70 70 70 70 70
Based on the proposed Fixed / Demand Charges, the percentage recovery of Fixed Cost
from Fixed/ Demand Charges for each year of the Control Period is shown in the Table
below:
Table 6-49: Percentage of Fixed Cost Recovery from Revenue from Fixed / Demand
Charges
Particulars / (Rs.
Crore)
FY 19-20
(Existing) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
Revenue as % of
fixed charge 27% 38% 53% 61% 68% 77%
As seen from above Table, the percentage recovery of Fixed Cost from proposed Fixed /
Demand Charges from FY 2020-21 onwards is increasing significantly as compared to 27%
approved for FY 2019-20 in the MTR Order dated 12 September 2018. This is mainly
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
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because the fixed cost liability from FY 2020-21 onwards is reducing as compared to the
approved fixed cost for FY 2019-20, as there is no Fixed Charge of VIPL-G in the power
purchase cost from FY 2020-21.
Commission’s Analysis and Ruling
The Fixed Costs of a Distribution Licensee includes all expenses, except the variable cost
of power purchase.
Of the total ARR of AEML-D, the fixed cost is around 46% during the period FY 2020-21
to FY 2024-25 while the variable cost is in the range of 54% of the total ARR for the same
period. However, recovery of the Fixed Cost through existing Fixed/Demand Charges is in
the range of 22% for the period FY 2020-21 to FY 2024-25, which is on the low side.
Accordingly, the Commission has decided to gradually increase the Fixed/Demand Charges
for all consumer categories by around 10% for each year of the 4th Control Period, i.e., FY
2020-21 to FY 2024-25. This is expected to increase the recovery of fixed cost of AEML-
D from Fixed/Demand Charges from 23% to 27%. The higher revenue from this increase
has been used to offset the Energy Charges of different consumer categories. The category-
wise Fixed/Demand Charges approved for each year of the 4th Control Period are
summarised subsequently in this Section, along with other Charges.
6.12.4 Energy Charges
AEML-D's Submission
AEML-D has proposed Energy Charges for each category, considering the Cross-Subsidy
for consumer categories as derived using the ratio of Retail ABR to Retail ACoS. For
residential consumers, AEML-D has proposed the energy charges for FY 2020-21 in such
a way that the total variable charge for FY 2020-21 is equal to the existing total variable
charge for 2019-20. Thus, residential consumers’ tariff (total variable charge) has been
proposed at the same level as that of FY 2019-20 to improve the coverage of cost of supply.
In FY 2021-22, residential tariff has been reduced as ARR in FY 2021-22 is itself reducing
as compared to FY 2020-21 due to the absence of any past Gap. From FY 2022-23 onwards
there is marginal increase in proposed tariffs (ABR) for residential category. To the extent
possible, AEML-D has tried to reduce / maintain the same level of cross-subsidy for
subsidizing consumers and has increased the cross-subsidy percentage of other subsidized
consumers. Based on above principles, AEML-D has proposed the Energy Charges for each
year of the 4th Control Period as shown in the Table below:
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Table 6-50: Existing and Proposed Energy Charges (Rs/kWh)
Particulars FY 19-20
(Existing) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
LT Category
LT I - Below Poverty Line 1.00 1.00 1.00 1.00 1.00 1.00
LT-I Residential (Single Phase)
0-100 3.00 3.15 2.75 2.60 2.55 2.50
101-300 6.02 6.50 5.55 5.40 5.30 5.25
301-500 7.15 7.75 6.75 6.70 6.55 6.50
500 and above 8.90 9.70 8.50 8.30 8.25 8.15
LT -I Residential (Three phase)
0-100 3.00 3.15 2.75 2.60 2.55 2.50
101-300 6.02 6.50 5.55 5.40 5.30 5.25
301-500 7.15 7.75 6.75 6.70 6.55 6.50
500 and above 8.90 9.70 8.50 8.30 8.25 8.15
LT II (a) - 0-20 kW 6.75 6.45 5.45 5.25 5.20 5.00
LT II (b) - 20-50 kW 6.85 5.51 4.46 4.09 3.65 3.22
LT II (c) - above 50 kW 7.15 5.86 4.78 4.44 4.04 3.64
LT III (a) - LT Industrial upto
20 kW 6.55 6.30 5.50 5.35 5.25 5.10
LT III (b) - LT Industrial above
20 kW 6.75 5.87 4.90 4.60 3.87 3.57
LT IV - Public Water Works 5.45 5.25 4.18 3.78 3.33 2.94
LT-V: LT- Advertisements and
Hoardings 6.65 5.50 4.20 4.00 3.75 3.60
LT VI: LT -Street Lights 5.65 5.41 4.29 3.91 3.48 3.11
LT-VII (A): LT -Temporary
Supply Religious 5.25 6.15 5.50 5.40 5.40 5.50
LT-VII (B): LT -Temporary
Supply Others 7.90 6.65 5.90 5.90 5.95 6.00
LT VIII: LT - Crematorium &
Burial Grounds 4.90 5.25 4.65 4.60 4.60 4.60
LT IX (a): PS - Govt. EI &
Hospitals 6.00 6.15 5.50 5.50 5.50 5.55
LT IX (b): PS - Others 6.40 6.75 6.00 6.00 6.00 6.00
LT X (a): Agriculture -
Pumpsets 3.40 3.85 3.50 3.40 3.40 3.40
LT X (b): Agriculture - Others 4.80 5.55 4.90 4.90 4.90 4.95
LT XI: EV Charging Stations 3.98 5.39 4.71 4.64 4.71 4.77
HT Category
HT I: HT-Industry 7.75 5.84 4.64 4.33 3.96 3.65
HTII : HT- Commercial 7.95 5.85 4.66 4.29 3.93 3.57
HT III: HT-Group Housing
Society 7.30 5.81 4.53 4.18 3.82 3.46
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Particulars FY 19-20
(Existing) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
HT IV: HT -Public Water
Works 6.60 5.72 4.48 4.12 3.76 3.45
HT V - HT Metro & Monorail 6.70 6.05 4.76 4.32 3.84 3.30
HT VI (a):PS - Govt. EI &
Hospitals 6.80 5.44 4.15 3.83 3.40 2.96
HT VI (b):PS - Others 7.65 5.48 4.34 4.03 3.78 3.47
HT VII: Temporary Supply 8.45 7.61 6.78 6.72 6.72 6.78
HT VIII: EV Charging Stations 4.52 5.38 5.33 5.28 5.23 5.17
AEML-D submits that the kVAh data is available from November 2018 onwards and the
data for categories with load more than 20 kW is provided. In addition to the Energy
Charges in Rs./kWh terms proposed above, AEML-D has also proposed the Energy
Charges in Rs./kVAh terms (for categories with load more than 20 kW). In the first step,
AEML-D has derived the sales in kVAh terms from sales in kWh terms using the respective
category-wise PF. Based on the kWh and kVAh data from November 2018 to October 2019,
the category-wise PF are shown in the Table below:
Table 6-51: Category-wise Power Factor
Particulars Power Factor
LT II (b) - 20-50 kW 0.81
LT II (c) - above 50 kW 0.88
LT III (b) - LT Industrial above 20 kW 0.83
LT IV - Public Water Works 0.89
LT VI: LT -Street Lights 0.80
HT I: HT-Industry 0.96
HTII: HT- Commercial 0.97
HT III: HT-Group Housing Society 0.98
HT IV: HT -Public Water Works 0.97
HT V - HT Metro & Monorail 0.92
HT VI (a):PS - Govt. EI & Hospitals 0.93
HT VI (b):PS - Others 0.97
HT VII: Temporary Supply 0.90
The Energy Charges in kVAh terms have been derived by dividing the revenue from energy
charges (Rs./kWh) with the sales in kVAh terms. The Energy Charges in kVAh terms for
categories with load more than 20 kW is shown in the Table below:
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Table 6-52: Energy Charges in kVAh terms (Rs/kVAh)
Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
LT II (b) - 20-50 kW 4.45 3.60 3.30 2.95 2.60
LT II (c) - above 50 kW 5.15 4.20 3.90 3.55 3.20
LT III (b) - LT Industrial
above 20 kW 4.85 4.05 3.80 3.20 2.95
LT IV - Public Water Works 4.65 3.70 3.35 2.95 2.60
LT VI: LT -Street Lights 4.35 3.45 3.15 2.80 2.50
LT XI: EV Charging Stations 4.35 3.80 3.75 3.80 3.85
HT Category
HT I: HT-Industry 5.60 4.45 4.15 3.80 3.50
HTII : HT- Commercial 5.65 4.50 4.15 3.80 3.45
HT III: HT-Group Housing
Society 5.70 4.45 4.10 3.75 3.40
HT IV: HT -Public Water
Works 5.55 4.35 4.00 3.65 3.35
HT V - HT Metro & Monorail 5.60 4.40 4.00 3.55 3.05
HT VI (a):PS - Govt. EI &
Hospitals 5.05 3.85 3.55 3.15 2.75
HT VI (b):PS - Others 5.30 4.20 3.90 3.65 3.35
HT VII: Temporary Supply 6.85 6.10 6.05 6.05 6.10
HT VIII: EV Charging
Stations 5.20 5.15 5.10 5.05 5.00
Commission’s Analysis and Ruling
The Commission, in the MTR Orders issued in September 2018 for Distribution Licensees
in the State, had expressed its intention to implement kVAh billing for all HT consumer
and LT consumers having load above 20 kW from 1 April, 2020, so as to provide the
Licensees enough lead time to take necessary steps such as meter replacement, if required,
preparedness of billing software, etc., to ensure their operational preparedness for
implementing the kVAh billing.
AEML-D has also proposed to implement kVAh billing for all HT consumers and LT
consumers having load above 20 kW, in line with the Commission’s intention. However,
in view of the different state of readiness of different Distribution Licensees in Mumbai,
the Commission intends to implement kVAh tariffs in a phased manner for all the
consumers subject to the readiness of the Distribution Licensee. Accordingly, the
Commission allows implementation of kVAh billing for all HT categories of AEML-D. For
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other categories presently subjected to PF incentive and penalty mechanism, the same shall
continue till the kWh tariffs are replaced by kVAh tariffs.
The Commission intends to implement kVAh billing for LT consumers with load of 20 kW
and above at the time of MTR proceedings, based on the feedback received after
implementation of kVAh billing for HT consumers.
The Commission is cognisant of the fact that in the present billing system, Consumer, based
on the incentive/penalty levied in the monthly bill was kept informed of Power Factor (PF)
maintained by it during the month. The consumer was therefore, in the position to take
corrective action in case of penalty was levied due to poor PF based on the information
from the monthly Bill. However, with implementation of kVAh billing, any adverse impact
of due to poor PF will be recorded in increase consumption in kVAh and Consumer will
not be aware of actual PF for the month unless it is being recorded and monitored separately.
For smooth transition to new billing system and to keep Consumer aware at all times, the
Commission directs AEML-D to display PF (computed by considering leading and lagging
RkVAh) recorded during the month in the bill of all the Consumer categories till further
directions.
Further, such PF can be used for converting kVAh into kWh for arriving at payment to be
made towards taxes / duties imposed by the GoM, if applicable.
While determining per unit charges in kVAh, the Commission has used category-wise PF,
which is lower than unity. This makes the per unit kVAh tariff lower than the tariff, which
would have been determined in kWh terms, though the consumer will have to pay the same
amount and revenue generated shall be the same. The approved category-wise Energy
Charges are summarised subsequently for each Year of the Control Period.
6.12.5 Additional Surcharge for the Control Period
The Commission has not determined any Additional Surcharge, as AEML-D has not
proposed the same.
6.12.6 Category-wise Tariffs for each year of the Control Period
AEML-D's Submission
AEML has proposed category-wise tariffs for FY 2020-21 to FY 2024-25 based on the
above philosophy, which are not reproduced herein.
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Commission’s Analysis and Ruling
The Commission has continued to determine the tariffs with an in-built incentive to
consumers to reduce their consumption. The billing impact is designed to increase as the
consumption increases on account of the higher telescopic tariffs applicable to higher
consumption slabs, while at the same time ensuring that even consumers in the higher
consumption slabs are charged at a lower rate to the extent of the consumption
corresponding to lower slabs.
As mentioned previously, the Commission has attempted to bring the tariff of most of the
categories in the ± 20% of ACoS range as prescribed by the Tariff Policy. Further, the
Commission has also tried to ensure that the level cross-subsidy either remains constant or
reduces in the subsequent year so as to steadily approach the ACoS as envisaged in the
Tariff Policy.
6.12.7 Category wise Cross Subsidy trajectory
Cross-subsidy in AEML-D system, considering Retail Average Cost of Supply
AEML-D's Submission
Based on the proposed tariffs and the Retail ACoS, the category-wise cross subsidy
reduction trajectory for each year of the fourth Control Period is shown in the Table below:
Table 6-53: Category-wise Cross Subsidy Proposed by AEML-D
Particulars / (Rs./kWh) FY 19-20
(Existing) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
LT Category
LT I - Below Poverty Line 55% 66% 70% 69% 69% 67%
LT -I Residential 87% 93% 94% 94% 95% 95%
LT II (a) - 0-20 kW 113% 110% 111% 111% 111% 111%
LT II (b) - 20-50 kW 120% 104% 105% 105% 105% 104%
LT II (c) - above 50 kW 123% 107% 107% 106% 106% 105%
LT III (a) - LT Industrial
upto 20 kW 103% 100% 100% 99% 98% 97%
LT III (b) - LT Industrial
above 20 kW 112% 104% 105% 104% 99% 99%
LT IV - Public Water
Works 103% 102% 102% 101% 101% 101%
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Particulars / (Rs./kWh) FY 19-20
(Existing) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
LT-V : LT-
Advertisements and
Hoardings
130% 123% 122% 123% 123% 123%
LT VI: LT -Street Lights 105% 104% 104% 104% 104% 104%
LT-VII (A): LT -
Temporary Supply
Religious
92% 94% 94% 93% 93% 94%
LT-VII (B): LT -
Temporary Supply Others 129% 105% 106% 106% 107% 107%
LT VIII: LT -
Crematorium & Burial
Grounds
80% 85% 85% 85% 85% 85%
LT IX (a): PS - Govt. EI
& Hospitals 94% 95% 95% 96% 96% 96%
LT IX (b): PS - Others 98% 102% 101% 102% 102% 101%
LT X (a): Agriculture -
Pumpsets 67% 68% 68% 68% 68% 67%
LT X (b): Agriculture -
Others 85% 87% 86% 86% 86% 86%
LT XI: EV Charging
Stations 100% 100% 99% 100% 100%
HT Category
HT I: HT-Industry 114% 104% 101% 101% 100% 100%
HTII : HT- Commercial 124% 105% 102% 101% 101% 101%
HT III: HT-Group
Housing Society 111% 97% 91% 89% 87% 84%
HT IV: HT -Public Water
Works 103% 100% 96% 94% 93% 91%
HT V - HT Metro &
Monorail 102% 107% 104% 103% 103% 102%
HT VI (a):PS - Govt. EI &
Hospitals 106% 102% 98% 99% 98% 97%
HT VI (b):PS - Others 117% 98% 95% 95% 95% 95%
HT VII: Temporary
Supply 116% 112% 111% 111% 110% 110%
ACoS (Rs./kWh) 8.68 8.53 7.53 7.66 7.77 7.93
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Commission’s Analysis and Ruling
As stated earlier, the Commission has determined the cross-subsidy and category-wise
tariffs with respect to the ACoS, in accordance with the MYT Regulations, 2019, rather
than the Supply ACoS as proposed by AEML-D. Based on the approved tariffs and the cost
of supply, as described above, the category-wise cross-subsidy approved by the
Commission for AEML-D based on revised tariffs, is presented in the following Table:
Table 6-54: Category-wise Cross Subsidy approved by the Commission (%)
Consumer Categories Existing* FY
2020-21
FY
2021-22
FY
2022-23
FY
2023-24
FY
2024-25
HT I – Industry 142% 106% 105% 104% 103% 103%
HT II – Commercial 136% 104% 105% 105% 108% 112%
HT III - Group Housing Society 128% 103% 101% 106% 107% 109%
HT V(B) - Railways Metro &
Monorail 128% 103% 101% 106% 107% 109%
HT VI - Public Services
Government Hospitals &
Educational Institutions 133% 107% 108% 111% 111% 113%
Public Services Others 142% 111% 112% 111% 112% 115%
LT Category
LT I - Residential (BPL) 87% 80% 78% 79% 79% 79%
LT I – Residential 99% 87% 88% 88% 88% 88%
LT II(A) - Commercial upto 20
kW 138% 111% 110% 108% 110% 109%
LT II(B) - Commercial 20 to 50
kW 148% 125% 123% 124% 126% 128%
LT II(C) - Commercial > 50 kW 150% 128% 129% 131% 132% 134%
LT III (A)- Industrial upto 20
kW 125% 103% 102% 103% 99% 99%
LT III (B) - Industrial > 20 kW 139% 116% 116% 117% 118% 120%
LT IX - Public Services
Government Hospitals &
Educational Institutions 113% 97% 96% 96% 97% 96%
Public Services Others 119% 102% 101% 101% 102% 101%
Note: * Existing cross-subsidy has been calculated based on prevalent tariff and projected
sales for FY 2020-21, and is not the cross-subsidy approved for FY 2019-20 in the MTR
Order
6.12.8 Other Issues
Revision in Billing Demand
AEML-D's Submission
AEML-D submitted that the current methodology for calculation of Billing Demand for HT
consumers, as stipulated by the Commission in MTR Order dated 12 September 2018 is as
under:
“Monthly Billing Demand will be the higher of the following:
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• Actual Maximum Demand recorded in the month during 0600 hours to 2200 hours;
• 75% of the highest Billing Demand recorded during the preceding eleven months,
subject to the limit of Contract Demand;
• 50% of the Contract Demand.”
Similarly, the methodology for calculation of Billing Demand for LT consumers is as under:
“Monthly Billing Demand will be the higher of the following:
• 65% of the actual Maximum Demand recorded in the month during 0600 hours to
2200 hours;
• 40% of the Contract Demand.”
AEML-D submitted that the actual Billing Demand for AEML-D consumers is much lower
than the Contract Demand due to lower capacity utilization by consumers. The Commission
emphasized on higher percentage of recovery of Fixed Cost through Fixed/Demand
Charges in the previous Tariff Orders. Recovery of fixed cost through Demand charges can
also be increased by increasing the percentage of Contract Demand to be treated as Billing
Demand, in case the actual Maximum Demand is lower than the threshold of Contract
Demand. This will also provide an incentive to consumers to increase their capacity
utilization factor. Thus AEML-D proposes to revise the Billing Demand methodology for
HT consumers to the following:
“Monthly Billing Demand will be the higher of the following:
• Actual Maximum Demand recorded in the month during 0600 hours to 2200 hours;
• 75% of the highest Billing Demand recorded during the preceding eleven months,
subject to the limit of Contract Demand;
• 60% of the Contract Demand.”
Similarly, AEML-D proposes to revise the Billing Demand methodology for LT consumers
to the following:
“Monthly Billing Demand will be the higher of the following:
• 65% of the actual Maximum Demand recorded in the month during 0600 hours to
2200 hours;
• 60% of the Contract Demand.”
Commission’s Analysis and Ruling
Over the period, the Commission is maintaining uniformity in basic tariff design principles
across all Distribution Licensees. Definition of Billing demand includes minimum
threshold level at which consumer will be billed against its Contract Demand. Such
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minimum threshold in case of HT consumers is 50% of the Contract Demand. The
Commission finds it to be much lower as compared to other States, which have stipulated
it at 85% to 95% of Contract Demand. The Commission notes that having higher Contract
Demand and not utilising it would cause underutilisation of distribution assets. Hence, in
order to dis-incentivise such underutilisation, the Commission proposes to gradually
increase minimum threshold limit by 5% in each year of the 4th Control Period so as to
reach 75% level in FY 2024-25.
Demand Charges for Street Lights and other lighting facilities having
“Automatic Timers
AEML-D's Submission
The Commission has stipulated the Demand Charges (in Rs./kVA/month) for LT VI: Street
Lights category, at the same level as that for other categories to which Demand Charges are
applicable. However, the Commission has stipulated that Street Lights and other lighting
facilities having “Automatic Timers” for switching on / off would be levied Demand
Charges on the lower of the following:
i. 50% of Contract Demand
ii. Actual Recorded Demand
Due to the above condition, there is lower recovery of Fixed Charges from Street Light
connections. The recorded demand for Street Light connections is usually equal to the
Sanctioned Load / Contract Demand and due to the above conditions, Demand Charges are
levied on 50% of Contract Demand instead of the actual recorded Maximum Demand.
Street Light consumption starts from evening 6 pm of the day and hence, part of their
consumption coincides with the peak demand time of load curve. Recovery of Demand
Charges considering 50% of the Contract Demand would mean recovery of balance cost
from other consumers. Therefore, AEML-D requested the Commission to change the
methodology for charging Demand Charges for Street Lights and other lighting facilities to
the following. Also, for higher recovery of fixed cost through Demand Charges, AEML-D
has proposed to revise the threshold of Contract Demand applicable while calculating
Billing Demand, as under:
“Street Lights and other lighting facilities having “Automatic Timers” for switching on /
off would be levied Demand Charges on the higher of the following:
i. 60% of Contract Demand
ii. Actual Recorded Maximum Demand”
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AEML-D submitted that in case the Commission does not wish to change the methodology
of calculation of Billing Demand for Street Lights and other lighting facilities with
Automatic Timers, then the Demand Charges for Street Light category may be doubled to
recover the higher percentage of fixed cost from Demand Charges.
Commission’s Analysis and Ruling
LT VI – Street Light and LT IX (B) – Public Services (Others) consumer categories have
consumers which serve the public in general. As both have similar end use, the Commission
merges the LT VI – Street Light into LT IX (B) – Public Services (Others) as the latter one
has broader coverage of consumers who are into Public Services. As a result, the Fixed
Charges are now applicable to Streetlights, rather than Demand Charges as applicable
earlier.
Applicability of Demand Charges below 20 kW sanctioned load
AEML-D's Submission
Demand Charges should apply only to connections where the Sanctioned Load is more than
20 kW. In the present Tariff Schedule, there are several types of connections where
sanctioned load would be much less than 20 kW, but Demand Charges (Rs./kVA) are
provided. In this situation, AEML is forced to carry out change in meter of these consumers.
For connections such as those given for public gardens / traffic signals / fountains / public
places (presently included in Street Light category), the sanctioned load is often less than
20 kW. Similarly, there could be connections within LT-IV PWW and LT XI – EV charging
station requiring less than 20 kW sanctioned load. It is suggested that a uniform practice of
tariff categorisation is adopted wherein Demand Charges in Rs./kVA/month are prescribed
for all connections (except residential) with sanctioned load of more than 20 kW and Fixed
Charges in Rs./month are prescribed for connections with sanctioned load lower than or
equal to 20 kW. This will also bring uniformity in applicability of PF incentive / penalty
among all consumer categories.
Commission’s Analysis and Ruling
As discussed subsequently, the Commision has merged certain categories based on purpose
of use. As a result, the Streetlight Category has been merged with the Public Service Others
category, for which Demand Charges are not applicable. Hence, the concern raised by
AEML-D stands addressed.
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Residential tariff for Public Sanitary Conveniences
AEML-D's Submission
As per the Tariff Schedule approved by the Commission in the MTR Order dated 12
September 2018, tariff applicable to Street lights (LT VI) are also applicable to the
following:
i. lighting in Public Gardens (i.e. which are open to the general public free of charge);
ii. Traffic Signals and Traffic Islands;
iii. Public Sanitary Conveniences;
iv. Public Water Fountains; and
v. Such other public places open to the general public free of charge.
The Tariff approved for this category includes Rs./kVA demand charges as well. Out of the
connections mentioned in the above list, Public Sanitary Convenience premises are almost
always small and with little lighting load. Their inclusion in streetlight category means that
the connections must be levied demand charges for which demand recording meter needs
to be installed. Given the size of individual load (way less than 20 kW), there is no reason
for inclusion of these connections in streetlight category. Moreover, most of these premises
are managed by MCGM and in few cases, a minor fee for use is charged in order to ensure
maintenance and upkeep. The MCGM has made a representation to AEML in this regard
vide their letter dated 16 May 2019, wherein they have requested public toilets to be
categorised under Residential category (LT-1B). Based on the above, it is requested that
Public Sanitary Conveniences be categorised under LT-I (B) Residential category.
Commission’s Analysis and Ruling
As stated above, LT VI – Street Lights, and LT IX (B) – Public Services (Others) consumer
categories have consumers, which serve the public in general. As both have similar end use,
the Commission merges the LT VI – Street Light into LT IX (B) – Public Services (Others)
as the latter one has broader coverage of consumers who are into Public Services. However,
Power Factor Incentive/Penalty for LT VII (B) – Temporary Supply Others
AEML-D's Submission
The Commission may consider the following if it chooses to continue with kWh billing for
connections above 20 kW sanctioned load, with accompanying mechanism of PF
Incentive/Penalty:
As per the Tariff Schedule approved by the Commission in the MTR Order dated 12
September 2018, PF Incentive / Penalty is applicable for the following consumer categories:
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HT Categories:
i. HT-I: Industry,
ii. HT II - Commercial,
iii. HT-IV: PWW,
iv. HT V- Railways, Metro & Monorail,
v. HT-VI: Public Services [ HT VI (A) and HT VI (B)],
vi. HT VII - Temporary Supply,
vii. HT VIII – Electric Vehicle Charging Stations
LT Categories:
i. LT II: Non-Residential/Commercial [LT II (B), LT II (C)] (for Contract
Demand/Sanctioned Load above 20 kW),
ii. LT III (B): Industry above 20 kW,
iii. LT IV- PWW,
iv. LT VII (B) – Temporary Supply (Others),
v. LT IX: Public Service [LT IX (A) and LT IX (B)] having contract
demand/sanctioned load above 20 kW
vi. LT XI – Electric Vehicle Charging Stations.
AEML-D submits that most of the consumers under LT VII(B) – Temporary Supply
(Others) have very small sanctioned load and it is not advisable to levy PF incentive /
penalty to them as it is not feasible to install compatible meters for them capable for
measuring power factor. Hence PF incentive / penalty should be applicable to LT VII(B) –
Temporary Supply (Others) only for those consumers whose sanctioned load is more than
20 kW. Similarly, PF incentive/ penalty should be applicable to LT IV – PWW and LT IX
– EV Charging Station consumers, only if their sanctioned load is more than 20 kW.
AEML-D requests the Commission to amend the Tariff Schedule for LT IV – PWW, LT
VII(B) – Temporary Supply (Others), LT IX – EV charging station accordingly. AEML-D
also submits that in case the Commission intends to move towards kVAh based billing from
FY 2020-21 onwards, kVAh based billing should be applicable to LT IV – PWW, LT VI –
Street Lighting and LT IX – EV charging station only for those consumers having
sanctioned load of more than 20 kW.
Commission’s Analysis and Ruling
The Commission, in the MTR Orders issued in September 2018 for Distribution Licensees
in the State, had expressed its intention to implement kVAh billing for all HT consumer
and LT consumers having load above 20 kW from 1 April, 2020, so as to provide the
Licensees enough lead time to take necessary steps such as meter replacement, if required,
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preparedness of billing software, etc., to ensure their operational preparedness for
implementing the kVAh billing.
As the Commission had indicated to implement kVAh billing for all HT consumers and LT
consumers having load above 20 kW, however, AEML-D has also proposed to implement
kVAh billing for such consumers. The Commission intends to implement the same in a
phased manner for all the consumers subject to the readiness of the Distribution Licensee.
Accordingly, the Commission allows implementation of kVAh billing for all HT categories
of AEML-D and accordingly, there is no relevance of continuing with the Power Factor
Incentive/Penalty mechanism for HT consumer.
The Commission is cognisant of the fact that in the present billing system, Consumer, based
on the incentive/penalty levied in the monthly bill was kept informed of Power Factor (PF)
maintained by it during the month. The Consumer was therefore, in the position to take
corrective action in case of penalty was levied due to poor PF based on the information
from the monthly Bill. However, with implementation of kVAh billing, any adverse impact
of due to poor PF will be recorded in increase consumption in kVAh and Consumer will
not be aware of actual PF for the month unless it is being recorded and monitored separately.
For smooth transition to new billing system and to keep Consumer aware at all times, the
Commission directs AEML-D to display PF (computed by considering leading and lagging
RkVAh) recorded during the month in the bill of all the Consumer categories till further
directions.
Further, such PF can be used for converting kVAh into kWh for arriving at payment to be
made towards taxes / duties imposed by the GoM, if applicable.
For other categories presently subjected to PF incentive and penalty mechanism, the same
shall continue till the kWh tariffs are replaced by kVAh tariffs.
The Commission, subject to the feedback received after implementation of kVAh billing
for HT consumers, intends to implement kVAh billing for LT consumers with load of 20
kW and above at the time of MTR proceedings.
While determining per unit charges in kVAh, the Commission has used category-wise PF,
which is lower than unity. This makes the per unit kVAh tariff lower than the tariff at unity
PF, which would have been determined in kWh terms, though the consumer will have to
pay the same amount and revenue generated shall be the same.
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Further, as discussed subsequently, the Commission has merged the LT VII (B) –
Temporary Supply (Others) category with LT II (A) Commercial with load less than 20
kW. As PF PF incentive/penalty is not applicable for this category, the concern raised by
AEML stands addressed.
Change in Formula for Calculation of Power Factor and Load Factor
AEML-D's Submission
The Commission may consider the following if it chooses to continue with kWh billing and
accompanying mechanism of PF incentive / penalty.
The Commission, in the MTR Order dated 12 September 2018, had stipulated the formula
for Power Factor and Load Factor. However, the Commission, in the review of MSEDCL’s
MTR Order (Case No. 321 of 2018 dated 24 December 2018), has modified the formula for
calculation of Load factor. Further, the Commission, in the Order dated 2 January 2019
(Case No. 329 of 2018), had changed the formula for Power Factor. It is submitted that all
of these changes made in separate Orders may now be brought in the Tariff Schedules of
all Distribution Licensees to be specified with the MYT Orders, so that the same can be
uniformly applied.
Commission’s Analysis and Ruling
The Commission has standardised the formula for Power Factor and Load Factor across the
Distribution Licensees.
The Commission notes that the existing Formula stipulated in the Tariff Order for
calculation of Load factor presumes 60 hours of interruptions in a month. However, with
AMR/MRI enabled meters being installed for all HT consumers, actual hours of
interruptions are recorded in the meter and are readily available at the time of processing of
monthly bill. Hence, in order to compute correct Load Factor, the Commission has changed
the Formula and included actual interruption hours recorded in the meter instead of
provision for 60 hours. In case of faulty meter, interruption hours in the meter shall not be
available, then interruption hours recorded on feeder meter shall be considered.
Discount for opting for “E-Bill”
AEML-D's Submission
The Commission, in the MTR Order dated 26 June 2015 in Case No. 4 of 2015, had allowed
AEML-D to issue E-Bills to consumers who opt for them instead of, or in addition to, hard
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copy of the bill. AEML-D submitted that in order to incentivize more consumers to opt for
E-Bills, a discount of Rs. 10/- may be given to consumers, who opt for E-Bill instead of
physical bill. AEML-D submitted that there shall be savings in bill printing and bill
distribution costs as well, along with applicable service tax on the same, which shall reflect
in O&M cost. AEML-D submitted that the Calcutta Electric Supply Company (CESC) also
provides a discount of Rs. 5/- on electricity bill, if paperless bill is opted for by the
consumer. Hence AEML-D requested the Commission to allow the discount for consumers
who opt for E-Bill instead of physical bill.
Commission’s Analysis and Ruling
The Commission approves a discount of Rs. 10 per consumer for those opting for E-bills.
No hard copy of the bills shall be generated for such consumers.
Limit of accepting cash towards payment of electricity bill to Rs. Two Thousand
Five Hundred only
AEML-D's Submission
AEML-D submits that MERC (Electricity Supply Code and Other Conditions of Supply)
Regulations, 2005 or MERC (Standards of Performance of Distribution Licensees, Period
for Giving Supply and Determination of Compensation) Regulations, 2015 do not provide
for any compulsion for digital payment. However, as specified under Section 40 A (3) of
Income Tax Act, 1961, generally payment up to Rs. 20,000/- is accepted in cash and above
Rs. 20,000/- is accepted either by cheque or through various modes of digital payment.
AEML-D submits that, to further encourage the consumers to make payment through digital
modes, the Commission may limit acceptance of Cash Payment only up to Rs. 2500/-
(approximately equal to Residential Consumer bill amount equivalent to 300 units per
month). This will ensure digital payment from all high-end residential, commercial and
industrial consumers who have access to digital payment avenues. The limit of Rs 2500/-
will also ensure that low end consumers are not inconvenienced by such restrictions of cash
payment.
The Commission in its draft MERC (Electricity Supply Code and Other Conditions of
Supply) Regulations, 2015, have already proposed to restrict cash payment up to Rs.
10,000/-. AEML-D submitted that Delhi Electricity Regulatory Commission, it its Tariff
Order dated 28.03.2018 in Petition No. 68 of 2017, has directed BSES Rajdhani Power
Limited (BRPL) to restrict the receipt of cash payment up to Rs. 4000/-
Commission’s Analysis and Ruling
The Commission takes cognizance of the matter in this regard and approves restriction of
cash payment on electricity bills up to Rs. 5,000/- per consumer per month.
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Levy of penalty of Rs. Seven Hundred and Fifty for second and subsequent
cheque bounce for the same consumer
AEML-D's Submission
Out of total cheques received, regularly about 4000 to 5000 cheques bounce on presentation
on monthly basis. The Commission has approved charges for dishonoured cheques at Rs
250/- in its Order dated 12 September 2018. AEML-D submitted that the aforesaid charges
are approved by the Commission mainly towards administration expenses incurred by the
Licensee as a result of bouncing of a cheque. There are a number of consumers, details of
which are mentioned herein below, whose cheques bounce multiple times within the year.
Table 6-55: No. of consumers whose cheques bounce multiples times within a year
No. of times
Cheques
Bounced
Consumer Count
2015-16 2016-17 2017-18 2018-19 2019-20 (Till
Sept 19)
1 39,349 38,754 40,832 45,697 22,140
2 6,169 5,708 6,288 6,041 1,162
3 728 596 1036 695 63
4 114 102 204 117 20
5 34 25 64 28 5
6 15 13 32 5 0
7 10 6 16 4 0
8 4 4 8 2 0
Commission’s Analysis and Ruling
The Commission approves the levy of penalty of Rs. 750 for second and subsequent cheque
bounce from the same consumer as proposed by AEML-D.
Change in methodology for calculation of Security Deposit from
consumers
AEML-D's Submission
AEML-D submitted that the average of last twelve months’ billing is often not sufficient in
case the tariff increase is there in subsequent years. Further, in case the consumer had been
disconnected during the high billing months due to non-payment of dues and subsequently
reconnected, then the average of the last twelve months billing does not reflect the
electricity charges for average consumption during the year. Hence, AEML-D proposes to
modify the method of calculation of security deposit from average of last twelve months
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billing to maximum of last twelve months billing. AEML-D also proposes to collect twice
the maximum of last twelve months’ billing from consumers.
Commission’s Analysis and Ruling
The Commission does not accept AEML-D’s proposal to increase the Security Deposit to
twice the maximum of last twelve months’ billing. This will significantly increase the
amount of Security Deposit payable by the consumers.
Recovery of arrears from Changeover consumers
AEML-D's Submission
AEML-D submits that consumers who have migrated to TPC-D as change-over consumers
often do not pay the arrears payable to AEML-D after the change-over process. As part of
the change-over process, the consumption recorded by the meter on the date of change-over
is read before allowing for change-over and based on the final meter reading on the date of
changeover, a final bill is issued to the change-over consumers by AEML-D. However,
changeover consumers often do not pay this final bill as TPC-D supply is already available.
TPC-D is also unable to recover such arrears from the change-over consumers on behalf of
AEML-D due to lack of any specific regulatory provisions in the Change-over Protocol
approved by the Commission in Case No. 50 of 2009 dated 15 October 2009. AEML-D
submits that similar situations can arise when a consumer switches over to TPC-D from
AEML-D. However, there is specific provision for collection of outstanding arrears in the
Switchover Protocol approved by the Commission in the Order dated 12 June 2017 in Case
No. 182 of 2014 and 40 of 2015. AEML-D requests the Commission to make similar
provision for recovery of arrears from change-over consumers by TPC-D on behalf of
AEML-D and remit the same to AEML-D. AEML-D also requests the Commission to direct
TPC-D to recover the arrears from change-over consumers as intimated by AEML-D to
TPC-D and remit the same to AEML-D.
Commission’s Analysis and Ruling
The Commission recognises that there is an issue of recovery of the amount against
consumption recorded on the meter from the date of change-over application till
disconnection, which is read during actual reverse change over and billed in the Final Bill.
A similar concern has been raised by TPC-D also. Hence, there is a need to alleviate the
genuine concerns of the Distribution Licensees on this matter.
The Commission rules that change-over consumers shall have to pay such balance amount
to the new Licensee, who shall remit the same to the original Licensee. The new Licensee
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is thus, authorised to bill such amount to the change-over consumer and remit the amount
to the earlier Licensee against collection.
Time of Day (ToD) Tariff
AEML-D's Submission
Based on the FY 2018-19 sales, only 25% of the consumption is subjected to ToD billing.
AEML has undertaken a detailed study of the overall system level demand pattern to study
the effectiveness of the current ToD slots. AEML-D has concluded that there is no need for
any change in ToD slots or the rates of discount / premium.
Commission’s Analysis and Ruling
In the past the Commission has followed centralized MoD approach and standardised ToD
timeslots and rates. The existing ToD structure matches with the rates prevalent in the
Power Exchange, i.e., ToD rate is high when Power Exchange power is costly and ToD rate
is low when Power Exchange power is cheaper. From 1 April 2020, the State is shifting to
decentralized MoD under the DSM framework, and each DISCOM has to plan its power
procurement as per its load curve. Hence, the ToD structure can be different for each
DISCOM.
Also, RPO Regulations for the next Control Period envisages substantial increase in Solar
power, which will be helping the load curve as it shall be contributing to meet the day time
3.08
2.79 2.61
2.48 2.47 2.65
2.96 3.11 3.03 3.11 3.05 2.98
2.85 2.70
2.82 3.01 3.09 3.14
3.55
4.18 4.11 3.91
3.72
3.35
(1.50)
-
0.80
-
1.10
(1.50)
(2.00)
(1.00)
-
1.00
2.00
3.00
4.00
5.00
-1000
-500
0
500
1000
1500
2000
2500
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Mumbai Discoms-TOD Analysis
Load in MW (TPC) Load in MW (APML) Load in MW (Best) PX Price ToD Rate
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peak load requirement. Such RE projects would be commissioned in the next couple of
years. Hence, at the time of MTR, the Commission would be better placed to revise the
ToD timeslots and rates as per DISCOM’s power procurement planning. The Commission
may also consider having seasonal ToD rate in order to assist the DISCOMs to absorb
seasonal variation in RE generation which as per RPO Regulations, 2019 would be 25% in
FY 2024-25.
Therefore, for the time being, the Commission is not making any changes in ToD tariff
structure but directs the Distribution Licensee to come with a detailed proposal at the time
of MTR. The Commission has retained the existing ToD time slots and ToD tariffs for
AEML-D. Further, the ToD rates in kVAh terms for HT category have not been multiplied
by the Power Factor, in order to ensure rounded numbers. Hence, the ToD rates are same
in Rs/kWh terms for LT categories and in Rs/kVAh terms for HT categories.
Strict Adherence to Tariff Schedule
AEML-D's Submission
AEML-D submits that there are instances in the past where the parallel Distribution
Licensee, i.e., TPC-D has not adhered to the Tariff Schedule stipulated in the Tariff Orders
to provide electricity connection. There are tariff categories such as LT II(b) – Commercial
(20 – 50 kW) where TPC-D tariff is lower than AEML-D tariff, whereas there are other
tariff categories such as LT II(a) – Commercial (0 – 20 kW) where the TPC-D tariff is
higher than AEML-D tariff. In one such instance, TPC-D provided electricity connection
to a certain consumer under LT II(b) – Commercial (20 – 50 kW) category, even though
the consumer belonged to LT II(a) – Commercial (0 – 20 kW). The Commission should
issue strict directions for adherence to Tariff Schedule and categorization stipulated in the
Tariff Orders and to provide electricity connection to consumers under the relevant category
only, even if the tariff for the category is higher than the other category.
Commission’s Analysis and Ruling
The Commission is of the view that this issue is not the subject matter of this Petition. If
AEML-D feels that such an event has been taken place, AEML-D may approach the
appropriate authority separately with detailed facts and figures and supporting documents
in this regard.
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Uniform Tariff for EV Charging Stations
AEML-D's Submission
The Commission in the MTR Orders of AEML-D and TPC-D had approved uniform tariff
for EV Charging Stations. AEML-D requested the Commission to approve uniform tariff
for EV charging stations for both AEML-D and TPC-D, like the MTR Orders
Commission’s Analysis and Ruling
The Commission has approved uniform tariffs for EV Charging Station for AEML-D and
TPC-D.
6.13 COMMISSION’S TARIFF PHILOSOPHY
The Commission’s views on each aspect of Tariff Philosophy are detailed below.
The Commission has considered the main objectives of the Electricity Act, 2003 (“EA,
2003”) including the protection of the interest of consumers, the supply of electricity to all
areas and rationalisation of tariffs. The EA, 2003 also enjoins the Commission to maintain
a healthy balance between the interest of the Utilities and the reasonableness of the cost of
power being supplied to consumers. The Commission has also kept in view the principles
of tariff determination set out in Sections 61 and Section 62 of the EA, 2003, the Tariff
Policy, 2016 and the MYT Regulations, 2019, and also taken into consideration AEML-
D’s submissions as well as the Public responses in these MYT proceedings.
Apart from tariff levels, the complexity of the tariff structure plays an important role in
building transparency and limiting the discretionary power of Distribution Licensees
(Discoms). A simpler tariff structure helps easy understanding by consumers and on the
other hand, creation of many different categories gives discretionary power to Discoms
while charging tariffs.
It is felt that the tariff structure across the States has become very complex and there is a
need to not only simplify and rationalize the tariff structure, but also to make it harmonious
across States. Draft proposed Amendments to Tariff Policy suggests that new tariff
structure should have maximum five categories having different slabs in Sanction Load and
units consumed. It also suggests to provide rebate to incentivise bulk customers to take
power at higher voltage category, adopt kW and kWh or kVA and kVAh based tariff linked
to the load, create EV category, etc. among other suggestions.
As a progressive step towards simpler and rationalized tariff structure, the Commission
intends to reduce the number of categories from the existing tariff structure. The
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Commission is aware that AEML-D has not proposed many changes in tariff structure
except kVAh billing for HT category, separate category for EHV, separate determination
of Wheeling Charges and Supply Tariffs, and hence, no indication has been given to public
for any other changes in the tariff structure.
The Hon’ble Appellate Tribunal of Electricity (APTEL), vide its Order in Appeal No. 106
of 2008, has ruled that the Commission has the power to design the tariff as per its own
wisdom. It also mentions that the Commission does not need to seek public comments
before announcement of the tariff. The relevant part of the APTEL Order in Appeal No.
106 of 2008 is reproduced below:
“…
14) It is not the case of the appellant that the Commission had no power to create a
tariff design different from the one proposed by the licensee. The Commission has the
power to design the tariff as per its own wisdom. The Commission need not, before
issuing the actual order, publicly announce the tariff it proposed and call for public
comments. In fact this is not even the appellant’s contention.
15) The rule of natural justice requires the Commission to issue a public notice about
the ARR and Tariff petition of the licensee and to allow the public to make its
submissions on the ARR and Tariff proposals. The Commission has, thereafter, to
design the scheme for recovery of the ARR keeping in view various relevant factors. If
the classification of the consumers can be supported on any of the grounds mentioned
in section 62(3) it would not be proper to say that the tariff fixing was violative of
principles of natural justice because the Commission did not issue a public notice of
the tariff categories which the Commission had intended to create.
…”
In the present tariff structure of AEML-D, there are 8 number of consumer categories and
9 number of consumer sub-categories for HT consumers and 11 number of consumer
categories and 17 number of consumer sub-categories for LT consumers. In view of the
above, the Commission intends to reduce the number of categories. The Commission has
analysed existing consumer categories and identified certain consumer categories, which
can be merged with other existing categories so as to progress towards achieving the
objectives set out in the draft Tariff Policy and at the same time ensuring that the impact of
such merging of categories is either minimal or limited to very few consumers / less sales
quantum. The number of consumers and sales of identified consumer categories are as
under:
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Table 6-56: Consumer and sales details for categories identified for merging by the
Commission
Category
FY 2020-21 (Projected)
No. of
Consumers
Sales
(MU)
HT IV- PWW 8 8.13
HT-VII Temporary Supply 7 19.30
LT-IV PWW 148 12.77
LT - V Advertisement & Hoardings 1,124 3.04
LT - VI Street Lights 238 52.30
LT - VII (a) Temporary Supply Religious 40 1.82
LT - VII (b) Temporary Supply Others 726 10.43
LT - VIII Crematorium and Burial Grounds 62 1.41
Merging or elimination of existing consumer categories can be done considering the End
Use, Energy Consumption, Socio-Economic Profile, Consumption Pattern/ Loan Factor,
etc. These factors have been examined by the Commission while deciding on merging of
categories.
6.13.1 Merging of HT IV – PWW and Sewage Treatment Plants into HT VI (B) –
Public Services (Others)
HT IV – PWW and HT VI (B) – Public Services (Others) consumer categories have
consumers, which serve the public in general. Considering the similar nature of end use,
these categories are merged. Accordingly, the Commission merges the HT IV – PWW
category into HT VI (B) – Public Services (Others) as the latter category has broader
coverage of consumers who are into providing Public Services. The tariff differential is also
not very significant in these two categories and hence, the impact of merging will be limited.
6.13.2 Merging of HT VII – Temporary Supply into HT II – Commercial
HT VII – Temporary supply has around 7 number of consumers with sale of 19.30 MU. HT
VII – Temporary supply is not associated with any particular type of end usage as it is
temporary in nature. As the electricity supply under HT VII – Temporary supply category
is used for purposes, which are similar to those in the HT II Commercial category, the
Commission has merged the HT VII – Temporary Supply into HT II – Commercial.
However, in order to maintain the difference in rate on account of nature of supply, i.e.,
Temporary vs. Permanent supply, Temporary supply consumer shall pay 1.5 times the
Fixed Charges and 1.25 times the Energy Charges applicable for the category.
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6.13.3 Merging of LT IV – PWW into LT IX (B) – Public Services (Others)
LT IV – PWW and LT IX (B) – Public Services (Others) categories have consumers, which
serve the public in general. Considering the similar nature of end use, these categories are
merged. Accordingly, the Commission merges the LT IV – PWW into LT IX (B) – Public
Services (Others) as the latter category has broader coverage of consumers who are into
Public Services.
6.13.4 Merging of LT V – Advertisement & Hoardings into LT II – Commercial
LT V – Advertisement & Hoardings and LT II – Commercial category of consumers are
involved in similar end use, i.e., commercial activities. As both have similar end use, the
Commission merges the LT V – Advertisement & Hoardings into LT II – Commercial as
the latter one has broader coverage of consumers who are into Commercial activities.
6.13.5 Merging of LT VI – Street Light into LT IX (B) – Public Services (Others)
LT VI – Street Light and LT IX (B) – Public Services (Others) consumer categories have
consumers which serve the public in general. As both have similar end use, the Commission
merges the LT VI – Street Light into LT IX (B) – Public Services (Others) as the latter one
has broader coverage of consumers who are into Public Services.
6.13.6 Merging of LT VII (a) – Temporary Supply (Religious) into LT I (B) –
Residential
LT VII (a) – Temporary Supply (Religious) has around 40 number of consumers with sale
of 1.82 MU. LT VII (a) – Temporary Supply (Religious) is not associated with any
particular type of end usages as it is temporary in nature. As LT VII (a) – Temporary Supply
(Religious) category is consuming small quantum of energy, the Commission merges the
LT VII – Temporary Supply (Religious) into LT I (B) – Residential category. However, in
order to maintain difference in rate on account of nature of supply, i.e., Temporary vs.
Permanent supply, Temporary supply consumers shall pay 1.5 times the Fixed Charges.
6.13.7 Merging of LT VII (b) – Temporary Supply (Others) into LT II – Commercial
LT VII (b) – Temporary Supply (Others) has around 726 number of consumers with sale of
10.43 MU. LT VII (b) – Temporary Supply (Others) is not associated with any particular
type of end usages as it is temporary in nature. As the electricity supply under LT VII (b) –
Temporary Supply (Others) category is used for purposes which are similar to those in the
LT II Commercial category, the Commission merges the LT VII – Temporary Supply
(Others) into LT II – Commercial category. However, in order to maintain difference in rate
on account of nature of supply, i.e., Temporary vs. Permanent supply, Temporary supply
consumers shall pay 1.5 times the Fixed Charges and 1.25 times the Energy Charge
applicable for the category.
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6.13.8 Merging of LT VIII – Crematorium and Burial Grounds into LT I (B) –
Residential
LT VIII – Crematorium and Burial Grounds has around 62 number of consumers with sale
of 1.41 MU. LT VIII – Crematorium and Burial Grounds category of consumers are not
associated with any commercial or industrial activity. LT VIII – Crematorium and Burial
Grounds category is consuming small quantum of energy and it has tariff rates similar to
LT I (B) – Residential. In view of the same, the Commission merges the LT VIII –
Crematorium and Burial Grounds into LT I (B) – Residential.
6.13.9 Based on the above changes, the summary of the categories merged by the
Commission in this Order is given below:
Table 6-57: Summary of categories merged by the Commission
Sr.
No.
Existing Category Proposed Category
1 HT IV - Public Water Works and Sewerage
Treatment Plant
HT - Public Services (Others)
2 HT VII - Temporary Supply HT - Commercial
3 LT IV - Public Water Works and Sewerage
Treatment Plant
LT - Public Services (Others)
4 LT V - Advertisement and Hoardings LT - Non-Residential or Commercial
5 LT VI - Street Lights LT - Public Services (Others)
6 LT VII - Temporary Supply (Religious) LT - Residential
7 LT VII - Temporary Supply (Others) LT - Non-Residential or Commercial
8 LT VIII - Crematoriums and Burial Grounds LT - Residential
In addition, the Commission has also recategorized the following consumer classifications:
6.13.10Recategorization of Activities:
Independent R&D Units: These are presently categorised under Commercial Category. In
order to promote Research and Development, the Commission has categorised it under
Industrial Category
IT and ITeS Units: Under existing tariff structure, IT and ITeS units having registration
certificate under GoM’s IT and ITeS Policy are categorised under Industrial Category. The
APTEL in its Judgment dated 12 February, 2020 in Appeal No. 337 of 2016 & Others has
ruled that tariff categorisation cannot be based on any certification under Policy and it
should be based on criteria specified under Section 62 (3) of the Act. Accordingly, the
Commission has removed the requirement of having certification under GoM Policy for
claiming Industrial Tariff for IT and ITeS Units
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Hostels: Presently all Student Hostels are covered under Residential Category. All
Education Institutes are covered under Public Service category. Hence, it would be
appropriate to categories Hostels into Public Service Category. This will avoid subjecting
these Hostels at high tariff rate on account of telescopic tariff structure in Residential
Category.
Public Sanitary Conveniences: Presently all Public Sanitary Conveniences are covered
under Streetlight category. The Commission has merged the Streetlight category with the
‘Public Service Others’ category, as elaborated above. However, in view of the essential
nature of these facilities, and keeping in view the Government of India’s Swacch Bharat
campaign, the Commission has included Public Sanitary Conveniences under LT IV (A)
Public Service - Government Educational Institutions and Hospitals.
6.13.11Load Factor Incentives
In order to avoid misuse of Load factor Incentive, the Commission, in its Tariff Order, has
stipulated that if a consumer exceeds its Contract Demand on more than three occasions in
a Calendar Year, the Distribution Licensee may take corrective action of restating Contract
Demand as per Supply Code Regulations, 2005. However, as per provision of Supply Code
Regulation, 2005, Contract Demand can be restated only on receiving an application from
the consumer in this respect. The Commission has come across cases in other Distribution
Licensee area wherein consumers have refused to cooperate with the Distribution Licensee
for restating their Contract Demand.
In order to ensure secure operation of electricity grid, it is critical that every constituent of
the system acts within its assigned boundaries. Intentional violation of Contract Demand
limit by individual consumer for its own financial gain may lead to a system failure, which
may affect other consumers. Hence, the Commission is constrained to restrict the Load
Factor Incentive to only those consumers who do not exceed their Contract Demand during
the month.
Accordingly, the Commission rules that Load Factor Incentive shall not be applicable for
the month if the consumer exceeds its Contract Demand in that month. Consumers
exceeding Contract demand during the off-peak hours (2200 hrs to 0600 hrs) would also
not be eligible for Load factor Incentive for that month.
The Commission notes that the existing Formula stipulated in the Tariff Order for
calculation of Load factor presumes 60 hours of interruptions in a month. However, with
AMR/MRI enabled meters being installed for all HT consumers, actual hours of
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interruptions are recorded in the meter and are readily available at the time of processing of
monthly bill. Hence, in order to compute correct Load Factor, the Commission has changed
the Formula and included actual interruption hours recorded in the meter instead of
provision for 60 hours. In case of faulty meter, interruption hours in the meter shall not be
available, then interruption hours recorded on feeder meter shall be considered.
6.13.12Discount for Digital Payment
The Government of India has been encouraging digitization across various areas including
monetary transactions. To support the initiatives of the Government, a discount of 0.25%
of the monthly bill (excluding taxes and duties), subject to a cap of Rs. 500/- per month per
bill, shall be provided to LT category consumers for payment of electricity bills through
various modes of digital payment such as credit cards, debit cards, UPI, BHIM, internet
banking, mobile banking, mobile wallets, etc.
6.13.13Mode for communication
The Commission notes that the Hon’ble High Court of Judicature at Mumbai in its Order
in the matter of Notice No. 1148 of 2015 in Execution Application No. 1196 of 2015 dated
11 June, 2018 has taken on record the Whatsapp message sent to serve notice on the
Respondent and ruled that the same is sufficient for the purposes of service of Notice
The relevant portion of the Order is reproduced below:
“2. The Claimants have also learnt that the Respondent resides at
Nalasopara in a place which he seems to have taken on rent. The Claimant
will furnish the particulars of address so that a warrant, if necessary, can
be issued against him.
3. In the meantime, the present Notice is made absolute.
4. A print-out of the WhatsApp message is taken on record and marked “N”
for identification with today’s date. The second print out is of the WhatsApp
contact number of the Respondent. This shows his contact number. This is
also taken on record and marked “N2” for identification with today’s date.
This is sufficient for the purposes of service of Notice under Order XXI Rule
22.
5. By way of abandon caution and so that it remains a part of the record a
scan of the print outs is attached to this order as well.”
The Commission notes that serving of Notices to the consumers through digital medium
such as WhatsApp message, email, SMS etc. will not only be environmentally friendly and
save administrative cost but also free the human resources for other consumer service-
related works. Hence, the Commission allows the Distribution Licensee to issue notice
under Section 56 of the Electricity Act, 2003 through digital mode such as WhatsApp
message, email, SMS etc. The Licensee can also use the digital medium of communication
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for issuing other information to the consumers including information regarding billing,
outstanding payment, outage details, etc. There is also a need to create awareness regarding
this provision and accordingly, the consumer needs to be made aware of this by informing
him through various means of communication including messages on bills and other
publicity means.
6.13.14Stabilising variation in consumer bill on account of FAC
As per MYT Regulations, 2019, the aggregate gain or loss to a Distribution Licensee on
account of variation in cost of fuel, power purchase, and inter-State Transmission Charges
shall be passed through under the Fuel Adjustment Charge (FAC) component of the Z-
factor Charge (ZFAC), as an adjustment in its tariff on a monthly basis. Relevant part of the
MYT Regulations, 2019 is reproduced below:
“10.2 The aggregate gain or loss to a Distribution Licensee on account of variation in
cost of fuel, power purchase, and inter-State Transmission Charges, covered under
Regulation 9.1, shall be passed through under the Fuel Adjustment Charge (FAC)
component of the Z-factor Charge (ZFAC), as an adjustment in its Tariff on a monthly
basis, as specified in these Regulations and as may be determined in orders of the
Commission passed under these Regulations, and shall be subject to ex-post facto
approval by the Commission on a quarterly basis:…”
Similar arrangement of passing on variation in fuel and power purchase cost existed in all
earlier Tariff Regulations of the Commission. Such mechanism is in line with the provision
of the EA, 2003 which mandates recovery of the fuel cost in timely manner so that the
Distribution Licensees are able to recover their legitimate power purchase cost variation in
a timely manner. This has helped regular recovery of power purchase variations without
accumulating it till the next tariff revision. This provision also addresses the financial issues
of Distribution Licensee wherein the payments for power purchase are required to be made
in timely manner at an increased rate. At the same time, it also helped in reducing carrying
cost burden on consumer, which otherwise have to be borne, if instead of such monthly
levy, accumulated gap is recovered through annual tariff revision. Although, consumers are
also acquainted with this mechanism, there is a general and reasonable expectation that
once the tariff is approved by the Commission, to the extent possible, it should remain
consistent during the year and there should not be huge variations due to FAC. The
unknown variation in the tariff on account of FAC has adverse financial implications on all
the categories especially Industrial and Commercial categories where the impact of FAC is
generally higher. Variation in tariff is magnified when there is negative FAC leading to
reduction in tariff during a particular month and positive FAC in the immediate next month
thereby increasing the tariff.
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Variation in FAC is either on account of change in fuel related costs or mix of power
procurement. During the Public Hearing process on Tariff Petitions of Distribution
Licensees in the State, many suggestions were received on this issue and the consumers
requested that a mechanism be put in place wherein there is a minimum impact of FAC.
The Commission opines that this is a very reasonable expectation of the consumers. To
alleviate this issue to the extent possible and to minimise the impact of FAC, the
Commission, while approving this Tariff Order, has built-in annual fuel cost escalation.
The Commission is fully aware that in spite of approving this annual escalation rate, the
possibility of FAC cannot be ruled out completely since change in power procurement mix
on account of changing sales may lead to FAC besides change in rate of power procurement
in future years. To achieve this stabilisation of tariffs to the extent possible, and to minimise
the variation in FAC, the Commission thinks it fit to approve FAC Fund with Distribution
Licensee which can be built up over a period of time and be used for payment of FAC bills
of Generating Companies without immediately loading it on consumers.
Therefore, using its powers for Removing Difficulty under Regulation 106 of the MYT
Regulations, 2019, the Commission is making following changes in the FAC mechanism
specified under Regulation 10 of the MYT Regulations, 2019:
a. Distribution Licensee shall undertake computation of monthly FAC as per Regulation
10 of the MYT Regulations, 2019 except for treatment to be given to negative FAC
as follows:
(i) Negative FAC amount shall be carried forward to the next FAC billing cycle
with holding cost;
(ii) Such carried forward negative FAC shall be adjusted against FAC amount for
the next month and balance negative amount shall be carried forward to
subsequent month with holding cost;
(iii) Such carry forward of negative FAC shall be continued till the accumulated
negative FAC becomes 20% of monthly tariff revenue approved by the
Commission in Tariff Order. In case of AEML-D, such limit shall be Rs. 110
crore. Any accumulated amount above such limit shall be refunded to
consumers through FAC mechanism;
(iv) In case such FAC Fund is yet to be generated or such generated fund is not
sufficient to adjust against FAC computed for given month, then Distribution
Licensee can levy such amount to the consumers through FAC mechanism.
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In order to maintain transparency in management and use of such FAC Fund, the
Distribution Licensee shall maintain monthly account of such FAC fund and upload it on
its website for information of stakeholders. Further, till date, the Distribution Licensees
have been levying FAC up to the prescribed limit of 20% of variable component of tariff
without prior approval in accordance with the MYT Regulations, 2015, and submitting the
FAC computations on a quarterly basis within 60 days of the close of each quarter, for post
facto approval. However, as the Commission has created a FAC fund as stated above to
address the increase in fuel prices and power purchase costs, the Commission has modified
the FAC mechanism such that the Distribution Licensees shall submit the FAC
computations on a monthly basis for prior approval, irrespective of whether FAC is
chargeable in a month or whether some amount is accruing to the Fund on account of
negative FAC. This will ensure that the FAC mechanism is implemented with the changes
as desired by the Commission, and the consumers are not levied FAC without prior
approval.
The details of the FAC as per the Regulations, shall be submitted by the 15th of every month
prior to the month in which the FAC is proposed to be levied and the Commission will
endeavour to decide on the same within 10 days so that the same can be levied from the 1st
of the subsequent month. This prior approval will facilitate the addressing of any difficulties
that may arise in giving effect to this fund. All the details will be submitted by the
Distribution Licensee as is being done for approval of FAC on post facto basis. Thus, the
FAC to the consumers shall now be levied with prior approval of the Commission.
Based on the experience of implementing this mechanism, during the MTR Process, the
Commission may decide to discontinue with prior approval process.
6.13.15Regulatory Asset Charge
AEML-D's Submission
AEML-D has not proposed any Regulatory Asset Charge (RAC) for the next Control
Period.
Commission's Analysis and Ruling
RAC was created in earlier Tariff Orders to address certain specific compulsions. The
Commission had indicated in the MTR Order that the RAC was in place till FY 2019-20.
AEML-D is expected to have surplus recovery against RAC, as stated earlier. Hence, there
is no requirement of creation of RAC in the present MYT Order.
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6.14 REVISED TARIFF FOR THE CONTROL PERIOD
AEML-D's Submission
AEML-D has proposed the Tariff applicable for each year of the Control Period, which
have not been reproduced below.
Commission's Analysis and Ruling
The Commission has continued to determine the tariffs with an in-built incentive to
consumers to reduce their consumption. The billing impact is designed to increase as the
consumption increases on account of the higher telescopic tariffs applicable to higher
consumption slabs, while at the same time ensuring that even consumers in the higher
consumption slabs are charged at a lower rate to the extent of the consumption
corresponding to lower slabs.
As mentioned previously, the Commission has attempted to bring the tariff of most of the
categories in the ± 20% of ACoS range as prescribed by the Tariff Policy. Further, the
Commission has also tried to ensure that the level cross-subsidy either remains constant or
reduces in the subsequent year so as to steadily approach the ACoS as envisaged in the
Tariff Policy.
The approved category-wise tariffs for the period from FY 2020-21 to FY 2024-25 are
given in the Tables below:
6.15 REVISED TARIFFS EFFECTIVE FROM 1 APRIL, 2020 (FY 2020-21)
Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kWh)
Wheeling
Charges (Rs /
kWh)
LT Category
1 LT I (A)- Below Poverty Line Rs. 10 1.00 1.57
2 LT -I (B) Residential
0-100 Rs. 70 $$ 2.90 1.57
101-300 Rs. 110 $$
4.85 1.57
301-500 6.65 1.57
500 and above Rs. 135 $$ 7.80 1.57
3 LT II - LT Commercial
(A) ≤ 20 kW load Rs. 385 5.70 1.57
(B) > 20 kW and ≤ 50 kW load Rs. 320 per kVA
6.05 1.57
(C) > 50 kW load 6.55 1.57
4 LT III - LT Industry
(A) Upto 20 kW load Rs. 385 5.55 1.57
(B) Above 20 kW Rs. 320 per kVA 5.95 1.57
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Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kWh)
Wheeling
Charges (Rs /
kWh)
5 LT IV – Public Services
(A) Government Hospitals & Educational
Institutions Rs 385 5.60 1.57
(B) Others Rs 385 6.00 1.57
6 LT V - Agriculture
(A) Pumpsets Rs 40 per HP 3.80 1.57
(B) Others Rs. 90 per kW 5.30 1.57
7 LT VI: Electric Vehicle Charging
Stations (New Category) Rs. 70 per kVA 3.93 1.57
TOD Tariffs (in addition to above base
tariffs) – compulsory for LT II (B) and
(C), LT III (B), and LT IV (A) and (B),
and optional for LT II (A) and LT III
(A) categories
0600 hours to 0900 hours 0.00
0900 hours to 1200 hours 0.50
1200 hours to 1800 hours 0.00
1800 hours to 2200 hours 1.00
2200 hours to 0600 hours -0.75
Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kVAh)
Wheeling
Charges (Rs /
kVAh)
33 kV Category
1 HT IV - HT Railways, Metro &
Monorail Rs. 320 per kVA 5.55 0.70
11 kV Category
2 HT I: HT-Industry Rs. 320 per kVA 5.90 0.70
3 HT II: HT- Commercial Rs. 320 per kVA 6.23 0.70
4 HT III: HT-Group Housing Society Rs. 320 per kVA 6.19 0.70
5 HT V (A): Public Service - Government
Hospitals & Educational Institutions Rs. 320 per kVA 5.61 0.70
6 HT V (B): Public Service - Others Rs. 320 per kVA 6.24 0.70
7 HT VI: Electric Vehicle Charging
Stations Rs. 70 per kVA 4.61 0.70
TOD Tariffs (in addition to above base
tariffs) for all EHT Categories, and HT
I, HT II, HT V (A) and (B), and HT VI
categories
0600 hours to 0900 hours 0.00
0900 hours to 1200 hours 0.50
1200 hours to 1800 hours 0.00
1800 hours to 2200 hours 1.00
2200 hours to 0600 hours -0.75
Notes:
1. Fuel Adjustment Cost will be applicable to all consumers and will be charged over the
above tariffs, on the basis of the FAC formula specified by the Commission, and
computed on a monthly basis.
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2. $$: Fixed Charge of Rs. 135 per month will be levied on residential consumers availing
3 phase supply. Additional Fixed Charge of Rs. 135 per 10 kW load or part thereof
above 10 kW load shall be payable.
3. $$$: Additional Fixed Charge of Rs. 250 per 10 kW load or part thereof above 10 kW
load shall also be payable.
6.16 REVISED TARIFFS EFFECTIVE FROM 1 APRIL, 2021 (FY 2021-22)
Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kWh)
Wheeling
Charges (Rs /
kWh)
LT Category
1 LT I (A)- Below Poverty Line Rs. 10 1.00 1.46
2 LT -I (B) Residential
0-100 Rs. 75 $$ 3.05 1.46
101-300 Rs. 115 $$
5.00 1.46
301-500 6.65 1.46
500 and above Rs. 140 $$ 7.80 1.46
3 LT II - LT Commercial
(A) ≤ 20 kW load Rs. 405 5.65 1.46
(B) > 20 kW and ≤ 50 kW load Rs. 335 per kVA
6.05 1.46
(C) > 50 kW load 6.60 1.46
4 LT III - LT Industry
(A) Upto 20 kW load Rs. 405 5.55 1.46
(B) Above 20 kW Rs. 335 per kVA 5.95 1.46
5 LT IV – Public Services
(A) Government Hospitals & Educational
Institutions Rs 405
5.60 1.46
(B) Others Rs 405 6.00 1.46
6 LT V - Agriculture
(A) Pumpsets Rs 40 per HP 3.80 1.46
(B) Others Rs. 90 per kW 5.30 1.46
7 LT VI: Electric Vehicle Charging
Stations (New Category) Rs. 70 per kVA 4.04 1.46
TOD Tariffs (in addition to above base
tariffs) – compulsory for LT II (B) and
(C), LT III (B), and LT IV (A) and (B),
and optional for LT II (A) and LT III
(A) categories
0600 hours to 0900 hours 0.00
0900 hours to 1200 hours 0.50
1200 hours to 1800 hours 0.00
1800 hours to 2200 hours 1.00
2200 hours to 0600 hours -0.75
Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kVAh)
Wheeling
Charges (Rs /
kVAh)
33 kV Category
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 383 of 445
Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kVAh)
Wheeling
Charges (Rs /
kVAh)
1 HT IV - HT Railways, Metro &
Monorail Rs. 335 per kVA 5.36 0.65
11 kV Category
2 HT I: HT-Industry Rs. 335 per kVA 5.90 0.65
3 HT II: HT- Commercial Rs. 335 per kVA 6.23 0.65
4 HT III: HT-Group Housing Society Rs. 335 per kVA 6.19 0.65
5 HT V (A): Public Service - Government
Hospitals & Educational Institutions Rs. 335 per kVA 5.61 0.65
6 HT V (B): Public Service - Others Rs. 335 per kVA 6.24 0.65
7 HT VI: Electric Vehicle Charging
Stations Rs. 70 per kVA 4.66 0.65
TOD Tariffs (in addition to above base
tariffs) for all EHT Categories, and HT
I, HT II, HT V (A) and (B), and HT VI
categories
0600 hours to 0900 hours 0.00
0900 hours to 1200 hours 0.50
1200 hours to 1800 hours 0.00
1800 hours to 2200 hours 1.00
2200 hours to 0600 hours -0.75
Notes:
1. Fuel Adjustment Cost will be applicable to all consumers and will be charged over the
above tariffs, on the basis of the FAC formula specified by the Commission, and
computed on a monthly basis.
2. $$: Fixed Charge of Rs. 140 per month will be levied on residential consumers availing
3 phase supply. Additional Fixed Charge of Rs. 140 per 10 kW load or part thereof
above 10 kW load shall be payable.
3. $$$: Additional Fixed Charge of Rs. 250 per 10 kW load or part thereof above 10 kW
load shall also be payable.
6.17 REVISED TARIFFS EFFECTIVE FROM 1 APRIL, 2022 (FY 2022-23)
Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kWh)
Wheeling
Charges (Rs /
kWh)
LT Category
1 LT I (A)- Below Poverty Line Rs. 10 1.00 1.47
2 LT -I (B) Residential
0-100 Rs. 80 $$ 3.05 1.47
101-300 Rs. 120 $$
5.00 1.47
301-500 6.70 1.47
500 and above Rs. 145 $$ 7.80 1.47
3 LT II - LT Commercial
(A) ≤ 20 kW load Rs. 425 5.45 1.47
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 384 of 445
Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kWh)
Wheeling
Charges (Rs /
kWh)
(B) > 20 kW and ≤ 50 kW load Rs. 355 per kVA
6.00 1.47
(C) > 50 kW load 6.55 1.47
4 LT III - LT Industry
(A) Upto 20 kW load Rs. 425 5.55 1.47
(B) Above 20 kW Rs. 355 per kVA 5.95 1.47
5 LT IV – Public Services
(A) Government Hospitals & Educational
Institutions Rs. 425 5.60 1.47
(B) Others Rs. 425 6.00 1.47
6 LT V - Agriculture
(A) Pumpsets Rs 40 per HP 3.80 1.47
(B) Others Rs. 90 per kW 5.30 1.47
7 LT VI: Electric Vehicle Charging
Stations (New Category) Rs. 70 per kVA 4.03 1.47
TOD Tariffs (in addition to above base
tariffs) – compulsory for LT II (B) and
(C), LT III (B), and LT IV (A) and (B),
and optional for LT II (A) and LT III
(A) categories
0600 hours to 0900 hours 0.00
0900 hours to 1200 hours 0.50
1200 hours to 1800 hours 0.00
1800 hours to 2200 hours 1.00
2200 hours to 0600 hours -0.75
Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kVAh)
Wheeling
Charges (Rs /
kVAh)
33 kV Category
1 HT IV - HT Railways, Metro &
Monorail Rs. 355 per kVA 5.55 0.66
11 kV Category
2 HT I: HT-Industry Rs. 355 per kVA 5.85 0.66
3 HT II: HT- Commercial Rs. 355 per kVA 6.09 0.66
4 HT III: HT-Group Housing Society Rs. 355 per kVA 5.99 0.66
5 HT V (A): Public Service - Government
Hospitals & Educational Institutions Rs. 355 per kVA 5.61 0.66
6 HT V (B): Public Service - Others Rs. 355 per kVA 6.04 0.66
7 HT VI: Electric Vehicle Charging
Stations Rs. 70 per kVA 4.66 0.66
TOD Tariffs (in addition to above base
tariffs) for all EHT Categories, and HT
I, HT II, HT V (A) and (B), and HT VI
categories
0600 hours to 0900 hours 0.00
0900 hours to 1200 hours 0.50
1200 hours to 1800 hours 0.00
1800 hours to 2200 hours 1.00
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 385 of 445
Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kVAh)
Wheeling
Charges (Rs /
kVAh)
2200 hours to 0600 hours -0.75
Notes:
1. Fuel Adjustment Cost will be applicable to all consumers and will be charged over the
above tariffs, on the basis of the FAC formula specified by the Commission, and
computed on a monthly basis.
2. $$: Fixed Charge of Rs. 145 per month will be levied on residential consumers availing
3 phase supply. Additional Fixed Charge of Rs. 145 per 10 kW load or part thereof
above 10 kW load shall be payable.
3. $$$: Additional Fixed Charge of Rs. 250 per 10 kW load or part thereof above 10 kW
load shall also be payable.
6.18 REVISED TARIFFS EFFECTIVE FROM 1 APRIL, 2023 (FY 2023-24)
Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kWh)
Wheeling
Charges (Rs /
kWh)
LT Category
1 LT I (A)- Below Poverty Line Rs. 10 1.00 1.48
2 LT -I (B) Residential
0-100 Rs. 85 $$ 2.95 1.48
101-300 Rs. 125 $$
4.90 1.48
301-500 6.75 1.48
500 and above Rs. 155 $$ 7.85 1.48
3 LT II - LT Commercial
(A) ≤ 20 kW load Rs. 450 5.45 1.48
(B) > 20 kW and ≤ 50 kW load Rs. 375 per kVA
5.95 1.48
(C) > 50 kW load 6.50 1.48
4 LT III - LT Industry
(A) Upto 20 kW load Rs. 450 5.45 1.48
(B) Above 20 kW Rs. 375 per kVA 5.90 1.48
5 LT IV – Public Services
(A) Government Hospitals & Educational
Institutions Rs. 450 5.60 1.48
(B) Others Rs. 450 6.00 1.48
6 LT V - Agriculture
(A) Pumpsets Rs 40 per HP 3.80 1.48
(B) Others Rs. 90 per kW 5.30 1.48
7 LT VI: Electric Vehicle Charging
Stations (New Category) Rs. 70 per kVA 4.02 1.48
TOD Tariffs (in addition to above base
tariffs) – compulsory for LT II (B) and
(C), LT III (B), and LT IV (A) and (B),
and optional for LT II (A) and LT III
(A) categories
0600 hours to 0900 hours 0.00
0900 hours to 1200 hours 0.50
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 386 of 445
Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kWh)
Wheeling
Charges (Rs /
kWh)
1200 hours to 1800 hours 0.00
1800 hours to 2200 hours 1.00
2200 hours to 0600 hours -0.75
Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kVAh)
Wheeling
Charges (Rs /
kVAh)
33 kV Category
1 HT IV - HT Railways, Metro &
Monorail Rs. 375 per kVA 5.46 0.66
11 kV Category
2 HT I: HT-Industry Rs. 375 per kVA 5.80 0.66
3 HT II: HT- Commercial Rs. 375 per kVA 6.04 0.66
4 HT III: HT-Group Housing Society Rs. 375 per kVA 5.99 0.66
5 HT V (A): Public Service - Government
Hospitals & Educational Institutions Rs. 375 per kVA 5.43 0.66
6 HT V (B): Public Service - Others Rs. 375 per kVA 6.04 0.66
7 HT VI: Electric Vehicle Charging
Stations Rs. 70 per kVA 4.66 0.66
TOD Tariffs (in addition to above base
tariffs) for all EHT Categories, and HT
I, HT II, HT V (A) and (B), and HT VI
categories
0600 hours to 0900 hours 0.00
0900 hours to 1200 hours 0.50
1200 hours to 1800 hours 0.00
1800 hours to 2200 hours 1.00
2200 hours to 0600 hours -0.75
Notes:
1. Fuel Adjustment Cost will be applicable to all consumers and will be charged over the
above tariffs, on the basis of the FAC formula specified by the Commission, and
computed on a monthly basis.
2. $$: Fixed Charge of Rs. 155 per month will be levied on residential consumers availing
3 phase supply. Additional Fixed Charge of Rs. 155 per 10 kW load or part thereof
above 10 kW load shall be payable.
3. $$$: Additional Fixed Charge of Rs. 250 per 10 kW load or part thereof above 10 kW
load shall also be payable.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 387 of 445
6.19 REVISED TARIFFS EFFECTIVE FROM 1 APRIL, 2024 (FY 2024-25)
Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kWh)
Wheeling
Charges (Rs /
kWh)
LT Category
1 LT I (A)- Below Poverty Line Rs. 10 1.00 1.48
2 LT -I (B) Residential
0-100 Rs. 90 $$ 2.90 1.48
101-300 Rs. 130 $$
4.90 1.48
301-500 6.75 1.48
500 and above Rs. 165 $$ 7.85 1.48
3 LT II - LT Commercial
(A) ≤ 20 kW load Rs. 475 5.40 1.48
(B) > 20 kW and ≤ 50 kW load Rs. 395 per kVA
5.95 1.48
(C) > 50 kW load 6.50 1.48
4 LT III - LT Industry
(A) Upto 20 kW load Rs. 475 5.45 1.48
(B) Above 20 kW Rs. 395 per kVA 5.90 1.48
5 LT IV – Public Services
(A) Government Hospitals & Educational
Institutions Rs. 475 5.60 1.48
(B) Others Rs. 475 6.00 1.48
6 LT V - Agriculture
(A) Pumpsets Rs 40 per HP 3.80 1.48
(B) Others Rs. 90 per kW 5.30 1.48
7 LT VI: Electric Vehicle Charging
Stations (New Category) Rs. 70 per kVA 4.02 1.48
TOD Tariffs (in addition to above base
tariffs) – compulsory for LT II (B) and
(C), LT III (B), and LT IV (A) and (B),
and optional for LT II (A) and LT III
(A) categories
0600 hours to 0900 hours 0.00
0900 hours to 1200 hours 0.50
1200 hours to 1800 hours 0.00
1800 hours to 2200 hours 1.00
2200 hours to 0600 hours -0.75
Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kVAh)
Wheeling
Charges (Rs /
kVAh)
33 kV Category
1 HT V (B) - HT Railways, Metro &
Monorail Rs. 395 per kVA 5.46 0.66
11 kV Category
2 HT I: HT-Industry Rs. 395 per kVA 5.80 0.66
3 HT II: HT- Commercial Rs. 395 per kVA 6.04 0.66
4 HT III: HT-Group Housing Society Rs. 395 per kVA 5.99 0.66
5 HT IV (A): Public Service - Government
Hospitals & Educational Institutions Rs. 395 per kVA 5.43 0.66
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 388 of 445
Sl.
No
Consumer Category & Consumption
Slab
Fixed/ Demand
Charge per
month
Energy
Charge
(Rs/kVAh)
Wheeling
Charges (Rs /
kVAh)
6 HT IV (B): Public Service - Others Rs. 395 per kVA 6.14 0.66
7 HT V: Electric Vehicle Charging
Stations Rs. 90 per kVA 4.66 0.66
TOD Tariffs (in addition to above base
tariffs) for all EHT Categories, and HT
I, HT II, HT V (A) and (B), and HT VI
categories
0600 hours to 0900 hours 0.00
0900 hours to 1200 hours 0.50
1200 hours to 1800 hours 0.00
1800 hours to 2200 hours 1.00
2200 hours to 0600 hours -0.75
Notes:
1. Fuel Adjustment Cost will be applicable to all consumers and will be charged over the
above tariffs, on the basis of the FAC formula specified by the Commission, and
computed on a monthly basis.
2. $$: Fixed Charge of Rs. 165 per month will be levied on residential consumers availing
3 phase supply. Additional Fixed Charge of Rs. 165 per 10 kW load or part thereof
above 10 kW load shall be payable.
3. $$$: Additional Fixed Charge of Rs. 250 per 10 kW load or part thereof above 10 kW
load shall also be payable.
The detailed computation of category-wise revenue with revised tariffs for FY 2020-21 to
FY 2024-25 is set out at Annexure I of this Order.
The approved Tariff Schedule for the MYT Control Period from FY 2020-21 to FY 2024-
25 is given at Annexure II of this Order.
6.20 GRID SUPPORT CHARGES
AEML-D’s Submission
AEML submitted that when a consumer opts for Rooftop Solar PV under Net Metering, it
causes a loss of revenue to the Licensee to the extent of energy not supplied and against the
same, the Licensee also avoids purchase of power. The difference between the two would
encompass the entire loss suffered by the Licensee and against the same the Licensee
realises the benefit of RPO and reduction of distribution losses due to supply being met
from embedded generation.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 389 of 445
Accordingly, AEML-D has proposed that the total losses and benefits on account of a Net
Metering connection should be worked out as below:
Loss to Licensee (Rs/kWh) = Average Billing Rate for category (Rs/kWh – Avoided Power
Purchase cost (Rs/kWh)
Benefits to Licensee = RPO benefit + avoidance of Transmission & Distribution loss
Grid Support charges based on above approach will offer the advantage of being simplistic
and easy to apply and does not suffer from any subjectivity as the figures for working out
the above would be readily available from the Tariff Order itself.
Accordingly, AEML-D has computed the following Grid Support Charges for Net Metering
systems:
Table 6-58: Proposed Grid Support Charges for FY 2020-21 to FY 2024-25
Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
HT Category
HT I: HT-Industry 2.75 1.84 1.88 1.91 1.96
HTII: HT- Commercial 2.81 1.92 1.93 2.00 2.03
HT III: HT-Group Housing
Society 2.23 1.16 1.07 1.00 0.89
HT IV: HT -Public Water
Works 2.46 1.46 1.41 1.39 1.38
HT V - HT Metro & Monorail 2.98 2.04 2.06 2.12 2.12
HT VI (a):PS - Govt. EI &
Hospitals 2.62 1.66 1.74 1.78 1.78
HT VI (b):PS - Others 2.32 1.45 1.47 1.59 1.62
HT VII: Temporary Supply 3.34 2.52 2.55 2.59 2.65
LT Category
LT I - Below Poverty Line 0.43 0.18 0.29 0.31 0.30
LT -I Residential (Single
Phase)
0-100 0.39 0.00 0.07 0.21 0.31
101-300 4.25 3.35 3.58 3.77 3.96
301-500 5.26 4.25 4.52 4.61 4.74
500and above 7.09 5.90 6.05 6.26 6.38
LT -I Residential Three phase
0-100 0.20 0.00 0.00 0.13 0.30
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 390 of 445
Particulars FY 2020-
21
FY 2021-
22
FY 2022-
23
FY 2023-
24
FY 2024-
25
101-300 3.56 2.59 2.78 2.96 3.16
301-500 4.88 3.85 4.12 4.21 4.37
500and above 6.62 5.35 5.43 5.58 5.65
LT II (a) - 0-20 kW 4.29 3.33 3.53 3.65 3.79
LT II (b) - 20-50 kW 3.76 2.87 3.03 3.15 3.24
LT II (c) - above 50 kW 3.98 3.02 3.16 3.26 3.31
LT III (a) - LT Industrial upto
20 kW 3.39 2.50 2.62 2.64 2.65
LT III (b) - LT Industrial above
20 kW 3.76 2.87 3.01 2.72 2.82
LT IV - Public Water Works 3.55 2.66 2.79 2.90 3.03
LT-V: LT- Advertisements and
Hoardings 5.35 4.22 4.47 4.57 4.74
LT VI: LT -Street Lights 3.71 2.78 2.95 3.09 3.26
LT-VII (A): LT -Temporary
Supply Religious 2.87 2.06 2.15 2.25 2.41
LT-VII (B): LT -Temporary
Supply Others 3.83 2.96 3.18 3.36 3.50
LT VIII: LT - Crematorium &
Burial Grounds 2.10 1.35 1.50 1.59 1.67
LT IX (a): PS - Govt. EI &
Hospitals 2.92 2.13 2.34 2.44 2.58
LT IX (b): PS - Others 3.52 2.62 2.82 2.92 3.00
LT X (a): Agriculture -
Pumpsets 0.59 0.08 0.15 0.24 0.30
LT X (b): Agriculture - Others 2.23 1.41 1.59 1.68 1.78
LT XI: EV Charging Stations 3.37 2.52 2.64 2.79 2.90
Further, Regulation 7.9 also requires the Distribution Licensees to propose additional Fixed
/Demand Charges for consumers opting for such insallations behind the meter. AEML-D
submitted that the same approach as above for working out losses and benefits can be
considered for these types of connections also. However, in this case, the net loss would be
more as there is no benefit of RPO available.
AEML-D further proposed that in case of change-over consumers opting for Net Metering
or behind the meter connections (neither Net Metering nor Net Billing), a significant portion
of the loss would be caused to AEML-D, even though the consumer is considered a
consumer of TPC-D. This is because the loss includes wheeling charges and balancing cost,
which services are actually provided by AEML-D as the consumer is physically connected
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 391 of 445
to AEML-D’s network and TPC-D only supplies power to the consumer. Therefore,
AEML-D proposes that 50% of the Grid Support Charges and Additional Fixed Charges
billed to such change-over consumers by TPC-D, should be provided to AEML-D. As per
the present mechanism in case of change-over consumers, these Grid Support Charges shall
be billed by TPC-D to such consumers and 50% of the same will be remitted to AEML-D.
Commission's Analysis and Ruling
The MERC (Grid Interactive Rooftop Renewable Energy Generating Systems)
Regulations, 2019 specify as under:
“11.5 The Commission may determine in the retail Tariff Order such Grid Support Charges
to be levied on the generated energy under Net Metering systems which shall cover
balancing, banking and wheeling cost after adjusting RPO benefits, avoided
distribution losses and any other benefits accruing to the Distribution Licensee.
These Grid Support Charges would be determined consumer tariff category wise,
based on the proposal of the Distribution Licensee in its retail supply Tariff Petition,
supported by adequate justification:
Provided that the consumers of all Categories having Sanctioned Load up to 10 kW
shall be exempted from payment of Grid Support Charges for Net Metering
systems:…”(emphasis added)
From the above, it can be seen that the Grid Support Charges are intended to cover the
balancing, banking and wheeling cost after adjusting RPO benefits, avoided distribution
losses and any other benefits accruing to the Distribution Licensee.
AEML-D has confirmed in the Public Notice and in the reply to the objections that it has
not proposed any specific Grid Support Charges, and has only the probable methodology
for computing the Grid Support Charges. As there is no proposal of AEML-D in the public
domain and stakeholders have not been afforded the opportunity of submitting their
comments on AEML-D’s specific proposal in this regard, the Commission has not approved
levy of Grid Support Charges for Net Metering connections by AEML-D.
Further, the Commission is not commenting on the merits/demerits of the computation
submitted by AEML-D in this regard. It may be noted that the Commission has approved
the levy of Grid Support Charges in MSEDCL’s MYT Order dated 30 March 2020 in Case
No. 327 of 2019. If AEML-D desires, it may submit its proposal for levy of Grid Support
Charges in line with the methodology approved for MSEDCL, at a later date.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 392 of 445
As regards AEML-D’s proposal that 50% of the Grid Support Charges and Additional Fixed
Charges billed to such change-over consumers by TPC-D, should be provided to AEML-
D, it is observed that TPC-D has not proposed any Grid Support Charges and Additional
Fixed Charges in its Petition. Further, TPC-D has not given its submissions on the issue of
sharing of such Charges with AEML-D. Hence, for the purpose of this Order, the
Commission has not given any decision in this regard.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 393 of 445
7 SCHEDULE OF CHARGES
AEML-D’s Submission
The Commission had last approved the Schedule of Charges in the MTR Order dated 12
September 2018. While approving the Schedule of Charges in the MTR Order, the
Commission had kept the Service Connection Charges at the same level and other charges
were increased using an escalation rate equal to the Consumer Price Index for Industrial
Workers (CPI-IW) increase between December 2012 and September 2017.
AEML-D proposes to continue with the same Service Connection charges as at present.
AEML-D requests the Commission to approve the same Service Connection charges for
consumers switching over to AEML-D from TPC-D. AEML-D has proposed increase in
charges for Cost of Meter (applicable when consumers opts to purchase meter from AEML-
D and in case of lost or burnt meters) based on increase in WPI (rounded off to the nearest
hundredth place). AEML-D submits that at present there is no specific Service Connection
Charge for connections taken for Alternate Fire Fighting. In case of Alternate Fire Fighting
connections, the energy consumption is usually NIL. Since the present fixed / demand
charges being levied do not recover the entire Retail fixed cost of AEML-D, the fixed cost
related to providing connection to Alternate Fire Fighting is also not getting recovered.
Therefore AEML-D has proposed to recover the Service Connection charges for Alternate
Fire Fighting connections at ten times the normative Service Connection charges.
Since the increase in CPI-IW is more than 12%, AEML-D has proposed increase in other
charges in line with increase in CPI-IW. However, AEML-D has rounded off the proposed
charges to the nearest tenth place.
Commission's Analysis and Ruling
In line with the MERC (Electricity Supply Code and Other Conditions of Supply)
Regulations, 2005, AEML-D has sought approval for revision of certain components of
“Schedule of Charges” (SoC) for the various services provided to the consumers.
The Commission observed that most of the charges have been proposed to increase inline
with the CPI-WPI, while service connection charges are proposed to be kept at the same
level as approved in MTR Order. The Commission feels that it is fair rationale to increase
the charges in line with the CPI-Industrial workers index.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 394 of 445
The Commission considers the submission made by AEML-D with regards to Schedule of
Charges and hence, approves the Schedule of Charges, except for the proposed ten-fold
increase in Service Connection Charge for connections taken for Alternate Fire Fighting,
as shown in the Table below:
Table 7-1: Approved Schedule of Charges
Sr.
No. Particulars
Existing
Charges (Rs.)
Approved
Charges (Rs.) Basis
A
New connections/ Reduction or
addition of Load/Shifting of service/
Extension of service/Change of
Tariff Category/Temporary
Connection
a) Single phase 65 70 Increase in line with
increase in CPI - IW
b) Three phase 100 110 Increase in line with
increase in CPI - IW
c) HT supply 250 280 Increase in line with
increase in CPI - IW
B Change of Name
a) Single phase 65 70 Increase in line with
increase in CPI - IW
b) Three phase 65 70 Increase in line with
increase in CPI - IW
c) HT supply 200 220 Increase in line with
increase in CPI - IW
C Service Connection Charges
1 L.T. Supply
Single Phase
For loads upto 5 kW 2,000 2,000 Kept at the same level For loads above 5 kW and upto 10 Kw 2,000 2,000 Kept at the same level Three Phase
Motive power upto 27 HP or other
loads upto 20 kW 3,000 3,000 Kept at the same level
Motive power > 27 HP but <= 67 HP
or other loads >20 kW but <= 50 kW 6,500 6,500 Kept at the same level
Motive power > 67 HP but <= 134 HP
or other loads >50 kW but <= 100 kW 12,000 12,000 Kept at the same level
Motive power >134 HP but <= 201 HP
or other loads >100 kW but <=150 kW 12,000 12,000 Kept at the same level
Above 150 kW 250,000 250,000 Kept at the same level
2 H.T. Supply
If line extended from existing network
For loads upto 500 kVA 3,50,000 3,50,000 Kept at the same level For loads above 500 kVA 4,00,000 4,00,000 Kept at the same level
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 395 of 445
Sr.
No. Particulars
Existing
Charges (Rs.)
Approved
Charges (Rs.) Basis
Consumer wishing to have dedicated
line from AEML-D’s 22/33/11kV
substation /Provision of dedicated
distribution facility for power supply
to HT consumer
At actual At actual Kept at the same level
3 Temporary Connection At actual At actual Kept at the same level
4
Supervision Charges in case work is
carried out by Licensed Electrical
Contractor (LEC)
For providing HT supply 15,000 15,000 Kept at the same level
For providing LT supply to three phase
Industrial/Commercial Consumers
only
6,000 6,000 Kept at the same level
Extension of Load: the charges will be
applicable on the total load (existing as
well as additional load demanded)
As in Sr.
No.1,2, 3 & 4
above
As in Sr.
No.1,2, 3 & 4
above
Kept at the same level
C Miscellaneous and General Charges
1 Re-connection Charges
a) Re-installation of fuse cut-out 130 150 Increase in line with
increase in CPI - IW
b) Re-installation of meter 400 450 Increase in line with
increase in CPI - IW
c) HT Supply 650 730 Increase in line with
increase in CPI - IW
d) Re-connection of Service Cable 1000 1120 Increase in line with
increase in CPI - IW
2 Shifting of Meter, if carried out only
on consumer’s request
Single Phase 130 150 Increase in line with
increase in CPI - IW
Three Phase 260 290 Increase in line with
increase in CPI - IW
3 Shifting of services, if carried out only
on consumer’s request
Single Phase At Actual At Actual Kept at the same level Three Phase At Actual At Actual Kept at the same level
4 Meter Testing on site on Consumer’s
request
Single Phase 130 150 Increase in line with
increase in CPI - IW
Three Phase 450 510 Increase in line with
increase in CPI - IW
5 Meter Testing at Laboratory
Single Phase 260 290 Increase in line with
increase in CPI - IW
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 396 of 445
Sr.
No. Particulars
Existing
Charges (Rs.)
Approved
Charges (Rs.) Basis
Three Phase 650 730 Increase in line with
increase in CPI - IW
HT Tri-vector/TOD meter 1300 1460 Increase in line with
increase in CPI - IW
Meter testing at Government approved
laboratory At actual At actual
6
Cost of Meter (applicable when
consumer opts to purchase the meter
from AEML-D & in case of Lost or
Burnt meter)
Single Phase meter 1300 1400 Increase in line with
increase in CPI - IW
Three Phase whole current meter 3900 4100 Increase in line with
increase in CPI - IW
Three Phase CT operated meter 5200 5500 Increase in line with
increase in CPI - IW
HT TOD meter 5850 6200 Increase in line with
increase in CPI - IW
ABT compliant meter At actual At actual
7
First visit Charges (Only for new
connection or additional supply
request)
100 110 Increase in line with
increase in CPI - IW
8 Charges for Additional copies of test
reports (Rs./page) 1 1 Kept at the same level
9 Photocopying of Regulatory Orders
etc. (Rs./Page) 1 1 Kept at the same level
10 Duplicate copy of each monthly bill
(Rs./Bill) 2 2 Kept at the same level
11 Statement of Accounts (Rs./Page) 3 3 Kept at the same level
12
Charges for Dishonored Cheques
(irrespective of cheque amounts) - for
first instance
250 250 Kept at the same level
13
Charges for Dishonored Cheques
(irrespective of cheque amounts) - for
2nd and subsequent instance
- 750 New charge
D Schedule of Charges related to Open
Access
1 Open Access Processing fee per
application 3000 3000 Kept at the same level
2 Open Access Operating Charges per
month 3000 3000 Kept at the same level
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 397 of 445
8 APPLICABILITY
8.1 APPLICABILITY OF REVISED TARIFF
The Tariffs determined in this Order shall be applicable from 1 April, 2020. Where the
billing cycle of a consumer is different with respect to the date of applicability of the
revised tariffs, they should be made applicable for the consumption on a pro rata basis.
The bills for the respective periods as per the existing and revised tariffs shall be
calculated based on the pro-rata consumption (units consumed during the respective
periods, computed on the basis of average unit consumption per day multiplied by the
number of days in the respective periods covered in the billing cycle).
The Commission has determined the revenue from the revised tariffs as if they were
applicable for the entire year. Any shortfall or surplus in the actual revenue against the
approved ARR will be revised during Truing-Up at the end of the Control Period, as
specified in the MYT Regulations 2019.
8.2 APPLICABILITY OF ORDER
This Multi Year Tariff Order for the 4th Control Period from FY 2020-21 to FY 2024-25
shall come into force from 1 April, 2020.
Special Interim Dispensation:
This Tariff Order is being issued at a critical time when the country is passing through
one of the most debilitating epidemics in the form of Covid19. In fact, taking note of the
current situation prevailing in the State, the Commission issued a Practice Direction on
26 March, 2020, whereby meter reading and physical bill distribution work was
suspended and Utilities were asked to issue bills on average usage basis till the current
crisis gets subsided. The Commission is aware that a number of industrial and commercial
establishments have been shut down due to the lockdown enforced by the Government.
To mitigate to some extent the difficulties being faced by the electricity consumers of
Maharashtra and all out efforts to contain the spread of Corona Pandemic, the
Commission deems it fit to put a moratorium on payment of fixed charges of the
electricity bill by consumers under Industrial and Commercial category for next three
billing cycles beginning from the lockdown date of 25 March, 2020.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 398 of 445
The Distribution Licensees will be required to borrow/avail additional working capital
over and above the Regulations. Also, there will be other additional cost required to be
incurred for continuing of operations. Associated with this, there will be an additional
working capital interest. The Commission opines that in the present situation, relief needs
to be given to the electricity consumers affected by the Lockdown directions. The
Commission will take an appropriate view on the additional expenses that are likely to be
incurred by the Distribution Licensees on account of additional Interest on Working
Capital during the MTR process.
The Petition of Adani Electricity Mumbai Limited – Distribution Business (AEML-D) in
Case No. 325 of 2019 stands disposed of accordingly.
Sd/- Sd/-
(Mukesh Khullar)
Member
(I.M. Bohari)
Member
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 399 of 445
Annexure I (A): Revenue with Revised Tariffs for FY 2020-21
Fixed
Charges
(Rs./connect
ion/Month)
Demand
Charges
(Rs./kVA/M
onth)
Energy
Charges
(Rs./kWh)
Wheeling
Charges
(Rs./kWh)
Billing
Demand in
KVA
Sales in MU
Revenue
from Fixed
Charges
Revenue
from
Demand
Charges
Revenue from
Energy
Charges
Revenue from
Wheeling
Charges
PF
Surcharge PF Incentive
Load Factor
Incentive
Prompt
Payment
Discount
Time of Day
(ToD)
Digital
Incentive
HT Category
HT I: HT-Industry 201 - 320.00 6.15 0.73 89,173 339.76 - 34.24 208.95 24.72 (0.01) (2.13) 2.32 - 268.09
HTII : HT- Commercial 272 - 320.00 6.45 0.73 1,42,224 304.26 - 54.61 196.25 22.14 (0.05) (4.60) 4.59 - 272.93
HT III: HT-Group Housing Society 17 - 320.00 6.30 0.73 7,660 34.70 - 2.94 21.86 2.52 - (0.39) - - 26.94 HT IV - HT Railways, Metro &
Monorail6 - 320.00 6.00 0.73 8,582 30.84 - 3.30 18.51 2.24 - (0.28) - - 23.77
HT V (a):PS - Govt. EI & Hospitals 6 - 320.00 6.05 0.73 2,107 6.45 - 0.81 3.90 0.47 - (0.05) 0.03 - 5.16
HT V (b):PS - Others 65 - 320.00 6.45 0.73 28,527 98.67 - 10.95 63.64 7.18 - (0.92) 0.83 - 81.69
Sub-total 582 2,80,353 842.12 - 107.66 530.81 61.27 - - (0.06) (8.44) 7.82 - 699.05
LT Category
LT I - Below Poverty Line 222 10.00 - 1.00 1.57 0.01 0.00 - 0.00 0.00 - - - (0.00) - (0.00) 0.00
LT -I Residential (Single Phase) 0 - - - 4,506.33 - - - - - - - - - - 2,939.69
0-100 8,74,967 70.00 - 2.90 1.57 1,757.32 73.50 - 509.62 276.52 - - - (2.55) - (1.24) 855.86
101-300 7,76,401 110.00 - 4.85 1.57 1,152.32 102.48 - 558.87 181.32 - - - (1.92) - (0.93) 839.83
301-500 1,01,308 110.00 - 6.65 1.57 196.90 13.37 - 130.94 30.98 - - - (0.38) - (0.18) 174.73
500and above 28,108 135.00 - 7.80 1.57 68.03 4.55 - 53.06 10.70 - - - (0.14) - (0.07) 68.10
LT -I Residential Three phase 0 - - - - - - - - - - - - - - -
0-100 63,787 135.00 - 2.90 1.57 288.35 10.33 - 83.62 45.37 - - - (0.85) - (0.24) 138.24
101-300 98,955 135.00 - 4.85 1.57 417.51 16.03 - 202.49 65.70 - - - (1.31) - (0.37) 282.53
301-500 60,452 135.00 - 6.65 1.57 213.66 9.79 - 142.08 33.62 - - - (0.74) - (0.21) 184.54
500and above 69,856 135.00 - 7.80 1.57 412.24 11.32 - 321.55 64.87 - - - (1.46) - (0.41) 395.86
LT II (a) - 0-20 kW 4,31,860 385.00 - 5.70 1.57 1,864.62 199.52 - 1,062.83 293.41 0.00 (0.03) - (5.04) 0.00 (1.63) 1,549.06
LT II (b) - 20-50 kW 6,266 - 320.00 6.05 1.57 87,492 233.40 - 33.60 141.21 36.73 7.06 (3.36) - (1.01) 3.14 (0.29) 217.08
LT II (c) - above 50 kW 5,227 - 320.00 6.55 1.57 1,92,653 531.48 - 73.98 348.12 83.63 9.26 (9.21) - (3.10) 7.86 (0.51) 510.02
LT III (a) - LT Industrial upto 20 kW 15,421 385.00 - 5.55 1.57 - 182.89 7.12 - 101.50 28.78 - - - (0.50) - (0.11) 136.79
LT III (b) - LT Industrial above 20 kW 3,398 - 320.00 5.95 1.57 1,07,953 388.81 - 41.45 231.34 61.18 6.63 (5.97) - (2.36) 4.55 (0.26) 336.57
LT IV (a): PS - Govt. EI & Hospitals 813 385.00 - 5.60 1.57 30.85 0.38 - 17.27 4.85 0.08 (0.20) - (0.06) 0.10 (0.01) 22.42
LT IV (b): PS - Others 2,995 385.00 - 6.00 1.57 171.62 1.38 - 102.97 27.00 0.78 (1.31) - (0.53) 1.04 (0.08) 131.26
LT VI (a): Agriculture - Pumpsets 17 40.00 3.80 1.57 0.09 0.00 - 0.03 0.01 - - - (0.00) - (0.00) 0.05
LT VI (b): Agriculture - Others 8 90.00 5.30 1.57 0.30 - - 0.16 0.05 - - - (0.00) - (0.00) 0.21
LT V: EV Charging Stations 1 - 70.00 3.93 1.57 18 - - 0.00 - - 0.00 (0.00) - (0.00) 0.00 (0.00) 0.00
Sub-total 25,42,400 4,13,665 7,992.17 450.84 149.03 4,055.98 1,257.60 24.19 (20.37) - (22.22) 16.75 (6.58) 5,905.23
Total 25,42,982 6,94,017 8,834.29 450.84 256.69 4,586.78 1,318.87 24.19 (20.37) (0.06) (30.65) 24.57 (6.58) 6,604.28
No. of
consumers
Components of tariff Full year revenue excluding Government subsidy (Rs. Crore)
Full year
revenue (Rs.
Crore)
Relevant sales & load/demand
data for revenue calculation
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 400 of 445
Annexure I (B): Revenue with Revised Tariffs for FY 2021-22
Fixed
Charges
(Rs./connect
ion/Month)
Demand
Charges
(Rs./kVA/M
onth)
Energy
Charges
(Rs./kWh)
Wheeling
Charges
(Rs./kWh)
Billing
Demand in
KVA
Sales in MU
Revenue
from Fixed
Charges
Revenue
from
Demand
Charges
Revenue from
Energy
Charges (MU)
Revenue from
Wheeling
Charges
PF
Surcharge
PF
Incentive
Load Factor
Incentive
Prompt
Payment
Discount
Time of Day
(ToD)
Digital
Incentive
HT Category
HT I: HT-Industry 203 - 335.00 6.15 0.68 90065 375.11 - 36.21 230.69 25.37 (0.01) (2.13) 2.34 - 292.46
HTII : HT- Commercial 275 - 335.00 6.45 0.68 143646 276.26 - 57.75 178.19 18.68 (0.05) (4.60) 4.59 - 254.55
HT III: HT-Group Housing Society 18 - 335.00 6.30 0.68 7737 32.24 - 3.11 20.31 2.18 - (0.39) - - 25.22
HT IV - HT Railways, Metro & Monorail 6 - 335.00 5.80 0.68 9012 31.04 - 3.62 18.01 2.10 - (0.28) - - 23.45
HT V (a):PS - Govt. EI & Hospitals 6 - 335.00 6.05 0.68 2128 6.21 - 0.86 3.76 0.42 - (0.05) 0.03 - 5.01
HT V (b):PS - Others 66 - 335.00 6.45 0.68 28812 97.20 - 11.58 62.69 6.57 - (0.92) 0.84 - 80.77
HT VIII: EV Charging Stations 0 - 70.00 4.82 0.68 0 - - - - - - - -
Sub-total 589 2,83,499 850.33 - 113.97 534.46 57.51 - - (0.06) (8.44) 7.84 - 705.28
LT Category
LT I - Below Poverty Line 222 10.00 - 1.00 1.46 0.01 0.00 - 0.00 0.00 - - - (0.00) - (0.00) 0.00
LT -I Residential (Single Phase) - - - - 1.46 4,644.20 - - - 678.85 - - - - - - 3,039.10
0-100 8,82,697 75.00 - 3.05 1.46 1,817.31 79.44 - 554.28 265.64 - - - (2.55) - (1.24) 895.58
101-300 7,81,680 115.00 - 5.00 1.46 1,189.56 107.87 - 594.78 173.88 - - - (1.92) - (0.93) 873.68
301-500 1,02,369 115.00 - 6.65 1.46 201.65 14.13 - 134.10 29.48 - - - (0.38) - (0.18) 177.14
500and above 28,856 140.00 - 7.80 1.46 68.36 4.85 - 53.32 9.99 - - - (0.14) - (0.07) 67.95
LT -I Residential Three phase
0-100 68,741 140.00 - 3.05 1.46 299.79 11.55 - 91.44 43.82 - - - (0.85) - (0.24) 145.71
101-300 1,08,491 140.00 - 5.00 1.46 433.89 18.23 - 216.94 63.42 - - - (1.31) - (0.37) 296.91
301-500 63,826 140.00 - 6.65 1.46 220.38 10.72 - 146.55 32.21 - - - (0.74) - (0.21) 188.54
500and above 75,811 140.00 - 7.80 1.46 413.25 12.74 - 322.34 60.41 - - - (1.46) - (0.41) 393.61
LT II (a) - 0-20 kW 4,37,247 405.00 - 5.65 1.46 1,904.30 212.50 - 1,075.93 278.35 - (5.04) 0.00 (1.63) 1,560.12
LT II (b) - 20-50 kW 6,432 - 335.00 6.05 1.46 88,367 231.98 - 35.52 140.35 33.91 - (1.01) 3.15 (0.29) 211.63
LT II (c) - above 50 kW 5,464 - 335.00 6.60 1.46 1,94,580 525.16 - 78.22 346.60 76.76 - (3.10) 7.98 (0.51) 505.95
LT III (a) - LT Industrial upto 20 kW 15,697 405.00 - 5.55 1.46 - 186.97 7.63 - 103.77 27.33 - (0.50) - (0.11) 138.11
LT III (b) - LT Industrial above 20 kW 3,434 - 335.00 5.95 1.46 1,09,033 383.85 - 43.83 228.39 56.11 - (2.36) 4.59 (0.26) 330.29
LT IV (a): PS - Govt. EI & Hospitals 821 405.00 - 5.60 1.46 35.09 0.40 - 19.65 5.13 0.08 (0.20) - (0.06) 0.10 (0.01) 25.09
LT IV (b): PS - Others 3,027 405.00 - 6.00 1.46 206.62 1.47 - 123.97 30.20 0.78 (1.31) - (0.53) 1.05 (0.08) 155.56
LT VI (a): Agriculture - Pumpsets 18 40.00 - 3.80 1.46 0.11 0.00 - 0.04 0.02 - - - (0.00) - (0.00) 0.06
LT VI (b): Agriculture - Others 8 - 90.00 5.30 1.46 0.38 - - 0.20 0.06 - - - (0.00) - (0.00) 0.26
LT V: EV Charging Stations 1 - 70.00 4.04 1.46 19 - - 0.00 - - - (0.00) 0.00 (0.00) 0.00
Sub-total 25,87,206 4,17,801 8,198.59 482.64 159.69 4,199.81 1,877.24 1.03 (1.62) - (22.22) 16.93 (6.58) 6,028.07
Total 25,87,795 7,01,301 9,048.92 482.64 273.66 4,734.28 1,934.75 1.03 (1.62) (0.06) (30.65) 24.76 (6.58) 6,733.35
No. of consumers
Components of tariff Full year revenue excluding Government subsidy (Rs. Crore)
Full year
revenue (Rs.
Crore)
Relevant sales & load/demand
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 401 of 445
Annexure I (C): Revenue with Revised Tariffs for FY 2022-23
Fixed
Charges
(Rs./connect
ion/Month)
Demand
Charges
(Rs./kVA/M
onth)
Energy
Charges
(Rs./kWh)
Wheeling
Charges
(Rs./kWh)
Billing
Demand in
KVA
Sales in MU
Revenue
from Fixed
Charges
Revenue
from
Demand
Charges
Revenue from
Energy
Charges (MU)
Revenue from
Wheeling
Charges
PF
Surcharge
PF
Incentive
Load Factor
Incentive
Prompt
Payment
Discount
Time of Day
(ToD)
Digital
Incentive
HT Category
HT I: HT-Industry 205 - 355.00 6.10 0.68 90965 411.70 - 38.75 251.14 28.11 (0.01) (2.13) 2.35 - 318.20
HTII : HT- Commercial 277 - 355.00 6.30 0.68 145082 249.75 - 61.81 157.34 17.05 (0.05) (4.60) 4.58 - 236.13
HT III: HT-Group Housing Society 18 - 355.00 6.10 0.68 7814 29.37 - 3.33 17.92 2.01 - (0.39) - - 22.86
HT IV - HT Railways, Metro & Monorail 6 - 355.00 6.00 0.68 9462 31.17 - 4.03 18.70 2.13 - (0.28) - - 24.58
HT V (a):PS - Govt. EI & Hospitals 6 - 355.00 6.05 0.68 2149 5.96 - 0.92 3.60 0.41 - (0.05) 0.03 - 4.90
HT V (b):PS - Others 67 - 355.00 6.25 0.68 29100 95.61 - 12.40 59.75 6.53 - (0.92) 0.84 - 78.60
HT VIII: EV Charging Stations 0 - 70.00 4.82 0.68 0 - - - - - - - -
Sub-total 594 2,86,695 861.82 - 122.13 532.52 58.85 - - (0.06) (8.44) 7.85 - 712.85
LT Category
LT I - Below Poverty Line 222 10.00 - 1.00 1.47 0.01 0.00 - 0.00 0.00 - - - (0.00) - (0.00) 0.00
LT -I Residential (Single Phase) - - - - 1.47 4,778.68 - - - 704.77 - - - - - - 3,140.83
0-100 8,90,523 80.00 - 3.05 1.47 1,877.45 85.49 - 572.62 276.89 - - - (2.55) - (1.24) 931.21
101-300 7,87,057 120.00 - 5.00 1.47 1,226.29 113.34 - 613.14 180.85 - - - (1.92) - (0.93) 904.48
301-500 1,03,449 120.00 - 6.70 1.47 206.12 14.90 - 138.10 30.40 - - - (0.38) - (0.18) 182.83
500and above 29,607 145.00 - 7.80 1.47 68.30 5.15 - 53.28 10.07 - - - (0.14) - (0.07) 68.29
LT -I Residential Three phase - - - - 1.47 - - - - - - - - - - - -
0-100 74,059 145.00 - 3.05 1.47 311.31 12.89 - 94.95 45.91 - - - (0.85) - (0.24) 152.65
101-300 1,18,803 145.00 - 5.00 1.47 450.24 20.67 - 225.12 66.40 - - - (1.31) - (0.37) 310.51
301-500 67,368 145.00 - 6.70 1.47 226.85 11.72 - 151.99 33.46 - - - (0.74) - (0.21) 196.22
500and above 82,035 145.00 - 7.80 1.47 412.12 14.27 - 321.46 60.78 - - - (1.46) - (0.41) 394.64
LT II (a) - 0-20 kW 4,42,686 425.00 - 5.45 1.47 1,943.16 225.77 - 1,059.02 286.58 - (5.04) 0.00 (1.63) 1,564.71
LT II (b) - 20-50 kW 6,602 - 355.00 6.00 1.47 89,251 229.04 - 38.02 137.42 33.78 - (1.01) 3.15 (0.29) 211.07
LT II (c) - above 50 kW 5,690 - 355.00 6.55 1.47 1,96,525 518.38 - 83.72 339.54 76.45 - (3.10) 8.05 (0.51) 504.15
LT III (a) - LT Industrial upto 20 kW 15,973 425.00 - 5.55 1.47 190.52 8.15 - 105.74 28.10 - (0.50) - (0.11) 141.37
LT III (b) - LT Industrial above 20 kW 3,471 - 355.00 5.95 1.47 1,10,123 378.08 - 46.91 224.96 55.76 - (2.36) 4.62 (0.26) 329.63
LT IV (a): PS - Govt. EI & Hospitals 829 425.00 - 5.60 1.47 39.92 0.42 - 22.36 5.89 0.08 (0.20) - (0.06) 0.10 (0.01) 28.58
LT IV (b): PS - Others 3,058 425.00 - 6.00 1.47 248.53 1.56 - 149.12 36.65 0.78 (1.31) - (0.53) 1.06 (0.08) 187.25
LT VI (a): Agriculture - Pumpsets 18 40.00 - 3.80 1.47 0.14 0.00 - 0.05 0.02 - - - (0.00) - (0.00) 0.08
LT VI (b): Agriculture - Others 8 - 90.00 5.30 1.47 0.48 - - 0.25 0.07 - - - (0.00) - (0.00) 0.32
LT V: EV Charging Stations 1 - 70.00 4.03 1.47 19 - - 0.00 - - - (0.00) 0.00 (0.00) 0.00
Sub-total 26,33,846 4,21,979 8,405.08 515.51 170.92 4,254.93 1,944.36 1.03 (1.62) - (22.22) 17.05 (6.58) 6,168.60
Total 26,34,440 7,08,674 9,266.90 515.51 293.05 4,787.46 2,003.20 1.03 (1.62) (0.06) (30.65) 24.90 (6.58) 6,881.46
No. of consumers
Components of tariff Full year revenue excluding Government subsidy (Rs. Crore)
Full year
revenue (Rs.
Crore)
Relevant sales & load/demand
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 402 of 445
Annexure I (D): Revenue with Revised Tariffs for FY 2023-24
Fixed
Charges
(Rs./connect
ion/Month)
Demand
Charges
(Rs./kVA/M
onth)
Energy
Charges
(Rs./kWh)
Wheeling
Charges
(Rs./kWh)
Billing
Demand in
KVA
Sales in MU
Revenue
from Fixed
Charges
Revenue
from
Demand
Charges
Revenue from
Energy
Charges (MU)
Revenue from
Wheeling
Charges
PF
Surcharge
PF
Incentive
Load Factor
Incentive
Prompt
Payment
Discount
Time of Day
(ToD)
Digital
Incentive
HT Category
HT I: HT-Industry 207 - 375.00 6.05 0.68 91875 449.59 - 41.34 272.00 30.74 (0.01) (2.13) 2.35 - 344.29
HTII : HT- Commercial 280 - 375.00 6.25 0.68 146533 224.84 - 65.94 140.53 15.37 (0.05) (4.60) 4.58 - 221.76
HT III: HT-Group Housing Society 18 - 375.00 6.10 0.68 7892 25.98 - 3.55 15.85 1.78 - (0.39) - - 20.79
HT IV - HT Railways, Metro & Monorail 6 - 375.00 5.90 0.68 9935 31.24 - 4.47 18.43 2.14 - (0.28) - - 24.76
HT V (a):PS - Govt. EI & Hospitals 6 - 375.00 5.85 0.68 2171 5.69 - 0.98 3.33 0.39 - (0.05) 0.03 - 4.67
HT V (b):PS - Others 67 - 375.00 6.25 0.68 29391 93.90 - 13.23 58.69 6.42 - (0.92) 0.85 - 78.26
HT VIII: EV Charging Stations 0 - 70.00 4.82 0.68 0 - - - - - - - -
Sub-total 599 2,89,940 876.95 - 130.47 537.39 59.95 - - (0.06) (8.44) 7.86 - 727.17
LT Category
LT I - Below Poverty Line 222 10.00 - 1.00 1.48 0.01 0.00 - 0.00 0.00 - - - (0.00) - (0.00) 0.00
LT -I Residential (Single Phase) - - - - 1.48 4,908.49 - - - 724.53 - - - - - - 3,198.95
0-100 8,98,447 85.00 - 2.95 1.48 1,937.51 91.64 - 571.56 285.99 - - - (2.55) - (1.24) 945.41
101-300 7,92,536 125.00 - 4.90 1.48 1,262.33 118.88 - 618.54 186.33 - - - (1.92) - (0.93) 920.89
301-500 1,04,551 125.00 - 6.75 1.48 210.29 15.68 - 141.95 31.04 - - - (0.38) - (0.18) 188.11
500and above 30,359 155.00 - 7.85 1.48 67.64 5.65 - 53.10 9.98 - - - (0.14) - (0.07) 68.51
LT -I Residential Three phase - - - - 1.48 - - - - - - - - - - - -
0-100 79,768 155.00 - 2.95 1.48 322.83 14.84 - 95.23 47.65 - - - (0.85) - (0.24) 156.63
101-300 1,29,948 155.00 - 4.90 1.48 466.37 24.17 - 228.52 68.84 - - - (1.31) - (0.37) 319.85
301-500 71,086 155.00 - 6.75 1.48 232.91 13.22 - 157.21 34.38 - - - (0.74) - (0.21) 203.87
500and above 88,542 155.00 - 7.85 1.48 408.62 16.47 - 320.77 60.32 - - - (1.46) - (0.41) 395.68
LT II (a) - 0-20 kW 4,48,177 450.00 - 5.45 1.48 1,980.91 242.02 - 1,079.60 292.40 - (5.04) 0.00 (1.63) 1,607.35
LT II (b) - 20-50 kW 6,776 - 375.00 5.95 1.48 90,143 224.31 - 40.56 133.46 33.11 - (1.01) 3.16 (0.29) 208.99
LT II (c) - above 50 kW 5,925 - 375.00 6.50 1.48 1,98,491 511.14 - 89.32 332.24 75.45 - (3.10) 8.12 (0.51) 501.51
LT III (a) - LT Industrial upto 20 kW 16,252 450.00 - 5.45 1.48 - 193.66 8.78 - 105.55 28.59 - (0.50) - (0.11) 142.29
LT III (b) - LT Industrial above 20 kW 3,509 - 375.00 5.90 1.48 1,11,224 371.72 - 50.05 219.32 54.87 - (2.36) 4.66 (0.26) 326.27
LT IV (a): PS - Govt. EI & Hospitals 837 450.00 - 5.60 1.48 45.41 0.45 - 25.43 6.70 0.08 (0.20) - (0.06) 0.11 (0.01) 32.50
LT IV (b): PS - Others 3,090 450.00 - 6.00 1.48 298.80 1.67 - 179.28 44.11 0.78 (1.31) - (0.53) 1.07 (0.08) 224.99
LT VI (a): Agriculture - Pumpsets 18 40.00 - 3.80 1.48 0.18 0.00 - 0.07 0.03 - - - (0.00) - (0.00) 0.10
LT VI (b): Agriculture - Others 8 - 90.00 5.30 1.48 0.61 - - 0.32 0.09 - - - (0.00) - (0.00) 0.41
LT V: EV Charging Stations 1 - 70.00 4.02 1.48 19 - - 0.00 - - - (0.00) 0.00 (0.00) 0.00
Sub-total 26,82,463 4,26,199 8,611.66 554.72 182.35 4,306.89 1,995.68 1.03 (1.62) - (22.22) 17.16 (6.58) 6,302.88
Total 26,83,062 7,16,139 9,488.60 554.72 312.83 4,844.28 2,055.63 1.03 (1.62) (0.06) (30.65) 25.02 (6.58) 7,030.05
No. of consumers
Components of tariff Relevant sales & load/demand Full year revenue excluding Government subsidy (Rs. Crore)
Full year
revenue (Rs.
Crore)
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 403 of 445
Annexure I (E): Revenue with Revised Tariffs for FY 2024-25
Fixed
Charges
(Rs./connect
ion/Month)
Demand
Charges
(Rs./kVA/M
onth)
Energy
Charges
(Rs./kWh)
Wheeling
Charges
(Rs./kWh)
Billing
Demand in
KVA
Sales in MU
Revenue
from Fixed
Charges
Revenue
from
Demand
Charges
Revenue from
Energy
Charges (MU)
Revenue from
Wheeling
Charges
PF
Surcharge
PF
Incentive
Load Factor
Incentive
Prompt
Payment
Discount
Time of Day
(ToD)
Digital
Incentive
HT Category
HT I: HT-Industry 209 - 395.00 6.05 0.68 92794 488.81 - 43.98 295.73 33.40 (0.01) (2.13) 2.36 - 373.34
HTII : HT- Commercial 283 - 395.00 6.25 0.68 147998 201.55 - 70.15 125.97 13.77 (0.05) (4.60) 4.58 - 209.82
HT III: HT-Group Housing Society 18 - 395.00 6.10 0.68 7971 21.95 - 3.78 13.39 1.50 - (0.39) - - 18.28
HT IV - HT Railways, Metro & Monorail 6 - 395.00 5.90 0.68 10432 31.29 - 4.94 18.46 2.14 - (0.28) - - 25.27
HT V (a):PS - Govt. EI & Hospitals 6 - 395.00 5.85 0.68 2193 5.41 - 1.04 3.17 0.37 - (0.05) 0.03 - 4.55
HT V (b):PS - Others 68 - 395.00 6.35 0.68 29685 92.07 - 14.07 58.46 6.29 - (0.92) 0.86 - 78.76
HT VIII: EV Charging Stations 0 - 70.00 4.82 0.68 0 - - - - - - - - -
Sub-total 605 2,93,237 895.96 - 138.99 549.56 61.23 - - (0.06) (8.44) 7.88 - 749.16
LT Category -
LT I - Below Poverty Line 222 10.00 - 1.00 1.48 0.01 0.00 - 0.00 0.00 - - - (0.00) - (0.00) 0.00
LT -I Residential (Single Phase) - - - - 1.48 5,032.13 - - - 742.36 - - - - - - 3,278.66
0-100 9,06,469 90.00 - 2.90 1.48 1,997.17 97.90 - 579.18 294.63 - - - (2.55) - (1.24) 967.92
101-300 7,98,115 130.00 - 4.90 1.48 1,297.35 124.51 - 635.70 191.39 - - - (1.92) - (0.93) 948.74
301-500 1,05,674 130.00 - 6.75 1.48 214.03 16.49 - 144.47 31.57 - - - (0.38) - (0.18) 191.97
500and above 31,113 165.00 - 7.85 1.48 66.54 6.16 - 52.23 9.82 - - - (0.14) - (0.07) 68.00
LT -I Residential Three phase - - - - 1.48 - - - - - - - - - - - -
0-100 85,894 165.00 - 2.90 1.48 334.30 17.01 - 96.95 49.32 - - - (0.85) - (0.24) 162.18
101-300 1,41,990 165.00 - 4.90 1.48 482.19 28.11 - 236.27 71.13 - - - (1.31) - (0.37) 333.83
301-500 74,986 165.00 - 6.75 1.48 238.53 14.85 - 161.01 35.19 - - - (0.74) - (0.21) 210.09
500and above 95,348 165.00 - 7.95 1.48 402.03 18.88 - 319.62 59.31 - - - (1.46) - (0.41) 395.93
LT II (a) - 0-20 kW 4,53,722 475.00 - 5.40 1.48 2,017.19 258.62 - 1,089.28 297.58 - (5.04) 0.00 (1.63) 1,638.82
LT II (b) - 20-50 kW 6,955 - 395.00 5.95 1.48 91,044 217.48 - 43.16 129.40 32.08 - (1.01) 3.16 (0.29) 206.50
LT II (c) - above 50 kW 6,169 - 395.00 6.50 1.48 2,00,475 503.41 - 95.03 327.22 74.26 - (3.10) 8.18 (0.51) 501.07
LT III (a) - LT Industrial upto 20 kW 16,532 475.00 - 5.45 1.48 - 196.48 9.42 - 107.08 28.98 - (0.50) - (0.11) 144.87
LT III (b) - LT Industrial above 20 kW 3,547 - 395.00 5.90 1.48 1,12,337 364.92 - 53.25 215.30 53.83 - (2.36) 4.70 (0.26) 324.46
LT IV (a): PS - Govt. EI & Hospitals 846 475.00 - 5.60 1.48 51.66 0.48 - 28.93 7.62 0.08 (0.20) - (0.06) 0.11 (0.01) 36.95
LT IV (b): PS - Others 3,122 475.00 - 6.00 1.48 359.18 1.78 - 215.51 52.99 0.78 (1.31) - (0.53) 1.08 (0.08) 270.21
LT VI (a): Agriculture - Pumpsets 18 40.00 - 3.80 1.48 0.23 0.00 - 0.09 0.03 - - - (0.00) - (0.00) 0.12
LT VI (b): Agriculture - Others 8 - 90.00 5.30 1.48 0.76 - - 0.41 0.11 - - - (0.00) - (0.00) 0.52
LT V: EV Charging Stations 1 - 70.00 4.02 1.48 19 - - 0.00 - - - (0.00) 0.00 (0.00) 0.00
Sub-total 27,33,166 4,30,461 8,818.19 595.54 194.00 4,382.31 2,043.24 1.03 (1.62) - (22.22) 17.28 (6.58) 6,460.62
Total 27,33,771 7,23,698 9,714.15 595.54 332.99 4,931.87 2,104.47 1.03 (1.62) (0.06) (30.65) 25.16 (6.58) 7,209.78
No. of consumers
Components of tariff Relevant sales & load/demand Full year revenue excluding Government subsidy (Rs. Crore)
Full year
revenue (Rs.
Crore)
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 404 of 445
Annexure II: Tariff Schedule for FY 2020-21 to FY 2024-25
ADANI ELECTRICITY MUMBAI LIMITED – DISTRIBUTION BUSINESS
SCHEDULE OF ELECTRICITY TARIFFS
(With effect from 1 April, 2020)
The Maharashtra Electricity Regulatory Commission, in exercise of the powers vested in it
under Sections 61 and 62 of the Electricity Act, 2003 and all other powers enabling it in
this behalf, has determined, by its Multi Year Tariff Order dated 30 March, 2020 in Case
No. 325 of 2019, the Tariff for supply of electricity by the Distribution Licensee, Adani
Electricity Mumbai Limited – Distribution Business (AEML-D) to various classes of
consumers as applicable from 1 April, 2020.
General
1. These Tariffs supersede all Tariffs so far in force.
2. The Tariffs are subject to revision and/or surcharge that may be levied by the
Distribution Licensee from time to time as per the directives of the Commission.
3. The Tariffs are exclusive of the separate Electricity Duty, Tax on Sale of Electricity and
other levies by the Government or other competent authorities, which will be payable
by consumers over and above the Tariffs.
4. The Tariffs are applicable for supply at one point only.
5. The Distribution Licensee may measure the Maximum Demand for any period shorter
than 30 minutes of maximum use, subject to conformity with the Commission’s
Electricity Supply Code Regulations, where it considers that there are considerable load
fluctuations in operation.
6. The Tariffs are subject to the provisions of the applicable Regulations and any directions
that may be issued by the Commission from time to time.
7. Unless specifically stated to the contrary, the figures of Energy Charge and Wheeling
Charge are denominated in Rupees per unit (kWh or kVAh as case may be) for the
energy consumed during the month.
8. Fuel Adjustment Charge (FAC) computed in accordance with provisions of MYT
Regulations, 2019 and Commission’s directions in this regard from time to time shall
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 405 of 445
be applicable to all categories of consumers, and will be charged over and above the
base tariff.
LOW TENSION (LT) TARIFF
LT I (A): LT – Residential (BPL)
Applicability:
This Below Poverty Line (BPL) Tariff category is applicable to Residential consumers who
have a Sanctioned Load upto 0.25 kW and who have consumed upto 360 units per annum
in the previous financial year. The eligibility of such consumers will be reassessed at the
end of each financial year. If more than 360 units have been consumed in the previous
financial year, the LT I(B) - Residential Tariff shall thereafter be applicable, and such
consumer cannot revert thereafter to the BPL category irrespective of his future
consumption level.
The categorisation of BPL consumers will be reassessed at the end of the financial year on
a pro rata basis if there has been consumption for only a part of the year The categorisation
of BPL consumers who have been added during the previous year would be assessed on a
pro rata basis, i.e., 30 units per month.
This BPL category will also be applicable to all new consumers subsequently added in any
month with a Sanctioned Load of upto 0.25 kW and consumption between 1 to 30 units (on
pro rata basis of 1 unit/day) in the first billing month.
The BPL Tariff is applicable only to individuals and not to institutions.
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption
Slab (kWh)
Fixed Charge
(Rs./Connection/
Month)
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
BPL Category 10 1.57 1.00
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption
Slab (kWh)
Fixed Charge
(Rs./Connection/
Month)
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
BPL Category 10 1.46 1.00
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 406 of 445
Consumption
Slab (kWh)
Fixed Charge
(Rs./Connection/
Month)
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
BPL Category 10 1.47 1.00
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption
Slab (kWh)
Fixed Charge
(Rs./Connection/
Month)
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
BPL Category 10 1.48 1.00
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption
Slab (kWh)
Fixed Charge
(Rs./Connection/
Month)
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
BPL Category 10 1.48 1.00
LT I (B): LT – Residential
This Tariff category is applicable for electricity used at Low/Medium Voltage for operating
various appliances used for purposes such as lighting, heating, cooling, cooking,
washing/cleaning, entertainment/leisure, water pumping in the following premises:
a) Private residential premises, Government/semi-Government residential quarters;
b) Premises used exclusively for worship, such as temples, gurudwaras, churches,
mosques, etc.; provided that halls, gardens or any other part of such premises that
may be let out for a consideration or used for commercial activities would be
charged at the applicable LT-II Tariff;
c) Government / Private / Co-operative Housing Colonies/complexes (where
electricity is used exclusively for domestic purposes) only for common facilities
such as Water Pumping / Street and other common area Lighting / Lifts /Parking
Lots/ Fire-fighting Pumps and other equipment, etc.;
d) Sports Clubs or facilities / Health Clubs or facilities / Gymnasium / Swimming Pool
/ Community Hall of Government / Private / Co-operative Housing
Colonies/complexes - provided that they are situated in the same premises, and are
for the exclusive use of the members and employees of such Housing
Colonies/complexes;
e) Telephone booths owned/operated by Persons with Disabilities/Handicapped
persons;
f) Residential premises used by professionals like Lawyers, Doctors, Engineers,
Chartered Accountants, etc., in furtherance of their professional activities, but not
including Nursing Homes and Surgical Wards or Hospitals;
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 407 of 445
g) Single-phase household Flour Mills (Ghar-ghanti) used only for captive purposes;
h) A residential LT consumer with consumption upto 500 units per month (current
month of supply) who undertakes construction or renovation activity in his existing
premises: such consumer shall not require a separate temporary connection, and
would be billed at this Residential Tariff rate;
Note:
This Tariff category shall also be applicable to consumers who are supplied power
at High Voltage for any of the purposes (a) to (k) above.
i) Consumers undertaking business or commercial / industrial / non-residential
activities from a part of their residence, whose monthly consumption is upto 300
units a month and annual consumption in the previous financial year was upto 3600
units. The applicability of this Tariff to such consumers will be assessed at the end
of each financial year. In case consumption has exceeded 3600 units in the previous
financial year, the consumer will thereafter not be eligible for the Tariff under this
category but be charged at the Tariff otherwise applicable for such consumption,
with prior intimation to him.
j) Entities supplied electricity at a single point at Low/Medium Voltage for residential
purposes, in accordance with the Electricity (Removal of Difficulties) Eighth Order,
2005, in the following cases:
(i) a Co-operative Group Housing Society which owns the premises, for making
electricity available to the members of such Society residing in the same
premises for residential purposes; and
(ii) a person, for making electricity available to its employees residing in the same
premises for residential purposes.
k) Crematoriums and Burial Grounds for all purposes, including lighting.
l) Temporary purposes for public religious functions like Ganesh Utsav, Navaratri,
Eid, Moharrum, Ram Lila, Diwali, Christmas, Guru Nanak Jayanti, etc., and for
areas where community prayers are held; and for functions to commemorate
anniversaries of personalities and National or State events for which Public
Holidays have been declared, such as Gandhi Jayanti, Ambedkar Jayanti,
Chhatrapati Shivaji Jayanti, Republic Day, Independence Day, etc.:
Provided that such temporary connection shall be subjected to 1.5 times of Fixed
Charges.
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption
Slab (kWh)
Fixed Charge /
Demand Charge$$
Wheeling
Charge
(Rs/kWh)
Energy
Charge
(Rs/kWh)
0-100 units 70 1.57 2.90
100-300 units 110 1.57 4.85
301-500 units 110 1.57 6.65
Above 500 units 135 1.57 7.80
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 408 of 445
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption
Slab (kWh)
Fixed Charge /
Demand Charge$$
Wheeling
Charge
(Rs/kWh)
Energy
Charge
(Rs/kWh)
0-100 units 75 1.46 3.05
100-300 units 115 1.46 5.00
301-500 units 115 1.46 6.65
Above 500 units 140 1.46 7.80
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Consumption
Slab (kWh)
Fixed Charge /
Demand Charge$$
Wheeling
Charge
(Rs/kWh)
Energy
Charge
(Rs/kWh)
0-100 units 80 1.47 3.05
100-300 units 120 1.47 5.00
301-500 units 120 1.47 6.70
Above 500 units 145 1.47 7.80
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption
Slab (kWh)
Fixed Charge /
Demand Charge$$
Wheeling
Charge
(Rs/kWh)
Energy
Charge
(Rs/kWh)
0-100 units 85 1.48 2.95
100-300 units 125 1.48 4.90
301-500 units 125 1.48 6.75
Above 500 units 155 1.48 7.85
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption
Slab (kWh)
Fixed Charge /
Demand Charge$$
Wheeling
Charge
(Rs/kWh)
Energy
Charge
(Rs/kWh)
0-100 units 90 1.48 2.90
100-300 units 130 1.48 4.90
301-500 units 130 1.48 6.75
Above 500 units 165 1.48 7.85
Note:
a) $$: The above Fixed Charges are for single-phase connections. A Fixed Charge of
Rs. 135 per month will be levied on Residential consumers availing 3-phase supply.
An Additional Fixed Charge of Rs.135 per 10 kW load or part thereof above 10 kW
load shall also be payable for FY 2020-21. This amount will increase to Rs. 140 per
month and per 10 KW, respectively, in FY 2021-22, and to Rs. 145 per month and
per 10 KW, respectively, in FY 2022-23, and Rs. 155 per month and per 10 KW,
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 409 of 445
respectively, in FY 2023-24, and Rs. 165 per month and per 10 KW, respectively, in
FY 2024-25
b) Professionals like Lawyers, Doctors, Professional Engineers, Chartered
Accountants, etc., occupying premises exclusively for conducting their profession,
shall not be eligible for this Tariff, and will be charged at the Tariff applicable to
the respective categories.
LT II: LT – Non-Residential or Commercial
Applicability:
This Tariff category is applicable for electricity used at Low/Medium voltage in non-
residential, non-industrial and/or commercial premises for commercial consumption meant
for operating various appliances used for purposes such as lighting, heating, cooling,
cooking, washing/cleaning, entertainment/ leisure and water pumping in, but not limited to,
the following premises:
a) Non-Residential, Commercial and Business premises, including Shopping Malls
and Showrooms;
b) Combined lighting and power supply for facilities relating to Entertainment,
including film studios, cinemas and theatres (including multiplexes), Hospitality,
Leisure, Meeting/Town Halls, and places of Recreation and Public Entertainment;
c) Offices, including Commercial Establishments;
d) Marriage Halls, Hotels / Restaurants, Ice-cream parlours, Coffee Shops, Guest
Houses, Internet / Cyber Cafes, Telephone Booths not covered under the LT I
category, and Fax / Photocopy shops;
e) Automobile and all other types of repairs, servicing and maintenance centres (unless
specifically covered under another Tariff category); Retail Gas Filling Stations,
Petrol Pumps and Service Stations, including Garages;
f) Tailoring Shops, Computer Training Institutes, Typing Institutes, Photo
Laboratories, Laundries, Beauty Parlours and Saloons;
g) Banks and ATM centres, Telephone Exchanges, TV Stations, Microwave Stations,
Radio Stations;
h) Common facilities, like Water Pumping / Lifts / Fire-Fighting Pumps and other
equipment / Street and other common area Lighting, etc., in Commercial
Complexes;
i) Sports Clubs/facilities, Health Clubs/facilities, Gymnasiums, Swimming Pools not
covered under any other category;
j) External illumination of monuments/ historical/ heritage buildings approved by
Maharashtra Tourism Development Corporation (MTDC) or the concerned Local
Authority;
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 410 of 445
k) Construction of all types of structures/ infrastructure such as buildings, bridges, fly-
overs, dams, Power Stations, roads, Aerodromes, tunnels for laying of pipelines for
all purposes;
Note:
Residential LT consumers with consumption above 500 units per month (current
month of supply) and who undertake construction or renovation activity in their
existing premises shall not require a separate Temporary category connection, and
shall be billed at the LT-II Commercial Tariff rate;
l) Milk Collection Centres;
m) Sewage Treatment Plants/ Common Effluent Treatment Plants for Commercial
Complexes not covered under the LT – Public Services or LT – Industry categories;
n) advertisements, hoardings (including hoardings fixed on lamp posts/installed along
roadsides), and other commercial illumination such as external flood-lights,
displays, neon signs at departmental stores, malls, multiplexes, theatres, clubs,
hotels and other such establishments
o) Temporary supply for any of the activity not covered under Residential category:
Provided that Temporary supply consumer shall pay 1.5 times applicable
Fixed/Demand Charges and applicable 1.25 times Energy Charges:
Provided further that temporary supply for operating Fire-Fighting pumps and
equipment in residential or other premises shall be charged as per the Tariff category
applicable to such premises.
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
(A) 0-20 kW Rs. 385 per month 1.57 5.70
(B) >20 kW and ≤ 50 kW
Rs. 320 per kVA
month
1.57 6.05
(C) > 50 kW
Rs. 320 per kVA
month
1.57 6.55
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 411 of 445
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
(A) 0-20 kW Rs. 405 per month 1.46 5.65
(B) >20 kW and ≤ 50 kW Rs. 335 per kVA month 1.46 6.05
(C) > 50 kW Rs. 335 per kVA month 1.46 6.60
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
(A) 0-20 kW Rs. 425 per month 1.47 5.45
(B) >20 kW and ≤ 50 kW Rs. 355 per kVA month 1.47 6.00
(C) > 50 kW Rs. 355 per kVA month 1.47 6.55
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
(A) 0-20 kW Rs. 450 per month 1.48 5.45
(B) >20 kW and ≤ 50 kW Rs. 375 per kVA month 1.48 5.95
(C) > 50 kW Rs. 375 per kVA month 1.48 6.50
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 412 of 445
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
(A) 0-20 kW Rs. 475 per month 1.48 5.40
(B) >20 kW and ≤ 50 kW Rs. 395 per kVA month 1.48 5.95
(C) > 50 kW Rs. 395 per kVA month 1.48 6.50
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Note:
The ToD Tariff is applicable to the LT-II (B) and (C) categories, and optionally available
to LT- II (A) category consumers having ToD meter installed.
LT III: LT- Industry:
LT III (A): LT - Industry upto 20 kW load
LT III (B): LT - Industry, above 20 kW load
Applicability:
This Tariff category is applicable for electricity for Industrial use, at Low/Medium Voltage,
for purposes of manufacturing and processing, including electricity used within such
premises for general lighting, heating/cooling, etc.
It is also applicable for use of electricity / power supply for Administrative Offices /
Canteens, Recreation Hall / Sports Club or facilities / Health Club or facilities/ Gymnasium
/ Swimming Pool exclusively meant for employees of the industry; lifts, water pumps, fire-
fighting pumps and equipment, street and common area lighting; Research and
Development units, dhobi/laundry, etc. -
Provided that all such facilities are situated within the same industrial premises and supplied
power from the same point of supply;
This Tariff category shall also be applicable for use of electricity / power supply by an
Information Technology (IT) or IT-enabled Services (ITeS) Unit as defined in the
applicable IT/ITeS Policy of Government of Maharashtra.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 413 of 445
It shall also be applicable for use of electricity / power supply for (but not limited to) the
following purposes:
a) Flour Mill, Dal Mill, Rice Mill, Poha Mill, Masala Mill, Saw Mill;
b) Ice Factory, Ice-cream manufacturing units, Milk Processing / Chilling Plants
(Dairy);
c) Engineering Workshops, Engineering Goods Manufacturing units; Printing Presses;
Transformer Repair Workshops; Tyre Retreading units; and Vulcanizing units;
d) Mining, Quarrying and Stone Crushing units;
e) Garment Manufacturing units;
f) LPG/CNG bottling plants, etc.;
g) Sewage Treatment Plant/ Common Effluent Treatment Plant for industries, and not
covered under the LT – Public Water Works category;
h) Start-up power for Generating Plants, i.e. the power required for trial run of a Power
Plant during Commissioning of the Unit and its Auxiliaries, and for its start-up after
planned or forced outage (but not for construction);
i) Brick Kiln (Bhatti);
j) Biotechnology Industries covered under the Biotechnology Policy of Government
of Maharashtra;
k) Cold Storages not covered under LT X (B) – Agriculture (Others);
l) Food (including seafood and meat) Processing units.
m) Stand-alone Research and Development units;
n) Auxiliary Consumption for Transmission Sub-stations;
o) Telecommunications Towers.
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
LT III(A): 0-20 kW Rs. 385 per month 1.57 5.55
LT III(B): Above 20kW Rs. 320 per kVA month 1.57 5.95
TOD Tariffs (Optional - in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
LT III(A): 0-20 kW Rs. 405 per month 1.46 5.55
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 414 of 445
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
LT III(B): Above 20kW Rs. 335 per kVA month 1.46 5.95
TOD Tariffs (Optional - in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
LT III(A): 0-20 kW Rs. 425 per month 1.47 5.55
LT III(B): Above 20kW Rs. 355 per kVA month 1.47 5.95
TOD Tariffs (Optional - in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
LT III(A): 0-20 kW Rs. 450 per month 1.48 5.45
LT III(B): Above 20kW Rs. 375 per kVA month 1.48 5.90
TOD Tariffs (Optional - in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
LT III(A): 0-20 kW Rs. 475 per month 1.48 5.45
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 415 of 445
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling
Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
LT III(B): Above 20kW Rs. 395 per kVA month 1.48 5.90
TOD Tariffs (Optional - in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Note:
a) The ToD Tariff is compulsorily applicable to LT III (B) (i.e., above 20 kW), and
optionally available to LT- III (A) (i.e., up to 20 kW) having ToD meter installed.
LT IV: Public Services
LT IV (A): LT - Government Educational Institutions and Hospitals
Applicability:
This Tariff category is applicable for electricity supply at Low/Medium Voltage for
Educational Institutions, such as Schools and Colleges; Health Care facilities, such as
Hospitals, Dispensaries, Clinics, Primary Health Care Centres, Diagnostic Centres and
Pathology Laboratories; Libraries and public reading rooms - of the State or Central
Government or Local Self-Government bodies such as Municipalities, Zilla Parishads,
Panchayat Samitis, Gram Panchayats, etc.;
It shall also be applicable for electricity used for Sports Clubs and facilities / Health Clubs
and facilities / Gymnasium / Swimming Pools / Hostels attached to such Educational
Institutions / Hospitals, provided that they are situated in the same premises and are meant
primarily for their students / faculty/ employees/ patients.
It shall also be applicable for Public Sanitary Conveniences.
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 385 per month 1.57 5.60
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 416 of 445
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 405 per month 1.46 5.60
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 425 per month 1.47 5.60
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 450 per month 1.48 5.60
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 417 of 445
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 475 per month 1.48 5.60
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Note:
a) The ToD Tariff is compulsorily applicable to the LT IV (A) category with Contract
Demand/Sanctioned Load above 20 kW; and optionally available to the LT IV (A)
category with Contract Demand/Sanctioned Load up to 20 kW having ToD meter
installed.
LT IV (B): LT - Public Services - Others
Applicability:
This Tariff category is applicable for electricity supply at Low/Medium Voltage for:
a) Educational Institutions, such as Schools and Colleges; Health Care facilities, such
as Hospitals, Dispensaries, Clinics, Primary Health Care Centres, Diagnostic
Centres and Pathology Laboratories; Libraries and public reading rooms - other than
those of the State or Central Government or Local Self-Government bodies such as
Municipalities, Zilla Parishads, Panchayat Samitis, Gram Panchayats, etc.
Sports Clubs and facilities / Health Clubs and facilities / Gymnasium / Swimming
Pools attached to such Educational Institutions /Health Care facilities, provided that
they are situated in the same premises and are meant primarily for their students /
faculty/ employees/ patients;
b) All Students Hostels affiliated to Educational Institutions;
c) All other Students’ or Working Men/Women’s Hostels;
d) Other types of Homes/Hostels, such as (i) Homes/Hostels for Destitutes, Disabled
Persons (physically or mentally handicapped persons, etc.) and mentally ill persons
(ii) Remand Homes (iii) Dharamshalas, (iv) Rescue Homes, (v) Orphanages -
subject to verification and confirmation by the Distribution Licensee’s concerned
Zonal Chief Engineer or equivalent;
e) All offices of Government and Municipal/ Local Authorities/ Local Self-
Government bodies, such as Municipalities, Zilla Parishads, Panchayat Samitis,
Gram Panchayats; Police Stations and Police Chowkies; Post Offices; Armed
Forces/Defence and Para-Military establishments;
f) Service-oriented Spiritual Organisations;
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 418 of 445
g) State or Municipal/Local Authority Transport establishments, including their
Workshops;
h) Fire Service Stations; Jails, Prisons; Courts;
i) Airports;
j) Ports and Jetties;
k) Railway/Metro/Monorail Stations, including Shops, Workshops, Yards, etc., if the
supply is at Low/ Medium Voltage.
l) Waste processing units not covered under LT IV category.
m) lighting of public streets/ thorough fares which are open for use by the general
public
Provided that Street lights in residential complexes, commercial complexes,
industrial premises, etc. will be billed at the Tariff of the respective applicable
categories.
n) Lighting in Public Gardens (i.e. which are open to the general public free of charge);
o) Traffic Signals and Traffic Islands;
p) Public Water Fountains;
q) Lighting of Such other public places open to the general public free of charge.
r) pumping of water, purification of water and allied activities relating to Public Water
Supply Schemes, Sewage Treatment Plants and waste processing units
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 385 per month 1.57 6.00
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 405 per month 1.46 6.00
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 419 of 445
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 425 per month 1.47 6.00
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 450 per month 1.48 6.00
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 475 per month 1.48 6.00
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Note:
a) The ToD Tariff is compulsorily applicable to the LT IV (B) category with Contract
Demand/Sanctioned Load above 20 kW; and optionally available to the LT IV (B)
category with Contract Demand/Sanctioned Load up to 20 kW having ToD meter
installed.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 420 of 445
LT V: LT – Electric Vehicle (EV) Charging Stations
Applicability:
This Tariff category is applicable for Electric Vehicle Charging Station including battery
swapping station for electric vehicle.
In case the consumer uses the electricity supply for charging his own electric vehicle at his
premises, the tariff applicable shall be as per the category of such premises.
Electricity consumption for other facilities at Charging Station such as restaurant, rest
rooms, convenience stores, etc., shall be charged at tariff applicable to Commercial
Category.
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 70 per kVA 1.57 3.93
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 70 per kVA 1.46 4.04
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 421 of 445
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 70 per kVA 1.47 4.03
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 70 per kVA 1.48 4.02
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption Slab
(kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 70 per kVA 1.48 4.02
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
LT VI (A): LT - Agriculture - Pumpsets
Applicability:
This Tariff category is applicable for motive power supplied for agricultural metered
pumping loads, and for one lamp of wattage up to 40 to be connected to the motive power
circuit for use in pump-houses at Low/Medium Voltage.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 422 of 445
It is also applicable for power supply for cane crushers and/or fodder cutters for self-use for
agricultural processing operations, but not for operating a flour mill, oil mill or expeller in
the same premises, either operated by a separate motor or a change of belt drive.
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption
Slab (kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 40 per HP 1.57 3.80
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption
Slab (kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 40 per HP 1.46 3.80
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Consumption
Slab (kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 40 per HP 1.47 3.80
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption
Slab (kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 40 per HP 1.48 3.80
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption
Slab (kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 40 per HP 1.48 3.80
Note:
a) Consumers who avail power supply at High Voltage for the above purposes shall
also be billed as per this Tariff category.
LT VI (B): LT – Agriculture– Others
Applicability:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 423 of 445
This Tariff category is applicable for use of electricity / power supply at Low / Medium
Voltage for:
a) Pre-cooling plants and cold storage units for Agricultural Products – processed or
otherwise;
b) Poultries exclusively undertaking layer and broiler activities, including Hatcheries;
c) High-Technology Agriculture (i.e. Tissue Culture, Green House, Mushroom
cultivation activities), provided the power supply is exclusively utilized for
purposes directly concerned with the crop cultivation process, and not for any
engineering or industrial process;
d) Floriculture, Horticulture, Nurseries, Plantations, Aquaculture, Sericulture, Cattle
Breeding Farms, etc.
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption
Slab (kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 90 per kW 1.57 5.30
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption
Slab (kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 90 per kW 1.46 5.30
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Consumption
Slab (kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 90 per kW 1.47 5.30
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption
Slab (kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 90 per kW 1.48 5.30
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption
Slab (kWh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kWh)
Energy Charge
(Rs/kWh)
All Units Rs. 90 per kW 1.48 5.30
Note:
a) Consumers who avail power supply at High Voltage for the above purposes shall
also be billed as per this Tariff category.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 424 of 445
HIGH TENSION (HT) TARIFF
HT I: HT – Industry
Applicability:
This Tariff category is applicable for electricity for Industrial use at Extra High Voltage
(132 kV/110 kV) and High Voltage (33 kV/11 kV) for purposes of manufacturing and
processing, including electricity used within such premises for general lighting,
heating/cooling, etc.
It is also applicable for use of electricity / power supply for Administrative Offices /
Canteen, Recreation Hall / Sports Club or facilities / Health Club or facilities/ Gymnasium
/ Swimming Pool exclusively meant for employees of the industry; lifts, water pumps, fire-
fighting pumps and equipment, street and common area lighting; Research and
Development units, etc.:
Provided that all such facilities are situated within the same industrial premises and supplied
power from the same point of supply.
This Tariff category shall be applicable for use of electricity / power supply by an
Information Technology (IT) or IT-enabled Services (ITeS) Unit as defined in the
applicable IT/ITes Policy of Government of Maharashtra.
It shall also be applicable for use of electricity / power supply for (but not limited to) the
following purposes:
a) Flour Mills, Dal Mills, Rice Mills, Poha Mills, Masala Mills, Saw Mills;
b) Ice Factories, Ice-cream manufacturing units, Milk Processing / Chilling Plants
(Dairy);
c) Engineering Workshops, Engineering Goods manufacturing units; Printing Presses;
Transformer Repair Workshops; Tyre Retreading units, and Vulcanizing units;
d) Mining, Quarrying and Stone Crushing units;
e) Garment Manufacturing units;
f) LPG/CNG bottling plants, etc.;
g) Sewage Treatment Plant/ Common Effluent Treatment Plant for industries, and not
covered under the HT – PWW category;
h) Start-up power for Generating Plants, i.e., the power required for trial run of a Power
Plant during Commissioning of the Unit and its Auxiliaries, and for its start-up after
planned or forced outage (but not for construction);
i) Brick Kiln (Bhatti);
j) Biotechnology Industries covered under the Biotechnology Policy of Government
of Maharashtra;
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 425 of 445
k) Cold Storages not covered under LT X (B) – Agriculture (Others);
l) Food (including Seafood and meat) Processing units.
m) Stand-alone Research and Development units,
n) Telecommunications Towers.
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 320 per kVA - 5.90
HV Rs. 320 per kVA 0.70 5.90
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours
0.00
0900 to 1200 hours
0.50
1200 to 1800 hours
0.00
1800 to 2200 hours
1.00
2200 to 0600 hours
-0.75
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 335 per kVA - 5.90
HV Rs. 335 per kVA 0.65 5.90
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours
0.00
0900 to 1200 hours
0.50
1200 to 1800 hours
0.00
1800 to 2200 hours
1.00
2200 to 0600 hours
-0.75
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 355 per kVA - 5.85
HV Rs. 355 per kVA 0.66 5.85
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours
0.00
0900 to 1200 hours
0.50
1200 to 1800 hours
0.00
1800 to 2200 hours 1.00
2200 to 0600 hours
-0.75
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 426 of 445
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 375 per kVA - 5.80
HV Rs. 375 per kVA 0.66 5.80
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours
0.00
0900 to 1200 hours
0.50
1200 to 1800 hours
0.00
1800 to 2200 hours
1.00
2200 to 0600 hours
-0.75
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 395 per kVA - 5.80
HV Rs. 395 per kVA 0.66 5.80
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours
0.00
0900 to 1200 hours
0.50
1200 to 1800 hours
0.00
1800 to 2200 hours
1.00
2200 to 0600 hours
-0.75
Note:
a) Demand Charge shall be applicable at the rate of 25% of the above rates on the
start-up demand contracted by the Power Plant (as referred to at (h) above) with
the Distribution Licensee.
HT II: HT- Commercial
Applicability:
This Tariff category is applicable for electricity used at Extra High Voltage (132 kV/110
kV) and High Voltage (33 kV/11 kV) in non-residential, non-industrial and/or commercial
premises for commercial consumption meant for operating various appliances used for
purposes such as lighting, heating, cooling, cooking, washing/cleaning, entertainment/
leisure and water pumping in, but not limited to, the following premises:
a) Non-Residential, Commercial and Business premises, including Shopping Malls
and Showrooms;
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 427 of 445
b) Combined lighting and power services for facilities relating to Entertainment,
including film studios, cinemas and theatres (including multiplexes), Hospitality,
Leisure, Meeting/Town Halls, and places of Recreation and Public Entertainment;
c) Offices, including Commercial Establishments;
d) Marriage Halls, Hotels / Restaurants, Ice-cream parlours, Coffee Shops, Guest
Houses, Internet / Cyber Cafes, Telephone Booths and Fax / Photocopy shops;
e) Automobile and all other types of repairs, servicing and maintenance centres (unless
specifically covered under another Tariff category); Retail Gas Filling Stations,
Petrol Pumps & Service Stations, including Garages;
f) Tailoring Shops, Computer Training Institutes, Typing Institutes, Photo
Laboratories, Laundries, Beauty Parlours and Saloons;
g) Banks and ATM centres, Telephone Exchanges, TV Stations, Micro Wave Stations,
Radio Stations;
h) Common facilities, like Water Pumping / Lifts / Fire-Fighting Pumps and other
equipment / Street and other common area Lighting, etc., in Commercial
Complexes;
i) Sports Clubs/facilities, Health Clubs/facilities, Gymnasiums, Swimming Pools not
covered under any other category;
j) External illumination of monuments/ historical/heritage buildings approved by
Maharashtra Tourism Development Corporation (MTDC) or the concerned Local
Authority;
k) Construction of all types of structures/ infrastructure such as buildings, bridges, fly-
overs, dams, Power Stations, roads, Aerodromes, tunnels for laying of pipelines for
all purposes;
Note:
Residential LT consumers with consumption above 500 units per month (current
month of supply) and who undertake construction or renovation activity in their
existing premises shall not require a separate Temporary category connection but
be billed at the LT-II Commercial Tariff;
l) Milk Collection Centres;
m) Sewage Treatment Plant/ Common Effluent Treatment Plant for Commercial
Complexes, not covered under the Public Services or Industrial category;
n) advertisements, hoardings (including hoardings fixed on lamp posts/installed along
roadsides), and other commercial illumination such as external flood-lights,
displays, neon signs at departmental stores, malls, multiplexes, theatres, clubs,
hotels and other such establishments;
o) Temporary supply for any of the activity not covered under any other HT category:
Provided that Temporary supply consumer shall pay 1.5 times applicable
Fixed/Demand Charges and 1.25 times applicable Energy Charges.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 428 of 445
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 320 per kVA - 6.23
HV Rs. 320 per kVA 0.70 6.23
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours
0.00
0900 to 1200 hours
0.50
1200 to 1800 hours
0.00
1800 to 2200 hours
1.00
2200 to 0600 hours
-0.75
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 335 per kVA - 6.23
HV Rs. 335 per kVA 0.65 6.23
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours
0.00
0900 to 1200 hours
0.50
1200 to 1800 hours
0.00
1800 to 2200 hours
1.00
2200 to 0600 hours
-0.75
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 355 per kVA - 6.09
HV Rs. 355 per kVA 0.66 6.09
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours
0.00
0900 to 1200 hours
0.50
1200 to 1800 hours
0.00
1800 to 2200 hours 1.00
2200 to 0600 hours
-0.75
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 375 per kVA - 6.04
HV Rs. 375 per kVA 0.66 6.04
TOD Tariffs (in addition to above base Tariff)
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 429 of 445
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
0600 to 0900 hours
0.00
0900 to 1200 hours
0.50
1200 to 1800 hours
0.00
1800 to 2200 hours
1.00
2200 to 0600 hours
-0.75
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 395 per kVA - 6.04
HV Rs. 395 per kVA 0.66 6.04
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours
0.00
0900 to 1200 hours
0.50
1200 to 1800 hours
0.00
1800 to 2200 hours
1.00
2200 to 0600 hours
-0.75
Note:
a) A consumer in the HT II category requiring single-point supply for the purpose of
downstream consumption by separately identifiable entities shall have to operate as
a Franchisee authorised as such by the Distribution Licensee; or such downstream
entities shall be required to take separate individual connections and be charged
under the Tariff category applicable to them.
HT III: HT - Group Housing Society (Residential)
Applicability:
Entities supplied electricity at a single point at High Voltage for residential purposes in
accordance with the Electricity (Removal of Difficulties) Eighth Order, 2005, in the
following cases:
a) a Co-operative Group Housing Society which owns the premises, for making
electricity available to the members of such Society residing in the same premises
for residential purposes; and
b) a person, for making electricity available to its employees residing in the same
premises for residential purposes.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 430 of 445
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
All Units Rs. 320 per kVA 0.70 6.19
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
All Units Rs. 335 per kVA 0.65 6.19
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
All Units Rs. 355 per kVA 0.66 5.99
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
All Units Rs. 375 per kVA 0.66 5.99
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
All Units Rs. 395 per kVA 0.66 5.99
HT IV- Railways/Metro/Monorail
This Tariff category is applicable to power supply at Extra High Voltage (132 kV/110 kV)
and High Voltage (33 kV/11 kV) for Railways, Metro and Monorail, including Stations and
Shops, Workshops, Yards, etc.
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 320 per kVA - 5.55
HV Rs. 320 per kVA 0.70 5.55
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 335 per kVA - 5.36
HV Rs. 335 per kVA 0.65 5.36
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 431 of 445
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 355 per kVA - 5.55
HV Rs. 355 per kVA 0.66 5.55
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 375 per kVA - 5.46
HV Rs. 375 per kVA 0.66 5.46
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 395 per kVA - 5.46
HV Rs. 395 per kVA 0.66 5.46
HT V - Public Services
HT V – (A): HT - Government Educational Institutions and Hospitals
Applicability:
This Tariff category is applicable for electricity supply at Extra High Voltage (132 kV/110
kV) and High Voltage (33 kV/11 kV) for Educational Institutions, such as Schools and
Colleges; Health Care facilities, such as Hospitals, Dispensaries, Clinics, Primary Health
Care Centres, Diagnostic Centres and Pathology Laboratories; Libraries and public reading
rooms - of the State or Central Government, Local Self-Government bodies such as
Municipalities, Zilla Parishads, Panchayat Samitis, Gram Panchayats, etc.;
It shall also be applicable for electricity used for Sports Clubs and facilities / Health Clubs
and facilities / Gymnasium / Swimming Pools attached to such Educational Institutions /
Health Care facilities, provided that they are situated in the same premises and are meant
primarily for the students / faculty/ employees/ patients of such Educational Institutions and
Hospitals.
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 320 per kVA - 5.61
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 432 of 445
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
HV Rs. 320 per kVA 0.70 5.61
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 335 per kVA - 5.61
HV Rs. 335 per kVA 0.65 5.61
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 355 per kVA - 5.61
HV Rs. 355 per kVA 0.66 5.61
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 375 per kVA - 5.43
HV Rs. 375 per kVA 0.66 5.43
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 433 of 445
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 395 per kVA - 5.43
HV Rs. 395 per kVA 0.66 5.43
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
HT V - (B): Public Service - Others
This Tariff category is applicable for electricity supply at Extra High Voltage (132 kV/110
kV) and High Voltage (33 kV/11 kV) for:
a) Educational Institutions, such as Schools and Colleges; Health Care facilities, such
as Hospitals, Dispensaries, Clinics, Primary Health Care Centres, Diagnostic
Centres and Pathology Laboratories; Libraries and public reading rooms - other than
those of the State or Central Government, Local Self-Government bodies such as
Municipalities, Zilla Parishads, Panchayat Samities, Gram Panchayats, etc.
Sports Clubs and facilities / Health Clubs and facilities / Gymnasium / Swimming
Pools attached to such Educational Institutions / Health Care facilities, provided that
they are situated in the same premises and are meant primarily for their students /
faculty/ employees/ patients;
b) All offices of Government and Municipal/ Local Authorities/ Local Self-
Government bodies, such as Municipalities, Zilla Parishads, Panchayat Samitis,
Gram Panchayats; Police Stations and Police Chowkies; Post Offices; Armed
Forces/Defence and Para-Military establishments;
c) Service-oriented Spiritual Organisations;
d) State or Municipal/Local Authority Transport establishments, including their
Workshops;
e) Fire Service Stations; Jails, Prisons; Courts;
f) Airports;
g) Ports and Jetties.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 434 of 445
h) Waste processing units.
i) pumping of water, purification of water and allied activities relating to Public Water
Supply Schemes, Sewage Treatment Plants and waste processing units.
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 320 per kVA - 6.24
HV Rs. 320 per kVA 0.70 6.24
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 335 per kVA - 6.24
HV Rs. 335 per kVA 0.65 6.24
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 355 per kVA - 6.04
HV Rs. 355 per kVA 0.66 6.04
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 435 of 445
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 375 per kVA - 6.04
HV Rs. 375 per kVA 0.66 6.04
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
EHV Rs. 395 per kVA - 6.14
HV Rs. 395 per kVA 0.66 6.14
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
HT VI: HT – Electric Vehicle (EV) Charging Stations
Applicability:
This Tariff category is applicable for Electric Vehicle Charging Station including battery
swapping station for Electric Vehicle.
In case the consumer uses the electricity supply for charging his own electric vehicle at his
premises, the tariff applicable shall be as per the category of such premises.
Electricity consumption for other facilities at Charging Station such as restaurant, rest
rooms, convenience stores, etc., shall be charged at tariff applicable to Commercial
Category.
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 436 of 445
Tariff w.e.f. 1 April, 2020 to 31 March, 2021
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
All Units Rs. 70 per kVA 0.70 4.61
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2021 to 31 March, 2022
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
All Units Rs. 70 per kVA 0.65 4.66
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2022 to 31 March, 2023
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
All Units Rs. 70 per kVA 0.66 4.66
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Tariff w.e.f. 1 April, 2023 to 31 March, 2024
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
All Units Rs. 70 per kVA 0.66 4.66
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 437 of 445
Tariff w.e.f. 1 April, 2024 to 31 March, 2025
Consumption Slab
(kVAh)
Fixed Charge /
Demand Charge
Wheeling Charge
(Rs/kVAh)
Energy Charge
(Rs/kVAh)
All Units Rs. 70 per kVA 0.66 4.66
TOD Tariffs (in addition to above base Tariff)
0600 to 0900 hours 0.00
0900 to 1200 hours 0.50
1200 to 1800 hours 0.00
1800 to 2200 hours 1.00
2200 to 0600 hours -0.75
MISCELLANEOUS AND GENERAL CHARGES
Fuel Adjustment Charge (FAC) Component of Z-factor Charge
The Fuel Adjustment Charge (FAC) component of the Z-factor Charge will be determined
in accordance with the formula specified in the relevant Multi Year Tariff Regulations and
any directions that may be given by the Commission from time to time, and will be
applicable to all consumer categories for their entire consumption.
In case of any variation in the fuel prices and power purchase prices, the Distribution
Licensee shall pass on the adjustments through the FAC component of the Z-factor Charge
accordingly.
The details of the applicable ZFAC for each month shall be available on the Distribution
Licensee’s website www.adanielectricity.com
Electricity Duty and Tax on Sale of Electricity
Electricity Duty and Tax on Sale of Electricity shall be levied in addition to the Tariffs
approved by the Commission, and in accordance with the Government of Maharashtra
stipulations from time to time. The rate and the reference number of the Government
Resolution/ Order under which the Electricity Duty and Tax on Sale of Electricity are
applied shall be stated in the consumers’ energy bills. A copy of such Resolution / Order
shall be provided on the Distribution Licensee’s website www.adanielectricity.com
Power Factor Computation
Where the average Power Factor measurement is not possible through the installed meter,
the following formula for calculating the average Power Factor during the billing period
shall be applied:
Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25
Page 438 of 445
Total (kWh)
Average Power Factor =
Total (kVAh)
Wherein the kVAh is = √∑(KWh)2 + ∑(RkVAh Lag + RkVAh Lead )2
Further, average PF so computed can be considered as leading or lagging based on the
following test:
If “RkVAh lead” > “RkVAh lag” then “Average P.F.” is to be treated as “Lead P.F.”
If “RkVAh lead” = < “RkVAh lag” then “Average P.F.” is to be treated as “Lag
P.F.”
Power Factor Incentive
Applicable for LT II: Non-Residential/Commercial [LT II (B), LT II (C)] (for Contract
Demand/Sanctioned Load above 20 kW), LT III (B): Industry above 20 kW, LT IV : Public
Service [LT IV (A) and LT IV (B)], and LT VI – Electric Vehicle (EV) Charging Stations
having contract demand/sanctioned load above 20 kW.
Whenever the average Power Factor is more than 0.95 (lag or lead) and upto 1, an incentive
shall be given at the rate of the following percentages of the amount of the monthly
electricity bill, excluding Taxes and Duties:
Sl. Range of Power Factor Power Factor Level Incentive
1 0.951 to 0.954 0.95 0.0%
2 0.955 to 0.964 0.96 0.5%
3 0.965 to 0.974 0.97 1.0%
4 0.975 to 0.984 0.98 1.5%
5 0.985 to 0.994 0.99 2.5%
6 0.995 to 1.000 1.00 3.5%
Note: Power Factor shall be measured/computed upto 3 decimals, after universal rounding
off.
Power Factor Penalty
Applicable for LT II: Non-Residential/Commercial [LT II (B), LT II (C)] (for Contract
Demand/Sanctioned Load above 20 kW), LT III (B): Industry above 20 kW, LT IV : Public
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Service [LT IV (A) and LT IV (B)], and LT VI – Electric Vehicle (EV) Charging Stations
having contract demand/sanctioned load above 20 kW.
Whenever the average PF is less than 0.9 (lag or lead), penal charges shall be levied at the
rate of the following percentages of the amount of the monthly electricity bill, excluding
Taxes and Duties:
Sl. Range of Power Factor Power Factor Level Penalty
1 0.895 to 0.900 0.90 0.0%
2 0.885 to 0.894 0.89 1.0%
3 0.875 to 0.884 0.88 1.5%
4 0.865 to 0.874 0.87 2.0%
5 0.855 to 0.864 0.86 2.5%
6 0.845 to 0.854 0.85 3.0%
7 0.835 to 0.844 0.84 3.5%
8 0.825 to 0.834 0.83 4.0%
9 0.815 to 0.824 0.82 4.5%
10 0.805 to 0.814 0.81 5.0%
... ... ... ...
Note: Power Factor shall be measured/computed upto 3 decimals, after universal rounding
off.
Prompt Payment Discount
A prompt payment discount of one percent of the monthly bill (excluding Taxes and Duties)
shall be provided to consumers for payment of electricity bills within 7 days from the date
of their issue.
Delayed Payment Charges
In case the electricity bill is not paid within the due date mentioned on the bill, delayed
payment charges on the billed amount, including the taxes, cess, duties, etc., shall be levied
on simple interest basis at the rate of 1.25% on the billed amount for the first month of
delay.
Discount for digital payment
A discount of 0.25% of the monthly bill (excluding taxes and duties), subject to a cap of
Rs. 500/-, shall be provided to LT category consumers for payment of electricity bills
through various modes of digital payment such as credit cards, debit cards, UPI, BHIM,
internet banking, mobile banking, mobile wallets, etc.
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Discount for E-Bill
A discount of Rs. 10 per consumer per bill shall be provided for those opting for E-bills
through written/email confirmation. No hard copy of the bills shall be generated for such
consumers.
Rate of Interest on Arrears
The rate of interest chargeable on the arrears of payment of billed dues shall be as given
below:
Sr.
No.
Delay in Payment (months) Interest Rate
per annum (%)
1 Payment made after 60 days and before 90 days from the date
of billing
12%
2 Payment made after 90 days from the date of billing 15%
Load Factor Incentive
Consumers having Load Factor above 75% and upto 85% will be entitled to an incentive in
the form of a rebate of 0.75% on the Energy Charges for every percentage point increase in
Load Factor from 75% to 85%. Consumers having a Load Factor above 85 % will be
entitled to a rebate of 1% on the Energy Charges for every percentage point increase in
Load Factor from 85%. The total rebate will be subject to a ceiling of 15% of the Energy
Charges applicable to the consumer.
This incentive is applicable only to consumers in the Tariff categories HT I: Industry, HT
II: Commercial and HT V: Public Services - HT V (A) and HT V (B) only.
The Load Factor incentive will be available only if the consumer has no arrears with the
Distribution Licensee, and payment is made within seven days from the date of the
electricity bill. However, it will be available to consumers in whose case payment of arrears
in instalments has been allowed by the Distribution Licensee, and such payment is being
made as scheduled. The Distribution Licensee shall take a commercial decision on the
schedule for such payments.
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The Load Factor is to be computed as follows:
Load Factor = ______Consumption during the month in MU__________
Maximum Consumption possible during the month in MU
Maximum consumption possible = Contract Demand (kVA) × Unity Power Factor
× (Total no. of hours during the month, less actual interruptions hours recorded on meter
for billing period)
In case the consumer exceeds its Contract Demand (including during the non-peak hours,
i.e., 22:00 hrs to 06:00 hrs.) in any particular month, the Load Factor Incentive will not be
payable to the consumer in that month.
Penalty for exceeding Contract Demand
In case a consumer (availing Demand-based Tariff) exceeds his Contract Demand, he will
be billed at the applicable Demand Charge rate for the Demand actually recorded, and also
be charged an additional amount at the rate of 150% of the applicable Demand Charge (only
for the Demand in excess of the Contract Demand).
Under these circumstances, the consumer shall not be liable for any other action under
Section 126 of the EA, 2003, since the penal additional Demand Charge provides for the
penalty that the consumer is liable to pay for exceeding his Contract Demand. In case a
consumer exceeds his Contract Demand on more than three occasions in a calendar year,
the action to be taken would be governed by the provisions of the Supply Code Regulations.
Additional Demand Charges for Consumers having Captive Power Plant
For consumers having a Captive Power Plant, additional Demand Charges at the rate of Rs.
20/kVA/month shall be payable only on the extent of the Stand-by demand component and
not on the entire Contract Demand. The additional Demand Charges will be levied on the
Stand-by component only if the consumer’s demand exceeds his Contract Demand.
Consumers’ Security Deposit
1) Subject to the provisions of Section 47(5) of the Electricity Act, 2003, the
Distribution Licensee shall require any person to whom supply of electricity has
been sanctioned to deposit an amount as security in accordance with the provisions
of Section 47(1) (a).
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2) The amount of the Security Deposit shall be equal to the average of three months’
of billing or the billing cycle period, whichever is lesser. For determining the
average billing, the average of the billing to the consumer for the last twelve months
or, where supply has been provided for a shorter period, the average of the billing
of such shorter period, shall be considered
3) Where the Distribution Licensee requires security from a consumer at the time of
commencement of service, the amount of such security shall be estimated based on
the Tariff category and Contract Demand/Sanctioned Load, Load Factor, diversity
factor and number of working shifts of the consumer.
4) The Distribution Licensee shall re-calculate the amount of Security Deposit
payable, based on the actual billing of the consumer, once in each financial year.
5) Where the amount of Security Deposit maintained by the consumer is higher than
the security required to be maintained under the Supply Code Regulations, the
Distribution Licensee shall refund the excess amount to the consumer in a single
instalment.
6) Such refund shall be made upon a request of the person who gave the security, and
with intimation to the consumer if different from such person; and shall be made, at
the option of such person, by way of adjustment in the next bill or by way of a
separate cheque payment within 30 days from the receipt of such request;
7) No refund shall be required to be made where the amount of refund does not exceed
10% of the amount of the Security Deposit required to be maintained by the
consumer or Rs. 300/-, whichever is higher.
8) Where the amount of security re-assessed as above is higher than the Security
Deposit of the consumer, the Distribution Licensee shall be entitled to raise a
demand for additional security deposit. The consumer shall be given not less than
30 days to deposit the additional security pursuant to such demand.
9) Upon termination of supply, the Distribution Licensee shall, after recovery of all
amounts due, refund the remaining amount of security to the person who deposited
it, with intimation to the consumer if different from such person.
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10) A consumer - (i) with a consumption of electricity of not less than one lakh kilo-
Watt hours per month; and (ii) with no undisputed sums payable to the Distribution
Licensee under Section 56 of the Electricity Act, 2003 may, at the option of such
consumer, deposit security by way of cash, irrevocable letter of credit or
unconditional Bank Guarantee issued by a scheduled commercial Bank.
11) The Distribution Licensee shall pay interest on the amount of Security Deposit in
cash (including by cheque or demand draft) at the Bank Rate declared by the
Reserve Bank of India as on 1st April of the financial year for which the interest is
payable, provided that the amount of such cash Deposit maintained by the consumer
is at least Rs. 50/-.
12) Interest on the Security Deposit made in cash shall be payable from the date of its
deposit by the consumer till the date of dispatch of the refund by the Distribution
Licensee.
Definitions
Maximum Demand:
Maximum Demand in kilo-Watts or kilo-Volt Amperes, in relation to any period shall,
unless otherwise provided in any general or specific Order of the Commission, mean twice
the highest number of kilo-watt-hours or kilo-Volt Ampere hours supplied and taken during
any consecutive thirty-minute blocks in that period.
Contract Demand:
Contract Demand means the demand in kilo-Watt (kW) or kilo–Volt Amperes (kVA),
mutually agreed between the Distribution Licensee and the consumer as entered into in the
agreement or agreed through other written communication. (For conversion of kW into
kVA, the Power Factor of 0.80 shall be applied.)
Sanctioned Load:
Sanctioned Load means the load in kW mutually agreed between the Distribution Licensee
and the consumer.
Billing Demand - LT Tariff categories:
Monthly Billing Demand will be the higher of the following:
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a) 65% of the actual Maximum Demand recorded in the month during 0600 hours to
2200 hours;
b) 40% of the Contract Demand.
Note:
• Only the Demand registered during the period 0600 to 2200 Hrs. will be considered
for determination of the Billing Demand.
• In case of a change in Contract Demand, the above period will be reckoned from
the month following the month in which the change in Contract Demand is effected.
Billing Demand - HT Tariff categories:
Monthly Billing Demand will be the higher of the following:
a) Actual Maximum Demand recorded in the month during 0600 hours to 2200 hours;
b) 75% of the highest Billing Demand recorded during the preceding eleven months,
subject to the limit of Contract Demand;
c) 55% of the Contract Demand*.
*For FY 2020-21: 55%, FY 2021-22: 60%, FY 2022-23: 65%, FY 2023-24: 70%, FY
2024-25: 75%
Note:
• Only the Demand registered during the period 0600 to 2200 Hrs. will be considered
for determination of the Billing Demand.
In case of a change in Contract Demand, the above period will be reckoned from the month
following the month in which the change of Contract Demand is effected.
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APPENDIX – 1: List of persons who attended the Technical
Validation Session (TVS) held on 24 December, 2019
Sr. No. Name of Representative Organization
1. Shri Kandarp Patel AEML-D
2. Shri Kapil Sharma AEML-D
3. Shri Kishor Patil AEML-D
4. Shri Vivek Mishra AEML-D
5. Shri Anupam Patra AEML-D
APPENDIX – 2: List of persons who attended Public Hearing
dated 04 February, 2020
Sr. No. Name of Representative Organization
1. Dr. Ashok Pendse TBIA
2. Shri Rakshpal Abrol Individual
3. Shri N. Ponrathnam Individual
4. Ms. S.R. Mehendale Tata Power
5. Shri Madhav Tekawade VIPL
6. Shri Saurabh Gupta NUPLLP
7. Shri Rakesh Bodalia VPPL
8. Shri Somit Sen TOI
9. Ms. Priyanka Gharote KEIPL
10. Shri Suresh C. Solanki Individual
11. Shri Kishor Patil AEML-D
12. Shri Vivek Mishra AEML-D
13. Shri Anupam Patra AEML-D
14. Shri Abaji Naralkar AEML-D
15. Shri Kapil Sharma AEML-D
16. Shri Sachin Gupta AEML-D
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