apgcl tariff order dated 24.07.2015 tariff order dated 24.07.2015.pdf · 6.4 gas supply position...

ASSAM ELECTRICITY REGULATORY COMMISSION

(AERC)

TARIFF ORDER

TRUING UP OF FY 2013-14, APR OF FY 2014-15 AND

ARR & TARIFF FOR FY 2015-16

Assam Power Generation Corporation Limited (APGCL)

Petition No. 9/2015


A.S.E.B. Campus, Dwarandhar,

G. S. Road, Sixth Mile, Guwahati - 781 022

Website: www.aerc.gov.in Email: [email protected]

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CONTENTS

ORDER

1 INTRODUCTION ........................................................................... 1

1.1 CONSTITUTION OF THE COMMISSION ............................................................ 1

1.2 TARIFF RELATED FUNCTIONS OF THE COMMISSION ................................... 1

1.3 BACKGROUND AND BRIEF HISTORY ............................................................... 2

1.4 PROCEDURAL HISTORY ................................................................................... 5

1.5 ADMISSION OF PETITION AND HEARING PROCESS ...................................... 5

1.6 STATE ADVISORY COMMITTEE MEETING ....................................................... 7

2 SUMMARY OF ARR AND TARIFF PETITION .............................. 8

2.1 TRUE UP FOR FY 2013-14 ................................................................................. 8

2.2 APR FOR FY 2014-15 AND REVISED ARR AND GENERATION TARIFF FOR

FY 2015-16 ....................................................................................................................... 9

3 SUMMARY OF OBJECTIONS RAISED, RESPONSES OF

APGCL AND COMMISSION’S COMMENTS ...................................... 12

4 TRUING UP FOR FY 2013-14 ..................................................... 38

4.1 METHODOLOGY FOR TRUING UP .................................................................. 38

4.2 BACKGROUND ................................................................................................. 39

4.3 TRUE-UP FOR FY 2013-14 ............................................................................... 39

4.3.1 OPERATING CAPACITY ................................................................................... 39

4.3.2 AVAILABILITY / CAPACITY INDEX ................................................................... 40

4.3.3 PLANT LOAD FACTOR (PLF) ........................................................................... 41

4.3.4 AUXILIARY ENERGY CONSUMPTION ............................................................. 42

4.3.5 GROSS GENERATION AND NET GENERATION ............................................. 44

4.3.6 GROSS STATION HEAT RATE (GSHR) ........................................................... 45

4.3.7 FUEL COST ....................................................................................................... 47

4.3.8 INCENTIVE FOR GENERATION ....................................................................... 48

4.3.9 EMPLOYEE EXPENSES ................................................................................... 50

4.3.10 REPAIR AND MAINTENANCE (R&M) EXPENSES ........................................... 50

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4.3.11 ADMINISTRATION AND GENERAL (A&G) EXPENSES ................................... 51

4.3.12 DEPRECIATION ................................................................................................ 51

4.3.13 INTEREST AND FINANCE CHARGES .............................................................. 54

4.3.14 INTEREST ON WORKING CAPITAL ................................................................. 55

4.3.15 PRIOR PERIOD ITEMS ..................................................................................... 56

4.3.16 RETURN ON EQUITY (ROE) ............................................................................ 57

4.3.17 INCOME TAX..................................................................................................... 57

4.3.18 OTHER INCOME ............................................................................................... 58

4.3.19 OTHER RECEIPT .............................................................................................. 58

4.3.20 REVENUE FROM SALE OF POWER ................................................................ 58

4.3.21 SUMMARY OF TRUE-UP FOR FY 2013-14 ...................................................... 59

5 ANNUAL PERFORMANCE REVIEW FOR FY 2014-15 .............. 60

5.1 ANNUAL PERFORMANCE REVIEW ................................................................. 60





5.1.5 GROSS STATION HEAT RATE ......................................................................... 62

5.1.6 FUEL COST ....................................................................................................... 64

5.1.7 EMPLOYEE EXPENSES ................................................................................... 65

5.1.8 REPAIR AND MAINTENANCE EXPENSES (R&M EXPENSES) ....................... 65

5.1.9 ADMINISTRATION AND GENERAL EXPENSES (A&G EXPENSES) ............... 66

5.1.10 DEPRECIATION ................................................................................................ 67

5.1.11 INVESTMENT PLAN.......................................................................................... 68



5.1.14 INCOME TAX..................................................................................................... 71


5.1.16 OTHER INCOME ............................................................................................... 72

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5.1.17 REVENUE FROM SALE OF POWER ................................................................ 73

5.1.18 REVIEW OF ARR FOR FY 2014-15 .................................................................. 74

6 REVISED ARR AND GENERATION TARIFF FOR FY 2015-16 . 75

6.1 INTRODUCTION ............................................................................................... 75

6.2 GENERATION CAPACITY FOR FY 2015-16 ..................................................... 75

6.3 BRIEF STATUS OF APGCL POWER STATIONS ............................................. 75

6.3.1 NAMRUP THERMAL POWER STATION (NTPS) (119.5 MW) ........................... 76

6.3.2 LAKWA THERMAL POWER STATION (LTPS) (157.2 MW) .............................. 76

6.3.3 KARBI LANGPI HYDRO ELECTRIC PROJECT (KLHEP) (100 MW) ................. 77

6.3.4 MYNTRIANG SHEP STAGE I (9 MW = 3X3 MW) & STAGE II (4.5 MW= 3X1.5

MW) ................................................................................................................... 77

6.3.5 NAMRUP REPLACEMENT POWER PROJECT (NRPP) ................................... 77

6.4 GAS SUPPLY POSITION .................................................................................. 77

6.5 REVISED ARR AND GENERATION TARIFF FOR FY 2015-16 ......................... 78





6.5.5 GROSS STATION HEAT RATE (GSHR) ........................................................... 82

6.5.6 FUEL COST ....................................................................................................... 82

6.5.7 OPERATION AND MAINTENANCE (O&M) EXPENSES ................................... 85

6.5.8 FINANCING OF THE CAPITAL INVESTMENT .................................................. 90

6.5.9 DEPRECIATION ................................................................................................ 93




6.5.13 SPECIAL R&M EXPENSES (FOR KHLEP, LTPS UNIT 2 & UNIT 7) VIDE

REVIEW ORDER DATED JULY 07, 2014 .......................................................... 99

6.5.14 INCOME TAX..................................................................................................... 99

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6.5.15 OTHER INCOME ............................................................................................. 100

6.5.16 SUMMARY ...................................................................................................... 100

6.5.17 GENERATION TARIFF FOR FY 2015-16 ........................................................ 101

6.5.18 EFFECTUATION OF GENERATION TARIFF .................................................. 101

7 COMPLIANCE OF DIRECTIVES & NEW DIRECTIVES ........... 102

7.1 COMPLIANCE OF OLD DIRECTIVES ............................................................. 102

7.2 NEW DIRECTIVES .......................................................................................... 107

ANNEXURE-1 .................................................................................... 108

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TABLES

TABLE 2.1: SUMMARY OF TRUE-UP FOR FY 2013-14 AS SUBMITTED BY APGCL (RS.

CRORE) ................................................................................................................................ 8

TABLE 2.2: APR FOR FY 2014-15 AS SUBMITTED BY APGCL (RS. CRORE) ................... 9

TABLE 4.1: OPERATING GENERATION CAPACITY OF APGCL FOR FY 2013-14 .......... 40

TABLE 4.2: TARGET AVAILABILITY / CAPACITY INDEX FOR RECOVERY OF FULL

FIXED CHARGES ............................................................................................................... 40

TABLE 4.3: ACTUAL AVAILABILITY / CAPACITY INDEX FOR FY 2013-14 AS SUBMITTED

BY APGCL (%) .................................................................................................................... 40

TABLE 4.4: TARGET PLF FOR EFFICIENCY INCENTIVE ................................................. 41

TABLE 4.5: PLF APPROVED BY THE COMMISSION AND ACTUALS AS SUBMITTED BY

APGCL FOR FY 2013-14 .................................................................................................... 42

TABLE 4.6: PLF APPROVED FOR TRUING UP FOR FY 2013-14 (%) ............................... 42

TABLE 4.7: AUXILIARY ENERGY CONSUMPTION FOR FY 2013-14 ............................... 43

TABLE 4.8: BREAK-UP OF AUXILIARY ENERGY CONSUMPTION SUBMITTED BY

APGCL FOR FY 2013-14 .................................................................................................... 43

TABLE 4.9: AUXILIARY ENERGY CONSUMPTION APPROVED FOR TRUING UP FOR FY

2013-14 ............................................................................................................................... 44

TABLE 4.10: GROSS GENERATION AND NET GENERATION FOR FY 2013-14(MU) ..... 44

TABLE 4.11: GROSS AND NET GENERATION APPROVED FOR TRUING UP FOR FY

2013-14(MU) ....................................................................................................................... 45

TABLE 4.12: GROSS STATION HEAT RATE FOR FY 2013-14(KCAL/KWH) .................... 46

TABLE 4.13: ACTUAL WEIGHTED AVERAGE GCV AND PRICE OF GAS CONSIDERED

BY THE COMMISSION FOR TRUING UP FOR FY 2013-14 .............................................. 47

TABLE 4.14: APPROVED FUEL COST FOR TRUING UP FOR FY 2013-14 ...................... 48

TABLE 4.15: INCENTIVE COMPUTATION FOR THERMAL STATIONS FOR FY 2013-14 49

TABLE 4.16: INCENTIVE COMPUTATION FOR HYDRO STATION FOR FY 2013-14 ....... 49

TABLE 4.17: DEPRECIATION APPROVED FOR TRUE-UP FOR FY 2013-14(RS. CRORE)

............................................................................................................................................ 53

TABLE 4.18: DEPRECIATION ON ASSETS CREATED OUT OF GRANTS/SUBSIDIES AND

CONSUMER CONTRIBUTION (RS. CRORE) .................................................................... 54

TABLE 4.19: INTEREST AND FINANCE CHARGES APPROVED BY THE COMMISSION

FOR FY 2013-14(RS. CRORE) ........................................................................................... 55

TABLE 4.20: INTEREST ON WORKING CAPITAL APPROVED BY THE COMMISSION

FOR FY 2013-14(RS. CRORE) ........................................................................................... 56

TABLE 4.21: OTHER INCOME (RS. CRORE) .................................................................... 58

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TABLE 4.222: SUMMARY OF TRUE-UP FOR FY 2013-14 (RS. CRORE).......................... 59

TABLE 5.1: AVAILABILITY / CAPACITY INDEX FOR FY 2014-15 ..................................... 60

TABLE 5.2: PLANT LOAD FACTOR FOR FY 2014-15 ....................................................... 61

TABLE 5.3: AUXILIARY ENERGY CONSUMPTION FOR FY 2014-15 ............................... 61

TABLE 5.4: GROSS GENERATION AND NET GENERATION FOR FY 2014-15 (MU) ...... 62

TABLE 5.5: GROSS STATION HEAT RATE FOR FY 2013-14 (KCAL/KWH) ..................... 63

TABLE 5.6: GSHR COMPUTATION FOR APGCL THERMAL POWER PLANTS FOR FY

2014-15 ............................................................................................................................... 63

TABLE 5.7: WEIGHTED AVERAGE GCV AND LANDED PRICE OF GAS FOR FY 2014-15

............................................................................................................................................ 64

TABLE 5.8: FUEL COST CALCULATION FOR FY 2014-15 ............................................... 64

TABLE 5.9: FUEL COST FOR FY 2014-15 (RS. CRORE) .................................................. 65

TABLE 5.10: EMPLOYEE EXPENSES FOR FY 2014-15(RS. CRORE) .............................. 65

TABLE 5.11: R&M EXPENSES FOR FY 2014-15 (RS. CRORES) ...................................... 66

TABLE 5.12: A&G EXPENSES FOR FY 2014-15 (RS. CRORE) ......................................... 67

TABLE 5.13: DEPRECIATION FOR FY 2014-15(RS. CRORE) ........................................... 68

TABLE 5.14 INVESTMENT PLAN FOR FY 2014-15 ........................................................... 68

TABLE 5.15: INTEREST AND FINANCE CHARGES FOR FY 2014-15(RS. CRORE) ........ 71

TABLE 5.16: INTEREST ON WORKING CAPITAL FOR FY 2014-15(RS. CRORES) ......... 71

TABLE 5.17: INCOME TAX FOR FY 2014-15(RS. CRORE) ............................................... 72

TABLE 5.18: RETURN ON EQUITY FOR FY 2014-15(RS. CRORE) .................................. 72

TABLE 5.19: OTHER INCOME FOR FY 2014-15(RS. CRORE) .......................................... 73

TABLE 5.20: SUMMARY OF APR FOR FY 2014-15(RS. CRORE) ..................................... 74

TABLE 6.1: OPERATING GENERATION CAPACITY FOR FY 2015-16 ............................. 75

TABLE 6.2: GAS SUPPLY POSITION FOR FY 2015-16 ..................................................... 78

TABLE 6.3: AVAILABILITY / CAPACITY INDEX FOR FY 2015-16 ..................................... 78

TABLE 6.4: REVISED PLANT LOAD FACTOR PROJECTED FOR FY 2015-16 ................. 79

TABLE 6.5: APPROVED PLANT LOAD FACTOR FOR FY 2015-16 ................................... 79

TABLE 6.6: REVISED AUXILIARY ENERGY CONSUMPTION PROJECTED FOR FY 2015-

16 ........................................................................................................................................ 80

TABLE 6.7: APPROVED AUXILIARY ENERGY CONSUMPTION FOR FY 2015-16 ........... 80

TABLE 6.8: REVISED GROSS GENERATION AND NET GENERATION PROJECTED FOR

FY 2015-16 (MU)................................................................................................................. 81

TABLE 6.9: APPROVED GROSS GENERATION AND NET GENERATION FOR FY 2015-

16 (MU) ............................................................................................................................... 81

TABLE 6.10: REVISED GROSS STATION HEAT RATE PROJECTED FOR FY 2015-16

(KCAL/KWH) ....................................................................................................................... 82

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TABLE 6.11: APPROVED GROSS STATION HEAT RATE FOR FY 2015-16 (KCAL/KWH)

................. 82

TABLE 6.12: WEIGHTED AVERAGE GCV AND LANDED PRICE OF GAS FOR FY 2015-16

............................................................................................................................................ 83

TABLE 6.13: APPROVED WEIGHTED AVERAGE GCV AND LANDED PRICE OF GAS

FOR FY 2015-16 ................................................................................................................. 84

TABLE 6.14: APPROVED FUEL COST FOR FY 2015-16 ................................................... 84

TABLE 6.15: REVISED EMPLOYEE EXPENSES PROJECTED FOR FY 2015-16 (RS.

CRORE) .............................................................................................................................. 86

TABLE 6.16: APPROVED EMPLOYEE EXPENSES FOR FY 2015-16 (RS. CRORE) ........ 87

TABLE 6.17: REVISED R&M EXPENSES PROJECTED FOR FY 2015-16 (RS. CRORE) . 87

TABLE 6.18: APPROVED R&M EXPENSES FOR FY 2015-16(RS. CRORE) ..................... 88

TABLE 6.19: REVISED A&G EXPENSES PROJECTED FOR FY 2015-16 (RS. CRORE) .. 89

TABLE 6.20: APPROVED A&G EXPENSES FOR FY 2015-16(RS. CRORE) ..................... 89

TABLE 6.21: APPROVED INVESTMENT PLAN FOR FY 2015-16 (RS. CRORE) ............... 90

TABLE 6.22: FINANCING OF THE CAPITAL INVESTMENT FOR FY 2015-16 APPROVED

BY THE COMMISSION IN THE MYT ORDER DATED NOVEMBER 21, 2013 ................... 91

TABLE 6.23: REVISED FINANCING PLAN FOR CAPITAL INVESTMENT FOR FY 2015-16

(RS. CRORE) ...................................................................................................................... 91

TABLE 6.24: APPROVED DEPRECIATION FOR FY 2015-16(RS. CRORE) ...................... 95

TABLE 6.25: APPROVED DEPRECIATION FOR FY 2015-16 ............................................ 96

TABLE 6.26: APPROVED INTEREST AND FINANCE CHARGES FOR FY 2015-16 (RS.

CRORE) .............................................................................................................................. 97

TABLE 6.27: INTEREST ON WORKING CAPITAL PROJECTED BY APGCL FOR FY 2015-

16 (RS. CRORE) ................................................................................................................. 97

TABLE 6.28: APPROVED INTEREST ON WORKING CAPITAL FOR FY 2015-16 (RS.

CRORE) .............................................................................................................................. 98

TABLE 6.29: APPROVED RETURN ON EQUITY FOR FY 2015-16(RS. CRORE) ............. 99

TABLE 6.30: APPROVED ARR FOR FY 2015-16 (RS. CRORE) ...................................... 100

TABLE 6.31: REVISED APPROVED GENERATION TARIFF FOR FY 2015-16 ............... 101

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List of Abbreviations

A&G Administrative & General ABT Availability Based Tariff ADB Asian Development Bank AEGCL Assam Electricity Grid Corporation Limited AERC Assam Electricity Regulatory Commission APC Auxiliary Power Consumption

APDCL Assam Power Distribution Company Limited APDRP Accelerated Power Development and Reforms Programme

APGCL Assam Power Generation Corporation Limited APM Administered Price Mechanism APR Annual Performance Review ARR Annual Revenue Requirement ASEB Assam State Electricity Board BTPP Bongaigaon Thermal Power Plant CEA Central Electricity Authority CTPS Chandrapur Thermal Power Station EPC Engineering Procurement Construction FPPPA Fuel and Power Purchase Price Adjustment FY Financial Year GAIL Gas Authority of India Limited GCV Gross Calorific Value GFA Gross Fixed Assets GoA Government of Assam GoI Government of India GSHR Gross Station Heat Rate IDC Interest During Construction KLHEP Karbi Langpi Hydro Electric Project kV Kilo Volt kVA Kilo Volt Ampere kW Kilo Watt kWh Kilo Watt Hour LRPP Lakwa Replacement Power Project LTPS Lakwa Thermal Power Station MAT Minimum Alternate Tax Misc Miscellaneous MMSCMD Million Metric Standard Cubic Metres per day MoP Ministry of Power MU Million Unit MW Mega Watt MYT Multi-Year-Tariff NCV Net Calorific value NPC National Productivity Council

ix

NRPP Namrup Replacement Power Project NTPC National Thermal Power Corporation NTPS Namrup Thermal Power Station PAF Plant Availability Factor PGCIL Power Grid Corporation of India Limited PLF Plant Load Factor PPAC Petroleum Planning and Analysis Cell R&M Repairs and Maintenance ROE Return on Equity Rs. Rupees SHR Station Heat Rate T.C. Transportation Cost TEC Techno Economic Clearance WHRU Waster Heat Recovery Unit

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Guwahati

Present

Shri Naba Kumar Das, Chairperson

Shri Dipak Chakravarty, Member

Petition No. 9/2015

Assam Power Generation Corporation Limited (APGCL) -Petitioner

ORDER

(Passed on July 24, 2015)

(1) The Commission vide its Order dated November 21, 2013, approved the Multi Year

Tariff for the Assam Power Generation Corporation Limited (APGCL) for the period of

FY 2013-14 to FY 2015-16.

(2) Regulation 6.1 of the Assam Electricity Regulatory Commission (Terms and

Conditions for Determination of Tariff) Regulations, 2006 (hereinafter referred to as

the AERC Tariff Regulations, 2006) specifies that the generating company shall file a

Tariff Petition annually before the Commission to determine changes to the current

tariff not later than 1stDecember,except in case an extension is granted by the

Commission upon application.

(3) The APGCL filed a Misc. Petition on November 25, 2014 praying for extension of

time to submit the Petition for approval of Annual Revenue Requirement (hereinafter

called as ‘ARR’) and Tariff for FY 2015-16 along with Annual Performance

Review(herein after called as ‘APR’) of FY 2014-15 up to December 20, 2014.The

Commission, vide its Order dated December 06, 2014, granted extension of time up

to December20, 2014, for filing of Petition for Truing Up of FY 2013-14, Annual

xi

Performance Review (hereinafter called as ‘APR’) of FY 2014-15 and the approval of

revised ARR and Tariff for FY 2015-16..

(4) The APGCL filed the Petition (Petition No.9/2015) for Truing Up of FY 2013-14, APR

of FY 2014-15 and approval of Revised ARR and tariff for FY 2015-16 on December

20, 2014 under Section 62 of the Electricity Act, 2003, and Regulation 5, 6, & 7 of the

AERC Tariff Regulations, 2006.However, the APGCL submitted the Audited

Statement of Accounts for FY 2013-14on April 07, 2015.

(5) The Commission, on preliminary scrutiny, found that the above Petitions filed by the

APGCL were incomplete with regard to some material information. Therefore,

additional data and clarifications on the Petition were sought for from the APGCL

from time to time and replies were received. The Commission in the larger interest of

the consumers as well as the Petitioner and abiding by the statutory obligation of

tariff determination, admitted the Petitions on April 13, 2015.

(6) Although, the Petitions of the APGCL were admitted on April 13, 2015, the

Commission continued to receive additional clarifications from the APGCL on various

aspects as late as up to June 20, 2015.

(7) After the Petitions were admitted, in accordance with Section 64 of the Electricity Act

2003, the Commission directed the APGCL to publish a summary of the ARR and

Tariff filings in local dailies to ensure due public participation. Copy of the Petitions

and other relevant documents were also made available to consumers and other

interested parties at the offices of the APGCL. Copy of the Petition was also made

available on the websites of the Commission and the APGCL.

(8) Meanwhile, the Petition filed by the APGCL, were also discussed in the meeting of

the State Advisory Committee (constituted under Section 87 of the Electricity Act,

2003), convened on May 08, 2015, at Administrative Staff College, Khanapara,

Guwahati.

(9) Further, a Public Notice was issued by the APGCL inviting objections/suggestions

from objectors on or before May 15, 2015. The notice was published in eleven (11)

newspapers of the State on April 23, 2015 in English and vernacular.

(10) The Commission received objections from seven (7) objectors on the Petitions filed

by the APGCL. Also, the replies were provided by the APGCL on the objections to

the concerned individuals/ parties. The Hearing was held at District Library, Guwahati

xii

on June 04, 2015. The details are discussed in the relevant sections of this tariff

order.

(11) The Commission, now in exercise of its powers vested in it under Sections 61 and 62

of the Electricity Act, 2003 and all other powers enabling it in this behalf, and taking

into consideration the submissions made by the Petitioners, objections and

suggestions received from stakeholders and all other relevant materials on record,

has carried out the true-up for FY 2013-14, Annual Performance Review for FY 2014-

15, and determined the revised ARR and Generation Tariff for FY 2015-16, and

accordingly, issues this Order making the new tariff effective from August 1, 2015.

(12) The Commission further directs the APGCL to publish a Public Notice intimating the

revised generation tariff, before the implementation of the Order in English and

Vernacular newspapers and on the website of the APGCL.

(13) Accordingly, the Petition no. 9 of 2015 stands disposed of.

Sd/-

(D. Chakravarty) Member, AERC

Sd/- (N. K. Das)

Chairperson, AERC

1

1 Introduction

1.1 CONSTITUTION OF THE COMMISSION

1.1.1. The Assam Electricity Regulatory Commission (hereinafter referred to as the AERC

or the Commission) was established under the Electricity Regulatory Commissions

Act, 1998 (14 of 1998) on February 28, 2001.The first proviso of Section 82(1) of the

Electricity Act, 2003(36 of 2003) (hereinafter referred to as the “Act”) has ensured

continuity of the AERC under the Electricity Act, 2003.

1.1.2. AERC came into existence in August 2001 as a one-man Commission. Considering

the multidisciplinary requirements of the Commission, it was made a multi-Member

Commission comprising of three Members (including Chairperson) from January 27,

2006. The Commission started functioning as a multi-Member Commission on joining

of two Members from February 1, 2006.

1.1.3. The Commission is mandated to exercise the functions conferred on it under Section

86 of the Act and to exercise the powers conferred under Section 181 of the

Electricity Act, 2003 (36 of 2003) (hereinafter referred to as the Act).

1.2 TARIFF RELATED FUNCTIONS OF THE COMMISSION

1.2.1. Under Section 86 of the Act, the Commission inter-alia has the following tariff related

functions:

(a) to determine the tariff for generation, supply, transmission and wheeling of

electricity, wholesale, bulk or retail, as the case may be within the State;

(b) to regulate electricity purchase and procurement process of distribution utilities

including the price at which the electricity shall be procured from the generating

companies, from other licensees or from other sources through agreements for

purchase of power for distribution and supply within the State;

(c) to facilitate intra-State transmission and wheeling of electricity;

(d) to promote competition, efficiency and economy in the activities of the electricity

industry to achieve the objects and purpose of this Act.

1.2.2. Under Section 61 of the Act in the determination of tariffs, the Commission is to be

guided by the following:

2

(a) The principles and methodologies specified by the Central Commission for

determination of the tariff applicable to generating companies and transmission

licensees;

(b) The electricity generation, transmission, distribution and supply are conducted

on commercial principles;

(c) The factors, which would encourage competition, efficiency, economical use of

the resources, good performance, Optimum investments, and other matters

which the State Commission considers appropriate for the purpose of this Act;

(d) The interests of the consumers are safeguarded and at the same time, the

consumers pay for the use of electricity in a reasonable manner;

(e) That the tariff progressively reflects the cost of supply of electricity at an

adequate and improving level of efficiency and also gradually reduces cross

subsidies;

(f) The National Electricity Plans formulated by the Central Government including

the National Electricity Policy and National Tariff Policy.

1.2.3. In accordance with the provisions of the Act, the Commission shall not show undue

preference to any consumer of electricity in determining the tariff, but may

differentiate according to the consumers load factor, power factor, voltage, total

consumption of energy during any specified period or the time at which the supply is

required or the geographical position of any area, the nature of supply and the

purpose for which the supply is required. (Section 62 of the Act).

1.2.4. If the State Government decides to grant any subsidy to any consumer or class of

consumers in the tariff determined by the Commission, the State Government shall

pay the amount in advance to compensate the person affected by the grant of

subsidy in the manner the Commission may direct as a condition for the licence or

any other person concerned to implement the subsidy provided by the State

Government (Section 65 of the Act).

1.3 BACKGROUND AND BRIEF HISTORY

This Order relates to Petition No. 9 of 2015 filed by APGCL before the Commission

for true-up for FY 2013-14 , APR for FY 2014-15 and approval of revised ARR and

generation tariff for FY 2015-16 for sale of electricity to APDCL. APGCL is one of the

successor entities of the erstwhile ASEB and owns and operates the Generating

Stations previously owned by ASEB. APGCL started functioning as a separate entity

3

from December 10, 2004 as per the Assam Electricity Reforms First Transfer

Scheme, which was notified by the Government of Assam vide PEL. 151/2003/Pt/165

dated December 10, 2004. The Government of Assam, vide notification No.

PEL.151/2003/Pt/349 dated August 16, 2005 issued Orders to give effect to the

reorganization of the Assam State Electricity Board and finalization of the provisional

transfers effected as per the provisions of the Electricity Act, 2003 and First Transfer

Scheme. The Government of Assam notified the opening Balance Sheet, which was

updated and finalized based on the Audited Statement of Accounts of ASEB as on

March 31, 2005 under Notification No: PEL.114/2006/120 of August 29, 2007.

The Commission notified the AERC Tariff Regulations, 2006 vide No. AERC.2005/19

dated April 28, 2006, which was published in the Assam Gazette on May 24, 2006. It

was stated that it shall come into force from the date of their publication in the Official

Gazette of the Govt. of Assam, i.e., w.e.f May 24, 2006. As per Regulation 1.2(d), the

Regulations shall apply to all Generating Companies operating in the State of Assam,

which are not subject to the jurisdiction of the CERC, which include Generating

Companies that are owned or controlled by Central Government or Generating

Companies with a composite scheme of generation and sale in more than one State.

1.3.1. Assam Power Generation Corporation Limited

The Assam Power Generation Corporation Limited, hereinafter named as APGCL, is

the successor corporate entity of erstwhile ASEB formed pursuant to the notification

of the Government of Assam, notified under sub-sections (1), (2), (5), (6) and (7) of

Section 131 and Section 133 of the Electricity Act 2003 (Central Act 36 of 2003), for

the purpose of transfer and vesting of functions, properties, interests, rights,

obligations and liabilities, along with the transfer of personnel of the Board to

successor entries. Further, APGCL is a Company incorporated with the main object

of generation of electricity in the State of Assam and is a Generating Company under

the various provisions of the Electricity Act, 2003.

1.3.2. Commission’s Orders for the first Control Period

APGCL filed the MYT Petition for the first Control Period for determination of Annual

Revenue Requirement for FY 2010-11, FY 2011-12 and FY 2012-13 on February 8,

2010 in accordance with the AERC Tariff Regulations, 2006.

4

The Commission, after following the due procedure, issued the MYT Order for the

Control Period from FY 2010-11 to FY 2012-13 on May 16, 2011.

APGCL filed the Petition for approval of Annual Performance Review for FY 2011-12

and truing up for FY 2009-10 and FY 2010-11 on June 06, 2012.APGCL further filed

the Petition for approval of revised Annual Revenue Requirement and determination

of generation tariff for FY 2012-13 on September 28, 2012.Thereafter, the

Commission passed the tariff order on true-up for FY 2009-10 and FY 2010-11,

Annual Performance Review for FY 2011-12 and determination of revised ARR and

generation tariff for FY 2012-13 on February 28, 2013.

1.3.3. Commission’s Orders for the second Control Period

APGCL filed the MYT Petition for the second Control Period for determination of

Annual Revenue Requirement for FY 2013-14, FY 2014-15 and FY 2015-16 on

January 31, 2013, in accordance with the AERC Tariff Regulations, 2006. Further,

APGCL filed the Petition for true-up for FY 2011-12 and APR for FY 2012-13 on

March 21, 2013.

The Commission, after following the due procedure, issued the MYT Order for the

Control Period from FY 2013-14 to FY 2015-16 on November 21, 2013, along with

true-up for FY 2011-12 and APR for FY 2012-13.

APGCL filed the Petition for approval of Annual Performance Review for FY 2013-14

(Petition No 13/2013) on November 28, 2013. APGCL further filed the Petition for

truing up for FY 2012-13 and approval of revised Annual Revenue Requirement and

determination of generation tariff for FY 2014-15 (Petition No14/2014) on February

27, 2014. As directed by the Commission APGCL further submitted the revised

petition for truing up for FY 2012-13, APR of FY 2013-14 and approval of revised

Annual Revenue Requirement and determination of generation tariff for FY 2014-15

incorporating additional information requirements on April 10, 2014. The Commission

passed the tariff order on true-up for FY 2012-13, APR for FY 2013-14 and

determination of revised ARR and generation tariff for FY 2014-15 on November21,

2014.

5

1.4 PROCEDURAL HISTORY

APGCL filed the Petition for True-up for FY 2013-14, Annual Performance Review for

FY 2014-15 and revised ARR and generation Tariff for FY 2015-16 on December 20,

2014. However, APGCL submitted the Audited Statement of Accounts on April 10,

2015. As directed by the Commission, APGCL further submitted the revised petition

for truing up for FY 2013-14, APR of FY 2014-15 and approval of revised Annual

Revenue Requirement and determination of generation tariff for FY 2015-16

incorporating additional information requirements on April 10' 2015.

1.5 ADMISSION OF PETITION AND HEARING PROCESS

1.5.1. The Commission conducted the preliminary analysis of petition submitted by APGCL

and found that the petition was incomplete due to some need of some material

information. Therefore, the Commission sought additional clarification on the petition

from APGCL, as required from time to time. The key additional clarifications were

sought from February 26, 2015, March 11, 2015, March 20, 2015 and April 06, 2015.

Based on the additional information requirements, the Commission has also

conducted discussions/ meetings with APGCL on March 11, 2015, March 20, 2015,

April 06, 2015. In response to the additional information sought by the Commission,

APGCL submitted the additional information from time to time. The key additional

information was submitted by APGCL on March 07, 2015, March 16, 2015 and March

26, 2015. Further, based on the additional information requirement, discussions and

technical validation sessions, APGCL submitted revised petition on April 10, 2015.

1.5.2. As such, the Commission admitted the petition of APGCL for True up of FY 2013-14,

APR of FY 2014-15 and ARR of FY 2015-16 on April 13, 2015. Additionally, after

admission of the petition, APGCL continued to submit further clarifications till June

20, 2015.

1.5.3. .In accordance with Section 64 of the Electricity Act, 2003, the Commission directed

APGCL to publish its application in the abridged form and manner to ensure due

public participation.

A Public Notice was published by APGCL inviting objections / suggestions from

objectors on or before May 15, 2015. The notice was published in the following

eleven (11) newspapers on April 23, 2015.

6

Date Newspapers Language

April 23, 2015

The Assam Tribune English The Sentinel English The Telegraph English Asamiya Pratidin Assamese Dainik Asom Assamese Amar Asom Assamese Janasadharan Assamese Dainik Jugasankha Bengali Samayik Prasanga Bengali Purbanchal Prahari Hindi Dainik Purvoday Hindi

1.5.4. The time limit for submitting objections/suggestions was stipulated in accordance

with the AERC (Conduct of Business) Regulations, 2004. Moreover, the same was

also in line with the time limit given by most of the State Electricity Regulatory

Commissions in India, as well as the time allowed by the Commission in earlier tariff

proceedings.

1.5.5. The Commission has considered the objections received from various objectors and

also invited the objectors to take part in the Hearing process for presenting their

views in person before the Commission, if they so desired. Also, a comprehensive

Notice was published in the following seven (7) newspapers on May 27, 2015 in

Assamese and English language. Accordingly, the Commission scheduled the

Hearing on the matter on June 04, 2015 at Assam District Library Auditorium,

Guwahati.

7

Date Name of Newspaper Language

27.05.2015

The Assam Tribune English

The Sentinel English

Amar Asom Assamese

Asamiya Pratidin Assamese

Dainik Janambhumi Assamese

Dainik Jugasankha Bengali

Purbanchal Prahari Hindi

1.5.6. All the written representations submitted to the Commission and the oral submissions

made before the Commission during the Hearing and the responses of APGCL have

been carefully considered while issuing this tariff order. The issues raised by different

consumers and consumer groups along with the response of APGCL and views of

the Commission are elaborated in Chapter 3 of this Order.

1.6 STATE ADVISORY COMMITTEE MEETING

The meeting of the State Advisory Committee (constituted under Section 87 of the

Electricity Act, 2003) was convened on May 08, 2015at Assam Administrative Staff

College, Khanapara, Guwahati. The Members of SAC were briefed on the Petitions

of APGCL. The suggestions made by the members of SAC have been duly taken

into consideration by the Commission while finalizing the tariff order. The minutes of

the meeting are appended to this Order as Annexure - 1.

8

2 Summary of ARR and Tariff Petition

APGCL filed a Petition on November 25, 2014 praying for extension of time for

submission of Petition for approval of ARR and Tariff for FY 2015-16 along with APR

of FY 2014-15up to December20, 2014 and Commission granted extension of time up

to December20, 2014, for filing of Petition for Truing Up of FY 2013-14, APR of FY

2014-15 and the approval of revised ARR and Tariff for FY 2015-16.

Accordingly, APGCL filed the Petition for True-up for FY 2013-14, Annual Performance

Review for FY 2014-15 and revised ARR and generation Tariff for FY 2015-16 on

December 20, 2014, which was admitted on April 13, 2015.

2.1 TRUE UP FOR FY 2013-14

The summary of true-up for FY 2013-14 submitted by APGCL is as shown in the Table

given below:

Table 2.1: Summary of true-up for FY 2013-14 as submitted by APGCL (Rs. Crore)

Particulars

Approved MYT Order

Dated November 21,

2013

Amount claimed

for True-Up

INCOME

Revenue from tariff & Misc. Charges 483.95 544.49

Revenue from Secondary Energy Charges of

KLHEP 2.51

Total revenue from Sale of Power

547.00

Other Income 10.99 10.60

Total revenue income 494.94 557.60

EXPENDITURE

Fuel Cost 289.45 385.15

Employee Expenses 78.12 82.00

R&M Expenses 14.91 26.03

A&G Expenses 5.93 12.53

Depreciation 16.35 25.66

Interest & Finance Charges 30.90 31.28

Provision for taxes 0.93 0.45

Prior period items

-10.07

Return on Equity (ROE) 37.99 38.59

Interest on working Capital 18.25 22.32

9

Particulars

Approved MYT Order

Dated November 21,

2013

Amount claimed

for True-Up

Adjustment of Truing Up for FY 2011-12 13.10

Total Revenue Requirement 494.94 613.95

Add: Incentive for generation for FY 2013-14

7.97

Add: Incentive for Secondary Energy generation

for FY 2013-14 2.51

Gross Expenditure 494.94 624.43

Revenue Surplus(+) / Shortfall(-) 0 -66.83

APGCL claimed a Revenue Gap of Rs. 66.83 Crore for FY 2013-14 and requested the

Commission to allow the proposed Revenue Gap of FY 2013-14 in the ARR for FY

2015-16.

2.2 APR FOR FY 2014-15 AND REVISED ARR AND GENERATION TARIFF FOR FY

2015-16

The summary of APR for FY 2014-15 and revised ARR and generation tariff for FY

2015-16 submitted by APGCL, is as shown in the Table given below:

Table 2.2: APR for FY 2014-15 as submitted by APGCL (Rs. Crore)

Particulars

Approved Tariff Order Dated November 21,

2014

Proposed in this petition

Fixed Charges

Operation and Maintenance expenses

Employee expenses 75.75 86.54

Repair and Maintenance expenses

17.11 25.19

Administrative and General expenses

4.70 9.41

Interest and Finance Charges 32.14 29.61 Interest on Working Capital 19.08 26.03

Income Tax 0.93 0.93

Depreciation 35.55 32.81

Return on Equity 37.99 40.39

Less: Other Income 11.59 10.60

Total Fixed Charges 211.66 240.31

Fuel Cost 326.70 477.45

10

Particulars

Approved Tariff Order Dated November 21,

2014


True up for 12-13 -16.79

Impact of revised true up 27.26

Annual Revenue Requirement 548.83 717.76

Power Generation (MU)

Gross Generation 1766.94 1894.66

Auxiliary Consumption 71.94 115.92

Net Generation 1695.00 1778.73

Generation Tariff (Rs./kWh)

Fixed Cost 1.31 1.35

Fuel Cost 1.93 2.68

Tariff 3.24 4.04

Table 2.3: Revised ARR and Generation Tariff for FY 2015-16 as submitted by APGCL

Particulars Approved MYT Order Dated

November 21, 2013


Fixed Charges


Employee expenses 91.42 105.27 Repair and Maintenance expenses 17.39 53.55

Administrative and General expenses 6.73 9.85

Interest and Finance Charges 89.09 55.88

Interest on Working Capital 21.18 30.83

Income Tax 0.93 0.93 Depreciation 49.66 48.21 Return on Equity 49.75 58.96 Less: Other Income 13.29 10.60 R&M expense approved vide letter no AERC 442/ 2014/15" Order n Review petition on Tariff order for FY 13-14 dated 08.07.2014

26.73

Total Fixed Charges 312.86 379.60

Fuel Cost 263.84 521.92

True-up for FY 2013-14 0.00

Annual Revenue Requirement 576.69 901.52

Power Generation (MU)

Gross Generation 2200.35 1930.71 Auxiliary Consumption 79.54 99.14

11

Particulars Approved MYT Order Dated

November 21, 2013


Net Generation 2120.81 1831.57 Generation Tariff (Rs./kWh)

Fixed Cost 1.48 2.07 Fuel Cost 1.24 2.85 Tariff 2.72 4.92

APGCL has submitted that it has projected the ARR for FY 2015-16 based on the

current position of the generating Units and gas availability from various gas sources,

gas pricing, inflation trend, etc. APGCL has proposed the ARR of Rs.901.52 Crore as

against Rs. 576.69 Crore approved by the Commission for FY 2015-16 in the MYT

Order dated November 21, 2015. This is exclusive of proposed Revenue Gap of Rs.

66.83 Crore for Truing Up of FY 2013-14.

12

3 Summary of Objections raised, responses of

APGCL and Commission’s comments

The Commission has received objections/ suggestions from seven (7) objectors on the

Petitions filed by APGCL from the following objectors:

Sl. No. Name of the Objector

1. All Assam SSI Association, Industrial Estate, Guwahati

2. Assam Bidyut Grahak Adhikar Parisad

3. Assam Branch of Indian Tea Association, Guwahati

4. Consumers’ Legal Protection Forum

5. Federation of Industry & Commerce of North Eastern Region

6. Krishak Mukti Sangram Samiti & Gana Mukti Sangram

7. Shri Jayanta Deka and others

APGCL has submitted its responses to the objections/suggestions from the objectors.

The Commission held the Hearing at District Library, Guwahati on June 4,2015. Six

objectors attended the Hearing and submitted their views/suggestions. All the written

representations submitted to the Commission and oral submissions made before the

Commission in the Hearing and the responses of APGCL have been carefully

considered while issuing this tariff order.

The objections/suggestions made by the objectors and responses of the Petitioner have

been dealt with in this Chapter. The major issues raised by the objectors are discussed

below along with the response of APGCL and views of the Commission. All the

objections/suggestions received in written on the ARR and Tariff Petition along with

those raised during the course of Hearing, have been grouped and addressed issue-

wise hereunder.

Issue No. 1: Truing-up to be done before calculating ARR for 2015-16

Objections:

The Federation of Industry & Commerce of North Eastern Region has requested the

Hon’ble Commission to first carry out True-up and pass on the benefit of any excess

charge to the consumers before arriving at ARR and tariff for 2015-16.

Comments of the Commission:

13

The Commission has carried out True-up exercise based on submissions of APGCL,

Audited Statement of Accounts of APGCL and prudence check by the Commission.

The detailed component wise analysis of True-up is covered in the later chapter of

this order. The impact of True-up has been taken up while calculation of ARR

requirement for FY 2015-16.

Issue No. 2: PLF, Plant Availability and Generation

Objections:

The Assam Branch of Indian Tea Association (ABITA) submitted that in spite of the

lenient approach adopted by the Commission for approving the technical parameters

for the generating stations of APGCL, the actual technical parameters achieved by

the Petitioner for FY 2013-14 indicate poor performance of the plants. As per ABITA,

the primary reason for the non-achievement of the technical parameters is the non-

implementation of the Renovation & Modernisation schemes resulting in frequent

forced shut downs. ABITA further submitted that the non-achievement of the

technical parameters is attributable to APGCL and accordingly, ABITA has requested

the Commission not to allow the same to be passed to the consumers.

The Federation of Industry & Commerce of North Eastern Region (FINER) has also

objected on similar lines stating that while APGCL could achieve the generation

targets for NTPS, LTPS with WHRU and KLHEP for FY 2013-14.However, the target

with respect to Myntriang SHEP has not been met due to delay in commissioning of

the plant. Similarly for FY 2014-15, as per APGCL’s estimate, APGCL is not

expected to meet the generation target for KLHEP and Myntriang SHEP (due to

delay in commissioning of plant). The objectors have pointed out that, there has been

consistent failure on the part of generating company to complete new generating

units as per projections in MYT. FINER, has also pointed out that during the MYT

petition Hearing also, there were objections made on the projection made for new

capacity addition and today those objections have been proved to be correct.. The

FINER has requested APGCL to ensure timely completion of ongoing projects.

Assam Bidyut Grahak Adhikar Parisad has also observed that there is decrease in

generation of APGCL. They further mentioned that the delay in power generation

projects leading to procurement of power from outside state at higher cost.

Krishak Mukti Sangram Samiti & Gana Mukti Sangram has submitted that, the state’s

own generation was 486.90 MW as on April 30, 2015, as per the data of Government

of India. It received 747.68 MW from Central sector and 28.60 MW from private

14

sector, showing that 776.28 MW was received from others out of the total allocation

of 1263.18 MW. They further submitted that at present APGCL does not have any

project to increase its own generation.

Krishak Mukti Sangram Samiti &Gana Mukti Sangram further submitted that, as per

the available information, the total electricity production of Assam is only 1% of the

total electricity production of India, while Gujarat, Rajasthan, Karnataka, Maharashtra

and Punjab produces 8% and undivided Andhra Pradesh produces 12% (Share of

State/UT’s in State Sector generation in 2011-12). Also, the per capita consumption

in Assam is 250 kWh while the all India average per capita consumption is 884 kWh.

Among the big states, the per capita consumption in Punjab, Gujarat and Haryana

were 1799 kWh, 1663 kWh and 1628 kWh respectively. The lowest per capita

consumption is in Bihar which is 134 kWh. (As per FY 2011-12 data). The objector

submitted that more steps should be taken for increasing the production and

consumption in Assam. However the yearly demand for tariff increase is being made

by utilities, as a regular practice.

Further, Krishak Mukti Sangram Samiti & Gana Mukti Sangram submitted that, the

electricity consumption is one of the main indicators of development which is getting

reduced due to the huge increase in the tariff.

Response of APGCL:

In response to objections above, APGCL submitted that actual PLF of APGCL is

more than the normative PLF values both of LTPS and NTPS in the FY 2013-

14mainly due to successful R&M carried out. APGCL constantly endeavours to

improve the performance of its power stations and hence has achieved even higher

PLF than the normative PLF for NTPS and LTPS.

APGCL has submitted that,

• For FY 2013-14: The commissioning of Myntriang SHEP Stage-II Project was

delayed due the following reasons

i. Loss of valuable work days due to local issues such as frequent bandh calls

ii. Redesigning of the project for enhancing capacity by 3 MW in Stage-I and

by 1.5 MW in Stage-II, from the earlier planned capacity of 6 MW for Stage I

and 3 MW for Stage II. The 3 MW capacity for Stage II has already been

commissioned in FY 2014-15.

• For FY 2014-15: The generation of Hydro projects like KLHEP depends on

the availability of water which is beyond the control of APGCL. KLHEP

generated less than the target generation due to less amount of rainfall in the

15

monsoon season in the FY 2014-15.

Further, Myntriang SHEP Stage-II suffered heavy damages in the sudden

flash flood caused by the torrential rain on August 22, 2014 and had to be

shutdown intermittently. For the above reasons, it could not achieve target

generation for the FY 2014-15.

APGCL has further submitted that, the detailed reasons for delay in commissioning of

new projects vis-a-vis schedule proposed in the MYT Petition for 2013-14 to 2015-16

is mentioned below, which are beyond the control of APGCL.

100 MW NRPP:

The projected was initially proposed to be commissioned in FY 2013-14.However,

due to various reasons, the commissioning of the project was delayed as mentioned

below:

i. Continuous poor progress of works due to poor management of site by

BHEL’s sub-contractors due to deployment of insufficient machineries &

labourers hampered progress of works.

ii. Non availability of sufficient skilled manpower.

iii. Unfavourable Weather (In the whole year, only 5 months was only

favourable for ground work).

However, at present the project work is progressing at a better pace than earlier after

selection of new sub-contractors by BHEL on constant persuasion by APGCL. The

NRPP (63 MW), in open cycle mode, is expected to be commissioned in August,

2015.

70 MW LRPP: Delay was mainly due to delay in the selection of EPC contractors.

For selection of EPC contractors. re-tendering was done and bid submission date

had to be extended several times due to receipt of only single bid initially.

6 MW Lungnit SHEP: The contract with the EPC contractor had to be cancelled due

to very slow progress of work. Subsequently, the project got involved into litigations

with the cancelled EPC contractor. After that tendering process was started to select

new EPC contractor. However, due to high price bid than the estimated project cost,

the decision on EPC contractor selection is pending at the moment.

Myntriang SHEP Stage-I: Myntriang SHEP Stage-I suffered the same problems

during construction like that of the Stage-II project mentioned above. This project has

also been redesigned to 9 MW from earlier 6 MW. Project work is presently going on

16

and the project is expected to be commissioned in December 2015.

In the Revised Tariff Petition for the FY 2015-16 APGCL has considered the open

cycle commissioning of NRPP (63 MW GT part only) and Myntriang 13.5 MW

MSHEP St.-I & II as the new capacity addition.

APGCL is putting all effort to complete its ongoing projects in time.

In its reply to Krishak Mukt Sangram Samiti &Gana Mukti Sangram, APGCL

submitted that to meet the ever growing energy demand of the state of Assam to the

extent feasible, APGCL, at the initiative of Govt. of Assam, has emphasized on

development of large capacity thermal power projects based on coal & natural gas

available in this region as stated below. The following projects are currently under

construction / bidding /DPR/planning stage by APGCL for capacity addition.

i . Ongoing Projects

SI. No.

Name of the Project Fuel Capacity (MW)

Status

I Namrup Replacement Power Project (NRPP) Gas Turbine Unit

Natural Gas

100

Approximately 65% project work is completed. Open cycle Commissioning is expected in December 2015

2

Myntriang Stage-1 (3x3 MW) and Enhancement of Stage II (1x1.5 MW enhancement from 2x1.5 MW)

N/A (Hydro)

10.5

Approximately 57% project work is completed. Commissioning is expected in December 2015

i i . New Projects / Projects in Pipeline

Sl. No.

Name of the Project

Fuel Capacity (MW)

Expected Date of

Commissioning Present Status

1 Lakwa Replacement Power Project

Natural Gas

70 (Nominal)

2 years from issue of Work

Order

Technical bid evaluation is completed and sent to ADB

for approval.

2 Lower Kopili Hydro Electric Power Project

N/A (Hydro)

120 4 years from issue of Work

Order

Recasting of DPR as per the CEA advice is under finalization. DPR is

expected to be approved by CEA by July'15. The issue of pending clearances for

the project has been pursued by Govt. of Assam

with the Govt. of India.

17

Sl. No.

Name of the Project

Fuel Capacity (MW)

Expected Date of

Commissioning Present Status

3

Borpani Middle Stage-II Small Hydro Electric Power Project

--Do-- 24 3 years from issue of Work

Order

DPR has been approved by APGCL Board on December 03, 2014. Preliminary survey work for road and building is

in progress.

4 Cachar Power Project

Natural Gas

30 (Nominal)

2 years from issue of Work

Order

APGCL was the sole bidder in the Open Tender floated by ONGCL for sale of Gas

from Bhubaudar and Banskandi fields in Cachar

District. Gas linkage is awaited. GoI has been

pursued by GoA for early allocation of Gas

5 NTPS Solar PV Projects

Solar Energy

2 1 year from issue

of Work Order

To be Proposed under Jawaharlal Nehru National Solar Mission (JNNSM).

DPR is under preparation. 6 LTPS Solar PV Project

--Do-- 2

7 Borpani Middle Stage-I SHEP

N/A (Hydro)

21 3 years from issue of Work

Order DPR under preparation

8 Borpani Barrage Toe SHEP

--Do-- 12

9 Titabor Power Project

Natural Gas

40 (nominal)

MoPNG and ONGCL are being pursued for allocation of gas from small pockets of

gas around Titabor area

10 Amguri TIDP --Do-- 100 Deferred due to non-

availability of gas

18

i i i . JV Project

SI No.

Name of the Project

Fuel Capacity (MW)

Expected Commissioning

date

Present Status

1. Margherita Thermal Power Project

Coal 660 4 and 1/2 years from issue of Work Order

1. Proposed as a JV project with NEEPCO with 49% stake of APGCL.

2. 2000 Bigha land allotted to APGCL by GOA

3. Water off-take permission received

4. Amended Terms of Reference was received from MOE&F, Hearing for environment clearance was held on March 22, 2015.

5. DPR is being prepared by TCE 6. Coal linkage is awaited. The issue

of early allocation coal for the project is continuously being pursued by Govt. of Assam with the Govt. of India

2. Revival of Chandrapur Thermal Power Project

--Do--

60 2 and 1/2 years from issue of Work Order

1. JV project- M/s IAPL 2. Environment Clearance

received. 3. Coal linkage is awaited. 4. Govt. of Assam has pursued with

Govt. of India for early allocation of coal for the project

In reply to the observation of Assam Bidyut Grahak Adhikar Parishad, APGCL has

submitted that instead of decrease in generation, APGCL has shown increasing trend

of generation as stated below. Further, APGCL had achieved its highest ever Gross

generation of 1893.946 MU in the FY 2014-15.

APGCL 2012-13 2013-14 2014-15

Total Gross Gen. In(MU)

1765.26 1845.23 1893.95

Total Energy Supplied to APDCL (MU)

1631.60 1732.85 1778.73

APGCL further submitted that it is planning for more capacity addition in the coming

years (as shown in table above) and making an determined effort to implement this

plan to boost its generation capacity considerably to meet the ever growing energy

demand of the State of Assam to the extent feasible.

19


For Truing up purpose the Commission has considered SLDC certificate for the proof

of plant availability. Although the recovery of the fixed costs of APGCL is dependent

on the availability rather than the PLF of its stations, higher PLF is desirable as it

leads to optimal utilisation of capital investment incurred. The Commission observes

that the actual generation of the thermal generating stations of APGCL is more than

the approved generation level for FY 2013-14.

For FY 2014-15, the Commission has considered 10 months actual availability as per

SLDC certificate for approving the plant availability. Since the petitioned value is

similar to actual 10 month availability, the petitioned availability has been allowed.

Similarly for PLF of thermal plants, as the petitioned value were higher than

normative value, the Commission has considered petitioned PLF for generation

calculation. The gross generation for hydel plants has been taken as per petition.

For 2015-16, the Commission has taken generation figure as per submission of

APGCL, which has been projected based on gas availability and number of days of

operation, however, the target for availability and PLF will be considered as same as

in MYT order for true-up in future. It shall be noted that, the Commission has

specified the normative PLF for the generating stations of APGCL keeping in view

the vintage of the Units, availability of gas and maintenance schedule required for the

upkeep of the Units and hence no deviation from the same will be considered in

True-up.

The Commission had directed APGCL to obtain prior approval of the capital

investment for the Renovation & Modernisation schemes to be implemented by

APGCL. Further, the Commission, in its MYT Order for FY 2013-14 to FY 2015-16

dated November 21, 2013 has already directed APGCL to expedite all the

Renovation & Modernisation schemes required for the optimal performance of its

Stations. The Commission has also given directives to APGCL for submission of

project status and reason for delays. The Commission directs APGCL to make all out

efforts for maximum generation from its existing Stations as the availability of

adequate generation capacity within the State would reduce the dependence on the

import of power and the inherent transmission constraints.

Issue No. 3: Auxiliary Energy Consumption

20

Objections:

ABITA submitted that the actual Auxiliary Energy Consumption for FY 2013-14 and

revised estimate for FY 2014-15 and FY 2015-16 as submitted by the Petitioner are

higher than the approved norms. ABITA submitted that the Petitioner has not taken

necessary steps to reduce the Auxiliary Energy Consumption in compliance to the

directions of the Commission. ABITA further submitted that the reasons for higher

Auxiliary Energy Consumption submitted by the Petitioner should not be taken into

consideration and requested the Commission to consider the Auxiliary Energy

Consumption as per the norms.

The Federation of Industry & Commerce of North Eastern Region(FINER) has also

objected on similar lines stating that the Auxiliary Energy Consumption as submitted

by the Petitioner are higher than the approved norms and same should not be loaded

to consumers.

Response of APGCL:

APGCL has submitted that the Hon'ble Commission was appraised of the fact that

one of the contributors to the high Auxiliary Power Consumption (APC) of NTPS and

LTPS, is the energy loss at the switchyard end Transformer feeders, which,

otherwise should have been added to the accounts of APDCL and AEGCL. The

Hon’ble Commission directed APGCL in its tariff order for FY 2014-15 to handover

the switchyard transformer feeders/related equipment to APDCL and AEGCL so that

this issue can be resolved. APGCL submitted that this handover is complete with

AEGCL at NTPS, however at LTPS, the handover of transformer feeders to APDCL

is expected to be completed by June’15. Also, at NTPS, the handover process will be

complete only when the construction of the 33 kV distribution substations by APDCL

at NTPS site will be complete. Accordingly APGCL submitted that, once all the

transformers feeders are handed over to APDCL at NTPS, APC loss is expected to

be reduced.

Further, APGCL has also appraised the Hon’ble Commission about the problem of

decreasing Calorific Value of gas over the years, which is adding to the high APC

loss of LTPS as the gas supplied to LTPS is low pressure gas and it has to be

compressed with gas booster compressors for running the gas turbines. At the time

of designing these turbines for LTPS, the NCV of gas was as high as 11000

kcal/scm, hence less amount of gas had to be compressed by the compressors

21

leading to less consumption of power. However, at present, the NCV of gas has

reduced to around 8500 kcal/scm, therefore as such more gas has to be compressed

by the compressors to run the same machines at their rated capacity. Further, due to

high heat rate of the old gas turbines of LTPS, it requires more gas than modern

GTs, and as such APC loss increases for LTPS as more work has to be done by its

compressors. This is an inherent problem of LTPS. However, APC loss of LTPS is

expected to come down after the LRPP project is commissioned replacing the high

heat Phase-I turbines

APGCL has appealed to the Commission to enhance the APC norms of NTPS and

LTPS. APGCL appreciates consumers’ concern about the higher Auxiliary

Consumption, however, this may be mentioned here that, the increase in fuel cost

due to high Auxiliary Consumption is absorbed by the Generating Company and is

not passed on to the consumer.

APGCL has also submitted that for FY 2014-15, High APC of Myntriang SHEP

Stage-II is for taping of construction power for the ongoing Myntriang Stage-I.

However, the excess APC beyond the norms will be borne by APGCL.


The Commission, in this Order, after taking into consideration the norms specified in

the AERC Tariff Regulations, 2006, has approved the norms for Auxiliary Energy

Consumption for APGCL's stations for FY 2014-15 at the same levels approved in

the tariff Order 2014-15 and for true-up for FY 2013-14 and ARR for FY 2015-16, as

per value approved in MYT order.

Issue No. 4: Station Heat Rate

Objections:

Similar to Auxiliary Energy Consumption, both ABITA and FINER has submitted that

the actual SHR submitted by the Petitioner is higher than the approved value. The

objectors stated that the higher SHR indicates the inefficiency in the operation of the

Station by APGCL and accordingly the objector has requested the Commission to

consider the norm as per the AERC Tariff Regulations and not allow any inefficiency

to be passed on to the consumers.

Response of APGCL:

22

APGCL has submitted that, the actual Station Heat Rates achieved by NTPS and

LTPS (open cycle) for the year FY 2013-14 are comparable with the design Heat

Rates of these two old Power Stations, and hence, the question of high Gross Station

Heat Rate (GSHR) by APGCL does not arise. APGCL further submitted that the

issue of lower normative GSHR was taken up with AERC in FY 2007-08 and based

on the petition of APGCL; the Hon’ble Commission has subsequently amended the

normative GSHR w.e.f. January 07, 2015 which is at par with the design and actual

GSHR of NTPS and LTPS. This implies that APGCL was incurring loss in fuel cost

because of lower normative GSHR and not due to underperformance.

Station

Approved in MYT order dated

November 21, 2013(Kcal/Kwh)

FY 2013-14 (Actual)

(Kcal/Kwh)

As per Design Heat

Rate (Kcal/Kwh)

As per Amended Regulation (Kcal/Kwh)

NTPS 3266 3976 4230 3900

LTPS + WHRP 2719 3164 3327 3200


In this Order, for truing up of FY 2013-14, the Commission has approved the SHR

norms as specified in the AERC Tariff Regulations, 2006. However, based on the

Report of the study conducted by IIT Guwahati, submissions of APGCL & other

stakeholders and the Hearing on the matter, the Commission has amended the

normative GSHR and notified the new normative SHR on January 06, 2015 effective

from the date of the notification. Thus for FY 2014-15, SHR has been considered as

per AERC Tariff Regulations, 2006 till December 31, 2014 and as per revised SHR

from January 06, 2015. Similarly for 2015-16, revised SHR has been considered as

per order dated January 06, 2015

Issue No. 5: Fuel Cost

Objections:

Both ABITA and FINER has submitted that the actual fuel cost as per the Audited

statements of accounts for FY 2013-14 is much higher than the fuel cost compared to

the norms. The objectors have requested the Commission to direct the Petitioner to

submit adequate information for true-up of fuel cost for FY 2013-14 and allow the fuel

cost as per norms only. Also, the objectors have requested the Commission that, for

FY 2014-15 and FY 2015-16, any inefficiency in operation shall not be considered as

23

a reason for allowing higher fuel cost.

Response of APGCL:

APGCL has submitted that the Fuel cost claimed in the True-up of FY 2013-14 is the

actual cost incurred in the FY 2013-14. The station wise fuel bills have also been

submitted to AERC from where the actual stations wise Fuel Cost of NTPS and LTPS

can be reconciled. APGCL had appealed to Hon’ble Commission to consider the

actual fuel cost incurred in FY 2013- 14, however APGCL has further submitted that

it is Commission’s discretion to approve the above fuel cost as it may deem fit.

Also, as requested, APGCL has submitted the cost of Generation of NTPS, LTPS

and KLHEP for past seven years as given below:

Station Cost of generation in Rs/Kwh

FY-08 FY-09 FY-10 FY-11 FY-12 FY-13 FY-14

NTPS 1.68 2.06 1.79 2.5 3.03 3.02 4.14 LTPS 1.9 2.17 2.3 2.83 3.12 3.06 3.74 KLHEP 1.06 2.46 1.43 1.76 1.57 0.96 2.33


The Commission has approved the fuel cost in the true-up for FY 2013-14 based on

the approved performance parameters, GCV of gas as per the fuel bills submitted by

the Petitioner. For ARR, the Commission has considered the gas price notified by

Ministry of Petroleum and Natural Gas (MoPNG) and latest GCV as per fuel bills, for

projecting the fuel cost for FY 2015-16. The detailed analysis is given in the

respective Chapters of this Order.

Issue No. 6: Employee expenses

Objections:

ABITA and FINER has submitted that the actual employee expenses for FY 2013-14

and petitioned value for FY 2014-15 and FY 2015-16 as submitted by the Petitioner

are higher than that approved by the Commission in the MYT Order. The objector

submitted that the employee expense is a controllable item under the MYT regime

and therefore, any gain or loss on account of higher or lower actual employee

expenses should be to the account of the Petitioner. ABITA further requested the

Commission not to revise the employee expenses from that approved by the

Commission. Also, ABITA has requested the Commission to consider escalation as

per earlier approach of CPI: WPI of 60:40.

24

Both ABITA and FINER has submitted that the O&M expenses are a controllable

item and if it is revised each year based on actual, the concept of MYT framework

shall be defeated. ABITA requested the Commission to approve the O&M expenses

as approved in the MYT Order for FY 2013-14 to FY 2015-16.

Shri Jayanta Deka has submitted that present employee strength of APGCL is much

more than actual requirement and APGCL has not taken any initiatives to scale down

the employee strength in a phased manner and hence, ARR gap of Rs. 38.76 Crore

shall not be allowed while fixing up new tariff.

Response of APGCL:

APGCL has submitted the reference of Regulation 36 of the existing AERC Tariff

Regulations 2006, which states that:

36.2: The Generating Company shall prepare a budget for Operation & Maintenance

Expenses indicating for each head of account actual expenditure of the last year,

estimate for the current year and projection for the next year and submit it to the

Commission along with the tariff petition.

APGCL submitted that it has claimed the actual employees cost of Rs. 82.00 Crore

on the basis of the Audited statements of accounts for the FY 2013-14 in accordance

with the above clause of the tariff regulation of AERC. The actual employees cost is

higher than that of the approved amount on account of the higher DA sanctioned.

APGCL stated that, the Hon’ble Commission while approving Employees cost has

escalated the trued up employees cost of FY 11-12 by 8% twice to arrive at Rs.

78.12 Cr for FY 13-14.However, the Govt. of Assam has hiked the Dearness

Allowance (DA) by 10 % from 80 percent to 90 percent w.e.f July 01, 2013 and by

another 10% from 90 percent to 100 percent w.e.f January 01, 2014, on which

APGCL has no control and thus the employees expenses claimed at Rs. 82.00 Cr is

the actual expenditure incurred which has been reflected in the Audited Statement of

Account and accordingly claimed in true-up for FY 2013-14.

APGCL has submitted that for FY 2014-15, APGCL has calculated the claims for

Employees Cost expenses by considering six months actual and proportionate

assumption for the remaining six months and hence arrived at a claim of Rs. 86.54

Crore.

Regarding employee strength, APGCL has submitted that it was registered as a

successor company of erstwhile ASEB w.e.f October 2003. As of April 01 2015,

25

manpower strength of APGCL was 1281. The number of new recruits since FY 2004-

05 is 345. Most of the employees recruited during the existence of ASEB are above

55 years of age now and are going to retire in the next few years. So, the scaling

down of these employees has not been considered as of now. The new recruitments

since the formation of APGCL has been totally on need basis. As such, APGCL

submitted that the manpower strength of APGCL as of today is justified and

necessary for its operations.

Further, APGCL submitted that the actual Employees cost claimed in the True-up

petition for FY 2013-14 has been evaluated with DA hikes and yearly increments and

it is mere 5% (difference of Rs. 3.876 Cr) higher than the approved cost of

employees in the MYT order for FY 2013-14 to FY 2015-16, which is very nominal

and justifiable considering DA hike.


The Commission has approved the employee expenses in the true-up for FY 2013-

14 after due prudence check of the actual expenses in accordance with AERC Tariff

Regulations, 2006. The Commission has approved the employee expenses for FY

2014-15 and FY 2015-16 by considering the appropriate growth rates over the

employee expenses approved for FY 2013-14 after truing up. The detailed analysis is

given in the respective Chapters of this Order.

Issue No. 7: Administration and General Expense

Objections:

Similar to Employee Expense, ABITA and FINER has submitted that the actual A&G

expenses for FY 2013-14 and petitioned value for FY 2014-15 and FY 2015-16 as

submitted by the Petitioner are higher than that approved by the Commission in the

MYT Order, indicating poor management of cost by APGCL. The objector has

requested the Commission to approve A&G as approved in MYT order. Also, ABITA

has requested the Commission to consider escalation as per earlier approach of CPI:

WPI of 60:40.

Shri Jayanta Deka has submitted that A&G expense of Rs. 9.85 Crore, estimated for

ARR of FY 2015-16 is not reasonable and such lavish expenditure should not be

allowed to avoid extra burden on consumers.

Response of APGCL:

26

APGCL has submitted, that in line with Regulation 36, APGCL has claimed the actual

Administration & General expenses of Rs. 12.53 Cr for FY 2013-14, based on the

Audited statements of accounts for the FY 2013-14. The Hon’ble Commission has

approved an amount of Rs. 5.93 Cr for FY 13-14. However, during FY 13-14, an

amount of Rs. 5.78 Cr has been further provided for Electricity bill of different offices

of APGCL (which is required to be paid to APDCL) in addition to normal A&G

expenses, which resulted in increase in A&G expenses compared to the previous

year approved by the Hon’ble Commission.

Moreover, APGCL further submitted that the Hon’ble Commission in its technical

validation session had already sought after the reason & certification for such

provision. In reply the certification i.e. estimate for electricity charges furnished by

APDCL was produced to Hon’ble Commission for reconciliation of components of

A&G expenses appeared in Audited Statement of Account and claimed in true up

petition.

APGCL has submitted that for FY 2014-15, APGCL has calculated the claims for

A&G expenses by considering six months actual and proportionate assumption for

the remaining six months and hence arriving at a claim of Rs. 9.41 Cr.


The Commission has approved the A&G expenses in the true-up for FY 2013-14

after due prudence check of the actual expenses in accordance with AERC Tariff

Regulations, 2006. The Commission has approved the A&G expenses for FY 2014-

15 and FY 2015-16 by considering the appropriate growth rates over the approved

value for FY 2013-14 after truing up. The detailed analysis is given in the respective

Chapters of this Order.

Issue No. 9: R&M expenditure

Objections:

ABITA submitted that petitioned value for R&M expense for FY 2014-15 and FY

2015-16 as submitted by the Petitioner are higher than that approved by the

Commission in the MYT Order, indicating poor management of cost by APGCL. The

objector has requested the Commission to approve R&M expense as approved in

MYT order. Further the objector has stated that special R&M expenses as claimed by

petitioner shall only be allowed based on actual expense basis for FY 2013-14 and

FY 2014-15 and the same shall only be allowed if such expenses are already

27

approved by the Hon’ble Commission.

Also, ABITA submitted that the special R&M expenses are of capital nature having

use for multiple years and same shall be capitalised instead of passing on the entire

burden in one year.

Both ABITA and FINER has submitted that the O&M expenses are a controllable

item and if it is revised each year based on actual, the concept of MYT framework

shall be defeated. The objector has requested the Commission to approve the O&M

expenses as approved in the MYT Order for FY 2013-14 to FY 2015-16.

Response of APGCL:

APGCL submitted that, The Hon’ble Commission has approved an amount of Rs.

14.91 Cr for Repair and Maintenance (R&M) for FY 2013-14. However, during FY

2013-14 there was expenditure for the overhauling of Karbi Langpi HEP Unit#2 of Rs.

9.03 Cr, the overhauling work for the same was approved in total by the Commission

in the tariff order for FY 2013-14 and in the Review Order for FY 2013-14.

APGCL has submitted that, as mentioned in the note for the Overhauling of Unit-2 of

LTPS, the work has already been approved by the Hon’ble Commission in its Review

Order dated July 07, 2014 on APGCL’s Petition on the MYT Order of FY 2013-14. In

its MYT Order dated November 21, 2013, initially AERC rejected the proposed

Regular Overhauling as per OEM guidelines of various units of APGCL and asked

APGCL to submit detailed Cost Benefit Analysis for this proposed expenditure.

Accordingly, APGCL submitted the detailed Cost Benefit Analysis for the proposed

overhauling expenditure in its Review Petition and requested the Commission to

approve the work as it was of Regular Repair & Maintenance nature.

Consequently, the Commission after prudence checking approved the work in its

Review Order. As the approval came only in July 14, the overhauling work of unit 2

could not be done as proposed in FY 2013-14. The Original estimated work amount

was Rs. 8.5 Cr, and later it was revised to Rs. 12.94 Cr with additional work.

Accordingly, the additional amount has been placed for the Hon’ble Commission’s

approval in the APR for the FY 2014-15. Further, APGCL submitted that the regular

R&M cost for FY 14-15 is taken at par to that approved in Tariff order FY 14-15 i.e.

Rs. 17.11 Cr, however, as the approved amount did not include Lubricants &

Consumables Stores& Turbine Oil, the same were included in the Regular R&M

expenses(Rs. 1.41 Cr and 0.23 Cr respectively) coming to a total Regular R&M of

28

Rs.(17.11+1.41+0.23) Cr=18.75 Cr.

Similarly, APGCL submitted that the Special R&M expenses of Rs. 32.00 Cr have

been proposed for the FY 2015-16 for the Overhauling of APGCL’s various units as

per the OEM guidelines. This overhauling work is in addition to regular repair and

maintenance nature and is important for the smooth running of APGCL’s generating

units. The detailed Cost Benefit Analysis of the same has been submitted in the

petition for the Commission’s consideration.

Regular Repair & Maintenance Cost of 21.55 Cr has been proposed by escalating

the approved Repair & Maintenance Cost for the year 2014-15 as per the tariff order

dated November 21, 2014 at a rate of 15%. Rate of escalation at 15% has been

taken considering the old machineries of APGCL’s power stations (NTPS, LTPS) and

for foreign exchange variation.


The Commission has approved the regular and special R&M separately. As the

Commission has allowed for special R&M for vintage plants in its various tariff orders

based on detailed prudence check, the same has been allowed. The regular R&M for

FY 2013-14 as claimed by the APGCL has been allowed as per Audited Statement of

Accounts. The Commission has approved the regular R&M expense for FY 2014-15

and FY 2015-16 by considering the appropriate growth rates over the approved value

for FY 2013-14 after truing up. The details have been provided in the relevant

sections of the order.

Issue No. 10: Capital expenditure

Objections:

ABITA submitted that the Petitioner has not submitted the details of heads under

which capital expenditure was incurred in FY 2013-14. The Existing plants of APGCL

are vintage plants and APGCL keeps on investing on these plants without submitting

any details of expenditure while on the other hand inspite of such investments, plants

are under performing. Also, objector has stated that no prior approval of capital

expenditure was taken in FY 2013-14.

ABITA has further submitted that, APGCL has an amount of Rs. 37.56 Crore as

capitalised against Myntriang while no generation against that plant has been

29

achieved indicating that plant may not have commissioned in FY 2013-14 and hence

capitalisation of this expense is not justified.

ABITA has further submitted that, APGCL has not provided the details of schemes

under which State Government Loan and PFC loan for FY 2013-14 has been utilised.

ABITA has further requested the Hon’ble Commission to seek information from

APGCL regarding the details of capital investment and capitalisation during the FY-

2013-14 and further requests the Hon’ble Commission to ask APGCL to submit the

details of establishment expenses and measures taken for reduction of same.

Response of APGCL:

APGCL has submitted that, as per the Audited Statement of Accounts, there is an

increase in assets amounting to Rs. 41.30 Crore in Gross Asset block. APGCL has

submitted that it had already provided the plant wise –head wise details under which

the capital expenditure is incurred to the Hon’ble Commission in its calculation for

Depreciation. All the capital expenditures incurred in FY 2013-14 were undertaken

after prior approval of the Hon’ble Commission. The Hon’ble Commission has

directed APGCL to provide adequate details of capital investment and capitalisation

during FY 2013-14, 2014-15, 2015-16 in its technical validation session and

accordingly APGCL had furnished the details to the Commission.

APGCL has further submitted that during FY 2013-14, Rs. 37.56 Cr. has been

capitalized against Myntriang SHEP in the month of March’14.However, in

accordance with the audit observations, this capitalized amount was transferred to

FY 2014-15, the year of actual commercial operation of the plant. However the

amount (i.e. depreciation, interest) claimed for depreciation is a negative amount of

Rs. -0.28 Cr (Page 124 of the Petition) & a small interest expense of Rs. 0.02 Cr

(Page 129 of the Petition). The Commission had already directed to provide

adequate details of capital investment and capitalisation during FY 2013-14.

Accordingly APGCL had already furnished the details to the Commission.

APGCL has further submitted that it has shown Rs. 18.57 Cr of State Government

loan and Rs. 50.00 Cr of PFC loan for FY 2013-14 (Page 181 of the Petition). The

detailed Schemes with DPR for the above investment (Rs. 18.57 Cr) was submitted

to Govt. of Assam for incorporation in the Annual Plan FY 2013-14. Accordingly,

GOA has approved and released fund to APGCL for execution of these schemes.

The quarterly progress report on implementation of these projects is being submitted

30

to AERC, as per directives of the Hon’ble Commission. Accordingly, APGCL had

taken up these schemes for Investment in FY 2013-14. The drawal of Rs. 50.0 Cr.

PFC loan is against ongoing 100MW Namrup Replacement Power Project.

APGCL has further submitted that it has furnished the details of Investment and

Establishment Expenditure for the last seven years supported by CAG Audited

statements of accounts to the Hon’ble Commission for approval after prudence check

and the Hon’ble Commission had already constituted a Committee with members

from various prominent sectors for quarterly review of Performance of APGCL.


The Commission has carried out due prudence check of investment plan for capital

expenditure. The details are provided in relevant chapters

Issue No. 11: Return on Equity (RoE)

Objections:

ABITA submitted that the Return on Equity claimed by the Petitioner is higher than

that approved in MYT order and since APGCL has not taken any approval on revised

equity capital, RoE shall be approved as per MYT order.

Response of APGCL:

APGCL has submitted that it has claimed Return on Equity of Rs. 38.59 Cr. The

equity capital was approved by the Hon’ble Commission in its tariff order for FY

2008-09 & 2009-10. Since then no revision is made in the equity capital for the

subsequent years. APGCL hence considered that revision of equity capital is

necessary and in order to seek approval on revised equity capital base, APGCL in its

petition has worked out the Cost of Capital (Page 199 of the Tariff Petition) and

Estimated Approved Equity Capital (page 200 of the Tariff Petition) as follows:

a) Cost of Capital: - The Gross Fixed Assets Value (GFA) as on April 01, 2009 as per

the Audited Statement of Accounts has been considered as the Gross Approved

Capital cost for the FY 2009-10. The Gross Fixed Assets Value (GFA) as on April 01,

2009along with the station wise additions during the FY 2009-10 has been

considered as the Gross Approved Capital cost for the FY 10-11. In the same way,

the Gross Approved Capital Cost has been calculated for each year till March 31,

2016.

b) Approved Equity component of Capital Cost:- To arrive at the Equity component of

31

this capital cost, APGCL considered the Capital cost from FY 2009-10 to FY 2015-16

(calculated at (a) above) and 30% of the same is compared with Actual paid-up

capital duly approved by the Hon’ble Commission. APGCL considered the lower of

30% of the Approved Capital Cost and the Actual equity capital as apportioned

above.

On the revised Equity Capital, base return on equity is calculated @ 14%. The soft

copy of the same in MS-Excel format is also furnished to the Hon’ble Commission for

prudence check. Similarly RoE for FY 2014-15 and FY 2015-16 has been arrived.


The Commission has approved Return on Equity in the true-up for FY 2013-14, APR

for FY 2014-15, and ARR for FY 2015-16 in accordance with AERC Tariff

Regulations, 2006. The detailed analysis is given in the respective Chapters of this

Order.

Issue No. 12: Depreciation

Objections:

ABITA submitted that the Petitioner has not submitted the computations of

depreciation in the Petition. ABITA requested the Commission to approve the

depreciation in accordance with AERC Tariff Regulations, 2006.

Response of APGCL:

APGCL submitted that Depreciation has been calculated using the methodology &

schedule of depreciation rates as prescribed by the Hon’ble AERC. APGCL has

further submitted that the Hon’ble Commission had already directed APGCL to

provide the details of investment incurred, assets capitalized/de-capitalized, plant

wise break up assets under the various heads & Computation methodology along

with soft copy of the same in MS-Excel format for the relevant financial years.

APGCL has furnished all the details sought by the Hon’ble Commission.

APGCL has further submitted that it has deducted the depreciation on assets created

out of grants and capital subsidies in line with Tariff Regulations. APGCL mentioned

that the details of assets and capital work in progress created out of grants and

capital subsidies have been provided in the petition.

32


The Commission has approved depreciation in the true-up for FY 2013-14, APR for

FY 2014-15, and ARR for FY 2015-16 in accordance with AERC Tariff Regulations,

2006. The detailed analysis is given in the respective Chapters of this Order.

Issue No. 13: Interest and Finance Charges

Objections:

ABITA submitted that the actual interest expenses for FY 2013-14 as submitted by

the Petitioner are much higher than that approved by the Commission. Also, Interest

on government loan has been taken as 10.5% against 10% approved in MYT for FY

2013-14 overstating the interest. The objector has requested the Hon’ble

Commission to check the Schedule of loans before approval of Interest and Finance

Charges.

FINER has requested for submission of methodology for calculation of capitalisation

of interest so as to enable them to respond to the same in a meaningful way.

Response of APGCL:

APGCL submitted that the interest rate considered for loan from Government has

been submitted at Annexure C of the tariff petition. The interest on PFC loan is paid

on the basis of claim raised by PFC as per the terms and conditions of each loan

agreement and accordingly, APGCL makes payment of the same on receipt of the

claims from PFC. Claims relating to PFC are annexed in Annexure-E of the tariff

petition.

Further, APGCL has submitted that it has furnished all the details on Interest and

finance charges along with calculation in MS-Excel format as directed during the

technical validation session. APGCL has submitted that it has also provided all the

sanction letters of loan from Government of Assam in Annexure B and loan drawn

from PFCL during FY 2013-14 in Annexure D of the Tariff Petition.

APGCL has further submitted that the methodology adopted by APGCL for

Capitalisation of the interest and finance Charges has been shown in the section for

Investment in FY 2013-14(Table 35, Page 180-181 of the Tariff Petition), Revised

Investment Proposal FY 2014-15 (Table-6A, Page 14 of the Tariff Petition) &

Investment Plan Table II FY 2015-16 (Page 65-66 of the Tariff Petition), which are as

33

follows,

• The addition of debt in FY 13-14 along with the opening debt as on April o1,

2013 is summed up to arrive at closing debt balance as on March 31, 2014 of

each project

• Project-wise closing debt balance is arrived for FY 2014-15 &FY 2015-16 in

similar way.

• On the closing debt balance, the applicable interest rate in respect of State

Govt. loan, PFC loan and other FI loan are applied to calculate interest

expenses for FY 2013-14, 2014-15 &2015-16.

• The interest expenses in respect of projects to be commissioned beyond the

control period are excluded as a whole and capitalized to form part of Capital

work in progress. However, with respect to the projects to be commissioned

in the FY 2015-16 i.e. Myntriang Stage-I along with enhanced capacity of 4.5

MW & Namrup RPP in the FY 2015-16, proportionate interest expenses are

charged to revenue and the balance is capitalized. Accordingly, the figures of

Rs. 19.44 Crore, Rs 22.85 Crore, & Rs. 19.75 Crore for the FY 2013-14, FY

2014-15 & FY 2015-16 are calculated. The project-wise break up of interest

expenses and capitalized expenses can be referred to in Page 127- 132 of

the Petition.


The Commission has approved the interest and finance charges in accordance with

AERC Tariff Regulations, 2006. The Commission has verified the details of loan from

APGCL. The detailed analysis is given in the respective Chapters of this Order.

Issue No. 14: Incentive

Objections:

ABITA submitted that Incentive has been claimed on account of higher PLF,

however, due to poor SHR and high Auxiliary consumption, higher expenses are

claimed and therefore no incentive shall be allowed to APGCL.

Response of APGCL:

APGCL submitted that it has claimed Incentive for NTPS, LTPS and KLHEP as per

the Regulatory norms.


34

The Commission has approved incentive as per the norms given in the AERC Tariff

Regulations, 2006. The detailed analysis is given in the respective chapters of this

order.

Issue No. 15: Submission of Fixed Asset Register

Objections:

FINER has submitted that APGCL has not submitted any proof of assets in operation

in the form of Fixed Asset Register. FINER also referred to APTEL order dated

November 11, 2011 in the appeal of 121 of 2010 for the same.

Response of APGCL:

APGCL submitted that it is maintaining a fixed asset register by taking into

consideration the earlier fixed asset register of the company (derived from the

opening trial balance of APGCL as on April 01, 2005 received on bifurcation of

erstwhile ASEB). APGCL further submitted that, during the FY 2013-14, physical

verification of fixed assets was also carried out and based on the same, a fresh fixed

asset register was prepared during the year and the same is produced for statutory

and C&AG audit.


The Commission has taken note of the Petitioner’s submission and has issued necessary directive in this regard.

Issue No. 16: Principles for Tariff fixation

Objections:

Shri Jayanta Deka has submitted that the proposed tariff for FY 2013-14 was already

too high, exorbitant, excessive and unaffordable to the poor, common people and the

people from economically backward classes. Shri Jayanta Deka has further

submitted that the proposed tariff Enhancement plea of the APGCL is not in

consonance with the principle laid down in Section 61 & 62 of Electricity Act 2003

and national tariff policy. The proposed enhancement of tariff has put the interest of

consumer on the back seat.

Response of APGCL:

APGCL has submitted that they have proposed the tariff for FY 2015-16 in

accordance with the principle of Section 61 of the Electricity Act 2003, National Tariff

35

Policy and taking into consideration the inflationary trend for fuel cost and

spares/equipment required to run the APGCL’s plant smoothly. APGCL has also

submitted that the tariff shall allow for recovery of cost of electricity in reasonable

manner and that the tariff should reflect the cost of supply of electricity. Further

APGCL has submitted the methodology of calculation of various cost components.


The Commission has taken note of the Petitioner’s submission and has approved

tariff after detailed prudence check of the submission made by APGCL.

Issue No. 17: MYT Principle

Objections:

Shri Jayanta Deka, has submitted that APGCL has not followed MYT tariff principle

and therefore the petition of APGCL should be rejected.

Response of APGCL:

APGCL has submitted that it has filed petition as per MYT principle laid down by

Commission.


The Commission has taken note of the Petitioner’s submission and has approved

tariff after detailed prudence check of the submission made by APGCL in accordance

with the MYT principles.

Issue No. 18: General Comments

Objections:

Consumers Legal Protection Forum, in their written submission, submitted that the

objections and suggestions during previous Hearings, have not been duly

considered. Consumers’ Legal Protection Forum has further submitted that the

Hearing is being organized by AERC at Guwahati with the presence of limited

number of participants. They submitted that many consumers are interested to be

present in the Hearing. However, they are unable to attend the Hearing as it takes

place centrally, at Guwahati. As such, consumers are having difficulties to file

objections against tariff hike. Consumers Legal Protection Forum demanded that the

Commission should organize Hearing at every district headquarter and take

objections/ suggestions prior to taking any decision on Tariff hike.

36

.Comments of the Commission:

The Commission has noted the objections and suggestions provided. However, It has

to be noted that the APDCL publishes notice (as per direction of the Commission)

requesting public comments on the Tariff Petition. Thereafter, based on the number

of response/objection petitions received from consumers/societies/associations etc of

various parts of Assam, the Commission decides on suitable place/s of Hearing.

For this year, response/objections received by the Commission from outside

Guwahati, were from associations who can come down to Guwahati. Therefore, the

Hearing was conducted centrally in Guwahati. In future also Commission will decide

on requirement of conducting Hearing at multiple places based on the volume of

Public response to Tariff Petitions.

The Commission takes note of all the objections of the objectors during the tariff

setting process and has set the tariff as per regulations and after doing proper

prudence check of each of submission by APDCL and objectors.

Issue No. 19: Promotion of Co-generation and generation of electricity from Renewable Energy Sources.

Objections:

Shri Jayanta Deka has submitted that, APGCL has not taken any steps for co-

generation of electricity from renewable energy sources. He submitted that the

burden on the consumers would have been lower if APGCL has paid heed towards

the generation of electricity from renewable energy sources and thus APGCL has not

followed the principle laid down in section 61(g) of the Electricity Act 2003 and hence

the prayer for enhancement of tariff should be rejected on the above ground.

Response of APGCL:

APGCL has submitted that it has already commissioned a 3 MW hydel project as a

part of Myntriang Small Hydro Electric Project (SHEP), in the year 2014 under

Renewable Energy Program. Another 10.5 MW of the project is expected to be

commissioned in the FY 2015-16.In addition to these, the following Renewable

Energy projects are under process of implementation:

1. 24 MW Borpani Middle-II SHEP (DPR of the project is already approved by

APGCL Board and Preliminary survey work for road and building is in

progress)

2. 21 MW Borpani Middle-I and 12 MW Borpani Barrage Toe SHEP (DPR for

these projects is under preparation)

37

3. 2 MW Solar PV projects each at NTPS and LTPS(DPR for these projects are

under preparation)

APGCL further submitted that the cost of generation of power from renewable

sources is usually high. Hence, to attract investors in the Renewable Energy Sector,

a separate Regulation called AERC (Terms and Conditions for Tariff Determination

from Renewable Energy Sources) has been issued by AERC. APGCL requested

AERC to scale down its tariff for RE sources to have some relevance with tariff of

power from regular sources of energy.


The Commission always encourages Renewable Energy projects and have

formulated various regulations to promote renewable energy including notification of

minimum renewable purchase obligations.

Issue No. 20: Internal Financial Control

Objections:

Assam Bidyut Grahak Adhikar Parishad has submitted that several flaws in Audited

Statement of Accounts have been pointed out by CAG.

Response of APGCL:

APGCL has submitted that the objection pertains to Audited Statement of Account of

FY 2012-13 for which the Necessary rectification has already been made in the

accounts for FY 2013-14 under the head of prior period expenses/ credit.


The Commission has taken note of the objection. The Commission has done

prudence check of prior period expense of FY 2013-14 related to period prior to FY

2013-14 while truing up and similarly will do the prudence check of audited prior

period income and expense in subsequent order.

38

4 Truing up for FY 2013-14

4.1 METHODOLOGY FOR TRUING UP

The Commission approves the cost parameters through approval of the Annual

Revenue Requirement based on the data provided by the petitioner as available

during the time of filing tariff petitions. The cost approvals for each of the items are

based on projection of expenses and revenue generation before the start of the year

and hence, the projections might vary over the course of the year.

The actual cost/values for certain elements/parameters may vary as against the

approved cost during the year due to various controllable and uncontrollable factors.

The generating company may end up with higher or lower expenditure, as the case

may be, at the end of the year as against the approved cost. In case of actual fixed

costs being higher than the approved fixed costs, there is no mechanism during the

year to recover the additional fixed costs over and above the approved fixed costs as

the tariff for the generating company cannot be amended more than once as per

Regulation 5.1 of the AERC Tariff Regulations, 2006, the abstract of which is

provided below:

“No tariff or part of any tariff may ordinarily be amended, more frequently than once

in any financial year, except in respect of any changes expressly permitted under the

terms of any fuel surcharge formula as may be specified in terms of subsection (4) of

section 62 of the Act specified in Regulation 9 of these Regulations”

As per Regulation 9 of AERC Tariff Regulations, 2006, the recovery of additional cost

for fuel and power purchase over and above the cost approved by the Commission is

provided on a quarterly basis in accordance with the formula approved by the

Commission.

Accordingly, the Commission approved the Fuel and Power Purchase Price

Adjustment Formula (FPPPA) and the same was notified on December 28, 2010 as

AERC (Fuel and Power Purchase Price Adjustment Formula) Regulations, 2010.

Under the truing up mechanism, APGCL has analysed the difference between actual

expenditure and the expenditure approved by the Commission and requested for

39

recovery of the previous year’s actual expenditure through truing up. Based on above

methodology, APGCL has submitted the truing up proposal for FY 2013-14,

supported by audited Annual Statement of Accounts.

The Commission has analysed the actual expenditure for the previous year/years

based on the Audited statements of accounts of the generating company and

allowed/disallowed the recovery of the actual expenditure through the present year’s

tariff, subject to prudence check.

4.2 BACKGROUND

The Commission has approved the ARR and Tariff for FY 2013-14 in the MYT Order

dated November 21, 2013. Further, the Commission vide the Tariff Order dated

November 21, 2014 carried out the true-up for FY 2012-13 including revised true-up

for FY 2011-12, Review for FY 2013-14 and determined the revised ARR and

generation tariff for FY 2014-15.

APGCL has submitted the Petition for approval of true-up for FY 2013-14, APR of

2014-15 and ARR of 2015-16 and revised ARR and generation tariff for FY 2015-16

on December 20, 2014. However, APGCL submitted the Audited Statement of

Accounts on April 07, 2015. As directed by the Commission, APGCL further

submitted the revised petition for truing up for FY 2013-14, APR of FY 2014-15 and

approval of revised ARR and determination of generation tariff for FY 2015-16

incorporating additional information requirements on April 10' 2015.

On scrutiny, it was noticed that the data furnished in respect of truing up for FY 2013-

14, was deficient in some respects and the Commission sought further

information/clarification from APGCL, which has been submitted by APGCL. The

Commission has carried out the truing up for FY 2013-14 based on the submissions

of the Petitioner in accordance with AERC Tariff Regulations, 2006 and prudence

check.

4.3 TRUE-UP FOR FY 2013-14

4.3.1 Operating Capacity

The operating generation capacity of APGCL for FY 2013-14 is as shown in the

Table given below:

40

Table 4.1: Operating Generation Capacity of APGCL for FY 2013-14

Station Operating Capacity (MW)

NTPS 119.50

LTPS with WHRU 157.20

KLHEP 100.00

Total 376.70

APGCL has submitted that earlier Myntriang Stage-II SHEP project was expected to

be completed in June’13. However due to delay in completion of project, it, started

commercial operation only from August 08, 2014. Thus, there was no generation

from Myntriang Stage-II SHEP in FY 2013-14.

4.3.2 Availability / Capacity Index

In accordance with Regulation 39.1 and Regulation 61.1 of AERC Tariff Regulations,

2006, the Target Availability / Capacity Index for recovery of full fixed charges are as

shown in the Table below.

Table 4.2: Target Availability / Capacity Index for recovery of full fixed charges

Station Target Availability / Capacity Index (%)

NTPS 50%

LTPS 50%

KLHEP (Run-of-river) with Pondage

85%

The actual Availability/Capacity Index for FY 2013-14 as per SLDC certification is

shown in the Table below:

Table 4.3: Actual Availability / Capacity Index for FY 2013-14 as submitted by APGCL (%)

Station Availability as Certified by

SLDC (%)

NTPS 61.70


KLHEP (Run-of-river) 91.50

APGCL, in its petition for True Up for FY 2013-14 has submitted that KHLEP is a

41

Run-of-River power station with pondage and not a Run-of-River project (without

Pondage) as submitted in earlier Tariff Petitions. As the matter that KLHEP is a

project with Pondage has been brought to the notice of the Commission in this

petition, the Commission directed APGCL to provide justification for the same. In

response to Commission's directive, APGCL submitted the DPR of the KLHEP

project duly signed by authorised signatory and also the Generation schedules. From

the analysis of the DPR and daily generation schedules of KHLEP, it may be

considered that the KLHEP project is not a Run-of-River project (without pondage)

but a Run-of-River project with pondage and therefore, for Truing Up of FY 2013-14,

the Commission has considered KHLEP as a Run-of-River power station with

pondage for the FY 2013-14. Accordingly, the relevant target availability as per the

norms given in the AERC Tariff Regulations, 2006 is considered. However, there will

not be any change in treatment of Incentive for the years prior to FY 2013-14.

It is observed from the above Table that the actual Availability / Capacity Index for FY

2013-14 is higher than the target Availability / Capacity Index specified for recovery

of full fixed charges for all the plants and hence, APGCL is eligible to recover the

full fixed charges for FY 2013-14.

As actual Capacity Index of KLHEP of 91.50%, is higher than the normative capacity

index specified for run-of-the-river with pondage power generating stations,( i.e.,

85%),efficiency incentive is allowed for the Station.

4.3.3 Plant Load Factor (PLF)

In accordance with Regulation 39.2 of AERC Tariff Regulations, 2006, the Target

PLF for eligibility for efficiency incentive for NTPS and LTPS, is as shown in the

Table below:

Table 4.4: Target PLF for efficiency incentive

Station Target PLF (%)

NTPS 50.00

LTPS 50.00

The PLF approved by the Commission and actuals as submitted by APGCL for FY

2013-14 is shown in the Table below:

42

Table 4.5: PLF approved by the Commission and actuals as submitted by

APGCL for FY 2013-14

Station PLF approved in MYT order dated November 21, 2013 (%)

Actuals as submitted by APGCL (%)

NTPS 50.00 50.30

LTPS with WHRU 62.10 65.08

KHLEP 44.50 48.23

Commission’s view

APGCL has submitted month wise break up of actual gross generation and PLF for

its stations for FY 2013-14. The Commission observes that the actual PLF of

APGCL's stations for FY 2013-14 is in order and higher than approved value. As the

actual PLF for NTPS and LTPS for FY 2013-14 is higher than the target PLF,

efficiency incentive is allowed for FY 2013-14 for these two thermal generating

Stations.

For truing up purposes, the actual PLF achieved has been approved, as shown in the

Table below:

Table 4.6: PLF approved for truing up for FY 2013-14 (%)

4.3.4 Auxiliary Energy Consumption

The Auxiliary Energy Consumption approved by the Commission for FY 2013-14 and

actuals submitted by APGCL for its Stations for FY 2013-14 is shown in the Table

below:

Station Approved by the Commission for

truing up

NTPS 50.30


KHLEP 48.23

43

Table 4.7: Auxiliary Energy Consumption for FY 2013-14

Station Approved in MYT Order dated November 21, 2013

(%)

Actuals as submitted by APGCL (%)

NTPS 4.50 6.00

LTPS 5.50

8.80

KLHEP 0.50

0.50

In response to Commission query on reason for high Auxiliary consumption, APGCL

has submitted that the CERC norm could not be followed in case of ageing NTPS

and LTPS for different mode of operation & frame sizes of the power stations. For

KLHEP also, CERC norms was found to be not applicable as the power project was

commissioned in 2007 after an inordinate delay of 25 years for which its project cost

was not at par in comparison to the norms of a Hydro Project’s having normal

gestation period.

APGCL has submitted that the average actual Auxiliary Power Consumption (APC)

for the last 3 years of both LTPS/NTPS is on the higher side than the normative

targets fixed by Commission. APGCL has also submitted that they are constantly

trying for reduction of APC to the extent possible and has already taken numerous

initiatives/ steps as per recommendation of Energy Audit Report of National

Productivity Council (NPC).As per direction of Commission, APGCL submitted the

following break-up of Auxiliary Energy Consumption for NTPS and LTPS:

Table 4.8: Break-up of Auxiliary Energy Consumption submitted by APGCL for

FY 2013-14

Particulars LTPS NTPS

MU % MU %

Gross Generation

896.15

-

526.57

-

Station Auxiliary Energy Consumption

63.55 7.10

18.62

3.54

Transformer loss

15.13

1.69

12.96

2.46

44

Particulars LTPS NTPS

MU % MU %

Total Auxiliary Energy Consumption

78.68

8.79

31.58

6.00

Commission’s view

The actual Auxiliary Energy Consumption achieved by APGCL for NTPS and LTPS is

higher than that approved by the Commission. As Auxiliary Energy Consumption is a

performance parameter, the Commission, in this Order, has approved the Auxiliary

Energy Consumption for FY 2013-14 same as approved in the MYT Order dated

November 21, 2013. It is pertinent to mention here that in the MYT Order dated

November 21, 2013, the Commission has set the Auxiliary Energy Consumption for

FY 2013-14 after considering the age of plant and other relevant parameters and as

such there is no major scope to deviate from the set parameters. The Auxiliary

Energy Consumption approved by the Commission for the Truing Up of FY 2013-14

is shown in the Table below:

Table 4.9: Auxiliary Energy Consumption approved for truing up for FY 2013-14

Station Approved by the Commission for

truing up purposes (%)

NTPS 4.50

LTPS with WHRU 5.50

KLHEP 0.50

4.3.5 Gross Generation and Net Generation

The station-wise gross generation and net generation approved by the Commission

for FY 2013-14in the MYT order and actuals as submitted by APGCL is shown in the

Table below:

Table 4.10: Gross Generation and Net Generation for FY 2013-14(MU)

Station

Approved in MYT order dated November 21, 2013

Actuals for FY 2013-14 as submitted by APGCL

Gross Net Gross Net

NTPS 523.41 499.86 526.57 494.98

LTPS 855.30 808.26 896.15 817.47

Total Thermal 1378.71 1308.11 1422.72 1312.45

45

Station


Actuals for FY 2013-14 as submitted by APGCL

Gross Net Gross Net

KLHEP 390.00 388.05 422.51 420.40

Myntriang SHEP 17.69 17.60 Nil Nil

Total Hydro 407.69 405.65 422.51 420.40

Total APGCL 1786.40 1713.76 1845.23 1732.85

In reply to the Commission’s query about proof of gross generation, APGCL has

submitted the actual gross generation and net generation duly certified by SLDC for

its stations for FY 2013-14. The Commission observes that the actual gross

generation and net generation, as submitted by APGCL, is in order. The Commission

has considered the actual gross generation as submitted by APGCL and as certified

by SLDC. The Commission has approved the Net generation based on the approved

Auxiliary Energy Consumption percentage. The station wise gross generation and

net generation approved by the Commission for FY 2013-14 is shown in the Table

below:

Table 4.11: Gross and Net Generation approved for truing up for FY 2013-

14(MU)

Station Approved by the Commission

Gross Net

NTPS 526.57 502.87


Total Thermal 1422.72 1349.73

KLHEP 422.51 420.40

Total APGCL 1845.23 1770.13

4.3.6 Gross Station Heat Rate (GSHR)

The Gross Station Heat Rate approved by the Commission in the MYT order and the

actuals as submitted by APGCL for FY 2013-14 is shown in the Table below:

46

Table 4.12: Gross Station Heat Rate for FY 2013-14(kcal/kWh)

Station Approved in MYT order dated November 21,

2013

Actual for FY 2013-14 as submitted by APGCL

NTPS 3266 3976

LTPS with WHRU 2792 3164

It is observed that the actual GSHR for NTPS and LTPS for FY 2013-14 is

significantly higher than that approved by the Commission. APGCL has submitted

that actual Station Heat Rates of LTPS and NTPS are more or less similar with that

of the Draft Amended Regulation of AERC. In view of this, APGCL appealed before

Commission to consider the actual Heat Rates of LTPS and NTPS in the True-up of

2013-14.

Commission’s view

Based on the Report of the study conducted by IIT Guwahati, submission of APGCL

&other stakeholders and the Hearing on the matter, the Commission had notified

Amendment to AERC Tariff Regulations, 2006 on 6th January, 2015, thereby revising

the GSHR. The revised GSHR came into effect only from the date of notification i.e.

January 06, 2015. Therefore, the revised Station Heat Rates (SHR) are not

applicable for the truing up of FY 2013-14.

Therefore, for truing up of FY 2013-14, Commission has approved the original SHR

norms as specified in the AERC Tariff Regulations, 2006. The Commission, in this

Order, has approved the GSHR of 3266 kcal/kWh for NTPS, same as approved in

the MYT Order dated November 21, 2013. For LTPS, however, the Commission has

revised the GSHR considering the actual generation of LTPS WHRU for FY 2013-14.

The computation of the revised GSHR for LTPS WHRU is given below:

Particulars Amount

GSHR for open cycle as per AERC Tariff Regulations, 2006 3658 kcal/kWh

Total generation of LTPS for FY 2013-14 896.15MU

Generation in WHRU for FY 2013-14 192.56MU

47

Particulars Amount

Generation excluding WHRU 703.59MU

Approved GSHR taking into consideration WHRU generation

= (3658/896.15) x 703.59 = 2872kcal/kWh

Hence, the Commission approves the GSHR of 3266kcal/kWh and

2872kcal/kWh for NTPS and LTPS, respectively, for FY 2013-14.

4.3.7 Fuel Cost

APGCL has claimed the actual Fuel Cost of Rs. 385.15 Crore as per the Audited

Statement of Accounts for FY 2013-14. As the station-wise fuel cost details are not

mentioned in the Audited Statement of Accounts for FY 2013-14, the Commission

directed APGCL to submit the actual fuel bills for FY 2013-14.The Commission has

verified the actual fuel price and gross calorific value (GCV) of fuel from the actual

fuel bills submitted by APGCL. The Commission has trued up the fuel cost for FY

2013-14 based on the approved performance parameters and actual fuel price and

GCV for FY 2013-14.The actual weighted average GCV and landed price of gas

considered by the Commission in the truing up of fuel cost for FY 2013-14 is shown

in the Table below:

Table 4.13: Actual weighted average GCV and price of gas considered by the Commission for truing up for FY 2013-14

Station Wt. Avg. GCV of gas

(kcal/SCM)

Wt. Avg. price of gas (including transport) (Rs./1000 SCM)

NTPS

9267.25

6488.49

LTPS

9580.61

8059.51

The fuel cost trued up by the Commission for APGCL for FY 2013-14 based on the approved

generation and performance parameters is shown in the Table below:

48

Table 4.14: Approved fuel cost for truing up for FY 2013-14

Particulars Derivation Unit NTPS LTPS with WHRU

Total

Gross Generation A MU

526.57

896.15

1422.72

Heat Rate B kcal/kWh

3266.00

2872.00

GCV of gas C kcal/SCM

9267.25

9580.61

Overall Heat D=AxB G. cal.

1719771.09

2573741.47

4293512.56

Gas consumption E=D/C M. SCM

185.58

268.64

Price of Gas F Rs./1000 SCM

6488.49

8059.51

Total cost of Gas G=ExF/100 Rs. Crore 120.41

216.51

336.92

Auxiliary Consumption

H %

4.50

5.50


I=AxH MU

23.70

49.29

72.98

Net Generation J=A-I MU

502.87

846.86

1349.73

Fuel Cost per Unit (Gross)

K=G/A/10 Rs./kWh

2.29

2.42

2.37

Fuel Cost per Unit (Net)

L=G/J/10 Rs./kWh

2.39

2.56

2.50

The Commission thus, approves the trued up fuel cost of Rs. 336.92 Crore as

against the APGCL’s claim of Rs. 385.13 Crore for FY 2013-14.

4.3.8 Incentive for Generation

As discussed in Para 4.3.3, APGCL is eligible for incentive for the thermal stations at

a flat rate of 25.00 paise/kWh, for ex-bus scheduled energy corresponding to

scheduled generation in excess of ex-bus energy corresponding to target PLF.

49

Further, as discussed in Para 4.3.2, incentive is payable for the hydro generating

station in case Capacity Index exceeds 85% for run-of-river power station with

pondage in accordance with the following formula:

Incentive =0.65 x Annual Fixed Charges x (CIA-CIN)/100

Where:

CIA- Capacity Index Achieved

CIN- Normative Capacity Index, i.e., 85% for run-of-river power station with pondage

The incentive calculations for thermal generating stations and hydro generation

stations are shown in the Tables below:

Table 4.15: Incentive computation for Thermal Stations for FY 2013-14

Station

PLF (%)

Gross

Generation

(MU)

Auxiliary

Consumption

(%)

Net

Generation

(MU)

Ex-bus energy eligible for

incentive (MU)

Incentive (Rs. Crore)

Target

for

Incentive

Actual

At target PLF

Actual

Normative

Actual

At target PLF

Actual

NTPS 50.00

50.30

523.41

526.57

4.50

6.00

499.86

494.98

0.00

0.00

LTPS

with

WHRU

50.00

65.08

688.54

896.15

5.50

8.80

650.67

817.47

166.80

4.17

Total

1211.95

1422.72

1150.52

1312.26

166.80

4.17

Table 4.16: Incentive computation for Hydro Station for FY 2013-14

Station

Capacity Index (%) Generation capacity

(MW) Annual Fixed Charges

(Rs. Crore) Incentive (Rs. Crore) Normative Actual

Total APGCL

KLHEP Total APGCL

KLHEP

KLHEP 85.00

91.5%

376.70 100.00

221.52

58.81

2.48

Thus, for thermal generating stations, APGCL is eligible for incentive of Rs.

50

4.17 Crore, and for the hydro generating station, incentive for exceeding target

Capacity Index works out to Rs. 2.48 Crore. The total incentive amount of Rs.

6.65 Crore is to be passed on as incentive in the ARR for FY 2013-14.

4.3.9 Employee expenses

The Commission, in the MYT Order dated November 21, 2013 for FY 2013-14, had

approved the Employee Expenses of Rs. 78.12 Crore. APGCL has claimed the

actual Employee Expenses of Rs. 82.00 Crore for FY 2013-14 as per the Audited

Statement of Accounts for FY 2013-14.

The Commission has examined the reasons for increase in Employee Expenses and

it has understood that the same is primarily on account of increase in DA in line with

the rates approved by Government of Assam.

Accordingly, Commission has approved the Employee Expenses of Rs. 82.00

Crore as per the Audited Statement Accounts for FY 2013-14.

4.3.10 Repair and Maintenance (R&M) expenses

The Commission, in the MYT Order dated November 21, 2013, had approved the

R&M expenses of Rs. 14.91Crore, for FY 2013-14. APGCL has claimed the actual

R&M expenses of Rs. 26.03 Crore for FY 2013-14 as per the Audited Statement of

Accounts for FY 2013-14. APGCL has submitted that actual amount appeared

includes additional cost of Rs. 9.03 Crores towards overhauling of Karbi Langpi HEP

unit-II. In this regard, APGCL referred to the Review Order dated July 07, 2014 and

mentioned that Commission has granted additional approval of Rs 26.73 Crore for R

& M Expense. APGCL also submitted that the approved R&M expenses in MYT

Order dated November 21, 2013, does not include Lubricants & consumables and

Turbine Oil expenses, which they have claimed in addition to normal R&M expenses

in the true up for FY 2013-14.

In the Review Order dated July 07, 2014, the Commission has considered Expense

towards Overhauling i.e. Rs. 26.73 Crore as part of R & M Expense in line with the

approach adopted by CERC & other SERCs, after considering the fact that

Overhauling need to be done as per the advice of the OEM for maintaining

generation level,. As such, the Overhauling Expense is referred as Special type R &

M Expense and normal R & M is referred as Regular R & M Expense. The summary

of Special R & M Expense for FY 2013-14 (as approved in MYT Order and Review

Order) is mentioned in the table below:

51

Particular FY 2013-14 (Rs Cr)

Overhauling-KLHEP 16.83

Overhauling-LTPS-Unit2 8.5

Overhauling-LTPS-Unit7 9.9

Special Type R & M 35.23

Accordingly, considering the submission of APGCL and as per Audited Statement of

Accounts for FY 2013-14, the Commission has segregated Special Type of R&M

Expense of Rs. 9.03 Crore and Regular R&M Expenses of Rs. 17 Crore (including

expense of Rs. 1.43 Crore for Lubricants and consumable stores etc). Hence, the

Commission approves R&M Expense of Rs. 26.03 Crore for truing up of FY

2013-14.

4.3.11 Administration and General (A&G) expenses

The Commission, in the MYT order dated November 21, 2013 had approved the

A&G expenses of Rs. 5.93 Crore for FY 2013-14,APGCL has claimed the actual

A&G expenses of Rs.12.53 Crore for FY 2013-14 as per the Audited Statement of

Accounts for FY 2013-14. APGCL submitted that they have included an amount of

Rs 5.78 Crore under the provision of electricity bill of different offices of APGCL.

In a response to the query raised by the Commission, APGCL has not submitted the

proof of electricity bills paid to APDCL. The Commission has thus disallowed the

provision of electricity bill claimed by APGCL and approved the rest of A&G

expenses as per Audited statements of account.

The A&G expenses approved by the Commission for True up of FY 2013-14 is

Rs. 6.75 Crore.

4.3.12 Depreciation


depreciation for APGCL as Rs. 16.35 Crore. APGCL has claimed depreciation of Rs.

25.66 Crore for FY 2013-14. As per the Audited statements of accounts, the actual

depreciation for FY 2013-14 is Rs. 28.68Crore.

As per Regulation 14 of AERC Tariff Regulations 2006, the total depreciation during

the life of the asset shall not exceed 90% of the original cost of GFA. In line with the

AERC Tariff Regulations, 2006, APGCL has submitted head wise value of GFA for

52

which accumulated depreciation has exceeded 90% of the GFA and consequent

adjustments. The information submitted by APGCL is scrutinised and considered

accordingly.

Further, as specified in Regulation 14 of AERC Tariff Regulations, 2006, assets

created using consumer contribution or capital subsidy/grant, etc. need to be

excluded from the asset value for the purpose of depreciation. For arriving at value

for asset created out of grant/subsidy, Commission has apportioned the total grant

reflected in Audited Statement of Accounts for FY 2013-14 in to grant pertaining to

CWIP & Fixed Asset, based on the ratio of CWIP & Fixed Asset.

The Commission has considered the opening GFA base for FY 2013-14 as per the

value approved in True up of FY 2012-13. . The weighted average rate of

depreciation has been considered for computing the depreciation on assets created

out of grants/subsidies and consumer contribution and the same has been deducted

from the total depreciation to arrive at the Approved depreciation for FY 2013-14.

The depreciation approved by the Commission for true-up for FY 2013-14 is

shown in the Table 4.17 in the next page:

Table 4.17: Depreciation approved for true-up for FY 2013-14(Rs. Crore)

Group of Asset

GFA as

on

01/04/13

Asse

t Addit

ion

Asset

Deletion

GFA as

on

01/04/14

Average

GFA

90% of

Average

GFA

Rate of

Depreciati

on

Depreciatio

n for FY

13-14

Less:

Depreciation

on GFA

having 90%

accumulated

dep.

Net

Depreciation

for FY 13-14

Land

20

.79

-

- 20

.79

20

.79

18

.71

0.

00%

0.

00

0.00

-

Bui

ldin

g

44.9

8

0.31

-

45.2

9

45.1

4

40.6

2

1.80

%

0.73

0.

00

0.73

Hyd

raul

ic w

orks

14

5.31

15

.78

-

161.

09

153.

20

137.

88

2.57

%

3.54

0.

00

3.54

Oth

er c

ivil

wor

ks

184.

84

3.92

-

188.

76

186.

80

168.

12

1.80

%

3.03

0.

00

3.03

Pla

nt &

mac

hine

ry

ther

mal

48

8.30

10

.83

(5

.57)

49

3.56

49

0.93

44

1.84

6.

00%

26

.51

9.

22

17.2

9

Pla

nt &

mac

hine

ry

hyd

el

175.

20

18.3

5

- 19

3.55

18

4.37

16

5.94

2.

57%

4.

26

0.00

4.

26

Lin

es &

cab

les

44.3

3

0.33

-

44.6

6

44.4

9

40.0

5

2.57

%

1.03

0.

02

1.01

Veh

icle

1.

24

- -

1.24

1.

24

1.12

18

.00%

0.

20

0.07

0.

13

Fur

nitu

re

4.28

-2

.77

-

1.51

2.

90

2.61

6.

00%

0.

16

0.09

0.

07

Oth

er o

ffic

e eq

uip

men

t 1.

07

0.11

-

1.18

1.

12

1.01

6.

00%

0.

06

0.00

0.

06

Roa

ds o

n la

nd

belo

ngin

g to

oth

er

-

- -

- -

1.80

%

0.00

0.

00

-

Cap

ital s

pare

s

174.

10

- -

174.

10

174.

10

156.

69

4.75

%

7.44

3.

63

3.81

Total

1284.43 46.87 -5.57

1325.73

1305.09

1174.58

46.97

13.03

33.9

4

Ave

rage

ass

ets

in

FY

13-

14

excl

udin

g La

nd &

Rig

hts

1,284.29

54

Table 4.18: Depreciation on assets created out of grants/subsidies and consumer contribution (Rs. Crore)

Particulars FY 2013-14

Grants & Subsidies as on 01.04.2013

399.25

Grants & Subsidies as on 01.04.2014

380.38

Average Grants & subsidies

389.82

90% of the Assets funded by Grants/subsidies

350.83

CWIP

567.46

GFA excluding Land and rights

1284.29

Cumulative grants apportioned in the ratio of GFA and CWIP

243.32

Depreciation

33.94

Rate of Depreciation 3.66%

Depreciation on 90% of the Assets funded by Grants/subsidies

8.90

Depreciation approved

25.04

Accordingly, the Commission has approved the depreciation of Rs. 25.04

Crore for true-up of FY 2013-14.

4.3.13 Interest and Finance Charges


interest and finance charges for APGCL as Rs. 30.90 Crores .APGCL has claimed

the interest and finance charges of Rs.31.28 Crores for FY 2013-14 as per the

Audited Statement of Accounts for FY 2013-14. APGCL has submitted that since

GPF trust was not formed till FY 2013-14, there is no interest on GPF claimed for that

Financial year in true up. The Commission has considered the opening balance of

loans equal to the closing balance of loans approved by the Commission in the true

55

up for FY 2012-13. The Commission has considered the actual interest rates as

submitted by APGCL for computing the interest expenses for FY 2013-14.

APGCL has claimed Rs. 19.46 Crore as Interest Capitalised as against Rs. 15.32

Crore as per Statement of Accounts for FY 2013-14. However, for truing up purpose,

the Commission has considered the Interest Capitalised booked in Statement of

Accounts for FY 2013-14, after reducing the same in proportion of allowed and

booked interest. Thereby, Commission has allowed Rs. 13.78 Crore as Interest

Capitalised based on the details given below.

The interest and finance charge approved by the Commission for FY 2013-14 is


Table 4.19: Interest and Finance Charges approved by the Commission for FY

2013-14(Rs. Crore)

Particulars

FY 2013-14

Opening Balance

Receipts Repayments Closing Balance

Rate of interest

Interest

PFC

306.48

50.00

22.97

333.51

11.71%

37.46

State Govt. Loan

97.35

18.57

0.00

115.92

10.45%

11.14

Total

403.83

68.57

22.97

449.44

11.39%

48.60

Other Finance Charges

0.05

Less: Interest capitalised

13.78

Net Interest and finance charges

34.87

Accordingly, the Commission has trued up the interest and finance charges of

Rs. 34.87 Crore for FY 2013-14.

4.3.14 Interest on Working Capital

The Commission, in the MYT Order dated November 21, 2013, for FY 2013-14, had

approved the interest on working capital as Rs. 18.25 Crore. As against the same,

APGCL has claimed the interest of working capital of Rs. 22.32 Crore for true-up of

FY 2013-14. The Commission has approved the normative interest on working

56

capital for FY 2013-14 in accordance with AERC Tariff Regulations, 2006. As per the

AERC Tariff Regulations, 2006, the applicable interest rate should be the Prime

Lending Rate of State Bank of India as applicable on 1st April of the Financial Year

for which tariff is being determined. Based on this, the applicable SBI PLR is 14.45%.

APGCL has also stated that they have not considered O&M and GFA component for

Chandrapur Thermal Power Stations (CTPS) during calculation of Interest on working

capital. As the CTPS is not generating power, the Commission has reduced O&M

and GFA component of CTPS proportionately as per the ratio of O&M expense

submitted by APGCL and approved by the Commission, for those ARR components

from the calculation of Interest on Working capital.

Table 4.20: Interest on Working Capital approved by the Commission for FY

2013-14(Rs. Crore)

Particulars

Approved in MYT order dated

November 21, 2013 (%)

True-up Petition

Approved by the Commission

Fuel Cost (1 month) 24.12 32.10 23.45

O&M expenses (1 month) 8.25 9.79 9.32

Maintenance spares 8.85 12.48 12.48

Receivables (2 months) 82.49 96.97 78.38

Total Working Capital 123.71 151.34 123.64

Rate of Interest on Working Capital

14.75% 14.75%

14.45%

Interest on Working Capital 18.25

22.32

17.87

Accordingly, the Commission has trued up the interest on working capital of

Rs. 17.87 Crore for truing up of FY 2013-14.

4.3.15 Prior period items

APGCL has recorded expense through net prior period items for true-up for FY 2013-

14 of Rs.10.07 Crores. The Commission observed that as per the Audited statements

of accounts, there has been net prior period income for FY 2013-14. APGCL has

submitted details of Prior period related income and expenses in the revised petition,

which is shown below:

57

Table 4.21: Net Prior Period Items

Particulars Proposed by APGCL Approved by the

Commission for true-up for FY 2013-14

Prior Period Income in lakh

Withdrawal of excess provision of ROP arrear for FY 2009-10

1004.84 1004.84

Interest income for prior period 0.01 0.01

Other income relating to prior period 10.30 10.30

Total prior period Income 1015.16 1015.16

Prior period Expense in lakh

Operating expenses for Prior period (KLHEP) 7.59 7.59

Other charges relating to prior period 0.94 0.94

Total Prior Period Expense 8.53 8.53

Net Prior Period Income (in lakh) 1007 1007

As observed from the above table, the net prior period is of income nature. As such,

based on the submission of APGCL, the net prior period income for FY 2013-14

after prudence check, is approved by the Commission amounting Rs. 10.07

Crore.

4.3.16 Return on Equity (RoE)


Return on Equity of Rs. 37.99 Crore for FY 2013-14. As against the same, APGCL

has claimed the Return on Equity of Rs. 38.59 Crore for true-up for FY 2013-14.

APGCL has also submitted details of Equity addition and deletion during the FY

2013-14.The Commission has approved RoE in the true-up for FY 2013-14 in

accordance with AERC Tariff Regulations, 2006.

Accordingly, the Commission has trued up Return on Equity for FY 2013-14 as

Rs. 38.59 Crore.

4.3.17 Income Tax


provision for tax as Rs.0.93Crore for FY 2013-14. As against the same, APGCL has

claimed the Income Tax of Rs. 0.45Crore as per Statement of Accounts for FY 2013-

14.

58

The Commission has observed that the actual tax paid is Rs. 0.45 Crore and

hence the same amount is approved as Income Tax in the true-up for FY 2013-

14.

4.3.18 Other Income


other income as Rs. 10.99 Crore for FY 2013-14. As against the same, APGCL has

considered the other income of Rs. 10.60 Crore for true-up for FY 2013-14 as per the

Audited Statement of Accounts for FY 2013-14.

The Commission has approved Rs. 10.60 Crore as Other Income in the true-up

for FY 2013-14.

Table 4.21: Other Income (Rs. Crore)

Particulars Audited

Statement of Accounts

Approved for true-up for FY

2013-14

Other income as per Note 22 of the Audited Statement of Accounts

10.55 10.55

Other Income from Sale of Scrap as per Note 21 of the Annual Account

0.05 0.05

Other income 10.60 10.60

4.3.19 Other Receipt

In the Statement of Accounts for FY 2013-14, Rs. 19.00 Crore is booked as Other

Receipt under the Income section of the Profit & Loss A/C, which is the Revenue

Grant received by APGCL. However, APGCL has not claimed this amount as part of

Income in their petition.

As the said grant is of Revenue nature and is booked as Other Receipts under

Income section of the Statement of Accounts for FY 2013-14, Commission

approves Rs 19.00 Crore of Other Receipt as part of Income.

4.3.20 Revenue from Sale of Power

APGCL has claimed the revenue from sale of power for FY 2013-14 as Rs. 547.00

Crore as per the Audited Statement of Accounts for FY 2013-14.

The Commission has considered the revenue from sale of power as Rs. 547.00

Crore for the true-up of FY 2013-14.

59

4.3.21 Summary of true-up for FY 2013-14

In view of the above analysis and approvals given by the Commission, the approved

revenue requirement for FY 2013-14 after true-up is summarised in the Table

below:

Table 4.222: Summary of true-up for FY 2013-14 (Rs. Crore)

Approved in the MYT Order dated November 21,

2013

True-up Petition

Approved True up

Fixed Charges Operation and Maintenance expenses

Employee expenses 78.12 82.00 82.00 Repair and Maintenance expenses

14.91 26.03 26.03


5.93 12.53 6.75

Interest and Finance Charges 30.90 31.28 34.87

Interest on Working Capital 18.25 22.32 17.87

Income Tax 0.93 0.45 0.45

Depreciation 16.35 25.66 25.04

Return on Equity 37.99 38.59 38.59

Less: Other Income 10.99 10.60 10.60

Prior Period expenses(+) / credit(-)

-10.07 -10.07

Total Fixed Charges 192.38 218.20 210.92

Fuel Cost 289.45 385.15 336.92

True Up for 2011-12 13.10

13.10 Incentive for Generation for FY 2013-14

0.00 7.97 6.65

Incentive for Secondary Generation for FY 2013-15

2.51 2.51

Total Cost 494.94 613.83 570.10

Revenue from sale of Power 494.94 547.00 547.00

Other Receipts NA NA 19.00

Revenue Gap (+)/Surplus (-) 0.00 66.83 4.10

Hence, the Net Revenue deficit on true-up for FY 2013-14 is Rs. 4.10 Crore as

against the net revenue gap of Rs. 66.83 Crore as claimed by APGCL. The same

has been carried forward for adjustment in the revised ARR for FY 2015-16.

60

5 Annual Performance Review for FY 2014-15

5.1 ANNUAL PERFORMANCE REVIEW

The MYT Order for the Control Period from FY 2013-14 to FY 2015-16 was issued by

the Commission on November 21, 2013 and came into effect from December 01,

2013. Approved components of Tariff in this order have been further revised by the

Commission based on the submission of APGCL in order dated November 21,

2014.Before issuing the next tariff order, it is important for the Commission to review

the technical as well as financial performance of APGCL vis-à-vis the tariff order

issued by the Commission for this year. Also, it is pertinent and desirable that the

Commission reviews its own estimation and directives to ensure better and effective

implementation of its next tariff order.

While the true-up exercise was based on the Audited Statement of Accounts for FY

2013-14, the review exercise examines the technical and financial performance of

APGCL based on approved parameters for FY 2014-15 in the tariff order dated

November 21, 2014 for FY 2014-15based on the actual performance of APGCL.

The exercise also attempts to gauge the effectiveness of the last tariff order by

evaluating the extent of implementation of the directives in the tariff order. These

aspects are discussed in the following paragraphs.


The revised Availability / Capacity Index for FY 2014-15 estimated by APGCL in the

APR Petition, are shown in the Table below:

Table 5.1: Availability / Capacity Index for FY 2014-15

Sl. No.

Station

Target Availability / Capacity Index (%)

Approved in the MYT Order dated November 21, 2013(%)*

APR Petition (%)

SLDC certification (Up to January 2015)

(%)

1 NTPS 50.00 52.60 62.60 62.60

2 LTPS with WHRU 50.00 61.00 78.40 78.40

3 KLHEP 90.00 90.00 92.60 92.60

4 Myntriang Stage-II - 91.00 4.25 4.25

*There was no separate approval for Availability for FY 2014-15 in the Tariff Order

dated November 21, 2014. Hence approved value of MYT order dated November 21,

61

2013 has been considered.

APGCL shall be eligible to recover full fixed charges if the actual Availability /

Capacity Index is higher than the target Availability / Capacity Index specified in the

AERC Tariff Regulations, 2006.


The revised PLF for FY 2014-15 estimated by APGCL in the APR Petition, is shown

in the Table below:

Table 5.2: Plant Load Factor for FY 2014-15

Station Target PLF for incentive (%)

Approved in the tariff Order dated November

21, 2014 (%) APR Petition (%)

NTPS 50.00 50.00 56.52

LTPS with WHRU 50.00 61.20 67.92

KLHEP - 44.50 41.89

Myntriang SHEP-Stage II

- 43.30 4.18

The revised PLF submitted by APGCL for NTPS and LTPS for FY 2014-15 are

higher than the target PLF of 50%, and also higher than the PLF approved by the

Commission in the tariff order for 2014-15. For Myntriang, APGCL has submitted that

the plant got affected by heavy flood on August 22, 2014, and all the equipment

needed servicing and accordingly actual generation has been low. At present both

the units are under forced shutdown. The Commission has considered PLF for

Annual Performance Review of FY 2014-15 as petitioned by APGCL.


The revised Auxiliary Energy Consumption for FY 2014-15 estimated by APGCL in

the APR Petition, is shown in the Table below:

Table 5.3: Auxiliary Energy Consumption for FY 2014-15

Station Approved in the tariff Order dated November 21, 2014

Proposed in petition

APR

NTPS 4.50 5.76 4.50

LTPS 5.50 8.55 5.50

KLHEP 0.50 0.50 0.50


1.00 1.72 1.00

62

It is observed that the revised Auxiliary Energy Consumption for NTPS, LTPS and

Myntriang estimated by APGCL in the APR Petition for FY 2014-15 is higher than the

Auxiliary Energy Consumption approved by the Commission. However, the

Commission has considered auxiliary consumption for APR of FY 2014-15 as

approved in the Tariff order dated November 21, 2014 for FY 2014-15.


The revised gross generation and net generation for FY 2014-15 estimated by

APGCL in the APR Petition is shown in the Table below:

Table 5.4: Gross Generation and Net Generation for FY 2014-15 (MU)

Station

Approved in the Tariff order dated November

21, 2014 Proposed in petition APR

Gross Net Gross Net Gross Net

NTPS 523.09 499.55 591.66 557.60 591.66 565.04

LTPS 842.47 796.14 935.30 855.30 935.30 883.86

Total Thermal 1365.56 1295.69 1526.97 1412.89 1526.97 1448.90

KLHEP 390.00 388.05 366.98 365.15 366.98 365.15

Myntriang SHEP 11.38 11.26 0.71 0.70 0.71 0.70

Total APGCL 1766.94 1695.00 1894.66 1778.73 1894.66 1814.75

The revised gross generation and net generation for FY 2014-15 estimated by

APGCL in the APR Petition is higher than that approved by the Commission.

However, the Commission has approved net generation for APR of FY 2014-15, after

considering gross generation as proposed by AEGCL and Normative Auxiliary

Consumption.

5.1.5 Gross Station Heat Rate

The revised Gross Station Heat Rate for FY 2014-15 estimated by APGCL in the

APR Petition is shown in the Table below:

63

Table 5.5: Gross Station Heat Rate for FY 2013-14 (kcal/kWh)


Proposed in petition

NTPS 3266 4056

LTPS with WHRU 2872 3058

On January 06, 2015, Commission has notified Amendment to AERC Tariff

Regulations, 2006, thereby revising the GSHRs. Therefore, for arriving at GSHR of

NTPS and LTPS for FY 2014-15, the Commission has considered weighted average

of the applicable GSHRs prior to & after notification of amended GSHR and the

actual generation of NTPS & LTPS during the respective periods.

For LTPS, till the period when amendment came, the Commission has taken same

approach as per the previous orders and arrived at Closed cycle GSHR as per the

calculation given below.

Table 5.6: GSHR computation for APGCL thermal Power Plants for FY 2014-15

Particulars Prior to Amendment of GSHR (Upto Dec’15)

After Amendment of GSHR (Jan-Mar’15)

GSHR for APR of FY 2014-15

Generation (MU)

GSHR (kCal/kWh)

Generation (MU)

GSHR (kCal/kWh)

1 2 3 4 5 6=(2x3+4x5)/(2+4)

NTPS 451.46 3266.00 140.20 3900.00

3416.23

LTPS 689.09

2807.10

246.22 3200.00

2910.53

Particulars Unit FY 2014-15

Heat Rate as per AERC Tariff Regulations, 2006 kcal/kWh 3658.00

Total generation of LTPS for FY 2014-15 MU 689.09

Generation in WHRU for FY 2014-15 MU 160.29

Generation other than WHRU MU 528.80

Approved Heat Rate taking into consideration WHRU generation

kcal/kWh 2807.10

64

5.1.6 Fuel Cost

The revised weighted average GCV of gas and landed price of gas for FY 2014-15

estimated by APGCL in the APR Petition, is shown in the Table below:

Table 5.7: Weighted average GCV and landed price of gas for FY 2014-15


APR Petition

Wt. Avg. GCV of Gas

(kcal/SCM)

Wt. Avg. price of Gas (including transport) (Rs./1000 SCM)

Wt. Avg. GCV of Gas

(kcal/SCM)

Wt. Avg. price of Gas (including transport)

(Rs./1000 SCM)

NTPS 9157.50 6275.19

9533.30

7712.65

LTPS with WHRU

9432.42 8172.02 9902.59

9808.52

The commission has considered the GCV & fuel price as per actual fuel bills of gas &

transportation till February 2015 and provisional value for March 2015, while arriving

at the fuel cost for APR of FY 2014-15.

The Commission had approved the fuel cost of Rs. 326.70 Crore for FY 2014-15 in

the Tariff Order dated November 21, 2014. Against the same, APGCL has proposed

for fuel cost of Rs. 477.45 Crore for FY 2014-15. As per the direction of Commission,

APGCL submitted fuel bills till February, 2015 and estimation of fuel cost for March,

2015. After considering normative technical parameters and scrutiny of APGCL’s

submission of station wise generation, GCV & price of Fuel etc., the Commission has

arrived at provisional fuel cost of Rs. 433.27 Crore for FY 2014-15. However,

Commission will undertake prudence check of Fuel cost at the time of truing up of FY

2014-15.

Table 5.8: Fuel Cost calculation for FY 2014-15

Particulars Derivation Unit NTPS LTPS Total

Gross Generation A MU 591.66 935.30 1526.97

Heat Rate B kcal/kWh 3416.23 2910.53

GCV of gas C kcal/SCM 9514.06 9913.15

Overall Heat D=AxB G. cal. 2021258.79 2722223.77 4743482.56

Gas consumption E=D/C M. SCM 212.45 274.61 487.06

Price of Gas F Rs./1000 SCM 7680.01 9836.14

Total cost of Gas G=ExF/100 Rs. Lakh 16316.16 27010.78 43326.94

65

Table 5.9: Fuel Cost for FY 2014-15 (Rs. Crore)

Particulars Approved in the tariff Order dated November

21, 2014

APR Petition

APR

Fuel Cost 326.70 477.45 433.27

5.1.7 Employee Expenses

The Commission had approved the Employee Expenses of Rs. 75.75 Crore for FY

2014-15 in the Tariff Order dated November 21, 2014. As against the same, APGCL

has estimated the Employee Expenses of Rs. 86.54 Crore. As the provisional

account of AEGCL has not been prepared during this exercise, the Commission has

arrived at a figure of Rs. 87.15 Crore, based on approved Employee Expense for FY

2013-14 and the CPI of 6.29%. The Commission provisionally considers submission

of APDCL, Rs. 86.54 Crore for FY 2014-15.

However The Commission shall true-up the Employee Expenses for FY 2014-15

based on the prudence check of Audited Statement of Accounts.

Table 5.10: Employee expenses for FY 2014-15(Rs. Crore)


21, 2014 APR Petition APR

Employee Expenses 75.75

86.54

86.54

5.1.8 Repair and Maintenance expenses (R&M expenses)

The Commission had approved the R&M expenses of Rs. 17.11 Crore for FY 2014-

15 in the Tariff Order dated November 21, 2014. As against the same, APGCL has

proposed R&M expenses of Rs. 25.19 Crore including special R&M cost of Rs. 6.44

Crore for LTPS unit# II.

APGCL has submitted that the present estimated Overhauling cost of LTPS Unit-2 is

Rs. 12.94 Crore for FY 2014-15. APGCL further submitted that originally the

estimated approved amount of this overhauling works was Rs. 8.5 Crore, out of

which Rs 2.0 Crore was approved in MYT Order dated November 21, 2013 and Rs

6.5 Crore was approved in the Review Order dated July 07, 2014. APGCL stated that

66

the expenditure of Rs. 2.0 Cr., allowed in MYT Order dated November 21, 2013, was

not incurred in FY 2013-14. APGCL submitted that the variation in the estimated

Overhauling cost is due to additional works. APGCL has claimed Rs. 6.5 Crore in

ARR of FY 2015-16, as per the Review Order dated July 07, 2014.

However, APGCL has estimated to spend entire amount of Rs. 12.94 Crore in FY

2014-15 but has not included the same in the APR, which is not justified.

Commission has already explained the detail about the approval of special type of R

& M Expense in the Para 4.3.10 & Para 6.5.13 of this order. As per the same a total

of Rs. 18.4 Crore was allowed as Special type R & M Expense for LTPS (Rs. 8.5

Crore for LTPS Unit-2 & Rs. 9.9 Crore for LTPS Unit-7). Now for APR of FY 2014-

15, as APGCL has submitted that Rs. 12.94 Crore is estimated to be spent during FY

2014-15 for Overhauling of LTPS Unit-2, Commission has considered the entire

amount as part of Special type R & M Expense for APR of FY 2014-15.It is to be

noted that Special type of R & M expenses will be allowed only during the year in

which it is incurred. For Regular R&M expenses, the Commission has escalated

trued up values of Regular R & M Expense for FY 2013-14 with WPI of FY 2014-15.

Accordingly, the Commission has arrived on a provisional R&M expense of Rs.

30.28 Crore for APR of FY 2014-15.However, Commission shall true-up the R &

M Expense for FY 2014-15 based on the prudence check of Audited Statement

of Accounts for FY 2014-15.

Table 5.11: R&M expenses for FY 2014-15 (Rs. Crores)

Particulars Approved in the tariff Order dated November 21, 2014

APR Petition

APR

Special Type R&M expenses

17.11

6.44 12.94

Regular R&M Expenses

18.75 17.34

Total 30.28

5.1.9 Administration and General Expenses (A&G Expenses)

The Commission has approved the A&G expenses of Rs. 4.70 Crore for FY 2014-15

in the Tariff Order dated November 21, 2014. As against the same, APGCL has

proposed the A&G expenses of Rs. 9.41 Crore for FY 2014-15. APGCL has stated

67

that A&G expense has been computed based on Actuals up to 2nd quarters and

estimation for the last two quarters.

For APR of FY 2014-15, the Commission has arrived on a provisional figure of

Rs. 6.88 Crore for APR, by escalating Trued up value of FY 2013-14 with WPI of

FY 2014-15. However, the Commission shall true-up the A&G expenses for FY

2014-15 based on the prudence check of Audited Statement of Accounts for FY

2014-15.

Table 5.12: A&G expenses for FY 2014-15 (Rs. Crore)


21, 2014

APR Petition

APR

A&G expenses 4.70

9.41

6.88

5.1.10 Depreciation

The Commission has approved Depreciation of Rs. 35.55 Crore for FY 2014-15 in

the Tariff Order dated November 21, 2014. As against the same, APGCL has

estimated the depreciation of Rs. 32.81 Crore for FY 2014-15.

As per Regulation 14 of AERC Tariff Regulations 2006, the total depreciation during





accordingly.




for asset created out of grant/subsidy, Commission has apportioned the total grant

reflected in Audited Statement of Accounts for FY 2013-14 in to grant pertaining to

CWIP & Fixed Asset, based on the ratio of CWIP & Fixed Asset.


closing value approved in True up of FY 2013-14 and closing value of FY 2014-15 as

per submission of APGCL regarding additions/removal of assets. APGCL should

68

reconcile the GFA Opening Balance. The weighted average rate of depreciation has

been considered for computing the depreciation on assets created out of

grants/subsidies and consumer contribution and the same has been deducted from

the total depreciation to arrive at the Approved depreciation for FY 2014-15.

The depreciation provisionally approved by the Commission for APR of FY 2014-15


Table 5.13: Depreciation for FY 2014-15(Rs. Crore)

Particulars Approved in the tariff Order dated

November 21, 2014 Proposed APR

Depreciation 35.55

25.14

32.14

The Commission shall true-up the depreciation for FY 2014-15 based on the

GFA addition as per the Audited Statement of Accounts for FY 2014-15 in


5.1.11 Investment Plan

The investment plan proposed by APGCL for the FY 2014-15 is shown in the table below:

Table 5.14 Investment Plan for FY 2014-15

Sl. No.

Name of the Project

Approved in the Tariff

Order of 2014-15

Revised investment Proposal for 2014-15

Remarks Govt

(Equity) GOA (Loan)

Grant (Govt)

FI (Loan)

Total

1 R&M of Namrup TPS

6.85

8.67

8.67

Additional work of (i) Rs. 1.80 Cr due to procurement of 25 nos. of important mechanical, electrical & instrumentation spares required at NTPS for smooth and trouble free operations of the old GT units and its auxiliaries, (ii) Rs. 0.02 Cr due to revised estimate of Anti Erosion Measures at Dillighat intake from earlier Rs. 0.30 Cr to 0.32 Cr

69

Sl. No.

Name of the Project


Order of 2014-15


Remarks Govt

(Equity) GOA (Loan)

Grant (Govt)

FI (Loan)

Total

2 R&M of Lakwa TPS

23.2

20.19

20.19

Amount reduced as the R&M proposal for 2014-15 by APGCL was curtailed by GOA and work is now going to be executed on priority basis.

R&M of Lakwa TPS (Major Overhauling of Unit#2)

12.5

0

Details of Overhauling Cost of Unit #2 of LTPS is given at Page No. 193

3 R&M of KLHEP

5.82

1.56

1.56

Amount reduced as the work of procurement of 11/232/√3 kV, 21 MVA single phase generator transformer has been deferred due to fund constraint.

4 100 MW Namrup RPP

165.00

0.00

Amount is reduced due to delay in resuming of Project work

5 70 MW Lakwa Replacement Power Project

1.00

0.6

0.60

As per approved amount in the Annual Plan for construction of boundary wall at site

6

660 MW Margherita Thermal Power Project

0.00

2.00

2.00

As per approved amount in the Annual Plan for construction of boundary wall at site

7 9 MW Myntriang SHEP

0.00

7.00

7.00 Land Compensation

8 6 MW Lungnit SHEP

22.00

0.00

Due to litigations, bid finalization process is at present under suspension

9 120 MW Lower Kopilii HEP

0.00

7.00

7.00

Earlier Rs. 15/- Cr was included in the Annual Plan Proposal for FY 2014-15 as govt. loan for part payment of land compensation. However, later it was decided to include the whole amount of land Compensation in the Govt. Equity to be given by AIFA in the

70

Sl. No.

Name of the Project


Order of 2014-15


Remarks Govt

(Equity) GOA (Loan)

Grant (Govt)

FI (Loan)

Total

meeting held on 05/08/14 with GOA. The proposed amount in Annual plan has thus been reduced to Rs. 7/- Cr. under Govt. loan for project development activities

10 Boundary Wall at Jagiroad for KLHEP Store

0.33

0.36

0.36

Earlier estimate was as per the 2011-12 APWD price schedule. Estimate has been revised as per the 2013-14 APWD price schedule

Total Proposed Investment

236.7 0.00 40.38 7.00 0.00 47.38

After carrying out prudence check of the above plan, the Commission

provisionally approves the Investment of Rs. 37.78 Crores for APR of FY 2014-15.


The Commission had approved the interest and finance charges of Rs. 32.14 Crore for

FY 2014-15 in the Tariff Order dated November 21, 2014. As against the same, APGCL

has estimated interest and finance charges of Rs. 29.61 Crore for FY 2014-15.

APGCL has calculated the Interest on loans for FY 2014-15 at the rate of 10.5% on loan

outstanding for Loan from Govt. of Assam and based on actual interest rates charged by

PFC for Loan up to December, 2014 for PFC loan.

The Commission has considered the opening balance of loans for FY 2014-15 equal to

the closing balance of loans approved by the Commission in the true up for FY 2013-14.

Further, for addition of loan Commission has considered loan estimated to be added

during FY 2014-15 as per provisionally approved Investment Plan for FY 2014-15 as per

Para 5.1.11 of this Order. The Commission has considered repayment of loans and

actual interest rates as submitted by APGCL for computing the interest expenses for FY

2014-15. The Commission has considered the proportionate capitalisation of interest

expense based on claimed and approved interest expenses. The Commission has

considered finance charges as per submission of APGCL for FY 2014-15. The Interest

and Finance charge provisionally approved by the Commission for APR of FY 2014-15 is


71

Table 5.15: Interest and Finance Charges for FY 2014-15(Rs. Crore)


Proposed APR

Interest and Finance Charges

32.14

29.61

28.14

The Commission shall true-up the interest and finance charges for FY 2014-15

based on the prudence check of Audited Statement of Accounts for FY 2014-

15.


The Commission had approved the normative interest on working capital of Rs.

19.08Crorefor FY 2014-15 in the Tariff Order dated November 21, 2014. As against

the same, APGCL has estimated interest on working capital of Rs. 26.03 Crore for

FY 2014-15.

As per the AERC Tariff Regulations, 2006, the applicable interest rate should be the

Prime Lending Rate of State Bank of India as applicable on 1st April of the Financial

Year for which tariff is being determined. Based on this, the applicable SBI PLR is

14.75%.

Accordingly, the Commission has arrived on a provisional interest on working

capital of Rs. 21.70 Crore for APR for FY 2014-15, as per AERC Tariff

Regulations, 2006.

Table 5.16: Interest on Working Capital for FY 2014-15(Rs. Crores)


Proposed APR


5.1.14 Income Tax

The Commission had approved the income tax of Rs. 0.93 Crore for FY 2014-15 in

the Tariff Order dated November 21, 2014. As against the same, APGCL has

estimated the Income tax of Rs. 0.93 Crore for FY 2014-15. For APR of FY 2014-15,

Commission has considered Rs. 0.93 Crore as Income Tax.

72

Table 5.17: Income Tax for FY 2014-15(Rs. Crore)

Particulars Approved in the Tariff Order dated November 21, 2014

Proposed APR

Income Tax 0.93

0.93

0.93

However, the Commission shall true-up the income tax for FY 2014-15 based

on the Audited Statement of Accounts for FY 2014-15.


The Commission has approved the Return on Equity of Rs. 37.99Crorefor FY 2014-

15 in the Tariff Order dated November 21, 2014. As against the same, APGCL has

estimated RoE of Rs. 40.39 Crore for FY 2014-15.APGCL has also submitted details

of Equity addition and deletion during the FY 2014-15. It may be noted that for

Myntriang, the Return on Equity has been allowed for half of the year since Date of

Commercial Operation (COD) of the plant was on August 08, 2014. The

Commission has provisionally approved RoE of Rs. 40.39 Crore for APR of FY

2014-15.

Table 5.18: Return on Equity for FY 2014-15(Rs. Crore)


21, 2014 Proposed APR

Return on Equity

37.99

40.39

40.39

However, the Commission shall true-up the RoE for FY 2014-15 based on the

Audited Statement of Accounts for FY 2014-15, in accordance with AERC Tariff

Regulations, 2006.

5.1.16 Other Income

The Commission had approved the other income of Rs. 11.59 Crore for FY 2014-15

in the Tariff Order dated November 21, 2014. As against the same, APGCL has

estimated other income of Rs. 10.60 Crore for FY 2014-15.

For APR of FY 2014-15, the Commission has arrived on a provisional figure of

Rs 11.66 Crore considering 10% escalation from the trued up value of FY 2013-

14.

73

Table 5.19: Other Income for FY 2014-15(Rs. Crore)


Proposed APR

Other Income 11.59 10.60 11.66

However, the Commission shall true-up the other income for FY 2014-15 based on

the prudence check of the Audited Statement of Accounts for FY 2014-15. Revenue

from Sale of Power

5.1.17 Revenue from Sale of Power

APGCL has proposed the revenue from sale of power of Rs. 618.38 Crore for FY

2014-15. The Commission considers the APGCL proposal of Rs. 618.38 Crore

of Revenue from Sale of Power as proposed by APGCL for APR of FY 2014-15.

However, the Commission shall true-up the revenue from sale of power for FY

2014-15 based on the prudence check of the Audited Statement of Accounts

for FY 2014-15.

74

5.1.18 Review of ARR for FY 2014-15

Considering the above heads of expense and revenue and after provisional approval

as elaborated above, the net revenue requirement of APGCL for FY 2014-15 is

provisionally approved as Rs. 675.35 Crore, as shown in the Table below:

Table 5.20: Summary of APR for FY 2014-15(Rs. Crore)

Approved in the tariff Order dated November 21, 2014


APR

Fixed Charges


Employee expenses 75.75 86.54 86.54

Repair and Maintenance expenses

17.11 25.19 30.28


4.70 9.41 6.88



Income Tax 0.93 0.93 0.93





Fuel Cost 326.70 477.45 433.27

Add: Revenue Gap/Surplus for previous year as approved

Revenue surplus for True up for FY 2012-13

-16.79

-16.79

Review of True-Up for FY 2011-12 27.26

27.26

Annual Revenue Requirement 548.83 717.76 679.08

The Commission shall carry out the true up of revenue and expenses for FY

2014-15 based on the Audited Statement of Accounts for FY 2014-15 in


75

6 Revised ARR and Generation Tariff for FY

2015-16

6.1 INTRODUCTION

This Chapter deals with determination of revised fixed charges and variable charges

for APGCL for FY 2015-16. The Commission had approved the ARR for FY 2015-16

in the MYT Order dated November 21, 2013. The Commission, in this Order, has

carried out the true-up of expenses and revenue for FY 2013-14 based on the

Audited Statement of Accounts for FY 2013-14 and APR for FY 2014-15and ARR for

2015-16.

Based on the Approved ARR for FY 2015-16 and considering the impact of True-up

for 2013-14, the generation tariff for FY 2015-16 has been revised. The impact of

APR for FY 2014-15 has not been considered for computation of revised generation

tariff as the APR is estimation only.

6.2 GENERATION CAPACITY FOR FY 2015-16

The generation capacity of APGCL as considered for determination of generation

tariff of FY 2015-16, is shown in the Table below:

Table 6.1: Operating Generation Capacity for FY 2015-16

Station Operating Capacity (MW)

NTPS 119.50


NRPP (Open Cycle) 63.00

KLHEP 100.00

Myntriang SHEP Stage II 4.50

Myntriang SHEP Stage I 9.00

Total 453.20

6.3 BRIEF STATUS OF APGCL POWER STATIONS

The status of APGCL's power stations as submitted by APGCL is as follows:

76

6.3.1 Namrup Thermal Power Station (NTPS) (119.5 MW)

At present Namrup Thermal Power Station is generating an average of 75-90 MW

depending on availability of gas. The details of units are as under:

• Unit-1 (20 MW, GT): Unit is presently running at an average load of 19 MW. The

unit is overdue for major overhauling and is scheduled to be overhauled in June’

2015-July’ 2015 for 60 days. This was earlier scheduled in 2014-15.

• Unit-2 (21 MW, GT): Unit is presently running at an average load of 20 MW

• Unit-3 (21 MW, GT): Unit is presently running at an average load of 18 MW. The

unit is overdue for major overhauling and is scheduled to be overhauled in

Nov’2015-Dec’2015 for 60 days.

• Unit-4 (11 MW, GT): Unit presently runs at an average load of 9 MW. The unit

was under overhauling and resumed operation from April 02, 2015.

• Steam Turbine Unit 5 (24 MW): The unit is presently running with an average

load of 12 MW due to technical constraints.

• Waste Heat Unit 6 (22.5 MW): Unit is presently running with an average load of

12 MW due to technical constraint. The unit is overdue for major overhauling

and is scheduled to be overhauled in Aug’ 2015-Sep’ 2015 for 60 days. This was

earlier scheduled in 2014-15.

6.3.2 Lakwa Thermal Power Station (LTPS) (157.2 MW)

Currently, Lakwa Thermal Power Station is generating at an average capacity of 100-

125 MW depending on the availability of gas. The brief status of the Units is as

follows:

• Unit-1 (15 MW, GT): The unit is presently running at full load capacity.

• Unit-2 (15 MW, GT): The unit is presently running at full load capacity. The unit is

overdue for major overhauling and is scheduled to be overhauled in Apr’ 2015-

May’ 2015 for 50 days. This was earlier scheduled in 2014-15.


overdue for major overhauling and is scheduled to be overhauled in Jul’15-Aug’

2015 for 50 days.

• Unit-4 (15 MW, GT): The unit is presently running at full load capacity

• Unit-5 (20 MW, GT): The unit is presently running at full load capacity


overdue for major overhauling and is scheduled to be overhauled in Jun’ 2015 for

25 days.

• Unit-7 (20 MW, GT): The unit is presently running at full load capacity. Unit-8

77

(37.2 MW WHRU): The unit is presently running with an average load of 30 to 32

MW.

6.3.3 Karbi Langpi Hydro Electric Project (KLHEP) (100 MW)

• Unit-1 (50 MW): The unit is presently running at full capacity depending on

availability of water.

• Unit-2 (50 MW): The unit is presently running at full capacity depending on

availability of water.

6.3.4 Myntriang SHEP Stage I (9 MW = 3x3 MW) & Stage II (4.5 MW= 3x1.5 MW)

• Stage II: The commercial operation for Unit I and II, were declared on August 08'

2014. The plant got affected by heavy flood on August 22’ 2014. All the

equipment needed servicing. At present both the units are running. Further, the

project is expected to be enhanced by 1.5 MW of another unit in December'

2015.

• Stage I: The plant was earlier designed for 6 MW but now has been enhanced by

another 3 MW making the total capacity of 9 MW. This project of 9 MW is also

expected to be commissioned in December' 2015.

6.3.5 Namrup Replacement Power Project (NRPP)

• This is a gas based combined cycle replacement power plant, with capacity of

100 MW. The open cycle capacity is 63 MW and the waste heat recovery section

is of capacity 37 MW. The project (open cycle) is expected to be commissioned in

August 2015. However, the waste heat recovery section is not expected to be

commissioned in FY 2015-16.

6.4 GAS SUPPLY POSITION

APGCL has submitted that BCPL (Brahmaputra Cracker and Polymer Limited) is

expected to be commissioned in FY 2015-16. APGCL further submitted that they have

received assurance from the gas suppliers of APGCL that the Gas with same CV will

be supplied even after commissioning of BCPL. APGCL has considered the avg. GCV

of gas from 2011-12 to September 2014 for Generation Projection for 2015-16. The

details of the gas availability for 2015-16 as submitted by APGCL are given in the table

below:

78

Table 6.2: Gas Supply Position for FY 2015-16

Station Period Gas

Source

Avg GCV from 2011-12 to Sep’14 in kcal/scm

Contracted Quantity (MMSCMD)

Availability (MMSCMD)

Remarks

NTPS 2015-16 OIL

APM 9300 0.66 0.66

LTPS

2015-16 GAIL APM

9793 0.40 0.40

Apr-Oct OIL Non-APM

9300 0.50 0.35

Gas availability from OIL to LTPS has

been considered as per site experience Nov-Mar 0.45

6.5 REVISED ARR AND GENERATION TARIFF FOR FY 2015-16


The Availability / Capacity Index approved by the Commission for FY 2015-16 vide

MYT Order dated November 21, 2013 and the revised Availability / Capacity Index

projected by APGCL are shown in the Table below:

Table 6.3: Availability / Capacity Index for FY 2015-16

Station

Target Availability / Capacity Index (%)

Approved in MYT order dated November 21,

2013 (%)

APGCL Petition (%)

NTPS 50.00 52.60 50.56

LTPS 50.00 59.00 67.88

NRPP 80.00 77.00 83.86

KLHEP (RoR with pondage)

85.00 90.00 90.45

Myntriang SHEP-Stage I

- 91.00 90.91


- 91.00 90.91

Accordingly, Commission approves that APGCL shall be eligible to recover full

fixed charges if the actual Availability / Capacity Index is higher than the target

Availability / Capacity Index specified in the AERC Tariff Regulations, 2006.


The Plant Load Factor approved by the Commission for FY 2015-16 and the revised

Plant Load Factor projected by APGCL is shown in the Table below:

79

Table 6.4: Revised Plant Load Factor projected for FY 2015-16

Station Approved in MYT order dated

November 21, 2013 (%) APGCL

Petition (%)

NTPS 50.00 47.80


KLHEP 44.50 44.52

NRPP 72.00 80.00

Myntriang SHEP-Stage I

87.10 80.67


80.80 80.85

It may be observed that except for NTPS and Myntriang Stage-I, APGCL has

proposed for higher PLF as compared to approved value in MYT Order dated

November 21, 2013.Therefore, the Commission, in this Order, has considered PLF of

those stations as projected by APGCL. For NTPS, the Commission has considered

the PLF as per AERC Tariff Regulations, 2006. Further as Myntriang Stage-I is a new

station and may need time for stabilisation, Commission has accepted APGCL’s

proposal of PLF even though the same is lower than the approved level of MYT

Order dated November 21, 2013. The PLF approved by the Commission in the

approval of revised ARR and generation tariff for FY 2015-16 is shown in the Table

below:

Table 6.5: Approved Plant Load Factor for FY 2015-16

Station Approved for FY 2015-16

NTPS 50.00


KLHEP 44.52

NRPP 80.00

Myntriang SHEP-Stage I 80.67

Myntriang SHEP-Stage II 80.85


The Auxiliary Energy Consumption approved by the Commission for FY 2015-16 vide

MYT Order dated November 21, 2013 and the revised Auxiliary Energy Consumption

projected by APGCL is shown in the Table below:

80

Table 6.6: Revised Auxiliary Energy Consumption projected for FY 2015-16

Station Approved in MYT order dated November 21, 2013

(%)

APGCL Petition (%)

NTPS 4.50 5.49


KLHEP 0.50 0.50

NRPP 4.50 4.60 Myntriang SHEP-Stage I

1.00* 1.00


1.00* 1.00

Note: * - The Commission has approved the Auxiliary Energy Consumption for Myntriang

SHEP I & II as 1%, in the Review Order dated July 07, 2014. .

The revised Auxiliary Energy Consumption projected by APGCL for NTPS,LTPS and

NRPP is higher than that approved by the Commission. As Auxiliary Energy

Consumption is a performance parameter, the Commission, in this Order, has

approved the same Auxiliary Energy Consumption for FY 2015-16 as approved for

FY 2015-16 in the MYT Order for FY 2013-14 to FY 2015-16.. The Auxiliary Energy

Consumption approved by the Commission for FY 2015-16 is shown in the Table

below:

Table 6.7: Approved Auxiliary Energy Consumption for FY 2015-16

Station Approved for FY 2015-16 (%)

NTPS 4.50

LTPS with WHRU 5.50

KLHEP 0.50

NRPP 4.50

Myntriang SHEP-Stage I 1.00

Myntriang SHEP-Stage II 1.00


As per generation projection of APGCL for FY 2015-16, after commissioning of 63

MW NRPP (Open Cycle) from August, 2015, capacity of existing 119.5 MW NTPS

plant will get reduced by 56 MW due to shutting down of old unit no 3, 4 and 5.

APGCL has also projected PLF for NTPS less than the value approved in MYT order

dated November 21, 2013 for FY 2015-16. The gross generation and net generation

approved by the Commission for FY 2015-16 vide MYT Order dated November 21,

2013 and the revised gross & net generation projected by APGCL is shown in the

81

Table below:

Table 6.8: Revised Gross Generation and Net Generation projected for FY 2015-16 (MU)

Station


Proposed by APGCL

Gross Net Gross Net

NTPS 219.60 209.72 342.98 324.16

LTPS with WHRU 457.63 432.46 861.00 796.62

NRPP 622.32 594.31 295.14 281.57

LRPP 415.80 401.75 Nil Nil

Total Thermal 1715.35 1638.24 1499.12 1402.35

KLHEP 391.07 389.11 390.00 388.05

Myntriang SHEP Stage I

67.19 66.85

18.91 18.72

Myntriang SHEP Stage II 22.68 22.45

Lungit SHEP 26.74 26.60 Nil Nil

Total Hydro 485.00 482.57 431.59 429.22

Total APGCL 2200.35 2120.81 1930.71 1831.57

The Commission, in this Order, has approved the gross generation based on the

approved PLF and net generation based on the approved Auxiliary Energy

Consumption. The gross generation and net generation approved by the Commission

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

Table 6.9: Approved Gross Generation and Net Generation for FY 2015-16 (MU)

Station

ARR Approved

Gross Net

NTPS 358.77 342.62


NRPP (Open Cycle)* 295.14 281.86

Total Thermal 1514.91 1438.13

KLHEP 390.00 388.05

Myntriang SHEP Stage I 18.91 18.72

Myntriang SHEP Stage II 22.68 22.45

Total Hydro 431.59 429.22

Total APGCL 1946.49 1867.35

*Considering generation from NRPP (Open Cycle) from August, 2015.

82

6.5.5 Gross Station Heat Rate (GSHR)

The GSHR approved by the Commission for FY 2015-16vide MYT Order dated

November 21, 2013, Amended GSHR as per Notification dated January 06, 2015

and the revised GSHR proposed by APGCL is shown in the Table below:

Table 6.10: Revised Gross Station Heat Rate projected for FY 2015-16 (kcal/kWh)

#The GSHR of NRPP was approved in MYT order based on closed cycle mode

As GSHR is a normative parameter, for APGCL’s thermal power plants, the

Commission has considered GSHR as per notification dated January 06, 2015.

The GSHR approved by the Commission for FY 2015-16 is shown in the Table

below:

Table 6.11: Approved Gross Station Heat Rate for FY 2015-16 (kcal/kWh)

6.5.6 Fuel Cost

The weighted average GCV and landed price of gas approved by the Commission for

FY 2015-16 and the revised weighted average GCV and landed price of gas

projected by APGCL is shown in the Table below:

Station

Approved in MYT order dated November 21,

2013

As per amendment notification dated January 06, 2015

APGCL

Proposal

NTPS 3266 3900 4110

LTPS with WHRU 2529 3200 3213

NRPP 1704# 2830 2830

Station GSHR Approved

NTPS 3900

LTPS with WHRU 3200

NRPP (open cycle) 2830

83

Table 6.12: Weighted average GCV and landed price of gas for FY 2015-16

Station


Proposed

Wt. Avg. GCV of Gas

(kcal/SCM)

Wt. Avg. price of Gas

(including transport)

(Rs./1000 SCM)

Wt. Avg. GCV of Gas

(kcal/SCM)

Wt. Avg. price of Gas (including transport)

(Rs./1000 SCM)

NTPS 9182.00 5904.16 9300 8395.84

LTPS 9527.00 7161.25 9549 11020.35

NRPP 9182.00 5904.16 9300 8395.84

APGCL submitted that, for projection of fuel cost for FY 2015-16, the average GCV

of gas from FY 2011-12 to September 2014 has been considered. APGCL has

proposed to procure APM gas for NTPS and NRPP from. M/s OIL. Further for LTPS,

APGCL has projected procurement of APM gas from M/s GAIL and Non- APM gas

from M/s OIL.

The Commission, in this Order, has considered the weighted average GCV derived

from actual fuel bills submitted by APGCL for FY 2014-15 till February, 2015 and

estimation for March, 2015. The Commission has also computed landed price of Gas

for FY 2015-16 based on the methodology derived below.

The gas requirement has been calculated for NTPS & NRPP for FY 2015-16, based

on the approved generation and approved GSHR of the stations. For NTPS and

NRPP, calculation has been done considering supply of APM Gas from same source

i.e. M/s OIL and accordingly landed price has been determined. During this exercise,

Gas price has been considered from MoPNG (PPAC) (As per notification no. PPAC/

Gas Pricing/ April-September, 2015 dated March 31, 2015) for April to September

2015 and GCV of FY 2014-15. Accordingly, other pricing components has been

incorporated like Marketing margin, VAT/sales Tax, Transportation cost, Service Tax

for transportation as per latest actual data and guidelines issued by appropriate

authorities and final Landed price of Gas for FY 2015-16 has been determined.

For LTPS, the previous years trend of supply from different sources were observed

and the sources, who supplied APM & Non-APM gas to LTPS in FY 2014-15, were

considered accordingly. Gas requirement computation has been performed for FY

84

2015-16 for LTPS based on the approved generation and approved GSHR. The

Commission has allocated source wise gas (APM & Non-APM) availability for FY

2015-16 based on the ratio of gas received by APGCL during FY 2014-15.

Afterwards, to arrive at final source wise Landed price of Gas, the Commission has

taken approach similar for NTPS & NRPP. After arriving at source wise landed price

of gas, the Commission has calculated weighted average price as the price for the

entire plant.

The weighted average GCV and landed price of gas approved by the Commission for


Table 6.13: Approved Weighted average GCV and landed price of gas for FY 2015-16

The Commission had approved the fuel cost of Rs. 263.83 Crore for FY 2015-16 in

the MYT Order dated November 21, 2013. As against the same, APGCL has

projected fuel cost of Rs. 521.92 Crore. The fuel cost approved by the Commission


Table 6.14: Approved fuel cost for FY 2015-16

Particulars Derivation Unit NTPS LTPS NRPP Total

Gross Generation A MU^ 358.77 861.00 295.14 1514.91

Heat Rate B kcal/kWh 3900.00 3200.00 2830.00

GCV of gas C kcal/SCM 9514.06 9913.15 9514.06

Overall Heat D=AxB G. cal. 1399193.75 2755187.00 835252.99 4989633.75

Gas consumption E=D/C M. SCM 147.07 277.93 87.79 512.79

Price of Gas F Rs./1000 SCM 8252.76 11023.33 8252.76

Total cost of Gas G=ExF/100 Rs. Lakh 12137.00 30637.43 7245.22 50019.65 Auxiliary Consumption

H % 4.50 5.50 4.50


I=AxH MU 16.14 47.35 13.28 76.78

Net Generation J=A-I MU 342.62 813.64 281.86 1438.13 Fuel Cost per Unit (Gross)

K=G/A/10 Rs./kWh 3.38 3.56 2.45 3.30

Fuel Cost per Unit (Net)

L=G/J/10 Rs./kWh 3.54 3.77 2.57 3.48

^MU= Million kWh

Plant Wt. Avg. GCV of Gas

(kcal/SCM) Wt. Avg. landed price of Gas

(Rs./1000 SCM)

NTPS 9514.06 8252.76

LTPS 9913.15 11023.33

NRPP 9514.06 8252.76

85

Accordingly, the Commission approves the Fuel Cost of Rs. 500.20 Crore for

FY 2015-16. Any deviations in Fuel cost during FY 2015-16 may be claimed

under AERC (Fuel and Power Purchase Price Adjustment Formula)

Regulations, 2010.

6.5.7 Operation and Maintenance (O&M) expenses

The Operation and Maintenance (O&M) expenses comprise of Employee Expenses,

Repair and Maintenance (R&M) Expenses and Administration and General (A&G)

Expenses.

6.5.7.1 Escalation Index

Regulation 36 of the AERC Tariff Regulations, 2006 specifies as under:

“......

36.2 The generating company shall prepare a budget for Operation and Maintenance

Expenses indicating for each head of account actual expenditure of the last year,

estimate for the current year and projection for the next year and submit it to the

Commission along with the tariff petition.

36.3 The Commission shall verify the budget estimates and projections and allow the

amount depending on its views about the reasonableness of the projections.

..............”

The Commission is of the view that as the O&M Expenses are dependent on the

prevailing rate of inflation based on CPI for Employee Expenses and WPI for R&M

and A&G expenses. Hence, the escalation factor for projecting sub heads of O&M

Expenses needs to be derived based on the prevailing CPI and WPI. Year-on-year

inflation has been computed for FY 2014-15 based on the CPI for Employees

Expenses and WPI for R&M and A&G expenses. The same has been considered for

projecting aforementioned sub heads of O&M expenses for FY 2015-16. CPI and

WPI considered for projecting the O&M expenses for FY 2015-16are shown in the

Table below:

86

WPI CPI

Month FY 14

FY 15

FY 16

FY 14

FY 15

FY 16

April 171 181

226 242

May 171 182

228 244

June 173 183

231 246

July 176 185

235 252

August 179 186

237 253

September 181 185

238 253

October 181 184

241 253

November 182 181

243 253

December 180 179

239 253

January 179 177

237 254

February 180 176

238 253

March 180.3 176

239 254

Average 178 181

236 251

2.00% 2.00% 6.29% 6.29%

6.5.7.2 Employee Expenses

The Employee Expenses approved by the Commission for FY 2015-16 in the MYT

Order dated November 21, 2013 and the Employee Expenses projected by APGCL


Table 6.15: Revised employee expenses projected for FY 2015-16 (Rs. Crore)

Particulars Approved in MYT order dated

November 21, 2013 APGCL Petition

Gross employee expenses 91.81

112.19

Less: Capitalisation 0.39

6.92

Net employee expenses 91.42 105.27

APGCL has submitted that the revised employee expenses for FY 2015-16 have

been projected based on estimated figure for FY 2014-15 with an escalation factor of

8.42%. APGCL has also included Rs. 2.35 Crore considering full capacity operation

of Myntriang SHEP (4.5 MW) from December 2015 and an amount 16.01 Cr for

commencement of NRPP from August 2015 which specifically requires new

recruitment.

The Commission, in this Order, has approved the Employee Expenses for FY 2015-

87

16 by escalating the trued up Employee Expenses for FY 2013-14 by CPI for FY

2014-15 and FY 2015-16. The Commission has considered the proportionate

capitalisation of employee expenses in ratio of claimed and approved employee

expense excluding capitalisation. The Employee Expenses approved by the

Commission for FY 2015-16 is shown in the Table below:

Table 6.16: Approved employee expenses for FY 2015-16 (Rs. Crore)

Particulars APGCL Proposed Approved

Salaries 48.21 38.19 Overtime 2.07 1.62 Dearness Allowance 39.33 30.64 Other Allowances 7.38 7.83 Bonus 0.04 0.03 Medical Allowances 0.13 0.20 Leave Travel Allowance 0.07 0.05 Earned Leave Encashment 0.36 0.31 Workmen Compensatory Payment 0.00 0.00 Other Staff Cost 0.00 0.01 Staff Welfare expenses 0.19 0.15 Terminal Benefits 14.41 13.60 Gross employee expenses 112.19 92.63

Less: Capitalisation 6.92 5.72 Net employee expenses 105.27 86.91

The Commission approves Rs. 86.91 Crore as Employee Expense for FY 2015-

16.

6.5.7.3 Repair and Maintenance (R&M) expenses

The R&M Expenses approved by the Commission for FY 2015-16 vide MYT Order

dated November 21, 2013 and the revised R&M Expenses projected by APGCL is


Table 6.17: Revised R&M expenses projected for FY 2015-16 (Rs. Crore)

Particulars Approved in MYT order dated November 21, 2013

APGCL Petition

R&M expenses

17.39

53.55

APGCL has projected the R&M Expense for FY 2015-16, considering escalation rate

of 15%. APGCL has stated that to keep the generating machines in healthy and

88

running conditions, they have to carry out the Major Overhauling (O/H), as per the

OEM’s (Original Equipment Manufacturer) Operation Manual. APGCL has proposed

this Special type of Repair & Maintenance cost amounting to Rs. 32.00 Crore for

consideration under Operation & maintenance (O&M) as a special case to keep

these machines in smooth running condition to enable them to contribute power to

the state of Assam to mitigate shortfall of power to the extent feasible.

For FY 2015-16, the Commission has approved special R&M and regular R&M

expense separately. The Commission has reviewed Cost Benefit analysis and

running hours related submissions of APGCL and has considered special R&M

requirement proposed by APGCL, for continuing smooth operation of the Units.

Hence the Commission has approved Rs. 32.00Crorefor Special type of R&M for

NTPS unit# 1, NTPS unit#3, NTPS unit# 6 and LTPS unit#3.

To arrive at the Regular R&M cost for FY 2015-16, Trued up R&M cost for FY 2013-

14 has been escalated by CPI for FY 2014-15 and FY 2015-16.

The R&M expense approved by the Commission for FY 2015-16 is shown in the

Table below:

Table 6.18: Approved R&M expenses for FY 2015-16(Rs. Crore)

Particulars Approved

A. Special Type Repair & Maintenance:-

Overhauling Works 32.00

B. Regular Repair & Maintenance:- 17.69

Total: 49.69

Accordingly, the Commission approves Rs 49.69 Crore as R&M expense for FY

2015-16.

6.5.7.4 Administration and General (A&G) expenses

The A&G expenses approved by the Commission for FY 2015-16 in the MYT Order

dated November 21, 2013 and the revised A&G expenses projected by APGCL is


89

Table 6.19: Revised A&G expenses projected for FY 2015-16 (Rs. Crore)

Particulars Approved in MYT order dated

November 21, 2013 APGCL Petition

Gross A&G expenses 6.81 10.56


0.70

Total/Net A&G expenses 6.73

9.85

APGCL has submitted that A&G expenses for FY 2015-16 have been projected

based on the past trend considering escalation @8.42%.

The Commission, in this Order, has approved the A&G expenses for FY 2015-16 by

escalating the trued up A&G expenses for FY 2013-14 by WPI for FY 2014-15 and

FY 2015-16. The Commission has considered the capitalisation of A&G expenses as

projected by APGCL for FY 2015-16. The A&G Expenses approved by the

Commission for FY 2015-16are shown in the Table below:

Table 6.20: Approved A&G expenses for FY 2015-16(Rs. Crore)


Gross A&G expenses 7.02


Total/Net A&G expenses 6.56

Accordingly, Commission approves Rs 6.56 Crore as A&G expense for FY

2015-16.

6.5.7.5 Investment Plan for FY 2015-16

The Commission has approved the Investment Plan of Rs. 298.76 Crore for FY

2015-16 in the MYT Order dated November 21, 2013. As against the same, APGCL

has projected the revised Investment Plan of Rs. 621.36 Crore. APGCL has

submitted that in order to meet the ever growing demand of electricity in the state,

APGCL has earmarked on large investment plan for development of power projects.

APGCL has stated that this will also help in the growth & profitability for them. The

90

Commission, in this Order, has approved the investment Plan for FY 2015-16 after

prudence check of the submissions of the Petitioner as shown in the Table below:

Table 6.21: Approved Investment Plan for FY 2015-16 (Rs. Crore)

Particulars Proposed by APGCL Approved for FY

2015-16

NTPS 3.80 3.80 LTPS 20.62 20.62 KHLEP 7.80 7.80 NRPP 160.00 160.00 MARGHERITA Thermal Power Project 0.00 0.00 Cachar Distributed Generation System by Gas IC Engine

21.49 0.00

Titabor Power Project 0.49 0.00 MYNTRIANG 31.62 31.62 120 MW Lower kopili 190.00 91.50 Boundary wall at jagiroad for KLHEP Store 0.00 0.00 Slope Stabilization of KLHEP Dam damaged due to flood

0.00 0.00

EPC contract for 2.0 MW Solar power project at NTPS

17.00 0.00

EPC contract for 2.0 MW Solar power project at LTPS

17.00 0.00

KLHEP (Upper Stage) 0.25 0.00 KLHEP (Inter Stage-I) 0.25 0.00 KLHEP (Inter Stage-II) 0.25 0.00 KLHEP Barrage Toe Project 0.25 0.00 70 MW LRPP 133.50 54.90

Installation of deep tube well with submersible pump set for water supply at BKV Investigation Division Colony, Jagiroad

0.05 0.05

Construction of a new water intake pump house at Dilli River for consumptive water requirement of NTPS

17.00 17.00

Total 621.36 387.28

The Commission has approved the Capital Investment of Rs. 387.28 Crore as

against the capital investment of Rs. 621.36 Crore for FY 2015-16 proposed by

APGCL.

6.5.8 Financing of the Capital Investment

The financing of the Capital Investment approved by the Commission for FY 2015-16

in the MYT Order for FY 2013-14 to FY 2015-16 is shown in the Table below:

91

Table 6.22: Financing of the Capital Investment for FY 2015-16 approved by the

Commission in the MYT Order dated November 21, 2013

Particulars Approved in MYT order dated November 21, 2013

Financing of Capital Investment

Loans 206.65

Grant 8.11

Equity 84.00

Total 298.76

APGCL has submitted the revised Investment Plan for FY 2015-16 and the

corresponding financing for the proposed Capital Investment. The Commission, in

this Order has approved the financing plan for the revised approved Investment Plan

based on the financing proposed by APGCL. The financing plan approved by the

Commission for FY 2015-16 is shown in the Table below:

Table 6.23: Revised Financing Plan for Capital Investment for FY 2015-16 (Rs. Crore)

Sl. No.

Particulars

FY 2015-16

GoA Equity

GoA Loan

GoA Grant

PFC Loan

Others Total

1 NTPS APGCL Petition 0.00 3.80 0.00 0.00 0.00 3.80

Approved 0.00 3.80 0.00 0.00 0.00 3.80

2 LTPS APGCL Petition 0.00 20.62 0.00 0.00 0.00 20.62

Approved 0.00 20.62 0.00 0.00 0.00 20.62

3 KLHEP APGCL Petition

0.00 5.38 2.42 0.00 0.00 7.80

Approved 0.00 5.38 2.42 0.00 0.00 7.80

4 NRPP APGCL Petition

0.00 0.00 0.00 160.00 0.00 160.00

Approved 0.00 0.00 0.00 160.00 0.00 160.00

5 LRPP APGCL Petition 54.90 0.00 0.00 0.00 78.60 133.50

Approved 54.90 0.00 0.00 0.00 0.00 54.90

6 Titabor Power Project

APGCL Petition 0.00 0.00 0.49 0.00 0.00 0.49

Approved 0.00 0.00 0.00 0.00 0.00 0.00

7 Myntriang SHEP

APGCL Petition 8.12 0.00 23.50 0.00 0.00 31.62

92

Sl. No.

Particulars

FY 2015-16

GoA Equity

GoA Loan

GoA Grant

PFC Loan

Others Total

Approved 8.12 0.00 23.50 0.00 0.00 31.62

8 Cachar Distributed Generation System by Gas IC Engine

APGCL Petition 3.80 0.00 0.83 0.00 16.86 21.49

Approved 0.00 0.00 0.00 0.00 0.00 0.00

9 120 MW Lower Kopili

APGCL Petition 183.0 7.00 0.00 0.00 0.00 190.00

Approved 91.50 0.00 0.00 0.00 0.00 91.50

10 EPC contract for 2.0 MW Solar power project at NTPS

APGCL Petition 0.00 17.00 0.00 0.00 0.00 17.00

Approved 0.00 0.0 0.00 0.00 0.00 0.00

11 EPC contract for 2.0 MW Solar power project at LTPS

APGCL Petition 0.00 17.00 0.00 0.00 0.00 17.00

Approved 0.00 0.0 0.00 0.00 0.00 0.00

12 KLHEP (Upper Stage)

APGCL Petition 0.00 0.25 0.00 0.00 0.00 0.25

Approved 0.00 0.00 0.00 0.00 0.00 0.00

13 KLHEP (Middle Stage-I)

APGCL Petition 0.00 0.25 0.00 0.00 0.00 0.25

Approved 0.00 0.00 0.00 0.00 0.00 0.00

14 KLHEP (Middle Stage-II)

APGCL Petition 0.00 0.25 0.00 0.00 0.00 0.25

Approved 0.00 0.00 0.00 0.00 0.00 0.00

15 KLHEP Barrage Toe Project

APGCL Petition 0.00 0.25 0.00 0.00 0.00 0.25

Approved 0.00 0.00 0.00 0.00 0.00 0.00

16 Installation of deep tube well with submersible pump set for water supply at BKV Investigation Division Colony, Jagiroad

APGCL Petition

0.00 0.05 0.00 0.00 0.00 0.05

Approved

0.00 0.05 0.00 0.00 0.00 0.05

93

Sl. No.

Particulars

FY 2015-16

GoA Equity

GoA Loan

GoA Grant

PFC Loan

Others Total

17 Construction of a new water intake pump house at Dilli River for consumptive water requirement of NTPS

APGCL Petition

0.00 17.00 0.00 0.00 0.00 17.00

Approved

0.00 17.00 0.00 0.00 0.00 17.00

18 Total APGCL Petition 249.82

88.85

27.23

160.00

95.46

621.37

Approved 154.52 46.85 25.92 160.00 0.00 387.29

6.5.9 Depreciation

The Commission had approved the Depreciation of Rs. 49.66 Crore for FY 2015-16

in the MYT Order dated November 21, 2013. As against the same, APGCL has

projected depreciation of Rs. 48.21Crore for FY 2015-16.

As per Regulation 14 of AERC Tariff Regulations 2006, the total Depreciation during





accordingly.




for asset created out of grant/subsidy, Commission has apportioned the total grant in

to grant pertaining to CWIP & Fixed Asset, based on the ratio of CWIP & Fixed

Asset.


closing value approved in APR of 2014-15 and closing value of FY 2015-16 as per

submission of APGCL regarding additions/removal of assets as per approved

94

investment plan. The weighted average rate of depreciation has been considered for

computing the depreciation on assets created out of grants/subsidies and consumer

contribution and the same has been deducted from the total depreciation to arrive at

the Approved depreciation for FY 2015-16.

The Commission had considered the GFA addition of Rs. 298.76 Crore for FY 2015-

16 in the MYT Order dated November 21, 2013. However, for computation of

Depreciation for FY 2015-16, Commission has considered APGCL proposal of GFA

addition i.e. Rs. 845.72 Crore. The depreciation approved by the Commission for

ARR of FY 2015-16 is shown in the Table 6.24 in the next page:

Table 6.24: Approved Depreciation for FY 2015-16(Rs. Crore)

Group of Asset

GFA as

on

01/04/15

Asset

Additi

on

Asset

Deleti

on

GFA as

on

01/04/16

Averag

e

GFA

90% of

Average

GFA

Rate of

Depreci

ation

Depre

ciatio

n for

FY 15-

16

Less:

Depreciation

on GFA

having 90%

accumulated

dep.

Net

Deprecia

tion for

FY 15-16

Land

27.7

9

4.12

-

31.9

1

29.8

5

26.8

7

0.00

%

0.00

0.

00

-

Building

45.2

9

1.63

-

46.9

2

46.1

1

41.5

0

1.80

%

0.75

0.

00

0.75

Hydraulic works

166.

09

24.8

7

- 19

0.96

17

8.53

16

0.67

2.

57%

4.

13

0.00

4.

13

Other civil works

196.

63

51.2

8

- 24

7.92

22

2.27

20

0.05

1.

80%

3.

60

0.00

3.

60

Plant & machinery thermal

513.

66

673.

02

- 11

86.6

8

850.

17

765.

15

6.00

%

45.9

1

-4.2

6

41.6

5

Plant & machinery hydel

193.

55

63.4

6

- 25

7.01

22

5.28

20

2.75

2.

57%

5.

21

0.00

5.

21

Lines & cables

45.6

2

6.02

-

51.6

4

48.6

3

43.7

7

2.57

%

1.12

-0

.02

1.

10

Vehicle

1.24

-

- 1.

24

1.24

1.

12

18.0

0%

0.20

-0

.07

0.

13

Furniture

1.51

5.

60

- 7.

11

4.31

3.

88

6.00

%

0.23

-0

.06

0.

18

Other office equipment

1.18

0.

20

- 1.

38

1.28

1.

15

6.00

%

0.07

0.

00

0.07

Roads on land belonging

to other

- -

- -

- -

1.80

%

0.00

0.

00

-

Capital spares at

Generating Stations

177.

95

15.5

2

- 19

3.47

18

5.71

16

7.14

4.

75%

7.

94

-4.2

8

3.66

Total

1370.51

845.72

0.00

2216.23

1793.37

1614.03

69.16

-8.70

60.47

Average assets of OB &

CB excluding Land&

Rights

1763.52

96

Table 6.25: Approved Depreciation for FY 2015-16

Particulars Amount

(Rs. Crore)

Grants & Subsidies as on 01.04.2015 407.54

Grants & Subsidies as on 01.04.2016 434.77

Average Grants & subsidies 421.15

90% of the Assets funded by Grants/subsidies 379.04

CWIP 523.10

GFA excluding Land and rights 1763.52

Grant pertaining to GFA (apportioned in the ratio of GFA and CWIP)

292.33

Rate of Depreciation 3.92%

Depreciation on 90% of the Assets funded by Grants/subsidies

11.46

Depreciation Approved for FY 2015-16 49.00

Accordingly, the Commission approves the Depreciation of Rs. 49.00

Crore for FY 2015-16.


The Commission had approved the Interest and Finance charges of Rs. 89.09 Crore

for FY 2015-16 in the MYT Order dated November 21, 2013. As against the same,

APGCL has projected Interest and Finance charges of Rs. 55.88 Crore for FY 2015-

16.

The Commission, in this Order, has considered the closing balances of Loans for FY

2014-15, as the opening loan balances for FY 2015-16. The loan addition during the

year has been considered as approved in the Investment plan and provided above.

Repayment during the year has been considered as proposed by APGCL. The

Commission has considered interest rates as proposed by APGCL for computing the

interest expenses for FY 2015-16. While approving finance charges, the Commission

has increased approved finance charge of FY 2013-14 in the ratio of loan receipt in

FY 2013-14 and FY 2015-16. The Commission has considered the capitalisation of

interest expenses in the ratio of projected figures of total interest charges and interest

charges capitalized. The interest and finance charges approved by the Commission

in the approval of revised ARR and generation tariff for FY 2015-16 is shown in the

Table below:

97

Table 6.26: Approved interest and finance charges for FY 2015-16 (Rs. Crore)

Particulars

FY 2015-16

Opening Balance

Receipts Repayments Closing Balance

Rate of interest

Interest

PFC 310.55 160.00 22.97 447.58 12.29% 46.61

State Govt. Loan 135.63 46.85 15.20 167.29 8.54% 12.94

Total 446.18 206.85 38.16 614.87 11.22% 59.55

Other Finance Charges

0.14

Less: Interest capitalised 16.99 Net Interest and finance charges

42.69

Accordingly, the Commission approves the Interest and Financial charges of

Rs. 42.69 Crore for FY 2015-16.


The Interest on Working Capital approved by the Commission for FY 2015-16 vide

MYT Order dated November 21, 2013 and the Interest on Working Capital projected

by APGCL is shown in the Table below:

Table 6.27: Interest on Working Capital projected by APGCL for FY 2015-16 (Rs. Crore)

Particulars Approved in MYT

order dated November 21, 2013

APGCL Proposal

Fuel Cost (1 month) 21.99 43.49

O&M expenses (1 month) 9.63 13.77

Maintenance spares 15.90 13.28

Receivables (2 months) 96.12 138.48

Total Working Capital 143.63 209.02

Rate of Interest on Working Capital 14.75% 14.75%

Interest on Working Capital 21.18 30.83

The Commission has approved the normative Interest on Working Capital for FY

2015-16 in accordance with AERC Tariff Regulations, 2006.

APGCL stated that they have not considered O&M and GFA component for CTPS for

calculation of Interest on working capital. The Commission has accordingly reduced

O&M and GFA component of CTPS proportionately as per the ratio of O&M expense

submitted by APGCL and that approved by the Commission, for those ARR

components from the calculation of Interest on Working Capital. The Interest on

Working Capital approved by the Commission for FY 2015-16 is shown in the Table

98

below:

Table 6.28: Approved Interest on Working Capital for FY 2015-16 (Rs. Crore)


Fuel Cost (1 month) 36.68

O&M expenses (1 month) 11.69

Maintenance spares 13.35

Receivables (2 months) 123.10

Total Working Capital 184.82

Rate of Interest as on April 01, 2015 14.75%

Interest on Working Capital 27.26

Accordingly, the Commission approves the Interest on Working Capital of Rs.

27.26 Crore for FY 2015-16.


The Commission had approved the Return on Equity of Rs. 49.75 Crore for FY 2015-

16vide the MYT Order dated November 21, 2013. As against the same, APGCL has

projected the Return on Equity of Rs. 58.96 Crore. APGCL has also submitted details

of station wise Equity addition and deletion during the FY 2015-16.

The Commission has observed that APGCL has calculated Return on Equity for the

new projects i.e. NRPP and Myntriang for the full year even though these plants shall

be operational for only a part of the year. As such, the Commission has calculated

the Return on Equity for the applicable period during which the plant shall be

operational in the Financial Year (i.e after date of CoD till the end of Financial Year).

For Myntriang, the period of operation has been calculated based on the assumption

that 3 MW shall be operational for full year and 10.5 MW shall be operational for a

period of 4 months (the weighted average period is calculated accordingly). For

NRPP the project (Open Cycle) will be operational for 8 months. As such, the

Commission has approved RoE for FY 2015-16 in accordance with AERC Tariff

Regulations, 2006. The details of station wise RoE computation are shown in the

table below:

99

Table 6.29: Approved Return on Equity for FY 2015-16(Rs. Crore)

Particulars NTPS LTPS KLHEP LWHRP NRPP* Myntriang* Total

Opening Equity 69.44 79.24 68.11 70.92 0.00 13.37 301.08

Closing Equity 75.68 84.98 68.11 70.92 208.12 33.34 541.15

Average equity 72.56 82.11 68.11 70.92 104.06 23.36 421.12

Rate 14% 14% 14% 14% 14% 14% 14%

ROE 10.16 11.50 9.54 9.93 8.50 1.57 51.19

*Return has been calculated based on the operational period

Accordingly, the Commission approves Return on Equity of Rs 51.19 Crore for

FY 2015-16.

6.5.13 Special R&M expenses (for KHLEP, LTPS Unit 2 & Unit 7) vide Review Order

dated July 07, 2014

For special type R&M under this head, APGCL has included Rs 26.73 Crore as a

part of the ARR for FY 2015-16 in the table 34 of the Tariff petition and mentioned

that this amount is the R & M Expense approved vide Review Order dated July 07,

2014.

It is explained in the clause 4.3.10 of this Order that, the overall approved Special

type R & M for FY 2013-14 after considering Review Order dated July 07, 2013 is Rs.

35.23 Crore. Out of this amount, APGCL has incurred Rs. 9.03 Crore during FY

2013-14 and Rs. 12.94 Crore is estimated to be incurred during FY 2014-15, thereby

a total of Rs. 21.97 Crore is incurred/estimated to be incurred during FY 2013-14 &

FY 2014-15. This means, as against APGCL’s earlier proposal for Overhauling of

KLHEP, LTPS Unit 2 & 7 amounting Rs. 35.23 Crore, the amount of Rs. 21.97 Crore

has already been incurred till FY 2014-15.

Accordingly, the balance amount of Rs. 13.26 Crore is estimated to be incurred

during FY 2015-16 and as such, the Commission approves Rs. 13.26 Crore under

Special R&M expenses for ARR of FY 2015-16.

6.5.14 Income Tax

The Commission had approved the Income Tax of Rs. 0.93 Crore for FY 2015-16

vide MYT Order November 21, 2013. As against the same, APGCL has proposed the

Income Tax of Rs. 0.93 Crore.

The Commission has approved the Income Tax of Rs. 0.93 Crore for FY 2015-

16, as approved in the MYT Order dated November 21, 2013.

100

6.5.15 Other Income

The Commission had approved the Other Income of Rs. 13.29 Crore for FY 2015-

16vide MYT Order dated November 21, 2013. As against the same, APGCL has

proposed the Other Income of Rs. 10.60 Crore.

The Commission has approved the Other Income for FY 2015-16 by escalating the

Other Income for FY 2014-15 by 10% in accordance with the principle as followed in

the MYT Order.

Thereby, the Commission has approved Other Income of Rs. 12.83 Crore for FY

2015-16.

6.5.16 Summary

Based on the above analysis, the ARR approved by the Commission for FY 2015-16


Table 6.30: Approved ARR for FY 2015-16 (Rs. Crore)

ARR Components Approved in MYT

order dated November 21, 2013

APGCL Proposal

Approved by the

Commission

Fixed Charges


Employee expenses 91.42 105.27 86.91

Repair and Maintenance expenses 17.39 53.55 49.69

Administrative and General expenses 6.73 9.85 6.56



Income Tax 0.93 0.93 0.93





Fuel Cost 263.84 521.92 500.20

Add: Revenue deficit of True-up for FY 2013-14 0.00 -66.83 4.10

Add: R&M expense approved vide Review petition on Tariff order for FY 13-14 dated 08.07.2014

26.73 13.26

Annual Revenue Requirement 576.69 968.35 818.97

Thus, the Commission has approved the ARR of Rs. 818.97 Crore for FY 2015-

16 as against APGCL’s proposal of Rs. 968.35.

101

6.5.17 Generation Tariff for FY 2015-16

The generation tariff includes separate energy charges for NTPS, LTPS and NRPP

(on energy sent out basis) and monthly fixed charges for APGCL. The approved

generation tariff for FY 2014-15 is shown in the Table below:

Table 6.31: Revised approved Generation Tariff for FY 2015-16

Energy Charge (Net) (Rs./kWh)

FY 2015-16

NTPS 3.54

LTPS 3.77

NRPP 2.57

Fixed Charges Rs. Crore

Total Fixed Charges 318.77*

Monthly Fixed Charges 26.56

*Total fixed charges includes approved ARR gap during truing up of FY 2013-14.

Note: The Station-wise Fixed Charges could not be approved for APGCL as the Station-wise details of fixed costs are not available.

6.5.18 Effectuation of Generation Tariff

The approved rate of Energy Charge and Fixed Charge shall be effective from

August 1, 2015 till it is replaced by another Order of the Commission.

APGCL has to file the Petition for approval of revised ARR and generation tariff along

with true-up for FY2014-15 and APR for FY 2015-16 along with the MYT petition (for

the control period of FY 2016-17 to FY 2018-19) by December 1, 2015.

102

7 Compliance of Directives & New Directives

The Commission has issued certain directives to APGCL with an objective of

attaining operational efficiency and streamlining the flow of information, which would

be beneficial to the sector and the Petitioner, both in the short-term and long-term.

This Chapter deals with the compliance status and the Commission’s views thereon

as well as the summary of new directions for compliance and implementation by

APGCL.

7.1 COMPLIANCE OF OLD DIRECTIVES

The Commission’s comments on the status of compliance to the directives are given

below:

Directive-1: Auxiliary Consumption (NTPS and LTPS)

The efforts should continue and the Auxiliary Consumption levels of both the Stations

need to be brought down to the levels specified in the Regulations.

APGCL’s Compliance

APGCL submitted that the measures being taken to reduce Auxiliary Consumption

along with the Report on action already taken as per the recommendations of the

energy audit done by NPC has been submitted to the Commission vide Letter No.

APGCL/CGM (G)/AERC/2012-13/115/Pt-VIII/43 dated January 24, 2014. APGCL

further submitted that all necessary measures are being implemented to reduce the

Auxiliary Energy Consumption to the extent possible. LTPS and NTPS, being a

designated consumer of Bureau of Energy Efficiency (BEE) under Perform, Achieve

and Trade (PAT) Scheme, have been given a specific target and APGCL is following

the suggested procedures prescribed in the energy audit Report to achieve targets

as fixed by the Ministry of Power, GOI/ BEE under PAT Scheme.

Commission’s Comments

The Commission has taken note of APGCL’s submissions. The Commission

acknowledges the efforts of APGCL in reducing the Auxiliary Energy Consumption.

However, the Commission is of the view that the targets specified under PAT

103

Scheme are altogether for a different purpose and APGCL should strive to reduce

the Auxiliary Consumption of NTPS and LTPS to the normative levels specified in the

Regulations.

Directive-2: Employee’s Provident Fund

The Commission again directs APGCL to maintain separate accounts for the

amounts recovered from the employees towards provident fund and its utilization

duly audited by statutory auditors. In this matter, APGCL should expedite the

formalities of forming the Trust and the same should be completed as early as

possible.


APGCL submitted that the reply from GoA for earlier correspondence is awaited and

APGCL is continuously pursuing the matter with GoA.


The Commission again directs APGCL to complete the formalities of forming the

Trust as early as possible..

Directive-3: Procurement of Gas

APGCL should make all out efforts to procure committed quantity of gas and to get

additional allotments, to overcome the generation problem. The efforts made and the

outcome should be periodically reported to the Commission.


APGCL submitted that it has made all out efforts to get the gas supply as per

commitment. APGCL is also pursuing for an additional allotment of gas of 0.15

MMSCMD from the ONGC gas fields in the Cachar district. However, inspite of all

these efforts, during the 3rd quarter of 2014, natural gas supplied by both OIL and

GAIL has been inconsistent.


Noted. APGCL should continue to pursue with the gas suppliers to obtain the

required quantum of gas on a regular basis and inform the Commission about any

difficulties in getting gas supply from time to time.

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Directive-4: Performance of Plants and Expediting Renovation & Modernization

works

APGCL should expedite the on-going Renovation & Modernisation schemes and

ensure timely completion of the projects, to improve the performance of the plants.

Also, the final DPR with cost benefit analysis indicating life extension period shall be

submitted for approval of the Commission as early as possible.


APGCL has submitted the impact of Renovation & Modernization on the

performance of NTPS and LTPS. Also, the DPR for new Renovation & Modernization

(R&M) works related to NTPS, LTPS and KLHEP for FY 2014-15and FY 2015-16 has

been submitted by APGCL.


The in-principle approval for R&M works has been accorded for FY 2014-15 and FY

2015-16 vide letter dated February 14' 2015 and March 18' 2015 respectively.

APGCL is directed to expedite the completion of these R&M works and submit

compliance report to the Commission on quarterly basis.

Directive-5: Monitoring of Progress of New Power Projects and Need for

augmentation of own generating capacity

APGCL is directed to submit quarterly progress report on regular basis.


APGCL submitted that the progress Report on implementation of New Projects

(Thermal) & ongoing R&M projects had been submitted for the 3rd and 4th quarter of

FY 2014-15 on January 27, 2015 and April 30, 2015. Similarly, for Hydro Projects

also, the progress of new projects and R&M projects were submitted for 3rd and 4th

quarter of FY 2014-15 on February 26, 2015 and May 06, 2015.


The compliance of APGCL is noted in this regard. However, APGCL is directed to

expedite the completion of new projects as per schedule and continue to submit

quarterly progress report on regular basis, till completion of the projects.

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Directive-6: Capital Cost of Small Hydro Projects

The Commission directs APGCL to submit the Petition with detailed break-up of the

Capital Cost for approval of the Commission.


APGCL submitted that in response to Commission’s letter No. AERC.447/2014/6

dated 16.05.2014, the details of Capital cost of 9 MW Myntriang Stage I&6 MW

Lungnit SHEPs were submitted to the Commission on October 28, 2014. Similarly,

the revised DPR for 4.5 MW enhancement of Myntriang SHEP was submitted to the

Commission on March 07, 2015.


The compliance of APGCL is noted in this regard.

Commission has already accorded in principle approval for Capital Cost of Myntriang

SHEP (9 MW). In principle approval for Capital Cost of Lungit SHEP (6MW) and

enhanced capacity of Myntriang SHEP (4.5 MW) will be issued shortly.

Directive-7: Filing of complete Petitions within the scheduled dates

It has been observed that the Petitions are not being filed on time, and even after

filing of the Petitions, the necessary data and clarifications are not submitted on time,

leading to delays in the tariff determination process. The Commission directs APGCL

to ensure that the Petitions are filed on time, and all the necessary data and

clarifications are submitted along with the Petition itself.


APGCL submitted that the Petition for Revised ARR and Tariff for 2015-16 was

submitted to AERC with due extension on 20thDecember 2014.


In future, APGCL is directed to file the petition within the time stipulated by the

Commission and avoid delays in filing the petition. Also, the submitted petitions are

found to have several deficiencies, most of which are repetitive in nature. APGCL is

directed to file the complete petition with required supporting documents in future to

enable proper and faster review of petition.

Directive-8: Calculation of depreciation in accordance with the AERC Tariff

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Regulations

It has been observed that APGCL does not submit the calculations of depreciation

strictly in accordance with the AERC Tariff Regulations, 2006, and claims

depreciation on assets funded through grants also. The Commission directs APGCL

to ensure that in subsequent Petitions, the depreciation is computed strictly in

accordance with the AERC Tariff Regulations, 2006.


APGCL submitted that the Petition for Revised ARR and Tariff for 2015-16 was

submitted to AERC and the calculation of depreciation has been done as per the

norms of AERC.


The Commission has observed several discrepancies have been found in current

depreciation submission. The Commission directs APGCL to ensure that in

subsequent Petitions, the depreciation is computed strictly in accordance with the

AERC Tariff Regulations, 2006.

Directive-9: Transfer of transformer feeders

The Commission had directed APGCL to expedite the transfer of transformer feeders

within 3 months from the date of issue of FY 2014-15 tariff order (dated November

21' 2014) and submit the status of the same to the Commission.


APDCL has submitted that the construction of 132/33 kV substation is going on at

NTPS. The transfer of 6 no. of 33 kV feeders to APDCL will be done after the

commissioning of the substation. It has also submitted that AEGCL related feeders

equipments has already been handed over to AEGCL on September 25' 2014 along

with the control room of operations of these feeders/equipments.

For LTPS, APGCL submitted that a meeting has been held between APGCL and

APDCL in February' 2015 to discuss the modalities for handing over the distribution

feeders/equipments to APDCL. The handing over process is expected to be

completed by June' 2015.


Noted. The Commission directs APGCL to expedite the process of handing over the

107

transformer feeders to APDCL and submit the compliance report for LTPS

immediately.

7.2 NEW DIRECTIVES

Directive-1: Submission of Fixed Asset Register: APGCL is directed to submit the

fixed asset register along with the summary report of asset taken over by APGCL as

on date of transfer and subsequent additions along with accumulated depreciation of

asset based on asset class and year of addition.

Directive-2: Submission of Complete Tariff Petitions: In addition to the Directive 7

above, APGCL is directed to submit Tariff petition for Truing up, APR and ARR along

with calculations/ information/ formats based on which they have arrived on filed ARR

components in hard and soft copy (MS-Excel). APGCL is also directed to submit their

petition clearly segregated by chapters for True- Up, APR and ARR. While replying to

Objectors/ stakeholders, APGCL is directed to equip their reply with all necessary

fundamental calculations/ information/ tables/ formats.

Sd/-

(D. Chakravarty)

Member, AERC

Sd/-

(N. K. Das)

Chairperson, AERC

108

Annexure-1

Minutes of the 19th meeting of the State Advisory Committee

held on 8th May, 2015, at Administrative Stuff College Khanapara, Guwahati

The 19th meeting of the State Advisory Committee was held at 10.30 am on 8th May, 2015, at Administrative Stuff College Khanapara, Guwahati.

The list of members and officers present is appended at Annexure – 1.

At the very outset, the Secretary, AERC, welcomed all the Members of the State Advisory Committee, Special Invitees and officers present, to the 19th Meeting of the Committee, which had been recently reconstituted vide circular dated 20.04.2015as per Section 87 of The Electricity Act, 2003. He stated that the State Advisory Committee is an important body with an objective to advise the Commission on important issues such as:

• Major questions of policy; • Matters relating to quality, continuity and extent of service provided by the

licensees; • Compliance by Licensees with the conditions and requirements of their licence; • Protection of Consumer Interest; and • Electricity supply and overall Standards of Performance by utilities.

He then requested the Chairperson, AERC, Shri Naba Kumar Das, IAS (Retd.) to preside over the meeting.

The Chairperson, AERC, on behalf of the Commission, extended a hearty welcome to all the Members of the State Advisory Committee.

The Chairperson informed the members that Power Point presentations would be made by the representatives of the power utilities on the overall power scenario of the State and also on the petitions submitted by each of the three utilities for revision of tariff. He requested the members to take this opportunity to raise various issues and problems being faced by the consumers and offer suggestions so that effective strategies could be worked out to improve the power position in the State. The agenda items were taken up for discussions in seriatim which are briefly recorded below.

1. Agenda No. 1: Confirmation of the Minutes of the 18th meeting of the State Advisory Committee (SAC) held on 12-08-2014

The Minutes of the 18th Meeting of the Committee was already circulated among the Members and Special Invitees. Hence, it was taken as read. No comment was received on the Minutes. With the approval of the members, the Minutes of the 18th meeting of the SAC were confirmed.

2. Agenda No. 2: Action taken on the Minutes of the 18th Meeting of SAC.

The action taken report was submitted to the members, which are summarized as below.

2.1. Peak power Tariff in consumer categories is not presently covered under the TOD Tariff. The Commission had advised APDCL to submit the required information. On receipt of the same the Commission would be in a position to take a decision.

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2.2. Regarding the Regulation of Peak Power Management it was informed that the Commission have issued the AERC DSM (Demand Supply Management) Regulations, 2012. Commission now will be take up framing the peak power Regulations.

2.3. It was appraised that the two Regulations ofAERC viz. (I) Co-generation and

Generation of Electricity from Renewable Sources of Energy and (II) AERC Grid Interactive Solar PV systems have been finalized and have been sent for publication in the Assam Gazette.

2.4. The amendments to AERC (Terms & Conditions for Determination of Tariff)

Regulations, 2006 were notified in the Assam Gazette on 06.01.2015.

2.5. Chairperson, AERC requested Mr. K.V Eapen Chairman (APDCL, AEGCL and APGCL) to present a brief about the Power Availability Scenario up to the year 2019. Who shared the following stated below:

Plant Name

Maximum Availability (MW)

Date Of Commissioning

OTPC Palatana(Unit I)

120

January 2014

Farakka super Thermal Power Station

75

September 2014 to August 2016

OTPC Palatana (Merchant Power)

35 (Merchant power) Agreement made

Damodar Valley Corporation

75

May 2015 to July 2015

Nikachhu hydro Power station

118

July 2019

TOTAL 423

3. Agenda No. 2: Present power scenario of the State.

A presentation was made by Mr M.K Adhikari GM, (APDCL) on Present power scenario of the State of Assam.

4.1. During the presentation Mr. Bimal Phukan desired to know about the methodology of

calculation of demand by APDCL .APDCL appraised that physical demand recorded in the system is considered to calculate demand. Mr. Bimal Phukan objected to the same stating that during summer months (4-5months) load shedding occurs across the state therefore the system will not record the actual demand. APDCL confirmed that they consider substation wise recorded data for those days of the month when no load shedding was carried out. However, Mr. Phukan not being satisfied with the reply mentioned that the demand data is a suppressed demand data and he apprehended that if this demand is considered by Central Government for allocation of power then Assam will get lower allocation of power than actual requirement.

4.2. Mr. Anup Gogoi mentioned that per capita per month consumption of Assam is very low compared to other states of India. He opined that this may be due to the demand

110

reflected is not the actual demand .Actual demand may be 3000 MW as compared to assessed demand of 1100 to 1450 MW.

4.3. Chairperson AERC mentioned that per capita consumption appears to be very low; there is a need to analyze/ asses the actual requirement to meet demand.

4.4. Mr. Nitin Sabikhi Manager, IEX enquired about the base load of the system, APDCL replied that the base load of the system is minimum of 600 MW throughout the day and 750 to 800 MW during day time.

4.5. Mr Bimal Phukan desired to know about the methodology for allocation of CSGS power. APDCL replied that Gadgil-Mukherjeeformula is used for allocation of both hydro as well as thermal power. The new revised Gadgil-Mukherjee formula as approved by National Development

Council (NDC) is given in the following table. Criteria for inter-state allocation of Plan

Assistance

Criteria Weight (%)

Population 55

Per capita Income 25

Fiscal Management 5

Special Problems 15

Total 100

He further enquired about the availability of Meghalaya power and the cost. APDCL replied that Meghalaya power is available since 1988 at a rate mutually decided. Presently, in some areas of Mankachar and Goalpara District of Assam power from Meghalaya is received at 11KV level.

4.6. Mr. Bimal Phukan asked about Commissioning date of Lakwa Thermal Power Station (LTPS) and also desired to know about the projects those came up after 1978.Mr. KV Eapen replied that LTPS was Commissioned in 1978. Mr.P. Bujarbaruah, MD (APGCL) replied that presently Namrup Replacement power Plant (NRPP) and Lakua Replacement Power Plant (LRPP) are under implementation.

4.7. Mr. Anup Gogoi desired to know about the present power prices in the exchange. Mr. Nitin Sabikhi, Manager IEX replied that for the last six months exchange prices are very low, the RTC price was `2.5 /unit and night price was less than ` 2 /Unit for North East Region. With the present trend of growth in Generation capacity (8to 9%) versus growth in Demand (4%). It is expected that there will be surplus scenario in next few years and exchange prices likely to fall further.

He opined that Assam may think of replacing purchase of costlier power with

111

exchange power, which may lead to saving of substantial amount of power purchase

cost. He informed that States such as Haryana, Punjab Rajasthan are already using

the method of replacing costly power with cheap power from the Exchange.

4.8. Mr. Abjijit Barooah desired to know about the internal system of APDCL to take quick commercial decision on power purchase. Mr.KV Eapen replied that Commercial department of APDCL is responsible for handling power purchase. Mr. Adhikari GM (TRC), APDCL highlighted that on a daily basis (block wise) demand supply position is assessed and decision taken regarding the power purchase. At present APDCL meets 80% of demand from firm allocation /Contracted supply, 5 to 10% from exchange and 5% through deviation settlement mechanism.

5. Agenda No. 4: Tariff Proposals for FY 2015-16

• Mr.SM Kalita CGM (F & A), APGCL made a presentation on APGCL Tariff Proposals for FY 2015-16.

5.1. Mr. Bimal phukan Member SAC enquired as to whether there was any break down of the generating stations. APGCL replied that the details break down have been submitted.

5.2. Mr. phukan further pointed out that the proposed Generation Tariff at ` 4.92 is higher compared to the exchange price of under ` 4.00. He requested APGCL to review this issue.

5.3. It was suggested that the long-term viability of the small gas based projects be reviewed as a cluster of small projects may result in high O &M expenses.

5.4. Mr. Abhijit Barooah mentioned that the average auxiliary consumption of the stations are very high. APGCL appraised that there are three main reasons of high auxiliary consumption

a) Because of low availability of gas machines are run on low load (40-50%) condition. Though, some of the Auxiliary Units need to be run all the time irrespective of loading resulting in higher auxiliary consumption.

b) Being old the Station Heat Rates are high for the existing stations. Besides, use of low CV gas compared to design there is requirement of higher volume of gas which results in higher auxiliary consumption.

6. Mr. S.K. Saha CGM (F & A) AEGCL made a presentation on AEGCL Tariff Proposals for FY 2015-16.

6.1. Mr. Bimal phukan enquired about the capacity that can be handled by AEGCL.AEGCL replied that an average of 716 MW and 806 MW were handled during 2013-14 and 2014-15 respectively.

6.2. Mr. Nitin Sabikhi Manager IEX desired to know about the Import capacity of AEGCL. AEGCL replied that the import capacity is 1100 MW.

7. Mr. Manoj Adhikari GM, APDCL made a presentation on APDCL Tariff Proposals for FY 2015-16.

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7.1. Mr. Abhijit Barooah opined that a provision should be there to penalize the utility for not meeting the norms set in Regulations. He further mentioned that with the present status of revenue gap there is a need for Government to provide a onetime fund to bring a clean slate. He enquired about the methodology of fixing the Tariff for different categories of customers. APDCL replied that Tariff for different categories of customers is proposed keeping in mind the guidelines of National Tariff Policy to maintain the cross subsidy level within ± 20%.

7.2. Mr. Bimal phukan suggested that the buying and selling of power through the

exchange be carried out in a prudent manner so that the maximum benefit can be derived out of the process. Should the need arise; personnel can be specially trained for the purpose.

8. Agenda No. 5: Draft AERC ( Terms & Conditions for Determination of Multi Year

Tariff) Regulations, 2015

8.1. A brief presentation was made by Mr. Amit Goenka (Deloitte Touche Tohmatsu India Pvt. Ltd.) on Multi Year Tariff Regulation. Mr. Saurabh Agarwal enquired about the mechanism of sharing of Gain/loss in the regulations. It was replied that the Mechanism proposed is as per model FOR Regulations. Mr. Saurabh Agarwal further enquired as to why the incentive structure has been changed (Earlier 25 paisa which becomes 50 paisa w.e.f 1st April 2016). Mr. Amit Goenka (Deloitte Touche Tohmatsu India Pvt. Ltd) clarified that it totally depends upon the new Regulation. Mr. Agarwal enquired as to why AT & C Loss is not kept as an Efficiency Parameter. Mr. Goenka replied that as there is ambiguity in formula for AT & C loss, distribution loss is kept as one of the efficiency parameters.

9. Agenda No. 6: Draft AERC (Payment of Fees etc.) Regulations, 2015.

• A brief presentation was made by Mr. Sanjeeb Tamuli, Consultant AERC on the Draft

AERC (Payment of Fees etc.) Regulations, 2015 which was considered and approved by the SAC.

10. Agenda No. 7: Draft AERC (Smart Grid) Regulations, 2015. • A brief presentation was made by Mr. D.K Sarmah, Joint Director (Tariff) AERC on

the Draft AERC (Smart Grid.) Regulations, 2015 which was considered and approved by the SAC.

11. Agenda No. 8 :Any other mater

11.1. Mr. Dilip Kumr Baruah expressed that the Tariff has to go up due to prevailing conditions however; there is a scope for moderation.

11.2. He requested to ensure 24×7 power supply and suggested the following which may help control the Tariff.

a) Efforts should be made to Minimize cost.

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b) Under utilisation of capacity should be avoided as far as possible by taking preventive measures.

c) Execution of work should be expedited. d) There should be policies on procurement and inventory control of

Stocks. Physical verification should be carried out at times. In substations equipments are idle for 5 to 30 years.

e) A proper investment policy should be made by the Companies. f) Also a disaster management cell should be set up by all the

Companies. g) Audit report should be made available in the public domain.

11.3. He further enquired as to how many consumer complaints have been received and

whether any compensation was paid to the consumers when the complaint was not settled in a given time.

Chairperson AERC advised that the suggestions put forward should be included in the business plans of utilities.

12. Comments from Chairperson AERC:

Chairperson AERC mentioned that Tariff Proposals are subjected to due scrutiny and wherever it is found that the expenditure are not justified, AERC do not allow them in the permissible Tariff .Consequently, every year there is a difference between amount claimed and amount allowed. Chairperson, AERC appreciated the suggestions offered by Mr.Dilip Kumar Baruah on better management of Inventory and also advised the utilities to take appropriate action.

Regarding Consumer Awareness, Chairperson AERC mentioned that Administrative staff college of India (ASCI) Hyderabad has been Commissioned to do a study on “Effectiveness of Consumer Grievances Redressal Mechanism and Compliance of S.O.P by APDCL.” They will also examine whether the SOPs issued by the Commission are being followed by APDCL. Effectiveness of the consumer redressal forum also will be evaluated. He also appraised the members about the proposed modification in the structure of the Consumer Redressal Forum.

13. No other matter came up for discussion. The meeting ended with a Vote of Thanks to and from the chair.

Sd/- (Naba Kumar Das)

Chairperson Assam Electricity Regulatory Commission

114

Annexure – 2

List of members present in the meeting of the State

Advisory Committee held on 8th May, 2015

1. Shri Naba Kumar Das, IAS(Retd.), Chairperson, AERC

2. Dr. Rajani Kanta Gogoi, Member, AERC

3. Shri D.Chakravarty, Member, AERC neccessary

4. Shri V.K Pipersenia, Additional Chief Secretary,GOA

5. Shri V.B Pyarelal, Additional Chief Secretary,GOA

6. Shri K.V. Eapen, Chairman, APDCL, AEGCL & APGCL

7. Shri R.L. Barua, MD, APDCL

8. Shri P. Bujarbaruah, MD, APGCL

9. Shri G.K.Das, MD, AEGCL

10. Shri Arup Kumar Dutta, President, AASIA.

11. Dr. Shree Birendra Kumar Das, President, Grahak Suraksha Sanstha, Guwahati.

12. Shri Bharat Saikia, Secretary, Grahak Suraksha Sanstha, Guwahati

13. Shri Anuj Kumar Baruah, AASSIA, President,Bamunimaidam, I/E Guwahati

14. Shri Saurabh Agarwala, FINER, Member

15. Shri Ranjit Kumar Barua ABITA,GS Road

16. Smt. Utpala Saikia, Deputy Secretary, Power Deptt., Dispur.

17. Shri Kulendra Talukdar, Joint Secretary Agriculture, Dispur.

18. Shri Akhil Sarma Under Secretary Finance Deptt, Dispur.

19. Shri Nitin Sabikhi, Manager IEX, New-Delhi.

20. Shri Abhinandan Goswami, R.M IEX, New-Delhi

21. Shri Bimal Phukan, Public

22. Shri Anup Gogoi, Prof Deptt. EEE IITG

23. Shri Dilip Kumar Baruah, Former Principal Cotton College

24. Shri Abhijit Barooah, CII North East

25. Smt.Joyshree Das Verma, Chairperson FICCI

Officers of AERC

1. Shri SK Roy (ACS, Retd.)Secretary AERC

2. Shri A.k..Barthakur, Senior Consultant,AERC

3. Shri D.K. Sarmah, Joint Director, AERC

4. Shri T. Mahanta, Deputy Director (Engg) AERC

5. Shri A. Purkayastha, Deputy Director (Finance) AERC

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6. Ms. Panchamitra Sarma, Consultant (Finance, Database and Consumer Advocacy Cell) AERC.

7. Shri N.K. Deka, Consultant (Technical), AERC

8. Shri Sanjeeb Tamuli, Consultant AERC

9. Shri Jayjeet Bezbaruah, Consultant,AERC

.............

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