bihar tariff 2012-13

BIHAR ELECTRICITY REGULATORY

COMMISSION

Case No. TP – 02 of 2011

Order On:

Truing-up for FY 2010-11,

Review for FY 2011-12 &

Determination of

Aggregate Revenue Requirement (ARR)

And

Tariff for FY 2012-13

For Supply of Electricity to consumers in the

state

by Bihar State Electricity Board (BSEB)

Effective from 1st

April 2012

(Issued on 30th

March 2012)

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Contents

ORDER ............................................................................................................................................................ 1

1 Introduction ...................................... ..................................................................................................... 8

1.1 Bihar Electricity Regulatory Commission ........................................................................................... 8

1.2 Functions of BERC ........................................................................................................................... 8

1.3 Bihar State Electricity Board ............................................................................................................. 9

1.4 Chronology of the filing of tariff petitions and Issue of Tariff Orders .................................................. 10

1.5 Scope of the Order ......................................................................................................................... 11

2 Procedural History ................................ ............................................................................................... 13

2.1 Background ................................................................................................................................... 13

2.2 Information Gaps in the petition ...................................................................................................... 13

2.3 Inviting comments / suggestions from Public ................................................................................... 14

2.4 State Advisory Committee .............................................................................................................. 19

2.5 Public Hearing ............................................................................................................................... 19

2.6 Structure of the Order ..................................................................................................................... 20

3 Public Consultation Process ....................... ........................................................................................ 22

3.1 Introduction .................................................................................................................................... 22

3.2 Stakeholders Suggestions/ Objections, BSEB’s Response and Commission’s Views ....................... 22

4 True Up of FY 2010-11 ............................. ............................................................................................ 64

4.1 Background ................................................................................................................................... 64

4.2 True-up of ARR for FY 2010-11 ...................................................................................................... 64

4.3 Category wise energy sales ............................................................................................................ 65

4.4 Transmission and Distribution Losses ............................................................................................. 67

4.5 Own Generation ............................................................................................................................. 68

4.6 Power Purchase ............................................................................................................................. 69

4.7 Energy Balance.............................................................................................................................. 71

4.8 Own Generation Cost ..................................................................................................................... 73

4.9 Power Purchase Cost ..................................................................................................................... 76

4.10 Disincentive for non-achievement of T&D loss reduction Targets ..................................................... 78

4.11 Operation & Maintenance Expenses ............................................................................................... 79

4.12 Capital Expenditure ........................................................................................................................ 83

4.13 Gross Fixed Assets ........................................................................................................................ 85

4.14 Depreciation .................................................................................................................................. 86

4.15 Interest and Finance Charges ......................................................................................................... 87

4.16 Interest on Working Capital............................................................................................................. 92

4.17 Return on Equity (ROE) .................................................................................................................. 94

4.18 Taxes ...................................................................................................................................... 95

4.19 Other Debits & Extraordinary Items ................................................................................................. 95

4.20 Prior Period Credits / (Charges) ...................................................................................................... 95

4.21 Non-Tariff Income .......................................................................................................................... 97

4.22 Revenue from the sale of Power ................................................................................................... 100

4.23 Grant / Revenue Subsidy from State Government ......................................................................... 103

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4.24 Approved ARR and Revenue Gap for FY 2010-11 ......................................................................... 106

5 Review of FY 2011-12............................... .......................................................................................... 109

5.1 Background ................................................................................................................................. 109

5.2 Category wise Sales..................................................................................................................... 109

5.3 Transmission and Distribution Losses ........................................................................................... 111

5.4 BSEB’s Own generation ............................................................................................................... 112

5.5 Power Purchase ........................................................................................................................... 116

5.6 Energy Balance............................................................................................................................ 118

5.7 Operation & Maintenance Expenses (O&M) .................................................................................. 120

Employee Expenses ................................................................................................................................. 120

Repair & Maintenance Expenses (R&M) ................................................................................................... 123

Administration & General Expenses (A&G)................................................................................................ 124

Operation & Maintenance Expenses (O&M) .............................................................................................. 126

5.8 Capital Expenditure ...................................................................................................................... 126

5.9 Depreciation ................................................................................................................................ 130

5.10 Interest & Finance Charges .......................................................................................................... 132

5.11 Interest on Working Capital........................................................................................................... 135

5.12 Non-Tariff Income ........................................................................................................................ 137

5.13 Return on Equity .......................................................................................................................... 140

5.14 Revenue from Sale of Power at Existing Tariff for FY 2011-12 ....................................................... 141

5.15 Revenue from sale to Nepal & UI .................................................................................................. 142

5.16 Revenue from sale of Additional Power ......................................................................................... 143

5.17 Disincentive for non-achievement of T&D loss reduction Targets ................................................... 143

5.18 Resource gap funding received from State Government for FY 2011-12 ........................................ 144

5.19 Aggregate Revenue Requirement of BSEB for FY 2011-12 ........................................................... 145

6 Analysis of Aggregate Revenue Requirement for FY 20 12-13 .......................................................... 147

6.1 Background ................................................................................................................................. 147

6.2 Energy Sales ............................................................................................................................... 147

6.3 Consumption by Un-metered Categories ....................................................................................... 151

6.4 Kutir Jyoti (Rural and Urban) ........................................................................................................ 151

6.5 Domestic - I (Rural) (DS-I) ............................................................................................................ 155

6.6 Domestic Metered (Urban) - DS-II ................................................................................................. 156

6.7 Domestic - DS-III .......................................................................................................................... 157

6.8 Non-Domestic-I – Rural (NDS-I).................................................................................................... 157

6.9 Non-Domestic-II – Urban (NDS-II) ................................................................................................ 158

6.10 Non-Domestic –III (Religious Places) NDS-III ................................................................................ 159

6.11 Industrial LTIS-I & II...................................................................................................................... 159

6.12 Street Lighting (Public Lighting) SS-I, SS-II ................................................................................... 160

6.13 Irrigation and Agriculture Service (IAS-I & II) ................................................................................. 161

6.14 Public Water Works ...................................................................................................................... 162

6.15 HT Industry (HTS-I, HTS-II, HTS-III and HTSS) ............................................................................. 163

6.16 Railway Traction .......................................................................................................................... 164

6.17 Energy sales to Nepal (NEA) ........................................................................................................ 165

6.18 Total Energy Sales, No. of Consumers & Connected Load ............................................................ 165

6.19 Transmission & Distribution Losses (T&D Losses) ......................................................................... 168

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6.20 BSEB’s Own generation ............................................................................................................... 175

6.21 Power Purchase ........................................................................................................................... 180

6.22 Energy Balance............................................................................................................................ 187

6.23 Operation & Maintenance Expenses (O&M) .................................................................................. 189

Employee Expenses ................................................................................................................................. 189

Repair & Maintenance Expenses (R&M) ................................................................................................... 193

Administration & General Expenses (A&G)................................................................................................ 195

Total Operation & Maintenance Cost ......................................................................................................... 196

6.24 Capital Expenditure ...................................................................................................................... 196

6.25 Depreciation ................................................................................................................................ 201

6.26 Interest & Finance Charges .......................................................................................................... 203

6.27 Interest on Working Capital........................................................................................................... 206

6.28 Non-Tariff Income ........................................................................................................................ 207

6.29 Return on Equity .......................................................................................................................... 211

6.30 Revenue from Sale of Power at Existing Tariff for FY 2012-13 ....................................................... 211

6.31 Revenue from sale to Nepal & UI .................................................................................................. 214

6.32 Revenue from sale of Additional Power ......................................................................................... 215

6.33 Resource gap funding for meeting cost of additional power purchase............................................. 216

6.34 Past Recoveries ........................................................................................................................... 217

6.35 Aggregate Revenue Requirement of BSEB for FY 2012-13 ........................................................... 218

6.36 Revenue at Approved Tariff .......................................................................................................... 219

6.37 Revenue Gap at Approved Tariff................................................................................................... 220

6.38 Average Tariff as percentage of Average Cost in Tariff Order for FY 2011-12 & FY 2012-13 ........... 222

7 Government grant/ revenue subsidy ................. ................................................................................ 224

7.1 Background ................................................................................................................................. 224

7.2 BSEB proposal and BERC approach toward Grant/ Revenue Subsidy from State Government in tariff petition .................................................................................................................................... 224

7.3 Clarification on the treatment of State Government Grant/ Revenue Subsidy.................................. 224

7.4 BSEB proposal and BERC approach toward Grant/ Revenue Subsidy from State Government in true-up process .................................................................................................................................... 225

7.5 Treatment of Grant/ Revenue Subsidy from State Government from FY 2012-13 onwards.............. 226

7.6 Mechanism for determination and recovery of Government subsidy support to Agriculture/ Rural consumers .................................................................................................................................... 227

8 Tariff Principles, Design and Tariff Schedule...... .............................................................................. 229

8.1 Background ................................................................................................................................. 229

8.2 Tariff changes proposed by BSEB ................................................................................................ 230

8.3 Changes in existing tariff categories/sub-categories proposed by BSEB ......................................... 231

8.4 Changes in tariff category and tariff schedule approved by the Commission ................................... 236

8.5 Category/Sub-category wise changes proposed by BSEB and approved by the Commission are discussed in respective sections. .............................................................................................................. 251

8.6 Approved tariff categories for FY2012-2013 .................................................................................. 255

8.7 TARIFF SCHEDULE FOR RETAIL TARIFF RATES AND TERMS AND CONDITIONS OF SUPPLY FOR FY 2012-13 .................................................................................................................................... 259

9 Status of Directives issued by the Commission ..... .......................................................................... 296

9.1 General .................................................................................................................................... 296

9.2 Directives issued in Tariff Order of FY 2012-13: Fresh Directives ................................................... 297

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9.3 Directives issued in Tariff Order of FY 2006-07 ............................................................................. 299




10 Generation, Transmission, Wheeling Charges and Open Access Charges ................................... .. 333

10.1 Generation Tariff .......................................................................................................................... 333

10.2 Transmission Tariff ....................................................................................................................... 333

10.3 Wheeling Charges ........................................................................................................................ 333

10.4 Open Access Charges.................................................................................................................. 335

11 Renewable Purchase Obligation ..................... .................................................................................. 340

11.1 Background ................................................................................................................................. 340

11.2 Renewable Purchase Obligations (RPO) ....................................................................................... 340

11.3 Renewable energy Policy ............................................................................................................. 342

11.4 BERC (Renewable Purchase Obligation, its Compliance and REC Framework Implementation) Regulations, 2010 .................................................................................................................................... 343

11.5 Co-generation and Captive Power Policy ...................................................................................... 344

11.6 Renewable Potential .................................................................................................................... 344

11.7 Power purchase by BSEB under Renewable Purchase Obligations (RPO) ..................................... 345

11.8 Bihar Renewable Energy Development Agency (BREDA) .............................................................. 346

12 Annexures.......................................... ................................................................................................ 348

12.1 Annexure – I: State Advisory Committee ....................................................................................... 348

12.2 Annexure - II: List of Participant during the Public hearing. ............................................................ 355

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List of Table

Table 1: Schedule of issue of Public Notice in various newspapers ................................................................... 15 Table 2: List of Objectors ................................................................................................................................ 16 Table 3: Additional list of Objectors .................................................................................................................. 17 Table 4: Schedule for public hearing ................................................................................................................ 19 Table 5: Status of TOD tariff implemented in various states .............................................................................. 46 Table 6: Summary of Category-wise Sales for FY 2010-11 ............................................................................... 66 Table 7: Proposed T&D losses by BSEB for FY 2010-11 .................................................................................. 67 Table 8: Approved T&D Loss for FY 2010-11 ................................................................................................... 68 Table 9: Summary of BTPS Performance proposed by Petitioner for FY 2010-11.............................................. 68 Table 10: Summary of approved Generation performance for FY 2010-11 ........................................................ 69 Table 11: Source-wise Power Purchase Quantum for FY 2010-11 (MUs).......................................................... 70 Table 12: Proposed Energy Requirement & Energy balance for FY 2010-11 ..................................................... 71 Table 13: Approved Energy Requirement for FY 2010-11 ................................................................................. 72 Table 14: Proposed Plant parameters & Fuel cost determinants for BTPS ........................................................ 73 Table 15: Approved plant parameters & fuel cost determinants for FY 2010-11 ................................................. 75 Table 16: Proposed Power Purchase cost for FY 2010-11 ................................................................................ 76 Table 17: Trued-up Power Purchase Cost for FY 2010-11 (Rs. Cr.) .................................................................. 77 Table 18: Disincentive: Non-achievement of T&D loss reduction target for FY 2010-11 ..................................... 78 Table 19: Employee Cost approved for FY 2010-11 (Rs Cr.) ............................................................................ 80 Table 20: Summary of approved R&M cost (Rs. Cr.) ........................................................................................ 81 Table 21: Summary of approved A&G cost (Rs. Cr.) ........................................................................................ 82 Table 22: Summary of approved O&M expenses for FY 2010-11 (Rs. Cr.) ........................................................ 83 Table 23: Details of capitalisation during FY 2010-11 (Rs. Lakh) ...................................................................... 84 Table 24: Estimation of CWIP (Rs. Cr.) ............................................................................................................ 84 Table 25: Estimated Capital expenditure (Rs. Cr.) – FY 2010-11 ...................................................................... 84 Table 26: Asset added during FY 2010-11 in plant & machinery & Line & Cable N/W ........................................ 85 Table 27: Gross Fixed Assets (Rs. Cr.) – FY 2010-11 ...................................................................................... 86 Table 28: Approved Depreciation (Rs. Cr.) for FY 2010-11 ............................................................................... 86 Table 29: Interest & Financial Charges as per the petition for FY 2010-11 (Rs. Cr.)........................................... 87 Table 30: Estimation of loan against assets getting capitalized during FY 2010-11 (Rs. Cr) ............................... 91 Table 31: Computation of effective Rate of Interest for FY 2010-11 (Rs. Cr.) ..................................................... 91 Table 32: Approved Interest and finance charges for FY 2010-11 (Rs. Cr.) ....................................................... 92 Table 33: Proposed Interest on working capital for FY 2010-11 (Rs. Cr.) .......................................................... 92 Table 34: Summary of approved Interest on working capital (Rs. Cr.) ............................................................... 94 Table 35: Prior Period Credits / (Charges) for the FY 2010-11 (Rs. Cr.) ............................................................ 96 Table 36: Proposed Non-Tariff Income (Rs Cr.) for FY 2010-11 ........................................................................ 97 Table 37: Funding of DPS (Rs. Cr.) ................................................................................................................. 98 Table 38: Trued-up Non-Tariff Income approved (Rs. Cr.) ................................................................................ 99 Table 39: Non-Tariff Income (Rs. Cr.) .............................................................................................................. 99 Table 40; Details of FPPCA order issued by Commission during FY 2010-11 ................................................. 102 Table 41: Revenue through FPPCA (Rs. Cr.) ................................................................................................. 102 Table 42: Summary of Trued up ARR and Revenue gap for FY 2010-11 (Rs Cr.)............................................ 106 Table 43: Summary of the Carrying cost permitted (Rs Cr.) ............................................................................ 108 Table 44: Summary of revised Category-wise Sales (MUs) projected by BSEB for FY 2011-12 for BSEB ........ 109 Table 45: Proposed T&D losses as revised estimates for FY 2011-12 ............................................................ 111 Table 46: Approved T&D Loss for FY 2011-12 ............................................................................................... 112 Table 47 : Current Status of different units of BTPS ....................................................................................... 112 Table 48: Proposed Plant parameters & Fuel cost determinants for BTPS ...................................................... 113 Table 49: Fuel cost trend submitted by BSEB ................................................................................................ 115 Table 50: Approved Plant parameters of BTPS & fuel cost determinants for FY 2011-12 ................................. 115 Table 51: Power Purchase Cost Projected by the Petitioner for FY 2011-12 (RE) ............................................ 116 Table 52: Approved revised estimates of Power Purchase Cost for FY 2011-12 (RE) ...................................... 117 Table 53: Proposed Energy Requirement & Energy Balance .......................................................................... 119 Table 54: Approved Energy Requirement for FY 2011-12 (RE) ....................................................................... 120 Table 55: Employees Cost Proposed for FY 2011-12 (RE) (Rs Cr) ................................................................. 121 Table 56: Approved revised estimates of employee Cost for FY 2011-12 (RE) (Rs. Cr.) .................................. 122 Table 57: Function-wise employee Cost approved for FY 2011-12 (RE) (Rs Cr.) ............................................ 123 Table 58: R&M costs submitted by Petitioner for FY 2011-12 (RE) (Rs Cr) ..................................................... 123 Table 59: Approved revised estimates of R&M Cost for FY 2011-12 (RE) (Rs. Cr.) ......................................... 124 Table 60: Function-wise approved R&M costs for FY 2011-12 (RE) (Rs Cr) .................................................... 124 Table 61: A&G costs submitted by Petitioner for FY 2011-12 (Rs Cr) .............................................................. 125 Table 62: Function-wise approved revised estimates of A&G costs for FY 2011-12 (RE) (Rs. Cr) .................... 125 Table 63: Approved revised estimates of A&G Cost for FY 2011-12 (Rs. Cr.) .................................................. 125

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Table 64: Approved revised estimates of O&M Cost for FY 2011-12 (Rs. Cr.) ................................................. 126 Table 65: Planned Capital Expenditure proposed by BSEB for FY 2011-12..................................................... 127 Table 66: Funding details proposed by BSEB for FY 2011-12 (RE) ................................................................. 128 Table 67: Funding pattern considered by Commission during FY 2011-12 (Rs. Cr.) (RE) ................................ 129 Table 68: Capitalization schedule for proposed capital expenditure ................................................................ 129 Table 69: Capitalization schedule for CWIP ................................................................................................... 129 Table 70: Approved GFA by Commission FY 2011-12 (RE) ............................................................................ 130 Table 71: Approved GFA (Rs. Cr.) by Commission FY 2011-12 (RE) .............................................................. 130 Table 72: Revised estimate of Depreciation charges proposed by BSEB FY 2011-12 (RE).............................. 130 Table 73: Function wise revised Depreciation approved for FY 2011-12 (RE) (Rs Cr)...................................... 131 Table 74: Approved revised estimate of Depreciation (Rs. Cr.) charges for FY 2011-12 (RE) .......................... 131 Table 75: Proposed Interest & Financial Charges for FY 2011-12 (RE) ........................................................... 132 Table 76: Approved revised estimate of Interest & Finance Charges for FY 2011-12 (RE) (Rs Cr) ................... 134 Table 77: Approved revised estimate for Interest & Financial Charges for FY 2011-12 (RE) ............................ 135 Table 78: Methodology adopted by BSEB for calculation of Working Capital ................................................... 135 Table 79: Proposed revised estimates of Interest on Working Capital for FY 2011-12 (RE) (Rs Cr) .................. 135 Table 80: Approved function wise Revised estimate of Interest on Working Capital for FY 2011-12 (RE) (Rs Cr) .................................................................................................................................................................... 136 Table 81: Approved revised estimate of interest on working capital for FY 2011-12 (RE) (Rs. Cr.) ................... 136 Table 82: Break-up of proposed non-tariff income for FY 2011-12 (RE) (Rs. Cr.)............................................. 137 Table 83: Funding of DPS (Rs. Cr.) ............................................................................................................... 139 Table 84: Approved revised estimate of Non-Tariff Income FY 2011-12 (RE) (Rs. Cr.) .................................... 139 Table 85: Approved revised estimate of revenue through sale of power for FY 2011-12 (RE) .......................... 141 Table 86: Additional Revenue for the FY 2011-12 (RE) .................................................................................. 143 Table 87: Disincentive for non-achievement of T&D loss reduction target for FY 2009-10 ................................ 144 Table 88: Details of Resource gap funding from State Government (Rs. Cr.) .................................................. 144 Table 89: details of State Government revenue gap support (Rs. Cr.) ............................................................. 145 Table 90: Aggregate Revenue Requirement for the FY 2011-12 ..................................................................... 146 Table 91: Historical Trend in category-wise units sold (MUs) .......................................................................... 149 Table 92: Category-wise growth rates of sales ............................................................................................... 149 Table 93: Category-wise no. of consumers .................................................................................................... 149 Table 94: Category-wise growth rates of no. of Consumers ............................................................................ 150 Table 95: Category-wise connected load ....................................................................................................... 150 Table 96: Category‐wise growth rates of connected load ................................................................................ 151 Table 97: BPL consumption norms in other states ......................................................................................... 152 Table 98: Approved Kutir Jyoti Consumption for FY 2012-13 .......................................................................... 155 Table 99: Projected no. of consumers, connected load and energy sale - BSEB ............................................. 165 Table 100: Projected no. of consumers, connected load and energy sale – Premium tariff Area ...................... 166 Table 101: Projected no. of consumers, connected load & energy sale – Rest of Bihar .................................. 166 Table 102: Approved no. of consumers, connected load & energy sales of BSEB for FY 2012-13 ................... 168 Table 103: Trend of No. of Consumer, connected load, unit and amount billed................................................ 170 Table 104: T&D Losses of BSEB for previous years and projections ............................................................... 172 Table 105: T&D loss target Vs. Achievement by BSEB ................................................................................... 172 Table 106 : Current Status of different units of BTPS ..................................................................................... 175 Table 107: Proposed Plant parameters & Fuel cost determinants for BTPS .................................................... 176 Table 108: Month wise projected power generation from BTPS for FY 2012-13 .............................................. 177 Table 109: Fuel cost trend submitted by BSEB .............................................................................................. 177 Table 110: Approved Plant parameters of BTPS & fuel cost determinants for FY 2012-13 ............................... 179 Table 111: Power Purchase Cost Projected by the Petitioner for FY 2012-13 .................................................. 180 Table 112: Executed PPA with developer for power based on renewable energy ............................................ 182 Table 113: Proposals received for setting-up renewable energy plants ........................................................... 183 Table 114: Approved Power Purchase Cost for FY 2012-13 ........................................................................... 186 Table 115: Proposed Energy Requirement & Energy Balance ........................................................................ 187 Table 116: Approved Energy Requirement for FY 2012-13 (in MU) ................................................................. 188 Table 117: Employees Cost Proposed for FY 2012-13 (Rs Cr) ....................................................................... 191 Table 118: Function-wise employee Cost approved for FY 2012-13 (Rs Cr.) ................................................... 193 Table 119: R&M costs submitted by Petitioner for FY 2012-13 (Rs Cr)............................................................ 194 Table 120: Function-wise approved R&M costs for FY 2012-13 (Rs Cr) .......................................................... 194 Table 121: A&G costs submitted by Petitioner for FY 2012-13 (Rs Cr ............................................................. 195 Table 122: Function-wise approved A&G costs for FY 2012-13 (Rs Cr) .......................................................... 196 Table 123: Function-wise approved O&M costs for FY 2012-13 (Rs Cr) .......................................................... 196 Table 124: Planned Capital Expenditure proposed by BSEB for FY 2012-13................................................... 197 Table 125: Details of loan received with sanction letter ................................................................................... 198 Table 126: Funding details proposed by BSEB for FY 2012-13)...................................................................... 199 Table 127: Funding pattern considered by Commission for FY 2012-13 .......................................................... 200 Table 128: Capitalization schedule for proposed capital expenditure .............................................................. 200 Table 129: Capitalization schedule for CWIP ................................................................................................. 201 Table 130: Approved GFA by Commission FY 2012-13 (Rs. Cr.) .................................................................... 201

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Table 131: Depreciation charges proposed by BSEB (Rs. Cr.) ....................................................................... 202 Table 132: Function wise Depreciation approved for FY 2012-13 (Rs Cr)........................................................ 203 Table 133: Proposed Interest & Financial Charges for FY 2012-13 ................................................................. 204 Table 134: Approved revised estimate of Interest & Finance Charges for FY 2012-13 (Rs Cr) ......................... 205 Table 135: Approved revised estimate for Interest & Financial Charges for FY 2012-13 .................................. 206 Table 136: Methodology adopted by BSEB for calculation of Working Capital ................................................. 206 Table 137: Proposed Interest on Working Capital for FY 2012-13 (Rs Cr) ....................................................... 207 Table 138: Approved Interest on Working Capital for FY 2012-13 (Rs Cr) ....................................................... 207 Table 139: Break-up of proposed non-tariff income for FY 2012-13 (Rs.Cr.).................................................... 208 Table 140: Funding of DPS (Rs. Cr.) ............................................................................................................. 209 Table 141: Approved Non-Tariff Income for FY 2012-13 (Rs. Cr.) ................................................................... 210 Table 142: Revenue Projected for Premium tariff area, RoB and BSEB at existing tariff .................................. 211 Table 143: Revenue assessed for BSEB at existing tariff by Commission ....................................................... 213 Table 144: Additional Revenue for the FY 2012-13 ........................................................................................ 216 Table 145; Approved cost of additional power purchase through resource gap for FY 2012-13 ........................ 217 Table 146: Approved Revenue Gap/Surplus for FY 2006-07 to FY 2011-12 (Rs. Cr.) ...................................... 217 Table 147: Aggregate Revenue Requirement for the FY 2012-13 at existing tariff (Rs. Cr.) ............................. 218 Table 148: Function-wise breakup of ARR approved by Commission for FY 2012-13 (Rs. Cr.) ........................ 219 Table 149: Revenue from Sale of energy at Approved Tariff for FY 2012-13 ................................................... 219 Table 150: Revenue Gap at Approved Tariff for FY 2012-13 (Rs. Cr.) ............................................................. 220 Table 151: Revenue Gap at Approved Tariff for FY 2011-12 (Rs. Cr.) ............................................................. 221 Table 152: Cross-Subsidy in FY 2011-12 & FY 2012-13 ................................................................................. 222 Table 153: Details of Resource gap grant received from State Government .................................................... 224 Table 154: Subsidised categories in Tariff Order for FY 2012-13 .................................................................... 227 Table 155: Subsidy receivable from State Government for FY 2012-13........................................................... 228 Table 156: Generation Tariff Net generation (MUs) ........................................................................................ 333 Table 157: Transmission Tariff (in Paise/kWh) ............................................................................................... 333 Table 158: Wheeling charges at 33 kV Voltage Level ..................................................................................... 334 Table 159: Wheeling charges for 11 kV Voltage Level .................................................................................... 334 Table 160 : Phase Category of Consumers Open Access to be allowed from .................................................. 335 Table 161: Transmission Charge ................................................................................................................... 336 Table 162: Open Access Charges ................................................................................................................. 336 Table 163: Renewable Purchase obligation for BSEB .................................................................................... 344 Table 164: Co-generation Plants in Bihar ....................................................................................................... 344 Table 165: Technology wise potential & installed capacity in Bihar ................................................................. 344 Table 166: Details of Power Purchase from Renewable Source (MU) by BSEB .............................................. 345 Table 167: Members present during the SAC meeting.................................................................................... 348

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List of Abbreviations

A&G Administration and General

ABT Availability Based Tariff

Act Electricity Act, 2003 AG Auditor General ARR Aggregate Revenue Requirement

BERC Bihar Electricity Regulatory Commission BHEL Bharat Heavy Electrical Limited BHPC Bihar State Hydro Power Station BIFR Bureau of Industrial and Financial Reconstruction

BSEB Bihar State Electricity Board BTPS Barauni Thermal Power Station CAGR Compounded Annual Growth Rate CAPEX Capital Expenditure

CEA Central Electricity Authority CERC Central Electricity Regulatory Commission CGS Central Generating Station Ckt km Circuit kilometres

CMD Contract Minimum Demand CPSU Central Public Sector Undertaking D/C Double Circuit DPS Delayed Payment Surcharge

DS Domestic Service DSM Demand Side Management DT Distribution Transformer EA 2003 Electricity Act, 2003

ERLDC Eastern Region Load Despatch Centre ERPC Eastern Region Power Committee FC Fixed charges FPPCA Fuel and Power Purchase Cost Adjustment

FY Financial Year GFA Gross Fixed Asset GFA Gross Fixed Asset HP Horse Power

HT High Tension HTSS High Tension Specified Service KBUNL Kanti Bijlee Utapadan Nigam Limited kCal Kilo Calorie

KJ Kutir Jyoti KL Kilo Litre kVA Kilo Volt Ampere kVAh Kilo Volt Ampere Hour

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kWh Kilo Watt hour LT Low Tension

ml Millilitre MMC Monthly Minimum Charge MoP Ministry of Power MT Million Tonne

MUs Million Units MVA Mega Volt Ampere MW Mega Watt MYT Multi-Year Tariff

NDS Non Domestic Service NEP National Electricity Policy NFA Net Fixed Asset NHPC National Hydro Power Corporation

NTPC National Thermal Power Corporation O&M Operation and Maintenance O/H Over Head PGCIL Power Grid Corporation of India Limited

PLF Plant Load Factor PWW Public Water Works R&M Repair and Maintenance RE Revised Estimates

REA Regional Energy Accounting RGGVY Rajiv Gandhi Grameen Vidyutikaran Yojna RLDC Regional Load Despatch Centre RoE Return on Equity

S/C Single Circuit SAC State Advisory Committee SERC State Electricity Regulatory Commission SS Sub-station

ToD Time of Day TP Tariff Policy TPS Thermal Power Station UI Unscheduled Interchange

ULF Utilization Load Factor USO Universal Service Obligation

BERC TARIFF ORDER FOR FY 2012-13

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Bihar Electricity Regulatory Commission Ground Floor, Vidyut Bhawan – II

Jawahar Lal Nehru Marg, Patna – 800 021

Case No. TP - 02 of 2011

In the matter of:

Determination of Aggregate Revenue Requirement (ARR) and Retail Tariff for the Financial

Year 2012-13 for supply of electricity to consumers in the State of Bihar by the Bihar State

Electricity Board.

And

Bihar State Electricity Board ………………………………..…… Petitioner

Present:

U.N. Panjiar

S.C. Jha

– Chairman

– Member

ORDER (Passed on 30 th Day of March, 2012)

In exercise of the powers vested to Bihar Electricity Regulatory Commission under section

62(1)(d) read with Section 62(3) and Section 64 (3)(a) of the Electricity Act, 2003 and Bihar

Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff)

Regulations 2007 (hereinafter referred to as 'Tariff Regulations') and other enabling

provisions in this behalf, the Commission issues this order, truing up of the Aggregate

Revenue Requirement (ARR) and revenue for financial year (FY) 2010-11, Reviewing of

ARR and revenue for FY 2011-12 and determining the Aggregate Revenue Requirement



(ARR) and the Retail Tariff for the Financial Year 2012-13 for supply of electricity by the

Bihar State Electricity Board to the consumers in the state of Bihar. Tariff Regulations

specify that the Distribution Licensee shall file Aggregate Revenue Requirement (ARR) and

the Tariff Petition complete in all respect along with requisite fee as prescribed in the

Commission’s Fees, Fines and charges, Regulation on or before 15th November of the

preceding year. Accordingly the Licensee BSEB filed the ARR and Tariff Petition for the

financial year 2012-13 along with the petitions for review of ARR for FY 2011-12 on 15th

November, 2011 and subsequently BSEB filed petition for truing up of ARR and revenue for

financial year 2010-11 .

Regulation 22 of the Tariff Regulations, 2007 provides that the Commission shall undertake

a review along with next Tariff Order, of the expenses and revenue approved by the

Commission in the current year's Tariff Order. After audited accounts of the year are made

available, the Commission shall undertake a similar exercise based on the final actual

figures as per the audited accounts. Accordingly BSEB along with petition for determination

of ARR and retail tariff for FY 2012-13, has also submitted petitions for truing up of ARR and

revenue for FY 2010-11 based on the audited annual accounts for the year and for review of

the ARR for FY 2011-12.

As per Regulation 6(5) of the Tariff Regulation and for providing adequate opportunities to all

stakeholders and general public for making suggestions/objections on the tariff petition as

mandated under section 64(3) of the Electricity Act, 2003, the Commission directed BSEB

vide letter dated 28th November 2011 to publish the ARR and tariff petition for FY 2012-13 in

abridged form as public notice in newspapers having wide circulation in the State inviting

suggestions/objections on the tariff petition. The tariff petition was also placed on the BSEB's

website. Accordingly BSEB published the tariff petition in the abridged form as public notice

in various newspapers. The last date of submission of suggestions/objections was initially

fixed as 6th January, 2012 which was later on extended to 20th January, 2012 on the

request of some of the consumers/consumer associations.

The Commission, to ensure transparency in the process of tariff determination and for

providing proper opportunity to all stakeholders and general public for making

suggestions/objections on the tariff petition and for convenience of the consumers and

general public across the state, the Commission decided to hold the public hearing at all the

divisional headquarters of the state and accordingly the Commission held public hearing at

Darbhanga on 15th February 2012, Bhagalpur on 23rd February 2012, Purnea on 24th

February 2012, Gaya on 27th February 2012, Muzaffapur on 13th March 2012 and Patna on

14th & 19th March 2012.



The tariff proposal was also placed before the State Advisory Committee on 23rd December,

2011 and the various aspects were discussed by the Committee. The Commission took the

advice of the State Advisory Committee on the ARR and tariff petition of BSEB for FY 2012-

13 during the meeting of the Committee.

The Commission took into consideration the facts presented by the BSEB in its tariff petition

and subsequent various filings, the suggestions/objections received from stakeholders,

consumer organizations, general public and State Advisory Committee and response of the

Bihar State Electricity Board to those suggestions/objections.

The Commission taking into consideration all the facts which came up during the public

hearing and meeting of the State Advisory Committee has trued up the ARR and revenue for

FY 2010-11, reviewed the ARR and revenue for FY 2011-12 and determined the ARR and

retail tariff of the BSEB for FY 2012-13.

The true up of ARR and revenue for FY 2010-11 has indicated a surplus of Rs. 639.93

crores. The review of ARR and revenue for FY 2011-12 has given a surplus of Rs. 674.63

crores. Earlier true up for FY 2006-07, 2007-08, 2008-09 and 2009-10 had indicated a

cumulative gap of Rs. 491.87 crores.

The State Government has been giving resource gap grant to BSEB which has been used

for reducing the revenue gap of BSEB. This treatment of resource gap has the effect of

reducing the average tariff of all categories of consumers across the state till FY 2011-12.

The State Government vide letter No. 4208 dated 19th September, 2011 has clarified that

the resource gap grant being provided to the BSEB is meant for first compensating BSEB for

the financial loss incurred by BSEB on account of additional power purchase due to

difference in the actual T&D loss and the T&D losses as approved by the Commission and

the balance amount of resource gap grant will be used to subsidise the agricultural and rural

consumers. The resource gap grant estimated to be received during FY 2012-13 has been

used to first compensate BSEB for the financial losses caused to BSEB on account of

additional power purchase due to difference in the actual T&D losses and the T&D losses

approved by the Commission and the remaining portion of the grant has been used to

subsidise the agriculture and rural consumers. As a result of government subsidy, the tariff

rate of Agriculture, Kutir Jyoti, and other rural consumers has been retained at the level of

2011-12 and no increase has been approved.

The BSEB in its tariff petition for FY 2012-13 has proposed 10% premium on demand/fixed

and energy charge and in MMC for LT consumers except Kutir Jyoti and Agriculture and



HTS-I consumers for the PESU Area, Rajgir Area and Bodh Gaya Area in which BSEB

intends to supply continuous power at least for 600 hours in a month excluding the duration

of grid failure, plant failure of power supplier, any force majeure condition, scheduled shut

down, emergent breakdown and restriction of power supply by the Commission under

Section 23 of the Electricity Act, 2003. The Commission feels that the Distribution Licensee

cannot differentiate in making electric supply available to different areas. As per provisions of

the Act, there should be equitable distribution of available energy in different areas. So the

Commission directs the Board for equitable distribution of energy in different areas of the

State as far as possible. However, if the Board supplies or intends to supply power

continuously to some areas including Patna, this should not be done at the cost of supply to

other areas. BSEB can charge premium over the normal tariff from consumers of such areas

getting nearly 24 hours of supply from 33kV or 11 kV feeders to HTS-I and all LT consumers

except Kutir Jyoti and Agricultural consumers. The continuous supply shall mean the normal

supply for nearly 24 hours excluding the grid failure, any force majeure condition, scheduled

shut down and emergent breakdown beyond the control of BSEB. The Commission has

accordingly allowed 10% premium on fixed and energy charge and in MMC in tariff rate of

HTS- consumers and all LT consumers and 11 kV consumers except Kutir Jyoti and

Agricultural Consumers. The Board has to notify such areas after strengthening the

infrastructure required to ensure close to 24 hour supply to the notified areas. Strengthening

of infrastructure may include interalia strengthening/replacement of weak conductors,

transformers and other electrical equipments installed for supplying electricity to the notified

areas, provision of appliances and spares and keeping technical teams ready round the

clock for rectifying defects leading to disruption of supply in these areas. A few Telephones

should be kept operational for each notified area which should be manned round the clock

for receiving and responding to the complaints. These telephone numbers should be widely

publicised in the newspapers for the information of the general public. BSEB must ensure

these steps for ensuring close to 24 hours supply of electricity to the notified areas before

charging premium tariff.

BSEB in this tariff petition has proposed Transmission and Distribution loss of 42% for the

FY 2011-12 and 41% loss for FY 2012-13. The Commission has allowed the T&D losses at

29% for FY 2011-12 and 27.5% for FY 2012-13 as per approved trajectory. The financial

loss caused to BSEB due to the difference between the actual T&D loss as stated by the

Board and T&D losses approved by the Commission has been compensated from the

resource gap grant provided by the State Government.



The Commission has made Time of Day (TOD) tariff mandatory for consumers with contract

demand of 200KVA and above in the tariff order for FY 2011-12 which provides incentive for

consumption in off peak hours and disincentive for consumption of power in peak hours. The

Commission has considered this provision proper for demand side management and so this

provision has been retained in this tariff order also. For other HT consumers ToD Tariff has

been made optional.

The Commission has approved a new provision for Tatkal Connection on payment of

application fee and supervision, labour and establishment charge for service connection at

double the normal rate. Under the scheme a consumer may apply for new connection on

Tatkal basis and BSEB will provide Tatkal connection within half the period specified for

normal connection. If BSEB is not able to provide connection within the specified period then

the additional fee paid by the consumer will be refunded in the first energy bill.

The Commission has also allowed partial payment of energy bill as an option available to the

consumers.

The BSEB in its tariff petition has proposed various changes in the terms and conditions of

supply which the Commission has properly scrutinized and has considered

suggestions/objections of the stakeholders, consumers and general public and has

accordingly specified the terms and conditions of supply in this Tariff Order.

The Board has proposed to withdraw the facility of ten (10) days grace period after due date

of payment without any Delayed Payment Surcharge (DPS). The Commission considering

the suggestions of the consumers as well as State Advisory Committee, has retained the

provision of ten days grace period after due date of payment without levy of any Delayed

Payment Surcharge.

In the Tariff Order for FY 2011-12, the Commission had indicated the desirability of phasing

out the Monthly Minimum Charge (MMC). As a first step MMC was replaced by Annual

Minimum Guarantee (AMG) for HT consumers. Since the revenue from MMC/AMG from HT

consumers is only about 0.5% of the total revenue of the Board and metering/billings of the

HT consumers are monitored more closely because of their limited numbers, the

Commission has done away with the provision of MMC/AMG for HT consumers. Phasing out

of MMC/AMG for other categories of consumers will be considered gradually.

To encourage the consumers to avail power under ‘Open Access’ from other sources, the

Commission has reduced the cross subsidy surcharge by about 50% (fifty percent) in its

Tariff Order for FY 2011-12 which the Commission has retained during 2012-13 also.



As a result, the consumers have to pay cross subsidy surcharge at the rate of about 50% of

the rate approved in Tariff Policy 2006.

The provision of charging Fuel and Power Purchase Cost Adjustment (FPPCA) with the

approval of the Commission on a monthly basis which was introduced in the Tariff Order for

FY 2011-12 has been retained. FPPCA has been made applicable to all categories of

consumers without any exception. However, FPPCA levied on Kutir Jyoti and Agriculture

(Private) consumers will be subsidized with the subsidy available from State Government.

This order is in 12 chapters which also include True up for FY 2010-11, Review for 2011-12

and detailed analysis of the Aggregate Revenue Requirement (ARR) and approved Retail

Tariff Rates for the financial year 2012-13.

The ARR after incorporating surplus from previous years is Rs. 4747.22 crores. The revenue

gap at existing tariff as determined by the Commission is Rs. 1676.60 crores. To avoid sharp

increase in tariff rates, the Commission has approved a moderate increase of 12% in

average tariff which will fetch an additional revenue of Rs. 348.06 crores. The existing

average tariff is Rs.4.06 per unit which has now been increased to Rs. 4.55 per unit.

Considering the sale of intra-state revenue at approved tariff and sale outside the state,

revenue gap comes to Rs. 841.17 crores. Resource gap grant of Rs. 683.90 crore has been

used to subsidise Kutir Jyoti, Agriculture and other rural consumers to bring down their tariff

to the level of financial year 2011-12. As a result, the revenue gap at approved tariff has

come down to Rs. 157.26 crores. In order to avoid further increase in tariff, the revenue gap

of Rs. 157.26 crores is being approved as regulatory asset which will be recovered along

with carrying cost in the subsequent financial years after true up for FY 2011-12 and review

of the ARR for FY 2012-13 along with determination of ARR and retail tariff for FY 2013-14.

With a view to enforce quality, efficiency, transparency and accountability in the operation of

BSEB in this Order the Commission has issued fresh directives to BSEB for strengthening

the consumer complaint redressal mechanism, circle-wise fixing and monitoring of loss

trajectory, determining category-wise and voltage-wise T&D loss and cost of supply,

preparation of separate business plan for generation, transmission and distribution functions

and submitting multi year tariff petition for generation, transmission and distribution for a

period of 3 years starting from FY 2013-14.

This order shall be effective w.e.f. 1st April 2012. The Bihar State Electricity Board should

ensure implementation of the order from the effective date after issuance of a Public Notice,

in such a font size which is clearly visible, in two daily newspaper having wide circulation in

the various parts of state within a week and compliance of the same shall be submitted to

the Commission by the BSEB.



This order shall remain in force till 31st March, 2013 or till the next tariff order of the

Commission.

This order will be placed on the website of the Commission and a copy will be sent to BSEB,

Department of Energy, Government of Bihar, Central Electricity Regulatory Commission and

all State/Joint Electricity Regulatory Commissions.

(S. C. Jha) (U. N. Panjiar) Member Chairman

USER

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Sd/-

USER

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1 Introduction

1.1 Bihar Electricity Regulatory Commission

1.1.1 The Bihar Electricity Regulatory Commission (hereinafter referred to as

“Commission” or “BERC”) was constituted by the Government of Bihar under Section

17 of the Electricity Regulatory Commission Act, 1998 vide Government of Bihar

notification No.1284 dated 15th April 2002. The Electricity Regulatory Commission

Act, 1998 along with Indian Electricity Act, 1910 and Electricity (Supply) Act, 1948

was repealed by Section 185 (1) of the Electricity Act, 2003 (hereinafter referred to

as the “Act”). The first proviso of Section 82 (1) has ensured continuity of the Bihar

Electricity Regulatory Commission by laying down that the State Electricity

Regulatory Commission established by the State Government under Section 17 of

Electricity Regulatory Commission Act, 1998 and functioning as such, immediately

before the appointed date, shall be the State Electricity Regulatory Commission for

the purpose of the Act.

1.2 Functions of BERC

1.2.1 As per Section 86 of the Electricity Act 2003, the State Commission shall discharge

the following functions, namely

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

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

Provided that where open access has been permitted to a category of

consumers under section 42, the State Commission shall determine only the

wheeling charges and surcharge thereon, if any, for the said category of

consumers;

b) regulate electricity purchase and procurement process of distribution licensees

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

companies or licensees or from other sources through agreements for purchase

of power for distribution and supply within the State;

c) facilitate intra-state transmission and wheeling of electricity;



d) issue licences to persons seeking to act as transmission licensees, distribution

licensees and electricity traders with respect to their operations within the State;

e) promote co-generation and generation of electricity from renewable sources of

energy by providing suitable measures for connectivity with the grid and sale of

electricity to any person, and also specify, for purchase of electricity from such

sources, a percentage of the total consumption of electricity in the area of a

distribution licence;

f) adjudicate upon the disputes between the licensees, and generating companies

and to refer any dispute for arbitration;

g) levy fee for the purposes of this Act;

h) specify State Grid Code consistent with the Indian Electricity Grid Code

specified with regard to grid standards;

i) specify or enforce standards with respect to quality, continuity and reliability of

service by licensees;

j) fix the trading margin in the intra-state trading of electricity, if considered,

necessary; and

k) discharge such other functions as may be assigned to it under this Act.

1.2.2 The State Commission shall advise the State Government on all or any of the

following matters, namely

a) promotion of competition, efficiency and economy in activities of the electricity

industry;

b) promotion of investment in electricity industry;

c) reorganization and restructuring of electricity industry in the State;

d) matters concerning generation, transmission, distribution and trading of

electricity or any other matter referred to the State Commission by State

Government.

1.3 Bihar State Electricity Board

1.3.1 Bihar State Electricity Board (hereinafter referred to as “Board” or “BSEB”) is a

statutory body constituted on1st April 1958 under Section 5 of the Electricity (Supply)

Act, 1948 and has been engaged in electricity generation, transmission, distribution

of electricity and related activities in the State of Bihar.

1.3.2 In exercise of the power conferred by the proviso of 172(a) of the Electricity Act,

2003, the Govt. of Bihar has allowed BSEB to continue to function as State

Transmission Utility and a Licensee for Distribution of Power till 31.12.2011.



1.3.3 Presently, the Board is thus functioning as deemed State Transmission Utility (STU)

and a Distribution Licensee. This Aggregate Revenue Requirement & tariff petition

for FY 2012-13 has been submitted by the State Transmission Utility and the

Distribution Licensee.

1.4 Chronology of the filing of tariff petitions an d Issue of Tariff Orders

1.4.1 The BSEB had submitted its first Aggregate Revenue Requirement (hereinafter

referred to as “ARR”) and tariff petition for the FY 2006-07 on 10th April, 2006. The

Commission passed the Tariff Order on that petition on 29th November, 2006.

1.4.2 The BSEB submitted its ARR and tariff petition for FY 2007-08 on 18th December,

2007. As the tariff petition for FY 2007-08 was filed very late, the Commission vide

letter no. BERC.Tariff-9/07-03 dated 2nd January 2008 directed the BSEB to file the

ARR and tariff petition for FY 2008-09 along with data as specified by the

Commission in the BERC (Terms and conditions for determination of Tariff)

Regulations, 2007 by 31st January 2008.

1.4.3 The BSEB submitted its ARR and tariff petition for FY 2008-09 on 14th February,

2008. The Tariff Order for FY 2008-09 was passed by the Commission on 26th

August, 2008. The Commission also undertook the “Review” of ARR for FY 2006-07

along with Tariff Order for FY 2008-09.

1.4.4 The BSEB filed on 9th October 2009 petition for determination of ARR and approval

of retail tariff for FY 2009-10. However, due to delay in filing of the ARR/ tariff petition

for FY 2009-10, the Commission directed the BSEB to file the ARR and tariff petition

for the FY 2010-11. In view of the same, there was no approval of the ARR for FY

2009-10.

1.4.5 The BSEB submitted its ARR and tariff petition for FY 2010-11 before the

Commission on 3rd February, 2010. The Commission passed the Tariff Order for FY

2010-11 on 6th December, 2010. The Commission also undertook the “Review” of

ARR FY 2008-09 along with the Tariff Order for FY 2010-11.

1.4.6 The BSEB submitted its ARR and tariff petition for FY 2011-12 before the

Commission on 17th February, 2011. The Commission passed the Tariff Order for

FY 2011-12 on 1st June, 2011 effective from 1st May 2011.

1.4.7 The True-up petition for FY 2006-07, FY 2007-08 and FY 2008-09, based on the

audited annual accounts of BSEB, was filed by the BSEB on 01st September 2011.



The addendum to this True-up petition was filed by BSEB on 17th October 2011. The

Commission passed its first truing up order for FY 2006-07, FY 2007-08 and FY

2008-09 on 4th January 2012.

1.4.8 Subsequently, the BSEB filed the True-up petition for FY 2009-10 on 13th October,

2011. The truing up order for FY 2009-10 was issued by the Commission on 27th

January 2012.

1.4.9 BSEB also submitted a petition on 13th October, 2011 vide letter no. Com/ FPPCA-

136/2011-1659 for the review of ARR for FY 2010-11 based on their provisional

annual accounts. The Commission vide its Order dated 3rd November, 2011 directed

BSEB to submit its petition for review of the expenses and revenues for the FY 2010-

11 along with tariff petition for FY 2012-13. Commission also directed BSEB that, if

the final audited accounts for the FY 2010-11 are made available to the Commission

along with or during the hearing of tariff petition for FY 2012-13, a final true up of the

expenses and revenues for the FY 2010-11 shall be considered by the Commission.

1.4.10 The Board filed its ARR and tariff petition for FY 2012-13 on 15th November 2011. In

this petition the Board has also carried out review exercise for FY 2011-12 projecting

the revised estimates for FY 2011-12 based on the provisional annual accounts of

BSEB for FY 2010-11. A Supplementary petition for determination of ARR & retail

tariff petition for FY 2012-13 was subsequently filled by the Board vide letter No.

Com/ Tariff-152/ 2011-(Part-I) -017 on 2nd January 2012.

1.4.11 Further, BSEB vide letter No. Com/ Tar-132/ 2011-392 dated 2nd March, 2012

submitted the audited annual accounts for FY 2010-11 along with the audit certificate

issued by CAG to the Commission. Subsequently, BSEB vide letter No. Com/ Tar-

132/ 2011-451 dated 16th March, 2012 submitted the true-up petition of BSEB for FY

2010-11 based on the audited annual accounts for FY 2010-11.

1.4.12 The purpose of this order is to true up the ARR and revenue for FY 2010-11, review

expenses and revenue for FY 2011-12 and approve ARR and retail tariff for FY 2012-

13.

1.5 Scope of the Order

1.5.1 In the absence of audited accounts of FY 2010-11, BSEB filed its Review petition for

FY 2010-11 for approval of the Commission. Subsequently on 5th March 2012 vide

letter No Com/Tar- 132/2011-392 dated 02.03.2012, BSEB has submitted audited



annual accounts for FY 2010-11 along with the audit certificate issued by CAG and

true-up petition for FY 2010-11 on 16th March, 2012 vide letter No. Com/ Tariff-

132/2011-451.

1.5.2 The scope of this order extends to:

a) Truing up exercise for FY 2010-11based on audited annual accounts of the

Board for FY 2010-11;

b) Review exercise for FY 2011-12;

c) Determination of ARR and retail tariff for sale of electricity for FY 2012-13;

1.5.3 The aforementioned exercise has been done by taking into consideration the

provisions of:

a) Electricity Act, 2003;

b) National Electricity Policy;

c) Tariff Policy;

d) BERC (Terms and conditions for determination of Tariff) Regulations, 2007.



2 Procedural History

2.1 Background

2.1.1 BSEB has filed petition for determination of tariff for FY 2012-13, review of expenses

for FY 2011-12 and for true-up of ARR and revenue for FY 2010-11. The tariff

petition for FY 2012-13 filed by the BSEB vide letter No.- Com / Tariff/ 152/ 2011 -

1838 dated 15th November 2011 for approval of the ARR and determination of retail

tariff for FY 2012-13 also includes the proposal for review of ARR for FY 2011-12

based on the annual accounts of the Board for FY 2010-11.

2.1.2 As per the BERC (Terms and conditions for determination of Tariff) Regulations,

2007, BSEB is required to submit the audited annual accounts of the previous years

along with the tariff petition for the next year, which the BSEB has submitted on 5th

March 2012 vide letter No. Com/ Tar-132/ 2011-392 dated 02.03.2012 as per the

Commission order dated 3rd November 2011.

2.1.3 Subsequently, BSEB vide letter no. Com/tariff-152/2011 (Part-1)-2079 dated 30th

December 2011 submitted a supplementary tariff petition for FY 2012-13.

2.2 Information Gaps in the petition

2.2.1 In the process of scrutinizing the tariff petition filed by the Petitioner, the Commission

observed some data gaps in the ARR & tariff petition received from the Petitioner.

2.2.2 The data gaps observed by the Commission were communicated to the Petitioner

vide Commission’s letter No. BERC- Tariff – 24/11- 825 dated 21st December, 2011

and reminders vide letter No. BERC- Tariff – 24/11- 56 dated 18th January, 2012 and

BERC- Tariff – 24/11- 88 dated 27th January, 2012. The Petitioner provided only the

partial data vide letter No Com/Tar/161/2011-260 dated 09th February, 2012 after

taking fifty (50) days’ time.

2.2.3 Further clarifications were sought from the Petitioner vide Commission’s letter No.

BERC - Tariff – 24/11- 88 dated 27th January, 2012 and reminder vide letter No

BERC- Tariff – 24/11- 137 dated 13th February, 2012. The Board submitted its



response on 1st March 2012 vide letter No. Com/ Tar-132/2011-375 taking further

thirty-five (35) days.

2.2.4 Additional information was sought from the Board vide Letter No. BERC- Tariff-

24/11-202 dated 01st March 2012. The Board submitted its response through

electronic mail on Commission’s official e-mail address ([email protected]) and

through letter No. Com/ Tar-161/2011-421 dated 12th March 2012.

2.2.5 Further, during the public hearing on the petition of BSEB in Patna, additional

information was sought from the Board vide Commission’s Letter No. BERC- Tariff-

24/11-244 dated 15th March 2012. The Board submitted its response through letter

No. Com/ Tar-161/2011(Part-1) - 444 dated 16th March 2012.

2.2.6 From time to time and till the finalization of this Tariff Order, the Commission

regularly interacted with the officials of the BSEB to validate the information

submitted by them.

2.3 Inviting comments / suggestions from Public

2.3.1 As per sub-Clause 6 (5) of the BERC (Terms and conditions for determination of

Tariff) Regulations 2007,and for providing adequate opportunity to all stakeholders

and general public for making suggestions/ objections on the tariff petition as

mandated under section 64(3) of the Electricity Act 2003, the Commission vide its

letter No. BERC- Tariff – 24/ 11 - 774 dated 28th November 2011 directed the BSEB

to publish the ARR and tariff petition for FY 2012-13 in an abridged form in shape of

a public notice in at least two daily newspapers, one in English and the other in Hindi,

having wide circulation in the state inviting objections and suggestions on the tariff

petition. To ensure maximum participation from all the stakeholders and general

public at large the tariff petition was also placed on BSEB website

(http://www.bseb.bih.nic.in/Notices.htm) and copies of the petition along with

annexures were also made available for sale in the office of the Chief Engineer

(Commercial), BSEB Patna and in the Office of All Area General Managers-cum-

Chief Engineers and all Superintending Engineers In-charge of supply circles of the

Board.



2.3.2 The tariff petition for the FY 2012-13 in abridged form was published as public notice

in different newspapers as mentioned in the table below:

Table 1: Schedule of issue of Public Notice in vari ous newspapers

Sl. Name of News Paper Date of Publication

Issued in Patna Edition Newspaper

1. Danik Jagaran (Hindi) 08th December 2011 & 6th March 2012

2. Times of India, Patna (English) 09th Dec 2011, 13th Dec. 2011 & 6th March 2012 3. Hindustan, Patna (Hindi) 12th December 2011 & 6th March 2012 4. Prabhat Khabar (Hindi) 6th March 2012

Issued in Dharbhanga Edition Newspaper

1. Prabhat Khabar (Hindi) 28th January 2012

2. Times of India, (English) 29th January 2012

Issued in Bhagalpur, Purnia and Gaya Edition Newspaper

1. Hindustan (Hindi) 17th February 2012

2. Times of India, (English) 17th February 2012 Issued in Muzaffarpur Edition Newspaper

1. Prabhat Khabar (Hindi) 28th January 2012 & 3rd March 2012

2. Times of India, (English) 29th January 2012 & 3rd March 2012

2.3.3 However, despite the direction of Commission vide its letter No. BERC- Tariff – 24/

11 - 774 dated 28th November 2011 to publish the ARR and tariff petition for FY

2012-13 to ensure maximum participation from all the stakeholders and general

public, initially BSEB did not upload the supplementary ARR and tariff petition for FY

2012-13 on their website, although the supplementary ARR and tariff petition for FY

2012-13 was filed by the BSEB on 30th December 2011. The Commission took

notice of the same and again directed the BSEB vide letter No BERC- Tariff – 24/11-

199 dated 29th February 2012 and letter No BERC- Tariff – 24/11 – 210 dated 2nd

March 2012 to upload the same on the official website of BSEB without any further

delay inviting comments and suggestion of the public during the remaining two public

hearings which were scheduled on 13th March 2012 and 14th March 2012 at

Muzaffarpur and Patna respectively. Accordingly, the BSEB uploaded the

supplementary ARR and tariff petition for FY 2012-13 on the BSEB website on 05th

March 2012 for consideration during ARR and tariff determination process and public

hearing.



2.3.4 The last date of submission of comments was initially fixed as 06th January 2012.

Later, on request of some consumers/ consumer’s associations, the Commission

extended the date for submission of objections/ suggestions to 20th January 2012

and public notice was issued by Commission on 7th January 2012 vide Notice No.-1.

2.3.5 Comments and suggestions were received from fifteen (15) consumers/ consumer

associations and general public up to the due date i.e. 20th January 2012. The list of

persons/ organizations whose suggestions/ comments have been received is as

given in the table below:

Table 2: List of Objectors

Sl. Name of Consumer/ consumer organizations Address

1 M/s Dadiji Steel Ltd. 502, Santosha Complex, Bandar Bagicha, Fraser Road Patna

2 M/s Kalyanpur Cements Ltd. Maurya Centree, Freser Road Patna

3 M/s Patwari Steel Pvt Ltd. Fathua Patna

4 Shri Pramod Kumar Sharma Dilawaerpur west, P.O. Viddupur Bazar, Vaishali

5 M/s Bihar Steel Manufacturing Association 307, Ashiyana Tower, Exhibition Road Patna

6 M/s Balmukund Concast Limited Kalyani Complex, Exhibition Road Patna

7 Shri Doman Singh B-44, Road No-2, Anand Bihar Patna

8 Chief Electrical Engineer (ECR, Hazipur) East Central Railway Patna

9 Shri Braj Nandan Pathak,Vidyut Upbhogta Sangarsh Samiti

93, Lakshman sahay Lane, Gurudwara Road, Gaya

10 M/s Bhola Ram Steel Private Ltd. Nasrigang, Danapur

11 M/s Bhojpur Chamber of Commerce & Industry Mahajan Toli, Arha

12 M/s Bihar Chamber of Commerce Khem Chand Chaudhary Marge, Patna

13 Shri Vinay Goenka Patna City Chowk, Patna

14 Shri Vyasdev Prasad Hospital Road Siwan

15 M/s Dina Iron and Steel Abdul Rahmanpur Road, Didarganj, Patna

2.3.6 The Commission vide letter No. BERC-Tariff-02/11-73 dated 25.01.2012 directed the

BSEB to submit the replies/ responses to the suggestions/ objections to the

Commission by 7th February, 2012.



2.3.7 The BSEB prayed for time for submission of written response to the suggestions/

objections made by the consumers/Consumer Associations. The Commission

directed the BSEB to submit the same at the earliest.

2.3.8 The BSEB submitted the replies and response to the objections/ suggestions

received from these fifteen (15) entities vide BSEB letter no. Com/Tariff/02/2012 –

302 dated 16th February, 2012 to the Commission. The same has been discussed in

detail in the Chapter 3 of this Tariff Order.

2.3.9 Further, the Commission has received Comments and suggestions from consumers/

consumer associations and general public during the public hearing process

conducted at Darbhanga, Bhagalpur, Purnia, Gaya, Muzaffarpur and Patna. The list

of persons/ organizations whose suggestions/ comments have been received during

public hearing at various places is as given in the table below:

Table 3: Additional list of Objectors


Darbhanga - 15 th February 2012

1 Sri Dilip Kumar Jha Secretary, Rural Electric Consumer Association, Loha Madhubani

2 Sri Pawan Kumar Sureka President, Divisional Chamber of Commerce & Industries, Masrat Bazar, darbhanga

3 Dr. Shashi Bhushan Mahto Secretary, Upvokta Manch, Biraul, Darbhanga

4 Sri Ajoy Bihari Laheria Sarai, Khaja Sarai, Darbhanga

5 Sri Gyaneshwar Prasad General Secretary, Mithilanchal Industrial Chamber of Commerce, Industrial Area, Darbhanga

Bhagalpur – 23 rd February 2012

6 Sri Lakhan Lal Prasad Manik Sarkar Chowk, Bhagalpur

7 Sri sandeep Jha, Advocate Behind Consumer Court, Bhagalpur

8 Sri Gautam Suman Chairman, Ang Uthanodolan Committee, Iswer Nagar, Bisharisthan, Isakchak, Bhagalpur

9 Sri Prakash Chandra Gupta & Others Co-ordination Committee, Bhagalpur

10 Dr. Jayant Jalad Central general secretary, Ang Uthanodolan Committee, Bhagalpur

11 Sri Mutukdhari Agrawal President, Eastern Bihar Industries association, 4 Rai Gopal Sarkar Lane., Bhagalpur

12 Sri Surendra Kumar Dauania Marwari Tola Lane, Bhagalpur




13 Sri Shashi Shankar Rai Laloo Chak, Isakchak, Bhagalpur

Purnia – 24 th February 2012

14 Sri Bimal Chand Bajaria President, North eastern Bihar Chamber of Commerce and Industries, Syndicate Katra 2nd Floor Katihar

5 Sri Pankaj Kumar Nayak Pankaj International, Maranga, Purnea

Gaya – 27 th February 2012

16 Sri Brij Nandan Phatak Secretary, Vidyut Upvokta Sangharse sammittee, 93, Lakshman sahay Lane, Gurudwara Road, Gaya

17 Sri Sandalankara Vikklauk & Kiran Lama

President & general Secretary, International Buddhist Council of Buddhagaya Daijokyo Buddhist Temple, Buddhgaya

18 Sri Arvind Kumar President, South Bihar Industrial Association, Lharia Tola, Gaya

Muzaffarpur – 13 th March 2012

19 Sri Prakash Narayan Saha General Secretary, Viyahut Seva Trust, Yadupati Marge, Banarash Chowk, Muzaffarpur

Patna – 14 th March 2012 & 19 th March 2012

20 M/s Gangotri Iron and Steel Bihta, Patna

21 Sri Ajit Prasad Mehta Senior Vice President, Jawan Kishan Morcha, Ara (Bhojpur)

22 Sri Raj Kishore Sharma Vice President,Lk Kalayan Ayog, Sheoganj, Ara (Bhojpur)

23 Sri Vishwanath Prasad President, Bhojpur Chamber of Commerce & Industries, Mahajantoli, Ara (Bhojpur)

24 Sri Deo Ratan Prasad President,Jan Sangharse Morche, Belwargaj, Patna City, Patna

25 M/s Bihar Industrial Association Sinha Library Road, Patna

26 M/s Bholaram Steel Private Limited Nasriganj, Digha, Patna



2.3.10 The Commission vide letter No. BERC-Tariff-24/ 11-237 dated 12th March, 2012 and

letter No. BERC-Tariff-24/ 11 (part-1) - 248 dated 15th March, 2012 directed the

BSEB to submit the replies/ responses to the suggestions/ objections received in

public hearings to the Commission before 19th March 2012.

2.3.11 The BSEB submitted the replies and responses to the objections/ suggestions

received from these twenty-six (26) entities vide BSEB letter no. Com/Tariff/02/2012

– 476 dated 21st March, 2012 to the Commission. The same has been discussed in

detail in the Chapter 3 of this Tariff Order for FY 2012-13.

2.4 State Advisory Committee

2.4.1 The meeting of the State Advisory Committee to consider the ARR and retail tariff for

FY 2012-13 was held on 23rd December 2011. The proceedings of the State Advisory

committee is given in Annexure – I .

2.5 Public Hearing

2.5.1 Clause 19 of BERC (Terms and conditions for determination of Tariff) Regulations,

2007 provides that the Commission shall hold the public hearing(s) to decide on

revenue calculations and tariff proposals of the transmission & distribution utilities.

Considering the proceedings of the hearing(s) as well as suggestions/objections

received in response to the public notice, the Commission shall issue an order

communicating its decision on the revenue calculations and tariff proposals to the

Transmission or Distribution licensee, as the case may be.

2.5.2 For convenience of electricity consumers and general public across the State, the

Commission held the public hearing at following divisional headquarter in the state:

Table 4: Schedule for public hearing

Sl. Name of Place Time and Date Venue

1 Darbhanga 15th February, 2012 at 11:30 A.M. Conference Hall of Divisional Commissioner, Darbhanga

2 Bhagalpur 23rd February, 2012 at 11:00 A.M. Conference Hall of Divisional Commissioner, Bhagalpur

3 Purnea 24th February, 2012 at 11:30 A.M. Conference Hall of DRDA Annexe Building, Purnea

4 Gaya 27th February, 2012 at 11:00 A.M. Conference Hall of Divisional Commissioner, Gaya



Sl. Name of Place Time and Date Venue

5 Muzaffarpur 13th March, 2012 at 11:30 A.M. Conference Hall of Zila Parishad, Muzaffarpur

6 Patna 14th March, 2012 at 11:00 A.M. & 19th March, 2012 at 11:30 A.M.

Office of BERC, Vidyut Bhawan- II, Bailey Road Patna

2.5.3 The BSEB was given an opportunity to present its proposal before the Commission

and the consumers/Consumer’s Association who were present at the public hearing.

The BSEB presented its case through audio-visual presentation explaining the

proposals in the tariff petition for FY 2012-13.

2.6 Structure of the Order

2.6.1 This order is organised into the following chapters namely:

• Chapter 1: Introduction – Covers the background of the entire process along

with details of the process adopted by the Commission prior to issue of this

Tariff Order for BSEB and the approach being adopted therein.

• Chapter 2: Procedural History - Covers the details of the process of

publication of ARR and tariff petition, scrutiny of the data/ information provided

by the Petitioner and the process of consultation with public;

• Chapter 3: Public Consultation Process - Provides a detailed account of the

public hearing process, including the comments of various stakeholders, the

Petitioner’s responses and views of the Commission;

• Chapter 4: True up of FY 2010-11 - Deals with the True up of expenses for FY

2010-11;

• Chapter 5: Review of FY 2011-12 - Deals with the review of proposed

expenses for FY 2011-12;

• Chapter 6: Analysis of Aggregate Revenue Requiremen t for FY 2012-13 -

Deals with the determination of ARR and tariff for FY 2012-13;

• Chapter 7: Government grant/ revenue subsidy – Deals with quantum and

treatment of grant/ subsidy from the State Government;

• Chapter 8: Tariff Principles, Design and Tariff Sch edule – Deals with tariff

principles and approved Tariff schedule for FY 2012‐13;

• Chapter 9: Status of Directives issued by the Commi ssion - Deals with

report of compliance of directives submitted by the BSEB and Commission’s

observations on compliance and fresh directives;



• Chapter 10: Generation, Transmission, Wheeling Char ges and Open

Access Charges – Deals with the Wheeling Charges and Open Access

Charges, and;

• Chapter 11: Renewable Purchase Obligation

• Chapter 12: Annexures



3 Public Consultation Process

3.1 Introduction

3.1.1 The tariff petition evoked response from several stakeholders. In response to the

public notice inviting objections/ suggestions of the stakeholders on the petition, a

number of consumers/ consumer organisations filed their submissions in writing.

Some of these persons also participated in the public hearing held on the 15th, 23rd,

24th, 27th of February’12 and 13th, 14th and 19th of March’12. Submissions and

responses, pertaining to specific aspects of tariff proposal, have been taken into

account in the determination of ARR, formulation of an equitable tariff, balancing the

interests of various stakeholders, even if they do not find place in the suggestions/

objections of the stakeholders.

3.1.2 The public hearings were held at various locations across the State to ensure

maximum public participation wherein stakeholders put forth their comments and

suggestions before the Commission in the presence of the Petitioner. There were

152 members of the public who took part in the public hearing process. The list of the

participants is attached as Annexure-II to this Order. In course of public hearings, the

Commission also allowed persons/representatives of entities who had not submitted

prior written representations to express their views on the ARR and tariff petition for

FY 2012-13.

3.1.3 The Commission has examined the issues and concerns voiced by various

stakeholders in their written comments as well as in the public hearing and also the

response of the Petitioner thereon. The comments/ suggestions submitted by various

stakeholders in response to the tariff petition, the replies given by the Petitioner and

the views of the Commission have been summarized under various sub-heads as

below:-

3.2 Stakeholders Suggestions/ Objections, BSEB’s Re sponse and Commission’s

Views

3.2.1 Issue: Delay in filing the tariff petitions and tru e-up petitions



M/s Dadiji Steel Limited and Bihar Steel Manufacturers Association have pointed out

that the Board has delayed the filing of tariff petitions for FY 2006-07, FY 2007-08,

FY 2008-09, FY 2009-10 and FY 2010-11 beyond specified time. True up petition for

FY 2006-07, FY 2007-08, FY 2008-09, FY 2009-10 and FY 2010-11 have also been

filed quite late. It was pointed out that the true up exercise for FY 2010-11 and review

of ARR for the FY 2011-12 has to be done by the Commission before considering the

ARR and tariff proposal for FY 2012-13.

Petitioner’s submission

The BSEB has prepared its ARR and tariff petition for the FY 2012-13 in accordance

with the BERC (Terms and conditions for determination of Tariff) Regulations, 2007

notified by the Commission and the provisions of the Electricity Act 2003.

True-up petition for FY 2006-07, FY 2007-08, FY 2008-09 & FY 2009-10 was filed

before the Commission by BSEB and order for the same has been issued by the

Commission. True up petition for FY 2010-11 & review petition for FY 2011-12 have

also been filed before the Commission.

Commission’s observation

The Commission has directed the Board to file true up, review and tariff petitions

within specified time limit. The Commission has passed orders on the true up petition

for FY 2010-11 and review petition for FY 2011-12 and considered their impact on

ARR and the tariff for FY 2012-13.

3.2.2 Issue: Segregated ARR for Generation, Transmission and Distribution functions of BSEB

Bihar Chamber of Commerce, Central Bihar Chamber of Commerce, South Bihar

Industries Association and Divisional Chamber of Industry & Commerce have stated

that the Petitioner has to file separate ARR for generation, transmission and

distribution business.


Function wise ARR as per annual accounts has been provided in table 40 of the tariff

petition.




The BSEB is an integrated utility of generation, transmission and distribution, and

hence the filing of tariff is in accordance with Annexure D of BERC (Terms and

conditions for determination of Tariff) Regulations, 2007. The Commission will

undertake detailed scrutiny of ARR while approving the ARR for FY 2012-13.

3.2.3 Issue: BSEB’s own Generation

M/s Balmukund Concast Limited, M/s Dadiji Steel Ltd, Bihar Steel Manufacturer

Association and some other consumers/ consumer groups gave suggestions/

objections on different aspects of own generation of BSEB. They pointed that the

Board has projected the gross generation of 310 MU in FY 2012-13 which is higher

than the past generation trend. The Board has also projected the operational

parameters with a view to exaggerate the cost of generation without taking into

consideration the norms specified in CERC (Terms and conditions of Tariff)

Regulations, 2009 and the norms approved by the Commission. The Petitioner has

proposed generation ARR of Rs 571.29 Cr. for net generation of 272.80 MUs which

shows that the plant is generating power at abnormally high cost of about Rs 21 per

kWh.

It was further mentioned that the Board has not provided any specific data for supply

of energy from its own generating station mainly from BTPS Unit-7. They suggested

that R&M cost should be allowed only after the benefits are passed on to the

Consumers. It was stated that the Board has sought approval of Rs 158.13 Cr. as

fuel cost for FY 2012-13 and suggested that if there is no generation of electricity and

no benefit of such generation is received by the Consumer, the proposed fuel cost for

generating station should not be allowed.

They also pointed out that there is a continuous lack of improvement in the

performance parameters of BTPS and suggested that the Commission should

consider the performance standards for projecting the cost of generation from BTPS.


BSEB submitted that at present Unit VII is under shutdown and undergoing

Renovation & Modernization work for revival. Dismantling of the Unit VI for R&M work

is planned from June 2012 while R&M of Unit VII is expected to be completed by July

2012.



After R&M the unit will be under stabilization period and hence higher specific oil

consumption is requested for BTPS plant. Station heat rate is expected to improve

from FY 2010-11 level of 4103 kCal/kWh to 4000 kCal/kWh & 3700 kCal/kWh for FY

2011-12 & FY 2012-13 respectively. Coal price in FY 2010-11 was Rs. 1823 per MT

but in recent times it has witnessed steep hike and it was Rs. 3317 per MT in the

month of August, 2011. Hence coal price for FY 2011-12 & FY 2012-13 is expected

to be higher from the level of FY 2010-11. Other fuel related cost is projected in line

with the cost witnessed in FY 2010-11.

BSEB submitted that the ARR of generation is Rs. 571.29 Cr. out of which Rs.

413.16 Cr. comprises of fixed costs like employee cost, operation and maintenance

expenses, depreciation, interest and finance charges etc. and Rs. 158.13 Cr. are for

fuel cost. Even if BSEB shuts down the operation of BTPS, it will continue to incur

fixed cost of the power plant. BSEB cannot shut down BTPS as Bihar is a power

deficit state.


The Commission observes that the Renovation & Modernisation (R&M) process of

BTPS is currently underway and the operational parameters will be reviewed

thereafter. The Commission expects that after completion of R&M works, plant shall

operate at efficient scale at par with other similarly placed generating plants. The

Commission has dealt this issue while approving theARR for FY 2012-13 in Chapter

– 6.

3.2.4 Issue: Capacity Charge of BTPS plant

M/s Kalyanpur Cement has pointed out that as per Clause 33 of the BERC (Terms

and conditions for determination of Tariff) Regulations, 2007, a generating plant must

operate at 80% efficiency (Plant Load Factor/ Availability) to recover fixed charges

from the consumers. Further, recovery of capacity/ fixed charges below the level of

target availability (80%) shall be on pro-rata basis and at zero availability, i.e., for

‘non-productive assets’ no capacity charges can be recovered from the consumers

based on the principle that inefficiency of the utility should not be passed on to the

consumers. BSEB has only one generating asset and out of seven units only Unit no.

6 is functioning at de-rated capacity of 105 MW with PLF of 11.1% (2008-09),

28.78% (2009-10) and projected to be 31% during 2011-12. In such a case BSEB

cannot recover any fixed charges for units 1 to 5 and 7 and any other ‘non-



performing assets’ and in case of Unit 6 BSEB can recover less than 40% fixed costs

related to generation.


BSEB is not recovering any fixed charge for the units which have been permanently

shut down. The fixed costs have been claimed for units which are functional. Further

the recovery of fixed cost is proposed at PLF approved by the Commission and not

80% as indicated by the objector. The availability factor indicated by the objector is

for new units (and of standard size) and not for 110 MW units which have completed

their economic life.


The Commission observes that the Renovation & Modernisation (R&M) process of

BTPS is currently underway and the operational parameters will be reviewed

thereafter. The Commission has dealt this issue while approving the ARR for FY

2012-13 in Chapter – 6 of this Tariff Order.

3.2.5 Issue: Power purchase cost

M/s Balmukund Concast Limited and M/s Gangotri Iron and Steel Company Limited

have observed that the Petitioner has projected the Power purchase of 11,931 MU

and 14,142 MU at a cost of Rs 4163 Cr. and Rs 5139 Cr. respectively for FY 2011-12

and FY 2012-13. However, the details of the source of renewable energy purchase

and short term/ medium term power purchase for FY 2012-13 have not been

furnished. It has also been pointed out that the Board has projected very high power

purchase cost @ Rs. 3.49 per unit and Rs. 3.63 for FY 2011-12 and FY 2012-13

respectively from various sources.

Central Bihar Chamber of Commerce, South Bihar Industries Association, Divisional

Chamber of Industry & Commerce , M/s Dadiji Steel Limited and Bihar Steel

Manufacturer Association have stated that during the past decades 85% of the

projected power production was never made available to the Board. Accordingly, the

projection of 1304 MUs and 3351 MUs of Power availability from additional sources

for FY 2011-12 and FY 2012-13 should not be accepted by the Commission. Prof.

Pramod Kumar Sharma requested the BERC to do an in-depth analysis of the power

purchase costs and requested that details of the same are furnished to general

public.




BSEB submitted that it has purchased power for the short and medium terms only

through open tenders and competitive bidding route. Considering the availability of

power from these short and medium term sources at 85% availability factor,

additional power purchase has been projected at 1304 MU and 3351 MU for FY

2011-12 and FY 2012-13 respectively.

Power purchase through renewable sources: BERC has notified the “Renewable

Purchase Obligation, its Compliance and REC framework Implementation Regulation

2010”, the Sub-clause 4.1 of the regulation states that

“Every obligated entity shall purchase not less than 1.5%, 2.5%, 4%, 4.5% and 5% of

its total energy consumption (total energy input minus T&D losses) during 2010-11,

2011-12, 2012-13, 2013-14 and 2014-15 respectively from renewable energy

sources under the Renewable Purchase Obligation or until reviewed by the

Commission. Provided that 0.25% out of the renewable purchase obligation so

specified in the year 2010-11 shall be procured from generation based on solar as

renewable energy source and shall be increased at a rate of 0.25% every year

thereafter till 2014-15 or until reviewed by the Commission”.

BSEB submitted that in compliance of “Renewable purchase obligation, its

Compliance and REC framework regulations, 2010” BSEB is required to purchase

2.5% & 4% of the total sales respectively from renewable energy sources. Out of the

total Renewable purchase obligation (RPO), 0.5% & 0.75% has to come from solar

energy sources for FY 2011-12 & FY 2012-13 respectively. BSEB has options like

Renewable Energy Certificates (REC) to meet renewable purchase obligation and

BSEB would consider this option to meet its RPO.

Short term/ medium term power purchase: Bihar is a power deficit state and BSEB

has obligation to serve the consumers. In order to fulfil its obligation, BSEB is

expanding its network across the length and breadth of the state. To meet the

growing demand of electricity of existing and new consumers, BSEB is purchasing

power on short and medium term basis.

Power purchase from NTPC: For projection of power purchase cost from NTPC for

FY 2011-12 & FY 2012-13, actual plant-wise cost from April 2011 to August 2011 has

been considered.



Power purchase cost: BSEB has projected the power purchase cost for FY 2012-13

on the basis of actual power purchase cost from April 2011 to August 2012.


Prudence checks including bills of central generating units have been done by the

Commission while approving the power purchase costs.

3.2.6 Issue: Operation and Maintenance expenses

(i) Repair and Maintenance (R&M) Expense

M/s Kalyanpur Cement Limited, M/s Balmukund Concast Limted and other

consumers suggested that the Commission should allow R&M expenses @ 2% of

the GFA of the Board in the ARR of FY 2012-13. They also pointed out that the

Petitioner has proposed R&M expense of Rs 110.62 Cr. as against the actual of Rs

62.51 Cr. in FY 2010-11 which amounts to 34% cumulative growth w.r.t. the FY

2010-11.

(ii) Employee Cost

Bihar Steel Manufacturer Association, M/s Dadiji Steel and M/s Balmukund Concast

Limited has pointed out that the Petitioner has estimated Rs 933.22 crores towards

employee cost which includes Rs 208.59 Cr. towards unfunded terminal liabilities, Rs

18.85 crores for leave encashment and Rs 19.97crores towards gratuity. They

suggested that the Commission should be fair enough to prudently check the data

with documentary evidence from the records of the Board.

(iii) Administrative and General (A&G) expenses

It was also observed by M/s Balmukund Concast Limited that the Board has

projected the A&G expenses of Rs 76.88 crores for FY 2012-13 against actual of Rs

38.83 crores during FY 2010-11, which is quite high.


Operation and Maintenance expenses consist of employee cost, A&G expenses and

R&M expenses.

Revised estimate for the employee cost is based on the actual figure of FY 2010-11.

The Wholesale price index (WPI) has increased from 130.81 in FY 2009-10 to 143.32



in FY 2010-11 which is an increase of 9.56%. The Commission had approved

escalation of 10% for employee cost in its Tariff Order for FY 2011-12. Considering

the same, BSEB estimates that the employee cost will increase by 10% in FY 2011-

12 & FY 2012-13 from the level of FY 2010-11.

Further, Over and above the current employee strength, BSEB has plan for additional

recruitment in view of the increase in network and number of consumers during the

last couple of years. BSEB plans to recruit 1166 employees under various employee

categories. BSEB has recruited some employee while recruitment for remaining

employees is in progress. Based on the pay scale of various levels of employees,

BSEB expects to incur additional cost of Rs. 11.07 Cr. for new employees in FY

2011-12 and Rs. 32.62 Cr. for FY 2012-13.

The 3 years CAGR based on the audited data of A&G expenses for the period FY

2007-08 to FY 2010-11 is 12%. BSEB has applied 12% escalation on A&G expenses

of FY 2010-11. Thus, A&G expenses for FY 2011-12 & FY 2012-13 are projected at

Rs. 45.13 Cr. & Rs. 50.54 Cr. respectively. Capitalization of A&G expense projected

for FY 2011-12 & FY 2012-13 is based on the actual capitalization rate of FY 2010-

11. A&G expenses to be capitalized are projected at Rs. 1.64 Cr. & Rs. 1.83 Cr. and

thus the net A&G expenses (post capitalization) are projected at Rs. 43.49 Cr. & Rs.

48.71 Cr. for FY 2011-12 & FY 2012-13 respectively.

In addition, BSEB expects to incur an additional A&G expense of Rs. 10 Cr. for

outsourcing of metering and billing related activities for FY 2011-12 which has been

approved by the Commission in the Tariff Order of FY 2011-12. BSEB proposes to

outsource all metering and billing related activities for all its consumers in FY 2012-

13 and it has awarded the contract of same. Accordingly the expenses on metering,

billing and related activities for FY 2012-13 is expected to be Rs. 28.17 Cr..

The assets of BSEB are old and require regular maintenance to ensure uninterrupted

operations. BSEB has been trying its best to ensure uninterrupted operations of the

system and accordingly has been incurring necessary expenditure on R&M activities.

Further expansion of transmission and distribution system has contributed to

increase in R&M expenses.

The Wholesale price index has increased from 130.81 in FY 2009-10 to 143.32 in FY

2010-11 which is an increase of 9.56%. Considering the same, BSEB expects that

the R&M expenses will increase by 10% in FY 2012-13 over the level of FY 2011-12.



The Commission in its Tariff Order for FY 2008-09 dated 26th August, 2008 directed

BSEB to include water charges & miscellaneous charges under the head R&M

expenses and exclude it from the fuel cost head. Accordingly BSEB has included

actual water charges & miscellaneous charges under this head and has excluded

from the fuel cost head in this petition.

It would be relevant to mention here that O&M norms prescribed by CERC in its

CERC (Terms and conditions of Tariff) Regulations, 2009 for determination of tariff

cannot be made applicable to BSEB as the operating conditions, geography,

consumer mix and the roles & responsibilities of central sector organizations differ

from those of BSEB.


The Commission takes note of the concerns of the objectors. The Commission is of

the view that the justifiable and legitimate cost should only be allowed to the

Petitioner for its smooth and efficient functioning. The Commission shall undertake

prudence checks of all components of O&M charges while approving the costs. This

has been dealt while determining the ARR for FY 2012-13 in Chapter-6.

3.2.7 Issue: Capital cost

M/s Kalyanpur Cement Limited stated that BSEB has included additional capital cost

in its petition without prior approval of the BERC. They made a submission that

expenses sought to be capitalized should be disclosed item-wise and unit-wise and

productivity-wise to the objectors/ consumers and same may be checked prudently

and only the expenses which are productive or available for production should be

allowed.

They pointed out that the Act and the Tariff Regulations, 2007 provide that separate

tariff for generation, transmission and distribution functions is to be determined in two

parts – capacity/ fixed charges and variable charges. Regulations 34, 50 and 69 of

the Tariff Regulations, 2007 define ‘Capital Cost’ for generation (Thermal),

generation (Hydel) and transmission of a utility. Expenditure incurred is subject to

prudence check by the Commission and other formalities before being admitted as

Capital Cost. The Capital Cost for 2009-10 and 2010-11 have not been admitted after

prudence check by the Commission.




BSEB has filed the tariff petition as per BERC (Terms and conditions for

determination of Tariff) Regulations, 2007. BSEB has provided all the necessary

details related to capital expenditure for three functions of BSEB i.e. Generation,

Transmission and Distribution in its tariff petition. BSEB has also provided the

funding details of the proposed capex along asset capitalization schedule. Further for

past years the Commission has considered capital cost as per the audited accounts

of BSEB.


The Commission has taken into consideration the views of the objectors and will

prudently check the data provided by BSEB while approving the capital costs.

3.2.8 Issue: Depreciation

M/s Kalyanpur Cement Limited observed that out of seven (7) generating stations run

by the Board only one unit (Unit No. 6) is functioning. Therefore, unit No. 1 to5 and 7

are non-productive assets and depreciation cannot be claimed from the consumers in

respect of these units. Further, it was pointed out that the recovery of Depreciation of

Unit no. 6 should be restricted to actual average PLF.

M/s Balmukund Concast Limited stated that the Petitioner has estimated addition of

Rs 191.66 (280.66 – 89.0) crores as depreciation cost for FY 2012-13 over the

depreciation cost claimed in FY 2010-11. Huge addition in depreciation cost shows

that a considerable amount has been incurred over asset creation in FY 2010-11 and

FY 2011-12. The Board should provide documentary evidence to substantiate that

the asset has been created in FY 2010-11 and FY 2011-12 and suggested that the

Commission should be fair enough to allow the depreciation charges on the basis of

actual for the FY 2010-11.


The BSEB submitted that it calculated the depreciation in accordance with the asset

base of the BSEB and the asset wise accumulated depreciation. The depreciation

has been projected on the basis of allowed depreciation rates and straight line

method of depreciation calculation as specified by the Commission in BERC (Terms

and conditions for determination of Tariff) Regulations, 2007. As stated earlier no

depreciation has been claimed on non-productive assets.




The Commission shall take into consideration the views of the objectors while

approving the costs and depreciation claimed by BSEB will be checked prudently

while approving the depreciation in chapter -6.

3.2.9 Issue: Interest and Finance Charges

M/s Kalyanpur Cement Limited pointed out that since the loans have a one year

moratorium, no interest charges on ‘new loans’ should accrue during FY 2012-13.

However, the petition states Rs 705.72 crores against this head. Further, no interest

is payable on state government loans if the Board does not have any surplus after

meeting operating expenses. The Board has to pay interest on security deposit taken

from consumers, however the interest paid to the consumers is being retained and

has been included in the ARR.

M/s Balmukund Concast Limited highlighted that the Petitioner has projected Rs

705.72 crores as Interest and Finance charges for FY 2012-13 against Rs 149.01

crore approved by the Commission in Tariff Order for FY 2011-12. It was suggested

that the Commission should check the details of the assets created during the current

year i.e. FY 2011-12 which will come under use in FY 2012-13.


Interest and finance charges include the interest liability of BSEB for the loans

borrowed for capital works. In the past years, BSEB has added significant network to

its existing network by expanding in rural areas for which it has borrowed funds from

financial institutions. In FY 2012-13, BSEB plans to spend Rs. 4352 Cr. for capital

works. Accordingly the interest and finance charges have been increasing steadily

owing to the increased capital investment made by BSEB. There has also been

commensurate increase in asset base of BSEB as provided in the books of accounts

of BSEB. The rates and other conditions of the loans (for interest computation) are

strictly in accordance with the terms and conditions of the loan.

The State Government as the owner of BSEB has providing BSEB with all possible

assistance in meeting its cash losses and funding requirements as per the conditions

of central sponsored schemes. BSEB has at times not paid the State Government

interest and principal due for the year. However the cost of funds received from the

State Government should be considered as part of the ARR and tariff.



BSEB has not claimed interest paid to consumers for consumer security deposited by

them as an item of cost in the ARR for FY2012-13.


The Commission will consider the views of the objectors about interest and finance

charges while approving the costs on this account. Interest and finance Charges will

be considered after prudence check in chapter -6.

3.2.10 Issue: Interest on Working Capital

M/s Balmukund Concast Limited and M/s Gangotri Iron & Steel Company Limited

have stated that the Petitioner’s claim of interest on working capital of Rs 211.67

crores for FY 2012-13 is not justifiable as the BSEB has not created any working

capital fund. It was also observed that the Board is using employee’s contribution in .

GPF and Group Saving Schemes, security deposit from the consumers and grant

from Government as their working capital and so charging interest on working capital

is not acceptable. Accordingly, the Commission should prudently check the amount

of working capital.


The Board has submitted that it has proposed interest on working capital on

normative basis as per the BERC (Terms and conditions for determination of Tariff)

Regulations, 2007.


The Commission has dealt with the tariff setting process in line with the BERC

(Terms and conditions for determination of Tariff) Regulations, 2007. However,

wherever deemed necessary, the expenses have been re-examined and approved

after proper prudence check.

3.2.11 Issue: Return on Equity


Chamber of Industry & Commerce, Bihar Chamber of Commerce, M/s Gangotri Iron

& Steel Company Limited and M/s Balmukund Concast Limited pointed out that in the

petition, BSEB has calculated the return on equity (RoE) by treating its gross fixed

assets (net of grants and subsidies) as equity capital, however BSEB’s capital



structure is constituted wholly of debt taken from State Government, Government of

India, LIC, REC, PFC and commercial Banks etc. Further, in its last Tariff Order

BERC ha rejected the plea of BSEB; thus, the BSEB’s request to allow RoE does not

have any basis, and so it may be rejected by BERC.


BSEB is an integrated electricity utility constituted under Clause 5, Chapter – III of

The Electricity (Supply) Act, 1948. BSEB is mainly funded through loans and grants

from the Government of Bihar, loans and grants under specialized funding schemes

of the Government of India and loans from commercial lending organizations.

In states like Jharkhand, Punjab, Chhattisgarh and Kerala, where integrated SEB’s

like BSEB were / are operational, the Appropriate Commissions have allowed a

reasonable return on equity despite the fact they have capital structure which is very

much similar to that of BSEB and is mainly funded through loans/ grants from

respective State Governments.

In view of the above, BSEB has prayed for consideration of a reasonable return of

14% on capital grant provided by the State Government. As BSEB is a Board and not

a company so equity contribution can come only by way of grant and not equity.

Return on Equity would enable BSEB to contribute its share of funding in various

centrally funded schemes. Otherwise it would have to depend upon state government

for continuous support. This would limit the ability of BSEB to raise funds for

investment in the sector. Hence BSEB has requested to provide reasonable return on

the capital provided by the State Government.


The Commission agrees with suggestions made by the objectors. Since BSEB does

not have any equity base, return on notional equity as proposed by BSEB cannot be

allowed.

3.2.12 Issue: Transmission & Distribution Losses

M/s Dadiji Steel, M/s Kalyanpur Cements, Bihar Industries Association, Bihar Steel

Manufacturer’s Association, M/s Gangotri Iron & Steel Company Limited, Bihar

Chamber of Commerce, Central Bihar Chamber of Commerce, South Bihar

Industries Association, Divisional Chamber of Industry & Commerce, North Eastern



Bihar Chamber of Commerce and Industries, Eastern Bihar Industries Association

and M/s Patwari Steel Private Limited have objected to T&D loss trajectory as

proposed by the Board for FY 2012-13. T&D loss projected by the Board is 42% for

the FY 2011-12 and 41% for the FY 2012-13 as against the Commission’s target of

29% for FY 2011-12 and 27.5% for FY 2012-13. The stakeholders also submitted

that the Commission should take strong action against the Board for their

ineffectiveness in reducing T&D losses as the consumers have to suffer for the

inefficiency of the Petitioner.

They further stated that the approval of higher T&D loss than what is actual for the

HT consumers would result into indirect cross-subsidy and will also impose additional

burden on a HT consumers.

M/s Bal Mukund Concast Limited stated that the actual technical line loss right from

the transmission system upto the level of distribution is normally 12% to 14% of the

total energy fed into the system and suggested that the Commission should give

target to achieve T&D loss level of 14% by FY 2017-18.

The Consumers during the public hearing stated that the Board should make all-out

effort to bring down its T&D losses. They stated that the Board should provide the

road map for loss reduction.


The Board submitted that the Commission in the Tariff Order for FY 2011-12 had

restated the T&D loss levels for BSEB on account of reassessment of sales based on

restricted hours of supply. The T&D loss levels were fixed at 29%, 27.5% and 26%

for 2011-12, 2012-13 and 2013-14, respectively.

The Commission had restated norms of unmetered consumption for Kutir Jyoti

connections in rural areas from 30 units per month to 18 units per month and

Agriculture connections from 2000 units per annum to 1485 units per annum. Such

restated consumption norms are not reflective of the actual consumption by these

categories and is adding to the T&D losses of the BSEB.

On account of the high level of T&D losses and the disallowances of costs in the

previous Tariff Order issued by the Commission, BSEB is incurring substantial

financial loss. Consequently there have been occasions when it has not able to meet

the cost of power purchase and O&M expenses. This is also adversely affecting the



BSEB’s ability to undertake network improvement/ extension and loss reduction

works. Accordingly, BSEB’s ability to reduce losses in the FY 2011-12 and FY 2012-

13 have been restricted and the losses have remained at the 44% level as recorded

in FY 2010-11. Hence BSEB has filed the ARR petition based on actual loss level.

BSEB further submitted that it is making sincere efforts to reduce distribution losses

by providing meters to unmetered consumers, undertaking network up-gradation/

improvement projects and undertaking R-APDRP projects in selected towns. BSEB

has also been engaged in conducting raids in theft prone areas to catch

unscrupulous consumers and curb malpractices adopted by such consumers.

However, even after such concerted efforts, the losses of BSEB have not come down

owing to the fact that a large number of consumers (approximately 27 lakhs) are

being added in the rural areas under BPL connections under RGGVY scheme.

Substantial expansion of the network in rural areas has also led to increased

exposure of network to pilferage/theft. Hence the losses have not come down even

after concerted efforts by BSEB.


The Commission fully agrees with the views of the consumers and feels that the

Petitioner has failed to show improvement in the T&D loss reduction. The

Commission does not find any merit in passing on the inefficiencies of the Board in

the past and present to the consumers beyond the loss levels approved by the

Commission. Therefore, the Commission has also decided to continue with the

trajectory approved in its Tariff Order for FY 2011-12. The Commission has also

given directives to the Petitioner for submission of a detailed T&D loss reduction road

map so that the Petitioner is able to achieve the trajectory as laid down in the

previous Tariff Orders.

3.2.13 Issue: Non-Tariff Income

M/s Balmukund Concast Limited has observed that the Petitioner has projected the

non - tariff income of Rs 55.11 Cr. only for FY 2012-13 as against Rs 168.23 Cr.

approved by the Commission for FY 2011-12. Also, the Board has purposely kept the

non-tariff income at lower level for FY 2012-13 to increase the revenue gap and this

has no basis.




The BSEB submitted that it has not proposed DPS and interest on investment as part

of non- tariff income. The detailed justification for the same is provided in point no.

2.23 of tariff petition for FY 2012-13.


The Commission will consider the views of the objectors about Non-Tariff income

while approving the costs. While 5% of DPS reflected in the accounts as recoverable

has been considered as non tariff income, carrying cost of DPS has allowed as cost.

3.2.14 Issue: Government grant and subsidy

M/s Dina Iron & Steel, Bihar Chamber of Commerce, Central Bihar Chamber of

Commerce, South Bihar Industries Association and Divisional Chamber of Industry &

Commerce submitted that the Government grant should not be used to cover higher

T&D loss of BSEB. From the very beginning Government grant is being paid directly

to NTPC and is meant for power purchase. ARR and tariff till date have been fixed

taking Govt. grant as resource gap grant; and the reason behind increasing the Govt.

grant from Rs. 60 Cr. to Rs. 90 Cr. was the increase in power purchase cost due to

use of imported coal by NTPC. It was also stated that the Government cannot use

public money to finance inefficiency and theft. Such a practice, if allowed will lead to

higher inefficiency and purpose of tariff fixation will be defeated.

M/s Balmukund Concast Limited objected to the Board’s proposal to consider only Rs

124.26 Cr. as State Government subsidy to consumers. It was suggested that the

Commission should take into consideration the full amount of the grant received from

State Government for the purpose of subsidy to consumers.


It is here necessary to take into consideration that the BSEB is owned by

Government of Bihar. Any financial losses incurred by BSEB should be compensated

by owner of BSEB. The Commission has also appreciated this fact in its Tariff Order

for FY 2011-12 dated 1st June, 2011, while disallowing the request of BSEB for re-

fixing higher T&D loss reduction trajectory and observed that “if BSEB is not able to

meet loss reduction trajectory due to implementation of Government sponsored

RGGVY scheme, then it should ask the State Government for subsidy to compensate

for the increased T&D losses”.



Treatment of resource gap funding is done on the basis of direction received from

Energy department of the Government of Bihar. The State Govt. has clarified that the

resource gap funding will be first used to compensate BSEB for financial losses

arising on account of consideration of normative T&D losses as against actual T&D

losses. Remaining amount of resource gap funding will be used for subsidizing

agriculture and rural consumers.

State Government grant provided for replacement of meter and conductor is capital

grant and not revenue grant. From the capital grant provided by State Government,

assets are created based on the purpose for which grant is provided.


The objections by the objectors and response from the Board are noted. The

Commission has addressed the issue related to Government grant and subsidy in

detail in this tariff Order. Government grant has been treated as per the clarification

issued by the State Government in this regard.

3.2.15 Issue: Tariff rates

According to Bihar Chamber of Commerce the BSEB has proposed sharp tariff hike

for all consumers, particularly industrial consumers which is agains the norms and

objective of tariff fixation.

Central Bihar Chamber of Commerce, South Bihar industries Association, Vidyut

Upboghta Sangarsh Samiti, Eastern Bihar Industries Association have opposed the

proposed tariff hike for FY 2012-13 in fixed charges, energy charges and

miscellaneous charges. It has been pointed out that the Board has proposed around

50% tariff hike for FY 2012-13 which will create an extra burden on the consumers

across all the consumer categories which is not justifiable.

Shri Doman Singh, was of the view that there has been a substantial increase in

demand and energy charges for the domestic consumers below and upto 5kW single

phase supply as well as for domestic consumers with 5kw and above three phase

connection. He quoted tariff schedules of Haryana and Gujarat, highlighting that the

fixed charges in these states for domestic consumers is at concessional rates. The

Consumers also suggested that since BSEB is already charging fixed cost in the

shape of fixed charges, separate development charges should not be allowed.




The Board submitted that tariff has been proposed in view of the increase in various

cost components and gap between ARR and revenue from projected sale at existing

tariff. BSEB has worked out its ARR Requirement based on the BERC (Terms and

conditions for determination of Tariff) Regulations, 2007.

The Petitioner has given reference to Clause 8.3.21 of the Tariff Policy and submitted

that conditions of other States vastly differ especially in respect of own generation

and power purchase mix, thermal & Hydel mix, deficit/surplus in power, consumer

mix and cost mix. The tariff rates in Bihar are therefore not comparable with other

States without consideration of these inputs to the sector.

The BSEB further submitted that it has to incur fixed and variable costs for its

operations. Fixed charges are levied for recovery of fixed costs and energy charges

are levied for recovery of variable costs. Proposed increase in fixed charge reflects

the increase in fixed costs of BSEB. Prudent tariff structure is required for the

recovery of fixed charges and variable charges.

For FY 2012-13, BSEB has proposed total ARR of Rs. 7898.13 Cr. out of which Rs.

2600.51 Cr. are of fixed nature while Rs. 5297.61 Cr. will be used for power purchase

and fuel cost of own generation. Currently, BSEB is able to recover only Rs. 687 Cr.

& Rs. 1109 Cr. working out to 26% & 43% of fixed costs from demand/fixed charges

based on the existing tariff & proposed tariff respectively.

BSEB further submitted that the proposed changes in tariff are as per the cost

incurred by BSEB in providing these services. Any income earned from this will

ultimately passes on to consumers by way of reduced ARR.

Development Charges are being proposed for recovery of cost incurred by BSEB

while providing new connection. Cost is proposed to be recovered one time only as

development charges.


1 “For achieving the objective that the tariff progressively reflects the cost of supply of electricity, the SERC would notify roadmap within six months with a target that latest by the end of year 2010-2011 tariffs are within ± 20 % of the average cost of supply. The road map would also have intermediate milestones, based on the approach of a gradual reduction in cross subsidy”



The Commission has endeavoured to allow a reasonable and balanced tariff in this

order keeping in view practical and operational aspects and constraints. While the

Commission has endeavoured to determine the tariff to meet the ARR of BSEB,

lower tariff for smaller consumers and gradual reduction in cross-subsidy has also

been done.

3.2.16 Issue: Minimum Monthly Charge (MMC)/ Annual Minimum Guarantee (AMG)


Chamber of Industry & Commerce, Bihar Steel Manufacturers Association, Kalyanpur

Cements, M/s Gangotri Iron & Steel Company Limited and M/s Dadiji Steel limited

have stated that in Tariff Order for FY 2011-12 the Commission was of the view that

MMC needs to be gradually phased out. Further, it was stated that the Commission

was of the view to convert MMC to Annual Minimum Guarantee in some of the HTS

category to facilitate the consumers to cover the consumption in one financial year.

It was also suggested that the Commission should not provide any Annual Minimum

Guarantee/ Monthly Minimum Charges (AMG/ MMC) in the Tariff Order and if it is at

all provided, proportionate reduction both in demand and energy charges be allowed

by the Commission if the hours of supply is less than committed hours of supply by

the Board.

Bihar Steel Manufacturers Association, Bihar Chamber of Commerce, M/s

Balmukund Concast Limited and M/s Gangotri Iron & Steel Company Limited have

pointed out that the Petitioner has proposed a demand charge of Rs 900/KVA/ month

for HTSS consumers which is too high demand charges and has no basis. They were

of the view that the demand charge to HTSS consumer be kept at par with that of

Jharkhand. M/s Gangotri Iron and Steel Company Limited has suggested that the

provision of fixing contract demand on the basis of 600 KVA per MT should not be

allowed and the consumer should be allowed to contract as per their requirement

which is recorded in the electronic meter and not on the basis of the connected loads

of induction furnaces.

M/s Gangotri Iron & Steel Company Limited and M/s Bal Mukund Concast Limited

were of the view that demand charge for most of the HT consumers is taken as 85%

of the contract demand, however, in case of HTSS consumers the demand charges

are 100%, and no basis has been given for the discrimination.




MMC is a normally accepted practice in many states in the country and the BSEB

accordingly prayed for consideration of the Commission. This has already been

settled in the appeal made against the Tariff Order issued by BERC for the FY 2008-

09 by the Hon'ble APTEL.

For FY 2012-13, BSEB has proposed total ARR of Rs. 7898.13 Cr. out of which Rs.

2600.51 Cr. are of fixed nature while Rs. 5297.61 Cr. will be used for power purchase

and fuel cost of own generation. Currently, BSEB is able to recover only Rs. 687 Cr.

& Rs. 1109 Cr. working out to 26% & 43% of fixed costs from demand/fixed charges

based on the existing tariff & proposed tariff respectively. In such scenario, it is very

much necessary to levy MMC on consumers so that BSEB can at least recover its

fixed cost.

Further, The Objector is not burdened by MMC as Government of Bihar is assisting

them under Bihar Industrial Policy 2011. If the actual consumption during a month

falls below MMC the State Govt. will compensate BSEB with the equivalent amount,

on behalf of the consumer.

The Board submitted that the method of billing for HTSS consumers is based on the

decision taken at the time of creation of this category with mutual consent of the

BSEB and the representatives of Bihar Steel Manufacturer Association.

This matter was raised during earlier tariff proposals and was settled in the last Tariff

Order of the BERC. The contract demand on the basis of 600 KVA/MT capacity was

the original basis taken into consideration for creating new category of HTSS and the

same method is in use for more than 10 years. However, new HTSS units have been

allowed to have contract demand as per technical specification of the machineries.

The Commission has already agreed to follow the practice of other SEBs to fix the

contract demand as per technical specifications in respect of new units. Conditions of

other States vastly differ especially in respect of generation and power purchase mix,

deficit/surplus in power, consumer mix and cost mix. The tariff rates are therefore not

comparable with rates in other States without consideration of sector inputs.

BSEB stated that the objective of providing for demand charge is to ensure efficient

network utilization. Considering that BSEB has installed large infrastructure for

distribution of energy, for the upkeep of which it incurs costs like depreciation,

interest cost, R&M and O&M costs etc., The consumers should utilize the network to



an optimal level failing which BSEB will not be able to recover its returns on

investment and other fixed costs. Hence in order to ensure recovery of the returns on

investments and other fixed costs, a demand charge is proposed to be levied.

Further this is an accepted practice in most of the states in the country and BSEB

has accordingly prayed for consideration of the Commission. This issue has already

been settled in the appeal made against the Tariff Order issued by BERC for the FY

2008-09 by the Hon'ble APTEL.

As per Section 45 (2) of the Electricity Act 2003

“(2) The charges for electricity supplied by a distribution licensee shall be -

(a) fixed in accordance with the methods and the principles as may be specified by the concerned State Commission;

(b) published in such manner so as to give adequate publicity for such charges and prices.

(3) The charges for electricity supplied by a distribution licensee may include -

(a) a fixed charge in addition to the charge for the actual electricity supplied;

(b) a rent or other charges in respect of any electric meter or electrical plant provided by the distribution licensee.

(4) Subject to the provisions of section 62, in fixing charges under this section a distribution licensee shall not show undue preference to any person or class of persons or discrimination against any person or class of persons.

(5) The charges fixed by the distribution licensee shall be in accordance with the provisions of this Act and the regulations made in this behalf by the concerned State Commission.


The Commission has noted the objections and response and has taken appropriate

decision in this regard. On the issue of MMC, the Commission is of the view that it

needs to be gradually phased out. Accordingly, AMG for HT consumers has been

done away with in FY 2012-13.

3.2.17 Issue: Tariff rebates

Rebate for timely payment: The Petitioner has proposed a rebate of ten (10)

paise/unit for LT consumers and one (1) paise / unit for HTSS consumers for paying

energy bills on or before due date of payment. Some HT Consumers suggested that

same rebate of ten (10) paise/ unit as being allowed to L.T. consumers should be



allowed to HTSS and HT consumers, so that there may not be any discrimination

among various classes of consumers of LT and HT. Bihar Chamber of Commerce,

Central Bihar Chamber of Commerce, South Bihar Industries Association and

Divisional Chamber of Industry & Commerce have suggested to introduce Advance

Payment as an option for security deposit and interest paid on such advance

payment should be equal to DPS charged from customers.

Load factor rebate: The Consumers have opposed the Petitioner’s proposal to

withdraw the rebate for higher consumption on excess units consumed and

suggested that the load factor rebate should be allowed in line with the earlier Tariff

Orders for FY 2008-09 and FY 2010-11.

Power Factor rebate: M/s Balmukund Concast Limited have suggested to allow the

rebate for improvement in power factor over 0.9. Bihar Chamber of Commerce has

stated that power factor goes down due to frequent trippings and inferior quality of

power supply. Further, they stated that there should be no penalty for power factor

between 0.85 and 0.90.


Prompt payment rebate: It is responsibility of consumer to pay bill in time and for the

discharge of this responsibility consumer requires no incentive.

On Advance Payment: Interest on Advance payment and DPS cannot be treated in

the same manner. DPS is charged as penalty and hence it has higher rate of 18%

per annum.

Load Factor rebate: BSEB submitted that it does not see any merit to continue the

load factor rebate. Bihar is a power deficit state, at current scenario BSEB is

procuring power through short term and medium term sources to meet the increased

demand of the state. The cost of procuring power from such sources is high and

therefore increased consumption results in increased power purchase cost for BSEB.

The load factor rebate is against the conservation of power and it may increase the

power purchase cost. The under recovery of cost will get reflected in higher rate for

other consumer categories.

Power Factor Rebate: Higher power factor helps in reducing losses and improve

system voltage so it is the responsibility of all consumers to improve power factor.



The consumers of the state have taken steps to improve system and in this context

the proposed power factor rebate is appropriate.

Neighbouring states are also giving power factor rebate at higher power factor as

compare to Bihar. Power factor rebate is given at 97%, 95%, 95% & 92% by Orissa,

Madhya Pradesh, Uttar Pradesh & West Bengal respectively..


The Commission has taken into consideration the views of the objectors and

response of the Petitioner and allowed different types of tariff rebates accordingly.

3.2.18 Issue: Supply at premium rate

M/s Dadiji Steel Limited and Bihar Steel Manufacturers Association have stated that

it is statuary obligation of the Board to supply electricity continuously according to the

needs of the consumers and for which they cannot charge premium tariff under any

circumstances.



that it is highly unlikely that the Board would be able to ensure uninterrupted power

supply even in so called “premium supply” areas. They also added that under the

present field conditions, first norms should be fixed as to what constitutes “premium

supply”. Further, Bihar Chamber of Commerce opposed the Board’s proposal of

defining “premium supply” as supply of 600 hours in a month. It was also suggested

that in case the supply hours of the premium area falls below 24 hrs. a penalty

should be imposed on the Petitioner.


As directed by the Commission in its Tariff Order for FY2011-12, BSEB has proposed

a Supply Premium to be payable by consumers who receive additional hours of

supply as compared to other consumers. It is proposed that all LT consumers except

Kutir Jyoti and Agricultural and HTS I consumers who lie in such areas which will

receive continuous supply atleast for 600 hours in a month will be required to pay

additional 10% on demand/fixed and energy charge and in MMC as supply premium.

The continuous supply mean normal supply excluding the duration of grid failure,

plant failure of power supplier, any force majeure condition, scheduled shut down,



emergent breakdown and restriction of power supply by the Commission under

section 23 of Electricity Act, 2003.

Which provides inter-alia

“23 Directions to Distribution Licensee: if the appropriate Commission is of the

opinion that it is necessary or expedient so to do for maintaining the efficient supply,

securing the equitable distribution of electricity and promoting competition, it may, by

order, provide for regulating supply, distribution, consumption or use thereof .”

Areas to which BSEB intends to supply electricity close to 600 (six hundred) hours

will be notified by BSEB and the proposed Supply Premium will be levied after such

notification.


The Commission has noted the views of objectors and response from the Petitioner.

However, the Commission has already specified in the Tariff Order for FY 2011-12

that 10% premium on demand/fixed and energy charge and in MMC tariff shall be

applicable to the consumers in the areas where BSEB intends to supply electricity

close to 24 (twenty four) hours. Such areas shall be notified by BSEB and the

premium shall be levied after notification of such area by BSEB.

Commission also clarifies that the Petitioner can charge premium over the normal

tariff from consumers of such areas getting nearly 24 hours of supply from 33kV or

11 kV feeders to all LT categories and 11 kV categories except Kutir Jyoti and

Agricultural consumers who will be subsidised by the Government. The continuous

supply shall mean the normal supply excluding the grid failure, any force majeure

condition, scheduled shut down and emergent breakdown.

3.2.19 Issue: ToD Tariff



that the TOD tariff should be made beneficial to consumers, so that more and more

consumers voluntarily opt for it. The present ToD tariff acts as a dis-incentive to the

Consumers as they are charged 20% extra during peak hour while the discount

during off-peak period is only 15%.




Time of Day (TOD) tariff, is recognized globally across electricity industries, as an

important Demand Side Management (DSM) measure for incentivizing consumers to

shift a portion of their demand from peak to off-peak period, thereby improving the

system load factor by reducing the demand during the peak period and reducing the

requirement to purchase costly power during this period.

The table below presents the status of TOD tariffs as implemented in various states

of the country:

Table 5: Status of TOD tariff implemented in variou s states States Peak Hours Off Peak Hours

Assam 160% 83%

Chhattisgarh 130% 85%

Jharkhand 120% 85%

Kerala 130% 85%

Madhya Pradesh 130% 90%

Tamilnadu 120% 95%

Tripura 140% 60%

Uttaranchal 125% 95%

Assam 160% 83%

Further, BSEB would like to state that the TOD tariffs as applicable in most of the

states (Maharashtra, West Bengal, HP, MP, Gujarat, Uttarakhand, UP, Kerala, Tamil

Nadu, and Tripura) are mandatory for HT and EHT Consumers.


The Commission has noted the views of the objectors and response from the

Petitioner. The Commission is of the view that gradually TOD tariff should be made

mandatory.

3.2.20 Issue: Open Access

M/s Dadiji Steel Limited, Bihar Steel Manufacturers Association stated that the Board

should be directed to provide the open access facility to its high tension supply

consumers, who had given notice to them for providing open access.

M/s Gangotri Iron and Steel company Limited has highlighted that as per notification

issued by Ministry of Power vide No. 23/01/2008 – RXR (Vol – IV) dated 30.11.2011,



the consumer having contract demand of one (1) MW and above are to be deemed

as open access consumers and the SERC does not have to determine the tariff of

such consumer treating them as open access Consumer. It has been suggested that

the Commission should determine the tariff for HTSS consumer treating them as

open access consumer and shall specify the stand by charge in respect of demand

charge.


There is separate regulation issued by the BERC for Open Access, which governs

issues related to open access. The same cannot be deliberated in the present tariff

petition.


The Commission would like to encourage Open Access to consumers. While cross

subsidy surcharge has been retained at the level of FY 2011-12 at 50% of the value

specified in Tariff policy, other terms and conditions of open access will be

considered in Open access regulations.

3.2.21 Issue: Seasonal Tariff

Central Bihar Chamber of Commerce, South Bihar Industries Association and

Divisional Chamber of Industry & Commerce have suggested that the tariff rates

should be rationalised in view of the State Government Policy to encourage and

invite fresh investment in sugar mills, rice mills and cold storages etc. which operate

during certain period of the year. i.e having seasonality of operation.


BSEB submitted that it has proposed the changes in Seasonal tariff based on the

marginal cost of power procurement of the Board.


The objections and response are noted by the Commission and has been dealt in

Chapter 6 of this Tariff Order.

3.2.22 Issue: Special Plea: Railway Traction tariff



Senior Divisional Electrical Engineer (East Central Railway, Danapur) stated that the

Board’s tariff for Railway traction has been unreasonably and disproportionately high.

He stated that the Board has revised the traction tariff 4 times since 2001 which has

risen by 113.96% taking into considering the current Board’s proposal for FY 2012-

13. In the objections raised by the East Central Railway representative It was pointed

out that the Board Average Cost per unit is higher than JSEB, UPPCL and DVC. The

Objectors has opposed the Board’s proposal for imposing penalties on exceeding the

Contract Demand at Railway TSS as this is mainly due to various external factors

which are beyond the control of Railways.

Senior Divisional Electrical Engineer (East Central Railway, Danapur) has also

opposed the Board’s proposal that ‘the Transformer Capacity of HT Consumer (RTS)

shall not be more than 200% of the Contract Demand’. He has requested the

Commission to exempt the RTS from the Board’s Terms and conditions and allowing

them to use the RDSO’s standard designed Transformer Capacity.

The objector refered to Article 287 of the constitution and stated that the Power tariff

for the Railways should be reasonable and should not be very different from the

actual cost incurred by the supply companies for the generation and distribution of

Power.

The Objector has also requested the following to the Commission:-

a) The Billing demand should not be taken as maximum demand recorded during

the month or 75% of the Contract Demand.

b) Load factor rebate for calculating base energy should be 25%.

c) Power factor rebate should be as per existing norms.


BSEB submitted that Bihar has different consumer mix, power purchase cost and

fixed costs so Electricity tariff in Bihar cannot be compared with other states. BSEB

has proposed tariff average tariff hike of 56.77% but for railways it has proposed only

36.79% tariff hike. Average Revenue realisation as compare to Cost to Service is

89% and that is same as approved by the Commission in its Tariff Order for FY 2011-

12. The Board submitted the following response over the issues raised by Railway’s

representatives:



a) Abnormal hike in railways traction tariff: Proposed tariff hike is as per revenue

requirement of BSEB and reflects the cost of supply of electricity.

b) Penalty for exceeding contract demand: The Contract demand allowed to

Railways forms a part of the contract between railways and BSEB. It is logical to

include as a part of the contract provisions for redressal of violation of the

contract conditions. The penalty for demand violation is a part of such provisions.

Further similar penalty provisions have been provided for contract demand

violation by other HT consumer categories. It would be against the natural justice

to treat consumers differently for violation similar conditions of contract. Further if

the consumers are allowed to draw power from the grid without any restriction on

demand, this would detrimental for grid security, safety of local network and

would inhibit planning of power purchase.

c) Transformer capacity: Relaxation in this regard have been provided to Railways

over conditions able to other HT categories, while other HT category cannot have

transformer capacity more than 150% of contract demand whereas Railways can

have transformer capacity equal to 200% of contract demand. Further Railways

are entitled to have a standby arrangement of equivalent capacity. If the Railways

require transformer of higher capacity then they can request BSEB for increase in

contract demand.

d) Billing demand: The request of Railways cannot be accepted as the treatment in

this regard has to be at par with treatment to other HT consumers.

e) Load Factor: BSEB has realised that most of the TSS connections of railways

are having load factor of more than 50%, keeping this in view the load factor of

50% has been proposed in this tariff petition. Since Railways is maintaining load

factor of more than 50% BSEB does not see this as a cause of concern for

Railways.

f) Power factor rebate: Higher power factor helps in reducing losses and improve

voltage so it is responsibility of consumer to improve power factor and to

encourage consumer to maintain high power factor such tariff structure is being

proposed. Neighbouring states are also giving power factor rebate at higher

power factor as compare to Bihar. Power factor rebate is given at 97%, 95%,

95% & 92% by Orissa, Madhya Pradesh, Uttar Pradesh & West Bengal

respectively.



Objector’s rejoinder over Petitioner’s submission

The Objector stated that the Railway is public serving organisation. Hike in Railway

traction tariff by 36.79% in one year will affect the E.C. Railway’s economic condition.

He stated that the load of Railway is of fluctuating nature and load increase in a

traction feeding zone for a short period i.e. 15 to 30 minutes. This leads to increase in

maximum demand.

Over Transformer capacity issue the objector stated that Transformer capacity is of

21.5 MVA a standard design based on RDSO specification. It is designed to feed the

minimum two feeding Zone so that the train operation may not be interrupted in case

of failures.

The Objector again replied to the Board’s response and opposed the Board’s

proposal pertaining to Billing Demand, Load factor issue and Power factor rebate.


The Objections and response from the Board are noted.

The Commission is of the view that Article 287 of the Constitution provide expemtion

from taxes on electricity. As per the Article 287 of the Constituion:

“……, no law of a state shall impose, or authorise the imposition of, a tax on the

consumption or sale of electricity (whether produced by a Government or other

persons), which is –

a) Consumed by the Government of India, or sold to the Government of India for

consumption by that Government; or

b) Consumed in the construction, maintenance or operation of any railway by the

Government of India or a railway company operating that railway, or sold to that

Government or any such railway company for consumption in the construction,

maintenance or operation of any railway,….”

The Commission will take a rational reasonable view while determining tariff and

other terms and conditions of supply for Railways Traction Services. However, the

Commission does not agree to the proposal of increasing the billing demand and

load factor.



3.2.23 Issue: Matter related to Electricity Supply code

Bihar Chamber of Commerce, Bihar Industries Association, Central Bihar Chamber

of Commerce, South Bihar Industries Association, Divisional Chamber of Industries

and Commerce, M/s Gangotri Consumers have suggested if the Petitioner wants any

change in the provisions of Bihar Electricity Supply Code, suitable amendment may

be sought in the court. Further, it has been pointed out that there are various other

changes proposed by the Petitioner such as voltage surcharge, Security deposit,

accounting for partial payment, load factor and penalty for RTS, transformer capacity,

cap on overall rebate, withdrawal of rebate, tatkal connections, notice period for

disconnection, removal of any MMC or Fixed charge etc. All these changes proposed

by the Petitioner should be considered by way of amendment in Electric Supply

Code. It was suggested that the same should be dealt with separately and should not

be a part of tariff fixing exercise.


In this regard, no specific response has been provided by the Board.


The Commission is also of the view that generally the terms and conditions of supply

which are part of Electricity Supply Code should be considered through amendment

in the code and no revision should be made in the provision of Electricity Supply

code in the Tariff Order.

3.2.24 Issue: Security Deposit

M/s Kalyanpur Cement Limited, Central Bihar Chamber of Commerce, South Bihar

Industries Association and Divisional Chamber of Industry & Commerce objected to

the proposal of the Petitioner for enhancing the security deposit to the level

equivalent to estimated energy charges of three months. M/s Balmukund Concast

Limited has pointed out that the Board’s proposal is contrary to the provisions of

Bihar Electric Supply Code, 2007. Moreover, the Board is not investing the amount

deposited by the consumers appropriately like in fixed deposit or in capital works.


As per the Bihar Electricity Supply Code, 2007 the deposit shall be accepted in the

form of cash, cheque or draft in case of LT consumers and in the form of draft or



banker’s cheque in case of HT consumers. Also as per the Code the distribution

licensee shall pay interest, at the bank rate notified by the Reserve Bank of India

from time to time on such security deposits taken from the consumers. Moreover,

cash security deposit is taken because the supply to the consumer is given initially on

credit basis. The cash is required to meet the monthly expenditure on revolving basis

to provide electricity to consumer. This is also in-line with the Section 47(4)2 of the

Electricity Act 2003.

BSEB has proposed to increase the initial security deposit of the consumer (except

Kutir Jyoti rural and Kutir Jyoti urban) equivalent to the estimated energy charges

including fixed/demand charges for a period of three months as per the Tariff Order

issued by the Commission for FY 2006-07. This takes into consideration the time

involved in the process of Consumer meter reading till the receipt of the payment of

the bill by the consumers. This is further supported in case of realization of payment

through cheques.

Any concessional funding provided by consumers helps BSEB in reducing the cost of

supply which ultimately benefits the consumers of the state. The interest rates

suggested by the objector for paying interest to the consumers for their security

deposits will increase the cost of supply which will ultimately result in increase in tariff

rates.


The apprehension of the objector and the response of the Petitioner are noted. The

Commission support the view of the consumers.

3.2.25 Issue: Adjustment in case of partial bill payment

Bihar Industries Association has raised objections against the proposed adjustment

in case of partial bill payment as this infringes section 56 of the Electricity Act, 2003.

It was suggested that consumer should have the option to decide the order of

adjustment against various dues incase of partial payment.


2 “The distribution licensee shall pay interest equivalent to the bank rate or more, as may be specified by the concerned State Commission, on the security referred to in sub-section (1) and refund such security on the request of the person who gave such security.”



BSEB submitted that the adjustment in case of partial bill payment is proposed based

on the statutory requirement and occurrence of liability. In case of partial payment

made by the consumer the adjustment of the payment made by him will be done in

the following order: 1) Statutory taxes and duties, 2) Additional Security, 3) DPS on

arrears, 4) Principal arrears and 5) Current bill.


The objections and response are noted by the Commission. This matter has been

dealt in chapter -8 of the Tariff Order.

3.2.26 Issue: Delayed Payment Surcharge (DPS)

M/s Balmukund Concast Limited, Bihar Chamber of Commerce, Central Bihar

Chamber of Commerce, South Bihar Industries Association and Divisional Chamber

of Industry & Commerce opposed the Board’s proposal of DPS @ 1.5% per month or

part thereof if the bill in full is not paid before the due date specified in the bill for all

categories of HT and HTSS consumers. It was suggested that the DPS to be levied

for HT and HTSS consumer on daily basis @ 0.025% per day, on the “Principal

Outstanding” of the bill.

M/s Kalyanpur Cement and M/s Patwari Steel Private Limited suggested that the

Board should keep a separate account of DPS/ surcharge for separate different

heads like energy bill, electricity duty, arrears, DPS, surcharge etc. They suggested

that no DPS should be charged, after the line is permanently disconnected.


The Board submitted that as per the existing terms and conditions the consumer is

required to pay surcharge on the entire principal amount even if the consumer has

made partial payment. BSEB has proposed to replace the word “principal” with

“balance” so that the consumers who pay partial bill amount will be required to pay

DPS only on the remaining amount and not the entire amount. This would incentivize

consumers to pay their bills (even partial) and help BSEB in improving its cash

collection. This change is being proposed for both LT and HT consumer categories.

Further BSEB submitted that DPS is a penalty for not paying bills in time and it

should be higher than the state bank prime lending rate (the cost of fund) and also a

component for penalizing the consumer for default. Currently, state bank advance



rate is 14.75% compounded annually, so simple interest rate of 18% per annum of

DPS is justified.


The Commission is of the view that DPS @ 1.5% per month is reasonable.

3.2.27 Issue: Power Factor Surcharge and Voltage Surcharge

M/s Kalyanpur Cement and M/s Patwari Steels Private Limited have stated that with

reorganisation of the then existing Bihar into Bihar and Jharkhand, the Board has

been left with majority of low tension consumers who constitute 85% of the BSEB’s

present load. Thus the industries are finding it difficult to maintain a good power

factor. Representative of Vidyut Upbhokta Sangharsh Samiti has also suggested the

voltage surcharge at rate of 7.5% is not justifiable and should not be allowed.


The Board submitted that higher power factor helps in reducing losses and improve

system voltage. So it is the responsibility of all consumers to improve power factor.

The consumers of the state have taken steps to improve system and in this context

the proposed power factor rebate and surcharge is appropriate.

On voltage surcharge issues the Board stated that it would like to incentivize

consumers to receive supply at higher voltage levels. Receiving supply at higher

voltage level is beneficial to both consumers and BSEB. By taking supply at higher

voltage level, Consumers receive better quality and reliability of supply whereas

BSEB is able to control its losses and system overloading. Single and three phase

tariff is kept same for smooth processing.


The objection by objectors and response from the Board has been noted by the

Commission and the same has been considered during the examination of tariff

petition for FY 2012-13.

3.2.28 Issue: Compliance of Directives

Consumers have raised the issue of non-compliance of directives of the Commission

given in its Tariff Orders of different financial years.




BSEB submitted that it has made efforts to comply with the various directives issued

by the Commission from time to time. The Status of compliance of each directive has

been given in the tariff petition submitted by the BSEB.


The compliance report of directives submitted by the Petitioner has been reviewed in

Chapter -9 of this Tariff Order.

3.2.29 Issue: Voltage wise cost of supply


Chamber of Industry & Commerce, M/s Balmukund Concast Limited, M/s Kalyanpur

Cement Limited and M/s Patwari Steel Limited suggested that the Commission

should ensure that determination of tariff/ revision of tariff should not be allowed

without taking into account the voltage-wise cost of supply of each category of

consumers.


As per Section 62(3) of the Electricity Act 2003,

“The Appropriate Commission shall not, while determining the tariff under this Act,

show undue preference to any consumer of electricity but may differentiate according

to the consumer's load factor, power factor, voltage, total consumption of electricity

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”.

Also, clause 8.3.1 and 8.3.2 of the National tariff policy says

“In accordance with the National Electricity Policy, consumers below poverty line who

consume below a specified level, say 30 units per month, may receive a special

support through cross subsidy. Tariffs for such designated group of consumers will

be at least 50% of the average cost of supply. This provision will be re-examined

after five years”.



“For achieving the objective that the tariff progressively reflects the cost of supply of

electricity, the SERC would notify roadmap within six months with a target that latest

by the end of year 2010-2011 tariffs are within ± 20 % of the average cost of supply.

The road map would also have intermediate milestones, based on the approach of a

gradual reduction in cross subsidy”.

From the above it is clear that the Electricity Act 2003 as well as National tariff Policy

provide for usage of average cost of supply rather than voltage wise cost of supply

for determination of cross subsidy reduction road map. Accordingly, the BSEB would

like to inform the objector that such a requirement is neither under ambit of law nor

mandatory under any regulation/ policy.

It is necessary to note that no act/policy/regulation provides for voltage level wise

determination of cost of supply and hence BSEB is not adopting the methodology as

proposed by Objector. As per National Tariff Policy, tariff should be determined

based on the average cost of supply and same methodology is adopted by BSEB.


The objections and response from the Board are noted. Voltage‐wise cost of supply

data is not available with BSEB for want of metering in all feeders. Board is directed

to make all‐out efforts to collect this information and do energy accounting/ audits.

However, the Commission has determine the ARR and tariff on average cost of

supply.

3.2.30 Issue: Transformer capacity for HT Services


Chamber of Industry & Commerce, Bihar Chamber of Commerce, North Eastern

Bihar Chamber of Commerce and industries, M/s Kalyanpur Cement Limited and M/s

Patwari Steel Limited have suggested that the Board’s proposal for revising the

contract demand of HT consumer except RTS consumers to 2/3rd of the

Transformer Capacity should not be accepted. They also suggested that limiting the

Transformer Capacity to 150% of contract demand is also not correct and higher

capacity Transformer should be allowed.




This measure was initiated to reduce the incidence of stress on the system (intended

or unintended) and reduce possibility of theft. It is statutory obligation of the board to

bring down losses and this is in line with the commitment of BSEB to bring down T&D

losses.


The Commission is of the view the existing provision in the Tariff Order for FY 2011-

12 may be continued.

3.2.31 Issue: Removal of grace period


Industries Association and Divisional Chamber of Industry & Commerce suggested

that the Board’s request for removal of grace period should not be allowed as it is

against consumer interest.


BSEB submitted that it does not see any merit to continue with the grace period as

due date provide sufficient time for the consumer to pay his bill. The grace period is

not workable as it impacts revenue of the BSEB; consequently the same amount gets

reflected in higher rate for other consumer category.


The objection and response are noted. The Commission is in favour of grace period

of 10 days.

3.2.32 Issue: Quality of Power

Various consumers/ consumer Associations suggested that the capacity of installed

transformers is not adequate which results in interruptions, breakdown, shutdown,

tripping etc. and therefore BSEB should install transformers with adequate capacity

matching with their demand.


Bihar is a power deficit state and BSEB has obligation to serve the consumers. In

order to fulfil its obligation, BSEB is expanding its network across the length and



breadth of the state. To meet the growing demand of electricity of existing and new

consumers, BSEB is purchasing power through short and medium term.


The Commission directs the Board to submit a comprehensive plan to improve the

quality of supply and service to consumers and meet the Standards of Performance

as stipulated in the Regulation.

3.2.33 Issue: Maintaining HT Consumer Base


Industries Association and Divisional Chamber of Industry & Commerce suggested

that the Board should endeavour to increase the HT consumer base so as to reduce

the burden from the existing HT Industries and all other paying consumers and

increase its financial viability.


The Board submitted that the change in consumer mix is not within the control of

BSEB.


The Commission appreciates the concerns raised by the objectors. As a step

towards reducing the burden on the HT consumers, the Commission has adopted the

approach of gradually reducing the cross-subsidy in its Tariff Order FY 2012-13.

3.2.34 Issue: Frequent revision of tariff and FPPCA charge s

M/s Kalyanpur Cement Limited and M/s Patwari Steels Private Limited, by giving

reference to Clause - 213 of the BERC (Terms and conditions for determination of

Tariff) Regulations, 2007, have submitted that within a span of seven (7) months

there have been two tariff revisions and this is third exercise of tariff revision.

M/s Dadiji Steel Limited, M/s Kalyanpur Cement Limited, Bihar Steel Manufacture

Association, M/s Balmukund Concast Limited, Vidyut Upboghta Sangarsh Samiti,


Chamber of Industry & Commerce, Bihar Chamber of Commerce and Eastern Bihar

3 No tariff or any part thereof shall ordinarily be amended more frequently than once in any financial year.



Industries Association have raised objections on frequent levy of FPPCA charges by

the Board. These consumers have stated that such frequent and massive increase in

the tariff rates by the Board within last twelve months has completely ruined the

financial position of the industries in the state.


The Board submitted that the factual position in the case referred by the objector is

as follows:

– The Tariff Order issued on 6th Dec 2010 was for FY 2010-11; – The Tariff Order issued on 1st June 2011 was for FY2011-12; – The Tariff Order likely to be issued in March 2012 will be for FY2012-13. The

tariff revision is likely to effective from April 2012.

Section 63(4) of the Electricity Act 2003 states that 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. Thus it is clear that there can be two revisions in a year

provided that the revisions lie in a different financial year. Thus the referred provision

of the EA 2003 is not likely to get violated in the situation referred by the Objector.

The Board further submitted that the FPPCA charges are levied on the consumers

after approval from the Commission only. It is within the powers to the Commission to

decide the modalities for recovery of difference between the power purchase rate

approved in the ARR and actual power purchase cost without adversely affecting the

cash flows of BSEB.


The Commission has noted the objections of the objectors and response of the

Petitioner. Additional cost/ surplus on account of Fuel and Power Purchase Cost

Adjustment (FPPCA) are passed on to the consumers for any increase or decrease

in fuel and power purchase cost. The central power generating stations revise their

cost as and when these changes in the costs need to be passed on to the consumer.

Therefore levy of FPPCA charge is in accordance with the provisions of Electricity

Act 2003 and BERC (Terms and Conditions of determination of tariff) Regulation,

2007.



3.2.35 Issue: Applicability of tariff category

Bhojpur Chamber of Commerce and Industry stated that the consumer with load

above 60 KW availing supply for commercial purpose should be considered under

NDS category rather than HT Category. M/s Bhola Ram Steels Private Limited has

suggested that in case a consumer has three different connections for Ferro Alloys

unit, Rolling Mill and Induction furnace in the adjoining campus with separation by

boundary walls, such consumers should have option for availing single connection for

these units under HTSS category.


The Board has stated that the power lies with the Commission to decide which type

of consumer will come under which category. The Board further stated that the issue

raised by M/s Bhola Ram steels Private Limited the Board stated that the matter

raised does not pertain to tariff petition for FY 2012-13, so the board has no comment

to offer. The objector may raise its concerns at the appropriate forum.


The objection and response are noted. The suggestions of consumer groups will be

considered while deciding the tariff for consumer categories.

3.2.36 Issue: Creation of new categories

M/s Dadiji Steel Limited has objected to the ARR and tariff proposal for FY 2012-13

of the Board in respect new tariff categories for HT consumers as well as new sub-

category for LT consumers (such as Temporary category, NDS-IV & Merger of LTIS-

I & II). Bihar Chamber of Commerce, Central Bihar Chamber of Commerce, South

Bihar Industries Association and Divisional Chamber of Industry & Commerce have

strongly objected to the Board’s proposal for creation of Construction Power with

25% extra charge. It was stated that construction Power should not be more that

10% extra and its billing demand should be same as other HT categories.


Industries Association and Divisional Chamber of Industry & Commerce were of the

view that further categorisation of NDS category for Hoardings is unnecessary and

should not be allowed. These Consumers have also opposed the Petitioner’s

proposal for applying higher tariff on merged LTIS category and compulsory demand



based tariff. Bihar Chamber of Commerce also stated that the HTSS tariff should be

available as an option for HT consumer and should not be made compulsory for any

class of consumers.

Representative from International Buddhist Council (IBC) of Buddha Gaya was of the

view that they should be considered under special tariff category.


New categories are formed based on the evolving load characteristics of consumers

and practical problems faced in the field. BSEB has proposed the merger of LTIS-I

and LTIS-II sub-categories. There would be uniform per HP fixed and minimum

energy charges. The merger would do away with the requirement of migration from

one sub-category to the other on change in connected load. This would facilitate the

consumers to increase or decrease the connected load with the requirement of the

business without change in sub-category. Further this would do away with the

disincentive to consumers/employees of BSEB to conceal the actual connected load

to prevent the shift from lower tariff category to the higher tariff category.

Regarding creation of new categories like construction power, temporary category,

NDS IV and merging of LTIS- I and LTIS-II, the Board has stated that, based on the

practical difficulties faced in the field, utility and capacities to pay, these categories

have been proposed by BSEB and It is for Commission to decide on proposal of the

BSEB.

On the issue of making HTSS category as option, the Board has stated that this

category has been designed keeping in view the specific need of the steel industry

and hence other categories cannot be allowed to opt for this category.


The Commission shall take prudent view on the matter of creation of new tariff

category while determination of ARR and Tariff Order for FY 2012-13. Further, the

Commission agrees with the view of the BSEB that the HTSS is a separate category

than the other HT category.

3.2.37 Issue: Release of Connection including tatkal conne ctions



Some LT consumer group pointed out that the Board takes a lot of time in releasing

new connections. Further, it was pointed out that the Board is charging the meter

cost and cost of service cable from the consumers while releasing new connections.

The Board should be more efficient in releasing new connections particularly the

Tatkal connections.


The Board has submitted that in the past it has received numerous requests from its

consumers for providing tatkal connections. In view of this demand of its consumers,

BSEB proposes this scheme under which all consumer categories other than High

Tension and Railway may avail benefit of this scheme. The general and

miscellaneous charges for the Tatkal connection will be 2 (Two) times the charges

approved under the head general and miscellaneous charges for normal new

connections. The connection under this scheme shall be released by BSEB in half

the time limit specified by the Commission in the Electricity Supply Code from the

date of completion of prescribed procedural formalities and payment of applicable

fees and charges. In case BSEB fails to release connection within this time limit,

BSEB will refund the additional amount to the consumer in the first energy bill. Higher

charges have been proposed to recover the higher cost likely to be incurred by BSEB

in providing connections in half the time proposed in Supply Code.


The Commission appreciates the concerns of the consumers. The Commission

appreciates that the Board needs to do a lot to improve quality of service to the

consumers particularly in respect of release of new connections. Directive has been

issued to the Board in this regard and the same is being reiterated in this Tariff

Order. The proposed introduction of the scheme of tatkal connections is accepted by

the Commission with some modifications.

3.2.38 Issue: Proposed sales for FY 2012-13 under Unmetere d Kutir Jyoti and

Agriculture category

M/s Dadiji steel Limited and Bihar Steel Manufacturer Association pointed out that

the Board in its tariff petition have stated that there are still 20 lakh un-metered

consumers. The Board has indicated the growth in the un-metered consumers and

has asked for approval of consumption norms of 30 units per connection per month



for Kutir Jyoti consumers both in respect for rural and urban areas. The Board has

projected to add 2746 tube-wells at a connected load of 20 kW each in the month of

December 2011 whereas there is no justification of the claim made by the BSEB.


The Board submitted that it has 3,02,914 Unmetered Kutir Jyoti consumers and the

Board will provide meter in a time-bound manner. New connections under Kutir Jyoti

category will be 21,82,603 and these will all be metered connections only. The Board

also stated that it is providing connections to 2764 tube wells under the NABARD

phase-II scheme of Minor Irrigation Department of Government of Bihar.


The Commission has considered the report submitted by the independent consultant

on assessment of consumption of Kutir Jyoti (Rural) and agriculture un-metered

consumers. The Commission has retained the consumption norms for these

categories at the level of FY 2011-12.



4 True Up of FY 2010-11

4.1 Background

4.1.1 As per the Sub-Clause 22 (1) & (2) of the BERC (Terms and Conditions for

Determination of Tariff) Regulations 2007

“The Commission shall undertake a review along with next Tariff Order, of the

expenses and revenues approved by the Commission in the current year Tariff

Order. While doing so, the Commission shall consider variations between approvals

and revised estimates / pre-actuals of the sale of electricity, income and expenditure

for the relevant year and permit necessary adjustments / changes in case such

variations are for adequate and justifiable reasons. Such an exercise shall be called

‘Review”.

“After audited accounts of the year are made available, the Commission shall

undertake a similar exercise as in sub-clause (1) above based on the final actual

figures as per the audited accounts. This exercise based on the audited accounts

shall be called ‘Truing up’. The truing up exercise for any year shall not ordinarily be

considered after more than one year gap after ‘Review’.”

4.2 True-up of ARR for FY 2010-11

4.2.1 Bihar State Electricity Board submitted a petition on 13th October, 2011 vide letter no.

Com/ FPPCA-136/2011-1659 for regulatory approval of the review of ARR for FY

2010-11 based on their provisional annual accounts. The Commission vide its Order

dated 3rd November, 2011 directed BSEB to submit its petition for review of the

expenses and revenues for the FY 2010-11 along with tariff petition for FY 2012-13.

Commission also directed BSEB that, if the final audited accounts for the FY 2010-11

are made available to the Commission along with tariff petition for FY 2012-13 or

during the course of hearing of the tariff petition for the FY 2012-13, a final true up of

the expenses and revenues for the FY 2010-11 shall be considered by the

Commission.



4.2.2 Subsequently, BSEB vide letter No. Com/ Tar-132/ 2011-392 dated 2nd March, 2011

submitted the audited annual accounts for FY 2010-11 along with the audit certificate

issued by CAG to the Commission and thereafter, BSEB has also submitted true up

petition for FY 2010-11 based on its audited annual accounts vide letter no. Com/

Tar-132/ 2011-451 dated 16th March, 2011.

4.2.3 The Commission had approved the ARR for FY 2010-11 vide its Tariff Order for FY

2010-11 (Case No. TP-3 of 2010) dated 6th December, 2010. Accordingly, now the

figures which were approved by the Commission in the Tariff Order for FY 2010-11

and audited annual account of FY 2010-11 would form the basis for approval of the

truing up for FY 2010-11. However, the Commission may re-visit some of the

approvals given as part of the Tariff Order process in case it feels the need to do so.

4.2.4 The truing up exercise for FY 2010-11 undertaken by the Commission is on the basis

of decisions & directives of the Commission in Tariff Order for FY 2010-11, audited

annual accounts for FY 2010-11 and BERC (Terms and conditions for determination

of Tariff) Regulations 2007. However, wherever deemed necessary, the Commission

has considered expenses based on prudency check and after considering the

efficiency parameters like T&D losses, generating stations plant operating

parameters, etc.

4.2.5 The component-wise description of licensee’s submission and Commission’s

analysis on the same is discussed in the subsequent sections.

4.3 Category wise energy sales


4.3.1 The Petitioner submitted the energy sales figures of 6139 MUs for FY 2010-11 on the

basis of audited annual accounts and as per Commission’s norms.

4.3.2 Further the Petitioner has submitted that as per the Tariff Order for the FY 2010-11,

the Commission considered agriculture consumption norm of 1485 units/ kW/annum

for FY 2010-11 i.e. considering 5.5 hours of average utilization per day for 270 days

in a year. Based on the norm of 1485 units/kW/annum, the consumption for FY 2010-

11 as approved by the Commission was 428 MU for the connected load of 2,88,100

kW.



4.3.3 The BSEB has computed the consumption by the agriculture consumers based on

the norms and methodology used by Commission. In the true-up petition, the BSEB

has reported actual load of 2,61,684 kW during FY 2010-11, though the annual

accounts of FY 2010-11 shows the agriculture load of 4,17,191 kW. The annual

account shows only the registered load of agriculture consumer and not the effective

load. Accordingly for the connected load of 2,61,684 kW, as reported by BSEB, and

based on the consumption norm of 1485 Units/kW/Annum as approved by the

Commission, the agriculture sales for FY 2010-11 works out to 389 MUs.

4.3.4 The Petitioner has requested the Commission to approve the total sales as per

BERC norms which is 6139 MUs.

Commission’s analysis

4.3.5 The Commission has scrutinized the commercial information with regard to the

category wise sales submitted by the Petitioner for FY 2010-11. The quantum of

energy sales for FY 2010-11 as approved by Commission in the Tariff Order for FY

2010-11 was 7225 MUs whereas the sales figures as per the Board’s audited

accounts was 6139 MUs. Accordingly, as per the consumption norms for Kutir Jyoti

and agricultural consumers as approved in the tariff Order of FY 2010-11, the

Commission approves the category-wise sales in FY 2010-11 at 6139 MUs as

proposed by the Board. The same would be used for approving the power

procurement cost.

4.3.6 The following table summarises the category-wise sales for FY 2010-11.

Table 6: Summary of Category-wise Sales for FY 2010 -11

Sl. Category Name Approved in T.O. for FY

2010-11

Audited Annual

Accounts

Now Approved in

True up

1 Kutir Jyoti (Rural and Urban) 231 2133

2133

2 Domestic (DS-I & DS-II) 2664

3 Non-Domestic (NDS-I, NDS-II & NDS-III) 629 490 490

4 Public Lighting 28 33 33

5 Irrigation and Agriculture 428 389 389

6 Public Water Works 200 60 60

7 Industrial LT 236 226 226

8 Industrial HT 1660 1,501 1,501

9 Railway Traction 570 458 458

10 Sale to Nepal 300 555 555



Sl. Category Name Approved in T.O. for FY

2010-11

Audited Annual

Accounts

Now Approved in

True up

Sub-Total 6946 5845 5845

11 Sales to other state under UI 279 293 293

Total Sales 7225 6139 6139

4.4 Transmission and Distribution Losses


4.4.1 The Table below summarises the overall T&D loss levels as submitted by the

Petitioner for FY 2010-11:

Table 7: Proposed T&D losses by BSEB for FY 2010-11

Particular FY 2010-11 (Approved)

FY 2010-11 (Actual Accounts)

FY 2010-11 (Actual - BERC Norm)

T&D Losses (%) 32.00 % 43.59 % 44.80 %

4.4.2 In FY 2010-11, the T&D losses as per audited annual accounts were 43.59%. The

BSEB has submitted that T&D losses work out to 44.80% if calculated as per the

agriculture consumption norm approved by the Commission.

4.4.3 The BSEB submitted that it has undertaken massive rural electrification work under

the RGGVY scheme. Consequently, there has been a tremendous increase in the

network of BSEB in the high loss rural areas and an addition of large number of Kutir

Jyoti consumers. The BSEB has electrified 633096 number of BPL households and

5297 number of villages during FY 2010-11. This substantial addition in the network

has not only led to increase in the technical losses in the system, but has also

rendered the system porous and prone to theft of electricity. Given the vast

expansion of the rural areas it is not always possible for BSEB to control theft. Due to

these reasons, BSEB has not been able to achieve the loss targets given by the

Commission.

4.4.4 The BSEB has requested the Commission to consider the T&D losses of 43.59% at

the time of calculating power purchase requirement. Further, it has also requested

the Commission to compensate the difference between actual power purchase cost

and power purchase cost calculated based on the agriculture consumption norm and

T&D loss trajectory from the Resource Gap Funding provided by the State

Government.




4.4.5 The Commission has approved target of T&D losses at 32% for the FY 2010-11. The

trajectory had already been reviewed earlier by the Commission. The Commission is

of the view that T&D losses is a controllable parameter and it is the responsibility of

distribution licensee to take appropriate measures to bring down the T&D losses. The

Commission cannot allow the burden of higher T&D loses, due to non-achievement

of T&D loss reduction trajectory by BSEB as approved by the Commission, to be

passed on to the consumers. Accordingly, the Commission approves the

Transmission & Distribution losses of 32% for true up for FY 2010-11. The same

shall be considered at the time of computation of the power purchase cost. This is

also in-line with the loss level approved by the Commission in the Tariff Order for FY

2010-11.

4.4.6 The table below summarises the T&D loss levels target set by Commission, T&D loss

as per audited annual accounts of Board and the approved T&D loss in truing up for

FY 2010-11:

Table 8: Approved T&D Loss for FY 2010-11

Particulars As approved by BERC in T.O. for FY 2010-11

As per Annual Accounts of FY 2010-11

Now Approved in True up of FY 2010-11

T&D Losses (%) 32% 43.59% 32%

4.5 Own Generation


4.5.1 The BSEB has submitted that it owns and operates one thermal generating plant i.e.

Barauni Thermal Power Station (BTPS) located at Barauni. The overall installed

capacity of Unit IV, V, VI and VII of the BTPS in FY 2010-11 was 320 MW. However,

it was submitted in the petition that during FY 2010-11, out of the remaining two

functional units i.e. Unit VI and VII, Unit VI was functioning at a de-rated capacity,

while Unit VII was under shutdown and Renovation & Modernization work was going

on for its revival.

4.5.2 Accordingly, the actual performance of the BTPS, Barauni in FY 2010-11 as per the

annual accounts was not at desired levels. The BSEB has requested the

Commission to approve the same.

Table 9: Summary of BTPS Performance proposed by Pe titioner for FY 2010-11

Particular Units FY 2010-11 (Approved)

FY 2010-11 (Actual)

Capacity (Unit VI & VII) MW 220 220

Capacity in Use MW 105 105



Particular Units FY 2010-11 (Approved)

FY 2010-11 (Actual)

Plant Load Factor % 39.14% 23.97%

Auxiliary Consumption % 10% 17.95%

Gross Generation MUs 360 220.44

Auxiliary Consumption MUs 36 39.56

Net Generation MUs 324 180.88


4.5.3 The Commission found that the performance of unit VI of BTPS in FY 2010-11 on the

key performance parameter such as Auxiliary Consumption has been high as

compared to past three financial years. As can be seen, the actual performance of

BTPS Unit VI has not improved as expected by the Commission and has in fact

deteriorated further. Considering these facts, the Commission is not agreeable to

approving the performance parameters of BTPS Unit VI at actuals. Accordingly, the

Commission approves auxiliary consumption @ 14.40% of the gross generation as

approved in the true-up order of FY 2009-10.

4.5.4 Accordingly, the Commission now approves Gross generation of 220.44 MU and net

generation of 188.70 MUs for FY 2010-11.

4.5.5 Summary of the approved generation performance is as shown in the table below:

Table 10: Summary of approved Generation performanc e for FY 2010-11

Particulars Units FY 2010-11 (Approved)

FY 2010-11 (Actuals)

Now Approved in True up

Capacity MW 220 220 220

Capacity in use MW 105 105 105

Gross Generation MUs 360 220.44 220.44

Plant Load Factor % 39.14% 23.97% 23.97%

Auxiliary Consumption % 10% 17.95% 14.40%

Auxiliary Consumption MUs 36 39.57 31.74

Net Generation MUs 324 180.87 188.70

4.6 Power Purchase


4.6.1 The BSEB had firm allocations of power from thermal power plants of NTPC, Hydel

Power Plants of NHPC, and the hydel plants of Chukka & Tala through PTC and

hydel plants of BSHPC and thermal power plant of Kanti BUNL. In addition to these,

BSEB also purchases power from co-generation sources of sugar mills.



4.6.2 The Petitioner has submitted gross power purchase quantum of 10977.81 MUs from

all sources in its true-up petition for FY 2010-11. The BSEB has requested the

Commission to approve 10977.81 MU of power purchase quantum for the FY 2010-

11.

Commission’s Analysis

4.6.3 The Commission recognises the sources of power as outlined by BSEB based on the

Audited Annual Accounts for FY 2010-11 and the costs associated with purchase of

power from these sources. However, the quantum of power purchase and the cost

associated with the same would be approved after taking into cognisance the

approved energy sales for the year and the T&D loss trajectory.

4.6.4 The Commission intends to use the same methodology for approval of the Power

purchase quantum and cost associated with the same based on the information

available in the Audited Annual Accounts for FY 2010-11 and approves the quantum

of Power Purchase on the same principles as done earlier during the true up for FY

2006-07 to FY 2009-10.

4.6.5 The summary of the approved power purchase quantum from various sources for the

FY 2010-11 is given in the table below:

Table 11: Source-wise Power Purchase Quantum for FY 2010-11 (MUs)

Sl. Power Plant Name Approved by

BERC in T.O. FY 2010-11

Audited Annual Accounts of FY

2010-11

Now approved in True up of FY

2010-11 NTPC

1 Farakka 2760.00 3146.43 3146.43

2 Kahalgaon 2245.00 2531.83 2531.83

3 Talchar 2600.00 2669.74 2669.74

4 KBUNL 500.00 273.23 273.23

Sub Total (NTPC) 8105.00 8621.23 8621.23

NHPC

5 Rangit 145.00 118.79 118.79

6 Teesta 550.00 549.31 549.31

Sub Total (NHPC) 695.00 668.10 668.10

PTC

7 Chukka 560.00 543.23 543.23

8 Tala 1020.00 909.36 909.36

Sub Total (PTC) 1580.00 1452.59 1452.59

Others

9 NEA – Muzaffarpur 50.00 - -



Sl. Power Plant Name Approved by

BERC in T.O. FY 2010-11

Audited Annual Accounts of FY

2010-11

Now approved in True up of FY

2010-11 10 NEA – Motihari 34.91 34.91

11 NEA – Purnea 9.09 9.09

12 BSHPC 50.00 27.37 27.37

13 New Swadeshi Sugar Mill 55.00 28.35 28.35

14 UI - 136.17 136.17

Sub Total Others 155.00 235.89 235.89

Grand Total 10535.00 10977.81 10977.81

4.6.6 The Commission now considers the total quantum of power purchase, i.e. 10977.81

MUs, for the purpose of working out the energy balance and computation of the

power purchase expenses as part of the true up exercise.

4.7 Energy Balance


4.7.1 The energy requirement for FY 2010-11 submitted by the Petitioner based on the

proposed sales and T&D losses is tabulated hereunder:

Table 12: Proposed Energy Requirement & Energy bala nce for FY 2010-11

Particular Unit FY 2010-11 (Approved)

FY 2010-11 (Actual

Accounts)

FY 2010-11 (Actual-BERC

norm) Energy Sales within State MU 6,646 5,291 5,291

Energy outside State (Nepal) MU 300 555 555

Sale in bilateral trade/ UI MU 279 293 293

Total Sales MU 7,225 6,139 6,139

T&D Losses MU 3,269 4,744 2,751

T&D Losses % 32% 43.59% 32.00%

Energy Requirement MU 10,494 10,883 8,890

Energy Availability Own Generation MU 324 181 181

Total Purchase from long term sources MU 10,535 10,978 10,978

Transmission loss in regional losses % 3.70% 2.63% 2.63%

Transmission loss in regional losses MU 365 276 276

Net Power Availability MU 10,494 10,883 10,883

Additional purchase MU 1,993



4.7.2 The BSEB in its submission has recognised 1993 MUs of additional Power purchase

on account of higher T&D losses and requested the Commission to dis-allow the

same for the FY 2010-11.


4.7.3 The energy requirement of the Petitioner is approved based on the approved values

of sales and T&D losses by the Commission. The T&D losses have not been

considered on sales in bilateral trade/ UI.

4.7.4 The energy balance for FY 2010-11 shall be prepared based on the approved sales

to consumers during the year, the approved level of T&D losses and the power

purchased/generated to meet the demand from the consumers.

4.7.5 Accordingly, the approved total power purchase requirement (net) based on the

approved sales to consumers and approved T&D losses is 8890.09 MUs. As against

this, the net availability as per approved Generation parameters is computed as

10882.85 MUs. Thus, the additional power purchase from long term sources over

and above the requirement comes to 2052.15 { =10977.81 (Actual power purchase

from long term sources as per annual accounts) - 8925.66(Actual power purchase

from long term sources as approved by Commision) } MUs. Accordingly, the

Commission disallows power purchase quantum of 2052.15 MUs for FY 2010-11.

The power purchase cost corresponding to the same would be adjusted in the total

power purchase cost approved for the year.

Table 13: Approved Energy Requirement for FY 2010-1 1

Particular Unit FY 2010-11

(Actual Accounts)


norm)

FY 2010-11 (Now

Approved in True up)

Energy Sales within State MU 5,290.76 5,290.76 5,290.76

Energy outside State (Nepal) MU 555.00 555.00 555.00

Sale in bilateral trade/ UI MU 293.38 293.38 293.38

Total Sales MU 6,139.14 6,139.14 6,139.14

T&D Losses MU 4,743.93 2,750.95 2,750.95

T&D Losses % 43.59% 32.00% 32.00%

Energy Requirement MU 10,883.07 8,890.09 8,890.09

Energy Availability

Own Generation MU 180.87 180.87 188.70

Total Purchase from long term sources MU 10,977.81 10,977.81 8,925.66




(Actual Accounts)


norm)

FY 2010-11 (Now

Approved in True up)

Transmission loss in regional system % 2.51% 2.51% 2.51%

Transmission loss in regional system MU 275.83 275.83 224.27

Net Power Availability MU 10,882.85 10,882.85 8,890.09

Additional purchase disallowed MU 1,992.77 2,052.15

4.7.6 The total purchases from long term sources has been worked out considering the

impact of average regional transmission losses (2.51% = 275.83 MU ÷ 10977.81 MU)

applicable on the total actual power purchase by BSEB in FY 2010-11. The reason

for applying the average regional transmission losses is that the power purchase

quantum by BSEB also includes sources of power on which the regional transmission

losses of 3.7% are not applicable e.g. UI power, Nepal (NEA), BSHPC, etc.

Accordingly, the gross power purchase required to be done in FY 2010-11 was

8925.66 MU with a regional transmission loss of 224.02 MU. {8925.66 MU =

(8890.09 – 188.70) ÷ (1-2.51%)}

4.7.7 Accordingly, the Commission has disallowed power purchase quantum equivalent to

2052.15 MUs for the FY 2010-11 as part of true up process based on the principle

that excess power purchase on account of higher T&D losses i.e. over and above the

approved losses shall not be permitted.

4.8 Own Generation Cost


4.8.1 BSEB submitted that net generation from the BTPS for FY 2010-11 was 180.88 MUs

as against the approved level of 324 MUs. The Petitioner submitted that the Gross

Generation from BTPS for FY 2010-11 was 220.44 MU. The BSEB has further

submitted that unit VI of BTPS was under R&M for most of the year and could

achieve PLF of only 23.97% and hence was not able to achieve operational

parameters set by the Commission; whereas unit VII of BTPS remained under shut

down for the entire period during FY 2010-11.

4.8.2 The variable cost calculation submitted by the Petitioner for BTPS is tabulated

below:-

Table 14: Proposed Plant parameters & Fuel cost det erminants for BTPS

Particulars Unit FY 2010-11 (Actual)



Particulars Unit FY 2010-11 (Actual)

Gross Generation MUs 220.44

Auxiliary Consumption MUs 39.56

Net Generation MUs 180.88

Capacity MW 110

De-rated Capacity MW 105

Plant Load Factor % 23.97%

Auxiliary Consumption % 17.95%

Station Heat Rate kcal/kWh 4,103

Sp. Oil Consumption ml/kWh 31.48

Gross Calorific Value of Coal kcal/kg 3,858

Calorific Value of Oil kcal/l 9,950

Transit losses % 0.00%

Actual Oil Consumption Kl 6939

Actual Coal Consumption MT 2,16,560

Specific Coal Consumption kg/kWh 0.98

Price of Coal Rs./MT 1,823

Price of Oil Rs/kl 31,388

Coal Cost Rs. Cr. 39.48

Oil Cost Rs. Cr. 21.78

Fuel Cost Rs. Cr. 61.26

Other Fuel Related costs Rs. Cr. 5.06

Total Fuel Costs Rs. Cr. 66.32

4.8.3 The Petitioner accordingly requested the Commission to consider gross generation of

220.44 MUs and generation costs of Rs 66.32 Cr. for FY 2010-11.


4.8.4 In the Tariff Order for FY 2010-11, the Commission has stated that

“The maximum norm provided for old coal based generating stations of DVC by

CERC is 3.0ml/kWh. The Barauni Unit 6 is already renovated and so, is expected to

perform and meet the norms. For the year 2010-11, specific consumption of oil at

10.0ml/kWh is considered by the Commission against 20.0ml/kWh proposed by the

BSEB. Efforts shall be taken by BSEB to bring down the specific oil consumption to

the level of CERC norm.”

“Similarly the norm of gross station heat rate considered by CERC for the old thermal

generating stations of DVC is 3100Kcal/kWh, where as BSEB has shown the station

heat rate as 4650Kcal/kWh and projected the specific coal consumption as



0.95Kg/kWh. Since the Barauni Unit 6, which is renovated, is expected to improve

the performance, specific coal consumption of 0.9Kg/kWh is considered by the

Commission. Efforts shall be taken by BSEB to improve the SHR to the level of

CERC norm.”

4.8.5 The Commission found that the performance of unit VI of BTPS in FY 2010-11 on the

key performance parameters such as Auxiliary Consumption and Specific Oil

consumption has been poor as compared to past two-three financial years. As can

be seen, the actual performance of BTPS Unit VI has not improved as expected by

the Commission and has in fact deteriorated further. Considering these facts, the

Commission is not agreeable to approving the performance parameters of BTPS Unit

VI at actuals. Accordingly, the Commission approves auxiliary consumption @

14.40% of the gross generation and Specific Oil consumption @ 18.45 ml/kWh as

approved in the trueing-up order of FY 2009-10.

4.8.6 Further, the Commission approves the Station heat rate and calorific value of coal as

per the audited annual accounts of BSEB for FY 2010-11 while giving due weightage

to the vintage of the plant. The Commission also directs BSEB to take serious

cognisance of the same and initiate steps towards improvement in the operational

parameter of the generating station.

4.8.7 The Commission approves the fuel cost of Rs 58.66 Cr. for FY 2010-11 based on the

cost determined by the Commission as per the Tariff Order for FY 2010-11 and the

actual generation submitted by the Petitioner. The Operational parameters and

details of cost component allowed by the Commission are stated below:-

Table 15: Approved plant parameters & fuel cost det erminants for FY 2010-11

Particulars Unit FY 2010-11 (Actuals) Now Approved in True up of FY 2010-11

Gross Generation MUs 220.44 220.44

Auxiliary Consumption MUs 39.57 31.74

Net Generation MUs 180.87 188.70

Capacity MW 110 110

De-rated Capacity MW 105 105

Availability Factor % 56.32% 56.32%

Plant Load Factor % 23.97% 23.97%

Auxiliary Consumption % 17.95% 14.40%

Station Heat Rate kcal/kWh 4,103.31 4,103.31

Sp. Oil Consumption ml/kWh 31.48 18.45

Gross Calorific Value of Coal kcal/kg 3,858 3,858



Particulars Unit FY 2010-11 (Actuals) Now Approved in True up of FY 2010-11

Calorific Value of Oil kcal/l 9,950 9,950

Overall Heat G Cal 904,534 904,534

Heat from Oil G Cal 69,043 40,468

Heat from Coal G Cal 835,488 864,066

Transit losses % 0.00% 0.00%

Actual Oil Consumption kl 6,939 4,067.12

Actual Coal Consumption MT 216,560 223,967

Specific Coal Consumption kg/kWh 0.98 1.02

Price of Coal Rs./MT 1,823 1,823

Price of Oil Rs/kl 31,388 31,388

Coal Cost Rs Cr. 39.48 40.83

Oil Cost Rs Cr. 21.78 12.77

Fuel Cost Rs Cr. 61.26 53.60

Other Fuel Related costs Rs Cr. 5.06 5.06

Total Fuel Costs Rs Cr. 66.32 58.66

4.8.8 The Commission now approves total fuel cost of Rs. 58.66 Cr. for FY 2010-11 as part

of the truing up process. This cost is excluding the cost of water and other

miscellaneous expenses which are factored under the Repairs and Maintenance

expenses.

4.9 Power Purchase Cost


4.9.1 The Petitioner has submitted gross power purchase cost of Rs 3237 Cr. from all

sources including intrastate and UI including transmission charges for FY 2010-11 for

true up.

4.9.2 The Petitioner has claimed total transmission charges of Rs. 192.96 Cr. for total

power purchased during FY 2010-11.

4.9.3 The Petitioner submitted the source-wise break up of total cost and unit cost, the

details of which are given below:

Table 16: Proposed Power Purchase cost for FY 2010- 11

Sl. Power Plant Name Power purchase cost (Rs. Cr.)

Per Unit Cost ( Rs./Unit)

FY 2010-11 (Approved)

FY 2010-11 (Actual)


FY 2010-11 (Actual)

NTPC



Sl. Power Plant Name Power purchase cost (Rs. Cr.)

Per Unit Cost ( Rs./Unit)


FY 2010-11 (Actual)


FY 2010-11 (Actual)

1 Farakka 767 1085.09 2.78 3.45

2 Talchar 491 644.39 1.89 2.41

3 Kahalgaon 566 744.24 2.52 2.94

4 KBUNL 181 99.73 3.62 3.65

Sub Total (NTPC) 2,005 2573.44 2.47 2.99

NHPC

5 Rangit 25 23.48 1.72 1.98

6 Teesta 94 94.19 1.71 1.71

Sub Total (NHPC) 119 117.67 1.71 1.76

PTC

7 Chukka 89 86.37 1.59 1.59

8 Tala 188 167.32 1.84 1.84

Sub Total (PTC) 277 253.70 1.75 1.75

Others

9 Nepal 21 19.39 4.15 4.41

10 BSHPC 12 6.67 2.49 2.44

11 New Swadeshi Sugar Mill 23 12.09 4.25 4.27

12 UI 75.84 - 5.57

Sub Total Others 57 114.00 3.65 4.83

Transmission charges

13 PGCIL Charges 178 192.96

Grand Total 2,636 3251.78 2.50 2.96


4.9.4 Accordingly, the source-wise power purchase approved by the Commission for true

up of FY 2010-11 is depicted in the table given below:

Table 17: Trued-up Power Purchase Cost for FY 2010- 11 (Rs. Cr.)

Sl. Power Plant Name Now approved in true-up of FY 2010-11

Amount (Rs. Cr.) Average rate (Rs./ kWh)

NTPC

1 Farakka 1085.09 3.45

2 Talchar 644.39 2.41

3 Kahalgaon 744.24 2.94

4 KBUNL 99.73 3.65

Sub Total (NTPC) 2573.44 2.99

NHPC

5 Rangit 23.48 1.98



Sl. Power Plant Name Now approved in true-up of FY 2010-11

Amount (Rs. Cr.) Average rate (Rs./ kWh)

6 Teesta 94.19 1.71

Sub Total (NHPC) 117.67 1.76

PTC

7 Chukka 86.37 1.59

8 Tala 167.32 1.84

Sub Total (PTC) 253.70 1.75

Others

9 Nepal 19.39 4.41

10 BSHPC 6.67 2.44

11 New Swadeshi Sugar Mill 12.09 4.27

12 UI 75.84 5.57

Sub Total Others 114.00 4.83

Transmission charges

13 PGCIL Charges 192.96

Grand Total 3251.78 2.96

4.9.5 The Commission accordingly approves power purchase cost of Rs.

3251.78 Cr for the FY 2010-11 as part of the truing up exercise.

4.10 Disincentive for non-achievement of T&D loss r eduction Targets

4.10.1 The difference in the actual power purchase and the power purchase requirement

approved by the Commission is disallowed at the average power purchase rate and

is treated as ‘Disincentive for non-achievement of T&D loss targets’.

4.10.2 As per the trajectory, the T&D loss reduction target for FY 2010-11 was set at 32%

which the Petitioner was not able to achieve. Accordingly, the Commission has

computed the disincentive for non-achievement of T&D loss reduction targets at Rs.

623.54 Cr for FY 2010-11 as shown below:

Table 18: Disincentive: Non-achievement of T&D loss reduction target for FY 2010-11

Particular Units FY 2010-11

Net Power Purchase Dis-allowed MUs 2,052.15

Gross Power Purchase Dis-allowed (Grossed up at avg. loss @ 2.51%) MUs 2,105.05

Average Power purchase cost Rs./ kWh 2.96

Cost of Power Purchase Dis-allowed Rs. Cr. 623.54



4.10.3 The Commission accordingly approves Rs. 623.54 Cr as dis-allowanc e for non-

achievement of T&D loss target for the FY 2010-11 a s part of the truing up

exercise.

4.11 Operation & Maintenance Expenses

Employee Cost


4.11.1 Employee expenses typically comprise salaries, dearness allowance, bonus, terminal

benefits in the form of pension & gratuity, leave encashment and staff welfare

expenses.

4.11.2 The Petitioner submitted that the BSEB prepares its annual accounts on accrual

basis, the employees cost consists of expenditures that accrue for the year and

therefore, the amount of terminal benefits/ retiral dues payable to the retired

employees is not treated as expenditure for the year. The amount actually paid is

adjusted against the provision made in the books of account for pension, gratuity and

leave encashment.

4.11.3 The Petitioner has submitted the net Employee Expenses of Rs. 593.90 Cr. for FY

2010-11 including salaries, dearness and other allowances, contribution towards

terminal benefits, and unfunded terminal liabilities etc. The Petitioner has claimed Rs.

126.88 Cr. towards staff related liabilities & provisions as indicated in the schedule 28

of the Annual Accounts and Rs. 42.11 Cr. for interest on GSS, GPF and other staff

deposits as indicated in the schedule 12 of the annual accounts on account of

unfunded terminal liabilities in FY 2010-11. The employee cost capitalised during FY

2010-11 was Rs. 18.58 Cr. Hence the total employee expense claimed by the

Petitioner for FY 2010-11 was Rs. 744.30 Cr. for FY 2010-11.

4.11.4 Commission’s Analysis

4.11.5 The Commission in the Tariff Order for FY 2011-12 had stated as under:

“4.7.12. So far the contribution of the employees towards GPF and GSS is

concerned; this is not a part of employee cost. This amount is deducted from the

salary of the employees and should be deposited in a separate fund to be governed



by a Trust in which both BSEB and its employees are represented. Any investment

out of this fund has to be with the approval of the Trust.”

4.11.6 Accordingly, it is apparent that BSEB has utilised the amounts available in the fund

created towards GPF and GSS contribution towards meeting its day to day expenses

i.e. for the purpose of funding its working capital requirements. Accordingly,

permitting these expenses to be passed on to the consumers shall mean that the

consumers have to bear the burden for the past financial mismanagement by the

Board. The Commission is of the view that such liabilities on account of past issues

should be funded by BSEB through its own means and should not be passed on to

the consumers at this point of time. The regulations anyway provide for interest on

normative working capital to be passed on to the consumers thus meeting the

working capital requirements of the licensee for the year.

4.11.7 In view of the above, the Commission approves the net employee cost for FY 2010-

11, as depicted in the table given below:

Table 19: Employee Cost approved for FY 2010-11 (Rs Cr.)

Sl. Particulars As per Annual Accounts

Now approved in True-up for FY

2010-11 1 Employee cost 593.90 593.90

2 Add: Payment made for unfunded liabilities 168.99 0.00

3 Less: Employee cost Capitalized 18.58 18.58

4 Net Employee cost 744.30 575.32

4.11.8 The Commission approves Rs. 575.32 Cr. as the employee cost for FY 2010-11.

Repair and Maintenance (R&M) Expenses


4.11.9 The Petitioner, in the true-up petition for FY 2010-11 has submitted the R&M cost at

Rs 62.51 Cr. for FY 2010-11.


4.11.10 The Commission in its Tariff Order for FY 2008-09 dated 26th August, 2008 directed

BSEB to include water charges & miscellaneous charges under the head R&M

expenses and exclude the same from the head fuel cost.



4.11.11 Based on the above, the Commission approves R&M expenses of Rs. 62.51 Cr. for

the FY 2010-11 which includes Rs. 5.11 Cr. on account of water charges and other

miscellaneous charges which were shifted from fuel costs to R&M expenses and

base R&M expenses of Rs. 57.40 Cr. These values are the same as per the audited

annual accounts for the FY 2010-11.

4.11.12 The summary of the approved R&M expenses for FY 2010-11 is as given in the

table below:

Table 20: Summary of approved R&M cost (Rs. Cr.)

Sl. Particulars As per Annual

Accounts

Now Approved in True-up for FY 2010-11

1 Plant & Machinery 34.56 34.56

2 Building 2.20 2.20

3 Hydraulic works 2.93 2.93

4 Civil Work 0.18 0.18

5 Line cable & network 17.10 17.10

6 Vehicles 0.09 0.09

7 Furniture & fixtures 0.20 0.20

8 Office equipment 0.14 0.14

9 Operating expenses - -

10 Total expenses 57.40 57.40

11 Add cost of materials procured from Board's Hdqrs.for R&M - -

12 Net Expenses 57.40 57.40

13 Cost of water & Other Misc. Charges 5.11 5.11

14 Total R&M Expenses 62.51 62.51

4.11.13 The Commission based on the audited annual accounts approves the R&M

expenses of Rs.62.51 Cr. for the FY 2010-11.

Administrative & General (A&G) Expenses


4.11.14 The Petitioner has proposed the Administrative & General (A&G) expenses of for FY

2010-11 as Rs. 40.29 Cr. and also submitted that the A&G expenses capitalised

during FY 2010-11 was Rs. 1.46 Cr. as per the accounts of BSEB.




4.11.15 The Commission approves the A&G expenses submitted by BSEB for FY 2010-11.

The summary of the A&G expenses approved is outlined in the table below:

Table 21: Summary of approved A&G cost (Rs. Cr.)

Sl. Particulars As per Annual Accounts

Now approved in True-up for FY 2010-11

1 Rent, rates & taxes 0.50 0.50

2 Insurance 0.00 0.00

3 Telephone, postage &Telegrams 0.99 0.99

4 Legal Charges 0.98 0.98

5 Audit Fees 3.25 3.25

6 Consultancy fees 0.00 0.00

7 Technical fees 0.01 0.01

8 Other professional charges 0.00 0.00

9 Conveyance & travel expenses 4.99 4.99

10 Others (sum of a. to l. as given below) 29.39 29.39

a. Fees and Subscription 1.70 1.70

b. Books and Periodicals 0.05 0.05

c. Printing and Stationary 0.72 0.72

d. Advertisement 1.47 1.47

e. Water Charges 0.02 0.02

f. Electricity Charges 8.93 8.93

g. Entertainment Charges 0.15 0.15

h. Computer Billing 3.84 3.84

i. Home Guard/ Security Guard 2.65 2.65

j. Franchisee Commission 2.11 2.11

k. Franchisee Incentive 1.00 1.00

l. Miscellaneous Expenses 6.74 6.74

11 Freight 0.17 0.17

12 Total A & G expenses 40.29 40.29

13 Less: A&G expenses capitalized 1.46 1.46

14 Net A & G expenses 38.83 38.83

4.11.16 The Commission approves the actual net A&G expenses of Rs. 38.83 Cr. as

reflecting in the audited annual accounts for FY 20 10-11.

Operation & Maintenance (O&M) Costs

4.11.17 Based on the above approvals, the summary of the total O&M costs approved by

the Commission for FY 2010-11 as part of the truing up process is outlined in the

table below:



Table 22: Summary of approved O&M expenses for FY 2 010-11 (Rs. Cr.)

Sl. Particulars FY 2010-11 (Approved)

FY 2010-11 (Actual)

Now approved in True-up for

FY 2010-11 1 Employee cost 660.00 744.30 575.32

2 Repair and Maintenance (R&M) Expenses 95.00 62.51 62.51

3 Administrative & General (A&G) Expenses 38.76 38.83 38.83

4 Total O&M Cost 793.76 845.64 676.66

4.12 Capital Expenditure

4.12.1 As mentioned by the Commission during the truing up for the period from FY 2006-07

to FY 2008-09, the Capital Expenditure undertaken by BSEB is a very critical aspect

of its business as it supports the growth of business and helps the Board in

sustaining its operational performance.

4.12.2 As per para 51 of Chapter 5 of BERC (Grant of Licence for Distribution of electricity)

Regulations, 2007, BSEB is required seek prior approval of the Commission for

making investment in the licenced business. In the absence of the prior approval by

the Commission, the Commission may disallow corresponding depreciation and

interest cost. As can be seen, the availability of capital expenditure related

information is a basic requirement of the distribution licence granted to BSEB.

4.12.3 BSEB in its true-up petition for FY 2010-11, has not submitted any information

regarding the actual capital expenditure undertaken by it during the year and the

capitalisation of assets on account of projects / schemes getting commissioned

during the year.

4.12.4 The information relating to the capital expenditure provided by BSEB in the formats

submitted along with the petition also does not provide the necessary information in a

clear and unambiguous manner for the Commission to consider it for necessary

decision making.

4.12.5 The Commission vide its letter no. BERC-Tariff-24/11-88 dated 27th January, 2012

had sought information regarding the capital expenditure that has been undertaken

during the FY 2010-11 including details like the total value of the scheme, the capital

expenditure done during the FY 2010-11, the corresponding capitalization against

these schemes and the closing work in progress in respect of schemes which have

not been capitalised. Further, the BSEB was also asked to provide the sanction

letters of these loans and the financing terms. However, BSEB has not been able to



provide the information as sought by the Commission, However BSEB could only

inform the Commission about the details of capitalisation during FY 2010-11 in the

following format:

Table 23: Details of capitalisation during FY 2010- 11 (Rs. Lakh)

Activity Generation Transmission Distribution Total

Land and Land rights - 0.93 4.37 5.30

Building - - 0.32 0.32

Other civil works - 0.49 0.52 1.01

Plants and Machinery 16.80 6.93 288.43 312.15

Lines and cable network - 43.61 628.02 671.63

Vehicles - - - -

Furnitures and Fixtures - - 0.01 0.01

Office equipments - 0.00 0.04 0.04

Spare units/ Service units - - 0.81 0.81

Total 16.80 51.95 922.52 991.27

4.12.6 Accordingly, based on the limited information available with the Commission from the

audited annual accounts, the Commission has estimated the actual capital

expenditure incurred by BSEB in FY 2010-11. The same is outlined in the table

below:

Table 24: Estimation of CWIP (Rs. Cr.)

Particulars Now approved in True-up for FY 2010-11

Opening balance - CWIP 881.20

Add: New investment during the year 1,392.11

Total 2,273.32

Less: Net Investment capitalization during the year 991.27

Closing balance 1,282.04

4.12.7 As can be seen from the above, the net investment capitalised during the FY 2010-

11 is Rs. 991.27 Cr. The same is computed based on the other information which is

available in the audited annual accounts e.g. Opening and Closing CWIP and the

assets capitalised during the year.

4.12.8 The same can also be derived by tracking the movement in the quantum of Gross

Fixed Assets and CWIP over the year. The same can also be corroborated from the

Statement 7: Sources and Uses of Funds available in the audited annual accounts

for FY 2010-11. The details are as illustrated below:

Table 25: Estimated Capital expenditure (Rs. Cr.) – FY 2010-11





Opening balance – GFA (a) 2,864.80

Opening balance – CWIP (b) 881.20

Less: Closing GFA (c) 3,856.07

Less: Closing CWIP (d) 1,282.04

Net change in GFA/ CWIP (e = c + d – a – b) 1,392.11

4.12.9 The Commission directs BSEB to ensure that information like Capital expenditure

and the related capitalisation of assets, etc. should be available with it as it is a basic

information required by the Commission to approve expenditure related to funding

costs incurred by BSEB. In the absence of availability of such information, the

Commission will be constrained to adopt normative capital expenditure related costs

and may also not allow such expenditure at all, as such expenditure cannot be

passed on to the consumers without proper prudence check.

4.12.10 Based on the information available in the audited accounts the capital assets to the

tune of Rs. 991.27 Cr. have been capitalised in the FY 2010-11. The Commission

now approves the same for computation of the interest expenses.

4.13 Gross Fixed Assets

4.13.1 The Commission vide letter No. BERC-Tariff-24/11-88 dated 27th January, 2012

enquired from the Petitioner regarding, the asset added during FY 2010-11 under

head ‘Plant and Machinery’ and ‘Lines and Cable Network’ and its source of funds

(Loans/ Grant etc.). The Board vide letter No.Com/ Tar-132/2011-375, dated

01.03.2012 could only submit the detailed break-up of assets added during FY

2010-11 under that the head ‘Plant and Machinery’ and ‘Lines and Cable Network’

as shown in the table below, however BSEB has not provided information regarding

the source of fund through which the assets have been created:

Table 26: Asset added during FY 2010-11 in plant & machinery & Line & Cable N/W

Amount (Rs.) Remarks

Plant and Machinery 3121530757 The Amount capitalised under APDRP scheme has been funded by loan from PFC and State Govt. The Amount capitalized under RGGVY scheme has been funded by loan from REC under RGGVY scheme in which Rs. 449,04,15,066/- as grant and Rs. 49,89,35,451/- as loan.

Line and Cable network 6745633030

APDRP 3352552737

RGGVY 4989350507

State Plan/ Internal Resources 1525260543

Total 1,433,471,103



4.13.2 The Commission has approved the Gross Fixed Asset as per the audited annual

accounts of BSEB. The position of the Gross fixed assets during FY 2010-11 is as

shown in the table below:

Table 27: Gross Fixed Assets (Rs. Cr.) – FY 2010-11


Opening GFA (As on 1st April 2009) 2,864.80

Additions to GFA during the year 1,005.42

Deductions to GFA during the year 14.14

Re-classification during the year 0.00

Closing GFA (As on 31st March 2010) 3,856.07

4.14 Depreciation


4.14.1 The Petitioner in the true-up petition for FY 2010-11 submitted the depreciation

expenses of Rs 89.00 Cr. for FY 2010-11 based on the audited annual accounts for

BSEB.


4.14.2 The Commission has approved the depreciation charges based on the schedule 20

of the audited annual accounts of FY 2010-11. However, the depreciation on the

assets created out of consumer contribution, grant has been deducted from the gross

depreciation to arrive at the net depreciation charge for BSEB. The computation of

the depreciation on the assets created out of consumer contribution, grant is based

on the proportion of average of opening and closing value of ‘Grant and contribution’

and ‘GFA’ for FY 2010-11.

Table 28: Approved Depreciation (Rs. Cr.) for FY 20 10-11

Sl. Particulars FY 2010-11 (Approved)

As per BSEB petition FY

2010-11

Now approved in True-up for FY 2010-11

1 Depreciation 75.72 89.00 90.45

2 Less: Depreciation on the assets created out of Grant, consumer contribution - - 29.92

3 Net Depreciation 75.72 89.00 60.53

4.14.3 Accordingly, the Commission approves depreciation expenses of Rs. 60.53 Cr.

for FY 2010-11 during the truing up process for FY 2010-11.



4.15 Interest and Finance Charges


4.15.1 BSEB in its true-up petition has submitted that the Interest and Financial Charges

incurred by it during the year for various purposes like capital expenditure, normal

working capital, meeting revenue deficit etc. The submission by BSEB is outlined in

the table below.

Table 29: Interest & Financial Charges as per the p etition for FY 2010-11 (Rs. Cr.)

Institution Nature of Loan Opening Loan Addition Repayment Closing

Loan Interest

State Govt

(a) Plan Loan Capital Expenditure 1,460.96 805.94 - 2,266.90 254.86

(b) Non plan loan Revenue Deficit 3,558.44 44.06 - 3,602.50 487.88

(c) Bonds issued to CPSUs Revenue Deficit 2,143.33 - - 2,143.33 176.43

REC Capital Expenditure 93.50 - 22.49 71.01 12.82

RGGVY Capital Expenditure 5.23 105.06 8.04 102.26 36.03

LIC Capital Expenditure - - - - -

L.D. bank under ARDC Capital Expenditure - - - - -

IDBI Capital Expenditure 0.06 - - 0.06 -

CEA Capital Expenditure

- - - - -

PFC Capital Expenditure

245.82 58.37 35.63 268.57 27.66

Public Bond Capital Expenditure - - - - -

Centrally Sponsored Schemes (Loans are not allocated to BSEB by State Government)

Capital Expenditure

- - - - -

Working Capital Loan Working Capital 887.97 722.35 - 1,610.32 97.39

Consumer Security Deposit Working Capital - - - - 9.98

Consumer Rebate Working Capital - - - - 30.77

Interest to supplier/contractor Working Capital - - - - 0.30

Other Charges Working Capital - - - - 0.01

Total 8,395.32 1,735.79 66.16 10,064.95 1,132.94

Loans used for Capital Expenditure 1,805.58 969.37 66.16 2,708.80 331.37

4.15.2 BSEB has further submitted that prior to the Tariff Regulations, 2007, tariff were not

sufficient enough to meet its expenditures and hence BSEB was making loss and

also not able to make repayment of loans. Further, BSEB has identified the loans



used for the capital expenditure and working capital and only asked the interest &

financial charges for the loans used for the capital expenditure work.

4.15.3 As per the provisions of Tariff Regulations, 2007, BSEB has requested the

Commission to approve net interest & financial charges of Rs. 331.37 Cr., taking into

consideration Rs. 25 Cr. as the actual interest capitalised during FY 2010-11, for the

loans raised for capital expenditure.

4.15.4 Further, in response to the Commission letter vide letter no. No. BERC-Tariff-24/11-

88 dated 27th January, 2012, the Board vide letter no. Com/ Tar-132/2011-375,

dated 01.03.2012 explained the reason of mismatch between the details of loan as

given under Table 12 of the petition and the schedules of the annual accounts for FY

2010-11 of the Board as under:

“34 The REC Normal/RMNP loans up to the year 2001-02 is being repaid as per schedule of payment fixed by REC under one time settlement scheme. However, the accounting entries of OTS Scheme were not incorporated in the accounts of the Board earlier. Now the same has been accounted for in schedule -32 of the Annual Accounts of the Board. Consequently though nil amounts have been received under REC Normal Scheme but a sum of Rs 83, 45, 02,695/- has been shown as receipt during the year only for rectification of REC Account. Similarly, a sum of Rs 19, 28, 80,068/- only has been repaid during the F Y 2010-11 but a sum of Rs1,05,94,18,777/- has been shown in repayment during the year only for rectification of REC Account.”


4.15.5 On scrutiny of the petition and the additional information furnished by the Board, the

Commission observed that the loan amounts also included the payments due on

capital liabilities which are created on account of defaults in the repayments done by

BSEB in the past. As mentioned previously, the Commission does not agree to this

treatment as the burden on account of defaults in making repayments should not be

passed on to the consumers.

4.15.6 Further, the Commission has also taken into cognizance the fact that the interest

booked by the Board under the head “Interest and Finance Charges” may also

include the penal or additional interest incurred by the Board for defaulting on making

timely repayments. Accordingly, the Commission will keep the above fact in mind

while approving the Interest and finance charges. The Commission notes with

concern that the Petitioner is diverting its long-term fund for the purpose of meeting

its deficit caused due to its own inefficiencies. The Commission directs the Petitioner

to abstain from diversion of funds meant for creating long-term assets.



4.15.7 In absence of the adequate data/ information with BSEB regarding the details of the

capital expenditure incurred during the year, its funding, capitalisation of assets, etc.,

the Commission has adopted the same methodology as applied while truing up of

costs for FY 2006-07 to FY 2009-10. The Commission has used the normative

closing balance of loan (Rs. 465.53 Cr.) as arrived in true up of FY 2009-10 as the

opening outstanding loans as on 1st April 2010 for computation of Interest and

finance charges for FY 2010-11.

4.15.8 The Commission has also outlined the methodology adopted for estimating the

additional borrowings during the FY 2010-11 for funding the assets getting

capitalised during the year after considering the amount available in the form of

consumer contributions and grant / subsidy towards cost of capital assets during the

year as well as balance amount (- Rs. 5.74 Cr.) of contribution, Grants and subsidies

towards cost of capital assets to be capitalised in subsequent years. The amount of

Rs. – Rs. 5.74 Cr. was arrived at while truing up of FY 2009-10 wherein the

Commission had stated that

“5.17.15 As can be seen from the above, the consumer contribution, grants /

subsidies towards cost of capital assets received during the year is much more than

the assets capitalised during the year. Based on the same, the assets capitalised

during the year are assumed to be entirely being funded through the consumer

contribution, grants / subsidies towards cost of capital assets received during the

year and hence, there is no requirement of loan funding against assets capitalised

during the year. After accounting for the same, the remaining quantum of Rs. 5.73

Cr. against consumer contribution, grants / subsidies towards cost of capital assets

received during the year is assumed to be used for funding assets being capitalised

in the subsequent years.”

4.15.9 In the absence of the adequate data with BSEB the Commission has considered the

repayment during the year as per the Central Electricity Regulatory Commission

(Terms and Conditions of Tariff) Regulations, 2009 reproduced as below:

“The repayment for the year of the tariff period 20 09-14 shall be deemed to be

equal to the depreciation allowed for that year”

4.15.10 Based on the above methodology, the opening loan as on 1st April 2010 considered

for computing interest cost for FY 2010-11 has been taken equal to closing



normative loan for FY 2009-10 as Rs. 465.53 Cr. as per the true-up order issued by

the Commission on 27th January 2012 for FY 2009-10.

4.15.11 The BERC Tariff Regulations provide for recovery of interest and finance charges

on loans which have been utilised to create assets and are eligible for recovery only

after the assets have been put to use. The normative outstanding loan as on 1st

April 2010 is considered to be used for creation of assets which have been put to

use and hence the interest against this loan is considered for recovery from

consumers. In addition to this, there will be certain additional loans which will be

eligible for recovery of interest on account of capitalisation of assets achieved during

the FY 2010-11.

4.15.12 The assets capitalised during the year comprises of a combination of assets created

out of the CWIP at the beginning of the year and part of the assets capitalised

during the year are created out of investments done during the year itself. This

break-up is not available in the audited annual accounts. While, it is desirable to

understand the bifurcation of these assets capitalised i.e. assets created out of

capitalisation of CWIP at the beginning of the year and those created through

capitalisation of investments done during the year, the same may not be possible

looking at the availability of information with the Commission and from the data

made available by BSEB.

4.15.13 Accordingly, the Commission has considered the assets capitalised during the year

as being first funded through the consumer contributions and grants/subsidy

towards capital assets received during FY 2010-11 and the remaining portion of the

assets getting capitalised during FY 2010-11 is assumed to be funded through

additional loans received during FY 2010-11. At the same time, any amount of

contribution and grants / subsidy towards capital assets available after this

adjustment will be considered as having funded assets which would be capitalised

in the subsequent years. While, the Commission understands that this method has

its own limitations, however, the Commission has no other option but to adopt this

method till the time BSEB is able to improve the availability of information to enable

the Commission to approve the interest expenses based on actual information.

4.15.14 Based on the above, the methodology for determining the additional loans drawn

during the year and eligible for recovery of interest charges based on the above

discussion is exhibited in the table below:



Table 30: Estimation of loan against assets getting capitalized during FY 2010-11 (Rs. Cr)

Particulars Amount

Total Assets Capitalised During the year (A) 991.27

Contribution, Grants and subsidies towards Cost of Capital Assets during the FY 2010-11 (B) 919.05

Balance contribution, Grants and subsidies towards Cost of Capital Assets (As per True up Order for FY 2009-10) (C)

5.74

Estimated Funding through Loans (A – B – C) 66.49

4.15.15 As can be seen from the above, the consumer contribution, grants / subsidies

towards cost of capital assets received during FY 2010-11 and the balance of the

consumer contribution, grants / subsidies towards cost of capital assets taken from

true up order for FY 2009-10 is considered as the assets capitalised during the year

funded through grant and the balance capitalisation of Rs 66.49 Cr. is treated as

funded through loan.

4.15.16 In line with the methodology adopted in the truing up for the FY 2006-07 to FY 2009-

10, the Commission has approved an effective interest rate of 12.70% for the FY

2010-11. The details are as given in the table given below.

Table 31: Computation of effective Rate of Interest for FY 2010-11 (Rs. Cr.)

Loan type State Government Loans (Plan) REC PFC Total

Opening Balance 1,460.96 98.74 245.82 1,805.52

Additions 805.94 193.74 58.37 1,058.06

Repayment 0.00 27.33 35.63 62.95

Closing Balance 2,266.90 265.16 268.57 2,800.62

Interest 215.93 48.85 27.66 292.43

Average Loan during the year 1,863.93 181.95 257.19 2,303.07

Average Rate of Interest 11.58% 26.85% 10.76% 12.70%

4.15.17 As per the Central Electricity Regulatory Commission (Terms and Conditions of

Tariff) Regulations, 2009 as mentioned in clause 3.14.10, the repayment has been

considered to be equal to the depreciation allowed for that year.

4.15.18 On the basis of the methodology mentioned above, the Commission approves the

interest and finance charges for FY 2010-11, as given in the table below:



Table 32: Approved Interest and finance charges for FY 2010-11 (Rs. Cr.)

Particular Amount

Opening Balance of loan (As per True up Order for FY 2009-10) 465.53

Additions to Loan 66.49

Repayment 60.53

Closing Balance 471.49

Average Loan during the year 468.51

Interest Rate 12.7%

Interest & Finance Charges 59.49

4.15.19 Accordingly, the Commission approves the interest a nd finance charges of

Rs.59.49 Cr. for the FY 2010-11.

4.16 Interest on Working Capital


4.16.1 The BSEB has submitted that the BERC (Terms and conditions for determination of

Tariff) Regulations, 2007 provide for recovery of the interest on working capital from

the consumers on a normative basis. The principles for this normative computation

have been prescribed in the regulations and are different for generation function and

transmission & distribution function.

4.16.2 BSEB has submitted that it has calculated the interest on Working Capital based on

the normative principles outlined by the Commission in its Tariff Regulations, 2007

and sought for approval of the same from the Commission.

4.16.3 The Petitioner has submitted the details of interest on working capital requirement for

FY 2010-11 in the formats submitted along with its petition. As per the submission,

the Petitioner has considered the following components for calculating its interest on

working capital requirements:

Table 33: Proposed Interest on working capital for FY 2010-11 (Rs. Cr.)

Sl. Particulars FY 2010-11 (Actual)

1 Two (2) months of Fuel cost (Primary and Secondary) 11.06

2 One month O&M expenses of BSEB 70.47

3 Receivables (two (2) months of fixed and variable charges of BSEB) 654.27

4 Maintenance spares (@ 1% of GFA escalated at 6% per annum) 48.60

5 Total Working Capital Requirement 784.39

6 Interest Rate (SBI PLR as on 1st April, 2010) 11.75%

7 Interest on Working Capital 92.17




4.16.4 BSEB has included the resource gap grant received from the State Government in

the form of payment of part of power purchase cost to NTPC as receivable for the

purpose of calculation of working capital. State Government has paid part of power

purchase cost to NTPC directly and treated it as resource gap grant to BSEB.

Commission observes that BSEB does not have to arrange working capital for

payment of this amount to NTPC and therefore, it should not be included in two

months receivable for the purpose of calculation of working capital.

4.16.5 The State Govt. makes the payment of power purchase cost directly to NTPC on

receipt of the bill every month. Only the balance amount of the power purchase

received from NTPC is paid by BSEB from its working capital and receivables. BSEB

does not have to arrange working capital for payment to NTPC the amount which is

paid directly by the State Govt. to NTPC. Therefore, the payment made by the State

Govt. directly to NTPC should not be included in two months’ receivables of BSEB as

part of the working capital requirement. Similarly, in the true up exercise for the

period of FY 2006-07 to FY 2009-10 also, the resource gap grant received from the

Government has not been considered as receivable for the purpose of computation

of interest on normative working capital.

4.16.6 As per the BERC (Terms and conditions for determination of Tariff) Regulations,

2007, Maintenance spare is calculated as “Maintenance spares at 1% of the

historical cost escalated at 6 % per annum from the date of commercial operation”.

4.16.7 The Commission has used the same approach as used while truing-up of ARR for

the period of FY 2006-07 to FY 2009-10. The Commission has used 1% of closing

balance of GFA of FY 2005-06 as the base and escalated it at 6% for four (4) years

to calculate the spares for FY 2010-11. To this base figure, 1% of the addition in GFA

each year escalated at 6% per annum is added to calculate the total Maintenance

spares.

4.16.8 Accordingly, based on the principles specified in the BERC (Terms and conditions for

determination of Tariff) Regulations, 2007, the information available in the audited

annual accounts and the observation of the Commission, the Commission approves

the Interest on Working Capital of Rs.52.25 Cr. as against that of Rs. 92.17 Cr.

submitted by BSEB for FY 2010-11 as shown in the table below.



Table 34: Summary of approved Interest on working c apital (Rs. Cr.)

Sl. Particulars Now approved in

True-up for FY 2010-11

1 Two (2) months of Fuel cost (Primary and Secondary) 9.78

2 One month O&M expenses of BSEB 56.39

3 Receivables (two (2) months of fixed and variable charges of BSEB) 336.58

4 Maintenance spares (@ 1% of GFA escalated at 6% per annum) 38.92

5 Total Working Capital Requirement 441.65

6 Interest Rate (SBI PLR as on 1st April, 2010) 11.75%

7 Interest on Working Capital 51.89

4.16.9 Therefore, the Commission approves Rs. 51.89 Cr. as the interest on working

capital for FY 2010-11.

4.17 Return on Equity (ROE)


4.17.1 Bihar State Electricity Board is an integrated electricity utility constituted under

Clause 5, Chapter – III of The Electricity (Supply) Act, 1948. The Board is mainly

funded through loans and grants from the Government of Bihar, loans and grants

under specialized funding schemes of the Government of India and loans from

commercial lending organizations.

4.17.2 BSEB has requested the Commission to approve a reasonable return at the rate of

14% on the capital grant provided by the State Government. It has submitted that as

BSEB is a board and not a company so the equity contribution can come only by way

of Grant and not equity. In view of the same, the Commission is requested to provide

reasonable return on the capital provided by the State Government. Accordingly,

BSEB has sought approval for Return on Equity of Rs 213.32 Cr. for the purpose of

true-up of FY 2010-11.


4.17.3 The Commission had not approved any Return in Equity for BSEB in the Tariff Order

issued for FY 2006-07 or FY 2008-09 or during the review process undertaken for the

FY 2006-07 or FY 2008-09. BSEB also had not sought any return on equity in its

tariff petition for FY 2010-11.



4.17.4 The Commission is of the view that “Return is admissible only on equity actually

deployed for the creation of assets. Since, BSEB has not been corporatized; it does

not have any equity. The Commission has considered entire assets base funded

through loan/ grant and accordingly interest has been allowed.”

4.17.5 Accordingly, the Commission continues with the stand taken in the past Tariff Orders

and no Return on Equity is permitted for BSEB in truing up of FY 2010-11.

4.18 Taxes

4.18.1 BSEB submitted that there are no expenses under this head for FY 2010-11 hence

no expense is being claimed under Taxes.

4.19 Other Debits & Extraordinary Items


4.19.1 The Petitioner submitted that the expenses incurred under head of other debits &

extraordinary items by BSEB for FY 2010-11 are Rs. 0.17 Cr. hence requested the

Commission to allow the same.


4.19.2 The Commission approves Rs. 0.17 Cr. under the head ‘Other Debits &

Extraordinary Items’ based on the audited annual accounts of FY 2010-11.

4.20 Prior Period Credits / (Charges)


4.20.1 BSEB in its true-up petition has stated that the Commission has started issuing Tariff

Order from FY 2006-07 and hence any expense/income incurred/accrued and not

accounted in respective year but considered in future year as prior period credits/

(charges) should be adjusted while calculating ARR. As the Commission’s first Tariff

Order was issued for FY 2006-07 and hence BSEB has only considered

expense/income incurred/accrued after 1st April, 2006.

4.20.2 Based on the above discussed principal, BSEB has calculated prior period credits/

(charges) for FY 2010-11. Prior Period Credits/ (Charges) for FY 2010-11 are Rs.

312.20 Cr., out of this, Rs. 263.49 Cr. of income comprises of FPPCA charges for



Oct’2009 to Dec’2009, additional supply of power to rural areas to meet drought

situation in 2009-10 and power purchase from sugar mills.


4.20.3 The Commission had sought clarification from BSEB regarding the nature of these

charges to enable the Commission to take appropriate decision. In response, BSEB

has submitted the bifurcation of Rs. 263.49 Cr. is as below:

• Rs. 90 Cr. – FPPCA support from State Government;

• Rs. 171.90 Cr. – support from agriculture department for additional supply of power to rural areas to meet drought situation in FY 2009-10

• Rs. 1.59 Cr. – support from State Government for power purchase from sugar mills

4.20.4 The detailed break-up of the prior-period items has been submitted by the Board vide

letter No. Com/Tar-132/2011-375 dated 01.03.2012 as mentioned below:

Table 35: Prior Period Credits / (Charges) for the FY 2010-11 (Rs. Cr.)

Particulars Amount

Employee cost (0.32)

Misc. receipt 39.30

A&G expenses (8.75)

Depreciation (4.17)

Interest payable on REC loan 43.74

Fixed deposit 68.72

Power Purchase (45.18)

Subsidy and Grant 263.49

Interest on consumer security deposit (6.08)

Fuel related (21.02)

Sundry debtors (2.09)


O&M and Fuel supplier (0.09)

Interest in State Govt Loan (0.91)

Interest payable on REC loan (18.36)


Insurance charges (1.41)

Assets not in use (3.61)

Total 290.41

4.20.5 Accordingly, the Commission approves the Prior Peri od Credits of Rs. 290.41

Cr. for the FY 2010-11.



4.21 Non-Tariff Income


4.21.1 The Petitioner in the true-up petition of FY 2010-11 submitted the non-tariff income

as Rs. 44.73 Cr. for FY 2010-11 as below:

Table 36: Proposed Non-Tariff Income (Rs Cr.) for F Y 2010-11

Particulars FY 2010-11 (Approved)

FY 2010-11 (Actual)

Non-Tariff Income 172.08 44.73

4.21.2 The Petitioner has also submitted that it has proposed all other values as per audited

annual accounts of the Board except for delayed payment surcharge from

consumers, for which the Petitioner has requested that the DPS may not be

considered while considering Non-Tariff Income for the purpose of ARR

determination.

4.21.3 The Petitioner has submitted that for the purpose of ARR determination revenue from

tariff is considered on accrual basis i.e. amount billed by BSEB. However the Board

is not able to collect the entire amount and the revenue collected (cash basis) is

lower than the amount billed. In order to fund this gap (receivables so created),

BSEB has to borrow higher amount (than allowed by the Commission) for its

increased working capital requirement. The delayed payment surcharges are payable

by the consumers on such unpaid amounts. In the Annual Accounts the revenue (on

the income side) is on billed basis (accrual) but the borrowings for increased working

capital also get reflected as increased interest cost under the Interest and Finance

Charges account. Thus in a way Delayed Payment surcharges are sources of fund

for funding this increased working capital. Further, the Board has submitted that the

Commission considers revenue on accrual basis and the working capital requirement

though computed on normative basis does not take into consideration the increased

receivable (beyond the norms of 2 month) amount that has to funded by BSEB. If

BSEB were to collect the entire amount that it has billed there would be no income

from surcharge (no receivable would exists) however the Commission considers

income from DPS. BSEB on this account is doubly penalized. The income is

considered on accrual basis and simultaneously DPS is also considered in the ARR.




4.21.4 The Commission has adopted the approach on Non-tariff income in line with the

recent judgement of Hon’ble Appellate Tribunal for Electricity (APTEL) dt. 12.07.2011

in Case no 142 & 147 of 2009.

4.21.5 The relevant extracts of the Judgment are reproduced below:

“The normative working capital compensates the distribution company in delay for

the 2 months credit period which is given to the consumers. The late payment

surcharge is only if the delay is more than the normative credit period. For the period

of delay beyond normative period, the distribution company has to be compensated

with the cost of such additional financing. It is not the case of the Appellant that the

late payment surcharge should not be treated as a non-tariff income. The Appellant is

only praying that the financing cost is involved due to late payment and as such the

Appellant is entitled to the compensation to incur such additional financing cost.

Therefore, the financing cost of outstanding dues, i.e. the entire principal amount,

should be allowed and it should not be limited to late payment surcharge amount

alone. Further, the interest rate which is fixed as 9% is not the prevalent market

Lending Rate due to increase in Prime Lending Rate since 2004-05. Therefore, the

State Commission is directed to rectify its computation of the financing cost relating

to the late payment surcharge for the FY 2007-08 at the prevalent market lending

rate during that period keeping in view the prevailing Prime Lending Rate”.

4.21.6 As per audited annual accounts of the Board for FY 2010-11, the Non-Tariff Income

of BSEB is Rs. 161.63 Cr. out of which, Delayed Payment Surcharge from

Consumers is Rs. 24.31 Cr. As the Petitioner charge DPS @ 18% per annum (1.5%

per month), the principal amount on which DPS has been charged will be 135.08 Cr.

4.21.7 As prevailing SBI PLR as on April 1, 2009 was 12.25%, the Commission has allowed

the financing cost for DPS @ 11.75%. The financing cost approved by the

Commission is shown below:

Table 37: Funding of DPS (Rs. Cr.)

Particular FY 2010-11

DPS as per audited annual accounts of FY 2010-11 (@ 1.5% per month) (A) 24.31

Principal amount on which DPS was charged (B = A / 18%) 135.08

Interest Rate for funding of Principal of DPS 11.75%

Interest on funding of Principal amount of DPS 15.87



4.21.8 The Commission has sought additional information vide its letter No. BERC-Tariff-

24/11-272 dated 23.03.2012 seeking information on actual DPS collected by the

Board. However, the Board has replied vide letter no. Com/ tariff-161/11-488 dated

23.03.2012 saying that the same is not available as of now and shall be made

available only once the IT based billing system is implemented under the ongoing R-

APRDRP Scheme.

4.21.9 The Commission is not satisfied with the justification given by the Board for not

maintaining records for actual revenue receipts against DPS. The Commission

directs the Board to submit the same as per actuals in its subsequent filings/ true-up

petitions, in the absence of which the Commission shall consider 100% DPS as non-

tariff income for the purpose of calculation of the ARR.

4.21.10 Hence, the Commission has computed the amount of Non-Tariff Income as

summarised below:

Table 38: Trued-up Non-Tariff Income approved (Rs. Cr.) Particular FY 2010-11

Non-Tariff Income as per the Audited Annual account s

Interest on Staff Loan & Advance 0.03

Income from Investment (F.D) 92.59

Interest on Loan & advance to licensees -

D.P.S from Consumer 24.31

Interest on advance to Supplier/Contractor -

Interest from Bank (Other than F.D.) 1.82

Income from Trading 1.05

Income from Staff Welfare activities -

Miscellaneous Receipt 3.45

Rebate and discount Received 3.06

Incentive for timely payment of power purchase bills 1.16

Incentive for timely payment of installment against Loan to PFC 0.44

Meter Rent/Service Line Rental 18.88

Miscellaneous Recoveries 14.83

Total Non-Tariff Income 161.63

Less: Financing cost of Principal amount of D.P.S. 15.87

Net Non-Tariff Income 145.76

4.21.11 Therefore, the Commission approves Rs. 145.76 Cr. a s Non-Tariff Income for

FY 2010-11, against the Petitioner’s claim of Rs. 4 4.73 Cr.

Table 39: Non-Tariff Income (Rs. Cr.)

Particular Petitioner’s Submission Now approved in True-up for FY 2010-11



Particular Petitioner’s Submission Now approved in True-up for FY 2010-11

Non-Tariff Income 44.73 145.76

4.22 Revenue from the sale of Power


4.22.1 BSEB has requested the Commission to approve the total Revenue from the sale of

Power of Rs 2375.97 Cr. as per the audited annual accounts of BSEB.

4.22.2 The Commission while approving the revenue from sale of power has also

considered the revenue on account of “FPPCA” charges as approved by the

Commission vide FPPCA order for the period of Oct'08 to Mar'09 issued in the month

of Mar'10 and FPPCA order for the period of Apr'09 to Sep'09 issued in the month of

May'10 for an aggregate of Rs. 384.77 Cr..

4.22.3 Further, the Commission vide letter no. No. BERC-Tariff-24/11-88 dated 27th

January, 2012, enquired from the Board about treatment of Rs. 384.77 Cr.. The

Board in response has explained the reason for not considering billing Rs. 384.77 Cr.

on account of FPPCA vide letter no. Com/ Tar-132/2011-375, dated 01.03.2012 as

under:

“As against the order of the Hon’ble Commission for recovery of FPPCA charges for

the period from Oct’2008 to Sept’2009, amounting to Rs. 385 Cr.. The Board

received Rs. 90 Cr. as Grant from State Government during FY2010-11 against the

aforesaid sum. The Board was supposed to bill Rs. (384-90) Cr. = Rs.295 Cr. .

Accordingly, the field offices were asked to bill FPPCA in 5(five) equal monthly

instalments vide letter dated 11.12.2010. As such, one instalment amounting to Rs.

59 Cr. approximately was envisaged to be billed every month. Consequently, the

Board had to bill Rs.235 Cr.. However, due to higher T&D loss in comparison to

trajectory set by the Hon’ble Commission, the Board could not bill approx. Rs. 17 Cr.

to the consumers on account of disapproved billed units accruing beyond normative

T&D loss allowed in the formula for FPPCA prescribed by the Hon’ble Commission in

the Tariff Order. As such, the billable units to the consumers came to Rs. (235-17)

Cr.= Rs.218 Cr. only during FY2010-2011. The field offices were instructed to bill the

FPPCA charges in the mid of December 2010 (i.e. 11.12.2010). So the field offices

and billing agencies took one month in implementing the changes in billing software

to incorporate FPPCA related changes. Accordingly, FPPCA was charged effectively

only in two months’ energy bills. Accordingly, BSEB could bill only Rs 115.78 Cr. to



the consumers during FY 2010-11. As such, BSEB could bill Rs.115.79 Cr. only

during FY2010-11 against billable amount of Rs. 115.79 Cr.. Billing done during FY

2010-11 under FPPCA is provided in Annexure B. However, the left over amount

have been billed during the following FY2011-12. The chronology of the FPPCA

charge actually became leviable from consumers leading to lower billing are as

follows:

FPPCA order for the period Oct’08 to Mar’09 was given by the Hon’ble BERC on

31.03.2010 to recover FPPCA charges provisionally @ 69 paise/unit and cost works

out to be Rs. 173.97 Cr.

FPPCA order for the period Apr’09 to Sept’09 was given by the Hon’ble BERC to

recover FPPCA charges provisionally @ 69 paise/unit and cost works out to be Rs.

210.80 Cr.

Total Rs. 385.77 Cr. recoverable from the consumers. Government pays Rs. 90 Cr.

to BSEB. The recoverable amount gets reduced to Rs. 295 Cr..

The amount to be billed in five (5) monthly instalments of Rs. 59 Cr. per month. No

billing could be done for the month of December,2010. As such, the billing was to be

done for Rs. 295 Cr.- Rs.59crores= Rs. 235 Cr..

However, due to higher T&D loss in comparison to trajectory set by the Hon’ble

Commission, the Board could not bill approx. Rs. 17 Cr. to the consumers on account

of disapproved billed units accruing beyond normative T&D loss allowed in the

formula for FPPCA prescribed by the Hon’ble Commission in the Tariff Order. As

such, the billable units to the consumers came to Rs. (235-17) Cr.= Rs.218 Cr. only

during FY2010-2011.

The field offices could bill the consumers in the month of January2011, February2011

and March 2011 only. This implies that the billable amount against Rs. 218 Cr was

reduced to Rs.(218-59) Cr.= Rs. 159 Cr..

BSEB could bill only Rs 115.78 Cr. to the consumers during FY 2010-11 as against

Rs. 159 Cr. since some field offices could not commence billing in the month of

January, 2011 and also due to delayed change in billing softwares.”




4.22.4 The Commission has allowed BSEB to recover FPPCA charge provisionally at the

rate of 69 paise (sixty nine paise) per unit on the energy consumption during the

period October, 2008 to March, 2009 and April, 2009 to September, 2009 from its

consumers except Kutir Jyoti/ BPL (Rural and Urban) and Pvt. Agriculture consumers

through its FPPCA orders during FY 2010-11 as mentioned below

Table 40; Details of FPPCA order issued by Commissi on during FY 2010-11

Period of FPPCA Date of issue of FPPCA Order Amount (Rs. Cr.)

October, 2008 to March, 2009 30th Marc’10 173.97

April, 2009 to September, 2009 19th May'10 210.80

Gross billable FPPCA during FY 2010-11 384.77

4.22.5 Despite the fact that the Commission has issued the FPPCA order in the month of

Mar’10 and May’10 with the option for BSEB to recover the FPPCA amount of Rs.

384.77 in six (6) monthly instalments, however, the Board could not bill the said

amount to its consumers.

4.22.6 The Commission is of the opinion that, the Board was given sufficient time to recover

the FPPCA amount of Rs. 384.77 Cr. during the FY 2010-11 itself. However, due to

the in-efficiency of the Board in terms of their billing process the Board could not bill

the said amount in totality during FY 2010-11. Accordingly, the Commission has not

passed on the in-efficiency of BSEB to the consumers and has considered Rs.

384.77 as accrued to BSEB during the FY 2010-11.

4.22.7 The Commission shall take appropriate adjustment while truing-up of ARR for FY

2011-12 provided the BSEB is able to substantiate the total billing against the

FPPCA charges approved for FY 2010-11 on actual/ billed basis.

4.22.8 Further, the Commission is of the view that the Boards inability to bill the FPPCA

charges approved for the FY 2010-11 during the year may create revenue gap and

incidental carrying costs which would be passed on to the consumers unnecessary.

Accordingly, the Commission has considered Rs. 178.98 Cr. as deemed to be

accrued under the head of FPPCA charges and has added the same to the revenue

from sale of power for FY 2010-11.

Table 41: Revenue through FPPCA (Rs. Cr.)

Parameter Amount

Total Revenue to be billed through FPPCA charges during FY 2010-11 384.77



Parameter Amount

FPPCA support from State Government 90.00 Revenue recovered through Fuel cost adjustment charges as per audited Annual Accounts of FY 2010-11

115.79

Balance amount to be recovered through consumers on FPPCA head 178.98

4.22.9 The Commission approves the revenue from sale of po wer of Rs. 2554.96 (Rs.

2375.97 + Rs. 178.98) Cr. for the FY 2010-11 as per audited annual accounts

and FPPPCA orders issued in this regard.

4.23 Grant / Revenue Subsidy from State Government


4.23.1 BSEB in its true-up petition for the FY 2010-11 has requested the Commission to

treat the resource gap funding to BSEB by the State government as resource gap/

grant intended to first compensate BSEB for meeting the financial losses suffered by

BSEB on account of the difference between actual T&D loss of BSEB and T&D loss

allowed by the Commission and balance amount if any should be taken as subsidy to

agriculture and rural consumers of BSEB.

4.23.2 BSEB has submitted that it has not been able to meet the loss trajectory as approved

by the Commission on account of various reasons including condition of the network,

defective consumer meters, unmetered consumers, massive and large scale

electrification of villages under RGGVY scheme leading to expansion of rural

distribution network, etc. BSEB has further submitted that though it has taken up

steps towards improving the performance, the results have not been as per the

requirement.

4.23.3 BSEB has further submitted that the Commission has also appreciated this fact in its

Tariff Order for FY 2011-12 dated 1st June, 2011, while disallowing the request of

BSEB for re-fixing higher T&D loss reduction trajectory, at para 4.3.3 observing that

“if BSEB is not able to meet loss reduction trajectory due to implementation of

Government sponsored RGGVY scheme, then it should ask for subsidy to

compensate for the increased T&D losses”. BSEB being a Government of Bihar

entity, the un-bridged expenditure gap has to be met either by revenue income from

tariff fixed by the Commission for the different categories of consumers or to be met

as subsidy/resource gap by the Government of Bihar.



4.23.4 Accordingly, BSEB had approached the Government of Bihar for financial assistance

to bridge the resource gap arises out of increasing T&D losses. The Government of

Bihar has provided financial assistance to BSEB to meet the aforesaid resource gap

which was Rs. 90 Cr. per month in FY 2010-11 to meet ever increasing resource gap

on account of expanding rural network and consequent increasing T&D losses

beyond allowed trajectory of T&D losses.

4.23.5 BSEB has further contended that while determining ARR, the Commission had

considered this resource gap funding by the Government of Bihar as income to

BSEB treating it as subsidy to consumers by the Government of Bihar and to that

extent all the consumers across the board are subsidised by the Commission while

fixing tariff for different consumer categories. Therefore, even though BSEB receives

the resource gap for meeting the revenue deficit for bridging the gap between the

expenditure vis-à-vis revenue, BSEB remains in perpetual loss due to aforesaid

treatment of the resource gap by the Commission in its Tariff Orders.

4.23.6 In line with the above submission, BSEB has requested the Commission to consider

Rs. 477.30 Cr. after adjusting the disallowed power purchase cost of Rs. 602.70 Cr.

as available resource gap funding for reducing the Aggregate Revenue Requirement

to arrive at the revenue gap for FY 2010-11.


4.23.7 The Commission has examined the contention of the Board and is not in agreement

with the proposed post-facto adjustment of the revenue resource gap grant given by

the State Government against the financial losses caused due to the difference

between the actual T&D loss of BSEB and the T&D loss trajectory approved by the

Commission. The Commission is also in receipt of the copy of the letter from the

Energy Department, Govt. of Bihar dated 19/9/11 outlining the priority of use of the

resource gap funding provided by the Govt. to BSEB. The views of the Commission

in the matter are expressed in subsequent paragraphs.

4.23.8 The Commission has been treating the resource gap funding available from the state

Govt. for reducing the ARR of BSEB thus subsidising the consumers of the state

across the board. The treatment adopted by the Commission is based on the

submission of BSEB in its tariff filings. Certain references in this regards from the

Commission’s past Tariff Orders and BSEB tariff filings are highlighted below.



BERC Tariff Order for FY 2006-07:

“6.12 GRANT FROM STATE GOVERNMENT

The State Government in letter No.1412 dated 26.4.2006 communicated sanction

of a grant of Rs.720 Cr. as a resource gap during 2006-07 towards payment of

power purchase bills of NTPC. This grant also figures in the Volume-III of the tariff

petition submitted by BSEB vide letter dated 22.05.2006. The Commission

considered the Rs.720 Cr. as a resource to cover the revenue gap during 2006-

07.”

Tariff Filing by BSEB in FY 2008-09:

“12.0 Net Deficit

12.01 Considering the ARR for FY09 and income from existing tariff and non tariff

income, the net deficit comes to Rs. 1022.83 Cr..

12.02 State Govt. Grant

State Govt. of Bihar has issued orders for release of Rs. 60 Cr. per month for

payment of energy bills of NTPC during FY08. Considering that same level of grant

from State Govt. ie amount of Rs. 720 Cr. will be available during FY09, then the

deficit for FY09 will get reduced from Rs. 1022.83 Cr. to Rs. 302.83 Cr..”

Tariff Filing by BSEB in FY 2010-11:

“18.00 Net Deficit

18.01 State Govt. Grant & subsidy

The State Govt. has been providing a fixed grant of Rs. 720 Cr. per year during

FY07, FY08, FY09 and FY10 to meet part of resource gap. No direct subsidy to

any particular category of consumers has been specified by the State Govt.

However, from December 09 State Govt. is paying Rs90 Cr./month . It is expected

that in FY11 the State Govt. will provide Rs 1080 Cr. to Board. The tariff rate to

most of the category of consumers has been subsidised. Board is expecting that

during FY11 State Govt.'s grant of Rs.1080 cores will be paid to BSEB.

18.02 Considering the ARR for FY11 and income from existing tariff and non tariff

income and the state Govt. grant of Rs. 1080 Cr. the net deficit comes to Rs.

578.65 Cr..”

4.23.9 As can be seen from the above references, the revenue resource gap grant has

always been proposed by the Board for reducing the net deficit in the ARR and thus

reducing the average cost of supply of electricity and subsidising all categories of

consumers in the state. The Commission had also aligned its approach with the



proposal of BSEB and accordingly has already passed on the benefit of the resource

gap grant received from the State Government to the consumers in the past Tariff

Orders. The letter from State Government received in the past in this regards also did

not mention the priority of usage as outlined in the latest letter dated 19/09/11 and

only mentioned that the support is being made available for payment of power

purchase cost directly to NTPC.

4.23.10 Accordingly, the Commission does not agree with the prayer of the Board to adjust

the cost of dis-allowed power purchase from the resource gap grant and then use

the remaining amount for subsidising the consumers. The Commission retains the

resource gap assistance of Rs. 1080 Cr. received from the State Government as

subsidy to consumers for FY 2010-11. The revenue gap for the FY 2010-11 will be

computed considering the same.

4.24 Approved ARR and Revenue Gap for FY 2010-11

4.24.1 In view of the above analysis, the annual revenue requirement along with the

revenues at existing tariffs and revenue gap for FY 2010-11 is summarized

hereunder:

Table 42: Summary of Trued up ARR and Revenue gap f or FY 2010-11 (Rs Cr.)

Description FY 2010-11 (Approved)

As per BSEB True up petition

Now Approved in True up FY

2010-11 Power Purchase Cost 2,635.55 3,251.78 3,251.78

Own Generation Cost 64.07 66.33 58.66

Repair & Maintenance Expenses 95.00 62.51 62.51

Employees Cost 660.00 744.30 575.32

Admin & General Expenses 38.76 38.83 38.83

Depreciation 75.72 90.45 60.53

Interest & Finance Charges 184.13 306.37 59.49

Interest on Working Capital - 92.17 51.89

Return on Equity - 213.32 -

Other Debits and extraordinary Items - 0.17 0.17

Less: Prior Period Credits / (Charges) - 290.41 290.41

Total Revenue Requirement 3,753.23 4,575.81 3,868.76 Less: Expenditure disallowed due to higher T&D losses - 605.47 623.54

Less: Non-Tariff Income 172.08 44.73 145.76

Net Revenue Requirement 3,581.15 3,925.62 3,099.46

Revenue from sale of Power 2,451.49 2,375.97 2,554.96



Description FY 2010-11 (Approved)

As per BSEB True up petition

Now Approved in True up FY

2010-11 Grant from Govt. 1,080.00 474.53 1,080.00

Total Gap/ (Surplus) 49.66 1,075.12 (535.50)

4.24.2 The BERC Tariff Regulations provide for Revenue gap of next year to be adjusted as

a result of Review and Truing up exercises. While approving adjustments towards

revenue / expenses in future years, arising out of Review / Truing up exercises, the

Commission may allow the carrying costs as determined by the Commission on such

expenses / revenues. However, such carrying costs shall be limited to the interest

rate approved for working capital borrowings.

4.24.3 As per sub-section 87 of the Bihar Electricity Regulatory Commission (Terms and

conditions for determination of Tariff) Regulations, 2007

“In the case of abnormal variation in income or expenses or both, which will affect

tariff substantially, the Commission may direct it to include the same, including its

impact as a Regulatory asset in the tariff and also provide for its recovery through

tariff for one or more years or as a surcharge for one or more years , as it may deem

fit, to protect the interests of the consumers / utility/ both, unless the Commission is

of the opinion that the same cannot be met fully or partially from the balance under

any other consumer account, the amount of which has already taken from the

consumer through tariff.”

4.24.4 In light of the above provision of the BERC Tariff Regulation, the Commission is of

the opinion that the BSEB was in surplus during FY 2010-11 by way of recovering

more amount than what was required to be recovered from its consumers, which in a

way means that the consumers have lent money to the BSEB. Further, the case of

revenue surplus also indicates a situation wherein the Board would have required

lesser quantum of working capital during the FY 2010-11 and in subsequent years,

4.24.5 As the Commission has genuinely compensated the BSEB by allowing carrying cost

for one and half year on trued-up revenue gap for FY 2006-07 to FY 2009-10, the

impact of revenue surplus should also be passed on to the Consumers in terms of

interest on surplus revenue at the rate of SBI PLR to reduce the tariff burden on the

consumers. Accordingly, the Commission approves interest on revenue surplus for

one and half year (FY 2011-12 entire year and FY 2012-13 half year) amounting to



Rs. 104.42 Cr. on the revenue surplus for FY 2010-11 arising on account of the

truing up exercise

Table 43: Summary of the Carrying cost permitted (R s Cr.)

Sl. Particulars Approved truing up

surplus for FY 2010-11

1. Revenue Surplus approved for FY 2010-11 to be carried forward (535.50)

2. Interest for FY 2011-12 (SBI PLR @ 11.75%) (69.62)

3. Interest for six (6) months during FY 2012-13 (SBI PLR @ 13%) (34.81)

4. Total Surplus with interest (639.93)

4.24.6 The trued up revenue surplus as approved by the Commission for FY 2010-11

amounts to Rs. 639.93 Cr. as against revenue gap of Rs 1075.12 Cr. proposed by

the Petitioner in the true-up petition of FY 2010-11.Accordingly, the same would be

carried forward to the ARR of the FY 2012-13 for adjustment.

4.24.7 The net revenue surplus to be carried forward in FY 2012-13 after the truing up

exercise for FY 2010-11 is Rs 639.93 Cr.



5 Review of FY 2011-12

5.1 Background

5.1.1 BSEB filed its ARR & tariff petition for FY 2011-12 based on the actual data available

of FY 2009-10. The Commission had approved the ARR & Tariff for FY 2011-12

along with regulatory asset in its Tariff Order for FY 2011-12 dated 1st June, 2011.

The approval was based on prudence check of the estimates presented by the Board

for costs to be incurred and revenues likely to be generated by the Board during the

year. Now based on the revised estimates of expenses for FY 2011-12, BSEB has

submitted the petition for review of its ARR for FY 2011-12. Subsequently, BSEB

vide letter No. Com/ Tar-132/ 2011-392 dated 2nd March, 2011 submitted the audited

annual accounts for FY 2010-11 along with the audit certificate issued by CAG to the

Commission.

5.1.2 The Commission in this Order has carried out the review exercise for FY 2011-12

based on the revised estimates submitted by the Petitioner and the audited annual

accounts of FY 2010-11, although the same shall be considered for final true-up

when the audited accounts for the year are made available by the Petitioner.

5.1.3 This chapter compares the performance of the Board vis-à-vis the targets set in the

Tariff Order approved for FY 2011-12. The performance data for FY 2011-12 have

been considered from the data contained in the tariff petition for FY 2012-13.

5.2 Category wise Sales


5.2.1 The Petitioner in its revised estimates has estimated the total energy sales to intra

state consumers of 6099 MUs and 848 MUs of inter-state sales during FY 2011-12.

Table 44: Summary of revised Category-wise Sales (M Us) projected by BSEB for FY 2011-12 for BSEB

Sl. Category (FY 2011-12) Approved sales in Tariff Order for FY 2011-12

BSEB Revised estimates FY

2011-12 1 Kutir Jyoti Un-metered (Rural)

260.41 65.43

2 Kutir Jyoti Metered (Rural) 257.98



Sl. Category (FY 2011-12) Approved sales in Tariff Order for FY 2011-12

BSEB Revised estimates FY

2011-12 3 Kutir Jyoti Metered (Urban) 2.66 1.29

4 Domestic ‐I 885.72 924.86

5 Domestic ‐II 1,424.17

1,217.44

6 Domestic ‐III 0.9

7 N.D.S.‐I (Rural) 28.58 20.61

8 N.D.S.‐II (Urban) 574.66 506.61

9 N.D.S.-III (Temple etc) 6.67 15.75

10 IAS‐I (Private) 263.51 271.63

11 IAS‐II (Government) 134.77 166.99

12 LTIS‐I 204.27 162.09

13 LTIS‐II 73.20 104.42

14 Public Water Works 143.49 60.39

15 Street Light‐I (Metered) 3.82 5.61

16 Street Light‐II (Unmetered) 34.37

26.2

17 Street Light‐III 1.36

18 HTSS‐I 962.15 798.56

19 HTSS‐II 288.88 351.42

20 HTSS‐III 110.29 125.45

21 HTSS 929.70 276.87

22 RTS 496.46 566.89

24 Sub-Total 6,827.78 5928.75

25 Sale from additional Power availability 693.67 171.00

26 Energy sales to intra state consumers 7521.45 6099.75

27 Energy outside State (Nepal) 550.00 555.00

28 Sale in bilateral trade/UI - 293.00

29 Total Sales 8071.45 6947.75

5.2.2 The Petitioner submitted that there is an expected growth in number of Kutir-

Jyoti/BPL consumers to the tune of 8,86,499 on account of large scale electrification

of rural areas under the RGGVY scheme undertaken by the Petitioner. The sale to

these Kutir Jyoti metered consumers in the rural areas has been projected by BSEB

based on consumption norm of 30 units per connection per month and average

number of consumers in this tariff category.


5.2.3 While scrutinizing the sales figures for FY 2011-12, the Commission has sought the

latest category-wise sales figures available with the Petitioner for FY 2011-12. In



response, the Petitioner vide letter no. Com/ tar-132/ 2011-375 dated 1st March 2012

informed the Commission that:

“The actual data for the period of April, 2011 to November, 2011 is not available as

annual accounts are not yet finalized.”

5.2.4 The Commission is of the opinion that the Board should maintain details of monthly

billing and sales related information and the same must be submitted up to the

immediate preceding month along with the revised estimates for the current year.

The Board is directed to comply with the same in all future ARR/ Tariff filings.

5.2.5 In the absence of any better information and in view of the recent APTEL judgment

dated November, 2011 directing all SERCs to endeavour to carry out review and

truing up exercise on year to year basis, the Commission is considering the sales

data submitted by the Board in approving the revised estimates for FY 2011-12.

However, the same shall be subject to final true-up when the Annual Accounts for FY

2011-12 are made available.

5.2.6 In view of the above the Commission approves the revised estimates of sales for FY

2011-12 at 6947.75 MUs as proposed by the Board.

5.3 Transmission and Distribution Losses


5.3.1 The Table below summarises the overall T&D loss levels as submitted by the

Petitioner as revised estimates for FY 2011-12:

Table 45: Proposed T&D losses as revised estimates for FY 2011-12

Particular FY 2011-12 (Approved) FY 2011-12 (Revised estimate) T&D Losses (%) 29.00 % 42.00 %

5.3.2 The Board has informed that it has undertaken massive electrification works under

the RGGVY scheme. There has been a tremendous increase in the network of BSEB

in the last 2 years in the rural areas consequent to village electrification. The village

electrification drive has led to an addition of large number of Kutir Jyoti consumers.

Number of such consumers is expected to go up to 27 lakhs within the next two

years from 5.89 lakhs in FY 2010-11. This significant expansion of the network has

not only led to increase in the technical losses in the system, but has also rendered

the system porous and prone to theft of electricity. Due to both these reasons, BSEB

has not been able to achieve the T&D loss targets set by Commission.

5.3.3 The Board has prayed to the Commission to approve the T&D loss levels for FY

2011-12 at 42% in consideration of the existing T&D loss levels of BSEB. Further, it



has also requested the Commission to compensate the difference between actual

power purchase cost and power purchase cost calculated based on the agriculture

consumption norm and T&D loss trajectory from the resource gap funding provided

by the State Government.


5.3.4 The Commission has fixed a target of T&D losses at 29% for the FY 2011-12 in its

Tariff Order for FY 2008-09. The trajectory has already been reviewed earlier and the

Commission is of the view that it is the responsibility of the BSEB to reduce its

distribution losses and take appropriate measures to bring down the losses.

5.3.5 Accordingly, the Commission approves the Transmission & Distribution losses of

29% in review for FY 2011-12. The same shall be considered at the time of

computation of the approved power purchase cost.

5.3.6 The table below summarises the T&D loss levels target set by Commission, T&D loss

as per revised estimate of BSEB and the approved T&D loss for FY 2011-12:

Table 46: Approved T&D Loss for FY 2011-12

Particulars As per loss target set for FY 2011-12 by BERC

FY 2011-12 (Revised estimate)

FY 2011-12 (Approved revised

estimates) T&D Losses (%) 29% 42.00% 29%

5.4 BSEB’s Own generation


5.4.1 BSEB owned and operated only one thermal generating plant i.e. Barauni Thermal

Power Station (BTPS) located at Barauni. The total installed capacity of the BTPS in

FY 2010-11 was 320 MW. The current status of all units of BTPS is summarized in

the table below for reference:

Table 47 : Current Status of different units of BTP S

Unit Unit capacity

(MW)

Date of

Commissioning Current status

I Retired N/A Retired since 17.02.1983

II Retired N/A Retired since 26.11.1985

III Retired N/A Retired since 05.10.1985

IV 50 9/11/1969 Shutdown since 24.04.1996

V 50 1/12/1971 Shutdown since 15.03.1995



Unit Unit capacity

(MW)

Date of


VI 110 1/12/1984 Unit working at de-rated capacity; Dismantling of

the Unit and its R&M work is planned from Jul’12

VII 110 31/03/1985 Under shutdown; R&M is underway; Expected to

come in operation from Jul’12

5.4.2 The Board has also submitted that, Units I, II and III were retired long back i.e. before

1985. Out of the remaining four units, unit number IV and V are over 42 and 40 years

old respectively and have completed their useful economic life. These Units are

under shutdown for over 17 years. At present Unit VII is under shutdown and

undergoing Renovation & Modernization (R&M) work for revival. Dismantling of the

Unit VI for R&M work is planned from July 2012 while R&M of Unit VII is expected to

be completed by June 2012.

5.4.3 BSEB has submitted that the station heat rate (SHR) is expected to improve from FY

2010-11 level of 4103 kCal/kWh to 4000 kCal/kWh for FY 2011-12. The Board has

submitted that the coal price in FY 2010-11 was Rs. 1823 per MT but in recent time it

has witnessed steep hike and has reached the level of Rs. 3317 per MT in month of

August, 2011. Hence coal price for FY 2011-12 is expected to be on higher side from

the level of FY 2010-11. Other fuel related cost is projected in the ratio of other fuel

related cost to fuel cost in FY 2010-11.

5.4.4 The assumptions and norms used by BSEB for projection of own generation cost is

summarized in the table below:

Table 48: Proposed Plant parameters & Fuel cost det erminants for BTPS

Parameters Units FY 2010-11 (Actual)

FY 2011-12 (Approved) FY 2011-12 (RE)

Gross Units Generated MU 220.44 300.00 202.00

Auxiliary Consumption MUs 39.56 30.00 30.30

Net Generation MUs 180.88 270.00 171.70


Derated Capacity MW 220 105 220

Plant Load Factor % 11.44% 32.62% 10.45%

Auxiliary Consumption % 17.95% 10.00% 15.00%

Station Heat Rate kcal/kWh 4,103 4,316 4,000

Sp. Oil Consumption ml/kWh 31.48 10.00 35.00

Gross Calorific Value of Coal kcal/kg 3,858 4,284 3,800

Calorific Value of Oil kcal/l 9,950 10,000 9,996

Overall Heat G Cal 904,534 1294878 808,009

Heat from Oil G Cal 69,046 30,000 70,671




FY 2011-12 (Approved) FY 2011-12 (RE)

Heat from Coal G Cal 835,488 12,64,878 737,337

Transit losses % - 3.80% - -

Actual Oil Consumption kl 6,939 3000 7,070

Actual Coal Consumption MT 216,560 3,06,948 194,036

Specific Coal Consumption kg/kWh 0.98 1.02 0.96

Price of Coal Rs./MT 1,823 2,328 2,600

Price of Oil Rs/kl 31,388 30,000 50,780

Coal Cost Rs. Cr. 39.48 71.46 50.45

Oil Cost Rs. Cr. 21.78 9.00 35.90

Fuel Cost Rs. Cr. 61.26 80.46 86.35

Other Fuel Related costs Rs. Cr. 5.06 - 7.13

Total Fuel Costs Rs. Cr. 66.32 80.46 93.48

Total Fuel Cost/Gross Generation Rs/unit 2.78 2.68 4.63

Total Fuel Cost/Net Generation Rs/unit 3.39 2.98 5.44

5.4.5 BSEB revises its estimate of fuel cost for FY 2011-12 to Rs. 93.48 Cr. against Rs.

80.46 Cr. approved by the Commission.

5.4.6 The Commission vide letter No. BERC- Tariff – 24/11- 825 dated 21st December,

2011 enquired about the generation related data and information of BTPS Barauni

such as actual generation, performance parameters, month wise projected

generation and performance parameters, reasons of non-achievement of

performance parameters during FY 2010-11 and FY 2011-12 (upto Nov’11) despite

investment under R&M head etc. The Commission also sought clarification on the

high generation cost of power from BTPS despite investment on R&M, actual coal

Transit loss and the basis for steep hike proposed for FY 2011-12 (RE) in Coal and

Oil price.

5.4.7 On non-achievement of performance parameters during FY 2010-11 & FY 2011-12

(upto December 2011), the BSEB has submitted that it is due to non-completion of

R&M work of unit VII. Unit VI is in operation after restoration since July 2007. As per

schedule norms, its capital maintenance is now due. The R&M of unit VI will start

after completion of R&M work of unit VII.

5.4.8 Further, BSEB has submitted that Unit VI of BTPS will go for R&M in June, 2012 and

Unit VII will come in operation after R&M in July, 2012. Unit VII will be in stabilisation

period and hence the operational parameters will be on higher side. The main reason

for such high fuel cost is cost of coal and cost of oil which has increased substantially

in recent period.



Table 49: Fuel cost trend submitted by BSEB

Sl. Financial Year Coal Price/MT (in Rs.) Oil Price/Kl (in Rs.)

LDO FO

1 2008-09 1221.27 36915.33 29260.59

2 2009-10 1701.00 43808.72 26896.00

3 2010-11 1822.92 51369.98 30037.70

5.4.9 BSEB has informed the Commission that the Board do not have weighing machine in

working condition at their power plant and hence it is not possible to know actual coal

transit loss. In such scenario, coal transit loss is projected at 0% for FY 2011-12.


5.4.10 The Commission in revised estimate approves the cost of BTPS as per trajectory set

by the Commission in the Tariff Order of FY 2011-12.

5.4.11 The Commission approves GCV of coal based on average of actual GCV of coal for

FY 2009-10 and FY 2010-11. For SHR and cost of coal the Commission approves

the values as submitted by the Petitioner keeping in mind the age of the plant and

current price trend of coal; however the Commission has considered the actual cost

of coal and oil of first nine (9) months of FY 2011-12 for approving the cost of coal

and oil for FY 2011-12.

5.4.12 Based on the above parameters, the cost of generation of BTPS as reviewed by the

Commission for FY 2011-12 is given below:

Table 50: Approved Plant parameters of BTPS & fuel cost determinants for FY 2011-12

Parameters Units FY 2011-12

(Approved in Tariff Order)

FY 2011-12 (RE)

Approved RE for FY 2011-12




Capacity MW 105 220 220.00

Derated Capacity MW 105 210 210.00

Plant Load Factor % 32.62 10.45 10.98

Auxiliary Consumption % 10.00 15.00 10

Station Heat Rate kcal/kWh 4,316 4,000 4,000.00


Gross Calorific Value of Coal kcal/kg 4,284 3,800 3,968.50

Calorific Value of Oil kcal/l 10,000 9,996 10,000.00

Overall Heat G Cal 1294878 808,009 808,000.00



Parameters Units FY 2011-12

(Approved in Tariff Order)

FY 2011-12 (RE)

Approved RE for FY 2011-12

Heat from Oil G Cal 30,000 70,671 20,200.00

Heat from Coal G Cal 12,64,878 737,337 787,800.00

Transit losses % 3.80 0 0

Actual Oil Consumption kl 3000 7,070 2,020.00

Actual Coal Consumption MT 3,06,948 194,036 198,513.29


Price of Coal Rs./MT 2,328 2,600 2,846.97

Price of Oil Rs/kl 30,000 50,780 45,240.28

Coal Cost Rs. Cr. 71.46 50.45 56.52

Oil Cost Rs. Cr. 9.00 35.90 9.14

Fuel Cost Rs. Cr. 80.46 86.35 65.65

Other Fuel Related costs Rs. Cr. - 7.13 6.39



5.4.13 The generation cost approved by the Commission on the above parameters is

subject to true-up, as and when the audited annual accounts and actual generation

data is submitted by the Petitioner for FY 2011-12.

5.5 Power Purchase


5.5.1 BSEB has projected the power purchase costs at Rs.4163 Crs including PGCIL

charges for purchase of 11,931 MU for FY 2011-12 in its revised estimate.

5.5.2 The Board in its petition has also intimated that it has started procuring 300 MW

short-term power purchase through NVVNL from September 2011 at the rate of Rs.

4.09 per kWh. Considering 85% of availability, energy available during FY 2011-12 is

projected at the level of 1304 MU.

5.5.3 The Petitioner submitted that cost of power from each source for the year FY 2011-

12 has been projected based on the actual costs incurred/bills received for the period

April’2011-August’2011.

5.5.4 Based on the above, the projected energy availability of BSEB from the long term

sources is summarized in the table below:

Table 51: Power Purchase Cost Projected by the Peti tioner for FY 2011-12 (RE)

Station Allocated Capacity (MW)

Units available (MU)

Per unit cost ( Rs/ kWh)

Total Cost (Rs Cr.)






Total Cost (Rs Cr.)

NTPC Farakka 466 2,889 4.36 1,260 Talchar 398 2,449 2.84 696 Kahalgaon 439 2,670 3.63 969 KBUNL 110 321 3.65 117

NHPC Rangit 21 119 1.54 18 Teesta 109 549 1.28 70

PTC Chukka 80 543 1.53 83 Tala 260 909 1.78 162 Others

NEA - 4 4.41 2 BSHPC 50 30 2.49 8 NSSM 18 29 3.35 10 Short/Medium Term 300 1,304 4.09 533 RE Purchase Solar 1 15.00 1 Other renewable 114 3.90 44 PGCIL Charges 190

Total 2250 11,931 3.49 4,163


5.5.5 Plant-wise expected power purchase quantum and its total cost for FY 2011-12 (RE)

as approved by the Commission are as given below:

Table 52: Approved revised estimates of Power Purch ase Cost for FY 2011-12 (RE)

Station

Approved Units

(MU) in FY 2011-12 Tariff

Order

Approved Per unit

cost ( Rs/ kWh) in FY 2011-12 Tariff

Order

Approved Total

Cost (Rs Cr.) FY 2011-12

Tariff Order

Approved Units

(MU) FY 2011-12

(RE)

Per unit cost (

Rs/ kWh)

Now Approved

Total Cost (Rs Cr.) FY 2011-12

(RE) NTPC Farakka 2889 3.42 988 2,889 4.36 1,258 Talchar 2590 2.41 624 2,449 2.84 694

Kahalgaon 2851 2.94 837 2,670 3.63 968 KBUNL 500 3.65 183 321 3.65 117

NHPC Rangit 145 1.89 27 119 1.54 18

Teesta 550 1.71 94 549 1.28 70



Station

Approved Units

(MU) in FY 2011-12 Tariff

Order

Approved Per unit

cost ( Rs/ kWh) in FY 2011-12 Tariff

Order

Approved Total

Cost (Rs Cr.) FY 2011-12

Tariff Order

Approved Units

(MU) FY 2011-12

(RE)

Per unit cost (

Rs/ kWh)

Now Approved

Total Cost (Rs Cr.) FY 2011-12

(RE)

PTC Chukka 560 1.59 89 543 1.53 83

Tala 1020 1.84 188 909 1.78 161 Others NEA 67 4.33 29 4 4.41 2 BSHPC 41 2.49 10 30 2.49 8 NSSM 12 4.12 5 29 3.35 10 Short/Medium Term - - - 1,304 4.09 533 RE Purchase Solar 1 15.00 1 1 15.00 1 Other renewable 131 3.90 51 114 3.90 44 PGCIL Charges 190

Total 11,356 3395 11,931 4,157

5.5.6 The revised power purchase cost for FY 2011-12 approved by the Commission from

the different sources is subject to true-up, as and when the actual power purchase

cost with audited annual accounts will be submitted by the Petitioner for FY 2011-12.

5.6 Energy Balance


5.6.1 Energy balance depicts the balance between total energy sales and T&D losses (i.e.)

energy requirement and energy available from own generation and power purchased

from various generating sources.

5.6.2 BSEB has projected inter-state transmission losses of 3.31% with a justification that it

is the actual central sector eastern region transmission losses. Further, BSEB vide

letter No Com/Tar/161/2011-260 dated 09th February, 2012 explained that the

Energy balance has been worked out based on the same methodology as adopted

by the Commission in its Tariff Order for FY 2011-12. For power availability, own

generation and net power purchase is taken into consideration. For power

requirement, sale to consumer, additional power sale to consumer, sale to Nepal and

sale through Bilateral/UI has been considered. T&D losses are applied on sale to

consumers in Bihar and Sale to Nepal only and not applied on the sale under

bilateral/UI while projecting for FY 2011-12.



5.6.3 The projected gross energy requirement, energy availability and additional power

purchase required because of actual and approved losses for BSEB for FY 2011-12

(RE) is as follows:

Table 53: Proposed Energy Requirement & Energy Bala nce

Particulars

FY 2011-12 (Approved

by BERC FY 2011-12)

FY 2011-12 (As per

BSEB loss projection)

FY 2011-12 (As per

BERC loss approved)

Energy Sales within State (MU) 6828 5929 5929

Sale from additional Power Availability (MU) 977 171 171 Energy outside State (Nepal) (MU) 550 555 555 Sale in biteleral trade/UI (MU) - 293 293

Total Sales (MU) 8355 6948 6948 T&D Losses (MU) 3013 4819 2718 T&D Losses (%) 29% 42% 29% Energy Requirement 11,368 11,768 9,667

Energy Availability (MU) Own Generation (MU) 270 172 172 Total Power Purchase from long term sources (MU) 11,356 11,931 11,931 Transmission loss in regional losses (%) 2.43% 3.31% 3.31% Less: Transmission loss in regional losses (MU) 258 335 335 Net Power Availability (MU) 11,368 11,768 11,768 Disallowable Power Purchase (MU) 2101

5.6.4 BSEB has further submitted that for FY 2011-12, BSEB projects to under-achieve the

T&D loss as compared to the T&D loss trajectory approved by the Commission

hence BSEB is required to purchase additional power of 2101 MUs for FY 2011-12

as indicated in Energy Balance. Based on the net power purchase rate, additional

power purchase cost works out to Rs. 754.26 Cr. for FY 2011-12. Board has

requested the Commission to reduce resource gap funding to the extent of such

disallowances and only remaining amount need to be considered as subsidy

available for consumers.


5.6.5 The Commission approves the limits for energy requirement and energy availability

as given below for the FY 2011-12. Commission while approving the energy balance

considered the inter-state transmission losses of 2.43% as approved in the Tariff

Order of FY 2011-12. Further, the disallowed power purchase cost is estimated on

the basis of the approved level of T&D losses.



Table 54: Approved Energy Requirement for FY 2011-1 2 (RE)

Particulars

FY 2011-12 (Approved by BERC

FY 2011-12)

FY 2011-12 (As per

BERC loss approved)

FY 2011-12 (RE)

Approved by BERC

Energy Sales within State (MU) 6828 5929 5,929 Sale from additional Power Availability (MU) 977 171 171 Energy outside State (Nepal) (MU) 550 555 555 Sale in biteleral trade/UI (MU) - 293 293 Total Sales (MU) 8355 6948 6,948 T&D Losses (MU) 3013 2718 2,718 T&D Losses (%) 29% 29% 29.00% Energy Requirement 11,368 9,667 9,667 -

Energy Availability (MU) - Own Generation (MU) 270 172 182

Total Power Purchase from long term sources (MU) 11,356 11,931 9,721 Transmission loss in regional losses (%) 2.43% 3.31% 2.43% Transmission loss in regional losses (MU) 258 335 236.22

Net Power Availability (MU) 11,368 11,768 9,667

Disallowable Power Purchase (MU) 2101 2,210

5.7 Operation & Maintenance Expenses (O&M)

Employee Expenses


5.7.1 The employee cost comprises salaries and wages, dearness and other allowances,

pension, gratuity and staff welfare expenses etc.

5.7.2 BSEB submitted that they are calculating the terminal liabilities on provisional basis

and hence the amount of terminal benefits/retiral dues payable to the retired



leave encashment. BSEB has also submitted that, in view of the severe financial

crunch mainly on account of average tariff lower than average cost of supply, BSEB

has not been able to maintain separate fund for retiral liabilities as per the provisions

made in the Annual Accounts hence, there has been a practice by BSEB to meet

such unfunded liability out of the revenue realized from sale of energy during the

period of incidence of discharge of such liabilities.



5.7.3 BSEB has accordingly submitted that the total expenditure under the head of

employee costs is 593.90 Cr. as per the annual accounts for FY 2010-11 and Rs.

168.99 Cr. paid to its retired employees as unfunded terminal liabilities in FY 2010-

11.

5.7.4 For projection of employee cost for FY 2011-12, BSEB has considered that the

employee expenses will increase by 10% in FY 2011-12 from level of FY 2010-11.

BSEB has also projected additional cost of Rs. 11.07 Cr. for new employees for FY

2011-12. The employee cost for FY 2011-12 has been projected to be Rs. 829.8 Cr..

The details of employee cost for FY 2010-11 (actual), FY 2011-12 (RE) is as given

below.

Table 55: Employees Cost Proposed for FY 2011-12 (R E) (Rs Cr)

Sl. Particulars FY 2011-12 (RE)

SALARIES & ALLOWANCES

1 Basic Pay + Special Pay 265.24 2 Dearness Pay

3 Dearness Allowance 107.74 4 House rent Allowance 21.83 5 Fixed medical allowance 2.36 6 Medical reimbursement charges 0.90 7 Over time payment 4.93 8 Other allowances 5.39 9 Generation incentive - 10 Bonus - 11 Total 408.39 12 Leave encashment 17.14 13 Gratuity 18.16 14 Commutation of Pension - 15 Workman compensation 0.36 16 Ex- gratia -

17 Total 35.66 Pension Payment

18 Basic Pension 203.32 19 Dearness Pension - 20 Any other expenses 2.17

21 Total 205.50 22 Total (11+17+21) 649.54 23 Payment made for unfunded liabilities 189.63 24 Increase in employee cost Due to New Recruitments 11.07 25 Grand Total (22+23+24) 850.24

26 Less: Employee cost capitalized 20.44 27 Net Employee Cost 829.80




5.7.5 The Commission in the Tariff Order for FY 2011-12 had stated that:






“4.7.13. The Commission directs BSEB to report the steps taken towards creation

of the trust. The Commission shall be compelled to take appropriate action, if this

direction is not complied with immediately.”

5.7.6 The Commission has already directed BSEB to create separate trust for making

payments for terminal liabilities in its Tariff Order for FY 2006‐07 as reproduced

below:

“The BSEB shall take steps to invest contribution of employees towards pension

etc., through a Trust and make arrangements to pay the pension, gratuity etc., from

the earnings of the investments through the Trust.”

5.7.7 It is apparent that BSEB has utilised the amounts available in the fund created

towards GPF and GSS contribution towards meeting its day to day expenses i.e. for

the purpose of funding its working capital requirements. Accordingly, permitting these

expenses to be passed on to the consumers shall mean that the consumers have to

bear the burden for the past financial mismanagement by the Board. The

Commission is of the view that such liabilities on account of past issues should be

funded by BSEB through its own means and should not be passed on to the

consumers at this point of time. The regulations anyways provide for normative

working capital interest to be passed on to the consumers thus meeting the working

capital requirements of the licensee for the year. However, the Commission has

always been allowing the present provision for existing employees on accrual basis.

Table 56: Approved revised estimates of employee Co st for FY 2011-12 (RE) (Rs. Cr.)

Employee cost FY 2011-12 (Approved by BERC)

FY 2011-12 (Revised estimate by BSEB)

FY 2011-12 (RE) Now approved by Commission

Generation 46.00 44.21 34.13

Transmission 88.00 98.66 76.29

Distribution 664.00 686.93 530.93

Total Employee Cost 798.00 829.80 641.36



5.7.8 The Commission has projected the employee cost of FY 2011-12 separately for each

of the generation, transmission and distribution function considering the figures of

audited annual accounts of FY 2010-11 as base value. The Commission has allowed

the additional cost of Rs. 11.07 Cr. for new employees during FY 2011-12 and

distributed the same in the ratio of employee cost of each function based on the

audited accounts of FY 2010-11. The Commission in current economic situation

considers escalation rate of 9.56% appropriate for determining employee cost for

FY2011-12 for each function. Based on the same, the Commission approves

employee cost for FY 2011-12 as depicted in the table given below:

Table 57: Function-wise employee Cost approved for FY 2011-12 (RE) (Rs Cr.)

Particulars Generation Transmission Distribution Total

Employee Cost 34.68 77.40 538.62 650.69

New Employee cost 0.59 1.32 9.16 11.07

Less : Capitalization 1.13 2.42 16.85 20.40

Net Employee Cost 34.13 76.29 530.93 641.36

% Share ot Total cost 5.32% 11.90% 82.78% 100.00%

5.7.9 The revised employee cost for FY 2011-12 (RE) approved by the Commission is

subject to true-up, as and when the audited annual accounts and actual employee

cost will be submitted by the Petitioner for FY 2011-12.

Repair & Maintenance Expenses (R&M)


5.7.10 BSEB has projected R&M expenses of Rs. 100.62 Cr. for FY 2011-12. BSEB has

projected that the R&M expenses will increase by 10% in FY 2011-12 from level of

FY 2010-11.

Table 58: R&M costs submitted by Petitioner for FY 2011-12 (RE) (Rs Cr)

Particulars FY 2010-11 (Actual)


FY 2011-12 (RE)

Plant & Machinery 34.56 43.16 43.16 Building 2.20 7.27 7.27 Hydraulic works 2.93 0.33 0.33 Civil Work 0.18 2.88 2.88 Line cable & network 17.10 35.03 35.03 Vehicles 0.09 0.20 0.20 Furniture & fixtures 0.20 0.04 0.04

Office equipments 0.14 0.15 0.15 Operating expenses - 5.94 5.94

Total expenses 57.40 95.00 95.00





FY 2011-12 (RE)

Add cost of materials procured from Board's Hdqrs - - - Net Expenses 57.40 95.00 95.00 Cost of water & Other Misc. Charges 5.11 - 5.62 Total R&M Expenses charged 62.51 95.00 100.62


5.7.11 The Commission had already approved significant increase for FY 2011-12 during

the past Tariff Order with the expectation that higher R&M cost will help BSEB in

improving operational efficiency.

Table 59: Approved revised estimates of R&M Cost fo r FY 2011-12 (RE) (Rs. Cr.)

R&M cost FY 2011-12 (Approved by BERC)


FY 2011-12 (RE) Now approved by Commission

Generation 8.25 13.87 15.73


Distribution 67.07 67.07 72.07

Total R & M Cost 95.00 100.62 100.62

5.7.12 The Commission has computed the R&M cost separately for Generation,

Transmission and Distribution functions for FY 2011-12 considering the actual

function-wise break-up data as per the annual accounts of the Board for FY 2010-11

as base value. The Commission in current economic situation considers escalation

rate of 9.56% appropriate for determining R&M cost for FY2011-12. Based on the

same, the Commission approves R&M cost for FY 2011-12 as depicted in the table

given below:

Table 60: Function-wise approved R&M costs for FY 2 011-12 (RE) (Rs Cr) Particulars Generation Transmission Distribution Total R&M Cost 10.11 12.82 72.07 95.00 Add : Water & Misc charges 5.62 - - 5.62 Total 15.73 12.82 72.07 100.62 % Share 15.63% 12.74% 71.63% 100.00%

5.7.13 The revised R&M cost for FY 2011-12 (RE) approved by the Commission is subject

to true-up, as and when the actual R&M cost will be submitted by the Petitioner for

FY 2011-12.

Administration & General Expenses (A&G)




5.7.14 BSEB has projected A&G cost on the 3 years CAGR based on the audited data of

A&G expenses for the period FY 2007-08 to FY 2010-11 which is 12% and thus the

A&G expenses post capitalization are projected at Rs. 53.49 Cr. for FY 2011-12.

Table 61: A&G costs submitted by Petitioner for FY 2011-12 (Rs Cr)

Particulars FY 2010-11 (Actual) FY 2011-12 (RE)

Rent, rates & taxes 0.50 0.56

Insurance - -

Telephone, postage &Telegrams 0.99 1.11

Legal Charges 0.98 1.10

Audit Fees 3.25 3.64

Consultancy fees - -

Technical fees 0.01 0.01

Other professional charges - -

Conveyance & travel expenses 4.99 5.59

Others 29.39 32.92

Freight 0.17 0.19

Total expenses 40.29 45.13

Less Capitalised 1.46 1.64

Net expenses 38.83 43.49

Add Prior period - -

Total A&G Expenses 38.83 43.49

Metering, Billing and collection - 10.00

Total A&G Expenses 38.83 53.49


5.7.15 The Commission in current economic situation considers escalation rate of 9.56%

appropriate for determining R&M cost for FY 2011-12. Based on the same, the

Commission has approves the revised R&M cost for FY 2011-12 as depicted in the

table given below:

Table 62: Function-wise approved revised estimates of A&G costs for FY 2011-12 (RE) (Rs. Cr)


A&G Cost 1.29 4.79 38.06 44.15


Add : Metering related cost - - 28.17 28.17

Total 1.25 4.62 64.85 70.72

% Share 1.76% 6.53% 91.71% 100.00%

Table 63: Approved revised estimates of A&G Cost fo r FY 2011-12 (Rs. Cr.)

A&G cost FY 2011-12 (Approved by BERC)


Now approved for FY 2011-12 (RE)

Generation 1.26 1.27 1.25



A&G cost FY 2011-12 (Approved by BERC)




Distribution 45.06 47.50 64.85

Total A &G Cost 51.97 53.49 70.72

5.7.16 The revised A&G cost for FY 2011-12 (RE) approved by the Commission is subject

to true-up, as and when the actual A&G cost will be submitted by the Petitioner for

FY 2011-12.

Operation & Maintenance Expenses (O&M)

Table 64: Approved revised estimates of O&M Cost fo r FY 2011-12 (Rs. Cr.)

Sl. Particulars FY 2011-12 (Approved by BERC)

FY 2011-12 (Revised

estimate by BSEB)

Now approved for FY 2011-12

(RE)

1 Employee cost 798.0 829.80 641.36

2 Repair and Maintenance (R&M) Expenses 95.0 100.62 100.62

3 Administrative & General (A&G) Expenses 51.97 53.49 70.72

4 Total O&M Cost 944.97 983.91 812.70

5.7.17 The revised O&M cost for FY 2011-12 (RE) approved by the Commission is subject

to true-up, as and when the actual O&M cost will be submitted by the Petitioner for

FY 2011-12.


Petitioner’s Submission

5.8.1 BSEB has taken up R&M works of Unit VI and VII under the RSVY scheme

sanctioned by the Planning Commission, Government of India. Capacity extension of

Muzaffarpur Thermal Power Plant (2x195 MW) & Barauni TPS (2X250 MW) has

been sanctioned by the State government. BSEB has also undertaken various

transmission network capacity addition, augmentation and improvement projects for

achieving its objective of making available reliable power across the State. BSEB is

already implementing many schemes for strengthening, augmenting and expanding

its distribution network. For FY 2011-12 BSEB would support ongoing schemes of

Distribution strengthening program. The ongoing schemes include transformer

replacement, procurement of new transformers, and replacement of old conductor of

HT & LT line, construction of new HT & LT lines, PSS & bays.



5.8.2 BSEB has furnished function wise / scheme wise (without description of assets)

details of the proposed capital expenditure for FY 2010-11 & FY 2011-12 as given in

the table below:

Table 65: Planned Capital Expenditure proposed by B SEB for FY 2011-12

Sl. Particulars FY 2010-11 (Actual) FY 2011-12 (RE)

1 Generation a) Ongoing schemes 340.66 1,181.21 b) BRGF 14.40 153.00 Sub Total 355.06 1,334.21 2 Transmission

a) BRGF - 450.13 b) Mahatma Gandhi Setu Cable crossing 14.67 13.96 c) Ongoing Scheme 0.57 131.26

Sub Total 15.24 595.35 3 Distribution a) Ongoing Scheme 70.89 595.42 b) APDRP 68.88 68.66 c) R-APDRP 0.05 96.82

d) BRGF - - e) ADB - 20.00 f) PMGY 1.18 0.80 g) MNP - 0.50 h) Tal Diara 0.38 1.00 i) Border Area 0.04 0.05 j) ACA 21.94 76.75 k) RGGVY 237.11 315.28 l) Deposit Work 24.57 12.93

m) Others works 172.14 52.93 n) Others Capital works 43.13 92.50 Sub Total 640.31 1,333.63 Total 1,010.61 3,263.19

5.8.3 The capitalization rate of capital expenditure and opening balance of CWIP was 30%

in FY 2009-10 and 43% in FY 2010-11. BSEB has considered capitalization rate of

43% for FY 2011-12.

Commission’s View

5.8.4 As per the licence conditions para 51 of chapter 5 of BERC (Grant of licence for

Distribution of electricity) Regulations, 2007, BSEB is required to furnish details of the

proposed schemes expenditure before commencement of the project with description

of assets and its usability in furthering the efficiency or growth in the business of the

Board. Further, BSEB should seek prior approval of such capital expenditure from



the Commission. In the absence of the approval, the Commission may disallow

corresponding depreciation and interest cost.

5.8.5 The Commission vide letter no. BERC- Tariff – 24/11- 825 dated 21st December,

2011 sought clarification on sources of funding like loans, capital grant, consumer

contribution or own funding. In reply BSEB vide letter No Com/Tar/161/2011-260

dated 09th February, 2012 provided details of sources of funding. The funding details

of various schemes as provided by BSEB are as given in the table below:

Table 66: Funding details proposed by BSEB for FY 2 011-12 (RE)

Sl. Particulars FY 2011-12 (RE)

Capital Expenditure Grant Consumer

Contribution Borrowings

1 Generation a) Ongoing schemes 1,181.21 - 1,181.21 b) BRGF 153.00 153.00 - -

Sub Total 1,334.21 153.00 - 1,181.21

2 Transmission a) BRGF 450.13 450.13 - -

b) Mahatma Gandhi Setu Cable crossing

13.96 - - 13.96

c) Ongoing Scheme 131.26 - - 131.26

Sub Total 595.35 450.13 - 145.22 3 Distribution

a) Ongoing Scheme 595.42 - - 595.42 b) APDRP 68.66 - - 68.66 c) R-APDRP 96.82 - - 96.82

d) BRGF - - - - e) ADB 20.00 - - 20.00 f) PMGY 0.80 - - 0.80 g) MNP 0.50 - - 0.50 h) Tal Diara 1.00 - - 1.00

i) Border Area 0.05 - - 0.05 j) ACA 76.75 - - 76.75 k) RGGVY 315.28 - - 315.28 l) Deposit Work 12.93 - 12.93 -

m) Others works 52.93 - 52.93 -

n) Others Capital works 92.50 - 92.50

Sub Total 1,333.63 - 65.86 1,267.77

Total 3,263.19 603.13 65.86 2,594.20

5.8.6 As in the power projects such as Muzaffarpur Thermal Power Plant (2x195 MW) &

Nabhinagar Super Thermal Power Plant (3 x 660 MW); BSEB is the equity partner

with NTPC for which separate tariff will be determined by the appropriate

Commission, So the Commission has not considered the capital expenditure under



thses plants for computation of GFA, interest and finance charges and depreciation.

With respect to capacity extension of Barauni TPS (2X250 MW) which is expected to

be commissioned in June 2014, i.e. FY 2014-15, GFA, interest and finance charges

and depreciation has not been considered in FY 2011-12. In light of the above, the

Commission has only considered the capital expenditure of Rs. 153 Cr. for FY 2011-

12 as grant under RSVY scheme for R&M of BTPS, for the purpose of computation

of GFA.

5.8.7 Based on the details provided by BSEB, the Commission considers the following

funding pattern for proposed capital expenditure for computation of allowable interest

based on the percentage described in paragraph 5.8.9 and 5.8.10.

Table 67: Funding pattern considered by Commission during FY 2011-12 (Rs. Cr.) (RE)

Sl. Particular Generation Transmission Distribution Total

1 Capital Expenditure 1,334.21 595.35 1,333.63 3,263.19 2 Grant 153.00 450.13 - 603.13 3 Consumer contribution - - 65.86 65.86 4 Borrowings 1,181.21 145.22 1,267.77 2,594.20

5.8.8 BSEB has proposed significantly high capital expenditure for FY 2011-12, compared

with the capital expenditure incurred by BSEB in past years is considered. However

the Commission for this order has considered the capital expenditure proposed by

BSEB as it has been able to demonstrate that equivalent amount funding is available

for carrying out the proposed capital expenditure.

5.8.9 The capitalization of the above proposed capital expenditure is considered in

accordance with the capitalization schedule given in the table below:

Table 68: Capitalization schedule for proposed capi tal expenditure Sl. Particulars 1st year 2nd year 3rd year 4th year

1 Generation 50% 50% 0% 0%

2 Transmission 25% 30% 30% 15%

3 Distribution 25% 25% 25% 25%

5.8.10 Further for computation of additions to GFA from capitalization of CWIP, the closing

balance of FY 2010-11 and the capitalization rate as given in the table below has

been considered which is in line with the methodology adopted by the Commission in

the Tariff Oreder for FY 2011-12.

Table 69: Capitalization schedule for CWIP Sl. Particulars FY 2011-12 FY 2012-13 FY 2013-14

1 Generation 30% 30% 40%



Sl. Particulars FY 2011-12 FY 2012-13 FY 2013-14

2 Transmission 30% 30% 40% 3 Distribution 30% 30% 40%

5.8.11 To ascertain function wise asset addition due to capitalization of CWIP, the closing

balance of CWIP reflected in the annual accounts of FY 2010-11 was segregated into

the three functions based on the contribution of these functions to the total GFA at

the end of FY 2010-11.

5.8.12 The addition to the assets from loans, grants and CWIP was computed for FY2011-12.

Table 70: Approved GFA by Commission FY 2011-12 (RE )

Sl. Particulars Generation Transmission Distribution Total

1 Opening GFA (FY 2011-12) 334.28 739.92 2,781.87 3,856.07

2 Addition during the year 109.84 222.64 610.88 943.36

3 Closing GFA (FY 2011-12) 444.12 962.56 3,392.75 4,799.43

5.8.13 The GFA levels as approved by the Commission for FY2011-12 are given in the table below:

Table 71: Approved GFA (Rs. Cr.) by Commission FY 2 011-12 (RE)

Sl. Particulars Closing GFA for FY 2011 -12 as per Tariff Order of FY 2011-12

Closing GFA for FY 2011 -12 (RE) Now approved

1 Generation 563.73 444.12

2 Transmission 1,161.63 962.56

3 Distribution 2,687.73 3,392.75

4 Total 4,413.09 4,799.43

5.9 Depreciation


5.9.1 BSEB has computed depreciation for FY 2011-12 by calculating depreciation on

existing assets at weighted average rates of FY 2010- 11. BSEB has not considered

depreciation on assets which are not in use. BSEB has also not considered

depreciation on assets which have depreciated upto 90% of its acquisition cost.

Table 72: Revised estimate of Depreciation charges proposed by BSEB FY 2011-12 (RE) Sl. Particulars FY 2010-11 (Actual) FY 2011-12 (Approved) FY 2011-12 (RE) 1 Generation 2.43 11.13 21.84

2 Transmission 14.57 29.96 22.78 3 Distribution 72.01 76.20 109.59 4 Total 89.00 117.29 154.21

Commission’s View



5.9.2 The Commission has considered closing balance of GFA as achieved in FY 2010-11

as per the annual accounts of that year. The Commission has thereafter considered

asset additions of Rs. 943.36 Crores for FY 2011-12. This addition is as per the

explanation provided in the earlier paragraph at 5.8.12.

5.9.3 It is noted here that the Clause 17 of Central Electricity Regulatory Commission

(Terms and Conditions of Tariff) Regulations, 2009 specifies that depreciation shall

be calculated annually based on Straight Line Method at rates specified in Appendix -

III of the said regulations. Provided that, the remaining depreciable value as on 31st

March of the year closing after a period of 12 years from date of commercial

operation shall be spread over the balance useful life of the assets.

5.9.4 For existing assets age-wise and asset wise description has not been provided by

BSEB, the Commission has used the weighted average rate of deprecation achieved

in FY 2010-11 for them. For new assets created during FY 2011-12, rates prescribed

by CERC have been applied by the Commission to determine deprecation allowable

for FY 2011-12. Function wise computation of depreciation has been carried out by

the Commission based on projected fixed asset for each function during the FY

2011-12.

5.9.5 Based on approved GFA and additional capitalization computed during FY 2010-11,

the Commission calculated the depreciation for FY 2011-12. However, the

depreciation on the assets created out of consumer contribution, grant has been

deducted from the gross depreciation to arrive at the net depreciation charge for

BSEB. The computation of the depreciation on the assets created out of consumer

contribution, grant is based on the average of ratio of ‘Grant and contribution’ and

‘GFA’ for past three (3) years.

Table 73: Function wise revised Depreciation approv ed for FY 2011-12 (RE) (Rs Cr) Sl. Particulars Generation Transmission Distribution Total

1 Gross Depreciation 5.96 22.23 125.28 153.47

2 Net Depreciation 4.62 17.12 86.68 108.42

5.9.6 The revised depreciation for FY 2011-12 (RE) approved by the Commission is

subject to true-up, as and when the actual depreciation will be submitted by the

Petitioner for FY 2011-12.

Table 74: Approved revised estimate of Depreciation (Rs. Cr.) charges for FY 2011-12 (RE)

Sl. Particulars FY 2011-12 (Approved in Tariff Order of FY

FY 2011-12 (RE) (Projected by BSEB




2011-12) in revised estimate )

1 Generation 11.13 21.84 4.62 2 Transmission 29.96 22.78 17.12 3 Distribution 76.20 109.59 86.68 4 Total 117.29 154.21 10 8.42

5.10 Interest & Finance Charges


5.10.1 For calculation of Interest and Finance charges for FY 2011-12, BSEB has

considered the closing balance of loans of FY 2010-11 used for funding capital

expenditure and the new loans proposed to be drawn during the year as per the

indicated capitalization schedule of the proposed capital expenditure.

5.10.2 Based on the capitalization and its funding pattern, additional loan requirement has

been worked out for FY 2011-12. BSEB has assumed that all additional funding

requirements will be met by the State Government at the rate of 13% per annum.

5.10.3 Total repayment of loans has been considered equal to the depreciation proposed for

the year. Repayment of Loans other than state plan loans is proposed at 10% of the

opening loan amount. The repayment of state plan loans have been considered

equivalent to depreciation amount left after repayment of non-state loans.

5.10.4 For existing loans, prevailing interest rate has been considered while for new loans

interest rate of 13% is proposed. Based on the same, BSEB revises its estimate of

Interest and Finance Charges for FY 2011-12 to Rs. 464.31 Cr. as against Rs.149.01

Cr. approved by the Commission. Function-wise Interest & financial charges

calculated are as shown in table below:

Table 75: Proposed Interest & Financial Charges for FY 2011-12 (RE) Sl. Particulars FY 2010-11 (Actual) FY 2011-12 (Approved) FY 2011-12 (RE) 1 Generation 50.80 25.00 100.89 2 Transmission 49.57 42.00 60.33 3 Distribution 230.12 82.01 303.10 4 Total 330.49 149.01 464.31

Commission’s View

5.10.5 The Commission vide letter no. BERC-Tariff-24/11-88 dated 27th January, 2012

sought details of the loans and the corresponding assets created out of these loans.

Since interest is payable only on loans used for creating usable assets, which have



been put to use during the year. BSEB could not provide the desired information. The

Commission has excluded loans raised for working capital or to meet revenue deficit

included for interest claimed by BSEB.

5.10.6 In absence of desired information and identification of loans used for creation of

assets, the Commission decided to adopt an indirect methodology to compute

outstanding balance of loans as on 1st April, 2011 used for asset creation. In the

absence of the adequate data with BSEB the Commission has considered the



“The repayment for the year of the tariff period 20 09-14 shall be deemed to be

equal to the depreciation allowed for that year”

Closing balance of GFA as on 31st March 2011 (as per annual accounts) provides

the value of assets created out of all possible sources of funding. If from this balance

all the assets created from consumer contribution and grants are excluded then the

balance assets have been funded from the loans raised till date.

5.10.7 Further if the accumulated depreciation as on date is excluded then balance will be

the assets funded out of existing loans. The accumulated depreciation can be

considered as proxy for the loans repaid till date. The Commission has used this

concept to compute opening level of loan as on 1st April, 2011 used for the creation

of fixed assets. The Commission considers this approach reasonable in the absence

of supporting evidence of utilization of loans for asset creation and its usability in

business. However, Commission may revisit this computation on getting the actual

details from BSEB at the time of true-up based on audited accounts of FY 2011-12.

5.10.8 The additional loan to the extent of asset capitalized during the year can only be

considered for interest cost computation. Interest cost on remaining loan amount

should be capitalized and considered as part of capital cost of the asset. This is in

accordance with the BERC (Terms and condition for determination of Tariff)

Regulation, 2007, which provides for interest only on assets which are capitalized

and not on the entire capital expenditure incurred during the year.

5.10.9 Assets capitalized during the year can be funded through grant, consumer

contribution and borrowing. Interest is payable on loans equivalent to capitalized

assets funded through borrowings only. To determine this additional loan the



proposed capitalization is segregated in the ratio of existing levels of grant, consumer

contribution and borrowings.

5.10.10 The approved depreciation during the year is used as the repayment amount during

the year.

5.10.11 Interest rate of 13% as proposed by BSEB has been verified from the sanction letters

issued by the State Government and the proposed rate was found in line with the

interest rate charged by the State Government. The Commission has computed the

interest and finance charges for each function on the basis of the loan availed by the

Board for the respective function.

5.10.12 The repayement of the loan during the tyear has been computed at 10% of the

outstanding loan at the beginning of the year as per the methodology adopted in

Tariff order for FY 2011-12.

5.10.13 The Commission has considered the closing balance of loan for FY 2010-11 (as per

true-up Order) as the opening loan for FY 2011-12 and has computed the interest on

loan for FY 2011-12 (RE). the Commission has computed the interest on loan as per

the methodology adopted in Tariff order for FY 2011-12, Based on the above, interest

on loan for FY 2011-12 (RE) as approved by Commission based on capitalization

considered during the year is given in the table below:

Table 76: Approved revised estimate of Interest & F inance Charges for FY 2011-12 (RE) (Rs Cr)

Sl. Particulars FY 2011-12 (Approved in Tariff Order of FY 2011-12)


1 Opening Loan 775.00 471.49 2 Addition of Loan 742.40 558.99 3 Repayment of Loan 77.50 47.15 4 Closing Loan 1439.90 983.33 5 Interest rate 13% 13.00% 6 Interest on Loan 149.01 94.56

5.10.14 Based on the interest finance charges of FY 2010-11 as per audited annual accounts

of BSEB, the interest cost for Generation, Transmission and Distribution business of

BSEB has been worked out for FY 2011-12.

5.10.15 The interest and finance charges for FY 2011-12 as approved in Tariff Order for FY

2011-12, revised estimate for FY 2011-12 and now approved by Commission for FY

2011-12 (RE) is shown in table below.



Table 77: Approved revised estimate for Interest & Financial Charges for FY 2011-12 (RE)

Sl. Particulars FY 2011-12

(Approved in Tariff Order of FY 2011-12)

FY 2011-12 (RE) (Projected by BSEB in

revised estimate )


1 Generation 25.00 100.89 20.35 2 Transmission 42.00 60.33 14.18 3 Distribution 82.01 303.10 60.03 4 Total 149.01 464.31 94.56

5.10.16 The revised interest and finance charges for FY 2011-12 (RE) approved by the

Commission is subject to true-up, as and when the actual interest and finance

charges will be submitted by the Petitioner for FY 2011-12.



5.11.1 BSEB has proposed interest on working capital in accordance with the applicable

regulations notified by the Commission. The considerations for computing working

capital requirement and interest thereon are summarized in the table below for each

of the functions of BSEB.

Table 78: Methodology adopted by BSEB for calculati on of Working Capital

Description Generation Transmission Distribution

Norms for calculation

Thermal WC = 2 months cost of coal + 2 months cost of secondary fuel oil + Maintenance spares (at 1% of GFA escalated at 6 % per annum) + 1 month O&M + Receivables (2 months of fixed and variable charges).

WC = Maintenance spares ((at 1% of GFA escalated at 6 % per annum) + Receivables (2 months of transmission charges) + 1 month O&M

WC=1 month O&M + Maintenance spares (at 1% of GFA escalated at 6 % per annum) + 2 months revenue

Reference BERC (Terms and conditions for determination of Tariff) Regulations, 2007.

5.11.2 BSEB has proposed short-term prime lending rate of SBI as on 01/04/2011 i.e.

13.00% for computing interest on working capital. The BSEB has proposed interest

on working capital at Rs. 163.31 Cr. for FY 2011-12.

Table 79: Proposed revised estimates of Interest on Working Capital for FY 2011-12 (RE) (Rs Cr) Particulars Generation Transmission Distribution Total 2 month primary fuel & secondary fuel 93 - - 93

1 month O&M 5 10 67 82 Receivables 53 45 944 1,042 Maintenance Spares 3 7 28 38



Particulars Generation Transmission Distribution Total Total WC Requirement 155 62 1,039 1,256

Interest Rate (SBI PLR as on Apr’11) 13.00% 13.00% 13.00% 13.00% Interest on Working Capital 20.13 8.12 135.06 163.31

Commission’s View

5.11.3 The Commission is of the view that, since the working of BSEB is still as an

integrated unit, the Commission has not considered receivables for Generation and

transmission function.

5.11.4 Interest on working capital is computed on normative basis as per BERC (Terms and

conditions for determination of Tariff) Regulations, 2007. SBI PLR rate of 13% as on

1st April, 2011 has been considered for calculation of interest for funding working

requirement. Based on the same, Commission approves revised estimate of interest

on working capital for FY 2011-12 (RE) as given in the table below:

Table 80: Approved function wise Revised estimate o f Interest on Working Capital for FY 2011-12 (RE) (Rs Cr)


2 month primary fuel & secondary fuel 10.9 - - 10.9

1 month O&M 3.8 7.8 55.7 67.3

Two (2) months Receivables - - 691.2 691.2 Maintenance Spares (1% of GFA escalated at 6% per annum) 8.7 9.6 18.6 36.9

Total WC Requirement 23.5 17.4 765.4 806.3

Interest Rate (SBI PLR as on Apr’11) 13% 13% 13% 13%

Interest on Working Capital 3.1 2.3 99.5 104.82

Table 81: Approved revised estimate of interest on working capital for FY 2011-12 (RE) (Rs. Cr.)

Particular

FY 2011-12 (Approved in

Tariff Order of FY 2011-12)

FY 2011-12 (RE) (Projected by

BSEB in revised estimate )

Now approved for FY 2011-12

(RE)

2 month primary fuel & secondary fuel 13.41 93 10.9

1 month O&M 78.75 82 67.3

Receivables 535.43 1,042 691.2

Maintenance Spares 33.42 38 36.9

Total WC Requirement 661.01 1,256 806.3

Interest Rate (SBI PLR as on Apr’11) 13% 13.00% 13%

Interest on Working Capital 85.93 163.31 104.82



5.11.5 The revised estimate of interest on working capital for FY 2011-12 (RE) approved by

the Commission is subject to true-up, as and when the audited accounts of the Board

will be submitted by the Petitioner for FY 2011-12.



5.12.1 BSEB has projected non-tariff income of Rs. 48.54 Cr. for FY 2011-12. BSEB has

mainly considered 3 year CAGR to project non-tariff income for FY 2011-12 based on

the actual non-tariff income of FY 2010-11.

5.12.2 BSEB has also requested the Commission not to consider any income from DPS as

it is a source for funding increased working capital requirement and also requested

the Commission not to consider income from interest on un-utilized funds while

determining ARR for FY 2011-12.

5.12.3 The detailed break-up of non-tariff income claimed by the Petitioner is as below:

Table 82: Break-up of proposed non-tariff income fo r FY 2011-12 (RE) (Rs. Cr.)

Sl. Particulars FY 2011-12 (Approved) FY 2011-12 (RE)

1 Meter/Service rent 25.00 22.38

2 Late payment surcharge 38.24 -

3 Theft / pilferage of energy 10.00 -

4 Misc. receipts 2.79 4.07

5 Misc. charges (except PLEC) 10.55 16.32

6 Wheeling charges - -

7 Interest on staff loans & advance 0.01 0.05

8 Income from trading 1.02 1.05

9 Income from welfare activities - -

10 Rental Tender Registration - -

11 Interest of Bank Deposit 53.48 -

12 Rebate & discount received 26.06 3.06

13 Incentive for timely payment against loan to PFC 1.08 0.44

15 Incentive for timely payment against loan to PFC - 1.16

17 Total Income 168.23 48.54

18 Add Prior period income - -

19 Total Non-tariff income 168.23 48.54


5.12.4 The Commission agrees with the methodology adopted by BSEB to compute non-

tariff income. At the same time, the Commission feels that it is necessary to adjust



some components of non-tariff income based on recent developments in the sector

which do appropriately reflect the past trend. Also, the Commission has allocated

entire non-tariff income to the distribution function on BSEB.

5.12.5 The Commission has approved the meter rent, Interest on Staff Loan & Advance,

and Misc. charges from consumers for FY 2011-12 based on the three (3) years

CAGR based on actual value for FY 2010-11. The Commission has considered the

Interest of bank Deposit as per approved value of Tariff Order for FY 2011-12. For

other components of Non-tariff income, the Commission has considered the actual

value of FY 2010-11 as per annual accounts.

5.12.6 The Commission has adopted the approach for DPS as a part of Non-tariff income in

line with the recent judgement of Hon’ble Appellate Tribunal for Electricity (APTEL)

dt. 12.07.2011 in Case no 142 & 147 of 2009.

















5.12.8 The Commission has computed DPS of Rs. 27.38 Cr.for FY 2011-12 based on the

three (3) years CAGR applied on the actual value for FY 2010-11. As the Petitioner

charges DPS @ 18% per annum (1.5% per month), the principal amount on which

DPS would be charged comes as Rs.152.14 Cr.



5.12.9 As prevailing SBI PLR as on April 1, 2011 was 13%, the Commission has allowed the

financing cost for DPS @ 13%. The financing cost approved by the Commission is

shown below:

Table 83: Funding of DPS (Rs. Cr.) Particular FY 2011-12

DPS as per projections (@ 1.5% per month) (A) 27.38


Interest Rate for funding of Principal of DPS 13.00%







APRDRP Scheme.




petitions, in the absence of which the Commission shall be constrained to consider

100% DPS as non-tariff income for the purpose of calculation of the ARR.

5.12.12 The Commission has computed the amount of Non-Tariff Income as summarised

below:

Table 84: Approved revised estimate of Non-Tariff I ncome FY 2011-12 (RE) (Rs. Cr.)

Particular

FY 2011-12 (Approved in Tariff Order of FY 2011-

12)

FY 2011-12 (RE)

(Projected by BSEB in revised

estimate )

Now approved

for FY 2011-12

(RE)

Meter/Service rent 25 22.38 21.94

Late payment surcharge (DPS) 38.24 - 27.38

Theft / pilferage of energy 10 -

Misc. receipts 2.79 4.07 18.62

Misc. charges (except PLEC) 10.55 16.32 -

Wheeling charges - - -

Interest on staff loans & advance 0.01 0.05 0.04

Income from trading 1.02 1.05 1.05

Income from welfare activities - - -



Particular

FY 2011-12 (Approved in Tariff Order of FY 2011-

12)

FY 2011-12 (RE)

(Projected by BSEB in revised

estimate )

Now approved

for FY 2011-12

(RE)

Rental Tender Registration - -

Interest of Bank Deposit 53.48 - 53.48

Rebate & discount received 26.06 3.06 17.93

Incentive for timely payment against loan to PFC 1.08 0.45 0.45

Incentive for timely payment of power purchase bills - 1.16 1.16

Total Non-Tariff Income 168.23 48.54 142.05

Less: Financing cost of Principal amount of D.P.S. - - 19.78

Net Non-Tariff Income - - 122.28

5.12.13 The revised estimate of Non-tariff income for FY 2011-12 (RE) approved by the

Commission is subject to true-up, as and when the audited accounts of the Board will

be submitted by the Petitioner for FY 2011-12.

5.13 Return on Equity


5.13.1 BSEB has submitted that its asset are funded through loans and grants from the

Government of Bihar, loans and grants under specialized funding schemes of the

Government of India and loans from commercial lending organizations.

5.13.2 BSEB has also submitted that the in states like Jharkhand, Punjab, Chhattisgarh and

Kerala, where integrated Boards like BSEB were / are operational, the appropriate

Commissions have allowed / allow for a reasonable return on equity despite the fact

they have capital structure which is very much similar to that of BSEB and are mainly

funded through loans/ grants from respective State Governments.

5.13.3 BSEB has requested for the reasonable return of 14% on normative equity of 30% of

the Gross Fixed Assets (net off capital grants/ subsidies) in the ARR for the year

2011-12 of Rs. 231 Cr.


5.13.4 Return is admissible only on equity actually deployed for the creation of assets.

Since, BSEB has not been corporatized; it does not have any equity. The

Commission has considered entire assets base funded through loan and accordingly

interest has been allowed. Therefore, no return is payable on notional equity.



5.14 Revenue from Sale of Power at Existing Tariff for FY 2011-12

BSEB’s Submission

5.14.1 The Petitioner in its tariff petition for FY 2012-13 has only submitted the revised

estimates of the expenses for FY 2011-12 but has not given any details of the

revenue from sources such as revenue from sales of power, revenue from additional

sales as well as revenue billed through FPPCA. On the query of the Commission,

BSEB in the additional information submitted vide letter no. Com/ tar-132/ 2011-375

dated 1st March 2012 informed the Commission that the actual data for the period of

April, 2011 to November, 2011 is not available as annual accounts are not yet

finalized.


5.14.2 In the absence of desired information, the Commission has computed the revenue

based on revised sales and approved category-wise average realisation rate for FY

2011-12.

Table 85: Approved revised estimate of revenue thro ugh sale of power for FY 2011-12 (RE)

Category


Revenue as per Tariff Order)

(Rs. Cr.)

Approved by Commission in revised estimate for FY 2011-12 (RE)

Energy Sale (MU)

Average Realisation (Rs./Unit)

Revenue (Rs. Cr.)

Kutir Jyoti (Rural) 39.92 323 2.37 76.65

Kutir Jyoti (Urban) 0.40 1 1.8 0.23

DS‐I (Rural) 104.07 925 1.88 173.87

DS‐II -

Single phase 364.35 1,201 3.34 401.26

Three phase 26.07 16 3.45 5.54

NDS‐I (Rural) 4.29 21 2.5 5.15

NDS‐II (Urban)

Single phase 206.28 317 6.69 211.83

Three phase 129.63 190 7.1 134.88

NDS‐III 2.02 16 3.66 5.76

LTIS‐I 100.65 162 5.51 89.31

LTIS‐II 38.80 104 6.12 63.91

Public Water Works 50.50 60 4.22 25.48

IAS‐I (Private) 28.54 272 1.3 35.31

IAS‐II (Government) 26.95 167 2.44 40.75

Street Light‐I (Metered) 1.32 6 4.03 2.26



Category


Revenue as per Tariff Order)

(Rs. Cr.)

Approved by Commission in revised estimate for FY 2011-12 (RE)

Energy Sale (MU)

Average Realisation (Rs./Unit)

Revenue (Rs. Cr.)

Street Light‐II (Unmetered) 8.63 28 3.45 9.51

HTSS‐I 454.96 799 5.59 446.40

HTSS‐II 135.62 351 5.37 188.71

HTSS‐III 49.60 125 5.15 64.61

HTSS 308.22 277 3.77 104.38

RTS‐I 239.51 567 5.29 299.88

Grand Total 2319.95 5,928 2,386

5.14.3 The Commission has approved the revenue at existing tariffs as per the revised

estimate of approved sales and the approved average realisation for FY 2011-12.

The revenue at existing tariff is computed at Rs 2,386 Cr.

5.15 Revenue from sale to Nepal & UI

BSEB’s Submission

5.15.1 BSEB has sold 555 MU of energy to Nepal at rate of Rs. 4.66 per kWh in FY 2010-

11. BSEB projected the same trend to continue for FY 2011-12. BSEB has projected

revenue from sale of power to NEA for FY 2011-12 at Rs. 258.63 Cr..

5.15.2 BSEB has projected that sale under UI for the FY 2011-12 will be same as that of FY

2010-11. BSEB has projected its revenue from sale of power under UI assuming

average price of Rs. 3.09 per unit equal to the rate for FY 2010-11. Revenue from

sale of power under UI for FY 2011-12 is projected at Rs. 90.54 Cr..


5.15.3 The Commission approves the projected sales to Nepal at 555 MU, as it is obligatory

to supply power to Nepal and accordingly approves projected revenue from sale of

power to NEA for FY 2011-12 at Rs. 258.63 Cr.

5.15.4 The Board has projected the energy sales of 293 MUs under un-scheduled

interchange (UI)] for the FY 2011-12. The Commission is of the view that, as per the

energy balance the Board is left with additional power to the extent of 2200 MUs.

BSEB has submitted that, the BSEB shall supply 171 MUs additional power to towns

where premium tariff is proposed, industrial categories on LT line, urban areas, PWW

and Street Lights. Accordingly, the Commission approves 171 MUs for sale under UI



as prima facia it seems that it will not impact the supply hour of existing and

proposed consumer base of BSEB. Accordingly, the Commission approves the

proposed sale under UI for the FY 2011-12 @ Rs. 3.49 per unit, which is the average

cost of power purchase for an amount of Rs. 102.36 Cr.

5.16 Revenue from sale of Additional Power

BSEB’s Submission

5.16.1 The Petitioner has not projected any revenue from sale of additional power in FY

2011-12.


5.16.2 BSEB has projected energy balance at the projected T&D loss level of 42%. The

Commission has already given T&D loss target of 29% to BSEB for the FY 2011-12

in its Tariff Order for FY 2011-12 dated 1st June, 2011. For FY 2011-12 (RE), the

Commission has worked out energy balance based on T&D loss level of 29% as

against 42% projected by BSEB. Also, in the energy balance, BSEB is proposing

availability of 171 MUs of additional power in BSEB system for sale. The Board has

proposed to sell this additional power @ Average Energy realisaiton rate of LT

consumers (excluding KJ and agriculture). Considering the supply shortage situation

in the State, the Commission is of the opinion that BSEB can sell higher amount of

energy and to that extent it can bill higher revenue.

Table 86: Additional Revenue for the FY 2011-12 (RE )

Particular Unit FY 2011-12 Approved by Commission

Energy available for sale to Consumers MU 171

Average Energy realisaiton rate (excluding KJ & agriculture) Rs./Unit 3.17

Additional revenue at existing tariff Rs. Cr. 54.23

5.17 Disincentive for non-achievement of T&D loss r eduction Targets

5.17.1 The difference in the actual power purchase and the power purchase requirement

approved by the Commission is disallowed at the average power purchase rate and

is treated as ‘Disincentive for non-achievement of T&D loss targets’.

5.17.2 As per the trajectory, the T&D loss reduction target for FY 2011-12 was set at 29%

which the Petitioner has not achieved as per the review petition of BSEB.

Accordingly, the Commission has computed the disincentive for non-achievement of



T&D loss reduction targets at Rs. 841.70 Cr. for FY 2011-12, subject to true-up, as

and when the audited accounts of the Board will be submitted by the Petitioner for FY

2011-12.

Table 87: Disincentive for non-achievement of T&D l oss reduction target for FY 2009-10

Particular Units FY 2011-12

Net Power Purchase Dis-allowed MUs 2,210.05

Disallowed units of NVVNL MUs 1,303.56

Disallowed power purchased cost of NVVNL @ 4.09 per unit Rs./ kWh 4.09

Cost of Power Purchase Dis-allowed (NVVNL) Rs. Cr. 532.56

Balance units of disallowed power MUs 906.49

Average Power purchase cost except NVVNL MUs 3.41

Cost of power purchase dis-allowed (other sources) Rs. Cr. 309.14

Total dis-allowed power purchase cost Rs. Cr. 841.70

5.18 Resource gap funding received from State Gover nment for FY 2011-12

5.18.1 In response to Commission’s query vide letter No. BERC- Tariff-24/ 11-244 dated

15th March 2012 regarding resource gap funding support from State Govt. for FY

2011-12 the BSEB vide letter No Com/ tariff-161/ 2011 (part) – 444 dated 16th March

2012 informed the Commission that the projected resource gap funding support for

FY 2011-12 from State Government is Rs. 1800 Cr.

5.18.2 The details of month-wise resource gap funding received from State Government

during FY 2011-12 till February, 2012 as submitted by BSEB is as below:

Table 88: Details of Resource gap funding from Stat e Government (Rs. Cr.)

Sl. Particular Resource Gap

Compensation against financial loss due to

procurement of additional power

Total

2 April, 2011 90.00 - 90.00

3 May, 2011 90.00 - 90.00

4 June, 2011 90.00 - 90.00

5 July, 2011 90.00 - 90.00

6 August,2011 180.00 - 180.00

7 September, 2011 180.00 130.00 310.00 8 October, 2011 180.00 - 180.00

9 November, 2011 180.00 - 180.00 10 December, 2011 180.00 380.00 560.00 11 January, 2011 180.00 - 180.00



Sl. Particular Resource Gap

Compensation against financial loss due to

procurement of additional power

Total

11 February, 2011 180.00 - 180.75

14 March, 2011 (Expected) 180.00 - -

15 Total 1800.00 510 2310

5.18.3 The BSEB in additional information has submitted that it has received resource gap

assistance amounting to Rs. 1800 Cr. and Rs. 510 Cr. as compensation against

financial loss due to procurement of additional power by the State Government. Out

of 2310 Cr.; Rs 1080 is treated as resource gap grant for reducing ARR gap as

approved in the Tariff Order for FY 2011-12. Rs. 841.70 Cr. of the State Government

grant is adjusted against the financial loss caused to BSEB due to higher T&D loss

than the T&D loss approved by Commission. The balance amount of Rs. 388.30 ( =

2300 – 1080 – 841.70) out of the total State Government grant is the additional

revenue available with BSEB which is shown as receipt in the ARR. The amount of

Rs. 841.70 Cr. against financial loss to BSEB includes all kinds of losses to BSEB

such as additional power purchse, Non-achievement of T&D loss trajectory set bt the

Commission, loss on account of power purchase from NVVNL.

Table 89: details of State Government revenue gap s upport (Rs. Cr.)

Particular Amount (Rs. Cr.)

Resource gap from State Government 1,800.00

Compensation against financial loss due to procurement of additional power 510.00

Total Resource gap funding spport fro State Government for FY 2011-12 2,310.00 Less: Resource gap grant for reducing ARR gap as per Tariff Order for FY 2011-12

1,080.00

Less: Dis-allowed power purchase cost on account of high T&D losses w.r.t. BERC target

841.70

Resource gap available with BSEB 388.30

5.19 Aggregate Revenue Requirement of BSEB for FY 2 011-12

5.19.1 The table below summarises the revised estimate of ARR approved by the

Commission for FY 2011-12 subject to final true-up as and when the audited

accounts of the Board will be submitted by the Petitioner for FY 2011-12:



Table 90: Aggregate Revenue Requirement for the FY 2011-12

Sl. Particular


in tariff Order)

FY 2011-12

(Revised Estimate)

Now approved

for FY 2011-12

(RE) 1 Power Purchase Cost 3,328.00 4,162.94 4,156.89

2 Fuel 80 93.48 72.04

3 R&M Cost 95 100.62 100.62

4 Employee Cost 798 829.8 641.41

5 A&G Cost 52 53.49 70.72

6 Depreciation 117 154.21 108.42

7 Interest & Financial Charges 149 464.31 94.56

8 Interest on Working Capital 86 163.31 104.82

9 Return on Equity - 231.47 -

10 Total Revenue Requirement 4,705.00 6,253.63 5,349.47

11 Less: Non-Tariff Income 168 48.54 122.28

12 Less : Disallowable Power Purchase Cost - 754.26 841.70

13 Net Revenue Requirement 4,537.00 5,450.83 4,385.49

14 Less: Revenue from existing tariff 2,769.00 - 2,385.69

15 Less: Revenue from sale of power to Nepal 224 258.63 258.63

16 Less: Revenue from sale of power in UI - 90.54 102.36

17 Less: Revenue from sale of addl. Power 220 54.23 54.23

18 Less: Revenue through FPPCA - - 790.91 *

19 Gap 1,325.00 - 793.67

20 Less: Resource gap grant for reducing ARR as per T.O. for FY 2011-12

1,080.00 - 1,080.00

21 Less: Additional resource gap available with BSEB 388.30

22 Net Gap/ (Resource) 245.00 (674.63) * As per FPPCA order & provisional billing by BSEB against FPPCA for period from October’ 2009 to

December’ 2011

5.19.2 The Commission approves the net revenue surplus of Rs 674.6 Cr for FY 2011-12 in

revised estimate subject to final true-up as and when the audited accounts of the

Board will be submitted by the Petitioner for FY 2011-12. From the above table it can

be seen that after considering the resource gap assistance amounting to Rs. 1080

Cr. by the State Government, over and above the State Government support for

financial loss on account of non-achievement T&D loss target as set by the

Commission, the net revenue surplus approved by the Commission for FY 2011-12 is

Rs. 674.6 Cr. as against the regulatory assets created by the Commission in the

Tariff Order for FY 2011-12.



6 Analysis of Aggregate Revenue Requirement for FY 2012-13

6.1 Background

6.1.1 This chapter covers item-wise Petitioner’s submission and Commission’s analysis on

the ARR and tariff petition for FY 2012-13. To determine the ARR of the BSEB for FY

2012-13, the Commission has projected the power purchase requirement of the

Petitioner on estimated category wise sales based on past trends and taking into

account the normative distribution losses fixed for FY 2012-13 by the Commission.

The power purchase cost of the Petitioner for FY 2012-13 has been arrived at on the

basis of actual purchase cost from April, 2011 to January, 2011. The Commission

thereafter, analysed the other elements of ARR such as Depreciation, O&M

expenses, Interest and Finance Charges and Working Capital requirement etc. to

reflect the total ARR of the Petitioner for FY 2012-13. For this purpose, the

Commission has examined the original as well as subsequent submissions of the

Petitioner including audited accounts of FY 2010-11. The Petitioner‘s submissions

and Commission‘s approach towards determination of different elements of the ARR

is discussed in detail in the subsequent paras of this Chapter.

6.1.2 The Commission validated the information submitted by BSEB in its ARR and tariff

petition. The Commission held a Technical Validation Sessions (TVS) with the

Officers and Consultants of BSEB from 28th February, 2012 to 1st March, 2012.

During the validation session the Commission pointed out inconsistencies in data

related to energy sales. In the petition, BSEB did not explain the methodology for

break-up of category and sub-category wise sales into the different consumer sub-

categories. The Commission sought clarification in this regard, although the BSEB

could not explain the methodology during the Technical Validation Sessions (TVS).

6.2 Energy Sales




6.2.1 BSEB has used consumer category wise trend analysis Cummulative Annual Growth

Rate (CAGR) to estimate number of consumers, connected load and energy

consumption. This is based on the assumption that the historical trend would

continue into the future as well. However, BSEB has used different CAGR for

different consumer categories and also different CAGR for projecting number of

consumers, connected load and energy sales for a consumer category/subcategory.

6.2.2 The Board has not furnished the basis on which the category-wise Number of

consumers, connected load and sales for FY 2012-13 has been projected. The Board

has however furnished the actual energy sales for the period of FY 2005-06 to FY

2010-11 and estimated consumption for the FY 2012-13 in its ARR and tariff petition.

6.2.3 BSEB has submitted consumer category wise past energy sales, number of

consumers and connected load and their respective CAGR for different periods (five-

year, four-year, three-year, two-year and year-on-year) for projecting sales for FY

2012-13. However, the Board did not submit the energy sales information for

estimating sub-category wise revenue as per the existing tariff schedule. The

Commission expects improved information support from BSEB in this regard in future

tariff petitions. BSEB should improve its collection and analysis of information related

to metering, billing and collection.


6.2.4 The Commission has projected the energy sales for FY 2012-13 using the method

adopted by the Petitioner by applying compound annual growth rate (CAGR) for all

consumer categories after considering actual sales of FY 2010-11 as base value.

However, the Commission has also used the approved sales norms, trends of

specific consumption (for categories which have stable specific consumption and

follows current business environment) for projecting sales of the consumer

categories. The approach adopted by the Commission for different consumer

category has been elaborated in respective sections.

6.2.5 The Commission vide letter No BERC-Tariff-24/ 2011-244 dated 15th March, 2012

enquired about the basis of segregating number of consumers, connected load, and

unit sales in subcategory of DS1, DS2, NDS1, NDS2. The BSEB vide letter No Com/

Tariff-161/ 2011 (part)- 444 dated 16th March 2012 stated that the Board has shown

no. of consumers, connected load and unit sales in sub-categories of DS-I, DS-II,

NDS-I and NDS-II based on the revenue Statement – I received from field office on



the basis of consumer’s ledger. However, the Board has not made available the

same to the Commission for scrutiny and analysis.

6.2.6 Category-wise break up of past energy sales and CAGR for different periods (five-

year, four-year, three-year, two-year and year-on-year) as submitted by BSEB is

given below:

Table 91: Historical Trend in category-wise units s old (MUs) Consumer Category FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11

Kutir Jyoti 86.52 86.52 54.00 91.18 92.41 163.91

Domestic 1,217.37 1,363.93 1,645.98 1,677.53 1,872.32 1,969.25

Commercial 313.33 309.19 371.85 416.92 470.19 490.37

Public Lighting 19.86 25.18 23.90 22.69 26.99 33.17

IAS 887.48 709.14 659.12 776.72 794.01 388.60

PWW 178.24 163.90 150.98 160.93 143.49 60.39

Industrial L.T. 112.55 111.17 139.02 152.72 192.45 226.49

Industrial H.T. 673.51 762.08 964.14 1,275.40 1,475.09 1,500.63

Railway 358.76 383.92 384.80 399.81 444.82 457.95

Inter State 494.32 626.65 457.77 350.74 555.45 848.38

Total 4,341.94 4,541.68 4,851.56 5,324.64 6,067.22 6,139.14

Table 92: Category-wise growth rates of sales Consumer Category 1-Yr CAGR 2-Yr CAGR 3-Yr CAGR 4-Yr CAGR 5-Yr CAGR

Kutir Jyoti 77.4% 34.1% 44.8% 17.3% 13.6%

Domestic 5.2% 8.3% 6.2% 9.6% 10.1%

Commercial 4.3% 8.5% 9.7% 12.2% 9.4%

Public Lighting 22.9% 20.9% 11.5% 7.1% 10.8%

Irrigation & Agriculture -51.1% -29.3% -16.1% -14.0% -15.2%

Public Water Works -57.9% -38.7% -26.3% -22.1% -19.5%

Industrial L.T. 17.7% 21.8% 17.7% 19.5% 15.0%

Industrial H.T. 1.7% 8.5% 15.9% 18.5% 17.4%

Railway 3.0% 7.0% 6.0% 4.5% 5.0%

Inter State 52.7% 55.5% 22.8% 7.9% 11.4%

Total 1.2% 7.4% 8.2% 7.8% 7.2%

6.2.7 Category-wise break up of past data of no. of Consumers and CAGR for different

periods (five-year, four-year, three-year, two-year and year-on-year) as submitted by

BSEB is as given table below:

Table 93: Category-wise no. of consumers Consumer Category FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11

Kutir Jyoti 240,349 240,349 248,293 258,221 319,244 579,852



Consumer Category FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11

Domestic 1,038,658 1,386,639 1,513,675 1,671,636 1,797,404 1,938,023

Commercial 138,166 146,847 158,646 167,422 190,089 195,145

Public Lighting 342 379 341 359 379 306

IAS 57,581 57,581 55,762 51,442 59,121 54,709

PWW 647 689 762 818 768 923

Industrial L.T. 10,718 11,647 12,933 13,821 18,917 17,144

Industrial H.T. 667 699 763 870 929 915

Railway 13 13 15 15 15 15

Inter State 1 1 1 1 1 1

Total 1,487,142 1,844,844 1,991,191 2,164,605 2,386,867 2,787,033

Table 94: Category-wise growth rates of no. of Cons umers

Consumer Category 1-Yr CAGR 2-Yr CAGR 3-Yr CAGR 4-Yr CAGR 5-Yr CAGR

Kutir Jyoti 81.6% 49.9% 32.7% 24.6% 19.3%

Domestic 7.8% 7.7% 8.6% 8.7% 13.3%

Commercial 2.7% 8.0% 7.1% 7.4% 7.1%

Public Lighting -19.3% -7.7% -3.5% -5.2% -2.2%

Irrigation & Agriculture -7.5% 3.1% -0.6% -1.3% -1.0%

Public Water Works 20.2% 6.2% 6.6% 7.6% 7.4%

Industrial L.T. -9.4% 11.4% 9.9% 10.1% 9.8%

Industrial H.T. -1.5% 2.6% 6.2% 7.0% 6.5%

Railway 0.0% 0.0% 0.0% 3.6% 2.9%

Inter State 0.0% 0.0% 0.0% 0.0% 0.0%

Total 16.8% 13.5% 11.9% 10.9% 13.4%

6.2.8 Category-wise break up of past data of connected load and CAGR for different

periods (five-year, four-year, three-year, two-year and year-on-year) as submitted by

BSEB is as given below:

Table 95: Category-wise connected load Consumer Category FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11

Kutir Jyoti 14,507 14,507 15,003 14,807 19,416 34,934

Domestic 1,411,332 1,411,332 1,526,959 1,729,924 1,996,915 2,228,984

Commercial 238,543 238,543 270,641 305,971 373,932 434,253

Public Lighting 5,840 5,840 4,990 4,202 4,586 5,636

IAS 247,003 247,003 229,933 206,475 209,719 215,234

PWW 18,726 18,726 19,862 21,385 17,093 18,741

Industrial L.T. 115,059 115,059 126,276 134,812 162,297 176,872

Industrial H.T. 251,991 251,991 288,460 317,336 333,413 348,353

Railway 99,000 99,000 102,150 103,000 102,150 102,150

Total 2,402,001 2,402,001 2,584,274 2,837,912 3,219,521 3,565,157



Table 96: Category ‐‐‐‐wise growth rates of connected load Consumer Category 1-Yr CAGR 2-Yr CAGR 3-Yr CAGR 4-Yr CAGR 5-Yr CAGR

Kutir Jyoti 79.9% 53.6% 32.5% 24.6% 19.2%

Domestic 11.6% 13.5% 13.4% 12.1% 9.6%

Commercial 16.1% 19.1% 17.1% 16.2% 12.7%

Public Lighting 22.9% 15.8% 4.1% -0.9% -0.7%

Irrigation & Agriculture 2.6% 2.1% -2.2% -3.4% -2.7%

Public Water Works 9.6% -6.4% -1.9% 0.0% 0.0%

Industrial L.T. 9.0% 14.5% 11.9% 11.3% 9.0%

Industrial H.T. 4.5% 4.8% 6.5% 8.4% 6.7%

Railway 0.0% -0.4% 0.0% 0.8% 0.6%

Total 10.7% 12.1% 11.3% 10.4% 8.2%

6.3 Consumption by Un-metered Categories

6.3.1 The Board in its ARR & tariff petition for FY 2012-13 has stated that the following

categories of consumers under BSEB are un-metered:

– Kutir Jyoti consumers in rural & urban areas

– Domestic consumers in rural areas

– Non‐domestic consumers in rural areas

– Street lights Consumers both in urban and rural areas

– Irrigation/ Agriculture pump sets (Private and State Government)

6.3.2 The Board in its ARR and tariff petition has computed the consumption of above un-

metered categories of consumers on the basis of the following norms:

– Kutir Jyoti (Rural): 18 Units per month per connection

– Kutir Jyoti (Urban): 30 Units per month per connection

– DS‐I: 80 Units per month per connection

– NDS‐I: 80 Units per month per connection

– IAS‐I (Private): 1485 Units per annum per KW

– IAS‐II (State): 225 Units per month per HP

– Street Light: Based on past trend

6.4 Kutir Jyoti (Rural and Urban)


6.4.1 BSEB in its tariff petition has submitted that in view of the increased power

availability to BSEB in the current year and in the ensuing year, BSEB has increased



the power supply hours to the rural areas of Bihar to all consumer categories.

Accordingly, the Kutir Jyoti consumers are being supplied power for increased

number of hours. For the purpose of projecting the energy sold to the Kutir Jyoti

unmetered category of consumers, BSEB has used normative consumption of 18

units per month per connection for unmetered rural areas and 30 units per month per

connection for metered rural area & metered urban area. The number of consumers

used for this projection is the average of the opening and closing number of

consumers for the year.

6.4.2 BSEB has also submitted that, as per the Commission direction, BSEB has

undertaken a sample study of consumption by Kutir Jyoti consumers. Based on this

sample study the average monthly consumption of Kutir Jyoti consumers is

determined to be 29.90 units per month. However, the average monthly consumption

of 29.90 units was arrived at by the Board based on the data of ten (10) consumers

of village Mahatbar under electric supply sub-division Biharsharif (Rural) and fifteen

(15) consumers of Central electric supply area Panta. Accordingly, BSEB prays to

the Commission to approve the considered consumption norm of 30 units per month

for Kutir Jyoti consumers for FY 2012-13. However, BSEB has submitted to consider

consumption norm of 18 units per consumer per month for projecting sales of Kutir

Jyoti (Rural - Unmetered).

6.4.3 BSEB has also submitted that in other states of the country the consumption norm for

rural and urban Kutir Jyoti is 30 units/ month. The table below reproduces the

submission made by BSEB in regard to consumption norms followed by other

boards/ distribution licensees.

Table 97: BPL consumption norms in other states

Sl. State Allowed units for BPL Consumers

1 Bihar (BSEB) 18 units for rural areas 30 units for urban areas.

2. Gujarat Benefit of concessional tariff given to the first 30 units consumed by BPL consumers. Above that normal DS tariff charged.

3 Madhya Pradesh

30 units per connection per month allowed irrespective of geographical location

4 Chhattisgarh

40% of total consumers in BPL assumed to have sales of 80 units per month and accordingly billed on other domestic rates. For all other consumers in BPL category 30 units per connection per month approved in Tariff Order for FY10.



Sl. State Allowed units for BPL Consumers

5 Tamil Nadu 26 units per connection per month allowed assuming 8 hours of supply per day for a connected load of 110W

6 Maharashtra 30 units per connection per month

7 Punjab Connected load of upto 1000 W allowed to BPL consumers Free electricity provided to BPL consumers upto the first 100 units

6.4.4 In view of the above, the Board has requested the Commission to consider the

consumption norm of 30 units per connection per month for both urban and rural

Kutir Jyoti consumers of the state.

6.4.5 BSEB has projected an addition of 8,86,499 consumers during FY 2011-12 &

12,96,104 consumers during FY 2012-13 in Kutir Jyoti metered category in the rural

areas. The sale to the Kutir Jyoti metered consumers in the rural areas has been

projected based on consumption norm of 30 units per connection per month and

average number of consumers in this tariff category.

6.4.6 Accordingly, the sales for Kutir Jyoti consumers have been projected at 324.70 MU

for FY 2011-12 as against approved level of 263 MU. For FY 2012-13, BSEB has

projected sale of 717.57 MU for Kutir Jyoti category.


6.4.7 The Commission is of the view that as the Kutir Jyoti services in rural and urban

areas are allowed at connected load of 60 watt and 100 watt respectively, with

restricted hours of supply, it would be difficult to consume 30 units with 60 watt

connected load in rural areas. In view of the same, the Commission has approved

the consumption norm of 18 units/ service/ month in rural areas and 30 units/ service/

month in urban areas in the Tariff Order for FY 2010-11.

6.4.8 In the Tariff Order issued by the Commission on 1st June, 2011 for FY 2011-12 the

Commission has stated that,

“The comparison drawn with other states has to be viewed in the context that the all

India per capita consumption is 774 units as against 107 units in Bihar. In view of the

above observations, the Commission finds no reason to revisit its stated position on

consumption norm for this consumer category. The Commission shall continue to use



consumption norm of 18 Units/month for unmetered rural and 30 Units/month for

unmetered urban Kutir Jyoti consumers. The Commission would like to emphasis

once again that if BSEB desires Commission to revisit the norms for unmetered

categories it has to provide sufficiently credible evidence and at the same time meter

such unmetered consumers.”

6.4.9 Further the tariff schedule provides the flexibility for billing at DS-I tariff rates by

BSEB to consumers found using load more than that provided for Kutir Jyoti

connections. The Commission cannot condone BSEB for its inability to implement

this provision of the tariff schedule. The Commission is of the opinion that the

consumption norm of 29.90 units per consumer per month which has been arrived at

based on survey of twenty-five (25) consumers can not be representative of the

consumption of entire Kutir Jyoti consumer base of BSEB. In spite of a standing

direction and repeated reminders of the Commission to submit concrete evidences in

the form of field data/studies in this regard, BSEB till date has failed to provide any

such study/data.

6.4.10 The Commission has also taken into consideration the verification report submitted

by the consultant appointed by the Commission for the purpose, which has also

substantiated consumption pattern of 18 units per month for Kutir Jyoti rural

consumers. Above all, although the Kutir Jyoti consumers in urban areas are

metered, the Board has not furnished the consumption based on meter readings.

Hence the consumption for this category is assessed 30 units / month / service.

Further, BSEB vide letter no. Com/Tar/161/2011-260 dated 9th February, 2012 has

submitted that

“BSEB is in stabilisation phase in terms of release of Kutir Jyoti Connections and its

billing. For projection, 30 units have been considered for KJ metered (rural & urban)

consumers. Actual sales will be taken into account at the time of truing up process.”

6.4.11 On the matter of sales to unmetered Kutir Jyoti Consumers BSEB vide letter no.

Com/Tar/161/2011-260 dated 9th February, 2012 submitted that BSEB proposes no

increase in no. of unmetered consumers as only metered connections are released

by BSEB. BSEB is in the process of installation of meters to all its unmetered

consumers in phased manner and intends to complete the process by March, 2013.

At the same time, it is not possible to assess category-wise metering by BSEB. For

projection of tariff based on the tariff schedule, it is desirable that the existing status

is considered and at the time of true-up based on the actual scenario revenue is



considered. BSEB has also submitted that as per Tariff Schedule of Tariff Order, only

Kutir Jyoti Urban (meter) category exists and hence all consumers are considered as

metered while calculating revenue from sale of power.

6.4.12 The number of consumers as projected by the BSEB is accepted as large numbers

of villages are being electrified and BPL households are connected under RGGVY.

6.4.13 As per BSEB submission with regard to the process of installation of meters to all its

unmetered consumers in phased manner and its intention to complete the process by

March, 2013, the Commission has approved Kutir Jyoti consumption based on the

norms approved for FY 2011-12. As all the connections under Kutir Jyoti are

expected to be metered by March, 2013, there will not be unmetered consumer.

Table 98: Approved Kutir Jyoti Consumption for FY 2 012-13

Details No. of consumers Norm Adopted/ month Consumption for 2012 -13 (MUs)

Rural (un-metered) 302914 18 unit

32.71

Rural (metered) 2455970 423.23

Urban (metered) 3571 30 unit 1.46

Total 2762455 457.40

6.4.14 The Commission approves 18 units/ service/ month in rural areas and 30 units/

service/ month in urban areas. Based on this norm the Commission approves

457.40 MUs to Kutir Jyoti (rural and urban) for FY 2012-13 as detailed above

against projected sale of 717.57 MUs by BSEB.

6.5 Domestic - I (Rural) (DS-I)


6.5.1 BSEB in its petition has submitted that it has witnessed a near double digit growth in

the last few years in the units sold to this category and it expects the same trend to

continue in future years as well. The number of consumers in the Domestic category

has witnessed a five years CAGR of 13.3% between FY 2005-06 and FY 2010-11.

BSEB expects that this trend will continue in future also. For DS-I Category, BSEB

has projected the number of consumers for FY 2012-13 based on the 5 years CAGR

of 13.3% at 1159387 consumers.

6.5.2 For the FY 2011-12, BSEB has proposed revised sales estimate for this category at

924.86 MU as against 886 MU approved by the Commission. As per the



consumption norms of 80 units per month per consumer, the sales for FY 2012-13

have been projected at 1047.74 MU.


6.5.3 The Commission after analysing the data for DS-I category for FY 2010-11 is of the

opinion that specific consumption of DS-I consumer category is relatively stable. For

domestic category consumers, 5 years CAGR would be more appropriate trend for

projecting no. of consumers and connected load for FY 2012-13.

6.5.4 The Commission, in-line with the approach used in its past Tariff Order, has

considered the specific consumption of 80 units / connection / month, which has

been adopted by the Board for this category. Accordingly, the Commission

considering FY 2010-11 as the base year, CAGR of 5 year and the consumption

norm of 80 units/ connection/ month, approves energy sale for FY 2012-13.

6.5.5 The Commission approves sale of 1047.74 MUs for the DS-I category of

consumers for FY 2012-13 as proposed by BSEB. Howev er the Commission

again directs BSEB to completely meter this consume r category by FY 2012-13.

6.6 Domestic Metered (Urban) - DS-II


6.6.1 BSEB has projected the number of consumers, connected load and energy sales for

DS-II category for FY 2011-12 & FY 2012-13 at the 5 years CAGR of 13.3%, 9.6% &

10.1% respectively taking FY 2010-11 as the base year. For the FY 2011-12 BSEB

revises the sales estimates for this category at 1217.44 MU as against 1424 MU

approved by the Commission. For FY 2012-13, BSEB has projected sale of 1340.37

MU.


6.6.2 On scrutiny of the Schedule -3 of the Annual accounts of FY 2010-11 it was observed

that the specific consumption of Domestic-II category of consumers during FY 2010-

11 was 92.42 kWh computed on the basis of average number of consumers during

FY 2010-11. However, the BSEB in its tariff petition for FY 2012-13 has projected the

specific consumption of 89.36 kWh computed on the basis of average number of

consumers during FY 2012-13. The Commission from the past petitions of the BSEB



has also observed that the specific consumption over the years has gone up. Since

the consumers are in urban areas where the quality of supply is said to have been

improved, the projected specific consumption below the current level as proposed by

the BSEB doesn’t seems proper.

6.6.3 The BSEB in its petition has also stated that, BSEB is purchasing power through

short/medium term agreement from NVVNL and will provide this power to categories

where hours of power supply is on lower side and to towns where premium tariff is

proposed.

6.6.4 In light of the above facts, the Commission while approving the sales has considered

the specific consumption of 95 kWh for DS-II category. Further, the Commission feels

that the five (5) year CAGR on the base year of FY 2010-11 is more appropriate for

projecting no. of consumer as well as connected load to this consumer category.

Accordingly, the Commission approves the consumption of 1425.9 M Us for

Domestic-II (DS-II) category for the FY 2012-13 aga inst 1340.37 MUs as

projected by BSEB.

6.7 Domestic - DS-III


6.7.1 BSEB has projected the energy sales at the 5 years CAGR of 13.3 %. BSEB revised

the sale estimates for this category at 0.90 MU for FY 2011-12 and 0.99 MU

projecting for FY 2012-13.


6.7.2 The Commission feels that the 5 year CAGR on the base year of 2010-11 is

appropriate for projecting energy sales, no. of consumer as well as connected load to

this consumer category.

6.7.3 The Commission, therefore, approves the consumption of 0.99 MU by DS-III

category for the FY 2012-13.

6.8 Non-Domestic-I – Rural (NDS-I)




6.8.1 The BSEB has submitted that the Non-Domestic-I (Commercial) tariff category is

applicable to unmetered commercial consumers in the rural areas. The number of

consumers and connected load for this consumer category for FY 2012-13 has been

projected at 3 years CAGR of 7.1% & 17.1% respectively.

6.8.2 BSEB in its ARR and tariff petition for FY 2012-13 has revised the sales estimates for

this category to 20.61 MU for FY 2011-12 as against 29 MU as approved by the

Commission. Based on the consumption norm of 80 units per month per consumer,

the sale for this category for FY 2012-13 has been projected at 22.08 MU.


6.8.3 The Commission is of the opinion that the consumption of commercial category is

closely linked to current business environment. Therefore the Commission considers

it reasonable to compute No. of consumers and connected load on the basis of three

(3) year CAGR with FY 2010-11 as base year for this consumer category.

6.8.4 Further, as per BSEB submission with regard to the process of installation of meters

to all its unmetered consumers in phased manner and intends to complete the

process by March, 2013, the Commission has approved consumption based on the

same.

6.8.5 The Commission accordingly approves energy consumpt ion of 22.08 MU by

NDS-I consumer category for the FY 2012-13, as projected by the BSEB in-li ne

with the approach used by the Commission in tariff Order for FY 2011-12.

6.9 Non-Domestic-II – Urban (NDS-II)


6.9.1 BSEB has projected the number of consumers, connected load and energy sales at

three (3) years CAGR. Further, BSEB has revised its energy sales estimates to

506.61 MU for FY 2011-12 as against 575 MU as approved by the Commission. The

sale for FY 2012-13 is projected at a three (3) years CAGR of 9.7% at 555.56 MU.


6.9.2 The Commission while analysing the past trends considered four (4) year CAGR

more appropriate for projecting sales for FY2011-12. The Commission is of the

opinion that the socio economy in the State is improving over the last few years



which will have positive impact on the overall growth of Non-domestic category.

There is an increasing trend of the specific consumption during the past five (5)

years. In view of this, the growth of number of consumers, connected load and

energy sales at four (4) years CAGR seems reasonable.

6.9.3 For reasons stated the Commission approves the ener gy consumption of 581.8

MUs for NDS-II category for the FY 2012-13, against 555.56 MUs as projected by

BSEB.

6.10 Non-Domestic –III (Religious Places) NDS-III


6.10.1 BSEB has projected the number of consumers, connected load and energy sales for

NDS-III based on 3 years CAGR. The energy sale for FY 2012-13 has been

projected at 17.27 MU.


6.10.2 The Commission considers four (4) year CAGR for projecting sales, no. of

consumers and connected load for FY2012-13.

The Commission, therefore, approves the consumption of 18.08 MUs in the

Non-Domestic – III category for the FY 2012-13 .

6.11 Industrial LTIS-I & II


6.11.1 BSEB has projected energy sales, connected load, number of consumers based on

three (3) years CAGR between FY 2007-08 and FY 2010-11 for industrial LT – I & II

category. Thus no. of consumer, connected load and energy sales has been

projected at 19317, 134666 kW and 190.72 MU for LTIS-I category and consumer,

connected load and energy sales has been projected at 1371, 86753 kW and 122.87

MU for LTIS-II category.


6.11.2 The CAGR for the 3-year period is about 17.7% whereas growth considered by the

Commission for projecting the sales of FY 2012-13 is four (4) year CAGR which is

about 19.5%. Since there is scope for increasing the industrial production, it is not



proposed to curtail the consumption of this category as the industry is picking up after

the recession and there is scope for industrialization, particularly, with improvement

in availability of power.

The Commission approves the consumption of 196.6 MU s and 126.6 MUs for

LT IS-I and LTIS – II industry respectively for the FY 2012-13 as proposed by

Board.

6.12 Street Lighting (Public Lighting) SS-I, SS-II


6.12.1 BSEB in the ARR and tariff petition has submitted that the SS category has shown

negative growth rate during the last 5 years. Accordingly, considering the improved

power availability in the state, energy sales, connected load and number of

consumers for all sub categories under street Lighting has been proposed at the

previous year level. Thus the energy sale for the SS-I, SS-II & SS-III categories has

been projected at 5.61 MU, 26.20 MU & 1.36 MU respectively.


6.12.2 The Commission while analysing data found that the No. of consumers in FY 2010-

11 has decreased w.r.t. FY 2009-10 whereas the load and sales has increased

during the same period. In this regard the Commission has enquired about the same

from the BSEB vide Commission’s letter No BERC-Tariff-24/ 2011-244 dated 15th

March, 2012. BSEB in response stated vide letter No. Com/ Tariff-161/ 2011 (part)-

444 dated 16th March 2012 that the reason for decrease in no. of Consumers under

“Public Lighting” during FY 2010-11 is also being looked into and the Commission will

be informed accordingly.

6.12.3 The Commission does not appreciate the inability of BSEB to justify their trend of no.

of consumers, connected load and sales. The Commission has also observed an

abrupt increase in specific consumption during FY 2010-11 as per the records of

audited annual accounts of the Board. This abnormal trend indicates the possibility of

either more energy than that consumed is getting booked or the reported connected

consumers is lower than the actual resulting in loss of fixed charges. The

Commission again directs BSEB to investigate the reasons for such abnormal trend

and report the same to the Commission within three months of issue of this order.



6.12.4 The Commission is of the opinion that since a number of villages are being electrified

under RGGVY and other electric infrastructure are being created, streetlights would

be provided in all such case. Accordingly, the Commission approve growth in No. of

Consumer, connected load and sales at a reasonable rate of 4% which is three (3)

year CAGR of load growth.

6.12.5 The Commission approves the energy consumption of 6 .98 MUs and 34.29 MUs

for SS-I and SS-II category respectively under Publ ic Lights (Street lights) for

the FY 2012-13.

6.13 Irrigation and Agriculture Service (IAS-I & II )


6.13.1 BSEB has projected energy consumption by irrigation and agricultural services at

271.63 MU for IAS-I category considering the consumption norm of 1485 units per

kW per annum, and 317.05 MUs for IAS-II category considering the consumption

norm of 225 units per HP per month for the FY 2012-13.

6.13.2 The BSEB has submitted that during past years the number of consumers has shown

positive growth whereas connected load showed negative growth, whereas in the

recent past, the number of consumers has shown a declining trend. Accordingly,

BSEB has projected no change in the number of consumers and the connected load

over FY2010-11 for FY 2012-13.

6.13.3 For IAS-II sub category, BSEB is expected to add 2764 tube wells having connected

load of 20 kW each to its network in the month of December of FY 2011-12.

6.13.4 The Commission as additional information vide Commission’s letter No BERC-Tariff-

24/ 2011-244 dated 15th March, 2012 enquired about the reason of decrease in No.

of consumers and sales while load has been increasing during FY 2010-11. The

BSEB vide letter No Com/ Tariff-161/ 2011 (part)- 444 dated 16th March 2012

informed the Commission that the reduction in unit sold under the Category “Irrigation

and Agriculture” during FY 2010-11 is mainly due to implementation of revised norms

of consumption (1485 units/ kWh/ annum) fixed by Commission in comparison to

earlier norms of consumption (2000 units/ kWh/ annum) and also non-accountal of

consumption by 20% disconnected consumers which was allowed by the

Commission in their earlier Tariff Order for FY 2006-07 (para 6.3.5) assuming that a

number of disconnected service might be using electricity and it may be difficult to



effectively check these unauthorised connections in view of pump-sets spread out in

large area and due to lack of adequate machinery.


6.13.5 The Commission has taken into consideration the verification report submitted by the

third party independent consultant which has substantiated consumption pattern of

1485 units /kW/annum for agriculture consumers in absence of accurate metering.

6.13.6 For State tube wells, the Commission approves a consumption norm of 225 units/ HP

per month as approved in the Tariff Order for FY 2011-12.

6.13.7 Further, as per BSEB submission with regard to the process of installation of meters

to all its unmetered consumers in phased manner and intends to complete the

process by March, 2013, the Commission has approved consumption assuming that

all the unmetered consumers under IAS-I and II category would be converted into

metered connection.

6.13.8 Accordingly, The Commission approves the consumptio n of 271.6 MU for IAS-I

and 317.12 MUs for IAS-II category for FY 2012-13.

6.14 Public Water Works


6.14.1 BSEB has projected an energy consumption of 60.39 MUs by this category for the

year 2012-13. The BSEB has submitted that Public Water Works has witnessed

negative growth over the past few years. The 3 years CAGR and 5 years CAGR for

sales recorded between FY 2005-06 and FY 2010-11 are -26.3% and -19.5%

respectively. Thus BSEB is expecting that the energy sales for FY 2011-12 and FY

2012-13 to this category will remain same as that of previous year at 60.39 MU.

6.14.2 The Commission as additional information vide Commission’s letter No BERC-Tariff-

24/ 2011-244 dated 15th March, 2012 enquired about the reason of decrease in

sales while No. of consumers and load has been increasing during FY 2010-11. The

BSEB has not given any justification of such abnormalities in it response.




6.14.3 The Commission while approving the sales has considered the five (5) years CAGR

for projecting the no. of consumers and connected load. The Commission also

disagrees with the sale projection provided by the BSEB. While approving sales for

FY 2012-13 the Commission has considered the average of specific consumption for

last five (5) years. The Commission also directs BSEB to investigate the reasons for

drop in sales and intimate the Commission within three months of issue of this order.

6.14.4 The Commission in its tariff Order for FY 2011-12 has stated that

“The Commission has observed high load factor in past years. The Commission

directs BSEB to investigate the reasons for such high load factor and report the same

to the Commission within three months of issue of this order.”

6.14.5 The Commission approves the consumption of 160.3 MU s for Pubic Water

Works during the year 2012-13 .

6.15 HT Industry (HTS-I, HTS-II, HTS-III and HTSS)

6.15.1 BSEB has projected the consumption of HT category (HTS-I, HTS-II, HTS-III and

HTSS) at 1830.88 MUs for the FY 2012-13.

6.15.2 BSEB has calculated growth in sales, no. of consumers and connected load based

on a three (3) year CAGR for HTS-I, HTS-II.

6.15.3 BSEB has also submitted that it will provide electricity supply in FY 2011-12 to

upcoming Rail Wheel Factory at Chapra and in FY 2012-13 to Electric Locomotive

factory at Madhepura under HTS-III sub-category. The contract demand of the Rail

Wheel Factory is 26.67 MVA while Electric Locomotive Factory is 13.5 MVA. For

projection of the connected load of new consumers, power factor of 0.9 is

considered. For the projection of energy sales to new consumers BSEB has

considered the load factor as per actuals of FY 2010-11. BSEB has projected

number of consumers, connected load and energy sales in this sub-category for FY

2012-13 considering the addition of the above said consumers.

6.15.4 For HTSS category, no growth has been projected in no. of consumers, connected

load and sales. BSEB projects number of consumers and connected load same as of

FY 2010-11 during the FY 2011-12 & FY 2012-13. BSEB projects sale of 276.87 MU

for FY 2012-13.




6.15.5 The Commission find it more appropriate to consider four (4) year CAGR for sales,

no. of consumers and connected load for HTS-I, HTS-II sub-category. Since there is

scope for increasing the industrial production, as the industry is picking up after the

recession and there is scope for industrialization, particularly, with improvement in

availability of power in the state of Bihar. Further, the Commission considered it

reasonable to assume consumption of HTSS at least at the same level as in 2010-

11.

6.15.6 The Commission approves the consumption of 2060.3 M Us (1613.7 MU for

HTS-I, II & III and 446.5 MUs for HTSS sub-category ) for HT category the FY

2012-13.

6.16 Railway Traction


6.16.1 BSEB has submitted that it will provide electricity supply in FY 2011-12 to Railways

at T.S.S. Chapra, Hazipur, Pancrukhi, Samastipur, Jhajha with contract demand of

10.8 MVA each. In FY 2012-13 BSEB will provide electricity supply to Railways at

T.S.S. Ramdayalunagar, Bachhwara, Khagaria, Naugachia, Katihar with contract

demand of 10.8 MVA each. For projection of the connected load of new consumers,

power factor at 0.9 has been considered by BSEB. For the projection of energy sales

to new consumers for FY 2012-13, BSEB has considered the load factor as per

actuals of FY 2010-11.

6.16.2 Thus for FY 2012-13, BSEB has projected number of consumers, connected load

and energy sales at 25, 199350 kW and 784.77 MUs.


6.16.3 The Commission is of the view that, since there are no restrictions in the supply to

railways and the full demand has to be met, the consumption proposed by the Board

is agreed to.

6.16.4 The Commission approves the consumption of 784.77 M Us for railway traction

during FY 2012-13 as proposed by the Board.



6.17 Energy sales to Nepal (NEA)

6.17.1 BSEB has an obligation to provide around 50 MW of power to Nepal. BSEB has

projected energy sale of 555 MU in FY 2012-13 based on the actuals of FY 2010-11

and the Commission approves the same.

6.18 Total Energy Sales, No. of Consumers & Connect ed Load


6.18.1 BSEB has submitted that they are implementing premium tariff for the PESU area (all

divisions), Rajgir area (11 kV Town Feeder & 11 kV Kund Feeder) and Bodh Gaya

area (11 kV Bhagalpur Feeder, 11 kV PHED Feeder, 11 kV Town feeder, 11 kV

Magadh University Feeder and 11 kV New Industrial Feeder).

6.18.2 BSEB in its ARR and tariff petition has separately projected number of consumers,

connected load and energy sales in Premium tariff area as well as for the entire

BSEB. For estimating sales to Rest of Bihar, sale projection of Premium tariff area

was excluded from the sale projection of entire BSEB. The sale, connected load and

number of consumers for premium tariff area and rest of Bihar as projected by BSEB

is given below:

Table 99: Projected no. of consumers, connected loa d and energy sale - BSEB

Category Number of Consumers Connected Load Energy Sales

FY 2011-12

FY 2012-13

FY 2011-12

FY 2012-13

FY 2011-12

FY 2012-13

Kutir Joyti (R) – Unmetered 302,914 302,914 18,175 18,175 65.43 65.43

Kutir Joyti (R) – Metered 1,159,866 2,455,970 69,592 147,358 257.98 650.85

Kutir Joyti (Urban) 3,571 3,571 357 357 1.29 1.29

D.S.-I 1,023,413 1,159,387 980,069 1,073,871 924.86 1,047.74

D.S.-II 1,172,056 1,327,779 1,461,938 1,601,860 1,217.44 1,340.37

D.S.- III 44 50 313 343 0.90 0.99

N.D.S.-I 22,208 23,795 25,078 29,359 20.61 22.08

N.D.S.-II 186,706 200,048 481,488 563,684 506.61 555.56

N.D.S.-III 176 188 1,819 2,130 15.75 17.27

IAS-I 51,663 51,663 182,916 182,916 271.63 271.63

IAS-II 5,810 5,810 87,598 87,598 166.99 317.05

LT Industrial-I 17,585 19,317 120,359 134,666 162.09 190.72

LT Industrial-II 1,248 1,371 77,537 86,753 104.42 122.87

Public Water work (PWW) 923 923 18,741 18,741 60.39 60.39

Street light-I (Meterd) 99 99 953 953 5.61 5.61

Street light-II (Unmetered) 206 206 4,452 4,452 26.20 26.20




Street light-III 1 1 231 231 1.36 1.36

H.T.S.-I 919 976 229,417 244,308 798.56 925.45

H.T.S.-II 37 40 75,707 80,621 351.42 407.26

H.T.S.-III 2 3 35,660 47,810 125.45 221.30

H.T.S.S. 15 15 50,169 50,169 276.87 276.87

R.T.S. 20 25 150,750 199,350 566.89 784.77

Total 3,949,483 5,554,152 4,073,319 4,575,704 5,928.75 7,313.05

Table 100: Projected no. of consumers, connected lo ad and energy sale – Premium tariff Area

Category Number of Consumers Connected Load Energy Sales FY 2011-

12 FY 2012-

13 FY 2011-

12 FY 2012-

13 FY 2011-

12 FY 2012-

13

Kutir Joyti (R) - Unmetered - - - - - -

Kutir Joyti (R) - Metered - - - - - -


D.S.-I 2,473 2,802 2,603 2,853 2.23 2.53

D.S.-II 289,369 327,816 460,125 504,163 529.17 582.60

D.S.- III - - - - - -

N.D.S.-I 131 140 169 197 0.12 0.13

N.D.S.-II 62,637 67,113 165,197 193,398 233.26 255.79

N.D.S.-III 45 48 481 563 0.49 0.54

IAS-Il 2,112 2,112 10,448 10,448 15.52 15.52

IAS-II 118 118 549 549 1.36 1.99

LT Industrial-I 3,380 3,713 29,512 33,020 30.34 35.70

LT Industrial-II 430 472 20,274 22,684 43.29 50.94




Street light-III - - - - - -

H.T.S.-I 448 476 88,889 94,658 367.40 425.78

H.T.S.-II 8 9 24,431 26,017 145.34 168.44

H.T.S.-III - - - - - -

H.T.S.S. 4 4 14,187 14,187 37.22 37.22

R.T.S. - - - - - -

Total 362,697 406,365 824,140 910,012 1,441.02 1,612.45

Table 101: Projected no. of consumers, connected lo ad & energy sale – Rest of Bihar


FY 2011-12

FY 2012-13

FY 2011-12

FY 2012-13

FY 2011-12

FY 2012-13

Kutir Joyti (R) - Unmetered 302,914 302,914 18,175 18,175 65.43 65.43

Kutir Joyti (R) - Metered 1,159,866 2,455,970 69,592 147,358 257.98 650.85


D.S.-I 1,020,940 1,156,585 977,465 1,071,018 922.63 1,045.21




D.S.-II 882,687 999,963 1,001,813 1,097,696 688.27 757.77

D.S.- III 44 50 313 343 0.90 0.99

N.D.S.-I 22,077 23,655 24,909 29,161 20.49 21.95

N.D.S.-II 124,070 132,936 316,292 370,286 273.35 299.76

N.D.S.-III 131 140 1,338 1,567 15.26 16.73

IAS-Il 49,551 49,551 172,468 172,468 256.11 256.11

IAS-II 5,692 5,692 87,049 87,049 165.63 315.06

LT Industrial-I 14,205 15,604 90,847 101,646 131.75 155.03

LT Industrial-II 818 899 57,263 64,070 61.12 71.92




Street light-III 1 1 231 231 1.36 1.36

H.T.S.-I 471 500 140,528 149,650 431.16 499.67

H.T.S.-II 29 30 51,276 54,604 206.08 238.83

H.T.S.-III 2 3 35,660 47,810 125.45 221.30

H.T.S.S. 11 11 35,982 35,982 239.66 239.66

R.T.S. 20 25 150,750 199,350 566.89 784.77

Total 3,586,786 5,147,787 3,249,179 3,665,692 4,487.73 5,700.60



2011 directed BSEB to furnish the assumption regarding break-up of No. of

consumers, sales, load and revenue for premium tariff areas, rest of Bihar. However,

in response the BSEB vide letter No Com/Tar/161/2011-260 dated 09th February,

2012 has not submitted any clarification in this regard. It is also worth noting that the

projected no. of Consumer in DS-II category for premium areas and rest of Bihar

provided in the additional information vide BSEB letter No Com/Tar/161/2011-260

dated 09th February, 2012 is not matching with the one submitted by the BSEB in its

ARR and tariff and the BSEB has also not submitted any reason thereof.

6.18.4 In view of the BSEB response showing their inability to justify their assumption for

sub-category wise load, sales forecast and providing actual data of no. of consumers,

connected load and sales for first six (6) month of FY 2011-12 for premium areas and

BSEB as a whole, the Commission approves the Number of consumers, connected

load and energy sales based on the trend analysis of the sales for various consumer

category.



6.18.5 Number of consumers, connected load and energy sales as approved by the

Commission for the entire State is given in the table below:

Table 102: Approved no. of consumers, connected loa d & energy sales of BSEB for FY 2012-13

Category No. of Consumer Connected Load (kW) Sales (MUs)

Projected by BSEB

Approved by Commission

Projected by BSEB


Projected by BSEB


Kutir Joyti (R) - Metered

2,758,884 2,758,884 165,533 165,533 716.28 456

Kutir Joyti (Urban) 3,571 4,211 357 357 1.29 1

D.S.-I 1,159,387 1,159,387 1,073,871 1,073,871 1,047.74 1,048

D.S.-II 1,327,779 1,327,779 1,601,860 1,601,860 1,340.37 1,425

D.S.- III 50 50 343 343 0.99 1

N.D.S.-I 23,795 23,894 29,359 28,902 22.08 22

N.D.S.-II 200,048 200,876 563,684 554,912 555.56 582

N.D.S.-III 188 189 2,130 2,097 17.27 18

IAS-I 51,663 51,663 182,916 182,916 271.63 272

IAS-II 5,810 5,810 87,598 87,598 317.05 317

LT Industrial-I 19,317 19,422 134,666 133,374 190.72 197

LT Industrial-II 1,371 1,378 86,753 85,921 122.87 127

Public Water work (PWW) 923 1,064 18,741 18,747 60.39 160

Street light-I (Meterd) 99 138 953 1,034 5.61 7

Street light-II (Unmetered)

206 288 4,452 4,828 26.20 33

Street light-III 1 1 231 251 1.36 2

H.T.S.-I 976 990 244,308 253,298 925.45 967

H.T.S.-II 40 39 80,621 83,588 407.26 426

H.T.S.-III 3 3 47,810 47,810 221.30 221

H.T.S.S. 15 15 50,169 50,169 276.87 447

R.T.S. 25 25 199,350 199,350 784.77 785

Total 5,554,152 5,556,106 4,575,704 4,576,757 7,313.05 7,512

The sale to the consumers of premium tariff area projected by the BSEB in Table 100

is approved. The energy amounting to 5899 MU is approved as sale to rest of Bihar.

6.19 Transmission & Distribution Losses (T&D Losses )


6.19.1 The Petitioner has submitted that the T&D losses of the Board are on the higher side

as compared to the target set by the Commission because of lower unmetered

consumption norm, inefficient meter billing due to defective meters etc. Further,

dilapidated distribution network of BSEB has contributed to higher T&D losses of



BSEB. Large scale rural electrification under RGGVY scheme leading to expansion

of rural distribution network too has contributed to the T&D losses of BSEB.

6.19.2 Further, the Board has submitted that, the Commission had restated norms of

unmetered consumption for Kutir Jyoti connections from 30 units per month to 18

units per month and for Agriculture connections of IAS-I category from 2000 units per

annum to 1485 units per annum which are not reflective of the actual power

consumption by these categories and is adding to the T&D losses of BSEB.

Consequent to increased availability of power as reflected in the projected increase

in power purchase quantum, BSEB would be able to increase number of hours of

electricity supply to such consumers. This is expected to increase specific

consumption of such consumers, in excess of the norms approved by the

Commission.

6.19.3 The Board has also informed that BSEB has undertaken massive electrification

works under the RGGVY scheme. There has been a tremendous increase in the

network of BSEB in the last 2 years in the high loss rural areas consequent to village

electrification. The village electrification drive has led to an addition of large number

of Kutir Jyoti consumers. This number of such consumers is expected to go up to 27

lakhs within the next two years from 5.89 lakhs in FY 2010-11. This significant

expansion of the network has not only led to increase in the technical losses in the

system, but has also rendered the system porous and prone to theft of electricity.

Due to both these reasons, BSEB has not been able to achieve the loss targets set

by Commission.


2011 enquired about the reason of non-achievement of T&D loss target as specified

by the Commission in spite of implementation of various schemes like RGGVY, R-

APDRP etc. In response to this the BSEB vide letter No Com/Tar/161/2011-260

dated 09th February, 2012 informed the Commission that the Board has been taking

many steps for reduction in T&D loss as well as AT&C loss since 2006-07. However,

T&D loss of the Board has been reduced by 4.51% only during the period from 2005-

06 (42.83%) to 2009-10 (38.32%). The main reason for such a lower reduction in

T&D loss by the Board even after making sustained efforts were explained as given

below:-



• The Board has to supply electricity to Rural/BPL consumers (1212067 nos. as

on 31.03.2010) having unmetered and fixed tariff. Any additional quantum of

power supply to those consumers increases T&D loss / AT&C loss.

• BERC has revised monthly/ annual consumption of the meterless category of

consumers namely, Kutir Jyoti (Rural) and Agriculture & Irrigation (IAS-I) in its

Tariff Order dated 06.12.2010. Accordingly, the monthly assumed consumption

for Kutir Jyoti (Rural) has been reduced from 30 units per month to 18 units per

month and the annual assumed consumption for IAS – I from 2000 units per KW

to 1485 units per KW. This revision in annual consumption has resulted into

increase in T&D loss by 2.22 % every year with effect from 2010-11 in

comparison to the period prior to 2010-11.

• Schemes for reduction of T&D /AT&C loss from 11 KV to consumers' end has

not yet been undertaken. It is an admitted fact that the AT&C loss is maximum in

supply of power to the consumers below 11 KV.

• APDRP Programme was mainly for strengthening of infrastructure of power

supply at 132 KV and 33 KV as also metering of consumers in urban areas. It is

relevant to mention here that the Board has made remarkable improvement in

billing of HT consumers as would be evident from the following table:-

Table 103: Trend of No. of Consumer, connected load , unit and amount billed

Year No. of

consumers

Connected

load Unit billed (MUs)

Amount billed

(Rs. Cr.)

2005-06 667 248050 673.51 295.27

2006-07 699 251991 762.08 341.46

2007-08 763 288460 964.14 423.25

2008-09 867 331053 1275.40 546.38

2009-10 910 333413 1475.09 631.93

• It would be clear that the connected load of HT consumers increased by 34.44%

during the period from 2005-06 to 2009-10 whereas, the unit billed increased by

119.02% during the said period.

• The infrastructure for supply of electricity from 11 KV to the consumers' end is

very old and the conductors at many places are of Iron made having maximum

technical loss. As already stated, capital projects for replacement of conductors

has been taken up but it is expected to be completed by 2-3 years from now,

depending upon availability of fund from State Govt.



• Board's financial position is alarming and it is not in a position to even meet

urgent expenditure such as, payment to power suppliers, establishment

expenses as also O&M expenses. Under the circumstances it is difficult to

generate any fund for strengthening of its infrastructure including metering of

consumers below 11 KV level. The Board is fully dependent on the State Govt.

for metering, re-conductoring, etc.

• Massive electrification to rural mass under RGGVY is further increasing T&D

loss / AT&C loss in absence of methodology to establish base line data

collection system and to capture AT&C losses in different areas to control the

same as envisaged under Restructured Accelerated Power Development and

Reform Programme (R-APDRP).

• The Govt. of India through the Restructured Accelerated Power Development

and Reform Programme (R-APDRP) has now initiated action for providing

financial help to SEBs for preparation of base line data with regard to

identification of area of losses and also for renovation, modernization and

strengthening of 11 KV level sub-station, transformer / transformer centre, re-

conductoring of lines at 11 KV level and below, load bifurcation, feeder

separation, load balancing, HVDC (11 KV), aerial bunching conducting in dense

areas, replacement of electro-magnetic energy meters with tamper proof

electronic meters, installation of capacitor bank and mobile service centre, etc.

The Board may expect substantial reduction in T&D/AT&C loss only after

completion of the aforesaid scheme.

6.19.5 The Board has also submitted that it is making all efforts to control/ reduce

the T&D losses in the State, however, the losses during 2009-10 and 2010-11

could not be reduced to the target level fixed by the Commission mainly due

to massive addition of network in rural areas, addition of subsidized rural/Kutir

Jyoti connections and lack of availability of funds for undertaking loss

reduction works envisaged by BSEB. The Commission is requested that the

T&D targets for FY 2011-12 & FY 2012-13 as proposed in this petition be

accordingly approved.

6.19.6 In view of the above submissions, the Board has prayed to the Commission to

approve the T&D loss levels for FY 2011-12 at 42% & FY 2012-13 at 41% in

consideration of the existing T&D loss levels of BSEB. The T&D losses of the



previous years as approved by the Commission, actual as per accounts and

the projections for FY 2011-12 (RE) and FY 2012-13 are as shown in the

table below:

Table 104: T&D Losses of BSEB for previous years an d projections

Financial Year/ T&D Loss (%) Approved by Commission Actual as per Annual Accounts

FY 2006-07 41.40% 42.61%

FY 2007-08 38.00% 39.06%

FY 2008-09 38.00% 37.98%

FY 2009-10 35.00% 38.32%

FY 2010-11 32.00% 43.59%

Financial Year/ T&D Loss (%) Approved by Commission Projected

FY 2011-12 29.00% 42.00%

FY 2012-13 27.50% 41.00%

6.19.7 BSEB has also prayed to the Commission for revision of the existing consumption

norms for Kutir Jyoti (Rural – Unmetered) and IAS-I to 30 units per connection per

month and 2000 units per KW per annum respectively.


6.19.8 The Commission in its Tariff Order for FY 2006-07 approved the T&D loss target for

the Board till FY 2008-09. Later on the Commission in its Tariff Order for FY 2008-09

relaxed the loss target for FY 2008-09 to 38% from the previous set target of 34%

because of non-achievement of loss target by the Board. Further the Commission

fixed the T&D loss trajectory till FY 2013-14 for the Board in its subsequent Tariff

Orders.

Table 105: T&D loss target Vs. Achievement by BSEB

Year T&D Loss targets

set by BERC

Approved by

BERC in

respective TO

T&D Loss

proposed by

BSEB

As per Annual

Accounts of the

BSEB

FY 2006-07 41.4% - 36.0% 42.61%

FY 2007-08 38.0% - 41.4% 39.06%

FY 2008-09 34.0%* 38.0% 40.5% 37.98%

FY 2009-10 - 35.0% 35.0% 38.32%

FY 2010-11 - 32.0% 38.0% 43.59%

FY 2011-12 - 29.0%

36.0% (Revised

estimate - 42%

as per FY 2012-

13 petition)

-



FY 2012-13 - 27.5% 41.0% -

FY 2013-14 - 26.0% - -

* Later on for FY 2008-09 T&D loss target was revised to 38% in TO for FY 2008-09

6.19.9 It has been observed that the Board has not been able to meet the loss reduction

target set by the Commission in the past. The audited accounts of the Board are also

reflecting the increasing trend of T&D loss during the past two years. The other factor

worth noting here is that the Board in lieu of reducing the T&D loss is proposing

higher loss level for FY 2011-12. The Board had projected T&D loss of 36% for FY

2011-12 in its tariff petition for FY 2011-12, whereas now the Board in its revised

estimate is proposing T&D loss of 42% for FY 2011-12 and 41% FY 2012-13. The

T&D loss level projected by the Board for FY 2011-12 in the revised estimate (42%)

is even more than the actual loss level of the Board for the FY 2006-07. In the above

scenario, the Commission is of the view that the loss reduction initiatives taken by the

Board during the past six (6) years is a big question mark in itself.

6.19.10 The Board’s logic behind increasing trend of T&D in the state of Bihar on account of

huge electrification in rural areas under scheme such as RGGVY is not justifiable as

most of the states in India has availed such schemes although their loss level has

improved/ improving trend unlike BSEB. This is also to be noted that there are other

central Govt. sponsored schemes such as APDRP, R-APDRP and strengthing of

transmission netwokk under Rastruiya Sam Vikas Yojana (RSVY) which are targeted

for strengthing of transmission and distribution network of the Board wherein the

impact of investment through Govt. grant should have reduced the overall T&D loss

of the Board during the past six (6) years. In addition, the State Government is also

providing plan funds for 100% metering and replacement of old conductors. All these

schemes should help BSEB to reduce T&D rather than increase T&D loss. Hence,

rural electrification cannot be held responsible for high T&D loss in Bihar where funds

are flowing for network and distribution system improvement through Central

Government and multilateral funding agencies such as ADB, PFC etc.

6.19.11 Keeping in view the current state of affair of the Board in terms of initiative and

outcome of T&D loss reduction strategy vis-à-vis the Board’s proposal of increasing

T&D loss, the Board’s approach of diverting Government grant towards meeting

financial losses of the Board on account of higher T&D loss will only encourage the

Board to give least priority to loss reduction initiative in future and shall put



unnecessary burden on the State Government as well as Consumers at large in the

State of Bihar through unjustifiable tariff hike, due to inefficiencies of the Board.

6.19.12 It is a well-accepted principle that T&D losses are a controllable parameter and the

Commission has rightly set trajectory for it. BSEB is responsible for consequences

arising out of non-achievement of target of controllable parameter. It is the

responsibility of BSEB to take appropriate measures to bring down losses within the

trajectory approved by the Commission. BSEB now cannot pray before the

Commission to pass on the impact of non-achievement of the loss trajectory to

consumers. The Commission has been approving the capital expenditure proposed

by BSEB in its tariff petitions with an expectation that the promised operating

efficiencies would be achieved by BSEB. BSEB has already spent significant amount

of money on capital expenditure through APDRP, RGGVY, RSVY and state plan

without any perceptible gain in terms of loss reduction.

6.19.13 The Electricity Act 2003 was amended in 2007 to strengthen the mechanism and

empower distribution utilities to take effective steps to improve efficiency and curb

theft and losses. Therefore, BSEB cannot express its inability to curb theft and T&D

losses. The Commission having set the loss trajectory and also revised it once in its

earlier Tariff Order does not find any justification to go for another revision. The

Commission believes that the consumers of the state should not suffer on account of

inefficient performance of BSEB.

6.19.14 So far as the proposal of BSEB for revising the existing consumption norms of 18

units per month for Kutir Jyoti (Rural – Unmetered) consumers and the existing

consumption norm of 1485 units per kW per annum for IAS-I consumers is

concerned, BSEB has not conducted any credible study with appropriate sample size

to support the claim of increased norms. The Commission has got the survey and

study conducted of reasonable number of Kutir Jyoti (Rural) and IAS –I consumers to

ascertain the average consumption of these consumers. The study supports the

consumption norms approved by the Commission for Kutir Jyoti (Rural) and IAS –I

consumers.

Therefore , The Commission considers and approves T&D losses at 27.5% for

the FY 2012-13 and sets T&D loss trajectory of 26.0 % for FY 2013-14 and 24.5%

for FY 2014-15. The Commission also approves the consumption n orms of 18

units per month for Kutir Jyoti (Rural - unmetered) and 1485 units per kW per

annum for IAS –I consumers.



6.20 BSEB’s Own generation


6.20.1 BSEB owns and operated only one thermal generating plant i.e. Barauni Thermal

Power Station (BTPS) located at Barauni. The total installed capacity of the BTPS in

FY 2010-11 was 320 MW. The current status of all units of BTPS is summarized in

the table below for reference:

Table 106 : Current Status of different units of BT PS

Unit Unit capacity

(MW)

Date of


I Retired N/A Retired since 17.02.1983

II Retired N/A Retired since 26.11.1985

III Retired N/A Retired since 05.10.1985

IV 50 9/11/1969 Shutdown since 24.04.1996

V 50 1/12/1971 Shutdown since 15.03.1995

VI 110 1/12/1984 Unit working at de-rated capacity; Dismantling of the Unit and its R&M work is planned from Jul’12

VII 110 31/03/1985 Under shutdown; R&M is underway; Expected to come in operation from Jul’12

6.20.2 The Board has also submitted that, Units I, II and III were retired long back i.e. before

1985. Out of the remaining four units, unit number IV and V are over 42 and 40 years

old respectively and have completed their useful economic life. These Units are

under shutdown for over 17 years. At present Unit VII is under shutdown and

undergoing Renovation & Modernization work for revival. Dismantling of the Unit VI

for R&M work is planned from July 2012 while R&M of Unit VII is expected to be

completed by June 2012.

6.20.3 During FY 2012-13, Unit VI will be taken out for R&M while R&M of Unit VII will be

completed. After R&M, unit will be under stabilization period and hence higher

specific oil consumption is requested for BTPS plant. Station heat rate is expected to

improve from FY 2010-11 level of 4103 kCal/kWh to 4000 kCal/kWh & 3700

kCal/kWh for FY 2011-12 & FY 2012-13 respectively. The Board has submitted that

the coal price in FY 2010-11 was Rs. 1823 per MT but in recent time it has witnessed

steep hike and has reached the level of Rs. 3317 per MT in month of August, 2011.

Hence coal price for FY 2011-12 & FY 2012-13 is expected to be on higher side from

the level of FY 2010-11. Other fuel related cost is projected in the ratio of other fuel

related cost to fuel cost in line with FY 2010-11.



6.20.4 The assumptions and norms used by BSEB for projection of own generation

cost is summarized in the table below:

Table 107: Proposed Plant parameters & Fuel cost de terminants for BTPS


FY 2011-12 (RE)

FY 2012-13 (Projection)





Derated Capacity MW 220 220 220

Plant Load Factor % 11.44 10.45 16.09

Auxiliary Consumption % 17.95 15.00 12.00

Station Heat Rate kcal/kWh 4,103 4,000 3,700


Gross Calorific Value of Coal kcal/kg 3,858 3,800 3,700

Calorific Value of Oil kcal/l 9,950 9,996 9,996

Overall Heat G Cal 904,534 808,009 1,146,999

Heat from Oil G Cal 69,046 70,671 92,961

Heat from Coal G Cal 835,488 737,337 1,054,038

Transit losses % - - -

Actual Oil Consumption kl 6,939 7,070 9,300

Actual Coal Consumption MT 216,560 194,036 284,875


Price of Coal Rs./MT 1,823 2,600 3,250

Price of Oil Rs/kl 31,388 50,780 57,504

Coal Cost Rs. Cr. 39.48 50.45 92.58

Oil Cost Rs. Cr. 21.78 35.90 53.48

Fuel Cost Rs. Cr. 61.26 86.35 146.06

Other Fuel Related costs Rs. Cr. 5.06 7.13 12.06



Total Fuel Cost/Net Generation Rs/unit 3.39 5.44 5.80

6.20.5 BSEB revises its estimate of fuel cost for FY 2011-12 to Rs. 93.48 Cr. against Rs.

80.46 Cr. as approved by the Commission. The Commission is requested to approve

the fuel cost of Rs. 158.13 for FY 2012-13 for generation of 310 MU from BSEB’s

own generating plant.


2011 enquired about the generation related data and information of BTPS Barauni

such as actual generation, performance parameters, month wise projected

generation and performance parameters, reasons of non-achievement of

performance parameters during FY 2010-11 and FY 2011-12 (upto Nov’11) despite

investment under R&M head etc. The Commission also sought clarification on the



high generation cost of power from BTPS despite investment on R&M, actual coal

Transit loss and the basis for steep hike proposed for FY 2011-12 (RE) and FY 2012-

13 (Projected) in Coal and Oil price.

6.20.7 In response to this the BSEB vide letter No Com/Tar/161/2011-260 dated 09th

February, 2012 informed the Commission that during FY 2012-13, unit 6 will be

under operation for April and May and then it will undergo R&M work, while unit 7 will

start generating power from month of July. The BSEB has submitted the month-wise

projected power generation for FY 2012-13 as below:

Table 108: Month wise projected power generation fr om BTPS for FY 2012-13

Month Generation (MU)

PLF (%)

Auxiliary consumption

(MU)

SHR (kcal/kg)

Specific oil consumption

(ml/kwh)

GCV of coal (kcal/ kg)

April 10 13.23 1.750 3750 30 3500

May 10 12.80 1.750 3750 30 3500

June - - - - - -

July 5 6.11 1.00 3500 50 3500

August 20 24.44 3.00 3300 40 3500

September 30 37.88 3.60 3200 30 3500

October 35 42.77 4.20 3200 30 3500

November 40 50.51 4.75 3000 15 3500

December 40 48.88 4.75 3000 15 3500

January 40 48.88 4.75 3000 15 3500

February 40 54.11 4.75 3000 15 3500

March 40 48.88 4.75 3000 15 3500

6.20.8 On non-achievement of performance parameters during FY 2010-11 & FY 2011-12

(upto December 2011), the BSEB has submitted that it is due to non-completion of

R&M work of unit VII. Unit VI is in operation after restoration since July 2007. As per

schedule norms, its capital maintenance is now due. The R&M of unit VI will start

after completion of R&M work of unit. VII.

6.20.9 Further, BSEB has submitted that Unit VI of BTPS will goes for R&M in June, 2012

and Unit VII will come in operation after R&M in July, 2012. Unit VII will be in

stabilisation period and hence the operational parameters will be on higher side. The

main reason for such high fuel cost is cost of coal and cost of oil which has increased

substantially in recent period.

Table 109: Fuel cost trend submitted by BSEB





LDO FO

1 2008-09 1221.27 36915.33 29260.59

2 2009-10 1701.00 43808.72 26896.00

3 2010-11 1822.92 51369.98 30037.70

6.20.10 BSEB has informed the Commission that the Board do not have weighing machine in

working condition at their power plant and hence it is not possible to know actual coal

transit loss. In such scenario, coal transit loss is projected at 0% for FY 2011-12 & FY

2012-13.


6.20.11 On analysis of details it was observed that BSEB has projected the GCV of 3700

kCal/kg for FY 2012-13 in its tariff petition whereas in the additional information vide

BSEB letter No Com/Tar/161/2011-260 dated 09th February, 2012, the Board has

projected GCV of 3500 kCal/ kg, whereas price of coal has increased, and value of

GCV lowered by 200kCal/kg, without stating any reason thereof. Similarly, the

operating parameter such as Auxiliary consumption, SHR etc. is also having

deviation w.r.t. ARR and tariff petition for FY 2012-13.

6.20.12 During the data validation process, it also came to the notice of the Commission that

the capacities of the Unit VI & Unit VII of BTPS have been de-rated. The capacity of

each unit is now 105 MW instead of 110 MW as submitted by BSEB. The

Commission was also informed that the BTPS do not have weighing machine in

working condition and hence they are not computing the actual coal transit loss. In

this regard the Commission directs the Board to expedite the work of installing and

commissioning of Weight-Bridge at all the generating stations and submit progress

report to the Commission. The Board is also directed to intimate the Commission

about the actual transit loss of coal with their FPPCA petition monthly.

6.20.13 In the Tariff Order for FY 2011-12, auxiliary consumption for BTPS was approved at

10% and the Commission decides to retain the same norm for FY 2012-13. The

specific oil consumption of BTPS is 30 ml/kWh which is too high. This issue has

already been settled in the previous Tariff Order. The Commission decides to retain

the same norm for FY2012-13. The Commission approves specific oil consumption of

10 ml/kWh.



6.20.14 The Commission approves GCV of coal based on average of actual GCV of coal for

FY 2009-10 and FY 2010-11. For SHR , price of coal and price of oil the Commission

approves the values as submitted by the Petitioner keeping in mind the age of the

plant and current price trend of coal.

6.20.15 Based on the above parameters, the cost of generation of BTPS as determined by

the Commission for FY 2012-13 is given below:

Table 110: Approved Plant parameters of BTPS & fuel cost determinants for FY 2012-13

Parameters Units FY 2012-13 (Projection)


Gross Units Generated MU 310.00 310.00

Auxiliary Consumption MUs 37.20 31.00

Net Generation MUs 272.80 279.00

Capacity MW 220 220

Derated Capacity MW 220 210

Plant Load Factor % 16.09 16.85

Auxiliary Consumption % 12.00 10.00

Station Heat Rate kcal/kWh 3,700 3,700

Sp. Oil Consumption ml/kWh 30.00 10.00

Gross Calorific Value of Coal kcal/kg 3,700 3,969

Calorific Value of Oil kcal/l 9,996 10,000

Overall Heat G Cal 1,146,999 1,147,000

Heat from Oil G Cal 92,961 31,000

Heat from Coal G Cal 1,054,038 1,116,000

Transit losses % - -

Actual Oil Consumption kl 9,300 3,100

Actual Coal Consumption MT 284,875 281,215

Specific Coal Consumption kg/kWh 0.92 0.91

Price of Coal Rs./MT 3,250 2,857

Price of Oil Rs/kl 57,504 48,761

Coal Cost Rs. Cr. 92.58 80.34

Oil Cost Rs. Cr. 53.48 15.12

Fuel Cost Rs. Cr. 146.06 95.46

Other Fuel Related costs Rs. Cr. 12.06 8.06

Total Fuel Costs Rs. Cr. 158.13 103.52

Total Fuel Cost/Gross Generation Rs/unit 5.10 3.34

6.20.16 The Commission approves the fuel cost for BSEB’s ow n generation at Rs.

103.52 Cr. for FY 2012-13 for gross generation of 3 10 MU.



6.21 Power Purchase


6.21.1 BSEB has projected the power purchase costs at Rs.5139 Crs including PGCIL

charges for purchase of 14,142 MU for FY 2012-13.

6.21.2 BSEB has submitted that it has firm allocations of power from thermal power plants

of NTPC, Hydel Power Plants of NHPC, and the hydel plants of Chukka & Tala

through PTC, hydel plants of BSHPC and thermal power plant of Kanti BUNL. In

addition to these, BSEB will also purchase power from co-generation by sugar mills,

Nepal, Short-term/ Medium-term and Renewable sources. BSEB has projected

energy availability for FY 2012-13 from BSHPC, Sugar Mills, Nepal and KBUNL

based on the energy drawl from April’2011 to August’ 2011 as there is no capacity

addition projected from these plants during FY 2012-13.

6.21.3 The Board in its petition has also intimated that it has started procuring 300 MW

short-term power purchase through NVVNL from September 2011 at the rate of Rs.

4.09 per kWh. BSEB is planning to sign medium-term contract with NVVNL for 450

MW from April’ 2012 at the rate of Rs. 4.31 per kWh. Considering the 85% of

availability, energy available during FY 2011-12 & FY 2012-13 is projected at the

level of 1304 MU and 3351 MU respectively from short term and medium term

purchase.

6.21.4 Based on the above, the projected energy availability of BSEB from the long term

sources is summarized in the table below:

Table 111: Power Purchase Cost Projected by the Pet itioner for FY 2012-13




Total Cost (Rs Cr.)

NTPC Farakka 466 2,889 4.36 1,260

Talchar 398 2,449 2.84 696 Kahalgaon 439 2,670 3.63 969 KBUNL 110 321 3.65 117

NHPC Rangit 21 119 1.54 18 Teesta 109 549 1.28 70

PTC Chukka 80 543 1.53 83






Total Cost (Rs Cr.)

Tala 260 909 1.78 162 Others NEA - 4 4.41 2 BSHPC 50 30 2.49 8 NSSM 18 29 3.35 10 Short/Medium Term 450 3,351 4.31 1,444 RE Purchase Solar 3 15.00 4 Other renewable 275 3.90 107 PGCIL Charges 190

Total 14,142 3.63 5,139

6.21.5 In response to the Commission query regarding new allocation from Central

Generating Station (CGS) or any upcoming generating station planned to be

commissioned during FY 2011-12 or FY 2012-13 vide Commission’s letter No.

BERC- Tariff – 24/11- 825 dated 21st December, 2011, the BSEB vide letter No

Com/Tar/161/2011-260 dated 09th February, 2012 informed the Commission that

BSEB has allocation of 50 MW from Farakka stage-III power plant of NTPC. It was

expected that power will be available from Farakka stage-III plant in FY 2011-12 but

due to fuel related issues currently there is no power availability to BSEB from the

plant. Apart from Farakka stage-III, there is no other Central sector allocation which

is expected to come up in FY 2011-12 & FY 2012-13. Hence, BSEB has not

projected any increase in power purchase allocation from the central sector

generating stations.


2011 asked BSEB to provide actual cost data of power purchased during FY 2011-

12. BSEB provided the power purchase quantum and cost data for FY 2011-12 vide

letter No Com/Tar/161/2011-260 dated 09th February, 2012. The information

provided by BSEB has been used by the Commission for projecting power purchase

quantum and cost for FY 2012-13.

6.21.7 BSEB vide letter No Com/Tar/161/2011-260 dated 09th February, 2012 submitted

the Commission that there is typing mistake in writing methodology for projection of

power from Farakka, Talchar and Kahalgaon. BSEB has stated that it has been

projected based on the actual generation of April, 2011 to August, 2011 on pro-rate

basis.



6.21.8 Further, BSEB vide letter No Com/Tar/132/2011-375 dated 1st March, 2012

explained the basis of considering the power purchase rate of Rs 4.09/ kwh and Rs

4.31/ kWh for short/medium term power purchase. On short-term and medium-term

power purchase rate BSEB has clarified as below:

Short term: BSEB vide NIT no. 171/PR/BSEB/2011 had invited bid for procurement

of 300 MW power under short term for the period 1st December 2011 to 29th

February 2012. In response to the said NIT only two bids from NVVNL and PTC were

received. After evaluation of the bids of M/s NVVNL and M/s PTC, NVVNL was the

L1 bidder who quoted tariff Rs. 4.416 per kwh at delivery point of BSEB within Bihar

periphery (based on billing as per REA) for supply of 300 MW power for the entire

period of contract. The matter was discussed in the CPC meeting no. 14/2011 held

on 04.11.2011. CPC had recommended negotiation of rate with NVVNL for suplly of

power for the entire contract period. In compliance of the direction of the CPC,

meeting with the representative of NVVNL and BSEB were held on 05.11.2011. After

negotiation NVVNL agreed to supply 300 MW power under short term for the period

1st December 2011 to 29th February 2012. Subsequently, Board vide resolution no.

8632 in the 542nd Meeting held on 08.11.2011 approved the procurement of power

from L1 bidder M/s NVVNL at agreed rate of Rs. 4.31 per KWh at the delivery point

of BSEB within Bihar Periphery for the period from 1st December 2011 to 29th

February 2012. LoI was issued by BSEB vide letter no 568 dated 26.11.2011 to

NVVNL for supply of 300 MW power under short term at agreed rate Rs. 4.31per

kwh. Energy Department, Govt. of Bihar vide its letter no. 81 dated 10.01.2012 has

also accorded approval for reimbursement of the financial loss to be incurred by

BSEB on account of the procurement of 300 MW power under short term.

6.21.9 On the issue of steps taken by BSEB for the compliance of the Renewable Purchase

Obligation, the BSEB vide letter No Com/Tar/132/2011-375 dated 1st March, 2012

informed the Commission that BSEB has signed Power Purchase Agreement with a

no. of developers for procurement of power through renewable energy based

generation. The list of the developers and the present status of operation of the plant

as submitted by BSEB are indicated below.

Table 112: Executed PPA with developer for power ba sed on renewable energy

Name of the Project Developer (Capacity in MW)

Location of the Project

Contracted capacity in MW/ MUs (Season/off

season)

Present Status

A. Bagasse based Cogeneration Plant



Name of the Project Developer (Capacity in MW)


Contracted capacity in MW/ MUs (Season/off

season)

Present Status

New Swadeshi Sugar Mills (10 MW) Narkatiaganj,

West Champaran

5 / 8 MW In Operation

Bharat Sugar Mills (18 MW) Sidhiwalia, Gopalganj

10 / 13 MW In Operation

Harinagar Sugar Mills Ltd. (14.5 MW) Harinagar,

West Champaran

11 MW In Operation

HPCL Biofuels Ltd. (20 MW) Sugauli 13 / 16 MW In Operation

HPCL Biofuels Ltd. (20 MW) Lauria 13 / 16 MW In Operation

HV Distelleries & Sugar Mills Ltd. (25 MW)

Marhourah, Saran

14.54 / 18.05 MW Yet to be Commissioned

B. Biomass based Generation Plant

Vishnu Vishal Paper Mills (2 MW) 1 MW Yet to be Commissioned

C. Solar PV based generation Plant

Glatt Solution Pvt. Ltd., Kolkata (3 MW)

Nawada 3 MW, 4.94 MUs

Consent letter given by BSEB for

procurement of entire power 4.94 MUs offered by

developer. Solar PV/Solar Thermal

PPA is uploaded on the BSEB web site. Project developer

has been requested to sign PPA. Project

is expected to be commissioned in

2012-13.

6.21.10 In addition to the above, BSEB has also informed the Commission that they have

received various proposals for establishment of generation plants based on

renewable energy sources and their status is mentioned in the table below. BSEB

shall purchase power from these projects as per its Renewable Purchase Obligation

fixed by Hon’ble BERC and also under solar purchase obligation which is 0.25 % up

to FY 2012-13 and goes up to 3 % by the FY 2021-22. BSEB has also filed a petition

before BERC vide letter no. 349 dated 21.02.2012 in respect of the procurement of

power from Solar Energy Sources.

Table 113: Proposals received for setting-up renewa ble energy plants Name of the

Project Developer


Capacity (In MW) Present Status

A. Biomass based Generation Project

Kumar Tech- Khizirsarai 6 MW Feasibility report for connectivity with



Name of the Project

Developer



Bio, Gaya (Rice Husk)

road, Gaya BSEBsystem through 11 KV Gere Dehati feeder at 33/11 KV PSS at Magadh Engg. College, Gaya has been obtained from ESE / Supply,

Gaya. Recommendation of BREDA is still pending.

Emergent Venture India

Pvt. Ltd, Gurgaon

1 X 12 MW plant

proposed at 11 different places in

Bihar. Out of which 1 X 12

MW is proposed at Churi village, Gaya sadar.

12 MW

Feasibility report for connectivity with 132/33 KV Grid S/s, Chandauti through 132 KV

transmission line has been obtained from ESE, Transmission Circle, Gaya and also conveyed

to EVI, Gurgaon vide BSEB letter no. 355 dated 17.02.2011. The recommendation of BREDA is

awaited.

PTC-BERMACO Green Energy System Ltd., Navi Mumbai

26 places in different district of

Bihar.

12 MW

Feasibility report for connectivity of 1 X 12 MW Biomass based generating plant at Gaunaha, West Champaran with 132/33 KV Grid S/s at

Ramnagar has been obtained. BREDA vide its letter Memo no. 184 dated 06.02.2012 has given direction to BSEB to take appropriate action for signing of the PPA. In this regard,

BSEB vide its letter no. 335 dated 20.02.2012 has also requested PTC-BERMACO to submit

necessary approvals for signing of the PPA. B. Solar PV Power Plant

Glatt Solution Pvt. Ltd., Kolkata

Nawada

3 MW (4.94 MU / year to be supplied to BSEB)

Feasibility report for connectivity of the plant at 33 KV with 132/33 KV Grid S/s, Nawada had already been obtained. BREDA vide its letter

no. 647 dated 28.06.2012 has given recommendation letter to BSEB for signing of

the PPA with M/s Glatt Solution Pvt. Ltd. BSEB vide its letter no. 344 dated 21.02.2012 has requested the project developer to intimate convenient date for signing of the PPA and

submit requisite approvals/clearances & Performance guarantee as per PPA. The project

is expected to be commissioned during 2012-13.

Bhilwara Energy Limited, Noida

Muzaffarour

10 MW (offered to supply 16

MUs / year power to BSEB)

Recommendation of BREDA is awaited. The developer has not identified the location for installation of project in Muzaffarpur. SIPB approval for the project has been obtained.

CLARO, New Delhi

Gopalganj & Khagaria

1 X 5 MW each (Offered to supply 7.5

MU/year power to

BSEB from each project)

SIPB approval obtained. Recommendation of BREDA is awaited.

CHAUCER CAPITAL,

Barachatti, Bodhgaya

20 MW (offered to

SIPB approval obtained. Feasibility report for connectivity with BSEB 220/132/33 KV Grid S/s



Name of the Project

Developer



Mumbai supply 36.278

MU/year power to BSEB)

at Bodhgaya at 33 KV has been given by ESE / trans. Circle, Gaya. Recommendation of

BREDA.

Avant Garde Re-Energy

Limited, Kolkata

Bhojpur, Saran, Bhabua

10 MW each

SIPB approval obtained vide Dept. of Industry, Govt. of Bihar letter no. 1307 dated 15.09.2010.

Project developer has not yet submitted recommendation of BREDA. Project developer has also not submitted letter with full details to BSEB to examine the technical feasibility for

connectivity of the project with BSEB Grid S/s or PSS.

C. Solar PV project under JNNSM scheme

Abacus Holding Private Limited,

Kolkata

Purnea, Bhagalpur,

Muzaffarpur, & Gaya

5 MW each

BSEB vide its letter no. 561 dated 02.04.2010 had requested the developer to provide certain

information like exact location of the plant, tentative distance of the plant from near by Grid

S/s of BSEB to examine feasibility for connectivity with the BSEB system under

JNNSM scheme. The response of the project developer is still awaited. The project developer

has also not submitted any information regarding selection of the project under JNNSM

scheme and registration from BREDA.


6.21.11 The Commission considers power purchase from Farakka, Talchar and Kahalgaon

plants of NTPC and from KBUNL, after scrutiny of data and updated bills. The

Commission also finds generation projected by BSEB from other remaining plants as

reasonable and approves the same for FY 2012-13.

6.21.12 For determining per unit cost of generation for FY 2012-13, the Commission has

considered the actual per unit cost for FY 2011-12 (for the period of April, 2011 to

August, 2011) as submitted by the BSEB. The charges for usage of interstate

transmission system for FY2012-13 has been projected on the basis of actual of FY

2011-12 (for the period of April, 2011 to August, 2011) and the quantum of power

that are likely to be transmitted during FY 2012-13.

6.21.13 The revised tariff for Rangit and Teesta HEPs of NHPC as approved by the CERC for

the period FY 2008-09 to FY 2013-14 and made available to the BERC along with

FPPCA petitions has been considered in place of the rates proposed in the ARR/

tariff petition by the BSEB. It may be noted that the Commission intends to approve



the power purchase costs appropriately for the ensuing year so as to minimize any

subsequent charging of the same under FPPCA.

6.21.14 For renewable solar purchase, average of forbearance and floor price have been

considered for computing the generation cost and accordingly Rs. 15 per unit has

been considered. For determining purchase cost from other renewable sources same

methodology has been employed and accordingly price of Rs. 3.90 has been

considered by the Commission.

6.21.15 Plant-wise expected power purchase quantum and its total cost for FY 2012-13 as

approved by the Commission are given below:

Table 114: Approved Power Purchase Cost for FY 2012 -13

Station Units available (MU) Per unit cost ( Rs/ kWh)

Total Cost (Rs Cr.)

Projected by BSEB


Projected by BSEB


Projected by BSEB


NTPC

Farakka 2,889 2,889 4.36 4.36 1,260 1,258 Talchar 2,449 2,449 2.84 2.84 696 694 Kahalgaon 2,670 2,670 3.63 3.63 969 968 KBUNL 321 321 3.65 3.65 117 117

NHPC Rangit 119 119 1.54 2.60 18 27 Teesta 549 549 1.28 2.04 70 111

PTC

Chukka 543 543 1.53 1.53 83 83 Tala 909 909 1.78 1.78 162 161

Others NEA 4 4 4.41 4.41 2 2

BSHPC 30 30 2.49 2.49 8 8 NSSM 29 29 3.35 3.35 10 10

Short/Medium Term 3,351 3,351 4.31 4.31 1,444 1,442 RE Purchase Solar 3 3 15.00 15.00 4 4 Other renewable 275 275 3.90 3.90 107 107

PGCIL Charges 190 190

Total 14,142 14,142 3.63 3.67 5,139 5,182

6.21.16 The Commission approves the power purchase cost at Rs. 5182 Cr. for

purchase of 14,142 MUs for FY 2012-13.



6.22 Energy Balance


6.22.1 Energy balance depicts the balance between total energy sales and T&D losses (i.e.)

energy requirement and energy available from own generation and power purchased

from various generating sources.

6.22.2 BSEB has projected inter-state transmission losses of 3.31% with a justification that it

is the actual central sector eastern region transmission losses. Further, BSEB vide

letter No Com/Tar/161/2011-260 dated 09th February, 2012 explained that the

Energy balance has been worked out based on the same methodology as adopted

by the Commission in its Tariff Order for FY 2011-12. For power availability, own

generation and net power purchase is taken into consideration. For power

requirement, sale to consumer, additional power sale to consumer, sale to Nepal and

sale through Bilateral/UI has been considered. T&D losses are applied on sale to

consumers of Bihar and Sale to Nepal only and not applied on the sale under

bilateral/UI while projecting for FY 2012-13. BSEB in the additional information vide

letter No Com/Tar/161/2011-260 dated 09th February, 2012 also informed the

Commission that Board sell power to Nepal Electricity Authority at 132 kV & 33 kV

and sale under UI is done at 220 KV voltage level. Board does not sell any power

under bilateral trade.

6.22.3 The projected gross energy requirement, energy availability and additional power

purchase required because of actual and approved losses for BSEB for FY 2012-13

is as follows:

Table 115: Proposed Energy Requirement & Energy Bal ance

Particulars Unit

FY 2012-13 (As per BERC

approved loss trajectory)

FY 2012-13 (As per BSEB Loss

Projection)

Energy Sales within State MU 7,313 7,313 Sale from additional Power Availability MU 266 266 Energy outside State (Nepal) MU 555 555 Sale in biteleral trade/UI MU 293 293

Total Sales MU 8,427 8,427 T&D Losses MU 3,085 5,652 T&D Losses % 28% 41.00% Energy Requirement MU 11,512 14,079

Energy Availability MU



Particulars Unit


approved loss trajectory)

FY 2012-13 (As per BSEB Loss

Projection)

Own Generation MU 273 273 Total Power Purchase from long term sources MU 14142 14,142

Transmission loss in regional losses % 3.31% 3.31% Transmission loss in regional losses MU 335 335 Net Power Availability MU 14,079.00 14,079 Disallowable Power Purchase MU 2,567 -

6.22.4 BSEB has further submitted that for FY 2011-12 & FY 2012-13, BSEB projects to

under-achieve the T&D loss reduction as compared to the T&D loss trajectory

approved by the Commission hence BSEB is required to purchase additional power

of 2101 MUs for FY 2011-12 and 2567 MUs for FY 2012-13 as indicated in Energy

Balance. Based on the net power purchase rate, additional power purchase cost

works out to Rs. 754.26 Cr. and Rs. 955.74 Cr. for FY 2011-12 & FY 2012-13

respectively. Board has requested the Commission to reduce resource gap funding

to the extent of such disallowances and only remaining amount need to be

considered as subsidy available for consumers.


6.22.5 The Commission approves the limits for energy requirement and energy availability

as given below for the FY 2012-13. Commission while approving the energy balance

considered the inter-state transmission losses based on average of past three years

an approved loss which is 2.51%:

Table 116: Approved Energy Requirement for FY 2012- 13 (in MU)

Particulars Unit


approved Loss Approved)

FY 2012-13 (Approved by

BERC)

Energy Sales within State MU 7,313 7,512 Sale from additional Power Availability MU 266 266 Energy outside State (Nepal) MU 555 555

Sale in bi-lateral trade/UI MU 293 293 Total Sales MU 8,427 8,626

T&D Losses MU 3,085 3,161 T&D Losses % 27.50 27.50 Energy Requirement MU 11,512 11,786 Energy Availability MU Own Generation MU 273 279



Particulars Unit


approved Loss Approved)

FY 2012-13 (Approved by

BERC)

Total Power Purchase from long term sources MU 14142 11,804 Transmission loss in regional losses % 3.31 2.51

Transmission loss in regional losses MU 335 296 Net Power Availability MU 14,079 11,786 Disallowable Power Purchase MU 2,567 2,338

6.23 Operation & Maintenance Expenses (O&M)

Employee Expenses


6.23.1 The employee cost comprises salaries and wages, dearness and other allowances,

pension, gratuity and staff welfare expenses etc.

6.23.2 BSEB submitted that they are calculating the terminal liabilities on provisional basis

and hence the amount of terminal benefits/retiral dues payable to the retired



leave encashment. BSEB has also submitted that, in view of the severe financial

crunch mainly on account of Tariff lower than Average cost of supply, BSEB has not

been able to maintain separate fund for retiral liabilities as per the provisions made in

the Annual Accounts hence, there has been a practice by BSEB to meet such

unfunded liability out of the revenue realized from sale of energy during the period of

incidence of discharge of such liabilities.

6.23.3 BSEB has accordingly submitted that the total expenditure under the head of

employee costs is 593.9 Cr. as per the annual accounts for FY 2010-11 and Rs.

168.99 Cr. paid to its retired employees as unfunded terminal liabilities in FY 2010-

11.

6.23.4 For projection of employee cost for FY 2012-13, BSEB has considered that the

employee expenses will increase by 10% in FY 2011-12 & FY 2012-13 from level of

FY 2010-11.

6.23.5 BSEB has also projected additional cost of Rs. 11.07 Cr. for new employees in FY

2011-12 and Rs. 32.62 Cr. for FY 2012-13.



6.23.6 On the issue of payment against terminal liablility and creation of trust for employee

fund, BSEB vide letter No Com/Tar/132/2011-375 dated 1st March, 2012 informed

the Commission that an additional payout of Rs. 130.28 Cr. was made on account of

staff related liabilities & provisions as indicated in the schedule 28 on account of

unfunded terminal liabilities in FY 2010-11 & Rs. 42.11 Cr. was also paid as interest

on GSS, GPF and other staff deposits made on account of unfunded terminal

liabilities in FY 2010-11 as indicated in the schedule 12 of the annual accounts.

6.23.7 The BSEB, as additional information, has also submitted break-up of Rs.

21,91,35,96,307 & Rs. 20,61,07,70,574 shown under “Staff related liabilities and

provisions” in annual accounts of FY 2010-11 as below:

Particular As on 31.03.2010 As on 31.03.2011

GPF 5,195,223,312 5,237,987,358

CPS Pension scheme 24,328,113 62,275,478

Group saving scheme 772,069,528 784,117,511

Provision for garduity 2,433,955,673 2,277,524,606

Provision for leave encashment 1,312,803,309 1,305,341,732

Provision for pension 10,414,731,139 9,138,199,802

RPF Commissioner 2,930,236 2,930,236

Others 1,763,415,469 1,842,299,625

Total 21,919,456,779 20,650,676,348

6.23.8 On the matter of allocation of terminal benefit and head of expenditure during past

years, the Board has submitted that it has been deducting contribution towards GPF

and GSS from the salary of its employees. So far as the other heads of terminal

benefits such as pension, gratuity and leave encashment are concerned. BSEB has

also mentioned that the Board has been providing for such liabilities in the Accounts

to exhibit the same on accrual basis without keeping fund in any separate account to

the extent of such provision. As regards the allocation of deducted fund under GPF

and GSS, It may be clarified that the Board has always remain in cash deficit due to

lower tariff much below average revenue requirement and nil Govt. assistance as

grant/subsidy to the Board prior to FY 2006-07. i.e. before the advent of Regulatory

Commission and as such, it could not kept such deducted amount in a separate

account and in fact, the same utilised in operation expenditure through the working

fund of the Board. In this context, it may be mentioned that consequent upon the

bifurcation of the erstwhile BSEB, the Ministry of Power, Govt. of India vide its

notification dated 4th November, 2004 did not distribute the staff related liabilities and



provision stating that this would be apportioned in accordance with the Ministry of

Power, Govt. of India letter no. 42/9/2000-R&R (Vol-VI) dated 06.01.2004,

accordingly to which this liability will be borne on the basis of payment of pension on

employees/population ratio. BSEB has accordingly claiming employee cost on the

basis of payment through tariff petition before the Commission.

6.23.9 On the issue of creation of trust for employee fund, BSEB vide letter No

Com/Tar/132/2011-375 dated 1st March, 2012 has informed the Commission that a

trust in the name of “BSEB GPF” is already under operation in the Board. All the

payments under the head GPF is routed through this trust. However, balance in the

trust remains nil as the deducted amount from salary of the employees always

remains lower than the actual liability due for payment under GPF (Final withdrawal).

6.23.10 The employee cost for 2012-13 has been projected to be Rs. 933.22 Cr.. The details

of employee cost for FY 2010-11 (actual), FY 2011-12 (RE) and FY 2012-13

(Projected) is as given below.

Table 117: Employees Cost Proposed for FY 2012-13 ( Rs Cr)


FY 2011-12 (RE)

FY 2012-13 (Projected)

SALARIES & ALLOWANCES

1 Basic Pay + Special Pay 241.12

265.24

291.76 2 Dearness Pay

3 Dearness Allowance 97.95 107.74 118.52 4 House rent Allowance 19.84 21.83 24.01 5 Fixed medical allowance 2.15 2.36 2.60 6 Medical reimbursement charges 0.81 0.90 0.99 7 Over time payment 4.49 4.93 5.43 8 Other allowances 4.90 5.39 5.93

9 Generation incentive - - - 10 Bonus - - - 11 Total 371.26 408.39 449.23 12 Leave encashment 15.58 17.14 18.85 13 Gratuity 16.50 18.16 19.97

14 Commutation of Pension - - - 15 Workman compensation 0.33 0.36 0.40 16 Ex- gratia - - 0.01

17 Total 32.41 35.66 39.22 Pension Payment

18 Basic Pension 184.84 203.32 223.66 19 Dearness Pension - - - 20 Any other expenses 1.97 2.17 2.39 21 Total 186.81 205.50 226.05




FY 2011-12 (RE)


22 Total (11+17+21) 590.49 649.54 714.50 23 Payment made for unfunded liabilities 172.39 189.63 208.59

24 Increase in employee cost Due to New Recruitments - 11.07 32.62

25 Grand Total (22+23+24) 762.88 850.24 955.71 26 Less: Employee cost capitalises 18.58 20.44 22.48 27 Net Employee Cost 744.30 829.80 933.22


6.23.11 The Commission in the Tariff Order for FY 2011-12 had stated that:






“4.7.13. The Commission directs BSEB to report the steps taken towards creation

of the trust. The Commission shall be compelled to take appropriate action, if this

direction is not complied with immediately.”

6.23.12 The Commission has already directed BSEB to create separate trust for making

payments for terminal liabilities in its Tariff Order for FY 2006‐07 as reproduced

below:

“The BSEB shall take steps to invest contribution of employees towards pension

etc., through a Trust and make arrangements to pay the pension, gratuity etc., from

the earnings of the investments through the Trust.”

6.23.13 Accordingly, it is apparent that BSEB has utilised the amounts available in the fund

created towards GPF and GSS contribution towards meeting its day to day expenses

i.e. for the purpose of funding its working capital requirements. Accordingly,

permitting these expenses to be passed on to the consumers shall mean that the

consumers have to bear the burden for the past financial mismanagement of the

Board. The Commission is of the view that such liabilities on account of past issues

should be funded by BSEB through its own means and should not be passed on to

the consumers at this point of time. The regulations anyways provide for normative



working capital interest to be passed on to the consumers thus meeting the working

capital requirements of the licensee for the year. However, the Commission has

always been allowing the present provision for existing employee on accrual basis

6.23.14 The Commission is of the opinion that since the creation of the Commission, tariff for

BSEB has been approved by the Commission based on the justified expense after

prudence check by the Commission. The tariff has always been designed by the

Commission so as to recover the ARR of the BSEB. Apart from that the State

Government support for power purchase has also contributed to reduce the gap and

the tariff has been approved based on the same. So the Commission does not agree

with the justification made by BSEB that in could not create trust for employee for

their terminal benefit because the tariff is lower than the Average cost of supply.

6.23.15 The Commission has projected the employee cost of FY 2012-13 separately for each

of the generation, transmission and distribution function considering the figures of

audited annual accounts of FY 2010-11 as base value. The Commission in current

economic situation considers escalation rate of 9.56% appropriate for determining

employee cost for FY2012-13 for each function. The Commission has allowed the

additional cost of Rs. 32.62 Cr. for new employees during FY 2012-13 and distributed

the same in the ratio of employee cost of each function based on the audited

accounts of FY 2010-11. Based on the above, the Commission approves employee

cost for FY 2012-13 as depicted in the table given below:

Table 118: Function-wise employee Cost approved for FY 2012-13 (Rs Cr.)


Employee Cost 38.64 86.24 600.17 725.05

Effect of new employees 1.74 3.88 27.00 32.62


Net Employee Cost 39.19 87.47 608.71 735.37

% Share 5.33% 11.89% 82.78% 100.00%

6.23.16 The Commission approves the Employee expenses of Rs. 735.37 Cr. as against

Rs. 933.22 Cr. projected by BSEB for FY 2012-13.

Repair & Maintenance Expenses (R&M)




6.23.17 BSEB has projected R&M expenses of Rs. 110.68 Cr. for FY 2012-13. BSEB has

projected that the R&M expenses will increase by 10% in FY 2012-13 from level of

FY 2011-12

Table 119: R&M costs submitted by Petitioner for FY 2012-13 (Rs Cr)


FY 2011-12 (RE)


Plant & Machinery 34.56 43.16 47.47 Building 2.20 7.27 8.00 Hydraulic works 2.93 0.33 0.36 Civil Work 0.18 2.88 3.17 Line cable & network 17.10 35.03 38.53 Vehicles 0.09 0.20 0.22 Furniture & fixtures 0.20 0.04 0.05

Office equipments 0.14 0.15 0.16 Operating expenses - 5.94 6.54

Total expenses 57.40 95.00 104.50 Add cost of materials procured from Board's Hdqrs - - - Net Expenses 57.40 95.00 104.50

Cost of water & Other Misc. Charges 5.11 5.62 6.18 Total R&M Expenses charged 62.51 100.62 110.68


6.23.18 The Commission had already approved significant increase for FY 2011-12 during

the past Tariff Order with the expectation that higher R&M cost will help BSEB in

improving operational efficiency.

6.23.19 The Commission has computed the R&M cost separately for Generation,

Transmission and Distribution functions for FY 2012-13 considering the actual

function-wise break-up data as per the annual accounts of the Board for FY 2010-11

as base value. The Commission in current economic situation considers escalation

rate of 9.56% appropriate for determining R&M cost for FY2012-13. Based on the

same, the Commission approves R&M cost for FY 2012-13 as depicted in the table

given below:

Table 120: Function-wise approved R&M costs for FY 2012-13 (Rs Cr) Particulars Generation Transmission Distribution Total

R&M Cost 11.07 14.05 78.96 104.09 Add : Water & Misc charges 6.18 - - 6.18

Total 17.25 14.05 78.96 110.27 % Share 15.65% 12.74% 71.61% 100.00%



6.23.20 The Commission approves the R&M expenses of Rs. 110 .27 Cr. as against

projection of Rs. 110.68 Cr. by BSEB for FY 2012-13 .

Administration & General Expenses (A&G)


6.23.21 BSEB has projected A&G cost on the 3 years CAGR based on the audited data of

A&G expenses for the period FY 2007-08 to FY 2010-11 which is 12%. and thus the

A&G expenses post capitalization are projected at Rs. 53.49 Cr. & Rs. 76.88 Cr. for

FY 2011-12 & FY 2012-13 respectively.

Table 121: A&G costs submitted by Petitioner for FY 2012-13 (Rs Cr


FY 2011-12 (RE)


Rent, rates & taxes 0.50 0.56 0.63

Insurance - - -

Telephone, postage &Telegrams 0.99 1.11 1.25

Legal Charges 0.98 1.10 1.23

Audit Fees 3.25 3.64 4.08

Consultancy fees - - -

Technical fees 0.01 0.01 0.01

Other professional charges - - -

Conveyance & travel expenses 4.99 5.59 6.26

Others 29.39 32.92 36.87

Freight 0.17 0.19 0.22

Total expenses 40.29 45.13 50.54

Less Capitalised 1.46 1.64 1.83

Net expenses 38.83 43.49 48.71

Add Prior period - - -

Total A&G Expenses 38.83 43.49 48.71

Metering, Billing and collection - 10.00 28.17

Total A&G Expenses 38.83 53.49 76.88

6.23.22 BSEB projected that the outsourcing of all metering and billing related activities for all

its consumers in FY 2012-13 at the rate of Rs 4.94 per consumer would cost

additional Rs. 28.17 Cr. during FY 2012-13.


6.23.23 The Commission has approved Rs. 28.17 Cr. on account of cost associated with

outsourcing of metering and billing related activities during FY 2012-13.



6.23.24 The Commission in current economic situation considers escalation rate of 9.56% (at

Wholesale Price Index rate) appropriate for determining R&M cost for FY2012-13.

Based on the same, the Commission approves R&M cost for FY 2012-13 as depicted

in the table given below:

Table 122: Function-wise approved A&G costs for FY 2012-13 (Rs Cr)


A&G Cost 1.42 5.25 41.70 48.37


Add : Metering related cost - - 28.17 28.17

Total 1.36 5.06 68.36 74.78

% Share 1.82% 6.77% 91.41% 100.00%

6.23.25 The Commission approves the A&G expenses of Rs. 74. 78 Cr. for FY 2012-13

against the Petitioner claim of Rs 76.88 Cr.

Total Operation & Maintenance Cost

6.23.26 The total O&M expenses for each of the Generation, Transmission and Distribution

functions, approved by Commission for FY 2012-13 are as given in the table below:

Table 123: Function-wise approved O&M costs for FY 2012-13 (Rs Cr)


Employee Cost 39.19 87.47 608.71 735.37

R&M Cost 17.25 14.05 78.96 110.27

A&G Cost 1.36 5.06 68.36 74.78

Total O&M Cost 57.81 106.58 756.03 920.42



6.24.1 BSEB has taken up R&M works of Unit VI and VII under the RSVY scheme

sanctioned by the Planning Commission, Government of India under non-refundable

grant. Capacity extension of Muzaffarpur Thermal Power Plant (2x195 MW) &

Barauni TPS (2X250 MW) has been sanctioned by the State government. BSEB has

also undertaken various transmission network capacity addition, augmentation and

improvement projects for achieving its objective of making available reliable power

across the State. BSEB is already implementing many schemes for strengthening,

augmenting and expanding its distribution network. For FY 2011-12 & FY 2012-13

BSEB would support on-going schemes of Distribution strengthening program. The



on-going schemes include transformer replacement, procurement of new

transformers, and replacement of old conductor of HT & LT line, construction of new

HT & LT lines, PSS & bays.

6.24.2 BSEB has furnished function wise / scheme wise details of the proposed capital

expenditure for FY 2011-12 & FY 2012-13 as given in the table below:

Table 124: Planned Capital Expenditure proposed by BSEB for FY 2012-13


FY 2011-12 (RE)


1 Generation a) Ongoing schemes 340.66 1,181.21 1,296.50 b) BRGF 14.40 153.00 295.04 Sub Total 355.06 1,334.21 1,591.54 2 Transmission RSVY a) BRGF - 450.13 500.00 b) Mahatma Gandhi Setu Cable crossing 14.67 13.96 13.61 c) Ongoing Scheme 0.57 131.26 98.16 Sub Total 15.24 595.35 611.77 3 Distribution a) Ongoing Scheme 70.89 595.42 712.07 b) APDRP 68.88 68.66 -

c) R-APDRP 0.05 96.82 356.81 d) BRGF - - 250.00 e) ADB - 20.00 55.00 f) PMGY 1.18 0.80 6.07 g) MNP - 0.50 10.66

h) Tal Diara 0.38 1.00 1.92 i) Border Area 0.04 0.05 0.43 j) ACA 21.94 76.75 90.00

k) RGGVY 237.11 315.28 489.00 l) Deposit Work 24.57 12.93 13.00

m) Others works 172.14 52.93 53.00 n) Others Capital works 43.13 92.50 110.60 Sub Total 640.31 1,333.63 2,148.57 Total 1,010.61 3,263.19 4,351.88

6.24.3 The capitalization rate of capital expenditure and opening balance of CWIP was 30%

in FY 2009-10 and 43% in FY 2010-11. BSEB has considered capitalization rate of

43% for FY 2011-12.

6.24.4 BSEB in the additional information vide BSEB letter No. Com/ Tar/161/2011-260

dated 09.02.2012 informed the Commission that capital expenditure for FY 2011-12

& FY 2012-13 has been projected based on Budget of BSEB. BSEB has submitted

the summary of loan received during FY 2011-12 till date as shown below:



Table 125: Details of loan received with sanction l etter

Sl. Name of the scheme Total value of the scheme

(Rs. Cr.)

Amount released to BSEB (Rs.

Cr.)

Date of order for

release of funds to BSEB

1 Bihar power sector development programme 708.00 10.00 28.06.2011

2 BTPS Extension 3,133.17 100.00 05.07.2011

3 R-APDRP Part A 59.00 28.50 05.08.2011

4 Navinagar TPS (3x600 MW) 12,964.57 187.35 05.08.2011

5 Muzzafarpur Sitamadi Transmission tower height

6.15 4.15 10.08.2011

6 Muzzafarpur Sitamadi Transmission line 1.72 1.72 10.08.2011

7 Tehta, Imamganj 132/33 kV grid Substation 51.20 27.67 10.08.2011

8 Construction of 40 nos. of 33/11 kV substations 4,207.31 29.07 10.08.2011

9 Ekma (Saran) 132/33 kV substation and associated lines 5.10 3.10 10.08.2011

10 Construction of Janhada 132/33 kV substation 25.00 10.00 10.08.2011

11 Construction of Simutala 33/11 kV substation 5.20 4.20 10.08.2011

12 Construction of 5 substation in Jahanbad district 17.50 16.50 10.08.2011

13 Construction of 40 nos. of 33/11 kV substations 53.50 15.45 10.08.2011

14 APDRP 129.03 20.00 04.11.2011

15 Cent percent metering 102.50 10.00 28.11.2011

16 Construction of 33/11 kV substation in Ekangsarai and Bairgania

9.30 2.00 30.12.2011

17 Construction of 33/11 kV substation in Jamalpur chaksarvar

4.45 1.00 30.12.2011

18 Construction of 33/11 kV substation in Narayanpur 5.90 1.00 28.12.2011

19 Construction of 33/11 kV substation in Saidpur 4.02 1.00 30.12.2011

20 Construction of 33/11 kV substation in Jale 4.15 1.00 28.12.2011

21 Electrificatoin of Akbarpur Village 0.09 0.09 30.12.2011

22 Electrification of 4 villages in Saran District 0.15 0.15 30.12.2011

23 Construction of 33/11 kV substation in Pandrak

5.50 4.50 28.11.2011

24 Consumer metering 102.50 4.00 10.01.2012

25 Distribution transformers 150.21 10.00 17.01.2012

26 Replacement of distribution transformers 77.93 8.00 17.01.2012

27 Capacity enhancement of distribution transformers 30.23 10.00 17.01.2012

28 Replacement of distribution transformers 67.84 8.00 17.01.2012

Total 21,931.22 518.45

Commission’s View



6.24.5 As per the licence conditions para 51 of chapter 5 of BERC (Grant of licence for

Distribution of electricity) Regulations, 2007, BSEB is required to furnish details of the

proposed schemes expenditure before commencement of the project with description

of assets and its usability in furthering the efficiency or growth in the business of the

Board. Further, BSEB should seek prior approval of such capital expenditure from

the Commission. In the absence of the approval, the Commission may disallow

corresponding depreciation and interest cost.

6.24.6 After analysing the details submitted by BSEB, Commission vide letter no. BERC-

Tariff – 24/11- 825 dated 21st December, 2011 sought clarification on sources of

funding like Loans, Capital Grant, Consumer Contribution or Own Funding. In reply

BSEB vide letter No Com/Tar/161/2011-260 dated 09th February, 2012 provided

details of sources of funding. The funding details of various schemes as provided by

BSEB are as given in the table below:

Table 126: Funding details proposed by BSEB for FY 2012-13)

Sl. Particulars FY 2012-13 (Projected)

Capital Expenditure Grant Consumer

Contribution Borrowings

1 Generation a) Ongoing schemes 1,296.50 20.00 - 1,276.50

b) BRGF 295.04 295.04 - -

Sub Total 1,591.54 315.04 - 1,276.50

2 Transmission

a) BRGF 500.00 - -

b) Mahatma Gandhi Setu Cable crossing 13.61 - 13.61

c) Ongoing Scheme 98.16 - - 98.16

Sub Total 611.77 500.00 - 111.77

3 Distribution a) Ongoing Scheme 712.07 - - 712.07

b) APDRP - - - -

c) R-APDRP 356.81 - - 356.81

d) BRGF 250.00 250.00 - -

e) ADB 55.00 - - 55.00

f) PMGY 6.07 - - 6.07

g) MNP 10.66 - - 10.66

h) Tal Diara 1.92 - - 1.92

i) Border Area 0.43 - - 0.43

j) ACA 90.00 - - 90.00

k) RGGVY 489.00 - - 489.00

l) Deposit Work 13.00 - 13.00 -

m) Others works 53.00 - 53.00 -

n) Others Capital works 110.60 -

110.60



Sl. Particulars FY 2012-13 (Projected)

Sub Total 2,148.57 250.00 66.00 1,832.57

Total 4,351.88 1,065.04 66.00 3,220.84

6.24.7 As in the power projects such as Muzaffarpur Thermal Power Plant (2x195 MW) &

Nabhinagar Super Thermal Power Plant (3 x 660 MW); BSEB is the equity partner

with NTPC for which separate tariff will be determined by the appropriate

Commission, So the Commission has not considered the capital expenditure under

thses plants for computation of GFA, interest and finance charges and depreciation.

With respect to capacity extension of Barauni TPS (2X250 MW) which is expected to

be commissioned in June 2014, i.e. FY 2014-15, GFA, interest and finance charges

and depreciation has not been considered in FY 2011-12. In light of the above, the

Commission has only considered the capital expenditure of Rs. 152 Cr. for FY 2011-

12 and Rs. 295 Cr. for FY 2012-13, as grant under RSVY scheme for R&M of BTPS,

for the purpose of computation of GFA.

6.24.8 Based on the details provided by BSEB, the Commission considers the following

funding pattern for proposed capital expenditure for computation of allowable interest

based on the percentage described in paragraph 6.24.10 and 6.24.11.

Table 127: Funding pattern considered by Commission for FY 2012-13

Sl. Particular Generation Transmission Distribution Total

1. Capital Expenditure 295.00 611.77 2,148.57 3,055.34

2. Grant 295.00 500.00 250.00 1,045.00

3. Consumer contribution - - 66.00 66.00

4. Borrowings - 111.77 1,832.57 1,944.34

6.24.9 BSEB has proposed significantly high capital expenditure for FY 2011-12 & FY 2012-

13, if the capital expenditure incurred by BSEB in past years is considered. However,

the Commission for this order has considered the capital expenditure proposed by

BSEB as it has able to demonstrate that equivalent amount funding is available for

carrying out the proposed capital expenditure.

6.24.10 The capitalization of the above proposed capital expenditure is considered in

accordance with the capitalization schedule given in the table below:

Table 128: Capitalization schedule for proposed cap ital expenditure Sl. Particulars 1st year 2nd year 3rd year 4th year

1 Generation 50% 50% 20% 20% 2 Transmission 25% 30% 30% 15% 3 Distribution 25% 25% 25% 25%



6.24.11 Further for computation of additions to GFA from capitalization of CWIP, the closing

balance of FY 2011-12 and the capitalization rate as given in the table below has

been considered which is in line with the methodology adopted by the Commission in

the Tariff Oreder for FY 2011-12.

Table 129: Capitalization schedule for CWIP Sl. Particulars FY 2012-13 FY 2013-14 FY 2014-15

1 Generation 30% 30% 40% 2 Transmission 30% 30% 40% 3 Distribution 30% 30% 40%

6.24.12 To ascertain function wise asset addition due to capitalization of CWIP, the closing

balance of CWIP reflected in the annual accounts of FY 2010-11 was segregated into

the three functions based on the contribution of these functions to the total GFA at

the end of FY 2010-11

6.24.13 Accordingly the addition to the assets from loans, grants and CWIP was computed

for FY2011-12 and FY2012-13

6.24.14 The GFA levels as approved by the Commission for FY2012-13 are given in the table

below:

Table 130: Approved GFA by Commission FY 2012-13 (R s. Cr.)

Sl. Particulars Generation Transmission Distribution Total

1 Opening GFA (FY 2012-13) 444.12 962.56 3,392.75 4,799.43

2 Addition during the year 257.34 405.35 1,148.02 1,810.71

3 Closing GFA (FY 2012-13) 701.47 1,367.90 4,540.77 6,610.14

6.25 Depreciation


6.25.1 BSEB has computed depreciation for FY 2011-12 & FY 2012-13 by calculating

depreciation on existing assets at weighted average rates of FY 2010- 11. BSEB has

not considered depreciation on assets which are not in use. BSEB has also not

considered depreciation on assets which have depreciated upto 90% of its

acquisition cost.

6.25.2 BERC (Terms & Conditions for determination of Tariff) Regulation, 2007 provides

that the depreciation shall be calculated annually, based on the straight line method

over useful life of the asset and at rates prescribed by the Central Electricity

Regulatory Commission. Assets capitalized during the year are distributed in various



heads in the ratio of opening gross block of the respective year. For the new assets

capitalized during the year, the depreciation for each of the functions has been

projected on the basis of depreciation rates specified in CERC’s terms and condition

of determination of tariff regulation, 2009.

Table 131: Depreciation charges proposed by BSEB (R s. Cr.) Sl. Particulars FY 2010-11 (Actual) FY 2011-12 (RE) FY 2012-13 (Projected) 1. Generation 2.43 21.84 69.34 2. Transmission 14.57 22.78 41.69 3. Distribution 72.01 109.59 169.63 4. Total 89.00 154.21 280.66

Commission’s View

6.25.3 The Commission has considered closing balance GFA as achieved in FY 2011-12 as

per the annual accounts of that year. The Commission has thereafter considered

asset additions of Rs. 1810.7 Crores for FY 2012-13. This addition is as per the

explanation provided in the earlier paragraph at 6.24.14.

6.25.4 It is noted here that the Clause 17 of Central Electricity Regulatory Commission

(Terms and Conditions of Tariff) Regulations, 2009 specifies that depreciation shall

be calculated annually based on Straight Line Method at rates specified in Appendix -

III of the said regulations. Provided that, the remaining depreciable value as on 31st

March of the year closing after a period of 12 years from date of commercial

operation shall be spread over the balance useful life of the assets.

6.25.5 For old assets where age-wise bifurcation has not been provided by BSEB, the

Commission has used the weighted average rate of deprecation achieved in FY

2010-11. For new assets created during FY 2012-13, rates prescribed by CERC

have been applied by the Commission to determine deprecation allowable for FY

2012-13. Function wise computation of depreciation has been carried out by the

Commission based on projected fixed asset for each function during the FY 2012-13.

6.25.6 Based on approved GFA and capitalization considered during FY 2010-11, the

Commission calculated the depreciation for FY 2012-13. However, the depreciation

on the assets created out of consumer contribution, grant has been deducted from

the gross depreciation to arrive at the net depreciation charge for BSEB. The

computation of the depreciation on the assets created out of consumer contribution,

grant is based on the average of ratio of ‘Grant and contribution’ and ‘GFA’ for past

three (3) years. .



Table 132: Function wise Depreciation approved for FY 2012-13 (Rs Cr) Sl. Particulars Generation Transmission Distribution Total

1 Gross Depreciation 15.41 38.41 170.91 224.73

2 Net Depreciation 11.94 29.59 118.24 159.77

6.25.7 The Commission approves the depreciation of Rs. 159 .77 Cr. as against Rs.

280.66 Cr. projected by BSEB for FY 2012-13.

6.25.8 Directives have been given by the Commission in its previous Tariff Orders for

preparation of asset register. However, BSEB has not complied with this directive.

The Commission reiterates its directive to prepare the asset register and report

status of compliance by 30th June, 2012followed by quarterly progress report. BSEB

should compute depreciation as well as interest on loan based on the asset register

in the next tariff petition.

6.26 Interest & Finance Charges


6.26.1 For calculation of Interest and Finance charges for FY 2011-12 & FY 2012-13, BSEB

has considered the closing balance of loans of FY 2010-11 used for funding capital

expenditure and the new loans proposed to be drawn during the year as per the

indicated capitalization schedule of the proposed capital expenditure.

6.26.2 Based on the capitalization and its funding pattern, additional loan requirement has

been worked out for FY 2011-12 & FY 2012-13. BSEB has assumed that all

additional funding requirements will be met by the State Government at the rate of

13% per annum.

6.26.3 Total repayment of loans has been considered equal to the depreciation proposed for

the year. Repayment of Loans other than state plan loans is proposed at 10% of the

opening loan amount. The repayment of state plan loans have been considered

equivalent to depreciation amount left after repayment of non-state loans.

6.26.4 For existing loans, prevailing interest rate has been considered while for new loans

interest rate of 13% is proposed. Based on the same, BSEB revises its estimate of

Interest and Finance Charges for FY 2011-12 to Rs. 464.31 Cr. as against Rs.149.01

Cr. approved by the Commission. BSEB projects Interest and Finance Charges for

FY 2012-13 at Rs. 705.72 Cr.. Function-wise Interest & financial charges calculated

are as shown in table below:



Table 133: Proposed Interest & Financial Charges fo r FY 2012-13

Sl. Particulars FY 2010-11 (Actual) FY 2011-12 (RE) FY 2012-13 (Projected)

1 Generation 50.80 100.89 205.13 2 Transmission 49.57 60.33 77.11 3 Distribution 230.12 303.10 423.48 4 Total 330.49 464.31 705.72

Commission’s View

6.26.5 The Commission vide letter no. BERC-Tariff-24/11-88 dated 27th January, 2012

sought details of the loans and the corresponding assets created out of these loans.

Since Interest is payable only on loans used for creating usable assets; the

Commission has excluded loans raised for working capital or to meet revenue deficit

included for interest claimed by BSEB

6.26.6 In absence of desired information and identification of loans used for creation of

assets, the Commission decided to adopt an indirect methodology to compute

outstanding balance of loans as on 1st April, 2012 used for asset creation. In the

absence of the adequate data with BSEB the Commission has considered the



“The repayment for the year of the tariff period 2009-14 shall be deemed to be equal

to the depreciation allowed for that year”

Closing balance of GFA as on 31st March 2012 (as per annual accounts) provides

the value of assets created out of all possible sources of funding. If from this balance

all the assets created from consumer contribution and grants are excluded then the

balance assets have been funded from the loans raised till date.

6.26.7 Further if the accumulated depreciation as on date is excluded then balance will be

the assets funded out of existing loans. The accumulated depreciation can be

considered as proxy for the loans repaid till date. The Commission has used this

concept to compute opening level of loan as on 1st April, 2012 used for the creation

of fixed assets. The Commission considers this approach reasonable in the absence

of supporting evidence of utilization of loans for asset creation and its usability in

business. However, Commission may revisit this computation on getting the actual

details from BSEB at the time of review/ true-up based on audited accounts of FY

2012-13.



6.26.8 The additional loan to the extent of asset capitalized during the year can only be

considered for interest cost computation. Interest cost on remaining loan amount

should be capitalized and considered as part of capital cost of the asset. This is in

accordance with the BERC (Terms and condition for determination of Tariff)

Regulation, 2007, which provides for interest only on assets which are capitalized

and not on the entire capital expenditure incurred during the year.

6.26.9 Assets capitalized during the year can be funded through grant, consumer

contribution and borrowing. Interest is payable on loans equivalent to capitalized

assets funded through borrowings only. To determine this additional loan the

proposed capitalization is segregated in the ratio of existing levels of grant, consumer

contribution and borrowings.

6.26.10 The approved depreciation during the year is used as the repayment amount during

the year.

6.26.11 Interest rate of 13% as proposed by BSEB has been verified from the sanction letters

issued by the State Government and the proposed rate was found in line with the

interest rate charged by the State Government. The Commission has computed the

interest and finance charges for each function on the basis of the loan availed by the

Board for the respective function.

6.26.12 The repayement of the loan during the tyear has been computed at 10% of the

outstanding loan at the beginning of the year as per the methodology adopted in

Tariff order for FY 2011-12.

6.26.13 The Commission has considered the closing balance of loan for FY 2011-12 (as per

review Order for FY 2011-12) as the opening loan for FY 2012-13 and has computed

the interest on loan for FY 2012-13. The Commission has computed the interest on

loan as per the methodology adopted in Tariff order for FY 2012-13, Based on the

above, interest on loan for FY 2012-13 as approved by Commission based on

capitalization considered during the year is given in the table below:

Table 134: Approved revised estimate of Interest & Finance Charges for FY 2012-13 (Rs Cr)

Sl. Particulars FY 2011-12 (Approved in revised estimate of

FY 2011-12) Approved for FY 2012-13

1 Opening Loan 471.49 983.33 2 Addition of Loan 558.99 1,072.94 3 Repayment of Loan/Depreciation 47.15 98.33



Sl. Particulars FY 2011-12 (Approved in revised estimate of

FY 2011-12) Approved for FY 2012-13

4 Closing Loan 983.33 1,957.93 5 Interest rate 13.00% 13.00% 6 Interest on Loan 94.56 191.18

6.26.14 Based on the interest finance charges of FY 2010-11 as per audited annual accounts

of BSEB, the interest cost for Generation, Transmission and Distribution business of

BSEB has been worked out.

Table 135: Approved revised estimate for Interest & Financial Charges for FY 2012-13 Sl. Particulars Approved in FY 2012-13 1 Generation 41.14 2 Transmission 28.68 3 Distribution 121.37 4 Total 191.18

6.26.15 The Commission approves the interest cost of Rs. 19 1.18 Cr. as against Rs.

705.72 Cr. projected by BSEB for FY 2012-13.



6.27.1 BSEB has proposed interest on working capital in accordance with the applicable

regulations notified by the Commission. The considerations for computing working

capital requirement and interest thereon are summarized in the table below for each

of the functions of BSEB.

Table 136: Methodology adopted by BSEB for calculat ion of Working Capital

Description Generation Transmission Distribution

Norms for calculation

Thermal WC = 2 months cost of coal + 2 months cost of secondary fuel oil + Maintenance spares (at 1% of GFA escalated at 6 % per annum) + 1 month O&M + Receivables (2 months of fixed and variable charges).

WC = Maintenance spares ((at 1% of GFA escalated at 6 % per annum) + Receivables (2 months of transmission charges) + 1 month O&M

WC=1 month O&M + Maintenance spares (at 1% of GFA escalated at 6 % per annum) + 2 months revenue

Reference BERC (Terms and conditions for determination of Tariff) Regulations, 2007.



6.27.2 BSEB has proposed short-term prime lending rate of SBI as on 01/04/2012 i.e.

13.00% for computing interest on working capital. The BSEB has proposed interest

on working capital at Rs. 211.67 Cr. for FY 2012-13.

Table 137: Proposed Interest on Working Capital for FY 2012-13 (Rs Cr) Particulars Generation Transmission Distribution Total 2 month primary fuel & secondary fuel 158 - - 158 1 month O&M 6 11 76 93 Receivables 95 58 1,163 1,316 Maintenance Spares 11 11 38 60 Total WC Requirement 270 81 1,277 1,628 Interest Rate (SBI PLR as on Apr’11) 13.00% 13.00% 13.00% 13.00% Interest on Working Capital 35.11 10.49 166.07 211.67

Commission’s View

6.27.3 The Commission is of the view that, since the working of BSEB is still as an

integrated unit, the Commission has not considered receivables for Generation and

transmission function.

6.27.4 Interest on working capital is computed on normative basis as per BERC (Terms and

conditions for determination of Tariff) Regulations, 2007. SBI PLR rate of 13% as on

1st April, 2011 has been considered for calculation of interest for funding working

requirement. Based on the same, Commission approves interest on working capital

for FY 2012-13 as given in the table below:

Table 138: Approved Interest on Working Capital for FY 2012-13 (Rs Cr) Particulars Generation Transmission Distribution Total

2 month primary fuel & secondary fuel 15.91 - - 15.91

1 month O&M 4.26 8.88 63.00 76.14

Receivables - - 982.09 982.09

Maintenance Spares 10.32 12.37 33.93 56.62

Total WC Requirement 30.49 21.25 1,079.02 1,130.76

Interest Rate (SBI PLR as on Apr’11) 13% 13% 13% 13%

Interest on Working Capital 3.96 2.76 140.27 147.00

6.27.5 The Commission approves the interest on working cap ital of Rs. 147.00 Cr. as

against Rs.211.67 Cr. projected of by BSEB for FY 2 012-13.





6.28.1 BSEB has projected non-tariff income of Rs. 55.11 Cr. for FY 2012-13. BSEB has

mainly considered 3 year CAGR to project non-tariff income for FY 2012-13 based on

the actual income of FY 2010-11.

6.28.2 BSEB has also requests the Commission not to consider any income from DPS as it

is a source for funding increased working capital requirement and also requested the

Commission not to consider income from interest on un-utilized funds while

determining ARR for FY 2012-13.

6.28.3 The detailed break-up of non-tariff income claimed by the Petitioner is as below:

Table 139: Break-up of proposed non-tariff income f or FY 2012-13 (Rs.Cr.)


FY 2011-12 (RE)

FY 2012-13

(Projected) 1 Meter/Service rent 25.00 22.38 26.53

2 Late payment surcharge 38.24 - -

3 Theft / pilferage of energy 10.00 - -

4 Misc. receipts 2.79 4.07 4.80

5 Misc. charges (except PLEC) 10.55 16.32 17.95

6 Wheeling charges - - -

7 Interest on staff loans & 0.01 0.05 0.11

8 Income from trading 1.02 1.05 1.05

9 Income from welfare activities - - -

10 Rental Tender Registration - - -

11 Interest of Bank Deposit 53.48 - -

12 Rebate & discount received 26.06 3.06 3.06

13 Incentive for timely payment against loan to PFC 1.08 0.44 0.44

15 Incentive for timely payment against loan to PFC - 1.16 1.16

17 Total Income 168.23 48.54 55.11

18 Add Prior period income - - - 19 Total Non-tariff income 168.23 48.54 55.11


6.28.4 The Commission agrees with the methodology adopted by BSEB to compute non-

tariff income. At the same time, the Commission feels that it is necessary to adjust

some components of non-tariff income based on recent developments in the sector

which do appropriately reflect the past trend. Also, the Commission has allocated

entire non-tariff income to the distribution function on BSEB.

6.28.5 The Commission has approved the meter rent, Interest on Staff Loan & Advance,

and Misc. charges from consumers for FY 2012-13 based on the three (3) years



CAGR based on actual value for FY 2010-11. For other components of Non-tariff

income, the Commission has considered the actual value of FY 2010-11.

6.28.6 The Commission has adopted the approach on for DPS as a part of Non-tariff income

in line with the recent judgement of Hon’ble Appellate Tribunal for Electricity (APTEL)

dt. 12.07.2011 in Case no 142 & 147 of 2009.

















6.28.8 The Commission has computed DPS of Rs. 30.84 Cr.for FY 2012-13 based on the

three (3) years CAGR applied on the actual value for FY 2010-11. As the Petitioner

charges DPS @ 18% per annum (1.5% per month), the principal amount on which

DPS would be charged comes as Rs.154.64 Cr.

6.28.9 As prevailing SBI PLR as on April 1, 2011 was 13%, the Commission has allowed the

financing cost for DPS @ 13%. The financing cost approved by the Commission is

shown below:

Table 140: Funding of DPS (Rs. Cr.) Particular FY 2012-13

DPS as per projections (@ 1.5% per month) (A) 30.84


Interest Rate for funding of Principle of DPS 13.00%










APRDRP Scheme.




petitions, in the absence of which the Commission shall consider 100% DPS as non-

tariff income for the purpose of calculation of the ARR.

6.28.12 Hence, the Commission has computed the amount of Non-Tariff Income as

summarised below:

Table 141: Approved Non-Tariff Income for FY 2012-1 3 (Rs. Cr.)


Non-Tariff Income as per the Annual accounts

Interest on Staff Loan & Advance 0.05

Income from Investment (F.D) -

Interest on Loan & advance to licensees -

D.P.S from Consumer 30.84

Interest on advance to Supplier/Contractor -

Interest from Bank (Other then F.D) 53.48

Income from Trading 1.05

Income from Staff Welfare activities -

Miscellaneous Receipt. 3.49

Rebate and Discount Received 17.93

Incentive for timely payment of power purchase bills 1.16

Incentive for timely payment of instalment against Loan to PFC 0.46

Meter Rent 25.51

Wheeling charges -

Miscellaneous Charges from Consumers 15.47

Total Non-Tariff Income 149.44

Less: Financing cost of Principle amount of D.P.S. 22.28

Net Non-Tariff Income 127.16



6.28.13 The Commission approves the non-tariff income of Rs . 127.16 Cr. as against

Rs.55.11 Cr. projected by BSEB for FY 2012-13.

6.29 Return on Equity


6.29.1 BSEB has submitted that its asset are funded through loans and grants from the

Government of Bihar, loans and grants under specialized funding schemes of the

Government of India and loans from commercial lending organizations.

6.29.2 BSEB has also submitted that the in states like Jharkhand, Punjab, Chhattisgarh and

Kerala, where integrated Boards like BSEB were / are operational, the appropriate

Commissions have allowed / allow for a reasonable return on equity despite the fact

they have capital structure which is very much similar to that of BSEB and are mainly

funded through loans/ grants from respective State Governments.

6.29.3 BSEB has requested for the reasonable return of 14% on normative equity of 30% of

the Gross Fixed Assets (net off capital grants/ subsidies) in the ARR for the year

2012-13 of Rs. 282 Cr.


6.29.4 Return is admissible only on equity actually deployed for the creation of assets.

Since, BSEB has not been corporatized; it does not have any equity. The

Commission has considered entire assets base funded through loan and accordingly

interest has been allowed.

Therefore, no return is payable on notional equity.

6.30 Revenue from Sale of Power at Existing Tariff for FY 2012-13

BSEB’s Submission

6.30.1 BSEB has furnished the revenue from existing tariff at Rs.2972.84 Cr. for the FY

2012-13. BSEB has proposed separate tariff for Patna and Rest of Bihar. The

revenue from sale of power as projected by BSEB is given in the table below:

Table 142: Revenue Projected for Premium tariff are a, RoB and BSEB at existing tariff

Particular Premium Tariff Areas Rest of Bihar Total Bihar



Energy Sale (MU)

Revenue (Rs Cr.)

Energy Sale (MU)

Revenue (Rs Cr.)

Energy Sale (MU)

Revenue (Rs Cr.)

Average Realisation (Rs/ unit)

Kutir Jyoti (R) - - 716.28 115.80 716.28 115.80 1.62

Kutir Jyoti (U) 0.49 0.09 0.79 0.14 1.29 0.23 1.80

DS - I (R) 2.53 0.44 1,045.21 213.54 1,047.74 213.98 2.04

DS- II

Single Phase 544.15 186.32 707.75 246.62 1,251.90 432.93 3.46

Three Phase 38.45 12.89 50.01 17.07 88.46 29.97 3.39

DS- III - - 0.99 0.35 0.99 0.35 3.53

NDS-I (R) 0.13 0.03 21.95 6.52 22.08 6.56 2.97

NDS-II (U)

Single Phase 159.87 111.93 187.35 136.23 347.22 248.16 7.15

Three Phase 95.92 69.82 112.41 86.37 208.33 156.19 7.50

NDS-III 0.54 0.23 16.73 5.17 17.27 5.39 3.12

LTIS-I 35.70 21.82 155.03 88.35 190.72 110.17 5.78

LTIS-II 50.94 30.70 71.92 61.28 122.87 91.98 7.49

Public Water Works 24.99 11.97 35.40 16.29 60.39 28.26 4.68

IAS-I (Private) 15.52 2.02 256.11 33.29 271.63 35.31 1.30

IAS-II (Government) 1.99 0.49 114.98 76.12 317.05 76.61 2.42

SS-I (Metered) 1.10 0.48 4.51 1.80 5.61 2.29 4.08

SS-II (Unmetered) 8.70 1.66 18.86 5.23 27.56 6.89 2.50

HTS-I 425.78 257.44 499.67 285.87 925.45 543.30 5.87

HTS-II 168.44 87.57 238.83 129.32 407.26 216.90 5.33

HTS-III - - 221.30 116.53 221.30 116.53 5.27

HTSS 37.22 22.55 239.66 93.50 276.87 116.04 4.19

RTS-I - - 784.77 418.98 784.77 418.98 5.34

Total 1,612.45 818.45 5,500.53 2,154.39 7,313.05 2,972.84 4.07


6.30.2 In the petition BSEB has not submitted complete details of break-up of revenue from

existing tariff category / sub category and slab wise. In response to a query from the

Commission vide letter No.. BERC- Tariff – 24/11- 825 dated 21st December, 2011

BSEB vide letter No Com/Tar/161/2011-260 dated 09th February, 2012 furnished the

above revenue details. From scrutiny of the details submitted by BSEB it becomes

evident that slab‐wise details provided by BSEB are based on certain assumptions

which are without supporting details.

6.30.3 For a proper analysis and realistic estimation of revenue from existing/ proposed tariff

the particulars of number of consumers, sales, connected load /contracted demand,



revenue from fixed charges, revenue from variable charges, any other revenue

category wise, sub category wise and slab wise are essential. BSEB has come under

the regulatory regime and the Commission has already issued four Tariff Orders for

FY 2006-07 on 29th Nov’06, for FY 2008-09 on 26th Aug’08, for FY 2010-11 on 06th

Dec’10 and for FY 2011-12 on 1st May’11. The above data is a regulatory

requirement and BSEB is required to maintain/build the database as per the

regulatory requirement.

6.30.4 The Commission has analysed the slab-wise data as provided by BSEB and based

on the same, computed the revenue at existing tariff with respect to the approved

sales.

Table 143: Revenue assessed for BSEB at existing ta riff by Commission

Projected by BSEB for FY 2012-13

Estimated by Commission for FY 2012-13

Particular Energy Sale (MU)

Revenue (Rs Cr.)

Energy Sale (MU)

Revenue (Rs Cr.)

Kutir Jyoti (Rural) 716.28 115.80 455.94 72.57

Kutir Jyoti (Urban) 1.29 0.23 1.46 0.27

DS - I (Rural) 1,047.74 213.98 1,047.74 196.82

DS- II - -

Single Phase 1,251.90 432.93 1,406.10 477.38

Three Phase 88.46 29.97 18.81 10.33

DS- III 0.99 0.35 0.99 0.37

NDS-I (Rural) 22.08 6.56 22.15 5.14

NDS-II (Urban) - -

Single Phase 347.22 248.16 363.62 255.80

Three Phase 208.33 156.19 218.17 160.69

NDS-III 17.27 5.39 18.08 5.64

LTIS-I 190.72 110.17 196.62 105.79

LTIS-II 122.87 91.98 126.66 76.78

Public Water Works 60.39 28.26 160.32 68.85

IAS-I (Private) 271.63 35.31 271.63 31.34

IAS-II (Government) 317.05 76.61 317.17 76.41

SS-I (Metered) 5.61 2.29 6.98 2.85

SS-II (Unmetered) 27.56 6.89 34.29 7.33

HTS-I 925.45 543.30 966.94 574.84

HTS-II 407.26 216.90 425.52 238.13

HTS-III 221.30 116.53 221.30 117.92

HTSS 276.87 116.04 446.51 161.28



Projected by BSEB for FY 2012-13

Estimated by Commission for FY 2012-13

Particular Energy Sale (MU)

Revenue (Rs Cr.)

Energy Sale (MU)

Revenue (Rs Cr.)

RTS-I 784.77 418.98 784.77 424.11

Total 7,313.05 2,972.84 7,511.79 3,070.63

6.31 Revenue from sale to Nepal & UI

BSEB’s Submission

6.31.1 BSEB has sold 555 MU of energy to Nepal at rate of Rs. 4.66 per kWh in FY 2010-

11. BSEB projected the same trend to continue for FY 2011-12 & FY 2012-13. BSEB

has projected revenue from sale of power to NEA for FY 2011-12 & FY 2012-13 at

Rs. 258.63 Cr. each.

6.31.2 BSEB has projected that sale under UI for the FY 2011-12 & FY 2012-13 will be

same as that of FY 2010-11. BSEB has projected its revenue from sale of power

under UI assuming average price of Rs. 3.09 per unit equal to the rate for FY 2010-

11. Revenue from sale of power under UI for FY 2011-12 & FY 2012-13 is projected

at Rs. 90.54 Cr. each.


6.31.3 The Commission approves the projected sales to Nepa l at 555 MU at Rs 258.63

Cr. for FY 2012-13, as it is obligatory to supply p ower to Nepal.

6.31.4 The Board has projected the energy sales of 293 MUs under un-scheduled

interchange (UI)] for the FY 2012-13. The Commission is of the view that, as per the

energy balance the Board is left with additional power to the extent of 2228 MUs.

BSEB has submitted that, the BSEB shall supply 266 MUs additional power to towns


and Street Lights. Accordingly, the Commission approves 293 MUs for sale under UI

as prima facie it seems that it will not impact the supply hour of existing and

proposed consumer base of BSEB.

Accordingly, the Commission approves the proposed s ale under UI for the FY

2011-12 @ Rs. 3.67 per unit, the average power purc hase cost for the year, for

an amount of Rs. 107.76 Cr.



6.32 Revenue from sale of Additional Power

BSEB’s Submission

6.32.1 BSEB has submitted that, additional hours of power supply will be provided to towns


and Street Lighting. BSEB has projected additional revenue of Rs. 135.38 Cr at

existing tariff and 203.66 Cr. at proposed tariff through sale of this additional power at

the rate of average revenue realisation rate of the categories mentioned for FY 2012-

13.


6.32.2 BSEB has projected energy balance at the projected T&D loss level of 41%. The

Commission has already given T&D loss target of 27.5% to BSEB for the FY 2012-13

in its Tariff Order for FY 2011-12 dated 1st May, 2011.

6.32.3 The Commission is of the view that, as per the energy balance the Board is left with

additional power to the extent of 2228 MUs. For which BSEB has submitted that

power to the extent of 266 MUs shall be supplied to towns where premium tariff is

proposed, industrial categories on LT line, urban areas, PWW and Street Lights.

Accordingly, the Commission approves 293 MUs for sale under UI as prima facia it

seems that it will not impact the supply hour of existing and proposed consumer base

of BSEB.

6.32.4 For FY 2012-13, the Commission has worked out energy balance based on T&D loss

level of 27.5% as against 41% projected by BSEB. Also, in the energy balance,

BSEB is proposing availability of 266 MUs of additional power in BSEB system for

sale. The Board has proposed to sell this additional power to industrial categories on

LT line, urban areas, PWW and Street Lights and the towns where premium tariff is

proposed. Considering the supply shortage situation in the State, the Commission is

of the opinion that BSEB can sell higher amount of energy and to that extent it can

bill higher revenue.

6.32.5 To work out the average realisation rate for this sale the Commission has considered

that the additional power can be absorbed by all categories of Consumers in BSEB

system including HT consumers. Average energy realisation rate of all consumer’s

category other than Kutir Jyoti has been considered to determine additional revenue



that can be available to BSEB. Based on the above methodology, additional revenue

of Rs. Rs. 120.99 Cr. has been considered for FY 2012-13 as shown below:

Table 144: Additional Revenue for the FY 2012-13



Energy available for sale to Consumers MU 265.85

Average Energy realisaiton rate (excluding KJ & agriculture) Rs./Unit 4.55

Additional revenue at existing tariff Rs. Cr. 120.99

6.33 Resource gap funding for meeting cost of addit ional power purchase

BSEB’s Submission

6.33.1 Based on the Commission’s approved T&D loss trajectory, BSEB in its petition has

requested the Commission to consider the energy balance as projected for FY 2012-

13 and accordingly approve the additional power purchase of 2567 MUs.

6.33.2 BSEB has also submitted that during FY 2012-13, BSEB will under-achieve the T&D

loss as compared to the T&D loss trajectory approved by the Commission hence

would require to purchase additional power of 2567 MUs for FY 2012-13 as indicated

in Energy Balance. Based on the net power purchase rate, additional power

purchase cost works out to Rs. 955.74 Cr. for FY 2012-13.

6.33.3 BSEB has also informed the Commission in the ARR and tariff petition for FY 2012-

13 that the State Government is providing financial assistance in the form of resource

gap funding to bridge the gap between expenses allowed by the Commission and

actual expenses incurred by BSEB.


6.33.4 Based on the letter from State Government on utilisation of resource gap grant, the

Commission has adjusted the cost of additional power purchase requirement on

account of difference in actual T&D loss of BSEB and T&D loss approved by the

Commission from the resource gap funding by the state Govt. The approach has

reduced the net power purchase cost of the BSEB for the FY 20012-13. The

Commission has computed the cost of additional 2338 MUs (as per approved energy

balance) of power at the power purchase rate of medium/ short term power and has

reduced the same amount from the power purchase cost of BSEB to arrive at the net

power purchase cost of Rs. 4175 Cr. for FY 2012-13”.



6.33.5 The table below summarises the computation of net Power purchase cost of BSEB

for FY 2012-13.

Table 145; Approved cost of additional power purcha se through resource gap for FY 2012-13

Particular Unit Approved by Commission for FY 2012-13

Additional power purchase by BSEB MU 2,338.03

Power purchase rate of Medium/ Short Rs./Unit 4.31

GoB support for cost of Additional power purchased (A) Rs. Cr. 1,006.5

Gross Power purchase cost for FY 2012-13 (B) Rs. Cr. 5,181

Approved Net Power purchase cost for BSEB (B) – (A) Rs. Cr. 4,175

6.34 Past Recoveries

BSEB’s Submission

6.34.1 BSEB has computed total revenue through past recovery as Rs.5032.8 Cr. Based on

its True-up petition for the period FY 2006-07 to FY 2010-11 which also includes

carrying cost on the revenue gap.


6.34.2 The Commission has conducted the detailed analysis and truing up for the period of

FY 2006-07 to FY 2010-11 based on the audited annual accounts of these years and

Review of FY 2011-12. The summary of revenue gap/surplus approved by the

Commission is given as below:

Table 146: Approved Revenue Gap/Surplus for FY 2006 -07 to FY 2011-12 (Rs. Cr.)

Particular Approved by Commission

Revenue Gap/ (Surplus) with carrying cost for FY 2006-07 7.23




Revenue Gap/ (Surplus) with interest for FY 2010-11 (639.93)

Revenue (Gap)/Surplus for FY 2011-12 (as per review of FY 2011-12) (674.63)

Cumulative Revenue Gap/ (Surplus) (822.69)

6.34.3 The aggregate revenue gap along with carrying cost/ interest from FY 2006-07 to FY

2011-12 approved by the Commission resulting in a cumulative revenue surplus of

Rs 822.69 Cr. The Commission shall consider this surplus revenue in the ARR for FY

2012-13.



6.35 Aggregate Revenue Requirement of BSEB for FY 2 012-13

6.35.1 The summary of revenue requirement of BSEB for the FY 2012-13 as analysed in the

preceding paragraphs is given in the table below:

Table 147: Aggregate Revenue Requirement for the FY 2012-13 at existing tariff (Rs. Cr.)

Sl. Particular FY 2012-13

Projected by BSEB

FY 2012-13 Approved by

BERC 1 Power Purchase Cost 5,139.49 5,181.71

2 Fuel 158.13 103.52

3 R&M Cost 110.68 110.27

4 Employee Cost 933.22 735.37

5 A&G Cost 76.88 74.78

6 Depreciation 280.66 159.77

7 Interest & Financial Charges 705.72 191.18

9 Interest on Working Capital 211.67 147.0

10 Return on Equity 281.68 -

11 Total Revenue Requirement 7,898.13 6,703.6

12 Less: Non-Tariff Income 55.11 127.16

13 Less : Disallowable Power Purchase Cost/ Government Support for Power Purchase Cost 955.74 1,006.52

14 Less : Sale of Power Outside State - -

15 Add : Recovery/ (surplus) of Revenue Gap of past filing

5,032.83 (822.69)

16 Net Revenue Requirement 11,920.11 4,747.22

17 Less: Revenue from existing tariff 2,972.84 3,070.63

Gap (=16-17) 8947.27 1676.60

18 Less: Revenue from sale of power to Nepal 258.63 258.63

19 Less: Revenue from sale of power in UI 90.54 107.76

20 Less: Revenue from sale of addl. Power 135.41 120.99

21 Gap 8,462.69 1,189.22

22 Less: Resource Gap Assistance 124.26 -

23 Net Gap at existing tariff 8,338.43 1,189.22

6.35.2 From the above table it can be seen that after considering the State Government

support for cost of additional power purchase requirement on account of difference in

actual T&D loss of BSEB and T&D loss approved by the Commission, the net

revenue gap approved by the Commission for FY 2012-13 is Rs. 1189.22 Cr., with

revenues projected at existing tariff as against Rs. 8338.43 Cr. projected by BSEB.

6.35.3 Function wise expenses namely generation, Transmission and Distribution approved

by the Commission are as given in the table below:



Table 148: Function-wise breakup of ARR approved by Commission for FY 2012-13 (Rs. Cr.) Sl. Particulars Generation Transmission Distribution Total

1 Power Purchase Cost - - 5,181.71

5,181.71

2 Fuel 103.52 - - 103.52

3 R&M Cost 17.25 14.05 78.96 110.27

4 Employee Cost 39.19 87.47 608.71 735.37

5 A&G Cost 1.36 5.06 68.36 74.78

6 Depreciation 11.94 29.59 118.24 159.77

7 Interest & Financial Charges 41.14 28.68 121.37 191.18

9 Interest on Working Capital 3.96 2.76 140.27 147.00

10 Return on Equity - - - -

11 Total Revenue Requirement 218.36 167.61 6,317.62

6,703.59

6.36 Revenue at Approved Tariff

6.36.1 The Commission has revised the existing retail tariff and approved retail tariff for FY

2012-13 in the subsequent chapter “Tariff principles, design and tariff schedule”. The

Commission expects additional revenue of Rs. 348.06 Cr. on account of tariff revision

which indicates a tariff rise of 12.1%.

6.36.2 The estimated additional revenue from the approved tariffs for the FY 2012-13 from

various categories of consumers is given in table below:

Table 149: Revenue from Sale of energy at Approved Tariff for FY 2012-13

Particular Energy Sale (MU) Revenue (Rs Cr.) Average realization (Rs. per unit)

Kutir Jyoti (Rural) 455.94 72.57 1.59

Kutir Jyoti (Urban) 1.46 0.27 1.87

DS - I (Rural) 1,047.74 196.82 1.88

DS- II

Single Phase 1,406.10 500.37 3.56

Three Phase 18.81 10.53 5.60

DS- III 0.99 0.40 4.07

NDS-I (Rural) 22.15 5.14 2.32

NDS-II (Urban)

Single Phase 363.62 260.19 7.16

Three Phase 218.17 160.92 7.38

NDS-III 18.08 6.22 3.44

LTIS-I 196.62 116.89 5.94

LTIS-II 126.66 84.73 6.69

Public Water Works 160.32 114.43 7.14



Particular Energy Sale (MU) Revenue (Rs Cr.) Average realization (Rs. per unit)

IAS-I (Private) 271.63 31.34 1.15

IAS-II (Government) 317.17 178.64 5.63

SS-I (Metered) 6.98 4.63 6.63

SS-II (Unmetered) 34.29 19.85 5.79

HTS-I 966.94 632.15 6.54

HTS-II 425.52 260.28 6.12

HTS-III 221.30 127.89 5.78

HTSS 446.51 170.33 3.81

RTS-I 784.77 464.10 5.91

Total 7,511.79 3,418.68 4.55

6.37 Revenue Gap at Approved Tariff

6.37.1 The expected revenue gap at approved tariffs for the FY 2012-13 is Rs. 841.17 Cr.

as given in table below:

Table 150: Revenue Gap at Approved Tariff for FY 20 12-13 (Rs. Cr.)

Sl. Particular FY 2012-13 Approved by BERC

1 Net Revenue Requirement 4,747.22

2 Less: Revenue from approved tariff 3,418.68

3 Less: Revenue from sale of power to Nepal 258.63

4 Less: Revenue from sale of power in UI 107.76

5 Less: Revenue from sale of addl. Power 120.99

6 Gap 841.17

7 Less: Resource Gap Assistance -

8 Net Gap 841.17

9 Energy Sale (MU) 8,625.64

10 Average Cost of Supply without Grant (Rs/ kWh) 5.50

11 Average Cost of Supply with Grant (Rs/ kWh) 4.71

6.37.2 As per the letter from State Government dated 19th Sep’ 2011, the treatment of

support from State Government is considered to compensate in full for the financial

losses caused to BSEB on account of additional power purchase due to difference in

the actual T&D loss and the T&D loss as determined/ approved by the Commission

and an additional grant of up to Rs. 1080 Cr. shall be available to subsidize

agriculture and rural consumers. Further, the State Government again clarified during

the meeting with the BSEB and Commission held 19th March’2012 that the subsidy

would be only for agriculture and rural consumers, subject to maximum of Rs. 1080

Cr.. The Commission the treatment of subsidy/ support from State Government

accordingly for FY 2012-13 in this Tariff Order.



6.37.3 In view of the above, the Commission approves an average tariff hike of 12.1 %

during FY 2012-13. It may be noted that the Commission has not approved any tariff

hike for Kutir Jyoti (Rural & Urban), Domestic – I (Rural), Non-Domestic-I (Rural),

Irrigation and Agriculture Pumpset (IAS-I) category in this Tariff Order as the same

are being subsidized by the State Government for the FY 2012-13.

6.37.4 The approved tariff hike is expected to accrue to reduce the net gap for the FY 2012-

13 to the extent of 157.26 Cr. as worked out in the tariff below:

Table 151: Revenue Gap at Approved Tariff for FY 20 11-12 (Rs. Cr.)

Sl. Particular FY 2012-13 Approved by BERC

1 Net Revenue Requirement 4,747.22

2 Less: Revenue from approved tariff 3,418.68

3 Less: Revenue from sale of power to Nepal 258.63

4 Less: Revenue from sale of power in UI 107.76

5 Less: Revenue from sale of addl. Power 120.99

6 Gap 841.17

7 Less: Tariff subsidy from State Government 683.90 8 Net Gap 157.26

6.37.5 The Commission has approved an average tariff hike of 12.1 % during FY 2012-13

which is reasonable. This hike has been approved to minimize revenue gap of BSEB.

It is felt that any sharp increase in tariff would have caused undue hardship to the

consumers and the tariffs need to be gradually made to reflect the actual cost of

supply. It may be noted that the approved value of regulatory asset in this Tariff

Order being carried forward to subsequent years is justifiable on the following

grounds:

• There was already a regulatory asset to the tune of Rs. 245 Cr. approved in the

Tariff Order for FY 2011-12 which was carried forward to FY 2012-13. The

regulatory asset now being approved is considering the cumulative impact for

the period FY 2006-07 up to FY 2012-13.

• The Commission has approved substantial tariff increase consecutively in FY

2010-11 and FY 2011-12 therefore it was felt that any substantial increase in

tariff would be an additional burden to the consumer.

• Moreover, there has been a sudden change in the policy of the State

Government in which it has been allowing for adjustment of grant/ subsidies to



the BSEB. A Bulk of the subsidy support which was earlier being used to reduce

the overall ARR is now being used to compensate the BSEB for the disallowed

power purchase cost on account of higher than approved T&D losses. Secondly,

the Government has clarified that a subsidy support shall be made available to

the BSEB only for Agriculture and Rural consumers up to a maximum limit of Rs.

1080 Cr. Therefore, the subsidy support which was in a subsidizing all

consumers of BSEB to the extent of the Approved ARR is not available for the

rest of the consumer categories. Had the Government made total subsidy

support of Rs. 1800 Cr. for FY 2012-13 (as already made available for FY 2011-

12) and also continued with the previous adjustment practice, there would have

been no need for any tariff increase during FY 2012-13.

6.37.6 Therefore, the Commission has decided to retain net revenue gap of Rs. 157.26 Cr.

for FY 2012-13 to avoid sudden tariff shock. This unrecovered gap is considered as

Regulatory Asset to be amortized in subsequent years. BSEB may have to mobilize

financial resources to maintain its cash flow and the Commission will allow carrying

cost of the same.

6.38 Average Tariff as percentage of Average Cost i n Tariff Order for FY 2011-12 &

FY 2012-13

6.38.1 The Commission has approved tariff for various consumer categories considering

gradual reduction in cross-subsidy in line with the requirement of Tariff Policy. As

seen from the table below, tariff as a percentage of average cost is moving towards

the band of ± 20% of average cost of supply as suggested in Tariff Policy. The

average Tariff as a percentage of average cost of supply approved in Tariff Order for

FY 2011-12 and that approved in the Tariff Order for FY 2012-13 is as shown in the

table below.

Table 152: Cross-Subsidy in FY 2011-12 & FY 2012-13

Sl. Particular

FY 2011-12 (As per T.O. FY 2011-12) FY 2012-13 approved by Commission

Average Realization

Cost of Service

% of average cost

Average Realization

Cost of Service

% of average

cost 1 Kutir Jyoti 2.36 5.62 42% 1.59 5.50 29%

2 DS‐I 1.88 5.62 33% 1.88 5.50 34%

3 D.S.‐ II 3.35 5.62 60% 3.59 5.50 65%

4 DS 2.74 5.62 49% 2.86 5.50 52%

5 NDS ‐ I 2.50 5.62 44% 2.32 5.50 42%

6 NDS‐II 6.85 5.62 122% 7.24 5.50 132%



Sl. Particular FY 2011-12 (As per T.O. FY 2011-12) FY 2012-13 approved by Commission

7 NDS ‐ III 3.66 5.62 65% 3.44 5.50 62%

8 NDS 6.61 5.62 118% 6.95 5.50 126%

9 Irrigation IAS – I 1.30 5.62 23% 1.15 5.50 21%

10. Irrigation IAS – II

2.44 5.62 43% 5.63 5.50 102%

11 Irrigation 1.69 5.62 30% 3.57 5.50 65%

12 L.T.I.S.‐I 5.51 5.62 98% 5.94 5.50 108%

13 L.T.I.S.‐II 6.12 5.62 109% 6.69 5.50 122%

14 LT Industrial 5.67 5.62 101% 6.24 5.50 113%

15 Public Water work

4.22 5.62 75% 7.14 5.50 130%

16 PWW 4.22 5.62 75% 7.14 5.50 130%

17 Street light‐I (Metered)

4.03 5.62 72% 6.63 5.50 120%

18 Street light‐II (Unmetered)

3.45 5.62 61% 5.79 5.50 105%

19 Street Light 3.51 5.62 62% 5.93 5.50 108%

20 H.T.S.‐I 5.59 5.62 99% 6.54 5.50 119%

21 H.T.S.‐II 5.37 5.62 96% 6.12 5.50 111%

22 H.T.S.‐III 5.15 5.62 92% 5.78 5.50 105%

23 H.T.S.S. 3.77 5.62 67% 3.81 5.50 69%

24 HT 4.80 5.62 85% 5.78 5.50 105%

25 R.T.S. 5.29 5.62 94% 5.91 5.50 107%

26 Total 4.06 5.62 72% 4.55 5.50 83%



7 Government grant/ revenue subsidy

7.1 Background

7.1.1 The Bihar Electricity Regulatory Commission has till date issued Tariff Orders for FY

2006-07, FY 2008-09, FY 2010-11 and FY 2011-12. The year-wise amount of

revenue grant/ Subsidy received from the State Government and its treatment by the

Commission in the previous Tariff Orders is indicated below:

Table 153: Details of Resource gap grant received f rom State Government

Financial Year Amount of Govt. Grant* (Rs. Cr.) Remarks

FY 2006-07 720

The Commission has used the State Government resource gap grant to reduce the net ARR of BSEB so as to provide subsidized tariff to all consumer categories.

FY 2007-08 720

FY 2008-09 720

FY 2009-10 840

FY 2010-11 1080

FY 2011-12 1080 (Provisional)

* : As per audited annual accounts

7.2 BSEB proposal and BERC approach toward Grant/ R evenue Subsidy from State Government in tariff petition

7.2.1 BSEB since its first ARR and tariff petition for FY 2006-07 and till the ARR and tariff

petition filed for FY 2011-12 has proposed the revenue resource gap from the State

Government to bridge the total revenue gap in the ARR and thus subsidising the

consumers in the State. The Commission had also aligned its approach with the

suggestion of the licensee and accordingly has been passing on the benefit of the

resource gap received from the State Government to the consumers in its Tariff

Orders till FY 2011-12 to provide benefit to all the consumers by reducing the

revenue gap of the Board as well as to reduce the average cost of supply to the

extent of the support/ subsidy being provided.

7.3 Clarification on the treatment of State Governm ent Grant/ Revenue Subsidy



7.3.1 The letter from State Government received in the past in this regard also did not

mention the priority of usage of the fund, the earlier letters received from State

Government had only specified that the support is being made for payment of dues of

NTPC against power purchase. Energy Department, Govt. of Bihar vide letter dated

19/9/11 communicated to the Commission regarding its decision on the priority of use

of the resource gap funding provided by the Govt. to BSEB. The letter outlined that

the State Government grant will be used to compensate the financial losses caused

to BSEB on account of additional power purchase due to difference in the actual T&D

loss and the T&D loss as determined/ approved by the Commission and the

remaining portion of the grant will be used as subsidy to agriculture and rural

consumers.

7.4 BSEB proposal and BERC approach toward Grant/ R evenue Subsidy from State Government in true-up process

7.4.1 BSEB in its true-up petitions, for the period of FY 2006-07 to FY 2008-09, FY 2009-

10 and FY 2010-11 filed on 1st Sep’11, 13th Oct’11 and 15th Nov’11 respectively, has

requested the Commission to treat the resource gap funding to first use/ compensate

BSEB for meeting the losses suffered by BSEB on account of expenditure accruing

due to difference in actual T&D loss of BSEB vis-à-vis T&D losses allowed by the

Commission and consider the balance amount, if any, as subsidy to agriculture and

rural consumers of BSEB. For this, BSEB has referred to letter dated 19/9/2011

received from the Energy Department, Government of Bihar, regarding the treatment

of resource gap grant received from the State Government.

7.4.2 The Commission has observed that the resource gap grant received from the State

Government has always been proposed by BSEB to be used for reducing the net

revenue gap. This has the effect of reducing the net deficit in the ARR and thus

reducing the average cost of supply of electricity and subsidising all categories of

consumers in the state. Accordingly, the Commission has also been passing the

benefit of the resource gap grant received from the State Government to all

categories of consumers in its Tariff Orders issued upto FY 2011-12. The letter from

State Government received in the past in this regard also did not mention the priority

of usage as outlined in the latest letter of State Government dated 19/09/11. The

earlier letters received from State Government have only specified that the support is

being made available for payment of dues of NTPC against power purchase.



7.4.3 The Commission in the True-up order for FY 2006-07 to FY 2008-09 has stated as

under:

“……… the Commission does not agree with the request of the Board to adjust the

dis-allowed power purchase expenses in the resource gap funding and then use the

remaining amount for subsidising the consumers. The Commission retains the

Government of Bihar Grant / Revenue subsidy amount for FY 2008-09 at Rs.720 Cr.

as approved during the review. The revenue gap for the FY 2008-09 will be

computed considering the same.”

7.4.4 The Commission is of the view that letter from State Government after the issue of

Tariff Orders cannot be used to withdraw the effect of government grant already

passed on the consumers on a retrospective basis. Therefore, the Commission has

not considered the BSEB proposal for post-facto adjustment of the revenue resource

gap during the truing up exercise for FY 2006-07 to FY 2010-11. The Commission is

of the view that the same approach would be continued while truing-up of ARR for FY

2011-12, since the Tariff Order for FY 2011-12 had already been issued before such

decision was taken by the State Government.

7.5 Treatment of Grant/ Revenue Subsidy from State Government from FY 2012-13 onwards

7.5.1 As the letter from State Government was received on 19th Sep’ 2011 i.e. before the

approval of ARR and Tariff Order for FY 2012-13, the Commission is of the opinion

that the treatment of the resource gap grant received from State Government should

be in line with the policy decision taken by State Government on utilisation of

resource gap grant. Accordingly, while approving the ARR and Tariff Order for FY

2012-13, the treatment of resource gap grant received from the State Government is

as per the priority set by Energy Department, Government of Bihar vide letter no.

4208 dated 19/09/11. Accordingly, the State Government grant has been used to

compensate the financial losses caused to BSEB on account of additional power

purchase due to difference in the actual T&D loss and the T&D loss as determined/

approved by the Commission and the remaining portion of the grant has been used

as subsidy to agriculture and rural consumers.

7.5.2 Further, the State Government again clarified during the meeting with the BSEB and

Commission held 19th March’2012 that the subsidy would be only for agriculture and



rural consumers, subject to maximum of Rs. 1080 Cr.. The consumer categories

which are considered by the Commission for subsidy support are as indicated below:

Table 154: Subsidised categories in Tariff Order fo r FY 2012-13

Sl. Name of Subsidized Category

Applicability

1 Kutir Jyoti (KJ)

This will be applicable to (i) all huts (Kutir) and dwelling houses of rural and urban families below the poverty line (BPL) (ii) houses built under schemes like Indira Awas Yojana and similar such schemes for BPL families.

2 Domestic – I: Rural (DS –I)

This is applicable to domestic premises in rural areas for a load upto 2 kW not covered by areas indicated under DS‐II and not being fed from urban / town feeders.

3 Non- Domestic – I: Rural (NDS- I)

Applicable to loads upto 2 kW in rural areas not covered by areas indicated under NDS – II and not being fed from urban / town feeders.

4

Irrigation and Agricultural Pump sets – I (IAS – I)

Applicable for supply of electrical energy for bonafide use for agricultural purposes including processing of Agricultural Produce, confined to chaff ‐ cutter, thrasher, cane crusher and rice Huller when operated by the agriculturist in the field or farm and does not include rice mills, flour mills, oil mills, dal mills or expellers. This is also applicable to hatcheries, poultries (with more than 1000 birds) and fisheries (fish ponds) also including private tube wells.

7.5.3 Unlike earlier Tariff Orders issued by the Commission, wherein the grant available

from the State Government was treated for the purpose of reducing in the ARR and

thus reducing the average cost of supply of electricity and subsidising all categories

of consumers in the state, in the Tariff Order for FY 2012-13, due to change in the

policy stand of State Government only the above mentioned four (4) categories will

be subsidised.

7.5.4 The Commission has worked out the subsidy support on the above listed consumer

categories to compensate the BSEB to the extent of the difference between the

average Cost of Supply and the average tariff for the respective categories.

7.6 Mechanism for determination and recovery of Gov ernment subsidy support to Agriculture/ Rural consumers

7.6.1 In view of the State Governments decision to compensate on the Agriculture and

other Rural consumer categories and to encourage the BSEB to improve upon its

metering and billing related activities, the Commission outlines the process for

determination and recovery of Government subsidy support to Agriculture/ Rural

consumers on units billed basis.



7.6.2 The difference between the approved average CoS and the actual monthly average

tariff for the power sold to Agriculture/ Rural consumers shall form the basis for

determination and recovery of subsidy by the BSEB from the State Government on a

monthly basis.

7.6.3 The subsidy support for Agriculture/ Rural consumers on the approved sales/ ARR

for FY 2012-13 as worked out by the Commission is as provided in the table below:

Table 155: Subsidy receivable from State Government for FY 2012-13

Sl. Name of Subsidized Category

Average Tariff (Rs,/ Unit)

Average CoS (Rs,/ Unit)

Units Sold

(MUs)

Subsidy Amount (Rs Cr.)

1 Kutir Jyoti (KJ)-Rural 1.59 5.50 455.94 178.36

1 Kutir Jyoti (KJ)-Urban 1.87 5.50 1.46 0.53

2 Domestic – I: Rural (DS –I) 1.88 5.50 1,047.74 379.81

3 Non- Domestic – I: Rural (NDS- I) 2.32 5.50 22.15 7.05

4 Irrigation and Agricultural Services-I: (IAS–I) 1.15 5.50 271.63 118.15

5 Total subsidy receivable from State Govt. 683.90

7.6.4 Based on the approved ARR and tariff for FY 2012-13, Rs 683.9.Cr. will be received

by BSEB as subsidy from the State Government as subsidy support to BSEB on

sales of power to Agriculture/ Rural consumers.

7.6.5 Further to the above, any FPPCA charges applicable during any month of FY 2012-

13 should be added on to the CoS approved for the year in this Tariff Order for

determination of subsidy support to the Agriculture/ Rural categories.



8 Tariff Principles, Design and Tariff Schedule

8.1 Background

8.1.1 The Commission in determining the Aggregate Revenue Requirement (ARR) and the

retail tariff of BSEB for the FY 2012-13 has been guided by the provisions of the

Electricity Act 2003, the National Electricity Policy 2005 (NEP), the Tariff Policy 2006

(TP), Regulations on Terms and Conditions for Determination of Tariff issued by the

Central Electricity Regulatory Commission (CERC) and BERC (Terms and

Conditions for Determination of Tariff) Regulations, 2007. Section 61 of the Act lays

down the broad principles, which shall guide determination of retail tariff. As per

these principles the tariff should progressively reflect cost of supply and also reduce

cross subsidies within the period to be specified by the Commission. The Act also

lays special emphasis on safeguarding consumer interests and also requires that the

costs should be recovered in a reasonable manner. The Act mandates that tariff

determination should be guided by the factors, which encourage competition,

efficiency, economical use of resources, good performance and optimum investment.

8.1.2 The NEP aims at increased access to electricity, supply of reliable & quality power at

reasonable rates, minimum life line consumption, financial turnaround & commercial

viability of electricity sector and protection of consumer’s interest. The Commission

has considered factors as far as possible which aim at achieving the objectives of

NEP while determining the revenue requirement of BSEB and designing the retail

tariff for its consumers.

8.1.3 The TP notified by Government of India in January 2006 provides comprehensive

guidelines for determination of tariff and revenue requirement of power utilities. The

Commission has endeavored to follow these guidelines as far as possible.

8.1.4 The Electricity Act, 2003 requires consideration of Multi Year Tariff (MYT) principles

and TP also mandates that the MYT framework be adopted for determination of tariff

from 1st April 2006. The BERC (Terms and Conditions for determination of tariff)



Regulations, 2007 provide the MYT framework to be made applicable to BSEB from

the date to be notified by the Commission. However the Commission did not

introduce MYT regime in the State immediately but decided to defer its applicability

till FY2012 -13 because of lack of requisite and reliable operational and financial

data. However the Commission would admit that till date the ground work necessary

for providing adequate data and improving the quality and reliability of existing data

for implementing MYT from FY2012-13 has not yet been done by BSEB. The

Commission shall take appropriate action to introduce MYT in the State as envisaged

in its regulations.

8.1.5 The Tariff Policy mandates that tariff should be within ±20% of the average cost of

supply by FY2010-11 and requires Commissions to lay down a road map for

reduction of cross subsidy. However, the Commission while designing the retail tariffs

for FY2012-13 has taken into consideration the existing level of cross subsidies, the

need to reduce cross subsidies as required under the TP and the feasible pace at

which it can be done without giving a tariff shock to subsidized consumers. The

Commission has accordingly modified tariffs for consumer categories whose existing

tariffs are lower/higher than the average cost of supply so that the retail tariffs of all

such consumer categories move closer to the band of ± 20% of the average cost of

supply. The Commission for this purpose has computed the average cost of supply

on the basis of the revenue requirement allowed and the sale approved by the

Commission for FY2012-13. Further the Commission has also considered the need

to (i) rationalize consumer categories & sub categories so that consumers with

similar load profile are considered together (ii) rationalize minimum charges (MC)

giving due consideration to hours of supply provided by BSEB (iv) encourage

Demand Side Management (DSM) by making the option of two part tariff attractive

for consumers (v) encourage ToD tariff for DSM in the State (vi) reflect quality and

reliability of supply aspects in tariffs (vii) appropriate slab wise tariff. The Commission

believes that consideration of these factors will result in tariffs becoming more cost

reflective and equitable as consumers would be required to pay tariffs according to

the cost incurred by BSEB in supplying electricity to them.

8.2 Tariff changes proposed by BSEB

8.2.1 BSEB in its tariff petition for FY 2012-13 has proposed revision of retail tariffs of

various consumer categories to earn additional revenue of Rs.1757.11 Cr. leaving a

gap of Rs. 6581.31 Cr. to be recovered as regulatory assets in subsequent years.



However on detailed scrutiny and application of prudency check on the aggregate

revenue requirement filed by BSEB, the Commission has arrived at a more realistic

aggregate revenue requirement of Rs 4747.22 Cr. for FY 2012-13. The Commission

has therefore allowed an average tariff increase of 12.1% as against 57% increase

sought by BSEB. This will result into additional revenue of Rs. 1032 Crores leaving a

gap of Rs. 157.3 Crores as regulatory asset. The average cost of supply approved by

the Commission is Rs. 5.5 per unit against Rs. 6.37 per unit proposed by BSEB.

State Government tariff subsidy of Rs. 683.90 Crores has been considered for

subsidising the rural domestic, commercial and agricultural consumers to retain their

tariff at existing level of FY 2011-12.

8.2.2 In the tariff proposal, BSEB has proposed

(i) Creation of new tariff category for HT consumers seeking construction power at

HT voltage levels for their plants,

(ii) Creation of new sub-categories within existing tariff categories

(iii) Change in existing terms and conditions of tariff.

8.2.3 The proposed increase in tariff by BSEB would result in an overall increase of about

57% against existing retail tariffs.

8.3 Changes in existing tariff categories/sub-categ ories proposed by BSEB

8.3.1 Changes in the existing tariff categories/ sub-categories proposed by BSEB are given

in brief below:

Sl. Existing Proposed by BSEB for FY 2012-13

A. LOW TENSION SUPPLY

1.0 DOMESTIC SERVICES (DS)

1.1 Kutir Jyoti – BPL Consumers Kutir Jyoti – BPL C onsumers

(i)

Kutir Jyoti – (Rural) – Load upto 60W

- Unmetered

- Metered

Kutir Jyoti – (Rural) – Load upto 60W

- Unmetered

- Metered

(ii) Kutir Jyoti - (Urban) – Load upto 100 W

- Metered

Kutir Jyoti - (Urban) – Load upto 100 W

- Metered




1.2

DS-I (Connected load upto 2 kW)

- Unmetered

- Metered

DS-I (Connected load upto 2 kW)

- Unmetered

- Metered

1.3

DS – II (Metered)

- Single Phase Upto 5 kW

- Three Phase 5 kW and above

DS – II (Metered)

- Single Phase Upto 5 kW

- Three Phase 5 kW and above

1.3.1 DS-II (A) (Optional) Demand Based Tariff (Contract demand of 5 kW to 60 kW)

DS-II (D) (Optional) Demand Based Tariff (Contract demand of 5 kW to 60 kW)

1.4 DS – III (Metered) DS - III (Metered)

1.5 N/A

Domestic Service – (Temporary connection for a max. duration of 6 months) - DS (T)

- Unmetered

- Metered

(New sub-category proposed)

2.0 NON DOMESTIC SERVICES (NDS)

2.1

NDS-I (Load upto 2 kW in Rural area)

- Unmetered

- Metered

NDS-I (Load upto 2 kW in Rural area)

- Unmetered

- Metered

2.2

NDS – II (Metered)

(Load upto 60 kW in urban Area & Load above 2 kW in Rural Area)

- Single Phase upto 5 kW

- Three Phase for 5 kW & above

NDS – II (Metered)

(Load upto 60 kW in urban Area & Load above 2 kW in Rural Area)

- Single Phase upto 5 kW

- Three Phase for 5 kW & above

2.2.1 NDS –II (A) (Optional)-Demand Based Contract demand of 5 kW upto 60 KW

NDS –II (D) (Optional)-Demand Based Contract demand of 5 kW upto 60 KW

2.3 NDS – III (Metered) Upto 30 kW NDS – III (Metered) Upto 30 kW

2.3.1 NDS – III(A) -Demand Based of 5 kW and upto 30 Kw

NDS – III (D) -Demand Based of 5 kW and upto 30 kW

2.4 N/A NDS IV – Commercial Advertisement for hoardings


2.5 N/A

Non-Domestic Service – (Temporary connection for a max. duration of 6 months) - NDS (T)

- Unmetered

- Metered




(New sub -category proposed)

3.0 IRRIGATION AND AGRICULTURAL SERICES (IAS)

3.1 IAS – I IAS – I

(i)

Unmetered supply

- Rural feeder

- Urban feeder

Unmetered supply

- Rural feeder

- Urban feeder

(ii)

Metered supply

- Rural feeder

- Urban feeder

Metered supply

- Rural feeder

- Urban feeder

3.2 IAS – II (State Tube wells / state Lift Irrigation Pumps / State Irrigation pumps upto 100 HP)

IAS – II (State Tube wells / state Lift Irrigation Pumps / State Irrigation pumps upto 100 HP)

(i)

Unmetered supply

- Rural feeder

- Urban feeder

Unmetered supply

- Rural feeder

- Urban feeder

(ii)

Metered supply

- Rural feeder

- Urban feeder

Metered supply

- Rural feeder

- Urban feeder

4.0 LOW TENSION INDUSTRIAL SERVICE (LTIS)

4.1 LTIS – I (Connected load upto 25 HP) 4.1: LTIS (Connected load upto 99 HP)

(Proposed merger of LTIS –I and LTIS –II) 4.1.1

LTIS-I (A) Optional- Demand based Tariff- Contract demand 5 kW and upto 15 kW

4.2 LTIS – II Connected load Above 25 HP and upto 99 HP 4.1.1: LTIS (D) Demand based Tariff-

(Compulsory for all new three phase LTIS consumers) 4.2.1

LTIS – II (A) Optional-Demand based Tariff- Contract Demand above 15 kW and upto 60 kW

4.3 N/A

LTIS – (Temporary connection for a max. duration of 6 months ) - LTIS (T)

- Unmetered

- Metered


5.0 PUBLIC WATER WORKS (PWW)




5.0 PWW Connected Load upto 99 HP PWW Connected Load upto 99 HP

(Proposed as 5.1)

5.2 N/A

PWW – (Temporary connection for a max. duration of 6 months) - PWW (T)

- Unmetered

- Metered


6.0 STREET LIGHT SERVICES (SS)

6.1

SS – I (Metered)

- Gram Panchayats

- Nagar Palika / NAC / Municipality

- Municipal Corporation

SS – I (Metered)

- Gram Panchayats



6.2

SS – II (Unmetered)

- Gram Panchayats



SS – II (Unmetered)

- Gram Panchayats



B. HIGH TENSION SUPPLY

7.1 HTS – I

11 kV/ 6.6 kV Supply

Installations having contract demand of 75 kVA to 1500 kVA

11 kV/ 6.6 kV Supply

Installations having contract demand of 75 kVA to 1500 kVA

7.2 HTS – II

33 kV Supply

Installations having contracted demand of 1000 kVA to 10000 kVA

33 kV Supply

Installations having contracted demand of 1501 kVA to 10000 kVA

(New range of Contract demand proposed)

7.3 HTS – III

132 kV Supply

Installations having contracted demand of 7.5 MVA and above

132 kV Supply

Installations having contracted demand of 10 MVA and above

(New range of Contract demand proposed)

7.4 HTSS

Induction furnace including Ferro Allow loads (11 kV & 33 kV)

Induction furnace including Ferro Allow loads (11 kV & 33 kV)




8.0 RAILWAY TRACTION

RTS (At 132 kV supply)

RTS (At Lower than 132 kV supply)

RTS (At 132 kV supply or above)


9.0 TEMPORARY SUPPLY (LT & HT)

Temporary connection for a period of less

than one year.

10.0: Temporary connection for a period of

less than six (6) months. (New duration proposed for temporary category)

10.0 SEASONAL SUPPLY (LT & HT)

No change has been proposed in seasonal supply tariff category

11.0 CONSTRUCTION POWER

N/A

9.0: Construction Power for supply at 11kV and above for construction or fabrication of plants

(New category proposed)



8.4 Changes in tariff category and tariff schedule approved by the Commission

8.4.1 In this section the Commission has analyzed changes in tariff categories/sub-

categories and other conditions of schedule proposed by BSEB and accordingly

either approved or disapproved them. The Commission in the first instance has

commented on changes proposed by BSEB which are common to most of the

consumer category.

Creation of new tariff Category – Construction Powe r


8.4.2 BSEB has proposed the creation a new tariff category for HT consumers seeking

construction power at HT voltage levels for their plants. This tariff category is

proposed to be applicable to all such consumers who avail supply for construction or

fabrication of plants at 11 kV and above.

Commission’s view

8.4.3 The Commission is of the view that there is already provision for providing

connections at HT voltage levels for the purpose of construction/ fabrication works

with respect to plants as per Clause 4.63 of the BERC (Bihar Electricity Supply

Code), 2007.

Accordingly, the proposal of the BSEB for creation of a separate category for HT

consumers seeking construction power at HT voltage levels for their plants is being

rejected.

Creation of new sub-categories within existing tari ff categories


8.4.4 Temporary Category: Consumers seeking temporary connections for electricity

usages under Domestic Service, Non-Domestic Service, Low Tension Industrial

service, Public Water works and HT category will be eligible. Applicability of the

temporary connection is restricted to certain categories only as compared to existing

structure where all consumers are eligible. Temporary connection is proposed to be

provided as unmetered connection and metered connection for LT category of

consumers while HT category of consumers will get metered connection only. The

creation of unmetered temporary category under these categories has been



necessitated on account of consumers seeking temporary connections for (i) Melas,

Festivals & Exhibitions (ii) Puja Pandals (iii) Marriages and other religious/social

functions and (iv) For providing civic amenities during other social, political, cultural

and industrial functions of purely temporary nature etc. The fixed charges and

minimum energy charges have been proposed on per day basis taking into account

the limited period for which these connections are sought. The proposal for

fixed/demand and energy charges is nearly two times the highest slab of the energy

and fixed/demand charges applicable to consumers with permanent connection

under that tariff category. This has been done to account for the increased cost of

power purchase and inability of licensee to recover the same under FPPCA charges

from temporary consumers at subsequent date. No FPPCA charges are proposed to

be levied on these categories of consumers due to the temporary nature of the

connections. The maximum period for which these connections can be availed is

proposed to be six months from existing level of 1 year. The other terms and

conditions would be as applicable to the respective tariff category.

Commission’s view

8.4.5 The Commission is of the view that there is already provision for providing temporary

connections under the existing consumer/ tariff categories as per Clause 4.63 of the

BERC (Bihar Electricity Supply Code), 2007.

Accordingly, the proposal of the BSEB for creation of a separate tariff subcategories

for temporary installations under the above mentioned tariff categories is being

rejected.


8.4.6 NDS-IV: BSEB has proposed introduction of new sub-category (NDS-IV) under the

existing NDS tariff category for electricity used for the purpose of exclusive

commercial advertisements for hoardings and other similar connections by/through

advertising agencies. This category has been proposed due to its separate & distinct

nature of use of electricity and need to regulate such category of consumers in

appropriate way.

Commission’s view

8.4.7 The Commission is of the view that efficacy and implication of the separate tariff

category exclusively for commercial advertisements/ hoardings needs to be analysed



in detail before any decision is taken for inclusion of a separate sub-category. The

BSEB has not even projected the number of consumers, connected load and sales

separately for the proposed sub-category for enabling analysis of separate tariffs for

such sub-category.

Therefore, the proposal for creation of a separate sub-category exclusively for

commercial advertisements/ hoardings is being rejected. The BSEB is directed to

propose such changes in tariff categories only after providing detailed information

required for undertaking assessment of the efficacy of such measures.


8.4.8 LTIS (Demand Based Tariff): All new consumers under Three Phase LTIS shall

come under this tariff category only. Corresponding changes (necessitated on

account of merger of LTIS-I and LTIS-II) have been proposed for this tariff

subcategory. BSEB would like to encourage its consumers to opt for this sub-

category as this would do away with the requirement for computation of connected

load. The Consumer would be required to pay according to demand imposed on the

system rather than on the basis of connected load. However, existing consumers

under LTIS-I & LTIS-II tariff shall have option to continue under LTIS category.

Commission’s view

8.4.9 Firstly, the LTIS-I and LTIS-II represent different sizes of industrial consumer with

different consumption pattern, loading requirement and paying capacity. Thus, the

tariff for the two categories cannot be merged unless the tariff implication of such

merger on the consumers pertaining to the two categories is analysed in detail.

Hence the Boards proposal is being rejected.

Change in existing terms and conditions of tariff f or LT and HT consumers


8.4.10 LT Consumers - Change in nomenclature of demand bas ed tariff category:

BSEB has proposed change in the nomenclature of demand based tariff category

from sub-category name (A) to sub-category name (D). It’s easy to identify category

with nomenclature of ‘D’ for demand based tariff.

Commission’s view



8.4.11 The Commission accepts the change in nomenclature for denotation of demand

based tariff as proposed by the Board.


8.4.12 Monthly Minimum Charges: BSEB has proposed increase in the MMC for DS-I

(Metered), DS-II (Metered), DS-III (Metered), LITS (D) and IAS-I (Metered) keeping in

view the increased hours of supply and increase in specific consumption of these

consumer categories. This has also been done to ensure reasonable recovery of

fixed charges incurred by BSEB which is not being recovered fully. For FY 2012-13,

BSEB has proposed total ARR of Rs. 7898.13 Crores out of which Rs. 2600.51

Crores are of fixed nature while Rs. 5297.61 Crores will be used for power purchase

and fuel cost of own generation. Currently, BSEB is able to recover only 27% & 40%

of fixed costs from demand/fixed charges based on the existing tariff & proposed

tariff respectively. In such scenario, it is very much necessary to levy MMC on

consumers so that BSEB can at least recover its fixed cost.

Commission’s view

8.4.13 The Commission is of the view that since two-part tariff has already been introduced

in almost all consumer categories (except KJ, DS-I and IAS-I) in the State, there is no

need for monthly minimum charges to be levied, provided the BSEB is able to

efficiently undertake metering/ billing activities. The Commission urges the BSEB to

meter all un-metered consumers on priority and bill them on actual consumption as

per applicable tariff without depending on Monthly Minimum Charges. The

Commission intends to gradually phase out the MMC in all consumer categories in its

future tariff orders.


8.4.14 Option to change to HTS-I category: BSEB has proposed that LTIS and PWW

consumers having connected load of more than 79 HP to 99 HP may avail supply

under HTS-I category at 11 kV. By doing so, both the parties (consumer and BSEB)

will get benefit. Consumers receive better quality and reliability of supply whereas

BSEB is able to control its losses and system overloading.

Commission’s view



8.4.15 The Commission is not clear on the intent of the BSEB in its proposal. The Option for

billing under HTS category for LTIS-II and PWW consumers with a connected load

between 79 HP to 99 HP has already been provided for in the previous tariff order for

FY 2011-12.


8.4.16 The LT terms and conditions of tariff require LT consumers whose connected load

includes motors of 3 HP and above to install shunt capacitors at the motor terminals

for maintaining power factor at 90% and above. BSEB proposes to exclude domestic

consumers and single phase non-domestic consumers from the applicability of this

clause of the tariff condition as such consumers do not have the knowledge to

compute the capacity of capacitor required and wherewithal to maintain required

capacitors.

Commission’s view

8.4.17 The Commission is of the view that installation of capacitors of requisite rating/

capacity is essential for maintaining good power factor and a stable and healthy

distribution network. Further, the aggregate impact of installations having motors of 3

HP and above would be immense on the system.

It is the duty of the Board to educate and create awareness amongst its consumers

for making such initiatives a success. In view of this the Boards proposal is rejected

and the Board is directed to take necessary steps for effective implementation of

installation of capacitors of requisite ratings at consumer installations.

The installation of shunt capacitors shall be done in accordance with in Chapter 6 of

the BERC (Bihar Electricity Supply Code), 2007. This being a matter related to the

Supply Code, in case any amendment is felt necessary by the Petitioner, the same

may be taken up separately.


8.4.18 Applicable to both LT and HT Consumers - Delayed Pa yment Surcharge (DPS):

As per the existing terms and conditions, the consumer is required to pay surcharge

on the entire principal amount even if the consumer has made partial payments.

BSEB has proposed to replace the word “principal” with “balance” so that the

consumers who pay partial bill amount will be required to pay DPS on the remaining



amount and not the entire amount. This would incentivize consumers to pay their bills

(even partial) and help BSEB in improving its cash collection. This change is being

proposed for both LT and HT consumer categories.

Commission’s view

8.4.19 The charging of DPS shall be done in accordance with Clause 10.12 of the BERC

(Bihar Electricity Supply Code), 2007. This being a matter related to the Supply

Code, in case any amendment is felt necessary by the Petitioner, the same may be

taken up separately however the Commission has considered and modified in the

terms and conditions of supply.


8.4.20 Additional of clause in Defective/ Damaged/ Burnt m eters supply: A new clause

has been added in the tariff schedule for defective/ damaged/ burnt meters supply as

provided under:

“In case of newly installed meter of a consumer becoming defective/ damaged/ burnt

after installation of meter and consumption of last 12 months is not available, the

consumer shall be billed provisionally on the basis of MMC or the average

consumption computed on the basis of past consumption whichever is higher. The

final billing of the consumer for the period of provisional billing shall be done on the

basis of average meter reading of the consumer for the subsequent 12 months after

installation of healthy meter.”

Commission’s view

8.4.21 The Commission has considered the proposal of the Board. The relevant terms and

conditions shall be modified in the tariff schedule for LT consumers.


8.4.22 Interest on Advance Payment: BSEB proposes to introduce interest on advance

payment made by consumers on outstanding balance on month to month basis at

Bank rate notified by RBI from time to time. This will encourage consumers to pay

bills in advance which will help BSEB in better and timely recovery of revenues. This

is proposed in line with clause no. 7.15 (2) of Bihar Electricity Supply Code.

Commission’s view



8.4.23 The clause 7.15 (2) of the BERC (Bihar Electricity Supply Code), 2007 is in respect

of security deposit. In view of the same the Petitioners proposal is not clear in its

intent and is being rejected as of now. The Petitioner may take up the matter

separately with the Commission.


8.4.24 Grace Period: The provision for a grace period of 10 days for payment of bills has

been done away with. The same has been proposed as the implementation of grace

period not only distorts the revenue cycle of the BSEB but also causes problems in

implementation of tariff as the billing software of BSEB does not have provision for

the same.

Commission’s view

8.4.25 The Commission has introduced the grace period only after detailed deliberations

with all stakeholders. Implementation is IT system related issue and can be

effectively handled through appropriate interventions. Accordingly, the proposal of

the Board is being rejected.


8.4.26 Penalty for bounced cheque: BSEB has been encouraging consumers to pay bills

through cheques as well. However it has been observed that some consumers have

been misusing this facility. To curb this intentional misuse of this facility it is proposed

that in case the cheque given by the consumer against the energy bills is

dishonoured by the bank then a penalty will be payable by such consumer. Action

against such consumers shall be taken as per clause 7.4 (h) and 10.9 of Bihar

Electricity Supply Code.

Clause 7.4 (h) and 10.9 of BERC which provides inter-alia

“7.4….. (h) After a minimum period of seven days, incase of dishonouring of the

cheque by the Bank (non-encashment of cheque)”

“10.9 In case of non-realisation of cheque, the licensee shall have right to increase

the security deposit from the consumers. The licensee shall also have the right to

take steps such as levying cheque dishonour charges or initiating other actions as

per law besides insisting on future payment by demand draft or by cash.”



Commission’s view

8.4.27 The clause 10.9 of the BERC (Bihar Electricity Supply Code), 2007 is in respect of

non-realisation of cheque. In view of the same the Petitioner’s proposal is being

rejected as of now. The Petitioner may take up the matter separately with the

Commission.


8.4.28 Supply Premium payable by consumers in notified are as: BSEB has proposed to

procure additional power purchase in FY 2012-13 to improve the supply situation in

Bihar. As directed by the Commission in its Tariff for FY 2011-12, BSEB has

proposed a Supply Premium to be payable by consumers who receive additional

hours of supply. It is proposed that BSEB intends to supply continuous power atleast

for 600 hours in a month to all LT consumers except Kutir Jyoti & Agricultural and

HTS-I consumers who lie in such areas. The continuous supply mean normal supply

excluding the duration of grid failure, plant failure of power supplier, any force

majeure condition, scheduled shut down, emergent breakdown and restriction of

power supply by the Commission under section 23 of Electricity Act, 2003 will be

required to pay 10% supply premium on demand/ fixed and energy charge and in

MMC.

Which provides inter-alia

“23 Directions to Distribution Licensee: if the appropriate Commission is of the

opinion that it is necessary or expedient so to do for maintaining the efficient supply,

securing the equitable distribution of electricity and promoting competition, it may, by

order, provide for regulating supply, distribution, consumption, or use thereof.”

Areas to which BSEB intends to supply electricity close to 600 (six hundred) hours

will be notified by BSEB and the proposed Supply Premium will be levied after such

notification.

Commission’s view

8.4.29 The Commission has already approved charging of premium tariff in notified areas

where the Board is supplying close to 24 hours of supply. The Commission is of the

view that it may be ensured that transmission and distribution network including other

infrastructure required to ensure close to 24 hours supply to the notified areas are



strengthened. Strenghthening of infrastructure may include interalia strengthening /

replacement of weak conductors, transformers and other electrical equipments

installed for supplying electricity to the notified areas, provision of appliances and

sparesand keeping technical teams ready round the clock for rectifying defects

leading to disruption of supply in these areas. A few telephones should be kept

operational for each notified area which should be manned round the clock for

receiving and responding to the complaints. These telephone numbers should be

widely publicised in the newspapers for the information of general public. BSEB must

ensure these steps for ensuring close to 24 hours supply of electricity to the notified

areas.

The Commission is not in favour of allowing any relaxation to the supply continuity

measure approved for charring of such premium tariff. Accordingly, the proposal of

the petitioner for levy of 10% premium on the basis of 600 hours of supply per month

is being rejected and the Board has to supply close to 24 hours with the conditions as

stated in the above para.


8.4.30 Voltage surcharge: BSEB has proposed voltage surcharge on applicable energy

and demand charges for consumers which receive supply at voltage levels lower

than the applicable voltage levels. BSEB would like to penalize the consumers to

receive supply at lower voltage levels. Receiving supply at lower voltage level is not

beneficial to both consumers and BSEB. By taking supply at appropriate voltage

level, Consumers receive better quality and reliability of supply whereas BSEB is

able to control its losses (transformation and I2R losses) and system overloading.

The surcharge will be symmetrical and will be 7.5% of the energy and demand

charges applicable to tariff category to which the consumer belongs. This surcharge

shall be applicable to:

• DS consumer category

• NDS consumer category

• LTIS consumer category

• PWW consumer category

• HTS - I and HTS - II consumer categories.

Commission’s view



8.4.31 The Commission in this tariff order has directed the Board to get a detailed Voltage

wise Cost of Supply (CoS) study conducted. The Commission shall make the tariffs

reflective of the voltage wise cost of supply on completion of such study. Therefore,

as of now, the above proposal of the Board is rejected.


8.4.32 Accounting of Partial payment: BSEB has proposed following order of priority for

accounting of the partial payment made by the LT and HT Consumers

• Statutory taxes and duties

• Additional Security

• DPS on arrears

• Principal arrears

• Current bill

Commission’s view

8.4.33 The Commission takes cognizance of the issue raised by the Petitioner. The relevant

terms and conditions shall be modified in the tariff schedule.


8.4.34 Applicable to HT Consumers - Reclassification of co ntract Demand: As per the

existing tariff category classification, the HT consumer as per its contract Demand

falls under the following tariff category:

• HTS- I: Consumers with contract demand between 75 KVA and 1500 kVA

• HTS-II: Consumers with contract demand between 1000 kVA and 10000 kVA

• HTS-III: Consumers with contract demand of 7.5 MVA

As evident from the above there is a significant overlap in the allowable contract

demand. A consumer with 1000 kVA can seek connection both under HTS-I and

HTS-II consumer categories. Similarly a consumer with contract demand of 7.5 MVA

can seek connection both under HTS-II and HTS-III tariff categories. To remove this

anomaly BSEB proposes following changes to the voltage range for applicable

contract demand:

• HTS- I: Consumers with contract demand between 75 KVA and 1500 kVA



• HTS-II: Consumers with contract demand between 1501 kVA and 10 MVA

• HTS-III: Consumers with contract demand of more than 10 MVA

Further it is also proposed that the consumers who get affected because of this

reclassification of contract demand can continue to avail supply at existing voltage

levels.

Commission’s view

8.4.35 The Commission is of the opinion that in order to assess the efficacy and implication

of the proposed reclassification of contract demand for the above mentioned

categories needs to be analysed in detail before any such decision is taken. The

BSEB has not even projected the number of consumers, connected load and sales

separately for the proposed reclassified categories for enabling analysis of separate

tariffs for such reclassifications.

Therefore, the proposal for reclassifications under the said categories is being

rejected. The BSEB is directed to propose such changes in tariff categories/

classifications only after providing detailed information required for undertaking

assessment of the efficacy of such measures.


8.4.36 MMC for HTS-I, HTS-II & HTS-III: BSEB proposes to restore minimum base energy

charge calculation on monthly basis from revised methodology in last Tariff Order for

FY 2011-12 dated 1st June, 2011. BSEB is purchasing additional power supply to

fulfil the requirement of the consumers and hence it is necessary that consumer

avails minimum level of energy during the month. The Hon’ble Commission has

introduced calculation of minimum base energy charge on annul basis in view of the

shortage in the power supply. Now, BSEB is purchasing additional power to meet

requirement of the consumers and giving enhanced power supply to all such

consumers. BSEB should be compensated for non-availment of supply by the

consumers. This has also been done to ensure reasonable recovery of fixed charges

incurred by BSEB which is not being recovered fully. For FY 2012-13, BSEB has

proposed total ARR of Rs. 7898.13 Crores out of which Rs. 2600.51 Crores are of

fixed nature while Rs. 5297.61 Crores will be used for power purchase and fuel cost

of own generation. Currently, BSEB is able to recover only 27% & 40% of fixed costs

from demand/fixed charges based on the existing tariff & proposed tariff respectively.



In such scenario, it is very much necessary to levy MMC on consumers so that BSEB

can at least recover its fixed cost. Hence, it has become necessary for BSEB to seek

restoration of minimum base energy charge calculation on monthly basis.

Commission’s view

8.4.37 The Commission is of the opinion that since two-part tariff has already been

introduced for HTS consumers in the State, there is no need for monthly minimum

charges to be levied, provided the BSEB is able to efficiently undertake metering/

billing activities.

The Commission has done away with MMC on HTS consumers in this tariff order for

FY 2012-13. The Commission intends to gradually phase out the MMC in all

consumer categories in its future tariff orders.


8.4.38 Power factor rebate: BSEB has proposed changes in the existing provision for levy

of power factor rebate. The consumer would be required to maintain average monthly

power factor of the supply between 0.90 and 0.95. The consumer will be entitled to

receive rebate at rates indicated in the table below:

Range of power factor Proposed power factor rebate

For each increase of 0.01 in power factor above 0.95

0.5 (zero point five) percent on demand and energy charges (Actual recorded)

However if the monthly power factor falls below 0.90 the existing provisions for levy

of surcharge will be applicable;

Commission’s view

8.4.39 The Petitioner has not provided any reasoning for the above proposed changes in

the power factor rebate being allowed to consumers. In view of the same the

proposal is rejected.


8.4.40 Transformer Capacity: BSEB proposes insertion of additional clause in transformer

capacity. The proposed change is as shown below:



“Such cases shall be dealt as per the provisions of Bihar Electricity Supply Code,

2007. The contract demand of such HT consumer, except RTS consumers, shall be

revised to 2/3 of the transformer capacity. For RTS consumer, contract demand shall

be revised to 1/ 2 of the transformer capacity.”

Commission’s view

8.4.41 The Commission is of the opinion the contract demand cannot be directly linked with

the transformer capacity and consumers must be provided with enough flexibility to

install transformers in view of their expected future demand. Since the metering for

such connections is already being done on the HT side, the consumer bears the

excess burden of technical losses and does not harm the Board in any way. The

board may avoid any potential misuse by improving upon its metering system and

keeping increased vigil on such consumers. Accordingly, the prayer of the Board

regarding linking of contract demand to the capacity of the transformer installed for

HT connections is being rejected.


8.4.42 Cap on Overall Rebates: BSEB proposes cap on overall rebates admissible to

consumer at 4% to limit the revenue outflow. This will help in reduction of revenue

gap.

Commission’s view

8.4.43 The Petitioner has not provided any reasoning for the above proposed changes in

overall rebates being allowed to consumers. It is not understood that if any rebate is

being provided in lieu of efficiency levels being maintained by consumers or the

voltage at which he is drawing supply and is reflective of the actual cost of supply to

such consumers why the same should be withdrawn or limited. In view of the same

the proposal is rejected.


8.4.44 Withdrawal of rebate: In order to incentivise HT consumers for timely payments of

their bills. It is proposed that the consumer will not be entitled to claim any rebate

under any head in case of default of payment by the due date.

Commission’s view



8.4.45 There is already the provision of Delayed Payment Surcharge for encouraging

consumers to pay their bills on time. The rebates being offered may be due to

efficiency levels or voltage at which any such consumer is connected and is therefore

essential in passing on the benefits of lower cost of supply to such consumers and

the same is independent of the timeliness of his payment of electricity bills.

Therefore, the proposal of the Petitioner is rejected.


8.4.46 Miscellaneous & General Charges: BSEB has proposed revisions in existing

miscellaneous charges in view of increase in cost of material and labour.

Commission’s view

8.4.47 The Commission takes cognizance of the issue raised by the Petitioner. The relevant

miscellaneous and general charges shall be modified in the tariff schedule.


8.4.48 Charges for Tatkal Connection: BSEB in the past has received numerous requests

from its consumers for providing tatkal connections. In view of this facility demanded

by its consumers, BSEB proposes this scheme under which all consumer categories

other than High Tension and Railway may avail benefit of this scheme. The General

and Miscellaneous charges for the Tatkal connection will be 2 (Two) times of the

charges approved under the head general and miscellaneous charges. The

connection under this scheme shall be released by BSEB in half the time limit

prescribed by the Commission in the Supply Code from the date of completion of

prescribed procedural formalities and payment of applicable fees and charges. In

case BSEB fails to release connection within this time limit, BSEB will refund the

additional amount claimed to the consumer in the first energy bill.

Commission’s view

8.4.49 The Commission approves the Board’s proposal regarding the release of tatkal

connection to all consumer categories other than High Tension and Railway with the

following conditions:

• Additional option to the consumers



• The Tatkal connections shall be released by BSEB in half the time limit

prescribed in the Supply code for that consumer category.

• Two (2) times of the following charges approved under head miscellaneous and

general charges will be taken from the consumers willing to avail tatkal

connection:

o Application fees for new connection, and;

o Supervision, labour and establishment charge for service connection

• In case BSEB fails to release connection within this time limit, BSEB will refund

the additional amount claimed to the consumer in the first energy bill.


8.4.50 Development charges & one time application processi ng charge: BSEB has

proposed development charges as compensation for time and effort spent by it in

processing the application submitted by prospective consumers for release of new

connections. All applicants for new connections under different tariff categories will

be required to pay one time application processing charges in lumsump in order to

generate additional source of income to BSEB to bridge the revenue gap.

Commission’s view

8.4.51 The Commission is of the opinion that the Board is obliged to supply power under

Section 43 of the Electricity Act’ 2003 and therefore charging of Development

charges is not justified and proper. The Commission appreciates that the Board

needs to do a lot to improve quality of service to the consumers particularly in respect

of release of new connections. Accordingly, the proposal of the Petitioner related to

charging development charges and one time application processing charges to the

consumers is being rejected.



8.5 Category/Sub-category wise changes proposed by BSEB and approved by the

Commission are discussed in respective sections.

Domestic Service (DS)


8.5.1 BSEB has proposed the following changes for this consumer category:

• Supply premium payable by consumers in notified areas

• To charge Kutir Jyoti Consumer having consumption in any month in excess of 30 units at mentioned tariff rates. However, if the maximum consumption upto 360 units is detected during period of preceding 12 months, such consumers will then be treated as DS-I or DS –II consumer as the case may be.

• Provisions of tariff slabs for KJ consumers for consumption of more than 30 units

• Introduction of fixed charge for DS- I (Metered)

• Change in Fixed Charge for KJ – Metered, DS - II consumers

• Change in MMC

Commission’s view

8.5.2 The proposal for levy of premium for supply in notified area has been dealt earlier in

this chapter and is not being repeated here. The Commission does not approve the

proposal for change in consumption slab and changes in MMC are not accepted.

Introduction of fixed charge for DS-I consumer metered category could result in

significant fixed financial liability on small rural consumer and is therefore not being

allowed. The proposed change in fixed charge for Domestic Service category is not

being approved. The Commission for the continuity of tariff structure would like to

continue with the existing methodology for computation of fixed charges.

Non-Domestic Service (NDS)






• Introduction of fixed charge for NDS- I (Metered)

• Change in coverage of NDS- III category – introducing applicability to ‘sanctum- sanctorum of religious places’ also.

Commission’s view


this chapter and is not being repeated here. Introduction of fixed charge for NDS-I

consumer metered category could result in significant fixed financial liability on small

rural consumer and is therefore not being allowed.. The Commission for the

continuity of tariff structure would like to continue with the existing methodology for

computation of fixed charges. The Commission does not approve the change in

coverage of NDS –III category.

Irrigation & Agricultural Service (IAS)


8.5.5 BSEB has proposed following changes for this consumer category:

• Change in MMC

Commission’s view

8.5.6 The Commission does not approve the proposed changes in MMC for IAS category.

Low Tension Industrial Service (LTIS)




• Merging of LTIS-I and LTIS- II consumer categories

• All new consumers under Three Phase LTIS shall come under LTIS (Demand based categories)

• Option to change to HTS-I category

• Change in MMC.



Commission’s view


this chapter and is not being repeated here. The Commission does not approve the

suggested merging of LTIS – I and LTIS – II sub-categories. The issues related to

consideration of all new consumers under three phase LTIS (Demand Based Tariff)

category and option to LTIS consumers having load more than 79 HP and 99 HP to

avail supply under HTIS – I at 11 kV have been dealt earlier in this chapter.

Public Water Works (PWW)




• Option to change to HTS-I category

Commission’s view


this chapter and is not being repeated here. The petitioner’s proposal that PWW

consumers having load more than 79 HP and 99 HP may avail supply under HTIS – I

at 11 kV has been dealt earlier in this chapter. .

Street Light Services (SS)




Commission’s view


this chapter and is not being repeated here.

HTS-I, HTS-II, HTS-III and HTSS






• Reclassification of contract Demand

• Increase in HTSS surcharge to 7.5% instead of 5% on demand and energy charges

• Change in MMC

Commission’s view

8.5.14 The proposal for levy of premium for supply in notified area and reclassification of

contract demand has been dealt chapter in this chapter. The proposed change

related to HTSS surcharge and MMC for HTS –I, HTS – II and HTS – III categories

has been dealt in the tariff schedule for HT supply.

Railway Traction Services (RTS)



• Introduction of rebate for RTS tariff for availing supply at voltages higher than 132 kV

• Change in Load factor to 50% for calculation of minimum base energy

• Penalty to RTS if in any month the recorded maximum demand of the consumer exceeds 110% of the contract demand

Commission’s view

8.5.16 The Board has proposed rebate for RTS tariff for availing supply at higher than 132

kV therefore this proposal of the Board is accepted by the Commission. However, the

Commission does not approve others changes proposed by the petitioner related

Railway Traction Services.

Amendment to Supply Code

8.5.17 The Commission notified amendment in Bihar Electricity Suppply code, 2007 vide notification no. BERC- Regulation 6/06 (Part – IV- I) -02 dated 29.03.2012 where in the maximum contract demand at diifferent supply voltage have been revised. The Commission has considered the relevant amendments in this Tariff Order for FY 2012-13.



8.6 Approved tariff categories for FY2012-2013

8.6.1 The approved tariff categories / sub-categories along with different slabs are given

below:

S.No. Category

1 Domestic Service (DS)

1.1 Kutir Jyoti (KJ)/ BPL Connection

(i) Kutir Jyoti / BPL (Rural)

Unmetered

Connected load: upto 60 Watt

Metered

Connected load: upto 60 watt

(ii) Kutir Jyoti / BPL (Urban)

Metered only

Connected load: upto 100 watt

1.2 Domestic - I (Rural)

Unmetered

Connected load: Upto 2 kW

Metered

Connected load: upto 2 kW

1.3 Domestic-II (DS-II)– Metered only

Urban

Single phase – upto 7 kW

Three phase – 5 kW and above

Rural

For connected load above 2 kW

1.3.1 Domestic II (DS-II) (D) – OPTIONAL

Demand based tariff

Contract demand between 5 kW and 70 kW

1.4 Domestic-III – Urban - Metered

Registered societies for their residential colonies , having not less than 15 houses/ flats in the colony. Residential colonies/ multistoried residential



S.No. Category complexes taking load in bulk at a single point wit h a minimum load o f 2 kW per flat/ house and maximum total load upto 7 0 kW.

2 Non-Domestic Services (NDS)

2.1 Non- Domestic Services - I : Rural

Unmetered


Metered


2.2 Non- Domestic Services - II: Urban and Rural A bove 2 kW

Metered

Connected load: upto 70 kW for urban consumers & above 2 kW for Rural consumers

2.2.1 Non-Domestic Services- II (D) – OPTIONAL

Demand based tariff


2.3 Non- DomesticServices - III: Metered (Places of worship etc.)

Connected Load: Upto 30 kW

2.3.1 Non-Domestic III (D) – OPTIONAL

Demand based tariff


3 Irrigation and Agricultural Service (IAS)

3.1 IAS - I

(i) Unmetered

Private tube wells including bonafide agricultural Operations.

(ii) Metered

Private tube wells including bonafide agricultural Operations and hatcheries, poultries and fisheries (Fish ponds)

3.2 IAS-II : Connected Load: Upto 100 HP

(i) Unmetered

(ii) Metered

4 Low Tension Industrial Services (LTIS)

4.1 LTIS-I: Upto 25 HP



S.No. Category

4.1.1 LTIS-I (D) – OPTIONAL

Demand based tariff - Contract demand upto 15 kW

4.2 LTIS-II: Above 25 HP upto 99 HP

4.2.1 LTIS-II (D) – OPTIONAL

Demand based tariff - Contract demand above 15 kW and upto 60 kW

5 Public Waterworks (PWW) upto 99 HP

6 Street Light Services

6.1 SS-I Metered Supply

6.2 SS-II Unmetered Supply

7 High Tension Supply

7.1 HTS-I – 11 /6.6 kV supply

For installations having contract demand of 75 kVA to 1500 kVA.

7.2 HTS-II – 33 kV supply

For installations having contract demand of 1000 to 10000 kVA

7.3 HTS –III - 132 kV supply

For installations having contract demand of 7.5 MVA and above

7.4 HTSS - 33/11 kV supply

Specified Services for Induction furnaces and allied loads.

8 Railway Traction Services (RTS)

RTS (At 132 kV supply or above)


9 Temporary Supply (LT & HT)

10 Seasonal Supply



8.6.2 The approved Tariff Schedule which shall be effective from 1st April 2012 is given in

Appendix –I.

Part A - Tariff Schedule for Low Tension Supply

Part B - Tariff Schedule for High Tension Supply

Part C - Miscellaneous and General Charges

The Board has proposed to revise the miscellaneous and general charges for FY

2012-13. The existing applicable miscellaneous and general charges have been

appoved in Tariff Order for FY 2011-12. The Wholesale price Index has increased.

The Miscellaneous and General Charges, which are essentially driven by the labour

and material costs have undergone significant amount of increase and the present

rates do not reflect the actual cost. So, the Commission finds it proper to revise the

General and Miscellaneous charges. The General and Miscellaneous charges as

approved by the Commission are provided in part C of this chapter. These charges

will be effective from the date of the applicability of new approved retail tariff.

Part D - Fuel and Power Purchase Cost Adjustment

FPPCA charges will be based on the formula given by the Commission in the Part D

of this chapter. The formula will be applied on monthly basis by BSEB after seeking

the regulatory approval.



Appendix- 1

8.7 TARIFF SCHEDULE FOR RETAIL TARIFF RATES AND TER MS AND

CONDITIONS OF SUPPLY FOR FY 2012-13

(Effective from 01 st April, 2012)

PART - A: LOW TENSION SUPPLY

System of supply: Low Tension – Alternating Current, 50 cycles

Single Phase supply at 230 Volts

Three Phase supply at 400 Volts

The tariffs are applicable for supply of electricity to L.T consumers with a connected

load upto 70 kW for domestic and non-domestic category, upto 99 HP for industrial

(LTIS) and for public water works (PWW) category and upto 100 HP for irrigation

category.

– Single Phase supply upto 7.0 kW

– Three Phase supply 5.0 kW and above

CATEGORY OF SERVICE AND TARIFF RATES

1.0 DOMESTIC SERVICE

Applicability

This tariff is applicable for supply of electricity to domestic purposes such as lights,

fans, radios, televisions, heaters, air-conditioners, washing machines, air-coolers,

geysers, refrigerators, ovens, mixers and other domestic appliances including motor

pumps for lifting water for domestic purposes. This is also applicable to the common

facilities in the multistoried, purely residential apartments, buildings.

1.1 Kutir Jyoti Connection (KJ) – Rural / Urban

This will be applicable to (i) all huts (Kutir) and dwelling houses of rural and urban

families below the poverty line (BPL) (ii) houses built under schemes like Indira Awas

Yojana and similar such schemes for BPL families.



i) Hut (Kutir) means a living place with mud wall and thatched roof or house built

under Indira Awas Yojana and other similar schemes for BPL families which

shall not exceed 200 Sq ft area.

ii) The total connected load of Kutir Jyoti connection in a rural area should not

exceed 60 watts and for an urban connection it should not exceed 100 watts

and maximum consumption 30 units per month shall be allowed.

iii) Use of CFL both in rural areas and urban areas should be encouraged.

iv) In case it is detected that the norms prescribe d in para (i) and (ii) above

are violated, the Kutir Jyoti Tariff shall immediat ely become inoperative

and rates applicable to DS – I and DS- II category as the case may be, with

appropriate charge shall apply in such cases.

1.2 Domestic Service – I (DS – I)

This is applicable to domestic premises in rural areas for a load upto 2 kW not

covered by areas indicated under DS-II and not being fed from urban / town feeders.

1.3 Domestic Service – II (DS – II)

This is applicable for domestic premises in urban areas covered by Notified area

committee / Municipality / Municipal Corporation / Development Authority / All District

and Sub divisional towns / Block Head Quarters / Industrial areas /Contiguous Sub

urban areas and also areas getting power from Urban / Town feeders for single

phase supply for load upto 7 kW and three phase supply for load of 5 kW and above.

Rural consumers having sanctioned load above 2 kW will come under this category.

Consumer has the option to take single -phase or three-phase supply connection for

a load of 5KW.

1.4 Domestic Service – III (DS – III)

This is applicable for registered societies, for their residential colonies, having not

less than 15 houses / flats in the colony. Residential colonies / multistoried residential

complexes taking load in bulk at a single point with a minimum load of 2 kW per flat /

house and maximum total load upto 70 kW.



TARIFF RATES

1.0 Domestic Service

Sl. Category of consumer Fixed charge (Rs.)

Energy charge (Paisa/ Unit.)

1.1 Kutir Jyoti - BPL Consumers

(i) K.J. (Rural) - (Consumption upto 30 units per month)

Unmetered Rs.50 /

connection / per month

X

Metered X 150 Ps/ unit

Subject to Monthly Minimum Charge of Rs.40 per month per connection.

(ii) K.J. (Urban) (consumption upto 30 units per month)

Metered only X

180 Ps/ unit

Subject to Monthly Minimum Charge of Rs.50 per connection per month.

Fuel and Power Purchase cost Adjustment (FPPCA) charges as applicable will be

charged extra however the same shall be provided by the State Government support

to consumers and will not be recovered from consumer.

Sl. Category of consumer

Fixed Charge (Rs.)

Energy Charges

Consumption in a month (Units)

Rate P/unit

1.2 DS – I : Connected load: Upto 2 kW only

Unmetered Rs.150/connection

/ per month X X

Metered

X

First 50 units 180

51-100 units 210

Above 100 units 250

X

Subject to Monthly Minimum Charge (MMC) of

1st kW – 40 units per month 2nd kW – 20 units per month


charged extra.




Fixed charge (Rs.)

Energy charges


Rate Ps/unit

1.3 DS – II (Metered) Single phase

Up to 7 kW First kw-Rs.50/ month/connection

Addl. kW-Rs.15 per kW or part thereof per month.

1-100 units

101-200 units

201-300 units

Above 300 units

260

320

385

490

Three Phase 5 kW and above

5 kW-Rs.230/ month/connection

Addl. kW-Rs.15 per kW or part thereof per month

Subject to monthly minimum charge for

1st kW - 40 units per month Additional kW or part thereof - 20

units per month

Fuel and Power Purchase Cost Adjustment (FPPCA) charges as applicable will be

charged extra.

Premium tariff will be charged as applicable in notified area.

OPTIONAL

Domestic - DS-II (D) – Demand Based

All consumers under DS-II category with 3 phase meter connection with contract

demand between 5 kW and 70 kW opting for demand based tariff shall be required to

pay at the rates indicated below:


Demand charge (Rs./kW/month)

Energy charges


Rate Ps/unit

1.3.1 DS-II (D)-(OPTIONAL) Demand Based Tariff Contract demand

of 5 kW to 70 kW Rs. 60/kW per month or part thereof on recorded demand or contract demand whichever is higher.

1-100 units

101-200 units

201-300 units

Above 300 units

260

320

385

490





Energy charges


Rate Ps/unit

Subject to (i) Monthly minimum charge of 50 units per month/kW on recorded demand or

contract demand, whichever is higher. (ii) If in any month the recorded maximum demand exceeds 110% of the contract

demand, that portion of the demand in excess of the contract demand will be billed at twice the normal rate.


charged extra.



Fixed charge (Rs.)

Energy charges


Rate (Ps/unit)

1.4 DS – III (Metered) Rs. 55/- kW/

month All units 385

Subject to monthly minimum charge For 1st kW – 40 units / flat per month Additional kW or part there of– 20

units/flat per month

FPPCA as applicable will be charged extra.


2.0 NON-DOMESTIC SERVICE (NDS)

Applicability

This is applicable for supply of electrical energy for non-domestic consumers having

sanctioned load upto 70 kW, using electrical energy for light, fan and power loads for

non – domestic purposes like shops, hospitals, nursing homes, clinics, dispensaries,

restaurants, hotels, clubs, guest houses, marriage houses, public halls, show rooms,

centrally air-conditioning units, offices, commercial establishments, cinemas, X-ray

plants, non – government schools, colleges, libraries and research institutes,

boarding / lodging houses, libraries, railway stations, fuel/oil stations, service

stations, All India Radio / T.V. installations, printing presses, commercial trusts,

societies, banks, theatres, circus, coaching institutes, common facilities in

multistoried commercial office / buildings Government and semi–government offices,

public museums and other installations not covered under any other tariff schedule.



Government educational institutions, their hostels and libraries, Government

hospitals and government research institutions and non – profitable government

aided educational institutions their hostels and libraries.

Non-profit recognized charitable cum public institutions.

Places of worship like temples, mosques, gurudwaras, churches etc. and burial /

crematorium grounds.

2.1 Non – Domestic Service (NDS-I)

Applicable to loads upto 2 kW in rural areas not covered by areas indicated under

NDS – II and not being fed from urban / town feeders.

TARIFF RATES – NDS - I

Fixed charge (Rs.) Energy charges


Rate ps/unit

2.1 NDS- I Unmetered Rs.200/connection/ per

month x X

Metered x 1-100 units 210 x 101-200 units 250 x Above 200 units 285 x Subject to monthly minimum

charge of 50 units per kW

FPPCA charges as applicable will be charged extra.

Premium tariff will be charged as applicable in notified area. .

2.2 Non – Domestic Service – NDS – II (Metered)

Applicable to loads upto 70 kW in urban areas covered by Notified Area Committees

/ Municipalities / Municipal Corporations / Regional Development Authorities / District

and Sub – divisional towns / Block headquarters / Industrial areas / contiguous sub

urban areas getting power from urban / town feeders, except those covered under

NDS-III.

Rural consumers having sanctioned load above 2 kW will also come under this

category.



TARIFF RATES – NDS - II

Sl. Fixed charge (Rs.) Per month

Energy charges Consumption in a month (Units)

Rate ps/unit

2.2 NDS - II Single phase

Rs.180 /kW or part thereof upto 7 Kw

1-100 units 470 101-200 units 500 Above 200 units 540

Three Phase Rs.200/kW or part thereof for loads of 5 kW and above

Subject to a monthly minimum charge of 50 units/kW or part thereof



OPTIONAL

2.2.1 Non-Domestic Service - NDS – II (D) – Demand Based

All those consumers under NDS-II with 3 phase supply and contract demand

between 5 kW and 70 kW opting for demand based tariff shall be required to pay at

the rates indicated below:



Energy charges


Rate ps/unit

2.2.1 NDS-II (D) – (OPTIONAL) Demand Based Tariff Contract demand


1-100 units

101-200 units

Above 200 units

470

500

540


contract demand, whichever is higher. (ii) If in any month the recorded maximum demand exceeds 110% of contract



charged extra.




2.3 Non-Domestic Service - NDS – III (Metered)

This is applicable for places of worship like temples, mosques, gurudwaras, churches

etc. and burial / crematorium grounds. If any portion of the premises is used for

commercial purposes, a separate connection shall be taken for that portion and NDS-

II tariff schedule shall be applicable for that service.

TARIFF RATES – NDS - III

Sl. Fixed charge (Rs.) Energy charges


Rate ps/unit

2.3 NDS - III Rs.80 /kW with minimum of

Rs.165 per connection / month For load upto 30 KW.

1-100 units 275

101-200 units 350

Above 200 units 430

Subject to monthly minimum charge of 50 units/kW or part thereof.

FPFCA charges as applicable will be charged extra.


OPTIONAL

2.3.1 Non-Domestic Service - NDS – III (D) – Demand Based

All those consumers under NDS-III category with 3 phase supply and with contract

demand between 5 kW and 30 kW opting for demand based tariff shall be required to

pay at the rates indicated below:


Demand charge (Rs./kW)

Energy charges


Rate Ps/unit

2.3.1 NDS-III (D) – (OPTIONAL) Demand Based Tariff Contract demand


1-100 units 101-200 units Above 200 units

275

350 430





Energy charges


Rate Ps/unit


contract demand, whichever is higher. (ii) If in any month the recorded maximum demand exceeds 110% of contract



charged extra.


3.0 IRRIGATION and AGRICULTURE SERVICE (IAS)

Applicability

This is applicable for supply of electrical energy for bonafide use for agricultural

purposes including processing of Agricultural Produce, confined to chaff - cutter,

thrasher, cane crusher and rice Huller when operated by the agriculturist in the field

or farm and does not include rice mills, flour mills, oil mills, dal mills or expellers.

This is also applicable to hatcheries, poultries (with more than 1000 birds) and

fisheries (fish ponds).

3.1 IAS - I

This is applicable for all purposes indicated above including private tube wells.

Tariff Rates

Unmetered Supply

Rural feeder - Rs.120 / HP per month

Urban feeder - Rs.145 /HP per month

Note: Hatcheries, poultries and fisheries are not c overed under unmetered

supply they have to be metered only.



Metered supply

Rural feeder

Energy Charges– 100 Ps/unit

Urban feeder


Subject to monthly minimum energy charges of

Rural feeder - Rs. 85/HP per month

Urban feeder - Rs.130/HP per month


charged extra however the same shall be provided by the State Government support

to consumers and will not be recovered from consumer.

3.2 IAS – II

This is applicable to state tube wells / state lift irrigation pumps / state irrigation

pumps upto 100 HP.

Unmetered Supply

Rural feeders - Rs.900 /HP per month

Urban feeders - Rs.1000/HP per month

Metered supply

Rural feeder


Urban feeder




Subject to a monthly minimum energy charge of 225 units /HP per month.


4.0 LOW TENSION INDUSTRIAL SERVICE (LTIS)

Applicability

This is applicable for supply of electricity to low tension industrial consumers with a

connected load upto 99 HP and below including incidental lighting for industrial

processing or agro – industries purposes, arc welding sets, flour mills, oil mills, rice

mills, dal mills, atta chakki, Huller, expellers etc.

4.1 LTIS-I (Connected load upto 25 HP)

TARIFF RATES for LTIS - I

Fixed charge (Rs.) Energy charges

Consumption in a month (Units) Rate (ps/unit)

4.1 LTIS-I (Connected load upto 25 HP) Rs.85/HP or part

thereof / per month All units 495

Subject to monthly minimum charge of 70 units/HP or part thereof.



OPTIONAL

4.1.1 LTIS-I (D) Contracted demand 5 kW to 15 kW - Demand Based Tariff

All those consumers under LTS-I category with 3 phase supply and with contract

demand 5 kW to 15 kW opting for demand based tariff shall be required to pay at the

rates indicated below:



Energy charges


Rate Ps/unit

4.1.1 LTIS-I (D) (Demand Based Tariff) (OPTIONAL)





Energy charges


Rate Ps/unit

Contract demand 5 kW to 15 kW

Rs. 170/kW per month or part thereof on recorded demand or contract demand whichever is higher.

All units

495

Subject to (i) Monthly minimum charge of 125 units per month/kW on recorded

demand or contract demand, whichever is higher. (ii) If in any month the recorded maximum demand exceeds 110% of

contract demand, that portion of the demand in excess of the contract demand will be billed at twice the normal rate.


charged extra.


4.2 LTIS-II (Connected load above 25 HP and upto 99 HP)

Sl. Fixed charge (Rs.)

Energy charges

Consumption in a month

(Units)

Rate

(Ps/unit)

4.2 LTIS-II (Connected load above 25 HP and upto 99 HP)

Rs.110/HP or part

thereof per month All units 530

Subject to monthly minimum charge of 100

units/HP or part thereof.



Consumers with a connected load above 79 HP and upto 99 HP have option to avail

power under LTIS / HTS category.



OPTIONAL

4.2.1 LTIS-II (D) (Contract demand above 15 kW and upto 70 kW – Demand

Based Tariff)

All those consumers under LTS-II category with 3 phase supply and with contract

demand above 15 kW and upto 70 kW opting for demand based tariff shall be

required to pay at the rates indicated below:

Category of consumer


Energy charges


Rate Ps/unit

4.2.1 LTIS-II (D) (Demand Based Tariff) (OPTIONAL)

Contract demand

above 15 kW and

upto 70 kW

Rs. 195/kW per

month or part

thereof on

recorded demand

or contract

demand

whichever is

higher.

All units

530

Subject to (i) Monthly minimum charge of 180 units per month/kW on recorded demand or contract

demand, whichever is higher. (ii) If in any month the recorded maximum demand exceeds 110% of contract demand,

that portion of the demand in excess of the contract demand will be billed at twice the normal rate.


charged extra.


5.0 PUBLIC WATERWORKS (PWW) (Connected load upto 99 HP)

Applicability

This is applicable to public water works, sewerage treatment plant and sewerage

pumping stations functioning under state government and state government under

takings and local bodies.



Sl. Fixed charge (Rs.) Energy charges


Rate (Ps/unit)

5.0 PUBLIC WATERWORKS (PWW) (Connected load upto 99 HP) Rs. 190/HP or part thereof

per month All units 650

Subject to monthly minimum charge of 165 units / HP or part thereof.



Consumers with a connected load above 79 HP and upto 99 HP have the option to

avail power under PWW / HTS category.

6.0 STREET LIGHT SERVICES (SS)

Applicability

This is applicable for supply of electricity for street light system including signal

system in corporation, municipality, notified area, committees, panchayats etc. and

also in areas not covered by municipality and notified area committee provided the

number of lamps from a point of supply is not less than five. Also applicable for

Traffic Lights, Mast lights / Blinkers etc.

Tariff Rates

6.1 SS-I Metered Supply

All units – 650 Ps. /unit

Subject to monthly minimum charge of:-

i) Gram Panchayats – 160 units / kW or part thereof

ii) For Nagar Palika / NAC / Municipality – 220 units / kW or part thereof

iii) For Municipal Corporations – 250 units / kW or part thereof





6.2 SS-II Unmetered Supply

Fixed Charges

i) Gram Panchayats – Rs. 250 per 100 W/month or part thereof

ii) For Nagar Palika / NAC / Municipality – Rs. 325 per 100 W/month or part thereof

iii) For Municipal Corporations – Rs. 400 per100 W/month or part thereof





TERMS AND CONDITIONS OF LOW TENSION TARIFF

The foregoing tariffs are subject to the following conditions:

1. Rebate for prompt payment

The due date for making payment of energy bills or other charges shall be 15 days

from the date of issue of the bill. Rebate will be allowed for making payment of

energy bills on or before due date specified in the bill as given below:

i. Kutir Jyoti (Unmetered) Rs.2/- per connection per month.

ii. DS-I and NDS-I (Unmetered) Rs.3/- per connection per month.

iii. Agricultural and Irrigation pumpsets

(Unmetered)

Rs.5/- per HP/month

iv. Street Lights (Unmetered) Rs.3/- per connection/month

v. All metered categories 10 paise per unit, on units billed

In case a consumer makes full payment after due date but within 10 days after the

due date, no DPS shall be leviable for this period but rebate for prompt payment will

not be admissible.

2. Accounting of Partial payment

All payment made by consumers in full or part shall be adjusted in the following order

of priority:

a) Statutory taxes and duties on current consumption

b) Arrear of Statutory taxes and duties

c) Delayed payment surcharge

d) Balance of arrears

e) Balance of current bill

3. Delayed Payment Surcharge (DPS)

In case a consumer does not pay energy bills in full within 10 days grace period after

due date specified in the bill, a delayed payment surcharge of one and half (1.5)

percent per month or part thereof on the outstanding principal amount of bill will be

levied from the due date for payment until the payment is made in full without

prejudice to right of the licensee to disconnect the supply in accordance with Section

56 of the Electricity Act, 2003. The licensee shall clearly indicate in the bill itself the



total amount, including DPS, payable for different dates after the due date after

allowing for the grace period of 10 days. No DPS shall be charged on DPS arrear.

The bill shall indicate the energy charges for the month, arrears of energy charges

and DPS separately.

4. Duties and Taxes

Other statutory levies like electricity duty or any other taxes, duties etc., imposed by

the State Government / Central Government or any other competent authority, shall

be extra and shall not be part of the tariff as determined under this order.

5. Defective / Damaged / Burnt meters supply

In case of meter being defective / damaged / burnt the Board or the consumer as the

case may be, shall replace it within the specified period prescribed in “Standards of

Performance for Distribution Licensee”, Regulations issued by the Commission.

Till defective / damaged / burnt meter is replaced, the consumption will be assessed

and billed on an average consumption of last 12 months from the date of meter being

out of order. Such consumption shall be treated as actual consumption for all

practical purposes including calculation of electricity duty until the meter is replaced/

rectified.

In cases of newly installed meter of a consumer becoming defective/ damaged/ burnt

after installation of the meter prior to completion of 12 months since its installation,

the billing for the period for such defective/ damaged/ burnt meter, till it is not

replaced, shall be done on the basis of average monthly consumption of the

consumer or the MMC whichever is higher.

6. Shunt Capacitor Installation

a) Every LT consumer including irrigation pump set consumers whose

connected load includes induction motor (s) of capacity 3 HP and above and

other low power factor consuming appliances shall arrange to install low

tension shunt capacitors of appropriate capacity at his cost across terminals

of his motor (s). The consumer shall ensure that the capacitors installed by

him are properly matched with the actual rating of the motor so as to ensure

power factor of 90%.



b) All LT consumers having welding transformers will be required to install

suitable shunt capacitor (s) of adequate capacity so as to ensure power factor

of not less than 90%.

c) The capacitors shall be of standard manufacture and meet the Bureau of

Indian Standards specification.

d) Consumers not complying to above shall be liable to pay a surcharge of 5%

(five percent) of the billed amount excluding DPS till the capacitors are

installed.

e) Any LT consumer in whose case, the meter installed has power factor

recording feature and who fails to maintain power factor of 90% in any month

shall pay a surcharge of 5% (five percent) of the billed amount excluding DPS

till the defective capacitors are replaced and power factor of 90% is

maintained.

f) No new supply to LT installations having low power factor consuming

equipment such as induction motor of 3 HP and above or welding

transformers etc., will be released unless shunt capacitors are installed to the

satisfaction of the Board.

g) The ratings of shunt capacitor to be installed on the motors of different ratings

are provided in the “Electric Supply Code” notified by the Commission.

6. Premium on Consumers in notified areas

All LT consumers except Kutir Jyoti and Agricultural consumers in the notified areas

where BSEB intends to supply electricity close to 24 hours shall pay 10% premium

on demand/fixed and energy charge and in MMC.

It may be ensured that transmission and distribution network including other





spares and keeping technical teams ready round the clock for rectifying defects








areas.

Such areas where BSEB intends to strenghthen the infrastructure and provide

facilities as mentioned above and to supply electricity close to 24 (twenty four) hours

shall be notified by BSEB and premium shall be levied after notification of such area

by BSEB. The continuous supply shall mean the normal supply for nearly 24 hours

excluding the grid failure, any force majeure condition, scheduled shut down and

emergent breakdown beyond the control of BSEB.

7. Charges to Tatkal Connections (Optional)

If the any consumer (other than High Tension and Railway) opts for availing

connection under tatkal scheme, the Board shall release the tatkal connection to

such consumer with the following conditions:

• The Tatkal connections shall be released by BSEB in half the time limit

prescribed in the Supply code for that consumer category.

• Two (2) times of the following charges approved under head miscellaneous and

general charges will be taken from the consumers willing to avail tatkal

connection:

o Application fees for new connection, and;

o Supervision, labour and establishment charge for service connection

• In case BSEB fails to release connection within this time limit, BSEB will refund

the additional amount claimed to the consumer in the first energy bill.



PART - B: HIGH TENSION SUPPLY

7.1 HTS – I (11 kV/6.6 kV)

Applicable for supply of electricity for use in installations with a minimum contract

demand of 75 kVA and maximum contract demand of 1500 kVA.

Character of service: AC, 50 cycles, 3 phase at 11 kV or 6.6 kV.

TARIFF RATES

Demand charge Rs./ kVA / Month of billing demand

Energy charges Paise / kWh

270 All units – 535

(i) The billing demand shall be the maximum demand recorded during the month

or 85% of the contract demand whichever is higher.

(ii) Surcharge of 7.5% will be levied on the demand and energy charges for

supply at 6.6 kV.

(iii) If in any month the recorded maximum demand exceeds 110% of contract

demand, that portion of the demand in excess of the contract demand will be

billed at twice the normal charges.

Premium on HTS-I consumers in notified areas

All HTS-I consumers in the notified areas where BSEB intends to supply close to 24

hours shall pay 10% premium on demand/fixed and energy charge.

It may be ensured that transmission and distribution network including other





spares and keeping technical teams ready round the clock for rectifying defects






areas.



Such areas where BSEB intends to strenghthen the infrastructure and provide

facilities as mentioned above and to supply electricity close to 24 (twenty four) hours

shall be notified by BSEB and premium shall be levied after notification of such area

by BSEB. The continuous supply shall mean the normal supply for nearly 24 hours

excluding the grid failure, any force majeure condition, scheduled shut down and

emergent breakdown beyond the control of BSEB.

FPPCA charges as applicable shall be charged extra.

7.2 HTS – II (33 kV)

This is applicable for use in installations with a minimum contract demand of 1000

kVA and maximum contract demand of 15,000 kVA.

Character of service: AC, 50 cycles, 3 phase at 33 kV.

TARIFF RATES

Demand charge Rs. / kVA / Month of billing demand

Energy charges (Paise / unit)

270 All units - 520

(i) The billing demand shall be the maximum demand recorded during the month or

85% of the contract demand whichever is higher.

(ii) If in any month the recorded maximum demand exceeds 110% of contract

demand, that portion of the demand in excess of the contract demand will be

billed at twice the normal charges.


7.3 HTS – III (132 kV)

This is applicable for installations with a minimum contract demand of 7.5MVA.

Character of service: AC, 50 cycles, 3 phase at 132 kV

TARIFF RATES

Demand charge

Rs. / kVA / Month of billing demand

Energy charges

(Paise / unit)

270 All units – 510





(ii) If in any month the recorded maximum demand of the consumer exceeds 110%

of the contract demand, that portion of the demand in excess of the contract

demand will be billed at twice the normal charges.


7.4 HTSS (33 kV/11 kV)

This is applicable for supply of electricity to all consumers who have contract demand

of 300 kVA and more for induction furnace including Ferro Alloy loads. This tariff will

not apply to casting units having induction furnace of melting capacity of 500 Kg and

below.

The capacity of induction furnace shall be 600 kVA per metric tonne as existing for

determining the contract demand of induction furnace in the existing HTSS service

connections. However, for new connection and if the furnace is replaced with a new

one for the existing connections, the contract demand shall be based on total

capacity of the furnace and equipment as per manufacturer technical specifications,

and in case of difference of opinion, the provisions of clause Nos. 6.39 and 6.40 of

the Bihar Electricity Supply Code shall apply.

Those consumers who are having rolling/re-rolling mill in the same premises will take

additional contract demand for the rolling/re-rolling mill over and above the contract

demand required for induction furnace. The consumer will have the option to

segregate the rolling/re-rolling mill and take separate new connection following all

prescribed formalities with a separate transformer. This new connection, if taken by

the consumer will be allowed to be billed in appropriate tariff schedule. Such

rolling/re-rolling mill will be allowed to avail power at 33 kV.

Character of service: AC, 50 cycles, 3 phase at 33 kV or 11kV.

TARIFF RATES

Demand charge Rs. / kVA / Month of billing demand

Energy charges (Paise / unit)

700 All units 270




the contract demand whichever is higher.

(ii) If in any month the recorded maximum demand of the consumer exceeds 110%

of contract demand that portion of the demand in excess of the contract demand

will be charged at twice the normal charges.

(iii) If the power is availed at 11 kV a surcharge of five (5) % will be charged extra

on demand and energy charges.


8.0 Railway Traction Service (RTS)

Applicable to Railway Traction loads only.

Tariff rates at 132 kV

Demand charge

Rs. / kVA / Month of billing demand

Energy charges

(Paise / unit)

240 All units 520

(i) 15 Ps/unit of rebate will be provided for availing supply at voltages higher than

132 kV

(ii) 15 Ps/unit of surcharge will be billed for availing supply at lower voltages than

132 kV.

(iii) The billing demand shall be the maximum demand recorded during the month or



Time of Day tariff (ToD)

All HT consumers other than Railway traction have the option to take TOD tariff

instead of the normal tariff given in the schedule.

Under the Time of Day (ToD) Tariff, electricity consumption and maximum demand in

respect of HT consumers for different periods of the day, i.e. normal period, peak

load period and off-peak load period, shall be recorded by installing a ToD meter.



The maximum demand and consumption recorded in different periods shall be billed

at the following rates on the tariff applicable to the consumer.

Time of use Demand Charges Energy Charges

(i) Normal period

(5:00 a.m. to 5:00 p.m)

Normal Rate Normal rate of energy charges

(ii) Evening peak load period

(5:00 p.m to 11.00 p.m)

Normal Rate 120% of normal rate of energy

charges

(iii) Off-peak load period

(11:00 p.m to 5:00 a.m)

Normal Rate 85% of normal rate of energy

charges

Applicability and Terms and Conditions of TOD tariff:

(i) TOD tariff will be optional for all HT consumers having contract demand below

200 kVA. TOD tariff will be mandatory for all HT consumers having contracted

demand of 200 kVA and above.

(ii) The facility of aforesaid TOD tariff shall not be available to HT consumers

having captive power plants and/or availing supply from other sources through

wheeling of power.

(iii) The HT industrial consumers who have installed standby generating plants

shall also be eligible for the aforesaid TOD tariff.

(iv) After electing TOD tariff, if any industrial HT consumer on account of some

reasons wants to go back to the earlier tariff according to the agreement, this

facility shall be available to him only once in two years.

(v) If the actual monthly consumption of such HT consumer, whose monthly

minimum charges are based on units, is less than minimum consumption, then

the difference (deficit) of units between the minimum consumption and actual

consumption shall be billed at normal rate of energy charge prescribed for

“Normal Period”.

(vi) In the event of applicability of TOD tariff to a consumer, the terms and

conditions of the applicable tariff (such as monthly tariff minimum charge, etc.)

shall continue to apply.

(vii) In case, the consumer exceeds 110% of the contract demand, the demand in

excess of contract demand shall be billed at twice the normal tariff applicable

for the day time i.e. 5:00 a.m. to 5.00 p.m. irrespective of the time of use.



TERMS AND CONDITIONS OF HT TARIFF

The foregoing tariffs are subject to the following conditions:

1. Rebate for Prompt Payment

The due date for making payment of energy bills or other charges shall be 15 days

from the date of issue of the bill.

The tariff rates are subject to prompt payment rebate of 1 (one) paise per unit on

units billed provided the bill is paid by due date specified therein. If the consumer

makes full payment after due date but within 10 days after due date, no DPS shall be

leviable for this period but rebate for prompt payment will not be admissible.

2. Delayed Payment Surcharge (DPS)

In case of consumer does not pay energy bills in full within 10 days grace period after

due date specified in the bill, a delayed payment surcharge of one and half (1.5) %

per month or part thereof on the outstanding principal amount of bill will be levied

form the original due date for payment until the payment is made in full without

prejudice to right of the licensee to disconnect the supply in accordance with Section

56 of the Electricity Act, 2003. The licensee shall clearly indicate in the bill itself the

total amount, including DPS, payable for different dates after the due date after

allowing for the grace period of 10 days. No DPS shall be charged on DPS arrear.

3. Duties and Taxes

Other statutory levies like electricity duty or any other taxes, duties etc., imposed by

the State Government / Central Government or any other competitive authority, shall

be extra and shall not form part of the tariff as determined under this order.

4. Power Factor Surcharge

The average power factor (monthly) of the supply shall be maintained by the

consumer not less than 0.90.

If the monthly average power factor falls below 90% (0.9) he shall pay a surcharge in

addition to his normal tariff at the following rates:



(i) For each fall of 0.01 in power factor

upto 0.80

One percent on demand and energy

charge

(ii) For each fall of 0.01 in power factor

below 0.80

1.5 (one and half) percent on demand

and energy charge (Actual Recorded)

If the average power factor falls below 0.70 consecutively for 3 months, the Board

reserves the right to disconnect the consumer’s service connection without prejudice

for the levy of the surcharge.

5. Power Factor Rebate

In case the average power factor (monthly) of the consumer is more than 90% (0.90)

a power factor rebate at the following rates shall be allowed.

For each increase of 0.01 in power

factor above 0.90 upto 0.95

0.5 (half) percent on demand and

energy charge (Actual Recorded)

For each increase of 0.01 in power

factor above 0.95

1.0 (one) percent on demand and

energy charges. (Actual Recorded)

6. Accounting of Partial payment

All payment made by consumers in full or part shall be adjusted in the following order

of priority:

a) Statutory taxes and duties on current consumption

b) Arrear of Statutory taxes and duties

c) Delayed payment surcharge

d) Balance of arrears

e) Balance of current bill

7 Transformer Capacity

The transformer capacity of HT consumer shall not be more than 150% of the

contract demand, consumer found to be utilizing transformer of higher capacity than

admissible for his contracted load, will fall under malpractice.



If standard capacity is not available for exact requirement then relaxation in

transformer capacity upto 10% extra can be allowed in individual cases on request.

All HT/EHT consumers having contract demand of 200 kVA and above may be

allowed to have a stand by transformer, whose capacity shall not be more than the

main transformer. The technical/physical arrangement shall be approved by the

Board’s officer before it is installed. If any consumer violates the condition, then line

will be disconnected and standby facility shall be withdrawn.

Considering the special need of the Railway, the RTS consumer may be allowed to

have 100% extra i.e. 200% of the contract demand. Stand by transformer may also

be allowed, which should not be more than the capacity of the main transformer.

8 Defective / Damaged / Burnt meter replacement

In case of meter being defective / damaged / burnt the Board or the consumer as the

case may be shall replace the same within the period specified in “Standards of

Performance for Distribution Licensee” Regulations issued by the Commission. Till

defective meter is replaced the consumption will be assessed and billed on an

average consumption of last 12 months from the date of meter being out of order.

Such consumption shall be treated as actual consumption for all practical purposes

including calculation of electricity duty until the meter is replaced/ rectified.

In cases of newly installed meter of a consumer becoming defective/ damaged/ burnt

after installation of the meter prior to completion of 12 months since its installation,

the billing for the period for such defective/ damaged/ burnt meter, till it is not

replaced, shall be done on the basis of average monthly consumption of the

consumer or the MMC whichever is higher..

9. If the actual recorded demand of a consumer exceeds 110% consecutively for three

months Board may issue a notice and inform the consumer to get additional contract

demand sanctioned or to limit their drawal as per their contract. Otherwise Board will

take action as per provisions of the Act/Rules/Regulations.

10. The prevailing practice will continue for determining the contract demand of induction

furnaces in the existing services connections. However, for new connections and

where the furnaces are replaced in existing connections, contract demand shall be

based on the total capacity of the furnace and equipment as per manufacturer



technical specifications and in case of difference of opinion, the provisions of clause

No.6.39 and 6.40 of Bihar Electricity Supply Code shall apply.

11. The Government of Bihar had issued “Industrial Incentive Policy Bihar-2006” in order

to create favourable environment and accelerated industrial growth of the State.

The Policy states -

(a) Existing and New Units:

“Working units at present and new units will avail exemption from AMG/MMG from

the date of declaration of the New Industrial Policy. The facility will be granted for a

period of five years”

(b) Sick units:

The following facilities are provided to sick units.

Exemption from Annual Minimum Guarantee (AMG), Monthly Minimum Guarantee

(MMG) and Delayed Payment Surcharge (DPS) would be available to the unit from

the date of declaration of the unit as sick unit. This facility would be admissible for a

period of five years.

The Board shall comply with the Industrial Policy of Government of Bihar and its

subsequent revisions if any till the time it remains applicable. Such Industrial Policy

shall be extended to other eligible consumers who are covered under this Policy.



9.0 Temporary Supply (LT and HT)

9.1 Applicability

This tariff is for connection of temporary in nature for period of less than one year.

The applicability shall be as given in the respective category tariff rate schedule.

Temporary supply cannot be claimed by a prospective consumer as a matter of right

but will normally be arranged by the Board when a requisition is made giving due

notice subject to technical feasibility and in accordance with electricity supply code

issued by the Commission.

9.2 Tariff

Fixed charge and energy charge shall be chargeable at one and half times the

normal tariff as applicable to the corresponding appropriate tariff category.

9.3 Terms of Supply

a) Temporary supply under any category of service may be given for a period not

exceeding 30 days in the first instance, the duration of which, however may be

extended on month-to-month basis subject to maximum of one year.

b) In addition to the charges mentioned above, the consumer shall have to deposit

the following charges before commencement of the temporary supply:

(i) Estimated cost of erection of temporary service line and dismantling.

(ii) Cost of irretrievable materials which cannot be taken back to service.

(iii) Meter rent for the full period of temporary connection as per appropriate

Tariff Schedule and miscellaneous charges.

(iv) Rental on the cost of materials as per estimate framed but not payable

by the consumer shall be payable at the rate of Rs. 15/- per month on

every Rs. 100/- or part thereof.

(v) Ten per cent on the total cost of the estimate for the temporary service

connection to cover as security for loss of materials and contingencies. In

case such loss is not noticed, the amount will be refunded.

c) The applicants for temporary supply shall be required to make a deposit in

advance of the cost as detailed above including the energy consumption charges

estimated for full period on the basis of connected load. This will however, be



adjusted against the final bill that will be rendered on disconnection of supply

month to month basis.

d) If the consumer intends to extend the temporary supply beyond the period

originally applied for, he will have to deposit in advance all charges as detailed

above including the estimated electricity consumption charges, for the period to

be extended and final bill for the previous period, as well.

e) The temporary supply shall continue as such and be governed by the terms and

conditions specified above until the supply is terminated or converted into

permanent supply at the written request of the consumer. The supply will be

governed by the terms and conditions of permanent supply only after the

consumer has duly completed all the formalities like execution of agreement,

deposit of security money, cost of service connection and full settlement of the

account in respect of the temporary supply etc.

10.0 Seasonal Supply (LT and HT)

1. Seasonal supply shall be given to any consumer on written request to the Board

subject to the following conditions.

Period of Supply Tariff Rate

1. Upto 3 consecutive months in a year Appropriate tariff plus 30 percent

2. More than 3 consecutive months and

upto 6 consecutive months in a year

Appropriate tariff plus 20 percent

3. More than 6 consecutive months and

upto 9 consecutive months in a year

Appropriate tariff plus 15 percent

4. More than 9 consecutive months but

less than one year

Appropriate tariff plus 5 percent.

2. The meter rent and other charges as provided in the appropriate tariff are applicable

to seasonal loads and would be charged extra for the entire period of supply.

3. The supply would be disconnected after the end of the period unless the consumer

wants the supply to be continued.

Any reconnection charges have to be borne by the consumer.



4. Consumer proposing to avail seasonal supply shall sign an agreement with the Board

to avail power supply for a minimum period of 3 years in the case of HT, and 2 years

in the case of LT category of supply.

5. The consumers must avail supply in terms of whole calendar month continuously.

6. The consumer is required to apply for seasonal supply and pay initial cost and

security deposit as an applicant for normal electricity supply.

7. The consumer shall ensure payment of monthly energy bills within 7 days of its

receipt. The supply will be disconnected if payment is not made on due date.



PART - C: MISCELLANEOUS AND GENERAL CHARGES

11.0 The Miscellaneous and General charges approved by the Commission are as below:

11.1 Meter Rent

Particulars Applicable Charges

Kutir Jyoti Rs.10/month

a) Single Phase LT except Kutir Jyoti Rs. 20/month

b) Three Phase LT

Upto 100 Amps

Rs. 50/month

c) LT meter with CT Rs. 500 / month

d) 6.6 kV and 11 kV HTS-I

(i) Metering at low voltage

(ii) Metering at 6.6/11 kV

Rs. 500 / month

Rs. 700 / month

e) 33 kV HT metering equipment for HTS-II and HTSS Rs. 3000 / month

f) 132 kV EHT metering equipment for HTS-III Rs. 15000 / month

g) 25 kV RTS Rs.3000/month

h) 132 kV RTS Rs.15000/month

11.2 Application fee for new connection / reduction of load / enhancement of load /

request for permanent disconnection/ request for ta tkal connection:

No. Category / class Rate

(i) Kutir Jyoti Rs.20.00

(ii) LT Single phase except Kutir Jyoti Rs. 75.00

(iii) LT Three phase Rs. 200.00

(iv) LT Industrial Rs. 300.00

(v) HT Connection Rs. 750.00

(vi) For tatkal connection Two (2) times the normal rate

11.3 Testing / Inspection of consumer’s installatio n:


(i) Initial Test / Inspection Free of cost

(ii) Subsequent test and inspection Rs. 100.00 for single phase




necessitated by fault in

installation or by not complying

with terms and conditions of

supply

connection

Rs. 200.00 for three phase LT

connection

Rs.800 for HT connection.

11.4 Meter Testing Fee:


(i) Single Phase meter (L.T.) Rs. 100.00

(ii) Three Phase meter (L.T.) Rs. 200.00

(iii) Three Phase meter with CT Rs. 300.00

(iv) Trivector and special type meter Rs. 1800.00

(v) 33 kV or 11 kV metering equipment Rs. 5000.00

(vi) 132 kV/220 kV metering equipment Rs. 8000.00

If the meter is tested at third party testing laboratory at the request of the consumer

then the fees charged by the testing laboratory will be payable by the consumer.

11.5 Removing / Re-fixing / Changing of Meter / Meter Bo ard at consumer’s request:


Cost of material, as

required, will be

borne by the

consumer

(i) Single Phase meter Rs. 200.00

(ii) Three Phase meter Rs. 400.00

(iii) Three Phase meter with CT Rs. 500.00

(iv) Trivector and special type meter Rs. 600.00

(v) High tension metering equipment Rs. 1200.00

11.6. Reconnection charge:

Sl.No . Category/class Rate

(i) Single Phase supply, LT Rs. 100.00

(ii) Three Phase supply other than LT industrial Rs. 200.00

(iii) Three Phase LT industrial supply Rs. 900.00

(iv) HT supply Rs. 3000.00

11.7 Supervision, Labour and Establishment charge f or service connection:



Sl.No. Category/class Rate

(i) Single Phase LT Rs. 400.00

(ii) Three Phase LT other than industrial Rs. 900.00

(iii) Three Phase industrial Rs. 1500.00

(iv) HT As per approved estimate

(v) For tatkal connection Two (2) times the normal rate

11.8 Security Deposit:

(a) The consumer (except Kutir Jyoti rural and Kutir Jyoti urban) shall pay initial

security deposit equivalent to the estimated energy charges including fixed /

demand charges for a period of two months or as per the provisions of Bihar

Electricity Supply Code notified by the Commission.

(b) All Central Government and State Government departments are exempted from

payment of security deposit. However all public sector undertakings and local

bodies shall pay security deposit, as applicable.

(c) The amount of security deposit obtained from the consumer is liable to be

enhanced every year, in April-May of next year on the basis of consumption

during previous years or as specified in clause 7.15 of Bihiar Electricity Supply

Code. In default of payment of additional security deposit, wherever payable

after review, the service line may be disconnected on serving thirty days notice

and connection thereafter can be restored only if the deposit is made in full along

with the prescribed reconnection charges and surcharge @1.5% per month or

part thereof on the amount of outstanding.

11.9 Interest on Security Deposit

Security deposit made by a consumer shall bear interest as specified in Bihar

Electricity Supply Code, payable at Bank rate notified by RBI from time to time. The

interest will be calculated for full calendar months only and fraction of a month in

which the deposit is received or refunded, shall be ignored. The interest for the

period ending 31st March shall be adjusted and allowed to the consumer in the

energy bill for May issued in June and in subsequent month (s), if not adjusted

completely against the bill for the month of May.

12.0 The other terms and conditions of supply of electricity not specially provided in this

tariff order will continue to be regulated by the provisions specified in the Bihar

Electricity Supply Code notified by the Commission.



PART D: FORMULA FOR FUEL AND POWER PURCHASE COST A DJUSTMENT

The approved fuel and power purchase cost adjustment (FPPCA) formula is given

below:

FPPCA

(Paise /

kWh)

=

Qc(RC2-RC1)+Qo(RO2-RO1)+QPp(Rpp2 -Rpp1) X100

(QPg + QPp) x (1-L)

Where,

Qc =

=

Quantity of coal consumed during the adjustment period (in M.T)

(SHR x QPg) (1+TSL)x1000 / GCV

RC1 = Weighted average rate of coal supplied ex-power station coal yard as

approved by the Commission for the adjustment period in Rs. / M.T

RC2 =

Weighted average rate of the coal supplied ex-power station coal yard as

per actual for the adjustment period in Rs. / M.T

Qo =

=

Quantity of oil (in KL) consumed during the adjustment period

Generation (in MU) X Specific oil consumption approved by the

Commission (ml. / kWh)

RO1 = Weighted average rate of oil ex-power station (in Rs./KL) approved by

the Commission for the adjustment period

RO2 = Weighted average actual rate of oil ex-power station supplied (in Rs. /

KL) during the adjustment period

QPp = Power purchased from different sources and fed into Board’s system

(in MUs)

Rpp1 = Average rate of power purchase as approved by the Commission

(in Rs. / kWh)

Rpp2 = Average rate of power purchased during the adjustment period

(in Rs. / kWh)

QPg = Board’s own power generation (in MUs) at generator terminal – approved

auxiliary consumption

L = T & D loss as approved by the Commission or actual, whichever is lower.



SHR = Station Heat Rate as approved by the Commission.

TSL = Transit and Stacking Loss as approved by the Commission.

GCV = Weighted average gross calorific value of coal fired at boiler front during

the adjustment period (in Kcal / Kg)

Note:

1) Amount of variable charges on account of change of cost of unknown

factors like water charges, taxes or any other unpredictable and unknown

factors not envisaged at the time of tariff fixation subject to prior approval

of the Commission

2) Adjustment, if any, to be made in the current period to account for any

excess / shortfall in recovery of fuel or power purchase cost in the past

adjustment period, subject to the approval of the Commission.

3) While charging the FPPCA in the energy bills, the consumption and rate

at which and the month for which the FPPCA is being charged must be

indicated in the bills.

The approved (FPPCA) formula is subject to following conditions:

(i) The basic nature of FPPCA is ‘adjustment’ i.e. passing on the increase or

decrease, as the case may be.

(ii) The operational parameters / norms fixed by the Commission in this tariff

order shall be the basis of calculating FPPCA charges.

(iii) The FPPCA will be recovered in the form of an incremental energy charge

(Rs/kwh) in proportion to the energy consumption and will be forming a part of

the energy bill to be served on monthly/bimonthly or any other periodical

basis as specified by the Commission.

(iv) Incremental cost of power purchase due to deviation in (respect of generation

mix) power purchase at higher rate, etc. shall be allowed only if it is justified to

the satisfaction of the Commission.

(v) Any cost increase by the Board by way of penalty, interest due to delayed

payments, etc. and due to operational inefficiencies shall not be allowed.

(vi) FPPCA charges shall be levied on all categories of consumers



(vii) The data in support of FPPCA claims shall be duly authenticated by an officer

of the Board, not below the rank of Chief Engineer on affidavit. Supported

with the certified copy of energy bills of power purchase, transmission and

RLDC charges, coal and its transportation cost, oil purchase bill and the

quantity of coal and oil consumed during the month.

(viii) Variation of FPPCA charge will be allowed only when it is five (5) paise and

more per unit.

(ix) The formula will be applied on monthly basis by BSEB after seeking the

regulatory approval. The incremental cost per kWh due to this FPPCA arrived

for a month shall be recovered in the subsequent month through energy bills

and so on. The BSEB shall, however, be obligated to provide all relevant

information to the Commission simultaneously and in any case where the

Commission observes any discrepancies, the same will be adjusted during

the subsequent month. This mechanism will provide administrative and

regulatory simplicity.

(x) The approved formula is subject to review, as the Commission may deem fit.



9 Status of Directives issued by the Commission

9.1 General

9.1.1 The Commission in its previous Tariff Orders had issued a number of directives to

the Bihar State Electricity Board with an objective of attaining operational efficiency,

efficient manpower deployment and streamlining the flow of information, which would

be beneficial for the Petitioner, both in short and long term perspective. These

directives aim at creating a conducive, competitive and healthy environment for the

Petitioner to provide good quality of electricity supply and services to the consumers

at optimum and affordable costs. This Chapter deals with the compliance status of

the Directives and Commission‘s views thereon as well as new directives for

compliance and implementation by the Petitioner.

9.1.2 In all previous Tariff Orders, the Commission had observed that while there was

ample scope for reducing costs and increasing efficiency in the operations of BSEB,

serious efforts appeared to be lacking. It is in the above context that certain directives

were given by the Commission for compliance by the Board. The Commission

expected that Board would take prompt action on the directives and monitor their

implementation. Action is yet to be taken on most of the important directives, which

could make significant difference in operational efficiency and cost. In some cases

action has no doubt been initiated, but overall the seriousness with which the

directives were issued by the Commission does not appear to have gone home.

9.1.3 Implementation of these will be monitored by the Commission every quarter and their

non-compliance shall invite action under provisions of the Act.

9.1.4 Apart from these, there are certain other issues, not all of which may be directly

related to tariff as such, on which the Commission has been giving directions in its

Tariff Orders in the past. Since the Tariff Order covers in its scope analysis of the

performance of the utility, such directives are also considered necessary. Accordingly

such directives have also been included in this order.



9.1.5 In the above background, the Commission is constrained to repeat most of the

directives which were given in the last Tariff Orders which have not been fully

compiled with, but also gives specific new directives.

9.2 Directives issued in Tariff Order of FY 2012-13 : Fresh Directives

9.2.1 Directive No. 1: Capitalization of Assets

The Commission directs the Board to submit the progress report on execution of R-

APDRP and other capital works being undertaken from FY 2011-12 onwards along

with source of funding on quarterly basis and provide data related to achievement of

loss reduction target under R-APDRP scheme. The Board is required to complete the

project as per schedule and ensure that T&D loss reduction targets are achieved so

that the central fund received under the scheme as loan is converted into grant as

stipulated in the scheme. This will avoid any chance of passing on of the inefficiency

of Board or its successor restructured companies to the consumers due to non-

conversion of loan into grant because of non-achievement of loss reduction target

under R-APDRP schemes

9.2.2 Directive No. 2: Strengthening the consumer complai nt Redressal mechanism

The Commission directs the Petitioner to instruct the concerned field officers to be

available in their offices on the specified days. Such days should be displayed at the

notice board in the offices of the Petitioner for information of consumers and also

publicised in newspapers having wide circulation in that area. This would ensure that

the consumers can contact concerned officer of BSEB and have their grievances

related to meter reading, billing etc. redressed. Further, the Commission directs the

Petitioner to organize camps in the field for collection of dues and awareness

creation for the benefit of the consumers. An annual status report in redressal of

grievance of consumers shall be submitted by the Board.

9.2.3 Directive No. 3: Circle wise Distribution Loss redu ction target

The Commission directs the Board to determine circle wise loss reduction on the

basis of energy accounting and audit and fix circle-wise loss reduction target and

prepare a detailed action plan for reduction of T&D losses. The Commission also

directs the Board to monitor implementation of all schemes and actions for reduction

of T&D losses and compliance report may be submitted to the Commission along

with the next tariff petition.



9.2.4 Directive No. 4: Cost of Supply study

The Commission directs the Board to carry out appropriate studies backed by

energy accounting and audit to determine category wise and voltage wise T&D

losses and cost of supply and submit it to the Commission along with the next tariff

petition.

9.2.5 Directive No. 5: Business Plan and Investment Progr amme.

The Commission directs the Board or its successor restructured companies to submit

the business plan for generation, transmission and distribution functions separately

for a period of three years, i.e. FY 2013-14 to FY 2015-16 by September, 2012.

9.2.6 Directive No. 6: MYT filing for each function

The Commission directs the Petitioner or its successor restructured companies to file

separate MYT petitions for generation, transmission and distribution functions for the

first control period. FY 2013-14 will be the first year of the control period from FY

2013-14 till FY 2015-16.

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taile

d br

eak

up

The

Com

mis

sion

als

o di

rect

s th

e B

oard

to

subm

it a

met

erin

g pl

an a

long

with

a r

epor

t on

def

ectiv

e m

eter

s an

d ac

tion

plan

for

m

eter

ing

all

unm

eter

ed c

onsu

mer

s an

d fo

r re

plac

emen

t of

all

the

defe

ctiv

e m

eter

s by

30th

Jun

e 20

12.T

he B

oard

sha

ll al

so

prov

ide

volta

ge w

ise

num

bers

of

feed

ers,

the

ir m

eter

ing

stat

us b

y 30

th J

une

2012

. The

reaf

ter,

the

Boa

rd is

re

quir

ed t

o up

date

th

e C

omm

issi

on o

n th

e pr

ogre

ss m

ade

on a

qua

rter

ly b

asis

.

Dire

ctiv

e N

o. 2

: R

epla

cem

ent o

f Non

-fu

nctio

nal /

Def

ectiv

e m

eter

s

The

Com

mis

sion

dire

cted

the

Boa

rd to

rep

ort t

he n

umbe

r of

non

-per

form

ing

/ def

ectiv

e m

eter

s ca

tego

ry-w

ise

in th

e sy

stem

as

on 3

0.11

.200

6 al

ong

with

an

actio

n pl

an t

o re

plac

e th

em a

nd th

e re

port

mus

t be

subm

itted

by

31st

Jan

uary

20

07 to

the

Com

mis

sion

.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

The

Boa

rd i

nfor

med

the

Com

mis

sion

tha

t it

has

initi

ated

a t

ime

boun

d pr

ogra

m f

or r

epla

cem

ent

of a

ll no

n-fu

nctio

nal

and

defe

ctiv

e m

eter

s. T

he t

arge

t fo

r 10

0% m

eter

ing

by M

arch

201

3 in

clud

es r

epla

cem

ent

of n

onfu

nctio

nal a

nd d

efec

tive

met

ers

also

w

ith

prov

isio

n of

m

eter

s in

the

pr

emis

es

of u

nmet

ered

con

sum

ers.

Th

e B

oard

do

es

not

have

se

para

te d

ata

of

nonp

erfo

rmin

g/ d

efec

tive

met

ers

and

unm

eter

ed c

onsu

mer

s. T

he c

umul

ativ

e fig

ure

of t

otal

non

perf

orm

ing/

defe

ctiv

e an

d

unm

eter

ed c

onsu

mer

upt

o S

ep’1

1 w

as p

rovi

ded

in r

espo

nse

to t

he D

irect

ive

1 of

FY

200

6-07

in

its p

etiti

on f

or F

Y 2

012-

13.

Acc

ordi

ng to

whi

ch th

e to

tal 9

,97,

685

num

bers

of

cons

umer

’s m

eter

are

def

ectiv

e/ s

top/

unm

eter

ed u

pto

Sep

tem

ber,

201

1.

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

T

he C

omm

issi

on d

irec

ts t

he B

oard

to

subm

it th

e qu

arte

rly s

tatu

s re

port

for

rep

lace

men

t of

the

def

ectiv

e an

d no

n-fu

nctio

nal

met

ers

with

in 1

0 da

ys o

f end

of e

ach

quar

ter.

The

firs

t suc

h re

port

sha

ll be

sub

mitt

ed t

o th

e C

omm

issi

on b

y 10

th J

uly

2012

.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

301

Dire

ctiv

e

Dire

ctiv

e N

o. 3

: Set

ting

up

of In

depe

nden

t Thi

rd P

arty

M

eter

Tes

ting

Arr

ange

men

t

The

Com

mis

sion

dire

cted

tha

t th

e B

oard

sho

uld

put

in

plac

e an

acc

redi

ted

inde

pend

ent

third

par

ty m

eter

tes

ting

arra

ngem

ent i

n al

l dis

tric

ts u

nder

its

licen

sed

are

a an

d al

so p

repa

re n

orm

s fo

r al

low

ing

cons

umer

s to

pu

rcha

se th

eir

own

met

ers

duly

tes

ted

and

cert

ified

by

such

thi

rd

part

y te

stin

g ag

ency

so

that

sco

pe f

or c

onsu

mer

com

plai

nts

is

min

imiz

ed a

nd c

ompl

aint

s th

at a

rise

are

settl

ed e

xped

itiou

sly

to t

he s

atis

fact

ion

of t

he c

onsu

mer

s w

itho

ut th

e ne

ed

for

any

reco

urse

to c

onsu

mer

foru

m.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

The

Boa

rd s

tate

d th

at it

has

set

-up

high

-tec

h te

stin

g la

bora

tory

at P

atna

.

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

The

Boa

rd h

as n

ot s

tate

d ab

out

the

putti

ng i

n pl

ace

an a

ccre

dite

d in

depe

nden

t th

ird

part

y m

eter

tes

ting

arra

ngem

ent

in a

ll di

stric

ts. T

he c

ompl

ianc

e is

vag

ue.

The

Pet

ition

er is

dire

cted

to

subm

it th

e pr

ogre

ss r

epor

t on

impl

emen

tatio

n on

est

ablis

hmen

t of

Hig

h-T

ech

test

ing

labo

rato

ry in

P

atna

, st

atus

of

com

mis

sion

ing

of f

our

(4)

nos.

of

com

pute

rize

d te

st b

ench

es o

btai

ned

from

PG

CIL

and

act

ion

plan

to

obta

in

sim

ilar

test

ben

ches

in a

ll ci

rcle

s fo

r te

stin

g of

met

ers

and

the

late

st s

tatu

s of

the

num

ber

of m

eter

s te

sted

so

far

by t

he B

oard

in

its

labo

rato

ry b

y 30

th J

une

2012

, as

dire

cted

in T

ariff

Ord

er fo

r F

Y 2

011-

12.

The

C

omm

issi

on

also

re

itera

tes

that

B

oard

sh

ould

pu

t in

pl

ace

an

accr

edite

d in

depe

nden

t th

ird

part

y m

eter

te

stin

g ar

rang

emen

t in

all

dist

ricts

und

er i

ts l

icen

sed

area

an

d al

so p

repa

re n

orm

s fo

r al

low

ing

cons

umer

s to

pur

chas

e th

eir

own

met

ers

duly

test

ed a

nd c

ertif

ied

by s

uch

third

par

ty te

stin

g ag

ency

.

Dire

ctiv

e N

o. 4

: Effi

cien

t m

eter

s re

adin

g bi

lling

and

co

llect

ion

Tim

ely

met

er r

eadi

ng,

billi

ng a

nd c

olle

ctio

n fo

r en

ergy

con

sum

ed b

y th

e co

nsum

ers

can

sign

ifica

ntly

im

prov

e th

e ca

sh fl

ow o

f the

Boa

rd. T

he p

rese

nt s

yste

m s

houl

d b

e re

view

ed w

ith a

vie

w to

str

eam

line

the

proc

ess

and

min

imiz

e th

e tim

e be

twee

n ac

tual

del

iver

y of

pow

er a

nd r

ecei

pt o

f rev

enue

. Sup

ervi

sory

offi

cers

mus

t cou

nter

ch

eck

the

met

er

read

ings

take

n by

the

met

er r

eade

rs. F

urth

er, t

he a

rea

of m

eter

rea

ders

sho

uld

be c

hang

ed e

very

yea

r.

The

Boa

rd s

houl

d in

trod

uce

billi

ng t

hrou

gh M

eter

Re

adin

g In

stru

men

t (M

RI)

for

all

HT

con

sum

ers

and

lar

ge n

on-

dom

estic

con

sum

ers.

Spo

t bill

ing

pref

erab

ly b

y pa

lm to

p co

mpu

ters

may

be

intr

oduc

ed in

the

urba

n ar

eas

.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

302

Dire

ctiv

e

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

The

BS

EB

has

out

sour

ced

met

er r

eadi

ng,

com

pute

rized

bill

ing

and

bill

dist

ribut

ion

all

over

Bih

ar.

E-p

aym

ent

thro

ugh

debi

t ca

rd &

AT

M o

f C

anar

a ba

nk h

as b

een

alre

ady

star

ted.

Oth

er b

anks

like

SB

I, I

CIC

I ar

e lik

ely

to c

ome

in th

e co

llect

ion

netw

ork

of B

SE

B. P

aym

ent b

y ru

ral c

onsu

mer

s fa

cilit

ated

thro

ugh

Sah

aj V

asud

ha K

endr

as s

prea

d al

l ove

r B

ihar

. T

arg

et-

Jun’

12.

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

Dur

ing

the

publ

ic h

earin

g, it

has

com

e to

not

ice

of t

he C

omm

issi

on t

hat

met

er r

eadi

ng a

nd b

illin

g of

con

sum

ers

are

not

done

pr

oper

ly a

nd t

he e

lect

ricity

bill

s of

the

BS

EB

doe

s no

t co

ntai

n th

e re

quire

d de

tails

. T

he d

etai

ls o

f F

PP

CA

cha

rges

are

not

pr

ovid

ed i

n th

e bi

lls s

o th

e C

omm

issi

on d

irect

s th

e B

oard

to

take

the

im

med

iate

ste

ps f

or p

rope

r m

eter

ing

and

billi

ng o

f th

e co

nsum

ers

and

subm

it qu

arte

rly r

epor

t w

ith d

etai

ls o

f ac

tion

take

n fo

r pr

oper

met

erin

g an

d de

tails

of

billi

ng a

nd %

age

of

impr

ovem

ent i

n co

llect

ion.

Dire

ctiv

e N

o. 5

: Met

er

Rea

ding

of H

T s

ervi

ces

The

mon

thly

met

er r

eadi

ng o

f H

T s

ervi

ces

shal

l be

ent

rust

ed t

o a

com

mitt

ee o

f hi

gh le

vel o

ffice

rs o

f the

Boa

rd.

All

the

HT

ser

vice

s be

low

500

KV

A c

ontr

acte

d m

axim

um d

eman

d, m

eter

re

adin

g m

ay b

e do

ne b

y th

e co

ncer

ned

Ass

ista

nt E

ngin

eer

and

thos

e ab

ove

500K

VA

by

the

conc

erne

d E

xecu

tive

Eng

inee

r. F

urth

er c

erta

in p

erce

ntag

e of

m

eter

rea

ding

s in

eac

h ca

tego

ry o

f co

nsum

ers

shal

l be

don

e by

sen

ior

offic

ers

of t

he B

oard

upt

o th

e le

vel o

f C

hief

E

ngin

eer

to c

ontro

l pilf

erag

e of

ele

ctric

ity. B

SE

B

shal

l iss

ue s

uita

ble

inst

ruct

ions

in t

his

rega

rd im

med

iate

ly a

nd t

he

Boa

rd s

hall

also

rev

iew

the

perc

enta

ge o

f che

ck r

eadi

ngs

and

take

act

ion

in c

ase

of v

aria

tion

betw

een

norm

al m

eter

re

adin

g re

ad b

y m

eter

rea

der

and

the

chec

k m

eter

re

adin

g ta

ken

by th

e of

ficer

s of

the

Boa

rd.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

The

Com

mis

sion

has

dire

ctor

in

Tar

iff O

rder

tha

t th

e se

nior

offi

cers

sha

ll al

so p

erio

dica

lly v

isit

HT

ser

vice

s an

d ta

ke c

heck

re

adin

gs t

o en

sure

that

ther

e ar

e no

mal

prac

tices

in ta

king

met

er r

eadi

ngs

and

the

met

ers

are

not t

ampe

red

etc.

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

The

Boa

rd h

as n

ot r

epor

ted

rega

rdin

g pe

rcen

tage

of

met

er r

eadi

ng i

n ea

ch c

ateg

ory

of c

onsu

mer

s by

Sen

ior

Offi

cers

of

the

Boa

rd,

upto

the

lev

el o

f C

hief

-Eng

inee

r to

con

trol

pilf

erag

e of

ele

ctric

ity.

The

Com

mis

sion

dir

ects

the

Boa

rd t

o pr

ovid

e qu

arte

rly s

tatu

s of

per

cent

age

chec

k of

met

ers

read

ing

and

actio

n ta

ken

in c

ase

of v

aria

tion

betw

een

norm

al m

eter

rea

ding

re

ad b

y m

eter

-rea

der

and

the

chec

k m

eter

rea

ding

tak

en b

y th

e O

ffice

rs o

f th

e B

oard

, ea

ch A

rea

Boa

rd w

ise

to t

he

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

303

Dire

ctiv

e

Com

mis

sion

by

10th o

f the

nex

t m

onth

of q

uart

er e

ndin

g. F

irst

suc

h re

port

sha

ll co

me

to th

e C

omm

issi

on b

y 10

thJ ju

ly,

2012

..

Dire

ctiv

e N

o. 6

: R

epla

cem

ent o

f old

el

ectr

omag

netic

met

ers

with

sta

tic m

eter

s

A r

epor

t on

the

stat

us o

f m

eter

ing,

typ

e of

met

ers

prov

ided

in H

T a

nd o

ther

hig

h va

lue

LT in

stal

latio

ns

alon

g w

ith a

pr

ogra

mm

e fo

r re

plac

emen

t of s

uch

met

ers

with

sta

tic

met

ers

shal

l be

subm

itted

to th

e C

omm

issi

on b

y 31

st J

anua

ry

2007

.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

No

spec

ific

resp

onse

has

bee

n pr

ovid

ed b

y th

e B

oard

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

R

egar

ding

inst

alla

tion

of c

ent

perc

ent m

eter

ing

the

com

plia

nce

is n

oted

in d

irect

ive

No.

-1 s

o th

is is

not

dea

lt he

re s

epar

atel

y.

Dire

ctiv

e N

o. 7

: Red

uctio

n of

Tra

nsm

issi

on a

nd

Dis

trib

utio

n (T

&D

) los

s

A l

ong

term

act

ion

plan

for

red

uctio

n of

T&

D l

osse

s f

or b

oth

tech

nica

l an

d no

n-te

chni

cal

with

rel

evan

t l

oad

flow

st

udie

s be

cha

lked

out

and

sub

mitt

ed to

the

Com

mis

sio

n by

Mar

ch,

2007

. T

he B

oard

sho

uld

ensu

re r

educ

tion

of t

he

T&

D lo

sses

to 3

8% d

urin

g F

Y 2

007-

08 a

nd 3

4% d

urin

g F

Y 2

008-

09.

Com

plia

nce

stat

us o

f dire

ctiv

e

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

1-12

T

he C

omm

issi

on n

oted

the

act

ion

take

n an

d di

rect

ed th

e B

oard

to s

ubm

it th

e qu

arte

rly p

rogr

ess

repo

rt.

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

Ave

rage

AT&

C l

osse

s of

BS

EB

fro

m A

pril

2011

to

Aug

ust

2011

are

57.

41%

. T

he h

igh

AT

&C

los

ses

desp

ite c

orre

ctiv

e m

easu

res

take

n b

y B

SE

B a

re d

ue t

o m

assi

ve r

ural

ele

ctrif

icat

ion

and

rura

l loa

ds c

omin

g on

dis

trib

utio

n sy

stem

of

BS

EB

. Thi

s fa

ct h

as b

een

acce

pted

by

the

Com

mis

sion

in it

s T

ariff

Ord

er f

or F

Y 2

011-

12 d

ated

1st

Jun

e, 2

011.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

304

Dire

ctiv

e

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

The

Com

mis

sion

has

dir

ecte

d th

e B

oard

to s

ubm

it a

long

ter

m a

ctio

n pl

an f

or r

educ

tion

of T

&D

loss

, bu

t th

e B

oard

inst

ead

of

subm

ittin

g th

e pl

an s

tate

d th

at A

T&

C lo

sses

are

57.

41%

due

to

mas

sive

rur

al e

lect

rific

atio

n an

d ru

ral l

oad.

The

Com

mis

sion

di

rect

s th

e B

oard

to

ensu

re t

hat

the

Met

erin

g pl

an is

syn

chro

nize

d w

ith t

he T

&D

loss

red

uctio

n pl

an. S

peci

fic lo

ng t

erm

map

fo

r re

duct

ion

of T

&D

loss

sha

ll be

sub

mitt

ed b

y th

e B

oard

by

30th J

une

2012

.

Dire

ctiv

e N

o. 8

: Ene

rgy

Aud

it an

d D

eman

d S

ide

Man

agem

ent

Ene

rgy

audi

t is

an

impo

rtan

t an

d es

sent

ial

tool

to

iden

tify

the

high

los

s (t

echn

ical

and

com

mer

cial

) a

reas

in

the

syst

em.

For

car

ryin

g ou

t the

ene

rgy

audi

t, m

eter

s a

re r

equi

red

to b

e pr

ovid

ed a

t al

l the

feed

ers

from

22

0KV

to 1

1KV

le

vel a

nd a

lso

dist

ribut

ion

tran

sfor

mer

s on

LT

sid

e.

Tho

ugh

it is

sta

ted

by t

he B

oard

tha

t m

eter

s ar

e pr

ovid

ed o

n a

num

ber

of f

eede

rs,

man

y of

the

m a

re d

efec

tive

or

non-

func

tiona

l. B

SE

B is

dire

cted

to r

epla

ce a

ll su

ch

met

ers

and

prov

ide

corr

ect

met

ers

on a

ll fe

eder

s fr

om 2

20K

V to

11

KV

leve

l as

wel

l as

LT s

ide

of th

e di

strib

utio

n t

rans

form

er o

n hi

ghes

t prio

rity.

The

ene

rgy

audi

t sh

ould

be

take

n up

firs

t in

all

the

tow

ns w

ith a

pop

ulat

ion

of f

ifty

thou

sand

and

abo

ve.

The

firs

t st

atus

rep

ort

on t

he a

ctio

n ta

ken

for

ener

gy a

udit

in a

ll th

e to

wns

sho

uld

be r

epor

ted

to t

he C

omm

issi

on b

y 31

st

Mar

ch, 2

007

to is

sue

furt

her d

irect

ives

in th

is r

egar

d, if

req

uire

d.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

i) P

FC

ha

s ap

poin

ted

M/s

P

rana

t E

ngin

eeri

ng

Ltd.

un

der

R-A

PD

RP

sc

hem

e to

co

nduc

t th

ird

part

y en

ergy

au

dit.

Exp

erie

nce

gath

ered

will

be

appl

ied

for

non-

RA

PD

RP

are

a.

ii)

BS

EB

is

inst

allin

g ri

ng-f

enci

ng m

eter

s, s

yste

m m

eter

s an

d co

nsum

er m

eter

s in

all

64 t

owns

cov

ered

und

er R

AP

DR

P

and

7 to

wns

cov

ered

und

er A

DB

pla

n. T

he s

tatu

s as

on

08t

h N

ovem

ber,

201

1 is

as

belo

w:

a.

Rin

g F

enci

ng (

33 k

V)

- 5

b.

R

ing

Fen

cing

(11

kV

) –

48

c.

Fee

der

Met

er (

33 k

V)

– 5

d.

Fee

der

Met

er (

11 k

V)

– 4

e.

Con

sum

er M

eter

(33

kV

) –

0 f.

Con

sum

er M

eter

(11

kV

) –

9

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

305

Dire

ctiv

e

g.

DT

Met

er –

10

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

The

Boa

rd h

as n

ot c

ompl

ied

with

the

dir

ectiv

e gi

ven

by t

he C

omm

issi

on.

Fee

der-

wis

e en

ergy

aud

it is

not

bei

ng c

arrie

d ov

er

by t

he B

oard

.

The

Com

mis

sion

dir

ects

the

Boa

rd t

o pr

ovid

e th

e vo

ltage

wis

e de

tails

of

num

bers

of

feed

ers,

fee

der

met

erin

g st

atus

and

pr

esen

t w

orki

ng c

ondi

tion

of fe

eder

met

ers.

Whe

re th

e fe

eder

met

ers

have

bee

n in

stal

led,

the

Boa

rd is

dire

cted

to p

rovi

de th

e en

ergy

aud

it re

port

by

30th J

une

2012

.The

Com

mis

sion

als

o di

rect

s th

e B

oard

to

inst

all

met

ers

on r

emai

ning

fee

ders

and

re

gula

rly u

pdat

e th

e C

omm

issi

on o

n qu

arte

rly

basi

s.

.

Dire

ctiv

e N

o. 9

: Pilf

erag

e of

Ele

ctric

ity

The

nee

d of

the

hour

is to

act

ivat

e th

e or

gani

zatio

n to

cur

b th

e pi

lfera

ge o

f pow

er w

ithin

the

prem

ise

s of

pro

visi

ons

of I

ndia

n E

lect

ricity

Act

200

3 an

d al

so t

he I

ndia

n P

enal

Cod

e. A

tas

k fo

rce

is t

o be

con

stitu

ted

in d

iffe

rent

zon

es t

o w

hich

the

ent

ire li

cens

ee a

rea

is t

o be

div

ided

to

carr

y ou

t m

assi

ve r

aid

to a

rres

t pi

lfera

ge.

In c

ase

of

dete

ctio

n of

su

ch t

heft/

pilfe

rage

, th

e co

ncer

ned

auth

ority

of

the

area

and

per

sonn

el a

ttach

ed t

o th

em,

who

hav

e du

tie

s to

su

perv

ise

the

wor

k, h

ave

to b

e m

ade

answ

erab

le f

or

puni

tive

actio

n. T

hose

fou

nd c

omm

ittin

g m

isch

ief

of p

ilfer

age

shou

ld b

e bo

oked

and

pen

al a

ctio

n sh

ould

vis

it th

em.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

008-

09

To

pre

vent

thef

t of

ener

gy a

nd t

o ca

tch

the

culp

rits

enga

ged

in th

eft o

f en

ergy

, B

oard

has

cre

ated

one

Ant

i Pow

er T

heft

(A

PT

) ce

ll at

Pat

na.

All

supp

ly c

ircle

s ha

ve a

lso

a c

ell f

or A

PT.

Reg

ular

rai

ds a

re b

eing

con

duct

ed in

diff

eren

t ar

eas.

Boa

rd a

t tim

es

has

diff

icul

ty

in g

ettin

g fo

rce

and

mag

istr

ate

for

cond

uctin

g ra

ids.

R

ecen

tly o

n B

oard

’s r

eque

st

DG

P,

Bih

ar

has

sent

in

stru

ctio

ns t

o fie

ld o

ffic

es t

o pr

ovid

e re

quire

d fo

rce

to B

oard

for

car

ryin

g ou

t ra

ids.

In

addi

tion,

Boa

rd is

ins

talli

ng m

eter

s of

S

ecur

e M

eter

s m

ake

whi

ch a

re t

ampe

r pr

oof

and

can

dete

ct p

ilfer

age

and

can

send

mes

sage

to

com

pute

rs a

nd m

obile

ph

one

s. R

ecen

tly B

oard

ha

s cr

eate

d a

Spe

cial

Ta

sk F

orce

(S

TF)

with

sel

ecte

d en

gine

ers

to o

rgan

ize

raid

s to

det

ect

thef

t an

d to

cur

b th

e po

wer

the

ft.

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

200

8-09

Act

ion

take

n by

the

Boa

rd in

org

aniz

ing

the

raid

s to

det

ect

pilfe

rage

etc

., of

ene

rgy

is n

oted

. T

his

has

to b

e in

tens

ified

fur

ther

an

d th

e w

ork

of T

askf

orce

is to

be

mon

itore

d at

hig

her

leve

l. W

here

ver,

if it

is o

bser

ved

that

mal

prac

tice

or p

ilfer

age

of e

nerg

y to

ok p

lace

due

to

negl

igen

ce o

f the

dep

artm

enta

l per

sonn

el, s

uita

ble

disc

iplin

ary

actio

n sh

all b

e in

itiat

ed a

gain

st s

uch

pers

on.

Ene

rgy

audi

t w

ill h

elp

in i

dent

ifyin

g hi

gh l

oss

area

s so

as

to c

once

ntra

te o

n su

ch a

reas

. T

he B

oard

sha

ll al

so c

heck

the

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

306

Dire

ctiv

e

ener

gy s

uppl

ied

to H

T a

nd h

igh

valu

e LT

con

sum

ers

on t

he b

asis

of l

oad

flow

fro

m th

e po

wer

sub

-sta

tions

.

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

010-

11

The

Boa

rd s

ubm

itted

the

stat

us r

epor

t of r

aids

car

ried

out

duri

ng F

Y 2

008-

09 a

nd t

he p

ositi

on fr

om A

pril

2009

to N

ov’0

9.

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

0-11

The

num

ber

of c

onsu

mer

pre

mis

es r

aide

d du

ring

the

per

iod

Apr

il-N

ovem

ber

2009

is

not

adeq

uate

for

the

ent

ire s

tate

. T

he

raid

s ha

ve t

o be

inte

nsifi

ed c

once

ntra

ting

mor

e in

all

the

tow

ns,

HT

and

hig

h va

lue

LT c

onsu

mer

s si

nce

bulk

of e

nerg

y is

sol

d in

tow

ns a

nd t

o H

T a

nd h

igh

valu

e co

nsum

ers.

The

Boa

rd is

dir

ecte

d to

sub

mit

quar

terly

rep

orts

on

the

raid

s co

nduc

ted

and

ener

gy b

illed

and

am

ount

rea

lized

as

a re

sult

of r

aids

.

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

011-

12

The

Boa

rd s

tate

d th

at th

e A

nti ‐t

heft

rai

ds a

re b

eing

car

ried

out b

y di

visi

ons,

circ

les

and

head

quar

ter

STF

team

.

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

1-12

T

he c

ompl

ianc

e re

port

is v

ague

. S

peci

fic n

umbe

r of

crim

inal

cas

es f

iled

afte

r th

e di

rect

ive,

det

ails

of

offe

nder

s, a

nd a

mou

nt

asse

ssed

and

rea

lised

und

er s

ectio

n 12

6 of

the

Act

may

be

subm

itted

by

the

Boa

rd a

long

with

the

next

tar

iff p

etiti

on.

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

i) S

peci

al c

ourt

s un

der

sect

ion

135

of E

lect

ricity

Act

, 200

3 ha

s be

en c

onst

itute

d at

Pat

na, G

aya

and

Muz

affa

rpur

; ii)

P

ropo

sal

of f

or s

ettin

g up

a s

peci

al p

olic

e st

atio

n fo

r P

ES

U a

rea

to c

urb

thef

t of

ele

ctric

ity h

as b

een

sent

to

the

Gov

ernm

ent

of B

ihar

; iii

) S

peci

al t

ask

forc

e of

BS

EB

is c

ondu

ctin

g su

per

chec

ks a

ll ov

er B

ihar

aga

inst

thef

t of

pow

er;

iv)

Cri

min

al p

rose

cutio

ns a

nd d

epar

tmen

tal

proc

eedi

ngs

in a

dditi

on t

o ot

her

disc

iplin

ary

mea

sure

s in

itiat

ed a

gain

st

offic

ers

and

staf

f of B

SE

B fo

und

invo

lved

in u

naut

horiz

ed u

se o

f po

wer

by

cons

umer

s;

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

The

Com

mis

sion

rei

tera

tes

its d

irect

ive

and

dire

cts

the

Boa

rd t

o pr

ovid

e re

port

by

30th J

une,

201

2 S

peci

fic n

umbe

r of

cri

min

al

case

s fil

ed a

fter

the

issu

e of

dire

ctiv

e, d

etai

ls o

f of

fend

ers,

and

am

ount

ass

esse

d se

para

tely

for

eac

h fin

anci

al y

ear

from

FY

20

06-0

7 to

FY

201

0-11

.

The

Boa

rd i

s al

so d

irect

ed t

o su

bmit

circ

le-w

ise

deta

ils o

f ra

ids

cond

ucte

d, F

IRs

lodg

ed,

amou

nt a

sses

sed,

am

ount

rea

lized

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

307

Dire

ctiv

e

for

FY

201

1-12

. T

here

afte

r th

e B

oard

sha

ll su

bmit

circ

le w

ise

repo

rt o

n ra

id c

ondu

cted

and

FIR

lod

ged

indi

catin

g th

e af

ores

aid

on q

uart

erly

bas

is.

Dire

ctiv

e N

o. 1

0:

Enu

mer

atio

n of

A

gric

ultu

re P

ump-

sets

&

Oth

er S

ervi

ce C

onne

ctio

ns

It is

und

erst

ood

that

the

re a

re a

num

ber

of u

naut

horiz

ed a

gric

ultu

ral

pum

pset

s an

d ot

her

serv

ice

conn

ect

ions

co

nnec

ted

to t

he s

yste

m p

artic

ular

ly i

n th

e ru

ral

are

as.

The

Boa

rd s

hall

get

all

agric

ultu

ral

pum

pset

s a

nd o

ther

se

rvic

e co

nnec

tions

enu

mer

ated

to

iden

tify

the

unau

thor

ized

con

nect

ions

and

get

the

m r

egul

ariz

ed b

y pr

ovid

ing

met

ers.

A

re

port

on

th

e ac

tion

take

n to

ge

t ag

ricul

tura

l an

d ot

her

conn

ectio

ns

enum

erat

ed

to

iden

tify

the

unau

thor

ized

con

nect

ion

and

to r

egul

ariz

e th

em s

hal

l be

plac

ed b

efor

e th

e C

omm

issi

on b

y 30

th J

une,

200

7.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

The

Boa

rd s

tate

d th

at it

has

dis

cuss

ion

with

BE

RC

as

dire

cted

. B

SE

B h

as c

ondu

cted

Pilo

t st

udy

of c

olle

ctio

n of

dat

a in

som

e vi

llage

s w

here

100

% m

eter

ing

of a

gric

ultu

re s

ervi

ces

has

been

don

e. T

he d

ata

of p

ilot s

tudy

is s

ubm

itted

.

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

As

per

the

repo

rt s

ubm

itted

by

the

Boa

rd n

o sp

ecifi

c an

alys

is a

nd a

sses

smen

t ha

s be

en d

one.

The

Com

mis

sion

is

of t

he v

iew

tha

t th

e B

oard

sho

uld

have

pro

vide

d an

act

ion

plan

to

take

on

the

task

on

stat

e le

vel.

How

ever

, th

e B

oard

has

fai

led

to d

o so

. It

appe

ars

that

the

Boa

rd h

as n

ot t

aken

any

tan

gibl

e st

eps

in t

his

rega

rds.

Fur

ther

, th

e C

omm

issi

on d

irec

ts t

he B

oard

to

subm

it th

e ac

tion

plan

to

iden

tify

such

una

utho

rize

d co

nnec

tion

and

to r

egul

ariz

e th

em

and

plac

ed b

efor

e th

e C

omm

issi

on b

y 30

th J

une,

201

2.

Dire

ctiv

e N

o. 1

1:

Ass

essm

ent o

f A

gric

ultu

ral C

onsu

mpt

ion

Tho

ugh

ener

gy c

onsu

med

by

agric

ultu

re s

ecto

r co

nsti

tute

s a

sign

ifica

nt p

art

of t

otal

ene

rgy

cons

umpt

ion

in t

he

Sta

te,

all

the

irrig

atio

n pu

mps

ets

in t

he S

tate

are

unm

eter

ed a

nd b

illed

at

flat

rate

bas

is.

The

BS

EB

fo

r re

alis

tic

asse

ssm

ent

of e

nerg

y co

nsum

ptio

n by

agr

icul

ture

sec

tor,

sha

ll ta

ke s

teps

to

corr

ectly

ass

ess

cons

umpt

ion

/ lo

ad

fact

or o

f ag

ricul

ture

con

sum

ers

base

d on

con

nect

ed

load

, ar

ea,

regi

on,

crop

ping

pat

tern

, nu

mbe

r of

cro

ps,

wat

er

sour

ces,

etc

. by

arr

angi

ng p

rope

r m

eter

ing

for

all

irrig

atio

n pu

mps

ets

in t

he S

tate

whe

reve

r it

is n

ot d

one.

Sin

ce i

t m

ay t

ake

time,

mea

nwhi

le m

eter

s sh

all b

e in

stal

led

on L

T s

ide

of D

istr

ibut

ion

Tra

nsfo

rmer

exc

lusi

vely

co

nnec

ted

to

agric

ultu

re c

onsu

mer

s/ p

umps

ets.

Thi

s w

ould

giv

e fa

irly

reas

onab

le a

sses

smen

t abo

ut c

onsu

mpt

ion

of e

lect

ricity

by

pum

pset

s. T

he B

SE

B s

hall

com

e ou

t w

ith a

n ac

tion

plan

for

thi

s jo

b by

31s

t M

arch

, 20

07 t

o be

pla

ced

befo

re t

he

Com

mis

sion

and

pur

suan

t th

eret

o th

e ac

tion

take

n on

the

pla

n sh

all a

lso

be m

ade

avai

labl

e to

the

Com

mi

ssio

n by

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

308

Dire

ctiv

e

31st

Jul

y, 2

007.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

No

Res

pons

e ha

s be

en p

rovi

ded

by t

he B

oard

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

As

per

the

repo

rt s

ubm

itted

by

the

Boa

rd n

o p

rope

r a

naly

sis

and

asse

ssm

ent

of A

gric

ultu

re c

onsu

mpt

ion

has

been

don

e as

di

rect

ed i

n th

e T

ariff

Ord

er f

or F

Y 2

010-

11.

It ap

pear

s th

at t

he B

oard

has

not

tak

en a

ny t

angi

ble

step

s fo

r as

sess

ing

the

cons

umpt

ion

patte

rn f

or a

gric

ultu

re c

onsu

mer

s S

o th

e di

rect

ive

is a

gain

rei

tera

ted

and

the

Boa

rd i

s di

rect

ed t

o su

bmit

the

actio

n pl

an fo

r ca

rryi

ng o

ut s

tudy

in th

is r

egar

d in

diff

eren

t par

ts o

f the

sta

te b

y 30

th J

une

2012

.

Dire

ctiv

e N

o. 1

2:

Reg

ulat

ion

of P

ower

S

uppl

y to

Rur

al A

reas

The

Boa

rd m

ay s

tudy

the

pra

ctic

es b

eing

follo

wed

in o

ther

Sta

tes

and

draw

out

a s

chem

e to

reg

ulat

e po

wer

sup

ply

to

rura

l ar

eas,

pa

rtic

ular

ly,

to

agric

ultu

ral

pum

p se

ts,

and

subm

it su

ch

a sc

hem

e to

th

e C

omm

issi

on

for

cons

ider

atio

n an

d ap

prov

al b

y 31

st M

arch

200

7.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

No

Spe

cific

Res

pons

e ha

s be

en p

rovi

ded

by th

e B

oard

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

The

Com

mis

sion

dir

ects

the

Boa

rd t

o su

bmit

spec

ific

sche

mes

bei

ng f

ollo

wed

in

the

othe

r st

ates

and

in

the

Bih

ar S

tate

E

lect

rici

ty B

oard

and

fut

ure

actio

n pl

an f

or F

Y 2

012-

13 t

o re

gula

te t

he P

ower

sup

ply

to r

ural

are

a pa

rtic

ular

ly t

o A

gric

ultu

re

pum

p se

ts b

y 30

th J

une

2012

.

Dire

ctiv

e N

o. 1

3: Q

ualit

y of

P

ower

Sup

ply

and

Ser

vice

It is

und

erst

ood

that

a n

umbe

r of

LT

line

s in

the

rur

al a

reas

hav

e no

con

duct

ors

and

the

villa

gers

/ c

onsu

mer

s ar

e w

ithou

t sup

ply.

The

Boa

rd m

ay d

raw

out a

sch

eme

to r

esto

re a

ll su

ch li

nes

and

to s

tren

gthe

n th

e di

strib

utio

n sy

stem

w

here

ver

requ

ired,

as

it is

nec

essa

ry t

o pr

ovid

e po

wer

sup

ply

to a

ll co

nsum

ers

at a

rea

sona

ble

volta

ge a

nd w

ith

min

imum

inte

rrup

tions

. Th

e fu

nds

avai

labl

e fr

om R

GG

VY

and

oth

er R

ural

ele

ctrif

icat

ion

sche

mes

sha

ll be

ava

iled

to

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

309

Dire

ctiv

e

to C

onsu

mer

im

prov

e th

e sy

stem

. The

Boa

rd s

hall

sub

mit

its s

chem

e to

str

engt

hen

the

tran

smis

sion

& d

istr

ibut

ion

syst

ems

to th

e C

omm

issi

on b

y 31

st M

arch

200

7.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

i) O

n ac

coun

t of

hug

e in

vest

men

t ne

eded

for

res

tora

tion

of l

ines

whi

ch h

as n

o co

nduc

tors

, it

is n

ot p

ossi

ble

for

BS

EB

alo

ne to

rev

ive

the

dead

dis

trib

utio

n sy

stem

on

its o

wn.

ii)

H

owev

er,

RG

GV

Y p

rogr

am,

elec

trifi

catio

n fo

r su

ch s

yste

ms

has

been

pro

pose

d an

d is

like

ly to

be

com

plet

ed

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

The

Com

mis

sion

is n

ot s

atis

fied

with

the

res

pons

e of

the

Boa

rd a

nd o

nce

agai

n di

rect

s th

e B

oard

to

subm

it a

com

preh

ensi

ve

plan

to

impr

ove

the

qual

ity o

f su

pply

and

ser

vice

to

cons

umer

s an

d m

eet

the

Sta

ndar

ds o

f pe

rfor

man

ce a

s st

ipul

ated

in t

he

Reg

ulat

ion.

The

Boa

rd s

hall

also

pro

vide

qua

rter

ly r

epor

t on

the

exi

stin

g st

atus

whe

re t

he B

oard

has

mad

e e

ffort

to

impr

ove

the

Pow

er s

uppl

y b

y in

stal

ling

addi

tiona

l tra

nsfo

rmer

s an

d lin

e ca

paci

ty.

Dire

ctiv

e N

o. 1

4:

Man

agem

ent I

nfor

mat

ion

Sys

tem

The

Boa

rd is

dire

cted

to

take

urg

ent

step

s to

bui

ld a

cre

dibl

e an

d ac

cura

te d

atab

ase

and

man

agem

ent

info

rmat

ion

syst

em w

ith u

nbun

dled

cos

ts a

nd e

xpen

ditu

re o

f th

e th

ree

busi

ness

es o

f th

e B

oard

viz

. G

ener

atio

n, T

ran

smis

sion

an

d D

istr

ibut

ion

to m

ake

info

rmat

ion

avai

labl

e on

ope

ratio

nal

and

finan

cial

iss

ues

and

get

such

dat

a u

pdat

ed o

n m

onth

ly b

asis

. A

dvan

tage

of

IT m

ust

be t

aken

to

ins

titut

e th

e M

IS.

Act

ion

mus

t be

tak

en u

rgen

tly o

n th

is a

nd t

he

actio

n ta

ken

shal

l be

repo

rted

to th

e C

omm

issi

on b

y 3

1st

Mar

ch, 2

007.

Car

e m

ust b

e ta

ken

to s

ee th

at t

he n

ext t

ariff

pe

titio

n is

sup

port

ed b

y an

acc

urat

e an

d cr

edib

le d

atab

ase.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

No

spec

ific

resp

onse

has

bee

n pr

ovid

ed b

y th

e B

oard

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

B

SE

B in

the

tar

iff p

etiti

on fo

r F

Y 2

011-

12 h

as s

tate

d th

at B

SE

B h

as is

sued

lette

r of

inte

nt (

LOI)

to M

/s S

PA

NC

O L

td. G

urga

on

for

appo

intm

ent

as I

T im

plem

entin

g A

genc

y on

29.

11.2

010.

As

the

IT im

plem

enta

tion

agen

cy w

as a

ppoi

nted

on

29th N

ov’1

0,

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

310

Dire

ctiv

e

the

Boa

rd is

dir

ecte

d to

sub

mit

the

late

st p

rogr

ess

repo

rt o

n im

plem

enta

tion

of M

IS to

the

Com

mis

sion

by

30th J

une

2012

.

Dire

ctiv

e N

o. 1

5: A

nnua

l A

ccou

nts

of th

e B

SE

B

The

Boa

rd i

s di

rect

ed t

o ac

cord

hig

hest

prio

rity

and

ensu

re t

hat

the

acco

unts

of

thes

e ye

ars

are

duly

au

dite

d by

A

ccou

ntan

t G

ener

al,

Bih

ar b

y M

arch

, 20

07.

BS

EB

sho

uld

file

the

AR

R a

nd ta

riff

petit

ion

for

the

next

ye

ar s

uppo

rted

w

ith a

udite

d ac

coun

ts.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

No

Spe

cific

res

pons

e ha

s be

en p

rovi

ded

by t

he B

oard

. H

owev

er t

he r

ecor

d sh

ows

that

the

ann

ual a

ccou

nt o

f th

e B

oard

upt

o F

Y 2

010-

11 h

ave

been

aud

ited.

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

T

he C

omm

issi

on h

as n

oted

the

com

plia

nce.

The

Boa

rd s

hall

file

tarif

f pe

titio

n w

ith a

udite

d an

nual

acc

ount

s as

req

uire

d in

the

B

ER

C (

Ter

ms

and

cond

ition

s fo

r de

term

inat

ion

of T

ariff

) re

gula

tions

, 200

7.

Dire

ctiv

e N

o. 1

6: A

rrea

rs

The

Boa

rd s

houl

d pr

epar

e ar

ea-w

ise

list

of c

onsu

mer

s ha

ving

hug

e ar

rear

s an

d fu

rnis

h to

the

Com

mis

sion

in

the

form

at g

iven

bel

ow.

The

outs

tand

ing

from

the

Sta

te

Gov

ernm

ent

Dep

artm

ents

, G

over

nmen

t U

nder

taki

ngs,

lo

cal

bodi

es a

nd p

rivat

e pa

rtie

s sh

all

also

be

furn

ishe

d se

para

tely

by

31st

Jan

uary

, 20

07 i

n th

e fo

llow

ing

for

mat

giv

en

belo

w:

Act

ion

take

n sh

all b

e re

port

ed to

the

Com

mis

sion

by

31s

t M

arch

, 200

7.

Sl.

Nam

e of

Con

sum

er/

orga

niza

tion

Mon

th &

Yea

r th

e A

mou

nt d

ue

Ene

rgy

char

ges

Bill

ed

Del

ayed

Pay

men

t Cha

rges

T

otal

Com

plia

nce

stat

us o

f dire

ctiv

e

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

311

Dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

For

FY

201

0-11

, B

SE

B h

as

reco

vere

d ar

rear

s of

Rs.

583

.60

Cr.

fro

m G

over

nmen

t d

epar

tmen

ts a

nd R

s. 1

185.

33 C

r. f

rom

P

riva

te c

onsu

mer

s.

Nam

e of

Con

sum

er/

orga

niza

tion

Out

stan

ding

due

s as

on

31.0

3.20

11 (

Rs.

Cr.

) C

olle

ctio

n ag

ains

t due

s (R

s.C

r.)

Gov

t. 31

46.0

4

583.

60

Priv

ate

4981

.52

11

85.3

3

Tot

al

8127

.56

1768

.93

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

T

he d

etai

ls a

s de

sire

d in

the

dir

ectiv

es h

ave

not

been

com

plie

d. S

o th

e C

omm

issi

on a

gain

rei

tera

tes

its d

irec

tive

give

n in

TO

fo

r F

Y 2

006-

07 a

nd d

irec

ts th

e B

oard

to s

ubm

it th

e re

port

to

the

Com

mis

sion

by

30th J

une

2012

.

Dire

ctiv

e N

o. 1

7:

Col

lect

ion

of A

rrea

rs

The

Boa

rd s

houl

d su

bmit

the

deta

ils o

f rec

over

y of

ar

rear

s un

der

the

first

OT

S a

nnou

nced

in A

pril

2006

and

als

o th

e re

cove

ry u

nder

the

seco

nd O

TS

sch

eme

in f

orce

fro

m

Oct

ober

200

6 on

war

ds in

for

mat

giv

en b

elow

. T

he f

irst

rep

ort

shal

l be

subm

itted

by

31st

Jan

uary

200

7 an

d th

e se

con

d re

port

afte

r th

e sc

hem

e is

ove

r in

Mar

ch 2

007.

Sl.

Nam

e of

Con

sum

er/

orga

niza

tion

Am

ount

of

arre

ars

due

Am

ount

of

DP

S d

ue

Arr

ears

C

olle

cted

D

PS

W

aive

d T

otal

Col

lect

ion

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

For

FY

201

0-11

, B

SE

B h

as

reco

vere

d ar

rear

s of

Rs.

583

.60

Cr.

fro

m G

over

nmen

t d

epar

tmen

ts a

nd R

s. 1

185.

33 C

r. f

rom

P

riva

te c

onsu

mer

s.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

312

Dire

ctiv

e

Con

sum

ers

Out

stan

ding

due

s as

on

31.0

3.20

11

(Rs.

Cr.

) C

olle

ctio

n ag

ains

t due

s (R

s. C

r.)

Gov

ernm

ent

3146

.04

58

3.60

Pri

vate

49

81.5

2

1185

.33

Tota

l 81

27.5

6 17

68.9

3

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

The

Boa

rd b

een

dire

cted

to

furn

ish

the

deta

ils o

f the

firs

t an

d se

cond

OT

S s

chem

es b

ut B

SE

B h

as n

ot s

ubm

itted

suc

h de

tails

The

Com

mis

sion

is d

ispl

ease

d w

ith t

he e

ffort

s of

the

Pet

ition

er f

or c

olle

ctio

n of

arr

ear

incl

udin

g D

PS

. T

he C

omm

issi

on a

gain

di

rect

s th

e P

etiti

oner

to

take

app

ropr

iate

act

ion

on c

onne

cted

/ di

scon

nect

ed c

onsu

mer

s no

t pa

ying

DP

S a

nd a

lso

prep

are

a st

rate

gy f

or c

olle

ctio

n of

arr

ear

and

DP

S f

rom

con

nect

ed a

s w

ell

as d

isco

nnec

ted

cons

umer

s. T

he B

SE

B s

hall

subm

it th

e ac

tion

take

n re

port

by

30th J

une

2012

.

Dire

ctiv

e N

o. 1

8: A

sset

R

egis

ter

The

B

oard

sh

all

mai

ntai

n se

para

te

asse

t re

gist

ers

for

th

e 3

busi

ness

es

viz.

G

ener

atio

n,

Tra

nsm

issi

on

and

D

istr

ibut

ion.

If

such

reg

iste

rs a

re a

lread

y av

aila

ble

, th

e sa

me

may

be

subm

itted

to

the

Com

mis

sion

for

per

usal

. In

ca

se s

uch

regi

ster

s ar

e no

t ava

ilabl

e th

e sa

me

may

be

got

pre

pare

d by

Jul

y, 2

007

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

BS

EB

has

initi

ated

the

proc

ess

on t

he f

ollo

win

g as

pect

s

i) F

or

new

as

set

crea

ted

unde

r sc

hem

es

like

RA

PD

RP

, R

SV

Y,

RG

GV

Y

ass

et

regi

ster

ar

e be

ing

crea

ted.

M

aint

enan

ce o

f ass

et r

egis

ter

for

all a

sset

s re

quir

es I

T en

able

d m

echa

nism

hug

e fin

anci

al in

vest

men

t; ii)

S

hri S

hung

lu C

omm

ittee

had

not

ed t

he p

oor

finan

cial

hea

lth o

f ut

ilitie

s;

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

The

dir

ectiv

e w

as g

iven

in T

ariff

Ord

er f

or F

Y 2

006-

07 s

ince

the

n th

e B

oard

has

not

bee

n ab

le to

pre

pare

the

ass

ets

regi

ster

. T

his

show

s th

e la

ck o

f int

eres

t of

the

Boa

rd in

pre

para

tion

of a

sset

s re

gist

er.

The

Com

mis

sion

dire

cts

the

Boa

rd t

o co

nduc

t st

udy

for

crea

tion

of f

unct

ion-

wis

e F

ixed

Ass

et R

egis

ters

(F

AR

). T

he F

ixed

A

sset

s re

gist

er s

houl

d be

pre

pare

d w

ithin

the

tim

e bo

und

man

ner

and

the

Pet

ition

er s

houl

d su

bmit

the

actio

n ta

ken

repo

rt

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

313

Dire

ctiv

e

and

late

st s

tatu

s of

the

pre

para

tion

of a

sset

reg

iste

r to

the

Com

mis

sion

in

this

reg

ard

by 3

0th J

une

20

12 f

ollo

wed

by

subm

issi

on o

f qua

rter

ly p

rogr

ess

mad

e fo

r pr

epar

atio

n of

ass

et r

egis

ter.

Dire

ctiv

e N

o. 1

9: T

ime

of

Day

(T

oD)

Tar

iff

Som

e co

nsum

er o

rgan

izat

ions

hav

e su

gges

ted

to i

ntro

duce

TO

D t

ariff

whi

ch w

ill h

elp

flatte

ning

of

load

cu

rve

and

redu

ce p

eak

dem

and.

The

Nat

iona

l Ele

ctric

ity P

olic

y a

lso

stip

ulat

es f

or in

trod

uctio

n of

TO

D t

ariff

. B

SE

B s

hall

com

e up

with

a p

lan

for

intro

duct

ion

of T

OD

tar

iff a

nd m

eter

ing

for

HT

con

sum

ers

in t

he f

irst

phas

e fo

llow

ed

by L

T

indu

strie

s an

d N

on –

Dom

estic

con

sum

ers.

Suc

h pl

an s

hall

be s

ubm

itted

to

the

Com

mis

sion

alo

ng w

ith n

ext

tar

iff

petit

ion.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

i) 10

0% c

ompl

ianc

e ac

hiev

ed.

ii)

Und

er R

-AP

DR

P s

chem

e, T

oD c

ompl

iant

met

ers

are

bein

g in

stal

led.

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

The

Com

mis

sion

has

tak

en n

ote

of th

e st

eps

take

n by

the

Pet

ition

er a

nd d

irect

s th

e B

oard

to s

ubm

it th

e la

test

sta

tus

repo

rt to

th

e C

omm

issi

on b

y 30

th J

une

2012

, th

e lis

t of

con

sum

ers

(200

kV

A a

nd A

bove

) in

who

se p

rem

ises

the

ToD

met

ers

have

bee

n in

stal

led

and

billi

ng is

don

e on

ToD

Tar

iff.

Dire

ctiv

e N

o. 2

0: R

ecov

ery

of F

uel P

rice

Adj

ustm

ent

from

Con

sum

ers

Pay

ing

Mon

thly

Min

imum

Cha

rges

An

issu

e ha

s be

en r

aise

d by

a n

umbe

r of

con

sum

ers/

con

sum

er o

rgan

izat

ions

tha

t th

e B

oard

is

reco

verin

g th

e fu

el

adju

stm

ent c

harg

es o

n m

onth

ly m

inim

um c

onsu

mpt

ion

and

not

on

the

actu

al e

nerg

y co

nsum

ptio

n by

the

cons

umer

. T

hus

the

cons

umer

has

to p

ay fu

el a

djus

tmen

t cha

rge

s fo

r th

e en

ergy

act

ually

not

con

sum

ed. T

he C

omm

iss

ion

is o

f th

e op

inio

n th

at th

e fu

el a

djus

tmen

t cha

rges

sha

ll be

cha

rged

onl

y on

ene

rgy

actu

ally

con

sum

ed a

nd n

ot o

n m

onth

ly

min

imum

con

sum

ptio

n.

The

BS

EB

sha

ll su

bmit

a fa

ctua

l rep

ort i

n th

e m

atte

r to

the

Com

mis

sion

by

31st

Jan

uary

200

7.

Com

plia

nce

stat

us o

f dire

ctiv

e

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

314

Dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

No

Spe

cific

res

pons

e ha

s be

en p

rovi

ded

by th

e B

oard

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

Dur

ing

the

publ

ic h

eari

ng a

t va

rious

pla

ces

it ha

s co

me

to t

he n

otic

e of

the

Com

mis

sion

tha

t th

e de

tails

of

units

, ra

tes

and

peri

od fo

r w

hich

FP

PC

A a

re c

harg

es a

re n

ot s

how

n in

the

Con

sum

er’s

bill

s. M

oreo

ver

the

field

offi

cial

s ar

e no

t abl

e to

exp

lain

th

is t

o th

e co

nsum

ers.

The

refo

re t

he B

oard

is

dire

cted

to

prov

ide

full

deta

ils o

f F

PP

CA

cha

rges

in

the

bills

and

sub

mit

com

plia

nce

with

spe

cim

en c

opy

of b

ills

of a

tleas

t te

n (1

0) s

uppl

y ci

rcle

s re

latin

g to

LT

con

sum

ers

to t

he C

omm

issi

on b

y 30

th

May

201

2.

Dire

ctiv

e N

o. 2

1: F

uel &

P

ower

Pur

chas

e P

rice

Adj

ustm

ent

A f

orm

ula

is a

ppro

ved

by t

he C

omm

issi

on f

or a

djus

tmen

t of

any

inc

reas

e /

decr

ease

in

fuel

pric

es a

nd p

ower

pu

rcha

se p

rice.

Any

adj

ustm

ents

in

the

Fue

l /

Pow

er p

urch

ase

cost

s, t

he a

dditi

onal

cos

t to

be

reco

vere

d fr

om

cons

umer

s or

to

be r

efun

ded

shal

l be

got

appr

oved

by

the

Com

mis

sion

on

furn

ishi

ng a

ll re

leva

nt d

etai

ls a

nd d

ata

requ

ired

to e

nabl

e pr

oper

cal

cula

tion.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

No

Res

pons

e ha

s be

en p

rovi

ded

by t

he B

oard

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

T

he c

ompl

ianc

e ha

s be

en n

oted

by

the

Com

mis

sion

and

it is

dir

ects

the

Boa

rd t

o ge

t ap

prov

al o

f an

y ad

just

men

t/ r

ecov

ery

of

FP

PC

A f

rom

the

Com

mis

sion

.

Dire

ctiv

e N

o. 2

2:

Adj

ustm

ent o

f Pay

men

t of

Cur

rent

Bill

s ag

ains

t D

elay

ed P

aym

ent

Sur

char

ge (

DP

S)

The

issu

e sh

all b

e ex

amin

ed in

det

ail a

nd a

rep

ort

on t

he p

roce

dure

fol

low

ed s

hall

be s

ubm

itted

to

the

Com

mis

sion

by

31s

tJan

uary

200

7 in

ord

er to

ena

ble

the

Com

mis

sion

to m

ake

a st

udy

of th

e is

sue

and

issu

e ne

cess

ary

dire

ctio

ns

in th

e m

atte

r.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

315

Dire

ctiv

e

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

No

Res

pons

e ha

s be

en p

rovi

ded

by t

he B

oard

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

The

Boa

rd i

s di

rect

ed t

o fu

rnis

h th

e up

date

d st

atus

of

the

proc

edur

e fo

llow

ed f

or a

djus

tmen

t of

pay

men

t of

cur

rent

bill

s ag

ains

t D

PS

by

30th J

uly

2012

.The

Boa

rd s

hall

also

sub

mit

cate

gory

wis

e th

e de

tails

of

DP

S c

harg

ed a

nd r

ecov

ered

fro

m

each

cir

cle

of B

SE

B b

y 30

th J

uly

2012

.

Dire

ctiv

e N

o. 2

3:

Org

aniz

ing

Ope

ratio

nal

Circ

les

as C

ost C

ente

rs

The

Boa

rd w

as d

irect

ed t

o dr

aw o

ut a

act

ion

plan

to

org

aniz

e th

e co

st c

entr

es u

pto

divi

sion

lev

el t

o m

ake

them

ac

coun

tabl

e fo

r th

eir p

erfo

rman

ce o

n pr

ofit

and

los

s ac

coun

t and

sub

mit

repo

rts

to C

omm

issi

on b

y 31

st

Mar

ch 2

007.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

The

Boa

rd s

tate

d th

at th

e C

ircl

e-w

ise

P&

L ac

coun

t fo

r F

Y 2

009-

10 is

pro

vide

d in

Ann

exu

re –

III

alon

g w

ith t

he t

ariff

pet

ition

of

FY

201

2-13

.

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

The

Com

mis

sion

dire

cts

to s

ubm

it th

e ci

rcle

-wis

e de

taile

d pl

an o

n cr

eatio

n of

pro

fit c

entr

es o

n pi

lot

prog

ram

bas

is f

or

appr

oval

of

the

Com

mis

sion

with

in th

e pe

riod

of 3

mon

ths.

The

Com

mis

sion

als

o di

rect

s th

e P

etiti

oner

to s

ubm

it a

time

boun

d A

ctio

n P

lan

indi

catin

g th

eir

prop

osal

s fo

r re

duct

ion

in A

T&

C L

osse

s, E

nerg

y A

udit,

Rea

lisat

ion

of A

rrea

rs,

Impr

ovem

ent

in

Col

lect

ion

Sys

tem

, In

stal

latio

n of

Aer

ial

Bun

ch C

able

Con

duct

ors

in H

igh

Loss

pro

ne a

reas

and

rep

lace

men

t of

Ele

ctro

-m

echa

nica

l Met

ers

with

Sta

tic M

eter

s fo

r su

ch p

ilot a

rea.

Dire

ctiv

e N

o. 2

4:

Per

form

ance

of B

SE

B’s

ow

n ge

nera

ting

stat

ions

an

d th

eir p

aram

eter

s

The

Boa

rd s

hall

subm

it a

deta

iled

repo

rt o

n th

e cu

rre

nt s

tatu

s of

R&

M a

nd r

esto

ratio

n of

gen

erat

ing

units

at b

oth

the

pow

er s

tatio

ns a

long

with

rep

ort

on a

ctio

n ta

ken

abou

t pe

rform

ance

par

amet

ers

of i

ts g

ener

atin

g st

atio

ns b

y 31

st

Janu

ary,

200

7.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

316

Dire

ctiv

e

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

In t

he T

arff

petit

ion

the

Boa

rd h

as s

tate

d th

at B

SE

B h

as t

aken

up

R&

M w

ork

of U

nit

VI

and

VII

of B

TP

S u

nder

the

RS

VY

sc

hem

e sa

nctio

ned

by th

e P

lann

ing

Com

mis

sion

, Gov

ernm

ent

of In

dia.

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

T

he B

oard

is d

irect

ed to

furn

ish

the

upda

ted

stat

us o

f R&

M a

ctiv

ities

of

unit

no.

VI a

nd V

II of

BT

PS

by

30th J

uly

2012

.

Dire

ctiv

e N

o. 2

5: N

ew

Gen

erat

ion

Pro

ject

s T

he B

SE

B i

s di

rect

ed t

o ex

pedi

te t

he p

roce

ss o

f se

ttin

g up

of

new

gen

erat

ion

proj

ects

in

the

Sta

te a

nd s

ubm

it qu

arte

rly p

rogr

ess

repo

rt o

n th

e sa

me

to th

e C

omm

issi

on. T

he fi

rst s

uch

repo

rt s

hall

be s

ubm

itted

in A

pril

2007

.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

No

spec

ific

resp

onse

s ha

s be

en p

rovi

ded

by th

e B

oard

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

T

he B

oard

is d

irec

ted

to f

urni

sh t

he u

pdat

ed s

tatu

s of

new

gen

erat

ing

plan

t pl

anne

d to

be

inst

alle

d in

the

sta

te in

dica

ting

the

likel

y da

te o

f com

mis

sion

ing

on q

uart

erly

bas

is a

nd fi

rst s

uch

repo

rt b

e su

bmitt

ed b

y 10

st J

uly

2012

Dire

ctiv

e N

o. 2

6: E

mpl

oyee

co

st

As

per

info

rmat

ion

mad

e av

aila

ble

by t

he B

SE

B,

the

empl

oyee

cos

t of

BS

EB

is h

igh

whi

ch s

tand

s at

abo

ut 4

0% o

f th

e to

tal r

even

ue in

com

e fr

om s

ale

of p

ower

at e

xis

ting

tarif

f. It

wor

ks o

ut to

be

arou

nd 1

20 p

aise

pe

r kW

h of

ene

rgy

sold

, w

here

as,

in o

ther

sta

tes,

eve

n w

here

the

Sta

te

Ele

ctric

ity B

oard

has

not

bee

n re

stru

ctur

ed, i

t i

s of

the

orde

r of

60

pai

se p

er k

Wh

of e

nerg

y so

ld. T

here

is n

o in

fras

truc

ture

in s

ome

cruc

ial a

nd im

port

ant

activ

ities

whe

reas

ther

e is

ex

cess

sta

ff in

som

e de

part

men

ts,

whi

ch a

re n

ot s

o si

gnifi

cant

. T

he B

SE

B i

s di

rect

ed t

o en

forc

e ec

onom

y an

d au

ster

ity m

easu

res

in t

heir

oper

atio

ns a

nd t

ake

urg

ent

step

s to

red

uce

esta

blis

hmen

t co

st b

y ut

ilizi

ng t

he e

xist

ing

man

-pow

er o

ptim

ally

im

posi

ng r

estr

ictio

ns o

n cr

eati

on o

f po

sts,

int

rodu

cing

rev

ised

wor

k lo

ad n

orm

s an

d al

so

redu

cing

pos

ts w

hich

are

not

sig

nific

ant

BS

EB

sha

ll s

et u

p a

com

mitt

ee t

o su

gges

t an

d re

com

men

d de

ploy

men

t of

ex

istin

g m

an-p

ower

to

achi

eve

optim

um u

tiliz

atio

n o

f av

aila

ble

wor

k fo

rce.

BS

EB

is

also

dire

cted

to

iden

tify

the

surp

lus

staf

f and

dep

loy

them

, afte

r pr

oper

tra

inin

g, in

the

are

as o

f cu

stom

er s

ervi

ce,

such

as

met

er

read

ing,

bill

ing

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

317

Dire

ctiv

e

and

reve

nue

real

izat

ion,

so

as to

pro

vide

bet

ter

serv

ice

to th

e co

nsum

ers.

A r

epor

t on

the

actio

n ta

ken

may

be

sent

to

the

Com

mis

sion

by

30th

Jun

e 20

07.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

i) T

he d

etai

led

zero

-bas

ed a

naly

sis

of m

an-p

ower

has

bee

n do

ne.

BS

EB

is

wor

king

with

man

-pow

er l

esse

r th

an

zero

ba

sed

man

pow

er r

equi

rem

ent.

ii)

Cir

cula

r ha

s be

en is

sued

for

aus

teri

ty a

nd le

sser

exp

ens

es

to a

ll of

ficer

s.

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

T

he d

irec

tives

giv

en i

n pr

evio

us T

ariff

Ord

er h

as n

ot b

een

com

plie

d by

the

Boa

rd.

No

stud

y re

port

in

this

reg

ard

has

been

su

bmitt

ed b

y th

e B

oard

till

date

. So,

the

Boa

rd is

dire

cted

to s

ubm

it th

e st

udy

repo

rt a

nd a

naly

sis

done

by

31st J

uly

2012

.

Dire

ctiv

e N

o. 2

7: E

nerg

y co

nser

vatio

n

A w

ell-k

now

n pr

over

b is

tha

t en

ergy

con

serv

ed i

s en

ergy

gen

erat

ed a

nd t

o co

nser

ve e

nerg

y, t

he c

onsu

mer

s ar

e re

quire

d to

be

wel

l edu

cate

d by

way

of

dem

onst

ratio

ns,

hold

ing

mee

tings

at

vario

us le

vels

and

thr

ough

pr

int

med

ia

so t

hat

ener

gy c

onsu

mpt

ion

can

be r

educ

ed c

onsi

dera

bly

by

adop

ting

econ

omy

mea

sure

s su

ch a

s us

e of

ene

rgy

effic

ienc

y lig

htin

g, h

igh

effic

ienc

y an

d st

anda

rd m

ake

hous

ehol

d ap

plia

nces

, hi

gh e

ffici

ency

pum

p se

ts p

refe

rabl

y w

ith

labe

ls

of

Bur

eau

of

Ene

rgy

Effi

cien

cy

(BE

E)

and

othe

r en

ergy

co

nser

vatio

n de

vice

s.

All

cate

gorie

s

of

cons

umer

s sh

ould

be

wel

l ap

pris

ed o

f th

e ne

wly

dev

elo

ped

late

st e

nerg

y co

nser

vatio

n de

vice

s so

tha

t th

e en

ergy

co

nser

ved

can

be u

tiliz

ed fo

r m

ore

prod

uctiv

e pu

rpo

ses

and

in c

onso

nanc

e w

ith d

irect

ion

issu

ed b

y th

e M

inis

try

of

Pow

er,

Gov

ernm

ent

of I

ndia

, it

shal

l be

mad

e m

anda

tor

y to

use

IS

I m

ark

mot

or p

ump

sets

, po

wer

cap

acito

r, fo

ot /

re

flex

valv

es in

all

new

con

nect

ions

in a

gric

ultu

re s

ecto

r.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

Pilo

t pr

ojec

t fo

r de

mon

stra

tion

of e

nerg

y ef

ficie

ncy

me

ans

and

mea

sure

s in

col

labo

ratio

n w

ith B

RE

DA

and

BE

E (

Bur

eau

of

Ene

rgy

Effi

cien

cy)

has

been

pla

nned

und

er P

ES

U a

rea.

BR

ED

A a

nd B

EE

hav

e to

arr

ange

the

pilo

t pro

ject

s.

Com

mis

sion

’s v

iew

in th

e S

ince

FY

200

6-07

the

Boa

rd h

as n

ot p

rovi

ded

the

sat

isfa

ctor

y re

spon

se.

The

Boa

rd is

dir

ecte

d to

sub

mit

the

late

st r

epor

t on

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

318

Dire

ctiv

e

Tar

iff O

rder

of F

Y 2

012-

13

impl

emen

tatio

n on

ene

rgy

cons

erva

tion

mea

sure

s an

d cr

eatin

g aw

aren

ess

amon

g co

nsum

ers

by 3

0th J

une

2012

.

Dire

ctiv

e N

o. 2

8:

Inve

stm

ent P

rogr

amm

e

It is

obs

erve

d th

at th

e B

oard

has

nei

ther

sub

mitt

ed a

ny fu

ture

inve

stm

ent p

rogr

amm

e no

r th

e de

tails

of

cap

ital w

orks

in

pro

gres

s (C

WIP

) w

ith th

e ta

riff

petit

ion.

The

BS

EB

is d

irect

ed to

sub

mit

with

in n

ext

thre

e m

onth

s t

heir

inve

stm

ent

prog

ram

me

for

the

next

5 y

ears

and

det

ails

of C

WIP

. A

qua

rter

ly p

rogr

ess

repo

rt o

n m

ajor

inve

stm

ent w

ork

s sh

ould

al

so b

e fu

rnis

hed

regu

larly

to th

e C

omm

issi

on a

nd t

he fi

rst s

uch

repo

rt fo

r qu

arte

r en

ding

Mar

ch, 2

007

be

subm

itted

in

Apr

il 20

07.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

No

Res

pons

e ha

s be

en p

rovi

ded

by t

he B

oard

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

The

Boa

rd w

as d

irect

ed t

o su

bmit

a qu

arte

rly p

rogr

ess

repo

rt o

n m

ajor

inve

stm

ent w

orks

but

the

sam

e ha

s no

t bee

n co

mpl

ied

by t

he B

oard

and

has

not

sub

mitt

ed a

ny s

uch

com

plia

nce

in t

he t

ariff

pet

ition

for

FY

201

2-13

. T

he d

etai

led

inve

stm

ent

prog

ram

for

FY

201

2-13

and

act

ual

inve

stm

ent

done

for

FY

201

1-12

sha

ll be

pro

vide

d by

the

Boa

rd a

nd s

ubm

itted

to

the

Com

mis

sion

by

30th J

une

2012

.

Dire

ctiv

e N

o. 2

9: A

PD

RP

S

chem

es

The

sta

tus

of im

plem

enta

tion

of t

hese

sch

emes

, am

ount

util

ized

upt

o 31

st D

ecem

ber,

200

6, t

he b

enef

its a

ccru

ed b

y w

ay o

f inc

reas

e in

met

ered

sal

es, r

educ

tion

of d

ist

ribut

ion

loss

, im

prov

emen

t in

qual

ity o

f sup

ply,

re

venu

e et

c. s

hall

be r

epor

ted

to th

e C

omm

issi

on b

y 31

st M

arch

200

7.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

i) A

PD

RP

has

bee

n s

hort

clo

sed

and

rest

ruct

ured

as

RA

PD

RP

. A

s su

ch it

will

be

prem

atur

e to

ass

ess

the

ben

efits

ac

crue

d to

BS

EB

und

er A

PD

RP

. ii)

R

-AP

DR

P p

art-

A i

s be

ing

impl

emen

ted

in 6

4 to

wns

and

AD

B p

lan

is b

eing

impl

emen

ted

in 7

tow

ns.

The

ben

efit

unde

r th

ese

prog

ram

mes

can

be

asse

ssed

aft

er c

ompl

etio

n of

the

sam

e.

iii)

Und

er R

-AP

DR

P, t

he s

tatu

s of

met

erin

g as

on

08th N

ovem

ber,

201

1 is

as

belo

w:

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

319

Dire

ctiv

e

a.

Rin

g F

enci

ng (

33 k

V)

- 5

b.

Rin

g F

enci

ng (

11 k

V)

- 48

c.

F

eede

r M

eter

(33

kV

) -

5 d.

F

eede

r M

eter

(11

kV

) -

4 e.

C

onsu

mer

Met

er (

33 k

V)

- 0

f. C

onsu

mer

Met

er (

11 k

V)

- 9

g.

DT

Met

er –

10

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

T

he B

oard

sha

ll su

bmit

the

bene

fits

accr

ued

by w

ay o

f in

crea

se in

met

ered

sal

es,

redu

ctio

n of

dis

trib

utio

n lo

ss,

impr

ovem

ent

in q

ualit

y of

sup

ply,

rev

enue

etc

. for

FY

200

9-10

, FY

201

0-11

and

FY

201

1-12

by

30th J

une

2012

.

Dire

ctiv

e N

o. 3

0:

Reg

iste

red

and

effe

ctiv

e co

nsum

ers

It is

obs

erve

d fr

om t

he t

ariff

pet

ition

file

d by

BS

EB

tha

t th

e co

nsum

ers

are

cate

goriz

ed a

s re

gist

ered

and

effe

ctiv

e.

The

reg

iste

red

cons

umer

s ar

e th

ose

ente

red

in t

he b

ooks

and

effe

ctiv

e co

nsum

ers

are

thos

e w

hose

ser

vic

es a

re

aliv

e. T

hus

a la

rge

num

ber

of c

onsu

mer

s w

ho a

re o

n bo

oks

(reg

iste

red)

are

not

live

and

bill

ed.

It co

uld

be p

ossi

ble

that

som

e of

the

se c

onsu

mer

s m

ight

be

avai

ling

elec

tric

ity.

The

ser

vice

s of

con

sum

ers

whi

ch a

re n

ot li

ve f

or m

ore

than

thr

ee m

onth

s sh

ould

be

give

n no

tice

for

clea

ring

the

arre

ars

and

getti

ng th

e su

pply

res

tore

d w

ithin

a s

peci

fied

time.

If

they

fai

l to

do

so,

the

conn

ectio

n of

the

se

cons

umer

s sh

all

be d

ism

antle

d an

d ac

tion

take

n to

rea

lize

the

dues

. S

uch

serv

ices

sha

ll be

clo

sely

mon

itore

d by

the

Boa

rd a

nd s

trin

gent

act

ion

unde

r th

e pr

ovis

ions

of

the

E

lect

ricity

Act

, 20

03 a

gain

st s

uch

cons

umer

s be

tak

en w

ho a

re a

vaili

ng s

uppl

y. T

he s

ervi

ce c

onne

ctio

ns h

avin

g no

du

es a

nd n

ot w

illin

g to

tak

e re

conn

ectio

n sh

ould

be

rem

oved

fro

m t

he b

ooks

im

med

iate

ly.

A r

epor

t on

th

e ac

tion

take

n sh

all b

e se

nt to

the

Com

mis

sion

by

31st

Mar

ch, 2

007.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

No

Res

pons

e ha

s be

en p

rovi

ded

by t

he B

oard

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

A

s pe

r di

rect

ives

the

dis

conn

ecte

d co

nsum

ers

havi

ng d

ues

are

to b

e cl

osel

y m

onito

red

by t

he B

oard

and

str

inge

nt a

ctio

n to

be

ta

ken

for

real

izat

ion

of d

ues.

T

he

curr

ent

stat

us

of

regi

ster

ed a

nd

effe

ctiv

e co

nsum

ers

shal

l be

fu

rnis

hed

to t

he

Com

mis

sion

by

30th J

une

2012

and

the

qua

rter

ly r

epor

t on

mon

itorin

g of

col

lect

ion/

rea

lizat

ion

of d

ues

from

dis

conn

ecte

d

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

320

Dire

ctiv

e

cons

umer

s ha

ving

due

s sh

all b

e su

bmitt

ed to

the

Com

mis

sion

.

Dire

ctiv

e N

o. 3

1: C

ost o

f su

pply

and

cro

ss s

ubsi

dy

As

per

Cla

use

(g)

of s

ectio

n 61

of

the

Ele

ctric

ity

Act

, 20

03,

the

Com

mis

sion

is t

o en

sure

that

the

tar

iff p

rogr

essi

vely

re

flect

s th

e co

st o

f su

pply

and

cro

ss s

ubsi

dy is

re

duce

d w

ithin

a s

peci

fied

perio

d. I

n th

is c

onte

xt,

the

Com

mis

sion

di

rect

s th

e B

oard

to c

arry

out

a s

tudy

to a

scer

tain

vol

tage

-wis

e an

d co

nsum

er c

ateg

ory-

wis

e co

st o

f su

pply

. T

his

is

nece

ssar

y fo

r th

e pu

rpos

e of

bet

ter

tarif

f de

sign

as

also

to

find

out

the

natu

re a

nd e

xten

t of

cro

ss s

ubsi

dy.

The

B

SE

B s

hall

carr

y ou

t the

stu

dy a

nd s

ubm

it th

e st

udy

rep

ort t

o th

e C

omm

issi

on w

ithin

a p

erio

d of

six

mo

nths

.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

The

Boa

rd s

tate

d th

at o

ther

SE

Bs

and

utili

ty a

re b

eing

con

tact

ed fo

r th

eir

met

hodo

logi

es.

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

The

Com

mis

sion

aga

in r

eite

rate

s its

dire

ctiv

e gi

ven

in T

ariff

Ord

er fo

r F

Y 2

006-

07 a

nd s

how

s its

dis

plea

sure

on

the

inab

ility

of

the

Boa

rd t

o co

nduc

t th

e sa

id s

tudy

. T

he C

omm

issi

on d

irect

s th

e B

oard

to

subm

it th

e in

form

atio

n on

act

ion

take

n fo

r w

orki

ng

out

volta

ge w

ise

Cos

t of S

ervi

ce (

CoS

) st

udy

by 3

1st J

uly

2012

.

Dire

ctiv

e N

o. 3

2:

Res

tric

tions

on

cons

umpt

ion

of E

nerg

y

Sin

ce g

ener

atio

n of

ene

rgy

is q

uite

insi

gnifi

cant

in

the

Sta

te a

nd th

e po

wer

ava

ilabl

e in

clud

ing

that

pu

rcha

sed

from

ot

her

agen

cies

is n

ot a

dequ

ate,

the

Boa

rd h

as b

een

reso

rtin

g to

uns

ched

uled

load

she

ddin

g. T

houg

h so

me

par

t of

th

e ur

ban

area

s ar

e pr

ivile

ged

in t

his

mat

ter

for

get

ting

supp

ly o

f el

ectr

icity

, ru

ral

area

is

the

wor

st c

asua

lty.

The

vi

ew o

f th

e C

omm

issi

on i

s th

at i

f on

e do

es n

ot h

ave

ade

quat

e re

sour

ces

to c

ater

to

the

requ

irem

ent

of

the

vast

m

asse

s w

ho a

re n

eedy

, ra

tioni

ng i

s th

e on

ly o

ptio

n in

a w

elfa

re s

tate

whe

re e

very

one

has

equa

l rig

ht f

or u

se o

f a

scar

ce c

omm

odity

. It i

s hi

gh ti

me

in th

e S

tate

tha

t p

eopl

e sh

ould

be

cons

ciou

s in

the

mat

ter

of e

nerg

y c

onsu

mpt

ion

and

shou

ld p

ut r

estr

ictio

n on

use

of

elec

tric

ity v

olu

ntar

ily w

hich

wou

ld b

e se

lf-re

gula

ting,

tho

ugh

it c

anno

t be

rul

ed

out

that

exi

genc

y m

ay a

rise

whe

n it

coul

d be

reg

ula

tory

com

puls

ion

for

man

dato

ry r

estr

ictio

n on

con

sum

ptio

n of

el

ectr

icity

. T

he C

omm

issi

on d

irect

s th

e B

oard

to

educ

ate

the

cons

umer

s to

coo

pera

te w

ith t

he B

oard

in

rest

rictin

g th

e us

e of

ele

ctric

ity b

y vo

lunt

ary

effo

rt.

Com

plia

nce

stat

us o

f dire

ctiv

e

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

321

Dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

The

Boa

rd s

tate

d th

at

i) A

dem

onst

ratio

n pr

ojec

t with

the

help

of

BE

E a

nd B

RE

DA

has

bee

n or

gani

zed

in t

he P

ES

U a

rea.

ii)

In

stru

ctio

n ha

s b

een

issu

ed t

o th

e of

ficer

s of

the

Boa

rd t

o sp

read

the

ene

rgy

effic

ienc

y an

d e

cono

my

awar

enes

s du

ring

cons

umer

’s m

eet.

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

As

dire

cted

, B

oard

is

requ

ired

to

educ

ate

the

Con

sum

ers

rest

rictin

g th

e us

e of

ele

ctric

ity b

y vo

lunt

ary

effo

rt.

But

it

appe

ars

that

no

such

act

ion

has

been

take

n to

edu

cate

the

cons

umer

s.

The

Boa

rd i

s di

rect

ed t

o su

bmit

the

late

st r

epor

t on

cre

atio

n of

aw

aren

ess

for

impl

emen

tatio

n on

ene

rgy

cons

erva

tion

mea

sure

s an

d cr

eatin

g aw

aren

ess

amon

g co

nsum

ers

by 3

0th J

une

2012

.

Dire

ctiv

e N

o. 3

3: S

CA

DA

an

d D

ata

man

agem

ent

The

Com

mis

sion

feel

s th

at fo

r ef

fect

ive

wor

king

of

dist

ribut

ion

syst

em a

tim

e bo

und

prog

ram

me

for

impl

emen

tatio

n of

SC

AD

A a

nd d

ata

man

agem

ent

is e

ssen

tial.

A r

epor

t o

n im

plem

enta

tion

of s

uch

a sc

hem

e sh

ould

be

subm

itte

d by

th

e B

oard

for

appr

oval

by

the

Com

mis

sion

by

Mar

ch,

2007

.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff

petit

ion

of F

Y 2

012-

13

No

Res

pons

e ha

s be

en p

rovi

ded

by t

he B

oard

Com

mis

sion

’s v

iew

in th

e T

ariff

Ord

er o

f FY

201

2-13

T

he B

oard

sha

ll pr

ovid

e th

e la

test

sta

tus

of S

CA

DA

and

dat

a m

anag

emen

t im

plem

enta

tion

by 3

0th J

une

2012

.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

322

9.4

Dire

ctiv

es is

sued

in T

ariff

Ord

er o

f FY

200

8-09

Dire

ctiv

e

Dire

ctiv

e N

o. 1

: HT

Con

sum

er

cells

in B

SE

B

The

con

trib

utio

n to

the

rev

enue

of

the

Boa

rd b

y H

T

indu

stria

l con

sum

ers

is s

ubst

antia

l. Th

ese

cons

umer

s ar

e cr

oss

subs

idiz

ing

the

dom

estic

and

agr

icul

tura

l con

sum

ers

who

are

sup

plie

d po

wer

bel

ow th

e av

erag

e co

st o

f su

pply

. It

is t

here

fore

exp

ecte

d th

at t

he B

oard

pro

vide

s th

em q

ualit

y po

wer

and

ser

vice

to

them

. T

heir

co

mpl

aint

s re

gard

ing

elec

tric

ity s

uppl

y sh

ould

be

atte

nded

pro

mpt

ly.

Kee

ping

thi

s in

vie

w,

The

Com

mis

sio

n di

rect

ed th

e B

oard

to e

stab

lishe

s a

HT

cel

l in

the

head

offi

ce a

t Pat

na a

nd a

t im

port

ant U

rban

Indu

str

ial C

entr

es

in th

e st

ate.

The

cel

l at t

he h

eadq

uart

ers

shou

ld b

e he

aded

by

an E

xecu

tive

Eng

inee

r w

ith s

uppo

rtin

g s

taff.

The

ce

ll sh

all b

e a

sing

le w

indo

w c

onta

ct fo

r at

tend

ing

to a

ll th

eir

prob

lem

s. T

he B

oard

sha

ll pr

epar

e a

sch

eme

for

esta

blis

hmen

t of

suc

h ce

lls a

nd e

nsur

e th

at t

hese

are

fun

ctio

nal w

ithin

a p

erio

d of

thr

ee m

onth

s. C

omp

lianc

e m

ay b

e re

port

ed b

y 31

st D

ecem

ber

2008

.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

012-

13

No

Spe

cific

res

pons

e ha

s be

en s

ubm

itted

by

the

Boa

rd.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

2-13

The

no.

of

com

plai

nts/

pro

blem

s re

ceiv

ed d

urin

g F

Y 2

010-

11 a

nd F

Y 2

011-

12 a

nd r

esol

ved

by t

he H

T c

onsu

mer

cel

l of

BS

EB

hea

dqua

rter

sha

ll be

fur

nish

ed t

o th

e C

omm

issi

on b

y 30

th J

une

201

2, a

nd t

here

afte

r ha

lf ye

arly

pro

gres

s re

port

sh

all b

e su

bmitt

ed b

y th

e B

oard

.

Dire

ctiv

e N

o. 2

: Iss

ues

rela

ting

to h

igh

valu

e co

nsum

ers

Bas

ed o

n th

e da

ta fu

rnis

hed

by th

e B

oard

for

FY

200

7-08

, the

Com

mis

sion

obs

erve

d th

at H

T c

onsu

mer

s co

ntrib

ute

40%

of t

he to

tal r

even

ue, L

T c

onsu

mer

s c

ontr

ibut

e 8.

3% o

f the

tota

l rev

enue

and

LT

com

mer

cial

co

nsum

ers

cont

ribut

e 11

.5%

of t

otal

rev

enue

. In

thi

s re

gard

, the

Com

mis

sion

dire

cted

the

Boa

rd to

giv

e p

riorit

y to

thes

e H

igh

valu

e C

onsu

mer

s in

the

follo

win

g op

erat

iona

l asp

ects

:

• R

epla

cem

ent o

f ele

ctro

mag

netic

met

ers

by s

tatic

met

ers

• R

epla

cem

ent o

f sto

pped

/ de

fect

ive

met

ers.

•

Che

ckin

g of

all

H.T

ser

vice

s by

the

Spe

cial

Tas

k Fo

rce

offic

ers

atle

ast o

nce

in 3

mon

ths.

•

Che

ckin

g of

Nil

cons

umpt

ion

& B

ill s

topp

ed s

ervi

ces

whi

ch w

ere

earli

er r

ecor

ding

abo

ut 1

000

units

per

m

onth

.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

323

Dire

ctiv

e

• H

igh

valu

e LT

ind

ustr

ial

com

mer

cial

ser

vice

s an

d do

mes

tic c

onsu

mer

s (m

onth

ly b

ill e

xcee

ding

Rs

1000

) to

be

insp

ecte

d by

Spe

cial

Tas

k Fo

rce

atle

ast

onc

e in

six

mon

ths.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

012-

13

No

Spe

cific

res

pons

e ha

s be

en s

ubm

itted

by

the

Boa

rd.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

2-13

A

n on

line

port

al s

yste

m fo

r at

tend

ing

the

prob

lem

s of

HT

con

sum

ers

shal

l be

intr

oduc

ed b

y th

e B

SE

B a

nd s

tatu

s re

port

sh

all b

e su

bmitt

ed to

the

Com

mis

sion

at h

alf y

early

inte

rval

sta

rtin

g 30

th J

une

2012

.

Dire

ctiv

e N

o 3:

Mon

itorin

g of

HT

an

d hi

gh v

alue

LT

Con

sum

er

met

er r

eadi

ngs

The

Com

mis

sion

dire

cted

the

Boa

rd t

o is

sue

nece

ssar

y in

stru

ctio

ns t

o th

e co

ncer

ned

offic

ers

and

staf

f an

d m

onito

r th

e co

mpl

ianc

e w

ith r

espe

ct to

the

inst

ruct

ions

giv

en fo

r m

eter

rea

ding

. The

Com

mis

sion

als

o d

irect

ed

that

th

e B

oard

sh

all

caus

e ne

cess

ary

inst

ruct

ions

t

o th

e co

ncer

ned

offic

ers

and

staf

f an

d m

onito

r th

e co

mpl

ianc

e. A

ctio

n ta

ken

may

be

repo

rted

to th

e C

omm

issi

on b

y 31

st D

ecem

ber

2008

.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

012-

13

No

Spe

cific

res

pons

e ha

s be

en s

ubm

itted

by

the

Boa

rd.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

2-13

T

he u

pdat

ed c

ompl

ianc

e st

atus

rep

ort s

hall

be s

ubm

itted

by

the

Boa

rd to

the

Com

mis

sion

by

30th J

une

2012

.

Dire

ctiv

e N

o. 4

: Pro

mpt

rel

ease

of

sup

ply

to n

ew c

onsu

mer

s

The

Com

mis

sion

di

rect

ed t

he

Boa

rd t

o pr

ompt

ly d

eal

with

new

ap

plic

ants

ap

proa

chin

g B

oard

fo

r ne

w

conn

ectio

ns a

nd t

ake

actio

n av

oidi

ng d

elay

s at

eve

ry

leve

l. T

he B

oard

is

dire

cted

to

proc

ure

the

requ

ire

d nu

mbe

r of

met

ers

and

keep

the

m in

sto

ck. I

t als

o no

ticed

that

in c

erta

in c

ases

rel

ease

of

new

con

nect

ion

s w

as

bein

g de

laye

d fo

r w

ant

of m

eter

s. I

n su

ch c

ases

, it

dire

cted

the

Boa

rd t

o al

low

con

sum

ers

to p

urch

ase

thei

r ow

n m

eter

s of

spe

cifie

d qu

ality

, cap

acity

and

mak

e.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

324

Dire

ctiv

e

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

012-

13

No

Spe

cific

res

pons

e ha

s be

en s

ubm

itted

by

the

Boa

rd.

Com

mis

sion

’s

view

in

th

e T

ariff

O

rder

of

FY

201

2-13

Dur

ing

the

publ

ic h

eari

ng a

t diff

eren

t pla

ce,

cons

umer

s su

bmitt

ed b

efor

e th

e C

omm

issi

on th

at th

e ne

w c

onne

ctio

ns a

re

not

rele

ased

in ti

me

and

stan

dard

of p

erfo

rman

ce is

not

mai

ntai

ned

by th

e B

oard

. So,

the

Com

mis

sion

dir

ects

the

Boa

rd t

o en

sure

to

cond

uct s

urve

y of

rur

al a

reas

, de

velo

ps a

mar

ketin

g an

d aw

aren

ess

prog

ram

me

for

such

are

as a

nd

prov

ides

new

con

nect

ions

thr

ough

spe

cial

cam

ps. T

he C

omm

issi

on a

lso

dire

cts

the

Boa

rd to

dev

elop

an

actio

n pl

an f

or

the

abov

e an

d su

bmit

the

sam

e to

the

Com

mis

sion

with

in th

ree

mon

ths

of th

e O

rder

. The

reaf

ter,

the

Boa

rd s

hall

regu

larl

y su

bmit

the

Com

plia

nce

repo

rt o

n qu

arte

rly b

asis

.

The

Com

mis

sion

als

o di

rect

s th

e P

etiti

oner

to

take

all

the

step

s to

impl

emen

t th

e st

anda

rds

of p

erfo

rman

ce a

nd e

nsur

e

the

new

con

nect

ions

are

giv

en in

tim

e as

per

the

Sta

ndar

ds o

f P

erfo

rman

ce R

egul

atio

ns.

Dire

ctiv

e N

o.5:

Red

uctio

n of

AT

&

C L

osse

s

As

per

tarif

f pe

titio

n fo

r F

Y 2

008-

09,

the

AT

&C

los

ses

for

FY

200

6, F

Y20

07 a

nd F

Y 2

008

are

very

hig

h.

The

se

greg

atio

n of

tec

hnic

al a

nd c

omm

erci

al l

osse

s th

roug

h pr

oper

los

s st

udy

shal

l be

don

e an

d re

port

on

thi

s sh

all b

e su

bmitt

ed b

efor

e th

e C

omm

issi

on b

y D

ecem

ber,

200

8. T

he C

omm

issi

on d

irect

ed t

he B

oard

to c

olle

ct

100%

of t

he m

onth

ly b

ills

amou

nt a

nd a

noth

er m

inim

um

10%

of t

he a

rrea

rs o

utst

andi

ng e

very

mon

th.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

012-

13

No

Spe

cific

res

pons

e ha

s be

en s

ubm

itted

by

the

Boa

rd.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

2-13

The

Com

mis

sion

has

dire

cted

to

the

Boa

rd t

o co

llect

100

% o

f m

onth

ly b

ills

amou

nt a

nd a

noth

er m

inim

um 1

0% o

f th

e ar

rear

s am

ount

eve

ry m

onth

, bu

t th

e B

oard

has

not

sub

mitt

ed t

hat

they

are

com

plyi

ng.

The

Com

mis

sion

rei

tera

tes

the

dire

ctiv

es 1

, 6

and

7 of

Tar

iff O

rder

for

FY

200

6-07

and

for

col

lect

ion

of a

mou

nt a

s di

rect

ed in

the

Tar

iff O

rder

for

FY

20

08-0

9.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

325

9.5

Dire

ctiv

es is

sued

in T

ariff

Ord

er o

f FY

201

0-11

Dire

ctiv

e

Dire

ctiv

e N

o. 1

: Pre

pai

d m

eter

s

The

Com

mis

sion

dire

cted

the

Boa

rd to

pro

vide

pre

pai

d m

eter

s to

som

e do

mes

tic c

onsu

mer

s as

a p

ilot s

tud

y to

en

cour

age

and

mak

e th

e co

nsum

ers

to o

bser

ve t

he a

dvan

tage

s of

hav

ing

prep

aid

met

er f

acili

ty.

It al

so

obse

rved

tha

t su

bseq

uent

ly B

oard

may

sug

gest

the

co

nsum

ers

to p

urch

ase

the

prep

aid

met

ers

at t

heir

own

co

st b

y of

ferin

g so

me

reba

te s

ay a

bout

10%

in

ener

gy

char

ge,

with

no

secu

rity

for

prep

aid

cons

umer

s. T

he

Com

mis

sion

dire

cted

the

Boa

rd to

furn

ish

the

repo

rt o

n th

e ac

tion

take

n in

this

reg

ard

by 3

0th

Apr

il 2

011.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

011-

12

The

Boa

rd s

tate

d th

at t

he C

EA

is in

pro

cess

of

spec

ifica

tion

form

ulat

ion

and

final

izat

ion

of p

re-p

aid

met

ers.

Due

to h

igh

cost

of

pre-

paid

met

ers.

Boa

rd is

yet

to la

unch

the

sch

eme

of p

re-p

aid

met

ers

to s

elec

ted

cons

umer

s un

der

pilo

t.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

1-12

T

he C

omm

issi

on s

tate

d th

at th

e co

mpl

ianc

e m

ay b

e re

view

ed w

ith th

e ne

xt ta

riff p

etiti

on a

nd w

ill b

e di

scus

sed

sepa

rate

ly.

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

012-

13

The

Boa

rd in

form

ed t

he C

omm

issi

on t

hat

it ha

s se

nt s

ugge

stio

n to

CE

A f

or f

inal

izat

ion

of s

peci

ficat

ion,

form

ulat

ion

and

final

izat

ion

of p

re-p

aid

met

ers.

The

Boa

rd s

tate

d th

at i

t ha

s go

t le

arni

ng f

rom

Del

hi a

nd K

olka

ta.

The

Boa

rd i

nfor

med

th

at M

anuf

actu

rers

hav

e be

en i

nvite

d fo

r pr

esen

tatio

n on

the

sam

e in

Sep

t’ 20

11.

The

Boa

rd h

ighl

ight

ed d

iffic

ulty

in

impl

emen

tatio

n of

pre

-pai

d m

eter

s lik

e A

ccou

ntin

g di

ffic

ulty

, S

oftw

are

upda

tion

requ

ired

(fo

r ch

argi

ng F

PP

CA

) an

d in

stan

ces

on b

y-pa

ss o

f m

eter

.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

2-13

T

he P

etiti

oner

is d

irect

ed t

o fu

rnis

h co

st-b

enef

it an

alys

is o

f im

plem

entin

g pr

e-pa

id m

eter

ing

on p

ilot

basi

s es

peci

ally

for

co

nsum

ers

with

hig

h ar

rear

and

Gov

t. co

nnec

tions

with

in t

hree

mon

ths

of is

sue

of th

is o

rder

.

Dire

ctiv

e N

o. 2

: Sta

r Rat

ing

Dis

trib

utio

n T

rans

form

ers

The

Com

mis

sion

dire

cted

the

Boa

rd to

go

in fo

r pr

ocur

emen

t of d

istr

ibut

ion

tran

sfor

mer

s up

to 2

00 k

VA

w

ith

min

imum

of t

wo

“sta

r ra

ting

or s

tar

leve

l”. T

his

wa

s ap

plic

able

for p

urch

ase

of a

ll ne

w tr

ansf

orm

ers

for

whi

ch

tend

er h

as n

ot b

een

so fa

r flo

ated

/ pu

blis

hed

in t

he n

ewsp

aper

by

the

Boa

rd. T

he C

omm

issi

on h

as d

irec

ted

the

Boa

rd to

furn

ish

the

repo

rt o

n th

e ac

tion

take

n in

this

reg

ard

by 3

0th

Apr

il 20

11.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

326

Dire

ctiv

e

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

011-

12

The

Boa

rd s

tate

d th

at it

is n

ot p

rocu

ring

Sta

r R

atin

g D

Ts

due

to h

ighe

r co

st o

f su

ch D

Ts a

nd

is c

olle

ctin

g da

ta a

nd

feed

back

from

Kol

katt

a an

d D

elhi

on

such

tran

sfor

mer

s. T

he B

oard

info

rmed

that

it is

stu

dyin

g th

e fin

anci

al v

iabi

lity

of

inst

allin

g st

ar r

atin

g D

Ts.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

1-12

T

he C

omm

issi

on a

dvis

ed t

he B

oard

to d

iscu

ss th

is.

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

012-

13

The

Boa

rd s

tate

d th

at t

he c

omm

ittee

has

bee

n fo

rmed

to m

ake

tech

nica

l spe

cific

atio

n an

d pr

ocur

emen

t of n

ext

Lot

of

DT

s w

ill b

e st

ar r

ated

.

Com

mis

sion

’s v

iew

in th

e Ta

riff

Ord

er o

f F

Y 2

012-

13

The

Boa

rd is

dire

cted

to fo

llow

the

spe

cific

atio

n of

ele

ctri

cal e

quip

men

ts a

s sp

ecifi

ed b

y B

EE

und

er th

e st

anda

rd a

nd

labe

ling

prog

ram

and

furn

ish

com

plia

nce

repo

rt to

the

Com

mis

sion

by

30th J

une

2012

and

the

reaf

ter

on q

uart

erly

bas

is.

Dire

ctiv

e N

o. 3

: Pro

vidi

ng

Met

ers

at L

V s

ide

of a

ll D

istr

ibut

ion

Tra

nsfo

rmer

s

The

Com

mis

sion

dire

cted

the

Boa

rd to

pro

vide

met

ers

to a

ll th

e un

met

ered

dis

tribu

tion

tran

sfor

mer

s w

ithi

n si

x m

onth

s. It

als

o di

rect

ed th

e B

oard

to u

nder

take

ene

rgy

acco

untin

g in

the

area

s w

here

met

ers

have

alre

ady

pr

ovid

ed fo

r th

e di

strib

utio

n tr

ansf

orm

ers

and

subm

it th

e co

pies

of s

uch

repo

rts

to th

e C

omm

issi

on e

very

m

onth

. The

Com

mis

sion

dire

cted

the

Boa

rd to

furn

ish

the

repo

rt of

ene

rgy

acco

untin

g in

res

pect

of t

hos

e di

strib

utio

n tr

ansf

orm

ers

in w

hich

met

ers

have

bee

n in

stal

led

by 3

1st M

arch

201

1.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

011-

12

The

Boa

rd s

tate

d th

at is

has

alre

ady

inst

alle

d 16

,035

dis

trib

utio

n tr

ansf

orm

er m

eter

s un

der

AP

DR

P s

chem

e an

d 7,

064

DT

met

ers

are

goin

g to

be

inst

alle

d un

der

R‐A

PD

RP

Sch

eme.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

1-12

T

he C

omm

issi

on h

as n

oted

the

com

plia

nce.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

327

Dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

012-

13

No

spec

ific

resp

onse

has

bee

n su

bmitt

ed b

y th

e B

oard

.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

2-13

The

Com

mis

sion

has

dir

ecte

d th

e B

oard

to fu

rnis

h th

e re

port

of

ener

gy a

ccou

ntin

g in

res

pect

of t

hose

dis

trib

utio

n tr

ansf

orm

ers

in w

hich

met

ers

have

bee

n in

stal

led.

But

the

Boa

rd h

as n

ot c

ompl

ied

and

subm

itted

in r

epor

t reg

ardi

ng

the

ener

gy a

udit

resu

lts o

f tho

se d

istr

ibut

ion

tran

sfor

mer

s in

whi

ch m

eter

s ha

s be

en in

stal

led.

A C

ompr

ehen

sive

sta

tus

repo

rt o

n th

e fu

nctio

ning

/ w

orki

ng s

tatu

s of

the

inst

alle

d D

T m

eter

s an

d re

sult

of e

nerg

y au

dit

done

and

the

actio

n pl

an fo

r fu

ture

DT

met

er in

stal

latio

n sh

all b

e su

bmitt

ed t

o th

e C

omm

issi

on b

y 30

th J

une

2012

.

Dire

ctiv

e N

o. 4

: CF

Ls to

Kut

ir Jy

oti (

Rur

al)

Con

sum

ers

The

Com

mis

sion

dire

cted

the

Boa

rd to

pro

vide

CF

L la

mps

upt

o 30

wat

ts in

stea

d of

60

/ 100

wat

ts in

cand

esc

ent

lam

ps to

the

Kut

ir Jy

oti c

onsu

mer

s (t

o be

add

ed d

urin

g R

GG

VY

pro

gram

me)

. The

Com

mis

sion

als

o di

rect

ed

the

Boa

rd to

furn

ish

the

Act

ion

Tak

en R

epor

t in

thi

s re

gard

by

31st

Jan

uary

201

1.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

011-

12

The

Boa

rd r

eplie

d th

at u

nder

RG

VV

Y p

rogr

am, t

he s

ervi

ce c

onne

ctio

ns t

o B

PL

cate

gorie

s ar

e be

ing

give

n in

whi

ch C

FL

lam

ps u

pto

18 w

atts

are

bei

ng p

rovi

ded.

Insp

ectio

n by

fiel

d of

ficer

s sh

ows

that

the

bene

ficia

ries

use

mor

e th

an 3

0 W

att

lam

ps a

nd o

ther

gad

gets

in th

eir

prem

ises

.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

1-12

T

he C

omm

issi

on h

as n

oted

the

com

plia

nce.

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

012-

13

No

spec

ific

resp

onse

has

bee

n su

bmitt

ed b

y th

e B

oard

.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

2-13

T

he C

omm

issi

on d

irect

s th

e B

oard

to s

ubm

it th

e nu

mbe

r of

CF

Ls p

rovi

ded

to K

utir

Jyot

i co

nsum

ers

and

futu

re a

ctio

n pl

an t

o th

e C

omm

issi

on r

egul

arly

on

half

year

ly b

asis

. The

Firs

t suc

h re

port

sha

ll be

sub

mitt

ed b

y 30

th J

une

2012

.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

328

Dire

ctiv

e

Dire

ctiv

e N

o. 5

: Con

nect

ing

up

Ren

ewab

le E

nerg

y so

urce

to th

e S

tate

Grid

The

Com

mis

sion

dire

cted

the

Boa

rd to

mak

e ar

rang

eme

nts

for

supe

rvis

ion

of th

e co

nstr

uctio

n of

the

tran

smis

sion

line

s fr

om r

enew

able

gen

erat

ion

sour

ces

whe

n ap

proa

ched

by

the

deve

lope

r, an

d fa

cilit

ate

to

conn

ect t

he li

ne to

the

Boa

rd’s

net

wor

k. T

he C

omm

issi

on d

irect

ed th

e B

oard

to fu

rnis

h th

e re

port

of s

uch

tr

ansm

issi

on li

nes

for e

vacu

atin

g en

ergy

from

RE

so

urce

s by

31s

t Mar

ch 2

011.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

011-

12

The

Boa

rd s

ubm

itted

the

stat

us o

f fo

llow

ing

tran

smis

sion

line

s:

1)

GS

S R

amna

gar

to L

auriy

a S

ugar

Mill

s (W

est

Cha

mpa

ran)

2)

G

SS

Mot

ihar

i to

Sug

auli

Sug

ar M

ills

(Eas

t C

ham

para

n)

3)

GS

S R

amna

gar

to H

arin

agar

Sug

ar M

ill (

orde

r re

cent

ly p

lace

d)

The

Boa

rd a

lso

stat

ed th

at a

ll th

e th

ree

proj

ects

are

bei

ng e

xecu

ted

on t

urn-

key

basi

s.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

1-12

T

he C

omm

issi

on h

as n

oted

the

com

plia

nce.

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

012-

13

No

spec

ific

resp

onse

has

bee

n su

bmitt

ed b

y th

e B

oard

.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

2-13

T

he B

oard

sha

ll fu

rnis

h th

e up

date

d st

atus

to

the

Com

mis

sion

reg

ardi

ng t

he li

nes

cons

truc

ted

to e

vacu

ate

pow

er

gene

ratio

n fr

om r

enew

able

sou

rce

and

the

prog

ress

ach

ieve

d in

thi

s re

gard

on

half

year

ly b

asis

.

Dire

ctiv

e N

o. 6

: Dem

and

Sid

e M

anag

emen

t (D

SM

)

The

Com

mis

sion

dire

cted

the

Boa

rd to

take

effe

ctiv

e s

teps

for

impl

emen

tatio

n of

dem

and

side

man

agem

ent

in

the

stat

e. T

he C

omm

issi

on a

lso

dire

cted

the

Boa

rd t

o re

port

the

stat

us o

f im

plem

enta

tion

of D

SM

and

TO

D

Tar

iff q

uart

erly

, with

Firs

t suc

h re

port

upt

o 31

st

Mar

ch 2

011

to b

e fu

rnis

hed

to th

e C

omm

issi

on b

y 30

th

Apr

il 20

11.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

329

Dire

ctiv

e

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

011-

12

The

Boa

rd s

tate

d th

at f

or im

plem

enta

tion

of T

OD

bas

ed

tarif

f, so

ftwar

e in

the

HT

met

ers

have

bee

n in

stal

led.

The

B

oard

will

sub

mit

repo

rt o

n th

e sa

me

by 3

1st M

ay 2

011.

The

Boa

rd s

tate

d th

at d

urin

g m

onth

ly c

onsu

mer

mee

tings

, th

e ad

vant

ages

of

DS

M a

re e

xpla

ined

to

loca

l con

sum

ers

by th

e B

oard

’s o

ffic

ials

.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

1-12

T

he C

omm

issi

on s

tate

d to

rev

iew

the

sta

tus

afte

r 3

mon

ths

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

012-

13

The

Boa

rd s

tate

d th

at d

urin

g th

e co

nsum

ers

mee

ting

the

cons

umer

s ar

e m

ade

awar

e of

DS

M. T

he B

oard

has

or

gani

zed

a de

mon

stra

tion

proj

ect o

f en

ergy

con

serv

atio

n in

PE

SU

are

a in

col

labo

ratio

n w

ith B

EE

(B

urea

u of

Ene

rgy

Eff

icie

ncy)

and

BR

ED

A.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

2-13

T

he P

etiti

oner

is d

irect

ed t

o su

bmit

the

late

st p

rogr

ess

repo

rt o

n im

plem

enta

tion

on D

SM

mea

sure

s an

d T

oD t

ariff

on

quar

terl

y ba

sis

to th

e C

omm

issi

on.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

330

9.6

Dire

ctiv

es is

sued

in T

ariff

Ord

er o

f FY

201

1-12

Dire

ctiv

e

Dire

ctiv

e N

o. 1

: Tim

ely

Sub

mis

sion

of t

ariff

pet

ition

T

he C

omm

issi

on d

irect

ed th

e B

oard

to fi

le ta

riff p

etit

ion

for F

Y 2

012‐ ‐‐‐13

on

or b

efor

e 15

th N

ovem

ber

2011

. Thi

s w

ill b

e es

sent

ial t

o en

sure

that

the

new

tarif

f is

appl

icab

le fr

om 1

st A

pril

2012

.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

012-

13

The

Boa

rd s

ubm

it th

at it

has

com

plie

d w

ith th

e di

rect

ive

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

2-13

The

Com

mis

sion

not

ed t

he c

ompl

ianc

e. H

owev

er, t

he C

omm

issi

on d

irec

ts t

he B

oard

to c

ompi

le a

nd m

aint

ains

the

dat

a,

rela

ted

to r

egul

ator

y re

quir

emen

t/ A

RR

on

a re

gula

r ba

sis

and

mak

es a

vaila

ble

the

copy

of t

he s

ame

to th

e C

omm

issi

on o

n qu

arte

rly b

asis

.

Dire

ctiv

e N

o. 2

: Ene

rgy

Aud

it

The

Com

mis

sion

rei

tera

ted

its e

arlie

r D

irect

ive

No.

8 is

sued

in T

ariff

Ord

er fo

r FY

200

6‐ ‐‐‐07

, dire

ctin

g th

e B

oard

to

rep

lace

met

ers

and

prov

ide

corr

ect m

eter

s on

all

feed

ers

from

220

KV

to 1

1KV

leve

l as

wel

l as

LT s

ide

of th

e di

strib

utio

n tr

ansf

orm

er o

n hi

ghes

t prio

rity

as w

ell a

s to

und

erta

ke e

nerg

y au

dit i

n al

l the

tow

ns w

ith

a po

pula

tion

of fi

fty th

ousa

nd a

nd a

bove

.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

012-

13

The

Boa

rd s

tate

d th

at it

has

set

tar

get o

f ac

hiev

ing

100%

met

erin

g by

Mar

ch 2

013.

The

Boa

rd p

rovi

ded

the

stat

us o

f m

eter

ing

as o

n S

epte

mbe

r’ 20

11 a

s gi

ven

belo

w:

Con

sum

er M

eter

ing

Sl.

Cat

egor

y N

os. o

f Con

sum

ers

Nos

. of m

eter

ed C

onsu

mer

s N

os. o

f Def

ectiv

e /

unm

eter

ed c

onsu

mer

s 1

33 k

V (

Gov

t.)

16

16

-

2 33

kV

(P

vt.)

54

54

-

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

331

Dire

ctiv

e

3 11

kV

HT

(G

ovt.)

45

8 28

0

178

4 11

kV

HT

(P

vt.)

58

9 58

9

-

Sys

tem

Met

erin

g:

Sl.

Cat

egor

y N

os. o

f Met

erin

g po

int

Nos

. of m

eter

ed p

oint

N

os. o

f Def

ectiv

e /

unm

eter

ed p

oint

1

33 k

V

660

370

29

0

2 11

kV

15

74

1038

53

6

3 11

kV

HT

(G

ovt.)

44

670

13

836

3083

4

The

Boa

rd s

tate

d th

at P

FC

has

app

oint

ed M

/s P

rana

t Eng

inee

ring

Ltd

. to

cond

uct t

hird

par

ty a

udit

unde

r R

-AP

DR

P

sche

me.

The

Boa

rd s

tate

d th

at th

e ex

perie

nce

from

this

will

be

appl

ied

for

non

R-A

PD

RP

are

a.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

2-13

In r

egar

d to

sys

tem

met

erin

g st

atus

und

er th

e ca

tego

ry 1

1 kV

HT

(G

ovt.)

the

figur

es o

f met

erin

g po

ints

of 4

4,67

0 as

pr

ovid

ed b

y th

e B

oard

, is

not c

lear

. The

Com

mis

sion

is o

f th

e vi

ew th

at li

ttle

effo

rts

put i

n by

the

Pet

ition

er in

this

reg

ard

may

res

ult i

nto

dras

tic r

educ

tion

of d

istr

ibut

ion

loss

es. T

he P

etiti

oner

is, t

here

fore

, dire

cted

to p

rovi

de m

eter

s at

all

the

dist

ribut

ion

tran

sfor

mer

s in

loss

pro

ne a

reas

with

in t

hree

mon

ths

from

the

date

of i

ssua

nce

of th

is O

rder

and

ther

e af

ter

carr

y ou

t com

plet

e en

ergy

aud

it up

to 1

1 kV

leve

l for

the

entir

e sy

stem

and

upt

o LT

leve

l on

at le

ast o

ne 1

1 kV

feed

er in

ea

ch C

ircl

e an

d su

bmit

a co

mpr

ehen

sive

rep

ort

of th

e re

sults

by

30th J

une

2012

.

Dire

ctiv

e N

o. 3

: Est

imat

ion

of

ener

gy c

onsu

mpt

ion

leve

ls o

f K

utir

Jyot

i Con

sum

er C

ateg

ory

& A

gric

ultu

re s

ecto

r

The

Com

mis

sion

dire

cted

the

Boa

rd to

und

erta

ke tw

o st

udie

s (a

) to

est

imat

e av

erag

e en

ergy

con

sum

ptio

n of

th

e K

utir

Jyot

i con

sum

ers

and

(b)

to e

stim

ate

aver

age

ene

rgy

cons

umpt

ion

of th

e IA

S I

cons

umer

s. L

egit

imat

e co

sts

that

acc

rue

to th

e B

oard

to c

ondu

ct th

e st

udy

may

be

cons

ider

ed in

the

AR

R in

the

next

Tar

iff O

rde

r.

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

012-

13

The

Boa

rd s

ubm

itted

that

it h

as c

ondu

cted

pilo

t stu

dies

to

estim

ate

aver

age

ener

gy c

onsu

mpt

ion

of 1

0 K

J an

d IA

S

cons

umer

s at

Bih

ar s

harif

f in

one

vill

age

and

the

repo

rts

have

bee

n su

bmitt

ed a

long

with

the

petit

ion.

BE

RC

TA

RIF

F O

RD

ER

FO

R F

Y 2

012-

13

Bih

ar E

lect

ricity

Reg

ulat

ory

Com

mis

sion

P

age

332

Dire

ctiv

e

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

2-13

T

he B

oard

is d

irect

ed to

car

ry o

ut s

aid

stud

y on

the

basi

s of

larg

er r

epre

sent

ativ

e sa

mpl

e to

det

erm

ine

aver

age

ener

gy

cons

umpt

ion

for

adop

tion.

Dire

ctiv

e N

o. 4

: MY

T

Com

plia

nce

The

Com

mis

sion

dire

cted

the

Boa

rd to

sub

mit

an A

cti

on T

aken

Rep

ort (

AT

R) o

n its

pre

pare

dnes

s to

mov

e t

o M

YT

fram

ewor

k fo

r ta

riff d

eter

min

atio

n no

t lat

er th

an 3

0th

Sep

tem

ber

2011

Com

plia

nce

stat

us o

f dire

ctiv

e

BS

EB

’s r

espo

nse

in ta

riff p

etiti

on

of F

Y 2

012-

13

The

Boa

rd s

tate

d th

at M

YT

com

plia

nce

will

be

done

by

succ

esso

r co

mpa

nies

afte

r pr

opos

ed u

nbun

dlin

g of

BS

EB

.

Com

mis

sion

’s v

iew

in th

e T

ariff

O

rder

of

FY

201

2-13

The

Com

mis

sion

dire

cts

the

Pet

ition

er o

r its

suc

cess

or r

estr

uctu

red

com

pani

es to

file

the

Bus

ines

s P

lan

and

MY

T ta

riff

petit

ion

for

gene

ratio

n, T

rans

mis

sion

and

dis

trib

utio

n fu

nctio

n se

para

tely

for

the

cont

rol p

erio

d st

artin

g fr

om F

Y 2

013-

14

onw

ards

with

in t

he s

tipul

ated

tim

e.



10 Generation, Transmission, Wheeling Charges and Open Access Charges

10.1 Generation Tariff

10.1.1 The generation tariff is computed based on the generation ARR and the net

generation approved in para 6.35.3 of the chapter 6 of this tariff order. The approved

generation tariff is given in the table below:

Table 156: Generation Tariff Net generation (MUs) Net

Generation (MU)

Fuel (variable) Costs (Rs.

Crores)

Fixed costs (Rs.

Crores)

Variable cost (paise/ kWh)

Fixed cost / kWh (paise/kWh)

Total cost / KWh (paise/kWh)

279.00 103.52 114.85 371.03 411.64 782.66

10.1.2 Accordingly, the Commission approves generation tar iff of 782.66 paise / kWh

for the FY 2012-13.

10.2 Transmission Tariff

10.2.1 The transmission ARR, as approved in para 6.35.3 of chapter 6 is Rs 167.61 Crores.

The approved transmission tariff is given in the table below:

Table 157: Transmission Tariff (in Paise/kWh)

Sl. Particulars Units Transmission Tariff

1. Total costs of transmission Rs. Crores 167.61

2. Energy available for transmission MU 11,786.29

3. Transmission losses assumed % 4%

4. Energy delivered to distribution MU 11,314.84

5. Transmission tariff (1÷4) Ps./kWh 14.81

10.2.2 Accordingly, the Commission approves transmission t ariff of 14.81 paise/ kWh

for the FY 2012-13 .

10.3 Wheeling Charges



10.3.1 The distribution ARR as approved in para 6.35.3 of chapter 6 is Rs 6317.62 Cr. The

wheeling charges have been computed on the basis of approved costs of BSEB for

its distribution wire business and the total energy expected to be wheeled through its

distribution network. The distribution cost for maintaining and operating HV network

as per the financial accounts of FY 2010-11 by BSEB is 19.3% of the total cost of

operating and maintaining distribution wires business of BSEB. In the absence of

segregated data on costs of operation of 33 kV and 11 kV networks, it has been

assumed that the two costs are equal. The Commission would revise this assumption

as reliable and concrete data on operating costs (voltage wise) becomes available to

it during review/true up.

10.3.2 The wheeling charges worked out for 33 kV voltage level are given in the table

below:

Table 158: Wheeling charges at 33 kV Voltage Level

Sl. Details Units Approved wheeling Charges

1. Energy input into transmission system MU 11,786

2. Losses in transmission system % 4.00%

3. EHV sales (as approved by the Commission) MU 1,006.06

4. Energy input into 33 kV system [1‐(2+3)] MU 10,308.78

5. Total distribution cost Rs. Cr. 1,135.92

6. Distribution cost for 33 kV voltage levels (assuming 9.81% of item 5) Rs. Cr. 111.46

7. Wheeling charges for 33 kV voltage level (item 6 ÷4) Ps./kWh 10.81

10.3.3 Accordingly, the Commission approves wheeling charges at 10.81 paise/kWh for 33

kV voltage level for the FY 2012-13.

10.3.4 The wheeling charges determined for 11 kV voltage level are as given in table below:

Table 159: Wheeling charges for 11 kV Voltage Level

Sl. Details Units Approved wheeling Charges

1. Energy input into 33 KV system MU 10,308.78

2. Losses in 33 KV % 6%

3. Energy sales in 33 kV system as approved by the Commission MU 872.03

4. Energy input into 11 kV system [1-(2+3)] MU 8,818.22

5. Total distribution cost Rs. Cr. 1,135.92

6. Distribution cost for 11 kV voltage levels (assuming 9.81% of item 5) Rs. Cr. 111.46

7. Wheeling charges for 11 kV voltage level (item 6÷4) Ps./kWh 12.64



10.3.5 Accordingly, the Commission approves wheeling charges at 12.64 paise/ unit for 11

kV voltage level for the FY 2012-13.

10.4 Open Access Charges

10.4.1 The Commission feels that in the current scenario where energy and peak shortages

are in the range of 50%, the HT consumers should be provided a facilitative open

access framework for procurement of power from sources other than BSEB. For

Open access to become a feasible option for HT consumers open access charges

should be rational so that the cost of delivered power (from sources other than

BSEB) is comparable to retail tariff.

10.4.2 Pursuant to Section 39, 40 and 42 and all other enabling provisions of the Electricity

Act, 2003, the Commission notified the “Terms and Conditions for open access”

Regulations on 20th May 2006. The Commission through these regulations has

introduced open access in phases in Bihar as given below, having regard to

operational constraints, and other relevant factors.

Table 160 : Phase Category of Consumers Open Access to be allowed from

Sl. Phase Category of Consumers Open Access to be allowed from

1. Phase-I Consumers with demand of 15 MW and above 1-Jun-06

2. Phase-II Consumers with demand of 10 MW and above 1-Dec-06

3. Phase-III Consumers with demand of 5 MW and above 1-Dec-07

4. Phase-IV Consumers with demand of 1 MW and above 1-Dec-08

10.4.3 The consumer who seeks open access in accordance with these regulations will

have to pay transmission charges, wheeling charges, cross subsidy surcharge,

additional surcharge and charges to SLDC. The applicability of these charges to any

open access consumer shall be as provided in the regulations for open access. In the

following section all the charges to be paid by consumer seeking open access are

being determined.

Transmission Charge

10.4.4 The Commission has computed the transmission tariff as provided in clause 75 of the

BERC (Terms and conditions for determination of Tariff) Regulations, 2007. The sum

of allocated capacity to all long term transmission customers of the state

transmission system has been taken into consideration. Based on the transmission

cost worked out earlier the approved transmission charge for open access

consumers for the FY 2012-13 is as given in table below:



Table 161: Transmission Charge

Particulars

Transmission ARR 167.61 (Rs. Crores)

Average transmission capacity (MW) - Allocated capacity to all long term Open Access Customers of the State 2620 MW

Transmission charges for long term open access customers (Rs. /MW/Month)

Transmission ARR ÷ (Average transmission capacity X 12) = 53,310

Transmission charges for short term open access customers (Rs./MW/Day)

Transmission ARR x 0.25) ÷ (Average transmission capacity X 365) = 438.16

10.4.5 The Commission decides that the transmission charges in cash will be Rs. 53,310/

MW/ month or part thereof for long term open access consumers and Rs. 438.16/

MW/ day or part thereof for short term consumers. In addition transmission losses of

4% will be reduced in kind from the energy input (i.e. energy injected at the point of

injection) at the point of delivery.

Wheeling Charges

10.4.6 For the energy input at 33 kV the wheeling charge shall be at 10.81 paise/kWh. In

addition 6% of energy in kind will be deducted from the energy input, towards

assumed losses in 33 kV network.

10.4.7 For energy input at 11 kV the wheeling charges shall be 12.64 paise /kWh. In

addition, 8% of energy in kind will be deducted from the energy input towards

assumed losses in 11 kV network.

Open Access Charges

10.4.8 The Open access charges shall be paid as per the table given below if the injection

and drawl points of the open access customer are at different voltage levels.

Table 162: Open Access Charges Drawl

Injection

Transmission 33 KV 11 KV

Transmission

Transmission Charges plus transmission

losses

Transmission charges plus wheeling charges

of 33 kV. Losses of both transmission and 33 kV network shall be

payable

Transmission Charges plus wheeling charges of 33 and

11 kV network shall be payable. The losses of

transmission, 33 and 11 kV network shall be payable

33 KV

Transmission Charges plus transmission

losses

Wheeling charges of 33 kV plus losses of 33

kV network

Wheeling Charges of 33 and 11 kV network. Losses for 33

and 11 kV shall also be payable

11 KV Transmission Transmission charges Wheeling Charges of 11 kV



Drawl Injection

Transmission 33 KV 11 KV

Charges plus transmission

losses

and Wheeling Charges of 33 kV. The losses of

transmission and 33 kV network will have to

be borne

plus losses of 11 kV network

SLDC Charges

10.4.9 Open access consumer shall pay all charges payable to the State Load Dispatch

Centre (SLDC), as determined by the Commission under section 32 of the Act and as

per the Regulation 19 (1) of “Terms and Conditions for Open Access” Regulations,

2006 of BERC.

10.4.10 The Annual SLDC and Operating charges for the present have not been determined

separately as till date SLDC is not an independent entity but continues to be a part of

BSEB with no separate accounts. The Commission believes that expenses incurred

by the SLDC are a part of the transmission expenses of BSEB. The Commission has

determined the revenue requirement for transmission function of BSEB and

consequently the revenue requirement of SLDC are a part of the revenue

requirement of the transmission function. Charges payable to SLDC are a part of the

transmission charges determined by the Commission. Till the time separate accounts

are established by BSEB for SLDC these charges shall continue to be determined as

a part of the Transmission Charges of BSEB.

Cross Subsidy Surcharge

10.4.11 The open access consumers are liable to pay cross subsidy surcharge to

compensate the distribution utility for any loss of revenue due to shifting of its

consumer to the open access system. The cross subsidy surcharge for open access

consumers for the year 2012-13 is calculated as per the following recommended

formula in the Tariff Policy.

S = T – [C (1+L/100) +D]

Where,

S = Surcharge

T = Tariff payable by the relevant category of consumers



C = Weighted average cost of power purchase of top 5% at the margin excluding

liquid fuel based generation and renewable power.

D = Wheeling charges (Transmission and Distribution)

L = System losses for the applicable voltage level, expressed as a percentage.

10.4.12 The cross subsidy surcharge determined as per the above formula is as follows:

For 132 kV consumers = 120.68 Ps./kWh.

For 33 kV consumers (other than HTSS) = 107 Ps./kWh.

For 11 kV consumers (other than HTSS) = 103.43 Ps./kWh

For HTSS consumers 33 kV = 0 Ps./kWh

11 kV = 0 Ps./kWh

10.4.13 As indicated earlier the Commission in view of the prevailing power shortages in the

state would like HT consumers to seek power purchase options from sources outside

the state. The Commission in order to make the cost of delivered power comparable

with the retail tariff approves the following cross subsidy surcharge for FY 2012-13 as

determined by the Commission in its tariff order for FY2011-12.

For 132 kV consumers = 60 Ps./kWh.

For 33 kV consumers (other than HTSS) = 54 Ps./kWh.

For 11 kV consumers (other than HTSS) = 52 Ps./kWh

For HTSS consumers 33 kV = 0 Ps./kWh

11 kV = 0 Ps./kWh

Additional Surcharge

10.4.14 The Commission is not in favour of levy of any additional surcharge, in the absence

of the necessary data. The same shall be leviable only if it is conclusively

demonstrated by BSEB that open access will lead to stranding of its fixed cost. BSEB

should indicate the quantum of such stranded cost and the period over which it would

be stranded for determination of additional surcharge.

Reactive Energy charges

10.4.15 The open access consumers should pay a reactive energy charge to BSEB, for

drawal / injection of reactive energy. The Commission in its last tariff order had

directed BSEB to conduct a study to determine the reactive energy charge and

submit a proposal in the next tariff application. However BSEB has not submitted any

such proposal and till the time BSEB submits a proposal in this regard, the reactive



drawal shall continue to be charged at 04 paise/kVAR as determined by the

Commission in its tariff order for FY2011-12.

Information to be put on the web site

10.4.16 The Commission directs BSEB to put all information related to open access

facilities/charges on its web site. The information should include open access

regulations, procedure for obtaining open access and details of all charges payable

by an open access consumer



11 Renewable Purchase Obligation

11.1 Background

11.1.1 Renewable Energy (RE) from co‐generation and from biomass plants has a potential

of more than 800 MW in the state of Bihar which can be tapped as a viable option for

decentralized power generation within a short gestation period. Generation using

bagasse and biomass such as rice husk, paddy straws, corn cobs/other biomass

sources has the potential to enhance availability of power and provide employment in

rural areas. Large number of biomass projects exceeding 500 kW has been cleared

by State Investment Promotion Board (SIPB) which can be installed with favourable

Renewable Energy Policy of the State Govt. There are several success stories of

village electrification, including power for agricultural and lighting purposes and this

need to be replicated. Bihar is also favorably placed for harnessing solar power on

decentralized basis. This immense potential in the state can be utilised for meeting

its power requirement, particularly in rural areas. Solar Photo Voltic (SPV)

programme is very popular in the state and there is need to lure private investors to

take up larger projects in the state.

11.2 Renewable Purchase Obligations (RPO)

11.2.1 The Renewable Purchase Obligations (RPOs) ensure that the obligated entities

procure a certain minimum percentage of their total power requirement from

renewable energy sources. The followings are some of the key regulatory & policy

provisions related to RPO:

The Electricity Act’ 2003

As per Section 86(1) (e) “The State Commission shall discharge the following

functions namely: “Promote co-generation and generation of electricity from

renewable sources of energy by providing suitable measures for connectivity with the

grid and sale of electricity to any person and also specify, for purchase of electricity

from such sources, a percentage of the total consumption of electricity in the area of

a distribution licensee;”



National Electricity Policy

As per Section 5.12.1 and 5.12.2“Non-conventional sources of energy being the most

environment friendly there is an urgent need to promote generation of electricity

based on such sources of energy. For this purpose, efforts need to be made to

reduce the capital cost of projects based on non-conventional and renewable

sources of energy. Cost of energy can also be reduced by promoting competition

within such projects. At the same time, adequate promotional measures would also

have to be taken for development of technologies and a sustained growth of these

sources

As per Section 5.12.2”The Electricity Act 2003 provides that co-generation and

generation of electricity from non-conventional sources would be promoted by the

SERCs by providing suitable measures for connectivity with grid and sale of

electricity to any person and also by specifying, for purchase of electricity from such

sources, a percentage of the total consumption of electricity in the area of a

distribution licensee. Such percentage for purchase of power from non-conventional

sources should be made applicable for the tariffs to be determined by the SERCs at

the earliest. Progressively the share of electricity from non-conventional sources

would need to be increased as prescribed by State Electricity Regulatory

Commissions. Such purchase by distribution companies shall be through competitive

bidding process. Considering the fact that it will take some time before non-

conventional technologies compete, in terms of cost, with conventional sources, the

Commission may determine an appropriate differential in prices to promote these

technologies”

Tariff Policy

As per Section 6.4 (1) “Pursuant to provisions of section 86(1)(e) of the Act, the

Appropriate Commission shall fix a minimum percentage for purchase of energy from

such sources taking into account availability of such resources in the region and its

impact on retail tariffs. Such percentage for purchase of energy should be made

applicable for the tariffs to be determined by the SERCs latest by April 1, 2006”

National action plan on Climate Change (NAPCC)

“Renewable Purchase Obligation target of 5% at national level for 2010 with annual

increase in trajectory over long term so as to reach around 15% RPO target by 2020”



11.2.2 The RPO targets have been defined by a number of states in the form of Solar RPO

and non-solar RPO targets for obligated entities (Distribution licensee, captive

consumer, open access consumer).

11.2.3 After the enactment of Electricity Act 2003, several States have issued the RPO but

still a number of barriers were being faced in the effective implementation of RPO.

Some of the issues are lack of compliance in a number of states due to low installed

capacity; compliance met & obligated entities not willing to procure more electricity

from renewable energy sources, high transaction cost to meet RPO compliance for

small capacity open access and captive consumers.

11.3 Renewable energy Policy

11.3.1 The Govt. of Bihar (GoB) had issued policy guidelines for increasing private sector

participation for developing Non-conventional energy sources in 2003 which was

applicable for five years. Keeping in the view that the potential for the renewable is

yet to be harnessed the Govt. of Bihar has issued revised policy for the promotion of

power generation from renewable energy sources in June 2011 vide Letter No-Pra

02/Breda Apra Niti-11/08/2845 dated 24/6/2011.

11.3.2 The revised policy is applicable for the development of all form of renewable energy

resources. The responsibility for the development of biomass biogas based projects,

cogeneration projects wind power projects municipal solid waste based projects

remains with the Bihar Renewable Energy Development Agency (BREDA), the state

nodal agency for the development of renewable energy generation programs & for

the development of micro/mini/small hydel plants (up to 25 MW) the responsibility

remains with the Bihar State Hydroelectric Power Corporation.

11.3.3 The revised policy 2011 has issued guidelines on the key issues stated as follow:

a) Project Approval process & role of institutional authorities

b) Regarding the sale of power to the BSEB, wheeling of power for third party

sale or captive use;

c) Project monitoring and activity milestones;

d) Incentives /applicability e.g. applicability of policies notified by the state and

central Govt. from time to time, incentives under prevalent industrial incentive



policy of the GoB and also such similar applicable policies, exemption from

electricity duty and entry tax;

e) Special concession for the sustainability of the biomass based projects that no

two biomass based projects in an area of radial distance of 25 km to ensure

the availability of biomass;

f) Regarding the Renewable Energy Purchase Obligation, the policy has

emphasized that the BSEB or the distribution licensee should purchase more

power from renewable resources than the minimum prescribed by the BERC

with the approval from the Government at tariff approved by the BERC.

11.4 BERC (Renewable Purchase Obligation, its Compl iance and REC Framework

Implementation) Regulations, 2010

11.4.1 The Commission has notified BERC (Renewable Purchase Obligation, its

Compliance and REC Framework Implementation) Regulations, 2010 on 16th

November, 2010; Clause 4(1) of the regulation states that

“Every obligated entity shall purchase not less than 1.5%, 2.5%, 4%, 4.5% and 5% of

its total energy consumption (total energy input minus T&D losses) during 2010-11,

2011-12, 2012-13, 2013-14 and 2014-15 respectively from renewable energy

sources under the Renewable Purchase Obligation or until reviewed by the

Commission.

Provided that 0.25% out of the renewable purchase obligation so specified in the

year 2010-11 shall be procured from generation based on solar as renewable energy

source and shall be increased at a rate of 0.25% every year thereafter till 2014-15 or

until reviewed by the Commission.”

11.4.2 To promote solar energy projects for generation and sale of electricity from solar

projects to distribution licensee within the State of Bihar, the Commission has notified

BERC (Terms and Conditions for tariff determination from Solar Energy Sources)

Regulations, 2010 on 2nd August 2010.

11.4.3 Based on the above mentioned regulations it was made obligatory for BSEB to

purchase certain percentage of energy of their total energy consumption from

Renewable Energy sources, as stated below:



Table 163: Renewable Purchase obligation for BSEB

From Renewable Sources FY 2010-11

FY 2011-12

FY 2012-13

FY 2013-14

FY 2014-15

Renewable Purchase Obligation (RPO)

1.5% 2.5% 4% 4.5% 5.0%

% Share of solar power in RPO 0.25% 0.5% 0.75% 1.0% 1.25%

Net Solar power purchase obligation as a % of total power purchase from all sources

0.00375% 0.0125% 0.03% 0.045% 0.0625%

11.5 Co-generation and Captive Power Policy

11.5.1 Bihar does not have any specific policy for Co-generation & Captive Power Policy.

However, BERC issued order for determination of tariff for purchase of electricity by

the BSEB from biomass based power plant and bagasse based cogeneration plant in

the State of Bihar in suo motu proceeding No. 2008 vide order dated 21st May 2009.

The Commission redetermined the same vide order dated 29.06.2010. In FY 2008 &

FY 2009 BSEB has received 2.32 MU & 13.11 MU resp. from the cogeneration

plants. BSEB has executed PPA with some sugar mills to purchase the power as

detailed in the table below:

Table 164: Co-generation Plants in Bihar

Sl. Name of the Sugar mill (Co-generation plant)

Agreement of Power Supply (in MW) Status as on FY 2009-10 Season Off Season

1. New Swadeshi Sugar Mill 5 8 In operation

2. Bharat Sugar Mill 10 13 In operation

3. JHV Distilleries & Sugar Mills 14.54 18.05

4. Hashan Sugar mills 5 8

11.6 Renewable Potential

11.6.1 The state has huge potential for development of renewable energy resources.

Following table shows the potential & installed capacity for the different technologies.

Table 165: Technology wise potential & installed ca pacity in Bihar

Sl. Technology Potential (in MW) Installed capacity as on Mar’11 (in MW)

1. Small Hydro (irrigation canal & small stream) 195 MW (identified) 52.8

2. Bio mass (Gasifier system) 200 MW (estimated) 1.53 (as on Jun’07)

3. Co-generation ( Bagasse based) 85 MW 47.05



11.6.2 The State has huge potential for the development of mini or micro hydro projects

specially at Gadak canal system, Sone canal system, Tilabeh Dhar, Khardaha Dhar

and Parwana Dhar sites. Out of 92 potential sites identified for hydro power

development the detailed survey & investigation work has been completed for 42

sites4 till 2007.

11.6.3 In Bihar, it is estimated that the rice husk, the agricultural residue about 22 lakhs of

tonne is produced every year which is sufficient to install a capacity of 200 MW in a

decentralized manner. More than 4000 medium & small sized rice mills are operating

in Bihar most of which runs on grid supply & diesel in the absence of grid power. As

on June 2007, biomass gasifier systems worth 1.53 MW of capacity are installed in

rice mills & other industries.

11.6.4 It was estimated by the MITCON, Pune in 1999 that the potential worth 85 MW5 is

possible to be exploited from the 7 major sugar mills in the Bihar. As on 2009-10, the

capacity worth 47.056 MW is installed at some of the sugar mills.

11.6.5 So far in Bihar, no major development has happened for exploitation of the wind

energy.

11.7 Power purchase by BSEB under Renewable Purchas e Obligations (RPO)

11.7.1 Purchase of power from BSHPC and Co-generation plants by the BSEB have been

considered towards the fulfilment of RE purchase obligations and accordingly RE

purchase from other sources have been considered.

11.7.2 The total power purchase quantum and its cost from renewable energy source

approved by the Commission for FY 2011-12 and FY 2012-13 is given in the table

below:

Table 166: Details of Power Purchase from Renewable Source (MU) by BSEB

From Renewable Sources FY 2010-11 FY 2011-12 (Projected)


RE Purchase Solar - 1.0 3.0

Co-Generation NSSM (New Swadeshi Sugar Mill) 28.35 114.0 275.0

B.S.H.P.C. 27.37 30.0 30.0

Total power purchase from Renewable Sources 55.72 145.0 308.8

4,2 Source: “Road Map for the power sector development in Bihar”, July 2007, report of the special task force on Bihar , Govt. of India 6 Tariff Order for the FY 2010-11



From Renewable Sources FY 2010-11 FY 2011-12 (Projected)


Total Power purchase from all sources 10,978 11,931 14,142

T&D losses (%) 32.0% 29.0% 27.5%

Energy consumption (energy input minus T&D losses) 7465.04 8471.01 10252.95

Renewable Purchase Obligation (RPO) achieved/ proposed 0.75% 1.71% 3.0%

% Share of solar power in RPO - 0.69% 0.97%

Net Solar power purchase obligation as a % of total power purchase from all sources - 0.012% 0.029%

11.7.3 The Currents status of power purchase from renewable sources it appears that a lot

need to be done by the BSEB in order to comply with the BERC (Renewable

Purchase Obligation, its Compliance and REC Framework Implementation)

Regulations, 2010. However, BSEB in its current tariff petition for FY 2012-13 has

indicated that they are in advance stage of signing PPA with few private developers

for generation of power through renewable sources.

11.8 Bihar Renewable Energy Development Agency (BRE DA)

11.8.1 As per BERC (RPO) regulations, 2010

“6.1 The Commission shall designate an agency as the State Agency for

accreditation and recommending the renewable energy projects for registration and

to undertake functions under these regulations.

6.2 The State Agency shall function in accordance with the directions issued by the

Commission and shall act in consistent with the procedures/rules laid by Central

Agency for discharge of its functions under the Central Electricity Regulatory

Commission (Terms and Conditions for recognition and issuance of Renewable

Energy Certificate for Renewable Energy Generation) Regulations, 2010.

6.3 The State Agency shall submit quarterly status to the Commission in respect of

compliance of renewable purchase obligation by the obligated entities in the format

as stipulated by the Commission and may suggest appropriate action to the

Commission if required for compliance of the renewable purchase obligation.”

11.8.2 Bihar Renewable Energy Development Agency (BREDA) has been established to

promote development of schemes of non- conventional energy sources. BREDA has

been implementing programme of non-conventional energy sources for schemes are



bio-gas development, SPV systems of Lanterns/Home lighting systems/street lighting

systems, and wind mills. Under the Border Area Development Programme, BREDA

has implemented a scheme of solar street lighting system in 40 villages along the

International Border in the Bihar.

11.8.3 In pursuance of the Rule 6 of BERC (Renewable Purchase Obligation, its

Compliance and REC Framework Implementation) Regulations, 2010 the Bihar

Electricity Regulatory Commission has designated Bihar Renewable Energy

Development Agency (BREDA) as "State Agency" for accreditation and

recommending the renewably energy projects for registration and to undertake

functions as specified in the Regulation

11.8.4 Thus, BSEB shall endeavor to procure and supply the power from New and

Renewable Energy Sources, more than the minimum percentage prescribed under

the RPO obligations by the Commission. Due grid strengthening and up gradation in

the transmission & distribution system shall be undertaken by BSEB to the extent of

power procured by BSEB Licensee from respective New and Renewable Energy

Project.



12 Annexures

12.1 Annexure – I: State Advisory Committee

12.1.1 The meeting of the State Advisory Committee has been convened in the court room

of the Commission at 11.30 A.M. on 23rd December, 2011. Shri U.N.Panjiar I.A.S.

(Retd), Chairperson of the Bihar Electricity Regulatory Commission presided over the

meeting. The detail list of members present during the meeting is as below:

Table 167: Members present during the SAC meeting Sl. Name of member Organization Designation

1. Shri Umesh Narayan Panjiar BERC Chairman

2. Shri Ajay Nayak Energy Dept., GoB Principal Secretary

3. Shri Shambhunath Mishra Energy Dept.,GoB Jt. Secretary

4. Shri S. C. Jha BERC Member

5. Shri R.N.Sharma BERC Member

6. Shri L. Prasad BSEB Member (Generation)

7. Shri T. T. Jha BSEB Member (Transmission)

8. Shri V. C. Gupta BSEB Member (Finance)

9. Shri Rana Awadesh BSEB Member (Administration)

10. Shri A.K. Pandey BSHPC MD (BHPC)

11. Shri Manish Kumar BREDA Director

12. Shri S.K. Patawari BIA Chairman, Energy Sub Committee

13. Shri R K Mediratta IEX Sr. V.P

14. Shri U.K. Poddar BIA Power Sub Committee

15. Shri K.P.S. Keshri BIA President

16. Shri Sanjay Bhartiya BCC Chairman

17. Shri Sanjeev Chaudhary BSMA Secretary

18. Shri Prabhu Dayal Bhartiya BSMA President

19. Shri Shaibal Gupta ADRI Member, Secretary

20. Shri Prabhat Kumar East Central Railway Sr. S.E.

21. Shri Rajesh Kumar East Central Railway Sr. DEE

22. Shri S.K. Singh BSEB C.E. (Commercial)

23. Shri L.N. Choudhary BSEB EEE (Tariff)

24. Shri Rakesh BSEB EEE

25. Shri Jayant Kumar Dubey BSEB AEE (Tariff)

26. Shri Nand Sharma BERC Consultant, BERC



Sl. Name of member Organization Designation

27. Shri Naresh Desai Meghraj Consultant, BSEB

28. Shri Vivek Mishra Meghraj Consultant, BSEB

29. Shri Pramod Kumar Sinha Deloitte, Gurgaon Consultant, BERC

30. Shri Ankur Satija Deloitte, Gurgaon Consultant, BERC

12.1.2 In accordance with Section 181 read with Section 87 of the Electricity Act, 2003, the

Commission has constituted a State Advisory Committee (SAC). The Chairman

welcomed the members present and stated that as indicated in the Agenda Notes

sent with the notice for the meeting, the main agenda of the day is to discuss the

tariff petition proposed by the Bihar State Electricity Board for the year FY 2012-13,

which had been published newspaper and uploaded on the website of BSEB in

accordance with the provisions of the Electricity Act’ 2003, inviting comments/

suggestions on the tariff petition of the BSEB.

12.1.3 The Chairman stated that generally the State Advisory Committee (SAC) meeting

has been held to discuss the tariff petition but he considered it necessary to hold

such discussion periodically, to enable the members of the State Advisory Committee

to have opportunities to offer views as they may have on the matters. The Chairman

assured that the SAC meeting will take place frequently from now onward to discuss

the other issues related to supply and distribution of electricity in Bihar. Further, the

chairman also said to have next SAC meeting sometime around the month of April

2012.

12.1.4 The Chairman than summarised the salient points of ARR and tariff petition for FY

2012-13. It was stated by the Chairman that the approved ARR for FY 2011-12 is Rs

4706 Cr. against which the Board has now proposed to Rs 6253 Cr. for FY 2011-12

as revised estimate, with is an increase of Rs 1547 Cr. The Board has projected the

ARR of Rs 7898 Cr. for FY 2012-13 and BSEB has proposed for recovery of revenue

gap of past year on the true up exercise amounting to Rs 5033 Cr. Thus BSEB has

projected an ARR which is almost 2.5 times the approved ARR for FY 2011-12. The

major portion of the ARR is on account of true up portion of the past years.

12.1.5 The Chairman stated that the average tariff per unit proposed by the Board for the

year FY 2012-13 is Rs 6.37 per unit against the current approved tariff of Rs 4.06 per

unit.

12.1.6 The Chairman told during the meeting that IEX has sent the communication to the

Commission to discuss the recent letter by Ministry of Power dated 30th November



2011 regarding the provision of mandatory Open Access to consumers requiring

power of 1 MW or above and the opinion of Learned Attorney General of India. He

stated that the same communication by IEX has already been circulated to member

of the SAC.

12.1.7 While discussing the implication of the MoP letter the Chairman stated that as per the

opinion of Attorney General, the Commission can’t determine the tariff for consumer

getting power of 1 MW or above. Such consumer will be mandatorily provided Open

Access by the distribution licensee. Such Consumers can purchase power from any

source. If these consumers choose to purchase the power from the Board then they

will be governed by Section 49 of the Electricity Act’ 2003 which means that

consumers will have to enter into separate agreement with Board for supply of

electricity and Commission will not fix their tariff.

12.1.8 The Chairman also mentioned that the State Government vide letter no. 4208 dated

19-09-2011 has issued a clarification that the financial assistance given by the Bihar

Government to the Board in the form of resource gap of Rs 1080 Cr. with funds being

used for compensating the financial loss caused by the difference between actual

T&D loss and T&D loss determined by the Commission. The remaining amount will

be used for subsidizing the rural and agriculture consumers. As per the letter the

same treatment is also applicable to the resource gap assistance given in the past.

12.1.9 In response to that Principal Secretary, Energy Department, Bihar stated that they

have already initiated the discussion on the matter with concerned Government

officials and assured that the Government will revert back soon on this issue.

12.1.10 The Chairman also stated that true up exercise of the year from FY 2006-07 to FY

2008-09 has been completed and the order will be available in the month of January

2012.

12.1.11 Thereafter, audio visual presentation was made by Chief Engineer (Commercial) of

the BSEB on the salient features of ARR and tariff petition filed by the Board for

FY2012-13. The Chairman then called upon the other Members to make their

comments / suggestions.

Participating in the deliberations of the SAC, the Members raised the following issues.

12.1.12 Terminal benefits: During the meeting the Chairman, BERC has asked for the

clarification on the accounting principle followed by the Board for terminal benefit of



its employees. Member (Finance), BSEB assured to provide the clarification on the

same and stated that the Board is following the Account Rules 1985 notified by the

Central Government.

12.1.13 Regulatory assets: The Chairman stated that the Board has indicated a huge

revenue gap of Rs 6705.57 Cr. during FY 2012-13. The Chairman asked ‘Is it proper

to pass on such revenue gap to the consumer? In this context Chairman SAC

directed the Board to furnish the information related to the practice followed by

different state regulatory Commission on treatment of regulatory assets in the past to

the Commission within next fifteen days.

12.1.14 Load factor for Railway Traction Service (RTS): The Board has been also asked for

clarification regarding the purpose of fixation of load factor for consumers like

Railways for the process of tariff determination. In this regard, the representative

from Eastern Central Railway stated that it is very difficult to maintain the constant

level of Load factor round the clock as it depends upon the frequency of the trains

commuting in the particular route. Further, he suggested the SAC to maintain the

same level of Load Factor as issued by the BERC in its previous Tariff Order for FY

2011-12.

12.1.15 Renewable Purchase Obligation: A detailed discussion took place during the meeting

on the Renewable Purchase Obligation of the Board. It has been pointed out that the

proposed power purchase through renewable source as proposed by the Board in its

tariff petition for FY 2012-13 is not as per Renewable Purchase Obligations, its

Compliance and REC Framework Implementation Regulations, 2010. The Chairman

of the Commission assured that this will be looked into and the RPO shall be

complied as per regulation.

12.1.16 Minimum Monthly Charge: During the meeting the matter related to recovery of fixed

tariff and the Fixed cost of the Board has been discussed where the Member

(Finance) of the Board was of the opinion that the Fixed charge component of the

tariff is not adequate to recover the fixed cost of the Board due to which MMC has

been proposed in the ARR petition for FY 2012-13. The other members of the SAC

have suggested that the MMC should be phased out from the tariff as in the absence

of guaranteed minimum supply hours there is no significance of MMC. The practice

in the other states on MMC has also been discussed during the meeting.



12.1.17 Reduction of Cross-subsidy surcharge: The representative from Bihar Industries

Association raised the issue of cross subsidy surcharge citing the example of

Judgment of Hon’ble APTEL dated Sep 2011 and advised the committee to compute

the Voltage wise Cost of supply for determination of cross subsidy surcharge for all

consumer category in general and for Industrial consumers in particular. The member

of SAC has also talked about the range of cross subsidy surcharge and wheeling

charge in the different states. It has also been suggested by the representative of BIA

that the cross subsidy surcharge may be waived off for the consumers buying power

through open access in case of non-availability of power with the state electricity

Board. The member of the SAC has also raised the issue of higher growth in no. of

subsidized consumers as compared to subsidizing consumers and its impact on

cross-subsidy.

12.1.18 Tariff should be comparative to other state/ Consideration in tariff for NDS-III

category: Representative from ADRI suggested that the tariff rate should be fixed

taking into consideration of the tariff rates of other states and should be comparable

with that. He also suggested that as a part of civic society due consideration should

be given to the NDS-III category (tariff meant for temple etc) while determining the

tariff of the Board. He has also suggested for providing un-interrupted power supply

to Patliputra Industrial areas consumers, where supply are erratic.

12.1.19 The representative of the Bihar Chamber of Commerce has advised that the

“Construction Power” category may also be introduced for LT consumers as well.

12.1.20 Participation of different consumer group in the public hearing process: The

Chairman, BERC on the matter of tariff fixation exercise has welcomed the active

participation from different consumer groups, and also invited them to participate in

the forthcoming public hearing on the tariff petition of BSEB for FY 2012-13. As per

the BERC the larger participation of the consumer groups in the public hearing

process shall reveal the performance standard maintained by the Board vis-a vis

performance standard set by the BERC in Standards of Performance of Distribution

Licensee Regulations, 2006.

12.1.21 Proposed tariff hike by the Board: The representative from Bihar Industries

Association (BIA) has also pointed out that the tariff hike as proposed by the Board

for FY 2012-13 are around 50%, whereas the supply hours are not adequate, and

Minimum Charge has been proposed. The representative of BSMA stated that the

tariff of Induction Furnace should be comparable with other states. The demand



charges proposed by the Board are too high. There should not be any MMC

Charges.

12.1.22 Non-achievement of T&D loss target by the Board; A detailed discussion took place

on the issue of non-achievement of T&D loss targets by the Board, the member of

the SAC advised the Board to take immediate steps for reducing the T&D loss of the

Board so as to meet the T&D loss target as set by the BERC. The representative of

Bihar Industries Association (BIA), Bihar Chamber of Commerce (BCC), Bihar Steel

Manufacture association (BSMA) and others stated that the target fixed by the BERC

should not be changed.

12.1.23 Electricity Supply code and tariff proposal for FY 2012-13: The member of the SAC

also indicated the instances in the tariff petition for FY 2012-13 where the Board has

proposed the changes in charges such as Development charge, security deposit, and

charges for Tatkal Connection etc. most of which has already been specified in the

Electricity Supply Code. The member of SAC suggested that such points should be

dealt in while amending the Electricity Supply Code for which separate public hearing

may be organized. Regarding development charges and Tatkal Charges it has been

pointed out by the representative of the BIA that the Board is obliged to supply power

under Section 43 of the Electricity Act’ 2003 and therefore changing of Development

charges or Tatkal Charges is not justified and proper.

12.1.24 Intra-state Open Access: One of the members of the SAC was of the opinion of

introducing Intra-state open access in the state of Bihar for consumer with load in the

range of 100 kW to 1 MW.

12.1.25 Metering status: The members of the SAC are of the opinion that the Board should

achieve 100% metering status and there should not be any instances of un-metered

supply.

12.1.26 Resource Gap grant of the State Government: The representative of the BIA stated

that the resource Gap grant has been provided to purchase Power from NTPC and

the same has been treated as revenue receipt and it should to be continued in future

also. Any change will result in higher rate of tariff.

12.1.27 FPPCA: The member of the SAC has also commented on the additional burden on

the consumers through FPPCA.



12.1.28 The Chairman placed on record his profound gratitude to the Members present, for

their valuable suggestions and submissions and assured that these would be kept in

view, while finalizing the Tariff for the year 2012-13.



12.2 Annexure - II: List of Participant during the Public hearing.

Sl. Name and address of Participants

Participants present during the Public hearing at D arbhanga on 15 th February 2012

1. Sri Pawan Kr. Sureka - Chamber of Commerce & Industries

2. Sri Prakash Lal Poddar - Divisional Chamber of Commerce & Industries

3. Sri Vijay Kumar Bairoliya - Divisional Chamber of Commerce & Industries

4. Sri Sushil Kumar Jain - Divisional Chamber of Commerce & Industries

5. Sri Sunil Kumar Singh - Divisional Chamber of Commerce & Industries

6. Sri Rintu Kr. Jha - Gramin Vikash Association

7. Sri Shatrughan Jha - Dy. President, JD (U)

8. Prof. Pramod Kr. Sharma - ESCRP

9. Sri Prabodh Singh - Y.I.C.C., Darbhanga

10. Sri Binod Kr. Pansari – MICC

11. Sri Ajay Kr. Jalan -Ex. Mahapaur

12. Sri Gyaneshwar Prasad - Industry Chamber

13. Sri Bhola Bhandari – Individual

14. Sri Animesh Kr. Jha – Individual

15. Sri Kedar Nath Jha – Individual

16. Sri Ehtashamur Rahman - Individual

17. Sri Viveka Nand Thakur – Individual

18. Sri Arun Kumar – Individual

19. Sri Ghulam Ahmad Nazir – Individual

B.E.R.C. Representatives

1. Sri Lakshman Bhakta - Dy. Secretary, BERC

2. Sri Amit Kumar Laha – BERC

3. Sri Nand Sharma - Consultant, BERC

4. Sri Ankur Satija – Deloitte (Consultant, BERC)

B.S.E.B. Representatives

1. Sri Satish Kumar Singh - C.E, (Commercial), BSEB

2. Sri Vijay Kumar - FC II (F&A), BSEB, Patna

3. Sri D. N. Tiwari - G.M cum C.E, Darbhanga

4. Sri K. N. Jha - DGM cum ESE MESA

5. Sri J. K. Dubey - AEE (Tariff)

6. Sri B. K. Mishra - ESE, Darbhanga

7. Sri Amiya Shankar -DDA, MESA, Darbhanga

8. Sri Sudarshan Ram - EEE/Revenue & Commercial, Darbhanga

9. Sri Pradeep Kr. Jha - EEE, Madhubani

10. Sri Ram Babu Bhatti - EEE/Jhanjharpur




11. Sri R. K. P Chaudhary - EEE/ Darbhanga (Rural)

12. Sri K. K. Singh - EEE/Darbhanga (Urban)

13. Sri D. N. Sinha - Acct. BSEB, Mithila Area Board

14. Sri Naresh Desai – Meghraj, (Consultant, BSEB)

Participants present during the Public hearing at B hagalpur on 23 rd February 2012

1. Sri Gautam Suman - Chairman, Ang Uthanodolan Samiti

2. Dr. Jayant Jalad - Kendriya Mahaschiv, Ang Uthanodolan Samiti

3. Sri Gautam Banerjee - Co-ordination Committee

4. Sri Prakash Chandra Mishra - Danik Jagran

5. Sri Amar Nath Modi - Human Rights

6. Sri Santosh Kumar - Chairman, Sarvodya Samajik Sanstha, Sahebganj

7. Sri Prakash Chandra Mishra - Swami Vivekanand Samiti, Bhagalpur

8. Sri Jawahar Pd. Mandal -Sampoorna Kranti Aandolankari Manch

9. Sri M.D. Usman - Gen. Sec. RJD

10. Sri Rajesh Singh - Danik Jagran

11. Sri Mukutdhari Agrawal - President, EBK

12. Sri Sudhir Kr. Das - SVS, Bhagalpur

13. Sri Mukesh Kr. Das - Ghositos Girls High School

14. Sri Shashi Shankar Rai - Member, Anusharavan Samiti, Aapurti Anumandal

15. Sri Alok Verma - ETV Bihar/Jharkhand News

16. Sri Abha Kumar - F.M.T News

17. Sri Sandeep Jha - D.B.A, Bhagalpur

18. Sri K. K. Dubey - D.B.A, Bhagalpur

19. Sri Prakash Chandra Gupta – Individual

20. Sri S. K. Dwama – Individual

21. Sri R. K. Baid – Individual

22. Sri Lakhan Lal Prasad - Individual

23. Sri Jata Shankar Tiwari – Individual

24. Sri Mahesh Pd. Gupta – Individual

25. Md. Hemayat Ansari – Individual

26. Nasim Ansari - Individual

27. Sri Gotam Gupta – Individual

28. Sri Bhawani Lal – Individual

29. Sri Birendra Kumar – Individual






2. Sri Amit Kumar Laha - BERC




1. Sri Satish Kumar Singh - C.E, Commercial, BSEB

2. Sri N. K. Jha - Director (Expenditure), BSEB

3. Sri Rajendra Pandey - ESE, Bhagalpur

4. Sri D. K. Shastri - DDA (Incharge)

5. Sri Suresh Prasad - EEE, Banka

6. Sri R.N. Singh - EEE/BGP/UR

7. Sri K. N. Singh - G.M cum CE, Bhagalpur

8. Sri Gopal Kumar - APO/ESC/Bhagalpur

9. Sri Suresh Prasad Mandal - AEE (APT-1) BSEB, Bhagalpur

10. Sri Bijay Kr. Sinha -Reporter, Sadhna News

11. Sri Ramanand Gupta – Individual

12. Sri Naresh Desai – Meghraj (Consultant, BSEB)

Participants present during the Public hearing at P urnea on 24 th February 2012

1. Sri S.K. Ghosh, G.M. Jute Park, Purnia

2. Sri R. C. Mishra – Vice President Chamber of Commerce.

3. Sri Pankaj Nayak - Pankaj International

4. Sri Bimal Singh Bengani - President, North Eastern Chamber of Commerce, Katihar

5. Sri Nirmal Kishore Jha - G. M. , D.I.C, Purnea

6. Sri Nilammber Agrawal - Sri Sri Cold Storage, Purnea

7. Sri R. K. Pathak - ETV Office, Purnea

8. Sri Mahesh Paswan - Bihar Bikash Morcha, Purnea

9. Sri OM Polymers – BIADA

10. Sri Manish Kumar Jha – BIADA

11. Sri Ashish Singh – BIADA

12. Sri Vikram Kr. Singh – BIADA

13. Sri Nilesh Kr. Agrawal – BIADA

14. Sri Satish Chandra Jha – Individual

15. Sri Subhash Kumar – Individual

16. Sri Rajesh Patwari - Individual

17. Sri Anil Chamaria – Individual

18. Sri Manoj Thakur – Individual

19. Sri Rameshwar Prasad – Individual




20. Sri Anant Bharti – Individual

21. Sri Rakesh Kr. Singh – Individual

22. Sri Bharat Bhagat – Individual

23. Sri Kanhaiya Choudhary – Individual

24. Sri Bupendra Nr. Singh – Individual



2. Sri Amit Kumar Laha - BERC





2. Sri N. K. Jha - Director (Expenditure), BSEB

3. Sri Ram Chandra Singh – DGM cum ESE, KESA


Participants present during the Public hearing at G aya on 27 th February 2012

1. Kiran Lama - Daiokyo Budhist, Gaya

2. N. Lobsay -Bodhgaya Temple

3. Sri Manoj Kumar - Daiokyo Temple, BodhGaya

4. Sri Beelesh Yadav - Japanese Temple

5. Sri Arbind Kumar - President, Bihar Ind. Assoc.

6. Sri Kaushlendra Pratap - Central Bihar Chamber of Commerce, Gaya

7. Sri Brijnandan Pathak -Vidyut Upbhokta Sangharsh Samiti, Gurudwara Road, Gaya

8. Sri Ramanuj Pd. Singh -Chairman, Prafudh Wagnik Munch, Gaya

9. Sri Pena Chand - Sheelan Monastery

10. Sri Arun Kumar - ETV Reporter

11. Sri R. S. Nagraj – BJP

12. Sri Prem Narain - Executive Member, BIA

13. Sri A.C. Lama - Bhudhist Thai Temple

14. Sri N. Gawang – Individual

15. Sri Sanjay Kumar – Individual

16. Sri Sinith prakash – Individual

17. Sri Deepak Kumar – Individual

18. Sri Manish Sinha – Individual

19. Sri Manohar Kumar – Individual

20. Sri Pankaj Kumar – Individual




21. Sri Ajit Kumar – Individual

22. Sri Bidu Bhushan Pd.

23. Sri Neeraj Kumar – Individual

24. Sri Sanath Mishra – Individual

25. Nitam Raj – BBCN News




3. Sri Pramod Kumar Sinha – Deloitte (Consultant, BERC)



2. Sri Om Prakash – GM cum C.E. , Gaya

3. Sri Arbind Prasad - E.S.E (Supply), Gaya

4. Sri J. K. Dubey - A.E.E (Tariff)

5. Sri R. N. Chaudhary E.E.E, Gaya

6. Sri A. K. Saha -A.E.E (Rev),MESA, Gaya


Participants present during the Public hearing at M uzaffarpur on 13 th March 2012

1. Sri Munindra Thakur

2. Sri. Dhurv Shankar Chaudhary

3. Dr. Naim Kauber

4. Sri. Vishnu Kant Jha

5. Sri. Ksishna Kumar

6. Sri. Hari Shankar Singh

7. Sri. Irshad Hussain

8. Sri. Akhilesh Singh

9. Sri. Arun Kumar Dhanuka – North Bihar Chamber of Commerce

10. Sri. Jai Prakash Sarraf – North Bihar Chamber of Commerce

11. Sri. Amid

12. Sri. Nunu Kumar Mishra

13. Sri. S. Mishra

14. Sri. Vineet Agrawal – M/s Ashok Polymer Pvt. Ltd.

15. Sri. Bharat Bhushan – Laghu Udyug Bharti

16. Sri. Sanjeev Kumar – Uttar Bihar Udyami Sangh

17. Sri. Chitranjan Prasad – Uttar Bihar Udyami Sangh

18. Sri. Ashok Bharti – Bijli Grahak Sangh






2. Sri Amit Kumar Laha – BERC





2. Shri Gyasuddin - GM-cum-CE, Tirhut Electric Supply Area

3. Sri Arvind Kumar – EEE (Urban), Muzaffarpur

4. Sri K.K. Sharma – ESE

5. Sri S. K. Das – EEE, Muzaffarpur (E)

6. Sri Umesh Bhakta - EEE, Muzaffarpur (W)

Participants present during the Public hearing at P atna on 14 th & 19 th March 2012

1. Sri H. C. Meena - CEDE/EER, Hajipur

2. Sri Arvind Kr. Mishra - Gurhatta, H. Path, Patna

3. Sri Prabhat Kumar - Sr. SE/TRD/DNR

4. Md. Zubair - Vidyut Sangharsh Morcha, Ara

5. Sri Raj Kishor Sharma - Dy. Sec. Lok Kalyan Aayog Ara

6. Sri Ajit Pd. Mehta - Sr. Dy. Sec., Bihar Jawan Kishan Morcha

7. Sri U. K. Poddar - BIA, Patna

8. Sri Sanjay Goenka - BIA, Patna

9. Sri Sanjay Bhatiya -Dinason, Patna

10. Sri Krishan Kr. Singh -Krishan Bhavan, Digha, Patna

11. Shree Nath Singh -Sangharsh Samiti

12. Sri R. B. Acharya - Sangharsh Samiti

13. Sri B. N. Prasad - Bhojpur Chamber of Commerce

14. Sri Shiv Narayan -Bhojpur Chamber of Commerce

15. Smt. Shakuntla Devi - Jan Sangharsh Morcha

16. Sri Vinay Kr. Sinha - C.P.I .M, Patna city, Patna

17. Sri Bimal Pd. Singh - Patna city, CPIM

18. Sri Virendra Thakur - T.U.C.C., Bihar

19. Sri Umesh Kr. Singh - Mahaschiv, Jan Sangharsh Morcha

20. Sri Abhay Goswami -Chairman, Jan Sangram Sena

21. Sri Dilip Mahto -Treasurer, Jan Sangharsh Morcha

22. Sri Subhash Parwari - Parwari Mills Private Limited

23. Sri Manish Poddar - Gangotri Iron & Steel Company Limited




24. Sri Manoranjan Pd. Singh – Individual

25. Sri Chandrika Singh – Individual

26. Sri A. P. Saha – Member Senior Citizen Forum

27. Sri Vijay Kr. Dibakar – Individual

28. Smt. Neelam Devi – Individual

29. Miss Lakshmi Kumari - Individual

30. Smt. Kamla – Individual

31. Prof. P. K. Sharma – Individual

32. Sri Doman Singh –Individual

33. Sri Raj Kumar – Individual

34. Sri Shaligram Singh - Individual

35. Sri Wakil Thakur – Individual

36. Sri Uma Shankar pd. - Individual

37. Sri Mritunjay Mani – Individual

38. Sri Ramanand Srivastava – Individual

39. Sri Raja Babu – Individual

40. Sri G. K. Sinha – M/s Balmukun Concast ltd.

41. Sri Sanjeev Kumar Chaudhary – GISCO

42. Sri Suraj S - BIA


1. Sri Ganesh Prasad – Secretary, BERC

2. Sri R. P. Kanth – DD (A), BERC



5. Sri P. R. Ranjan - Consultant, BERC

6. Sri K. N. Thakur - Consultant, BERC

7. Sri Pramod Kumar Sinha – Deloitte (Consultant, BERC)

8. Sri Pankaj Goinka – Deloitte (Consultant, BERC)



2. Sri Vijay Kumar - FC II (F&A), BSEB, Patna

3. Sri L. N. Choudhary – ESE (Tariff), BSEB

4. Sri S. K. Srivastava - ESE, PESU Unit

5. Sri Vivek Mishra - Meghraj (Consultant, BSEB)

6. Sri Saurabh Garg - Meghraj (Consultant, BSEB)

bihar tariff 2012-13

Documents

supply of electricity

state advisory committee

public hearing

filing of tariff petitions

issue of tariff orders

public consultation

inviting comments suggestions

bsebs response