commission's order on aggregate revenue...

COMMISSION'S ORDER

ON

AGGREGATE REVENUE REQUIREMENT OF HVPNL FOR TRANSMISSION BUSINESS & SLDC AND TRANSMISSION

TARIFF & SLDC CHARGES FOR FY 2013-14

CASE NO: HERC/PRO - 29 OF 2012

29th March, 2013

Panchkula

HARYANA ELECTRICITY REGULATORY COMMISSION Bay No. 33-36, SECTOR - 4, PANCHKULA - 134 112, HARYANA

www.herc.gov.in

1

CONTENTS Page No.

1. PROCEDURAL ASPECTS OF THE ARR FILING .......................................... 6

1.1 BACKGROUND .............................................................................................. 6 1.2 HVPNL’S ARR PETITION FOR FY 2013-14: ................................................... 8 1.3 PUBLIC PROCEEDINGS .................................................................................. 9 1.4 SALIENT FEATURES OF THE ARR PETITION OF HVPNL: ................................ 10

1.4.1 HVPNL proposal for ARR of Transmission business for FY 2013-14: 10 1.4.2 Revenue Gap: ................................................................................... 12 1.4.3 Proposed transmission tariff: ............................................................. 12 1.4.4 SLDC ARR & Charges ...................................................................... 13

1.5 STATE ADVISORY COMMITTEE ..................................................................... 14

2. ANALYSIS OF THE ARR FILING AND COMMISSION’S ORDER .............. 16

2.1 OPERATING AND MAINTENANCE (O&M) EXPENDITURE.................................. 16 2.1.1 Employees’ cost ................................................................................ 18 2.1.2 Terminal benefits .............................................................................. 19 2.1.3 Repairs and Maintenance Expenses (R&M) ...................................... 22 2.1.4 Administrative and General Expense (A&G) ..................................... 23

2.2 INTEREST COST .......................................................................................... 24 2.2.1 Capex & Interest on borrowings thereto ............................................ 24 2.2.2 Interest on working capital borrowings .............................................. 25 2.2.3 Other interest costs ........................................................................... 25

2.3 DEPRECIATION ........................................................................................... 30 2.4 SPECIAL APPROPRIATIONS .......................................................................... 32

2.4.1 Fringe Benefit Tax (FBT) ................................................................... 32 2.4.2 Income Tax ....................................................................................... 33 2.4.3 Contribution to Contingency Reserve ................................................ 33 2.4.4 True up of ROE for FY 2011-12 ........................................................ 33 2.4.5 Debt redemption obligation ............................................................... 34

2.5 UNITARY CHARGE (PPP TRANSMISSION PROJECT) ....................................... 38 2.6 TOTAL EXPENDITURE .................................................................................. 39 2.7 CAPITAL EXPENDITURE (CAPEX) ................................................................ 41

2.7.1 Capital Investment Plan: ................................................................... 41 2.8 RETURN ON EQUITY (ROE) ......................................................................... 49 2.9 CAPITAL BASE & CWIP ............................................................................... 51 2.10 GROSS FIXED ASSETS (GFA) .................................................................. 51 2.11 NON TARIFF INCOME AND OTHER INCOME ................................................ 52 2.11.1 NON TARIFF INCOME FOR THE YEAR 2013-14 ....................................... 52

2.11.2 Truing up of Non Tariff Income for FY 2011-12 ............................. 52 2.11.3 True up of SLDC expenses for FY 2011-12 .................................. 53 2.11.4 Proportionate charge for 124 MW ................................................. 54

2.12 AGGREGATE REVENUE REQUIREMENT ..................................................... 54 2.13 TRANSMISSION LOSSES .......................................................................... 55 DAMAGE OF POWER TRANSFORMERS:................................................................. 67 FATAL & NON – FATAL ACCIDENTS: ...................................................................... 68

3 . TRANSMISSION TARIFF & SLDC CHARGES ............................................ 71

3.1 BACKGROUND INFORMATION ON TARIFF FILING ............................................ 71 3.2 TARIFF PROPOSED BY HVPNL FOR FY 2013-14: ......................................... 73 3.3 ANALYSIS OF THE TARIFF PROPOSAL ........................................................... 76

2

3.3.1 TRANSMISSION COST .............................................................................. 76 3.3.2 TARIFF DESIGN ...................................................................................... 76 3.4 TRANSMISSION TARIFF ................................................................................ 77 3.5 REACTIVE ENERGY CHARGES ..................................................................... 78 3.6 BILLING ...................................................................................................... 80 3.7 RECOVERY OF SLDC EXPENSES ................................................................. 80

3.7.1 Short Term Open Access Consumers ............................................... 81 3.7.2 SLDC Application Fee ....................................................................... 81

3.8 INCENTIVE .................................................................................................. 81 3.9 REBATE / LATE PAYMENT SURCHARGE ........................................................ 82

CONCLUSION ..................................................................................................... 84

3

LIST OF TABLES Page No.

TABLE 1.1- HVPNL PROPOSAL FOR ARR OF TRANSMISSION BUSINESS FOR 2013-14 (RS. IN MILLIONS) .............................................................................................................. 11

TABLE 1.2- REVENUE GAP FOR FY 2013-14 ................................................................... 12

TABLE 1.3- PROPOSED TRANSMISSION TARIFF FOR FY 2013-14 .................................... 12

TABLE 1.4- TRANSMISSION CHARGES FOR FY 2013-14 ................................................. 13

TABLE 1.5- ARR FOR SLDC BUSINESS FOR FY 2013-14 AS PROJECTED BY HVPNL ........... 13

(RS. MILLIONS) ........................................................................................................... 13

TABLE 1.6- SLDC CHARGES FOR FY 2013-14 ................................................................ 14

(RS. MILLIONS) ........................................................................................................... 14

TABLE 2.1 - O&M EXPENSES (RS. MILLIONS) ................................................................ 17

TABLE 2.2 - COST BREAK - UP/ KWH ........................................................................... 17

TABLE 2.3 - PENSION LIABILITIES NOT TO BE FUNDED FROM THE HVPNL PENSION TRUST (RS. MILLIONS) ........................................................................................................... 21

TABLE 2.4 - EMPLOYEES’ COST FOR FY 2013-14 (RS. MILLIONS) ................................... 22

TABLE 2.5 – EXCESS R&M EXPENSES ALLOWED IN EARLIER YEARS (RS. MILLIONS) ....... 23

TABLE 2.6 – OTHER INTEREST COSTS........................................................................... 29

TABLE 2.7 - INTEREST COST FOR TRANSMISSION BUSINESS FOR FY 2013-14 ................ 29

TABLE 2.8 - INTEREST COST FOR SLDC FOR FY 2013-14 (RS. MILLIONS) ......................... 30

TABLE 2.9 -DEPRECIATION FOR FY 2013-14 (RS. MILLIONS) ......................................... 32

TABLE 2.10 -TRANSMISSION BUSINESS APPROVED EXPENDITURE FOR FY 2013-14....... 40

(RS. MILLIONS) ........................................................................................................... 40

TABLE 2.11 - SLDC APPROVED EXPENDITURE FOR FY 2013-14 (RS. MILLIONS) .............. 40

TABLE 2.12 - CAPITAL EXPENDITURE PROJECTED BY HVPNL, APPROVED BY HERC & ACTUAL ...................................................................................................................... 43

TABLE 2.13 APPROVED CAPITAL EXPENDITURE ........................................................... 48

TABLE 2.14 - CALCULATION OF CWIP FOR FY 2013-14 (RS. MILLIONS) .......................... 51

TABLE 2.15 - DETERMINATION OF GFA FOR FY 2013-14 (RS. MILLIONS) ....................... 52

TABLE 2.16 - NON- TARIFF INCOME FOR TRANSMISSION FOR FY 2013-14 (RS. MILLIONS) .................................................................................................................................. 53

TABLE 2.17 -TRANSMISSION ARR FOR FY 2013-14 (RS. MILLIONS) ............................... 55

TABLE 2.18 - SLDC ARR FOR FY 2013-14 (RS. MILLIONS) ............................................... 55

TABLE 3.1 - HERC APPROVED TRANSMISSION TARIFF & SLDC CHARGES ........................ 73

FOR FY 2012-13 .......................................................................................................... 73

TABLE 3.2 – TRANSFORMATION CAPACITY FOR FY 2013-14 .......................................... 74

TABLE 3.3 - HVPNL’S PROPOSED TRANSMISSION TARIFF FOR FY 2013-14 ..................... 75

TABLE 3.4 - DETERMINATION OF TRANSMISSION TARIFF (FY 2013-14) ......................... 78

4

HARYANA ELECTRICITY REGULATORY COMMISSION

BAYS NO. 33-36, SECTOR - 4, PANCHKULA - 134 112

CASE NO: HERC / PRO - 29 OF 2012

IN THE MATTER OF

Petition / Application filed by Haryana Vidyut Prasaran Nigam Limited (herein after

referred to as HVPNL or petitioner) for approval of Aggregate Revenue Requirement

(ARR) for Transmission business and State Load Dispatch Centre (SLDC) and

determination of Transmission Tariff and SLDC Charges for FY 2013-14.

DATE OF ORDER: 29th March, 2013

ORDER

The Haryana Electricity Regulatory Commission (hereinafter referred to as ‘the

Commission’), in exercise of powers vested in it under section 62 of the Electricity

Act, 2003 and Section 26 of the Haryana Electricity Reforms Act, 1997 and all

other provisions enabling it in this behalf, passes this order determining the

Aggregate Revenue Requirement (ARR) for Transmission and State Load

Despatch Centre Business of Haryana Vidyut Prasaran Nigam Limited and the

transmission tariff and SLDC charges for the FY 2013-14. The Commission while

passing this order has considered the petition filed by HVPNL for ARR for

Transmission Business & SLDC, Transmission tariff & SLDC charges for FY

2013-14, subsequent filings made by HVPNL in response to various queries of

the Commission, the objections / comments of UHBVNL on the ARR Petition of

HVPNL in response to the Public Notice, submissions made by HVPNL in its

presentation in the public hearing held on 29th January, 2013.

Present: Shri R. N. Prasher

Shri Rohtash Dahiya Shri Ram Pal

Chairman Member Member

5

In its consultative process the Commission convened a meeting of the State

Advisory Committee on 25.03.2013 and their views on different aspects of

transmission tariff & SLDC charges have been kept in mind while passing this

order. Further all other relevant facts and information on the record of the

Commission have been perused before passing this order.

ARR of HVPNL for Transmission Business & SLDC charges for FY 2013-14

6 Procedural Aspects of the ARR Filing

1. PROCEDURAL ASPECTS OF THE ARR FILING

1.1 Background

(i) The Petitioner i.e. Haryana Vidyut Prasaran Nigam Ltd. (HVPNL) is a

State Government owned company registered under Indian Companies Act,

1956. It is presently engaged in the business of transmission in the State and

is also operating State Load Dispatch Centre (SLDC) at Sewah in Distt.

Panipat. HVPNL came into being on 14.8.1998 as per the provisions of the

first Transfer Scheme Rules, 1998 notified by the Government of Haryana

under HERA for implementation of Power Reforms & Restructuring of

erstwhile Haryana State Electricity Board (HSEB). Initially both transmission

as well as distribution business was vested in HVPNL. Thereafter, through

the Second Transfer Scheme Rules, 1999, the Distribution business was

separated from HVPNL and vested into two distribution companies, namely

Uttar Haryana Bijli Vitran Nigam Ltd. (UHBVNL) & Dakshin Haryana Bijli

Vitran Nigam Limited (DHBVNL)

(ii) The Government of Haryana vide its notification No. 1/10/2003-1/

Power dated 9.12.2003 notified HVPNL as the State Transmission Utility

(STU) for the purpose of section 39(1) of E.A. 2003. Through another

notification No. 1/11/2003-1 Power dated 9.12.2003, the State Govt. notified

that SLDC at Sewah in Distt. Panipat, established for the purpose under

section 31 (1) of the Act, shall be operated by HVPNL w.e.f. 10.12.2003.

(iii) HVPNL also holds ownership interest in the generation project i.e.

BBMB. HVPNL’s share of Power Generation from BBMB hydro projects i.e

Bhakra, Dehar and Pongs has been assigned to the UHBVNL & in the ratio

of 1:1 vide Govt. of Haryana Notification dated 11.4.2008. Being interstate

generation projects, the power to fix generation tariff for these projects are



not vested with the Commission and same is regulated as per the Power

Supply Agreement entered into between HVPNL and the two Discoms.

(iv) Compliance of directive for alteration / modification in the

Transmission license

Haryana Vidyut Prasaran Nigam Limited is the holder of the “The Haryana

Transmission and Bulk Supply License [License No. 1 of 1999] granted to it by

the Commission under section 15 of the Haryana Electricity Reform Act, 1997.

However, the Government of Haryana vide its notification no. 116/2005/1/

Power dated 9th June, 2005, transferred the rights relating to procurement &

bulk supply of electricity or trading of electricity from HVPNL to HPGCL and

subsequently to distribution licensees. Since the existing license of HVPNL is

both for transmission as well as bulk supply business, it needs some

alterations or modifications in view of transfer of bulk supply business from

HVPNL to HPGCL and subsequently to HPPC. In compliance to the

provisions of regulations 22.2 of Form-1 in HERC (Conditions for

Transmission License) Regulations, 2008 notified by the Commission on 31st

October, 2008, HVPNL had submitted for the approval of the Commission the

modifications required in its existing license. The Commission vide order

dated 11.01.2013, in line with the Regulation No. 09/2004 namely “Haryana

Electricity Regulatory Commission (Transmission and Distribution Licensing)

Regulation, 2004 and Section 18 of the Electricity Act, 2003 granted the

amended Transmission License to HVPNL for carrying on the business of

transmission of electrical energy in the area of supply within the State of

Haryana as per the terms and conditions mentioned in the amended License

i.e. License No. 1 of 1999, 1st Amendment dated 11.01.2013.

(v) As per Section 86 (a) of Electricity Act, 2003 the power to determine

tariff for generation, transmission, supply & wheeling of Electricity, wholesale,

bulk or retail, as the case may be, are vested with the Commission. The

present petition filed by Haryana Vidyut Prasaran Nigam Ltd. (HVPNL) is for



determination of ARR for Transmission business & SLDC and for fixation of

transmission tariff & SLDC charges by the Commission in exercise of powers

vested in it under section 62 read with section 64 (3) (a) and section 64 (6)

of the Electricity Act, 2003, for the FY 2013-14.

1.2 HVPNL’s ARR Petition for FY 2013-14:

The Commission vide memo no. 3760-63/HERC/Tariff/ARR 2013-14 dated

17.09.2012 directed HVPNL to file their ARR and tariff petition in accordance

with the Tariff Regulations notified by the Commission including the principles

/ parameters enunciated for FY 2013-14 for transmission and SLDC business

in the final draft MYT Regulations. However, HVPNL did not take into

consideration the MYT Regulations in their present petition filed vide memo

no. Ch-126/SE/RAU/F-108 dated 29.11.2012.

HVPNL has filed the present petition as per provisions of regulation 7 of the

HERC (Terms and Conditions for Determination of Transmission Tariff)

Regulations, 2008, which has been repealed and replaced by the Haryana

Electricity Regulatory Commission (Terms and Conditions for Determination

of Tariff for Generation, Transmission, Wheeling and Distribution & Retail

Supply under Multi Year Tariff Framework) Regulations, 2012, notified in the

Haryana Government Gazette (extraordinary) on 5th December, 2012

(hereinafter referred to as HERC Regulation, 2012.

Haryana Vidyut Prasaran Nigam Ltd. (hereinafter referred to as HVPNL or

the Petitioner), had filed the present Petition for approval of Aggregate

Revenue Requirement (ARR) and tariff for transmission and SLDC charges

for the financial year 2013-14 vide Memo No.Ch- 126 / SE / RAU / F-108

dated 29th November, 2012 under Sections 32 (3), 62 and 64 of the

Electricity Act, 2003.



1.3 Public Proceedings

In accordance with the provisions of section 64 (2) of the Act, HVPNL

published its petition in the abridged form in order to ensure public

participation. The Public Notice was issued by the HVPNL in Dainik Tribune

(Hindi) dated 07.12.2012 & The Tribune (English) dated 08.12.2012 inviting

objections/ suggestions/ comments from the stakeholders and general

public. Subsequently the Commission issued public notice on 19.12.2012 in

The Times of India (English) and on 20.12.2012 in Dainik Bhaskar (Hindi)

inviting objections and suggestions on the ARR petition of HVPNL for FY

2013-14 from the public and other stakeholders. The last date for

submission of objections /suggestions was fixed as 07.01.2013.

In response to the public notices issued by the petitioner and subsequently

by the Commission the Distribution Licensee UHBVNL had filed objections /

comments vide Memo No. Ch-99/GM/RA/ N/F-25/Vol – 45 dated 7.01.2013.

UHBVNL had objected to ROE of Rs. 2591.97 millions (transmission

business) and Rs. 7.84 millions (SLDC) claimed by HVPNL. They have

contended that in line with the previous order of the Commission no ROE

should be allowed. However, in case ROE is allowed to the Transmission

Licensee then the Discoms should also be allowed ROE.

On the debt redemption obligation claims of Rs. 481.93 millions, UHBVNL

had submitted that this claim was disallowed by the Commission in the

previous order which was also upheld by Hon’ble APTEL in Appeal No. 58

and 59 of 2007. Hence the same should also be disallowed in FY 2013-14.

Further, UHBVNL had objected to two months of receivables proposed by

HVPNL for estimating working capital requirement and interest thereto.

They had submitted that HVPNL bills the Discoms on a monthly basis and

any delay on payment of the bills are subjected to penal interest. Hence

claiming interest cost on two months of outstanding amount is not justified

and the same should be disallowed by this Commission.



UHBVNL had also objected to HVPNL’s proposal of reactive energy

charges @ 11.05 Paisa / kVArh from 1.04.2013. They had submitted that

the reactive energy charges should be retained at the existing level till such

time adequate infrastructure is put in place by HVPNL.

The Commission proceeded to hold public hearing on the ARR petition of

HVPNL for FY 2013-14 on 29.01.2013 as per the schedule of hearing

notified for the purpose.

The public hearing was held on 29.01.2013 in the conference hall of the

Commission. The Managing Director of HVPNL made a presentation on

HVPNL’s ARR during the hearing. The Managing Director and other officers

of HVPNL responded to the queries of the Commission.

1.4 Salient features of the ARR Petition of HVPNL:

1.4.1 HVPNL proposal for ARR of Transmission business for FY 2013-14:

HVPNL, in its petition, has provided the details of various expenses for

transmission business for FY 2013-14 including salary & wages, repair and

maintenance (R&M) expenses, administrative and general (A&G) expenses,

depreciation, interest cost on capital expenditure related borrowings &

working capital, fringe benefit tax, Income tax & special appropriations etc.

In addition to the above mentioned expenses Return on Equity (ROE) has

been claimed by the Petitioner @14% & MAT @ 20% including surcharge

and education cess. Additionally HVPNL has claimed Unitary Charges

payable to the Concessionaire executed through Public Private Partnership

mode i.e. Jhajjar KT Transco Private Ltd. The details are presented in the

Table 1.1:



Table 1.1- HVPNL proposal for ARR of Transmission Business for 2013-14 (Rs. In millions) Sr. No.

Description HERC order FY 2011-12

Audited FY 2011-12

HERC order FY 2012-13

Projected FY 2012-13

Projected FY 2013-14

1 Employees Cost 1824.19 2336.79 2798.74 3311.50 3759.77 2 R&M Expenditure 204.10 110.72 208.42 191.58 587.69 3 A&G Expenses 94.77 112.32 108.25 117.93 123.81 4 Interest on Pension Bonds 450.64 673.00 342.61 673 673 5 Interest for Capital Expenditure 1033.47 2308.07 1234.36 2524.34 2786.57 6 Debenture interest (PF Bonds) 129.85 152.85 110.57 149.13 164.05 7 Interest for Working Capital 90.63 633.77 208.80 306.29 385.60 8 Depreciation 1642.87 1574.34 1627.10 1563.78 1821.02 9 Advance against Depreciation - 773.10 516.81 10 PPP project 0 594.0 600 11 Other Expenses 1276.67 868.59 0 0 12 Interest Capitalized 799.73 892.50 1046.15 13 Total Expenditure 6747.19 7970.73 6638.86 9312.15 10372.17 14 Special Appropriations: 15 Tax on income & Profit (on ROE) 305.61 0 -30.22 460.94 518.58

16 Debt Redemption Obligation ( for redemption of PF Bonds) 0 481.93 481.93

17 Interest of past due payables (FBT for FY 2005-06) 5.62 0 6.20 6.20

18 Total Special Appropriation 311.23 0 -30.22 949.07 1006.71 19 Total Expenditure (including special appropriations) 7058.42 7970.73 6608.64 10261.22 11378.87 20 Return on equity 1870.03 1923.43 0.00 2303.90 2591.97 21 Minus Non-tariff expenditure/ (income) 241.27 299.95 181.64 134.50 48.51 22 Aggregate Revenue Requirement 8687.18 9594.21 6427.00 12430.62 13922.33



1.4.2 Revenue Gap:

HVPNL has estimated total revenue at the existing tariff and the revenue gap

for FY 2013-14 as per details provided in Table 1.2.

Table 1.2- Revenue gap for FY 2013-14 (Rs. In millions)

Consumers Existing monthly tariff for FY 2012-13

Total revenue from existing tariff for

the year UHBVNL 266.22 3194.64 DHBVNL 259.28 3111.36 Other (TPTCL) 121.0 Unitary Charges 546.22 Arrears allowed by HERC for FY 2010-11 as per order dated 2.11.2012 to be accounted for in FY 2013-14 for seven months

387.26

Total Revenue at existing tariff 7160.48 Total net ARR for FY 2013-14 #13922.33 Difference (Revenue Gap FY 2013-14)

6561.85

# Subject to the outcome of appeal pending in the APTEL for FY 2012-13.

1.4.3 Proposed transmission tariff:

HVPNL has proposed to meet the projected revenue gap for FY 2013-14

through increase in the transmission tariff. The proposed transmission tariff

for FY 2013-14 is presented in the Table 1.3.

Table 1.3- Proposed Transmission Tariff for FY 2013-14 Transmission

Tariff Fixed Charges ( Rs. in millions)

Transformation Capacity for FY 2013-

14 (MVA)

Per Annum Per Month

UHBVNL 10284.20 6777.23 564.77 DHBVNL 9542.40 6288.39 524.03 Total 19826.60 13065.62 1088.80



HVPNL has proposed a single part transmission tariff based on the

respective share of UHBVNL, DHBVNL and TPTCL in the total

transformation capacity projected for FY 2013-14. The recovery of

transmission charges has been proposed to be made on a monthly basis

from UHBVNL and DHBVNL. The details are presented in the Table 1.4:-

Table 1.4- Transmission charges for FY 2013-14 (Rs Millions) Particulars UHBVNL DHBVNL Total

Transformation capacity (in MVA)) 10284.20 9542.40 19826.60 Ratio of average transformation capacity 51.87% 48.13% 100% Annual transmission charges recoverable

7088.357 6577.263 13665.621

Monthly transmission charges recoverable from Discoms

590.69 548.69 1138.79

Monthly transmission charges recoverable from TPTCL

21.393

Energy sales (MU) 32562.20 Transmission Tariff for Short term open access Customers (Rs. / kWh).

0.44

1.4.4 SLDC ARR & Charges

The Aggregate Revenue Requirement for SLDC business as proposed by

HVPNL for FY 2013-14 is presented in the Table 1.5.

Table 1.5- ARR for SLDC Business for FY 2013-14 as projected by HVPNL

(Rs. millions) Sr. No

Particulars FY 2011-12

(Actual)

Projected for 2012-

13

Projected for 2013-

14 1 Employee Cost 25.268 28.259 30.996 2 Administration & General

Charges 6.713 7.049 7.401

3 Repairs and Maintenance Expenses

14.897 15.642 16.424

4 Depreciation 24.616 14.990 14.990 5 Interest and finance charges 15.376 13.134 12.206 6 Interest on Working Capital 0 0 0 7 Other Expenses - - 0.001 8 Income tax - - 1.569 9 Prior Period Adjustments(+ / - ) -0.074 - -



10 Return on equity - 7.840 7.840 11 Total Revenue Requirement 86.796 86.913 91.426 12 Less other Income (fee etc.,) -0.979 - 1.028 - 1.080 13 Net ARR 85.817 85.885 90.346

The Petitioner has submitted that the Government of Haryana vide its

notification dated 11th April, 2008 while transferring the rights relating to

procurement of electricity from HPGCL to the Discoms i.e. UHBVNL &

DHBVNL apportioned the MW entitlement in the ratio of 50:50. Accordingly in

schedule B of the said notification the share of Haryana 4368.01 MW has

been apportioned between the Discoms as 2184.055 MW each. Accordingly

HVPNL has proposed that the present Long Term Open Access consumers

shall be charged SLDC tariff in a similar proportion i.e. 50:50. Further, the

Petitioner has proposed that M/s TPTCL and any other Long Term Open

Access consumers shall be charged on the basis of MW contracted capacity

and maximum peak load met up to September, 2012.

The SLDC charges have accordingly been proposed as per Table 1.6.

Table 1.6- SLDC charges for FY 2013-14

(Rs. millions) Total Annual Charges for SLDC 90.346

Share of TPTCL 124 MW 1.666 Share of UHBVNL 44.34 Share of DHBVNL 44.34

Monthly Charges UHBVNL 3.695

DHBVNL 3.695 TPTCL 0.139

Total Recovery per Month 7.529

1.5 State Advisory Committee

The Commission, in order to have the benefit of the views of State Advisory

Committee (SAC) members, convened a meeting of the State Advisory

Committee, constituted under Section 87 of the Electricity Act, 2003, on 25th



March, 2013. The SAC members were provided executive summary of the

ARR petition of HVPNL for Transmission & SLDC business for FY 2013-14.

The SAC members mostly expressed concern about the increase in intra state

transmission losses despite substantial capital expenditure having been

incurred by HVPNL in the successive years. The Commission has taken note

of the views expressed by the SAC members and considered the same while

taking a final view on the transmission tariff and SLDC charges for FY 2013-

14.


16 Transmission Tariff & SLDC Charges

2. ANALYSIS OF THE ARR FILING AND COMMISSION’S ORDER

The Commission has considered HVPNL’s petition comprising of the ARR &

Tariff application dated 29.11.2013, additional information provided from time

to time, oral submissions of HVPNL and subsequent discussions during the

public hearing held on 29.01.2013. The Commission has also taken into

account the objections dated 7.01.2013 filed by UHBVNL on the issue of

ROE, Debt redemption obligation, working capital and reactive energy charge

as well as the suggestions of SAC members.

The ARR for the Transmission business & SLDC dealt with by the

Commission in this chapter cover the fixed expenses including capital

expenditure and the operating expenses. The various elements of

transmission and SLDC expenses proposed by HVPNL including capital

base, reasonable return, non-tariff income and incidence of taxation are

analyzed and the Commission’s order on each item is presented.

2.1 Operation and Maintenance (O&M) Expenditure

HVPNL has estimated its O&M related expenditure for FY 2013-14 at Rs.

2559.83 million in its ARR application submitted for approval of the

Commission. Employees’ cost, administration & general expenses and repair

& maintenance expenses, which together comprise the O & M expenditure,

are analyzed under this sub-head. The details of O&M expenses as

proposed by HVPNL for FY 2013-14 vis-à-vis those approved by the

Commission for FY 2012-13 and the actual expenditure in FY 2011-12 as per

their audited accounts under each of these three accounting heads is

presented in Table 2.1.



Table 2.1 - O&M expenses (Rs. millions)

Particulars HVPNL audited FY (2011-12)

HERC Order

FY (2012-13)

HVPNL Proposal

(FY 2013-14) Wages, salaries & related costs 2336.78 2798.74 3759.77 Repair & Maintenance Expenses 110.72 193.49 587.69 Administration & General Expenses 112.32 108.25 123.81

Total 2559.82 3100.48 4471.27

The Commission has considered the latest available audited accounts i.e. FY

2011-12 of HVPNL with appropriate adjustments / changes for calculating

the allowable expenses as part of the ARR for FY 2013-14.

The Commission has tried to comparatively evaluate the transmission

charges of some states. A summary of the same is presented in the table

2.2.

Table 2.2 - Cost Break – up ( Rs. / KWh)

State Utility Average cost Employee O&M Interest Depreciation

Delhi Delhi Transco 0.12 0.03 0.01 0.02 0.02

Haryana HVPNL 0.28 0.11 0.03 0.07 0.04

Uttarakhand Ut Transco 0.11 0.04 0.01 0.03 0.02

Andhra Pradesh

AP Transco 0.12 0.03 0.03 0.02 0.05

UP UPTCL 0.14 0.04 0.01 0.3 0.05 Gujarat GETCO 0.18 0.05 0.02 0.05 0.05 Maharashtra MSPTCL 0.15 0.05 0.03 0.03 0.03

Source: 9th report on performance of State Power utilities by Power Finance

Corporation from 2008-09 to 2010-11.

The various expenses that form part of O&M expenses are discussed in detail

in the subsequent paragraphs.



2.1.1 Employees’ cost

The employees’ cost includes cost incurred for the working employees as

well as the retirees. The cost of working employees comprises of salary,

dearness allowance and other allowances such as HRA, CEA, LTC, medical

reimbursement, etc. In the case of retired employees and those who would

be retiring during the financial year under consideration, HVPNL has to

discharge its liability in respect of payment of pension, gratuity, leave

encashment & other benefits / payments as admissible to the employees

under the applicable service rules.

A perusal of the comparative cost break – up of transmission business as

presented in the table 2.2 reveals that the employee cost in Haryana is

higher as compared to some other Transmission Utilities in the country. The

Commission observes that some aberrations in the costs are understandable

due to the differences in the voltage level to which the transmission system

extends as compared to that of HVPNL whose transmission system

comprises of 66 KV and above. However, significant variations are a matter

of concern. HVPNL was advised to take a close look at its manpower

planning / budgeting with a view to rationalize the cost, outsource wherever

possible and make optimum use of its available manpower resources without

resorting to new recruitments thereby increasing the number of employees

and corresponding costs in the ARR and tariff order for FY 2012-13.

The Commission has examined the data submitted by HVPNL in this regard

and observes that HVPNL has proposed a recruitment of 1148 employees

raising the effective strength of employees to 7796 from the current level of

6648. The Commission is not in favour of increasing the number of

employees indiscriminately in view of the already high employee cost of

HVPNL in comparison to the other Transmission utilities in the country. The

Commission expects HVPNL to be a trendsetter and a leader in all

parameters of the transmission services in the country. Thus Commission is

disallowing any additional cost due to recruitments during FY 2012—13 and



FY 2013-14 and has calculated the employee cost accordingly. The

Commission has taken note of the statement of the Managing Director, of

HVPNL in the public hearing that they have not made any new recruitment in

FY 2012-13. HVPNL is directed to not to make any new recruitments including any recruitment against sanctioned posts unless specifically approved by the Commission. The licensee is further directed to outsource as many services as could be done without compromising on the quality of service. However, senior technical services may not be outsourced. In ultimate analysis the objective ought to be improving

employee output ratio rather than employment generation.

2.1.2 Terminal benefits

The Commission had directed HVPNL to provide comprehensive data in

respect of terminal liabilities in view of the extraordinary increase in these

liabilities over the past few years. Examination of the data in this regard

reveals that the HVPNL’s pension trust was initially created for payment of

pension, leave encashment and gratuity to the retiring employees. The initial

value of fund of the trust was also equal to the assessed liability of the

pension, leave encashment, and gratuity of the serving employees and

retirees of the Transmission and Distribution segment of the erstwhile HSEB.

The valuation was done by a registered actuary. The valuation of the liability

as on 14.08.1998 (the date of implementation of the transfer scheme) was

taken as the initial value of liability and the same was funded by way of

bonds issued by HVPNL to the fund created for this purpose. The proceeds

from the bonds and the additional annual contribution by the three utilities,

namely HVPNL, UHBVNL and DHBVNL was to be sufficient to discharge the

liability of pension, leave encashment and gratuity payments to the

employees, pensioners and family pensioners. All these amounts form part of

the tariff charged from the electricity consumers.



However, the Commission observes that HVPNL has sought to enhance the

scope of the fund to include its liabilities on account of LTC and medical for

serving employees and pensioners from FY 2008-09 onwards without

seeking prior approval of the Commission . The licensee has continued to

book the afore mentioned liabilities on accrual basis and also on actual basis

leading to double charge thereby inflating the pension fund liabilities to be

passed on to the electricity consumers from FY 2008-09 to FY 2011-12.

The Commission further observes that inadequate returns earned by the

pension fund have also resulted in the shortfall of an amount of Rs. 1709.8

million in the fund corpus. Therefore out of total unfunded liabilities as on

31.03.2012 ( as per the audited accounts) amounting to Rs. 8620 million, Rs.

1709.8 million is on account of accumulated short return on pension fund

assets, Rs. 3022.5 million is on account of LTC and medical liabilities, and

the balance gap remains unexplained by HVPNL.

In view of the above discussions the Commission directs HVPNL to continue to booking the liability of LTC and medical on actual payment basis only as per past practice. The liabilities to be discharged by the HVPNL employee pension trust are to be limited to pension, gratuity and leave encashment only as was the objective at the time of formation of the trust. All actual cost on account of LTC and medical

already form part of the employee cost as these are included in other

allowances and have been allowed in all previous years ARR orders of this

Commission and for FY 2013-14 also the Commission has considered these

as part of other allowances.

For the purpose of calculating pension cost in the ARR for FY 2013-14, the

Commission has considered the estimation on the basis of ‘current service

cost’ amounting to Rs. 349.12 million as per audited accounts for FY 2011-

12. The Commission has further allowed Rs. 462.01 million as interest cost

on the unfunded portion of Pension liability outstanding as on 31.3.2012. The



value of liabilities as on 31.3.2012 is shown as Rs. 27557.631 million against

which the trust has assets amounting to Rs. 18936.92 million thereby leaving

a shortfall of Rs. 8620 million. Out of the total liability, the following amounts

are excluded as these form part of LTC and medical liabilities allowed on

actual payment basis as explained above:

Table 2.3 - Pension liabilities not to be funded from the HVPNL pension trust (Rs. millions)

S.No Particulars Rs. million 1 Medical for serving employees 354.673 2 Post employment LTC 89.503 3 Financial assisstance 390.069 4 Pensioners medical 1194.449 5 Pensioners LTC 266.194 6 Family pensioners medical 727.963 Total 3022.851

After excluding the above liabilities, the balance liabilities of the trust amount

to Rs. 24534.78 million against which the trust has assets amounting to Rs.

18936.92 million. To the extent the trust has assets; the interest cost shall be

met out of the earnings of these assets. For the balance difference in the

liabilities and assets HVPNL may require some additional support, the

commission allows interest cost on the same amounting to Rs. 462.01 million

@ 8.25% being the discounting rate. This will ensure that the mismatch

between the assets and the liabilities does not create a spiraling shortfall in

the discharge of the pension liabilities. The Commission directs HVPNL to examine the reasons behind the shortfall between the asset and liability of the trust and submit a report to the Commission within three months from the date of this order. For new employees, the Commission has retained the contribution to NPS as

per the audited accounts of HVPNL for FY 2011-12 amounting to Rs. 32

million based on the fact that the no new recruitments have been considered



in FY 2013-14. In view of the above discussions, the Commission approves

the employee cost at Rs. 2737.00 million for the transmission business and

Rs. 31 million for SLDC business as per details given below in Table 2.4.

Table 2.4 - Employees’ cost for FY 2013-14 (Rs. millions)

Particulars HVPNL

Proposal HERC

approval Basic+DA 1976.00 1689.06 Other allowances 346.19 322.86 Contract employees 158.28 158.86 Contribution towards pension trust fund 1543.36 811.13 Contribution to new pension scheme (NPS) 73.64 32.00 Total Employee Cost 4097.47 3013.33 Employee cost capitalised 306.40 245.33

Net Employee Cost Expensed 3791.07 2768.00

• For SLDC Business 31.00 31.00 • For Transmission

Business 3760.07 2737.00 The Commission has taken note of the suggestion of HVPNL in the public

hearing that the Actuary may be appointed and process of valuation may be

monitored by this Commission.

Further the Commission has taken note of the statement of MD, HVPNL that they have not diverted any subscription received from employees towards provident fund and new pension scheme to its business.

2.1.3 Repair and Maintenance Expenses (R&M)

HVPNL has proposed to incur R&M expenses of Rs. 604.11 million @ 1.07%

of average GFA for FY 2013-14. The Commission allows R&M expenses as

per the norms provided in the MYT regulations, 2012 i.e. 0.50% of average

GFA, for calculating R&M expenses. Accordingly R&M expenses works out

to Rs. 276.92 millions. Thus the Commission approves R&M expenses of



Rs. 276.92 million i.e. Rs. 16.42 million for R&M of SLDC and Rs. 260.50 million for the Transmission system for FY 2013-14.

The licensee has proposed to undertake extensive maintenance works on

the transmission lines during the ensuing year for which it has sought

additional R&M expenses. The Commission had observed in its order for FY

2012-13 that due to major differences in the execution of capital works, the

amount of R&M allowed to the licensee on normative basis has exceeded the

actual expenditure in the previous years. The difference in the amount along

with interest thereon is now available with the licensee. The Commission

allows the licensee to utilize the same for the proposed extensive R&M to be

undertaken during FY 2013-14. The difference, if any, shall be trued up

subject to approval of the Commission to the maintenance work undertaken

by HVPNL. The calculation of the funds available for additional R&M works is

as given in table 2.5

Table 2.5 – Excess R&M expenses allowed in earlier years (Rs. millions)

HERC Order HVPN

Audited Difference Interest cost Total

FY 2009-10 137.07 130.63 6.44 2.42 8.86

FY 2010-11 182.16 120.05 62.11 15.53 77.64

FY 2011-12 220.65 125.62 95.03 11.88 106.91

Total 163.58 29.82 193.40

2.1.4 Administrative and General Expense (A&G)

HVPNL had proposed Rs.123.81 million as A&G expenses for FY 2013-14.

The Commission has calculated A&G expenses as per norms specified in the

MYT regulations, 2012 and the amount comes to Rs. 121.49 million. The Commission, accordingly, approves A&G expenses (net of capitalization) at Rs. 121.49 million and Rs. 7.26 million for transmission and SLDC business respectively.



2.2 Interest cost

2.2.1 Capex & Interest on borrowings thereto

HVPNL had proposed to recover interest on borrowing for capital expenditure

at Rs. 3789.34 million inclusive of interest on PF bonds, pension bonds,

SLDC borrowings, generation borrowings and market committee loan.

Keeping in view the capital expenditure approved by the Commission, as

discussed in Para 2.7, the borrowings for capital expenditure are estimated at

Rs. 4609.12 million for FY 2012-13 and Rs 5568.19 million for FY 2013-14

respectively and interest is calculated accordingly.

The interest on borrowings related to generation business of BBMB (Rs.

87.12 million) and SLDC business (Rs. 10.70 million) are excluded from

interest cost for transmission business. The repayment of loans for

calculating interest in the ARR has been considered by the Commission as

proposed by the petitioner. The Commission has already allowed funds for

repayment of market committee loans in FY 2008-09 hence interest cost

amounting to Rs. 74.19 million on these borrowings is excluded. In case the

petitioner is able to get the interest accrued on this loan waived off, as

claimed by them, the same will be adjusted in the subsequent ARR. The licensee is directed to keep the Commission informed of the latest status on this issue.

The total interest cost for transmission business is further reduced by the

amount of interest capitalized i.e. Rs. 1149.60 million as against Rs.1046.15

million projected by the petitioner. On the new capital works to be started

during FY 2013-14 interest is capitalized for a period of six months only as

the loans are assumed to be received evenly during the entire year. In case

the licensee is able to provide a detailed month wise capitalization schedule,

the Commission will consider the calculation of IDC on prorata basis as

proposed by the petitioner.



In view of the above, the Commission allows Rs. 1568.26 million towards interest on borrowings, net of capitalization, for capital works for FY 2013-14 as per details provided in Table 2.7. Interest cost on borrowings for Capital works for SLDC has been calculated

on the amount of Rs. 10.70 million at interest rate as proposed by HVPNL.

The details of the same are provided in Table 2.8.

In view of the difference in approach on the issue of Capitalization, HVPNL is

directed to submit the details of the actual capitalization in FY 2011-12 so as

to enable the Commission to consider the same at the truing up stage.

2.2.2 Interest on working capital borrowings

The borrowings for working capital are being allowed in line with the MYT

regulations, 2012. The amount estimated by the Commission on this basis

works out to Rs. 1250 million. Interest @ 12% (rate as proposed by HVPNL)

on the allowed working capital borrowings amounts to Rs. 150 million.

The interest on working capital for the SLDC business is allowed at Rs. 1.51

million as proposed by HVPNL.

2.2.3 Other interest costs

HVPNL, apart from interest on borrowings for working capital and capital

expenditure, has also claimed interest on Pension Bonds and PF bonds in

the ARR of transmission business. The liabilities on account of Pension

bonds and Provident fund bonds in the books of HVPNL are of a specific

nature and these are not related to its transmission business. It arose as a

consequence of the unbundling of the power sector in Haryana. It needs to

be noted that the Provident fund liability in the books of the licensee arose

because the erstwhile Electricity Board (HSEB) utilized the Provident fund

contributions of employees as additional working capital in total contravention



of Provident fund rules. The consumers have, in fact, already paid for this

amount by way of salary of the employees in the past years.

Similarly the liability for pension bonds arose as a consequence of

unbundling of power sector in Haryana. At the time of HSEB, the pension

liability was expected to be met out of future earnings. However, on

corporatization, the liability was assessed at Rs.6730 million and brought into

books of HVPNL. The assets of HVPNL were revalued upwards and also its

investments in distribution companies and generation companies were

brought into books to balance these liabilities. The petitioner has claimed that

it has no means/resources to redeem these liabilities. Incase these liabilities

are not redeemed at the earliest; the interest cost on these pension bonds

would continue to distort the transmission tariff indefinitely. Also the

consumers of the state would continue to be unnecessarily burdened by the

cost which has no relation to the service being provided to them by the power

utilities. The revenue earned from sale of assets including land must

therefore be utilized to meet the cost of these liabilities.

Despite the fact that the above mentioned liabilities, strictly speaking, do not

arise as a consequence of carrying out of transmission business by the

petitioner; the Commission allows Interest on the bonds issued by HVPNL

against the pension and provident fund liabilities in compliance of the orders

of the Hon’ble Appellate Tribunal for Electricity in case no 27 of 2007. The

interest cost on these bonds therefore, burdens the users of transmission

services over and above the normal transmission costs. The electricity

consumers of Haryana have been bearing this burden for more than ten

years now. Hence, the Commission is of the opinion that such liabilities are to

be taken care of at the earliest in order to normalize the transmission cost

borne by the consumers of Haryana. It is observed from the ARR petition

that interest comprises of more than 30% of the transmission cost in Haryana

which by any standard is excessive.



In order to achieve the objective of normalizing the transmission cost by

minimizing the avoidable burden on consumers of Haryana, the Commission

in its order dated 16.4.2010 on the ARR of transmission and SLDC business

for FY 2010-11 had adjusted profit of Rs. 605.97 million on sale of land that

had accrued to HVPNL during FY 2008-09 and revenue generated as a

consequence of the order of the Hon’ble Appellate Tribunal for Electricity in

Case No. 27 of 2007, while calculating interest on pension fund bonds to be

recovered in the ARR. HVPNL in the hearing objected to the adjustment of

profit generated from sale of land and revenue generated as a consequence

of the order of the Hon’ble Appellate Tribunal for Electricity in case no. 27 of

2007 for retiring of pension bonds and submitted that such revenues may be

allowed to be used for payment of other loans by HVPNL.

The Commission observes from the submissions of the petitioner that they

are in agreement with the approach adopted by the Commission i.e. the

revenue generated through sources other than transmission tariff and

charges can be utilized for retirement of debt. The only point of disagreement

is on the nature of loan that is to be retired. On this issue, the Commission

would like to point out that the payment of all other liabilities is covered from

one source or the other e.g. liabilities on account of borrowings for capital

works are met from depreciation, liabilities on account of borrowings for

working capital are covered either through ARR or through penalty levied on

distribution licensees for late payment of transmission tariff and charges.

Consequently the liabilities on account of pension bonds and PF bonds alone

remain to be taken care of from revenue from generation assets, distribution

assets, return on equity and revenues from any other sources generated by

HVPNL. Interest on these bonds is allowed to be recovered in the ARR by

way of transmission tariff in addition to interest on borrowings for capital

works and for working capital which, in opinion of the Commission, is in total

contravention of cost causation principle of ARR and accounting principles as

no benefit is accruing to the consumers of Haryana for the cost incurred by

the Pension and PF bonds. The Commission is of the view that the additional



revenue accruing to the licensee from the above mentioned sources ought to

be utilized to reduce the interest cost burden on the consumers, who had not,

in any manner whatsoever, caused the expenditure namely pension bonds

and are not going to derive any benefit from such expenditure. In case the

liabilities still remains unmet, the petitioner, being a Government company,

should approach the State government for assistance. In redemption of these

liabilities the Commission cannot allow funds for redemption of these bonds

out of the ARR of the transmission business in view of the judgment of the

Hon’ble Appellate Tribunal for Electricity in Appeal No. 58 and 59 of 2007.

In light of the above discussions, the Commission is of the considered view

that it will be appropriate to adjust all possible accruals towards reduction of

interest cost of these bonds so as to reduce the burden on the electricity

consumers. Thus, revenue from short term open access consumers and

interest on refund of income tax are adjusted against pension bonds so that

the interest burden is reduced to that extent. The revenue from short term

open access arises only as a consequence of the transmission business.

Also, the expenditure base as per the audited accounts used for estimating

the allowable expenses of the transmission business for ensuing year and

consequently the transmission tariff include expenses incurred by HVPNL on

account of monitoring and control with respect to short term open access related transactions also.

Consequently, the interest on pension bonds is allowed as Rs. 301.26 million, as against Rs. 673 million proposed by HVPNL, calculated on average balance of pension bonds during FY 2013-14 @ 10% p.a. The

calculation of balance of pension bonds is as presented in table 2.6.



Table 2.6 – Other Interest Costs Pension bonds Rs. million

Estimated Balance as on 31.3.2013 3224.00 Adjustment of profit on sale of assets 2.86 Adjustment of 25% of revenue from short term open access consumers FY 2011-12 320.00

Interest on refund of income tax 99.84 Balance as on 31.3.2014 2801.29 Interest cost 301.26

Regarding the interest on PF (Provident fund) bonds, the same has been

worked out by the Commission @ 8% p.a. as proposed by HVPNL. The

licensee is expected to repay PF bonds amounting to Rs. 481.93 million out

of its internal accruals as per the principle established in the HERC order on

transmission tariff for FY 2011-12 and onwards. The Commission, accordingly, allows the interest on PF Bonds at Rs. 100.42 million. The

computations of interest expenses are presented in Table 2.7 & 2.8.

Table 2.7 - Interest Cost for Transmission Business for FY 2013-14 (Rs. millions)

Particulars HVPNL Proposal

HERC approval

Interest on Loans for Capital Expenditure Gross Interest Cost for Transmission Works

2717.86

Less: Interest Cost Capitalized

1149.60 Interest Cost net of Capitalization (1) 1983.46 1568.28 Interest on Loans for Working Capital (2) 357.90 150.00 Interest on Pension bonds (3) 673.00 301.26 Interest on PF Bonds (4) 129.86 100.42 Total 3144.22 2119.96



Table 2.8 - Interest Cost for SLDC for FY 2013-14 (Rs. millions)

Particulars HVPNL (Proposal)

HERC (approval)

Interest on Loans for Capital Expenditure 10.70 10.70 Interest on Loans for Working Capital 1.51 1.51 Total 12.21 12.21

2.3 Depreciation

HVPNL has estimated depreciation amount as per HERC Tariff regulations

2008 for FY 2013-14 at Rs. 1871.08 million at an average rate of

depreciation of 3.55%. Additionally they have also sought advance against

depreciation amounting to Rs. 516.81 million. The total depreciation

proposed by HVPNL works out to Rs. 2337.83 million.

The Commission has notified the MYT regulations,2012 on 5.12.2012 and

had directed the licensee to calculate depreciation accordingly. In the

absence of revised calculations, the Commission has assumed the total

depreciation to be Rs. 2387.89 million, the average rate of deprecation works

out to 4.61% which is lower than 4.91 % which was the depreciation rate for

FY 2010-11 calculated based on the CERC notification for 2009 that forms

the basis for the depreciation rates notified in the MYT regulations, 2012. For

working out depreciation, the Commission has increased the audited value of

gross fixed assets as on 31.3.2012 by the value of approved additions to

GFA for FY 2012-13 and has applied a depreciation rate of 4.61%, to arrive

at allowable depreciation of Rs. 2387.89 million for 2013-14. Out of this, the

depreciation on SLDC assets is Rs.14.99 million (as proposed by HVPNL)

and depreciation against assets funded by consumer contributions or grants

is Rs.7.74 million (as proposed by HVPNL). The balance depreciation after

adjusting Rs. 524.37 millions excess depreciation allowed in the previous

years is allowed as per table 2.9 as depreciation on transmission assets for

FY 2013-14.



The Commission observes that HVPNL has not been able to achieve the

projected additions to capital works in FY 2011-12. The projected

capitalization schedule forms the basis of a large number of expenses and

depreciation is one of them. A shortfall in achievement of desired

capitalization results in a double loss to the consumers. On one hand the

consumer is deprived of the services for which he has already paid for as

part of tariff in the relevant year and on the other hand the additional cost

already borne by him is not refunded. The Commission observes that there

is a shortfall of Rs. 7430.08 million in the approved GFA as on 31.3.2011

resulting in excess depreciation of Rs. 524.37 million being charged from the

consumers in FY 2011-12. The Commission, in accordance with its order

dated 30.3.2012, has now adjusted the excess depreciation allowed to

HVPNL in FY 2011-12 against the allowable depreciation for FY 2013-14.

Additionally interest amounting to Rs. 133.40 million on the excess

depreciation is also reduced from the ARR for FY 2013-14 as a punitive

measure for not achieving the approved capitalization schedule and for not

providing the proposed level of services to the electricity consumers of the

State.

In view of the perpetual failure of HVPNL in adhering to execution of capital

works and capitalization schedule, the depreciation allowed for FY 2013-14 shall be subject to adjustment in the future ARR’s in case the petitioner is unable to achieve the approved additions to the transmission system. The computation of depreciation for transmission assets is presented in the Table 2.9.



Table 2.9 -Depreciation for FY 2013-14 (Rs. millions)

Particulars HVPNL (Proposal)

HERC (approval)

Gross fixed assets at the beginning of the year 52698.88 51846.81 Depreciation Rate (%) 3.55% 4.61% Depreciation for FY 2013-14 1871.08 2387.89 Less depreciation against Capital reserve 7.74 7.74 Less Depreciation against SLDC assets 14.99 14.99 Less Depreciation against income earning assets 27.33 - Net Depreciation for FY 2013-14 for Transmission Business 1821.02 2356.16 Advance against depreciation 516.81 - Adjustment of excess depreciation allowed in previous years 524.37 Interest on above 133.40 Net amount allowed in the ARR for FY 2013-14 2337.83 1652.76

The depreciation for SLDC business of HVPNL is allowed as Rs. 14.99 million which is same as proposed by them.

2.4 Special appropriations

2.4.1 Fringe Benefit Tax (FBT)

The Commission in its Order dated 26.9.2007 on the review petition on the

ARR of transmission business for FY 2007-08, allowed HVPNL to recover

interest, on FBT on contribution to superannuation fund deposited with the

income tax authorities before the date of stay granted by the Hon’ble High

Court in this matter. This interest was allowable from the date of deposit of

amounts till the date of resolution of the case in the Hon’ble Supreme Court.

HVPNL in its present petition has stated that assessing authority of income

tax department has refunded an amount of Rs.33.19 million inclusive of

interest. As interest has already been allowed by the Commission in the

ARRs of the earlier years, the refund of interest now received has to be

reduced from the total amount leaving an outstanding balance of Rs. 62.45



million. Interest on same amounting to Rs. 5.62 million @ 9 % p.a being the rate of interest proposed by the licensee.

2.4.2 Income Tax

As per the MYT regulations 2012, notified by the Commission income tax

does not form part of expenditure in the ARR. Accordingly the Commission

has not considered any income tax in the ARR for FY 2013-14.

The Commission had allowed Rs. 372.72 million as income tax on ROE for

FY 2011-12. Based on the audited accounts, the ROE has been reduced for

FY 2011-12 and consequently the allowable income tax on revised ROE for

FY 2011-12 works out to Rs. 142 million only. Consequently the excess

income tax amounting to Rs. 230.72 million is now reduced from the ARR of

FY 2013-14.

2.4.3 Contribution to Contingency Reserve

The licensee has not proposed any additional contribution to the contingency

reserve for FY 2013-14. As far as the previous balance is concerned, the Commission directs that any drawl from the Contingency Reserve shall be made only with prior approval of the Commission.

2.4.4 True up of ROE for FY 2011-12

The Commission had allowed ROE @ 14% for FY 2011-12 amounting to Rs.

1870.03 million on an estimated equity of Rs. 12707.04 million as on

31.3.2011. The Commission had observed in its order dated 02.11.2012 that

it has been allowing return on equity to HVPNL even on that portion of equity

that has been used to fund assets which have not formed part of

transmission assets till date. It needs to be noted that tariff is payable by the

consumers/ beneficiaries for the transmission service provided to them by the

licensee for use of the transmission assets. Till the assets are commissioned



and put to use, no service can be said to have been provided by the licensee

to the consumers and hence no tariff can be recovered for such assets.

Additionally, it has been observed by the Commission that the licensee had

received equity from the state government amounting to Rs. 2725 million for

capital works in FY 2011-12 whereas it has utilized only Rs. 1098.48 million

for the purpose.

In view of the above facts, the Commission is of the view that the normative

return on equity ought to be worked out after excluding any equity that is

used for funding capital assets not yet put to use and also that portion of

equity that has not been used for funding capital expenditure. Therefore, the

Commission decides to exclude the unutilized equity amounting to Rs.

1626.52 million from the calculation of the ROE. It is observed that Rs.

6274.61 million of equity is tied up in CWIP and as explained above, Rs.

1626.52 million of equity has not been utilized in capital expenditure and

hence both these amounts need to be excluded for the purpose of truing up

of ROE. The resultant ROE @ 14% amounts to Rs. 712.45 million and the

excess ROE amounting to Rs. 1157.58 million (1870.03-712.45) is reduced

from the allowed ARR in FY 2013-14.

2.4.5 Debt redemption obligation

The recovery of debt redemption amount in the earlier ARRs was allowed by

the Commission in the absence of any other means for the licensee to be

able to redeem these debts being of a peculiar nature where assets created

out of these liabilities were not earning sufficient returns.

The above issue was raised by UHBVNL and DHBVNL in the objections filed

by them against the ARR and Tariff application of HVPNL for FY 2008-09.

The Discoms had submitted that as per second transfer scheme enacted by

the Govt. of Haryana “all obligation in respect of payment of pension and

other retirement benefits including provident fund, leave encashment,



commutation of pension, medical facilities, superannuation and gratuity to the

personnel who have retired from services of HPVNL and/or the board on or

prior to the effective date shall be discharged by HPVNL and neither

transferee shall have any obligation with respect to such retired personnel.

Corresponding assets were also available with HVPNL in the opening

balance sheet equal to the amount of this liability. Hence, HVPNL cannot be

allowed to recover the repayment of liabilities (debt redemption) as it would

amount to double recovery especially when all the liabilities have already

been matched by way of corresponding assets, out of which fixed assets cost

are being recovered in the shape of depreciation and the current assets are

being paid for by the Discoms”.

In its reply to the above issue HVPNL had submitted that “it has issued PF &

Pension Bonds against its liability. These bonds are due for redemption from

FY 2016 onward. It is correct that the total liabilities assigned to each

company were matched with the total assets allocated to it. HVPNL was

given assets in the shape of investment in UHBVNL& DHBVNL on which

HVPNL is not earning any income”.

The Commission while agreeing with the views of the Discoms that the

valuation of liability as on the date of the transfer scheme provided for an

adequate amount of assets to fund the same, had observed that “In the last

seven years the Commission has seen that there has been a substantial

increase in the terminal benefits on actuarial valuation which does not

support the valuation as on the date of transfer. It implies that the consumers

are being made to fund the increase in liability even though they have paid

for the liability as on the date of transfer scheme by way of depreciation and

interest and now return on equity and Advance Against Depreciation. At this

stage to ask them to pay for the redemption of the same liability would,

therefore, amount to double charge”.



The Commission observes that the licensee has to utilize revenues accruing

from all sources and assets towards redemption of outstanding PF and

pension bonds at the earliest and the same cannot be allowed to be

recovered through ARRs. The Commission is of the view that the redemption

of PF and pension liabilities from part of return on equity of transmission

business and SLDC business and also by utilizing whatever profit it has

earned from other businesses to gradually redeem these liabilities will be of

help in augmenting cash flow of the petitioner . The impact of these liabilities

will be primarily on the owner of Transmission utility i.e. the State

Government who is also the rightful owner of these liabilities in terms of

provisions of the unbundling scheme.

Upon hearing the review petition filed by HVPNL against Commission’s order

dated 16.4.2010, the Commission had directed HVPNL to provide any

judgments or rules or regulations that supported re-payment of debt

redemption liability through ARR. HVPNL was unable to satisfy the

Commission in this regard. In the ARR filing for FY 2013-14 also no such

supporting documents have been provided by HVPNL.

In view of the above the Commission is of the view that some other method

will have to be devised to redeem the pension and PF liabilities. It is

observed that the licensee is earning sufficient revenue through its

generation business, additional revenue from short-term open access

customers and through return on equity from the transmission business. It

has also earned substantial revenue from sale of certain generation assets

and transmission assets. Hence it is only the distribution business which is

financially stressed. Thus it is not appropriate for HVPNL to recover the debt

redemption amount from transmission tariff without adjusting its earnings

from all assets as discussed earlier.

The Commission therefore, disallows recovery of Rs.481.93 million proposed by the licensee. This is also in the nature of capital



repayment and does not conform to the Aggregate Revenue Requirement methodology of arriving at tariff that is currently in vogue in Haryana and elsewhere in the country. This view was upheld by the

Hon’ble Appellate Tribunal in its judgment dated 9.11.2010 in Appeal No. 58

and 59 of 2007. In the above mentioned appeal the Hon’ble Appellate

Tribunal in its judgment has said that “for want of funds if loan is raised and

such loan is to be discharged from out of earnings and loan amount cannot

be allowed as pass through tariff”.

The Commission further observes that as per the second transfer scheme.

“all obligation in respect of payment of pension and other retirement benefits

including provident fund, leave encashment, commutation of pension,

medical facilities, superannuation and gratuity to the personnel who have

retired from services of HPVNL and/or the board on or prior to the effective

date shall be discharged by HPVNL and neither transferee shall have any

obligation with respect to such retired personnel.” Therefore asking the

consumers to pay for these liabilities would tantamount to contravention of

the act to a certain extent. The Commission in its order dated 29.03.2012 had

directed the licensee to examine the reasons behind increase in the pension liability. For any increase in cost attributable to period prior to 14.8.1998 the petitioner may approach the State government for additional financial support under the relevant provision of the second transfer scheme along with the requisite funds or any other funding mechanism to redeem the pension and PF bonds in case the petitioner is unable to discharge these liabilities out of its income streams. The Commission however finds that there has been no effort by the licensee to comply with the directive. HVPNL, in its reply on the objection raised by UHBVNL & DHBVNL, vide

memo no. 130/131/SE/RAU/F-100 dated 10.02.2012 has stated that the

pension and PF assigned to HVPNL as per 2nd Transfer scheme notified by

Govt. of Haryana in the year 1999 was peculiar type of liability which can be



repaid only by recovering the same in the ARR as part of Transmission Tariff.

It is pertinent to mention here that at the time of transfer of assets & liability

as per 2nd Transfer scheme notified by Govt. of Haryana, HVPNL was given

an investment of Rs. 9842.60 million in Discoms i.e. UHBVNL & DHBVNL on

which the company is not earning any return. Even the C&AG of India in its

supplementary audit on the accounts of petitioner for the FY 2009-10 & 2010-

11 has made comments to write off the above investments because of

erosion of equity capital of these companies due to huge accumulated

losses. This has resulted in buildup of loans from commercial banks, the

interest of which is disallowed by the Commission by allowing the interest on

working capital loans on normative basis, thus leading to additional burden

on HVPNL

The Commission would like to be made aware of the relevant portion of the

2nd transfer scheme notified by the Govt. of Haryana in the year 1999

wherein it is provided that this liability can be repaid only by recovering the

same in the ARR as part of transmission tariff.

Also, the Commission would like to be informed of the buildup of loans

resulting from losses of the Distribution Licensee. The buildup must clearly

demonstrate the relationship between the losses paid for by HVPNL and the

loans from commercial banks. Unless both these supporting details are

provided by the licensee, the Commission is unable to take cognizance of the

statement made by HVPNL in this regard.

2.5 Unitary charge (PPP Transmission Project)

The petitioner has claimed Rs. 600 million as unitary charge to be paid by

them in view of the Transmission Service Agreement (TSA) for execution of

transmission project through Public Private Partnership (PPP) between

HVPNL and M/s Jhajjar KT Transco Private Limited. The TSA including

monthly unitary charge already stands approved by the Commission and

hence the licensee may recover the same by raising a separate bill on the



beneficiaries in ratio of their usage from the date of commissioning of the line

for which a separate transmission license has been granted by the

Commission. The said Unitary Charge is not being included in the ARR as

this cost has no impact on the ARR and consequently the transmission tariff

for use of system set up by HVPNL.

2.6 Total Expenditure

The total expenditure approved by the Commission with respect to the transmission business for the financial year 2013-14 is Rs. 5509 million and SLDC expenditures of Rs. 81.88 million. Tables 2.10 & 2.11 provides

the details of HVPNL’s proposed expenditures in respect of their

Transmission business and SLDC charges respectively and those approved

by the Commission for FY 2013-14.



Table 2.10 - Approved Expenditure (Transmission Business) for FY 2013-14 (Rs. Millions)

Description HVPNL Proposal

HERC Approval

Expenditure Employees’ cost 2142.77 1893.87 Terminal benefits 1617.00 843.13 R&M expenses 587.69 260.50 A & G Expenses 123.81 121.49 Interest on Capital Expenditure Borrowings 1740.42 1568.26 Debenture Interest (PF Bonds) 164.05 100.42 Debenture Interest (Pension Bonds) 673.00 301.26 Interest on Working Capital 385.60 150.00 Depreciation 1821.02 1652.76 Advance against depreciation 516.81 Unitary Charge for PPP project 600.00 Total Expenditure 10372.17 6891.69 Special Appropriations Tax on Income & Profit 518.58 -230.72 Interest on FBT Rs. 62.45 million 6.20 5.62 Debt redemption obligation (PF Bonds) 481.93 True up of ROE for FY 2011-12 -1157.58 Total Special Appropriations 1006.71 -1382.69 Total Expenditure (including special appropriation) 11378.88 5509.00

Table 2.11 - SLDC Approved Expenditure for FY 2013-14 (Rs. millions)


HERC Approval

Expenditure Employees’ cost 31.00 31.00 A & G Expenses 7.40 7.26 R&M expenses 16.42 16.42 Depreciation 14.99 14.99 Interest & Finance Charges on Capital Expenditure 10.70 10.70

Interest on Working Capital 1.51 1.51 Special Appropriations Tax on Income & Profit 1.57 Total Expenditure (including special appropriation) 83.59 81.88



The methodology for working out the various components of SLDC ARR is

the same as discussed in the case of ARR for the transmission business of

the petitioner. Hence the same is not repeated here.

2.7 Capital Expenditure (CAPEX)

HVPNL had filed Capital Investment Plan (CIP) for the Transmission & SLDC

business for FY 2013-14 vide their memo no. Ch-12/SE/RAU/F-66 vol. -V,

dated: 26-10-2012. The Commission, after preliminary scrutiny of the same,

conveyed certain deficiencies/ observations to HVPNL vide memo no.

6074/CAPEX/FY 2013-14/HERC/T-53 HVPNL/TCM dated 06.12.2012.

HVPNL, subsequently, vide memo no.126 Ch-104/SE/RAU/F-108, dated:

29.11.2012 filed ARR & Tariff proposal for its transmission & SLDC business

for FY 2013-14. The CIP annexed with the ARR petition was the same as

earlier submitted by HVPNL, on which certain observations were conveyed to

HVPNL vide memo No.6074 dated 06.12.2012.

The observations on CIP conveyed to HVPN vide letter dated 06.12.2012,

were replied partly (observation no. 3,5 &8) by HVPNL vide its memo no. ch-

17/SERAU/F-66/Volume-6 dated 28.12.2012 and on subsequent reminders

the revised CIP along with reply to the observations were submitted by

HVPNL vide memo no. ch-23/SERAU/F-66/Volume-6 dated 15.01.2013

which have been examined by the Commission and discussed as under:

2.7.1 Capital Investment Plan:

HVPNL had submitted that the Capital Investment Plan has now been

revised keeping in view the observations of the Commission’s on CIP of FY

2012-13. Further HVPNL has submitted that the Capital Investment Plan

initially submitted by them had certain mistakes in the projected expenditure

for World Bank funded projects during FY 2012-13, which have been

rectified.



The capital expenditure on transmission business, which was projected by

HVPNL at Rs. 10719. 80 million for FY 2013 -14 initially, have now been

revised to Rs. 11256.18 million and same for SLDC business remains

unchanged at Rs. 554.70 million as projected initially. Further HVPNL has

confirmed that all the works proposed/included in the Capital Investment Plan

for FY 2013-14 are approved by the competent authority i.e. Whole Time

Directors of HVPNL.

Additionally HVPNL had submitted that as far as the basis of Capital

Investment Plan is concerned, the Investments envisaged in the transmission

infrastructure is required to match with the planned generation capacity

addition and likely load growth in the State. They had submitted that the

planning of the transmission system is a continuous process and is well

defined in IEGC and Haryana Grid Code. The norms for planning defined

therein have been followed by HVPNL along with the load flow studies.

Further HVPNL had submitted that the intra-state transmission system has

been planned by taking into consideration the generation projects under

taken in the State i.e. Yamuna Nagar Thermal Power Plant, Rajiv Gandhi

Thermal Power Station, Khedar /Hisar, Indira Gandhi Thermal Power Project,

Jhajjar, Mahatma Gandhi Thermal Power Project, Jhajjar, Power Purchase

through bidding and Power arranged from Adani and PTC/Lanco )and the

underlying system of the above power evacuation projects, which are

expected to be completed / constructed during FY 2013-14.

The Commission has examined the submissions of HVPNL on CIP and

observes that HVPNL had projected capital expenditure amounting to Rs.

14057 million in their ARR petition for transmission and SLDC business for

FY 2011-12. The Commission allowed capital expenditure of Rs. 10158

million for FY 2011-12 subject to review of the progress of expenditure by the

end of year.



HVPNL has now informed that the actual capital expenditure incurred during

FY 2011-12 was Rs.7061.90 million which is 50.23 % of the capital

expenditure projected by HVPNL and 69.5% of the capital expenditure

approved by this Commission.

For FY 2012-13, HVPNL had projected capital expenditure of Rs. 9261.68

million in their ARR filing for transmission and SLDC business and

subsequently revised it to Rs. 9100.89 million. The Commission allowed

capital expenditure of Rs. 6878 million for transmission and SLDC business

for FY 2012-13 subject to review of the progress of expenditure by end of the

financial year. HVPNL has now submitted that the actual expenditure

incurred on capital works up to Nov, 2012 was Rs. 2601.78 million for

transmission and Rs. 10.8 million for SLDC business and they envisage

capital expenditure of Rs 6757.80 million during FY 2012-13, which if

achieved, shall be 76.99% of the capital expenditure projected by HVPNL.

An abstract of the capital expenditure projected by HVPNL, that approved by

the Commission and the actual expenditure incurred during the last 5 years

(ending Sept, 2012) is presented in Table 2.12:-

Table 2.12 - Capital expenditure projected by HVPNL, approved by HERC & actual

FY Projected Expenditure by

HVPNL

Expenditure approved by

HERC

Actual Expenditure

% of actual w.r.t. projected

expenditure

% of actual w.r.t.

approved expenditure

2008-09 9613.90 6601.41 6704.40 69.73 101.56 2009-10 24009.75 19000 10818.80 45.06 56.94 2010-11 23605.60 17000 10927.00 46.29 63.64 2011-12 14057.51/

9172 rev. 10158 7061.90 50.23 69.52

2012-13 9261.68/ 9100.89 rev

6878 2612.57 (upto Nov,

12) 6757.85 (likely exp.)

28.70 37.98

The Commission has examined and assessed capital expenditure for FY

2013-14 on the following basis:-



i) The capital expenditure has been considered 100% of the

projected expenditure for the works which are likely to be

completed in 2012-13.

ii) The capital expenditure is limited to 90% of the estimated cost

where the works are in progress and likely to complete in 2013-

14.

iii) In case of schemes where orders have been placed/ likely to be

placed and work is likely to commence in FY 2012-13, the

capital expenditure is limited to 50%.

iv) For the works where NITs will be issued in the first quarter of

2013-14, the capital expenditure is limited to 25% of the

estimated cost.

The revised CIP for FY 2013-14 submitted by HVPNL for the consideration of

the Commission is as presented in the table that follows.

Revised Capital Investment Plan for the year 2013-14

(Rs. in Millions) Sr. No.

Description Expenditure Incurred upto March 2012

Expenditure Incurred during

April 12 to November

12

Likely Expenditure

Incurred during

Dec. 12 to March 13

Likely Expenditur

e during 2012-13

Likely Expendit

ure during

2013-14

Likely Expendit

ure during

2014-15

Transmission Business 1 Domestic Funded

Works 11019.697 1514.741 1889.872 3404.613 5195.348 4873.749

2 JICA (Sanctioned works & new Works to be posed)

6980.599 104.149 180.087 284.236 1067.729 697.700

3 World Bank 4164.394 821.697 1234.264 2055.961 4254.285 4030.444 4 IT Plan 4.000 0.500 135.500 136.000 100.000 19.400 5 Land Cost for

substations 992.383 160.693 705.048 865.741 638.821 74.376

Total 23161.073 2601.780 4144.771 6746.551 11256.183 9695.669 1 SLDC Business 0 10.8 0.5 11.3 554.7 242.3



As per the revised CIP submitted by HVPNL, the capital expenditure for FY

2013-14 has been projected as Rs. 11810.88 million (Rs. 11256.18 million for

transmission business and Rs. 554.70 million for SLDC business). The

Commission has examined the same keeping in view the present status

submitted by HVPNL vide memo no. Ch-23/SERAU/F-66/Volume-6 dated

15.01.2013 and past performance of execution of projects by them. The

Commission’s assessment of the Capital Investment Plan proposed by

HVPNL for 2013-14 is as under

a) Domestic Funded Work:

HVPNL has projected capital expenditure of Rs. 5195 million in FY 2013-14

from domestic funded work. There are 42 works which were commissioned

before Dec. 2010 but these continue to be in the list of capital works under

progress meaning thereby that their account is yet to be finalized. The

pendency of closure of contracts of these works is a matter of concern.

Further out of 398 works under domestic funding, 142 works, with an

estimated cost of Rs .4250 million, have been shown as works yet to be

started and against these works an expenditure of Rs. 400 million has been

shown in FY 2012-13 and R.s 2650 million in FY 2013-14. Given the

progress, the Commission is of the view that HVPNL may not be able to

undertake more than 50% of the capital expenditure projected by them

against these works.

At serial no. 276 in the list of capital works ( under the head misc. capital

works) Rs. 450 million capital expenditure on the existing sub-station has

been shown without any detail of works and their commencement /

completion schedule similarly an expenditure of Rs. 350 million has been

shown during FY 2013-14 . In the absence of requisite details the

Commission has no means to assess or apply prudence check on such

capital expenditure and hence the same is dis - allowed by the Commission.



The list of capital works submitted by HVPNL also includes unapproved

capital works of Rs. 5250 million against which an expenditure of 325 million

has been proposed in FY 2013-14. The Commission has considered the

same and in the absence of requisite details disallows the same.

b) World Bank Funded Works:

In the Capital Investment Plan submitted by HVPNL, there are 124 works

with estimated cost of Rs. 14500 million and the likely expenditure shown for

FY 2012-13 and 2013-14 is Rs. 2056 million and Rs. 4250 million

respectively. The capital expenditure proposed by HVPNL is presented in the

table below.

(Rs. in Millions)

Sr. No. of works

as per CIP

Estimated cost Expenditure

proposed

2013-14

Remarks

64-77 1250 620 NIT issued in July

2012 works yet to

be awarded

93-109 1670 830 NIT issued by Oct.

2012 works yet to

be awarded

78-92 1750 870 NIT yet to be issued

111-119 1600 470 NIT yet to be issued

Total 6270 2790

The Commission observes that HVPNL has proposed an expenditure of 2790

million against an estimated cost of Rs. 6270 million for the World Bank

funded capital works wherein the NIT/award for majority of the works is yet

to be done and which is likely to be done in the middle of the next financial



year. Hence the Commission is of the considered view that HVPNL may not

be able to incur Capital expenditure as projected by them.

c) JICA funded works:

There are 55 no. works with an estimated cost of Rs. 9000 million

approximately, out of these 44 works were awarded prior to Dec. 2009, which

have been completed by March. 2012 but account of these works are yet to

be finalized and expenditure for the same have also been projected in FY

2013-14.

For five nos. works with an estimated cost of Rs. 1360 million NIT is yet to be

issued and an expenditure of Rs. 650 million have been projected in FY

2013-14 which in the view of the Commission may not possible as per the

past performance of HVPNL.

For the capital expenditure likely to be incurred in FY 2012-13, HVPNL has

indicated likely expenditure of Rs. 4144.7 million during four months (Dec.-

2012- March-2013) whereas the expenditure incurred during April to

November, 2012 is Rs. 2601.8 million. The Commission, based on the past

performance of the HVPNL / achievement in this regard is of the view that

HVPNL may not be able to achieve the target and may be able to spend only

about Rs. 6000 million on the capital works during FY 2012-13.

In view of above discussion the scheme wise estimated capital expenditure

that can be incurred by HVPNLL during FY 2013-14 is given as under:

An abstract of the Revised Capital Expenditure proposed by HVPNL and the

Estimated Capital Expenditure that is allowed to incurred by HVPNL during

FY 2013-14 is as per present status of works is as under:-



Table 2.13 Approved Capital Expenditure ( Rs. in millions )

Sr. No.

Description Revised Capital Expenditure proposed by

HVPNL for FY 2013-14

Approved Capital Expenditure for

FY 2013-14

A Transmission Business

1 Domestic Funded Works 5195.348 3117

2 JICA Funded Works 1067.729 960.30

3 World Bank Funded Works 4254.285 2552.40

4 IT Plan 100.00 100

5 Land Cost for substations 638.821 638.82

Total Transmission Business

11256.182 7368.52

B SLDC Business

1 Consultancy charges 27.00 27.00

2 RTUs /Power supply 527.70 316.62

Total SLDC Business 554.70 343.62

Total Transmission & SLDC Business

11810.88 7712.14

Accordingly, keeping in view of the present status of the ongoing and new

works to be commissioned and as per the assessment of the Commission,

the Capital Expenditure for FY 2013-14 works out to be Rs.7368.52 million

for transmission business against the revised projections of Rs. 11256 million

submitted by HVPNL and Rs. 343.62 million for SLDC business against the

projection of Rs. 554.70 million.

The Commission , In view of the present status of works as indicated by

HVPNL and the record of actual spending with reference to the Capital

Expenditure projected by the utility and approved by the Commission for the



previous years, observes that it is very important for HVPNL to complete

these works worth Rs. 7712.14 million for transmission and SLDC

businesses during FY 2013-14, as the various works planned for completion

during FY 2013-14 are essential for evacuation of additional power available /

to be available for transmission and the improvement in the voltage profile

and transmission losses as well as expansion of SLDC. HVPNL, therefore,

need to gear up its resources of manpower to speed up the procurement

activity for award and execution of various works planned so that the desired

improvements are brought about in the transmission system of Haryana

State to match with the load growth.

In view of the above discussions the Commission approves capital

expenditure for FY 2013-14 at Rs.7368.52 million for transmission business

and Rs.343.62 million for SLDC business. In case HVPNL is not able to incur

capital expenditure on various works, necessary adjustments shall be carried

out in the subsequent ARR / truing up order of the Commission.

2.8 Return on Equity (ROE)

The petitioner has sought Return on Equity (ROE) amounting to Rs. 2591.97

million @ 14% on an opening balance of Rs.18514.10 million.

The Commission had observed in its order dated 02.11.2012 that it has been

allowing return on equity to HVPNL even on that portion of equity that has

been used to fund assets which have not formed part of transmission assets

till date. It is noted that tariff is payable by the consumers/ beneficiaries in lieu

of the transmission service provided to them by the licensee for use of the

transmission assets. Till the assets are commissioned and put to use, no

service can be said to have been provided by the licensee to the consumers

and hence no tariff can be recovered for such assets.



The HERC MYT regulation 20 clearly states that “Return on equity may be

allowed on equity employed in assets in use considering the following and

subject to regulation 20.1 below:

i. Equity employed in accordance with regulation 19.1 and 19.2 on

assets (in use) commissioned prior to the beginning of the year; plus

II. 50% of equity capital portion of the allowable capital cost for the

assets put to use during the year.

Provided that for the purpose of truing up for the generation company, return

on equity shall be allowed from the COD on pro-rata basis based on

documentary evidence provided for the assets put to commercial operation

during the year.

20.3 Return on equity invested in work in progress shall be allowed from

the actual date of commercial operation of the assets.”

Based on the audited accounts of the licensee and the Commission

estimates of the progress of additions to capital works, the Commission is of

the view that 30% equity relating to CWIP as on 31.3.2013 amounting to Rs.

4500.37 million shall be excluded from the opening equity capital.

Additionally, it has been observed that the licensee had received equity from

the state government amounting to Rs. 2725 million for capital works in FY

2011-12 whereas it has utilized only Rs. 1098.48 million for the purpose.

Therefore, the Commission has excluded the unutilized equity amounting to

Rs. 1626.52 million from the calculation of the ROE. The Commission

observes that there is a significant shortfall in undertaking expenditures for

capital works by HVPNL vis – a – vis those approved by the Commission.

The execution of the approved capital works would have enhanced the

integrity and reliability of the transmission system. HVPNL, despite the

directions of the Commission failed to provide data on dependability of their

transmission system as distinguished from the transmission system



availability. Further, HVPNL, despite repeated directions of the Commission

has failed to provide SEMs on all its interface points with the Discoms as well

as reduce intra – state transmission losses. Hence in view of shortfall in

performance, the Commission decides to restrict ROE @ 7% on the balance

equity amounting to Rs. 8638.93 million. The allowed ROE is Rs. 604.72

million.

2.9 Capital Base & CWIP

In light of the above discussions the capital expenditure for FY 2013-14

approved by the Commission is Rs. 7368.52 million for transmission works &

Rs. 343.62 million for SLDC and in case HVPNL is not able to spend the

same, necessary adjustment shall be carried out in the next year’s ARR.

Table 2.14 - Calculation of CWIP for FY 2013-14 (Rs. millions)

Description

HVPNL Proposal

HERC Approval

2013-14 2012-13 2013-14 Opening balance of CWIP 14250.30 15565.47 15001.23

Additions during the year 10719.80 6757.85 7712.14

Transfer to GFA 7987.32 7322.09 7074.54

Closing balance of CWIP 16982.78 15001.23 15638.83

Funding of CAPEX :

Equity 2143.95 2057.69 2143.95

Consumer contribution

91.04 Loan funds 8575.85 4609.12 5568.19

Total Funds (Including IDC & Expenses Capitalised)

10719.80

6757.85 7712.14

2.10 Gross Fixed Assets (GFA)

The opening balance of GFA as on 1.4.2013 is based on the closing balance

of GFA as on 31.3.2012 in accordance with the audited accounts of HVPNL.

The additions to GFA are derived from the CWIP. The computation of gross

fixed assets for FY 2013-14 is presented in the Table 2.15 below:-



Table 2.15 - Determination of GFA for FY 2013-14 (Rs. millions) Description HVPNL

Proposal FY 2013-14

HERC revised

estimate FY 2012-13

HERC Approval

FY 2013-14

Opening Balance of gross fixed assets 52698.88 44524.72 51846.81 Add: Additions to GFA 7987.32 7322.09 7074.54 Less: Retirement 0 0 0 Closing balance 60686.20 51846.81 58921.35 Consumers Contribution

1019.33 1019.35

SLDC 436.98 436.98

2.11 Non Tariff Income and Other Income

2.11.1 Non tariff income for the year 2013-14

HVPNL has proposed that it expects to earn Rs. 48.51 million on account of

non - tariff income during FY 2013-14 for transmission business and Rs. 1.08

million for SLDC business. The Commission finds the projection reasonable

and allows the same in the ARR under consideration.

2.11.2 Truing up of Non Tariff Income for FY 2011-12

As per audited accounts for FY 2011-12, the licensee has earned Rs. 716.35

million as non tariff income and Rs. 56.20 million as reactive energy charges

from UHBVNL and DHBVNL. After exempting income of Rs.333.19 million

from treasury operations, profit from sale of assets Rs. 2.86 million and

interest on refund of income tax Rs. 99.84 million used for redemption of

pension bonds and non tariff income of Rs. 85.21 million allowed in the ARR

order for FY 2011-12, the balance amount of Rs. 263.87 million is added to

the non tariff income for FY 2013-14. The procedure adopted for truing up is

the same as in previous years. All these incomes have been earned on

expenses which have been incurred by the consumers of HVPNL at one time

or the other and hence are due for truing up.



The computation of non- tariff and other income is presented in the Table

2.16:

Table 2.16 - Non- tariff income for Transmission for FY 2013-14 (Rs. millions)


HERC Approval

Investment income 31.85 31.85

Ancillary and incidental income 16.67 16.67

Total 48.51 48.51 True up benefit based on audited accounts for FY 2011-12 263.87

Total of Non-tariff Income 312.38

Less SLDC 1.08 1.08 Total of Non-tariff Income for Transmission 47.43 311.30 In the case of SLDC, the Commission allows a non-tariff income of Rs. 1.08

million as proposed by the petitioner.

2.11.3 True up of SLDC expenses for FY 2011-12

The Commission had allowed the licensee to recover SLDC expenses

amounting to Rs. 127.84 million for FY 2011-12. However, based on audited

accounts, the Commission observes that the total SLDC expenses incurred

by the licensee are only Rs. 87.05million. After adding the normative ROE

and income tax thereon, the total actual expenses fall short of the allowed

expenses by Rs. 33.92 million. The difference is mainly on account of

employee cost and depreciation and is subject to truing up as the licensee

was unable to add the desired capital works to the SLDC. The excess

amount allowed in the ARR order for FY 2011-12 is now reduced from the

ARR for FY 2013-14.



2.11.4 Proportionate charge for 124 MW

Based on the total approved ARR for FY 2013-14 the Commission estimates

a recovery of Rs. 106.99 millions (Rs. 5802.43 millions / 6725 (Peak Met in

MW) X 124 MW) being the proportionate revenue expected to be earned by

the petitioner for 124 MW Transmission Charges in respect of the long term

open access consumer i.e. Tata Power Trading Company Ltd for 10% of the

total project capacity of Jhajjar Power Ltd. Hence in accordance with the

Open Access Regulations of the Commission the revenue expected to be

earned on account of this in FY 2013-14, subject to truing up on an actual

basis, has been reduced from the ARR of HVPNL.

2.12 Aggregate Revenue Requirement

In light of the above discussions, the Commission approves Rs. 5695.44

million as the net aggregate revenue requirement of the Transmission

business and Rs. 46.88 million as ARR/ operating expenses for SLDC for FY

2013-14. The details are presented in Tables 2.17 & 2.18:



Table 2.17 -Transmission ARR for FY 2013-14 (Rs. millions) Description HVPNL Proposal HERC Approval

Return on equity 2591.97 604.72 Total expenditure 11378.88 5509.00 Minus Non-tariff income -48.51 -311.30 Minus proportionate charge for 124 MW 106.99

Total Aggregate Revenue Requirement 13922.34 5695.44

Table 2.18 - SLDC ARR for FY 2013-14 (Rs. millions) Description HVPNL Proposal HERC Approval

Return on equity 7.84 0 Total expenditure 83.59 81.88 Minus Non-tariff income -1.08 -1.08 Minus true up for FY 2011-12 -33.92 Total Aggregate Revenue Requirement 90.35 46.88

2.13 Transmission Losses

Regulation 45.4 of the Haryana Electricity Regulatory Commission (Terms

and Conditions for Determination of Tariff for Generation, Transmission,

Wheeling and Distribution & Retail Supply under Multi Year Tariff

Framework) Regulations, 2012 provides as under:

(a) The Commission may specify the trajectory for intra-state transmission loss based on the approved capital investment plan in the MYT order;

(b) The losses shall be borne by the beneficiaries in kind. The SLDC shall reduce the demand scheduled by the beneficiaries during each time block by the 12 months rolling transmission losses (the said period will be the 12 months period preceding the relevant month by 3 months). The SLDC shall post the rolling 12 months losses regularly on its website. The SLDC, however, shall develop necessary software for working out rolling 52 week losses and reduce the scheduled demand accordingly thereafter.



(c) If the actual annual transmission losses (%) exceed the benchmark value (%) approved by the Commission, the licensee(s) shall be penalized in the following manner:

Percentage increase above the Loss level specified by the Commission

Penalty

Upto 5% No Penalty More than 5% and upto 10% Reduction in return on equity in Rs crore by

0.5 %

More than 10% and upto 15% Reduction in return on equity in Rs crore by 1 %

More than 15% Reduction in return on equity in Rs Crore by 1% + 0.5% for every increase of 5% or part thereof above 15%

Example: In case the specified transmission loss level is 3%, then an

increase of 0.15 in the loss level will amount to 5% increase. Similarly,

an increase of 0.30 and 0.45 in the loss level will amount to 10% and

15% increase in the loss level respectively.

HVPNL had submitted that Transmission losses has two components: Inter-

state transmission losses i.e. loss incurred in wheeling power from out-of-

state generating sources to the State transmission network (HVPNL) system

and intra-state transmission losses i.e loss of energy within the state

transmission network. The HVPN has no control over inter-state transmission

losses. The losses can be further sub-grouped depending upon the stage of

power transformation & transmission system as Transmission losses in

various voltage levels (400kV/220kV/132kV/66kV).

Additionally it was submitted by HVPNL that the energy losses over a given

transmission system keep on varying depending upon power flows, voltage

profile, reactive flows, pattern of energy use, load demand, load density and

capability & configuration of transmission system etc.

HVPNL had submitted that it is incorrect to say that the transmission system

owner has little control over these, since the outage of a transmission



element increases power flow on parallel path which affects losses also. The

Central Electricity Regulatory Commission has also expressed the similar

view and has categorically indicated in its proposed approach for sharing of

charges and losses in interstate transmission system.

It was further submitted by HVPNL that as per CERC (Rates, Charges and

Terms and Conditions for use of intervening Transmission Facilities)

Regulations, 2010, the normative transmission losses for line length of every

50km of distance is as under:

Sr. No. Type of Transmission System Line Losses %

1. 400 kV 0.5%

2. 220 kV 1.0%

3. 132 kV 4.3% 4. 66 kV 8.0%

The total number of sub-stations and transmission lines owned by HVPNL

ending Sept. 2012 is presented in the table that follows.

LINES (in Ckt. Kms.)

400 KV 628.264

220 KV 4545.336

132 KV 3830.539

66 KV 2419.182

Total 11423.321

SUB-STATIONS

400 KV 6

220 KV 54

132 KV 166

66 KV 119

Total 361



HVPNL had submitted that it may be seen from above that in Haryana major

portion in the Transmission System is of 132 kV and below voltage network.

It is an acknowledged fact that lowers the transmission voltage more are the

losses as also specified by CERC Regulation, 2010, stated above.

HVPNL had further submitted that the Commission, in the past, had been

restricting the Transmission losses and is not allowing the actual losses

despite the fact that the loss level achieved by HVPNL is very much

comparable with other best performing utilities in the country. However,

HVPN in the previous ARR while submitting its reply to the compliance of

directives issued by the HERC has made submissions in support of the

same, and the commission had allowed Transmission Losses of 2.5% for FY

2012-13.

HVPNL had further submitted that according to a study carried out by Electric

Power Research Institute (EPRI) of the USA some time back, (referred in 17th

Power survey report of CEA) the losses in various elements of the

Transmission system usually are of the order as indicated below:-

System element Power losses (%)

Minimum Maximum

Step-up transformers & EHV transmission system 0.5 1.0

Transformation to intermediate voltage level,

transmission system & step down to sub-

transmission voltage level

1.5 3.0

Sub-transmission system & step-down to distribution

voltage level

2.0 4.5

HVPNL had submitted that with meters at the interface locations of HVPNL

with the Distribution Companies (DISCOMs) at 790 locations, the



transmission losses of the system (Intra-state transmission losses) are being

calculated on the basis of energy recorded by these meters.

The average transmission loss level for the years 2009-10, 2010-11, 2011-

2012 & 2012-13 as submitted by HVPNL (upto 9/ 2012) is presented below.

Period Intra-state Losses (%)

2009-10 2.68

2010-11 2.63

2011-12 2.76

2012-13 ( up to 9/2012)* 2.62

* based on provisional energy account of September 2012

In view of the above HVPNL has requested that the Commission may allow

the actual Transmission losses which will be of the order of 2.62 % keeping

in view the level achieved upto September, 2012 of the current financial year.

The following table provides the position of interstate & intrastate

transmission losses as approved by HERC and actual loss level achieved by

HVPNL for the last 5 years.

Transmission losses for FY 2008-09 to FY 2012-13 (end Sept. 2012):

FY Inter State Losses Intra State Losses

% Losses approved by HERC

% Losses actual

% Losses approved by HERC

% Losses actual

2008-09 3.85 4.56 2.10 2.57

2009-10 3.85 4.70 2.10 2.68

2010-11 3.85 3.82 2.10 2.63

2011-12 3.63 2.10 2.76

2012-13

2.50 - 2.50 2.62 (ending Sept. 12)



Inter-state Transmission Losses: The Commission observes from the above table that the trend of inter-state

transmission losses is on the decline from 4.56% in FY 2008-09 to 3.82% in

FY 2010 -11 and thereafter the pooled transmission losses in the Northern

region grid on the basis of rolling 52 weeks average losses are being shared

by the NR States which varies between 2.5% to 6.08% during the period Oct.

2011 to Sept. 2012 as per statement annexed in the ARR. HVPN has

submitted that they have no control over inter-state transmission losses.

Intra- state Transmission Losses:

As regard intra-state transmission losses, it is observed by the Commission

that these losses have increased from 2.57% in FY 2008-09 to 2.68% in FY

200-10 and further increased to 2.76% in FY 2011-12 The Intra-state

Transmission losses during FY 2012-13 have been reported to be 2.62%

ending Sept. 2012 against target of 2.5% approved by the Commission in its

order dated 29th March, 2012 in the matter of ARR for transmission business

charges and SLDC charges for the year 2012-13.

HVPNL had stated that these losses are due to energy dissipated in the

conductors and equipment used for transmission, sub-transmission and

transformation. These technical losses are inherent in a system and cannot

be reduced beyond an optimum level. The losses in a transmission system

keep on varying depending upon power flows, voltage profile, reactive flows,

pattern of energy use, load demand, load density and capability &

configuration of transmission system etc. HVPNL stated that they have little

control over these, except to minimize. The outage of a transmission element

increases power flow on parallel path which affects losses.



Keeping in view the loss level achieved up to September, 2012 of the

current financial year HVPNL has prayed that they may be allowed the

actual Transmission losses in FY 2013-14 which will be of the order of 2.6

%.

The Commission is of the view that it is a fact that in a given transmission

system, with the increase in system demand, the transmission loss will tend

to increase. In the old transmission lines the changes in the property of the

conducting material of lines over a passage of its useful life also adds to the

transmission losses. Hence Capital expenditure for new S/Stns / lines and

augmentation of existing transmission system is to be so planned that the

length of the lines & loading for individual circuits reduces and the size of the

conductors in lines as well as the rating of other equipments is so chosen

that the continuous loading on all components of the system is limited to

about two third of their rated capacity as per standard design practices. From

the capital investment plan for FY 2013-14 it has been observed that most of

the works for addition and augmentation of transmission system which were

planned to be commissioned during FY 2011-12/ 2012-13 have been delayed

considerably. The actual capital expenditure is far short of the expenditure

projected for the respective years.

HVPNL, in the ARR for FY 2012-13, had indicated that their transformation

capacity on 31.03.2012 would be 18168.60 MVA, but the actual achievement

is 15373.60 MVA which is 84.65% of the projected one. Further the

transformation capacity for FY2012-13 was projected 19295.60 MVA

whereas now it is anticipated to be 17898.10 MVA as per ARR 2013-14.

HVPN has projected the same as 19826.60 MVA for FY 2013-14.

The Intra-state transmission losses are showing an increasing trend i.e.

2.57% (2008-09) to 2.76% (2011-12). HVPN has submitted that they are

achieving the intra-state transmission losses comparable to best performing

utilities and they are making best efforts to bring down the losses to



optimum level. In reply to the observation of the Commission it has been

mentioned that the capital investment envisaged during 2013-14 is on

strengthening of its transmission system with addition of new substations and

lines, augmentation of the existing sub-stations and installation of new

capacitor banks in the system and also includes the augmentation of fully

loaded transformer and replacement of conventional insulators with anti fog/

silicon composite insulators and replacement of defective capacitor units in

the existing capacitor banks.

It has been indicated by HVPNL that during FY 2011-12 twenty eight new

substations have been added, 46 existing substations augmented, 759.829

Ckt Km of transmission lines added as a result of which the transformation

capacity has been increased by 5790 MVA. Further In addition 5 new

substations added, 24 existing substations augmented and 57 Ckt Km of

transmission lines have been added till Sept. 2012-13 thereby adding 1713

MVA transformation capacity in the system. It is observed by the

Commission that with the commissioning of about 70% of the planned works

in FY 2010-11 and FY 2011-12, the transmission losses have shown a

declining trend from 2.68% during FY 2010-1 1to 2.63% during FY 2010-11

and 2.61% during first half of FY 2012-13. Had all the planned capital works

been implemented in time matching with the load growth including

infrastructure down the line after synchronization, the transmission losses

could have further declined.

In view of above discussion and in line with the HERC MYT Regulation, 2012

which provides that the Commission may specify the trajectory for intra-state

transmission loss, the Commission has set in trajectory for reduction of intra-

state transmission losses in its FY 2012-13 order on HVPN ARR and tariff,

wherein HVPN was advised to take all effective measures to contain the

intra-state transmission losses.



In view of the above discussions the Commission pegs intra-state losses for

FY 2013-14 at 2.5% with the road map for reduction of these losses further at

the rate of 0.1% p.a. if the actual transmission losses (%) exceed the

benchmarked 2.5% the licensee shall be panelized as per the regulation in

vogue.

Provision of Polymer Insulators

In order to avoid the problem of tripping of power transmission lines due to

dense foggy conditions in winter season, HVPNL was advised to provide

anti-fog polymer insulators on the transmission network. HVPN has

submitted that under stage -1 they have replaced 89% porcelain insulators

with polymer insulators and under stage -2, about 50% work have been

completed. The progress of cleaning of insulators, where the insulators have

not been replaced, prior to onset of winter season during 2012-13 have not

been provided by HVPNL. .

In view of the above, HVPNL is directed that the circuits on which polymer insulators have not been installed must be thoroughly cleaned before onset of winter and a plan shall be submitted to the Commission by October, 2013 for information of the Commission.

Installation of Capacitor Banks

In order to improve the power factor of the transmission system, HVPNL was

advised to have surprise checks by senior officers to ensure that the

instructions for proper operation of capacitor banks in the system are

followed in letter and spirit and to install 11 KV automatic switchable

capacitors banks in its substations which can be operated without human

intervention as per system requirements. HVPN has submitted that they have

installed 3733.942 MVAR capacitors banks as on 30.09.2012 and added 363

MVAR capacitor banks during 2012-13 (till Sept. 2012). In addition it has



been planned to add 221.65 MVAR capacitor banks and to replace 160

MVAR defective capacitor in the system .Regarding switching on /off as per

system requirements, HVPNL has stated that they have issued the

necessary instructions. However, the report in respect of checking by the senior offices has not been to be submitted. HVPNL is directed to submit a feasibility report in this respect to the Commission within two months from the date of this order.

Special Energy Meters

It has been submitted by HVPNL that there are 790 interface metering

points between HVPNL & DISCOMs. The status of Special Energy Meters

(SEMs) installed at various interface with DISCOMs, as on 30.09.2012 is as

under:

HVPNL had submitted that at the new interface points, where conventional

energy meters were installed initially, the same are being replaced with

special energy meters (SEMs). The Commission is of the view that Special Energy Meters (SEMs) are required to be provided at all interface points in accordance with CEA’s guidelines for installation

Sr. No.

Description UHBVNL (Interface)

DHBVNL (Interface)

TOTAL

1. Total no. of Metering Points where

SEMs are installed

417 348 765

2. No. of Metering Points where

Special Energy Meters have not

been installed and ECMs are

installed

15 10 25

3. Total Metering Points 432 358 790



and operation of meters so as to have proper computation of energy transmitted to different licensees as also for proper computation of transmission losses. HVPNL was directed in the ARR & tariff order for FY 2012-13 to provide meters at all interface points. As per the latest

status, there are only 25 interface points with ECMs which are to be replaced

with SEMs. As far as the inter-State metering is concerned these meters are

installed and maintained by the Central Transmission Utility (Power Grid

Corporation of India Ltd.) Adequate back-up systems also exist to avoid

metering inadequacies in the system.

The Commission therefore directs that HVPNL should complete installation and commissioning of SEMs at all interface points by 30.06.2013 and submit a compliance report in this regard. Commissioning of pending 400/220 KV Transmission works

The Commission has advised that the new works planned for strengthening

the transmission system should be completed as per their target schedule.

HVPNL has reported that during FY 2011-12, 28 new substation have been

commissioned and 46 existing substations have been augmented thereby

increasing the transformation capacity by 5790 MVA and 760 Ckt. Kms of

transmission lines have been added to its transmission network. During

2012-13 till Sept. 2012, 5 new substations commissioned and 25 existing

substation have been augmented thereby raising the transformation capacity

by 1713 MVA.

An abstract of voltage wise number of substation and the transmission lines

as on 30.09.2012 is given as follows:



Sub-Stations

Abstract of transformation Capacity proposed to be added at HVPNL substations (220/33, 132/11, 132/33, 66/11, 66/33 and 33/11 kV level) is presented in the table below.

(MVA)

Sr.

No.

Transmission

work

Added

during

FY 2011-12

Target

FY 2012-13

Target FY

2013-14

UHBVN DHBVN UHBVN DHBVN UHBVN DHBVN

A New works 341.00 689.00 405.50 1227.00 792.00 242.50

B Augmentation 163.00 260.00 428.50 463.50 634.50 259.50

Grand Total 504.00 949.00 834.50 1690.50 1426.50 502.00

Voltage level

Addition during

2011-12

Addition during 2012-13

(Sept.2012)

Total As on 30.09.2012

New Aug New Aug

400 kV 4 - - 1 6

220 kV 9 13 3 10 54

132 kV 12 27 1 8 166

66 kV 3 6 1 6 119

Total 5790 MVA 1713 MVA 361

Investment 1491 crore 234.87 crore

Transmission Lines (New) (Aug)

Ckt. Kms

400 kV 204.880 - 628.264

220 kV 319.340 22.888 4545.336

132 kV 183.302 9.165 3830.539

66 kV 52.307 25.084 2419.182

Total 11423.321



Transformation Capacity FY 2013-14 (MVA) UHBVNL DHBVNL Total

Ending March 2011 7519.7 6400.9 13920.60

Added during 2011-12 504.00 949.00 1453.00

Ending March 2012 8023.70 7349.90 15373.00

Anticipated during 2012-13 834.00 1690.50 2524.50

Anticipated upto March 2013 8857.70 9040.40 17898.10

% 49.49 50.51

Projected during 2013-14 1426.50 502.00 1928.60

Projected up to March 2014 10284.20 9542.40 19826.60

% 51.87 48.13

Damage of Power Transformers:

The Commission in its FY 2012-13 ARR & Tariff order had advised HVPNL to

strictly enforce the preventive maintenance schedules, ensure healthiness of

the protection system, prevent over loading and implement the findings of the

enquiry reports of the Maintenance and Protection wing of the HVPNL so as

to aim for zero damage rate for Power Transformers.

The following table provides the status of damage of power transformers

during the last 5 years as reported by HVPNL.

Sr.

No.

Period Total no. of Power

Transformers

No. of Power Transformers

damaged

No. % age

1 2008-09 710 20 2.82

2 2009-10 742 20 2.70



It has been observed by the Commission that during 2011-12, 29 power

transformers have damaged. During 2012-13 12 power transformers have

damaged till Sept. 2012 which is a very alarming state of affair. This shows

lack of seriousness on part of the utility to save the power transformers from

damage. There is a need to focus on this issue to contain this loss of vital

and costliest element of the transmission network which not only adds to the

financial loss of the company but results in outages of long duration causing

harassment to large number of electricity consumers. HVPNL is directed to strictly enforce the preventive maintenance schedules, ensure healthiness of the protection system, prevent over loading so as to minimize damage rate of Power Transformers.

Fatal & Non – fatal accidents:

The following table provides the data in respect of fatal / non-fatal accidents

occurring on HVPNL’s System during the last 5 years.

Fatal / Non – Fatal Accidents (FY 2008-09 to FY 2012-13 up to Sept. 12) Sr. No.

Perio

d

Human Beings Animals Total

Fatal Non fatal Fatal Non

Fatal

Fatal Non-

Fatal

1 2008-09 1 1 1 3 2 4

2 2009-10 1 4 0 0 1 4

3 2010-11 1 3 0 0 1 3

3 2010-11 776 23 2.96

4 2011-12 841 29 2.02

5 2012-13 (end Sept.

2012)

931 12



4 2011-12

2 5 - - 2 5

5. 2012-13 (end

Sept. 2012)

1 4 - - 1 4

HVPNL has submitted that it has put in place a set of well-framed safety

rules, which are intended to avoid accidents in the system and all possible

safety measures are presently being taken to avoid occurrence of such

accidents. The supervisory staff, subordinate staff and the workers are

regularly advised to take safety measures while performing their duties.

The Commission observes that the incidence of fatal / non-fatal accidents

have not shown the desired improvement despite the above assertions of

HVPNL. Hence there seems to be little awareness amongst the field staff of

HVPNL. HVPNL is once again advised to investigate thoroughly the causes for fatal & non fatal accidents and take all remedial measures so as to minimise these to zero and sensitise the supervisory staff / subordinate staff regarding the safety rules that they must adhere to.

In view of the above discussions HVPNL is directed to:

i) Provide polymer insulators on the remaining transmission lines within a reasonable time frame. The quarterly progress in this respect may be submitted to the Commission. The plan to clean the insulator strings on the transmission lines before the onset of winter season may also be submitted to the Commission by October, 2013. ii) Carry out surprise checks that all capacitor banks are in working order & are kept in service as per the system requirements. The inspection report of all the TS circles be compiled and sent to the Commission by the end of each quarter. HVPNL is directed to submit a



feasibility report to install automatic switchable capacitor banks within two months from the date of this order. iii) Submit status / action plan and its implementation thereof during FY 2012-13 and FY 2013-14 for prevention the damage to power transformers. The maintenance audit of its sub-stations specially the power transformers. The action plan in respect of replacement of sick power transformers vis a vis the total no. of sick power transformers running in the system along with their location, rating and age also be supplied to the Commission on a quarterly basis.



3. TRANSMISSION TARIFF & SLDC CHARGES

3.1 Background Information on Tariff Filing

This Section deals with the determination of transmission tariff and SLDC

charges for FY 2013-14 based on the ARR determined by the Commission in

Chapter–2 of this order. As transmission system cost and cost of operating

SLDC are ‘fixed cost’ having no variable component the Commission has

been determining a single part transmission tariff based on the consolidated

transformation capacity (MVA) of UHBVNL and DHBVNL as projected by the

petitioner for respective years. Thus the entire cost of transmission business

(including SLDC) was considered as of ‘fixed’ nature, and hence the

Commission considered it reasonable to allow recovery of entire cost through

a ‘demand charge’ on a monthly basis. The Commission has notified the

Haryana Electricity Regulatory Commission (Terms and Conditions for

Determination of Transmission Tariff for Generation, Transmission, Wheeling

and Distribution & Retail Supply under Multi Year Tariff Framework)

Regulations, 2012. Regulation 50 of the said regulations provides for

payment of Transmission Charges as under:-

(a) Transmission licensee shall recover the transmission charges at the normative annual transmission system availability factor specified for it by the Commission.

(b) Payment of transmission charges Annual transmission charges shall be fully recoverable at the specified level of target availability. Payment of transmission charges below the specified target availability shall be on pro-rata basis. The transmission licensee may recover its annual transmission charges by way of a fixed charge based on transformation capacity. The transmission charges shall be calculated on a monthly basis. In case of more than one beneficiaries of the transmission system, including the distribution licensees and long term and medium term open access consumers (but subject to any exclusion of any other open access



consumers as per the open access regulation notified by the Commission), the monthly transmission charges leviable on each beneficiary shall be computed as per the following formula.

ATC CA

Monthly Transmission Charges = --------- x -------- 12 CS

Where, ATC = Annual Transmission Charges payable by all the beneficiaries after deducting any benefits to be considered as decided by the Commission; CA = Transformation Capacity (MVA) allocated to each beneficiary. CS = Sum of Transformation Capacity (MVA) allocated to all beneficiaries. Note: Where allocated Transformation Capacity (MVA) of a beneficiary is not available, the contracted capacity in MW shall be converted in MVA at a power factor of 0.90 and the same shall be considered for computation of monthly transmission charges payable by the beneficiaries. Provided that monthly Transmission tariff shall also be shared by a Generation Company (including Renewable Energy Generators which opt for third party sale) if power from such Generating Company is sold to a consumer outside the State of Haryana to the extent of capacity contracted outside the state. Provided also that the transmission charges shall be payable by the short term open access consumers for the scheduled energy drawl at per kWh rate as worked out by dividing the annual transmission charges by the total volume of energy sales by the distribution licensee(s) during the previous year.

The transmission tariff & SLDC charges approved by the Commission in the

tariff order for 2012-13 are presented in the Table 3.1.



Table 3.1 - HERC approved transmission tariff & SLDC charges

for FY 2012-13 Tariff UHBVNL DHBVNL

Transmission Charges (Rs. million / month)

266.22 259.28

SLDC Charges (Rs. million / month) to be recovered from UHBVNL and DHBVNL in 50:50 proportion.

9.4775

Transmission Tariff for Short term Customers ( Rs./ kWh) based on energy sales.

0.21

3.2 Tariff Proposed by HVPNL for FY 2013-14:

HVPNL has sought revision in the existing Transmission tariff & SLDC

charges on the following grounds:

a) The aggregate revenue requirement representing the cost to be recovered

for the transmission business & SLDC for the FY 2013-14 is different from

the aggregate revenue requirement for the financial year 2012-13.

b) The individual parameters used for calculation of tariffs such as

transformation capacity and average demand are different for FY 2013-14 as

compared with FY 2012-13.

In the tariff petition under consideration , the petitioner has reiterated that so

far as transmission business is concerned all the expenses contribute

towards fixed cost only and as such the transmission tariff for FY 2013-14

has been proposed by HVPNL as single part tariff consisting of fixed charge

based on the transformation capacity (MVA) at the interconnection points.

Thus the petitioner has proposed to levy a fixed charge based on the ratio of

each long-term customer’s transformation capacity (including prospective

long term open access customer) to the total proposed transformation

capacity. Further, they have submitted that a customer who contracts firm

transmission capacity on short – term basis shall pay open access charges

on the lines of open access charges notified by HERC from time to time for



using the State Transmission facilities. The petitioner has proposed to retain

25% of the charges collected from the short term open access customers

and the balance shall be passed on to the long term customers including

Discoms in proportion to their transformation capacity. Retention of 25%

charges has been justified by the petitioner on the plea that they are required

to deal with Inter – State transactions as well as Intra – State transactions

and as such the work involved will be more than the work involved with

RLDCs despite volume of power being less than the volume handled by

CTU. Further monitoring and control shall have to be exercised by SLDC on

Intra –State as well as Inter – State system. HVPNL has further submitted

that the wheeling charges collected from short – term Open Access

Consumers shall be passed on to the respective Discom.

The petitioner has submitted that the anticipated transformation capacity at

all Interface points have been verified from the record and is 19826.60 MVA

for the year 2013-14. The transformation capacities for FY 2013-14 has

been estimated by HVPNL after taking into account the augmentations /

addition of new capacities (MVA) to be added. The details as submitted by

the petitioner are presented in the Table below.

Table 3.2 – Transformation capacity for FY 2013-14

UHBVNL DHBVNL Total

Transformation Capacity as on 31/03/2012 (MVA)

8023.70 9040.90 15373.60

Anticipated Transformation Capacity as on 31/03/2013(MVA)

8857.70 9040.40 17898.10

Projected Transformation Capacity as on 31/03/2014 (MVA)

10284.20 9542.40 19826.60

% Share in the projected Transformation Capacity

51.87% 48.13% 100%



In addition to the above the petitioner has proposed that besides recovery of

transmission and SLDC charges, they may also be allowed incentive on

achieving annual availability beyond the target availability of 98% (Target

availability) in accordance with the formula specified in the CERC

regulations. The petitioner has submitted that billing of the incentive shall be

done to the Discoms and long term consumers on annual basis.

The proposed transmission tariff is single part comprising fixed cost

component only. The tariff proposed by the petitioner is presented in Table

3.3.

Table 3.3 - HVPNL’s proposed Transmission Tariff for FY 2013-14 Tariff Ratio of Average

Transformation Capacity Fixed Charge

(Rs. million / month) UHBVNL 51.87% 590.69 DHBVNL 48.13% 548.69 TPTCL 21.393

On the issue of rebate/late Payment Surcharge, it has been stated by the

petitioner, that the same shall be applicable as per provisions in the

Secretary, HERC memo No. 793-796/HERC dated 30/07/2008. HVPNL has

also proposed to charge UHBVNL & DHBVNL and all short / long term open

access customers, reactive energy charge on the basis of recording made by

the existing Special Energy Meters (SEMs) and individual ABT compliant

meters of short term and long term open access customers @ 11.05 paise /

KVArh from 1/04/2013.

The recovery proposed above is based on the net aggregate revenue

requirement of Rs. 13,922.33 million projected by the petitioner for FY 2013-

14. The projected transformation capacity as on 31/03/2014 has been taken

as 19,826.60 MVA i.e. 10284.20 MVA for UHBVNL and 9542.40 MVA for

DHBVNL. Further based on the respective percentage shares in

transformation capacity i.e. 51.87% UHBVNL & 48.13% DHBVNL, the

monthly recovery has been apportioned by the petitioner.



In respect of short-term customers having intra state / interstate power

transactions, the petitioner has proposed to charge Rs. 0.44/kWh based on

projected energy sales of 32562.20 MU in FY 2013-14.

3.3 Analysis of the Tariff Proposal

The Commission has considered the HVPNL’s proposed transmission tariff

and SLDC charges for FY 2013-14 as well as their oral submissions in the

hearing held on 29.01.2013. The Commission accepts the plea of the

petitioner for considering all transmission related cost as fixed for the

purpose of this order. The Commission is of the view that transmission

business needs to be seen as a ‘pure wire / carrier’ business. Consequently,

almost the entire cost structure will be of ‘fixed’ nature and will not vary with

the volume of energy transmitted in any given year.

3.3.1 Transmission Cost

HVPNL has proposed Rs. 13,922.33 millions as their net aggregate revenue

requirement for transmission business for FY 2013-14. The Commission as

per the details presented in Chapter-2 (Table 2.17) of this order has

determined Rs. 5695.44 millions as the net aggregate revenue requirement

for transmission business in FY 2013-14. Hence the net ARR approved by

the Commission for FY 2013-14 shall form the basis of estimating monthly

recovery from the users of the transmission system i.e. UHBVNL & DHBVNL.

3.3.2 Tariff Design

The Commission, in its earlier order(s), allowed recovery of cost of

transmission charges based on the ratio of respective projected

transformation capacity of the two Discoms i.e. UHBVNL & DHBVNL. The

Commission has notified the Haryana Electricity Regulatory Commission

(Terms and Conditions for Determination of Tariff for Generation,

Transmission, Wheeling and Distribution & Retail Supply under Multi Year

Tariff Framework) Regulations, 2012 dated 5.12.2012. As per these

regulations the annual transmission charges shall be fully recoverable at



98.5% target availability in FY 2013--14. Payment of transmission charges

below 98.5% shall be on pro-rata basis. The transmission licensee may

recover its annual revenue requirement by way of a fixed charge based on

transformation capacity, contracted capacity, a charge based on energy

transmitted, connectivity charge, reactive energy charge or a combination of

these charges. The transmission charges shall be calculated on a monthly

basis. In case of more than one beneficiaries of the transmission system,

including the distribution licensees and long term open access customers,

the monthly transmission charges leviable on each beneficiary shall be

computed as per the formula incorporated in the terms and conditions

notified by the Commission for determining transmission tariff”.

In line with the above regulations, the Commission accepts the proposal of

the transmission licensee for recovery of transmission cost based on the

projected transformation capacities of the user(s) i.e. UHBVNL & DHBVNL.

3.4 Transmission tariff

The Commission, for determining transmission tariff, has considered the fact

that entire cost allocated to the transmission business is of ‘fixed’ nature as

already stated. Hence, it would be reasonable to recover the entire cost

through a demand charge based on the ratio of the projected transformation

capacity of the distribution licensees and long- term open access customer

i.e. TPTCL.

Considering the above factors, the Commission approves monthly fixed charges (Rs. million) for the transmission of power by HVPNL and transmission tariff for short term open access consumers for FY 2013-14 as per details given in the Table 3.4:-



Table 3.4 - Determination of Transmission Tariff (FY 2013-14) Particulars

Transmission Cost (Rs. millions) 5695.44 Projected Transformation Capacity (MVA) 19826.60

UHBVNL’s Share (MVA) 10284.20 DHBVNL’s Share (MVA) 9542.40

Ratio of Average Transformation Capacity UHBVNL (%) 51.87% DHBVNL (%) 48.13%

Transmission Charges Recoverable from TPTCL for contracted capacity of 124 MW (Rs. millions)

106.99

Transmission Charges Recoverable from UHBVNL (Rs. millions)

2954.2658

Transmission Charges Recoverable from DHBVNL (Rs. millions)

2741.1744

Monthly Transmission Charge UHBVNL (Rs. millions)

246.1888

Monthly Transmission Charge DHBVNL (Rs. millions)

228.4312

Monthly Transmission Charge TPTCL (Rs. millions)

8.6758

Transmission Tariff for short term open access customers based on energy sales of 32562.20 MUs (Rs / kWh)

0.1781

The short term open access customers will be subject to a single rate of Rs.

0.17/kWh (rounded off) as determined above. As the entire cost of

transmission system including renovation, modernization and augmentation

under the present tariff design is borne by the distribution companies and

long term open access consumers, the Commission in line with regulation 47

(b) of HERC Regulations, 2012 allows 25% of the charges collected from the

short – term open access consumers for use of intra – state transmission

system to be retained by HVPNL and the remaining shall be adjusted

towards reducing the transmission charges payable by the existing long term

/ medium term users.

3.5 Reactive Energy Charges

The petitioner has submitted that the Discoms, Generators and Open Access

consumers are expected to provide adequate reactive compensation in order



to ensure that they do not draw / inject VArs during low / high voltage

conditions, in line with the criteria laid in clause 6.6 of the Indian Electricity

Grid Code (IEGC). According to Clause 6.6(2) of the IEGC the VArh shall be

@ 10 Paisa / KVArh w.e.f. 1.4.2010 and the same shall be escalated at the

rate of 0.5 paisa / KVArh per year thereafter. Accordingly HVPNL has

proposed to charge UHBVNL & DHBVNL and all long term open access

consumers @ 11.05 paisa / KVArh on the basis of recording done by existing

SEMs and individual ABT compliant meters of long term Open Access

Consumers in FY 2013-14.

The Commission has considered the above and observes that HERC

Regulations, 2012 in vogue provides as under:

48 REACTIVE ENERGY CHARGES

(a) The reactive energy charges shall be as provided in the Haryana Grid Code as amended from time to time.

(b) Reactive energy charge shall be payable and shared as per regulation 5.5.1 of Haryana Grid Code (HGC) Regulation, 2009 as amended from time to time ;

(c) Reactive energy account shall be maintained and operated as per the intra-State ABT regulations to be notified by the Commission and as amended from time to time. Until the intra-State ABT regulations are notified by the Commission, CERC ABT regulations shall be applicable;

(d) The reactive energy charges from embedded open access consumers shall be recovered by the distribution licensee by apportioning the total reactive energy drawn during the month in the ratio of energy drawn through open access and the energy drawn from the distribution licensee. The reactive energy charges shall be recovered for the apportioned reactive energy corresponding to energy drawn through open access at the applicable rate.

In view of the above regulations the Commission holds that reactive energy

charge is a legitimate charge, the same is allowed to be recovered as per the

provisions of the regulations notified by this Commission.



3.6 Billing

The billing of transmission charges shall be in accordance with the HERC

Regulations, 2012 as reproduced below:

54. BILLING AND PAYMENT OF CHARGES

54.1 The State Transmission Utility shall raise bills for SLDC and

transmission charges payable by the beneficiaries on a monthly

basis. The STU shall raise bills for UI charges on weekly basis

as and when intra state ABT is implemented. UI accounting

procedures shall be governed by intra-state ABT regulations to

be notified by the Commission as amended from time to time.

The transmission tariff for wheeling, determined by the Commission in terms

of Rs./ kWh, shall be recoverable from the short term ‘open access’

customers availing HVPNL’s transmission system. The wheeling charges

recovered from short term customers, subject to 25% retention by HVPNL,

shall be reduced from the transmission charges to be recovered from the

distribution licensees.

3.7 Recovery of SLDC Expenses

The Commission has determined the ARR/ operating cost of SLDC for FY

2013-14 as per details provided in Chapter – 2 (Table 2.18) of the present

order at Rs. 46.88 million. Out this Rs. 0.8644 million shall be recoverable

from TPTCL and the balance from the Discoms. A total monthly recovery of

Rs. 0.072 million from TPTCL and Rs. 3.8341 million shall be made from the

two distribution licensees i.e. UHBVNL & DHBVNL in 50:50 proportion and

any other long term open access customers in the ratio of their

transformation capacity / load requirement in case no additional transformer

is required to be installed.



3.7.1 Short Term Open Access Consumers

The short-term open access consumers (if any) shall pay a composite fee

and charges as per HERC (Terms and Conditions for grant of connectivity and open access for intra – state transmission and distribution system) Regulations, 2012 dated 11th January, 2012.

3.7.2 SLDC Application Fee

The application fee shall be as per HERC (Terms and Conditions for grant of connectivity and open access for intra – state transmission and distribution system) Regulations, 2012 dated 11th January, 2012.

3.8 Incentive

HVPNL, for its transmission business, has claimed incentive on achieving

annual availability beyond 98% (target availability) as per formula approved

by the CERC.

The Commission observes that incentive, if any, shall be governed by HERC

Regulations, 2012. The relevant extract is reproduced below:

(c) Only for Transmission Licensee

(i) Availability- Applicable when actual availability falls below or exceeds the level specified by the Commission. The incentive for actual availability above target availability shall be worked out as per the following formula:

I = ATC X (AA – TA) / TA

Where I = Incentive ATC = Annual transmission charges AA = Annual availability achieved (actual) TA = Normative target availability.

Note 1: The incentive mechanism for availability shall be applicable

only when the transmission licensee submits detailed computation of the availability figures to the Commission and the Commission approves the same. The detailed computation will include all details of the input data, methods of recording the data (manual or through



electronic modes), formula used for computation and all other details required to establish the current level of availability.

While reporting the level of availability to the Commission, the transmission licensee shall enclose a certificate from the SLDC validating the indicated level of availability.

Note 2: For all purposes the ‘normative target availability factor’ shall

be considered for recovery of fixed charges. Any fall in the actual availability from the normative target availability shall result in pro-rata reduction of fixed charges.

3.9 Rebate / Late Payment Surcharge

HVPNL has proposed rebate / late payment surcharge as per provisions in

the Secretary, HERC memo no. 793-796/HERC dated 30/07/2008. The

Commission has considered the proposal and is of the view that the HERC

Regulations, 2012 notified by the Commission on 5.12.2012 provides the

modality for rebate / late payment surcharge. The relevant extract of the

regulations is reproduced below:

54.2 Rebate for early payment In case of early payment of bills of transmission and other

charges the rebate as under shall be admissible:

Days from the date of receipt of bills of transmission charges

Rebate (%)

0-7 2 8-14 1 15-21 0.5 22-30 0.25

54.3 Late payment surcharge

In case the payment of bills of transmission and other charges by the beneficiary is delayed beyond a period of 30 days from the date of receipt of bill, a late payment surcharge of 0.04% per day shall be payable by the beneficiary.

Thus the provisions as specified in the regulations as reproduced above

therein shall prevail.



The Commission shall also monitor the following in accordance with the

provisions of the Haryana Electricity Regulatory Commission (Terms and

Conditions for Determination of Tariff for Generation, Transmission, Wheeling

and Distribution & Retail Supply under Multi Year Tariff Framework)

Regulations, 2012. The relevant extract of the regulation is reproduced

below:

55. Quality of Supply The Commission shall monitor the following Quality of Transmission

parameters during the Control Period. a) Transmission System Availability

b) Transformer Failure across various capacities which represents the number of transformer failures as a percentage of the total number of transformers in that specified capacity within the Transmission System over a specified period of time.

c) System reliability

The Transmission Licensee in its Business Plan filings shall submit and propose the trajectory for the achievement of quality targets including reduction in the frequency of interruptions. The Commission shall specify the targets for each parameter. The Transmission Licensee shall submit its performance on each parameter in the form and manner specified by the Commission. In the case of frequency of interruptions being high the same will have bearing on the level of incentive allowed for availability. 56. Safety Standards

The Transmission Licensee shall develop a Safety Manual and follow procedure to maintain the safety standards during construction, operation, etc. in line with the provisions of CEA (Measures relating to Safety and Electric Supply) Regulations, 2010 as amended from time to time.

Any other issue not specifically dealt with in this order shall be governed by the provisions of the Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012 and other regulations notified by this Commission.


84 Conclusion

CONCLUSION

The Commission, under section 62 read with section 64(3) (a) and section

64(6) of the Act, issues this tariff order for FY 2013-14 determining the ARR

for transmission business and SLDC business of HVPNL, the transmission/

SLDC charges and the transmission tariff for short term open access

customers as per details given in the order and summarised as under:- a) The net ARR of HVPNL, for its transmission business, is determined

as Rs 5695.44 million for FY 2013-14.

b) The recovery of monthly transmission cost shall be Rs. 246.1888 million (UHBVNL), Rs. 228.4312 million (DHBVNL) and Rs. 8.6758 millions from TPTCL.

c) The Net ARR of HVPNL for its SLDC business is determined at Rs.

46.88 million (total recovery of Rs. 23.01 million from UHBVNL, Rs. 23.01 millions from DHBVNL and Rs. 0.8644 millions from TPTCL).

d) Transmission tariff / Wheeling Charges for short-term open access

consumers shall be Rs. 0.17/ kWh. e) Intra-state Transmission losses are pegged at 2.5% & Inter-state

transmission losses shall also be considered at 3.82 % for FY 2013-14.

The licensee shall implement the tariff and charges contained in this order

with effect from 1st April 2013. This order is signed, dated and issued by the Haryana Electricity

Regulatory Commission on 29th March, 2013.

Date: 29th March, 2013. Place: Panchkula.

(Ram Pal) (Rohtash Dahiya) (R.N. Prasher) Member Member Chairman

commission's order on aggregate revenue...

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