msldc mid-term review petition for for fy 2018-19 to fy ...€¦ · msldc mid-term review petition...
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MSLDC Mid-Term Review Petition
For
Truing up of Budget Cost of Operation for FY 2015-16 & 2016-17,
Provisional truing-up for FY 2017-18 and
ARR forecast and determination of Fees and Charges
For FY 2018-19 to FY 2019-20
Submitted to
Maharashtra Electricity Regulatory Commission
Mumbai
By
Maharashtra State Load Despatch Centre
(Maharashtra State Electricity Transmission Company Ltd.)
Kalwa
2nd January, 2018
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 2
Table of Contents
1 Background ..................................................................................................................................... 6
2 Approach for the filing .................................................................................................................... 7
3 True-up for FY 2015-16 .................................................................................................................. 8
3.1 Operating Cost Budget ............................................................................................................ 8
3.2 Capital Charge Budget .......................................................................................................... 14
3.3 Revenue True-up for FY 2015-16 ......................................................................................... 20
3.4 Summary of True-Up for FY 2015-16 .................................................................................. 21
4 Operational performance of SLDC during the 3rd Control Period ................................................ 22
5 True-up for FY 2016-17 ................................................................................................................ 27
5.1 Operation & Maintenance ..................................................................................................... 27
5.2 Interest on Working Capital .................................................................................................. 28
5.3 RLDC Fees & WRPC Charges ............................................................................................. 30
5.4 Capitalization ........................................................................................................................ 30
5.5 Depreciation .......................................................................................................................... 32
5.6 Interest & Financial Charges................................................................................................. 33
5.7 Return on Equity ................................................................................................................... 34
5.8 Reactive Energy Charges Paid / Income from Reactive Energy Charges ............................. 35
5.9 Income Tax ........................................................................................................................... 36
5.10 Non-Tariff Income ................................................................................................................ 36
5.11 Income from Open Access Charges ...................................................................................... 38
5.12 Income from Monthly Operating Charges ............................................................................ 38
5.13 Summary of True-Up for FY 2016-17 .................................................................................. 39
6 Provisional True-Up for FY 2017-18 ............................................................................................ 41
6.1 Operation & Maintenance ..................................................................................................... 41
6.2 Interest on Working Capital .................................................................................................. 47
6.3 RLDC Fees & WRPC Charges ............................................................................................. 48
6.4 Capital Expenditure Plan and Capitalization ........................................................................ 48
6.5 Depreciation .......................................................................................................................... 51
6.6 Interest & Financial Charges................................................................................................. 52
6.7 Return on Equity ................................................................................................................... 55
6.8 Reactive Energy Charges ...................................................................................................... 56
6.9 Income Tax ........................................................................................................................... 56
6.10 Non-Tariff Income ................................................................................................................ 56
6.11 Income from Open Access Charges & Monthly Operating Charges .................................... 57
6.12 Income from Monthly Operating Charges ............................................................................ 58
6.13 Summary of True-Up for FY 2017-18 .................................................................................. 58
7 Revised ARR for FY 2018-19 to FY 2019-20 .............................................................................. 60
7.1 Operation & Maintenance ..................................................................................................... 60
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 3
7.2 Interest on Working Capital .................................................................................................. 63
7.3 RLDC Fees & WRPC Charges ............................................................................................. 64
7.4 Capital Expenditure Plan and Capitalisation......................................................................... 65
7.5 Depreciation .......................................................................................................................... 69
7.6 Interest & Financial Charges................................................................................................. 70
7.7 Return on Equity ................................................................................................................... 71
7.8 Reactive Energy Charges paid / Income from Reactive Energy Charges ............................. 71
7.9 Income Tax ........................................................................................................................... 72
7.10 Non-Tariff Income ................................................................................................................ 72
7.11 Income from Open Access Charges ...................................................................................... 72
7.12 Impact of truing up and provisional truing up ...................................................................... 73
7.13 Summary of ARR for Control Period from FY 2018-19 to FY 2019-20 .............................. 73
8 Sharing of MSLDC Charges ......................................................................................................... 75
9 Fees to be charged by MSLDC ..................................................................................................... 77
9.1 Registration or Connection Fees ........................................................................................... 78
9.2 Scheduling and Re-Scheduling Fees ..................................................................................... 78
9.3 Short Term Open Access Application Processing Fees ........................................................ 78
9.4 Renewable Energy Certificate Processing Fees .................................................................... 78
10 Compliance to Directives .......................................................................................................... 79
10.1 Ring-fencing and Autonomy ................................................................................................. 79
10.2 Manpower Development ....................................................................................................... 80
10.3 Technology and Operational Systems Upgradation .............................................................. 82
10.4 Incentive Schemes ................................................................................................................ 86
10.5 Vacancies .............................................................................................................................. 86
10.6 Project Planning .................................................................................................................... 87
10.7 Preparedness of SLDC in handling future challenges ........................................................... 88
10.8 Reactive Energy Charges ...................................................................................................... 91
11 Prayers....................................................................................................................................... 92
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 4
List of Tables Table 1: Employee Expenses for FY 2015-16 ........................................................................................ 8 Table 2: A&G Expense for FY 2015-16 ............................................................................................... 10 Table 3: R&M Expense for FY 2015-16 .............................................................................................. 10 Table 4: O&M Expenses for FY 2015-16 ............................................................................................. 11 Table 5: Sharing of Gains and Loss on account of O&M Expenses for FY 2015-16 ........................... 11 Table 6: Interest on Working Capital for FY 2015-16 .......................................................................... 12 Table 7: RLDC Fee & WRPC Charges for FY 2015-16 ...................................................................... 14 Table 8: Capitalization for FY 2015-16 ................................................................................................ 14 Table 9: Depreciation for FY 2015-16 .................................................................................................. 18 Table 10: Details of Existing Loans allocated to MSLDC by MSETCL .............................................. 18 Table 11: Interest on Loan .................................................................................................................... 19 Table 12: Return on Equity ................................................................................................................... 19 Table 13: Revenue Components for FY 2015-16 ................................................................................. 20 Table 14: Final True-Up for FY 2015-16 ............................................................................................. 21 Table 15: ADMC for FY 2014-15 to FY 2016-17 ................................................................................ 25 Table 16: Breakup of Operation and Maintenance Expenses for FY 2016-17 ..................................... 27 Table 17: Operation and Maintenance Expenses for FY 2016-17 ........................................................ 28 Table 18: Sharing of Gains and Loss on account of O&M Expenses for FY 2016-17 ......................... 28 Table 19: Interest on Working Capital for FY 2016-17 ........................................................................ 29 Table 20: RLDC Fee & WRPC Charges for FY 2016-17 .................................................................... 30 Table 21: Capitalization for FY 2016-17 .............................................................................................. 30 Table 22: Depreciation for FY 2016-17 ................................................................................................ 33 Table 23: Details of Existing Loans allocated to MSLDC by MSETCL .............................................. 33 Table 24: Interest on Loan .................................................................................................................... 34 Table 25: Return on Equity ................................................................................................................... 35 Table 26: Non-Tariff Income for FY 2016-17 ...................................................................................... 37 Table 27: Income from Open Access charges for FY 2016-17 ............................................................ 38 Table 28: Income from Monthly Operating Charges for FY 2016-17 .................................................. 38 Table 29: Final True-Up for FY 2016-17 ............................................................................................. 39 Table 30: O&M Expenses for FY 2017-18 ........................................................................................... 43 Table 31: Employee Expenses for FY 2017-18 .................................................................................... 45 Table 32: A&G Expenses for FY 2017-18 ........................................................................................... 46 Table 33: R&M Expenses for FY 2017-18 ........................................................................................... 46 Table 34: O&M Expenses for FY 2017-18 ........................................................................................... 47 Table 35: Interest on Working Capital for FY 2017-18 ........................................................................ 48 Table 36: RLDC Fee & WRPC Charges for FY 2017-18 .................................................................... 48 Table 37: Revised Capex and Capitalisation for FY 2017-18 .............................................................. 49 Table 38: Revised Capex and Capitalisation for FY 2017-18 .............................................................. 50 Table 39: Depreciation for FY 2017-18 ................................................................................................ 52 Table 40: Details of Existing Loans allocated to MSLDC by MSETCL .............................................. 54 Table 41: Interest on Loan for FY 2017-18 .......................................................................................... 55 Table 42: Return on Equity for FY 2017-18 ...................................................................................... 56 Table 43: Non-Tariff Income for FY 2017-18 ...................................................................................... 57 Table 44: Income from Open Access charges for FY 2017-18 ............................................................ 58 Table 45: Income from Monthly Operating Charges for FY 2017-18 .................................................. 58 Table 46: Summary of Provisional True-up of FY 2017-18 ................................................................. 58 Table 47: O&M Expenses for Control Period ...................................................................................... 60 Table 48: Detailed O&M Expenses for Control Period ........................................................................ 62 Table 49: Interest on Working Capital for Control Period ................................................................... 63 Table 50: RLDC Fee & WRPC Charges for Control Period ................................................................ 64 Table 51: Projected Capitalization for FY 2018-19 .............................................................................. 67 Table 52: Projected Capitalization for 2019-20 .................................................................................... 68 Table 53: Depreciation Estimated for New Control Period .................................................................. 69
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 5
Table 54: Details of Existing Loans allocated to MSLDC by MSETCL .............................................. 70 Table 55: Interest on Loan for FY 2018-19 to FY 2019-20 .................................................................. 70 Table 56: Return On Equity estimated for FY 2018-19 & FY 2019-20 ............................................... 71 Table 57: Non-Tariff Income estimated for FY 2018-19 & FY 2019-20 ............................................. 72 Table 58: Income from Open Access Charges for FY 2018-19 & FY 2019-20 ................................... 72 Table 59: Impact of truing up Amortized over FY 2018-19 to FY 2019-20 ........................................ 73 Table 60: Summary of Annual Fixed Charges for FY 2018-19 to FY 2019-20 ................................... 73 Table 61: List of TCRs sharing MSLDC Charges for FY 2016-17 ...................................................... 75 Table 62: Base Transmission Capacity Rights for FY 2016-17 and sharing ........................................ 76 Table 63: Projected Base Transmission Capacity Rights for FY 2018-19 to FY 2019-20 ................... 76 Table 64: Sharing of MSLDC Charges for FY 2018-19 to FY 2019-20 .............................................. 76 Table 65: Proposed MSLDC Charges for FY 2018-19 to FY 2019-20 ................................................ 77
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 6
1 Background
Maharashtra State Load Despatch Centre (MSLDC) is the apex body for integrated operation
of electricity grid in the State of Maharashtra and constituted under Section 31 of the
Electricity Act (EA), 2003. MSLDC operates from two centres i.e. at Kalwa and Ambazari
(Nagpur) in Maharashtra and an additional sub-LDC Mumbai, which now shifted to MSLDC
Control room and being operated through separate desk.
In accordance with the first proviso to Section 31(2) of the EA 2003, the Maharashtra State
Electricity Transmission Company Limited (MSETCL), which is the State Transmission
Utility (STU) in the State of Maharashtra, operates the MSLDC.
The Hon’ble Commission notified the MERC (Multi Year Tariff) Regulations 2015(the MYT
Regulations 2015) on 8 December, 2015 in exercise of the powers conferred by Section 181
(2) read with Sections 36, 39, 40, 41, 51, 61, 62, 64, 65 and Section 86 of the Electricity Act,
2003. These Regulations are applicable for Control Period from 1 April, 2016 to 31 March,
2020. In accordance with the provisions of the MYT Regulations, 2015, MSLDC is required
to submit the Multi Year Tariff for Commission’s approval.
MSLDC filed a Petition on 29 January, 2016 for approval of truing up of Budget of Cost of
Operations for FY 2014-15, provisional truing-up for FY 2015-16 and ARR forecast and fees
and charges for FY 2016-17 to FY 2019-20; with reference to Section 32 of the EA, 2003,
previous Orders of the Commission on MSLDC’s Operating and Capital Charges; applicable
provisions of the MERC (Multi Year Tariff) Regulations 2011 (the MYT Regulations, 2011);
the MERC (Multi Year Tariff) Regulations 2015 (the MYT Regulations 2015) and
Regulation 18.9 of the MERC (Transmission Open Access) Regulations, 2014 (the
Transmission OA Regulations). The Commission after due consideration had issued the
Order in the matter of Truing up of Budget of Cost of operations for FY 2014-15, Provisional
Truing-Up for FY 2015-16 and ARR forecast and determination of Fees and Charges for FY
2016-17 to FY 2019-20 on 22 July 2016 herein referred to as MSLDC MYT Order (Case No.
20 of 2016).
In accordance with the provisions of the MYT Regulations, 2015, MSLDC is required to
submit the Mid-Term Review for Commission’s approval.
In accordance with Regulations 8.1 of the MYT Regulations, 2015, MSLDC is filing present
Petition for:
a) Approval of Truing-up of Budget Cost of MSLDC for FY 2015-16
b) Approval of Truing-up of Annual Fixed Cost of MSLDC for FY 2016-17.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 7
c) Provisional Truing-up of Annual Fixed Cost of MSLDC for FY 2017-18
d) Approval of revised ARR forecast for FY 2018-19 to FY 2019-20 and Determination
of Fees and Charges for FY 2018-19 to FY 2019-20
MSLDC is filing this detailed Mid-term Review Petition for 3rd Control Period, before the
Hon’ble Commission and has made all efforts to provide the necessary data.
2 Approach for the filing
The present filing for the truing-up for FY 2015-16 is based on applicable provisions of the
MERC (Multi Year Tariff) Regulations, 2011 (The MYT Regulations, 2011). Filing for the
truing-up for FY 2016-17 and for the provisional truing-up for FY 2017-18 is based on
applicable provisions of the MERC (Multi Year Tariff) Regulations, 2015 (The MYT
Regulations, 2015).
Filing for each year of the Control Period is from FY 2018-19andFY 2019-20 is based on
applicable provisions of the MERC (Multi Year Tariff) Regulations, 2015 (the MYT
Regulations, 2015) and other relevant Regulations.
The detailed methodology adopted for the preparation of MSLDC Petition is discussed in the
subsequent sections.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 8
3 True-up for FY 2015-16
MSLDC humbly submit that Audited Accounts and Allocation Statement for FY 2015-16
have been finalized, has been attached to the Petition as Annexure- 2. MSLDC therefore
seeks true- up of operating and capital cost budget and SLDC revenue components for FY
2015-16 as per the Audited Accounts/principles laid down in the previous Orders of the
Commission on MSLDC’s Operating Cost Budget and Capital Charge Budget, as applicable
for various heads of expenditure/revenue. Further, all computations are also presented in
spreadsheet data formats stipulated by the Commission for submission of MYT Petition,
which are separately submitted in a computer readable file along with this Petition. The same
has also been attached to the Petition as Annexure- 1.
The copy of Auditor Certified Trial Balance for FY 2015-16 & FY 2017-18 has been
enclosed as Annexure- 11 in the Petition.
MSLDC has provided detailed rationale for truing up and key issues in the subsequent
paragraphs.
3.1 Operating Cost Budget
3.1.1 Operation & Maintenance Expenses
Operations and Maintenance Expenses consist of following expenditure heads;
a) Employee Expenses
b) Administration and General Expenses
c) Repairs and Maintenance Expenses
The detailed expenses under the above mentioned heads and the rationale for the expenses
have been discussed in detail as follows:
a) Employee Expenses
The Employee expense approved by the Hon’ble Commission in Case No. 20 of 2016 and
actual Employee expenses incurred by MSLDC is shown in table below:
Table 1: Employee Expenses for FY 2015-16
(Rs. Lakh)
Particulars Approved in Case No.
20 of 2016 Actual
Employee Expenses 1468.76 1442.89
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 9
The actual Employee Expenses for FY 2015-16 are Rs. 1442.89 Lakh as per the Audited
Accounts, which are marginally lower than Rs. 1468.76 Lakh approved by the Hon’ble
Commission. The actual Employee Expenses includes Wage Arrears of Rs. 137.12 Lakhs for
both Kalwa and Ambazari, the details of Wage Arrears for FY 2015-16 is annexed as
Annexure 12.
Further, there exists a variation in the Employee Expense claimed in the Petition against
Audited Allocation Statement to the tune of Rs. 2.5 Lakhs. The same amount pertains to
shifting of Training Expenses, which was categorised under Staff Welfare Expenses for the
year and included under Employee Expenses considered for the Audited Allocation
Statement. Owing to the nature of such expenses the same was included under A&G
Expenses.
MSLDC humbly requests the Hon’ble Commission to approve the employee expenses as
claimed in this Petition. The details of Employee Expenses provided in Form 2.2 of MTR
Petition Formats, annexed as Annexure 1.
b) Administrative and General Expenses
The Administrative and General Expenses (A&G) includes the following major heads:
Rent, Rates and Taxes;
Insurance;
Revenue Stamp Expenses, Telephone, Postage & Telegrams;
Legal Charges;
Technical Fees, Consultancy and Other Professional Charges;
Conveyance and Travel;
Electricity charges;
Vehicle Running Expenses i.e., Petrol and Oil & Vehicle Hiring Expenses;
Security/Service Charges Paid to Outside Agencies for safety & protection;
IT and Communication related expenses
Other Charges:
o Fee and Subscriptions - Books and Periodicals
o Printing and Stationery
o Advertisement Expenses
o Water Charges
o Upkeep of Office Premises
o Miscellaneous Expenses
The actual A&G Expenses for FY 2015-16 as per audited accounts are Rs. 636.35 Lakh as
against Rs. 657.63 Lakh approved by the Hon’ble Commission. However, it is submitted that
the actual A&G expenses for FY 2015-16 of Rs. 636.35 Lakh are marginally lower as
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 10
compared with expenses of A&G expenses approved in Case 20 of 2016 for FY 2015-16 of
Rs. 657.63 Lakh. Accordingly, MSLDC requests the Hon’ble Commission to approve A&G
expenses for FY 2015-16 based on actuals.
The A&G Expense approved by the Hon’ble Commission in Case No. 20 of 2016 and actual
A&G expenses incurred by MSLDC shown in Table below:
Table 2: A&G Expense for FY 2015-16
(Rs. Lakh)
Particulars Approved in Case No.
20 of 2016 Audited
A&G Expenses 657.63 636.35
As explained under Employee Expenses head, Training Expenses of Rs. 2.5 Lakhs was
shifted from Employee Expenses to A&G Expenses. Thus, to this extent, A&G Expenses
claimed under Petition are higher than that appearing in Audited Allocation Statement.
The details of Administrative and General Expenses provided in Form F2.3 of MTR Petition
Formats, annexed as Annexure 1.
c) Repairs and Maintenance Expenditure
The actual R&M Expenses for FY 2015-16 as per the Audited Accounts are Rs.102.88 Lakh
as against Rs. 135.00 Lakh approved in Case No. 20 of 2016 by the Hon’ble Commission.
The R&M Expense approved by the Hon’ble Commission in Case No. 20 of 2016 and actual
R&M expenses incurred by MSLDC shown in the following Table:
Table 3: R&M Expense for FY 2015-16
(Rs. Lakh)
Particulars Approved in Case No.
20 of 2016 Actual
R&M Expenses 135.00 102.88
The details of Repair and Maintenance Expenditure provided in Form F2.4of MTR Petition
Formats.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 11
The broad breakup of R&M expenditure incurred and as reported under the head of ‘Plant &
Machinery’, attached separately in the Annexure- 3. The Commission is requested to allow
the actual expenses for FY 2015-16.
Operation and Maintenance (O&M) expenses
The Operation and Maintenance (O&M) expenses approved by the Hon’ble Commission for
FY 2015-16 in Case No. 20 of 2016 and the actual expenses incurred by MSLDC as per
Audited Accounts are summarized in Table as below:
Table 4: O&M Expenses for FY 2015-16
(Rs. Lakh)
Particulars Approved in Case
No. 20 of 2016 Actual
Employee Expenses 1468.76 1442.89
A&G Expenses 657.63 636.35
R&M Expenses 135.00 102.88
Operation and Maintenance Expenses 2261.39 2182.12
MSLDC humbly request the Hon’ble Commission to approve Operation and Maintenance
expenses as claimed in this Petition.
The Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2015
under Regulation 8.4 (a) specifies as under:
“8.4 ……
(a) the approved aggregate gain or loss to the Generating Company or
Licensee or MSLDC on account of controllable factors for the Years 2015-16
and 2016-17 and provisional Truing-up for the Year 2017-18, and the amount
of such gains or such losses that may be shared in accordance with Regulation
11;”(Emphasis Added)
Further, as per Regulation 12.2 of the MYT Regulations, 2011, variation in O&M expense
corresponding to approved value are categorised as controllable expenses. Thus, impact of
sharing of gains/loss has been considered on this account for FY 2015-16 and the same is
presented in the following table.
Table 5: Sharing of Gains and Loss on account of O&M Expenses for FY 2015-16
(Rs. Lakh)
Particulars
O&M Expenses Approved under Case No. 20 of 2016 2261.39
Actual O&M expense 2182.12
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 12
Particulars
Total Gain/(Loss) on account of controllable factors 79.27
Sharing proposed 26.42
3.1.2 Interest on Working Capital
The methodology specified in the MYT Regulations, 2011 has been considered for
calculation of Interest on Working Capital(IoWC) for FY 2015-16. Further, in line with the
Hon’ble Commission’s directive in Order dated 16 May, 2006 in Case No. 30 of 2005, the
Operating Cost Budget alone has been considered for calculation of IoWC. The relevant
extract of aforementioned Order is reproduced as below:
“34. ......
...Accordingly, receivables corresponding to operating cost budget only need to be
accounted for.”
Therefore, MSLDC in this Petition has considered receivable only corresponding to the
Operating Budget.
It is respectfully submitted that the IoWC shall be payable on normative basis
notwithstanding that MSLDC has not taken any working capital loan from any outside
agency.
For FY 2015-16, the interest rate used by the Hon’ble Commission for calculation of interest
on Working Capital in the Order in Case No. 20 of 2016 has been considered. The Interest on
Working Capital approved by the Hon’ble Commission for FY 2015-16 in Case No. 20 of
2016 and normative interest on Working Capital is shown in Table below:
Table 6: Interest on Working Capital for FY 2015-16
(Rs. Lakh)
Particulars Approved in Case
No. 20 of 2016 Actual
Interest on Working Capital 94.92 93.11
MSLDC submits that, there is no actual borrowings/loan taken for meeting its working
capital requirements.
The Hon’ble Commission is requested to allow Interest on Working Capital for FY 2015-16
as above. The detailed computation of normative interest on working capital has been given
in the Form 6 of MTR Petition Formats.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 13
3.1.3 RLDC Fees and Western Region Power Committee (WRPC) Charges
The Hon’ble Commission in its Order in Case 30 of 2005, dated 16 May, 2006 had directed
that all costs, fees and charges pertaining to Regional Load Despatch Centre (RLDC) related
activities should form part of MSLDC Budget and should be recovered under the head RLDC
fees and charges as may be notified by the Commission from time to time. The relevant
extract of the said Order is reproduced as following.
“35. MSETCL has not claimed any charges towards RLDC fees and charges. The
Commission is of the opinion that as per Section 32(2) of EA 2003, SLDC is required
to exercise supervision and control of intra-State transmission system, co-ordinate
with RLDC in the process and is also required to ensure compliance of the directions
issued by RLDC as per Section 29 (3) of EA 2003. Hence, all costs, fees and charges
pertaining to RLDC related activities should form part of SLDC Budget and should be
recovered through RLDC fees and charges as may be notified by the Commission
from time to time. Accordingly, for the purpose of SLDC Budget for FY 2006-07, the
Commission has estimated RLDC related fees and charges forming part of SLDC
Budget as under.”
The charges towards RLDC Fees are being paid by MSEDCL against the invoices raised by
RLDC to MSEDCL. After payment, MSEDCL claims that charges from MSLDC and the
same are being paid by MSLDC to MSEDCL. The Central Electricity Regulatory
Commission (CERC) has issued an Order in Case No. 241/TT/2015, dated 26thDecember,
2016 approving Fees and Charges of WRLDC for the FY 2014-15 to FY 2018-19.
RLDC Fees during FY2015-16is Rs. 658.35 Lakh as against Rs. 627.03 Lakh approved in
Case No. 20 of 2016, MSEDCL has reimbursed this amount from MSLDC through three
different transactions and informed MSLDC vide 1stletter dated 3 February, 2016 for the
month of April 2015 to October 2015, vide 2ndletter dated8 March, 2016 for the month of
November 2015 to December 2015 and vide 3rdletter dated23 June, 2016 for January 2016 to
March 2016. As the provision made by MSLDC, these RLDC Fees and Charges have
exceeded by Rs. 31.32 Lakh, the same is requested to the Hon’ble Commission to approve as
per actuals.
As regards WRPC Secretariat Charges, as per WRPC share of SLDC along with each
constituent works out to be Rs. 9.72 Lakhs. The actual payment made on account of RLDC
Fees and Charges during FY 2015-16 was as follows:
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 14
Table 7: RLDC Fee & WRPC Charges for FY 2015-16
(Rs. Lakh)
Particulars Approved in Case No. 20
of 2016 Actual
RLDC Fees 627.03 648.63
WRPC Secretariat Charges 9.72
Total 627.03 658.35
Accordingly, MSLDC requests the Hon’ble Commission to approve RLDC Fees and WRPC
Charges for FY 2015-16 on actual basis. The details of RLDC Fees and WPRC Charges are
also provided in Form F7of MTR Petition Formats.
3.2 Capital Charge Budget
3.2.1 Capital Expenditure and Capitalisation
MSLDC in its ARR Petition in Case No. 20 of 2016, for approval of Budget Cost of
Operations, projected a capitalisation of Rs. 566.87 Lakh for FY 2015-16. The Hon’ble
Commission had approved capitalisation amount of Rs. 344.75 Lakh for FY 2015-16.
However, upon completion of the FY 2015-16, the actual capitalisation was Rs. 152.83 Lakh.
The breakup of actual capitalisation as DPR and Non-DPR schemes is as shown in the Table
below:
Table 8: Capitalization for FY 2015-16
(Rs. Lakh)
Sr. No. Project Title Actual
Capitalization
DPR Schemes
1
Replacement of existing RTUs and commissioning of
additional RTUs & DCs for Load Despatch Centre at Kalwa
and Ambazari
36.69
2 Hardware/Software for SCADA system 35.12
3 Enhancement of real time data acquisition- Procurement of
Hardware &Software licenses 3.83
Total DPR 75.64
Non-DPR Schemes
4 Enhancement of real time data acquisition 45.14
5
Infrastructure Development (Interior & Furnishing, Air
Conditioning, Security Systems, Testing equipment& tools,
Furniture, Auxiliary supplies, etc.)
32.05
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 15
Sr. No. Project Title Actual
Capitalization
Total Non-DPR 77.19
Total Schemes Capitalization 152.83
MSLDC submits that actual Capitalisation in FY 2015-16 is lower than the Capitalisation
approved by the Hon’ble Commission in Order in Case No. 20 of 2016. The decrease in
capitalisation in FY 2015-16 is attributable to reduced/nil capitalisation towards few schemes
that were proposed during FY 2015-16, which however got capitalised in the subsequent
years. Two DPR schemes which have been completed and capitalised fully during the year
are a) Replacement of existing RTUs and commissioning of additional RTUs & DCs for
Load Despatch Centre at Kalwa and Ambazari and b) Enhancement of real time data
acquisition- Procurement of Hardware & software licenses. The requisite details of the said
schemes are submitted in the CBA enclosed as Annexure-13. The details of time over-
run/cost over-run, if any of the DPR schemes are enclosed as Annexure-14.
As regards the scheme, “Erection, Testing & Commissioning 22/0.44 kV Indoor Type S/S for
New Building of SLDC at MSLDC Kalwa”, capitalization was claimed during FY 2015-16,
based on the accounting/internal practice followed by MSLDC despite the fact that final
commissioning of the scheme happened only during FY 2015-16. However, based on the
provisions of the MYT Regulations, 2011 and MYT Regulations, 2015, the capitalization
towards the entire scheme is now claimed only in FY 2016-17, where the indoor substations
were fully commissioned. To this extent, it may be noted that the capitalization/asset addition
in the audited TB for FY 2015-16 and TB for FY 2016-17 would differ. MSLDC further
would like to confirm that all other assets which have been considered to be capitalized in FY
2015-16 have been put to use as per the requirement under the Regulations.
In addition to the above, various non-DPR schemes as shown in the table above also got
capitalized during the year. MSLDC humbly requests the Hon’ble Commission to allow the
actual capitalisation of Rs. 152.83 Lakh for FY 2015-16.
As regards capitalisation towards, non-DPR schemes MSLDC would like to humbly submit
that the schemes capitalised within MSLDC are mostly of low value schemes (less than Rs.
100 Lakhs), and includes capitalisation of items procured on an intermittent basis such as
Furniture for Office, Fire Alarm System, Battery Sets with Charger, Online STOA
software/hardware, Office equipment including Servers, PCs, Printers, Laptop, Xerox
machine, Firewalls, Routers, LAN Components, cables, switches, etc. Thus, considering the
varied and intermittent nature of asset addition of lower value, it is difficult to club the same
under DPR scheme. Besides, the capitalisation towards non-DPR schemes as shown in the
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 16
table above is actually capitalised and based on Audited Accounts of FY 2015-16. In this
context the MSLDC humbly submit to the Hon’ble Commission to allow the capitalisation
for FY 2015-16 at actual.
The details of the actual Capital Expenditure and Capitalisation for FY 2015-16 are provided
in Form F 3.3of the MTR Petition Formats, submitted along with this filing.
3.2.2 Financial Restructuring Plan (FRP) of MSEB Companies and Tariff Impact
As per the provisions of the Electricity Act, 2003, the restructuring of erstwhile MSEB was
approved in the Cabinet meeting held on 20.05.2005 and notified vide GR No.
Reform/1002/pr/kra/9061/Urja-a5 (hereinafter referred as the Transfer Scheme) dated
07.06.2005. The first amendment to the Transfer scheme was notified on 31 March, 2016. In
this context, Government of Maharashtra (GoM) issued following directions on FRP. Some
of the directives are reproduced as under.
a) The GoM directed that with effect from 4th June 2005 all property, interest in
property, rights and liabilities which immediately before the said date vested in the
MSEB, shall be vested with the State Government and the State Government shall
transfer the said properties to the successor companies viz. Maharashtra State
Electricity Distribution Company Limited (MSEDCL), Maharashtra State Electricity
Transmission Company Limited (MSETCL), Maharashtra State Power Generation
Company Limited (MSPGCL and Maharashtra State Electricity Board Holding Co.
Ltd (MSEBHCL) with effect from 6th June, 2005.
b) The assets of MSEB to be revalued and revaluation to be done in such a manner that
the tariff is not adversely affected.
Based on the above, a revaluation exercise has been undertaken and has been completed.
Accordingly, the asset of MSEBHCL, MSPGCL, MSETCL and MSEDCL has been carried
out. As part of asset revaluation of MSETCL, the assets of MSLDC has also been revalued.
Regulation 27.9 of the MERC MYT Regulations, 2011 as well as Regulation 23.10 of the
MERC MYT Regulations, 2015 permits revaluation of assets. However, such revaluation is
permitted subject to the condition that it doesn’t result in any tariff increase. The relevant
extract of the said Regulations, is reproduced as under.
MERC MYT Regulations, 2011
“27.9 Revaluation of assets shall be permitted during the Control Period provided it
does not affect tariff adversely.”
MERC MYT Regulations, 2015
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 17
“23.10 The impact of revaluation of assets shall be permitted provided it does not
resulting in increase in Tariff of the Generating Company or Licensee:”
In order to avoid any adverse impact of tariff/MSLDC charges, no claim is made on
additional RoE on increased equity arising out of increased value of assets as part of
revaluation. Secondly, on the same lines, additional depreciation owing to FRP has not
been considered while working out the Tariff/MSLDC charges in the present Petition.
The same in bought to the kind notice of the Hon’ble Commission.
3.2.3 Depreciation
MSLDC submits that depreciation for FY 2015-16 has been computed considering the
depreciation rates in accordance with the MERC MYT Regulations, 2011 in the books of
accounts of MSETCL and the same has been considered for the assets of MSLDC. The assets
related to MSLDC have been identified along with the depreciation on the same.
MSLDC in its Petition under Case No. 20 of 2016 has claimed a depreciation of Rs. 444.12
Lakh against which the Hon’ble Commission approved depreciation of Rs. 271.51 Lakh in
the said Order. MLSDC submits that the actual depreciation for FY 2015-16 for truing up is
Rs.304.42 Lakh. It is humbly submitted that the actual depreciation for FY 2015-16 considers
the impact of the asset Computer Software/IT equipment which was recognized by the
Hon’ble Commission as an ‘IT Equipment’ and had approved the depreciation at 15% in
accordance with the MYT Regulation, 2011. MSLDC further submits that the same has been
considered under the IT Equipment and MSLDC has accounted depreciation at the same
depreciation rate of 15% as approved by the Hon’ble Commission in Case No. 20 of 2016.
Besides, the actual depreciation reported for FY 2015-16 in the audited allocation statement
considers impact of capitalisation of the DPR scheme indoor substation in respective years.
However, based on the provisions of the MYT Regulations, 2011, the capitalisation towards
the entire scheme is now claimed in the FY 2016-17, where the indoor substations were fully
commissioned. In this context, it may be noted that the depreciation in the audited TB for FY
2015-16 and the present claim for truing up would differ.
Further, as highlighted in the above paragraph, MSLDC has not claimed any additional
depreciation on account of FRP scheme.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 18
Table 9: Depreciation for FY 2015-16
(Rs. Lakhs)
Particulars
Approved in
Case No. 20 of
2016
Actual
Depreciation 271.51 304.42
The details of the Fixed Assets and depreciation for FY 2015-16 have been provided in Form
F4of MTR Petition Formats.
3.2.4 Interest and Finance charges
The interest on the existing actual loan for MSLDC has been apportioned as Rs. 7.29 Lakh
for FY 2015-16from MSETCL’s Books of Accounts as in Case No. 20 of 2016.
For the purpose of estimation of Interest Cost corresponding to new loans for new Capital
Expenditure Schemes, the Hon’ble Commission in its Order dated 16 May, 2006 under the
Clause 29 had suggested to consider Interest Costs based on normative debt-equity of 70:30
in line with MERC (Multi Year Tariff) Regulations, 2011. The same approach has been
considered to calculate the addition to the normative loan amount for FY 2015-16. Further,
MSLDC has considered the weighted average interest rate of the actual loan portfolio of
MSLDC for computing the interest expenses for FY 2015-16 as per MERC MYT
Regulations, 2011. Further, in accordance with the approach adopted by the Hon’ble
Commission, the repayment of the normative loan has been considered as 10 years, with
repayment being started from the second year of loan admitted.
The details of existing loans allocated to MSLDC by MSETCL are as under:
Table 10: Details of Existing Loans allocated to MSLDC by MSETCL
(Rs. Lakh)
Sr.
No. Particulars FY 2015-16
PFC Loan No. 21603009
1 Opening Balance 73.74
2 Repayment during the Year 22.69
3 Closing Balance 51.05
4 Rate of Interest 12.25%
5 Interest Chargeable during the Year 7.29
The interest on Loan for FY 2015-16 is shown in Table as below:
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 19
Table 11: Interest on Loan
(Rs. Lakh)
Particulars
FY 2015-16
MERC Order
( Case No. 20 of 2016) Actual
Interest on Loan 202.52 305.75
MSLDC submits that the rate of Interest considered in the Petition is as per the interest rate of
the actual loan borrowed from PFC by MSETCL and which was further allocated to MSLDC.
MSLDC has enclosed the proof of actual loan allocated to MSLDC in its Revised Petition
which is annexed as Annexure 15
MSLDC humbly requests the Hon’ble Commission to approve above expenses towards
Interest on Loan. The details of the interest of loan for FY 2015-16 have been provided in
Form F5 of MTR Petition Formats.
3.2.5 Return on Equity
MSLDC has worked out the Return on Equity (RoE) for FY 2015-16 in accordance with the
Regulation 32 of the MYT Regulations, 2011. Further, 30% of the capitalization during a
year has been considered for addition in equity during a year.
MSLDC would like to submit to Hon’ble Commission that the Return on Equity for the FY
2015-16 have been calculated as per the capitalisation during the year. Further, in accordance
with the MYT Regulations, 2011, rate of 15.5% have been considered for computing RoE.
Hence, the Return on Equity would amount to Rs. 224.26 Lakh for FY 2015-16.
The Return on Equity for FY 2015-16 is shown in Table as below:
Table 12: Return on Equity
(Rs. Lakh)
Particulars
FY 2015-16
MERC Order
( Case No. 20 of 2016) Actual
Return on Equity 178.99 224.26
MSLDC submits that RoE for FY 2015-16 is higher than approved RoE in Case No. 20 of
2016 because of difference of GFA, owing to disallowance in the past as compared to the
approved capitalisation by the Hon’ble Commission in Case No. 20 of 2016.
MSLDC humbly requests the Hon’ble Commission to approve above expenses towards
Return on Equity. The details of the Return on Equity for FY 2015-16 have been provided in
Form F10of MTR Petition Formats.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 20
Further, as highlighted in the above paragraph, MSLDC has not claimed any additional RoE
on account of FRP scheme.
3.3 Revenue True-up for FY 2015-16
For FY 2015-16, the Hon’ble Commission in Case No. 20 of 2016 had provisionally
approved revenue of MSLDC on account of Income from Annual SLDC Fees’ of Rs. 675.72
Lakh and on account of ‘Income from Monthly SLDC Operating Charges’ of Rs. 1771.00
Lakh. During FY 2015-16, MSLDC has recovered the Fees and Charges partly (for the period
Apr-Spt. 15) as per the Order issued by Hon’ble Commission on 7 March, 2014 in Case No.
178 of 2013 and partly (for the period Oct 15 to Mar 16) as per the revenue approved under
Order issued by Hon’ble Commission on 20thOctober, 2015 in Case No. 218 of
2014.MSLDC thus in actual earned ‘Income from Annual SLDC Fees’ of Rs. 675.72 Lakh
and ‘Income from Monthly SLDC Operating Charges’ of Rs. 1884.54 Lakh, for FY 2015-16.
Further, MSLDC has earned revenue of Rs.2140.09 from Scheduling Charges and Rs. 163.20
Lakh from Rescheduling charges in FY 2015-16.
As regards income from other receipts, MSLDC has received major earning from interest on
investment made in context of the BR No. 97/12 dated 2nd February 2015, where it was
proposed that MSLDC should invest fund in flexi deposit in Bank and earn interest on such
deposits. Because of such investments made by MSLDC in the past years, MSDLC earned an
interest income of Rs. 40.78 Lakh in FY 2015-16.
Table 13: Revenue Components for FY 2015-16
(Rs. Lakh)
Particulars Approved in Case No. 20
of 2016 Petitioned
SLDC Revenue Components
Income from Annual SLDC Fees 675.72 675.72
Income from Monthly SLDC
Operating Charges
1771.00 1884.54
SLDC Scheduling Charges 1641.05 2140.09
Rescheduling Charges 160.11 163.20
Other receipts 62.36 103.88
Total Revenue 4310.24 4967.43
The details of the income earned from various sources (including other receipts) for FY 2015-
16is provided in Form F12 of MTR Petition Formats.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 21
3.4 Summary of True-Up for FY 2015-16
In the Order in Case No.20 of 2016 dated 22 July, 2016 the provisional true-up approved for
FY 2015-16 was surplus of Rs. 778.94 Lakh. Based on the above discussion, the head wise
actual expenditure against actual receipts and surplus/ shortfall shown is summarized in the
table below:
Table 14: Final True-Up for FY 2015-16
(Rs. Lakh)
Sr.
No. Particulars
FY 2015-16
Approved in
Case No. 20 of
2016
April-March
(Audited )
True-Up
requirement
(a) (b) (c ) = (b) - (a)
1 Operating Cost Budget
2 Operation & Maintenance Expenses 2,261.39 2,182.12 (79.27)
3 Interest on Working Capital 94.92 93.11 (1.81)
4 RLDC Fees and WRPC Charges 627.03 658.35 31.32
5 Sub-total (Operating Cost Budget) 2,983.33 2,933.59 (49.74)
6 Capital Cost Budget
7 Depreciation Expenses 271.51 304.42 32.91
8 Interest on Loan Capital 202.52 305.75 103.23
9 Return on Equity Capital 178.99 224.26 45.27
10 Sub-total (Capital Cost Budget) 653.01 834.43 181.42
Add: Impact of Sharing of G&L 26.42 26.42
11 Total Expenses 3,636.34 3,794.44 158.10
12 SLDC Revenue Components
13 Income from Annual SLDC Fees 675.72 675.72 -
14 Income from Monthly SLDC
Operating Charges 1,771.00 1,884.54 113.54
15 SLDC Scheduling Charges 1,641.05 2,140.09 499.04
16 Rescheduling Charges 160.11 163.20 3.09
17 Other receipts 62.36 103.88 41.52
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 22
Sr.
No. Particulars
FY 2015-16
Approved in
Case No. 20 of
2016
April-March
(Audited )
True-Up
requirement
(a) (b) (c ) = (b) - (a)
18 Total Revenue 4,310.24 4,967.43 657.19
19 Revenue Gap/(Surplus) (673.90) (1,173.00) (499.10)
20 Holding Cost on Revenue Surplus of
FY 2014-15 (105.04) (105.04)
21 Total Revenue Gap/(Surplus) (778.94) (1278.04) (499.10)
(499.10)
Thus, on final truing up for FY 2015-16, there is surplus of Rs. 499.10Lakh, treatment of
which has been discussed in Section 7.12 of this Petition.
4 Operational performance of SLDC during the 3rd Control Period
MSLDC has been undertaking system operation for the past five decades in the State of
Maharashtra. Over time, MSLDC has proven its technical competency in managing the
system operation in the State and have strived to achieve performance excellence through,
technology adoption, man-power development along with putting in place support system and
procedures for its effective operation. SLDC is continuously working towards effectively
coping up with the fast changing operational dynamics of the power system and in
overcoming upcoming challenges.
While the subsequent chapters of this Petition presents an overview of the financial
performance of the MSLDC, under this section, MSLDC would like to specifically present its
operational performance and its efficacy of systems operation capabilities of MSLDC in the
recent past. The table below compares the operational performance of the MSLDC during the
entire period of FY 2016-17 and during the first six monthly period of FY 2017-18., for kind
appreciation of the Hon’ble Commission.
Sr.
No.
Key result Area and
Corresponding Key
Performance
Indicator
Achievement during
April-March 2017
Achievement during
April-September-2017
1 EFFICIENT GRID OPERATION AND CONTROL
A Demand & energy
catered
Max. peak demand 23055 MW on
30.03.2017 & Total energy catered
147000Mus. (Max. 501.4 Mus on
Max. peak demand 22994 MW on
11.04.2017 & Total energy catered
77632.64 Mus. (Max. 501.803 Mus on
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 23
11.04.2017) 11.04.2017)
B
To follow DSM
discipline and maintain
deviation in
permissible limit (250
MW w.e.f 30.05.2016).
Less than -250 MW -- 349 blocks
– 12%.
-250 to +250 MW -- 2071blocks –
71% (allowed as per IEGC)
Greater than 250 MW – 489 blocks
– 17 %
Less than -250 MW -- 2682 blocks
– 15.27 %.
-250 to +250 MW -- 11959blocks –
68.07 % (allowed as per IEGC)
Greater than 250 MW – 2927 blocks
– 16.66 %
C Improvement in Grid
Parameters (f)
Less than 49.90 Hz – 18.75
% of time
Between 49.90 – 50.05 Hz – 69.86%
of time
Above 50.05 Hz – 11.39
% of time
Less than 49.95 Hz – 11.115
% of time
Between 49.95 – 50.05 Hz – 77.15 %
of time
Above 50.05 Hz – 11.733
% of time
D Scheduling of power
as per contracts.
Daily scheduling as per MOD carried
out.
Daily scheduling as per MOD carried
out.
E
Development of
Scheduling Software as
per new DSM
Mechanism.
Tendering process completed and
work order will be issued for
developing Scheduling software
Work order for development of
scheduling software placed on M/s
PRDC Bangalore on date 19.05.2017.
( Work in progress)
F
Daily Reporting &
Quarterly feedback
report to STU for
Transmission
constraints,
congestion, GCC etc.
The Daily System Report (DSR) is
upgraded from time to time as per
modifications in power system
network. Modifications like, addition
of Coal & oil stock position of
MSPGCL units & IPPs, Changes in
Central sector drawl points, additions
of new generators or substations etc.,
incorporated
Daily reporting is done to all higher
authorities. Quarterly feedback report
to STU is submitted for first quarter of
FY 2017-18.
G
Coordination with
WRLDC/ GENCO/
DISCOM/ TSU/OA
Coordinated with
WRLDC/GENCO/DISCOM/TSU/OA
as & when required. OCC/TCC-
WRPC meetings participated actively.
Coordinated with
WRLDC/GENCO/DISCOM/TSU/OA
as & when required. OCC/TCC-
WRPC meetings participated actively.
2 OUTAGE MGMT. AND CONTINGENCY PLANNING
Sr.
No.
Key result Area and
Corresponding Key
Achievement during
April-March 2016
Achievement during
April-September-2017
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 24
Performance
Indicator
A
400 KV and above
system elements in
coordination with
WRLDC/WRPC.
Total 990 No. of 400kv and above,
system elements outages provided
Total 554 No. of 400kv and above,
system elements outages provided
B 220 KV level system
elements outages .
Total 3542 No. of 220kV level
system elements outages provided.
Total 1112 No. of 220kV level system
elements outages provided.
2 ENERGY ACCOUNTING /OA/ REGULATORY and MSPC
Sr.
No.
Key result Area and
Corresponding Key
Performance
Indicator
Achievement during
April-March 2016
Achievement during
April-September-2017
A Timely issuance of
FBSM weekly bills.
FBSM billing process is lagging
behind due to inherent problem in
billing software.
Final settlement completed till Feb
13. Further final settlement is held
up for want of finalization of
regional DSM bills by WRPC. The
matter is perused with WRPC.
Weekly FBSM Bills up to January 2016
first weeks issued. (Total 10 weekly bill
issued)
L&T being looped in for AMC of FBSM
software
B
Computation of
Transmission Loss for
the intra-state system.
Computation of losses for each
months and placed on web-site from
September 2016
Computation of losses for each months
and placed on web-site
C
Development of
comprehensive software
for FBSM
Budgetary offers are being called
for estimation & administrative
approval for the new software
SRS for Meter Data Acquisition system
& FBSM Billing completed and
scheduling is under process.
D
Development of new
web based software for
STOA.
Tendering process completed and
work order is issued for developing
Web based STOA software on 11th
May 2017
STOA Software prepared by M/s RE
Connect and is under testing.
Upon analysing the various parameters/performance indicators in the above table, one can
observe that year-on-year, SLDC is able to improve various system operational parameters
through its operational effectiveness, thereby benefitting the State of Maharashtra and its
Power Utilities at large. The following graph and table shows how the commercial burden on
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 25
the State has reduced over the past years w.r.t its unscheduled interchange (UI) transactions
with respect to the regional/national grid.
(60)
(40)
(20)
-
20
40
60
80
(2,000)
(1,500)
(1,000)
(500)
-
500
1,000
1,500
2,000
2,500
Wk-
1
Wk-
5
Wk-
9
Wk-
13
Wk-
17
Wk-
21
Wk-
25
Wk-
29
Wk-
33
Wk-
37
Wk-
41
Wk-
45
Wk-
49
Wk-
53
Wk-
57
Wk-
61
Wk-
65
Wk-
69
Wk-
73
Wk-
77
Wk-
81
Wk-
85
Wk-
89
Wk-
93
Wk-
97
Wk-
10
1
Wk-
10
5
Wk-
10
9
Wk-
11
3
Wk-
11
7
Wk-
12
1
Wk-
12
5
Wk-
12
9
Wk-
13
3
Wk-
13
7
Wk-
14
1
Wk-
14
5
Wk-
14
9
Wk-
15
3
Dev
iati
on
Un
its
(MU
)
AD
evia
tio
n A
mo
un
t (I
NR
La
kh)
Weekly Deviation Units and Charges (Maharashtra) - Apr14 to Mar 17
Deviation Charges Capping Additional DMC Deviation units
Table 15: ADMC for FY 2014-15 to FY 2016-17
(Rs. Lakh)
Particulars FY 2014-15 FY 2015-16 FY 2016-17
Annual Additional Deviation
Management Charges payable by the
State
6692 5327 2265
Besides the improvement in the system operation effectiveness, SLDC is also poised to meet
the upcoming challenges and therefore has planned various schemes, which are either at the
planning stage or are under execution.
New Projects Planned/Under execution
Sr.
No. Projects Status
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 26
A
5 RTU data intégration- CTU-
STU interface points
Scheme completed for CTU-STU interface data at
Maharashtra periphery
B 80 RTUs data integration for
220 KV sub-stations
In progress. Detailed orders placed by CE(PAC). Order for
integration in existing SCADA at SLDC is placed on M/s
Siemens on rate contract basis for 150-300 RTUs within
next 3 years.
C 20 + 30 RE Pooling station
RTU under PSDF
20 DCs scheme: submitted for acceptance of Tender by
the Competent Authority.
30 DCs Scheme: PSDF approval obtained. Tender
specifications are ready.
D 75 RTU of 132 KV sub-station
PSDF proposal
The scheme is approved by PSDF but kept on hold in
view of other works for SCADA visibility.
E REMC establishment in
coordination with PGCIL
Price Bids are opened by PGCIL and PGCIL is in process
of reverse bidding.
F Establishment of Sub-SLDC
Civil infrastructure being set up by MSETCL. Initial
activities for set up of Sub-LDCs at Nashik and Pune to
be undertaken in FY 2018-19
Considering the above, the MSLDC in the present MTR Petition has proposed certain
revisions and addition in the capex plan submitted as part of its earlier MYT Petition. Further,
in order to take up upcoming challenges, HR planning and HR development is crucial. Thus
in line with the HR development plan submitted along with the MYT Petition and continuing
with the implementation of the same, additional manpower required and corresponding
review in the projection of O&M expenses have been made in the present MTR Petition.
The next chapter presents actual performance of FY 2016-17 followed by the chapter of
provisional projections of FY 2017-18 and in the subsequent chapter revised projection for
FY 2018-19 and FY 2019-20 has been presented.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 27
5 True-up for FY 2016-17
MSLDC humbly submit that Audited Accounts and Allocation Statement for FY 2016-17
that have been finalized & attached to the Petition as Annexure- 2. MSLDC therefore seeks
true up of all components for FY 2016-17 as per the Audited Accounts/principles laid down
in the Multi Year Tariff Regulation, 2015 of the Commission on MSLDC’s Budget, as
applicable for various heads of expenditure/revenue. Further, all computations are also
presented in spreadsheet data formats stipulated by the Commission for submission of MYT
Petition, which are separately submitted in a computer readable file along with this Petition.
The same has also been attached to the Petition as Annexure- 1.
MSLDC has provided detailed rationale for truing up and key issues in the subsequent
paragraphs.
5.1 Operation & Maintenance
In accordance with the MYT Regulations, 2015 the actual Operations and Maintenance
Expenses based on the Audited Accounts is Rs. 1994.06 Lakh for FY 2016-17. The actual
Operations and Maintenance is marginally on the higher side as against Rs. 1963.11 approved
by the Hon’ble Commission in Case No. 20 of 2016.
MSLDC also submits that as explained in 3.1.1(a), the Training Expenses of Rs. 7.55 Lakh is
now included in the A&G Expenses for FY 2016-17. To this extent, variation exists in
claimed and Audited figures of Employee expenses as well as A&G expenses.
The breakup of the actual Operation and Maintenance expenses incurred by MSLDC is as
shown in the Table below:
Table 16: Breakup of Operation and Maintenance Expenses for FY 2016-17
Rs. Lakh
Sr. No. Particulars Actual
1 Employee Expenses 1354.66
2 Administration and General Expenses 522.41
3 Repairs and Maintenance Expenses 116.98
Total Operation and Maintenance Expenses 1994.06
The Operation and Maintenance (O&M) expenses approved by the Hon’ble Commission for
FY 2016-17 in Case No. 20 of 2016 and the actual expenses incurred by MSLDC as per
Audited Accounts are summarized in Table as below:
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 28
Table 17: Operation and Maintenance Expenses for FY 2016-17
(Rs. Lakh)
Particulars Approved in Case
No. 20 of 2016 Actual
True-Up
Requirement
Operation and Maintenance
Expenses 1963.11 1994.06 30.95
MSLDC humbly request the Hon’ble Commission to approve Operation and Maintenance
expenses as claimed in this Petition.
The Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2015
under Regulation 8.4 (a) specifies as under:
“8.4 ……
(a) the approved aggregate gain or loss to the Generating Company or
Licensee or MSLDC on account of controllable factors for the Years 2015-16
and 2016-17 and provisional Truing-up for the Year 2017-18, and the amount
of such gains or such losses that may be shared in accordance with Regulation
11;”
Further, as per Regulation 9.2 of the MYT Regulations, 2015, variation in O&M expense
corresponding to approved value are categorised as controllable expenses. Thus impact of
sharing of gains/loss has been considered on this account for FY 2016-17 and the same is
presented in the following table.
Table 18: Sharing of Gains and Loss on account of O&M Expenses for FY 2016-17
(Rs. Lakh)
Particulars
O&M Expenses Approved under Case No. 20 of 2016 1963.11
Actual O&M expense 1994.06
Total Gain/(Loss) on account of controllable factors (30.95)
Sharing proposed (20.63)
5.2 Interest on Working Capital
The Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2015
under Regulation 31 specifies as under:
“31.5 MSLDC
(a) The working capital requirement of the MSLDC shall cover:
(i) Operation and maintenance expenses for one month;
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 29
(ii) One-and-a-half-month equivalent of the expected revenue from levy
of Annual Fixed Charges:
Provided further that for the purpose of Truing-up for any year, the working
capital requirement shall be re-computed on the basis of the values of
components of working capital approved by the Commission in the Truing-up
before sharing of gains and losses;
(b) Rate of interest on working capital shall be on normative basis and shall
be equal to the Base Rate as on the date on which the Petition for
determination of Fees and Charges is filed, plus 150 basis points:
Provided that for the purpose of Truing-up for any year, interest on working
capital shall be allowed at a rate equal to the weighted average Base Rate
prevailing during the concerned Year plus 150 basis points.”
MSLDC has considered the aforementioned methodology specified in the MYT Regulations,
2015 for calculation of IoWC for FY 2016-17. MSLDC has computed IoWC, for FY 2016-17
by taking one month’s Operation and Maintenance expenses and 1.5 months’ receivables. For
computing receivables, MSLDC has considered the AFC excluding impact of sharing of
gains and losses. Further, MSLDC submits that there is no actual loan borrowed for meeting
its working capital requirements.
As regards interest rate, MSLDC has considered the same as approved under Case No. 20 of
2016 which is a rate equivalent to 150 basis point margin over the State Bank of India (SBI)
Base Rate as specified under the MYT Regulations, 2015 and the same works out to 10.80%.
The IoWC computation for MSLDC for FY 2016-17 are shown in the table below:
Table 19: Interest on Working Capital for FY 2016-17
(Rs. Lakh)
Particulars Approved in
Case No. 20 of
2016
Claimed True-Up
Requirement
Interest on Working Capital 37.70 27.41 (10.29)
MSLDC humbly requests the Hon’ble Commission to allow claimed IoWC for FY 2016-17.
The detailed computation of normative interest on working capital has been given in the
Form 6 of MTR Petition Formats.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 30
5.3 RLDC Fees & WRPC Charges
The RLDC Fees and WRPC Charges for the FY 2016-17 as per the Audited Accounts are Rs.
632.31 Lakh.
Table 20: RLDC Fee & WRPC Charges for FY 2016-17
(Rs. Lakh)
Particulars Approved in Case
No. 20 of 2016
Actual True- Up
Requirement
RLDC Fees 378.25 622.31
WRPC Secretariat Charges 10.37 10.00
Total 388.62 632.31 243.69
Hon’ble Commission in Case No. 20 of 2016 had considered impact of truing up order by
CERC in the matter of RLDC fee for the past years and computed holding cost of surplus
which was adjusted while allowing such charges to SLDC for FY 2016-17. However,
MSLDC has incurred Rs. 622.31 Lakhs towards RLDC fee in the corresponding year,
resulting a variation from that allowed under Case No. 20 of 2016.
Accordingly, MSLDC requests the Hon’ble Commission to approve RLDC Fees and WRPC
Charges claimed for FY 2016-17. The details of RLDC Fees and WPRC Charges are also
provided in Form F7 of MTR Petition Formats.
5.4 Capitalization
Hon’ble Commission approved capitalisation of Rs. 687.26 Lakh for FY 2016-17in Case No.
20 of 2016. However, upon completion of the FY 2016-17, the actual capitalisation was Rs.
185.17 Lakh. The breakup of actual capitalisation as DPR and Non-DPR schemes is as shown
in the Table below:
Table 21: Capitalization for FY 2016-17
(Rs Lakh)
Sr.
No. Project Title
Actual
Capitalization
DPR Schemes
1 Hardware/Software for SCADA system 22.40
2 Office Equipments ( Servers, PCs, Printers, Laptop, Xerox m/c,
Firewalls, Routers, LAN Components, cables, switches etc.) 55.04
3 Erection, Testing & Commissioning of 22/0.44 kV indoor type S/S 149.20
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 31
Sr.
No. Project Title
Actual
Capitalization
for New Building of SLDC at MSLDC Kalwa
4 Disaster Recovery System/Back Up 36.12
Total DPR 262.76
Non-DPR Schemes
5
Infrastructure Development (Interior & Furnishing, Air
Conditioning, Security Systems, Testing equipments & tools,
Furniture, Auxiliary supplies, etc.)
22.17
Total Non-DPR 22.17
Total Schemes Capitalization 284.93
MSLDC submits that actual Capitalisation in FY 2016-17 is lower than the Capitalisation
approved by the Hon’ble Commission in Order in Case No. 20 of 2016. The decrease in
capitalisation in FY 2016-17 is attributable to reduced capitalisation towards few schemes
that were proposed during FY 2016-17, which however are getting capitalised in the
subsequent years. MSLDC humbly requests the Hon’ble Commission to allow the actual
capitalisation of Rs. 284.93 Lakh for FY 2016-17.
Regarding schemes under Sr. No. 2 and Sr. No. 4, it is submitted that the schemes are being
formulated by clubbing various similar nature low value schemes based on earlier directions
of the Hon’ble Commission of clubbing non-DPR schemes to form DPR scheme. While some
assets under this scheme has already been made capitalised during FY 2016-17,
corresponding capitalisation has been claimed. MSLDC however intends to submit a DPR
prepared for such scheme and shall be submitted to Hon’ble Commission for in-principle
approval. As some assets have actually been capitalised during FY 2016-17, under the
scheme, MSLDC request the Hon’ble Commission to approve the capitalisation claimed
against such schemes during the year.
As regards the scheme, “Erection, Testing & Commissioning 22/0.44 kV Indoor Type S/S for
New Building of SLDC at MSLDC Kalwa”, capitalisation was claimed during FY 2015-16 as
well as in FY 2016-17, based on the accounting/internal practice followed by MSLDC
despite the fact that final commissioning of the scheme happened only during FY 2015-16.
However, based on the provisions of the MYT Regulations, 2011 and MYT Regulations,
2015, the capitalisation towards the entire scheme is now claimed only in FY 2016-17, where
the indoor substation was fully commissioned. To this extent, it may be noted that the
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 32
capitalisation/asset addition in the audited TB for FY 2015-16 and TB for FY 2016-17 would
differ.
The details of the actual Capitalisation for FY 2016-17 are provided in Form F 3.3 of the
MTR Petition Formats, submitted along with this filing.
5.5 Depreciation
MSLDC submits that the actual depreciation for FY 2016-17 has been computed considering
the depreciation rates in accordance with the MERC MYT Regulations, 2015 in the books of
accounts of MSETCL and the same has been considered for the assets of MSLDC. The assets
related to MSLDC have been identified along with the depreciation on the same.
MSLDC in its Petition under Case No. 20 of 2016 has claimed a depreciation of Rs. 546.30
Lakh against which the Hon’ble Commission approved depreciation of Rs. 350.92 Lakh in
the said Order. Against the same, MLSDC submits that the depreciation for FY 2016-
17claimed for truing up is Rs.343.48Lakh.
For the asset Computer Software/IT equipment, depreciation has been computed based on the
rate approved by the Hon’ble Commission (@15%) in the MYT Regulations and as stipulated
in the Order in Case No. 20 of 2016. The working of the depreciation for the asset Computer
Software/IT equipment are now enclosed along with the MYT formats under work sheet
‘Computer Software Depre.’. To this extent of separate depreciation considered for Computer
Software/IT equipment, the depreciation in Form-4 and audited allocation statement differ.
Thus, the variation in the value considered in Form4 (Rs. 343.48 Lakhs) and that in the
allocation statement is owing to considering the separate depreciation working for the asset
Computer Software/IT equipment.
Besides, the actual depreciation reported for FY 2016-17 in the audited allocation statement
considers impact of actual capitalisation of the DPR scheme indoor substation in the year.
However, based on the provisions of the MYT Regulations, 2011 and MYT Regulations,
2015, the capitalisation towards the entire scheme is now claimed in the FY 2016-17, where
the indoor substations were fully commissioned. In this context the present claim of
depreciation for truing up would vary from the audited TB for FY 2016-17.
It is humbly submitted that the actual depreciation for FY 2016-17 considers the impact of
the Computer Software which is recognised as ‘IT Equipment’ with a depreciation rate of
15% in accordance with the MYT Regulations, 2015 by the Hon’ble Commission in Case No.
20 of 2016.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 33
Table 22: Depreciation for FY 2016-17
(Rs. Lakh)
Particulars
FY 2016-17
MERC Order
( Case No. 20 of 2016) Actual
True-Up
Requirement
Depreciation 350.92 343.48 (7.44)
MSLDC humbly requests the Hon’ble Commission to allow the actual depreciation of Rs.
343.48Lakh. The details of the actual Depreciation for FY 2016-17 are provided in Form F4
of the MTR Petition Formats, submitted along with this filing.
5.6 Interest & Financial Charges
The interest on the existing actual loan for MSLDC has been apportioned as Rs. 4.55 Lakh
for FY 2016-17from MSETCL’s Books of Accounts as in Case No. 20 of 2016.
For the purpose of estimation of Interest Cost corresponding to new loans for new Capital
Expenditure Schemes, as per Regulation 26 of MYT Regulations. 2015, the Interest Costs
based on normative debt-equity ratio of 70:30. The same approach has been considered to
calculate the addition to the normative loan amount for FY 2016-17. Further, MSLDC has
considered the weighted average interest rate of the actual loan portfolio of MSLDC for
computing the interest expenses for FY 2016-17 as per MERC MYT Regulations, 2015.
Further, in accordance with the approach adopted by the Hon’ble Commission, the repayment
of the normative loan has been considered as 10 years, with repayment being started from the
second year of loan admitted.
MSLDC submits that the rate of Interest considered in the Petition for FY 2016-17 is as per
the actual loan borrowed from PFC by MSETCL, part of which was allocated to MSLDC.
MSLDC has enclosed the documentary proof of existing loan in its Revised Petition which is
annexed as Annexure 15.
The details of existing loans allocated to MSLDC by MSETCL are as under:
Table 23: Details of Existing Loans allocated to MSLDC by MSETCL
(Rs. Lakh)
Sr. No. Particulars FY 2016-17
PFC Loan No. 21603009
1 Opening Balance 51.05
2 Repayment during the Year 22.69
3 Closing Balance 28.36
4 Rate of Interest 12.25%
Interest Chargeable during the Year 4.55
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 34
Interest on Loan for FY 2016-17 shown in Table as below:
Table 24: Interest on Loan
(Rs. Lakh)
Particulars
FY 2016-17
MERC Order
( Case No. 20 of 2016) Actual
True-Up
Requirement
Interest on Loan 207.90 284.93 77.03
MSLDC submits that higher interest vis-à-vis approved in Case No. 20 of 2016 is on account
of higher interest rates of normative loan considered in line with interest rate of actual loan of
MSETCL allocated to MSLDC.MSLDC humbly requests the Hon’ble Commission to
approve above expenses towards Interest on Loan.
The details of the interest of loan for FY 2016-17 have been provided in Form F5 of MTR
Petition Formats.
5.7 Return on Equity
The Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2015
under Regulation 31 specifies as under:
“28 Return on Equity
28.1 ...
28.2 Return on equity for the Transmission Licensee, Distribution Wires Business
and MSLDC shall be allowed on the equity capital determined in accordance
with Regulation 26 for the assets put to use, at the rate of 15.5 per cent per
annum in Indian Rupee terms, and for the Retail Supply Business, Return on
Equity capital shall be allowed on the amount of equity capital determined in
accordance with Regulation 26 at the rate of 17.5 per cent per annum in
Indian Rupee terms.
28.3 The return on equity shall be computed in the following manner:
(a) Return at the allowable rate as per this Regulation, applied on the amount
of equity capital at the commencement of the Year; plus
(b) Return at the allowable rate as per this Regulation, applied on 50 per cent
of the equity capital portion of the allowable capital cost, for the investments
put to use in Generation Business or Transmission Business or Distribution
Business or MSLDC, for such Year.”
MSLDC would like to submit to Hon’ble Commission that the Return on Equity for the FY
2016-17 has been calculated as per the capitalisation during the year. Further, in accordance
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 35
with the MYT Regulations, 2015, rate of 15.5% has been considered for computing RoE.
Hence, the Return on Equity would amount to Rs.236.67Lakh for FY 2016-17.
The Return on Equity for FY 2016-17 is shown in Table as below:
Table 25: Return on Equity
(Rs. Lakh)
Particulars
FY 2016-17
MERC Order
( Case No. 20 of 2016) Actual
True-Up
Requirement
Return on Equity 202.98 234.44 31.46
MSLDC submits that RoE for FY 2016-17 is higher than approved RoE in Case No. 20 of
2016 because of difference of GFA, owing to disallowance in the past as compared to the
approved capitalisation by the Hon’ble Commission in Case No. 20 of 2016.
MSLDC humbly requests the Hon’ble Commission to approve above expenses towards
Return on Equity. The details of the Return on Equity for FY 2016-17 have been provided in
Form F10 of MTR Petition Formats.
5.8 Reactive Energy Charges Paid / Income from Reactive Energy Charges
The Annual Fixed Charges to be levied by the MSLDC as per the MYT Regulations, 2015
also has following components:
a) Reactive Energy Charges paid to Generators/TSUs
b) Income from Reactive Energy Charges
The Hon’ble Commission in Case 20 of 2016 had directed MSLDC to carry out its
responsibilities with regard to reactive energy as specified in the MYT Regulations, 2015
with regard to levy/compensation of reactive energy charges, maintain accounts for the
purpose and include or propose income/expenses from such charges for the determination of
AFC at the time of MTR.
In view of the above, MSLDC has taken up the issue of reactive energy balance and reactive
energy pool settlement in the Grid Co-ordination Committee meeting. As directed by the
GCC Chairman in the 78th GCC meeting a Committee was constituted to formulate draft
mechanism for settlement of reactive energy pool and infrastructure requirement thereof.
MSLDC shall operate reactive pool account on the same lines as DSM pool account. The
framework for the same will be submitted to Hon’ble Commission for kind perusal and
approval.The Committee shall deliberate on reactive power measurement infrastructure
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 36
including metering, AMR and software. The Committee shall deliberate on the following
aspects related to reactive energy measurement and settlement.
The mechanism for measurement and settlement of reactive power energy account for the
following which shall be deliberated by the Committee and solutions shall be evolved.
a) Condenser mode operation of Koyna HPS,
b) Injection/drawl of reactive power at G<>T interface,
c) Injection/drawl of reactive power at T<>D interface,
d) Operation of reactive pool account &
e) Approval for mechanism from Hon’ble MERC
The above initiative is underway and pending finalization of evolution of the reactive energy
balance and reactive energy pool settlement mechanism, MSLDC has not proposed any
income/expense under this heads for the FY 2016-17. However, as discussed in the GCC, a
mechanism for operating reactive energy pool and commercial settlement mechanism will be
finalized and submitted to Hon’ble Commission for approval.
5.9 Income Tax
It is respectfully submitted that MSLDC has no separate corporate existence i.e., it is not a
separate Company and is being operated by the Government Company, i.e., MSETCL. It is
also submitted that the Government Company i.e., MSETCL, is also being regulated by this
Hon’ble Commission. Further, MSLDC respectfully submits that the expenditure/income
pertaining to SLDC activities is accounted separately in line with the Hon’ble Commission
directives in the original Budget Order, for the purpose of regulatory reporting.
It is respectfully submitted that there is neither separate filing of Income Tax Returns in
respect of MSLDC nor allocation/claim of Income Tax towards MSLDC by MSETCL.
However, in future if such allocation/claims are formulated the MSLDC shall be able to
claim in future period in accordance with provisions outlined under MERC MYT Regulations
over control period. MSLDC humbly request the Commission to kindly grant liberty to
undertake the same then.
In view of above, MSLDC has not claimed Income Tax for the for FY 2016-17
5.10 Non-Tariff Income
The Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2015
under Regulation 95 specifies as under:
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 37
“95.1 The amount of Non-Tariff Income relating to the MSLDC as approved by the
Commission shall be deducted from the Aggregate Revenue Requirement in
determining the Fees and Charges of the MSLDC:
Provided that the MSLDC shall submit full details of its forecast of Non-Tariff
Income to the Commission in such form as may be stipulated by the
Commission.
95.2 The Non-Tariff Income shall include:
a) Income from sale of scrap;
b) Income from investments;
c) Interest income on advances to suppliers/contractors;
d) Income from rental from staff quarters;
e) Income from sale of tender documents;
f) Any other Non-Tariff Income:
Provided that the interest earned from investments made out of Return on
Equity of the MSLDC shall not be included in Non-Tariff Income.”
MSLDC submits that the increase in the Non-Tariff Income for FY 2016-17 is due to the
interest income earned on the Investment made by MSLDC in the past years. Vide BR No.
97/12 dated 2nd February, 2015 and subsequent note approved by MSETCL management
dated 14 July, 2015, it was proposed that MSLDC should invest fund in flexi deposit in Bank
and earn interest on such deposits. On account of such investments made by MSLDC in the
past years, MSDLC earned an interest income of Rs. 210.63 Lakh. In addition to the above,
MSLDC has received ‘discount on prompt payment to Vendor’ in FY 2016-17 which
amounts to Rs. 32.34 Lakh. In addition to the above, MSLDC has considered income from
miscellaneous receipts towards non-tariff income for FY 2016-17.
MSLDC humbly requests Hon’ble Commission to allow Non-Tariff Income considering the
actuals. The details of the Non- Tariff Income for FY 2016-17 provided in Form F11of MTR
Petition Formats.
Table 26: Non-Tariff Income for FY 2016-17
(Rs. Lakh)
Particulars
FY 2016-17
MERC Order
( Case No. 20 of 2016) Actual
True-Up
Requirement
Non-Tariff Income 17.18 262.63 245.45
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 38
5.11 Income from Open Access Charges
As per the Regulations formulated in the Multi Year Tariff Regulation 2015, MSLDC
submits that the actual income from Open Access Charges of Rs. 2546.65 Lakh for FY 2016-
17 which includes Scheduling and Rescheduling Charges, as against Rs 1010.36 lakh
approved by the Hon’ble Commission for FY 2016-17.
MSLDC has also received applications for REC, for which a total application processing fee
of Rs. 16.63 Lakhs is received and the same is subsumed under Income from Open Access
for FY 2016-17.
Table 27: Income from Open Access charges for FY 2016-17
(Rs. Lakh)
Particulars
FY 2016-17
MERC Order
( Case No. 20 of 2016) Actual
True-Up
Requirement
Income from open access charges 1010.36 2546.65 1536.29
MSLDC submits that there has been increase in the short term Open Access applications in
FY 2016-17 and hence increase in revenue on this account. MSLDC humbly requests the
Hon’ble Commission to approve Income from Open Access charges based on actual Audited
Accounts.
The details of the Income from Open Access for FY 2016-17 provided in Form F12 of MTR
Petition Formats.
5.12 Income from Monthly Operating Charges
MSLDC has received actual income from Monthly Operating Charges of Rs. 1698.50 Lakhs
for FY 2016-17 as against approved Monthly Operating charge of Rs. 1452.05 Lakh for FY
2016-17. MSLDC submits that Monthly Operating Charges for FY 2016-17 also includes
Semi-Annual fees Rs.246.45 Lakh, which was collected by MSLDC from April 2016 to June
2016, before the publication of the Order of Case 20 of 2016.
Table 28: Income from Monthly Operating Charges for FY 2016-17
(Rs. Lakh)
Particulars FY 2016-17
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 39
MERC Order
( Case No. 20 of 2016) Estimated
Prov. True-
Up
Requirement
Income from Monthly Operating
charges
1484.17 1698.50 214.33
The details of the Monthly Operating Charges for FY 2016-17 is provided in Form F12 of MTR
Petition Formats.
5.13 Summary of True-Up for FY 2016-17
In the Commission’s Order, in Case No.20 of 2016 dated 22 July 2016 the ARR forecast for
FY 2016-17 was 1484.17 Lakh. Based on the above discussion, the head wise actual
expenditure against actual receipts and surplus/ shortfall shown is summarized in the table
below:
Table 29: Final True-Up for FY 2016-17
(Rs. Lakh)
Sr.
No. Particulars
FY 2016-17
Approved in Order
20 of 2016
April to
March
(Audited)
Truing Up
Requirement
1 Operation & Maintenance
Expenses 1963.11 1994.06 30.95
2 Depreciation Expenses 350.92 343.48 (7.44)
3 Interest on Loan Capital 207.90 284.93 77.03
4 Interest on Working Capital 37.70 27.41 (10.29)
5 RLDC Fees and WRPC Charges 388.62 632.31 243.69
6 Reactive Energy Charges paid to
Generators/TSUs 0.00 0.00 0.00
7 Income Tax 0.00 0.00 0.00
8 Total Revenue Expenditure 2948.25 3282.19 333.94
9 Return on Equity Capital 202.98 234.44 31.46
10 Total Expenditure for MSLDC 3151.24 3516.63 365.39
11 Less: Non-Tariff Income 17.18 262.63 245.45
12 Less: Income from Open Access
charges 1010.36 2546.65 1536.29
13 Less: Income from Reactive
Energy Charges 0.00 0.00 0.00
Gross AFC 2123.70 707.35 (1416.35)
Add: Impact of sharing of G&L (20.63)
Less: Adjustment of Surplus 639.53 0.00
14 Annual Fixed Charges for
MSLDC 1484.17 686.72 (797.45)
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 40
Sr.
No. Particulars
FY 2016-17
Approved in Order
20 of 2016
April to
March
(Audited)
Truing Up
Requirement
Revenue approved/actual 1484.17 1698.50 214.33
Standalone Revenue
gap/(surplus) 0.00 (1011.78)
Thus, on final truing up for FY 2016-17, there is surplus of Rs. (1011.78) Lakh, treatment of
which has been discussed in Section 7.12of this Petition.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 41
6 Provisional True-Up for FY 2017-18
As per the MTR Petition Formats stipulated by the Hon’ble Commission, MSLDC
considered actual unaudited expenses from April 2017 to September 2017 (6 months) for FY
2017-18 and estimates for various expenses and revenue for balance months for FY 2017-18.
6.1 Operation & Maintenance
Regulation 93.1 to 93.4 of the MYT Regulations, 2015 provides for projection of O&M
expense on a normative basis for MSLDC. The relevant extract of the Regulations is
reproduced as under.
“93.1 The Operation and Maintenance expenses for the MSLDC shall be computed
in accordance with this Regulation.
93.2 The Operation and Maintenance expenses shall be derived on the basis of the
average of the Trued-up Operation and Maintenance expenses after
adding/deducting the share of efficiency gains/losses, for the three Years
ending March 31, 2015, excluding abnormal Operation and Maintenance
expenses, if any, subject to prudence check by the Commission.
93.3 The average of such Operation and Maintenance expenses shall be considered
as Operation and Maintenance expenses for the Year ended March 31, 2014,
and shall be escalated at the escalation rate of 5.72% to arrive at the
Operation and Maintenance expenses for the base Year commencing April 1,
2015.
93.4 The O&M expenses for each subsequent Year shall be determined by
escalating the base expenses determined above for FY 2015-16, at the
inflation factor considering 60% weightage for the actual point to point
inflation over Wholesale Price Index numbers as per Office of Economic
Advisor of Government of India in the previous Year and 40% weightage for
the actual Consumer Price Index for Industrial Workers as per Labour
Bureau, Government of India in the previous Year, as reduced by an efficiency
factor of 1%, to arrive at permissible O&M expenses for each Year of the
Control Period:
Provided that a different efficiency factor may be stipulated by the
Commission from time to time:
Provided further that at the time of Truing-up the O&M expenses for the
different Years during the Control Period, the inflation factor considering
60% weightage for the actual point to point inflation over Wholesale Price
Index numbers as per Office of Economic Advisor of Government of India in
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 42
the concerned Year and 40% weightage for the actual Consumer Price Index
for Industrial Workers as per Labour Bureau, Government of India in the
concerned Year, as reduced by an efficiency factor of 1% or any other value
as may be stipulated by the Commission from time to time, shall be
considered.”
The revision to aforementioned Regulatory provisions were made by Hon’ble Commission
vide the MERC (Multi Year Tariff) (First Amendment) Regulations, 2017. The said
amendment is reproduced as under:
“93.1 The Operation and Maintenance expenses for the MSLDC shall be computed in
accordance with this Regulation.
93.2 The Operation and Maintenance expenses shall be derived on the basis of the
Final Trued-up Operation and Maintenance expenses after adding/deducting the
sharing of efficiency gains/losses, for the year ending March 31, 2016, excluding
abnormal expenses, if any, subject to prudence check by the Commission, and shall be
considered as the Base Year Operation and Maintenance expenses.
93.3 The Operation and Maintenance expenses for each subsequent year shall be
determined by escalating these Base Year expenses for FY 2015-16 by an inflation
factor with 20% weightage to the average yearly inflation derived based on the
monthly Wholesale Price Index of the past five years as per the Office of the
Economic Advisor, Government of India and 80% weightage to the average yearly
inflation derived based on the monthly Consumer Price Index for Industrial Workers
(all-India) for the past five years as per the Labour Bureau, Government of India, as
reduced by an efficiency factor of 1% or as may be stipulated by the Commission from
time to time, to arrive at the permissible Operation and Maintenance expenses for
each year of the Control Period:
Provided that, in the Truing-up of the Operation and Maintenance expenses for any
particular year of the Control Period, an inflation factor with 20% weightage to the
average yearly inflation derived based on the monthly Wholesale Price Index of the
past five years (including the year of Truing-up) and 80% weightage to the average
yearly inflation derived based on the monthly Consumer Price Index for Industrial
Workers (all-India) of the past five years (including the year of Truing-up), as
reduced by an efficiency factor of 1% or as may be stipulated by the Commission from
time to time, shall be applied to arrive at the permissible Operation and Maintenance
Expenses for that year.”
As per the aforementioned amendment, for projection of O&M expense over the Control
Period, base year O&M expense to be considered as FY 2015-16 trued-up O&M expense
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 43
upon which appropriate escalation factor as prescribed in the aforesaid provision with CPI:
WPI weightage for 80: 20 has to be considered. The O&M expense for FY 2015-16 after
adjusting for sharing of gains and losses works out to Rs. 2155 Lakhs. The escalation factor
arrived at based on the aforesaid provision is 7.34% without considering an efficiency factor
of 1% and 6.34% with an efficiency factor of 1%. Accordingly, the O&M expense for FY
2017-18 works out to the following.
Table 30: O&M Expenses for FY 2017-18
(Rs. Lakh)
Particulars
FY 2017-18
MERC Order
(Case No. 20 of 2016)
Revised Projection as
per MYT Amendment
O&M expenses 2021.42 2476.58
*Expenses worked out on normative basis and notified amendment
Premise for projection of O&M expense for FY 2017-18 to FY 2019-20 in the MTR
Petition
MSLDC would like to humbly submit that O&M expense for the years FY 2017-18 to FY
2019-10, would be influenced by the following key factors which would not have been
factored while deriving norms for MSLDC.
a) Increase in number of Employees owing to sanction of additional number of
employees: Vide Board Resolution No. 118/12 dated July 15, 2017, the proposal
placed by CE, SLDC before the Board, and sanction was accorded for the additional
staff requirement. As per the same, additional 41 employees have been sanctioned to
SLDC, out of which 15 employees are expected by March 31st 2018, another 15
employees in FY 2018-19 and balance 11 in FY 2019-20. The copy of the above
referred BR is enclosed as Annexure-6. The increase in 41 employees from the
prevailing strength of 109 employees over the period till FY 2019-20 years (15 out of
41 employees to get added in FY 2017-18, another 15 to get added in FY 2018-19 and
balance 11 to get added in FY 2019-20) will impact the O&M expense significantly
and therefore it is requested to be considered on realistic projection basis.
b) Impact of Wage Revision due on April 2018: The wage revision agreement in done
once in five years which is also required to be conserved as part of projection of
employee expense as it is uncontrollable factor and is not captured in inflation. The
next wage revision in due w.e.f. from April 2018. Accordingly, the same has to be
factored in projection of O&M expense for FY 2018-19.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 44
c) Impact of annual inflation: Over and above the impact on O&M expense due to the
above referred factors, the increase in O&M expenses due to inflation has to be
factored in while projecting O&M expenses for the period from FY 2017-18 to FY
2019-20.
In view of the above factors, following methodology and escalation factors has been
considered for projection of employee expense for the period from FY 2017-18 to FY 2019-
20.
O&M heads FY 2017-18 FY 2018-19 FY 2019-20
Employee Expense Q3 expense
considered same as
Q2 expense.
Q4 escalated over
Q3 based on prorate
increase in employee
Considers a) Impact
of increase in no. of
sanctioned
employees from 129
to 144 in the year
b) Impact of Wage
revision due w.e.f
April 2018
c) Inflation (5 year
average CPI)
Considers a) Impact
of increase in no. of
sanctioned
employees from 144
to 155 in the year
b) Inflation (5 year
average CPI)
A&G Expense For A&G heads
dependant on no. of
employees, Q4
escalated over Q3
based on prorate
increase in employee
For A&G heads
independent of no.
of employees, Q4
considered same as
Q3, which is in-turn
considered same as
Q2.
For A&G heads
dependant on no. of
employees,
considers effect of
increase in number
of employees during
the year and the
annual inflation
factor (5-year
average inflation
with WPI: CPI
weightage of 60:40)
For A&G heads
independent of no.
of employees, only
increase owing to
inflation is
considered
For A&G heads
dependant on no. of
employees,
considers effect of
increase in number
of employees during
the year and the
annual inflation
factor (5-year
average inflation
with WPI: CPI
weightage of 60:40)
For A&G heads
independent of no.
of employees, only
increase owing to
inflation is
considered
R&M Expense Projected on need Increase owing to Increase owing to
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 45
basis inflation (5-year
average WPI) is
considered.
inflation (5-year
average WPI) is
considered.
In this context, the expense of FY 2017-18 is projected as below.
Employee Expenses
For estimating employee expenses for FY 2017-18, MSLDC has considered the actual
expenses for the first 6 months i.e., from April 2017 to September 2017 (Q1&Q2), the
projected employee expense for the next three months i.e., from October 2017 to December
2017 (Q-3) over which, the number of employees are expected to remain same as that of H1
of FY 2017-18, and the projected employee expense for subsequent 3 months of the FY
2017-18 (Q-4), by escalating the Q-3 estimated employee expense on a prorate basis
considering that the sanctioned no. of post of 129 (excluding 26 no. outsourced post) would
get filled by 31st March 2018.The increase in number of employees from 109 in Q3 to 129
employees in Q4 considers 5 employees getting added due to the filling up of existing
sanctioned posts and additional 15 employee expected to join during the period as a result of
the additional staff sanctioned as per the Board Resolution No. 118/12 dated July 15, 2017.
The employee expense estimated for FY 2017-18 is shown in the Table below:
Table 31: Employee Expenses for FY 2017-18
(Rs. Lakh)
Sr.
No. Particulars
FY 2017-18
Apr-Sep
(Actual)
Oct-Mar
(Estimated)
April - March
(Estimated)
1 Employee Expenses 674.18 736.03 1,410.21
MSLDC humbly requests the Hon’ble Commission to approve the estimated employee
expenses as claimed in this Petition.
The details of Employee Expenses are provided in Form F2.2 of MTR Petition Formats.
Administrative and General Expenses
A&G expenses basically depends of few parameters which are directly associated with
number of employees (electricity, water, telephone, conveyance, training, IT equipment
related, Printing & stationary and Office expense) and few parameters which are independent
of the number of employees (rent, insurance, bank charges etc.). For estimating A&G
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 46
expenses for FY 2017-18, MSLDC has considered the actual expenses for 6 months i.e., from
April 2017 to September 2017. For balance part of FY 2017-18, MSLDC considered the
expenses on prorate basis guided on the factors dependent or independent on the estimated no
of employees to be added for the remaining half of the year.
The A&G expenses projected for FY 2017-18 vis-à-vis approved in Case No. 20 of 2016 is
shown in Table below:
Table 32: A&G Expenses for FY 2017-18
(Rs. Lakh)
Sr.
No. Particulars
FY 2017-18
Apr-Sep
(Actual)
Oct-Mar
(Estimated)
April - March
(Estimated)
2 A&G Expenses 215.22 327.79 543.02
MSLDC humbly requests the Hon’ble Commission to approve the estimated A&G expenses
as claimed in this Petition.
The details of A&G Expenses are provided in Form F2.3 of MTR Petition Formats.
Repairs and Maintenance Expenses
For estimating R&M expenses for FY 2017-18, MSLDC has considered the actual expenses
for 6 months i.e. from April 2017 to September 2017. For balance part of FY 2017-18,
MSLDC estimated the expenses based on pending R&M work. Further, pertaining to future
plans of upgradation of Plants, machinery and buildings etc. the estimated expense for Plant
and machinery is on the higher side, whereas, the expenses for office equipment has been
kept same for H1 and H2 as per actuals.
The R&M expenses projected for FY 2017-18 vis-à-vis approved in Case No. 20 of 2016 is
shown in Table below:
Table 33: R&M Expenses for FY 2017-18
(Rs. Lakh)
Sr.
No. Particulars
FY 2017-18
Apr-Sep
(Actual)
Oct-Mar
(Estimated)
April - March
(Estimated)
1 R&M Expenses 69.29 123.71 193.00
MSLDC humbly requests the Hon’ble Commission to approve the estimated A&G expenses
as claimed in this Petition.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 47
The details of Repair and Maintenance Expenditure are provided in Form F2.4 of MTR
Petition Formats.
Operation and Maintenance (O&M) expenses
The Operation and Maintenance (O&M) expenses approved by the Hon’ble Commission for
FY 2017-18 in Case No. 20 of 2016 and the actual expenses incurred by MSLDC as per
audited account are summarized in Table as below:
Table 34: O&M Expenses for FY 2017-18
(Rs. Lakh)
Sr.
No. Particulars
FY 2017-18
Approved in Case
No. 20 of 2016
April - March
(Estimated)
Provisional True-
Up Requirement
O&M Expenses
1 Employee Expenses 1,410.21
2 A&G Expenses 543.02
3 R&M Expenses 193.00
Total O&M
Expenses 2,021.42 2,146.23 124.81
The Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2015
under Regulation 8.4 (a) specifies as under:
“8.4 ……
(a) the approved aggregate gain or loss to the Generating Company or
Licensee or MSLDC on account of controllable factors for the Years 2015-16
and 2016-17 and provisional Truing-up for the Year 2017-18, and the amount
of such gains or such losses that may be shared in accordance with Regulation
11;”
Further, as per Regulation 9.2 of the MYT Regulations, 2015, variation in O&M expense
corresponding to approved value are categorised as controllable expenses. Thus, impact of
sharing of gains/loss has been considered on this account for FY 2017-18.
6.2 Interest on Working Capital
The methodology specified in the MERC MYT Regulations, 2015 has been considered for
calculation of interest on working capital for FY 2017-18. It is respectfully submitted that the
interest on working capital shall be payable on normative basis notwithstanding that MSLDC
has not taken any working capital loan from any outside agency.
Further, MSLDC submits that there is no actual loan borrowed for meeting its working
capital requirements.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 48
For FY 2017-18, the interest rate approved by the Hon’ble Commission for calculation of
interest on Working Capital in the Order in Case No. 20 of 2016 has been considered. The
Interest on Working Capital approved by the Hon’ble Commission for FY 2017-18 in Case
No. 20 of 2016 and normative interest on Working Capital is shown in Table below:
Table 35: Interest on Working Capital for FY 2017-18
(Rs. Lakh)
Sr.
No. Particulars
FY 2017-18
Approved in Case
20 of 2016 Estimated
True Up
Requirements
1
Working Capital
Requirement 403.40 470.37
1.1 Rate of Interest (% p.a.) - SBI
Base Rate plus 150 basis
points
10.80% 10.17%
1.2 Interest on Working
Capital 43.57 47.83 4.26
6.3 RLDC Fees & WRPC Charges
RLDC Fees and Charges for FY 2017-18, has estimated same as that approved under Case
No. 20 of 2017.
Table 36: RLDC Fee & WRPC Charges for FY 2017-18
(Rs. Lakh)
Particulars Approved in
Case 20 of 2016
Estimated
RLDC Fees 701.32 701.32
WRPC Secretariat Charges 11.05 11.05
Total 712.36 712.36
Accordingly, MSLDC requests the Hon’ble Commission to proposed RLDC Fees and WRPC
Charges for FY 2017-18.
The details of RLDC Fees and WPRC Charges are also provided in Form F7 of MTR
Petition Formats.
6.4 Capital Expenditure Plan and Capitalization
The Hon’ble Commission in Case No. 20 of 2016 has approved capitalisation amount of Rs.
526.50 Lakh for FY 2017-18. MSLDC has now revised its capitalization estimates for FY
2017-18 considering capitalization anticipated of various existing as well as new schemes
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 49
during the year. Accordingly, for the purpose of provisional truing up of FY 2017-18,
MLSDC propose a revised estimate for capitalisation to the tune of Rs. 495.98 Lakh.
Capital Expenditure and Capitalization towards DPR and Non DPR schemes are presented in
the table below.
Table 37: Revised Capex and Capitalisation for FY 2017-18
(Rs. Lakh)
Schemes Status of In-
principle Approval
Capital
Expenditure Capitalization
A) DPR schemes
Enhancement of real time data
acquisition- DPR
Establishment of real time data
acquisition from 80 nos. of 220 kV
substations at SLDC Kalwa Approved 150.00 75.00
Hardware/Software for SCADA
system Approved 30.00 24.99
Infrastructure Development-DPR
Office Equipments ( Servers, PCs,
Printers, Laptop, Xerox m/c,
Firewalls, Routers, LAN
Components, cables, switches etc.) Yet to be Submitted 80.00 40.00
Construction of Compound Wall and
widening and asphalting of road Yet to be Submitted 70.00 35.00
Erection, Testing & Commissioning
of 22/0.44 kV indoor type s/s for
New Building of SLDC at MSLDC
Kalwa Approved 0.00 0.00
NEW DPR Schemes
IT Security Yet to be Submitted 15.00 7.50
B) Non-DPR Schemes
Enhancement of real time data
acquisition
20.00 10.00
Energy accounting System
17.00 58.23
Off line System
30.00 15.00
Infrastructure Development
(Interior & Furnishing, Air
Conditioning, Security Systems,
Testing equipments & tools,
Furniture, Auxiliary supplies, etc.)
145.00 97.17
Total 557.00 362.89
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 50
In FY 2017-18, SLDC is proposing the following new DPR schemes:
Table 38: Revised Capex and Capitalisation for FY 2017-18
(Rs. Lakh)
Project Code Status of In-principle
approval Total Capital Outlay
NEW DPR Schemes
IT Security Yet to be Submitted 155.00
Capitalization of non-DPR schemes over the Control Period
As regards capitalization towards non-DPR schemes, the Hon’ble Commission has specified
Regulation 23.6 of MERC MYT Regulations, 2015, which is reproduced as below:
“
The amount of capitalisation against non-DPR schemes for any Year shall not exceed
20% or such other limit as may be stipulated by the Commission through an Order, of
the amount of capitalisation approved against DPR schemes for that Year:
Provided that the Commission may allow capitalisation against non-DPR schemes for
any Year in excess of 20% or such other limit as may have been stipulated by the
Commission through Order, on a request made by the Generating Company or
Licensee or MSLDC.”
MSLDC would like to again humbly submit here that a significant portion of schemes
capitalised within MSLDC are of low value schemes (less than Rs. 100 Lakhs), and includes
capitalisation of items procured on a continuous basis such as Furniture for Office, Fire
Alarm System, Battery Sets with Charger, Online STOA software/hardware, Office
equipment including Servers, PCs, Printers, Laptop, Xerox machine, Firewalls, Routers, LAN
Components, cables, switches, etc. Thus, considering the varied and intermittent nature of
asset addition of lower value, it is difficult to prepare a DPR for the same.
In view of the above, and in accordance with the provision of the MYT Regulations, 2015, it
is humbly requested that, the Hon’ble Commission may please allow the capitalization
proposed towards non-DPR scheme as claimed in the present Petition and not apply the
criteria of 20% in case of MSLDC.
MSLDC humbly requests the Hon’ble Commission to approve the revised Capital
Expenditure and Capitalisation submitted above for FY 2017-18.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 51
6.5 Depreciation
The Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2015
under Regulation 27 specifies as under:
“27.1 The Generating Company, Licensee, and MSLDC shall be permitted to
recover depreciation on the value of fixed assets used in their respective
Businesses, computed in the following manner:
(a) The approved original cost of the fixed assets shall be the value base for
calculation of depreciation:
Provided that the depreciation shall be allowed on the entire capitalised
amount of the new assets after reducing the approved original cost of the
retired or replaced or de-capitalised assets.
(b) Depreciation shall be computed annually based on the straight line method
at the rates specified in the Annexure I to these Regulations:
Provided that the Generating Company or Licensee or MSLDC shall ensure
that once the individual asset is depreciated to the extent of seventy percent,
remaining depreciable value as on 31st March of the year closing shall be
spread over the balance Useful Life of the asset including the Extended Life,
as provided in this Regulation:
...”
MSLDC submits that depreciation for FY 2017-18 has been computed considering the
depreciation rates in accordance with the MERC MYT Regulations, 2015 and based on the
capitalisation projected during the year. While computing the Depreciation for FY 2017-18,
SLDC has considered the depreciation towards the asset Scheme-Computer software/IT
Equipment and corresponding depreciation with a rate of 15% as approved by the Hon’ble
Commission in Case No. 20 of 2016.
The projected Depreciation for FY 2017-18 is Rs. 346.69 Lakh as against the Commission’s
approved depreciation of Rs. 415.34 Lakh in Order in Case No. 20 of 2016. The revised
depreciation for FY 2017-18 estimated lower as compared to approved depreciation in Case
No. 20 of 2016 due to reduced capitalisation in the past years.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 52
Table 39: Depreciation for FY 2017-18
(Rs. Lakh)
Particulars
FY 2017-18
MERC Order
(Case No. 20 of 2016) Revised Estimate
Depreciation 415.34 346.69
Accordingly, MSLDC humbly requests to approve the projected depreciation for FY 2017-
18. The details of the Fixed Assets and depreciation for FY 2017-18 have been provided in
Form F4 of MTR Petition Formats.
6.6 Interest & Financial Charges
The Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2015
under Regulation 29 specifies as under:
“
29.1 The loans arrived at in the manner indicated in Regulation 26 on the assets
put to use shall be considered as gross normative loan for calculation of
interest on loan:
Provided that in case of retirement or replacement or de-capitalisation of
assets, the loan capital approved as mentioned above, shall be reduced to the
extent of outstanding loan component of the original cost of such assets based
on documentary evidence.
29.2 The normative loan outstanding as on April 1, 2016, shall be worked out by
deducting the cumulative repayment as admitted by the Commission up to
March 31, 2016, from the gross normative loan.
29.3 The repayment during each year of the Control Period from FY 2016-17 to FY
2019-20 shall be deemed to be equal to the depreciation allowed for that year.
29.4 Notwithstanding any moratorium period availed, the repayment of loan shall
be considered from the first year of commercial operation of the Scheme and
shall be equal to the annual depreciation allowed.
29.5 The rate of interest shall be the weighted average rate of interest computed on
the basis of the actual loan portfolio at the beginning of each year:
Provided that at the time of Truing-up, the weighted average rate of interest
computed on the basis of the actual loan portfolio during the concerned year
shall be considered as the rate of interest:
Provided further that if there is no actual loan for a particular year but
normative loan is still outstanding, the last available weighted average rate of
interest for actual loan shall be considered:
Provided also that if the Generating Company or the Licensee or the MSLDC,
as the case may be, does not have actual loan even in the past, the weighted
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 53
average rate of interest of its other Businesses regulated by the Commission
shall be considered:
Provided also that if the Generating Company or the Licensee or the MSLDC,
as the case may be, does not have actual loan, and its other Businesses
regulated by the Commission also do not have actual loan even in the past,
then the weighted average rate of interest of the entity as a whole shall be
considered:
Provided also that if the entity as a whole does not have actual loan, then the
Base Rate at the beginning of the respective year shall be considered as the
rate of interest for the purpose of allowing the interest on the normative loan.
29.6 The interest on loan shall be computed on the normative average loan of the
year by applying the weighted average rate of interest:
Provided that at the time of Truing-up, the normative average loan of the
concerned year shall be considered on the basis of the actual asset
capitalisation approved by the Commission for the year.
29.7 The above interest computation shall exclude interest on loan amount,
normative or otherwise, to the extent of capital cost funded by Consumer
Contribution, Deposit Works, Grants or Capital Subsidy.
29.8 The finance charges incurred for obtaining loans from financial institutions
for any Year shall be allowed by the Commission at the time of Truing-up,
subject to prudence check.
29.9 The excess interest during construction on account of time and/or cost overrun
as compared to the approved completion schedule and capital cost or on
account of excess drawl of the debt funds disproportionate to the actual
requirement based on Scheme completion status, shall be allowed or
disallowed partly or fully on a case to case basis, after prudence check by the
Commission:
Provided that where the excess interest during construction is on account of
delay attributable to an agency or contractor or supplier engaged by the
Generating Entity or the Transmission Licensee, any liquidated damages
recovered from such agency or contractor or supplier shall be taken into
account for computation of capital cost:
Provided further that the extent of liquidated damages to be considered shall
depend on the amount of excess interest during construction that has been
allowed by the Commission.
29.10 The Generating Company or the Licensee or the MSLDC, as the case may be,
shall make every effort to re-finance the loan as long as it results in net
savings on interest and in that event, the costs associated with such re-
financing shall be borne by the Beneficiaries and the net savings shall be
shared between the Beneficiaries and them in the ratio of 2:1, subject to
prudence check by the Commission:
Provided that the Generating Company or the Licensee or the MSLDC, as the
case may be, shall submit documentary evidence of the costs associated with
such re-financing:
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 54
Provided further that the net savings in interest shall be calculated as an
annuity for the term of the loan, and the annual net savings shall be shared
between the entity and Beneficiaries in the specified ratio.
29.11 Interest shall be allowed only on the amount held in cash as security deposit
from Transmission System Users, Distribution System Users and Retail
consumers at the Base Rate as on 1stApril of the Year for which the interest is
payable, plus 150 basis points:
Provided that at the time of Truing-up, the interest on the amount of security
deposit for the year shall be considered on the basis of the actual interest paid
by the Licensee during the year, subject to prudence check by the
Commission.”
The debt requirement for the proposed capital expenditure in the FY 2017-18 is envisaged to
be funded by normative loans only, and no additional loan allocation from MSETCL has
been considered as of now. However, for the purpose of computation of interest expense for
FY 2017-18, interest expense pertaining to normative loan as well as outstanding actual loan
allocated by MSETCL, has been considered. For the purpose of estimation of Interest Cost
corresponding to new loans for Capital Expenditure Schemes in FY 2017-18, MSLDC has
considered Interest Costs based on normative debt-equity of 70:30 in line with MYT
Regulations, 2015. The same has been considered to calculate the addition to the normative
loan amount during FY 2017-18. Further, MSLDC has considered the weighted average rate
interest of the actual loan portfolio for computing the interest expenses for FY 2017-18.
Further, in accordance provisions of the MERC MYT Regulations, 2015, the repayment of
loan has been considered equivalent to depreciation claimed during the respective years of
the Control Period.
MSLDC has enclosed the documentary evidence of Actual Loan borrowed for Long Term
Loan, in Annexure 15. Further, there is only one long term loan borrowed from PFC, hence,
MSLDC has considered the actual Interest Rate w.r.t. PFC Loan.
The details of existing loans allocated to MSLDC by MSETCL are as under:
Table 40: Details of Existing Loans allocated to MSLDC by MSETCL
(Rs. Lakh)
Sr.
No.
Particulars FY 2017-18
Loan No. 21603009
1 Opening Loan 28.36
2 Repayment during the year 22.69
3 Closing balance 5.67
4 Rate of Interest 11.00%
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 55
Sr.
No.
Particulars FY 2017-18
5 Interest Chargeable during the year 2.19
The interest on Loan for FY 2017-18 is shown in Table as below:
Table 41: Interest on Loan for FY 2017-18
(Rs. Lakh)
Particulars
FY 2017-18
MERC Order
(Case No. 20 of 2016) Revised Estimate
Interest on Loan 212.04 231.27
6.7 Return on Equity
The Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2015
under Regulation 31 specifies as under:
“28 Return on Equity
28.1 ...
28.2 Return on equity for the Transmission Licensee, Distribution Wires Business
and MSLDC shall be allowed on the equity capital determined in accordance
with Regulation 26 for the assets put to use, at the rate of 15.5 per cent per
annum in Indian Rupee terms, and for the Retail Supply Business, Return on
equity capital shall be allowed on the amount of equity capital determined in
accordance with Regulation 26 at the rate of 17.5 per cent per annum in
Indian Rupee terms.
28.3 The return on equity shall be computed in the following manner:
(a) Return at the allowable rate as per this Regulation, applied on the amount
of equity capital at the commencement of the Year; plus
(b) Return at the allowable rate as per this Regulation, applied on 50 per cent
of the equity capital portion of the allowable capital cost, for the investments
put to use in Generation Business or Transmission Business or Distribution
Business or MSLDC, for such Year.”
MSLDC has worked out the Return on Equity (RoE) for Control Period from FY 2017-18 in
accordance with the aforementioned Regulations. RoE projected for FY 2017-18 is based on
the opening equity and the equity added owing to the projected Capitalisation during the year.
MSLDC has considered RoE at rate of 15.5% on the opening equity as well as on 50% of the
equity contribution during year, which is 30% of the asset addition during the year. The
projected RoE for FY 2017-18 is shown in the table below:
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 56
Table 42: Return on Equity for FY 2017-18
(Rs. Lakh)
Sr.
No. Particulars
FY 2017-18
MERC Order
(Case No. 20 of 2016) Estimated
Provisional
True-Up
requirement
Return on Equity
Computation
1 Return on Regulatory Equity at
the beginning of the year 241.06
2 Return on Regulatory Equity
addition during the year 8.44
Total Return on Equity 231.20 249.50 18.30
MSLDC humbly requests the Hon’ble Commission to approve above Return on Equity as
projected for FY 2017-18.
The details of the Return on Equity for FY 2017-18 have been provided in Form F10 of
MTR Petition Formats.
6.8 Reactive Energy Charges
In context of the detailed rationale provided in earlier chapter regarding Reactive Energy
income/expense, and since the mechanism for reactive energy settlement is being discussed
and finalized under the GCC meetings, MSLDC has not claimed any income/expense under
this heads for FY 2017-18.
6.9 Income Tax
In context of MSLDC’s submissions regarding Income Tax in the previous chapters, MSLDC
has not claimed Income Tax for the FY 2017-18.
6.10 Non-Tariff Income
The Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2015
under Regulation 95 specifies as under:
“95.1 The amount of Non-Tariff Income relating to the MSLDC as approved by the
Commission shall be deducted from the Aggregate Revenue Requirement in
determining the Fees and Charges of the MSLDC:
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 57
Provided that the MSLDC shall submit full details of its forecast of Non-Tariff
Income to the Commission in such form as may be stipulated by the
Commission.
95.2 The Non-Tariff Income shall include:
a) Income from sale of scrap;
b) Income from investments;
c) Interest income on advances to suppliers/contractors;
d) Income from rental from staff quarters;
e) Income from sale of tender documents;
f) Any other Non-Tariff Income:
Provided that the interest earned from investments made out of Return on
Equity of the MSLDC shall not be included in Non-Tariff Income.”
The income from investments expected pertaining to the investments made during past years
in accordance with BR 97/12dated 2nd February, 2015 and subsequent note approved by
MSETCL management dated 14 July 2015, constitutes the major portion of the Non-tariff
income projected for FY 2017-18. The details of the Non- Tariff Income for FY 2017-18
have been provided in Form F11 of MTR Petition Formats.
Table 43: Non-Tariff Income for FY 2017-18
(Rs. Lakh)
Particulars
FY 2017-18
MERC Order
( Case No. 20 of 2016) Estimated
True-Up
Requirement
Non-Tariff Income 17.18 213.88 196.70
MSLDC humbly requests the Hon’ble Commission to approve above expenses towards Non-
Tariff Income.
6.11 Income from Open Access Charges& Monthly Operating Charges
MSLDC has estimated income from Open Access Charges of Rs. 1187.85 Lakh for FY 2017-
18 against approved in Case 20 of 2016 of Rs. 1077.31 Lakhs. The same has been estimated
based on the on actual revenue earned during first half of FY 2017-18 from Scheduling
charges and Rescheduling charges.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 58
Table 44: Income from Open Access charges for FY 2017-18
(Rs. Lakh)
Particulars
FY 2017-18
MERC Order
( Case No. 20 of 2016) Estimated
Prov. True-
Up
Requirement
Income from open access charges 1077.31 1187.85 110.54
6.12 Income from Monthly Operating Charges
MSLDC has estimated income from Monthly Operating Charges for FY 2017-18 at the same
level as that of approved in Case No. 20 of 2016.
Table 45: Income from Monthly Operating Charges for FY 2017-18
(Rs. Lakh)
Particulars
FY 2017-18
MERC Order
( Case No. 20 of 2016) Estimated
Prov. True-
Up
Requirement
Income from Monthly Operating
Charges
1879.60 1879.60 0.00
6.13 Summary of True-Up for FY 2017-18
Based on the above discussion, the head-wise projected expenses for FY 2017-18 for
provisional true up is summarised in Table below:
Table 46: Summary of Provisional True-up of FY 2017-18
(Rs. Lakh)
Sr.
No. Particulars
FY 2017-18
Approved in
Order 20 of
2016
April to March
(Estimated)
Provisional
Truing Up
Requirement
1 Operation & Maintenance Expenses 2021.42 2146.23 124.81
2 Depreciation Expenses 415.34 346.69 (68.65)
3 Interest on Loan Capital 212.04 231.27 19.23
4 Interest on Working Capital 43.57 47.83 4.26
5 RLDC Fees and WRPC Charges 712.36 712.36 0.00
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 59
Sr.
No. Particulars
FY 2017-18
Approved in
Order 20 of
2016
April to March
(Estimated)
Provisional
Truing Up
Requirement
6 Reactive Energy Charges paid to
Generators/TSUs 0.00 0.00 0.00
7 Income Tax 0.00 0.00 0.00
8 Total Revenue Expenditure 3404.72 3484.38 79.66
9 Return on Equity Capital 231.20 249.50 18.30
10 Total Expenditure for MSLDC 3635.93 3733.88 97.95
11 Less: Non-Tariff Income 17.18 213.88 196.70
12 Less: Income from Open Access
charges 1077.31 1187.85 110.54
13 Less: Income from Reactive Energy
Charges 0.00 0.00 0.00
Gross AFC 2541.45 2332.15 (209.30)
15 Less: Adjustment of Surplus 661.84 0.00
16 Annual Fixed Charges for MSLDC 1879.60 2332.15 452.55
17 Revenue approved/actual 1879.60 1879.60 0.00
18 Stand-alone Revenue gap/(surplus)
452.55
Thus, on Provisional Truing up for FY 2017-18, there is gap of Rs. 452.55 Lakh, treatment of which
have been considered as part of the claim for FY 2018-19 and FY 2019-20.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 60
7 Revised ARR for FY 2018-19 to FY 2019-20
7.1 Operation &Maintenance
As per the recently proposed amendment in MYT Regulations, 2015 reproduced under
previous chapter for FY 2017-18, for projection of O&M expense for MSLDC over the
Control Period, base year O&M expense to be considered as trued-up O&M expense FY
2015-16 on which appropriate escalation factor as prescribed under the amended provision
with CPI: WPI weightage for 80: 20 has to be considered. The O&M expense for FY 2015-16
after adjusting for sharing of gains and losses works out to Rs. 2208 Lakhs. The escalation
factor arrived at based on the aforesaid provision is 7.34% and 6.34 % after considering an
efficiency factor of 1%. Accordingly, the O&M expense for FY 2017-18 works out to the
following.
Table 47: O&M Expenses for Control Period
(Rs. Lakh)
Particulars
FY 2018-19 FY 2019-20
MERC Order
(Case No. 20 of
2016)
Revised
Projection as per
MYT
Amendment*
MERC
Order
(Case No.
20 of 2016)
Revised
Projection as
per MYT
Amendment*
O&M expenses 2081.45 2633.65 2143.27 2800.68
* Expenses worked out on normative basis and as per amendment
Premise for projection of O&M expense for FY 2018-19 and FY 2019-20 in the MTR
Petition
MSLDC would like to humbly submit that O&M expense for the years FY 2018-19 to FY
2019-10, would be influenced by the following key factors, which would not have been
factored while deriving norms for MSLDC.
a) Increase in number of Employees owing to sanction of additional number of
employees: Vide Board Resolution No. 118/12 dated July 15, 2017, the proposal
placed by CE, SLDC before the Board, and sanction was accorded for the additional
staff requirement. As per the same, additional 41 employees have been sanctioned to
SLDC, out of which 15 employees are expected by March 31st 2018, another 15
employees in FY 2018-19 and balance 11 in FY 2019-20. The copy of the above
referred BR is enclosed as Annexure-6. The increase in 41 employees from the
prevailing strength of 109 employees over the period till FY 2019-20 years (15 out of
41 employees to get added in FY 2017-18, another 15 to get added in FY 2018-19 and
balance 11 to get added in FY 2019-20) will impact the O&M expense significantly
and therefore it is requested to be considered on realistic projection basis.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 61
b) Impact of Wage Revision due on April 2018: The wage revision agreement in done
once in five years which is also required to be considered as part of projection of
employee expense as it is uncontrollable factor and is not captured in inflation. The
next wage revision in due w.e.f. from April 2018. Accordingly, the same has to be
factored in projection of O&M expense for FY 2018-19. The impact of wage revision
in FY 2018-19 is expected to be 20% in line with MSETCL MTR Petition, over
employee expense of FY 2017-18.
c) Impact of annual inflation: Over and above the impact on O&M expense due to the
above referred factors, the increase in O&M expenses due to inflation has to be
factored in while projecting O&M expenses for the period from FY 2017-18 to FY
2019-20.
In view of the above factors, following methodology and escalation factors has been
considered for projection of employee expense for the period from FY 2018-19 to FY 2019-
20.
O&M heads FY 2018-19 FY 2019-20
Employee Expense Considers a) Impact of increase in
no. of sanctioned employees from
129 to 144 in the year
b) Impact of Wage revision due
w.e.f April 2018
c) Inflation (5 year average CPI)
Considers a) Impact of increase in
no. of sanctioned employees from
144 to 155 in the year
b) Inflation (5 year average CPI)
A&G Expense For A&G heads dependant on no.
of employees, considers effect of
increase in number of employees
during the year and the annual
inflation factor (5-year average
inflation with WPI: CPI weightage
of 60:40)
For A&G heads independent of
no. of employees, only increase
owing to inflation is considered
For A&G heads dependant on no.
of employees, considers effect of
increase in number of employees
during the year and the annual
inflation factor (5-year average
inflation with WPI: CPI
weightage of 60:40)
For A&G heads independent of
no. of employees, only increase
owing to inflation is considered
R&M Expense Increase owing to inflation (5-year
average WPI) is considered.
Increase owing to inflation (5-
year average WPI) is considered.
Escalation Rates considered for projection of Employee, A&G and R&M expenses for FY
2018-19 to FY 2019-20.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 62
Escalation factor considered for Employee Expense projection
Employee Expense projection FY 2018-19 FY 2019-20
Escalation Factor owing to increase in
employee 11.63% 7.64%
Inflation Factor (5 year Avg CPI) 7.23% 7.23%
Wage Revision w.e.f April 2018 20% 0%
Total Escalation rate 38.86% 14.87%
Escalation factor considered for A&G Expense projection
For A&G heads dependent on no. of employees)
FY 2018-19 FY 2019-20
Escalation Factor owing to increase in
employee 11.63% 7.64%
Inflation Factor (5 year Avg of WPI:CPI as
60:40) 4.88% 4.88%
Total Escalation rate 16.51% 12.52%
For A&G heads independent on no. of employees)
Inflation Factor (5 year Avg of WPI:CPI as
60:40) 4.88% 4.88%
Escalation factor considered for R&M Expense projection
R&M Expense projection FY 2018-19 FY 2019-20
Inflation factor (5-year average WPI) 3.31% 3.31%
Based on the above, the O&M expense for FY 2018-19 and FY 2019-20 has been projected
as shown in the following table:
Table 48: Detailed O&M Expenses for Control Period
(Rs. Lakh)
Sr.
No. Particulars
FY 2018-19 FY 2019-20
Approved in
Case No. 20
of 2016
FY 2018-19
Approved in
Case No. 20
of 2016
FY 2019-20
Projected
Projected
1 O&M Expenses
2 Employee Expenses
1958.25
2249.51
3 A&G Expenses
606.42
669.08
4 R&M Expenses
223.89
229.97
5 Total O&M Expenses 2,081.45 2,788.56 2,143.27 3,148.55
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 63
MSLDC humbly requests the Hon’ble Commission to approve above O&M expenses for the
Period. FY 2018-19 & FY 2019-20.
The details of O&M Expenses are provided in Form F2 of MTR Petition Formats.
7.2 Interest on Working Capital
The Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2015
under Regulation 31 specifies as under:
“31.5 MSLDC
(a) The working capital requirement of the MSLDC shall cover:
(i) Operation and maintenance expenses for one month;
(ii) One-and-a-half-month equivalent of the expected revenue from levy
of Annual Fixed Charges:
Provided further that for the purpose of Truing-up for any year, the working
capital requirement shall be re-computed on the basis of the values of
components of working capital approved by the Commission in the Truing-up
before sharing of gains and losses;
(b) Rate of interest on working capital shall be on normative basis and shall
be equal to the Base Rate as on the date on which the Petition for
determination of Fees and Charges is filed, plus 150 basis points:
Provided that for the purpose of Truing-up for any year, interest on working
capital shall be allowed at a rate equal to the weighted average Base Rate
prevailing during the concerned Year plus 150 basis points.”
MSLDC has considered the aforementioned methodology specified in the MYT Regulations,
2015 for calculation of IoWC for FY 2018-19 to FY 2019-20.
For computing the interest on working capital for future years, MSLDC has considered the
interest rate of 10.80 % same as that approved under Case No. 20 of 2016.
The Working Capital and interest computation for MSLDC for FY 2018-19 to FY 2019-20
are shown in the table below:
Table 49: Interest on Working Capital for Control Period
(Rs. Lakh)
Sr.
No. Particulars
Approved in
Case No.20 of 2016
Ensuing Years
(Projected)
FY
2018-19
FY
2019-20
FY
2018-19
FY
2019-20
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 64
1
Interest on Working Capital
Requirement
414.10 421.65 623.00 720.51
1.1 Rate of Interest (% p.a.) - SBI Base
Rate plus 150 basis points 10.80% 10.80% 9.45% 9.45%
1.2 Interest on Working Capital 44.72 45.54 58.87 68.09
The normative IoWC projected are higher compare to approved in Case No. 20 of 2016,
owing to increase in revised O&M expense and revised receivables projected in the present
MTR Petition. MSLDC humbly requests the Hon’ble Commission to approve Interest on
Working Capital for the Control Period on normative basis. The detailed computation of
normative interest on working capital has been given in the Form 6 of MTR Petition
Formats.
7.3 RLDC Fees & WRPC Charges
RLDC fees and charges has been considered at the same level as approved by the Hon’ble
Commission in Case 20 of 2016.
Table 50: RLDC Fee & WRPC Charges for Control Period
(Rs. Lakh)
Sr.
No. Particulars
Case 20 of 2016 Ensuing Years
FY 2018-
19
FY 2019-
20 FY 2018-19 FY 2019-20
Approved Approved Projected Projected
1 RLDC Fees and Charges
April to March 747.51 796.75 747.51 796.75
2 WRPC Charges
WRPC Secretariat
Charges 11.78 12.55 11.78 12.55
Total - RLDC Fees and
WRPC Charges 759.29 809.31 759.29 809.31
Accordingly, MSLDC requests the Hon’ble Commission to proposed RLDC Fees and WRPC
Charges for FY 2018-19 and FY 2019-20. MSLDC shall approach the Commission with the
actual numbers at the time of Review or Truing up.
The details of RLDC Fees and WPRC Charges are also provided in Form F7of MTR Petition
Formats.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 65
7.4 Capital Expenditure Plan and Capitalisation
Managing the grid is becoming increasingly complex considering the large number of players
connected to it and the associated transactions involved. The task of a grid operator is
growingly challenging owing to the paradigm changes expected in the Indian Grid with large
scale integration of Renewable Energy projects to the grid, establishment of ancillary services
market, managing large scale grid connected storage solutions, operating and settlement of
spinning reserve market etc. A robust metering and communication infrastructure with real-
time data transfer capability at all levels of grid is of utmost importance so as to monitor and
control the gird in the most efficient manner in these growing challenging situations. Further,
with the growing complexities in the grid, a more de-centralized approach of controlling and
management is expected to be more effective.
In this context, so as to overcome these challenges, MSLDC has planned for various schemes
for implementation in the new Control Period during the 3rd Control Period FY 2016-17 to
FY 2019-20 and submitted to the Hon’ble Commission for approval vide our MYT Petition
in Case No. 20 of 2016. Over almost 2 years since start of 3rd Control Period, MSLC
capitalized various schemes and implementation of various other schemes are under
implementation. Considering the actual capitalization achieved in the past period and the
progress made so far, there has been some revision in the capitalization proposed during the
ensuing years viz. FY 2018-19 to FY 2019-20.
In addition to the various ongoing DPR and non-DPR schemes, MLSDC envisages capital
expenditure and capitalization towards several new schemes during FY 2018-19 and FY
2019-20 including establishment of sub-SLDCs at Nashik and Pune. The schemes so planned
have been clubbed together under the following broad heads depending on the nature of such
schemes:
a) Enhancement of real time data acquisition
b) Energy accounting System
c) Off line System
d) Infrastructure Development
Proposed Establishment of Sub-LDCs
Maharashtra system grid is expanding at faster pace, interconnection points with CTU are
also increasing as per CTU plan. Further, number of TSUs including full open access
consumers is also increasing. These TSUs are spread all over the geographical area and
connected to grid at 220/132 kV voltage level. Hence, it is envisaged that more decentralized
management and control of generation and load is required for effective grid operations.
Other states like Gujarat, Karnataka, Uttar Pradesh and Madhya Pradesh are operating their
respective SLDCs with three to four Sub-LDCs. In this context, MSLDC is contemplating to
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 66
set up new Sub-LDCs at locations viz., Nashik and Pune. It is planned to take up the
feasibility study and initial survey towards setting up these sub-LDCs. However, detailed
estimate is yet to be prepared for such scheme. MSLDC is preparing proposal on the same for
in-principle approval of MSETCL Management. After in principle approval to the scheme,
the proposal shall be put up to the Board of MSETCL for approval. Upon approval of the
Board, MSLDC shall submit the DPR for approval of the Hon’ble Commission in due course.
The Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2015
under Regulation 90 specifies as under:
“90.1 The MSLDC shall submit a detailed capital investment plan, financing plan
and physical targets for each Year of the Control Period based on the
operational requirements prescribed by the Commission and
recommendations of various Committees constituted for looking into matters
related to strengthening and ring fencing of the State Load Despatch Centres
by the Ministry of Power, Government of India or any such other statutory
authorities, to the Commission for approval, as a part of the Multi-Year
Aggregate Revenue Requirement for the entire Control Period.
90.2 The Capital Investment Plan shall be a least cost plan for undertaking
investments and shall cover all capital expenditure projects of a value
exceeding Rs. One crore or any other limit as may be stipulated by the
Commission from time to time and shall be in such form as may be stipulated
by the Commission.
90.3 The Capital Investment Plan shall be accompanied by such information,
particulars and documents as may be required showing the need for the
proposed investments, alternatives considered, cost/benefit analysis and other
aspects that may have a bearing on the MSLDC Fees and Charges.
90.4 The Commission shall consider the Capital Investment Plan along with the
Multi-Year Aggregate Revenue Requirement for the entire Control Period
submitted by the MSLDC taking into consideration the prudence of the
proposed expenditure and estimated impact on MSLDC Fees and Charges.
90.5 The MSLDC shall submit, along with the Petition for determination of
Aggregate Revenue Requirement or along with the Petition for Mid-term
Performance Review, as the case may be, details showing the progress of
capital expenditure projects, together with such other information, particulars
or documents as the Commission may require to assess such progress.”
While proposing the capital expenditure plan, MSLDC has taken due care to club together
various schemes of similar nature and proposed several new DPR schemes. DPR for those
new schemes are under preparation and shall be submitted in due course for kind
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 67
consideration and necessary approval. Further, there were certain schemes whose estimated
value is less than the threshold value of Rs. 100 Lakh specified by the Hon’ble Commission
which has been shown as non-DPR schemes.
Following table presents the revised capital expenditure and capitalization plan of MSLDC
during the period from FY 2018-19 to FY 2019-20.
Table 51: Projected Capitalization for FY 2018-19
(Rs. Lakh)
Capex Scheme
Status of in-
principle
approval
Capital
Expenditure Capitalization
a) DPR schemes
Enhancement of real time data
acquisition- DPR
Establishment of real time data
acquisition from 80 nos. of 220 kV
substations at SLDC Kalwa Approved 150.00 150.00
Hardware/Software for SCADA system Approved 210.00 120.00
Infrastructure Development-DPR
Office Equipments ( Servers, PCs,
Printers, Laptop, Xerox m/c, Firewalls,
Routers, LAN Components, cables,
switches etc.)
Yet to be
Submitted 80.00 80.00
Construction of Compound Wall and
widening and asphalting of road
Yet to be
Submitted 150.00 110.00
Disaster Recovery System/Back Up
Yet to be
Submitted 50.00 25.00
IT Security
Yet to be
Submitted 80.00 47.50
Fire Alarm/Fire Fighting System Approved 150.00 150.00
Battery Sets with Charger
Yet to be
Submitted 115.00 115.00
Establishment of Sub-LDC at Pune and
Nasik(Excluding Expenditure on Civil
Infrastructure)
Yet to be
Submitted 50.00 25.00
Backup Control Centre/ICCP data Links
Yet to be
Submitted 100.00 100.00
Supply, Installation, Testing and
Commissioning of 20 DCs at RE Pooling
Stations Approved 52.50 52.50
b) Non-DPR Schemes
Enhancement of real time data acquisition 60.00 40.00
Energy accounting System 37.00 27.00
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 68
Capex Scheme
Status of in-
principle
approval
Capital
Expenditure Capitalization
Off line System 20.00 25.00
Infrastructure Development (Interior
& Furnishing, Air Conditioning, Security
Systems, Testing equipments & tools,
Furniture, Auxiliary supplies, etc.) 230.00 187.50
WAM/PMU based system 30.00 15.00
Cyber security and data security 20.00 10.00
Total DPR and Non DPR (a+b) 1584.50 1279.50
Table 52: Projected Capitalization for 2019-20
(Rs. Lakh)
Capex Scheme Status of
approval
Capital
Expenditure Capitalization
a) DPR schemes
Enhancement of real time data
acquisition- DPR
Establishment of real time data acquisition
from 80 nos. of 220 kV substations at
SLDC Kalwa Approved 150.00 150.00
Hardware/Software for SCADA system Approved 260.00 235.00
Energy Accounting Systems - DPR
New FBSM Software/hardware
Yet to be
Submitted 600.00 600.00
Infrastructure Development-DPR
Office Equipments ( Servers, PCs, Printers,
Laptop, Xerox m/c, Firewalls, Routers,
LAN Components, cables, switches etc.)
Yet to be
Submitted
70.00 75.00
Construction of Compound Wall and
widening and asphalting of road
Yet to be
Submitted 0.00 75.00
Disaster Recovery System/Back Up
Yet to be
Submitted 60.00 55.00
Back up Control Centre/ICCP data links
Yet to be
Submitted 50.00 50.00
IT Security
Yet to be
Submitted 60.00 70.00
Fire Alarm/Fire Fighting System Approved 118.00 118.00
Battery Sets with Charger
Yet to be
Submitted 40.00 40.00
Establishment of Sub-LDC at Pune and
Nasik(Excluding Expenditure on Civil
Yet to be
Submitted 350.00 200.00
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 69
Capex Scheme Status of
approval
Capital
Expenditure Capitalization
Infrastructure)
Supply, Installation, Testing and
Commissioning of 20 DCs at RE Pooling
Stations Approved 52.50 52.50
b) Non-DPR Schemes
Enhancement of real time data acquisition
20.00 40.00
Energy accounting System
21.00 29.00
Off line System
10.00 15.00
Infrastructure Development (Interior &
Furnishing, Air Conditioning, Security
Systems, Testing equipments & tools,
Furniture, Auxiliary supplies, etc.)
120.00 175.00
WAM/PMU based system
0.00 15.00
Cyber security and data security
20.00 20.00
Total DPR & Non DPR schemes (a+b)
2001.50 2014.50
Capitalization of non-DPR schemes over the Control Period
As regards capitalization towards non-DPR schemes, MSLDC would like to requested that,
the Hon’ble Commission may please allow the capitalization proposed towards non-DPR
scheme be allowed as claimed in the present Petition and not apply the criteria of 20% in case
of MSLDC in line with the detailed rationale provided under the previous chapters.
MSLDC humbly requests the Hon’ble Commission to approve the Capital Expenditure and
Capitalisation submitted above for FY 2018-19 to FY 2019-20.
7.5 Depreciation
MSLDC has calculated depreciation for the Period from FY 2018-19 to FY 2019-20 in
accordance with the MERC MYT Regulations, 2015 and based on the projected capitalisation
during each year of the Control Period. The depreciation for the Control Period from FY
2018-19 to FY 2019-20 has been estimated as shown in Table below:
Table 53: Depreciation Estimated for New Control Period
(Rs. Lakh)
Particulars
FY 2018-19 FY 2019-20
Approved in
Case 20 of 2016 Projected
Approved in
Case 20 of 2016 Projected
Depreciation
Expenses
448.75 383.48 479.92 398.12
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 70
The reduction in depreciation expense are owing to lower capitalisation projected during the
year compared to approved capitalisation in Case No. 20 of 2016. Accordingly, MSLDC
requests to approve the projected depreciation for FY 2018-19. The details of the Fixed
Assets and depreciation for the Control Period from FY 2018-19 to FY 2019-20 have been
provided in Form F4 of MTR Petition Formats.
7.6 Interest & Financial Charges
The debt requirement for the proposed capital expenditure in the FY 2018-19 and FY 2019-
20 is envisaged to be funded by normative loans only, and no additional loan allocation from
MSETCL has been considered as of now. However, for the purpose of computation of
interest expense for FY 2017-18, interest expense pertaining to normative loan as well as
outstanding actual loan allocated by MSETCL, has been considered. For the purpose of
estimation of Interest Cost corresponding to new loans for Capital Expenditure Schemes in
FY 2018-19 and FY 2019-20, MSLDC has considered Interest Costs based on normative
debt-equity of 70:30 in line with MYT Regulations, 2015. The same has been considered to
calculate the addition to the normative loan amount during FY 2017-18. Further, MSLDC has
considered the weighted average rate interest of the actual loan portfolio for computing the
interest expenses for FY 2018-19 and FY 2019-20. Further, in accordance provisions of the
MERC MYT Regulations, 2015, the repayment of loan has been considered equivalent to
depreciation claimed during the respective years of the Control Period.
The details of existing loans allocated to MSLDC by MSETCL are as under:
Table 54: Details of Existing Loans allocated to MSLDC by MSETCL
(Rs. Lakh)
Sr. No. Particulars FY 2018-19
Loan No. 21603009
1 Opening Loan 5.67
2 Repayment during the year 5.67
3 Closing balance 0.00
4 Rate of Interest 11.00%
5 Interest Chargeable during the year 0.31
The interest on Loan for FY 2018-19 and FY 2019-20 is shown in Table as below:
Table 55: Interest on Loan for FY 2018-19 to FY 2019-20
(Rs. Lakh)
Particulars FY 2018-19 FY 2019-20
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 71
MERC Order
(Case No. 20 of
2016)
Revised
Estimate
MERC Order
(Case No. 20 of
2016)
Revised
Estimate
Interest on Loan 194.23 185.23 161.87 267.22
The variation in loan expense are owing to difference in capitalisation projected during the
respective years compared to approved capitalisation in Case 20 of 2016. Accordingly,
MSLDC requests to approve the projected loan expenses for FY 2018-19 and FY 2019-20.
The details of interest expenses from FY 2018-19 to FY 2019-20 have been provided in
Form F5of MTR Petition Formats.
7.7 Return on Equity
MSLDC has worked out the Return on Equity (RoE) for Control Period from FY 2018-19 to
FY 2019-20 in accordance with the MERC MYT Regulations, 2015. RoE projected for the
Control Period from FY 2018-19 to FY 2019-20 is based on the projected year-wise
Capitalisation. MSLDC has considered RoE at rate of 15.5% on the opening equity as well as
on 50% of the equity contribution during year, which is 30% of the asset addition during the
year. The projected RoE for period from FY 2018-19 to FY 2019-20 is shown in the table
below:
Table 56: Return On Equity estimated for FY 2018-19 & FY 2019-20
(Rs. Lakh)
Particulars
FY 2017-18 FY 2018-19
Approved in
Case 20 of 2016 Projected
Approved in
Case 20 of 2016 Projected
1 Return on
Equity 249.02 287.68 259.90 364.27
The increase in RoE projected over the approved RoE is owing to the difference in Opening
Equity considered by MSLDC and allowed in Case No. 20 of 2016 for respective years.
MSLDC humbly requests the Hon’ble Commission to approve above Return on Equity as
projected for Control Period form FY 2018-19 to FY 2019-20.
The details of the Return on Equity for Control Period form FY 2018-19 to FY 2019-20 have
been provided in Form F10of MTR Petition Formats.
7.8 Reactive Energy Charges paid / Income from Reactive Energy Charges
In context of the detailed rationale provided in earlier chapter regarding Reactive Energy
income/expense, and since the mechanism for reactive energy settlement is being discussed
and finalized under the GCC meetings, MSLDC has not claimed any income/expense under
this heads for FY 2018-19 and FY 2019-20.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 72
7.9 Income Tax
In context of MSLDC’s submissions regarding Income Tax in the previous chapters, MSLDC
has not claimed Income Tax for the period FY 2018-19 to FY 2019-20.
7.10 Non-Tariff Income
Regulation 95 of the Maharashtra Electricity Regulatory Commission (Multi Year Tariff)
Regulations, 2015 specifies provision for non-tariff income for MSLDC. The projected non-
tariff income for period from FY 2018-19 to FY 2019-20 is shown in the table below:
Table 57: Non-Tariff Income estimated for FY 2018-19 & FY 2019-20
(Rs. Lakh)
Sr.
No. Particulars
FY 2018-19 FY 2019-20
Approved in
Case 20 of 2016 Projected
Approved in
Case 20 of 2016 Projected
1 Income from
Investments 175.00
150.00
2 Discount received
on prompt
payment to
Vendor
6.78
6.78
3 Miscellaneous
receipts 6.38
6.38
Total 17.18 188.88 17.18 163.88
The income from investments expected pertaining to the investments made during past years
in accordance with BR 97/12 dated 2nd February, 2015 and subsequent note approved by
MSETCL management dated 14 July 2015, constitutes the major portion of the Non-tariff
income projected for FY 2018-19 and FY 2019-20. While projecting the same, reduction is
expected in interest income, due to liquidation of deposits in these years for meeting
operational requirements. As regards other heads of non-tariff income, the same are projected
at the same level of FY 2017-18, for projection purpose.
The details of the Non- Tariff Income for Control Period form FY 2018-19 to FY 2019-20
have been provided in Form F11of MTR Petition Formats.
MSLDC humbly requests the Hon’ble Commission to approve above expenses towards Non-
Tariff Income.
7.11 Income from Open Access Charges
MSLDC has estimated income from Open Access Charges for FY 2018-19 and FY 2019-20
at the same level as approved by the Hon’ble Commission under Case 20 of 2016.
Table 58: Income from Open Access Charges for FY 2018-19 & FY 2019-20
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 73
(Rs. Lakh)
Particulars
FY 2018-19 FY 2019-20
Approved in Case
20 of 2016 Projected
Approved in Case
20 of 2016 Projected
Income from
OA charges 1149.28 1149.28 1226.64 1226.64
7.12 Impact of truing up and provisional truing up
The impact of true up of FY 2015-16 and FY 2016-17, and provisional true up of FY 2017-18
is summarised as below.
Table 59: Impact of truing up Amortized over FY 2018-19 to FY 2019-20
(Rs. Lakh)
Particulars
FY
2018-19
FY
2019-20
Projected Projected
Add: Revenue gap/surplus of FY 2015-16 after final truing-up
(a) (499.10)
Add: Revenue gap/surplus of FY 2016-17 after truing-up (b) (1011.78)
Add: Revenue gap/surplus of FY 2017-18 after provisional
truing-up (c) 452.55
Additional impact due to past period expense &
gap/(surplus) = (a)+(b)+(c ) (1,058.33)
Amortization of Surplus over FY 19 and FY 20 (529.16) (529.16)
Net Annual Fixed Charges for MSLDC 2595.80 3135.88
To avoid significant impact in a single year, which would rather affect the operation of
SLDC, it is proposed to amortise the surplus over FY 2018-19 and FY 2019-20. MSLDC
humbly requests the Hon’ble Commission to approve above charges.
7.13 Summary of ARR for Control Period from FY 2018-19 to FY 2019-20
Based on the above discussion, the head wise projected expenses for Control Period from FY
2018-19 to FY 2019-20 is summarised in Table below:
Table 60: Summary of Annual Fixed Charges for FY 2018-19 to FY 2019-20
(Rs. Lakh)
Sr.
No. Particulars
FY 2018-19 FY 2019-20
Approved in
Order 20 of
2016
Projected
Approved in
Order 20 of
2016
Projected
1 Operation & Maintenance
Expenses 2081.45 2788.56 2143.27 3148.55
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 74
Sr.
No. Particulars
FY 2018-19 FY 2019-20
Approved in
Order 20 of
2016
Projected
Approved in
Order 20 of
2016
Projected
2 Depreciation Expenses 448.75 383.48 479.92 398.12
3 Interest on Loan Capital 194.23 185.23 161.87 267.22
4 Interest on Working Capital 44.72 58.87 45.54 68.09
5 RLDC Fees and WRPC Charges 759.29 759.29 809.31 809.30
6 Reactive Energy Charges paid to
Generators/TSUs 0.00 0.00 0.00 0.00
7 Income Tax 0.00 0.00 0.00 0.00
8 Total Revenue Expenditure 3528.45 4175.44 3639.91 4691.29
9 Return on Equity Capital 249.02 287.68 259.90 364.27
10 Total Expenditure for
MSLDC 3777.47 4463.13 3899.80 5055.56
11 Less: Non-Tariff Income 17.18 188.88 17.18 163.88
12 Less: Income from Open Access
charges 1149.28 1149.28 1226.64 1226.64
13 Less: Income from Reactive
Energy Charges 0.00 0.00 0.00 0.00
Gross AFC 2611.02 3124.97 2655.99 3665.04
Add: Impact of sharing of
G&L
Less: Adjustment of Surplus 685.83 0.00 711.62 0.00
14 Annual Fixed Charges for
MSLDC 1925.19 3124.97 1944.36 3665.04
Revenue approved/actual 1925.19 3124.97 1944.36 3665.04
Standalone Revenue
gap/(surplus) 0.00
0.00
15
Add: Revenue gap/surplus of FY
2015-16 after final truing-up (a) (499.10)
16
Add: Revenue gap/surplus of FY
2016-17 after truing-up (b) (1011.78)
17
Add: Revenue gap/surplus of FY
2017-18 after provisional truing-
up (c)
452.55
18
Additional impact due to past
period expense & gap/(surplus)
= (a)+(b)+(c )
(1058.33)
19 Amortization of Surplus over
FY 2018-19 and FY 2019-20 (529.16) (529.16)
20 Net Annual Fixed Charges for
MSLDC (14)-(21) 2595.80
3135.88
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 75
8 Sharing of MSLDC Charges
As per Regulation 96.1 of the MERC MYT Regulations, 2015, the MSLDC Charges payable
by the Transmission System Users shall be computed on the basis of average of Coincident
Peak Demand (CPD) and Non-Coincident Peak Demand (NCPD). The data for CPD &
NCPD for the period from October 2014 to December-2015 is submitted in the petition.
In this context, the proviso to Regulations 96.1 of the MYT Regulations, 2015 is reproduced
below:
“The MSLDC Charges payable by the Transmission System Users shall be computed
in accordance with the following formula:
AFC(u)(t) = AFC(t) X ([Base TCR(u)](t) / ∑[Base TCR(u)](t))
Where,
AFC(u)(t) = MSLDC Charges to be shared by the Beneficiary (u) for the Yearly
period (t);
AFC(t) = Total MSLDC Charges to be shared by the Beneficiaries for the
Yearly period (t);
Base TCR (u) = [CPD(u)(t) + NCPD(u)(t)] /2
Where,
Base TCR represents the Base Transmission Capacity Right of each Beneficiary (u)
for the Yearly period (t);
CPD (u)(t) = Average Coincident Peak Demand of the Beneficiary (u) for the
Yearly period (t);
NCPD (u)(t) = Average Non-Coincident Peak Demand of the Beneficiary (u) for the
Yearly period (t):
Provided that the Allotted Capacity for long-term Open Access Users, excluding
partial long-term Users, shall be considered in lieu of the average monthly CPD
and NCPD for calculating the Base TCR for Open Access consumers.”
In line with the MYT Order in Case No. 20 of 2016, MSLDC has proposed sharing of
MSLDC charges among the following TSUs.
Table 61: List of TCRs sharing MSLDC Charges for FY 2016-17
Transmission System Users
MSEDCL
TPCL-D
REL-D
BEST
M/s. Mindspace Business Parks Pvt. Ltd. (MBPPL)
Indian Railway-Maharashtra
M/s. Indo Rama Synthetics Ltd. (IRSL)
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 76
Table 62: Base Transmission Capacity Rights for FY 2016-17 and sharing
Transmission System Users MW
(Avg. of CPD & NCPD)
In %
MSEDCL 16106 83.20%
TPCL-D 780 4.03%
REL-D 1360 7.03%
BEST 785 4.05%
MBPPL 14 0.07%
Indian Railway- Maharashtra 305 1.57%
IRSL 10 0.05%
Total 19359 100.00%
For estimating the Base transmission capacity right for the State for future years of the
Control Period the projected Base Transmission Capacity Right for FY 2016-17 has been
escalated by 5%.
MSLDC submits that based on the approved MSLDC Charges for the 3rd Control Period as
per InSTS Order (Case No. 91 of 2016) the CAGR of Base TCR for the 3rd Control Period
works out as 6.60%. Besides the annual escalation for Base TCR as per the InSTS Order for
FY 2018-19 and FY 2019-20 works out to 6.13% and 6.14%. The same may vary based on
revised demand projection approved for the TSUs for FY 2018-19 and FY 2019-20 in their
respective MTR orders. However, for the purpose of projection Base TCR under MTR
petition, MSLDC has assumed an escalation rate of 5% on a conservative basis in its MTR
Petition for revised estimates of MSLDC Charges for FY 2018-19 and FY 2019-20.
Table 63: Projected Base Transmission Capacity Rights for FY 2018-19 to FY 2019-20
(MW)
FY 2018-19 FY 2019-20
Base Transmission Capacity Rights 21342.90 22410.05
Based on the base transmission capacity rights the sharing of MSLDC Charges works out as
under:
Table 64: Sharing of MSLDC Charges for FY 2018-19 to FY 2019-20
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 77
(Rs. Lakh)
Sharing of MSLDC Charges FY 2018-19 FY 2019-20
MSEDCL 2159.60 2608.91
TPCL-D 104.53 126.28
REL-D 182.40 220.35
BEST 105.22 127.11
MBPPL 1.89 2.29
Indian Railway-Maharashtra 40.88 49.38
IRSL 1.29 1.56
Total 2595.80 3135.88
Further, as per the MYT Regulations, 2015, MSLDC Charges per MW per month shall be
computed in accordance with the following formula:
Monthly MSLDC Charges (Rs. / MW / Month) = [AFC(u)(t) ÷ ∑i=1[Base TCR(u)] (t)] ÷ 12
Accordingly, the projected monthly MSLDC Charges works out as under:
Table 65: Proposed MSLDC Charges for FY 2018-19 to FY 2019-20
(Rs. /MW/Month)
Monthly MSLDC Charges FY 2018-19 FY 2019-20
Total MSLDC Charges (Rs. Lakh) 2595.80 3135.88
Base Transmission Capacity Right (MW) 21342.90 22410.05
Proposed MSLDC charges (Rs/MW/Month) 1013.53 1166.10
The detailed computation of sharing of MSLDC charges have been provided in Form F14 of
MTR Petition Formats. MSLDC humbly requests the Hon’ble Commission to approve the
proposed sharing of MSLDC charges and proposed monthly MSLDC charges for each year
of the Control Period.
9 Fees to be charged by MSLDC
The Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2015
under Regulation 97 specifies as under:
“97. Fees to be charged by MSLDC
97.1 The MSLDC shall recover the following Fees as approved by the Commission
from time to time:
a) Registration or Connection Fees per connection from all users connecting
to the Intra-State Transmission System;
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 78
b) Scheduling Fees per day for intra-State Short-term Open Access
transactions;
c) Re-scheduling Fees for each revision in schedule after the finalization of
schedules by the MSLDC on a day-ahead basis or for non-submission of
schedule as per State Grid Code requirements;
d) Short-term Open Access Application Processing Fees;
e) Any other Fees approved by the Commission from time to time.”
9.1 Registration or Connection Fees
The Hon’ble Commission in MSLDC Budget Order in Case No. 218 of 2014 dated 20
October, 2015 has approved Registration or Connection Feesat the rate of Rs. 20,000 per
connection for connecting to the intra-state transmission system (InSTS). The registration
charges shall be a one-time fee payable at the time of registration or seeking connection to
InSTS. This will be applicable for all generating companies, distribution licensees and
transmission open access users. MSLDC humbly requests the Hon’ble Commission to allow
to continue levy and recover the said fees/charges.
9.2 Scheduling and Re-Scheduling Fees
MSLDC requests the Hon’ble Commission to retain the Scheduling Fee of Rs. 2250 per day
and Re-Scheduling Fees of Rs. 2250 per revision as approved under Case No. 20 of 2016.
9.3 Short Term Open Access Application Processing Fees
MSLDC requests the Hon’ble Commission to retain the Short Term Open Access (STOA)
Application Processing Fee of Rs.7500 per application.
9.4 Renewable Energy Certificate Processing Fees
MSLDC requests the Hon’ble Commission to retain the Renewable Energy Certificate
Processing Fee of Rs.1000 per application as approved under Case No. 20 of 2016.
MSLDC humbly requests the Hon’ble Commission to allow MSLDC to levy and recover
proposed fees and charges for the Period for FY 2018-19 to FY 2019-20.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 79
10 Compliance to Directives
MSLDC submits its compliance to various directives of the Hon’ble Commission under Case
No. 20 of 2016.
10.1 Ring-fencing and Autonomy
Directive
The Commission notes that MSLDC has brought the comments of the Commission to the
notice of MSETCL (regarding SLDC being operated by STU is only an interim measure, ring
fencing is ultimately the decision for the State Govt. and the MSEB Holding Co. to take). The
Commission expects MSETCL to bring them to the notice of the State Government and
MSEB Holding Co. Ltd. The Commission appreciates that a separate bank account for
MSLDC has been opened as per MSETCL Board Resolution.
MSLDC Reply and Additional submission
Vide letter dated 19 January, 2016, MSLDC has brought to the notice of the MSETCL
management the earlier directions issued by the Commission in the matter, of which further
status was sought by Hon’ble Commission through the MYT Order.
As on date, notification, by State Government w.r.t formation of separate company for SLDC
as per section 32 of the EA 2003 is yet to be issued. However, pending such notification,
MSETCL has taken several initiatives in order to achieve financial and operational autonomy
to MSLDC. Some of the initiatives were already mentioned as part of the MSLDC MYT
Petition in Case 20 of 2016. The same is reproduced as following:
“…
Proposal for ring-fencing and separate Board structure has been resubmitted to the
MSETCL Board.
Separate Bank account for MSLDC has been opened as per MSETCL Board
Resolution from April, 2015. MSETCL Board has approved need-based financial
support to MSLDC.
The MSETCL Board has approved enhancement of delegation of financial powers of
the Chief Engineer, MSLDC to the level of Executive Director, MSETCL vide
Resolution dt. 16.03.2015.
The MSETCL Board has delegated powers to depute MSLDC employees for training,
workshops and seminars to the Chief Engineer, MSLDC, vide Circular dated 26 June,
2015. “
Further, additional initiatives have been taken up subsequent to issuance of MSLDC MYT
Order are as listed below:
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 80
With separate Bank Account opened for all financial transactions related to MSLDC,
operation is being carried out through MSLDC bank account without any need for
intervention/approval of MSETCL finance wing. Thus, financial autonomy is
exercised by MSLDC in this respect.
MSETCL Board has accorded approval vide BR 98/05 dated 16 March, 2015 and
issued circular thereof which is placed as Annexure 5, for enhancing financial powers
of Chief Engineer, MSLDC to the level of Executive Director, and CE, SLDC is
exercising such powers, whenever needed. For instance, in the
matter of tender published for lifting, shifting, upgradation, installation and testing of
existing APFC panel from new SLDC Building to new 22/0.44 kV indoor substation
at SLDC, Airoli, only single quotation amounting Rs. 2,90,016/- was received. The
said quotation value was beyond the authority limit of CE, (which is maximum Rs. 2
Lakhs). Exercising the powers accorded thorough above referred BR (BR 98/5),
whereby ED in consultation with CGM (F&A) is empowered for placing work order
on single quotation basis in case of urgency up to 3 Lakhs, the Order was placed by
CE, SLDC. In another instance, in case of a quotation submitted by M/s Avadh
Corporation, for outsourcing ITI electricians the competent authority has accorded
administrative approval amount of Rs. 12,46,948/-, the quoted amount was Rs.
13,69,032/- in lieu of the powers accorded to CE vide the above referred BR
exercising the powers of ED.
MSETCL has delegated CE, SLDC powers to depute MSLDC employees for
deputation to various training, workshop, seminars and employees of SLDC are
regularly deputed for training.
The MSETCL has issued a circular vide BR 118/12 dated 20 July 2017, placed in
Annexure 6, that posting or transfer of any MSLDC employee shall be effected only
after prior consent of Chief Engineer, MSLDC.
With above steps, MSETCL has strived to ensure the financial and operational
independence of MSLDC in pursuance of the directions of Hon’ble Commission.
10.2 Manpower Development
Directive
The Commission in the past had directed to submit MSLDC’s detailed approach to the
development of skilled manpower, to which response was submitted by MSLDC in Case 20
of 2016, covering plan for development of skilled manpower to improve its functioning
considering the technical and managerial competencies required for various tasks, and a
roadmap for HR development and for recruitment of capable and motivated personnel for top
and middle level management. The Commission had noted the submission made by MSLDC.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 81
MSLDC Reply and Additional submission
In this context, MSLDC would like to apprise the Hon’ble Commission about the further
actions taken up in the matter as under. The MSETCL Board has accorded approval for
sanction of additional man power of 41 engineers/employees (including Law Officer and
Civil staff) vide B.R. No. 118/12 dated 20/07/2017(Enclosed as Annexure 6). The additional
staff requirement has been approved is two phases as under:
1) 30 Nos. in Phase –I: For various new responsibilities related to new schemes such as
URTDSM, REMC, ADMS and additional functions such as Real Time Security
Assessment, Data Management, Sub-LDC Mumbai operation in three shifts, REC
issuance etc.
2) 11 Nos. in Phase-II: For real time operation of Renewable Energy Management
Centre.
The posts will be filled up with suitable deputation from existing MSETCL establishments.
Accordingly, vide office order No. 12 dated 08.09.2017 MSETCL has diverted 15 nos. of
employees from Corporate Office and EHV project Kalwa.
Further, for the enhancement of capacity for the employees working at MSLDC, employees
are deputed for basic level training programme. All MSLDC Engineers have undergone basic
level training programme at National Power Training Institute (NPTI). Further, advanced
level training programme in the following areas have been conducted on regular basis.
a) Power system reliability
b) Power system logistics
c) Regulatory framework in Power Sector
d) Market operation
e) Renewable energy and grid integration
Given below is the statistics regarding advanced training imparted in various key areas and
respective number of employees trained since April 2015.
Sr.
No.
Area of Training Number of Employees trained
FY 15-16 FY 16-17
1 Power system reliability 11 9
2 Power system logistics 5 10
3 Regulatory framework in Power Sector 15 9
4 Market operation 0 8
5 Renewable energy and grid integration 3 15
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 82
10.3 Technology and Operational Systems Upgradation
Directive
MSLDC is not adequately prepared to meet the future challenges, especially the emerging
need for large scale RE integration. There are operational constraints such as inadequate
visibility, lack of required infrastructure, etc. MSLDC needs to schedule, monitor and
manage communication and metering infrastructure for a large number of such small
transactions. It has to be equipped for implementing automatic primary and secondary
response systems.
MSLDC also needs to re-evaluate the metering and communication infrastructure. This will
require development of infrastructure like scientific forecasting systems with the Generators
and MSLDC. Adequate balancing mechanism also needs to be developed to deal with
variable nature of RE sources. In the Report of the Technical Committee on Large Scale
Integration of RE, need for Balancing, Deviation Settlement Mechanism and related issues
issued by the Ministry of Power on 6 April, 2016, RE Generators have raised issues regarding
curtailment by SLDCs because of inability to absorb large RE quantum, evacuation issues,
and forecasting and scheduling. Hence, the Commission directs MSLDC to formulate a
detailed action plan, also highlighting financial implications in this regard.
MSLDC should update the Commission of the status of regional energy accounting, and
resolve software problems as it lags behind by 8 months. MSLDC should analyze ways to
expedite regional energy accounting, which may require outsourcing, reviewing manpower
requirements, and engaging technology partners as possible options for expediting energy
accounting.
MSLDC Reply
MSLDC in its earlier submissions in the matter had submitted its initiatives towards
continuous technology upgradation and operational system upgradation. MSLDC had stated
that it is a member of various Committees formed under WRPC (where POSOCO is also a
member), which includes the SCADA Committee of the Western Region. The SCADA
Committee regularly discusses various issues, including the issue of technology upgradation
and operation systems required for addressing present and future challenges emerging from
market and other developments. Further, MSLDC is also member of URTDSM (Unified
Real-time Dynamic State Measurement) scheme of PGCIL and closely associated in its
implementation at MSLDC. The interaction with POSOCO at all levels is a continuous
process and is going on seamlessly for addressing the day to day operational and long-term
challenges.
Further, MSLDC would like to submit specific initiatives for meeting the various challenges
highlighted in the directive by the Hon’ble Commission in the MYT Order.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 83
Initiatives for RE integration:
Under Green Energy Corridor initiative of MoP, GoI has entrusted responsibility of
implementation of Renewable Energy Management Centre (REMC) in all RE rich
states including Maharashtra. PGCIL is nominated as Nodal Agency for REMC
implementation. Accordingly, PGCIL has prepared state-wise Detailed Project Report
(DPR) of the scheme and floated region-wise tender for competitive bids for REMC
implementation. DPR for Maharashtra during May 2016. For Western Region, Tender
process for REMC implementation is completed and is at the advanced stage of
issuance of LOI. Implementation by PGCIL includes deployment of Hardware and
REMC Application Software at Control Centre which will be funded through Grant
Benefit Scheme from Indo-German consortium. The real time data required for
REMC from RE generators/pooling stations shall be in scope of respective states to be
arranged through concerned RE Generators.
MSLDC has identified 60 nos. of RE Pooling Sub-stations connected to intra-state
transmission system. Data for 10 nos. RE Pooling Sub-stations is already available in
existing SCADA system. A scheme for 20 Nos. RE Pooling Sub-stations is under
implementation and expected to be completed by April 2018. For remaining 30 nos.
RE Pooling Sub-stations, MSETCL Board has accorded approval for implementation
through PSDF funding. Accordingly, scheme was submitted to NLDC (Nodal agency
for PSDF) and MoP has accorded approval for 90 % funding through PSDF. Tender
finalization is in progress. It is envisaged that after implementation of above schemes
all RE data from all RE pooling in Maharashtra will be available by June 2018.
Presently, real time data of about 3000 MW installed capacity of wind generators out
of 4667 MW total installed capacity is available at SLDC through wind park
developers. Further, real time data for all Solar Projects of about 800 MW, which are
commissioned in the state is available at SLDC.
Other technology upgradation initiatives (viz. AMR implementation, Open Access
processing, Scheduling process):
Automated Meter Reading (AMR) Implementation: MSETCL and MSLDC have
formulated scheme for Automatic Meter Reading System. Under this scheme a pilot
project for 25 Nos. ABT meter is completed and data is available at SLDC. Further,
under phase-1 of AMR project ABT meters at 279 locations covering all CTU-STU
interfacing points and energy injection points G<>T (except RE) is under
implementation and 211 no. of meters are reporting to MSLDC through dual SIM
GPRS modems. Under phase-II, all T<>D drawl points and RE injection interface
(about 2500 ABT Meters) will be covered.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 84
Web-based processing of Open Access Applications: MSLDC is in the process of
development of online web-based software for STOA processing which is at the stage
of acceptance and after trial run it is expected to go live by April, 2018.
Scheduling Software: In addition, MSLDC is in process of development of web-
based scheduling software and it is at the final stage of implementation and after trial
run it is expected to go live by April, 2018.
Addressing difficulties in FBSM: MSLDC has submitted Concept Paper approved
by MSPC for implementation of DSM to Hon’ble MERC in February 2015. Further,
MSLDC had participated in various meetings with staff of commission and consultant
regarding implementation of DSM at state level, highlighted its concerns and
suggested suitable modifications from time to time.
FOR guided initiative of SAMAST implementation: A Technical Committee was
formed under the aegis of Forum of Regulators with one of the scope as
implementation of ABT at State level and for addressing related issues w.r.t to power
system operation and settlement. The said Committee adopted a report of Scheduling,
Accounting, Metering and Settlement of Transactions in Electricity (SAMAST)
prepared under the guidance of FOR, for implementation at state level. The report
outlines detail steps for progressive implementation of Deviation Settlement
Mechanism at state level. The status update of activities/progress achieved by
MSLDC so far (up to 31st October, 2017) in implementing the steps envisaged under
the SAMAST report is provided under Annexure-7 of this Petition.
Automatic Demand Response and Management: Besides, MSLDC has formulated
a scheme for implementation Automatic Demand Management System (ADMS) for
33/22/11 kV feeders emanating from MSETCL and MSEDCL sub-stations. After
administrative approval of MSETCL Board, MSLDC has submitted proposal for
funding from Power System Development Fund (PSDF). MoP has accorded approval
for 90 % funding through PSDF. DPR was submitted to Hon’ble MERC and Hon’ble
MERC has accorded in-principle approval for the schemes. MSEDCL has identified
621 nos. 33/22/11 kV feeders emanating from 63 nos. MSETCL sub-stations and 31
MSEDCL sub-stations for total quantum of 2157 MW to be automatically controlled
from MSLDC through ADMS during system emergencies. Tender finalization is in
process.
Implementation of URTDSM scheme: MSLDC is also member of URTDSM
(Unified Real-time Dynamic State Measurement) scheme of PGCIL, and
implementation at MSLDC. The URTDSM system is installed at MSLDC Control
Room and site acceptance test is to be carried out. Further, the data of 15 nos. PMUs
installed by MSETCL in different substations shall be integrated with URTDSM. The
dynamic data of PGCIL sub-stations (10 nos.) in Maharashtra and MSETCL sub-
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 85
stations where PGCIL has commissioned PMU and MSETCL sub-station with PMU
installed by MSETCL will be available in URTDSM.
Monthly Transmission Loss assessment through SAP-ERP: MSETCL and
MSLDC has developed a system for loss computation on monthly basis through ERP-
EAS system and Transmission System Loss figures for last month are being displayed
on MSLDC website by 20th of every month.
Action taken for resolving software issues and lag in bill generation
FBSM software was developed by M/s L&T around 8 years ago based on principles
outlined through Intra-State ABT Order by Hon’ble Commission in 2006. The
development process stared on 2009 and software development was done in
consultation with SLDC. The software was deployed for Go Live in August 2011.
The billing software shares common database with scheduling application. During the
process of daily scheduling / rescheduling activities, increased no. of scheduling
entities, manual up loading of ABT meter data and generation bills, the response time
of FBSM application increased drastically. FBSM billing data uploading and bill
generation activities could not be undertaken when scheduling activities are in
progress. Further, scheduling / rescheduling being day to day routine activity the time
slot available for billing process was limited to night hours. In addition to above
difficulties, M/s L&T stopped giving support for AMC of FBSM on the grounds on
payment issues related to development/deployment process support.
CMD MSETCL constituted a committee to address payment issues with M/s L&T.
Accordingly, all previous payment issues are resolved and M/s L&T has responded to
the tender for AMC of FBSM. Shortly AMC order will be placed on M/s L&T. Data
cleaning and debugging activities will be carried out regularly by M/s L&T during
AMC period. This will reduce sluggishness of the software response and frequency of
generation of FBSM bills will increase.
In order to increase response time, MSLDC is in process of developing new
scheduling software so that scheduling database will be independent of FBSM and
only required final implemented scheduling files will be transferred to FBSM for
billing purpose. The work is entrusted to M/s PRDC, Bengaluru and software is in
final stage of testing and will be implemented by April 2018.
MSLDC is taking all the efforts as above to reduce the delay in issuance of FBSM
bills.
As proactive measure, MSLDC has undertaken the task of preparation of Software
Requirement Specification (SRS) for new billing software, which will work on duel
mechanism i.e. FBSM and DSM.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 86
10.4 Incentive Schemes
Directives
MSLDC should keep the Commission informed of the status of the proposal regarding
Performance linked incentives.
MSLDC Reply
The proposal for incentive schemes for MSLDC was submitted to the MSETCL management
based on the recommendations of the Gireesh Pradhan Committee and Task Force chaired by
Shri Satnam Singh. The matter was discussed in the MSETCL Board of Directors meeting on
29 June, 2015 and the proposal was deferred. As directed by the Competent Authority of
MSETCL, a modified proposal for incentive schemes was submitted to MSETCL Board.
The MSETCL Board vide B.R. No. 110/17 dated 28.07.2016 has accorded approval for
Certificate linked incentive to MSLDC engineers. Further, as per Administrative Circular No.
498 dated 07.11.2016 is enclosed as Annexure 8, MSETCL has implemented Certificate
linked incentive to MSLDC engineers as under:
1) Chief Engineer: Based on tenure and experience, CMD is competent authority for
grant of incentive.
2) SE & EE: Incentive as 15 % of basic pay with ceiling limit of Rs. 7500/- per month
on passing of Specialist Level Examination.
3) AE, Dy. EE, AEE: Incentive as 10 % of basic pay with ceiling limit of Rs. 5000/- per
month on passing of Basic Level Examination or 15 % of basic pay with ceiling limit
of Rs. 7500/- per month on passing of Specialist Level Examination.
Above incentive are applicable for maximum period of 10 years. The details of incentive
disbursed during FY 2016-17 is provided under Annexure-16.
10.5 Vacancies
Directives
MSLDC should give details of the vacancies in Pay Grade III and IV which are being
operated through outsourcing of required skills in its next Petition.
MSLDC’s Reply
Total sanction strength of MSLDC is 155 employees including recently sanctioned 15
number of posts as on November, 2017 vide BR 118/12 dated 20 July, 2017 and Office
Order No. 12dated 8 September, 2017, enclosed as Annexure 8 and Annexure 9. The Pay
Grade-wise break up is provided as under:
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 87
Sr.
No.
Sanctioned
Posts
Sanctioned
strength
Working as
on 30.11.2017
Vacancy Remark
1 Pay Grade-1 52 46 6 E.E.-5, AEE-3, MGR
(F&A)-1
2 Pay Grade-II 53 43 10 Dy. E.E. 5, AE-4, Dy.
MGR (F&A)-1
3 Pay Group-III 32 09 23 19 nos. vacant posts are
being operated through
outsourcing
4 Pay Group-IV 15 9 7 All 7 nos. vacant posts
are being operated
through outsourcing.
The Pay Grade-Wise break up under pay Group I & II includes recently diverted staff from
MSETCL
10.6 Project Planning
Directives
The Commission directs MSLDC to submit the steps planned to strengthen its regulatory,
finance and accounting capabilities, within 4 months.
MSLDC’s Reply
MSLDC would humbly request the Hon’ble Commission to condone delay in submission of
the compliance in the matter. MSLDC has taken several steps for development of manpower
as elaborated under earlier paragraphs; since issuance of earlier MYT Order. Number of
employees have been deputed for advance training course comprising regulatory framework
in power system and market operation functions in order to improve and strengthen
understanding of its team in regulatory, energy accounting, finance and accounting and other
market operation related functions. The details of employees deputed for various programmes
is tabulated as below:
Sr.
No.
Area of Training Number of Employees trained
FY 15-16 FY 16-17
1 Power system reliability (technical) 11 9
2 Power system logistics (technical) 5 10
3 Regulatory framework in Power Sector
(Regulatory)
15 9
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 88
Sr.
No.
Area of Training Number of Employees trained
FY 15-16 FY 16-17
4 Market operation (techno-commercial) 0 8
5 Renewable energy and grid integration
(Technical)
3 15
10.7 Preparedness of SLDC in handling future challenges
Directives
As per the Technical Committee Report on Large scale integration of RE, in order to
integrate the high penetration of renewables into the grid effectively, several actions have to
be taken such as frequency control, introduction of ancillary services, forecasting, scheduling,
deviation settlement mechanism, balancing mechanism, robust data telemetry and
communication systems and establishment of RE Management Centres (REMCs).
Implementation of Ancillary Services would also bring reserves in the SLDCs’ ambit
With the evolution of the market design and upcoming Regulations in order to
integrate RE, MSLDC as the System Operator needs to be equipped with technical
capabilities and follow best industry practices as used in the developed power
markets.
MSLDC has curtailment issues because of inability to absorb large quantities of RE,
and issues of evacuation, forecasting and scheduling. There are software restrictions,
one of the issues being that the software assumes that frequency will be 50 Hz and
there will be no unscheduled drawl. The software cannot do any real time Merit Order
Despatch (MOD) or curtailment analysis
Upcoming Regulations that will impact SLDC
Regulatory Framework for Forecasting of Renewable Generation and Scheduling
including Aggregators and Implementation at intra-state level (June 2016)
Regulatory Framework for Communication in Power Sector, Availability of Real
Time Data at the SLDCs/RLDCs/NLDC particularly of RE generators (June 2016)
Implementation of REMCs – (April 2017)
During the TVS, the Commission enquired whether establishment of REMCs had
been directed by the Ministry of New and Renewable Energy (MNRE) or Ministry of
Power and how requisite funds will be raised. MSLDC replied that MNRE will
possibly give 100% grant for establishment of REMC, which will help in forecasting
RE supply. However, as per the minutes of meeting of the Technical Committee held
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 89
on 10 February, 2016, shared by MSLDC, it was suggested that 50% of the Capex
will be funded through PSDF while the balance would have to be funded by the
respective SLDCs.
To face these upcoming challenges, robust communication of data from RE
Generators to MSLDC is required. MSLDC should work out the communications
system requirements for getting real time data from the Generators. The software used
at MSLDC is obsolete. The Commission advises SLDC to obtain technical support in
order to resolve software restrictions and study the possibility of getting a technology
partner on board.
MSLDC should provide to the Commission a plan covering all these aspects, with
milestones, timelines for their completion, and the approach to ensure that MSLDC is
geared to face the above challenges along with any action already taken in this regard.
The Commission is concerned about the backlog in FBSM bills which, as per MSLDC’s own
admission, are in arrears for more than 8 months. Such large arrears create uncertainty and
have a commercial impact on the entire system. The Commission directs MSLDC to take
urgent action to clear the backlog. MSLDC may consider outsourcing some of the activities
relating to the balancing and settlement bills to clear the backlog and also to ensure current,
up to date status. MSLDC to submit the status of the issue of the bills for each State Pool
Participant, with details of pendency and action plan in terms of timelines to clear the
backlog, within 3 months.
MSLDC’s Reply
MSLDC would humbly request the Hon’ble Commission to condone delay in submission of
the compliance in the matter. Further, MSLDC humbly submits that it has made detailed
submission on various steps taken and under implementation in respect of most of the
directives under this head as part of response to directives under Sr. 3 above. Based on the
initiatives listed therein, MSLDC would like to humbly submit that it has already taken
initiatives to address the upcoming challenges and to mitigate present limitation in the
system.
Regarding expediting the FBSM billing, MSLDC would like to submit the following:
An order for “Implementation of software for Balancing and Settlement Mechanism as per
Order in Case No. 42 of 2006 (ABT Order in Maharashtra)”, was placed with M/s L&T vide
LoA No. MSETCL/CO/CE(O&M)/BSM/T-4/LOA/7009 dated 30th May, 2008. Subsequently
the software was implemented and issues cropped up resulting in delay in timely issuance of
settlement bills. Following are the reasons for delay in generation of FBSM bills.
a) BSM mechanism implemented in Maharashtra is unique with several features of ex-
ante imbalance volume, price, value computation and ex-post imbalance volume,
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 90
settlement price and value computation based on merit order principles. The degree of
complexities in the mechanism is very high coupled with integration of regional UI
(gross and net) pool settlement.
b) The responsibility of operation of mechanism is entrusted on Maharashtra State
Power Committee (MSPC) by Hon’ble MERC in the ABT Order. Several meetings of
MSPC were conducted to discuss the mechanism and finalize code.
c) From August 2011, FBSM was implemented. As there was no clarity on Fixed Cost
Reconciliation (FCR), FCR module in BSM software is not tested and not used.
d) Provisional Billing related delay: The matter of delay in preparation of bills is
attributed to software issues, lack of clarity and interpretation issues on several
aspects as raised by pool members while implementing ABT Order. The issues were
discussed in various MSPC meetings for effective resolution and roadmap for
expediting the billing process.
e) Finalized Billing delay: The delay observed is attributed to WRPC’s confirmation on
provision of revised data for March-2013 onwards as finalization of FBSM bills was
pending for want of revision of UI/DSM bills by WRPC. The matter was taken up
with WRPC for finalizing the statement from March-2013 as any revision in DSM/UI
bills has its effect on our Intra-State ABT bills under FBSM. The matter was
discussed in MSPC meeting of which MoM is placed as Annexure-10 to this Petition.
Besides, as submitted under response to directive Sr. No. 3 above, MSLDC and MSETCL has
taken the following initiatives to overcome the billing issues:
The billing software shares common database with scheduling application. During the
process of daily scheduling / rescheduling activities, increased no. of scheduling
entities, manual up loading of ABT meter data and generation bills, the response time
of FBSM application increased drastically. FBSM billing data uploading and bill
generation activities could not be undertaken when scheduling activities are in
progress. Further, scheduling / rescheduling being day to day routine activity the time
slot available for billing process was limited to night hours. In addition to above
difficulties, M/s L&T stopped giving support for AMC of FBSM on the grounds on
payment issues related to development/deployment process support.
CMD MSETCL constituted a committee to address payment issues with M/s L&T.
Accordingly, all previous payment issues are resolved and M/s L&T has responded to
the tender for AMC of FBSM. Shortly AMC order will be placed on M/s L&T. Data
cleaning and debugging activities will be carried out regularly by M/s L&T during
AMC period. This will reduce sluggishness of the software response and frequency of
generation of FBSM bills will increase.
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 91
In order to increase response time MSLDC is in process of developing new
scheduling software so that scheduling database will be independent of FBSM and
only required final implemented scheduling files will be transferred to FBSM for
billing purpose. The work is entrusted to M/s PRDC, Bengaluru and software is in
final stage of testing and will be implemented by April 2018.
MSLDC is taking all the efforts as above to reduce the delay in issuance of FBSM
bills.
As proactive measure, MSLDC has undertaken the task of preparation of Software
Requirement Specification (SRS) for new billing software, which will work on duel
mechanism i.e. FBSM and DSM.
10.8 Reactive Energy Charges
Directives
MSLDC should carry out its responsibilities with regard to reactive energy as specified in the
MYT Regulations, 2015 with regard to levy/compensation of reactive energy charges,
maintain accounts for the purpose and include or propose income/expenses from such charges
for the determination of AFC at the time of MTR.
MSLDC’s Reply
MSLDC has taken up the issue of reactive energy balance and reactive energy pool
settlement in grid co-ordination committee meeting. As directed by the GCC Chairman in the
78th GCC meeting a Committee was constituted to formulate draft mechanism for settlement
of reactive energy pool and infrastructure requirement thereof. MSLDC shall operate reactive
pool account on the same lines as DSM pool account. The framework for the same will be
submitted to Hon’ble Commission for kind perusal and approval.
The Committee shall deliberate on reactive power measurement infrastructure including
metering, AMR and software. The Committee shall deliberate on the following aspects
related to reactive energy measurement and settlement.
The mechanism for measurement and settlement of reactive power energy account for
a) Condenser mode operation of Koyna HPS,
b) Injection/drawl of reactive power at G<>T interface,
c) Injection/drawl of reactive power at G<>T interface,
d) Operation of reactive pool account &
e) Approval for mechanism from Hon’ble MERC
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 92
11 Prayers
MSLDC respectfully prays the Hon’ble Commission to
1. Admit the Mid-Term Review Petition in accordance with Regulations 8.1 of the
MERC MYT Regulations, 2015.
2. Allow true up of budget cost of operations of the Maharashtra State Load Despatch
Centre (MSLDC) for FY 2015-16 based on the Audited Accounts and Allocation
Statement for the financial year, according to principles set out in previous Orders
issued by the Hon’ble Commission on MSLDC’s Budget, applicable provisions under
MERC (Multi Year Tariff) Regulations-2011 and other Regulations.
3. Allow True-up for FY 2016-17 and Provisional true up for FY 2017-18 according to
applicable provisions under MERC (Multi Year Tariff) Regulations, 2015, and other
Regulations.
4. Approve MSLDC Charges for FY 2018-19 and FY 2019-20 that would help in
recovery of consolidated ARR including revenue gap/surplus for respective years of
the Control Period.
5. Continue the various charges i.e., Short-term Open Access Application Processing
Fees, Registration or Connection Fees, Scheduling Fees/Charges and Re-Scheduling
Fees, Renewable Energy Certificate Processing Fees as approved by the Commission
in MSLDC MYT Order in Case No. 20 of 2016 dated 22 July, 2016
6. Approve the SLDC’s request for relaxation of certain parameters as sought in the
Petition, while approving this MTR Petition.
7. Condone any shortcomings/deficiencies and allow MSLDC to submit additional
information/data at a later state as may be required.
Dr. Sanjay S. Kulkarni
Chief Engineer
MSLDC
Place: Airoli, Navi Mumbai
Date: 2nd January, 2018
MSLDC MTR Petition FY 2016-17 to FY 2019-20 Page 93
List of Annexure:
Annexure 1 MSLDC Multi Year Tariff Petition Formats for submission
Annexure 2 Audited accounts & allocation statement for FY 2015-16 & FY 2016-17.
Annexure 3 Broad break-up of R&M Expenditure under “Plant& Machinery”.
Annexure 4 BR 97/12 related to approval of Financial autonomy of MSLDC.
Annexure 5 Circular vide BR 98/05; Dated: 16th March, 2015
Annexure 6 BR 118/12 related to power of deputation of employees
Annexure 7 Status of SAMAST implementation in Maharashtra
Annexure 8 Administrative circular 498 related to certificate linked incentives
Annexure 9 Office order No 12 related to sanction of additional post
Annexure 10 MSPC MOM regarding discussion on resolving issues associated to FBSM.
Annexure 11 Copy of Audited certified Trial Balance for FY 2015-16 & FY 2016-17.
Annexure 12 Details of Wage Arrears disbursed during FY 2015-16.
Annexure 13 Cost Benefit Analysis of In-principle approved Schemes
Annexure 14 Details of time over-run/cost over-run, if any of the DPR schemes
Annexure 15 Correspondence from MSETCL - Actual Loan allocated to MSLDC.
Annexure 16 Details of Employee incentive allowance
Annexure 17 MoM of 1st meeting of committee constituted to evolve framework for
Reactive Power pool at State level.
Annexure 18 Correspondence with WRLDC regarding passing on of Surplus to
beneficiaries.