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Aggregate Revenue Requirement & Tariff Application

FY 2012-13

Uttar Pradesh Power Transmission Corporation Limited Lucknow February 2012

ARR&TARIFF

FY2013

Table of Contents
1 1.1 1.2 1.3 2 2.1 2.2 2.3 2.4 2.5 3 Introduction .............................................................................................................. 1-1 U P Power Transmission Corporation Limited (UPPTCL) .............................. 1-1 Transmission Tariff Regulations:......................................................................... 1-1 ARR FY 2010-11 & FY 2011-12: ................................................................................ 1-2 UP Power Transmission Corporation Limited: ................................................. 2-3 Existing Transmission System - a preview:....................................................................... 2-3 Interconnections and Northern Region Load Dispatch Centre (NRLDC)........................... 2-5 Availability of Lines ........................................................................................................... 2-6 Load Levels ...................................................................................................................... 2-6 Bulk Transmission System Flows: .................................................................................... 2-7 Performance Analysis of ARR FY 2010-11 Filing: ............................................ 3-8

3.1 Comparison of data filed in the Petition FY2010-11 and Actual Figures: .......................... 3-8 3.1.1 Demand Forecast- FY 2010-11: .................................................................................... 3-8 3.1.2 Expense items- Petition and Actual: .............................................................................. 3-8 3.2 Investments: ..................................................................................................................... 3-9 3.2.1 Proposal for Ensuing Years: .......................................................................................... 3-9 3.2.2 3.2.3 3.2.4 3.2.5 3.3 4 4.1 5 5.1.1 5.1.2 5.1.3 5.1.4 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 Normal Development Works: ....................................................................................... 3-10 Transmission Works in NCR........................................................................................ 3-10 Renovation and Modernization .................................................................................... 3-10 Augmentation of Transmission System Due To RE Works .......................................... 3-10 Compliance of UPERC Directives: .................................................................................. 3-19 Power Wheeling & Demand: ................................................................................ 4-20 Losses external to UPPTCL system:............................................................................... 4-20 Annual Revenue Requirement: FY2012-13........................................................ 5-21 Escalation Index/Inflation Rate .................................................................................... 5-23 Operation & Maintenance Expenses ........................................................................... 5-24 O&M Expenses on Addition to Assets during the Year ................................................ 5-25 Employee Costs .......................................................................................................... 5-26 Administration and General (A&G) Expenses: ................................................................ 5-28 Gross Fixed Assets (GFA) Balances and Capital Formation Assumptions ................... 5-29 Repair and Maintenance (R&M) Expenses ..................................................................... 5-31 Depreciation Expense..................................................................................................... 5-32 Interest and Financing costs ........................................................................................... 5-33 Other Income .................................................................................................................. 5-35 Reasonable return/ Return on Equity .............................................................................. 5-36 Provision for Bad and Doubtful Debts ............................................................................. 5-37 Service tax ...................................................................................................................... 5-37 TransCo ARR ................................................................................................................. 5-37 Pageii

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6 6.1 7

Proposed Transmission Tariff ............................................................................. 6-39 Derivation of Tariff .......................................................................................................... 6-39 SLDC Charges .......................................................................................................... 7-40

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List of Tables
Table 5-1: Table 5-2: Table 5-3: Table 5-4: Table 5-5: Table 5-6: Table 5-7: Table 5-8: Table 5-9: Table 5-10: Table 5-11: Table 5-12: Table 5-13: Table 5-14: Table 6-1: Table 7-1: Escalation Index ............................................................................................... 5-23 Allocation of incremental O&M expenses (Rs. Crs.).................................. 5-25 Details of Employee Cost (Rs Crs) ................................................................. 5-26 A &G Expenses (Rs Crs)................................................................................... 5-29 Transco Investment Plan: (Rs. Cr)................................................................ 5-30 Capitalisation & WIP of Investment during FY 2011-12 & FY2012-13..... 5-30 Gross Fixed Assets for FY2010-11 & FY2011-12 ........................................... 5-31 R&M Expenses................................................................................................... 5-32 Depreciation Expenses:................................................................................... 5-33 Details of Interest & Finance Cost:................................................................ 5-34 Interest on Working Capital........................................................................... 5-35 Summary of Other Income ............................................................................. 5-36 Return on Equity............................................................................................... 5-37 Annual Revenue Requirement....................................................................... 5-38 Derivation of Transmission Tariff ................................................................ 6-39 Break-up of SLDC Charges.............................................................................. 7-40

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Executive Summary:
In accordance with Section 62 of the Electricity Act 2003 and provisions of the Transmission Tariff Regulations notified by the Commission, UP Power Transmission Corporation Limited is submitting before UPERC the Aggregate Revenue Requirement and Tariff petition for FY 2012-13. In this petition licensee is submitting application for Aggregate Revenue Requirement for FY2012-13. The ARR petitions for FY2010-11 & FY2011-12 were submitted on 28-03-2011 before the Honble Commission in accordance with section 62 of Electricity Act 2003. However, these ARR & Tariff proposals are yet to be approved by the Commission. As prescribed in the Regulation, the petitioner is required to file the Aggregate Revenue Requirement complete in all respects along with requisite fee as prescribed in the Commissions Fee and Fine Regulations each year containing the details of the estimated expenditure and the expected revenue that it may recover in the ensuing financial year at the prevailing tariff. Further, the petitioner is required to file ARR for the ensuing financial year indicating the manner in which the gap between the expenses, which is permitted to recover and expected revenue for ensuing financial year, shall be bridged. As per provisions under Electricity Act 2003, separate State Load Despatch Centre (SLDC) is to be established by the state government to ensure integrated operation of Power System in the State. Further Transmission Regulations provide that till such time the State Govt establishes separate SLDC, STU shall also operate SLDC functions and till complete segregation of accounts between SLDC function & transmission function, STU shall apportion its cost between (i) SLDC function and (ii) Transmission Function based on an allocation statement & basis of such apportionment shall be clearly indicated in the ARR petition. Currently the function of SLDC is being discharged by a separate section within UPPTCL. Expenses of SLDC function & ARR has been worked out on the basis of best estimate
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available. In present petition, expenses of SLDC are being charged through UPPTCL ARR. However, in a separate section of SLDC, ARR has been added for approval of SLDC charges for other practical purposes as such charges are being levied to open access consumers. The layout of this petition among other things includes background, proposed expenditure plan for the ensuing year, Estimation of the Aggregate Revenue Requirement, explanatory notes where ever required and status of directive issued by the Honble Commission and other information as mandated in the regulation. The objective of the petitioner in this filing has been to contain the expenses to a reasonable level to offset inflationary pressure as prevailing in the market. For ensuing year petitioner has also taken a daunting task to control the expenses to the reasonable level but due to prevailing market condition some time it is not possible to limit expenses to current level due to uncontrollable factors. The petitioner in the current and ensuing year has continued with the execution with the all major capital investment project as also the must do projects for meeting the demand growth, creating adequate capacity for reducing the over loading of heavily loaded feeders and transformers. The petitioner has proposed a capital expenditure of Rs. 1800 cr. for FY2012-13. Details of major capital investment plan are submitted in subsequent section with the proposed funding mechanism. The petitioner while estimating expenses for current & ensuing year has taken into account the actual expenses incurred in previous years as per its audited /un audited balance sheet and up to date expenses for current year are incorporated to drive the expenses at a reasonable level. The petitioner has endeavoured to control the employee expenses in the current year to the approved level. While projecting the expenses for ensuing year, petitioner has adopted the same method to contain
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inflationary pressure, but due to annual increment, instalment of arrears arising out of implementation of recommendations of 6th pay commission, it is bound to increase from the level of un-audited balance sheet of FY2010-11, which has been explained at the subsequent section. The petitioner while projecting A&G expenses for ensuing year has proposed a marginal increase in the A&G expenses which is only done to off-set the inflationary pressures. The petitioner has projected R&M expenses for current year taking into account actual trends, and for ensuing year R&M expenses has been estimated as per methodology adopted by Honble Commission in its last Tariff Order & guidelines provided in the Transmission Tariff Regulation. The petitioner is making all round efforts to optimize the R&M expenses despite steep rise in costs. The proactive preventive maintenance initiatives and capital expenditure are done in various improvement schemes which would definitely result in improvement in quality of supply and reduction in number of overloaded lines & substations. The Commission, vide order dated 03-08-2011 has conferred licence on UPPTCL for carrying out the business of transmission of electricity, as a transmission licensee and State Transmission Utility, on the transmission system built, maintained, operated and developed by UPPTCL. The petitioner had filed a petition (no.761/2011) on dated 14-10-2011, requesting the Commission for revision of transmission tariff for FY 200708 and FY 2008-09, due to the fact that UPPTCL was facing practical difficulties during the audit of the balance sheets as the revised rates based on the actual data are lower than those approved in the tariff order of respective financial years. Therefore, Honble Commission, vide order dated 02-11-2011, has kindly approved the transmission charges as 11.08 paise per unit and 13.17 paise per unit for FY 2006-07 and FY 2007-08, respectively.
The Petitioner has projected transmission tariff Rs. 0.164 per unit for FY2012-13.
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1 Introduction
1.1 U P Power Transmission Corporation Limited (UPPTCL)

The U P Power Transmission Corporation Limited (hereinafter referred to as UPPTCL) is the company incorporated under the Companies Act, 1956 by making amendment in the Object and Name clause of Uttar Pradesh Vidyut Vyapar Nigam Ltd and having duly passed Special Resolution on 7th June 2006 in term of Section 21 of the Companies Act, 1956. UPPTCL started functioning with effect from 26th July 2006 and is entrusted with the business of transmission of electrical energy to various utilities with the help of its transmission lines and substations within the geographical area of Uttar Pradesh. Before incorporation of UPPTCL, transmission work was entrusted with UPPCL. Govt. of UP in exercise of power under section30 of the Electricity Act 2003, vide notification No: 122/U.N.N.P/24-07 dated 18 July 2007, notified U P Power Transmission Corporation Limited as the State Transmission Utility of Uttar Pradesh. The UPPTCL now deals with the transmission of electricity for catering to the power requirements of four distribution companies viz. Madhayanchal Vidyut Vitaran Nigam Ltd, Dakshinanchal Vidyut Vitaran Nigam Ltd, Pashchimanchal Vidyut Vitaran Nigam Ltd and Purvanchal Vidyut Vitaran Nigam Ltd in addition to two other distribution companies serving Kanpur (KESCO) and Noida (NPCL). On 23 rd December, 2010 Go UP, in exercise of power conferred under sub section (4) of section 131 of Electricity Act, 2003 and in partial modification of the scheme made under section 23 of the U P Electricity Reforms Act, 1999 issued Transfer Scheme for the purpose of transfer of the Transmission activities including the assets, liabilities and related proceedings from U P Power Corporation Ltd to the U P Power Transmission Corporation.

1.2

Transmission Tariff Regulations:

In exercise of powers conferred under section 61 & 181 of the Electricity Act,2003 Honable UP Electricity Regulatory Commission on 6th October 2006 issued Terms & Conditions for determination of Transmission Tariff (Regulation 2006) specifying the principles and procedures of filing for the Annual Revenue Requirement (ARR) and Tariff proposals. Accordingly, the Petitioner has filed this ARR complete in all respect along with requisite fee for ensuing year with details of the estimated expenditure and the expected revenue that it

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may recover in the ensuing financial year at the prevailing Tariff. The ARR filing includes the detailed Tariff proposal for Transmission and wheeling of Electricity. In this petition the petitioner is submitting the following as part of the ARR and Tariff filings for FY 2012-13. O & M Expenses Deprecation. Interest on Loan. Interest on working capital. Return on equity.

The filing also includes a brief analysis of the performance of the Petitioner during the FY2010-11 vis--vis the ARR & actual performance as per unaudited balance sheet of FY2010-11.

1.3

ARR FY 2010-11 & FY 2011-12:

Uttar Pradesh Power Transmission Corporation Ltd has submitted the ARR petitions for FY2010-11 & FY2011-12 on 28-03-2011 before the Honble Commission in accordance with section 62 of Electricity Act 2003. These ARR & Tariff proposals are still under consideration of Commission.

In accordance with the provisions of Transmission Tariff Regulations UPPTCL is filing Annual Revenue Requirement of the Transmission business including tariff and charges for FY2012-13. This ARR filing includes detailed Tariff proposal for transmission and wheeling of Electricity.

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The structure of this ARR & Tariff Petition FY 2012-13 are as under:
Section 1.

Introduction: This contains a brief background and rationale used for the

submission; major assumptions used and describe the structure of the submission.
Section 2. Section 3.

UPPTCL, Transmission System- a preview

Performance Analysis of ARR FY2010-11 Filing: This includes: a) Transmission Tariff Regulations: b) ARR Petition FY 2010-11 c) ARR FY 2010-11 & FY 2011-12

Section 4.

Power Wheeling & Demand: This includes demand forecasts for FY201213, also summarised actual FY 2010 -11, and FY 2011-12.

Section 5.

Annual Revenue Requirement: (ARR) for FY 2012-13: This includes the ARR forecast for FY2012-13 for UPPTCL.

Section 6.

Proposed Transmission Tariff: This provides the proposed transmission tariff for UPPTCL. This tariff would be applied to all DisComs and current Bulk Supply Consumers.

Section 7.

SLDC-Annual Revenue Requirement (ARR) for FY 2012-13: This includes the ARR forecast for Y2012-13for SLDC.

UP Power Transmission Corporation Limited:


2.1. Existing Transmission System - a preview:

The transmission system in UP is composed of 400 kV, 220 kV and 132 kV AC lines and substations. UPPTCL has also constructed one 765 kV AC single circuit line as well as one 765 kV substation at Unnao. This line and substations at both ends (765 kV sub station at Anpara end has been constructed by M/S Lanco) have been energized and loaded as well.
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Majority of the transmission lines & substations in UP are owned and operated by UPPTCL. However, there are other transmission lines & substations in UP (including a 500 kV HVDC line from Rihand to Dadri) that carry electricity from the central sector plants to the neighbouring states and these are owned and operated by the Power Grid Corporation of India Limited (PGCIL). In addition, some of the above transmission facilities are jointly owned by UPPTCL & PGCIL. The present transmission network of UPPTCL is capable to cater about 10000 MW of power. At the end of 11th five year plan (2011-2012) additional power to the tune of around 3000 MW were expected to become available from different sources i.e. new power generating stations in private as well as public sectors such as Anpara-C, Roja, Bajaj Hindustan, Harduaganj, and Parichha, extension. However, significant contribution of Bara, Karchana and Meja power stations is expected in ensuing year. UPPTCL has already taken up construction of 03 nos. of 765 kV and 09 nos. of 400 kV substations along with associated transmission lines under PPP for evacuation of power from upcoming thermal power stations like Bara (3x660MW), Karchana (2x660MW), and Meja (3x660MW). The details of existing 765 kV, 400 kV, 220 kV and 132 kV substations are given in Table 2-1 & for Transmission lines, the details are in Table 2-2.

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Table 2.1: Total existing Sub-Stations:

Voltage Level

Existing Substations 0

New Added And Capacity Enchanced 1

Total Capacity (MVA) 1000

765 kV

400kV 220kV 132kV

23 61

01 enhanced 04 enhanced

8980 17776 20411

236 new 01, enhanced 16

Table 2.2: Total existing Lines (Circuit Km)

Voltage Level

Existing Length 409

New Added

TotalLength (Ckt. kM.) 1.9 411

765 kV

400kV 220kV 132kV

4275 74432 13542 258 102

4275 7690 13644

2.2. Interconnections and Northern Region Load Dispatch Centre (NRLDC)


UPPTCLs existing transmission system is interconnected to the electrical grids of its neighbouring States, namely, Uttaranchal, Haryana, Rajasthan and the central system of New Delhi. In addition, it maintains asynchronous ties (i.e. AC-DC-AC) with the electrical grids of Bihar in the east and Madhya Pradesh in the South. Until November 2002, there was only one State of UP and one transmission grid for the entire erstwhile UP. The ownership of lines and substations have changed since division of UP into two States, i.e. UP & Uttaranchal. The UPPCL power system is a part of the Northern Regional Grid of India. The Northern Grid is controlled from a unified regional load dispatch centre at Delhi. The Northern
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Regional Load Dispatch Centre (NRLDC) is equipped with modern SCADA and Energy Management System Software. The SCADA system is fully functional as are key applications like State Load Estimation, Economic Load Dispatch and security assessment. The NRLDC has modified its economic load dispatch software to take into account the Availability Based Tariff (ABT). UPPTCL is upgrading its own unified load dispatch centre at its head office in Lucknow, and the four area control centres.

2.3. Availability of Lines


Availability of lines and other equipments of UPPTCL system is positively around 98% and with this system UPPTCL handles Transmission of energy from different generating units to the Distribution Licensees (Points) effectively.

2.4. Load Levels


The load centre power demands and their daily, monthly & yearly load levels and associated load power factors are important factors that influence the planning of the bulk transmission system. UPPTCL loads are generally scattered throughout the state with heavy demands in Varanasi, Allahabad, Lucknow, Kanpur, Agra and Meerut areas. The annual peak load generally occurs in summer month. Figure 2-3 & Figure 2-4 typically show the yearly peak demand of previous years & monthly current year peak demand, respectively.
Table 2.3: Yearly System Peak in M.W.

Month 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Availability MW

R.D.M MW

Restriction MW

U.D.M MW

5403 5717 6112 7188 7504 8222 8186 10672

6788 6870 7437 7653 8604 8337 9356 9888

600 1100 1100 1100 1500 2250 1500 1200

7368 7970 8537 8753 10104 10587 10856 11082

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Table 2.4:

Monthly System Peak for current Year

Month
Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11

Max. Availability MW 10181 9481 9236 10672 8584 9131 8951 9499 10041 10537 10439 10857 10885 10447 11616 9059

Max. R.D.M AV.Restriction Max. U.D.M MW MW MW 9823 1375 10764 9680 1375 10562 8992 1375 10273 9172 1375 10672 8670 1375 10299 9457 1375 11082 9305 1375 11003 9295 1208 10295 10287 1125 10801 10945 1125 11445 10393 1125 11298 11488 1042 11488 12038 917 12038 11747 917 11821 11364 917 11718 9332 917 10323

2.5. Bulk Transmission System Flows:


Bulk transmission system flow characteristics are dominated by the coal based thermal generating plants available in southeast of UP. These plants at Anpara, Obra, Rihand and Singrauli generate about 6300 MW out of which 4500 to 5000 MW generation flows to the western regions after meeting Varanasi regional demand. This power transfer level continues through Sultanpur-Allahabad, Lucknow-Kanpur, Moradabad-Agra interfaces since the available generation in each of the regions almost matches with its respective demand. In the east, power from the aforementioned plants flows towards north to supply Varanasi, Azamgarh and Gorakhpur load centres. A small amount of power is imported from Bihar through a connection at 132 kV level. Power supply to Uttaranchal in the North West is normally less than 500 MW due to the availability of hydroelectric generation in the state. In the west, more than 3000 MW power flows to Delhi and Rajasthan through 500 kV HVDC bi-pole link and 400 kV transmission network across the state. The existing bulk transmission system capacity with the current level of power transfer requirements is well equipped to handle the flow of energy.

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Performance Analysis of ARR FY 2010-11 Filing:

As previously mentioned, this section contains the following: a) Comparison of data filed in the ARR petition FY2010-11 and actual figures as per un-audited balance sheet of FY2010-11. b) An action plan undertaken by UPPTCL for improvement of Transmission Loss. c) Investments plan. d) Compliance with Commission directives.

3.1. Comparison of data filed in the Petition FY2010-11 and Actual Figures: 3.1.1. Demand Forecast- FY 2010-11:
Table 3-1 provides a summary of demand as per ARR petition FY2010-11 and actual demand for FY 2010-11.
Table 3-1: Approved and Actual FY 2010-11: Energy Demand (MU)

Licensee (Rs Cr) Meerut Agra Lucknow Varanasi Bulk Total

Petition FY2010-11 19,703 13,414 10,728 13,980 3,392 61217

Actual FY2010-11 19,323 14,279 10,935 14,012 3,265 61,814

Diff -2% 6% 2% 0% -4% 1%

3.1.2. Expense items- Petition and Actual:


Table 3-2 provide a summary of the various ARR components of expenses as filed in ARR petition FY2010-11 and actual figures available as per un-audited balance sheet FY2010-11. It is evident from these tables that all estimated figures are well with in the limit.

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Table 3.2: Estimated and Actual ARR FY 10-11, Components:

Expense Items (Rs Cr)


Employee cost A&G expenses R&M expenses Interest charges Depriciation Gross Expenditure Expenses capitalisation Employee cost capitalised Interest capitalised A&G expenses capitalised Net expenditure Special appropriation Other Debits (incl. Prov for Ba Prior period Adjustment Total net expenditure with add: Return on Equity Less: Non Tariff Income Annual Revenue Requirem

Petition FY2010-11
417.05 15.11 97.94 329.49 197.46 1057.05 120.94 73.70 2.87 859.53 36.72 896.25 73.04 (26.92) 942.37

Actual FY2010-11
331.75 14.42 101.74 317.56 310.93 1,076.40 65.44 107.91 10.85 892.20 39.91 2.26 934.38 (40.30) 894.08

Diff
-20% -5% 4% -4% 57% 2% -46% -85% 4%

-100% 50% -5%

3.2. Investments:
Investments will be made in key areas with the objective of strengthening the transmission networks, thus contributing to the reduction of losses and reliability of supply. This work will be executed with the help of loans from financial institution and equity from GoUP.

3.2.1. Proposal for Ensuing Years:


It will be necessary to execute many works for ensuring reliability, stability and quality of transmission system but on the basis of experience of the previous years, it is observed that the availability of funds and other constraints, in fact, restricted the list of transmission works. During FY2012-13 investments will be made in key areas with the objective of strengthening the transmission networks, thus contributing to the reduction of losses & improving reliability of supply. Most of the works are to be financed by M/s. Power Finance Corporation, New Delhi and Rural Electrification Corporation, New Delhi. The transmission works have been categorized as follows:1. Normal Development Works. 2. Transmission works in National Capital Region
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3. Renovation and Modernization. 4. Transmission works on account of 100% electrification of villages. 5. Installation of Capacitors.

3.2.2. Normal Development Works:


Due to increase in demand of electricity, some of the sub-stations/lines are overloaded. To meet out this demand it is essential to increase the capacity of the sub-stations and to create new sub-stations and lines.

3.2.3. Transmission Works in NCR


All the district of Meerut Commissionary is covered in National Capital Region. Industries from Delhi are to be shifted to National Capital Region for which Electricity Supply position has to be improved. NCR Board will provide financial aid by way of loan.

3.2.4. Renovation and Modernization


A large number of S/Ss, Transmission lines & communication equipment are around 30 years old and equipment's like transformers, circuit breakers, control & protection panels etc. needs replacement for reliable service, as spares for same are not available anymore as of now, due to the fact that the technology on which they are based, has become obsolete. Therefore, adequate provisions have been made for the renovation and modernization of various equipments.

3.2.5. Augmentation of Transmission System Due To RE Works:


In order to meet the increased demand due to electrification of villages in REC schemes and mazras under Rajiv Gandhi village electrification scheme, various transmission substations and lines are to be strengthened and new sub-stations and lines are to be constructed. Installed capacities of various 132 and 220 kV substations are being enhanced significantly in addition to new 132 and 220 kV substations. The associated transmission lines are also being constructed to cope up with future load growth as well as to prevent overloading, so as to ensure stable system operation at diversified load levels.

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The proposed transmission works for FY2012-13 is provided in following tables:

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Table 3.3: Proposed Program for Transmission Works (Rs.Cr.)

Sl No.
1

Name of work
2

Capacity
3

Total Cost (Rs Crores)


4

Investment (2012-13) Rs crores


5

765 kV & 400 kV sub i) On goimg works


1 765 kV S/s Unnao 2 400 kV S/s Aligarh 3 400 kV S/s Orai 2x1000 MVA

2x500 MVA 2x315 MVA

302.00 180.00 140.00 100.00 155.00 10.00

26.11 76.24 64.24 15.30 9.18 2.35

ii) New works 1 400 kV S/s Muradnagar 2x315 MVA 2 400 kV S/s Banda 2x315 MVA 3 Augmentation of 400 kV S/s Total
Sl. No.
1

887.00
Total Cost (Rs Crores)
4

193.42
Investment (2012-13) Rs crores
5

Name of work
2

Line Length (Km)


3

B
i)

765KV LINES
Ongoing works
1 SC Anpara-D- Unnao 416.00 751.60

175.88 0.00 0.00 11.08 5.54 30.85 5.09 62.58 124.94 2.77 0.00 0.06 418.78

400KV LINES
1 2 3 4 6 7 8 1

Ongoing works DC Orai-Parichha DC Orai-Mainpuri(PG) DC Aligarh-Sikenderabad Lilo of Panki -Muradnagar line at Aligarh DC Orai-Banda Quad DC Banda-Allahabad Quad DC Anpara-B-Anpara-D Quad New Works Survey of 765/400 kV lines for 12th five year plan

100.00 140.00 96.00 34.00 100.00 200.00 15.00

115.00 161.00 130.70 46.20 215.00 430.00 25.00 1.66

Total

1876.16

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Sl.No . C
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2
1

Name of work
2

Capacity (MVA)
3

Total Cost (Rs Crores)


4

Investment (2012-13) Rs crores


5

220 kV sub stations i) On goimg works 220KV Gajokhar 220KV Bhelupur 220KV Ballia 220KV Sirathu 220KV Mirzapur 220KV Bansi 220KV Nighasan 220KV Jhusi 220KV Pratapgarh 220KV Tanda 220KV Khair 220KV Behat 220KV Janseth 220KV Sirsaganj 220KV Rampur 220KV Kursi Road, Lucknow 220KV Faridnagar 220KV Bakshi Ka Talab 220KV Harahua 220KV Baghpat 220KV Debai 220KV Bah ii) New Works 220KV Kanpur road ,Lucknow Augmentation

2x100 2x60 2x160 2x160 2x100 2x100 2x100 2x160 2x100 2x160 2x160 2x160 2x100 2x100 2x100 (2x60+1x100) (1x100+2x60) (2x60) (2x100) (2x100) (2x100) (2x100) (3x60) 16x 160

27.56 22.94 39.84 38.00 34.14 33.74 41.68 43.25 40.60 36.20 33.22 46.35 33.80 44.00 31.58 58.44 48.82 33.60 34.23 31.26 25.53 31.17 67.84 88.00

3.41 2.65 6.82 6.82 6.45 7.81 7.58 4.55 6.82 8.49 3.41 3.18 4.40 11.37 12.13 8.72 8.57 16.38 10.79 9.10 11.49 11.37 17.15 22.24

Total

965.79

211.73

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Sl No.
1

Name of work
2

Capacity
3

Total Cost (Rs.Cr.)


4

Investment (2012-13) Rs crores


5

D
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

132 kV sub stations i) On goimg works


Anoopshahar Ujani Biswan Masooti Gulawati Bilsi Mograbadshahpur Koudihar Sarai Akil Khairagarh Mohan Road Dharampur Bikapur Koraon Katghar Mahlu Milak Aligarh V Pilkhua Textile Centre Dhanapur Shyamli Shyamla Panwadi Jalilpur Tundla Sikandra Nagina Kalpi Increasing Capacity

2x40 MVA 2x20 MVA 2x20 MVA 2x40 MVA 2x20 MVA 2x20 MVA 2x20 MVA 2x20 MVA 2x20 MVA 20+40 MVA 2x20 MVA 2x20 MVA 2x20 MVA 2x20 MVA 2x20 MVA 2x40 MVA 2x40 MVA 2x20 MVA 2x20 MVA 2x20 MVA 2x20 MVA 2x40 MVA 2x20 MVA 2x20 MVA 2x20 MVA 1439 MVA 2x40 MVA 2x40 MVA 2x40 MVA

14.00 12.50 12.50 14.00 12.50 12.50 12.50 12.50 12.50 13.00 12.50 12.50 12.50 12.50 12.50 14.00 14.00 12.50 12.50 12.50 12.50 14.00 12.50 12.50 12.50 159.00 23.00 23.00

5.13 1.37 1.37 2.05 1.37 5.13 5.13 6.49 7.18 5.81 1.03 2.05 2.05 6.83 2.05 2.73 2.73 2.05 2.05 2.05 2.05 2.05 2.05 1.37 1.37 41.69 0.00 5.24 5.24

ii) New works


1 Hanuman Setu (GIS) 2 Old Power House, Allahabad (GIS) 3 Govindpuram (GIS)

23.00

5.24

Total

548.5

132.9

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APPROX. COST ( In Lacs)


4

Investment (2012-13) Rs crores


5

E
i)

220KV LINES
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 LILO PGCIL-Bhagaun-Mainpuri 17 DC Gonda(400)-Baraich 18 LILO Parichha-Banda @ Mohaba 19 LILO Orai-Mainpuri @ Bah 20 LILO 220KV PGCIL(Lko)Sitapur 21 220kV Lilo of HDG-Hathras @ 40 22 220kV DC ALG-Atarauli 23 220kV SC Aurai-MZP 24 220kV SC Aurai-Phoolpur 25 220kV GKL-Mitai Ongoing works DC Sohawal PG-Tanda II Ckt. Muzaffarnagar-Nara at Jan LILO of Khara- Saharanpur@ Beh LILO of Loni- Muradnagar LILO of Moradabad- CB Ganj@ Ra SC Aligarh (400)- Khair (Now Lilo Of HDG-Hathras at Kahir) DC LKO(PGCIL)(400)-Kursi Road Dasna(400)-Faridnagar LILO Muradnagar-Syamli@ Bagpat SC Bagpat(400)-Bagpat SC Baduan-Sambhal SC Sambhal-Gajraula DC Indirapuram-Pratapvihar DC Murti-Pratapvihar LILO Orai-Bhauti @ Orai(400)
100.00 16.00 10.00 15.00 12.00 60.00 25.00 20.00 6.00 18.00 90.00 70.00 8.00 18.00 20.00 45.00 70.00 20.00 50.00 2.00 24.00 34.00 43.00 68.00 40.25 71.24 8.98 7.12 10.69 8.55 33.68

24.29 3.06 2.43 3.04 2.43

9.57
17.81 14.25 4.27 10.11 50.53 39.30 5.70 12.82 14.25 32.06 49.87 14.25 35.62 1.42 17.10 24.22 24.14 38.18 28.67

5.06 3.24 0.97 2.87 14.36 11.17 1.62 3.64 4.05 9.11 19.84 5.67 12.15 0.49 4.86 6.88 6.86 10.85 8.15

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3
45.00 21.81 19.96 7.25 16.00 30.00 37.00 21.40 10.00 25.00 23.40 70.00 55.00 25.00 12.00 21.10 20.00 25.00 20.00 9.00 11.00 21.16 12.00 10.00 4.70 5.00 32.66 20.00 45.00 10.00 93.85 30.00 50.00 26.00 35.00 30.00 10.00 25.00 30.00 30.00

APPROX. COST ( In Lacs)


4
19.65 9.52 8.72 3.17 6.99 13.10 13.13 9.35 3.55 8.87 8.30 24.84 19.51 8.87 5.24 7.49 7.10 10.92 8.73 3.93 3.90 7.51 4.26 4.37 2.05 2.18 11.59 7.10 19.65 4.37 33.30 10.64 21.84 9.22 12.42 10.64 4.37 8.87 10.64 13.10

Investment (2012-13) Rs crores


5 5.58 2.71 2.48 1.62 1.99 3.72 3.73 2.12 0.81 2.02 1.89 5.65 4.44 2.02 1.49 1.70 1.61 2.48 0.99 1.12 1.09 1.64 1.16 1.22 0.57 0.62 4.24 1.61 4.47 0.99 9.18 2.54 5.77 3.15 4.23 3.63 1.49 3.02 3.63 4.47

132KV LINES
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Etah-Gunj Dundwara Behat-Chutmalpur 132 KV SC MBD-Bilari 132 KV SC Lilo of GKL-Hathras@Bamoli Lilo Rewa Rd - Majhanpur- at sara Lilo of Hardoi-Shahbad-Bhaghaul SC Bansi - Dumariaganj LILO of SahupuriRobertsganj@Chakiya SC Sirathu - Sirathu SC Sirathu (220)- Khaga SC Nighasan - Dhaurhara SC Nanpara - Dhaurhara SC Nighasan - Gola SC Tanda (220)- Tanda (132) Lilo Rampur - Bilaspur at Rampu SC Khair (220) - Jattari SC Sarnath (400) - Kaithi LILO Sahupuri (220) - Robertsgan LILO Basti - Khalilabad@Nathnag LILO Saharanpur -Deoband@Kot SC Dadri - Massoorie SC Jahangirabad- Anoopshahar SC Nanauta (220)- Maniharan LILO Saharanpur -Roorkee@Gang LILO of MBD-Bilari @Kundarki LILO Mohannagar - Sahibabad SC Sitapur (220) - Biswan SC Puwayan - Bannda Gola - Bandda LILO Saharanpur - Badaun SC Hasari - Lalitpur SC Lalitpur - Mehrauni Bharthana - Aurayya SC :Phulpur-Murga Badshahpur SC Anandnagar-Naugarh line SC Anandnagar-Maharajgang line DC Aurai(400)-Auri(132) SC Aurai(400)-Gopiganj SC Aurai(400)-Raja Ka Talab LILO Bhadohi-Jaunpur

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2

Line Length (Km)


3
25.00 22.00 23.00 20.00 12.00 20.00 35.00 60.00 30.00 25.00 15.00 35.00 40.00 35.00 50.00 40.00 8.00 5.00 5.00 15.00 20.00 30.00 23.00 20.00 20.00 20.00 10.00 26.00 10.00 15.00 25.00 40.00 32.00 15.00 12.00 30.00 15.00 40.00 25.00 70.00

APPROX. COST ( In Lacs)


4
8.87 7.81 10.04 7.10 4.26 7.10 12.42 21.29 10.64 8.87 6.55 12.42 14.19 12.42 17.74 14.19 2.84 1.77 1.77 6.55 7.10 13.10 8.16 8.73 8.73 7.10 4.37 9.22 3.55 5.32 8.87 14.19 11.35 5.32 5.24 13.10 6.55 14.19 10.92 30.57

Investment (2012-13) Rs crores


5 3.02 2.66 3.43 2.42 1.45 2.42 4.23 7.26 3.63 3.02 2.23 4.23 4.84 4.23 6.05 4.84 0.97 0.60 0.60 2.23 2.42 4.47 2.78 2.98 2.98 2.42 1.49 3.15 1.21 1.81 3.02 4.84 3.87 1.81 1.79 4.47 2.23 4.84 3.72 12.16

132KV LINES
41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 SC Gopiganj-Gyanpur SC Mau(Old)-Muhabadabad DC Muhamabadad-Sidari SC Koilasa-Atraulia SC Handia-Saidabad SC Kadipur-G. Singhpur SC Tanda (220)-G.Singhpur SC Balrampur - Bhinga SC Kursi Road(Lk0)220-Pipersan SC Bikapur-Sahawal LILO Sultanpur- Darshannagar SC Sitapur (220) -Laharpur SC Lakhimpur-Laharpur SC Lalgang-Kunda SC Sikandrabad(220) - Jahangirpu SC Khair (220) -Jahangirapur SC Bapudham-Govindpuram SC Madhuvan-Govindpuram SC Modipuram-Khatauli LILO Tilamoth-Loni(220) SC Khurja(220)-Khurja(132) LILO Nehtaur - Muradabad @ Chi SC Jansath(220)-Ramraj LILO Muradabad-Amroha @ MBD DC Dasana(400)-Dasana(132) SC Faridnagar-UPSIDC LILO Muradnagar-Hapur @ Farid SC Baraut-Kirthal SC Nara-Poora SC Khautali-Pura SC Sikendara-Auriaya SC Banda(220)-Attara SC Etah (220) - Sikendara Rao SC Etmadpur-Tundla LILO Hathras-Jelesar @ Hasayan LILO Shamshabad-Bodla LILO Shikohabad-Naseerkpur SC Mohaba(220)-Panwari LILO Rath-Mahoba(132) DC Riwa Road-Korao

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25.00 40.00 20.00 35.00 40.00 40.00 15.00 55.00 25.00 45.00 10.00 20.00 10.00 30.00 6.00 35.00 20.00 22.00 16.00 10.00 20.00 0.50 14.00 3.00 30.00

APPROX. COST ( In Lacs)


4
8.87 17.47 8.73 12.42 14.19 14.19 5.32 19.51 8.87 15.97 4.37 8.73 4.37 13.10 2.62 12.42 8.73 7.81 6.99 3.55 7.10 0.22 4.97 1.31 13.10 8.87 5.32 15.97 15.97 17.47 11.35 6.39 2.84

Investment (2012-13) Rs crores


5 3.53 6.95 3.47 4.94 5.65 5.65 2.12 7.76 3.53 6.35 1.74 3.47 1.74 5.21 1.04 4.94 3.47 3.11 2.78 1.41 2.82 0.09 1.98 0.52 5.21 3.53 2.12 6.35 6.35 6.95 4.52 2.54 1.13

132KV LINES
81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 SC Mau(400)-Kathghar Mahalu DC Baraich(220)-Nanpara LILO Gonda-Baraich SC Phlibhit-Bisalpur SC Baraily-II-Bisalpur SC Kadipur-Jalalpur SC Tanda(220)-Jalalpur SC Shahabad-Shrimau SC Syana(220)-VP Nagar SC Syana(220)-Anup Nagar LILO Lakhwati-Syana @ Syana DC Charala(220)-Ganga Nagar DC Mohaba(220)-Mohaba(132) LILO Jahanabad-Barhuasumerpu LILO Bah-Pinhat @Bha(220) SC Bah(220)-Fatehabad LILO Agra(400)-Sadabad SC Amroha Kothi-Khidmatpur LILO Riwan Rd. - Manghanpur SC Faridnagar(220)-Textile Centre SC Rampur(220)-|Milak line LILO Loni - Mahannagar line SC Dibal-Dharampur LILO Sahupuri-Mau IICkt LILO Hardoi-Shahbad @ Bhaghol SC Nanhau ta(220)-Shamli Syama SC Jinjhana-Shamali Syamala SC Jainpur-Pukhrayan SC Moth-Gursarai LILO MZP-Jigna II Ckt LILO Firazabad-Sikohabad SC Nehtaur - Nagina SC Yadunagar-Bisauli

25.00
15.00 45.00 45.00 40.00 26.00 18.00 8.00

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Name of work
2

Line Length (Km)


3

APPROX. COST ( In Lacs)


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5

132KV LINES 220/132 KV Cables


1 220KV DC Kanpur Road,Lucknow 5KM x7=35 KM 2 132 KV DC GIS Old Power House,Alla5KMx7=35 KM 3 132 KV DC Mughal Sarai 1.5KM x7=10.5 KM 68 48.4 17.21
8.42 9.54 7.12 4.37 7.10 7.86

15.35 20.69 7.34 1.60 1.81 1.35 0.83 1.34 1.49

ii) New Works


1 SC Dasna (400)- Bapudham 2 SC Attor- Bapudham 15.00 17.00 10.00 10.00 20.00 18.00

LILO Narora atomacShambhauli @ Syana 4 LILO Azamgarh - Koilasa @ Bindw 5 SC Deoria (220) - Rudrapur 6 LILO of FCI - Kasia@Padrauna
3

TOTAL(E)

1849.45

593.14

3.3. Compliance of UPERC Directives:


The Commission had issued a number of directives to the Utilities in Tariff order FY 200910 with the objective of attaining operational efficiency and streamlines the flow of information, which would be beneficial for the sector both in short term and long term. The Licensee has submitted the compliances in ARR FY2010-11 & FY2011-12. Further no Tariff Order has been issued against ARR and Tariff Petition of FY2010-11 & FY2011-12, and no directives have been issued to comply with.

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4 Power Wheeling & Demand:


UPPTCL is performing the business of transmission of electricity received at UP periphery from various central generating stations, private power producers as well as those with in the state and dispatching this power to the Distribution Licensees as required, using Transmission system of UPPTCL. In purchasing/ wheeling of electricity from various out of state generating stations, hence periphery losses to the UP transmission system also come into picture. Therefore it is prudent to separately analyze losses internal as well as the periphery loss to the system so that petitioner should not be made accountable for losses external to the system.

4.1. Losses external to UPPTCL system:


The petitioner submits that while considering losses to meet the requirement of various distribution licensees, losses external to UPPTCL system, i.e. in the Northern Region PGCIL system need to be accounted for. The availability of power from various sources from out of the state gets reduced proportionately to these losses. UPPTCL has considered an average level of 2.11% periphery losses in its energy transactions for FY2012-13 . On the basis of Power requirement provided by DisComs a detailed energy balance is summarized for Distribution Licensees of the state using Transmission system of TransCo for dispatching the energy in Table 4-1: -

Table 4.1: Actual & Estimated Energy Profile:

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Licencsee
MEERUT AGRA LUCKNOW VARANASI BULK Purchased & Billed Energy (MU) Peripheral Loss (Upto inter connection Point) Energy Available for Transmission(MU)

FY2010- 11
20,507 15,153 11,604 14,870 3,465 65,600 2.22% 64,142

FY2011- 12
23,415 17,326 13,115 16,722 3,699 74,277 2.11% 72,709

FY2012- 13
26,642 19,033 14,670 19,261 4,183 83,788 2.11% 82,021

Consolidated Discom MEERUT AGRA LUCKNOW VARANASI BULK UPPTCL

Ienergy Delivered to DisCom DisCom(MU) 61,814 70,070 19,323 22,089 14,279 16,345 10,935 12,372 14,012 15,775 3,265 3,489 Transmission Losses(%) 3.63% 3.63%

79,043 25,133 17,955 13,839 18,170 3,946 3.63%

5 Annual Revenue Requirement: FY2012-13


In this Petition, the Petitioner is filing revised estimates based on the latest actual data available for the current year 2011-12 and is filing its Annual Revenue Requirement for
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ensuing year 2012-13 for the kind approval of the Honble Commission in accordance with the guidelines provided in Terms and Conditions for Determination of Transmission Tariff Regulations, 2006. As per Transmission Tariff regulation 2006, the ARR shall consist of following items: 1. Operation & Maintenance expenses Employee Expenses. Administrative & General Expenses. Repair & Maintenance Expenses. Loan capital. Working Capital.

2. Interest expenses.

3. Depreciation Expenses. 4. Other Expenses. 5. Return on equity. 6. Contingency Reserve. 7. Taxes on Income. 8. Any other relevant expenditure. Further regulation provide that the State Transmission Utility, which is also looking after the SLDC functions, shall file segregated costs for SLDC operations and any surplus / deficit in recovery of SLDC costs vis--vis SLDC fee and charges collected by the STU shall form part of its ARR. In this petition the Petitioner is filing expenses for FY 2012-13 for approval of the Commission. This section provides ARR for FY2012-13 in accordance with the Tariff regulations and methodology envisaged by the Commission in its last Tariff Order. Each component of ARR as mentioned above is dealt in detail in the following section. Further, it is to submit that UPPTCL is also looking after the functions of SLDC as such SLDC cost is embedded in UPPTCL cost. However, as prescribed in Tariff Regulation, segregated costs for SLDC has also been computed at the end. The petitioner has estimated ARR for ensuing year based on provisional un-audited account of FY2010-11 and expenses available till date. Further Tariff regulation provide that O&M expenses and other expense shall be escalated on the basis of prevailing rate of inflation from base figure & inflation shall be calculated on the basis of indexes notified by central government . As per the Tariff Regulation for determination of Operation & Maintenance expenses(which comprises of
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employee , A&G and R&M expenses) for year under consideration ,the O&M expenses of the base year shall be escalated at inflation rates notified by the central Government for different years. The inflation rate for above purpose shall be the weighted average of Wholesale Price Index and Consumer Price Index in the ratio of 60:40. Therefore it is imperative to first calculate an Escalation index based on guide lines provided in the regulation. Therefore Petitioner has calculated inflation index in following section:

5.1.1. Escalation Index/Inflation Rate


The Regulation provides that expenses of the base year shall be escalated at inflation/Escalation rate notified by central government for different years. The inflation rate for this purpose shall be weighted average of wholesale Price Index and Consumer Price Index in the ratio of 60:40. Therefore for the purpose of this ARR petitioner has used this methodology in arriving at Escalation Index/ Inflation Rate of 9.85 %. This escalation/Inflation index has been used in estimation of various components of ARR. Calculation of Escalation/ Inflation Index is given in the following table: Inflation Rate=0.6*. Inflation based on WPI + 0.4*Inflation based on CPI.

Table 5-1: Escalation Index

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Inflation index for FY2012-13 Month Wholesale Price Index 2009 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Inflation Weighted Average (WPI 60%:CPI 40%) 124 123 124 125 126 127 128 130 130 131 133 133 2010 135 135 136 139 139 139.8 141 141 142 1429 144 146 9.72% 2011 148 148 150 152 152 153.1 154 155 155.8 156.8 Consumer Price Index 2009 148 148 148 150 151 153 160 162 163 165 168 169 2010 172 170 170 170 172 174 178 178 179 181 182 185 10.06% 9.85% 2011 188 185 185 186 187 189 193 194 197

WPI-http://eaindustry.nic.in

http://labourbureau.nic.in/intab.html

5.1.2. Operation & Maintenance Expenses


Operation & maintenance expenses comprise Employee costs, Administrative & General Expenses and Repair & Maintenance expenses. The regulation 4.2 of the Transmission Tariff Regulation issued by the Commission stipulates: 1. The O&M expenses for the base year shall be calculated on the basis of historical/audited costs and past trend during the preceding five years. However, any abnormal variation during the preceding five years shall be excluded. O & M expenses so calculated for the base year shall then be escalated on the basis of prevailing rates of inflation for the year as notified by the Central Government and shall be considered as a weighted average of Wholesale Price Index and Consumer Price Index in the ratio of 60:40. Base year, for these regulations means, the first year of tariff determination under these regulations. 2. Where such data for the preceding five years is not available the Commission may fix O&M expenses for the base year as certain percentage of the capital cost.

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3. Incremental O&M expenses for the ensuing financial year shall be 2.5% of capital addition during the current year. O&M charges for the ensuing financial year shall be sum of incremental O&M expenses so worked out and O&M charges of current year escalated on the basis of predetermined indices as indicated in regulation 4.2.1 above. However in last tariff order Commission was of the opinion that a suitable norm for allowance of O&M expenses could be adopted only after undertaking a thorough study of the O&M expenditure based on the past performances, and the cost drivers of the same, through a separate process. This study also has to be backed by audited information for the past which needs to be made available by the licensees. Only then the true picture if the trend in the O&M expenses may emerge. Till any such norm for O&M expenditure is determined, the Commission emphasised considering the individual elements of O&M expenditure. Further in addition to the O&M cost based on inflationary indices based escalation, regulation provides an additional O&M expenses @ 2.5% of the additions to GFA during the previous year. As such this portion of expenses has separately been calculated. As stated above, in the absence O&M norms petitioner has estimated individual components of O&M expenses based on methodology described in following section.

5.1.3. O&M Expenses on Addition to Assets during the Year


In addition to the Employee, A&G cost and R&M expenses described in the succeeding section, Regulation provide for incremental O&M expenses on addition to assets during the year. Regulation stipulates that Incremental O&M expenses for the ensuing financial year shall be 2.5% of capital addition during the current year. O&M charges for the ensuing financial year shall be sum of incremental O&M expenses so worked out and O&M charges of current year escalated on the basis of predetermined indices as indicated in regulation 4.3 (1). Accordingly based on above the incremental O&M has been worked out in following table .The same are allocated across the individual elements of the O&M on the basis of the contribution of each element in the gross O&M expenses excluding the incremental O&M charges.

Table 5-2:

Allocation of incremental O&M expenses (Rs. Crs.)


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Incremental O&M Expenses @2.5% of capital additions during the Capitalised Assets during previous year Incremental O&M Expenses a) Employee Costs b) A&G Expenses c) R&M Expeses

FY 2011-12 281.27 7.03 5.29 0.26 1.48

FY 2012-13 986.02 24.65 18.54 0.91 5.20

5.1.4. Employee Costs


The projection of employee costs involves a detailed examination of the various components of salary such as basic pay and dearness allowance for the various grades of employees. It would also involve an understanding of the extent of retirements as well as the manpower planned additions. Considering above, petitioner has estimated employee cost for FY201213 based on un-audited data of FY2010-11 and data available to date. Detail of each elements of employees cost has been provided in this section. The employee cost is computed in following table:

Table 5-3:

Details of Employee Cost (Rs. Crs.)

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Details (Rs.Cr)
Salaries Dearness Allowance Other Allowances & Relief Bonus/Exgratia Medical reimbursment Leave travel alownce Earned Leave Encashment Compensation to Employees Employeee welfare expencess Pension and gratuity Other terminal benefits Expenses on trust Arrear of Pay Commission/Time Scale Additional employee Expenses(@2.5% of incremental GFA) Employee Costs (before charge to capital) Less expenses capitalized Net employee cost

FY 2010-11
Unaudited

FY 2011-12
Estim ated

FY 2012-13
Projected

176.09 72.28 13.07 1.85 2.48 0.10 24.28 0.03 0.29 37.49 3.52 0.26 0.00 0.00 331.75 65.44 266.31

184.90 107.24 13.73 4.87 2.73 0.11 25.01 0.03 0.32 55.74 3.87 0.27 0.00 5.29 404.09 87.68 316.41

203.11 117.81 15.08 5.35 3.00 0.12 27.48 0.03 0.36 61.23 4.25 0.30 0.00 18.54 456.64 99.09 357.56

As mentioned above evolution of sub account of employee cost has been forecasted from base figure of FY2010-11 balance sheet and actual figure available till date. While projecting the expenses for ensuing year, petitioner has endeavoured to control the employee expenses but cost has increased marginally due to annual increase in pay & other allowances. Various sub account are estimated as follows: Basic salary: The petitioner would like to submit that the projected growth in basic salaries in FY2011-12 is due to mainly time bound increment, annual increase in pay. The combined impact of annual increment and time bound increment has been estimated 5% over the basic salary of FY2010-11. Therefore petitioner has estimated basic salaries for FY2011-12 to increase by 5% from FY2010-11 value and for FY2012-13 has been estimated to increase by inflation as provided in the regulation. Dearness Allowance (DA): In the Pay Scales effective from January 2006 the instalment of Dearness Allowance are due on each 1st January & 1st July of each calendar year. The dearness allowance is incremented every sixth month based on the bench mark set by the central government. For FY2010-11 petitioner has estimated dearness

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allowance to be 58 %( 51% for 3 month,58% for 6month & 65% for next three month). For FY 2012-13 it has been linked to inflation. Other allowance: Other allowance for FY2011-12 has been forecasted in the ratio as actually incurred in FY2010-11 of basic salary & for FY2012-13 it has been escalated by inflation index. Likewise, Medical Reimbursement, LTA, Earn Leave Encashment, staff welfare expenses and other terminal benefit have been forecast to increase by inflation index per year from FY2009-10. Pension and Gratuity: Pension and Gratuity have been calculated at 16.7% and 2.38% (i.e., 19.08%) of Basic Salary and Dearness Allowance. Capitalisation of Expenses: Employee Expenses Capitalized has been taken 22% as per audited balance sheet of FY2007-08. As mentioned in clause: 5.1.3 an additional incremental expenses of 2.5% of GFA addition during the previous year has also been added.

5.2. Administration and General (A&G) Expenses:


These expenses are incurred by the petitioner for meeting the day-to-day expenses relating to the administration of its offices, insurance, communication, professional charges, audit fees, advertisement expenses, freight etc. All these expenses are directly affected by inflation. Therefore A&G expenses have been projected considering the impact of inflation and need for addition of more substation and offices. Forecasts of A&G expenses for Transco are summarised below in Tables 5-3, beginning with the figures from the provisional figures for FY2010-11.

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Table 5-4:

A &G Expenses (Rs. Crs.)


Details (Rs.Cr) FY 2010-11 FY 2011-12 FY 2012-13
Unaudited Estim ated Projected

Rent, Rates & Taxes Insurance Telephone,Postage&Telegrams,Telex charges Legal charges Audit fees Consultancy charges Technical fees and professional charges Conveyance and traveling Regulatory expenses Electricity Charges Other expenses
Additional Expenses(@2.5% of incremental GFA)

Total Capitalized Net

0.66 0.24 1.77 0.92 0.34 0.13 0.27 2.76 0.45 6.88 14.42 10.85 3.57

0.72 0.26 1.94 1.01 0.37 0.15 0.30 3.03 3.65 0.49 7.56 0.26 19.75 3.75 16.00

0.80 0.29 2.14 1.11 0.41 0.16 0.33 3.33 4.10 0.54 8.31 0.91 22.42 4.26 18.16

It may be noted that licensee is capitalizing a portion of A&G cost .For current submission licensee has taken capitalization as 19%, approved by commission in its last tariff order. As a reflection of the continuing commitment of the Petitioner to keep costs under control, almost all A&G Expenses are forecast to increase by only inflation index per year across the board to only offset the effect of inflation. In addition to above regulatory expenses Rs 10 lacs application fees and Rs 500 per MU energy delivered to distribution licensees as license fees has been added in A&G expenses in FY2012-13 which is Rs 4.10. As mentioned in clause:5.1.3 an additional incremental expenses of 2.5% of GFA addition during the previous year has also been added 5.3. Gross Fixed Assets (GFA) Balances and Capital Formation Assumptions The assumptions used for projecting GFA and CWIP are as follows: The opening GFA and CWIP for FY 2011-12 have been taken as per the closing figures provisional annual accounts of FY 2010-11. 25% the opening CWIP and 25% of investment made during the year, expenses capitalised & interest capitalised (25% of total investment) has been assumed to get capitalised during the year.
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Investment through deposit work has not been taken for capital formation as per policy adopted by commission in its last tariff Order. Thus investment shown in capital formation table below table 5.4&4.5 dont include work funded through deposit work. Table 5.5 shows Licensees investment plan for FY2011-12 and FY2012-13 along with the proposed funding of each component of the investment plan. The detail of activities carried out in each scheme has already been explained in section 3.3. Table 5-5: Transco Investment Plan: (Rs. Cr.)
Particular Loan Equity from GOUP Loan REC PFC New Capex Loan Deposit Work T otal 964 0 250 250 400 250 1614 522 0 7 03 260 7 03 260 522.05 250 250 1028 0 0 522 250 1800 Grant FY 2011-12 Deposit Equity T otal 400 400 Loan Grant FY 2012-13 Deposit Equity T otal 1027.95 1028

Petitioner has considered capitalisation of investment as 25% of the sum of opening WIP, investment made during the year (excluding deposit work), employees expenses capitalised, A&G expenses capitalised and interest capitalised. Detail of capitalisation & work in progress for the FY2011-12 & FY2012-13 has been calculated in following table: Table 5-6: Capitalisation & WIP of Investment during FY 2011-12 & FY2012-13
Particulars (Rs Crs) Opening WIP Inv estment Employ ee Ex penses Capitalisation @29% A &G Ex penses Capitalisation @1 9% Interest Capitalisation Total Inv estments Transferred to GFA (Total Capitalisation) Closing WIP A B C D E F=A +B+C+D+E G=25%*F H=F-G FY 201 1 -1 2 Projected 2405 1 363 88 4 85 3944 986 2958 FY 201 2-1 3 Projected 2958 1 550 99 4 99 47 1 0 117 8 3533

Notes:(1) Opening Balances as per provisional figures of FY2010-11. (2) Capitalized expenses are from Emp. cost & AG cost Tables (3) Transfer from WIP to GFA=25% of beginning WIP+25% of total investment, capitalized Interest, Capitalized employee cost, capitalized A&G expenses.

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Table 5-7: Gross Fixed Assets for FY2011-12 & FY2012-13


Particular (Rs Crs) Opening GFA Addition to GFA during the year Closing GFA A B C=A+B FY2011-12 Estimated 7193 986 8179 FY2012-13 Projected 8179 1178 9356

Notes:

(1) Opening Balances as per provisional figures of FY2010-11. (2) Addition to GFA is taken from above table

5.4. Repair and Maintenance (R&M) Expenses


In this ARR petitioner has assumed same methodology as approved in last tariff order. Therefore R&M expense has been projected from expenses of FY2010-11 and has been increased with Escalation index only to offset impact of inflation. As per un-audited balance sheet of FY2010-11 the actual expenditure incurred by the licensees under R&M expenditure is Rs 101.74 crs. and Petitioner has projected Rs 127.97 Crs. for FY2012-13.The amount so estimated has been spread out proportionally among the sub-accounts. Further as mentioned in clause: 5.2.1 summarized below: an additional incremental expenses of 2.5% of GFA addition during the previous year has also been added. The Forecast R&M expense for FY2012-13 is

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Table 5-8: R&M Expenses:


Details (Rs.Cr) Plant & Machinery Building Civil works Other Expenses Lines, Cable Network, etc Vehicles Furniture & Fixtures Office equipment Additional Expenses(@2.5% incremental GFA) Total FY 2010-11 Unaudited 86.29 5.14 10.21 0.01 0.00 0.08 101.74 FY 2011-12 Estimated 94.80 5.65 11.22 0.01 0.00 0.09 1.48 113.24 FY 2012-13 Projected 104.14 6.21 12.32 0.01 0.00 0.10 5.20 127.97

of

5.5. Depreciation Expenses:


The Commission in its Transmission Tariff Regulations has specified the methodology for the computation of depreciation. The regulation also specifies the rates to be used for the purpose of computation of the depreciation charged during the year. In the last Tariff Order the Commission has approved depreciation on the basis of weighted average depreciation rates as against specific depreciation rates for each class of asset. Further Transmission Tariff Regulations provide for charging depreciation on opening GFA and a pro-rata basis on assets capitalized during the year. Petitioner has used same methodology for computing depreciation in this ARR. In this petition Petitioner has taken weighted average depreciation rate of 4.50%, which has been derived as per unaudited balance sheet of FY2010-11 on opening GFA. The depreciation has been charged for the entire year on the opening GFA and pro-rata basis for the assets capitalized during the year. Opening GFA for FY2011-12 has been taken from provisional balance sheet of FY201011.Opening GFA for FY2011-12 and addition to fixed assets has already been dealt in previous section. Hence based on the same and using above specified weight average depreciation rate of 4.5% ,the petitioner has calculated depreciation for FY2011-12 & FY 2012-13 in following table:

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Table 5-9: Depreciation Expenses:


Particulars (Rs.Cr.) Depreciation Rate Opening GFA A ddition to GFA during the y ear Depreciation on opening GFA + addition during the y ear A B C D= (A*B)+(C*A/2) FY 201 1 -1 2 Estimated 4.50% 7 1 93 986 346 FY 201 2-1 3 Projected 4.50% 81 7 9 117 8 395

5.6. Interest and Financing costs


Transmission Tariff Regulation stipulate that Interest and finance charges on loan capital shall be computed on the outstanding loans based on the existing agreements and arrangements terms regarding the interest rate and the repayment schedules. Interest on fresh loans shall be allowed only on loan raised for projects approved and undertaken in accordance with the guidelines contained in Para 3.7 of these regulations. Accordingly petitioner has computed interest and financing costs for FY2012-13 based on the current schedule of long-term debt, repayments and new debt requirements for new project to be executed. The summary of the interest and finance cost is provided in table 5-10 below:

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Table 5-10: Details of Interest & Finance Cost:


Details (Rs.Cr) PFC(RTL) PFC (RTL-3060 & 65) PFC BLC PFC RTL PFC RTL (3090,3092) HUDCO REC Reschedule REC-06 to 11 REC (12 to 13) REC (14 to 107) NCRBP GoUP New Capex Loan sub Total(I) Other Interest & Finance Charges Bank Charges Other Bank Charges Guarantee Fees Sub Total(II) Gross Interest & Financing Cost IDC Net Interest Cost FY 2010-11 Unaudited 49.38 46.32 2.49 53.61 7.98 22.68 16.80 27.41 10.35 61.52 1.84 16.67 0.00 317.05 FY 2011-12 Estimated 38.12 35.05 0.98 80.51 6.71 2.00 7.50 25.72 9.25 154.32 1.15 7.98 0.00 369.29 FY 2012-13 Projected 31.92 28.77 0.29 91.92 5.87 0.00 7.12 20.01 8.16 196.53 0.38 7.98 31.32 430.27

0.51

9.64

5.22

0.51 317.56 107.91 209.65

9.64 378.93 84.94 293.99

5.22 435.49 98.96 336.53

Interest on Working Capital: 1. The Transmission tariff regulations provides for normative interest on working Capital based on the methodology outlined in the regulations. The petitioner is eligible for interest on working capital worked out on methodology specified in the regulations. 2. Further Transmission tariff regulations provide following methodology for calculating working capital (i) Operation and Maintenance expenses, which includes Employee costs, R&M expenses and A&G expenses, for one month; (ii) One-twelfth of the sum of the book value of stores, materials and supplies at the end of each month of current financial year.
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(iii) Receivables equivalent to 60 days average billing of consumers less security deposits by the beneficiaries. 3. Rate of interest on working capital shall be the Bank Rate as specified by Reserve Bank of India as on 1st April. Based on above methodology petitioner has computed interest on working capital in following table: Table 5-11: Interest on Working Capital (Rs.Cr.)
Details FY 2010-11 Unaudited FY 2011-12 Estimated FY 2012-13 Projected

One month's O & M Expenses One-twelfth of the sum of the book value of stores, materials and supplies at the end of each month of such financial year Receivables equivalent to 60 days average billing of Beneficiaries Gross Total Security Deposits by the beneficiaries (if any ) Net Working Capital Rate of Interest for Working Capital Interest on Working Capital

37.33 36.39

44.76 9.47

50.59 10.76

149.01 222.73

190.29 244.52

216.46 277.81

222.73 0.00% -

244.52 12.50% 30.56

277.81 12.50% 34.73

5.7. Other Income:


Other Income includes only non-tariff income, which comprises interest on loans and advances to employees, income from fixed rate investment deposits and interest on loans and advances to Licensees. It is estimated that other income will increase by inflation index for FY2011-12 & FY2012-13 from FY2010-11 provisional financial statement and as such same hike is projected for both the years.

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Table 5-12: Summary of Other Income:


Details (Rs.Cr) FY 2010-11 Unaudited FY 2011-12 Estimated FY 2012-13 Projected

Share of Income from the other businesses Interest on loan to Staff Income from Investments Revenue from surcharges for late payment Any other Income Total Non- tariff Income

40.30

29.62

32.53

5.8. Reasonable return/ Return on Equity:


Under provisions of the Regulation licensees are allowed a return of @ 14% on equity base, For equity base calculation debt equity ratio shall be 70:30.Where equity involves is more than 30%, the amount of equity for the purpose of tariff shall be limited to 30%.Equity amount more than 30% shall be considered as loan. In case of actual equity employed is less than 30%, actual debt and equity shall be considered for determination of tariff. In this petition return on equity has been computed as per methodology adopted by Honble Commission in the last Tariff Order. In view of the huge gap in the recovery of cost of supply at the DisComs level, Petitioner is of the view that return on equity would only result in accumulation of receivables. As such Petitioner proposes to charge return on equity only @ 2% for the financial year FY2012-13. ROE is being calculated on the equity inflow from GOUP up to FY2012-13 and normative equity portion in capitalised assets during the year. Computation is provided in following table:

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Table 5-13: Return on Equity:


Particulars Return on Equity Regulatory equity at the beginning Capitalised assets during the year Equity portion of expenditure on capitalised assets Regulatoryequity at the end Return computation Return Regulatory equity at the beginning Returnon Equity portion of expenditure on capitalised assets Total return on regulatory equity 46 2 48.55 51 1 51.52 52 3 55.32 58 4 61.81 FY2007-08 1,843 1,177 353 2,196 FY2008-09 2,196 416 125 2,321 FY2009-10 2,321 709 213 2,534 FY2010-11 2,534 281 84 2,618 FY2011-12 2,618 986 296 2,914 FY2012-13 2,914 1,178 353 3,267

5.9. Provision for Bad and Doubtful Debts:


In last year Tariff petition Petitioner had projected Rs. 47.58 Cr. as debts but Honble in its Tariff Order rejected this element of ARR with the view that Commission failed to understand the reason for bad debt and same has been rejected. As such Petitioner has not estimated this element of expenses in this petition.

5.10. Service tax:


Para 4.9 of UPERC Transmission Regulations provide Any cess or duty or royalty or tax imposed by the State Government shall be allowed as pass through to be recovered from the distribution licensees / long term open access consumers in proportion of their allotted capacity or quantity of energy delivered, as the case may be. Service tax liability is imposed on the service provider which would be UPPTCL in this case. Service tax would be chargeable on actual energy wheeled during a financial year and at the rates as notified & amended by the Govt from time to time. The Petitioner seeks allowance of such statutory liability on the service provider UPPTCL as pass through in tariff. Also such liability may be imposed on UPPCTL retrospectively like it was done in the case of PGCIL. In such an event the Petitioner would approach the Commission for allowance of such liability in its ARR accordingly.

5.11. TransCo ARR:


The ARR for FY2012-13 is summarised below in Table 5-14 from the expenses and allowances described in previous section:
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Table 5-14: Annual Revenue Requirement:


Details (Rs.Cr) Employee Costs (net of capitalization) A&G Costs Repair & Maintenance Expense Depreciation Interest & Finance Charges Less Other Income Return on Equity Debits, Write-offs and any other items Annual Revenue Requirement FY 2010-11 Unaudited 266.31 3.57 101.74 310.93 209.65 (40.30) 42.17 894.08 FY 2011-12 Estimated 316.41 16.00 113.24 345.85 324.56 (29.62) 55.32 1,141.76 FY 2012-13 Projected 357.56 18.16 127.97 394.53 371.26 (32.53) 61.81 1,298.75

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6 Proposed Transmission Tariff:

6.1. Derivation of Tariff:The proposed transmission tariff is derived in Table 6-1 in accordance with the methodology provided in Transmission Tariff Regulation. It provides that in case of more than one longterm customers of the Transmission system (distribution licensee/long term open access customers), utilizing transmission system, the wheeling charges levieable on such customers shall be computed as per the following formula: Transmission /wheeling charges payable by the long term of customer of Transmission system for use of transmission system for a month = (Net ARR/12)*(CL/SCL) CL =Allotted Transmission Capacity in MW of particular long term customer. SCL=Sum of the Allotted Transmission Capacities (in MW) to all long-term customers. Presently DisComs have not been allotted transmission capacity as such Transmission tariff has been calculated on the basis of numbers of units wheeled by the transmission licensee for distribution licensees. This is based on the same approach adopted by the Commission in its last Tariff Order. Based on the above mentioned methodology, the transmission charges payable by all the licensees in the state is computed bellow: Table 6-1: Derivation of Transmission Tariff:
Details UPPTCL ARR (Rs.Cr.) Total Energy Delivered/To be delivered (MU) Transmission Tariff (Rs./kWh) FY 2010-11 894 61814 0.145 FY 2011-12 1142 70070 0.163 FY 2012-13 1299 79043 0.164

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7 SLDC Charges: Table 7-1 provides a summary of estimated costs of running UPPTCL central load dispatch centre in Lucknow and four regional load dispatch centres at Panki, Sahupuri, Modipuram and Moradabad which are owned and operated by UPPTCL. Table 7-1: Break-up of SLDC Charges:
Details (Rs.Crore) FY2011-12 Estimated FY2012-13 Proposed

Employee Costs A&G Costs Repair & Maintenance Expense Subtotal Depreciation Interest & Finance Charges Less: Other Income Return on Equity Total SLDC ARR

7.89 0.68 0.15 8.72 6.77 6.35 (0.58) 1.08 22.34

8.92 0.75 0.20 9.86 7.73 7.27 (0.64) 1.21 25.43

All direct cash expenses in the above estimates, including Employee Costs, A&G and R&M, have been obtained from central load dispatch centre. However, capital related charges including Interest & Finance Charges, Depreciation and the Return on equity, could not be separated because SLDS is functioning as integral part of UP Transco, such the same have been approximated as follows: Depreciation Expense for Transco is 78% in FY2011-12 & 78% in FY2012-13 of the sum of above cash expenses. This may be calculated from Table 4-9 in the absence of precise information on the cost of the SLDC assets, these values have been applied to SLDC cash costs to account for SLDC Depreciation Expense. Interest and Finance charges & other Income have been similarly approximated. Pending a better delineation of capital charges, the above SLDC estimates are the best available. However, it may also be noted that the estimated SLDC costs comprise only about 1.9 % of total transmission costs. This means that any major error in the SLDC

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cost estimate (which is quite likely) will be very small when compared to total transmission costs.

PRAYER:
The petitioner prays that the Commission may be pleased to1.

Admit the accompanying Annual Revenue Requirement and Tariff Petition. Approve the Annual Revenue Requirement for financial year 2012-13. Allow the petitioner to add/change / alter / modify this application at a future date. Issue any other relief, order or direction which the commission may deem fit.

2.

3.

4.

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