T.P. No. 1 of 2013 Dated 20-06-2013

Determination of Tariff for Generation and Distribution Order dated 20-06-2013
TAMIL NADU ELECTRICITY REGULATORY COMMISSION

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Determination of Tariff for Generation and Distribution --------------------------------------------T.P. No. 1 of 2013 Order dated: 20-06-2013 (effective from 21-06-2013)
Tamil Nadu Electricity Regulatory Commission
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TAMIL NADU ELECTRICITY REGULATORY COMMISSION (Constituted under section 82 (1) of Electricity Act 2003) (Central Act 36 of 2003)
PRESENT
: Thiru. K.Venugopal Member Thiru. S.Nagalsamy Member
T.P. No. 1 of 2013 Date of Order: 20-06-2013
In the matter of: Determination of Tariff for Generation and Distribution
In exercise of the powers conferred by clauses (a), (c),(d) of sub-section (1) of section 62 and clause (a) of sub-section(1) of section 86 of the Electricity Act 2003, (Central Act 36 of 2003) and all other powers hereunto enabling in that behalf and after considering the views of the State Advisory Committee meeting held on 26.4.2013 and after considering suggestions and objections received from the public during the Public hearings held on 03.05.2013, 08.05.2013, 10.05.2013, and 17.05.2013, as per sub-section (3) of section 64 of the said Act, the Tamil Nadu Electricity Regulatory Commission, hereby, passes this order for Generation and Distribution Tariff. This Order shall take effect on and from the June 21, 2013.
Sd/(S. Nagalsamy) Member
Sd/(K.Venugopal) Member
TABLE OF CONTENTS
LIST OF ABBREVIATIONS ................................................................................................................................................... 6 A1: INTRODUCTION........................................................................................................................................................... 7
PREAMBLE ......................................................................................................................................................... 7 TARIFF FILING..................................................................................................................................................... 8 PROCEDURE ADOPTED ......................................................................................................................................... 8 TRANSFER SCHEME ............................................................................................................................................10 BRIEF NOTE ON TARIFF FILING AND PUBLIC HEARING ...............................................................................................13 APPLICABILITY OF ORDER ....................................................................................................................................15 LAYOUT OF THE ORDER ...................................................................................................................................... 15 APPROACH OF THE ORDER...................................................................................................................................16
A2: STAKEHOLDERS COMMENTS, TANGEDCOS REPLY AND COMMISSIONS VIEW ......................................................... 18
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. a. b. c. d. e. f. g. h. i. 20. 21.
GENERAL ISSUES .....................................................................................................................................18 DELAY IN FILING ...................................................................................................................................... 25 O&M EXPENSES.....................................................................................................................................26 FUEL COST AND FPAC .............................................................................................................................27 GENERATION AND POWER PURCHASE .........................................................................................................29 AT&C LOSSES ........................................................................................................................................32 INTEREST EXPENSES .................................................................................................................................33 REGULATORY ASSET ................................................................................................................................35 CROSS SUBSIDY, COST TO SERVE AND AVERAGE COST OF SUPPLY .....................................................................41 MERIT ORDER DESPATCH .........................................................................................................................48 CROSS SUBSIDY SURCHARGE .....................................................................................................................51 SUBSIDY ................................................................................................................................................55 PEAK HOURS AND TIME SLOTS....................................................................................................................55 SOLAR PURCHASE OBLIGATION .................................................................................................................. 56 RENEWABLE POWER ................................................................................................................................56 EQUITABLE DISTRIBUTION OF POWER ..........................................................................................................57 IMPACT OF THANE CYCLONE ....................................................................................................................57 SALES ...................................................................................................................................................58 TARIFF RELATED COMMENTS .....................................................................................................................58 Tariff for HT Industries ....................................................................................................................... 58 Tariff for HT Commercial ....................................................................................................................59 Tariff for Agriculture and Hut services ...............................................................................................59 Tariff for Streetlight and Water supply .............................................................................................. 61 Tariff for Domestic .............................................................................................................................61 Tariff for Tiny Industries .....................................................................................................................62 Tariff for LT Commercial.....................................................................................................................63 Tariff General .....................................................................................................................................63 Request for Separate Category ..........................................................................................................65 CONSUMER ISSUES AND QUALITY OF SUPPLY ................................................................................................68 OBJECTIONS/SUGGESTIONS BY SOUTHERN RAILWAYS ....................................................................................70
A3: FINAL TRUE-UP FOR FY 2010-11, PROVISIONAL TRUE-UP FOR FY 2011-12 AND ANNUAL PERFORMANCE REVIEW FOR FY 2012-13 ................................................................................................................................................................ 75
ENERGY SALES FY11 AND FY12........................................................................................................................75 Impact of Wheeling units and Cost FY 2010-11 and FY 2011-12 .............................................................. 77 ENERGY SALES FY 2012-13 .............................................................................................................................80 ENERGY AVAILABILITY ........................................................................................................................................85 Own Generation .......................................................................................................................................... 86 Power Purchase from other sources ............................................................................................................94 ENERGY BALANCE AND DISTRIBUTION LOSS..........................................................................................................104 FIXED EXPENSES..............................................................................................................................................106
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Operation and Maintenance Expenses ......................................................................................................106 Segregation of accounts ............................................................................................................................119 Capital Expenditure and capitalization ......................................................................................................121 Depreciation ..............................................................................................................................................124 Interest on long term loans and other financing charges..........................................................................126 Return on Equity ........................................................................................................................................ 132 Interest on Working Capital.......................................................................................................................135 Other Debits...............................................................................................................................................138 Prior Period Expenses ................................................................................................................................140 Demand Side Management .......................................................................................................................141 Contribution for Contingency reserves ......................................................................................................141 Summary of fixed Cost approved for Distribution function .......................................................................142 EXPENSES ON ACCOUNT OF GENERATION .............................................................................................................142 Capacity charges for own generating stations ..........................................................................................143 Variable cost for own generating stations ................................................................................................151 POWER PURCHASE FROM OTHER SOURCES ...........................................................................................................166 Central generating stations .......................................................................................................................166 Independent Power Producers...................................................................................................................170 Non conventional energy sources and Captive power plants ....................................................................172 Power purchase from traders and other sources ......................................................................................174 Power Grid Corporation of India Limited (PGCIL) Charges ........................................................................176 Intrastate Transmission Charges ...............................................................................................................177 AGGREGATE REVENUE REQUIREMENT AND REVENUE GAP FOR THE FIRST CONTROL PERIOD ...........................................178 Non Tariff and Other Income .....................................................................................................................179 Estimation of additional power purchase cost due to higher T&D loss .....................................................179 Revenue from Sale of Power FY 2010-11 and FY 2011-12 ......................................................................181 Revenue from Sale of Power FY 2012-13 ................................................................................................182 Low Power Factor Surcharge .....................................................................................................................183 Revenue Gap for the first control period ...................................................................................................184
A4: AGGREGATE REVENUE REQUIREMENT FOR THE SECOND CONTROL PERIOD FY 2013-14 TO FY 2015-16 ................ 185
ENERGY SALES ................................................................................................................................................185 ENERGY AVAILABILITY ......................................................................................................................................192 Own Generation ........................................................................................................................................192 Power Purchase from other sources ..........................................................................................................200 ENERGY BALANCE AND DISTRIBUTION LOSS..........................................................................................................210 FIXED EXPENSES..............................................................................................................................................212 Operation and Maintenance Expenses ......................................................................................................212 Capital Expenditure and capitalization ......................................................................................................219 Depreciation ..............................................................................................................................................223 Interest on long term loans and other financing charges..........................................................................226 Return on Equity ........................................................................................................................................ 231 Interest on Working Capital.......................................................................................................................232 Other Debits...............................................................................................................................................235 Contribution for Contingency reserves ......................................................................................................236 Summary of fixed Cost approved for Distribution business .......................................................................237 EXPENSES ON ACCOUNT OF GENERATION .............................................................................................................237 Capacity charges for own generating stations ..........................................................................................238 Variable cost for own generating stations ................................................................................................245 POWER PURCHASE FROM OTHER SOURCES ...........................................................................................................259 Central generating stations .......................................................................................................................259 Independent Power Producers...................................................................................................................262 Non conventional energy sources and Captive power plants ....................................................................264 Power purchase from traders and other sources ......................................................................................265 Power Grid Corporation of India Limited (PGCIL) Charges ........................................................................267 Intrastate Transmission Charges ...............................................................................................................267
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Merit order Dispatch .................................................................................................................................268 Summary of power purchase costs ............................................................................................................273 AGGREGATE REVENUE REQUIREMENT FOR THE SECOND CONTROL PERIOD ..................................................................281 Non Tariff Income (NTI) and Other Income ...............................................................................................282 Higher interest expenses due to abnormal Capitalization .........................................................................282
A5: ESTIMATION OF REVENUE GAP AND TARIFF DETERMINATION FOR FY 2013-14 ....................................................... 284
Revenue from Sale of Power FY 2013-14 .................................................................................................284 REVENUE GAP AND DETERMINATION OF REGULATORY ASSET ...................................................................................289 REVENUE ACCOUNT AND AMORTIZATION OF REGULATORY ASSET ............................................................................290 VOLTAGE WISE COST TO SERVE, AVERAGE COST OF SUPPLY AND CROSS SUBSIDY REDUCTION.........................................294 Voltage wise cost to serve for FY 2013-14 .................................................................................................294 Embedded cost method .............................................................................................................................299 Voltage wise cost to serve .........................................................................................................................304 Average Cost of Supply and Cross subsidy reduction ................................................................................306 OPEN ACCESS CHARGES ...................................................................................................................................308 Wheeling Charges ......................................................................................................................................308 Cross Subsidy Surcharge ............................................................................................................................309 Grid Availability Charges ...........................................................................................................................313 Additional Surcharge .................................................................................................................................315 Restoration Charges ..................................................................................................................................315 FUEL AND POWER PURCHASE COST ADJUSTMENT MECHANISM (FPCA) ......................................................................315 TARIFF RATIONALIZATION AND REVISION OF RETAIL SUPPLY TARIFFS ...........................................................................317 PF Incentive................................................................................................................................................317 TOD Tariff ..................................................................................................................................................318
A6: TARIFF SCHEDULE.................................................................................................................................................... 321
TARIFF FOR HIGH TENSION SUPPLY CONSUMERS ......................................................................................321 TARIFF FOR LOW TENSION SUPPLY CONSUMERS .......................................................................................327
A7: SUMMARY OF DIRECTIVES ...................................................................................................................................... 341
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List of Abbreviations
Abbreviation A&G ABC ABR APTEL ARR CAGR CEA CERC CFL CGS COS CPP CSD CWIP DA EA ED FRP FY GFA G.O. GPF GoTN HT HVDS kWh LT LTOA MU MW MYT NTI O&M PF PLF R&M O&M RoE SLDC STOA T&D TANGEDCO TANTRANSCO TNEB TNERC ToD TP Description Administration and General Expenses Aerial Bunched Cables Average Billing Rate Appellate Tribunal for Electricity Aggregate Revenue Requirement Compounded Annual Growth Rate Central Electricity Authority Central Electricity Regulatory Commission Compact Fluorescent Lamps Central Generating Station Cost of Supply Captive Power Plant Consumer Security Deposit Capital Work in Progress Dearness Allowance Electricity Act Electricity Duty Financial Restructuring Plan Financial Year Gross Fixed Assets Government Order General Provident Fund Government of Tamil Nadu High Tension High Voltage Distribution System Kilo-watt Hour Low Tension Long Term Open Access Million Units Mega-watt Multi-Year Tariff Non Tariff Income Operation & Maintenance Power Factor Plant Load Factor Repair & Maintenance Operation & Maintenance Return on Equity State Load Despatch Centre Short Term Open Access Transmission & Distribution Tamil Nadu Generation and Distribution Corporation Ltd. Tamil Nadu Transmission Corporation Ltd. Tamil Nadu Electricity Board Tamil Nadu Electricity Regulatory Commission Time of Day Tariff Policy Page 6 June 2013
A1:
INTRODUCTION
Preamble
1.1 Consequent to the enactment of the Electricity Regulatory Commissions Act 1998 (Central Act 14 of 1998), the Government of Tamil Nadu (GoTN) constituted the Tamil Nadu Electricity Regulatory Commission (TNERC) vide G.O.Ms.No.58, Energy (A1) Department, dated 17-03-1999. The Commission issued its first tariff order (Order No 1 of 2002) under Section 29 of the Electricity Regulatory Commission Act, 1998, on 15-03-2003 based on the petition filed by the Tamil Nadu Electricity Board (TNEB) on 25-09-2002. Electricity Regulatory Commission Act, 1998 was repealed and the Electricity Act 2003 (Central Act 36 of 2003) was enacted with effect from 10-06-2003. The Commission notified the Tamil Nadu Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff) Regulations 2005 (herein after called Tariff Regulations) on 03-08-2005under Section 61 read with Section 181 of the Act. The Commission issued separate order (Order No. 2 of 2006) on Transmission charges, Wheeling charges, Cross Subsidy surcharge and Additional surcharge on1505-2006, based on the petition filed by TNEB on 26-09-2005 under Section 42 of the Act. The Commission had issued its first Renewable Energy Tariff Order on 15-05-2006. Later in 2009, Commission has issued technology wise second Renewable Energy Tariff Orders. Further on 31-07- 2012, the Commission issued its third Tariff Order with respect to renewable energy sources. The Commission notified the TNERC (Terms and Conditions for Determination of Tariff for Intra state Transmission / Distribution of Electricity under MYT Framework) Regulations, 2009 (herein after called MYT Regulations) on 11-02-2009. Subsequently, TNEB filed an application for determination of tariff with Aggregate Revenue Requirement (ARR) for all functions on 18-01-2010, which was admitted by the Commission after initial scrutiny on 09-02-2010. The Commission issued its second Retail Tariff Order on 31.07.2010 (Order No. 3 of 2010). TNEB was formed as a statutory body by the Government of Tamil Nadu (GoTN) on 01-07-1957 under the Electricity (Supply) Act 1948.The Board was primarily responsible for generation, transmission, distribution and supply of electricity in the State of Tamil Nadu.
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1.10
Government of Tamil Nadu, in G.O (Ms) No 114 Energy Dept, dated 08-10-2008 accorded in principle approval for the re-organisation of TNEB by establishment of a holding company, namely TNEB Ltd and two subsidiary companies, namely Tamil Nadu Transmission Corporation Ltd (TANTRANSCO) and Tamil Nadu Generation and Distribution Corporation Ltd (TANGEDCO) with the stipulation that the aforementioned companies shall be fully owned by the Government. Tamil Nadu Generation and Distribution Corporation Ltd. was incorporated on 01-122009 and started functioning as such with effect from. 01-11-2010. Subsequently TANGEDCO filed tariff petition for determination of tariff for Generation and Distribution for the year FY 2012-13, the Commission scrutinised and reviewed the same. After a thorough review the third Order of the Commission on determination of Generation and Retail Tariff was passed on 30-03-2012 (Order No. 1 of 2012).
1.11
1.12
Tariff Filing
1.13 The Tamil Nadu Generation and Distribution Corporation Ltd. (TANGEDCO) has filed its application before the Commission on 19-02-2013 for final true-up and approval of Aggregate Revenue Requirement (ARR) for the year 2010-11based on 5 months audited accounts, provisional true-up and approval of ARR for the year 201112 based on provisional accounts, Annual Performance Review (APR) for the year 2012-13 based on estimates and its Multi Year Tariff petition for 2013-14 to 2015-16 along with tariff revision for 2013-14. There was a delay of 81 days in filing this Petition and the Petitioner filed an Interim Application for condoning the delay of 81 days. The Commission has written three letters to TANGEDCO directing them to file the Tariff Petition for FY 2013-14. Copies of letters dated 8th January 2013, 21st January 2013 and 8th February 2013 are placed as Annexure I. After hearing the submissions of TANGEDCO, the Petition was admitted on 21-02-2103 after condoning the delay and registered as T.P. No 1 of 2013. Copy of the admission order is placed as Annexure II
1.14
Procedure Adopted
1.15 Regulation 7 (2) of Tariff Regulation specifies the following:The applicant shall publish, for the information of public, the contents of the application in an abridged form in English and Tamil newspapers having wide circulation and as per the direction of the Commission in this regard. The copies of Petition and documents filed with the Commission shall also be made available at a nominal price, besides hosting them in the website. The public notice containing the salient details with regard to the petition was approved and communicated to TANGEDCO on 28-02-2013, with a direction to arrange publication of the notice in news papers and it was published on 02-03-2013. The written objections/suggestions/views from stakeholders were invited by 02-042013.
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The TANGEDCO published the public notice in the following newspapers on March 02, 2013. a) b) c) d) The New Indian Express (English Daily); The Deccan Chronicle (English Daily); Dinamani (Tamil Daily) and Makkal Kural (Tamil Daily)
1.18
The Petition was placed before the State Advisory Committee on 26-04-2013. The list of Members who participated in the meeting is detailed as Annexure III to this Order. The list of stakeholders who have submitted written objections/suggestions/views regarding the petition in response to the public notice are detailed in Annexure IV and Objections/suggestions/views are included in Chapter A2. The Commission conducted public hearing at the following places on the dates noted against each:
Date 03-05-2013 08-05-2013 10-05-2013 17-05-2013 Day Friday Wednesday Friday Friday Place Chennai Tiruchirappalli Madurai Coimbatore Venue Tamil Isai Sangam, Raja Annamalai Mandram, (Near High Court),5, Esplanade Road, Chennai- 108 Kalaiarangam Thirumana Mahal, (Near central bus stand), Tiruchirappalli Platinum Jubilee Hatsun Aauditorium, Tamil Nadu Chamber of Commerce and Industry, 178-B Kamarajar Salai, Madurai Corporation Kalaiarangam, R.S. Puram, Coimbatore
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The lists of participants in each public hearing, is attached as Annexure V to this Order. The views / comments / objections raised by the participants are discussed in Chapter A2.
The Electricity Act, 2003, Tariff Policy (TP) and Regulations 1.22 Section-62 of the Act stipulates the guiding principles for determination of Tariff by the Commission and mandates that the Tariff should progressively reflect cost of supply of electricity, reduce cross-subsidy, safeguard consumer interest and recover the cost of electricity in a reasonable manner.
Section-62 (1) of Act states as under: Section-62 (1): 1. The Appropriate Commission shall determine the tariff in accordance with provisions of this Act for
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a. supply of electricity by a generating company to a distribution licensee: Provided that the Appropriate Commission may, in case of shortage of supply of electricity, fix the minimum and maximum ceiling of tariff for sale or purchase of electricity in pursuance of an agreement, entered into between a generating company and a licensee or between licensees, for a period not exceeding one year to ensure reasonable prices of electricity; b. transmission of electricity ; c. wheeling of electricity; d. retail sale of electricity. Provided that in case of distribution of electricity in the same area by two or more distribution licensees, the Appropriate Commission may, for promoting competition among distribution licensees, fix only maximum ceiling of tariff for retail sale of electricity. Similarly, the objectives stipulated in the Tariff Policy are as under: 4.0 Objectives of the policy The objectives of this tariff policy are to: a. Ensure availability of electricity to consumers at reasonable and competitive rates; b. Ensure financial viability of the sector and attract investments; c. Promote transparency, consistency and predictability in regulatory approaches across jurisdictions and minimise perceptions of regulatory risks; d. Promote competition, efficiency in operations and improvement in quality of supply. 1.23 In the State of Tamil Nadu, Tamil Nadu Electricity Regulatory Commission in exercise of powers vested in it under the Electricity Act, 2003 (Act) passes the Tariff Orders.
Transfer scheme
1.24 The proposal for Assets Transfer and Employee transfer called as Tamil Nadu Electricity Board (Reorganization and Reforms) Transfer Scheme 2010 was notified by the Government of Tamil Nadu vide G.O. (Ms).No.100 Energy (B2) Department dated 19th Oct 2010 with the effective date of implementation as 1st Nov 2010. Based on the above notification TNEB has been re-organized from 1st Nov 2010.
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1.25
This Transfer Scheme is provisional and addresses various issues like transfer of assets, revaluation of assets and partly addresses the issue of accumulated losses. This Transfer Scheme envisages deployment of staff of the erstwhile TNEB to TANGEDCO and TANTRANSCO. The Commission in its earlier Tariff Order No. 3 of 2010 dated 31-07-2010 had suggested in line with the National Electricity Policy (para 5.4.3) and Tariff Policy that the accumulated losses should not be passed on to the successor entities and financial restructuring has to be resorted to clean up the Balance Sheet of the successor companies and allow them to start on a clean slate so that the successor entities could start performing better. The statutory advices that have been sent to the Government of Tamil Nadu in this regard are appended as Annexure VI. The Commission has also issued a statutory advice with regard to the establishment of a separate Generating Company and establishment of four Distribution Companies so that the performance of these companies can be improved and efficiently monitored, which will enable proper investments and growth of the individual company. This document is appended as Annexure VII. Subsequently, as per the request of TNEB Limited, the second provisional transfer scheme was notified by the State Government vide G.O. (Ms.) No.2, Energy (B2) department, dated 2nd January 2012 with amendment in the restructuring of Balance Sheet of TNEB for the successor entities i.e. TANGEDCO and TANTRANSCO, considering the audited balance sheet of TNEB for FY 2009-10 and it had extended the provisional time for final transfer of assets and liabilities to the successor entities of erstwhile TNEB up to 31st October 2012. The same has been appended as Annexure VIII. This Transfer Scheme is also provisional and is subject to revision. The transactions for 7 months i.e. from 1st April 2010 to 30th October, 2010 do not get reflected in the opening balance sheet of the TANGEDCO as specified in the Transfer Scheme.
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Impact of Provisional Balance Sheet: a) According to Rule 9 (1) of Transfer Scheme, 2010 issued on 19th October 2010, the transfer of assets and liabilities under the scheme is provisional and will be made final upon the expiry of 12 months from the effective date of transfer. b) The date was extended through notification dated 3rd January 2012 for additional 1 year i.e. upto 31st October 2012 for final transfer of assets and liabilities to successor entities of erstwhile TNEB. c) As on the date of filing of this petition, TANGEDCO and TANTRANSCO has sought permission for extension of 6 months i.e. up to 30.04.2013 for final transfer of assets and liabilities to successor entities of erstwhile TNEB and the same has been approved by GoTN through G.O.Ms(23) dated 8th March 2013 (Annexure IX). TANGEDCO and TANTRANSCO have now sought an extension for another six months i.e. upto 31st October 2013 for final transfer of assets and liabilities to successor entities of erstwhile TNEB and the same has been addressed to the GoTN for approval and notification.
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d) In the absence of availability of opening balances based on the final Notification of GoTN, as per transfer scheme, TANGEDCO has considered the opening balance as per the provisional transfer scheme notified on 2nd January 2012. 1.28 Hence, Commission is of the view that once the final transfer scheme is notified by the State Government, the impact due to revision in the opening balance of Fixed Assets, Loan and Equity may have to be revisited and accounted during the tariff determination process of the concerned year.
Unbundling of TNEB - 1st November 2010 1.29 TNEB was unbundled on 1.11.2010. Consequently it started functioning as two separate entities namely TANGEDCO and TANTRANSCO. While TANGEDCO was made responsible for generation and distribution, TANTRANSCO was made responsible for transmission activities within the State. The Commission in its Tariff Order issued on 31st July 2010 as well as 30th March 2012 had indicated that the accumulated losses upto the date of unbundling will have to be dealt with in accordance with the National Electricity Policy and Tariff Policy. The Commission had also clearly indicated that any losses incurred after 1.11.2010 only are being dealt with in various Tariff Orders subsequent to unbundling. In this connection, the Commission would like to extract the following three paragraphs from the Tariff Petition filed by TANGEDCO for the financial year 2013-14. 10.19.6 As per the Tariff Order, the Honble Commission had expressed a view that the accumulated losses up to the date of unbundling will have to be dealt with in accordance with Para 5.4.3 of the National Electricity Policy and Tariff Policy. The provisions of the National Electricity Policy and Tariff Policy envisages that the gap at the time of unbundling will have to be sorted out by financial restructuring and support from the Government rather than passing on the accumulated losses to the successor entities. 10.19.7 In line with the National Tariff Policy, National Electricity policy and as per the Tariff Order dated 30th March 2012, TANGEDCO have not claimed any relief on account of accumulated losses prior to unbundling on 1-11-2010 in the given petition. The similar stand was taken in the earlier petition also. 10.19.8 The proposal of TANGEDCO is to create regulatory assets for the unrecovered deficit post unbundling only. TANGEDCO would like to submit that even though it has requested for creation of regulatory asset of the amount which is unrecovered deficit after claiming part as a tariff hike, all efforts has been undertaken to reduce such deficit and are under process to carry out Financial Restructuring Plan under the guidance of State Government. 1.31 The revenue gaps arising subsequent to unbundling were dealt with as Regulatory Asset in the Order of the Commission dated 30th March 2012 and is being discussed again in this Order.
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Brief Note on Tariff Filing and Public Hearing

1.32 In this Order Commission has dealt with important matters such as tariff schedule, new capacity additions by TANGEDCO, Regulatory Asset Amortisation etc. The Commission appreciates the concerns expressed by various stake holders both in the written comments submitted by them to the Commission as well as the concerns expressed during the Public Hearings held at Chennai on 3rd May 2013, Tiruchirapalli on 8th May 2013, at Madurai on 10th May 2013 and at Coimbatore on 17th May 2013. The Commission directs TANGEDCO to properly monitor the on-going projects so that they get commissioned without further delay. The projects which were scheduled to get commissioned last year have not been commissioned so far and have to be commissioned at the earliest. TANGEDCO should also ensure that the TANTRANSCO completes all the associated transmission system for evacuation of power from the generating stations which are getting commissioned during the year 2013-14 so that power generated from the generating stations are transmitted up to the load centres without any bottle necks. The TANGEDCO should ensure that the power available at the sub-stations is taken up to the consumption points by way of appropriate distribution system. All these capacity addition as well as system strengthening plans will have to be carried out through a well structured business plan and individual schemes catering to the need of the business plan. All such plans and schemes shall be submitted in accordance with the Terms and Conditions of Tariff Regulations 2005, MYT Regulations as well as Licensing Conditions to the Commission. The submission for approval in this regard so far has been unsatisfactory. The Commission has been addressing the utilities by way of letters as well as by way of directions. The compliance to such letters and directions will have to be taken seriously and must be met without fail. Further, list of correspondence with TANGEDCO in regard to data gaps and replies furnished are given in Annexure X. Various suggestions and objections that were raised on TANGEDCOs Petition after issuance of the Public Notice both in writing as well as during the Public Hearing, along with TANGEDCOs reply and the Commission's views have been detailed in Chapter A2 of this Order.
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1.38
Unmetered supply in the State relates mainly to agriculture and hut consumption. TANGEDCO has been assuming the AT&C loss level by arriving at the consumption of agriculture and huts. This issue was also a subject matter of Appeal before the Honble Appellate Tribunal of Electricity. In its last two orders, the Commission has estimated agricultural consumption based on the CEA formula. The Commission had also directed TANGEDCO to furnish sample data of the metered connections for agricultural supply for FY2012-13. The data so provided was analysed, and it was observed that the average consumption per HP had increased by 9.2% over that of FY 2011-12. Based on this data the average hours of supply per day amounted to 3.67 hrs/day which is marginally higher than that for FY 2011-12. The Commission recognizing the fact that FY2012-13 was a year of severe shortage of power along with being a drought year, took the view that it is improbable that the agricultural supply hours could have been higher than that of the previous year. Hence the Commission has assumed the average consumption per HP at the same rate as in FY2011-12. Based on the same data the energy requirement for agriculture has been estimated for the second control period. Similarly, estimates have been made for consumption by huts duly reflecting the number of huts with and without televisions and also factoring in the consumption on account of distribution of free CFL lamps, mixers, grinders and fans. TANGEDCO in its petition this year has proposed tariff hike for two categories of consumers namely Hut and Agriculture Category, tariff rates and conditions for all other categories is proposed to be as per prevailing tariff order dated 30th March 2012. Fixed Charges for Tariff Category LT-1B for Hut Consumers to be increased from Rs. 60/Month/Service to Rs. 125/Month/ Service. Fixed Charges for Tariff Category LT-IV for Agriculture Consumers to be increased from Rs. 1750/HP/Annum to Rs. 2500/HP/Annum.
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The cost of entire consumption on account of huts as well as on account of agricultural consumption is being borne by the Government of Tamil Nadu by way of subsidy under Section 65 of the Electricity Act 2003. In this matter, GoTN has given commitment letter No. 2369/A1/2013 dated 10th June 2013 detailing provision of tariff subsidy to LT IB and LT IV categories of electricity consumers. GoTN has also stated that the budget provision for necessary additional expenditure has already been made in the budget for the year FY 2013-14 and a formal order of GoTN in this regard will be issued shortly. The commitment letter received from GoTN is placed at Annexure XI. The GoTN has further clarified vide letter No. 2369/A1/2013 dated 10th June 2013 that the subsidy for other category of consumers as provided in FY 2012-13 would continue for FY 2013-14 and necessary G.O will be issued separately. This letter has been appended as Annexure XII.
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Applicability of Order
1.41 This Order will come into effect from 21-06-2013. The Generation and Retail Tariff contained in this order will be valid till 31-03-2014. TANGEDCO shall file necessary petition in accordance with the Regulations in a timely manner to enable the Commission to pass the next Tariff Order in time.
Layout of the Order

1.42 This Order is organised into seven Chapters: Chapter A1 provides details of the tariff setting process and the approach of the Order; Chapter A2 provides a brief of the Public Hearing process, including the details of comments of various stakeholders, the Petitioners response and views of the Commission thereon; Chapter A3 provide details/ analysis of the final true up for FY 2010-11, provisional true-up for FY 2011-12 and annual performance review for FY 2012-13; Chapter A4 provides analysis of the petition for determination of the Aggregate Revenue Requirement for FY 2013-14 to FY 2015-16; Chapter A5 provides details of determination of Open access charges and Retail Supply Tariff for all consumer categories, and the approach adopted by the Commission in determining the tariff; Chapter A6 gives the tariff schedule applicable for the consumers; and Chapter A7 provides details of the Directives of the Commission for compliance by TANGEDCO.
1.43
The Order contains the following Annexure, which are an integral part of the Tariff Order. Annexure I Copies of letters written to TANGEDCO directing them to file the Tariff Petition for FY 2013-14 Annexure II Copy of the admission order Annexure III The list of participants at the State Advisory Committee meeting. Annexure IV The list of stakeholders who have submitted objections/suggestions/views regarding the petition in response to the public notice.
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Annexure V The lists of participants at each public hearing. Annexure VI Copy of the statutory advices given by the Commission sent to the Government of Tamil Nadu. Annexure VII Copy of statutory advice of the Commission regarding the unbundling of TANGEDCO into a separate Generating Company and four Distribution Companies. Annexure VIII Copy of second provisional transfer scheme as notified by the State Government vide G.O. (Ms.) No.2, Energy (B2) department, dated 2nd January 2012. Annexure IX Copy of extension for finalization of transfer scheme upto 30th April 2013 notified by the State Government vide G.O.Ms(23) dated 8th March 2013 Annexure X List of letters of TANGEDCO with regard to data gaps and replies. Annexure XI Copy of Commitment letter received from GoTN for providing the tariff subsidy to Agriculture and Hut consumers. Annexure XII Copy of Letter received from GoTN extending the subsidy for other category consumers in FY 2013-14. Annexure XIII Copy of Letter received from GoTN regarding amortization of regulatory asset.
Approach of the order

1.44 Commission in its last order had stated that the Capital Account and the Revenue Account has not been maintained separately in the course of operation of TNEB and an attempt is being made in this order to segregate the same to bring financial discipline in the successor entities. The Commission has adopted the Multi Year Tariff (MYT) approach for tariff determination since its tariff order in FY 2010-11. The first control period of 3 years was upto FY 2012-13, during which time the Commission has issued two tariff orders during FY 2010-11 and FY 2012-13. The second control period spanning 3 years starts this year i.e. in FY 2013-14 and is upto FY 2015-16. 1.45 The extract from the relevant portion of the TNERC (Terms and Conditions for Determination of Tariff for Intra state Transmission / Distribution of Electricity under MYT Framework) Regulations, 2009 regarding control period is extracted below. 3). Multi year Tariff framework
Page 16 June 2013
i) Control Period The control period under the MYT framework shall be for a duration of 3 years. The year preceding the first year of the control period shall be the base year. 1.46 The broad approach adopted in this order is given below: The Commission has taken into consideration the second provisional transfer scheme as notified by the State Government vide G.O. (Ms.) No.2, Energy (B2) department, dated 2nd January 2012 with amendment in the restructuring of Balance Sheet of TNEB for the successor entities i.e. TANGEDCO and TANTRANSCO. The Commission has referred to the audited accounts of TANGEDCO for FY 2010-11 (5 months) for truing up the expenses of the utility. The Commission has undertaken a review of the various performance parameters as well as the controllable cost factors. Based on the assessment the Commission have arrived at the allowable ARR and revenue recovered by the utility. Also, Commission for the comparison purposes arrived at the approved figures for FY 2010-11 (5 months) in its last order on a pro-rata basis. The same exercise has been undertaken for the provisional true-up for FY 2011-12 based on the provisional accounts and the ARR and revenue recovered for the year have been arrived at. For the FY 2012-13, Commission sought actual figures for the year from TANGEDCO. Based on the information so obtained and based on provisions of the Tariff regulation as well as trend in the approved costs in the previous two years, the ARR and revenue recovered have been arrived at. For the Second control period between FY 2013-14 to FY 2015-16 the Commission has extended the rationale adopted for allowing/ disallowing various controllable components of the ARR for the first control period, to project the ARR for the second control period and determine tariff for FY 2013-14.
Page 17 June 2013
A2:
2.1
STAKEHOLDERS COMMENTS, TANGEDCOS REPLY AND COMMISSIONS VIEW

The following section summarizes the views/ objections/ suggestions given by stakeholders in writing as well as at the public hearings. TANGEDCOs reply to these views/ objections/ suggestions and the Commissions view on the same.
1. General Issues
Stakeholder Comments 2.2 Commission is requested to appoint a consultant to study the entire operations and finances of TANGEDCO to identify improvements that are needed to comply with the Act & various policies and rules made there under. Commission must direct Transfer of Assets & Liabilities to be completed by end of June 2013 and Audited Accounts as on 31.3.2013 prepared and published by 31.08.2013 The impact of FRP on the tariff is to be spelt out and the said agreement must be publicised. Commission to engage a Cost Accountant to make inter firm comparisons. Request to consider Pan India and Abroad firms for costs of TANGEDCO, fix benchmark cost and performance standards. Financial Accounting, Cost Accounting Code & systems of TANGEDCO should be published so that it helps make meaningful comments on the petition. Commission must reiterate that Generation and Distribution functions of TANGEDCO should be separate. Unless this is done the costs of generation and distribution cannot be accurately ascertained. Commission to write to GoTN to drop Electricity tax as it distorts the tariff system. Directives of Commission are not being adhered by TANGEDCO. TNERC is requested to monitor the directives individually and intensively and make TANGEDCO fall under the groove measure, monitor and manage and understand that such directives are only for the performance improvements. Commission to direct TANGEDCO to give a time bound plan to implement directives of the Commission over the years. The progress report should be publicized at the end of each calendar quarter. Power injected by OA consumers into the Grid to be deducted from their recorded consumption when there is load shedding at the consumer end
2.3
2.4
2.5
2.6
2.7
2.8 2.9
2.10
Page 18 June 2013
2.11
From the balance sheet of TANGEDCO it is noted that the current liabilities are more than the current assets resulting in management of working capital requirement with the current liabilities in which case inclusion of interest on working capital for the total current assets is not correct and fair as no funds was actually deployed. TNERC must also take strong action to curb tendency of non-performance both in the technical and financial fronts, if necessary by levying a fine say Rs.500.00 millions from TANGEDCO. There is precedence with MERC on this score, to bring about a disciplined approach. TANGEDCO is trying to play the same game as it has done a couple of years back not asking for a tariff revision and requesting creation of Regulatory Assets. TNERC may well earmark this fine from the revenues of 201314 for certain specific purpose of improving normative parameters, which have exceeded beyond limits. TANGEDCO should have consumer representation within its organisation. Commission to make a provision for instituting comprehensive and integrated Information Management system within TANGEDCO Commission to have a consumer advocacy cell based on KERC model. Benefits of financial restructuring plan have not been furnished in the petition. Tamil version of the Tariff Petition shall be made available. Uninterrupted power supply shall be given in the night period. TANGEDCO shall aggressively implement the demand side management. Energy conservation shall be encouraged by using modern equipments. Renovation and modernization shall be undertaken in distribution lines. Uninterrupted power supply shall be given to the farmers. This public hearing should be conducted in two ways by the Commission. To assess the performance and the ways to identify how to provide quality service by the TANGEDCO to public. To increase the tariff.
2.12
2.13 2.14
2.15 2.16 2.17 2.18 2.19 2.20
2.21 2.22
2.23 2.24
White paper statement should be released about the TANGEDCOs accumulated loss. White paper statement should be released about the future generation plan and how to mitigate this loss in future.
Page 19 June 2013
2.25
Privatization of distribution particularly distribution in the city is mandatory as per the direction dated 05-10-2012 issued by the Ministry of Power. It seems that restructuring plan for TANGEDCOs accumulated loss has been announced and the Government of Tamil Nadu has accepted the plan. This plan should be under consideration. Commission to pass an order to keep Deemed Demand concept in respect of third party power. Commission to insist on TANGEDCO to publicize the facts of agreement between Government and TANGEDCO as far as restructuring the losses are concerned Identify ways to compensate the loss of TANGEDCO, rather than transferring the same to Government. Vacancies of Wiremen and other subordinate employees of TANGEDCO should be filled in all the TANGEDCO offices to provide good service to the public. Smart meter system which is now used in foreign countries should be now implemented in Tamil Nadu. The consumers who consume power during peak hour should be charged more. It is stated that power can be produced at a cost of Rs.2.14. However, high cost power at the rate of Rs.17 to 18 is purchased from the private parties even after restrictions by the Commission. The power purchase from high cost power stations has been supplied to the MNCs at a lower cost. Uninterrupted power supply should be given to the agricultural services as given in SEZ and in Chennai. All power generated at Neyveli, Kudankulam etc. to be given to Agriculture in Tamil Nadu. Uninterrupted power supply given to the MNCs shall be stopped. Freebies were announced by the Government without considering the power shortage and without proper planning. The Commission should have pointed out the issue. LED Street lighting is important in system T & D loss reduction. Recognize clean technologies like LED lighting and consider a preferential tariff For energy conservation purpose LED lights may be fixed in all the streets of the Villages, Towns, and cities instead of using tube lights.
2.26
2.27
2.28
2.29
2.30
2.31
2.32
2.33 2.34
2.35
2.36
Page 20 June 2013
TANGEDCOs Reply Appointment of consultant 2.37 The accounts of TANGEDCO are being audited by a firm of qualified chartered accountants as per the requirements of the companies Act 1956.In addition to the above, being a government company the functioning of TANGEDCO is also subject to commercial and expenditure audit by the Accountant General. Moreover, the Honble TNERC is vetting the tariff petition filed by TANGEDCO by appointing a reputed consultancy firm. Hence, the necessity to appoint a consultant to go into the entire operations and finances of TANGEDCO does not arise.
Final Transfer Scheme 2.38 The Board has approved the proposal to seek extension of time by another six month upto 30th October 2013 for final transfer of assets and liabilities to the successor entities of erstwhile TNEB and the proposal is under the consideration of Government of Tamil Nadu. Steps are being taken to complete the audit of annual accounts for the FY 2012-13 and to place the same before the AGM of TANGEDCO on or before 30.09.2013 which is the time limit prescribed under the provisions of the companies Act 1956.
Compliance of Directives 2.39 The status of progress on directives issued by Honble TNERC in tariff order dated 30th March 2012 has been furnished in the tariff petition filed before the Honble TNERC on 19th February 2013. The details of these directives are available on the TNERC website.
Financial Restructuring Plan 2.40 At the time of submission of tariff petition to the Honble TNERC, the FRP process was in its initial stage and hence the impact of the same could not be taken into consideration in the tariff petition. The given details of the FRP are still being worked out and if the same is finalised before the issuance of Tariff Order it will be submitted to the Honble TNERC for its consideration.
Cost Accounting system of TANGEDCO 2.41 Each generation and distribution utilities in India have their own power source owing to their geographical location. Hence, comparing the cost of TANGEDCO with other utilities may not by itself give the desired results. However, steps are being taken to conduct the cost audit by a qualified cost Accountant as per the requirements of the Companies Act,1956.
Comparison with Other Utilities 2.42 The contention of the stake holder that the cost needs to be compared with other state requires consideration of the following issues:
Page 21 June 2013
(a) The difference in power generation mix and consumer mix (b) Power purchase expenses considering the diversity in the sources. (c) Geographical diversity in the state considering the key point that TANGEDCO is supplying electricity to wide spread area of Tamil Nadu as compared to other states of India. (d) Differential policies adopted by the State Government in relation to industrial, economic and agricultural sector. (e) Considering the above parameters the comparison should be made on common parameters. Bifurcation of Generation and Distribution Function 2.43 These are the suggestion from the stake holders to the Honble Commission.
Electricity Tax 2.44 TANGEDCO submits that the issue relating to dropping of electricity tax does not come within the purview of tariff revision exercise. It is a policy decision to be taken by the Government of Tamil Nadu.
OA consumption to be deducted from recorded consumption 2.45 TANGEDCO submits that there is no such provision under the Act as well as in the Regulations notified by the Commission.
Levy of Demand Charges 2.46 The demand charges are intended to cover the fixed cost of TANGEDCO including interest, depreciation employee cost, repair and maintenance cost etc., and hence even if there is no power supply the demand charges would be levied. The recovery of fixed charges does not have any relevance to the hours of supply or the quantum of energy supplied. The Honble APTEL in appeal No:257 of 2012 preferred by The Southern India Mills Association (SIMA), Coimbatore against the Tariff Order No:1 of 2012 dated:30.03.2012 issued by the Honble TNERC has upheld the order of TNERC with regard to levy of demand charges.
2.47
Page 22 June 2013
Negative balance in Shareholders funds 2.48 As per the Tariff Order, the Honble Commission had expressed a view that the accumulated losses up to the date of unbundling will have to be dealt with in accordance with Para 5.4.3 of the National Electricity Policy and Tariff Policy. The provisions of the National Electricity Policy and Tariff Policy envisages that the gap at the time of unbundling will have to be sorted out by financial restructuring and support from the Government rather than passing on the accumulated losses to the successor entities. In line with the Tariff Policy, National Electricity policy and as per the Tariff Order dated 30th March 2012, TANGEDCO have not claimed any relief on account of accumulated losses prior to unbundling on 1-11-2010 in the given petition.
2.49
Supply of power to MNCs 2.50 There is no concession in tariff for the MNCs. Only uninterrupted power supply with the tariff on par with other consumers is given.
Energy Efficiency Measures 2.51 TANGEDCO is taking steps to replace incandescent bulbs with CFLs in Villupuram and Kanyakumari districts. The same will be duplicated in other districts. Out of the cost of Rs 60/- per CFL, TANGEDCO will pay Rs 45/- and consumer will pay Rs 15/-.
Commissions View 2.52 The Commission appreciates the concerns expressed by various stake holders both in the written comments submitted by them to the Commission as well as the concerns expressed during the Public Hearings held at Chennai on 3rd May 2013, Tiruchirapalli on 8th May 2013, Madurai on 10th May 2013 and Coimbatore on 17th May 2013.
Transfer of Assets & Liabilities 2.53 The Transfer of Assets & Liabilities was to be completed by 30th April 2013. But TNEB has sought for another 6 months extension from the Govt. The Commission is of the opinion that this has to be completed at the earliest. The Commission directed the utility to complete it as soon as possible through GoTN.
Financial Restructuring Plan 2.54 Commission would like to clarify that this issue can be examined only when the final FRP scheme is submitted to the Commission.
Page 23 June 2013
Segregation of Generation and Distribution business 2.55 Opinion of Commission on segregation of generation and distribution function was conveyed as statutory advice on 27th October 2010 which is annexed in this tariff order.
Tamil Version of Petition must also be available 2.56 Commission has already given a direction on this matter to TANGEDCO for making the Tamil version of the Petition available.
Impact of freebies doled out by Government 2.57 Commission would like to reiterate that it functions within the powers derived from the Electricity-Act 2003 and cannot interfere in the policies of GoTN
Energy Efficiency and Demand Side Management 2.58 Demand Side Management is an effective tool to meet the demand supply position in the short term. Being a cheaper option, it helps in meeting the demand as compared to capacity addition. Also, it enables to reduce the carbon emission and defers the investment to subsequent years. It is necessary to create awareness among users for promoting Energy Conservation and Demand Side Management. TANGEDCO should motivate the domestic and agriculture sector to adopt DSM measures. Awareness has to be created for using Star Labelled Appliances which may cost more but would pay back by way of energy saving. To facilitate DSM measures in the state, the Commission has notified the DSM regulation on 26th February 2013. TANGEDCO is to submit relevant schemes for implementing DSM and Energy Efficiency schemes to the Commission as specified in the Regulation. Use of CFLs should be encouraged with adequate arrangement for disposal of unserviceable CFLs.
2.59
2.60
2.61
2.62
Restriction & Control 2.63 Various issues raised by stakeholders relating to Supply Code Regulations and R&C Orders do not fall under the purview of present exercise of Tariff determination.
Page 24 June 2013
Working Capital 2.64 Current liabilities are due to non payment of dues by TANGEDCO. However Commission cannot assume that TANGEDCO will default and accordingly not allow for any working capital. For the purpose of this order Commission is allowing working capital based on norms laid out after considering available consumer security deposits.
Tax Exemption 2.65 On suggestions regarding waiving off electricity tax during the period of R&C measures, the Commission would like to specify that Electricity Generation Tax or Electricity Consumption Tax is in the domain of Government of Tamil Nadu.
Quality of Supply 2.66 As regards uninterrupted power supply, the Commission directs TANGEDCO to maintain quality of supply as specified in Tamil Nadu Electricity Distribution Standards of Performance Regulations, 2004 as amended in which it specifies that 3. Quality of Service Quality of service means providing uninterrupted, reliable electric supply at stipulated voltage and frequency, which will be the end result of its planning, designing of network, operation and service management to ensure stability in supply and prompt compliance of consumers complaints on metering and billing. The supply with frequent power failure, fuse of calls, voltage fluctuations will not ensure continuity in supply. These factors determine the degree of satisfaction of the consumers. 2.67 Also, the Commission feels that if the capacity addition would be on time, as discussed in later chapters, the power supply situation should improve in the second control period leading to improved supply hours. TANGEDCO is also required to take all necessary steps to ensure quality of service as per regulations.
2.68
2. Delay in filing
Stakeholder Comments 2.69 The inordinate delay on the part of TANGEDCO had been condoned by the Commission. We regret that this should not have been done and instead the Commission could have suo motu revised the tariff. There is precedence of this type in one of the orders of West Bengal Electricity Regulatory Commission. The tariff petition which had to be filed in November 2012, has been filed only in February 2013. The reason for the delay shall be informed to the public.
Page 25 June 2013
2.70
TANGEDCOs Reply 2.71 The delay in filing of the tariff petition has been caused mainly because of the following reasons. The Financial Restructuring Plan (FRP) which was notified by the Government of India on 5th October, 2012 was in the process of being finalized with multitude of meetings with various bankers during the months of October, November and December of 2012. Thereafter the audit of accounts for the year FY 2011-12 was under process and was completed by 31st January 2013.
Commissions View 2.72 Commission had been monitoring the filing of the petition vis--vis the due date of filing it i.e. 30th November 2012. The commission had through two letters to TANGEDCO, called for immediate filing of the ARR and tariff petition. The petition was eventually filed on 19th February 2013. After hearing the submissions made by TANGEDCO, the Commission condoned the delay in filing this petition. The Commission has directed TANGEDCO to file its petition for ARR and tariff for the next year by the appointed date.
3. O&M Expenses
Stakeholder Comments 2.73 Inter-firm comparison of costs especially O & M costs for TANGEDCO should be done. In the O & M expenses, the employee cost is projected to increase by 50% (Table 83). The norm for the industry needs to be checked. The Government of Tamil Nadu has accepted the loss of TANGEDCO of about Rs.25,512 Crores as on 31.11.2010. But the Government has not agreed to take the pension liability of the employees and termed it as employee expenses. If it is considered as employee expenses the same can be passed on to the tariff which may affect the public. Therefore, the Government shall take the pension contribution as a liability. The Commission shall direct the TANGEDCO to implement the directions given in 2010.
2.74
2.75
TANGEDCOs Reply 2.76 The employee expenses submitted in the tariff petition for FY 2012-13 is based on the actual expenses incurred. The Honble Commission in its last tariff order had approved the employee cost for TANGEDCO based on the apportioning of expenses between TANGEDCO and TANTRANSCO. The industry norms cannot be compared due to the geographical diversity in the state and for the reasons that electricity is being supplied to widespread areas within the state of Tamil Nadu.
Page 26 June 2013
Commissions View 2.77 2.78 Commission is guided by following regulations Regulation-25 of TNERC Tariff Regulations: 25. Operation and Maintenance Expenses The operation and maintenance expenses shall be derived on the basis of actual operation and maintenance expenses for the past five years previous to current year based on the audited Annual Accounts excluding abnormal operation and maintenance expenses, if any, after prudence check by the Commission. The Commission may, if considered necessary engage Consultant / Auditors in the process of prudence check for correctness. The average of such normative operation and maintenance expenses after prudence check shall be escalated at the rate of 4% per annum to arrive at operation and maintenance expenses for current year i.e. base year and ensuing year. The base operation and maintenance expenses so determined shall be escalated further at the rate of 4% per annum to arrive at permissible operation and maintenance expenses for the relevant years of tariff period. 2.79 However as submitted by TANGEDCO, Commission is of the view that it is not appropriate to project the expenses for the next control period based on the actual expenses incurred prior to unbundling of power utilities. Hence in this order Commission projects the O&M expenses for next control period based on the audited accounts for FY 2010-11 and provisional accounts for FY 2011-12. Commission acknowledges the usefulness of benchmarking of O&M expenses and comparison with other utilities, however considering the fact that the utilities in the state are still in transition such comparison will not be of much help in the early stages of restructuring.
2.80
4. Fuel Cost and FPAC

Stakeholder Comments 2.81 Increased use of oil by TANGEDCO is increasing the fuel cost and TNERC needs to specifically pay attention. TANGEDCO should be asked to justify the fuel consumption rates and costs by comparing with those of other similarly placed utilities in India. TANGEDCO should have submitted the Petition for Fuel Price Adjustment Charges (FPCA). It is said that it has been granted an extension of time of four months. It has not been complied with. The Commission has asked for its readiness to submit the same.
Page 27 June 2013
2.82
2.83
TANGEDCO to justify the fuel consumption rates vis-a-vis other utilities in India and compare costs of its coal thermal plants vis-a-vis Central Generating stations.
TANGEDCOs Reply 2.84 The claim for FPCA will be filed once the power situation in the state improves and R&C measures are lifted.
Commissions View 2.85 Adjusting FPAC charges in the middle of the year has been allowed by the Electricity Act 2003 under section 62 sub section 4, which states: No tariff or part of any tariff may ordinarily be amended, more frequently than once in any financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge formula as may be specified. 2.86 Also, the APTEL in its Order O.P. 1 of 2011 dated 11-11-2011 under para 65 (vi) has stated that (vi) Fuel and Power Purchase cost is a major expense of the distribution Company which is uncontrollable. Every State Commission must have in place a mechanism for Fuel and Power Purchase cost in terms of Section 62 (4) of the Act. The Fuel and Power Purchase cost adjustment should preferably be on monthly basis on the lines of the Central Commissions Regulations for the generating companies but in no case exceeding a quarter. Any State Commission which does not already have such formula/mechanism in place must within 6 months of the date of this order must put in place such formula/ mechanism. 2.87 Hence in line with the in principle approval of the implementation of the FPCA mechanism in the State, the Commission has decided not to allow the 4% escalation in fuel price as sought for by TANGEDCO in its petition for the current MYT period. TANGEDCO shall file quarterly FPCA petitions to the Commission to recover the actual cost of fuel incurred and the actual cost of power purchase, if the same are in variance from the figures approved in this Tariff Order. Therefore, the Commission clarifies that FPAC exercise is important and should be implemented and it is irrespective of annual tariff increase. TANGEDCO was allowed to withdraw FPCA Petition for filing a corrected Petition. However, they did not do it and filed the Tariff Petition beyond the due-date. After the issue of this order, TANGEDCO shall file FPCA Petition every quarter as no escalation has been considered for future power purchase and fuel price adjustment.
2.88
2.89
Page 28 June 2013
5. Generation and Power Purchase

Stakeholder Comments 2.90 TANGEDCO should explain how NLCs 600 MW station of the same vintage as Ennore is functioning well. In the context TANGEDCO should refer the coal handling issues to NTPC. Cost from TANGEDCO plants is higher when compared to CGS i.e. the cost of power purchase from TANGEDCOs own power is Rs. 4.36 p.u where as cost of power purchase from Central Generating stations is only Rs. 3.01 p.u. This shows that TANGEDCOs fuel management is inefficient. TANGEDCO should be asked to give cost comparison of its coal based generating stations with those of CGS to justify higher prices. In estimating the Capital Costs, capitalization of the new plants shows great divergence (Table 63). MTPS III has a cost of about Rs 6 Crores per MW while NCTPS Stage II has a cost of Rs 4.85 Crores. The difference needs to be explained. Power Generation in TANGEDCOs own plants like Valathur and Mettur is getting delayed. Action shall be taken to speed up the works. Delay in starting generation in existing power generation stations like Mettur, Valuthur, Kuthalam etc. should be explained. TANGEDCO to present the actual conditions of Mettur 600 MW plant before the public so as to know the status of money spent There is no need for private power generation. arrangements for own generation. Government should make
2.91
2.92
2.93
2.94
2.95
2.96
2.97
Power cut has been reduced due to 3000 MW generated by the Wind Mills. But wind mills are not permitted to generate and due to that about 1000 MW is wasted. On the other hand 40% power cut still exists. High frequency is stated to be the reason for not permitting the wind mills to generate. Action should be taken to utilize the entire power generated by the wind mills during May to September. It has been announced that Sandynallah Hydro Electric Project will be completed in 10 years to meet the variations in the wind generation. The project shall be completed within a short span of time. The power generated by the wind mills is consumed by various consumers in different districts. The wind energy has to be adjusted for peak hour, non peak hour and normal hours. It is doubtful whether the accounting of wind energy is done properly by the TANGEDCO. Since it is not possible to take readings in the large number of wind mills, readings furnished by the consumers may be used for billing resulting in huge loss to the TANGEDCO. The Commission shall form rules and regulations for adjustment of generation from wind mills.
2.98
2.99
Page 29 June 2013
2.100 Commission in the last tariff order directed TANGEDCO not to purchase power from the four private parties GMR, PPN, Samalpatti and Madurai power corporation. But TANGEDCO has purchased power from the four private parties. It may be clarified whether the Commission is functioning as a spectator or regulator. Power was purchased at a higher cost. 2.101 Automatic meter reading facility shall be provided in the wind mills to properly account the wind generation. 2.102 The entire power i.e. 100% share from the Kudankulam, Kalpakkam and Neyveli has to be allotted to Tamil Nadu. 2 Reactors are ready in Kudankulam and the total capacity of 2000 MW of power can be generated. But only 950 MW was allotted for Tamil Nadu. 2.103 New projects should be taken up to increase own generation and provide uninterrupted power supply instead of purchasing costly power from private players. 2.104 In Tamil Nadu quality of coal is very bad. Purchasing this kind of bad quality coal is the only the reason for less generation. This should be avoided. TANGEDCOs Reply 2.105 Till 2006, 2007 there was no shortage of power as there was no gap between the demand and supply. After 2006, 2007 the demand increased due to economic development and boom in the IT sector. Power plants cannot be installed within a few months. For installing a 1 MW plant, it costs Rs 5 to 5.5 Crores/MW and takes minimum of 4 years after work is started. Therefore, plans were drawn to install power plants. The NTPC Vallur plant and North Chennai plant will come up by next month. The NLC JV plant of 1000 MW is underway and will come in by end of the year. By then, the demand will be equal to supply. 2.106 In the year 2012-2013, own thermal power stations performed well. Due to failure of monsoon, performance of hydro power stations were affected badly. Kuttalam gas station has been put into service after attending the major repair work. 2.107 The coal prices in domestic and international market have witnessed hike during the past and accordingly projection have been made in the tariff petition. The details of fuel prices and cost have been submitted in the tariff petition. 2.108 About 4000 MW will be available as additional generation, power cut problem may be resolved gradually and will be lifted by December 2013. 2.109 MTPS and NCTPS are allotted on the basis of EPC contract. The tenders were selected on the basis of international competitive bidding. The foreign components involved in MTPS (Rs.1914 Crores) is much more than the foreign component in NCTPS projects (370.95 Crores) and hence, the cost per MW is higher.
Page 30 June 2013
2.110 Power purchase from the IPPs is resorted to only to meet the demand especially during summer and examination time. Even this got approved from TNERC subsequently. Commissions View 2.111 The Central Generating Stations viz. Kudankulam, Kalpakkam and NLC will not come under the jurisdiction of the Tamil Nadu Regulatory Commission or under the State Government. Hence, the views submitted in relation to these stations are not within the purview of this State Commission. 2.112 The Commission directs the TANGEDCO to properly monitor the on- going projects so that they are commissioned without further delay. 2.113 The TANGEDCO should also ensure that the TANTRANSCO completes all the associated transmission system for evacuation of power from the generating stations which are getting commissioned during the second control period, so that power generated from the generating stations are transmitted up to the Load Centers without any bottle necks. Necessary upgradation of the distribution system shall also be done by TANGEDCO for effectively carrying power to the consumers 2.114 TANGEDCO has not provided necessary information for approving capital cost. Commission is provisionally accepting the TANGEDCO submission. 2.115 As regards the generation cost of new capacity addition, the Commission directed TANGEDCO to file separate petition for the approval of capital cost and tariff determination of new power plants. However, the Commission in this Tariff Order for the purpose of power purchase has provisionally considered the fixed and variable charges for new power plants. 2.116 Commissions Open Access Regulation 2005 specifies that open access customer shall provide metering arrangement as per the applicable CEA regulation and meters should have facility to communicate the readings to SLDC or as may be specified by the Commission. 2.117 Cost comparison between ISGS and TANGEDCO generating stations has to be on like to like basis. While most of the CGS are pit ahead stations, the generating stations of TANGEDCO are load centre stations.
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6. AT&C Losses
Stakeholder Comments 2.118 TANGEDCOs argument in 3.29.8 in petition related to lesser computed Agricultural consumption and revision of T&D loss trajectory is flawed. Neither a representative study was done for establishing norms for agricultural consumption per HP of connected load, nor any metering has been done to assess and a thumb rule was adopted so far for this purpose. No serious study has been done by TANGEDCO to identify the 11 KV/22 KV feeders and take corrective action. In this context Commission should allow T & D loss at 18% as claimed by TANGEDCO in the past. 2.119 The average purchase cost of power for TANGEDCO is Rs.3.77 per unit inclusive of wheeling cost of 21.98 paisa per unit. The average tariff realized per unit from HT I A Category consumers (Industries) is Rs 6.95 and that of HT III Category of consumers (Commercial) is Rs 7.98. A huge burden is put on them destroying their competitiveness and economic efficiency. 2.120 Committee should be formed to reduce the loss of TANGEDCO and limit should be fixed in respect to the loss. 2.121 Efforts should be taken to reduce the T&D loss every year. 2.122 Misuse of tariff with dishonest intention is booked under theft of energy. Misuse of energy shall be booked under section 126 and bypassing the meters shall be booked under theft of energy. 2.123 Electricity theft should be curtailed. 2.124 Agricultural related activities like nursery is booked under theft. The Electricity Board is booking the farmers under theft and even when represented to the District Collector, the District Collector was also not in a position to help. 2.125 Loss incurred by TANGEDCO is due to theft of electricity and not due to free electricity provided to the farmers. TANGEDCOs Reply 2.126 The agricultural consumption submitted in the tariff petition is based on 5% sample meter reading as per the methodology adopted by the Honble TNERC in its last tariff order dated 30th March 2012. 2.127 Theft of power is least in Tamil Nadu. To reduce the theft of energy, at Regional level 17 enforcement squads under the control of the Inspector General of Police (IGP) is operating and a Flying squad under the control of Chairman, TANGEDCO is functioning. Squad comprising of Ex-servicemen are being utilized to detect the power theft in the state.
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2.128 Distribution loss cannot be avoided which is around 20% now. To reduce the distribution loss improvement work such as establishment of substation and strengthening of lines are being taken. Commissions View 2.129 The Commission initiated suo-motu proceedings against TANGEDCO for non compliance in the matter of T&D loss determination as directed by it and the Honble APTEL. The Commission in the absence of scientific study for loss determination, has fixed the T&D loss level at 16.4% for FY 2013-14 and has clarified that it shall assume loss percentage at 16% and 15.6% for FY 2014-15 and FY 2015-16 respectively, if necessary scientific study is not done by TANGEDCO. 2.130 The Commission would also like to clarify that agriculture related and allied activities viz. growing vegetables, fish culture, and poultry farming are recognized under agriculture and they are permitted to use water pumped from wells located close to the farmhouse as per the last tariff order and it will not amount to theft. 2.131 Licensee should note that wrong theft booking should be avoided.
7. Interest Expenses
Stakeholder Comments 2.132 Interest on borrowing from various financial institutions is on higher rate. The payment of interest should be at nominal rate. No interest shall be allowed on borrowings made to make up for losses. No return on shareholders funds should be provided. 2.133 In providing interest on current assets, receivables at 2 months sale value is assumed. This is over stated. From the Balance Sheet of TANGEDCO it can be ascertained that the consumers deposits are more than cover the accounts receivables. 2.134 The High Tension consumers are provided only 7 days from the date of the bill for payment of the consumption charges for the previous month. Further they are required to keep a deposit equivalent to two months consumption charges. Therefore the interest on the HT receivables should be totally disallowed. 2.135 In case of LT, domestic consumers the bill is made for once in two months. Which means on the average there is an outstanding of one month. Hence for LT Receivables, should be estimated on one month and interest should be allowed on that quantum alone. 2.136 For inventory, stock of coal is assumed at 2 months value of consumption, but actually the generating stations are maintaining fuel stock for not more than 10 days consumption. Hence no interest need to be allowed.
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TANGEDCOs Reply 2.137 The interest on the loan has been calculated considering the loans allocated to TANGEDCO at the time of segregation of erstwhile TNEB and based on such notified transfer scheme, it is the obligation of TANGEDCO to service such debts and repay them along with the interest. Hence, TANGEDCO has claimed the interest amount on actual basis. 2.138 Return on Equity for TANGEDCO for the control period has been calculated based on the average equity for the corresponding year. This has been done in line with the TNERC Regulations. The normative rate of return on equity has been taken at 14%. Commissions View 2.139 In the last tariff order Commission has approved the total interest expenses corresponding to actual long term and short term loans borrowed by TANGEDCO. In the current Petition TANGEDCO has claimed the interest expenses corresponding to only long term loans and separately claimed the interest on working capital as per norms specified by TNERC in its tariff regulations 2005. 2.140 TANGEDCO has adopted the following approach for segregation of interest to the generating plant / station and distribution function: a. Project specific loans for generation and distribution is initially allotted to each of the respective project and considered as opening loan balance for that particular project. b. Large quantum of generic loans which cannot be differentiated into project specific loans and interest paid on these loans is bifurcated as per opening gross block of generation and distribution notified as per transfer scheme. 2.141 In response to Commissions query, TANGEDCO has revised the long term loans and segregated these loans among those borrowed for capital projects, repayment of existing loans and funding the revenue expenditure. 2.142 In its last order Commission has stated that there is a lack of differentiation between the capital account and the revenue account. In the revised submission TANGEDCO has again included the borrowings corresponding to revenue account in capital account. However, Commission is treating the revenue and capital account separately.
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8. Regulatory Asset
Stakeholder Comments 2.143 TANGEDCO has prayed for approving Regulatory asset. TANGEDCOs proposal is also not in consonance with Regulation 13 of the Tariff Regulations. The circumstances for treatment of regulatory asset would arise mostly during natural causes or force majeure conditions and that it can be only for a limited period not exceeding 3 years preferably within the control period. The reason given by TANGEDCO is Para 6.3.3 that is present critical power position is not a force majeure position. 2.144 The Regulatory Assets already created had been done for the same invalid reason. Therefore, the Regulatory Asset already created should also be withdrawn. TANGEDCO should be directed to take up the matter with Govt of Tamil Nadu as part of the Financial Restructuring Plan it is implementing. 2.145 Creation of Regulatory Assets as per request of TANGEDCO is against the ATE Order of 28.7.2011 and also against the Tariff Policy. Therefore the Commission should reject the plea. 2.146 Recovery of Regulatory Asset in future tariff petitions is not just as TANGEDCO is not supplying power equitably to all consumers. Selected consumers and Chennai region have been exempted from Load shedding. The higher cost incurred for purchase of power by TANGEDCO is for only these preferred consumers. The other consumers who managed with costly Diesel Generators should not be burdened with additional tariff. 2.147 No justifiable reasons have been attributed by TANGEDCO as to why it has not come forward with a sizeable retail tariff revision in the petition. TANGEDCOs reasoning that the deficit can be treated as Regulatory Assets deferred expenditure to be made good in future from consumers should not be accepted by the Commission. 2.148 TANGEDCO has not made any road map for recovery of Regulatory Assets despite approval from GoTN for amortization. 2.149 Regulatory Assets should be recouped slowly and incrementally. Clear road map to be presented by the Commission to recoup the Regulatory Assets and introduce the concept of Regulatory liabilities. 2.150 TANGEDCO should be directed to create special Regulatory Liability for which they should submit a strategic plan. Increase HT & LT tariff in all categories for assessing the Regulated Liability for which no adjustment must be allowed 2.151 Commission not to accept treating the deficit of TANGEDCO as Regulatory Asset 2.152 TANGEDCO has not met the Performance Standards laid in TO 1 of 2013. Hence, claim for Regulatory Assets should not be accepted.
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2.153 Subsidy of 30% for Regulatory Assets accepted by GoTN for 2012-13 not shown in Table 109. No justification given by TANGEDCO for converting losses into RA and TANGEDCO request should be rejected. 2.154 Tariff Policy 5.3(h)(4) is against the proposal of TANGEDCO to burden future consumers with past losses with not seeking tariff increase for other categories for the reasons in 6.3.2 of their petition. 2.155 Regulatory assets should not exceed than what is approved in the true up. Interest on this should also be waived 2.156 As per ATE Order, financial gap for any year should be considered for tariff revision and not passed on as Regulatory Asset 2.157 Requested not to permit the TANGEDCO to create Regulatory Asset as per (OP1/2011, dt.11.11.11) of APTEL order and to pass on burden to consumer for the ensuing year. 2.158 TNERC must determine the tariff for other categories, other than the one requested by TANGEDCO, to the extent it can do reasonably on suo motu basis and create a special Regulatory Liability of the likely revenue arising on such determination; the extent of the regulatory assets requested in this petition by TANGEDCO can be reduced by this amount; 2.159 It is the responsibility of TANGEDCO to wipeout this liability first, before it can commence the recovery process on regulatory assets; TNERC must direct the TANGEDCO to submit a strategic plan for wiping out the Regulatory Liability created for its approval, measuring and monitoring. 2.160 Find out ways and means to recover the past losses from FY 2013-14 onwards instead of postponing the recovery to ensuing years. TANGEDCOs Reply 2.161 TANGEDCO has proposed for the approval of Regulatory Asset based on the methodology adopted by the Honble TNERC in tariff order dated 30th March 2012. 2.162 The Honble Appellate Tribunal for Electricity in its order dated 09.04.2013 has upheld the creation of regulatory asset in Tariff Order No 1 of 2012 dated 30.03.2012, in appeal No:257 of 2012 filed by the Southern India Mills Association, Coimbatore. 2.163 The creation of regulatory asset has been requested so as to recover the expenditure already incurred in a deferred manner in order to avoid tariff shock to consumers. If the same is rejected there will be huge financial burden on the TANGEDCO and the services to consumers will also be affected. This will cause irreparable loss to TANGEDCO and consumers.
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Commissions View 2.164 Commission does not agree with the proposition of creating regulatory liability as none of its regulations allows for such creation. 2.165 The issue of Regulatory Asset is dealt with in Regulation of the TNERC (Terms and Conditions of Tariff) Regulations 2005. This issue was also the subject matter of appeal before the Honble Appellate Tribunal for Electricity arising out of the Commissions Order No. 3 of 2010 dated 31-07-2010 and the decision of the Appellate Tribunal for Electricity is extracted below:8.4. Let us first examine the provisions of the Tariff Policy in this regard. The relevant extracts are as under: 8.2.2. The facility of a regulatory asset has been adopted by some Regulatory Commissions in the past to limit tariff impact in a particular year. This should be done only as exception, and subject to the following guidelines: a. The circumstances should be clearly defined through regulations, and should only include natural causes or force majeure conditions. Under business as usual conditions, the opening balances of uncovered gap must be covered through transition financing arrangement or capital restructuring; b. Carrying cost of Regulatory Asset should be allowed to the utilities; c. Recovery of Regulatory Asset should be time-bound and within a period not exceeding three years at the most and preferably within control period; d. The use of the facility of Regulatory Asset should not be repetitive. e. In cases where regulatory asset is proposed to be adopted, it should be ensured that the return on equity should not become unreasonably low in any year so that the capability of the licensee to borrow is not adversely affected. The Tariff Policy stipulates creation of the regulatory asset only as an exception subject to the guidelines specified above. According to the guidelines the circumstances under which the regulatory assets should be created are under natural causes or force majeure conditions. 8.5. Let us now examine Regulation 13 of the 2005 Tariff Regulations of the State Commission: 13. Regulatory Asset:
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(1) Wherever the licensee could not fully recover the reasonably incurred cost at the tariff allowed with his best effort after achieving the benchmark standards for the reasons beyond his control under natural calamities and force majeure conditions and consequently there is a revenue shortfall and if the Commission is satisfied with such conditions, the Commission shall treat such revenue shortfall as Regulatory Asset. (2) The regulatory asset shall first be adjusted against the contingency reserve. The balance regulatory asset, if any, will be allowed to be recovered within a period of three years as decided by the Commission. (3) The licensee shall intimate the Commission then and there when such contingency arises. (4) Any un-recovered gap at the beginning must be covered through transition financing arrangement or capital restructuring. (5) Under the State Commissions Regulations also the regulatory asset is to be created when the licensee is not able to recover the reasonably incurred cost for reasons beyond its control under natural calamities and force majeure conditions. Further, the regulatory asset has to be recovered within a period of three years. Admittedly, in the present case occurrence of natural calamities and force majeure conditions did not arise. 8.6. Now we shall examine the findings of the State Commission in this regard. The relevant extracts from the impugned order under paragraph 9.15.3 (9) are reproduced in paragraph 7.4 above. 8.7. The State Commission has justified creation of the regulatory asset for the anticipated revenue gap during the control period to prevent the tariff shock. The order does not clearly state the total amount of the regulatory asset created but if we add up the projected revenue gap of Rs. 7904.04 Cr., Rs. 6062.24 Cr. and Rs. 3489.18 Cr. for FY 2010-11, 2011-12 and 2012-13 respectively it totals upto Rs. 17445.46 Cr. It is also noticed that the State Commission has also not provided for any carrying cost on the regulatory asset and the programme for recovery of the amount to be taken as expenses in future tariff. 8.8. We are of the opinion that the regulatory asset created by the State Commission is not in consonance with the Tariff Policy and its own Regulations. Moreover, the impugned order does not provide for recovery of the regulatory assets with the carrying cost as envisaged in the Regulations and the Tariff Policy. 8.9. The State Commission has justified creation of regulatory asset for avoiding tariff shock. Now, let us examine the increase in tariff decided in the impugned order. We reproduce below the response of TNEB (Respondent-1) recorded in the impugned order regarding the tariff increase.
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2.27.2 Domestic users consume 15 million units/ day. Individual consumption has already crossed more than 1000 units, whereas the per capita consumption envisaged in the 11th Plan is 1000 units only. Last year, the average cost of supply was Rs.4.70/unit and it is expected to increase to Rs.4.90 / unit. Ason date, the average recovery is Rs.2.60/unit. For every consumer, the average subsidy is Rs.2.30/unit. In Tamil Nadu, except Commercial and Industry, other categories come under subsidized tariff. Out of 2.09 crores consumers, no hike is proposed for 1.65 crores consumers. Out of 1.50 crores domestic consumers, there is no hike for 1.40 crores consumers. Hike is proposed for only 10 to 12 lakh domestic consumers. The average increase is 65 ps. Only. Thus, despite huge gap between average cost of supply and average recovery, TNEB had proposed no hike in tariff for 1.65 crores consumers out of total 2.09 crores consumers i.e. tariff was not to be increased for about 79% of the consumers. Out of 1.5 Crores domestic consumers no hike was proposed for 1.4 Crores (93%) consumers. In fact, the first respondent withdrew its own petition for tariff increase for domestic consumers consuming from 201 units to 600 units biomonthly and the State Commission permitted the same. In its response to the comments of the stakeholder the State Commission has recorded in para 2.29.1(6) of the impugned order that it had proposed to increase tariff only to certain categories of consumers. We do not understand why no tariff was increased for majority of consumers even though the Respondent no. 1 was facing huge revenue gap while it had proposed to carry out a number of system improvement works for which funds were required and considering that the tariff was being increased after a span of seven years. When the tariff has not been increased for most of the consumers, how the creation of the regulatory asset of such high magnitude, that too without any direction for its amortization, can be justified on the pretext of avoiding tariff shock? 8.10. Now, the question arises whether the creation of the regulatory asset is in the interest of the distribution company and the consumers. The respondent no. 1 will have to raise debt to meet its revenue shortfall for meeting its O&M expenses, power purchase costs and system augmentation works. It is not understood how the respondent no. 1 will service its debts when no recovery of the regulatory asset and carrying cost has been allowed in the ARR. Thus, the respondent no. 1 will suffer with cash flow problem affecting its operations and power procurement which will also have an adverse effect on maintaining a reliable power supply to the consumers. Thus, creation of the regulatory asset will neither be in the interest of the respondent no. 1 nor the consumers.
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2.166 The Commission in Order No. 3 dated 31-07-2010 and Order No.1 dated 30-03-2012 had extensively discussed the reasons for the accumulated losses of the utility. The losses of TNEB have accumulated over a period of more than ten years. While the load has been growing continuously, the capacity addition has not kept pace with the increasing demand. Consequently power was purchased from the market. The tariff has not kept pace with the increase in costs with tariff revisions only in 2003 and then in 2010. The gap up to the unbundling of the TNEB on 1-11-2010 is Rs. 17207.30 Crores. The Commission had expressed a view earlier that the accumulated losses up to the date of unbundling will have to be dealt with in accordance with Para 5.4.3 of the National Electricity Policy and Tariff Policy. The provisions of the National Electricity Policy and Tariff Policy envisages that the gap at the time of unbundling will have to be sorted out by financial restructuring and support from the Government rather than passing on the accumulated losses to the successor entities. The intention of the Tariff Policy is to allow the unbundled utilities to start on a clean slate. Accordingly, this Commission leaves the matter of the accumulated losses up to the date of unbundling for resolution by the Government of Tamil Nadu. 2.167 The Commissions suggestion to Government of Tamil Nadu in this regard is that such restructuring of successor entities should not result in increase in tariff to consumers. The TANGEDCO and TANTRANSCO have also not claimed any relief of account of accumulated losses prior to unbundling on 1-11-2010 in this tariff petition. 2.168 In the previous tariff order Commission was concerned with creation of Rs. 24762 Crs Regulatory Asset especially when the same was to be amortized in the next three to five years. The Commission with a view that support of State/Central Government will also be required to be assessed in dealing with such large Regulatory assets, addressed a letter for obtaining the view of Government of Tamil Nadu in this matter. Particularly the Commission requested if the Government could absorb the Regulatory asset in its entirety or in part so as to reduce the burden on the consumers. 2.169 Government has informed that they have in-principle agreed with the request of the Commission for amortization of regulatory asset. Government has also informed that the exact details and mechanism will be worked out in conjunction with tariff revision and TANGEDCOs improvement due to internal savings. 2.170 The issue of Regulatory Asset was again raised in Appeal No. 257 of 2012 by SIMA and Honble APTEL in its order dated 9th April 2013 did not find any infirmity in the Tariff Order No. 1 of 2012 date 30th March 2012 issued by the Commission.
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2.171 However TANGEDCO in its petition has revised the Regulatory Asset from the date of unbundling i.e., with effect from 01-11-2010 and up to the end of this financial year i.e. upto 31-03-2013, the proposed revenue gap is Rs. 40,718 Crores. Of which TANGEDCO proposes to recover Rs. 973 Crore through a nominal tariff hike. TANGEDCO proposes in its petition that the remaining gap of Rs. 39,774 Crores may be allowed to be recovered in the ensuing tariff petition, from the consumer in the deferred years so that there is no tariff shock for the consumers. TANGEDCO requested to approve the revised Regulatory Assets of Rs 39,744 Crores by treating the present critical power position as force majeure position as per tariff regulation and based on the revised gaps and after adjusting the tariff hike as proposed in the given petition. 2.172 The ARR of TANGEDCO for the past years as well as the current years has been reviewed by the Commission and the revenue gap is reworked as detailed in Chapter A3. The amount involved being significant in nature and if the same is amortized by way of tariff hike the impact on the consumer would be huge resulting in a tariff shock to almost all the consumers for the next five years. 2.173 Based on the provisional numbers of FY 12 and FY 13, Commission arrived at an estimate for regulatory asset and the treatment for amortization of the Regulatory Asset has been discussed in Chapter A5. 2.174 Commission has received the letter (Ms) No. 59/C2/2012 dated 7th June 2013 from GoTN on amortization of regulatory asset and after reviewing the letter Commission has worked out the amortization of regulatory asset.
9. Cross Subsidy, Cost to Serve and Average Cost of Supply

Stakeholder Comments 2.175 Tariff payable for BPL category to be atleast 50% of average cost of supply as per NEP 2006. TNERC should ensure that even for subsidised category of consumers atleast 50% of the supply should be recovered. Thus tariff for no category should be less than 3.14Rs/unit. 2.176 Commission to notify road map for reduction of cross subsidy to be within + 20% of average cost of supply 2.177 The guidelines issued by the GoI, Electricity Act 2003, and policy guidelines and directions given by Appellate Tribunal have not been taken into cognizance. While the Average Cost of Supply is Rs 6.27 per kWhr, the average realization is only Rs 4.80 per kWhr. Only for 7 categories of consumers will pay more than the average cost of supply. They would be consuming 19.7% of the energy sold and pay 30.7% of the revenue earned
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2.178 It is obvious that these categories consume 12,601 MUs and pay Rs 9436 Crores, which is an average of Rs 7.48 per kWhr. These are the subsidizing categories. The realization from them is Rs 7.48 per unit while the Average Cost of Supply 6.27 per unit and Average Realisation is only Rs 4.80 per unit. Consumers will be overly burdened in this arrangement 2.179 Commission to reduce the cross subsidy element in existing tariff of all subsidizing consumers 2.180 Cross subsidy treatment should be in consonance to provisions of EA 2003, NEP, NTP and directives of ATE. 2.181 G.O. Ms. No.79 dt 11.7.2012 squashed by Single Judge. Appeal by TANGEDCO before Division Bench. Appropriate forum to determine imposition of cross subsidy surcharge is the Commission. 2.182 Cross Subsidy should be calculated on the marginal cost of power. 2.183 Commission should reduce the cross subsidy element in existing tariff of all subsidizing consumers. 2.184 Cost to serve, cross subsidy surcharges, peak hour and off peak hour charges shall be fixed as per the Order of the APTEL. 2.185 TNERC has stipulated that the cross subsidy has to be computed as difference between Cost to Serve a category of consumers and average tariff realization of that category 2.186 The treatment of cross subsidies and options available to address the cross subsidy reduction issue have to be in consonance with the provisions of the Electricity Act 2003, the National Electricity Policy (NEP), the National Tariff Policy (NTP) and the decisions pronounced by Appellate Tribunal for Electricity (APTEL). 2.187 Based on the legal and policy frame work, applicable cross subsidy can be determined and its reduction over a period should be indicated. TNERC has to notify a road map along with intermediate milestones for reduction of cross subsidy to be within +20% of the average cost of supply. 2.188 As per sec. 61 of the Electricity Act, 2003 and National Tariff Policy the tariff should be fixed at the rate of cost of supply. TANGEDCOs Reply 2.189 The cost to serve model with the detailed report has been submitted along with the tariff petition for calculating voltage wise cost of supply and cross subsidy.
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Commissions View 2.190 The three aspects are inter-related and have been dealt with in detail in tariff order No 1 of 2012. However Commission is reiterating the approach towards the three issues. The provisions regarding these three issues are extensively covered in the Order of Honble Appellate Tribunal of Electricity dated 11th June 2012 in Appeal Nos. 57 of 2008, 155 of of 2007, 125 of 2008, 45 of 2010, 40 of 2010, 196 of 2009, 199 of 2009, 163 of 2010, 6 of 2011 and 144 of 2010. Para 40 of the said order is relevant and is extracted below: 17. Section 61(g) of the 2003 Act stipulates that the tariff should progressively reflect the cost of supply and cross subsidies should be reduced within the time period specified by the State Commission. The Tariff Policy stipulates the target for achieving this objective latest by the end of year 2010-11, such that the tariffs are within 20% of the average cost of supply. In this connection, it would be worthwhile to examine the original provision of the Section 61(g). The original provision of Section 61(g) the tariff progressively reflects the cost of supply of electricity and also, reduces and eliminates cross subsidies within the period to be specified by the Appropriate Commission was replaced by the tariff progressively reflects the cost of supply of electricity and also reduces cross subsidies in the manner specified by the Appropriate Commission by an amendment under Electricity (Amendment) Act, 2007 w.e.f. 15.6.2007. Thus the intention of the Parliament in amending the above provisions of the Act by removing provision for elimination of cross subsidies appears to be that the cross subsidies may be reduced but may not have to be eliminated. The tariff should progressively reflect the cost of supply but at the same time the cross subsidy, though may be reduced, may not be eliminated. If strict commercial principles are followed, then the tariffs have to be based on the cost to supply a consumer category. However, it is not the intent of the Act after the amendment in the year 2007 (Act 26 of 2007) that the tariff should be the mirror image of the cost of supply of electricity to a category of consumer. 18. Section 62(2) provides for the factors on which the tariffs of the various consumers can be differentiated. Some of these factors like load factor, power factor, voltage, total electricity consumption during any specified period or time or geographical position also affects the cost of supply to the consumer. Due weightage can be given in the tariffs to these factor to differentiate the tariffs. 19. The National Electricity Policy provides for reducing the cross subsidies progressively and gradually. The gradual reduction is envisaged to avoid tariff shock to the subsidized categories of consumers. It also provides for subsidized tariff for consumers below poverty line for minimum level of support. Cross subsidy for such categories of consumers has to be necessarily provided by the subsidizing consumers. 20. The Tariff Policy clearly stipulates that for achieving the objective, the State Commission has not been able to establish that the tariff progressively reflects the cost of supply of electricity, latest by the end of the year 2010-11, the tariffs should be within 20% of the average cost of supply, for which the State Commission would notify a road-map. The road map would also have intermediate milestones for reduction of cross subsidy.
21. According to the Tariff Regulation 7 (c) (iii) of the State Commission the cross subsidy has to be computed as difference between cost-to-serve a category of consumer and average tariff realization of that category. 22. After cogent reading of all the above provisions of the Act, the Policy and the Regulations we infer the following: i) The cross subsidy for a consumer category is the difference between cost to serve that category of consumers and average tariff realization of that category of consumers. While the cross-subsidies have to be reduced progressively and gradually to avoid tariff shock to the subsidized categories, the cross-subsidies may not be eliminated. ii) The tariff for different categories of consumer may progressively reflect the cost of electricity to the consumer category but may not be a mirror image of cost to supply to the respective consumer categories. iii) Tariff for consumers below the poverty line will be at least 50% of the average cost of supply. iv) The tariffs should be within 20% of the average cost of supply by the end of 2010-11 to achieve the objective that the tariff progressively reflects the cost of supply of electricity. v) The cross subsidies may gradually be reduced but should not be increased for a category of subsidizing consumer. vi) The tariffs can be differentiated according to the consumers load factor, power factor, voltage, total consumption of electricity during specified period or the time or the geographical location, the nature of supply and the purpose for which electricity is required. Thus, if the cross subsidy calculated on the basis of cost of supply to the consumer category is not increased but reduced gradually, the tariff of consumer categories is within 20% of the average cost of supply except the consumers below the poverty line, tariffs of different categories of consumers are differentiated only according to the factors given in Section 62(3) and there is no tariff shock to any category of consumer, no prejudice would have been caused to any category of consumers with regard to the issues of cross subsidy and cost of supply raised in this appeal. 29. The State Commission has indicated in the impugned order that the voltagewise cost determination is the first step in determining the consumer-wise cost of supply but has expressed difficulties in determination of voltage-wise cost of supply due to non-segregation of costs incurred by the licensee related to different voltage levels and determination of technical and commercial losses at different voltage levels due to non-availability of meters. The State Commission has also noted that the data submitted by the distribution licensee does not have technical or commercial data support.
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30. It is regretted that even after six years of formation of the Regulations data for the distribution losses. The position of metering in the distribution system of respondent no. 2 is pathetic. Only about 1/4th of 11 KV feeders have been metered and very small numbers of transformers have been provided with meters. Only 68% of the consumer meters are functional in the distribution system as indicated in Table-37 of the impugned order. It is also noticed that a large number of meters are old electro mechanical meter which are not functioning. This is in contravention to Section 55 of the Act. Section 55(1) specifies that no licensee shall supply electricity after the expiry of two years from the appointed data, except through installation of a correct meter in accordance with the Regulations of the Central Electricity Authority. According to Section 55(2) meters have to be provided for the purpose of accounting and audit. According to Section 8.2.1 (2) of the Tariff Policy, the State Commission has to undertake independent assessment of baseline data for various parameters for every distribution circle of the licensee and this exercise should be completed by March, 2007. In our opinion the State Commission can not be a silent spectator to the violation of the provisions of the Act. In view of large scale installation of meters, the State Commission should immediately direct the distribution licensee to submit a capital scheme for installation of consumer and energy audit meters including replacement of defective energy meters with the correct meters within a reasonable time schedule to be decided by the State Commission. The State Commission may ensure that the meters are installed by the distribution licensee according to the approved metering scheme and the specified schedule. In the meantime, the State Commission should institute system studies for the distribution system with the available load data to assess the technical distribution losses at different voltage levels. 31. We appreciate that the determination of cost of supply to different categories of consumers is a difficult exercise in view of non-availability of metering data and segregation of the network costs. However, it will not be prudent to wait indefinitely for availability of the entire data and it would be advisable to initiate a simple formulation which could take into account the major cost element to a great extent reflect the cost of supply. There is no need to make distinction between the distribution charges of identical consumers connected at different nodes in the distribution network. It would be adequate to determine the voltagewise cost of supply taking into account the major cost element which would be applicable to all the categories of consumers connected to the same voltage level at different locations in the distribution system. Since the State Commission has expressed difficulties in determining voltage wise cost of supply, we would like to give necessary directions in this regard.
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32. Ideally, the network costs can be split into the partial costs of the different voltage level and the cost of supply at a particular voltage level is the cost at that voltage level and upstream network. However, in the absence of segregated network costs, it would be prudent to work out the voltage-wise cost of supply taking into account the distribution losses at different voltage levels as a first major step in the right direction. As power purchase cost is a major component of the tariff, apportioning the power purchase cost at different voltage levels taking into account the distribution losses at the relevant voltage level and the upstream system will facilitate determination of voltage wise cost of supply, though not very accurate, but a simple and practical method to reflect the actual cost of supply. 33. The technical distribution system losses in the distribution network can be assessed by carrying out system studies based on the available load data. Some difficulty might be faced in reflecting the entire distribution system at 11 KV and 0.4 KV due to vastness of data. This could be simplified by carrying out field studies with representative feeders of the various consumer mix prevailing in the distribution system. However, the actual distribution losses allowed in the ARR which include the commercial losses will be more than the technical losses determined by the system studies. Therefore, the difference between the losses allowed in the ARR and that determined by the system studies may have to be apportioned to different voltage levels in proportion to the annual gross energy consumption at the respective voltage level. The annual gross energy consumption at a voltage level will be the sum of energy consumption of all consumer categories connected at that voltage plus the technical distribution losses corresponding to that voltage level as worked out by system studies. In this manner, the total losses allowed in the ARR can be apportioned to different voltage levels including the EHT consumers directly connected to the transmission system of GRIDCO. The cost of supply of the appellants category who are connected to the 220/132 KV voltage may have zero technical losses but will have a component of apportioned distribution losses due to difference between the loss level allowed in ARR (which includes commercial losses) and the technical losses determined by the system studies, which they have to bear as consumers of the distribution licensee. 34. Thus Power Purchase Cost which is the major component of tariff can be segregated for different voltage levels taking into account the transmission and distribution losses, both commercial and technical, for the relevant voltage level and upstream system. As segregated network costs are not available, all the other costs such as Return on Equity, Interest on Loan, depreciation, interest on working capital and O&M costs can be pooled and apportioned equitably, on pro-rata basis, to all the voltage levels including the appellants category to determine the cost of supply. Segregating Power Purchase cost taking into account voltage-wise transmission and distribution losses will be a major step in the right direction for determining the actual cost of supply to various consumer categories. All consumer categories connected to the same voltage will have the same cost of supply. Further, refinements in formulation for cost of supply can be done gradually when more data is available.
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2.191 Cost to Serve, Average Cost of Supply and Cross Subsidy are also discussed extensively in the above referred Order of the Honble Appellate Tribunal of Electricity in paragraphs, 36, 37, 38 and 39. The Honble Appellate Tribunal of Electricity had expressed the opinion that consequent to the Electricity (Amendment) Act 2003 with effect from 15-6-2007 elimination of cross subsidy has been omitted which implies that the tariff for a particular category of consumers need not be the mirror image of cost to serve. 2.192 Provisions of Tariff policy envisage that the tariff for various categories of consumers shall be within +/- 20% of the average cost of service. A conjoint reading of the Electricity Act 2003 after the amendment in the year 2007 with the other provisions of the Act as well as the Tariff Policy, the intent of the Act seems to be that the tariff need not be the mirror image of the cost of supply of electricity to a category of consumers. From the applicable portion of the Judgment which is contained in para 22 of the decision of the Honble Appellate Tribunal of Electricity in Appeals No. 102, 103 and 112 of 2010 rendered on 30th May 2011, it can be seen that the following are the tests for deciding the tariff in compliance of the Electricity Act, Tariff Policy and Regulations of the Commission. (a) As a first major step in the right direction, the voltage wise cost of supply shall be calculated based on the available data. (b) The Cost of service for each category of consumer will have to be worked out separately. (c) The cross subsidy should be going down from year to year. (d) The tariff fixed for various categories should be within +/- 20% of the average cost of service. (e) Tariff may not be a mirror image of cost to supply to the respective consumer categories. (f) Tariff for different categories of consumers are differentiated only according to the factors given in Section 62(3). (g) There is no tariff shock to any category of consumers. 2.193 If the above are carried out and the tariff decided accordingly, no prejudice would have been caused to any category of consumers with regard to the issues of crosssubsidy and cost of supply. 2.194 Commission in its last tariff order has directed TANGEDCO to undertake data collection for computing accurate cost of supply and submit a study report computing the consumer category wise and voltage wise cost to serve.
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2.195 TANGEDCO in compliance to the above directive has undertaken a technical study and computed the category wise cost of service but has stated its inability to compute voltage wise cost to serve as its accounting system are not robust enough to capture cost details voltage wise. 2.196 The Commission would like to continue the procedure adopted last year recognising the importance of carrying out such an exercise in detail which will enable to test the retail tariff. Commission based on its view in the last tariff order, that it would be advisable to initiate a simple formulation which could take into account the major cost element to reflect the cost of supply, has estimated voltage wise cost to serve based on the Embedded cost method, the details of which are elaborated in Chapter A5. 2.197 Even though TANGEDCO has attempted to calculate cost to serve, it has been unsuccessful in doing so at various voltage classes. For arriving at realistic and accurate costs an extensive data collection exercise has to be carried out by TANGEDCO which will include a 12-month load profile study of each voltage wise consumer category. Therefore the Commission once again directs TANGEDCO to submit a revised and detailed study report on computation of voltage wise cost to serve (CoS) along with the basis of allocation of different costs and losses to various voltage levels. This shall be examined by the Commission and approved with such modifications as it may deem fit or consider a better alternate computation. The Commission also directs TANGEDCO to submit the action taken report within 90 days of the issuance of this order.
10. Merit Order Despatch

Stakeholder Comments 2.198 SPCL and MPCL both have subsisting Power Purchase Agreements with TANGEDCO for supply of power from their power plants which operate on Low Sulphur Heavy Stock/Low Sulphur Furnace Oil. 2.199 SPCL and MPCL in their detailed comments mentioned that TANGEDCO has sought for approval of only fixed costs of the respective plants which is contrary to the provisions of PPAs in existence. They pointed out that TANGEDCO has to operate the power plants in accordance with the Article 6.3 of PPA. 2.200 They have been cooperating with TANGEDCO in operating the plant at technically feasible minimum load of 13MW to keep the fuel warm. 2.201 SPCL is totally dependent on TANGEDCO as TANGEDCO is the sole purchaser of power and has referred to various clauses of PPA. TANGEDCO cannot issue zero power instructions as per PPA provisions 2.202 Both have stated that both they have filed petitions DRP 26 and DRP 27 of 2012 seeking an order restraining TANGEDCO from issuing instructions to SPCL to back down generation of SPCL and MPCL plants. The petition has been heard by the Commission and pending for admission
2.203 TANGEDCO has been dispatching the plant to meet its immediate requirements and has at times issued zero dispatch instructions without regard to the technical requirements of the plants. 2.204 SPCL and MPCL have requested the Commission to consider appropriate variable cost for plants as per the PPAs. Order that the approved tariff is subject to the decision of the Commission in DRP 27 of 2012 filed by MPC. Alternatively, if zero / part power dispatch instructions is issued by TANGEDCO, it should be limited to max of 4 hrs of zero power followed by a minimum of 8 hrs of technical feasible load of 13 MW single engine operation. TANGEDCOs Reply 2.205 Honble TNERC in accordance with above Terms and Conditions of Tariff Regulations, has determined the power purchase cost and gave the Merit Order Ranking for all available sources from which energy is available in FY 2012-13 under Table 192 of Tariff order dated 30.03.2012. According to clause 7.1.2.f. of Tariff order, Honble TNERC listed M/s PPN, M/s SPCL, M/s MPCL & M/s GMR under the plants which are not scheduled as per Merit Order Dispatch, with a liberty to approach Commission in advance if they are dispatched outside Merit order. 2.206 Based on the above Tariff order and Grid Code of Honble Commission, M/s SPC and M/s MPC are being given zero dispatch instruction from 01.04.2012 till date, based on the merit order dispatch by SLDC. During the zero dispatch period, M/s SPC and M/s MPC are allowed fixed charges only, as directed by Commission. 2.207 Further, whenever there is a shortage of power, M/s SPC and M/s MPC are being dispatched outside merit order by SLDC, and ratification / approval of this dispatch is obtained from the Honble Commission then and there by TANGEDCO. 2.208 Against the zero dispatch instructions issued by SLDC as per Honble TNERCs Tariff order, M/s SPC & M/s MPC have raised certain disputes such as directing TANGEDCO to issue dispatch instructions based on the PPA, to pay the cost of additional start stop due to zero power generation, cost of additional fuel for start-up boiler during zero dispatch etc and filed a DRP before the Honble TNERC vide DRP No.26 of 2012 and DRP No. 27 of 2012 and the DRPs are yet to be admitted by the Commission. Preliminary objection has been filed by the TANGEDCO in the above DRPs. 2.209 As per Article 12 of the PPA on Force Majeure and specified that directions of Honble Commission in Tariff Order No.1 dated 30.03.2012 vide para 7.1.20, fall under the Direct Indian Political Event of Force majeure Clause of PPA and therefore Zero dispatch of power from M/s SPC or M/s MPC is not in violation of the terms of PPA, as explained above. 2.210 Having established the zero dispatch concept under Force Majeure, now the payment obligation of TANGEDCO during such Force Majeure shall be dealt, which is as follows:
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Article.12.4 Continuing Payment Obligation: Force Majeure of PPA provides as below: a) Upon the occurrence and during the continuance of any event of force Majeure, the Tariff and all other payment obligations of the Parties hereunder shall continue to be payable as set forth below: i) for Direct Indian Political Event the project is deemed to be operating at the NPLF and full Fixed Charge Payment shall be paid by TNEB 2.211 In FY 2013-14 when compared to FY 2012-13, the variable costs of M/s SPC or M/s MPC is not likely to come down, but it is likely to increase only, taking market trend of liquid fuel into consideration. 2.212 In view of the reasons explained above, for this FY 13-14 also, TANGEDCO has filed Tariff Petition & ARR mentioning zero dispatch for the high cost IPPs namely MPC, SPC, GMR & PPN. Commissions View 2.213 Regulation 75(1) of the TNERC (Terms and Condition for Determination of Tariff) Regulation 2005, specify the following: The Distribution Licensee shall procure power on least cost basis and strictly on Merit Order Despatch and shall have flexibility to procure power from any source in the country. 2.214 Similar provision exists in the Tamil Nadu Electricity Grid Code as well as in Electricity Act 2003. 2.215 In line with the provisions mentioned above Commission adopted the same approach to allow the costs in its Orders TO No 3 of 2010 and TO NO 1 of 2012. In the matter of the above mentioned orders, neither TANGEDCO nor the petitioners have raised any objections previously on the applicability of merit order principles to their plants. 2.216 Commission understands that the issue of finding alternative for meeting the heating requirement of fuel pipes and tanks etc in the event of Nil generation, is being taken up with the IPPs by TANGEDCO so as to strictly follow the Commissions tariff order No. 1 of 2012 dated 30-3-2012 as submitted by TANGEDCO in the matter of petition MP No 23 of 2012. 2.217 In addition the matters concerned to payment obligations or applicability of Articles of a bilateral PPA are outside the purview of this petition. Hence the Commission decides that the power purchase quantum for the second control period from M/s SPCL and M/s MPCL will continue to be governed by Merit Order Despatch principles.
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2.218 In cases where the Power Stations are to be despatched outside Merit Order, TANGEDCO shall obtain approval of the Commission in advance by furnishing reasons for such action. In case of emergencies TANGEDCO is permitted to resort to such a practice but will approach the Commission within a week of such action along with the reasons for such action. 2.219 MoD for the specific stakeholders viz M/s SPCL and M/s MPCL has been in vogue from 1st April 2012. No specific violation of PPA has been cited by them and a direction is being sought to follow the PPA. Alternatively a scheme of despatch is proposed. Section 32(2)(a) of E-Act 2003 states that The State Load Despatch Centre shall - (a) be responsible for optimum scheduling and despatch of electricity within a State, in accordance with the contracts entered into with the licensees or the generating companies operating in that State; There is no merit for any direction from the Commission for following the provisions of law. As and when there is a cause of action, the Petitioner may approach the Commission for specific relief.
11. Cross Subsidy Surcharge

Stakeholder Comments Average Billing Rate 2.220 TANGEDCO has proposed to maintain tariffs at the same levels for HT IA, HT IB, HT IIB & HT III Consumers. Based on the Demand, Sales, Fixed charges and Energy charges the average billing rate for these categories works out to Rs. 6.91, Rs. 6.34 Rs. 6.57 and Rs. 7.98 respectively. 2.221 These average billing rates have then been used by TANGEDCO in estimating the cross subsidy surcharge applicable to consumer categories. 2.222 As per second proviso to Section 42(2) of the Electricity Act 2003, cross subsidy surcharge is to be utilised to meet the current level of cross subsidy meaning to compensate the distribution licensee whose consumer moves to OA procurement for the loss in revenue in excess of the cost of supply. 2.223 In Tamil Nadu, even when consumers in these categories move to procure power through open access, demand charges are being paid by these consumers implying the actual revenue loss to GEDCO is only on account of the energy charges. 2.224 Therefore, the applicable energy rate to the consumer is the appropriate value to use in the formula specified in the Tariff Policy 2006 for calculation of CSS, as shown in table above or revised energy tariff notified by the Honble Commission. 2.225 The effective rate, which includes the demand charges as well, cannot be used, as revenue on this account is NOT being lost to TANGEDCO due to consumers moving to open access procurement of power.
Marginal Cost 2.226 Further, we request the Honble Commission to verify the power procurement schedule for FY14 and re-estimate the merit order stack, to ensure that the disallowance is from appropriate stations at the margin. Therefore, in computing marginal cost of power, the Honble Commission needs to correctly estimate the quantum of disallowance and ensure that the merit order stack is correctly represented Wheeling charges in CSS 2.227 Wheeling is defined in the Section 2(76) of EA2003 as wheeling means the operation whereby the distribution system and associated facilities of a transmission licensee or distribution licensee, as the case may be, are used by another person for the conveyance of electricity on payment of charges to be determined under section 62; 2.228 Further, Tariff Policy 2006 specifies that CSS should be calculated as the difference between tariff applicable to relevant category of consumers & the cost of distribution licensee to supply electricity to this class of consumers, which clearly includes the transmission cost as well 2.229 Further, the NTPO6 states that the cost to be borne by OA consumer includes transmission costs. 2.230 As precedent, the Kerala SERC in its Order on ARR, ERC & Tariff for FY13 of KSEB, has used cost of transmission alone for EHT (transmission voltage) consumers and aggregate of transmission & distribution cost for HT (distribution voltage) consumers in estimating cost of distribution licensee. 2.231 Therefore, we submit that the wheeling charges used in the formula to estimate CSS should include the transmission charges as well, since these form a part of the costs that the distribution licensee incurs to serve a consumer. 2.232 TNERC should deny TANGEDCO Cross Subsidy Surcharge as long as it is not able to meet the consumers demand. 2.233 For calculating the Cross Subsidy surcharge, 3 power generators (Source Table 113) has been taken. The logic of choosing them is to be explained. It appears that they do not meet the criterion stipulated by tariff policy for this purpose. Further the calculations in table 114 need to be verified with the formula given in Para 7.3.3.
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TANGEDCOs Reply Average Billing Rate 2.234 The cross subsidy proposed is being calculated on the basis of the formula laid down by the Ministry of Power in Tariff Policy. As per the formula, the cross subsidy is the difference between the tariff paid by the relevant category of consumers and the average cost of supply including line loss and wheeling charges. 2.235 The tariff includes both energy and demand charges. Hence, the cross subsidy surcharge is being calculated taking into account the demand charges payable by the consumer also. 2.236 The Cross subsidy surcharge calculated by the TANGEDCO in its tariff petition filed before the Honble TNERC is in line with the formula provided by the Ministry of Power in Tariff Policy. 2.237 No Provisions are available in the Electricity Act 2003 and Rules and Regulations made there under to omit the demand charges while calculating the cross subsidy surcharge. Marginal Cost of Power 2.238 The Tariff Policy prescribed by the Ministry of power specifies the formula to calculate Marginal cost/Variable cost to arrive at the Cross Subsidy Surcharges. Accordingly, the Marginal cost/Variable costs are calculated. Wheeling Charges 2.239 The cross subsidy is being calculated as per the formula notified by the Ministry of Power in its Tariff Policy. In the Tariff Policy it has been specified to include only power purchase cost, system loss and wheeling charges payable to distribution licensee. Accordingly, the TANGEDCO has calculated the cross subsidy surcharge considering the power purchase cost, system loss and wheeling charges. Hence, the transmission charges could not be included in the cross subsidy surcharge calculation as requested by the petitioner. Non levy of CSS during R&C 2.240 The Government of Tamil Nadu has issued a government order vide G.O. No. 79 dated :11.07.2012 relating to levy of cross subsidy from the consumers who avail supply from the generators other than TANGEDCO and from CPP without availing the quota energy from TANGEDCO during the period when R & C measures are in force. This levy of cross subsidy has been challenged by some of the consumers and the matter is pending in the Honble High court of Madras.
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Commissions View 2.241 The formula laid out in the Tariff Policy for calculating surcharge is as below: S = T - [C (1+L/100) + D] Where: S is the surcharge T is the Tariff payable by the relevant category of consumers; C is the Weighted average cost of power purchase of top 5% at the margin excluded liquid fuel based generation and renewable power D is the Wheeling charge L is the system Losses for the applicable voltage level, expressed as a Percentage 2.242 The Commission is of the view that the policy does not differentiate between demand charges or energy charges. For implementing tariff philosophy in letter and spirit, a reasonable realisation rate from consumer category needs to be considered. Accordingly, average billing rate for the category shall be used for computing the cross subsidy surcharge. 2.243 The Commission has revised the power purchase quantum for TANGEDCO for the second control period as outlined in the Chapter A4. Commission has applied the merit order principles and arrived at power purchase from top 5% at the margin excluding liquid fuel based and renewable generating stations for computation of cross subsidy surcharge. 2.244 The Commission does not agree with the suggestion that CSS computation should include the transmission charges as well. If one has to describe the formula prescribed in the Tariff Policy for arriving at Surcharge, it will be as follows a. The average realisation rate/average billing rate of a consumer category minus the average cost of power purchase avoided due to consumer opting for open access grossed up for system losses minus the wheeling charges accrued to the distribution licensee for grant of open access to the consumer. 2.245 Based on the explanation above, the distribution licensee will charge the consumer for wheeling charges and revenue accrues to the account of distribution licensee i.e. TANGEDCO whereas the transmission charges are charged by and accrued to Transco i.e. TANTRANSCO. Hence the logic of including transmission charges in the formula is not acceptable.
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12. Subsidy
Stakeholder Comments 2.246 Last year the subsidy for agriculture and hut is Rs/5858 Crores. The TANGEDCO received only Rs.276 Crores. Govt. should give the full subsidy to the TANGEDCO. 2.247 The subsidy to be given by GoTN is projected as Rs. 1500 crores based on the number of Service Connections, whereas GoTN is giving a subsidy of only Rs 315 crores. Steps should be taken by TNERC to ensure that the right amount of subsidy is released to TANGEDCO by GoTN. Commissions Response 2.248 Subsidy determined by the Commission has been fully given by GoTN.
13. Peak hours and time slots

Stakeholder Comments 2.249 Current peak hour in 6 am to 9 am and 6 pm to 9 pm. Commission directed TANGEDCO to submit load pattern which is not yet submitted. In R&C measure peak hour is 6 pm to 10 pm, however practically peak hours are from 6 pm to 9 pm. 2.250 Commission to redefine peak hour as 6 pm to 9 pm and remove morning peak hour Commissions View 2.251 Sufficient data is not available to assess the impact of the additional hour in Peak hours, and hence the Commission is continuing with the existing TOD slots. The TANGEDCO is directed to submit data on ToD consumption along with the next Tariff Application with proper justification and consideration by the Commission. Depending on the impact and response to the ToD tariffs, the Commission will take view on ToD tariffs depending on data availability and viability in the next tariff order. 2.252 The Commission is of the view that peak hour tariff and night hour rebate need not be on equal footing. During the Peak hours, marginal cost of power procurement is very high and being in revenue neutral regulated business, a pass through mechanism has to be made available to the Utility to recover its cost and also to disincentivise the avoidable consumption during the peak period. During the night off-peak hours the Utility would be operating its base load plants to cater to the off peak load, which are built in to the tariff of the consumer and there is no equitable avoidance of cost for the Utility vis--vis peak hour consumption.
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14. Solar Purchase Obligation

Stakeholder Comments 2.253 Solar purchase obligation for LT Commercial consumers should be abolished. For others it shall start from the next year since sufficient solar power is not available. 2.254 Already LT commercial consumer is in higher tariff category this solar purchase obligation for LT Commercial consumers should be abolished. 2.255 Solar purchase obligation of 3% within December shall be stopped. 2.256 TNERC has erred in imposing the SPO for LT (Commercial) consumers at 3% of the total consumption even though many issued are yet to be finalized. 2.257 TNERC has ignored the fact that on account of R&C measures and unscheduled power cuts which range from 0 to 14 hours, during which time the consumer will not be able to draw and utilize power, it would be impossible for the obligated consumers to meet their obligations. 2.258 TNERC by way of imposing SPO has imposed additional cost indirectly to the obligated consumers, which is in the nature of an increase in tariff 2.259 Fixation of SPO quantum of 3% upto 31.12.2013 and 6% from 01.01.2014 would not be appropriate and correct considering the non-availability of equivalent or sufficient solar installation in the entire state. 2.260 TNERC is requested to provide Net Metering facility / guidelines to adjust the excess generation by Solar PV panels in billing. Commissions View 2.261 SPO is not relevant to the Tariff Petition.
15. Renewable Power

Stakeholder Comments 2.262 Upgradation should be done. Promote Solar power. Cochin Airport is operating based on the Solar Power. The big projects like Railways, airports should energize from the Solar Power. 2.263 Bio energy in Tamil Nadu is estimated as 6,15,800 kW whereas actual is 1,87,265 kW which constitutes 27%. Bio energy in Tamil Nadu should be utilized effectively like Maharashtra and Gujarat as Maharashtra uses 74% and Gujarat 62%. 2.264 Solar Power shall be used for street lights and drinking water overhead tanks.
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Commissions View 2.265 All suggestion for promoting renewable energy shall be examined separately.
16. Equitable distribution of power

Stakeholder Comments 2.266 What are the action taken by the Commission with respect to the directions given by the Honble High Court of Madras on Equitable distribution of power. 2.267 Representatives from small scale industries, industrial associations, consumer associations and individual consumers have requested that the tariff should not be hiked and have all spoken about equitable distribution to be implemented. Commissions View 2.268 Separate Petitions have been filed with the Commission and this issue will be dealt separately.
17. Impact of THANE cyclone

Stakeholder Comments 2.269 TANGEDCO has faced THANE super cyclone during the last year and lost its assets worth more than Rs.500 Crores. Not even a single word is uttered about the same in the petition. It is an extra-ordinary circumstance that TANGEDCO has faced, though managed exceedingly well. TANGEDCOs Reply 2.270 The expenditure incurred towards restoring the power supply in the districts of Cuddalore on account of THANE cyclone has been taken into account in the additional capital expenditure. The petition for additional capitalization was filed in October 2012 before the Honble Commission. Commissions View 2.271 The Commission has examined the capital expenditure and capitalisation in general and has allowed all prudent expenditure on provisional basis subject to further scrutiny.
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18. Sales
Stakeholder Comments 2.272 TANGEDCO did not furnish the methodology for estimating the energy consumption for the year 2013-14, excepting a run in between the lines that the demand is growing at 8 % to 10% in the State. It appears that the figures it has furnished were pulled out of thin air. TANGEDCOs Reply 2.273 TANGEDCO would like to submit that the overall growth in sales considered for the FY 2013-14 is around 16% which is worked out based on 9% growth rate and around 7% increase in consumption due to additional availability of power. Based on the above assumption most of the additional power that will be available in FY 2013-14 would go to LT consumers who are covered under load shedding. The domestic consumers are major group of the consumer mix and hence have resulted into an increase of 23% as compared to FY 2012-13. Commissions View 2.274 TANGEDCO has projected energy consumption, load and number of consumers for the second control period using the historical trend method by applying the categorywise Compounded Annual Growth Rate (3 years and 5 years CAGR) appropriately. 2.275 Commission after scrutiny of submissions made by TANGEDCO computed the sales figures taking into account additional capacities coming online during the second control period leading to improvement in the power supply position. The sales estimates have been elaborated in Chapter A4. 2.276 Commission is of the view that in future TANGEDCO should come up with a robust sales estimation technique that flows from a more scientific load growth study and considers the impact of various factors such as changes in per capita consumption pattern, sales mix, industrialization in the state etc.
19. Tariff related Comments

a. Tariff for HT Industries Stakeholder Comments 2.277 Maximum demand charges should be modified from Rs 300 / KVA / month to Rs 2.40 / KVA/ hour i.e. it should be charged only for hours of grid supply. It should have slab wise rates as in Gujarat. It should also be based on voltage at which power is supplied i.e. Supply at higher voltages should have lower demand charges.
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2.278 Commission in its last tariff order fixed tariff for HT consumers at Rs 5.50 / unit as against TANGEDCO proposal of Rs 5 / unit. Commission should consider reduction of Rs 0.50/ unit for HT consumers. 2.279 Power factor incentive as prayed before APTEL should be approved and reintroduced by the Commission. 2.280 The tariff applicable during evening peak hours of 120% should be made applicable for 8 hours instead of 6 hours and similarly the time slot for night consumption should be reduced by one hour. 2.281 The Commission may restore rebate for maintaining high PF of above 0.90. 2.282 Currently, maximum demand charges for any month will be levied in the KVA demand actually recorded in that month or 90% of sanctioned demand whichever is higher. However in case of R&C measures its actual recorded maximum demand or 90% of demand quota, whichever is higher. The Commission may reduce the present billing to 80% as prevailing in Andhra Pradesh. 2.283 Further for as long as R&C measures are in place, the demand charges be reduced proportionately based on the hours of supply. 2.284 Service connection for gated community is given under domestic tariff 1A category at present. Water connection, Cable TV connection etc are given as a single service to the gated community. Only electricity is extended to individual houses. Therefore, extension of single point of HT supply to the gated community may be considered. b. Tariff for HT Commercial Stakeholder Comments 2.285 Indian squash academy is currently being charged at commercial tariff. Request for 50% concession on the rates for the squash academy. 2.286 Treat power consumed for Dormitory facility to employees of mills as Domestic under LT IC instead of being treated as Commercial c. Tariff for Agriculture and Hut services Stakeholder Comments 2.287 Creed Krishi Vigyan Kendra, which operates under Indian Council for Agricultural Research (ICAR), provides demonstration to small farmers with and without land in the model farms developed within the organisation. Hence seek change in tariff from LT IIB to LTIV
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2.288 The motor used for drawing water from the well is to be treated under the LT tariff IV category as the same is to be treated as agriculture related allied activities. Extension of LT Tariff IV to the Poultry farming which has a poultry population of 25000 nos. of poultry in one farm. 2.289 Renew the free supply for jaggery production in the agricultural land (as the transportation of sugarcane is not possible) for 5 HP Motor for 40 days which was previously charged at Rs.60/-. 2.290 For fish farming, free supply at LT IV is extended to some people and for other fish farm owners the tariff is charged under LT IIIA(1)/IIIB or Tariff V. The disparity should be removed. LT Tariff IV should be extended to all fish farmers. Request for tariff change in respect of fish farming from IIIA to IV. 2.291 The name of the consumer who obtains service under LT IIIA(1)/III B or V for fish farming should be included in the waiting list for LT IV and when the consumer reaches the seniority from that date onwards he should be charged under LT IV. 2.292 Not to raise tariff for agricultural services due to drought in Kancheepuram. 2.293 The present practice of TANGEDCO for categorizing farmers/ farm holdings in accordance with the usage of land/ occupation does not take into account the size of the farm holding or the income. Categorize farm holdings based on income / size of land so that subsidy is given to the needy farmers. Reasonable user charges are also to be levied. 2.294 Isha Foundation grows plants and gifts them to children/public. Presently charged at LT III A (1) in some places and LT V in some places. Request for considering the activity as agriculture and charged appropriately. 2.295 Provide free service under tariff IV for the Poultry farms which have poultry upto 25,000 nos. Issue clear instructions to TANGEDCO to not levy charges under theft of energy charges and compensation for the services who use agricultural pumpset for feeding the poultry. 2.296 Free electricity shall be given to all the poultry farms under Tariff IV category. 2.297 Production of meat should be treated as an agriculture related work and free electricity should be extended. 2.298 The basis on which the tariff of Rs.1750 / HP was fixed for agricultural services is unknown. Now the tariff is proposed to increased to Rs.2500 / HP. The Government may give subsidy in view of the coming parliament elections, however if the Government stops the subsidy in future the farmers will be forced to pay the charges. Hence, a law may be enacted for providing free power to agriculture consumers in future. 2.299 Farmers are working to provide food to the people and therefore supply of free electricity to farmers is the duty of the Government.
2.300 Free electricity should continue to the agricultural sector. Meter shall be provided in the hut services and free supply can be given upto 500 units. 2.301 Free supply should be given to poultry farms below 25000 numbers. 2.302 In Tamil Nadu 24.48 Lakh acres of land was under cultivation. Due to failure of monsoon, this year severe drought is prevailing in Tamil Nadu. 7 small hydro storage units, 39,200 lakes,18.60 lakh wells are used for agriculture. Thousands of Crores of rupees were already lost due to drought. So, there should not be any tariff hike in agriculture and free electricity should be continued forever. 2.303 The proposed agricultural tariff hike to Rs.2500 per HP per annum may be reduced to below Rs.2000 per HP. 2.304 The proposed tariff hike for hut services of Rs.120 p.m. may be reduced to Rs.75 p.m. 2.305 Huge increase was made to agricultural and hut services last year. This year also tariff hike is proposed to agricultural and hut services. Even though subsidy is provided by the Government, we oppose the tariff hike. d. Tariff for Streetlight and Water supply Stakeholder Comments 2.306 In Tariff Order of 30.7.10, NTADC (New Tirupur Area Development Corporation Ltd.) was classified under II A similar to TWAD for both HT & LT categories which has been discontinued in the latest Tariff Order. Classify HT Tariff for all 9 Nos New Tiruppur Area Development Corporation Ltd under Tariff IIA on par with TWAD Board e. Tariff for Domestic Stakeholder Comments 2.307 Maintain the unit rate as in the lower slabs and charge only the units consumed above the slab in the higher slab instead of adopting different rates for different groups(0 to 100; 0 to 500; 500 and above) based on their consumption. 2.308 Increase in slab rate for more than 500 units at a flat rate of Rs 5.75/= as against Rs 3.75 causes hardship and hence increase slab from 500 units to 1000 units for subsidy 2.309 Fixed charges for LT CT services have been increased from Rs.60 to Rs.240/KW/month which is 400% increase. Fixed charges should not be related to MD and retained at the existing energy charges. Drop the fixed charges for LTCT services as it has no relevance 2.310 Service oriented institutions should be charged at domestic tariff.
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2.311 Slab system in the domestic tariff should be revised like the slab system followed in the income tax. 2.312 Tamilnadu Uraga Thozhil mattrum Kurun thozhil munaivar sangam requested for elimination of slab system for domestic consumption since most of their members are dwelling in rented accommodation and paying one fourth of their earning as electricity charges. f. Tariff for Tiny Industries Stakeholder Comments 2.313 LT III A may be made applicable for loads upto 20 HP. 2.314 The concessional tariff III A awarded to Jewellery making units should continue. There should be no increase in tariff. 2.315 Request to increase connected load as 20 HP for LT III A (2) due to industrial growth. 2.316 Tariff for Power Loom increased by 110% while it was increased by 37% for other categories. Due to power cuts an additional cost of Rs.10,000/- has to be incurred for operating diesel engines. For power looms operating under payment of wages, tariff has not been increased. On the same lines for Small Scale Power looms the tariff revised during last year may be withdrawn. 2.317 Although Govt is paying the subsidy for consumption of 500 units for power looms, the power looms are forced to pay the fixed charges. Hence, there is no meaning for giving free electricity. 2.318 Slab system before the last tariff order is to be restored. 2.319 The capacity of the fodder, milking machine and pesticide sprayer varies from 0.5 HP - 2 HP. 2.320 TANGEDCO is not taking action to change the tariff from Commercial to Tariff IIIA1 to the horticulture. The Commission shall get the details of the services which were converted from Commercial to Tariff IIIA1 from the TANGEDCO. 2.321 Extension of waiver of fixed charges under LT III-A(2) upto 500 units bi-monthly. 2.322 The tariff hike made during last year was very high and the tariff should not be increased for the Small and Tiny industries. Until uninterrupted power supply is implemented in Tamil Nadu, the tariff should not be increased for the Small and Tiny industries. 2.323 The Power factor was increased and high power factor is maintained by educating the workers and by installing the capacitors. Hence, the Power factor incentive should be given. For power factor between 0.85 - 0.9, 1% rebate and for power factor between 0.95 -1, 2% rebate should be given.
2.324 In respect of welding services, the 15 % surcharge should be removed. 2.325 Tariff for fish culture is now charged under IIIA1 category. The same should be converted in to free supply. g. Tariff for LT Commercial Stakeholder Comments 2.326 Central Prison at Coimbatore was initially charged under HT and there after their tariff has been changed to Tariff-V by the then TNEB. Since their usage is not in commercial nature, AG audit objects their billing which is charged under Tariff-V. 2.327 Fixed charges for commercial consumers should be reduced from Rs.120 to Rs.60. h. Tariff General Stakeholder Comments 2.328 There should be a reduction in number of tariff categories for HT and LT by combining certain categories such as HT IA and HT IB can be combined, Tariff IIA, IIB (2) and IIC may be merged, LT Tariff IIA, IIB, IV can be combined, because the quantum of energy consumed by some of these consumers is not large enough to merit a separate category. 2.329 Tariff proposed for 2013-14 is not as per Electricity Act, directives of ATE etc. ATEs directive on Regulatory Assets is not complied. 2.330 Commission should not fix tariff higher than what is asked for by TANGEDCO as done last year. The rate asked for TANGEDCO should also be reversed as TANGEDCO has made no improvements despite a 37% increase. 2.331 The tariff proposal for fixation of tariff for the financial year 2013-14 is not showing any indication that the legal and policy guidelines are followed. Some of the assumptions made in calculating tariff of generating stations are not in accordance with the basic accounting principles. 2.332 The tariff revision sought in this petition is a measly figure, not worth the petition and leads to the situation of future hikes in the form of Regulatory Asset. 2.333 TNEB Pensioners Association suggested that TANGEDCO may file a tariff petition for FY 2013-14 to 15-16 envisaging tariff plan to recover ARR from consumers / GoTN with suitable higher subsidy, to avoid tariff shock to economically weaker sections. 2.334 Reduce tariff for low income groups and take assessment every month instead of bimonthly.
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2.335 Provide government subsidy for senior citizens, students of Class X, XII and college students. 2.336 Adjust the interest on Security Deposit in the CC bill in the year end. 2.337 Consumers to be permitted to pay their CC charges for additional 10 days after the due date with BPSC after which they can be treated as defaulters. 2.338 Cost of electricity to be differentiated between rural and city consumers. 2.339 Due to inequitable supply of power, tariff for consumers other than Chennai should be reduced by 20% from the existing levels. 2.340 Free electricity should be provided for Training Centre run by differently abled people, since they are running their centre for their daily livelihood. 2.341 Fixed Charges per KW should be equal for all type of consumers irrespective whether they are industrial or commercial consumers. 2.342 Since the tariff is equal throughout the state power cut should also be equal in all the districts. Otherwise the tariff shall be reduced for the places where power cut is more. 2.343 TNERC shall not bench mark the tariff of other states while determining the industrial and commercial tariffs in Tamil Nadu. These consumers cannot take on any further burden. 2.344 Higher tariff shall be fixed to the lavish elimination to discourage it. 2.345 Calculate power consumption of commercial malls, cinema halls separately and fix High cost slab system. 2.346 Big commercial organizations consume power heavily for the use of air conditioners and decorative lights inside the buildings. Therefore the definition of the lavish elimination should be modified to accommodate these types of consumers also. 2.347 As per the order of APTEL in Appeal No 257 of 2012, request the Commission to reconsider and re-determine the differential tariff of electricity for peak and off-peak hours. 2.348 Commission should device steps to recover the Regulatory Asset by way of increasing the tariff step by step 2.349 Tariff may be hiked for the I.T industries, cinema hall and marriage hall, and for Lavish Illumination but not for agricultural category.
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i. Request for Separate Category Stakeholder Comments 2.350 Seeking separate classification for Textile industry as LF for textile industry is 9598%. Also referred to Clause 2.1.46 of Issue 6 Cost of Supply where it is stated that tariff may be fixed as per consumer load factor, power factor, voltage, total consumption and reflect cost of supply. 2.351 Consider Chennai Metro Rail Limited under special category. MOU between GoI, GoTN, and CMRL dt 15.2.2011 states that electric power is to be made available to CMRL on a no-profit no-loss basis, subject to approval of TNERC. Hence tariff made applicable to CMRL to be on actual cost of supply at 110 kV level excluding subsidy and cross-subsidy in line with National Tariff Policy and on par with the tariffs for DMRC and BMRCL. 2.352 For Cold storage plants and food processing plants, Medium and Small scale industries special tariff may be announced. Power Factor incentive should be implemented for this category. TANGEDCOs Reply Tariff Categorization 2.353 TANGEDCO would like to inform that as per Section 62 of the Electricity Act, 2003, State Commission is vested with the powers to determine tariff for various categories of consumers. The tariff is being fixed after taking into consideration of the consumers load factor, power factor, voltage, total consumption of electricity etc,. 2.354 In the tariff petition for the year 2013-14, tariff revision has been proposed only for agriculture and hut services and there is no proposal to revise the tariff for other categories of consumers. Tariff Proposal 2.355 In the tariff petition for the year 2013-14, tariff revision has been proposed for agriculture and hut services and there is no proposal to revise the tariff for other categories of consumers. Taking into consideration, the power crises in the State, the TANGEDCO has filed the petition to revise the tariff only for the LT Agricultural and LT Hut consumers. 2.356 The Honble TNERC has been vested with the powers to revise the tariff to other category of consumers either to increase or reduce without affecting the revenue of the TANGEDCO to meet out its ARR. The tariff hike to HT consumers for 2012-13 was already upheld by the APTEL in appeal No.257 of 2012.
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Proportionate reduction in demand charges 2.357 Further also, in appeal No: 257 of 2012 filed by the M/s. Southern India Mills Association, Coimbatore, against the Tariff Order No.1 of 2012 dated:30.03.2012 issued by the Honble TNERC,the Honble Appellate Tribunal for Electricity vide in its order dated 09.04.2013 has upheld the levy of demand charges as stipulated in Tariff Order No. 1 of 2012 dated 30.03.2012. 2.358 The Honble TNERC vide its rulings has held that the demand charges are intended to cover the fixed cost of TANGEDCO including interest, depreciation, employee cost, repair and maintenance etc., and hence even if there is no power supply the demand charges would be levied. Separate Category for Textile Industry 2.359 If a separate tariff for textile industries is considered, then other industries coming under industrial category may also request for a similar treatment and there will be no tariff rationalization. 2.360 Further also, in appeal No:257 of 2012 filed by the M/s. Southern India Mills Association, Coimbatore, against the Tariff Order No.1 of 2012 dated:30.0.03.2012 issued by the Honble TNERC, the Honble Appellate Tribunal for Electricity in its order dated 09.04.2013 has upheld the non consideration of separate tariff for Textile Industry. Consideration of Dormitory facility as Domestic: 2.361 The Honble TNERC in its Tariff Order dated 30.03.2012 has clearly stated that in case of supply under HT Tariff, except for HT Tariff III supply used for creating facilities for the compliance of Acts/Laws or for the purpose incidental to the main purpose of the establishment of the consumer such as facilities extended to the employees/students/patients as the case may be within the premises of the consumer shall be considered to be for the bonafide purpose. However, if such facilities are extended to the public, such facilities shall be metered by the licensee separately and charged under appropriate LT Tariff. 2.362 It has also been stated in the Tariff Order dated 30.03.2012 that in the case of supply under HT Tariff IA,IIA,IIB and HT Tariff III at the option of the consumer, the use of electricity for the residential quarters within the premises shall be metered separately by the licensee and charged under LT Tariff I C. 2.363 Hence, it is clear that in case of supply under I A, II A, II B and III the use of electricity for residential quarters within the premises can be charged under LT Tariff I C at the option of the consumer.
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2.364 In case if the consumer does not wish to exercise any option under clause 10.1.1 under chapter 10 of the tariff Order dated 30.03.2012,then the supply of power can be treated to be for the purpose of the establishment of the consumer such as facilities extended to the employees/students/patients as the case may be within the premises of the consumer and shall be considered to be for the bonafide purpose and charged under HT Tariff I A without LT metering. Commissions View 2.365 Tariff categorization is dealt with in detail in the tariff schedule. 2.366 Request for a law to be enacted for providing free power to agriculture consumers will be conveyed to GoTN. Separate Category 2.367 In case the distribution licensee or a consumer feels the justification and necessity for the creation of a new category, then it should submit the necessary data on consumer and consumption pattern for the category and also ensure that the categorisation is in accordance with the criteria for differentiation provided under Section 62(3) of the EA 2003, for the Commission's consideration. Demand Charges 2.368 The demand charges are towards recovery of fixed charges of the distribution licensee towards the cost of infrastructure provided to meet the maximum demand recorded by a consumer and are not related to the hours of actual supply to the consumer. In any case as highlighted by the consumer himself the State Commission has ordered to collect the demand charges in relation to the quota demand instead of sanctioned demand during the period the Restriction and Control measures are in force, which means the consumer is not paying any excess demand charges if he restricts his maximum demand to demand quota. The same is upheld by Honble ATE in its order on the same matter on 09.04.2013. Relevant para of the order is extracted below 10.7 Imposition of Demand charges is perfectly legal. The Demand charges are imposed on the basis of maximum demand actually recorded or 90% of the demand quota during the period of restriction and control. We do not find any illegality in the impugned order in this regard. 2.369 The Commission after carrying out a thorough review of the ARR and tariff filings made by the utility to arrive at allowable pass through cost, based on which the tariff applicable to each category is determined to enable recovery of the computed cost. The determination of tariff is an exercise that factors in aspects such as prudence of expenditure, efficiencies, cost of supply, cross subsidies etc., and put through iterations to ensure the interests of the consumers are protected at the same time allowing cost recoveries to happen in a reasonable manner.
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Power Factor Incentive 2.370 Power Factor (PF) disincentive and incentive should not be equated with each other. The Commission notes that PF disincentive mainly caters to passing the additional cost of the grid imbalance settlement to the consumer. Whereas, maintaining high power factor itself is an incentive to the consumer as it leads to stable voltage, reduction of strain to consumer equipments and reduction of current consumption charges to the consumer. 2.371 The Commission would like to state that power factor incentive is subjudice in Supreme Court.
20. Consumer issues and Quality of Supply

Stakeholder Comments 2.372 Restoration of supply to Agriculture pumpsets in case of breakdown taken a long time. 2.373 Low voltage problem exists and no quality supply is being given even during the period where supply is available. On giving proper supply, if tariff is increased people will be ready to pay now 2.374 As there is meter shortage, consumers purchase the meters to get new service connections. However, the amount for cost of meters is not refunded to the consumers. Government shall take action to manufacture the meters. 2.375 There are large numbers of applications pending before TANGEDCO for providing agricultural service connections. The pending petitions should be disposed of on timely basis. 2.376 Due to way leave problem agriculture service connection has not been effected even after 7 years. Request the Commission to interfere to effect service connection to the consumer. 2.377 R.A. No.4 of 2011 permitted refund of Power Factor incentive for 85 days frm 1.8.2010 to 25.10.2010, TANGEDCO is yet to refund the amount. Request specific order for compliance. 2.378 Failure of distribution transformers and burning of motors are reported. To avoid this 3 phase supply should be given to agricultural consumers. 2.379 Conditions laid down by TANGEDCO for agricultural service connections are not acceptable. 2.380 Since there are no adequate employees at lower cadre, TANGEDCOs staff is unable to attend faults. Further, as the power is supplied at free of cost, the staff do not care to attend the faults. The attitude of the staff of TANGEDCO should change and they should attend the faults immediately and rectify the same.
2.381 Shortage of employees is stated as the reason for delay in attending the faults. This can be overcome by appointing contract labours. 2.382 Old distribution lines have to be replaced and maintenance should be done in the distribution network. 2.383 Delay in giving agricultural connections should be avoided. Commissions View 2.384 The concern expressed by various consumers with regard to the quality of supply is very relevant. The Commission has already notified the Standards of Performance Regulations, which stipulate the quality of supply levels to be maintained by the Utility. While overall standards may be maintained by the Utility, it is quite possible that some chronic problems may exist in the system. TANGEDCO should take adequate efforts to attend to these problems. The common problems expressed by the consumers include low voltage, overloading and burning of transformers, cable failures, load shedding etc. While load shedding is directly related to the availability of power and the ability of TANGEDCO to purchase power at high cost, the other issues are technical in nature and will need investment in improving last mile connectivity. The distribution planning to be done by the TANGEDCO, duly taking into account the requirements of Supply Code, Distribution Code etc. would go a long way in improving the quality of supply. The Commission believes that TANGEDCO has its own in-house guidelines with regard to operation and maintenance of distribution system. Adequate transformation ratio will have to be created depending on the requirement. HT/LT ratio needs to be improved. The distribution transformers are to be metered to get the profile of the voltage, down time as well as the energy. Normally load on transformers should be limited to the extent of 80% of the rated capacity to prevent failures. The voltage at the tail end needs to be monitored at regular intervals. Proactive action on the part of TANGEDCO will go a long way in reducing the consumers complaints and improving their satisfaction. Erection procedure and safety requirements as per section 53 of Electricity Act, 2003 should be followed in letter and spirit.
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2.385 As far as consumers are concerned, these complaints could be taken up with the Utility directly and in the absence of corrective action by TANGEDCO, the issue could be taken up with the Consumer Grievance Redressal Forum (CGRF) for Redressal of grievances. 2.386 In case the consumer is not satisfied with the Order of CGRF, an appeal could be preferred to the Ombudsman. The Regulations relating to CGRF and Ombudsman could be referred from the website of the Commission
21. Objections/Suggestions by Southern Railways

2.387 Railway Traction should be exempt from Tax on electricity based on Article 287 of the Constitution of India. Article 287 also embodies the fact that the tariff should be reasonable and lower than tariffs charged to other bulk consumers. 2.388 Based on provisions of Section 62(3) of EAct 2003, the Commission may set different tariffs according to purpose of supply. Railways are a public utility, have no profit motive and are an essential part of the transport infrastructure of the Country. Considering the purpose of supply the Traction category should not be burdened with high level of cross subsidy. 2.389 Average cost / unit paid by Railways is higher than the Industries owing to the fact that while Load Factor at individual points is low due to the nature of Traction. Considering the above in previous Tariff Orders, Commission fixed demand charges lesser than the HT Industrial consumers, however energy charges are fixed on par with other HT industries availing power at 11 KV without considering the fact that voltage level for Traction is at 110 KV where transmission losses are lower. 2.390 Tariffs should reflect the cost to serve in line with Section 61 of Electricity Act 2003 and TNERC Terms and Conditions of Tariff Regulations 2005. 2.391 Category wise cost of service study carried out shows unrealistic apportionment of costs for Railway Traction which is not based on facts. 2.392 It is submitted that coincident peak demand should be considered for allocation of demand costs instead of non coincident peak demand. Southern Railway had requested all SEs of TANGEDCO for load survey data downloaded during monthly meter reading for computing coincident and non-coincident peak demands for submitting the same to the Commission, but data from all circles is not received. 2.393 Commission should direct TANGEDCO to rework Cost to serve Railway Traction based on coincident peak demand. 2.394 As Railways avails power supply at 110 kV directly from the 110 kV Grid of TANTRANSCO, the demand related cost allocation should be based on Simultaneous maximum demand as such demand related distribution costs should be zero for Railway Traction.
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2.395 Since Railway Traction is a separate category, technical losses corresponding to the supply voltage of 110 kV should be 2.7% whereas losses upto 11 KV of 6.96% is considered. 2.396 Commercial losses allocated to Railways is flawed, it should be zero since it is connected to exclusive 110 KV feeders. 2.397 There are errors as far as energy consumption of Railway Traction is shown in the petition. 2.398 Assumptions on allocation of customer related costs in the study report on Cost to serve model in the petition is wrong and misleading. The report states that servicing bulk consumers is costlier than retail consumers, the fact is the other way round and hence the study needs a relook. 2.399 TANGEDCOs proposal of imposing 15% surcharge for harmonics dumping lacks clarity and is very high. Applicability of IEEE 519/1992 at user end in isolation for imposing surcharge is questionable. Hence, Commission may defer implementing surcharge for harmonics dumping until there is clarity in reckoning harmonics is achieved. 2.400 TANGEDCOs proposal for adopting 0.85 PF for LT consumers and 0.90 for HT consumers is irrational. Minimum power factor stipulated for LT consumers should atleast be equal to HT & EHT consumers. 2.401 Present low PF surcharge works out to 636.98 paise/kVARh whereas cost of reactive power due to the utility is only 10.5 paise/ kVARh. This anomaly is due to adoption of lag + lead logic for computation of billing power factor. Imprudent implementation of lag + lead logic of metering by TANGEDCO causes more inefficiency in the system. 2.402 Also impact on system stability due to leading reactive power as contended by TANGEDCO is exaggerated. While fixed capacitors gets incentives in Kerala and Maharashtra, it is penalized in Tamil Nadu. 2.403 AP Discoms which are adopting kVAh billing also ignore leading PF for computing kVAh consumption. 2.404 Leading PF in Railway Traction should be treated as unity PF.
2.405 Cushion of 20% over and above the Contracted Maximum Demand be allowed without any surcharge for meeting exigencies. APERC granted such relaxation as per their Order of 10-03-2011. Consider allowing Recorded Maximum Demand upto 120% of CMD without any penalty for occasional exceeding above CMD. 2.406 Commission to incorporate the agreed conditions between Railways and TANGEDCO in the Terms and Conditions for Railway Traction to avoid confusion in some circles in the matter of billing of recorded demand during feed extensions.
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2.407 Recorded MD during feed extensions due to power failures attributable to TANGEDCO/ TANTRANSCO can be ignored for billing purposes. Similarly Recorded MD during failures of equipment or other reasons that are beyond the control of Railways is allowed without any surcharge upto the sum of CMDs at the failed and feed extending traction substations. APERC had allowed the same in their Order dated 10-03-2011. 2.408 Grant suitable rebate on Demand and energy charges for a period of at least 5 years from the date of commissioning for the new Traction subs stations. Other States are giving similar benefits to encourage Railways. . 2.409 Commission to direct TANGEDCO to re-programme the existing energy meters to record the export of energy as well and billed on net metering principles as adopted for NCES sources. This is in view of Railways introducing a new generation 3 phase electric locomotives type WAP7 and WAG9 which works on unity power factor for all loads and has regenerative braking facility. Therefore, 14-18% of energy is regenerated and fed back into the grid when there are no sufficient trains in the section. TANGEDCOs Replies Cost to serve Railway Traction at 110 kV 2.410 Taking into consideration the views and objections, the Honble TNERC in its Tariff Orders dated: 31.07.2010 and 30.03.2012 have fixed the demand charges for Railway traction as Rs.250/KVA i.e. less by Rs.50/KVA compared to HT Industrial consumers. However, the energy Charges were fixed on par with the HT Industries. TANGEDCO has not proposed any changes in all categories of HT consumers in the tariff petition filed before the Honble TNERC for determining tariff for the FY 201314. 2.411 The Honble commission is the competent authority to fix the tariff taking into account the revenue requirement of TANGEDCO. Surcharge for excess over CMD for traction 2.412 In any month if the recorded demand exceeds the contracted (sanctioned) demand, the Tamil Nadu Electricity Supply Code permits the licensee to levy surcharge on the excess over contracted maximum demand charges. Accordingly, the TANGEDCO levies the surcharge for excess over contracted maximum demand. 2.413 The request of the Southern Railways not to levy any penalty for occasional exceeding above to the Contracted Maximum Demand is not related to the tariff order and can be considered only by way of an amendment to the Tamil Nadu Electricity Supply Code. Hence, the Southern Railways are requested to approach the TNERC for making necessary amendment to the TNERC Supply Code.
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Recorded Maximum Demand during feed extension: 2.414 The Consumer has to meet out their demand requirement within their sanctioned demand. To maintain their recorded demand within the sanctioned demand they have to create / develop adequate infrastructure within their premises / usage areas. 2.415 The Regulations of the Commission do not have any provision to provide rebate for the development of infrastructure in the consumer area. Levy of low power factor surcharge: 2.416 The Commission has ordered to maintain the power factor at the minimum level of 0.9 to the HT consumers and 0.85 to LT consumers. The request of the Southern Railways to waive the levy of penalty to leading power factor has not been considered by the commission and the same has also been upheld by the Honble APTEL. 2.417 Hence, the request of the Southern Railways to consider the leading power factor as unity power factor is settled one. Harmonic surcharge: 2.418 TANGEDCO submits that the harmonic surcharge was made applicable vide tariff order dated 30th March 2012 and is within the purview of the Honble Commission. The detailed report on measurement of harmonics and methodology to be adopted for the same are enclosed. Metering to regeneration units 2.419 The generators are entitled to inject energy into the grid. Presently there is no provision in the Commissions Regulations / orders which permits the consumer to inject the energy into the grid as requested by the Southern Railways. Commissions View 2.420 Tax exemption for Railways is prerogative of the state Government.
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2.421 Regarding the low power factor surcharge, it is stated that the railways filed a petition MP. No. 5 of 2006 with the Commission for restoration of old system of computation of power factor. The Commission did not accept the plea of the railways in its Order dated 2-4-2007 and directed the railways to introduce the dynamic compensation system within a period of three years. Two years later Railways filed another petition MP No. 3 of 2009 pleading to permit them to adopt Lag only logic for metering and to use only static capacitor compensation for their traction sub-stations. This petition was dismissed by the Commission in its Order dated 29-6-2009. Against this Order, the railways filed a review petition RP No. 2 of 2009. The review petition was disposed of by a reasoned order on merits by the Commission in its Order dated 1-42010. The Railways preferred an appeal against Commissions Order on RP No. 2 of 2009 dated 1-4-2010. But the APTEL dismissed the Appeal No. 122 of 2010 by its Order dated 4-11-2011. Raising of the same issue by the Railways again has no meaning and serves no purpose. 2.422 The Railways have requested the Commission to defer charging of harmonics surcharge since there is no standard procedure available for measurement of harmonics. The harmonics norms have been fixed by the CEA in its Regulations notified on 21-02-2007. The Regulation specifies that the norms shall be implemented and complied with not later than 5 years from the date of publication of the regulation. Accordingly, the Commission only implemented the provision in its Order T.P. No. 1 of 2012. The measurement of harmonics has already been done jointly by Salem Steel Plant and TANGEDCO as per the norms of the CEA and this has been recognized by the Commission in its order on MP No. 22 of 2011 dated 289-2012. 2.423 The Commission approved demand charges of Rs.250/- per kVA in its earlier tariff order against Rs.300/- per kVA approved for other consumers considering the special nature of the traction load. The Commission is of the view that the Railways, request to permit 120% of the contracted demand is not supported by reasons and is not in line with the Regulations. 2.424 Regarding the net metering facilities requested for accounting of power exported from re-generative breaking, Southern Railways may approach the distribution licensee to study the proposal for implementation. The TANGEDCO and the railways are directed to assist each other and resolve the issue and this issue may be brought before the Commission. 2.425 Regarding charging of tariff on the basis of voltage wise cost to serve it is stated that the issue has been dealt with in detail separately in this order.
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A3:
FINAL TRUE-UP FOR FY 2010-11, PROVISIONAL TRUE-UP FOR FY 2011-12 AND ANNUAL PERFORMANCE REVIEW FOR FY 2012-13
TANGEDCO, in its Petition has, sought for Final Truing up of expenditure and revenue for FY 2010-11 and Provisional Truing up for FY 2011-12 based on the actual expenditure and revenue as per the Audited Accounts and Provisional Accounts respectively. It has also sought for the Annual Performance Review for the year FY 2012-13 based on information furnished by it. In this Section, the Commission has analysed all the elements of revenue and expenses for FY 2010-11, FY 2011-12 and FY 2012-13, and has undertaken the Truing up of expenses and revenue after due prudence check. This chapter summarizes the highlights of the petitions filed by Tamil Nadu Generation and Distribution Company Limited (TANGEDCO) for final true-up of FY11, Provisional true-up of FY12 and Annual Performance Review for FY13.
3.1
3.2
Energy Sales FY11 and FY12

3.3 Tamil Nadu Generation and Distribution Company Limited (TANGEDCO), in its Petition submitted the actual energy sales to various consumer categories during FY 2010-11, FY 2011-12 and FY 2012-13. In this Section, the Commission has analysed the sales and distribution loss trajectory from FY 2010-11 to FY 2012-13. On the basis of approved Distribution Loss, the Commission has approved the energy balance. The Commission in its previous Tariff Order had approved the category-wise energy sales after deducting the wheeled units and then considering the past trends in the growth of category-wise sales. TANGEDCO in its current Petition has furnished actual sales quantum for FY 2010-11 based on Audited accounts, for FY2011-12 based on Provisional accounts and for FY2012-13 based on actuals till February. The category-wise energy sales (excluding wheeling units) as approved by the Commission last year vis--vis the sales quantum filed by TANGEDCO this year for FY 2010-11 and FY 2011-12 are tabulated below.
3.4
Table 1: Comparison of category-wise sales approved in the last Tariff Order and actual as filed in this Petition (MUs) 2010-11 Particulars Approved in the last order Actual 5 months Actual 2011-12 Approved in the last Actual order
HT Consumer Category I-A I-B II-A II-B II-C HT Industries Railway Traction Govt. Educational Inst. etc. Pvt. Educational Inst. etc. Places of Public Worship 12,210 485 903 148 3 11,949 373 1,113 87 36 4,422 248 482 53 10 10,657 654 882 222 5 9,581 708 1,251 227 28
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2010-11 Particulars Approved in the last order 1,763 7 0 15,520 Actual 1,821 17 412 15,808 5 months Actual 789 11 174 6,187
III IV V
HT Commercial Lift Irrigation Supply to Puducherry and Other States Sub Total HT
2011-12 Approved in the last Actual order 1,651 1,856 6 0 14,078 6 400 14,057
LT Consumer Category I-A I-B I-C II-A Domestic Huts LT bulk supply Public Lighting and Water Supply 16,309 355 10 1,603 84 150 99 123 824 4,435 9,619 4,598 17 38,226 53,746 16,249 355 15 1,609 501 9 98 677 822 4,062 9,410 4,344 20 38,173 53,981 6,251 148 5 672 202 8 42 261 324 1,601 4,008 1,732 10 15,263 21,451 17,428 462 11 1,614 127 254 102 123 730 4,015 10,418 4,514 20 39,819 53,897 17,507 395 21 1,700 574 247 101 562 782 3,953 10,118 4,296 25 40,281 54,338
II-B-1 Govt. Educational Inst. etc. II-B-2 Pvt. Educational Inst. etc. IIC Places of Public Worship
IIIA 1 Cottage and Tiny Industries IIIA 2 Power Looms IIIB IV V VI L.T. Industries L.T. Agriculture L.T. Commercial Temporary supply Sub Total LT Total HT + LT
3.5
TANGEDCO submitted that during the 5 months period starting 1st November 2010 to March 31st 2011, the actual sales were 21,451 MUs including 174 MUs sold to Puducherry. The Commission after scrutiny of the audited accounts has approved the sales for FY 2010-11 and FY 2011-12 based on factors as noted below: Sale to Metered categories: The Commission accepts the actual sales as per the audited accounts adjusted for wheeled units for all relevant metered categories of consumers. This is in light of the R&C imposed on HT Industries and Load shedding imposed on various other categories of consumers. Further re-categorisation of a single category namely Recognised Educational Institutions was split into Government Educational Institutions and Private Educational Institutions was done in the tariff order dated 31.07.2010. Sales to Un-metered categories: From the sales figures submitted, it is observed that for Agriculture, the consumption as estimated by TANGEDCO is lower than that approved by the Commission in the last order. The
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3.6
Commission decided to accept the sales as per audited accounts for all unmetered categories. The Commission maintains its stance on disallowance of sale to Puducherry. Based on its ruling in its previous Tariff Order dated July 31, 2010. The Commission has accepted the actual sales for the 5 month period of FY 201011 as 21,451 MUs less 174 MUs (sale to Puducherry) totalling to 21,277 MUs.
Impact of Wheeling units and Cost FY 2010-11 and FY 2011-12 3.7 The Commission in its last tariff order had identified that the wheeled units were not to be included in sales and power purchase for FY 2010-11 and FY 2011-12, and based on data made available by TANGEDCO, calculated the wheeling units to be adjusted from three consumer categories namely; HT Industrial, HT Commercial and HT Private Educational institutions. TANGEDCO in its current petition has rectified this error and provided the following data for adjustment of wheeled units both in sales as well as in revenue. Therefore the total sales and corresponding revenue approved by the Commission for of FY 201011(last 5 months) and FY 2011-12 is as follows. The revenue is exclusive of subsidy.
3.8
Table 2: Total sales and revenue as approved by the Commission for FY 2010-11 (5months) and FY 201112 Particulars Total Sales as per Accounts Wheeling for HT Industries Wheeling for Private Educational Institutions Wheeling for HT Commercial Less: Total Wheeling Adjustments Total Sales without wheeling units Less: Total Sales to Puducherry Total Sales as approved FY 2010-11 MU's Rs. Crores 24,159 8,104 2,618 4 87 2,709 21,451 174 21,277 831 2 61 894 7,211 51 7,160 FY 2011-12 MU's Rs. Crores 61,387 20,003 6,750 10 289 7,049 54,338 400 53,938 2,268 5 203 2,476 17,527 123 17,404
3.9
The following table shows the category-wise sales for the last five months of FY 2010-11 and for FY 2011-12 as approved by the Commission.
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Table 3: Category wise Sales for FY 2010-11(5 months) and FY 2011-12 as approved by the Commission (MUs) FY 2010-11 Consumer Category High Tension Supply (HT) I-A I-B II-A II-B II-C III IV HT Industries Railway Traction Govt. Educational Inst. Hospitals, water supply etc. Pvt. Educational Inst., Cinema theatres & Studios Actual places of public worship, Mutts and Religious Inst. HT Commercial Lift Irrigation, Co-operative societies Sub Total HT Low Tension Supply (LT) I-A I-B I-C II-A II-B-1 II-B-2 IIC IIIA 1 IIIA 2 IIIB IV V VI Domestic Purposes Huts in Village Panchayats, TAHDCO etc. Defence Colonies etc. Notified Tariff Public Lighting and Public Water Supply & Sewerage Govt. Educational Inst., Hospitals, water supply etc. Private Educational Inst., Cinema theatres & Studios Actual places of public worship Cottage and Tiny Industries, Power Looms Coffee grinding and Ice factories etc. and Industries not covered under LT Tariff IIIA Agriculture and Govt. seed farms Commercial and all categories of Consumers not covered under IA, IB,IC, IIA, IIB, IIIA, III B and IV Temporary supply: (a) Lighting and combined installation, (b) Lavish illuminations Sub Total LT Total HT and LT 4,422 248 482 53 10 789 11 6,013 6,251 148 5 672 202 8 42 261 324 1,601 4,008 1,732 10 15,263 21,277 9,581 708 1251 227 28 1856 6 13,657 17,507 395 21 1,700 574 247 101 562 782 3,953 10,118 4,296 25 40,281 53,938 Sales FY 2011-12 Sales
3.10
TANGEDCO in its Petition has included sale of power to Puducherry. The issue of supply of power to the Union Territory of Puducherry was discussed in the Tariff Order dated 31st July 2010. This issue was discussed in para 3.2.6 of the Order. This entire paragraph is extracted below. 3.2.6 Supply to Puducherry 3.2.6.1 The Tariff petition filed by TNEB includes sale of power to the Union Territory of Puducherry and the projection for various years are as follows:
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(a) 2007-08 (b) 2008-09 (c) 2009-10 (d) 2010-11 (e) 2011-12 (f) 2012-13
393 MU 373 MU 420 MU 445 MU 471 MU 499 MU
3.2.6.2 The Commission desired to know the basis on which power is being supplied to Puducherry and sought details regarding agreement if any entered into between the two States. The TNEB has not been able to produce any agreement for sale of power to Puducherry. In this backdrop the Commission had examined the tariff orders issued by the Commission in 2003. 3.2.6.3 The position taken by Government of Puducherry during the earlier tariff determination exercise was that the tariff for supply of energy to Puducherry should be as per the Tamil Nadu Revision of Tariff Rates on Supply of Electrical Energy Act, 1978 and the supply shall be charged at the rates supplied by NLC to the TNEB plus wheeling charge at 10 Paise per KWh plus 4% on the energy wheeling towards transmission loss. The State of Puducherry also disputed the jurisdiction of the TNERC to decide the tariff for Puducherry. The TNEB had expressed a view that the agreement between TNEB and NLC is a bilateral agreement and the Government of Puducherry is not a party to this agreement. Since the cost of supply at the HT end worked out to 303.69 paise, they proposed to continue charging Puducherry @ Rs.3.00 per kWh under HT Tariff V. The Commission maintained status quo and continued the then prevailing tariff of Rs.3 per kWh. 3.2.6.4 Since the Joint Electricity Regulatory Commission for the State of Goa and Union Territory of Puducherry had issued an order on ARR and Retail tariff for the electricity department, Government of Puducherry for the financial year 2009-10 on 5-2-2010 the Commission had examined that order too and the relevant portion with reference to sale of power by TNEB to Puducherry is extracted below: In respect of purchase of power from TNEB the EDP has submitted that initially the power availed from TNEB was charged at the rate paid by TNEB to NLC plus wheeling charges. The TNEB has revised the tariff to Rs.3.00per kwh with effect from 01/12/2001 treating EDP as a HT consumer. The EDP has challenged this decision by filing a petition before Honble TNERC. The Honble TNERC concluded that the sale of power between EDP and TNEB was in the nature of interstate sale of power and EDP cannot be treated as a HT consumer and ordered to maintain status quo. The EDP has challenged this in the Honble High Court of Judicature at Madras and stay was granted and the Hon High Court directed payment to TNEB at the rate charged by NLC plus wheeling charges. The EDP made the payment accordingly. The main issue is yet to be decided.
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3.2.6.5 The Commission would like to observe that in the absence of firm sale contract between TNEB and the Government of Puducherry and with the ever increasing sale of electricity to Puducherry by the TNEB, a situation is being created which has resulted in the TNEB subsidizing the electricity consumers of Puducherry at the expense of electricity consumers of Tamil Nadu. Currently, the TNEB itself is facing an acute shortage of power and has been purchasing power in the open market in the range of Rs. 5 to 7 per unit. Whereas the sale to Puducherry is at the rate of Rs.1.94 per unit. TNEB needs to protect the electricity consumers of Tamil Nadu. 3.11 The Commission understands that a case is pending before the Honble High Court of Madras and the TANGEDCO is supplying power to Puducherry at the rate of Rs.3.28 per unit (Rs.3.18 NLC TS-1 rate fixed by CERC and 10 paise for wheeling charges). Under these circumstances, the Commission has no other choice but to consider the transaction with Puducherry as outside the purview of this Tariff Order. For doing this, the Commission will consider the total energy sales to Puducherry grossed by the transmission loss for reduction in the total power purchase. Further, corresponding to the energy actually supplied to Puducherry at the Tamil Nadu interface point, revenue will not be taken into account for the purpose of Annual Revenue Requirement. The Commission hopes that this issue will be settled at the earliest, once the Order of the Honble High Court of Madras in this issue becomes available. Hence, Commission has not considered the sale of power to Puducherry. In addition, Commission has not considered wheeled units in sales estimate. The Commission has approved sales quantum of 21,277 MUs for FY 2010-11 (5months) and 53,938 MUs for FY 2011-12.
3.12
Energy Sales FY 2012-13

3.13 TANGEDCO in its petition projected sales for 2012-13 based on actual sales for 6 months upto September 2012. Responding to data gaps, TANGEDCO furnished actual sales for the year till February 2013. The table below captures the sales as approved by the Commission in the last Tariff order, sales as filed by TANGEDCO in its petition and the actual sales furnished by TANGEDCO in its reply to data gaps.
Table 4: Comparison of category-wise sales approved in the last Tariff Order, as filed in their Petition and actual submitted for FY 2012-13 (MUs) 2012-13 Particulars HT Consumer Category I-A I-B II-A II-B II-C III HT Industries Railway Traction Govt. Educational Inst. etc. Pvt. Educational Inst. etc. Places of Public Worship HT Commercial 13,545 726 882 243 5 1,908 7,944 758 1,038 256 6 1,837 7,111 709 903 224 1,312 Approved in the last order Petition Revised filing
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2012-13 Particulars IV V VI Lift Irrigation Supply to Puducherry and Other States Temporary supply Total HT LT Consumer Category I-A I-B I-C II-A II-B-1 II-B-2 IIC IIIA 1 IIIA 2 IIIB IV V VI Domestic Huts LT bulk supply Public Lighting and Water Supply Govt. Educational Inst. etc. Pvt. Educational Inst. etc. Places of Public Worship Cottage and Tiny Industries Power Looms L.T. Industries L.T. Agriculture L.T. Commercial Temporary supply Total LT Total HT + LT 18,252 617 11 1,625 127 254 102 126 730 4,015 10,601 5,066 20 41,546 58,861 18,934 473 12 1,905 139 276 113 143 831 4,913 9,707 5,421 24 42,891 55,155 17,540 425 10 1,652 109 192 93 134 713 4,280 11,089 4,841 36 41,114 51,948 17,315 Approved in the last order 6 Petition 6 413 5 12,263 Revised filing 4 408 165 10,835
3.14
The steep decrease in actual consumption in FY 2012-13 over what was approved by the Commission last year can be attributed to the severe energy shortage in the state which led to imposing of additional R&C measures and Load shedding. This in turn has further led to consumers procuring energy through open access. The percentage change in category-wise actual sales as of FY 2012-13 over that of FY 2011-12 is as follows:
3.15
Table 5: Growth rate of sales in FY 2012-13 over the actual sales of FY 2011-12 Particulars HT Consumer Category I-A I-B II-A II-B II-C HT Industries Railway Traction Govt. Educational Inst. etc. Pvt. Educational Inst. etc. Places of Public Worship 9,581 708 1,251 227 28 7,111 709 903 224 -26% 0% -28% -1% 2011-12 MUs 2012-13 MUs % growth
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Particulars III IV V VI HT Commercial Lift Irrigation Supply to Puducherry and Other States Temporary supply Total HT LT Consumer Category I-A I-B I-C II-A II-B-1 II-B-2 IIC IIIA 1 IIIA 2 IIIB IV V VI Domestic Huts LT bulk supply Public Lighting and Water Supply Govt. Educational Inst. etc.* Pvt. Educational Inst. etc. Places of Public Worship Cottage and Tiny Industries* Power Looms L.T. Industries L.T. Agriculture L.T. Commercial Temporary supply
2011-12 MUs 1,856 6 13,657 17,507 395 21 1,700 574 247 101 562 782 3,953 10,118 4,296 25 40,281
2012-13 MUs 1,312 4 408 165 10,835 17,540 426 10 1,652 109 192 93 134 713 4,280 11,089 4,841 36 41,114
% growth -29% -33% -24% 0% 8% -52% -3% -81% -22% -8% -76% -9% 8% 10% 13% 44% 2%
Total LT *The sales needs to be verified with the audited account for FY 2012-13
3.16
Metered categories: The Commission has accepted the actual sales for all metered categories for FY 2012-13 as submitted by TANGEDCO in its reply to data gaps. As treated in the previous years, sales to Puducherry have not been allowed by the Commission for the year FY 2012-13 as well. Un-metered categories: TANGEDCO furnished the following information regarding sales to Hut and Agricultural consumption. Hut category (LT I-B): In its reply to the data gaps identified by the Commission, TANGEDCO submitted the revised details towards Hut consumption for FY 2012-13. The Commission observed that TANGEDCO has furnished its calculation of 426 MU, towards hut consumption on the basis of certain assumptions which are not in conformity with the Government Order (G.O.).Ms. No.2 dated 03-06-2011 issued by GoTN. Therefore the Commission recalculated consumption based on the details in the above mentioned G.O. The Commission has considered the wattage as specified by the GoTN and the hours of use as considered by TANGEDCO. Data furnished by TANGEDCO on the number of huts to which specific
3.17
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electrical appliances were distributed, has been considered by the Commission to arrive at consumption. The total quantum of huts was kept equal to that of FY 2011-12 in the wake of a decreasing trend in number of hut connections from FY 2010-11 onwards.
Table 6: Hut consumption as re-estimated by the Commission for FY 2012-13 Sl. No. 1 2 3 4 5 6 7 Appliance type Light TV CF Lamp Mixie Grinder Fan RGGVY Huts Total Consumption Numbers 1,367,171 859,690 89,044 267,741 267,817 256,390 373 Wattage 40.00 70.00 11.00 550.00 300.00 61.00 40.00 Hours 6.00 10.00 6.00 0.50 2.00 12.00 12.00 Days 365.00 365.00 365.00 365.00 156.00 365.00 365.00 Consumption (MUs) 119.76 219.65 2.15 26.87 25.07 68.50 0.07 462
Agricultural category (LT IV): In its reply to data gaps identified by the Commission, TANGEDCO submitted the revised details of Agricultural consumption for FY 2012-13. The Commission observed that there was a significant downward revision in the number of agricultural service connections submitted in comparison to data in Form F-2 (Sales) of the petition. The revised agricultural load in HP at the end of the year had only increased marginally. However TANGEDCO increased its estimate of agricultural consumption by 1,382 MUs, i.e. from 9,707 MUs to 11,089 MUs. The Commission re-estimated the agricultural consumption based on the average capacity of pumpset in the middle of the year as calculated below. The data on actual additional connections given as well as corresponding increase in load as submitted by TANGEDCO in its reply to data gaps has been considered. It has been assumed by the Commission that 50% of the connections and corresponding capacity would get added in the first half of the year. The average consumption in kWh/ HP has been capped at the level as it stood for FY 2011-12 based on the 5% sample study data submitted last year at 923 units. Based on the above assumptions the agricultural consumption for the year FY 2012-13 has been estimated as 10,206 MUs by the Commission. Based on the average consumption per HP/ Annum as per the 5% sample data for FY 2012-13, TANGEDCO has estimated the annual consumption as 11,089 MUs. The Commission has calculated the average hours of daily supply to agricultural consumers based on this data. It was noticed that the average hours of daily supply for FY 2012-13 worked out to be higher than that of FY 2011-12. The Commission opines that this situation is improbable given the facts that the year 2012-13 saw higher shortage of power as compared to the previous year as well as that 2012-13 was a drought year. Given that additional connection to the tune of 15,539 were given in the State during the year, it is evident that the 5% sample data for FY 2012-13 cannot
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be considered for estimating annual consumption. Hence the Commission did not take into consideration the 5% sample study data submitted for FY 201213.
Table 7: Agricultural consumption as re-estimated by the Commission for FY 2012-13 Sl. No. 1 2 3 4 5 6 7 8 9 YoY Increase % added in the first half No. of service connections in the middle of the year Connected load in HP at the end of the year YoY Increase Connected load in HP at the middle of the year Average capacity of pumpset in HP at the middle of the year ( 6 / 3 ) Average consumption in KWh /HP / Annum Consumption in MUs ( 3 x 7 x 8 ) Particulars No. of service connections at the end of the year 2012-13 2,036,898 15,539 50.0% 2,029,129 11,084,004 54,545 11,056,732 5.45 923 10,206
3.18
The following table shows the category-wise sales approved by the Commission for FY 2012-13 based on revised sales estimates.
Table 8: Sales for FY 2012-13 approved by the Commission (MUs) Particulars HT Consumer Category I-A I-B II-A II-B III IV V HT Industries Railway Traction Govt. Educational Inst. etc. Pvt. Educational Inst. etc. HT Commercial Lift Irrigation Temporary supply Total HT LT Consumer Category I-A I-B I-C II-A II-B-1 II-B-2 IIC IIIA 1 Domestic Huts LT bulk supply Public Lighting and Water Supply Govt. Educational Inst. etc. Pvt. Educational Inst. etc. Places of Public Worship Cottage and Tiny Industries 17,540 462 10 1,652 109 192 93 134 7,111 709 903 224 1,312 4 165 10,427 Sales
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Particulars IIIA 2 IIIB IV V VI Power Looms L.T. Industries L.T. Agriculture L.T. Commercial Temporary supply Total LT Total HT + LT
Sales 713 4,280 10,206 4,841 36 40,268 50,695
3.19
Therefore the sales for FY 2012-13 as approved by the Commission are 50,695 MUs as against 51,948 MUs filed by TANGEDCO.
Energy Availability
3.20 TANGEDCO meets its energy requirements from its own generating stations, purchases from central generating stations, IPPs and other sources. TANGEDCO in its Petition submitted the details of energy availability from FY 2010-11 to FY 2012-13 based on the actual energy available during the period. The submission for FY 2010-11 is based on audited accounts while the submission for FY 2011-12 is based on provisional accounts. For FY 2012-13, TANGEDCO extrapolated the availability on the basis of actual energy available for first half of the financial year. Accordingly Commission in this Section has analyzed the performance of TANGEDCOs own generating stations. In addition for the period FY 2010-11 to FY 2012-13, the energy availability from Own Generating stations as well as from other sources is discussed. The availability of energy is discussed source wise in the following order: 1 Own Generation 2 Thermal Generation Hydro Generation Wind Generation New generating stations Central Generating Stations IPPs Captive/Cogeneration and Non-Conventional energy sources Other sources such as Trading Bilateral & Exchange, NTPC NVVN and UI
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3.21
3.22
Other Sources
Own Generation 3.23 The total installed capacity of generating stations of TANGEDCO as on March 2013 was 5792 MW. The detailed break up of generation capacity of TANGEDCO stations is as tabulated below:
Table 9: Installed capacity of existing TANGEDCO stations (As on March 2013) Name of the power plant Coal based generating stations Ennore Thermal Power Station (ETPS) Tuticorin Thermal Power Station (TTPS) Mettur Thermal Power Station (MTPS) North Chennai Thermal Power Station (NCTPS) Sub total Gas based generating stations Tirumakottai Gas based Power Station (TGTPS) Kuttalam Gas based Power Station (KGTPS) Valuthur - Unit 1 Gas based power station (VGTPS 1) Valuthur - Unit 2 Gas based power station (VGTPS 2) Basin Bridge Gas turbine power station (BBGTPS) Sub total Hydro Generating Circles Kundah Hydro Generating Circle Kadamparai Hydro Generating Circle Erode Hydro Generating Circle Tirunelveli Hydro Generating Circle Sub Total Wind Energy - Tirunelveli and Udumalpet Total Installed capacity (in MW) 450 1050 840 630 2970 108 101 95 92 120 516 833 595 504 356 2289 17 5792
Thermal generation 3.24 The operational performance parameters such as plant load factor and auxiliary consumption approved by the Commission in the last tariff order and claimed by TANGEDCO in its current MYT petition are tabulated below.
Table 10: Plant load factor of own generating stations Name of the power plant ETPS TTPS MTPS NCTPS TGTPS Approved in last tariff order (March 30, 2012) 2010-11 35.42% 77.33% 82.42% 81.74% 68.74% 2011-12 25.81% 84.87% 92.40% 87.54% 64.55% 2012-13 20.28% 82.43% 89.01% 86.95% 68.75% Submitted by TANGEDCO in MYT Petition 2010-11 35.40% 77.30% 82.42% 81.74% 68.74% 2011-12 22.65% 85.57% 92.77% 84.81% 74.47% 2012-13 23.43% 83.20% 83.85% 86.27% 75.85%
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Name of the power plant KGTPS BBGTPS VGTPS - 1 VGTPS 2
Approved in last tariff order (March 30, 2012) 2010-11 19.29% 4.93% 67.54% 0% 2011-12 72.45% 5.71% 67.29% 55.22% 2012-13 71.20% 5.75% 78.50% 78.30%
Submitted by TANGEDCO in MYT Petition 2010-11 19.51% 4.93% 67.59% 2011-12 46.58% 2.81% 78.94% 56.16% 2012-13 12.80% 0.51% 49.12% 53.84%
Table 11: Auxiliary consumption of own generating stations Name of the power plant ETPS TTPS MTPS NCTPS TGTPS KGTPS BBGTPS VGTPS - 1 VGTPS 2 Approved in last tariff order (March 30, 2012) 2010-11 15.78% 8.31% 8.51% 8.89% 6.19% 6.83% 0.62% 5.52% 2011-12 16.32% 10.11% 8.31% 4.35% 6.00% 6.67% 0.30% 5.87% 5.84% 2012-13 15.00% 8.50% 9.00% 8.50% 6.00% 6.00% 3.43% 6.00% 6.00% Submitted by TANGEDCO in MYT Petition 2010-11 15.78% 8.28% 8.30% 8.70% 6.87% 7.28% 0.65% 5.90% 2011-12 16.70% 7.98% 8.26% 8.36% 6.50% 7.32% 0.57% 7.00% 7.00% 2012-13 15.00% 8.50% 8.34% 8.40% 5.97% 6.00% 0.99% 5.91% 6.40%
3.25
TANGEDCO in its petition submitted the actual PLF and Auxiliary consumption for FY 2011 and FY 2012. For FY 2013 TANGEDCO submitted estimates based on first half year performance. The Commission observed that the actual PLFs submitted for all coal based power stations except for ETPS are above 80% and in accordance with the Commissions approved figures in the last order. However, it was observed that for the gas based stations the PLFs were lower than the approved norms. TANGEDCO in its Petition submitted the following reasons for low PLF of its power plants KGTPS i. KGTPS was under shut down from 18th July 2010 to 26th May 2011 due to removal of Gas Turbine Generator stator for replacement of failed stator at VGTPS-I/Ramnad. This decision was taken in order to avoid Minimum Guaranteed Off-Take charges (MGO) payable at Valuthur for non-utilization of gas at Ramnad Zone. The unit was again shut down from 22nd February 2012 to February 2013 due to failure of compressor blades in gas turbine rotor. Also, the unit was not able to be re-commissioned as per envisaged schedule due to diversion of materials procured /refurbished for re-commissioning of KGTPS to VGTPS-I in order to avoid minimum guarantee offtake charges payable at VGTPS-1.
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3.26
3.27
ii.
NCTPS i. Unit I, The unit was taken off Bars on 21st January 2012 due to Hydrogen gas leakage in the Generator Stator water system. After completion of the works, the Unit was put back into service on 19th March 2012. Unit II, The unit was hand tripped on 20th February 2012 for Emergency Shut down due to Turbine Axial shift high on Positive side. After completion of the works, the Unit was put back into service on 03rd March 2012.
ii.
MTPS The lower PLF of MTPS in FY 2012-13 was mainly due to the major fire accident that occurred in the coal handling system at MTPS on 10th May 2012 resulting in forced outage of all the four Units. After reconstruction works of the damaged Coal handling system the system was put back into service within 15 days and full generation was resumed at MTPS by the end of May12. VGTPS -1 i. The unit was under shutdown from 11th March 2012 to 02nd May 2012, due to vibration in GT rotor The unit tripped again on 26th June 2012 but could not be put back into service due to heavy internal damages in GT rotor. The unit was recommissioned on 17th October 2012 by diverting the materials procured for re-commissioning of KGTPS.
ii.
VGTPS -2 i. The unit, which was under shut down from 9th January 2010 to 7th May 2011 due to high vibrations and heavy internal damages, was under stabilization till the end of July 2011 due to teething problems such as Gear Box vibration leakage in Blow off Valve HP Economizer Valve etc. Even after attending these problems by OEM, full load could not be reached due to Choking of Air Filters. The defective Air Filters were replaced by new filters on 15th April 2012. The plant was under shut down from 27th April 2012 to 04th May 2012 for Boiler License renewal. The unit again tripped on 30th June 2012 due to activation of surge protection relay which was activated due to sudden dip in frequency. Subsequently, Steam Turbine Generator got tripped. After normalization, the GT could not be started due to failure of bearing in Inlet Guide Vane (IGV). This unit was re commissioned on 14th August 2012 by importing IGV and put into service.
ii.
iii.
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3.28
However, Commission has observed that net generation submitted by TANGEDCO is not in accordance with the PLFs and auxiliary consumption submitted for FY 2010-11 and FY 2011-12. The net generation submitted by TANGEDCO from FY 2010-11 to FY 2012-13 is as given below:
3.29
Table 12: Net own generation submitted by TANGEDCO (in MUs) Name of the power plant ETPS TTPS MTPS NCTPS TGTPS KGTPS BBGTPS VGTPS Total Approved in last tariff order (March 30, 2012) 2010-11 490 2718 2312 1713 254 65 22 221 7795 2011-12 851 7018 6234 4621 650 457 44 1093 20968 2012-13 680 6938 5960 4391 611 592 58 1207 20437 Submitted by TANGEDCO in MYT Petition 2010-11 505 2648 2402 1868 271 0 39 302 8035 2011-12 744 7262 6279 4301 660 383 29 1027 20686 2012-13 785 7002 5655 4361 674 106 5 792 19381
3.30
Commission asked TANGEDCO to clarify the anomalies in energy availability calculations. In response, TANGEDCO has revised the PLFs in accordance to the gross generation and also submitted net generation details. The revised PLFs submitted by TANGEDCO and auxiliary consumption calculated by the Commission based on the revised data submitted by TANGEDCO are tabulated below:
3.31
Table 13: Revised PLFs and auxiliary consumption for thermal plants submitted by TANGEDCO Name of the power plant Revised PLFs Auxiliary Consumption
2010-11 2011-12 2010-11 2011-12 ETPS 36.76% 22.61% 18.74% 20.05% TTPS 75.88% 85.57% 9.03% 8.67% MTPS 86.06% 92.77% 9.05% 9.00% NCTPS 89.61% 84.81% 9.53% 9.12% TGTPS 74.45% 74.48% 7.38% 6.94% KGTPS 0.00% 46.58% 0.00% 7.90% BBGTPS 8.98% 2.81% 0.65% 1.96% VGTPS - 1 93.08% 78.93% 6.27% 7.53% VGTPS 2 0.00% 56.10% 0.00% 7.53% Note: Infirm power already included in the existing thermal stations
3.32
Also in response to additional data required, TANGEDCO has submitted the actual generation in FY 2012-13 (upto February 2013) with respect to own generating stations.
Page 89 June 2013
Table 14: Actual generation in FY 2012-13 (Upto February 2013) Submitted by TANGEDCO Name of the power plant ETPS TTPS MTPS NCTPS TGTPS KGTPS BBGTPS VGTPS 1 VGTPS 2 Total Actual generation (Upto February 2013) in MUs 555.10 6904.76 5139.54 4248.93 627.79 7.283 0.41 361.34 407.31 18252.46
3.33
From the submissions made, it is observed that Plant Load Factor for almost all the plants was in accordance with the Commission approved norms without any major deviation except for KGTPS, MTPS (in FY 2013) and VGTPS (in FY 2013). The auxiliary consumption achieved by most of TANGEDCO generating plants is in line with auxiliary consumption numbers approved by the Commission in its Tariff Order dated 30th March 2012. In view of the reasons cited for lower PLFs by TANGEDCO and the fact that FY 2010-11 and FY 2011-12 are already over, the Commission decided to accept the PLFs and Auxiliary consumption numbers as submitted by TANGEDCO in its petition, for computation of energy availability. For FY 2012-13, the Commission projected net generation from thermal stations by considering the actual generation details (Upto February 2013) submitted by TANGEDCO. However variable charges will be calculated considering approved auxiliary consumption as per last tariff order and allocation of capacity charges will be done in accordance with regulation-37 of TNERC tariff regulations, 2005. The summary of energy availability submitted by TANGEDCO and approved by the Commission in this order for existing TANGEDCO thermal stations is tabulated below:
3.34
3.35
Table 15: Summary of energy availability TANGEDCO thermal stations (MUs) Name of the power plant ETPS TTPS MTPS NCTPS TGTPS KGTPS BBGTPS VGTPS Total FY 2010-11 Last TO Petition 490 2718 2312 1713 254 65 22 221 7795 505 2648 2402 1868 271 0 39 302 8035 FY 2011-12 FY 2012-13
Commissi Commis Commissi Last TO Petition Last TO Petition on sion on 505 851 744 744 680 785 610 2648 7018 7262 7262 6938 7002 7620 2402 6234 6279 6279 5960 5655 5684 1868 4621 4301 4301 4391 4361 4634 271 650 660 660 611 674 682 0 457 383 383 592 106 51 39 44 29 29 58 5 0.41 302 1093 1027 1027 1207 792 879 8035 20968 20685 20685 20437 19381 20160
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Hydro Generation Circles 3.36 In the last order Commission has approved the hydro generation excluding the generation from Kadamparai PSHES. Also, Commission has considered the net energy available on account of Kadamparai PSHES in FY 2010-11 and FY 2011-12. TANGEDCO as well in line with Commissions order has filed the actual generation in FY 2010-11 (From November 2010) and FY 2011-12 without considering the generation from Kadamparai PSHES. For projecting the hydro generation for FY 2012-13, TANGEDCO has assumed a PLF of 25%. The hydro generation approved by the Commission and filed by TANGEDCO is tabulated below.
3.37
3.38
Table 16:Comparison between hydro generation approved in last order with TANGEDCO filing in MUs Name of the power plant Net Hydel Gen. on account of hydro plants excluding Kadamparai FY 2010-11 Last TO 1881 Petition 2175 FY 2011-12 Last TO 4701 Petition 4823 FY 2012-13 Last TO 5242 Petition 3544
3.39
The PLFs and auxiliary consumption provided by TANGEDCO were not in line with the net generation submitted for FY 2010-11 to FY 2012-13. In response to data gaps TANGEDCO has revised the PLFs and auxiliary consumption for its hydro generating circles corresponding to net generation.
Table 17: Revised PLFs and auxiliary consumption for hydro generation circles submitted by TANGEDCO Name of the power plant Erode Kundah Tirunelveli Revised PLFs 2010-11 31.01% 33.69% 29.22% 2011-12 35.74% 33.70% 31.31% Auxiliary Consumption 2010-11 0.53% 0.53% 0.53% 2011-12 0.55% 0.50% 0.48%
3.40
In reply to additional information asked for, TANGEDCO submitted that the actual generation excluding Kadamparai PSHES in FY 2012-13 was 2576 MUs. It can be observed that the hydro generation in FY 2012-13 was significantly lower than Commission approved generation of 5242 MUs. TANGEDCO submitted that this significant reduction in hydro generation is due to less rainfalls resulting into drought in FY 2012-13. Based on the submissions made and the approach adopted in the last tariff order, Commission is accepting the submission of TANGEDCO for the purpose of energy availability.
3.41
Page 91 June 2013
Table 18: Summary of energy availability Hydro generation circles in MUs Name of the power plant FY 2010-11 Last Petitio Commiss TO n ion 1881 2175 2175 FY 2011-12 Last Petitio Commiss TO n ion 4701 4823 4823 Last TO 5242 FY 2012-13 Petitio Commiss n ion 3544 2576
Net Hydel Gen. on account of hydro plants excluding Kadamparai
3.42
For Kadamparai PSHES, in the last tariff order Commission has approved the additional energy required. Accordingly, TANGEDCO has filed the additional energy required for Kadamparai PSHES based on actual energy requirement for FY 2010-11 and FY 2011-12.
Table 19: Kadamparai Generation and power consumption in MUs
Particulars
Kadamparai - Gen Kadamparai Pump mode Net Energy Required
FY 2010-11 (From Nov 2010) Last TO Petition 237 290 255 332 18 42
FY 2011-12 Last TO 489 508 19 Petition 506 534 28
FY 2012-13 Last TO Petition 533 561 28
31
3.43
TANGEDCO has filed the additional energy required for Kadamparai PSHES based on actual energy requirement for FY 2010-11 and FY 2011-12 and projected the energy requirement for FY 2012-13 based on Commissions methodology. In response to additional information sought for, TANGEDCO has provided the actual energy requirement for Kadamparai PSHES for FY 2012-13. Based on the submission Commission is accepting the additional energy requirement for Kadamparai PSHES.
Table 20: Kadamparai Generation and power consumption in MUs Particulars FY 2010-11 (From Nov 2010) Petition Commission FY 2011-12 Petition Commission FY 2012-13 Petition Commission
Additional energy required for Kadamparai PSHES
42
42
28
28
28
26
Wind Generation 3.44 The Commission in Previous Tariff Order approved net generation of 13 MU for FY 2010-11 and 11 MU in FY 2011-12 and in FY 2012-13 corresponding to 17.55 MW installed capacity of wind mills owned by TNEB. TANGEDCO in its Petition submitted that it has an installed capacity of 17.55 MW and the net available energy from Wind Mills from FY 2010-11 to FY 2012-13 as submitted by TANGEDCO is tabulated below:
3.45
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Table 21: Net Energy available from wind in MUs - TANGEDCO Submission Particulars Wind Generation FY 2010-11 1 FY 2011-12 12 FY 2012-13 28
3.46
Commission has considered the actual wind energy generation for FY 2010-11 and FY 2011-12 as submitted by TANGEDCO. For FY 2012-13, in response to additional information required, TANGEDCO has provided the details of energy generation from its own wind mills and the same has been considered by the Commission.
3.47
Table 22: Energy available from wind mills in FY 2010-11 November to March (MUs) Particulars Wind Generation Last order 5 Petition 1 Commission 1
Table 23: Energy available from wind mills in FY 2011-12 (MUs) Particulars Wind Generation Last order 11 Petition 12 Commission 12
Table 24: Energy available from wind mills in FY 2012-13 (MUs) Particulars Wind Generation Last order 11 Petition 28 Commission 13
New Generating Stations 3.48 In the last tariff order, for new upcoming units, i.e., NCTPS (Stage-II, Unit-1 and 2) and MTPS (Stage-III), the Commission considered PLF as 80% during FY 2012-13 in accordance with Clause-37 of TNERC Tariff Regulations, 2005. In addition Commission has approved the auxiliary consumption of 8.50% for NCTPS stage II and 9.00% for MTPS stage III. Commission has approved generation from new thermal stations considering CoD of 31st March 2012 for MTPS Stage III, 15th June 2012 for NCTPS Stage-II (unit 2) and 15th October 2012 for NCTPS stage-II (unit 1). However, these units did not achieve commissioning as envisaged in the last tariff order. TANGEDCO in its Petition has submitted revised CoD for these stations as 1st March 2013 for MTPS Stage III, 1st April 2013 for NCTPS Stage-II (unit 2) and 1st May 2013 for NCTPS stage-II (unit 1). TANGEDCO has stated the following reasons for delay in commission of these new stations
3.49
3.50
3.51
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MTPS Stage III (Unit-1) i. Commissioning was delayed due to delay in coal handling, ash handling, milling system and bunkers erection, etc. The contract has been extended up to 31st March 2013 in order to facilitate the commissioning. The unit was synchronized with oil on 4th May 2012 and achieved a full load capacity of 608 MW on 11th October 2012. The initial operation of the unit was under progress from 23rd November 2012 to 04th December 2012. However the unit was under forced shut down from 04th December 2012 to attend to few technical problems that were encountered during the period of initial operation.
ii.
NCTPS Stage II (Unit-1 & 2) i. 3.52 Commissioning was delayed due to delay in Coal Handling System, Cooling water system, Ash handling system etc.
Though TANGEDCO has submitted a revised CoD of MTPS stage III to be 1st March 2013 in its petition and projected 236 MUs, the unit did not achieve commissioning. Accordingly Commission has not considered any energy availability from these new generating stations in FY 2012-13:
Table 25: Energy availability on firm basis in FY 2012-13 from new thermal stations - in MUs Name of the Power Station Last order Petition MTPS Stage III 3428 236 NCTPS Stage II (Unit-1) 1760 0 NCTPS Stage II (Unit-2) 3030 0 Note: Infirm power already included in the existing thermal stations Commission 0 0 0
Power Purchase from other sources 3.53 TANGEDCO in its Petition has included power purchase quantum from the following sources: i. ii. iii. iv. 3.54 Central Generating Stations (CGS) Independent Power Producers (IPPs) Captive/Cogeneration and Non-Conventional energy sources Other sources such as Trading Bilateral & Exchange, NTPC-NVVN and UI In the last tariff order Commission has estimated the energy availability for FY 201011 and FY 2011-12 based on the actual energy availability data submitted by TANGEDCO upto December 2011. For the new additions of CGS the Commission estimated the energy availability based on the CoD dates submitted by TANGEDCO.
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3.55
Similarly in case of IPPs, captive and non conventional energy sources, Commission adopted the following approach for estimation of energy availability i. Commission allowed the actual power purchase from IPPs in FY 2010-11 and FY 2011-12 while in FY 2012-13 Commission has allowed the power purchase from IPPs based on merit order dispatch For estimating the energy availability from captive and non conventional energy sources, Commission has not considered wheeling units and has considered only the energy directly purchased from Wind, CPP, Cogeneration and Biomass plants. TANGEDCO in its current Petition has submitted the energy availability for FY 2010-11 and FY 2011-12 based on actual energy purchased and in accordance with the approach adopted by the Commission in its last order. For FY 2012-13, TANGEDCO has projected the energy availability based on energy availability during the first half of FY 2012-13.
ii.
3.56
Table 26: Energy availability from other sources as submitted by TANGEDCO in MUs Name of the Power Station Central Generating Stations IPPs Captive and Non conventional energy sources Trading, UI and NTPC-NVVN Total FY 2010-11 8528 2923 498 5643 17592 FY 2011-12 20630 5731 10040 7618 44018 FY 2012-13 22755 5633 8347 10510 47245
3.57
On preliminary scrutiny of the actual power purchase data from Captive sources, NCES and Trading, it was observed that the wheeling units adjustment was not done properly in FY 2011-12. The wheeling units on account of captive consumers and wind consumers have been accounted in purchase from trading. In response to data gaps, TANGEDCO submitted the revised power purchase from these sources after correctly accounting for wheeling units based on audited accounts.
Table 27: Revised submission of TANGEDCO after adjusting wheeling units (FY 2011-12) - in MUs Source Captive Wind Trading (Bilateral) Initial Submission 2778 5893 5174 Revised Submission 557 5711 7395
3.58
Commission is accepting the submission of energy availability of TANGEDCO for FY 2010-11 and FY 2011-12 based on the fact that submission for FY 2010-11 is based on energy purchase and for FY 2011-12 the numbers were revised as per the approach adopted by Commission in its last order. In response to additional information required, TANGEDCO has submitted the provisional estimate of actual purchase from these sources in FY 2012-13.
3.59
Page 95 June 2013
Table 28: Provisional estimate of actual power purchase in 2012-13 by TANGEDCO - in MUs Name of the Power Station Central Generating Stations IPPs Captive and Non conventional energy sources Other sources Total FY 2012-13 21567 5971 9195 7051 43785
3.60
For FY 2012-13, Commission approves the energy availability based on provisional estimate of actual power purchase data submitted by TANGEDCO. The summary of power purchase from other sources approved by the Commission is tabulated below:
Table 29: Summary of approved energy availability from other sources in MUs Name of the Power Station FY 2010-11 Central Generating Stations IPPs Captive and Non conventional energy sources Other sources Total FY 2011-12 Central Generating Stations IPPs Captive and Non conventional energy sources Other sources Total FY 2012-13 Central Generating Stations IPPs Captive and Non conventional energy sources Other sources Total Last Order 8413 2894 2851 4992 19150 20875 5982 6965 10150 43972 26436 7020 7259 2000 42715 Petition 8528 2923 498 5644 17593 20630 5731 10040 7618 44018 22755 5633 8347 10510 47245 Commission 8528 2923 498 5644 17593 20630 5731 7637 9838 43836 21567 5971 9195 7051 43785
Total energy available from all sources 3.61 Based upon the above discussion in respect of individual sources, the total energy available from all sources as submitted in the Petition and as approved in the Order is tabulated below:
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Table 30: Summary of energy available from all sources in FY 2010-11 (From November 2010) - in MUs Source Own Generating Stations Coal Based Power Plants Ennore Thermal Power Station Tuticorin Thermal Power Station Mettur Thermal Power Station North Chennai Thermal Power Station Sub Total Gas Based Power Plants Tirumokottai Kovilkalappal Gas Power Plant Kuttalum Gas Power Plant Vallathur Gas Power Plant Basin Bridge Gas Power Plant Sub Total Hydro Generation Circles* Erode Hydro Generation Circle Kundah Hydro Generation Circle Tirunelveli Hydro Generation Circle Kadamparai Hydro generation circle Wind Mills Sub Total - Existing Stations New Stations North Chennai TPS Stage - II Mettur Stage - III Ennore Expansion Sub Total Total - Own Generation Central Generation Stations NTPC SR (I&II) NTPC SR III NLC TS - I NLC TS - II NLC TS I Expansion NTPC Talcher NTPC Simhadri MAPS KAIGA NTPC Kayakulum NTPC ER NTPC Dadri NTPC Vallur Kudankulum 1683 427 1278 1268 629 1527 0 583 358 356 306 0 0 1658 449 1213 1244 631 1542 0 591 454 343 402 1658 449 1213 1244 631 1542 0 591 454 343 402 0 0 0 0 9681 0 10211 0 10211 5 9681 1 10211 1 10211 1881 2175 2175 254 65 221 22 563 271 0 302 39 611 271 0 302 39 611 490 2718 2312 1713 7232 505 2648 2402 1868 7424 505 2648 2402 1868 7424 Last Tariff Order Petition Commission
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Source NLC TS - II Expansion NLC - Tuticorin Sub Total IPPs GMR Samalpatti PPN Madurai ST-CMS ABAN Penna Sub Total CPP and Renewable Energy Sources Captive Wind ** Biomass Cogeneration Solar Sub Total Other Sources Trading - Bilateral & Exchange UI NTPC NVVN Sub Total Total - Other Power Purchase Grand Total
Last Tariff Order 0 0 8413 365 158 1040 147 689 342 154 2894 192 2193 46 415 1 2851 4392 600 4992 19150 28832
Petition
Commission
8528 393 179 1072 168 606 357 148 2923 218 -148 38 388 2 498 4703 759 182 5644 17593 27804
8528 393 179 1072 168 606 357 148 2923 218 -148 38 388 2 498 4703 759 182 5644 17593 27804
*Net Hydro generation is shown without considering power generated from Kadamparai PSHES **Actual wind generation shown is net of wheeling unit adjustment. Negative indicates that wheeling units drawn are more than the actual wind generation from November 2010 to March 2011.
Table 31: Summary of energy available from all sources in FY 2011-12 (in MUs) Source Own Generating Stations Coal Based Power Plants Ennore Thermal Power Station Tuticorin Thermal Power Station Mettur Thermal Power Station North Chennai Thermal Power Station 851 7018 6234 4621 744 7262 6279 4301 744 7262 6279 4301 Last Tariff Order Petition Commission
Page 98 June 2013
Source Sub Total Gas Based Power Plants Tirumokottai Kovilkalappal Gas Power Plant Kuttalum Gas Power Plant Vallathur Gas Power Plant Basin Bridge Gas Power Plant Sub Total Hydro Generation Circles* Erode Hydro Generation Circle Kundah Hydro Generation Circle Tirunelveli Hydro Generation Circle Kadamparai Hydro generation circle Wind Mills Sub Total - Existing Stations New Stations North Chennai TPS Stage - II Mettur Stage - III Ennore Expansion Sub Total Total - Own Generation Central Generation Stations NTPC SR (I&II) NTPC SR III NLC TS - I NLC TS - II NLC TS I Expansion NTPC Talcher NTPC Simhadri MAPS KAIGA NTPC Kayakulum NTPC ER NTPC Dadri NTPC Vallur Kudankulum NLC TS - II Expansion NLC - Tuticorin Sub Total IPPs GMR Samalpatti PPN
Last Tariff Order 18724 650 457 1093 44 2244
Petition 18587 660 383 1027 29 2099
Commission 18587 660 383 1027 29 2099
4701
4823
4823
11 25689
12 25521
12 25521
0 25689 4139 1105 3066 3242 1609 3690 328 1499 1107 205 885 0
0 25521 4106 1048 3146 3167 1526 3622 468 1604 1171 205 465 101
0 25521 4106 1048 3146 3167 1526 3622 468 1604 1171 205 465 101
20875 962 351 1483
20630 858 292 1491
20630 858 292 1491
Page 99 June 2013
Source Madurai ST-CMS ABAN Penna Sub Total CPP and Renewable Energy Sources Captive Wind Biomass Cogeneration Solar Sub Total Other Sources Trading - Bilateral & Exchange UI NTPC NVVN Sub Total Total - Other Power Purchase Grand Total
Last Tariff Order 333 1711 776 366 5982 575 5130 115 1135 10 6965 9400 750 0 10150 43972 69661
Petition 282 1688 760 360 5731 2778 5893 73 1285 11 10040 6206 718 694 7618 44018 69540
Commission 282 1688 760 360 5731 557 5711 73 1285 11 7637 8427 718 694 9838 43836 69357
*Net Hydro generation is shown without considering power generated from Kadamparai PSHES
Table 32: Summary of energy available from all sources in FY 2012-13 (in MUs) Source Own Generating Stations Coal Based Power Plants Ennore Thermal Power Station Tuticorin Thermal Power Station Mettur Thermal Power Station North Chennai Thermal Power Station Sub Total Gas Based Power Plants Tirumokottai Kovilkalappal Gas Power Plant Kuttalum Gas Power Plant Vallathur Gas Power Plant Basin Bridge Gas Power Plant Sub Total Hydro Generation Circles* Erode Hydro Generation Circle Kundah Hydro Generation Circle 5242 3544 2576 611 592 1207 58 2468 674 106 792 5 1577 682 51 879 0 1613 680 6938 5960 4391 17969 785 7002 5655 4361 17804 610 7620 5684 4634 18547 Last Tariff Order Petition Commission
Page 100 June 2013
Source Tirunelveli Hydro Generation Circle Kadamparai Hydro generation circle Wind Mills Sub Total - Existing Stations New Stations North Chennai TPS Stage - II Mettur Stage - III Ennore Expansion Sub Total Total - Own Generation Central Generation Stations NTPC SR (I&II) NTPC SR III NLC TS - I NLC TS - II NLC TS I Expansion NTPC Talcher NTPC Simhadri MAPS KAIGA NTPC Kayakulum NTPC ER NTPC Dadri NTPC Vallur Kudunkulum NLC TS - II Expansion NLC - Tuticorin Sub Total IPPs GMR Samalpatti PPN Madurai ST-CMS ABAN Penna Sub Total CPP and Renewable Energy Sources Captive Wind Biomass Cogeneration
Last Tariff Order
Petition
Commission
11 25690 4790 3428 8218 33908 4164 1125 3066 3272 1624 3705 1415 1508 1178 0 897 0 1448 1716 1318 26436 495 575 2395 575 1795 810 375 7020 582 5408 56 1202
28 22954
13 22749
236 236 23190 4164 1074 2937 3450 1749 3567 599 1986 1278 0 342 123 910 178 397 22755 615 273 1541 285 1794 366 759 5633 705 5067 783 1771
0 0 22749 4149 982 3189 3,291 1629 3405 1079 1775 1261 0 319 0 488 0 0 21567 610 329 1785 357 1665 850 375 5971 595 7145 11 1428
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Source Solar Sub Total Other Sources Trading - Bilateral & Exchange UI NTPC NVVN ** Sub Total Total - Other Power Purchase Grand Total
Last Tariff Order 11 7259 2000 0 2000 42715 76623
Petition 21 8347 9816 694 10510 47245 70434
Commission 16 9195 6,935 81 35 7051 43785 66534
*Net Hydro generation is shown without considering power generated from Kadamparai PSHES **From 2012-13, the energy availability shown under NTPC NVVN corresponds to bundled solar power Renewable Purchase Obligation 3.62 In Para 8.18.4 of the comprehensive tariff order on wind energy (OrderNo.1 of 2009, dated 20-03-2009), the Commission has fixed the Renewable Purchase Obligation (RPO) at a minimum of 14% for 2010-11 in the area of distribution licensee in accordance to section 86 (1) (e) of the Electricity Act 2003. Section 86 (1) (e) of The Electricity Act, 2003 86. (1) The State Commission shall discharge the following functions, namely: (e) promote cogeneration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution license; 3.63 As regards FY 2011-12, the Commission in the first Amendment to Renewable Energy Purchase Obligation Regulations, 2010 has fixed the RPO of 9% for all sources of Renewable Energy put together and 0.05% for Solar separately. As regards target for RPO in future years, Tamil Nadu Electricity Regulatory Commission (Renewable Energy Purchase Obligation) Regulations, 2010 states as under: 2.If the RPO for any of the year is not specified by the Commission, the RPO specified for the previous year shall be continued beyond the period till any revision is effected by the Commission in this regard.
3.64
Page 102 June 2013
3.65
For FY 2012-13, the Commission has not prescribed any RPO Target. Therefore, the Commission has considered same RPO Obligations as prescribed for FY 2011-12. Accordingly, the Commission has calculated the quantum to be purchased through RPO. The details of power purchase quantum in FY 2010-11, FY 2011-12 and FY 2012-13 is tabulated below. The Commission has applied the above mentioned percentages of RPO from FY 2011-12 to FY 2012-13 on the energy requirement determined for respective years in this Order. For FY 2010-11, Commission has determined the RE requirement based on the energy requirement in the area of distribution licensee for the whole year after considering TNEB (April 2010 to October 2010) and TANGEDCO (November 2010 March 2011) audited accounts for FY 2010-11
3.66
Table 33: Renewable energy purchase requirement from FY 2010-11 to FY 2012-13 - in MUs Particulars Energy Requirement RPO% from all sources RPO% from solar Purchase from renewable requirement FY 2010-11 73555 14% 10298 FY 2011-12 69357 9% 0.05% 6242 FY 2012-13 66534 9% 0.05% 5988
3.67
The energy purchased through Renewable Energy sources for FY 2010-11 (including wheeling units) and for FY 2011-12 to FY 2012-13 (net of wheeling units) on the basis of quantum of energy approved through various sources in this Order is tabulated below:
Table 34: RPO Compliance of TANGEDCO for the first control period Particulars FY 2010-11 FY 2011-12 FY 2012-13 Wind 8707 5711 5820* Small Hydro 212 200 113 Cogeneration 997 1285 1428 Biomass 110 73 11 Own wind generation 12 12 13 Total except solar 10038 7281 8710 Solar 2 11 16 NVVN Bundled Solar Power 0 0 35 Total including solar 10222 7986 8761 RPO % actually achieved for all sources 10.50% 11.10% except solar Solar 0.02% 0.08% RPO% actually achieved for all sources 13.90% 10.52% 11.18% *The wind generation submitted by TANGEDCO includes power procured through REC-APPC mechanism. However for RPO Compliance, Commission has arrived at the wind generation considering the percentage capacity registered under sale to board and not under REC-APPC mechanism
3.68
From the above table it can be observed that TANGEDCO has met the target of RPO, 14% in FY 2010-11 based on the total Renewable energy utilised in the area of the licensee and for FY 2011-12 and FY 2012-13 has met a revised target of 9% net of wheeling units. TANGEDCO has also met the target of 0.05% of solar RPO during FY 2012-13.
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3.69
Energy Balance and Distribution Loss

3.70 Commission in its first order on Multi Year Tariff determination dated 31st July 2010 has approved transmission and distribution losses together and has set a loss reduction strategy for reduction of T&D losses.
Table 35: T&D Loss trajectory set by the Commission for the first control period Particulars Loss level in % 2010-11 17.60 2011-12 17.20 2012-13 16.80
3.71
In the last tariff order Commission has re-estimated the T&D losses considering energy sales without wheeling and additional power supply required for Kadamparai pump mode. In accordance to Commissions approach TANGEDCO in its Petition has submitted the energy balance and actual T&D losses. The energy balance and T&D loss submitted by TANGEDCO in its Petition is given below:
3.72
Table 36: Energy Balance submitted by TANGEDCO for the first control period Particulars Power Purchase from Own Generation Power Purchase from Other Sources Total Power Purchase T&D Loss (MU) T&D Loss (%) Total Sales Sales to Consumers Power Supply to Kadamparai FY 2010-11 10212 17413 27625 6017 21.78% 21608 21276 332 FY 2011-12 26027 43607 69633 15322 22.00% 54311 53777 534 FY 2012-13 23694 46845 70540 15237 21.60% 55303 54742 561
3.73
It is pertinent to mention that Commission has initiated the Suo-Moto proceedings against TANGEDCO for non compliance in the matter of T&D loss determination as directed by it and the Honble APTEL. The Commission has in the absence of scientific data for loss determination, fixed the T&D loss level at 16.4% for FY 201314 and has clarified that it shall assume loss percentage at 16% and 15.6% for FY 2014-15 and FY 2015-16 respectively, if the necessary data is not furnished by TANGEDCO. The relevant extracts of that order are given below: The Commission in its Order No.1 of 2012 dated 30-3-2012, had adopted the T&D loss of 17.6% for 2010-11 and 17.2% for 2011-12. Commission adopted T&D loss of 16.80% for 2012-13. By the same analogy, T&D loss of 16.40% is approved for 201314. As and when the TANGEDCO comes out with the scientific study on T&D loss as specified in the Regulations, the Commission may review and refix the T&D loss norms subject to prudent check. If no study report is submitted for consideration of
Page 104 June 2013
the Commission, T&D loss for FY 2014-15 shall be reckoned as 16% and for FY 2015-16 shall be reckoned as 15.6%. Out of the above T&D loss limit, the distribution loss shall be arrived at after deducting the transmission loss as approved by the Commission in the respective tariff order. 3.74 Hence, Commission arrived at the energy requirement for TANGEDCO considering the approved sales and losses as per 31st July 2010 order and Suo-Moto order on distribution losses dated 4th June 2013. Also, from this order Commission is treating the distribution loss and transmission loss separately. For arriving at the sales below 33 kV, at 110 kV and at 230 kV, Commission has relied on the percentages arrived based on the data provided by TANGEDCO. The energy balance in distribution periphery and energy required by TANGEDCO for the first control period are tabulated below. The energy balance is shown considering total energy wheeled in the distribution system while energy requirement has been arrived considering approved sales and losses.
Table 37: Energy Balance in distribution periphery Parameter Sale to Consumers below 33 kV (MU) Additional Power to Kadamparai (MU) Wheeled Units below 33 kV Distribution Loss (%) Distribution Loss (MU) Energy Input at Distribution periphery (MU) FY 2010-11 19868 42 2221 14.82% 3850 25982 FY 2011-12 50366 28 5780 14.50% 9527 65701 FY 2012-13 47338 26 6724 14.10% 8878 62966
Table 38: Energy required by TANGEDCO at TN Periphery during the first control period Parameter Sale to Consumers below 33 kV (MU) Additional Power to Kadamparai (MU) Distribution Loss (%) Distribution Loss (MU) Energy Input at Distribution periphery (MU) 110 kV Sales (MU) 110 kV Losses (%) 110 kV Losses (MU) Energy Input at 110 kV 230 kV Sales (MU) 230 kV Losses (%) 230 kV Losses (MU) Energy input at TN Periphery FY 2010-11 19868 42 14.82% 3464 23374 983 1.94% 482 24839 426 0.84% 214 25478 FY 2011-12 50366 28 14.50% 8546 58940 2892 1.94% 1223 63056 680 0.76% 488 64224 FY 2012-13 47338 26 14.10% 7774 55138 2718 1.90% 1121 58977 639 0.80% 481 60097
3.75
Commission reiterates its direction given to TANGEDCO in order on Suo-Moto Petition on T&D losses. a) TANGEDCO shall conduct a third party scientific study to arrive at the reasonable consumption of unmetered services and thereby the technical
Page 105 June 2013
losses of their network in the following manner. i. DT metering with AMR facility shall be provided atleast to one feeder feeding agricultural services predominantly in each circle of the TANGEDCO. Similar metering shall be installed/made available at the Sub-Station end of the 11KV / 22KV feeders. Similar arrangements may be made to measure the consumption of Hut Services. To calculate the LT line loss, similar DT metering and feeder metering shall be done atleast in one feeder which has considerable LT network with 100% consumer metering. The online measurement taken for a period of one year shall be used to arrive at the voltage wise T&D losses for the respective FY. Such data shall be submitted once in every 2 months to the Commission starting from October 2013.
ii.
iii.
iv.
3.76
The Commission observed that the actual T&D loss for FY 2010-11, FY 2011-12 and FY 2012-13 are more than the approved losses. Commissions approach on additional cost incurred by TANGEDCO on account of increased T&D losses has been discussed later in this Chapter.
Fixed Expenses
3.77 In this section, expenses related to fixed cost for the first control period (FY 2010-11 and FY 2012-13) will be reviewed and approved by the Commission. The fixed expenses are broadly divided into the following heads: i. ii. iii. iv. v. vi. Operation and Maintenance Expenses Depreciation Interest on long term loans Return on Equity Interest on working capital loans Other debits
Operation and Maintenance Expenses 3.78 The O&M expenses approved by the Commission in its last tariff order and claimed by TANGEDCO in its current Petition are tabulated below:
Page 106 June 2013
Table 39: O&M expenses approved by Commission in last tariff order and claimed in this Petition (Rs. Cr.) As per last year tariff order 2010-11 2011-12 2012-13 39.63 44.70 34.51 50.58 169.41 3.10 8.61 2.49 3.45 17.66 14.34 8.03 16.13 9.70 48.19 235.26 1092.94 1328.20 98.91 111.57 86.13 126.24 422.85 7.74 17.04 6.22 8.62 39.63 35.79 20.03 37.34 24.22 117.38 579.86 2727.99 3307.85 102.86 116.03 89.57 131.29 439.76 8.05 17.72 6.47 8.96 41.21 37.22 20.83 38.83 25.19 122.07 603.04 2837.11 3440.15 Current Petition 2011-12 109.34 190.72 102.59 116.00 518.66 10.06 7.14 5.69 7.95 30.84 26.52 22.05 35.91 24.19 108.67 658.16 3652.49 4310.66
Plant Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Total Thermal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP Total Hydro Total Generation Total Distribution Total TANGEDCO
2010-11 40.73 60.92 48.08 46.72 196.44 2.73 0.82 2.72 21.06 27.34 11.10 10.88 15.18 9.66 46.83 270.60 1388.30 1658.90
2012-13 120.48 208.29 115.05 128.37 572.20 10.95 7.78 6.32 8.88 33.93 29.83 24.32 39.86 27.50 121.50 727.63 3690.85 4418.48
3.79
From the above table it can be observed that TANGEDCO in this true-up and performance review exercise has sought for Commissions approval for the increase in O&M expenses ranging from 25% to 30% for the first control period. In response to data gaps and during discussions held with TANGEDCO officials, it was clarified that one of the reasons for this variation is due to segregation of accounts between TANGEDCO and TANTRANSCO It is pertinent to mention that GoTN vide G.O.(Ms) No 114 Energy Dept., dated 0810-2008 have accorded in principle approval for the reorganization of TNEB. Pursuant to this G.O. TANGEDCO and TANTRANSCO were incorporated on 1st December 2009 and started functioning as such w.e.f 1st November 2010. Hence, TANGEDCO and TANTRANSCO have been maintaining separate accounts from then onwards.
3.80
3.81
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3.82
Prior to this there were separate accounts for each generating station. However, for transmission and distribution expenses consolidated accounts were maintained. TANGEDCO in its last Petition had segregated the O&M expenses under transmission and distribution heads with some assumptions. In previous Petition of TN power utilities, Employee expenses and A&G expenses were bifurcated between Distribution and Transmission business based on number of employees while R&M expenses have been bifurcated based on GFA. However TN Power utilities have clarified in their current MYT Petition that they have submitted the actual expenses based on their audited accounts. Also, TANGEDCO in its Petition has submitted that it was unbundled from the erstwhile TNEB only on 31st Oct 2010 and it is difficult for it to derive the O&M expenses pertaining to Transmission activities for the last 5 years. Hence, it has projected the expenses from FY 2012-13 based on the expenses for the FY 2010-11 and FY 201112 It is pertinent to mention that in the process of the approval of O&M expenses, the Commission will be guided by the following regulations Regulation 14 of TNERC Tariff Regulations 14. Multiyear tariff (5) All the uncontrollable costs shall be allowed as pass through in tariff and the uncontrollable costs will include the following: (a) Cost of fuel; (b) Costs on account of inflation; (c) Taxes and duties; and (d) Variation in power purchase unit cost from base line level including on account of hydro-thermal mix in case of force majure and adverse natural events like drought (6) The Operation and Maintenance cost shall be controllable cost and be based on escalation indices or other mode determined during determination of tariff for the base year. Regulation-25 of TNERC Tariff Regulations: 25. Operation and Maintenance Expenses 1. The operation and maintenance expenses shall be derived on the basis of actual operation and maintenance expenses for the past five years previous to current year based on the audited Annual Accounts excluding abnormal operation and maintenance expenses, if any, after prudence check by the
3.83
3.84
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Commission. The Commission may, if considered necessary engage Consultant / Auditors in the process of prudence check for correctness. 2. The average of such normative operation and maintenance expenses after prudence check shall be escalated at the rate of 4% per annum to arrive at operation and maintenance expenses for current year i.e. base year and ensuing year. 3. The base operation and maintenance expenses so determined shall be escalated further at the rate of 4% per annum to arrive at permissible operation and maintenance expenses for the relevant years of tariff period. 3.85 In following paras each component of O&M expenses will be discussed in detail and Commissions approval for the same is accorded. Employee Expenses 3.86 TANGEDCO has filed the actual employee expenses based on audited accounts for FY 2010-11 and based on provisional accounts for FY 2011-12. It has then projected the employee costs based on the following assumptions: i. Basic salary and grade pay have been considered with an escalation of 5% for FY 2013-14 to FY 2014-15 and 10% for FY 2012-13 and FY 2015-16 due to wage revision. Escalation of DA rate at 15% per annum Other expenses such as surrender leave, terminal benefits, pension schemes etc. at 10%.
ii. iii.
3.87
On preliminary scrutiny of employee expenses proposed by TANGEDCO it was observed that there is significant increase in employee expenses corresponding to TANGEDCO while there is decrease in employee costs pertaining to TANTRANSCO. During the discussions with TANGEDCO officials it was mentioned that in the last petition the employee expenses submitted under distribution and transmission petition was based on certain assumptions due to unavailability of separate accounts. However, they have clarified that all the employee expenses are being currently accounted under respective audited accounts except for terminal benefits. TANGEDCO has stated that entire pension payments are being made by TANGEDCO on behalf of TNEB and hence the terminal benefits pertaining to TANTRANSCO are also included in TANGEDCO audited accounts. This fact was also mentioned in the audited accounts for FY 2011-12 of TANGEDCO under point 9 of Statement-5: Notes to Accounts and is reproduced below: The pension payments of existing pensioners of erstwhile TNEB are being paid by TANGEDCO since no segregation of pensioners liability has been finalized in the provisional transfer scheme. The payments of pension to those who have retired from 01.10.2010 to 31.03.2013 are also made by TANGEDCO and out of it the
3.88
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TANTRANSCOs share has not been determined so far. As and when its ascertained, the company has to claim the payment from TANTRANSCO. 3.89 Hence for regulatory accounting and approval, Commission in consultation with TANGEDCO and TANTRANSCO officials have bifurcated the terminal benefits based on the employee ratio of 6:1 (TANGEDCO to TANTRANSCO). In this true-up Commission will approve the terminal benefits expenses for TANGEDCO only to the extent of its liability.
Table 40: Re-estimation of terminal benefits of TANGEDCO and TANTRANSCO (Rs. Cr.) Actual figures as per Audited Accounts FY 2011 FY 2012 601.50 9.79 611.29 1,591.55 22.06 1,613.61 Commissions Re-Estimate (Based on 6:1 ratio) FY 2011 FY 2012 523.97 87.33 611.29 1,383.09 230.52 1,613.61
Parameter Terminal Benefits TANGEDCO Terminal Benefits TANTRANSCO Total
Table 41: Segregation of Terminal benefits between generating stations and distribution business (Rs. Cr.) TANGEDCO Year FY 2010-11 FY 2011-12 523.97 1,383.09 Claimed for Own Generation Stations in MYT Petition 8.93 23.13 Approved for Distribution Business 515.04 1,359.96
3.90
The employee expenses after accounting for terminal benefits have only increased marginally for TANGEDCO except for MTPS and TTPS compared to Commissions approved employee expenses. For these two stations in the last order Commission has approved the employee expenses based on five year average to arrive at the employee expense for base year. Commission is of the view that averaging the last five years (FY 2006 to FY 2010) expense had resulted in approving the employee expense for these stations equivalent to the median year (i.e. for FY 2008). Hence Commission is accepting the actual employee expenses for FY 2010-11 and FY 2011-12 as submitted by TANGEDCO for all the generating stations and distribution business for the reasons stated above. Though TANGEDCO has proposed escalations of more than 4% for various components of employee expenses for FY 2012-13, Commission in accordance with its regulation has escalated the approved employee expenses of FY 2011-12 at 4% on all components except for DA for arriving at the employee expenses for FY 2012-13. However, if the proposed pay revision increase the employee expenses significantly, as submitted by TANGEDCO, then TANGEDCO is required to quantify the impact due to pay revision and submit to the Commission during the true-up exercise for FY 2012-13.
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3.91
3.92
3.93
As per the TNERC Tariff Regulations increase in costs due to inflation is required to be passed through in tariff. DA percentage notified by the GoTN is dependent on inflation and hence increase in employee cost to the extent of DA variation will be allowed as a pass through in tariff. Hence, the DA rates as notified by GoTN have been used for estimating the dearness allowance instead of taking an escalation of 4% as per TNERC Tariff Regulations. The employee capitalization for FY 2012-13 of generating stations has been arrived based on the percentage of employee expenses capitalized in FY 2010-11 and FY 2011-12. However, for distribution business the employee capitalization as per audited accounts comes to 5%, which is on a lower side compared to historic trend. Also, TANGEDCO has proposed a higher capitalization rate of 15% for FY 2012-13. In view of these discrepancies Commission has relied on average employee capitalization of 9% based on historical data.
3.94
Table 42: Estimation of average DA rate applicable for FY 2012-13 Year 2012-13 Eff. Date 1/1/2012 1/7/2012 1/1/2013 Rate of DA 65% 72% 80% Months 3 6 3 72.25% Avg Rate
3.95
Based on the above approach and methodology, the employee costs submitted by TANGEDCO and approved by the Commssion is tabulated below:
Table 43: Approved employee expenses for FY 2010-11 (Rs. Cr.) Plant Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Total Coal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP Total Hydro Total Generation Distribution TANGEDCO Last Tariff Order 22.55 23.28 18.99 23.67 88.49 1.49 1.33 1.53 0.54 4.90 11.94 6.13 9.28 7.64 34.98 128.38 1,052.15 1,180.53 Petition 24.97 32.42 30.39 23.32 111.09 1.21 0.00 1.38 2.21 4.80 9.74 7.36 9.85 7.85 34.80 150.68 1,305.27 1,455.95 Commission 24.97 32.42 30.39 23.32 111.09 1.21 0.00 1.38 2.21 4.80 9.74 7.36 9.85 7.85 34.80 150.68 1,228.75 1,379.43
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Table 44: Approved employee expenses for FY 2011-12 (Rs. Cr.) Plant Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Total Coal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP Total Hydro Total Generation Distribution TANGEDCO Last Tariff Order 56.27 58.12 47.40 59.09 220.88 3.73 1.60 3.83 1.35 10.50 29.79 15.29 19.96 19.06 84.10 315.48 2626.16 2941.64 Petition 62.08 82.06 73.04 50.49 267.67 3.91 3.10 3.53 5.87 16.41 22.88 15.08 24.50 19.60 82.06 366.13 3437.05 3803.19 Commission 62.08 82.06 73.04 50.49 267.67 3.90 3.10 3.53 5.86 16.39 22.88 15.08 24.50 19.60 82.06 366.12 3206.77 3572.89
Table 45: Approved employee expenses for FY 2012-13 (Rs. Cr.) Plant Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Total Coal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP Total Hydro Total Generation Distribution TANGEDCO Last Tariff Order 58.52 60.44 49.30 61.45 229.71 3.88 1.66 3.98 1.40 10.92 30.99 15.90 20.75 19.82 87.47 328.09 2,731.21 3059.30 Petition 71.19 94.40 84.09 59.02 308.71 4.52 3.56 4.03 6.68 18.80 26.01 17.17 28.00 22.40 93.59 421.09 3,447.65 3868.74 Commission 65.94 91.46 81.52 59.41 298.33 4.33 2.31 3.90 6.56 17.09 28.84 16.79 26.85 21.79 94.27 409.70 3,360.21 3769.90
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Repair and Maintenance Expenses 3.96 On preliminary scrutiny, Commission has found that R&M expenses for few stations such as VGTPS, ETPS, TTPS and TGTPS have increased significantly. In response to data gaps, TANGEDCO has replied in a generic manner without giving any specific reasons for increase in these expenses. In this context it is pertinent to mention that the Commission is already allowing 0.5% of capital cost of generating assets for self insurance and any abnormal increase in R&M expenses due to unforeseen reasons can be met through this fund. R&M expenses being completely a controllable expense and since TANGEDCO could not substantiate the abnormal increase in R&M expenses with appropriate reasons, Commission in this order is approving the R&M expenses as approved in the last order except for generating stations such as TTPS, MTPS and VGTPS.. In the last order for TTPS, MTPS and VGTPS generating stations, Commission had approved the R&M expenses in accordance to its Tariff Regulation by taking the average R&M expenses of last five financial years i.e. from FY 2005-06 to FY 200910 in order to arrive at the R&M expenses for the base year. In this process of averaging the R&M expenses arrived will correspond to the median year i.e. FY 2007-08 and hence average expenses must be escalated at 4% year on year for arriving at the R&M expenses for the base year FY 2010-11. Hence in this order Commission is approving additional R&M expenses to these stations to the extent of this correction. In the previous order, Commission had approved the R&M expenses as claimed by TANGEDCO. Also, historically the R&M expenses were varying erratically and it may not be appropriate to take the average R&M expenses for the last five years. Hence, Commission has approved the R&M expenses for KGTPS as claimed by TANGEDCO based on actual expenditure incurred.
3.97
3.98
3.99
3.100 As already mentioned earlier, in the last Petition TANGEDCO and TANTRANSCO have segregated the R&M expenses between distribution and transmission business based on certain assumptions. However during review of current audited accounts it has been observed that R&M expenses of TANTRANSCO have decreased while R&M expenses of TANGEDCO have increased. It was also confirmed by TANGEDCO during the discussion that no part of R&M expenses on account of TANTRANSCO are being booked in TANGEDCO accounts. Hence, the variation in expenses is only due to proper accounting practices adopted after unbundling and that approach will continue in future. 3.101 Commission is of the view that ratio of R&M expenses approved for transmission and distribution business may change but the total expenses cannot increase. Hence while approving the R&M expenses for the distribution business, increase in R&M expenses only to the tune of decrease in R&M expenses of TANTRANSCO compared to that approved in last order has been allowed. 3.102 Based on the above approach, the R&M expenses submitted by TANGEDCO and approved by the Commission is tabulated below:
Table 46: Approved R&M expenses for FY 2010-11 (Rs. Cr.) Plant Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Total Coal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP Total Hydro Total Generation Distribution TANGEDCO Last Tariff Order 13.36 13.26 10.90 22.58 60.10 0.64 6.49 0.33 0.80 8.25 0.43 0.76 1.32 0.71 3.23 71.59 17.23 88.82 Petition 14.34 24.30 12.82 20.36 71.82 1.23 0.73 0.92 18.57 21.46 0.37 0.68 0.79 0.41 2.26 95.54 24.71 120.25 Commission 13.36 14.91 12.27 22.58 63.12 0.64 0.73 0.33 0.90 2.60 0.43 0.76 1.32 0.71 3.23 68.95 24.48 93.42
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Administrative and General Expenses 3.103 On preliminary scrutiny, Commission has found that A&G expenses for generating stations has decreased while that of distribution business has increased compared to Commission approved A&G expenses. This is mainly due to accounting of selfinsurance charges pertaining to generating stations in distribution business. 3.104 Unlike employee expenses, A&G expenses are completely controllable. Hence, Commission in this order is approving the A&G expenses as approved in the last order except for few generating stations for which Commission feels that the approved numbers in the last order are required to be revisited. 3.105 In the last order for TTPS, MTPS and VGTPS generating stations, Commission has approved the A&G expenses in accordance to its Tariff Regulation by taking the average A&G expenses of last five financial years i.e. from FY 2005-06 to FY 200910 in order to arrive at the A&G expenses for the base year. In this process of averaging the A&G expenses arrived will correspond to the median year i.e. FY 200708 and hence average expenses must be escalated at 4% year on year for arriving at the A&G expenses for the base year FY 2010-11. Hence in this order Commission has approved additional A&G expenses of these stations to the extent of this correction.
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3.106 Similar to R&M expenses, in its last Petition TANGEDCO and TANTRANSCO have segregated the A&G expenses between distribution and transmission business based on certain assumptions. However during review of audited accounts it has been observed that A&G expenses of TANTRANSCO have decreased while A&G expenses of TANGEDCO have increased. It was also confirmed by TANGEDCO during the discussion that no part of A&G expenses on account of TANTRANSCO are being booked in TANGEDCO accounts. Hence, the variation in expenses is only due to change in accounting methodology adopted and that approach will continue in future. 3.107 Commission is of the view that ratio of A&G expenses approved for transmission and distribution business may change but A&G expense being a controllable expense, the total A&G expenses cannot increase more than that approved by the Commission. Hence while approving the A&G expenses for the distribution business, increase in A&G expenses only to the tune of decrease in A&G expenses of TANTRANSCO compared to that approved in last order has been allowed. 3.108 Based on the above approach, the A&G expenses submitted by TANGEDCO and approved by the Commission is tabulated below:
Table 49: Approved A&G expenses for FY 2010-11 (Rs. Cr.) Plant Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Total Coal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP Total Hydro Total Generation Distribution TANGEDCO Last Tariff Order 3.72 8.16 4.61 4.33 20.81 0.97 0.79 0.63 2.11 4.50 1.97 1.13 5.53 1.35 9.98 35.29 23.56 58.85 Petition 1.42 4.20 4.88 3.04 13.53 0.29 0.09 0.41 0.29 1.08 0.99 2.84 4.54 1.40 9.77 24.38 58.32 82.70 Commission 3.72 9.18 5.19 4.33 22.41 0.97 0.79 0.63 2.37 4.76 1.97 1.13 5.53 1.35 9.98 37.15 28.48 65.63
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3.109 Based on the above approach, the O&M expenses submitted by TANGEDCO and approved by the Commission is tabulated below:
Table 52: Approved O&M expenses for FY 2010-11 (Rs. Cr.) Plant Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Total Coal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP Total Hydro Total Generation Distribution TANGEDCO Last Tariff Order 39.63 44.70 34.50 50.58 169.41 3.10 8.61 2.49 3.45 17.65 14.34 8.02 16.13 9.70 48.19 235.25 1092.94 1328.19 Petition 40.73 60.92 48.09 46.72 196.46 2.73 0.82 2.71 21.07 27.33 11.10 10.88 15.18 9.66 46.82 270.61 1388.3 1658.91 Commission 42.05 56.51 47.85 50.23 196.64 2.82 1.52 2.34 5.48 12.16 12.14 9.25 16.70 9.91 48.00 256.80 1281.71 1538.51
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Segregation of accounts 3.110 In terms of the Transfer Scheme notification dated 02nd January 2012, the Government of Tamil Nadu had assigned the Assets and Liabilities (as on 31.03.2010) to TANGEDCO on a Provisional basis and hence the transaction for 7 months i.e. from 1st April 2010 to 30th October 2010, does not get reflected in the opening balance sheet of the TANGEDCO as specified in the Transfer Scheme. 3.111 TANGEDCO has filed the Petition in accordance with the provisional transfer scheme and hence the opening GFA as on November 2010 is considered equal to the closing GFA as on March 2010. 3.112 In addition, the opening GFA as on November 2010 includes the revaluation reserve of Rs. 5579.40 Crs. The summary of opening GFA as per provisional transfer scheme dated 2nd January 2012 is tabulated below:
Table 55: TANGEDCO GFA as on Nov 2010 - based on provisional transfer scheme (Rs. Cr) Particulars Before Revaluation Revaluation Reserve as on Nov 2010 Including Revaluation Generation 10,558.49 1889.76 12,448.25 Distribution 7,668.03 3689.64 11,357.67 Total G&D 18,226.52 5,579.40 23,805.92
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3.113 During the discussion, TANGEDCO has informed that revaluation of assets is still underway and the GFA as on Nov 2010 will be only finalized in the final transfer scheme. The GFA in the TANGEDCO Petition was inclusive of this revaluation reserve as per provisional transfer scheme. However, in reply to data gaps, TANGEDCO has revised the GFA excluding the revaluation reserve and segregated the loans and other expenses between generation business and distribution business based on the GFA prior to revaluation reserve. TANGEDCO also clarified that revaluation reserve will not have any major impact in depreciation calculations as the increase in GFA was majorly due to revaluation of land. 3.114 Commission is of the view that revaluation of assets is just a book adjustment that neither requires any fund nor generates additional cash flow. Also as revaluation of assets being not finalized, Commission in this order is accepting TANGEDCOs revised submission and based its calculations on GFA without revaluation reserve. The opening GFA as on November 2010 considered by the Commission is tabulated below:
Table 56: Opening GFA as on November 2010 (Rs. Cr) Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Total Thermal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP New Hydro Addition Bhavani Barrage Bhavani Katlai Periyar Total Hydro Tirunelveli Udumalpet Total Wind Total Generation Total Distribution Total G&D without revaluation reserve Revaluation reserve Total G&D inclusive of revaluation reserve Revised Submission GFA (W/o Revaluation Reserve) 1,056.84 1,853.70 1,049.19 1,987.19 5,946.92 450.75 351.05 549.01 540.82 1,891.63 672.31 363.48 953.74 330.58 6.92 16.28 33.75 2,377.07 206.45 136.41 342.86 10,558.49 7668.03 18,226.52 5579.40 23805.92
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Capital Expenditure and capitalization 3.115 Regulation 17 (5) of the Tariff Regulations, 2005 and Regulation 3 (v)of the Tariff Regulation under MYT framework specifies that the licensee shall get the capital investment plan approved by the Commission before filing ARR and Application for determination of Tariff. However, TANGEDCO has not complied with this provision. 3.116 TANGEDCO has filed the capital expenditure for the first control period along with the Petition and also revised the capitalization initially filed in its capitalization Petition dated 5th October 2012. 3.117 There were many discrepancies in the capital expenditure and capitalization information filed in the Petition. The capital expenditure filed by TANGEDCO was without any cost benefit analysis. In addition, TANGEDCO has also not provided any information of sources of funding, broad details and physical quantum for the proposed capital expenditure. 3.118 In response to data-gaps and clarifications sought by the Commission, TANGEDCO has provided some information and revised the capital expenditure and capitalization proposed. In order to verify the prudency of capital expenditure, Commission has developed suitable formats and has directed TANGEDCO to submit the capital expenditure information in those formats. However, the utility was able to provide only partial information in the required formats. 3.119 Even after repeated directions, Commission has observed that TANGEDCO has not submitted the capital expenditure and capitalization information to the satisfaction of the Commission. 3.120 In the revised capital expenditure, capitalization and capital works in progress (CWIP) submitted by TANGEDCO, Commission observed that the closing CWIP for some of the generating stations for FY 2011-12 and FY 2012-13 was negative. During discussions, TANGEDCO has clarified that this was due to non consideration of capital expenditure and capitalization during the first seven months of the FY 201011. Later, TANGEDCO has revised the capital expenditure, capitalization and CWIP statement after considering actual expenses during the first seven months. 3.121 Commission reiterates that the data quality and iteration that went through the capital expenditure and capitalization schedule along with its GFA schedule needed to be substantially improved. Commission directs TANGEDCO to reconcile its accounts with respect to capital expenditure and prepare the scheme wise data as per the formats specified by the Commission. Commission also directs TANGEDCO to file the progress of the capital expenditure and capitalization on quarterly basis.
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3.122 It is also pertinent to mention that TANGEDCO has finalized its audited accounts based on the provisional transfer scheme and the opening CWIP and GFA does take into consideration the actual capital expenditure and expenses incurred during the first seven months of FY 2010-11. Hence, this mismatch and ambiguity in the capital expenditure and capitalization is majorly due to non finalization of transfer scheme and hence Commission directs the power utilities to get the transfer scheme finalized through GoTN at the earliest. 3.123 On scrutiny of audited accounts it was observed that the capitalization indicated for FY 2010-11 and FY 2011-12 has resulted in increase in fixed assets to that extent. Hence, Commission is provisionally accepting the capital expenditure and capitalization schedule as proposed by TANGEDCO. 3.124 The Commission observed that there are number of new generating stations for which TANGEDCO had neither sought prior approval of their capital investment plan nor applied for determination of tariff in advance for the new generating stations. 3.125 TANGEDCO is required file separate Petitions for approval of the tariff for the new generating stations along with accounts for these generating stations duly certified by statutory auditor. On Commissions directive, TANGEDCO has submitted partial information for new thermal stations as per the formats prescribed by TNERC Tariff Regulations. However, the information is not certified by statutory auditor. With respect to new hydro stations TANGEDCO has not provided any information. 3.126 Regulation 6 (7) (i) (a) of the TNERC Tariff Regulations, 2005 specifies the following: A generation company or a licensee may make an application as per Appendix I to these Regulations, for determination of provisional tariff in advance of the anticipated date of completion of the project, based on the capital expenditure actually incurred upto the date of making of the application or a date prior to making of the application, duly audited and certified by the statutory auditors, and the provisional tariff shall be charged from the date of commercial operation of the respective units of the generation station or the line or sub-station of the transmission system. 3.127 Hence, the Commission directs TANGEDCO to file the separate petitions based on TNERC Regulations, within 90 days of issuance of this Order. In failure of this compliance, Commission may approve the capital cost based on industry norms and may disallow all expenses allowed due to provisionally approved capital cost in its next tariff order. 3.128 The capital expenditure and capitalization considered in this order is tabulated below. Any variation in capital expenditure and capitalization due to prudence verification based on the data submitted by the TANGEDCO and finalization of transfer scheme will be addressed during the next tariff order.
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Table 57: Capital expenditure and capitalization provisionally accepted by the Commission (Rs. Cr) Capital Expenditure FY 2011-12 FY 2012-13 7.39 4.06 24.21 92.36 17.71 103.15 3,646.96 595.67 0.20 4,292.15 1.08 0.82 60.24 62.14 1.46 1.58 4.26 42.86 41.44 418.90 426.56 437.89* 1,524.36 5.27 137.42 13.86 156.55 59.25 0.11 6.05 26.57 Capitalization FY 2011-12 FY 2012-13 0.21 2.43 8.97 55.42 11.89 61.89 24.66 45.73 3.79 14.79 11.02 29.60 1.59 2.83 4.43 15.08 23.93 24.86 144.60 3.16 137.42 70.89 211.47 35.55 0.06 1.35 25.94 62.90 -
Plant Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS NCTPS Stage-II MTPS Stage-III Ennore Expansion Total Thermal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur Unit-I Valuthur Unit-II Total Gas Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP New Hydro Addition Bhavani Barrage Bhavani Katlai Periyar Total Hydro Tirunelveli Udumalpet Total Wind Cogen Sugar Mills Under Modernisation Total Generation Total Distribution TANGEDCO
FY 2010-11 0.36 6.77 1.21 1.28 739.20 789.32 0.42 1538.55 2.37 10.27 14.51 27.15 0.82 0.13 6.30 1.42
FY 2010-11 11.16 56.04 1.85 69.05 0.09 2.33 2.41 0.56 0.02 5.41 17.45 -
30.91 12.43 19.91 71.92 0.20 0.20
69.11 168.39 37.07 324.73 0.94 0.03 0.97
42.76 69.60 13.17 217.50 -
23.44 -
184.61
447.11
208.26
1822.43 617.06 2439.49
5,127.11 1,506.92 6,634.03
2,106.67 1,528.10 3,634.77
94.90 277.19 372.09
99.26 1,021.16 1,120.42
418.98 1,797.94 2,216.92
*Needs to be examined and reconciled.

Depreciation 3.129 In its Petition, TANGEDCO has submitted the opening gross block for each of the generating plant and for distribution function for FY 2010-11 (5 months) in line with the provisional transfer scheme notified by the Government of Tamil Nadu vide notification dated 2nd January 2012. 3.130 TANGEDCO has estimated the depreciation for FY 2010-11 and FY 2011-12 in line with the audited accounts for FY 2010-11 and provisional accounts for FY 2011-12 respectively. It was also submitted that the depreciation rate considered in annual accounts are in line with the TNERC Tariff Regulations and has been calculated only on the opening balance of GFA as per provisional accounts. 3.131 Commission has observed that the revaluation reserve as per provisional transfer scheme has not been accounted properly and entire revaluation reserve has been accounted for distribution business. In response to this query, TANGEDCO has later revised the opening GFA based on provisional accounts and without considering the revaluation reserve. 3.132 TANGEDCO also re-estimated the depreciation on this revised GFA and during the discussions TANGEDCO has submitted to the Commission that the revaluation of assets is still in process and the impact due to revaluation reserve can be addressed on finalization of transfer scheme. During discussions TANGEDCO also submitted there will not be any major change in depreciation due to change in opening GFA as the revaluation reserve majorly corresponds to land. However, Commission is of the view that revaluation of assets should not result in tariff increase. 3.133 In another query raised by the Commission regarding the depreciation rates used by TANGEDCO, it has submitted that TANGEDCO has used the weighted average depreciation rate for the particular group of asset arrived based on depreciation rates specified in the Tariff Regulations. 3.134 TNERC Tariff Regulations 2005 specifies following guidelines for calculation of depreciation: 24. Depreciation For the purpose of tariff, depreciation shall be computed in the following manners: i. The value base for the purpose of depreciation shall be historical cost of the asset. ii. The depreciation shall be calculated at the rates as per the Annexure to these Regulations. iii. The residual value of assets shall be considered as 10% and depreciation shall be allowed upto maximum of 90% of the estimated cost of the Asset. iv. Land is not a depreciable asset and its cost shall be excluded from the capital cost while computing 90% of the historical cost of the asset. v. The historical cost of the asset shall include additional capitalisation.
vi.
vii.
Depreciation shall be chargeable from the first year of operation. In case of operation of the asset for part of the year, depreciation shall be charged on pro-rata basis. After the assets are fully depreciated the benefit of reduced tariff shall be made available to the consumer.
3.135 Commission has calculated depreciation considering the revised opening GFA without revaluation reserve, weighted average depreciation rates and deductions submitted by TANGEDCO, and capitalization approved by the Commission in this order. The GFA considered for estimation of depreciation is tabulated below:
Table 58: Opening GFA considered for the calculations of Depreciation (Rs. Cr) Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Total Thermal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP - (incl. Bhavani Barrage and Bhavani Khattai) Kadamparai HEP Kundah HEP Tirunelveli HEP (incl Periyar) Total Hydro Tirunelveli Udumalpet Total Wind Total Generation Total Distribution TANGEDCO As on Nov 2010 1,056.84 1,853.70 1,049.19 1,987.19 5,946.92 450.75 351.05 549.01 540.82 1,891.63 695.51 363.48 953.74 364.33 2,377.07 206.45 136.41 342.86 10,558.49 7668.03 18,226.52 As on March 2011 1,056.84 1,861.47 1,105.21 1,989.05 6,012.57 450.84 351.05 551.33 540.82 1,894.04 696.07 363.51 955.88 381.73 2,397.19 206.45 136.41 342.86 10,646.67 7941.09 18,587.76 As on March 2012 1,057.05 1,869.64 1,085.40 2,013.71 6,025.80 454.63 365.84 551.33 551.84 1,923.64 697.66 365.97 956.37 394.39 2,414.41 206.45 136.41 342.86 10,706.71 8797.17 19,503.88
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3.136 Based on the above approach, Commission approves depreciation for all the generating stations and distribution business except for wind stations. In the last tariff order, Commission approved a transfer price of Rs. 2.75 per unit for own wind mills. Hence, in this order Commission is not determining fixed expenses on account of the own wind mills.
Table 59: Depreciation approved by the Commission (Rs. Cr) 2010-11 Commissio Petition n 15.77 15.60 27.12 26.65 14.29 14.20 25.77 25.67 82.96 82.12 6.66 6.62 5.17 5.13 8.26 8.22 8.00 7.96 28.09 27.94 8.49 4.40 10.46 4.35 27.70 0 0 0 138.74 114.86 253.59 8.48 4.38 10.45 4.33 27.64 0 0 0 137.70 109.74 247.44 FY 2011-12 Petitio Commissio n n 37.79 37.45 64.49 64.21 36.04 36.04 61.66 61.66 199.98 199.36 15.90 15.90 12.32 12.32 19.81 19.81 19.11 19.11 67.14 67.14 20.36 10.52 25.16 10.99 67.03 0 0 0 334.16 284.11 618.26 20.36 10.52 25.16 10.99 67.03 0 0 0 333.54 272.78 606.32 FY 2012-13 Commissio Petition n 37.80 37.46 64.72 64.45 36.47 35.35 63.67 62.50 202.66 199.76 15.90 16.03 12.32 12.82 19.81 19.81 19.11 19.48 67.14 68.14 20.39 10.53 25.24 11.14 67.30 0 0 0 337.11 303.00 640.11 20.41 10.58 25.16 11.44 67.59 0 0 0 335.49 302.13 637.62
Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Total Thermal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP - (incl. Bhavani Barrage and Bhavani Khattai) Kadamparai HEP Kundah HEP Tirunelveli HEP (incl Periyar) Total Hydro Tirunelveli Udumalpet Total Wind Total Generation Total Distribution TANGEDCO
Interest on long term loans and other financing charges 3.137 In the last tariff order, Commission has approved the total interest expenses corresponding to actual long term and short term loans borrowed by TANGEDCO. For wind generating assets Commission in its last tariff order has not approved any interest expenses as the loan borrowing, if any towards these assets would already be over.The interest expenses approved in the last tariff order are tabulated below:
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Table 60: Interest expenses approved by the Commission in its last tariff order (Rs. Cr) Commission Stations ETPS NCTPS MTPS TTPS NCTPS II MTPS II Total Thermal BBGTPS Kuttalam Kovilkalappal Valuthur Total Gas Erode Kadamparai Kundah Tirunelveli Total Hydro Total Generation Distribution TANGEDCO FY 11 3 6 3 6 0 0 19 2 1 1 2 6 2 1 3 1 7 32 688 720 FY 12 9 16 9 15 0 0 49 4 3 4 7 18 5 3 8 3 19 86 3150 3236 FY 13 8 16 9 16 174 293 516 4 3 4 7 18 9 3 8 4 24 558 3355 3913
3.138 In the current Petition, TANGEDCO has claimed the interest expenses corresponding to only long term loans and separately claimed the interest on working capital as per norms specified by TNERC in its Tariff Regulations 2005. 3.139 The opening balance of loans as on 1st November 2010 for TANGEDCO considered in its Petition is based on the provisional transfer scheme notified as on 2nd January 2012. TANGEDCO in its Petition has submitted that the loan of a financial institution is not linked with any particular generating plant or the CAPEX schemes as erstwhile TNEB used to have a basket of loan which was used to meet the total capital expenditure of erstwhile TNEB. Therefore it is difficult to identify the debt / interest and equity of the generating plant or station wise or distribution function wise. 3.140 Hence TANGEDCO has adopted the following approach for segregation of interest to the generating plant / station and distribution function i. Project specific loans for generation and distribution is initially allotted to each of the respective project and considered as opening loan balance for that particular project.
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ii.
Large quantum of generic loans which cannot be differentiated into project specific loans and interest paid on these loans is bifurcated as per opening gross block of generation and distribution notified as per transfer scheme.
3.141 Commission has observed discrepancies in the TANGEDCOs submission of loan and its bifurcation based on gross fixed assets. In response to Commissions observation TANGEDCO has revised the allocation of loans based on net fixed assets without revaluation reserve and also segregated the long term loans borrowed for capital projects, repayment of existing loans and funding the revenue expenditure. The summary of revised submission of TANGEDCO is tabulated below:
Table 61: Revised interest expenses submitted by TANGEDCO (Rs. Cr) Particulars Loan Profile Op. Balance Add: Addition for CAPEX Add: Addition for Loan Repayment Add: For Revenue Expenditure Less: Loan Repayment Closing Balance Gross Interest Expenses IDC Net Interest Expenses 2010-11 15,065 2,226 1,754 2,374 2,008 19,412 1155.66 282.43 873.23 2011-12 19,412 4,924 4,921 5,876 5,538 29,594 3017.95 664.19 2353.76 2012-13 29,594 2,571 7,621 6,305 8,270 37,821 4268.91 1443.51 2825.40
3.142 In its last order Commission has stated that there is a mix up between the capital account and the revenue account. In the revised submission TANGEDCO has again included the borrowings corresponding to revenue account in capital account. Based on the revised submission Commission has made the following observations: i. ii. The average interest rate for FY 11 is higher than the rate at which the long term loans are procured. The loan repayment submitted by TANGEDCO includes the repayment of loans that have been borrowed for revenue expenditure during the control period.
3.143 TANGEDCO has clarified that higher interest rate is due to the fact that the loans borrowed during the first seven months of FY 11 are not accounted in audited accounts that were finalized based on provisional transfer scheme dated 2nd January 2012. However, debt obligations corresponding to those additional loans were met by TANGEDCO and the impact to that extent has been included in its audited accounts. 3.144 Also, Commission is of the view that it needs to treat the capital account and revenue account separately atleast since TANGEDCO started working independently. Based on the above submissions, Commission for the determination of interest expenses on long term loans has considered following assumptions:
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i.
ii.
iii. iv. v.
vi.
vii.
viii.
ix.
x.
Revised opening loans as on 1st November 2010 has been arrived considering the net addition during first seven months of FY 11 based on information provided by TANGEDCO. The repayment of existing loans as per audited accounts also includes the repayment of loans borrowed for revenue account. Commission is treating the revenue account separately and also allowing the interest expenses on account of regulatory asset approved in its last tariff order. Hence, allowing the borrowings and interest expenses corresponding to the repayment of loans borrowed for funding of revenue account will result in double accounting of the interest expenses allowed for funding the revenue gap. In view of this, Commission is accepting the opening loans as on 1st November 2010 and is assuming a repayment period of 10 years. The repayment period of new loans borrowed during the control period is assumed to be 10 years The borrowings required for loan repayment will be estimated after taking into account the depreciation allowed during the year. Loans required for the capital works will be arrived after considering the approved capital expenditure and available grants and consumer contribution during the control period. Equity required for funding the capital expenditure is assumed to be nil as Commission is not allowing any return on equity. The consumer contribution and grants for FY 11 and FY 12 has been considered as per audited accounts while for FY 13 they are approved based on historical data. Interest expenses on account of capital works for wind assets has not been considered as borrowings on account of wind assets cannot be loaded on tariff for other generating stations and distribution business. Commission has already approved generation cost for wind assets based on transfer price mechanism. Interest on cogeneration sugar mills is also not considered as the tariff for these generating stations is taken as per Commissions tariff order for procurement of power from cogeneration. Average interest rate for FY 11 and FY 12 is estimated based on interest expenses as per audited accounts and revised loan profile considering the borrowings during the first seven months of FY 11. Interest rate for FY 13 is assumed as 11.98% i.e. the average interest rate of FY 11 and FY 12. Interest during construction (IDC) is approved based on capital works in progress.
3.145 The details of borrowings and interest expenses approved by the Commission corresponding to capital expenditure and repayment of loans are given below.
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Table 62: Revised opening of loans as on Nov 2010 - (Rs. Cr.) Particulars Opening of loans as on November 2010 As per provisional transfer scheme Net additions in loans during the first seven months of FY 11 Revised opening loans as on 1st November 2010. Amount 15064.97 3682.25 18747.22
Table 63: Borrowings considered for funding capital expenditure (Rs. Cr) Particulars Capital Expenditure Less: Consumer Contribution Less: Grants Loans required for funding capital expenditure 2010-11 2,439.49 212.89 0.00 2,226.60 2011-12 6,634.03 394.42 312.62 5,927.00 2012-13 3,634.77 477.54 104.94 3,052.29
Table 64: Borrowings approved for repayment of loans (Rs. Cr) Particulars Repayment of Existing loans (Revised opening as on Nov 2010) Repayment of new loans Less: Depreciation Loans required for repayment of loans 2010-11 781.13 306.68 247.44 840.37 2011-12 1,874.72 1140.13 606.32 2,408.53 2012-13 1,874.72 1743.41 637.62 2,980.51
Table 65: Interest expenses approved by the Commission for the first control period (Rs. Cr) Particulars Loan Profile Op. Balance Add: Addition for CAPEX Add: Addition for Loan Repayment Less: Loan Repayment Closing Balance Gross Interest Expenses IDC Net Interest Expenses 18,747 2,226 840 1,088 20,726 1,090.25 279.19 811.06 20,598 5,926 2,409 3,015 26,046 2,504.02 937.93 1,566.09 25,824 3,052 2,981 3,618 28,461 3,265.60 1,464.84 1,800.76 2010-11 2011-12 2012-13
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3.146 Commission has allocated the opening loans as on November 2010 between generating stations and distribution business based on net fixed assets and CWIP. Later on the addition and repayment of loans allocation has been done based on approach detailed above. The interest expenses approved by the Commission based on loan allocation among generating stations and distribution is tabulated below:
Table 66: Approved interest expenses on long term loans for TANGEDCO during first control period (Rs. Cr) Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS NCTPS Stage-II MTPS Stage-III Ennore Expansion Total Coal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP - (incl. Bhavani Barrage and Bhavani Khattai) Kadamparai HEP Kundah HEP Tirunelveli HEP (incl Periyar) Total Hydro Total Generation Distribution TANGEDCO 201.23 27.86 21.39 27.59 34.72 111.55 31.73 5.40 7.50 17.00 61.63 374.41 499.13 873.54 204.24 22.67 19.22 10.35 40.60 92.84 39.52 17.34 60.22 22.57 139.65 436.72 374.34 811.06 526.10 74.73 57.51 77.30 93.38 302.92 80.03 17.42 46.01 41.68 185.14 1,014.16 1,396.07 2,410.23 Petition 15.06 67.73 29.28 89.16 2010-11 Commission 51.91 63.86 31.59 56.88 Petition 41.50 146.08 89.46 249.07 2011-12 Commission 98.62 120.48 62.18 105.15 386.43 43.34 37.14 18.69 93.72 192.89 75.13 32.98 115.65 44.62 268.38 847.70 718.40 1566.09 356.02 64.17 49.52 61.94 85.37 261.01 160.05 27.21 64.56 85.17 336.99 954.02 1,592.00 2,546.02 Petition 9.40 98.62 41.49 185.79 20.72 2012-13 Commission 106.03 130.98 69.73 113.20 419.94 47.00 49.18 18.54 107.47 222.19 83.86 35.82 126.75 51.04 297.48 939.61 861.15 1800.76
3.147 TANGEDCO has claimed interest on consumer security deposit based on actual consumer security deposits and average interest rate as per audited accounts. The Commission has approved the interest expenses incurred on consumer security deposits to the extent of working capital requirement determined by the Commission in Table 72 based on the norms specified in the TNERC Tariff Regulation, 2005 for distribution business. Based on audited accounts, Commission has considered the average interest rate of 7.09% and 7.00% on consumer security deposits for FY 201011 and FY 2011-12 respectively. For FY 2012-13, Commission has allowed interest expenses at 9% in accordance to its order on interest on consumer security deposit dated 5th February 2013.
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3.148 Commission has observed that TANGEDCO has claimed interest on GPF in other finance charges. Commission is not allowing the interest expenses on GPF as it has not considered GPF reserve for funding of capital expenditure. The interest expenses on consumer security deposits and other finance charges approved by the Commission are tabulated below.
Table 67: Interest and other finance charges approved by the Commission (Rs. Cr) Parameter Interest on consumer security Deposits Other finance charges Total 2010-11 Petition 145.34 48.78 194.12 Commission 100.44 20.23 120.67 2011-12 Petition 380.05 140.56 520.61 Commission 247.60 87.14 334.74 2012-13 Petition 399.05 147.58 546.63 Commission 380.81 87.14 467.95
3.149 The overall interest and other finance charges approved by the Commission for the distribution business during the first control period are given below.
Table 68: Interest and other finance charges approved for distribution business during the first control period (Rs. Cr) Parameter Interest on long term loans Interest on consumer security Deposits Other finance charges Total interest and finance charges 2010-11 Petition 499.13 145.34 48.78 693.25 Commission 374.34 100.44 20.23 495.00 2011-12 Petition 1396.07 380.05 140.56 1916.68 Commission 718.40 247.60 87.14 1053.14 2012-13 Petition 1592.00 399.05 147.58 2138.63 Commission 861.15 380.81 87.14 1329.10
Return on Equity 3.150 TANGEDCO in its Petition has claimed return on equity on total equity base as on 1st November 2010 based on provisional transfer scheme. The equity base was bifurcated among the generating stations and distribution business based on opening gross block allocated to generating stations and distribution business of TANGEDCO. The return on equity claimed by TANGEDCO in its Petition has been tabulated below:
Table 69: Return on equity filed by TANGEDCO for the first control period (Rs. Cr) Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS NCTPS Stage-II MTPS Stage-III 2010-11 8.62 15.07 9.36 16.66 2011-12 26.81 47.06 28.88 51.52 2012-13 32.94 58.14 37.17 63.98 74.56
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Power Station Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP Generation Distribution TANGEDCO
2010-11 3.69 2.83 4.42 4.60 5.93 2.94 7.75 2.49 84.35 64.91 149.26
2011-12 11.47 8.84 13.80 14.18 18.28 9.16 24.14 8.18 262.34 236.12 498.46
2012-13 14.09 11.19 17.01 17.32 33.45 11.27 29.79 12.74 413.65 331.27 744.92
3.151 Commission in its last tariff order has allowed the return on equity for generating stations while disallowing the return on equity for distribution business. In addition Commissions views and observations while approving return on equity in its last tariff order are given below: i. There is a mix up between the capital account and revenue account and equity as well as capital borrowings have been diverted to meet the revenue expenses. The return on equity shall not be permitted if equity has been diverted for meeting revenue expenses. Borrowings are more than the investment shown in capital expenditure which brings out the fact that the borrowings have been diverted for revenue expenditure. The Regulations of the Commission are for normal situations and does not cover a situation which is encountered now. Therefore, the Commission has to take a practical view on this issue. The option available to the Commission is to disallow the interest costs on the entire borrowings in excess of capital works and allow return on equity in line with the its tariff regulations. However, if the Commission disallows the interest costs on the entire borrowings in excess of capital works in line with the Regulation, it would create confusion and may also affect the borrowing ability of the distribution company and the transmission licensee. In view of the above submissions Commission has not allowed RoE while allowing the interest expenses on total borrowings in its last order. This issue was also dealt by the Honble APTEL in Appeal No. 102. of 2012 filed by M/s Beta Wind Farm (P) Ltd. The relevant extracts of the judgement is reproduced below:
ii. iii.
iv.
v.
vi.
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Even though we feel that the State Commission should have determined interest on loan and Return on Equity as per the Regulations, in view of the submissions made by the State Commission that allowing ROE and interest on loan as per Regulations will only result in increase in ARR and tariff and that the adjustment will be made after finalization of the balance sheet of the successor companies of the Electricity Board viz. Respondent nos. 1 and 2 and the proposed restructuring of loan, no purpose will be served by interfering with the order of the State Commission. In view of above, we do not want to interfere with the findings of the State Commission regarding the treatment given to the interest on loan in the impugned order.
3.152 In order to understand the extent to which the long term loans and equity have been diverted, Commission directed TANGEDCO to bifurcate the opening loans as on November 2010 into loans borrowed for funding capital projects, repayment of existing loans and funding the revenue expenditure. However, TANGEDCO has replied stating that it is not possible to segregate the long term loans into the heads suggested by the Commission. In the absence of information from TANGEDCO, Commission undertook an exercise to understand the level of diversion of capital funds. 3.153 Based on TNEB and TANGEDCO audited accounts from FY 03, Commission has estimated the excess funds available with utility for funding capital expenditure and whether there was any equity requirement for funding the capital expenditure. 3.154 The Commission has tabulated below the excess funds with utility in the past years based on additions to equity, consumer contribution, long term loans and actual capital expenditure.
Table 70: Comparison of source of funds and actual capital expenditure (Rs. Cr) Source of funding Capital Expenditure 1236 1561 1272 1570 2094 2333 2706 4182 Consumer Contribution and grants 279 408 391 428 319 527 436 632 Long term loans 1621 2761 2043 2134 3075 4836 8552 9953 Excess Funds Total 1925 3369 2519 2587 3569 5853 10158 10686 689 1808 1246 1018 1475 3519 7452 6504
Year FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
Equity 25 200 85 25 175 490 1171 100
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3.155 From the above table, it can be observed that source of funds for capital assets are higher than actually required for funding the capital expenditure. In addition the fact that the excess funds available during the year are more than the equity infused that year clearly indicates that equity has not contributed in the creation of capital assets and has been diverted towards revenue account since FY 2003. 3.156 Commission has not considered the equity requirement while approving the funding requirement of capital expenditure during the first control period. This stand was taken because Commission is of the view that TANGEDCO is mixing the revenue account with capital account and the equity approved may be again diverted to revenue account. This can also be observed from TANGEDCO audited accounts wherein the actual borrowings for FY 11 and FY 12 are significantly higher than capital expenditure. TNERC Tariff Regulations also allow the Commission for approving the equity below the norms of 30% requirement. The relevant extracts of the regulation are reproduced below: 21. Debt-Equity Ratio For the purpose of determination of tariff, debt-equity ratio as on the date of commercial operation of Generating Station and transmission projects, sub-station, distribution lines or capacity expanded after the notification of these Regulations shall be 70:30. Where equity employed is more than 30% the amount of equity shall be limited to 30% and the balance amount shall be considered as loans, advanced at the weighted average rate of interest and for weighted average tenor of the long term debt component of the investment
Provided that in case of a Generating Company or other licensees, where actual equity employed is less than 30%, the actual debt and equity shall be considered for determination of return on equity in tariff computation. 3.157 Based on the above submissions, Commission is not allowing return on equity for TANGEDCO during the control period due to following reasons: i. ii. Commission has approved interest on total outstanding loans as on November 2010 Based on available sources of funding, equity has been diverted towards revenue account from FY 2003 and hence the addition in equity base as per audited accounts is on account of funding the revenue expenditure and not for creation of capital assets. Loans approved for funding the capital expenditure for generating stations and distribution business during the control period are without considering the equity
iii.
Interest on Working Capital 3.158 TANGEDCO has claimed interest on working capital for its generating stations and distribution based on norms specified in the TNERC Tariff Regulations, 2005.
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3.159 Commission has not approved the interest on working capital in its last order as it has approved interest expenses corresponding to total loans including short term borrowings. However TANGEDCO has claimed interest expenses for short term borrowings separately and claimed interest on working capital. Commission is of the view that it is appropriate to approve and segregate the loans based on purpose and in accordance with its Tariff Regulations. Hence, Commission approves the interest expenses based on its Tariff Regulations and relevant guidelines are reproduced below: 26. Working Capital
(2)
Till such a formula is evolved, the norms for Working Capital shall be as below: (a) For Coal based / Lignite fired Generating Stations (i) Cost of coal or lignite for one and half month for pit head generating stations and two months for non pit head generating stations corresponding to the target availability; (ii) Cost of secondary fuel oil for two months corresponding to the target availability; (iii) Operation and Maintenance expenses for one month; (iv) Maintenance spares @ 1% of the historical cost escalated @ 6% per annum from the date of commercial operation; and (v) Receivables equivalent to two months of fixed and variable charges for sale of electricity calculated on .target availability. (b) For Gas Turbine / combined cycle Generating Stations (i) Fuel cost for one month corresponding to the target availability duly taking into account the mode of operation of the Generating Station on gas fuel and liquid fuel; (ii) Liquid fuel stock for half month; (iii) Operation and Maintenance expenses for one month; (iv)Maintenance spares @ 1% of the historical cost escalated @ 6% per annum from the date of commercial operation; and (v) Receivables equivalent to two months of fixed and variable charges for sale of electricity calculated on target availability. (c) For Hydro Power Generating Stations The working Capital shall cover: (i) Operation and Maintenance expenses for one month; (ii) Maintenance spares @ 1% of the historical cost escalated @ 6% per annum from the date of commercial operation; and (iii) Receivables equivalent to two months of fixed charges for sale of electricity, calculated on normative capacity index. (e) For Distribution System (i) Operation and Maintenance expenses for one month (ii) Maintenance spares for two months based on annual requirement considered at 1% of the gross fixed cost at the beginning of the year. (iii) Receivable equivalent to sixty day consumption charges.
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27. Interest on Working Capital The short term rate of interest on working capital shall be on normative basis and shall be equivalent to the primary lending rate of State Bank of India as on 1st April of the relevant year. 3.160 Commission has observed that TANGEDCO has estimated the working capital requirement for generating stations based on norms specified by Commission. However, Commission has re-estimated the interest on working capital for generating stations considering the variable costs and fixed costs approved in this Order and interest rates as submitted by TANGEDCO. 3.161 Commission has considered the interest rates as submitted by TANGEDCO as they were in accordance with the Regulations. The interest on working capital approved by the Commission for generating stations during the first control period is tabulated below.
Table 71: Interest on working capital approved by the Commission during the control period (Rs. Cr) Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS NCTPS Stage-II MTPS Stage-III Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Erode HEP - (incl. Bhavani Barrage and Bhavani Khattai) Kadamparai HEP Kundah HEP Tirunelveli HEP (incl - Periyar) Total Generation FY 2010-11 Petition 10.67 37.9 30 18.59 1.35 1 3.06 2.15 2.72 0.71 1.78 2.92 Commission 10.73 32.49 29.45 19.73 FY 2011-12 Petition 21.6 124.4 99.96 52.58 7.16 4.83 5.06 8.63 6.75 4.20 3.41 8.68 Commission 18.83 115.83 97.84 54.89 FY 2012-13 Petition 25.62 123.43 91.73 63.7 12.53 8.34 3.52 3.92 14.61 6.78 2.83 2.06 10.48 Commission 20.31 129.86 97.10 73.63
1.62
1.67
4.49
4.00
8.44
5.01
0.77 1.48 0.99 109.58
0.89 2.37 1.01 106.48
2.07 4.66 2.76 338.19
2.10 5.76 2.48 324.76
2.74 6.07 4.72 369.37
2.54 6.95 3.10 360.65
3.162 For distribution business, TANGEDCO has claimed the working capital requirement based on norms approved by the Commission except for maintenance spares. The working capital requirement for maintenance spares has been claimed at 1% of GFA instead of two months of the annual requirement as per Regulations. Also, TANGEDCO has not taken into account the consumer security deposits for arriving at the working capital requirement.
3.163 Commission has approved the interest on consumer security deposit under interest on loans and hence Commission is of the view that interest on working capital for distribution business can only be allowed on working capital requirement above the consumer security deposits. 3.164 Consumer security deposits upto FY 2011-12 are taken as per audited accounts and for FY 2012-13 they are projected based on historical trend in increase of consumer security deposit. The working capital requirement and available consumer security deposit for the control period is tabulated below.
Table 72: Approved working capital requirement and available consumer security deposits during the control period (Rs. Cr) Parameter Working Capital requirement Average available consumer security deposits FY 2010-11 3,400.81 4,921.09 FY 2011-12 3,536.39 5,335.35 FY 2012-13 4,231.27 5,842.57
3.165 From the above table it can be observed that available consumer security deposits are more than the working capital requirement. In view of this Commission is not approving any interest on working capital as it has already approved interest on consumer security deposits to the extent of working capital requirement under interest and finance charges.
Table 73: Interest on working capital approved during the control period (Rs. Cr) Parameter Distribution FY 2010-11 Petition 164.38 Commission 0.00 FY 2011-12 Petition 465.91 Commission 0.00 FY 2012-13 Petition 700.88 Commission 0.00
Other Debits 3.166 TANGEDCO in its Petition has included the other fuel costs, lubricants and consumable and water costs in other debits for generating stations. In response to Commissions query regarding this discrepancy, TANGEDCO has made the following submissions i. Cost of water, other fuel costs and lubricants and consumables are part of operating expenses of power stations of TANGEDCO and these expenses were not claimed under fuel expenses or repairs and maintenance expenses, and therefore have been included in other debits. TANGEDCO requested the Commission to allow these expenses as they are operating expenses for generation of power. The cost of Rs. 68.17 Crs and Rs. 20.60 Crs towards other debits for Kuttalam GTPS and VGTPS is due to minimum guarantee off take of natural gas and transmission charges for supply of gas. TANGEDCO confirmed that these expenses were not claimed in the fuel costs as a part of variable costs.
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ii.
3.167 However, Commission is not considering the submission of TANGEDCO due to following reasons: i. Commission is of the view that though TANGEDCO has not included the operating expenses claimed in other debits in its O&M expenses, these expenses cannot be allowed as Commission has already approved the O&M expenses, which are controllable expenses, in its last order in accordance to its Regulations. Hence, approving additional operating expenses under other debits is not appropriate and the increased expenses on account of controllable parameters will be inaptly passed on to the consumers. Based on the prior period expenses submitted by TANGEDCO, Commission has observed that minimum guarantee charges were reversed and has been accounted as prior period income in FY 12. Hence, Commission is not allowing the expenses due to minimum guarantee off take charges in other debits.
ii.
3.168 Based on above submissions, Commission has considered other debits for generating stations as approved in last order and has not allowed increase in other debits due to minimum guarantee off take of natural gas and other operational charges. The approved other debits in this order by the Commission is tabulated below.
Table 74: Other debits approved by the Commission for generating stations (Rs. Cr) FY 2010-11 Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Erode HEP - (incl. Bhavani Barrage and Bhavani Khattai) Kadamparai HEP Kundah HEP Tirunelveli HEP (incl - Periyar) Total Generation Last Order 0.08 0.13 0.08 0.13 0.04 0.03 0.04 0.04 Petition 3.90 1.61 3.58 9.17 0.44 68.21 0.01 20.60 Comm. 0.08 0.13 0.08 0.13 0.04 0.03 0.04 0.04 Last Order 0.20 0.30 0.20 0.40 0.10 0.06 0.10 0.20 FY 2011-12 Petition 11.65 7.11 1.57 24.16 0.47 0.13 0.05 0.00 Comm. 0.20 0.30 0.20 0.40 0.10 0.06 0.10 0.20 Last Order 0.20 0.30 0.20 0.40 0.10 0.06 0.10 0.20 FY 2012-13 Petition 12.11 7.40 1.63 25.12 0.49 0.13 0.05 0.00 Comm. 0.20 0.30 0.20 0.40 0.10 0.06 0.10 0.20
0.05
0.04
0.05
0.12
0.10
0.12
0.12
0.10
0.12
0.04 0.08 0.04 0.78
(0.06) 0.06 0.95 108.50
0.04 0.08 0.04 0.78
0.10 0.20 0.10 2.08
0.00 0.15 2.84 48.23
0.10 0.20 0.10 2.08
0.10 0.20 0.10 2.08
0.00 0.16 2.95 50.15
0.10 0.20 0.10 2.08
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3.169 For distribution business, TANGEDCO has included extraordinary debits and DSM under other debits. However TANGEDCO in its Petition has not provided any adequate information pertaining to these expenses. 3.170 On review of audited accounts it was observed that there was extraordinary credit corresponding to extraordinary debits and TANGEDCO has claimed the expenses under other debits without considering this credit. Hence, Commission is not allowing this expense in other debits and directs TANGEDCO to reconcile expenses pertaining to extraordinary items appropriately. 3.171 For DSM, TANGEDCO has claimed Rs. 10 Cr in FY 2012-13 as expense under other debits. Commission is approving expenses for DSM under separate head and it is inappropriate to include the expenses on this account in other debits. Also, TANGEDCO has not provided any information regarding DSM measures taken by it and how this provision of Rs. 10 Cr was utilized and further keeping in view that FY 2012-13 is already over, Commission is not allowing any DSM expenses. 3.172 Based on the above submissions, the other debits approved by the Commission are tabulated below.
Table 75: Other Debits approved by the Commission (Rs. Cr) FY 2010-11 Parameter Distribution Last Order 11.68 Petition 10.76 Comm. 10.76 Last Order 28.57 FY 2011-12 Petition 37.97 Comm. 14.26 Last Order 29.14 FY 2012-13 Petition 26.90 Comm. 16.90
Prior Period Expenses 3.173 TANGEDCO in its Petition has claimed for net prior period expenses of Rs. 1052 Crs in FY 12. TANGEDCO has further submitted that these expenses pertaining to prior period for power purchase, revision in tariff payments and fuel price adjustment to central generating stations, employee cost, interest and finance charges and other charges. 3.174 However on review of audited accounts for FY 12, it was observed that net prior period expenses were only Rs. 576.81 Crs. In response to data gaps, TANGEDCO has revised the prior period expenses as per audited accounts and submitted the detailed break-up for Rs. 576.81 Crs. 3.175 In the last order Commission has not allowed any prior period expenses as these were charges corresponding prior to functioning of TANGEDCO and was of the opinion prior period charges should be addressed in the financial restructuring plan by TANGEDCO.
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3.176 On review of prior period expenses data submitted by TANGEDCO and during the discussions with TANGEDCO officials it was inferred that entire net prior period expenses was due to expenses corresponding prior to FY 11. Hence in this order Commission is truing up the expenses after formation of TANGEDCO, and is not allowing the net prior period expenses that have been sought by TANGEDCO. Demand Side Management 3.177 The Commission in its last tariff order has provisionally allowed Rs.10 Crores in the ARR for the purpose of carrying out the activities of Energy Conservation and Demand Side Management (DSM) in FY 13. 3.178 TANGEDCO in its Petition has claimed expenses towards DSM during FY 13 under other debits. However, it has not provided any justification or details of DSM measures carried out due to which it has incurred Rs. 10 Cr of expenditure. Hence, Commission is not allowing the DSM expenses of Rs. 10 Cr in FY 13 Contribution for Contingency reserves 3.179 TANGEDCO has claimed contingency reserve at 0.25% of GFA in FY 13 in accordance to TNERC MYT Regulations. Regulation 35 of the MYT Regulations 2009, To meet out any contingent liability or unforeseen revenue losses, the Distribution licensees shall maintain a contingency reserve. The Distribution Licensees shall estimate the contingency reserve on the value of Assets for each year of the control period. Regulation 31 of the Tariff Regulations 2005, The Generating Companies and the licensees shall provide and maintain a contingency reserve upto 0.5% of the value of assets at the beginning of the year and the provision made for the year will be allowed in their Revenue Requirement. This reserve will be utilised to meet any contingent liability or unforeseen revenue losses. 3.180 It is pertinent to mention that provision for contingency reserve is appropriate when utility is in revenue surplus and some portion of this surplus revenue can be contributed for contingency reserve. However, in the current petition, TANGEDCO has shown a revenue gap of Rs. 9719 Crs in FY 13 and in this situation it is inapt to allow the expenses on account of contingency reserve. Hence, Commission disallows the contingency reserve as claimed by TANGEDCO.
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Summary of fixed Cost approved for Distribution function 3.181 Based on above submissions, the summary of fixed cost approved for distribution function is tabulated below:
Table 76: Summary of fixed costs for Distribution business approved by the Commission for the first control period (Rs. Cr) Last Tariff Order Particulars Operation and Maintenance Expenses Depreciation Interest and other finance charges Other Debits Prior Period Debit/(Credit) Charges Reasonable Return / Return on Equity Interest on Working Capital Demand side management Contribution for contingency reserve Total FY 11 1093 95 688 12 0 0 0 0 0 1888 FY 12 2728 254 3150 29 0 0 0 0 0 6161 FY 13 2837 287 3355 29 0 0 0 10 0 6518 0 2436 0 7645 72 7263 FY 11 1388 115 693 11 0 65 164 Petition FY 12 3652 284 1917 38 1052 236 466 FY 13 3691 303 2139 27 0 331 701 FY 11 1282 110 495 11 0 0 0 0 0 1898 Commission FY 12 3327 273 1053 14 0 0 0 0 0 4667 FY 13 3477 302 1329 17 0 0 0 0 0 5125
Expenses on account of Generation

3.182 In this Section, the Commission in accordance with TNERC (Terms and Conditions for determination of Tariff) Regulations, 2005 has analysed the expenses on account of Generation business of TANGEDCO from FY 2010-11 to FY 2012-13 and with reference to the Tariff Order dated March 31, 2012. 3.183 In respect of components of Tariff for Generating Stations, Regulation-36 of TNERC Tariff Regulations, 2005 states as under: 36. Components of Tariff 1. The tariff for sale of power by the Generating Companies shall be of two part namely the Fixed Charges (recovery of annual capacity charges) and variable (energy) charges. 2. The Fixed (annual capacity) charges shall consist of the following elements: a) Interest on Loan Capital; b) Depreciation c) Return on Equity; d) Operation and Maintenance expenses; and
e) Interest on Working Capital: 3. The energy (variable) charges shall cover fuel cost. 3.184 Commission in accordance with its regulations is approving the capacity charges and variable cost on account of own generating stations and approach for the same is detailed below. Capacity charges for own generating stations 3.185 In above sections, Commission has approved the fixed expenses with respect to generating stations for the first control period. a) O&M expenses Refer to Table 52, Table 53 and Table 54 b) Depreciation Refer to Table 59 c) Interest on long term loans Refer to Table 66 d) Return on Equity Refer to Point 3.157 e) Interest on Working Capital Refer to Table 71 f) Other Debits Refer to Table 74 3.186 With respect to other income, Commission has observed that though TANGEDCO has changed the approach regarding sharing of other income between generating stations and distribution business, the total other income proposed by TANGEDCO is in accordance with audited accounts. Hence, Commission is accepting the other income as proposed by TANGEDCO in its Petition for generating stations. 3.187 For new thermal stations, Commission is not approving any fixed cost for the first control period as none of the new thermal stations have been commissioned in the first control period. For new hydro stations, TANGEDCO has included their fixed costs in the fixed costs of respective hydro generating circles and hence Commission is not separately approving the fixed costs for new hydro stations. 3.188 Based on above submissions, the summary of fixed expenses for own generating stations as proposed by TANGEDCO and approved by the Commission in this order for the first control period are tabulated below.
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ETPS
Table 77: Fixed charges approved for ETPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Total FY 2011 25.42 3.33 6.67 39.63 0.00 0.08 0.00 1.71 73.42 Last Order FY FY 2012 2013 61.00 61.00 9.00 22.00 98.91 0.00 0.20 0.00 6.00 185.11 8.00 29.00 102.86 0.00 0.20 0.00 6.00 195.06 FY 2011 15.77 15.06 8.62 40.73 10.67 3.90 0.00 9.88 84.87 Petition FY 2012 37.79 41.50 26.81 109.34 21.60 11.65 -0.03 26.37 222.29 FY 2013 37.80 9.40 32.94 120.48 25.62 12.11 0.00 27.42 210.93 FY 2011 15.60 51.91 0.00 42.05 10.73 0.08 0.00 9.88 110.49 Commission FY FY 2012 2013 37.45 37.46 98.62 0.00 104.72 18.83 0.20 0.00 26.37 233.44 106.03 0.00 110.28 20.31 0.20 0.00 27.42 246.86
TTPS
Table 78: Fixed charges approved for TTPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Total Last Order FY FY FY 2011 2012 2013 22.08 54.00 56.00 5.83 12.50 44.70 0.00 0.13 0.00 7.83 77.41 15.00 39.00 111.57 0.00 0.30 0.00 13.90 205.97 16.00 53.00 116.03 0.00 0.30 0.00 13.90 227.43 FY 2011 27.12 67.73 15.07 60.92 37.90 1.61 0.00 21.93 188.42 Petition FY 2012 64.49 146.08 47.06 190.72 124.40 7.11 0.04 41.63 538.27 FY 2013 64.72 98.62 58.14 208.29 123.43 7.40 0.00 43.30 517.30 Commission FY FY FY 2011 2012 2013 26.65 64.21 64.45 63.86 0.00 56.51 32.49 0.13 0.00 21.93 157.70 120.48 0.00 142.19 115.83 0.30 0.00 41.63 401.38 130.98 0.00 154.00 129.86 0.30 0.00 43.30 436.30
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MTPS
Table 79: Fixed charges approved for MTPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Total FY 2011 15.83 3.33 6.67 34.51 0.00 0.08 0.00 9.08 51.34 Last Order FY FY 2012 2013 40.00 40.00 9.00 22.00 86.13 0.00 0.20 0.00 14.10 143.23 9.00 29.00 89.57 0.00 0.20 0.00 14.10 153.67 FY 2011 14.29 29.28 9.36 48.08 30.00 3.58 0.00 17.16 117.43 Petition FY 2012 36.04 89.46 28.88 102.59 99.96 1.57 3.08 40.06 321.51 FY 2013 36.47 41.49 37.17 115.05 91.73 1.63 0.00 41.66 281.88 FY 2011 14.20 31.59 0.00 47.84 29.45 0.08 0.00 17.16 106.00 Commission FY FY 2012 2013 36.04 35.35 62.18 0.00 116.60 97.84 0.20 0.00 40.06 272.80 69.73 0.00 126.82 97.10 0.20 0.00 41.66 287.54
NCTPS
Table 80: Fixed charges approved for NCTPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Total FY 2011 25.42 6.25 13.33 50.58 0.00 0.13 0.00 5.92 89.79 Last Order FY FY 2012 2013 63.00 64.00 16.00 42.00 126.24 0.00 0.40 0.00 10.70 236.94 16.00 56.00 131.29 0.00 0.40 0.00 10.70 256.99 FY 2011 25.77 89.16 16.66 46.72 18.59 9.17 0.00 9.77 196.30 Petition FY 2012 61.66 249.07 51.52 116.00 52.58 24.16 -0.65 19.62 534.74 FY 2013 63.67 185.79 63.98 128.37 63.70 25.12 0.00 20.40 510.23 FY 2011 25.67 56.88 0.00 50.22 19.73 0.13 0.00 9.77 142.86 Commission FY FY 2012 2013 61.66 62.50 105.15 0.00 117.65 54.89 0.40 0.00 19.62 320.13 113.20 0.00 129.25 73.63 0.40 0.00 20.40 358.57
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TKGTPS
Table 81: Fixed charges approved for TKGTPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Total FY 2011 8.33 1.25 2.92 3.10 0.00 0.04 0.00 0.00 15.64 Last Order FY FY 2012 2013 21.00 21.00 4.00 9.00 7.74 0.00 0.10 0.00 0.10 41.74 4.00 13.00 8.05 0.00 0.10 0.00 0.10 46.05 FY 2011 6.66 27.86 3.69 2.73 1.35 0.44 0.00 0.02 42.70 Petition FY 2012 15.90 74.73 11.47 10.06 7.16 0.47 0.00 1.55 118.25 FY 2013 15.90 64.17 14.09 10.95 8.34 0.49 0.00 1.61 112.33 FY 2011 6.62 22.67 0.00 2.82 2.72 0.04 0.00 0.02 34.86 Commission FY FY 2012 2013 15.90 16.03 43.34 0.00 7.91 6.75 0.10 0.00 1.55 72.46 47.00 0.00 8.50 6.78 0.10 0.00 1.61 76.81
KGTPS
Table 82: Fixed charges approved for KGTPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Total FY 2011 6.67 1.25 2.50 8.61 0.00 0.03 0.00 0.00 19.05 Last Order FY FY 2012 2013 16.00 17.00 3.00 7.00 17.04 0.00 0.06 0.00 0.01 43.09 3.00 10.00 17.72 0.00 0.06 0.00 0.01 47.77 FY 2011 5.17 21.39 2.83 0.82 1.00 68.21 0.00 0.01 99.41 Petition FY 2012 12.32 57.51 8.84 7.14 4.83 0.13 0.01 0.01 90.77 FY 2013 12.32 49.52 11.19 7.78 3.52 0.13 0.00 0.01 84.45 FY 2011 5.13 19.22 0.00 1.52 0.71 0.03 0.00 0.01 26.59 Commission FY FY 2012 2013 12.32 12.82 37.14 0.00 9.82 4.20 0.06 0.00 0.01 63.53 49.18 0.00 9.30 2.83 0.06 0.00 0.01 74.17
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BBGTPS
Table 83: Fixed charges approved for BBGTPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Total FY 2011 12.50 1.67 3.75 2.49 0.00 0.04 0.00 0.00 20.45 Last Order FY FY 2012 2013 30.00 30.00 4.00 11.00 6.22 0.00 0.10 0.00 0.10 51.22 4.00 15.00 6.47 0.00 0.10 0.00 0.10 55.67 FY 2011 8.26 27.59 4.42 2.72 3.06 0.01 0.00 0.12 45.93 Petition FY 2012 19.81 77.30 13.80 5.69 5.06 0.05 0.01 0.20 121.54 FY 2013 19.81 61.94 17.01 6.32 3.92 0.05 0.00 0.20 108.86 FY 2011 8.22 10.35 0.00 2.34 1.78 0.04 0.00 0.12 22.61 Commission FY FY 2012 2013 19.81 19.81 18.69 0.00 5.92 3.41 0.10 0.00 0.20 47.74 18.54 0.00 6.38 2.06 0.10 0.00 0.20 46.69
VGTPS
Table 84: Fixed charges approved for VGTPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Total FY 2011 11.25 1.67 3.75 3.45 0.00 0.04 0.00 0.04 20.12 Last Order FY FY 2012 2013 43.00 46.00 7.00 15.00 8.62 0.00 0.20 0.00 0.10 73.72 7.00 24.00 8.96 0.00 0.20 0.00 0.10 86.06 FY 2011 8.00 34.72 4.60 21.06 2.15 20.60 0.00 0.01 91.12 Petition FY 2012 19.11 93.38 14.18 7.95 8.63 0.00 0.04 0.05 143.25 FY 2013 19.11 85.37 17.32 8.88 14.61 0.00 0.00 0.05 145.25 FY 2011 7.96 40.60 0.00 5.48 2.92 0.04 0.00 0.01 56.99 Commission FY FY 2012 2013 19.11 19.48 93.72 0.00 14.04 8.68 0.20 0.00 0.05 135.71 107.47 0.00 15.07 10.48 0.20 0.00 0.05 152.65
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Erode Hydro Generation Circle

Table 85: Fixed charges approved for Erode Hydro Generation Circle (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Total FY 2011 5.83 2.08 4.58 14.34 0.00 0.05 0.00 0.04 26.85 Last Order FY FY 2012 2013 14.00 25.00 5.00 14.00 35.79 0.00 0.12 0.00 0.42 68.49 9.00 26.00 37.22 0.00 0.12 0.00 0.42 96.92 FY 2011 8.49 31.73 5.93 11.10 1.62 0.04 0.00 0.21 58.71 Petition FY 2012 20.36 80.03 18.28 26.52 4.49 0.10 0.00 0.26 149.53 FY 2013 20.39 160.05 33.45 29.83 8.44 0.10 0.00 0.27 251.99 FY 2011 8.48 39.52 0.00 12.14 1.67 0.05 0.00 0.21 61.63 Commission FY FY 2012 2013 20.36 20.41 75.13 0.00 28.87 4.00 0.12 0.00 0.26 128.23 83.86 0.00 35.07 5.01 0.12 0.00 0.27 144.21
Kadamparai Hydro Generation Circle

Table 86: Fixed charges approved for Kadamparai Hydro Generation Circle (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Total FY 2011 3.75 1.25 2.50 8.03 0.00 0.04 0.00 0.08 15.48 Last Order FY FY 2012 2013 9.00 10.00 3.00 7.00 20.03 0.00 0.10 0.00 0.30 38.83 3.00 10.00 20.83 0.00 0.10 0.00 0.30 43.63 FY 2011 4.40 5.40 2.94 10.88 0.77 -0.06 0.00 0.08 24.24 Petition FY 2012 10.52 17.42 9.16 22.05 2.07 0.00 -1.70 0.30 59.21 FY 2013 10.53 27.21 11.27 24.32 2.74 0.00 0.00 0.31 75.75 FY 2011 4.38 17.34 0.00 9.26 0.89 0.04 0.00 0.08 31.84 Commission FY FY 2012 2013 10.52 10.58 32.98 0.00 19.82 2.10 0.10 0.00 0.30 65.22 35.82 0.00 21.72 2.54 0.10 0.00 0.31 70.44
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Kundah Hydro Generation Circle

Table 87: Fixed charges approved for Kundah Hydro Generation Circle (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Total FY 2011 9.17 2.92 6.25 16.13 0.00 0.08 0.00 0.33 34.21 Last Order FY FY 2012 2013 22.00 23.00 8.00 20.00 37.34 0.00 0.20 0.00 1.00 86.54 8.00 26.00 38.83 0.00 0.20 0.00 1.00 95.03 FY 2011 10.46 7.50 7.75 15.18 1.48 0.06 0.00 0.83 41.60 Petition FY 2012 25.16 46.01 24.14 35.91 4.66 0.15 0.17 1.08 135.12 FY 2013 25.24 64.56 29.79 39.86 6.07 0.16 0.00 1.12 164.56 FY 2011 10.45 60.22 0.00 16.70 2.37 0.08 0.00 0.83 89.00 Commission FY FY 2012 2013 25.16 25.16 115.65 0.00 41.88 5.76 0.20 0.00 1.08 187.57 126.75 0.00 44.93 6.95 0.20 0.00 1.12 202.86
Tirunelvelli Hydro Generation Circle

Table 88: Fixed charges approved for Tirunelvelli Hydro Generation Circle (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Total FY 2011 2.92 0.83 2.08 9.70 0.00 0.04 0.00 0.50 15.08 Last Order FY FY 2012 2013 9.00 10.00 3.00 8.00 24.22 0.00 0.10 0.00 1.70 42.62 4.00 12.00 25.19 0.00 0.10 0.00 1.70 49.59 FY 2011 4.35 17.00 2.49 9.66 0.99 0.95 0.00 0.57 34.86 Petition FY 2012 10.99 41.68 8.18 24.19 2.76 2.84 1.00 3.79 87.84 FY 2013 11.14 85.17 12.74 27.50 4.72 2.95 0.00 3.94 140.28 FY 2011 4.33 22.57 0.00 9.92 1.01 0.04 0.00 0.57 37.28 Commission FY FY 2012 2013 10.99 11.44 44.62 0.00 24.76 2.48 0.10 0.00 3.79 79.15 51.04 0.00 27.16 3.10 0.10 0.00 3.94 88.90
3.189 The recovery of capacity charges are governed by Regulation-42 of TNERC Tariff Regulations, 2005 which states as under: 42. Recovery of Capacity Charges 1. Full capacity charges (Fixed Charges) shall be recoverable at target availability specified in clause (1) of Regulation 37.
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2. Recovery of capacity charges below the level of target availability will be on pro rata basis. At zero availability, no capacity charges shall be payable. 3.190 The above capacity charges as determined by the Commission are to be recovered when TANGEDCO is able to meet the target in terms of norms set by the Commission. The norms specified for recovery of fixed charges as per TNERC regulation are stipulated below: 37. Norms of Operation The norms of operation for the Thermal Generating Stations shall be as under: (i) Target availability for recovery of full capacity (fixed) charges (a) All Thermal Generating stations in Tamil Nadu except Ennore Thermal Power Generating Station 80% (b) Ennore Thermal Power Generating Station 50% (Till Renovation and Modernization works in all units are completed) ......... 3.191 Commission is of the view that there cannot be marked differences in plant availability factor and plant load factor for own generation stations except for BBGTPS due to following reasons: a) Commission in its last order has not considered power generation from own stations under merit order dispatch. b) Due to prevailing power-deficit in the state, it is unlikely that SLDC may ask the own generating stations to back down. c) Also, TANGEDCO has not submitted any data regarding the backing down of own generating stations. 3.192 Commission is allowing fixed charges for own generating stations on pro-rata basis with respect to actual PLFs achieved. Based on the performance of the generating stations it has been observed that all the gas based stations have not met the performance targets while ETPS, TTPS (for FY 2010-11) were the coal based stations that did not meet the targets set. 3.193 The Commission is of the view that as all these Stations fall outside the merit order despatch, the non-availability of these Power Stations leads to costly power purchase from other sources which gets reflected in power purchase cost in the ARR. Hence, Commission is adopting the similar approach as adopted in the last tariff order and is allowing the capacity charges only to the extent of actual performance of the generating stations. The actual PLFs achieved and allowable capacity charges for the control period are tabulated below:
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Table 89: Targets availability and actual PLF achieved by own generating stations Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Tirumakottai GTPS Kuttalum GTPS Valathur - GTPS Targets 50.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% FY 2010-11 36.76% 75.88% 86.06% 89.61% 74.45% 0.00% 47.24% FY 2011-12 22.61% 85.57% 92.77% 84.81% 74.48% 46.58% 67.16% FY 2012-13 18.66% 90.08% 84.26% 91.66% 76.78% 6.21% 57.19%
Table 90: Allowable capacity charges for the first control period (Rs. Cr) Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Tirumakottai GTPS Kuttalum GTPS Basin Bridge GTPS Valathur - GTPS Total Approved Capacity Charges FY 2010-11 110.49 157.70 106.00 142.86 34.86 26.59 22.61 56.99 658.10 FY 2011-12 233.44 401.38 272.80 320.13 72.46 63.53 47.74 135.71 1547.19 FY 2012-13 246.86 436.30 287.54 358.57 76.81 74.17 46.69 152.65 1679.59 Allowable Capacity Charges FY 2010-11 81.24 149.58 106.00 142.86 32.44 0.00 22.61 33.65 568.39 FY 2011-12 105.56 401.38 272.80 320.13 67.46 36.99 47.74 113.92 1365.98 FY 2012-13 92.14 436.30 287.54 358.57 73.72 5.76 46.69 109.13 1409.84
Variable cost for own generating stations 3.194 The Commission has worked out the variable cost for various generating stations on the basis of data submitted in the petition and the subsequent submission of TANGEDCO vide replies to the data gaps raised by the Commission. The variable cost as determined by the Commission in respect of various generating stations of TANGEDCO is detailed as under: Coal based generating stations 3.195 As per Regulation 43 (ii) of the Tarff Regulation, the Energy (Variable) charges shall be worked out on the basis of ex-bus energy delivered / sent out from the generating station. Rate of energy charges is based on the following elements: a) Price of primary fuel b) Quantum of primary fuel (coal) in kg required for generation of one kWh of electricity at generator terminals, which shall be computed on the basis of Gross Station Heat Rate (less heat contributed by secondary fuel oil) and gross calorific value of coal. c) Price of secondary fuel oil d) Normative quantity of secondary fuel
e) Normative auxiliary consumption The above elements have been discussed in detail as under: Price of primary fuel 3.196 Commission in its last order has approved the fuel cost for FY 2010-11 based on actual landed cost submitted in the Petition and for FY 2011-12 and FY 2012-13 based on monthly coal prices submitted by TANGEDCO upto November 2011. 3.197 TANGEDCO in its Petition has submitted the station wise actual cost of fuel for FY 2010-11 and FY 2011-12 while estimated the fuel cost for FY 2012-13. The prices of primary fuel approved by the Commission in its last tariff order and filed by TANGEDCO in its current MYT Petition are tabulated below:
Table 91: Coal price in Rs./Tonne approved by the Commission in last order and filed by TANGEDCO in its current Petition Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS As per last year tariff order FY 2010-11 2278 3130 3084 2559 FY 2011-12 2261 3814 3395 2939 FY 2012-13 2261 3814 3395 2939 FY 2010-11 2552 3022 3071 2559 Petition FY 2011-12 2507 4057 4196 3188 FY 2012-13 2452 4279 3721 3199
3.198 In response to additional information sought by the Commission, TANGEDCO has submitted the actual landed fuel cost and blending ratio of its coal based plants in FY 2012-13. The actual fuel cost data submitted by TANGEDCO is given below.
Table 92: Revised landed cost of coal for FY 2012-13 as submitted by TANGEDCO Power Plant ETPS TTPS MTPS NCTPS Landed Cost of Coal (in Rs./Tonne) 2,841 3,659 3,916 3,407 Blending Ratio 100:0 81:19 72:28 74:26
3.199 Since TANGEDCO has submitted the actual landed cost for FY 2010-11 and FY 2011-12, Commission has considered the TANGEDCOs submission while for FY 2012-13 Commission has considered the landed cost for FY 2012-13 based on revised submission of TANGEDCO. The fuel cost approved by the Commission for the first control period is tabulated below:
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Table 93: Landed cost approved by the Commission Rs./Tonne Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Petition FY 2010-11 2552 3022 3071 2559 FY 2011-12 2507 4057 4196 3188 FY 2012-13 2452 4279 3721 3199 FY 2010-11 2552 3022 3071 2559 Commission FY 2011-12 2507 4057 4196 3188 FY 2012-13 2841 3659 3916 3407
Gross calorific value 3.200 In its Petition TANGEDCO has submitted the actual gross calorific value of its coal based stations for FY 2010-11 and FY 2011-12 and estimated the calorific value for FY 2012-13. In reply to additional data sought by the Commission, TANGEDCO has submitted the actual gross calorific value for its coal based stations in FY 2012-13. In support TANGEDCO has also submitted the calculations for arriving at the average GCV based on monthly consumption of imported and domestic coal.
Table 94: Revised GCV of coal submitted by TANGEDCO for FY 2012-13 Power Plant ETPS TTPS MTPS NCTPS GCV of Coal (in kCal/kg) 3,235 3,405 3,551 3,615
3.201 Since TANGEDCO has submitted the actual calorific value for FY 2010-11 and FY 2011-12, Commission has considered the TANGEDCOs submission while for FY 2012-13 Commission has accepted the revised submission of TANGEDCO. The gross calorific value considered by the Commission for the first control period is tabulated below:
Table 95: Gross calorific value of coal approved by the Commission kCal/kg Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Petition FY 2010-11 2822 3210 3048 3459 FY 2011-12 3213 3486 3562 3768 FY 2012-13 3190 4320 3562 3585 FY 2010-11 2822 3210 3048 3459 Commission FY 2011-12 3213 3486 3562 3768 FY 2012-13 3235 3405 3551 3615
Station heat rate 3.202 TANGEDCO in its Petition sought relaxation is station heat rate (SHR) and submitted the following major reasons for request of higher SHR:
a) Degradation in performance due to ageing b) Partial loading of machines c) Usage of high ash content and inferior coal 3.203 However, Commission is of the view that the reasons specified by TANGEDCO are not justifiable due to following reasons: a) Degradation in performance due to ageing: Commission is allowing the R&M expenses in accordance to its regulations that can be used for maintaining the generating stations properly. Also for ETPS major capital investment has been incurred without any commensurate benefits. Hence, Commission is not considering any relaxation for ETPS. Similarly, Commission is not allowing any relaxation in respect of other stations especially when capital expenditure claimed is being allowed. b) Partial loading of machines: TANGEDCO is required to properly manage its units to operate at appropriate loads and hence Commission is not inclined to accept this submission. Further when all units are dispatched to its full availability due to prevailing shortages, there is no justification for part load operation of the units. c) Usage of high ash content and inferior coal: TANGEDCO has submitted for TTPS usage of inferior and high ash content coal is one of the reasons for higher SHR. Commission is of the view that TANGEDCO is required to sort out the issue of receipt of inferior coal with the coal suppliers. Also, TANGEDCO has the responsibility to inspect and ensure that the coal received is of right quality. 3.204 Based on the above submissions, Commission is not accepting the relaxation sought by TANGEDCO on SHR and has considered the SHR as approved in its last tariff order for the purposes of calculating variable cost per unit.
Table 96: Station heat rate approved by the Commission (kCal/kWh) Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Last Order FY FY FY 11 12 13 3200 3200 3200 2500 2500 2466 2453 2500 2393 2453 2500 2393 Petition FY FY FY 11 12 13 3304 3905 4097 2901 2523 2533 2646 2549 2480 2705 2500 2481 Commission FY FY FY 11 12 13 3200 3200 3200 2500 2500 2466 2453 2500 2393 2453 2500 2393
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Auxiliary consumption and Secondary fuel oil consumption 3.205 In chapter A3, Commission has stated that it is considering the auxiliary consumption as proposed by the Petitioner only for arriving at the energy availability purposes. For the purpose of estimation of variable cost per unit, Commission has used the auxiliary consumption as approved in the last tariff order. However, for NCTPS and TTPS Commission in its last order based on TANGEDCOs submission has provisionally approved the auxiliary consumption as 4.35% and 10.11% for FY 2011-12. TANGEDCO in the current Petition has submitted the actual auxiliary consumption with respect to NCTPS and TTPS as 8.36% and 7.98% respectively. Commission is of the view that the auxiliary consumption considered in the last tariff order for NCTPS is too low while that for TTPS is on a higher side. In view of these discrepancies, Commission has considered auxiliary consumption of 8.50% in accordance with its tariff regulations for FY 2011-12.
Table 97: Auxiliary consumption considered by the Commission for the purpose of variable cost calculations Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Last Order FY 11 15.78% 8.31% 8.51% 8.89% FY 12 16.32% 10.11% 8.31% 4.35% FY 13 15.00% 8.50% 9.00% 8.50% FY 11 15.78% 8.28% 8.30% 8.70% Petition FY 12 16.70% 7.98% 8.26% 8.36% FY 13 15.00% 8.50% 8.34% 8.40% FY 11 15.78% 8.31% 8.51% 8.89% Commission FY 12 16.32% 8.50% 8.31% 8.50% FY 13 15.00% 8.50% 9.00% 8.50%
3.206 TANGEDCO in its Petition has proposed higher secondary fuel oil consumption for ETPS and TTPS while lower SFO consumption for MTPS and NCTPS. SFO consumption being a controllable parameter, in this true-up exercise Commission has considered the SFO consumption as approved in its last tariff order for all the coal based stations. The SFO consumption considered by the Commission for the first control period is given below:
Table 98: Secondary fuel oil consumption approved for the first control period (ml/kWh) Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Last Order FY 11 12.00 2.00 2.00 2.00 FY 12 10.00 2.00 2.00 2.00 FY 13 10.00 2.00 2.00 2.00 FY 11 12.20 5.95 0.98 1.10 Petition FY 12 10.60 1.97 0.52 0.73 FY 13 12.00 3.00 1.29 0.63 FY 11 12.00 2.00 2.00 2.00 Commission FY 12 10.00 2.00 2.00 2.00 FY 13 10.00 2.00 2.00 2.00
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Price of secondary fuel 3.207 TANGEDCO in its Petition has given the price of secondary fuel as per actual costs incurred during for FY 2010-11 and FY 2011-12 and estimated the secondary fuel oil price for FY 2012-13. In response to additional information sought by the Commission, TANGEDCO has submitted month wise actual cost of secondary fuel oil upto February 2013. The weighted average cost of secondary fuel for FY 2012-13 (Upto Feb 13) estimated by the Commission based on TANGEDCOs submission is tabulated below:
Table 99: Weighted average price of secondary fuel estimated by the Commission for FY 2012-13 (Rs./kL) Power Plant ETPS TTPS MTPS NCTPS Cost of secondary fuel 49112 47916 47417 47346
3.208 Commission is accepting the TANGEDCO submission of actual cost of secondary fuel for FY 2010-11 and FY 2011-12 while approving the cost of secondary fuel for FY 2012-13 based on the weighted average cost estimated by the Commission. The cost of secondary fuel approved by the Commission is tabulated below:
Table 100: Cost of secondary fuel approved by the Commission (Rs./kL) Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Last Order FY 11 30174 29839 28988 29753 FY 12 40361 37653 36900 39997 FY 13 40361 37653 36900 39997 FY 11 39426 33764 33764 30764 Petition FY 12 50691 42678 42678 38806 FY 13 50691 42678 42678 38806 FY 11 39426 33764 33764 30764 Commission FY 12 50691 42678 42678 38806 FY 13 49112 47916 47417 47346
GCV of the secondary fuel 3.209 TANGEDCO in its Petition has not submitted the GCV of secondary fuel considered for estimating the variable cost. In response to data gaps, TANGEDCO has submitted the GCV of the secondary fuel considered for arriving at the variable cost.
Table 101: GCV of secondary fuel submitted by TANGEDCO (kCal/lt) Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS FY 2010-11 10496 10570 10094 10340 FY 2011-12 10480 10560 10104 10359 FY 2012-13 10470 10645 10104 10385
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3.210 In addition TANGEDCO has also submitted the month wise actual GCV of the secondary fuel oil consumed at the power station in FY 2012-13 (upto Feb 2013). Based on the data submitted by TANGEDCO, Commission has arrived at the weighted average GCV of the secondary fuel for FY 2012-13.
Table 102: Weighted average GCV of secondary fuel estimated by the Commission for FY 2012-13 (kCal/Lt) Power Plant ETPS TTPS MTPS NCTPS Average GCV of secondary fuel 10502 10639 10466 10343
3.211 Commission is accepting the TANGEDCO submission of actual GCV of secondary fuel for FY 2010-11 and FY 2011-12 while approving the GCV of secondary fuel for FY 2012-13 based on the weighted average GCV estimated by the Commission. The GCV of secondary fuel approved by the Commission is tabulated below:
Table 103: GCV of secondary fuel approved by the Commission (kCal/lt) Last Order FY 11 10491 10547 10544 10341 FY 12 10491 10547 10544 10341 FY 13 10491 10547 10544 10341 TANGEDCO Submission FY 11 10496 10570 10094 10340 FY 12 10480 10560 10104 10359 FY 13 10470 10645 10104 10385 FY 11 10496 10570 10094 10340 Commission FY 12 10480 10560 10104 10359 FY 13 10502 10639 10466 10343
Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS
Variable Cost for Coal based stations 3.212 On the basis of above submissions, the Commission has calculated the variable cost for various coal based power stations of TANGEDCO which is tabulated as under. Commission has estimated the variable cost ex bus considering the entire fuel cost including oil.
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ETPS
Table 104: Variable Cost approved by the Commission for ETPS Description Capacity Gross Station Heat Rate Secondary fuel oil consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Specific consumption of coal Rate of energy from Coal Variable Cost - Gross Auxiliary Consumption Variable Cost - Ex bus Petition Previous Tariff Order Unit MW Kcal/kWh ml/kWh Kcal/l Kcal/Kg Rs./Kl Rs./MT Paisa/kWh Kcal/kWh Kcal/kWh Kg/kWh Paisa/kWh Paisa/kWh % Paisa/kWh Paisa/kWh Paisa/kWh 2010-11 450 3200 12.00 10496 2822 39426 2552 47.31 125.95 3074.05 1.09 277.99 325.30 15.78% 386.26 398.07 304.73 2011-12 450 3200 10.00 10480 3213 50691 2507 50.69 104.80 3095.20 0.96 241.51 292.20 16.32% 349.19 420.64 312.4 2012-13 450 3200 10.00 10502 3235 49112 2841 49.11 105.02 3094.98 0.96 271.80 320.92 15.00% 377.55 430.69 308.05
TTPS
Table 105: Variable cost approved by the Commission for TTPS Description Capacity Gross Station Heat Rate Secondary fuel oil consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Specific consumption of coal Rate of energy from Coal Variable Cost - Gross Auxiliary Consumption Variable Cost - Ex bus Petition Previous Tariff Order Unit MW Kcal/kWh ml/kWh Kcal/l Kcal/Kg Rs./Kl Rs./MT Paisa/kWh Kcal/kWh Kcal/kWh Kg/kWh Paisa/kWh Paisa/kWh % Paisa/kWh Paisa/kWh Paisa/kWh 2010-11 1050 2500 2.00 10570 3210 33764 3022 6.75 21.14 2478.86 0.77 233.37 240.12 8.31% 261.88 310.53 248.75 2011-12 1050 2453 2.00 10560 3486 42678 4057 8.54 21.12 2431.88 0.70 283.02 291.56 8.50% 318.64 340.56 303.57 2012-13 1050 2453 2.00 10639 3405 47916 3659 9.58 21.28 2431.72 0.71 261.31 270.90 8.50% 296.06 302.44 298.39
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MTPS
Table 106: Variable cost approved by the Commission for MTPS Description Capacity Gross Station Heat Rate Secondary fuel oil consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Specific consumption of coal Rate of energy from Coal Variable Cost - Gross Auxiliary Consumption Variable Cost - Ex bus Petition Previous Tariff Order Unit MW Kcal/kWh ml/kWh Kcal/l Kcal/Kg Rs./Kl Rs./MT Paisa/kWh Kcal/kWh Kcal/kWh Kg/kWh Paisa/kWh Paisa/kWh % Paisa/kWh Paisa/kWh Paisa/kWh 2010-11 840 2500 2.00 10094 3048 33764 3071 6.75 20.19 2479.81 0.81 249.85 256.61 8.51% 280.47 279.72 242.83 2011-12 840 2500 2.00 10104 3562 42678 4196 8.54 20.21 2479.79 0.70 292.12 300.65 8.31% 327.90 329.05 267.76 2012-13 840 2500 2.00 10466 3551 47417 3916 9.48 20.93 2479.07 0.70 273.39 282.87 9.00% 310.85 289.45 269.74
NCTPS
Table 107: Variable cost approved by the Commission for NCTPS Description Capacity Gross Station Heat Rate Secondary fuel oil consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Specific consumption of coal Rate of energy from Coal Variable Cost - Gross Auxiliary Consumption Variable Cost - Ex bus Petition Previous Tariff Order Unit MW Kcal/kWh ml/kWh Kcal/l Kcal/Kg Rs./Kl Rs./MT Paisa/kWh Kcal/kWh Kcal/kWh Kg/kWh Paisa/kWh Paisa/kWh % Paisa/kWh Paisa/kWh Paisa/kWh 2010-11 630 2466 2.00 10340 3459 30764 2559 6.15 20.68 2445.32 0.71 180.91 187.06 8.89% 205.31 208.09 190.16 2011-12 630 2393 2.00 10359 3768 38806 3188 7.76 20.72 2372.28 0.63 200.71 208.47 8.50% 227.84 231.38 203.51 2012-13 630 2393 2.00 10343 3615 47346 3407 9.47 20.69 2372.31 0.66 223.58 233.05 8.50% 254.70 243.70 212.37
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Gas based generating stations Price of primary fuel 3.213 Commission in its last order has approved the fuel cost for FY 2010-11 based on actual cost for FY 2010-11 and for FY 2011-12 and FY 2012-13 based on submissions of TANGEDCO 3.214 TANGEDCO in its Petition has submitted the actual cost of fuel for FY 2010-11 and FY 2011-12 while estimated the fuel cost for FY 2012-13. The prices of primary fuel approved by the Commission in its last tariff order and filed by TANGEDCO in its current MYT Petition are tabulated below:
Table 108: Fuel price for gas based stations approved by the Commission in last order and filed by TANGEDCO in its current Petition As per last year tariff order FY 2010FY 2011FY 201211 12 13 8.55 8.55 33440 8.55 8.55 8.55 40440 8.93 8.93 8.55 8.55 40440 8.93 8.93 Petition FY 201112 8.45 8.55 56890.00 8.00 8.00
Name of the Power Station Tirumakottai GTPS Kuttalum GTPS Basin Bridge GTPS Valathur - Unit 1 Valathur - Unit 2
Units Rs./SCM Rs./SCM Rs./MT Rs./SCM Rs./SCM
FY 201011 7.25 7.32 54260.00 8.25 8.25
FY 201213 9.72 9.53 48630.00 17.08 17.08
3.215 In response to additional information sought by the Commission, TANGEDCO has submitted the monthly actual fuel cost of its gas based plants in FY 2012-13 (Upto Feb 2013). Commission has estimated the weighted average fuel cost based on the information submitted by TANGEDCO. In FY 2012-13, KGTPS was operational only in Feb 2013 and hence for KGTPS Commission has considered the gas price equivalent to that of weighted average gas price of TGTPS. The weighted average fuel prices considered by the Commission for FY 2012-13 are tabulated below.
Table 109: Weighted average fuel prices for gas based plants for FY 2012-13 (Upto Feb 2013) Power Plant Tirumakottai GTPS Kuttalum GTPS Basin Bridge GTPS Valathur - Unit 1 Valathur - Unit 2 Units Rs./SCM Rs./SCM Rs./MT Rs./SCM Rs./SCM Cost 9.32 9.32 40625 8.76 8.78
3.216 Since TANGEDCO has submitted the actual fuel cost for FY 2010-11 and FY 201112, Commission has considered the TANGEDCOs submission while for FY 2012-13 Commission has considered its estimate for weighted average fuel cost based on actual fuel cost data submitted by TANGEDCO. The fuel cost for gas based stations approved by the Commission for the first control period is tabulated below:
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Table 110: Fuel cost approved by the Commission for gas based stations Petition FY 201112 8.45 8.55 56890.00 8.00 8.00 Commission FY 2011- FY 201212 13 8.45 8.55 56890 8.00 8.00 9.32 9.32 40625 8.76 8.78
Units Rs./SCM Rs./SCM Rs./MT Rs./SCM Rs./SCM
FY 201011 7.25 7.32 54260.00 8.25 8.25
FY 201213 9.72 9.53 48630.00 17.08 17.08
FY 201011 7.25 7.32 54260 8.25 8.25
Gross calorific value 3.217 For gas based stations, Commission in its last order has approved a gross calorific value of 10000 kCal/SCM considering the fact that TNEB is making payment corresponding to GCV of 10000 Kcal / SCM and whenever the GCV is lesser than 10000 kcal/SCM, proportionate rebate is allowed. 3.218 TANGEDCO in its Petition has filed the GCV in accordance to the Commissions approval and hence Commission is accepting the submission of GCV for the purpose of energy calculations. The GCV approved by the Commission for the first control period is given below.
Table 111: Gross calorific value of primary fuel approved for gas based stations As per last year tariff order FY FY FY 11 12 13 10000 10000 10572 10000 10000 10000 10000 10572 10000 10000 10000 10000 10572 10000 10000 Petition FY 12 10000 10000 10972 11000 11000 Commission FY FY 12 13 10000 10000 10972 11000 11000 10000 10000 10572 10000 10000
Units kCal/SCM kCal/SCM kCal/Kg kCal/SCM kCal/SCM
FY 11 10000 10000 10572 10000 10000
FY 13 10000 10000 10572 10000 10000
FY 11
10000 10000 10572 10000 10000
Station heat rate 3.219 TANGEDCO in its Petition sought relaxation in station heat rate (SHR) for BBGTPS. Commission has already relaxed the SHR norms for BBGTPS in its tariff order dated 31st July 2010. For remaining stations, the SHR proposed by the Petitioner are in line with Commissions approval. SHR being a controllable parameter, Commission is considering the SHR for gas based stations as approved in its last tariff order.
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Table 112: Station heat rate approved by the Commission for gas based stations Name of the Power Station Tirumakottai GTPS Kuttalum GTPS Basin Bridge GTPS Valathur - Unit 1 Valathur - Unit 2 As per last year tariff order FY 11 1845 1850 3230 1790 FY 12 1850 1850 3219 1850 1850 FY 13 1850 1850 3219 1850 1850 FY 11 1847 1888 3133 1874 Petition FY 12 1898 1871 3221 1725 1833 FY 13 1813 1850 3311 1763 1991 FY 11 1845 1850 3230 1790 0 Commission FY 12 1850 1850 3219 1850 1850 FY 13 1850 1850 3219 1850 1850
3.220 In chapter 3, Commission has stated that it is considering the auxiliary consumption as proposed by the Petitioner only for arriving at the energy availability purposes. For the purpose of estimation of variable cost per unit, Commission has used the auxiliary consumption as approved in the last tariff order. However, for BBGTPS Commission has accepted the submission of TANGEDCO for FY 2012-13.
Table 113: Auxiliary consumption considered by the Commission for the purpose of variable cost calculations Last Order FY 11 6.19% 6.83% 0.62% 5.52% 0.00% FY 12 6.00% 6.67% 0.30% 5.87% 5.84% FY 13 6.00% 6.00% 3.43% 6.00% 6.00% FY 11 6.87% 7.28% 0.65% 5.90% 5.90% Petition FY 12 6.49% 7.32% 1.92% 7.00% 7.00% FY 13 5.97% 6.00% 0.51% 6.16% 6.16% FY 11 6.19% 6.83% 0.62% 5.52% 0.00% Commission FY 12 6.00% 6.67% 0.30% 5.87% 5.84% FY 13 6.00% 6.00% 0.51% 6.00% 6.00%
Variable Cost for Gas based stations 3.221 Based on above submissions, the Commission has calculated the variable cost for various gas based power stations of TANGEDCO which is tabulated as under. For transportation charges, Commission has considered the submission of TANGEDCO as they are in line with Commissions approval in the last tariff order.
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TGTPS
Table 114: Variable cost approved for TGTPS Description Capacity Gross Station Heat Rate Average calorific value of gas Average Cost of Gas Rate of energy from Gas Auxiliary Consumption Rate of energy - Net Ex bus Net Generation Total Cost excluding Transportation Transportation Cost Total Cost Variable Cost Petition Previous Tariff Order Unit MW Kcal/kWh Kcal/SCM Rs./ SCM Ps/ kWh % Ps/ kWh MU Rs. Crore Rs. Crore Rs. Crore Ps/ kWh Ps/ kWh Ps/ kWh 2010-11 108 1845 10000 7.25 133.76 6.19% 142.59 271.08 38.65 4.67 43.32 159.82 161.01 175.99 2011-12 108 1850 10000 8.45 156.33 6.00% 166.30 659.94 109.75 7.11 116.86 177.08 182.30 175.72 2012-13 108 1850 10000 9.32 172.42 6.00% 183.43 682.38 125.17 1.87 127.04 186.17 190.11 176.12
KGTPS
Table 115: Variable cost approved for KGTPS Description Capacity Gross Station Heat Rate Average calorific value of gas Average Cost of Gas Rate of energy from Gas Auxiliary Consumption Rate of energy - Net Ex bus Net Generation Total Cost excluding Transportation Transportation Cost Total Cost Variable Cost Petition Previous Tariff Order Unit MW Kcal/kWh Kcal/SCM Rs./ SCM Ps/ kWh % Ps/ kWh MU Rs. Crore Rs. Crore Rs. Crore Ps/ kWh Ps/ kWh Ps/ kWh 216.59 2010-11 101 1850 10000 7.32 135.42 6.83% 145.35 0.00 0.00 0.00 0.00 2011-12 101 1850 10000 8.55 158.18 6.67% 169.48 383.02 64.91 7.11 72.02 188.04 191.17 184.97 2012-13 101 1850 10000 9.32 172.42 6.00% 183.43 51.09 9.37 1.87 11.24 220.03 205.10 180.21
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BBGTPS
Table 116: Variable cost approved for BBGTPS Description Capacity Gross Station Heat Rate Average calorific value of gas Average Cost of Fuel Rate of energy from Fuel Auxiliary Consumption Rate of energy - Net Ex bus Net Generation Total Cost excluding Transportation Transportation Cost Total Cost Variable Cost Petition Previous Tariff Order Unit MW Kcal/kWh Kcal/Kg Rs./ MT Ps/ kWh % Ps/ kWh MU Rs. Crore Rs. Crore Rs. Crore Ps/ kWh Ps/ kWh Ps/ kWh 2010-11 120 3230 10572 54260.00 1657.77 0.62% 1668.12 38.78 64.69 0.00 64.69 1668.12 1618.51 1028.58 2011-12 120 3219 10972 56890.00 1669.06 0.30% 1674.08 29.40 49.22 0.00 49.22 1674.08 1679.54 1262.00 2012-13 120 3219 10572 40625.00 1236.96 0.51% 1243.31 0.41 0.51 0.00 0.51 1243.31 1538.64 1278.15
VGTPS - 1
Table 117: Variable cost approved for VGTPS - 1 Description Capacity Gross Station Heat Rate Average calorific value of gas Average Cost of Gas Rate of energy from Gas Auxiliary Consumption Rate of energy - Net Ex bus Net Generation Total Cost excluding Transportation Transportation Cost Total Cost Variable Cost Petition Previous Tariff Order Unit MW Kcal/kWh Kcal/SCM Rs./ SCM Ps/ kWh % Ps/ kWh MU Rs. Crore Rs. Crore Rs. Crore Ps/ kWh Ps/ kWh Ps/ kWh 2010-11 95 1790 10000 8.25 147.68 5.52% 156.30 301.54 47.13 3.58 50.71 168.18 176.17 165.40 2011-12 95 1850 11000 8.00 134.55 5.87% 142.94 612.56 87.56 3.58 91.14 148.78 142.04 188.62 2012-13 95 1850 10000 8.76 162.06 6.00% 172.40 423.53 73.02 3.65 76.67 181.02 346.48 177.70
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VGTPS - 2
Table 118: Variable cost approved for VGTPS 2 Description Capacity Gross Station Heat Rate Average calorific value of gas Average Cost of Gas Rate of energy from Gas Auxiliary Consumption Rate of energy - Net Ex bus Net Generation Total Cost excluding Transportation Transportation Cost Total Cost Variable Cost Petition Previous Tariff Order Unit MW Kcal/kWh Kcal/SCM Rs./ SCM Ps/ kWh % Ps/ kWh MU Rs. Crore Rs. Crore Rs. Crore Ps/ kWh Ps/ kWh Ps/ kWh 2010-11 2011-12 92 1850 11000 8.00 134.55 5.84% 142.89 414.44 59.22 0.00 59.22 142.89 142.04 165.42 2012-13 92 1850 10000 8.78 162.43 6.00% 172.80 455.83 78.77 0.00 78.77 172.80 346.48 178.77
Hydro Generation Circles 3.222 The Commission in last tariff order has determined the primary energy charges for hydro generating stations on account of water charges, lubricants etc. The primary energy charges claimed by TANGEDCO in its Petition for hydro generating stations are in accordance with the Commissions approval except for Tirunelveli hydro generation circle. However, TANGEDCO has not provided any reasons for increase in primary energy charges for Tirunelveli hydro generation circle in its Petition. In view of the above submissions, Commission has considered the primary energy charges as approved in its last tariff order.
Table 119: Primary energy charges approved for Hydro Generation Circles (Rs. Cr) Generation Circles Erode Kundah Kadamparai Tirunelveli FY 2010-11 Last Order 0.03 0.22 0.00 0.25 Petition 0.00 0.03 0.00 0.95 Commission 0.03 0.22 0.00 0.25 Last Order 0.04 0.22 0.00 0.25 FY 2011-12 Petition 0.10 0.01 0.00 2.83 Commission 0.04 0.22 0.00 0.25 Last Order 0.04 0.23 0.00 0.26 FY 2012-13 Petition 0.10 0.01 0.00 2.97 Commission 0.04 0.23 0.00 0.26
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Wind Generating Stations 3.223 The Commission in Tariff Order dated 31st July 2010 ruled that in the order No.3 dated 15-05-2006, the Commission has determined a tariff of Rs.2.75 / unit for the wind power projects commissioned, and to be commissioned based on agreements executed prior to May 15, 2006. Accordingly the Commission allowed the rate of Rs. 2.75/ Unit in 31st July 2010 order. 3.224 In its Petition TANGEDCO has considered the transfer price of Rs. 2.75 per unit as cost of generation from its wind mills in accordance to Commissions order. Hence Commission is accepting the TANGEDCO submission and is approving the cost of wind generation from its own wind mills at Rs. 2.75 per unit.
Power Purchase from other sources

3.225 Commission in its last order has approved the power purchase for FY 2010-11 considering the actual purchase, for FY 2011-12 based on revised submission of TANGEDCO and for FY 2012-13 using merit order dispatch principle. 3.226 In this Petition TANGEDCO has claimed the power purchase expenses for FY 201011 (for five months) based on audited accounts, for FY 2011-12 based on provisional accounts and for FY 2012-13 estimated based on actual power purchase during the previous two financial years. However, while considering the power purchase in its Petition, TANGEDCO has excluded the wheeling units in accordance to the approach adopted by the Commission in its last tariff order. 3.227 This section details out the approach adopted by the Commission in this true-up and review exercise for the first control period. Central generating stations 3.228 Commission in its last order has approved the power purchase quantum based on the submissions of TANGEDCO, CERC provisional and final orders and considering a 5% escalation in variable cost. The power purchase expenses allowed by the Commission in its last tariff order have been tabulated below.
Table 120: Power purchase expenses approved from central generating stations in last tariff order 2010-11 Particulars Quantum MU NLC-TS-I NLC-TS-II (Stage-I) NLC-TS-II (Stage-II) NLC-TS-I Expansion NTPC SR (I & II) NTPC SR (III) NTPC ER 1509 4039 1024 735 453 806 262 224 1609 4139 1105 885 505 504 862 291 1624 4164 1125 516 909 305 52 3066 3042 Total Cost Rs. Crore 630 532 MU 3066 3242 2011-12 Quantum Total Cost Rs. Crore 655 769 MU 3066 3272 2012-13 Quantum Total Cost Rs. Crore 658 812
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2010-11 Particulars Quantum MU NTPC - Talcher II Kayankulam MAPS KAIGA Simahadri Kudankulam NLC-TSIIExpansion MAPS (Addl.) NTPC-TNEB (JV) UI Total 1441 21633 472 5613 750 21625 3664 854 1399 860 Total Cost Rs. Crore 909 786 277 263 MU 3690 205 1499 1107 328 0 0
2011-12 Quantum Total Cost Rs. Crore 324 1082 267 304 349 106 0 MU 3705 0 1508 1178 1415 1716 1318 518 2029 0 5784 0 26638
2012-13 Quantum Total Cost Rs. Crore 1127 0 321 390 330 540 264 155 588 4 7473
3.229 TANGEDCO in its Petition has filed the power purchase expenses from CGS based on audited accounts for FY 2010-11 and provisional accounts for FY 2011-12. For FY 2012-13, TANGEDCO has estimated the power purchase cost considered an escalation of 5% on fixed charges and 4% on per unit variable charges and taking the power purchase expenses for FY 2012-13 as a base. 3.230 In response to additional information sought by the Commission, TANGEDCO has provided a provisional estimate for actual power purchase expenses incurred during FY 2012-13. The provisional estimate of actual power purchase expenses with respect to CGS plants submitted by TANGEDCO is given below.
Table 121: Provisional estimate of actual power purchase from CGS for FY 2012-13 submitted by TANGEDCO Source Neyveli - TS I Neyveli - TS - I Expansion Neyveli - TS - II NTPC-SR I & II NTPC-SR III NTPC-Talcher - Stage II NTPC-Kayankulam NTPC-Eastern Region NTPC-Simhadri NTPC-Dadri NTECL/Vallur NPCIL-MAPS Kaiga Atomic Total Units (MU) 3,189 1,629 3,291 4,149 982 3,405 319 1,079 488 1,775 1,261 21,567 Variable cost Rs./Unit 2.24 1.8 1.9791 1.68 2 1.41 2.04 1.99 2.09 2.04 3.02 1.93 Rs. Cr 714 294 651.35 697 196 481 65 214 102 361 381 4,156 0.80 1,724 1 1.31 0.62 0.6 1.12 0.83 0.91 1.77 2.56 Fixed cost Rs./Unit Rs. Cr 319 213 204 250 110 283 29 191 125 4.66 2.03 3.02 2.73 2.95 3.75 Total cost Rs./Unit 3.24 3.11 2.6 2.28 3.12 2.24 Rs. Cr 1,033 507 855 947 306 764 94 405 227 361 381 5,880
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3.231 Commission is accepting the power purchase cost from CGS with respect to FY 201011 and FY 2011-12 as TANGEDCO submission is based on audited accounts and provisional accounts for FY 2010-11 and FY 2011-12 respectively. For FY 2012-13, Commission is approving the power purchase expenses based on provisional estimate of actual power purchase submitted by TANGEDCO. The power purchase expenses approved by the Commission during the first control period are tabulated below.
Table 122: Power purchase from CGS approved by the Commission in FY 2010-11 Petition Source Units (MU) Capacity Charges (Rs. Crore) 69 57 57 129 84 136 106 23 661 Energy Charges (Rs./ Unit ) 1.60 1.49 1.57 0.70 2.89 1.66 2.02 3.08 7.15 2.41 1.93 Energy Charges (Rs. Crore) 266 67 190 87 182 256 119 140 245 97 1,649 Total Cost (Rs. Crore) 334 124 247 216 266 392 119 140 351 120 2,310 Units (MU) Commissions Approval Capacity Charges (Rs. Crore) 69 57 57 129 84 136 0 0 0 106 23 661 Energy Charge s (Rs./ Unit ) 1.60 1.49 1.57 0.70 2.89 1.66 0.00 2.02 3.08 7.15 2.41 1.93 Energy Charges (Rs. Crore) 266 67 190 87 182 256 0 119 140 245 97 1649 Total Cost (Rs. Crore) 334 124 247 216 266 392 0 119 140 351 120 2310
NTPC SR (I&II) NTPC SR III NLC TS - I NLC TS II NLC TS Expansion I NTPC Talcher NTPC Simhadri MAPS KAIGA NTPC Kayakulum NTPC ER Total
1658 449 1213 1244 631 1542 0 591 454 343 402 8528
1658 449 1213 1244 631 1542 0 591 454 343 402 8528
Table 123: Power purchase from CGS approved by the Commission in FY 2011-12 Petition Source Units (MU) Capacity Charges (Rs. Crore) 217 88 155 197 212 284 Energy Charges (Rs. /Unit ) 1.59 1.87 1.65 1.94 1.82 2.04 Energy Charges (Rs. Crore) 652 196 521 615 277 741 Total Cost (Rs. Crore) 869 284 676 812 489 1025 Units (MU) Commissions Approval Capacity Charges (Rs. Crore) 217 88 155 197 212 284 Energy Charges (Rs./ Unit ) 1.59 1.87 1.65 1.94 1.82 2.04 Energy Charges (Rs. Crore) 652 196 521 615 277 741 Total Cost (Rs. Crore) 869 284 676 812 489 1025
NTPC SR (I&II) NTPC SR III NLC TS - I NLC TS II NLC TS Expansion I NTPC Talcher
4106 1048 3146 3167 1526 3622
4106 1048 3146 3167 1526 3622
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Petition Source Units (MU) Capacity Charges (Rs. Crore) 74 0 0 65 43 15 1352 Energy Charges (Rs. /Unit ) 2.19 1.99 3.12 9.87 2.89 2.62 2.01 Energy Charges (Rs. Crore) 103 319 366 203 135 26 4152 Total Cost (Rs. Crore) 176 319 366 268 178 41 5503 Units (MU)
Commissions Approval Capacity Charges (Rs. Crore) 74 0 0 65 43 15 1352 Energy Charges (Rs./ Unit ) 2.19 1.99 3.12 9.87 2.89 2.62 2.01 Energy Charges (Rs. Crore) 103 319 366 203 135 26 4152 Total Cost (Rs. Crore) 176 319 366 268 178 41 5503
NTPC Simhadri MAPS KAIGA NTPC Kayakulum NTPC ER NTPC Dadri Total
468 1604 1171 205 465 101 20630
468 1604 1171 205 465 101 20630
Table 124: Power purchase from CGS approved by the Commission in FY 2012-13 Petition Source Units (MU) Capacity Charges (Rs. Crore) 228 93 163 207 223 298 77 0 0 0 45 16 0 0 0 1351 Energy Charges (Rs. /Unit ) 1.65 1.94 1.72 2.02 1.89 2.13 2.28 2.07 3.25 0.00 3.01 2.73 3.50 3.50 3.50 2.11 Variable Cost (Rs. Crore) 688 209 505 696 330 759 136 411 415 0 103 34 319 62 139 4806 Total Cost (Rs. Crore) 916 301 668 903 553 1057 214 411 415 0 148 49 319 62 139 6156 Units (MU) Commissions Approval Capacity Charges (Rs. Crore) 250 110 319 204 213 283 191 0 0 0 29 0 125 Energy Charges (Rs. /Unit ) 1.68 2.00 2.24 1.98 1.80 1.41 1.99 2.04 3.02 0.00 2.04 0.00 2.09 Variable Cost (Rs. Crore) 697 196 714 651 293 480 215 362 381 0 65 0 102 Total Cost (Rs. Crore) 947 306 1033 855 507 763 405 362 381 0 94 0 227
NTPC SR (I&II) NTPC SR III NLC TS - I NLC TS - II NLC TS Expansion I NTPC Talcher NTPC Simhadri MAPS KAIGA NTPC Kayakulum NTPC ER NTPC Dadri NTPC Vallur Kudunkulum NLC TS - II Expansion Total
4164 1074 2937 3450 1749 3567 599 1986 1278 0 342 123 910 178 397 22755
4149 982 3189 3291 1629 3405 1079 1775 1261 0 319 0 488 0 0 21567
1723
1.93
4157
5880
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Independent Power Producers 3.232 Commission in its last order has approved the power purchase quantum based on the submissions of TANGEDCO and considering merit order despatch. Commission has only allowed fixed cost for those IPPs which do not get scheduled as per merit order despatch. The power purchase expenses allowed by the Commission in its last tariff order have been tabulated below.
Table 125: Power purchase expenses approved from IPPs in last tariff order 2010-11 Quantum Particulars GMR Samalpatti PPN Madurai ST-CMS ABAN Penna Total MU 875 378 2494 353 1652 820 370 6942 Total Cost Rs. Crore 779 385 1202 370 633 246 118 3732 2011-12 Quantum MU 962 351 1483 333 1711 776 366 5982 Total Cost Rs. Crore 1062 459 1233 466 684 252 125 4281 1795 810 375 2980 2012-13 Quantum MU Total Cost Rs. Crore 154 94 309 140 769 261 128 1855
3.233 TANGEDCO in its Petition has filed the power purchase expenses from IPPs based on audited accounts for FY 2010-11 and provisional accounts for FY 2011-12. For FY 2012-13, TANGEDCO has estimated the power purchase cost considered an escalation of 5% on fixed charges and 4% on per unit variable charges and taking the power purchase expenses for FY 2012-13 as a base. 3.234 Based on the TANGEDCOs Petition Commission is of the view that power purchase estimates for ABAN and Penna for FY 2012-13 have been interchanged inadvertently. Similar type and trivial discrepancies have been observed in other filings related to other expenses. Commission directs TANGEDCO to be careful in filing its Petition and minimize the discrepancies in its data from next filing. 3.235 In response to additional information sought by the Commission, TANGEDCO has provided a provisional estimate for actual power purchase expenses incurred during FY 2012-13. The provisional estimate of actual power purchase expenses with respect to IPPs submitted by TANGEDCO is given below.
Table 126: Provisional estimate of actual power purchase from IPPs for FY 2012-13 submitted by TANGEDCO Source GMR Vasavi Samalpatti Pillaiperumalnallur Units (MU) 610 329 1,785 Variable cost Rs./Unit Rs. Cr 10.41 635 10.18 335 8.55 1,526 Fixed cost Rs./Unit Rs. Cr 2.74 167 3.31 109 1.64 292 Total cost Rs./Unit Rs. Cr 13.15 802 13.49 444 10.19 1,818
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Source Madurai Power Corpn Neyveli Zero Unit (STCMS) Aban Penna Total
Units (MU) 357 1,665 850 375 5,971
Variable cost Rs./Unit Rs. Cr 10.96 392 2.32 2.00 2.04 5.89 385 170 77 3,519
Fixed cost Rs./Unit Rs. Cr 3.09 110 2.18 1.38 1.54 2.04 364 117 58 1,218
Total cost Rs./Unit Rs. Cr 14.05 502 4.50 3.38 3.59 7.93 749 288 135 4,737
3.236 Commission is accepting the power purchase cost from IPPs with respect to FY 201011 and FY 2011-12 as TANGEDCO submission is based on audited accounts and provisional accounts for FY 2010-11 and FY 2011-12 respectively. For FY 2012-13, Commission is approving the power purchase expenses based on provisional estimate of actual power purchase submitted by TANGEDCO. The power purchase expenses approved by the Commission during the first control period are tabulated below.
Table 127: Power purchase from IPPs approved by the Commission in FY 2010-11 Petition Energy Charges (Rs./ Unit ) 9.54 10.68 5.16 10.77 4.84 3.17 3.30 6.01 Commissions Approval Capacity Energy Energy Charges Charges Charges (Rs. (Rs./ (Rs. Crore)* Unit ) Crore) 0 9.54 375 0 0 0 0 0 0 0 10.68 5.16 10.77 4.84 3.17 3.30 6.01 191 554 181 293 113 49 1757
Source GMR Samalpatti PPN Madurai ST-CMS ABAN Penna Total
Units (MU) 393 179 1072 168 606 357 148 2923
Capacity Charges (Rs. Crore) 0 0 0 0 0 0 0 0
Energy Charges (Rs. Crore) 375 191 554 181 293 113 49 1757
Total Cost (Rs. Crore) 375 191 554 181 293 113 49 1757
Units (MU) 393 179 1072 168 606 357 148 2923
*Capacity charges of five months are included in energy charges.

Table 128: Power purchase from IPPs approved by the Commission in FY 2011-12 Petition Energy Charges (Rs./ Unit ) 9.45 10.18 6.48 10.47 2.23 1.77 1.79 5.14 Commissions Approval Capacity Energy Energy Charges Charges Charges (Rs. (Rs./ (Rs. Crore) Unit ) Crore) 159 9.45 811 116 286 124 315 107 56 1162 10.18 6.48 10.47 2.23 1.77 1.79 5.14 298 967 295 377 134 64 2946
Source GMR Samalpatti PPN Madurai ST-CMS ABAN Penna Total
Units (MU) 858 292 1491 282 1688 760 360 5731
Capacity Charges (Rs. Crore) 159 116 286 124 315 107 56 1162
Energy Charges (Rs. Crore) 811 298 967 295 377 134 64 2946
Units (MU) 858 292 1491 282 1688 760 360 5731
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Table 129: Power purchase from IPPs approved by the Commission in FY 2012-13 Petition Units (MU) Source GMR Samalpatti PPN Madurai ST-CMS ABAN Penna Total 615 273 1541 285 1794 366 759 5633 Capacity Charges (Rs. Crore) 166 122 300 131 330 112 59 1220 Energy Charges (Rs./ Unit ) 9.83 10.59 6.74 10.88 2.32 1.84 1.86 5.09 Energy Charges (Rs. Crore) 604 289 1039 310 416 67 141 2867 Total Cost (Rs. Crore) 771 411 1339 441 747 179 200 4087 Units (MU) 610 329 1785 357 1665 850 375 5971 Commissions Approval Capacity Charges (Rs. Crore) 167 109 292 110 364 117 58 1218 Energy Charges (Rs./ Unit ) 10.41 10.18 8.55 10.96 2.32 2.00 2.04 5.89 Energy Charges (Rs. Crore) 635 335 1526 391 386 170 77 3519 Total Cost (Rs. Crore) 802 444 1819 502 749 287 135 4737
Non conventional energy sources and Captive power plants 3.237 Commission in its last order has approved the power purchase expenses from renewable energy sources and captive power plants based on the submissions of TANGEDCO and considering rates approved by the Commission for procurement of power from renewable energy sources. Also, Commission has not considered the wheeling energy while approving the power purchase expenses for renewable energy sources and captive power plants. The power purchase expenses allowed by the Commission in its last tariff order from these sources have been tabulated below.
Table 130: Power purchase expenses approved from non conventional energy sources and captive power plants in last tariff order
Particulars
CPP Solar Wind Cogeneration Biomass Total
2010-11 Total Quantum Cost Rs. MU Crore 460 161 2.07 5263 997 110 6833 0.93 1585 351 49 2147
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3.238 In response to data gaps and additional information sought by the Commission, TANGEDCO has revised the power purchase expenses from these sources. TANGEDCO has submitted that the treatment of wheeling units has not been accounted properly in its Petition and hence accordingly has revised the quantum and expenses from these sources. In addition, TANDECO has submitted the provisional estimate of actual power purchase from these units net of wheeling units for FY 201213. The revised power purchase expenses submitted by TANGEDCO from these sources are tabulated below.
Table 131: Revised power purchase expenses from renewable energy sources and CPP submitted by TANGEDCO 2010-11 Particulars CPP Solar Wind Cogeneration Biomass Total Quantum MU 218 2.07 -148 388 38 498 Total Cost Rs. Crore 93.95 0.89 58.00 255.57 17.81 426.22 MU 557 11.00 5711 1285 73 7637 2011-12 Quantum Total Cost Rs. Crore 232.23 4.59 1758.99 482.01 24.37 2502.19 MU 595 16.00 7145 1428 11 9195 2012-13 Quantum Total Cost Rs. Crore 234.43 7.39 2229.24 501.23 4.90 2977.18
3.239 In view of revised submission being in line with Commissions approach and TANGEDCO properly accounting the wheeling units, the Commission is approving the power purchase expenses from renewable energy sources and CPP based on TANGEDCOs revised submission. The approved power purchase expenses from these sources are tabulated below.
Table 132: Power purchase expenses from renewable energy sources and CPP approved by the Commission for FY 2010-11 Petition Particulars CPP Solar Wind* Cogeneration Biomass Total Quantum MU 218 2 -148 388 38 498 Cost Rs. Crore 36 1 58 256 18 368 6.59 4.69 Cost Rs./Unit 1.63 4.50 Quantum MU 218 2.07 -148 388 38 498 Commission Total Cost Rs. Crore 93.95 0.89 58 256 18 426 6.59 4.69 Cost Rs./Unit 4.31 4.31
*Wheeling units from Nov to March are more than actual wind generation
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Table 133: Power purchase expenses from renewable energy sources and CPP approved by the Commission for FY 2011-12 Petition Particulars CPP Solar Wind Cogeneration Biomass Total Quantum MU 2,778 11 5,893 1,285 73 10,040 Cost Rs. Crore 473 9 2,379 650 33 3,543 Cost Rs./Unit 1.70 7.88 4.04 5.06 4.52 3.53 Quantum MU 557 11.00 5711 1285 73 7637 Commission Total Cost Rs. Crore 232 4.59 1759 482 24 2502 Cost Rs./Unit 4.17 4.17 3.08 3.75 3.35 3.28
Table 134: Power purchase expenses from renewable energy sources and CPP approved by the Commission for FY 2012-13 Petition Particulars CPP Solar Wind Cogeneration Biomass Total Quantum MU 705 21 5,067 1,771 783 8,347 Cost Rs. Crore 307 10 1,649 688 372 3,026 Cost Rs./Unit 4.36 4.73 3.26 3.89 4.74 3.63 Quantum MU 595 16.00 7145 1428 11 9195 Commission Total Cost Rs. Crore 234 7.39 2229 501 5 2977 Cost Rs./Unit 3.94 4.62 3.12 3.51 4.45 3.24
Power purchase from traders and other sources 3.240 In the last tariff order Commission has approved the power purchase expenses from traders at capped rate of Rs. 5.32 for FY 2010-11 and FY 2011-12. For FY 2012-13, Commission has approved purchase from traders at 2000 MU at an average rate of Rs. 4.00/ kWh. However, Commission has directed TANGEDCO take prior approval from the Commission in case power purchase from traders in FY 2012-13 exceeds the quantum and rate specified in this Tariff Order. The expenses for purchase of power from traders as approved in the last tariff order are given below.
Table 135: Power purchase expenses approved from traders in last tariff order 2010-11 Cost Quantum (Rs. (MU) Crore) 10540 5607 Cost (Rs./ Unit) 5.32 2011-12 Cost (Rs. Cost Crore) (Rs./Unit) 5000 5.32 2012-13 Cost Quantum (Rs. (MU) Crore) 2000 800 Cost (Rs./ Unit) 4.00
Particulars Traders
Quantum (MU) 9400
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3.241 The power procurement filed by TANGEDCO from bilateral sources and exchange is within the limits of the Commissions approval for FY 2010-11 and FY 2011-12. However, Commission has observed some discrepancies in the per unit rate of power procured from traders. In response to this query TANGEDCO has revised the power purchase expenses and units after properly adjusting the wheeling units. In addition, TANGEDCO has submitted the actual purchase from these sources in FY 2012-13. 3.242 Apart from these sources, TANGEDCO has also procured power from UI and NTPC NVVN. In response to Commissions query TANGEDCO has revised the average UI rate submitted for FY 2010-11 and FY 2011-12 and also submitted the revised power purchase expenses from these sources. The revised power purchase expenses submitted by TANGEDCO for procurement of power from traders, NTPC NVVN and UI are tabulated below.
Table 136: Revised power purchase expenses submitted by TANGEDCO from traders and other sources 2010-11 Particulars Quantum MU Traders - Bilateral and Exchange Traders - Exchange UI NTPC NVVN Total 3085 1618 759 181 5643 Total Cost Rs. Crore 1701 963 230 91 2985 2011-12 Total Quantum Cost Rs. MU Crore 7395 1032 718 694 9838 3838 327 262 3763 2012-13 Total Quantum Cost Rs. MU Crore 6,575 360 81 35 7051 3,347 213 49 16 3625
3.243 Commission is of the view that though UI is not a scheduled and an approved power, TANGEDCO was required to over draw from the grid in cases where it was not able to match the demand and supply. Also, the UI quantum has progressively decreased indicating the better management of demand-supply. For FY 2010-11 and FY 201112, the total expenses and quantum of power procured from traders and UI are within the total approved quantum and expenses for FY 2010-11 and FY 2011-12. For FY 2012-13, though TANGEDCO has exceeded the quantum of power approved by the Commission, there has been a decrease in purchase compared to FY 2011-12. Commission is provisionally accepting the submission of TANGEDCO especially when CoD of new plants is getting delayed. The power purchase expenses from these sources approved for the control period are tabulated below.
Table 137: Power purchases expenses from other sources approved by the Commission for FY 2010-11 Petition Quantum Cost Rs. MU Crore 4703 759 181 5,643 1897 340 91 2,328 Cost Rs./Unit 4.03 4.48 5.03 4.13 Quantum MU 4703 759 181 5643 Commission Total Cost Rs. Crore 2664 230 91 2985 Cost Rs./Unit 5.66 3.03 5.01 5.29
Particulars Traders - Bilateral & Exchange UI NTPC NVVN Total
*Approved based on revised submission

Table 138: Power purchases expenses from other sources approved by the Commission for FY 2011-12 Petition Particulars Traders - Bilateral & Exchange UI NTPC NVVN Total Quantum MU 6206 718 694 7,617 Cost Rs. Crore 1686 403 262 2,351 Cost Rs./Unit 2.72 5.61 3.78 3.09 Quantum MU 8427 718 694 9838 Commission* Total Cost Rs. Crore 3838 327 262 4427 Cost Rs./Unit 4.55 4.56 3.78 4.50
*Approved based on revised submission

Table 139: Power purchases expenses from other sources approved by the Commission for FY 2012-13 Petition Particulars Traders - Bilateral & Exchange UI NTPC NVVN Total Quantum MU 9,816 Cost Rs. Crore 3,066 Cost Rs./Unit 3.12 Quantum MU 6935 81 694 10,510 275.62 3,342 3.97 3.18 35 7051 Commission* Total Cost Rs. Crore 3560 49 16 3625 Cost Rs./Unit 5.13 6.09 4.45 5.14
*Approved based on revised submission 3.244 With respect to power purchase expenses, Commission gives following directives: a) Considering the iterations that went in reconciling the power purchase expenses pertaining to wheeling units, Commission directs TANGEDCO to properly maintain the power purchase expenses with and without wheeling units. b) Commission has observed various discrepancies in power purchase expenses filing of TANGEDCO. In response to Commissions query, TANGEDCO has revised the expenses after correcting the mistakes. Commission is taking a serious note of this casual attitude in filing the power purchase expenses and directs TANGEDCO to file its Petition properly from next tariff filling. Power Grid Corporation of India Limited (PGCIL) Charges 3.245 TANGEDCO has proposed PGCIL charges as per audited accounts for FY 2010-11 and provisional accounts for FY 2011-12. Also, TANGEDCO has proposed ABTPGCIL charges under PGCIL charges. In response to Commissions query, TANGEDCO has replied that they have inadvertently claimed ABTPGCIL charges under PGCIL charges and these correspond to UI. Hence, Commission is not approving these charges claimed by TANGEDCO.
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3.246 For FY 2012-13, TANGEDCO has revised the PGCIL charges considering the provisional estimates of actual transmission charges incurred. Due to the fact that FY 2010-11, FY 2011-12 and FY 2012-13 are already over and as TANGEDCO has provided the actual expenses incurred, Commission is accepting the submission of TANGEDCO for PGCIL wheeling and reactive energy charges.
Table 140: PGCIL charges approved by the Commission for the first control period (Rs. Cr.) 2010-11 Parameter PGCIL - SR and ER wheeling PGCIL Reactive energy ABTPGCIL Total Last Order Petition Comm. Last Order 2011-12 Petition Comm. Last Order 2012-13 Petition Comm.
190
204
204
480
524
524
504
550
540
190
5 230 438
5 208 480
17 313 854
17 541 504
18 329 897
15 555
Intrastate Transmission Charges 3.247 For FY 2010-11 and FY 2011-12, TANGEDCO has claimed actual intrastate transmission charges paid to TANTRANSCO. For FY 2012-13, TANGEDCO has estimated the transmission charges based on Commissions tariff order on Determination of Intra-State Transmission Tariff and other related charges dated March 30, 2012. 3.248 Commission has considered the TANGEDCOs submission for FY 2010-11 and FY 2011-12 as TANGEDCO has submitted the actual transmission expenses incurred. However for FY 2012-13, considering the allotted capacity of TANGEDCO, Commission has provisionally determined the transmission charges required to be paid for FY 2012-13. 3.249 The intrastate transmission charges approved by the Commission for the first control period are given below.
Table 141: Transmission Charges payable to TANTRANSCO for the first control period (Rs. Cr.) 2010-11 Parameter Transmission charges payable to TANTRANSCO Petition 509 Commission 509 2011-12 Petition 1665 Commission 1665 2012-13 Petition 3076 Commission 2847
Note: Transmission charges may undergo a change upon implementation of APTEL Order in Appeal No. 102 of 2012.
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Aggregate Revenue Requirement and Revenue Gap for the first control period
3.250 Regulation 70 of the Tariff Regulations 2005 specifies the following: 70. The Aggregate Revenue Requirement of Distribution licensee The Aggregate Revenue Requirement of Distribution licensee consists of thefollowing:(i) Cost of Power Purchase (ii) Operation and Maintenance expenses (iii) Depreciation (iv) Interest and cost of finance (v) Income Tax (vi) Provision for Bad and Doubtful Debts (vii) Provision for Insurance (viii) Provision for contingency reserve (ix) other expenses (x) Return on equity / Reasonable rate of return 3.251 Based on the approved expenses in the above sections of this Chapter, the Aggregate Revenue Requirement approved by the Commission for the first control period is tabulated below:
Table 142: ARR approved by the Commission for the first control period (Rs. Cr.) Parameter Expenses in respect of own Generation Power Purchase Cost Annual Transmission Charges payable to TANTRANSCO Operation and Maintenance Expenses Depreciation Interest on Long term loan Other Debits & extra ordinary items Prior Period Debit/(Credit) Charges Reasonable Return / Return on Equity Interest on Working Capital Contribution to Contingency Reserves ARR Last year order FY FY FY 2011 2012 2013 2232 7316 744 1093 95 688 12 6582 17800 1917 2728 254 3150 29 8939 11675 3076 2837 287 3355 29 FY 2011 3270 7200 509 1388 115 693 11 0 65 164 0 12180 32460 30198 13415 Petition FY 2012 8761 16360 1665 3652 284 1917 38 1052 236 466 0 34431 FY 2013 8399 17508 3076 3691 303 2139 27 0 331 701 72 36247 FY 2011 2894 7687 509 1282 110 495 11 0 0 0 0 12987 Commission FY FY 2012 2013 7830 17082 1665 3327 273 1053 14 0 0 0 0 31244 7635 17775 2847 3477 302 1329 17 0 0 0 0 33382
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Non Tariff and Other Income 3.252 TANGEDCO has submitted in its petition, the Non tariff income for FY 2010-11 (5 months) based on audited accounts as Rs. 216.9 Crores as compared to Rs. 217.5 Crores approved in the last order. The Commission has accepted the actual as per audited accounts for FY 2010-11. For the year FY 2011-12 TANGEDCO had filed an amount of Rs. 643.7 Crores in its petition as against Rs. 624 Crores approved in the last order. As per provisional accounts for the year it was found that the revenue was only Rs. 553.0 Crores. The Commission has considered the actual as per the provisional accounts. For the year FY 2012-13 Commission has considered the same escalation as assumed by TANGEDCO for proposing NTI for the year. Therefore based on data as per provisional accounts of FY 2011-12 and escalation rate as provided by TANGEDCO, the Commission has approved NTI for the first control period. 3.253 The other income mainly comprises of interest on staff loans and advances, income from investments, income from trading, rebate on power purchase bills, interest on staff welfare and gain on sale of fixed asset. 3.254 TANGEDCO in its petition has filed Other Income for FY 2010-11 and FY 2011-12 separately for Generation and Distribution business. The Commission on scrutiny of the audited and provisional accounts found that the total income booked under the head Other Income for TANGEDCO matches with the segregated incomes as provided by TANGEDCO in its petition. Hence the Commission has approved the Other Income as filed by TANGEDCO for FY 2010-11 and FY 2011-12. For FY 2012-13 the Commission has accepted the Other Income as projected by TANGEDCO for its Distribution business. The table below captures the data filed by TANGEDCO and approved Non Tariff Income and Other Income for FY 2010-11 to FY 2012-13.
Table 143: Non Tariff and Other Income approved by the Commission (Rs. Cr) Particulars Non Tariff Income Other Income Total Petition FY 11 216.94 92.52 309.46 FY 12 643.66 141.05 784.71 FY 13 688.82 132.43 821.25 FY 11 216.94 92.52 309.46 Approved FY 12 553.00 141.05 694.05 FY 13 592.36 132.43 724.79
Estimation of additional power purchase cost due to higher T&D loss 3.255 Regulation 3 (ix) of TNERC (Terms and Conditions for Determination of Tariff for Intra state Transmission / Distribution of Electricity under MYT Framework) Regulations, 2009, states as under: 3 (ix). Mechanism for sharing approved gains or losses arising out of controllable factors.
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The financial loss, if any, due to failure to achieve the target for the controllable costs in any of the years in the control period shall be borne by the licensees and the efficiency gains, if any, with respect to controllable parameters shall be shared between the licensee and the consumer in the ratio of 2:1 3.256 The Commission notes that the due to higher T&D loss compared to that approved by the Commission in this order, additional power purchase cost incurred by TANGEDCO is given below. The additional power purchase cost is estimated considering the energy requirement and average power purchase cost at TN periphery. For this purpose, Commission has assumed an interstate transmission loss of 4.38% based on the submission of TANGEDCO.
Table 144: Additional power purchase cost for the first control period due to higher T&D losses Parameter Energy input required at TN Periphery (Based on approved sales and losses) - MU Energy available at TN Periphery (Considering 4.38% loss on interstate purchase) - MU Power Purchase Cost Per unit Power Purchase Cost - TN Periphery Additional Units MU Additional Power Purchase Cost - Rs. Cr. FY 2011 25478 27504 10581 3.85 2025 779 FY 2012 64224 68623 24912 3.63 4398 1597 FY 2013 60097 65750 25409 3.86 5653 2185
3.257 Regulation (25) of TNERC (Terms and Conditions for Determination of Tariff for Intra state Transmission / Distribution of Electricity under MYT Framework) Regulations, 2009, states as under: 25) Aggregate Technical and Commercial loss ( AT & C ) The Commission shall fix benchmarks for reduction of losses and the licensee shall achieve the target fixed for each year of the control period . The AT & C loss is a controllable item and the financial loss, if any, on account of failure to achieve the target shall be borne by the Distribution licensee. The gains, if any, on account of achieving the loss below the targeted level shall be shared with the consumers.
3.258 It is pertinent to mention that AT&C loss is usually calculated considering distribution loss and AT&C loss being a controllable item, the Commission is of the view that additional power purchase cost due to higher T&D loss cannot be passed onto consumers. Hence, Commission is reducing the additional power purchase cost estimated for higher T&D loss from the ARR of TANGEDCO while at net ARR for the first control period. The net ARR approved for the first control period is tabulated below:
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Table 145: Net Revenue Requirement approved by the Commission for the first control period (Rs. Cr.) Parameter Aggregate Revenue requirement Less: Other income and NTI Less: Additional Power Purchase cost due to higher T&D loss Net Revenue Requirement Last year order FY FY FY 2011 2012 2013 12200 362 0 11838 32460 972 0 31488 30198 862 0 29336 TANGEDCO filing FY FY FY 2011 2012 2013 13415 309 0 13105 34431 785 0 33646 36247 821 0 35426 FY 2011 Commission FY FY 2012 2013 31244 694 1597 28953 33382 725 2185 30472
12987 309 779 11898
Revenue from Sale of Power FY 2010-11 and FY 2011-12 3.259 The following table shows the category-wise revenue for the last five months of FY 2010-11 and for FY 2011-12 as approved by the Commission. The revenue shown in the table is based on the tariffs approved by the Commission for the respective years and is exclusive of subsidy. The numbers are as per the audited accounts and provisional accounts of TANGEDCO for the respective years after adjusting revenue from wheeled units.
Table 146: Category wise Revenue for FY 2010-11(5 months) and FY 2011-12 as approved by the Commission (Rs. Cr.) FY 2010-11 Consumer Category High Tension Supply (HT) I-A I-B II-A II-B II-C III IV HT Industries Railway Traction Govt. Educational Inst. Hospitals, water supply etc. Pvt. Educational Inst., Cinema theatres & Studios Actual places of public worship, Mutts and Religious Inst. HT Commercial Lift Irrigation, Co-operative societies Supply to Other States (SWAP) Sub Total HT Low Tension Supply (LT) I-A I-B I-C II-A II-B-1 II-B-2 Domestic Purposes Huts in Village Panchayats, TAHDCO etc. Defence Colonies etc. Notified Tariff Public Lighting and Public Water Supply & Sewerage Govt. Educational Inst., Hospitals, water supply etc. Private Educational Inst., Cinema theatres & Studios 2 219 98 4 2,749 119 232 28 3 554 26 3,711 1,038 9 526 279 136 5,649 347 581 123 9 1,311 219 8,239 2,889 Revenue FY 2011-12 Revenue
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FY 2010-11 Consumer Category IIC IIIA 1 IIIA 2 IIIB IV V VI Actual places of public worship Cottage and Tiny Industries, Power Looms Coffee grinding and Ice factories etc. and Industries not covered under LT Tariff IIIA Agriculture and Govt. seed farms Commercial and all categories of Consumers not covered under IA, IB,IC, IIA, IIB, IIIA, III B and IV Temporary supply: (a) Lighting and combined installation, (b) Lavish illuminations Sub Total LT Total HT and LT Revenue 22 75 38 786 1,156 10 3,448 7,160
FY 2011-12 Revenue 25 152 121 1,968 3,035 25 9,165 17,404
3.260 The Commission has accepted the actual revenue earned but has not allowed the revenue corresponding to sale of power to Puducherry and wheeled units. TANGEDCO has also filed revenue of Rs. 26 Crores and Rs. 219 Crores from SWAP arrangements for the above two years respectively. The same has also been considered by the Commission as part of revenue for TANGEDCO. 3.261 Commission has also considered the actual subsidy received by TANGEDCO in FY 2010-11 and FY 2011-12 during the true-up exercise. The total revenue approved by the Commission is given below.
Table 147: Revenue approved by the Commission for FY 2010-11 and FY 2011-12 (Rs. Cr) Parameter Revenue from Sale of Power Govt. Subsidy Total 2010-11 7,159 689 7,848 2011-12 17,404 2,071 19,475
Revenue from Sale of Power FY 2012-13 3.262 The following table shows the total HT and LT revenue for FY 2012-13 as per the petition and as revised and filed by TANGEDCO in its reply to data gaps.
Table 148: Revised revenue filed by TANGEDCO for FY 2012-13 (Rs. Crores) Sl. No. 1 2 3 Particulars Total HT Revenue Total LT Revenue Total Revenue HT+LT As filed in the petition 8,689 17,020 25,709 Revised Filing 7,768 15,847 23,615
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3.263 The following table shows the category-wise revenue as filed by TANGEDCO in its reply to data gaps and as approved by the Commission for FY 2012-13 based on revised sales estimates. The revenue has been calculated based on the approved tariff for FY 2012-13. The revenue so projected is inclusive of subsidy from the GoTN.
Table 149: Revenue for FY 2012-13 as per the petition and as approved by the Commission (Rs. Cr) Particulars HT Consumer Category I-A I-B II-A II-B III IV V HT Industries Railway Traction Govt. Educational Inst. etc. Pvt. Educational Inst. etc. HT Commercial Lift Irrigation Temporary supply Others (Sale to Puducherry) Total HT LT Consumer Category Domestic Huts LT bulk supply Public Lighting and Water Supply Govt. Educational Inst. etc. Pvt. Educational Inst. etc. Places of Public Worship Cottage and Tiny Industries Power Looms L.T. Industries L.T. Agriculture L.T. Commercial Temporary supply Total LT Total HT + LT Revised filing 4,988 458 496 155 1,155 1 176 338 7,768 5,848 103 4 908 66 144 57 50 384 2,674 1,940 3,627 42 15,847 23,615 Approved 5,105 458 496 155 1155 1 176 0 7,547 5,962 105 4 908 66 144 57 50 384 2,674 1,940 3,627 42 15,963 23,510
I-A I-B I-C II-A II-B-1 II-B-2 IIC IIIA 1 IIIA 2 IIIB IV V VI
3.264 Therefore the Revenue from sales for FY 2012-13 as approved by the Commission is Rs. 23,510 Crores. This revenue is inclusive of the subsidy component. Low Power Factor Surcharge 3.265 TANGEDCO in its reply to data gaps submitted collection made with respect to Low power factor surcharge of Rs. 51.03 Crores for FY 2012-13. The Commission has accepted the same and considered this revenue while computing the revenue gap for the year. 3.266 The total revenue approved by the Commission including revenue from low power factor surcharge for FY 2012-13 is Rs. 23561 Crs.
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Revenue Gap for the first control period 3.267 On the basis of net revenue requirement and revenue approved by the Commission, the Revenue Gap approved by the Commission for the first control period is tabulated below.
Table 150: Revenue gap approved by the Commission (Rs. Cr.) Last year order FY FY FY 2011 2012 2013 11818 31488 29346 7651 4167 18076 13412 29347 -1 TANGEDCO filing FY FY FY 2011 2012 2013 13105 33646 35426 7332 5773 18763 14883 25707 9719 FY 2011 11898 7848 4050 Commission FY FY 2012 2013 28953 30472 19475 9478 23561 6911
Parameter Net Revenue Requirement Less: Revenue from Tariffs (including subsidy) Revenue Gap
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A4:
AGGREGATE REVENUE REQUIREMENT FOR THE SECOND CONTROL PERIOD FY 2013-14 TO FY 2015-16
Energy Sales
4.1 TANGEDCO has projected energy consumption using the historical trend method by applying the category-wise Compounded Annual Growth Rate (3 years and 5 years CAGR) appropriately. The growth factors have been corrected for the instances where the trend appeared unreasonable. The sales growth has been projected on a yearly basis, based on the actual consumption for the first half of 2012-13 and based on TANGEDCOs understanding on availability of power and impact of other external factors. TANGEDCO opines that the demand growth can be linked to the growth rate of the State and the country which is estimated at around 8% in the Twelfth Plan and power sector being one of the key sectors to support such growth will also grow at a similar pace. Therefore, the growth has been linked to two elements namely the growth within the State and the additional power available to meet unrestricted demand. Considering the deficit situation in the State and implementation of R&C measures, the historical trend alone were not considered while projecting sales for FY 2013-14. TANGEDCO has projected an overall growth in sales for FY 2013-14 of around 16% which is considered based on 8% sector growth rate and around 8% increase in consumption due to additional availability of power. a) HT Categories The HT Industrial Category is facing 40% R&C measures. These measures are expected to be relaxed in FY 2013-14 due to availability of additional power. Therefore sales under this category are expected to increase by 15% during FY 2013-14. LT Categories As reasoning for increase in consumption projected for LT consumer categories, TANGEDCO has provided the following remarks. Considering that large quantum of the additional power will be available in FY 2013-14, major quantum has been projected for LT consumers who are covered under load shedding. Domestic consumers being a major group in the consumer mix has resulted in an increase of 23% over that of FY 2012-13. TANGEDCO expects significant increase in Hut and Agriculture Consumption for FY 2013-14 due to availability of power from upcoming plants from own and central generating stations. It is expected that this additional power will be used by LT category consumers for reduction of load shedding hours which are currently prevailing in the State. Considering the above factors, TANGEDCO has revised the growth rates for Hut and Agriculture consumers on par with other LT consumers.
4.2
4.3
b)
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It is also expected that there will be a marginal reduction in growth rate for LT Industries category as they would restart their operation from the existing reduced production due to the power deficit situation. 4.4 Similarly, the sales growth was estimated for other categories of LT consumers based on the connected load and number of consumers in each category. Table 151: CAGR Growth in consumption as indicated in the petition as well as submitted in reply to data gaps
Consumer Category As per petition 2013-14 HT Industries Commercial and Other HT Lift Irrigation and co-ops (HT) TOTAL HT Domestic Huts Industries Agriculture & Government seed farm Commercial and Other TOTAL LT TOTAL DEMAND 15% 24% 6% 15% 12% 7% 15% 6% 14% 16% 16% 2014-15 16% 20% 6% 15% 12% 7% 11% 6% 16% 10% 11% 2015-16 4% 6% 1% 4% 6% 6% 4% 2% 6% 5% 5% HT Category 15% 24% 24% 15% 23% 19% 13% 10% 14% 16% 16% 16% 20% 20% 15% 10% 7% 11% 4% 16% 10% 11% 4% 6% 6% 4% 6% 6% 4% 2% 6% 5% 5% Revised submission 2013-14 2014-15 2015-16
LT Category
4.5
The sales growth projected by TANGEDCO in its petition is as follows:

Table 152: Sales Projection for the second MYT control period (MUs) As per petition Particulars 2013-14 2014-15 2015-16 2013-14 2014-15 2015-16 Revised submission
I-A I-B II-A II-B II-C III IV V VI
I-A I-B
HT Consumer Category HT Industries 9,107 10,564 Railway Traction 798 848 Govt. Educational Inst. etc. 1,190 1,333 Pvt. Educational Inst. etc. 293 328 Places of Public Worship 6 7 HT Commercial 2,277 2,732 Lift Irrigation 7 7 Supply to Puducherry and Other States 413 413 Temporary supply 5 5 Total HT 14,096 16,238 LT Consumer Category Domestic 23,237 25,666 Huts 508 543
11,029 861 1,391 343 8 2,905 7 413 5 16,962 27,085 577
8,152 813 1,035 256 0 1,626 5 426 175 12,487 21,526 508
9,456 911 1,159 287 0 1,951 6 428 186 14,384 23,776 543
9,872 951 1,210 300 0 2,074 6 423 189 15,025 25,092 577
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As per petition Particulars 2013-14 I-C II-A II-B-1 II-B-2 IIC IIIA 1 IIIA 2 IIIB IV V VI LT bulk supply Public Lighting and Water Supply Govt. Educational Inst. etc. Pvt. Educational Inst. etc. Places of Public Worship Cottage and Tiny Industries Power Looms L.T. Industries L.T. Agriculture L.T. Commercial Temporary supply Total LT Total HT + LT 12 2,018 158 317 156 151 1,073 5,659 10,269 6,182 30 49,770 63,866
Revised submission
2014-15 2015-16 2013-14 2014-15 2015-16 13 2,250 181 366 178 168 1,234 6,301 10,433 7,196 34 54,561 70,799 13 2,349 189 382 186 172 1,264 6,578 10,600 7,651 35 57,081 74,043 10 1,750 124 220 120 141 863 4,837 12,159 5,521 43 47,822 60,309 11 1,951 141 254 136 157 993 5,385 12,603 6,427 50 52,426 66,809 11 2,037 147 265 142 161 1,017 5,622 12,891 6,834 51 54,847 69,871
4.6
As part of reply to data gaps TANGEDCO has revised its projections of energy consumption for the MYT control period of FY 2013-14 to FY 2015-16 based on actual sales upto February and one month estimate for March of FY 2012-13. TANGEDCO has stated that the projections for FY 2013-14 to FY 2015-16 are based on a confluence of factors namely, past trend in sales growth, actual sales in 2012-13, and additional availability of energy from 2013-14 onwards. The growth rate in FY15 and FY16 are said to significantly decrease as compared to FY 2013-14 since the normal growth rate is expected to be restored by FY 2013-14, when majority of the additional generating capacity is added to the system. The Commission after scrutiny of the revised submissions observes the following: Sale to Metered categories: Given the fact that additional capacity to the tune of 3,971MW will be available during FY2013-14 onwards the power supply position is expected to improve. Hence the Commission after taking into cognisance the additional availability of energy has decided to allow sales as filed by TANGEDCO in its reply to data gaps for all metered categories except HT Industries and LT-Domestic categories. The Commission has re-estimated the sales projections for two metered categories namely HT- Industrial and LT-Domestic categories as the growth rates projected by TANGEDCO for these two categories seem inaccurate. Industries (HT-IA): To arrive at a realistic consumption for this category, the Commission has adopted the following approach. The Commission has estimated the increase in consumption due to improving power supply. As elaborated earlier, FY 2013-14 will see capacity addition to the tune of 3,971MW, directly impacting the load shedding being imposed.
4.7
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Further to arrive at an appropriate base consumption the Commission has calculated the 5 year CAGR growth rate of this category of consumers upto FY 2011-12 as 4.2%. This rate has been calculated to exclude the negative growth rate that occurred in the year FY2012-13 due to imposition of R&C measures. This growth rate has been applied on the revised sales as projected by TANGEDCO for 2012-13 to arrive at the base consumption for FY 2013-14. With the improving power supply, the industrial consumption is expected to increase. Hence, to the increased sales thus arrived the Commission has incorporated the impact of improving power supply position. For estimating the impact of improved supply, Commission has relied upon average load relief per day in FY 2012-13. The calculation for the same has been shown in the tables below.
Table 153: HT Industrial consumption for the MYT control period FY2013-14 to 2015-16 Sl. No. 1 2 3 4 5 Particulars Revised Industrial sales projected for 2012-13 by TANGEDCO (MUs) 5 years CAGR (FY07 FY12) Consumption calculated by Commission based on the CAGR over previous years consumption Increase in consumption due to improved power supply position Total Industrial consumption 2012-13 7,111 4.2% 7,409 929 8,337 8,686 929 9,615 9,726 9,726 2013-14 (MUs) 2014-15 (MUs) 2015-16 (MUs)
Domestic (LT IA): TANGEDCOs reply to data gaps shows increase in Domestic consumption by 23%, which appears unfounded. To arrive at a realistic consumption for this category, the Commission has used the following approach. To project number of domestic consumers for FY2013-14 to FY2015-16, the Commission has calculated the average of growth rates of number of consumers between FY 2010-11 to FY 2012-13. Based on this rate of 4.6%, the number of domestic consumers upto FY 2015-16 has been projected. The specific consumption (kWh/Annum) for this category has been calculated based on actual sales and consumer data till FY 2011-12. The specific consumption of FY12-13 has not been considered as it shows a negative growth due to the load shedding imposed during the year. The Commission has then calculated 5 years CAGR in the specific consumption between FY 2007-08 to FY 2011-12. Based on this growth rate of 3.8% and base specific consumption of FY 2011-12, the specific consumptions of FY 2013-14 to FY 2015-16 have been calculated. Based on the number of domestic consumers and specific consumption as calculated above, the Commission has calculated the sales to domestic
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consumers for FY 2013-14 to FY 2015-16 as 20,002 MUs, 21,704 MUs and 23,559 MUs respectively. The table below illustrates the calculation.
Table 154: LT Domestic consumption for the MYT control period FY2013-14 to 2015-16 Sl. No. 1 2 Particulars No. Of Consumers in 2012-13 Specific Consumption in 201112 (kWh / Annum) Consumption (MUs) (1x2) Base 16494340 1,117 Growth rate 4.6% 3.8% 2013-14 1,72,57,767 1,159 20,002 2014-15 1,80,56,528 1,202 21,704 2015-16 1,88,92,259 1,247 23,559
The Commission maintains its stance on disallowance of sale to Puducherry along with the corresponding revenue booked.
Sale to Un-Metered categories: Based on the same approach as followed for estimating consumption for FY 2012-13, the Commission has calculated the consumption for Hut consumers and Agricultural consumers as follows. Hut category (LT I-B): The Commission has recalculated the consumption for FY 2013-14 to FY 2015-16, based on the details in Government Order (G.O.).Ms. No.2 dated 03-06-2011 issued by GoTN. The Commission has considered the wattage as specified by the GoTN and the hours as considered by TANGEDCO. The Commission has made some reasonable assumptions to undertake this calculation. To project the total number of hut connections for the control period, the 3 year CAGR rate of 1.6% in hut connections between FY 2009-10 to FY 2012-13 has been considered. It has been assumed that an equal number of CFL as distributed in FY 2012-13 will be distributed each year till FY 2015-16. It has been assumed that 75,000 mixies, grinders and fans will be distributed to hut consumers each year till FY 2015-16. Based on these assumptions the hut consumption of 501MUs, 540 MUs and 580 MUs has been arrived at for FY 2013-14, FY 2014-15 and FY 2015-16 respectively.
Table 155: LT Hut consumption for the MYT control period FY2013-14 to 2015-16 Type of Appliance Light TV CF Lamp Mixie Grinder Fan RGGVY No. Of Hut connections 2013-14 1,300,159 891,391 178,088 342,741 342,817 331,390 373 2014-15 1,232,067 924,262 267,132 417,741 417,817 406,390 373 2015-16 1,162,878 958,344 356,176 492,741 492,817 481,390 373 Watt 40 70 11 550 300 61 40 Hours 6 10 6 1 2 12 12 Days 365 365 365 365 156 365 365 Consumption (MUs) 2013-14 113.89 227.75 4.29 34.40 32.09 88.54 0.07 501 2014-15 107.93 236.15 6.44 41.93 39.11 108.58 0.07 540 2015-16 101.87 244.86 8.58 49.46 46.13 128.62 0.07 580
Total Consumption
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Agricultural category (LT IV): The Commission has recalculated the consumption for FY 2013-14 to FY 2015-16 based on the same methodology as adopted for calculating Agricultural consumption for FY 2012-13. The Commission has re-estimated the agricultural consumption based on the average capacity of pumpset in the middle of the year as calculated below. It has been assumed that 50% of the connections and corresponding capacity gets added in the first half of the year. To estimate the number of consumers and load profile of connections for the control period, the Commission has accepted the addition of 40,000 connections per year as submitted by TANGEDCO. To project load, the Commission has considered the load of 5.4 HP per connection for FY 2012-13 and used the same for the entire control period. To calculate the average consumption per HP per annum for the control period, the Commission has relied on the actual average consumption data for FY 2010-11 and FY 2011-12. The Commission has observed that growth in average consumption in FY 2011-12 over FY 2010-11 was 4.7%, this rate has been used to project average consumption per HP per annum for the control period and the average consumption has been capped at the level of 966 kWh/ HP/Annum for the remaining two years of the control period upto FY 2015-16. Based on the above assumptions the consumption for FY 2013-14, FY 2014-15 and FY 2015-16 has been worked out as 10,821 MUs, 11,039 MUs and 11,250 MUs respectively.
Table 156: LT Agricultural consumption for the MYT control period FY2013-14 to FY 2015-16 Sl. No. 1 2 Particulars No. of service connections at the end of the year YoY Increase % added in the first half No. of service connections in the middle of the year Connected load in HP at the end of the year YoY Increase Connected load in HP at the middle of the year Average capacity of pumpset in HP at the middle of the year ( 6/3 ) Average consumption in kWh /HP / Annum Consumption in MUs ( 3 x 7 x 8 ) 2013-14 2,076,898 40,000 50.0% 2,056,898 11,317,028 233,024 11,200,516 5.45 966 10,821 2014-15 2,116,898 40,000 50.0% 2,096,898 11,534,988 217,960 11,426,008 5.45 966 11,039 2015-16 2,156,898 40,000 50.0% 2,136,898 11,752,948 217,960 11,643,968 5.45 966 11,250
3 4 5 6 7 8 9
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4.8
The Commission has mapped the growth in number of consumers and the load of various consumer categories based on actual growth from FY 2007-08 till FY 201213. For projecting the number of consumers for the control period, the Commission has used the 5 years CAGR rate upto FY 2012-13, in cases where a negative growth is observed in FY 2012-13 an appropriate rate has been assumed. For projecting the consumer load for the control period the Commission observed that the load data as given by TANGEDCO for FY 2012-13 varied drastically from the actuals of FY 2011-12. Hence the Commission has used 3years CAGR prior to FY 2012-13 for projecting the load of all consumer categories. In cases where a negative growth is observed an appropriate rate has been assumed. Based on the above assumptions and revised calculations, the total sales as approved by the commission for the Control period FY 2013-14 to FY 2015-16 is as follows.
Table 157: Sales as approved by the Commission for FY 2013-14 to FY 2015-16 (MUs) Particulars HT Consumer Category 2013-14 2014-15 2015-16
4.9
I-A I-B II-A II-B III IV V
HT Industries Railway Traction Govt. Educational Inst. etc. Pvt. Educational Inst. etc. HT Commercial Lift Irrigation Temporary supply Total HT LT Consumer Category
8,337 813 1,035 256 1,626 5 175 12,247 20,002 501 10 1,750 124 220 120 141 863 4,837 10,821 5,521 43 44,953 57,199
9,615 911 1,159 287 1,951 6 186 14,114 21,704 540 11 1,951 141 254 136 157 993 5,385 11,039 6,427 50 48,787 62,901
9,726 951 1,210 300 2,074 6 189 14,455 23,559 580 11 2,037 147 265 142 161 1,017 5,622 11,250 6,834 51 51,674 66,129
Domestic Huts LT bulk supply Public Lighting and Water Supply Govt. Educational Inst. etc. Pvt. Educational Inst. etc. Places of Public Worship Cottage and Tiny Industries Power Looms L.T. Industries L.T. Agriculture L.T. Commercial Temporary supply Total LT Total HT + LT
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4.10
Therefore the sales as approved by the Commission for FY 2013-14 are 57,199 MUs, for FY 2014-15 are 62,901 MUs and for FY 2015-16 are 66,129 MUs.
Energy Availability
4.11 TANGEDCO in its Petition projected the details of energy availability from FY 201314 to FY 2015-16 based on the energy availability projections estimates for FY 201213 and considering the historical trend of actual energy available. In this section the Commission analyses the energy availability projections of TANGEDCO for the second control period and accordingly approves the energy availability
Own Generation 4.12 The installed capacity of TANGEDCO generating stations, which as on March 2013 was 5792 MW, is expected to increase to 7592 MW by March 2014 with new thermal stations expected to achieve commissioning. The energy availability with respect to own generating stations is estimated considering energy available from existing generating stations and new generating stations.
Thermal generating stations 4.13 The operational performance parameters such as plant load factor and auxiliary consumption submitted by TANGEDCO in its current MYT petition are tabulated below.
Table 158: Plant load factor and auxiliary consumption of existing thermal stations submitted by TANGEDCO (FY 2013-14 to FY 2015-16) Name of the power plant Plant load factor 2013-14 ETPS TTPS MTPS NCTPS TGTPS KGTPS BBGTPS VGTPS - 1 VGTPS 2 37.87% 82.74% 89.01% 89.15% 75.35% 73.80% 5.71% 78.47% 78.72% 2014-15 36.80% 84.31% 89.01% 91.87% 78.18% 73.80% 5.71% 78.47% 73.66% 2015-16 35.20% 85.31% 88.77% 91.64% 78.20% 71.14% 5.69% 75.63% 78.51% Auxiliary Consumption 2013-14 15.00% 8.50% 8.55% 8.50% 6.00% 6.00% 0.99% 6.00% 6.00% 2014-15 15.00% 8.50% 8.55% 8.50% 6.00% 6.00% 0.99% 6.00% 6.00% 2015-16 15.00% 8.50% 8.55% 8.50% 6.00% 6.00% 1.00% 6.00% 6.00%
4.14
The net generation submitted by TANGEDCO from FY 2013-14 to FY 2015-16 based on the above performance parameters is tabulated below.
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Table 159: Net generation submitted by TANGEDCO for FY 2013-14 to FY 2015-16 (MUs) Name of the power plant ETPS TTPS MTPS NCTPS TGTPS KGTPS BBGTPS VGTPS Total 2013-14 987 6963 5990 4502 669 614 59 1211 20995 2014-15 959 7096 5990 4639 694 614 59 1173 21224 2015-16 920 7200 5990 4640 697 593 59 1191 21290
Plant load factors 4.15 As regards Target PLF to be achieved by various Thermal Power Stations, Regulation-37 of TNERC Tariff Regulations, 2005 states as under: 37. Norms of Operation The norms of operation for Thermal Generating Stations shall be as under: (i) Target Availability for recovery of full capacity (fixed) charges:
(a) All Thermal Generating stations in Tamil Nadu except Ennore Thermal Power Generating Station - 80%
(b) Ennore Thermal Power Generating Station (Till Renovation and Modernization works in all units are completed) - 50% (c) In respect of Generating Stations of Independent Power Producers -As per PPA (d) New Thermal Stations - 80% (ii) Target Plant Load Factor for incentive (a) All the Thermal Power Generating Stations except the existing Stations of IPPs covered under PPA- 80% (b) Power Generating Stations of IPPs covered under Existing PPA - As per PPA 4.16 The historical trend of actual PLF achieved by thermal stations from FY 2007-08 is tabulated below.
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Table 160: Historical PLF of existing thermal generating stations Name of the power plant ETPS TTPS MTPS NCTPS TGTPS KGTPS BBGTPS VGTPS Unit 1 VGTPS Unit 2 2007-08 51.42% 86.50% 90.07% 84.20% 71.60% 31.82% 3.95% 72.00% 42.38% 2008-09 49.17% 85.35% 87.88% 86.52% 75.48% 82.16% 17.10% 84.50% 35.32% 2009-10 38.05% 77.91% 86.85% 87.43% 56.99% 73.58% 7.78% 82.52% 2010-11 35.44% 77.30% 82.42% 81.74% 68.74% 19.51% 4.93% 67.59% 56.16% 2011-12 22.61% 85.60% 92.77% 84.81% 74.47% 46.58% 2.81% 78.94% 42.38% Average 39.34% 82.53% 88.00% 84.94% 69.46% 50.73% 7.31% 77.11% 44.06%
4.17
The Commission observed that the PLFs submitted by TANGEDCO for ETPS are in line with the average PLF of last five years. TANGEDCO in response to data gaps has replied that as ETPS is proposed to be decommissioned in a phased manner and it has considered only 350 MW as available capacity from ETPS for the control period. Accordingly arrived at the net generation after considering PLF of 37.87% for FY 2013-14. However, it is observed that in the calculation of fixed costs TANGEDCO has not reduced corresponding GFA of ETPS. Hence, the Commission is considering entire 450 MW as available capacity in the next control period. Also, considering the performance of ETPS in FY 2011-12, the Commission approves a PLF of 25% for the second control period (FY 2013-14 to FY 2015-16) for the purpose of energy availability. The average PLF for TTPS in the last five years was 82.53%. TANGEDCO has proposed PLFs ranging from 82.74% to 85.31% in the second control period. Also, TTPS has been able to achieve a PLF of 85.60% in FY 2011-12 and PLF of 89.19% in FY 2012-13 (Upto February 2013). Based on historic performance, Commission approves a PLF of 85.00%, higher than last five year average, for the second control period for the purpose of energy availability. TANGEDCO has proposed PLFs of around 89.00% for MTPS while the average PLF of last five years was 88.00%. As PLF proposed by MTPS is in line with average PLF, the Commission approves the PLF of 89.00% for MTPS as proposed by TANGEDCO for the next control period for the purpose of energy availability. The average PLF of last five years for NCTPS was 84.94%. However, NCTPS has performed better in FY 2012-13 registering a PLF of 91.85% (upto February 2013). TANGEDCO in its petition proposed higher PLFs ranging from 89.15% to 91.87%. Considering the improved performance for NCTPS and TANGEDCOs submission, Commission approves PLF of 89% for NCTPS in the second control period for the purpose of energy availability. .
4.18
4.19
4.20
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4.21
The average PLFs of gas generating stations are lower than 70% except for VGTPS unit 1. The reasons for lower PLFs were already mentioned in the earlier sections. TANGEDCO proposed PLFs in the range of 71.14% to 78.72% except for BBGTPS. Also, as per TANGEDCO Petition all the gas plants will be operational in FY 201213 after attending the faults. Hence, the plants are expected to be available for the entire duration of FY 2013-14 and Commission is of the view that there is no merit in TANGEDO submission of PLFs being lower than the approved norms in the second control period, according to Regulation-37 of TNERC Tariff Regulations, 2005. Therefore Commission approves a load factor of 80% in the second control period for the gas based stations for the purpose of energy availability. . Due to non availability of gas BBGTPS is run using Naphtha fuel and is operated usually during the peak hours. TANGEDCO has proposed a PLF of 5.71% for BBGTPS during the second control period. Commission is of the view that the PLF proposed by TANGEDCO is in line with its approval during the first control period and accordingly accepts TANGEDCOs submission. Further BBGTPS is normally operated in condenser mode and not in generator mode and therefore low PLF as envisaged is expected.
4.22
Auxiliary Consumption 4.23 The Commission observed that in accordance with Regulation-37 (v) of TNERC Tariff Regulations, 2005 the auxiliary consumption is required to be approved as percentage of Gross Generation. Regulation-37 (v) of TNERC Tariff Regulations, 2005 states as under: 37. Norms of Operation The norms of operation for Thermal Generating Stations shall be as under: (v) Auxiliary Energy Consumption (a) Coal based generating station With Cooling tower Without Cooling tower (i) 200 MW Series 9.00% 8.50% (ii) 500 MW Series Steam driven Boiler Feed Pumps 7.50% 7.00% Electrically driven BFPs 9.00% 8.50% (b)Gas-based and Naphtha based Generating Stations: (i) Combined Cycle: 3% (ii) Open Cycle: 1%
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4.24
TANGEDCO has proposed the auxiliary consumption for its thermal stations TTPS, NCTPS and BBGTPS in line with the TNERC Tariff Regulations, 2005. Hence Commission accepts the TANGEDCO proposal and approves auxiliary consumption of 8.50% for TTPS and NCTPS while for BBGTPS Commission approves auxiliary consumption of 0.99% during the second control period. For MTPS, TANGEDCO proposed a nominally higher auxiliary consumption of 8.55% in comparison to the approved norm of 8.50% but has not provided adequate explanation for the same in its Petition. Hence the Commission is approving the auxiliary consumption of 8.50% even for MTPS in accordance to its tariff regulations. For ETPS, TANGEDCO has proposed auxiliary consumption of 15% in line with the Commission approved number in its last tariff order. ETPS is the oldest generating plant of TANGEDCO and already served its useful life and on completion of major R&M works, the Units of Ennore TPS have served further 5-10 years. Hence, Commission relaxes the norm and approves the auxiliary consumption of 15% in line with its last tariff order. For gas based thermal stations Commission has relaxed its norm of auxiliary consumption to 6% on account of installation of gas booster compressors in its tariff order dated July 2010. TANGEDCO has proposed the auxiliary consumption in accordance to the relaxed norms. In addition, based on the data submitted by TANGEDCO the actual auxiliary consumption was around 6% in FY 2012-13 for gas based thermal stations. Hence, Commission approves the auxiliary consumption of 6% for gas based stations in second control period.
4.25
4.26
4.27
Table 161: Plant load factor and auxiliary consumption of existing thermal stations approved by Commission (FY 2013-14 to FY 2015-16) Name of the power plant 2013-14 ETPS TTPS MTPS NCTPS TGTPS KGTPS BBGTPS VGTPS - 1 VGTPS 2 25.00% 85.00% 89.00% 89.00% 80.00% 80.00% 5.71% 80.00% 80.00% Plant load factor 2014-15 25.00% 85.00% 89.00% 89.00% 80.00% 80.00% 5.71% 80.00% 80.00% 2015-16 25.00% 85.00% 89.00% 89.00% 80.00% 80.00% 5.71% 80.00% 80.00% Auxiliary Consumption 2013-14 15.00% 8.50% 8.50% 8.50% 6.00% 6.00% 0.99% 6.00% 6.00% 2014-15 15.00% 8.50% 8.50% 8.50% 6.00% 6.00% 0.99% 6.00% 6.00% 2015-16 15.00% 8.50% 8.50% 8.50% 6.00% 6.00% 0.99% 6.00% 6.00%
4.28
The net generation submitted by TANGEDCO and approved by the Commission from FY 2013-14 to FY 2015-16 is tabulated below.
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Table 162: Net generation approved by the Commission for FY 2013-14 to FY 2015-16 (MUs) Existing thermal stations Name of the power plant ETPS TTPS MTPS NCTPS TGTPS KGTPS VGTPS BBGTPS Total FY 2013-14 Petition 987 6963 5990 4502 669 614 1211 59 20995 Commission 652 7154 5992 4494 711 665 1232 59 20959 FY 2014-15 Petition 959 7096 5990 4639 694 614 1173 59 21224 Commission 652 7154 5992 4494 711 665 1232 59 20959 FY 2015-16 Petition 920 7200 5990 4640 697 593 1191 59 21290 Commission 653 7173 6009 4507 713 667 1235 59 21016
Hydro generating stations 4.29 TANGEDCO has projected the hydro generation considering a PLF of 28.39%, 29.24% and 32.16% for FY 2013-14, FY 2014-15 and FY 2015-16 respectively. In addition, TANGEDCO has assumed auxiliary consumption of 1% in accordance to TNERC tariff regulations. However, in its Petition TANGEDCO has not provided any adequate explanation for the basis of the assumed PLF. In the last order Commission has approved the hydro generation excluding the generation from Kadamparai PSHES by considering last 8 year average. In this order also Commission adopts a similar approach for the determination of hydro generation and approves it based on six years average. The actual hydro generation from FY 2004-05 has been given in below table. While arriving at the average hydro generation of 4844 MUs, the Commission has not considered the hydro generation during FY 2006-08 and FY 2007-08 as in those years there were exceptionally high rainfalls and during FY 2012-13 as there was severe drought in that year. For the second control period, Commission has considered the average hydro generation of 4844 MUs as energy availability from hydro power plants excluding Kadamparai PSHES.
4.30
4.31
Table 163: Actual hydro generation excluding Kadamparai PSHES (MU) Year FY 2004-05 FY 2005-06 FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 Average Hydro generation excluding Kadamparai PSHES 4153 5531 5040 5122 4515 4701 4844
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4.32
TANGEDCO has filed the additional energy required for Kadamparai PSHES in the second control period based on historical actual energy requirement for Kadamparai PSHES. Commission approves the additional energy requirement in the second control period based on the actual additional energy requirement in the first control period.
Table 164: Kadampari generation and power consumption (MUs) Source Generation Mode Pump Mode Additional Requirement FY 2010-11 290 332 42 FY 2011-12 506 534 28 FY 2012-13 309 335 26 32 Average
4.33
The net hydro energy and additional energy requirement for Kadamparai PSHES approved by the Commission during the second control period is tabulated below:
Table 165: Net hydro generation and additional energy requirement approved by the Commission for Kadamparai PSHES (MUs) Particulars Net Hydro generation excluding Kadamparai Additional energy required for Kadamparai PSHES FY 2013-14 Petition Commission 5207 28 4386 32 FY 2014-15 Petition Commission 5211 28 4386 32 FY 2015-16 Petition Commission 5732 28 4386 32
Wind Generation 4.34 TANGEDCO has submitted net available energy of 28 MUs from Wind Mills from FY 2013-14 to FY 2015-16. Based on actual available energy from TANGEDCOs wind mills during first control period, Commission approves energy availability of 12 MUs for second control period
4.35
Table 166: Approved energy availability from wind mills (MUs) Particulars Wind Generation FY 2013-14 Petition Commission 28 12 FY 2014-15 Petition Commission 28 12 FY 2015-16 Petition Commission 28 12
New Generating Stations 4.36 TANGEDCO in its Petition has submitted CoD for new generating stations as 1st March 2013 for MTPS Stage III, 1st April 2013 for NCTPS Stage-II (unit 2) and 1st May 2013 for NCTPS stage-II (unit 1). However, these units have not been commissioned as on date and TANGEDCO in response to data gaps has further revised the commissioning dates as per below table:
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Table 167: Revised CoD of the new generating stations Expected date of Revised Submission commissioning June 2013 Mettur Thermal Power Project - March 2013 Stage 3 - ( 1x 600 MW) June North Chennai Thermal Power Unit-II April 2013 Unit-II Project Unit-I May 2013 Unit-I August 2013 Stage-II ( 2x600 MW) Ennore Expansion* December 2015 December 2015 *Project yet to be awarded Table 168: Plant load factor and auxiliary consumption of new generation stations as per TANGEDCO Petition Name of the power plant NCTPS Unit 1 NCTPS Unit 2 MTPS Stage III Ennore Expansion Plant load factor 2013-14 70.71% 70.71% 78.21% 2014-15 80.02% 80.02% 83.43% 2015-16 86.04% 86.04% 88.64% 80.00% Auxiliary Consumption 2013-14 8.50% 8.50% 9.00% 2014-15 8.50% 8.50% 9.00% 2015-16 8.50% 8.50% 9.00% 8.50% Name of the Project
2013
4.37
Commission approves the PLF of 80% in accordance with its tariff regulations during the financial year of commissioning. In the subsequent years, the plants are expected to have stabilized and perform at similar levels of the existing coal based thermal stations. Hence, Commission approves the PLF of 85% for subsequent years for calculation of energy availability. As per the clause 37 (vi) of the TNERC Tariff Regulations, 2005 stabilization period is defined as follows: The stabilization period of a unit shall be reckoned commencing from the date of commercial operation of that unit as follows (a) coal-based and lignite-fired Generating Stations -180 days (b) Gas turbine / combined Generating Stations - 90 days
4.38
4.39
Also, the clause 37 (v) of TNERC Tariff Regulations 2005 gives a relaxation on the auxiliary consumption during the stabilization period. The respective clause of TNERC tariff regulation is given below: (d) During stabilization period, normative auxiliary consumption shall be reckoned at 0.50 percentage point more than the norms indicated at (a), (b) and (c) above.
4.40
The Commission has not fixed the norms for auxiliary consumption for 600 MW series coal based generation stations. However, based on the norms for 500 MW series and the regulations, Commission approves 9.00% as auxiliary consumption during the first six months (stabilization period) after Commissioning and at 8.50% after the stabilization period.
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Table 169: Plant load factor and auxiliary consumption of new thermal stations approved by Commission (FY 2013-14 to FY 2015-16) Name of the power plant NCTPS Unit 1 NCTPS Unit 2 MTPS Stage III Ennore Expansion Plant load factor 2013-14 2014-15 2015-16 80.00% 80.00% 80.00% 85.00% 85.00% 85.00% 85.00% 85.00% 85.00% 80.00% Auxiliary Consumption 2013-14 2014-15 2015-16 8.88% 8.83% 8.83% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 9.00%
4.41
The net generation submitted by TANGEDCO and approved by the Commission from FY 2013-14 to FY 2015-16 is tabulated below.
Table 170: Net generation approved by the Commission for FY 2013-14 to FY 2015-16 (MUs) New Thermal stations Name of the power plant NCTPS Stage II MTPS Stage III Ennore Expansion Total 9974 8306 11764 12264 FY 2013-14 Petition 6387 3587 Commission 5429 2878 FY 2014-15 Petition 7774 3990 Commission 8176 4088 FY 2015-16 Petition 8275 4240 1058 13573 Commission 8198 4099 1049 13347
Power Purchase from other sources Central Generating Stations (CGS) 4.42 The allocation of firm power to TANGEDCO from central generating stations is tabulated below:
Table 171: TANGEDCO share in central generating stations Installed Capacity (in MW) Firm Share (in MW) Total share including unallocated power (%)* 100.00% 30.31% 33.90% 53.84% 26.09% 27.40% 22.84% 22.84% 75.00% 25.22%
Power Station Existing Stations Neyvelli TS - I Neyvelli TS - II - Stage 1 Neyvelli TS - II - Stage 2 Neyvelli TS - I Expansion Ramagundam super thermal power station I & II Ramagundam super thermal power station III Simhadri Stage 2 , Units 3 Simhadri Stage 2 , Units 4 NTPC-TNEB JV - Unit 1 (Vallur) Talcher - II
Firm Share (%)
600 630 840 420 2100 500 500 500 500 2000
600 176 265 193 470 118 95 95 347 477
100.00% 27.94% 31.55% 45.95% 22.38% 23.60% 19.00% 19.00% 69.40% 23.85%
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Power Station Madras APS Kaiga APS Sub Total New Stations NTPC TNEB JV - Unit 2 (Vallur) NTPC TNEB JV - Unit 3 (Vallur) Kudankulam APS - Unit 1 Kudankulam APS - Unit 2 PFBR Kalpakkam Neyveli TS - II Expnasion Unit I Neyveli TS - II Expansion Unit II NLC-TNEB - Tuticorin Unit 1 NLC-TNEB - Tuticorin Unit 2 Sub Total Total
Installed Capacity (in MW) 440 880 9910 500 500 1000 1000 500 250 250 500 500 5000 14910
Firm Share (in MW) 328 229 3393 347 347 463 463 167 163 162 194 194 2500 5893
Firm Share (%) 74.55% 22.27%
Total share including unallocated power (%)* 75.36% 26.08%
69.40% 69.40% 46.25% 46.25% 33.40% 65.20% 64.80% 38.70% 38.70%
*Total share from CGS including unallocated power as per SRPC March 2013 monthly report 4.43 It can be observed that TANGEDCO has a firm allocation of 3393 MW from existing CGS and this allocation is expected to increase by 2500 MW in the second control period with most of the capacity additions happening in FY 2013-14. TANGEDCO has revised the date of CoD of new CGS stations based on the latest progress and the revised dates are as tabulated below. It is understood that the revised dates submitted by TANGEDCO are based on the status as on date for each of the stations, Commission has considered the revised submission for the purpose of calculation of energy availability..
4.44
Table 172: Revised CoD of new CGS stations Name of the new CGS NTPC TNEB JV - Unit 2 (Vallur) NTPC TNEB JV - Unit 3 (Vallur) Kudankulam APS - Unit 1 Kudankulam APS - Unit 2 PFBR Kalpakkam Neyveli TS - II Expansion Units I Neyveli TS - II Expansion Units II NLC-TNEB - Tuticorin Unit 1 NLC-TNEB - Tuticorin Unit 2 Revised Submission June-13 October-13 September-13 October-13 June-14 March-14 September-14 December-13 March-14
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4.45
The plant load factors of the existing CGS stations for FY 2010-11 and FY 2011-12 are assumed based on their historical performance obtained from SRPC reports. The historical PLFs and assumed PLF for the CGS stations is tabulated below.
Table 173: Assumed PLF for the second control period Name of the CGS Stations Neyvelli TS - I Neyvelli TS - II Neyvelli TS - I Expansion Ramagundam super thermal power station I & II Ramagundam super thermal power station III Simhadri Stage 2 , Units 3 & 4 Talcher - II Madras APS Kaiga APS 86.14% 58.09% 65.86% 2010-11 73.80% 83.40% 81.42% 90.27% 90.27% 2011-12 75.67% 85.87% 82.47% 93.07% 93.07% 89.79% 85.00% 65.10% 67.49% Assumption 75.00% 85.00% 82.00% 90.00% 90.00% 85.00% 85.00% 60.00% 65.00%
4.46
For the new generating stations the PLF assumption and the basis are as given below: i. Thermal stations 80% during the financial year of commissioning and later 85% as per CERC tariff regulations, 2009 Nuclear power stations 50% during the financial year of commissioning and later 60% (PLF that was considered for Madras APS).
ii.
4.47
The auxiliary consumption for all the thermal stations has been taken as per CERC Tariff Regulations, 2009 and for nuclear stations the auxiliary consumption is assumed to be 10%. The station wise PLF and auxiliary consumption assumed for central generating stations for arriving at the energy availability is tabulated below:
4.48
Table 174: PLFs and Auxiliary consumption considered by the Commission for CGS stations Power Station Existing Stations Neyvelli TS - I Neyvelli TS - II Neyvelli TS - I Expansion Ramagundam super thermal power station I & II Ramagundam super thermal power station III Simhadri Stage 2 NTPC-TNEB JV - Unit 1 (Vallur) Talcher - II Madras APS 75.00% 85.00% 82.00% 90.00% 90.00% 85.00% 85.00% 85.00% 60.00% 75.00% 85.00% 82.00% 90.00% 90.00% 85.00% 85.00% 85.00% 60.00% 75.00% 85.00% 82.00% 90.00% 90.00% 85.00% 85.00% 85.00% 60.00% 12.00% 10.00% 9.50% 8.50% 8.50% 8.50% 8.50% 10.50% 10.00% 12.00% 10.00% 9.50% 8.50% 8.50% 8.50% 8.50% 10.50% 10.00% 12.00% 10.00% 9.50% 8.50% 8.50% 8.50% 8.50% 10.50% 10.00% Plant load factors 2013-14 2014-15 2015-16 Auxiliary Consumption 2013-14 2014-15 2015-16
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Power Station Kaiga APS New Stations NTPC TNEB JV - Unit 2 (Vallur) NTPC TNEB JV - Unit 3 (Vallur) Kudankulam APS - Unit 1 Kudankulam APS - Unit 2 PFBR Kalpakkam Neyveli TS - II Expansion Unit I Neyveli TS - II Expansion Unit II NLC-TNEB - Tuticorin Unit 1 NLC-TNEB - Tuticorin Unit 2
Plant load factors 2013-14 65.00% 80.00% 80.00% 50.00% 50.00% 80.00% 80.00% 80.00% 80.00% 2014-15 65.00% 85.00% 85.00% 60.00% 60.00% 50.00% 85.00% 85.00% 85.00% 85.00% 2015-16 65.00% 85.00% 85.00% 60.00% 60.00% 60.00% 85.00% 85.00% 85.00% 85.00%
Auxiliary Consumption 2013-14 10.00% 8.50% 8.50% 10.00% 10.00% 10.00% 8.50% 8.50% 8.50% 8.50% 2014-15 10.00% 8.50% 8.50% 10.00% 10.00% 10.00% 8.50% 8.50% 8.50% 8.50% 2015-16 10.00% 8.50% 8.50% 10.00% 10.00% 10.00% 8.50% 8.50% 8.50% 8.50%
4.49
Based on the total share in the CGS plants, PLFs and auxiliary consumptions as per above table and revised CoD submitted by TANGEDCO for new plants, Commission has determined the net energy available from the CGS stations. The summary of net energy approved by the Commission and filed by TANGEDCO in its petition is tabulated below:
Table 175: Summary of energy availability from CGS stations approved by Commission (MUs) Central Generation Stations NTPC SR (I&II) NTPC SR III NLC TS - I NLC TS - II NLC TS Expansion I NTPC Talcher NTPC Simhadri MAPS KAIGA NTPC Dadri NTPC Vallur Kudunkulum PFBR Kalpakkam NLC TS - II Expansion NLC - Tuticorin Total FY 2013-14 Commissio Petition n 4164 3952 1074 2937 3450 1749 3567 638 1986 1278 599 4676 2426 0 1449 257 30250 988 3469 3188 1470 3361 1556 1568 1176 0 4955 1663 0 89 518 27954 FY 2014-15 Petition 4164 1074 2937 3450 1749 3567 678 1986 1278 638 6704 4316 0 1546 1219 35307 Commission 3952 988 3469 3188 1470 3361 1556 1568 1176 0 7092 4376 494 1752 2643 37086 FY 2015-16 Commissio Petition n 4164 3963 1074 1469 3450 1749 3567 678 1986 1278 678 7141 5544 0 1642 1300 35721 991 3478 3196 1474 3370 1560 1573 1179 0 7112 4388 792 2220 2651 37948
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Independent Power Producers 4.50 TANGEDCO in its Petition has included power purchase quantum only from STCMS, ABAN power and Penna and stated that they do not intend to procure power from the rest of the IPPs as they will remain un-despatched under the merit order principle. TANGEDCO did not provide any basis for projection of quantum from IPPs in its Petition. In its response to data gaps TANGEDCO has submitted the PLFs (corresponding to net generation) considered for projection of energy availability. However, TANGEDCO again failed to provide any valid explanation for the consideration of those PLFs. In the absence of valid explanation, Commission has projected the energy availability based on actual numbers for FY 2007-08 to FY 2011-12. The Commission arrived at the energy availability after considering the average energy available from these IPPs in the past five financial years
4.51
4.52
Table 176: Actual energy available from IPPs - Historical data (MUs) IPPs GMR Samalpatti PPN Madurai ST-CMS ABAN Penna Sub Total 2007-08 1,132 517 2,120 511 1,689 852 358 7,179 2008-09 1,362 691 2,147 663 1,638 806 338 7,645 2009-10 1,145 481 2,260 467 1,655 677 339 7,024 2010-11 875 378 2,496 353 1,653 820 370 6,945 2011-12 858 292 1,491 282 1,688 760 360 5,731 Average 1,074 472 2,103 455 1,665 783 353 6,905
4.53
In response to data gaps, TANGEDCO has replied that PPA with M/s GMR is upto 15th February 2014 and for M/s SPC it is upto 22nd February 2016. Hence, Commission has considered the energy availability from these plants only upto the dates till PPA exists. The summary of net energy availability approved by the Commission and filed by TANGEDCO in the Petition is tabulated below.
4.54
Table 177: Summary of energy availability approved by the Commission (MUs) IPPs Petition GMR Samalpatti PPN Madurai ST-CMS ABAN Penna 0 0 0 0 1819 375 759 FY 2013-14 Commission 945 472 2103 455 1665 783 353 Petition 0 0 0 0 1844 375 810 FY 2014-15 Commission 0 472 2103 455 1665 783 353 Petition 0 0 0 0 1869 375 810 FY 2015-16 Commission 0 433 2103 455 1665 783 353
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Total
2953
6775
3029
5830
3054
5791
4.55
Though Commission has estimated the energy availability from IPPs, the energy despatch from these IPPs will be arrived based on merit order dispatch principle.
Captive/ Cogeneration and Non-Conventional energy sources 4.56 TANGEDCO has submitted that it has entered into agreements with some of the private energy generators owning captive generating sources and cogeneration sources, which pump their surplus power into the Grid. TANGEDCO further submitted that the power purchase quantum has been estimated on the basis of quantity of power likely to be made available for sale based on prevailing trends. The Power Purchase Quantum projected from various sources from FY 2013-14 to FY 2015-16 is tabulated below:
Table 178: Energy availability from Captive and Non conventional energy sources As submitted by TANGEDCO (MUs) Source Captive Wind Biomass Cogeneration New - Cogeneration Plants Solar Total 2013-14 719 5320 799 2562 0 208 9,608 2014-15 755 5586 839 3049 0 768 10,997 2015-16 793 5866 881 3126 0 769 11,434
4.57
For energy availability from biomass plants, Commission has observed a significant increase in energy availability in FY 2012-13 compared to FY 2011-12. However in reply to data gaps TANGEDCO has revised the energy availability from biomass plants to 11 MUs in FY 2012-13 In response to data-gaps, TANGEDCO has provided the actual energy purchased from wind, solar, captive and cogeneration in FY 2012-13. Hence for renewable energy plants and CPP, Commission has approved the energy availability equivalent to actual procured in FY 2012-13. For new cogeneration plants, TANGEDCO has provided the date of CoD as a response to data gaps. The CoD submitted by TANGEDCO is tabulated below. Commission has estimated the energy availability from these plants considering the CoD submitted by TANGEDCO and assuming a PLF of 55% and auxiliary consumption of 9% in accordance to TNERC tariff order for cogeneration plants.
4.58
4.59
Table 179: CoD of Cogeneration plants submitted by TANGEDCO Capacity 45 MW (3 projects of 15 MW ) 51 MW (2 projects of 18 MW and 1 project of 15 MW) CoD June 2013 July 2013
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Capacity 42 MW (3 projects of 15 MW and 1 project of 12 MW 45 MW (3 projects of 15 MW)
CoD August 2013 September 2013
4.60
The summary of energy availability estimated by the Commission and filed by TANGEDCO for captive and non conventional sources is given below.
Table 180: Summary of energy availability approved by the Commission from captive and renewable energy sources (MUs) Renewable Energy Sources Captive Wind Biomass Cogeneration New - Cogeneration Plants Solar Total FY 2013-14 Petition Commission 719 595 5320 7145 799 11 2562 1428 0 208 9608 502 16 9697 FY 2014-15 Petition Commission 755 595 5586 7145 839 11 3049 1428 0 768 10997 802 16 9997 FY 2015-16 Petition Commission 793 595 5866 7145 881 11 3126 1428 0 769 11434 805 16 10000
From Other Sources 4.61 TANGEDCO in its Petition has proposed purchase of power from trading and NTPC NVVN for the second control period. However, TANGEDCO has not provided any basis for its projection from traders-bilateral in its Petition. For NTPC-NVVN TANGEDCO has projected the energy availability based on actual energy purchase during FY 2011-12. In response to data gaps, TANGEDCO has provided the information on case-1 bidding from which the power is likely to be available. The details of case-1 bidding submitted by TANGEDCO are tabulated below. The Commission has considered the availability from these sources as per the MTOA granted by PGCIL.
Supplier/ Source M/s NETS through Lanco Anpara Power Ltd, U.P M/s Jindal through OP Jindal Super Thermal Power Station, Chattisgarh M/s Adani through Mundra Power Plant, Gujarat Offered Capacity-(MW) 100 Current Status PGCIL has granted MTOA for the period from 16.06.2013 to 31.05.2016 PGCIL has granted MTOA for the period from 16.06.2013 to 30.11.2015 PGCIL has granted MTOA for the period from 16.06.2013 to 31.12.2015
4.62
200
200
Page 206 June 2013
4.63
In reply to data gaps, Commission requested TANGEDCO to provide the break-up of trading sources proposed by it. However, TANGEDCO has failed to provide a further detailed break-up of the sources from which this power quantum was being procured. In the absence of this information Commission disallows the power purchase proposed by TANGEDCO under traders-bilateral. In response to information sought by the Commission TANGEDCO has provided the actual power purchase during FY 2012-13. Hence, for NTPC NVVN (bundled solar power) Commission approves the energy availability for second control period equivalent to power procured in FY 2012-13. The summary of the power purchase quantum from other sources filed by TANGEDCO and approved by the Commission is tabulated below.
4.64
4.65
Table 181: Summary of power purchase quantum approved from other sources (MUs) FY 2013-14 Other Sources Trading - Bilateral & Exchange Case 1 - Bidding NTPC NVVN * Total Petition 1413 0 694 2107 Commission 0 3468 35 3503 Petition 804 0 694 1498 FY 2014-15 Commission 0 4380 35 4415 Petition 933 0 694 1627 FY 2015-16 Commission 0 3370 35 3405
*Power shown under NTPC-NVVN is bundled solar power. TANGEDCO has projected it considering actual of FY 2011-12 which also include trading power. Commission while approving has corrected this error considering actual bundled power procured in FY 201213. 4.66 Based upon the above discussion in respect of individual sources, the total energy available from all sources during the second control period (FY 2013-14 to FY 201516) as submitted in the Petition and as approved in the Order is tabulated below:
Table 182: Summary of energy availability approved by the Commission for the second control period (FY 2013-14 to FY 2015-16) (MUs) Source Own Generating Stations Coal Based Power Plants Ennore Thermal Power Station Tuticorin Thermal Power Station Mettur Thermal Power Station North Chennai Thermal Power Station Sub Total Gas Based Power Plants Tirumokottai Kovilkalappal Gas Power Plant Kuttalum Gas Power Plant 2013-14 Petition Commission 2014-15 Petition Commission 2015-16 Petition Commission
987 6963 5990 4502 18442 669 614
652 7154 5992 4494 18292 711 665
959 7096 5990 4639 18684 694 614
652 7154 5992 4494 18292 711 665
920 7200 5990 4640 18749 697 593
653 7173 6009 4507 18342 713 667
Page 207 June 2013
Source Valathur Gas Power Plant Basin Bridge Gas Power Plant Sub Total Hydro Generation Circles Erode Hydro Generation Circle Kundah Hydro Generation Circle Tirunelveli Hydro Generation Circle Kadamparai Hydro generation circle Wind Mills Sub Total - Existing Stations New Stations North Chennai TPS Stage - II Mettur Stage - III Ennore Expansion Sub Total Total - Own Generating Stations Central Generation Stations NTPC SR (I&II) NTPC SR III NLC TS - I NLC TS - II NLC TS Expansion I NTPC Talcher NTPC Simhadri MAPS KAIGA NTPC Dadri NTPC Vallur Kudunkulum PFBR Kalpakam NLC TS - II Expansion NLC - Tuticorin Sub Total IPPs GMR Samalpatti PPN Madurai ST-CMS ABAN Penna Sub Total Renewable Energy Sources and
2013-14 Petition 1211 59 2554 Commission 1232 59 2668 1173 59 2541
2014-15 Petition Commission 1232 59 2668 1191 59 2540
2015-16 Petition Commission 1235 59 2675
5768
4844
5801
4844
6353
4844
0 26764 6387 3587 9974 36738 4164 1074 2937 3450 1749 3567 638 1986 1278 599 4676 2426 0 1449 257 30250 0 0 0 0 1819 375 759 2953
12 25816 5429 2878 8306 34122 3952 988 3469 3188 1470 3361 1556 1568 1176 0 4955 1663 0 89 518 27954 945 472 2103 455 1665 783 353 6775
0 27026 7774 3990 11764 38790 4164 1074 2937 3450 1749 3567 678 1986 1278 638 6704 4316 0 1546 1219 35307 0 0 0 0 1844 375 810 3029
12 25816 8176 4088 12264 38079 3952 988 3469 3188 1470 3361 1556 1568 1176 0 7092 4376 494 1752 2643 37086 0 472 2103 455 1665 783 353 5830
0 27643 8275 4240 1058 13573 41216 4164 1074 1469 3450 1749 3567 678 1986 1278 678 7141 5544 0 1642 1300 35721 0 0 0 0 1869 375 810 3054
12 25873 8198 4099 1049 13347 39219 3963 991 3478 3196 1474 3370 1560 1573 1179 0 7112 4388 792 2220 2650.72 37948 0 433 2103 455 1665 783 353 5791
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Source CPP Captive Wind Biomass Cogeneration New - Cogeneration Plants Solar Sub Total Other Sources Trading - Bilateral & Exchange Case 1 - Bidding UI NTPC NVVN Sub Total Total - Other Power Purchase Grand Total
2013-14 Petition 719 5320 799 2562 0 208 9608 1413 0 0 694 2107 44917 81656 Commission 595 7145 11 1428 502 16 9697 0 3468 0 35 3503 47930 82051
Renewable Purchase Obligation 4.67 The Commission in first Amendment in Renewable Energy Purchase Obligation Regulations, 2010 has fixed the RPO of 9% for all sources of Renewable Energy put together and 0.05% for Solar separately. As regards target of RPO for future years, Tamil Nadu Electricity Regulatory Commission (Renewable Energy Purchase Obligation) Regulations, 2010 states as under: 2.If the RPO for any of the year is not specified by the Commission, the RPO specified for the previous year shall be continued beyond the period till any revision is effected by the Commission in this regard. 4.69 From FY 2012-13, the Commission has not prescribed any RPO Target. Therefore, the Commission has considered same RPO Obligations of 9% as fixed in its Renewable Energy Purchase Obligation Regulations, 2010 for second control period from FY 2013-14 to FY 2015-16 Accordingly, the Commission has calculated the quantum to be purchased through RPO. The Commission has applied the above mentioned percentages of RPO from FY 2013-14 to FY 2015-16 on the energy required determined for respective years in this Order.
4.68
4.70
Table 183: Renewable energy purchase requirement from FY 2013-14 to FY 2015-16 (MUs) Particulars Energy Requirement (TN Periphery) FY 2013-14 67515 FY 2014-15 73919 FY 2015-16 77374
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Particulars RPO% from all sources RPO% from solar Required purchase from renewable energy sources (MU) Required purchase from solar energy sources (MU)
FY 2013-14 9.00% 0.05% 6076.37 33.76
FY 2014-15 9.00% 0.05% 6652.70 36.96
FY 2015-16 9.00% 0.05% 6963.67 38.69
Energy Balance and Distribution Loss

4.71 Commission in its first order on Multi Year Tariff determination dated 31st July 2010 has approved transmission and distribution losses together and has set a loss reduction strategy for reduction of T&D losses. Also, Commission has initiated the suo-motto proceedings against TANGEDCO for non compliance in the matter of T&D loss determination as directed by it and the Honble APTEL. The Commission has in the absence of scientific data for loss determination, fixed the T&D loss level at 16.4% for FY 2013-14 and has clarified that it shall assume loss percentage at 16% and 15.6% for FY 2014-15 and FY 201516 respectively, if the necessary data is not furnished by TANGEDCO. The relevant extracts of that order are given below: The Commission in its Order No.1 of 2012 dated 30-3-2012, had adopted the T&D loss of 17.6% for 2010-11 and 17.2% for 2011-12. Commission adopted T&D loss of 16.80% for 2012-13. By the same analogy, T&D loss of 16.40% is approved for 201314. As and when the TANGEDCO comes out with the scientific study on T&D loss as specified in the Regulations, the Commission may review and refix the T&D loss norms subject to prudent check. If no study report is submitted for consideration of the Commission, T&D loss for FY 2014-15 shall be reckoned as 16% and for FY 2015-16 shall be reckoned as 15.6%. Out of the above T&D loss limit, the distribution loss shall be arrived at after deducting the transmission loss as approved by the Commission in the respective tariff order. 4.73 Considering the Commissions order on T&D losses, the Commission approves the T&D loss trajectory as tabulated below. Based on the approved distribution losses, Commission has further estimated the 33 kV, 22 kV, 11 kV and LT losses
4.72
Table 184: T&D Loss trajectory set by the Commission for the second control period Particulars T&D Loss level in % Transmission Loss % Distribution Loss% 33 kV Losses 22 kV Losses 11 kV Losses LT Losses 2013-14 16.40% 2.70% 13.70% 0.66% 2.76% 2.87% 10.20% 2014-15 16.00% 2.70% 13.30% 0.64% 2.68% 2.78% 9.90% 2015-16 15.60% 2.70% 12.90% 0.62% 2.60% 2.70% 9.60%
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4.74
Hence Commission has arrived at the energy requirement for TANGEDCO considering the approved sales and losses as per Suo-Motto order on distribution losses dated 4th June 2013. In addition, from this order Commission is treating the distribution loss and transmission loss separately. For arriving at the sales below 33 kV, at 110 kV and at 230 kV, Commission has relied on the percentages arrived based on the data provided by TANGEDCO. The energy balance in distribution periphery and energy required by TANGEDCO for the second control period are tabulated below. The energy balance shown is considering total energy wheeled in the distribution system while energy requirement has been arrived considering approved sales and losses.
4.75
Table 185: Energy Balance in distribution periphery Parameter Sale to Consumers below 33 kV (MU) Additional Power to Kadamparai (MU) Wheeled Units below 33 kV Distribution Loss (%) Distribution Loss (MU) Energy Input at Distribution periphery (MU) FY 2013-14 53412 32 8610 13.70% 9851 71905 FY 2014-15 58736 32 8692 13.30% 10349 77809 FY 2015-16 61751 32 9184 12.90% 10511 81477
Table 186: Energy required by TANGEDCO at TN Periphery during the control period Parameter Sale to Consumers below 33 kV (MU) Additional Power to Kadamparai (MU) Distribution Loss (%) Distribution Loss (MU) Energy Input at Distribution periphery (MU) 110 kV Sales (MU) 110 kV Losses (%) 110 kV Losses (MU) Energy Input at 110 kV 230 kV Sales (MU) 230 kV Losses (%) 230 kV Losses (MU) Energy input at TN Periphery (MU) FY 2013-14 53412 32 13.70% 8484 61928 3067 1.90% 1259 66254 721 0.80% 540 67515 FY 2014-15 58736 32 13.30% 9015 67783 3373 1.90% 1378 72535 793 0.80% 591 73919 FY 2015-16 61751 32 12.90% 9150 70933 3546 1.90% 1443 75921 834 0.80% 619 77374
4.76
Commission reiterates its direction given to TANGEDCO in order on Suo-Motto Petition on T&D losses. a) TANGEDCO shall conduct a third party scientific study to arrive at the reasonable consumption of unmetered services and thereby the technical losses of their network in the following manner. i. DT metering with AMR facility shall be provided atleast in one feeder
Page 211 June 2013
feeding agricultural services predominantly in each circle of the TANGEDCO. Similar metering shall be installed/made available at the Sub-Station end of the 11KV / 22KV feeders. ii. Similar arrangements may be made to measure the consumption of Hut Services. To calculate the LT line loss, similar DT metering and feeder metering shall be done atleast in one feeder which has considerable LT network with 100% consumer metering. The online measurement taken for a period of one year shall be used to arrive at the voltage wise T&D losses for the respective FY. Such data shall be submitted once in every 2 months to the Commission starting from October 2013.
iii.
iv.
Fixed Expenses
4.77 In this section expenses related to fixed cost for the second control period (FY 201314 and FY 2015-16) will be approved by the Commission.
Operation and Maintenance Expenses 4.78 During the true-up and performance review of expenses for first control period it was observed that the O&M expenses for TANGEDCO have increased while those of TANTRANSCO have decreased. TANGEDCO has clarified that one of the reasons for this variation is due to segregation of accounts. However TN Power utilities have clarified in their current MYT Petition that they have submitted the actual expenses based on their audited accounts. Also, TANGEDCO in its Petition has submitted that it was unbundled from the erstwhile TNEB only on 1st November 2010 and it is difficult for it to derive the O&M expenses pertaining to transmission activities for the last 5 years. Hence, it has projected the expenses from FY 2012-13 based on the expenses for the FY 2010-11 and FY 2011-12 It is pertinent to mention that in the process of the approval of the expenses the Commission is guided by following regulations Regulation-25 of TNERC Tariff Regulations, 2005 : 25. Operation and Maintenance Expenses 4. The operation and maintenance expenses shall be derived on the basis of actual operation and maintenance expenses for the past five years previous to current year based on the audited Annual Accounts excluding abnormal operation and maintenance expenses, if any, after prudence check by the
4.79
4.80
Page 212 June 2013
Commission. The Commission may, if considered necessary engage Consultant / Auditors in the process of prudence check for correctness. 5. The average of such normative operation and maintenance expenses after prudence check shall be escalated at the rate of 4% per annum to arrive at operation and maintenance expenses for current year i.e. base year and ensuing year. 6. The base operation and maintenance expenses so determined shall be escalated further at the rate of 4% per annum to arrive at permissible operation and maintenance expenses for the relevant years of tariff period. 4.81 However as submitted by TANGEDCO, Commission is of the view that it is not appropriate to project the expenses for the next control period based on the actual expenses incurred prior to unbundling of power utilities. Hence in this order Commission projects the O&M expenses for next control period based on the audited accounts for FY 2010-11 and provisional accounts for FY 2011-12. In following paras each component of O&M expenses will be discussed in detail and Commissions approval for the same will be accorded. Employee Expenses 4.83 TANGEDCO has projected the employee expenses for the second control period based on following assumptions and taking the employee expenses based on provisional accounts for FY 2011-12 as base i. Basic salary and the grade pay have been considered with an escalation of 5% for FY 2013-14 to FY 2014-15 and 10% for FY 2012-13 and FY 2015-16 due to wage revision. Escalation of DA rate at 15% per annum. Other expenses such as terminal benefits, pension schemes etc at 10%.
4.82
ii. iii. 4.84
Commission has arrived at the employee expenses for FY 2012-13 during the performance review exercise considering provisional accounts of FY 2011-12 as base. For projecting the employee expenses for the second control period, Commission has considered the employee expenses approved for FY 2012-13 as base. Though TANGEDCO has proposed escalations of more than 4% for various components of employee expenses, Commission in accordance with its Regulation has escalated the approved employee expenses for FY 2013-14 at 4% on all components except for DA for arriving at the employee expenses for second control period.
4.85
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4.86
However, as submitted by TANGEDCO if due to expected pay revision the employee expenses increase significantly during FY 2015-16, TANGEDCO is required to quantify the impact due to pay revision and submit to the Commission during the trueup exercise for FY 2015-16. Commission is of the view that the escalation of DA rate of 15% proposed by TANGEDCO is in line with recent increases of DA rate and hence considers the TANGEDCO submission of 15% for projecting the employee expenses for the second control period.
4.87
Table 187: DA rates used for projecting the employee expenses Parameter Average DA rates FY 2013 72.25% FY 2014 83.09% FY 2015 95.55% FY 2016 109.88%
4.88
The employee expense capitalization for second control period for generating stations have been arrived based on the percentage employee expenses capitalized in FY 2010-11 and FY 2011-12. However, for distribution business the employee capitalization as per audited accounts comes to 5%, which is on a lower side compared to historic trend. Also, TANGEDCO has proposed a higher capitalization rate of 12%-14% during second control period. In view of these discrepancies, Commission has relied on average employee capitalization of 9% based on historical data. Based on the above approach and methodology, the employee costs submitted by TANGEDCO and approved by the Commission is tabulated below:
4.89
Table 188: Employee expenses approved for generation business during second control period (Rs. Cr) 2013-14 Petition Commission 79.05 71.91 104.82 100.10 93.40 89.25 66.20 64.83 343.47 326.09 5.01 4.74 3.95 2.53 4.46 4.25 7.38 7.15 20.81 28.51 18.96 31.00 24.80 103.27 467.55 18.68 31.65 18.29 29.26 23.74 102.95 447.72 2014-15 Petition Commission 88.16 78.78 116.88 110.06 104.18 98.16 74.54 71.06 383.75 358.06 5.59 5.22 4.41 2.79 4.96 4.67 8.18 7.83 23.14 31.38 21.01 34.47 27.56 114.42 521.31 20.51 34.90 20.02 32.04 25.98 112.94 491.50 2015-16 Petition Commission 102.54 86.70 136.28 121.58 121.56 108.48 88.09 78.26 448.47 395.02 6.53 5.78 5.14 3.08 5.54 5.14 9.45 8.62 26.65 36.10 24.25 39.96 31.93 132.24 607.35 22.62 38.67 22.00 35.25 28.56 124.48 542.11
Plant Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Total Coal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP Total Hydro Total Generation
Page 214 June 2013
Table 189: Employee expenses approved for distribution business during second control period (Rs. Cr)
Parameter Salary Overtime wages Dearness Allowance Other Allowances Bonus & Exgratia Terminal benefits Other Expenses Gross Employee Costs Less: Capitalisation Net Employee Expenses
FY 2013-14 Petition Commission 1,251.67 1,172.13 33.20 12.07 922.17 973.89 107.22 107.22 59.20 59.20 1,900.56 1,470.93 195.76 180.28 4,469.79 632.77 3,837.02 3,975.73 365.78 3,609.95
FY 2014-15 Petition Commission 1,314.26 1,219.02 34.53 12.55 1,113.52 1,164.78 111.51 111.51 61.57 61.57 2,090.61 1,529.77 212.35 187.49 4,938.35 658.08 4,280.26 4,286.69 394.39 3,892.30
FY 2015-16 Petition Commission 1,445.68 1,267.78 35.91 13.05 1,408.60 1,393.07 115.97 115.97 64.04 64.04 2,299.67 1,590.96 230.47 194.99 5,600.34 684.41 4,915.94 4,639.86 426.28 4,212.98
Repair and Maintenance Expenses 4.90 Similar to projection of employee expenses, R&M expenses are projected based on actual expenses for FY 2010-11 and FY 2011-12. The five months R&M expenses as per audited accounts are increased pro-rata basis to arrive at annual expenses which are later escalated at 4% based on TNERC regulation to arrive at expenses equivalent to FY 2011-12. The average of this escalated R&M expense and actual R&M expense for FY 2011-12 is used as base and again escalated at 4% year on year to arrive at R&M expenses for FY 2013-14. However, this approach was not adopted for TTPS, KGTPS and VGTPS. It was observed that R&M expenses for TTPS are significantly higher and for KGTPS are significantly lower than the historical R&M expenses and therefore for these stations the R&M expenses for FY 2013-14 are arrived by escalating the Commission approved R&M expenses for FY 2012-13 by 4%. For VGTPS the R&M expenses for FY 2010-11 are significantly high and hence the R&M expenses for FY 2013-14 are arrived by escalating the actual R&M expenses for FY 2011-12 by 4% year on year. The R&M expenses for FY 2013-14 of distribution business are also arrived by considering similar methodology adopted for most of the generating stations. The average expense of FY 2010-11 and FY 2011-12 is escalated by 4% year on year for arriving at the R&M expenses for FY 2013-14. For remaining years of the control period the R&M expenses are arrived by escalating the R&M expenses for FY 2013-14 by 4% in accordance to Commissions regulation. Based on the above approach, the R&M expenses approved by the Commission and submitted by TANGEDCO is tabulated below:
4.91
4.92
4.93
4.94
4.95
Page 215 June 2013
Table 190: R&M expenses approved by the Commission for TANGEDCO during the second control period (Rs. Cr) 2013-14 Plant Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Total Coal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP Total Hydro Total Generation Distribution TANGEDCO Petition 44.17 106.17 23.82 66.85 241.01 5.67 3.86 1.28 1.44 12.25 1.15 1.63 1.39 1.70 5.86 259.11 69.26 328.37 Commission 41.44 40.26 29.21 60.91 171.83 4.50 3.86 1.89 1.44 11.68 1.08 1.74 1.76 1.40 5.98 189.50 67.82 257.32 Petition 45.93 110.42 24.78 69.52 250.65 5.90 4.01 1.33 1.49 12.74 1.19 1.70 1.44 1.76 6.10 269.48 72.03 341.51 2014-15 Commission 43.10 41.88 30.38 63.35 178.71 4.68 4.01 1.96 1.49 12.15 1.12 1.81 1.83 1.46 6.22 197.07 70.54 267.51 Petition 47.77 114.83 25.77 72.30 260.67 6.13 4.17 1.39 1.55 13.25 1.24 1.77 1.50 1.83 6.34 280.26 74.91 355.17 2015-16 Commission 44.83 43.55 31.60 65.88 185.86 4.87 4.17 2.04 1.55 12.64 1.17 1.88 1.90 1.52 6.47 204.96 73.36 278.32
Administrative and General Expenses 4.96 On preliminary scrutiny, Commission has found self insurance charges pertaining to generating stations have been accounted under distribution business formats. Hence, Commission has re-estimated the A&G expenses for FY 2010-11 and FY 2011-12 for generating stations and distribution business after correctly accounting the self insurance expenses. Similar to projection of R&M, A&G expenses are projected based on re-estimated actual expenses for FY 2010-11 and FY 2011-12. The five months A&G expenses as per audited accounts are increased pro-rata basis to arrive at the annual expenses which are later escalated at 4% based on TNERC regulation to arrive at expenses equivalent to FY 2011-12. The average of this escalated A&G expense and actual A&G expense for FY 2011-12 is used as base and again escalated at 4% year on year to arrive at A&G expenses for FY 2013-14. The A&G expenses for FY 2013-14 of distribution business are also arrived by considering similar methodology adopted for most of the generating stations. The average expense of FY 2010-11 and FY 2011-12 is escalated by 4% year on year for arriving at the A&G expenses for FY 2013-14.
Page 216 June 2013
4.97
4.98
4.99
For remaining years of the control period the A&G expenses are arrived by escalating the A&G expenses for FY 2013-14 by 4% in accordance to Commissions regulation.
4.100 Based on the above approach, the A&G expenses submitted by TANGEDCO and approved by the Commission is tabulated below:
Table 191: A&G expenses approved for TANGEDCO for second control period (Rs. Cr) Plant Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Total Coal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP Total Hydro Total Generation Distribution TANGEDCO Petition 7.26 12.54 8.48 5.46 33.74 1.06 0.54 1.15 0.87 3.62 2.85 5.83 10.97 3.78 23.43 60.79 194.03 254.82 2013-14 Commission 9.15 15.93 12.91 10.41 48.39 2.50 1.72 1.81 4.01 10.05 5.51 8.01 15.84 5.14 34.51 92.95 101.03 193.98 Petition 7.72 13.32 8.93 5.89 35.86 1.15 0.59 1.25 0.94 3.93 3.01 6.10 11.44 4.12 24.67 64.46 229.40 293.86 2014-15 Commission 9.52 16.56 13.42 10.82 50.33 2.60 1.79 1.88 4.17 10.45 5.74 8.33 16.47 5.35 35.89 96.67 105.08 201.75 Petition 8.22 14.17 9.41 6.36 38.16 1.25 0.63 1.35 1.00 4.23 3.17 6.38 11.94 4.50 25.99 68.38 285.27 353.65 2015-16 Commission 9.90 17.23 13.96 11.26 52.34 2.71 1.86 1.96 4.34 10.87 5.96 8.66 17.13 5.56 37.32 100.53 109.28 209.81
4.101 Based on the above approved employee expenses, A&G expenses and R&M expenses, the O&M expenses approved by the Commission for the second control period is given below.
Table 192: O&M Expenses approved by the Commission for second control period (Rs. Cr) 2013-14 Plant Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Total Coal Tirumakottai GTPS Kuttalam GTPS Basin Bridge Petition 130.48 223.53 125.70 138.51 618.22 11.74 8.35 6.89 Commission 122.50 156.29 131.37 136.15 546.31 11.74 8.11 7.95 2014-15 Petition 141.81 240.62 137.89 149.95 670.26 12.64 9.01 7.54 Commission 131.40 168.50 141.96 145.23 587.10 12.50 8.59 8.51 2015-16 Petition 158.53 265.28 156.74 166.75 747.30 13.91 9.94 8.28 Commission 141.43 182.36 154.04 155.40 633.22 13.36 9.11 9.14
Page 217 June 2013
2013-14 Plant GTPS Valuthur GTPS Total Gas Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP Total Hydro Total Generation Distribution TANGEDCO Petition 9.69 36.68 32.51 26.42 43.36 30.28 132.56 787.46 4100.31 4887.76 Commission 12.60 40.41 38.24 28.04 46.86 30.28 143.44 730.16 3778.80 4508.97
2014-15 Petition 10.61 39.81 35.58 28.81 47.35 33.44 145.19 855.26 4581.69 5436.94 Commission 13.49 43.11 41.76 30.16 50.34 32.79 155.05 785.26 4067.92 4853.06
2015-16 Petition 12.00 44.13 40.51 32.40 53.40 38.26 164.57 956.00 5276.12 6232.11 Commission 14.51 46.13 45.80 32.54 54.28 35.64 168.27 847.62 4395.62 5243.22
Operation and Maintenance expenses for new generating stations 4.102 The TNERC tariff regulations sets the following guidelines for determination of O&M expenses of the new generating stations: 25. Operation and Maintenance Expenses In case of the thermal power generating stations declared under commercial operation on or after the notification of these Regulations, the base operation and maintenance expenses shall be fixed at 1.0% of the actual capital cost (as admitted by the Commission), in the year of commissioning and shall be subject to an annual escalation of 4% per annum for the subsequent years. 4.103 The capital costs of the new power plants filed by TANGEDCO as per MYT Petition are tabulated below. TANGEDCO has stated that these projects were awarded on firm price contract and hence no variation in cost is anticipated. The Commission has provisionally accepted the submission of TANGEDCO for the purpose of estimation of O&M expenses.
Table 193: O&M expenses for new thermal stations approved by the Commission (Rs. Cr) Capital cost as filed in the Petition (including IDC) Rs. Crore 3550 5814 4012 O&M expenses at 1% of capital cost Rs. Crore 35.50 58.14 June 2013 40.12 January 2016 10.03 O&M expenses approved for the financial year of commissioning Rs. Crore 26.63 43.61
Name of the power plant MTPS Stage III NCTPS Stage II Unit 1 NCTPS Stage III Unit 2 Ennore Expansion
Date of Commissioning June 2013 August 2013
Page 218 June 2013
Commission in accordance with its tariff regulations has escalated the O&M expenses approved for the base year by 4% year on year to arrive at the O&M expenses for the second control period. The O&M expenses approved for the second control period for new generating stations is tabulated below.
Table 194: O&M expenses approved by the Commission for new generating stations for the second control period (Rs. Cr) Name of the power plant MTPS Stage III NCTPS Stage II Unit 1 NCTPS Stage III Unit 2 Ennore Expansion FY 2013-14 Petition 88.20 Commission 26.63 FY 2014-15 Petition 92.61 Commission 36.92 FY 2015-16 Petition 97.24 Commission 38.40
168.00
43.61
176.40
60.47
185.22
62.88
23.10
10.03
Capital Expenditure and capitalization 4.104 Regulation 17 (5) of the Tariff Regulations, 2005 and Regulation 3 (v)of the Tariff Regulation under MYT framework specifies that the licensee shall get the capital investment plan approved by the Commission before filing ARR and Application for determination of Tariff. However, TANGEDCO has not complied with this provision. 4.105 TANGEDCO has filed the capital expenditure and capitalization schedule for the second control period along with its MYT Petition. There were many discrepancies in the capital expenditure and capitalization information filed in the Petition. The capital expenditure filed by TANGEDCO was without any cost benefit analysis. In addition, TANGEDCO has also not provided any information of sources of funding, broad details and physical quantum for the proposed capital expenditure. 4.106 The observations and issues pertaining to capital expenditure and capitalization schedule for second control period are same as those discussed in Chapter -A3 under capital expenditure section. 4.107 Commission reiterates the following directions and observations made in Chapter -A3 i. The information submitted pertaining to the capital expenditure and capitalization information submitted by TANGEDCO is not satisfactory The data quality and iteration that went through the capital expenditure and capitalization schedule along with its GFA schedule needed to be substantially improved. Commission directs TANGEDCO to a) Reconcile its accounts with respect to capital expenditure and prepare the scheme wise data as per the formats specified by the Commission.
ii.
iii.
b) File the progress of the capital expenditure and capitalization on quarterly basis. c) Finalize its transfer scheme through GoTN at the earliest and reconcile the GFA, CWIP and capitalization schedules 4.108 In ChapterA3 Commission has expressed its opinion regarding capital expenditure and is provisionally accepting the capital expenditure and capitalization schedule as proposed by TANGEDCO for the second control period. 4.109 The actual capital expenditure for the second control period will be reviewed based on audited accounts and the impact of final transfer scheme, prudence verification based on scheme wise data to be submitted by TANGEDCO will be done during the truingup process. 4.110 As mentioned earlier, Commission observed that there are number of new generating stations for which TANGEDCO had neither sought prior approval of their capital investment plan nor applied for determination of tariff in advance for the new generating stations. 4.111 Regulation 6 (7) (i) (a) of the TNERC Tariff Regulations, 2005 specifies the following: A generation company or a licensee may make an application as per Appendix I to these Regulations, for determination of provisional tariff in advance of the anticipated date of completion of the project, based on the capital expenditure actually incurred upto the date of making of the application or a date prior to making of the application, duly audited and certified by the statutory auditors, and the provisional tariff shall be charged from the date of commercial operation of the respective units of the generation station or the line or substation of the transmission system. 4.112 TANGEDCO is required to file separate Petitions for approval of the tariff for the new generating stations along with accounts for these generating stations duly certified by statutory auditor. On Commissions directive, TANGEDCO has submitted partial information for new thermal stations as per the formats prescribed in TNERC Tariff Regulations. However, the information is not certified by statutory auditor. With respect to new hydro stations TANGEDCO has not provided any information. 4.113 Commission directs the TANGEDCO to file the separate petitions based on TNERC Regulations duly certified by the statutory auditor along with relevant generating station accounts within 90 days of issuance of this Order. 4.114 While reviewing the revised capital expenditure proposed for the second control period it was observed that TANGEDCO has also included the capital expenditure for Udangudi TPS. This power plant is not likely to be commissioned during the control period and hence Commission is not considering the capital expenditure for this power plant in this order. Commission directs TANGEDCO to file a separate Petition as mentioned above for the approval of capital cost and tariff for this power plant.
4.115 The capital expenditure and capitalization provisionally approved in this order is tabulated below.
Table 195: Capital expenditure and capitalization for generating stations (Rs. Crore) Capital Expenditure Plant Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS NCTPS StageII** MTPS Stage-III** Ennore Expansion Total Thermal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP New Hydro Addition Bhavani Barrage* Bhavani Katlai * Periyar * Total Hydro FY 2013-14 9.00 99.44 95.06 54.30 269.46 774.25 1,051.80 2353.31 FY 2014-15 9.90 109.39 104.57 59.73 25.50 12.50 1,658.20 1979.79 FY 2015-16 10.89 120.33 115.03 65.70 28.05 13.75 1,450.00 1803.75 FY 2013-14 57.02 96.61 98.30 49.15 5,814.04 3,550.00 9665.12 Capitalization FY 2014-15 9.54 105.41 100.77 57.56 12.25 6.25 291.78 FY 2015-16 10.49 115.95 110.84 63.31 29.58 14.50 4,511.07 4855.74
5.82 3.84 0.90 5.42 15.98 1.50 1.02 25.82 1.62 22.31 7.50 26.05 85.82
6.40 4.22 0.99 5.97 17.58 1.65 1.12 175.90 1.78 180.45
7.04 4.65 1.09 6.56 19.34 1.82 1.23 315.99 1.96 321
5.60 2.30 1.72 8.80 18.42 0 0.66 1.39 11.60 307.18 837.02 125.88 1283.73
6.17 4.07 0.95 5.75 16.94 50.29 1.08 0.86 18.72 22.34 7.59 26.06 126.94
6.79 4.48 1.05 6.32 18.64 1.75 1.19 0.95 1.89 5.78
Cogen Sugar Mills Under Modernisation Generation
205.44
711.46
385.73
2660.55
2177.82
2144.09
11678.72
821.39
4880.16
*All the new hydro and thermal projects that are getting capitalized in second control period will be reviewed at the time of examination of individual tariff Petitions
Page 221 June 2013
Table 196: Capital expenditure and capitalization approved for distribution business for second control period (Rs. Crore) Capital Schemes 33 KV Lines 33 KV Substations 11 KV Lines and Other LT Lines Other Construction Schemes General Improvement Schemes Capital Expenditure FY 2013-14 FY 2014-15 FY 2015-16 33.28 38.27 45.92 47.88 55.07 66.08 27.94 717.70 32.13 825.35 38.56 990.42 FY 2013-14 26.15 37.62 21.95 563.94 Capitalization FY 2014-15 37.77 54.35 31.71 824.44 FY 2015-16 45.15 64.98 37.91 991.01
355.58
408.91
490.69
279.40
403.58
482.52
Distribution Transformers Failure/Replacement 100 KVA 10.98 250 KVA 18.30 500 KVA 13.80 New/Additional with Structure 100 KVA 11.53 250 KVA 19.22 500 KVA 14.49 Extension of Service connections HT Industry 26.54 LT Industries 14.70 LT Domestic 16.62 LT Commercial 11.82 Other categories 22.20 Deposit Contribution Works 57.70 (DCW) Rural Electrification 49.78 Works Agricultural 49.72 Services Segregation of 2.48 Feeders Hut Electrification 0.99 RAPDRP - PART B Schemes - Erection of new SS, RMU, 916.46 Meters, Sectionalisation, etc RGGVY 1.25 Survey, investigation, computerisation Others if any Total 2.35 6.30 2,449.59
12.63 21.05 15.87
13.89 23.15 17.46
10.98 18.30 13.80
12.63 21.05 15.87
13.89 23.15 17.46
13.26 22.10 16.66 30.53 16.91 19.11 13.59 25.53 64.90 57.24 57.18 2.85 1.14
14.58 24.31 18.33 33.58 18.60 21.02 14.95 28.08 72.50 68.69 68.61 3.42 1.37
11.53 19.22 14.49 26.54 14.70 16.62 11.82 22.20 57.70 39.11 39.07 1.94 0.78
13.26 22.10 16.66 30.53 16.91 19.11 13.59 25.53 64.90 56.49 56.43 2.81 1.12
14.58 24.31 18.33 33.58 18.60 21.02 14.95 28.08 72.50 67.54 67.47 3.36 1.34
752.05
484.67
916.46
752.05
484.67
1.25 2.75 7.25 2,512.30 2.95 7.97 2,569.79 2.35 6.30 2,174.23
2.75 7.25 2,502.88
2.95 7.97 2,557.33
Page 222 June 2013
Depreciation 4.116 In its Petition, TANGEDCO has submitted the opening gross block for each of the generating plant and for distribution function for FY 2010-11 (5 months) in line with the provisional transfer scheme notified by the Government of Tamil Nadu vide notification dated 2nd January 2012. 4.117 Later in response to Commissions query regarding revaluation reserve, TANGEDCO revised the opening GFA based on provisional accounts and without considering the revaluation reserve. 4.118 In another query raised by the Commission regarding the depreciation rates used by TANGEDCO, it has submitted that TANGEDCO has used the weighted average depreciation rate for the particular group of asset arrived based on depreciation rates specified in the Tariff Regulation. Hence, Commission is accepting the depreciation rates as proposed by TANGEDCO. 4.119 TNERC Tariff Regulations 2005 specifies following guidelines for calculation of depreciation: 24. Depreciation For the purpose of tariff, depreciation shall be computed in the following manners: i. The value base for the purpose of depreciation shall be historical cost of the asset. ii. The depreciation shall be calculated at the rates as per the Annexure to these Regulations. iii. The residual value of assets shall be considered as 10% and depreciation shall be allowed upto maximum of 90% of the estimated cost of the Asset. iv. Land is not a depreciable asset and its cost shall be excluded from the capital cost while computing 90% of the historical cost of the asset. v. The historical cost of the asset shall include additional capitalisation. vi. Depreciation shall be chargeable from the first year of operation. In case of operation of the asset for part of the year, depreciation shall be charged on pro-rata basis. vii. After the assets are fully depreciated the benefit of reduced tariff shall be made available to the consumer. 4.120 Commission has calculated depreciation considering the revised opening GFA without revaluation reserve, weighted average depreciation rates and deductions submitted by TANGEDCO, and capitalization approved by the Commission in this order. The GFA considered and depreciation rates considered for estimation of depreciation is tabulated below:
Page 223 June 2013
Table 197: Opening GFA considered for calculation of depreciation (Rs. Crore) As on April 2013 1059.48 1925.06 1147.29 2038.57 As on April 2014 1116.51 2021.67 1245.59 2087.73 5814.04 3550.00 6,170.40 457.79 503.27 551.33 622.73 2,135.12 733.21 366.04 957.72 420.34 2,477.31 206.45 136.41 342.86 11,125.68 10,595.12 21,720.80 15,835.53 463.39 505.57 553.05 631.53 2,153.54 2003.28 366.69 959.11 431.94 3,761.02 206.45 136.41 342.86 711.46 22,804.41 12,769.34 35,573.75 As on April 2015 1126.05 2127.08 1346.35 2145.28 5826.29 3556.25 16,127.30 469.56 509.64 554.01 637.27 2,170.48 2109.56 367.78 959.97 450.65 3,887.96 206.45 136.41 342.86 1097.19 23,625.80 15,272.22 38,898.02
Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS NCTPS Stage-II** MTPS Stage-III** Ennore Expansion Total Thermal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP - (incl. Bhavani Barrage and Bhavani Khattai) Kadamparai HEP Kundah HEP Tirunelveli HEP (incl Periyar) Total Hydro Tirunelveli Udumalpet Total Wind Cogeneration Plants Generation Distribution TANGEDCO
4.121 For new generating stations, TANGEDCO has not considered depreciation during the year of commissioning. However as per TNERC Tariff Regulations 2005 clause 24(vi) depreciation for generating stations shall be chargeable from the first year of operation. In case of operation of the asset for part of the year, depreciation shall be charged on pro-rata basis. Accordingly, Commission has allowed the depreciation for new generating stations on pro-rata based on CoD during the first year of operation.
Page 224 June 2013
4.122 Based on the above approach, Commission approves depreciation for all the generating stations and distribution business except for wind stations and cogeneration plants. In the last tariff order Commission has approved a transfer price of Rs. 2.75 per unit own wind mills while for cogeneration plants in this order Commission is considering the tariff based on its cogeneration tariff order dated 31st July 2012. Hence, in this order Commission is not determining fixed expenses on account of the own wind mills and cogeneration plants.
Table 198: Depreciation approved by the Commission for the second control period (Rs. Crore) FY 2013-14 Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS NCTPS Stage-II MTPS Stage-III Ennore Expansion Total Coal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP - (incl. Bhavani Barrage and Bhavani Khattai) Kadamparai HEP Kundah HEP Tirunelveli HEP (incl Periyar) Total Hydro Total Generation Total Distribution TANGEDCO 333.91 15.90 12.86 19.81 19.11 67.68 35.90 10.53 25.39 14.36 86.18 487.77 327.61 815.38 415.52 16.14 17.63 19.81 21.99 75.57 21.45 10.58 25.19 12.19 69.41 560.50 362.39 922.89 525.23 16.99 13.22 20.04 19.68 69.93 35.92 12.26 25.49 14.99 88.66 683.82 388.22 1072.04 528.57 16.34 17.71 19.87 22.30 76.22 58.62 10.60 25.23 12.53 106.98 711.77 435.26 1147.03 Petition 37.80 64.98 39.66 64.86 126.61 Commission 37.54 66.36 37.37 63.27 124.61 86.37 Petition 37.85 66.99 40.28 66.15 186.92 127.04 Commission 39.56 69.69 40.57 64.79 186.92 127.04 Petition 37.90 69.42 41.03 67.70 187.69 127.49 531.23 17.39 13.49 20.17 20.43 71.48 35.96 14.31 26.10 16.44 92.81 695.52 530.40 1225.92 Commission 39.90 73.33 43.85 66.58 187.69 127.49 36.58 575.42 16.55 17.86 19.91 22.50 76.82 61.73 10.63 25.25 13.07 110.68 762.92 519.14 1282.06 FY 2014-15 FY 2015-16
Note: During true-up/performance review/tariff determination exercise, the NFA of each asset must be verified with respect to audited accounts to confirm whether the asset has depreciated by 90%.
Page 225 June 2013
Interest on long term loans and other financing charges 4.123 In the last tariff order Commission has approved the total interest expenses corresponding to actual long term and short term loans borrowed by TANGEDCO. In the current Petition TANGEDCO has claimed the interest expenses corresponding to only long term loans and separately claimed the interest on working capital as per norms specified by TNERC in its Tariff Regulations 2005. 4.124 The opening balance of loans as on 1st November 2010 for TANGEDCO considered in its Petition is based on the provisional transfer scheme notified as on 2nd January 2012. TANGEDCO in its Petition has submitted that the loan of a financial institution is not linked with any particular generating plant or the CAPEX schemes as erstwhile TNEB used to have a basket of loan which was used to meet the total capital expenditure of erstwhile TNEB. Therefore it is difficult to identify the debt / interest and equity of the generating plant or station wise or distribution function wise. 4.125 Hence TANGEDCO has adopted the following approach for segregation of interest to the generating plant / station and distribution function i. Project specific loans for generation and distribution is initially allotted to each of the respective project and considered as opening loan balance for that particular project. Large quantum of generic loans which cannot be differentiated into project specific loans and interest paid on these loans is bifurcated as per opening gross block of generation and distribution notified as per transfer scheme.
ii.
4.126 In response to Commissions query, TANGEDCO has revised the long term loans and segregated these loans among those borrowed for capital projects, repayment of existing loans and funding the revenue expenditure. The summary of revised submission of TANGEDCO is tabulated below:
Table 199: Revised interest expenses submitted by TANGEDCO in Rs. Crore Particulars Loan Profile Op. Balance Add: Addition for CAPEX Add: Addition for Loan Repayment Add: For Revenue Expenditure Less: Loan Repayment Closing Balance Gross Interest Expenses IDC Net Interest Expenses 2013-14 37,822 4,237 11,631 4,233 12,354 45,569 4806.37 863.85 3942.52 2014-15 45,569 4,105 3,099 3,785 4,267 52,291 5628.38 798.41 4829.97 2015-16 52,291 4,573 3,189 1,908 4,467 57,494 6265.39 934.36 5331.03
Page 226 June 2013
4.127 In its last order Commission has stated that there is a mix up between the capital account and the revenue account. In the revised submission TANGEDCO has again included the borrowings corresponding to revenue account in capital account in its revised submission. Based on the revised submission Commission has made the following observations: i. ii. The average interest rate for FY 2010-11 is higher than the rate at which the long term loans are procured. The loan repayment submitted by TANGEDCO includes the repayment of loans that have been borrowed for revenue expenditure during the control period.
4.128 In ChapterA3, Commission has discussed in detail the approach to be adopted for approving interest on long term loans and finance charges. Commission reiterates its view and treats the capital account and revenue account separately. Commission for the determination of interest expenses on long term loans for the second control period has considered following assumptions: i. ii. Closing loans as on March 2013 as estimated by the Commission for the first control period have been taken as base. The repayment of existing loans as per audited accounts also includes the repayment of loans borrowed for revenue account. Commission is treating the revenue account separately and also allowing the interest expenses on account of regulatory asset approved in its last tariff order. Hence, allowing the borrowings and interest expenses corresponding to the repayment of loans borrowed for funding of revenue account will result in double accounting of the interest expenses allowed for funding the revenue gap. In view of this, Commission is accepting the opening loans as on 1st November 2010 and is assuming a repayment period of 10 years. The repayment period of new loans borrowed during the control period is assumed to be 10 years The borrowings required for loan repayment will be estimated after taking into account the depreciation allowed during the year. Loans required for the capital works will be arrived after considering the approved capital expenditure and available grants and consumer contribution during the control period. Equity required for funding the capital expenditure is assumed to be nil as Commission is not allowing any return on equity. The consumer contribution and grants for FY 2013-14 to FY 2015-16 have been estimated considering the historical trends Interest expenses on account of capital works for wind assets has not been considered as borrowings on account of wind assets cannot be loaded on determination of tariff for other generating stations and distribution business. Commission has already approved generation cost for wind assets based on transfer price mechanism.
Page 227 June 2013
iii. iv. v.
vi. vii. viii.
ix.
x.
xi.
Interest on cogeneration sugar mills is also not considered as the tariff for these generating stations is taken as per Commissions tariff order for procurement of power from cogeneration. Interest rate for FY 2013-14 to FY 2015-16 is assumed to be at 11.98% i.e. the average interest rate for FY 2010-11 and FY 2011-12 arrived after considering revised loan profile. Interest during construction (IDC) is approved based on capital works in progress.
4.129 The details of borrowings and interest expenses approved by the Commission corresponding to capital expenditure and repayment of loans are given below.
Table 200: Borrowings considered for funding capital expenditure (Rs. Cr) Particulars Capital Expenditure Less: Consumer Contribution Less: Grants Loans required for finding capital expenditure 2013-14 5,110.15 497.68 104.94 4,507.53 2014-15 4,690.12 518.67 104.94 4,066.52 2015-16 4,713.88 540.55 104.94 4,068.39
Table 201: Borrowings considered for repayment of loans (Rs. Cr) Particulars Repayment of Existing loans (As on Nov 1, 2010) Repayment of new loans Less: Depreciation Loans required for repayment of loans 2013-14 1,874.72 2543.72 922.90 3,495.54 2014-15 1,874.72 3359.04 1147.03 4,086.74 2015-16 1,874.72 4250.17 1282.06 4,842.83
Table 202: Average interest rate estimated for the control period Parameter Opening Loans (Rs. Cr)* Closing Loans (Rs. Cr)* Average Loans (Rs. Cr) Interest Charged (Rs. Cr) 2010-11 18747 23094 20921 1156 2011-12 23094 33277 28186 3018 Average
13.26% 10.71% 11.98% Average interest rate *Revised loan profile considering first seven months loan transactions in FY 11 Table 203: Interest expenses approved by the Commission for the second control period (Rs. Cr) Particulars Loan Profile Op. Balance Add: Addition for CAPEX Add: Addition for Loan Repayment of loans Less: Loan Repayment Closing Balance Gross Interest Expenses IDC 2013-14 28,461 4,508 3,496 4,418 32,045 3,625 1,060 2014-15 32,045 4,067 4,087 5,234 34,965 4,015 618 2015-16 34,965 4,068 4,843 6,125 37,751 4,357 738
Page 228 June 2013
Particulars Net Interest Expenses Net Interest Expenses - Cogeneration plants Net Interest Expenses approved
2013-14 2,565 43 2,522
2014-15 3,397 108 3,288
2015-16 3,619 131 3,487
4.130 It is pertinent to mention that long term loans of Rs. 15065 Crs have been allocated to TANGEDCO through provisional transfer scheme. The repayment of loans is usually done through depreciation provided. However, due to high opening loans, the depreciation provision as per regulations is not sufficient for meeting the debt obligations of loans allocated through transfer scheme. TANGEDCO is repaying the existing loans by borrowing new loans. Therefore, borrowings required for meeting debt obligations can only be reduced either by additional cash infusion into the business or by finalizing the transfer scheme by reducing opening loans. 4.131 Commission has allocated the opening loans as on November 2010 between generating stations and distribution business based on net fixed assets and CWIP. Later on the addition and repayment of loans allocation has been done based on approach as detailed above to arrive at the opening loans as on April 2013. The interest expenses approved by the Commission based on loan allocation among generating stations and distribution is tabulated below:
Table 204: Approved interest expenses on long term loans for TANGEDCO for second control period (Rs. Cr.) Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS NCTPS Stage-II MTPS Stage-III Ennore Expansion Total Coal Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Total Gas Erode HEP - (incl. Bhavani Barrage and Bhavani Khattai) Kadamparai HEP Kundah HEP Tirunelveli HEP (incl - Periyar) Total Hydro Total Generation Distribution TANGEDCO 2013-14 Petition Commission 11.07 105.10 101.92 132.25 43.23 74.97 190.99 110.09 468.52 340.87 317.60 173.48 1,133.33 936.77 66.21 45.60 49.69 55.73 63.30 16.27 87.51 109.76 266.71 227.36 162.59 29.86 68.50 86.85 347.80 1,747.84 1,663.81 3,411.65 152.03 34.59 123.90 59.42 369.95 1,534.08 988.31 2,522.39 2014-15 Petition Commission 23.48 104.47 118.30 136.21 51.60 82.23 189.23 108.82 362.32 671.27 279.92 373.76 1,024.84 1,476.75 63.87 44.36 48.47 53.99 64.31 14.05 81.81 107.98 258.45 220.38 158.36 35.75 81.99 80.03 356.14 1,639.43 1,773.44 3,412.87 220.59 33.43 121.01 68.86 443.89 2,141.02 1,147.27 3,288.30 2015-16 Petition Commission 19.68 100.91 86.95 140.90 43.95 89.85 142.72 108.19 277.24 651.33 242.02 359.75 215.37 67.02 1,027.93 1,517.95 58.30 43.17 44.53 52.37 60.32 11.79 73.43 106.02 236.58 213.34 144.76 38.14 84.00 71.87 338.77 1,603.28 1,862.00 3,465.28 218.29 32.29 118.10 70.12 438.80 2,170.10 1,317.23 3,487.33
Page 229 June 2013
4.132 TANGEDCO in its Petition has also claimed interest on consumer security deposit at 7% on consumer security deposits and other finance charges assuming an escalation of 5%. 4.133 Commission has approved the interest expenses incurred on consumer security deposits to the extent of working capital requirement determined by the Commission in Table 209 based on the norms specified in the TNERC Tariff Regulation, 2005 for distribution business. The interest rate has been considered at 9% in accordance to its order on interest on consumer security deposit dated 5th February 2013. 4.134 Commission has observed that TANGEDCO has claimed interest on GPF in other finance charges. Commission is not allowing the interest expenses on GPF as it has not considered GPF reserve for funding of capital expenditure. Also, TANGEDCO has escalated the other finance charges by 5% and has not provided adequate basis for this escalation. However, Commission is of the view that other finance charges are mainly due to guarantee charges and fund raising charges. These charges would depend on type and amount of loans being borrowed during the year. Hence, Commission is not accepting the escalation of 5% proposed by the Petitioner and is approving these charges equivalent to those incurred during FY 12. Any increase on account of these charges will be subsequently reviewed during the true-up exercise. 4.135 The interest expenses on consumer security deposits and other finance charges approved by the Commission are tabulated below.
Table 205: Interest on consumer security deposits and and other finance charges approved by the Commission (Rs. Cr) Parameter Interest on consumer security Deposits Guarantee Charges Other Charges (Finance Cost Paid) Total 2013-14 Petition Commission 419.01 43.04 111.92 573.97 449.60 39.04 48.10 536.74 2014-15 Petition Commission 439.96 45.20 117.52 602.68 505.23 39.04 48.10 592.37 2015-16 Petition Commission 461.96 47.46 123.39 632.81 534.31 39.04 48.10 621.45
4.136 The overall interest and other finance charges approved by the Commission for the distribution business during the second control period are given below.
Table 206: Interest and other finance charges approved for distribution business for the second control period (Rs. Cr) Parameter Interest on long term loans Interest on consumer security Deposits Other finance charges Total interest and finance charges 2013-14 Petition 1663.81 419.01 154.96 2,237.78 Commission 988.31 449.60 87.14 1,525.05 2014-15 Petition 1773.44 439.96 162.71 2,376.11 Commission 1147.27 505.23 87.14 1,739.64 2015-16 Petition 1862.00 461.96 170.85 2,494.81 Commission 1317.23 534.31 87.14 1,938.68
Page 230 June 2013
Return on Equity 4.137 TANGEDCO in its Petition has submitted that it has calculated return on equity for the control period at 14% on the average equity base for the corresponding year.
Table 207: Return on equity filed by TANGEDCO for the second control period (Rs. Cr) Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS NCTPS StageII** MTPS StageIII** Ennore Expansion Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur Unit-I Valuthur Unit-II Erode HEP Kadamparai HEP Kundah HEP Tirunelveli HEP Generation Distribution TANGEDCO 2013-14 32.97 59.55 39.44 65.76 122.09 149.37 2014-15 33.03 62.27 40.32 67.69 244.69 149.88 2015-16 33.08 65.39 41.33 69.90 245.73 150.42 67.63
14.74 11.72 17.14 17.66 44.60 12.53 29.97 15.55 633.09 404.66 1,037.75
15.63 12.09 17.34 18.44 44.65 15.27 30.53 17.06 768.90 600.67 1,369.57
16.07 12.42 17.43 19.38 44.70 18.39 31.54 19.27 852.68 965.59 1,818.27
4.138 Commission in Chapter A3 has discussed in detail its stand on not allowing return on equity. In accordance to the stand taken, Commission is not allowing return on equity for TANGEDCO during the control period due to following reasons: i. Based on available sources of funding equity has been diverted towards revenue account right from FY 2003 and hence the addition in equity base as per audited accounts is on account of funding the revenue expenditure but not for creation of capital assets.
Page 231 June 2013
ii.
Loans approved for funding the capital expenditure for generating stations and distribution business during the control period are without considering the equity
Interest on Working Capital 4.139 TANGEDCO has claimed interest on working capital for its generating stations and distribution based on norms specified in the TNERC Tariff Regulations, 2005. 4.140 Commission has not approved the interest on working capital in its last order as it has approved interest expenses corresponding to total loans including short term borrowings. However TANGEDCO in its current Petition has not claimed interest expenses for short term borrowings separately and instead claimed interest on working capital based on approved norms. Commission is of the view that it is appropriate to approve and segregate the loans based on purpose and in line with its Tariff Regulations. Hence, Commission approves the interest expenses based on its Tariff Regulations and relevant guidelines are reproduced below: 26. Working Capital
(2)
Till such a formula is evolved, the norms for Working Capital shall be as below: (a) For Coal based / Lignite fired Generating Stations (i) Cost of coal or lignite for one and half month for pit head generating stations and two months for non pit head generating stations corresponding to the target availability; (ii) Cost of secondary fuel oil for two months corresponding to the target availability; (iii) Operation and Maintenance expenses for one month; (iv) Maintenance spares @ 1% of the historical cost escalated @ 6% per annum from the date of commercial operation; and (v) Receivables equivalent to two months of fixed and variable charges for sale of electricity calculated on .target availability. (b) For Gas Turbine / combined cycle Generating Stations (i) Fuel cost for one month corresponding to the target availability duly taking into account the mode of operation of the Generating Station on gas fuel and liquid fuel; (ii) Liquid fuel stock for half month; (iii) Operation and Maintenance expenses for one month; (iv)Maintenance spares @ 1% of the historical cost escalated @ 6% per annum from the date of commercial operation; and (v) Receivables equivalent to two months of fixed and variable charges for sale of electricity calculated on target availability. (c) For Hydro Power Generating Stations The working Capital shall cover: (i) Operation and Maintenance expenses for one month; (ii) Maintenance spares @ 1% of the historical cost escalated @ 6% per annum from the date of commercial operation; and
Page 232 June 2013
(iii) Receivables equivalent to two months of fixed charges for sale of electricity, calculated on normative capacity index. (e) For Distribution System (i) Operation and Maintenance expenses for one month (ii) Maintenance spares for two months based on annual requirement considered at 1% of the gross fixed cost at the beginning of the year. (iii) Receivable equivalent to sixty day consumption charges. 27. Interest on Working Capital The short term rate of interest on working capital shall be on normative basis and shall be equivalent to the primary lending rate of State Bank of India as on 1st April of the relevant year. 4.141 Commission has estimated the interest on working capital for generating stations considering the variable costs and fixed costs approved in this orders and interest rate of 14.45% as per SBI PLR dated April 1, 2013. 4.142 The interest on working capital approved by the Commission for generating stations during the second control period is tabulated below.
Table 208: Interest on working capital approved by the Commission during the control period (Rs. Crore) Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS NCTPS StageII** MTPS StageIII** Ennore Expansion Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur GTPS Erode HEP (incl. Bhavani Barrage and Bhavani Khattai) Kadamparai HEP Kundah HEP Tirunelveli HEP (incl - Periyar) Total Generation 2013-14 Petition Commission 30.65 21.37 129.57 120.66 101.73 99.70 76.09 136.39 91.63 70.61 93.13 56.55 2014-15 Petition Commission 31.11 21.79 137.53 121.39 107.83 100.45 80.92 171.96 102.25 71.01 112.82 58.62 2015-16 Petition Commission 31.79 22.10 145.74 122.52 113.31 101.53 83.76 186.24 110.65 26.58 9.14 7.54 8.52 19.88 9.33 3.01 6.32 5.00 634.80 7.50 7.45 4.75 12.51 6.78 2.69 6.81 3.41 513.92 9.62 7.80 7.45 20.05 9.33 3.46 6.83 4.97 701.11 7.51 7.43 4.72 12.52 11.40 2.74 6.87 3.76 543.03 9.88 7.85 7.57 21.01 9.18 3.91 7.19 5.13 769.79 71.64 112.56 58.38 10.53 7.55 7.44 4.69 12.55 11.72 2.80 6.94 3.93 556.86
Page 233 June 2013
4.143 For distribution business TANGEDCO has claimed the working capital requirement based on norms approved by the Commission except for maintenance spares. The working capital requirement for maintenance spares has been claimed at 1% of GFA instead of two months of the annual requirement as per regulations. Also, TANGEDCO has not taken into account the consumer security deposits for arriving at the working capital requirement. 4.144 Commission has approved the interest on consumer security deposit to the extent of working capital requirement under interest on loans and hence Commission is of the view that interest on working capital for distribution business can only be allowed on working capital requirement above the consumer security deposits. 4.145 Consumer security deposit is estimated based on historical trend of increase in consumers and average security deposit per consumer. Net working capital requirement is estimated considering the norms. The working capital requirement and available consumer security deposit for the control period is tabulated below.
Table 209: Approved working capital requirement and available consumer security deposits during the second control period (Rs. Cr) Particulars O & M expenses Maintenance Spares Receivables Total Working Capital Available Consumer Security Deposits Net Requirement 5,478.55 2013-14 Petition 341.69 187.73 4,949.13 5,478.55 Commission 314.90 17.66 4,663.04 4,995.60 6,237.27 -1,241.67 8,384.60 381.81 254.85 7,747.94 8,384.60 2014-15 Petition Commission 338.99 21.20 5,253.44 5,613.71 6,625.57 -1,011.86 9,402.71 439.68 367.11 8,595.93 9,402.71 2015-16 Petition Commission 366.30 25.45 5,541.64 5,933.40 7,021.22 -1,087.82
4.146 From the above table it can be observed that available consumer security deposits are more than the working capital requirement. In view of this Commission is not approving any interest on working capital as it has already approved interest on consumer security deposits in interest and finance charges.
Table 210: Interest on working capital approved during the second control period (Rs. Cr) Parameter Distribution FY 2013-14 Petition 808.09 Commission 0.00 FY 2014-15 Petition 1236.73 Commission 0.00 FY 2015-16 Petition 1386.90 Commission 0.00
Page 234 June 2013
Other Debits 4.147 TANGEDCO in its Petition has included the other fuel costs, lubricants and consumable and water costs in other debits for generating stations. In response to Commissions query regarding this discrepancy, TANGEDCO has made the following submissions i. Cost of water, other fuel costs and lubricants and consumables are part of operating expenses of power stations of TANGEDCO and these expenses were not claimed under fuel expenses or repairs and maintenance expenses, and therefore have been included in other debits. TANGEDCO requested the Commission to allow these expenses as they are operating expenses for generation of power.
4.148 Commission is of the view that though TANGEDCO has not included the operating expenses claimed in other debits in its O&M expenses, these expenses cannot be allowed as Commission has already approved the O&M expenses in this order and all the operating expenses must be met through approved O&M expenses 4.149 Hence Commission is not approving the operating expenses claimed in other debits. Commission is allowing other debits during the second control period for the generating stations equivalent to that approved for FY 2012-13 in this order.
Table 211: Other debits approved by the Commission for generating stations (Rs. Cr) Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS NCTPS Stage-II MTPS Stage-III Ennore Expansion Tirumakottai GTPS Kuttalam GTPS Basin Bridge GTPS Valuthur Unit-I Valuthur Unit-II Erode HEP - (incl. Bhavani Barrage and Bhavani Khattai) Kadamparai HEP Kundah HEP Tirunelveli HEP (incl Periyar) Total Generation 2013-14 Petition Commission 12.60 0.20 7.69 0.30 1.70 0.20 26.13 0.40 0.00 0.00 0.51 0.14 0.05 0.00 0.00 0.10 0.00 0.17 3.07 52.16 0.10 0.06 0.10 0.20 2014-15 Petition Commission 13.10 0.20 8.00 0.30 1.77 0.20 27.17 0.40 0.00 0.00 0.00 0.53 0.10 0.15 0.06 0.05 0.10 0.00 0.20 0.00 0.11 0.00 0.17 3.19 54.25 0.12 0.10 0.20 0.10 2.08 2015-16 Petition Commission 13.63 0.20 8.32 0.30 1.84 0.20 28.26 0.40 0.00 0.00 0.00 0.55 0.10 0.15 0.06 0.06 0.10 0.00 0.20 0.00 0.11 0.00 0.18 3.32 56.42 0.12 0.10 0.20 0.10 2.08
0.12 0.10 0.20 0.10 2.08
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4.150 For distribution business TANGEDCO has included DSM under other debits. However TANGEDCO in its Petition has not provided any adequate information pertaining to DSM expenses. 4.151 Regulation 29 of TNERC Tariff Regulations, 2005 states as under: 29. Bad and Doubtful Debt The Commission may consider and allow a provision upto 0.25% of receivables for writing off of bad and doubtful debts. The licensee or Generating Company shall write off the Bad and Doubtful debts as per the procedure laid down by them. 4.152 The Commission observed that provision of writing off bad and doubtful debt as submitted by TANGEDCO is within the permissible limit of 0.25% of receivable from sale of power at existing tariff. Hence, Commission approves the other debits as claimed by TANGEDCO except for DSM.
Table 212: Other Debits approved by the Commission for Distribution Business (Rs. Cr) Parameter Research & Development expenses Bad & Doubtful debts written off (0.25% of receivables) Miscellaneous losses and written off/provided for Demand Side Management Total Less: Capitalization Net expenses 2013-14 Petition Commission 0.07 14.21 5.66 10.00 29.94 0.01 29.93 0.07 14.21 5.66 19.94 0.01 19.93 2014-15 Petition Commission 0.08 19.37 6.23 10.00 35.68 0.01 35.67 0.08 19.37 6.23 25.68 0.01 25.67 2015-16 Petition Commission 0.09 21.49 6.85 10.00 38.43 0.01 38.42 0.09 21.49 6.85 28.43 0.01 28.42
Contribution for Contingency reserves 4.153 TANGEDCO has claimed contingency reserve at 0.25% of GFA in FY 2012-13 in accordance to TNERC MYT Regulations. Regulation 35 of the MYT Regulations 2009, To meet out any contingent liability or unforeseen revenue losses, the Distribution licensees shall maintain a contingency reserve. The Distribution Licensees shall estimate the contingency reserve on the value of Assets for each year of the control period. Regualtion31 of the Tariff Regulations 2005, The Generating Companies and the licensees shall provide and maintain a contingency reserve upto 0.5% of the value of assets at the beginning of the year and the provision made for the year will be allowed in their Revenue Requirement. This reserve will be utilised to meet any contingent liability or unforeseen revenue losses.
4.154 It is pertinent to mention that provision for contingency reserve is appropriate when utility is in revenue surplus and some portion of this surplus revenue can be contributed for contingency reserve. However, in the current petition TANGEDCO has shown a revenue gap of Rs. 10344 Crs in FY 2013-14 at existing tariffs and in this situation it is inapt to allow the expenses on account of contingency reserve. Hence, Commission disallows the contingency reserve as claimed by TANGEDCO.
Table 213: Contribution to contingency reserved approved by the Commission (Rs. Cr) Parameter Contribution to Contingency Reserves 2013-14 Petition Commission Nil 2014-15 Petition Commission Nil 2015-16 Petition Commission Nil
75
89
122
Summary of fixed Cost approved for Distribution business 4.155 Based on above submissions, the summary of fixed cost approved for distribution function during the second control period is tabulated below:
Table 214: Summary of fixed costs approved by the Commission for the second control period (Rs. Cr) Parameter Operation and Maintenance Expenses Depreciation Interest on Long term loan Other Debits & extra ordinary items Prior Period Debit/(Credit) Charges Reasonable Return / Return on Equity Interest on Working Capital Contribution to Contingency Reserves Total TANGEDCO filing FY 2014 4100 328 2238 30 0 405 808 75 7984 FY 2015 4582 388 2376 36 0 601 1237 89 9308 FY 2016 5276 530 2495 38 0 966 1387 122 10814 FY 2014 3779 362 1525 20 0 0 0 0 5686 Commission FY 2015 4068 435 1740 26 0 0 0 0 6268 FY 2016 4396 519 1938 28 0 0 0 0 6882
Expenses on account of Generation

4.156 In this Section, the Commission in accordance with TNERC (Terms and Conditions for determination of Tariff) Regulations, 2005 has analysed the expenses on account of Generation business of TANGEDCO from FY 2013-14 to FY 2015-16 submitted by TANGEDCO 4.157 In respect of components of Tariff for Generating Stations, Regulation-36 of TNERC Tariff Regulations, 2005 states as under: 36. Components of Tariff
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4. The tariff for sale of power by the Generating Companies shall be of two part namely the Fixed Charges (recovery of annual capacity charges) and variable (energy) charges. 5. The Fixed (annual capacity) charges shall consist of the following elements: f) Interest on Loan Capital; g) Depreciation h) Return on Equity; i) Operation and Maintenance expenses; and j) Interest on Working Capital: 6. The energy (variable) charges shall cover fuel cost. 4.158 Commission in accordance with its regulations is approving the capacity charges and variable cost on account of own generating stations and approach for the same is detailed below. Capacity charges for own generating stations 4.159 In above sections, Commission has approved the fixed expenses with respect to generating stations for the first control period. a) O&M expenses Refer to Table 192 and Table 194 b) Depreciation Refer to Table 198 c) Interest on long term loans Refer to Table 204 d) Return on Equity Refer to Point 4.138 e) Interest on Working Capital Refer to Table 208 f) Other Debits Refer to Table 211 4.160 With respect to other income, TANGEDCO has considered an escalation of 5% based on its provisional accounts for FY 2011-12. Due to the fact that TANGEDCO has projected the other income based on its provisional accounts, Commission is accepting the other income submitted by TANGEDCO for its own generating stations provisionally. 4.161 For new thermal and hydro stations, Commission is provisionally approving the fixed costs for the second control period. However, Commission reiterates its direction given to TANGEDCO in earlier section to submit a separate Petition for approval of capital cost of new generating stations on finalization of which necessary adjustments have to be made to the provisionally approved expenses. 4.162 Based on above submissions, the summary of fixed expenses for own generating stations as proposed by TANGEDCO and approved by the Commission in this order for the second control period are tabulated below.
ETPS
Table 215: Capacity charges approved for ETPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Net Fixed Costs Petition FY 2014 37.80 11.07 32.97 130.47 30.65 12.60 0.00 28.52 227.05 FY 2015 37.85 23.48 33.03 141.81 31.11 13.10 0.00 29.66 250.72 FY 2016 37.90 19.68 33.08 158.53 31.79 13.63 0.00 30.85 263.76 FY 2014 37.54 105.10 0.00 122.51 21.37 0.20 0.00 28.52 258.20 Commission FY 2015 39.56 104.47 0.00 131.40 21.79 0.20 0.00 29.66 267.76 FY 2016 39.90 100.91 0.00 141.43 22.10 0.20 0.00 30.85 273.69
MTPS
Table 216: Capacity charges approved for MTPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Net Fixed Costs Petition FY 2014 39.66 43.23 39.44 125.70 101.73 1.70 0.00 43.33 308.13 FY 2015 40.28 51.60 40.32 137.89 107.83 1.77 0.00 45.06 334.62 FY 2016 41.03 43.95 41.33 156.74 113.31 1.84 0.00 46.86 351.33 FY 2014 37.37 74.97 0.00 131.37 99.70 0.20 0.00 43.33 300.28 Commission FY 2015 40.57 82.23 0.00 141.97 100.45 0.20 0.00 45.06 320.36 FY 2016 43.85 89.85 0.00 154.04 101.53 0.20 0.00 46.86 342.60
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TTPS
Table 217: Capacity charges approved for TTPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Net Fixed Costs Petition FY 2014 64.98 101.92 59.55 223.52 129.57 7.69 0.00 45.03 542.20 FY 2015 66.99 118.30 62.27 240.61 137.53 8.00 0.00 46.83 586.87 FY 2016 69.42 86.95 65.39 265.28 145.74 8.32 0.00 48.71 592.40 FY 2014 66.36 132.25 0.00 156.29 120.66 0.30 0.00 45.03 430.84 Commission FY 2015 69.69 136.21 0.00 168.50 121.39 0.30 0.00 46.83 449.25 FY 2016 73.33 140.90 0.00 182.36 122.52 0.30 0.00 48.71 470.69
NCTPS
Table 218: Capacity charges approved for NCTPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Net Fixed Costs Petition FY 2014 64.86 190.99 65.76 138.51 76.09 26.13 0.00 21.22 541.13 FY 2015 66.15 189.23 67.69 149.95 80.92 27.17 0.00 22.07 559.05 FY 2016 67.70 142.72 69.90 166.75 83.76 28.26 0.00 22.95 536.14 FY 2014 63.27 110.09 0.00 136.15 70.61 0.40 0.00 21.22 359.31 Commission FY 2015 64.79 108.82 0.00 145.23 71.01 0.40 0.00 22.07 368.19 FY 2016 66.58 108.19 0.00 155.40 71.64 0.40 0.00 22.95 379.25
NCTPS Stage II
Table 219: Capacity charges approved for NCTPS Stage II (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Net Fixed Costs Petition FY 2014 0.00 468.52 122.09 168.00 136.39 0.00 0.00 0.00 895.01 FY 2015 186.92 362.32 244.69 176.40 171.96 0.00 0.00 0.00 1142.29 FY 2016 187.69 277.24 245.73 185.22 186.24 0.00 0.00 0.00 1082.12 FY 2014 124.61 340.87 0.00 43.61 93.13 0.00 0.00 0.00 602.21 Commission FY 2015 186.92 671.27 0.00 60.47 112.82 0.00 0.00 0.00 1031.47 FY 2016 187.69 651.33 0.00 62.88 112.56 0.00 0.00 0.00 1014.46
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Mettur Stage III

Table 220: Capacity charges approved for Mettur-Stage III (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Net Fixed Costs Petition FY 2014 126.61 317.60 149.37 88.20 91.63 0.00 0.00 0.00 773.41 FY 2015 127.04 279.92 149.88 92.61 102.25 0.00 0.00 0.00 751.70 FY 2016 127.49 242.02 150.42 97.24 110.65 0.00 0.00 0.00 727.82 FY 2014 86.37 173.48 0.00 26.63 56.55 0.00 0.00 0.00 343.03 Commission FY 2015 127.04 373.76 0.00 36.92 58.62 0.00 0.00 0.00 596.34 FY 2016 127.49 359.75 0.00 38.40 58.38 0.00 0.00 0.00 584.02
Ennore Expansion
Table 221: Capacity charges approved for Ennore Expansion (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Net Fixed Costs Petition FY 2014 FY 2015 FY 2016 0.00 215.37 67.63 23.10 26.58 0.00 0.00 0.00 332.67 FY 2014 Commission FY 2015 FY 2016 36.58 67.02 0.00 10.03 10.53 0.00 0.00 0.00 124.16
BBGTPS
Table 222: Capacity charges approved for BBGTPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Net Fixed Costs Petition FY 2014 19.81 63.30 17.14 6.89 8.52 0.05 0.00 0.21 115.51 FY 2015 20.04 64.31 17.34 7.54 7.45 0.05 0.00 0.22 116.51 FY 2016 20.17 60.32 17.43 8.28 7.57 0.06 0.00 0.23 113.59 FY 2014 19.81 16.27 0.00 7.95 4.75 0.10 0.00 0.21 48.66 Commission FY 2015 19.87 14.05 0.00 8.51 4.72 0.10 0.00 0.22 47.03 FY 2016 19.91 11.79 0.00 9.14 4.69 0.10 0.00 0.23 45.39
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KGTPS
Table 223: Capacity charges approved for KGTPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintence exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Net Fixed Costs Petition FY 2014 12.86 49.69 11.72 8.36 7.54 0.14 0.00 0.01 90.29 FY 2015 13.22 48.47 12.09 9.00 7.80 0.15 0.00 0.01 90.72 FY 2016 13.49 44.53 12.42 9.94 7.85 0.15 0.00 0.01 88.37 FY 2014 17.63 55.73 0.00 8.11 7.45 0.06 0.00 0.01 88.96 Commission FY 2015 17.71 53.99 0.00 8.59 7.43 0.06 0.00 0.01 87.77 FY 2016 17.86 52.37 0.00 9.12 7.44 0.06 0.00 0.01 86.83
TGTPS
Table 224: Capacity charges approved for TGTPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Net Fixed Costs Petition FY 2014 15.90 66.21 14.74 11.74 9.14 0.51 0.00 1.67 116.57 FY 2015 16.99 63.87 15.63 12.64 9.62 0.53 0.00 1.74 117.54 FY 2016 17.39 58.30 16.07 13.91 9.88 0.55 0.00 1.81 114.30 FY 2014 16.14 45.60 0.00 11.75 7.50 0.10 0.00 1.67 79.42 Commission FY 2015 16.34 44.36 0.00 12.51 7.51 0.10 0.00 1.74 79.08 FY 2016 16.55 43.17 0.00 13.36 7.55 0.10 0.00 1.81 78.91
VGTPS
Table 225: Capacity charges approved for VGTPS (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Net Fixed Costs Petition FY 2014 19.11 87.51 17.66 9.69 19.88 0.00 0.00 0.05 153.80 FY 2015 19.68 81.81 18.44 10.61 20.05 0.00 0.00 0.05 150.55 FY 2016 20.43 73.43 19.38 12.01 21.01 0.00 0.00 0.05 146.20 FY 2014 21.99 109.76 0.00 12.60 12.51 0.20 0.00 0.05 157.02 Commission FY 2015 22.30 107.98 0.00 13.50 12.52 0.20 0.00 0.05 156.45 FY 2016 22.50 106.02 0.00 14.51 12.55 0.20 0.00 0.05 155.72
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Erode Hydro generation Circle (including Bhavani Barrage and Bhavani Kattalai)
Table 226: Capacity charges approved for Erode Hydro Generation Circle (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Net Fixed Costs Petition FY 2014 35.90 162.59 44.60 32.52 9.33 0.10 0.00 0.28 284.77 FY 2015 35.92 158.36 44.65 35.58 9.33 0.11 0.00 0.29 283.66 FY 2016 35.96 144.76 44.70 40.51 9.18 0.11 0.00 0.30 274.92 FY 2014 21.45 152.03 0.00 38.25 6.78 0.12 0.00 0.28 218.36 Commission FY 2015 58.62 220.59 0.00 41.76 11.40 0.12 0.00 0.29 332.20 FY 2016 61.73 218.29 0.00 45.80 11.72 0.12 0.00 0.30 337.37
Kundah Hydro generation Circle

Table 227: Capacity charges approved for Kundah Hydro Generation Circle (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Net Fixed Costs FY 2014 25.39 68.50 29.97 43.36 6.32 0.17 0.00 1.17 172.53 Petition FY 2015 25.49 81.99 30.53 47.35 6.83 0.17 0.00 1.22 191.16 FY 2016 26.10 84.00 31.54 53.39 7.19 0.18 0.00 1.26 201.13 FY 2014 25.19 123.90 0.00 46.86 6.81 0.20 0.00 1.17 201.80 Commission FY 2015 FY 2016 25.23 25.25 121.01 118.10 0.00 0.00 50.35 54.28 6.87 6.94 0.20 0.20 0.00 0.00 1.22 1.26 202.44 203.51
Tirunelveli Hydro generation Circle

Table 228: Capacity charges approved for Tirunelveli Hydro generation circle (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Net Fixed Costs Petition FY 2014 14.36 86.85 15.55 30.27 5.00 3.07 0.00 4.10 150.99 FY 2015 14.99 80.03 17.06 33.44 4.97 3.19 0.00 4.27 149.43 FY 2016 16.44 71.87 19.27 38.26 5.13 3.32 0.00 4.44 149.86 FY 2014 12.19 59.42 0.00 30.28 3.41 0.10 0.00 4.10 101.31 Commission FY 2015 12.53 68.86 0.00 32.78 3.76 0.10 0.00 4.27 113.76 FY 2016 13.07 70.12 0.00 35.64 3.93 0.10 0.00 4.44 118.42
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Kadamparai Hydro generation Circle

Table 229: Capacity charges approved for Kadamparai Hydro Generation Circle (Rs. Cr) Parameter Depreciation Interest on Loan Capital Return on Equity Operation and maintenance exp Interest on Working Capital Other Debit Net Prior Period Expenses Less: other income Net Fixed Costs Petition FY 2014 10.53 29.86 12.53 26.42 3.01 0.00 0.00 0.33 82.02 FY 2015 12.26 35.75 15.27 28.81 3.46 0.00 0.00 0.34 95.21 FY 2016 14.31 38.14 18.39 32.39 3.91 0.00 0.00 0.35 106.79 FY 2014 10.58 34.59 0.00 28.04 2.69 0.10 0.00 0.33 75.68 Commission FY 2015 10.60 33.43 0.00 30.16 2.74 0.10 0.00 0.34 76.68 FY 2016 10.63 32.29 0.00 32.55 2.80 0.10 0.00 0.35 78.02
4.163 The recovery of capacity charges are governed by Regulation-42 of TNERC Tariff Regulations, 2005 which states as under: 42. Recovery of Capacity Charges 3. Full capacity charges (Fixed Charges) shall be recoverable at target availability specified in clause (1) of Regulation 37. 4. Recovery of capacity charges below the level of target availability will be on pro rata basis. At zero availability, no capacity charges shall be payable. 4.164 The above capacity charges as determined by the Commission are to be recovered when TANGEDCO is able to meet the target in terms of norms set by the Commission. The norms specified for recovery of fixed charges as per TNERC regulation are stipulated below: 37. Norms of Operation The norms of operation for the Thermal Generating Stations shall be as under: (i) Target availability for recovery of full capacity (fixed) charges (a) All Thermal Generating stations in Tamil Nadu except Ennore Thermal Power Generating Station 80% (b) Ennore Thermal Power Generating Station 50% (Till Renovation and Modernization works in all units are completed) .........
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4.165 In this order Commission has approved higher PLFs based on historical performance for few own generating stations for estimating energy availability. However, in line with Commissions regulations the recovery of capacity charges will be guided by the norms mentioned above. Variable cost for own generating stations 4.166 The Commission has worked out the variable cost for various generating stations on the basis of data approved fuel parameters for FY 2012-13 and considering the norms specified in the regulation. 4.167 The variable cost as determined by the Commission in respect of various generating stations of TANGEDCO is detailed as under: Thermal Stations 4.168 As per Regulation 43 (ii) of the Tarff Regulation, the Energy (Variable) charges shall be worked out on the basis of ex-bus energy delivered / sent out from the generating station. Rate of energy charges is based on the following elements: a) Price of primary fuel b) Quantum of primary fuel (coal) in kg required for generation of one kWh of electricity at generator terminals, which shall be computed on the basis of Gross Station Heat Rate (less heat contributed by secondary fuel oil) and gross calorific value of coal. c) Price of secondary fuel oil d) Normative quantity of secondary fuel e) Normative auxiliary consumption The above elements have been discussed in detail as under: Price of primary and secondary fuel 4.169 TANGEDCO in its Petition has estimated the fuel cost for the control period by considering an escalation of 5% over its FY 2012-13 TANGEDCO has submitted that it has considered 5% escalation for fuel costs in order to take care of fuel cost adjustments for the purpose of estimating power cost. 4.170 It is pertinent to mention that with regards the escalation fuel costs , the Commission has already approved Fuel Price Cost Adjustment (FPCA) Formulae in Page number 294 of its last tariff order dated March 30, 2012 which is reproduced below: 9.4.6 The Commission is of the opinion that the Fuel Price Adjustment charge formula would enable the TANGEDCO to recover the actual cost of the fuel incurred and the actual cost of the power purchase, if the same is at variance from the figures approved by the Commission in this Tariff Order.
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Section 62 (4) of the Electricity Act 2003 also mandates that the Commission to provide for mechanism to pass through of variation of Fuel and Power Purchase cost by specifying the Fuel surcharge formula 9.4.6.6. In most of the comparable States like Maharashtra, Gujarat, Andhra Pradesh, Kerala, etc, FPCA mechanism is in place. 9.4.6.7. The Commission in this Order is approving FPAC formulae to reflect change in fuel cost for TANGEDCOs own Thermal Stations and Power Purchase from other sources which are due to reasons beyond the control of TANGEDCO,... 4.171 Hence, Commission is consciously not considering any escalation over the fuel price. Commission has considered the fuel price for the second control period as that approved for FY 2012-13 in this order. If there is variation of actual cost of fuel as compared to what has been approved by the Commission, TANGEDCO can claim the differential amount of power purchase cost through FPCA mechanism. The fuel cost filed by TANGEDCO and approved by the Commission for second control period is tabulated below. 4.172 For new generating stations, TANGEDCO has proposed a higher fuel cost compared to existing thermal stations. In response to Commissions query, TANGEDCO has submitted that keeping in view fuel supply constraints it has considered a blending ratio of 58:42 (Domestic:Imported). Commission is of the view that the boilers are designed to operate efficiently at a particular GCV of coal and any abnormal variation in this mix can make the plant operate inefficiently. In view of this Commission has considered the fuel cost for the new generating stations equal to that approved for existing stations and directs TANGEDCO to make appropriate arrangements for fuel supply.
Table 230: Cost of primary fuel approved by the Commission for second control period Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Tirumakottai GTPS Kuttalum GTPS Basin Bridge GTPS Valathur - Unit 1 Valathur - Unit 2 NCTPS Stage II MTPS Stage III Ennore Expansion FY 201314 2575 4494 3907 3359 10.88 10.29 51065 17.08 17.08 4312 4864 Petition FY 201415 2704 4719 4102 3591 11.42 10.81 53618 17.94 17.94 4528 5107 FY 201516 2839 4955 4307 3594 12.00 11.35 56299 18.83 18.83 4754 5363 FY 201314 2841 3659 3916 3407 9.32 9.32 40625 8.76 8.78 3407 3916 Commission FY 2014- FY 201515 16 2841 3659 3916 3407 9.32 9.32 40625 8.76 8.78 3407 3916 2841 3659 3916 3407 9.32 9.32 40625 8.76 8.78 3407 3916 2841
Units Rs./Tonne Rs./Tonne Rs./Tonne Rs./Tonne Rs./SCM Rs./SCM Rs./MT Rs./SCM Rs./SCM Rs./Tonne Rs./Tonne Rs./Tonne
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Table 231: Cost of secondary fuel approved by the Commission for second control period Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS NCTPS Stage II MTPS Stage III Ennore Expansion FY 201314 50691 47137 42678 51690 51690 42678 Petition FY 201415 53226 49494 44812 54274 54274 44812 FY 201516 55887 51969 47052 56988 56988 47052 55887 FY 201314 49112 47916 47417 47346 47346 47417 Commission FY 2014- FY 201515 16 49112 47916 47417 47346 47346 47417 49112 47916 47417 47346 47346 47417 49112
Units Rs./kL Rs./kL Rs./kL Rs./kL Rs./kL Rs./kL Rs./kL
Gross calorific value 4.173 For the second control period, TANGEDCO in its Petition for thermal stations except for ETPS and NCTPS has considered the gross calorific value of primary and secondary fuel equal to its estimated gross calorific value of primary and secondary fuels for FY 2012-13. TANGEDCO has not provided adequate reasons for its consideration of varying calorific value for ETPS and NCTPS. 4.174 For new generating stations, TANGEDCO has considered GCV of fuels equivalent to that of existing generating stations. However, there was marked difference in price of fuel claimed for new generating stations and existing generating stations. In response to Commissions query TANGEDCO has revised the GCV of the fuel for new generating stations corresponding to the blending ratio of 58:42. 4.175 Commission has considered the gross calorific value of primary and secondary fuels for the second control period as that approved for FY 2012-13. For new generating stations, the Commission has considered the gross calorific value of fuels equivalent to that of the existing thermal stations. The gross calorific value filed by TANGEDCO and approved by the Commission for the second control period is given below.
Table 232: GCV of primary fuel approved by the Commission Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Tirumakottai GTPS Kuttalum GTPS Basin Bridge GTPS Valathur - Unit 1 Valathur - Unit 2 NCTPS - Stage II Petition Units kCal/Kg kCal/Kg kCal/Kg kCal/Kg kCal/SCM kCal/SCM kCal/Kg kCal/SCM kCal/SCM kCal/Kg 2013-14 3150 4320 3562 3588 10000 10000 10572 10000 10000 3588 2014-15 3110 4320 3562 3591 10000 10000 10572 10000 10000 3588 2015-16 3080 4320 3562 3594 10000 10000 10572 10000 10000 3588 2013-14 3235 3405 3551 3615 10000 10000 10572 10000 10000 3615 Commission 2014-15 3235 3405 3551 3615 10000 10000 10572 10000 10000 3615 2015-16 3235 3405 3551 3615 10000 10000 10572 10000 10000 3615
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Name of the Power Station Mettur Stage III Ennore Expansion
Petition Units kCal/Kg kCal/Kg 2013-14 3562 2014-15 3562 2015-16 3562 3080 2013-14 3551
Commission 2014-15 3551 2015-16 3551 3235
Table 233: GCV of secondary fuel approved by the Commission Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS NCTPS - Stage II Mettur Stage III Ennore Expansion Units kCal/Lt kCal/Lt kCal/Lt kCal/Lt kCal/Lt kCal/Lt kCal/Lt Revised Submission 2013-14 10,470 10,645 10,104 10,355 10,355 10,104 2014-15 10,480 10,645 10,104 10,357 10,357 10,104 2015-16 10,470 10,645 10,104 10,368 10,368 10,104 10,470 2013-14 10502 10639 10466 10343 10343 10466 Commission 2014-15 10502 10639 10466 10343 10343 10466 2015-16 10502 10639 10466 10343 10343 10466 10502
Station heat rate 4.176 TANGEDCO in its Petition has submitted that SHR proposed by it for the own generating stations after considering factors such as condition of plan, age of the plant, coal quality etc. Commission reiterates its view that reasons specified by TANGEDCO are not appropriate and Commission is guided by clause 37 (3) of TNERC tariff regulations for approving SHR. 37. Norms for operation ------(iii) Gross Station Heat Rate (a) .Norms for the existing Coal-based Thermal Power Generating Stations Station Heat Rate 1. ETPS 2. TTPS 3. MTPS 4. NCTPS 3200 kcal/kwh 2453 kCal/kWh . 2500 kCal/kWh 2393 kCal/kWh
(b) Norms for the new Thermal Power Generating Stations 200/210/250 MW sets During Stabilization period 2600 KCal/kWh Subsequent period 2500 KCal/kWh
500 MW and above sets 2550 Kcal/kWh 2450 Kcal/kWh
Note-1 : In respect of 500 MW and above units where the boiler feed pumps are electrically operated, the heat rate of 40 kCal/kWh shall be reduced from the Generating Station heat rate indicated above. Note-2 : For Generating Stations having combination of 200/210/250 MW sets and 500 MW and above sets, the normative gross Generating Station heat rate shall be the weighted average Generating Station heat rate of various sets.
.. (d) Gas-Turbine / combined cycle Generating Stations Advanced class machine Open Cycle 2685 Kcal / kWh Combined cycle 1850 Kcal/ kWh
E/EA/EC/E2 class machine 2830 Kcal / kWh 1950 Kcal / kWh
4.177 Commission in accordance to its regulations has considered the station heat rate for thermal stations except of BBGTPS. The generation from BBGTPS station is very limited. This station is being operated as synchronous condenser as facility was available for operating the gas turbines as synchronous condenser. The gas turbines is started and brought upto full speed after which the unit is synchronized with the grid. Thereafter the fuel supply is cut off and the gas turbine slows down and finally gets decoupled from the generator through the operation of a clutch. The generator continues to be in synchronism with the grid but operates as synchronized condenser. In this process it supplies VAR to system for compensation. It is understood that this kind of operation of Basin Bridge Gas Turbine Station has resulted in improving the voltage profile in the surrounding area and also improved the real power generation of North Chennai TPS. Hence, Commission approves a relaxed SHR during the second control period for BBGTPS as that approved for FY 2012-13. 4.178 For new generating stations considering stabilization period in accordance to its regulation, Commission has approved a relaxed SHR during the year of commissioning. The SHR for thermal stations filed by the Petitioner and approved by the Commission is given below.
Table 234: Station heat rate (kCal/kWh) approved by the Commission Petition 2014-15 3858 2705 2500 2487 1850 1850 3219 1850 1850 2450 2450 Commission 2014-15 2015-16 3200 3200 2453 2453 2500 2500 2393 2393 1850 1850 1850 1850 3219 3219 1850 1850 1850 1850 2450 2450 2450 2450 2550
Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Tirumakottai GTPS Kuttalum GTPS Basin Bridge GTPS Valathur - Unit 1 Valathur - Unit 2 NCTPS - Stage II Mettur Stage III Ennore Expansion
2013-14 3906 2705 2500 2485 1850 1850 3219 1850 1850 2450 2450
2015-16 3822 2705 2500 2489 1850 1850 3219 1850 1850 2450 2450 2450
2013-14 3200 2453 2500 2393 1850 1850 3219 1850 1850 2500 2500
Auxiliary consumption and Secondary fuel oil consumption 4.179 In chapter 4, Commission has approved auxiliary consumption for arriving at the energy availability. Commission has considered the same auxiliary consumption for estimating the energy charges. The auxiliary consumption filed and approved by the Commission is tabulated below.
Table 235: Auxiliary consumption approved by the Commission for estimating energy charges Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS Tirumakottai GTPS Kuttalum GTPS Basin Bridge GTPS Valathur - Unit 1 Valathur - Unit 2 NCTPS - Stage II (Unit 1) NCTPS - Stage II (Unit 2) Mettur Stage III Ennore Expansion Petition 2013-14 15.00% 8.50% 8.55% 8.50% 6.00% 6.00% 0.99% 6.00% 6.00% 8.50% 8.50% 8.50% 2014-15 15.00% 8.50% 8.55% 8.50% 6.00% 6.00% 0.99% 6.00% 6.00% 8.50% 8.50% 8.50% 2015-16 15.00% 8.50% 8.55% 8.50% 6.00% 6.00% 1.00% 6.00% 6.00% 8.50% 8.50% 8.50% 8.50% 2013-14 15.00% 8.50% 8.50% 8.50% 6.00% 6.00% 0.99% 6.00% 6.00% 8.88% 8.83% 8.83% Commission 2014-15 15.00% 8.50% 8.50% 8.50% 6.00% 6.00% 0.99% 6.00% 6.00% 8.50% 8.50% 8.50% 2015-16 15.00% 8.50% 8.50% 8.50% 6.00% 6.00% 0.99% 6.00% 6.00% 8.50% 8.50% 8.50% 9.00%
4.180 The norms for secondary fuel oil consumption for thermal stations as per TNERC tariff regulations, 2005 is given below: 37. Norms of operation (iv) Secondary fuel oil consumption (a) Coal-based Generating Stations: During stabilization period Subsequent period (except ETPS) ETPS : : : 4.5 ml/kWh 2.0 ml/kWh 12.ml/kWh
(b) Lignite fired Generating Stations: During stabilization period : Subsequent period (except ETPS) :
5.0 ml/kWh 3.0 ml/kWh
4.181 Commission has considered the SFO in accordance with its regulations for its thermal stations. For new generating stations in accordance with Tariff Regulations considering the stabilization period Commission has approved the SFO consumption. The SFO consumption for coal based stations filed by TANGEDCO and approved by the Commission for the second control period is tabulated below.
Page 250 June 2013
Table 236: SFO approved for coal based stations by the Commission during the second control period (ml/kWh) Name of the Power Station Ennore TPS Tuticorin TPS Mettur TPS North Chennai TPS NCTPS - Stage II Mettur Stage III Ennore Expansion 2013-14 12.00 3.00 1.29 0.94 2.00 2.00 Petition 2014-15 12.00 3.00 1.29 0.94 2.00 2.00 2015-16 12.00 3.00 1.29 0.94 2.00 2.00 2.00 2013-14 12.00 2.00 2.00 2.00 3.25 3.25 Commission 2014-15 2015-16 12.00 12.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 4.50
Variable Cost for Thermal Stations 4.182 On the basis of above submissions, the Commission has calculated the variable cost for thermal power stations of TANGEDCO which is tabulated as under. Commission has estimated the variable cost ex bus considering the entire fuel cost including oil. ETPS
Table 237: Variable Cost approved by the Commission for ETPS Description Capacity Gross Station Heat Rate Secondary fuel oil consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Specific consumption of coal Rate of energy from Coal Variable Cost - Gross Auxiliary Consumption Variable Cost - Ex bus Petition Unit MW Kcal/kWh ml/kWh Kcal/l Kcal/Kg Rs./Kl Rs./MT Paisa/kWh Kcal/kWh Kcal/kWh Kg/kWh Paisa/kWh Paisa/kWh % Paisa/kWh Paisa/kWh 2013-14 450 3200 12.00 10502 3235 49112 2841 58.93 126.02 3073.98 0.95 269.96 328.89 15.00% 386.93 435.13 2014-15 450 3200 12.00 10502 3235 49112 2841 58.93 126.02 3073.98 0.95 269.96 328.89 15.00% 386.93 456.87 2015-16 450 3200 12.00 10502 3235 49112 2841 58.93 126.02 3073.98 0.95 269.96 328.89 15.00% 386.93 479.73
Page 251 June 2013
TTPS
Table 238: Variable Cost approved by the Commission for TTPS Description Capacity Gross Station Heat Rate Secondary fuel oil consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Specific consumption of coal Rate of energy from Coal Variable Cost - Gross Auxiliary Consumption Variable Cost - Ex bus Petition Unit MW Kcal/kWh ml/kWh Kcal/l Kcal/Kg Rs./Kl Rs./MT Paisa/kWh Kcal/kWh Kcal/kWh Kg/kWh Paisa/kWh Paisa/kWh % Paisa/kWh Paisa/kWh 2013-14 1050 2453 2.00 10639 3405 47916 3659 9.58 21.28 2431.72 0.71 261.31 270.90 8.50% 296.06 319.37 2014-15 1050 2453 2.00 10639 3405 47916 3659 9.58 21.28 2431.72 0.71 261.31 270.90 8.50% 296.06 335.34 2015-16 1050 2453 2.00 10639 3405 47916 3659 9.58 21.28 2431.72 0.71 261.31 270.90 8.50% 296.06 352.11
MTPS
Table 239: Variable Cost approved by the Commission for MTPS Description Capacity Gross Station Heat Rate Secondary fuel oil consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Specific consumption of coal Rate of energy from Coal Variable Cost - Gross Auxiliary Consumption Variable Cost - Ex bus Petition Unit MW Kcal/kWh ml/kWh Kcal/l Kcal/Kg Rs./Kl Rs./MT Paisa/kWh Kcal/kWh Kcal/kWh Kg/kWh Paisa/kWh Paisa/kWh % Paisa/kWh Paisa/kWh 2013-14 840 2500 2.00 10466 3551 47417 3916 9.48 20.93 2479.07 0.70 273.39 282.87 8.50% 309.15 304.32 2014-15 840 2500 2.00 10466 3551 47417 3916 9.48 20.93 2479.07 0.70 273.39 282.87 8.50% 309.15 325.84 2015-16 840 2500 2.00 10466 3551 47417 3916 9.48 20.93 2479.07 0.70 273.39 282.87 8.50% 309.15 342.13
Page 252 June 2013
NCTPS
Table 240: Variable Cost approved by the Commission for NCTPS Description Capacity Gross Station Heat Rate Secondary fuel oil consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Specific consumption of coal Rate of energy from Coal Variable Cost - Gross Auxiliary Consumption Variable Cost - Ex bus Petition Unit MW Kcal/kWh ml/kWh Kcal/l Kcal/Kg Rs./Kl Rs./MT Paisa/kWh Kcal/kWh Kcal/kWh Kg/kWh Paisa/kWh Paisa/kWh % Paisa/kWh Paisa/kWh 2013-14 630 2393 2.00 10343 3615 47346 3407 9.47 20.69 2372.31 0.66 223.58 233.05 8.50% 254.70 258.58 2014-15 630 2393 2.00 10343 3615 47346 3407 9.47 20.69 2372.31 0.66 223.58 233.05 8.50% 254.70 271.51 2015-16 630 2393 2.00 10343 3615 47346 3407 9.47 20.69 2372.31 0.66 223.58 233.05 8.50% 254.70 285.07
NCTPS Stage-II (Unit 1)

Table 241: Variable Cost approved by the Commission for NCTPS stage II (Unit 1) Description Capacity Gross Station Heat Rate Secondary fuel oil consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Specific consumption of coal Rate of energy from Coal Variable Cost - Gross Auxiliary Consumption Variable Cost - Ex bus Petition Unit MW Kcal/kWh ml/kWh Kcal/l Kcal/Kg Rs./Kl Rs./MT Paisa/kWh Kcal/kWh Kcal/kWh Kg/kWh Paisa/kWh Paisa/kWh % Paisa/kWh Paisa/kWh 2013-14 600 2500 3.25 10343 3615 47346 3407 15.39 33.61 2466.39 0.68 232.45 247.83 8.88% 271.97 330.38 2014-15 600 2450 2.00 10343 3615 47346 3407 9.47 20.69 2429.31 0.67 228.95 238.42 8.50% 260.57 346.90 2015-16 600 2450 2.00 10343 3615 47346 3407 9.47 20.69 2429.31 0.67 228.95 238.42 8.50% 260.57 364.24
Page 253 June 2013
NCTPS Stage-II (Unit 2)

Table 242: Variable Cost approved by the Commission for NCTPS stage II (Unit 2) Description Capacity Gross Station Heat Rate Secondary fuel oil consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Specific consumption of coal Rate of energy from Coal Variable Cost - Gross Auxiliary Consumption Variable Cost - Ex bus Petition Unit MW Kcal/kWh ml/kWh Kcal/l Kcal/Kg Rs./Kl Rs./MT Paisa/kWh Kcal/kWh Kcal/kWh Kg/kWh Paisa/kWh Paisa/kWh % Paisa/kWh Paisa/kWh 2013-14 600 2500 3.25 10343 3615 47346 3407 15.39 33.61 2466.39 0.68 232.45 247.83 8.83% 271.85 330.38 2014-15 600 2450 2.00 10343 3615 47346 3407 9.47 20.69 2429.31 0.67 228.95 238.42 8.50% 260.57 346.90 2015-16 600 2450 2.00 10343 3615 47346 3407 9.47 20.69 2429.31 0.67 228.95 238.42 8.50% 260.57 364.24
Mettur stage III

Table 243: Variable Cost approved by the Commission for Mettur Stage III Description Capacity Gross Station Heat Rate Secondary fuel oil consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Specific consumption of coal Rate of energy from Coal Variable Cost - Gross Auxiliary Consumption Variable Cost - Ex bus Petition Unit MW Kcal/kWh ml/kWh Kcal/l Kcal/Kg Rs./Kl Rs./MT Paisa/kWh Kcal/kWh Kcal/kWh Kg/kWh Paisa/kWh Paisa/kWh % Paisa/kWh Paisa/kWh 2013-14 600 2500 3.25 10466 3551 47417 3916 15.41 34.01 2465.99 0.69 271.95 287.36 8.83% 315.20 373.99 2014-15 600 2450 2.00 10466 3551 47417 3916 9.48 20.93 2429.07 0.68 267.87 277.36 8.50% 303.12 392.69 2015-16 600 2450 2.00 10466 3551 47417 3916 9.48 20.93 2429.07 0.68 267.87 277.36 8.50% 303.12 412.32
Page 254 June 2013
Ennore Expansion
Table 244: Variable Cost approved by the Commission for Mettur Stage III Description Capacity Gross Station Heat Rate Secondary fuel oil consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Specific consumption of coal Rate of energy from Coal Variable Cost - Gross Auxiliary Consumption Variable Cost - Ex bus Petition Unit MW Kcal/kWh ml/kWh Kcal/l Kcal/Kg Rs./Kl Rs./MT Paisa/kWh Kcal/kWh Kcal/kWh Kg/kWh Paisa/kWh Paisa/kWh % Paisa/kWh Paisa/kWh 2013-14 2014-15 2015-16 660 2550 4.50 10502 3235 49112 2841 22.10 47.26 2502.74 0.77 219.79 241.89 9.00% 265.82 256.91
TGTPS
Table 245: Variable Cost approved by the Commission for TGTPS Description Capacity Gross Station Heat Rate Average calorific value of gas Average Cost of Gas Rate of energy from Gas Auxiliary Consumption Rate of energy - Net Ex bus Net Generation Total Cost excluding Transportation Transportation Cost Total Cost Variable Cost Petition Unit MW Kcal/kWh Kcal/SCM Rs./ SCM Ps/ kWh % Ps/ kWh Mus Rs. Crore Rs. Crore Rs. Crore Ps/ kWh Ps/ kWh 2013-14 108 1850 10000 9.32 172.42 6.00% 183.43 711.45 130.50 1.96 132.46 186.18 217.06 2014-15 108 1850 10000 9.32 172.42 6.00% 183.43 711.45 130.50 2.06 132.56 186.32 227.80 2015-16 108 1850 10000 9.32 172.42 6.00% 183.43 713.40 130.86 2.16 133.02 186.45 239.18
Page 255 June 2013
KGTPS
Table 246: Variable Cost approved by the Commission for KGTPS Description Capacity Gross Station Heat Rate Average calorific value of gas Average Cost of Gas Rate of energy from Gas Auxiliary Consumption Rate of energy - Net Ex bus Net Generation Total Cost excluding Transportation Transportation Cost Total Cost Variable Cost Petition Unit MW Kcal/kWh Kcal/SCM Rs./ SCM Ps/ kWh % Ps/ kWh Mus Rs. Crore Rs. Crore Rs. Crore Ps/ kWh Ps/ kWh 2013-14 101 1850 10000 9.32 172.42 6.00% 183.43 665.34 122.04 1.96 124.00 186.37 205.76 2014-15 101 1850 10000 9.32 172.42 6.00% 183.43 665.34 122.04 2.06 124.10 186.52 216.05 2015-16 101 1850 10000 9.32 172.42 6.00% 183.43 667.16 122.37 2.16 124.53 186.66 226.98
BBGTPS
Table 247: Variable Cost approved by the Commission for BBGTPS Description Capacity Gross Station Heat Rate Average calorific value of Naptha Average Cost of Naptha Rate of energy from Naptha Auxiliary Consumption Rate of energy - Net Ex bus Net Generation Total Cost excluding Transportation Transportation Cost Total Cost Variable Cost Petition Unit MW Kcal/kWh Kcal/Kg Rs./ MT Ps/ kWh % Ps/ kWh Mus Rs. Crore Rs. Crore Rs. Crore Ps/ kWh Ps/ kWh 2013-14 120 3219 10572 40625.00 1236.96 0.99% 1249.33 59.43 74.25 0.00 74.25 1249.33 1570.50 2014-15 120 3219 10572 40625.00 1236.96 0.99% 1249.33 59.43 74.25 0.00 74.25 1249.33 1649.03 2015-16 120 3219 10572 40625.00 1236.96 0.99% 1249.33 59.43 74.25 0.00 74.25 1249.33 1731.65
Page 256 June 2013
VGTPS Unit 1
Table 248: Variable Cost approved by the Commission for VGTPS unit 1 Description Capacity Gross Station Heat Rate Average calorific value of gas Average Cost of Gas Rate of energy from Gas Auxiliary Consumption Rate of energy - Net Ex bus Net Generation Total Cost excluding Transportation Transportation Cost Total Cost Variable Cost Petition Unit MW Kcal/kWh Kcal/SCM Rs./ SCM Ps/ kWh % Ps/ kWh Mus Rs. Crore Rs. Crore Rs. Crore Ps/ kWh Ps/ kWh 2013-14 95 1850 10000 8.76 162.06 6.00% 172.40 625.81 107.89 3.65 111.54 178.24 342.15 2014-15 95 1850 10000 8.76 162.06 6.00% 172.40 625.81 107.89 3.83 111.72 178.52 359.26 2015-16 95 1850 10000 8.76 162.06 6.00% 172.40 627.53 108.19 4.02 112.21 178.81 377.45
VGTPS Unit 2
Table 249: Variable Cost approved by the Commission for VGTPS unit 2 Description Capacity Gross Station Heat Rate Average calorific value of gas Average Cost of Gas Rate of energy from Gas Auxiliary Consumption Rate of energy - Net Ex bus Net Generation Total Cost excluding Transportation Transportation Cost Total Cost Variable Cost Petition Unit MW Kcal/kWh Kcal/SCM Rs./ SCM Ps/ kWh % Ps/ kWh Mus Rs. Crore Rs. Crore Rs. Crore Ps/ kWh Ps/ kWh 2013-14 92 1850 10000 8.78 162.43 6.00% 172.80 606.05 104.72 3.65 108.37 178.82 336.21 2014-15 92 1850 10000 8.78 162.43 6.00% 172.80 606.05 104.72 3.83 108.55 179.12 353.02 2015-16 92 1850 10000 8.78 162.43 6.00% 172.80 607.71 105.01 4.02 109.03 179.41 370.67
Page 257 June 2013
Hydro Generating Stations 4.183 Clause 53 of TNERC Tariff Regulations, 2005 stipulates guidelines for recovery of primary energy charges. 53. Computation of Annual Energy Charges (1) The two part tariff for sale of electricity from a hydro power generating station shall comprise a recovery of annual capacity (fixed) charges and primary energy charges. ------------(3) Primary Energy Charges shall be the operating expenses like cost of water, lubricants, consumables and station supplies. 4.184 TANGEDCO in accordance to the regulation has claimed primary energy charges for hydro generating stations on account of water charges, lubricants etc. However, primary energy charges claimed by TANGEDCO in its Petition for Tirunelveli hydro generation circle have increased significantly compared to Commissions approval in last tariff order. TANGEDCO has not provided adequate reasons for increase in primary energy charges for Tirunelveli hydro generation circle in its Petition. In view of the above submissions, Commission has considered the primary energy charges as approved for FY 13 during the second control period for all the hydro stations including Tirunelveli Hydro Generation circle.
Table 250: Primary energy charges approved by the Commission for Hydro Generation Circles (Rs. Cr) Generation Circles Erode Kundah Kadamparai Tirunelveli FY 2013-14 Petition 0.11 0.01 0.00 3.12 Commission 0.04 0.23 0.00 0.26 FY 2014-15 Petition 0.11 0.01 0.00 3.28 Commission 0.04 0.23 0.00 0.26 FY 2015-16 Petition 0.12 0.01 0.00 3.44 Commission 0.04 0.23 0.00 0.26
Wind Generating Stations 4.185 The Commission in tariff order date 31st July 2010 ruled that in the order No.3 dated 15-05-2006, the Commission has determined a tariff of Rs.2.75 / unit for the wind power projects commissioned, and to be commissioned based on agreements executed prior to May 15, 2006. Accordingly the Commission allowed the rate of Rs. 2.75/ Unit in 31st July 2010 order. 4.186 In its Petition TANGEDCO has considered the transfer price of Rs. 2.75 per unit as cost of generation from its wind mills in accordance to Commissions order. Hence Commission is accepting the TANGEDCO submission and is approving the cost of wind generation from its own wind mills at Rs. 2.75 per unit during the second control period.
Page 258 June 2013
Power Purchase from other sources

4.187 In its Petition TANGEDCO has estimated the energy availability considering the actual procurement during the first half of FY 2012-13 and using merit order dispatch principle. 4.188 Apart from own generating stations, TANGEDCO procures power from CGS, IPPs, renewable energy sources, captive power plants and traders 4.189 This section details out the approach adopted by the Commission in approving the power purchase expenses for second control period. Central generating stations 4.190 TANGEDCO in its Petition has projected the power purchase expenses considering a 5% escalation in fixed costs and 4% escalation in per unit variable cost. For the new generating stations, TANGEDCO has assumed a single part tariff of Rs. 3.50 per unit during the year of commissioning and escalated it by 4% for arriving at the per unit variable costs for other years of the control period. 4.191 CERC has issued provisional orders and final orders for approving the capacity charges with respect to central generating stations for the period FY 2009-10 to FY 2013-14. The relevant details from the latest Order from FY 2009-10 to FY 2013-14 available on the website of CERC are tabulated below:
Table 251: Capacity charges approved by CERC for CGS (FY 2013-14) Particulars NLC TS-I NLC-II (Stage-I) NLC-II (Stage-II) NLC TS-I Expansion NTPC (SR)Ramagundam (I & II) NTPC-SR StageIII NTPC Talcher Stage-II NTPC - Simhadri Capacity (MW) 600 630 840 420 Order T.O. dated 9.04.2012 T.O. dated 27.06.2011 T.O. dated 27.06.2011 T.O. dated 31.08.2010 FY 2013-14 (Rs. Crore) 292.09 231.24 314.82 360.87 TN Share* 100.00% 32.36% 32.36% 53.84% Capacity charges (Rs. Crore) 292.09 74.83 101.88 194.28
2100 500 2000 1000
T.O. dated 31.8.2012 T.O. dated 7.5.2012 Provisional T.O. dated 6.07.2011 T.O. dated 26.09.2012
870.19 336.39 1102.37 1188.24
26.09% 27.40% 25.22% 22.84%
227.03 92.17 278.00 271.40
*TN share including unallocated power based on March 2013 SRPC report 4.192 Commission has considered the capacity charges for all the years of the second control period equivalent to those estimated for FY 2013-14 after taking into account TN share and approved capacity charges for CGS by CERC for FY 2013-14.
Page 259 June 2013
4.193 As regards variable charges, the Commission has considered the per unit variable charges for all years of the control period to be equivalent to that approved for FY 2012-13 in this order. Commission has not considered any escalation in the energy charges and directs TANGEDCO to file a FPCA Petition for any variation in actual energy charges compared to energy charges approved in this order. 4.194 For new coal based CGS, TANGEDCO has considered a single part tariff of Rs. 3.50 per unit. However, Commission is of the view that it is not appropriate to consider single part tariff as TANGEDCO will be required to pay fixed charges in cases where the energy is not getting scheduled under MoD. Hence, Commission has provisionally considered a fixed cost of Rs. 1.50 per unit and variable cost of Rs. 2.00 per unit for all coal based new CGS. For new nuclear CGS, Commission has considered the single part tariff equivalent to that of KAIGA. The power purchase expenses approved by the Commission in its order with respect to CGS have been tabulated below.
Table 252: Power purchase from CGS approved by the Commission in FY 2013-14 Petition Energy Charge s (Rs./ Unit ) 1.72 2.02 1.79 2.10 1.96 2.21 2.37 2.15 3.38 0.00 2.84 3.64 3.64 0.00 3.64 3.50 2.54 Commission Energy Charge s (Rs./ Unit ) 1.68 2.00 2.24 1.98 1.80 1.41 1.99 2.04 3.02 0 0 2.00 3.02 3.02 2.00 2.00 2.01
Source
Units (MU) 4164 1074 2937 3450 1749 3567 638 1986 1278 0 599 4676 2426 0 1449 257 30250
Capacity Charges (Rs. Crore) 240 97 171 217 234 313 81 0 0 48 17 0 0 0 0 0 1418
Energy Charge s (Rs. Crore) 715 217 526 724 343 789 151 428 432 0 170 1703 883 0 527 90 7697
Total Cost (Rs. Crore) 955 314 697 941 578 1102 232 428 432 48 187 1703 883 0 527 90 9116
Units (MU) 3952 988 3469 3188 1470 3361 1556 1568 1176 0 0 4955 1663 0 89 518 27954
NTPC SR (I&II) NTPC SR III NLC TS - I NLC TS - II NLC TS Expansion I NTPC Talcher NTPC Simhadri MAPS KAIGA NTPC ER NTPC Dadri NTPC Vallur Kudankulum PFBR Kalpakkam NLC TS - II Expansion NLC Tuticorin Total
Page 260 June 2013
Table 253: Power purchase from CGS approved by the Commission in FY 2014-15 Petition Energy Charge s (Rs./ Unit ) 1.79 2.10 1.86 2.18 2.04 2.30 2.46 2.24 3.51 0.00 2.95 3.75 3.81 0.00 3.79 3.64 2.80 Commission Energy Charge s (Rs./ Unit ) 1.68 2.00 2.24 1.98 1.80 1.41 1.99 2.04 3.02 0 0 2.00 3.02 3.02 2.00 2.00 2.09
Source
Units (MU) 4164 1074 2937 3450 1749 3567 678 1986 1278 0 638 6704 4316 0 1546 1219 35307
Units (MU) 3952 988 3469 3188 1470 3361 1556 1568 1176 0 0 7092 4376 494 1752 2643 37086
NTPC SR (I&II) NTPC SR III NLC TS - I NLC TS - II NLC TS Expansion I NTPC Talcher NTPC Simhadri MAPS KAIGA NTPC ER NTPC Dadri NTPC Vallur Kudankulum PFBR Kalpakkam NLC TS - II Expansion NLC Tuticorin Total
Table 254: Power purchase from CGS approved by the Commission in FY 2015-16 Petition Energy Charge s (Rs./ Unit ) 1.86 2.19 1.94 2.27 2.12 2.39 2.56 2.33 3.65 0.00 Commission Energy Charge s (Rs./ Unit ) 1.68 2.00 2.24 1.98 1.80 1.41 1.99 2.04 3.02 0
Source
Units (MU) 4164 1074 1469 3450 1749 3567 678 1986 1278 0
Capacity Charges (Rs. Crore) 264 107 189 240 258 345 90 0 0 53
Energy Charge s (Rs. Crore) 774 235 284 783 371 853 174 462 467 0
Total Cost (Rs. Crore) 1038 342 473 1023 630 1198 263 462 467 53
Units (MU) 3963 991 3478 3196 1474 3370 1560 1573 1179 0
Capacity Charges (Rs. Crore) 227 92 292 177 194 278 271 0 0 0
Energy Charge s (Rs. Crore) 666 198 779 633 265 475 311 321 356 0
Total Cost (Rs. Crore) 893 290 1071 809 460 753 582 321 356 0
NTPC SR (I&II) NTPC SR III NLC TS - I NLC TS - II NLC TS Expansion I NTPC Talcher NTPC Simhadri MAPS KAIGA NTPC ER
Page 261 June 2013
Source
Units (MU) 678 7141 5544 0 1642 1300 35721
NTPC Dadri NTPC Vallur Kudankulum PFBR Kalpakkam NLC TS - II Expansion NLC Tuticorin Total
Capacity Charges (Rs. Crore) 18 0 0 0 0 0 1564
Petition Energy Charge s (Rs./ Unit ) 3.07 3.90 3.90 0.00 3.94 3.79 2.99
Energy Charge s (Rs. Crore) 208 2785 2162 0 647 492 10698
Total Cost (Rs. Crore) 227 2785 2162 0 647 492 12261
Units (MU) 0 7112 4388 792 2220 2651 37948
Capacity Charges (Rs. Crore) 0 1067 0 0 333 398 3329
Commission Energy Charge s (Rs./ Unit ) 0 2.00 3.02 3.02 2.00 2.00 2.10
Energy Charge s (Rs. Crore) 0 1422 1325 239 444 530 7965
Total Cost (Rs. Crore) 0 2489 1325 239 777 928 11294
Independent Power Producers 4.195 TANGEDCO in its Petition has projected the power purchase expenses considering a 5% escalation in fixed costs and 4% escalation in per unit variable cost. Although the liquid fuel IPPs do not fall under MoD. In response to Commissions query on PPAs with respect to IPPs, TANGEDCO has replied that PPAs with M/s GMR and M/s SPC are expiring on 15th Feb 2014 and 29th Feb 2016 respectively in this control period. 4.196 Commission has considered the capacity charges for all the years of the second control period equivalent to those estimated for FY 2012-13 after taking into actual capacity charges paid by TANGEDCO. However with respect to IPPs whose PPA is expiring in the control period, Commission has not allowed any capacity charges after the expiry of PPA. 4.197 As regards variable charges, the Commission has considered the per unit variable charges for all years of the control period to be equivalent to that approved for FY 2012-13 in this order. Commission has not considered any escalation in the energy charges and directs TANGEDCO to file a FPCA Petition for any variation in actual energy charges compared to energy charges approved in this order. 4.198 The capacity charges and variable energy charges approved for IPPs by the Commission for the second control period are tabulated below. However, the despatch of energy from IPPs will be governed by MoD principle.
Page 262 June 2013
Table 255: Power purchase from IPPs approved by the Commission in FY 2013-14 Petition Source Units (MU ) 0 0 0 0 1819 375 759 2953 Capacity Charges (Rs. Crore) 175 128 315 137 347 117 62 1281 2.41 1.91 1.93 2.23 Energy Charge s (Rs./ Unit ) Energy Charge s (Rs. Crore) 0 0 0 0 439 72 147 658 Total Charges (Rs. Crore) 175 128 315 137 786 189 209 1938 Units (MU ) 945 472 2103 455 1665 783 353 6775 Capacity Charges (Rs. Crore) 147 109 292 110 364 117 58 1197 Commission Energy Charge s (Rs./ Unit ) 10.41 10.18 8.55 10.96 2.32 2.00 2.04 385 157 72 614 Energy Charge s (Rs. Crore) Total Charge s (Rs. Crore) 147 109 292 110 749 274 130 1811
GMR * Samalpatti* PPN* Madurai* ST-CMS ABAN Penna Total
*Not getting despatched under MOD

Table 256: Power purchase from IPPs approved by the Commission in FY 2014-15 Petition Source Units (MU ) GMR Samalpatti* PPN* Madurai* ST-CMS ABAN Penna Total 0 0 0 0 1844 375 810 3029 Capacity Charges (Rs. Crore) 183.54 134.12 330.50 143.89 364.21 123.29 65.16 1344.72 Energy Charge s (Rs./ Unit ) 0.00 0.00 0.00 0.00 2.51 1.99 2.01 2.31 Energy Charge s (Rs. Crore) 0.00 0.00 0.00 0.00 462.86 74.62 162.94 700.42 Total Charges (Rs. Crore) 183.54 134.12 330.50 143.89 827.07 197.90 228.10 2045.14 Units (MU ) 0 472 2103 455 1665 783 353 5830 Capacity Charges (Rs. Crore) 0.00 108.96 292.41 110.39 363.63 117.49 57.88 1050.76 Commission Energy Charge s (Rs./ Unit ) 0.00 10.18 8.55 10.96 2.32 2.00 2.04 385.39 156.54 72.15 614.08 Energy Charge s (Rs. Crore) Total Charge s (Rs. Crore) 0.00 108.96 292.41 110.39 749.03 274.03 130.03 1664.85
*Not getting despatched under MOD

Table 257: Power purchase from IPPs approved by the Commission in FY 2015-16 Petition Source Units (MU ) 0 0 0 0 1869 375 Capacity Charges (Rs. Crore) 192.72 140.83 347.03 151.09 382.42 129.45 Energy Charge s (Rs./ Unit ) 0.00 0.00 0.00 0.00 2.61 2.07 Energy Charge s (Rs. Crore) 0.00 0.00 0.00 0.00 487.90 77.60 Total Charges (Rs. Crore) 192.72 140.83 347.03 151.09 870.32 207.05 Units (MU ) 0 433 2103 455 1665 783 Capacity Charges (Rs. Crore) 0.00 99.88 292.41 110.39 363.63 117.49 Commission Energy Charge s (Rs./ Unit ) 0.00 10.18 8.55 10.96 2.32 2.00 385.39 156.54 Energy Charge s (Rs. Crore) Total Charge s (Rs. Crore) 0.00 99.88 292.41 110.39 749.03 274.03
GMR Samalpatti* PPN* Madurai* ST-CMS ABAN
Page 263 June 2013
Petition Source Units (MU ) 810 3054 Capacity Charges (Rs. Crore) 68.42 1411.96 Energy Charge s (Rs./ Unit ) 2.09 2.41 Energy Charge s (Rs. Crore) 169.46 734.96 Total Charges (Rs. Crore) 237.88 2146.92 Units (MU ) 353 5791 Capacity Charges (Rs. Crore) 57.88 1041.68
Commission Energy Charge s (Rs./ Unit ) 2.04 Energy Charge s (Rs. Crore) 72.15 614.08 Total Charge s (Rs. Crore) 130.03 1655.77
Penna Total
*Not getting despatched under MOD Non conventional energy sources and Captive power plants 4.199 TANGEDCO in its Petition has projected the power purchase expenses from non conventional energy sources and captive power plants considering a 5% escalation in per unit energy charges. 4.200 Commission has adopted the following approach for estimation of power purchase expenses from non conventional sources and captive power plants a) For existing purchase from renewable energy sources and captive power plants, Commission has considered the per unit energy charges for all the years of the second control period equal to that approved for FY 2012-13 based on TANGEDCOs provisional estimate of actual energy charges. For new cogeneration plants, Commission has assumed the energy and fixed charges in accordance to that approved by the Commission in its tariff order on determination of tariff for procurement of power from Bagasse based Cogeneration plants dated 31st July 2012.
b)
4.201 The power purchase expenses from renewable energy sources and captive power plants filed by TANGEDCO and approved by the Commission are tabulated below.
Table 258: Power purchase expenses from non conventional sources and CPP approved by the Commission for FY 2013-14 Petition Variable Total Cost Cost (Rs. Crore) (Rs./Unit ) 4.58 329 3.42 1818 4.98 398 4.08 1045 4.96 4.17 3.87 103 289 3983 Commission Variable Total Cost Cost (Rs. Crore) (Rs./Unit ) 3.94 234 3.12 2229 4.45 5 3.51 501 3.85 193 4.62 7 4.45 16 3.27 3186
Source Captive Wind Biomass Cogeneration New Cogeneration Plants Solar NTPC NVVN Total
Units (MU) 719 5320 799 2562 0 208 694 10302
Units (MU) 595 7145 11 1428 502 16 35 9732
Page 264 June 2013
Table 259: Power purchase expenses from non conventional sources and CPP approved by the Commission for FY 2014-15 Petition Variable Total Cost Cost (Rs. Crore) (Rs./Unit ) 4.8 363 3.59 5.23 4.28 5.21 4.38 4.12 2005 439 1306 400 304 4816 Commission Variable Total Cost Cost (Rs. Crore) (Rs./Unit ) 3.94 234 3.12 4.45 3.51 3.96 4.62 4.38 3.30 2229 5 501 318 7 15 3310
Units (MU) 755 5586 839 3049 0 768 694 11691
Units (MU) 595 7145 11 1428 802 16 35 10032
Table 260: Power purchase expenses from non conventional sources and CPP approved by the Commission for FY 2015-16 Petition Variable Total Cost Cost (Rs. Crore) (Rs./Unit ) 5.04 400 3.77 2210 5.49 484 4.5 1406 0 0 5.47 421 4.6 319 4.32 5239 Commission Variable Total Cost Cost (Rs. Crore) (Rs./Unit ) 3.94 234 3.12 2229 4.45 5 3.51 501 4 322 4.62 7 4.45 16 3.30 3315
Units (MU) 793 5866 881 3126 0 769 694 12128
Units (MU) 595 7145 11 1428 805 16 35 10035
Power purchase from traders and other sources 4.202 TANGEDCO has proposed the purchase of power from traders and estimated the expenses from that purchase by considering an escalation of 5% on per unit energy charges of FY 2012-13. However, TANGEDCO has not provided any information of sources from which the proposed purchase from traders is being procured. 4.203 TANGEDCO has later revised the cost of power procurement from bilateral to Rs. 5.13/unit in FY 2012-13 as against Rs. 3.12/unit estimated in Petition. Considering improved power availability and TANGEDCOs revised cost of power procurement from traders in FY 2012-13, Commission is not approving the additional power procurement from traders proposed by TANGEDCO. 4.204 In response to Commissions query on case 1 bidding, TANGEDCO has submitted that 500 MW of power is being procured under medium term through case-1 bidding from bilateral transactions with M/s National Energy Trading and Services (Lanco), M/s Adani Enterprises Ltd and M/s Jindal Power Limited.
4.205 Commission has approved the levellized tariff for procurement of power from these sources through orders on P.P.A.P. No. 7 of 2012 and P.P.A.P No. 1 of 2012 dated 17th April 2013 and 21st June 2012 respectively. Commission has considered the approved levellized tariffs in these orders for the purpose of estimation of power purchase expenses.
Table 261: Levelized tariff approved by the Commission for case-1 bidding Source M/s Jindal Power M/s Adani Power M/s Lanco Power Capacity (MW) 200 200 100 Duration June 16, 2013 to Nov 30, 2015 June 16, 2013 to Dec 31, 2015 June 16, 2013 to May, 2016 Levellized Tariff (in Rs./Unit) 4.92 4.99 4.88
4.206 Power from case-1 bidding is procured under two-part tariff. Commission has considered the capacity charges in Rs./Unit as per the quotation of the bidders and then arrived at the variable cost per unit by reducing the per unit capacity charges from the approved levellized tariff. The per unit capacity charges considered by the Commission is tabulated below.
Table 262: Capacity charges considered by the Commission for procurement of power under case-1 bidding (Rs./Unit) Source Jindal Power Adani Power Lanco Power FY 2013-14 2.11 1.50 1.72 FY 2014-15 2.20 1.69 2.45 FY 2015-16 2.35 1.75 2.45
4.207 The power purchase expenses approved by the Commission from the second control period from these sources are given below.
Table 263: Power purchase expenses approved for case 1-bidding and traders FY 2013-14 Source Traders Case - 1 Bidding Total 1413 3.28 463 Petition Total Cost (Rs./Unit ) 3.28 Commission Total Cost Total Cost (Rs./Unit ) (Rs. Crore) 4.94 4.94 1713 1713
Units (MU) 1413
Total Cost (Rs. Crore) 463
Units (MU) 3468 3468
Table 264: Power purchase expenses approved for case 1-bidding and traders FY 2014-15 Source Traders Case - 1 Bidding Total 804 3.44 277 Petition Total Cost (Rs./Unit ) 3.44 Commission Total Cost Total Cost (Rs./Unit ) (Rs. Crore) 4.94 4.94 2163 2163
Units (MU) 804
Total Cost (Rs. Crore) 277
Units (MU) 4380 4380
Page 266 June 2013
Table 265: Power purchase expenses approved for case 1-bidding and traders FY 2015-16 Source Traders Case - 1 Bidding Total Units (MU) 933 933 Petition Total Cost (Rs./Unit ) 3.62 3.62 Total Cost (Rs. Crore) 338 338 Units (MU) 3370 3370 Commissions Total Cost Total Cost (Rs./Unit ) (Rs. Crore) 4.94 4.94 1664 1664
Power Grid Corporation of India Limited (PGCIL) Charges 4.208 TANGEDCO has proposed PGCIL charges considering an escalation of 5%. In addition, TANGEDCO has proposed ABTPGCIL charges under PGCIL charges. In response to Commissions query, TANGEDCO has replied that they have inadvertently claimed ABTPGCIL charges under PGCIL charges and these charges correspond to UI. Hence, Commission is not approving these charges claimed by TANGEDCO as it has not considered UI as a source of power. Also, Commission is not considering the reactive energy charges and will revisit at the time of true-up. 4.209 It is pertinent to mention that with new CGS stations commissioning in FY 2013-14, the transmission charges are expected to increase due to increase in wheeled energy, Hence, Commission has considered the PGCIL wheeling charges in accordance with the submission of TANGEDCO from FY 2013-14 to FY 2015-16. The PGCIL Cost as approved by the Commission from FY 2013-14 to FY 2015-16 in this Order is tabulated below:
Table 266: PGCIL Charges approved by the Commission for the second control period - Rs. Cr Parameter PGCIL - SR and ER wheeling PGCIL - Reactive energy ABTPGCIL Total FY 2013-14 Petition Commission 578 578 19 0 345 942 578 FY 2014-15 Petition Commission 607 607 19 0 362 988 607 FY 2015-16 Petition Commission 637 637 21 0 380 1038 637
Intrastate Transmission Charges 4.210 TANGEDCO has claimed intrastate transmission charges for the second control period based on the ARR estimate as per TANTRANSCO Petition. 4.211 However, Commission has determined the transmission charges applicable to TANGEDCO considering approved ARR of TANTRANSCO in Order on T.P. No. 2 of 2013 and the allotted capacity of TANGEDCO. The intrastate transmission charges approved by the Commission for the second control period are given below.
Page 267 June 2013

Table 267: Transmission Charges payable to TANTRANSCO for the second control period (Rs. Cr.) 2013-14 Parameter Transmission charges payable to TANTRANSCO Petition 2329 Commission 1533 2014-15 Petition 2888 Commission 2850 2015-16 Petition 3629 Commission 3632
Merit order Dispatch 4.212 The Commission in accordance with Regulation 75 (1) of TNERC (Terms and Conditions for Determination of Tariff) Regulations, 2005 has determined the power purchase cost for various sources from which energy is available in FY 2012-13. Regulation 75(1) of the TNERC (Terms and Condition for Determination of Tariff) Regulation, 2005 states as under: 75. Cost of Power Purchase 1. The Distribution Licensee shall procure power on least cost basis and strictly on Merit Order Despatch and shall have flexibility to procure power from any source in the country. 4.213 For the purpose of determination of power purchase cost, the Commission has followed the methodology given below: i. ii. Energy available from Must-Run Power plants will be dispatched first Energy availability from Hydro generating plants will not be subjected to MoD
4.214 The Tamil Nadu Electricity Grid Code stipulates following guidelines for scheduling and despatch of power. 8. Scheduling and Despatch 2. (b) SLDC shall regulate the overall State generation in such a manner that generation from following types of power stations where energy potential, if unutilized, goes, as a waste shall not be curtailed Run of river or canal based hydro stations. Hydro-station where water level is at peak reservoir level or expected to touch peak reservoir level (as per inflows). Wind Power Stations and Renewable Energy Sources Nuclear Power Station
4.215 The total energy availability from must run power plants estimated by the Commission for the second control period is given below:
Page 268 June 2013
Table 268: Energy available from must run plants MUs Source CGS MAPS KAIGA Kundakulum PFBR Kalpakam Sub Total Wind (Private) Wind Mills TANGEDCO Cogeneration Solar NTPC NVVN Biomass Total 1568 1176 1663 0 4408 7145 12 1930 16 35 11 13557 1568 1176 4376 494 7614 7145 12 2230 16 35 11 17064 1573 1179 4388 792 7932 7145 12 2233 16 35 11 17384 1500 1125 1591 0 4216 7145 12 1930 16 35 11 13366 1500 1125 4186 473 7284 7145 12 2230 16 35 11 16733 1504 1128 4197 758 7587 7145 12 2233 16 35 11 17039 Power Procurement FY 2014 FY 2015 FY 2016 Energy Available at TN Periphery FY 2014 FY 2015 FY 2016
4.216 For hydro-energy generation, TANGEDCO will majorly incur only fixed expenses. Also, Commission is of the view that TANGEDCO can plan its energy despatch from hydro generation suitably meeting its load requirements. Hence, Commission has not subjected the energy available from hydro generating stations under MoD. The energy available from hydro generating stations is tabulated below.
Table 269: Energy available from Hydro Generation - in MUs Source Hydro Stations FY 2014 4844 FY 2015 4844 FY 2016 4844
4.217 After factoring in the energy available from all the above listed sources, the Commission has allowed the remaining energy to be purchased as per the energy requirement at Tamil Nadu periphery calculated by the Commission on Merit Order Ranking basis. For arriving at the energy available from CGS must run plants, Commission has considered an inter-state transmission loss of 4.34%. The energy required to be purchased on Merit Order Despatch basis is given below:
Table 270: Energy required to be purchased under MoD (Tamil Nadu periphery) - MUs Parameter Energy Requirement (TN Periphery) Less: Must run plants (CGS) Less: other Must run plants Less: Hydro Energy required to be purchased under MoD FY 2014 67515 4216 9150 4844 49305 FY 2015 73919 7284 9450 4844 52342 FY 2016 77374 7587 9452 4844 55491
Page 269 June 2013
4.218 The Commission has prepared the Merit Order Despatch on the basis of variable cost of various power plants. The Commission has considered Merit Order Despatch upto the energy requirement at TN periphery on the basis of calculation shown above. For the CGS plants Commission has assumed an inter-state loss of 4.34%. The power plants will be scheduled in accordance with the increasing trend of variable cost. On the basis of variable cost, following power plants will get despatched in accordance with Merit Order Ranking:
Table 271: Merit order ranking of available energy sources for FY 2013-14 Variable Cost (Rs./ Unit) 1.41 1.68 1.73 1.80 1.86 1.86 1.98 1.99 2.00 2.00 2.00 2.00 2.00 2.04 2.24 2.32 2.55 2.72 2.81 2.96 3.09 Energy available at TN Periphery (MUs) 3215 3781 1232 1406 711 665 3049 1489 783 4740 84 496 945 353 3469 1665 4494 5429 1387 7154 5992 Cumulative available energy (Mus) TN Periphery 3215 6996 8228 9634 10346 11011 14060 15549 16332 21072 21156 21651 22597 22950 26419 28083 32577 38006 39393 46547 52539 Energy to be purchased (TN Periphery) 3215 3781 1232 1406 711 665 3049 1489 783 4740 84 496 945 353 3469 1665 4494 5429 1387 7154 2759 Total Energy to be purchased (Mus) 3361 3952 1232 1470 711 665 3188 1556 783 4955 88 518 988 353 3469 1665 4494 5429 1387 7154 2759
Source NTPC Talcher NTPC SR (I&II) Vallathur Gas Power Plant NLC TS I Expansion TGTPS KGTPS NLC TS - II NTPC Simhadri ABAN NTPC Vallur NLC TS - II Expansion NLC - Tuticorin NTPC SR III Penna NLC TS - I ST-CMS NCTPS NCTPS Stage - II M/s Jindal Power TTPS MTPS
Table 272: Merit order ranking of available energy sources for FY 2014-15 Variable Cost (Rs./ Unit) 1.41 1.68 1.73 1.80 1.86 Energy available at TN Periphery (MUs) 3215 3781 1232 1406 711 Cumulative available energy (Mus) TN Periphery 3215 6996 8228 9634 10346 Energy to be purchased (TN Periphery) 3215 3781 1232 1406 711 Total Energy to be purchased (Mus) 3361 3952 1232 1470 711
Source NTPC Talcher NTPC SR (I&II) VGTPS NLC TS I Expansion TGTPS
Page 270 June 2013
Source KGTPS NLC TS - II NTPC Simhadri ABAN NTPC Vallur NLC TS - II Expansion NLC - Tuticorin NTPC SR III Penna NLC TS - I ST-CMS M/s Lanco Power NCTPS NCTPS Stage - II M/s Jindal Power TTPS
Variable Cost (Rs./ Unit) 1.87 1.98 1.99 2.00 2.00 2.00 2.00 2.00 2.04 2.24 2.32 2.43 2.55 2.61 2.72 2.96
Energy available at TN Periphery (MUs) 665 3049 1489 783 6785 1676 2529 945 353 3469 1665 876 4494 8176 1752 7154
Cumulative available energy (Mus) TN Periphery 11011 14060 15549 16332 23116 24792 27321 28266 28619 32088 33753 34629 39123 47299 49051 56204
Energy to be purchased (TN Periphery) 665 3049 1489 783 6785 1676 2529 945 353 3469 1665 876 4494 8176 1752 3291
Total Energy to be purchased (Mus) 665 3188 1556 783 7092 1752 2643 988 353 3469 1665 876 4494 8176 1752 3291
Table 273: Merit order ranking of available energy sources for FY 2015-16 Variable Cost (Rs./ Unit) 1.41 1.68 1.73 1.80 1.86 1.87 1.98 1.99 2.00 2.00 2.00 2.00 2.00 2.04 2.24 2.32 2.43 Energy available at TN Periphery (MUs) 3224 3791 1235 1410 713 667 3058 1493 783 6803 2124 2536 948 353 3478 1665 878 Cumulative available energy (MUs) TN Periphery 3224 7015 8251 9661 10374 11041 14099 15591 16374 23178 25302 27837 28785 29138 32617 34281 35160 Energy to be purchased (TN Periphery) 3224 3791 1235 1410 713 667 3058 1493 783 6803 2124 2536 948 353 3478 1665 878 Total Energy to be purchased (MUs) 3370 3963 1235 1474 713 667 3196 1560 783 7112 2220 2651 991 353 3478 1665 878
Source NTPC Talcher NTPC SR (I&II) VGTPS NLC TS I Expansion TGTPS KGTPS NLC TS - II NTPC Simhadri ABAN NTPC Vallur NLC TS - II Expansion NLC - Tuticorin NTPC SR III Penna NLC TS - I ST-CMS M/s Lanco Power
Page 271 June 2013
Source NCTPS M/s Jindal Power NCTPS Stage - II Ennore Expansion TTPS
Variable Cost (Rs./ Unit) 2.55 2.57 2.61 2.66 2.96
Energy available at TN Periphery (MUs) 4507 1171 8198 1049 7173
Cumulative available energy (MUs) TN Periphery 39666 40837 49035 50085 57258
Energy to be purchased (TN Periphery) 4507 1171 8198 1049 5406
Total Energy to be purchased (MUs) 4507 1171 8198 1049 5406
4.219 The fixed cost as per Regulations or PPA has been allowed for the Power Plants which are not scheduled as per Merit Order Despatch shown above. 4.220 The Merit Order Despatch shown above has been considered assuming an idealistic scenario in which the energy is available from all the Power Plants listed in the Merit Order Ranking throughout the year. However due to following reasons, TANGEDCO may require to draw power from other available sources based on MOD principle. a) Availability of energy is considered on annual basis and there could be differences on monthly/daily basis. b) Restriction of power flow from other regions due to corridor constraints. c) Delay in commissioning of new CGS and own generating stations d) With reduced load shedding, the demand may increase and exceed the consumption estimates e) During non wind seasons, the availability from WEGs might decrease resulting in demand-supply mismatch. 4.221 Hence, Commission allows TANGEDCO to draw power from the other available regulated sources during these circumstances. However, TANGEDCO shall follow the MOD and optimize the power purchase cost on the basis of Merit Order Ranking. Commission directs TANGEDCO to use the energy availability from its hydro power plants judiciously in order to address the short fall of energy availability during non wind seasons. 4.222 Commission is of the view that TANGEDCO should project power availability for shorter time intervals such as monthly to arrive at short term power management using the sources listed above leading to overall optimization of power purchase cost. This time interval for projection could be reduced to a fortnight or ten days in due course 4.223 In this context, Commission directs TANGEDCO to provide the monthly energy demand and availability and its plan of scheduling power in accordance to MoD on quarterly basis. For power procurement with variable cost more than Rs. 3.50 per unit from unapproved sources and sources not getting dispatched under MoD, TANGEDCO is directed to take prior approval of the Commission before purchasing energy.
Page 272 June 2013
Summary of power purchase costs 4.224 The summary of power purchase costs approved by the Commission for the second control period from own generation and other sources after considering MoD is tabulated below:
Table 274: Summary of power purchase cost approved by the Commission for FY 2013-14 Petition Source Units (MU) Capac ity Charg es (Rs. Crore) Energy Charge s (Rs./ Unit ) Energy Charges (Rs. Crore) Total Cost (Rs. Crore) Units (MU) Commission Capacity Charges (Rs. Crore) Energy Charge s (Rs./ Unit ) Energ y Charg es (Rs. Crore) Total Cost (Rs. Crore)
Own Generating Stations Coal Based Power Plants ETPS TTPS MTPS NCTPS Sub Total Gas Based Power Plants TGTPS KGTPS VGTPS BBGTPS Sub Total Hydro Genration Circles Erode Kundah Tirunelveli Kadamparai Wind Mills Sub Total Existing Stations New Stations NCTPS Stage - II MTPS Stage III Ennore Expansion Sub Total Total - Own Generating
987 6963 5990 4502 18442
227 542 308 541 1619
4.35 3.19 3.04 2.59 3.06
429 2224 1823 1164 5640
656 2766 2131 1705 7259 7154 2758 4494 14406
258 436 300 359 1354
3.87 2.96 3.09 2.55 2.86
0 2118 853 1145 4115
258 2554 1153 1504 5469
669 614 1211 59 2554
117 90 154 116 476
2.17 2.06 3.39 15.71 3.04
145 126 411 93 776
262 217 565 209 1252
711 665 1232 2609
79 89 157 116 441
1.86 1.86 1.73 12.49 1.80
132 124 213 0 469
212 213 370 116 910
285 5768 173 151 82 0.00 26764 2785 0.00 2.40
0 0 3 0 0 6419
285 173 154 82 0 9204 12.00 21870 4844
218 202 101 76 2.75 2392 2.10
0 0 0 0 3 4588
218 202 102 76 3 6980
6387 3587 0 9974 36738
895 773 0 1668 4453
3.30 3.74 0.00 3.46 2.69
2110 1342
3005 2115
5429
602 343
2.72 3.15
1476 0
2078 343
0 3452 9871 5120 14324 5429 27298
0 945 3337 2.72 2.22 1476 6064 2421 9401
Page 273 June 2013
Petition Source Units (MU) Capac ity Charg es (Rs. Crore) Energy Charge s (Rs./ Unit ) Energy Charges (Rs. Crore) Total Cost (Rs. Crore) Units (MU)
Commission Capacity Charges (Rs. Crore) Energy Charge s (Rs./ Unit ) Energ y Charg es (Rs. Crore) Total Cost (Rs. Crore)
Stations Central Generation Stations NTPC SR (I&II) NTPC SR III NLC TS - I NLC TS - II NLC TS I Expansion NTPC Talcher NTPC Simhadri MAPS KAIGA NTPC ER NTPC Dadri NTPC Vallur Kudankulam PFBR Kalpakkam NLC TS - II Expansion NLC Tuticorin Sub Total IPPs GMR Samalpatti PPN Madurai ST-CMS ABAN Penna Sub Total Renewable Energy Sources and CPP Captive Wind Biomass Cogeneration 0 0 0 0 1819 375 759 2953 175 128 315 137 347 117 62 1281 0.00 0.00 0.00 0.00 2.41 1.91 1.93 2.23 0 0 0 0 439 72 147 658 175 128 315 137 786 189 209 1938 1665 783 353 2800 147 109 292 110 364 117 58 1197 10.41 10.18 8.55 10.96 2.32 2.00 2.04 2.19 0 0 0 0 385 157 72 614 147 109 292 110 749 274 130 1811
4164 1074 2937 3450 1749 3567 638 1986 1278 0 599 4676 2426 0 1449 257 30250
240 97 171 217 234 313 81 0 0 48 17 0 0 0 0 0 1418
1.72 2.02 1.79 2.10 1.96 2.21 2.37 2.15 3.38 0.00 2.84 3.64 3.64 0.00 3.64 3.50 2.54
715 217 526 724 343 789 151 428 432 0 170 1703 883
955 314 697 941 578 1102 232 428 432 48 187 1703 883
3952 988 3469 3188 1470 3361 1556 1568 1176 0 0 4955 1663 0
227 92 292 177 194 278 271 0 0 0 0 743 0 0 13 78 2366
1.68 2.00 2.24 1.98 1.80 1.41 1.99 2.04 3.02 0.00 0.00 2.00 3.02 3.02 2.00 2.00 2.01
664 198 777 631 265 474 310 320 355 0 0 991 502 0 18 104 5608
891 290 1069 808 459 752 581 320 355 0 0 1734 502 0 31 181 7973
527 90 7697
527 90 9116
89 518 27954
719 5320 799 2562
0 0 0 0
4.58 3.42 4.98 4.08
329 1818 398 1045
329 1818 398 1045 7145 11 1428
3.94 3.12 4.45 3.51
0 2229 5 501
0 2229 5 501
Page 274 June 2013
Petition Source Units (MU) Capac ity Charg es (Rs. Crore) 0 0 Energy Charge s (Rs./ Unit ) 0.00 4.96 3.84 Energy Charges (Rs. Crore) 0 103 3694 Total Cost (Rs. Crore) 0 103 3694 Units (MU)
Commission Capacity Charges (Rs. Crore) Energy Charge s (Rs./ Unit ) 3.85 4.62 3.23 Energ y Charg es (Rs. Crore) 194 7 2936 Total Cost (Rs. Crore) 194 7 2936
New Cogeneration Plants Solar Sub Total Other Sources Trading Bilateral & Exchange Jindal Power Adani Power Lanco Power UI NTPC NVVN Sub Total Total - Other Power Purchase Transmission Charges PGCIL - ER & SR PGCIL Reactive Energy Charges ABTPCIL Sub Total Grand Total
0 208 9608
502 16 9102
1413 0 0 0 0 694 2107 44917 2699
3.28 0.00 0.00 0.00 0.00 4.17 3.57 2.85
463 0
463 0
0 1387
0 293 208 119
0.00 2.81 3.49 3.16 0.00 4.45 2.85 2.32
0 389 0 0 0 16 405 9563
0 682 208 119 0 16 1025 13746
0 289 753 12801
0 289 753 15500
0 35 1423 41279
0 0 620 4183
578
578
19 345 942 81656 7152 2.78 22672 30766 68578 7521 2.28 15627
0 0 578 23726
Own Generating Stations Coal Based Power Plants ETPS TTPS MTPS
959 7096 5990
251 587 335
4.57 3.35 3.26
438 2380 1952
689 2966 2286 3291
268 449 320
3.87 2.96 3.09
0 974 0
268 1424 320
Page 275 June 2013
Petition Source Units (MU) 4639 18684 Capac ity Charg es (Rs. Crore) 559 1731 Energy Charge s (Rs./ Unit ) 2.72 3.23 Energy Charges (Rs. Crore) 1260 6029 Total Cost (Rs. Crore) 1819 7760 Units (MU) 4494 7785
Commission Capacity Charges (Rs. Crore) 368 1406 Energy Charge s (Rs./ Unit ) 2.55 2.72 Energ y Charg es (Rs. Crore) 1145 2119 Total Cost (Rs. Crore) 1513 3525
NCTPS Sub Total Gas Based Power Plants TGTPS KGTPS VGTPS BBGTPS Sub Total Hydro Genration Circles Erode Kundah Tirunelveli Kadamparai Wind Mills Sub Total Existing Stations New Stations NCTPS Stage - II MTPS Stage III Ennore Expansion Sub Total Total - Own Generating Stations Central Generation Stations NTPC SR (I&II) NTPC SR III NLC TS - I NLC TS - II NLC TS I Expansion NTPC Talcher NTPC Simhadri MAPS
694 614 1173 59 2541
118 91 151 117 475
2.28 2.16 3.56 16.49 3.18
158 133 418 98 807
276 223 569 215 1282
711 665 1232 2609
79 88 156 47 370
1.86 1.87 1.73 12.49 1.80
133 124 213 0 469
212 212 369 47 840
284 5801 191 149 95 0 27026 2926 0 2.53
0 0 3 0 0 6839
284 191 153 95 0 9765 12 15250 4844
332 202 114 77 2.75 2501 1.70
0 0 0 0 3 2592
332 203 114 77 3 5093
7774 3990 0 11764 38790
1142 752 0 1894 4820
3.47 3.93 0.00 3.62 2.86
2697 1567
3839 2319
8176
1031 596
2.61 3.03
2130 0
3162 596
0 4264 11103 6158 15923 8176 23426
0 1628 4129 2.61 2.02 2130 4723 3758 8851
4164 1074 2937 3450 1749 3567 678 1986
252 102 180 228 246 329 85 0
1.79 2.10 1.86 2.18 2.04 2.30 2.46 2.24
744 226 547 753 357 820 167 445
995 328 726 981 603 1149 252 445
3952 988 3469 3188 1470 3361 1556 1568
227 92 292 177 194 278 271 0
1.68 2.00 2.24 1.98 1.80 1.41 1.99 2.04
664 198 777 631 265 474 310 320
891 290 1069 808 459 752 581 320
Page 276 June 2013
Petition Source Units (MU) 1278 0 638 6704 4316 0 1546 1219 35307 0 0 0 0 1844 375 810 3029 Capac ity Charg es (Rs. Crore) 0 50 17 0 0 0 0 0 1489 184 134 331 144 364 123 65 1345 Energy Charge s (Rs./ Unit ) 3.51 0.00 2.95 3.75 3.81 0.00 3.79 3.64 2.80 0.00 0.00 0.00 0.00 2.51 1.99 2.01 2.31 585 444 9884 0 0 0 0 463 75 163 700 585 444 11373 184 134 331 144 827 198 228 2045 1665 783 353 2800 Energy Charges (Rs. Crore) 449 0 188 2514 1645 Total Cost (Rs. Crore) 449 50 206 2514 1645 Units (MU) 1176 0 0 7092 4376 494 1752 2643 37086 0
Commission Capacity Charges (Rs. Crore) 0 0 0 1064 0 0 263 397 3255 0 109 292 110 364 117 58 1051 Energy Charge s (Rs./ Unit ) 3.02 0.00 0.00 2.00 3.02 3.02 2.00 2.00 2.09 0.00 10.18 8.55 10.96 2.32 2.00 2.04 2.19 Energ y Charg es (Rs. Crore) 355 0 0 1418 1321 149 350 529 7761 0 0 0 0 385 157 72 614 Total Cost (Rs. Crore) 355 0 0 2482 1321 149 613 925 11016 0 109 292 110 749 274 130 1665
KAIGA NTPC ER NTPC Dadri NTPC Vallur Kudankulam PFBR Kalpakkam NLC TS - II Expansion NLC Tuticorin Sub Total IPPs GMR Samalpatti PPN Madurai ST-CMS ABAN Penna Sub Total Renewable Energy Sources and CPP Captive Wind Biomass Cogeneration New Cogeneration Plants Solar Sub Total Other Sources Trading Bilateral & Exchange Jindal Power Adani Power Lanco Power UI NTPC NVVN
755 5586 839 3049 0 768 10997
4.80 3.59 5.23 4.28 0.00 5.21 4.10
363 2005 439 1306 0 400 4512
363 2005 439 1306 0 400 4512 7145 11 1428 802 16 9402
3.94 3.12 4.45 3.51 3.96 4.62 3.26
0 2229 5 501 318 7 3061
0 2229 5 501 318 7 3061
804 0 0 0 0 694
3.44 0.00 0.00 0.00 0.00 4.38
277 0 0 0 0 304
277 0 0 0 0 304
0 1752 876 0 35
0 385 296 215 0 0
3.44 2.72 3.30 2.43 0.00 4.38
0 476 0 213 0 16
0 861 296 428 0 16
Page 277 June 2013
Petition Source Units (MU) 1498 50831 2834 Capac ity Charg es (Rs. Crore) Energy Charge s (Rs./ Unit ) 3.88 3.08 Energy Charges (Rs. Crore) 581 15677 Total Cost (Rs. Crore) 581 18511 Units (MU) 2663 51952
Commission Capacity Charges (Rs. Crore) 896 5202 Energy Charge s (Rs./ Unit ) 2.65 2.34 Energ y Charg es (Rs. Crore) 705 12140 Total Cost (Rs. Crore) 1601 17342
Sub Total Total - Other Power Purchase Transmission Charges PGCIL - ER & SR PGCIL Reactive Energy Charges ABTPCIL Sub Total Grand Total
607
607
20 362 989 89621 7654 2.99 26780 35423 75378 9330 2.24 16863
0 0 607 26800
Own Generating Stations Coal Based Power Plants ETPS TTPS MTPS NCTPS Sub Total Gas Based Power Plants TGTPS KGTPS VGTPS BBGTPS Sub Total Hydro Genration Circles Erode Kundah
920 7200 5990 4640 18749
264 592 351 536 1744
4.80 3.52 3.42 2.85 3.39
441 2535 2049 1323 6348
705 3127 2401 1859 8092 4507 9913 5406
274 471 343 379 1466
3.87 2.96 3.09 2.55 2.77
0 1601 0 1148 2748
274 2071 343 1527 4215
697 593 1191 59 2540
114 88 146 114 462
2.39 2.27 3.74 17.32 3.34
167 135 445 103 850
281 223 592 216 1312
713 667 1235 2616
79 87 156 45 367
1.86 1.87 1.73 12.49 1.80
133 125 213 0 471
212 211 369 45 838
6353
275 201
0 0
275 201
4844
337 204
0 0
337 204
Page 278 June 2013
Petition Source Units (MU) Capac ity Charg es (Rs. Crore) 150 107 0 27643 2939 0.00 2.61 Energy Charge s (Rs./ Unit ) Energy Charges (Rs. Crore) 3 0 0 7202 Total Cost (Rs. Crore) 153 107 0 10140 12 17384 2570 Units (MU)
Commission Capacity Charges (Rs. Crore) 118 78 2.75 1.85 Energy Charge s (Rs./ Unit ) Energ y Charg es (Rs. Crore) 0 0 3 3223 Total Cost (Rs. Crore) 119 78 3 5793
Tirunelveli Kadamparai Wind Mills Sub Total Existing Stations New Stations NCTPS Stage - II MTPS Stage III Ennore Expansion Sub Total Total - Own Generating Stations Central Generation Stations NTPC SR (I&II) NTPC SR III NLC TS - I NLC TS - II NLC TS I Expansion NTPC Talcher NTPC Simhadri MAPS KAIGA NTPC ER NTPC Dadri NTPC Vallur Kudankulam PFBR Kalpakkam NLC TS - II Expansion NLC Tuticorin Sub Total IPPs GMR Samalpatti 0 0
8275 4240 1058 13573 41216
1082 728 333 2143 5081
3.64 4.12 2.57 3.71 2.97
3014 1748 272 5034 12236
4096 2476 604 7177 17317
8198
1014 584
2.61 3.03 2.66 2.61 2.12
2136 0 279 2415 5638
3151 584 403 4138 9931
1049 9247 26632
124 1723 4293
4164 1074 1469 3450 1749 3567 678 1986 1278 0 678 7141 5544 0 1642 1300 35721
264 107 189 240 258 345 90 0 0 53 18 0 0 0 0 0 1564 193 141
1.86 2.19 1.94 2.27 2.12 2.39 2.56 2.33 3.65 0.00 3.07 3.90 3.90 0.00 3.94 3.79 2.99 0.00 0.00
774 235 284 783 371 853 174 462 467 0 208 2785 2162
1038 342 473 1023 630 1198 263 462 467 53 227 2785 2162
3963 991 3478 3196 1474 3370 1560 1573 1179 0 0 7112 4388 792
227 92 292 177 194 278 271 0 0 0 0 1067 0 0 333 398 3329 0 100
1.68 2.00 2.24 1.98 1.80 1.41 1.99 2.04 3.02 0.00 0.00 2.00 3.02 3.02 2.00 2.00 2.10 0.00 10.18
666 198 779 633 265 475 311 321 356 0 0 1422 1325 239 444 530 7965 0 0
893 290 1071 809 460 753 582 321 356 0 0 2489 1325 239 777 928 11294 0 100
647 492 10698 0 0
647 492 12261 193 141
2220 2651 37948 0
Page 279 June 2013
Petition Source Units (MU) 0 0 1869 375 810 3054 Capac ity Charg es (Rs. Crore) 347 151 382 129 68 1412 Energy Charge s (Rs./ Unit ) 0.00 0.00 2.61 2.07 2.09 2.41 Energy Charges (Rs. Crore) 0 0 488 78 169 735 Total Cost (Rs. Crore) 347 151 870 207 238 2147 1665 783 353 2800 Units (MU)
Commission Capacity Charges (Rs. Crore) 292 110 364 117 58 1042 Energy Charge s (Rs./ Unit ) 8.55 10.96 2.32 2.00 2.04 2.19 Energ y Charg es (Rs. Crore) 0 0 385 157 72 614 Total Cost (Rs. Crore) 292 110 749 274 130 1656
PPN Madurai ST-CMS ABAN Penna Sub Total Renewable Energy Sources and CPP Captive Wind Biomass Cogeneration New Cogeneration Plants Solar Sub Total Other Sources Trading Bilateral & Exchange Jindal Power Adani Power Lanco Power UI NTPC NVVN Sub Total Total - Other Power Purchase Transmission Charges PGCIL - ER & SR PGCIL Reactive Energy Charges ABTPCIL Sub Total Grand Total
793 5866 881 3126 0 769 11434
5.04 3.77 5.49 4.50 0.00 5.47 4.30
400 2210 484 1406 0 421 4920
400 2210 484 1406 0 421 4920 7145 11 1428 805 16 9405
3.94 3.12 4.45 3.51 4.00 4.62 3.26
0 2229 5 501 322 7 3065
0 2229 5 501 322 7 3065
933 0 0 0 0 694 1627 51836 2976
3.62 0.00 0.00 0.00 0.00 4.60 4.03 3.28
338 0 0 0 0 319 657 17009
338 0 0 0 0 319 657 19985
0 1171 878 0 35 2085 52238
0 275 231 215 0 0 721 5092
0.00 2.57 3.24 2.43 0.00 4.45 2.54 2.33
0 301 0 214 0 16 530 12174
0 576 231 429 0 16 1252 17266
637
637
21 380 1038 93052 8057 3.14 29245 38340 78870 9385 2.26 17812
0 0 637 27834
Page 280 June 2013
Aggregate Revenue Requirement for the second control period

4.225 Regulation 70 of the Tariff Regulations 2005 specifies the following: 70. The Aggregate Revenue Requirement of Distribution licensee The Aggregate Revenue Requirement of Distribution licensee consists of thefollowing:(i) Cost of Power Purchase (ii) Operation and Maintenance expenses (iii) Depreciation (iv) Interest and cost of finance (v) Income Tax (vi) Provision for Bad and Doubtful Debts (vii) Provision for Insurance (viii) Provision for contingency reserve (ix) other expenses (x) Return on equity / Reasonable rate of return 4.226 Based on the approved expenses in the above sections of this Chapter, the Aggregate Revenue Requirement approved by the Commission for the second control period is tabulated below:
Table 277: ARR approved by the Commission for the second control period (Rs. Cr.) Parameter Expenses in respect of own Generation Power Purchase Cost Annual Transmission Charges payable to TANTRANSCO Operation and Maintenance Expenses Depreciation Interest on Long term loan Other Debits Prior Period Expenses Return on Equity Interest on Working Capital Contribution to Contingency Reserves ARR 2013-14 14324 16442 2329 4100 328 2238 30 0 405 808 75 41079 Petition 2014-15 15923 19499 2888 4582 388 2376 36 0 601 1237 89 47618 2015-16 17317 21023 3629 5276 530 2495 38 0 966 1387 122 52784 2013-14 9401 14324 1533 3779 362 1525 20 0 0 0 0 30945 Commission 2014-15 2015-16 8851 17949 2850 4068 435 1740 26 0 0 0 0 35918 9931 17903 3632 4396 519 1938 28 0 0 0 0 38347
Page 281 June 2013
Non Tariff Income (NTI) and Other Income 4.227 The NTI has been approved by the Commission based on the same methodology as done for FY 2012-13. The Commission has used the same year on year escalation rate and based on its estimates for FY 2012-13, approved NTI for the second control period. 4.228 TANGEDCO in its petition has filed Other Income for FY 2013-14 to FY 2015-16 separately for Generation and Distribution business. The Commission based on its approach followed for the first control period has approved the Other Income as filed by TANGEDCO for the said years. The non tariff income and other income approved by the Commission for the distribution business is tabulated below.
Table 278: Non Tariff and Other Income approved by the Commission for the second control period (Rs. Cr) Particulars Non Tariff Income Other Income Total Petition 2013-14 737.23 303.47 1040.70 2014-15 789.14 341.00 1130.14 2015-16 844.82 363.54 1208.36 2013-14 634.61 303.47 938.08 Approved 2014-15 679.98 341.00 1020.98 2015-16 728.70 363.54 1092.24
Higher interest expenses due to abnormal Capitalization 4.229 In its Petition, TANGEDCO has proposed capital expenditure of around Rs. 16 Cr/MW Rs. 18 Cr/MW for its new hydro stations.
Table 279: Capital expenditure for new hydro stations as per TANGEDCO MYT Petition (Rs. Cr) Name of Power Plant Bhavani Barrage II Bhavani Kattalai Barrage II Periyar Vaigai I Periyar Vaigai II Installed Capacity (in MW) 2 x 5 MW = 10 MW 2 x 15 MW = 30 MW 2 x 2 MW = 4 MW 2 x 1.25 MW = 2.5 MW Cost as on COD 187.61 Crores 497.46 Crores 62.00 Crores 48.29 Crores
4.230 In the revised capital expenditure and capitalization information submitted by TANGEDCO, the capitalization of these hydro generating stations is shown around Rs. 23Cr/MW to Rs. 33 Cr/MW. Commission is of the view that the proposed capital cost is extremely high compared to industry norms. Inspite of repeated directions, TANGEDCO has not filed any Petition for the approval of the capital cost of new hydro stations. In view of this, Commission has disallowed the interest expenses on higher capitalization considering the capital cost of Rs. 5.50 Crs/MW for small hydro plants in accordance with CERC RE Tariff regulations. The disallowed capitalization and interest expenses for the second control period are given below.
Table 280: Capital cost as per revised filing and CERC norms Power Plant Capitalization (Rs. Cr) 2013-14 Bhavani Barrage Bhavani Katlai Periyar 307.18 837.02 125.88 2014-15 22.34 7.59 26.06 Total 329.52 844.61 151.94 10.00 30.00 6.50 32.95 28.15 23.37 Capacity (MW) Cost (Rs. Cr /MW) CERC Norms Cost Rs. Cost Rs. Cr/MW Cr 5.50 55.00 5.50 5.50 165.00 35.75
Table 281: Disallowed Capitalization and Capital Cost Power Plant Bhavani Barrage Bhavani Katlai Periyar Disallowed Capital Cost (Rs. Cr) 274.52 679.61 116.19 Disallowed Capitalization (Rs. Cr) FY 2013-14 FY 2014-15 255.91 18.61 673.50 6.11 96.26 19.93
Table 282: Disallowed Interest Expenses (Rs. Cr) Power Plant Bhavani Barrage Bhavani Katlai Periyar Total FY 2013-14 15.33 40.35 5.77 61.45 FY 2014-15 31.78 81.07 12.73 125.57 FY 2014-15 32.89 81.43 13.92 128.25
Note: Interest expenses have been disallowed considering interest rate of 11.98%, estimated based on average interest rate for FY 2010-11 and FY 2011-12 4.231 Based on the above submissions, the net ARR approved for the second control period is tabulated below:
Table 283: Net Revenue Requirement approved by the Commission for the second control period (Rs. Cr.) Parameter Aggregate Revenue requirement Less: Other income and NTI Less: Higher interest expenses Net Revenue Requirement Petition 2013-14 41079 1041 0 40038 2014-15 47618 1130 0 46488 2015-16 52784 1208 0 51576 2013-14 30945 938 61 29946 Commission 2014-15 35918 1021 126 34771 2015-16 38347 1092 128 37127
Page 283 June 2013
A5:
ESTIMATION OF REVENUE DETERMINATION FOR FY 2013-14
GAP
AND
TARIFF
Revenue from Sale of Power FY 2013-14 5.1 The following table details the revenue at existing and proposed tariff as revised and filed by TANGEDCO for FY 2013-14 in its reply to data gaps.
Table 284: Revised filing of revenue at existing and proposed tariff for FY 2013-14 Existing Tariff Proposed Tariff
Particulars
Rs. Crores Rs. Crores HT Consumer Category HT Industries Railway Traction Govt. Educational Inst. etc. Pvt. Educational Inst. etc. HT Commercial Lift Irrigation Others Temporary supply Total HT LT Consumer Category Domestic Huts LT bulk supply Public Lighting and Water Supply Govt. Educational Inst. etc. Pvt. Educational Inst. etc. Places of Public Worship Cottage and Tiny Industries Power Looms L.T. Industries L.T. Agriculture L.T. Commercial Temporary supply Total LT Total HT + LT
I-A I-B II-A II-B III IV V VI
5,616 519 560 175 1,387 2 338 186 8,783 7,137 105 4 963 74 163 71 53 460 2,996 2,005 4,130 50 18,211 26,993
5,616 519 560 175 1,387 2 338 186 8,783 7,137 220 4 963 74 163 71 53 460 2,996 2,864 4,130 50 19,184 27,967
5.2
The Commission based on its revised estimation of sales, consumer load and number of connections has calculated the revenue from sale of power based on the existing and proposed tariff filed by TANGEDCO in its petition.
Page 284 June 2013
5.3
TANGEDCO has proposed to revise the tariffs of LT I-B and LT IV categories. It is pertinent to mention that the cost of entire consumption on account of huts as well as on account of agricultural consumption is being borne by the Government of Tamil Nadu by way of subsidy under Section 65 of the Electricity Act 2003. In this matter, GoTN has given commitment letter No. 2369/A1/2013 dated 10th June 2013 detailing provision of tariff subsidy to LT IB and LT IV categories of electricity consumers. GoTN has also stated that the budget provision for necessary additional expenditure has already been made in the budget for the year FY 2013-14 and a formal order of GoTN in this regard will be issued shortly. Hence, the additional revenue from the proposed tariff increase will be fully received as Government subsidy. The categorywise revenue including subsidy approved by the Commission for FY 2013-14 is tabulated below.
Table 285: Revenue from sales as approved by the Commission at existing and proposed tariff for FY 2013-14 Existing Tariff Proposed Tariff
Particulars
Rs. Crores Rs. Crores HT Consumer Category I-A I-B II-A II-B III IV V HT Industries Railway Traction Govt. Educational Inst. etc. Pvt. Educational Inst. etc. HT Commercial Lift Irrigation Temporary supply Total HT LT Consumer Category Domestic Huts LT bulk supply Public Lighting and Water Supply Govt. Educational Inst. etc. Pvt. Educational Inst. etc. Places of Public Worship Cottage and Tiny Industries Power Looms L.T. Industries L.T. Agriculture L.T. Commercial Temporary supply Total LT Total HT + LT 6,199 529 561 175 1,399 2 187 9,052 6,876 106 4 963 75 162 71 57 460 2,998 1,980 4,159 50 17,962 27,014 6,199 529 561 175 1,399 2 187 9,052 6,876 222 4 963 75 162 71 57 460 2,998 2,829 4,159 50 18,926 27,978
Page 285 June 2013
5.4
Therefore the Revenue from sale of power for FY 2013-14 approved by the Commission is Rs. 27,014 Crores and Rs. 27,978 Crores at the existing and proposed tariff. This revenue is inclusive of the Government subsidy component. Commission envisages additional revenue of Rs. 964 Cr from the proposed tariff increase. The Retail Tariff for various consumer categories as proposed by TANGEDCO and approved by the Commission is as follows.
Table 286: Existing and Approved retail tariff schedule for FY 2013-14 Existing Tariff Energy Demand Charges Charges/ Fixed Rs./kWh Charge Low Tension Approved Tariff Energy Demand Charges Charges/ Fixed Rs./kWh Charge
5.5
Category LT - IA
Slabs (Per Month) Domestic 1-50 kWh 1-100 kWh Above 100 kWh - Upto 250 kWh
Sub Category
2.60 2.80 0-100 kWh 3.00
10 Rs per month 10 Rs per month 15 Rs per month
2.60 2.80 3.00
10 Rs per month 10 Rs per month 15 Rs per month
101-250 kWh Above 250 kWh 0-100 kWh
4.00 3.00
15 Rs per month 20 Rs per month
4.00 3.00
101-250 kWh Above 250 kWh LT - IB Huts
4.00 5.75
4.00 5.75
Single Slab LT bulk supply Single Slab Public Lighting and Water Supply Single Slab Govt. Educational Inst. etc. Single Slab
2.5 (On Installati on of Energy Meter)
60 Rs/kW per month
4.3 (On Installati on of Energy Meter)
125 Rs per month
LT - IC
4.00
50 Rs per month
4.00
50 Rs per month
LT - IIA
5.50
0 Rs per month
5.50
0 Rs per month
LT - IIB (1)
5.00
50 Rs/kW per
5.00
50 Rs/kW per
Page 286 June 2013
Category
Slabs (Per Month)
Sub Category
Existing Tariff Energy Demand Charges Charges/ Fixed Rs./kWh Charge month
Approved Tariff Energy Demand Charges Charges/ Fixed Rs./kWh Charge month
LT - IIB (2)
Pvt. Educational Inst. etc. Single Slab Places of Public Worship 0-60 kWh Above 60 kWh Cottage and Tiny Industries 0-250 kWh Above 250 kWh 3.50 4.00 15 Rs/kW per month 15 Rs/kW per month 3.50 4.00 15 Rs/kW per month 15 Rs/kW per month 5.00 5.00 50 Rs/kW per month 50 Rs/kW per month 5.00 5.00 50 Rs/kW per month 50 Rs/kW per month 6.50 50 Rs/kW per month 6.50 50 Rs/kW per month
LT - IIC
LT IIIA (1)
LT IIIA (2)
Power Looms 0-250 kWh Above 250 kWh 4.50 5.00 50 Rs/kW per month 50 Rs/kW per month 4.50 5.00 50 Rs/kW per month 50 Rs/kW per month
LT IIIB
L.T. Industries Single Slab L.T. Agriculture 1.3 (On Installati on of Energy Meter) 2.8 (On Installati on of Energy Meter) 5.50 30 Rs/kW per month 5.50 30 Rs/kW per month
LT - IV
Single Slab L.T. Commercial 0-50 kWh All Units
1750 Rs/HP/Annum
2500 Rs/HP/Annum
LT - V
4.30 7.00
60 Rs/kW per month 60 Rs/kW per
4.30 7.00
60 Rs/kW per month 60 Rs/kW per
Page 287 June 2013
Category
Slabs (Per Month)
Sub Category
Existing Tariff Energy Demand Charges Charges/ Fixed Rs./kWh Charge month
Approved Tariff Energy Demand Charges Charges/ Fixed Rs./kWh Charge month
LT - VI
Temporary supply Single Slab 10.50 100 Rs/kW/Day* 10.50 300 Rs/kW per month
High Tension HT - IA HT Industries Single Slab Railway Traction Single Slab Govt. Educational Inst. etc. Single Slab Pvt. Educational Inst. etc. Single Slab HT Commercial Single Slab Lift Irrigation Societies Single Slab Temporary supply Single Slab 9.50 300 Rs/kVA per month 9.50 300 Rs/kVA per month 3.50 0 Rs/kVA per month 3.50 0 Rs/kVA per month 7.00 300 Rs/kVA per month 7.00 300 Rs/kVA per month 5.50 300 Rs/kVA per month 5.50 300 Rs/kVA per month 4.50 300 Rs/kVA per month 4.50 300 Rs/kVA per month 5.50 250 Rs/kVA per month 5.50 250 Rs/kVA per month 5.50 300 Rs/kVA per month 5.50 300 Rs/kVA per month
HT - IB
HT - IIA
HT - IIB
HT - III
HT - IV
HT - V
*Minimum Charges
Page 288 June 2013
Revenue gap and determination of Regulatory Asset

5.6 TANGEDCO in its Petition has projected revenue gap to be recovered based on, Final true-up for FY 11 Provisional true-up for FY 12 Annual Performance Review for FY 13 Aggregate Revenue Requirement for FY 14
Table 287: Consolidated Revenue Gap calculated by TANGEDCO (Rs. Crores) Particulars Aggregate Revenue Requirement Less : Non Tariff Income Less : Other Income Less : Other Income from Generation Aggregate Revenue Requirement Total Revenue including Subsidy Revenue Gap at Existing Tariff Petition 2010-11 13,415 217 93 0 13,105 7,332 5,773 2011-12 34,431 644 141 2 33,645 18763 14,882 2012-13 36,247 689 132 0 35,426 25,707 9,719 2013-14 41,079 737 303 0 40,039 29,695 10,344
Table 288: Additional revenue gap arrived by TANGEDCO in its petition (Rs. Crores) Year 2010-11 2011-12 2012-13 2013-14 Total Gap Approved by Commission last year 4,187 13,409 -6 0 17,590 Gap Arrived in this Petition 5,773 14,882 9,719 10,344 40,718
5.7
TANGEDCO has submitted a total revenue gap of Rs. 40,718 Cr upto FY 2013-14 in its petition for the post unbundling period. Commission has arrived at the revised revenue gap considering the approved net revenue requirement and revenue at existing tariffs from FY 2010-11 to FY 2013-14. For FY 2013-14, Commission has arrived at the revised revenue gap after considering the additional revenue estimated to accrue to TANGEDCO through tariff hike. The revenue gap determined by the Commission from FY 2010-11 to FY 2013-14 is tabulated below.
5.8
Page 289 June 2013
Table 289: Revenue Gap re-estimated by the Commission for the period FY 2010-11 to FY 2013-14 (Rs. Cr) Particulars Net Revenue Requirement Less: Revenue from Sale of Power at Existing Tariff including Tariff Subsidy Revenue Gap at existing tariff Less: Additional revenue through tariff increase Revenue Gap at revised tariff 2010-11 11898 7848 4050 2011-12 28953 19475 9478 2012-13 30472 23561 6911 2013-14 29946 27014 2932 964 1,968 Total 101269 77898 23371 964 22407
Revenue Account and Amortization of Regulatory Asset

5.9 TANGEDCO in its petition has revised its total outstanding Regulatory Asset based on the total gap arrived in its petition, which is cumulative of gap for FY 2010-11 (true-up for 5 months), FY 2011-12 (on provisional true-up), FY 2012-13 (Estimated for current year) and FY 2013-14 (gap for ensuing year), It has submitted that the revised calculation of Regulatory Assets may kindly be approved. It is also to be noted that the current tariff hike as estimated by TANGEDCO will result in additional revenue to the tune of Rs 973 Crores, which would be met through Government subsidy.
Table 290: Regulatory Assets as claimed by TANGEDCO Particulars Loss for the year FY 2010-11 FY 2011-12 FY 2012-13 FY 2013-14 Total Gap arrived in this Petition Total Regulatory Asset approved by Commission Less : Tariff hike proposed Additional Regulatory Asset Proposed Total Regulatory Asset Proposed 5,773 14,882 9,719 10,344 40,718 19,571 973 20,173 39,744 Rs. Crores
5.10
5.11
In the last order Commission has directed TANGEDCO not to mix up the capital accounts and revenue accounts. Hence, Commission in line with its direction is treating the revenue account separately. Commission has arrived at the consolidated revenue gap of Rs. 23677 Cr as on March 2013 by considering the approved revenue gap for each year of the first control period in this order and allowing interest expenses at 11%. The consolidated revenue gap arrived at closing of FY 2013 is given below.
Page 290 June 2013
Table 291: Revenue account for the first control period (Rs. Cr) Parameter Opening Additions (Revenue gap approved by the Commission) Add: Interest Expenses Closing Average FY 2010-11 0 4050 95 4145 2073 FY 2011-12 4145 9478 1034 14657 9401 FY 2012-13 14657 6912 2108 23677 19167
5.12
Considering the approved revenue gap of Rs. 1967 Crs for FY 2013-14, Commission has arrived at the net regulatory asset of Rs. 25644 Crs for FY 2013-14.
Table 292: Regulatory Asset arrived by the Commission (Rs. Cr) Parameter Revenue Gap - Ending March 2013 Revenue Gap - FY 2013-14 Regulatory Asset Amount (Rs. Cr.) 23677 1967 25644
5.13
In the Tariff Order No. 1 dated 30th March 2012, the proposed methodology for Amortization of the Regulatory Asset had been laid down as follows. Para 9.8.2: The Regulatory Asset is proposed to be amortized over a period of 5 years commencing from the year 2013-14 onwards. Once the Regulatory Asset is arrived at, 1/5th of the Regulatory Asset would be amortized along with the carrying cost. When the tariff order for 2014 15 is done, the Regulatory Asset would be reworked out and 1/4th of such Regulatory Asset would be amortized in that tariff order along with that cost and so on until the entire Regulatory Asset is amortized. The carrying cost would correspond to the weighted average rate of interest for medium /long term loans of TANGEDCO in the corresponding year in which the amortization of the Regulatory Asset is done. The amortization is in-principle approved to be met by Government of Tamil Nadu as per their letter (Ms.) No. 32 dated 25-03-2012 as enclosed in Annexure IX. The Commission is of the view that creation of Regulatory Asset could not be avoided in view of the accumulation of Regulatory Asset over a period due to phenomenal load growth, less addition to the generating capacity, high power purchase costs, increase in costs and non filing of tariff petition.
5.14
The Regulatory Asset determined in Table 292 shall be taken into consideration while amortization the outstanding regulatory asset for this year. In response to TANGEDCOs letter on amortization of regulatory asset, GoTN has agreed for amortization of regulatory asset through Letter(Ms.) No. 59/C2/2012 dated 7th June 2013. The relevant extracts of the letter received from GoTN are reproduced below: a) GoTN has agreed to the financial restructuring of the state Discoms announced by GoI on 5th October 2012. Accordingly, GoTN will take over 50% of TANGEDCOs short term liabilities to the tune of Rs. 6382.68 Crs in a phased manner.
5.15
Page 291 June 2013
b) In GoTN annual budget for FY 2013-14, Rs. 3000 Cr has been provided for the takeover during the current financial year. The remaining liabilities would continue to be in books of TANGEDCO till the time of eventual takeover. However, the interest on these liabilities will be paid by the GoTN. c) Keeping in view, the financial restructuring plan and available audited accounts GoTN has proposed following approach for amortization of Regulatory Asset. i. As the audited accounts are available only for the year FY 2010-11, the amortization may be carried out for the regulatory assets of the year for which audited accounts are available. For subsequent years, the regulatory assets would be reassessed for amortization as soon as audited accounts are available. The carrying cost of the Regulatory Assets can be linked to the actual cost of cash loss financing after the financial restructuring. At present it is 11%. Hence, the same interest rate may be taken as carrying cost. Since the GoTN is already taking over Rs. 6382.68 Cr of short term liabilities of TANGEDCO, part of this amount may be accounted for amortization to the extent of 1/5th of the regulatory assets as per the audited accounts of FY 2010-11 The balance amount can be adjusted towards amortization of the regulatory assets in subsequent years. Since the GoTN is also paying interest on the balance amount, the carrying cost of such amount can be discounted in arriving at the regulatory assets in subsequent years. The GoTN has in-principle agreed to amortisation of Regulatory Assets. The details are to be worked out in conjunction with tariff revision.
ii.
iii.
iv.
v.
vi.
5.16
Commission considering the letter received from GoTN has estimated the Regulatory Asset pertaining to FY 2010-11 at a carrying cost of 11%. Commission has then amortized 1/5 of the estimated Regulatory Asset pertaining to FY 2010-11.
Table 293: Regulatory Asset amortized during FY 2013-14 (Rs. Cr) Parameter Opening Additions Interest Expenses Closing Regulatory Asset to be Amortized (1/5 of the RA as on March 2013) FY 2011 0 4050 95 4145 FY 2012 4145 0 482 4628 FY 2013 4628 0 539 5166 1033
Page 292 June 2013
5.17
Commission approves Regulatory Asset of Rs. 24611 Crs after the considering the amortized regulatory asset.
Table 294: Regulatory Asset approved by the Commission (Rs. Cr) Parameter Regulatory Asset (Initial Estimate) Amortized Regulatory Asset Revised Regulatory Asset Amount (Rs. Cr.) 25644 1033 24611
5.18
It is pertinent to mention that Commission still have an approval of GoTN for amortization of Rs. 5350 Crs, which will be adjusted towards amortization in the subsequent years. In addition, Commission will not consider interest expenses on this amount while calculating the regulatory asset for subsequent years. In this order Commission has increased tariff only for two cagetories i.e Agriculture and Huts. With new capacities getting added this year after considerable delay, Commission expects the average power purchase cost to reduce with increase in regulated power purchase besides improving the power supply position. Further in FY 2012-13 tariffs were increased to all LT consumers by a big margin. Also, GoTN has in principle agreed for amortisation of Regulatory Asset in conjunction with tariff revision. Point 4(f) of Letter (Ms) No. 59/C2/2012 dated 7th June 2013 The Government in its letter cited first above has agreed in-principle with a request of amortisation of regulatory assets. The details are to be worked out in conjuction with tariff revision.
5.19
5.20
Based on above submissions, Commission is of the view that tariffs can be reviewed later along with the amortisation of balance regulatory asset. Also, TANGEDCO is in the process of finalization of its Financial Restructuring Plan (FRP) scheme and once the scheme is finalized, the amortization of balance regulatory asset can be worked out considering GoTN support, FRP scheme etc. Commission wants to reiterate its view regarding opening loans allocated to TANGEDCO through provisional transfer scheme. TANGEDCO is borrowing new loans for repayment the loans allocated and these borrowings can only be reduced by: a) b) Additional cash infusion into the business Revision of transfer scheme through which the opening loans allocated to TANGEDCO gets reduced.
5.21
These issued need to be kept in view by TANGEDCO and GoTN while finalizing the Transfer Scheme and the opening balance sheet as on 1st November 2010.
Page 293 June 2013
Voltage wise Cost to Serve, Average Cost of Supply and Cross subsidy reduction
Voltage wise cost to serve for FY 2013-14 5.22 Pursuant to the directives of the Honble Appellate Tribunal in its judgement dated 28.7.2011 in Appeal no. 192 & 206 of 2010 in which the Tariff Order dated 31.7.2010 was challenged, the Commission had estimated the voltage wise cost to serve in its tariff order dated 30.3.2012, but had not determined the cross subsidy based on it. The Commission has also very clearly stated its views in the same order as its response to stakeholder comments in Para 2.1.461: .. i. The cross subsidy for a consumer category is the difference between cost to serve that category of consumers and average tariff realization of that category of consumers. While the cross-subsidies have to be reduced progressively and gradually to avoid tariff shock to the subsidized categories, the cross-subsidies may not be eliminated. The tariff for different categories of consumer may progressively reflect the cost of electricity to the consumer category but may not be a mirror image of cost to supply to the respective consumer categories. Tariff for consumers below the poverty line will be at least 50% of the average cost of supply. The tariffs should be within 20% of the average cost of supply by the end of 201011 to achieve the objective that the tariff progressively reflects the cost of supply of electricity. The cross subsidies may gradually be reduced but should not be increased for a category of subsidizing consumer. The tariffs can be differentiated according to the consumers load factor, power factor, voltage, total consumption of electricity during specified period or the time or the geographical location, the nature of supply and the purpose for which electricity is required. Thus, if the cross subsidy calculated on the basis of cost of supply to the consumer category is not increased but reduced gradually, the tariff of consumer categories is within 20% of the average cost of supply except the consumers below the poverty line, tariffs of different categories of consumers are differentiated only according to the factors given in Section 62(3) and there is no tariff shock to any category of consumer, no prejudice would have been caused to any category of consumers with regard to the issues of cross subsidy and cost of supply raised in this appeal.
Page 294 June 2013
5.23
ii.
iii.
iv.
v.
vi.
vii.
5.24
Further the Commission in line with the directives of the Honble Appellate Tribunal had also directed TANGEDCO to undertake data collection for computing accurate cost of supply and submit a study report computing the consumer category wise and voltage wise cost to serve. TANGEDCO in partial compliance to the above directive has undertaken a technical study and computed the category wise cost of service but has stated its inability to compute voltage wise cost to serve as its accounting system are not robust enough to capture cost details voltage wise. Consequently in the Order of Honble Appellate Tribunal of Electricity dated 9th April 2013 in Appeal Nos. 257 of 2012 in which the the Commissions tariff order dated 30.3.2012 was challenged, the Appellate Tribunals opinion on this issue of cross subsidy reduction is extracted below: 13. 13.1 The fifth issue is regarding increase in cross subsidy. According to the Appellant the cross subsidy for HT consumers has been increased from 17% to 47% and the State Commission has also failed to comply with the directions given by the Tribunal regarding determination of voltage wise cost of supply in Appeal no. 192 of 2010. According to learned counsel for the State Commission, the cross subsidy with respect to average cost of supply for Industries was 122% for the FY 2010-11 as per the tariff order dated 31.7.2010 which has been increased to 147% in the impugned order. However, the Tariff Order dated 31.7.2010 for FY 201011 was not a matching Tariff Order in which large gap was left between the revenue requirement and ARR allowed whereas the impugned order was issued for the entire ARR without leaving any revenue gap. However, in the impugned order while the tariff of Appellant was increased by 19%, the increase in tariff to some of the subsidized categories was Domestic 42%, Huts 400%, Power looms 130% and Agriculture 589%. Further increase to subsidized categories would give great tariff shock to these categories. The contribution of major LT consumers towards cost was also raised from 54% to 80%. Further, the voltage wise cost of supply could not be determined as the distribution licensee could not supply the requisite data. The essential requirement laid down in Section 61(g) of the Act in regard to tariff being progressively reflecting the cost of supply and also reduction in cross subsidy could be verified only from the next tariff order of the State Commission. We notice that the first tariff order was given by the State Commission on 15.3.2003. Thereafter, the tariff was determined only by order dated 31.7.2010 for FY 2010-11 after a lapse of seven years. During these seven years, the accumulated losses of the distribution licensee increased manifold. However, the State Commission did not allow recovery of the accumulated losses of the previous years in the tariff and decided that the financial losses of the previous years would have to be addressed by restructuring with intervention of the State Government. The State Commission decided to leave revenue gap and create regulatory assets in the anticipated revenue during the control period 2010-11 to 2012-13. For the years 2010-11 and 2011-12, the State Commission had left revenue gap of Rs. 7904.04 crores and Rs. 6062.24
Page 295 June 2013
5.25
13.2
13.3
crores respectively. Thus, the tariff for FY 2010-11 was fixed after leaving huge revenue gap which was uncovered by tariff even though the tariff was determined after a lapse of seven years. 13.4 Let us now examine the directions of the Tribunal in judgment dated 28.7.2011 in Appeal no. 192 of 2010 in which the tariff order dated 31.7.2010 was challenged. "13.4. The fourth issue is regarding cost to serve each category of consumer. We have noticed that the State Commission has not determined the cost of supply according to its Regulations as also the variation in tariff of different categories of consumers with reference to average cost of supply. In the absence of this information, we are not able to verify that the tariff of categories of consumers is within 20% of the average cost of supply and whether the cross subsidy has been reduced or increased with respect to the previous year. The issue regarding cost of supply has been dealt with in this Tribunal's Judgment dated 30th May, 2011 in Appeal Nos. 102, 103 and 112 of 2010 in the matter of Tata Steel Limited vs. Orissa Electricity Regulatory Commission, etc. Accordingly, the State Commission is directed to determine the voltage wise cost of supply within six months from the date of this Judgment to ensure that in the future tariff orders cross subsidies for different categories of consumers are determined according to the Regulations and the cross subsidies are reduced as per the provisions of the Act. The State Commission is also directed to determine the variation of tariff of different categories of consumers with respect to average cost of supply and provide consequential relief, if any, to the appellant's consumer category in terms with our findings after hearing all concerned." 13.5 We notice that that State Commission has estimated the voltage wise cost to serve in the impugned order but has not determined the cross subsidy with respect to voltage wise cost to serve and has directed the distribution licensee to carry out some data collection exercise for computing accurate cost of supply and submit a study report on computation of consumer category wise and voltage wise cost to serve. 13.6 It is noticed that the State Commission has increased the tariff of the subsidized categories considerably. The increase in the tariff of various subsidized categories as given in Table 227 of the impugned order is as under:
LT Domestic Hut Power Looms 40% 755% 143%
LT Agriculture
593%
Page 296 June 2013
LT Total
48%
Thus, we agree with the contention of the State Commission that the State Commission has increased the tariff of the subsidized categories considerably and further increase would have caused greater tariff shock to these categories. 13.7 We find that if the tariff of Appellant's category is kept within plus 20% of the average cost of supply it may require increase in tariff of subsidized LT consumers by 110% of the pre-revised tariff causing greater tariff shock to them. This would be evident by following:
i)Consumption of industries category IA ii)Revenue at the revised tariff of Rs. 7.32 per kWh iii)Tariff at + 20% of average cost of supply (Rs.4.99 per kWh) iv)Revenue at Rs. 6 per kWh v)Loss of revenue from industries category IA vi)Consumption of LT subsidized consumers vii)Increase in average tariff to recover loss of revenue from industrial category IA (v) ( ______x 10) (vi) viii)Average tariff of subsidized LT consumers after tariff increase ix)Increased average tariff required to cover the loss of revenue 13545 MU 9914 crores Rs. 6 per kWh 8127 crores 1787 crores 29709 MU
Rs. 0.60 per kWh
Rs. 2.86 Rs.3.46 per kWh Rs.1.65 per kWh About 110% About 73%
x)Average tariff of subsidized LT consumers prior to revision xi)Desired average increase in LT tariff to cover loss of revenue %age xii)Average increase allowed to LT subsidized category
Thus, against present average increase of about 73% allowed to the subsidized LT categories, the increase required to bring the HT, IA category alone to + 20% of average cost of supply would be about 110%. If other subsidizing consumers had to be brought within +20% or average cost of supply, the required increase in tariff in the subsidized categories would have been much higher. 13.9 Let us now examine the findings of the State Commission in the impugned order
"9.7.2 The Commission notes that the present level of cross subsidisation of LT category consumers has been brought down from 46% to 20%, which is a huge shift towards the final goal of +20% of Average Cost of Supply. 9.7.3 Retail Tariff in State of Tamil Nadu was not revised for a period from FY 2003-04 to FY 2009-10, on account of non filing of the tariff petition by erstwhile TNEB. Increase in average cost of supply has been sought by TANGEDCO, in this Tariff Petition. Cross-subsidy has been in existence historically even in the period where there was no tariff revision. The Commission also observes that tariff that was charged to most of the categories of consumers was below average cost of supply. Hence, now when the TANGEDCO has sought actual pass through of revenue gap in the form of Tariff Increase and Regulatory Asset, the impact on each category of consumers is significant. The Commission has attempted to reduce the crosssubsidy between the consumer categories in this Order, by rationalising the tariff for subsidised categories and suitably adjusting the tariff for subsidising categories, vis--vis the prevailing average cost of supply, while at the same time, trying to ensure that there is no tariff shock to any consumer category. However, since the average cost of supply has been increasing steadily, the average tariff increase required to meet the revenue gap is also increasing, and hence, the subsidising consumers have not been able to experience tariff reduction in absolute terms. 13.10 In the circumstances of the case, we feel that the State commission has tried to increase the tariff of the subsidized categories substantially so as to reduce the component of cross subsidy. The comparison of charge in cross subsidy with the previous tariff order for FY 2010-11 may not give correct picture as in the previous tariff order the tariffs were not increased adequately to meet the revenue gap and a huge revenue gap was left uncovered. The State Commission has already increased the tariff of subsidized categories substantially and further increase would have caused greater tariff shock to them which may not be desirable. 13.11 Accordingly, we are not inclined to interfere in the tariff determined by the State Commission. However, the State Commission is directed to determine the voltage-wise cost of supply and corresponding cross subsidy for each category of consumer in the future tariff order.
Page 298 June 2013
5.26
The Commission has noted that sufficient data is not available for metering and segregation of the network costs for determination of cost of supply for different categories of consumers. To undertake an accurate and logically sound voltage wise cost of supply study, TANGEDCO should select sample feeders/ consumers for load research study. The selected sample should be statistically verified to be representative of the population. Hourly load data and energy consumption should be collected from selected feeders/ consumers for each voltage category of consumers. From the data so collected TANGEDCO should undertake a load research study to determine the contribution to Coincident Factor and Class Load Factor for each voltage category. Further TANGEDCO should have accurately classified voltage wise losses, voltage wise number of consumers and their load. Based on such a study a representative cost to serve various voltage classes can be arrived at. TANGEDCO has so far not conducted such a study and gathered the required information. The Commission would also like to note that the year FY2012-13 has seen severe shortage of power due to which more stringent R&C measures as well as load shedding was unavoidable. Given such a situation where cyclical load shedding was adopted, the voltage wise consumer contribution to peak would have been misleading. Considering the peculiar difficulties in this specific situation as well as the fact that sufficient data is unavailable, the Commission has resorted to estimate the voltage wise cost to serve based on the data made available.
5.27
Embedded cost method 5.28 The annual revenue requirement has been allocated to consumers connected at different voltage levels based on a combination of allocation factors. The factors are: contribution of a voltage class to the power purchase, voltage wise cost contribution to network assets, contribution of a voltage class to T&D losses, number of consumers in a voltage class and connected load of consumers in a voltage class. The Commission has calculated the voltage wise cost to serve using three steps namely functionalisation, classification and allocation of costs to various voltage classes. Functionalisation: Firstly the total costs have been segregated according to the major operating functions of the utility, such as generation, transmission or distribution.
Table 295: Functionalisation of costs of TANGEDCO for FY 14 (Crs) Sl. No 1 2 3 Cost Heads Power Purchase Cost Transmission Cost Distribution Cost Employees costs Repair & Maintenance Administration & General expenses Depreciation 3,610 68 101 362 Generation 23,726 Transmission 1,533 Distribution
5.29
A. 5.30
Page 299 June 2013
Sl. No
Cost Heads Interest on Long term loan* Other Debits & extra ordinary items Prior Period Debit/(Credit) Charges Reasonable Return / Return on Equity Interest on Working Capital Contribution to Contingency Reserves Total expenditure Less Other Income and Non tariff income Total Distribution cost
Generation
Transmission
Distribution 1,464 20 5,625 938 4,687
*After deducting the interest expenses disallowed for new hydro stations B. 5.31 Classification of costs: The objective of cost classification is to arrange costs into groups that bear a relationship to a measurable cost-defining characteristic of the service being rendered. Functionalized costs are classified as: 5.32 Demand related Energy related and Customer related
The Demand classification relates to costs expended for providing capacity to serve system load requirements. The Energy related classification consists of those expenses that vary with any change in the consumption, such as energy component of power purchase cost. The Customer related classification is related to expenses linked directly to and varies by the number and type of customers served. a. Classification of Generation Expenses: Power is procured from both own generating stations of TANGEDCO as well as purchased from various allocated CGS stations, IPPs, NCES and Other short term sources. The power procurement cost has both fixed and variable component and hence ideally the total fixed cost of own generation and power purchase should be classified as demand related and the total variable cost of own generation and power purchase as energy related costs.
Page 300 June 2013
The Commission observes that the Power purchase costs are identified as both demand and energy related as TANGEDCO should not only be able to supply adequate energy for sale to consumers but also have sufficient installed capacity or purchase capacity to satisfy the system peak demand. For this segregation TANGEDCO would have to provide information pertaining to contribution of individual class to coincidental peak demand. It has been observed from the Technical Paper on Cost to Serve submitted by TANGEDCO that the above information is not available with them. Thus the Commission has treated the entire own generation as well as power purchase cost as energy related costs, so as to have a logical basis for apportioning the cost as an approximation. As and when the required details become available calculations will have to be made by dividing the power procurement costs with demand related and energy related costs. b. Classification of Transmission Expenses: Usually the entire transmission costs are classified as demand related. However, a minor portion of transmission investment is utilised for reducing the energy losses in the transmission system. Hence 2% of transmission charges are classified as energy related costs and 98% as demand related. c. Classification of Distribution Expenses: A large quantum of the distribution costs are related to the creation and maintenance of the network. This cost is classified as being demand related. The Distribution utility also incurs expenses to provide service to customers and is also required to meet customer peak demand requirements. This component of expense varies with the number of customers to be served, like providing connections to new consumers which in turn also adds to the utilities system capacity to meet peak demand. Thus they exhibit attributes of both demand and customer charges and have been apportioned thus.
Table 296: Classification of functional costs Cost Heads Power Purchase Cost Transmission Cost Employees costs Repair & Maintenance Administration & General expenses Depreciation Interest on Long term loan Other Debits & extra ordinary items Prior Period Debit/(Credit) Charges Reasonable Return / Return on Equity Interest on Working Capital Contribution to Contingency Reserves Less Other Income and Non tariff income Demand 0% 98% 60% 50% 75% 95% 95% 95% 95% 95% 95% 95% 95% Energy 100% 2% 0% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% Customer 0% 0% 40% 45% 20% 0% 0% 0% 0% 0% 0% 0% 0% Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
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C. 5.33
Allocation of costs: The last step is the process of apportioning the classified costs to each voltage class on the basis of an appropriate methodology apt for that class of cost. The Commission has used the following apportioning methodology for the three heads of cost. Demand cost allocation Transmission and Distribution demand cost The costs incurred under these heads have been allocated by the Commission to voltage classes based on the proportion of network assets utilised to serve the consumers at specific voltages. These ratios have been arrived at by first arriving at the total value of voltage wise assets at the end of FY2012-13 as follows. The Commission has based its estimations, on the voltage wise per unit cost and asset quantum and has arrived at the proportion of asset at each voltage level as follows.
Table 297: Total Line cost as at end of FY 2012-13 Voltage >230 kV 110 kV 33 kV 22 kV 11 kV LT Total Total cost proportion 17% 23% 4% 5% 12% 38% 100%
a. 5.34
5.35
5.36
On arriving at this preliminary voltage wise cost proportion, a further reclassification of the same has been done based on the voltage wise sales and wheeled energy grossed up for losses. This has been done in light of the fact that the higher voltage systems act as the backbone network for lower voltage systems and hence its full cost cannot be allocated only to the voltage class it pertains to but also to lower voltage systems in the proportion of its utilisation i.e. energy requirement at the specific voltage periphery. Explaining further, the reclassification ratios as applied by the Commission are as follows. The proportion of energy requirement at a particular voltage to total energy requirement has been calculated and progressively the same logic has been extended to arrive at the proportion by limiting total requirement upto a lower voltage level. These ratios are then used to allocate the voltage wise costs arrived at each voltage level to all lower voltages also.
5.37
Page 302 June 2013

Table 298: Reclassification ratios based on voltage wise energy requirement Energy at Voltage Periphery (MU)* 1,044 4,770 2,145 4,116 11,849 53,311 Total sales 1.4% 6.2% 2.8% 5.3% 15.3% 69.0% 6.3% 2.8% 5.4% 15.6% 70.0% 3.0% 5.8% 16.6% 74.6% 7.2% 0.0% 92.8% 18.2% 81.8% 100.0% 100% 100.0% Upto 110 kV Upto 33 KV Upto 22 kV Upto 11 kV Only LT kV
Voltage >230 KV 110 KV 33 KV 22 KV 11 KV LT
100.0% 100.0% 100.0% 100.0% Total *Wheeling units at different voltages have been arrived by certain assumptions Table 299: Voltage wise demand cost allocation factor Voltage >230 kV 110 kV 33 kV 22 kV 11 kV LT Total Total cost proportion 17% 23% 4% 5% 12% 38% 100%
Reclassification proportion 0.2% 2.5% 1.3% 2.8% 9.2% 84.1% 100.0%
b. 5.38
Energy cost allocation Total energy cost The total cost classified by the Commission as energy related costs are allocated in the ratio of energy requirement for consumers of a specific voltage class. The energy requirement includes voltage wise sales and voltage level losses. Voltage wise Energy Related Cost = Total Energy Cost x (Voltage wise Sales + Voltage wise Energy Losses) / Total energy requirement at transmission periphery
5.39
The power purchase at transmission periphery has been arrived at considering a total loss of 16.4%. The table below captures the sales, losses and energy requirement for each voltage class. The Commission has based its estimations, on the energy balance data and voltage wise losses data furnished by TANGEDCO.
5.40
Page 303 June 2013
Table 300: Voltage wise energy cost allocation factor Energy cost allocation factor 1.1% 4.8% 1.6% 3.1% 8.9% 80.6% 100.0%
Sl. No 1 2 4 5 6 7
Voltage >230 kV 110 kV 33 kV 22 kV 11 kV LT Total
c. 5.41
Customer cost allocation Total customer related cost - The costs incurred under this head have been allocated by the Commission to voltage classes based on the number of consumers in each voltage class. However, the number of consumers in each class has been weighted to reflect the appropriate cost causation aspects of the voltage class. The weights are a function of two parameters namely sales per consumer and load per consumer. Allocation of customer related costs are illustrated below in which sales per consumer and load per consumer has been taken on a weight scale of 1-200 to enable a meaningful comparison.
Table 301: Voltage wise customer cost allocation factor
5.42
Scale
1 Connecte d Load MW
200 No. of Consumers No.
Sales MU
Voltage >230kV 110 kV 33kV 22kV 11kV LT Total
Sales weightage Sales Per Consumer
Load weightage Load Per Consumer
Average weightage AW
Total weight AW*No.
Customer cost allocation factor
429 1,586 1,036 1,959 5,433 51,628 62,071
12 183 185 1,829 6,097 24,952,457 24,960,762
721 3,067 1,027 1,917 5,514 44,953 57,199
200 200 200 200 200 1
200 200 200 200 200 1
200 200 200 200 200 1
2,355 36,614 37,042 365,708 1,219,382 24,952,457 26,613,557
0.01% 0.14% 0.14% 1.37% 4.58% 93.76% 100.00%
Voltage wise cost to serve 5.43 Based on the above allocation factors the Commission has allocated the entire ARR to each voltage class. The sum of the allocated voltage wise demand cost, energy cost and consumer cost will result in the total cost allocated to each voltage class. Based on the sales to each voltage class the Commission has arrived at the voltage wise cost to serve as follows.
Page 304 June 2013
Table 302: Voltage wise total cost allocation Voltage level >230 kV 110 kV 33 kV 22 kV 11 kV LT Total Cost Demand cost Crores 11 116 58 128 425 3,904 4,641 Demand cost allocation factor 0.2% 2.5% 1.3% 2.8% 9.2% 84.1% Energy cost Crores 262 1,134 382 734 2,113 19,185 23,810 Energy cost allocation factor 1.1% 4.8% 1.6% 3.1% 8.9% 80.6% Customer cost Crores 0 2 2 21 68 1,401 1,495 Customer cost allocation factor 0.01% 0.14% 0.14% 1.37% 4.58% 93.76% Total cost Crores 272 1,252 443 883 2,606 24,490 29,946
Table 303: Voltage wise Cost to Serve Demand related cost (Rs./ kWh) 0.15 0.38 0.57 0.67 0.77 0.87 0.81 Energy related cost (Rs./ kWh) 3.63 3.70 3.72 3.83 3.83 4.27 4.16 Customer related cost (Rs./ kWh) 0.00 0.01 0.02 0.11 0.12 0.31 0.26 Cost of supply per unit (Rs/kWh) 3.78 4.08 4.31 4.60 4.73 5.45 5.24
Voltage level >230 KV 110 KV 33 KV 22 KV 11 KV LT Total
5.44
It is clear that the cost to serve lower voltage classes is higher than the cost to serve higher voltage classes primarily due to higher losses, both technical and commercial, larger consumer base and consumer load. The Commission would like to continue to take the stance as taken last year recognising the importance of carrying out such an exercise in detail enables itself to test the retail tariff. As mentioned earlier, for arriving at realistic and accurate costs an extensive data collection exercise has to be carried out by TANGEDCO which will include a 12-month load profile study of each voltage wise consumer category. Gathering of load data will require appropriate statistical selection procedure so that the data is representative of the population at large. It will be imperative to first determine the criteria for selection of sample data to arrive at close to accurate costs. Even though TANGEDCO has attempted to calculate cost to serve, it has been unsuccessful in doing so at various voltage classes. The Commission once again directs TANGEDCO to submit a study report on methodology for computation of voltage wise cost to serve (CoS) along with the basis of allocation of different costs and losses to various voltage levels. This shall be examined by the Commission and approved with such modifications as it may deem fit or consider a better alternate computation. The Commission also directs TANGEDCO to submit the action taken report within 90 days of the issuance of this report.
5.45
5.46
Page 305 June 2013
5.47
Finally in the absence of accurate and necessary information from TANGEDCO, the Commission will base its calculation of cross subsidy on the average cost of supply as done last year.
Average Cost of Supply and Cross subsidy reduction 5.48 At the outset the Commission brings out the fact that with no tariff increase to most of the consumers and with increase in cost of supply compared to last tariff order, there is an inherent decrease in cross subsidy levels. Commission has worked out the prevailing cross-subsidy and the reduction in crosssubsidy for the subsidizing consumers based on the Average cost of supply method.
5.49
Table 304: Cross subsidy trajectory estimated by the Commission Categories Average cost of supply (ACoS) FY14 5.24 5.24 5.24 ABR as per Existing tariff ABR as per Proposed tariff 7.41 6.51 5.42 Cross subsidy reduction Last ABR(ET) ABR(PT) order /ACoS /ACoS 147% 132% 114% 141% 124% 104% 141% 124% 104%
HT Category HT Industries Railway Traction Government Educational Institution Etc. (HT) Pvt. Educational Institutions etc. Commercial and Other HT Lift Irrigation and co-ops (HT) Temporary Total HT Domestic Huts Bulk supply Public Lighting & Water Works Government Educational Institution Pvt. Educational Institutions Places of Public Worship (LT) Cottage and Tiny Industries Power Loom Industries Agriculture & Government seed 7.41 6.51 5.42
5.24 5.24 5.24 5.24 5.24 5.24 5.24 5.24 5.24 5.24 5.24 5.24 5.24 5.24 5.24 5.24
6.84 8.61 3.50 10.68 7.39 LT Category 3.44 2.12 4.06 5.50 6.03 7.37 5.93 4.02 5.33 6.20 1.83
6.84 8.61 3.50 10.68 7.39 3.44 4.43 4.06 5.50 6.03 7.37 5.93 4.02 5.33 6.20 2.61
139% 187% 71%
131% 164% 67% 204%
131% 164% 67% 204% 141% 66% 85% 77% 105% 115% 141% 113% 77% 102% 118% 50%
149% 69% 50% 80% 110% 115% 137% 84% 84% 106% 127% 37%
141% 66% 41% 77% 105% 115% 141% 113% 77% 102% 118% 35%
Page 306 June 2013
Categories farm Commercial and Other Temporary Supply Total LT Total LT+HT
Average cost of supply (ACoS) FY14
ABR as per Existing tariff
ABR as per Proposed tariff
Cross subsidy reduction Last ABR(ET) ABR(PT) order /ACoS /ACoS 153% 211% 80% 100% 144% 222% 76% 90% 144% 222% 80% 93%
5.24 5.24 5.24 5.24
7.53 11.62 4.00 4.72
7.53 11.62 4.21 4.89
5.50
The Commission would like to note that there is inherent reduction in cross subsidy being borne by the subsidising consumers as there has been an increase in the average cost of supply but no increase in the tariff charged to consumers. The Commission notes that the proportion of cross subsidy that the HT consumers are bearing has come down from 49% to 41%, which is a positive step towards achieving the target stipulated by the National Tariff Policy of +20% of average cost of supply. However, since the average cost of supply has been increasing steadily, the subsidising consumers have not been able to experience tariff reduction in absolute terms. Further for the year FY 14, the tariffs have been increased only for two LT categories namely Huts and Agriculture & Government seed farm which in-turn increases the realisation from the subsidised consumers. For these two categories the recovery from tariff has increased from 50% to 84% and 37% to 50% respectively. For the other subsidised categories there is a marginal reduction in the recovery percentage caused due to the increase in the average cost of supply. Retail Tariff in State of Tamil Nadu was not revised for a period from FY 04 to FY 10, on account of non filing of the tariff petition by erstwhile TNEB. Cross-subsidy has been in existence historically even in the period where there was no tariff revision. The Commission also observes that tariff that was charged to most of the categories of consumers was below average cost of supply. Hence, last year when TANGEDCO had sought for pass through of revenue gap in the form of tariff increase, the impact on each category of consumers was significant. In the light of significant hike in tariff to all categories last year the Commission has approved the proposition of tariff hike only for two categories as mentioned above this year, so as to avoid tariff shock to the consumers of the State. While the tariff for consumer categories have been approved as sought by TANGEDCO with minor modifications as detailed in the next section, the revenue gap considered for the year is not met entirely through the revision in tariff. To address the shortfall for the year as well as of the past years, the Financial Restructuring Plan (FRP) will be rolled out from the current financial year along with amortisation of Regulatory Asset. Further it is possible that the actual revenue earned by TANGEDCO may be higher or lower than that considered by the Commission, on account of minor re-categorisation. The revenue shortfall/surplus, if any, will be trued up at the time of truing up for FY 2013-14.
5.51
5.52
Page 307 June 2013
Open Access Charges

Wheeling Charges 5.53 The Tamil Nadu Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff) Regulation 2005 clearly stipulated the method for computing the wheeling charges. The relevant portion has been extracted below: 86. Wheeling Charges for Open Access Customers (1) The Distribution licensee shall provide open access to any consumer within the area of his supply on payment of wheeling charges. (2) The wheeling charges for a consumer category shall be based on costs of Distribution licensee for its pure wire business. Thus all items of revenue requirement of the Distribution licensee excluding cost of power purchase and interest on Security Deposit from consumers shall be the cost of Distribution licensee for his wire business. 5.54 The Electricity Act 2003 (the Act) allows non discriminatory Open Access to the network of a Licensee on payment of applicable charges. To arrive at the wheeling charge, TANGEDCO has proposed the Annual Distribution charge for FY 2013-14 as shown in the table below. The approved Annual Distribution charge re-estimated by the Commission and as filed by TANGEDCO in its petition are tabulated below.
Table 305: Annual Distribution Charges for FY 2013-14 S. No. 1 2 3 4 4 5 6 7 8 9 10 Particular Net O&M Expenses Interest on Loan Interest on Working Capital Depreciation Return on equity Other debits Provision for Bad Debts Annual Wheeling Charges Less: Interest on Security Deposit Net Annual Distribution Charges Annual Wheeling Charges TANGEDCO Rs. Crores 4,100.31 2,237.78 808.09 327.61 404.66 15.73 14.21 7,908.38 419.01 7,489.38 1611.92 Approved Rs. Crores 3,778.81 1,463.61 0.00 362.39 0.00 19.93 0.00 5,624.74 449.60 5,175.14 1247.58
5.55
As HT consumers are eligible for Open Access, the above charges have been allocated to them, in the ratio of the HT distribution network to the total of HT and LT distribution network. TANGEDCO has provided this ratio as 22:78 based on existing HT and LT lines as on 31st March, 2012. Based on the revised data on HT and LT line lengths as on 31st March 2013, submitted by TANGEDCO in its reply to data gaps, the Commission has re-estimated the network ratio as follows.
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Table 306: Allocation of Wheeling Charges into LT & HT Category Sl. No. 1 3 Particulars HT Lines (lakh ckt. km.) LT Lines (lakh ckt. km.) Total TANGEDCO No.s 1.56 5.67 7.23 Ratio 21.52% 78.48% Approved No.s 1.84 5.78 7.62 Ratio 24.11% 75.89%
5.56
Based on the above ratio and the Annual Distribution charges as approved, the wheeling charge per unit for the year FY 2013-14 estimated by the Commission are as follows.
Table 307: Wheeling Charges per unit for FY 2013-14 Particulars Energy fed into Grid (in MU) 230 kV Losses approved by the Commission 230 kV Losses (MU) Wheeling units - 230 kV (MU) TANGEDCO - 230 kV Sales (MU) Energy input at 110 kV (MU) 110 kV Losses approved by the Commission 110 kV Losses (MU) Wheeling units - 110 kV (MU) TANGEDCO - 110 kV Sales (MU) Energy Input at Distribution Periphery (MU) Total Annual Wheeling Charges (Rs.Crs) Wheeling charges for Open Access Customer (Ps/ unit) FY 14 79,703 0.80% 638 315 721 78,030 1.90% 1,483 1,575 3,067 71,905 1247.58 17.35
5.57
Based on the estimated sales and voltage wise losses the Commission has determined the wheeling charge per unit as 17.35 paise/ kWh for FY 2013-14.
Cross Subsidy Surcharge 5.58 The Electricity Act 2003 clearly lays down the charges recoverable by the distribution licensee for allowing open access. Extract of the same has been produced below. Provisos to Section 42 (2) of Electricity Act 2003 stipulates as under: Provided that such Open Access shall be allowed on payment of a surcharge in addition to the charges for wheeling as may be determined by the State Commission Provided further that such surcharge shall be utilized to meet the requirements of current level of cross-subsidy within the area of supply of the distribution licensee
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5.59
The Tamil Nadu Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff) Regulation 2005, under Section (3) Power to determine tariff lays down the following: 3. Power to determine Tariff (1) Under Section 62 of the Act, the Commission shall determine tariff and terms and conditions therefor in the following cases: . .............. (vi) Surcharge payable by the consumer who is allowed open access in addition to the charges for wheeling under the first proviso to sub-section (2) of section 42 of the Act and in accordance with the TNERC Open Access Regulations.
5.60
Further the National Tariff Policy 2006, in Para 8.5 lays down the formula for calculating the cross subsidy surcharge payable by open access consumers as follows: Surcharge formula: S = T - [C (1+L/100) + D] Where: S is the surcharge T is the Tariff payable by the relevant category of consumers; C is the Weighted average cost of power purchase of top 5% at the margin excluded liquid fuel based generation and renewable power D is the Wheeling charge L is the system Losses for the applicable voltage level, expressed as a Percentage
5.61
As per National Tariff Policy, the Cross Subsidy Surcharge has been determined by TANGEDCO based on avoided cost methodology. TANGEDCO has determined the 5% marginal cost of power purchase in its petition for FY 2013-14 as 3.41 Rs./ kWh and the same has been estimated by the Commission on the basis of merit order for FY 2013-14 as 3.59 Rs./ kWh. The tables below capture the same.
Table 308: Weighted average cost of power purchase of top 5% at the margin as filed by TANGEDCO Sl. No 1 2 3 ABAN NTPC - Talcher II Kudankulam Uni t - I Total Station Units purchased MUs 375 3,567 2,426 6,368 Total purchase cost Rs. Crores 189 1,102 883 2,174 Cost per unit Rs./unit 5.04 3.09 3.64 3.41
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Table 309: Weighted average cost of power purchase of top 5% at the margin as approved by the Commission Station Penna Mettur Tuticorin Thermal Power Station Total Units purchased MUs 353 353 2723 3429 Total purchase cost Rs. Crores 130 130 972 1232 Cost per unit Rs./unit 3.68 3.59 3.57 3.59
5.62
Based on the above weighted average cost of marginal power stations, the Commission has calculated the cross subsidy surcharge payable by HT consumers for availing open access.
Table 310: Cross Subsidy Surcharge for HT Categories approved by the Commission (in Paise kWh) Sl. No 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 Total Loss (%) 0.80% 1.75% 2.08% 3.46% 3.51% 1.75% 2.70% 3.03% 4.41% 4.46% 2.08% 3.03% 3.36% 4.74% 4.80% 3.46% 4.41% 4.74% 6.12% 6.17% 3.51% 4.46% 4.80% 6.17% 6.23% Marginal Cost of Power Purchase 359 359 359 359 359 359 359 359 359 359 359 359 359 359 359 359 359 359 359 359 359 359 359 359 359 Wheeling Charges 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 17.35 Weighted Average Power Purchase Cost 380 383 384 390 390 383 387 388 393 394 384 388 389 395 395 390 393 395 400 400 390 394 395 400 401
Injection Voltage 230 kV 230 kV 230 kV 230 kV 230 kV 110 kV 110 kV 110 kV 110 kV 110 kV 33 kV 33 kV 33 kV 33 kV 33 kV 22 kV 22 kV 22 kV 22 kV 22 kV 11 kV 11 kV 11 kV 11 kV 11 kV
Drawal Voltage 230 kV 110 kV 33 kV 22 kV 11 kV 230 kV 110 kV 33 kV 22 kV 11 kV 230 kV 110 kV 33 kV 22 kV 11 kV 230 kV 110 kV 33 kV 22 kV 11 kV 230 kV 110 kV 33 kV 22 kV 11 kV
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Table 311: Cross Subsidy Surcharge for HT consumers Railway traction Pvt. Educational Institutions etc. Cross Subsidy Surcharge (Paise/kWh) Government Educational Institution Etc. 162.46 158.95 157.72 152.48 152.26 158.95 155.38 154.12 148.78 148.56 157.72 154.12 152.85 147.47 147.25 152.48 148.78 147.47 141.93 141.70 152.26 148.56 147.25 141.70 141.48 304.67 301.16 299.93 294.69 294.47 301.16 297.59 296.33 290.99 290.77 299.93 296.33 295.06 289.68 289.46 294.69 290.99 289.68 284.14 283.92 294.47 290.77 289.46 283.92 283.69 Commercial and Other
Sl. No 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
Injection Voltage 230 kV 230 kV 230 kV 230 kV 230 kV 110 kV 110 kV 110 kV 110 kV 110 kV 33 kV 33 kV 33 kV 33 kV 33 kV 22 kV 22 kV 22 kV 22 kV 22 kV 11 kV 11 kV 11 kV 11 kV 11 kV
Drawal Voltage 230 kV 110 kV 33 kV 22 kV 11 kV 230 kV 110 kV 33 kV 22 kV 11 kV 230 kV 110 kV 33 kV 22 kV 11 kV 230 kV 110 kV 33 kV 22 kV 11 kV 230 kV 110 kV 33 kV 22 kV 11 kV
Industry
361.12 357.62 356.38 351.14 350.93 357.62 354.05 352.79 347.44 347.22 356.38 352.79 351.52 346.14 345.92 351.14 347.44 346.14 340.60 340.37 350.93 347.22 345.92 340.37 340.14
271.14 267.64 266.41 261.17 260.95 267.64 264.07 262.81 257.47 257.25 266.41 262.81 261.54 256.16 255.94 261.17 257.47 256.16 250.62 250.39 260.95 257.25 255.94 250.39 250.17
481.28 477.78 476.54 471.30 471.09 477.78 474.21 472.95 467.60 467.38 476.54 472.95 471.68 466.30 466.08 471.30 467.60 466.30 460.76 460.53 471.09 467.38 466.08 460.53 460.30
5.63
At the outset the Commission notes that there has been a marked shift in HT consumers opting for open access, which has lead to the average billing rate to increase substantially. The Commission has tabulated below the increase in wheeling units over the last three years, representing the number of units sourced through other sources apart from the utility.
Table 312: Wheeled energy over the last there years from FY 2010-11 to FY 2012-13
Particulars Sale to HT Industrial, HT Commercial and Educational Institutions Wheeling for HT Industries
FY 2010-11 MU's 13,857
FY 2011-12 MU's 11,664
FY 2012-13 MU's 8,646
4,716
6,750
7,871
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Particulars Wheeling for HT Commercial Wheeling for Educational Institutions Total Wheeling Units Total Sales (Including Wheeling) Percentage of Wheeling Units
FY 2010-11 MU's 155 7 4,878 18,735 26.04%
FY 2011-12 MU's 289 10 7,049 18,713 37.67%
FY 2012-13 MU's 318 11 8,200 16,846 48.67%
5.64
It can be inferred from above table that percentage of wheeling units from 26.04% in FY 2010-11 increased to 48.67% in FY 2012-13. The R&C measures in place are making the consumers to depend on other available options for power procurement. The utility is losing significant revenue due to reduced HT sales. Hence, the per unit cross subsidy surcharge has marginally increased due to higher ABR due to loss of revenue with HT consumers moving out of the system.However, due to better energy availability in FY 2013-14 the number of consumers, other than those consumers who have permanently left the system due to captive wheeling, opting to source power through open access is expected to reduce and cause the average billing rate to reduce.
Grid Availability Charges 5.65 TANGEDCO in its petition has requested the Commission for approval of energy charges plus the energy equated demand charges applicable to HT Temporary supply tariff as Grid Availability Charges. TANGEDCO submitted that the Grid Availability Charges are for providing standby arrangements to Open Access customers in the following cases:
5.66
In case of outages of Generator supplying to an open access consumer. For start up power by generator.
When the generation as per schedule is not maintained and when the drawal by the open access consumer is in excess of the schedule.
5.67 5.68
The tariff applicable to start-up power has been dealt in Tariff schedule of this Order With regards grid availability charges for open access consumers, Commission approves following norms 1) Scheduling of all transactions pursuant to grant of long-term open access or medium-term open access or short-term open access shall be carried out on day-ahead basis in accordance with the relevant provisions of IEGC/CERC Open Access Regulations for inter-State transactions and in accordance with State Grid Code/Commissions Regulations / orders for intra-State transactions.
Page 313 June 2013
2) Deviations between the schedule and the actual injection/drawal in respect of a open access customer who is not a consumer of the distribution licensee and the Generating Stations, shall come under the purview of the intra-state ABT, as notified by the Commission and shall be settled based on the composite accounts for imbalance transactions issued by SLDC on a weekly cycle in accordance with the UI charges specified by the Commission. Billing, collection and disbursement of any amounts under the above transactions shall be in accordance with the Commissions orders on Intra-state ABT, as may be applicable from time to time. Till the implementation of Intra-State ABT, the imbalance charge shall be at the rate of applicable temporary supply tariff. 3) In case of deviation by Open Access Customer who is also a consumer of distribution licensee, the difference between the applicable scheduled open access load and actual drawl shall be accounted Block wise and shall be settled in accordance with the following: a) The energy consumption of such customer shall be recorded in 15 minutes time block. b) Deviations between the schedule and the actual injection/drawal shall come under the purview of the intra-state ABT, as notified by the Commission and shall be settled based on the composite accounts for imbalance transactions issued by SLDC on a weekly cycle in accordance with the UI charges specified by the Commission. Billing, collection and disbursement of any amounts under the above transactions shall be in accordance with the Commissions orders on Intra-state ABT, as may be applicable from time to time. Till the implementation of Intra-State ABT, the imbalance charge shall be regulated as below: i. In case of actual energy/demand drawl is more than the scheduled energy/demand but within the permitted energy/demand (based on contracted load and energy or quota demand and energy as applicable), customer shall be liable to pay for such over drawl at the applicable tariff rates of that category of consumer as determined by the Commission from time to time. In case of actual energy/demand drawl is more than the scheduled energy/demand drawl and also more than the permitted energy/demand (based on contracted load and energy or quota demand and energy as applicable), payment for the capacity above the contract demand shall have to be made at the excess demand/energy charges as specified by the Commission for such categories of customers in the regulation/order.
ii.
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Additional Surcharge 5.69 TANGEDCO has in its petition clearly stated that Additional Surcharge will not be charged by it as there is shortage of available capacity. It has further elaborated that the Additional surcharge will become applicable only if it is conclusively demonstrated that its obligation as a licensee in terms of existing power purchase commitments, has been and will continue to be stranded, or there is an unavoidable obligation and incidence to bear fixed costs consequent to such a contract. Hence the Commission accepts the proposal of TANGEDCO that Additional Surcharge will be levied on the Open access consumers if and only if stranded capacity costs are established by TANGEDCO
5.70
Restoration Charges 5.71 Any default in payment of the various OA charges specified in the regulations, within the time stipulated by the Commission will result in the discontinuance of the open access to the consumer. Restoration of such discontinued open access shall be subject to the payment of reconnection charges applicable to that voltage level of the customer as approved by the Commission in the Order on Non-tariff related Miscellaneous charges issued from time to time.
Fuel and power purchase cost adjustment mechanism (FPCA)

5.72 Electricity Act 2003 under section 62 sub section 4, states No tariff or part of any tariff may ordinarily be amended more frequently, than once in a financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge formula as may be specified. The National Tariff Policy under provision 5.3(h) (4) Uncontrollable costs should be recovered speedily to ensure that future consumers are not burdened with past costs. Uncontrollable costs would include (but not limited to) fuel costs, costs on account of inflation, taxes and cess, variations in power purchase unit costs including on account of hydro thermal mix in case of adverse natural events,
The APTEL in its Order O.P. 1 of 2011 dated 11-11-2011 under para 65 (vi) has stated that: (vi) Fuel and Power Purchase cost is a major expense of the distribution Company which is uncontrollable. Every State Commission must have in place a mechanism for Fuel and Power Purchase cost in terms of Section 62 (4) of the Act. The Fuel and Power Purchase cost adjustment should preferably be on monthly basis on the lines of
the Central Commissions Regulations for the generating companies but in no case exceeding a quarter. Any State Commission which does not already have such formula/mechanism in place must within 6 months of the date of this order must put in place such formula/ mechanism. 5.73 TANGEDCO in its current petition has not proposed the recovery of actual fuel price through the Fuel and power purchase cost adjustment mechanism. The Commission had proposed the below formula to enable TANGEDCO to recover the fuel price variations in its tariff order dated 30th March 2012.
(1) Adjustment Amount A= CVC.GEN + CVC.pp A= Adjustment Amount (during this quarter) CVC.GEN = Change in Variable Cost of TANGEDCOs thermal stations. CVC.pp = Change in Power Purchase cost from other sources excluding own generation. (2) Chargeable FPCA from the consumers Metered Category FPCAM= AM / UM Un-Metered Category FPCAHP= AHP / LHP AM and AHP are to be arrived at by apportioning A on the basis of consumption of metered and un-metered category. UM is the number of units billed to metered consumers during quarter under consideration LHP is sum of the connected load of un-metered consumers at the end of each month for the quarter under consideration. (3) The approved formula is subject to the following: i. Commission can review the formula at any stage. ii. For levy of FPCA surcharge, petition containing the basis of calculations/authenticated data shall be submitted by TANGEDCO by August, November, February and May end each year for the FCA increases for the 1st,2nd, 3rd and 4th quarter, respectively, of each year. iii. The FPCA amount shall be calculated on the basis of norms fixed by the Commission for various parameters including SHR, Transit loss of coal,
iv.
v.
Auxiliary consumption at the thermal plants, T&D losses or any other parameter as may be specified by the Commission. The FPCA for the first quarter of a financial year, i.e., from April to June shall be worked out by TANGEDCO and submitted to the Commission by end of August of the year and approved by the Commission by the end of September of the same year so that FPCA is charged from October onwards. Similarly, FPCA for 2nd quarter of a financial year, i.e., from July to September shall be worked out by TANGEDCO and submitted to the Commission by November of that year and approved by the Commission by December of the same year, so that Fuel and Power Purchase Cost Adjustment is charged from January onwards. Similar schedule shall be followed for charging FCA for third and fourth quarters. Any under recovery/over recovery in cost pertaining to FPCA would be trued up based on the Audited accounts as a part of truing up exercise in the tariff determination process.
5.74
The Commission had in principle approved the implementation of FPCA mechanism, and also directed TANGEDCO to submit its preparedness, implementation plan and sample FPCA calculations for the last quarter, to the Commission for approval, within 30 days of issuance of last years Order. In line with the above directive TANGEDCO had submitted sample calculations for the last quarter for which data was available to the Commission, the same was withdrawn on 18th October 2012 and no further petition for recovery of actual fuel cost was filed. The Commission opines that this mechanism has been designed to benefit TANGEDCO by allowing it to recover its actual fuel cost, subject to prudence check in a speedy manner. Hence in line with the in principle approval of the implementation of the FPCA mechanism in the State, the Commission has decided not to allow the 4% escalation in fuel price as sought for by TANGEDCO in its petition for the current MYT period. TANGEDCO shall file quarterly FPCA petitions to the Commission to recover the actual cost of fuel incurred and the actual cost of power purchase, if the same are in variance from the figures approved in this Tariff Order. TANGEDCO is directed to file its FPCA petitions to the Commission starting this October 2013 as outlined in the formula and filing mechanism for calculating the FPAC.
5.75
5.76
5.77
Tariff rationalization and revision of retail supply tariffs

PF Incentive 5.78 The Commission has received comments from industrial consumers to reinstate the incentive for maintaining near about unity power factor.
Page 317 June 2013
Regulation 12 of TNERC Tariff Regulations states as under: 12. Power Factor The Commission may direct certain categories of consumers to maintain power factor at a prescribed level and allow incentive / disincentive for maintaining above / below the prescribed level 5.79 The amendment to the Supply Code Regulation introduced in Nov 2010 clearly brings out the reasons for removing the power factor incentive. The Commission is following same regulation for disincentive in PF below the prescribed level. Hence all the consumers are required to maintain the PF at the minimum prescribed levels in the regulation.
TOD Tariff 5.80 The Appellate Tribunals directive on peak hour charges in the Appeal No. 257 of 2012 dated 9th April, 2013, has been extracted below. 14.4 We notice that the State Commission has provided for 20% extra charge on energy charges for the energy consumed during peak hours i.e. 6:00 AM to 9:00 AM and 6:00 PM to 9:00 PM for the HT industrial consumers. On the other hand the HT industrial consumers are allowed a reduction of 5% in the energy charges for the consumption during off-peak hours i.e. from 10:00 PM to 5:00 AM, as an incentive for night hours consumption. These charges/incentive have been continuing from the past. However, the State Commission has decided to maintain the rates which were prevailing earlier and has not decided the rates based on some study. We find that the State Commission has provided disincentive for peak hours drawal in view of high cost of procurement of expensive power during peak hours and balance demand. However, incentive for off-peak hours has been continued despite shortage during the off-peak hours. 14.5 The aim of providing differential tariff for peak and off-peak hours is to shift load from peak to off-peak hours with a view to optimize the generation capacity and minimize the cost of power procurement for the distribution licensee. However, in the absence of a specific study for pricing of electricity at off-peak and peak hours, the weighted average of energy rates for the peak,off-peak and normal hours (other than peak and off-peaks) should be equal to the average energy rate decided for a particular category of consumer. In the present case when no specific study for peak/off-peak pricing has been carried out, the energy rate of the tariff decided by the Commission for the Appellant's category is lower than the weighted average rate of energy for peak, off-peak and the normal hours. 14.6 We also notice that the Restriction and Control Measures are also in vogue in the State and the HT industrial consumers are allowed a small quota of demand and energy during the peak hours. The drawal in excess of the specified quota results in imposition of penal rates at substantially higher rate than the normal rates. The State Commission may also consider whether in view of the Restriction and Control
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Measures and penal rates of excess drawal over the peak hours demand and energy quota whether there is any purpose of having a differential energy tariff ff-peak hours. 14.7 We, therefore, direct the State Commission to reconsider and re-determine the differential pricing of energy during peak and off-peak hours. Accordingly, the matter is remanded back to the State Commission. 5.81 The Commission feels that a detailed study pertaining to load pattern needs to be done by TANGEDCO. Hence Commission pending a detailed study, proposes to retain the peak hour charges and off peak rebate at the exiting levels. Commission directs TANGEDCO in this order to carry out a detail study on this regard and furnish the same to the Commission. Accordingly after reviewing the report furnished by TANGEDCO, Commission will address this issue in the next tariff order.
Continuation of ToD peak charge 5.82 The Commission has sought and analysed the system load curve data from July 2012 to May 2013. It can be inferred from the load data that there is no surplus even in the off- peak hours, even in the month of May to September when wind energy is available. Similarly in the peak hour, it is only the restricted demand under R&C that is being met. Hence it can be concluded that there is a shortage in the peak hours and no surplus power available in the off peak hours. Also with respect to the question of discontinuing the peak hour charge when R&C is being imposed, the Commission would like state that R&C by design enforces demand cut, in a situation of shortage. This mechanism unlike peak hour charge is not aimed at shifting load to other time slabs, as this mechanism ensures reduction in demand across all time slabs. Hence when even in the case of reduced demand the utility is procuring costly power to supply to its consumers, the question of disallowing that as a pass through does not arise. Various legislative and legal frameworks existing in the country which promote implementation of TOD as an important DSM tool are: Electricity Act The relevant provision of Section 62(3) of the Act which guides the SERCs to incorporate TOD tariff is: The Appropriate Commission shall not, while determining the tariff under this Act, show undue preference to any consumer of electricity but may differentiate according to the consumer's load factor, power factor, voltage, total consumption of electricity during any specified period or the time at which the supply is required or the geographical position of any area, the nature of supply and the purpose for which the supply is required.
5.83
5.84
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Tariff Policy The relevant provisions of the Tariff Policy, which define the tariff components and their applicability states as under: 8.4 Definition of tariff components and their applicability 1. Two-part tariffs featuring separate fixed and variable charges and Time differentiated tariff shall be introduced on priority for large consumers (say, consumers with demand exceeding 1 MW) within one year. This would also help in flattening the peak and implementing various energy conservation measures. National Electricity Policy Clause: 5.9.6 In order to reduce the requirements for capacity additions, the difference between electrical power demand during peak periods and off-peak periods would have to be reduced. Suitable load management techniques should be adopted for this purpose. Differential tariff structure for peak and off peak supply and metering arrangements (Time of Day metering) should be conducive to load management objectives. Regulatory Commissions should ensure adherence to energy efficiency standards by utilities. 5.85 Thus the Commission will maintain status quo for applying the time of day charges to prescribed consumers till the time the issue remanded by APTEL recently in Appeal No. 257 of 2012 is decided. The Commission further directs TANGEDCO to conduct a study of power purchase for consumption during peak hours and also take into cognisance the time slots during which the R&C is imposed. This will help in obtaining a clear understanding of the additional costly power purchase on one hand as well as relief availed under R&C and its impact on power purchase on the other.
5.86
Applicability of Revised Tariffs 5.87 The revised tariffs will be applicable from 21.06.2013. For cases where there is a billing cycle difference for a consumer with respect to the date of applicability of the revised tariff, the revised tariff should be made applicable on a pro-rata basis for the consumption. The bills for the respective periods as per existing tariff and revised tariffs shall be calculated based on the pro-rata consumption during each of these periods (units consumed during respective period arrived at on the basis of average unit consumption per day multiplied by number of days in the respective period falling under the billing cycle).
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A6:
TARIFF SCHEDULE
TARIFF FOR HIGH TENSION SUPPLY CONSUMERS

6.1 General Provisions applicable for High Tension Supply i. Categories of supply: The categories of supply are as specified in the Tamil Nadu Electricity Distribution Code and Tamil Nadu Electricity Supply Code. The HT tariff specified for different categories of HT consumers are also applicable to the consumers who are supplied at EHT level in accordance with above said Codes. ii. Harmonics: As specified in the Supply Code, when the consumer fails to provide adequate harmonic filtering equipment to avoid dumping of harmonics into Licensees network beyond the permissible limits as specified by CEA regulations, the consumer is liable to pay compensation at 15% of the respective tariff. As and when the consumer brings down the harmonics within the limit, compensation charges shall be withdrawn. The measurement of harmonics shall be done by the Distribution Licensee using standard meters/equipment in the presence of consumers or their representatives. This compensation charges is applicable to HT-I & HT-III category of consumers. TANGEDCO shall give three months clear notice to all consumers under these categories stating that they shall pay 15% compensation charges if the harmonics introduced by their load is not within the limits set by CEA. The TANGEDCO shall implement the compensation provision after three months period from the date of measurement if the harmonics measured is more than the permissible limits. iii. In case of supply under HT Tariff, except for HT tariff-IV and V, supply used for creating facilities for the compliance of Acts/Laws or for the facilities incidental to the main purpose of the establishment of the consumer, such as facilities extended to their employees/students/patients/residents as the case may be, within the premises of the consumer, shall be considered to be bonafide purpose. However, if such facilities are extended to the public, the energy consumption to such facilities shall be metered by the licensee separately and only the energy charged under appropriate LT tariff. Such metered energy consumption shall be deducted from the total energy consumption registered in the main meter of the HT/EHT supply for billing. iv. In case of supply under HT Tariff IA, IIA, II B and III, the use of electricity for residential quarters, within the premises, shall be metered separately by the licensee if opted by the consumer and only the energy shall be charged under LT Tariff IC. Such metered consumption shall be deducted from the total consumption registered in the main meter of the HT/EHT supply for billing. v. In case of HT supply under IA, IIA, IIB, III, the supply used for any additional construction of building within the consumers premises not exceeding 2000 square feet may be allowed from the existing service and charged under the existing tariff. The use of electricity for the additional construction beyond 2000 square feet and lavish illumination (as defined under LT tariff VI) shall be metered separately by the licensee and only the energy shall be charged under LT Tariff VI. Such metered
energy consumption shall be deducted from the total consumption registered in the main meter of the HT/EHT supply for billing. vi. Low Power Factor Compensation: In respect of High Tension service connections the average power factor of the consumers installation shall not be less than 0.90. Where the average power factor of High Tension service connection is less than the stipulated limit of 0.90 the following compensation charges will be levied.
Particulars Below 0.90 and up to 0.85 Below 0.85 to 0.75 Below 0.75 Dispensation of Power Factor compensation One per cent of the current consumption charges for every reduction of 0.01 in power factor from 0.90 One and half per cent of the current consumption charges for every reduction of 0.01 in power factor from 0.90 Two per cent of the current consumption charges for every reduction of 0.01 in power factor from 0.90
vii. Billable Demand: In case of HT Consumers, maximum Demand Charges for any month will be levied on the kVA demand actually recorded in that month or 90% of the contracted demand whichever is higher. Provided, that whenever the restriction and control measures are in force, the billable demand in case of two part tariff for any month will be the actual recorded maximum demand or 90% of demand quota, as fixed from time to time through restriction and control measures, whichever is higher. 6.2 High Tension Tariff I A:
Tariff Demand Charge Energy charge in Rs/kVA/ in Paise per kWh month (Unit) 300 550
Tariff category High Tension Tariff I A
i.
This Tariff is applicable to: a) All manufacturing and industrial establishments and registered factories including Tea Estates, Textiles, Fertilizer Plants, Steel Plants, Heavy Water Plants, Chemical plants, b) Common effluent treatment plants, Industrial estates water treatment/supply works,
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c) Cold storage units
ii.
This tariff is also applicable to Information Technology services as defined in the ICT Policy 2008 of Government of Tamil Nadu. The definition is reproduced below: IT services are broadly defined as systems integration, processing services, information services outsourcing, packaged software support and installation, hardware support and installation. Information Technology Services includes:
a) Systems integration includes:
1) Network Management Services 2) Applications Integration b) Processing services includes: 1) Outsourced Services in Banking, HR, finance, Technology and other areas 2) Outsourced Bank office support or Business transformation and Process Consulting Services. c) Information Services Outsourcing includes: 1) Outsourced Global Information Support Services 2) Knowledge Process Outsourcing 3) Outsourced Global Contact Centre Operations 4) Outsourced Process Consulting Services.
d) Packaged Software Support and Installation includes:
1) Software Design and Development, Support and Maintenance 2) Application installation, support and maintenance 3) Application testing. e) Hardware Support and Installation includes: 1) Technical and network operations support 2) Hardware installation, administration and management
3) Hardware infrastructure maintenance and support iii. The HT Industrial consumers (HT IA) shall be billed at 20% extra on the energy charges for the energy recorded during peak hours. The duration of peak hours shall be 6.00 A.M to 9.00 A.M and 6.00 P.M to 9.00 P.M. The HT Industrial Consumers (HT I A) shall be allowed a reduction of 5% on the energy charges for the consumption recorded during 10.00 P.M to 5.00 A.M as an incentive for night consumption. High Tension Industries under Tariff I-A having arc, induction furnaces or steel rolling process the integration period for arriving at the maximum demand in a month will be fifteen minutes.
iv.
v.
6.3
High Tension Tariff I B:

Tariff Tariff category High Tension Tariff I B Demand Charge in Rs/kVA/ month 250 Energy charge in Paise per kWh (Unit) 550
i. 6.4
This tariff is applicable to Railway traction.
High Tension Tariff II-A

Tariff Tariff category High Tension Tariff II A Demand Charge in Rs/kVA/ month 300 Energy charge in Paise per kWh (Unit) 450
i.
This tariff is applicable for the following services under the control of Central/State Governments /Local Bodies/TWAD Board/CMWSSB: a) Educational institutions including government aided educational institutions and Hostels. b) Teaching and Training institutions of Ministry of Defence and CRPF establishments, c) Hospitals, Primary Health Centres and Health Sub-Centres, Veterinary Hospitals, Leprosy Centres and Sub-Centres.
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d) Public Water works and sewerage works and Desalination plants, e) Residential colonies and Housing complexes, Senior citizen communities, Old age Homes and Orphanages, f) Public Lighting and Electric crematorium.
g) Public Libraries and Art Galleries, h) Research Laboratories and institutions i) Dairy units ii. This tariff is also applicable to the following a) Hospitals and Rehabilitation centres, Training & Rehabilitation centres, Old Age Homes and Orphanages run by charitable trusts which offer totally free treatment/services for all categories of patients/inmates on par with government hospitals and institutions. b) Desalination plant at Kudankulam Nuclear Power Plant and Minjur Desalination plant of Chennai Water Desalination Ltd. Water Supply Works by new Tirupur Area Development Corporation as long as they supply drinking water predominantly to local bodies/public. c) Single point supply to Cooperative group housing society and for the residential purpose of the employees as specified in The Electricity (Removal of difficulties) Eighth Order 2005. d) Actual places of public worship. 6.5 High Tension Tariff II B :
Tariff Tariff category High Tension Tariff II B Demand Charge in Rs/kVA/ month 300 Energy charge in Paise per kWh (Unit) 550
i.
The tariff is applicable to all Private educational institutions and hostels run by them.
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6.6
High Tension Tariff III :

Tariff Tariff category High Tension Tariff III Demand Charge in Rs/kVA/ month 300 Energy charge in Paise per kWh (Unit) 700
i.
This tariff is applicable to all other categories of consumers not covered under High Tension Tariff IA, IB, IIA, IIB, IV and V.
6.7
High Tension Tariff IV :

Approved Tariff rate Tariff category Demand Charge in Rs/kVA/ month Nil Energy charge in Paise per kWh 350 Subsidy for Energy Charges in Paise per kWh 350 Tariff rate payable by Consumer Demand Charge Energy in Rs/kVA/ charge month in Paise per kWh
High Tension Tariff IV
Nil
Nil
i.
This tariff is applicable to the Lift Irrigation Societies for Agriculture registered under Co-operative Societies or under any other Act.
6.8
High Tension Tariff V

Tariff Tariff category Demand Charge in Rs/kVA/ month 300 Energy charge in Paise per kWh (Unit) 950
High Tariff V
Tension
i.
This tariff is applicable to Temporary supply for construction and for other temporary purposes. a) For this category of supply, the initial/in-principle approval for such construction or to conduct such temporary activity obtained by the applicant from the appropriate authority, wherever necessary, is adequate to effect the supply. b) In case of conversion of temporary supply into applicable permanent supply, the same shall be done subject to compliance of codes/regulations/orders.
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c) This tariff is also applicable to start-up power provided to generators. The generators are eligible to get start-up power under this tariff after declaration of CoD. The demand shall be limited to 10% of the highest capacity of the generating unit of the generating station or the percentage auxiliary consumption as specified in the regulation, whichever is less. The supply shall be restricted to 42 days in a year. Drawal of power for a day or part thereof shall be accounted as a day for this purpose. Power factor compensation charges are not applicable for start-up power.
TARIFF FOR LOW TENSION SUPPLY CONSUMERS

6.9 General Provisions applicable for Low Tension Supply i. All motors/pump sets connected in this category of supply shall be certified / approved by BIS/BEE and motors/pump sets of 3 HP and above shall be provided with adequate BIS certified capacitors. Non compliance shall invite compensation charges as specified in the Codes/regulations. In case of LT Tariff III-B and LT Tariff V, all services with a connected load of 18.6 kW (25 HP) and above should maintain a power factor of not less than 0.85. Where the average power factor of Low Tension Service connection is less than the stipulated limit of 0.85 the following compensation charges will be levied.
Power Factor Below 0.85 and upto 0.75 Below 0.75 Dispensation of Power Factor compensation One per cent of the current consumption charges for every reduction of 0.01 in power factor from 0.85. One and half per cent of the current consumption charges for every reduction of 0.01 in power factor from 0.85
ii.
iii.
In the event of disconnection of services, the consumers shall be liable to pay the fixed charges applicable for the respective category during the disconnection period. In case of LT Tariff IIB 1, II B2, IIC, IIIA 1, IIIA2, IIIB, V and VI, the fixed charges shall be calculated based on the contracted demand. Supply used for any additional construction of building not exceeding 2000 square feet within the consumers premises shall be charged under the respective existing tariff except in case of LT tariff I-B and IV. The use of electricity for the additional construction purposes beyond 2000 square feet shall be provided with a separate service connection by the licensee and charged under LT Tariff VI.
iv.
v.
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6.10
Low Tension Tariff 1-A :

Tariff rate payable by Subsidy consumer for Energy Energy Fixed Fixed charges Energy Charges charges charges (Rupees per Charges in in paise / (Rupees per in paise / month) paise / kWh kWh kWh month) For consumers who consume upto 50 units per month or 100 units for two months From 0 to 50 units per month (or) 0 to 100 10 260 160 10 100 units for two months For consumers who consume from 51 units to 100 units per month (or) 101 to 200 units for two months From 0 to 100 units per month (or) 0 to 10 280 130 150 10 200 units for two months For consumers who consume from 101 units to 250 units per month (or) 201 units to 500 units for two months From 0 to 100 units per month (or) 0 to 300 100 200 200 units for two months 15 15 From 101 to 250 units per month (or) 201 to 400 100 300 500 units for two months For consumers who consume 251 units and above per month (or) 501 units and above for two months From 0 to 100 units per month (or) 0 to 300 Nil 300 200 units for two months From 101 to 250 units per month (or) 201 to 20 20 400 Nil 400 500 units for two months From 251units and above per month (or) 575 Nil 575 501 units and above for two months On account of Government subsidy, there will be no fixed and energy charges for Handloom consumers consuming up to 100 units for two months and if consumption exceeds 100 units for 2 months they will be charged as per slab mentioned above and Rs. 100 will be deducted from the bill amount. Consumption slabs Range in kWh(units) and billing period (one or two months) Approved Tariff rate
Tariff
Low Tension Tariff I-A
i.
This tariff is applicable to the following: a) Domestic/Residential purposes of lights, fans, Air conditioners, radio/TV and all other home appliances. b) Supply used in the house/residence/premises for the following purpose with a total connected load not exceeding 2 kW.
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1. To provide lighting, water and other facilities to domestic animals/pets including chaff cutting, milking etc. 2. Watering for gardening including growing of trees in and around residential houses/buildings. c) Handlooms in residences of handloom weavers and handlooms in sheds regardless of use of outside labour and where energy is availed of only for lighting, fans and all other residential uses. d) Public conveniences and Integrated woman sanitary Complexes. e) Community Nutrition Centres, Anganwadi Centres and Nutritious Meal Centers. f) Old Age Homes, Leprosy Centers and sub centres. Orphanages, Homes for destitute run by Government/Local bodies/Charitable Institutions rendering totally free services. g) Consulting rooms of size limited to 200 square feet of any professionals attached to the residence of such professionals. This facility is extended exclusively to take advantage of using the residence by the professionals. h) In respect of multi tenements/residential complexes supply used for common lighting, water supply, lift and such other facilities provided only to the residents alone may be given a separate connection and charged under this tariff. Only one service connection shall be given for the premises for all common facilities. i) In respect of multi tenements/multistory flats/residential complexes having both domestic and non-domestic utilities, common facilities such as common lighting, common water supply, lift and such other facilities will be charged under this tariff only if the non-residential built up area does not exceed 25% of the total built up area. j) In multi tenements residential buildings/Group Houses the additional service connections requested by the owners/tenants shall be given. If only a meter is required to effect the additional service connection, service line charges shall not be collected. k) Electric crematorium of local bodies. l) Handicraft/Artisan works carried out by Potters, Goldsmiths etc. attached to the residence, done predominantly by self or family members using a connected load not exceeding 1 kW. This facility is extended exclusively to take advantage of utilizing the space in and around the residence and participation of family members in the small scale production.
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m) Any additional lights, serial lights etc. used in the pandals/shamiana and in the premises of the existing domestic/residential service connection of the consumer for a period not exceeding one week at a time, with a connected load not exceeding 3 kW for the family functions/occasions. 6.11 Low Tension Tariff I-B:
Approved Tariff Rate Energy charges in Paise / kWh Nil Subsidy for Fixed Charges/ Energy Charge 125 Rupees /service/ Month 430 Paise/kWh Tariff Rate payable by Consumer Fixed Charges (Rupees / Month) Nil Energy charges in Paise / kWh
Tariff
Description
Fixed charges (Rupees / Month) 125
Low Tension Tariff I-B
Till installation of Energy Meter On Installation of Energy Meter
Nil
430
Nil
Nil
Nil
i.
This tariff is applicable to huts in Village Panchayats and special grade panchayats, houses constructed under Jawahar Velai Vaiippu Thittam, TAHDCO Kamarajar Adi Dravidar housing schemes, huts in Nilgiris District and hut with concrete wall in the schemes of state and central Governments. This tariff is applicable subject to following conditions: a) Hut means a living place not exceeding 250 square feet area with mud wall and the thatched roof / tiles / asbestos / metal sheets like corrugated G.I. sheets for roofing/ concrete Roof and concrete wall with specification of square feet as approved in the schemes of State/ Central Government. b) Only one light not exceeding 40 watts shall be permitted per hut. c) As and when the government provides other appliances such as Colour TV, fan, Mixie, Grinder and Laptops to these hut dwellers, the usage of appropriate additional load may be permitted.
ii.
Whenever the norms prescribed in (a) to (c) above is violated, the service category shall be immediately brought under Low Tension Tariff I-A and billed accordingly
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6.12
Low Tension Tariff I-C:

Tariff Tariff Energy charges in paise / kWh 400 Fixed charges (Rupees / Month) 50
Low Tension Tariff I-C
i.
This tariff is applicable to LT bulk supply for residential colonies of employees such as railway colonies, plantation worker colonies, defence colonies, Police Quarters, Residential quarters of Koodankulum Nuclear power project etc. The energy charge of this tariff is also applicable for the HT/EHT consumers who opt for extending supply under this category for their residential colonies / quarters. Single point supply to Cooperative group housing society and for the residential purpose of the employees as specified in The Electricity (Removal of difficulties) Eighth Order 2005.
ii.
iii.
6.13
Low Tension Tariff II-A:

Tariff Energy Charges in paise/KWh fixed charges (Rupees /Month) Nil
Low Tension Tariff II-A
550
i.
This tariff is applicable to Public Lighting by Government/Local Bodies and Public Water Supply & Public Sewerage System by Government/Local Bodies /TWAD Board/CMWSSB. Private agriculture wells/private wells hired by Government/Local bodies/CMWSSB/TWAD Board/ to draw water for public distribution. Public Water Supply by New Tirupur Area Development Corporation as long as they supply drinking water predominantly to local bodies/public and Public Water Supply in plantation colonies. Separate service connections for street lights for SIDCO and other industrial estates. Supply to Railway level crossings.
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ii.
iii.
iv.
v.
6.14
Low Tension Tariff II-B (1)

Tariff Tariff Energy charges in paise / kWh Low Tension Tariff II-B (1) 500 Fixed charges (in Rupees per kW per month) 50
i.
This tariff is applicable to the following entities owned or aided by the Government/Government Agencies/Local Bodies: a) Educational/Welfare Institutions and Hostels run by such institutions, Other Hostels, Youth/Student Hostels and Scouts camps. b) Hospitals, Dispensaries, Primary Health Centers & sub-centers and Veterinary Hospitals. c) Research Laboratories/Institutes, d) Elephant Health camp e) State Legal Udhavi Maiyam. f) Art Galleries and Museums g) Public libraries
ii.
This tariff is applicable to the following entities which offer totally free services. a) Dispensaries, Creches and Recreation centers. b) Libraries. c) Emergency accident relief centers on highways, Hospitals and Rehabilitation Centres for mentally ill & blind and others, Terminal cancer care centre and Hospital in Tribal areas. d) Institutes run for /by the physically challenged. e) Training & Rehabilitation centres. f) Student Hostel.
iii.
This tariff is also applicable to Private Art Galleries and Museums run with service motive.
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6.15
Low Tension Tariff II-B (2)

Tariff Energy charges in paise / kWh 650 Fixed charges (in Rupees per kW per month) 50
Tariff Low Tension Tariff II-B (2)
i.
This tariff is applicable to Private educational institutions and hostels run by them.
6.16
Low Tension Tariff II-C:

Approved Tariff Rate Tariff Consumption slabs Range in kWh and billing period Fixed Charges (Rupees per kW per month) Energy Charges in Paise per kWh Tariff Rate Payable by the Consumer Energy Fixed Charges in Charges Paise per (Rupees kWh per kW per month) 250 50 500 Nil 500
Subsidy for Energy Charges in Paise per kWh
Low Tension Tariff II-C
0 to 60 units per month or 0 to 120 units bimonthly Above 60 units per month or above 120 units bimonthly
500 50
250
i.
This tariff is applicable to actual places of public worship including Trichy Rockfort temple, its environs and for the road and path ways leading to the temple. The existing concessions to the actual places of worship as already notified by GoTN having annual income less than Rs. 1000 shall be continued under the same terms and conditions, until further Order of the Commission.
ii.
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6.17
Low Tension Tariff III-A (1):

Tariff Tariff Consumption slabs Range in kWh and billing period Fixed Charges (Rupees per kW per month) Energy Charges in Paise per kWh 350 15 400
Low Tension Tariff III-A(1)
0 to 250 units per month or 0 to 500 units bimonthly From 251 units and above units per month or 501 units and above bimonthly
i.
The connected load for supply under this tariff category shall not exceed 10 HP. This tariff is applicable to Cottage and tiny industries, Micro enterprises engaged in the manufacture or production of goods pertaining to any industries specified in the first schedule to Industries (Development and Regulations) Act 1951 (Central Act 65 of 1951). The intending consumers applying for service connection under LT Tariff III A (1) claiming to have established the micro enterprise engaged in the manufacture or production of goods shall produce the cottage industries certificates from the industrial department /acknowledgement issued by the District Industries Centre under the Micro Small and Medium Enterprises Development Act, 2006 (Act 27 of 2006 ) as proof for having filed Entrepreneurs Memorandum for setting up of Micro Enterprises for manufacture or production of goods with District Industries Centre under whose jurisdiction the Enterprise is located. The existing consumers who are classified under LT Tariff III A (1) based on the SSI / Tiny Industries Certificate may be continued to be charged under the same tariff This tariff is applicable to Small Gem cutting units, Waste land development, laundry works and Common effluent treatment plants. This tariff is also applicable to Coffee grinding, Ice factory, Vehicle Body building units, saw mills, rice mills, flour Mills, battery charging units and Dairy units. This tariff is also applicable for sericulture, floriculture, horticulture, mushroom cultivation, cattle farming, poultry & bird farming and fish/prawn culture.
ii.
iii.
iv.
v.
vi.
vii.
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viii.
This tariff is also applicable for pumping of water/supply of water for the purpose of agriculture and allied activities as specified in LT Tariff IV provided that the applicant is unable to get supply under LT tariff IV as per the seniority maintained specifically for the purpose of providing supply to Agriculture under LT tariff IV. Such LT Tariff III-A(1) consumer is eligible to apply for LT Tariff IV. As and when such applicant becomes eligible to get regular supply under LT Tariff IV as per the specific seniority maintained for that purpose by the licensee, the supply obtained under LT Tariff III-A(1) for the specific purpose mentioned in this sub clause shall be converted into LT tariff IV. Thereafter, the terms and conditions of LT Tariff IV only will apply.
6.18
Low Tension Tariff III-A (2):

Tariff Rate payable by Subsidy for consumer energy in Consumption Paise/kWh Fixed Fixed slabs Range in Energy and fixed Charges Charges Energy kWh and billing Charges in charges in (Rupees per (Rupees per Charges in period Paise per Rs/kW per kW per kW per Paise per kWh kWh month month) month) (i) For consumer who consume up to 250 units per month (or) 500 units for two months 0 to 250 units per month or 0 to 450/kWh 50 450 Nil Nil 500 units Rs.50/kW/pm bimonthly ii) For consumers who consume 251 units and above per month (or) 501 units and above for two months 0 to 250 units per 450/kWh month or 0 to 500 450 Nil Rs.20/kW/pm units bimonthly 251 to 500 units per month or 300/kWh 500 200 501 to 1000 units Rs.20/kW/pm bimonthly 501 to 750 units 50 30 per month or 200/kWh 300 500 1001 to 1500 Rs.20/kW/pm units bimonthly From 751 units and above per 100/kWh month or 1501 500 400 Rs.20/kW/pm units and above bimonthly Approved Tariff Rate
Tariff
Low Tension Tariff III-A (2)
i. ii.
The connected load shall not exceed 10 HP under this category. The tariff is applicable to Power looms, Braided Cords Manufacturing and related ancillary tiny industries engaged in warping, twisting, and winding.
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6.19
Low Tension Tariff III-B:
Tariff
Fixed Charges (Rupees per kW per month)
Energy Charges in Paise per kWh
Low Tension Tariff III-B
30
550
i.
This tariff is applicable to all industries not covered under LT Tariff III A (1) and III-A (2). All industries covered under LT Tariff III A (1) and III A (2) shall also fall under this tariff category if the connected load of such industries exceeds 10 HP. This tariff is also applicable to Welding sets irrespective of its capacity. Supply to welding sets shall be charged 15% extra. This tariff is applicable to Information Technology services as defined in the ICT Policy 2008 of Government of Tamil Nadu and amended from time to time. The definition is reproduced below: IT services are broadly defined as systems integration, processing services, information services outsourcing, packaged software support and installation, hardware support and installation. Information Technology Services includes: a) Systems integration includes : 1) Network Management Services 2) Applications Integration b) Processing services includes: 1) Outsourced Services in Banking, HR, finance, Technology and other areas 2) Outsourced Bank office support or Business transformation and Process Consulting Services. c) Information Services Outsourcing includes: 1) Outsourced Global Information Support Services 2) Knowledge Process Outsourcing 3) Outsourced Global Contact Centre Operations 4) Outsourced Process Consulting Services.
ii.
iii.
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d) Packaged Software Support and Installation includes: 1) Software Design and Development, Support and Maintenance 2) Application installation, support and maintenance 3) Application testing. e) Hardware Support and Installation includes: 1) Technical and network operations support 2) Hardware installation, administration and management 3) Hardware infrastructure maintenance and support. iv. The intending consumers applying for service connection under LT Tariff III B claiming to have established the industries engaged in the manufacture or production of goods shall produce certificate from the District Industries centre.
6.20
Low Tension Tariff IV:

Approved Tariff rate Fixed Energy charges charges in (Rupees per Paise / kWh HP per annum) Nil 280 2500 Nil Tariff rate payable by consumer Fixed Charges Energy charges in (Rupees per Paise / kWh HP per annum Nil Nil Nil Nil
Tariff
Description
Subsidy for Fixed Charges / Energy Charge Rs. 2500 per HP per annum 280 paise/kWh
Low Tension Tariff IV
Till installation of Energy Meter On Installation of Energy Meter
i.
This tariff is applicable for pumping of water/supply of water to all agricultural and allied activities such as cultivation of food crops, vegetables, seeds, trees and other plants. Sericulture, floriculture, horticulture, mushroom cultivation, cattle farming, poultry and other bird farming, fish/prawn culture carried out as allied activities of agriculture shall be construed as agricultural activities. The services under this tariff shall be permitted to have lighting loads up to 50 watts per 1000 watts of contracted load subject to a maximum of 150 watts inclusive of wattage of pilot lamps for bonafide use . Subject to the limit of contracted load, the supply under this category can be utilised for milking, sugar cane crushing, harvesting, stalk/chaff cutting, thrashing and cleaning of agricultural produces, crane used for lifting mud/silt from well by having a change over switch as approved and sealed by the licensee. The change over switch is meant for using the supply either to the pump set or to any one or more of the purposes mentioned in this clause. Using supply both to the pump sets and to the other purpose(s) at the
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ii.
iii.
same time is strictly prohibited. The consumer shall abide by the safety norms for any additional wiring for this purpose. iv. This tariff is applicable irrespective of owner ship of land if the usage of electricity is for agriculture and its allied activities. Agricultural consumers shall be permitted to use the water pumped from the well for bonafide domestic purposes in the farmhouse including for construction of farm house and sheds for allied works. Supply for other purpose exceeding the limit permitted for lighting purpose shall be provided only by separate service connections under appropriate LT Tariff. Service connections for water pumping for non agricultural purpose under appropriate tariff is permitted in the same well. This Tariff is applicable to pump sets of Tamil Nadu Agriculture university and Research centres, Government Seed Farms, pump sets of Tamil Nadu Forest department, Pump sets of Government coconut nurseries, Pump sets of Government oil seed farms. Pumping and purifying of drainage water for the purpose of agriculture use.
v.
vi.
vii.
viii. 6.21
Low Tension Tariff V:

Energy Charges in Paise per kWh 430
Tariff
Consumption slabs Range in kWh and billing period
Fixed Charges (Rupees per kW per month)
Low Tension Tariff V
For consumer with consumption 50 units per month or 100 units bimonthly For consumer with consumption above 50 units per month or above 100 units bimonthly (For all units)
60
60
700
i.
This tariff is applicable to consumers not categorized under LT IA, IB, IC, IIA, IIB (1), II B (2), IIC, IIIA (I), III A (2), IIIB, IV and VI In respect of multi tenements/multi-storeyed buildings/residential complexes where the number of flats/Tenements utilized for commercial and other purposes exceeds 25% of the total built up area, the LT services relating to common utilities such as common lighting, water supply, lift and other facilities shall be charged under this tariff.
ii.
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6.22
Low Tension Tariff VI:

Tariff Fixed Charges (Rupees per kW per month) Energy charges in paise/kWh
1050 Low Tension Tariff VI 300
i.
This tariff is applicable for supply of power for temporary activities, construction of buildings and lavish illumination. The electricity supply for the additional construction beyond 2000 square feet in the premises of an existing consumer shall be provided only through a separate service connection and charged under this tariff. For temporary supply, the initial/in-principle approval for such construction or to conduct such temporary activity obtained by the applicant from the appropriate authority, wherever necessary, is adequate to effect the supply. In case of conversion of temporary supply into applicable permanent supply, the same shall be done subject to compliance of codes/regulations/orders. In case of lavish illumination, if the illumination is done frequently or permanently, separate regular service connection shall be provided for lavish illumination and charged under this tariff. If the supply is availed for short duration for the temporary activity/illumination from an existing metered service connection, the computation of energy/fixed charges for temporary illumination/activity shall be done based on the connected load and duration of temporary supply. Connected load shall be accounted in kW or part thereof. Fixed charges shall be for a month or part thereof. Due credit for such computed energy, limited to the meter consumption of the respective billing period, shall be given in the energy recorded by the meter during the respective billing period for the purpose of regular billing of the existing service connection. The consumer shall abide by the safety norms for wiring. The following are considered as Lavish Illumination. a) Illumination done for hoardings & advertisement boards. b) Extra/additional illumination done outside the building and in the open areas for parties/functions/occasions.
ii.
iii.
iv.
v.
vi.
vii.
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c) Illumination done in the outer surface/outside the buildings/shops by display lights, serial lamps, decorative lights, special effect lamps, neon lamps, ornamental lamps, flood lights etc. d) Temporary Illumination done for public meetings in pandals/shamianas, path ways, streets and roads. Explanation: The supply used for the purpose of indicating/displaying the name and other details of the shop/buildings shall not be considered as lavish illumination. 6.23 Applicability of the Tariff Schedule i. The above tariff schedule shall be read with the General Terms and Conditions of Supply Code and Distribution code specified by the Commission. Effecting change in tariff category for a consumer in accordance with this order shall be the responsibility of TANGEDCO. The tariff schedule of this order shall be displayed prominently by the licensee in all section and other offices of TANGEDCO.
ii.
iii.
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A7:
7.1
SUMMARY OF DIRECTIVES
The Commission directs TANGEDCO a) To file their Tariff Petition on a timely basis every year, as per the TNERC Tariff Regulations. b) To maintain quality of supply as specified in Tamil Nadu Electricity Distribution Standards of Performance Regulations dated 21-07-2004. c) To effectively monitor the on-going projects so that they are commissioned without further delay. The projects which were scheduled to get commissioned last year but have not been so far have to be commissioned at the earliest. TANGEDCO should also ensure that the TANTRANSCO also simultaneously completes all the associated transmission system for evacuation of power from the generating stations which are getting commissioned during the year 201314, so that power generated is transmitted up to the load centres without any bottle necks. TANGEDCO should also ensure that the power should be delivered to the consumption points by way of appropriate distribution network. All these capacity addition as well as system strengthening plans will have to be carried out through a well structured cohesive business plan and detailed individual schemes catering to the need of the business plan. All such plans and schemes shall be submitted to the Commission in accordance with the Terms and Conditions of Tariff Regulations 2005, MYT Tariff Regulations 2009, as well as Licensing Regulations 2005. The submission for approval in this regard so far has been highly unsatisfactory. The Commission has been addressing the utilities by way of letters as well as by way of directions. The compliance to such letters and directions will have to be serious and without fail. d) To file separate petition for the approval of capital cost and tariff determination of new power plants including hydro stations, within 90 days of issuance of this Order. e) To file the progress of the capital expenditure and capitalization on a quarterly basis. f) The amount approved for R&M expenses should not be diverted for any other purpose. g) To comply with the Order on SMP 3 dated 4th June 2013 for accurate measurement of T&D Loss and unmetered consumption. h) To submit a time bound program for 100% metering at feeder level and at distribution transformer level.
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i) To submit data on ToD consumption along with the subsequent Tariff Application for all consumers where ToD meters have been installed. The power purchase for meeting this demand should also be studied by TANGEDCO, while taking into consideration the R&C measures in vogue. j) To introduce kVAh billing for LT and HT consumers. k) To provide the monthly energy demand and availability and its plan of scheduling power in accordance to MoD on quarterly basis. l) To take prior approval for purchasing energy from unapproved sources for quantum and rate than that specified by the Commission in this Tariff Order. m) To take prior approval for power procurement with variable cost more than Rs. 3.50 from unapproved sources and sources not getting dispatched under MoD, before purchasing energy. n) To pay transmission charges determined by the Commission to TANTRANSCO based on the allotted transmission capacity for FY 2013-14. o) To file to the Commission its quarterly FPCA petitions starting this October, to recover the actual cost of fuel incurred and the actual cost of power purchase. p) To start maintaining regulatory accounts for the purpose of ARR. q) To comply with various provision of Energy Conservation Act 2001 pertaining to energy audit. r) To submit a study report on computation of voltage wise cost to serve (CoS) along with the basis of allocation of different costs and losses to various voltage levels. The Commission also directs TANGEDCO to submit the action taken report within 90 days of the issuance of this order.
Sd/(S. Nagalsamy) Member (By Order of the Commission)
Sd/(K. Venugopal) Member
Sd/(S. GUNASEKARAN) SECRETARY Tamil Nadu Electricity Regulatory Commission


T.P. No. 1 of 2013 Dated 20-06-2013

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T.P. No. 1 of 2013 Dated 20-06-2013

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013

TAMIL NADU ELECTRICITY REGULATORY COMMISSION

Tamil Nadu Electricity Regulatory Commission

Determination of Tariff for Generation and Distribution Order dated 20-06-2013

: Thiru. K.Venugopal Member Thiru. S.Nagalsamy Member

T.P. No. 1 of 2013 Date of Order: 20-06-2013

In the matter of: Determination of Tariff for Generation and Distribution

Sd/(S. Nagalsamy) Member

Determination of Tariff for Generation and Distribution Order dated 20-06-2013

Tamil Nadu Electricity Regulatory Commission

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013

Tamil Nadu Electricity Regulatory Commission

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013

Tamil Nadu Electricity Regulatory Commission

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013

Tamil Nadu Electricity Regulatory Commission

Determination of Tariff for Generation and Distribution Order dated 20-06-2013

Tamil Nadu Electricity Regulatory Commission

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013

Tamil Nadu Electricity Regulatory Commission

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013

Brief Note on Tariff Filing and Public Hearing

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013

Tamil Nadu Electricity Regulatory Commission

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013

Layout of the Order

Tamil Nadu Electricity Regulatory Commission

Determination of Tariff for Generation and Distribution Order dated 20-06-2013

Approach of the order

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013

STAKEHOLDERS COMMENTS, TANGEDCOS REPLY AND COMMISSIONS VIEW

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013

2.15 2.16 2.17 2.18 2.19 2.20

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Determination of Tariff for Generation and Distribution Order dated 20-06-2013