BESCOM Order

KARNATAKA ELECTRICITY REGULATORY COMMISSION
TARIFF ORDER 2017

OF
BESCOM
ANNUAL PERFORMANCE REVIEW FOR FY16
&
REVISION OF ANNUAL REVENUE REQUIREMENT

FOR FY18
&
REVISION OF RETAIL SUPPLY

TARIFF FOR FY18
11th April 2017
6th and 7th Floor, Mahalaxmi Chambers

9/2, M.G. Road, Bengaluru-560 001
Phone: 080-25320213 / 25320214
Fax : 080-25591412 / 25320338
Website: www.karnataka.gov.in/kerc - E-mail: kerc-ka@nic.in
CONTENTS
CHAPTER
Page No.
1.0 Bangalore Electricity Supply Company Ltd 3
1.1 BESCOM at a Glance 5
1.2 Number of Consumers, Sales in MU to various 5
categories of Consumers and details of Revenue
for FY-16
2.0 Summary of Filing & Tariff Determination Process 7
2.1 Preliminary Observations of the Commission 7
2.2 Public hearing Process 8
2.3 Consultation with the Advisory Committee of the 9
Commission.
3 Public Consultation-Suggestions/Objections and 10
Replies
3.1 10
List of Persons who have filed written objections
3.2 11
List of Persons who have made oral Submissions
4 Annual Performance Review for FY16 17
4.0 BESCOM’s Application for APR for FY16 17
4.1 BESCOM’s Submission 17
4.2 BESCOM’S Financial Performance as per 19
Audited Accounts for FY16.
4.2.1 Sales for FY16 20
4.2.2 Distribution Losses for FY16 29
4.2.3 Power Purchase for FY16 30
4.2.4 RPO Compliance by BESCOM for FY16 33
4.2.5 Operation and Maintenance Expenses 36
4.2.6 Depreciation 40
4.2.7 Capital Expenditure for FY-16 42
4.2.8 Interest and Finance Charges 56
4.2.9 Other Debits 61
4.2.10 Net Prior Period Charges 62
4.2.11 Return on Equity 62
4.2.12 Income Tax 65
4.2.13 Other Income 65
4.2.14 Fund towards Consumer Relations/Consumer 66
Education.
4.2.15 Carrying cost on Regulatory Asset 67
4.2.16 Revenue Demand for FY16 68
4.2.17 Subsidy for FY16 69
4.3 Abstract of Approved ARR for FY16 70
4.4 Gap in Revenue for FY16 71
5.0 Revised Annual Revenue Requirement for FY 18 72
Application.
5.1 Annual Performance Review for FY16 73
5.2 Revised Annual Revenue Requirement for FY18 74
ii
5.2.1 Capital investments for FY18 74
5.2.2 Sales Forecast for FY18 76
5.2.3 Distribution Losses for FY18 89
5.2.4 Power Purchase for FY18 91
5.2.5 RPO Target for FY18 95
5.2.6 O & M Expenses for FY18 97
5.2.7 Depreciation 101
5.2.8 Interest on Capital Loans 103
5.2.9 Interest on Working Capital 105
5.2.10 Interest on Consumer Security Deposit 106
5.2.11 Other Interest & Finance Charges 107
5.2.12 Interest & other expenses capitalised 108
5.2.13 Return on Equity 108
5.2.14 Other Income 111
5.2.15 Fund towards Consumer Relations/Consumer 111
Education
5.3 Contribution towards Pension & Gratuity Trust 112
5.4 Abstract of Revised ARR for FY18 113
5.5 Segregation of ARR into ARR for Distribution 115
Business and ARR for Retail Supply Business
5.6 Gap in Revenue for FY18 116
6 Determination of Retail Supply Tariff for FY18 118
6.0 Revision of Retail Supply Tariff for FY18- BESCOM’s 118
Proposals and Commission’s Decisions.
6.1 Tariff Application 118
6.2 Statutory provisions guiding determination of 118
Tariff
6.3 Factors considered for Tariff setting 119
6.4 New Tariff proposals by BESCOM 120
6.5 Revenue at existing tariff and deficit for FY18 129
6.6 Category-wise existing, proposed and approved 130
Tariff
6.7 Wheeling and Banking charges 161
6.7.1 BESCOM’s proposal 161
6.7.2 Wheeling within BESCOM Area. 162
6.7.3 Wheeling of Energy using Transmission Network 163
or Network of more than one Licensee
6.7.4 Charges for wheeling of Energy by RE 164
Sources(NON-REC ROUTE) to Consumers in the
State
6.7.5 Charges for wheeling Energy by RE Sources 164
wheeling energy from the State to a
Consumer/Others outside the State and for
those opting for Renewable Energy
Certificate(REC)
6.8 Banking Charges and Additional Surcharge 165
6.9 Cross SUBSIDY Surcharge(CSS) 166
6.10 Other issues 168
6.10.1 Tariff for Green Power 168
6.11 Other Tariff related issues 169
iii
6.12 Cross Subsidy Levels for FY18 171
6.13 Effect of Revised Tariff 171
6.14 Summary of the Tariff Order 172
6.15 Commission’s Order 174
Appendix 175
Appendix-1 223
iv
LIST OF TABLES
Table Content Page
No. No.
4.1 APR for FY16-BESCOM’s Submission 18
4.2 Financial Performance of BESCOM for FY16 19
4.3 BESCOM’s Accumulated Profits/Losses 20
4.4 Approved and Actual Sales for FY16 21
4.5 Format for IP Set Consumption as per feeder wise 25
data
4.6 Approved sales for FY16 under APR 28
4.7 Power Purchase for FY16-Approved and Actuals 30
4.8 Short fall in supply from KPCL Stations 31
4.9 RPO Compliance as reported by BESCOM 33
4.10 Non Solar RPO Compliance by BESCOM 34
4.11 Solar RPO Compliance by BESCOM 35
4.12 O & M expenses of BESCOM as per Audited 36
Accounts for FY16
4.13 Normative O & M Expenses-BESCOM’s submission 36
4.14 Approved O & M expenses as per Tariff Order dated 37
02.03.2015
4.15 Allowable inflation for FY16 38
4.16 Allowable O & M expenses for FY16 40
4.17 Depreciation for FY16-BESCOM’s submission 41
4.18 Allowable Depreciation for FY16 41
4.19 Capital expenditure for FY-16 BESCOM’s submission 42
4.20 Approved and Actual Capex incurred –FY12 to FY16 47
4.21 Total works and selected samples for Prudence 49
check
4.22 Summary of Prudence check findings for FY16 50
4.23 Details of Not prudent and Conditionally Prudent 50
works
4.24 Summary of works having Cost overrun 51
4.25 Summary of works having Time overrun 51
4.26 Details of Amounts disallowed in APR FY16 53
4.27 Interest on Capital Loans- BESCOM’s Submission 56
4.28 Allowable Interest on Capital Loans-FY16 57
4.29 Interest on Working Capital- BESCOM’s Submission 58
4.30 Allowable Interest on Working Capital for FY16 59
4.31 Interest on Consumer Security Deposits for FY16- 59
BESCOM’s Submission
4.32 Allowable Interest and Finance Charges. 61
4.33 Other Debts – BESCOM’s Submission 61
4.34 Net Prior Period Charges-BESCOM’s Submission 62
4.35 Return on Equity-BESCOM’s Submission 62
4.36 Status of Debt Equity Ratio for FY16 63
4.37 Allowable Return on Equity 64
4.38 Return on equity for the additional equity received 64
during FY16
v
4.39 Other income- BESCOM’s Submission 65
4.40 Allowable Other Income for FY16 66
4.41 Approved ARR for FY16 as per APR 70
5.1 Revised ARR for FY18-BESCOM’s Submission 72
5.2 Capital Investment for FY-18 BESCOM’s Submission 74
5.3 Midyear No of IP sets Installations and IP Set 85
Consumption
5.4 Format for furnishing IP Sets Consumption 88
5.5 BESCOM’s Approved Sales 88
5.6 Approved & Actual Distribution Losses FY11 to FY16 90
5.7 Approved Distribution Losses for FY18 91
5.8 Power Purchase Cost as filed by BESCOM for FY18 91
5.9 Approved Power Purchase Quantum and Cost for the 94
State
5.10 Approved Power Purchase Cost of BESCOM for FY18 94
5.11 Anticipated Capacity addition of RE Sources in FY18 95
5.12 Anticipated Energy from of RE Sources in FY18 96
5.13 Normative O&M expenses for FY18- BESCOM’s 98
Submission
5.14 Revised O&M expenses for FY18- BESCOM’s Proposal 98
5.15 Approved O &M expenses for FY18 as per Tariff Order 98
dtd 30-3-2016
5.16 Approved O &M expenses for FY18 100
5.17 Depreciation FY18- BESCOM’s Submission 101
5.18 Approved Depreciation for FY18 102
5.19 Interest on Capital Loan-BESCOM’s Proposal 103
5.20 Approved interest on Loans for FY18 104
5.21 Interest on Working Capital-BESCOM’s Submission 105
5.22 Approved interest on Working Capital for FY18 106
5.23 Interest on Consumer Security Deposits- BESCOM’s 106
Submission
5.24 Approved Interest on Consumer Security Deposits for 107
FY18
5.25 Approved Interest and Finance Charges for FY18 108
5.26 Return on Equity- BESCOM’s Submission 109
5.27 Status of Debt Equity Ratio for FY 18 110
5.28 Approved Return on Equity for FY18 110
5.29 Approved Revised ARR for FY18 114
5.30 Approved Segregation of ARR-FY18 115
5.31 Approved revised ARR for Distribution Business –FY18 115
5.32 Approved ARR for Retail Supply Business-FY18 116
5.33 Revenue Gap for FY18 117
6.1 Revenue Deficit for FY18 129
6.2 Wheeling Charges 162
vi
LIST OF ANNEXURES
SL.NO. DETAILS OF ANNEXURES Page

No.
1 ESCOM’s Total Approved Power Purchase for FY18 260
2 BESCOM’s Approved Power Purchase for FY18 263
3 Proposed and Approved Revenue and Realisation 266
and Level of Cross Subsidy for FY18 of BESCOM
4 Electricity Tariff – 2017 267
ABBREVIATIONS
AEH All Electric Home
ABT Availability Based Tariff
A&G Administrative & General Expenses
ARR Annual Revenue Requirement
ATE Appellate Tribunal for Electricity
BBMP Bruhut Bangalore Mahanagara Palike
BDA Bangalore Development Authority
BESCOM Bangalore Electricity Supply Company
BST Bulk Supply Tariff
BWSSB Bangalore Water Supply & Sewerage Board
CAPEX Capital Expenditure
CCS Consumer Care Society
CERC Central Electricity Regulatory Commission
CEA Central Electricity Authority
CESC Chamundeshwari Electricity Supply Corporation
CPI Consumer Price Index
CWIP Capital Work in Progress
DA Dearness Allowance
DCB Demand Collection & Balance
DPR Detailed Project Report
EA Electricity Act
EC Energy Charges
ERC Expected Revenue From Charges
ESAAR Electricity Supply Annual Accounting Rules
ESCOMs Electricity Supply Companies
FA Financial Adviser
FKCCI Federation of Karnataka Chamber of Commerce & Industry
FR Feasibility Report
FoR Forum of Regulators
FY Financial Year
GESCOM Gulbarga Electricity Supply Company
vii
GFA Gross Fixed Assets
GoI Government Of India
GoK Government Of Karnataka
GRIDCO Grid Corporation
HESCOM Hubli Electricity Supply Company
HP Horse Power
HRIS Human Resource Information System
ICAI Institute of Chartered Accountants of India
IFC Interest and Finance Charges
IW Industrial Worker
IP SETS Irrigation Pump Sets
KASSIA Karnataka Small Scale Industries Association
KEB Karnataka Electricity Board
KER Act Karnataka Electricity Reform Act
KERC Karnataka Electricity Regulatory Commission
KM/Km Kilometre
KPCL Karnataka Power Corporation Limited
KPTCL Karnataka Power Transmission Corporation Limited
KV Kilo Volts
KVA Kilo Volt Ampere
KW Kilo Watt
KWH Kilo Watt Hour
LDC Load Despatch Centre
MAT Minimum Alternate Tax
MD Managing Director
MESCOM Mangalore Electricity Supply Company
MFA Miscellaneous First Appeal
MIS Management Information System
MoP Ministry of Power
MU Million Units
MVA Mega Volt Ampere
MW Mega Watt
MYT Multi Year Tariff
NFA Net Fixed Assets
NLC Neyveli Lignite Corporation
NCP Non Coincident Peak
NTP National Tariff Policy
O&M Operation & Maintenance
P&L Profit & Loss Account
PLR Prime Lending Rate
PPA Power Purchase Agreement
PRDC Power Research & Development Consultants
REL Reliance Energy Limited
R&M Repairs and Maintenance
ROE Return on Equity
ROR Rate of Return
viii
ROW Right of Way
RPO Renewable Purchase Obligation
SBI State Bank of India
SCADA Supervisory Control and Data Acquisition System
SERCs State Electricity Regulatory Commissions
SLDC State Load Despatch Centre
SRLDC Southern Regional Load Dispatch Centre
STU State Transmission Utility
TAC Technical Advisory Committee
TCC Total Contracted Capacity
T&D Transmission & Distribution
TCs Transformer Centres
TR Transmission Rate
WPI Wholesale Price Index
WC Working Capital
ix
KARNATAKA ELECTRICITY REGULATORY COMMISSION,
BENGALURU - 560 001
Dated 11th April, 2017
In the matter of:
Application of BESCOM in respect of the Annual Performance Review for FY16,

Revision of Annual Revenue Requirement for FY18 and Revision of Retail
Supply Tariff for FY18, under Multi Year Tariff framework.
Present: Shri M.K.Shankaralinge Gowda Chairman

Shri H.D.Arun Kumar Member
Shri D.B.Manival Raju Member
O R D E R
The Bangalore Electricity Supply Company Ltd., (hereinafter referred to

as BESCOM) is a Distribution Licensee under the provisions of the
Electricity Act, 2003, and has, on 30.11.2016, filed the following
applications for consideration and orders:
a) Review of Annual Performance for the financial year 2015-16

(FY16) and approval of revised ARR thereon.
b) Approval of Revised ARR for the financial year 2017-18 (FY18).
c) Approval for revision of Retail Supply Tariff, for the financial year
2017-18 (FY18).
x
The BESCOM has also subsequently filed on 16.02.2017, an amendment
application to its application for revision of Retail supply Tariff for FY18.
In exercise of the powers conferred under Sections 62, 64 and other provisions
of the Electricity Act, 2003, and the KERC (Terms and Conditions for
Determination of Tariff for Distribution and Retail Sale of Electricity) Regulations
2006, as amended and other enabling Regulations, the Commission has
considered the applications and also the views and objections submitted by
the consumers and other stakeholders. The Commission’s decisions are
brought out in the subsequent Chapters of this Order.
xi
CHAPTER – 1
INTRODUCTION
1.0 Bangalore Electricity Supply Company Limited- (BESCOM):
The BESCOM is a Distribution Licensee under Section 14 of the Electricity

Act, 2003 (hereinafter referred to as the ‘Act’). The BESCOM is
responsible for purchase of power, distribution and retail supply of
electricity to its consumers and also for providing infrastructure for
Open Access, Wheeling and Banking in its area of operation, which
includes eight Districts of the State as indicated below:
1. Bengaluru
Rural
2. Bengaluru
Urban
3.
Chikkaballapura
4. Chitradurga
5. Davanagere
6. Kolar
7. Ramanagara
8. Tumakuru
The BESCOM is a company registered under the Companies Act, 1956,

incorporated on 30th April, 2002. The BESCOM commenced its
operations on 1stJune, 2002.
At present BESCOM’s area of operation is structured as follows:
xii
O&M Zones O&M Circles O&M Divisions
Malleshwaram
Bengaluru North Circle Peenya
Hebbal
Shivajinagar
Vidhanasoudha
Bengaluru East Circle
Inidranagar
Bengaluru Metropolitan
Area
Koramangala
HSR Layout
Bengaluru South Circle
Jayanagar
RajaRajeshwarinagar
Rajajinagar
Bengaluru West Circle
Kengeri
Nelamangala
Chandapura
Bengaluru Rural Circle
Yelahanka
Ramanagara
Bengaluru Rural Area
Chikkaballapur
Chinthamani
Kolar Circle
Kolar
KGF
Tumakuru
Tumkur Circle Tiptur
Madhugiri
Davangere
Chitradurga
Harihara
Davangere Circle
Hiriyur
Chitradurga
xiii
The O & M divisions of BESCOM are further divided into one hundred
and sixteen sub-divisions with each of the sub-divisions having two to
three O & M section offices.
The section offices are the base level offices looking into operation
and maintenance of the distribution system in order to provide reliable
and quality power supply to the BESCOM’s consumers.
1.1 BESCOM at a glance:

The profile of BESCOM is as indicated below:
Sl.
Particulars (As on 30-09-2016) Figures
No.
1. Area Sq. km. 41092
2. Districts Nos. 8
3. Taluks Nos. 46
4. Population lakhs 207
Consumers Nos. 1,03,96,06
5.
4
6. Zone Nos. 3
7. DTCs Nos. 246419
8. Assets Rs. in Crores 18912.22
9. HT lines Ckt. Kms 91247.57
1.2 10. LT lines Ckt. Kms 163815.60
Total employees
11.
strength:
A Sanctioned Nos. 21819
B Working Nos. 14189
12. Energy Sales for FY16 MU 24538.19
Revenue Demand for Rs. in Crores
13. 14148.24
FY16
Revenue Collection for Rs. in Crores
14. 14076.65
FY16
Number of Consumers, Sales in MU to various

categories of consumers and details of Revenue for FY16 as
filed by BESCOM are as follows:
xiv
As on 31.03.2016
Revenue
No. of Sales in
CATEGORY in Rs.
Installations MU
Crores.
Domestic 7569933 6252.68 3027.99
Commercial 950825 4368.98 3876.38
Industrial 195749 5743.61 4138.51
Agriculture 809212 6246.90 1599.84
Others 621246 1926.23 1505.56
Total 10146965 24538.40 14148.28
BESCOM has filed its application for Annual Performance Review for FY16,
approval of Revised Annual Revenue Requirement (ARR) for FY18 and Revision
of Retail Supply Tariff for FY18.
BESCOM’s applications, the objections / views of stakeholders thereon and the

Commission’s decisions are discussed in detail, in the subsequent Chapters of this
Order.
xv
CHAPTER – 2
SUMMARY OF FILING & TARIFF DETERMINATION PROCESS
2.0 Background for Current Filing:

The Commission in its Tariff Order dated 30th March, 2016 had
approved the ARR for FY17 to FY19 and the Retail Supply Tariff of
BESCOM for FY17 under the MYT principles for the fourth control period
of FY17 to FY19. BESCOM in its present application filed on 30th
November, 2016 has sought Annual Performance Review for FY16
based on the audited accounts, approval of Revised ARR for the
second year of the fourth control period i.e. FY18 and Revised Retail
Supply Tariff for FY18.
BESCOM, in its application, has made the following new proposals:
i) Increase in fixed charge for HT Consumers;

ii) Change in Wheeling and Banking facility;
iii) Revision of Open Access Charges;
iv) Inclusion of morning peak hours under ToD tariff;
v) Revision of Specific Consumption of IP Sets;
vi) Tariff for Auxiliary Consumption by KPTCL Sub Stations;
2.1 Preliminary Observations of the Commission:
After the scrutiny of applications, the Commission communicated its

preliminary observations to BESCOM on 20th December, 2016. The
preliminary observations were mainly on the following points:
 Capital Expenditure
 Energy Sales
 Assessment of IP set consumption
 RPO Compliance
 Power Purchase
 Cross Subsidy Surcharge
 Distribution Losses
xvi
 Issues pertaining to items of revenue and expenditure
 Compliance to Directives.
 Financial implications on the new proposals.
BESCOM has furnished its replies on 30th December, 2016. The Commission
had issued Rejoinders to the replies vide Commission letter dated 10th
January, 2017, the replies to the Rejoinder were received vide letter dated
16th January 2017. The replies furnished by BESCOM are considered in the
respective Chapters of this Order.
2.2 Public Hearing Process:

As per the provisions of the Electricity Act 2003, the Karnataka
Electricity Regulatory Commission (Terms and Conditions for
Determination of Tariff for Distribution and Retail Sale of Electricity)
Regulations, 2006, read with the KERC Tariff Regulations 2000, and the
KERC (General and Conduct of Proceedings) Regulations, 2000, the
Commission, vide its letter dated 10th January, 2017, treated the
application of the BESCOM as a petition and directed the BESCOM to
publish the summary of the application for APR of FY16, approval of
Revised ARR for FY18 and retail supply tariff for FY18, in the
newspapers, to call for objections, from the interested
persons/stakeholders.
Accordingly, BESCOM has published the Notices in the newspapers as

follows:
Name of the News Paper Language Date of Publication
Deccan Herald English
08-1-2017
The Hindu
&
Samyukta Karnataka
09-1-2017
Vijaya Karnataka Kannada
The BESCOM’s application on APR of FY16, Revised ARR for FY18 and
Revision of Retail supply tariff for FY18, were also hosted on the web-sites of
BESCOM and KERC for the ready reference and information of the
stakeholders and the general public.
xvii
In response to the application of BESCOM, the Commission has received
Nine statements / letters of objections. BESCOM has furnished the replies to
all these objections. The Commission has also held a Public Hearing on 20th
February, 2017 at the Court Hall of the Commission in Bengaluru. The
details of the written / oral submissions made by various stake holders and
the response from BESCOM thereon have been discussed in Chapter – 3
and Appendix-1, appended to this Order.
BESCOM has subsequently filed an amendment application to its tariff

application on 16th February, 2017, and the Commission vide its order dated
20th February, 2017, had ordered BESCOM to publish the summary of
amendment application in the newspapers calling for objections. BESCOM
has published the notification on 22nd February, 2017, inviting objections from
the interested persons to be filed within 30 days from the date of the
notification published in the newspapers as follows:
Name of the News Paper Language Date of Publication

The Times of India English 22-2-2017
Vijaya Vani Kannada &
22-2-2017
2.3 Consultation with the Advisory Committee of the Commission:
The Commission has discussed the proposals of the KPTCL and all the
ESCOMs in the State Advisory Committee meeting held on 8th March, 2017.
During the meeting the following important issues were discussed:
 Performance of KPTCL / ESCOMs during FY16

 Major items of expenditure of KPTCL / ESCOMs for FY18
Members of the Committee have offered valuable suggestions on the

proposals. The Commission has taken note of these suggestions while
passing the Order.
xviii
CHAPTER – 3
PUBLIC CONSULTATION
SUGGESTIONS / OBJECTIONS & REPLIES
3.1 As per the provisions of the section 64 of the Electricity Act, 2003, the
Commission has undertaken the process of public consultation, to
invite suggestions/views/objections from the interested stake-holders
and the general public on the application filed by BESCOM for
Annual Performance Review for FY16 and Revision of Retail Supply
Tariff for FY18. In the written submissions filed as well as during the
public hearing, the Stake-holders and the public have raised several
objections/ made suggestions, on the BESCOM’s Tariff Application
dated 30.11.2016. The names of the persons who have filed written
objections and made oral submissions are given below:
List of persons who have filed written objections

Sl. Appli
No. catio Name & Address of Objectors
n No.
1 Sri. Prem Chand, Chief Electrical Traction Engineer, South
AE- Western Railway.
01
2 AE- Smt. Shroti Bhatia, VP (Regulatory Affairs & Communication),
02 Indian Energy Exchange.
3 BB- Sri. Raju Bhatnagar, Secretary General, Bangalore Chamber
01 of Industry and Commerce.
4 BB- Sri.T.V. Mohandas Pai, Vice President, B.PAC
02
5 BB- Sri. G.N. Krishnappa, Energy Engineering, Bangalore
03
6 BB- Sri. Keshav .K, General Secretary, Malur KIADB Area
04 Industries Association.
7 BA- Doddanavar Global Energy Pvt Ltd
01
8 BA- Dr. Sujay Rama Prasad, Hon. Secretary, Association of
02 Diagonostic Centres.
9 BA- Sri. Prakash, Hon Secretary, Peenya Industries Association.
03
10 BA- Laghu Udyog Bharati - Karnataka
04
11 BA- Sri. Prem Chand, Chief Electrical Traction Engineer, South
05 Western Railway.
12 BA- Sri. G. Manjunath, Chandapura, Bengaluru
06
13 BA- Sri. B. Praveen, Hon General Secretary, KASSIA.
xix
07
14 BA- Sri. R. Ramanna, Bangalore Water Supply and Sewerage
08 Board.
15 BA- Sri. M. Lokraj, Secretary General I/c, Federation of Karnataka
09 Chambers of Commerce and Industry.
The objections/ suggestions mainly pertain to:

(i) Tariff;
(ii) Quality of Power Supply and Service;
(iii) Compliance of Commission’s directives; and
(iv) Certain specific requests.
The summary of the objections, the BESCOM’s reply and the

Commission’s view are annexed as Appendix-1 to this Order.
3.2 List of the persons, who made oral submissions during the Public
Hearing, held on 20.02.2017.
SL. Names & Addresses of Objectors

No.
1 Sri.T.V.Mohandas Pai, Vice President, & Sri Harish, B.PAC
2 Dr.G.S. Subba Rao, Sri. M.G.Prabhakar & Sri.Umesh, FKCCI.
3 Sri. V.G. Pandit & Sri A.N. Ramanujam. Association of
Diagonostic centres
4 Smt. B.S. Anuradha, BCIC
5 Dr. M.R. Ranganatha, Bharatiya Kissan Sangha, Chief of
Karnataka Agri Economic Cause
6 Sri.M.G. Shanthappa Gowda, Bharatiya Kissan Sangha.
7 Sri.A. Padmanabha, President, KASSIA.
8 Sri. Mallappa Gowda, Panel Chairman, Energy, KASSIA
9 Sri Venkatesh S Arbatti, Advocate for BWSSB.
10 Sri. M.R. Krishna Murthy & Sri K.R. Lashmikantha, PIA.
11 Sri Manjunatha.G, Secretary, Bharatiya Kissan Sangha,
Chandapura.
12 Sri. S.V. Nesargi, DGEPL
13 Sri. Chetan Jain, IEX
14 Sri. Satish Bharatiya Kissan Sangha, Turuvekere.
15 Sri. Sreedhar & Sri. Hemantha,Bharatiya Kissan Sangha,
Gubbi.
16 Sri. G.N Krishnappa, Electrical Contractor, Bengaluru.
17 Sri. Srinivasalu, South Western Railways. Bengaluru
18 Sri. Muralidhar Rao, PRAJA, Bengaluru.
3.2 Following are the additional points made during the Public Hearing:
xx
1) The distribution losses in a few districts are more than the
Commission approved level and same should be debited to the
BESCOM’s account.
2) Quality of power supply should be improved.
3) Tariff applicable to HT category should be reduced.
4) Due to underperformance of KPCL’s thermal plants, reduced

quantities of thermal power have been supplied at a higher
cost of Rs.4.26 per unit as against the Commission approved
price of Rs.3.90 per unit.
5) Open access should be encouraged by reducing open access

charges.
6) IP set consumption is more than the approved level and the

same should not be allowed.
7) Inter-ESCOM energy balancing should be for a short period and

it should not burden the BESCOM.
8) Un-metered power supply and theft of energy is high in

BESCOM.
9) Amended petition filed on 16.02.2017 should not be considered,

since, no opportunity of 30 days’ time given for public to
respond. OPs cannot be filed on the same issues covered in
tariff matters and these proposals are not in line with the
Regulations/Act.
10) Incentives sought by BESCOM for reducing the distribution losses

should not be allowed.
11) Short term power purchase cost below Rs.4.50 per unit only
should be allowed
12) Prudence check on CAPEX should be done by involving the

consumers.
13) O&M cost is very high and excess controllable expenditure

should be disallowed.
xxi
14) Incentive for the consumers should be given for prompt
payment.
15) The proposed restriction of 3 months’ period in respect of

wheeling and banking of renewable energy is not as per the
Act.
16) Separate tariff category should be introduced for Micro, Small

and Medium Enterprises (MSME) and also voltage-wise tariff
should be introduced.
17) Proposal of modified time of the day(TOD) tariff should not be

accepted and the TOD should be made optional instead of
being mandatory
18) Prepaid meters should be introduced for all the industries.
19) Diagnostic centres should be categorized under tariff schedule

HT-2 (c) (ii) instead of HT-2(b).
20) Financial losses of BESCOM should not be passed on to the end

consumers.
21) Since there is no buffer stock of Transformers in O & M

Subdivision, Gubbi, the replacement of faulty Transformers is not
carried out by BESCOM within the prescribed duration of 72
hours as per SoP.
22) There is no representation of farmers in CGRF
23) Metering of IP Sets should be done and the subsidy amount per
IP Set should be transferred to the farmers directly under the
Direct Benefit Transfer (DBT) scheme.
24) After truing up of FY16, the power purchase cost per unit has
increased by Rs.1.00.
25) Excess amount of Rs.175 Crores spent by BESCOM over and

above the approved amount in respect of NJY Scheme should
be disallowed.
26) There is inordinate delay in implementation of Distribution

Automaton System (DAS) Project and BESCOM should estimate
the quantifiable efficiency gains on account of implementation
of the same.
xxii
27) BESCOM is paying highest salaries to its employees.
28) Cross subsidy should be reduced to 20% of the energy charges.
29) Fixed charges should not be increased and also there is no

justification from BESCOM for this.
30) Contribution towards P&G to an extent of Rs.729.40 Crores

should not be allowed.
31) Due to improper maintenance by BESCOM, the power supply

interruptions are more and the same has been not informed to
KERC.
32) Incentive for Solar water heating should be continued.
33) Tariff schedule of HT-1 pertaining to BWSSB should not be

increased, since the cost of Electricity is 64% of water tariff
Revenue of BWSSB.
34) While arranging power supply under temporary category,

prepaid meters should be provided across the Bengaluru.
Further billing should be done on Monthly basis.
35) Privatization in distribution activity of power sector is very much

needed.
36) Timer switches are not provided to street lights.
37) The increase in cost of replacement of faulty transformers to an

extent of Rs.95.52 Crores should not be allowed.
38) The expenditure made by BESCOM towards implementation of

HVDS project is 200% more than the approved cost and hence
the excess amount spent should not be allowed.
39) The ratio of HT: LT should be brought down to 1:1.
40) Single meter should be installed at residence cum P G

accommodation. Buildings.
41) BESCOM should take up proper maintenance of HT installations

by replacing faulty spares like CTs and PTs, within the stipulated
time limit to reduce the financial loss to the company.
xxiii
42) Categorization of ready mix concrete (RMC) has been
inadvertently left out in tariff orders 2015 and 2016. This needs to
be included.
BESCOM had filed an Amendment petition on 16.02.2017, seeking

approval for:
a) Creation of additional slabs in respect of Domestic
consumers – LT2(a)(i) and (ii) and revision the tariff as
suggested therein;
b) Concessional tariff of Rs.5.98 per unit for street lights using

LED bulbs and higher tariff of Rs.11 per unit for street lights
not using LED bulbs; and
c) Increasing the demand charges and reduction in energy

charges in respect of all the HT Installations.
BESCOM had published a summary of the Amendment Petition in the

newspapers on 22.02.2017 seeking the objections/ comments/
suggestion from the stakeholders.
In response to the summary of amendment application published in
the newspapers, the following stakeholders have filed written
comments:
SL.No. Names & Addresses of Objectors
1. FKCCI, Bangalore
2. Consumer Care Society, Bangalore
3. Doddanavar Global Energy Pvt Ltd
4. Sharavathi Conductors Pvt. Ltd.
5. M/s. Bharti Airtel Limited, Bengaluru
6. M/s Indus Towers Limited, Bengaluru.
7. M/S Reliance JIO Infocomm Limited, Mumbai
8. M/s ATC Telecom Infrastructure Pvt Ltd, Bengaluru.
9. M/s Vodafone Mobile Services Ltd, Bengaluru.
10. M/s Reliance Communication Ltd, Bengaluru.
The Commission held a public Hearing on the Amendment Petition on

24.03.2017 at 11.30 Am in the Commission’s office.
xxiv
The following is the list of persons, who attended the hearing held in
this regard on 24th March, 2017.
SL.No. Names & Addresses of Objectors
1. Sri M.C. Dinesh, President, Dr. G.S. Subba Rao and Sri
Umesh, FKCCI
2. Smt. Revathi Ashok, BPAC.
3. Smt. Mangal Jyothi IWPA.
4. Sri. Soubhik Das, BCIC,
5. Sri M.L. Ashok and Sr. Raja Rao, Consumer Care
Society
6. Sri Chethan Jain, IEX
The Managing Director, BESCOM, made a presentation before the

Commission to justify the amendments sought by the BESCOM.
The following is the gist of objections raised by the participants:

1. Increase in the Fixed Cost should be related to the cost of assets,
but the BESCOM has not furnished any details of the assets in its
petition.
2. For justifying increase in fixed cost, details of stranded cost are not
provided.
3. While the proposal for increase in fixed cost is welcome, the
overall pricing should be competitive and result in increase in the
efficiency.
4. The rates suggested under telescopic slab deprive the consumers
of the existing benefits. The benefits of lower slab rates are
available even in the slabs of Income Tax as well as BWSSB tariffs.
Hence, the prayer for approval of telescopic slabs should be
rejected.
5. The proposal to incentivise usage of LED bulbs for street lights is
welcome but it may add to the mounting arrears from the urban
and local bodies.
Some of the participants raised issues relating to wheeling and

banking of energy. The Commission informed that a separate
opportunity would be given to express their views.
While passing the orders, the prayer by the BESCOM and the
objections of the stakeholders have been kept in view, by the
Commission.
xxv
xxvi
CHAPTER – 4
ANNUAL PERFORMANCE REVIEW FOR FY16
4.0 BESCOM’s Application for APR for FY16:
BESCOM has filed its application for Annual Performance Review (APR)
for FY16 and Revision of ARR and retail supply tariff for FY18 on 30th
November, 2016. BESCOM has sought approval of its revised ARR in the
Annual Performance Review (APR) for FY16 based on the Audited
Accounts.
The Commission in its letter dated 20th December, 2016 had

communicated its preliminary observations to the application.
BESCOM, in its letter dated 30th December, 2016 has furnished its replies
to the preliminary observations of the Commission. Further, the
Commission on validation of the applications had sought additional
information/details in its letter dated 10th January, 2017. In reply,
BESCOM vide its letter dated 16th January, 2017 has furnished
additional information/details.
The Commission in its Multi Year Tariff (MYT) Order dated 6th May, 2013
had approved BESCOM’s Annual Revenue Requirement (ARR) for FY14
– FY16. Further, in its Tariff Order dated 2nd March, 2015, the Commission
had approved the APR for FY14 and had revised the ARR along with
Retail Supply Tariff for FY16.
The revised Annual Revenue Requirement (ARR) of BESCOM for FY16,

based on the audited accounts, is discussed in this Chapter.
4.1 BESCOM’s Submission:
BESCOM has submitted its proposals for revision of ARR for FY16 based
on the Audited Accounts as follows:
xxvii
TABLE – 4.1
APR for FY16 – BESCOM’s Submission
Amount in Rs. Crores
Sl.
Particulars As Filed
No
1 Energy at Gen Bus in MU 29161.67
2 Energy at Interface in MU 27893.50
3 Distribution Losses in % 12.03
Sales in MU
4 Sales to other than IP & BJ/KJ 18276.96
5 Sales to BJ/KJ 71.31
6 Sales to IP 6189.90
Total Sales 24538.17
Revenue
7 Revenue from tariff and Misc. Charges 12205.55
8 Tariff Subsidy to BJ/KJ 30.81
9 Tariff Subsidy to IP Sets 1585.26
Total Revenue 13821.62
Expenditure
10 Power Purchase Cost 11364.09
11 Transmission charges of KPTCL 1225.91
12 SLDC Charges 10.53
Power Purchase Cost including cost of
transmission 12600.53
13 Employee Cost 912.76
14 Repairs & Maintenance 83.37
15 Admin. & General Expenses 223.21
Total O&M Expenses 1219.34
16 Depreciation 290.60
Interest & Finance charges
17 Interest on Loans 266.02
18 Interest on Working capital 342.45
19 Interest on consumer deposits 245.24
20 Other Interest & Finance charges 23.53
Less interest & other expenses
21 capitalised 146.85
Total Interest & Finance charges 730.39
22 Other Debits 16.25
23 Net Prior Period Debit/Credit -11.57
24 Return on Equity 108.00
25 Provision for taxation 24.51
26 Other Income 40.35
ARR 14937.70
Incentives for performance on
27 distribution loss reduction 190.92
Net ARR 15128.62
Carrying cost on Regulatory Asset to be
recovered in FY17 117.40
xxviii
Net ARR for FY16 15246.02
BESCOM has reported a gap in revenue of Rs.1424.40 Crores for FY16,

considering a revenue of Rs.13821.62 Crores against a net ARR of
Rs.15246.02 Crores.
4.2 BESCOM’s Financial Performance as per Audited Accounts for FY16:
An overview of the financial performance of BESCOM for FY16 as per

its Audited Accounts is given below:
TABLE – 4.2
Financial Performance of BESCOM for FY16
Sl.
Particulars FY16
No.
Receipts
1 Revenue from Tariff and misc. charges 12532.16
2 Tariff Subsidy including Truing up Subsidy 2158.04
Total Revenue 14690.20
Expenditure
Power Purchase Cost including cost of transmission 12601.01
6 O&M Expenses 1167.38
12 Less Interest and other expenses capitalized 146.85
Total Interest & Finance charges 699.75
14 Net Prior Period Debit/Credit 11.57
15 Exceptional items (54.77)
16 Other income (167.21)
17 Income tax 24.52
Net ARR 14582.19
As per the Audited Accounts, BESCOM has earned a profit of Rs.108.01

Crores for FY16. The profits / losses reported by BESCOM in its audited
accounts in the previous years are as follows:
xxix
TABLE – 4.3
BESCOM’s Accumulated Profits / Losses
Rs.
Particulars
Crores
Accumulated losses as at the end of FY10 (350.88)
Profit earned in FY11 0.20
Profit earned in FY12 118.14
Losses incurred in FY13 (432.77)
Profits earned in FY14 76.10
Accumulated losses as at the end of FY16 (367.76)
As seen from the above table, the accumulated losses are Rs.367.76
Crores as at the end of FY16.
The Commission has taken up the Annual Performance Review for

FY16, duly considering the actual revenue and expenditure as per the
Audited Accounts vis-à-vis the revenue/expenditure approved by the
Commission in its Tariff Order dated 2nd March, 2015. The item-wise
review of expenditure and the decisions of the Commission thereon
are discussed in the following paragraphs:
4.2.1 Sales for FY16:
I. Energy Sales data for FY15:

The Commission, in its preliminary observations, had directed BESCOM
to adopt the category-wise and total sales for FY15 as approved in the
Tariff Order dated 30.03.2016 and accordingly revise the sales data in
Table-1.4 and Table 1.6 of the Tariff Petition.
BESCOM, in its replies to the preliminary observations, has stated that

there is no need to revise the data as it had compared two year’s
actual data as per the audited accounts. However, as directed by the
xxx
Commission, BESCOM has revised the sales data in the Table-1.4 and
Table- 1.6, vide its replies dated 16.01.2016,
II. Annual Performance Review for FY16

1. Sales-Other than IP sets:
The Commission in its Tariff Order dated 02.03.2015 had approved total
sales to various consumer categories at 25341.90 MU as against the
BESCOM proposal of 25787.19 MU. The Actual sales of BESCOM as per
the current APR filing [D-2 FORMAT] is 24538.17 MU indicating a shortfall
in sales to the extent of 803.73 MU when compared to the approved
sales.
The category-wise sales approved by Commission in its Tariff Order
dated 02.03.2015 and the actuals for FY16 are indicated in the
following table:
TABLE- 4.4
Approved and Actual Sales for FY16
(Energy in MU)
Difference
between
Category Approved Actuals
Actuals &
Approved
LT-2a* 5824.79 6056.05 231.26
LT-2b 43.07 42.59 -0.48
LT-3 1712.49 1754.07 41.58
LT-4b 3.71 3.44 -0.27
LT-4c 6.11 4.61 -1.50
LT-5 1167.20 1150.39 -16.81
LT-6 474.54 404.68 -69.86
LT-6 449.53 366.26 -83.27
LT-7 167.43 167.52 0.09
HT-1 743.65 672.75 -70.90
HT-2a 5804.90 4593.21 -1211.69
HT-2b 2969.56 2614.90 -354.66
HT-2c 89.68 232.53 142.85
HT-3a & b 18.98 57.11 38.13
HT-4 116.07 96.59 -19.48
HT-5 66.30 74.22 7.92
Sub total 19658.00 18290.92 -1367.08
BJ/KJ 58.64 57.45 -1.19
IP 5625.26 6189.80 564.54
Sub total 5683.90 6247.25 563.35
xxxi
Grand total 25341.90 24538.17 -803.73
*Including BJ/KJ installations consuming more than 18 units/month
The major categories contributing to the reduction in sales as

compared to the approved figures are LT Water Supply (69.86 MU), LT-
Street Lighting (83.27 MU), HT Industries (1211.69 MU) and HT
Commercial (354.66 MU). On the other hand, major categories
contributing to the increase in sales in respect of the approved figures
are LT 2(a) (231.26 MU), LT-3(41.58 MU), HT2(c) (142.85 MU), HT3 (38.13
MU) and IP Sets (564.54 MU).
The observations of the Commission with respect to sales for FY-16 and
the replies of BESCOM are discussed below:
a) BESCOM was directed to analyze the reasons for reduction in sales
to HT categories.
BESCOM in its reply dated 20.12.2016, has stated that the HT-sales
has reduced due to consumers opting out of the grid and that in
FY-16, HT consumers had procured 2000 MU through wheeling and
banking.
The Commission notes that in the table at page-19 of replies to
preliminary observations in respect of APR for FY16, the energy
under wheeling & banking is indicated as 1590 MU, whereas in the
replies dated 16.01.2017, the same is indicated as 1329 MU. Thus the
Commission notes that there is inconsistency in the data furnished
about the energy accounted under Open Access/Wheeling and
has therefore considered the data as per the replies dated
16.01.2017. Nevertheless, the Commission notes that the wheeled
energy has grown by about 16% in FY16 as compared to the
energy wheeled in FY15.
b) The Commission had asked BESCOM to furnish the data of sales to
HT2(a) and HT2(b) categories along with the consumption from
open access / wheeling for the period 2011-12 to 2014-16.
BESCOM in its replies dated 20.12.2016, had replied that energy

procured from generators in HT sales cannot be ascertained.
However, BESCOM had furnished the cumulative sales to HT-2a,
xxxii
HT2b and HT2c categories along with the energy procured through
open access/wheeling. Subsequently, in its replies dated
16.01.2017, BESCOM has furnished the details of energy wheeled to
HT-2a, HT-2b and HT-2c categories separately.
c) Regarding reconciliation of the actual sales figures for FY16

indicated at page-8 and Table 2.3 with the figures indicated in D-2
format, BESCOM has replied that there is a difference of 0.23 MU
owing to rounding off the data to two decimal points in the format.
The Commission has taken note of the reply furnished.
d) BESCOM was directed to confirm as to whether the category-wise

sales indicated in D-2 format is excluding unbilled sales and if
unbilled sales are included, to furnish category-wise break up of
unbilled sales.
BESCOM in its replies has clarified that sales of 24538 MU for FY-16
does not include unbilled sales. It is noted here that in the Tariff
Order-2016, the Commission had not allowed unbilled sales while
truing up for FY-15, for the reasons stated in that order.
e) BESCOM was directed to furnish the number of installations shifted

from HT2a, HT2b and HT-4 categories to HT-2c category and the
corresponding sales figures for FY14, FY15 and FY16, in order to
estimate the impact of shifting of these installations.
BESCOM has replied that the above data is not available. The
Commission would like to point out that BESCOM should be able to
furnish the required data in view of computerization of the billing
activity. BESCOM is therefore directed to ensure that in future all the
required details are furnished without any excuse.
2. Sales to IP sets:
xxxiii
i) The Commission in its Tariff Order dated 2nd March, 2015, had
approved the specific consumption of IP-sets as 7,795

units/installation/annum for FY16, whereas as per the data of IP-set
consumption reported by the BESCOM in its tariff filing, the specific
consumption works out to 7,846 units / installation / annum, which
corresponds to an increase in the specific consumption by 51
units/installation / annum. The total IP-set consumption reported for
the FY16 as per the Format D-2 filed by the BESCOM is 6,189.80 MU,
whereas the IP-set consumption approved by the Commission was
5,625.26 MU. The difference in consumption between the
approved and reported for FY16 is 564.54 MU. Thus, the quantum of
sales to the IP-sets’ category has exceeded the approved
quantum by 564.54 MU and the specific consumption has
increased by 51 units / installation / annum for the FY16.
ii) Further, the Commission had approved 7,29,150 as the number of
IP-set installations for the FY16, but, the actual number of

installations for which the electricity is being supplied, as reported
by the BESCOM, is 8,09,178. The difference in the number of
installations being 80,028 which corresponds to 11 percent increase
in the number of installations, as against the approved number of
installations for the FY16. The BESCOM has reported that the
increase in the number of installations over the approved number
of installations for the FY16 is due to the fact that, it has regularized
a large number of un-authorized IP-sets in the field under the
Regularization Scheme.
iii) The Commission, in its Tariff Order dated 2nd March, 2015, had
directed the BESCOM to compute IP-set consumption on the basis

of meter readings of agricultural feeders segregated under NJY
scheme, for the reason that the energy consumed by the IP-sets
could be accurately measured at 11 kV level at the substations
after allowing the losses prevailing in the distribution system, and to
xxxiv
report the same in the following format, prescribed by the
Commission.
TABLE-4.5
Format for IP set Consumption as per feeder-wise data
Average consumption of IP /
substations pertaining to the
to the agricultural feeders in

loss (11kV & LT) & any other
agricultural feeders at the
agricultural feeders only to

DTCs,& LT line) Plus sales to
Distribution loss(11kV line,
deducting the Distribution

Feeders in the subdivision
other consumers if any, in
Total sales of IP sets in MU

MU as recorded in all the
No. of IP sets connected
subdivision (as per DCB)

Monthly Consumption in
Segregated Agricultural
Total no of IP sets in the

Net consumption duly
(specific cons in units

MU ( losses in all the
be considered)
the subdivision
Sub-division
loads if any
/IP/month)
Name of
division
month
Month
No.
1 2 3 4 5 6=(4-5) 7 8 9 10=8*9
April Subdivision-1
to Subdivision-2
March Subdivision
iv) The Commission has been following this methodology since 2014
(Tariff Order dated 12th May, 2014, for FY15), considering the fact
that the ESCOMs have bifurcated the 11 KV feeders into separate
rural and agricultural feeders. Earlier to this, in the absence of
meters to IP-set installations, the Commission had allowed the
ESCOMs to assess the IP-set consumption, based on the readings of
the sample meters fixed to the distribution transformer Centers
(DTCs) predominantly feeding to IP-set loads. The sample was
selected in such a manner that two to three DTCs feeding
predominantly to IP-set loads per O&M section were covered so
that in each subdivision about ten such DTCs were covered. As per
this methodology, the overall IP-consumption for the Company
was being assessed on the basis of metered consumption arrived
at from such sample meters fixed to DTCs.
xxxv
v) As per the IP-set data for FY13 submitted to the Commission by the
BESCOM, 729 DTCs covering 7,825 IP-sets out of the total 6,52,054
IP-sets in its jurisdiction was considered for assessing the total IP-set
consumption for the Company. It is noted that the sample IP-sets
considered to assess the total IP-set consumption for FY13, based
on the sample DTCs meter readings constituted only 1.2 per cent.
This means a small sample of IP-sets was considered while arriving
at the total consumption as compared to a large sample (55% in
March, 2017) being considered now after segregating the feeders
under NJY. Therefore, for computing the overall IP-set consumption
the latter method (consumption recorded in the meters fixed to
segregated feeders) is a better representation in terms of metered
consumption, as compared to the methodology followed earlier.
vi) Accordingly, the BESCOM was directed to furnish 11 kV feeder-wise
IP-set consumption based on energy meters’ reading data in

respect of agriculture feeders segregated under NJY scheme, duly
deducting the distribution losses prevailing in 11 kV lines, distribution
transformers, and LT system, to the Commission, every month.
However, the BESCOM has not been submitting the IP-set
consumption data based on the segregated agricultural feeders
regularly, to the Commission.
vii) The Commission, in its preliminary observations, had raised the
issue of increase in both sales and number of installations as well

as specific consumption of IP-set category and had also directed
the BESCOM to furnish necessary month-wise feeder-wise data as
per the energy recorded in the segregated agricultural feeders,
in support of its claims of IP-set consumption for the FY16.
viii) The BESCOM, in its reply to the preliminary observations, had

submitted the consolidated month-wise IP-set consumption data
in respect of the exclusive agricultural feeders segregated under
NJY by deducting the uniform energy losses of 10 per cent
prevailing in its 11 kV distribution system, for FY16, to the
xxxvi
Commission. Further, it had stated that, the consumption of IP-sets
has increased as compared to the approved quantum in view of
servicing of a large number of IP-sets under the Regularization
Scheme during the FY16. The Commission had observed that the
data of IP-set consumption from the exclusive agricultural feeders
considering a uniform loss at 10 per cent, had many
inconsistencies in respect of total consumption, total number of
IP-sets serviced and specific consumption arrived as compared
with the data filed by the BESCOM in the format D-2 of its Tariff
filing and its replies to the Commission’s observations. Further, the
Commission had observed that the increase in IP sales for the
FY16 may be partly due to the fact that the BESCOM has serviced
a larger number of IP-sets under regularization scheme, than it
had projected earlier.
ix) Accordingly, the Commission’s observations were communicated

to the BESCOM in the form of rejoinders, directing it to rectify the
discrepancies pointed out duly computing the IP-set consumption
on the basis of segregated agricultural feeders, reworking the
energy losses as per the BESCOM’s energy flow diagram.
x) In response, the BESCOM has submitted details of IP-set

consumption and has sought some more time to compute the
revised IP-set consumption based on the meter reading data of
agricultural feeders segregated under NJY, reworking the energy
losses prevailing in the 11 kV distribution system, as directed. On
verification of the IP-consumption data furnished in respect of
agriculture feeders, it was observed that the distribution loss
figures reckoned to compute the net IP-set consumption in the
feeders, is not based on actual calculation considering the
distribution network sketches.
xi) The BESCOM vide its letter No. BESCOM/BC-26/F-2411/2009-

10/1315, dated 30th January, 2017, has submitted the revised IP-
set consumption for FY16 as 5777.77 MU, as against 6,189.80 MU
xxxvii
indicated earlier, based on the segregated agricultural feeders,
duly revising the energy losses to 13.22 per cent (instead of 10 per
cent losses considered earlier in the format D2 of its Tariff filing).
The Commission notes that considering the revised consumption
of 5777.77 MU would result in a difference in consumption to an
extent of 412.03 MU. The BESCOM has not submitted its
justification in support of it. Hence, the Commission decides to
disallow a consumption of 412.03 MU from 6189.80 MU considered
by BESCOM in its tariff application.
xii) In view of the above discussion, the Commission decides to
approve IP set consumption of 5777.77 MU based on the revised

meter reading data of the segregated agricultural feeders for the
FY16, as against 6,189.80 MU shown by the BESCOM, in its Tariff
filing, by disallowing sales to an extent of 412.03 MU.
Accordingly, the Commission approves total sales of BESCOM as per

actuals except in respect of IP sets for the reasons discussed above.
The abstract of approved sales after APR of FY16 is as follows:
TABLE- 4.6
Approved sales for FY16 under APR

Energy in MU’s
Category Approved as per As filed by Approved
Tariff Order dated BESCOM as per
02.03.2015 APR
LT-2a* 5824.79 6056.05 6056.05
LT-2b 43.07 42.59 42.59
LT-3 1712.49 1754.07 1754.07
LT-4b 3.71 3.44 3.44
LT-4c 6.11 4.61 4.61
LT-5 1167.20 1150.39 1150.39
LT-6 474.54 404.68 404.68
LT-6 449.53 366.26 366.26
LT-7 167.43 167.52 167.52
HT-1 743.65 672.75 672.75
HT-2a 5804.90 4593.21 4593.21
HT-2b 2969.56 2614.90 2614.90
HT-2c 89.68 232.53 232.53
HT-3a & b 18.98 57.11 57.11
xxxviii
HT-4 116.07 96.59 96.59
HT-5 66.30 74.22 74.22
Sub total 19658.00 18290.92 18290.92
BJ/KJ 58.64 57.45 57.45
IP 5625.26 6189.80 5777.77
Sub total 5683.90 6247.25 5835.22
Grand total 25341.90 24538.17 24126.14
*Including BJ/KJ installations consuming more than 18 units/month
Thus, the Commission approves total sales of 24126.14 MU for FY16 after
APR.
4.2.2 Distribution Losses for FY16:
BESCOM’s Submission:
BESCOM, in its application as per the audited accounts has

reported actual distribution losses of 12.03% as against
distribution losses of 13.40% approved by the Commission for
FY16. Accordingly, BESCOM as per the provisions of the MYT
Regulations has claimed an incentive of Rs.190.92 Crores.
Subsequently, BESCOM has revised the sales to IP Sets for FY16 in

its letter dated 30th January 2017, as discussed in the earlier
paragraphs of this Order.
Commission’s analysis and decisions:

The Commission in its Tariff Order dated 2nd March, 2015 had
approved distribution losses for FY16 shown as under:
Range of Distribution losses FY16

Upper limit 13.60%
Average 13.40%
Lower Limit 13.20%
xxxix
BESCOM, in the tariff application dated 30th November, 2016
had reported distribution losses of 12.03% based on the energy
input at interface points and sales as per audited accounts for
FY16. However, in its replies to the preliminary observations,
BESCOM has revised the sales to IP sets as 5777.77 MU by
considering the metered data of segregated feeders under NJY,
as against the consumption of 6189.80 MU considered in its tariff
application, as per audited accounts for FY16. Based on this
revised IP set consumption, the total sales works out to 24126.14
MU instead of 24538.17 MU as considered in its tariff application.
Based on the energy input as stated earlier and the revised sales,
the distribution loss works out to 13.51% as detailed below:
1 Energy at Interface Points in MU 27893.40

2 Total sales in MU 24126.14
Distribution losses as a percentage of
3 13.51%
input energy at IF points
The Commission notes that, as the revised loss levels fall within
the approved range of losses for FY16, the question of allowing
any incentive would not arise. Also since the revised loss levels
are within the bands prescribed by the Commission, the question
of levy of any penalty for non-achievement of loss targets will
also not arise.
4.2.3 Power Purchase for FY16:
BESCOM Submission:
The Commission in its Tariff order dated 2nd March, 2015, had approved
source-wise quantum and cost of power purchase for FY16. BESCOM,
in its application has submitted the details of actual power purchase
for FY16 for the purpose of Annual Performance Review. The details of
power purchase are as under:
TABLE – 4.7
Power Purchase for FY16- Approved and Actuals
xl
% increase
Difference-between Actuals (+)/decrease (-)
Actuals for FY16 Approved for FY16
and Approved-for FY16 over an approved
Source of figures
Generation Rate Rate
Rate in
Energy Cost in Rs in Rs Energy Cost in Rs in Rs Energy Cost in
Rs per Energy Cost
in MUs Cr. per in MUs Cr. per in MUs Rs Cr.
Unit
Unit Unit
KPCL Hydel
1949.26 175.85 0.90 3314.70 205.55 0.62 -1365.44 -29.70 0.28 -41.19 -14.45
Stations
KPCL-
Thermal 8693.14 3699.57 4.26 10793.62 4214.12 3.90 -2100.48 -514.55 0.35 -19.46 -12.21
Stations
CGS 8240.82 2577.84 3.13 7265.97 2229.28 3.07 974.85 348.56 0.06 13.42 15.64
Major IPPs 5104.06 2139.78 4.19 4992.75 2063.20 4.13 111.31 76.58 0.06 2.23 3.71
IPPs -Minor
3277.10
(NCE 2736.34 995.85 3.98 1202.25 3.67 -560.76 -206.40 -0.03 -16.5 -17.17
Projects)
Other
28.5
States 10.72 30.55 80.90 14.56 1.80 -70.18 15.99 26.70 -86.75 109.82
0
Projects
Short
/Medium 3599.55 1804.77 4.84 694.06 364.38 5.25 1440.39 -0.24 418.62 395.30
2905.49
term
UI Charges 319.74 94.87
Section 11 1324.37 619.41

Transmissio
n Charges
1717.07 1531.00 186.07 12.15
(KPTCL &
PGCIL)
SLDC
Charges
12.11 15.81 3.70 23.40
(POSOOC
& SLDC)
Energy
-2816.33 -1269.73 4.51
Balancing
Others
3.07
Charges
TOTAL 29161.67 12601.01 4.32 30419.09 11840.15 3.89 -1257.42 760.39 0.43 -4.13 6.43
* Source : D1 format
Commission’s analysis and decisions;
1. The actual power purchase for FY16, as filed by BESCOM for

approval of Annual Performance Review is 29161.67MU amounting
to Rs 12601.01 Crores, as against the approved quantum of
30419.09 MU amounting to Rs11840.15 Crores. This represents
reduction in quantum of power purchased to an extent of 1257.42
MU and increase in the cost by Rs. 760.39 Crores. This is reflected in
reduced sales (as reported by BESCOM) to an extent of 803.73 MU
in FY16 with reference to the approved sales.
xli
2. As against the approved quantum of 30419.10MU, the actual power
purchased by BESCOM is 29161.67 MU for FY16, which is about
4.13% less than the approved quantum.
3. On an analysis of the source-wise approved and actual power

purchases, the following deviations in the quantum of energy
purchased and its cost are observed:
i. There is shortfall in supply from sources of power from KPCL Hydel
and KPCL Thermal projects as indicated below:
TABLE-4.8
Short-fall in supply from KPCL Stations
Shortfall in energy Cost Difference between
Source of
compared with approved actual and approved in
Generation
availability in MU Rs Crs.
KPCL Hydel
1365.44 29.70
KPCL Thermal
2100.48 514.55
Total
3465.92 544.25
The shortfall from the above sources, has been met by un-
requisitioned surplus power from CGS & major IPP sources apart
from purchases from short-term & medium–term sources to a tune
of 3599.55 MU at a cost of Rs.1804.77 Crores and power purchase
under section 11 of the EA, 2003, to a tune of 1324.37 MU at a
cost of Rs.619.41 Crores BESCOM has incurred an additional cost
Rs.760.39 Crores on account of overall deficit in the availability of
power.
ii. The change in the source-wise mix of supply, reconciliation of
energy and its cost among ESCOMs has resulted in increase in

average power purchase cost of BESCOM to Rs.4.32 per KWh as
against the approved rate of Rs.3.89 per KWh.
4. In order to ensure proper accounting of energy and its cost by the

ESCOMs, BESCOM is directed to reconcile the inter-ESCOM energy
exchanges and their costs every month and it shall collect/pay the
xlii
amounts out of the tariff subsidy received from the Government of
Karnataka.
5. The Commission notes that, so far the SLDC has not implemented the
intra-state ABT. As per the directions issued by the Government of
Karnataka, vide its letter dated 28th January, 2016, intra-State ABT
has to be implemented immediately by the KPTCL and ESCOMs. The
Commission therefore directs the SLDC, KPCL and the BESCOM to
take appropriate action immediately to implement intra-state ABT
and to host the details thereof, on their respective websites.
6. The power purchases made by the BESCOM during FY16 from

different sources of generation also include the energy purchased
under Section 11 of the Electricity Act, 2003, in pursuance of a
Government Order dated 16.09.2015. The Government, in the said
order, had fixed a provisional tariff of Rs.5.08 Per unit subject to
determination of final tariff by this Commission. The Commission in its
order dated 18th August, 2016, has fixed the final tariff at Rs.4.79 per
unit and has ordered recovery of the difference amount (Rs.5.08-
4.79) from the generators. However, some of the generators have
filed petitions before the Hon’ble ATE, while a few other generators
have filed review petitions before this Commission. The Hon’ble ATE
has ordered the ESCOMS not to recover the difference amount
pending disposal of the petitions. Hence the power purchase cost
allowed in this order is subject to the decisions of the Hon’ble ATE
and also this Commission on such pending petitions.
Accordingly, the Commission decides to approve power purchases of

29161.67 MU at a cost of Rs. 12601.01 Crores for the purpose of Annual
Performance Review for FY16.
4.2.4 Renewable Purchase Obligation (RPO) compliance by BESCOM for

FY16:
1. BESCOM in its petition has filed the details of RPO compliance for solar
and non-solar RPO for 2015-16 as indicated below:
xliii
TABLE-4.9
RPO Compliance as Reported by BESCOM
Million Units
Energy Purchased 29161.67
Non-Solar energy to be procured at 10% target 2916.17
Non-Solar energy actually procured 3759.78
Non-Solar compliance as percentage of energy 12.89

purchased
Solar energy to be procured at 0.25% target 72.90
Solar energy actually procured 131.86
Solar compliance as percentage of energy purchased 0.45
The Commission in its preliminary observations had noted that the

quantum of renewable energy purchased is indicated as 4048.84 MU in
table-2.7, whereas the same is indicated as 3891.63 MU in table 2.10.
Therefore, BESCOM was directed to reconcile the figures and confirm
the correct figures.
BESCOM in its replies to preliminary observations had stated that the

figures indicated at Table-2.7 of the application are computed for
different analysis and the same cannot be compared with figures of
Table 2.10 of the application and hence, had requested to consider
the data as per Table 2.10 of the application for the purpose of RPO.
Subsequently, BESCOM vide its letter dated 10.02.2017 has furnished
reconciled data confirming 3891.63 MU as the renewable energy
purchase.
The Commission has relied upon the subsequent reply furnished by

BESCOM confirming 3891.63 MU as the renewable energy purchase.
For validating the RPO compliance, the Commission had directed
BESCOM to furnish the data as per the specified format, duly
reconciling the data with the audited accounts. BESCOM in its replies
has furnished the following data:
a. Non-solar RPO:
1
xliv
TABLE-4.10
Non-Solar RPO Compliance by BESCOM
No. Particulars Quantum Cost- Rs.

in MU Crores.
1 Total Power Purchase quantum from all sources 29161.67 12600.58
2 Non–solar Renewable energy purchased under 2653.49 939.07
PPA route at Generic tariff including Non-solar RE
purchased from KPCL
3 Non –solar Short-Term purchase from RE sources, 552.80 280.82
excluding sec-11 purchase
4 Non –solar Short-Term purchase from RE sources 553.49 281.17
under sec-11
5 Non-solar RE purchased at APPC 0 0
6 Non-solar RE pertaining to green energy sold to 0 0
consumers under green tariff
7 Non-solar RE purchased from other ESCOMs 0 0
8 Non-solar RE sold to other ESCOMs 0 0
9 Non-solar RE purchased from any other source 0 0
like banked energy purchased at 85% of
Generic tariff
10 Total Non-Solar RE Energy Purchased 3759.78 1501.06
[No 2+ No.3+No.4+No.5 +No.7+No.9]
11 Non-Solar RE accounted for the purpose of RPO 3759.58 501.06
[ No.10- No.5-No.6-No.8]
12 Non-solar RPO complied in % [No11/No1]*100 12.89
b. Solar RPO:
TABLE-4.11
Solar RPO Compliance by BESCOM
No. Particulars Quantum Cost- Rs.
in MU Crores.
1 Total Power Purchase quantum from all sources 29161.67 12600.58
2 Solar energy purchased under PPA route at Generic 75.05 53.89
tariff including solar energy purchased from KPCL
3 Solar energy purchased under Short-Term, excluding 0
sec-11 purchase
4 Solar Short-Term purchase from RE under sec-11 0
5 Solar energy purchased under APPC 0
6 Solar energy pertaining to green energy sold to 0
consumers under green tariff
xlv
7 Solar energy purchased from other ESCOMs 0
8 Solar energy sold to other ESCOMs 0
9 Solar energy purchased from NTPC (or others) as 56.80 60.26
bundled power
10 Solar energy purchased from any other source like 0
banked energy purchased at 85% of Generic tariff
11 Total Solar Energy Purchased 131.85 114.15
[No2+ No.3+No.4+No.5+No.7+No.9+No.10]
12 Solar energy accounted for the purpose of RPO [ 131.85 114.15
No.11- No.5-No.6-No.8]
13 Solar RPO complied in % 0.45
[No12/No.1]*100
The Commission has perused the data furnished and the explanation
submitted by BESCOM. The Commission notes that at sl.no.11 of the
table relating to Non-solar RPO, the total cost is wrongly indicated as
Rs. 501.06 Crs. instead of 1501.06 Crs.
The Commission has approved total input energy of 29161.67 MU for

FY16 in its APR. Thus, BESCOM was required to purchase 2916.17 MU of
Non-solar energy and 72.90 MU of solar energy to meet its RPO targets.
The Commission notes that in non-solar energy of 2653.49 MU under
PPA route, BESCOM has not considered 7.80 MU KPCL Wind Power and
6.10 MU of TBHE. The total non-solar energy purchased would be
3773.68MU. Thus, BESCOM has achieved 12.94% of non-solar and 0.45%
of solar RPO for FY16. As a result, BESCOM has over-achieved its non-
solar and solar RPO targets by 2.94% percentage points and 0.20
percentage points respectively.
4.2.5 Operation and Maintenance Expenses:
BESCOM in its application has sought approval of O&M

expenditure of Rs.1219.34 Crores for FY16. As per the audited
accounts, BESCOM has incurred O & M expenses of Rs.1167.38
Crores as detailed below:
TABLE – 4.12
O&M Expenses of BESCOM as per Audited Accounts for FY16
xlvi
Amount In Rs. Crores
Repairs & Maintenance 83.37
Employee Expenses 860.80
A&G expenses 223.21
O&M expenses 1167.38
BESCOM has requested the Commission to consider indexation

ratio of CPI: WPI at 74: 26 for working out the weighted inflation
rate at 6.78% calculated on one-year CPI & WPI index from
January- December, 2015 and has arrived at the normative
O&M expenditure after factoring in the CAGR of growth in the
number of consumers at 7.44% computed based on the
consumer growth as per actuals of FY16 over FY15 (One year)
with the base O & M expenses as per APR of FY15. BESCOM has
projected the normative O&M expenses as follows:
TABLE – 4.13
Normative O & M Expenses – BESCOM’s submission
Particulars FY16
Consumer growth rate as per actual (CGI) 7.44%
Weighted Inflation Index (WII) 6.78%
O&M Cost of FY15 as per APR Rs.in Crs. 919.68
O&M Index= 0&M (t-1)*(1+WII+CGI-X) Rs.in Crs. 1041.26
Further, BESCOM has claimed that it has incurred additional O&M

Expenses of Rs.15.06 Crores on account of recruitment during FY16,
which is to be treated as uncontrollable expenditure. Also, an amount
of Rs.12.79 Crores is claimed as uncontrollable expenditure on account
of modification of 59000 Group Operating Switches (GOS) operating
pipes provided for distribution transformers in BESCOM. An amount of
Rs.150.23 Crores has been claimed as uncontrollable expenditure
towards Pension and Gratuity contribution. Thus, BESCOM has claimed
uncontrollable O&M expenditure of Rs.178.08 Crores in addition to the
normative O&M expenses of Rs.1041.26 Crores. The total O&M
expenses claimed by BESCOM for FY16 are Rs.1219.34 Crores.
xlvii
The Commission in its Tariff Order dated 2nd March, 2015 had approved
O&M expenses for FY16 as detailed below:
TABLE – 4.14
Approved O&M Expenses as per Tariff Order dated 02.03.2015
Particulars FY16
No. of installations as per actuals as per Audited
Accts 10099416
Weighted Inflation Index 6.69%
CGI based on 3 Year CAGR 6.73%
Actual O&M expenses for FY13-Rs.in Crores. 901.15
Total Approved O&M Expenses for FY16 – Rs.in
Crores 1205.01
The Commission in its preliminary observations had sought the details of

certain expenses booked under A&G expenses by BESCOM during
FY16. BESCOM in its replies has stated that it has incurred expenses of
Rs.118.07 Crores towards remuneration to contract agencies and that
an amount of Rs.43.66 Crores has been incurred towards conveyance
and travel expenses. Further, an amount of Rs.3.38 Crores is incurred
on Legal, Professional and Consultancy charges. Though BESCOM has
furnished the Division-wise amount of expenditure incurred, it has not
furnished the details of expenditure incurred against the above
expenses.
The Commission in its Tariff Orders has been stressing the need to
initiate adequate measures to control the O&M expenses so as to be
within the approved figures.
BESCOM has again sought consideration of one-year data of WPI and

CPI for determining the inflation index and consumer growth rate.
The Commission reiterates its earlier view that, one-year data of WPI
and CPI and consumer growth rate does not reflect the true indices
due to situational variations, if any. Further, the Commission in its Order
dated 7th January, 2016 in RP No.5/2014, has decided to allow O & M
expenses as per the norms of the MYT Regulations. Thus, in
xlviii
accordance with the methodology adopted while approving the ARRs
for FY14-16 and subsequent APRs, the Commission proceeds with the
determination of the normative O & M expenses based on the 12-year
data of WPI and CPI and three year CAGR of consumers.
Considering the Wholesale Price Index (WPI) as per the data available
from the Ministry of Commerce & Industry, Government of India and
Consumer Price Index (CPI) as per the data available from the Labour
Bureau, Government of India and adopting the methodology followed
by the CERC, with CPI and WPI in a ratio of 80: 20, the allowable
inflation for FY16 is computed as follows:
TABLE-4.15
Allowable Inflation for FY16
Product
Composite Year
Year WPI CPI Yt/Y1=Rt Ln Rt [(t-1)*
Series (t-1)
(LnRt)]
2004 98.72 111.1 108.624
2005 103.37 115.8 113.314 1.04 0.04 1 0.04
2006 109.59 122.9 120.238 1.11 0.10 2 0.20
2007 114.94 130.8 127.628 1.17 0.16 3 0.48
2008 124.92 141.7 138.344 1.27 0.24 4 0.97
2009 127.86 157.1 151.252 1.39 0.33 5 1.66
2010 140.08 175.9 168.736 1.55 0.44 6 2.64
2011 153.35 191.5 183.87 1.69 0.53 7 3.68
2012 164.93 209.3 200.426 1.85 0.61 8 4.90
2013 175.35 232.2 220.83 2.03 0.71 9 6.39
2014 182.00 246.90 233.92 2.15 0.77 10 7.67
2015 177.03 261.42 244.542 2.25 0.81 11 8.93
A= Sum of the product column 37.56
B= 6 Times of A 225.37
C= (n-1)*n*(2n-1) where n= No. of years of data=12 3036.00
D=B/C 0.07
g(Exponential factor)= Exponential (D)-1 0.0771
e=Annual Escalation Rate (%)=g*100 7.71
While determining the normative O & M expenses for FY16, the

Commission has considered the following aspects:
a) The actual O & M expenses allowed for FY13 excluding contribution
to Pension and Gratuity Trust as base year data.
xlix
b) The three year compounded annual growth rate (CAGR) 6.89% of
the number of installations considering the actual number of
installations as per the audited accounts up to FY16.
c) The weighted inflation index (WII) at 7.71% as computed above.
d) Efficiency factor at 1% as considered in the earlier two control

periods.
Thus, the normative O & M expenses for FY16 will be as follows:

Particulars FY16
No. of Installations As per actuals as per Audited Accts 10146965
Weighted Inflation Index 7.71%
Consumer Growth Index (CGI) based on 3 Year CAGR 6.89%
Actual O & M expenses for FY13 excluding P&G
contribution (base figure for FY14-16)-Rs.in Crores. 737.09
O&M Index= 0&M (t-1)*(1+WII+CGI-X)- Rs. Crores 1044.76
The above normative O & M expenses have been computed without

considering the contribution to Pension and Gratuity Trust and
additional employee cost on account of recruitment during FY16.
BESCOM, as per its audited accounts has incurred an amount of

Rs.150.23 Crores towards contribution to Pension and Gratuity Trust for
FY16. Further, BESCOM in its application has stated that it has incurred
an amount of Rs.15.06 Crores as additional expenses on account of
recruitment of personnel to fill up the existing vacancies during FY16.
BESCOM has also requested to consider the work awarded amount of
Rs.12.79 Crores towards modification of 59000 Group Operating
Switches’ (GOS) operating pipes provided for distribution transformers
in BESCOM as uncontrollable expenditure.
The Commission decides to treat employee costs on account of

recruitment and contribution to P&G Trust as uncontrollable O&M
expenses. This component has been allowed in addition to the
normative O&M expenses to enable BESCOM to meet its actual
employee costs. Considering the uncontrollable O & M expenses, the
total allowable O & M expenses for FY16 works out to Rs.1210.05 Crores.
The claims towards expenditure for modification of 59000 Group
l
Operating Switches’ (GOS) operating pipes provided for distribution
transformers being the part of the R&M expenses, is already covered
under R&M expenses of the audited accounts which falls under
normative controllable O&M expenses. Hence the Commission has not
allowed this expenditure separately. Nevertheless, the O&M expenses
now allowed on normative basis are more than the actual O&M
expenses incurred by BESCOM for FY16.
The allowable O&M expenses for FY16 are as follows:
TABLE – 4.16
Allowable O & M Expenses for FY16
Sl.
Particulars FY16
No.
1 Normative O & M expenses 1044.77
2 Additional employee cost (uncontrollable 165.29
O & M expenses)
3 Allowable O & M expenses for FY16 1210.06
Thus, the Commission decides to allow an amount of Rs.1210.06 Crores

as O&M expenses for FY16.
4.2.6 Depreciation:
BESCOM in its applications has claimed an amount of Rs.290.60 Crores

as depreciation worked out after deducting an amount of Rs.128.96
Crores being the depreciation amount withdrawn on account of assets
created out of consumers’ contributions / grants as per Accounting
Standards (AS) – 12 as detailed below:
TABLE – 4.17
Depreciation for FY16 – BESCOM’s Submission
Particulars FY16
Gross fixed assets at the beginning of the year 7074.36
Additions during the year 2025.28
Deductions during the year 198.90
Gross fixed assets at the end of the year 8900.74
Depreciation provided 419.55
Average rate of Depreciation 5.24%
li
Less: Depreciation withdrawn from contribution as per AS 12 128.95
Net Depreciation 290.60
The BESCOM has requested the Commission to allow depreciation

amount of Rs.290.60 Crores for FY16.
In accordance with the provisions of the KERC (Terms and Conditions

for Determination of Tariff) Regulations, 2006 and amendments
thereon, the allowable depreciation for FY16 has been determined by
the Commission duly considering the data of assets as per the audited
accounts as follows:
TABLE – 4.18
Allowable Depreciation for FY16

Opening Closing
Balance Balance
Depreciation
Particulars of Asset of Asset
for FY16
as on as on
01.04.2015 31.03.2016
Buildings 79.36 106.77 3.64
Civil 3.39 4.07 0.19
Other Civil 0.81 1.61 0.04
Plant & M/c 1499.28 1986.52 113.38
Line, Cable Network 5441.73 6742.16 299.91
Vehicles 18.68 24.46 1.19
Furniture 11.64 13.62 0.60
Office Equipment 11.92 13.97 0.60
Intangible Assets 4.88 7.72
Sub Total 7071.69 8900.92 419.56
Less Depreciation on account
of assets created out of 128.96
consumer contribution / grants
Net allowable depreciation 290.60
Considering the opening and closing balance of gross blocks of fixed

assets for FY16 and the depreciation as per annual accounts, the
weighted average rate of depreciation works out to 5.25%.
As per the audited accounts for FY16, an amount of Rs.128.96 Crores

on account of depreciation on assets created out of consumer’s
lii
contribution and grants on actual basis is considered for computation
of allowable depreciation for FY16.
Based on the above, the Commission decides to allow the actual net
depreciation of Rs.290.60 Crores for FY16.
4.2.7 Capital Expenditure for FY16:
a) Capital Expenditure of BESCOM:

BESCOM’s submission:
The BESCOM has reported a capital expenditure of Rs.1374.31 Crores

(pages 14 & 15 of the application) as against the Commission
approved capex of Rs.627 Crores for FY16, Whereas, in Format D17,
BESCOM has shown a capital expenditure of Rs.1805.43 Crores. The
details of the category wise Capital expenditure stated to have been
incurred for FY 16, is shown below:
Table-4.19
Capital expenditure for FY16- BESCOM’s Submission
Sl. Approved Expenditure
Schemes
No Capex incurred
1 E&I works
A 11 KV Lines for New Stations 80 33.48
11 KV Other Work+ DTCs including
B 70 22.23
dedicated DTCs for DWS Schemes.
Re- conductoring of ACSR /Rabbit to
C 30 18.53
Coyote in Bangalore Urban
Re-conductoring of LT line using Rabbit
D 20 17.88
conductor
Re- conductoring (Improvement works on 11
E 20 -
KV Rural Feeders)
Strengthening of 11 KV UG cable Network
F 25 45.09
with RMUs
2 NJY 177.47
Providing infrastructure to Un authorized IP
3 60 212.34
Sets
(A) DTC Metering Programme Non RAPDRP
4 30 18.81
Area
(B) Replacing Mechanical Meter By
20
Electrostatic.
69.77
(C) Smart Meter, HT- TOD Meter Replacing
30
MNR etc.
5 RAPDRP & DAS 121.97
6 Service connections 25 58.64
liii
7 Replacement of failure DTCs by new ones 15 95.52
8 A)Civil Engineering works, DSM & Others 25 34.97
B)Consumer Education 1 -
9 HVDS 255.77
10 Providing fault locators 1
11 Electrification Hamlets /Villages 5 -
12 Energisation of IP Sets 20 -
13 T &P and Computers, IT initiative, TIC 10 36.94
Other works including Safety measures fund,
14 20 67.43
Local Planning, Emergency restoration, TIC
15 Providing AB Cable 120 10.93
16 Ganga Kalyana 57.5
17 DDUGJY 1.24
18 IPDS 3.21
19 One Time Maintenance 13.00
20 RGGVY 12th plan 1.60
Total 627 1374.31
BESCOM has clarified in the replies to preliminary observations that, the

difference in Capital expenditure shown as Rs.1805.43 Crores and the
category wise expenditure indicated at Rs.1374.31 Crores is due to the
inclusion of capex under consumer contribution in Rs.1805.43 Crores
shown in D17.
Commission’s analysis and decision:
In the Tariff Order dated 2nd March, 2015, the Commission had
approved an amount of Rs.627 Crores towards capital expenditure for
FY16, against the BESCOM’s proposed capex of Rs.2050 Crores, as
BESCOM had indicated a loan amount of Rs.604 Crores for FY16.
From the above table, it is seen that, the capital expenditure incurred
by BESCOM at Rs.1374.31 Crores is in excess of the approved capex to
an extent of Rs.747.31 Crores for FY16. The Commission notes that, the
capex incurred beyond the approved amounts would necessitate
incurring additional amounts towards interest and depreciation
affecting the approved ARR and the retail supply tariff. In view of this,
the Commission has been directing all the ESCOMs to plan their capex
carefully so as to ensure that they do not exceed the capex
achievement by a huge margin which will have a substantial impact
on the tariff to the end consumers.
liv
BESCOM in its reply to the preliminary observations has stated that, out
of Rs.1374.31 crores, it has utilized Rs.870.27 Crores for spill over works
and Rs.504.02 Crores for meeting the new works of FY16. Also, BESCOM
in its replies to the rejoinder has stated that, a capex of Rs.627 Crores
for FY16 has been approved by the Commission for new works and its
capex for new works is well within the approved capex of Rs.627
Crores. It is to be noted here that, the Commission approves capex of
ESCOMs for the financial years to facilitate execution of its new works
as well as spill over works and the capex approval for the financial year
will not be segregated as stated above. Also, there is no instance of
any ESCOM separately seeking capex approval for the new works and
spill over works, in any of the financial year in the past.
BESCOM has stated that, a capex of Rs.870.27 Crores is used for

spillover works. This clearly shows that, a large number of works were
kept pending execution under the spillover/ongoing category every
year. BESCOM needs to monitor the works properly to complete them
within the time frame and categorize them without undue delay.
From the above table it is seen that, the works like “E&I of 11 kV Lines
for New Substations, 11 kV Other Work and DTCs including dedicated
DTCs for Drinking Water Schemes and Re- conductoring of ACSR
/Rabbit to Coyote in Bangalore Urban”, are very essential for
improvement of the ESCOM’s network strengthening and loss
reduction. But the BESCOM has achieved progress of less than 50% of
the approved capex on these works. The BESCOM, in its response to
the Commission’s preliminary observations has not furnished a
satisfactory reply on this aspect. BESCOM should note that, the E&I
work would help to improve its distribution system network connectivity,
reduce technical losses and improve reliability of the system. Therefore,
BESCOM ought to have incurred approved capex in full for these
works.
In respect of “NJY programme”, BESCOM has incurred a capex of

Rs.177.47 Crores and the Commission had sought the details of the
lv
analysis it has carried out on the benefits earned. BESCOM in its replies
to preliminary observations made by the Commission has stated that,
pre and post implementation analysis of NJY has been carried out by a
third party agency and has listed some of the benefits accrued as
below:
a) After implementation of NJY programme, BESCOM is providing

24X7 hours power to non-agricultural loads in rural areas and has
achieved improvement in quality of power supply with improved
standard of living,
b) The metered consumptions in Rural areas has increased by 25%,
c) The NJY has reduced the failure of Distribution transformers,
d) NJY has resulted in better consumer satisfaction and

encouragement of rural Industries.
In respect of “Replacing Mechanical Meter by Electrostatic/Smart

Meter, HT- ToD Meter, Replacing MNR etc.”, BESCOM has incurred a
capex of Rs.69.77 Crores as against the approved capex of Rs.50
Crores. BESCOM in its replies to the Commission’s preliminary
observations has stated that, the higher capex in this category is due
to procurement of static meters which have advantages of higher
accuracy, recording demand, registering of information on pilferages
and also, to avoid consumer grievances on average billing and
accuracy issues.
Under the item of “Replacement of failed Distribution Transformers by

new ones”, the BESCOM has shown a capex of Rs.95.52 Crores which
does not appear to be correct. The Commission had pointed out the
discrepancy in the accounting practice in the previous year also and
all ESCOMs had agreed to set right the same. BESCOM in its replies to
preliminary observations has only furnished data on number of failed,
repaired and new transformers used to replace failed ones. But, has
not clarified the reasons sought for showing the capex of Rs.95.52
lvi
Crores. Moreover, the scrapped transformers being 879 in numbers,
BESCOM has procured 1236 numbers of new transformers and incurred
only Rs.12.72 Crores. BESCOM should note that, only the failed
transformers which are beyond repairs due to burning / fully damaged
are to be scraped and could be replaced by new transformers and
such transformers can be accounted under capex. The charges
incurred for the repairs of failed Transformers are to be accounted
under Revenue Expenditure.
In respect of “Distribution Automation System (DAS) & Smart Grid (SG)

programme”, BESCOM has indicated a capex of Rs.44.25 Crores.
BESCOM in its replies to the Commission’s preliminary observations has
submitted the details of progress of work of DAS programme, but, it has
not indicated as to when the DAS programme will be completed and
commissioned. The Commission notes that this work has been going on
since a long time and directs BESCOM to ensure early completion of
the work with a view to ensure that the intended benefits of the scheme
are realised without any further delay.
In respect of “HVDS”, works BESCOM has achieved a capex of

Rs.255.77 Crores. The Commission had sought the details of this scheme
and its post- commissioning analysis. BESCOM in its replies to preliminary
observations has stated that, a third party analysis has been awarded
and the outcome will be submitted to the Commission after receipt of
the report.
A capex of Rs.13 Crores for “One-time maintenance of distribution

system” has been incurred by BESCOM. BESCOM in its replies to
preliminary observations made by the Commission has furnished the
details of the works carried out in the O&M Divisions and stated that,
the works are being inspected by a third party for analysis of the pre
and post-commissioning scenarios. BESCOM has stated that, the report
will be submitted to the Commission after the third party submits the
analysis.
lvii
In respect of works taken up under “TENDER SURE projects”, which are
infrastructure projects of BBMP Bengaluru, it is stated that, the works are
taken up as capital works of BESCOM, whereas, such works shall have
to be treated as Deposit Contribution Works (DCW). Since this work is
being executed by the BBMP, the amount incurred on its execution has
to be recovered from BBMP, and it cannot form part of capex
programme of BESCOM.
The BESCOM’s explanation on this is not acceptable and the

Commission directs BESCOM to collect an amount of Rs.44.30 Crores
stated to have been incurred against TENDER SURE works from BBMP
and report the same to the Commission separately. If the amount is not
collected by BESCOM, the same would be disallowed during APR of
FY17.
Further, it is noted that BESCOM has been incurring capex over and
above the approved amounts from the past four years as indicated
below:
Table-4.20
Approved and Actual Capex incurred –FY12 to FY16

Amount in Rs. Crores.
Particulars FY12 FY13 FY14 FY15 FY16
Capital investment
approved by the 660.00 510.00 848.00 763.00 627.00
Commission
Actual capital
investment incurred as 557.68 851 1052 1782.85 1805.43
per audited accounts
Shortfall (-)/ Excess -102.32 341 204 1019.85 1178.43
Percentage
84.49 167% 124% 233.7% 287.94%
achievement
From, the above information, it is evident that, there is no proper

planning of capital expenditure, budgetary control and monitoring to
ensure that the capex amounts spent are well within the allotted funds.
Further, the Commission had issued “Capital Expenditure Guidelines for
ESCOMs” in which the capital investment planning process and
prioritization and post commissioning analysis to be adopted by the
lviii
ESCOMs, have been emphasized. The Commission notes that BESCOM
is yet to implement the said guidelines issued by the Commission.
The BESCOM, in its replies to the rejoinders, has explained that, the
excess expenditure over and above the approved amount is due to,
the inclusion of capex in respect of NJY works, HVDS works, consumer
contribution works, IPDS and RAPDRP works which are being provided
with grants from Government of India and Government of Karnataka.
The Commission, after reviewing the progress achieved in the capex

for FY16 and considering the replies furnished by BESCOM, decides to
allow the capex of Rs.1374.31 Crores, subject to disallowance if any, as
per the results of the prudence check of capital expenditure for FY16,
as discussed below.
b) Prudence check of capital expenditure and material procurement of

BESCOM for FY16:
The Commission has got the Prudence checks of capital expenditure

for FY16, done through third party verification of the capital works
categorized and the material procurement of BESCOM during FY16.
This was taken up in two parts:
i. Prudence check of execution of the capital works of FY16.

ii. Prudence check of Material Procurement process of FY16.
i. Prudence check of execution of the capital works of FY16
The capital expenditure as proposed by BESCOM is being allowed by

the Commission as per the filing every year, subject to prudence
check. Accordingly, the prudence check of the capital expenditure
incurred by BESCOM for the FY16 was got done by the Commission by
engaging the services of M/s. Power Research and Development
Consultants Pvt. Ltd. (PRDCL) as consultant, being the lowest bidder for
the said job, through a transparent process of e-tendering to evaluate
lix
the works categorized during FY16, which includes the spill over works
of earlier year’s and the new works of FY16.
M/s PRDCL has stated that, it has received a list of 69,728 works costing
Rs.1575.87 Crores from BESCOM, in which 26457 works were costing
more than Rs.1 Lakh with a total cost of Rs.1353.06 Crores. M/s PRDCL
has drawn the required sample size from the list provided as per the
guideline issued and the terms of the reference prescribed in the bid
document and the scope of the work issued by the Commission. The
total works and selected samples for prudence check are shown
below:
TABLE – 4.21
Total works and selected samples for Prudence check
As per sample
As per List furnished
selected
Particulars
No. of No. of Cost
Cost
Works Works
Works costing more than Rs.6
2230 971.52 125 227.47
lakhs
Works costing between Rs.3 to
3383 98.78 52 2.26
Rs.6 lakhs
Works costing less than Rs.6 lakhs 20844 282.76 42 1.10
Total 26457 1353.06 219 230.83
M/s PRDCL has stated that, they have verified the data received from
the O&M divisions and examined the works by conducting the site
visits. Various details like, energy savings, benefits derived and details
regarding the execution of respective works were collected and
reviewed. Further, in the grading of the works M/s PRDCL has observed
that, out of 206 works evaluated (13 works were not evaluated), five
works were found to be just qualified as prudent, 194 works were
graded at 61-70 marks, seven works were found to be excelling by
getting more than 71 marks, seven works were found to be
conditionally prudent and one work is not meeting the prudence
norms.
lx
As per the report of the consultant, the following is the summary of
Prudence check findings for FY16:
TABLE – 4.22
Summary of Prudence check findings for FY16
Cost in Rs.
Particulars Numbers
Crores
Works costing Rs.6 Lakhs and above
125 227.47
considered as samples
Works costing between Rs.3 Lakhs and Rs.6
52 2.26
Lakhs considered as samples
Works costing below Rs.3 Lakhs considered
42 1.1
as samples
Works not meeting Rs.6 Lakhs and above Nil -
the norms of Rs.6 Lakhs and Rs.3
01 0.0348
prudence Lakhs
below Rs.3 Lakhs Nil -
Total works not meeting the norms of
prudence as stipulated in the guidelines 01 0.0348
issued by this Commission
M/s PRDCL has furnished the details of works not meeting prudence
norms and the works which are conditionally prudent as follows:
TABLE – 4.23
Details of Not Prudent and Conditionally Prudent works
Cost Rs.
Division Work nomenclature
Lakhs
Non- Prudent work
Enhancement of 100kva to 250kva Distribution
Transformer of N3TC-319, S.C. Gangabyraiah TC in O &
Rajajinagar 3.48L
M-7 area, N3 S/D, Basaveshwaranagar, Rajajinagar
Division, BESCOM on total turnkey basis
Conditionally prudent works
11 KV New Feeder/link line under RAPDRP scheme, from
Chandapura Attibele MUSS for bifurcation of F-15 feeder by using 99.17
3*400 Sq. mm UG Cable – Attributable to KPTCL
Evacuation of new feeder from Sahakaranagara MUSS
to Agrahara layout to reduce the overload of existing F-
Hebbal 153.95
14 feeder from Sahakaranagara MUSS in O & M Unit-
20A, C8 sub-division (W.O. No T-4023 dated 03.11.2015),
Chitradurga RAPDRP -B project at Chitradurga town 1487
Arranging 62HP+960W power supply to concrete
product industry in favor of Manjula w/o Sreekantha G T
Kanakapura 2.86
at Gollanadoddi in Harohalli section, Harohalli sub
division
Tumkur Conversion of existing LT distribution system into high 262.57
lxi
voltage distribution system (HVDS) for MF-9 D.G. Hally
feeder of Hebbur section in RSD2 sub-division
Conversion of existing LT distribution system into high
Tumkur voltage distribution system (HVDS) for MF-4 Mallasandra 85.7
feeder of S. Nagara section in RSD2 sub-division
Tumkur voltage distribution system (HVDS) for MF-4 F2 Mulukunte 594.76
feeder of Honnudike section in CSD3 sub-division
voltage distribution system (HVDS) for MF-4 F-8 M
Tumkur 452.72
Gollahalli feeder of Honnudike section in RSD1 sub-
division
Total 3138.73
Further the consultant, who has carried out the prudence check of
KPTCL has stated that, one project not meeting the norms of Prudence
in KPTCL needs to be attributed to BESCOM for the following reasons:
 It is observed that the 66/11 kV Srigandadakavalu

Substation, in Bengaluru transmission zone remains unutilized
in spite of it being ready in all respect as BESCOM has not
connected required load through 11kV feeders to the
station. In this case KPTCL may not be penalized for the
project not meeting prudence norms. The responsibility
should be fixed on the BESCOM for its failure to execute the
required number of 11kV feeders from this substation.
The summary of works which are having cost overrun as well as time
overrun are shown as follows:
TABLE – 4.24
Summary of Works having Cost overrun
Particulars Within 10% 10-25% Above 25%
Rs.6 Lakhs and above 19 14 08
Rs.6 Lakhs and Rs.3 Lakhs 06 04 03
below Rs.3 Lakhs 07 01 00
TABLE – 4.25
Summary of Works having Time overrun
Between one and
Particulars Within Year Above 2 Years
two Years
Rs.6 Lakhs and above 26 03 05
Rs.6 Lakhs and Rs.3 Lakhs 06 02 02
lxii
below Rs.3 Lakhs 06 00 01
M/s PRDCL has made some important observations as follows:

a) In case of a few NJY works, field works are completed, but the
assets are not categorized due to various reasons, primarily
because of noncompliance of conditions and bills not submitted
by the contractors. In general, the categorization of assets has
been delayed by a few months for majority of the projects.
b) Some of the works were yet to be categorized or are partly

categorized as the contractors reportedly have failed to submit
the bills and joint inventory statements.
c) In a few other cases there have been delays in categorization,

due to delay in submission of completion reports of works from
the field officials.
The Commission had forwarded the copy of the Prudence check

Report submitted by the Consultant to BESCOM along with the report
in respect of KPTCL for its views/comments and justification if any on
the non-prudent works for being treated as meeting to norms of
prudence to reach the Commission on or before 20th March, 2017.
BESCOM in its letter dated 20th March, 2017 has stated that, the project
in which the 250kVA transformer was shifted has been brought back to
its original place on 7.2.2017. But, the consultant has clearly mentioned
that, even during the writing of the draft report which was
subsequently submitted to the Commission on 21st February 2017, it had
contacted the officials of BESCOM and confirmed that, the transformer
has not been put back into its original place. The extract of the
annexure to the prudence check report is shown below:
“Even till this day of writing this report, 250kVA transformer had
not been reinstalled and the present load is fed by 100kVA
transformer itself”
Further, BESCOM, in respect of the conditionally prudent works, has

furnished very general replies.
lxiii
The Commission has verified the reply by BESCOM and the views
/comments and the justifications for the works to be treated as
meeting prudence norms though treated as not meeting the
prudence norms by the consultants. The Commission has decided that,
the interest and depreciation pertaining to the cost of works termed as
not meeting prudence norms are to be disallowed as shown below:
TABLE – 4.26
Details of Amounts disallowed in APR FY16
Sl Amount in
Particulars
No Rs. Crores
Total cost of categorized works eligible for prudence
1 1353.06
check
2 Total cost of the sample works 230.83
Cost of sample works not meeting prudence norms (01
work with cost of Rs.3.48Lakh against a sample basket
3 of 24 works with Rs.1.22 Crore in the category of 0.0348
additional transformers 2648 Nos. and total cost of
Rs.41.78Crores)
Percentage of cost not meeting prudence norms with
respect to the total samples considered in the
4 2.852
category (Rs.3.48 Lakh against a sample basket of 24
works with Rs.1.22 Crore)
Overall cost of capex in the category not meeting
prudence norms compared with the cost of the total
cost of the category of Additional transformers
5 1.19
(2.852% of sample basket escalated to total capex
under the respective category of works of
Rs.41.78Crores)
The cost of KPTCL works not meeting the norms of
6 3.98
Prudence attributable to BESCOM
Total amount of capex not meeting the norms of
7 5.17
prudence (=5+6)
Amount to be disallowed towards works not meeting
prudence norms calculated on the basis of weighted
8 0.564
average interest & weighted average depreciation
on the capex to be disallowed.
Thus, the Commission decides to deduct an amount of Rs.0.564 Crores

towards disallowance of interest and depreciation on the imprudent
capital works for FY16 in the revised approved ARR for FY18 as
discussed in the subsequent chapter of this Order.
ii. Prudence check of Material Procurement process of FY16:
lxiv
The BESCOM is carrying out the Capital works through total turnkey as
well as partial turnkey. In some cases, the agency or the contractor
assigned with the partial turnkey would also invest in some of the
smaller materials whenever it is necessary. While procuring the
materials at large quantities, it is very essential for BESCOM to see that,
no stock is kept idle for a longer period and the material procurement
and distribution is carried out in a prudent manner. The Commission has
been instructing the consultants to also carry out prudence check of
the material procurement process in all the ESCOMs along with the
prudence check of execution of works.
M/s PRDC has stated that, BESCOM has considered all the aspects
related to procurement and has procured the materials as per the
requirement after due process of “e-tendering” duly following the
Transparency Act. However, the Government of Karnataka has
exempted the utilities from the Transparency Act, in respect of
purchase of materials directly from certain firms like KAVIKA without
calling for tenders. Some materials for works are also directly
purchased through rate contract basis from the firms, with whom
BESCOM has entered into agreement after necessary bidding
processes.
Some of the observations made on the procurement are:
a) The materials are procured through the process of e-tendering

duly following the regulations as per KTPP Act.
b) Procurement of Distribution Transformers is exempted from the KTPP
Act.
c) There were 4397 nos. of 25 kVA capacity transformers in stock at
the beginning of the year. 9,320 transformers were procured during
the year against 32,220 transformers ordered and 12,994 were
utilized for works. Only 1,046 transformers remained in stock at the
end of the year. These are proposed to be utilized for NJY works,
HVDS works, UNIP regularization works etc.
lxv
d) Opening balance of 63 kVA transformers at the beginning of the
year was 436 nos. Orders were placed for procurement of 4,440
transformers of this rating, against which 2,306 were supplied. 2,318
transformers were utilized for works were utilized and remaining 326
(including O.B) were in stock as on 31.3.2016.
e) Opening balance of 100 kVA transformers was 155nos. at the
beginning of the year. Procurement orders were placed for 2,730
transformers out of which 1,042 transformers were received. A total
of 1,091 transformers were utilized or works and remaining 11 only
was held in stock at the end of the year.
f) In respect of 250 kVA transformers, 267 were received during the
year, to add to the opening stock of 45 nos whereas, 301
transformers were utilized for works, balance 11 only remained in
stock at the end of the year. Orders had been placed on firms
to supply 680 transformers of this capacity.
g) No new transformers of 500 kVA were ordered 14 of the 15
transformers that were available in stock and were utilized for
works and at the end of the year only one transformer remained
in stock.
h) In respect of HT aerial bunched cables, opening balance was
8.456 km, no procurement was made in FY16, 7.5 km of
conductor was issued for works and remaining 0.9km was in
stock as on 31.3.2016
i) LT, AB cable opening balance was 33.7 km, 100 km was
procured, 47.3 km was issued and remaining 94.36 km was
available in stock at the end of the year.
Further, considering the size of BESCOM’s jurisdiction and consumer

base of 101.46 lakhs, handling an energy consumption of 29,161.67 MU
with a network of HT lines of 89,297.69 ckt kms and LT network of
16,3045.47 ckt kms, and 2,36,672 number of transformers, the stock of
various materials quantity stated above is acceptable.
The Commission after noting the above observations of the consultant:

i. Directs BESCOM to take action to make the conditionally prudent
works to meet the norms of prudence and furnish compliance,
lxvi
failing which the applicable weighted average interest and
depreciation cost of the conditionally prudent works will be
disallowed during APR of FY17.
ii. Directs BESCOM to take action to rectify the work termed as not
meeting prudence check and report.
iii. Directs BESCOM to Monitor the works, complete and categorize
the works within the target time.
iv. Directs BESCOM to monitor the stock position continuously to see
that, no material is kept as idle stock.
4. 2.8 Interest and Finance Charges
a) Interest on Capital loan:
BESCOM in its application has claimed an amount of Rs.266.03

Crores towards interest on long term loans drawn from banks /
financial institutions. The details of interest on loans claimed by
BESCOM are as follows:
TABLE – 4.27
Interest on Capital Loans- BESCOM’s Submission

Particulars FY16
Long term Loan outstanding as on 31.03.2015 2663.74
Less repayments 159.30
Long term Loan outstanding as on 31.03.2016 2504.44
Average loan for the year 2584.09
New Loans availed during the year 845.35
Interest on long term loans 266.03
Considering the opening balance of loans, fresh borrowings and

the repayment of loans during FY16, the weighted average rate
of interest on the average loan amount works is stated to be
7.76%. BESCOM has requested the Commission to allow an
lxvii
amount of Rs.266.03 Crores for FY16 towards interest on long term
loans.
The Commission has considered the opening and closing balances of

long term loans as per the audited accounts for FY16 and
repayments/new loans as per format D9 of the application as shown
below:
TABLE – 4.28
Allowable Interest on Capital Loans – FY16

Particulars FY16
Opening Balance Secured Loans 2628.66
Opening Balance Un-secured Loans 40.07
Total opening balance of loans 2668.73
Add new Loans 851.82
Less Repayments 159.30
Total loan at the end of the year 3361.25
Average Loan 3014.99
Interest on long term loans as per audited accounts for
266.03
FY16
Considering the average loan of Rs.3014.99 Crores and an amount of

Rs.266.03 Crores incurred towards interest on long term loans, the
weighted average of interest works out to 8.82% which is lesser than the
prevailing interest rates.

towards interest on loan for FY16.
b) Interest on Working Capital:
BESCOM has furnished the details of short term loans/overdraft

borrowed during the year FY16 to meet its day to day
expenditure (working capital). BESCOM has indicated the
lxviii
opening and closing balances of short term loans/overdraft at
Rs.2819.99 Crores and Rs.3674.54 Crores respectively for FY16.
The interest on short term loan/overdraft is indicated at Rs.311.81
Crores. The weighted average rate of interest is 9.60% p.a.
In accordance with the provisions of the MYT Regulations,

BESCOM has computed the normative interest on working
capital of Rs.342.45 Crores based on short term prime lending
rate of SBI of 14.75% p.a. for FY16 limited to the actual
expenditure plus 50% of the difference between the actual
expenditure and the amount calculated on normative basis as
detailed below:
TABLE – 4.29
Interest on Working Capital - BESCOM’s Submission

Particulars FY16
One-twelfth of the amount of O&M Expenses 100.59
Opening GFA as per Audited Accounts 7074.76
Stores, materials and supplies at 1% of Opening
balance of GFA 70.75
One-sixth of the Revenue 2358.04
Total Working Capital 2529.38
Rate of Interest (% p.a.) 14.75%
Interest on Working Capital 373.08
Actual Interest incurred for FY-16 311.81
50% of the difference of interest incurred and
interest on normative basis 30.64
Normative Interest on Working capital 342.45
As per the audited accounts, BESCOM has incurred interest on working

capital of Rs.311.81 Crores on short term borrowings/overdrafts during
FY16.
The concept of charging interest on the basis of prime lending rate of

SBI no more exists as the interest rates by commercial banks and
lxix
financial institutions are governed by the base rate of interest declared
by RBI during FY16. At present, the interest rates are based on Marginal
Cost of fund based Lending Rates (MCLR) effective from 1st July, 2017.
As per the BESCOM’s application, it is stated that short term loans for
FY16 have been availed at a weighted average rate of interest of
9.60%. However, for computation of normative interest on working
capital, the Commission decides to consider the base rate of interest
of 9.25% with spread of 250 basis points and to allow short term loans at
a normative interest of 11.75% for FY16.
As per the KERC (Terms and Conditions for Determination of Tariff)

Regulations, 2006 and amendments thereon, the Commission has
computed the allowable interest on working capital for FY16 as follows:
TABLE – 4.30
Allowable Interest on Working Capital for FY16

Amount in Rs . Crores
Particulars FY16
Opening GFA 7079.23
Stores, materials and supplies 1% of Opening balance of GFA 70.79
Normative Interest on Working Capital 295.32
Actual interest on WC as per audited accounts for FY16 311.81
Allowable Interest on Working Capital 295.32
Since the actual interest on working capital is more than the normative
interest on working capital, the Commission, as per the provisions of the
MYT Regulations decides to limit the allowable interest on working
capital to the normative levels.
towards interest on working capital for FY16.
c) Interest on Consumer Deposits:
lxx
BESCOM in its application has claimed an amount of Rs.245.24
Crores towards payment of interest on consumer security
deposits for FY16.
TABLE – 4.31
Interest on consumer security deposits for FY16 – BESCOM’s Submission
Particulars FY16
Opening balance of Consumer Deposits 2831.86
Closing balance of consumer deposits. 3233.34
Average Consumer deposit for FY16 3032.60
Interest on consumer deposits 257.77
Bank Rate of Interest -% 8.50%
Actual interest provision made for FY16 245.24
The Commission notes that, the interest on consumer security deposits

amounting to Rs.245.24 Crores claimed by BESCOM as per the audited
accounts for FY16 works out to a weighted average rate of interest of
8.09%. As per the KERC (Interest on Security Deposit) Regulations, 2005,
the interest on consumer deposits is to be allowed as per the bank rate
prevailing as on the 1st of April of the relevant year. The bank rate as
on 1st April, 2015 was 8.50%. The actual weighted average rate of
interest is below the applicable bank rate.

towards interest on consumer security deposits for FY16.
d) Other Interest and Finance charges:
BESCOM has claimed an amount of Rs.23.52 Crores towards other

interest and finance charges for FY16 which includes charges payable
to banks / financial institutions and guarantee commission payable to
GoK and also stamp duty. The Commission notes that as per the
audited accounts an amount of Rs.12.74 Crores is incurred towards
Bank charges and an amount of Rs.9.73 Crores is paid to GoK as
guarantee commission besides payment of Rs.1.05 Crores for stamp
lxxi
duty on availment of loans. Hence, the Commission decides to allow
an amount of Rs.23.52 Crores as other interest and finance charges for
FY16.
e) Capitalization of Interest and other expenses:
BESCOM in its application has claimed, as per the audited accounts,

an amount of Rs.146.85 Crores towards capitalization of interest on
loan and other operation and maintenance expenses for FY16. The
same has been considered for computation of APR for FY16.
Thus the allowable interest and finance charges for FY16 are as follows:
TABLE – 4.32
Allowable Interest and Finance Charges
Sl.
Particulars FY16
No.
1. Interest on Loan capital 266.03
2. Interest on working capital 295.32
3. Interest on consumer deposits 245.24
4. Other interest and finance charges 23.52
5. Less Interest and other expenses capitalized 146.85
6. Total interest and finance charges 683.26
4.2.9 Other Debits:
BESCOM, in its application has claimed an amount of Rs.16.25

Crores towards other debits as detailed below:
TABLE – 4.33
Other Debits-BESCOM’s Submission
Sl
Particulars FY16
No
Small and Low value items written
1
off 0.16
2 Losses/gains relating to Fixed assets 6.91
3 Assets decommissioning cost (0.11)
4 Bad debts written off 0.22
lxxii
5 Miscellaneous losses and write offs 10.89
6 Material cost variance (1.82)
Total 16.25

The Commission notes that as per the audited accounts for FY16, an
amount of Rs.16.26 Crores has been factored as other debits as stated
by BESCOM in its application.
Therefore, the Commission decides to consider an amount of Rs.16.26

Crores as other debits for FY16.
4.2.10 Net Prior Period Charges:
BESCOM in its application, as per the audited accounts, has

claimed an amount of Rs.11.57 Crores towards Prior Period
Expenses as detailed below:
TABLE – 4.34
Net Prior Period Charges-BESCOM’s Submission
Particulars FY16
Prior period Credits (9.99)
Prior period expenses 21.56
Net prior period Expenses 11.57
As per the Audited Accounts for FY16, the prior period debit is Rs.21.56
Crores on account of employee costs, A&G expenses and under
provided depreciation and other expenses of earlier years. Further, the
prior period credit of Rs.9.99 Crores is on account of excess provision for
depreciation and other income related to prior period. Hence, the
Commission decides to allow net prior period expenses of Rs.11.57
Crores for FY16.
4.2.11 Return on Equity:
lxxiii
BESCOM in its application has claimed Return on Equity of

Rs.107.12 Crores for FY16 as detailed below:
TABLE – 4.35
Return on Equity – BESCOM’s Submission
Particulars FY16
Opening Equity 697.99
Less: Consumer meter security deposit 54.81
capitalized
Equity addition during the year 97.02
Closing equity for the year 740.20
Average Equity for FY16 691.09
Return on equity @ 15.50% 107.12
However, BESCOM in its application under revenue requirement format

has considered RoE of Rs.108.00 Crores for FY18. BESCOM has
requested to allow Rs.108.00 Crores as RoE considering only the equity
without taking into account the accumulated losses.
The closing balances of gross fixed assets along with break-up of equity
and loan component and the details of GFA, debt and equity (net-
worth) for FY16 as per actual data as per the audited accounts are
indicated as follows:
TABLE – 4.36
Status of Debt Equity Ratio for FY16
Equity %age %age
Normative Normative
GFA Debt (Net- of of
Debt @ Equity @
(Closing (Closing worth) actual actual
70% of 30% of
Balance) Balance) (Closing debt on equity
GFA GFA
Balance) GFA on GFA
8908.47 3361.26 327.26 6235.93 2672.54 37.73 3.67
From the above table it is evident that the debt and equity amounts
llie within the normative amounts (in the debt equity ratio of 70:30) on
the closing balances of GFA for FY16.

computed the allowable Return on Equity at 15.5% on equity plus the
accumulated balance of profit/loss as per audited accounts as at the
lxxiv
beginning of the year and also factoring recapitalization of security
deposit of Rs.100.00 Crores in compliance with the Orders of the
Hon’ble ATE in appeal No.46/2014. The allowable RoE for FY16 is
determined as follows:

computed the allowable Return on Equity at 15.5% on equity plus
accumulated balance of surplus/deficit as at the beginning of the
year besides allowing taxes as per actuals. Considering the status of
equity as per the audited accounts for FY16, the allowable RoE is
determined as follows:
TABLE – 4.37
Allowable Return on Equity
Particulars FY16
Paid Up Share Capital 546.92
Share deposit 151.08
Reserves and Surplus as on 01.04.2016 (475.77)
Recapitalization of security deposit (100.00)
Total Equity 122.23
Return on equity @ 15.50% 18.95
Considering the total equity of Rs.222.23 Crores as at the beginning of the

FY16 and factoring the recapitalization of security deposit of Rs.100.00
Crores in compliance with the Orders of the Hon’ble ATE in appeal
No.46/2014, BESCOM has a net worth of Rs.122.23 Crores.
Further, as reported by BESCOM, an additional equity of Rs.97.02 Crores

has been received from Government of Karnataka during the year.
Considering the actual date of receipt of this additional equity, the
Commission as per provisions of the MYT Regulations, has determined the
allowable return on additional equity as detailed below:
TABLE-4.38
Return on equity for the additional equity received during FY16

Additional Equity received during FY16 Amount Received No. of RoE
in Crs on Months allowed
EN 56 PSR 2014 P dated 26.03.2015 2.2 4.4.2015 11 0.31
EN 16 PSR 2015 dated 26.06.2015 2.25 10.7.2015 8 0.23
EN 16 PSR 2015 dated 26.06.2015 0.5 10.7.2015 8 0.05
lxxv
EN 11 PSR 2015 dated 25.08.2015 12 8.9.2015 6 0.93
EN 16 PSR 2015 dated 01.09.2015 20 8.9.2015 6 1.55
EN 10 PSR 2015 P1 dated9.11.2015 4.5 14.12.2015 3 0.17
EN 10 PSR 2015 P1 dated9.11.2015 1 14.12.2015 3 0.04
EN 16 PSR 2015 P1 dated3.12.2015 20 14.12.2015 3 0.78
EN 11 PSR 2015 dated30.12.2015 5.57 7.1.2016 2 0.14
EN 16 PSR 2015 P1 dated10.2..2016 2.3 23.02.2016 1 0.03
EN 16 PSR 2015 P1 dated10.2.2016 0.49 23.02.2016 1 0.01
EN 11 PSR 2015 P1 dated 18.2.2016 6.21 5.3.2016 0 0.00

0.00
EN 16 PSR 2015 dated29.02.2016 20 5.3.2016 0
TOTAL 97.02 4.24
Return on Equity allowed on Additional Equity Infusion in FY16 4.24
Thus, the Commission decides to allow Return on Equity of Rs.23.19

Crores for FY16.
4.2.12 Income Tax:

As per the audited accounts, the BESCOM has incurred an expenditure of
Rs.24.51 Crores towards payment of Income Tax for FY16. In accordance
with the provisions of the MYT Regulations, the Commission decides to
allow the actual Income Tax of Rs.24.51 Crores paid for FY16.
4.2.13 Other Income:
The BESCOM in its application has claimed an amount of Rs.40.35

Crores as other income for FY16 as against the actual other income of
Rs.167.21 Crores as per the audited accounts for FY16. The BESCOM, in
its claims has requested to allow retaining the interest of Rs. 5.45 Crores
earned on bank fixed deposits, incentive of Rs.116.78 Crores earned for
prompt payment of power purchase bills and miscellaneous income of
Rs.5.00 Crores earned in the process of recruitment of employees.
The details of the other income indicated by the BESCOM for

FY16 are as under:
TABLE – 4.39
Other Income – BESCOM’s Submission
Particulars FY16
lxxvi
Rent 3.56
Miscellaneous 30.93
Rebate at 0.5% for collection of Electricity
Duty 3.04
Interest on Bank Deposits 2.82
Total other income 40.35
As per the audited accounts, an amount of Rs.167.21 Crores is

indicated as other income for FY16. The Commission notes that any
income earned during the course of business on account of prompt
payments to the Generators, interest earned on fixed deposits and
miscellaneous income etc., has to be passed on to the consumers as
they bear the entire cost of operation of the distribution company
including return on the equity. Hence there is no justification for
claiming other income as Rs. 40.35 Crores even though an amount of
Rs.167.21 Crores has been accounted as other income in the audited
accounts for FY16.
However, Commission, as decided in the earlier Tariff Orders, in order to

encourage and bring in financial discipline in timely payment of
monthly power purchase bills, decides to continue to allow10% of the
total incentive amounting to Rs.11.68 Crores on account of timely
payment of power purchase bills to be retained by the BESCOM for
FY16. The Commission also decides that the entire amount of Rs.8.28
Crores earned by the BESCOM by way of interest on bank fixed
deposits should be included in other income, since the BESCOM has
deposited the funds available from the business. Further, the
Commission considers the entire amount of Rs.35.94 Crores of
miscellaneous income reported by the BESCOM in its audited
accounts, as other income. Thus after deducting the incentive amount
of Rs.11.68 Crores and considering the entire amount of interest earned
on fixed deposits and the miscellaneous income, the Commission
decides to allow an amount of Rs.155.53 Crores as other income for
FY16 as detailed below:
TABLE – 4.40
Allowable Other Income for FY16
lxxvii
Particulars FY16
Rent 3.56
Miscellaneous 35.94
Rebate at 0.5% for collection of Electricity Duty 3.04
Interest on Bank Deposits 8.28
90% of the incentives received on prompt payment of
power purchase bills 105.10
Profit/Loss on sale of stores (0.71)
Others 0.32
Total other income 155.53
4.2.14 Fund towards Consumer Relations / Consumer Education:

The Commission has been allowing an amount of Rs.1.00 Crore per year
towards consumer relations / consumer education. BESCOM in its application
had not reported any expenditure towards Consumer Relations/ Consumer
Education incurred separately during FY16. The Commission in its
preliminary observations had sought the details of expenditure incurred, if
any.
BESCOM in its replies to the Commission’s preliminary observations has

informed that an amount of Rs.3.83 Crores has been incurred towards
consumer awareness programmes on safety measures, energy conservation
and demand side management initiatives under a separate head of account.
The Commission notes that these expenses have been factored in the
audited accounts under A&G expenses. It is also observed that the majority
of the expenditure reported is of repetitive nature, paid to a few firms for
similar activities. The expenditure reported by BESCOM is inclusive of
expenses towards activities other than those intended in Rs.1.00 Crores
earmarked in the ARR. Hence, considering the overall expenditure reported
by BESCOM, the Commission decides to limit the allowable expenses to
Rs.1.00 Crores in the APR as expenses towards consumer relations /
consumer education for FY16. The balance amount is already considered
while computing the O & M expenses on normative basis as discussed
in the earlier paragraphs of this Chapter.
4.2.15 Carrying cost on Regulatory asset:
BESCOM in its application has claimed an amount of Rs.117.40 Crores as

carrying cost on Regulatory Asset (RA) of Rs.611 Crores of FY13 and
Rs.367.33 Crores of FY14.
lxxviii
The Commission in its Tariff Order dated 12th May, 2014 had set aside an
amount of Rs. 611 Crores as Regulatory Asset to be recovered equally in
FY16 and FY17. The Commission had also decided to allow carrying cost at
12% per annum on the amount of RA, to be assessed at the time of APR of
FY16 and FY17. It is to be noted that the Commission, in its Tariff Order
dated 2nd March, 2015 has already factored an amount of Rs.305.50 Crores
of Regulatory Asset (being 50% of the total RA of Rs.611 Crores) in the
revised ARR of FY16 which was allowed to be recovered through the retail
supply tariff determined for FY16. The Commission in its Tariff Order date
30th March, 2016 while approving the APR for FY15 has not allowed carrying
cost on the RA of Rs.611 Crores as the revenue earned was adequate to
meet the expenditure incurred during FY15, that is the Regulatory Asset
which was estimated earlier, did not materialize as the Revenue (in FY15)
was adequate to meet the expenses. However, in the computation for APR
of FY16 being taken up now, it is noted that the revenue earned during FY16
is insufficient to meet the expenditure and hence, the Commission decides to
allow the carrying cost of Rs.36.66 Crores computed at 12% p.a on the 50%
of the RA amount of Rs.305.50 Crores for FY16.
As regards the claims of carrying cost on the deficit amount of Rs.367.33

Crores on account of APR for FY14, it is to be noted that as per the
Commission’s Tariff Order dated 2nd March, 2015, this deficit has already
been included in the revised ARR for FY16 and allowed to be recovered in
the retail supply tariff for FY16, without treating the deficit as Regulatory
Asset. The Commission has been conducting the APR annually based on
Audited Accounts, which are compiled and audited during the following
financial year. Hence the financial status (either surplus or deficit) is known
only after the accounts are audited and certified. Any surplus/deficit in
revenue, found in the audited accounts is factored in the ARR for the year for
which revision of retail supply tariff is due. Hence, the question of allowing
carrying cost on the deficit of Rs.367.33 Crores reckoned in the APR for 14,
in the present APR for FY16 does not arise, as the said deficit is already
included in the retail supply tariff of FY16.
It is to be further noted that the RA of Rs.611 Crores has already been

included in the Tariff Order dated 30th March, 2016, (Para-5.3- Treatment of
Regulatory Asset & Carrying cost). After considering the revenue deficit of
lxxix
FY14 and deficit in ARR of FY16, an amount of Rs. 541.97 Crores being the
net amount of Regulatory Asset, has been included in the ARR of FY17 for
tariff computations for FY17 and thus there is no RA to be carried forward
after FY17.
4.2.16 Revenue Demand for FY16:
BESCOM in its application has considered Rs.13821.62 Crores as the

revenue from sale of power and miscellaneous charges as against the
revenue of Rs. 14148.23 Crore indicated in the audited accounts for
FY16. It is observed that, BESCOM while computing the revenue has not
considered an amount of Rs.326.62 Crore being the interest levied on
belated payment of electricity bill from IP Set, Water Supply and Street
Light installations. The reason stated by BESCOM is that, as the
Government is releasing the subsidy amount on quarterly basis in
advance, no interest is to be captured for IP sets demand. Further,
BESCOM has stated that as the Govt. has paid the water supply and
street light installations energy bills issued for the consumption during
FY16, the interests charged on these installations towards the arrears
pertaining to the previous year’s cannot be factored as revenue
demand.
The Commission, as per the audited accounts of BESCOM for FY16, has
considered the total amount of revenue from sale of power and
miscellaneous charges of Rs.14148.23 Crore. The Commission notes that
an amount of Rs.326.62 Crore towards interest levied on belated
payment of electricity bill amount from IP set, water supply and street
light installations during FY16 has been included as revenue in the
audited accounts for FY16. Therefore, the Commission is unable to
accept the contentions of BESCOM to exclude the same while
computing the revenue for APR. The Commission notes that any
amount of revenue and miscellaneous charges raised and accounted
in the consumers’ accounts and included in the audited accounts of
the BESCOM, has to be recognized as revenue to meet the approved
ARR for FY16.
lxxx
As discussed in the preceding section of this Chapter, the IP set
consumption is reduced from 6189.80MU to 5777.77 MU, a reduction of
412.03 MU. Hence, the revenue from sales to IP Set consumers is Rs.
1487.20 Crores instead of Rs. 1585.26 Crores reported as per the
audited accounts.
In view of the above, the total revenue considered for APR is Rs.
14050.17 Crores as against Rs.13821.62 Crores claimed by BESCOM for
FY16.
4.2.17 Subsidy for FY16:

The Commission in its tariff order dated 2nd March, 2016 has approved
tariff subsidy of Rs. 1371.60 Crores towards sale of power to BJ/KJ and IP
sets for FY 16 in accordance with the prevailing Government Order.
The Commission in computation of APR for FY16 has approved the
revised tariff subsidy of Rs.1518.01Crores towards sale of power to BJ/KJ
and IP sets for FY 16
4.3 Abstract of Approved ARR for FY16:
As per the above item-wise decisions of the Commission, the

consolidated Statement of ARR for FY16 is as follows:
TABLE – 4.41
Approved ARR for FY16 as per APR
Amount in Rs.
Crores
APR FY16
Sl.
Particulars As
No As Filed As per APR
Approved
1 Energy at Gen Bus 30419.09 29161.67 29161.67
2 Energy at Interface in MU 29263.16 27893.50 27893.40
3 Distribution Losses in % 13.40% 12.03% 13.51%
4 Sales in MU
5 Sales to other than IP & BJ/KJ 19658.00 18290.92 18290.92

6 Sales to BJ/KJ 58.64 57.45 57.45
7 Sales to IP 5625.26 6189.80 5777.77
8 Total Sales 25341.90 24538.17 24126.14
Revenue in Rs Crs
8 Revenue from tariff and Misc. Charges 12802.71 12205.55 12532.16

9 Tariff Subsidy to BJ/KJ 32.78 30.81 30.81
10 Tariff Subsidy to IP Sets 1338.82 1585.26 1487.20
lxxxi
11 Total Revenue 14174.31 13821.62 14050.17
Expenditure in Rs Crs
12 Power Purchase Cost 10608.94 11364.09 11364.57

13 Transmission charges of KPTCL 1216.91 1225.91 1225.91
14 SLDC Charges 14.29 10.53 10.53
15 transmission 11840.14 12600.53 12601.01
18 Admin & General Expenses 223.21
19 Total O&M Expenses 1205.01 1219.34 1210.06
20 Depreciation 167.31 290.60 290.60
21 Interest on Loans 261.59 266.02 266.03

22 Interest on Working capital 287.77 342.45 295.32
23 Interest on belated payment on PP Cost 0.00 0.00 0.00
24 Interest on consumer deposits 244.89 245.24 245.24
25 Other Interest & Finance charges 7.63 23.53 23.52
26 Less interest & other expenses capitalised 50.00 146.85 146.85
27 Total Interest & Finance charges 751.88 730.39 683.26
28 Other Debits 0.00 16.25 16.26
29 Net Prior Period Debit/Credit 0.00 -11.57 11.57
30 RoE 0.00 108.00 23.19
31 Provision for taxation 0.00 24.51 24.51
Funds towards Consumer Relations/Consumer
Education
32 1.00 0.00 1.00
33 Other Income 219.44 40.35 155.53
34 ARR 13745.90 14937.70 14705.92
35 Deficit for FY14 carried forward 367.33 0.00
Penalty for increase in distribution losses and
disallowance of imprudent capex as KERC
Order dated 14.01.2016 in Case No 12/2013
36 7.96
Incentives / penalties for performance on
distribution losses
37 190.92 0.00
38 Net ARR 14105.27 15128.62 14705.92
Carrying Cost on RA of Rs.305.50 Crs. at 12%
Regulatory asset to be recovered in FY16 &
39 FY17 611.00 117.40 36.66
40 Net ARR for FY16 14716.27 15246.02 14742.58
41 Net Regulatory asset to be recovered in FY17 541.96 - -
42 Net ARR after Regulatory Asset 14174.31 15246.02 14742.58
43 Gap in Revenue for FY16 0.00 1424.40 692.42
4.4 Gap in Revenue for FY16:
lxxxii
As against an approved ARR of Rs.14174.31 Crores, the Commission
after the Annual Performance Review of BESCOM for FY16 decides to
allow a net ARR of Rs.14742.58 Crores for FY16. Considering the revenue
of Rs.14050.17 Crores, the deficit of Rs.692.42 Crores is determined for
the year FY16.
The Commission decides to carry forward the deficit of Rs.692.42 Crores

of FY16 to the proposed ARR for FY18 as discussed in the subsequent
Chapter of this Order.
lxxxiii
CHAPTER – 5
REVISED ANNUAL REVENUE REQUIREMENT FOR FY18

5.0 Revised Annual Revenue Requirement (ARR) for FY18
BESCOM’s Application:
BESCOM in its application dated 30th November, 2016, has sought

approval of the Commission for the revised ARR for FY18. The summary
of the proposed revised ARR for FY18 is as follows:
TABLE – 5.1
Revised ARR for FY18-BESCOM’s Submission

Sl.
Particulars FY18
No.
1 Energy at Gen Bus in MU 31270.90
2 Transmission Losses in % 3.37%
3 Energy at Interface in MU 30217.10
4 Distribution Losses in % 12.75%
Sales in MU
5 Sales to other than IP & BJ/KJ 19457.73
6 Sales to BJ/KJ 68.87
7 Sales to IP 6837.80
8 Total Sales 26364.40
Revenue at existing tariff in Rs Crs
9 Revenue from Tariff and Misc. Charges 13016.45
10 Tariff Subsidy from BJ/KJ 41.04
11 Tariff Subsidy from IP 1955.61
12 Total Existing Revenue 15013.10
16 transmission 13884.89
20 Total O&M Expenses 1491.59
22 Interest & Finance charges
23 Interest on Capital Loans 351.43
25 Interest on belated payment on PP Cost 0.00
lxxxiv
28 Less interest & other expenses capitalised 82.00
29 Total Interest & Finance charges 951.47
31 Net Prior Period Debit/Credit 0.00
Funds towards Consumer
33 Relations/Consumer Education 1.00
Provision for contribution to Pension &
34 Gratuity Trust (Government Liability) 729.37
ARR 17491.57
Deficit for the year (2478.47)
36 Deficit for FY16 carried forward (1424.40)
Net ARR 18915.97
The BESCOM has requested the Commission to approve the revised

Annual Revenue Requirement of Rs.18915.97 Crores for FY18.
Considering the estimated revenue of Rs. 15013.10 Crores based on
the existing retail supply tariff, BESCOM has projected a revenue gap
of Rs. 3902.87 Crores for FY18 including the carried forward gap of
revenue of Rs.1424.40 Crores of FY16. In order to bridge this gap in
revenue, BESCOM, in its application has proposed increase in retail
supply tariff by 148 paise per unit in respect of all the categories of
consumers including BJ/KJ and IP set consumers for FY18.
Subsequently, BESCOM in its petition dated 16th February, 2017 has filed
amendments to its tariff proposals without affecting the ARR for FY18.
The same has been dealt with in Chapetr-6 of this Order.
5.1 Annual Performance Review for FY16:
As discussed in the preceding chapter of this Order, the Commission

has carried out the Annual Performance Review for FY16 based on the
audited accounts furnished by BESCOM. Accordingly, a deficit of
Rs.692.42 Crores of FY16 is carried forward into the ARR of FY18.
lxxxv
5.2 Revised Annual Revenue Requirement for FY18:
The item-wise expenditure proposed by BESCOM and approved by the
Commission for FY18 is discussed in this Chapter as follows:
5.2.1 Capital Investments for FY18:

BESCOM’s submission:
BESCOM has projected a capital expenditure of Rs.967.30 Crores
without deviating from its earlier MYT proposal submitted for FY18. The
category wise capital investment plan proposed by BESCOM is as
under:
Table -5.2
Capital Investment for FY18 - BESCOM’s Submission
Sl.
Particulars FY 18
No
1 11 KV Evacuation & Link Lines 72.05
Safety and Strengthening of HT/LT
2 network including OH/UG cable and AB 38.33
cable works
3 HT Reconductoring 29.60
4 LT Reconductoring 29.63
Providing Additional DTC's/Enhancement
5 48.83
of DTC's
Planned works (RE / SCP / TSP/Drinking
6 Water Ganga Kalyana and service 47.21
connection)
7 Local Planning 36.01
8 RMU Works 4.232
Safety Measures/ Hazardous (shifting DTC
9 12.74
at school premises)
10 OH to UG Conversion 2.10
11 Infrastructure to Unauthorized IP sets 5.19
12 Providing & replacement of RMUs 0.59
Replacement of meters, Smart meters,
13 23.77
replacement of HTMC of HT installation
14 DTC Metering programme 2.00
15 IPDS 100.00
16 DDUGJY 100.00
17 HVDS 100.00
18 NJY Phase-3 250.00
19 DSM 64.97
Total 967.30
lxxxvi
In its MYT application for the 4th control period, the BESCOM had stated
that, the capex of Rs.967.30 proposed for FY18 would undergo revision
in view of possible additions depending on the requirement. Further,
BESCOM had requested for additional capex of Rs.3251.48 Crores in
the middle of FY17. Against this proposal, the Commission had
permitted the BESCOM to invest a total capex upto Rs.2000 crores for
FY17. BESCOM has not furnished the status of capital expenditure for
FY17, while seeking capex of Rs.967.30 Crores for FY18. This indicates
that, BESCOM has not put in any effort to plan the capital investment in
line with the “Capital Expenditure Guidelines for ESCOMs” issued by the
Commission. This would lead to BESCOM spending on capex in an
unplanned manner in each financial year.
The Commission has observed that, the capital expenditure by

BESCOM is exceeding the approved amount by a huge margin
consistently over the last four years. However, BESCOM has not made
any effort to streamline and plan its capex to ensure that, it does not
exceed the planned capex. Therefore, BESCOM needs to plan and
project its capex commensurate with:
a) The network strengthening and expansion required

/requirement,
b) Improvement of power supply reliability,
c) The target date for completion of each of the project,
d) loss reduction trajectory.
Further, BESCOM should strictly follow the “Capital Expenditure

Guidelines for ESCOMs” in which the capital investment planning
process and prioritization and post-commissioning analysis to be
adopted by the ESCOMs are elaborated. The Commission has been
directing the ESCOMs to conduct energy audit by listing out high loss
making 11kV feeders and take up strengthening works to reduce
losses. Prioritization of such projects has to be taken up for execution,
lxxxvii
based on payback period and benefit to cost ratio. BESCOM has
failed to establish that it has moved in this direction.
BESCOM should prepare a realistic plan of its capex program based on

the load forecast and network expansion plan as per the “Capital
Expenditure Guidelines for ESCOMs” issued by the Commission, duly
prioritizing the works. It is not desirable to approach the Commission in
the middle of the year seeking additional/higher capex. Any
additional capex required shall be met only through re-appropriation
of approved amounts for the prioritized category within the overall
capex.
With the above observations, the Commission decides to consider the

capex of Rs.967.30 Crores as proposed by BESCOM for FY18.
5.2.2 Sales Forecast for FY18:
A. Sales & No. of Installations other than BJ/KJ and IP sets:
1. The BESCOM in its Tariff application has stated that the number of
installations for FY18 has been estimated by doubling the half year
number of consumers for FY17 and considering one year CAGR with
the following deviations:
I. For LT4(a))-IP sets, 20,000 additions in installations is considered

for FY18; and
II. Wherever the CAGR is negative or exorbitant, FY17 numbers are
retained.
2. Further, the BESCOM has stated that, the sales for FY18 have been
estimated considering the following:
a) The sales for FY17 is estimated considering a certain

percentage over sales in first half of the year;
b) IP set sales is estimated considering specific consumption of
8037/IP/annum;
lxxxviii
c) BJ/KJ sales for FY17 is not doubled as, a part of sales is
considered under LT2a.
B. The Commission’s observations on sales forecast for FY18 and the

replies furnished by BESCOM thereon are as follows:
i) LT (1) – BJ/KJ category:
a. It was observed that, BESCOM has retained the BJ/KJ sales at

the half-year level of 66.35 MU for FY17, in spite of indicating
additions in the number of installations during second half of
FY17. The BESCOM shall explain the reasons for the same.
The BESCOM in its replies has stated that it has envisaged

addition of 60345 installations under RGGVY during XII plan,
which is added to LT-1 category resulting in the increase in the
number of installations, while for the estimation of energy sales
any installation consuming more than 18 units/month is
considered under LT-2a category.
BESCOM earlier had not clearly indicated as to how many

installations would consume more than 18 units /month, against
the envisaged addition of 60345 numbers. Subsequently, in its
replies dated 16.01.2017, BESCOM has furnished the breakup of
number of installations under BJ/KJ consuming upto 18
units/month/installation and those consuming above 18
units/installation/month. Since the number of installations as on
30.11.2016 was greater than the year-end break-up figures
furnished by BESCOM, the Commission has retained the number
of installations as on 30.11.2016 for FY17 and has worked out the
sales to this category based on specific consumption of FY16.
For FY18, the break-up of number of installations is considered as
submitted by BESCOM in its replies dated 16.01.2017. Further,
considering the recent announcement of the State Government
in the Budget for FY17-18 to increase the consumption cap for
BJ/KJ installations to 40 units /installation /month, suitable
lxxxix
addition has been made to the estimated consumption under
this category.
b. The BESCOM was directed to furnish the breakup of installations

consuming less than or equal to 18 units and also above 18 units
for the 2015-16 and estimates for FY17 to FY18. BESCOM has
furnished the above details in its replies dated 16.01.2017.
ii) In the case of LT2(b), LT 4(c), HT-2a, HT 2(b), HT3(a) and HT4, it
was pointed out that, the number of installations as on
30.09.2016 compared to 31.03.2016 has reduced [Ref page 71
of the filing]. Therefore, BESCOM was directed to explain the
reasons for such reduction, especially in the case of HT
installations, during the first half of FY17, as to whether some of
the installations have been surrendered. BESCOM was directed
to furnish the category-wise opening balance of number of
installations as on 31.03.2016, installations added during the FY17
as on 30.11.2016 and installations surrendered during FY17/as on
30.11.2016.
The BESCOM, while furnishing the sub-division-wise details of HT

installations, from March-2016 to November-2016, has stated
that, BESCOM has noticed a reduction in the number of HT-
installations.
The Commission observes that the details of installations, as on

31.03.2016, the addition to the installations during the FY17 as on
30.11.2016 and the installations surrendered during the FY17 as
sought by the Commission is not furnished.
The BESCOM was informed that considering one-year growth

rate for estimation would not reflect the underlying trend.
Therefore, the BESCOM was advised to reconsider adopting
CAGR, based on three to five years’ data, for estimating the
number of installations and sales. Further, it was noted that the
growth rates considered for estimating the number of
xc
installations for all the categories, except LT-6 water supply, is
lower as compared to the normal growth rates. For categories
where there is a positive growth rate, the BESCOM has
considered zero growth and hence the BESCOM was directed
to furnish reasons for the same.
It is stated by the BESCOM that, as the projected year is very

close, one-year CAGR is considered and that a negative growth
rate is replaced by zero growth rate. Further, it is stated that the
CAGR is a useful measure over multiple time period and not for
one year.
The Commission reiterates that adoption of one-year growth

rate for estimation of the number of installations and sales would
not reflect the underlying trend. The approach of the
Commission in estimating the number of installations and sales
for the FY18 is discussed in the subsequent paragraphs.
C. The observations of the Commission on growth rates considered

for FY18 and replies furnished by BESCOM are as follows:
i) The growth rate considered for LT2 (b) is lower considering

the previous year’s growth rate of 4.34% and the CAGR
being in the range of 7.33% to 8.24%. The BESCOM shall
furnish the reasons for the same. The BESCOM has stated
that the LT-2b sales is only 0.26% of total LT-sales.
The Commission reiterates its observations and its approach

is discussed in the subsequent paragraphs, as under
ii) The BESCOM shall analyze and furnish the reasons for
negative growth in the FY16 in respect of LT-6 Water Supply
(WS), LT-6 Street Light (SL), HT-2a, HT-2b and HT-4 categories.
The BESCOM has informed that the negative growth rate in

HT-2a and HT-2b is due to the consumers going in for open
xci
access and the reasons for the negative growth in other
categories are being looked into.
The Commission, taking note of the replies, is of the view that

such an analysis to find out the reasons for the negative
growth would help the BESCOM to evolve better sales
strategies.
iii) The reasons for abnormal growth in the FY16, in the case of
HT-3 category, shall be furnished. The BESCOM has replied
that the same is being looked into.
To validate the sales, the Commission had requested,

category-wise information (No. of Installations and the sales
in MU), in a prescribed format. The BESCOM has furnished the
above information.
3. The Commission’s approach for estimating the number of

installations and energy sales for the Financial Year FY18:
The methodology adopted by the Commission to estimate the

number of installations and sales to categories other than BJ/KJ and
IP sets is discussed as below:
i) No. of Installations:
While estimating the number of installations (excluding BJ/KJ

and IP), the following approach is adopted:
a. The base year number of installations for the FY17 is modified

duly validating the revised estimate furnished by the
BESCOM in the current filing and the data available, as on
30.11.2016. The Commission has validated both the number
of installations and energy sales to various category of
consumers, considering the actuals as on as on 30.11.2016,
and has estimated the number of installations and energy
sales for the remaining period, reasonably, keeping in view
the number of installations and energy sales as on 31.03.2016
xcii
as well. Accordingly, the base year estimation has been
revised, which has an impact on the estimates on number of
installations and sales for FY18.
b. Wherever the number of installations estimated by the

BESCOM for the FY18 is within the range of the estimates
based on the CAGR for the period FY11 – FY16 and for the
period FY13 - FY16, the BESCOM’s estimates are retained.
c. Wherever the number of installations estimated by the

BESCOM for the FY18 is lower than the estimates based on
the CAGRs for the period FY11 – FY16 and for the period
FY13 - FY16, the estimates based on the lower of the CAGRs
are considered.
d. Wherever the number of installations estimated by the

BESCOM for the FY18 is higher than the estimates based on
the CAGRs for the period FY11 – FY16 and for the period
FY13 - FY16, the estimates based on the higher of the CAGRs
are considered.
e. For LT4 (b), the number of installations are worked out on the
basis of five year CAGR, as the number proposed by the
BESCOM is far below the actual figures for FY-16.
f. For LT4(c), LT-7, HT-2(c) and HT-5 categories, the estimates of

the BESCOM are retained, as the growth rate for these
categories is not consistent.
Based on the above approach, the total number of installations

(excluding BJ/KJ and IP) estimated and approved by the
Commission for FY18 is 9611811 as against 9541400 proposed by
the BESCOM.
ii) Energy Sales:
xciii
A. For categories other than BJ/KJ and IP sets, generally the sales
are being estimated based on the following approach:
a. The base year sales for FY17 as estimated by BESCOM are

validated duly considering the actual sales up to
November, 2016 and modified suitably as stated earlier.
b. Wherever the sales estimated by the BESCOM for the FY18

is within the range of the estimates based on the CAGRs for
the period FY11 – FY16 and for the period FY13 - FY16, the
estimates of BESCOM are retained.
c. Wherever the sales estimated by the BESCOM for the FY18

is lower than the estimates based on the CAGRs for the
period FY11 – FY16 and for the period FY13- FY16, the
estimates based on the lower of the CAGRs are
considered.
d. Wherever sales estimated by the BESCOM for FY18 is higher

than the estimates based on the CAGRs for the period
FY11 – FY16 and for the period FY13 - FY16, the estimates
based on the higher of the CAGRs are considered.
e. For LT4(b) and LT -6 public lighting, the sales are worked out
based on the specific consumption of FY16.
f. For LT4(c), LT-7, HT-2(c) and HT-5 categories, BESCOM’s

estimates are retained, as the growth rate for these
categories is not consistent.
g. In respect of HT2(a) category, the sales estimate based on

the analysis of open access impact is considered. It may
be noted that based on the methodology indicated at
paras b, c and d above, the sales growth would be
negative, in spite of positive growth in the number of
installations. Further, it is observed that the sales for FY17
has been underestimated by the BESCOM, which has an
xciv
impact on the estimates made by the BESCOM for FY18.
Therefore, the sales estimate based on the analysis of open
access impact is considered as reasonable for FY18.
h. For HT2(b) category, the sales estimate based on the

CAGR for the period FY11 to FY16 is considered. It may be
noted that based on the methodology specified at paras
b, c and d above, the sales growth would be negative, in
spite of positive growth in the number of installations.
Further, based on the OA transaction impact analysis, the
sales growth would be high if the recent trends are kept in
view. Therefore, CAGR for the period FY11 to FY16 is
considered as reasonable.
i. In respect of HT-3 category sales, the BESCOM’s estimate

for FY18 is not reasonable as the BESCOM’s estimate of
10.46 MU is far below the consumption of 53.01 MU for FY16,
despite increase in the number of installations. Therefore,
the Commission has estimated the sales based on the
specific consumption of FY16.
Based on the above approach, the sales (excluding BJ/KJ and

IP) estimated and approved by the Commission for FY18 is
19820.85 MU as against 19383.97 MU proposed by the BESCOM.
B. Sales to BJ/KJ and IP sets:

a) Sales to BJ/KJ installations:
The electricity consumption to this category up to 18 units per

installation per month hitherto was being subsidized by the
Government of Karnataka and any installation under this
category consuming more than 18 units per month was billed
under relevant LT 2(a) category. However, the Government of
Karnataka in its Budget for 2017-18 has announced that it would
extend the subsidy to BJ/KJ installations consuming upto 40 units
per installation per month. Hence, the Commission has
xcv
reckoned the above and has worked out the subsidy
accordingly.
Considering the specific consumption and the number of

installations, for FY16, for installations consuming upto 18 units
and above 18 units as per the actual data furnished by
BESCOM, the total sales estimated for this category for FY18
works out to 130.37 MU. Considering the total number of BJ/KJ
installations of 785408 for FY18 as proposed by BESCOM, the
specific consumption works out to 13.83 units per installation per
month which is less than 40 units per installation per month
announced by the Government for the purpose of subsidy.
Thus, the entire consumption of 130.37 MU is considered for the
purpose of estimating the subsidy for this category. However,
the BESCOM while claiming the subsidy shall consider only such
installations which consume up to 40 units per installation per
month and any installation under this category consuming more
than 40 units shall be billed under the relevant LT 2(a) category.
b) IP set sales projections for ARR of FY18

The Commission, in its Tariff Order dated 30th March, 2016, had
approved specific consumption of IP sets as 8,037 units /
installation / annum for the control period FY17 to FY19.
However, based on the actual data of sales to IP sets as
reported by the BESCOM in its Tariff application, the Commission
had approved the specific consumption as 7,795
units/installation/annum, for the FY16.
Further, the IP sales reported as per Format D-2 is 6,189.80 MU as

against the approved sales of 5,625.26 MU, for FY16, that is an
increase of 564.54 MU. However, the BESCOM in its subsequent
communication dated 30th January, 2017, to the Commission
has submitted the revised sales of IP sets, based on the specific
consumption arrived at from the meter readings of segregated
agricultural feeders, as 5,777.77 MU, for FY16. This indicates an
increase in sales to an extent of 152.51 MU which can be partly
xcvi
attributed to servicing of a large number of IP sets under
Regularization Scheme. It is noted that the BESCOM has already
segregated substantial number of feeders under NJY as
exclusive agricultural feeders and rural feeders, which means
that power supply to IP sets could be regulated resulting in
reduction in the agricultural consumption during the FY16.
The specific consumption works out to 7,324

units/installation/annum on the basis of the revised sales
quantum of 5,777.77 MU reported by the BESCOM for FY16. It is
observed that the specific consumption of 7,324
units/installation/annum for FY16 is less than the approved
specific consumption of 7,795 units / installation /annum by 471
units /installation/annum. Hence, it is appropriate to consider
the specific consumption of 7,324 units/installation/annum for
the ARR of FY18 also, considering the fact that this specific
consumption is arrived at on the basis of metered consumption
in respect of agricultural feeders segregated under NJY. In view
of this, the Commission decides to approve the specific
consumption of 7,324 units/installation /annum for the ARR of
FY18.
Further, it is noted that the BESCOM has estimated the number

of IP-set installations as 8,50,790, as against the estimated
number of installations of 8,40,790 for FY17 i.e. an increase of
20,000, for the FY18 in the current Tariff filing. In view of this, the
Commission has considered the number of IP-sets as submitted
by the BESCOM for the FY18 without any modifications. Hence,
based on the estimated number of installations for the FY17 and
the FY18 as reported by the BESCOM, the mid-year number of
installations is determined and the sales to IP-set consumers are
indicated as below:
TABLE-5.3
Mid-Year No. of IP set Installations & IP set Consumption
xcvii
As approved
As filed by the
by the
Particulars BESCOM
Commission
FY17 FY18 FY18
No of installations 8,30,790 8,50,790 8,50,790
Mid-Year no. of
8,40,790 8,40,790
installations
Specific consumption in
8,133 7,324
units/installation/annum
Sales in MU 6,837.80 6,157.95
Accordingly, the Commission approves 6,157.95 MU as energy

sales to IP-sets as against the BESCOM’s projections of 6,837.80
MU, for the FY18. The number of installations approved for FY18 is
8,50,790. This approved IP set consumption for FY18 is with the
assumption that the Government of Karnataka would release full
subsidy to cover the approved quantum of IP-sales. However, if
there is any reduction in the subsidy allocation by the GoK, the
quantum of sales to IP sets of 10 HP and below, shall be
proportionately regulated.
During the course of Public hearing held by the Commission,

the representatives of certain Farmers’ Association have
suggested that the Government may consider paying the
subsidy directly to the farmers against their IP Set consumption.
They have also expressed that meters could be installed to their
IP Sets, by the ESCOMs to whom energy charges would be paid
by the farmers.
The Commission is of the view that implementing the suggestion

of direct remittance of subsidy to the farmers would encourage
metering of the IP Sets enabling proper accounting of energy
and also facilitate accurate computation of losses in the
distribution system. The Commission notes that the Government
of Karnataka would have to formulate suitable policy in the
matter.
xcviii
Further, the Commission notes that the BESCOM was directed to
take up GPS survey of IP sets in order to identify the
defunct/dried up/not-in-use installations in the field and to take
necessary action to arrive at the correct number of IP sets by
deducting such IP sets from its account, on the basis of GPS
survey report. The BESCOM has reported that it has completed
GPS survey of 60 per cent of the feeders and has identified
around 1.53 lakhs installations as not-in-use and around 1.23
lakhs as unauthorized installations during the survey undertaken
in FY13. As considerable time has lapsed after such partial
survey, the BESCOM has sought time up to April 2017 to
revalidate the same and also to complete the survey of
remaining installations, to enable it to arrive at correct number
of dried up/defunct/not-in-use wells, so as to take further action
to deduct such IP-set installations, from its accounts.
In this regard, the BESCOM is directed to complete the GPS

survey of IP-sets within the targeted time as requested by it and
submit compliance thereon to the Commission. In view of
pendency of the GPS survey of IP-sets, the number of
installations estimated for FY17 as well as for FY18 are subject to
change based on the full GPS survey. As mentioned above, the
Commission, in the absence of survey reports, has considered
the estimated number of installations for FY17 and FY18 as
reported by the BESCOM for the present. However, on
completion of the GPS survey, the BESCOM shall arrive at the
correct number of IP-sets existing in the field duly deducting
from its account the number of dried up/defunct/not-in-use
wells based on the GPS survey results. Therefore, any variation in
sales due to change in number of installations in the FY18 would
be trued up during the Annual Performance Review, for the FY18.
Further, it is noted that the BESCOM has already segregated 704

agriculture feeders from rural loads under NJY phase1, 2 & 3 and
xcix
segregation work of remaining feeders’ under phase 3, is in
progress. After complete segregation, the energy consumed by
the IP-sets could be more accurately measured at the 11 KV
feeder level at the sub-stations after allowing for distribution
system losses in 11 KV lines, distribution transformers and LT lines.
Hence, the Commission reiterates its direction that the BESCOM

shall report to the Commission, the overall IP-set consumption on
the basis of the specific consumption arrived at from the
consumption data of energy meters in respect of agriculture
feeders segregated under NJY only, every month, regularly, as
per the following format:
c
TABLE-5.4
Format for furnishing IP sets Consumption
Average consumption
the subdivision (as per

Distribution loss(11kV line, DTCs,& LT line)
Distribution loss (11kV line, DTCs &LT line)
Total sales of IP sets in

MU ( losses in all the agricultural feeders
(specific cons in units
sets(total-dried up) in
dried up) connected
feeders at the substations pertaining to
Plus sales to other consumers if any, in
No. of IP sets (total-

MU as recorded in all the agricultural
Net consumption duly deducting the
to the agricultural
of IP sets/ month
feeders in the
Total no of IP
subdivision
/IP/month)
Feeders in the subdivision
Monthly Consumption in
Segregated Agricultural
& any other loads if any
DCB)
only to be considered)
MU
the sub-division
Sub-division
Name of
Month
No. of
during Month
during Month
Beginning of
Beginning of
Mid-Month
Mid-Month
the Month
the Month
Serviced
Serviced
7c 9c
= = 10=8*9
1 2 3 4 5 6=(4-5) 7a 7b 8=6/7c 9a 9b
(7a+7b)/ (9a+ c
2 9b)/2
April to Subdivisi
March on-1
Subdivisi
on-2
Subdivisi
on….
Note:
(1) If the agricultural feeders are not yet segregated under NJY in any sub-division, then
the specific consumption of the division / circle / zone / company (where NJY is taken
up) shall be considered to compute the IP consumption of such sub-division.
(2) No. of dried up IP-set installations shall be deducted from the accounts, while arriving
at the month-wise and subdivision-wise specific consumption and total sales.
Based on the above discussions, the category wise approved number

of installations and sales for the year FY 18 vis-à-vis the estimates made
by BESCOM is indicated as follows:
TABLE-5.5
BESCOM’s Approved Sales
FY18 FY18
Number of Installations Energy Sales
Category BESCOM’s BESCOM’s
Approved Approved
estimate estimate
No. No. MU MU
LT-2a 7503214 7531435 6945.64 6966.38
LT-2b 10991 11791 46.96 49.07
LT-3 1020584 1050594 1998.94 2000.85
LT-4 (b) 497 989 2.36 4.60
LT-4 (c) 1461 1461 4.9 4.90
LT-5 195150 204043 1187.24 1187.24
ci
LT-6-WS 74479 73529 448.19 453.97
LT-6-PL 62360 63907 353.24 391.17
LT-7 658436 658436 158.63 158.63
HT-1 218 232 738.04 738.04
HT-2 (a) 6140 6808 4409.04 4663.23
HT-2 (b) 5565 6209 2613.05 2666.85
HT2C 651 651 272.01 272.01
HT-3(a)& (b) 34 43 10.46 72.84
HT-4 256 316 118.91 114.7
HT-5 1364 1364 76.36 76.36
Sub-Total other than BJ/KJ & IP
9541400 9611811 19383.97 19820.85
sets
LT-1 BJ/KJ 785408 785408 142.65 130.37
LT4 (a)IP Sets 850790 850790 6837.8 6157.95
Sub Total BJ/KJ & IP sets 1636198 1636198 6980.45 6288.31
Total 11177598 11248009 26364.42 26109.16
5.2.3 Distribution Losses for FY18:
As per the audited accounts for FY16, the BESCOM has reported
distribution losses of 12.03% as against an approved loss level of 13.40%.
However, as discussed in the previous chapter of this Order, based on
the revised consumption of IP Sets, the distribution losses for FY16 is
13.51%. The Commission in its Tariff Order dated 30th March, 2016 had
fixed the target level of losses for FY18 at 12.75%. BESCOM in its
application has proposed to retain the loss levels of 12.75% for FY18.
Commission’s Analysis and Decisions:
The performance of BESCOM in achieving the loss targets set by the

Commission in the past six years is as follows:
cii
TABLE – 5.6
Approved & Actual Distribution Losses-FY11 to FY16
Figures in % Losses
Particulars FY11 FY12 FY13 FY14 FY15 FY16
Approved Distribution 14.75 14.50 14.00 13.80 13.60 13.40

losses
Actual distribution 14.48 14.46 14.20 13.89 14.78* 13.51*

losses
*Actual losses for FY15 are reported as 13.53%. As per Commission’s APR the losses for FY15 is 14.78% after validation of
sales.
*Actual losses for FY16 are reported as 12.03%. As per Commission’s APR the losses for FY16 is 13.51% after validation of
sales.
BESCOM having declared to have already achieved distribution loss

level of 12.03% in FY16, has projected a higher loss level of 12.75% for
FY18. The distribution loss projections indicated by the BESCOM shows
an increase from the existing reported loss level. The Commission has
allowed the capex as proposed by BESCOM and substantial capital
expenditure is consistently being incurred by the BESCOM in
strengthening its distribution network with the aim to reduce the loss
levels. Investments in improvements of the existing distribution system
would enable the BESCOM to reduce the distribution losses besides
increasing the reliability and quality of power supply to end consumers.
Contrary to the objectives of such investments, the loss levels proposed

by BESCOM are at a higher level as compared to the actual loss levels
declared to have been achieved in FY16. The increased distribution
losses projected by BESCOM for FY18 is not acceptable, because as
reported by it, BESCOM has already achieved distribution losses of
12.03% in FY16 itself. Hence, the Commission, in its preliminary
observations had stressed on the need of further reduction in the
distribution loss levels proposed by the BESCOM, for FY18, duly
considering the past and the present capex. However, the BESCOM
has not proposed any changes to its proposed loss levels.
ciii
Based on the achievements made by BESCOM in the reduction of
distribution loss during the previous years and the revised loss levels for
FY16 besides considering the capex incurred so far along with the
proposed capex for FY18, the Commission decides to fix the following
distribution loss targets for FY18:
TABLE – 5.7
Approved Distribution Losses for FY18
Figures in % Losses
Particulars FY18
Upper limit 13.00
Average 12.50
Lower limit 12.00
5.2.4 Power Purchase for FY18
BESCOM has submitted the power purchase requirement along with its
cost including the transmission charges and SLDC charges, in D-1
Format. BESCOM has sought approval of the Commission for purchase
of power to an extent of 31271MU at a Cost of Rs. 13884.89 Crores for
the FY18, which includes transmission charges and SLDC charges
The cost of power purchase has been considered by the BESCOM as

per the norms defined in the contracts (PPAs)/Regulations and based
on the Tariff indicated by the KPCL, for its Stations. In respect of Central
Generating Stations, DVC Stations and UPCL Stations, the cost is
considered as per the tariff determined by CERC. The details of
source-wise energy and cost is indicated below:
Table-5.8
Power Purchase Cost as filed by BESCOM for FY18
Power Purchase Cost as filed by BESCOM
Source of Power Cost Per
Energy in MU Cost in Rs. Crs Unit in
Rupees
KPCL Hydel Energy 3612.54 381.37 1.06
civ
KPCL Thermal 9262.47 4023.73 4.34
Energy
CGS Energy 9708.70 3451.57 3.56
IPP 3566.26 1512.17 4.24

NCE 4468.63 1927.53 4.31
Other State Hydel 14.74 25.63 17.38
Short Term/Medium 637.66 286.947 4.50
term
KPTCL Transmission 1640.78
charges
PGCIL Charges 633.50
POSOCO Charges 1.66
Total 31271.00 13884.89 4.44

The energy requirement of the ESCOMs, including BESCOM is being
met by Karnataka Power Corporation Limited (KPCL) Generating
Stations, Central Generating Stations (CGS), Major Independent Power
Producers (IPPs) and Minor Independent Power Producers (RE sources)
through long term Power Purchase Agreements.
The Commission has considered the availability of energy as furnished
by KPCL for its generation and by SRPC/CEA in respect of Central
Generating Stations (CGS). The availability of CGS stations is based on
the share of Karnataka, as notified by MoP from time to time. However,
the availability of energy from CGS thermal Generating units has been
considered duly limiting the quantum of energy as per the requirement
of ESCOMs, to meet the sales target on the basis of merit Order
dispatch.
The energy availability for FY18 from the upcoming thermal projects of
750MW unit No. 3 of Bellary Thermal Power Station (BTPS), 2X800 MW
units of Yeramaras Thermal Power Station (YTPS) and 1X800MW of
Kudagi plant of NTPC, has not been considered by the BESCOM, since
these units are under trial Operation and are yet to stabilize. The
Commission has decided to consider the energy availability from these
units in line with the LGBR furnished by the NTPC for the 1X800 MW unit
of Kudagi Power Plant for the FY18. However, the energy has been
considered from these units by limiting the quantum of energy as per
the requirement of ESCOMs, to meet the sales target on the basis of
merit order despatch. It is expected that any surplus energy available
cv
from tied up sources of energy would be traded by the ESCOMs
through PCKL on commercial principles. Similarly, any requirement
over and above the quantum approved in this Tariff Order shall be
procured from the tied up sources only.
While approving the cost of power purchase, the Commission has
determined the quantum of power from various sources in
accordance with the principles of merit order schedule and despatch
based on the ranking of all approved sources of supply, according to
the merit order of the variable cost.
After a detailed analysis of the rates claimed by the BESCOM, the
Commission has arrived at the power purchase cost to be allowed in
the ARR for the FY18.
The fixed charges and the variable charges for the Central Generating
Stations, UPCL Stations and the DVC Stations are reckoned based on
the Tariff determined by the CERC and the CERC norms. The
transmission charges payable to PGCIL are arrived at with 5% annual
escalation on the base figure for FY16.
The fixed charges and the variable charges for the State owned
Thermal and Hydel Power Stations are based on the tariff approved by
the Commission and the norms in the PPAs wherever the tariff is
regulated as per the PPAs. In respect of upcoming new stations only
variable charge has been considered.
The variable costs of thermal stations and UPCL are considered based
on the recent power purchase bills passed by the BESCOM duly
keeping in view the substantial increase in the fuel costs. This is subject
to adjustment in the FAC exercise/Annual Performance Review of FY18.
The ESCOM-wise share of the quantum of power from different sources
of generation is as per the allocation given by the Government of
Karnataka.
The Source-wise approved power purchase quantum for the State (of
all ESCOMs) and its cost are as under:
TABLE-5.9
Approved Power Purchase Quantum & Cost- For the State
Power Purchase
Source of Power Energy Amount in Cost/Unit in
(MU) Rs. Crores Rupees.
cvi
KPCL Thermal Energy 16071.68 6963.89 4.33
CGS Energy 20542.91 7283.67 3.55
IPP 6712.00 3288.88 4.90
KPCL Hydel Energy 11668.46 926.33 0.79
OTHER HYDRO 119.37 49.54 4.15
NCE 7165.41 2980.86 4.16
NTPC Bundled power 582.21 258.46 4.44
Power purchase from Co gen 1300.00 451.10 3.47
Short term Power Purchase 1120.00 467.04 4.17
Short term Purchase from MSEDCL 294.00 106.43 3.62
TRANSMISSION CHARGES
PGCIL CHARGES 1066.00
KPTCL CHARGES 2753.70
SLDC 24.77
POSOCO CHARGES 3.48
TOTAL INCLUDING TRANSMISSION
& SLDC CHARGES 65576.04 26624.15 4.06
The Source wise approved Power Purchase quantum and cost of

BESCOM is as under:
TABLE-5.10
Approved Power Purchase Cost of BESCOM for FY18
Power Purchase Cost as filed Power Purchase Cost as
by BESCOM approved by the Commission
Source of Power Per Unit Per Unit
Energy in Cost in Rs Energy in Cost in
Cost in Cost in
MU Cr MU Rs Cr
RS RS
KPCL Hydel Energy 3612.54 381.37 1.06 2833.31 316.57 1.12
KPCL Thermal 9262.47 4023.73 4.34 9180.34 3980.56 4.34
Energy
CGS Energy 9708.70 3451.57 3.56 9698.31 3438.63 3.55
UPCL 3566.26 1512.17 4.24 3855.76 1889.32 4.9
Renewable Energy 4468.63 1927.53 4.31 3933.88 1594.87 4.05
Other State Hydel 14.74 25.63 17.38 56.36 23.39 4.15
Short Term/Medium 637.66 286.947 4.50 1321.73 499.95
term
PGCIL Charges 633.49 520.23
KPTCL Charges 1640.78 1347.80
SLDC & POSOCO 1.66 12.99
Charges
Total 31271.00 13884.89 4.44 30879.69 13624.31 4.41
The details of station-wise / Source-wise power purchased quantum &

cost for the State and BESCOM are shown in Annexure-I & Annexure-II
respectively.
5.2.5 RPO target for FY18:
cvii
1. The Commission had directed the BESCOM to submit the estimates
for complying with solar and non-solar RPO for 2017-18, including
cost implication for purchasing RECs, if any.
The BESCOM in its replies has stated that as per the data furnished
in D1-Format, it would be able to meet the RPO target for FY18.
2. Further, the Commission had directed BESCOM to furnish certain

details, with respect to the renewable energy purchase estimates
made for the FY18. The BESCOM in its replies has furnished the
following details:
TABLE-5.11
Anticipated Capacity Addition of RE Sources in FY18
Source Capacity Anticipated capacity Anticipated

under PPA addition under PPA capacity addition
in MW as on during the remaining under PPA during
30.11.2016 period of FY17 in MW FY18 in MW
Wind 1120.75 78 27.79
Mini-hydel 158.65 0 0
Co-generation 0 0 0
Biomass 59.50 0 0
Waste to Energy 156.00 0 0
Solar 0 0 638.70
3. The contribution of Solar Power should be computed duly

considering the present status of the Solar projects for which the
BESCOM has entered into PPA. Hence, the Commission had
requested BESCOM to furnish certain data on solar power projects.
The BESCOM has furnished the details as under:
cviii
TABLE-5.12
Anticipated Energy from RE Sources in FY18
Estimated Energy Estimated Energy

Capacity contribution and contribution and
Type of Solar Plant in cost for FY17 cost for FY18
MWp Qty Cost Qty Cost
(MU) (Rs. Crs) (MU) (Rs. Crs)
Solar Rooftop 12.74 20.12 9.61 20.12 9.61
plants of < 500KW
Solar Rooftop 18.99 29.98 14.33 29.98 14.33
plants of >500KW
1-3 MW Projects 162 0 0 269.63 94.37
allotted to Farmers
by KREDL.
20 MW Projects 536 0 0 892.12 312.24
Taluk wise issued by
KREDL.
Other MW scale 0 0 0 0 0
projects
Total 729.73 50.10 23.94 1211.85 430.55
Note: 1. 15 MW of SRTPV which are under progress not accounted.
2. 50% of energy is assumed to be exported under net-metering under

SRTPV already commissioned @ Rs.9.56/unit.
Commission’s observations on BESCOM’s RPO Submissions:

Regarding Non-Solar RPO, the Commission notes that:
a. As per D-1 Format, the non-solar renewable energy is estimated as
2718.32.
b. BESCOM has considered addition of wind projects to the extent of
106 MW by 2017-18, which should generate around 250 MU at 27%
CUF, whereas BESCOM has considered only 56 MU as per the D-1
Format.
c. With the estimated energy of 31,271 MU for FY18 and considering
the excess solar energy of 1359.42, BESCOM, as per its filing, is likely
to achieve Non-solar RPO of 13.04% as against target of 12% for
FY18.
As far as solar RPO is concerned, the Commission notes that:

a. As per D-1 Format, the solar renewable energy is estimated as
1750.31 MU.
b. With the estimated energy of 31271 MU for FY18, the BESCOM is
likely to meet solar RPO of 5.59% against target of 1.25% for FY18.
cix
c. In its replies to the preliminary observations, BESCOM has estimated
solar energy as 1211.85 MU, which is not in tune with the data
furnished in D-1 Format. Considering 1211.85 MU, BESCOM would
meet solar RPO of 3.87%.
Commission’s Analysis:
The Commission has approved power purchase quantum of 30879.69
MU for FY18. The Non-solar RPO target at 12% would be 3705.56 MU.
The Commission has approved purchase of 3339.56 MU from non-solar
RE sources. Thus, BESCOM would be able to procure 3339.56 MU as
against an estimated RPO of 3705.56 MU, resulting in shortfall of 366.00
MU, which could be met by the anticipated surplus solar energy of
581.68 MU, as discussed earlier in this Chapter. Therefore, the need for
purchasing RECs may not arise.
However, in case there is a shortfall based on the actuals, BESCOM
may purchase RECs at the market rates, which would be considered
by the Commission in the APR of FY18.
The Commission has approved power purchase quantum of 30879.69
MU for FY18. The Solar RPO target at 1.25 % would be 386.00 MU. The
Commission has approved purchase of 967.68 MU of Solar energy.
Thus, BESCOM would exceed the solar RPO by 581.68 MU, which shall
be utilized to meet the shortfall in non-solar RPO. In case, there is any
need to buy Solar RECs to fully meet the solar RPO, the cost thereon
would be factored in the APR of FY18.
5.2.6 O & M Expenses for FY18:

BESCOM’s Proposal:
The BESCOM, in its application, has considered the actual O&M

expenses of Rs.1183.70 Crores which includes actual plus additional
employee cost of Rs.30.27 Crores on account of recruitment of 2426
employees during FY16 and factored inflation index of 7.24%, three
year CAGR of 6.25% for FY17 and 5.78% for FY18, for computing the
consumer growth index for projecting O&M expenses of Rs.1491.59
Crores for FY18 as detailed below:
TABLE-5.13
cx
Normative O & M Expenses for FY18- BESCOM’s submission
Sl.No. Particulars FY-16 FY-17 FY-18
1 Inflation index in% 7.24 7.24
2 Consumer Growth Index in % 6.25 5.78
3 BESCOM efficiency in % 1.00 1.00
4 Base year O&M Cost in Rs.Crs. 1183.70
O&M expenses t-year= 0&M (t-
6 1331.54 1491.59
1)*(1+WII+CGI-X) (Rs.Crs)
Based on the normative O&M expenses, the breakup of projected O &

M expenses, as furnished by the BESCOM, for the FY18, is as follows:
TABLE – 5.14
Revised O&M Expenses for FY18- BESCOM’s Proposal
Sl.
Particulars FY18
No.
1 Employee cost 1103.78
2 Other Expenses (Administrative and General 283.40
expenses)
3 Repairs and Maintenance expenses 104.41
Total O & M Expenses 1491.59
Commission’s analysis &decision:
The Commission, in its MYT Order dated 30th March, 2016, while
deciding the ARR for each year of the control period FY17-19, had
approved, an O&M expenses, of Rs. 1510.01 Crores for FY 18 based on
the actual expenses, including contribution to P & G, as per the
audited accounts for FY15, as follows:
TABLE-5.15
Approved O&M Expenses for FY18 as per
Tariff Order dated 30th March, 2016
Particulars FY16 FY17 FY18
1116202
No. of Installations 10574032
3
CGI based on 3 Year CAGR 6.01% 5.73%
Weighted Inflation index 7.24% 7.24%
Base Year O&M expenses (as per actuals
1201.45
of FY15)-Rs. Crs
Total O&M Expenses-Rs. Crs 1348.61 1510.01
cxi
As per the norms specified under the MYT Regulations, the O & M
expenses are controllable expenses and the distribution licensee is
required to incur these expenses within the approved limits.
The BESCOM has claimed additional O&M expenses of Rs.30.27 Crores

for FY16 owing to recruitment of employees during FY16. Further, it is
stated that additional employees would be recruited in FY17 and the
financial impact will be Rs.35 Crores for FY18. However, in the Format
D6 (a) of the application, BESCOM had indicated the same number of
employees working for the period FY16 to FY18. Therefore, the
Commission in its preliminary observations had sought details of the
employees working in each year of the control period along with the
cost implications.
The BESCOM, in its replies, has stated that, the officers and employees
working in the BESCOM are employed by KPTCL and their retirement is
published annually and hence factoring the employee cost due to
recruitment and retirements is a difficult task. Accordingly, BESCOM
has not furnished the financial implication for FY18.
In the absence of supporting data for claiming additional employee

cost due to proposed addition of employees for FY18, the Commission
is of the view that such expenses could be factored and considered
only when they are actually incurred by the distribution licensee.
Further, as decided in the MYT Order dated 30th March, 2016, the
Commission will look into the issue of revision of pay scale, at the time
of approving the APR for FY18 when the actual impact of revision of
pay scales is reported by BESCOM, as per its audited accounts.
In view of the above discussion, the Commission has computed the O

& M expenses for FY18, duly considering the actual O & M expenses of
FY16 as per the audited accounts (being the latest data available as
per the audited accounts) to arrive at the O & M expenses for the
base year i.e. FY16. The actual O& M expenses inclusive of contribution
to P&G Trust for FY16 is Rs.1167.38 Crores. Considering the Wholesale
cxii
Price Index (WPI) as per the data available from the Ministry of
Commerce & Industry, Government of India and Consumer Price Index
(CPI) as per the data available from the Labour Bureau, Government
of India and adopting the methodology followed by CERC with CPI
and WPI in a ratio of 80: 20, the allowable annual escalation rate for
FY18 is 7.71%.
For the purpose of determining the normative O & M expenses for FY18,
the Commission has considered the following:
e) The actual O & M expenses incurred as per the audited accounts

inclusive of contribution to the Pension and Gratuity Trust to
determine the O & M expenses for the base year FY16.
f) The three year compounded annual growth rate (CAGR) of the

number of installations considering the actual number of
installations as per the audited accounts upto FY16 and as
projected by the Commission for FY17 and FY18.
g) The weighted inflation index (WII) at 7.71%.
h) Efficiency factor at 1% as considered in the MYT Order.
The above parameters have been computed duly considering the

same methodology as is being followed in the earlier Tariff Orders of
the Commission and the relevant Orders of this Commission on various
Review Petitions.
Accordingly, the normative O & M expenses for FY18 are as follows:
TABLE – 5.16
Approved O & M expenses for FY18
Particulars FY16 FY17 FY18

No. of Installations 10654404 11248009
CGI based on 3 Year CAGR 6.28% 6.00%
7.71% 7.71%
Inflation index
Base Year O&M expenses (as per
actuals of FY16 )-Rs .Crs 1167.38
Total allowable O&M Expenses-Rs. Crs 1486.60
cxiii
Since, the base year data includes the O & M expenses inclusive of
contribution to the P & G Trust, the Commission has not considered
allowing separately the contribution to the P & G Trust.
Thus, the Commission decides to approve O&M expenses of Rs.1486.60

Crores for FY18.
5.2.7 Depreciation:
The BESCOM, in its application has claimed depreciation of Rs.374.34

Crores for FY18 on the projected gross fixed assets without considering
the cost of retirement of assets during the respective years. After
deducting an amount of Rs.144.50 Crores of deprecation on assets
created out of grants and consumer contribution, the net depreciation
claimed by BESCOM is as detailed below:
TABLE – 5.17
Depreciation-FY18- BESCOM’s Submission
Particulars FY18
Buildings 3.93
Civil 0.21
Other Civil 0.09
Plant & M/c 120.14
Line, Cable Network 391.42
Vehicles 1.17
Furniture 0.86
Office Equipment’s 1.02
Sub Total 518.84
Depreciation Withdrawn AS12 144.50
Total 374.34
The Commission, in accordance with the provisions of the MYT

Regulations and amendments issued thereon, has determined the
depreciation for FY18 considering the following:
cxiv
a) The actual rate of depreciation of category-wise assets has been
determined considering the depreciation and gross block of
opening and closing balance of fixed assets, as per the audited
accounts for FY16.
b) The actual rate of depreciation, so arrived at, is considered, to

allow the depreciation on the gross block of opening and closing
balances of fixed assets projected by BESCOM, in its application for
FY18 and factoring the actual cost of retirement of assets as per the
audited accounts for FY16 and projection thereon for FY17 and
FY18.
c) The depreciation on account of assets created out of consumers

contribution / grants are considered (deducted), based on the
opening and closing balance of such assets duly considering the
addition of assets as proposed by the BESCOM, at the weighted
average rate of depreciation as per actuals in FY16.
Accordingly, the depreciation for FY18 is arrived at as follows:

TABLE – 5.18
Approved Depreciation for FY18
Particulars FY18
Buildings 4.94
Civil 0.23
Other Civil 0.06
Plant & M/c 146.77
Line, Cable Network 385.26
Vehicles 1.35
Furniture 0.71
Office Equipment’s 0.80
Sub Total 540.11
Depreciation Withdrawn AS12 166.35
Total 373.76
Thus, the Commission decides to approve an amount of Rs.373.76

Crores towards depreciation for FY18.
cxv
5.2.8 Interest on Capital Loans:
BESCOM’s proposal:
BESCOM in its application has stated that, during FY16 majority of the
Capital Loans have been availed from Rural Electric Corporations
(REC) at the interest rates in the range of 11.50% to 12.50%. Based on
the loan balances, the interest on the capital loan for FY18 is estimated
at Rs.351.43 Crores. In projecting the interest on capital loan, BESCOM
has considered the average rate of Interest of 7.77% on existing loans
and 11.75% for the new loans. The weighted average rate of interest
claimed by BESCOM is 8.41% for FY18.
The BESCOM has requested to approve interest on capital loans for

FY18 as follows:
TABLE – 5.19
Interest on Capital Loan– BESCOM’s Proposal
Particulars FY18
Opening Balance of Capital Loans 3695.07
Less Repayments 382.68
Total Loan at the end of the year 3312.39
Average Loan for the year 3503.73
Interest on existing loans @ 7.77% 272.24

Add: New Loans 674.00
Interest on New Loan @ 11.75% 79.20
Total Interest on Capital Loans 351.43

Weighted Average rate of interest 8.41%
Based on the approved capex, the requirement of new capital loan is

Rs.674.00 Crores for FY18. Further, the Commission has considered the
repayment of loan as proposed by the BESCOM at Rs.382.68 Crores for
FY18.
cxvi
As per the audited accounts and as per the APR of FY16, the BESCOM
had incurred interest on capital loan at a weighted average rate of
interest of 8.82% p.a. This rate of interest is considered for the existing
loan balances for which interest has to be factored during FY17.
Further, for the year FY18, the weighted average rate of interest of the
preceding year has been considered on the existing loan balances.
The Commission has considered new loans, in compliance of the debt
equity ratio of 70:30 as per the MYT Regulations.
The Commission notes that, the present interest rates by commercial

banks and financial institutions are charged mainly on the basis of
Marginal Cost of fund based Lending Rates (MCLR). These rates are
comparatively lower than the base rates considered earlier. Further, in
view of the changing economic situation, it is observed that there is
considerable reductions in the MCLR and also downward trend is
evident in the interest rates. Hence, in such a situation, the Commission
is of the view that, the ESCOMs can avail Capital loans at competitive
interest rates which would be less than the proposed rates of BESCOM.
The Commission notes that, the present SBI MCLR rate for capital loans
with a tenure of 3 years is 8.15%. Considering the present MCLR, the
Commission decides to allow an interest rate of 11.00% for FY18 for new
Capital loans. It shall be noted that, the rate of interest now considered
by the Commission on the new capital loans is subject to review during
APR.
Accordingly, the approved interest on loans for FY18 is as follows:
TABLE – 5.20
Approved Interest on Loans for FY18
Particulars FY18
Opening Balance long term loans 3706.54
Add new Loans 674.00
Less: Repayments 382.68
Total loan at the end of the year 3997.86
Average Loan 3852.20
Weighted average rate of interest in % 9.21%
Interest on long term loans 354.81
cxvii
Thus, the Commission decides to approve interest of Rs.354.81 Crores
on Capital loans for FY18.
5.2.9 Interest on Working Capital:
The BESCOM has claimed interest on working capital, based on the

norms prescribed in the MYT Regulations, and considering the rate of
interest as per the short term prime lending rate by SBI, at 14.05% p.a.
The interest on working capital, computed by BESCOM, is as follows:
TABLE – 5.21
Interest on Working Capital – BESCOM’s Submission
Particulars FY18
1/12th Operation and Maintenance expenses 123.97
1% of Gross fixed assets at the beginning of the year 101.82
2 months Receivables 2484.76
Estimated Working Capital 2710.55
Rate of Interest 14.05%
Interest on working capital 380.83
The Commission in its MYT Order dated 30th March, 2016 while deciding
the ARR for each year of the control period FY17-19, had approved
Interest on working capital of Rs. 323.77 Crores for FY18.
The Commission has been computing the interest on working capital as

per the norms specified under the MYT Regulations, which consists of
one month’s O & M expenses, 1% of opening GFA and two months’
revenue. Further, the claims of BESCOM based on prime lending rate of
SBI no more exists. The Banks / Financial institutions have switched over
from PLR to base rate and now from base rate to MCLR. At present
these financial entities are offering new loans only on MCLR basis,
cxviii
whereas BESCOM is still insisting applicability of SBI PLR rates for allowing
interest on working capital. BESCOM has not considered the amended
provisions of the MYT Regulations. As discussed earlier, the MCLR for
loans with tenure of one year is 8.00%. Therefore, the Commission
decides to considers interest on working capital at 11% p.a. for FY18.
Accordingly, the approved interest on working capital for FY18 is as

follows:
TABLE – 5.22
Approved Interest on Working Capital for FY18
Particulars FY 18
Opening Gross Fixed Assets (GFA) 9992.43
Stores, materials and supplies 1% of Opening
99.92
balance of GFA
Thus, the Commission hereby approves interest on working capital of

Rs.311.72 Crores for FY18.
5.2.10 Interest on Consumers’ Security Deposit:
The BESCOM in its application has claimed interest on consumers’
security deposit of Rs.291.02 Crores for FY18 duly considering the
addition of deposits for each year of the control period FY18 based on
Bank rate of 7.75 per cent. The interest on consumers’ security deposit
projected for FY18 is as follows:
TABLE – 5.23
Interest on Consumer Security Deposits- BESCOM’s Submission
Particulars FY18
Average Consumer Security Deposit 3755.08
Rate of Interest 7.75%
Interest on consumer security deposit 291.02
cxix
In accordance with the KERC (Interest on Security Deposit) Regulations,

2005, the interest rate on consumers’ security deposit to be allowed is
the bank rate prevailing on the 1st of April of the financial year for
which interest is due. As per Reserve Bank of India Notification dated
4th October, 2016, the applicable bank rate is 6.75%. The Commission
has considered the same, for computation of interest on consumers’
security deposits for FY18.
The Commission has considered the consumers’ security deposits as

per the audited accounts of FY16 for onward projection for FY18. Also,
the Commission is considering the average of the opening and closing
balances of consumers’ deposits of the relevant year. The interest on
consumers’ deposits, approved for FY18 is as follows:
TABLE – 5.24
Approved Interest on Consumers’ Security Deposits for FY18
Particulars FY18
Opening balance of consumers’ security deposits 3623.25
Proposed addition of deposits during FY18 400.00
Closing balance of consumers’ security deposits 4023.35
Average Consumers’ Security Deposits for FY18
3823.35
Bank rate to be allowed as per Regulations 6.75%
Approved Interest on average Consumers’ Security

258.08
Deposit
Thus, the Commission decides to approve interest on consumers’

security deposits of Rs.258.08 for FY18.
5.2.11 Other Interest and Finance Charges:
The BESCOM has claimed an amount of Rs.10.19 Crores towards other

interest and finance charges for FY18. Considering, the expenditure on
this item in the earlier years, the Commission decides to allow an
amount of Rs.10.19 Crores towards interest and finance charges for
FY18.
cxx
cxxi
5.2.12 Interest and other expenses Capitalized:
The BESCOM has claimed an amount of Rs.82.00 Crores towards

capitalization of interest and other expenses during FY18. Considering,
the capital expenditure incurred and the expenses capitalized in the
previous years, the Commission decides to allow capitalization of
interest and other expenses of Rs.82.00 Crores, as proposed by
BESCOM for FY18.
The abstract of approved interest and finance charges for FY18 are as
follows:
TABLE – 5.25
Approved Interest and finance charges for FY18
Particulars FY18
354.81
Interest on Loan Capital

Interest on Consumers Security Deposit 258.08
Other Interest & Finance Charges 10.19
Less Interest & other expenses capitalized (82.00)
Total Interest & Finance Charges 852.80
5.2.13 Return on Equity:
The BESCOM in its application has claimed Return on Equity of Rs.

114.73 Crores for FY18 based on the opening balance of Share Capital,
Share deposit and recapitalized amount of security deposit. BESCOM
has not considered the accumulated surplus/ deficit under Reserves
and Surplus account. BESCOM has stated that the accumulated deficit
is not to be considered in computation of return on equity as any loss in
the distribution business will be compensated in the future years while
carrying out Annual Performance Review and that the equity will be
restored. The Return on Equity claimed by BESCOM is as detailed
below:
cxxii
cxxiii
TABLE-5.26
Return on Equity- BESCOM Submission
Particulars FY18
Opening balance of share capital 546.91
Share deposit 248.10
Less recapitalized security deposits (54.81)

Total Equity 740.20
Return on Equity @ 15.50% 114.73

The Commission has considered the actual amount of share capital,
share deposits and reserves & surplus as per the audited accounts for
FY16 for arriving at the allowable equity base for the control period
FY18.
The Commission, in accordance with the provisions of the MYT

Regulations, and amendment thereon, has considered 15.5% of Return
on Equity duly grossed up with the applicable Minimum Alternate Tax
(MAT) of 21.342%. This works out to 19.706% per annum. Further, as per
the decision of the Commission in the Review Petition No.6/2013 and
Review Petition No. 5/2014, and the amended provisions of the MYT
Regulations, the Return on Equity is to be computed based on the
opening balances of share capital, share deposits and accumulated
balance of deficit under reserves and surplus account. Further, an
amount of Rs.100.00 Crores of recapitalized consumer security deposit
as net-worth is considered as per the orders of the Hon’ble Appellate
Tribunal for Electricity in Appeal No.46/2014. Accordingly, the claims of
BESCOM on admissibility of ROE without considering the accumulated
deficit amount in computation of equity is not provided for.
Further, in compliance with the Orders of the Hon’ble ATE in Appeal

No.46/2014, wherein it is directed to indicate the opening and closing
balances of gross fixed assets along with break-up of equity and loan
component in the Tariff Order henceforth, the details of GFA, debt and
equity (net-worth) for FY18 are indicated as follows:
cxxiv
TABLE – 5.27
Status of Debt Equity Ratio for FY18
Amount in Rs.
Crores
%age %age
Normative Normative of of
Equity
Debt @ Equity @ actual actual
Year Particulars GFA Debt (Net-
70% of 30% of debt equity
worth)
GFA GFA on on
GFA GFA
Opening 9992.43 3706.54 389.22
Balance
FY18
Closing 10579.43 3997.86 449.55 7405.60 3173.83 37.79% 4.25%
Balance
From the above table it is seen that the actual amounts of debt &
equity are within the normative levels with reference to the closing
balances of GFA for FY18. Further, the Commission would review the
same during the Annual Performance Review, for FY18, based on the
actual data, as per the audited accounts.
Accordingly, the Return on Equity that could be approved for FY18,

works out as follows:
TABLE – 5.28
Approved Return on Equity for FY18
Particulars FY18
Opening Balance of Paid Up Share Capital 546.915
Share Deposit 259.34
Reserves and Surplus (317.03)

Less Recapitalised Security Deposit (100.00)
Total Equity 389.22
Approved Return on Equity with MAT 76.70
Thus, the Commission decides to approve Return on Equity of Rs.76.70

Crores, for FY18.
cxxv
5.2.14 Other Income:
BESCOM has claimed an amount of Rs.55.82 Crores as other income

for the FY18. BESCOM has proposed this amount considering the 5%
increase over the actual other income earned in FY16 excluding
incentives on prompt payment of power purchase bills.

The other income received by the BESCOM mainly includes income
from miscellaneous recoveries, interest on bank deposits, rent from staff
quarters and sale of scrap, profit on sale of stores besides incentives for
timely payment of power purchase bills. The actual ‘other income’ as
per the audited accounts for FY16 is Rs.167.20 Crores. The Commission
notes that, the BESCOM, in its projection of other income for the control
period has not included estimated incentives likely to be earned on
account of timely payment of power purchase bills.
On the basis of other income earned by the BESCOM in the past three
years and considering a nominal escalation of 5% p.a, the Commission
decides to approve other income of Rs.192.84 Crores for FY18.
5.2.15 Fund towards Consumer Relations / Consumer Education:

The Commission has been allowing an amount of Rs.1.00 Crore per
year for meeting the expenses towards consumer relations / consumer
education. This amount is earmarked to conduct consumer
awareness and grievance redressal meetings periodically and
institutionalize a mechanism for addressing common problems of the
consumers. The Commission has already issued guidelines for
consumer education and grievance redressal activities.
The Commission decides to continue providing an amount of Rs.1.00

Crore for each year of the control period FY18, towards meeting the
expenditure on consumer relations / consumer education.
cxxvi
The Commission directs BESCOM to furnish a detailed plan of action for
utilization of this amount and also maintain a separate account of
these funds and furnish the same at the time of APR.
5.3 Contribution towards Pension and Gratuity Trust
BESCOM in its application has claimed an amount of Rs.729.37 Crores

towards the arrears of contribution to P&G Trust not released by the
Government of Karnataka.
The Commission in its preliminary observations had informed BESCOM

to furnish reasons /justifications for inclusion of this amount in the
proposed ARR for FY18 to be recovered from the consumers as part of
the retail supply tariff during FY18 in contravention of the Commission’s
decision in Tariff Order 2016.
In its replies to the Commission’s preliminary observations, BESCOM has

stated that it has included an amount of Rs. 729.37 Crores towards
BESCOM portion of arrears of contribution to P&G Trust not released by
the Government of Karnataka, in accordance to the instructions issued
by the Energy Department, GoK vide Letter No. EN 26 PSR 2016/P3
dated 16.09.2016.
It is to be noted that, the Commission in its Order dated 30th March,

2016 has already dealt with this issue and had observed that,
a) 'As per Rule 4(13) of the Karnataka Electricity Reforms (Transfer of

Undertakings of KPTCL and its Personnel to Electricity Distribution
and Retail Supply Companies) Rules, 2002, notified by the
Government on 31.05.2002, the State Government is liable for
funding the pension and gratuity liability of existing pensioners as on
the effective date of Second Transfer Scheme.
b) The Government, as per its order dated 19.12.2002, has adopted

“pay as you go” approach to meet the pension and gratuity
requirements of existing pensioners on the effective date of second
cxxvii
transfer Scheme. With this arrangement, the GoK is liable to meet
the pension and gratuity requirement of existing pensioners.’
Thus, as per the provisions of the prevailing Rules and Government

Orders issued thereon, the Commission had earlier decided that this
liability cannot be passed on to the consumers, through tariff.
In spite of this Order of the Commission, BESCOM has claimed this

liability (in the proposed ARR for FY18, whereas, the same should have
been borne by the Government of Karnataka.
The Commission reiterates its earlier decision that, as per Rule 4(13) of
the Karnataka Electricity Reforms (Transfer of Undertakings of KPTCL
and its Personnel to Electricity Distribution and Retail Supply
Companies) Rules, 2002, notified by the Government on 31.05.2002
and Government Order No. DE 15 PSR 2002 Dated 19.12.2002, the
amount in question is liable to be borne only by the Government of
Karnataka and cannot be passed on to the consumers, through tariff.
In view of the above, the Commission is unable to accept the claims
of BESCOM to allow an amount of Rs.729.37 Crores being the State
Government’s liability towards arrears of contribution to P&G Trust in the
ARR for FY18.
5.4 Abstract of Revised ARR for FY18:
In the light of the above analysis and decisions of the Commission, the
following is the approved revised ARR for FY18:
cxxviii
TABLE – 5.29
Approved Revised ARR for FY18
Amount in Rs.
Crores
FY18
Sl. As As per
Particulars As
No Approved application
Revised &
in the MYT filed on
Approved
Order 30.11.2016
Revenue at existing tariff in Rs Crs
Revenue from tariff and Miscellaneous

1 Charges 13016.45 13821.23
2 Tariff Subsidy from BJ/KJ 41.04 77.70
3 Tariff Subsidy from IP 1955.61 1761.17
Total Revenue at Existing Tariff 15013.10 15660.10
4 Power Purchase Cost 11587.95 12249.11 12265.18
Transmission charges of KPTCL
5 1622.58 1622.58 1347.80
6 SLDC Charges 13.20 13.20 11.33
transmission 13223.73 13884.89 13624.31
Total O&M Expenses 1510.01 1491.59 1486.60
10 Depreciation 300.20 374.34 373.76
11 Interest on Loans 319.09 351.43 354.81
12 Interest on Working capital 323.77 380.83 311.72
13 Interest on belated payment on PP Cost
14 Interest on consumer deposits 280.70 291.02 258.08
15 Other Interest & Finance charges 10.19 10.19 10.19
16 Less interest & other expenses capitalised 82.00 82.00 82.00
Total Interest & Finance charges 851.75 951.47 852.80
17 Other Debits 0.00 0.00 0.00
Net Prior Period Debit/Credit
18 0.00 0.00 0.00
19 Return on Equity 40.54 114.73 76.70
Funds towards Consumer
Relations/Consumer Education
20 1.00 1.00 1.00
21 Other Income 213.00 55.82 192.84
Provision for contribution to P&G Trust
22 (GoK Liability) 729.37 0.00
Disallowance of Interest and Depreciation
23 on imprudent investments in FY16 0.56
24 ARR 15714.23 17491.57 16221.77
Deficit for the year
25 0.00 -2478.47
Deficit for FY16 carried forward
26 -1424.40 -692.42
cxxix
27 Net ARR 15714.23 18915.97 16914.19
5.5 Segregation of ARR into ARR for Distribution Business and ARR for Retail
Supply Business:
BESCOM in its application has proposed the segregation of ARR into

ARR for Distribution Business and ARR for Retail Supply Business at the
same ratio as proposed in its MYT application for FY17-19. The
Commission decides to continue the same ratio of segregation of ARR
into ARR for distribution business and ARR for retail supply business as
approved in its Tariff Order dated 30th March, 2016, as detailed below:
TABLE – 5.30
Approved Segregation of ARR – FY18
Distribution Retail Supply
Particulars
Business Business
O&M 56% 44%
Depreciation 88% 12%
Interest on Loans 100% 0%
Interest on Consumer Deposits 0% 100%
RoE 50% 50%
GFA 88% 12%
Non-Tariff Income 19% 81%
Accordingly, the following is the approved ARR for Distribution Business

and Retail supply business:
TABLE – 5.31
APPROVED REVISED ARR FOR DISTRIBUTION BUSINESS – FY18
Sl. No Particulars FY18

1 R&M Expenses
2 Employee Expenses
3 A&G Expenses 832.50
Interest & Finance Charges
8 Less interest & other expenses capitalised 82.00
9 Total 1481.24
12 NET ARR 1482.95
cxxx
TABLE – 5.32
APPROVED ARR FOR RETAIL SUPPLY BUSINESS – FY18
Sl. No Particulars
FY18
1 Power Purchase 12265.18
2 Transmission Charges 1359.13
3 R&M Expenses
4 Employee Expenses
5 A&G Expenses 654.11
Interest & Finance Charges
Total 14855.67
10 ROE 38.35
Fund towards Consumer Relations /
12 Consumer Education 1.00
13 NET ARR 14738.82
5.6 Gap in Revenue for FY18:
As discussed above, the Commission decides to approve the revised

Annual Revenue Requirement (ARR) of BESCOM for its operations in
FY18 at Rs.16914.19 Crores as against BESCOM’s application proposing
the revised ARR of Rs.18915.97 Crores by including the revenue deficit
of Rs.1424.40 Crores for FY16. The approved ARR includes an amount of
Rs.692.42 Crores which is determined as the deficit in FY16 as discussed
in Chapter-4. Based on the existing retail supply tariff, the total
realization of revenue will be Rs.15660.10 Crores which is Rs.1254.09
Crores less than the projected revenue requirement for FY18.
The net ARR and the gap in revenue for FY18 are shown in the following
table:
cxxxi
TABLE – 5.33
Revenue gap for FY18
Particulars FY18
Net ARR including carry forward gap of FY16 (in Rs. Crores) 16914.19
Approved sales (in MU) 26109.16
Average cost of supply (in Rs./unit) 6.48
Revenue at existing tariff (in Rs. Crores) 15660.10
Gap in revenue (in Rs. Crores) (1254.09)
The determination of revised retail supply tariff on the basis of the

above approved ARR is detailed in the following Chapter.
cxxxii
CHAPTER – 6
DETERMINATION OF RETAIL SUPPLY TARIFF FOR FY18
6.0 Revision of Retail Supply Tariff for FY18-BESCOM’s Proposals and

Commission’s Decisions:
6.1 Tariff Application
As per the Tariff application filed by the BESCOM, it has projected an

unmet gap in revenue of Rs.3902.86 Crores for FY18, which also
includes the gap in revenue of Rs.1424.40 for FY16. In order to bridge
this gap in revenue, BESCOM has proposed a uniform tariff increase of
148 paise per unit, in respect of all the categories of consumers.
Subsequently, BESCOM has filed an amendment application by
proposing the increase the energy charges to domestic category with
telescopic tariff and increase in demand charges and reduction of
energy charges in respect of HT category of consumers.
In the previous chapters of this order, the process of Annual

Performance Review (APR) for FY16 and the revision of ARR for FY18
has been discussed. The various aspects of determination of tariff for
FY18 are discussed in this Chapter.
6.2 Statutory Provisions guiding determination of Tariff
As per Section 61 of the Electricity Act 2003, the Commission is guided

inter-alia, by the National Electricity Policy, the Tariff Policy and the
following factors, while, determining the tariff so that -
 the distribution and supply of electricity are conducted on

commercial basis;
 competition, efficiency, economical use of resources, good
performance, and optimum investment are encouraged;
 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 Commission;
 efficiency in performance is to be rewarded: and
 that a multi-year tariff framework is adopted.
cxxxiii
Section 62(5) of the Electricity Act 2003, read with Section 27(1) of the
Karnataka Electricity Reform Act 1999, empowers the Commission to
specify, from time to time, the methodologies and the procedure to be
observed by the licensees in calculating the Expected Revenue from
Charges (ERC). The Commission determines the Tariff in accordance
with the Regulations and the Orders issued by the Commission from time
to time.
6.3 Factors Considered for Tariff setting:
The Commission has considered the following relevant factors for

determination of retail supply tariff:
a) Tariff Philosophy:
As discussed in the earlier tariff orders, the Commission continues to

fix tariff below the average cost of supply in respect of consumers
whose ability to pay is considered inadequate and also fix tariff at
or above the average cost of supply for categories of consumers
whose ability to pay is considered to be higher. Thus, the system of
cross subsidy continues. However, the Commission has taken due
care to progressively bring down the cross subsidy levels as
envisaged in the Tariff Policy 2016 issued by the Government of
India.
b) Average Cost of Supply:
The Commission has been determining the retail supply tariff based
on the average cost of supply. The KERC (Tariff) Regulations, 2000,
as amended from time to time, require the licensees to provide
details of embedded cost of electricity voltage / consumer
category-wise. The distribution network of Karnataka is such that, it
is difficult to segregate the common cost between voltage levels.
Therefore, the Commission has decided to continue the average
cost of supply approach for recovery of the ARR. With regard to
the indication of voltage- wise cross subsidy with reference to the
cxxxiv
voltage-wise cost of supply, the same is indicated in the Annexure
to this Order.
c) Differential Tariff:
The Commission has been determining differential retail supply tariff

for consumers in urban and rural areas, beginning with its Tariff
Order dated 25th November, 2009. The Commission decides to
continue the same in the present order also.
Further, in this Tariff Order, the slab-rates for BESCOM’s domestic

consumers for levying energy charges are in variance with other
ESCOMs, which is in partial acceptance of the BESCOM’s prayer in
its amended petition dated 16th February, 2017, as discussed later in
this Chapter.
6.4 New Tariff Proposals by BESCOM:
i) Tariff determination for Auxiliary Consumption of KPTCL’s Sub-

stations:
BESCOM, in its tariff application dated 30th November, 2016,

besides seeking revision of retail supply tariff for all the
categories of consumers, has prayed for determination tariff for
the Auxiliary Consumption of KPTCL Stations. Other ESCOMs
namely, CESC and MESCOM have also filed separate Petitions
before this Commission seeking tariff determination for auxiliary
consumption of KPTCL’s substations.
BESCOM Submission:
BESCOM has requested fixation of tariff for KPTCL’s Auxiliary

consumption on the following grounds:
1. The power utilized by KPTCL Substations for auxiliary
consumption purpose is supplied by ESCOMs through a
separate feeder or local feeder. The power so supplied by
ESCOMs is from the pooled purchase of power from different
cxxxv
sources at different rates. The cost incurred in procurement
of power by the ESCOMs, need to be paid by the KPTCL.
2. The auxiliary consumption of PGCIL stations, being the

transmission utility, is being billed under commercial tariff.
3. The auxiliary consumption of KPTCL Substations is being billed

at average power purchase cost of the ESCOMs where the
substations are geographically located, from June, 2005 to
October 2016 as per the KPTCL’s letter dated 15.12.2005.

The treatment of the electricity consumption of KPTCL’s substations
has been a matter of contention between KPTCL and ESCOMs.
While the KPTCL has been urging the Commission to treat the
consumption of its substations as transmission loss, the ESCOMs
have been requesting the Commission to fix a commercial tariff.
The BESCOM in its letter dated 29.05.2015, had requested the
Commission to approve the Commercial tariff to the auxiliary
consumptions in respect of KPTCL Sub-stations. After examining the
issue in detail, the Commission had clarified that as per the
provisions of Regulation 3.3 of the KERC (Terms and Conditions for
Determination of Transmission Tariff) Regulations, 2006, the charges
for the auxiliary consumptions of KPTCL substations used for the
purpose of air-conditioning, lighting etc. are part of the normative
operation and maintenance expenses of KPTCL and hence the
charges for the same have to be borne by KPTCL. Further, the
Commission also notes that, the KPTCL while computing the
transmission losses, is not considering the electricity consumption of
its sub-stations as part of the transmission loss. Accordingly, the
Commission vide its letter No. B/07/05/451 dated 23.06.2015, had
clarified that since there is no specific category in the present tariff
schedule for billing the auxiliary consumption of KPTCL Substations,
the ESCOMs should seek determination of tariff in respect of sale of
power to KPTCL substations under the provisions of clause 3.05 of
cxxxvi
the Conditions of Supply of Electricity by Distribution Licensees in
the State of Karnataka. Accordingly, the ESCOMs have filed the
petitions.
From the submissions made by BESCOM, it is clear that, the power
utilized by KPTCL Sub-stations for the consumption purpose is being
supplied by the ESCOMs through a separate / local feeder. Since,
KPTCL is responsible for accounting the energy purchased by the
ESCOMs upto the interface point of the ESCOMs and the energy
utilized by KPTCL Substations for auxiliary consumption purpose has
not been recognized in computation of transmission losses, the
energy supplied from the distribution network of the ESCOMs for
the consumption of the KPTCL Sub stations has to be accounted
and charged in accordance with the provisions of the KERC (Terms
and Conditions for Determination of Transmission Tariff)
Regulations, 2006.
Now, keeping in view the request of the ESCOMs, the issue before
the Commission is whether to fix a commercial tariff or a tariff
equal to the State’s average power purchase cost, to bill the
auxiliary consumption of KTPCL Sub-stations. The Commission notes
that any tariff charged to bill the KPTCL’s substations consumption,
shall have to be ultimately recovered through transmission tariff,
which in turn, is passed on to the end consumers in the form of
retail supply tariff. In order to minimise the burden on the retail
supply consumers, the Commission decides as follows:
In accordance with the provisions of Regulation 3.3 of the KERC
(Terms and Conditions for Determination of Transmission Tariff),
Regulations, 2006 and amendment thereon and Clause 3.05 of the
Conditions of Supply of Electricity by Distribution Licensees in the
State of Karnataka, the power supplied by the ESCOMs to the
KPTCL’s Substations for auxiliary consumption purposes, the
Commission decides to fix a single part tariff rate at the State
Average Power Purchase Cost, as approved by the Commission, in
the Tariff Orders issued from time to time.
cxxxvii
Further, for the energy consumption by KPTCL’s Sub-stations for
auxiliary purposes, during the previous periods, the ESCOMs shall
bill it at the average power purchase cost of the State, as
determined by the Commission in the Tariff Orders issued from time
to time.
ii) Amendment Petition seeking increase in demand charges of HT

Installations and modification of slabs for Domestic Consumers:
BESCOM in its amendment petition dated 16th February, 2017, has

requested for:
d) Creation of additional slabs in respect of Domestic consumers –

LT2(a)(i) and (ii) and revision the tariff as suggested therein;
e) Concessional tariff of Rs.5.98 per unit for street lights using LED
bulbs and higher tariff of Rs.11 per unit for street lights not using
LED bulbs; and
f) Increasing the demand charges and reduction in energy

charges in respect of HT 1, HT 2(a) (b) (c) and HT 4 Installations.
The Commission has dealt with these issues as follows:
iii) Creation of additional slabs in respect of Domestic consumers:
BESCOM has proposed telescopic tariff in respect of domestic

consumers of areas of BBMP and all other urban local bodies, as
follows:
1. Rs.3.60 per unit up to 30 units.

2. Rs.5.30 for all the units consumed in the month, if the
consumption exceeds 31 units and up to 100 units.
consumption exceeds 101units and up to 200 units.
4. Rs.6.40 for all the units from 1 to 300 units consumed in the
month
5. Rs.6.90 for all the units consumed from 301 units to 400 units in
the month
cxxxviii
6. Rs.7.20 for all the units consumed from 401 to 500 units in a
month.
7. Rs.7.50 for all the units consumed above 500 units per month.
In respect domestic consumers of village panchayat areas, the

BESCOM has proposed the following slab rates:
1. Rs.3.50 per unit up to 30 units.

consumption exceeds 31 units and up to 100 units.
consumption exceeds 101units and up to 200 units.
4. Rs.6.10 for all the units from 1 to 300 units consumed in the
month
5. Rs.6.70 for all the units consumed from 301 units to 400 units in
the month
6. Rs.7.10 for all the units consumed from 401 to 500 units in a
month.
7. Rs.7.40 for all the units consumed above 500 units per month.
Consumers’ Response:
The consumers have opposed the proposal to introduce telescopic

scales for the following reasons:
i) The proposal is against the principle of natural justice as the slab

system and benefit of slab system is allowed to all the tax payer
/ consumers by the Income Tax and the BWSSB.
ii) In a situation where there is surplus power, higher consumption
should be encouraged by offering lower tariff. BESCOM’s
proposal is against this spirit.
iii) The proposal is an attempt to address the issue of HT consumers,
who are exiting the BESCOM net by opting for open access,
which would in effect amount to collecting increased tariff from
the domestic consumers and giving it to rich HT consumers.
iv) The increase in tariff should be uniformly spread over all the
consumers and in case if any concession is to be extended, the
cxxxix
Government should provide subsidy for such concessions. The,
BESCOM is trying to take over the role of the Government.
cxl
Commission’s Analysis and decisions:
While submitting the new proposal, the BESCOM has furnished details
of additional revenue likely to be realised from these categories. But
while doing so, it has not furnished the basis for projecting the sales and
connected load under each slab and the financial impact on the
consumers. Thus, the proposal is incomplete in so far as the revenue
estimates are concerned. However, BESCOM has stated that the
proposed ARR will not undergo any change as the increase in revenue
from a few consumer categories would get setoff against reduction in
tariff to other consumers.
The Commission would like to point out that the tariff structure in
respect of domestic consumers is uniform across the State. The
Government of Karnataka has also favoured a uniform tariff in the
State. Keeping this in view, the Commission is unable to accept the
proposal of the BESCOM to introduce telescopic slabs with a different
tariff structure to BESCOM consumers. The Commission also
appreciates the point that in the current surplus power situation higher
consumption should not be discouraged but encouraged especially
by cross subsidizing consumers. However, considering the large
consumer base of domestic consumers in BESCOM area, the
Commission has considered a change in the slabs of domestic
consumers under tariff schedule LT2(a)(i) and LT2(a) (II), without
changing the basic tariff structure. The details of the same are
indicated in the respective tariff schedules, of this order.
iv) Concessional tariff for street lights using LED bulbs and higher tariff for
street lights not using LED bulbs:
The Commission does not find merit in the proposal, since the dis-
incentive for non-use of LED bulbs is too harsh and if implemented,
would only add to the huge revenue arrears already existing in this
category, besides defeating the principles of cross subsidy surcharge.
The Commission decides to continue to extend the existing incentive
for usage of LED bulbs for street light installations, as indicated in the
respective Tariff Schedules of the Tariff Order.
cxli
v) Increase in Demand Charges and reduction in energy charges to all
the HT consumers
BESCOM in its petition dated 16th February, 2017 has proposed

increase in Demand Charges (Fixed Cost) and reduction in energy
charges to all the HT consumers for the following reasons:
i) The ratio of fixed and variable cost of power purchase cost
payable to the private generators is 33: 67.
ii) All the ESCOMs in the state are recovering the fixed cost of their
distribution network in the ratio of 11:89.
iii) BESCOM is recovering 22% of the fixed cost through energy
charge (variable charge) and since the HT consumers are opting
for open access, it is not able to recover the variable costs which
include the fixed cost by Rs.10/- (Rupees Ten only) Per
KVA/HP/KW for all the consumers.
iv) The contribution of Fixed cost is only 11% of the ARR and the
remaining fixed cost is camouflaged in the energy charges,
which are higher.
With the above justification, the BESCOM has proposed to increase the
Demand charges upto Rs.250 per KVA of the billing demand from the
existing Demand Charge of Rs.180 -200 per KVA. BESCOM has also
proposed reduction energy charges ranging between 45 Paise to 95
paise per unit to the various categories of HT consumers.
Consumers’ Response:
The representatives of small-scale industries have opposed the

proposal for increasing the Demand Charges. They have contended
that BESCOM has not furnished the working details of fixed charges
and its percentage to the total fixed charges being incurred. It is
submitted that as per the provisions of the Electricity Act, 2003, the
BESCOM should realise the cost of supply from all the categories of
consumers and should not confine recovery of fixed cost only to a
specific category of consumers.
cxlii
.
BESCOM, in its petition has considered the recovery of Fixed Cost (FC)
of generation sources and the distribution network. It has not
considered the FC involved in transmission of power and the SLDC
charges which are one of the major components of the ARR. Further,
seeking increase in demand charges only for HT consumers and
increase in energy charges for higher slabs of domestic consumers
while reducing the energy charges to HT consumers does not appear
to a proper approach to retain HT consumers, in its fold. Any proposal
to encourage sale or to improve the ESCOM’s finances should be
made by keeping the interest of all the consumers in mind and the
treatment to various class of consumers across the ESCOM should be
just and equitable. Hence, the Commission is unable to accept the
proposal of BESCOM to increase the Demand Charges of its HT
consumers and also to selectively increase the energy charges under
higher slabs of domestic consumers.
The Commission in its Tariff Order dated 30th March, 2016 had
considered increase in demand charges to the consumers of all the
ESCOMs in the State.
“As per the new Tariff Policy issued by the Ministry of Power,
Government of India, dated 28th January, 2016, two-part Tariff
featuring separate fixed and variable charges shall be
introduced for all consumers. In order to ensure their financial
viability, it is imperative that the fixed expenditure incurred by
the ESCOMs is recovered in the form of fixed charges. On a
study of the existing rate of fixed charges levied on the
consumers and the amount collected thereon, it is observed
that fixed charges need to be increased gradually to meet the
above objective”.
In pursuance of the above, the Commission has again reviewed the

status of recovery of fixed charges while revising the tariff for FY18. The
cxliii
fixed costs to be incurred by BESCOM to supply power to its consumers
for FY18, consists of the following components:
Total Fixed Cost to be

Activity
incurred -Rs. Crs.
Generation 2648.78
Transmission including SLDC charges 1881.02
Distribution network cost 1483.41

Total Fixed cost of BESCOM 6013.21
The approved Net ARR of BESCOM is Rs. 16914.19 Crores out of which,
RS.6013.21 Crores is towards fixed cost. As per the existing Revenue
rates, BESCOM recovers an amount of Rs. 1922.71 Crores towards the
fixed cost, which accounts for recovery of 32% of the fixed cost,
incurred by the BESCOM.
Since the Commission has decided to increase the FC year on year

gradually, an increase ranging between Rs. 10 to Rs.20 has been
considered now while approving the tariff to various categories of
consumers. The details of the actual increase are indicated in the tariff
schedule of each of the consumer categories.
vi) Introduction of morning peak from 6 AM to 10 AM under ToD billing:
In respect of HT consumers, the ESCOMS have proposed to introduce

ToD billing for morning peak between 6 AM to 10AM in addition to the
prevailing ToD billing for usage of energy during evening peak (6 p.m.
to 10 p.m.) and not to allow any incentive for off peak usage (during
night hours) against the existing rate of Rs.1.25 per unit.
BESCOM has submitted that the ToD billing is to encourage the HT

consumers to shift their load from peak hours to non-peak hours by
incentivising them and also to levy a penalty to discourage usage of
energy during peak hours. It has also cited the examples of Delhi,
cxliv
Mumbai and Gujarat where ToD billing is prevailing for both morning
and evening peak usage as compared to the State’s single ToD billing
for evening peak usage. The off peak incentive helps in shifting the
load curve to night hours which is helpful for optimum power
generation during night hours.
Consumers across the State have opposed this proposal and have
requested the Commission to make the ToD billing optional instead of
making it mandatory.
The Commission has examined the issue in detail. It is found that during
most part of the year, the morning peak usage is higher than the
evening peak usage. In the absence of penal charges during the
morning peak, the tendency to use the power in the morning peak is
more as compared to the evening peak. The system of ToD billing for
morning peak is also prevalent in the States referred to above. Hence,
the Commission decides to introduce ToD billing in respect of HT
consumers for morning peak between 6 AM to 10AM in addition to the
prevailing ToD billing for usage of energy during evening peak (6 p.m.
to 10 p.m.) and also to reduce the incentive for off-peak usage (during
night hours) to Re1/ per unit as against the existing rate of Rs.1.25 per
unit. The necessary changes in the ToD billing are indicated in the
respective Tariff schedule of the HT Consumers, in this Tariff Order.
6.5 Revenue at existing tariff and deficit for FY18:
The Commission in its preceding Chapters has decided to carry

forward the gap in revenue of Rs.692.42 Crores of FY16 to the ARR of
FY18. The gap in revenue for FY18 is proposed to be filled up by revision
of Retail Supply Tariff, as discussed in the following paragraphs of this
Chapter.
Considering the approved ARR for FY18 and the revenue as per the
existing tariff, the gap in revenue for FY18 is as follows:
TABLE – 6.1
Revenue Deficit for FY18
Amount Rs. in Crores
Particulars Amount
cxlv
Approved Net ARR for FY18 including gap of FY16 16914.19
Revenue at existing tariff 15660.10
Surplus / (- )Deficit (1254.09)
Additional Revenue to be realised by Revision of 1254.09
Tariff
Accordingly, in this Chapter, the Commission has proceeded to

determine the Revised Retail Supply Tariff for FY18. The category-wise
tariff as existing, as proposed by BESCOM and as approved by the
Commission are as follows:
6.6 Category-wise Existing, Proposed and Approved Tariffs:
1. LT-1 Bhagya Jyothi:
The existing tariff and the tariff proposed by BESCOM are given below:
Sl. Details Existing as per 2016 Proposed by BESCOM

No Tariff Order
1 Energy charges 596 Paise / Unit Subject 744 Paise / Unit Subject
(including recovery to a monthly minimum to a monthly minimum
towards service main of Rs.30 per installation of Rs.30 per installation
charges) per month. per month.
Commission’s Views/ Decision

The Government of Karnataka has continued its policy of providing
free power to all BJ/KJ consumers with a single outlet, whose
consumption is not more than 40 units per month vide Government
Order No. EN12 PSR 2017 dated 20 th March, 2017 (instead of
the earlier limit of 18 units per month). Based on the present average
cost of supply, the tariff payable by these BJ/KJ consumers is revised to
Rs.6.48 per unit.
Further, the ESCOMs have to claim subsidy for only those consumers
who consume 40 units or less per month per installation. If the
consumption exceeds 40 units per month or if any BJ/KJ installation is
found to have more than one outlet, it shall be billed as per the Tariff
Schedule LT 2(a).
The Commission determines the tariff (CDT) in respect of BJ / KJ

installations as follows:
cxlvi
LT – 1 Approved Tariff for BJ / KJ installations
Commission determined Tariff Retail Supply Tariff
determined by the
Commission
648 paise per unit, -Nil-*
Subject to a monthly minimum of Fully subsidized by GoK
Rs.30 per installation per month.
*Since GOK is meeting the full cost of supply to BJ / KJ, the Tariff payable by these
Consumers is shown as nil. However, if the GOK does not release the subsidy in
advance, a Tariff of Rs.6.48 per unit subject to a monthly minimum of Rs.30 per
installation per month, shall be demanded and collected from these consumers.
2. LT2 - Domestic Consumers:
The details of the existing and proposed tariff under this category are
given in the Table below:
Proposed Tariff for LT-2 (a)
LT-2 a (i) Domestic Consumers Category
Applicable to areas coming under Bruhat Bangalore Mahanagara
Palike (BBMP), Municipal Corporations and all Urban Local Bodies
Details Existing as per 2016 Tariff Proposed by BESCOM As per Revised proposal
Order by BESCOM dated
16.02.2017:
Fixed Charges For the first KW Rs.30 For the first KW Rs.30 For the first KW Rs.30
per Month For every additional KW For every additional KW For every additional KW
Rs.40 Rs.40 Rs.40
Energy Charges
0-30 units 0 to 30 units: 448 0 to 30 units:
0 to 30 units:300 paise/unit
(life line paise/unit 360paise/unit
Consumption )
31 to 100 units:440 31 to 100 units: 588 paise 31 to 100 units: 530 paise/
paise/unit / unit unit (for all units from 1 to
100 units).
101 to 200 units:590 paise 101 to 200 units:738 paise 101 to 200 units:710paise
/unit /unit /unit (for all units from 1
to 200 units).
Energy Charges Above 200 units:690paise Above 200 units:838paise 201 to 300 units:640paise
exceeding 30 /unit /unit /unit (for all units from 1
units per month to 300 units).
301 to 400 units:690paise
/unit (for all units from 1
to 400 units).
/unit (for all units from 1
to 500 units).
cxlvii
Above 500 KWH: 750
paise for all units
LT-2(a)(ii) Domestic Consumers Category

Applicable to Areas under Village Panchayats
Details Existing as per 2016 Tariff Proposed by BESCOM As per Revised proposal by
Order BESCOM dated 16.02.2017
Fixed charges per For the first KW Rs.20 For the first KW Rs.20 For the first KW Rs.20
Month
For every additional KW For every additional For every additional
Rs.30 KW Rs.30 KW Rs.30
Energy Charges Upto 30 units:290 paise 0 to 30 units:438 paise
0-30 units ( life line /unit /unit 0 to 30 units: 350paise/unit
Consumption )
Energy Charges 31 to 100 units:410 paise 31 to 100 units:558 paise 31 to 100 units: 490paise
exceeding 30 / unit / unit / unit (for all units from 1 to
Units per month 100 units).
101 to 200 units: 560 paise 101 to 200 units: 708 paise 101 to 200 units:670paise
/unit /unit /unit (for all units from 1 to 200
units).
Above 200 units: 640 paise Above 200 units:788 paise 201 to 300 units:610paise
/unit /unit /unit (for all units from 1 to 300
units).
/unit (for all units from 1 to 400
units).
/unit (for all units from 1 to
5500 units).
Above 500 KWH: 740 paise for
all units
Commission’s decision
As made out in para 6.4(iii), the Commission decides to change the

existing slab system of billing the energy consumption and continue
with the two tier tariff structure in respect of the domestic consumers as
shown below:
(i) Areas coming under Bruhat Bangalore Mahanagara Palike (BBMP)

Area, Municipal Corporations and all Urban Local Bodies.
(ii) Areas under Village Panchayats.
The Commission approves the tariff for this category as follows:
Approved Tariff for LT 2 (a) (i) Domestic Consumers

Category:
Applicable to Areas coming under Bruhut Bangalore Mahanagara
Palike (BBMP) Municipal Corporations and all Urban Local Bodies
cxlviii
Details Tariff approved by the
Commission
Fixed charges per Month For the first KW: Rs.40/-
For every additional KW Rs.50/-
Energy Charges up to 30 units per Upto 30 units: 325paise/unit
month (0-30 units)-life line consumption.
Energy Charges in case the
consumption exceeds 30 units per 201 to 300 units: 730 paise/unit
month 301 to 400 units: 735 paise/unit
Above 400 units: 740 paise/unit
Approved Tariff for LT-2(a) (ii) Domestic Consumers Category:

Applicable to Areas under Village Panchayats
Details Tariff approved by the Commission
Fixed Charges per Month For the first KW: Rs.25/-
For every additional KW Rs.40/-
Energy Charges up to 30 Up to 30 units: 315 paise/unit
units per month (0-30 Units)-
Lifeline Consumption
31 to 100 units: 440 paise/unit
Energy Charges in case the
101 to 200 units:595paise/unit
consumption exceeds 30
units per month 201 to 300 units: 680 paise/unit
LT2 (b) Private and Professional Educational Institutions& Private

Hospitals and Nursing Homes:
The details of the existing and the proposed tariff by BESCOM under
this category are given in the Table below:
LT 2 (b) (i)Applicable to areas under BBMP, Municipal Corporations

Areas and all urban Local Bodies
Details Existing as per 2016 Tariff Order Proposed by BESCOM

Fixed Rs.45 Per KW subject to a Rs.45 Per KW subject to a
Charges per minimum of Rs.75 per month minimum of Rs.75 per
Month month
Energy For the first 200 units 625 For the first 200 units 773
Charges paise per unit paise per unit
cxlix
Above 200 units 745 paise per For the balance units 893
unit paise per unit
LT 2 (b)(ii) Applicable to Areas under Village Panchayats

Details Existing as per 2016 Tariff Proposed by BESCOM
Order
Fixed Rs.35 per KW subject to a Rs.35 per KW subject to a
Charges per minimum of Rs.60 per Month minimum of Rs.60 per Month
Month
Energy For the first 200 units: 570 For the first 200 units:718
Charges paise per unit paise per unit
Above 200 units: 690 paise For the balance units:838
per unit paise per unit
As in the previous Tariff Order the Commission decides to continue the
two tier tariff structure as follows:
(i) Areas coming under BBMP, Municipal Corporation and all urban
local bodies.
Approved Tariff for LT 2 (b) (i)

Private Professional and other private Educational Institutions, Private
Hospitals and Nursing Homes
Applicable to areas under BBMP, Municipal Corporations and all other
urban Local Bodies.
Fixed Charges per Month Rs.55 per KW subject to a minimum of Rs.85
per Month
Energy Charges 0-200 units: 650 paise/unit
Approved Tariff for LT 2 (b) (ii)

Private Professional and other private Educational Institutions, Private
Hospitals and Nursing Homes
Applicable in Areas under Village Panchayats
Fixed Charges per Month Rs.45 per KW subject to a minimum of Rs.70 per
Month
Energy Charges 0-200 units: 595 paise/unit
3. LT3- Commercial Lighting, Heating& Motive Power:

cl
The existing and proposed tariff are as follows:
LT- 3 (i) Commercial Lighting, Heating& Motive Power
Applicable to Areas coming under BBMP, Municipal Corporation and
urban local bodies
Order
Fixed charges per Rs.50 per KW Rs.50 per KW
Month
Energy Charges For the first 50 units:715 For the first 50 units:863paise
paise per unit per unit
For the balance units:815 For the balance units: 963
paise per unit paise per unit
Demand based tariff (optional) where sanctioned load is above 5 KW

but below 50 KW.

Fixed Rs.65 per KW Rs.65 per KW
charges
Energy For the first 50 units:715paise For the first 50 units:863paise
Charges per unit per unit
For the balance units:815 For the balance units:963
paise per unit paise per unit
LT-3 (ii) Commercial Lighting, Heating & Motive

Applicable to areas under Village Panchayats
Order
Fixed Charges Rs.40 per KW Rs.40 per KW
per Month
Energy Charges For the first 50 units:665paise For the first 50 units:813
per unit paise per unit
For the balance For the balance
units:765paise per unit units:913paise per unit
Demand based tariff (optional) where sanctioned load is above 5 KW

but below 50 KW
Details Existing as per 2016 Tariff Proposed by
Order BESCOM
Fixed Charges Rs.55 per KW Rs.55 per KW
per Month
Energy Charges For the first 50 units:665paise For the first 50
per unit units:813
paise per unit
For the balance units:765 For the balance
paise per unit units:913 paise per
unit
cli
Commission’s Views/ Decision
As in the previous Tariff Order, the Commission decides to continue

with the two tier tariff structure as below:
(i) Areas coming under BBMP, Municipal Corporations and other

urban local bodies.
Approved Tariff for LT- 3 (i)Commercial Lighting, Heating& Motive

Applicable to areas under BBMP, Municipal Corporations and other
Urban Local Bodies
Details Approved by the Commission

Fixed Charges per Month Rs.60 per KW
Energy Charges For the first 50 units: 750 paise/ unit
For the balance units: 850 paise/unit
Approved Tariff for Demand based tariff (Optional) where sanctioned

load is above 5 kW but below 50 kW

Fixed Charges per Rs.75 per KW
Month
Energy Charges For the first 50 units:750paise /unit
For the balance units:850 paise/unit
Approved Tariff forLT-3 (ii) Commercial Lighting, Heating and
Motive
Applicable to areas under Village Panchayats

Fixed charges per Rs.50 per KW
Month
Energy Charges For the first 50 units: 700 paise per unit
For the balance units: 800 paise per unit
Approved Tariff for Demand based tariff (Optional)where sanctioned

load is above 5 kW but below 50 kW

Fixed Charges per Rs.65 per KW
Month
Energy Charges For the first 50 units: 700 paise per unit
For the balance units: 800 paise per unit
4. LT4-Irrigation Pump Sets:
clii
The existing and proposed tariff for LT4 (a) are as follows:
LT-4 (a) Irrigation Pump Sets

Applicable to IP sets upto and inclusive of 10 HP
Details Existing as per 2016 Proposed by BESCOM
Tariff Order
Fixed charges per Month Nil Nil
Energy charges CDT 286paise per unit Free (In case GoK does not
release the subsidy in
advance, CDT of 434paise
per unit will be demanded
and collected from
consumers)
Commission’s Decision
The Government of Karnataka has extended free supply of power to
farmers as per Government Order No. EN 55 PSR 2008 dated
04.09.2008. As per this policy of GoK, the entire cost of supply to IP sets
up to and inclusive of 10 HP is being borne by the GoK through tariff
subsidy. In view of this, all the consumers under the existing LT-4(a) tariff
are covered under free supply of power.
Considering the cross subsidy contribution from categories other than

IP Sets and BJ/KJ Categories, the Commission determines the tariff for
IP Sets under LT4(a) category as follows:
Approved CDT for IP Sets for FY18
Particulars BESCOM
Approved ARR in Rs. Crore 16914.19

Revenue from other than IP & BJ/KJ
14772.95
installations in Rs. Crore
Amount to be recovered from IP & BJ/KJ
2141.24
installations in Rs. Crore
Approved Sales to BJ/KJ installations in MU 130.37
Revenue from BJ/KJ installations at Average
84.48
Cost of supply in Rs. crore
Amount to be recovered from IP Sets
2056.76
category in Rs. crore
Approved Sale to IP Sets in MU 6157.95
Commission Determined Tariff (CDT) for IP
3.34
set Category for FY18 in Rs/Unit
cliii
Accordingly, the Commission decides to approve tariff of Rs.3.34 per
unit as CDT for FY18 for IP Set category under LT4 (a). In case the GoK
does not release the subsidy in advance, a tariff of Rs.3.34 per unit shall
be demanded and collected from these consumers.
Approved by the Commission

LT-4 (a) Irrigation Pump Sets
Applicable to IP sets up to and inclusive of 10 HP
Fixed charges per Month Nil*
Energy charges
CDT (Commission Determined Tariff):
334 paise per unit
* In case the GoK does not release the subsidy in advance, a tariff of
Rs.3.34 per unit shall be demanded and collected from these
consumers.
The Commission has been issuing directives to ESCOMs for conducting

Energy Audit at the Distribution Transformer Centre (DTC)/feeder level
for properly assessment of distribution losses and to enable detection
and prevention of commercial loss. In view of substantial progress in
implementation of feeder segregation under NJY scheme, the ESCOMs
were also directed to submit IP set consumption on the basis of the
meter readings of the 11 kV feeders at the substation level duly
deducting the energy losses in 11kV lines, distribution transformers & LT
lines, in order to compute the consumption of power by IP sets
accurately. Further, in the Tariff Order 2016, the ESCOMs were also
directed to take up enumeration of IP sets, 11 KV feeder-wise by
capturing the GPS co-ordinates of each live IP set in their
jurisdiction. In this regard, the Commission has noted that the ESCOMs
have complied partly with these directions and they have initiated
measures to achieve full compliance. The ESCOMs need to ensure full
compliance as this has direct impact on their revenues and tariff
payable by other categories of consumers.
cliv
For the forgoing reasons, the Commission directs the ESCOMs as
follows:
The ESCOMs shall manage supply of power to the IP sets for the FY18,
so as to ensure that it is within the quantum of subsidy committed by
the GoK. They shall procure power which is proportional to such supply.
In case the ESCOMs opt to supply power to the IP sets in excess of the
quantum corresponding to the amount of subsidy the GoK has assured
to be released for FY18, the difference in the amount of subsidy relating
to such supply shall be claimed from the GoK. If the difference in
subsidy is not paid by the GoK, the same has to be collected from the
IP set consumers.
LT4 (b) Irrigation Pump Sets above 10 HP:
BESCOM’s Proposal
The Existing and proposed tariff for LT-4(b) are as follows:
LT-4 (b) Irrigation Pump Sets:
Applicable to IP Sets above 10 HP
Order
Fixed charges per Rs.40 per HP Rs.40 per HP
Month
Energy charges for 280 paise per unit 428 paise per unit
the entire
consumption
The existing and proposed tariff for LT4(c) are as follows:
LT-4 (c) (i) - Applicable to Private Horticultural Nurseries, Coffee, Tea

& Rubber plantations up to & inclusive of 10 HP

Order
Month
Energy charges for 280 paise per unit 428 paise per unit
the entire
consumption
LT-4 (c) (ii) - Applicable to Private Horticultural Nurseries, Coffee, Tea &
Rubber plantations above 10 HP
Order
clv
Month
Energy charges for 280paise per unit 428paise per unit
the entire
consumption
Approved Tariff:
The Commission decides to revise the tariff in respect of these
categories as shown below:
LT-4 (b) Irrigation Pump Sets:
Applicable to IP Sets above 10 HP
Fixed charges per Month Rs.50 per HP
Energy charges for the entire 300 paise/unit
consumption
LT4(c) (i) - Applicable to Horticultural Nurseries,

Coffee, Tea &Rubber plantations up to & inclusive of 10 HP
Energy charges 300 paise / unit
LT4 (c)(ii) - Applicable to Horticultural Nurseries, Coffee, Tea&

Rubber plantations above 10 HP
Energy charges 300 paise/unit
5. LT5 Installations-LT Industries:

The existing and proposed tariffs are given below:
clvi
LT-5 (a) LT Industries:
Applicable to Bruhat Bangalore Mahanagara Palike (BBMP) and
Other Municipal Corporation areas
i) Fixed charges
Fixed i) Rs. 35 per HP for 5 HP & i) Rs. 35 per HP for 5 HP & below
charges below
per Month ii) Rs. 35 per HP for above 5 HP ii) Rs. 35 per HP for above 5 HP &
& below 40 HP below 40 HP
iii) Rs. 45 per HP for 40 HP & iii) Rs. 45 per HP for 40 HP &
above but below 67 HP above but below 67 HP
iv)Rs. 110 per HP for 67 HP & iv)Rs. 110 per HP for 67 HP &
above above
Demand based Tariff (Optional)
Details Description Existing Tariff as per Proposed by

2016 Tariff Order BESCOM
Fixed Above 5 HP and less Rs.55 per KW of billing Rs.55 per KW of
Charg than 40 HP demand billing demand
es per 40 HP and above but Rs.75 per KW of billing Rs.75 per KW of
Month less than 67 HP demand billing demand
67 HP and above Rs.160 per KW of Rs.160 per KW of
billing demand billing demand
ii) Energy Charges

Tariff Order
For the first 500 units 510paise per unit 658paise/ unit
For the balance 630paise per unit 778paise /unit
units
clvii
LT-5 (b) LT Industries:
Applicable to all areas other than those covered under LT-5(a)
i) Fixed charges

Fixed i)Rs.30 per HP for 5 HP & i) Rs.30 per HP for 5 HP &
Charges per below below
Month ii) Rs.35 per HP for above 5 HP ii) Rs.35 per HP for above 5
& below 40 HP HP & below 40 HP
iii) Rs.40 per HP for 40 HP & iii) Rs.40 per HP for 40 HP &
above but below 67 HP above but below 67 HP
iv)Rs.100 per HP for 67 HP & iv)Rs.100 per HP for 67 HP &
above above
Demand based Tariff (optional)

Details Description Existing Tariff as per Proposed by
2016 Tariff Order BESCOM
Fixed Above 5 HP and Rs.50 per KW of Rs.50 per KW of
Charges less than 40 HP billing demand billing demand
per Month 40 HP and above Rs.65 per KW of Rs.65 per KW of
but less than 67 HP billing demand billing demand
67 HP and above Rs.150 per KW of Rs.150 per KW of
billing demand billing demand
ii) Energy Charges

Tariff Order
For the first 500 units 485paise per unit 633paise/ unit
For the next 500 units 570paise per unit 718paise/ unit
For the balance units 600paise per unit 748paise/ unit
Existing ToD Tariff for LT5 (a) & (b): At the option of the
consumers
ToD Tariff
Time of Day Increase (+ )/ reduction (-) in energy
charges over the normal tariff applicable
22.00 Hrs to 06.00 Hrs (-) 125 paise per unit
06.00 Hrs to 18.00 hrs 0
clviii
18.00 Hrs to 22.00 Hrs (+) 100 paise per unit
Proposed ToD Tariff for LT5 (a) & (b): At the option of the consumers
ToD Tariff
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 hrs (+) 100 paise per unit
22.00 Hrs to 06.00 Hrs 0
Commission’s Decision:
Time of the Day Tariff:
The decision of the Commission in its earlier Tariff Orders, providing for
mandatory Time of Day Tariff for HT2(a), HT2(b) and HT2(c) consumers
with a contract demand of 500 KVA and above is continued. The
optional ToD will continue as existing for HT2(a), HT2(b) and HT2(c)
consumers with contract demand of less than 500 KVA. Further, for LT5
and HT1 consumers, the optional ToD is continued as existing.
The Commission has decided to continue with two tier tariff structure
introduced in the previous Tariff Orders, which are as follows:
i) LT5 (a): For areas falling under BBMP and Municipal Corporations
ii) LT5 (b): For areas other than those covered under LT5 (a) above.
Approved Tariff:
The Commission approves the tariff under LT 5 (a) and LT 5 (b) as given
below:
Approved Tariff for LT 5 (a):

Applicable to areas under BBMP and other Municipal Corporations
i) Fixed charges

Fixed i) Rs.40 per HP for 5 HP & below
Charges per ii) Rs.45 per HP for above 5 HP & below 40 HP
Month iii) Rs.60 per HP for 40 HP & above but below 67 HP
iv) Rs.120 per HP for 67 HP & above
Demand based Tariff (optional)
clix
Fixed Above 5 HP and less than 40 Rs.65 per KW of billing
Charges per HP demand
Month 40 HP and above but less Rs.90 per KW of billing
than 67 HP demand
67 HP and above Rs.170 per KW of billing
demand
ii) Energy Charges

For the first 500 units 525 paise/unit
For the balance units 650 paise/ unit
Approved Tariff for LT 5 (b):

Applicable to all areas other than those covered under LT-5(a)
i) Fixed charges
Details Approved Tariff

Fixed i) Rs.35 per HP for 5 HP & below
Charges ii) Rs.40 per HP for above 5 HP & below 40 HP
per Month iii) Rs.55 per HP for 40 HP & above but below 67 HP
iv)Rs.110 per HP for 67 HP & above
ii) Demand based Tariff (optional)

Details Description Approved Tariff
Fixed Charges per Above 5 HP and Rs.55 per KW of billing
Month less than 40 HP demand
but less than 67 HP demand
demand
iii) Energy Charges
Details Approved tariff

For the first 500 units 500 paise/ unit
For the next 500 units 590 paise/ unit
For the balance units 620 paise/unit
As discussed earlier in this Chapter, the approved ToD Tariff for LT5 (a)
& (b): At the option of the consumers
ToD Tariff

10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 hrs (+) 100 paise per unit
clx
6. LT6 Water Supply Installations and Street Lights:
The existing and the proposed tariffs are given below:
LT-6(a) : Water Supply

Order
Fixed charges per Rs.45/HP/month Rs.45/HP/month
Month
Energy charges 390 paise/unit 538 paise/unit
LT-6 (b) : Public Lighting

Order
Fixed charges per Rs.60/KW/month Rs.60/KW/month
Month
Energy charges 550 paise/unit 698 paise/unit
without LED bulbs
Energy charges for 450 paise/unit 598 paise/unit
LED / Induction
As discussed earlier in this Chapter, the Commission has not accepted

the proposal to charge double the tariff for the streetlights installations
not using LED bulbs. Hence, Commission approves the tariff for these
categories are as follows:
Tariff Approved by the Commission for LT-6 (a): Water supply
Fixed Charges per Rs.55/HP/month
Month
Tariff Approved by the Commission for LT-6 (b): Public Lighting
Fixed charges per Rs.70 /KW/month
Month
for LED / Induction
Lighting
7. LT 7- Temporary Supply & permanent supply to Advertising Hoardings:
The existing rate and the proposed rate are given below:
clxi
Tariff Schedule LT-7(a)
Applicable to Temporary power Supply for all purposes.

Tariff Order
a) Less than 67 Energy charge at Energy charge at 1098paise

HP: 950paise per unit per unit subject to a weekly
subject to a weekly minimum of Rs.170 per KW of
minimum of Rs.170 per the sanctioned load.
KW of the sanctioned
load.
TARIFF SCHEDULE LT-7(b)

Applicable to power supply to Hoardings & Advertisement boards
on Permanent connection basis

Tariff Order
a) Less than 67 Fixed Cost Rs.50 per Fixed Cost Rs.50 per KW/
HP: KW/ month of the month of the sanctioned load.
sanctioned load.
Energy charge at 950 Energy charge at 1098 paise
paise per unit per unit
As decided in the previous Tariff Order, the tariff specified for

installations with sanctioned load / contract demand above 67 HP
shall be covered under the HT temporary tariff category under HT5.
With this, the Commission decides to approve the tariff for LT-7
category as follows:
TARIFF SCHEDULE LT-7(a)
Applicable to Temporary Power Supply for all purposes.
LT 7(a) Details Approved Tariff

Temporary Power Less than 67 HP: Energy charges at 1000 paise / unit
Supply for all subject to a weekly minimum of Rs.190
purposes. per KW of the sanctioned load.
clxii
Applicable to Hoardings & Advertisement boards, Bus Shelters with
Advertising Boards, Private Advertising Posts / Sign boards in the
interest of public such as Police Canopy Direction boards, and other
sign boards sponsored by Private Advertising Agencies / firms on
permanent connection basis.
LT 7(b) Details Approved Tariff

Power supply on Less than 67 HP: Fixed Charges at Rs.60 per KW / month
permanent
Energy charges at 1000 paise / unit
connection basis
H.T. Categories:
Time of Day Tariff (ToD)
The Commission decides to continue the mandatory Time of Day Tariff

for HT2 (a),HT-2(b) and HT2(c) consumers with a contract demand
of 500 KVA and above. Further, the optional ToD will continue as
existing for HT2 (a), HT-2(b) and HT2 (c) consumers with contract
demand of less than 500 KVA. The details of ToD tariff are indicated
under the respective tariff category.
8. HT1- Water Supply & Sewerage
The existing and proposed tariff are as given below:
The Existing and the proposed tariff – HT-1 Water Supply and Sewerage
Installations
Sl. Details Existing tariff as per Proposed Tariffs by As per revised

No. 2016Tariff Order BESCOM dated proposal by BESCOM
30.11.2016 dated 16.02.2017
1 Demand Rs.190 / kVA of billing Rs.190 / kVA for billing Rs.250 / kVA for billing
charges demand / month demand / month demand / month
2 Energy charges 450 paise per unit 598 paise per unit 547 paise per unit
Existing ToD tariff to HT-1 tariff to Water Supply & Sewerage
installations at the option of the consumer
Time of day Increase (+) / reduction (-) in the energy
22.00 Hrs to 06.00 Hrs next day (-) 125 Paise per unit
06.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs (+) 100 Paise per unit
Proposed ToD Tariff to HT-1 category:
clxiii
10.00 Hrs to 18.00 Hrs 0
22.00 Hrs to 06.00 Hrs 0
Commission’s decision:
As discussed earlier in this chapter, the Commission
approves the tariff for HT 1 Water Supply & Sewerage
category as below:
Details Approved Tariff for HT 1

Demand Rs.200 / kVA of billing demand / month
charges
Energy charges 485 paise/ unit
As discussed earlier in this chapter, the approved ToD tariff to HT-1 tariff to
Water Supply & Sewerage installations at the option of the consumer is as
follows:
06.00 Hrs. to 10.00 hours (+) 100 paise per unit
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs (+)100 paise per unit
22.00 Hrs to 06.00 Hrs next day (-) 100 paise per unit
9. HT2 (a) – HT Industries & HT 2(b) – HT Commercial

Existing & proposed tariff – HT – 2 (a) (i) – HT Industries

Applicable to Bruhat Bangalore Mahanagara Palike (BBMP)&Municipal
Corporation area
Details Existing tariff as Proposed Tariff by As per revised proposal
per Tariff Order BESCOM dated by BESCOM dated
2016 30.11.2016 16.02.2017
Demand charges Rs. 190 / kVA of Rs. 190 / kVA of billing Rs. 250 / kVA of billing
billing demand / demand / month demand / month
month
Energy charges
(i) For the first 625paise per unit 773paise per unit 708 paise per unit
one lakh units
(ii) For the 675paise per unit 823paise per unit 758 paise per unit
balance units
clxiv
Existing & proposed tariff – HT – 2 (a) (ii) - HT Industries
Applicable to areas other than those covered under HT-2(a)(i)
Details Existing tariff as Tariff Proposed by As per revised
per Tariff Order BESCOM dated proposal by BESCOM
2016 30.11.2016 dated 16.02.2017
Demand charges Rs. 180 / kVA of Rs. 180 / kVA of Rs. 250 / kVA of billing
billing demand / billing demand / demand / month
month month
Energy charges
(iii) For the first 620 paise per unit 768paise per unit 673 paise per unit
one lakh units
(iv) For the 660paise per unit 808paise per unit 713 paise per unit
balance units
Railway traction and Effluent Plants {both Under HT2 (a)(i) &
HT2a(ii)}
Details Existing tariff as per Tariff Proposed by As per revised proposal
Tariff order 2016 BESCOM dated by BESCOM dated
30.11.2016 16.02.2017
Demand charges Rs. 190 / kVA at billing Rs. 190 / kVA of billing Rs. 250 / kVA of billing
demand / month demand / month demand / month
Energy charges 590paise per unit for 738 paise per unit for all 668 paise per unit for all
all the units the units the units
Existing ToD Tariff for HT-2(a)
22.00 Hrs to 06.00 Hrs next day (- )125 Paise per unit
06.00 Hrs to 18.00 Hrs 0
Proposed ToD Tariff for HT-2(a)

10.00 Hrs to 18.00 Hrs 0
22.00 Hrs to 06.00 Hrs 0
Tariff for Metro Rail Corporation
Details Existing tariff as per Tariff Proposed by As per revised

Tariff Order 2016 BESCOM dated proposal by BESCOM
30.11.2016 dated 16.02.2017
Demand charges Rs. 190 / kVA of billing Rs. 190 / kVA of billing Rs. 250 / kVA of billing
Energy charges 570paise per unit for 718paise per unit for 648 paise per unit for
all the units all the units all the units for all the
units.
clxv
Approved Tariff for HT – 2 (a) (i) :
As discussed earlier in this chapter, the Commission approves the
tariff for HT 2(a) category as below:
i) Approved Tariff for HT2(a)(i)

Applicable to areas under BBMP and Municipal Corporations
Demand charges Rs.210 / kVA of billing demand / month
Energy charges
For the first one lakh units 665 paise/ unit
ii) Approved Tariff for HT – 2 (a) (ii)

Applicable to areas other than those covered under HT-2(a) (i)

Energy charges
For the first one lakh units 660 paise/ unit
As discussed earlier in this chapter, the approved ToD tariff to HT2(a)(i) &
(ii) tariff.
10.00 Hrs to 18.00 Hrs 0
22.00 Hrs to 06.00 Hrs (-)100 paise per unit
iii) Railway Traction & Effluent Treatment Plants under both HT2a(i) & HT2
a(ii)

Demand charges Rs. 210 / kVA of billing demand / month
Energy charges 620 paise / unit for all the units
clxvi
iv) Approved Tariff for Metro Rail Corporation
Details Tariff Approved by the Commission

Demand Charges Rs.210 per KVA of the billing
demand / month
Energy Charges for entire consumption 600 paise per unit
10. HT-2 (b) HT Commercial
Existing and proposed tariff HT – 2 (b) (i) HT Commercial
Applicable to BBMP& Municipal Corporation Area
Details Existing tariff as per Tariff Proposed by BESCOM As per revised
Tariff Order 2016 dated 30.11.2016 proposal by BESCOM
dated 16.02.2017
Demand charges Rs.210 / kVA of billing Rs.210 / kVA of billing Rs.250 / kVA of billing
Energy charges
(i) For the first 805paise per unit 953paise per unit 888 paise per unit
two lakh units
(ii)For the 835paise per unit 983paise per unit 918 paise per unit
balance units
Existing and proposed tariff HT – 2 (b) (ii) HT Commercial

Applicable to areas other than those covered under HT-2(b) (i)
30.11.2016 dated 16.02.2017
Energy charges
(i) For the first two 785paise per unit 933paise per unit 872 paise per unit
lakh units
(ii)For the balance 815paise per unit 963paise per unit 902 paise per unit
units
Existing ToD Tariff for HT-2(b)
06.00 Hrs to 18.00 Hrs 0
Proposed ToD Tariff for HT-2(b)

clxvii
10.00 Hrs to 18.00 Hrs 0
22.00 Hrs to 06.00 Hrs 0
The Commission has taken note of the issue raised by the consumer of
Diagnostic centres and their request to classify under HT-2(c)(ii)
category. The Commission has examined the issue in detail and
decides to classify the HT power supply to Diagnostic centres running
on commercial lines, under HT-2(b) category.
As discussed earlier in this chapter, the Commission approves the

following tariff for HT 2 (b) consumers:
Approved tariff for HT – 2 (b) (i)

Applicable to areas under BBMP& Municipal Corporations
Energy charges
(i) For the first two lakh units 845 paise per unit
(ii) For the balance units 855 paise per unit
Approved tariff for HT – 2 (b) (ii) - HT Commercial

Applicable to all areas other than those covered under HT-2(b) (i)
above
Energy charges
(i) For the first two lakh units 825 paise per unit
Note: The above tariff under HT2 (b) is not applicable for construction of new
industries. Such power supply shall be availed only under the temporary
category HT5.
Approved ToD Tariff for HT-2(b)(i) & (ii)

10.00 Hrs to 18.00 Hrs 0
22.00 Hrs to 06.00 Hrs next day (-)100 paise per unit
11. HT – 2 (c) – Applicable to Hospitals and Educational Institutions:
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The existing and proposed tariff are given below:
Existing and proposed tariff for HT – 2 (c) (i)
Applicable to Government Hospitals & Hospitals run by Charitable Institutions & ESI
Hospitals
and
Universities, Educational Institutions belonging to Government, Local Bodies and
Aided Institutions and Hostels of all Educational Institutions
30.11.2016 dated 16.02.2017
Energy charges
(i) For the first one 600 paise per unit 748 paise per unit 703 paise per unit
lakh units
(ii) For the balance 650 paise per unit 798 paise per unit 753 paise per unit
units
Existing and proposed tariff for HT – 2 (c) (ii) –

Applicable to Hospitals and Educational Institutions other than those covered under
HT2(c) (i)
Details Existing tariff as per Tariff Proposed by As per revised proposal

Tariff Order 2016 BESCOM dated by BESCOM dated
30.11.2016 16.02.2017
Demand charges Rs. 180 / kVA of Rs. 180 / kVA of Rs. 250 / kVA of billing
billing demand / billing demand / demand / month
month month
Energy charges
(i) For the first one 700 paise per unit 848paise per unit 753 paise per unit
lakh units
(ii) For the balance 750 paise per unit 898paise per unit 803 paise per unit
units
Existing ToD Tariff for HT-2(c)(i) & (ii)

06.00 Hrs to 18.00 Hrs 0
Proposed ToD Tariff for HT-2 HT-2(c)(i) & (ii)

10.00 Hrs to 18.00 Hrs 0
22.00 Hrs to 06.00 Hrs 0
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The Commission approves the following tariff for HT2(c) consumers.
Approved tariff for HT – 2 (c) (i)

Applicable to Government Hospitals, Hospitals run by Charitable Institutions, ESI
Hospitals,
Universities and Educational Institutions belonging to Government& Local Bodies,
Aided Educational Institutions and Hostels of all Educational Institutions

Demand charges Rs.200/ kVA of billing demand / month
Energy charges
(i) For the first one lakh units 640 paise per unit
Approved tariff for HT – 2 (c) (ii)
Applicable to Hospitals/Educational Institutions other than those covered under
HT2(c) (i)

Energy charges
(i) For the first one lakh units 740 paise per unit
As discussed earlier in this Chapter, the approved ToD for Tariff to HT-2(c)
(i) & (ii)
10.00 Hrs to 18.00 Hrs 0
22.00 Hrs to 06.00 Hrs next day (-)100 paise per unit
12. HT-3(a) Lift Irrigation Schemes under Government Departments /

Government owned Corporations/ Lift Irrigation Schemes under Pvt
./Societies:
The existing and proposed tariff are given below:

Existing and proposed tariff for HT – 3 (a) –Lift Irrigation Schemes
HT 3(a) (i) Applicable to LI Schemes under Government Departments /

Government owned Corporations
Details Existing charges as per Tariff Proposed charges by
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Order 2016 BESCOM
Energy 200 paise / unit 348 paise / unit
charges/ Subject to an annual minimum Subject to an annual
Minimum of Rs.1120 per HP / annum minimum of Rs. 1120
charges per HP / annum
HT 3(a) (ii) Applicable to Pvt. LI Schemes and Lift Irrigation Societies:

Fed through Express / Urban feeders
Details Existing Tariff as per Tariff Proposed by BESCOM

Order 2016
Fixed charges Rs. 40 / HP / Month of Rs. 40 / HP / Month of
sanctioned load sanctioned load
Energy charges 200paise / unit 348paise / unit
HT 3(a) (iii) Applicable to Pvt. LI Schemes and Lift Irrigation Societies:

other than those covered under HT-3 (a)(ii)
Details Existing Tariff as per Tariff Proposed by BESCOM

Order 2016
Fixed charges Rs.20 / HP / Month of Rs.20 / HP / Month of
Energy charges 200paise / unit 348paise / unit
The Commission approves the following tariff for HT3(a) consumers:
Approved tariff for HT 3 (a) (i)
Applicable to LI schemes under Govt. Dept. / Govt. owned Corporations
Energy charges / 225 paise/ unit subject to an annual

Minimum charges minimum of Rs. 1240 per HP / annum
Approved tariff for HT 3 (a) (ii)

Applicable to Private LI Schemes and Lift Irrigation Societies fed through
express / urban feeders
Fixed charges Rs.50 / HP / Month of sanctioned load
Approved tariff for HT 3 (a) (iii)

Applicable to Private LI Schemes and Lift Irrigation Societies
other than those covered under HT 3 (a) (ii)
Fixed charges Rs.30 / HP / Month of sanctioned load
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13. HT3 (b) Irrigation & Agricultural Farms, Government Horticulture farms,
Private Horticulture Nurseries, Coffee, Tea, Coconut & Arecanut
Plantations:
The existing and the proposed tariff are given below:
HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,

Private Horticulture Nurseries, Coffee, Tea, Coconut & Arecanut
Plantations:
Details Existing Tariff Order 2016 Proposed tariff by BESCOM
Energy charges / 400 paise / unit subject to 548 paise / unit subject to
minimum an annual minimum of an annual minimum of
charges Rs.1120 per HP of Rs.1120 per HP of
The Commission approves the tariff for this category as indicated

below:
Approved Tariff
HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,
Private Horticulture Nurseries, Coffee, Tea, Rubber, Coconut & Arecanut
Plantations:
Energy charges / 425 paise / unit subject to an
minimum charges annual minimum of Rs.1240 per
HP of sanctioned load
14. HT4- Residential Apartments/ Colonies:
The existing and the proposed tariff for this category are given below:
Existing and proposed tariff for HT – 4 - Residential Apartments/

Colonies
HT – 4 Applicable to all areas.
Details Existing Tariff Order Tariff Proposed by As per revised

2016 BESCOM dated proposal by
30.11.2016 BESCOM dated
16.02.2017
Demand charges Rs.110 / kVA of billing Rs.110 / kVA of Rs.250 / kVA of
demand billing demand billing demand
Energy charges 585 paise per unit 733 paise/ unit 648 paise/ unit
clxxii
As discussed earlier in this chapter, the Commission approves the tariff
for this category as indicated below:
Approved tariff
HT – 4 Residential Apartments/ Colonies Applicable to all areas
Demand Rs.120 / kVA of billing demand

charges
Energy 620 paise/ unit
charges
15. TARIFF SCHEDULE HT-5

HT – 5 – Temporary supply
67 HP and above: Existing Proposed

Fixed charges / Rs.220/HP/month for the Rs.220/HP/month for the
Demand Charges entire sanction load / entire sanction load /
contract demand contract demand
Energy Charge 950 paise / unit (weekly 1098 paise / unit (weekly
minimum of Rs.170/- per minimum of Rs.170/- per
KW is not applicable) KW is not applicable)
HT – 5(a) – Temporary power supply to Bangalore
International Exhibition Centre
67 HP and above: Existing Proposed
Fixed charges /
Demand Charges Not Applicable Not Applicable
Energy Charge 1050 paise / unit 1198 paise / unit
Commission’s Views/Decisions:
TARIFF SCHEDULE HT-5
(i) As approved in the Commission’s Tariff Order dated 6th May,

2013, this Tariff is applicable to 67 HP and above hoardings and
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advertisement boards and construction power for industries
excluding those category of consumers covered under HT2(b)
Tariff schedule availing power supply for construction power for
irrigation and power projects and also applicable to power
supply availed on temporary basis with the contract demand of
67 HP and above of all categories.
Approved Tariff for HT – 5 – Temporary supply

67 HP and above: Approved Tariff
Fixed Charges / Demand Rs.240 /HP/month for the entire
Charges sanction load / contract demand
Energy Charges 1000 paise / unit
TARIFF SCHEDULE HT-5 (a)
Applicable to power supply availed on temporary basis with the

contract demand of 67 HP and above by Bangalore International
Exhibition Centre.
Approved Tariff for HT-5(a) – Temporary supply

Fixed Charges / Demand Not Applicable
Charges
The Approved Tariff schedule for FY18 is enclosed in Annex – IV of this

Order.
6.7 Wheeling and Banking Charges:

6.7.1 BESCOM Proposal:
BESCOM in its tariff filing have proposed the Wheeling charges
depending upon the point of injection and point of drawal, as
indicated below:
Injection Point HT LT
Drawal Point
HT 19.30 [3.61%] 64.35 [9.06%]
LT 64.35 [9.06%] 45.04 [5.45%]
Note: Figures in brackets are applicable loss.
BESCOM has stated that the above wheeling charges be made

applicable to all the Open Access/Wheeling transactions for using their
clxxiv
network, except for energy wheeled from NCE sources to the
consumers in the State.
The approach of the Commission regarding wheeling & banking
charges is discussed in the following paragraphs:
The Commission has considered the approved ARR pertaining to
distribution wires business and has proceeded determining the
wheeling charges as detailed below:
6.7.2 Wheeling within BESCOM Area:
The allocation of the distribution network costs to HT and LT networks for
determining wheeling charges is done in the ratio of 30:70, as was
being done earlier. Based on the approved ARR for distribution
business, the wheeling charges to each voltage level is worked out as
under:
TABLE- 6.2
Wheeling Charges
Distribution ARR-Rs. Crs 1482.95
Sales-MU 26109.16
Wheeling charges- paise/unit 56.80
Paise/unit
HT-network 17.04
LT-network 39.76
In addition to the above, the following technical losses are applicable

to all open access/wheeling transactions:
Loss allocation % loss
HT 2.58
LT 8.88
Note: Total loss is allocated to HT, LT & Commercial loss based on energy flow
diagram furnished by BESCOM.
The actual wheeling charges payable (after rounding off) will depend
upon the point of injection & point of drawal as under:
clxxv
paise/unit
Injection point HT LT
Drawal point
HT 17(2.58%) 57(11.46%)
LT 57(11.46%) 40(8.88%)
Note: Figures in brackets are applicable loss
The wheeling charges as determined above are applicable to all the

open access or wheeling transactions for using the BESCOM network,
except for energy transmitted or wheeled from renewable sources to
the consumers within the State.
6.7.3 WHEELING OF ENERGY USING TRANSMISSION NETWORK OR NETWORK OF

MORE THAN ONE LICENSEE
In case, the wheeling of energy [other than RE sources wheeling to

consumers in the State] involves usage of Transmission network or
network of more than one licensee, the charges shall be as indicated
below:
i. If only transmission network is used, transmission charges

determined by the Commission shall be payable to the
Transmission Licensee.
ii. If the Transmission network and the ESCOMs’ network are used,
Transmission Charges shall be payable to the Transmission
Licensee. Wheeling Charges shall be payable to the ESCOM
where the power is drawn and it shall be shared equally among
the ESCOMs whose networks are used.
Illustration:
If a transaction involves transmission network & BESCOM’s
network and 100 units is injected, then at the drawal point the
consumer is entitled for 85.56 units, after accounting for
Transmission loss of 3.37% & BESCOM’s technical loss of 11.46%.
The Transmission charge in cash as determined in the

Transmission Tariff Order shall be payable to KPTCL & Wheeling
Charge of 57 paise per unit shall be payable to BESCOM. In
clxxvi
case more than one ESCOM is involved, the above 57 paise
shall be shared by all the ESCOMs involved.
iii. If ESCOMs’ network only is used, the Wheeling Charges is

payable to the ESCOM where the power is drawn and it shall be
shared equally among the ESCOMs whose networks are used.
Illustration:
If a transaction involves injection to MESCOM’s network & drawl
at BESCOM’s network, and 100 units is injected, then at the
drawl point the consumer is entitled for 88.54 units, after
accounting BESCOM’s technical loss of 11.46%.
The Wheeling charge of 57 paise per unit payable to BESCOM
shall be equally shared between MESCOM & BESCOM.
6.7.4 CHARGES FOR WHEELING OF ENERGY BY RE SOURCES (NON-REC ROUTE)

TO CONSUMERS IN THE STATE
The separate Orders issued by the Commission from time to time in

the matter of wheeling and banking charges for RE sources (non-
rec route) wheeling energy to consumers in the State shall be
applicable.
6.7.5 CHARGES FOR WHEELING ENERGY BY RE SOURCES FROM THE STATE TO A

CONSUMER/OTHERS OUTSIDE THE STATE AND FOR THOSE OPTING FOR
RENEWABLE ENERGY CERTIFICATE [REC]
In case the renewable energy is wheeled from the State to a

consumer or others outside the State, the normal wheeling charges
as determined in para 6.7.2 and 6.7.3 of this Order shall be
applicable. For Captive RE generators including solar power
projects opting for RECs, the wheeling and banking charges as
specified in the Orders issued by the Commission from time to time
shall be applicable.
6.8 BANKING CHARGES AND ADDITIONAL SURCHARGE
BESCOM in its tariff filing had requested the following:

a. To allow the banking facility for a period of 3-months from the date
of generation.
clxxvii
b. Not to allow withdrawal of banked power during peak and ToD
hours.
c. If banked energy is not utilized within the period of three months
from the date of power banked, it shall automatically lapse and
no charges shall be paid.
d. To levy additional surcharge on OA consumers who draw power
from utility even after opting for OA.
The Commission in its preliminary observations had directed BESCOM

to justify the above requests in terms of detailed financial impact
analysis.
BESCOM in its replies to the preliminary observations had furnished

month-wise details of energy consumed out of the total wheeled
energy for only one entity namely RAMCO Cements Ltd., and has
stated that during the crucial period of second half of the year, RE
generators draw banked energy and that there is a difference in the
cost of purchase during second half and first half of the year. The
Commission notes that BESCOM has not carried out any financial
impact analysis. Therefore, the Commission in its further observations
had requested BESCOM to analyse the financial impact. BESCOMS in
its reply to the rejoinder has stated that it has worked out the financial
impact for 11 numbers of IPP’s and HT consumers for the period of
FY15, FY16 and FY17 and has submitted a statement. As per the
statement BESCOM has worked out loss of Rs.12 Crores in FY15, Rs. 9.8
Crores in FY16 and Rs. 4.85 Crores in FY17 under the assumption that it
would have sold 1.94 million units in FY15, 1.84 million units in FY16 and
1.13 million units in FY17.
The Commission notes that all the ESCOMs except CESC, have filed
separate petitions seeking modifications to the existing banking
facility. Further, all the ESCOMs have filed petitions separately to
introduce additional surcharge. The above issues pertaining to
banking facility and additional surcharge are being dealt separately
by the Commission in those petitions. Till such time the Orders are
clxxviii
passed in those petitions, the existing banking facility shall be
continued and no additional surcharge is payable.
6.9 CROSS SUBSIDY SURCHARGE[CSS]:
BESCOM in its tariff petition has worked out the Cross Subsidy
surcharge as per the Tariff Policy-2016 and has worked out the
surcharges as indicated below:
Paise/unit
Voltage HT-1 HT-2a HT-2b HT-2C HT-3b HT-4 HT-5
Level
66KV & 57.62 177.09 211.89 183.88 169.60 153.30 240.49
above
HT level- 15.31 177.09 211.89 183.88 169.60 153.30 240.49
11KV/33KV
The determination of cross subsidy surcharge by the Commission is

discussed in the following paragraphs:
The Commission in its MYT Regulations has specified the methodology

for calculating the CSS as per Tariff Policy 2006. Meanwhile, the
Central Government has issued the new Tariff Policy 2016, wherein a
revised methodology has been specified for determining CSS. So far,
the Commission, for determining the CSS had adopted the
methodology specified in the earlier Tariff Policy of 2006. However,
considering that such Tariff Policy has been replaced now by the Tariff
Policy-2016 and that a few ESCOMs including BESCOM have sought
determination of CSS under such new Tariff Policy, the Commission
decides to adopt the methodology specified in the latest Tariff Policy
2016 for determination of CSS in this Tariff Order for FY18. Action shall
be taken to amend the relevant Regulations for adoption of the
revised methodology for determination of CSS. Based on this
methodology, the category-wise cross subsidy will be as indicated
below:
Paise/unit
Average Average Cross subsidy Cross 20% of
Category Cost of Cost of surcharge subsidy tariff
Particulars
Tariff supply @ supply at HT paise/unit @ 66 surcharge payable
66 kV and level** kV & above paise/unit @ by
clxxix
above level as per HT level as relevant
level* formula per formula category
1 2 3 4 8 9 10
HT-1
Water 536.76 410.53 445.45 126.23 91.32 107.35
Supply
HT-2a(i) 410.53 445.45
794.49 383.96 349.04 158.90
Industries
HT-2a(ii) 410.53 445.45
762.23 351.70 316.79 152.45
Industries
HT-2b(i) 410.53 445.45
955.17 544.64 509.73 191.03
Commercial
HT-2b(ii) 410.53 445.45
962.09 551.56 516.64 192.42
Commercial
HT-2 (C)(i) 735.84 410.53 445.45 325.31 290.40 147.17
HT-2 (C)(ii) 819.70 410.53 445.45 409.17 374.25 163.94
HT3 (a)(i) 410.53 445.45
225.48 -185.05 -219.97 45.10
Lift Irrigation
HT3 (a)(ii) 410.53 445.45
318.06 -92.47 -127.38 63.61
Lift Irrigation
HT3 (a)(iii) 410.53 445.45
262.67 -147.86 -182.77 52.53
Lift Irrigation
HT3 (b) 410.53 445.45
Irrigation &
426.55 16.02 -18.90 85.31
Agricultural
Farms
HT-4 410.53 445.45
Residential 662.71 252.18 217.27 132.54
Apartments
HT5 410.53 445.45
1642.58 1232.05 1197.14 328.52
Temporary
*Includes weighted average power purchase costs of 347.33Ps/unit, transmission charges of

51.09/unit and transmission losses of 3.37%.
** Includes weighted average power purchase costs of 347.33Ps/unit, transmission charges of
51.09Ps/unit and transmission losses of 3.37%, HT distribution network / wheeling charges of
20.81Ps/unit and HT distribution losses of 3.77%.
Note: The carrying cost of regulatory asset for the current year is zero.
As per the Tariff Policy 2016, while limiting the CSS so as not to exceed
20% of the tariff applicable to relevant category, the CSS (after
rounding off to nearest paise) is determined as under:
Cross Subsidy Surcharge for FY18
Paise/unit
66 kV
HT level-11
Particulars &
kV/33kV
above
HT-1 Water Supply 107 91
HT-2a(i) Industries 159 159
HT-2a(ii) Industries 152 152
HT-2b(i) Commercial 191 191
HT-2b(ii) Commercial 192 192
HT-2 (C)(i) 147 147
HT-2 (C)(ii) 164 164
HT3 (a)(i) Lift Irrigation 0 0
HT3 (a)(ii) Lift Irrigation 0 0
clxxx
HT3 (a)(iii) Lift Irrigation 0 0
HT3 (b) Irrigation & 0
16
Agricultural Farms
HT-4 Residential Apartments 133 133
HT5 Temporary 329 329
Note: wherever CSS is negative, it is made zero
The cross subsidy surcharge determined in this order shall be

applicable to all open access/wheeling transactions in the area
coming under BESCOM. However, the above CSS shall not be
applicable to captive generating plant for carrying electricity to the
destination of its own use and for those renewable energy generators
who have been exempted from CSS by the specific Orders of the
Commission.
The Commission directs the Licensees to account the transactions
under open access separately.
6.10 Other Issues:
6.10.1 Tariff for Green Power:
In order to encourage generation and use of green power in the State,

the Commission decides to continue the existing Green Tariff of 50
paise per unit as the additional tariff over and above the normal tariff
to be paid by HT-consumers, who opt for supply of green power from
out of the renewable energy procured by distribution utilities over and
above their Renewable Purchase Obligation (RPO).
6.11 Other tariff related issues:
i) Rebate for use of Solar Water Heater:

While some of the ESCOMs have requested to discontinue the Solar
rebate to consumers, the consumers have requested to increase
the Solar Rebate. Since the use of Solar Water Heaters is
advantageous to both the ESCOMs and the consumers, the
Commission has decided to retain the existing rebate of 50 paise
per unit subject to a maximum of Rs.50 per installation per month
for use of solar water heaters.
ii) Prompt payment incentive:
clxxxi
The Commission had approved a prompt payment incentive at the
rate of 0.25% of the bills amount (i) in all cases of payment through
ECS; and (ii) in the case of monthly bill exceeding Rs.1,00,000/-
(Rs.one lakh), where payment is made 10 days in advance of due
date and (iii) advance payment of exceeding Rs.1000 made by the
consumers towards monthly bills. The Commission decides to
continue the same.
iii) Relief to Sick Industries:
The Government of Karnataka has extended certain reliefs for

revival/rehabilitation of sick industries under the New Industrial Policy
2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001. Further, the
Government of Karnataka has issued G.O No.CI2 BIF 2010, dated
21.10.2010. The Commission, in its Tariff Order 2002, had accorded
approval for implementation of reliefs to the sick industries as per the
Government policy and the same was continued in the subsequent
Tariff Orders. However, in view of issue of the G.O No.CI2 BIF 2010,
dated 21.10.2010, the Commission has accorded approval to the
ESCOMs for implementation of the reliefs extended to sick industrial
units for their revival / rehabilitation on the basis of the orders issued
by the Commissioner for Industrial Development and Director of
Industries & Commerce, Government of Karnataka.
iv) Power Factor:
The Commission in its previous order had retained the PF threshold

limit and surcharge, both for LT and HT installations at the levels
existing as in the Tariff Order 2005. The Commission has decided to
continue the same in the present order as indicated below:
LT Category (covered under LT-3, LT-4, LT-5 & LT-6 where motive
power is involved): 0.85
HT Category: 0.90
v) Rounding off of KW / HP:
clxxxii
In its Tariff Order 2005, the Commission had approved rounding off
of fractions of KW / HP to the nearest quarter KW / HP for the
purpose of billing and the minimum billing being for 1 KW / 1HP in
respect of all the categories of LT installations including IP sets. This
shall continue to be followed. In the case of street light installations,
fractions of KW shall be rounded off to the nearest quarter KW for
the purpose of billing and the minimum billing shall be for a quarter
KW.
vi) Interest on delayed payment of bills by consumers:
The Commission, in its previous Order had approved interest on

delayed payment of bills at 12% per annum. The Commission
decides to continue the same in this Order also.
vii) Security Deposit (3 MMD/ 2 MMD):

The Commission had issued the K.E.R.C. (Security Deposit)
Regulations, 2007 on 01.10.2007and the same has been notified in
the Official Gazette on 11.10.2007. The payment of security deposit
shall be regulated accordingly, pending orders of the Hon’ble High
Court in WP No.18215/2007.
viii) Mode of Payment by consumers:
The Commission, in its previous Order had approved revenue

payment in cash/cheque/DD of amounts up to and inclusive of
Rs.10,000/- and payment of amounts above Rs.10,000 to be made
only through cheque. The consumers can also make payment of
power bills through Electronic Clearing System(ECS)/ Credit card/
online E-payment up to the limit prescribed by the RBI,
RTGS/NEFT/on line E-Payment / Digital mode of payments as per
the guidelines issued by the RBI wherever such facility is provided
by the Licensee in respect of bill payments, up to the limit
prescribed by the RBI.
BESCOM in its application had proposed to consider the collection of

power supply bills above One lakh rupees, through RTGS/NEFT. The
Commission has examined the request of BESCOM, and decides to
clxxxiii
approve the payment of power supply bills above One lakh rupees,
through RTGS/NEFT, at the option of the consumer.
6.12 Cross Subsidy Levels for FY18:
The Hon’ble Appellate Tribunal for Electricity (ATE), in its order dated 8 th
October, 2014, in Appeal No.42 of 2014, has directed the Commission
to clearly indicate the variation of anticipated category-wise average
revenue realization with respect to overall average cost of supply in
order to implement the requirement of the Tariff Policy that tariffs are
within ±20% of the average cost of supply, in the tariff orders being
passed in the future. It has further directed the Commission to also
indicate category-wise cross subsidy with reference to voltage-wise
cost of supply so as to show the cross subsidies transparently.
In the light of the above directions, the variations of the anticipated

category-wise average realization with respect to the overall average
cost of supply and also with respect to the voltage-wise cost of supply
of BESCOM and the cross subsidy thereon, is Indicated in ANNEXURE- III
of this Order. It is the Commission’s endeavour to reduce the cross
subsidies gradually as per the Tariff policy.
6.13 Effect of Revised Tariff:
As per the KERC (Tariff) Regulations 2000, read with the MYT Regulations
2006, the ESCOMs have to file their applications for ERC/Tariff before
120 days of the close of each financial year in the control period. The
Commission observes that the ESCOMs have filed their applications for
revision of tariff on 30th November, 2016. As the tariff revision is effective
from 1st April, 2017 onwards, the ESCOMs would be recovering revenue
as per the revised tariff for eleven months of the Financial Year (Except
in case where the billing cycle is lesser than a month).
A statement indicating the proposed revenue and approved revenue

is enclosed vide Annexure-III and detailed tariff schedule is enclosed
vide Annexure IV.
6.14 Summary of the Tariff Order:
clxxxiv
 The Commission has approved an ARR of Rs.16914.19 Crores for FY18,
which includes the deficit for FY16 of Rs.692.42 Crores with a total
gap in revenue of Rs.1254.09 Crores as against BESCOM’s proposed
ARR of Rs.18915.97 Crores.
 The Commission has allowed recovery of entire gap in revenue with

additional revenue of Rs.1254.09 Crores on Tariff Revision as against
the additional revenue of Rs.3902.87 Crores proposed by BESCOM
for FY18.
 BESCOM in its filing dated 30.11.2016 had proposed an increase of

148 paise per unit for all categories of consumers resulting in
average increase in retail supply tariff by 26%. The Commission has
approved an average increase of 48 paise per unit. The average
increase in retail supply tariff of all the consumers for FY18 is 8%.
 BESCOM in its subsequent petition dated 16.02.2017, has

proposed to increase tariff to LT2-Domestic consumers and
increase in demand charges and reduction of energy
charges for HT categories.
 The Commission has allowed for recovery of additional
revenue partly by increase in fixed charges ranging from Rs.5
per KW/HP/KVA to Rs.20 per KW/HP/KVA.
 The Commission has allowed for recovery of additional

revenue partly by increase in the energy charges in the range
of 15 paise per unit to 50 paise per unit.
 The increase in the energy charge for Domestic category up

to 30 to 100 units is 25/30 paise per unit.
 The increase in the LT industries category is in the range of 15

paise per unit to 20 paise per unit and for other categories,
the increase is in the range of 20 paise per unit to 50 paise per
unit.
clxxxv
 In order to increase the sales under HT industry and HT
commercial category, the increase in energy charges in the
2nd slab is 20 paise per unit as against the 40 paise per unit
increase under 1st slab for consumption upto 1 lakh / 2 lakh
unit per month.
 Time of the day tariff which was made mandatory in the previous
Tariff Orders for installations under HT2 (a),HT2 (b) and HT2(c) with
contract demand of 500KVA and above is continued in this Order.
 The Commission has introduced Time of Day billing for

morning peak period from 06.00 hours to 10.00 hours in
respect of LT/ HT consumers in addition to the prevailing ToD
billing.
 A rebate of 50 paise per unit is allowed for effluent treatment

plant installed within the industrial premises under HT-2(a) tariff
schedule.
 Green tariff of additional 50 paise per unit over and above

the normal tariff, which was introduced a few year ago for HT
industries and HT commercial consumers at their option, to
promote purchase of renewable energy from ESCOMs, is
continued in this Order.
 As in the previous Orders, the Commission has continued to

provide a separate fund for facilitating better Consumer
Relations /Consumer Education Programmes.
 The Commission has introduced additional slab and rates

under Domestic category.
 The Commission has decided to impose penalty upto Rs.one
lakh per sub division on ESCOMs who fail to conduct
Consumer Interaction Meetings at least once in three months
clxxxvi
and such penalty would be payable by the concerned
officers of the ESCOMs.
6.15 Commission’s Order
1. In exercise of the powers conferred on the Commission under
Sections 62, 64 and other provisions of the Electricity Act, 2003, the
Commission hereby determines and notifies the retail supply tariff
of BESCOM for FY18 as stated in Chapter-6 of this Order.
2. The tariff determined in this order shall be applicable to the
electricity consumed from the first meter reading date falling on or
after 1st April 2017.
3. Consequent to the issue of this Tariff Order, the petitions filed by
BESCOM vide OP.No.87 of 2016, OP.No.88 of 2016 & OP No.89 of
2016 stand disposed of.
4. This Order is signed dated and issued by the Karnataka Electricity

Regulatory Commission at Bengaluru this day, the 11th April, 2017.
Sd/- Sd/- Sd/-

(M.K.Shankaralinge Gowda) (H.D. Arun Kumar) (D.B. Manival Raju)
Chairman Member Member
clxxxvii
APPENDIX
NEW DIRECTIVES
AND
REVIEW OF COMPLIANCE OF PREVIOUS DIRECTIVES ISSUED BY THE
COMMISSION
1. The following new directives are issued by the Commission:
i. Directive on conducting Consumers’ Interation Meetings in the O &

M sub-divisions for redressal of consumer complaints:
During the Public Hearings held by the Commission to hear the
views, comments & suggestions of the consumers and other
stakeholders on the ESCOMs’ Tariff applications, it was brought to
the notice of the Commission by many consumers that the
Consumer Interaction Meetings chaired by the Superintending
Engineers, in the O&M sub-divisions of ESCOMs are not being
conducted regularly, thus denying them of the opportunity to
attend such meetings to air their complaints/ grievances
pertaining to supply of electricity and any other issues. The
consumers have urged the Commission to ensure that ECOMS
take necessary action to make the sub-divisions conduct
Consumer Interaction meetings regularly to hear and address the
consumer grievances.
The Commission strongly opines that if the ESCOMs conduct

consumer interaction meetings regularly, not only most of the
grievances of the consumers could be redressed in such meetings,
the ESCOMS could also redesign/realign their operations and
investments on capital and other works to optimally deliver better
and satisfactory service to the consumers. Such development
could also increase the efficiency and revenues of the ESCOMs.
Hence, the Commission hereby directs the BESCOM to ensure that

Consumer Interaction Meetings chaired by the Superintending
clxxxviii
Engineers, are conducted in each O&M sub-division according to
a pre-published schedule, at least once in every three months.
Further, the consumers shall be invited to such meetings in
advance through emails, letters, notices on BESCOM’s website,
local newspapers etc., to facilitate participatiion of maximum
number of consumers in such meetings. The BESCOM should
ensure that the proceedings of such meetings are recorded and
uploaded on its website, for the information of consumers.
Compliance in this regard shall be reported once in three months
to the Commission, indicating the date, the number of consumers
attending such meetings and the status of redressal of their
complaints.
If the BESCOM fails to ensure conduct of the Consumer Interaction

Meetings as directed, the Commission would consider imposing a
penalty of upto Rs one lakh per O&M sub-division per quarter for
each instance of non-compliance, and also direct that such
penalty shall be recovered from the concerned Superintending
Engineer who fails to conduct such meetings.
ii. Directive on preparation of energy bills on monthly basis by

considering 15 minute’s time block period in respect of EHT/HT
consumers importing power through power exchange under Open
Access
The Commission has noticed that, year on year, there has been a
substantial increase in the number of EHT and HT consumers of the
distribution licensees opting for open access resulting in substantial
volume of energy being procured through Power Exchanges,
which imposes a burden on the SLDC, in grid management.
Further, in accordance with the stipulations in Clause 6.3 (f) of the
the Karnataka Electricity Grid Code (KEGC), 2015, under the
chapter on Operation Planning, in order to facilitate demand
estimation for operational purpose, the distribution licensee
(ESCOM) is required to provide to the SLDC, on a day ahead basis,
at 09.00 hours each day, its estimated demand for each 15-minute
clxxxix
block, for the ensuing day. The distribution licensee is also,
required to provide to the SLDC, the estimates of loads that may
be shed, when required, in discrete blocks, with the details of
arrangements of such load shedding. Consequent to such
stipulation the ESCOMs are required to prepare monthly energy
bills in respect of EHT/HT consumers importing power through power
exchange under Open Access, by considering 15 minute’s time
block. However, it is observed that except in rare cases, this billing
requirement is not being complied with the ESCOMs.
In view of this, the Commission directs the BESCOM to ensure

preparation of energy bills on monthly basis by considering the 15
minute’s time block period in respect of EHT/HT consumers
importing power through power exchange under Open Access.
The BESCOM shall implement the directive forthwith and the
compliance regarding the same shall be submitted monthly from
May, 2017 onwards, to the Commission, regularly.
2. Review of Compliance of Existing Directives:
The Commission, in its earlier Tariff Orders and communications had

issued several directives for compliance by the BESCOM. An analysis
of such directives and their compliance is as under:
i. Directive on Energy Conservation:
The Commission had directed the ESCOMs to service all the new
installations only after ensuring that the BEE ***** (Bureau of Energy
Efficiency five-star rating) rated Air Conditioners, Fans, Refrigerators,
etc., are being installed in the applicant consumers’ premises.
Similarly, ESCOMS were directed to ensure that all new streetlight/high

mast installations including extensions made to the existing streetlight
circuits are serviced only with LED lamps/energy efficient lamps like
induction lamps.
cxc
Further, the Commission had directed the ESCOMs to take up
programmes to educate all the existing domestic, commercial and
industrial consumers, through media and distribution of pamphlets
along with monthly bills, regarding the benefits of using five-star rated
equipment certified by the Bureau of Energy Efficiency in reducing their
monthly electricity bills and conservation of precious energy.
Compliance by the BESCOM:

The BESCOM has issued a circular to all its officers vide dated
30.07.2016, to use only BEE five-star rated Energy Efficient Appliances.
The BESCOM has sold 57,86,236 number of LED bulbs through M/s EESL
during the period from 23.12.2015 to 31.10.2016. There is an
approximate savings of 140 MU of energy, on account of use of these
LED bulbs.
Further, the BESCOM has taken up several initiatives to create
awareness among the public on energy conservation through various
modes of communication such as distribution of pamphlets, printing
slogans on the backside of the monthly electricity bills, advertisement
near railway reservation counters through DDIS system, magazines,
stalls etc.
Commission’s Views:
The Commission notes that the BESCOM has not submitted the
compliance regularly on implementation of the directive. It is also
observed from the BESCOM’s report that it has merely issued a circular
to all its officers to use BEE five-star rated Energy Efficient Appliances,
and has not taken any further effective steps in the field to ensure
service to all new installations only with BEE five-star rated Air
Conditioners, Fans, Refrigerators, etc., in the applicant consumers’
premises. The BESCOM should focus on effective implementation of this
directive by reviewing periodically the progress/status of
implementation of its circular instructions by its field officers and take
corrective action wherever necessary.
Further, it is also important that the BESCOM draws up a continuous

awareness programme to educate the consumers about the benefits
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of using the energy efficient appliances in their premises and ensure
increase in use of energy efficient appliances.
The Commission reiterates that the BESCOM shall service all the new
installations only after ensuring that the BEE ***** (Bureau of Energy
Efficiency five-star rating) rated Air Conditioners, Fans, Refrigerators,
etc., are being installed in the applicant consumers’ premises and the
compliance thereon shall be reported to the Commission once in a
quarter regularly.
ii. Directive on implementation of Standards of Performance (SoP)
The directive issued was as follows:
“The BESCOM is directed to strictly implement the specified Standards

of Performance while rendering services related to supply of power as
per the KERC (Licensee’s Standards of Performance) Regulations, 2004.
Further, the BESCOM is directed to display prominently, in both
Kannada & English languages, the details of various critical services
such as replacing the failed transformers, attending to fuse off call /
line breakdown complaints, arranging new services, change of faulty
meters, reconnection of power supply, etc., rendered by it as per
Schedule-1 of the KERC (Licensee’s Standards of Performance)
Regulations, 2004 and Annexure-1 of the KERC (Consumer Complaints
Handling Procedure) Regulations, 2004, on the notice boards in all the
O & M sections and O & M sub-divisions, in its jurisdiction for the
information of consumers as per the following format:
Standards of
Primary
Performance Amount
responsibility Next
Nature of (indicative payable to
centers where higher
Service minimum time limit affected
to lodge Authority
for rendering consumer
complaint
services)
The BESCOM shall implement the above directive within one month
from the date of this order and report compliance to the Commission
regarding the implementation of the directives”.
cxcii
The BESCOM vide letter No. BC-26/F-2411/2009-10/517, dated
14.08.2015, has submitted the compliance to the Commission, it is
stated that as per the directions of the Commission, the details of the
specified Standards of Performance in accordance with the KERC
(Licensee’s Standards of Performance) Regulations, 2004 and the KERC
(Consumer Complaints Handling Procedure) Regulations, 2004, have
been displayed in both Kannada and English on the notice boards in
all the O&M section and sub-division offices.
O & M Sub-divisions O & M Sections

No. of sub- No. of
divisions Likely date sections Likely date
Total Total
BESCOM where SoP Balance of where SoP Balance of
Nos Nos
parameters completion parameters completion
displayed displayed
120 120 0 NA 460 460 0 NA
The BESCOM in its Tariff application vide page number 91, has furnished
the compliance relating to display of SoP in both Kannada and English
on the notice boards of all the O&M sections & sub-divisions. Hence,
BESCOM has requested the Commission to drop the directive.
The Commission while noting the compliance furnished, reiterates that
the BESCOM shall continue to comply with its earlier directive by
displaying the details of SoP in all its O&M section and sub-division
offices for the information of the consumers, and also to adhere to the
specified standards of performance in rendering various services to
consumers in a time bound manner.
The Commission notes that, during the Public Hearings held on the
ESCOMs’ Tariff petitions, the consumers participating in the hearing
have stated that, the ESCOMs, contrary to their submission before the
Commission on compliance of the directive issued by the Commission,
have not displayed the SoP parameters on the notice boards in the
O&M offices and also not adhered to the timelines stipulated in the SoP.
They have sought the intervention of the Commission to ensure that the
ESCOMs comply with the directive on SoP.
cxciii
The Commission notes that the situation indicates that there is lack of
effective supervision over the functioning of field offices by the ESCOMs
especially in rendering services relating to supply of power to the
consumers.
Therefore, the Commission once again reiterates its directive to the

BESCOM to continue to strictly implement the specified SoP while
rendering services related to supply of power as per the KERC
(Licensee’s Standards of Performance) Regulations, 2004 and directs
the BESCOM to monitor effective implementation of the directive on
SoP in all its O&M offices. The Commission shall initiate appropriate
action on any instance of breach of its directive.
iii. Directive on use of safety gear by linemen
“The Commission directs the BESCOM to ensure that all the linemen in
its jurisdiction are provided with proper and adequate safety gear and
also ensure that the linemen use such safety gear provided while
working on the network. The BESCOM should sensitise the linemen
about the need for adoption of safety aspects in their work through
suitably designed training and awareness programmes. The BESCOM is
also directed to device suitable reporting system on the use of safety
gear and mandate supervisory/higher officers to regularly cross check
the compliance by the linemen and take disciplinary action on the
concerned if violations are noticed. The BESCOM shall implement this
directive within one month from the date of this order and submit
compliance report to the Commission.”
The following safety measures are being implemented:
I. Safety goggles, safety shoes and safety belts are procured and
issued to field staff.
cxciv
II. Tenders were called for safety materials like safety gloves, safety
helmets and rainwear, Purchase Order is placed for rubber
gloves. The tender for safety helmets and rainwear was opened
and is under technical evaluation.
III. Instructions are issued from corporate office to follow the safety
protocol at work field.
IV. On every Monday morning, the section officer explains about
safety aspects and use of safety gadgets during the work, to all
the linemen under his jurisdiction. The section officer also
instructs the linemen not to take up the work without availing
line-clear/ work-permit and creating safe working zone.
V. Surprise inspection of works is being carried out to check
whether the safety materials are used, safety zone is created
etc., as per the check list provided. Casual leave for one day is
deducted if any of the staff is found not using the safety tools
provided to them.
It is important that the BESCOM should continue to focus on safety
aspects to reduce the electrical accidents occurring due to
negligence and non-adherence of safety procedures by the field staff
while working on the distribution network. Further, the linemen should
be given training periodically on adherence to safety aspects so that it
becomes part of their routine.
The Commission reiterates its directive that the BESCOM shall ensure
that, all the linemen in its jurisdiction are provided with proper and
adequate safety gear and ensure that they use the safety gear
provided to them while attending to their duites in the field. The
compliance in this regard shall be submitted once in a quarter to the
Commission regularly.
iv. Directive on providing Timer Switches to Streetlights by the

ESCOMs
cxcv
“The Commission directs the BESCOM to install timer switches using own
funds to all the streetlight installations in its jurisdiction wherever the
local bodies have not provided the same and later recover the cost
from them. The BESCOM shall also take up periodical inspection of
timer switches installed and ensure that they are in working conditions.
They shall undertake necessary repairs/replacement work, if required
and later recover the cost from local bodies. The compliance
regarding the progress of installation of timer switches to streetlight
installations shall be reported to the Commission within three months of
the issue of the Order”.

The progress of installation of timer switches to streetlight installations as
on 30.09.2016 is as under:
Total No. of No. of No. of timer No. of timer
Balance No.
existing installations switches in switches not
of timer
streetlight provided with working in working
switches to
installations as timer switches condition as condition as
BESCOM be fixed as on
on as on on on
September16
September16 September16 September16 September16
A B C D E=A-C
52,817 15,313 12,636 3,308 40,181
The BESCOM has issued a circular vide dated 15.09.2016 directing the
field staff to install timer switches to new streetlight installations and any
extension/modification carried out to the existing streetlight installations
shall also be serviced only with timer switches.
The BBMP/local bodies are maintaining the streetlight installations.
Hence, the work of providing timer switches to the streetlights has to be
taken up by BBMP/local bodies only and in this regard letters will be
addressed to them.
Further, the Government of Karnataka has initiated “Nagara Jyothi”

through M/s EESL, a joint venture of the MoP, GoI, for replacement of
existing SV/MV/FL streetlight fixtures by the energy efficient LED lamps
with provision of smart timer switches in urban local bodies, vide GoK
Order No. EN/52/VSC/2015, dated 17.06.2015. Since the initiative is
being taken up by the Government and the project is taken up by
Urban Development Department, it is requested to exclude the above
cxcvi
directive.
Commission’s Views
The Commission observes that there are around 3,300 number of timer
switches provided to the streetlight installations which are not
functioning as reported by the BESCOM. But, the BESCOM does not
seem to have initiated any action to coordinate with the concerned
authorities for necessary repair/replacement of such non-working timer
switches. The inaction by the BESCOM has resulted in non-utilization of
timer switches already installed to properly regulate the illumination of
streetlights aimed at avoiding wastage of electricity.
It is also noted that providing timer switches to streetlight installations

under “Nagara Jyothi” programme through M/s EESL covering all
streetlight installations has not yet taken off. The same should be
pursued with utmost seriousness. The progress /status in this regard shall
be reported to the Commission on a quarterly basis, regularly.
Further, wherever feasible the BESCOM should install the timer switches
at its cost and later recover the cost from the concerned local bodies.
The BESCOM is also directed to persuade the local bodies to install
timer switches at their cost availing funds / grants received from the
Government and other agencies for such programmes.
The Commission reiterates its directive that the BESCOM shall ensure
that, the new streetlight installations and any extension/modification to
be carried out to the existing streetlight installations shall be serviced
only with timer switches.
v. Directive on load shedding:
The Commission had directed that:

1) Load shedding required for planned maintenance of transmission /
distribution networks should be notified in daily newspapers at least
24 hours in advance for the information of consumers.
cxcvii
2) The ESCOMs shall on a daily basis estimate the hourly requirement
of power for each sub-station in their jurisdiction based on the
seasonal conditions and other factors affecting demand.
3) Any likelihood of shortfall in the availability during the course of the
day should be anticipated and the quantum of load shedding
should be estimated in advance. Specific sub-stations and feeders
should be identified for load shedding for the minimum required
period with due intimation to the concerned sub-divisions and sub-
stations.
4) The likelihood of interruption in power supply with time and duration

of such interruptions may be intimated to consumers through SMS
and other means.
5) Where load shedding has to be resorted due to unforeseen

reduction in the availability of power, or for other reasons,
consumers may be informed of the likely time of restoration of
supply through SMS and other means.
6) Load shedding should be carried out in different sub-stations /

feeders to avoid frequent load shedding affecting the same sub-
stations / feeders.
7) The ESCOMs should review the availability of power with respect to
the projected demand for every month in the last week of the
previous month and forecast any unavoidable load shedding after
consulting other ESCOMs in the State about the possibility of inter-
ESCOM load adjustment during the month.
8) The ESCOMs shall submit to the KERC their projections of availability
and demand for power and any unavoidable load shedding for
every succeeding month in the last week of the preceding month
for approval.
9) The ESCOMs shall also propose specific measures for minimizing
load shedding by spot purchase of power in the power exchanges
or bridging the gap by other means.
10) The ESCOMs shall submit to the Commission substation-wise and
feeder-wise data on interruptions in power supply every month
before the 5th day of the succeeding month.
cxcviii
The Commission had directed that the ESCOMs shall make every effort
to minimize inconvenience to consumers by strictly complying with the
above directions. The Commission had indicated that it would review
the compliance of directions on a monthly basis for appropriate orders.

The prevailing power supply arrangements in the BESCOM is indicated
as follows:
a) Load Restriction:
Presently there is no load restriction; in case of any major outages
in the generating stations, the load restriction is planned as below.
 Priority-1: NJY feeders, 2 to 4 hours in a day on rotational basis.
 Priority-2: Town feeders (other than Bengaluru city), 2 to 4 hours

in a day on rotational basis.
 Priority-3: Domestic/residential feeders in Bengaluru city, 2 to 4

hours on rotational basis.
 Priority-4: Commercial feeders in Bengaluru city, 2 hours on

rotational basis.
 Priority-5: Staggering of holidays for industrial feeders.
b) Hours of power supply for agricultural feeders:
o Rural mixed feeders: 3 phase, 6 to 7 hours, single phase, 7 to 8

hours.
o Exclusive agriculture feeders: 3 phase, 6 to 7 hours, single phase,
7 to 8 hours.
Consequent to depleted storage of water in major Hydel reservoirs of

Linganamakki, Supa & Mani, to meet the peak demand of ensuing
summer days, presently Hydel generation is being restricted to 10.5 MU
per day from these power plants.
However, to meet the deficit of power, the following measures have
been taken by the BESCOM:
 Purchase of power through the Energy Exchange (IEX), 200-300
MW between 00.00 hrs and 11.00 hrs, 500-750 MW between
11.00 hrs and 18.00 hrs, based on the day ahead availability
declared by the SLDC and the anticipated demand based on
previous days recorded demanded with seasonal conditions.
cxcix
 Purchase of power to an extent of 215 MW of BESCOM share
from Damodar Valley Corporation through PPA.
 Hydro generation will be increased during ensuing summer
and school examinations.
Further, at present, the BESCOM has developed a web-based SDRA

application which utilizes the SCADA data and generates MIS reports
on power supply position, performance of feeders and also hours of
power supply in geographical area-wise, pubic constituency-wise and
also BESCOM O&M unit-wise. Using this software, SMS are being sent to
public representatives. The information regarding scheduled
outages of 11kV feeders, 66 KV lines and sub-stations, will be
uploaded on its website- BESCOM.ORG for public information
(automatically through LC portal).
As regards sending of SMS about load shedding to the public /

consumers, the same is in process. Also, integration of this application
with computers of sub-station log book application developed by the
KPTCL, to fill up the gaps in the data acquired through SCADA, is in
progress.
The BESCOM has also developed web-based Feeder Shutdown
Protocol (FSP) application which support the process of 11 KV feeder
selection on indiscriminating basis for load shedding in the event of
unscheduled outage which can be a result of loss of generating unit or
loss of major transmission unit.
As of now, the BESCOM is furnishing day ahead requirement to the
SLDC for the requirement of power and based on the requirement and
availability, the SLDC is allocating the power. In future, the BESCOM will
furnish the projected requirement on month ahead basis to the
Commission.
As per the Commission’s directive, the details of both scheduled and
un-scheduled load shedding due to system constraints is uploaded
day ahead in the BESCOM’s website for public information.
Urjamithra Programme:
cc
 Urjamithra programme is an initiative of Ministry of Power,
Government of India, which provides outage management and
notification platform for dissipating the outage information to
power distribution consumers across India through
SMS/email/push notification.
 Objective of this programme is to share the information with

consumers about outages in rural and urban areas through
SMS/email/push notification.
 In this regard consumer data collection is in progress.
The Commission notes that the BESCOM is arranging 7 to 8 hours of

single phase power supply on exclusive agriculture feeders
segregated under NJY scheme. This is over and above 6-7 hours of 3
phase power. While the intention of providing single phase power may
be for use in non-IP set purpose, past experience has indicated that it
can be easily used for running IP sets and the ESCOMs have not been
able to technically stop such misuse. Just to stop such misuse, NJY is
being implemented and BESCOM’s action of equating both exclusive
agriculture feeder and NJY feeder though for limited hours goes
against the scheme of segregation of feeders . The BESCOM is directed
reexamine its action and also explain as to why it is extending single
phase power supply on exclusive agriculture feeders on par with NJY
feeders.
Further, the Commission notes that the BESCOM has not expedited the
‘application software’ which it has been reportedly developing
through Consultants for integration with the SCADA data to enable
providing information to the consumers through SMS in advance about
the time and duration of probable interruptions. There is no progress in
this regard as the status is the same as compared to the previous year.
The Commission notes that the BESCOM has not effectively and
cci
satisfactorily complied with the directive on load shedding. The
BESCOM shall expedite development of necessary software and other
process required to inform consumers through SMS regarding both
scheduled and un-scheduled load sheddings due to reasons such as
system constraints, breakdowns of lines/equipment, maintenance etc.,
This would significantly address the “consumers’ dissatisfaction” on this
issue and prevent inconvenience/disruption caused to industrial
consumers.
Further, the Commission observes that the BESCOM is not submitting its
projections of availability and demand for power and any
unavoidable load shedding for every succeeding month in the last
week of the preceding month to the Commission regularly. The
BESCOM shall henceforth submit the same regularly to the Commission
without fail.
The Commission reiterates that the BESCOM shall comply with the
directive on load shedding and submit monthly compliance reports
thereon to the Commission regularly.
vi. Directive on Establishing a 24x7 Fully Equipped Centralized

Consumer Service Center for Redressal of Consumer Complaints:
The directive was as under:
“The BESCOM is directed to put in place a 24x7 fully equipped

Centralized Consumer Service Center at its Headquarters with a state
of the art facility/system for receiving consumer complaints and
monitoring their redressal so that electricity consumers in its area of
supply are able to seek and obtain timely and efficient services in the
matter of their grievances. Such a Service Center shall have adequate
desk operators in each shift so that the consumers across the
jurisdiction of the BESCOM are able to lodge their complaints to this
Centre.
Every complaint shall be received on helpline telephone number by

the desk operator and registered with a number which shall be
ccii
intimated to the Consumer. In turn, the complaints shall be transferred
online to the concerned field staff for resolving the same. The
concerned O&M/local service station staff shall visit the complainant’s
premises at the earliest to attend to the complaints and then inform
the Centralized Service Centre that the complaint is attended. Then,
the desk operator shall also call the complainant and confirm with him
whether the complaint has been attended. The complaints shall be
closed only after receiving consumer’s confirmation. Such a system
should also generate daily reports indicating the number/nature of
complaints received, complaints attended, complaints pending and
reasons for not attending to the complaints along with the names of
the officers responsible with remarks be placed before the Managing
Director on the following day for his attention who would review and
take corrective action in case of any pendency/delay in attending to
the complaints.
The BESCOM shall publish the details of complaint handling

procedure/Mechanism with contact numbers in the local media or in
any other form periodically for the information of the consumers. The
compliance of the action taken in the matter shall be submitted to the
Commission within two months from the date of this Order.
Further, the Commission directs the BESCOM to establish/strengthen

24x7 service stations, equipping them with separate vehicles &
adequate line crew, safety kits and maintenance materials at all its
sub-divisions including the rural areas for effective redressal of
consumer complaints”.

To facilitate the consumers, the BESCOM has established a well-
integrated 24 X 7 Customer Help Line with latest technology and
software along with in-built automatic call transfer system. Consumers
can call on the Customer Help Line Number “1912” which has 45
concurrent lines with Multi Channel Complaint Registration Facility
(Phone, SMS, Online, E-mail and Facebook).
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As per the directions of the Commission, the BESCOM has published
the contact number (1912) of the Centralized Consumer Service
Centre initially through all Newspapers, Radio and Television. In
addition to this, 24X7 Helpline contact number 1912 is being publicized
regularly through pamphlets, hoardings, advertisements, Facebook,
Twitter, BESCOM’s service station vehicles, display on linemen’s
uniforms and notifications.
All the consumer complaints are being registered in the Web enabled
PGRS (Public Grievance Redressal System) application. Whenever any
consumer registers complaint, he will be provided with a Docket
Number, using which he can track his complaint’s status through the
BESCOM Website. For the speedy redressal of complaints, the BESCOM
has established Circle control rooms in all the 8 Circles. In the Circle
Control rooms, the executives do follow up of complaints pertaining to
their Circle till resolution.
Further, as per the directive of the Commission, the BESCOM had
initiated Consumer Interaction Meetings from the year 2012. The
Consumer Interaction Meetings are being conducted in all the sub-
divisions as per the monthly schedule specified by the BESCOM,
regularly.
The Zone-wise details of the Consumer Interaction Meetings chaired by

the respective Superintending Engineers from April to November, 2016
are as follows:
Bangalore Metropolitan Area Zone (BMAZ)

No. of No. of No. of
Sub-
Circle Division Date consumers complaint complaints
division
attended s lodged attended
North Peenya N4 16.11.16 60 5 5
East Indiranagar E3 05.08.16 7 0 0
East Indiranagar E10 25.10.16 5 5 5
East Shivajinagar E2 07.09.16 17 2 2
Vidhanasoud
East ha W5 23.11.16 1 1 1
South Jayanagar S6 18.11.16 14 6 6
South Jayanagar S1 07.11.16 3 3 3
South HSR S11 23.11.16 5 5 5
West Rajajinagar N1 14.11.16 10 9 9
West R.R.Nagar W7 18.11.16 4 3 3
cciv
Bangalore Rural Area Zone (BRAZ)
No. of
No. of No. of
Sub- complai
Circle Division Date consumers complaints
division nts
attended attended
lodged
BRC Hosakote HK1 19.10.16 0 0 0
BRC Nelamangala TV1 11.11.16 3 2 2
BRC Hoskote DH1 28.11.16 8 6 6
Ramanagar
a Ramanagara CP2 06.09.16 3 2 2
Ramanagar
a Kanakpura SA1 17.10.16 4 2 2
Kolar KGF KG1 30.11.16 1 4 4
Kolar Bangarpet BG1 25.11.16 6 8 8
Chitradurga Area Zone (CTAZ):
No. of
Sub No. of No. of
complai
Circle Division - Date consumers complaints
nts
division attended attended
lodged
Tumkuru Tipturu CN1 24.11.16 9 5 5
Davanagere Harihara HN1 05.12.16 11 10 10
Davanagere Davanagere DV1 07.11.16 7 3 3
Commission’s Views
The BESCOM should continue its efforts in improving the delivery of
consumer services to reduce the consumer complaint downtime so as
to ensure delivery of prompt services to them. The BESCOM should
develop necessary capacity and infrastructure for prompt and
effective response to consumer complaints on breakdown of
lines/equipment, failure of transformers etc., resulting in interruptions in
power supply. In addition to this, BESCOM should take up steps to
continuously sensitize its field staff that they need to discharge their
work efficiently.
The Commission reiterates its directive to the BESCOM to publish the

complaint handling procedures / contact number of the Centralized
Consumer Service Centre in the local media, host it on its website and
also publish it through other modes periodically for the information of
public and ensure that all the complaints of consumers are registered
only through the Centralized Consumer Service Centre for proper
monitoring of disposal of complaints registered. The compliance in this
ccv
regard shall be furnished once in a quarter regularly, to the
Commission.
vii. Directive on Energy Audit
The Commission had directed the BESCOM to prepare a metering plan

for energy audit to measure the energy received in each of the
Interface Points and to account for the energy sales. The Commission
had also directed the BESCOM to conduct energy audit and chalk out
an action plan to reduce distribution losses to a maximum of 15
percent wherever it was above this level in the towns/ cities having a
population of over 50,000.
The Commission had earlier directed all the ESCOMs to complete

installation of meters at the DTCs by 31st December, 2010. In this regard
the ESCOMs were required to furnish to the Commission the following
information on a monthly basis:
a) Number of DTCs existing in the Company.

b) Number of DTCs already metered.
c) Number of DTCs yet to be metered.
d) Time bound monthly programme for completion of the work.

DTC metering status as on October 2016 is as below:
Number of DTCs existing : 2,48,253
Number of DTC already metered : 1,10,965
Percentage of DTCs metered : 44.70
Number of DTCs yet to be metered : 1,37,288

As metering of DTCs under agricultural feeders and single water supply
installations are exempted, the balance DTCs metering to be carried
out is approximately 25,000 to 30,000, for which tender is proposed.
Further, for carrying out energy audit of metered DTCs, the BESCOM
has taken all measures to resolve the issues and the same is under
progress.
As on No. of Balance No. of DTCs Balance
No.of DTCs
October, DTCs to be with DTCs to be
existing
2016 metered metered modems fixed with
ccvi
modems/
Legacy
meters
RAPDRP 54,384 53,517 867 52979 538
Non-RAPDRP 1,93,869 57,448 1,36,421 45,000 12,448
Total 2,48,253 1,10,965 1,37,288 97,979 12,986
In RAPDRP area, DTC-wise energy audit reports require fine-tuning of the

incremental data, GIS updation and integration with RAPDRP system and
once it is integrated, DTC- wise system generated energy audit reports will
be submitted regularly to the Commission.
In Non-RAPDRP area due to software integration issues between the meter

manufacturer (M/s AFTL and M/s Genus) and the billing agency (M/s N-
soft) DTC-wise energy audit reports are not generated. About 12,287 DTCs’
energy audit reports are generated in Tumakuru circle, but due to
improper tagging most of the DTCs are showing abnormal losses.
Action is being taken to set right the same. For remaining DTCs
repeated letters have been addressed to the Meter manufacturers to
resolve the software issues, at the earliest.
Further, to furnish energy audit report in the prescribed format as per
the Commission’s letter dated 20.04.2015, energy audit reports at DTC
level are not being generated due to issues mentioned earlier.
However, town/division/feeder-wise energy audit reports are furnished
regularly to the Commission in the prescribed PQM format for quarterly
review meetings. PQM format 3a (division-wise), 3b (feeder-wise) and
3c (town-wise) from April to June16 are enclosed for further needful.
It is observed that the monthly energy audit reports of cities/towns with

detailed analysis are not being submitted by the BESCOM regularly to
the Commission. The Commission directs the BESCOM to conduct
energy audit of identified cities/towns and initiate necessary measures
on the basis of energy audit results to reduce the technical losses and
improving collection efficiency to achieve the mandated A T & C loss
of less than 15 per cent. The BESCOM is directed to submit compliance
thereon regularly to the Commission.
ccvii
The Commission further notes that, of the total 2,48,253 DTCs in
BESCOM’S jurisdiction, 1,10,965 (45%) DTCs are provided with meters,
but, despite completing 45 per cent of the metering of the DTCs, the
BESCOM has failed to take up DTC-wise energy audit, citing non-
completion of tagging of consumer installations with the concerned
feeders/DTCs and also software integration issues. The stand
repeatedly taken by the BESCOM for the last three years that tagging
of consumer details with the concerned feeders/DTCs is in progress,
does not augur well for the Company which wants to run its business on
commercial principles. This shows that the BESCOM is not serious about
conducting energy audit and run its business efficiently. The
Commission views with displeasure, the delay in completing the
tagging work and taking up the energy audit, on the part of the
BESCOM.
The BESCOM is directed to take up energy audit of DTCs where meters

have already been installed and to initiate remedial measures for
reducing energy losses in the distribution system. The compliance in
respect of DTC-wise energy audit conducted with analysis and the
remedial action initiated to reduce loss levels shall be regularly
submitted to the Commission on a quarterly bais.
Further, the BESCOM is directed to submit to the Commission the

consolidated energy audit report for the FY17, as per the formats
prescribed by the Commission, vide its letter No. KERC/D/137/14/91
dated 20.04.2015, before 15th May, 2017.
viii. Directive on Implementation of HVDS:
In view of the obvious benefits in the introduction of HVDS in reducing

distribution losses, the Commission had directed the BESCOM to
implement High Voltage Distribution System (HVDS) in at least one
O&M division in a rural area in its jurisdiction by utilizing the capex
provision allowed in the ARR for the year.
ccviii
The HVDS work in respect of balance 28 (out of total 68) feeders in
Tumkuru, Chikkaballapura and Nelamangala divisions was completed
and the feeders were also commissioned during the December, 2015.
The evaluation of pre and post analysis of all the 68 feeders was
entrusted to TPIA (Third Party Inspection Agency) M/s N Arc Consulting,
New Delhi, vide DWA No. DGM/HVDS/TPIA/16-17/03/ 04/05, dated
10.11.2016. Two months’ time has been given to the Agency for
submission of analysis report and on receipt of the reports, the same
will be submitted to the Commission.
Further, the BESCOM has taken action to identify the feeders having
highest distribution losses for implementing HVDS scheme at a
reasonable cost duly following the guidelines issued by the
Commission. The BESCOM has taken all the necessary measures and
the overall DPR cost of implementation of HVDS scheme in
Kanakapura taluk has been reduced from Rs 174 crore to Rs 136.88
crore and cost of thr projects in Huliyurdurga O&M section & Tumakuru
taluk has been reduced from Rs. 32.25 crore to Rs 25.90 crore. In this
regard, a reply on the discrepancies noted by the Commission will be
submitted to the Commission shortly.
Tenders are invited for implementation of HVDS in Ramanagara rural,
Channapatna urban and Bidadi sub-divisions in Ramanagara circle,
already evaluation is completed and awarding is yet to be finalized.
Tender has been re-invited for Channapatna Rural sub-division and NIT
was issued on 17.12.2016.
The Commission notes that implementation of HVDS involving 68

feeders in Tumakuru RSD1&2, Chikkaballapura and Doddaballapura
sub-divisions has been completed. The BESCOM is directed to expedite
analysis of the feeders commissioned in order to evaluate the benefits
accrued to the system post implementation vis-à-vis the objectives set
out in the DPR. Further, the BESCOM needs to expedite
implementation of HVDS in its Ramanagara circle by drawing up an
ccix
action plan for timely completion so as to derive the envisaged
benefits on implementation of the scheme.
The Commission with a view to minimize the cost had issued revised
guidelines for implementation of HVDS in sub-divisions/feeders having
highest distribution losses, so that a higher loss reduction could be
achieved on implementation of HVDS at a reasonable cost. The
BESCOM is directed to follow these guidelines to reduce the cost of
implementation of HVDS in Ramanagara circle.
As regards the implementation of HVDS in Kanakapura sub-division, the

Commission vide its letter No. KERC/D/75/2016-17/2603, dated
14.2.2107 has asked the BESCOM to attend to the observations noted
by the Commission and submit the revised report of the project as per
actuals. The BESCOM was also directed to make a presentation before
the Commission outlining the benefits accrued to the system post
implementation of the HVDS project in Kanakapura sub-division. The
Commission directs the BESCOM to comply with these instructions at
the earliest.
The Commission reiterates its directive that the BESCOM shall follow the
revised guidelines issued by the Commission on this issue and
implement the HVDS programme in Ramanagara circle and submit the
progress/compliance thereon once in a quarter, to the Commission
regularly.
ix. Directive on Niranthara Jyothi – Feeder Separation:
The ESCOMs were directed to furnish to the Commission the

programme of implementing 11 KV taluk-wise feeders’ segregation
with the following details:
a) Number of 11 KV feeders considered for segregation.

b) Month-wise time schedule for completion of envisaged work.
c) Improvement achieved in supply after segregation of feeders.

BESCOM has reported that, out of the 271 feeders taken up under
ccx
phase-1, all the feeders have been commissioned and out of the 281
feeders proposed under phase-2, 280 feeders have also been
commissioned. The project was scheduled for completion in all respect
by January, 2016. Further, a total of 380 feeders are proposed under
phase-3 of Niranthara Jyothi extending the scheme to the left out
villages and the areas earlier covered under RLMS scheme, at a total
cost of Rs 703 crore. Out of 380 feeders proposed under phase-3,
already 156 feeders have been commissioned. The project is
scheduled for a total completion by March, 2017. It is submitted that
for Niranthara Jyothi feeders, 20-22 hours of three phase power supply
is being arranged as envisaged. Limited number of hours of power
supply to IP-sets i.e., for agriculture feeders is 7 hours at three phases as
per the decision of GoK.
Further, M/s MECON Limited, a Government of India undertaking has

been entrusted with pre and post analysis of feeders commissioned
under Niranthara Jyothi phase-1 and concurrent analysis of feeders
commissioned under phase-2, as follows:
1. Bengaluru Rural : 24 feeders
2. Kolar : 08 feeders
3. Tumakuru : 40 feeders
4. Davanagere : 28 feeders
M/s MECON has submitted a report in respect of feeders identified in

Davangere and Kolar circles and which is validated by the concerned
superintending engineers (Ele.,). Further, M/s PRDCL has also evaluated
the pre and post analysis of feeders commissioned under Niranthara
Jyothi phase-1 in Harpanahalli Taluk, in Davanagere circle.
The agencies have submitted a detailed report separately for each of

the feeders on which the analysis was carried out. The reports show
that the NJY has benefited the rural population to a considerable
extent through better quality of power supply and in providing 24 x7
power to the rural non-agricultural loads. The consumers are satisfied
with the better power supply conditions prevailing after the
implementation of NJY.
ccxi
The benefits derived from NJY scheme is noted below:
 24x7 power supply to villages:
The main purpose envisaged in the implementation of NJY is to

arrange 24x7 uninterrupted power supply to the villages. As seen
from the vital statistics of the sub-stations feeding the area, these
villages which were having intermittent power supply earlier, are
now having continuous 3-phase power supply and the BESCOM is
not resorting to load shedding, which was the case earlier. But, in a
few cases there have been continued interruptions due to system
constraints, line clear issues and unforeseen faults. But, now after
implementation of NJY, the BESCOM is able to supply continuous
uninterrupted quality power supply for longer duration during
morning and evening peak hours.
 E
nergy input from sub-stations:
There is increase in consumption of both the metered category

installations and IP-sets. However, the increase in IP-consumption is
attributed to the increase in number of IP-sets due to regularization
of unauthorized IP-sets.
 I
ncrease in metered consumption:
The energy consumption of metered category installations has

shown an increase of about 25 to 30 per cent after the
implementation of NJY. In some of the cases, where the exact
feeder-wise metered consumption was not furnished due to
change in billing software and non-availability of previous data, a
sample of energy consumption of a few installations selected at
random in various villages fed from the feeder over a period of 6
months before and after the implementation of NJY, as extracted
from the sub-divisional DCB was analyzed. This also indicates the
increasing trend of consumption of metered installations. However,
it can be safely assessed that there is an increase of 25% to 30% in
ccxii
metered energy consumption.
 Unmetered consumption:
As compared to the earlier scenario, there is a considerable

increase in the IP consumption post-implementation of NJY. The
total unmetered consumption of IP sets in respect of the combined
IP feeders has shown an increasing trend as compared with the IP
set consumption before implementation of NJY. This is due to
increase in number of IP sets serviced under regularization and also
due to mix-up of feeder loads during re-arrangement of feeders
envisaged in the project. However, IP consumption, which was
hitherto being assessed based on assumptions, can now be
measured more accurately, as there is a total exclusive feeder with
metering facilities at sub-station end, for calculating feeder-wise
total daily and monthly IP-consumption.
 Rate of failure of transformers:
After the implementation of NJY, the failure rate of transformers in

the IP feeders as well as NJY feeders has reduced significantly as
compared to the failure rate of transformers before implementation
of NJY.
 Better consumer satisfaction:
As per the opinion obtained from the consumers, in different

villages fed by NJY feeders, it is evident that the consumers are
happier with the better power supply conditions after
implementation of NJY.
 R
esults of the socio-economic survey carried out for the
beneficiaries of the NJY Project:
A survey was conducted on the effectiveness of the project by

obtaining opinion from a cross section of people in different
villages fed by NJY feeders, the results are as follows:
o I
mprovement in quality of power supply viz., less voltage
ccxiii
fluctuations, reduction in interruptions/better tail-end voltages.
o I
mproved standards of living.
o I
ncrease in level of literacy/education.
o I
mprovement in basic amenities such as drinking water supply,
improved services in Primary Health Centers.
o D
evelopment of small scale industries leading to local
employment and increased job opportunities.
Further, the BESCOM has ensured that the illegal tapping of NJY
feeders is curbed and wide publicity has been given through media,
highlighting the punishments laid down under the law for power theft
or illegal hooking.
The BESCOM will furnish the total IP-set consumption monthly to the
Commission on the basis of data obtained from agricultural feeders’
energy meters.
Following are the observations pertaining to 36 NJY feeders covering

Davanagere and Kolar Circles:
After
After
Sl bifurcation
Parameter Before bifurcation bifurcation Conclusion
No NJY non-agri
agri feeder
feeder
Domestic
Domestic lighting lighting and
and water supply – water supply – IP Sets – Increase in installations
Total No. of
1 48,720 numbers &IP 52,445 11,150 after bifurcation is
installations
Sets – 9,340 numbers numbers about 9.6%
numbers
12,60,500 KW
(Domestic and IP
load cannot be
Domestic
Total segregated since Increase in connected
Lighting and IP Sets
2 connected the connected load after bifurcation is
Water Supply 11,85,000 kW
load load is based on about 12.2%
2,36,000 kW
installed
transformer
capacity)
Total energy Domestic lighting
Domestic Decrease in energy sent
sent out and water supply -
lighting and IP Sets out from the substations
3 from 38,28,650 kWh&
water supply 92,65,500 kWh after bifurcation is
substation IP Sets -
56,57,600 kWh about 16%
(kWh) 1,39,45,000kWh
ccxiv
It is assumed
that the entire
energy
Domestic lighting consumed by
Total
and water supply - the Increase in metered
metered
31,57,600 kWh& bifurcated energy consumption after
4 energy 50,06,300 kWh
IP Sets -Realized Agri feeders is bifurcation is
consumption
about 88,30,000 assessed and about 19%
(kWh)
kWh will be
realized from
the Govt. at a
later date
Average Reduction in technical loss
5 technical 17.5% 11.5% is
Not possible
loss about 5.5%
to evaluate
Reduction in commercial
Average AT&C for a
loss is
6 Commercial 6% 5.5% pure
about 0.5%
loss Agricultural
feeder since
Aggregate
the realization
Technical
is an assumed Reduction in AT&C loss is
7 and 23.50% 17%
value of 100% about 6.5%
commercial
loss
Even though the number
of failure of transformers
has reduced, the
percentage failure rate for
the bifurcated non-Agri
Transformer NJY feeder has increased
8 14% 16% 17.5%
Failure rate marginally by about 2%.
This may be attributable to
high service period of
about 20 to 22 hours a day
as compared to earlier 8
to 10 hours a day
Even with this
improvement for the non-
Agricultural NJY feeder,
Voltage the regulation is above the
9 Regulation 7% 4.50% 9.50% acceptable range of +
(HT) 2.5% (up to transformer) as
per REC guidelines. This
may be attributable to
higher line lengths
This has led to improved
quality of power supply
viz., good tail end voltage
10 Peak Load 140A to 200A about 45 A 120 to 135 A at the consumer end. This
is evident from the survey
carried out of the
consumers.
The following are the observations pertaining to Socio-Economic

Survey carried out for the Beneficiaries of NJY scheme (36 NJY feeders)
of Davanagere and Kolar Circles of BESCOM. A survey was carried out
covering 5 villages per feeder and 6 respondents per village:
ccxv
Circle Davangere
No of sub-divisions 8
No of feeders for evaluation 28
Circle Kolar
No of sub-divisions 2
No of feeders for evaluation 8
Sl No Parameter Response
Voltage Measured at consumer Within acceptable
1
premises value
No (80%)
However the surveyor
Is the respondent aware of NJY scheme
2 has appraised the
(Yes/ No)
respondent about the
scheme
Availability of power 24x7 after NJY Yes (93%)
3
(Yes/ No) > 20 Hrs a Day
Improvement in quality of power viz. less
4
voltage fluctuations after NJY (Yes / No) Yes (86%)
Reduction in power Interruptions after
5
NJY (Yes / No) Yes (73%)
Whether satisfied with quality and
6 duration of power supply for IP sets
No (73%)
(Yes/ No) if applicable
Respondents perception(Yes/No) on
whether implementation of NJY has led
to
a) Improvement in standard of living Yes (87%)
b) Increase in level of literacy/
7 Yes (97%)
education levels
c) Improvement in basic amenities such
as drinking water supply, improved Yes (83%)
services in Primary Health Centers
d) Development of Small Scale
Industries leading to local
Yes (77%)
employment and increased job
opportunities
e) Reduction in migrant population to
No (87%)
urban areas
Overall satisfaction level about the
project
8 Average
(Good/ Average/Needs further
improvement)
ccxvi
The Commission notes that the BESCOM has commissioned all the
feeders under NJY phase 1&2 and achieved significant progress under
phase 3 also. But, there has been an inordinate delay in completion of
the NJY works across its jurisdiction which has resulted in non-realization
of envisaged benefits set out in the DPR when the project was initiated.
The BESCOM is hereby directed to commission the remaining feeders

taken up under phase-3 expediously and thereafter to carry out the
feeder-wise analysis so as to ensure that the objectives set out as per
DPR are accomplished. Further, the BESCOM shall ensure that NJY
feeders are not tapped illegally for running IP-sets which would defeat
the very purpose of feeder segregation scheme undertaken at huge
cost. The Consumers who are found to be tapping the NJY feeders
need to be dealt with seriously for theft of energy. The field officers/
officials who fail to note and curb illegal tapping shall be personally
held responsible for these irregulariites.
The Commission notes that, the BESCOM has carried out the analysis of
feeders commissioned under NJY indicating the benefits accrued to
the system in terms of reduction in failures of distribution transformers;
improvement in tail-end voltage; improvement in supply/reduction in
interruptions and increase in metered consumption. The analysis
reveals that there is an overall improvement in supply condition after
implementation of NJY besides benefiting the consumers in rural area,
resulting in a positive socio-economic impact. The analysis also reveals
that the consumers are satisfied as the number of hours of quality
power availability has increased, post implementation of NJY.
Further, it is noted that the BESCOM has already segregated significant

number of feeders under phase1, 2 and 3 works and consequently the
agricultural feeders are exclusively used to supply power to rural IP set
loads and the energy consumed by the IP sets could be more
accurately measured at the 11 KV feeders at the sub-stations, duly
considering the distribution losses in 11 KV lines, distribution transformers
and LT lines. The BESCOM is directed to report every month, the
ccxvii
specific consumption and the overall IP set consumption, only on the
basis of the data from energy meters installed to the agricultural
feeder, as per the formats prescribed by the Commission.
The Commission reiterates its directive to the BESCOM to continue to

furnish feeder-wise IP set consumption based on energy meter data in
respect of agriculture feeders segregated under NJY, to the
Commission every month.
x. Directive on Demand Side Management in Agriculture:
In view of the urgent need for conserving energy for the benefit of the
consumers in the State, the Commission had directed the BESCOM to
take up replacement of inefficient Irrigation Pumps with energy
efficient Pumps approved by the Bureau of Energy Efficiency, at least
in one sub-division, in its jurisdiction and report compliance thereon.
A brief note on solar water pumping system “Surya Raitha Scheme” is

as under:
Introduction: In September 2014, the GoK had envisaged a sustainable
solution to the problem of agricultural power by way of the Surya
Raitha scheme. This scheme proposes to provide net metered solar
water pumps and earn a tariff for net energy exported thereby
completely eliminating energy usage for agriculture in the converted
pumps.
Surya Raitha, pilot project:
The BESCOM has initiated action to arrange power supply to 310 IP-sets
on Harobele 11kV feeder of Kanakapura sub-division on a pilot basis.
The project provides for energizing the IP-sets with solar power by
replacing existing inefficient pump sets with efficient pump sets and
feed in excess energy to the grid on net-metering basis. The excess
energy fed into the grid will be paid back to the farmers as per the
ccxviii
tariff fixed by the Commission resulting in additional income to the
farmers apart from the income earned through crops.
The scheme will be financed by a combination of farmer’s investment,

GoK subsidy, MNRE subsidy and BESCOM’s investment through soft
loans that will be repaid by the farmer through his net metering tariff
revenues in the initial years. The net meeting revenues will be
deposited into an Escrow account and will be diverted first to service
the loan corpus fund as per the tariff of Rs 7.20 fixed by the KERC for
SRTPV / small solar projects, out of which Rs1/- will be paid as
generation based incentive to farmers through farmers’ Co-operative
Society and Rs 0.20 will be paid to the Co-operative Society for its
maintenance. Payback period is estimated at 10-12 years based on
the solar generation and utilization factor of the pump set.
To enable a self-sufficient system and to recover the loan at the

earliest, the PV panel is oversized by 50 per cent, so that the additional
power will always feed power to the grid even while the solar water
pumps are in use. The feeder will be kept on from 6 am to 6 pm during
day time for injecting excess energy to the grid. Typically, 66 per cent
of energy is fed to the pump and 33 per cent to the grid.
The breakup of cost of the project is as below:
5 HP 7.5 HP
capacity capacity
Particulars Total
per IP- per IP-
set set
Total cost of system, Rs. 6,78,342 9,08,342
Number of pumps installed, Nos 223 87 310.00
GoK contribution, Rs.Crs. 58,000 1,69,000 2.76
MNRE contribution, Rs. Crs. 1,62,000 1,62,000 5.02
Interest free loan from BESCOM, 4,08,342 5,02,342 14.43
Rs.Crs.
Upfront payment by farmer, Rs. 50,000 75,000 1.77
Crs.
Total cost of the project Rs. Crs. 23.98
ccxix
Benefits from the net-metering programme for GoK:
 Permanent stoppage of subsidized energy to agricultural

customers with an opportunity to deploy the same energy in other
revenue generating segments.
 Energy saved from agricultural customers and delivered from net-
metering can be used to bridge energy deficit in the State.
 Improved ground water ecology and agricultural output.
Benefits to the BESCOM:

 Reduction in peak load and energy consumption.
 Reduction of T &D losses.
 Save on infrastructure cost.
 Improvement in fiscal deficits.
 Reduction in failure of DTCs.
 Save on high cost energy.
Benefits to farmers:
 Increased agricultural productivity.
 Improvement of water table.
 Enhanced quality of irrigation.
 Assured day time power supply.
 Steady income from solar generation.
 Source of income during drought years.
Progress of the Project:

 The Work award was issued on 07.09.2015 to M/s Sun Edison Solar
Power India Pvt., Ltd., at a cost of Rs.19.5 crore for design, supply,
testing, installation, commissioning, repair and maintenance for a
period of 10 years for 250 numbers of grid connected Solar PV
based irrigation pump sets on net metering basis under “Surya
Raitha Scheme” on 11 kV Haroblele F2 feeder in Kanakapura Taluk.
ccxx
 The BESCOM Board has approved the scheme to cover 310 IP-sets
at a cost of Rs.23,98,25,112/-.
 The Govt. has released subsidy to an extent of Rs. 2.2 crore for 250
IP sets. The GoK will be requested for additional subsidy for 60 IP sets
and MNRE for sanctioning subsidy.
 Co-operative Society in the name of “Surya Raitha Krushi Vidyuth
Balekedarara Sahakara Sangha Niyamitha” at Harobele is
registered on 19.08.2015.
 Detailed survey has been conducted and work is in progress.
 A demo PV panel has been installed at Harobele on 24th
September, 2015, and it is running successfully.
 Street plays are conducted to create awareness among the
farmers about the scheme.
 The work is expected to complete by 28.02.2016.
The latest progress is that around 69 number of solar IP-sets have been
commissioned as on 31.05.2016. Based on the request of M/s Sun
Edison, the project work is assigned to M/s Ishaan Solar, duly obtaining
BESCOM’s Board approval. The firm has committed to commission all
the 310 number of IP-sets by the end of January 2017.
The Commission notes that the BESCOM is implementing Surya-Raitha

scheme in Kanakapura taluk as a part of DSM initiatives. But, there is
delay in implementation of this scheme. It is important to see that all
the pending works relating to this project are expedited by the
BESCOM, so as to complete the work at the earliest and the farmers
are able to avail the benefits of this scheme. Further, it is seen that the
BESCOM has not initiated any steps for implementation of DSM
measures in the other parts of BESCOM area, in order to conserve
energy and also precious water, for the benefit of farmers. The
BESCOM should focus its attention on implementation of DSM
measures and initiate steps to scale up this programme in its entire
jurisdiction.
ccxxi
The BESCOM is directed to expedite the implementation of DSM
measures in 11kV Harobele feeder in Kanakapura taluk and report
compliance thereon to the Commission within three months from the
date of this Order.
xi. Directive on Lifeline Supply to Un-Electrified households:
The Commission had directed the ESCOMs to prepare a detailed

and time bound action plan to provide electricity to all the un-
electrified villages, Hamlets and Habitations in every taluk and to
every household therein. The action plan was required to spell
out the details of additional requirement of power, infrastructure
and manpower along with the shortest possible time frame (not
exceeding three years) for achieving the target in every taluk
and district. The Commission had directed that the data of un-
electrified households could be obtained from the concerned
Gram Panchayaths and the action plan be prepared based on
the data of un-electrified households.
The physical progress of electrification of BPL households under RGGVY

XII plan is as follows:
No. of BPL Progress as on
No. of BPL househol
households ds
identified identified Cumula- Progress
Sl. Name of
for for tive in % w.r.t.
No. district July’16 Aug’16 Sep’16 Oct’16
electrificati electrifica progress Survey
on as per tion as
DWA per
survey
Bangalor
1 6,167 8,410 7,790 256 0 2 8,048 95.70%
e Rural
Davanag
2 21,294 25,652 17,202 1,801 836 1,014 20,853 81.29%
ere
3 Kolar 13,041 21,312 13,004 1,202 1,473 1,689 17,368 81.49%
Chikkaba
4 15,460 24,696 18,819 2,060 1,443 1,085 23,407 94.78%
llapura
Ramana
5 4,569 19,601 6,980 236 0 0 7,216 36.81%
gara
Total 60,531 99,671 63,795 5,555 3,752 3,790 76,892 77.15%
As per REC guidelines, the work shall be completed within 24 months

from the date of issue of work award to the Agency. The BESCOM is
ccxxii
committed to complete the project in all aspects within the stipulated
time fixed by the REC.
Further, for electrification of BPL households as per the guidelines of
REC 1,19,659 BPL households are identified in 08 districts of BESCOM
under Dena Dayal Upadhyaya Grama Jyothi Yojana (DDUGJY).
The district-wise BPL households identified for electrification under the
scheme are as follows:
No. of BPL households
Sl. identified for
Name of the district
No. electrification under
DDUGJY
1 Bengaluru Rural 4,315
2 Davangere 5,885
3 Kolar 4,563
4 Chikkaballapura 4,173
5 Ramanagara 7,689
Anekal taluk of
6 5,523
Bengaluru Urban
7 Chitradurga 36,817
8 Tumakuru 50,694
Total 1,19,659
For implementation of the same, the tenders have been floated and
the works have to be awarded to the qualified bidder after
completion of the evaluation process. The time schedule fixed for
implementation of DDUGJY scheme is 24 months from the date of
issue of Detailed Work Award (DWA).
Initially the DPRs under the RGGVY XII Plan (as per the guidelines of
REC the population of the selected village shall be more than 100)
were prepared for 5 Districts namely Bengaluru Rural, Kolar,
Ramanagara, Chikkaballapura and Davanagere districts. The same
has been approved by the REC and the detailed work awards have
been issued to the successful bidder during the month of January,
2015. As per the detailed work award issued, the time schedule for
completion of the work is 31st December, 2016.
For the remaining three districts, namely, Chitradurga, Tumakuru &

Bengaluru Urban (Anekal taluk), the DPRs for electrification of BPL
households were prepared under RGGVY XII Plan and submitted to
REC for sanctioning. Meantime, Government of India has introduced
new scheme called “Deena Dayal Upadyaya Grama Jyothi Yojana
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(DDUGJY)” in which all the villages having a population less than 100
shall also be covered under the scheme. In view of this, proposal for
electrification of BPL households in RGGVY XII plan has been dropped
in respect of Chitradurga, Tumakuru & Bengaluru Urban (Anekal taluk)
districts and proposed to include the same under DDUGJY scheme.
Under DDUGJY scheme, DPRs for all the 08 districts have been
prepared as per REC guidelines and submitted to REC for
acceptance. The monitoring committee of MoP and in turn Additional
Chief Secretary, Energy department, GoK has allocated Rs.235.36
crore to the BESCOM under DDUGJY scheme. The tenders for the
works have been floated and the detailed work awards have to be
issued to the successful bidders.
The timeline fixed for completion of works in all aspects is 24 months

from the date of issue of detailed work award, to the Agencies. The
BESCOM is committed to complete the project in all aspects within the
stipulated time fixed by REC and will be completed by the end of
January, 2019.
The project-wise coverage of un-electrified BPL households and

progress achieved as at the end of November, 2016 under RGGVY XII
Plan scheme is as under:
RGGVY XII Plan DDUGJY Total

Sl. Name of the Coverage Achieved Coverage Achieved Achieved
No. District (as per as on Nov’ (As per as on Nov’ Coverage as on Nov’
survey) 2016 survey) 2016 2016
1 Bengaluru Rural 8,410 8,048 4,315 0 12,725 8,048
2 Davanagere 25,652 22,515 5,885 0 31,537 22,515
3 Kolar 21,312 20,159 4,563 0 25,875 20,159
4 Chikkaballapura 24,696 23,674 4,173 0 28,869 23,674
5 Ramanagara 19,601 7,216 7,689 0 27,290 7,216
6 Chitradurga 0 0 36,817 0 36,817 0
7 Tumakuru 0 0 50,694 0 50,694 0
8 Bengaluru Urban
(Anekal Taluk) 0 0 5,523 0 5,,523 0
Total 99,671 81,612 1,19,659 0 2,19,330 81,612
The Commission notes with displeasure that only 77 per cent progress
has been achieved by the BESCOM, in electrification of the households
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under RGGVY XII Plan. The BESCOM needs to expedite electrification
of un-electrified households so as to complete the same at the earliest.
It is noted that the electrification of households has not progressed as
targeted for the last many years resulting in large number of
households in the State remaining without electricity. The Commission
expresses its displeasure over the BESCOM’s tardy progress and
apparent lack of seriousness in electrification of un-electrified
households in its jurisdiction. The BESCOM must implement the
programme within in a time bound period to ensure that the people
without electricity are provided with the basic need of electricity.
Further, the Commission concerned with the slow pace of progress of

this programme, in its previous Tariff Orders had directed the BESCOM
to cover electrification of 5 per cent of the total identified un-
electrified households every month beginning from April, 2015, so as to
complete this programme in about twenty months. However, the
progress achieved in electrification of households so far by the
BESCOM is disappointing.
The Commission directs the BESCOM to expedite action to provide

electricity to the un-electrified households and cover all the remaining
households at the earliest and report compliance thereon to the
Commission regarding the monthly progress achieved from May, 2017
onwards. The Commission as already indicated in the earlier Tariff
Orders would be constrained to initiate penalty proceedings under
section 142 of the Electricity Act, 2003, against BESCOM in the event of
non-compliance in the matter.
xii. Directive on Implementation of Financial Management Framework:
The present organizational set up of the ESCOMs at the field level

appears to be mainly oriented towards maintenance of power supply
without a corresponding emphasis on realization of revenue. This has
resulted in a serious mismatch between the power supplied,
expenditure incurred and the revenue realized in many cases. The
continued inability of ESCOMs to effectively account the input energy
and its sale in different sub-divisions of the ESCOM in line with the
ccxxv
revenue realization rate fixed by the Commission, urgently calls for a
change of approach by the ESCOMs, so that the field level
functionaries are made accountable for ensuring realization of
revenues vis-à-vis the input energy supplied to the jurisdiction of sub-
division/ division.
The Commission had therefore directed the BESCOM to introduce a

system of Cost-Revenue Centre Oriented sub-divisions at least in two
divisions, on a pilot basis, in its operational area and report the results of
the experiment to the Commission.
The Commission has principally agreed to dispense with the

implementation of SBU concept, instead has suggested to implement
Financial Management Framework in line with a report prepared by
M/S PWC on pilot basis in selected divisions in BESCOM. Based on the
Commission’s direction, the division-wise draft financial evaluation was
done based on the actuals of FY16. The Draft results are tabulated
below:
ccxxvi
Profit/ Profit /
Cost
Net PP Other Total Demand Collecting ARR ARR loss loss
Divisions per
Consumption Cost Cost Cost Total Total Demand Collection Demand Collection
unit
basis basis
Chandapura 1309.85 4.37 0.37 4.74 937.41 876.51 7.16 6.69 4.74 317 256
Chikballapura 538.34 4.37 1.07 5.44 221.88 212.88 4.12 3.95 5.44 -71 -80
Chintamani 465.43 4.37 0.63 5.00 160.32 152.19 3.44 3.27 5.00 -72 -81
Chitradurga 510.21 4.37 1.10 5.47 198.47 192.20 3.89 3.77 5.47 -81 -87
Davanagere 789.16 4.37 0.85 5.22 399.15 314.21 5.06 3.98 5.22 -13 -98
Harihara 512.11 4.37 0.68 5.05 184.39 176.08 3.60 3.44 5.05 -74 -83
Hebbala 985.49 4.37 0.64 5.01 649.97 634.19 6.60 6.44 5.01 156 140
Hiriyuru 522.88 4.37 1.00 5.37 197.07 181.32 3.77 3.47 5.37 -84 -99
HSR 1346.47 4.37 0.54 4.91 1004.69 961.50 7.46 7.14 4.91 344 300
Indiranagar 1952.73 4.37 0.48 4.85 1519.25 1466.00 7.78 7.51 4.85 572 519
Jayanagar 1410.10 4.37 0.66 5.03 1000.01 981.78 7.09 6.96 5.03 291 273
K.G.F 984.96 4.37 0.47 4.84 418.04 385.85 4.24 3.92 4.84 -59 -91
Kanakpura 619.73 4.37 0.42 4.79 277.10 254.60 4.47 4.11 4.79 -20 -42
Kengeri 734.55 4.37 0.42 4.79 431.72 417.37 5.88 5.68 4.79 80 66
Kolara 456.87 4.37 0.94 5.31 207.88 185.06 4.55 4.05 5.31 -35 -58
Koramangala 1860.13 4.37 0.40 4.77 1464.99 1400.13 7.88 7.53 4.77 578 513
Madhugiri 664.46 4.37 0.82 5.19 225.78 197.57 3.40 2.97 5.19 -119 -147
Malleswaram 641.39 4.37 1.66 6.03 492.50 478.33 7.68 7.46 6.03 106 92
Nelmangala 1036.19 4.37 0.59 4.96 608.53 537.95 5.87 5.19 4.96 95 24
Peenya 989.84 4.37 0.69 5.06 681.53 660.04 6.89 6.67 5.06 181 159
Rajajeshwarinagar 537.35 4.37 0.90 5.27 356.85 347.03 6.64 6.46 5.27 74 64
Rajajinagara 762.03 4.37 0.89 5.26 499.27 490.43 6.55 6.44 5.26 98 90
Ramnagara 543.09 4.37 0.77 5.14 294.57 290.00 5.42 5.34 5.14 15 11
Shivajinagara 1011.70 4.37 0.70 5.07 730.22 707.71 7.22 7.00 5.07 217 195
Tipturu 516.00 4.37 0.76 5.13 188.23 170.07 3.65 3.30 5.13 -76 -95
Tumkuru 1342.36 4.37 0.75 5.12 567.48 536.32 4.23 4.00 5.12 -120 -151
Vidhanasouda 457.66 4.37 1.12 5.49 346.72 340.81 7.58 7.45 5.49 95 90
Yelahanka 1037.08 4.37 0.45 4.82 527.17 489.81 5.08 4.72 4.82 27 -10
24538
The BESCOM has fixed division-wise targets for FY17 as under:

Approved Targeted
Contribution
Divisions by KERC for ARR For
factor
FY17 FY17
Chandapura 1.29 5.96 7.67
Chikballapura 0.74 5.96 4.42
Chintamani 0.62 5.96 3.69
Chitradurga 0.70 5.96 4.17
Davanagere 0.91 5.96 5.42
Harihara 0.65 5.96 3.86
Hebbala 1.19 5.96 7.07
Hiriyuru 0.68 5.96 4.04
HSR 1.34 5.96 8.00
Indiranagara 1.40 5.96 8.34
Jayanagara 1.28 5.96 7.60
K.G.F 0.76 5.96 4.55
Kanakpura 0.80 5.96 4.79
Kengeri 1.06 5.96 6.30
Kolara 0.82 5.96 4.88
Koramangala 1.42 5.96 8.44
Madhugiri 0.61 5.96 3.64
Malleswaram 1.38 5.96 8.23
Nelamangala 1.06 5.96 6.30
ccxxvii
Peenya 1.24 5.96 7.38
Rajajeshwarinagar 1.19 5.96 7.12
Rajajinagar 1.18 5.96 7.02
Ramanagara 0.98 5.96 5.81
Shivajinagar 1.30 5.96 7.74
Tipturu 0.66 5.96 3.91
Tumkuru 0.76 5.96 4.53
Vidhanasouda 1.36 5.96 8.12
Yelahanka 0.91 5.96 5.45
Draft evaluation and targets are set and regarding setting up of

targets to distribution loss, action will be initiated.
Further, as recommended by the Consultant, M/s PWC, financial
evaluation can be done in two steps. Revenue and Cost Management
as indicated in stage II implementation is tabulated at page 111 of the
BESCOM’s Tariff application. By considering average power purchase
cost of BESCOM to all divisions, the cost component of each division
varies. This has resulted in a loss in majority of the rural divisions and
profit in case of divisions under BMAZ. Further, financial evaluation on
Revenue Management as indicated in Stage-I implementation is
tabulated below:
Evaluation of results – April to Oct’16 – Performance against ARR targets
Divisions Sales in Demand Collection ARR-D ARR-C ARR- Taret Margin Profit/(loss)
Mu
Demand Collection Demand Collection
2 3 4 5=3/2 6=4/2 7 8=5-7 9=6-7 10=2*8 11=2*9
Chandapura 828.33 597.78 587.08 7.22 7.09 6.62 0.60 0.47 49.43 38.73
Chikballapura 341.33 149.08 141.17 4.37 4.14 6.1 (1.73) (1.96) (59.13) (67.04)
Chintamani 274.72 104.95 94.1 3.82 3.43 5.84 (2.02) (2.41) (55.49) (66.34)
Chitradurga 341.28 140.48 134.61 4.12 3.94 6.14 (2.02) (2.20) (69.07) (74.94)
Davanagere 435.13 202.92 197.94 4.66 4.55 6.05 (1.39) (1.50) (60.33) (65.31)
Harihara 288.9 122.15 121.09 4.23 4.19 5.92 (1.69) (1.73) (48.88) (49.94)
Hebbala 593.2 418.57 422.5 7.06 7.12 6.41 0.65 0.71 38.33 42.26
Hiriyuru 329.11 130.51 124.76 3.97 3.79 5.98 (2.01) (2.19) (66.30) (72.05)
HSR 864.61 683.04 672.83 7.9 7.78 6.68 1.22 1.10 105.48 95.27
Indiranagara 1187.6 989.35 1000.1 8.33 8.42 6.66 1.67 1.76 198.43 209.19
Jayanagara 842.15 636.54 644.78 7.56 7.66 6.62 0.94 1.04 79.04 87.28
K.G.F 546.08 261.82 243.21 4.79 4.45 6 (1.21) (1.55) (65.83) (84.44)
Kanakpura 378.48 187.25 181.46 4.95 4.79 5.88 (0.93) (1.09) (35.30) (41.09)
Kengeri 461.34 291.5 288.37 6.32 6.25 6.08 0.24 0.17 11.01 7.88
Kolara 315.99 147.52 136.58 4.67 4.32 5.95 (1.28) (1.63) (40.49) (51.43)
Koramangala 1106.8 942.61 938.82 8.52 8.48 6.67 1.85 1.81 204.37 200.58
Madhugiri 492.77 179.63 166.82 3.65 3.39 5.98 (2.33) (2.59) (115.05) (127.86)
Malleswaram 385.15 281.75 283.16 7.32 7.35 6.5 0.82 0.85 31.40 32.81
Nelmangala 671.85 403.43 385.12 6 5.73 6.16 (0.16) (0.43) (10.43) (28.74)
Peenya 613.08 446.07 451.89 7.28 7.37 6.19 1.09 1.18 66.57 72.39
Rajajeshwarinagara 331.72 233.76 237.97 7.05 7.17 6.35 0.70 0.82 23.12 27.33
Rajajinagara 471.03 325.85 330.95 6.92 7.03 6.25 0.67 0.78 31.46 36.56
Ramnagara 318.83 199.78 198.59 6.27 6.23 6.7 (0.43) (0.47) (13.84) (15.03)
Shivajinagara 648.99 491.49 492.97 7.57 7.6 6.44 1.13 1.16 73.54 75.02
Tipturu 374.37 142.97 135.71 3.82 3.63 6.18 (2.36) (2.55) (88.39) (95.65)
Tumkuru 826.07 381.39 369.18 4.62 4.47 6.14 (1.52) (1.67) (125.82) (138.03)
Vidhanasouda 273.46 217.94 217.78 7.97 7.96 6.33 1.64 1.63 44.84 44.68
ccxxviii
Yelahanka 544 333.33 319.89 6.13 5.88 6.27 (0.14) (0.39) (7.76) (21.20)
In Step-I also, majority of the rural divisions are under loss, since, same
yardstick is used to measure urban and rural divisions, negative results
are obtained. Hence, evaluation should not be based on the results
but based on the targets.
The Commission has forwarded a report prepared by the Consultants,

M/s PWC regarding implementation on Financial Management
Framework to bring in accountability on the performance of the
divisions / sub-divisions by analyzing the quantum of energy received,
sold and cost thereon so that the ESCOMs conduct their business on
commercial principles.
The BESCOM has not submitted the compliance in respect of
implementation of Financial Management Framework, on quarterly
basis to the Commission. In the details furnished to the Commission for
FY16, it is observed that huge variation in the figures under column
Profit/Loss in respect of many O&M divisions which needs to be verified
and corrective action initiated.
The BESCOM is directed to review the performance of the divisions &
sub-divisions in respect of energy received, sold, average revenue
realization and average cost of supply using the financial framework
Model. Further, the BESCOM is directed to analyze the following
parameters each month to monitor the performance of the
divisions/sub-divisions at corporate level:
a) Target losses fixed and the achievement at each stage.

b) Target revenue to be billed and achievement against each
category of consumers.
c) Target revenue to be collected and achievement under all
categories.
d) Targeted distribution loss reduction when compared to previous
years’ losses.
e) Comparison of high performaning divisions in sales with low
performaning divisions.
ccxxix
Based on the analysis, the BESCOM needs to take corrective measures
to ensure100 per cent meter reading, billing, and collection; analysis of
sub-normal consumption; replacement of non-recording meters; etc.
The Commission reiterates its directive that the BESCOM shall
implement the financial management framework model and report
compliance thereon on a quarterly basis to the Commission.
xiii. Directive on Prevention of Electrical Accidents:

The directive was as follows:
“The Commission has reviewed the electrical accidents that
have taken place in the State during the year 2015-16 and with
regret noted that as many as 430 people and 520 animals have
died due to these accidents.
From the analysis, it is seen that the major causes of the

accidents are due to snapping of LT/HT lines, accidental contact
with live LT/HT/EHT lines, hanging live wires around the electric
poles /transformers etc., in the streets posing great danger to
human lives.
Consideing the above facts, the Commission hereby directs the

BESCOM to prepare an action plan to effect improvements in its
distribution network and implement safety measures to prevent
electrical accidents. A detailed division-wise action plan shall be
submitted by the BESCOM to the Commission”.
i. Instructions have been issued from Corporate Office to rectify

the identified hazardous installations, on top priority.
ii. Third Saturday of every month is conducted as “safety day” and

instructions are issued from Corporate Office to the field staff to
conduct safety day, every month, wherein the officers have to
educate the field staff regarding safety and to take at least one
feeder maintenance work every month in each division.
ccxxx
iii. LoI is issued for fixing the name plate for every DTC to indicate
the details of incoming & outgoing cables and change over
points.
iv. Several circulars have been issued from the Corporate Office
regarding safety to staff and public.
v. Instructions have been issued from Corporate Office to attend

to the observations in respect of DTCs and lines suggested by
the Electrical Inspectorate, GoK.
vi. Safety pamphlets, Book markers and safety game boards have
been distributed during ELECRAMA-2016.
vii. LT spacers are being installed whereever required.
viii. LTD boxes are being installed where ever required.
ix. Instructions have been issued to all the field staff to immediately
rectify the dangling wires on transformers/poles, raise the aerial
fuse boards to safety height, prune the trees along the HT/LT
lines, clean the transformer/ RMU surroundings, maintain feeder
pillar boxes and LTD boxes etc.
x. Modification of 11KV GoS in all the DTCs in BMAZ area has been
carried out.
Further, the number of hazardous locations/installations identified in

BESCOM network for FY16 were 4,095 and the number of such
installations rectified in FY16 were 4,837. The number of hazardous
locations/installations identified in BESCOM network for the FY17 were
4,172 and the number of such installations rectified up to November
2016 are 2,740.
The following is the action plan to reduce the accidents:
a. Instructions have been issued from Corporate Office to conduct

Safety Day to educate staff & public regarding safety and also to
discuss the system improvement of at least one feeder (end to
end) at a time. The progress of the same is being reviewed by the
Corporate Office during monthly accident review meeting.
ccxxxi
b. In the meeting held on 21.12.2016, it was decided to provide a set
of safety equipment to the linemen like life-time items and regular
items so that each set of materials is provided to the linemen.
Tenders will be called for procuring set of life-time items and
regular items (based on the guarantee period) separately.
c. By organizing a function at BESCOM, the set of items procured

shall be distributed among all the linemen.
d. By 1st of March, 2017, the safety equipment will be procured and

distributed. For other regular safety equipment; the tenders will be
called for every six months / one year, based on their guarantee
period.
The Commission notes that the BESCOM has taken various remedial
measures including rectification of hazardous installations and carried
out improvements to its distribution network. However, despite taking
these measures by the BESCOM, the number of fatal electrical
accidents involving both human and livestock has increased, which is
a matter of serious concern. The increase in the number of electrical
accidents indicates that identification and rectification of hazardous
installations, which is a continuous process, should be regularly done
without any let up. Therefore, the BESCOM should make more
concerted efforts for countinuous identification and rectification of all
the hazardous installations, including streetlight installations / other
electrical works under the control of local bodies to prevent electrical
accidents. In addition, it is also important that the BESCOM takes up
awareness campaign through visual/print media continuously about
safety aspects among public.
During the ESCOMs’ Review meetings held, the Commission has been
emphasizing that the ESCOMs should take up periodical preventive
maintenance works, install LT protection to distribution transformers,
conduct regular awareness programme for public on electrical safety
ccxxxii
aspects in use of electricity and also ensure use of safety tools &tackles
by the field staff besides imparting necessary training to the field staff
at regular intervals.
Further, the Commission is of the view that the hazardous installations in

the distribution network is the result of works carried out shabbily
without adhering to the best construction practices as per the
standards, while taking up construction/expansion of the distribution
network. Therefore, the BESCOM shall take adequate and effective
steps to ensure that distribution network is hazardous free. In addition to
this, the BESCOM also needs to conduct regular safety audit of its
distribution system and to carryout preventive maintenance works as
per schedule in order to keep the network equipment in healthy
condition.
The Commission has already forwarded the Safety Technical Manual to

the ESCOMs, which prescribes detailed steps to be taken on each of
the elements of the distribution system, which would help the engineers
in the field to identify and attend to the defects. In this context, it is
necessary that the ESCOMs are required to continuously monitor the
implementation of the suggestions / recommendations contained in
the Safety Technical Manual to ensure that distribution network is
maintained properly.
The Commission, therefore, reiterates its directive that the BESCOM shall
continue to take adequate measures to identify & rectify all the
hazardous locations/installations existing in its distribution system under
an action plan to prevent and reduce the number of electrical
accidents occurring in its distribution system. The compliance thereon
shall be submitted to the Commission every month, regularly.
APPENDIX – 1
Statement showing the objections of the Stakeholders/Public,

BESCOM’s Response and the Commission’s Views thereon
Objections on Tariff Issues:
Objections Replies by BESCOM

1. As per Clause 2.7.1 of the MYT BESCOM has filed Truing up application
ccxxxiii
Regulations 2006, an application for for FY16, and Annual Revenue
determination of tariff for any Requirement for FY18 and Tariff revision for
financial year, should be made not FY18 on 30.11.2016 within the time limit as
less than 120 days before the per regulation of 2.7.1 of the MYT
commencement of such financial Regulations.
year and hence, this application is
not maintainable.
Commission's Views: The reply furnished by BESCOM is acceptable.
2. BESCOM should have clearly BESCOM has filed the Truing up of FY16
indicated the steps taken for based on Audited Accounts for FY16. The
improvement of efficiency after the Annual Revenue Requirement for FY18
issue of the latest order by Hon’ble and Tariff revision for FY18 is sought based
Commission and also the efficiency on the projections of sales and power
gains as per the earlier orders issued, purchase with respect to historical data.
which could be ultimately Truing up for FY16 is placed before the
transferred to the consumers Commission with comparison of
proportionately. In the absence of Commission’s approved figures versus
any specific gains the application is actual figures for FY16 along with the
not maintainable. explanation. Efficiency gains will be
measured by the Commission and the
Commission will decide about sharing of
gains duly considering the approved
targets.
Commission's Views: The reply furnished by the BESCOM is noted and the APR is
carried out as per the MYT Regulations.
3. Regulatory asset of Rs.305.50 Crores While approving the APR for FY 15, an
pertaining to FY13 mentioned in the amount of Rs. 611.00 Crores was set aside
truing up of FY16 sought to be as regulatory asset to be recovered in the
recovered in FY18 after a lapse of 4 tariff over the next two years (FY 16 and FY
years, is supposed to be recovered 17) and also the Commission had decided
from the Government. Hence the to allow carrying cost at 12% on the
petition is not maintainable. regulatory asset to be assessed at the time
of Annual Performance Review for FY15
and FY16. Hence, an amount of Rs.305.50
Cr. is considered for FY18.
 The State commission should have
allowed the carrying cost at the
prevailing market lending rate for the
carrying cost so that the efficiency of the
distribution company is not affected.
 A regulatory asset is a deferred
expenditure to be recovered from the
future consumers. In order to avoid tariff
shock to its consumers, the revenue
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recovery although recognized, is
deferred for the future.
 The Regulators do permit carrying costs
of Regulatory Assets to the distribution
utilities to manage their cash-flow
requirements. However, interest cost
allowed for short term borrowing costs, to
meet the shortfall in revenue is not
sufficient.
 This affects the ability of BESCOM to raise
commercial debt in the market, as the
Company’s balance sheets get
compromised on account of building up
of its Regulatory Assets.
Commission's Views: The Commission, duly taking note of the reply by BESCOM, has
dealt with the matter suitably in the relevant chapter of this Tariff Order.
4. Truing up arrears of Rs.367.33 Crs. BESCOM’s ERC filing considers 12% as
pertaining to FY14 considered for carrying cost on the deficits of FY-13 and
recovery in FY18, will be a burden on FY14 and not Rs.305.5 Crs, as stated by
the consumers. Normally, truing up the objector.
exercise results in reduction of the
The Commission, which allows working
revenue gap rather than increase
capital on normative basis in line with the
the same.
MYT regulations, cleared the deficit of
Rs.367.33 Crs. for FY14 as it was found to
be complying with MYT regulations.
BESCOM normally projects both actual
and approved realizations in the true up
exercise to work out the actual deficit
and seeks approval for the expenditure
incurred over and above the realization
duly allowing a carrying cost limited to
12%.
A CRISIL study states that the realized tariff
as a percentage of cost is 74% in India
compared to 115-120 percent in
developed countries.
Commission's Views: The Commission has dealt with this matter in the appropriate
chapter of this Tariff Order.
5. Truing up arrears of Rs. 2096.34 Crs Any proposal from BESCOM and the
pertaining to FY16, as against the approval of KERC are subject to truing up
approved gap of 700.28 Crs, based on the actual transactions. All
considered for recovery in FY18, power purchases made with the approval
after a lapse of 2 years, will burden of the Commission, accounts for 86% of
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the consumers. As a matter of fact, the expenditure and a minor variation in
truing up exercise should result in the cost of power purchase will have a
reduction of the revenue gap rather huge impact on cash analysis. As against
than increase the same and the the approved average power purchase
deficit due to the inefficiency of cost of Rs.3.89/unit, BESCOM has incurred
BESCOM should not be loaded on to a cost of Rs.4.32/unit for FY16.
the consumers.
Commission's Views: The Commission has dealt with this matter suitably in the
relevant chapter of this Tariff Order.
6. As per the National Tariff Policy, the Cost to serve is a process-driven
cross subsidy should be within ± 20% accountancy tool to calculate the
of the cost of supply and the Tariff profitability of a customer, based on the
determination should be based on actual business activities and costs
the cost of supply. The IP sets are incurred to serve the customer. In the
subsidized by the other categories of context of supply chain management, it
consumers mainly the Industrial can be used to analyze how costs are
sector and the cross subsidy consumed throughout the supply chain.
payable by Industrial consumers But it is not applicable to BESCOM.
should be reduced.  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 cannot be eliminated.
 The tariff for different categories of

consumers 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.
 Further, the Commission is
governed by the National Tariff Policy in
fixation of tariff.
Commission's Views: The Commission has dealt with this matter in the appropriately
in the relevant chapter of the Tariff Order. The Commission’s endeavor is to reduce
the cross subsidies gradually.
ccxxxvi
7. Though the average cost of supply is The Tariff design of the National Tariff
Rs.5.69 per unit, IP Sets are charged policy is reiterated “…..Consumers
at Rs.2.38 per unit and the below poverty line who consume below
difference is passed on to the other a specified level, as prescribed in the
consumers through cross subsidy. National Electricity Policy may receive a
special support through cross subsidy.
Tariffs for such designated group of
consumers will be at least 50% of the
average cost of supply……..”
The tariff subsidy is aimed at providing
concessional rates to farmers, with IP sets
of 10HP and below, who are considered
as small farmers and classified under LT4a
tariff. Hence, a special support, as per the
National Tariff Policy, is extended by the
Commission. An arrangement is made to
supply 3 phase power for a period of
seven hours only for farm sector which
requires about 30% of the BESCOM’s
consumption. Further, Government of
Karnataka has initiated Suryaraitha
scheme, on a pilot basis, to harness Solar
Energy for the benefit of the farmers, who
can sell excess power, if any, to the
Government.
Commission's Views: The reply by BESCOM is noted.
8. Actual ARR of Rs.15917.96 Crs for As requisite quantum of power had not
FY16 is Rs.1499.23 Crs. more than the been allotted from KPCL, CGS and major
approved ARR and additional IPPs, BESCOM purchased power, on short
outlay sought in the petition should term basis to meet the demand of the
not be approved. A large number of consumers. Therefore, the contention of
HT consumers going out of BESCOM objector for non-admission of the
grid is a matter of concern and additional expenditure incurred for
needs corrective action. purchase of power during FY16 is not
justifiable.
Commission had approved HT2a sales of
5804.9 MU for FY16 in an optimistic way,
whereas, the actual sales of 4593.21 MU
was marginally lower by 157 MU in
comparison with FY15 sales of 4750.15 MU.
This clearly indicates that HT consumers
have not left Karnataka but opt for open
access.
Commission's Views: The reply furnished by the BESCOM is found to be reasonable.
ccxxxvii
9. BESCOM purchased 1257.419 MU The tariff revision is proposed with certain
lesser than the approved quantum assumptions and normative principles,
of energy for FY16 with a resultant which alter year on year due to various
saving of Rs.489.16 Crs and the same reasons. Final Accounts of FY16 with
should not be included in the actual figures indicate a revenue gap of
revised ARR. Rs.1424.40 Crs. in comparison with outlay
approved by the Commission. Further,
the average power purchase cost
calculated with all inputs works out to be
Rs.4.32, as against the approved cost of
Rs.3.89 per unit. The above aspects
explain the reasons for mismatch
between the receipts and expenditure for
the year FY16.
Commission's Views: The reply furnished by the BESCOM is noted. The Commission
has dealt with this matter appropriately, in the relevant chapter of this Tariff Order.
10. Additional capital expenditure Commission in its Tariff Order dated
incurred by BESCOM for FY 16, i.e. 02.03.2015, approved Rs.627 Crs. as a
Rs.1374.31 Crs. as against the capital outlay for FY 16, though BESCOM
approved outlay of Rs.627 Crs, had sought a Capex of Rs.2050 Crs.
should not be approved in the
absence of appropriate justification
Commission's Views: The aspect has been dealt with suitably in the relevant chapter
of this Order.
11. Excess expenditure of Rs.216.96 Crs. In obedience to the Commission’s
incurred by BESCOM for O & M directive, action initiated to recruit ground
activities should not be approved by level staff and the additional cost on
the Commission. account of new recruitment for the year
FY16 is one of the reasons for increase in
Employee cost. Further, BESCOM is
requesting the Commission to allow Rs.
1219.34 Crs. as O&M expenditure and not
Rs.1421.97 Crs. as stated by the objector.
Commission's Views: The reply furnished by BESCOM is noted and the Commission
has dealt with the matter appropriately in the relevant chapters of this Tariff Order.
12. BESCOM has not indicated the Time of Day tariff is a demand side
benefits of ToD metering like management measure to reduce the
reduction in the peak load etc. In peak (morning or evening). As per the
case, no tangible reduction is existing ToD tariff structure, penalty at
noticed in the peak load ToD Rs.1.25 per unit is levied for the
metering/billing should be made consumption during evening peak hours
optional. Morning peak is contributed i.e. 6PM to 10PM and an incentive at the
by the domestic consumers and rate of Rs.1.00 per unit extended to the
industries. off peak consumption during 10PM to 6
AM. Since the time slots for rewarding
ccxxxviii
and penalizing are divided unequally the
HT consumers stand to gain.
Consumers, who neither reduce the load
during the peak hour nor shift the load to
the off peak hours, stand to lose owing
to the imposition of penalty and their
failure to be rewarded with incentive.
Further, BESCOM welcomes the proposal
of the objector to make TOD optional
with the revised proposal submitted to
the Commission’s decision.
HT consumers and domestic consumers
respectively consume 50% and 25% of
the total energy consumption of
BESCOM. Installation of solar water
heater is mandatory for all new domestic
consumers. Hence, the perception of
the objector that the morning peak is
due to domestic consumers is not
justified.
Commission's Views: The Commission notes the reply furnished by BESCOM and the
Commission’s decision on modification in the ToD scheme is dealt with in relevant
13. BESCOM has not produced subsidy The details of subsidy claimed and
letter for allocation of subsidy. released in respect of BJ/KJ and IP set
below 10 HP are furnished in BESCOM’s
replies to KERC’s preliminary observations.
Commission's Views: Reply furnished by BESCOM is acceptable.
14. BESCOM is yet to achieve the AT&C losses for FY16 computed as 12.77%
segregation of technical and can be reduced further if the dues of
commercial losses mandated in the urban and rural local bodies are cleared.
Tariff Policy - 2006. BESCOM is also taking necessary action
for reduction of distribution losses as per
directives of the Commission.
Commission's Views: The reply furnished by the BESCOM is noted. However, the
Commission emphasizes that, conducting energy audit is the only way for plugging
leakage and to make the BESCOM viable both technically and financially.
15. The amount of interest paid by Commission is not passing the interest on
BESCOM to the generators, for the belated payment made to the generators
delayed clearance of their dues, and BESCOM does not include the same
should not be passed on to the in tariff filing.
Consumers.
Commission's Views: The reply furnished by BESCOM is noted. The Commission has
dealt with the matter appropriately in the relevant chapter of this Tariff Order.
16. Average cost of hydel and thermal BESCOM, on a yearly basis procures
ccxxxix
power are 84.31 and 435.51 paise approximately 35% of the total energy
per unit respectively and BESCOM input from Hydel and thermal sources of
should utilize Hydel Power to the KPCL and utilizes the hydel power to the
extent possible. extent of allocation by GOK. The
escalation in power purchase cost during
FY16 is owing to increase in KPCL’s thermal
average power purchase cost from
Rs.3.90 to Rs.4.26/unit.
Commission's Views: The reply by BESCOM is noted and the Commission has dealt
with the matter suitably in the relevant chapter of the Tariff Order.
17. Functioning of Small Scale Industries As BESCOM is already reeling under
is far from satisfactory owing to financial crunch, a reduction of Re.1 in
financial problems and a few have the tariff for small scale industries cannot
already closed their operation. The be considered.
power consumption of this category
is quite low and a separate Tariff,
Re.1.0 lower than the other Tariff, for
small scale industries can be
considered.
Commission's Views: The retail tariff to the consumers is being fixed keeping in view
the recovery of average cost of supply and the cross subsidy levels with reference to
the average cost of supply. Fixing a tariff below the cost of supply would entail
meeting the balance cost either by government subsidy or through cross
subsidization. In the absence of subsidy from the Government to MSMEs, extending
concessions to this category would result in increase in cross subsidy levels of other
categories of consumers, which is not permissible under the Tariff Policy.
18. 0.66% of consumers coming under Gap between demand and supply is
HT category contribute revenue of increasing year on year. As huge
45%. But, the unscheduled load investments are required in power
shedding and frequent interruptions generation, Peenya Industries Association,
cause the industries an unbearable an association of small scale industries,
loss; many of them have already may consider an investment in power
been closed due to unreliable sector to help their own members.
power supply. BESCOM on its part, is striving hard to
provide 24X7 supply to industries.
Generation from BTPS unit 3 and
Yeramarus would give the industries the
required relief.
19. High energy intensive units such as Tariff of other states cannot be compared
Foundries, Forging Shops, Heat with that of Karnataka, as the state has its
treatment shops, Blow Molding own profile of energy sources and energy
units, steel Mills etc. in Karnataka, consumption and adopt different
which are under serious threat of method of charging. Some states levy
closure, due to high power cost and Fuel escalation charges, Reliability
ccxl
competition from neighboring charges beside energy charges and
states, require a substantial impose restriction on power usage etc.
reduction in tariff for their survival.
Commission's Views: BESCOM’s reply is acceptable.
20. BESCOM has not commented on the The details of subsidy claimed and
provision: ‘Subsidy should be paid by released are illustrated at page 49 of
the Govt. to the ESCOMS before the BESCOM replies to Commission’s
commencement of the quarter. If not preliminary observation.
paid, it should be loaded on to the
subsidized consumers’.
Commission's Views: Reply furnished by BESCOM is noted. However, BESCOM
should ensure that its claims are met fully on time.
21. Industrial consumption in respect of The remarks of the objector that “most of
HT-2(a) has been steadily declining, the time any residual energy that needs to
whereas, the requirement of IP sets be accounted will be booked under IP
is increasing indicating higher consumption, similarly T&D losses are also
requirement for the farm sector. it is booked under IP set consumption” is
also estimated that about 4682.91 wrong. In fact, if BESCOM shows loss level
MU are generated by captive more and IP consumption level less, it is
generation and it is likely that advantageous to BESCOM. By lowering
industrial consumers will further the sales, the average cost of supply will
move away from the grid. At increase. Likewise, the cost of supply will
present only about 35% of the also increase, which can be passed
consumers are meeting the entire through in tariff. (Commission will disallow
tariff requirements. There is a huge the Power purchase cost to that extent, still
difference in distribution cost it is advantageous). Whereas, if sales are
among ESCOMs and surprisingly all shown on a higher side, Average cost of
of them are proposing for a uniform supply will decrease. If cost of supply
hike. Therefore, the authenticity of decreases, pass through in tariff is not
ERC figures is suspected. Allocation permissible, as the consumers would have
of high cost energy to BESCOM is reached the average cost of supply.
not in accordance with the In fact, Commission approved the
national electricity policy and industrial rate within the bracket of +20%
consumers of this company are of average cost of supply and the actual
discriminated. contribution is still less than the approved
level. However, Commission would take
care of the cross subsidy portion.
Tariff revision proposal is to be allowed for

the energy sector to sustain as otherwise
the sector will collapse. If not the sector
will suffer a lot. Approximately 8 lakhs of
Irrigation consumers seek cross subsidy
and almost 92% of the consumers are
paying the cost. Actual realization of cross
subsidy from the Industrial sector is
ccxli
between 11 to 13%. The relevant data
seeking tariff revision is tabled before the
Commission, and Commission will take
care of authenticity of the documents.
with the matter suitably in the relevant chapter of the Tariff Order.
22. Sharavathi and Nagajari hydro Fixation of tariff is guided by National Tariff
stations have been fully policy and other policy guidelines issued
depreciated and KPC should bring by the Central/Stage Governments.
down the cost of energy Natural resources of the State i.e., Hydel
generated by them. The cost of and Thermal power are allocated based
energy from KPC Thermal Plants is on the paying capacity. At present
much higher than the cost at allocation of power from State resources
which Central generating stations are done by State Government and
supply and the same should also accepted by the Commission. The
be reduced. Open access may relevant data seeking tariff revision is
be extended to the consumers tabled before the Commission.
drawing power even below 1 MW.
Commission should publish the
annual reports of ESCOMs
mentioning the breakup of
accumulated losses, efficiency,
improvements etc. for the
information of public.
with the matter of power purchase suitably in the relevant chapter of the Tariff
Order.
23. Tariff in Karnataka should be lower Tariff of other states cannot be compared
than the prevailing tariff of other with that of Karnataka. Each state has its
States since major source of own profile of energy and energy
generation in Karnataka is Hydel, consumption. Different states adopt
which is much cheaper than power different methods of charging. Some
sources like thermal / Nuclear / RE. states are levying Fuel escalation charges
On the contrary, the tariff in beside energy charges, Reliability
Karnataka is higher than the tariff in charges, Restriction on power usage etc.
many other states However, it is mandatory to all the
DISCOMs to file their ARR before KERC
every year as per the decision of ATE vide
suo-motu appeal No. OP 01/2011.
Commission's Views: The reply by BESCOM is acceptable.
24. Diagnostic centres currently billed The request is not justifiable for the
under higher HT 2 (b) tariff should be following reasons:
brought HT2(c) (ii) as applicable to  A hospital is a medical institution
hospitals for the following reasons: where sick and injured people are
 Services provided by diagnostic given medical or surgical care with
centres are in the nature of required infrastructure and
ccxlii
medical services and use of specialized medical and nursing
electricity as similar to use by staff and medical equipment. A
diagnostic section of any diagnostic centre does not have all
hospital. these facilities or functions.
 The National Tariff Policy provides  BESCOM can classify its consumers
flexibility to the licensees to within the Commission’s approved
charge lower tariff than tariff and not create an additional
approved by the State category
Commission if competitive  Hospitals were reclassified under
conditions require so without lower HT2C tariff to make
having a claim on additional available health care services at
revenue requirement on this economical price. Diagnostic
account. centres are doing business and
 Lower tariff should make the not service. Hence diagnostic
preventive care services centres are classified under
affordable to the lower middle commercial tariff.
class and poor families.
 Diagnostic centre is an extended
hospital literally as they work on
referral by doctors and the test
results are referred by them to
take appropriate medical
corrective decision.
 Diagnostic centres extend
internal health care by medical
doctors and attendants to the
patients coming for
investigation/ procedures.
 As per the provisions of the
Electricity Act, similarly placed
consumers cannot be
discriminated in determination
of tariff applicable to them.
 Central Ministry of Power and ATE
have always held that medical
hospital and diagnostic centres
have common functions.
 Hospitals which were under
higher tariff were reclassified
under lower tariff.
Commission's Views: The Commission has dealt this issue appropriately in the
relevant chapter of this Order.
25. Under the new proposals ESCOM BESCOM has proposed for increase in the
has sought an increase in fixed Fixed charges as the Revenue
charges. The demand related, expenditure incurred by BESCOM in
ccxliii
energy related and consumer procurement of energy is divided into two
related factors are vital for parts: a) Fixed expenditure and b)
determination of fixed charges. Variable expenditure; likewise, the
BESCOM, without any record to charges levied on the consumers by
show that the additional assets BESCOM under Average Realization Rate
have been employed, may service (ARR) are divided into fixed/demand
a particular class of consumer and charges and variable/energy charges.
generate additional revenue. The cost of procurement of energy from
the private generators for BESCOM stands
divided in the ratio of 33:67 towards fixed
charges and the energy charges
respectively. However, BESCOM is
obligated to bifurcate its receipts (ARR)
into Fixed Charges and Energy Charges in
the ratio of 11:89 respectively. All other
State Distribution licensees are recovering
the costs in the same ratio of fixed
charges and variables charges in which
they procure energy from generators.
Commission's Views: This issue has been suitably dealt with in the Tariff Order.
26. BESCOM proposal for introduction of The initiative to introduce Morning Peak is
morning peak will cause lot of a Demand Side Management measure for
hardship to the manufacturing flattening the load curve to clip off the
industries, especially MSMEs, and morning peaks. BESCOM also intends to
force them to operate in only one or reduce the penalty levied in ToD tariff.
two shifts. Hence, the interest of manufacturing and
MSME’s are safeguarded.
Commission's Views: This issue has been suitably dealt with in the Tariff Order.
27. Banking facility: BESCOM’s proposal In the existing system, power is produced
to limit the period for utilizing by the Wind Generators, normally from
banked energy to 3 months is not May to September, irrespective of the
practicable for the reason that the system demand, banked and made
energy requirement of a available to the Open Access
manufacturing unit depends on the Consumers as per their demand. The
market demands. Further, use of Open Access Consumers generally draw
banked energy without any power during the months, when demand
payment after 3 months is against for power is high, and BESCOM would be
the fair trade practices. obligated to procure power from other
sources at high rates and supply the same
to the Open Access Customers without
levying any extra charge. This aspect of
power transfer is causing financial loss to
BESCOM.
ccxliv
In the above context, BESCOM has
proposed banking facility for 3 months
instead of a year.
Commission's Views: The reply by BESCOM is noted and the Commission will be
passing a separate Order on this issue, as ESCOMs have filed separate petitions in
the matter.
28. In earlier tariff orders, The request to allow maximum demand of
Commission had allowed for 120% of contract demand during non-peak
increase of maximum demand hours cannot be considered as the MD
by 20% of contract demand recorded in the billing parameters cannot be
during non-peak hours without differentiated as peak hour MD or non-peak
any penalty. This provision hour MD.
should be restored in the
present tariff order.
Commission's Views: The Commission in the Tariff Order dated 30.03.2016 has
amended the earlier provision to bring in conformity with the provisions of the EA,
2003.
29. Categorization of ready mix As per section 3.03 of Conditions of Supply
concrete (RMC) plant has been of Electricity in the State of Karnataka
inadvertently left out in tariff order “Licensee may classify or reclassify a
2015 and 2016. Consumer into various Tariff categories
from time to time as may be approved by
the Commission. No additional category
other than those approved by the
Commission shall be created by the
Licensee’’. If this concrete mix is
purchased by a retailer and then sold to
the end user, then the activity is
commercial in nature.
Commission's Views: The Commission, noting the reply has dealt with this issue in
relevant portion of the Tariff Order.
ccxlv
30. Form No D-18, which should provide Format D-18 and D-18A provide enormous
details of Demand, Collection and statistics and are not easily printable.
Balance, is blank and the details However, the soft copy of these forms is
should be made available by available on BESCOM website and also
BESCOM. submitted to the Commission.
Comparison of Sales, Revenue Demand
and Revenue Realization are published in
BESCOM’s application.
31. Annual banking facility should be Banking charges are determined in
retained and the banking charges general by the State Commission.
should be considered @ 2% for the
actual power banked at the end of
month as provided in the PPA.
Commission's Views: This issue will be dealt with in a separate Order being issued by
the Commission.
32. ESCOMs levy a penalty for fall in Tariff, duly authorized by the regulatory
power factor below 0.9 at the rate authority, for most of the utilities, is based
of Rs.0.03 per unit for every fall of on the active energy measured at the
power factor by 0.01. It would rather consumer’s premises. Power factor is
be fair to introduce incentive normally maintained within the prescribed
scheme for maintaining PF above limits by installing Static capacitors,
0.90. wherever, loads are more inductive in
nature. Power factor penalty is imposed
on HT/EHT consumers, who fail to maintain
the average power factor within specified
limits. In the tariff system based on kWh
metering, consumers would maintain the
power factor within approved limits, only if
imposition of penalty is imbibed in the
tariff. BESCOM imposes a measly
surcharge of 3 paise, if the PF falls by 0.01.
The consumers can assist to maintain the
network in accordance with the Grid
Code, if the power factor of their
installation lies within the limits approved.
Commission's Views: The maintenance of proper PF is in the interest of consumer
only. PF above the threshold levels would improve the voltage of the supply to the
consumers and also enable optimizing their power consumption.
ccxlvi
33. Railways carry bulk quantum of As per the National Tariff Policy 2016, the
coal, crude oil etc. at a subsidized tariff comprises of two parts - fixed and
cost, which is relatively cheaper variable charges with time differentiation.
than all other modes of transport. Fixed cost normally constitutes 29% of
The power charges crunch the total power purchase and any dip in
economic operation of the Railways power consumption may result in revenue
and a single part Tariff based on loss to ESCOM and can be set off partly
consumption alone may give by collection of fixed charges.
certain financial relief.
Commission's Views: The reply furnished by BESCOM is noted.

34. Proposed Cross Subsidy Surcharge The cross subsidy surcharge is calculated
(CSS) substantially increases the cost as per the guidelines framed in the
of energy rather than reduce the National Tariff Policy. Open Access
same in violation of the principles set Consumers, who use the transmission and
out by KERC in its tariff Order for FY16 distribution network of state utilities, should
and FY17. bear both the cost of network and losses,
besides paying cross subsidy surcharge.
The cross subsidy surcharge is levied only
to the open access consumers and not
the Generators.
Commission's Views: The reply furnished by BESCOM is noted and the determination
of cross subsidy surcharge is appropriately dealt in the relevant chapter of this Order.
35. Request of BESCOM for true up The expenditure alone is not the cause for
revenues should not be accepted increased deficit year on year, but, also
based on the performance and the poor revenue receipts. Hence, the
approved numbers, as evident in Commission should consider the revenue
the audited accounts, actual receipts from sale of power for the
revenue should be taken at Rs purpose of truing up of respective years.
14857 Crore. The Commission should consider Rs.
13821.61Cr. (Rs.13712Cr. +Rs.47.46Cr.
+Rs.62.16 Crs. (Misc. Revenue)) as
revenue from sale of power.
Commission's Views: The Commission in accordance with the MYT Regulations has
to consider the other income of Rs.167.21 Crores by deduction from the revenue
expenditure. The truing up subsidy of Rs.541.97 Crores booked in the audited
accounts of BESCOM which is a notional income recognized for the closure of the
accounts is not acceptable under the provision of MYT Regulations.
36. The Commission has approved a Prices of each and every commodity in
purchase of 30419 MU at an the market have increased over the
average cost of Rs.3.89 per unit, years. Electricity is generated from hydel
whereas the actual purchase is and thermal sources on a large scale.
lower at 29161.6 MU, almost a drop Due to failure of the monsoons during
of 4%. But, power purchase cost FY16, hydel generation was low and the
has increased by Rs.760 Crs. ESCOMs have procured power from other
ccxlvii
because of significantly high cost of sources which has increased the cost of
purchase at Rs.4.32 per unit purchase for FY16.
Commission's Views: The reply furnished by BESCOM is noted and issue of power
purchase is appropriately dealt in the relevant Chapter of this Tariff Order.
37. The Distribution loss declared at Distribution loss of BESCOM is within the
12.03% for FY16, to claim Rs.190.92 band width of KERC target.
Crs. as incentive by BESCOM should BESCOM, with 41092 sq. kM of area,
not be allowed since utilization of comprises more of rural areas than urban
SCADA in a better way could have which also includes Bangalore
reduced the distribution losses to 9%. Metropolitan area. Distribution losses of
Bangalore Metropolitan is merely 8%,
whereas, the same is reduced from 20% in
FY08 to 12.03% in FY16.
38. The cost of the power for BWSSB, at Electricity being the only consumable
the prevailing tariff, represents about component for BWSSB, it happens to be
64% of its gross revenue and the the single largest Item covering its
single largest item of expenditure. revenue. Similarly, Power procurement, a
The Commission has rejected the major input item for BESCOM, also
proposal of BESCOM for increase in constitutes approximately 86% of its
tariff for HT-1 on this ground in its expenditure.
tariff Order 2011 and 2012.
BWSSB already faces an increase of Energy and Demand charges are
50% in the cost of energy since the proposed at Rs.5.98 per unit and Rs.190.0
year 2000. BESCOM’s proposal to per KVA respectively for FY18. But, in the
further enhance cost of energy from revised proposal, Energy and Demand
Rs.4.50 to Rs.5.98 per unit and charges proposed at Rs.5.47 per unit and
demand charge from Rs.180.0 to Rs. 250/- per KVA respectively, will
Rs.190.0 per KVA will adversely affect substantially reduce the power charges of
the operation of BWSSB. BWSSB.
Commission's Views: This issue of revision of tariff has been dealt in the relevant
portion of this Tariff Order.
39. BESCOM has filed the present BESCOM has filed an application for
application under clause 2.8 and 2.9 annual performance review, (for truing up
of the KERC Regulations, 2006, which of annual revenue and actual expenses)
requires filing of annual based on the audited accounts.
performance review application BESCOM has also filed an application for
every year and an application for approval of Annual Revenue
determination of tariff for any Requirement and Determination of Tariff
financial year. But, no such details for FY18.
are provided by BESCOM to
facilitate either consideration or
review.
Commission's Views: The reply furnished by BESCOM is acceptable. It is noted that
BESCOM has filed the application in accordance the provisions of the MYT
ccxlviii
Regulations.
40. In terms of section 27 (5) (a) of the As per section 61 of the Electricity Act, the
Karnataka Electricity Reform Act, ‘tariff progressively reflects the cost of
1999, the nature and purpose for supply of electricity and also, reduces
which the electricity supply is cross-subsidies within the period to be
required is a relevant factor for the specified by the Appropriate
purpose of fixing the tariff. Therefore, Commission”. The Tariff fixed for HT-1
(BWSSB) is eminently eligible for a Category is 82% of the average Cost of
special treatment in order to extend Supply. This tariff requires 18% cross
the benefit to the consumers of the subsidy from the other consumers. As a
objector. consequence to increase in the cost of
procurement, tariff revision to this
category is also necessary to maintain the
cross subsidy at the same level, or
otherwise, the burden owing to the cross
subsidy will increase on consumers of
other categories.
41. BESCOM opposes implementation It can be seen from Tariff revision for the
of Commission’s Order of last 9 years that the revision allowed by the
reduction of Tariff and appeals Commission is much less than the increase
against the same and continues to sought, which is necessitated by
file Tariff Revision petitions for the considerable increase in power purchase
last 9 years, Hence, its Tariff and other associated costs.
application should rejected.
Commission’s Views: The Commission, after looking into the facts and figures, allows
the ARR and the tariff increase in terms of the MYT Regulations. The Commission is
also undertaking the Annual Performance Review, to true up the actual expenditure,
as per the audited accounts. BESCOM has a legal right to prefer appeal before the
Hon’ble Appellate Tribunal for Electricity, as per the provisions of the Electricity Act,
2003, if it is aggrieved of the Commission’s Order and such an action cannot be held
against it in subsequent tariff revision.
42. Though, adequate increase is Tariff order dated 30-03-2016 by the

allowed in the tariff for FY17 to carry Commission has fixed an average power
on the business without any loss, purchase cost of Rs 3.94, Rs 3.97 and Rs
BESCOM has reported a loss of Rs 4.10 per unit for FY-2017, FY-2018 and FY-
1425.4 Crs. and seeks an increase in 2019 respectively. But, the actual power
the tariff of Rs 1.48 per unit, across purchase cost has been Rs 3.92, Rs 4.32
all categories for the year FY 2018. and Rs 4.62 per unit for FY-2015, FY-2016
and FY-2017 (till September) respectively.
Commission’s Views: Though, the BESCOM has indicated a loss in its tariff filing, the
Commission would allow the expenses as per the MYT norms while making any
revision in tariff.
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43. The Losses shown as Rs 1424.4 Crs. Details of various expenses approved by
and Rs 3902.86 Crs. for FY 2016 and the Commission, as well as actuals are
2018 by BESCOM is highest for all shown in Tariff proposals and additional
ESCOMs. expenditure of Rs 1424.42 Crs. for FY16, is
proposed to be recovered during FY18 by
revision of Tariff.
Commission’s Views: Though, the BESCOM has indicated an additional expenditure

of Rs.1424.42 Crores, the Commission would examine the correctness of the same
and allow it, as per the MYT norms.
44. Considerable payment made by Payments due from other ESCOMs is

BESCOM for power purchases made shown as outstanding / receivables, not to
by other ESCOMs right from FY06 be treated as expenditure in the ARR or
along with interest accrued
considered for Tariff revision, Hence, the
thereon, has not yet been paid
back. The blockage of funds has consumers will not be overburdened on
caused a delay in payment for the count of receivables from other
power purchase and consequential ESCOMs.
accrual of interest thereon.
Commission’s Views: Reply furnished by the BESCOM is acceptable.
45. Expenditure estimated for the A comparative statement of item-wise

coming year is abnormally high as expenditure of BESCOM, between FY16
compared with previous year. and FY18, shows the variation in the range
of 10.19% to 28.82%, with an overall
increase of 11.99% and well within the
approved limit of 12%.
46. BESCOM has claimed a higher All Bhagya Jyothi installations are metered.
amount of subsidy from the Installations with monthly consumption of
Government as compensation for more than 18 units are classified under LT-2
consumptions of Bhagya jyothi
and energy charges are collected from
installations. The consumption
assumed is much more than the respective consumers. The subsidy from
actuals, since these installations are GOK is claimed only for such installations
not metered. whose consumption is less than 18 units per
month.
Commission’s Views: Reply furnished by the BESCOM is noted.
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47. Tariff for the coming year shall be As per MYT Regulations, the expenses for
based on the Commission’s Tariff three consecutive years have to be
Order for 2015 and not Tariff Order estimated considering 1 year’s actuals
2013. prior to this period as base year.
Accordingly, FY13, with audited Accounts
of earlier two years, is considered as base
year for estimating the expenditure for
FY14, 15 and 16 and hence the tariff
proposals are in order.
Commission’s Views: Reply furnished by the BESCOM is noted and the Commission
has carried out APR has per the MYT Regulations.
48.Allotment of high cost energy to BESCOM consumes more than 50% of the
BESCOM is relatively high in energy in the state and energy of different
comparison with other ESCOMs costs is allotted commensurate to their
which results in an increase in the consumption and the cost of power
cost of power purchase purchase is passed on to the consumers.
Commission's views: The reply of BESCOM is noted and the Commission also notes
that the allocation of power purchase is done by GoK.
49. Failures of meters are not attended Specific instances with details of delay in
to immediately, thereby causing replacement of meters may be furnished
loss of revenue. to BESCOM/CGRF.
Commission’s Views: The reply furnished by BESCOM is reasonable.
50.In view of signing PPA for SRTPV BESCOM has not proposed change in
agreeing to pay Rs.9.56 per unit, billing demand but, has only proposed
there shall not be any change in increase in demand charges.
billing of demand charges. And
hence, the request of BESCOM for
increase in demand charges be
rejected.
51. All the ESCOMs to consider The Telecom industry is a service provider
Telecommunication Industry under the like TV stations, All India Radio, etc., in the
Industrial Tariff HT-2(a) and not the present Tariff Order, almost all service
Commercial Tariff i.e. HT-2(b) in the providing sector are considered under
interest of justice and equity. HT-2(b) i.e., commercial Tariff.
Hence, it is appropriate to consider

Telecom/BPO/KPO/ under HT-2(b)Tariff
Objections relating to Quality of Power Supply and Service;
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52. BESCOM is resorting to untimely load Notification of scheduled load shedding is
shedding without advance published in advance in the daily
publication causing lot of hardship newspapers.
to the consumers. Action for
procurement of adequate quantum PCKL, a special purpose vehicle setup by
of power from other sources can GOK, carries out power procurement on
possibly avoid untimely load behalf of all ESCOMs to ensure
shedding procurement of adequate power.
53.ERC and Tariff Revision filing of Objectors have to point out the specific
BESCOM are liable to be termed as inefficiency factors of BESCOM and seek
defective and dismissed as Commission’s intervention. The quality of
BESCOM has failed to implement the power supply in rural areas has very much
directives of the Commission, take improved with the implementation of NJY
action to improve the operations and three phase power supply is arranged
and curb the deteriorating power to the farming sector, by and large, for
supply situation in rural areas. seven hours.
Commission's Views: The reply furnished by the BESCOM is noted.
54. BESCOM has failed to implement The timer switches have to be provided by
Demand Side Management by not the BBMP. The BESCOM’s receivables
providing timer switches for 75% of from BBMP and local bodies are to the
street light installations numbering to tune of Rs.1635 Crs. as on Mar-2016.
40,181, which adds to the peak BESCOM cannot further burden itself by
load. providing timer switches to street lights at
its cost. BESCOM has taken up the issue
with BBMP and is in the process of
educating them with the benefits of timer
switches in street lights installations. For the
last 3 years, the load curve of BESCOM
shows a higher peak load during morning
peak hour as compared with evening
peak hours. So the objector’s claim of
peak load due to street light is incorrect.
Commission's Views: The BESCOM shall continue to persuade BBMP and other local
bodies to install timer switches for street lights.
55.BESCOM is yet to provide Independent industrial feeders do exist in

independent feeders for the BESCOM network and the petitioner
Industries to reduce the interruptions should furnish the specific area, where
due to load shedding etc., independent feeders are to be provided
for industries. BESCOM on its part is striving
hard to provide uninterrupted power
supply to all categories of consumers with
immediate redressal of customers’
complaints.
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56. Prevailing Solar rebate should be Solar rebate should be discontinued since
continued since Solar Heating installation of solar water heaters has been
greatly helps in bringing down the made mandatory for new connections
morning peak load. BESCOM has since 2007.
not furnished the details of
installations yet to be serviced with
Solar water heaters.
Commission's Views: The reply furnished by BESCOM is noted. The Commission has
dealt with the matter suitably in the relevant chapter of this Tariff Order.
57. Nirantara Jyothi Scheme (NJY) NJY phase 3 works planned for 380 feeders
BESCOM has not quantified the with completion of work for 267 feeders
improvement in quality of supply and commissioning of 156 feeders. The
and reduction in losses after Socio-Economic Survey has been carried
implementation of NJY Scheme in out among the Beneficiaries of 36 feeders
117 feeders. It has also not clarified under NJY scheme (6 Respondents from
large variations in IP Set each of 5 villages covered per feeder) of
consumption based on the Davanagere and Kolar Circle.
segregated feeders.
Commission's Views: The Commission notes the reply furnished by BESCOM and
directs BESCOM to complete the analysis and report the findings. The analysis should
be done on a perpetual basis in order to know the benefits over a period of time.
The Commission has dealt with the issue of IP set consumption in the relevant
chapter of this Order.
58. HVDS works completed only in 28 Implementation of HVDS with facts and
feeders and evaluation entrusted to figures have been provided in the ERC
a 3rd party during July, 2016. But, no filing.
report is obtained even after 5
months indicating BESCOM’s
casualness in implementing HVDS to
bring down the losses.
59. Replacement of 100403 pump sets 69 No of solar IP sets have already been
with more efficient ones, proposed commissioned out of an allotment of 310.
during FY 2013, is yet to be taken up. The work is now reassigned to M/s. Ishaan
Further, 69 IP Sets only are provided Solar, who have committed to energize all
with Solar power as against a target IP Sets by January, 2018, in consultation
of 310 IP Sets. Owing to the above with prime vendor, M/S Sun Edison.
shortcomings, BESCOM is unlikely to
succeed in management of
demand in Agriculture.
Commission's Views: The Commission takes note of the reply by BESCOM and would
review the progress of this work at an appropriate time.
60. Metering of DTC: Out of 246419 BESCOM is providing the details of Energy
DTCs, only 110965 are metered, a Audit of Divisions, Towns, Cities & DTCs to
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mere 44.70%, during the last 5 years. the Commission in the prescribed format.
BESCOM has failed to compute The details of energy audit for the 2nd and
losses for even such DTCs which are 3rd quarter of FY17 are furnished to the
metered. Commission.
Commission's Views: The reply given by BESCOM is noted. The Commission directs
BESOM to complete DTC metering and conduct energy audit within a definite
timeframe and take corrective measures wherever required. The details of energy
audit of DTCs and the steps taken to reduce losses shall be regularly reported to the
Commission.
61. Accidents: 278 accidents in FY16 is BESCOM is making an earnest and
the highest during the last 9 years conscientious effort to reduce accidents
with reckonable rise in the number and has spent Rs.15.24 Crs. towards safety
of accidents with every passing measures for FY16. Hazardous locations are
year. Therefore, all proposals made identified and targeted for rectification
by BESCOM in respect of safety with provision of spacers, AB Cables etc.
need to be explained. BESCOM officers have been directed to
conduct regular inspection of such sites
which pose danger to the public and
operating personnel.
Commission's Views: The reply furnished by BESCOM is noted. The Commission directs
BESCOM to take all precautionary and safety measures and also take up periodical
maintenance to reduce the accidents.
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62. Prevailing HT/LT ratio is 1:1.79 in BESCOM plans to achieve HT:LT ratio of 1:1
BESCOM, which was committed to with NJY works underway and HVDS
be brought down to 1:1.63 in the projects envisaged. Details of the
Tariff petition of FY17, needs an proposals have been furnished in the ERC
explanation since higher ratio of HT / filing.
LT results in increased distribution
losses.
Commission's Views: The reply given by BESCOM is noted.
63. BESCOM mentions that 86237 DTCs There are 99750 No of DTCs feeding IP sets
were feeding the IP loads during as at the end of December, 2016 and IP
the previous year without furnishing sets energy assessment is based on NJY
the number of DTCs feeding the IP agricultural feeder consumptions.
loads during the year. Metering of
only 44 DTCs is carried out so far and
IP consumption is computed on the
basis of sample metering leading to
give erroneous results.
Commission's Views: The Commission takes note of the reply by BESCOM. Further,
the Commission has dealt with the matter of IP set consumption appropriately in the
relevant chapter of this Tariff Order.
64. BESCOM is putting up a wrong claim Monthly reliability index is being submitted
on improvement of Reliability Index to the Commission and is also available in
without providing proper work sheets BESCOM website (www.bescom.org).
for the feeders with an
improvement in the index and
furnishing the number of feeders
within / beyond the permissible
limits
Commission's Views: The reply furnished by the BESCOM is acceptable.

65. BESCOM had regularized 24874 BESCOM is complying with latest directive
unauthorized IP Sets during the of the Commission and carrying out GPS
previous year, but, neither the survey of IP sets. Further, all IP sets are
number of unauthorized IP sets nor being regularized as a normal service
the plan for regularization of the connection with payment of Rs.10,000 by
same during FY18 is not indicated in each consumer, as per the GoK Order.
the ERC filing.
66. Metering of IP Sets: Installation of Due to vehement protest by the IP set
meters for IP Sets is not progressing consumers, BESCOM is unable to meter IP
satisfactorily and the Commission installations. However, consumption
should order for completion of the recorded at the meters installed at the
same in a time-bound manner. NJY Agri feeders, exclusively feeding
agricultural loads, is being considered for
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assessment of IP sales.
67.IP Set Consumption: BESCOM has BESCOM is considering the

considered the consumption of IP consumption of both authorized and
Sets as 6837.80 MU, which excludes unauthorized IP sets for assessing the IP
the consumption of 24874 sales.
unauthorized IP Sets.
Commission's Views: The reply furnished by BESCOM is noted and the IP set
consumption is dealt in the relevant Chapter of this Tariff Order.
68.Failure of distribution transformers at Rate of failure of transformers, expenditure

a rate of more than 8% per annum is for repairs and other details are furnished
not furnished by BESCOM in ERC in BESCOM’s replies to Commission’s
filing and an appropriate action preliminary observations.
should be taken to bring down the
rate of failure as well as the
expenditure incurred on this count
Commission's Views: The Commission takes note of the reply by BESCOM.
Further, the Commission has dealt with the matter appropriately in the relevant
69.The interest on deposits, being Interest on security deposit of consumers is

calculated at the rate of 9% per paid as per KERC Security Deposit
annum, should be calculated at the Regulations.
rate notified by the Reserve Bank
and paid to the consumers every
quarter.
70. Details of load shedding and likely ‘SCADA Data Reporting and Analysis
time of restoration of power are not (SDRA)’ software being put up by BESCOM
being informed to the Consumers. to enable communicating with consumers
BESCOM also does not put up the through SMS regarding power interruptions
following information on its website: and restoration. Day ahead projections,
1. Demand and availability, daily interruption details, Daily load curve
etc. are being displayed on BESCOM
2.Quantum of Spot purchase of website.
Power,
3.Monthly statement of Substation-wise and feeder-wise details of

interruptions in respect of interruptions are furnished to the
Substations and feeders. Commission in the prescribed format. Grid
discipline is ensured by SLDC while
allotting power to the ESCOMs.
71. BESCOM should implement The Standards of Performance parameters
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Standard of performance with the are displayed in all the sub-divisions of
involvement of all its subordinate BESCOM, as reported to the Commission.
offices.
72. Distribution Automation in Peenya, Automation project is scheduled for
taken up as a time bound completion during June 2017. The details
programme, is yet to be completed are available in BESCOM’s replies to
even after a lapse of 5 years from Commission’s preliminary observations.
the date of commencement.
73. In the absence of Compliance of BESCOM has complied with all the
Directives of the Commission, the directives of the Commission.
exercise of filing ERC would be futile
with petition liable for rejection.
Commission's Views: The reply furnished by the BESCOM is noted. Also, the
Commission reviews the compliance of its directives by BESCOM in ESCOM’s review
meetings, duly directing all the ESCOMs including BESCOM to strictly adhere to the
same.
74. The average duration of BESCOM submits the statistics pertaining to
interruptions with number of average number of interruptions per
interruptions has not been furnished consumer and average duration of
by BESCOM. interruptions per feeder per day to the
Commission on a quarterly basis.
75.Consumer indexing started by Consumer indexing is not a one-time task,
BESCOM long back is yet to be but, a continuous phenomenon with
completed. addition of incremental data to the
network on regularly basis.
Commission's Views: The reply furnished by BESCOM is noted. The Commission
directs BESCOM to update the data of consumers as and when it gets modified.
76.The delay in System demarcation Geographical positioning of assets
with GPS, though started long back, carried out under the DAS projects in
reflects the inefficiency of BESCOM. BMAZ area and IP sets in rural areas are
being surveyed with GPS as indicated in
para 4.13 of filing.
77.Revenue realization from enormous The cases are in the course of
vigilance cases, booked during FY adjudication and the revenue is not
2012 to FY 2014, are not included in normally realized in the same year.
the Tariff petition and the
Commission may kindly consider the
same
Commission's Views: The reply by BESCOM is acceptable.
cclvii
78.Plan for the introduction of Pre-paid BESCOM is installing 3525 no of Prepaid
meters, as per section 47(5) of EA meters (Card Technology), with costing as
2003, has not been disclosed by under, on pilot basis for temporary
BESCOM. The consumers, who are installations in Indiranagara Division:
provided with Pre-paid meters need
not pay any security deposit and Single Phase Rs. 10,732.00
the deposit made also would be Three Phase Rs. 13,532.00
refunded.
Commission's Views: The reply furnished by BESCOM is noted The consumers should
note that due to huge cost of supply of pre-paid meters, it has to be introduced in
phased manner.
79.Universal Metering: Section 55 of EA Metering to Irrigation pump sets is not
2003 stipulates that no installation achieved due to protest from the farmers.
should be serviced without metering However, the energy supplied to the
after 10th June 2005. ESCOMs, which farming sector is quantified under the NJY
service installations without meters, scheme.
clearly violate the Act and directive
of the Commission. Hence,
Commission should not allow any
tariff revision in respect of
unmetered category.
Commission's Views: The reply by BESCOM is noted. The Commission is of the view
that for proper measurement of IP set consumption, the data from the meters fixed
to the bifurcated feeders be used. This would largely address the issue of non-
metering of IP sets.
80.The power supply situation and BESCOM has been implementing Nirantara
quality of power supply in rural areas Jyothi Yojane for providing better power
have deteriorated further during the supply to rural areas. M/s. MECON,
current year. The compliance of engaged by BESCOM to evaluate the
other directives is also very poor and benefits of NJY phase-1 & 2 with Pre and
tangible results have not come out post analysis, benefits accrued etc. has
so for. On these aspects also the reported as under:
ERC and tariff filings are defective
and liable to be dismissed as not  24x7 power supply to Non-
maintainable. agricultural loads in rural areas.
 Increase in metered consumption in
rural areas to an extent of 25%.
 Reduction in failure of distribution
transformers.
 Improvement in consumer satisfaction.
 Improvement in quality of power supply
and living standards
 Encouragement for rural industries.
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81.Unscheduled interruptions in power The objector is requested to be more
supply affect the services provided specific on the unscheduled interruptions
by BWSSB in disrupting water supply and the affected area. A new toll-free
to Bangalore city apart from telephone no 1912 is established at
causing damages to the system. BESCOM to lodge complaints in respect of
failure of transformers, interruption in
power supply, snapping of conductors,
falling of poles, fuse off call etc.,
82.Proposal to hike the tariff without any Every business has a challenge for its
value addition to the service from survival and neither BWSSB nor BESCOM
BESCOM, may adversely impact the are exceptions.
operation of BWSSB, which is already
in financial doldrums since 2005-06.
83 Officials and line staff do not The strength of working staff is 14189 only
perform their legitimate duties as against the sanctioned staff of 21819,
Private contractors, deployed by forcing BESCOM to engage part time
BESCOM, carry out the work employees, in case of emergencies.
assigned to the departmental
Stringent action will be taken against erring
personnel. Further, the contractors
utilize the departmental tools and staff, if specific instances are brought to its
materials to carry out the work notice.
assigned under contract and cause
a considerable loss.

84.Officials attend the meetings in It is essential to provide walkie-Talkie,
different offices for almost 10 days mobiles etc., to officials for effective
in a month and considerable discharge of their duties and to attend to
expenditure incurred for payment the cases of break-down for restoration of
of allowances and meeting power supply. A few important meetings
expenses, which can be curtailed have to be conducted for deliberation
with the use of latest and understand the effective
communication facility like walkie- implementation of the policies.
Talkie, Mobile phones, internet
facilities etc.
85.In the absence of preventive action Energy loss in BESCOM is within the limits
by BESCOM to curb the theft prescribed by KERC.
substantial amount of energy is lost.
Commission’s Views: Reply furnished by the BESCOM is noted and the issue of losses
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is dealt in the relevant Chapter of this Order.
86.Losses sustained due to delay in Specific instances with details of delay in

execution of works is passed on to work execution may be furnished to clarify
the consumers. the query.

87.Financial loss sustained due to Specific instances with details of delay in
execution of unwanted projects. work execution may be furnished to clarify
purchase of Walkie-Talkie, uniforms the query.
etc., in piecemeal to be avoided
and procurement from reputed
companies on long term basis
should be adopted.

88.Loss Incurred due to theft of Specific instances with details of delay in
conductors and Transformers are work execution be furnished to clarify the
passed on to the consumers. query.
Commission’s Views: Reply furnished by the BESCOM is noted..

89.Additional expenditure is incurred New subdivisions and O & M units are
for procurement of furniture and created considering the local requirements
arranging accommodation for and to provide better service to
unreasonably created new Sub- consumers.
divisions / Units at Attibele,
Veerasandra, Sarjapura,
Mayasandra, Nalluru etc.
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90.A number of JEEs / AEEs working in Severe shortage of staff has compelled
Chandapura, Attibele, Jigani etc. judicious deployment of employees with a
are not adequately qualified even few of them holding additional charge.
to prepare the estimates and are Most of the vacancies will be filled up with
as a burden for the BESCOM. the Recruitment process underway. The
estimates, prepared in standard formats,
are scrutinized and certified by technical
staff at the sub-division offices.

91.Infosys software used by BESCOM is Consumer friendly software has been
defective with improper and slow developed and it is quite natural that
functioning. certain initial implementation problems will
always be there.
92.Unnecessary projects taken up Most of the BESCOM’s programmes are
under schemes like NJY, RGGY, framed by the GOI & GOK, for improving
DDVY etc., are inordinately service to consumers.
delayed due to severe field
problems, which escalate the cost
as well as cause financial loss.

93.Arranging power supply on Temporary power supply is being arranged
temporary basis for religious as per the prescribed regulations and
functions and other installations improvements can be suggested by the
should be simplified with a single objector, wherever necessary.
window agency for sanction /
renewal of power supply, allotment
of meter etc. Further, consumers
hesitate to avail temporary power
supply owing to exorbitantly high
cost.

94.Majority of Line Staff, without BESCOM is planning to impart training to all
adequate knowledge of the work, its staff.
cause loss to BESCOM.

Other Issues:
95.A few Consumers such as Software Software companies are presently
Companies etc., have a good classified under commercial tariff i.e.
paying capacity and BESCOM HT2b.
should consider bringing them
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under commercial tariff.
96.Commissioning of Bidadi Gas Power Purchase of Short term power is done with
plant, proposed about 15 years the approval of KERC, by calling for
back, would have averted short competitive bids to discover the price.
term purchase.
with the matter relating to power purchases suitably in the relevant chapter of the
Tariff Order.
97.Peenya Industries suffer due to The up-gradation of 220kV SRS and 66kV
unscheduled interruptions and can Brindavan stations coming under the
hope for improved power supply in purview of KPTCL would be pursued by
case 220 KV SRS and 66 KV BESCOM.
Brindavan Stations are upgraded.
BESCOM has not made any
proposals in this regard.
98. 3000 MW of power had been Power purchase requires a major chunk of
procured at a very high cost 3 years the revenue, approximately 86%, and the
back because of severe shortage. rest goes for maintaining the system. In
Considering an increase in the
addition to this, the State and Central
demand for power by 500 MW per
annum, because of new consumers Governments issue regulations, such as as
in the State, the gap between the open access to consumers above 1MW,
demand and the supply goes up RPO of 11% for non-solar and 0.75% for
regularly. In order to meet the solar, supplying at least 50% of energy at
increasing demand for power, open the Average cost of purchase,
market procurement will be resorted introduction of group captive (beneficial
to at a huge cost and an increase in
scheme for HT consumers) etc. BESCOM
Tariff would be sought to bridge the
revenue gap. also has to cope with the social obligation
of supplying power to IP sets below 10HP.
Commission's Views: The reply furnished by BESCOM is noted and the cost of power
purchase is appropriately dealt in the relevant Chapter of this Order.
99.As per the provision in EA 2003, the No comments.
distribution company can have its
own generation to supply power
exclusively to its consumers. Under
advisory functions of the
Commission, the Government may
be advised suitably
cclxii
Commission's Views: The Electricity Act aims at unbundling of all the functions in the
electricity sector in order to serve the consumers in a better way and accordingly
the sector has been un-bundled. With the commissioning of the new generating
stations, the deficit conditions may not prevail in the State, and the need for
ESCOMs to have its own generation may not arise.
100.The Commission may direct BESCOM is incurring loss in running the
BESCOM to plan its own generation distribution business and as such cannot
to an extent of 2000 MW, to supply afford to fund for generation. The
power to Bangalore City, an
objector wants the power to be
important area of BESCOM, by
inviting competitive tariff bidding purchased from a private agency and
instead of funding as stated in the BESCOM is doing it for long (procuring
tariff order FY16. power from M/s. UPCL).
Commission's Views: The Commission takes note of the suggestion.
101.Energy audit at inter-face points is BESCOM is providing the details of Energy
not being done. Energy audit report Audit of Divisions, Towns, Cities & DTCs to
of 15 towns as well as 8 towns the Commission in the prescribed format.
included in the scope of CPRI are
not furnished.
Commission's Views: The reply furnished by the BESCOM is acceptable. However,

the Commission strongly emphasizes the need to effectively conduct the energy
audit for plugging leakage and to make the company viable both technically and
financially.
102.What is the necessity of forming a A Technology Innovation Centre (TIC) is
technology innovation center, created in the absence of a research
proposed to reduce the energy wing in BESCOM.
wastage, inventory control etc.
when the same tasks are being
carried out by the research wing?
103. Why BESCOM is not participating in BESCOM is participating in UDAY scheme.
debt restructuring Scheme called
Ujwal Discoms Assurance Yojana
(UDAY), introduced by Govt. of India
104.Replacement of a mere 16% of the BESCOM has encouraged consumers to
existing bulbs by LED lamps, install energy efficient LED lamps. The
proposed for energy conservation, consumer must also proactively
has been accomplished so far and participate in replacing the existing bulbs
is there any time schedule for with LED lamps. This is a continuous
completion of work? phenomenon and there cannot be any
time limit.

105.Bachat lamp Yojana, started with a Bachat lamp Yojana is not continued
cclxiii
great fanfare for energy saving, has due to non-participation of CFL firms. It is
achieved 10% progress only and a Government of India project, where
BESCOM to indicate a schedule for BESCOM has least scope.
completing balance work
106.The cross subsidy surcharge should The cross subsidy surcharge has been
be levied in appropriate proportion calculated as per the formula given in
both for the fixed cost and energy National Tariff Policy. Open Access
cost instead of levying it only on Consumers, who use the transmission and
energy charges distribution network, should bear the cost
of network (FC) plus losses besides paying
cross subsidy surcharge.
Commission's Views: This issue has been suitably dealt in relevant portion of this Tariff
Order.
107.Different form of RE like wind and In order to encourage solar generation
solar are not treated on par. At which is green, clean and renewable, the
present, solar power is exempted Commission has exempted solar projects
from cross subsidy and wheeling & from wheeling, banking and cross subsidy
banking charges for 10 years. charges.
Commission's Views: The reply furnished by BESCOM is noted. The Wheeling and
Banking charges and the cross subsidy surcharge as determined by the Commission
from time to time by the Commission is applicable.
108.BESCOM has not submitted the Perspective Plan of BESCOM, as per KERC
perspective plan as required under regulation, has been filed.
the KERC Regulations.
109.BESCOM has stated that there has The fact that a steady reduction in the HT
been a steady reduction in HT sales sales, does not mean that industrial
with actual sales being 5069 MU for activities are not growing in the State.
FY 2014, 4750 for FY15 and 4593 MU The consumers opting for open access,
for FY16, indicating that the drop in group captive, captive trading etc., has
sales accounts to 9.4% reduced HT sales of BESCOM, but, overall
approximately, over a 3 years’ the drawal from the grid is going up on a
period. The proposed increase in regular basis.
tariff might further burden the
consumers and curtail the sale of
energy.
cclxiv
110.All meters installed in the name of Meters are installed to paying guest
the same consumer for a Building accommodations at the behest of the
used for Paying Guest should be consumer. As per clause 9.09 (c) of
clubbed. Conditions of Supply of Electricity in the
State of Karnataka sub meter can be
extended to each individual installations.
111.Proper maintenance of HT The suggestions are well taken.
installations, replacement of faulty
metering equipment with least
delay etc can minimize power
interruptions for the consumer and
curtail loss of Revue for BESCOM
112.Tariff proposal for payment of Commission allows expenditure towards
Bonus /PF to employees, donations, Establishment, O & M, General
advertisements etc, which have Administration etc., based on Consumer
already been disallowed by the Price index, Whole sale Price index. Hence,
Commission, is objectionable. contention of the objector that all such
expenditure is allowed by the Commission
is not correct.

113. Without calling for competitive The processing of Tenders of Packages are
tenders, BESCOM awards the works as per the provision of the K.T.P.P Act.
in the form of Packages at rates
much higher than the prevailing
Scheduled Rate.

114.Free power supply is provided to Conditional Free Power supply is provided
employees of BESCOM, only to those BESCOM employees who are
Government & Quasi Government recruited earlier to 1991 and no other
employees are provided with free lighting,
offices, residences of MPs and MLAs
as claimed in the objection.
etc.,
115.Additional expenditure entailed by Project Tenders are processed as per the

awarding works at a cost higher provisions of the K.T.P.P Act.
than SR is being transferred on to
the consumers.

116.Waiving of revenue arrears of Long pending revenue arrears of Industries
industries, in case of long pending are not waived without any reasons.
cclxv
disputes, burdens the consumers. Specific instances of waiver of arrears may
be furnished for a scrutiny and to take
further action.
117.Interest on loans availed for capital Time limits for competition of works and
works and additional outlay commissioning schedules are fixed, for
required to offset the delay in execution of all long term works.
execution of works is passed on to
the consumers.

118.BESCOM neither conducts proper Energy Audit is being conducted as
Energy Audit nor accounts for the prescribed by the Commission and the
energy received and sold and thus reports pertaining to 2nd& 3rd quarter of
sustains considerable loss in the FY17 for Towns and cities are furnished.
form of energy loss.
119.Failure to return released steel Specific instances with details of

poles and other articles to the unaccounted materials may be furnished,
stores, improper maintenance of to clarify the query.
account, non-auctioning
unserviceable goods is causing
loss to BESCOM.

120.Materials released, while carrying Allegations of misuse of materials at
out system improvement work Suryanagar Phase 1 to 3 will be referred
under self-execution basis, are not to the concerned officials for examination.
returned to the stores and misused,
which is evident from the works
executed at Suryanagar phases 1
to 3, Attibele, Chandapura etc.
Further, laying of 11kV UG cable
between Suryanagar Phase-1 and
Chandapura could have been
avoided since a 66/11 kV
substation is located in Suryanagar
Ph-1 itself
Commission’s Views: Reply furnished by the BESCOM is acceptable. BESCOM shall

take follow up action on this without expecting the consumers to pursue it.
121.A huge amount is spent for repairs Specific instances with details may be
to transformers and a performance furnished to clarify the query.
Guarantee for a period of one year
cclxvi
may be obtained even for repaired
transformers, as per the provisions of
KTPP Act 1999 / 2015, in order to get
the transformers failing within the
guarantee period, repaired without
any cost.

122.System losses as well as failure of The valuable suggestion of objector is
Transformers can be reduced by noted.
providing small capacity S-Ph
transformers in NJY Feeders for
extending power supply to
residential and commercial
installations in rural area as being
done in Andhra Pradesh.

123.Collection of rental charges to fix Opinion of the Chief Electrical inspector
hoardings and lay Dish TV Cable on GoK will be obtained in this regard.
the electrical poles, will generate
enough revenue and frequent tariff
hike can be avoided.
Commission’s Views: Reply furnished by the BESCOM is in order.

124.Reference made for unmetered The Commission has accepted the
consumption of IP Sets in the procedure adopted for assessing I.P Set
petition seeking Tariff revision, is not consumption as well as accounting and
correct. BESCOM, without precisely a statement pertaining to IP loads is
assessing the agricultural furnished in the tariff filing application.
consumption by providing meters at
least for all DTCs catering to IP
loads, attributes the unaccounted
energy as the consumption by I.P
Sets, street light, public water
supply installations etc.
Commission’s Views: Reply furnished by the BESCOM is noted and issue of IP set
consumption is dealt in the relevant chapter of this Order.
125. Electro-mechanical meters The old meters are replaced by static
provided for consumer installations meters and released meters will not be
are being replaced with digital used elsewhere.
meters, costing Rs 3000/-each.
Deployment of BESCOM
employees, rather than contract
agencies, would have considerably
cclxvii
reduced expenditure. Further, the
released meters can be used for
street light and other installations.

126. People living in rural areas are The financial deficit of BESCOM has to be
already in distress because of borne by its consumers and Tariff revisions
severe drought (more than 170 cannot linked to natural calamities.
talukas affected) and BESCOM has submitted the audited
demonetization and any tariff hike accounts along with the tariff filing.
would further burden them.
Therefore, Tariff revision petition of
BESCOM should not be considered
till they furnish an Account / Audit
statement for energy.

127. Transmission charges being paid to BESCOM pays the Transmission charges to
KPTCL for maintaining the system KPTCL & PGCIL as per the Tariff determined
can be reduced. by KERC and CERC.

128. If the proposal to increase the Cross Subsidy Surcharge is claimed only
demand charges and decrease in on energy charges and not on fixed
energy charges, is considered by the
charges.
Commission, it is requested to
remove the Cross Subsidy Surcharge,
Commission's Views: The CSS is computed as per the formula specified in the Tariff
Policy of the Government of India.
128. Cross subsidy surcharge is to be The Consumer would avail the open
levied only on the energy charges access only if there is savings in cost of
and the ESCOMs are not losing any power as compared to the cost of
revenue on fixed cost which is power payable to the ESCOMs. At the
collected in monthly bills of the HT same time the interest of the distribution
consumers. At present the cost of licensee has to be protected, in case the
power at IEX is very low as compare existing consumers avails open access.
to the cost of Wind Power. Therefore, Therefore, the CSS and wheeling and
there should be a separate cross banking charges are being calculated
subsidy surcharge for wind power and as per the formula provided in the
it should not on par with power National Tariff Policy. If the wind
purchased from IEX. generators are aggrieved by the CSS
formula, they can supply power directly
to ESCOMs.
Commission's Views: The matter has been repeatedly raised by the objector in
different fora. The petition filed by him has also been dismissed by the Commission.
cclxviii
Hence the issue has reached finality.
129. The group captive generators are For group captive, the captive user(s)
permitted to supply power for shall hold not less than 26% of the
consumers of contract demand ownership of the plant in aggregate and
below 1 MVA whereas, for supply of such captive user(s) shall consume not
wind energy through open access less than 51% of the Electricity
Non-Captive mode is that the Generated, determined on an annual
contract demand of the HT basis, in proportion to their shares in
Consumers should be above 1 MVA. ownerships of the power plants with in a
Therefore, same provision has to be variation not exceeding 10%. This
extended to open access Non- condition does not apply to open
Captive Generators as majority of HT access Non-Captive mode. The entities
consumers with contract demand of consume at least 51% of the power
above 1MVA are purchasing power generated and owns at least 26% of the
through IEX and OA Non-Captive equity are permitted to supply power for
Wind Generators cannot supply consumers are contract demand below
power to the consumer with contract 1 MVA.
demand below 1 MVA. This results in
destroying the growth of investments
in wind power projects, making the
existing the wind power projects
unviable and sick.
Commission's Views: The reply furnished by BESCOM is noted. As per prevailing
Regulations for consumers opting for Open Access, 1MW contract demand is
mandated.
cclxix
ESCOM's Total Approved Power Purchase For FY18
ENERGY PER UNIT
ENERGY CAPACITY CHARGES ENERGY
TOTAL COST RATE
NAME OF THE GENERATING STATION ALLOWED CHARGES PER UNIT CHARGES
(Rs Cr) (RS/Kwh
(MU) (Rs Cr) RATE (Rs Cr)
)
(RS/Kwh)
KPCL THERMAL STATIONS
RAICHUR THERMAL POWER
7850.68 792.92 3.34 2622.13 3415.05 4.35
STATION_RTPS 1-7 (7x210)
1269.00 227.15 2.88 365.47 592.62 4.67
STATION_RTPS 8 (1x250)
BELLARY THERMAL POWER
2516.00 274.36 3.52 885.63 1159.99 4.61
STATIONS_BTPS-1 (1x500)
2516.00 470.49 3.06 769.90 1240.39 4.93
960.00 0.00 2.87 275.52 275.52 2.87
YTPS (1x 800) 960.00 0.00 2.92 280.32 280.32 2.92
TOTAL KPCL THERMAL 16071.68 1764.92 3.23 5198.97 6963.89 4.33

CGS SOURCES
N.T.P.C-RSTP-I&II
3214.00 198.82 2.29 735.65 934.48 2.91
(3X200MW+3X500MW)
N.T.P.C-RSTP-III (1X500MW) 792.00 75.94 2.40 190.08 266.02 3.36
NTPC-Talcher (4X500MW) 2845.00 225.86 1.68 478.13 703.99 2.47
Simhadri Unit -1 &2 (2X500MW) 987.68 163.12 2.77 274.00 437.12 4.43
NTPC Tamilnadu Energy
Company Ltd (NTECL)_Vallur TPS 702.21 125.25 2.64 185.34 310.60 4.42
Stage I &2 &3 (3X500MW)
Neyveli Lignite Corporation_NLC
710.08 82.73 2.82 200.24 282.97 3.99
TPS-II STAGE I (3X210MW)
1126.00 135.83 2.82 317.53 453.36 4.03
TPS-II STAGE 2 (4X210MW)
698.00 98.92 2.61 182.07 281.00 4.03
TPS I EXP (2X210MW)
520.98 111.33 2.55 132.67 244.00 4.68
TPS2 EXP (2X250MW)
NLC TAMINADU POWER LIMITED
1153.11 216.03 2.50 288.28 504.30 4.37
(NTPL) (TUTICORIN) (2X500MW)
MAPS (2X220MW) 199.00 0.00 42.80 42.80 2.15
Kaiga Unit 1&2 (2X220MW) 920.00 0.00 293.10 293.10 3.19
Kaiga Unit 3 &4 (2X220MW) 912.00 0.00 290.55 290.55 3.19
NPCIL-KudanKulam Atomic
Power Generating Station 1511.00 0.00 623.16 623.16 4.12
(KKNPP U1 (1X1000MW)
NPCIL-KudanKulam Atomic
Power Generating Station 345.77 0.00 142.60 142.60 4.12
(KKNPP) U2(1X1000MW)
ENERGY
PER UNIT
ENERGY CAPACITY CHARGES ENERGY
TOTAL COST RATE
NAME OF THE GENERATING STATION ALLOWED CHARGES PER UNIT CHARGES
(Rs Cr) (RS/Kwh
(MU) (Rs Cr) RATE (Rs Cr)
)
(RS/Kwh)
cclxx
DVC-Unit-1 &2 Meja TPS
1402.48 208.22 2.38 333.59 541.82 3.86
(2x500MW)
DVC-Unit-7 & 8-KODERMA TPS
1753.58 321.82 2.19 383.48 705.30 4.02
(2x500MW)
Kudgi 750.04 0.00 3.02 226.51 226.51 3.02
TOTAL CGS Energy @ KPTCL
20542.92 1963.88 5319.80 7283.68 3.55
periphery
TOTAL MAJOR IPPS
UDUPI POWER CORPORATION
6712.00 1141.04 3.20 2147.84 3288.88 4.90
LIMITED_UPCL (2x600)
KPCL HYDEL STATIONS
SHARAVATHI VALLEY
4914.10 21.27 0.35 173.40 194.67 0.40
PROJECT_SVP (10x103.5+2x27.5)
MAHATMA GANDHI HYDRO
ELECTRIC POWER HOUSE_MGHE 279.58 2.32 0.45 12.60 14.92 0.53
(4x21.6+4x13.2)
GERUSOPPA_GPH (SHARAVATHI
521.59 24.43 1.11 57.94 82.37 1.58
TAIL RACE_STR) (4x60)
KALI VALLEY PROJECT_KVP
3172.76 21.36 0.55 174.31 195.67 0.62
(2x50+6x150)
VARAHI VALLEY PROJECT_VVP
1068.73 40.64 1.18 125.65 166.29 1.56
(4x115+2x4.5)
ALMATTI DAM POWER
481.63 31.50 0.97 46.73 78.23 1.62
HOUSE_ADPH (1x15+5x55)
BHADRA HYDRO ELECTRIC
POWER HOUSE_BHEP 60.65 1.50 3.36 20.39 21.89 3.61
((1x2+2x12)+(1x7.2+1x6))
KADRA POWER HOUSE_KPH
362.80 19.38 1.46 53.13 72.51 2.00
(3x50)
KODASALLI DAM POWER
340.17 12.01 1.14 38.86 50.87 1.50
HOUSE_KDPH (3x40)
GHATAPRABHA DAM POWER
82.75 2.18 1.68 13.92 16.10 1.95
HOUSE_GDPH (2x16)
SHIVASAMUDRAM (4x4+6x3) &
SHIMSHAPURA (2x8.6) HYDRO 292.24 3.54 0.80 23.52 27.06 0.93
STATIONS.
MUNIRABAD POWER HOUSE
91.46 0.43 0.58 5.32 5.75 0.63
(2x9+1x10)
TOTAL KPCL HYDRO 11668.46 180.56 0.64 745.77 926.33 0.79
OTHER HYDRO
PRIYADARSHINI JURALA HYDRO
110.00 4.35 47.82 47.82 4.35
ESLECTRIC STATION (6x39)
TUNGABHADRA DAM POWER
9.37 1.83 1.72 1.72 1.83
HOUSE_TBPH (4x9+4x9)
TOTAL OTHER HYDRO 119.37 4.15 49.54 49.54 4.15
RENEWABLE ENERGY SOURCES
WIND-IPPS 3704.87 1343.76 1343.76 3.63
KPCL-WIND (9x0.225+10x0.230) 7.80 2.89 2.89 3.71
MINI HYDEL-IPPS 1009.11 331.59 331.59 3.29
CO-GEN 160.01 74.30 74.30
4.64
ENERGY
ENERGY CAPACITY CHARGES ENERGY PER UNIT
TOTAL COST
NAME OF THE GENERATING STATION ALLOWED CHARGES PER UNIT CHARGES RATE
(Rs Cr)
(MU) (Rs Cr) RATE (Rs Cr) (RS/Kwh)
(RS/Kwh)
CAPPTIVE 13.17 3.74 3.74 2.84
BIOMASS 119.71 59.23 59.23 4.95
SOLAR-existing (anticipated as
932.00 618.10 618.10 6.63
on 31.03.2017)
cclxxi
Solar-New Park 535.96 187.59 187.59 3.50
Solar-KREDL 672.16 353.29 353.29 5.26

SOLAR-KPCL
(YELESANDRA,ITNAL,YAPALDINNI, 10.61 6.37 6.37 6.00
SHIMSHA) (3x1+3x1+1x3x1x5)
TOTAL RE 7165.41 2980.86 2980.86 4.16
NTPC Bundled power 582.21 258.46 258.46 4.44
Power purchase from Co gen 1300.00 451.10 451.10 3.47
Short term power purchase 1120.00 467.04 467.04 4.17

Short term Purchase from
294.00 106.43 106.43 3.62
MSEDCL
TRANSMISSION CHARGES 0.00
PGCIL CHARGES 1066.00 1066.00
KPTCL CHARGES 2753.70 2753.70
SLDC 24.77 24.77
POSOCO CHARGES 3.48 3.48

TOTAL INCLUDING
65576.04 8898.35 17725.80 26624.15 4.06
TRANSMISSION & SLDC CHARGES
cclxxii
BESCOM’s Approved Power Purchase for FY18
ENERGY PER
% SHARE
ENERGY CAPACITY CHARGES ENERGY TOTAL UNIT
OF
NAME OF THE GENERATING STATION ALLOWED CHARGES PER UNIT CHARGES COST RATE
ENERGY
(MU) (Rs Cr) RATE (Rs Cr) (Rs Cr) (RS/Kw
ALLOWED
(RS/Kwh) h)
KPCL THERMAL STATIONS

67.500 5299.21 535.22 3.34 1769.94 2305.16 4.35
STATION_RTPS 1-7 (7x210)
47.210 599.09 107.24 2.88 172.54 279.78 4.67
STATION_RTPS 8 (1x250)
47.210 1187.80 129.53 3.52 418.11 547.63 4.61
47.210 1187.80 222.12 3.06 363.47 585.59 4.93
47.210 453.22 0.00 2.87 130.07 130.07 2.87
YTPS (1x 800) 47.210 453.22 0.00 2.92 132.34 132.34 2.92
TOTAL KPCL THERMAL 9180.34 994.10 3.25 2986.46 3980.56 4.33
CGS SOURCES
N.T.P.C-RSTP-I&II
47.210 1517.33 93.87 2.29 347.30 441.17 2.91
(3X200MW+3X500MW)
N.T.P.C-RSTP-III (1X500MW) 47.210 373.90 35.85 2.40 89.74 125.59 3.36
NTPC-Talcher (4X500MW) 47.210 1343.12 106.63 1.68 225.72 332.35 2.47
Simhadri Unit -1 &2 (2X500MW) 47.210 466.28 77.01 2.77 129.36 206.36 4.43
NTPC Tamilnadu Energy Company
Ltd (NTECL)_Vallur TPS Stage I &2 47.210 331.51 59.13 2.64 87.50 146.63 4.42
&3 (3X500MW)
47.210 335.23 39.06 2.82 94.53 133.59 3.99
TPS-II STAGE I (3X210MW)
47.210 531.58 64.13 2.82 149.91 214.03 4.03
TPS-II STAGE 2 (4X210MW)
47.210 329.53 46.70 2.61 85.96 132.66 4.03
TPS I EXP (2X210MW)
47.210 245.95 52.56 2.55 62.64 115.19 4.68
TPS2 EXP (2X250MW)
NLC TAMINADU POWER LIMITED
47.210 544.38 101.99 2.50 136.10 238.08 4.37
(NTPL) (TUTICORIN) (2X500MW)
MAPS (2X220MW) 47.210 93.95 2.15 20.21 20.21 2.15
Kaiga Unit 1&2 (2X220MW) 47.210 434.33 3.19 138.37 138.37 3.19
Kaiga Unit 3 &4 (2X220MW) 47.210 430.56 3.19 137.17 137.17 3.19
NPCIL-KudanKulam Atomic Power
Generating Station (KKNPP U1 47.210 713.34 4.12 294.19 294.19 4.12
(1X1000MW)
NPCIL-KudanKulam Atomic Power
Generating Station (KKNPP) 47.210 163.24 4.12 67.32 67.32 4.12
U2(1X1000MW)
3.86
DVC-Unit-1 &2 Meja TPS
47.210 662.11 98.30 2.38 157.49 255.79
(2x500MW)
% SHARE ENERGY PER

ENERGY CAPACITY ENERGY TOTAL
OF CHARGES UNIT
NAME OF THE GENERATING STATION ALLOWED CHARGES CHARGES COST
ENERGY PER UNIT RATE
(MU) (Rs Cr) (Rs Cr) (Rs Cr)
ALLOWED RATE (RS/Kw
cclxxiii
(RS/Kwh) h)
DVC-Unit-7 & 8-KODERMA TPS

47.210 827.86 151.93 2.19 181.04 332.97 4.02
(2x500MW)
Kudgi 47.210 354.10 0.00 3.02 106.94 106.94 3.02
TOTAL CGS Energy @ KPTCl
9698.31 927.15 2.59 2511.48 3438.63 3.55
periphery
TOTAL MAJOR IPPS
UDUPI POWER CORPORATION
57.446 3855.76 655.48 3.20 1233.84 1889.32 4.90
LIMITED_UPCL (2x600)
KPCL HYDEL STATIONS
SHARAVATHI VALLEY PROJECT_SVP
6.391 314.04 1.36 0.35 11.08 12.44 0.40
(10x103.5+2x27.5)
MAHATMA GANDHI HYDRO
ELECTRIC POWER HOUSE_MGHE 47.210 131.99 1.10 0.45 5.95 7.04 0.53
(4x21.6+4x13.2)
GERUSOPPA_GPH (SHARAVATHI
47.210 246.24 11.53 1.11 27.35 38.89 1.58
TAIL RACE_STR) (4x60)
KALI VALLEY PROJECT_KVP
26.110 828.40 5.58 0.55 45.51 51.09 0.62
(2x50+6x150)
VARAHI VALLEY PROJECT_VVP
47.210 504.55 19.19 1.18 59.32 78.51 1.56
(4x115+2x4.5)
ALMATTI DAM POWER
47.210 227.38 14.87 0.97 22.06 36.93 1.62
HOUSE_ADPH (1x15+5x55)
BHADRA HYDRO ELECTRIC POWER
HOUSE_BHEP 47.210 28.63 0.71 3.36 9.63 10.33 3.61
((1x2+2x12)+(1x7.2+1x6))
KADRA POWER HOUSE_KPH (3x50) 47.210 171.28 9.15 1.46 25.08 34.23 2.00
KODASALLI DAM POWER
47.210 160.60 5.67 1.14 18.35 24.02 1.50
HOUSE_KDPH (3x40)
GHATAPRABHA DAM POWER
47.210 39.07 1.03 1.68 6.57 7.60 1.95
HOUSE_GDPH (2x16)
SHIVASAMUDRAM (4x4+6x3) &
SHIMSHAPURA (2x8.6) HYDRO 47.210 137.97 1.67 0.80 11.10 12.78 0.93
STATIONS.
MUNIRABAD POWER HOUSE
47.210 43.18 0.20 0.58 2.51 2.71 0.63
(2x9+1x10)
TOTAL KPCL HYDRO 2833.31 72.05 0.86 244.52 316.57 1.12
OTHER HYDRO
PRIYADARSHINI JURALA HYDRO
47.210 51.93 4.35 22.58 22.58 4.35
ESLECTRIC STATION (6x39)
TUNGABHADRA DAM POWER
47.210 4.42 1.83 0.81 0.81 1.83
HOUSE_TBPH (4x9+4x9)
TOTAL OTHER HYDRO 47.210 56.35 4.15 23.39 23.39 4.15
RENEWABLE ENERGY SOURCES
WIND-IPPS 2216.70 804.00 804.00 3.63
KPCL-WIND (9x0.225+10x0.230) 7.80 2.89 2.89 3.71
MINI HYDEL-IPPS 454.46 149.34 149.34 3.29
CO-GEN 0.00 0.00 0.00 4.64
ENERGY PER
% SHARE
ENERGY CAPACITY CHARGES ENERGY TOTAL UNIT
OF
NAME OF THE GENERATING STATION ALLOWED CHARGES PER UNIT CHARGES COST RATE
ENERGY
(MU) (Rs Cr) RATE (Rs Cr) (Rs Cr) (RS/Kw
ALLOWED
(RS/Kwh) h)
CAPPTIVE 0.00 0.00 0.00 2.84
BIOMASS 39.36 19.48 19.48 4.95
SOLAR-existing (anticipated as on 362.18 240.20 240.20 6.63
cclxxiv
31.03.2017)
Solar-New Park 47.787 256.12 89.64 89.64 3.50
Solar-KREDL 288.51 151.64 151.64 5.26
SOLAR-KPCL
(YELESANDRA,ITNAL,YAPALDINNI,S 4.07 2.44 2.44 6.00
HIMSHA) (3x1+3x1+1x3x1x5)
TOTAL RE 3629.20 1459.62 1459.62
NTPC Bundled power 52.332 304.68 135.26 135.26 4.44
Power purchase from Co gen 47.788 621.24 215.57 215.57 3.47
Short term power purchase 50.000 560.00 233.52 233.52 4.17
Short term Purchase from MSEDCL 47.788 140.497 50.86 50.86 3.62
TRANSMISSION CHARGES
PGCIL CHARGES 520.23 520.23
KPTCL CHARGES 1347.80 1347.80
SLDC 11.33 11.33
POSOCO CHARGES 1.66 1.66
TOTAL INCLUDING TRANSMISSION
30879.69 4529.80 9094.51 13624.31 4.41
& SLDC CHARGES
cclxxv
Annexure- III
PROPOSED AND APPROVED REVENUE AND REALISATION AND LEVEL OF CROSS SUBSIDY FOR FY-18 OF
BESCOM
With ref. With ref. to voltage
to ACS wise COS*
Proposed by Approved as per

BESCOM RST Level of Level of
Average Level of Cross Cross
Sl Realisati Cross
Category Description Revenue Revenue Subsidy
Subsidy Subsidy
No Sales- Sales- on in Rs.
Rs. Rs. in % in % in %
MU MU Per Kwh
crores crores (LT&HT) (EHT)
LT-1[fully Bhagya Jyothi/Kutir Jyothi

subsidised
1 by GoK]* 68.87 51.26 130.37 84.48 6.48 0.00 -4.14
Dom. / AEH - Applicable to
Bruhat Bangalore Mahanagara
Palike(BBMP), Municipal
Corporations & all areas under
2 LT-2(a)(i) Urban Local Bodies . 6316.69 4440.96 6322.69 3552.69 5.62 -13.29 -16.88
Dom. / AEH - Applicable to
areas coming under Village
3 LT-2(a)(ii) Panchayats 702.73 410.85 643.69 307.12 4.77 -26.37 -29.42
Pvt. Educational Institutions
4 LT-2(b)(i) Urban Local Bodies . 41.01 37.37 43.88 34.00 7.75 19.57 14.62
Pvt. Educational Institutions
Applicable to areas coming
5 LT-2(b)(ii) under Village Panchayats 5.95 6.06 5.19 3.44 6.63 2.16 -2.07
Commercial - Application to
6 LT-3(i) Urban Local Bodies . 1846.78 1857.98 1848.59 1618.14 8.75 35.08 29.49
Commercial - Applicable to
areas coming under Village
7 LT-3(ii) Panchayats 152.16 140.16 152.26 125.54 8.25 27.24 21.97
IP<=10HP
8 LT-4(a)(i)* 6837.80 2970.34 6157.95 2056.76 3.34 -48.46 -50.59
IP>10HP
10 LT-4(b) 2.36 1.39 4.60 1.92 4.17 -35.55 -38.22
Pvt Nurseries, Coffee&Tea
Plantations of sanctioned load
11 LT-4 (c) (i) of 10 HP& below 4.90 2.37 3.50 1.33 3.80 -41.50 -43.92
Pvt Nurseries, Coffee&Tea
Plantations of sanctioned load
12 LT-4 (c) (ii) above 10 HP. 0.00 0.00 1.40 0.69 0.00 -23.47 -26.64
Industrial - Applicable to
13 LT-5(a) Corporations 799.38 651.80 799.37 623.61 7.80 20.39 15.40
Industrial - Applicable to all
areas other than those
14 LT-5(b) covered under LT5(a) 387.86 299.59 387.87 300.56 7.75 19.58 14.63
15 LT-6 Water supply 448.19 287.02 453.97 261.79 5.77 -11.01 -14.69
16 LT-6 Public lighting 353.24 282.73 391.17 273.67 7.00 7.96 3.49
17 LT-7(a) Temporary supply 158.63 183.96 157.30 302.76 19.25 197.03 184.72
Permanent Supply to
18 LT-7(b) Adversiting & Holding 0.00 0.00 1.33 1.41 10.60 63.82 57.04
18126.5 17505.1
LT - TOTAL 5 11623.84 3 9549.91 5.46 -15.81 -19.03
1 HT-1 Water supply & sewerage 738.04 420.80 738.04 401.11 5.43 -16.13 -8.35 -12.23
Industrial - Applicable to
Bangalore Mahanagara
Palike(BBMP) and Municipall
2 HT-2(a)(i) Corporation. 2243.13 1840.05 2372.65 1885.05 7.94 22.61 33.98 30.63
cclxxvi
Industrial - Applicable to areas
other than those under HT2(a)
3 HT-2(a)(ii) (i) 2165.91 1868.86 2290.58 1721.17 7.51 15.96 26.71 23.26
areas under Bangalore
Mahanagara Palike Municipal
4 HT-2(b)(i) Corporation. 2411.84 2456.74 2474.84 2363.90 9.55 47.40 61.08 57.76
areas other than those
5 HT-2(b)(ii) covered under HT2(b) (i) 201.21 194.31 192.01 197.24 10.27 58.52 73.22 69.11
Govt./ Aided Hospitals &
Educational Institutions
6 HT-2( c) (i) 130.57 108.48 134.10 98.02 7.31 12.79 23.26 19.22
Hospitals and Educational
Institutions other than covered
7 HT-2( c) (ii) under HT-2( c) (i) 141.44 133.21 137.91 113.08 8.20 26.53 38.37 34.51
Lift Irrigation - Applicable to Lift
Irrigation Schemes under
Govt. Depts/ Govt. owned
8 HT-3(a)(i) Corporations. 9.77 3.40 65.92 14.83 2.25 -65.28 -62.06 -65.28
Lift Irrigation - Applicable to Lift
Irrigation schemes Lift
Irrigation Societies connected
9 HT-3(a)(ii) to Urban/Express feeders. 0.00 0.00 2.08 0.49 2.36 -63.25 -59.84 -63.45
Lift Irrigation - Applicable to
Private lift irrigation schemes &
L I societies other than those
10 HT-3(a)(iii) covered under HT-3(a) (ii) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Irrigation & Agriculture
Farms,Govt. Horticultural
Farms, Pvt.Horticulture
Nurseries, Coffee,
Tea,Cocanut & Arecanut
11 HT - 3b Plantations 0.69 0.48 4.84 2.06 4.26 -34.41 -28.33 -30.56
Residential Apartments -
12 HT-4(a) Colonies 118.91 86.09 114.70 75.56 6.59 1.66 11.09 7.73
13 HT-5 Temporary supply 76.36 91.85 76.36 147.23 19.28 197.55 225.14 212.63
HT - TOTAL 8237.87 7204.27 8604.03 7019.74 8.16 25.91 37.58 34.06
26364.4 26109.1
TOTAL 0 18828.11 6 16569.65 6.35
Misc. Revenue 87.84 344.54
26364.4 26109.1
Grand Total 0 18915.95 6 16914.19 6.48 0.00
* These categories are subsidised by GoK. In case subsidy is not released by the Gok in
advance,BESCOM
shall raise demand & collect CDT of Rs.6.48/unit by BJ/KJ & Rs.3.34 /unit from IP set Consumers.
* Voltage wise cost of supply per unit to: LT Rs: 6.76, HT Rs.5.93
& EHT- Rs.5.76 Page - 266
cclxxvii
ANNEXURE - IV
ELECTRICITY TARIFF - 2018
K.E.R.C. ORDER DATED: 11th April, 2017
Effective for the Electricity consumed from the first meter

reading date falling on or after 01.04.2017
Bangalore
Electricity Supply Company Ltd.,
cclxxviii
ELECTRICITY TARIFF-2018
GENERAL TERMS AND CONDITIONS OF TARIFF:
(APPLICABLE TO BOTH HT AND LT)
1. Supply of power is subject to execution of agreement by the

Consumer in the prescribed form, payment of prescribed
deposits and compliance of terms and conditions as stipulated
in the Conditions of Supply of Electricity of the Distribution
Licensees in the State of Karnataka and Regulations issued
under the Electricity Act, 2003 at the time of supply and
continuation of power supply is subject to compliance of the
said Conditions of Supply / Regulations as amended from time
to time.
2. The tariffs are applicable to only single point of supply unless

otherwise approved by the Licensee.
3. The Licensee does not bind himself to energize any installation,

unless the Consumer guarantees the minimum charges. The
minimum charge is the power supply charges in accordance
with the tariff in force from time to time. This shall be payable by
the Consumer until power supply agreement is terminated,
irrespective of the installation being in service or under
disconnection.
4. The tariffs in the schedule are applicable to power supply within

the area of operation of the licensee.
5. The tariffs are subject to levy of Tax and Surcharges thereon

as may be decided by the State Government from time to time.
cclxxix
6. For the purpose of these tariffs, the following conversion table would
be used:
1 HP=0.746 KW. 1HP=0.878 KVA.
7. The bill amount will be rounded off to the nearest Rupee, i.e., the bill
amount of 50 Paise and above will be rounded off to the next higher
Rupee and the amount less than 50 Paise will be ignored.
8. Use of power for temporary illumination in the premises already having

permanent power supply for marriages, exhibitions in hotels, sales
promotions etc., is limited to sanctioned load at the applicable
permanent power supply tariff rates. Temporary tariff rates will be
applicable in case the load exceeds sanctioned load as per the
Conditions of Supply of Electricity of the Distribution Licensees in the
State of Karnataka.
9. No LT power supply will be given where the requisitioned load is 50

KW/67 HP and above. This condition does not apply for installations
serviced under clause 3.1.1 of K.E.R.C. (Recovery of Expenditure for
supply of Electricity) Regulations, 2004 and its amendments from time
to time. The applicant is however at liberty to avail HT supply for lesser
loads. The minimum contract demand for HT supply shall be 25 KVA or
as amended from time to time by the Licensee with the approval of
KERC.
10. The Consumer shall not resell electricity purchased from the Licensee
to a third party except –
(a) Where the Consumer holds a sanction or a tariff provision for

distribution and sale of energy,
(b) Under special contract permitting the Consumer for resale of

energy in accordance with the provisions of the contract.
11. Non-receipt of the bill by the Consumer is not a valid reason for non-
payment. The Consumer shall notify the office of issue of the bill, if the
same is not received within 7 days from the meter reading date.
Otherwise, it will be deemed that the bills have reached the Consumer
in due time.
cclxxx
12. The Licensee will levy the following charges for non-realization of
each Cheque.
1 Cheque amount upto 5% of the amount subject to a

Rs. 10,000/- minimum of Rs.100/-
2 Cheque amount of 3% of the amount subject to a
Rs. 10,001/- and upto minimum of Rs.500/-
Rs. 1,00,000/-
3 Cheque amount above 2% of the amount subject to a
Rs. 1 Lakh: minimum of Rs3000/-
13. In respect of power supply charges paid by the Consumer through

money order, Cheque /DD sent by post, receipt will be drawn and the
Consumer has to collect the same.
14. In case of any belated payment, simple interest at the rate of 1 % per
month will be levied on the actual No. of days of delay subject to a
minimum of Re.1/- for LT installation and Rs.100/- for HT installation. No
interest is however levied for arrears of Rs.10/- and less.
15. All LT Consumers, except BhagyaJyothi and KutirJyothi Consumers, shall

provide current limiter/Circuit Breakers of capacity prescribed by the
Licensee depending upon the sanctioned load.
16. All payments made by the Consumer will be adjusted in the following
order of priority: -
(a) Interest on arrears of Electricity Tax

(b) Arrears of Electricity Tax
(c) Arrears of Interest on Electricity charges
(d) Arrears of Electricity charges
(e) Current month’s dues
17. For the purpose of billing,
(i) the higher of the rated load or sanctioned load in respect of LT

installations which are not provided with Electronic Tri-Vector
meter,
(ii) sanctioned load or MD recorded, whichever is higher, in respect

of installations provided with static meter or Electronic Tri-Vector
meter or static meter, will be considered.
cclxxxi
Penalty and other clauses shall apply if sanctioned load is
exceeded.
18. The bill amount shall be paid within 15 days from the date of
presentation of the bill failing which the interest becomes payable.
19. For individual installations, more than one meter shall not be provided
under the same tariff. Wherever two or more meters are existing for
individual installation, the sum of the consumption recorded by the
meters shall be taken for billing, till they are merged.
20. In case of multiple connections in a building, all the meters shall be

provided at one easily accessible place in the ground floor.
21. Reconnection charges: The following reconnection charges shall be

levied in case of disconnection and included in the monthly bill.
For reconnection of:
a Single Phase Domestic installations Rs.20/-per Installation.

under Tariff schedule LT 1 & LT2 (a)
b Three Phase Domestic installations Rs.50/-per Installation.
under Tariff schedule LT2 (a) and
Single Phase Commercial & Power
installations.
c All LT installations with 3 Phase supply Rs.100/- per
other than LT2 (a) Installation.
d All HT& EHT installations Rs. 500/-per
Installation.
22. Revenue payments upto and inclusive of Rs.10, 000/- shall be made by
cash or cheque or D.D and payments above Rs.10, 000/- shall be
made by cheque or D.D only. Payments under other heads of
account shall be made by cash or D.D up to and inclusive of
Rs.10,000/- and payment aboveRs.10, 000/-shall be by D.D only.
Note: The Consumers can avail the facility of payment of monthly power
supply bill through Electronic clearing system (ECS)/ Credit cards /
RTGS/ NEFT/ on-line E-Payment / Digital mode of payments as per
the guidelines issued by the RBI wherever such facility is provided
by the Licensee in respect of revenue payments up to the limit
prescribed by the RBI.
cclxxxii
23. For the types of installations not covered under any Tariff schedules,
the Licensee is permitted to classify such installations under
appropriate Tariff schedule under intimation to the K.E.R.C.
24. Seasonal Industries
Applicable to all Seasonal Industries.
i) The industries that intend to avail this benefit shall have Electronic Tri-
Vector Meter installed to their installations.
ii) ‘Working season’ months and ‘off-season’ months shall be

determined by an order issued by the Executive Engineer of the
concerned O&M Division of the Licensee as per the request of the
Consumer and will continue from year to year unless otherwise
altered. The Consumer shall give a clear one month’s notice in case
he intends to change his ‘working season’.
iii) The consumption during any month of the declared off-season shall
not be more than 25% of the average consumption of the previous
working season.
iv) The ‘Working season’ months and ‘off-season’ months shall be full–
calendar months. If the power availed during a month exceeds the
allotment for the ‘off-season’ month, it shall be taken for calculating
the billing demand as if the month is the ‘working season’ month.
v) The Consumer can avail the facility of ‘off-season’ up to six months

in a calendar year not exceeding in two spells in that year. During
the ‘off-season’ period, the Consumer may use power for
administrative offices etc., and for overhauling and repairing plant
and machinery.
25. Whether an institution availing Power supply can be considered as

charitable or not will be decided by the Licensee on the
production of certificate Form-12 A from the Income Tax
department.
cclxxxiii
26 Time of the Tariff (ToD)
The Commission as decided in the earlier tariff orders, decides to

continue compulsory Time of Day Tariff for HT2 (a) , HT2 (b) and HT2(c)
consumers with a contract demand of 500 KVA and above. Further,
the optional ToD will continue as existing for HT2 (a),HT2 (b) and HT 2(C)
consumers with contract demand of less than 500 KVA. Also the ToD for
HT1 consumers on optional basis would continue as existing earlier.
Details of ToD tariff are indicated under the respective tariff category.
27. SICK INDUSTRIES:

The Government of Karnataka has extended certain reliefs for
revival/rehabilitation of sick industries under the New Industrial Policy
2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001. Further, the
Government of Karnataka has issued G.O No.CI2 BIF 2010, dated
21.10.2010. The Commission, in its Tariff Order 2002, has accorded
approval for implementation of reliefs to the sick industries as per the
Government policy and the same was continued in the subsequent
Tariff Orders. In view of issue of the G.O No.CI2 BIF 2010, dated
21.10.2010, the Commission has accorded approval to ESCOMs for
implementation of the reliefs extended to sick industrial units for their
revival / rehabilitation on the basis ofthe orders issued by the
Commissioner for Industrial Development and Director of Industries &
Commerce, Government of Karnataka.
28. Incentive for Prompt Payment / Advance Payment: An incentive at the

rate of 0.25% of such bill shall be given to the following Consumers by
way of adjustment in the subsequent month’s bill:
(i) In all cases of payment through ECS.

(ii) And in the case of monthly bills exceeding Rs.1, 00,000/- (Rs. one
lakh), if the payment is made 10 days in advance of the due
date.
(iii) Advance Payment exceeding Rs 1000/-made by the Consumers
towards monthly bills.
cclxxxiv
29. Conditions of Supply of Electricity of the Distribution Licensees in the
State of Karnataka and amendments issued thereon from time to time
and Regulations issued under the Electricity Act, 2003 will prevail over
the extract given in this tariff book in the event of any discrepancy.
30. Self-Reading of Meters:
The Commission has approved Self-Reading of Meters by Consumers

and issue of bills by the Licensee based on such readings and the
Licensee shall take the reading at least once in six months and
reconcile the difference, if any and raise the bills accordingly. This
procedure may be implemented by the Licensee as stipulated under
Section 26.01 of Conditions of Supply of Electricity of the Distribution
Licensees in the State of Karnataka.
cclxxxv
ELECTRICITY TARIFF - 2018
PART-1
HIGH TENSION SUPPLY
Applicable to Bulk Power Supply of

Voltages at 11KV (including 2.3/4.6
KV) and above at Standard High
Voltage or Extra High Voltages when
the Contract Demand is 50 KW / 67
HP and above.
cclxxxvi
ELECTRICITY TARIFF –2018
PART-1
HIGH TENSION SUPPLY
Applicable to Bulk Power Supply at Voltages of 11KV (including 2.3/4.6

KV) and above at Standard High Voltage or Extra High Voltages when
the Contract Demand is 50 KW / 67 HP and above.
cclxxxvii
CONDITIONS APPLICABLE TO BILLING OF HT INSTALLATIONS:
1. Billing Demand
A) The billing demand during unrestricted period shall be the maximum

demand recorded during the month or 75% of the CD, whichever is
higher.
B) When the Licensee has imposed demand cut of 25% or less, the
conditions stipulated in (A) shall apply.
C) When the demand cut is in excess of 25%, the billing demand shall be
the maximum demand recorded or 75% of the restricted demand,
whichever is higher.
D) If at any time the maximum demand recorded exceeds the CD or the

demand entitlement, or opted demand entitlement during the period
of restrictions, if any, the Consumer shall pay for the quantum of excess
demand at two times the normal rate per KVA per month as deterrent
charges as per Section 126(6) of the Electricity Act, 2003. For over-
drawal during the billing period, the penalty shall be two times the
normal rate.
E) During the periods of disconnection, the billing demand shall be 75% of

CD, or 75% of the demand entitlement that would have been
applicable, had the installation been in service, whichever is less. This
provision is applicable only, if the installation is under disconnection for
the entire billing month.
F) During the period of energy cut, the Consumer may get his demand
entitlement lowered, but not below the percentage of energy
entitlement, (For example, in case the energy entitlement is 40% and
the demand entitlement is 80%, the re-fixation of demand entitlement
cannot be lower than 40% of the CD). The benefit of lower demand
cclxxxviii
entitlement will be given effect to from the meter reading date of the
same month, if the option is exercised on or before 15th of the month. If
the option is exercised on or after 16th of the month, the benefit will be
given effect to from the next meter reading date. The Consumer shall
register such option by paying a processing fee of Rs.100/- at the
Jurisdictional sub-division office.
(i) The billing demand in such cases, shall be the “Revised (Opted)
Demand Entitlement” or, the recorded demand, whichever is
higher. Such option for reduction of demand entitlement, is allowed
only once during the entire span of that particular “Energy Cut
Period”. The Consumer, can however, opt for a higher demand
entitlement upto the level permissible under the demand cut
notification, and the benefit will be given effect to from the next
meter reading date. Once the Consumer opts for enhancement of
demand, which has been reduced under Clause (F), no further
revision is permitted during that particular energy cut period.
(ii) The opted reduced demand entitlement will automatically cease

to be effective, when the energy cut is revised. The facility for
reduction and enhancement can however be exercised afresh by
the Consumer as indicated in the previous paras.
G) For the purpose of billing, the billing demand of 0.5 KVA and above will
be rounded off to the next higher KVA, and billing demand of less
than 0.5 KVA shall be ignored.
2. Power factor (PF)
It shall be the responsibility of the HT Consumer to determine the

capacity of PF correction apparatus and maintain an average PF of
not less than 0.90.
(i) The specified P.F. is 0.90. If the power factor goes below 0.90
Lag, a surcharge of 3 Paise per unit consumed will be levied for
every reduction of P.F. by 0.01 below 0.90 Lag.
cclxxxix
(ii) The power factor when computed as the ratio of KWh / KVAh
will be determined upto 3 decimals (ignoring figures in the other
decimal places), and then rounded off to the nearest second
decimal as illustrated below:
(a) 0.8949 to be rounded off to 0.89

(b) 0.8951 to be rounded off to 0.90
In respect of Electronic Tri-Vector meters, the recorded average PF

over the billing period shall be considered for billing purposes. If the
same is not available, the ratio of KWh to KVAh consumed in the billing
month shall be considered.
3. Rebate for supply at high voltage:
If the Consumer is availing power at voltage higher than 13.2 KV, he will
be entitled to a rebate as indicated below:
Supply Voltage: Rebate
A) 33/66 KV 2 Paise/unit of energy consumed

B) 110 KV 3 Paise/unit of energy consumed
C) 220 KV 5 Paise/unit of energy consumed
The above rebate will be allowed in respect of all the installations of

the above voltage class, including the existing installations, and also
for installations converted from 13.2 KV and below to 33 KV and above
and also for installations converted from 33/66 KV to 110/220 KV, from
the next meter reading date after conversion / service / date of
notification of this Tariff order, as the case may be. The above rebate is
applicable only on the normal energy consumed by the Consumer
including the consumption under TOD Tariff, and is not applicable on
any other energy allotted and consumed, if any, viz.,
i) Wheeled Energy.
ii) Any energy, including the special energy allotted over and
above normal entitlement.
iii) Energy drawal under special incentive scheme, if any.
The above rebate is not applicable for Railway Traction.
ccxc
4. In respect of Residential Quarters / Colonies availing Bulk power supply
by tapping the main HT supply, the energy consumed by such Colony
loads, metered at single point, shall be billed under HT-4 tariff schedule.
No reduction in demand recorded in the main HT meter will be
allowed.
5. Energy supplied may be utilized for all purposes associated with the
working of the installations, such as, Office, Stores, Canteens, Yard
Lighting, Water Supply and Advertisements within the premises.
6. Energy can also be used for construction, modification and expansion

purposes within the premises.
7. Power supply under HT-4 tariff schedule may be used for Commercial
and other purposes inside the colony for installations such as Canteen,
Club, Shop, Auditorium etc., provided, this load is less than 10% of the
CD.
8. In respect of Residential Apartments, availing HT Power supply under

HT-4 tariff schedule, the supply availed for Commercial and other
purposes like Shops, Hotels, etc., will be billed under appropriate tariff
schedule (Only Energy charges) duly deducting such consumption in
the main HT supply bill. No reduction in the recorded demand of the
main HT meter is allowed. Common areas shall be billed at Tariff
applicable to that of the predominant Consumer category.
9. Seasonal Industries
a. The industries, which intend to utilize seasonal industry benefit, shall

conform to the conditionalities under Para no. 24 of the General
terms and conditions of tariff (applicable to both HT & LT).
b. The industries that intend to avail this benefit shall have Electronic
Tri-Vector Meter fitted to the installation.
c. Monthly charges during the working season, shall be the demand
charges on 75% of the contract demand, or the recorded
maximum demand during the month, whichever is higher, plus the
energy charges
ccxci
d. Monthly charges during the off season shall be demand charges on
the maximum demand recorded during the month or 50% of the CD
whichever is higher plus the energy charges.
ccxcii
Applicable to Water Supply, Drainage / Sewerage water treatment plant and

Sewerage Pumping installations, belonging to Bangalore Water Supply and
Sewerage Board, Karnataka Urban Water Supply and Sewerage Board, other
local bodies, State and Central Government.
[
RATE SCHEDULE
Demand charges Rs.200 /kVA of billing demand/month
Energy charges
[
485 paise/unit
TOD Tariff at the option of the Consumer
Time of Day Increase (+) / reduction (-) in energy

10.00 Hrs to 18.00 Hrs 0
next day
Note: Energy supplied to residential quarters availing bulk supply by

the above category of Consumer, shall be metered separately
at a single point, and the energy consumed shall be billed at HT-
4 Tariff. No reduction in the demand recorded in the main HT
meter will be allowed.
TARIFF SCHEDULE HT-2(a)

Applicable to Industries, Factories, Workshops, Research &
Development Centres, Industrial Estates, Milk dairies, Rice Mills, Phova
Mills, Roller Flour Mills, News Papers, Printing Press, Railway
Workshops/KSRTC Workshops/ Depots, Crematoriums, Cold Storage,
Ice & Ice-cream mfg. Units, Swimming Pools of local bodies, Water
Supply Installations of KIADB and other industries, all Defence
Establishments. Hatcheries, Poultry Farm, Museum, Floriculture, Green
House, Bio Technical Laboratory, Hybrid Seeds processing Units, Stone
Crushers, Stone cutting, Bakery Product Manufacturing Units, Mysore
Palace illumination, Film Studios, Dubbing Theatres, Processing, Printing,
Developing and Recording Theaters, Tissue Culture, Aqua Culture,
Prawn Culture, Information Technology Industries engaged in
ccxciii
development of Hardware & Software, Information Technology (IT)
enabled Services / Start-ups(As defined in GOI notification dated
17.04.2015)/ Animation / Gaming / Computer Graphics as certified by
the IT & BT Department of GOK/GOI, Drug Mfg. Units, Garment Mfg.
Units, Tyre retreading units, Nuclear Power Projects, Stadiums
maintained by Government and local bodies, also Railway Traction,
Effluent treatment plants and Drainage water treatment plants owned
other than by the local bodies, LPG bottling plants, petroleum pipeline
projects, Piggery farms, Analytical Lab for analysis of ore metals, Saw
Mills, Toy/wood industries, Satellite communication centres, and
Mineral water processing plants / drinking water bottling plants.
RATE SCHEDULE
HT-2(a)(i): Applicable to Areas under Bruhat Bangalore Mahangara Palike

(BBMP) and Municipal Corporations
Demand charges Rs.210 /kVA of billing demand/month

Energy charges
For the first one lakh units 665 paise per unit
For the balance units 695 paise per unit
Railway Traction and Effluent Treatment Plants
Demand charges Rs.210/kVA of billing demand/month

Energy Charges 620 paise per unit for all the units
Tariff applicable to Bangalore Metropolitan Railway Corporations

Ltd., (BMRCL)

HT-2(a)(ii): Applicable to Areas other than those covered under HT-2(a)(i)

Energy charges
Railway Traction and Effluent Treatment Plants
ccxciv
ARIFF SCHEDULE HT-2(b)
Applicable to Commercial Complexes, Cinemas, Hotels, Boarding & Lodging,

Amusement Parks, Telephone Exchanges, Race Course, All Clubs, T.V.
Station, All India Radio, Railway Stations, Air Port, BMTC,KSRTC bus
stations, All offices, Banks, Commercial Multi-storied buildings, APMC Yards,
Stadiums other than those maintained by Government and Local Bodies,
Construction power for irrigation, Power Projects and Konkan Railway
Project, Petrol / Diesel and Oil storage plants, I.T. based medical transcription
centers, telecom, call centers / BPO / KPO, Diagnostic centres, concrete
mixture (Ready Mix Concrete) units.
RATE SCHEDULE
HT-2 (b)(i): Applicable to Areas under Bruhat Bangalore Mahangara Palike

(BBMP) and Municipal Corporations.
Energy charges
For the first two lakh units 845 paise per unit
HT-2(b)(ii): Applicable to all areas other than those covered under HT-2(b)(i)

Energy charges
For the first two lakh units 825 paise per unit
TARIFF SCHEDULE HT-2(c)
RATE SCHEDULE
HT-2 (c) (i) - Applicable to Government Hospitals, Hospitals run by

Charitable Institutions, ESI hospitals, Universities and Educational
Institutions belonging to Government and Local bodies, Aided
Educational Institutions and Hostels of all Educational Institutions.
Energy charges
ccxcv
RATE SCHEDULE
HT-2 (c) (ii) -Applicable to Hospitals and Educational Institutions other than
those covered under HT-2 (c) (i).

Energy charges
For the first one lakh units 740 paise per unit.
For the balance units 780 paise per unit.
Note: Applicable to HT-2 (a), HT-2 (b)& HT-2(c) Tariff Schedule.
1. Energy supplied may be utilized for all purposes associated

with the working of the installation such as offices, stores,
canteens, yard lighting, water pumping and
advertisement within the premises.
2. Energy can be used for construction, modification and
expansion purposes within the premises.
3. In respect of industries availing HT power supply under HT2

(a) tariff schedule, the supply availed for Effluent
Treatment Plant situated within the premises by fixing the
separate sub-meter, a rebate of 50 paise per unit of
electricity consumed by such Effluent Treatment Plant shall
be given to the applicable tariff schedule. No reduction in
the recorded demand of the main HT supply is allowed.
TOD Tariff applicable to HT 2(a), HT2 (b) and HT2(c) category.

10.00 Hrs to 18.00 Hrs 0
next day
ccxcvi
TARIFF SCHEDULE HT-3 (a)
Applicable to Lift irrigation Schemes/ Lift irrigation societies,
RATE SCHEDULE
HT-3 (a)(i): Applicable to LI schemes under Govt. Departments/

Govt. owned Corporations.
Energy charges/ Minimum Charges 225 paiseper unit subject to an annual

minimum of Rs.1240 per HP/Annum.
HT-3(a)(ii): Applicable to Private LI schemes and Lift Irrigation societies fed

through express/ Urban feeders
Fixed Charges Rs.50 /HP/ per month of sanctioned

load
HT-3(a)(iii): Applicable to Private LI schemes and Lift Irrigation societies

other than those covered under HT-3 (a)(ii).
Fixed Charges Rs.30 /HP/ per month of sanctioned

load
TARIFF SCHEDULE HT-3 (b)
HT-3 (b): Applicable to Irrigation and Agricultural Farms, Government

Horticultural Farms, Private Horticulture nurseries, Coffee, Tea,
Rubber, Coconut & Arecanut Plantations.
RATE SCHEDULE
Energy charges / Minimum Charges 425 paise Per unit subject to an

annual minimum of Rs.1240/- per HP
of sanctioned load.
Note: These installations are to be billed on quarter yearly basis.
ccxcvii
Applicable to Residential apartments and colonies (whether situated outside

or inside the premises of the main HT Installation) availing power supply
independently or by tapping the main H.T. line. Power supply can be used for
residences, theatres, shopping facility, club, hospital, guest house, yard/street
lighting, canteen located within the colony.
RATE SCHEDULE
Applicable to all areas.
Demand charges Rs.120/- per kVA of billing demand/

month
NOTE: (1) In respect of residential colonies availing power supply by tapping

the main H.T. supply, the energy consumed by such colony loads
metered at a single point, is to be billed at the above energy
rate. No reduction in the recorded demand of the main H.T.
supply is allowed.
(2) Energy under this tariff may be used for commercial and other
purposes inside the colonies, for installations such as, Canteens,
Clubs, Shops, Auditorium etc., provided, this commercial load is
less than 10% of the Contract demand.
(3) In respect of Residential Apartments, availing HT Power supply

under HT-4 tariff schedule, the supply availed for Commercial and
other purposes like Shops, Hotels, etc., will be billed under
appropriate tariff schedule (Only Energy charges), duly deducting
such consumption in the main HT supply bill. No reduction in the
recorded demand of the main HT meter is allowed. Common
areas shall be billed at Tariff applicable to the predominant
Consumer category.
ccxcviii
Tariff applicable to sanctioned load of 67 HP and above for hoardings
and advertisement boards and construction power for industries
excluding those category of consumers covered under HT2(b) Tariff
schedule availing power supply for construction power for irrigation
and power projects and also applicable to power supply availed on
temporary basis with the contract demand of 67 HP and above of all
categories.
HT – 5 – Temporary supply
RATE SCHEDULE
67 HP and above:
Fixed charges / Rs.240/HP/month for the entire sanction load /
Demand Charges contract demand
Energy Charge 1000 paise / unit
HT-5 (a)- Temporary Supply
Applicable to power supply availed on temporary basis with the

contract demand of 67 HP and above by Bangalore International
Exhibition Centre.
RATE SCHEDULE
Fixed Charges / Not Applicable
Demand Charges
Note:
1. Temporary power supply with or without extension of distribution main
shall be arranged through a pre–paid energy meter duly observing the
provisions of Clause 12 of the Conditions of Supply of Electricity of the
Distribution Licensees in the State of Karnataka.
2. This Tariff is also applicable to touring cinemas having licence for a

duration of less than one year.
ccxcix
3. All the conditions regarding temporary power supply as stipulated in
Clause 12 of the Conditions of Supply of Electricity of the Distribution
Licensees in the State of Karnataka shall be complied with before
service.
---0---
PART-II
LOW TENSION SUPPLY
(400 Volts Three Phase and
230Volts Single Phase Supply)
ccc
PART-II
LOW TENSION SUPPLY
(400 Volts Three Phase and
230Volts Single Phase Supply)
ccci
CONDITIONS APPLICABLE TO BILLING OF LT INSTALLATIONS:
1. In the case of LT Industrial / Commercial Consumers, Demand based

Tariff at the option of the Consumer, can be adopted. The Consumer
is permitted to have more connected load than the sanctioned load.
The billing demand will be the sanctioned load, or Maximum Demand
recorded in the Tri-Vector Meter during the month, whichever is higher.
If the Maximum Demand recorded is more than the sanctioned load,
penal charges at two times the normal rate shall apply.
2. Use of power within the Consumer premises for bonafide temporary

purpose is permitted, subject to the conditions that, total load of the
installation on the system does not exceed the sanctioned load.
3. Where it is intended to use power supply temporarily, for floor polishing

and such other portable equipment’s, in a premises having permanent
power supply, such equipment’s shall be provided with earth leakage
circuit breakers of adequate capacity.
4. The laboratory installations in educational institutions are allowed to

install connected machineries up to 4 times the sanctioned load. The
fixed charges shall however be on the basis of sanctioned load.
5. Besides combined lighting and heating, electricity supply under tariff

schedules LT2 (a) & LT2 (b), can be used for Fans, Televisions, Radios,
Refrigerators and other household appliances, including domestic
water pumps and air conditioners, provided, they are under single
meter connection. If a separate meter is provided for Air-conditioner
load, the Consumer shall be served with a notice to merge this load,
and to have a single meter for the entire load. Till such time, the air
conditioner load will be billed under Commercial Tariff.
6. Bulk LT supply:
If power supply for lighting / combined lighting & heating {LT 2(a)}, is
availed through a bulk Meter for group of houses belonging to one
Consumer, (ie, Where bulk LT supply is availed), the billing for energy
cccii
shall be done at the slab rate for energy charges matching the
consumption obtained, by dividing the bulk consumption by number
of houses. In addition, fixed charges for the entire sanctioned load shall
be charged as per Tariff schedule.
7. A rebate of 25 Paise per unit will be given for the House/ School/Hostels
meant for Handicapped, Aged, Destitute and Orphans, Rehabilitation
Centres under Tariff schedule LT 2(a).
8. SOLAR REBATE: A rebate of 50 Paise per unit of electricity consumed

subject to a maximum of Rs. 50/- per installation per month will be
allowed to Tariff schedule LT 2(a), if solar water heaters are installed
and used. Where Bulk Solar Water Heater System is installed, Solar
Water Heater rebate shall be allowed to each of the individual
installations, provided that, the capacity of Solar Water Heater in such
apartment / group housing shall be a minimum capacity of 100 Ltr. per
household.
9. A rebate of 20% on fixed charges and energy charges will be allowed

in the monthly bill in respect of public Telephone booths having
STD/ISD/ FAX facility run by handicapped people, under Tariff schedule
LT 3.
10. A rebate of 2 paise per unit will be allowed if capacitors are installed
as per Clause 23 of Conditions of Supply of Electricity of the Distribution
Licensees in the State of Karnataka in respect of all metered IP Set
Installations.
11. Power Factor (PF):
Capacitors of appropriate capacity shall be installed in accordance

with Clause 23 of Conditions of Supply of Electricity of the Distribution
Licensees in the State of Karnataka, in the case of installations covered
under Tariff category LT 3, LT4, LT 5, & LT 6, where motive power is
involved.
ccciii
(i) The specified P.F. is 0.85. If the PF is found to be less than 0.85 Lag, a
surcharge of 2 Paise per unit consumed will be levied for every
reduction of P.F. by 0.01 below 0.85 Lag. In respect of LT installations,
however, this is subject to a maximum surcharge of 30 Paise per unit.
(ii) The power factor when computed as the ratio of KWh/KVA will be
determined up to 3 decimals (ignoring figures in the other decimal
places) and then rounded off to the nearest second decimal as
illustrated below:
(a) 0.8449 to be rounded off to 0.84
(b) 0.8451 to be rounded off to 0.85
(iii) In respect of Electronic Tri-Vector meters, the recorded average PF

over the billing period shall be considered for billing purposes.
(iv) During inspection, if the capacity of capacitors provided is found to be

less than what is stipulated in Conditions of Supply of Electricity of the
Distribution Licensees in the State of Karnataka, a surcharge of 30
Paise/unit will be levied in the case of installations covered under Tariff
categories LT 3, LT 5, & LT 6 where motive power is involved.
(v) In the case of installations without electronic Tri-vector meters even

after providing capacitors as recommended in Clause 23.01 and 23.03
of Conditions of Supply of Electricity of the Distribution Licensees in the
State of Karnataka, if during any periodical or other testing / rating of
the installation by the Licensee, the PF of the installation is found to be
lesser than 0.85, a surcharge determined as above shall be levied from
the billing month following the expiry of Three months’ notice given by
the Licensee, till such time, the additional capacitors are installed and
informed to the Licensee in writing by the Consumer. This is also
applicable for LT installations provided with electronic Tri-vector meters.
12. All new IP set applicants shall fix capacitors of adequate capacity in
accordance with Clause 23 of Conditions of Supply of Electricity of the
Distribution Licensees in the State of Karnataka before taking service.
ccciv
13. All the existing IP set Consumers shall also fix capacitors of adequate
capacity in accordance with Clause 23 of Conditions of Supply of
Electricity of the Distribution Licensees in the State of Karnataka, failing
which, PF surcharge at the rate of Rs.60/-per HP/ year shall be levied. If
the capacitors are found to be removed / not installed, a penalty at
the same rate as above (Rs. 60/-per HP / Year) shall be levied.
14. The Semi-permanent cinemas having Semi-permanent structure, with

permanent wiring and licence of not less than one year, will be billed
under commercial tariff schedule i.e., LT 3.
15. Touring cinemas having an outfit comprising cinema apparatus and

accessories, taken from place to place for exhibition of
cinematography films and also outdoor shooting units, will be billed
under Temporary Tariff schedule i.e., LT 7.
16. The Consumers under IP set tariff schedule, shall use the energy only for
pumping water to irrigate their own land as stated in the IP set
application / water right certificate and for bonafide agriculture use.
Otherwise, such installations shall be billed under appropriate Industrial
/ Commercial tariff, based on the recorded consumption if available,
or on the consumption computed as per the Table given under Clause
42.06 of the Conditions of Supply of Electricity of the Distribution
Licensees in the State of Karnataka.
17. The water pumped for agricultural purposes may also be used by the
Consumer for his bonafide drinking purposes and for supplying water to
animals, birds, Poultry farms, Dairy farms and fish farms maintained by
the Consumer in addition to agriculture.
18. The motor of IP set installations can be used with an alternative drive
for other agricultural operations like sugar cane crusher, coffee
pulping, arecanut cutting etc., with the approval of the Licensee. The
energy used for such operation shall be metered separately by
providing alternate switch and charged at LT Industrial Tariff (Only
Energy charges) during the period of alternative use. However, if the
cccv
energy used both for IP Set and alternative operation, is measured
together by one energy meter, the energy used for alternate drive
shall be estimated by deducting the average IP Set consumption for
that month, as per the IP sample meter readings for the sub division, as
certified by the sub-divisional Officer.
19. The IP Consumer is permitted to use energy for lighting the pump house
and well limited to two lighting points of 40 Watts each.
20. Billing shall be made at least once in a quarter year for all IP sets.
21. In the case of welding transformers, the connected load shall be

taken as:
a) Half the maximum capacity in KVA as per the nameplate specified
under IS: 1851
OR
b) Half the maximum capacity in KVA as recorded during the rating by

the Licensee, whichever is higher.
22. Electricity under Tariff LT 3 / LT 5 can also be used for Lighting, Heating
and Air-conditioning, Yard-Lighting, water supply in the respective of
premises of Commercial / Industrial Units.
23. Fluorescent fittings shall be provided by the Licensee for the Streetlights
in the case of villages covered under the Licensee’s electrification
programme for initial installation.
In all other cases, the entire cost of fittings including Brackets, Clamps,
etc., and labour for replacement, additions and modifications shall be met
by the organizations making such a request. Labour charges shall be paid
at the standard rates fixed by the Licensee for each type of fitting.
24. Lamps, fittings and replacements for defective components of fittings

shall be supplied by the concerned Village Panchayaths, Town
Panchayaths or Municipalities for replacement.
25. Fraction of KW / HP shall be rounded off to the nearest quarter KW / HP

for purpose of billing and the minimum billing being for 1 KW / 1HP in
respect of all categories of LT installations including I.P. sets. In the case
cccvi
of street lighting installations, fraction of KW shall be rounded off to
nearest quarter KW for the purpose of billing and the minimum billing
shall be quarter KW.
26. Seasonal Industries.
a) The industries which intend to utilize seasonal industry benefit, shall

comply with the conditionalities specified under Para no. 24 of the
General terms and conditions of tariff (applicable to both HT & LT).
b) The industries that intend to avail this benefit shall have Electronic
Tri-Vector Meter fitted to their installation.
c) Monthly charges during the seasonal months shall be fixed charges

and energy charges. The monthly charges during the off seasonal
months shall be the energy charges plus 50% of the fixed charges.
TARIFF SCHEDULE LT-1
LT-1: Applicable to installations serviced under Bhagya jyothi and Kutira jyothi
(BJ/KJ) schemes.
RATE SCHEDULE
Energy charges Nil*

(including recovery towards Fully subsidized by the GOK
service main charges)
Commission Determined Tariff (CDT) for the above category i.e., LT-1 is Rs.6.48
per unit.
*Since GOK is meeting the full cost of supply to BJ / KJ, the Tariff payable by
these Consumers is shown as Nil. However, if the GOK does not release the
subsidy in advance, CDT of Rs.6.48 per unit subject to monthly minimum of Rs.30/-
per installation per month shall be demanded and collected from these
consumers.
cccvii
Note: If the consumption exceeds 40 units per month or any BJ/KJ installation
is found to have more than one out let, it shall be billed as per Tariff
Schedule LT 2(a).
cccviii
Applicable to lighting/combined lighting, heating and motive Power

installations of residential houses and also to such houses where a
portion is used by the occupant for (a) Handloom weaving (b) Silk
rearing and reeling and artisans using motors up to 200 watts (c)
Consultancy in, (i) Engineering (ii) Architecture (iii) Medicine (iv)
Astrology (v) Legal matters (vi) Income Tax (vii) Chartered Accountants
(d) Job typing (e) Tailoring (f) Post Office (g) Gold smithy (h)
Chawki rearing (i) Paying guests/Home stay guests (j) personal
Computers (k) Dhobis (l) Hand operated printing press (m) Beauty
Parlours (n) Water Supply installations, Lift which is independently
serviced for bonafide use of residential complexes/residence, (o) Farm
Houses and yard lighting limiting to 120 Watts, (p) Fodder Choppers &
Milking Machines with a connected load upto 1 HP.
Also applicable to the installations of (i) Hospitals, Dispensaries, Health

Centres run by State/Central Govt. and local bodies; (ii) Houses,
schools and Hostels meant for handicapped, aged, destitute and
orphans; (iii) Rehabilitation Centres run by charitable institutions, AIDS
and drug addicts Rehabilitation Centres; (iv) Railway staff Quarters with
single meter (v) fire service stations.
It is also applicable to the installations of (a) Temples, Mosques,

Churches, Gurudwaras, Ashrams, Mutts and religious/Charitable
institutions; (b) Hospitals, Dispensaries and Health Centres run by
Charitable institutions including X-ray units; (c) Jails and Prisons (d)
Schools, Colleges, Educational institutions run by State/Central
Govt.,/Local Bodies; (e) Seminaries; (f) Hostels run by the Government,
Educational Institutions, Cultural, Scientific and Charitable Institutions(g)
Guest Houses/Travellers Bungalows run in Government buildings or by
State/Central Govt./Religious/Charitable institutions; (h) Public libraries;
(i) Silk rearing; (j) Museums; (k) Installations of Historical Monuments of
cccix
Archaeology Departments;(l) Public Telephone Booths without
STD/ISD/FAX facility run by handicapped people; (m) Sulabh / Nirmal
Souchalayas; (n) Viswa Sheds having Lighting Loads only.
RATE SCHEDULE
LT-2(a)(i) : Applicable to areas coming under Bruhat Bangalore
Mahanagara Palike (BBMP), Municipal Corporations and
all other Urban Local Bodies.
Fixed charges per For the first KW Rs.40/- per KW

month For every additional KW Rs.50/- per KW
For 0 - 30 units (Lifeline 325 paise/unit
consumption)
Energy charges
31 to 100 units 470paise/unit
101 to 200 units 625 paise /unit
Above 400 units 740 paise /unit
LT-2(a)(ii): Applicable to Areas under Village Panchayats
Fixed charges per For the first KW Rs.25/- per KW

month For every additional KW Rs.40/- per KW
Energy charges For 0 - 30 units (Lifeline 315 paise/unit
consumption)
31 to 100 units 440 paise/unit
Above 300 units 685 paise /unit
Applicable to the installations of Private Professional and other Private

Educational Institutions including aided, unaided institutions, Nursing
Homes and Private Hospitals having only lighting or combined lighting
& heating, and motive power.
cccx
RATE SCHEDULE
LT-2(b)(i): Applicable to Areas under Bruhat Bangalore Mahangara Palike

(BBMP) and Municipal Corporations and all other urban Local
Bodies.
Fixed charges Rs.55 per KW subject to a minimum of Rs.85 per

month
Energy charges 0 to 200 units 650 paise/unit
Above 200 units 775paise/unit
LT-2(b)(ii): Applicable in Areas under Village Panchayats
Fixed charges Rs.45 per KW subject to a minimum of Rs.70per

month
Energy charges
Above 200 units 720 paise/unit
Note: Applicable to LT-2 (a), LT-2 (b) Tariff Schedules.
1 A rebate of 25 paise per unit shall be given for installation of a house/

School/ Hostels meant for Handicapped, Aged, Destitute and Orphans,
Rehabilitation Centres run by Charitable Institutions.
2 (a) Use of power within the consumer’s premises for temporary purposes
for bonafide use is permitted subject to the condition that, the total
load of the installation on the system does not exceed the
sanctioned load.
(b) Where it is intended to use floor polishing and such other portable
equipment temporarily, in the premises having permanent supply,
such equipment shall be provided with an earth leakage circuit
breaker of adequate capacity.
3 The laboratory installations in educational institutions are allowed to

install connected machinery up to 4 times the sanctioned load. The fixed
charges shall however be on the basis of sanctioned load.
cccxi
4. Besides lighting and heating, electricity supply under this schedule can be
used for fans, Televisions, Radios, Refrigerators and other house-hold
appliances including domestic water pump and air conditioners,
provided, they are under single meter connection. If a separate meter is
provided for Air conditioner Load, the consumption shall be under
commercial tariff till it is merged with the main meter.
5. SOLAR REBATE: A rebate of 50 paise per unit of electricity consumed to a

maximum of Rs.50/- per installation per month will be allowed to Tariff
schedule LT 2(a), if solar water heaters are installed and used. Where Bulk
Solar Water Heater System is installed, Solar Water Heater rebate shall be
allowed to each of the individual installations, provided that, the
capacity of Solar Water Heater in such apartment / group housing shall
be a minimum capacity of 100 Ltr, per household.
Applicable to Commercial Lighting, Heating and Motive Power

installations of Clinics, Diagnostic Centres, X-Ray units, Shops, Stores,
Hotels / Restaurants / Boarding and Lodging Homes, Bars, Private guest
Houses, Mess, Clubs, Kalyan Mantaps / Choultry, permanent Cinemas/
Semi Permanent Cinemas, Theatres, Petrol Bunks, Petrol, Diesel and oil
Storage Plants, Service Stations/ Garages, Banks, Telephone
Exchanges. T.V. Stations, Microwave Stations, All India Radio, Dish
Antenna, Public Telephone Booths/ STD, ISD, FAX Communication
Centers, Stud Farms, Race Course, Ice Cream Parlours, Computer
Centres, Photo Studio / colour Laboratory, Photo Copiers, Railway
Installation excepting Railway workshop, BMTC / KSRTC Bus Stations
excepting Workshop, All offices, Police Stations, Commercial
Complexes, Lifts of Commercial Complexes, Battery Charging units,
Tyre Vulcanizing Centres, Post Offices, Bakery shops, Beauty Parlours,
Stadiums other than those maintained by Govt. and Local Bodies. It is
also applicable to water supply pumps and street lights not covered
under LT 6, Cyber cafés, Internet surfing cafés, Call centres, BPO / KPO,
Telecom, I.T. based medical transcription centres, Private Hostels not
cccxii
covered under LT -2 (a), Paying guests accommodation provided in an
independent / exclusive premises, concrete mixtures (Ready Mix
Concrete) units.
cccxiii
RATE SCHEDULE
LT-3 (i): Applicable in areas coming under Bruhat Bangalore Mahanagara
Palike(BBMP), Municipal Corporations and other urban local bodies
Fixed charges Rs.60 per KW

Energy charges For 0 - 50 units 750 paise/unit
Demand based tariff (optional) where sanctioned load

is above 5 KW but below 50 KW
Fixed charges Rs.75 per KW

Energy charges As above
RATE SCHEDULE
LT-3 (ii):Applicable in Areas under Village Panchayats
Fixed charges Rs.50 per KW per month
Energy charges For 0 - 50 units 700 paise/unit
Demand based tariff (optional) where sanctioned load

is above 5 KW but below 50 KW
Fixed charges Rs.65 per KW per month
Energy charges As above
Note: 1. Besides Lighting, Heating and Motive power, electricity supply under
this Tariff can also be used for Yard lighting/ air Conditioning/water
supply in the premises.
2. The semi-permanent Cinemas should have semi-Permanent

Structure with permanent wiring and licence for duration of not less
than one year.
3. Touring Cinemas having an outfit comprising Cinema apparatus

and accessories taken from place to place for exhibition of
cinematography film and also outdoor shooting units shall be billed
under LT- 7 Tariff.
4. A rebate of 20% on fixed charges and energy charges shall be

allowed in the monthly bill in respect of telephone Booths having
STD / ISD/FAX facility run by handicapped people.
5. Demand based Tariff at the option of the consumer can be adopted

as per Para 1 of the conditions applicable to LT installations.
cccxiv
TARIFF SCHEDULE LT-4 (a), LT-4 (b) & LT-4(c)
Applicable to (a) Agricultural Pump Sets including Sprinklers (b) Pump sets
used in; (i) Nurseries of forest and Horticultural Departments; (ii) Grass Farms
and Gardens; (iii) Plantations other than Coffee, Tea, Rubber and Private
Horticulture Nurseries.
TARIFF SCHEDULE LT-4 (a)

Applicable to I.P. Sets up to and inclusive of 10 HP
RATE SCHEDULE
Fixed charges Free

Energy charges
Commission Determined Tariff (CDT) for LT4 (a) category is 334 paise per unit
In case the GOK does not release the subsidy in advance in the manner
specified by the Commission in K.E.R.C. (Manner of Payment of subsidy)
Regulations, 2008, CDT of 334 paise per unit shall be demanded and collected
from these consumers.
Note: This Tariff is applicable for Coconut and Arecanut plantations also.
TARIFF SCHEDULE LT-4 (b):
Applicable to IP sets above 10 HP
RATE SCHEDULE
Fixed charges Rs.50 per HP per month.

Energy charges 300 paise per unit
TARIFF SCHEDULE LT-4 (c) (i):
Applicable to Private Horticultural Nurseries, Coffee, Tea and Rubber

plantations of sanctioned load upto and inclusive of 10 HP.
RATE SCHEDULE

cccxv
TARIFF SCHEDULE LT-4 (c) (ii):
Applicable to Private Horticultural Nurseries, Coffee, Tea and Rubber

plantations of sanctioned load above 10 HP.
RATE SCHEDULE

Note:
1) The energy supplied under this tariff shall be used by the consumers only for pumping water to irrigate their own
land as stated in the I.P. Set application / water right certificate and for bonafide agriculture use. Otherwise,
such installations shall be billed under the appropriate Tariff (LT-3/ LT-5) based on the recorded consumption if
available, or on the consumption computed as per the Table given under Clause 42.06 of the Conditions of
Supply of Electricity of the Distribution Licensees in the State of Karnataka.
2) The motor of IP set installations can be used with an alternative drive for other agricultural operations like
sugar cane crusher, coffee pulping, arecanut cutting etc., with the approval of the Licensee. The energy
used for such operation shall be metered separately by providing alternate switch and charged at LT Industrial
Tariff (Only Energy charges) during the period of alternative use. If the energy used both for IP Set and
alternative operation, is however measured together by one energy meter, the energy used for alternate drive
shall be estimated by deducting the average IP Set consumption for that month as per the IP sample meter
readings for the sub division as certified by the sub-divisional Officer.
3) The Consumer is permitted to use the energy for lighting the pump house and well limited to 2 lighting points of
40 W each.
4) The water pumped for agricultural purposes may also be used by the Consumer for his bonafide drinking purposes
and for supplying water to animals, birds, Poultry farms, Dairy farms and fish farms maintained by the Consumer
in addition to agriculture.
5) Billing shall be made at least once in a quarter year for all IP sets.
6) A rebate of 2 paise per unit will be allowed if capacitors are installed as per Clause 23 of Conditions of Supply of
Electricity of the Distribution Licensees in the State of Karnataka in respect of all metered IP Set Installations.
7) Only fixed charges as in Tariff Schedule for Metered IP Set Installations shall be collected during the disconnection
period of IP Sets under LT 4(a), LT 4(b) and LT 4(c) categories irrespective of whether the IP Sets are provided
with Meters or not.
Applicable to Heating & Motive power (including lighting) installations

of industrial Units, Workshops, Poultry Farms, Sugarcane Crushers,
Coffee Pulping, Cardamom drying, Mushroom raising installations,
Flour, Huller & Rice Mills, Wet Grinders, Milk dairies, Ironing, Dry Cleaners
and Laundries having washing, Drying, Ironing etc., Tailoring shop, Bulk
Ice Cream and Ice manufacturing Units, Coffee Roasting and Grinding
cccxvi
Works, Cold Storage Plants, Bakery Product Mfg. Units, BMTC/ KSRTC
workshops/Depots, Railway workshops, Drug manufacturing units and
Testing laboratories, Printing Presses, Garment manufacturing units, Bulk
Milk vending Booths, Swimming Pools of local Bodies, Tyre retreading
units, Stone crushers, Stone cutting, Chilly Grinders, Phova Mills,
pulverizing Mills, Decorticators, Iron & Red-Oxide crushing units,
crematoriums, hatcheries, Tissue culture, Saw Mills, Toy/wood industries,
Viswa Sheds with mixed load sanctioned under Viswa Scheme,
Cinematic activities such as Processing, Printing, Developing,
Recording theatres, Dubbing Theatres and film studios, Agarbathi
manufacturing unit., Water supply installations of KIADB & industrial
units, Gem & Diamond cutting Units, Floriculture, Green House, Biotech
Labs., Hybrid seed processing units. Information Technology industries
engaged in development of hardware & Software, Information
Technology (IT) enabled Services / Start-ups(As defined in GOI
notification dated 17.04.2015)/ Animation / Gaming / Computer
Graphics as certified by the IT & BT Department of GOK/GOI, Silk
filature units, Aqua Culture, Prawn Culture, Brick manufacturing units,
Silk / Cotton colour dying, Stadiums maintained by Govt. and local
bodies, Fire service stations, Gold / Silver ornament manufacturing
units, Effluent treatment plants, Drainage water treatment plants, LPG
bottling plants and petroleum pipeline projects, Piggery farms,
Analytical Lab. for analysis of ore metals, Satellite communication
centres, Mineral water processing plants / drinking water bottling plants
and soda fountain units.
cccxvii
RATE SCHEDULE
LT-5 (a): Applicable to Bruhat Bangalore MahanagaraPalikeand other

Municipal Corporation.
i.Fixed charges
Fixed charges per i) Rs.40 per HP for 5 HP & below

month ii) Rs.45 per HP for above 5 HP & below 40 HP
iii)Rs.60 per HP for 40 HP & above but below 67 HP
iv)Rs.120 per HP for 67 HP & above
ii. Demand based Tariff (optional)
Fixed Above 5 HP and less than 40 HP Rs.65 per KW of billing demand

charges 40 HP and above but less than Rs.90 per KW of billing demand
per month 67 HP
demand
iii. Energy Charges

RATE SCHEDULE
LT-5 (b): Applicable to all Areas other than those covered under LT-5(a).
i. Fixed charges
Fixed Charges i) Rs.35 per HP for 5 HP & below.

per Month ii) Rs.40 per HP for above 5 HP & below 40 HP.
iii) Rs.55 per HP for 40 HP & above but below 67 HP.
iv)Rs.110 per HP for 67 HP & above.
ii. Demand based Tariff (optional)
Fixed Above 5 HP and less than 40 HP Rs.55 per KW of billing demand

Charges 40 HP and above but less than 67 Rs.80 per KW of billing demand
per HP
Month 67 HP and above Rs.160 per KW of billing
demand
cccxviii
iii. Energy Charges

TOD Tariff applicable to LT5 (a) & (b):At the option of the Consumer

10.00 Hrs to 18.00 Hrs 0
next day
NOTE:
1. DEMAND BASED TARIFF
In the case of LT Industrial Consumers, Demand based Tariff at the option of

the Consumer can be adopted. The Consumer is permitted to have more
connected load than the sanctioned load. The billing demand will be the
sanctioned load or Maximum Demand recorded in the Tri-Vector Meter
during the month whichever is higher. If the Maximum Demand recorded is
more than the sanctioned load, penal charges at two times the normal rate
shall apply.
2. Seasonal Industries: The industries which intend to utilize seasonal industry

benefit shall comply with the conditionalities under para no. 24 of general
terms and conditions applicable to LT.
3. Electricity can also be used for lighting, heating, and air-conditioning in the
premises.
4. In the case of welding transformers, the connected load shall be taken as,
(a) Half the maximum capacity in KVA as per the name plate specified
under-IS1851, or (b) Half the maximum capacity in KVA as recorded
during rating by the Licensee, whichever is higher.
Applicable to water supply and sewerage pumping installations and

also applicable to water purifying plants maintained by Government
and Urban Local Bodies/ Grama Panchayats for supplying pure
drinking water to residential areas Public Street lights/Park lights of
village Panchayat, Town Panchayat, Town Municipalities, City
cccxix
Municipalities / Corporations / State and Central Govt. / APMC, Traffic
signals, Survelliance Cameras at traffic locations belonging to
Government Department, subways, water fountains of local bodies.
Also applicable to Streetlights of residential Campus of universities,
other educational institutions, housing colonies approved by local
bodies/development authority, religious institutions, organizations run
on charitable basis, industrial area / estate and notified areas, also
applicable to water supply installations in residential Layouts, Street
lights along with signal lights including the gateman’s shed with
associated equipment provided at the Railway level crossing, high
mast street lights, Lifts/ Escalators installed in pedestrian road crossing
maintained by Government and Urban local bodies/ Grama
Panchayats independently serviced .
RATE SCHEDULE
Water Supply- LT-6 (a)
Fixed charges Rs.55/HP/month
Energy charges 425 Paise/unit
Public lighting- LT-6 (b)
Fixed charges Rs.70/KW/month
Energy charges 585 Paise/unit
Energy Charges for LED/ Induction 485 paise/unit
Lighting

Temporary Supply and Permanent Supply to Advertising Hoardings
Applicable to Temporary Power Supply for all purposes.
LT 7(a) Details Approved Tariff

Temporary Power Less than 67 HP: Energy charge at 1000 paise / unit
Supply for all subject to a weekly minimum of Rs.190
purposes. per KW of the sanctioned load.

Applicable to Hoardings & Advertisement boards, Bus Shelters with
Advertising Boards, Private Advertising Posts / Sign boards in the
interest of public such as Police Canopy Direction boards, and other
cccxx
sign boards sponsored by Private Advertising Agencies / firms on
permanent connection basis.
LT 7(b) Details Approved Tariff

Power supply on Less than 67 HP: Fixed Charges at Rs.60 per KW / month
permanent Energy charges at 1000 paise / unit
connection basis
Note:
1. Temporary power supply with or without extension of distribution main shall
be arranged through a pre–paid energy meter duly observing the
provisions of Clause 12 of the Conditions of Supply of Electricity of the
Distribution Licensees in the State of Karnataka.
2. This Tariff is also applicable to touring cinemas having licence for duration
less than one year.
3. All the conditions regarding temporary power supply as stipulated in Clause
12 of the Conditions of Supply of Electricity of the Distribution Licensees in
the State of Karnataka shall be complied with before service.
-O-
cccxxi

BESCOM Order

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BESCOM Order

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KARNATAKA ELECTRICITY REGULATORY COMMISSION

TARIFF ORDER 2017

REVISION OF ANNUAL REVENUE REQUIREMENT

REVISION OF RETAIL SUPPLY

11th April 2017

6th and 7th Floor, Mahalaxmi Chambers

SL.NO. DETAILS OF ANNEXURES Page

Dated 11th April, 2017

In the matter of:

Application of BESCOM in respect of the Annual Performance Review for FY16,

Present: Shri M.K.Shankaralinge Gowda Chairman

The Bangalore Electricity Supply Company Ltd., (hereinafter referred to

a) Review of Annual Performance for the financial year 2015-16

b) Approval of Revised ARR for the financial year 2017-18 (FY18).

The BESCOM is a Distribution Licensee under Section 14 of the Electricity

The BESCOM is a company registered under the Companies Act, 1956,

At present BESCOM’s area of operation is structured as follows:

Bengaluru North Circle Peenya

Tumkur Circle Tiptur

1.1 BESCOM at a glance:

Number of Consumers, Sales in MU to various

BESCOM’s applications, the objections / views of stakeholders thereon and the

SUMMARY OF FILING & TARIFF DETERMINATION PROCESS

2.0 Background for Current Filing:

BESCOM, in its application, has made the following new proposals:

i) Increase in fixed charge for HT Consumers;

2.1 Preliminary Observations of the Commission:

After the scrutiny of applications, the Commission communicated its

 Financial implications on the new proposals.

2.2 Public Hearing Process:

Accordingly, BESCOM has published the Notices in the newspapers as

BESCOM has subsequently filed an amendment application to its tariff

Name of the News Paper Language Date of Publication

2.3 Consultation with the Advisory Committee of the Commission:

 Performance of KPTCL / ESCOMs during FY16

Members of the Committee have offered valuable suggestions on the

List of persons who have filed written objections

The objections/ suggestions mainly pertain to:

The summary of the objections, the BESCOM’s reply and the

SL. Names & Addresses of Objectors

2) Quality of power supply should be improved.

3) Tariff applicable to HT category should be reduced.

4) Due to underperformance of KPCL’s thermal plants, reduced

5) Open access should be encouraged by reducing open access

6) IP set consumption is more than the approved level and the

7) Inter-ESCOM energy balancing should be for a short period and

8) Un-metered power supply and theft of energy is high in

9) Amended petition filed on 16.02.2017 should not be considered,

10) Incentives sought by BESCOM for reducing the distribution losses

12) Prudence check on CAPEX should be done by involving the

13) O&M cost is very high and excess controllable expenditure

15) The proposed restriction of 3 months’ period in respect of

16) Separate tariff category should be introduced for Micro, Small

17) Proposal of modified time of the day(TOD) tariff should not be

18) Prepaid meters should be introduced for all the industries.

19) Diagnostic centres should be categorized under tariff schedule

20) Financial losses of BESCOM should not be passed on to the end

21) Since there is no buffer stock of Transformers in O & M

22) There is no representation of farmers in CGRF

25) Excess amount of Rs.175 Crores spent by BESCOM over and

26) There is inordinate delay in implementation of Distribution

28) Cross subsidy should be reduced to 20% of the energy charges.

29) Fixed charges should not be increased and also there is no