TAMIL NADU ELECTRICITY REGULATORY COMMISSION

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Determination of tariff for generation, intra-state transmission and distribution --------------------------------------------Order No. 3 of 2010 dated 31-07-2010 (effective from 01-08-2010)

TAMIL NADU ELECTRICITY REGULATORY COMMISSION (Constituted under section 82 (1) of Electricity Act 2003) (Central Act 36 of 2003)

PRESENT:

Thiru. S. Kabilan Thiru. K.Venugopal

Chairman Member

Order No. 3 of 2010, dated 31-07-2010 In the matter of: Determination of tariff for generation, intra-State transmission and distribution.

In exercise of power conferred by Section 62 and Section 86 (1) (a) of the Electricity Act 2003, (Central Act 36 of 2003), and after taking into account the stipulations in the National Electricity Policy and the Tariff Policy, TNERC (Terms and conditions for determination of tariff) Regulations 2005, TNERC (Terms and Conditions for Determination of Tariff for Intra state Transmission / Distribution of Electricity under MYT Framework ) Regulations, 2009, and after considering the views of the State Advisory Committee meeting held on 11-03-2010 (Annexure I) in accordance with section 88, after examining the comments received from the stakeholders (Annexure II) and after considering suggestions and objections received from the public during the public hearings held on 30-03-2010, 08-04-2010,13-04-2010 and 15-04-2010 (Annexure III) as per Section 64, the Commission passes this order for determination of generation tariff, intra-State transmission tariff and Retail tariff. Sd/(K.Venugopal) Member Sd/(S. Kabilan) Chairman

CONTENTS

Para 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 2

Description Introduction Preamble Applicability of Order Tariff Filing Procedure Adopted An Overview of TNEB Operational Performance Commercial and Financial Performance Compliance of provisions under Section 131 of Electricity Act 2003 Issue-wise Summary of Views, Comments and Suggestions, TNEB response and Commissions rulings General Quality of supply AT & C Loss Metering Cost of Supply Subsidy and Cross Subsidy Generation Power Purchase Regulatory Asset Tariff for HT Industries Tariff for HT II A Educational Institutions and Recognized Hospitals Tariff for HT II B Places of Public Worship Tariff for Domestic Tariff for Hut Tariff for LT Bulk Supply Tariff for Street Light and Water Supply Tariff for LT Educational Institutions, Recognized Hospitals etc Tariff for Places of public worship Tariff for Cottage Industries Tariff for Power Loom Tariff for LT Industries Tariff for LT Agriculture Tariff for LT Commercial Tariff for LT Temporary Supply Free / Concessional Tariff Request for separate category TNEBs Response

Page No. 1 1 2 2 3 5 6 7 7 8

2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27

8 11 11 12 13 14 15 16 17 17 19 19 19 21 21 22 22 23 23 24 24 26 27 29 29 30 30

Para 2.28 2.29 2.30 3 3.1 3.2 3.3 3.4

Description TNEBs response on the petition for Southern Railway Commissions Views on the objections/comments / suggestions Commissions Suggestions Energy Requirement Sales Forecast Commissions Sales Projections Transmission and Distribution Loss Commissions Rulings and Directives on T & D Loss/ Energy Audit in earlier Tariff Order and TNEBs response Assessment of Unmetered consumption Commissions Rulings on T & D Loss Net Energy Requirement Energy Availability Own Generating Station Auxiliary Consumption Capacity addition in Thermal Generation Hydel Generating Stations Wind Based Generation Determination of quantum of energy to be purchased Power Purchase Central Generating Station Independent Power Producers NCES and Infirm Sources Private Wind Mills Determination of quantum of power purchase Merit Order Ranking Power Purchase Cost

Page No. 36 41 50 58 58 64 85 87

3.5 3.6 3.7 4 4.1 4.2 4.3 4.4 4.5 4.6 5 5.3 5.4 5.5 5.6 5.7 5.8 5.9

89 90 92 94 94 98 101 103 106 107 108 108 110 111 113 115 116 119

Para 6 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13 6.14 6.15 6.16 7 7.1 to 7.8 7.9 7.10 7.11 7.12 7.13 7.14 8 9 9.5 9.6 9.7 9.8 9.9 9.10 9.11 I II III IV V

Description Expenditure Segregation of Accounts Commissions Analysis and decision on allocation Of expenditure to various functions Interest on Loan Capital Return on Equity Depreciation Operation and Maintenance Expenses Repair & Maintenance Employee Cost Administrative and General Expenses Allocation of O & M Expenses Operating Expenses O & M Expenses for new generating stations Controllable and uncontrollable parameters Interest on Borrowing for working capital Other Debits Comparison of expenses Generation Tariff General Thermal Generating stations Price of Primary Fuel Quantity of Primary Fuel/Coal Gross Station Heat Rate Gross Calorific Value of coal Secondary Fuel Oil consumption Determination of Annual Transmission charges Determination of Distribution Tariff Other Income Non tariff income Net ARR Revenue receipts Revenue gap Approach to tariff rates Tariff schedules Annexure Members of 19th State Advisory Committee Meeting held on 11-03-2010 List of Stakeholders who have submitted written Suggestions and objections Details of persons who deposed before the Commission List of Letters received from TNEB Corrigendum

Page No. 126 126 127 134 140 142 145 146 147 149 150 151 152 154 155 155 157 159 159 160 164 165 166 168 170 191 197 202 203 204 204 206 206 213 237 238 251 263 264

CHAPTER 1 INTRODUCTION 1.1 Preamble

1.1.1 Consequent to the enactment of the Electricity Regulatory Commission Act 1998 (Central Act 14 of 1998), the Government of Tamil Nadu constituted the Tamil Nadu Electricity Regulatory Commission (TNERC) vide G.O.Ms.No.58, Energy (A1) Department, dated 17-03-1999. 1.1.2 The Commission issued its maiden tariff order under section 29 of the Electricity Regulatory Commission Act, 1998, on 15-03-2003 based on the petition filed by the Tamil Nadu Electricity Board (TNEB) on 25-09-2002. 1.1.3 In Para 7.2 of the order dated 15-03-2003, the Commission issued the following rulings:
th

The Commission thus rules that the revised tariffs would be applicable from 16 March
st

2003 to 31 March 2004, and till such further time as the TNEB does not approach the Commission for tariff revision. The Commission also directs that, henceforth, the TNEB should submit a Tariff Proposal for any financial year by the end of December of the previous financial year. In other words, the Commission expects the TNEB to submit a tariff revision proposal for FY 2004-05 before the end of December 2003, in case the TNEB desires to revise the tariffs for FY 2004-05.

1.1.4 The TNEB did not come before the Commission for revision of retail tariff till January 2010. In the meantime, Electricity Regulatory Commission Act, 1998 was repealed and the Electricity Act 2003 (Central Act 36 of 2003) (hereinafter called Act) was enacted with effect from 10-06-2003. 1.1.5 The Commission notified and the Tamil Nadu for Electricity Regulatory of Tariff)

Commission

(Terms

Conditions

Determination

Regulations 2005 (herein after called Tariff Regulations) on 03-08-2005 under section 61 read with section 181 of the Act. 1.1.6 The Commission issued separate order on Transmission charges, Wheeling Charges, Cross Subsidy surcharge and Additional Surcharge on

15-05-2006, based on the petition filed by TNEB on 26-09-2005 under section 42 of the Act. 1.1.7 Since the issue of tariff order dated 15-03-2003, the Commission has issued two tariff orders between 2003 and 2010 for wind, biomass based power plants and other captive and co-generation plants. 1.1.8 The Commission also notified the TNERC (Terms and Conditions for Determination of Tariff for Intra state Transmission / Distribution of Electricity under MYT Framework) Regulations, 2009 (herein after called MYT Regulations). 1.1.9 This is the second order of the Commission on determination of tariff.

1.2

Applicability of Order:

1.2.1 This order will come into effect from 01-08-2010. The distribution tariff contained in this order will be valid till 31-03-2011. TNEB shall file necessary true up petition in accordance with the Regulation and till such time the Commission passes the tariff order amending this tariff order, this tariff would continue to be in force.

1.3

Tariff Filing

1.3.1 Sub-Regulation (3) of Regulation 6 of the TNERC (Terms and conditions for determination of Tariff) Regulations 2005 specifies the following: (3) The application for determination of tariff for the existing Generating Stations and Transmission System shall be accompanied by information in the respective formats appended to these Regulations duly furnishing the figures for the previous year, current year and ensuing year. The application for determination of tariff by Distribution licensees shall be accompanied by the information in the ARR formats appended to these Regulations. The information for the previous year should be based on the Audited Accounts and in case audited accounts of previous year are not available, the audited accounts for the immediately preceding year should be filed along with the unaudited accounts of the previous year.

1.3.2 Regulation 43 (vi) of the Tariff Regulation 2005 specifies the following: (vi) In respect of power generated in the stations owned by the distribution licensee and distributed by the licensee himself in his area of supply, the generation tariff of the station shall be considered as the transfer price to the distribution licensee which will be determined in the licensees tariff petition itself. 1.3.3 Thus the Regulations warrant TNEB to submit applications for determination of generation tariff, Intra-State transmission tariff and retail tariff with the informations in distinct formats specified in the Tariff Regulations. 1.3.4 The TNEB submitted a single application for determination of tariff with Aggregate Revenue Requirement (ARR) for all the functions with bundled informations on 18-01-2010 along with the fee of Rs.10.00 lakhs. 1.3.5 The Commission in letter dated 22-01-2010 communicated certain preliminary comments on the petition and directed the TNEB to rectify the deficiencies before admission of the petition. The Commission also directed the TNEB to remit the balance fee of Rs.4.64 Crores as per the provisions in the TNERC Fees and Fines Regulations. 1.3.6 The TNEB in letter dated 08-02-2010 replied to some of the points raised in Commissions letter dated 22-01-2010. The TNEB also remitted the balance fee of Rs.4.64 Crores. 1.3.7 The Commission admitted the petition filed by TNEB on 09-02-2010 and registered as TP 1 of 2010. 1.3.8 The TNEB has filed a petition on 30-07-2010 praying for withdrawing the revision of tariff for domestic consumers consuming 201 to 400 units bimonthly and 401 to 600 units bi-monthly proposed in the tariff petition filed on 18-01-2010. This petition has been hosted in the website of the TNEB and the Commission. This petition has been taken on records on the Commission. The Commission heard the Chairman, TNEB on this petition. As the prayer does not cause any injury to any other category of consumers, the Commission allows the prayer of the TNEB.

1.4

Procedure Adopted

1.4.1 Regulation 7 (2) of Tariff Regulation specifies the following: The applicant shall publish, for the information of public, the contents of the application in an abridged form in English and Tamil newspapers having wide circulation and as per the direction of the Commission in this regard. The copies of Petition and documents filed with the Commission shall also be made available at a nominal price, besides hosting them in the website. 1.4.2 The public notice received from the TNEB was approved and communicated to TNEB on 23-02-2010, with a direction to arrange publication of the notice in news papers and upload the same in the website on 26-02-2010. 1.4.3 The TNEB published the public notice in the following newspapers on 2602-2010 (1) (2) (3) (4) The New Indian Express (English Daily); The Deccan Chronicle (English Daily); Dinamalar (Tamil Daily) and Daily Thanthi (Tamil Daily)

1.4.4 The Petition was placed before the State Advisory Committee on 11-032010. The list of Members participated in the meeting are in Annexure I. The views / comments expressed by the members are included Chapter 2. 1.4.5 The Commission conducted public hearing at the following places on the dates noted against each: Sl.No 1 2 Place Rani Seethai Hall, Chennai Tamil Nadu Chamber of Commerce, Platinum Jubilee Hatsun Auditorium, Madurai Nani Kalai Arangam, Mani Higher Secondary School, Coimbatore, Taj Kalyanamandapam, Karur Bye Pass Road, Trichy Date 30-03-2010 08-04-2010 in

3 4

13-04-2010 15-04-2010

1.4.6 The lists of participants in each public hearing are in Annexure III. The views / comments / objections raised by the participants are discussed in Chapter 2. 1.4.7 Based on the petition from Chief Electrical Engineer / Southern Railway an exclusive meeting was convened on 23-06-2010. 1.4.8 As directed by the Commission on 23-06-2010 during the meeting, the Southern Railway submitted the details in letter dated 02-07-2010. The decision of the Commission on the prayer of Southern Railway is in Chapter 8. 1.4.9 A meeting was convened on 29-06-2010 with the Secretaries to the following Departments of Government of Tamil Nadu alongwith Chairman, TNEB to obtain the views of the Government. (1) Secretary to Government, Energy Department (2) Secretary to Government, Finance Department and (3) Secretary to Government, Information Technology Department 1.5 1.5.1 An Overview of TNEB TNEB was formed as a statutory body by the Government of Tamil Nadu (GOTN) on 01-07-1957 under the Electricity (Supply) Act 1948. The

Board is primarily responsible for generation, transmission, distribution and supply of electricity in the State of Tamil Nadu. 1.5.2 The TNEB has the following generation capacity at its command as on 3103-2010. Table 1: TNEBs Generation capacity
Sl. No 1 2 3 4 I 5 6 7 II III Generating Stations Capacity (in MW) Coal based station 2970.00 Gas based station 515.88 Hydro Stations (36 stations) 2186.65 Wind Mills 17.55 Total Own generation 5690.08 Share from Central Generating Stations 3130.00 (including share from un allocated share) IPPs 1154.16 Captive 214.00 Total External source 4498.16 Total capacity at command 10188.24

1.5.3 In addition to the above, there are 4872.22 MW of private wind mills operating at weighted average Capacity Utilization Factor (CUF) of 19.57%. Around 65% of power generated is wheeled for captive use and the balance is being purchased by TNEB. The TNEB is also purchasing the surplus power from Co-generation (559.90 MW) and biomass (137.05 MW) power plants. 1.5.4 The TNEB has 1294 sub-stations, 5.37 lakh ckt kms of LT lines and 1.69 lakh ckt kms of HT lines. The TNEB is maintaining the T & D loss level at 18% since 2003-04. 1.5.5 The peak demand reached was 10180 MW on 19-03-2010. The maximum daily consumption was 226.194 MUs on 14-05-2010.

1.6

Operational Performance

1.6.1 The TNEB has achieved the following capacity addition since last tariff revision ordered in 2003. (a) Gas (b) Hydro - 288.88 MW -190.65 MW

The addition to capacity was not commensurate with the growth in demand resulting in wide demand-supply gap and consequent

implementation of Restriction & Control measures. 1.6.2 The TNEB has generated 26856 MUs and 26731 MUs respectively during 2007-08 and 2008-09. They have purchas ed 37572 MUs and 37982 MUs respectively during 2007-08 and 2008-09 from central generating stations, IPPs, private windmills, CPP, Co-gen and from traders. They have distributed 52831 MUs and 53065 MUs respectively during 2007-08 and 2008-09. 1.6.3 The TNEBs coal based generating stations (except ETPS) were performing well with more than the normative PLF of 80% and the PLF of ETPS was 52% and 49% respectively during 2007-08 and 2008-09. The gas based stations (except Basin Bridge) were performing at a of PLF more than 70% during 2007-08 and 2008-09. During 2009-10

Kovilkalappal GTPS has achieved only 57% PLF for want of adequate quantity of gas. Valuthur GTPS achieved only 46.62% as the station was under major shut down from 09-01-2010. The Basin Bridge station being operated as a peaking station using naphtha as a fuel was operated at a PLF of 6% and 17% respectively during 2007-08 and 2008-09.

1.7

Commercial and Financial Performance

1.7.1 The Boards collection efficiency is reported to be 99.81%. 1.7.2 Inspite of manifold increase in input cost there was no tariff revision for the past seven years and there has been revenue deficit since 2003-04. The accumulated deficit upto 2008-09 was Rs.16774.47 Crores (as per audited accounts). 1.7.3 The GoTN has ordered reduction in the tariff ordered by the Commission and free supply to certain categories of consumers by providing subsidy under section 65 of the Act. 1.7.4 The maximum limit of borrowing power of the Board was Rs. 30,000 Crores and the loans outstanding as at the end of 2008-09 were Rs.20, 250.32 Crores. The gross and net assets value of the Board as at the end of 2008-09 were Rs.25016.17 Crores and Rs. 14841.40 Crores respectively.

1.8

Compliance of provisions under section 131 of Electricity Act 2003. Nadu Transmission Corporation Ltd (TANTRANSCO) was

1.8.1 Tamil

incorporated on 15-06-2009. The certificate of commencement of business has been obtained for the TANTRANSCO on 11-12-2009. 1.8.2 Tamil Nadu Generation and Distribution Corporation Ltd (TANGEDCO) and TNEB Ltd have been incorporated on 01-12-2009. 1.8.3 The Transfer Scheme is to be issued by the Government of Tamil Nadu. 1.8.4 The TNEB has been permitted to continue to function as an integrated utility till 15-09-2010.

CHAPTER - 2 ISSUE-WISE SUMMARY OF VIEWS, COMMENTS, AND SUGGESTIONS, RESPONSE of TNEB AND RULINGS OF THE COMMISSION The following are the views / objections / suggestions expressed by Members of the State Advisory Committee and other stakeholders.

2.1

General

2.1.1 The TNERC should reject the tariff proposal filed by the TNEB for the following reasons (i) The Commissions directives in the earlier tariff order are either not followed / complied with or less effective. (ii) The TNEB could not furnish accurate figures like T & D loss. The TNEB is fudging the figures of T & D loss so as to keep it constant. (iii) The Commissions condition in the last tariff order that TNEB shall approach the Commission with annual tariff plan has not been complied with. (iv) A commercial entity has to match its income and expenditure but the proposal of TNEB is in deficit. 2.1.2 The revision of tariff be postponed for another one year, as the industries have not recovered fully from the economic recession. 2.1.3 Number of LT categories may be reduced from twelve to six. 2.1.4 Demand side management publicity should be done in terms of rupees instead of units / MWs. 2.1.5 There is discrimination in supply of electricity. While Chennai is enjoying uninterrupted power supply, other areas are subject to power cut. There should be uniformity in power cuts. 2.1.6 While only 50% demand of domestic industries are met, MNCs are given uninterrupted power supply. With the present reduced supply, the industries will not able to absorb the increase in tariff. The proposed tariff revision may be postponed till 30% power cut is lifted. 2.1.7 Tariff should be rationalized and TNEB should be made financially viable.

2.1.8

The financial crisis faced by TNEB is a temporary phenomenon as the TNEB will earn enough revenue by sale of excess power to neighboring states in 2012.

2.1.9

The tariff should not be hiked now in view of high inflation, economic slow down, global financial crisis and loss of employment.

2.1.10 The entire power from Neyveli Lignite Corporation may be retained for Tamil Nadu without sharing with neighboring states. 2.1.11 Monthly billing and spot collection of bills is recommended. 2.1.12 Tariff hike may be considered for those consumers who are consuming more than 3000 units. 2.1.13 Remove Restriction & Control measures with immediate effect. 2.1.14 Announced and un-announced power cut has led to loss in production and unemployment of labour. 2.1.15 Instead of three hours power cut, load shedding etc weekly power holiday may be introduced. Weekly power holiday for plastic, rubber and power loom industries can be declared instead of daily power cut and shut down. 2.1.16 The period of power cut is not specified and the power cut is continuing for more than 1 years. 2.1.17 Compact fluorescent lamp should be distributed to the public. 2.1.18 The frequent voltage fluctuations cause damage to electrical installations and equipments. 2.1.19 Pass book should be provided for security deposits. Security deposit should be collected for free power also. 2.1.20 Public Private Partnership in Transmission and Distribution may be encouraged. 2.1.21 TNEBs Balance Sheet is not displayed in the website. Atleast big consumers should be provided with a copy of balance sheet. 2.1.22 LT : HT ratio shall be 2 : 1 2.1.23 During 11th five year plan, there will be power shortage of 2141 MW and stop gap arrangements should be made to overcome the shortages. 2.1.24 Like oil sector bonds, Central Government should provide power sector

bonds to tide over the financial crisis of state utilities. 2.1.25 While giving building plan approval, installation of solar energy units should be made compulsory. 2.1.26 Tariff should be increased by 10% every two years instead of 80% at once to avoid tariff shock 2.1.27 TNEB should take steps to realize the arrears of power bill from the consumers, arrest transmission losses, pilferages, power thefts and take steps to reduce their establishment costs. 2.1.28 Supply of free power to huts and agriculture sector should be discontinued 2.1.29 Tariff revision should be subject to scrutiny & review of National Tariff Policy and National Electricity policy. 2.1.30 TNEB to utilize solar energy and assist consumers in setting up the same at their buildings. To facilitate this, help desks should be established in every circle or region and create awareness about the central government subsidy 2.1.31 Introduce different slabs according to drawl voltage of industries as is being done in states like A.P and Kerala so that the losses will be borne by the consumer only and not by TNEB. Non absorption of losses by TNEB decrease their costs 2.1.32 Why is TNEB petitioning for Rs. 1928 Crores in 2010-11 when the deficit is Rs 9418 Crores? 2.1.33 Commission should constitute an Independent Expert Group for going into all aspects of the functioning and finances of TNEB and come out with a White Paper in a time bound manner. 2.1.34 TNEB should have a full time Member in charge of DSM and this activity should be given the same importance as Generation and Distribution. The Commission should issue clear and unambiguous directives towards this. 2.1.35 Manpower employed / MW in thermal stations at 4.50 is higher than the benchmark of 0.96. 2.1.36 Linking of T & D losses to power procurement imposes a financial risk on the utility

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2.1.37 TNEB has neither apologized nor requested for condonation of inordinate delay for filing the petition since 2003-04 2.1.38 Commission should analyse how the TNEB has arrived at Rs 300 perkVA as demand charges and whether it is justifiable 2.1.39 TNEB is turning a blind eye to shopkeepers using wet grinders at home with domestic tariff and selling them in their shop. All this leads to breakdown of transformers

2.2

Quality of supply

2.2.1 The electrical transformers are burnt due to over loading. 2.2.2 No manpower is available in TNEB to maintain transformers. Helpers should be posted. 2.2.3 The tariff hike is acceptable; but quality power is required to sustain the business. 2.2.4 The technical mismanagement, unchecked power losses due to outdated generation / distribution systems, utilization mismatch resulting in trips and damage to circuitry, avoidable load shedding and breakdowns consume the system itself. As a system, TNEBs operation and maintenance

system is outdated and unless revamped by technical audit and planned development to eliminate power losses, frequent tariff revisions will have to be done . The consumers deserve to be convinced that the canons of financial propriety are fully adhered to by TNEB and requested the TNERC to accept the tariff petition.

2.3

AT& C Loss

2.3.1 When the demand for power is growing, there cannot be an increase in AT & C loss. 2.3.2 Bringing the AT & C loss level from 18% to 15% under R-APDRP scheme is toughest job as it would be subject to diminishing returns. 2.3.3 TNEB may concentrate on R-APDRP scheme in high density areas, so that the loss can be contained.

11

2.3.4 18% AT & C loss in Tamil Nadu is very static in spite of several steps taken to reduce the same. 2.3.5 The Maharashtra Electricity Regulatory Commission has fixed a maximum ceiling for T & D Loss upto which the licensee can go. The licensee has to bear the loss over and the above the ceiling. On similar lines, the TNERC may fix maximum ceiling for T & D loss and the loss above the ceiling shall be borne by the TNEB. 2.3.6 Meters have been fixed in 93000 distribution transformers to assess the T & D loss. But so for, no reading has taken place. 2.3.7 Electricity theft should be curbed since the theft results in increasing the cost of power supply to common public. 2.3.8 The line loss is 16% which can be reduced to 4% through innovative transmission and distribution system. 2.3.9 Electricity theft is being carried out with the connivance of TNEB staff. 2.3.10 High temperature treated wire should be used for reduction of T & D loss. LED lamps should replace tube lights to have reduction in power consumption even though the initial cost is high. 2.3.11 Super conducting wire has been invented by Thiru. Venkatmanickam in USA by which the line loss has been reduced to 6.30%. Why is the TNEB not taking such steps to reduce the losses? 2.3.12 TNEBs inefficiency should not be passed on to the consumers. 2.3.13 Political parties tap electricity through unauthorized means for their meetings. Political parties may obtain clearance for their meetings from TNEB.. 2.3.14 Electrical instruments and appliances with star rating should be purchased to encourage energy conservation.

2.4

Metering

2.4.1 TNEB can go for 100% metering to get correct quantum of subsidy for agricultural consumers. 2.4.2 Non metering of electricity service connections amounts to violation of

12

Electricity Act 2003. 2.4.3 The farmers hesitate for metering agricultural services because they fear that in future the agricultural services could be billed. 2.4.4 More effective way of implementing metering in the agricultural service connections is through incentivizing. 2.4.5 Unless the farmers association is convinced, meters cannot be installed in agricultural service connections. 2.4.6 Metering of agricultural services is a political decision. TNERC must have said No to the postponement of agricultural metering. TNEB should start the metering of agricultural connections as soon as possible. 2.4.7 Free power could continue but metering agriculture power is required to avoid wastage and to monitor the supply to agriculture connections. 2.4.8 Metering has not been done properly in the past. Metering is the gateway of revenue to TNEB. The lethargic attitude of the middle / senior level officials in TNEB has resulted in improper implementation of metering policy. 2.4.9 Metering should be done in kVAh instead of kWh. 2.4.10 Metering involves expenditure on cost of meters and on employees. 2.4.11 Meters should be provided at transformer end. 2.4.12 MRT may be established to check the meters for accuracy. 2.4.13 There should be waiver of meter rent in every CC bill as the consumers have already paid the meter caution deposit 2.4.14 Board to employ adequate manpower to complete the meter reading of transformers and windmills 2.4.15 There is inordinate delay in purchase of meters for LT services 2.4.16 Meters should be sealed to avoid tampering

2.5

Cost of Supply

2.5.1 Differential tariff may be fixed according to the voltage of supply. The TNEB should approach the Commission with a cost to serve model and leave it to the Commission to decide the tariff.

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2.5.2 The steps taken by TNEB to reduce the cost to serve may be brought out. 2.5.3 Average cost of supply to each class of consumers should be made public. 2.5.4 As per the National Tariff Policy, the tariff to the consumer should be + 20% of the average cost of supply. It may be ensured that the National Tariff Policy is not violated during the finalization of tariff. 2.5.5 The employee cost in TNEB is more and same should not be imposed on the consumers. 2.5.6 When other input costs have increased considerably over the period of time, the tariff revision has to be welcomed. 2.5.7 Star hotels, hospitals, places having centralized air condition should be levied tariff at cost to supply.

2.6

Subsidy and Cross Subsidy

2.6.1 To a query as to whether the GOTN would continue to subsidize the consumers at current level, the representative of Government informed that the level of subsidy will be decided only after the Commission finalizes the tariff order. 2.6.2 Agricultural subsidy is provided by the Government. Cross subsidy cannot be continued over a long period of time and it should be brought down over a period of time. However, subsidy can be continued. 2.6.3 Social obligation should be left to the Government of Tamil Nadu. 2.6.4 In neighboring States like Andhra Pradesh and Karnataka, the subsidy is primarily allocated to Agriculture whereas in Tamil Nadu, the subsidy is largely allocated to domestic consumers and only a little subsidy is allocated to Agriculture sector. Hence more subsidies need to be provided to Agriculture sector. 2.6.5 Gap between cost to serve and revenue is Rs.1.66 per unit. 2.6.6 Subsidy should be given to economically backward people and not to the affluent people. 20% rich lands lords enjoy 80% of free electricity and 80% poor agriculturists cannot access even the balance 20% electricity. It is to be decided as to whom the increase should be given.

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2.6.7 The working women hostel being run on nominal rates, presently charged under commercial tariff may be given government subsidy. 2.6.8 There should be no cross subsidy by industry sector to agriculture sector. The GOTN gives agricultural subsidy to the tune of Rs.263 Crores but actually it should be Rs.4118 Crores. 2.6.9 M/s. Price Water House Coopers study report conducted at the instance of SIMA states that 90% of the cross subsidy is passed on to industrialists and 6% is borne by the Government of Tamil Nadu as against 50% norms fixed under Electricity Act 2003. 2.6.10 National Tariff Policy states that the band width between the maximum and minimum tariff should be + 20%. Hence, the Government of Tamil Nadu should pay the cost to TNEB for the power supplied at subsidized tariff rate. 2.6.11 90% of micro industries are operated from rental buildings. There is more number of units in one campus. One main meter is fixed and sub meters are fixed for each unit. Subsidy may be extended to sub meter in each unit.

2.7

Generation

2.7.1 Plant load factor is adopted between 85% and 87%. TTPS is more than 25 years old and the estimated PLF of 80% is not possible. TNEB has to carry out expansion activity and hence, the proposed tariff increase has to be accepted. 2.7.2 There should be 10% increase in tariff to enable the TNEB to carry out the capacity addition programmes. 2.7.3 TNEB has not installed any power generating station of its own and depends on IPPs. The PPAs should have been regulated. 2.7.4 The meter readings are not taken regularly at the meter fixed at the wind mill generation units and there is no grounding transformer. 2.7.5 TNEB is un-necessarily using high cost imported coal (Rs.6500 per ton) instead of low cost domestic coal costing Rs.2400 per ton. Coal import

15

should be avoided by using local coal. 2.7.6 Electricity demand is increasing day by day. Hence, at least three ultra mega power projects with the capacity of 4000 MW each should be installed to meet the increasing demand. 2.7.7 The installation charges of solar power are costly but its maintenance charges are nil. For manufacturing Nano solar silicon units, full subsidy should be provided in order to procure solar cells at affordable prices. 2.7.8 Coal should be purchased based on useful heat value. 2.7.9 TNEB can consider setting up new plants at Ennore and Tuticorin instead of renovating the existing plants. 2.7.10 Adjustment of Wind mill power generation may be permitted for LT consumers. 2.7.11 Free colour TV is provided without adding adequate generation capacity. 2.7.12 Wrong classification by TNEB of some generators as captive power plants has deprived the Board of cross subsidy surcharge

2.8

Power Purchase

2.8.1 In the previous Tariff Order, the Commission ordered the TNEB to optimize the cost of power purchase and reduce the interest burden. TNEB has not taken any steps to vacate the stay obtained by IPPS in the matter of optimizing the cost of power purchase. 2.8.2 Neighboring state of Andhra Pradesh had revised the PPAs with IPPs and reduced the power purchase cost. 2.8.3 There is no logical reason to increase the wind tariff rate from Rs.2.30 to Rs.3.39 per unit. 2.8.4 Sugar mills are earning huge profits by way of selling sugar, producing ethanol / alcohol, bio manure production and selling power generated through co-generators. The cost of power purchase from sugar mills can therefore be reduced. 2.8.5 In the merit order list submitted by TNEB it is observed that the cost of power from Kudankulam plant is Rs.4.80 per unit. At this cost how can

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cheaper power be given to common consumer? 2.8.6 There should be uniform rate for the power generated from wind mills irrespective of the date of commissioning. 2.8.7 Excess expenditure on purchase of power should be compensated by Government as subsidy. 2.8.8 Ways and means to recover power purchase cost need to be found

2.9

Regulatory Asset

2.9.1 Regulatory Asset concept should never be an adjustment mechanism for accounting of losses as per International Financial Reporting System (IFRS). 2.9.2 The losses of Rs.25500 Crores have been converted into Regulatory Asset. How it is going to help TNEB? These assets should be utilized for improvement of TNEB. 2.9.3 Consumers should not bear the cost of the proposed creation of Regulatory Assets

2.10

Tariff for HT Industries

2.10.1 The consumption for residential / commercial purposes under HT tariff 1 should be metered separately and charged under appropriate tariff instead of the present LT tariff 1C. 2.10.2 Foundries require continuous power supply. 2.10.3 Automobile business is picking up and the industries may be permitted to use power upto the contracted demand. 2.10.4 There was a Supreme Court judgment that the hospitals should not be classified under commercial tariff and it should be treated as industries for the purpose of tariff. 2.10.5 Power transmission in Maharashtra is provided through express way. Similar facilities are required in Tamil Nadu. 2.10.6 In Tamil Nadu, peak hour charges are levied for consumption between 6.00 PM to 10.00 PM. In Andhra Pradesh, no surcharge is levied. There is

17

no statistics to show as to how 6.00 AM to 9.00 AM is considered as peak hours. This period may not come under peak hour. 6 AM to 9 AM to be made as normal slot as TNEB has not justified this as a peak slot 2.10.7 6.00 PM to 10.00 PM is the R & C period and load shedding is 3 hours. Total power cut is for seven hours. 70% demand charges are collected when only 49% power is made available with 51% power cut. 2.10.8 There should be no cross-subsidy burden on HT consumers. 2.10.9 Peak hour charges are collected at 20% whereas the incentive for consumption during 10.00 PM to 5.00 AM is provided at 5%. The night shift allowance (incentive for night consumption) may be increased to 20%. 2.10.10 Fresh projects are diverted to other countries outside India due to high cost of power / production. 2.10.11 Government of Tamil Nadu earns revenue of Rs.26850 Crores from industries. There is a possibility of the industries moving out to other States due to power cut and expected revenue may not come. 2.10.12 The demand charges at Rs.300 per kVA per month fixed before the FY 2003 is being continued and it should be reduced. 2.10.13 Textile industry is the single largest consumer for TNEB and out of total HT power load, 27% is utilized by textile industry. Proposed increase of 50 paise per unit with 55% power cut is not justified. Textile industries have constant power load for 24 hours and hence, there can be a reduction of Re.1 per unit. Textile industries should be exempted from tariff hike. 2.10.14 The tariff to the consumers who are receiving uninterrupted power supply should be increased. 2.10.15 Separate tariff for railway traction may be introduced. 2.10.16 There are no restrictions for LT & LTCT industries whereas HT industries are subject to the same 2.10.17 The Commission should consider doubling the percentage of incentives for power factor

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2.10.18 More rebate equal to 20% surcharge during peak hours for HT industrial consumers provided 2.10.19 Industries should be permitted to go beyond the fixed base demand and energy even though ready to buy under open access as against 5% in the previous Tariff Order should be

2.11

Tariff for HT II A Educational Institutions and Recognized Hospitals

2.11.1 There should not be any hike to hospitals and educational institutions under high tension 2.11.2 Military Engineering Services (MES) require a license as per the provisions of the Act. They purchase power from TNEB and supply power to its establishments within the premises. They collect normal charges from defense personnel. They have established transmission and distribution network and employed man power to maintain the same. MES require either reduction of tariff or a separate tariff to their services. 2.11.3 Indian Medical Association, Adiparashakti Charitable Trust , Broadcasting Corporation of India (AIR) Commercial to industrial tariff. have requested for change of tariff from

2.12

Tariff for HT II B Place of Public Worship

2.12.1 The HT tariff IIB can be clubbed with HT Tariff II A or demand charges for HT II B can be increased.

2.13

Tariff for Domestic

2.13.1 The homes like orphanage, home for aged, etc, run on charity should be classified under domestic category. 2.13.2 The house-owners are charging exorbitant tariff from tenants- its a parallel trading. Electricity charges collected for a rental building may be regulated. 2.13.3 The fixed charges of Rs.10 collected bi-monthly may be revised. 2.13.4 Tariff hike for domestic consumer who consumes more than 200 units bimonthly is not justified.

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2.13.5 An association for non traditional employment for women, an NGO providing training for under privileged women request to be charged under domestic tariff. Their expenses are met out of donations from corporate and philanthropists. 2.13.6 Domestic consumers may be divided into affordable and non-affordable categories and separate slab may be introduced for non-affordable. 2.13.7 Domestic consumers are given free hand to increase the load. They need to have limit in their load. 2.13.8 There should be no hike for the bi-monthly consumption between 200 and 500 units. 2.13.9 The tariff hike should be for consumption above 400 units bi-monthly. 2.13.10 Slab from 200 units to 600 units may be changed as 200 to 1000 units and there should not be any tariff increase upto 1000 units. 2.13.11 Use of power from domestic connection to the shop was hitherto charged under misuse of tariff and compensation charges levied. Now it is classified as theft of power and compounding charges are levied. This requires correction. 2.13.12 Domestic consumers should not be made as scapegoat for TNEB giving free power supply. TNEB should insist the Government to bear the loss. 2.13.13 During February and March, 25% subsidy in domestic tariff should be provided to help students to prepare for examinations. 2.13.14 Poultry rearing may be charged at domestic tariff. 2.13.15 Domestic tariff should be increased. 2.13.16 A flat rate may be levied for consumption of 600 units and above from zero units without any slab rate. For orphanages there may be a flat concessional rate. 2.13.17 Old age homes run on donation and door to door collection may be charged at flat rate. 2.13.18 A separate slab for consumption of 100 to 400 units may be introduced. 2.13.19 The tariff hike for consumption above 600 units bi-monthly may be 50 paise per unit.

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2.13.20 Organizations such as Home of Physically Challenged, Employment for Women, Home for the Aged, Orphanages, charitable trusts, organization of ex-service men. , organization for rendering free service for terminally ill patients have requested for levy of domestic tariff. 2.13.21 Places of worship in rural areas have requested to be charged residential tariff.

2.14

Tariff for Hut

2.14.1 The category name Hut can be renamed as BPL category, since, the concept of Hut has vanished. 2.14.2 The load limit to BPL category should be increased to 110 watts. Meters may be fixed and consumption upto 100 units bi-monthly may be free. Consumption beyond 100 units bi-monthly may be at regular tariff. 2.14.3 Free Hut service connections are being misused. Refrigerators and washing machines are also used in Hut services as against mandatory load limit of 40 watts bulb and free colour TV. They may be charged at Rs.50 per month as they have more appliances. 2.14.4 Huts should be levied minimum tariff

2.15

Tariff for LT Bulk Supply

2.15.1 Railway purchases power at bulk supply tariff and collects charges at domestic tariff from its employees resulting in loss to tune of Rs.45 Crores per year. 2.15.2 Manavalakalai Mandrams provide yoga for human excellence and change of tariff from LT tariff V to LT tariff I C for 68 centres on par with tariff to Azhiyaru Arivu Tirukkoil. 2.15.3 Organisations such as Aurobindo Society, Rehabilitation Trusts, Working Womens Forum, World Community Service Centre have requested for Bulk supply tariff

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2.16

Tariff for Street Light and Water Supply

2.16.1 Railway level crossing may be charged at the tariff applicable to street lights. 2.16.2 Electricity consumed in water supply pump house of Railways for supply of water to their employees quarters, stations and coaches may be charged at the rate applicable to water supply. 2.16.3 Time limiter / Auto switches on / off may be installed for street lights. The street lights should be switched on and switched off properly. 2.16.4 Free power supply may be extended to overhead tanks in village panchayat area for pumping drinking water and Street lights may be charged at domestic tariff rates. 2.16.5 Ragas Education Society and National Highways Authority of India have requested for tariff as applicable for public street lighting

2.17

Tariff for LT Educational Institutions, Recognized Hospitals, etc

2.17.1 The proposed tariffs to cinema theatres are lesser than the tariff proposed for educational institutions. 2.17.2 Educational institutions are paying salary as per the recommendations of the sixth pay Commission. Why is there a difference between the tariff for educational institutions under HT and LT categories? 2.17.3 The tariff hike to educational institutions will result in curbing the facilities such as fans and air conditioners in hostels and colleges which will affect the students. 2.17.4 The tariff to LT II B should be increased and concession should not be extended. 2.17.5 Private educational institutions and hospitals may be charged more as they are run on commercial basis. 2.17.6 ACMEC trust, Melmaruvathur is running free hospital for the poor and request for concessional tariff. 2.17.7 Organizations such as Indian Medical Centre , Tamilnadu People Welfare Association, Charitable Hospitals, Naval Unit NCC, Broadcasting

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Corporation of India AIR, Cretches and labour recreational facilities in Planters Association of Tamilnadu , Rural University and Indian Medical Association have requested for change of tariff under this category

2.18

Tariff for Places of public worship- LT II C SDP charities, Salem Arivu Thirukoil, Shivaram Trust (Veda patashala & hostel) have requested for tariff under LT II C.

2.19

Tariff for Cottage Industries

2.19.1 The consumption limit for hike in Tariff for cottage industries should be increased from 1500 units to 3000 units. The cottage industries reduce their product prices by 3% to 8% in view of competition from MNC. 2.19.2 Tariff for consumption above 1500 units bi-monthly need not be hiked. 2.19.3 Flour mills should be charged more. 2.19.4 The connected load limit of 10 HP may be increased to 20 HP. 2.19.5 Flour mills, Coffee grinding, etc upto 10 HP earlier classified under LT III A (1), have subsequently been classified under LT III B. The tariff for this category upto 10 HP may be restored to LT III A (1). 2.19.6 Mushroom growers having connected load of less than 10 HP may be given free power on par with agriculture. 2.19.7 Tariff to steam laundries may be changed from LT III B to LT III A (1) where the connected load is more than 10 HP as the steam laundries normally require more than 20 HP. 2.19.8 Indian Red Cross Society, Agriculturists of Dharmapuri & Thiruvannamalai district Owners Association, Local Jetty manufacturers, Steam Laundry have requested for re classification of tariff under this category. 2.19.9 Flour mills have also requested to revise the monthly minimum charges into fixed monthly consumption tariff 2.19.10 Various individuals owning flour mills, diesel service stations, Xerox shops, cable shop have requested for change of tariff category

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2.20

Tariff for Power Loom

2.20.1 Braided cord manufacturing is a manufacturing process industry where twisting and winding is done. Earlier this was classified along with power loom. This category is charged at the tariff applicable to Cottage and tiny industries (LT Tariff III A (1) since 2003. Only family members are engaged in this process. The earlier status of Power Looms (LT III A (2)) may be restored retrospectively. 2.20.2 Power looms installed in residential areas cause noise pollution and hence should not be allowed. Power looms are given free power upto 500 units and consumption beyond 500 units are charged at Rs.1.40 per unit whereas domestic consumers are charged at Rs.1.80 per unit which is not justified. 2.20.3 The limit for free power may be increased from 500 units bi-monthly to 2000 units bi-monthly. 2.20.4 The free units for power loom consumers may be as below: For the demand of 5 HP For the demand of 10 HP Or 50% of units consumed - 500 units - 1000 units

2.20.5 Braided Cords Association (with recommendation from Tamilnadu Chamber of Commerce -, Madurai), All District Ice Producers Welfare Association have requested for change of tariff categorization under this tariff

2.21

Tariff for LT Industries

2.21.1 The proposed LT industrial tariff is high and the neighbouring states are charging low tariff and hence, LT industrial tariff should not be increased. 2.21.2 The small scale industries are facing competition from industries in Kerala, Karnataka, Maharashtra, Punjab, etc, where the power tariff is lesser. Hence, level playing is difficult. Under economic recession , the tariff hike will be an additional burden.

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2.21.3 Micro and small industries in rural feeders get supply for only four hours in a day rendering it difficult to run the industry. There should not be any tariff hike to small industries 2.21.4 The Ice factories are catering to the needs of fisherman and their production depends on the fishing activities. They have to keep the plants running even when there is no demand for block ice and are paying electricity charges without revenue. They require a special concession on par with the other neighbouring states or tariff similar to power looms. 2.21.5 Small nursing homes in Tamil Nadu may be charged on par with the SSI Industries to encourage young doctors to run hospitals in rural area. 2.21.6 LTCT consumers may also be brought under R & C measures. 2.21.7 Cold storage requires uninterrupted power supply to preserve agricultural produce. There should not be R & C measures for cold storage. 40 Million tons of agricultural stock is wasted due to lack of post harvest storage technology. Cold storage has high cost of operation. Power cost accounts for 70% to 80% of overheads. There should be no increase in tariff. Instead subsidy may be provided to cold storage. 2.21.8 Plastic industries involve continuous processing and hence, uninterrupted power supply is required. 2.21.9 As per MSMED Act, investment limit in plant and machinery for small scale industry has been increased to Rs.5.00 Crores from Rs.1.00 Crore. Hence, the maximum connected load limit for LTCT connection may also be increased from 150 HP to 300 HP. 2.21.10 Salt manufacturing is charged under Industrial tariff. The operation of salt manufacturing is similar to agriculture operation and concessional tariff may be extended. 2.21.11 Rice mills are exempted from power cut. The maximum connected load for LT industries may be enhanced from 112 KW to 200 KW. 2.21.12 Tailoring & Embroidering Units, Water services, ONGC, South India Hotels & Restaurants Association, Ice factory in Fishing Harbour, Wireless TT Info Services have requested to be treated on par with

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other industries and be charged industrial tariff instead of commercial tariff 2.21.13 TNEB is imposing a surcharge under LT III B of 15% for welding industry, inspite of the fact that welding machines now are power efficient due to technology upgradation with a power factor of 0.9. Hence, the Commission may consider waiver of the 15% surcharge for welding tariff

2.22

Tariff for LT Agriculture

2.22.1 Agriculture should be charged under concessional tariff. 2.22.2 TNEB shall ensure that the free supply to agriculture is not wasted. The agricultural pumpsets should be modernized to reduce the consumption. 2.22.3 The ground water levels have gone down due to which the farmers are compelled to use higher HP motors, capacity of which has increased from 3 HP to 15 HP. 2.22.4 Research institutes of Tamil Nadu Veterinary and Animal Sciences University are doing research on fodder to cattle. The tariff may be changed from LT tariff II B to either free power (agriculture) or under LT III A (1) 2.22.5 ACMEC trust, Melmaruvathur is having agricultural lands and provision of free power is requested. 2.22.6 Separate rural feeder is required for agricultural service connections. 2.22.7 Sheep, Goat, Cattle, Poultry farming etc is allied to agriculture and these activities are carried out alongwith agriculture. Penalty is imposed when water is taken from the free agricultural service to provide to the animals. 2.22.8 Agriculturists grow trees and vegetables which reduce carbon-di-oxide and thus eligible for carbon credit. 2.22.9 Agricultural subsidy would be more if the actual loads in agricultural services are assessed and accounted for. Voluntary Disclosure Scheme may be introduced to regularize the excess load in agricultural service. 2.22.10 Agriculture subsidy should be equal to agricultural energy consumption.

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2.22.11 Agriculturists rear fish by pumping water from agriculture services and they are now being fined. Such agricultural service may be charged at Rs.250 per HP per year. TNEB may get Rs.43.50 Crores per year. 2.22.12 New category for fish culture may be introduced. Fish culture may be categorized as industry instead of commercial category 2.22.13 Lot of misuse of agriculture power is taking place. The farmers are pumping water from agricultural wells and are selling water. 2.22.14 Irrigation societies are charged at 50 paise per unit for agricultural operation. Free electricity may be extended. 2.22.15 Agricultural tariff may be extended to two numbers of bore well established by Centre for Rural Education and Economic Development (CREED) an NGO established by Indian Council of Agricultural Research under the network of Krishi Vigyan Kendras (KVK). The KVK is to foster propagation and cultivation of different economically beneficial crops and horticultural plants for the demonstration and distribution to the wider range of small and marginal farmers. 2.22.16 Farmers may be allowed to use free agricultural service for green house. Agricultural service may be given to all farmers under LT III A (1) at Rs.1.20 per unit and the service connection may be given within 30 days without mentioning the classification of crops. 2.22.17 Animal Husbandry, Nilgiris Potato & Vegetable Grower Association, Salt Manufacturers Corporation, CREED Krishi Vigyan Kendra have

requested for change in tariff to this category

2.23

Tariff for LT Commercial

2.23.1 Commercial consumers who use power upto 400 units should be charged at the tariff on par with domestic consumers. 2.23.2 The tariff to working womens forum should not be hiked or subsidy should be given as the forum is doing social work for poor women and their power consumption is increased due to computerization of their accounts. 2.23.3 Hotels are providing hospitality services and service industries like hotels

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should be treated on par with manufacturing industries for the purpose of tariff. 2.23.4 Health care industries should be given a separate tariff with uniform flat slab rate or at least on par with the Government hospitals. 2.23.5 For the new nursing homes established in village areas, subsidized tariff may be extended for the first five years to encourage establishment of hospital in rural areas. Normal tariff may be levied after five years. 2.23.6 World Community Service centre is a non profitable organization, providing free yoga and meditation training to various States and Central Government organizations. They are presently charged under Commercial tariff and they request concessional tariff. 2.23.7 Ayyappa charitable trust engaged in various humanitarian, medical, social and civic activities for the poor and downtrodden is presently charged under Commercial tariff and they request concessional tariff rate with retrospective effect. 2.23.8 DEAN foundation giving free palliative care to the patients with terminal diseases, presently charged under commercial tariff requests domestic or alternative tariff. 2.23.9 Bharat Sevashram Sangha, Rameswaram is a charitable missionary providing social services during natural calamities providing water, boarding and lodging without any charges. The ashram is run on donation. They were charged under domestic upto 2003 and since 2003 they are charged at commercial rate. They request normal tariff. 2.23.10 The tariff upto 1500 units bi-monthly may be fixed at Rs.3.00 per unit. 2.23.11 Tariff to cinema theatre is proposed to be revised from Rs.4.40 per unit to Rs.5.00 per unit whereas the tariff for petty shops is proposed to be revised from Rs.5.80 per unit to Rs.6.50 per units which are not justified. 2.23.12 Small (petty) traders request tariff on par with domestic or a separate tariff at Rs.3.00 per unit upto 250 units bi-monthly. 2.23.13 India Medical Center, Kanyakumari has requested for exemption from tariff increase as it provides free service / treatment to all patients.

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2.23.14 If private hospitals and nursing homes are charged under LT tariff II B or HT tariff II A, the hospitals can reduce the health charges to the public. The SIDCO / SIDBI treat the medical profession as industry. 2.23.15 Presently plantations are being charged at Commercial tariff and it should be changed to agricultural tariff. 2.23.16 Marriage halls should be asked to pay more for each unit. Hotels should be charged at Rs.10 per unit. 2.23.17 For use of Neon lights, the tariff may be levied twice the commercial rate. 2.23.18 Reliance Communications, Vodafone Essar Cellular Ltd, Association of Unified Telecom Service Providers of India Wireless, TT Info Services Ltd (A subsidiary of Tata Teleservices Ltd), Indus Towers which are classified under IT industry have requested for industrial tariff.

2.24

Tariff for LT Temporary Supply

2.24.1 This category is not required. 2.24.2 The temporary supply should not include construction activity. The supply purely on temporary basis may be charged at double the commercial rate. 2.24.3 Electricity consumption for political meeting shall be charged to concerned political parties and electrical consumption for the temple festivals shall be charged to the temples concerned. 2.24.4 Separate tariff for lavish illumination may be introduced.

2.25

Free / Concessional Tariff

2.25.1 The following organizations have requested for levy of free / concessional tariff : Bone specialty hospitals, Trusts, National Agricultural Foundation, Blind & Physically Handicapped Trust, Nilgiris Mushroom Growers/ Manufacture Association , Public charitable Trusts, Nilgiris Bought Leaf Tea

Manufacturers Association, BSNL for its quarters and group houses, Madurai Betel Nut Beedi cigarette merchants Association, Coimbatore District Coolies Weaving Owners Association, Buildings occupied by fair

29

price shops sun by co-operatives, Tamil Nadu Veterinary & Animal Sciences University, Youth hostel JV of GoI and GoTN, Agri service connections for poor farmers in Kanyakumari be changed from Commercial to free / concessional tariff. 2.25.2 GoTN should consider a subsidy to such hospitals for buying generators and those hospitals who have generators, diesel should be supplied at Concessional rate.

2.26

Request for separate category

2.26.1 Military Engineering Services, Rural hospitals, Fish processing industry and Southern Railway have requested for separate tariff category. Southern Railway have specially requested for separate tariff for Traction and Non traction

2.27

TNEBs Response

2.27.1 The TNEB has to spend around Rs.2000 Crores on metering of agricultural services. 2.27.2 Domestic users consume 15 million units / day. Individual consumption has already crossed more than 1000 units, whereas the percapita consumption envisaged in the 11th Plan is 1000 units only. Last year, the average cost of supply was Rs.4.70/unit and it is expected to increase to Rs.4.90 / unit. As on date, the average recovery is Rs.2.60/unit. For every consumer, the average subsidy is Rs.2.30 / unit. In Tamil Nadu, except Commercial and Industry, other categories come under subsidized tariff. Out of 2.09 crores consumers, no hike is proposed for 1.65 crores consumers. Out of 1.50 crores domestic consumers, there is no hike for 1.40 crores consumers. Hike is proposed for only 10 to 12 lakh domestic consumers. The average increase is 65 ps. only. 2.27.3 TNEB is also taking steps to curb theft of power. In 2008-09, total recovery on account of energy theft was Rs.17 crores and for the year 2009-10, it was Rs.50 crores.

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2.27.4 Capacity addition to improve the power position in the state requires heavy investment. TNEB has proposed Rs.3500 Crores for capital investment. From 2011-12 onwards, 2000 MW of power generation will be added every year. Rs.3500 Crores have been invested in the last 2-3 years. In the next few years, Rs.6, 000-8000 Crores will be further invested. It is expected that the power generation will increase as under: o 2011-12 o 2012-13 o 2013-14 : : : 2,000 MW 2,200 MW 2,500 MW

2.27.5 Line loss is estimated @ 18%. Even if it is assessed, it would not be more than 19%, whereas at the national level, the line loss is 26%. 2.27.6 There is no proposal to do away with the free power supply to power looms. 2.27.7 Unmetered consumption is only estimation. For those consumers who consume 80 to 100 units per month, no tariff increase is proposed. Small industries are exempted from power tariff increase. The cost of production is estimated to increase from Rs.4.52/unit to Rs.4.90/unit; the average recovery is Rs.3.60/unit and the revenue-cost gap is Rs.1.10/unit to Rs.1.30/unit. 2.27.8 To meet the power shortage of 3000 MW, TNEB is purchasing 2000 MW to 2200 MW from the market. 2.27.9 Tariff increase is proposed only for those who can afford to pay. TNEB has requested for marginal increase in tariff to reduce its financial crunch. 2.27.10 On the requests raised by various consumers for change of tariff, TNEB is of the view that the existing system of change of tariff on a case to case basis be continued so that field verifications can be done before according the change of tariff. The common purpose service

connections for change of category may be examined at a later date. However, requests of all the consumers cannot be considered as it

would be a cause for severe strain on the finances of the Board.

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2.27.11 Grant of subsidy is the prerogative of the State Government. The extent of subsidy for various classes of consumers varies and presently, all categories of consumers are being subsidized. As of now, the TNEB has not proposed any increase in tariff for the Huts and Agriculture category. 2.27.12 The TNEB is making increasing attempts to bring down the cost of power purchase, but fails to do so due to increased demand and reduced supply of power. Hence, it is constrained to buy expensive power from the market in order to maintain the supply schedule. It has now approached the Commission with the tariff proposal which among other options will also help recover the cost of power purchase. The TNEB has also tried to reduce cross subsidy by way of not increasing tariff for most of the categories. . It is to mention that even though the element of cross subsidy is high, all consumers for every category are getting subsidized power. It is only the degree of subsidy which varies. Even now, the TNEB has sought a very little tariff hike 2.27.13 AT & C / T & D losses of TNEB may be in the range of 18%-20% which is better than the loss levels of some utilities in the country at an average of 56% and the national average being around 26%. It is to clarify that the 18% is inclusive of all the losses (including theft etc). However, the TNEB is taking various steps such as improving collection efficiency, replacement of defective meters, active participation of the enforcement wing for reduction of energy thefts, improving the length of HT lines in Sub transmission, improving the HT: LT ratio in the distribution system, erection of new sub-stations , segregating feeders, provision of ring

fencing and automatic data logging system among other measures to reduce these losses. It is expected that the losses will be reduced to 15% in another three years after implementation of such measures 2.27.14 The TNEB is concerned with the increasing demand supply gap in the state leading to shortfall in power supply. Hence, in order to be self sufficient, the TNEB is contemplating on adding capacity. The Board

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envisages a capital expenditure to the tune of Rs 6456 Crores during the financial year 2010-11. In the coming years, the TNEB will be investing around Rs 8000 Crores for capacity addition / capital expenditure for generation alone. The Kudankulam plant is expected to generate 965 MW of which Tamil Nadus share is 464 MW. This supply was expected to commence by June 2010 which has been postponed to September 2010. The only difficulty in the capacity addition program pertains to equipment supply. The only supplier of necessary equipment is BHEL. Presently, the focus of BHEL is Delhi, which is the venue for the Commonwealth games. Hence, the TNEB is informed that the wait for the equipment would be at least 3-4 years. Hence, the capacity addition of 600 MW is expected by March 2011 and another 600 MW is expected by June 2011. The Board is also undertaking refurbishment of its old generating stations, which would lead to extension of life and improvement of PLF. This would lead to enhancement of power at lower cost to the consumer 2.27.15 The TNEB has been making efforts to publicize various methodologies for energy saving among the general public. It has updated its website on the various methods of energy savings to be adopted by Domestic, Agricultural and Industrial consumers. It has also taken steps for implementation of various DSM projects which are elaborated in the tariff petition. As regards solar power utilization, the proposal is expensive leading to high per cost of power. Instead, TNEB is focusing on wind power which is cheaper source of power. 2.27.16 At present, there is gap in the power availability and power demand. The gap is around 25-30% which works out to around 2500-3000 MW. Hence, there necessarily will be power supply restrictions. However, TNEB is imposing rotational power cuts It is also trying to maintain the schedule of supply by buying expensive power from the market, which is not available most of the times due to the high demand from other states in the country. The state of Tamil Nadu is the one of the largest

33

producers of wind power and it is hoped that wind power would come to the rescue of the TNEB in tiding over its power crisis to some extent in the coming months. Hence, it is requested from the general public to bear with the TNEB for another 1 1/2 2 years by which time the power supply in the state would be comfortable due to the commissioning of most of the power plants. The Board has also proposed 110 schemes for implementation of the Restructured Accelerated Power Development and Reform Program (R-APDRP) to improve consumer satisfaction by establishing quality, reliable and stable power supply. This will be

achieved by establishing IT based measuring system and strengthening the Distribution networks aiming at accounting the entire unaccounted for power. 2.27.17 TNEB acknowledges that metering all the consumers is important to ensure recovery of the due revenue. Though the TNEB is making all efforts to meter huts and agriculture connections, it faces stiff opposition from the same consumers As the complete process of metering the Agricultural and Hut services is very vast and slow process, TNEB has requested the Commission for time and the Commission has granted time for another three years from 01-10-2009 to complete the same. The Board also has an action plan for speedy replacement of defective meters. TNEB has been incurring losses since 2003-04. The tariff was last revised in 2003 and since then the electricity rates in Tamil Nadu have undergone no change. The mounting losses can be wiped off in a phas ed manner only by way of creation of Regulatory Asset so as to avoid tariff shock to the consumers. The practice of creation of Regulatory Asset has already been implemented in other states. The TNEB has projected cumulative Regulatory Assets to the tune of Rs 16774.47 Crores (upto 2008-09). This asset would be in the nature of a deferred expenditure and will be charged as expenditure while formulating the ARR in the future years

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2.27.18 The TNEB is actively taking steps to control theft of power. An Anti-theft squad has been formed which is periodically conducting raids to detect theft of power. For the previous financial year, around Rs 17 Crores have been recovered. This year, the recovery has increased to Rs 50 Crores. TNEB is also taking various preventive actions such as

installation of metering point in front of premises, installing electronic meters , sealing the distribution boxes and bus chambers before the meters, , detecting thefts through scientific planning of inspections , usage of check meters , automatic voice recording system, cash award scheme to the employees etc. Though theft cannot totally be eliminated, the TNEB is doing its best for recovery and plugging in the losses. 2.27.19 The TNEB has not proposed any revision in tariff for LT consumers under I-B ( Hut ), II-A ( Street lights & water works ), II-C ( places of worship), IIIA(2) (Powerloom weavers), IV ( Agricultural consumers ) and LT consumers who are consuming less . It has also not proposed a hike for HT II B (places of worship), HT-IV (Lift irrigation), and HT V (Puducherry). Others are proposed only with a marginal increase wherein the people who are consuming more power and have the capacity to pay . Therefore, the TNEB is only able to partially meet its losses. This is also in line with the government policy that the

consumers who pay the least are given the top most priority. Thus, the tariff hike is only for 12 lakh consumers in the state. The maximum increase proposed is Rs 1/- per unit. The existing free supply of power would also continue and TNEB has not proposed any modification in this regard. 2.27.20 As per Regulation 5(5)(i) of the Tamil Nadu Electricity Supply Code, rate of interest on Security Deposit shall be on the basis of the Commissions direction. The Commission, in its recent Order of 12-04-2010 has fixed the rate of interest on the consumer security deposit as 6%. The Commission has also directed the TNEB to pay interest at 6% on the

35

Security Deposit and Meter Caution Deposit as on 31-03-2011 to be intimated to the consumers by 30-06-2011. 2.27.21 The TNEB has been sourcing its power purchase from central generating stations, its own generating stations, private captive generators, IPPS and from the open market. In this regard, the TNEB is following the merit order dispatch while making its purchase. However, in times of acute shortage of power in the state, it is constrained to buy expensive power. However, in order to tide over purchase of expensive power, the TNEB has made ambitious plans for capacity addition which will yield fruit in another 3-4 years. 2.27.22 The TNEB is purchasing coal by executing Fuel Supply Agreement with Eastern Coal Field and Mahanadi Coal Fields for a period of 30 years w.e.f 01-04-2009. The price of coal also varies as per notification from Coal India Ltd. The variation depends on factors such as quality, moisture content, ash content, volatile matter, useful heat value, statutory charges etc. Hence, its is TNEBs intention to buy quality and cost effective fuel 2.27.23 The TNEB is dependent on its own Wind farms and private generators of Wind. It is acknowledged that wind comes in as the saviour to the TNEB in crucial power situations.

2.28

TNEBs response on the petition for Southern Railway is as follows :

2.28.1 RAILWAY TRACTION (1) EHT Category to be introduced with a sub category for Railway Traction under the EHT category. Present Tariff category : HT Tariff I A At present 90 numbers 110 KV EHT Services and 5 numbers 230 KV EHT Services are available. The Energy consumption during the FY 2009-10 is 2413 MU and if any sub category of tariff for Railways is allowed, then the same sub category is to be allowed for all EHT Services. Hence, if reduced rate of 20 paise is adopted for these 95 nos EHT services, their

36

probable additional impact to the Board will be Rs 120.65 Crores.

In

respect of Railways, only the energy consumption during FY 2009-10 is 285 MU and if the reduced rate of 50 paise is adopted for EHT services of Railways, the probable additional impact to TNEB will be Rs 14.27 Crores. (2) Demand & Energy charges in Railway Traction tariff is to be fixed at lower than EHT/HT Industrial consumers on par with the average rate of realization from the Industrial consumers at EHT/HT (3) The energy consumption during the FY 2009-10 is 659.89 MU and if the reduced rate of 50 paise is adopted for the EHT/HT services, the probable additional impact to the Board will be Rs 32.99 Crores.

2.28.2 Adopt Lag only logic for metering Railway Traction loads (1) TNEB specifically sought amendment from the Commission to delete the word lag appearing in clause(iii), para 1 of Part 1, High Tension supply and in Clause(5),Para(9), clause(iii),Para 11 of LT tariff IIIB,V of Chapter 7.17 of tariff order dt.15.3.2003 on Power factor/Low Power factor surcharge. (2) As per the original tariff order dt.15.3.2003, the average power factor of the consumers installation shall not be less than 0.90 lag in respect of HT and .85 lag in LT III B and V with a connected load of 25 HP and above. Wherever the average power factor is less than the stipulated limit, compensation charges have to be levied. Wherever power factor exceeds .95 in HT and .9 in LT, and incentive was given i.e a power factor rebate of 0.5 of the amount of CC charges for every increase of 0.01 in P.F. (3) The deletion of the word lag was sought due to the following reasons: i) Both capacity VAR and inductive VAR pumped into the system are detrimental. ii) On the pretext of incentive, the consumers were over compensating. iii) Due to the over compensation, utilization of Transformer capacity gets blocked due to the increase in current; line loss increases. iv) Also over voltage problems occur in the LT side of D.T.

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(4) TNERC issued an amendment vide T.O 1-102 dt.22.5.2007 deleting the word lag in the above stated clauses of chapter 7.17. The above order is applicable for all the consumers. (5) Further the following are submitted: (i) M/s. Southern Railways have already filed many petitions before the Commission and the last of the Review petition has been dismissed, the details of which are furnished below: (a) Railways had filed a petition vide M.P No.5/2006 against the introduction of modified software by the Board to record lead P.F. The Commission in its order dt.2.4.2007 granted 3 years for introduction of online Dynamic Reactive Power

Compensation equipment in Railway Traction EHT services and ordered that the Railways will be bound by the Tariff Order prevailing at that time. The petitioner had sought time stating that time is required to install necessary equipments to improve P.F. (b) During 2009, M/s. Southern Railways filed another petition M.P. No.3/2009 before TNERC stating that implementation of Order in M.P. No.5/2006 would cause severe financial strain in Railways and that dynamic compensation system would consume much higher power This than the was existing dismissed fixed on

compensation

system.

petition

29.6.2009. However Railways again filed a Review petition No.2/2009 for review of the order dt.29.6.2009 in M.P No.3/2009. This review petition was also dismissed on 1.4.2010 with the observation that merits are not justified. (6) Contentions of the Board not to consider the request of railways to adopt Lag only logic (i) At the outset it is to be stated that railways are to be treated like any other EHT/HT consumer. No special concession need be granted

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thus avoiding disparity among consumers.( There are 7122 nos. of EHT/HT consumers.) (ii) It may be noted that the Railways have already enjoyed the benefit of having the metering arrangements to read lead P.F. as unity for a period of 3 years as per the order in M.P. No.5/2006 dt. 2.4.2007, while seeking time for installing compensating equipments for online Dynamic Reactive Power compensation. They have enjoyed a benefit of Rs.8,00,00,000/- in the form of incentive, and have successfully evaded penalty for 3 years. (iii) M/s. Southern Railways is being extended with following facilities in spite of harmful effects on the Boards power system. (a) Supply on two phas es is given which induces imbalance in the system. (b) Maximum demand registration is based on 30 minutes integration whereas other utilities are having 15 minutes integration. This helps Railways to shift the loads temporarily during shut down/emergency condition. (c) (d) No load shedding, no power cut unlike other H.T. Consumers. Traction load transmits fluctuations and harmonics (18 to 20%) which are harmful to the system and generators. These are absorbed by the system of TNEB and no extra charges are levied for the harmful injections by traction load of Railway. (e) Proper correction of the harmful effects has to take place at the consumer end as otherwise the cost involved in such corrections by the Board will pass on to other consumers. (f) Therefore request of Railways to adopt lag only logic for metering of Railway traction loads need not be considered.

2.28.3 Excess MD Surcharge be levied only above 120% of the CMD and the excess MD surcharge be reduced from 200% to 100%

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(1) As per Regulation 5(2) of the TNERC Supply Code, whenever the consumer exceeds the sanctioned demand, the exceeded demand alone shall be charged at double the normal rate. As already stated in the remarks to the prayer to adopt lag only logic, the maximum demand registration is based on 30 minutes integration as against 15 minutes allowed in other utilities. As the above concession has already been granted, further requests need not be entertained. Also, if concessions are granted to Railways, many other consumers shall seek special concessions. The probable revenue impact for 2008-09 : Rs 5.92 Crores and for the FY 2009-10 : Rs 2.15 Crores

2.28.4 NON TRACTION SERVICES (1) To extend the subsidized slab tariff benefit by average billing method or to fix the tariff rate at the proposed subsidized rate applicable for bimonthly consumption of 200-400 units i.e Rs 2.70/unit for all the Railway quarters connected under HT points ( HT II A, HT 1A & HT III with sub metering ) and bulk supply points under LT IC (2) The energy consumption during the FY 2009-10 is 48.09 MU and if the reduction of 80 paise ( Rs 3.50-Rs 2.70) is adopted for the EHT / HT services, then loss of revenue to TNEB will be Rs.3.85 Crores Hence, the existing tariff LT I A may be continued. 2.28.5 HT supply points with major industrial loads ( such as Electric Loco shed, Diesel Loco shed , CTXR Wagon maintenance shed, Main receiving station , pump Load station , Lighting load , Staff quarters load ) be classified under HT Industrial Tariff HT 1 A and to provide sub-metering facility for charging the Commercial energy separately. 2.28.6 The energy consumption during the FY 2009-10 is 11.08 MU and if the reduced rate of 150 paise (Rs 5.00-Rs 3.50) is adopted for this EHT services, then probable impact on revenue of TNEB will be Rs 1.75 Crores. The activities carried out in this non traction HT service are for

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mixed purpose such as Railway station, residential, commercial etc. Hence, the existing tariff HT Tariff III may be continued. 2.28.7 HT supply points with major pumping loads be classified under HT II A. The energy consumption during the FY 2009-10 is 2.18 MU and if the reduced rate of 3.18 paise ( Rs 6.38-Rs 3.20) is adopted for this EHT services, then probable impact on revenue of TNEB will be Rs 0.69

Crores.. Hence, the existing tariff HT Tariff III may be continued. 2.28.8 LT supply points for level crossing gates be classified under LT II A. The energy consumption during the FY 2009-10 is 1.06 MU and if the reduced rate of 2.20 paise ( Rs 5.90-Rs 3.70) is adopted for this EHT services, then probable impact on revenue of TNEB will be Rs 0.23 Crores..

Hence, the existing tariff LT Tasriff V may be continued. 2.28.9 SC No 1002 at MRS/Villivakkam be exempted from availing supply at 110 kV or may be permitted to continue at 33 kV as a special case without any penalty till completion of the codal life of the existing 33 kV transformers. 2.28.10 The energy consumption during the FY 2009-10 is 67.53 MU and if the reduced rate of 10 paise ( excess levy collected ) is adopted for this EHT services, then probable impact on revenue of TNEB will be Rs 0.67 Crores. 2.28.11 The energy consumption during the FY 2009-10 is 7.86 MU and if the reduced rate of 10 paise ( excess levy collected ) is adopted for this EHT services, then probable impact to additional revenue of TNEB will be Rs 0.08 Crores

2.29

Commissions Views on the objections / comments / suggestions

2.29.1 General Issues : (1) The Commission examined various issues raised by different stakeholders and the response of the TNEB. These issues were raised in the written

comments received by the Commission as well as highlighted during the

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hearings held at different locations. The views expressed by the TNEB are in the form of response to the comments of individual stakeholders and the response of Chairman, TNEB at the conclusion of hearings in each location. The Commission would like to make a summary comment on these issues. (2) The issue of Transmission and Distribution losses is discussed separately. (3) The Board has approached the Commission after 7 years for a tariff revision. (4) During the 7 years period, the accumulated losses upto 2007-2008 is Rs. 9642.53 Crores based on the audited accounts and Rs. 16774.47 Crores based on un-audited accounts for the year 20082009. Even in the subsequent years 20092010 and 2010-2011, the Board has indicated losses in each of the years. The analysis on expenditure on individual item is discussed under respective heading separately in this order. (5) The major reasons for the loss are shortage of power, exponential growth of demand and the need for power purchase from the market at high price coupled with tariff remaining constant for a period of 7 years, notwithstanding the increase in various input costs. The Commission is concerned with a) the accumulated losses upto the current year and b) the continuing losses during the ensuing period. (6) The first step should be for reversing the trend and to cut down the losses. Simultaneously the treatment of accumulated losses needs to be considered carefully at the time of unbundling of the TNEB. This issue has also received the attention of the Central Government at the time of formulation of National Electricity Policy (NEP) under Section 3 of the Electricity Act, 2003 and finalized in consultation with State Governments. The NEP stipulates that For ensuring financial viability and sustainability, State Governments would need to restructure the liabilities of the State Electricity Boards to ensure that the successor companies are not burdened with past liabilities. The past burden of the utility should not be

42

passed on to the future consumers as also decided in some of the judgments of Courts even in the short term. Further, in accordance with the Government of Indias Tariff Policy, under business as usual conditions, the opening balances of uncovered gap must be covered through transition financing arrangement or capital restructuring. The

Commission has also sent a statutory advice to Government of Tamil Nadu in this regard in their letter dated 04-05-2010. The present

endeavour is to add generation capacity, resort to demand side management, improve efficiency in operation, so that the trend of losses be arrested. It is also stated that barring commercial consumers, all other consumers are paying below costs. At the same time, the Board has proposed to increase tariff only to certain category of consumers leading to increase in revenue of Rs.2000 crores leaving a huge gap. The TNEBs proposal is to create a Regulatory asset which could be recovered from the consumers in future. It is to be noted that the regulatory asset is actually a liability to be recovered from the consumers by the TNEB in future years. With the continuing deficit of the Board, it is not possible to amortize the regulatory assets within the next 3 years as stipulated by the tariff policy. These issues can only be dealt with in the long term and no short term solutions are available. If they are to be recovered in the short term, there will be a huge tariff shock to almost all categories of consumers. The Commission is not aware of the approach of the State Government, with regard to subsidy as the Government would be deciding the subsidy after the announcement of tariff by the Commission. The practice adopted by the neighbouring state of Andhra Pradesh which is almost similarly placed to Tamil Nadu in respect of the demand served, energy served and consumer mix etc. is to indicate the stand of the Government with respect to subsidy in advance. It is seen from the latest order issued by the APERC that the AP Government gave direction to APERC under section 108 to maintain uniform tariff across the state and also considered subsidy to the extent of Rs.3652.81 Crores before the

43

issue of the order and APERC has

distributed the subsidy for the 4

Discoms at the time of issuing the order. The TNERC leaves this issue to the best judgment of the Government of Tamil Nadu for appropriate action. (7) As regards demand-supply position, the TNEB has indicated that the Capacity Addition Programme undertaken by them would start yielding results from the middle of next year i.e. 2011 with various units at Mettur, North Chennai and Vallur Thermal Power Projects getting commissioned and Koodankulam Nuclear Power Project would also bring in about 960 MW of additional power. There are some more projects in the pipe line. With the commissioning of these power plants, additional capacity will be available to meet the demand. At that stage, the purchase from the

market upto 2000 MW or about 20 million units per day would come down and the average power purchase cost will also get reduced accordingly. That is the stage at which the trend of losses are likely to be reversed. (8) Almost all categories of consumers are objecting to the tariff hike proposed by TNEB. It should be noted that the tariff hike proposed by TNEB is not to recover the entire gap in ARR but only about 20% of the gap is proposed to be recovered through tariff hike. The balance is

proposed to be deferred to future years and to be shown as regulatory assets in this tariff order. Some of the consumers have suggested a modest tariff hike as there has been no tariff hike in 7 years and the input costs have gone up. The Commission is concerned with the state of

health of the utility. The utility should be healthy enough to serve the consumers. At the same time attempting to recover the entire revenue gap in one go would result in a huge tariff increase for all consumers and may not be a viable option. The Commission has to take a balanced view with regard to tariff hike. If the utility had been filing tariff petitions at regular intervals, there could have been modest tariff increase year after year avoiding the need for a huge hike in one year. The Commission

44

hopes that with this experience, the Board and its successor entities would file tariff petitions at regular intervals in future.

2.29.2 Quality of Supply: (1) The concern expressed by various consumers with regard to the quality of supply is very relevant. The Commission has already notified the

Performance Standards and Regulations, which stipulate the quality of supply levels to be maintained by the Utility. While overall standards may be maintained by the Utility, it is quite possible that some chronic problems may exist in the system. (2) The common problems expressed by the consumers include low voltage, overloading and burning of transformers, cable failures, load shedding etc. While load shedding is directly related to the availability of power and the ability of TNEB to purchase power at high cost, the other issues are technical in nature and will need investment in improving last mile connectivity. (3) The distribution planning to be done by the TNEB, duly taking into account the requirements of Supply Code, Distribution Code etc. would go a long way in improving the quality of supply. (4) The Commission believes that TNEB has its own in-house guidelines with regard to operation and maintenance of distribution system. Adequate transformation ratio will have to be created depending on the requirement. HT/LT ratio needs to be improved. (5) The distribution transformers are to be metered to get the profile of the voltage, down time as well as the energy. Normally load on transformers should be limited to the extent of 80% of the rated capacity to prevent failures etc. (6) The cables should be properly selected to prevent overloading and frequent failures. The voltage at the tail end needs to be monitored at regular intervals. Proactive action on the part of TNEB will go a long way in reducing the consumers complaints and improving their satisfaction.

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(7) Erection procedure and safety requirements as per section 53 of Electricity Act, 2003 should be followed in letter and spirit. (8) As far as consumers are concerned, these complaints could be taken up with the Utility directly and in the absence of corrective action by TNEB, the issue could be taken up with the Consumer Grievance Redressal Forum (CGRF) for Redressal of grievances. In case the consumer is not satisfied with the Order of CGRF, an appeal could be preferred to the Ombudsman. The Regulations relating to CGRF and Ombudsman could be referred from the website of the Commission.

2.29.3 Metering and Energy Audit : (1) Section 55 of the Electricity Act envisages that all connections shall be energised through a correct meter. The relationship between Utility and the Consumer is through the meter. The specification of the meters has already been laid down by Regulation by the Central Electricity Authority (CEA) in accordance with the Act. A time bound programme for 100% metering needs to be worked out by TNEB and submitted to the Commission. This shall be done within six months of the issue of this Order. (2) It is also necessary to meter all the feeders and the distribution transformers and the meters shall have the facility for remote reading. Appropriate technology needs to be selected and SCADA / data management system needs to be established. Such an arrangement will enable carrying out of Energy Audit and will also facilitate Demand Side Management (DSM). In the interim period, the TNEB is directed to submit the programme for carrying out the Study for Assessment of Transmission and Distribution (T&D) losses. This will help in properly assessing the power purchase to be allowed for an estimated sales projection. (3) The Regulation issued by the CEA envisages installation of Static Meters for all consumers. The Static Meters will help in reduction of tampering,

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identifying various parameters, downloading of data, introduction of time of the day tariff etc. besides reducing billing errors. (4) It is also necessary to install Availability Based Tariff (ABT) compliant meters for the purpose of measurement of real power and reactive power at interface points in intervals of 15 minutes. The ABT compliant meters are essential for the purpose of proper grid management, sending commercial signals for ramping up / backing down of generations and increase / decrease of load.

2.29.4 Cost of Supply : (1) The Cost of Supply depends on the power purchase cost and the distribution cost. Currently, the power purchase cost of TNEB consists of power purchased from regulated entities namely Central Public Sector Undertakings like NTPC etc., TNEBs own generating stations and bilateral power purchase through traders and through power exchange. The more the regulated power, the lower the average power purchase cost. With the commissioning of new power stations, power purchase from open market will gradually be reduced and more and more regulated power will be available to TNEB. (2) The National Tariff Policy (NTP) envisages that the tariff for consumers should be within + 20% of the average cost of supply. It can be seen from the Tariff Schedule that most of the consumers pay tariff within this range except for huts and agricultural consumers. A proper view of tariffs for these categories can be taken only when their actual consumption is known. Even after ascertaining the consumption and setting up of the tariff on realistic basis, if the policy of free power is to be continued, the same may have to be provided by the Government by way of subsidy. The same logic is true for domestic consumers who are subsidised at present. As already stated, in the long run, a healthy electricity utility is necessary for serving the interests of the consumers.

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2.29.5 Generation / Power Purchase : (1) Normative parameters are fixed by the Commission for various power stations owned by the TNEB. Based on the details furnished by the

TNEB, the Commission had relaxed the Station Heat Rate (SHR) and auxiliary (AUX) consumption for some of the power stations. The

Commission observes that the procurement of domestic coal and imported coal is based on the coal linkages provided for these power stations and also the necessity for importing coal as prescribed by the Central Government to meet the shortages. (2) It should be noted that the State has a huge installed capacity of about 5000 MWs of wind turbines, mostly owned by the private generators. These Wind Energy Generators (WEG) operate in two ways : while some of them supply power directly to the TNEB, others have banking and wheeling arrangement with the TNEB for their captive use. Orders of the Commission govern these transactions. Separate

The power

purchase by TNEB is decided by the Commission in this Order commensurate with the estimated sales forecast and the estimated Transmission and Distribution (T&D) losses. (3) After accounting for the power availability from the Central Public Sector Undertakings, TNEBs own generating plants, IPPs in Tamil Nadu, wind generators, captive power plants etc., the additional power requirement arising out of mismatch in demand and supply is being allowed by way of bilateral trade, drawal from the grid through UI mechanism as per orders of CERC etc. The surplus power available with the TNEB is accounted for as bilateral sale / supply to the grid through UI mechanism.

2.29.6 Tariff categorization Tariff categorization is dealt with in the tariff schedule.

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2.29.7 Demand Side Management:(1) To meet the demand-supply position in the short term, the Demand Side Management (DSM) is an effective tool. (2) It is also a cheaper option as compared to capacity addition. (3) It further enables in reducing Carbon emission and also defers investment to subsequent years. (4) The importance of Energy Conservation and Demand Side Management is well understood by the utility as well as the consumers. (5) The National Electricity Policy envisages that adoption of energy efficiency and Demand Side Management would lead to potential energy savings. (6) It is necessary to create awareness among users for promoting Energy Conservation and Demand Side Management. (7) Efficiency improvements need to be carried out in all sectors viz. domestic, agriculture and industry. (8) While industry is expected to adopt quickly to Energy Conservation and Demand Side Management, the domestic and agricultural sector needs to be motivated to adopt these measures. (9) Awareness has to be created for using Star Labelled appliances which may cost more but would pay back by way of energy savings. (10) The Commission is of the view that the utility should direct the field staff to create such awareness among the consumers. (11) The Government of Tamil Nadu has notified the Chief Electrical Inspector of Government of Tamil Nadu as a nodal agency for Energy Conservation. The functions of the Electrical Inspectorate are different in nature. (12) Instead, the Tamil Nadu Electricity Development Agency (TEDA) could be designated as nodal agency for the purpose of Energy Conservation, who can work in tandem with TNEB for effectively implementing Energy Conservation and Demand Side Management. (13) Use of CFLs needs to be increased with adequate arrangement for disposal of the unserviceable CFLs.

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(14) Awareness programmes could be conducted in various schools on a regular basis for inculcating Energy Conservation among children. (15) As regards agricultural sector, usage of the pumpsets needs to be more efficient and the entire pumping including the piping needs to be designed in such a way that energy spent in pumping is minimized. (16) Sprinkler Irrigation System on which extensive research is being done all over the world including India could be adopted for the purpose of irrigation. This may help in conserving both electricity and water. (17) As far as the industrial sector is concerned, it may be appropriate to conduct energy audits in individual units and approved ESCOs could be inducted for conducting such energy audits and improvements in the processing industry could be undertaken through different models available. (18) The investment for efficiency improvement could be done by the industry itself depending upon the economics or alternative mechanisms are available wherein ESCOs may invest and improve the efficiency and recover the cost incurred through the savings in electricity bills. (19) Promotional effects are required to be done by the utility to motivate the end-users of electricity to carry out such studies and improvements. (20) The Commission would not hesitate in granting adequate funds for such purpose if a proposal is received from TNEB. (21) Provisionally, the Commission allows Rs.10 Crores in this ARR for the purpose of carrying out the activities of Energy Conservation and Demand Side Management.

2.30

Commissions Suggestions

2.30.1 CREATION OF A REGULATORY CELL IN TNEB (1) TNEB is a major utility handling more than 10,000 MW of power and supplying over 200 million units of electricity per day. It has to take an active part in various proceedings before the Central Electricity Regulatory Commission (CERC) with regard to power purchase from

50

Central Sector Utilities as well as in the fixing of transmission service charges in respect of Power Grid Corporation of India Limited (PGCIL). TNEB is also required to interface with the TNERC right from the stage of regulation, tariff petition, dispute resolution petitions and other

miscellaneous petitions involving disputes between the licensee and generating companies. There are a large number of wind energy generators and captive power plants. They are also consumers of the TNEB. To effectively project the view points of the TNEB before the TNERC and CERC, this Commission is of the opinion that creation of a Regulatory Cell within TNEB and imparting proper training to those officials will be to the best advantage of the Board. As and when the TNEB is unbundled such a Regulatory Cell may have to be created in both the TANGEDCO and TANTRANSCO. Almost all the utilities in India starting from NTPC, PGCIL and various Electricity Boards and their successor entities after unbundling have established a Regulatory Cell in their organisations. The TNEB and their successor entities are advised to take appropriate action to create such a Regulatory Cell. The

Commission may be informed of action taken within a period of six months.

2.30.2 AGRICULTURE (1) The Commission in the Tariff Order of 2003 has prescribed a tariff of Rs.250 per HP per annum for agricultural connections. Wherever the

agricultural supply is metered, the applicable tariff is 20 paise per kWh. Besides the LT agricultural connection, the TNEB has also provided

service connection to a group of farmers for the purpose of lift irrigation, the tariff for which was fixed at 50 paise per kWh. The Government

extended supply of free power to all agriculturists and accordingly granted subsidy in respect of all agricultural connections at LT level. consumers at HT level were not provided with subsidy. subject matter of a Writ Petition CMA No. 931/2004 However,

This was the which was

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remanded to the Commission by the High Court of Madras. Since the Commission has fixed tariff to all the agricultural consumers below the cost for LT and HT consumers, the Commission did not provide any relief to the HT consumers for the back period. Agricultural consumers provided with HT connection were advised to approach the Government for subsidy. It is understood that there are only 11 such cooperative sangams which receive HT supply for Lift Irrigation. (2) During the hearing in various centres, a view was expressed by a group of agricultural consumers that earlier water was being supplied free of cost through irrigation canals. However most of the agriculturists now depend on well irrigation and water level having gone down, electricity should be provided free of cost for pumping water, akin to water being made available free. The Commission observes that in some of the States like Maharashtra, Water Regulatory Authority has already been set up and regulations are being made by them for efficient use of water including pricing of the same for various applications. A view was also expressed that the subsidy provided for electricity consumers is around 2% of the Budget in Tamil Nadu and there should be no objection in raising the subsidy to 4% or 5% of the Budget. (3) The Commission has been advocating measuring of electricity supplied to various consumers. In fact, Section 55 of the Electricity Act envisages The specification of the

supply of electricity through correct meters.

meters has already been laid down by the Central Electricity Authority way back in May 2006. Extension of time was sought from the

Commission for providing meters for all service connections which has been granted for a period of 3 years from 2009. The Commission has also directed the TNEB to install meters on all feeders so that energy audit could be conducted. Besides, an estimate of the agricultural consumption was also to be made by a scientific process. The TNEB has indicated in its petition that an expert was appointed and he has conducted some studies and submitted a report which is known as Raheja Report. Time

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and again it has been reported that they had difficulty in Run time error and accordingly the matter did not progress further. The Commission is unable to accept this explanation of Run time error. Sincere efforts should have been made to assess the energy supply in various feeders and the same should have been compared with the energy for which revenue has been realized and to work out the transmission and distribution losses as well as commercial losses separately. This has not happened. In the

absence of such an exercise, all unmetered consumption as well as the losses are estimated based on certain assumptions. Until and unless the assumptions are clearly validated by a third party, the Commission finds it difficult to accept the figures furnished by the Petitioner. It should also be noted that a wrong estimation of AT&C losses would underestimate the power purchase requirement and the fallacy of such an estimate would be seen at the end of the year, when the actual power purchase is more than the estimated power purchase. It will be relevant to refer to Government of Indias Tariff Policy with regard to power purchase which is extracted below. 8.2.1 The following aspects would need to be considered in determining tariffs:(1) All power purchase costs need to be considered legitimate unless it is established that the merit order principle has been violated or power has been purchased at unreasonable rates. The reduction of Aggregate

Technical & Commercial (ATC) losses needs to be brought about but not by denying revenues required for power purchase for 24 hours supply and necessary and reasonable O & M and investment for system upgradation. Consumers, particularly those who are ready to pay a tariff which reflects efficient costs have the right to get uninterrupted 24 hours supply of quality power. Actual level of retail sales should be grossed up by normative level of T & D losses as indicated in MYT trajectory for allowing power purchase cost subject to justifiable power purchase mix variation (for example, more energy may be purchased from thermal generation in the

53

event of poor rainfall) and fuel surcharge adjustment as per regulations of the SERC.

(4) From the above it could be seen that the actual level of retail sale needs to be grossed up by normative level of T & D losses for allowing power purchase costs. It is therefore necessary to properly estimate the AT & C as well as T & D losses. Till such time 100% metering is done and AT&C / T&D losses are calculated based on actual meter reading, the Commission directs that the TNEB shall carry out an exercise to arrive at proper estimate of AT & C and T & D losses within a period of six months. (5) Now coming back to the consumption in case of unmetered connections, till such time meters are installed for the purpose of carrying out estimate, feeder metering becomes important. It has been reported by TNEB that all feeder meters have been installed. The data shall be collected from all Feeders/Distribution transformers and energy audit shall be carried out at various voltage levels to properly estimate the transmission losses and the distribution losses which will also be necessary to establish proper bench mark for the transmission loss and distribution loss separately. For the present tariff exercise, the Commission is guided by the normative AT & C loss level prescribed. The TNEB in their petition have indicated a

constant AT & C loss of 18%. They explain that the loss level is maintained at 18% in view of the fact that they are undertaking huge electrification work and also there is an increase in the number of consumers. This needs to be duly supported by data. This is precisely the reason why the Commission is suggesting installation of meters in all feeders/distribution transformers and carrying out energy audit. This

exercise, if done before the tariff exercise will facilitate proper estimation of AT & C and T & D and will also facilitate providing necessary allowances for the same and also to allow power purchase cost covering all reasonable expenses.

54

(6) The figures furnished by the TNEB for 2009-10 indicate that the total energy injected into the grid was 69,144 MU. After providing for transmission and distribution loss at 18%, the energy available for sale was 56,698 MU. The energy consumed by sectors other than agriculture was 44,780 MU. By elimination, the energy consumed by the agriculture sector should be 11,918 MU. The average cost of supply of the Board during 2009-10 was Rs.4.89 per unit. Therefore, the realisation from the agriculture sector should have been Rs.5,828 crores, against which the subsidy received from the Government for 2009-10 was Rs.267 crores. (7) In the absence of metering of agricultural consumption it has not been possible to determine the consumption in each service connection. The total capacity of agricultural connection indicated by the TNEB is 1.07 crores HP. This is a gross under estimation. Suffice to say that the subsidy towards agricultural consumption determined on the basis of the capacity indicated by the TNEB is vastly inadequate to cover the actual expenditure incurred by the TNEB. The gap between the expenditure incurred by the TNEB and the subsidy paid by the Government is vastly responsible for the poor financial health of the TNEB. This is a matter which the Government and the TNEB should sort out for restoring the financial health of the TNEB. It is pertinent to note that the Government of Andhra Pradesh offered a subsidy of Rs.2146 crores for the agricultural sector during 2009-10 against the total subsidy of Rs.3486 crores paid to the utilities. (8) It is seen from the latest tariff order of APERC issued on 22-7-2010 that the Government of Andhra Pradesh have committed to provide total subsidy to the extent of Rs.3652 crores under Sec.65 of the Electricity Act 2003. Andhra Pradesh and Tamil Nadu are identically placed with regard to the demand for power and energy, consumer mix etc. (9) In the absence of metering of agricultural consumers , it is necessary for the TNEB to measure their actual load and consumption so that higher subsidy is available to TNEB.

55

2.30.3 Employees cost Terminal benefits (1) The tariff petition filed by TNEB includes terminal benefits for the control period besides salary, allowances etc. The Commission addressed TNEB in August 2008 (Ref. No.D.1208/08, dated 25-08-2008) regarding payment of pension and gratuity. The Commission observed that while pension contribution was nominal, pension payments were phenomenal and the deficits were met from the revenue. Similar was the case with regard to gratuity payment. The Commission observed in that letter that pension and gratuity payment to the extent of Rs.1000 crores per annum is paid on due basis instead of creating adequate reserve for the same. Commission directed The

the TNEB to conduct a study and assess the

probable amount of pension liability and submit a report at an early date. The Commission has not received any response from the TNEB in the matter so far. (2) The terminal benefits indicated for various years of the control period by the TNEB is as follows: 2010 11 2011 12 2012 -- 13 - Rs. 1209.98 crores - Rs. 1258.37 crores - Rs. 1308.71 crores

(3) The terminal benefits account for almost 40% of the employees expenses. This needs to be examined in the context of regulatory

practices to be adopted.

(a) Charging of terminal benefits in tariff will result in present cost being passed on to the future consumers. (b) In most cases a Corpus is created for meeting the terminal benefits of employees. The corpus should have adequate balance so that it will be able to meet the requirements of terminal benefits of employees. For this purpose an actuarial study may have to be carried out to

56

decide the amount to be credited in the corpus so that the quantum of fund requirement for the corpus maybe arrived at properly. The

Commission would also like to be guided by the Transfer Scheme to be issued by Government of Tamil Nadu on unbundling of the TNEB. The TNEB is directed to examine this issue and submit a proposal for the same to the Commission. within a period of six months. This exercise should be carried out

57

CHAPTER 3 ENERGY REQUIREMENT 3.1 Sales Forecast

3.1.1 Regulation 71 (Sales Forecast) of Tariff Regulation stipulates the following: (i) The accurate projection of category-wise sales is very essential for the assessment of energy input requirement so as to determine the quantum of generation and quantum of energy to be purchased for the correct assessment of revenue requirement for generation and power purchase. (ii) The TNEB, Distribution Licensee shall formulate long-term demand forecast as stipulated in sub-clause (4) of clause 6 of The Distribution Code and get the forecast approved by the Commission. (iii) The Licensee may adopt a suitable methodology like CAGR to arrive at the category-wise sales for the Base Year i.e. for the Current Year. (iv) The Licensee shall forecast demand and sale of electricity for different categories of consumer in his area of supply for ensuing year, and for a period of three years taking into account the long term demand forecast already approved and also subsequent changes in situation, if any. (v) The Commission shall examine the forecast for reasonableness based on growth in number of consumers and consumption of electricity in the previous years and anticipated growth in the next year and any other factor that the Commission may consider relevant and approve sale of electricity to consumers with such modification as deemed fit. 3.1.2 The TNEB submitted on 25 -08-2005, Load and Demand forecast for the period from 2005-06 to 2011-12 and for 2016-17 (end of 12th Plan) and 2021-22 (end of 13th Plan period) based on CAGR for nine years previous to 2005-06 to comply with the provisions in the Tamil Nadu Electricity Distribution Code. The TNEB had not furnished load and demand forecast subsequently taking into account the subsequent changes in the consumption pattern etc., prior to filing the petition.

58

3.1.3 The category-wise Energy and Demand Projections for 2007-08 to 201112 furnished by TNEB based on CAGR for 9 years from 1995-96 to 200405 were as below :
Table 2: Demand and energy forecast by TNEB upto 2011-12
Tariff High Tension Category 2007-08 Sales MU % increa se I-A Inds. Traction II-A Rec. Edu. Inst., Public Worship etc. III Commercial others IV V HT Total Lift Irrigation Societies Puducherry 0 427 13919 6.75 3.42 0 456 14397 6.79 3.43 0 486 14892 6.58 3.44 0 518 15405 6.58 3.44 0 553 15939 6.76 3.46 and 1038 2.17 1060 2.12 1083 2.17 1106 2.12 1129 2.08 769 6.81 821 6.76 877 6.82 937 6.84 1001 6.83 Incl. Rly. 11685 3.20 12060 2008-09 Sales MU % increa se 3.21 12446 2009-10 Sales MU % increa se 3.20 12844 2010-11 Sales MU % increa se 3.20 13256 2011-12 Sales MU % increa se 3.21

Low Tension I-A Domestic 04) I-B II-A Huts Street Lights & Water Supply II-B Rec. Edu. Inst., Public Worship etc. III-A(1) III-A(2) III-B IV Cottage Industries Power Looms Industries Agriculture and HT Lift Irrigation V Commercial Others LT Total Total 35390 49309 7.41 6.25 38030 52427 7.46 6.32 40896 55788 7.53 6.41 44002 59407 7.59 6.49 47372 63311 7.66 6.57 and 3252 5.93 3444 5.90 3648 5.92 3864 5.92 4093 5.93 340 984 4389 11425 12.96 12.84 6.01 4.64 383 1111 4652 11955 12.65 12.91 5.99 4.64 433 1254 4932 12511 13.05 12.87 6.02 4.65 488 1416 5228 13092 12.7 12.92 6 4.64 551 1598 5542 13700 12.91 12.85 6.01 4.64 381 7.02 408 7.09 436 6.86 467 7.11 500 7.07 231 1467 8.45 8.99 251 1598 8.66 8.93 273 1741 8.76 8.95 297 1897 8.79 8.96 323 2067 8.75 8.96 (and 12921 10.12 14228 10.12 15668 10.12 17253 10.12 18998 10.11

Notified tariff from 03-

3.1.4 The TNEB in para 1.2 of the Petition have stated that the energy requirement of the State has been growing at a rate of 8-10% every year 3.1.5 The TNEB has made the following consumer category wise demand sales projections in the ARR:

59

Table 3 : Demand sales projections by TNEB up to 2012-13

Tariff Category High Tension 2007-08 Sales % MU incre 2008-09 Sales % MU incre 2009-10 Sales % MU incre 2010-11 Sales % MU incre 2011-12 Sales % MU incre 2012-13 Sales % MU incre

ase
I-A II-A II-B III IV V Inds. Incl. Rly. Traction Rec. Edu. Inst. Public Worship etc. Commercial and others Lift Irrigation Societies Supply to Puducherry Supply to other states 15434 872 2 1408 9 393 210 18328 12575 8.89 4.50 11.20 6.99 0 14.38 28.57 5.93 14247 885 3 1431 9 373 193 17141 13387

ase
-7.69 1.49 50.00 1.63 0.00 -5.09 -8.10 -6.48 6.46 16562 936 4 1514 11 420 0 19447 13709

ase
16.25 5.76 33.33 5.80 22.22 12.60 100.00 13.45 2.41 17942 998 4 1671 12 445 0 21072 14524

ase
8.33 6.62 0.00 10.37 9.09 5.95 19438 1064 4 1844 14 471 0 8.36 5.94 22835 15578

ase
8.34 6.61 0.00 10.35 16.67 5.84 21058 1135 4 2034 15 499 455 8.37 7.26 25200 16309

ase
8.33 6.67 0.00 10.30 7.14 5.94

HT Total Low Tension I-A Domestic (and Notified tariff from 03-04) I-B Huts I-C Bulk Supply II-A Public Lighting & Water Supply II-B Rec. Education Inst. Etc. II-C Places of Public Worship III-A(1) Cottage and Tiny Industries III-A(2) Power Looms III-B Industries IV Agriculture V Commercial and Others Temporary supply LT Total Total

10.36 4.69

190 3 973 335 68 264 672 4585 11107 3720 11 34503 52831

2.70 0 -24.86 6.69 13.33 1.54 4.51 2.94 4.77 7.30 0 3.53 5.33

195 12 1213 595 115 610 799 3800 11499 3660 39 35924 53065

2.63 300.00 24.67 77.61 69.12 131.06 18.90 -17.12 3.53 -1.61 254.55 4.12 0.44

216 3 1043 357 74 284 720 4924 11918 3992 11 37251 56698

10.77 -75.00 -14.01 -40.00 -35.65 -53.44 -9.89 29.58 3.64 9.07 -71.79 3.69 6.85

229 4 1077 471 78 416 749 4912 12870 4329 19 39679 60751

6.02 33.33 3.26 31.93 5.41 46.48 4.03 -0.24 7.99 8.44 72.73 6.52 7.15

243 5 1111 620 83 610 779 4902 14116 4695 33 42775 65610

6.11 25.00 3.16 31.63 6.41 46.63 4.01 -0.20 9.68 8.45 73.68 7.80 8.00

258 6 1147 817 88 895 811 4893 15245 5092 56 45617 70817

6.17 20.00 3.24 31.77 6.02 46.72 4.11 -0.18 8.00 8.46 69.70 6.64 7.94

3.1.6 The total demand projection furnished by TNEB in 2005 and sales projection now furnished in the Tariff petition are compared with the total consumption as per the forecast in 17th Electric Power Survey are as below:
Table 4 Comparison of demand projection by TNEB with 17 Electric Power Survey projection
th

Sl.No.

Year

1 2 3 4 5 6

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Demand forecast furnished in 2005 (in MU) 49309 52427 55788 59407 63311

Projection in Tariff petition (in MU) 52831 53065 56698 60751 65610 70817

Total consumption as per 17th EPS (in MU) 50898 55536 60762 66786 73703

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3.1.7 The forecast in the 17th power survey is on the higher side. 3.1.8 The TNEB has stated the following in the tariff petition: The load forecast takes into account underlying economic growth and other forces that affect electricity consumption in the major categories of load. An attempt has been made to refine the forecasts in the wake of economic outlook for the state and check that they are consistent with the likely movements of the principle macroeconomic parameters of demand. The basic parameters underlying load forecast are: Sales data up to FY 2008 has been used for analysis Managing agricultural demand, and Rationalisation of tariffs which include incentive structure for HT consumers, increase in tariffs at inflationary level for subsidizing categories and increase in tariffs for subsidized categories including agriculture. 3.1.9 However, it is seen from the projection and the tariff proposed that the above parameters have not been adopted. 3.1.10 The TNEB has furnished the following reply to the Commissions observation that the demand and energy forecast have not been supported with any detailed report to indicate the methodology, CAGR, comparison with national level forecast under power survey etc., 1. The demand and energy forecast of HT and LT services (various tariff) have been arrived at in respect of 2010-11, 2011-12 and 2012-13 based on the average growth, rate of consumptions as recorded in earlier years namely 2006-07, 2007-08 and 2008-09. The average growth rate adopted in respect of HT and LT are furnished below: HT category IA II A III IV V Percentage 8.33 6.66 10.35 9.52 5.96

61

In respect of LT average growth rate for IA , II A , II B, IIIA-1, III A 2, V and VI are 6.60%,3.20%.31.70%,46.60%, 4.00%,8.40% and 70.70% and these have been adopted. 2. Demand and energy forecast for 2009-10 have been arrived at based on the proportionate consumption made in 2007-08 only since it is in R & C period In case of category I B and IIC growth rate of 6% has been adopted 3.1.11 Perusal of the sales projection show the following: (i) The sales for 2007-08 have been taken as per audited accounts and for 2008-09 as per preliminary annual accounts. There is an overall growth of 0.44% only from 2007-08. There is negative growth in the consumption by industrial consumers both HT and LT. However the sales for 2009-10 has been adopted at a level nearer to the level as adopted for BE 2009-10, with an increase of 16.25% for HT industrial consumers and 29.58% for LT consumers. The TNEB has stated that the sale for 2009-10 has been arrived at in proportion to the sales in 2007-08 (without R & C measures). The overall growth for ensuing years are as follows:

a). 2010-11 b). 2011-12 c). 2012-13

- 7.15% over 2009-10 - 8.00% over 2010-11 - 7.94% over 2011-12

(ii) As per Regulation 71 (5) of TNERC Tariff Regulation, the Commission shall examine the forecast for reasonableness based on growth in number of consumers and consumption of electricity in previous years. The details of consumers and consumption from 2003-04 were examined and it is seen that growth both in the number of consumers and consumption are not uniform. The percentage of increase in number of consumers and sales from 2003-04 (since previous tariff revision) to 2008-09 were as below:

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Table 5 Percentage of increase in number of consumers and sales from 2003-04 to 2008-09

(Year to year percentage increase / decrease)

Sl. No. Consumer category Consu mer I 1. HT Industries IA 0.23 7.90 8.40 15.95 0.39 7.40 15.83 21.50 6.37 11.2 0 2 Recog. Edu. II A 13.26 14.41 6.32 19.36 2.32 15.12 3.54 11.49 1.64 6.99 1.35 1.49 4.04 -7.69 Sales Consu mer Sales Consu mer Sales Consu mer Sales Consu mer Sale s Cons umer Sales Tariff 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Institutions 3 4 Public Lighting Commercial II B III 50 -5.04 0 -19.74 0 2.80 0 7.10 0 2.27 0 9.18 33.33 1.24 0 15.05 00 9.98 0 14.3 8 5 II 1 2 3 4 5 Lift Irrigation LT Domestic Huts Bulk Supply Public Lighting Recog. Edu. IA IB IC II A II B 2.25 -0.39 4.05 -10.86 7.31 -30.29 9.98 4.22 2.48 0.97 14.69 3 1.66 -0.45 4.05 0 5 11.34 4.49 3.93 18.47 2.93 -22.56 14.23 1.11 0 3.97 6.79 8.14 2.70 4.99 7.47 -1 8.89 1.65 50 9.84 10.95 6.00 6.33 25.94 20.50 0.31 4.50 2.70 0 -24.8 6.69 0.45 7.48 -9.12 0.18 3.21 6.46 2.63 300 24.66 77.61 IV 9.09 -33.33 0 16.67 0 0 0 28.57 0 0 0 0 25 6.45 50 1.63

Institutions 6 Public Worship 7 Cottage & III (1) III (2) 9 10 11 Industries Agriculture Commercial III B IV V 2.84 1.58 5.29 3.25 6.22 5.60 0.18 2.02 6.83 9.17 1.83 8.94 -8.70 1.79 6.53 2.91 0.41 2.95 0.97 3.22 4.88 A 34.84 17.75 15.36 7.94 26.55 8.86 19.44 11.31 13.59 8.21 19.68 3.34 1.58 5.25 2.94 4.77 7.30 2.58 1.67 6.54 -17.12 3.53 -1.61 4.23 4.48 A 30.10 II C 63.05 158.8 2 14.36 5.17 9.77 -15.72 2.54 17.86 4.55 0.69 6.52 106.0 8 3.55 7.44 7.95 22.45 8.56 13.3 3 1.54 15.0 2 10.9 5 0.50 18.94 131.08 69.12

Tiny Industries 8 Power Loom

(iii) The increase in consumption was not in proportion to the increase in consumers. 3.1.12 The projections made by the TNEB were examined for reasonableness with reference to the following (1) Average growth rate for the period from 2003-04 to 2008-09. (The TNEB has arrived at the average growth rate for the period from 2006-07, 200708 and 2008-09) (2) CAGR computed for the period from 2003-04 to 2008-09 (3) Consumer category wise average consumption per consumer 63

(4) Latest actuals in 2009-10

3.2

Commissions sales projections:

3.2.1 HT Industrial Consumers 3.2.1.1 In the petition (page 47), the TNEB has given the following approach for development of the load forecast for industrial load (low, medium and High). The load would depend upon the capital formation as well as the growth in manufacturing sector. The effect of captive generation is also a major parameter in determining the future demand growth in industrial HT sector. Past trends have shown small increase YOY growth rate in shown

industrial HT demand, though industrial LT demand has reasonable

growth. With measures to retain HT clients and neutralize

the impact of captive generation, HT demand is expected to grow at low YOY rate . 3.2.1.2 However, the actual consumption from 2003-04 to 2008-09 shows a higher YOY growth rate in HT industrial demand. The average increase for this period was 9.67% even taking into account the negative growth rate achieved in 2008-09. There was dip in sales in FY 2009 due to the R&C measures introduced. 3.2.1.3 The same situation prevailed in 2009-10 also. But, the TNEB has projected sales of 16562 MUs for 2009-10 (with 16.25% increase). The TNEB has reported that sales for 2009-10 was arrived at based on the proportionate consumption in 2007-08 due to implementation of R & C measures in 2008-09 3.2.1.4 The actual consumption during the year 2009-10 upto February 2010 was 13121 MU. The sales for 2009-10 are fixed at 14820 MUs as

against 16562 MUs.

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3.2.1.5 The TNEB has projected an increase of 8.33 % (based on average increase from 2006-07 to 2008-09) over the sales for 2009-10 to arrive at the estimated sales for 2010-11. 3.2.1.6 In view of continuous R&C measures, the projected sales for the control period is fixed with 8.33% increase over the sales of 14820 MUs fixed for 2009-10. 3.2.1.7 The projections for the control period (2010-11, 2011-12 and 2012-13) shall be as below.
Table 6 Sales projections for HT industrial consumers by TNERC

Tariff Industries (in MU)

2009-10 16562

TNEB
2010-11 17942 2011-12 19438 2012-13 21058 2009-10 14820

TNERC
2010-11 16055 2011-12 17392 2012-13 18841

3.2.2 HT - Recognized Educational Institutions etc. 3.2.2.1 The TNEB has projected growth in sales to HT Tariff IIA consumers at YOY growth rate of 6.6% for the ensuing year FY 2011, FY 2012 and FY 2013 over the sales in FY 2010. 3.2.2.2 The TNEB has projected a sale of 936 MU for 2009-10 with an increase of 5.76 % over the sale for 2008-09. 3.2.2.3 The actual consumption upto February 2010 was 882 MU and hence, the projected sale for 2009-10 is fixed at 970 MU. 3.2.2.4 The projections for the control period is fixed with 6.60% increase over the sale of 970 MU fixed for 2009-10.
Table 7 Sales Projections for HT Recognized educational institutions

TNEB Parameter
At the average rate 6.6%
2009-10 MU 936 2010-11 998 2011-12 1064 2012-13 1135 2009-10 970

(in MUs) TNERC

2010-11 1034 2011-12 1102 2012-13 1175

65

3.2.3 HT Actual places of public worship 3.2.3.1 There are 5 services in the category and the TNEB has projected a sale of 4 MUs for all the 3 years. The actual consumption in 2009-10 upto February 2010 is 4 MU. Hence the projection by TNEB is approved.

3.2.4 HT Commercial 3.2.4.1 The TNEB has stated that they have adopted the following approach for development of the load forecast for commercial category. The Commercial load growth is expected to grow again with the increase in population as well as increased spending. Tamil Nadu primarily being a service economy (to a large extent) commercial demand growth is expected to continue growing at an increasing YOY rate during the projection period. 3.2.4.2 The TNEB has projected sales with YOY increase at 10.35 % for the ensuing years 2010-11, 2011-12 and 2012-13. There were dips in sales during 2008-09 and 2009-10 and this decrease might be due to R&C measures. 3.2.4.3 The actuals upto February 2010 was 1456 MU and hence, the sale for 2009-10 is fixed at 1600 MUs (based on sales in February 2010). 3.2.4.4 The average increase in sales during the period from 2004-05 to 200809 was 9.47% (The increase in sales for 2003-04 was (-) 19.74% and hence excluded to arrive at the average.) 3.2.4.5 Five years CAGR for this period works out to 9 %. 3.2.4.6 The projection for the control period is fixed with 9% increase over the revised sales for 2009-10.
Table 8 Sales Projections for HT Commercial Parameter 2009-10 CAGR 9% (in MU) 1514 TNEB 2010-11 2011-12 1671 1844 TNERC 2010- 11 2011-12 1744 1901

2012-13 2034

2009-10 1600

2012-13 2072

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3.2.5 HT Lift Irrigation 3.2.5.1 There are 12 consumers. No increase in Number of consumer has been projected 3.2.5.2 Actual sales from 2003-04 to 2008-09 and for estimation / projection from 2009-10 to 2012-13 are as below :
Table 9 Actual sales and Projections for HT Lift Irrigation 200304 MU 6 200405 7 200506 7 200607 9 200708 9 200809 9 200910 11 201011 12 201112 14 201213 15

3.2.5.3 The TNEB has estimated a sale of 11 MU for 2009-10. The actual sales upto January 2010 was 6 MU. Hence, the Commission fixes the sales at 9 MU for each year of the control period.

3.2.6 Supply to Puducherry 3.2.6.1 The Tariff petition filed by TNEB includes sale of power to the Union Territory of Puducherry and the projection for various years are as follows: (a) 2007-08 (b) 2008-09 (c) 2009-10 (d) 2010-11 (e) 2011-12 (f) 2012-13 393 MU 373 MU 420 MU 445 MU 471 MU 499 MU

3.2.6.2 The Commission desired to know the basis on which power is being supplied to Puducherry and sought details regarding agreement if any entered into between the two States. The TNEB has not been able to produce any agreement for sale of power to Puducherry. In this backdrop the Commission had examined the tariff orders issued by the Commission in 2003.

67

3.2.6.3 The position taken by Government of Puducherry during the earlier tariff determination exercise was that the tariff for supply of energy to Puducherry should be as per the Tamil Nadu Revision of Tariff Rates on Supply of Electrical Energy Act, 1978 and the supply shall be charged at the rates supplied by NLC to the TNEB plus wheeling charge at 10 Paise per KWh plus 4% on the energy wheeling towards transmission loss. The State of Puducherry also disputed the jurisdiction of the TNERC to decide the tariff for Puducherry. The TNEB had expressed a view that the agreement between TNEB and NLC is a bilateral agreement and the Government of Puducherry is not a party to this agreement. Since the cost of supply at the HT end worked out to 303.69 paise, they proposed to continue charging Puducherry @ Rs.3.00 per kWh under HT Tariff V. The Commission maintained status quo and continued the then prevailing tariff of Rs.3 per kWh. 3.2.6.4 Since the Joint Electricity Regulatory Commission for the State of Goa and Union Territory of Puducherry had issued an order on ARR and Retail tariff for the electricity department, Government of Puducherry for the financial year 2009-10 on 5-2-2010 the Commission had examined that order too and the relevant portion with reference to sale of power by TNEB to Puducherry is extracted below:
In respect of purchase of power from TNEB the EDP has submitted that initially the power availed from TNEB was charged at the rate paid by TNEB to NLC plus wheeling charges. The TNEB has revised the tariff to Rs.3.00per kwh with effect from 01/12/2001 treating EDP as a HT consumer. The EDP has challenged this decision by filing a petition before Honble TNERC. The Honble TNERC concluded that the sale of power between EDP and TNEB was in the nature of interstate sale of power and EDP cannot be treated as a HT consumer and ordered to maintain status quo. The EDP has challenged this in the Honble High Court of Judicature at Madras and stay was granted and the Hon High Court directed payment to TNEB at the rate charged by NLC plus wheeling charges. The EDP made the payment accordingly. The main issue is yet to be decided.

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3.2.6.5 The Commission would like to observe that in the absence of firm sale contract between TNEB and the Government of Puducherry and with the ever increasing sale of electricity to Puducherry by the TNEB, a situation is being created which has resulted in the TNEB subsidizing the electricity consumers of Puducherry at the expense of electricity consumers of Tamil Nadu. Currently, the TNEB itself is facing an acute shortage of power and has been purchasing power in the open market in the range of Rs. 5 to 7 per unit. Whereas the sale to Puducherry is at the rate of Rs.1.94 per unit. TNEB needs to protect the electricity consumers of Tamil Nadu.

3.2.7 LT DOMESTIC 3.2.7.1 The TNEB has projected sales for the control period as detailed below:
Table 10 Sales projections for LT domestic by TNEB

Sl. No. 1. 2. 3. 4. 5.

Details No. of Consumers Consumption in MU % increase in No. of Consumers % increase in Consumption Specific Consumption (Consumption/Consumer)(units)

2009-10

2010-11

2011-12

2012-13

14762913 15806712 16924311 18120929 13709 14524 15578 16309 7.07 7.07 7.07 7.07 2.40 928.611 5.94 918.850 7.26 920.451 4.69 900.009

3.2.7.2 The past trend in consumption pattern is as given below:

Sl. No. 1. 2. 3. Details No. of Consumers Consumption in MU % increase in No. of Consumers % increase in Consumption Specific Consumption Table 11 Past trend in consumption of LT domestic 2003-04 2004-05 2005-06 2006-07 2007-08 11181950 9719 7.31 11459503 9675 2.48 11974293 11052 4.49 12948941 12034 8.14 13726048 12575 6 2008-09 13788042 13387 0.45

4. 5.

9.98 869.168

(-)0.45 844.277

14.23 922.977

8.88 929.342

4.50 916.141

6.45 970.914

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3.2.7.3 There is no uniform pattern either in the percentage of increase in the number of consumers or in the percentage of increase in consumption. 7.07% growth adopted to project the number of consumer is on the higher side. Also, the increase in (sales) consumption projected also varies for each year and is not supported by any data. 3.2.7.4 The sales projected for 2009-10 is 13709 MU. The available actuals upto January 2010 was 13109 MU. Based on the trend of sales upto January 2010 the sales of 13709 MUs estimated by the TNEB for 200910 is revised as 15535 MUs. 3.2.7.5 The average Consumption per consumer for 2009-10 based on such revised consumption shall be 1052.299 units. 3.2.7.6 The average increase in the number of consumers from 200304 to 2008-09 is 4.81%. 3.2.7.7 The sales for the control period is fixed based on the average consumption per consumer as below:
Table 12 Sales projections for LT domestic by TNERC TNEB 2010201111 12 14524 15578 TNERC 2010201111 12 16282 17065

Details Average consumption per consumer of 1052.299 units (in MU)

200910 13709

201213 16309

200910 15535

201213 17886

3.2.8 LT HUT 3.2.8.1 The TNEB has Projected Sales for the Control Period at a growth rate of 6.1% over the Sales for 2009-10. The number of Consumers for the Control Period has been projected with an increase of 4.51% YOY. The details are as below:

70

Sl. No.

Details

Table 13 Sales projections for LT hut by TNEB Actuals Projections 2007-08 2008-09 2009-10 2010-11 2011-12 1114379 190 2.70 6.33 1197745 195 2.63 7.48 1251809 216 10.77 4.51 1308313 229 6.02 4.51 1367368 243 6.11 4.51

1. 2. 3. 4.

No. of Consumers Sales in MU % increase in Consumption % increase in number of Consumers

201213 142908 9 258 6.17 4.51

3.2.8.2 While reconciling the Subsidy paid for 2008-09 to Hut Consumers, the TNEB has stated that the actual number of Hut Consumers as on 31-032009 was 1228561 as against 1197745 furnished in the ARR. 3.2.8.3 The details of Consumers and Consumption for the period from 2003-04 to 2006-07 are furnished below :
Table 14 Growth of consumers and consumption in Hut category Details 2003-04 2004-05 2005-06 No. of Consumers Consumption (in MU) % increase in Consumption % increase in number Consumers 972564 173 4.22 (-)30.29 981960 180 4.05 0.97 1020509 182 1.11 3.93

Sl. No. 1. 2. 3. 4.

2006-07 1048024 185 1.65 2.69

of

3.2.8.4 The average increase in the number of Consumers from 2004-05 to 2008-09 is 4.28%. The TNEB in their tariff petition have stated that a lot of Consumers from Hut Category would shift to Domestic Category. 3.2.8.5 The Hut Category is unmetered. In the earlier Tariff Petition, the TNEB had submitted that the consumption on account of Hut Service, has been assessed assuming an average of eight hours per day of consumption, for a 40 Watts electric lamp load. 3.2.8.6 In the absence of meter to measure the consumption by Hut Consumers, the actual consumption furnished by TNEB cannot be checked for correctness. 3.2.8.7 Now free Colour Television Sets have been distributed to Hut dwellers and the Commission has ordered in T O 1-95 dated 03-11-2006 the load be increased to 110W i.e, 40W for the bulb and 70W for the T.V. 71

3.2.8.8 The consumption by Hut Consumers is computed based on load and hours of usage with the increase in number of consumers at 4.28% for the control period (No. of Consumers at the middle of the year x 110 W x 8 Hr. x 365 days) as below:
Table 15 Projection of growth of consumers and consumption in Hut category Details No. of Consumers at the end of the year No. of Consumers at the middle of the year Consumption (in MUs) 2009-10 1251809 TNEB 2010-11 2011-12 1308313 1367368 2012-13 1429089 2009-10 1251809 TNERC 2010-11 2011-12 1305386 1361257 2012-13 1419519

1224777

1278598

1333322

1390388

216

229

243

258

393

411

428

447

3.2.9 LT

BULK

SUPPLY

TO

RAILWAY

COLONIES,

PLANTATION

WORKER COLONIES, DEFENCE COLONIES Etc, 3.2.9.1 The TNEB has projected the following Sales for the Control period:
Table 16 Projection of sales by TNEB for LT bulk supply to railway colonies, plantation worker colonies, defence colonies, etc.

Details No. of Consumers Consumption (in MUs) % increase in No. of Consumers % increase in Consumption

2007-08 636 3 25.94 -

2008-09 578 12 (-)9.12 300

2009-10 667 3 15.40 (-)75

2010-11 771 4 15.59 33.33

2011-12 890 5 15.43 25

2012-13 1027 6 15.39 20.00

3.2.9.2 The tariff was introduced from 16-03-2003. The consumption recorded was 2 MUs each in 2003-04, 2004-05 and 2005-06, 3 MUs in 2006-07, 2007-08 and Projections for 2009-10. There was 12 MUs only in 200809. 3.2.9.3 The TNEB has projected YOY increase of 1 MU from 2010-11 to 201112. 3.2.9.4 The Projections made by TNEB is accepted. 72

3.2.10 LT - PUBLIC LIGHTING AND WATER SUPPLY 3.2.10.1 The TNEB has made the following Sales Projection in the Tariff Petition :
Table 17 Projection of sales by TNEB for LT public lighting and water supply Sl. No. 1. 2. 3. 4. Details 2007-08 (Audited Accounts) 416171 973 20.50 (-)24.86 2008-09 (Prelim. Accounts) 416928 1213 0.18 24.67 2009-10 Estimates 475245 1043 13.98 (-)14.01 2010-11 2011-12 2012-13

No. of Consumers Sales in MUs Increase in Consumers (%) Increase in Sales (%)

541718 1077 13.98 3.26

617489 1111 13.98 3.16

703858 1147 13.98 3.24

3.2.10.2 It may be seen that 20.50% increase in number of Consumers has resulted in a reduction in Sales by 24.86%, while 0.18% increase in number of Consumers has resulted in 24.67% increase in Sales. 3.2.10.3 There cannot be such wide fluctuation in the supply to Street Light and Water Supply Works. The data may not be correct. 3.2.10.4 The TNEB has projected YOY growth rate of 13.98% in the number of Consumers and 3.2% in Sales. 3.2.10.5 The Consumers strength and Sales recorded in the previous years are as below :
Table 18 Trend of consumers strength and sales for LT public lighting and water supply

Sl. No. 1. 2. 3. 4.

Details

2003-04

2004-05

2005-06

2006-07

No. of Consumers Sales in MUs Increase in Consumers (%) Increase in Sales (%)

303127 1080 2.25 4.04

312209 1134 2.99 5

321352 1179 2.93 3.97

345362 1295 7.47 9.84

73

3.2.10.6 The TNEB has estimated a Sale of 1043 MUs for 2009-10. The actual Sales upto January 2010 was 1283 MUs. Thus, the Sales for 2009-10 is re-fixed at 1540 MUs as against TNEBs estimate of 1043 MUs. 3.2.10.7 The average increase in number of Consumers from 2003-04 to 2005-06 is 2.72%. The number of Consumers is increased at 2.72% from 200708. 3.2.10.8 The Specific Consumption (Consumption per Consumer) in 2009-10 with the revised number of consumers and consumption will be 3507 units. 3.2.10.9 The sales for the control period is fixed with reference to the specific consumption and increase in number of consumers as detailed below:
Table 19 Projection of sales by TNERC for LT public lighting and water supply

Details No. of Consumers (2.72% over 2007-08) Sales @ Specific Consumption of 3507 units (in MUs)

2009-10 439119 1540

2010-11 451063 1581

2011-12 463332 1625

2012-13 475934 1669

3.2.11 LT - Recognized Educational Institutions etc.

3.2.11.1 The TNEB in the petition have made the following projection :
Table 20 Projection of sales by TNEB for LT recognized educational institutions

Sl. No. 1. 2. 3. 4. 5.

Details No. of Consumers Sales in MU % of increase in No. of Consumers % increase in Sales Sales per Consumer in units

2007-08 108541 335 0.31 6.69 3086.39

2008-09 112027 595 3.21 77.61 5311.22

2009-10 111638 357 (-) 0.35 (-) 40.0 3197.84

2010-11 111250 471 (-) 0.35 31.93 4233.71

2011-12 110863 620 (-) 0.35 31.63 5592.49

2012-13 110478 817 (-) 0.35 31.78 7395.14

74

3.2.11.2 The past trend in sales is as follows :

Table 21 Sales trend for LT recognized educational institutions Sl. No. 1. 2. 3. 4. 5. Details No. of Consumers Sales in MU % of increase in Consumers % increase in Sales Specific Consumption 2003-04 138837 238 (-)0.39 (-)10.86 1714.24 2004-05 141143 265 1.66 11.34 1877.53 2005-06 109304 283 (-)22.56 6.79 2589.12 2006-07 108210 314 (-)1 10.95 2901.76

3.2.11.3 The sales for 2008-09 as per preliminary accounts are abnormally high. The sales in 2005-06, 2006-07 and 2007-08 appear reasonable. The average increase for these periods is 8.14%. 3.2.11.4 The TNEB has projected a sale of 357 MUs for 2009-10. The actual sales upto January 2010 was 293 MUs and hence the projection of 357 MUs for 2009-10 is approved. 3.2.11.5 The sales for the control period is fixed with 8% increase over the sales for 2009-10 as below:
Table 22 Projection of sales by TNERC for LT recognized educational institutions TNEB Years 200910 Sales in MUs 357 201011 471 201112 620 201213 817 200910 357 TNERC 201011 386 2011 -12 416 201213 450

3.2.12 LT ACTUAL PLACES OF PUBLIC WORSHIP 3.2.12.1 The TNEB has made the following projection in Form-2 of ARR.
Table 23 Projection of sales by TNEB for LT actual places of public worship Sl. No. 1. 2. 3. Details No. of Consumers Sales in MU % of increase in number of consumers % of increase in Sales 2007-08 104198 68 8.56 2008-09 119846 115 15.02 2009-10 127037 74 6 2010-11 134659 78 6 2011-12 142739 83 6 2012-13 151303 88 6

4.

13.33

69.12

(-)35.65

5.4

6.4

75

3.2.12.2 The TNEB has projected the Consumers and Sales at YOY rate of 6% for the Control Period. 3.2.12.3 The Sales from 2003-04 to 2006-07 as per the accounts of the TNEB are as below :
Table 24 Sales and consumer growth trend for LT actual places of public worship Sl. No. 1. 2. 3. No. of Consumers Sales in MU % of increase in 39246 44 63.05 46256 46 17.86 46573 49 0.69 95979 60 106.08 Details 2003-04 2004-05 2005-06 2006-07

Consumers 4. % of increase in Sales 158.82 4.54 6.52 22.45

3.2.12.4 The actual sales upto January 2010 was 76.68 MUs as against the projected sales of 74 MUs for the entire year. Hence, the sales for 200910 are fixed at 93 MUs based on the trend of sales. 3.2.12.5 The sales for the control period is fixed with 6% increase every year over 93 MUs fixed for 2009-10 as below:
Table 25 Sales projection for LT actual places of public worship TNEB 200910 74 201011 78 201112 83 201213 88 200910 93 TNERC 201011 98 201112 104 201213 110

Sales (in MU)

3.2.13 LT COTTAGE & MICRO INDUSTRIES 3.2.13.1 The TNEB has made the following Projection in the petition and in the ARR :
Table 26 Sales projection by TNEB for LT Cottage and Micro Industries Sl. No. 1. 2. 3. 4. 5. Details No. of Consumers Sales in MU % of increase in Consumers % of increase in Sales in MU Specific Consumption 2007-08 41399 264 7.95 1.54 6376.965 2008-09 45934 610 10.95 131.06 13279.923 2009-10 48576 284 5.75 (-)53.44 5846.508 2010-11 51370 416 5.75 46.48 8098.112 2011-12 54325 610 5.75 46.63 11228.716 2012-13 57450 895 5.75 46.72 15578.764

76

3.2.13.2 The TNEB has projected the Sales for the Control Period at YOY rate of 46.6%. 3.2.13.3 The past trend in Sales is detailed below :
Table 27 Sales trend for LT Cottage and Micro Industries Sl. No. 1. 2. 3. 4. 5. Details No. of Consumers Sales in MU % of increase in Consumers % of increase in Sales in MU Specific Consumption 2003-04 41779 215 30.10 14.36 5146.126 2004-05 43940 236 5.17 9.77 5370.960 2005-06 37034 242 (-)15.72 2.54 6534.536 2006-07 38350 260 3.55 7.44 6779.661

3.2.13.4 The actual Sales for the year 2009-10 upto January 2010 was 93 MUs and based on the month-wise Sales, the Sales for the year 2009-10 is revised as 111 MUs. 3.2.13.5 The CAGR for the period from 2003-04 to 2007-08 (excluding 2008-09) is 5%. 3.2.13.6 The sales for the control period is fixed with an increase of 5% (CAGR) each year over the revised sales of 111 MUs for 2009-10 as below:
Table 28 Sales projection for LT Cottage and Micro Industries

TNEB 200910 284 201011 416 201112 610 201213 895 200910 111

TNERC 201011 117 201112 122 201213 128

Sales MU)

(in

3.2.14 LT POWERLOOMS 3.2.14.1 The TNEB has made the following projections in the ARR :
Table 29 Sales projection by TNEB for LT Power looms

Sl. Details No. 1. No. of Consumers 2. Sales in MUs 3. % increase in

2007-08 102927 672 4.23

2008-09 103445 799 0.50

2009-10 115686 720 11.83

2010-11 129377 749 11.83

2011-12 144687 779 11.83

2012-13 161809 811 11.83

77

4. 5.

Consumers % increase 4.48 18.89 (-)9.89 4 4 4 in Sales Specific 6528.899 7723.911 6223.744 5789.282 5384.036 5012.082 Consumption (in units)

3.2.14.2 The TNEB has projected the number of consumers at the YOY rate of 11.83% and the sales at YOY rate of 4%. 3.2.14.3 The TNEB has projected a sale of 720 MUs for the year 2009-10. However, the actual sales upto January 2010 was 679.324 MUs. Based on the pattern of sales, the projection of 720 MUs made by TNEB is revised as 822 MUs for 2009-10. 3.2.14.4 The projection for the control period is fixed with 4% increase every year over the revised sales for 2009-10 as below:
Table 30 Sales projection by TNERC for LT Power looms

Sl. No. 1.

Details At growth rate of 4% with base value as 822 in 200910

2009-10 (In MUs) 822

2010-11 (In MUs) 855

2011-12 (In MUs) 889

2012-13 (In MUs) 924

3.2.15 LT INDUSTRIES 3.2.15.1 The TNEB has projected sales to LT Industries as below :
Table 31 Sales projection by TNEB for LT industries

Year No. of Consumers Sales in MU % increase /

2007-08 324014 4585 2.94

2008-09 332364 3800 (-) 17.12

2009-10 339524 4924 29.58

2010-11 346837 4912 (-)0.24

2011-12 354309 4902 (-)0.20

2012-13 361941 4893 (-)0.18

decrease in Sales

3.2.15.2 The TNEB has not indicated the methodology adopted to forecast the energy consumption by LT Industrial Consumers (under LT Tariff III B).

78

They have stated that the demand and energy forecast for 2009-10 have been arrived at based on proportionate consumption made in 2007-08 in view of R & C 2008-09. 3.2.15.3 The energy consumption for 2009-10 has been projected at 4924 MUs with an increase of 29.58% over the consumption in 2008-09 (and an increase of 7.39% over the consumption in 2007-08). 3.2.15.4 The available actuals upto January 2010 was 3287 MUs. 3.2.15.5 Based on the monthly consumption pattern, the estimated consumption for 2009-10 is revised as 3942 MUs as against 4924 MUs projected by the TNEB. This is 3.74% more than the consumption in 2008-09 3.2.15.6 The past trend indicates that the growth was staggering as below :
Table 32 Sales trend for LT industries

Details Sales % of increase

2003-04 3490 3.25

2004-05 3810 9.16

2005-06 3921 2.91

2006-07 4454 13.59

3.2.15.7 The sales for the control period is projected with the growth rate of 3.74% over the revised sales of 3942 MUs for the year 2009-10 as below:
Table 33 Sales projection by TNERC for LT industries

TNEB Year 200910 Increase 3.74% MU) @ (in 4924 201011 4912 201112 4902 201213 4893 200910 3942

TNERC 201011 4089 201112 4242 201213 4401

3.2.16 LT AGRICULTURAL SERVICES 3.2.16.1 The TNEB has made the following projections for the control period:

79

Table 34 Sales projection by TNEB for LT agricultural services

Year No. of consumers Consumption in MU % increase in No. of Consumers % increase in Consumption

2010-11 1976246 12870 2.4% 7.99

2011-12 2023646 14116 2.4% 9.68

2012-13 2072183 15245 2.4% 8%

3.2.16.2 The TNEB has not carried out any sample study to assess the consumption in unmetered services. The TNEB has stated that there is an estimated increase of 40,000 agricultural connections per year. The increases in consumption / consumers proposed by TNEB are on the higher side.

3.2.16.3 The consumption pattern in the previous years was as below:

Table 35 Consumption patterns of LT agricultural services As per Audited Accounts Year No. Consumers YOY increase No. Consumers Consumption MU Average Consumption per service Unit % increase Consumption % increase No. Consumers 2003-04 1702541 26428 2004-05 1736946 34405 2005-06 1768052 31106 2006-07 1824932 56880 2007-08 1853764 28832 Prel. A/cs 2008-09 1884750 30986 Estimate 2009-10 1929956 45206

of in of in

9582 5628

9757 5617

9797 5541

10601 5809

11107 5992

11499 6101

11918 6175

in in of 6.22 1.58 1.83 2.02 0.41 1.79 8.21 3.22 4.77 1.58 3.53 1.67 3.64 2.40

3.2.16.4 The TNEBs claim that there is an estimated increase of 40,000 agricultural consumers every year is not correct. There are shortfalls / excess in achieving the target. 3.2.16.5 The quantum of sales furnished in earlier years is not in proportion to the number of consumers. Increase of 31,106 service connections in 2005-

80

06 has resulted in increased consumption of 40 MUs, while increase of 28,832 service connections in 2007-08 has consumption of 506 MUs over the previous year. 3.2.16.6 The TNEB probably predetermines the percentage of loss and then estimates the agricultural consumption so as to maintain the loss level without adopting any specific method to compute agricultural resulted in increased

consumption. 3.2.16.7 In the 17th Electric Power Survey (EPS), the CEA has adopted the

following formula to forecast the electrical consumption of pumpsets/tube wells. Y=NxSxH Where, Y = Electrical consumption in KWh N = Number of pumpsets at the middle of the year S = Average capacity of pumpset in KW at the middle of the year H = Average electricity consumption per year per kilowatt of connected electric load (KWh/KW) 3.2.16.8 The consumption by agricultural services is computed for the control period by adopting CEAs formula with the following assumption: (i) No. of consumers (service connections) is increased @ 40,000 year after year. (ii) The number of consumers as on 31-03-2009 is taken as 1884750 and the number of consumers for the subsequent periods may be arrived at with the addition of 40,000 consumers every year. (iii) Capacity of the pump sets is adopted on HP basis against the kW basis. (iv) The average consumption per HP per year is taken as 1051 units based on the sample study report submitted for earlier tariff revision. (v) Connected load may be increased @ 5.47 HP/service.

81

3.2.16.9 The consumption in agricultural services during the control period is arrived at as below:
Table 36 Sales projection by TNEB for LT agricultural services Sl. No. 1. Details No. of service connection (consumers at the end of the year) with addition of 40,000 every year No. of service connection at the middle of the year Connected load in HP at the end of the year Connected load in HP at the middle of the year Average capacity of pumpset in HP at the middle of the year ( 4 / 2 ) Average consumption in KWh/HP/Annum Consumption in MU (2 x 5 x 6) 2009-10 1929204 2010-11 1969204 2011-12 2009204 2012-13 2049204

2. 3. 4. 5.

1909204 10552746 10443346 5.47

1949204 10771545 10662145 5.47

1989204 10990345 10880945 5.47

2029204 11209145 11099745 5.47

6. 7.

1051 10976

1051 11206

1051 11436

1051 11666

3.2.16.10 The projection by TNEB is compared with the above projection as below:
Table 37 Comparison of sales projections by TNEB LT agricultural services with TNERC projection

(In MUs)
TNEB 2009-10 Sales 11918 2010-11 12870 2011-12 14116 2012-13 15245 2009-10 10976 TNERC 2010-11 11206 2011-12 11436 2012-13 11666

3.2.17 LT Commercial establishments and consumers not covered in other LT categories 3.2.17.1 The TNEB has projected the following sales for the control period :
Table 38 Sales projections by TNEB for LT commercial

Details No. of Consumers Consumption in MU

2010-11 2755838 4329

2011-12 2895387 4695

2012-13 3041893 5092

82

% increase in no. of Consumers % increase in Consumption Specific Consumption (in units)

5.06 8.44 1570.847

5.06 8.45 1621.544

5.06 8.46 1673.897

3.2.17.2 The past trend in the growth of service connection and consumption as recorded in Boards accounts are detailed below :
Table 39 Sales trend for LT commercial Actuals 2003-04 2004-05 2005-06 2006-07 2007-08 1865523 1992868 2122967 2226580 2343407 2583 5.29 2814 6.82 2897 6.52 3467 4.88 3720 5.24 Estimates 2008-09 2009-10 2496594 2623015 3660 6.54 3992 5.06

Details No. of Consumers Consumption in MU % increase in no. of Consumers % increase in consumption Specific Consumption (in units)

5.60 1384.60

8.94 1412.04

2.95 1364.60

19.68 1557.10

7.30 1587.43

(-)1.61 1466.00

9.07 1521.91

3.2.17.3 The TNEB has projected the sales for the control period at 8.46%, which is the average of growth rates for the period from 2006-07 to 2008-09. There was an abnormal growth i.e. 19.68% in 2006-07 followed by 7.30% and (-) 1.61% in subsequent years. In view of the wide variation the growth rate of 8.46% is not considered. 3.2.17.4 The average growth rate for the period from 2003-04 to 2008-09 is 7.14%. 3.2.17.5 The CAGR for the period from 2003-04 to 2008-09 is 7%. 3.2.17.6 The available actual consumption upto January 2010 was 3507.430 MUs against the estimated consumption of 3992 MUs for the entire year. Hence, the estimated consumption of 3992 MUs for 2009-10 is revised as 4257 MUs based on the trend of sales. 3.2.17.7 The sales projection for the control period is fixed with 7% (CAGR) increase over the sales of 4257 MUs for 2009-10 as below:

83

Table 40 Sales projections by TNERC for LT commercial TNEB 2010201111 12 4329 4695 TNERC 2010201111 12 4555 4874

CAGR increase

7%

200910 3992

201213 5092

200910 4257

201213 5215

3.2.18 LT Tariff VI (TEMPORARY SUPPLY) 3.2.18.1 The TNEB has made the following projection :
Table 41 Sales projections by TNEB for LT temporary supply Sl. No. 1. 2. 3. Details No. of Consumers Sales in MUs % of increase / decrease in Sales (in MUs) % of increase in No. of Consumers 2007-08 11601 11 0 2008-09 11299 39 254 2009-10 23062 11 (-)71.79 2010-11 47073 19 72.73 2011-12 96080 33 73.68 2012-13 196109 56 69.69

4.

205.13

(-)2.60

104.11

104.11

104.11

104.11

3.2.18.2 The TNEB has projected a growth of 72.73% in Sales and 104.11% in the number of Consumers. 3.2.18.3 The actuals for the earlier years are as below :
Table 42 Sales trend for LT temporary supply Sl.No 1 2 3 Details No.of consumers Sales in MUs % of increase / decrease in sales (in MU) % of increase in number of consumers 2003-04 3467 2 0 2004-05 3355 2 0 2005-06 3688 19 850 2006-07 3802 11 (-)42.10

5.25

(-)3.23

9.92

3.09

3.2.18.4 No definite trend in the growth of Sales and Consumers could be forecast in case of Temporary Supply.

84

3.2.18.5 The actuals upto January 2010 was 11.50 MUs as against 11 MUs projected by the TNEB. 3.2.18.6 The Projection for the Control Period proposed by the TNEB is accepted.

3.3 3.3.1

Transmission and Distribution Loss TNEB has projected the T&D loss @ 18% for all the 3 years of control period.

3.3.2

The TNEB in para 7 of the Tariff Petition have submitted the following : A T&D loss level of 18% has been arrived at on the basis of energy input into system and total output from the system for 2007-08 to 201213. T&D loss in the state are at present among the lowest in the country, with latest TNERC Tariff Order assessing the losses at 18%. Most of the T&D losses are technical in nature. Though it must be mentioned that a detailed study to accurately determine T&D losses is yet to be undertaken and results of such a study may provide a better basis for formulating further T&D loss reduction strategies. T&D losses are

assessed as the difference between the energy input and the estimated sales. 3.3.3 With regard to the contention of TNEB that the T&D loss of 18% was assessed by the Commission in the earlier Tariff Order, the Commission observes the following: (i) The TNEB had been maintaining the T&D loss at a level of 16.25% upto 2002 and also claimed T&D loss at the same level (16.25%) in the petition for tariff determination filed in September 2002. In the petition, the TNEB had furnished the following information : (a) The Board had nearly 17 lakh agricultural connection, which constitute 83 lakh HP of connected load. (b) For assessing the agricultural consumption for these consumers, the energy meters are provided to 3% of the service connections in

85

each of the distribution circles from where the consumption is recorded on a sample basis. (c) The average annual consumption / HP as per the sample data for assessment of agricultural consumption was 1051 units. (ii) As the consumption projected for the agricultural consumers in the tariff petition did not match the consumption arrived at based on sample data and connected load of the Agricultural services, the Commission corrected the agricultural consumption projected by the TNEB in line with the sample data and included the balance energy to the loss level. (iii) The Commission has corrected the loss level furnished by the TNEB by including the balance energy consequent to the correction made to Agricultural consumption. The Commission had not actually made any assessment. (iv) The TNEB cannot maintain the loss at that level continuously without subsequently undertaking sample study on the 3% agricultural service connections said to have been metered. 3.3.4 Regulation 73 (Transmission and Distribution Loss) of TNERC Tariff Regulation stipulates the following : (i) The Distribution Licensee shall endeavour to have proper metering arrangements for accurate measurement of transmission loss. (ii) Appropriate sample study with the approval of the Commission shall be conducted to estimate the consumption in unmetered services so that distribution losses are estimated fairly accurate. (iii) The licensee shall compute and furnish loss levels at every supply voltage level. 3.3.5 The TNEB had neither furnished the Master Metering Plan nor made any attempt to meter the unmetered services. They sought for extension of time for metering the existing as well as the new service connections. (i) The Commission has been granting extension of time for installation of meters in unmetered services and the last extension was granted for 3 years from 01-10-2009 at the request of the Government/TNEB.

86

(ii)

TNEB has undertaken to meter the new services from 01-01-2010.

3.4

Commissions Rulings and Directives on T&D Loss / Energy Audit in earlier Tariff Order and TNEBs response :

3.4.1

In para 2.10.3 of the Tariff Order dated 15-03-2003, the Commission issued the following ruling on T&D losses : The Commission is of the opinion that ultimately the TNEB should be able to assess the transmission and distribution losses in each of the voltage systems of the grid. As a first step, the Commission directs the TNEB to assess the T&D losses in the following three voltage system. (i) 230, 110, 66 and 33 KV Voltage System: At all input source points, meters are already installed. Meters should be installed at the output points at each sub-station. Energy balance can be assessed by taking the monthly readings at all these points combined, which will also give the line losses assessed at 230, 110, 66 and 33 KV Voltage System. (ii) 22 KV and 11 KV System: The TNEB has stated that it has already installed meters at the Sub-stations and on 22 KV and 11 KV feeders. Meters are to be installed at the secondary end of distribution transformers. With the reading captured at sub-station end, distribution transformer end readings and HT consumer end readings, if any, the energy balance can be assessed and line loss arrived at for 22 / 11 KV system. A representative sample study may be carried out and based on sample study results; the total loss can be assessed. (iii) Low Tension System: The Commission has taken note of the

consultatory work in progress for assessment of the consumption by unmetered services. As soon as this is over, TNEB should be in a better position to assess the line loss in the LT system. 3.4.2 The Commission in its Tariff Order dated 15-03-2003 has also issued the following directives : 7.16 (iii) Energy Audit:

87

The Commission is of the opinion that the TNEB should be able to assess the transmission and distribution losses in each of the voltage system of the Grid. Towards this, the TNEB is directed to improve the level of metering and conduct more energy audits at the 11 KV feeder level. The Commission directs the TNEB to undertake energy audits at the HT/LT levels and its own generating stations and submit a quarterly report to the Commission on the progress achieved in the energy audit programme, the results of the energy audit and the action taken report highlighting the action taken by the TNEB to rectify the situation. Towards the assessment of LT line losses, the Commission has taken note of the two consultancy work in progress under the World Bank assisted Water Resources Consolidation Project. The results should be submitted to the Commission and the follow-up should be completed well before the next tariff petition. 3.4.3 (i) (ii) TNEB has reported to have taken the following action : Static Meters have been installed in all output points in each sub-station. Monthly energy balance assessment is being carried out from 230 KV level to 11 KV bus and a quarterly return is being submitted to the Commission. 3.4.4 It is seen from the quarterly report that transmission loss from 230 KV level to 11/22 KV bus is arrived at (energy balance) as difference between the energy injected from generator / interstate and the energy fed to EHT / HT consumers & total consumption at SS end of 11/22 KV. The loss at HT and LT system is arrived at by deducting the transmission loss from the estimated T&D loss of 18%. 3.4.5 The TNEB has reported to have taken the following action towards reduction of loss at LT system (Distribution loss). (i) Out of the total 186638 Nos. distribution transformers (DTs) available in TNEB, 93101 DTs have been metered. Steps are being taken to carry out energy accounting in the feeders where all DTs have been metered.

88

(ii)

TNEB is continuously carrying out the following improvement works to reduce the losses. (a) Improving HT: LT ratio by erecting more High Tension lines and erecting new Distribution transformers. (b) Establishment of new sub-stations. (c) Strengthening of HT line conductors. (d) Installations of HT shunt capacitors at sub-station end. (e) Installation of LT fixed capacitors at LT side of distribution Transformers. (f) Erection of link lines (g) Re-routing of feeders.

3.4.6

The following points are observed on the action taken reports furnished in the quarterly returns being received :

(i)

The TNEB has reported that the percentage of line loss gets reduced after improvement works as revealed by the energy accounting studies made prior to improvement works and after improvement works.

(ii) (iii)

The TNEB continue to furnish the same T&D loss level of 18%. The TNEB contend that, with the increase in load and HT/LT network expansion, line loss also is increasing and that the effect of improvement works result only in containing the T&D losses without further increase.

3.4.7

The contention of TNEB is untenable. The TNEB shall arrange to take appropriate action to assess the unmetered consumption to arrive at the loss level correctly. The detail furnished in this regard by TNEB is only qualitative in nature. There is no substitute for actual measurement in computing the losses. A time bound programme for moving towards proper metering is to be furnished by TNEB and implemented thereafter.

3.5 3.5.1

Assessment of Unmetered Consumption : In the Action Plan on various activities received on 05-03-2003, the TNEB had reported that as a part of World Bank assisted T.N. Water

89

Resources Consolidation Project, the Board has

awarded a

Consultancy to Dr. S.K. Raheja, Retired Director of ICAR for recommending analytical procedures and sample size assessment of energy consumption by unmetered agricultural and hut connection. 3.5.2 The TNEB in the petition have now reported the following status: The Consultant has identified providing meters in 6600 Nos.

Agricultural services and 4620 Nos. hut services selected at random. Installation of meters has been completed; Meter readings taken from 01-12-2006 to 31-11-2007; While analyzing the data for estimation of energy consumption, run time error occurred in the software; 3.5.3 The error has been referred to Dr. S.K. Raheja, Consultant and reply is awaited; The contention of TNEB is unacceptable. Two years period is too long get error rectified or to use alternate method to arrive at the loss. Having measured 50% of their DTs, the reading of the DTs should have been used to arrive more accurate consumption of agricultural and HUT services.

3.6 3.6.1

Commissions Rulings on T&D Loss As per Regulation 73 (5) of TNERC (Terms & Conditions for determination of Tariff) Regulation 2005, the Commission shall fix target for reduction of losses in next three years.

3.6.2

As per para 8.2(2) of the Tariff Policy, AT & C loss reduction should be incentivized by linking returns in a MYT framework to an achievable trajectory.

3.6.3

As per Regulation 25 of the Terms and Conditions for determination of Tariff for Transmission, Distribution of Electricity under MYT framework the Commission shall fix benchmarks for reduction of losses and licensee shall achieve the target fixed for each year of the control period.

90

3.6.4

The TNEB has furnished the following trajectory of Aggregate Transmission & Distribution Loss to 17th Electric Power Survey.
Table 43 AT&C loss trajectory projected by TNEB

Year

2004-05

Loss level 18 (in %)

200506 18

200607 18

200708 17.5

200809 17

200910 16.5

201011 16

201112 15.5

3.6.5 3.6.6

The 17th EPS has adopted the above trajectory of reduction of loss. The Commission has fixed the following year-wise target of AT&C loss to be achieved by TNEB upto 2012 with a reduction of 0.4% every year from 2008-09 in order dated 06-11-2008.
Table 44 AT&C loss trajectory fixed by TNERC

Year 2008-09 Loss level 19.3 (in %) 3.6.7

2009-10 18.9

2010-11 18.5

2011-12 18.1

The AT&C loss of 19.3% fixed by the Commission includes loss on account of theft and deficiency in collection.

3.6.8

The TNEB has submitted that they have collection efficiency of 99.81% with AT&C loss of 18.31% for 2008-09.

3.6.9

They have also submitted that they have efficient enforcement mechanism to take preventive action to curb energy theft.

3.6.10 The Commission directs that the T & D loss be reduced by 0.40% every year from 2010-11. The trajectory for reduction of loss is fixed as below:
Table 45 T&D loss trajectory fixed by TNERC

Year 2009-10 Loss level 18 (in %)

2010-11 17.6

2011-12 17.2

2012-13 16.8

3.6.11 In case the licensee achieves a loss at a level less than the target, he may retain 50% of the gain out of the loss reduction and the balance 50% will be passed to the consumers as per Regulation 3 (ix) of MYT Regulations. The licensee may consider introducing incentives for

91

employees for loss reduction. Such schemes are in operation in West Bengal and in other States.

3.7 3.7.1

Net Energy Requirement The demand and energy forecast and net energy requirement determined by the Commission duly taking into account the T & D loss is compared with the projection of TNEB as below:

Table 46 Demand and energy forecast and net energy requirement determined by the TNERC (in Mus) Sl. No. Consumer Category Tariff 2009-10 TNEB 201011 201112 201213 200910 TNERC 201011 201112 201213

I.

3 4 5 6 7

HIGH TENSION Industries incl. Rly. Traction Recognized Educational Institutions etc. Places of Public Worship Commercial Lift Irrigation Supply to Puducherry Sale to Other States Total HT LOW TENSION Domestic Huts Bulk Supply Public Lighting & Water Supply Recog. Educational Institutions

IA

16562

17942

19438

21058

14820

16055

17392

18841

II A

936

998

1064

1135

970

1034

1102

1175

II B III IV V

4 1514 11 420

4 1671 12 445

4 1844 14 471

4 2034 15 499 455 25200

4 1600 9

4 1744 9

4 1901 9

4 2072 9

19447

21072

22835

17403

18846

20408

22101

II 1 2 3

IA IB IC

13709 216 3

14524 229 4

15578 243 5

16309 258 6

15535 393 3

16282 411 4

17065 428 5

17886 447 6

II A

1043

1077

1111

1147

1540

1581

1625

1669

II B

357

471

620

817

357

386

416

450

92

7 8 9 10 11 12

etc Places of Public Worship Cottage & Micro Enterprises Power loom Industries Agriculture Commercial Temporary Supply Total LT Grand Total T & D Loss % T & D Loss in MU Net Input Energy Requirement

II C III A (1) III A (2) III B IV V VI

74

78

83

88

93

98

104

110

284 720 4924 11918 3992 11 37251 56698

416 749 4912 12870 4329 19 39678 60750

610 779 4902 14116 4695 33 42775 65610

895 811 4893 15245 5092 56 45617 70817

111 822 3942 10976 4257 11 38040 55443

117 855 4089 11206 4555 19 39603 58449

122 889 4242 11436 4874 33 41239 61647

128 924 4401 11666 5215 56 42958 65059

18

18

18

18

18

17.6

17.2

16.8

12446

13335

14402

15545

12170

12484

12806

13137

69144

74085

80012

86362

67613

70933

74453

78196

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CHAPTER 4 ENERGY AVAILABILITY The TNEB meets the energy requirement from the energy available from own generation station and by purchase from central generating stations, IPPs and other sources. The availability of power from various sources is as below:

4.1

OWN GENERATING STATION

4.1.1 The TNEB own the following generating stations with installed capacity noted against each :
Table 47 Installed capacity of the generating stations owned by TNEB

Sl.No I 1 2 3 4 II 1 2 3 4 5 III IV

Station Coal Ennore (ETPS) Tuticorin (TTPS) Mettur (MTPS) North Chennai (NCTPS) Total coal based stations Gas Tirumakottai (Kovilkalappal) Kuttalam Valuthur unit I Valuthur Unit II Basin bridge Total Gas based stations Hydro (36 stations) Wind Mills Total

Capacity (in MW) 450 1050 840 630 2970 107.88 101 95 92 120 515.88 2186.65 17.55 5690.08

4.1.2 The energy available from the Boards own thermal generating stations is fixed with reference to the norms of operation specified in the TNERC Tariff Regulations 2005 as below: 4.1.3 Plant Load Factor (PLF): Under Regulation 37, the following norms of operations have been specified for Thermal Generating Stations.

94

(i) Target availability for recovery of full capacity (fixed) charges (a) All Thermal Generating Stations in Tamil Nadu except Ennore Thermal Power Generating Station (b) Ennore Thermal Power Generating Station (Till Renovation and Modernization works in all units are completed) (c) In respect of Generating Stations of IPPs (d) New Thermal Stations (ii) Target Plant Load Factor for incentive (a) All the Thermal Power Generating Stations except the existing Stations of IPPs covered under PPA 80% 80% 50%

As per PPA 80%

(b) Power Generating Stations of IPPs covered under Existing PPA As per PPA 4.1.4 The average PLF achieved by the thermal station in the five years previous to 2008-09, PLF during 2008-09 and the PLF in the 1st half year of the 2009-10 are tabulated below:
Table 48 PLF trend in TNEB owned thermal stations

(in %)
Sl. No. 1 2 3 4 5 6 7 8 Stations 200304 32 87.63 91.28 78.57 76.59 79.98 8.38 200405 31 88.90 90.85 71.00 80.78 67.03 73.18 4.13 200506 15.23 83.42 88.59 72.50 60.62 83.80 74.68 3.83 200607 36.20 87.90 92.59 88.87 74.47 87.42 68.98 8.45 200708 51.56 86.70 90.94 84.38 71.60 72.00 31.82 3.95 Average for five years 33.20 86.91 90.85 79.06 72.81 78.05 62.17 5.75 Actuals 2008-09 49.17 85.35 87.78 86.52 75.48 85.00 82.16 28.02 Upto 30-09-09 38.44 80.15 91.75 86.79 57.72 83.00 77.63 2.67

ETPS TTPS MTPS NCTPS Kovilkalappal (Tirumakottai) Valuthur Kuttalam Basin Bridge

4.1.5 The above performances are compared with the TNEBs projections for the control periods as below:

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Table 49 Projection of PLF by TNEB for TNEB owned thermal stations

(in %)
Sl. No. 1 2 3 4 5 6 7 8 9 Stations Average for five years 33.20 86.91 90.85 79.06 72.81 78.05 62.17 5.75 Actuals 2008-09 49.17 85.35 87.78 86.52 75.48 85.00 82.16 28.02 Upto 30-09-09 38.44 80.15 91.75 86.79 57.72 83.00 77.63 2.67 2010-11 TNEBs Projection 2011-12 2012-13 50.81 90.02 89.01 82.45 68.71 71.62 77.08 23.61 78.37 50.81 90.02 89.01 82.45 68.71 71.62 77.08 23.61 78.37

ETPS TTPS MTPS NCTPS Kovilkalappal Valuthur Unit I Kuttalam Basin Bridge Valuthur Unit II

50.81 90.02 89.01 82.45 68.71 71.62 77.08 23.59 78.37

4.1.6 The TNEB has stated that the less generation in TTPS during the 1st half of 2009-10 was due to forced shut down of unit IV from 30-04-2009 to 0406-2009 for carrying out maintenance work due to generator stator earth fault along with annual overhauling works. However, the performance was above the targeted availability i.e.80.15%. The lesser generation in ETPS was stated to be due to condenser tube problem in unit II and annual overhauling programme in unit I, IV and V. 4.1.7 The ETPS has undergone renovation and modernization. This will call for additional capitalization. Regulation 19 of Tariff Regulations 2005 deals with this subject. Note No.2 to this Regulation stipulates that any expenditure incurred on replacement of old asset shall be considered after writing off the gross value of the original asset from the original capital cost. Further Note 4 to the same Regulation clarifies that any expenditure admitted by the Commission for determination of tariff on renovation, modernization and life extension shall be certified on normative debt equity ration as is specified in Regulation 21 after writing off the original amount of the replaced asset from the original project cost. From the above stipulations in the Regulations, it can be seen that it is necessary to determine the tariff of ETPS after renovation and modernization by following the Regulations. In view of this it was not possible for the Commission to do this exercise in the retail tariff petition. The TNEB is

96

directed to file a separate petition for ETPS in accordance with the Regulation within 2 months of issue of this order and the tariff of ETPS will be decided on that basis. The details of ETPS considered in the ARR petition shall accordingly be on provisional basis which will be subject to adjusments on fixing of tariff of ETPS. The adjustmeny could be positive or negative and this adjustment will be carried out in the true up petition for 2010-11 along with carring cost. 4.1.8 The TNEB has also stated that the lesser PLF in gas based thermal station during the first half of the current year was due to non-supply of agreed quantity of gas by M/s.GAIL. 4.1.9 TNEB in their petition have indicated that the availability of gas from GAIL is now reduced and is about 70% of the requirement. Accordingly various gas based power stations of TNEB are able to operate only at lower PLF. The Commission suggest that the TNEB may take up the issue with the Government of India for allocation of additional gas so that the assets which are created already are put to optimum use. The TNEB shall plan to maximize the output of Gas based Stations and at the same time the heat rate is also maintained at a optimal level. Another option could be to consider alternate fuel which may require modification to the gas turbine as well as addition of fuel system for the alternate fuel including storage tank, fuel forwarding system etc., which will involve construction period and additional capital cost. 4.1.10 TNEB may also take up this matter with GAIL for use of allocated gas in various power stations and in case the TNEB cannot utilise the entire gas allocated to them, the issue of using this surplus gas by other generators in the State may also be considered. This needs to be done in

consultation with GAIL. Yet another issue involved in use of gas is take or pay contract for gas supply. TNEB may ensure that at all times the allocated gas is fully utilised so that take or pay conditions may not be attracted.

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4.1.11 The Commission considers the PLF for thermal stations as tabulated below for the purpose of energy availability:
Table 50 Projection of PLF by TNERC for TNEB owned thermal stations

(in %)
Sl. No. 1 2 3 4 5 6 7 8 9 Station ETPS TTPS MTPS NCTPS Kovilkalappal (Tirumakottai) Valuthur Unit I Kuttalam Basin Bridge Valuthur Unit II 2010-11 50.81 90.02 89.01 82.45 68.71 71.62 77.08 23.59 78.37 TNEB 2011-12 50.81 90.02 89.01 82.45 68.71 71.62 77.08 23.61 78.37 2012-13 50.81 90.02 89.01 82.45 68.71 71.62 77.08 23.61 78.37 2010-11 50.81 90.02 91.75 86.79 68.71 71.62 77.08 5.75 78.37 TNERC 2011-12 50.81 90.02 91.75 86.79 68.71 71.62 77.08 5.75 78.37 2012-13 50.81 90.02 91.75 86.79 68.71 71.62 77.08 5.75 78.37

4.1.12 The coal based thermal stations except ETPS are entitled for incentive for generation in excess of target availability in accordance with Regulations 37 (ii) and 44 of Tariff Regulations, 2005. 4.1.13 The TNEB shall study the causes for the low performance of ETPs inspite of R&M works and take appropriate action to improve the performance.

4.2

Auxiliary Consumption

4.2.1 The normative auxiliary energy consumption specified in the Tariff Regulations, 2005 are as below: Coal based:
Table 51 Normative auxiliary consumption for coal based stations

Sl. No. 1 2

Particulars 200 MW series 500 MW series Steam driven boiler feed pumps Electrically driven boiler feed pumps

With Cooling Without tower cooling tower 9.00% 8.50% 7.50% 9.00% 7.00% 8.50%

(7) Gas & Naphtha based - Combined cycle - 3.00%

98

- Open cycle

- 1.00%

4.2.2 The TNEB did not furnish the station wise projection of auxiliary consumption in the petition. 4.2.3 The average of auxiliary consumption for five years earlier to previous year, auxiliary consumption in the previous year (2008-09) and the first half of the current year (2009-10) are tabulated as per TNEBs Annual Statement of Accounts are tabulated submission below:
Table 52 Trend in auxiliary consumption for TNEB owned thermal generating stations

(in %)
Sl. No . 1 2 3 4 5 6 7 8 9 Station 200304 13.92 7.80 9.14 7.84 5.30 5.00 200405 14.80 7.80 9.14 8.27 6.00 5.70 5.50 0.80 0.80 200506 16.14 8.06 9.42 8.38 6.80 5.60 6.10 0.59 200607 13.86 7.88 8.91 8.21 6.40 5.60 6.40 0.60 200708 13.68 8.00 8.89 8.14 6.00 5.99 5.80 0.62 Average of five years 14.48 7.91 9.10 8.18 6.10 5.58 5.95 0.68 200809 14.57 7.94 8.67 8.08 5.93 6.53 5.87 0.59 Upto 30-09-09 15.27 8.16 8.90 8.08 7.49 6.30 6.42 0.58

ETPS TTPS NCTPS MTPS Tirumakott ai Valuthur GTS-I Kuttalam GTPS Basin Bridge Valuthur GTS-II

4.2.4 The TNEB has furnished the following reasons for the higher auxiliary consumption in ETPS and NCTPS: (1) The units in NCTPS are of KWU design and hence the auxiliary consumption is higher than the norms. (2) In ETPS, the higher auxiliary consumption is due to start up activities and low load operations. 4.2.5 TNEB has stated in their letter dated 22-07-2010 that they have installed gas booster compressors in some of their gas turbine stations on account of gas being delivered at a low pressure by M/s GAIL. In the absence of installation of gas booster compressors, the gas delivered by GAIL could

99

not be used for generation of power and consequently the power plant would have remained idle. It is reported that the contract with GAIL does not provide for any compensation or damages for such breach of contract. With a view to operate the power station using the gas as delivered by GAIL, it has become necessary for TNEB to instal gas booster compressors. consumption. This has resulted in increased auxiliary energy

Currently, clause 37 of terms and conditions for

determination of tariff regulations 2005 of the Commission provides for auxiliary energy consumption as follows: Open Cycle Gas based thermal power station - 1% Combined Cycle Gas based thermal power station - 3% 4.2.6 The TNEB has sought relaxation of the auxiliary energy consumption norms for their power stations as follows: Tirumakottai Valuthur I Valuthur II Kuttalam ----7.3% 7.0% 6.5% 7.6%

4.2.7 The average of auxiliary energy consumption of the above power stations during 2007-08, 2008-09 and 2009-10 is Tirumakottai Valuthur Kuttalam ---5.96% 5.90% 5.92%

4.2.8 The Central Electricity Authority in their Technical Standard on operation norms for CCGT station, 2004 have permitted additional 2.5% auxiliary energy consumption for gas booster compressors. Taking these factors into consideration the Commission relaxes the norms and permits auxiliary energy consumption at 6% for 2010-11, which is the average for the last

100

three years. This relaxation is approved by the Commission in accordance with Clause 90 of (Terms and conditions for determination of tariff) Regulations 2005. 4.2.9 The percentage of auxiliary consumption approved by the Commission is as below:
Table 53 Auxiliary consumption approved by TNERC for TNEB owned thermal generating stations

(in %)
Sl. No. Station Average of five years 14.48 7.91 9.10 8.17 6.10 5.58 5.95 0.68 Actual 2008-09 Actual Upto 3009-09 15.27 8.16 8.90 8.08 7.49 6.30 6.42 0.58 TNEBs projection for control period 8.50 8.50 8.50 9.00 4.66 5.20 5.28 1.21 5.21 TNERCs approval for control period 8.50 8.50 8.50 9.00 6.00 6.00 6.00 1.00 6.00

1 2 3 4 6 7 8 9 10

ETPS TTPS NCTPS MTPS Tirumakottai Valuthur GTS-I Kuttalam GTPS Basin Bridge Valuthur GTS-II

14.57 7.94 8.67 8.08 5.93 6.53 5.87 0.59

4.3

Capacity addition in Thermal Generation

4.3.1 The TNEB has projected the following generation from the additional units being installed at North Chennai and Mettur:
Table 54 New thermal capacity additions by TNEB

(Generation in MUs)
Sl. No. 1 2 3 Station NCTPS Stage II (2 X 600 MW) Unit 1 NCTPS Stage II (2 X 600 MW) Unit 2 MTPS Stage III (1 X 600 MW) 2010-11 115 2011-12 4020 1481 1728 2012-13 3564 3564 3802

4.3.2 The estimated generation in these projects has been projected for 201112 and 2012-13 at normative parameters from the month subsequent to the latest anticipated month of commissioning for the year 2011-12 and 2012-13.

101

4.3.3 Valuthur GTS-II with an an installed capacity of 92 MW was commissioned on 17-02-2009. But the station is not in operation and is likely to be put back in operation in July 2010. projected accordingly. 4.3.4 The energy available from the own thermal stations on the above parameters is as below:
Table 55 Energy available from TNEB owned thermal stations

The generation from this station is

Sl. No

Stations

Capa city (in MW)

PLF (in %)

Aux. Cons u. (in %)

Energy available in MU 2010-11 Gros s Gen. Aux. Cons u. 290 704 608 407 Net ener gy 1713 7576 6143 4383 2011-12 Gros s Gen. 2003 8280 6751 4790 Aux. Cons u. 290 704 608 407 Net ener gy 1713 7576 6143 4383 2012-13 Gros s Gen. 2003 8280 6751 4790 Aux. Cons u. 290 704 608 407 Net ener gy 1713 7576 6143 4383

1 2 3 4

ETPS TTPS MTPS NCTPS Cap. Addn.

450 1050 840 630

50.81 90.02 91.75 86.79

14.48 8.50 9.00 8.50

2003 8280 6751 4790

NCTPS Stage II (unit 1) NCTPS Stage II (unit 2) MTPS Stage III Total Coal

600

80

8.50

2799

238

2561

4205

357

3848

600

80

8.50

1394

118

1276

4205

357

3848

600 4770 101 107.8 8 95 92 120 515.8 8 5285. 88

80

9.00

0 2182 4

0 2009 41 39 36 28 0.35 144.3 5 2153. 35

0 1981 5 641 610 560 446 60 2317 2213 2

2799 2881 6 682 649 596 632 60 2619 3143 5

252 2617 41 39 36 38 0.35 154.3 5 2771. 35

2547 2619 9 641 610 560 594 60 2465 2866 4

4205 3443 9 682 649 596 632 60 2619 3705 8

378 3101 41 39 36 38 0.35 154.3 5 3255. 35

3827 3133 8 641 610 560 594 60 2465 3380 3

8 9 10 11 12

Kuttalam GTPS Tirumakottai Valuthur GTS-I Valuthur GTS-II Basin Bridge Total Gas Grand Total

77.08 68.71 71.62 78.37 5.75

6.00 6.00 6.00 6.00 0.58

682 649 596 474 60 2461 2428 5

102

4.4

HYDEL GENERATING STATIONS

4.4.1 The TNEB has 36 hydel generating stations with a total installed capacity of 2186.65 MW. The generation in stations of 856 MW capacities is linked to irrigation. 4.4.2 The TNEB in the petition had proposed a capacity addition of 93 MW during 2010-11 and 2011-12. The expected months of commissioning of new projects are as below:
Sl. No. Table 56 New hydro capacity additions by TNEB Name of the project 2010-11 Capacity in MW 4.00 2.50 2.50 10.00 Expected month of commissioning June 2010 Nov 2010 Nov 2010 Dec 2010 Capacity in MW 2011-12 Expected month of commissioning

1 2 3 4 5 6 7 8

Periyar Vaigai SHEP I Periyar Vaigai SHEP II Periyar Vaigai SHEP IV Bhavani Barrage II Periyar Vaigai SHEP III Bhavani Barrage I Bhavani Kattalai Barrage II Bhavani Kattalai Barrage III Total

4.00 10.00 30.00 30.00 19.00 74.00

April 2011 May 2011 May 2011 June 2011

4.4.3 The total installed capacity of hydel generation at the end of each control period will be as below :
Table 57 Total installed capacity of hydro stations

At the end of the year 2010-11 2011-12 2012-13

Installed capacity in MW 2206 2280 2280

4.4.4 In the petition, the TNEB has projected the available net energy from hydel generating station as below :
Table 58 Projection of energy availability from hydro stations by TNEB.

PARTICULARS Available net energy in MU from all hydel generating stations

2009-10 5404

2010-11 4924

2011-12 4924

2012-13 4924

103

4.4.5 As against the projected net generation of 5404 MU in 2009-10, the actual gross generation was 5628.997 MU which is 29.39% of the installed capacity. 4.4.6 The Commission directed the TNEB to furnish the following information : a) The details of hydel capacity available b) Auxiliary consumption c) Consumption by Kadamparai Pumped storage Hydro station for pump mode d) The details of storage levels in terms of MU 4.4.7 The TNEB has furnished the generation availability as on 1st January 2010 as 814 MW 4.4.8 The Auxiliary consumption has been projected as below :
Table 59 Projection of auxiliary consumption in TNEB owned hydro stations

Sl. No. 1 2

Details Auxiliary consumption ( MU) Consumption by Kadamparai PSHEP for pump mode (MU)

2009-10 22 480

2010-11 23 480

2011-12 23 480

2012-13 23 480

4.4.9 The TNEB has furnished the following reservoir levels in terms of MUs. 24.03.2010. Niligris group Others except Mettur Mettur Total : 979.712 MU : 248.320 MU : 57.290 MU

: 1285.322 MU

4.4.10 The generation during the past period were as below :

Table 60 Trend in hydro generation Sl No 1 2 Details Installed capacity in MW Capacity availability 2003-04 1996 11.88 2004-05 1996 25.00 2005-06 2137 34.39 2006-07 2184 32.89 2007-08 2187 33.60 2008-09 2187 28.04

104

3 4 5

factor (%) Energy generated in MU Auxiliary consumption in MU Consumption by KPSHEP for pump mode

2067 16 468

4426 19 232

6141 28 555

6292 22 417

6455 25 403

5386 22 238

4.4.11 The years 2005-06 to 2008-09 were good monsoon years and the TNEB has been creating Hydro Balancing Fund for generation in excess of 25% of the installed capacity as per the provisions in the Tariff Regulations. 4.4.12 Regulation 76 (2) of the Tariff Regulations specifies the following : The average contribution of power by the hydro stations in a normal monsoon year shall be at the overall average plant load factor of 25% and the licensee shall estimate quantum of generation from the hydro stations at 25% PLF of the total installed capacity of all the stations as at 31st March of the preceding year 4.4.13 Hence, 25% PLF of the installed capacity is considered as capacity available factor and generation from hydel stations projected accordingly. 4.4.14 The Auxiliary consumption and consumption by Kadamparai PSHPS for pump mode are projected (for all three years) based on the average of the Auxiliary consumption and consumption of KPSHES for 5 years from 2004-05 to 2008-09. 4.4.15 The Commission fixes the following quantum generation from the hydro stations:
Table 61 Projection of hydro generation by TNERC

Sl. Details No. 1 Installed capacity at the end of the preceding year (in MW) 2 Generation at 25% PLF ( MU) 3 Auxiliary consumption ( MU) 4 Consumption by Kadamparai PSHES for pump mode ( MU) 5 Net generation available ( MU)

2010-11 2187 4789 23 369 4397

2011-12 2206 4831 23 369 4439

2012-13 2280 4993 23 369 4601

105

4.4.16 The financial loss or gain on account of variation in quantum of power purchase, if any, on account of changes in thermal hydro mix due to natural calamities shall be adjusted through credit / debit in Hydro Balancing Fund. 4.5 WIND BASED GENERATION

4.5.1 The TNEB had about 120 Numbers small and medium sized wind mills with an aggregate generation capacity of 19.355 MW upto 2006-07. 4.5.2 Wind mills with an aggregate capacity of 1.8 MW have been handed over to CWET. The TNEB has now wind mills with a generating capacity of 17.55 MW. 4.5.3 These wind mills are situated in the areas getting desired level of wind flow namely Aralvoimozhi, Shencottah and Palghat Passes, during Southwest monsoon seasons. The TNEB get infirm power from these wind mills during the period between May and September. 4.5.4 The generations from the Boards windmills during the period from 200304 were as below:
Table 62 Wind generation from TNEB owned wind mills

1 2 3

2003- 2004- 2005- 2006- 2007- 2008- 200904 05 06 07 08 09 10 Installed capacity in 19.355 19.355 19.355 19.355 17.55 17.55 17.55 MW Energy generated in 24.346 18.036 14.581 17.591 12.058 10.285 11.092 MU CUF (%) 14.36 10.64 8.60 10.38 7.84 6.69 7.21

4.5.5 The average generation in 2008-09 and 2009-10 i.e. after reduction in generation capacity was 10.69 MUs. 4.5.6 The TNEB has projected a generation of 10 MUs for each of the control period. This is accepted. 4.5.7 The total availability of energy from TNEBs own generating stations will be as below:
Table 63 Total availability of energy from TNEBs own generating stations

106

(In MUs)
Sl. No. 1. Details Gross Gen. 21824 2010-11 Aux. 2009 Net Gen. 19815 Gross Gen. 28816 2011-12 Aux. 2617 Net Gen. 26199 Gross Gen. 34439 2012-13 Aux. 3101 Net Gen. 31338

2.

3.

Coal based Thermal Stations Gas based Thermal Stations Hydel Generation

2461

144.35

2317

2619

154.35

2465

2619

154.35

2465

4789

392

4397

4831

392

4439

4993

392

4601

4.

Wind Mills Total

10 29084

2545.35

10 26539

10 36276

3163.35

10 33113

10 42061

3647.35

10 38414

4.6

Determination of quantum of energy to be purchased:

Table 64 Quantum of energy to be purchased

(In MUs) Sl. No. 1. 2. Details 2010-11 Net Input Energy Requirement Energy available in own generating stations Balance energy to be purchased from external sources 74085 26879 TNEB 2011-12 80012 33459 2012-13 86362 36836 2010-11 70933 26539 TNERC 2011-12 74453 33113 2012-13 78196 38414

3.

47206

46553

49526

44394

41340

39782

107

CHAPTER 5 POWER PURCHASE 5.1 The TNEB has submitted that they source power from the Generating Stations of National Thermal Power Corporation at Ramagundam and Talcher, Neyveli Lignite Corporations Thermal Stations and Nuclear Power Corporations power stations Madras Atomic Power Station (MAPS) at Kalpakkam and Kaiga Atomic Power Stations. They also get special allocation from Talcher for pooling equivalent quantum of power from NTPCs Kayankulam CCGT power station. Apart from this TNEB purchase power from seven Independent Power Producers (IPPs) in the State, surplus power from Captive Power Plants (CPPs), Co-generations and private Wind energy producers. 5.2 5.3 The energy availability from the above sources are arrived at as below: Central Generating Station :

5.3.1 The availability of energy from CGS is projected with reference to the Normative Annual Plant Availability Factor (NAPAF) specified in the CERC (Terms and Condition of Tariff) Regulation, 2009. In respect of Nuclear Power Generation, the energy entitlement is computed at NAPAF of 70%.
Table 65 Entitlement of energy from Central Generating Stations Sl. No. Name of the Station Installed Capacity (in MW) Allocated Capacity Firm Allocation (in MW) Allocation from UnAllocated Share (in MW) 10 15 33 58 14 23 Total Allocated Capacity (in MW) 475 186 280 226 528 132 498 NAPAF % Energy Entitlement on gross basis (in MU) 2996 1222 1840 1584 3931 983 3577

1. 2. 3. 4. 5. 6. 7.

Neyveli TS-I Neyveli TS-IIStg.-I Neyveli TS-IIStg.-II Neyveli TS-I-Exp. NTPC-RSTPSI & II NTPC-RSTPS-III NTPC Talcher-II

600 630 840 420 2100 500 2000

475 176 265 193 470 118 475

72 75 75 80 85 85 82

108

8.

9. 10.

Madras Atomic Project, Kalpakkam Kaiga Atomic Power Project External Assistance 23) NTPC Eastern Region Farakka (1.46%) Kahalgaon (1.44%) Talcher-I (1.46%)

440

328

330

70

2024

660

150

20

170

70

1042

1600 840 1000

23.3 12.1 14.6 75

0 0 0 0 -

23.3 12.1 14.6 75 180

85 85 82 85 85

} } } } } }

368

11. 12.

Special Allotment NTPC Kayankulam CCGTS Total 360

558 1340

180

2955

175

3130

21465

5.3.2 The following Capacity additions have been proposed during 2010-11 to 2012-13 under Central Sector. The energy available from these additional capacities is projected at 85% NAPAF for all Central Generating Stations and Joint Venture Projects. The energy from Kudankulam APS is projected at NAPAF of 85%. The projection for the proposed addition from Kaiga APS and Kalpakkam APS is made at 70% 5.3.3 The available energy for the stations except Kaiga APS, NLC stage II expansion and Simhadri is arrived at from the month following the latest expected month of commissioning. In respect of Kaiga APS, the project has not been commissioned as per schedule and the projection is now made from April 2011. In respect of NLC, the projection for the 1st unit has been made from Jan 2011 and for the 2nd unit from July 2011. In respect of Simhadri, the projections are made from April 2011 and June 2011. 5.3.4 The energy availability is determined as below :

109

Table 66 Projection of energy availability from Central Generating Stations

Sl. No.

Name of the Project

Installed Capacity MW 220

1.

2.

3. 4.

Kaiga Atomic Power Station Stage-II - Unit-IV Neyveli TS-IIExpansion Unit I Kudankulam APS Unit-I Simhadri Stage-II Unit-III Neyveli TS-IIExpansion Unit II Simhadri Stage-II Unit-IV Kudankulam APS Unit-II NTPC-TNEB JV at Vallur Stage-I Unit-I NTPC-TNEB JV at Vallur Stage-I Unit-II PFBR, Kalpakkam NLC-TNEB JV at Tuticorin Unit-I NLC-TNEB JV at Tuticorin Unit-II NTPC-TNEB JV at Vallur Stage-I Unit-III Total

Availabl e Capacity MW 36

NAPAF %

Latest expected month of commissioning May 2010 / April 2011

70

Energy availability (in MUs) 201 201 20120-11 1-12 13 221 221

250

163

85

June 2010 / January 2011

299

121 4 344 0 707

1214

1000 500

462 95

85 85

Dec. 2010 Dec. 2010 / April 2011

848

3440 707

5.

250

162

85

Feb. 2011 / July 2011

906

1206

6.

500

95

85

May 2011 / July 2011

589

707

7.

1000

463

85

June 2011

258 8

3447

8.

500

375

85

Nov. 2011

926

2792

9.

500

375

85

Dec. 2011

689

2792

10. 11. 12. 13.

500 500 500 500

167 247 247 375

70 85 85 85

March 2012 April 2012 Feb. 2013 Nov. 2012

1024 1688 156 926

3262

114 7

112 80

20320

5.4

Independent Power Producers (IPPs) :

5.4.1 There are 7 IPPs supplying power to TNEB under Power Purchase Agreement (PPA). 5.4.2 The IPP generators are entitled for incentive for generation beyond 68.4932%. 110

5.4.3 The energy availability is arrived at 85% PLF from the IPPs as below :
Table 67 Entitlement of energy from IPPs

Sl. No. 1. 2. 3. 4. 5. 6. 7.

Station

G.M.R. Power Corpn. Pvt. Ltd. Samalpatti Power Co. Pvt. Ltd. Madurai Power Corpn. Pvt. Ltd. PP Nallur Power Gen. Co. Pvt. Ltd. ST-CMS Electric Co. Ltd. Aban Power Co. Ltd. Penna Electric Co. Ltd. Total NCES and Infirm Sources :

Installed Capacity in MW 196.00 105.66 106.00 330.50 250.00 113.20 52.80 1154.16

PLF%

85 85 85 85 85 85 85

Energy Entitlement in MUs 1459 787 789 2461 1861 843 393 8593

5.5

5.5.1 Captive Power Plants (1) The TNEB has been purchasing the excess power from the Captive Power Plants of 214 MW capacity. (2) The TNEB in the petition have projected the following quantum of purchase from Captive Power Plants.
Table 68 Projection of energy from CPPs by TNEB

Purchase in MUs (3) (4)

2007-08 711

2008-09 828

2009-10 779

2010-11 671

2011-12 571

2012-13 371

The actual purchase during the year 2009-10 was 630.00 MUs. The projection for the control period is approved.

5.5.2 Co-generation and Biomass Generation : (1) The TNEB has been purchasing power from Bagasse Based Cogeneration and Biomass based power plants. The capacity on 31.03.2010 was as below: Biomass Cogen . . 137.05 MW 559.90 MW

111

5.5.3 The TNEB has projected the following quantum of purchase from these sources.
Table 69 Projection of energy from Co-generation and biomass generation by TNEB

Purchase from Cogeneration & Biomass generation in MUs

2007-08 1451

2008-09 1102

2009-10 1250

2010-11 1589

2011-12 1252

2012-13 889

5.5.4 As against the projected purchase of 1250 MUs in 2009-10, the actual purchase during the year was 837.00 MUs. The actuals during the period from 2007-08 to 2009-10 were fluctuating. The purchase for 2010-11 is projected with 10% increase over the actuals in 2009-10. 5.5.5 The TNEB has not considered the purchase obligation from 183 MW of generation capacity being established by co-operative sugar mills. The capacity is likely to commence generation from July 2011. 5.5.6 The purchase from Cogen in 2009-10 is around 17% of the capacity. Hence, the projection of purchase from additional capacity of 183 MW is made at 17%. The purchase of energy from the additional capacity would be as below: 2011-12 2012-13 . . 136 MUs (50% of 273 MUs) 273 MUs

5.5.7 The TNEB has projected reduced purchases from these sources for 201112 and 2012-13. As the purchase from these sources fall outside Merit Order Despatch, the purchases have been projected at the available capacity level. 5.5.8 The purchase from Bagasse Based Cogeneration and Biomass generation is fixed as below :
Table 70 Projection of energy from Co-generation and biomass generation by TNERC Bagasse Based Cogeneration & Biomass generation in MUs 2007-08 1451 2008-09 1102 2009-10 837 2010-11 921 2011-12 1149 2012-13 1387

112

5.6

Private Wind Mills :

5.6.1 The TNEB has submitted that there are 9160 WEG HT services for an installed capacity of 4889.765 MW at the end of 2009-10 as below:
Table 71 Wind energy installed capacity

WEG Capacity in MW

Board 111 17.55

Private 9049 4872.215

Total 9160 4889.765

5.6.2 The TNEB has projected the following purchases from private wind mills during the control period :
Table 72 Projection of wind energy purchase by TNEB

Source

Actuals

BE

Estimated Purchase

2007200820092010-11 2011- 2012-13 08 09 10 12 Private Wind 6055 6645 8283 8452 8152 8152 Mills MUs) (in

5.6.3 As against the projected generation of 8283 MUs during the year 2009-10, the actual generation from private wind mills was 8134.415 MUs, with an increase of 22.4% over the generation in 2008-09. The installed capacity also increased by 602.025 MWs. 5.6.4 The TNEB has reported that they expect a capacity addition of 645 MW in 2010-11. They have not furnished projected capacity addition for 2011-12 and 2012-13. 5.6.5 The TNEB has furnished month-wise capacity and generation details for the FY 2007-08, 2008-09 separately for the wind mills in Tirunelveli and Udumalpet areas. For 2009-10, the overall month-wise capacity addition and generation have been furnished. 5.6.6 The month-wise Capacity Utilization Factor (CUF) are as below :

113

Table 73 Month-wise Capacity Utilization Factor (CUF)

(CUF in %) Month April May June July August September October November December January February March 2007-08 Udumalpet Tirunelveli 3.59 4.71 9.52 11.36 33.61 31.09 45.93 30.20 43.43 36.00 41.92 30.11 36.02 27.30 4.45 10.15 2.63 10.50 3.21 15.75 3.16 10.33 3.84 10.17 2008-09 Udumalpet Tirunelveli 4.65 4.18 22.56 24.19 37.82 36.48 44.35 34.24 48.30 35.18 27.37 25.75 23.98 18.28 2.38 5.51 2.47 10.72 3.26 16.96 5.28 13.72 3.85 5.01 2009-10 3.70 21.51 43.30 40.34 44.80 29.01 30.98 5.37 5.68 9.46 11.38 4.68

5.6.7 Based on month-wise generation, weighted average CUF for 2007-08 to 2009-10 were as below : 2007-08 2008-09 2009-10 . . . 19.12% 18.91% 20.67%

5.6.8 The average of the above is 19.57%. 5.6.9 The capacity addition for 2011-12 and 2012-13 are assumed at 300 MW each year. 5.6.10 The purchase from Private Wind Mills is projected as below :
Table 74 Purchase from Private Wind Mills

Sl. No 1 2 3

Particulars 2009-10 Capacity at the end of 4872.215 the year (in MW) CUF (in %) Generation (in MU) 8134.415

2010-11 5517.215 19.57 9458

2011-12 5817.215 19.57 9973

2012-13 6117.215 19.57 10487

5.6.11 In para 8.18.4 of the comprehensive tariff order on wind energy (Order No.1 of 2009, dated 20-03-2009), the Commission has fixed the Renewable Energy Purchase Obligation at a minimum of 13% for 2009-10 and 14% for 2010-11. The details of actual energy purchase and projection for 2009-10 and 2010-11 are as below:

114

Table 75 Details of actual energy purchase and projection for 2009-10 and 2010-11

Sl. No 1 2 3 5.7

Details

2009-10

Input energy (in 67619 MU) Purchase from 8971 renewable (in MU) RPO % 13.26

2010-11 (Estimated) 70933 10379 14.63

Determination of quantum of Power Purchase :

5.7.1 Regulation 75(1) of the TNERC (Terms and Condition for Determination of Tariff) Regulation 2005, specifies the following: The Distribution Licensee shall procure power on least cost basis and strictly on Merit Order Despatch and shall have flexibility to procure power from any source in the country. 5.7.2 The quantum of energy units required to be purchased has been derived based on the Energy Input requirement for the control period less the quantum of energy units generated, to be generated through TNEBs own thermal, hydel and wind energy generating stations. 5.7.3 The energy to be purchased from must run station such as Nuclear Station (MAPS, KAPS, Kudankulam APS), infirm power sources such as co-generation, captive wind mills is outside the Merit Order Despatch. The energy available from Must Run station will be as below:
Table 76 Energy available from Must Run Station (Nuclear Station) Sl. No. Name of Station the Energ y Entitle -ment MU 2024 1042 Actuals 200708 MU 1064 564 200809 MU 904 613 200910 MU 1259 721 Propose d by TNEB MU for control period 1431 911 Projection by TNERC 201011 MU 1431 911 184 848 0 0 3374 201112 MU 1431 911 221 3440 2588 0 8591 201213 MU 1431 911 221 3440 3447 1024 10474

1. 2. 3. 4. 5. 6.

MAPS KAPS Additions Kaiga APS Kudankulam-I Kudankulam-II PFBR, Kalpakkam Total

115

5.7.4 The quantum of power purchase through Merit Order ranking will be as below :
Table 77

Quantum of power purchase through Merit Order ranking 2010-11 70933 26539 2011-12 74453 33113 2012-13 78196 38414

Description Energy input requirement in MU Less : Net energy available through own generation (Thermal, hydel and wind mill) in MU Energy to be purchased in MU Energy available from Nuclear, Infirm and NCES sources Energy to be purchased through Merit Order Ranking

44394 14424 29970

41340 20284 21056

39782 22719 17063

5.7.5 The Merit Order Ranking of various sources is shown below (The variable cost includes fuel price adjustment also). 5.8 Sl. No. Merit Order Ranking
Table 78 The Merit Order Ranking of various sources

Power Purchase Source

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

Neyveli TS-I Neyveli TS-II-Stage -I Neyveli TS-II-Stage -II Neyveli TS-Expansion NTPC SR I & II NTPC SR III NTPC Talcher-II NTPC ER NTPC Kayankulam IPPs G.M.R. Power Corpn. Ltd. Samalpatti Power Co. Ltd. PP Nallur Power Gen. Pvt. Ltd. Madurai Power Corpn.

Variable Cost Merit (Rs./kWh) Order 2008-09 2009-10 As per latest Ranking invoice 1.37 1.48 1.48 8 1.22} 1.345 1.36 6 1.32} 1.18 1.26 1.27 4 1.35 1.42 1.34 5 1.20 1.28 1.47 7 0.96 1.06 0.86 1 1.41 1.79 1.95 10 7.29 6.29 7.30 15 Pvt. Pvt. Co. Pvt. 4.97 5.08 6.19 5.20 6.01 6.05 5.42 5.72 6.58 6.23 3.13 6.17 116 14 13 11 12

14. 15. 16.

Ltd. ST-CMS Electric Co. Ltd. Aban Power Co. Ltd. Penna Electric Co. Ltd.

1.20 0.72 0.83

1.50 0.85 1.06

1.48 0.88 1.14

9 2 3

5.8.1 M/s PPN Power Generating Co. Ltd. have been using more gas from 11/2009 and hence the merit order has been arranged with the latest invoice, taking the per unit variable cost as Rs. 3.13 / kWh in December 2009 against Rs.6.19/kWh in 2008-09. 5.8.2 The energy unit available to TNEB from each of the external sources including proposed additional capacity has been arrived with reference to the NAPAF and quantum of power purchase during previous years. The energy available from infirm sources such as Biomass Plants, Bagasse based cogeneration plants and wind mills has been arrived at based on past trend and proposed capacity addition. 5.8.3 The quantum of energy to be purchased from all external sources including nuclear and NCES sources is fixed as detailed below considering the Merit Order Ranking:
Table 79 Quantum of energy to be purchased from all external sources (in MUs) Sl. No. Stations Energy Entitlem ent 2996 3062 1584 3931 983 3577 926 200910 201011 3027 2842 1434 3913 965 3636 743 TNEB 2011- 201212 13 3027 2842 1434 3913 965 3636 743 3027 2842 1434 3913 965 3636 743 201011 3250 2842 1434 3913 965 3636 743 TNERC 201112 2996 2842 1434 3913 965 3577 743 201213 2996 2842 1434 3913 965 3577 743

1. 2. 3 4. 5. 6. 7.

8. 9 10

CGS Neyveli TS-I Neyveli TSII Neyveli TSExpansion NTPC SR I & II NTPC SR III NTPC Talcher-II NTPC ER & Spl allotment NTPC Kayankulam Maps Kaiga

3270 3001 1485 4090 1101 3802 498

1340 2024 1042

1259 1259 721

1076 1431 911

926 1431 911

926 1431 911

1076 1431 911

926 1431 911

926 1431 911

117

11 12 13

14

15 16 17

18 19 20 21 22 23 24 25 26

27

CGS Additions NLC TS II NTPC Simhadri NTPC TNEB JV at Vallur NLC TNEB JV at Tuticorin Kaiga APS Kudankulam APS Kalpakkam PFBR Total CGS 21465 IPPs GMR 1176 Samalpatti 634 PPN 1983 Madurai 636 ST-CMS 1500 ABAN 679 Penna 317 Total IPP 6925 CPPs Biomass & Cogeneration Private Windmills Total 28390

1788

1750 872 3240

1750 1026 5468

299

1750 872 1615

1750 1026 6510

864

400

1601

1688

2824

3137 902

3766 902 34341 750 300 1600 300 1574 850 400 5774 371 889

848

221 3137

221 3766 1024

20486 1145 481 2260 467 1655 677 339 7024

25454 1418 722 2259 540 1809 850 400 7998 671 1589

30129 900 300 2000 300 1700 850 400 6450 571 1252

21348 1300 300 2259 540 1809 850 400 7458 671 921

27333 300 150 1406 179 1574 850 400 4859 571 1149

35723 300 150 1441 151 1574 850 400 4866 371 1387

8452 37111 44164

8152 46554

8152 49527

9458 39856

9973 43885

10487 52834

5.8.4 The energy availability is matched with the energy input requirement as below:
Table 80 Matching of energy availability with energy requirement

Description Energy input requirement in MU Energy required for demand supply mis match (in MU) Total Energy required (in MU) Less : Net energy available through own generation (Thermal, hydel and wind mill) in MU Energy to be purchased from external sources (in MU) Energy to be procured in the open market (in MU) Energy to be sold in the open market (in MU)

2010-11 70933

2011-12 74453 2000 76703 33113

2012-13 78196 2000 80696 38414

70933 26539

39856 4538

43885 2250 4545

52834 2000 15052

118

5.8.5 The TNEB may have to procure power to meet the short term requirement as well as to fill the demand supply mis-match from the open market and also to sell the surplus energy available at any point of time in the open market. 5.8.6 The estimate for 2011-12 and 2012-13 will be reviewed and re-fixed during the truing up of actuals for 2010-11subject to prudence check.

5.9

Power Purchase Cost

5.9.1 Regulation 75 (3), 75 (4) and 75 (5) in TNERC Tariff Regulations are extracted below: (3) The cost of power purchased from Central Generating Company shall be worked out based on tariff determined by the Central Electricity Regulatory Commission. (4) The cost of power purchased from IPPs shall be considered based on Power Purchase Agreement. (5) In case of power purchased from Captive Generators and other non conventional energy sources, the cost shall be worked out as per the policy approved by the Commission. 5.9.2 The following procedures have been adopted to determine the cost of power purchase: (1) The validity of tariff determined by the CERC for the period from 2004-05 to 2008-09 is already lapsed and the Central Generating Companies (NTPC and NLC) have filed petitions before the CERC for determination of Tariff applicable for the period from 01-04-2009 to 31-03-2014. (2) The NTPC has sought for single uniform rate of energy charges for all the five years with fuel cost adjustments and different annual capacity charges for each year. (3) NLC has sought for separate energy charges and capacity charges for each year of the five years period.

119

(4)

In respect of NLC TS I which is being operated beyond its life, NLC has sought for special allowance in addition to enhanced capacity charges and energy charges.

(5)

Tariff proposed in the petition before the CERC with 5% escalation on energy charges to take care of fuel cost adjustments has been considered for the purpose of estimating the cost of power purchase from the CGS (except nuclear stations). The special allowance proposed for NLC TS I is not considered.

(6)

The Nuclear Power Corporation of India Ltd, has indicated that the tariff for the Kudankulam Atomic power project and the PFBR project at Kalpakkam would be around Rs.3.50 per unit and this rate has been adopted for estimation.

(7)

For Joint Venture projects, the levelized tariffs indicated in the agreements have been adopted to estimate the power purchase cost.

(8)

For new NTPC station at Simhadri (expansion) and NLC II Expansion, the rates for the similar capacity stations at these locations have been adopted.

(9)

The cost of power purchase from IPPs has been estimated with reference to PPAs.

(10) The cost of power from CPP, Biomass, Co-gen and windmills has been estimated with reference to applicable Tariff Order of the Commission. (11) The Transmission charges payable to PGCIL have been estimated with reference to the petition before the CERC. (12) During 2009-10, the TNEB has purchased power in open market at a price ranging from Rs.5.08 per unit to Rs.10.46 per unit with an over all average of Rs.5.49 per unit. It is seen from the data available in public domain that the prevailing rates of UI and Power Exchange were in the range of Rs.3.00 to Rs.4.00 per unit during first quarter of 2010-11, which is the peak season for the country as

120

a whole. Accordingly, it will be appropriate to estimate the market power procurement at an average rate of Rs.5.00 per unit and the sale of surplus power is also to be considered at the same rate. (13) The surplus power projected for 2011-12 and 2012-13 is accounted for average power purchase cost. (14) The Commission approves the following power purchase cost for the period from 2010-11 to 2012-13.
Table 81 TNERC approved power purchase cost for the year 2010-11

Year 2010-11
Sl. No Stations Units (in MU) Variable cost (in Ps/unit) Total variable cost (Rs.in Crores) Fixed charges (Rs.in Crores) 340.35 173.09 172.85 194.44 91.67 285.11 28.03 131.76 Total Cost (Rs.in Crores)

1 2 3 4 5 6 7 8

CGS Neyveli TS-I Neyveli TS-II Neyveli TS-Expansion NTPC SR I & II NTPC SR III NTPC Talcher-II NTPC ER & Spl allotment NTPC Kayankulam

3250 2842 1434 3913 965 3636 743 1076

202.65 190.00 170.00 156.73 114.25 120.69 190.68 617.59

658.61 539.98 243.78 613.28 110.25 438.83 141.68 664.53

998.96 713.07 416.63 807.72 201.92 723.94 169.71 796.29

9 10 11 12 13 14 15 16 17 18

Maps Kaiga CGS Additions NLC TS II Expansion NTPC Simhadri NTPC - TNEB JV at Vallur NLC - TNEB JV at Tuticorin Kaiga APS Kudankulam APS Kalpakkam PFBR Power Grid Total CGS IPPs GMR Samalpatti PPN Madurai ST-CMS

1431 911 299

193.11 320.18 202.62

276.34 291.68 60.58 30.61

276.34 291.68 91.19

848

350.00

296.80 512.00 1959.91 172.76 99.54 297.04 107.82 258.91

296.80 512.00 6296.26 1028.45 310.64 1003.59 440.86 526.06

21348 1300 300 2259 540 1809 658.22 703.66 312.77 616.74 147.68

4336.35 855.69 211.10 706.55 333.04 267.15

14 15 16 17 18

121

19 20 21 22 23 24 25

ABAN Penna Total IPP Traders CPPs Biomass Co-Gen Private Windmills Total

850 400 7458 4538 671 111 810 9458 44394

226.00 274.00 500.00 384.00 466.00 392.00 359.40

192.10 109.60 2675.22 2269.00 257.66 51.73 317.52 3399.21 13306.69

936.07

192.10 109.60 3611.29 2269.00 257.66 51.73 317.52 3399.21 16202.67

2895.98

Table 82 TNERC approved power purchase cost for the year 2011-12

2011-12
Sl. No. Stations Units (in MU) Variable cost (in Rs/unit) Total variable cost (Rs.in Crores) 654.33 569.96 261.09 613.28 110.25 431.71 141.68 571.89 276.34 291.68 Fixed charges (Rs.in Crores) 353.18 181.91 199.97 204.80 91.94 287.32 28.95 131.89 0.00 0.00 Total Cost (Rs.in Crores)

CGS 1 2 3 4 5 6 7 8 9 10 Neyveli TS-I Neyveli TS-II Neyveli TS-Expansion NTPC SR I & II NTPC SR III NTPC Talcher-II NTPC ER & Spl allotment NTPC Kayankulam Maps Kaiga CGS Additions 11 12 13 14 15 16 17 18 NLC TS II NTPC Simhadri NTPC TNEB JV at Vallur NLC TNEB JV at Tuticorin Kaiga APS Kudankulam APS Kalpakkam PFBR Power Grid 1750 872 1615 221 3137 202.62 171.86 246.00 292.00 350.00 350.00 350.00 77.35 1097.95 354.59 149.86 397.29 211.00 135.00 0.00 0.00 0.00 0.00 0.00 538.00 2996 2842 1434 3913 965 3577 743 926 1431 911 218.40 200.55 182.07 156.73 114.25 120.69 190.68 617.59 193.11 320.18 1007.51 751.87 461.06 818.08 202.19 719.03 170.63 703.78 276.34 291.68 0.00 565.59 284.86 397.29 0.00 77.35 1097.95 0.00 538.00

122

Total CGS IPPs 19 20 21 22 23 24 25 GMR Samalpatti PPN Madurai ST-CMS ABAN Penna Total IPP 26 27 28 29 30 Traders CPPs Biomass Co-generation Private Windmills Total Less: Sale of surplus power Net power purchase cost

27333

5999.25

2363.96

8363.21

300 150 1406 179 1574 850 400 4859 2000 571 111 1038 9973 45885 4545 41340

691.13 738.84 328.41 647.58 155.06 237.30 287.70

207.34 110.83 461.74 115.92 244.07 201.71 115.08 1456.68

174.45 99.08 292.80 105.37 250.11

381.79 209.91 754.54 221.29 494.18 201.71 115.08

921.81

2378.49 1000.00 219.26 53.31 509.66 3584.30

500.00 384.00 480.30 491.00 359.40

1000.00 219.26 53.31 509.66 3584.30 12822.46 3285.77

16108.23 2272.50

500.00

2272.50 10549.96 3285.77

13835.73

Table 83 TNERC approved power purchase cost for the year 2012-13

2012-13
Sl. No. Stations Units (in MU) Variable cost (in Rs/unit) Total variable cost (Rs.in Crores) Fixed charges (Rs.in Crores) Total Cost (Rs.in Crores)

CGS 1 2 3 4 5 6 7 Neyveli TS-I Neyveli TS-II Neyveli TS-Expansion NTPC SR I & II NTPC SR III NTPC Talcher-II NTPC allotment ER & Spl 2996 2842 1434 3913 965 3577 743 235.20 200.55 190.68 156.73 114.25 120.69 190.68 704.66 569.96 273.44 613.28 110.25 431.71 141.68 438.96 190.24 201.46 211.40 91.37 288.29 30.01 1143.62 760.20 474.90 824.68 201.62 720.00 171.69

123

8 9 10

NTPC Kayankulam Maps Kaiga CGS Additions

926 1431 911

617.59 193.11 320.18

571.89 276.34 291.68 0.00

111.13 0.00 0.00

683.02 276.34 291.68 0.00

11 12 13 14 15 16 17 18

NLC TS II NTPC Simhadri NTPC TNEB JV Vallur NLC TNEB JV Tuticorin Kaiga APS Kudankulam APS Kalpakkam PFBR Power Grid Total CGS IPPs at at

1750 1026 6510 1688 221 3766 1024 0 35723

202.62 180.45 246.00 292.00 350.00 350.00 350.00 0.00

354.59 185.14 1601.46 492.90 77.35 1318.10 358.40

242.00 135.00 0.00 0.00 0.00 0.00 0.00 564.90

596.59 320.14 1601.46 492.90 77.35 1318.10 358.40 564.90 10877.58

8372.82

2504.76

19 20 21 22 23 24 25

GMR Samalpatti PPN Madurai ST-CMS ABAN Penna Total IPP

300 150 1441 151 1574 850 400 4866 2000 371 111 1276 10487 54834 15052 39782

725.69 775.78 344.83 679.96 162.81 244.42 296.33

217.71 116.37 496.90 102.67 256.26 207.76 118.53 1516.20

176.22 99.08 290.89 105.18 241.31 0.00 0.00 912.68

393.93 215.45 787.79 207.85 497.57 207.76 118.53 2428.88 1000.00

26 27 28 29 30

Traders CPPs Biomass Co-generation Private Windmills Total

500.00 384.00 480.30 491.00 359.40

1000.00 142.46 53.31 626.52 3769.03 15480.34 0.00 0.00 0.00 0.00 3417.44

142.46 53.31 626.52 3769.03 18897.78 7526.00

31

Less: Sale of surplus Energy Net Power Cost Purchase

500.00

7526.00 7954.34 3417.44

11371.78

124

(15)

Under Regulation 3 (vii) of MYT Regulations, the variation on account of sales and power purchase shall be reviewed at the end of each year of the control period based on audited accounts of the licensee and prudence checks by the Commission.

125

CHAPTER 6 EXPENDITURE

6.1

Segregation of Accounts

6.1.1 The TNEB is functioning as an integrated utility and maintain consolidated accounts for all the functions. 6.1.2 In view of the provisions contained in the Tariff Regulations, the Commission is required to determine generation tariff, tariff for Intra-State transmission and retail tariff for distribution separately. It is therefore imperative to segregate the accounts function wise. 6.1.3 The Commission in its letter dated 22-01-2010, directed the TNEB to furnish split up details for variable cost and fixed capacity charges (cost statement) for TNEBs own generating stations on normative basis. 6.1.4 The Commission also directed the TNEB in letter dated 22-01-2010 to furnish the wheeling charges, surcharge / additional surcharge for each year of the control period for the Commissions consideration and approval. 6.1.5 The Commission in letter dated 19-02-2010, directed that TNEB may file separate statement for thermal, gas (Station wise) and hydro stations in the formats specified in the tariff Regulations duly segregating loans and assets and allocating proportionate interest and finance charges, RoE, etc. 6.1.6 The TNEB in letter dated 24-02-2010, submitted the asset details and expenses for total annual transmission charges. 6.1.7 The TNEB in letter dated 18-04-2010, submitted the station wise summary of tariff proposal, normative parameters considered for tariff computation, assets and interest workings and O & M expenses. The variable cost of each station was not computed and furnished. 6.1.8 In letter dated 23-04-2010, the TNEB has submitted the details for calculation of wheeling charges.

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6.1.9 The segregation of gross fixed assets is required to compute the various components constituting fixed (capacity) charges. 6.1.10 In the Annual Statement of Accounts of TNEB, gross fixed assets and depreciation are exhibited function wise. The TNEB has stated that they have adopted the following assumptions in segregating the expenditures. 6.1.11 The borrowings and interest on borrowings (for which accounts are maintained centrally at Head Quarters) have been allocated between all the functions in the ratio of gross fixed assets. 6.1.12 The TNEB has separate accounts for each generating station. Out of the total operation and maintenance (O & M) expenses in the consolidated annual statement of accounts, the expenses relating to generating stations have been segregated based on the expenses recorded in the balance sheet of respective generation station. The balance O & M expenses relating to transmission and distribution have been allocated in proportion to the gross fixed assets of these functions. 6.1.13 Taking into account information in this Order, TNEB shall file a petition for determination of wheeling charges, surcharge / additional surcharge.

6.2 Commissions Analysis and decision on Allocation of expenditures to various functions 6.2.1 Capital Cost / Fixed Assets 6.2.1.1 The TNEB has submitted the following information on gross fixed assets and net fixed assets:
Table 84 Details of gross and net fixed assets furnished by TNEB

(Rs. In Crores)
Sl. No. 1 Details 2007-08 (Audited A/Cs) 21565.91 2008-09 (Prel. A/Cs) 23503.56 2009-10 2010-11 2011-12 2012-13

2 3

Gross Fixed Assets at the beginning Addition during the year Deductions

25016.17

27329.83

29874.97

32676.42

4585.69

2163.98

2313.66

2545.14

2801.45

3085.38

127

5 6 7 8

during the year Gross Fixed Assets at the end of the year Net depreciation for the year Accumulated Depreciation Net Fixed Assets Work in Progress

2648.04 23503.56

651.37 25016.17

0 27329.83

0 29874.97

0 32676.42

0 35761.80

666.40 9400.34 14103.22 3008.37

774.43 10174.77 14841.40 4032.78

992.49 11167.26 16162.57 4032.78

1086.36 12253.62 17621.35 4032.78

1189.81 13443.43 19232.99 4032.78

1303.86 14747.29 21014.51 4032.78

6.2.2 Addition to capital cost / additional capitalization 6.2.2.1 The TNEB has proposed addition to Gross Fixed Assets (additional capitalization) for the control period without identifying the specific asset. 6.2.2.2 The TNEB maintain the value of work in progress (pending capitalization) at the end of each year of control period at Rs.4032.78 Crores. 6.2.2.3 Regulation 17 (5) of the Tariff Regulations, 2005 and Regulation 3 (v) of the Tariff Regulation under MYT framework specifies that the licensee shall get the capital investment plan approved by the Commission before filing ARR and Application for determination of Tariff. The TNEB has not complied with this provision. 6.2.2.4 The TNEB submitted the capital investment plan for 2009-10 and 2010-11 in their letter dated 17-12-2009 and the capital investment plan for 2011-12 and 2012-13 in letter dated 31-03-2010 without capitalization schedule. 6.2.2.5 The TNEB has proposed capital investments for the control period as below:
Table 85 Capital investments proposed by TNEB

(Rs.in Crores) Project Details 2010-11 2011-12 2012-13 Generation MTPS Stage III (1 X 600 MW) 2090.00 997.52 NCTPS Stage II unit I (1 X 600 MW) 2508.22 NCTPS Stage II unit II (1 X 600 1163.00 MW) 128

ETPS Annexure SEZ at Kattupalli (2 X 800 MW) Bhavani Kattalai Barrage II (2 X 15 MW) Bhavani Kattalai Barrage III (1 x 30 MW) Bhavani Barrage I SHEP (1 x 10 MW) Bhavani Barrage II SHEP (1 x 10 MW) Periyar Vaigai SHEP I (2 x 2 MW) Periyar Vaigai SHEP II (2 x1.25 MW) Periyar Vaigai SHEP III (2 x 2 MW) Periyar Vaigai SHEP IV (2 x 1.25 MW) Renovation & Modernization TTPS MTPS Periyar hydel generation Total generation Transmission Distribution Total 6.2.2.6

7.17 57.26 63.29 25.22 24.98 3.30 7.52 4.27 6.58

28.00 804.93 4.86 4.22

8801.00

2289.59 1720.72 771.59 4781.90

142.02 43.70 57.10 5753.57 1600.00 1461.43 8815.00

100.87 63.70 8965.57 1760.00 1692.85 12418.42

According to TNEB, the projects, (except, the project at ETPS (Annexure) and SEZ at Kattupalli) are scheduled to be commissioned during the control period.

6.2.2.7

Regulation 6 (7) (i) (a) of the TNERC Tariff Regulations, 2005 specifies the following: A generation company or a licensee may make an application as per Appendix I to these Regulations, for determination of provisional tariff in advance of the anticipated date of completion of the project, based on the capital expenditure actually incurred upto the date of making of the application or a date prior to making of the application, duly audited and certified by the statutory auditors, and the provisional tariff shall be charged from the date of commercial operation of the respective units of the generation station or the line or sub-station of the transmission system.

129

6.2.2.8

The TNEB had neither sought prior approval of their capital investment plan nor applied for determination of tariff in advance for the above generating stations. However, the Commission is required to determine tariff for the new generating stations under Regulation 43 and hence, the capital costs of these projects are also required to be ascertained by the Commission.

6.2.2.9

The capital cost of the above projects as furnished in the capital investment plan are as below:
Table 86 Capital Cost of the New Generation Projects

Sl. No

Projects

Estimated capital cost (Rs in Crores)

Cost per MW (Rs.in Crores)

1 2 3 4 5

MTPS Stage III (1 X 600 MW) NCTPS Stage II unit I (1 X 600 MW) NCTPS Stage II unit II (1 X 600 MW) Bhavani Kattalai Barrage II (2 X 15 MW) Bhavani Kattalai Barrage III (1 x 30 MW)

3552.13 3097.09 2718.75 400.59 396.60

5.92 5.16 4.53 13.35 13.22

6 7 8 9 10 11

Bhavani Barrage I SHEP (1 x 10 MW) Bhavani Barrage II SHEP (1 x 10 MW) Periyar Vaigai SHEP I (2 x 2 MW) Periyar Vaigai SHEP II (2 x1.25 MW) Periyar Vaigai SHEP III (2 x 2 MW) Periyar Vaigai SHEP IV (2 x 1.25 MW)

141.380 151.73 49.19 40.07 58.84 46.66

14.14 15.17 12.30 16.028 14.71 18.664

6.2.2.10 The estimated per MW capital of hydro generating plant is very high. The original cost of the small hydro projects per MW approved by the CEA was in the range of Rs. 3.30 to Rs.6.00 Crores. The TNEB has explained that the increase in cost is due to escalation, tender premium and variations in technical parameters of Weir and power house. 6.2.2.11 The Commission in the Power Procurement from New and Renewable Sources of Energy Regulations, 2008.specifies the following :

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The Commission shall by a general or specific order, determine the tariff for the purchase of power from each kind of new and renewable sources based generators by the distribution licensee. In case of small hydro projects with a capacity of more than 5 MW but not exceeding 25 MW capacities Commission decides the tariff on case to case basis.

6.2.2.12 The Periyar Vaigai small hydro electric projects under execution by TNEB are of capacity of less than 5 MW. 6.2.2.13 The CERC in CERC (Terms and conditions for tariff determination for Renewable energy sources) Regulations 2009 has specified the

normative capital cost of the small hydro projects for the control period 2009-10 as below:
Table 87 CERCs Normative Capital Cost of the Small Hydro Projects

Capacity Base capital cost (Rs in lakhs / MW)

Below 5 MW 550.00

5 MW and above 500.00

6.2.2.14 The capital cost for the subsequent year computed as per the capital cost indexation mechanism detailed in the CERCs Regulation is Rs.561.204 lakhs / MW and Rs. 509.79 lakhs / MW for the project below 5 MW and above 5 MW respectively. 6.2.2.15 The capital investment plan requires further analysis and explanation from TNEB before according approval of cost proposed by TNEB. Pending approval, the provisional cost is considered as below: (1) Thermal stations - MTPS stage III Rs.5.92 Crores / MW (with cooling tower) and NCTPS stage II Rs.4.85 Crores / MW (without cooling tower) (2) Hydro station - upto 5 MW Rs.561.204 lakhs / MW and

Above 5 MW Rs.509.796 lakhs / MW (3) The capitalization of transmission and distribution are projected as per the capital investment plan (4) The assets like 230 KV SS, 110 KV SS and EHT lines established to evacuate the power from private wind mills are held as wind 131

mill assets, are allocated to transmission. The expenditures on EHT sub-station proposed by WEDC to evacuate wind power have also been projected as transmission asset. (5) The balance in work-in-progress at the end of 2008-09 and the capital expenditure during 2009-10 have also been considered to arrive at the gross fixed assets for the control period. 6.2.2.16 The TNEB in the statement showing gross fixed assets and depreciation furnished with letter dated 18-04-2010, proposed the following addition to fixed assets of the existing generating stations during the control period:
Table 88 Addition to Fixed Assets by TNEB to the existing generating stations

(Rs.in Crores)
Sl. No 1 2 3 4 5 6 7 8 9 10 11 Stations ETPS NCTPS MTPS TTPS BBGTPS Kovilkalappal Valuthur Hydro Generating Erode Hydro Generating Kadamparai Hydro Generating Kundah Hydro Generating Tirunelveli Total 2010-11 31.50 27.55 5.63 58.87 0.41 63.63 118.11 6.36 1.69 16.37 33.63 363.75 2011-12 32.57 27.94 6.15 135.53 0.42 73.09 140.40 6.42 1.70 16.65 37.50 478.37 2012-13 33.67 28.31 6.18 105.00 0.42 83.94 166.90 6.48 1.71 16.95 41.84 491.4

stations under stations under stations under stations under

6.2.2.17

Perusal of previous annual statement of accounts of TNEB shows that such additions happen year on year with un-capitalized expenditure on work-in-progress (WIP) at the end of each year. Any addition to existing asset will have its impact on tariff.

6.2.2.18 Under Regulation 19 (1) (vi), the capitalization of additional work can be allowed only if such works have become necessary for efficient and successful operation of the generating station. 6.2.2.19 The above additions and also the proposed expenditure on renovation and modernization have not been considered as the necessity for the 132

expenditure has not been explained in the petition. The TNEB shall furnish a separate proposal for approval of the additional capitalization with details of assets to be replaced. 6.2.2.20 The value of gross fixed assets as per the audited accounts for the year 2007-08 and the preliminary accounts for the year 2008-09 have been considered for projecting the fixed asset value for the control period duly taking into account the work in progress as on 31-03-2009, capital investments plan and capital expenditure plan furnished in the capital investment plan for 2010-11, 2011-12 and 2012-13. 6.2.2.21 The capital expenditure furnished for ETPS annex and SEZ at Kattupalli have not been considered as the projects have not been projected as capacity addition.

6.2.3 The Commission fixes the Gross Fixed Assets (GFA) for the control period as below:
Table 89 Gross Fixed Assets (GFA) fixed by the Commission

(Rs.in Crores)
Sl. No Particulars Value of Asset 1 at the beginning Additions 2 during the year Asset at the 3 end of the year 4 WIP at the end 27655.96 30018.51 43253.69 45116.88 4782.77 2362.55 2791.09 4978.62 2639.79 2362.55 13235.18 1863.19 25016.17 27655.96 30018.51 43253.69 2009-10 2010-11 2011-12 2012-13

6.2.4 The GFA at the end of each year of the control period is allocated to different functions as below:

133

Table 90 Allocation of Gross Fixed Assets to different functions of TNEB

(Rs.in Crores)
Functions 1 2 3 4 5 6 I 1 2 3 4 II 1 2 3 4 III V 1 2 IV V VI VII VIII Generation ETPS NCTPS MTPS TTPS NCTPS II MTPS II Total Thermal BBGTPS Kuttalam Kovilkalappal Valuthur Total Gas Erode Kadamparai Kundah Tirunelveli Total Hydro Total Gen Assets Tirunelveli - Wind Udumalpet - Wind Total Wind Total Generation Transmission Distribution Grand Total 5712.90 548.58 346.14 373.11 798.98 2066.81 719.65 348.14 908.35 317.76 2293.90 10073.61 145.31 90.32 235.63 10325.69 8520.58 11188.69 30018.51 2010-11 961.60 1969.76 982.31 1799.23 2011-12 961.60 1969.76 982.31 1799.23 6054.35 3697.81 15465.06 548.58 346.14 373.11 798.98 2066.81 1123.24 348.14 908.35 341.13 2720.86 20252.73 145.31 90.32 235.63 20504.81 10241.30 12524.02 43253.68 2012-13 961.60 1969.76 982.31 1799.23 6054.35 3697.81 15465.06 548.58 346.14 373.11 798.98 2066.81 1123.24 348.14 908.35 341.13 2720.86 20252.73 145.31 90.32 235.63 20504.81 11012.89 13615.62 45116.87

6.3.

Interest on Loan Capital:

6.3.1 Regulation 23 (interest and Finance charges on loan capital) in chapter III of the Tariff Regulation specifies the following: (a) Interest on loan capital shall be computed loan wise on the loan arrived at in the manner set out in Regulation 21.

134

6.3.2 Regulation 21 specifies that where equity employed is more than 30% (of capital employed) the amount of equity shall be limited to 30% and the balance amount shall be considered as loans, advanced at the weighted average rates of interest and for weighted tenure of the long term debt component of the investment. 6.3.3 As the equity is less than 30%, carrying forward of additional equity to loan account does not arise. 6.3.4 The TNEB furnished the calculation of loan wise interest statement in Form 16 of ARR. 6.3.5 The loan wise interest as claimed by TNEB is as below:

Table 91 Loan wise interest claimed by TNEB 2010-11 Institutions Outstandi ng at the end of the year Interest payable

(Rs.in Crores)
2011-12 2012-13 Outstandi ng at the end of the year Interest payable

Outstandi ng at the end of the year

Interest payable

Public TNEB Bonds LIC REC & REC/Bank CIA PFC PFC/ADB TNPFC NABARD TNPFC Lease MTL ICICI/STL APDRP PMGY HUDCO RGGY Security Deposit Interest on GPF & Hydro Balancing fund

3294.68 1277.16 5989.32 120.45 3118.60 7600.41 43.50 0.00 4267.06 1000.00 205.25 19.28 1872.17 42.33

362.42 140.49 658.83 13.25 343.05 0.00 836.04 4.78 0.00 469.38 113.30 22.58 2.12 205.94 4.66 236.78 116.05

4061.09 1218.80 7580.67 120.45 4018.10 8861.73 10.30 0.00 4873.72 1000.00 189.44 17.56 2437.41 42.33

446.72 134.07 833.87 13.25 441.99 0.00 974.79 1.13 0.00 536.11 113.30 20.84 1.93 268.11 4.66 246.25 120.69

4991.09 1601.30 8310.39 120.45 3604.10 11288.06 -21.32 0.00 5845.98 1000.00 171.27 15.92 2881.77 74.13

549.02 176.14 914.14 13.25 396.45 0.00 1241.69 -2.34 0.00 643.06 113.30 1.74 0.19 316.99 8.15 256.10 125.52

135

Other interest Total Less: Capitalizations Net Interest & Finance charges 28850.21

407.84 3937.51 472.50 28850.21 3465.01 34431.60 34431.60

424.16 4581.87 549.82 4032.05 39883.14 39883.14

441.12 5194.52 623.34 4571.18

6.3.6 On the direction of the Commission in letter dated 22-01-2010 and 19-022010, the TNEB furnished the statements showing the function wise loan allocation in letter dated 24-02-2010 for transmission and in letter dated 18-04-2010 for generation. 6.3.7 Raising of debts through TNEB bonds and loans from financial institutions, their servicing, accounting etc are done centrally at headquarters of TNEB. 6.3.8 The TNEB has allocated the loans based on the value of GFA. However, the loans from PMGVY and RGGVY that are exclusively for distribution have been allocated fully to distribution. REC is financing NCTPS expansion (Stage II) also and hence, loan from REC is allocated to both generation and distribution. The loans from APDRP that are both for Transmission and Distribution have been allocated to these functions. 6.3.9 The TNEB is borrowing funds to meet the repayment obligations, payment of interest on borrowings, capital expenditure and also to meet the revenue expenditure in view of consistent revenue deficit for the past seven years. 6.3.10 In the ARR the TNEB has adopted a weighted average interest rate of 13.02% for TNEB bonds and 9.05% for loan from LIC. However, the outstanding TNEB bonds carry interest rates ranging from 7% to 11.60% as per the Annual Statement of Accounts 2007-08 and 2008-09. The loans from LIC carry interest at 11%, 8.8%, 9.5% and 13%. 6.3.11 The Commission in letter dated 19-02-2010, directed the TNEB to furnish the schedule of repayment of loan installments and payment of interest with quantum for the existing loans and schedule of drawal, interest rate,

136

moratorium period and tenure of loan for the proposed borrowings, so as to check the proposed interest expenditure. 6.3.12 The TNEB in letter dated 07-04-2010, furnished the redemption schedule for TNEB bonds, repayment schedule for PFC and REC loans, schedule of repayment of principal and payment of interest for LIC loans, TNPFC and other loans. All these details were furnished only for existing loans. The schedule of drawal, etc for the proposed borrowings were not furnished. 6.3.13 The projected borrowings and interest rates were discussed with the officials of TNEB and the details were obtained. 6.3.14 The outstanding loan and interest thereon has been allocated on net asset basis after check. The outstanding loan at the end of the financial year 2009-10 furnished by the TNEB was revised taking into account, the actual borrowing and repayment during the year 2009-10. 6.3.15 The TNEB has claimed Rs.236.78 Crores, Rs. 246.25 and Rs.256.10 Crores as Interest on security deposit for the control period. The adequacy of security deposits from consumers who are billed monthly is reviewed every year and that of consumers who are billed bi-monthly is reviewed once in two years. The TNEB in letter dated 07-04-2010 have projected Rs.510.47 Crores, Rs.547.58 Crores and 594.92 Crores for control periods as addition to security deposit. The review of past additions to security deposit shows that the projections are not correct and also the interest on security deposit based on such addition is much higher. The amount claimed by TNEB is accepted and this will be reviewed at the time of truing up. 6.3.16 The TNEB has claimed Rs.116.05 Crores, 120.69 Crores and 125.52 Crores towards interest on GPF and Hydro balancing fund for the control period. The actual interest on GPF for the year 2007-08 was Rs.57.25 Crores and for 2008-09 was Rs.60.46 Crores. Considering the salary hike on implementation of wage revision settlement, the mandatory

subscription to GPF will get increased and hence the interest on GPF has

137

been fixed at Rs.70 Crores, 71 Crores and 73 Crores for the control period. 6.3.17 The TNEB has claimed Rs.407.84 Crores, Rs.424.16 Crores and Rs.441.12 Crores as other interest for the control period. But, as per the annual statement of accounts for 2008-09, the other unclassified interest and cost of raising finance, bank charges, penal interest for E.Tax and guarantee commission to State Government were Rs.146.82 Crores. Hence, other interest charges have been projected with 4% increase on the actuals for the year 2008-09. 6.3.18 The claim of interest on hydro balancing fund is not considered as the same cannot be passed on to the consumer. 6.3.19 The TNEB has not furnished the details for computing Interest during construction, revenue expenditure incurred in project consecration. Hence, the capitalization of interest as furnished by TNEB has been accepted and net interest allocated function wise. 6.3.20 The loan wise interest admitted by the Commission is as below:
Table 92 Loan wise interest admitted by TNERC 2010-11 Institutions Outstandi ng at the end of the year 3834.48 858.51 5770.67 0 2936.22 0 6482.91 42.51 0 8636.79 2000.00 330.35 19.74 Interest payable

(Rs.in Crores)
2012-13 Outstandi ng at the end of the year 5530.89 682.30 8750.87 0 3664.77 0 7976.69 8.48 0 8731.78 2000.00 298.75 16.88 Interest payable

2011-12 Outstandi ng at the end of the year 4600.89 775.89 7148.52 0 3918.52 0 7454.69 20.70 0 8151.37 2000.00 314.55 18.31 Interest payable

Public TNEB Bonds LIC REC & REC/Bank CIA PFC PFC/ADB TNPFC NABARD TNPFC Lease MTL ICICI/STL APDRP PMGY

312.33 97.34 658.83 0 343.05 0 556.71 5.96 0 803.53 334.15 21.32 2.45

380.41 90.81 833.87 0 441.99 0 655.07 3.32 0 839.41 170.00 19.74 2.28

449.10 81.83 914.14 0 396.45 0 725.27 1.53 0 844.15 170.00 18.16 2.11

138

HUDCO RGGY Interest on Security Deposit Interest on GPF Other interest Total Less: Capitalizations Net Interest & Finance charges

1610.23 13.42 0 0 0 32535.83

145.94 1.41 236.78 70.00 158.80 3748.60 472.50

2144.38 13.42 0 0 0 36561.24

196.45 1.41 246.25 71.00 165.15 4117.16 549.82

2521.32 13.42 0 0 0 40196.15

244.12 1.41 256.10 73.00 171.76 4349.13 623.34

32535.83

3276.11

36561.24

3567.34

40196.15

3725.79

6.3.21 The loan wise interest admitted by the Commission is allocated to the various functions as below:
Table 93 Function wise Allocation of Interest on Loan (Rs Sl.No Station 2010-11 Net Assets Interest 496.11 659.07 290.12 694.37 78.41 104.17 45.85 109.75

in Crores)
2012-13 Net Interest Assets 432.45 61.84 528.67 75.60 225.10 32.19 575.27 82.26 5725.72 216.18 3488.64 182.0 10975.85 91.04 212.63 178.78 594.96 1077.41 833.59 170.00 624.23 224.31 1852.13 86.61 72.01 158.62 14064.01 7632.53 9651.96 31348.50 650.37 13.02 30.41 25.57 85.08 154.07 119.20 24.31 89.27 32.08 264.86 12.39 10.30 22.68 1091.98 1158.59 1475.21 3725.79

1 2 3 4 5 6 I 1 2 3 4 II 1 2 3 4 III 1 2 IV V VI VII VIII

ETPS NCTPS MTPS TTPS NCTPS II MTPS II Total Thermal BBGTPS Kuttalam Kovilkalappal Valuthur Total Gas Erode Kadamparai Kundah Tirunelveli Total Hydro Tirunelveli - Wind Udumalpet Wind Total Wind Total Generation Transmission Distribution Grand Total

2011-12 Net Interest Assets 464.28 64.99 593.87 83.13 257.61 36.06 634.82 88.86 5926.12 216.18 3611.04 182.30 11487.74 109.20 224.09 191.13 621.41 1145.83 870.77 181.52 654.30 235.60 1942.19 91.42 75.00 166.42 14742.18 7212.89 8993.88 30948.95 671.52 15.29 31.37 26.75 86.99 160.39 141.79 25.41 91.59 34.13 292.92 12.80 10.50 23.30 1148.13 1094.49 1324.72 3567.34

2139.67 127.36 235.55 203.48 647.86 1214.25 502.19 193.04 684.37 223.51 1603.11 96.23 77.99 174.22 5131.25 5803.10 8051.32 18985.67

338.18 20.13 37.23 32.16 102.39 191.91 86.23 30.51 108.16 42.13 267.03 15.21 12.33 27.54 824.66 1023.39 1428.07 3276.11

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6.4

Return on Equity (RoE)

6.4.1 Regulation 22 of Tariff Regulation specifies the following: Return on equity shall be computed on the equity base determined in accordance with Regulation 21 @14% per annum. The return shall be allowed post tax. 6.4.2 The TNEB in the petition claimed reasonable return (3%) on the capital base as per the Electricity (Supply) Annual Accounts Rule 1985. The Commission directed the TNEB that the return be calculated on the equity base as per the provision in the Tariff Regulations. 6.4.3 The TNEB in letter dated 23-02-2010 submitted following: The return on capital base is calculated in statement 8 of the Balance Sheet based on the format prescribed in the Electricity (Supply) Annual Accounts Rules 1985. As the equity share capital available in the accounts is less, the return on capital base has been adopted. However, the return may be calculated on the equity based at 14% per annum as per the tariff Regulation amendment dated 09-08-2007.
Table 94 Equity share capital of TNEB

2007-08 (Rs.In Crores) Equity share capital II Supplemental addition Total 14% return on equity 1200 168 1200

2008-09 (Rs.in Crores) 2050 350.50 2370.50 331.87

6.4.4 The Commission in letter dated 13-03-2010, directed the TNEB to furnish the actual equity received in 2009-10 and the projection for 2010-11 to 2012-13 based on the commitment, if any, from Government. 6.4.5 The TNEB in letter dated 05-04-2010 submitted the following:
(1) The actual equity sanctioned by Government in 2009-10 was Rs.100 Crores.

140

(2) In the Budget proposal Rs.1200 Crores has been proposed for each year from 2010-11 to 2012-13. (3) There is no commitment from Government on the sanctioning of above equity.

6.4.6 As the Government of Tamil Nadu has

contributed equity of Rs.100

Crores in 2009-10, the addition to equity in the control period has been projected at the rate of Rs.100/- Crores each year. 6.4.7 The equity was allocated to each function based on gross fixed assets and RoE at 14% arrived at as below:
Table 95 Allocation of Equity to different functions of TNEB

(Rs. in Crores)
Sl.No Stations / Functions 2010-11 Equity 1 2 3 4 5 6 I 1 2 3 4 II 1 2 3 4 III 1 2 IV ETPS NCTPS MTPS TTPS NCTPS II MTPS II Total Thermal BBGTPS Kuttalam Kovilkalappal Valuthur Total Gas Erode Kadamparai Kundah Tirunelveli Total Hydro Tirunelveli - Wind Udumalpet - Wind Total Wind 82.34 168.67 84.12 154.07 RoE 14% 11.53 23.61 11.78 21.57 2011-12 Equity 59.37 121.61 60.65 111.09 373.80 228.30 954.82 33.87 21.37 23.04 49.33 127.61 69.35 21.49 56.08 21.06 167.99 8.97 5.58 14.55 RoE 14% 8.31 17.03 8.49 15.55 52.33 31.96 133.67 4.74 2.99 3.23 6.91 17.86 9.71 3.01 7.85 2.95 23.52 1.26 0.78 2.04 2012-13 Equity 59.05 120.96 60.32 110.49 371.78 227.07 949.67 33.69 21.26 22.91 49.06 126.92 68.98 21.38 55.78 20.95 167.08 8.92 5.55 14.47 RoE 14% 8.27 16.93 8.44 15.47 52.05 31.79 132.95 4.72 2.98 3.21 6.87 17.77 9.66 2.99 7.81 2.93 23.39 1.25 0.78 2.03

489.20 46.98 29.64 31.95 68.42 176.98 61.62 29.81 77.78 27.21 196.43 12.44 7.73 20.18

68.49 6.58 4.15 4.47 9.58 24.78 8.63 4.17 10.89 3.81 27.50 1.74 1.08 2.82

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V VI VII VIII

Total Generation Transmission Distribution Grand Total

882.79 729.62 958.09 2570.50

123.59 102.15 134.13 359.87

1264.97 632.30 773.23 2670.50

177.09 88.52 108.26 373.87

1258.14 676.27 836.09 2770.50

176.14 94.68 117.05 387.87

6.5

Depreciation

6.5.1 Regulation 24 of the TNERC Tariff Regulation 2005, specifies the following: a. The value base for the purpose of depreciation shall be historical cost of the asset. b. The depreciation shall be calculated at the rates as per the Annexure to these Regulations. c. The residual value of assets shall be considered as 10% and depreciation shall be allowed up to maximum of 90% of the estimated cost of the Asset. d. Land is not a depreciable asset and its cost shall be excluded from the capital cost while computing 90% of the historical cost of the asset. e. The historical cost of the asset shall include additional

capitalization. f. Depreciation shall be chargeable from the first year of operation. In case of operation of the asset for part of the year, depreciation shall be charged on pro-rata basis. g. After the assets are fully depreciated the benefit of reduced tariff shall be made available to the consumer. 6.5.2 The TNEB in their petition have filed Form 19 containing assets and the depreciation for each year. They have submit the following: (1) The rates of depreciation as per the TNERCs Tariff Regulation have been adopted.

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(2)

100% value of assets of which 90% value has depreciated has depreciation.

already been

not been considered for calculation of

6.5.3 The TNEB claimed the following depreciation for the control period:
Table 96 Depreciation claimed by TNEB

(Rs.in Crores)
Sl. No (1) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Name of the asset (2) Land and Land rights Buildings Hydraulic works Other civil works Plant & machinery Lines & cables Network Vehicles Furniture & Fixtures Office equipment capital spare Capital Expenditure result in asset not belonging to Board Spare units Assets taken over from licensees pending finalization Leased assets Capital Exp in progress Total 2010-11 (3) 0 23.24 21.37 16.80 530.28 444.46 1.76 2.13 7.49 38.85 0 0 0 0 0 1086.38 2011-12 (4) 0 24.65 22.88 17.80 568.92 499.44 1.85 2.22 8.82 43.23 0 0 0 0 0 1189.81 2012-13 (5) 0 26.16 24.50 18.86 610.38 561.22 1.94 2.32 10.38 48.10 0 0 0 0 0 1303.86

6.5.4 The TNEB has not filed the details in the specified format for computation of weighted average rate of depreciation. 6.5.5 The Commission computed the depreciation taking the following into account:

143

(a) The weighted average rate of depreciation computed on the gross value of assets at the beginning of the year excluding the cost of land and 100% value of assets which were depreciated upto 90% of the book value is 3.31% as per the Annual Statement of Accounts of the year 2008-09. (b) The weighted average rate of depreciation excluding the cost of land is 3.56%. (c) The Commission fixes the depreciation for the control period at the rate of 3.31% on the value of existing assets at the beginning of the year. (d) Proportionate depreciation has been fixed at 3.56% for the assets added / proposed to be commissioned during the control period. (e) The depreciation for the existing assets has been allowed at 3.31% on Gross value and at 3.56% on new assets and allocates the to various functions as below:
Table 97 Allocation of depreciation to different functions of TNEB

(Rs.in Crores)
Stations 1 2 3 4 5 6 I 1 2 3 4 II 1 2 3 4 III ETPS NCTPS MTPS TTPS NCTPS II MTPS II Total Thermal BBGTPS Kuttalam Kovilkalappal Valuthur Total Gas Erode Kadamparai Kundah Tirunelveli Total Hydro Total on Generation Assets Tirunelveli - Wind 2010-11 31.83 65.20 32.51 59.55 2011-12 31.83 65.20 32.51 59.55 128.23 86.77 404.10 18.16 11.46 12.35 26.45 68.41 35.01 11.52 30.07 11.28 87.88 2012-13 31.83 65.20 32.51 59.55 200.40 122.40 511.89 18.16 11.46 12.35 26.45 68.41 37.18 11.52 30.07 11.29 90.06

189.10 18.16 11.46 12.35 26.45 68.41 22.41 11.52 30.07 9.69 73.69

IV 1

331.20 4.81

560.39 4.81

670.37 4.81

144

2 V VI VII VIII IX

Udumalpet - Wind Total Wind Total Generation Transmission Distribution Grand Total

2.99 7.80 339.00 267.57 349.16 955.72

2.99 7.80 568.73 310.93 392.77 1271.89

2.99 7.80 678.71 351.95 433.52 1463.64

6.6

Operation and Maintenance Expenses following expenditures are categorized as Operation and

6.6.1 The

Maintenance Expenses (O & M Expenses). Repair and Maintenance Employees cost Administration and General Expenses 6.6.2 The TNEB has claimed the following O & M Expenses:
Table 98 O&M expenses claimed by TNEB

(Rs.in Crores)
Sl.No 1 2 3 4 Details Net Repairs & Maintenance Expenses Net Employee Cost Net Admn & General Expenses Total 2010-11 326.57 2908.68 228.40 3463.65 2011-12 339.63 3025.22 237.53 3602.18 2012-13 353.22 3146.02 247.04 3746.28

6.6.3 Subsequently, based on the comments from the Commission, the TNEB revised the claim for O & M Expenses as below:
Table 99 Revised O&M expenses claimed by TNEB

(Rs.in Crores)
Sl.No 1 2 3 4 Details Net Repairs & Maintenance Expenses Net Employee Cost Net Admn & General Expenses Total 2010-11 302.12 2386.46 302.45 2991.03 2011-12 314.20 2481.94 314.54 3110.68 2012-13 326.77 2581.21 327.13 3235.11

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6.6.4 As per Regulation 25 of the TNERC Tariff Regulations, the Operation and Maintenance Expenses (O & M Expenses) shall be derived on the basis of average of actual O & M expenses for the past five years based on the audited Annual Accounts excluding abnormal O & M expenses, if any, after prudence check by the Commission. 6.6.5 Various components of O & M expenses were analyzed and revised on the following lines.

6.7 Repair & Maintenance 6.7.1 There were abnormal expenditures on repairs to plant and machineries, buildings and other civil works during one or two years among the previous five years taken up for average. In ETPS and NCTPS repairs to plant and machinery during 2007-08 and 2008-09 were more than 200% than the expenditure during the earlier years. 6.7.2 There were abnormal repair and maintenance expenditure to buildings in Kuttalam GTPS, NCTPS, Erode, Tirunelveli and Kadamparai. 6.7.3 The TNEB in letter dated 07-04-2010, have submitted that the increased expenditure in MTPS was due to capital overhaul work of unit II carried out after 7 years. In TTPS Rs.20/- Crores was spent on painting, conveyor system, boiler erection, etc., 6.7.4 The average expenditure on Repairs and maintenance for the purpose of projection arrived at by TNEB was revised excluding the actual abnormal expenditures. 6.7.5 The net repair and maintenance expenditure claimed by TNEB and admitted by the Commission are as below:
Table 100 Repairs and maintenance expenditures admitted by TNERC

Repairs Maintenance Expenses (Rs.in Crores)

2010-11 and 302.11

Claimed by TNEB 2011-12 2012-13 314.20 326.77

Admitted by TNERC 2010-11 2011-12 237.67 247.23

2012-13 257.12

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6.8

Employee Cost
Table 101 Projection of employee cost by TNEB

6.8.1 The TNEB submitted the following projection in their petition. (Rs.in Crores)
S. No. 1 2 3 4 5 Salary Overtime wages Dearness Allowance Other Allowances Bonus & Ex-gratia Total (1 to 5) 6 7 8 9 10 Medical expenses reimbursement Leave Travel concession Earned Leave encashment Terminal benefits Staff welfare expenses & Board's Contribution to CPS Payment under workmen's compensation Act 11 12 13 Commissioning/ Golden Jubilee incentive Grand Total Less: Capitalization Net Expenses Details Average of previous 5 years 742.32 12.83 379.65 78.63 56.02 1269.45 4.60 1.01 107.53 756.46 7.87 0.09 4.49 2151.50 200.20 1951.31 2829.82 249.54 2580.28 Current Year 2009-10 943.49 19.35 528.47 70.77 61.56 1623.64 3.31 1.45 125.15 1061.38 14.42 0.47 2010-11 1075.58 20.12 602.46 73.60 64.02 1835.78 3.44 1.51 130.16 1209.98 15.00 0.49 0 3196.35 287.67 2908.68 Control Period 2011-12 1118.60 20.93 626.55 76.54 66.58 1909.21 3.58 1.57 135.36 1258.37 15.60 0.51 0 3324.20 299.18 3025.02 2012-13 1163.34 21.77 651.62 79.61 69.25 1985.58 3.72 1.63 140.78 1308.71 16.22 0.53 0 3457.17 311.15 3146.02

6.8.2 The following discrepancies were found on scrutiny of TNEBs claim 6.8.2.1 Salary for 2010-11 was escalated at 14% over the budgeted figure for 2009-10 and for further period, projection was made with 4% increase. 6.8.2.2 Dearness allowance was claimed at the rate of 56% uniformly for all the years of the control period 6.8.2.3 The revision of pay ordered with effect from 01-12-2007 was not taken into account.

147

6.8.3 The above deficiencies were pointed out to TNEB and the TNEB submitted a revised statement as below:
Table 101 Revised projection of employee cost by TNEB

(Rs.in Crores)
S. No. 1 2 3 4 5 Salary Overtime wages Dearness Allowance Other Allowances Bonus & Ex-gratia Total (1 5) 6 7 8 9 10 Medical expenses reimbursement Leave Travel concession Earned Leave encashment Terminal benefits Staff welfare expenses & Board's Contribution to CPS Payment under workmen's compensation Act Commissioning/ Golden Jubilee incentive Grand Total Less: Capitalization 13 Net Expenses Average of previous 5 years 742.32 12.83 379.65 78.63 56.02 1269.45 4.60 1.01 107.53 756.46 7.87 Current Year 2009-10 919.06 13.34 284.91 81.77 58.26 1357.34 4.78 1.05 111.83 824.55 8.19 2010-11 987.42 13.88 385.10 85.04 60.59 1532.03 4.98 1.09 116.31 999.98 8.52 Control Period 2011-12 993.81 14.04 437.28 85.18 63.01 1593.32 5.17 1.13 120.96 977.58 8.86 2012-13 994.66 14.18 497.34 85.34 65.53 1657.05 5.38 1.18 125.80 1016.68 9.21

Details

0.09 4.49 2151.50 200.20 1951.31

0.09 0 2307.84 208.20 2099.63

0.10 0 2603.00 216.53 2386.46

0.10 0 2707.13 225.19 2481.94

0.11 0 2815.41 234.20 2581.21

11 12

(i) The details of employee cost subsequently submitted were also found to be incorrect. The TNEB was therefore directed to furnish the No. of employees in each pay band. (ii) The employee cost has been projected taking into account the

revision of pay ordered with effect from 01-12-2007, the number of

148

employees in each pay band, weightage and grade pay. The salary for further period was projected with 3% increase. (iii) The retirement (Pension) benefits have been projected considering the pension revision order with effect from 01-01-2007. (iv) Dearness allowance has been projected at the rate of 40% for 201011, 45% for 2011-12 and 50% for 2012-13. (v) The employee cost arrived at by Commission is as below:
Table 102 Employee cost arrived by the Commission

(Rs.in Crores)
Particulars 1 2 3 4 5 1 2 3 4 5 6 7 Salary Overtime Wages Dearness Allowance Other Allowance Bonus & Ex-gratia Sub-Total 1 MRI LTC EL Encashment Terminal Benefit Welfare expenses &CPF contribution Compensation Other Incentives Sub-Total 2 Grand Total Less: Capitalization Net Expenses 2009-10 1386.67 13.34 402.13 136.34 62.00 2000.48 4.78 1.05 143.24 1314.97 8.19 0.09 0 1472.32 3472.80 208.20 3264.60 2010-11 1428.27 13.88 571.31 143.16 62.00 2218.62 4.98 1.09 148.47 1412.73 8.52 0.10 0 1575.89 3794.51 216.53 3577.98 2011-12 1471.12 14.04 662.00 148.89 62.00 2358.05 5.17 1.13 154.93 1538.41 8.86 0.10 0 1708.60 4066.65 225.19 3841.46 2012-13 1515.25 14.18 757.63 154.84 62.00 2503.90 5.38 1.18 161.13 1672.34 9.21 0.11 0 1849.35 4353.25 234.20 4119.05

6.9

Administrative and General Expenses

6.9.1 The TNEB has projected 1% insurance on generation assets with the increase of 4% over the average for past five years. This has revised as 1% on the net value of the assets. been

149

6.9.2 Abnormal expenditures on the heads legal / consultancy charges and misc. expenses during the past period have been excluded to arrive at the average for the purpose of projection for the control period. 6.9.3 The net administration and general expenses claimed by TNEB and admitted by the Commission are as below:
Table 103 Net administration and general expenses admitted by TNERC

Claimed by TNEB 2010-11 Admn. General Expenses (Rs.in Crores) and 302.45 2011-12 314.54 2012-13 327.13

Admitted by TNERC 2010-11 252.80 2011-12 257.82 2012-13 272.15

6.9.4 Total O & M Expenses:

Table 104 O&M expenses admitted by TNERC

Sl. No

Details

TNEB

TNERC

2010-11 1 Repairs and 302.11

2011-12 314.21

2012-13 326.77

2010-11 237.67

2011-12 247.23

2012-13 257.12

Maintenance 2 Employee Cost 3 Admn. general expenses Total 3513.24 3653.77 3799.92 4068.45 4346.51 4648.32 302.45 314.54 327.13 252.80 257.82 272.15 2908.68 3025.02 3146.02 3577.98 3841.46 4119.05

6.10 Allocation of O & M Expenses 6.10.1 The O & M Expenses (excluding operating expenses of generating stations) after capitalization are allocated among various functions as detailed below:

150

Table 105 Allocation of O&M expenses by TNEB to different functions of TNEB

(Rs.in Crores)
Function R&M ETPS NCTPS MTPS TTPS Total Thermal 45.09 69.98 12.01 23.77 150.85 2010-11 Empl 57.67 48.53 63.52 75.83 245.55 A&G 10.20 13.02 10.60 20.32 54.14 Total 112.96 131.53 86.13 119.92 450.54 R&M 46.89 72.78 12.49 24.72 156.88 Empl 61.90 52.09 68.18 81.39 263.56 2011-12 A&G 10.38 13.22 10.89 20.80 55.29 Total 119.17 138.09 91.56 126.91 475.73 R&M 48.77 75.69 12.99 25.71 163.16 Empl 66.37 55.86 73.11 87.27 282.61 2012-13 A&G 10.58 13.42 11.18 21.31 56.49 Total 125.72 144.97 97.28 134.29 502.26

BBGTPS Kuttalam Kovilkalapp al Valuthur Total Gas

1.99 7.04 3.57

5.53 3.09 3.51

2.67 3.02 2.76

10.19 13.15 9.84

2.07 7.33 3.71

5.98 3.34 3.79

2.71 3.04 2.78

10.76 13.71 10.28

2.15 7.62 3.86

6.45 3.61 4.09

2.75 3.05 2.79

11.35 14.28 10.74

1.41 14.01

4.72 16.85

7.18 15.63

13.31 46.49

1.47 14.58

5.10 18.21

7.18 15.71

13.75 48.50

1.52 15.15

5.51 19.66

7.19 15.78

14.22 50.56

Erode Kadamparai Kundah Tirunelveli Total Hydro

1.07 1.83 1.48 1.43 5.81

27.45 22.64 32.68 26.50 109.27

6.92 5.75 13.52 7.27 33.46

35.44 30.22 47.68 35.20 148.54

1.10 1.98 1.54 1.49 6.11

29.47 24.29 35.08 28.44 117.28

6.93 5.98 13.77 7.95 34.63

37.50 32.25 50.39 37.88 158.02

1.14 2.06 1.60 1.55 6.35

31.60 26.06 37.62 30.49 125.77

7.04 6.22 14.02 8.53 35.81

39.78 34.34 53.24 40.57 167.93

WEDC Tirunelveli WEDC UDP

0.39

7.80

0.18

8.37

0.40

8.37

0.19

8.96

0.42

8.98

0.20

9.60

0.16

3.15

0.09

3.40

0.16

3.38

0.10

3.64

0.17

3.63

0.10

3.90

Total Wind

0.55

10.95

0.27

11.77

0.56

11.75

0.29

12.6

0.59

12.61

0.30

13.50

Total Generation Transmissio n Distribution Total

171.22

382.62

103.50

657.34

178.13

410.80

105.92

694.85

185.25

440.65

108.38

734.25

33.71

433.77

20.23

487.71

35.05

465.73

20.58

521.36

36.46

499.37

22.19

558.02

32.74 237.67

2761.59 3577.98

129.07 252.8

2923.40 4068.45

34.05 247.23

2964.93 3841.45

131.32 257.82

3130.30 4346.51

35.41 257.12

3179.06 4119.08

141.58 272.15

3356.05 4648.32

6.11 Operating Expenses 6.11.1 The operating expenses like water charges for Thermal stations and the cost of lubricants being accounted for along with the cost fuel by TNEB are segregated and included in the O & M expenses.

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6.11.2 The Commission fixes the O & M Expenses (including operating expenses of generating stations) as detailed below:
Table 106 Allocation of O&M expenses by TNERC to different functions of TNEB

(Rs.in Crores)
Function Total (excludin g operating expenses ) 2010-11 Operat ing Expen ses Total O & M Expense s Total (excludin g operating expenses ) 2011-12 Operat ing Expen ses Total O & M Expenses Total (exclud ing operati ng expens es) ETPS NCTPS MTPS TTPS Total Thermal BBGTPS Kuttalam Kovilkalappal Valuthur Total Gas Erode Kadamparai Kundah Tirunelveli Total Hydro WEDC Tirunelveli WEDC UDP Total Wind Total Generation Transmission Distribution Total 112.96 131.53 86.13 119.92 450.54 16.98 8.17 0.79 6.28 32.22 129.94 139.7 86.92 126.2 482.76 119.17 138.09 91.56 126.91 475.73 17.15 8.26 0.8 6.34 32.55 136.32 146.35 92.36 133.25 508.28 125.72 144.97 97.28 134.29 502.26 17.32 8.34 0.81 6.4 32.87 143.04 153.31 98.09 140.69 535.13 2012-13 Operat ing Expen ses Total O & M Expense s

10.19 13.15 9.84 13.31 46.49 35.44 30.22 47.68 35.2 148.54 8.37 3.4 11.77 657.34 487.71 2923.4 4068.45

0.07 0.53 0.25 0.14 0.99

10.26 13.68 10.09 13.45 47.48 35.44 30.22 47.68 35.2 148.54 8.37 3.4

10.76 13.71 10.28 13.75 48.5 37.5 32.25 50.39 37.88 158.02 8.96 3.64 12.6 694.85 521.36 3130.3 4346.51

0.07 0.53 0.25 0.14 0.99

10.83 14.24 10.53 13.89 49.49 37.5 32.25 50.39 37.88 158.02 8.96 3.64

11.35 14.28 10.74 14.22 50.59 39.78 34.34 53.24 40.57 167.93 9.6 3.9 13.5 734.25 558.02 3356.05 4648.32

0.07 0.54 0.26 0.14 1.01

11.42 14.82 11.00 14.36 51.6 39.78 34.34 53.24 40.57 167.93 9.6 3.9

0 33.21

11.77 690.55 487.71 2923.4 4101.66

0 33.54

12.6 728.39 521.36 3130.3 4380.05

0 33.88

13.5 768.13 558.02 3356.02 4682.17

33.21

33.54

33.88

6.12

O & M Expenses for new generating stations

6.12.1 Regulation 25 (4)and (6) of TNERC Tariff Regulations 2005 specifies the following:

152

(4) In case of the thermal power Generating Stations, which have not been in existence for a period of five years the operation and maintenance expenses shall be fixed at 1.0% of the capital cost (as admitted by the Commission) and shall be escalated at the rate of 4% per annum from the subsequent year to arrive at base operation and maintenance expenses. The base operation and maintenance expenses shall be further escalated at the rate of 4% per annum to arrive at permissible operation and maintenance expenses for the relevant year. In case of the hydro electro Generating Stations, which have not been in existence for a period of five years, the operation and maintenance expenses shall be fixed at 1.0% of the capital cost as admitted by the Commission and shall be escalated at the rate of 4% per annum from the subsequent year to arrive at base operation and maintenance expenses. The base operation and maintenance expenses shall be further escalated at the rate of 4% per annum to arrive at permissible operation and maintenance expenses for the relevant year 6.12.2 The TNEB has stated that the following stations would be commissioned during the control period. 6.12.3 The TNEB has not projected any O & M expenses for these stations. 6.12.4 The Commission fixes the O & M expenses to the new generating stations as detailed below in accordance with the provisions in the Tariff Regulations:
Table 107 O&M expenses admitted by TNERC to new generating stations Project CoD Month Asset Value (Rs.in Crores) 3697.81 3224.10 9.43 11/2011 Bavanikattalai B II 05/2011 Bavanikattalai B III 06/2011 175.26 175.26 1.31 1.75 2830.25 1.45 1.75 28.30 O & M Expenses (Rs.in Crores) 2010-11 2011-12 24.64 26.87 2012-13 36.97 32.25

MTPS stage II NCTPS Expansion unit 1 NCTPS Expansion unit 2

07/2011 05/2011

153

Bavani B I Bavani B II Periyar Vaigai SHEP I Periyar Vaigai SHEP II

05/2011 12/2010 06/2010 11/2010

53.09 57.38 25.27

0.14 0.19 0.05

0.44 0.57 0.25 0.16 0.21 0.16 65.49

0.53 0.57 0.25 0.16 0.23 0.16 102.92

15.79 0 23.34 0.05 15.79 0.43

Periyar Vaigai SHEP III 04/2011 Periyar Vaigai SHEP IV 11/2010 Total

6.13

Controllable and uncontrollable parameters

6.13.1 Regulation 3 (viii) of terms and conditions for determination of tariff for transmission/distribution of electricity under MYT framework provides for mechanism of pass through of all approved gains and losses on account of uncontrollable factors. Items covered under uncontrollable costs are:a. Cost of fuel b. Cost on account of inflation c. Taxes and duties and d. Variation in power purchase unit cost from base line level including variation on account of hydro-thermal mix in case of force majeure and adverse natural events like drought. 6.13.2 The licensee shall file application for revision on account of such variation for Commissions consideration and orders. The Regulation also provides for mechanism for sharing approved gains or losses arising out of controllable factors. Regulation 3 (ix) envisages that the financial loss, if any, due to failure to achieve the target for the controllable costs in any of the years in the control period shall be borne by licensees and gains if any shall be shared with beneficiaries at 50:50. 6.13.3 The Commission would like to clarify that all controllable factors which includes O & M expenses could not be fixed for want of reliable data and also due to the fact that the TNEB is in the process of unbundling and the assets are to be transferred to the successor entities. In view of this, the Commission has only estimated the O & M expenses and the parameters

154

for the purpose of this tariff order. All these parameters are provisional and will therefore be required to be trued up based on audited figures and prudency check. The fixing of controllable parameters can be done only

when reliable data becomes available.

6.14

Interest on Borrowing for Working Capital

6.14.1 The TNEB has claimed interest on working capital on normative basis. 6.14.2 The TNEB has been borrowing (short term loan / cash credit/ overdraft) for working capital and interest on such borrowing is included along with interest on capital loan and allocated to all the functions. 6.14.3 The TNEB was directed to explain the reasons for claiming interest on working capital in addition to projection of interest on short term loan. 6.14.4 The TNEB has submitted the following Since the interest on borrowings for working capital is already included the claim on normative basis is withdrawn 6.14.5 Accordingly, interest on working capital is not allowed separately. 6.14.6 The Tariff Regulations 2005 and MYT regulations could not be fully implemented for want of reliable data from TNEB. After the issue of the Transfer Scheme and receipt of petition from the successor entities, these issues will be reviewed and action taken accordingly.

6.15

Other Debits

6.15.1 The expenses like material cost variance, bad & doubtful debts, extra ordinary debits, R & D expenses, etc., are accounted under this head. 6.15.2 The provision under the head hydro balancing fund is not considered by the Commission as the Commission has projected the hydro generation at the capacity availability factor of 25.00%. The changes in the generation mix will be taken care of by increase / decrease in power purchase cost and the addition / utilization of hydro balancing fund on actuals. 6.15.3 The capitalization of interest in other debits has been proportionately reduced.

155

6.15.4 The other debits claimed by TNEB and admitted by the Commission is as below:
Table 108 Other debits admitted by TNERC

(Rs.in Crores)
Sl.No Particulars TNEB 201011 1 Research & Development expenses Bad & Doubtful debts written off Miscellaneous losses and written off/provided for Material cost variance Sundry expenses Extra ordinary debits Hydro Balancing Fund Total Less: Capitalization Net expenses 0.02 201112 0.02 201213 0.02 TNERC 2010-11 0.02 201112 0.02 201213 0.02

2 3 4 5 6 7

0.20 6.68 22.33 0.01 0.02 129.22 158.48 19.07 139.41

0.20 6.68 22.33 0.01 0.02 129.22 158.48 20.02 138.46

0.20 6.68 22.33 0.01 0.02 129.22 158.48 21.02 137.46

0.20 6.68 22.33 0.01 0.02 0 29.26 3.60 25.66

0.20 6.68 22.33 0.01 0.02 0 29.26 4.00 25.26

0.20 6.68 22.33 0.01 0.02 0 29.26 4.51 24.75

6.15.5 Material cost variances and provision for miscellaneous loss have been allocated to all the functions based on gross fixed assets and the remaining expenses are allocated to distribution functions as detailed below:
Table 109 Allocation of material cost variance to different functions of TNEB

(Rs.in Crores)
2010-11 Gross Block Other (Closing) Debits 961.60 0.82 1969.76 982.31 1799.23 1.68 0.84 1.54 2011-12 Gross Block at Other the end Debits 961.60 0.56 1969.76 982.31 1799.23 6054.35 3697.81 1.15 0.57 1.05 3.54 2.16 2012-13 Gross Block at Other the end Debits 961.60 0.53 1969.76 982.31 1799.23 6054.35 3697.81 1.08 0.54 0.99 3.32 2.03

1 2 3 4 5 6

Station ETPS NCTPS MTPS TTPS NCTPS II MTPS II

156

I 1 2 3 4 II 1 2 3 4 III

Total Thermal BBGTPS Kuttalam Kovilkalappal Valuthur Total Gas Erode Kadamparai Kundah Tirunelveli Total Hydro Tirunelveli Wind Udumalpet Wind Total Wind Total Generation Transmission Distribution Grand Total

5712.90 548.58 346.14 373.11 798.98 2066.81 719.65 348.14 908.35 317.76 2293.90 145.31 90.32

4.88 0.47 0.30 0.32 0.68 1.77 0.62 0.30 0.78 0.27 1.96 0.12 0.08

15465.06 548.58 346.14 373.11 798.98 2066.81 1123.24 348.14 908.35 341.13 2720.86 145.31 90.32

9.03 0.32 0.20 0.22 0.47 1.21 0.66 0.20 0.53 0.20 1.59 0.08 0.05

15465.06 548.58 346.14 373.11 798.98 2066.81 1123.24 348.14 908.35 341.13 2720.86 145.31 90.32

8.49 0.30 0.19 0.20 0.44 1.13 0.62 0.19 0.50 0.19 1.49 0.08 0.05

1 2 V

235.63

0.20

235.63

0.13

235.63

0.13

VI VII VIII IX

10309.24 8520.58 11188.69 30018.51

8.81 7.28 9.56 25.66

20488.36 10241.30 12507.57 43237.23

11.96 5.99 7.31 25.26

20504.81 11012.89 13599.17 45116.87

11.25 6.04 7.46 24.75

6.16

Comparison of Expenses

6.16.1 The expenses excluding power purchase cost and fuel cost claimed in the Tariff Petition is compared with the expenses admitted by the Commission as below:

157

Table 110 Expenses admitted by TNERC

(Rs in Crores)
Particulars 2010-11 Depreciation Interest on Loan Capital Return on Equity Net Repairs & Maintenance Employee Cost Admn. and General Expenses Operating Expenses Other debits Total Expenses 1086.36 TNEB 2011-12 1189.81 2012-13 1303.86 2010-11 955.72 3276.11 359.87 237.67 3577.98 252.80 33.21 25.66 8719.02 TNERC 2011-12 1271.89 3567.34 373.87 247.23 3841.46 257.82 33.54 25.26 9618.41 2012-13 1463.64 3725.79 387.87 257.12 4119.05 272.15 33.80 24.75 10284.17

3464.99 378.25 302.12 2386.46 302.45 0 139.41 8060.04

4032.05 412.23 314.20 2481.94 314.54 0 138.46 8883.23

4571.16 449.80 326.77 2581.21 327.13 0 137.46 9697.39

158

CHAPTER 7 GENERATION TARIFF 7.1 Regulation 36 (Components of Tariff) specifies the following (1) The tariff for sale of power by the Generating Companies shall be of two parts namely the Fixed Charges (recovery of annual capacity charges) and variable (energy) charges. (2) The Fixed (annual capacity) charges shall consist of the following elements: (3) 7.2 Interest on Loan Capital; Depreciation Return on Equity; Operation and Maintenance expenses; and Interest on Working Capital:

The energy (variable) charges shall cover fuel cost.

The TNEB in the tariff petition have computed the fuel cost for the generating stations owned by them and included the fuel cost in the ARR for determination of retail tariff.

7.3

Clause (vi) of Regulation 43 of the TNERC (Terms and conditions for Determination of Tariff) Regulations, 2005 specifies the following: vi. In respect of power generated in the station owned by the distribution licensee and distributed by the licensee itself in his area of supply, the generation tariff of the station shall be considered as the transfer price to the distribution licensee which will be determined in the licensees tariff petition itself.

7.4

Clause (3) of Regulation 6 of the Tariff Regulation specifies the following: (3) The application for determination of tariff for the existing generating station and transmission system shall be accompanied by information in the respective formats appended to these Regulations duly furnishing the figures for the previous year, current year and ensuing year.

159

7.5

The Commission directed the TNEB to furnish the information for determination of generation tariff in the formats prescribed in the Tariff Regulation. Accordingly, the TNEB has submitted the station wise informations like interest on loan, O & M expenses, etc.

7.6

The Commission will determine a two part generation tariff as per Regulations for each of the thermal generating station (both coal based and gas based) as each station is a separate accounting unit. In respect of hydel stations a single generation tariff for all the hydel stations under each of the generation circle will be determined as separate accounts for each of the hydro stations is not made available.

7.7

The two part generation tariff consist of fixed charges (recovery of annual capacity) and variable (energy) charges

7.8

Once the unbundling takes place and transfer scheme is issued by the Government of Tamil Nadu under section 131 of Electricity Act 2003, the provisions of the transfer scheme will govern the future course of action.

7.9

Thermal generating stations

7.9.1 Determination of Fixed (annual capacity) charges: 7.9.1.1 Regulation 41 of TNERC Tariff (computation of capacity (fixed) charges) specifies the following:
The total annual Fixed Charges of a Generating Company consist the elements detailed in clause (2) of Regulation 36 shall be worked out on the basis of the principles outlined in Chapter III and also in accordance with the norms allowed in these Regulations. The annual capacity charges recoverable by the Generating Company shall be worked out by deducting other income as per Regulation 40 from the total annual expenses.

7.9.1.2

The elements constituting fixed charges have been computed and allocated to generating stations in the chapters as detailed below:
Table 111 Elements of fixed cost Sl. No 1 2 Fixed Charges component Depreciation Interest on Loan Capital Reference chapter / para to

6.5.5 6.3.21

160

3 4 7.9.1.3

Return on Equity Operation & Maintenance Expenses

6.4.7

6.11.2

The fixed (annual capacity charges) claimed by TNEB and approved the Commission are as below:
Table 112 Fixed cost admitted by TNERC for ETPS (Rs. In Crores) TNEB Tariff Components Depreciation Interest on Loan Return on Equity O&M expenses Other Debits Less; Misc Income Total 252.80 281.21 305.09 2010-11 39.19 80.57 17.53 115.51 2011-12 42.92 95.58 22.58 120.13 2012-13 47.03 105.50 27.63 124.93 2010-11 31.83 78.41 11.53 129.94 0.82 9.15 243.38 TNERC 2011-12 31.83 64.99 8.31 136.32 0.56 9.15 232.86 2012-13 31.83 61.84 8.27 143.04 0.53 9.15 236.36

Table 113 Fixed cost admitted by TNERC for TTPS TNEB Tariff Components Depreciation Interest on Loan Return on Equity O&M expenses Other Debits Less; Misc Income Total 439.09 502.54 551.98 2010-11 51.96 226.45 49.26 111.42 2011-12 54.57 268.64 63.45 115.88 2012-13 57.31 296.51 77.65 120.51

(Rs. In Crores) TNERC 2010-11 59.55 109.75 21.57 126.20 1.54 9.84 308.77 2011-12 59.55 88.86 15.55 133.25 1.05 9.84 288.22 2012-13 59.55 82.26 15.47 140.69 0.99 9.84 289.12

Table 114 Fixed cost admitted by TNERC for MTPS TNEB 2011-12 33.53 146.67 34.64 85.43

(Rs. In Crores) TNERC 2011-12 32.51 36.06 8.49 92.36 0.57 8.41 161.58

Tariff Components Depreciation Interest on Loan Return on Equity O&M Expenses Other Debits Less; Misc Income Total

2010-11 33.32 123.63 26.89 82.15

2012-13 33.74 161.88 42.39 88.85

2010-11 32.51 45.85 11.78 86.92 0.84 8.41

2012-13 32.51 32.19 8.44 98.09 0.54 8.41 163.36

265.99

300.27

326.86

169.49

161

Table 115 Fixed cost admitted by TNERC for NCTPS TNEB Tariff Components Depreciation Interest on Loan Return on Equity O&M expenses Other Debits Less; Misc Income Total 508.09 576.45 629.37 2010-11 61.77 247.91 53.93 144.48 2011-12 62.62 294.1 69.47 150.26 2012-13 63.48 324.61 85.01 156.27 2010-11 65.20 104.17 23.61 139.7 1.68 6.78 327.58

(Rs. In Crores) TNERC 2011-12 65.20 83.13 17.03 146.35 1.15 6.78 306.08 2012-13 65.20 75.60 16.93 153.31 1.08 6.78 305.34

Table 116 Fixed cost admitted by TNERC for Kuttalam GTPS (Rs. In Crores) Tariff Components Depreciation Interest on Loan Return on Equity O&M expenses Other Debits Less; Misc Income Total 66.90 75.15 81.46 TNEB 2010-11 15.61 30.90 6.72 13.67 2011-12 15.61 36.66 8.66 14.22 2012-13 15.61 40.46 10.60 14.79 2010-11 11.46 37.23 4.15 13.68 0.30 0.02 66.80 TNERC 2011-12 11.46 31.37 2.99 14.25 0.20 0.02 60.25 2012-13 11.46 30.41 2.98 14.82 0.19 0.02 59.84

Table 117 Fixed cost admitted by TNERC for Kovilkalappal GTPS (Rs. In Crores) Tariff Components Depreciation Interest on Loan Return on Equity O&M expenses Other Debits Less; Misc Income Total 63.47 74.66 84.14 TNEB 2010-11 18.22 33.31 7.25 4.69 2011-12 20.93 39.52 9.33 4.88 2012-13 24.03 43.62 11.42 5.07 2010-11 12.35 32.16 4.47 10.09 0.32 0.11 59.28 TNERC 2011-12 12.35 26.75 3.23 10.53 0.22 0.11 52.97 2012-13 12.35 25.57 3.21 10.98 0.20 0.11 52.20

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Table 118 Fixed cost admitted by TNERC for Valuthur TNEB 2011-12 36.84 55.72 13.16 8.73

(Rs. In Crores) TNERC 2011-12 26.45 86.99 6.91 13.45 0.47 0.16 134.11

Tariff Components Depreciation Interest on Loan Return on Equity O&M expenses Other Debits Less; Misc Income Total

2010-11 30.98 46.97 10.22 8.4

2012-13 43.79 61.5 16.11 9.08

2010-11 26.45 102.39 9.58 13.45 0.68 0.16

2012-13 26.45 85.08 6.87 14.36 0.44 0.16 133.04

96.57

114.45

130.48

152.39

Table 119 Fixed cost admitted by TNERC for BBGTPS Tariff Components Depreciation Interest on Loan Return on Equity O&M expenses Other Debits Less; Misc Income Total 102.38 115.1 124.74 TNEB 2010-11 30.27 48.98 10.65 12.48 2011-12 30.3 58.1 13.72 12.98 2012-13 30.32 64.13 16.79 13.5 2010-11 18.16 20.13 6.58 10.26 0.47 0.24 55.36 TNERC

(Rs. In Crores)

2011-12 18.16 15.29 4.74 10.83 0.32 0.24 49.10

2012-13 18.16 13.02 4.72 11.42 0.30 0.24 47.38

7.9.2 Determination of Variable (Energy) Charges : 7.9.2.1 As per Regulation 43 (ii) of the Tarff Regulation, the Energy (Variable) charges shall be worked out on the basis of ex-bus energy delivered / sent out from the generating station. 7.9.2.2 Rate of energy charges is based on the following elements: (a) Price of primary fuel (b) Quantum of primary fuel (coal) in kg required for generation of one kWh of electricity at generator terminals and shall be computed on the basis of Gross Station Heat Rate (less heat contributed by secondary fuel oil) and gross calorific value of coal. (c) Price of secondary fuel oil (d) Normative quantity of secondary fuel (e) Normative auxiliary consumption

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7.10

Price of Primary Fuel

7.10.1 The TNEB procures coal from the following sources through multi model transport (rail, sea-rail) under coal shipping agreement for the power plants.
Table 121 Quantity of coal procurement by TNEB Sl.No 1 2 Name of the coal field Eastern coal fields Ltd (ECL) Mahanadhi coal fields Ltd (MCL) Total Annual Quantity (in lakh tonnes) 14.25 118.75 133.00

7.10.2 Besides, the TNEB import 18 lakhs tonnes annually to meet the requirements of the station. 7.10.3 The contracted quantity is allocated as below:
Table 122 Allocation of coal to different thermal stations

(in lakh tonnes)

Sl. No 1 2 3 4 Station ETPS TTPS MTPS NCTPS Total ECL Coal 3.20 4.30 2.50 4.25 14.25 MCL Coal 13.12 44.27 36.36 25.00 118.75 Imported 0 9.00 5.50 3.50 18.00 Total 16.32 57.57 44.36 32.75 151.00

7.10.4 The coal is priced at average landed cost which includes basic cost of coal, Royalty, taxes and duties, ocean freight, railway freight and handling charges. 7.10.5 The average landed cost of coal is calculated every quarter in advance (provisionally) with reference to the linkage of coal and quantum of coal for the quarter. At the end of the year the landed cost for the entire year is calculated based on the actual payment and actual quantity. The variation between the actual cost computed at the end of the year and the quarterly landed cost at which the consumption of coal was priced is adjusted.

164

7.10.6 The weighted average landed cost of coal actually received during 200809 and 2009-10 as submitted by TNEB were as below:
Table 123 Weighted average landed cost of coal

(Rs / MT) Sl.No Station 2008-09 Indigenous Import 1 2 3 4 ETPS TTPS MTPS NCTPS 1900 2543 2246 1832 5628 5603 5189 2009-10 Indigenous Import 1919 2485 2256 1851 5334 5423 5018

7.10.7 The TNEB report that imported coal is blended with indigenous coal in the ratio of 20: 80 in the stations except ETPS. But, the quantum of coal imported is less than 20% of the indigenous coal. Hence, for the

purpose of calculation of coal cost, the quantity as per allocation has been considered. 7.10.8 The increase in weighted average landed cost of coal in 2009-10 was marginal for ETPS, MTPS and NCTPS and there was decrease in the average landed cost of coal for TTPS. The increase in weighted average cost of imported coal is also negative. Hence, for 2010-11 an increase of 1% is allowed to arrive at the weighted average cost of coal.

7.11

Quantity of Primary Fuel / Coal

7.11.1 As per Regulation 43 of the Tariff Regulation, the quantity of primary fuel required for generation of one kWh of electricity at generator terminals in kg or litre or cum as the case may be, shall be computed on the basis of Gross Station Heat Rate (less heat contributed by secondary fuel oil for coal / lignite based generating stations) and gross calorific value of coal / lignite or gas or liquid fuel actually fired.

165

7.12

Gross Station Heat Rate:

7.12.1 In the TNERC (Terms and conditions for determination of Tariff) Regulations, 2005, the following norms for existing coal based Thermal Power generating station have been specified based on the performances reported and the rates adopted for previous tariff order:
Table 124 Normative heat rate for existing thermal stations Sl.No 1 2 3 4 Station ETPS TTPS MTPS NCTPS Heat Rate (in kcal / kWh) 3200 2453 2500 2393

7.12.2 The normative gross station heat rates for the new thermal power station specified in the Tariff Regulations are as below:
Table 125 Normative heat rate for new thermal stations

Particulars

During Period Subsequent period

200 / 210 / 250 MW 500 MW and above series series Stabilization 2600 Kcal / kWh 2550 Kcal / kWh 2500 Kcal / kWh 2450 Kcal / kWh

7.12.3 The TNEB has furnished actual average station heat rate (kcal / kWh) for the stations from 2003-04 to 2008-09 and also for 2009-10 (upto Feb 2010) as below:
Table 126 Trend in station heat rate of existing thermal stations Sl.No Station 200304 200405 200506 200607 200708 200809 Average for years 6 200910 upto Feb 1 2 3 4 ETPS TTPS MTPS NCTPS 3328 2459 2542 2489 3280 2487 2555 2453 3303 2492 2538 2451 3243 2495 2514 2450 3362 2543 2499 2453 3277 2554 2511 2457 3299 2505 2527 2459 3388 2553 2536 2466

166

7.12.4 The Commission has prescribed the following heat rate norms in Clause 37 of Terms and Conditions for determination of tariff Regulations 2005 for the power stations:Gross Station Heat Rate (in kcal / kWh) 1. ETPS 2. TTPS 3. MTPS 4. NCTPS 3200 2453 2500 2393

7.12.5 The station heat rate norm for new thermal power station has stipulated as 2500 kcal / kWh and 2450 kcal / kWh

been

for 210 / 500 MW

generating units. These norms correspond to the standards stipulated in the CERC (Terms and Conditions of Tariff) Regulations 2004. The CERC has modified the norms in 2009 as 2500 kcal / kWh and 2425 kcal / kWh for 210 / 500 MW generating units. The details furnished by TNEB for these power stations have been examined and it is observed that they have exceeded the normative heat rate in many power stations. The TNEB has furnished the heat rates on a quarterly basis for 2008-09 and 2009-10. They have sought relaxation of station heat rate norms for TTPS and NCTPS in their letter dated 23-7-2010. 7.12.6 The Central Electricity Authority commissioned a consultant by name Evonic Energy Services India Pvt Ltd in June 2008 to evaluate the performance of TTPS and in August 2008 to evaluate the performance of NCTPS. The consultant recorded the heat rate as 2575.31 kcal / kWh for NCTPS and 2826 kcal / kWh for TTPS. The TNEB has prayed for

relaxation of heat rate norm to 2560 kcal / kWh for units I, II & III and 2600 kcal / kWh for units IV & V for TTPS and 2500 kcal / kWh for NCTPS. 7.12.7 Considering that the Commission has prescribed a norm of 2500 kcal / kWh for new plants, the Commission approves relaxation of norms for

167

TTPS and NCTPS upto 2500 kcal / kWh in terms of Clause 90 of the Tariff Regulations 2005 for the year 2010-11. 7.12.8 The Commission allows the following station heat rate in relaxation of the Regulation 90 of TNERC Tariff Regulations:
Table 127 Station heat rate admitted by the Commission for existing thermal stations Sl.No 1 2 3 4 Station ETPS TTPS MTPS NCTPS Heat Rate (in kcal / kWh) 3200 2500 2500 2466

7.13

Gross Calorific Value of Coal

7.13.1 The TNEB had not furnished the Gross Calorific Value (GCV) in the ARR statements received with original petition. The TNEB was directed to furnish the GCV of coal. 7.13.2 In the revised formats furnished by the TNEB, they have furnished the range of GCV as below:
Table 128 GCV of coal furnished by TNEB

(Kcal / kg) 2011-12 3200-3500 3200-3500 3500-3800 3700-3801 2012-13 3200-3500 3200-3500 3500-3800 3700-3802

Station ETPS TTPS MTPS NCTPS

2009-10 3317 3378 3527 3600-3800

2010-11 3200-3500 3200-3500 3500-3800 3600-3800

7.13.3 The average calorific values per kg of coal recorded in the Annual Accounts Statement of the TNEB for the period from 2003-04 to 2008-09 are below:
Table 129 Trend of GCV of existing thermal stations

(Kcal / kg)
Sl. No. 1 2 3 4 Stations ETPS TTPS MTPS NCTPS 2003-04 3465 3763 3611 3458 2004-05 3380 3650 3536 3336 2005-06 3385 3353 3975 3877 2006-07 3411 3434 3723 3659 2007-08 3394 3235 3716 3794 2008-09 3396 3415 3613 3743

168

7.13.4 The payments to coal suppliers are adjusted with reference to the quality / grade of coal determined on testing of samples. It is seen that the coal received from Mahanadhi Coal Field (MCL) were of F grade and from Eastern Coal Field (ECL) were of B and C grades. 7.13.5 The calorific value of coal corresponding to Useful Heat Value (UHV) was calculated with reference to moisture and ash content as furnished in the test certificate. It was found that the GCV of coal from ECL was 6000 / 6007 Kcal / kg and the GCV of coal from MCL was 3914 Kcal / kg. The GCV of imported coal (as received) was 5424 Kcal / kg. 7.13.6 When the coal from different sources are blended according to the allocated quantity, the weighted average GCV of coal for each station shall be as below: i.TTPS ii.MTPS iii.NCTPS iv.ETPS - 4306 Kcal / kg - 4219 Kcal / kg - 4346 Kcal / kg - 4323 Kcal / kg

7.13.7 The TNEB in their petition have submitted that specific consumption of coal, furnace oil, gas and other oil for their own generating stations are based on performance of financial year 2007-08. The TNEB has also submitted that the consumption levels would be maintained over the period through regular maintenance. 7.13.8 The TNEB has used projected specific consumption of coal (based on the number arrived at with reference to energy generated and quantum of coal consumed) i.e. the quantity of coal required for generation of one kWh of electricity at generator terminal to project the quantum of fuel, instead of on the basis of Station Heat Rate and calorific value of coal. 7.13.9 The TNEB has not considered the provision of the Tariff Regulations which is mandatory. 7.13.10 The TNEB has projected the specific consumption of coal as below:

169

Table 130 Projection of specific consumption of coal by TNEB (kg / kWh) Sl. No. 1 2 3 4 Station ETPS TTPS MTPS NCTPS 2010-11 0.95 0.77 0.83 0.66 2011-12 0.95 0.77 0.83 0.66 2012-13 0.95 0.77 0.83 0.66

7.13.11 However, the specific consumption of coal when computed based on normative Station Heat Rate and GCV (without taking into account of GCV of secondary fuel) of coal will be as below:
Table 131 Specific consumption of coal based on normative station heat rate

Sl. No. 1 2 3 4

Station

ETPS TTPS MTPS NCTPS

Station Heat Rate (kcal / kWh) 3200 2500 2500 2466

GCV (kcal / kg) 4323 4306 4219 4346

Specific Consumption (kg / kWh) 0.74 0.58 0.59 0.57

7.13.12 The Commission fixes the quantity of coal based on the Station Heat Rate and GCV of primary fuel as per provisions in the Tariff Regulations.

7.14

Secondary Fuel Oil (SFO) Consumption

7.14.1 The following normative secondary fuel oil consumption per kWh has been specified in the Tariff Regulations: (a) Coal based generating stations except ETPS (b) ETPS - 2 ml / kWh -12 ml / kWh

7.14.2 The relaxed norms for ETPS were fixed when the station was under Renovation and Modernization (R & M). The TNEB in the petition have projected the following specific consumption for HFO (secondary fuel oil)

170

Table 132 Specific consumption of SFO projected by TNEB

(ml / kWh)
Sl. No 1 2 3 4 Station ETPS TTPS MTPS NCTPS 2010-11 6 3.80 1.90 1.83 2011-12 6 3.80 1.90 1.83 2012-13 6 3.80 1.90 1.83

7.14.3 It is assumed that the reduced specific consumption of secondary fuel i.e 6 ml / kWh projected for ETPS may be on account of Renovation and Modernization. This is provisionally accepted. 7.14.4 The TNEB has projected higher consumption of HFO i.e., at the rate of 3.80 ml / kWh for TTPS as against the normative consumption of 2 ml / kWh. 7.14.5 The consumption of secondary fuel oil is allowed at the normative level except for ETPS for which a relaxed norm was already fixed. The TNEB has projected 6 ml / kWh and this is adopted.

7.14.6 Heat contributed by secondary fuel oil: (1) The GCV of HFO is in the order of 10000 kcal / kg or 9389.67 kcal / ltr or 9.38967 kcal / ml. The TNEB use HSD / LDO also as secondary fuel. (2) The TNEB has stated that the actual heat contributed by the HFO and HSD in March 2010 in various station were as below:
Table 133 Heat contributed by SFO as projected by TNEB Sl. No 1 2 3 Details Heat contributed by HFO (kcal / kg) Heat rate of HSD (kcal / kg) Total heat contributed by secondary fuel ((kcal / kg) ETPS 1 25 26 25.50 25.50 TTPS MTPS 0.142 1.183 1.325 NCTPS 0.34 3.30 3.64

(3) The heat contributed at the normative specific consumption of secondary fuel (kcal / 2 ml / kWh) will be as below:

171

Table 134 Heat contributed by SFO as admitted by TNERC

(Kcal / kWh)
Sl. No 1 Details Heat contributed at the normative specific consumption ( 2 ml / kWh for other than ETPS and 6 ml to ETPS) ETPS 56.34 TTPS 18.78 MTPS 18.78 NCTPS 18.78

(4) The statement showing the actual specific consumption of furnace oil and LDO / HSD from 2003-04 to 2008-09 is furnished below:
Table 135 Trend of specific fuel oil consumption Sl. No FO LDO / HSD 1 2 3 4 ETPS TTPS MTPS NCTPS 8.17 0.79 0.51 3.81 0.47 0.10 0.03 0.20 3.99 0.55 0.33 3.61 FO LDO / HSD 0.31 0.06 0.03 0.15 4.92 0.87 0.34 1.67 FO LDO / HSD 1.20 0.07 0.03 0.20 8.91 1.76 0.35 0.71 FO LDO / HSD 2.59 0.07 0.03 0.12 4.72 2.95 0.43 0.58 FO LDO / HSD 1.42 0.07 0.04 0.12 7.10 3.42 0.63 0.78 FO LDO / HSD 1.70 0.07 0.29 0.13 Station 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

(5) The oil Consumption in TTPS is much higher than the normative specific consumption from 2006-07. The TNEB shall study the reasons and take corrective action to reduce the consumption to the normative level.

7.14.7 Price of secondary fuel: (1) The stations are predominantly using HFO as secondary fuel oil. The TNEB has projected the following rates for HFO and HSD / LDO for the year 2010-11.
Table 136 Price of SFO furnished by TNEB

Station ETPS TTPS MTPS NCTPS

HFO (Rs / kg) 25981 24407 21627 26514

HSD/LDO (Rs / kg) 43018 34291 36175 33604

(2) The TNEB has stated the following: 172

(a)

The total cost towards supply of fuel oils HFO, HSD (ordinary / premium) and LDO is arrived at based on the finalization of tender annually. However, the actual price of the above fuel oil prevailing on the date supply only shall be applicable since; the above prices are subject to revision by the Government of India.

(b)

The basic price of fuel oil is being revised on a fortnightly basis based on Import parity, statutory levies as applicable on the date of supply shall prevail.

(c)

Globally, the oil prices are highly volatile. There is an increase of around 25% in the contractual cost of fuel oil (HFO in 2009-10) when compared to that of 2007-08. However, only 5% escalation towards the cost of fuel oil has been considered.

(3) The Commission has considered the latest prevailing price communicated by the oil suppliers to estimate the cost of secondary fuel for 2010-11 and with an escalation of 5% for 2011-12 and 2012-13

7.14.8 Generation Tariff (Variable cost) for New Stations 7.14.8.1 The TNEB has submitted that the new generating stations to be established at North Chennai and Mettur are linked to Mahanadhi Coal fields for their coal requirements. 7.14.8.2 Regulation 7 (7) (i) of the TNERC Tariff Regulations specify the following: A generation company or a licensee may make an application as per Appendix I to these Regulations, for determination of provisional tariff in advance of the anticipated date of completion of the project, based on the capital expenditure actually incurred upto the date of making of the application or a date prior to making of the application, duly audited and certified by the statutory auditors, and the provisional tariff shall be charged from the date of commercial operation of the respective units of the generation station or the line or sub-station of the transmission system.

173

7.14.8.3 The TNEB has submitted the informations in the formats only for the existing stations. However, fuel cost for these stations have been estimated provisionally and included in the ARR. 7.14.8.4 In respect of TNEBs new generating units namely, NCTPS stage II unit 1 & 2 and MTPS stage III, only a provisional tariff is considered in this tariff order as below: (Rs / kWh) Sl. NO 1 2 Stations NCTPS MTPS Expansion 2010-11 0 2011-12 2.52 2.96 2012-13 2.22 2.68

7.14.8.5 The tariff now considred for new stations are only estimates and shall be provisional. The TNEB shall file a separate petition in each of the above case at an appropriate time in accordance with the Commission tariff regulation in force. 7.14.8.6 The variable cost for each station for each year is computed as below:

7.14.9 Variable cost of coal based thermal station

(1) ETPS Table 137 Determination of variable cost - ETPS Sl. No 1 2 3 4 5 6 7 8 9 10 11 Description Capacity Gross Station Heat Rate Specific fuel oil consumption Auxiliary Consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Unit MW Kcal / kWh Ml / kWh % kcal / Kl kcal / Kg Rs / Kl Rs / MT Ps / kWh Kcal / kWh Kcal / kWh 2010-11 450 3200 6 14.48 9389.67 4323 34751 1938 24.38 56.34 3143.66 2011-12 450 3200 6 14.48 9389.67 4323 36594 1957 25.67 56.34 3143.66 2012-13 450 3200 6 14.48 9389.67 4323 38423 1977 26.96 56.34 3143.66

174

12 13 14

Specific consumption of coal Rate of energy from Coal Rate of energy ex-bus

Kg / kWh Ps / kWh Ps / kWh

0.727 164.79 189.17

0.727 166.41 192.08

0.727 168.11 195.07

(2) TTPS
Table 138 Determination of variable cost - TTPS Sl. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Description Capacity Gross Station Heat Rate Specific fuel oil consumption Auxiliary Consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Specific consumption of coal Rate of energy from Coal Rate of energy ex-bus Unit MW Kcal / kWh Ml / kWh % kcal / Kl kcal / Kg Rs / Kl Rs / MT Ps / kWh Kcal / kWh Kcal / kWh Kg / kWh Ps / kWh Ps / kWh 2010-11 1050 2500 2 8.5 9389.67 4306 34834.69 3063.25 7.61 18.78 2481.22 0.576 192.91 200.52 2011-12 1050 2500 2 8.5 9389.67 4306 36576.42 3093.883 7.99 18.78 2481.22 0.576 194.84 202.83 2012-13 1050 2500 2 8.5 9389.67 4306 38405.25 3124.821 8.39 18.78 2481.22 0.576 196.79 205.18

(3) MTPS
Table 139 Determination of variable cost -MTPS Sl. No 1 2 3 4 5 6 7 8 Description Capacity Gross Station Heat Rate Specific fuel oil consumption Auxiliary Consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Unit MW Kcal / kWh Ml / kWh % kcal / Kl kcal / Kg Rs / Kl Rs / MT 2010-11 840 2500 2 9 9389.67 4219 35587.56 2721.92 2011-12 840 2500 2 9 9389.67 4219 37366.94 2749.139 2012-13 840 2500 2 9 9389.67 4219 39235.28 2776.631

175

9 10 11 12 13 14

Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Specific consumption of coal Rate of energy from Coal Rate of energy ex-bus

Ps / kWh Kcal / kWh Kcal / kWh Kg / kWh Ps / kWh Ps / kWh

7.82 18.78 2481.22 0.588 175.91 183.73

8.21 18.78 2481.22 0.588 177.67 185.88

8.62 18.78 2481.22 0.588 179.45 188.07

(4) NCTPS
Table 140 Determination of variable cost -NCTPS Sl. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Description Capacity Gross Station Heat Rate Specific fuel oil consumption Auxiliary Consumption Average calorific value of oil Average calorific value of Coal Weighted average price of oil Average landed cost of coal Rate energy charges from Oil Heat contributed from Oil Heat contributed from Coal Specific consumption of coal Rate of energy from Coal Rate of energy ex-bus Unit MW Kcal / kWh Ml / kWh % kcal / Kl kcal / Kg Rs / Kl Rs / MT Ps / kWh Kcal / kWh Kcal / kWh Kg / kWh Ps / kWh Ps / kWh 2010-11 630 2466 2 8.5 9389.67 4346 34751 2297.57 7.60 18.78 2447.22 0.563 141.39 148.99 2011-12 630 2466 2 8.5 9389.67 4346 36594 2320.546 8.00 18.78 2447.22 0.563 142.81 150.81 2012-13 630 2466 2 8.5 9389.67 4346 38423 2343.751 8.40 18.78 2447.22 0.563 144.24 152.63

7.14.10 7.14.10.1

Energy (Variable) Charges of Gas Based Thermal Stations: Normative Station Heat Rate for gas turbine / combined cycle

generating station: (1) The following heat rates have been specified in the TNERC Tariff Regulations:

176

Table 143 Normative Station Heat Rate for GTS

Open Cycle Combined cycle

Advanced class E/.EA/EC/E2 class machine machine 2685 Kcal / kWh 2830 Kcal / kWh 1850 Kcal/ kWh 1950 Kcal / kWh

(2) The Basin Bridge Gas Turbine Power Station (BBGTPS) is operated under open cycle with Naphtha as fuel and all other stations are combined cycle generating station with gas as fuel. (3) The station heat rates furnished by the TNEB are as below:
Table 144 station heat rates furnished by the TNEB

(in kcal / kWh)

Sl. No 1 BBGTPS 3158 3127 3233 3230 2 3 4 5 Kovilkalappal Valuthur I Valuthur II Kuttalam 1888.88 1852 1869 1884.21 1663 2459 1792 1916 1788 1830 1824 1872 1762.20 1753.85 1803 1872.45 1886 1726 1820 1872.45 1886.38 1726.01 1851 / 3230 3230 3230 Station 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

(4) Except the machines at BBGTPS, the machines at other stations are of Advance class machines and hence the normative Gross Station Heat Rate of 1850 kcal / kWh is applicable. The normative heat rate is adopted for all gas station except BBGTPS. For BBGTPS, the heat rate proposed by the TNEB is adopted to compensate the start up fuel.

7.14.10.2

Gross Calorific Value

Table 144 GCV of Naphtha and Gas furnished by the TNEB

(1) The GCV of Naphtha and Gas furnished by the TNEB are detailed below: (kcal / kg and Kcal / Scm)
Sl. No 1 BBGTPS 10574 10572 10572 10572 10572 10572 Station 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

177

10249 2 3 4 5 Kovilkalappal Valuthur I Valuthur II Kuttalam 9746.56 8832 9475.20

10249 9607 8791 8774 9406

10249 9658 8811 8811 9529

10249 9660 8811 8811 9375

10249 9660 8811 8811 9400

10249 9660 8811 8811 9563

(2) In respect of gas fired generating station, the TNEB make payment at the rate for 1000 scm for 10000 kcal / Scm and whenever the GCV is less than 10000 kcal / scm, proportionate rebate is allowed. (3) The quantum of gas required is arrived at taking the GCV of gas at 10000 Kcal. The Government of India has ordered the revision price of gas

under Administered Price Mechanism (APM) as 4.20 USD for 251548.43 kcal. The revised price is to take effect from 01-06-2010. The revised APM price is converted into Rupee and to the calorific value of 10000 kcal / scm. (4) For the gas based thermal station at Valuthur, 30% requirement is met under Market Driven Price (MDP) and the balance under APM. (5) The energy (variable) charges for the gas based thermal station are determined as below:

7.14.10.3

Variable cost of Gas based Thermal Generating Stations

Table 145 Variable cost of GTS - Kovilkalappal

(1) Kovilkalappal
Sl. No 1 2 3 4 5 6 7 8 201011 107.88 1850 6 10000 7.92 155.87 610 95.08

Description Capacity Gross Station Heat Rate Auxiliary Consumption Average calorific value of Gas Average cost of Gas Rate of energy from Gas Net Generation Total energy cost

Unit MW Kcal / kWh % Scm Rs / Scm Ps / kWh MU Rs / Crores

2011-12 107.88 1850 6 10000 8.77 172.60 610 105.29

2012-13 107.88 1850 6 10000 8.77 172.60 610 105.29

178

9 10 11

Fixed Transport Charges Total Variable Cost Net Energy charges per unit

Rs / Crores Rs / Crores Ps / kWh

4.67 99.75 163.53

4.67 109.96 180.26

4.67 109.96 180.26

2) Kuttalam
Table 146 Variable cost of GTS - Kuttalam Sl. No 1 2 3 4 5 6 7 8 9 10 11 Description Capacity Gross Station Heat Rate Auxiliary Consumption Average calorific value of Gas Average cost of Gas Rate of energy from Gas Net Generation Total energy cost Fixed Transport Charges Total Variable Cost Net Energy charges per unit Unit MW Kcal / kWh % Scm Rs / Scm Ps / kWh MU Rs / Crores Rs / Crores Rs / Crores Ps / kWh 2010-11 101 1850 6 10000 7.92 155.87 641 99.91 7.11 107.02 166.96 2011-12 101 1850 6 10000 8.77 172.60 641 110.64 7.11 117.75 183.69 2012-13 101 1850 6 10000 8.77 172.60 641 110.64 7.11 117.75 183.69

3)
Sl. No 1 2 3 4 5 6 7 8 9 10 11

Valuthur I
Table 147 Variable cost of GTS Valuthur-I Description Capacity Gross Station Heat Rate Auxiliary Consumption Average calorific value of Gas Average cost of Gas Rate of energy from Gas Net Generation Total energy cost Fixed Transport Charges Total Variable Cost Net Energy charges per unit Unit MW Kcal / kWh % Scm Rs / Scm Ps / kWh MU Rs / Crores Rs / Crores Rs / Crores Ps / kWh 2010-11 95 1850 6 10000 8.78 172.80 560 96.77 1.79 98.56 175.99 2011-12 95 1850 6 10000 8.79 172.99 560 96.88 1.79 98.67 176.19 2012-13 95 1850 6 10000 8.79 172.99 560 96.88 1.79 98.67 176.19

179

4)
Sl. No 1 2 3 4 5 6 7 8 9 10 11

Valuthur II
Table 148 Variable cost of GTS Valuthur-II Description Capacity Gross Station Heat Rate Auxiliary Consumption Average calorific value of Gas Average cost of Gas Rate of energy from Gas Net Generation Total energy cost Fixed Transport Charges Total Variable Cost Net Energy charges per unit Unit MW Kcal / kWh % Scm Rs / Scm Ps / kWh MU Rs / Crores Rs / Crores Rs / Crores Ps / kWh 2010-11 92 1850 6 10000 7.76 152.72 446 68.11 1.79 69.90 156.74 2011-12 92 1850 6 10000 8.79 172.99 594 102.76 1.79 104.55 176.01 2012-13 92 1850 6 10000 8.79 172.99 594 102.76 1.79 104.55 176.01

5)
Sl. No 1 2 3 4 5 6 7 8

BBGTPS
Table 149 Variable cost of GTS BBGTPS Description Capacity Gross Station Heat Rate Auxiliary Consumption Average calorific value of Naphtha Average cost of Naphtha Rate of energy from Naphtha Net Generation Total energy cost Unit MW Kcal / kWh % kcal / kg Rs / Kg Ps / kWh MU Rs / Crores 2010-11 120 3230 1.00 10572 47.92 1472.61 60 88.36 2011-12 120 3230 1.00 10572 50.316 1546.24 60 92.77 2012-13 120 3230 1.00 10572 52.8318 1623.56 60 97.41

7.14.10.4 In this connection, the provision in Regulation 43 (iii) of the TNERC tariff Regulation is reproduced below:

180

(iii) Adjustment of rate of energy charge (REC) on account of variation in price or heat value of fuels Initially, Gross Calorific Value of coal/lignite or gas or liquid fuel shall be taken as per actuals of the preceding three months. Any variation shall be adjusted on a month to month basis on the basis of average Gross Calorific Value of coal/lignite or gas or liquid received and burnt and weighted average landed cost incurred by the Generating Company for procurement of coal/lignite, oil, or gas or liquid fuel, as the case may be for a Power Station. In its bills, Generating Company shall indicate rate of energy charges at base price of primary and secondary fuel specified by the Commission and the fuel price adjustment to it separately. No separate petition need to be filed with the Commission for fuel price adjustment.

7.14.10.5 The transaction for sale of energy or transfer price of energy shall be adjusted accordingly.

7.14.11 Tariff to Hydro Generating Station 7.14.12 The generation circles and the total installed capacity of the hydel generating stations under the jurisdiction of TNEB are as below:
Table 150 Installed capacity of Hydro Generating Stations

Sl. No. 1 2 3 4 5 . 7.14.13

Generation Circles Generation Erode Generation Kundah Generation Kadamparai Generation Tirunelveli Total

Installed capacity in MW 421.00 833.40 595.45 334.30 2184.15

As the Circles do not have separate accounts for each of the generating stations in their area, single generation tariff for all the stations in the jurisdiction of each circle will be determined.

181

7.14.14

Regulation 49 of the TNERC Tariff Regulations specifies the following:

49 components of tariff Tariff for sale of electricity from a hydro power generating station shall comprise of two parts namely, the recovery of annual capacity charges and energy charges to be worked out in the manner provided hereinafter.

7.14.15

Regulation 53 of the TNERC Tariff Regulations specifies the following:

53. Computation of Annual Energy Charges. The two part tariff for sale of electricity from a hydro power generating station shall comprise a recovery of annual capacity (fixed) charges and primary energy charges. 7.14.16 The annual capacity (fixed) charges shall consist of the following and shall be computed as per the principles in Chapter III. (a) (b) (c) (d) Interest on Loan Capital Depreciation Return on equity Operation and Maintenance expenses excluding operating expenses like water charges, lubricants, consumables and station supplies. (e) Interest on Working Capital

7.15

The Regulation 54 of TNERC Tariff Regulations specifies the following:

54) Energy RateEnergy charges per kWh shall be arrived at as below:

Energy rate = Annual Capacity Charges + Annual Primary Energy Charges --------------------------------------------------------------------------------Saleable Energy

7.15.1.1 Determination of Annual Capacity Charges 7.15.1.2 The elements constituting fixed charges have been computed and allocated to generating stations in the chapters as detailed below:

182

Table 151 Elements of Fixed Charges Sl. No 1 2 Fixed Charges component Depreciation Interest on Loan Capital Return on Equity Operation & Maintenance Expenses Reference to chapter / para

3 4

6.5.5 6.3.21 6.4.7

6.11.2

7.15.1.3 The fixed (annual capacity) charges for the group of generating stations in each circle claimed by TNEB and approved by the Commission are as below: (a) Erode Circle
Table 152 Fixed Charges approved by the Commission for Erode Generation Circle

(Rs.in Crores)
Tariff Component Depreciation Interest on Loan Return on Equity O&M expenses Other Debits Less; Misc Income Total 115.42 131.44 143.75 TNEB 2010-11 14.76 59.13 12.86 28.67 2011-12 14.90 70.15 16.57 29.82 2012-13 15.04 77.42 20.28 31.01 2010-11 22.41 86.23 8.63 35.71 0.62 0.75 152.85 TNERC 2011-12 35.01 141.79 9.71 41.40 0.66 0.75 227.82 2012-13 37.18 119.20 9.66 44.51 0.62 0.75 210.42

(b) Kadamparai Circle

Table 153 Fixed Charges approved by the Commission for Kadamparai Generation Circle Tariff Component 2010-11 Depreciation Interest on Loan Return on Equity O&M expenses Other Debits Less; Misc Income Total 71.85 80.64 87.5 9.03 31.08 6.76 24.98

(Rs.in Crores)
TNEB 2011-12 9.08 36.87 8.71 25.98 2012-13 9.12 40.7 10.66 27.02 2010-11 11.52 30.51 4.17 30.38 0.30 0.13 76.75 TNERC 2011-12 11.52 25.41 3.01 32.41 0.20 0.13 72.42 2012-13 11.52 24.31 2.99 34.50 0.19 0.13 73.38

183

(c)

Kundah Circle (Rs.in Crores)

Table 154 Fixed Charges approved by the Commission for Kundah Generation Circle

Tariff Component 2010-11 Depreciation Interest on Loan Return on Equity O&M expenses Other Debits Less; Misc Income Total 161.75 22.57 81.1 17.64 40.44

TNEB 2011-12 22.97 96.21 22.73 42.05 2012-13 23.37 106.19 27.81 43.74 2010-11 30.07 108.16 10.89 47.69 0.78 0.96 183.96 201.11 196.63

TNERC 2011-12 30.07 91.59 7.85 50.40 0.53 0.96 179.48 2012-13 30.07 89.27 7.81 53.25 0.50 0.96 179.94

(d) Tirunelveli Circle

Table 155 Fixed Charges approved by the Commission for Tirunelveli Generation Circle (Rs.in Crores) Tariff Component Depreciation Interest on Loan Return on Equity O&M expenses Other Debits Less; Misc Income Total 67.48 75.42 82.05 TNEB 2010-11 7.74 23.29 5.07 31.38 2011-12 8.63 27.63 6.53 32.63 2012-13 9.63 30.5 7.98 33.94 2010-11 9.69 42.13 3.81 35.70 0.27 0.50 91.10 TNERC 2011-12 11.28 34.13 2.95 38.87 0.20 0.50 86.93 2012-13 11.29 32.08 2.93 41.59 0.19 0.50 87.58

7.15.1.4 Primary Energy Charges 7.15.2 The Regulation 53 (3) of TNERC Tariff Regulations specifies the following: (3) Primary Energy Charges shall be the operating expenses like cost of water, lubricants, consumables and station supplies 7.15.3 The TNEB has not claimed operating charges separately for hydro stations. They have claimed the following charges for all the generating stations including thermal generating stations.

184

Table 156 Operating Charges for all the generating stations including thermal generating stations.

(Rs.in Crores)
Sl. No 1 2 Particulars Cost of water Cost of lubricants and consumables 3 4 Other fuel cost Total 10.32 42.06 10.32 42.06 10.32 42.06 2010-11 21.36 10.38 2011-12 21.36 10.38 2012-13 21.36 10.38

7.15.4 The operating expenses like lubricants, water charges, etc, for the hydro stations have been projected based on the average of water charges, lubricants consumed by the station during the years 2007-08 and 2008-09 as below:
Table 157 Operating Charges for Hydro generating circles Year 2010-11 2011-12 2012-13 Erode 0.13 0.13 0.13 Kundah 0.01 0.01 0.01 (Rs.in Crores) Kadamparai Tirunelveli 0.16 0.16 0.16 0.21 0.21 0.22

7.15.4.1 Energy Rate (1) The energy charges per kWh for the group of hydel generating station in each of the circles are determined as below: (a) Erode Circle

Table 158 Energy Charges for Hydro generation - Erode circle

Particulars Annual Capacity Charges Primary Energy Charges Total Energy Charges Net Generation Energy Rate

Units (Rs. in Crores)

2010-11 152.85

2011-12 227.82 0.13 227.95 937 2.43

2012-13 210.42 0.13 210.55 1090 1.93

(Rs. in Crores) 0.13 (Rs. in Crores) (in MU) (in paise / unit) 152.98 918 1.67

185

(b)

Kadamparai Circle

Table 159 Energy Charges for Hydro generation - Kadamparai circle

Particulars Annual Capacity Charges Primary Energy Charges Total Energy Charges Net Generation Energy Rate

Units (Rs. in Crores)

2010-11 76.75

2011-12 72.42 0.16 72.58 937 0.77

2012-13 73.38 0.16 73.54 937 0.78

(Rs. in Crores) 0.16 (Rs. in Crores) (in MU) (in paise / unit) 76.91 934 0.82

(c)

Kundah Circle

Table 160 Energy Charges for Hydro generation - Kundah circle

Particulars Annual Capacity Charges Primary Energy Charges Total Energy Charges Net Generation Energy Rate

Units (Rs. in Crores)

2010-11 196.63

2011-12 179.48 0.01 179.49 1816 0.99

2012-13 179.94 0.01 179.95 1817 0.99

(Rs. in Crores) 0.01 (Rs. in Crores) (in MU) (in paise / unit) 196.64 1816 1.08

(d)

Tirunelveli Circle
Table 161 Energy Charges for Hydro generation - Tirunelveli circle Units (Rs. in Crores) 91.10 (Rs. in Crores) 0.21 (Rs. in Crores) (in MU) (in paise / unit) 91.31 729 1.25 0.21 87.14 748 1.16 0.22 87.80 757 1.16 86.93 87.58

Particulars Annual Capacity Charges Primary Energy Charges Total Energy Charges Net Generation Energy Rate

2010-11

2011-12

2012-13

7.15.4.2 Determination of Tariff for the Wind Energy generated in the Wind Mills owned by TNEB (1) TNEB has not submitted separate proposal for determination of Tariff for the electricity generated in the wind mills owned by TNEB and distributed 186

by them. In the petition they have not projected the quantum of energy from 17.555 MW capacity wind mills owned by TNEB separately. The charges therefore have also not been furnished. (2) The Boards wind mills were installed as demonstration wind mills against contribution / grants. (3) The Commission directed the TNEB to furnish the Asset value of wind mills and the quantum of contribution by segregating value of link lines included in the generation asset. (4) The TNEB has furnished the quantum of energy to be generated during the control period. But the details of wind mill assets have not been furnished. (5) Regulation 1 (6) of the Tariff Regulation specify the following: They shall not be applicable to co-generation, captive power plants and generation of electricity from renewable sources of energy including mini hydro projects (covered under Non-Conventional Energy Sources), which will be covered by a separate Regulation to be specified by the Commission under clause (e) of sub-section (1) of Section 86 of the Electricity Act 2003 for promotion of such generation. (6) Regulation 5 and 6 of the Power Procurement from New and Renewable Sources of Energy Regulations, 2008 specified under section 86 (1) (c) of the Electricity Act 2003, stipulates the following: (5) While determining the tariff the Commission may adopt appropriate financial and operational parameters (6) While determining the tariff the Commission may adopt appropriate tariff methodology (7) In the Commissions order No.3 dated 15-05-2006, the cost plus, single part average tariff was adopted for the power being purchased from private wind energy promoters. The Commission in its order No.1 of 2009 dated 20-03-2009 has tariff. decided to continue the same methodology of

187

(8) The Boards wind mills were installed during the period from 1986 to 1993 as demonstration wind mills and the capitalized values of assets, depreciation, etc, has not been furnished by TNEB. (9) In the order No.3 dated 15-05-2006, the Commission has determined a tariff of Rs.2.75 / unit for the wind power projects commissioned, and to be commissioned based on agreements executed prior to the date of this order. (10) In view of order No.3 dated 15-05-2006, the single part tariff of Rs.2.75 per unit shall be applicable to all generation from the wind mill established by TNEB. (11) In view of the above, the wind mills assets shall not be included for calculation of fixed charges elements separately.

7.15.5 Taking into consideration of the above, the cost of generation is arrived as below: Year: 2010-11
Table 162 Cost of generation from TNEB owned generating plants for the year 2010-11 Sl. No. Station Net Generation (in MU) VC. (Ps / unit Total VC (Rs.in Crs) Capacity charges (Rs.in Crs) 243.38 308.77 169.49 327.58 1049.22 66.8 59.28 152.39 55.36 333.83 Total charges (Rs.in Crs) 567.43 1827.91 1298.14 980.60 4674.08 173.82 159.03 330.31 143.72 806.88 152.98 196.64 76.91 91.31 Cost (Rs / Unit)

I 1 2 3 4 5 II 1 2 3 4 5 III 1 2 3 4

Coal based ETPS TTPS MTPS NCTPS Total Coal Gas Base Kuttalam Kovil Kalappal Valuthur BBGTPS Total Gas Hydro Erode Kundah Kadamparai Tirunelveli

1713 7576 6143 4383 19815 641 610 1006 60 2317 918 1816 934 729

189.17 200.52 183.73 148.99 182.94 166.96 163.53 176.86 1472.61

324.05 1519.14 1128.65 653.02 3624.86 107.02 99.75 177.92 88.36 473.05

3.31 2.41 2.11 2.24 2.36 2.71 2.61 3.28 23.95 3.48 1.67 1.08 0.82 1.25

188

5 IV

Total Hydro Grand Total

4397 26529

517.84 5998.81

1.18 2.26

Year: 2011-12
Table 163 Cost of generation from TNEB owned generating plants for the year 2011-12

Sl. No.

Station

Net Generation (in MU)

VC. (Ps / unit

Total VC (Rs.in Crs)

Capacity charges (Rs.in Crs) 232.86 288.22 161.58 306.08

Total charges (Rs.in Crs)

Cost (Rs / Unit)

I 1 2 3 4 5 6 7 II 1 2 3 4 5 III 1 2 3 4 5 IV

Coal based ETPS TTPS MTPS NCTPS MTPS stage III NCTPS stage II Total Coal Gas Base Kuttalam Kovil Kalappal Valuthur BBGTPS Total Gas Hydro Erode Kundah Kadamparai Tirunelveli Total Hydro Grand Total

1713 7576 6143 4383 2547 3837 26199 641 610 1154 60 2465 937 1816 937 748 4438 33102

192.08 202.83 185.88 150.81

329.03 1536.64 1141.86 661.00

4630.75164 183.69 180.26 176.1 1546.24 117.75 109.96 203.22 92.77 523.70

1747.35 60.25 52.97 134.11 49.1 296.43

561.89 1824.86 1303.44 967.08 755.01 965.81 6378.10164 178.00 162.93 337.33 141.87 820.13 227.95 72.58 179.49 87.14 567.16 7765.39

3.28 2.41 2.12 2.21 2.96 2.52 2.43 2.78 2.67 2.92 23.65 3.33 2.43 0.40 1.92 1.16 1.28 2.35

Year: 2012-13
Table 164 Cost of generation from TNEB owned generating plants for the year 2012-13

Sl. No.

Station

Net Generation (in MU)

VC. (ps / unit

Total VC (Rs.in Crs)

Capacity charges (Rs.in Crs) 236.36 289.12 163.36 305.34

Total charges (Rs.in Crs) 570.51 1843.56 1318.67 974.32 1026.31

Cost (Rs / Unit)

I 1 2 3 4 5

Coal based ETPS TTPS MTPS NCTPS MTPS stage III

1713 7576 6143 4383 3827

195.07 205.18 188.07 152.63

334.15 1554.44 1155.31 668.98

3.33 2.43 2.15 2.22 2.68

189

6 7 II 1 2 3 4 5 III 1 2 3 4 5 IV

NCTPS stage II Total Coal Gas Base Kuttalam Kovil Kalappal Valuthur BBGTPS Total Gas Hydro Erode Kundah Kadamparai Tirunelveli Total Hydro Grand Total

7696 31338 641 610 1154 60 2465 1090 1817 937 757 4601 38404 183.69 180.26 176.1 1623.56

5447.64 117.75 109.96 203.22 97.41 528.34

1896.82 59.84 52.2 133.04 47.38 292.46

1611.08 7344.46 177.59 162.16 336.26 144.79 820.80 210.55 73.54 179.95 87.80 551.84 8717.10

2.09 2.34 2.77 2.66 2.91 24.13 3.33 1.93 0.40 1.92 1.16 1.20 2.27

0 2189.28

7.15.6 The abstract of station wise generation cost for the control period is as below
Table 165 Abstract of station wise generation cost for the control period 2010-11 Sl. No. Station Total Units (in MU) 1 2 3 4 5 6 II 1 2 3 5 III 1 2 3 4 IV Coal based ETPS TTPS MTPS NCTPS MTPS stage III NCTPS stage II Total Coal Gas Based Kuttalam Kovil Kalappal Valuthur BBGTPS Total Gas Hydro Erode Kundah Kadamparai Tirunelveli Total Hydro Grand Total 1713 7576 6143 4383 0 0 19815 641 610 1006 60 2317 918 1816 934 729 4397 26529 Total cost (Rs in Crores) 567.43 1827.91 1298.14 980.60 0.00 0.00 4674.08 173.82 159.03 330.31 143.72 806.88 152.98 196.64 76.91 91.31 517.84 5998.81 cost per unit (Rs / unit) 3.31 2.41 2.11 2.24 0.00 0.00 2.36 2.71 2.61 3.28 23.95 3.48 1.67 1.08 0.82 1.25 1.18 2.26 2011-12 Total cost (Rs in Crores) 561.89 1824.86 1303.44 967.08 755.01 965.81 6378.10 177.99 162.92 337.32 141.87 820.1277 227.95 72.58 179.49 87.14 567.16 7765.39 cost per unit (Rs / unit) 3.28017 2.41 2.12 2.21 2.96 2.52 2.43 2.78 2.67 2.92 23.65 3.33 2.43 0.40 1.92 1.16 1.28 2.35 Total Units (in MU) 1713 7576 6143 4383 3827 7696 31338 641 610 1154 60 2465 1090 1817 937 757 4601 38404 2012-13 Total cost (Rs in Crores) 570.51 1843.56 1318.67 974.32 1026.30 1611.08 7344.46 177.58 162.15 336.25 144.79 820.79 210.55 73.54 179.95 87.8 551.84 8717.10 cost per unit (Rs / unit) 3.33 2.43 2.15 2.22 2.68 2.09 2.34 2.77 2.66 2.91 24.13 3.33 1.93 0.40 1.92 1.16 1.20 2.27

Total Units (in MU) 1713 7576 6143 4383 2547 3837 26199 641 610 1154 60 2465 937 1816 937 748 4438 33102

190

CHAPTER 8 8.1 Determination Annual Transmission Charges

8.1.1 Regulation 6 of TNERC (Terms and conditions for Determination of Tariff for Intra-State Transmission / Distribution of Electricity under MYT frame work) Regulations 2009 specifies the following: 6 (1) the State Transmission Utility / Transmission Licensee shall make an application for determination of transmission tariff for each of the control period in accordance with the provisions in Tariff Regulations 2005 8.1.2 Regulation 6 of TNERC Tariff Regulations 2005 specifies the following: 6. (1) The licensee may file the application for determination of tariff in Form 1 in Annexure 1 to the TNERC Conduct of Business Regulations. The tariff changes should normally be applied for to take effect from the 1st day of ensuing financial year and hence the application shall be filed before 30th November of Current Year along with Aggregate Revenue Requirement (ARR). (2) The application shall be accompanied by the fees specified in the TNERC Fees and Fines Regulations and verified by an affidavit in Form 2 specified in Annexure 2 to the TNERC Conduct of Business Regulations. (3) The application for determination of tariff for the existing Generating Stations and Transmission System shall be accompanied by information in the respective formats appended to these Regulations duly furnishing the figures for the previous year, current year and ensuing year. 8.1.3 Regulation 14 of TNERC MYT Regulation specifies the following: 14 wherever the Licensee is functioning as an integrated utility, the transmission cost is to be segregated and projected for each year of control period. 8.1.4 The Commission in its order No.2 dated 15-05-2006, on Transmission and wheeling charges, etc., had issued the following directives.

191

In the changing scenario, it is imperative that the function wise accounting is maintained as a whole, to avoid various assumptions when called for to furnish the function wise information for regulatory purposes.

The Regulation 62 of the TNERC Tariff Regulation specifies that The transmission licensee / STU shall endeavour to maintain separate function wise accounts for transmission system and furnish the revenue requirement line wise, voltage wise, bay wise and load dispatch centre wise

8.1.5 The TNEB had not complied with the above provisions while filing petition for determination of tariff. 8.1.6 In the petition the TNEB has submitted a comprehensive Aggregate Revenue Requirement for all functions, while the Regulations and directives warrant the TNEB, to furnish informations for different functions in distinct formats specified in the Regulations. 8.1.7 The Commission in its letter dated 22-01-2010, directed the TNEB to segregate the transmission assets and liabilities, revenue and expenditure and to furnish transmission charges separately. 8.1.8 The TNEB in their letter dated 24-02-2010, furnished the value of transmission assets, depreciation, interest on loan capital and O & M expenses. 8.1.9 The TNEB furnished the value of gross block of transmission assets at the end of each year as detailed below:
Table 166 Gross block of transmission assets furnished by TNEB

Gross block at the end of the year (Rs. In Crores) 2007-08 7224.63 2008-09 7690.58 2009-10 8403.30 2010-11 9187.32 2011-12 10050.30 2012-13 11000.73 8.1.10 The value of gross block of the transmission assets as at the end of 200708 as per audited annual statement of accounts of TNEB for the year 192

Year

2007-08 was Rs.6017.42 Crores. The TNEB was asked to clarify the increased value of assets. 8.1.11 The TNEB furnished the following reply: The Boards restructuring and bifurcation assignment has been awarded to a consultant. The proposal is under study by the Board. The generation and transmission assets have been segregated as per ESSAR 1985. However, the distribution assets which contain transmission assets have been segregated based on the ratio adopted by the consultant. Based on the above, the segregation of assets for the year 2007-08 and 2008-09 has been arrived. 8.1.12 The Commission decides to adopt the value as per the audited accounts of 2007-08. Once the transfer scheme is finalized and issued, the same could become the basis of future tariff setting. The methodology adopted by the Commission would not affect the interest of petitioner in any way. 8.1.13 The wind energy development circles are facilitating development of private wind mill projects and establishing infrastructures to evacuate power from private wind mills. Transmission assets created by these circles have been accounted for as generation assets. The value of substations and transmission lines of voltages above 66 kV have been segregated and included in the transmission assets for the purpose of arriving at the annual transmission charges. The proposed capital expenditures on transmission assets by these circles are also allotted to transmission. 8.1.14 The TNEB furnished the capital investment plan for transmission assets without voltage wise number of sub-stations and length of transmission lines. The Commission directed the TNEB to furnish the details of associated transmission system for the proposed addition to the generation capacity. 8.1.15 The TNEB subsequently furnished the details of associated transmission system. However, the corresponding (estimated) value of the transmission system has not been furnished.

193

8.1.16 The Commission has

therefore provisionally adopted the value in the

capital investment plan for the purpose of capitalization. 8.1.17 The Commission fixes the value of gross block of transmission assets is as below.
Table 167 Gross block of transmission assets fixed by TNERC

(Amount in Rs Crores) 2009-10 Closing balance at 6667.99* the beginning Add: Additions 964.81 887.80 8520.60 1720.72 10241.32 771.59 11172.21 2010-11 7632.80 2011-12 8520.60 2012-13 10241.32

Balance at the end 7632.80 of the year

* Rs.6518.71 at the end 2008-09 as per balance sheet plus Rs.149.28 Crores transferred
from wind mill assets.

8.1.18 Determination of annual transmission charges (1) Regulation 59 of TNERC Tariff Regulations 2005, specifies the following: 59 Transmission Tariff Charges The tariff for transmission of electricity by a transmission system shall comprise recovery of annual transmission charges consisting of the following computed as per the principles outlined in Chapter III of these Regulations. (i) Interest on Loan Capital; (ii) Depreciation (iii) Operation and Maintenance Expenses; (iv) Interest on Working Capital at normative availability; and: (v) Return on equity: The annual transmission charges computed as per this Regulation shall be total aggregate revenue requirement of the STU / Transmission licensee.

194

(2)

The various components of transmission charges have been determined in the chapter referred to below:
Table 168 Elements of transmission charges Sl. No 1 2 Fixed Charges component Depreciation Interest on Loan Capital Return on Equity Operation & Maintenance Expenses Reference to chapter / para

6.5.5 6.3.21 6.4.7

3 4

6.11.2

(3)

The total annual transmission charges shall be as below:

Table 169 Transmission Charges approved by TNERC

(Rs.in Crores)
Sl. No 1 2 3 4 5 5 Depreciation Interest on Loan Return on Equity O & M Expenses Other Debits Interest on Working Capital 6 Total Annual 1839.85 2154.37 2390.39 1888.10 2021.28 2169.28 52.58 60.15 66.22 Particulars 2010-11 351.97 822.85 149.65 462.80 TNEB 2011-12 387.64 1032.51 192.77 481.30 2012-13 427.20 1160.53 235.89 500.55 2010-11 267.57 1023.39 102.15 487.71 7.28 0 TNERC 2011-12 310.93 1094.49 88.52 521.36 5.98 0 2012-13 351.95 1158.59 94.68 558.02 6.04 0

Transmission Charges

(4)

Regulation 59 of the Tariff Regulation specifies that the annual transmission charges computed as per the Regulation shall be the total annual revenue requirement of the STU / Transmission Licensee and the following shall be deducted from the total revenue requirement to arrive at the charges recoverable from the long term open access customer. (a) Transmission charges collected from the short-term Intra-State open access customers, Captive power plant and generating stations using non-conventional energy sources. 195

(b)

Income from other business to the extent of portion to be passed on to the beneficiaries and

(c)

Reactive energy charges and transmission charges received from CTU for use of facilities of licensee.

(5)

The short-term open charges and other income have been projected based on the actuals for the year 2008-09.

(6)

The net provisional annual transmission charges to be recovered from the distribution licensee after deducting short-term open access charges collected, Income from other sources are tabulated as below:
Table 170 Net provisional annual transmission charges to be recovered from the distribution licensee

(Amount in Rs Crores)
Sl. No 1 Particulars 2010-11 Total Annual Transmission Charges Less: Short-Term Open Access Charges Less: Misc. Income Net Annual Transmission Charges 1839.85 TNEB 2011-12 2154.37 2012-13 2390.39 2010-11 1888.10 TNERC 2011-12 2021.28 2012-13 2169.28

97.26

99.20

101.19

1839.85

2154.37

2390.39

5.00 1785.84

5.50 1916.58

6.00 2062.09

(7)

The provisional transmission charges shall be revisited and finalized in accordance with regulation 57 and 6 of Tariff Regulation, 2005.

196

CHAPTER 9 TARIFF FOR RETAIL DISTRIBUTION 9.1 Regulation 68 of the TNERC Tariff Regulations specifies the following:
68 Component of tariff for supply of electricity (1) The charges for the electricity supplied by the Distribution licensee may include:(a) a fixed charges / Demand Charges; (b) Charges for actual electricity supplied; (c) a rent or other charge in respect of meter or electrical plant provided by the Distribution licensee; (2) Rent for meter provided by the licensee and other charges are treated as nontariff charges and shall be determined by the Commission in accordance with the provision of Tamil Nadu Electricity Supply Code and Tamil Nadu Electricity Distribution Code. (3) Charges for actual electricity supplied and fixed charges are tariff related charges and the Commission shall determine these charges on an application from the Distribution licensee.

9.2

Under Regulation 69 (1) of the Tariff Regulation 2005, the Distribution licensee shall file application for retail distribution of electricity along with Aggregate Revenue Requirement (ARR).

9.3

Regulation 70 of the Tariff Regulations 2005 specifies the following:

70. The Aggregate Revenue Requirement of Distribution licensee The Aggregate Revenue Requirement of Distribution licensee consists of the following:(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) Cost of Power Purchase Operation and Maintenance expenses Depreciation Interest and cost of finance Income Tax Provision for Bad and Doubtful Debts Provision for Insurance Provision for contingency reserve other expenses Return on equity / Reasonable rate of return

197

9.4

The components of ARR are discussed below:

9.4.1 Cost of Power Purchase 9.4.1.1 In the ARR the TNEB has claimed the following as power purchase cost for the control period:
Particulars Power purchase 2010-11 16527.84 2011-12 15141.12 2012-13 16440.10

9.4.1.2

The claim was examined with reference to the energy requirement and source of purchase.

9.4.1.3

The power purchase cost admitted by the Commission is discussed in chapter 5

9.4.1.4

The power purchase cost claimed by TNEB and admitted by the Commission are as below:
Table 171 Power purchase cost admitted by TNERC

(Rs. in Crores)
TNEB 2010-11 Power Purchase cost 2011-12 2012-13 2010-11 TNERC 2011-12 2012-13

16527.84 15141.12 16440.10

16202.67 13835.73 11371.78

9.4.2 Annual Transmission Charges 9.4.2.1 The TNEB has claimed the charges relating to the transmission facility along with the charges for other functions. 9.4.2.2 The Commission has determined the charges for the transmission facilities of the TNEB separately in chapter 8. 9.4.2.3 The transmission charges are payable by the distribution licensee once the transfer scheme under section 131 of the Act is given effect to. It is therefore included in the ARR of the distribution licensee separately. 9.4.2.4 The quantum of transmission charges determined by the Commission is as below:

198

Table 172 Annual transmission charges approved by TNERC

Particulars Annual Transmission charges (Rs. in Crores)

2010-11 1785.84

2011-12 1916.58

2012-13 2062.09

9.4.3 Fuel Cost 9.4.3.1 The TNEB has claimed the cost of coal, oil, lubricants, water charges, station auxiliaries, etc. for all the generating stations owned by them. 9.4.3.2 The other cost like O & M, depreciation, Interest on loan, Return on Equity, etc relating to the generating stations have been claimed separately along with total expenses. 9.4.3.3 The Commission has determined two part tariff to generating stations in chapter 7. The total cost of generation as per the generation tariff is taken as transfer price and compared with the fuel cost claimed by the TNEB as below:
Table 173 Fuel / generation cost approved by TNERC

(Rs.in Crores)
TNEB 2010-11 Fuel cost Cost of 4723.40 2011-12 5998.30 2012-13 6829.55 5998.81 7765.39 8717.10 2010-11 TNERC 2011-12 2012-13

generation

9.4.3.4

The Commission has segregated all other expenditure in the ARR (except power purchase and fuel cost) function wise in chapter 6.

9.4.3.5

The expenses relating to generation and transmission are included in the generation tariff and transmission charges respectively.

9.4.3.6

The various expenses allocated to distribution function are as below:

199

Table 174 Various expenses allotted to distribution functions by TNERC

(Rs.in Crores) Sl. No 1 2 3 4 5 6 Expenses O & M Charges Depreciation Interest on Loan Other Debits Return on equity Total 2010-11 2923.40 349.16 1428.07 9.56 133.94 4844.13 2011-12 3130.30 392.77 1324.72 7.30 108.11 4963.2 2012-13 3356.02 433.52 1475.21 7.46 116.91 5389.12

9.4.4 Income Tax: The TNEB has not made any claim for Income Tax in ARR, as there no incidence for income tax liability. 9.4.5 Bad & Doubtful Debts: The TNEB is reported to be maintaining efficient collection of 99.81% in 2008-09. The TNEB is maintaining accumulated provision upto 2.5% of the sundry debtors at the end of the year towards provision for doubtful dues. The provision in any year to maintain the level at 2.5% is included in the other debits. 9.4.6 Provision for Insurance & Contingency Reserve: Regulation 30 of TNERC Tariff Regulations 2005 specifies that the generating company and licensee may adopt the practice of self insurance and a provision upto 0.50% of the capital cost shall be allowed by the Commission in their revenue requirement. 9.4.7 Regulation 31 of TNERC Tariff Regulations specifies that the generating and licensee shall provide and maintain a contingency reserve upto 0.50% of the value of assets at the beginning of the year and the provision made for the year will be allowed in their revenue requirement. 9.4.8 The TNEB has made a provision of 1% on the value of assets of generating stations and included the provision in the administrative and general expenses. No separate provision has been made for contingency reserve. This has been admitted.

200

9.4.9 The comprehensive Revenue Requirement claimed TNEB is compared with the revenue requirement admitted by the Commission for distribution licensee.
Table 174 Revenue requirement approved by TNERC.

(Rs.in Crores)
2010-11 Power Purchase Cost Transmission Charges Fuel cost / Cost of generation O & M Expenses Depreciation Interest on Loan Other Debits RoE Demand Side Management Total ARR TNEB 2011-12 2012-13 2010-11 TNERC 2011-12 2012-13

16527.84 15141.12 16440.10 0 4723.40 3463.64 1086.36 3464.99 139.41 378.25 0 5998.30 3602.19 1189.81 4032.05 138.46 412.23 0 6829.55 3746.28 1303.86 4571.18 137.46 449.80

16202.67 1785.84 5998.81 2923.40 349.16 1428.07 9.56 133.94 10.00 28841.45

13835.73 1916.58 7765.39 3130.30 392.77 1324.72 7.30 108.11 10.00 28490.90

11371.78 2062.09 8717.10 3356.02 433.52 1475.21 7.46 116.91 10.00 27550.09

29783.89 30514.16 33478.23

9.4.10 Regulation 80 (2) of the TNERC Tariff Regulations specifies the following
(1) The aggregate annual revenue requirement of the licensee shall be arrived at after deducting the following from the total expenses: (i) Amount of other income including non tariff related charges as per regulation 68(2). (ii) (iii) (iv) Income from surcharge and additional surcharge from open access consumers. Wheeling charges recovered from the open access consumers Authorised portion of Income from other business engaged by the licensees for optimum utilisation of assets. (v) Any revenue grant received from Government (other than subsidy)

201

9.5

Other Income

9.5.1 The TNEB has projected the following as other income (Misc. Income)

Table 175 Other income projected by TNEB (Rs

in Crores)
2011-12 7.05 1.06 22.36 0.26 0.01 37.93 270.04 0.12 102.28 441.11 2012-13 7.40 1.11 23.47 0.27 0.01 39.83 280.84 0.13 107.40 460.46

S. No. 1 2 3 4 5 6 7 8 9 10

Particulars Interest on loans and advances to employees Income from investments Belated payment surcharge collected from consumers Interest on Advance to Suppliers / Contractors Interest from Banks Income from Sale of tender forms, stores, Scraps, etc. Rebate availed on Power Purchase Bills Income from hiring vehicles to employees and other welfare activities Miscellaneous Receipts Total

2010-11 6.71 1.01 21.29 0.24 0.01 36.13 259.66 0.11 97.41 422.57

9.5.2 The major components of other income are belated payment surcharge, and rebate availed on power purchase. These incomes are exclusively for distribution function. 9.5.3 After allocating the other income based on the actual during previous years to generation and transmission, the balance has been allocated to distribution. 9.5.4 The total other income projected by TNEB has been accepted by the Commission and allocated to various functions as detailed below:

202

Table 175 Total other income approved by TNERC

(Rs. In Crores) Sl. No 1 2 3 Details Generation Transmission Distribution Total 2010-11 37.05 5.00 380.52 422.57 2011-12 37.05 5.50 398.55 441.11 201213 37.05 6.00 417.41 460.46

9.6 Non-Tariff Income 9.6.1 The TNEB has projected the following as Non-tariff revenue in ARR as below:
Table 176 Projection of non-tariff revenue by TNEB

(Rs. In Crores) Sl. No. 1 2 3 4 Particulars Meter Rent Recovery of theft of power, etc. Wheeling Charges Other Miscellaneous Charges collected from consumers Total 2010-11 17.80 34.94 204.65 354.36 611.75 2011-12 18.97 41.92 268.04 407.52 736.45 2012-13 20.21 50.31 351.07 468.65 890.24

9.6.2 The wheeling charges include short-term open access charges. The shortterm open access charges for the control period has been projected

based on the actual 2009-10 and deducted from the annual transmission charges and the balance has been allocated to distribution as detailed below:

203

Table 177 Allocation of STOA charges for the control period

(Rs in Crores) Sl. No 1 2 3 Details Transmission Distribution Total 2010-11 97.26 514.49 611.75 2011-12 99.20 637.25 736.45 2012-13 101.19 789.05 890.24

9.7 Net Aggregate Revenue Requirement 9.7.1 The net aggregate revenue requirement is arrived at as below:
Table 178 Net ARR approved by TNERC TNEB 2010-11 Total ARR Less: Other Income Less: Tariff Revenue Net ARR Non2011-12 2012-13 2010-11

(Rs in Crores)
TNERC 2011-12 2012-13

29783.89 30514.16 33478.23 422.57 611.75 441.10 736.45 460.46 890.24

28841.45 380.52 514.49

28490.90 398.55 637.25

27550.09 417.41 789.05

28749.57 29336.61 32127.53

27946.44

27455.10

26343.63

9.8 REVENUE RECEIPTS 9.8.1 In the ARR the TNEB has not furnished slab wise consumption. 9.8.2 The Commission in letter dated 22-01-2010 and 19-02-2010 directed the TNEB to furnish slab wise consumption for all categories of consumer wherever different tariff is prevalent for different slabs. 9.8.3 The TNEB in letter dated 23-02-2010 furnished slab-wise consumption for domestic consumers for the control period based on the percentage in each slab out of the total consumption for the year 2008-09. As the TNEB proposed separate tariff for the bi-monthly consumption slabs of 201-400 and 401-600, the proposed consumption in these slabs for the control period were called for. The TNEB in the letter dated 23-04-2010 furnished bi-monthly consumption in these slabs.

204

9.8.4 The consumption and revenue with existing tariff is computed as below :
Table 179 Consumption and revenue with the existing tariff 2010-11 Category consum ption (in MU) Net Revenue (Rs in Crores) 7128.82 42.88 111.95 333.27 2011-12 consum ption (in MU) Net Revenue (Rs in Crores) 7724.27 44.67 118.41 356.09 2012-13 consumpt ion (in MU) Net Revenue (Rs in Crores) 8370.64 45.56 126.59 379.34

HIGH TENSION Industries including railway traction Railway Traction Government and aided educational institution Cinema Theatre & Studios and Private educational institutions Places of Pub. Worship Commercial Lift Irrigation Supply to Pondicherry Supply to other states Total HT 18846 16282.0 0 411 4 1581 245 141 8701.50 3828.40 15.70 1.40 541.49 109.48 62.91 20408 17065 428 5 1625 231 185 9425 4013.27 16.41 1.75 556.56 103.40 82.31 22101 17886 447 6 1669 208 242 10210 4208.08 17.15 2.10 571.63 93.27 107.39 15959 96 260 774 17292 100 275 827 18739 102 294 881

4 1744 9

1.32 1082.80 0.45

4 1901 9

1.32 1180.28 0.45

4 2072 9

1.32 1286.45 0.45

II

LOW TENSION (Lakhs) Domestic Huts Bulk Supply Public Lighting Government and aided educational institution Cinema Theatre & Studios and Private educational institutions Places of Pub. Worship Cottage and Tiny Industries Power Loom Industries Agriculture Commercial Temporary Supply

98.00 117.00 855.00 4089.00 11206.0 0 4555 19

31.02 30.58 174.33 1902.83 266.55 2711.09 13.30

104 122 889 4242 11436 4874 33

32.91 31.85 181.08 1973.56 272.02 2899.03 23.10

110 128 924 4401 11666 5215 56

34.82 33.30 189.19 2047.61 277.49 3099.85 39.20

205

Total LT

39603.0 0 58449

9689.08

41239. 00 61647

10187.25

42958.00

10721.08

Total HT and LT

18390.58

19612.74

65059.00

20931.43

9.8.5 The revenue at the existing tariff projected by TNEB is compared with the revenue projected by the Commission as below:
Table 180 Revenue at the existing tariff projected by TNERC 2010-11 consumption Net Revenue (in MU) (Rs in Crores) 60751 19331.77 58449 18390.58 2011-12 consumption Net Revenue (in MU) (Rs in Crores) 65610 20728.05 61647 19612.74 2012-13 consumption Net Revenue (in MU) (Rs in Crores) 70817 22509.52 65059 20931.43

TNEB TNERC

9.9.

Revenue Gap

9.9.1 The revenue gap is the difference in the revenue requirement and the revenue with the existing tariffs, which is to be bridged by a revision in the tariff. The Commission has computed the TNEBs revenue gap for the years 2010-11,2011-12 and 2012-13 as below:

Table 181 Revenue gap computed by TNERC (Rs TNEB 2010-11 2011-12 2012-13

in Crores)
TNERC 2011-12 2012-13

2010-11

Revenue required 28749.57 29336.61 32127.53 from sale of electricity Revenue with 19331.77 20728.05 22509.52 existing tariff Revenue Gap 9417.80 8608.56 9618.01

27946.44

27455.10

26343.63

18390.58

19612.74 7842.36

20931.43

9555.86

5412.20

9.10

Approach to Tariff Rates

9.10.1 The Commission has accepted the revised tariff rates proposed by the TNEB except the following (1) Railway Traction

206

(a) The Southern Railway made the following submission before the Commission (i) The recorded maximum demand in the traction substations varies depending on the number of trains running in the feeding zone. The traffic pattern is not constant due to goods trains, seasonal trains and bunching of trains due to force majeure conditions. (ii) Due to varying nature of loads which is not practicable to control the recorded demand within the band of 90% to 100% of contracted maximum demand. (iii) The trains while on the run from the originating station to the destination runs through the feeding zones of several contiguous traction sub-stations registering demand at every feeding point; but the load on the grid remains fairly constant. Thus the same train registers demand at multiple points causing payment of demand charges at multiple points for the same train. (b) The Commission may consider the following: (i) Simultaneous maximum demand of contiguous traction substations connected to the same grid may be adopted for billing purpose: or (ii) The demand charges may be reduced by 33%: or (iii) A single part tariff with energy charges (without demand charges) not exceeding the average rate of realization from EHT industrial consumer (in two part tariff). 9.10.2 The Commission Considered the submission and decided the following: (1) The single part tariff cannot be granted for the Railway traction service as the services are having specific contract demand. (2) The simultaneous demand recorded in the several contiguous traction sub-stations (service connection point) cannot be assigned to a single point for the purpose of billing. (3) The demand charges for the Railway Traction is revised and fixed at Rs.250 perkVA per month.

207

(4) Railways demand to classify the Railway Level Crossing along with the tariff applicable for Public Lighting is accepted.

9.10.3 LT Tariff IC (Bulk Supply) 9.10.3.1 The TNEB has proposed to revise the tariff from Rs.3.50 per unit to Rs.5.00 per unit. 9.10.3.2 This tariff is applicable to LT bulk supply for railway colonies, plantation worker colonies, defence colonies, Police Quarters and other notified categories as decided by the Commission from time to time. 9.10.3.3 The industrial units drawing power at HT supply are extending the supply to the quarters and paying at rate applicable for LT I C. Hence the rate is fixed at the rate corresponding to the charges applicable to HT industries i,e Rs.4.00 per unit.

9.10.4 IT Industries 9.10.4.1 The TNEB in their letter dated 12-4-2010 have informed the Commission as follows: Government of Tamil Nadu was addressed for the provision of tariff subsidy to charge Basic Service providers and IT Enabled service under Industrial tariff. Since the chance of getting subsidy from Government of Tamil Nadu for this category appear to be meagre, these services may be charged under Industrial Tariff as per IT policy of Government. The revenue impact has been furnished separately. 2.0. In this connection, it is to be stated that as per Information Communication Technology (ICT) Policy of Tamil Nadu 2008 (copy enclosed for ready reference), under para (5), the following definition of terminologies are used: 3.0. IT ITES Companies will include IT Service (ITS), IT Enabled Services (ITES), Private Communication Providers (PCPS), software Industries, IT maintenance and servicing units and hardware units as covered in IT Policy 1997. a) IT Services are broadly defined as systems integrations, processing services, information services outsourcing, packaged software support and installation, hardware support and installation.

208

b) IT enabled services are human intensive services that are delivered over telecom networks or the internet to the range of business segments which will include Medical Transcription Legal Database processing Digital content development / animation Remote maintenance Back office operation Accounts / Financial service Data processing Call centers Engineering and Design Geographic Information service Human Resource Services Insurance claim processing Payroll Processing Revenue Accounting Support Centers Website Services Business Process Outsourcing (BPOs)

c) Private Communication providers include Class A, Class B and Class C Internet Service Providers, Right of way Memorandum of Understanding (MOU) holders, Basic Service Providers and value added service providers like the Common Service Centres operators in the State 4.0 In the same policy under para 9.5 (Power Tariff), the Government of Tamil Nadu has stated as follows: Tamil Nadu Electricity Board will provide power supply for Low tension units as per LT Tariff III C and for High tension units as per HT Tariff I A to Information Technology Industries whether set up in IT-ITES Parks or in stand-alone locations and also ensure quality of power as required by the industry. Hence for the purpose of power tariff, IT (as defined above), maintenance and servicing units and hardware units will be treated as Industrial and not commercial consumers and electricity tariff as applicable to industry consumers will be charged. 5.0 Further, Information and Communication Technology (ICT) has been a

major growth driver for the Indian economy in the last few years and has significant potential for growth in the coming years. Tamil Nadu has been

209

amongst the top three states in terms of ICT investments and production. It has been emerged as a hub for software, hardware and R&D. IT-ITES forms an integral part of ICT with tremendous potential for employment not only in Tamil Nadu but abroad also which will, in turn, fetch more revenue to our state. 6.0 Considering the above facts, it is requested that IT-ITES companies as defined in Para 5, 5 (a), 5(b) and 5 (c), maintenance and servicing units and hardware units as per Section 9.5 of ICT Policy 2008 may be treated as Industrial and not Commercial consumers. 7.0 Further, it has been noticed that some of the IT companies have also

permitted or authorised on outsourcing basis certain commercial organisations to run certain services such as catering services, ATM counters, Bank branches, Departmental Stores, Fast food outlets, Mobile phone stores, Book stalls, etc., inside their premises. These activities are not directly related to IT activities even though may be for captive usage and which are essentially commercially in nature, are being supplied with power for HT supply, which is provided exclusively for Industrial activities. 8.0 In view of the above, the following are placed before Honble Commission for consideration. Facilities like canteen, ATM, Gym, Bank, etc. created in the campus are meant predominantly for the use of the employees may be billed under the category of IT tariff. However if the facilities are mainly for the use of general public commercial tariff may be charged. 9.0 Considering the above facts, it is requested that IT-ITES companies as defined in para 5, 5(a), 5(b) and 5(c), maintenance and servicing units and hardware units as per Section 9.5 of ICT Policy 2008 may be treated as Industrial. However, if the facilities narrated above are mainly for the use of general public, commercial tariff may be charged. Accordingly, appropriate order may kindly be passed and the same may be communicated.

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9.10.4.2 The sum and substance of their letter is that IT-ITES Companies, maintenance and servicing units and hardware units as contained in the Information and Communication Technology Policy 2008 of the Government of Tamil Nadu may be treated as Industrial and not Commercial consumers. 9.10.4.3 The Commission held a meeting on 29-6-2010 with the Secretaries of Finance, Energy and Information and Technology Departments and the Chairman of the Tamil Nadu Electricity Board, wherein this subject figured. The Commission wanted to know from the Government whether the power tariff announced in the ICT Policy 2008 of the Government of Tamil Nadu could be given effect to in the tariff order. The Secretaries to Government informed the Commission that a view would be taken by the Government and communicated to the Commission shortly.

9.10.4.4 The Secretary, Energy Department has

informed the Tamil Nadu

Electricity Board in his letter dated 20-7-2010 as follows:The Government at the current juncture proposes to maintain the status quo and continue with the existing tariff classifications for Information Technology Services / Information Technology Enabled Services and private communication providers. TNERC may be informed accordingly. 9.10.4.5 The Chairman, TNEB in his letter dated 22-7-2010 has informed the Commission as follows:In continuation to the letter cited under reference, the following are submitted2.0 The Government at this current juncture proposes to maintain the status quo ante and continue with the existing tariff classifications for Information Technology Services, Information Technology Enabled

211

Services and private communication providers. A copy of the letter received from Government is enclosed for ready reference. 3.0 Under the above circumstances it is submitted that tariff for HT and LT of Information Technology Services alone may kindly be continued in HT Tariff IA / LT Tariff III B respectively and HT and LT services of IT Enabled services / private communication providers may kindly be continued in HT Tariff III / LT Tariff V respectively as at present. 4.0 TNEB shall also request for most urgent orders on its tariff revision proposal presently under consideration by the Honble TNERC.

9.10.4.6 The latest proposal of the TNEB is that HT and LT service connections of Information Technology Services may be granted HT Tariff I A / LT Tariff III B and HT / LT services of IT Enabled Services / private communication providers may be continued in HT Tariff III / LT Tariff V. 9.10.4.7 Therefore, the Commission decides to adopt HT Tariff I A / LT Tariff III B for Information Technology Services as defined in the Information Communication Policy (ICT Policy) 2008 of Government of Tamil Nadu. The definition is reproduced below: IT services are broadly defined as systems integration, processing services, information services outsourcing, packaged software support and installation, hardware support and installation. 9.10.4.8 HT / LT services of IT Enabled Services / private communication providers will be charged under HT Tariff III / LT Tariff V. 9.10.5 Hospitals run by charitable trust which offers totally free treatment for all categories of patients is treated on par with government hospitals and classified under LT Tariff II B (1) 9.10.6 The crches and recreation centers run by plantations for the benefit of plantation workers are classified under LT Tariff II B (1)

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9.10.7 The TNEB has proposed to revise the tariff for cinema theatres, studios from Rs.4.40 per unit to Rs.5.00 per unit and for private colleges from Rs.4.40 per unit to Rs.6.00 per unit. (1) There were objections for the proposal of charging higher tariff to education institutions than the charges for cinema theaters and studios. (2) The Commission has decided to bring both the consumer categories in one tariff category and charge at Rs.5.50 per unit. 9.10.8 The activities of horticulture, mushroom culture, fish culture, are brought under LT Tariff III A (1) where ever the connected load does not exceed 10 HP. 9.10.9 The braided cord manufacturing activities are brought under LT Tariff III A (2) as the activities are similar to power looms and had been earlier classified along with power loom. 9.10.10 Under LT Commercial category, a new slab of 0 to 50 units monthly

or 0 to 100 units bimonthly has been introduced with the tariff of Rs.4.30 per unit considering the demand of petty shop consumers.

9.11

TARIFF SCHEDULE

9.11.1 TARIFF FOR HIGH TENSION CONSUMERS 9.11.1.1 General Provisions Applicable for High Tension Supply:(1) Any High Tension Supply involving a sanctioned demand of 5000 kVA and above shall be given supply at 33 KV and above. (2) In the case of existing High Tension consumers whose sanctioned demand exceeds 5000kVA and who do not avail themselves of supply at the voltage indicated in item (1) they shall be charged an extra levy of 10 213

paise per KWH over and above the normal tariff for the entire energy consumed. This extra levy is applicable to all categories of HT consumers till they avail supply at the specified voltage. (3) Low Power Factor Surcharge: In respect of High Tension service

connections the average power factor of the consumers installation shall not be less than 0.90. Where the average power factor of High Tension service connection is less than the stipulated limit of 0.90 the following compensation charges will be levied. Below 0.90 and up to 0.85 One per cent of the current consumption charges for every reduction of 0.01 in power factor from 0.90 One and half per cent of the current consumption charges for every reduction of 0.01 in power factor from 0.90 Two per cent of the current consumption charges for every reduction of 0.01 in power factor from 0.90

Below 0.85 to 0.75

Below 0.75

(4) Billable Demand: In case of two part tariffs, maximum Demand Charges for any month will be levied on thekVA demand actually recorded in that month or 90% of the sanctioned demand which ever is higher. Provided, that whenever the restriction and control measures are in force, the billable demand in case of two part tariff for any month will be the actual recorded maximum demand or 90% of demand quota, as fixed from time to time through restriction and control measures, whichever is higher. (5) In the case of supply under HT Tariff IA, IIA, and III, the use of electricity for bonafide purpose of lighting, heating and power loads in the residential quarters within the premises shall be metered separately by the consumers taking HT supply and paid to the Board at LT Tariff IC. The units shall be deducted from the total number of units registered in the main meter of HT supply for billing purposes. 214

9.11.2 HIGH TENSION TARIFF I A: Tariff category Tariff Demand Charge in Rs/KVA/ month High Tension Tariff I A 300 400

Energy charge in Paise per kWh(unit)

9.11.2.1 This tariff is applicable to all industrial establishments and Registered factories which includes Tea Estates, Textiles, Fertilizers, Salem Steel Plant, Heavy Water Plant, Chemical plant, common effluent treatment plant, Cold storage units, Information Technology Services Information Technology Services as defined in the Information Communication Policy (ICT Policy) 2008 of Government of Tamil Nadu. The definition is reproduced below: IT services are broadly defined as systems integration, processing services, information services outsourcing, packaged software support and installation, hardware support and installation. 9.11.2.2 The HT Industrial consumers (HT IA) shall be billed at 20% extra on the energy charges for the energy recorded during peak hours. The

duration of peak hours shall be 6.00 A.M to 9.00 A.M and 6.00 P.M to 9.00 P.M. 9.11.2.3 The HT Industrial Consumers (HT I A) shall be allowed a reduction of 5% on the energy charges for the consumption during 10.00 P.M to 5.00 A.M as an incentive for night consumption. 9.11.2.4 The consumption of electrical energy by the HT Industrial Consumers under HT IA having Arc furnaces will be charged an additional energy charge of 15% on the HT IA tariff.

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9.11.2.5 High Tension Industries under Tariff I-A having arc, induction furnaces or steel rolling process the integration period for arriving at the maximum demand in a month will be fifteen minutes. 9.11.2.6 If the HT consumer under this category needs to extend LT supply within their area of operation for any commercial purposes, they have to inform TNEB suitably and meter such consumption separately and pay at the appropriate LT Commercial Tariff.

9.11.3 HIGH TENSION TARIFF I B RAILWAY TRACTION Tariff category Tariff Demand Charge Energy charge in Paise in Rs/KVA/ month High Tension Tariff I B 250 400 per kWh(unit)

This tariff is applicable to railway traction. 9.11.4 HIGH TENSION TARIFF II-A Tariff Category HT Tariff IIA Tariff Demand Charge Energy charge in in Rs/KVA/ month Paise per kWh(unit) 200 400

9.11.4.1 The tariff is applicable to Government and aided educational institutions, Hostels run by such educational institutions, Government Hospitals, Hospitals under the control of Panchayat Unions,

Municipalities or Corporations, Veterinary Hospitals, Leprosy SubCentres, Primary Health Centres. Health Sub-Centres, Orphanages, Public Libraries, Water works, Public Lighting, , Public Sewerage

216

Works by Government/local Bodies, Public Water Supply by New Tirupur Area Development Corporation, Electric crematorium by local bodies, Laboratories, Research institutions, , Ministry of defence and Avadi CRPF establishment, Desalination plant at Kudankulam Nuclear power plant. 9.11.4.2 If the HT consumer under this category needs to extend LT supply within their area of operation for any commercial purposes, they shall inform TNEB suitably and separately meter such consumption and pay at the applicable LT Commercial tariff. 9.11.5 HIGH TENSION TARIFF II B Tariff Category Demand Charge in Rs/KVA/ month HT Tariff II B 200 Tariff Energy charge in Paise per kWh(unit) 450

9.11.5.1 The tariff is applicable to Private educational institutions and hostels run by them, Studios, Cinema Theatres. 9.11.5.2 If the HT consumer under this category needs to extend LT supply within their area of operation for any commercial purposes, they shall inform TNEB suitably and separately meter such consumption and pay at the applicable LT Commercial tariff.

9.11.6 HIGH TENSION TARIFF II-C Tariff Category Tariff Demand Energy charge Charge in in Paise per Rs/KVA/ month kWh(unit) 125 280

HT Tariff II-C

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9.11.6.1 This tariff is applicable to actual places of public worship, mutts, and religious institutions , 9.11.6.2 If the HT consumer under this category needs to extend LT supply within their area of operation for any commercial purposes, they shall inform TNEB suitably and separately meter such consumption and pay at the applicable LT commercial tariff.

9.11.7 HIGH TENSION TARIFF III Tariff Category Tariff Energy charge in Paise per kWh(unit) 580

HT Tariff III

Demand Charge in Rs/KVA/ month 300

9.11.7.1 This tariff is applicable to all Commercial Establishments and other categories of consumers not covered under High Tension Tariff IA, IB IIA, IIB, IIC and IV. 9.11.7.2 IT Enabled Services / private communication providers will be charged under this tariff 9.11.7.3 Industries requiring HT supply shall be charged under this tariff during construction period.

9.11.8 HIGH TENSION TARIFF IV Demand Tariff Category Charge in Rs/KVA/ month HT Tariff IV Nil 50 Energy charge in Paise per kWh(unit)

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This tariff is applicable to the Lift Irrigation Societies for Agriculture registered under Co-operative Societies or under any other Act.

9.11.9 TARIFF FOR LOW TENSION CONSUMERS 9.11.10 Tariff LOW TENSION TARIFF I-A: Consumption slabs Energy Range in kWh(units) and charges in billing period (one or paise / kWHr two months) From 0 to 25 units per 110 month (or) 0 to 50 units for two months From 26 to 50 units per 130 month / 51 to 100 units for two months From 51 to 100 units per 260 month / 101 to 200 units for two months From 101 to 300 units per 350 month / 201 to 600 units for two months From 301 units and above 575 per month / 601 units and above for two months Fixed charges (Rupees / Month) Monthly minimum (in Rupees)

Low Tension Tariff I-A

20 5

This tariff is applicable generally for domestic purposes of lights and fans including radio/TV and other home appliances. The tariff is also applicable to the following category of services (1) Handlooms in residences of handloom weavers (regardless of the fact whether outside labour is employed or not) and to handlooms in sheds erected where energy is availed of only for lighting and fans. (2) Public conveniences maintained and run by the local bodies and by such other organisations

219

(3) Community Nutrition Centres and Block Offices of Tamil Nadu Integrated Nutrition Projects. (4) Anganwadi Centres, Nutritious Meal Centres and School Buildings associated with the Government Welfare Schemes and Electric crematorium by local bodies. (5) Old Age Home, Leprosy Centre run by charitable institutions rendering free service. (6) Consulting Rooms of any professionals attached to the residences of such professionals provided no trading is undertaken or no motive power is used in the Consulting Room. (7) All consumers under this category, shall have ISI marked motor and motor loads of 3 HP and more shall install adequate power factor improvement capacitors (ISI marked) Non compliance shall invite compensation charges as per TNERC regulations. 9.11.11 Tariff LOW TENSION TARIFF I-B: Description Energy charges in paise / kWHr Low Tension Tariff I-B On Installation of Energy Meter 50 Nil 10 Till installation of Energy Meter Fixed charges (Rupees / Month) Rs. 10 / Month Monthly minimum (in Rupees)

This tariff is applicable to huts in Village Panchayats and special grade panchayats, houses constructed under Jawahar Velai Vaiipu Thittam, TAHDCO and Kamarajar Adi Dravidar housing schemes and huts in Nilgiris District. This tariff is applicable subject to following conditions

220

(1) Hut means a living place not exceeding 250 square feet area with mud wall and the thatched roof / tiles / asbestos / metal sheets like corrugated G.I.sheets for roofing. (2) Only one light not exceeding 40 watts shall be permitted per hut. (3) Wherever, colour TV has been supplied by the Government to BPL

family, one light not exceeding 40 Watts and one 14" colour TV not exceeding 70 Watts (Total 110 watts) shall be permitted per hut. (4) Whenever the norms prescribed in (1) to (3) above are violated, the service category shall be immediately brought under Low Tension Tariff I-A and billed accordingly 9.11.12 Tariff LOW TENSION TARIFF I-C: Fixed charges (Rupees / Month) Nil Monthly minimum (in Rupees) 50

Energy charges in paise / kWHr Low Tension 400 Tariff I-C (1)

This tariff is applicable to the LT bulk supply for railway colonies, plantation worker colonies, defence colonies, Police Quarters.

(2)

All consumers under this category shall have ISI marked motor and motor loads of 3 HP and more shall install adequate power factor improvement capacitors (ISI marked). Non compliance shall invite compensation charges as per Tamil Nadu Electricity Regulatory Commission regulations.

9.11.13 Tariff

LOW TENSION TARIFF II-A: Description Energy charges in paise / kWHr 340 Fixed charges (Rupees / Month) Nil Monthly minimum (in Rupees) 50

Low Village / Town Tension Panchayat Tariff IIA Municipality / Corporation

350

Nil

50

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(1)

This tariff is applicable to Public Lighting, Public Water Supply and Public Sewerage System belonging to village/Town Panchayats Township areas, Municipalities, Municipal Corporations, Railway level crossing, TWAD Board, private agriculture wells hired by CMWSSB, village/Town Panchayats Township areas, Municipalities, Municipal Corporations and TWAD Board to draw water for public distribution, Public Water Supply by New Tirupur Area Development Corporation and separate service connection for streetlight in SIDCO and other Industries Department.

(2)

All consumers under this category shall have ISI marked motor and motor loads of 3 HP and more shall install adequate power factor improvement capacitors (ISI marked). Non-compliance shall invite

compensation charges as per Tamil Nadu Electricity Regulatory Commission regulations. 9.11.14 LOW TENSION TARIFF II-B (1) Tariff Energy charges in paise / kWhr 480 Fixed charges (Rupees / Month) 20 Monthly minimum (in Rupees) 50

Low Tension Tariff IIB (1)

(1)

This tariff is applicable to Government and Government aided Educational Institutions, Hostels run by such Educational Institutions, Hostels run by Adi-Dravidar and Tribal Welfare, Backward Class Welfare Department and other Government agencies, Government Hospitals, Hospitals under the Control of the Panchayat Unions, Municipalities and Corporations, Veterinary Hospitals, Leprosy SubCenters, Primary Health Centers, Health Sub-Centers, Laboratories, creches and recreation centers run by plantations, Research Institutes,

222

Orphanages, Public Libraries, Homes for Destitute and Old people, Flood Lighting arrangements in the Rock Fort Temple, its environs and the roads and pathways leading to temple at Tiruchillapalli, Emergency accident Relief centers on highway, Rehabilitation centre for mentally ill, Terminal cancer care centre giving free treatment. Hospitals run by charitable trust which offers totally free treatment for all categories of patients on par with government hospitals. (2) All consumers under this category, shall have ISI marked motor and motor loads of 3 HP and more shall install adequate power factor improvement capacitors (ISI marked) Non compliance shall invite compensation charges as per Tamil Nadu Electricity Regulatory Commission regulations.

9.11.15

LOW TENSION TARIFF II-B (2) Tariff Energy charges in paise / kWHr Low Tension Tariff (2) II-B 550 Fixed charges (Rupees / Month) 20 Monthly minimum (in Rupees) 50

(1)

This tariff is applicable to Studios, Cinema Theatres, Private educational institutions

(2)

All consumers under this category, shall have ISI marked motor and motor loads of 3 HP and more shall install adequate power factor improvement capacitors (ISI marked) Non compliance shall invite compensation charges as per Tamil Nadu Electricity Regulatory Commission regulations.

223

9.11.16

LOW TENSION TARIFF II-C: Tariff Energy charges in paise / kWHr Low Tension 300 Fixed charges (Rupees / Month) 10 Monthly minimum (in Rupees) 50

Tariff II-C

(1) This tariff is applicable to actual places of public worship, religious mutts, religious institution, Goshalas run by charitable trusts. (2) All consumers under this category shall have ISI marked motor and motor loads of 3 HP and more shall install adequate power factor improvement capacitors (ISI marked). Non-compliance shall invite compensation

charges as per Tamil Nadu Electricity Regulatory Commission regulations.

9.11.17 Tariff

LOW TENSION TARIFF III-A (1): Consumption slabs Energy Fixed charges (Rupees / Month) Monthly minimum (in Rupees)

Range in kWh(units) and charges in billing period (one or paise / kWHr two months) Low Tension From 0 to 250 units per month ( or) 180

30

60

Tariff III- 0 to 500 units for two A (1) months From 251 to 750 units per month ( or) 501 to 1500 units for two months From 751 and above per month ( or) 1501 and above for two months 270

350

224

(1)

This tariff is applicable to cottage and tiny industries, micro enterprises engaged in the manufacture or production of goods pertaining to any industries specified in the first schedule to Industries (Development and Regulations) Act 1951 (Central Act 65 of 1951)..

(2)

The intending consumers applying for service connection under LT Tariff III A (1) claiming to have established the micro enterprise engaged in the manufacture or production of goods (with connected load not exceeding 10 HP) shall produce the acknowledgement issued by the District Industries Center under the Micro Small and Medium Enterprises Development Act, 2006 ( Act 27 of 2006 ) as proof for having filed Entrepreneurs Memorandum for setting up of Micro Enterprises for manufacture or production of goods with District Industries Center under whose jurisdiction the Enterprise is located.

(3)

The existing consumers who are classified under LT Tariff III A (1) based on the SSI / Tiny Industries Certificate may be continued to be charged under the same tariff till next tariff revision.

(4)

This tariff is also applicable to small gem cutting units, sericulture, floriculture, Dairy units horticulture, mushroom culture, fish culture, where the connected load does not exceed 10 HP

(5) (6)

Supply to welding sets has to be classified under Low Tension Tariff IIIB. All consumers under this category shall have ISI marked motor and motor loads of 3 HP and more shall install adequate power factor improvement capacitors (ISI marked). Non-compliance shall invite compensation

charges as per Tamil Nadu Electricity Regulatory Commission regulations.

225

9.11.18 Tariff

LOW TENSION TARIFF III-A (2) : Fixed charges (Rupees / Month) Monthly minimum (in Rupees)

Consumption slabs Energy Range in kWh(units) and charges in billing period (one or paise / kWHr two months) Low From 0 to 250 units per Tension month ( or) 140 Tariff III- 0 to 500 units for two A (2) months From 251 to 750 units per month ( or) 225 501 to 1500 units for two months From 751 and above per month ( or) 250 1501 and above for two months (1)

30

60

The tariff is applicable to power looms, Braided Cords Manufacturers, related ancillary tiny industries engaged in warping, twisting, and winding.

(2) (3)

The connected load shall not exceed 10 HP under this category. All consumers under this category shall have ISI marked motor and motor loads of 3 HP and more shall install adequate power factor improvement capacitors (ISI marked). Non-compliance shall invite

compensation charges as per Tamil Nadu Electricity Regulatory Commission regulations. 9.11.19
Tariff

LOW TENSION TARIFF III-B:

Fixed charges (Rupees / Month) 30 40 / kw Monthly minimum (in Rupees)

Consumption slabs Energy Range in kWh(units) and charges in billing period (one or two paise / kWHr months) Low From 0 to 750 units per 400 Tension month ( or) Tariff III-B 0 to 1500 units for two months From 751 and above per 500 month ( or) 1501 and above for two months

30

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(1)

This tariff is applicable to all industries not covered under LT Tariff III A (1) and III-A (2), Common effluent treatment plants, Dairy units, Coffee grinding, Ice factory, body building units, saw mill, rice mills, flour Mills, prawn farming, poultry farms, fish culture, battery charging units and Information Technology Services Information Technology Services as defined in the Information

Communication Policy (ICT Policy) 2008 of Government of Tamil Nadu. The definition is reproduced below: IT services are broadly defined as systems integration, processing services, information services outsourcing, packaged software support and installation, hardware support and installation. (2) (3) Supply to welding sets shall be charged 15% extra. All Services under this category with a connected load of 25 HP and above should maintain a power factor of not less than 0.85. Where the average power factor of Low Tension Service connection is less than the stipulated limit of 0.85 the following compensation charges will be levied. Below 0.85 and up to 0.75 One per cent of the current consumption charges for every reduction of 0.01 in power factor from 0.85. One and half per cent of the current consumption charges for every reduction of 0.01 in power factor from 0.85

Below 0.75

9.11.20 Tariff

LOW TENSION TARIFF IV: Description Energy Fixed charges Monthly charges in (Rupees / minimum (in paise / kWHr Month) Rupees) Rs.250 per HP per Annum

Low Tension Tariff IV

Till installation of Energy Meter On installation of Energy Meter

20

Nil

25

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(1)

This tariff is applicable to Agriculture and the Government Seed Farms, pump sets of Tamil Nadu Agriculture university, pump sets of Research centre of Tamil Nadu Forest department pump sets of Government coconut nurseries and pump sets of Government coil seed farms

(2)

This tariff is applicable irrespective of owner ship of land if the usage of electricity is for agriculture and the usage is restricted to the owned/leased area

(3)

All the new services under this category shall have ISI marked motors and power factor compensation capacitors to qualify for the supply. All the existing services should be provided with power factor compensation capacitors within one year. Non-compliance to provide the capacitors

shall invite compensation charges as per the Tamil Nadu Electricity Regulatory Commission regulations. (4) The services under this tariff shall be permitted to have lighting loads up to 50 watts per 1000 watts of power connected subject to a maximum of 150 watts inclusive of wattage of pilot lamps. Lighting the farm or the field around the pump sets should be through energy saving compact fluorescent lamps only. Extra lighting over and above the limit and for uses other than lighting shall be through a separate service under LT Tariff V only. (5) Agriculturists shall be permitted to use the water pumped from the well and stored in overhead tanks for bonafide domestic purposes in the farmhouse. The farmhouse shall be in close proximity not exceeding 50 meters from the well. (6)
Sugar cane crushing motors and allied equipments shall be permitted to

be

connected and operated only when the respective agricultural services are provided with energy meters. When such services are not provided with meters; the consumer shall immediately opt for the metering.

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9.11.21 Tariff

LOW TENSION TARIFF V: Consumption slabs Energy Range in kWh(units) and charges in billing period (one or paise / kWHr two months) 430 From 0 to 50 units per month ( or) 0 to 100 units for two months From 51 to 100 units per month ( or) 101 to 200 units for two months From 101 and above per month ( or) 201 and above for two months 650 30 530 30 40 Fixed charges (Rupees / Month) 30 Monthly minimum (in Rupees)

Low Tension Tariff V

(1)

This tariff is applicable to all Commercial establishments and consumers not categorized under LT IA, IB, IC, IIA, IIB (1), II B (2), IIC, IIIA (I), III A (2), IIIB, and IV.

(2)

IT Enabled Services / private communication providers will be charged under this tariff.

(3)

All consumers under this category shall have ISI marked motor and motor loads of 3 HP and more shall install adequate power factor improvement capacitors (ISI marked). Noncompliance shall invite compensation charges as per TNEBs terms and conditions. The services having a

connected load of 25 HP and above shall be covered under the power factor penalty system as in (5) below. (4) The tariff is also applicable for L.T. supply for construction activities of residential building/complex till the completion of construction activities. (5) All Low Tension Services under this category and with a connected load of 25 HP and above should maintain a power factor of not less than 0.85.

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Where the average power factor of Low Tension Service connection is less than the stipulated limit of 0.85 the following compensation charges will be levied.

Below 0.85 and up to 0.75

Below 0.75

One per cent of the current consumption charges for every reduction of 0.01 in power factor from factor from 0.85. One and half per cent of the current consumption charges for every reduction of 0.01 in power factor from 0.85

9.11.22

LOW TENSION TARIFF VI: Tariff Energy charges in paise / kWHr Supply to temporary 1050 activities and construction activities other than Residential building/Residential Complexes for combined lighting and Power load. Lavish illumination 1050 Description Minimum (in Rupees)

Low Tension Tariff VI

50 per kW or part thereof per day

(i)

The LT tariff VI is applicable for the requirements of a temporary supply during the construction stage. The temporary supply shall be converted into the respective regular category after the completion and compliance to the respective terms and conditions.

(ii)

This Tariff is also applicable for lavish illumination to weddings, garden parties and other private functions where the illumination is obtained through bulbs fastened in outer surfaces of walls of buildings on trees and poles inside the compound and in pandals, etc., outside the main building. All other cases of illumination, obtained through bulbs

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intended on outer surface of walls of buildings on trees and poles inside the compound and in pandals etc., outside the main building shall be charged as for Temporary Supply.

9.11.23

GENERAL CONDITIONS

(1) The above tariff shall be read with the General Terms and Conditions of Supply Code and Distribution code specified by the Tamil Nadu Electricity Regulatory Commission. (2) The present tariff order does not alter the previous specific orders of the Commission on categorization of certain consumers.

9.12

Revenue At New Tariff

Table 182 Revenue at New Tariff
Category 2010-11 consumptio Net n Revenue (in MU) (Rs in Crores) 15959 96 260 774 7926.77 46.14 120.76 410.67 2011-12 consumpti Net on Revenue (in MU) (Rs in Crores) 17292 100 275 827 8588.87 48.06 127.73 438.79 2012-13 consumptio Net n Revenue (in MU) (Rs in Crores) 18739 102 294 881 9307.59 49.02 136.55 467.44

The Commission has computed the revenue with new tariff rate as below:

HIGH TENSION Industries including railway traction Railway Traction Government and aided educational institution Cinema Theatre & Studios and Private educational institutions Places of Pub. Worship Commercial Lift Irrigation Total HT

4 1744 9 18846

1.32 1222.32 0.45 9728.43

4 1901 9 20408

1.32 1332.36 0.45 10538

4 2072 9 22101

1.32 1452.21 0.45 11414.58

II

LOW TENSION Domestic Huts Bulk Supply Public Lighting Government and aided educational institution 16282.00 411.00 4.00 1581.00 245.00 3942.50 15.70 1.60 541.49 119.28 17065.00 428.00 5.00 1625.00 231.00 4132.73 16.41 2.50 556.56 112.64 17886.00 447.00 6.00 1669.00 208.00 4333.46 17.15 3.00 571.63 101.59

231

Cinema Theatre & Studios and Private educational institutions Places of Pub. Worship Cottage and Tiny Industries Power Loom Industries Agriculture Commercial Temporary Supply

141.00

78.42

185.00

102.66

242.00

134.01

98.00 117.00 855.00 4089.00 11206.00 4555.00 19.00 0

31.02 31.70 174.33 2012.01 266.55 3078.06 19.95

104.00 122.00 889.00 4242.00 11436.00 4874.00 33.00 0 41239.00

32.91 33.01 181.08 2086.82 272.02 3291.29 34.65

110.00 128.00 924.00 4401.00 11666.00 5215.00 56.00 0 42958.00

34.82 34.50 189.19 2165.12 277.49 3519.11 58.80

Total LT

39603.00

10312.61

10855.28

11439.87

Total HT and LT

58449

20041.04

61647

21392.86

65059.00

22854.45

9.13

The Additional revenue due to increase in tariff is as below:

Table 183 Additional revenue due to increase in tariff

(Rs in Crores)
TNEB 2010-11 2011-12 2012-13 2010-11 20041.04 TNERC 2011-12 21392.86 2012-13 22854.45

Revenue with 21259.96 22841.38 24717.36 new tariff Revenue with 19331.77 20728.05 22509.52 existing tariff Increase in 1928.19 2113.33 2207.84 Revenue

18390.58 1650.46

19612.74 1780.12

20931.43 1923.02

9.14

Revenue Gap with new Tariff The shortfall in revenue after tariff revision is as below:
Table 184 Revenue gap with new tariff

(Rs in Crores)
TNEB 2010-11 2011-12 2012-13 2010-11 TNERC 2011-12 2012-13

Revenue required 28749.57 29336.61 32127.53 from sale of electricity Revenue with 21259.96 22841.38 24717.36 new tariff Revenue Gap 7489.61 6495.23 7410.17

27946.44

27455.10

26343.63

20041.04

21392.86

22854.45

7905.04

6062.24

3489.18

232

9.15

Treatment of uncovered Gap

HAS PRAYED THAT THE UNCOVERED REVENUE GAP AS ON

9.15.1 THE BOARD

31ST

MARCH 2010

BE TREATED AS

REGULATORY ASSETS

AND CARRIED OVER TO

BE RECOVERED THROUGH FUTURE TARIFFS.

9.15.2 IN

PARA

3.1 (TREATMENT

OF REVENUE SHORTFALL) OF THE PETITION THE

BOARD

HAS

SUBMITTED THE FOLLOWING WITH REGARD TO TREATMENT OF

CUMULATIVE REGULATORY ASSET OF RS.16774.47 CRORES:

The existing tariff revision procedure does not allow the recovery of shortfalls either automatically by the Board or through a mid-year tariff revision by the Commission. Thus the entire revenue loss incurred during the financial year has to be borne by the Board. Non-recovery of such shortfall will give rise to stranded cost and the Board will continue to carry it in its Balance Sheet. Also since the recovery of the entire shortfall in one financial year (say in FY2010 -11) would put heavy burden on consumers, the Board does not wish to burden the consumers with such a huge increase in tariffs, so as to recover this entire shortfall in one go. The Board's intention is to minimize the rate shock to consumers and to maintain a smooth tariff trajectory to recover the costs. It is thus proposed to treat the above-explained accumulated shortfall as a special class of assets namely Regulatory Assets for the future years. The said asset is of the nature of a deferred expenditure and will be charged as expenditure while formulating the Annual Revenue Requirement in the future years. It is proposed to recover these short falls through equal installments in future years

233

9.15.3 THE BOARD

HAS

CITED THE PRECEDENTS OF SUCH TREATMENT IN

ORISSA

ERC, HARYANA ERC AND ANDHRA PRADESH ERC. (1) The case of Orissa relates to treatment the difference in revenue due to different basis of calculation of T & D losses adopted by the GRIDCO (41%) and the OERC (35%). (2) In the case of Haryana, the difference was due to application of revised tariff only for three months in an year. (3) In Andhra Pradesh, the Commission has accepted the proposal to carry forward the portion of financial losses which was on account of factors beyond the control of the licensee. (4) The reason for non recovery of accumulated losses in TNEB cannot be attributed to the factors beyond the reasonable control of the licensee or any other factors considered by other Commissions. (5) Para 8.2.1 (5) of Tariff Policy prescribes the following: Pass through of past losses or profits should be allowed to the extent caused
by uncontrollable factors. During the transition period controllable factors should be to the account of utilities and consumers in proportions determined under the MYT framework

(6)

Para 8.2.2 (a) of Tariff Policy prescribes the following:

The circumstances should be clearly defined through regulations, and should

only include natural causes or force majeure conditions. Under business as usual conditions, the opening balances of uncovered gap must be covered through transition financing arrangement or capital restructuring

(7)

Regulation 13 of TNERC Tariff Regulation specifies the following:

a. Wherever the licensee could not fully recover the reasonably incurred cost at the tariff allowed with his best effort after achieving the benchmark standards for the reasons beyond his control under natural calamities and force majeure conditions and consequently there is a revenue shortfall and if the Commission is satisfied with such conditions, the Commission shall treat such revenue shortfall as Regulatory Asset/

234

b. The regulatory asset shall first be adjusted against the contingency reserve. The balance regulatory asset, if any, will be allowed to be recovered within a period of three years as decided by the Commission. c. The licensee shall intimate the Commission then and there when such contingency arises. d. Any un recovered gap at the beginning must be covered through transition financing arrangement or capital restructuring. (8) The above provisions were already brought to the notice of TNEB in Commissions letter dated 09-08-2006. (9) TNEB has projected revenue gap for the years 2010-11, 2011-12 and 2012-13 in their tariff petition. The Commission has arrived at the gap for these years as Rs.7905.04 crores, Rs.6062.24 crores and Rs.3489.18 crores respectively and this gap is after allowing a tariff increase of Rs.1650.46 crores. It is to be noted here that the last tariff hike in Tamil Nadu was in June 2003 and the TNEB has not preferred any tariff revision thereafter, eventhough their operating costs have been going up. The Commission had also advised them to file tariff revision petition but in vain. There is an accumulated loss of about Rs.16500 crores up to 200809. The estimated revenue gap for 2009-10 is not available. Had there

been regular tariff adjustments over the last 7 years the revenue shortfall would not have grown to this extent. There has been no major capacity addition by TNEB for the last 10 years. The Board has been buying expensive power from the market which is a major reason for the gap, besides increase in employee expenses consequent to the implementation of the 6th Pay Commission Report for the TNEB employees. The Commission observes that if the on going projects are commissioned according to schedule, the revenue gap would start coming down. The restructuring of the TNEB is expected to address the

accumulated loss of previous years. Since a huge gap exists even after the proposed tariff hike, the Commission has no choice but to treat the remaining portion as regulatory asset. The regulated asset would further

235

increase in the next two years as the trend of revenue gap continues. This issue can be addressed only in the long term. To prevent the tariff shock to the consumers, per force it to resort to creation of regulatory asset as a last resort.

Sd/(K.VENUGOPAL) MEMBER

Sd/(S.KABILAN) CHAIRMAN

236

Annexure I MEMBERS OF 19TH STATE ADVISORY COMMITTEE MEETING HELD ON 11-03-2010

1. Thiru. S. Kabilan, Chairman, TNERC. 2. Thiru. R. Rajupandi, Member, TNERC. 3. Thiru. K. Venugopal, Member, TNERC. 4. Thiru. R. Balasubramanian, Secretary, TNERC 5. Thiru. C.P. Singh, Chairman, TNEB 6. Dr. R. Christodas Gandhi, CMD, TEDA 7. Thiru V. Sethuraman, Director, NLC 8. Thiru. I. Srirama, Chief Electrical Engineer, Southern Railway 9. Thiru. S.V. Balasubramaniam, Member SAC 10. Thiru. D. Kumaravelu, Member SAC 11. Dr. M. Abdullah Khan, Member SAC 12. Thiru. DE. Ramakrishnan, Member SAC 13. Thiru S. Rathinasabapathy, Member SAC 14. Thiru K. Kasthurirangaian, Member SAC 15. Thiru. S. Rethinavelu, Member SAC 16. Thiru. G.S. Rajamani, Member SAC 17. Thiru. P, Gajapathi, Member SAC 18. Thiru. Alandur Bharathi, Member SAC 19. Thiru. N.L. Rajah, Member SAC

Special Invitees : Thiru. P.W.C. Davidar, Secretary to Government, Energy Dept., Government of Tamil Nadu. Thiru. Praveen Kumar, Secretary (Expenditure), Finance Department,

Government of Tamil Nadu.

237

Annexure II
LIST OF STAKEHOLDERS WHO HAVE SUBMITTED WRITTEN SUGGESTIONS AND OBJECTIONS

SL NO 1

NAME & ADDRESS The President, All District Ice Producers Welfare Association, 1/118, Paalathadi-Keechakuppam, Nagapattinam 609001 Thiru K Alagirinathan Siru Visaithari Thuni Urpathiyalarcal Pathukappu Sangam, Kamaraja Nagar Colony, Salem 636014 Thiru K Gopalakrishnan Hon Gen Secretary, Tamilnadu Small & Tiny Industries Association, No 10, gist. Road, Guindy, Chennai 600032 Proprietor, Sree Mookambika Steam Laundry, No 1&2, Keerai Thottam, Street No 7, Kempetty Colony, Coimbatore 641001 Thiru M Pandeeswari General Secretary, Madurai District Public Welfare Rights Association & Consumer Protection Council, No 60, Yanaikkal treat, Madurai 625001 Thiru V Nadanasabapathy Chairman, Creed Krishi Vigyan Kendra, Cholamadevi Udayarpalayam Taluk, Ariyalur district, Tamil Nadu Thiru K Muthiah Executive Trustee, Consortium for consumer justice, 46 -A, P.G Mansion, Maninagaram Main Road, Madurai 625001 Dr G Rajaram, Chairman & Chief Functionary, Federation of consumer organizations- Tamilnadu & Pondicherry (FEDCOT). Thiru N Narayana Reddy, President, District Small Farmers Welfare Association, Beegisettipalli(Vill), P.C.Puram (P.O), Hosur (Tk), Krishnagiri (Dt), Tamilnadu Thiru. U. Subramanian, No.28, North Mada Complex, Vedaranyam, Nagapattinam District. Thiru R Ganesan, Plot No 12, Mohanapuri 1st street, Adambakkam, Chennai 600088 Thiru T.N.Arulanandhan, General Secretary, The World Community Service Centre ( WCSC) , 26, Second Seaward Street, Valmiki Nagar, Thiruvanmiyur, Chennai 600041

10 11

12

238

13

14

15

16

17

18

19

20 21

22

23

24

25 26 27

28 29

Thiru M.P. Purushothaman, President , South India Hotels & Restaurants Association, M 1, Prince Centre, 709-710, Anna Salai, Chennai 600006 Thiru V Krishnamoorthy ( Retd-Revenue dept), No 9/14, Venus Street, Sastha Vihar, Iyyappa Nagar, Trichy 620021 Thiru V Gopalakrishna, Plot No 301, D.No 27, Anna Street, Senthilnagar, S.M. Nagar Post, Chennai 600062 Thiru. S. Muthukrishnan, 37/3, Vaithi North Street, Seranmahadevi, Nellai 627 414. Thiru. A. A. Normohammad, 7 Jalia Street, Kuthanallur 614 101 Thiruvarur District Thiru. N. Natesan, 11C, Kamarajar Salai, Karaikudi Thiru. S. Durairaj, Sri Radhakrishnan Ricemill, Athur Main Road, Gangavalli Post & Ward Salem District 636 105. Thiru N.S.Venkatesan ( IRSSE- Retd), 76, 5th Cross Street, Mahalakshmi Nagar, Adambakkam, Chennai 600088 Thiru. P. Johnson Paul Daniel, 1/78, Thenthamaraikulam Post, Kanyakumari District Thiru. R. Kaliamoorthy, Consumers Protection and General Welfare Association, 35/28, Melaveedi, Thirupanathal - 612 504 Thiru K R B Nair ( Retd Kerala E.B Employee), Pournami, Valvachagestam, P.O Kattathurai 629158, Kanyakumari District Thiru. P. Sivalingam, 394, Shanmugapuram proper Street, Tuticorin -2. Thiru D.P. Suresh Kumar, General Secretary, Janata Party, Namakkal district, 82, Main Road, Namakkal 637001 Thiru Ariua Janakiraman, 4, Nehru Colony, B.A. Road Extension, Kumbakonam City, 612001, Tamil Nadu Thiru. L.C. Srinivasan, No.415, 1st Main Road, TNHB Quarters, Valajapettai , Vellore 632 513. Thiru G Muniasamy, General Secretary, Madurai Consumer Protection Centre, 48/6, West Ponnagaram, 4th Street, Madurai 625016 Karu. Palanivel, President, Parents Teachers Association, Thittacherry, Harichandrapuram ,Vadamathimangalam Post.

239

30 31

32 33

Thiru. Moovalur kavi Ravithilagan, 18/15, North Ramalinga Street, Mayiladurai Thiru. N. Subash Chandrabose,/.President, All India Building & amaippu sara Thozhilalargal Mathya Sangam, 705, TAJ, Karaikal Main Road, K. Pudur 612 205 . Salem Mandala Kumaran Visaithari Pothu Thozhilalrgal Sagam, 1/126, Thangasalai, Vennandur 637505, Namakkal district Thiru S Sampath, Secretary, Bhelsia E mail : bhelsia@yahoo.com Thiru. V. Kaliappan S/o Venkatasala Goundar, Ganapathipalayam South, Karur 639 005. P. Muthukrishnan, Secretary, The Chennai Metropolitan House /Flat Owners Welfare Association No.88-A, MIG Flat, P.T. Rajan Salai, K.K. Nagar, Chennai 78 The Secretary, Arimalam Union Consumers Corps, No.4, Pasumadathar Veethi, Arimalam Thiru. C. Rajendran, Consumers Rights Protection Council, No.6, Tamukum shopping Complex, Tallakulam ,Madurai Thiru. A. Krishnaiah, S/o A. Venkataramaiah, 3rd ward Member & 25, Veppampattu Panchayat, D.No.539, Sunder Babu Nagar, 89, Veppampattu 602 024. Tiruvallur Dt T. Gnanasekaran, 19-11, A/5, kaveri nagar, Mettur Dam 1. Thiru. S. Sureshkumar, PRO, Tamil Media & Journalist Welfare Association, No.9, Kakkanji Nagar, ICF, Chennai 38 The Secretary, Tirunelveli District Chamber of Commerce & Industry, No.17, Arunagiri Complex, 25-B/1, S.N. High Road, Tirunelveli -1. Thiru. Prof. S. Sethuraman, Sastra University , Thanjavur 613 402. Tamil Nadu . Thiru. K. Balasubramanian, Puliangudi Regional Small powerlooms owners association, Senkunthar Valibar Sanga Building, Sundara Vinayagar Koil Street, T.N. Pudukkudi, Puliangudi 627 855. Thiru. S.V. Swaminathan, 152, Akkasari Vinayakar Koil Street, Tirunelveli Town 627 0076

34

35

36 37

38

39

40

41

42

43

44

240

45

46

47

48

49 50

51

52

53 54

Thiru. Venugopal, President, Makavi Bharathi Nagar Development House Owners Welfare Association, 12th Centre Cross Street, Makkavi Bharathi nagar, Chennai 39 Thiru. Mylsami, President, Erode District Small Industries Association, No.5/1, SIDCO Industries Estate, Chennamalai Rd, Erode 638 001. Thiru. K. Muthusami, S/o P. Kailasam (Late), 23 V.P. Koil Street, Pitchanoor, Gudiyatham, Vellore Dist. Thiru. V.K. Subramania Raja, Managing Director, Geetha Krishna Spinning Mills Pvt. Ltd., PB No.76, Madurai Rd, Rajapalayam 626 117. Thiru. K. Manokaran, 4/1, Ashtapuzam Road, Choolai, Chennai 112. Thiru. S. Deivanayagam, Nehru Nagar Kudisai Abhiviruthi Sangam, No.12, Nedunchezhiyan Street, Nehru Nagar, Chennai 32. M/s Sri Karunambika Powerlooms Owners Association, No.7/29K, Madathukupalayam Road, Avinasi 641 654. Coimbatore District Thiru K. Manivasagan, S/o Kandasamy, 3rd Ward Street Lane, Ongini Post, Senthurai Division, Ariyaloor Dist. Sri Vinayaka Coolies weaving Owners Association, Pudupalayam 641 654. The Weaver Owners Associaton, Tehkkalur, Avanasi Division, Coimbatore Dist. Thiru. V. Soundararajan, Thirunagesgaram. Sri Karunambigai Weavers Owners Association, 7/29K, Madathupalayam Road, Avinasi 641 654, Coimbatore Dist. Thiru Sanjay Sharma, SE, Dir ( Ser), Chief Engineer Chennai Zone, Military Engineer Services, Island Grounds, Chennai 600009 Thiru. A. Srinivasamoorthy, 1/66, Kamaraj Nagar Road, Thalavaipuram 626 188, Virudu Nagar Dist.

55 56

57

58

241

59

Madurai Betel Nut Beedi Cigarette Merchants Association, 58-59, Manjanakkara Muthiah Pillai Street, Madurai 625001 The President, Coimbatore District Coolies Weaving owners Association Power House Road, Somanur 641 668, Coimbatore Dist Thiru. S. Boominathan, S/o Swamynathan, 1/69, Keela Chidambaranapuram, Thathuvacherry Post, Thiruvadaimaruthur Division. Thiru. A. Gopalan, No.23, Valluvar Street, Uraiyur, Tiruchirapalli 620 003. Thiru R Panneerselvam, General Secretary, Tamil Nadu Film Exhibitors Association, D.R.Maligai, No 2, Old No 16, Poes Road, III Street, Teynampet, Chennai 600018 Thiru K Venkatachalam, Chief Advisor, Tamilnadu Spinning Mills Association, D.No 24, 11TH Cross Street, Thiruvalluvar Nagar, Spencer Compound, Dindigul 624003 LEAD CLUB, Plot No M.I.G 1328, 2nd Main Road, TNHB, Velachery, Chennai 600042 Thiru. S. Chandran, 47/106, 7th Block, Kannadasan Nagar, Chennai 118. Thiru. S. Bhaskaran, No.45/33, Old Munship Court Street, Saidapet, Chennai 632 012. Mallasamudram Small Powerloom Jawli Urpathiyalargal Samgam, Mallasamudram 637503, Tiruchengode Tk, Namakkal District Thiru. T. Senkottuvel, NO.32, State Bank Road, Erode 638 001. Thiru. V.L. Jayaprakash, S/o V. Loganathan, No.25, Valaiyalkara Street, Saidapet, Vellore 632 012. Thiru. P. Anandhan, 12B, Bharathiyar Street, Ulaganathapuram, Thiruchirapalli 20. Thiru. S. Pancharatnam, SAC Member, No.3/326(1), Ranganathan Street, Bank Colony, Pudunatham Road, Madurai 625 014. Thiru. C.K. Subramanyam, 1/122, Eswaran Koil Street, Kathivadi Village, Mel Vidaram Post, Vellore District 632 509. Street,

60

61

62 63

64

65

66 67

68

69

70

71

72 73

242

74

Thiru. A.K. Ayyangar, Founder, Villupuram District Farmers Federation, Baadur ,Ulundurpettai Tk, Villupuram Dist Thiru N.J. Nareis, 14, Rajiv Gandhi Street, Lakshmipuram, Chrompet, Chennai 600044 Thiru C.S.Krishnan, No 6, 4th Street ( E), Periyar Nagar, Vadavalli, Coimbatore 641041 Thiru S Mahalingam, 39/75 (55) West Street, Vishnupuram 609506, Thiruvarur District Thiru. K.R. Shajahan, No.24, Pensioners Colony, Kesava Nagar, Post, Thiruchirapalli 620 023. Khaja Nagar

75

76

77

78

79

Thiru. K.G. Ganesan, District Secretary, 3/7=672, Gandhi Road, Ammaiyarkuppam 631` 301, Pallipattu Division, Tiruvallur District. Federation of consumer & service organizations, No 5, 4th Street, Lakshmipuram, Tiruchirappalli 620010 E Mail : fedservorg@yahoo.com

80

81

Raghul Spinning Mills, 3/191-A, Melapattam Karisalkulam 626110, Rajapalayam Thiru A Gopalasamy, Member, State General Council, T.N.C.C., 9/8, Railway Station Road, Vaiyampatti O.O, Trichy District, Tamilnadu 621315 Thiru Dr V Balasubramanian, 79, II St. Thirumalai Colony, Madurai 625016 Thiru V Ramalingam, General Secretary, State Consumer Rights Protection of Federation, Muthuramalinga Thevar Street, Gandhi Nagar, Vathalagundu 624202, Dindigul District, Tamilnadu. Thiru. K. Rangaraju, No.12, Bharathiyar Street, Ulaganathapuram, Trichirapalli - 20 Thiru N Narayana Reddy, President, District Small Farmners Welfare Association, Beefisettipalli ( Vill), P.C.Puram (P.O) Hosur ( Tk), Krishnagiri ( Dt), Tamilnadu Thiru S.K.Ananthan, Vice President Operations, Patspin India Ltd, 2/85-B,

82

83 84

85

86

87

243

Udumalai Tirupur Road, Ponneri, Kottamangalam P.O, Udumalpet 642201 88 Dr. Thiru. A. Krishnamoorthy, (Retired Sr. Civil Surgeon), District Co-ordinator, Federation of Anti Corruption Teams India , (FACT INDIA), Old No.16, New No.45, Mettu Street, Chinna puliampatti, Aruppukottai, 626 101. Virudhunagar Dist. Thiru. M.R. Mothilal, Braided Cord Manufacturers & Merchants Association, No.2/3A, A.A. Road, Chairman Muthuramaiyar Road, Madurai 625 009. The Director, K.P.R Mill Ltd, No 9, Gokul Buildings, 1st Floor, A.K.S Nagar, Thadagam Road, Coimbatore 641001 VXL Ferros, P.B No 4412, S.F No 651/4, Pollachi Road, Coimbatore 641021 Thiru. N. Jeyabalan, -2/311-9, Sona Nagar, New Fairlanders, Salem 636 016. Thiru. P. Appandairajan, Postal Pensioner, 22, Chinna Jain street, Goripalayam, Arani . Thiru. A. Abdul Jabbar, (Retired Sub-registrar co-operative societies ), No.5, Karthik Nagar, Pillaiyarpatti, Vallam 613 403. Thiru. Machine N. Kumar, No.7, Hospital Road, opp. To Government Primary Health Centre, Mallasamuthiram Post 637 503, Thiruchengode Tk, Namakkal Dist. Tmt R Gomarthy Nayagam & Tmty G Kanagasundari, 89/5, Boopala rayarpuram, Thoothukudi 1 Thiru. T. Moorthy, 69, School street, Velayudapuram, Aruppukottai 626 101, Virudhunagar. Thiru Dr N V Girishkumar Indian Medical Association, Coimbatore Branch, 92, Syrian Church Road, Coimbatore 641001 Thiru Dr T.V.Kumar Indian Medical Association, Chennai, Poonamallee branch, 255, Trunk Road, Poonamallee, Chennai 600056 & 3364 representations 99 Thiru T Loganathan, Ex Member Fishing Harbour, 17/A, 18 A, Jeevarathinam Nagar, Adayar, Chennai 600020 Thiru Sanjay Sharma, SE, Dir ( Ser), Headquarters, Chief Engineer Chennai Zone,

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244

Military Engineer Services, Island Grounds, Chennai 600009 101 Thiru Dr K Thangamuthu, M.S, Legal Chairman, PPLSSS, IMA, Tamilnadu, I.K.G.M Hospital, Coimabore Road, Pollachi Thiru P.S.Nagarajan, G-1, J.V. Royale 5/7, Arangan Street, Vijayalakshmipuram, Ambattur, Chennai 600053 Thiru A.V.Ramaswamy, Chairman , Vanaprastha Trust & Dhyanaprastha Foundation , Kasturinaicken Palayam, Vadavalli, Coimbatore E Mail :krishangan@gmail.com Thiru V Shunmugavelu, No 3, St No 8, Subbaraj Nagar, Bodinayakanur, 625513, Theni district E Mail : vshunmugavel@hotmail.com Thiru P R Raajakoomaran, Plot No 931, LIG II, CMDA, Mathur, Chennai 600068 Thiru. V. Azhagarsamy, Door No.274, South Tank Road, Allinagaram, Theni Dist . Human Rights Protection Council, No 5/23, Anna Sami Pillai Colony, Near A.S.T.C. Dubbo, Hosur, 635109, Sundarampally Post, Tirupattur Tk, Vellore Dt 635654 Thiru. Radhakrishnan, 1/1, Kadai Street, Vaimedu, Thasangu Post, Vedaranyam Division, Nagapattinam Dist. Thiru. Sureshkumar, News correspondence, Tamil Nadu Federation of Merchants Association, Kumar illam, 27, Paramathi Road, Namakkal 637 002. Thiru Dr N Mahendran, M.D, Secretary, Nursing Home Board Indian Medical Association, 92, Syrian Church Road, Coimbatore 641001 The Tamilnadu Foodgrains Merchants Association Ltd, 342, East Masi Street, Madurai 625001 Thiru. S. Sekar, Vadapalani, Chennai 26.

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Thiru C Venkatesan, Secretary, Mahkavi Bharathi Nagar Development House Owners Welfare Association, A.P. No 927, 12th Central Cross Road, M.K.B Nagar, Chennai- 39 Thiru J Jebachandran, Secretary, Emerald Estates Owners Welfare Association, Plot No 24, Emerald Estates, Jothi Nagar, 4th Street, Chrompet, Chennai 600044 A to Z Helping Service Trust, No 83, White Bettal Street, Fort Post Office, Trichy 620008 Aghin Chemicals, 2/32, Singikulam, Nanguneri Taluk, Tirunelveli 627152 Thiru Anantharam, E Mail : ananthap.ram@gmail.com The Secretary, St. Valanar Trust, St. Valan Kalamandram, Saral & Post, 629 203, Kanyakumari Dist. Indian Medical Centre, 283, T.T.K Road, Chennai 18 The President, All District Ice Producers Welfare Association, 1/118, PaalathadiKeechankuppam, Nagapattinam 609001 Thiru K Rajagopalan & Thiru A K Muthuraman, 170, A Block, Dev Apartments, 6th Cross Street, AGS Colony, Velachery, Chennai 42 Thiru J Sridhar, Plot No 25, Door No 6, Vth Main Road, Vijaya Nagar, Velacheri, Chennai 600042 S. Pathima Rajarathinam, Tamil Nadu Farmers Sangam, 5/166, St. Soosaiyar Street, Panchampatti, Dindigul Dist. TN 624 303. Thiru. A. Narayanasamy, President, Consumer Protection Committee, No.87,G.S.T, Road, Karunguzhi. Thiru. E. Naiyinar, District Secretary, Tamil Nadu Senior Citizens and Pensioners Welfare Association, No.41, V.C. Ramasamy Complex, Natarajapuram, Vadiveeswaram, Nagercoil 2, Kanyakumari

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Thiru T Babu, Founder Managing Trustee, Nugarvour Ulagam Trust, No 15/448, Keezhpaathi Street, Ikkadu Village & Post, Thiruvallur Taluk & District 602021 Thiru. N. Dharmaraj, TNEB Complex, Thillai nagar. Thiru. N. Soundappan, & 30 others, Thathagampatti gate, Weavers colony Road, Salem 6. Thiru. H. Khaja Bandhe Navas, 160A, Ashad Road, Melapalayam, Thirunelveli 627 005. Thiru. Agri. M. Balaiyan, State President, Tamil Nadu Fish grow Farmers Welfare Association, Annavasal, Eda.Keezhaiyur Post, Mannarkudi Taluk, Thiruvarur Dist. Thiru. S.K. Arunachalam, Secretary, Sooriyampalayam small powerloom Owners Association, Sooriyampalayam 637 209, Thiruchengode Division, Namakkal Dist. Thiru. N. Natesan, Secretary, Sooriyampalam Cooli sticking small powerloom waivers Association, Sooriyampalayam 637 209, Thiruchengode Division, Namakkal Dist. Thiru. S.K. Irulappan, Small powerloom Cotton manufacturers Sattaiyampudur, Thiruchengode, 637 211, Namakkal Dist. Association,

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Thiru. S.K. Arunachalam, Secretary, Sooriyampalayam small powerloom Owners Association, Sooriyampalayam 637 209, Thiruchengode Division, Namakkal Dist. Thiru. S.K. Arunachalam, Secretary, Sooriyampalayam small powerloom Owners Association, Sooriyampalayam 637 209, Thiruchengode Division, Namakkal Dist. Thiru M G Devasahayam, Managing Trustee, Citizens Alliance for sustainable living, C/so UN-Habitat Office, 5th Floor, CMDA Building ( Tower I ), Egmore, Chennai 8 Thiru. A. Kattabomman, Aavikkottai, Keelakurichi Post, Pattukottai Taluk, Thanjavur dist. Thiru. S. Balasubramanian, No.15/108, Dindigul Road, backside to Divya Marriage Centre , Velliyanai 639 118. Karur Dist. Thiru G Soundararajan, President, The South India Spinners Association, Flat No 103, A Block, Raheja Centre, 1073 & 1074, Avinashi Road, Coimbatore 641018

135

136

137

138

139

247

140

Namakkal District Powerloom Weaving Association for Wages, 315/1, Salem Main Road, Komarapalayam 638183 Tiru V Sekar, President, Komarapalayam Kongu Powerlooms Urimaiyalargal Sanam, 2/227-02, Near Power House, Salem Main Road, Komarapalayam 638183, Namakkal district Thiru Dr K Selvaraju, The Southern India Mills Association, Post Box No 3783, 41 Race Course, Coimbatore 641018 Thiru R Santha Moorthy, Secretary, Mettupalayam Consumer Protection Organisation, 216-B, Main Road, Meetupalayam 641301 Thiru. T. Moorthy, No.69, School Street, Velayaudapuram, Aruppukottai 626 101, Virudhunagar Dist. Thiru Dr N I Rameshwar, Secretary, Neelagiri Mushroom Growers Association, Ooty 643006 Thiru Louis Duraiswamy No 14/1, Ramanujam Street ( Ground Floor ), Choolaimedu, Chennai 600094 Thiru K Gopalakrishnan, Hon General Secretary, Tamilnadu Small & Tiny Industries Association, No 10, GST Road, Guindy, Chennai 600032 Thiru. K. Balasubramanian, Manager, Animal Husbandry Department, (Retd), 7D, 1St Floor, Lakhshmi Avenue 4th Cross Street, Amman Sethi, Urapakkam Post, 603 210. Thiru. Ramesh Belli, Joint Secretary, Nilgiris Pototas and Vegitable Manufacturers Association, Agraharam, Geetha Lodge Building, Udhagamandalam. Chief Electrical Engineer, Southern Railway, Chennai 600003 Gudiyattam Taluk All Powerloom Entreprenours Association, Vedantha Padasalai, 29, Appu Subbaiar Street, Pichanoor, Gudiyattam 632601 Thiru Thiru. N. Venkatraman, Secretary, Mettupalayam Consumer Protection Organisation, 216-B, Main Road, Meetupalayam 641301

141

142

143

144

145 146

147

148

149

Old

150

151

152

248

153

Thiru T Sekkilar, Circle Head Tamilnadu Circle Wireless TT Info Services Ltd, Celestial Point, # 45, Dhamodaran Street, T Nagar, Chennai 600017 Thiru A.P.Ramamoorthy 51, Vanaprastha, Vadavalli, Coimbatore 641041 E Mail : apr1818@hotmail.com

154

155

Thiru S Gandhi, President, Power Engineers Society of India, No 45/28, Balaguru Garden Extn,l Peeamadu, Coimbatore 641004 Thiru G Subramanian Secretary, Protection of Human Rights Centre, Headquarters : 24, Chinnaveeraraghavan Street, Kaveripakkam, Dindivanam. Thiru. P. Periasamy, S/o Palaniappan, Velliyanai village, Karur Dist. Thiru. K.G. Panneerselvam, Ex President of Trichy Reporters Association, No.1, 5th Cross, N.M.K. Colony, TVS Toll Gate, Trichy - 620 020. Tmt R Gomathy Nayagam & Tmty G Kanaga sundari, 89/5, Boopalarayarpuram, Thoothukudi 1 Thiru. Viswanathan , Ammapettai, Salem 636 003. Sr Leo Thomas, St Josephs Home for the Aged and Destitute, Podanur PO., Coimbatore 23 E Mail : sjhomecss@yahoo.com Thiru Prof D S Hanumantha Rao, Former Member, TNERC, 4, Thiruchendur Flats, New 7, Babu Rajendra Prasad First Street, West Mambalam, Chennai 33 Thiru Dr N S Marimuthu, Principal, National Engineering College, K.R.Nagar, Kovilpatti 628503, Thoothukudi District Thiru S Srinivasan, Dy Manager ( Legal ), Brakes India Ltd, Padi, Chennai 50 Thiru. L.K. Mathiniraiselvan, Kumara Old No.17, 1st Floor, Thomas Nagar, Chinnamalai, Saidapet, Chennai 15. (SC No.262-013-182). Thiru. A.S. Ramamoorthy, Deputy Superintending Engineer(Retd), Public Works Department, No.6, 6th Street, Society Colony, Thanjavore 613 007.

156

157

158

159

160

161

162

163

164 165

166

249

167

Avram Ami Trust, No.9, Chairman Thulasiram 1st Lane, Keelavelli Veedi, Madurai 1. Thiru R Duraisamy All India Induction Furnaces Association, 209, M.G. House, Community Centre, Wazirpur Industrial Area, Delhi 52 General Manager ( Finance & Accounts ) Sri Kannapiran Mills Ltd, Post Bag No 1, Sowripalayam Post, Coimbatore 641028 Thiru Venkatesh, Commercial Head TN Circle, Reliance Communications, Reliance House, No 6, Haddows Road, Nungambakkam, Chennai 600006

168

169

170

250

Annexure III

ANNEXURE - III - Details of Persons who deposed before the Commission

Public Hearing at : Chennai, Venue : Rani Seethai Hall Date : 30-3-2010

Sl No.
1 2 3

Name and Address of the Participants Dr. K. Thankamuthu, Legal Chairman, 1, KGM Hospital, Coimbatore Road, Polachi - 2. Dr. T.N. Ravi Shankar, Secretary, Indian Medical Association., Deepam Hospital, Tambaram Cell .9444047724. Dr. Regavelu,Indian Medical Association, Tamil Nadu Mrs. Canir Franklin, Treasurer, Association for Non-Traditional Employement for Women, AH, 16/107, 4th Street, Shantrhi Colony, Anna Nagar, Chennai 40. Phone : 26200697.

Thiru. G. Gopalakrishnan, Hon. General Secretary,Tamil Nadu Small and Tiny Industries Association, No.10, GST Road, Guindy,Chennai 32. Phone : 044-65610137.

Thiru. C.K. Mohan, Vice President, Tamil Nadu Small and Tiny Industries Association, No.10, GST Road, Guindy, Chennai 32. Phone 22250784l. Dr. S. Periyandi, All District Ice Producers Welfare Association, (Sea Food Process ), 1/118, Keechankuppam, Nagapattinam 609 011. Ph : 9443370094 Thiru . S.S. Subramanian, General Secretary of COTEE(CITU), No.27, Masque Street, Chepuak, Chennai 5. Thiru. V.S. Thiagarajan, ACMEC, Trust, Melmaruvathur Temple. Thiru. Chief Southern Railway. B.V. Electrical Distribution Chandrashekar, Engineer,

8 9

10

11

Thiru. G. Vedagiri, Secretary, North Chennai House Owners Association, No.47/20, Narayanappan Naicken Thottam, 7th Street, Old Washermenpet,Chennai -21.

251

12

Thiru. G. Subramainian, Senior Manager - Electrical,Jumbo Bag Ltd., NO.75, Thatchur Kottu Ponneri Taluk, Tiruvellore Dist. Road, Panjetty Village, 601 204. Thiru. G. Sriram, Se. Engineer, Rane Engine Valve Ltd., No. 4, Redhills Road, Madhavaram , Ponneri 601 204. Ph : 27974154. Dr. A.K. Krishnasamy, 56, Kosa Anamalai Street, Gudiyatham 632 602,Vellore Dist. Cell : 9443340179. Thiru. Raghunath, Administrative Officer, Sri Ayyappa Charitable Trust, 18, Sir Madhavan Road, Mahalingapuram Chennai 34. Thiru. K. Mohan, General Secretary, Tamil Nadu Vanigar Sankangalin Peravai,No.2, Shop Street, Ambattur, Chennai 53. Ph : 96001 71669. Thiru. S. Gandhi, Power Engineers Society of Tamil Nadu,Trichy 620 102 Mobile : 944300311. Thiru. M. Narayanan, State Vice President,Tamil Nadu Farmers Association,46, A . VOC Street,Kasthuri Bai Nagar, Chennai 45. Thiru. S. Kumaran, Associate Professor,Tamil Nadu Veterinary Animal Sciences University, MMC, Chennai 51 Mobile : 9444479988. Thiru. A.P. Srinivasan, Consumer Protection Forum, Chennai 4. Thiru. TRC Palaniraj, World Community Service Centre,Chennai 41 Mobile : 9445382348.

13

14

15

16

17

18

19 20 21

22

Thiru. Kamalakannan,Vice President,Mahkavi Bharathi Nagar Development House Welfare Association, AP 1092, 18th Central Cross Street, Mahakavi Bharathi Nagar, Chennai 39. Thiru. Venugopal,President,Mahkavi Bharathi Nagar Development House Welfare Association, AP 1092, 18th Central Cross Street, Mahakavi Bharathi Nagar,Chennai

23

24

Mrs. A. Girija, Co-opted Member,Animal Welfare Officer, Animal Welfare Board of India, Thiruvanmiyur, Chennai 41. Thiru. Deepamuthaiah,DEAN Kilpauk, Chennai 10. Foundation,No.73, New No.59, & 2nd Street,

25

26

Thiru. G. Venkatraman, Secretary General,South India Hotels Association,No.M1, Prince Centre, 709-710, Anna Salai, Chennai 6.

Restaurants

27

Thiru.P.Thandurairajan,Tamil Nadu Progressing Counselling Centre, 604, C.T.H. Road, Pattabiram, Chennai - 600 072.

252

28

Thiru. R. Rangachari,Advisor,M1, Prince Centre, South India Hotels & Restaurants Association,No.M1, Prince Centre, 709-710, Anna Salai, Chennai 6.

29 30 31 32

Thiru. Seshadri, Chief Financial Officer, NO.6, Haddaws Road, Opp. Sastri Bhavan, Nungampakka, Chennai 6. Thiru. Vijayaraghavan, NO.6, Haddaws Road, Opp. Sastri Bhavan, Numgampakkam,Chennai 36. Thiru. Srinivasan, Sr. Manager Project - Vodopone,MRC nagar, Chennai 28. Thiru. P.R. Sudhakar,General Mnager, Indirect Tax,Brakes India Ltd.,Padi, Chennai 50. Thiru. Manoharan,Proprietor,The Pleasant Stay Hotels of Chennai,Old No.34A, New No.81A, Chandra Manor,Perumal Koil Street, Saidapet, Chennai 15.

33

34

Thiru. Saravanan,TN Congress Human Rights Dept. No162, 8th Street, NSK Nagar , Arumpakkam, Chennai 106. Thiru. A.M. Selvam,117, 2nd Street,Tamil Nadu Housing Board Nagar,Velacheri, Chennai 42.

35

36 37 38 39 40 41 42 43 44 45

Thiru. S. Chandrasekaran,Secretary,Tamil Nadu Food Grains Merchants Association,No.8, Anderson Street, 1st Floor, Chennai 1. Mrs. Parvathy,Working Women's Forum,No.55, Bhimasena Garden Road, Mylapore, Chenai 4. Thiru. Rajagopal,170, AGS Colony,DEV Apartment,Velachery , Chennai 42. Thiru. V. Ravichandran,Founder Chairman, Citizens Guardians, New No.1 Old No.2, Bank of India Colony, Chennai 83. Thiru. A. Narayanasamy,S/o Arumugapillai, Malaipalayam 9th Ward Karunkuzhi 603 303. Thiru. Sonaware UD,Joint Director /Services, HQ's Chief Engineer, Chennai Zone (MES), Chennai 9. Thiru. Appasamy, President,TNEB's Engineer's Assocation, Chennai. Thiru. T. Bhaskar,S/o. M. Thambiah Naidu,Ernavoor, Chennai 57. Thiru. S. Periasamy,95/2, Poonamalli Road, Chennai 84. Thiru P. K. Gunasekar,No.4, PKG 1st Lane,Sowcarpet, Chennai 79. Thiru. V.G. Purusothaman,Tamizhaga Vivasayigal Sangam,Cheyyar, Dist.,Mobile : 9025804422.

Tiruvannamalai

46

253

Public Hearing at : Madurai,

Date : 08-04-2010

Venue : Tamil Nadu Chamber of Commerce, Platinum Jubilee Hatsun Auditorium, Kamarajar Salai, MADURAI - 625 006.

Sl No.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Name and Address of the Participants P.SUBASHCHANDRABOSE, Honorary SECRETARY,The Tamil Nadu Foodgrains Merchants Association Ltd, 348, East Masi Street, Madurai K.VELUSAMY, CONSUMERS ASSOCIATION, MELAKKOTTAI, THIRUMANGALAM TALUK Thiru. S. Selvaraj, Joint Secretary ,Tamil Nadu Consumer Protection Council, Madurai Dr. A. Krishnamoorthy, MBBS.,16/45, Mettu Street, Chinnapuliyampatti, Aruppukottai Thiru. Arumai Rajagopal, President,All District Ice Manufacturers Welfare Association,1, Thirumullai vasal Road, Sirkazhi, Ph : 9443370094 Thiru. M. Pandian, President,Madurai District Farmers Sangam,86/1, South Street, Thenkarai, Periyakulam, 625 601. Thiru. K. Muthaiah,SC No.SWC 191, Melamadai section and Pentioner,No.4/1055, Annai Abhirami Street, Anbu Nagar, Madurai 20. Tmt. B. Lalitha,Secretary,Consumer Rights Protection Council,Paramakudi. Tmt. M. Pandeeswari,General Secretary,Madurai District Public Welfare Association and Consumer Protection Committee,No.60, Yanaikkal Street, Madurai. Thiru. Bramhachari Partha,Bharat Sevashram Sangha,Kattupillayar Koil Street, Rameswaram 623 526. Thiru. N. Somasundaram,President,Madurai District Tiny & Small Scale Industries Association,1A-4A, Dr. Ambedkar Road, Madurai 625 020. Dr. K.S. Mayilvaganan, M.S., President,Indian Medical Association,No.1, Panagal Road, Madurai - 625 020. Dr. S. Babu, M.S.,Honorary Secretary,Indian Medical Association,No.1,Panagal Road, Madurai - 625 020. Dr. P. Vijayarathinam,Vice President,Indian Medical Association,No.1, Panagal Road, Madurai - 625 020. Dr. R. Ravindran,Joint Secretary,Indian Medical Association,No.1, Panagal Road, Madurai 625 020 Dr. R.R. Vijayakumar, MBBS., DLD.,Indian Medical Association,No.1, Panagal Road, Madurai - 625 020. Dr. V. Ravindranath, M.S., M.CH,Indian Medical Association,No.1, Panagal Road, Madurai 625 020.

16 17

254

18 19 20 21 22 23 24 25 26 27 28 29 30 31

Dr. A.S.A. Jeganaathan, District No.1, Panagal Road, Madurai - 625 020. Thiru. A.R. Siva,Hanuman Weaving Madurai.

Co-ordinator,Indian Mills,Kappalur

Medical

Association, Estate,

SIDCO

Industries

Thiru. V. Balakrishnan, President,Amutha Surabi Kalai Mandram,Madurai. Thiru. P. Chinnasamy,Secretary,Power Engineer's Society of TamilNadu, Madurai. Thiru. T. Ramasubramanian,Legal Head,Reliance Communication Ltd., No.6, Haddows Road, Nungambakkam, Chennai Thiru. Ghandiya M. Navabjan,Tamilaga Arasin Kottaiamir,445/378, Thirupathi Nagar, 2nd Cross Street,Solai Alagupuram 1st Street, Madurai 11. Thiru. K. Devarajan,Avran Ami Trust, No.9, Chairman Tulasiram 1st Street, East Veli Street, Madurai 1 Ph : 9443832105. Thiru. Ravichandran,Rajapalayam Thiru. M.K.R. Ramkumar,Braided Cord Manufacturers & MerchantsAssociation, No.2/3A, A.A. Road,Chairman Muthuramaiar Road, Madurai 625 009. Thiru. K.M. Ravindran,Darshini Associates,33/28, Sambanthamoorthy Street, Madurai. 1 Thiru. M. Kandaiya,Indian Express,Arivagam, 108/208, HMS Colony, Madurai 6. Thiru. T. Kannan,No.45, 3rd Chekkady Street,Kovilpatti - 628 501. Thiru. N. Jegadeesan,President,Tamil Nadu Chamber of Commerce,Kamarajar Salai, Madurai. Thiru. K. Venkatachalam,Chief Adivisor,Tamil Nadu Spinning Mills Association,Dindigul. Dr. S. Gnanasoundari, MBBS., DGO.,Indian Medical Centre,Perumalpuram, Kottaram, Kanyakumari 629 708. Dr. M. Chandramohan, M.D.,Retd., Professor of Medicine,Madurai Medical College,26/83, East 6th Street, K.K.Nagar, Madurai 20. Thiru. V.S. Boss,124, Karpaga Nagar 6th Street,K.Pudur, Madurai. Thiru. S. Krishnasamy, Managing Partner,Backiya Industries,75/2Bs, NH 7, Nagari, Madurai 625 221. Thiru. S.Srinivasan,Graham Travels Building,No.50, Police Station Road, Sivakasi 626 123. Thiru. V. Jeyapaul,Dan Public Relations,1/473, Thamirabharani 1st Street, Sri Nagar,Iyyar Banglow, Madurai 14. Thiru. M. Dharmaraj, Amaravathi Sri Venkatesa Palani Road, Swaminathapuram, Madathukulam 642 113. Paper Mills Ltd,

32

33 34 35 36

37

38

255

39 40 41 42 43 44 45 46

Thiru. O. Paramasivam, Joint Tallakulam, Tamukkam, Madurai.

Secretary,Consumer

Rights

Protection

Council,

Thiru. Ravindran, Vice President,Consumer Council Right Protection Committee,Tallakulam, Madurai. 2. Thiru. N.S. Premkumar,Sri Pandian Textile Mills, (SC No. 109), T. Pudupati, Thirumangalam, Madurai. Thiru. G. Rajagopal,Madurai Coffee and Tee Varthaga Sangam,124, North Masi Street, 1st Floor, Madurai. Thiru. C. Thenuraj, General Manager,Veppoladai Salt Corporation, 13A/1, Pillaiyar Koil Street, Meenakshipuram West, Tuticorin 628 002. Thiru. T.N. Gokulnath, President,Elders Forum for Social Awareness and Action,348-F, Muta Garden, Pasumalai , Madurai. 4. Thiru. G. Irulandi,Madurai District Eliyoor Nala Sangam,Keelachandai Pettai, Madurai 9. Thiru. K.K. N. Rajan,General Secretary,Joint Action Council for Citizens Improvement,Madurai. Thiru. M.R. Krishnakumar,Secretary,Betal nut & Beedi Cigrette Merchants Association,58-59, Manchanakkara Muthaiah Pillaiya Street,Madurai 625 001. B. Seenivasagam, Electrical Nagar,Rajapalayam-626117. Engineer,SriJayajothi & Company Ltd, 70, Alagai

47

48 49 50 51 52 53 54 55 56

Er. B. Velvendan, B.E.,Deputy General Manager (Elect), Rajapalyam Mills Ltd, PAC Ramasamy Rajasalai, Rajapalayam-626117 Thiru. Arima N.P. K. Malaichamy,District Advisor, Human Rights Protection Council,H.O.155/1,North Veli Street, Madurai-1. Thiru. M. Subramanian,Branch Secretary,(TNEB Engineer's Sangam)Madurai. Thiru. P. Rajendiran,Vice President,Madura Coats Pvt Ltd.,Madurai. Dr. P. Alagarsamy,IMA Secretary,Mullaiperiyar,Cumbam, IMA. Thiru. S. Devarajan,80/49, Athimoola Agraharam,Simakkal, Madurai. Thiru. B. Kumaresan,30, Government Colony,Byekara, Madurai 5. Thiru. Vijayaragavan,Secretary,Plastic Association Madurai.

Public Hearing at : Coimbatore,

Date : 13-04-2010

Venue : Nani Kalaiarangam, Mani Higher Secondry School, Pappanaikan Palayam, Coimbatore.

Sl No.
1 2

Name and Address of the Participants Thiru. K. Thangamuthu,Secretary,Tax payers Association,Pollachi Thiru. H. Mani,Nilgiri Potato and Vegetable Grower's Association,Ooty, Nilgiris.

256

3 4 5 6 7 8 9 10

Dr.N.I. Rameshwar,Nilgiri Mushroom Growers Association, Coimbatore 18. Thiru. P. Dhanraj,Amen Alloys Pvt Ltd,Sathy Road, Coimbatore 107. Thiru. S. Ravikumar,President,Coimbatore Tiruppur District Micro and Cottage Enterpreneurs Association, (COTMA),Ganapathy, Coimbatore Thiru. K. Ilango,President,(CODISSIA),Coimbatore District Small Industries Association,Coimbatore Thiru. D. Balasundaram,Tamil Nadu Electricity Consumer Association, Coimbatore 18. Thiru. T. Ramasubramanian,No.166, Race Course Road,Coimbatore. Thiru. K. Nagaraj,Sri Moogambigai Steam Laundry,Coimbatore 641 001. Thiru. R. Eswaramoorthy,District Secretary,Tamil Nadu Vivasayigal Sangam, Dharapuram, Thiruppur District. Thiru. M. Krishnasamy, Ex. M.C.,No.1, Rakkatchi Garden, Maniakarampalayam, Coimbatore 641 006. Dr. T.B. Ramakrishnan, Medical Superintendent,GKNM Hospital, Coimbatore. Dr. T. Sundararajan,GKNM Hospital, Coimbatore. Thiru.D. S. Hanumantharao,Former Member / TNERC, Thiru. T. Velayutham,President,Tamil Nadu Agriculturist Association,Coimbatore. Thiru. P. Narayanasamy,Agriculturist,Udumalpet. Thiru. Nallasamy,President,Agriculture Association, Erode. Thiru. Ramanathan,Agriculturist,Udumalpet. Thiru. L. Parthiban,South India Imported Machine Knitters Association (SIIMKA) Tiruppur. Thiru. S. Mukunthan,Sri Ayyanar Cold Storage,Madurai. Dr. K.V. Kirupavathy,Sri Durga Polyclinic,Coimbatore 641 045. Dr.A.K. Ravikumar,Mowthi Nursing Home Pvt. Ltd.,Vadavalli,Coimbatore. Thiru. Ramesh Belli,Nilgiri Potato and Vegetable Grower's Association, Geetha Lodge Building, Ooty, Nilgiris. Dr. R. Palaniswamy,President,(Indian Medical Association), Nurshing Home Board,NRP Hospitals,Sundarapuram, Coimbatore 24. Thiru. V. Devarajuh,No.658, Crosscut Road,Coimbatore. Thiru. B. Srihari,G.C. Member,Indian Chamber of Commerce and Industry, Coimbatore. Thiru. K. Kasthurirangaian,Chairman,Indian Wind Power Association. Thiru. Soundararajan,President,The South India Spinners Association, Flat No. 103-A Block, 1073 & 1074, Avinashi Road,Coimbatore - 641 018. Dr. Girishkumar,President,Indian Medical Association,Coimbatore. Thiru. N. Nithyanandan,C/o. Purani Textiles Pvt Ltd.,No.725, Avinashi Road, Coimbatore. Thiru. S. Loganathan,574, D.B. Road,R.S. Puram,Coimbatore 2. Thiru. A.V. Varadharajan,Tamil Nadu Electricity Consumers Association, 8/732, Avinashi Road, Coimbatore 18.

11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

257

33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62

Thiru. N. Viswanathan,Indian Institute of Foundarymen,Coimbatore 18. Dr. K. Selvaraju,Secretary General,The Southern India Mills Association,(SIMA),Race Course, Coimbatore. Dr. K. Srinivasan,Managing Director,Premier Mills Pvt. Ltd., Race Course , Coimbatore. Thiru. R. Chokkar, Ex. M.L.A.,Gokul Flats,Rayapettah, Chennai 14. Thiru. B. Haridas,Kalapatti Road,Coimbatore 14. Thiru. V. Tamil Selvan,Secretary,Coimbatore Consumer Action Club, 96/226, Tamilkudil Maco Street, Peelamedupudur, Coimbatore 4. Thiru. V. Venugopal,Tamilaga Vivasayigal Sangam,Coimbatore 22. Thiru. M. Senthilkumar,Secretary, Tamilaga Vivasayigal Sangam, Coimbatore. Thiru. Leothomas,St. Joseph's Home for the Aged,Podanur, Coimbatore 23. N. Gururao,Secretary,LIC Pensioners Association,Saroj Nilayam, Coimbatore 18. Thiru. K. Arumugam,President,Erode District Rice Mill Owners Association, Ammankovil, Sivagiri. Thiru. C.S. Krishnan,No.6, 4th Street (E), Periyar Nagar,Vadavalli, Coimbatore 641 041. Thiru. N. Chinnasamy,Convenor,Pensioner's Welfare Coimbatore. Dr. A. Kumanan,R.A. Hospital,1/2, Aryan Soap Colony,Olymbus, Coimbatore. Organisation,

Dr. J.G. Shanmuganathan,Chairman,Ganga Hospital,313, Mettupalayam Road, Coimbatore 641 043. Thiru. K. M. Nanjan,Nilgiri Potato and Vegetable Grower's Association,Geetha Lodge, Ooty, Nilgiri. Thiru. N. Logu,Coimbatore Consumer Voice,Opp. Medical College, Coimbatore 14. Dr. S. S. Sukumar,President,IMA,Erode 1. Thiru.M. Ramasamy,President, Tiruppur District Rice Mills Owners Association. Thiru. P. Nandakumar,President,Coimbatore Bar Association,Coimbatore. Thiru. N. Ranganathan,Advocate,Coimbatore Bar Association,Coimbatore. Thiru. B.A. Vadooth,VOICE,No.12, Dawood Rawther Street,Mettupalayam. Dr. S.V. Kandasami,Vedanayagam Hospital,R.S. Puram, Coimbatore. Thiru S. Sivaramakrishnan,Secretary,Consumer Awareness Movement, Coimbatore. Thiru. C.N. Povaneswaran,A.O.(Retd.), TNEB,Coimbatore 38. Thiru. M.Boopathy,S/o Muthusamy,Tiruchencode,Namakkal District. Thiru. K. Navaneethan,S/o Kulanthaisamy,Ganapathy, Coimbatore 6. Thiru. C. Palanisamy,President,Coimbatore District Powerloom owners Association, Somanoor. Thiru. Kuppurathinam,62/1, 9th Cross,Peelamedu, Coimbatore 4. Thiru. K.P. Rangasamy,6, 7th Street,Alangadu, Tiruppur 4.

258

63 64 65 66 67 68 69 70 71 72 73 74

Thiru. N. Ramasamy,Vice Chairman,IIF - Coimbatore Chapter. Thiru. C. Somasundaram,No.58, D.B. Road,RS puram, Coimbatore 2. Thiru. R. Govindarajan,General Secretary,Power Engineer's Society of Tamil Nadu. Thiru. V. Valliappan,Manager,Ennar Spinning Mills,Coimbatore. Dr. N.S. Kumaresan,KGM Hospital,Chinniampalayam,Coimbatore. Thiru. V. Gurumoorthy,Coimbatore. Thiru. K.M. Subramanian,Chief Engineer (Retd.,)Tamil Nadu Electricity Board. Thiru. O.P. Ponnusamy,President,Ganapathy Industries Traders Welfare Association (GITA),Coimbatore. B. Sai Vanathi,Kovai Medical College Hospital, College of Nurshing, Coimbatore. B. Girija,Kovai Medical College Hospital, College of Nurshing,Coimbatore. C. Mohanambal,Kovai Medical College Hospital, College of Nurshing, Coimbatore. Thiru. P. Kuzhanthaivel,Kovai Medical College Hospital, College of Nurshing,Coimbatore. Smitha Kannadasan,Kovai Medical College Hospital, College of Coimbatore. S. Padmapriya,Kovai Medical College Hospital, College of Coimbatore. M. Rema,Kovai Medical College Hospital, College of Nurshing,Coimbatore. R. Atchutha,Kovai Medical College Hospital, College of Nurshing,Coimbatore. Nurshing, Nurshing,

75 76 77 78 79 80 81

S. Amritha Singh,PPG College of Nurshing,Coimbatore. C. Vinothini,PPG College of Physiotheraphy, Coimbatore. Thiru. M.P. Thangavelu, Chairman,Ashwin Hospital,Ashwin PPG Cancer Hospital,Coimbatore Cancer Institute & Research Centre,Sathy Main Road, Coimbatore - 12. Thiru. Vellingiri, Vedanthira Maharishi Ashram, Aliyar.

82

Public Hearing at : Tiruchirapalli,

Date : 15-04-2010

Venue : Taj Kalyanamandapam, Karur Bypass Road, (Opp. to Kalainger Arivalayam, Tiruchirapalli.

Sl No.
1 2 3

Name and Address of the Participants Thiru. A. Jayaraman,No.33, Govindammal Nagar,Seelanayakkanpatti, Salem. Thiru. R. Nagarajan,Secretary,Min Kudiyiruppor Sangam,No.46, Min Nagar, Kajamalai, Tiruchirapalli -23. Thiru. Vaiyapuri Marimuthu,3/19, Bharathi Nagar,Tiruchirapalli 12.

259

4 5 6 7

Thiru. M. Vetrivel,5/D349A, 1st Cross,Anna nagar, Tiruchirapalli 17. Thiru. K. Chandrasekaran,Vettamangalam Post,Karur District. Thiru. R.P. Sathishkumar,S/o Ramasamy,Nadaiyanur Post,Karur District. Thiru. S. V. Angappan,General Secretary,TNEB Accounts and Executive Staff Union,29, Meeran Sahib Street, Anna Salai Chennai 2. Thiru. S. Balasubramanian,Secretary,Tamil Nadu Minsara Payaneettalar Sangam,2A, Ayodhya, Sai Brindavan,No.1, Ramakrishna Nagar, 2nd Main Road,Adambakkam, Chennai 88. Thiru.S. Dhanavelu,General Secretary,Federation of Consumer Organisation of Tamil Nadu and Puducherry, 5790, Santhananthapuram 4th Street, Pudukottai 622 001. Thiru. K.P. Rangasamy,Sanmathi Exports,65/C, Benny Main Road, Tiruppur. Thiru. Kannan @ N. Ramakrishnan,Social Worker,49A/22, 2nd Street, Summer House,Thennur, Tiruchirapalli 620 017. Thiru. P. Dharmaraj,21C, NNN Building, Palakkarai,Tiruchirapalli 8. Thiru. K. Ganesan,10/2, Burma Colony,Thiruverumbur,Tiruchirapalli 13. Thiru. K. Subramanian,Ex. District Secretary,Thiruchirapalli Puranagar Cooli Arisi Aalai,Pettavaithalai, Tiruchipallai District. Thiru. S. Srinivasan,S/o. R. Subramanian,39, P.V.S. Koil Street, Uraiyur, Tiruchirapalli 3. Thiru. V. Muthukaruppan,No.15, Ponni Nagar,Punganur, Tiruchirapalli 9. Thiru. N. Sridhar,47, Periyar Nagar,Tiruvanai Koil ,Tiruchirapalli 5. Thiru. R. Raja Chidambaram,State Secretary,Thamilaga Vivasaya Sangam, Nagamangalam Post, Perambalur District. Thiru. C. Rajarathinam,36/7 Pappakurichy, Kattur, Tiruchirapalli 19. Thiru. S. Kudbudhin,2/200, Nagamangalam,Tiruchirapalli 12. Thiru. M. Giriraja,4/39C, Ehigiri Mangalam,Tiruchirapalli 102. Tmt. M. Manimalai,Peruvalapur, Saminathapuram Colony,Lalgudi Taluk, Tiruchirapalli District. Tmt. G. Sumathi,Kolakudi, Kannagudi Post,Lalgudi Taluk, Tiruchirapalli District. Thiru. A.M. H. Mohammad Salim,Al Aman Hospital,Koothanallur, Tiruvarur District. Tmt. J. Nirmala,Pengal Viduthalai Munnani,No.4, Bharathidasan Nagar, 10th Cross, Thillai Nagar, Tiruchirapalli 18. Thiru. U. Indhumathi,NO.5, Bahrathidasan Nagar,Thillai Nagar, Tiruchirapalli 18. Tmt. R. Yogeshwari,85, Gandhipuram,Thillai nagar,Tiruchirapalli 18. Thiru. V. Neelakandan,District Youth Secretary,Thamilaga Vivasayigal Sangam,27, Pillaiyar Koil Street,A. Metur Post, Perambalur District. Thiru. D. S. Rangarajan,Sundaraj Nagar Kudiyiruppor Sangam, Tiruchirapalli. Thiru. Rajappa Rajkumar & Sivasubramanian,BHEL Small and Medium Industries Association,Tiruchirapalli

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

260

31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58

Tmt. R. Bhavani,No.10A, Muslim Street,Market, Tiruchirapalli 1. Thiru. M. Jeeva,Gandhipuram, Thillai nagar, Tiruchirapalli 18. Thiru. M. Ramadoss,Gandhipuram, Thillai nagar, Tiruchirapalli 18. Thiru. G. Ragunath,Thillai nagar, Tiruchirapalli 18. Tmt. S. Kala,Alwarthope,Tennur, Tiruchirapalli 17. Thiru. J. Krishnaswamy,Assistant Accounts Officer, General Construction Circle,TNEB, Tiruchirapalli. Thiru. N. Ramajeyam,Accounts Officer,General Construction Circle,TNEB, Tiruchirapalli. Thiru. P. Malaiyandi,State Assistant President, Thozhilalar Munnetra Sangam,TNEB, Tiruchirapalli 20. Thiru. C.R. Rajasekaran,S/o C. Ramaiyan, North Car Street,Srimushnam. Thiru. S. Mohammed Ibrahim,State Committee Member,Citizen's for Human Rights Movement,149, EB Road, Tiruchirapalli 2. Thiru. S. Raja,23/3, Palakkarai ,Tiruchirapalli 1. Thiru. G. Raja,18, A.R. Building,Melapudur,Tiruchirapalli 1. Thiru. N. Ganesan,District Secretary,Tamilaga Vivasayigal Sangam,Jadamangalam, Musiri Taluk, Tiruchirapalli Dist. Thiru. R. Subramaniam,Deputy Secretary, Kaveri Delta Vivasaya Nala Sangam,Tiruchirapalli. Thiru. A. Leo Joseph,4/168, North kattur,Vasantha Nagar,Kattur. Dr. A. Zameer Basha,Chairman,Tamil Nadu Nurshing Home Board, Indian Medical Association, Tiruchirapalli. Dr. R. Gunasekaran,State President,Indian Medical Association (Tamil Nadu ) Thiru. S. Palanikumar,Manager,CSI. Mission Hospital,Woraiyur, Tiruchirapalli 3. Thiru. M. Sekaran,Tamil Nadu Federation and Seva Sangangalin Koottamaipu. Thiru. Agri. M. Balaiyan,President,Tamil Nadu Fish Farmer's Welfare Association,Mannargudi. Thiru. Kottur R. Rajasekaran,Manila DMK Vivasaya Ani, Joint Secretary,Mannargudi. Thiru. Poora Visuvanathan,State President, Tamil nadu Eari and Atrupasana Vivasayigal Sangam,Tiruchirapalli. Thiru. P.K.C.C. Ganesan,Honarary President, Tamil Nadu Fish Grower Welfare Association,Sembanar Koil 609 309. Thiru. Purushothaman,State Correspondent,Tamilaga Vivasayigal Sangam, Salem. Thiru. O.R. Shriraman, M.C.,95/41B, Big Sowrashtra Street,Tiruchirapalli 620 008. Thiru. K. Mahalingam,Uzhavar Ayvu Mandra Organisar, Peruvalanallur , Lalgudi Taluk. Thiru. B.R.S. Gouthaman,Youth Hospital,M.C. Road,Thanjavur 613 007. Thiru. K. Suresh,CPI - Secretary,1A, Periyamilagu parai,Tiruchirapalli 1.

261

59 60 61 62 63 64 65 66 67 68 69 70 71

Thiru. U. Sankar,Divisional Electrical Engineer,Southern Railway , Tiruchirapalli. Thiru. S. Jayakrishnan,Senior DEE / TRO,Southern Railway,Tiruchirapalli. Thiru. J. Selvaraj,President,Tiruchirapalli District Consumer Movement, 18, Mettu Street, Beema Nagar, Tiruchirapalli 1 Thiru. C. Palaniyappan,D/18, Jeeva Nagar, Thennur High Road, Tiruchirapalli 620 008. Thiru. Anbuselvan,News Reporter,21C, NNN Building , Kajamohideen Street, Palakkarai, Tiruchirapalli 8. Thiru. S. Pushpavanam,Secretary,Consumer No. 2, RMS Building, Tiruchirapalli 18. Protection Council Tamilnadu,

Thiru. R. Kothandaraman,PA to DIG of Police,(Retd),41/1A, SRS Building, Tiruchirapalli. Thiru. P.R. Lakshminarayanan,Deputy Secretary,Worldwide Human Rights and Consumer,51/23, W.C. Street, Srirangam. Thiru. S. Gopal,MY Way Computer Centre,NO.5, Salai Road, Woraiyur, Tiruchirapalli. Thiru. K. Poosaimani,KKR Complex, 3rd Floor, Chatram Bus Stand, Tiruchirapalli. Thiru. V.G. Purushothaman,Tamilaga Vivasayigal Sangam, PRO - Tiruvannamalai.(Dr. Sivasami Ani) Thiru. Sivasooriyan,District Secretary,Tamilnadu Vivasayigal Sangam, Periyamilagu Parai, Tiruchrapalli. Thiru. D. Bhaskaran, Ruby Chlorates Pvt Ltd., No.11B, Saminatha Sastri Road,Tennur, Tiruchirapalli 17.

262

Annexure IV
ANNEXURE IV - List of Letters received from TNEB

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

Date

Letter No

08-02-2010 08-02-2010 23-02-2010 24-02-2010 25-02-2010 12-03-2010 18-03-2010 24-03-2010 05-04-2010 07-04-2010 07-04-2010 12-04-2010 18-04-2010 20-04-2010 22-04-2010 23-04-2010 23-04-2010 04-05-2010 04-06-2010 04-06-2010 22-07-2010

CFC/Rev/Dir/Tf Cell/EE/F.Agriculture /D.No 29/2010 CFC/Rev/Tf Cell/AEE/F.Tariff Petition/D.31/2010 CFC/Rev/Tf Cell/AEE/F.Tariff Petition/D.53/2010 CFC/Rev/Tf Cell/AEE/F.Tariff Petition/D.58/2010 CFC/Rev/Tf.Cell/AEE/F.Tariff Petition/D.59/2010 CFC/Rev/Tf.Cell/AAO/F.Tariff Petition/D.64-1/2010 CFC/Rev/Dir/Tf Cell/EE/F.Tariff Petition/D.No 97/09 CFC/Rev/Tf Cell/AEE/F.Tariff Petition/D.No 111/2010 CFC/Rec/Tf Cell/AEE/F. Tariff Petition/D.No 58-1/2010 CFC/Rev/Tf Cell/AEE/F.Tariff Petition/D.No 282/2010 CFC/Rev/Tf Cell/AEE/F.Tariff Petition/D.No 284/2010 CFC/Rev/Tf Cell/EE/AEE/F.ITES/D.No 295/2010 CFC/Rev/Tf Cell/AAO/F.Tariff Petition/D.No 327/2010 CFC/Rev/Tf Cell/AEE/F.Tariff Petition/D.No 330/2010 UO No CE/NCES/EE/WPP/AEE2/F.Tariff Petition/D.1815/10 CFC/Rev/Tf Cell/AEE/F.Tariff Petition/D.No 339/2010 U.O. No.SE/GTS/EM/A4/F-VGTPD(Phase II)/D 382/10 CFC/Rev/Tf Cell/AEE/F.Tariff Petition/D.No 365/2010 CFC/Rev/Tf.Cell/AAO/F.Tariff Petition/D.438/2010 CFC/Rev/Tf.Cell/AAO/F.Tariff Petition/D.439/2010 CFC/Rev/Dir/Tf.Cell/EE/F.T.P/D.489/10

263

Annexure-V

TAMIL NADU ELECTRICITY REGULATORY COMMISSION (Constituted under section 82 (1) of Electricity Act 2003) (Central Act 36 of 2003)

Corrigendum to Order No.3 of 2010 dated 31-07-2010

The following errata are issued to the Tariff Order dated 31-07-2010:Sl. No 1 Second sentence in The para 1.6.3 (Page 6) gas based stations The gas based stations Para / line / Table Existing To be read as

(except Basin Bridge) were (except Basin Bridge) were performing at a of PLF more performing at a PLF of more than 70% during 2007-08 and than 70% during 2007-08 and 2008-09. 2008-09. HT II A Tariff for HT II A Educational

2.11 (Page 19)

Tariff

for

Educational Institutions and Institutions and Hospitals Recognized Hospitals 3 2.17 (Page 22) Tariff for LT Educational Tariff for LT Educational

Institutions, Hospitals, etc 4 3.2.2 (Page 65)

Recognized Institutions, Hospitals, etc

HT - Recognized Educational HT - Educational Institutions Institutions etc. etc. for HT Sales Projections for HT

Table 7 (Page 65)

Sales

Projections

Recognized institutions 6 3.2.11 (Page 74)

educational educational institutions

LT - Recognized Educational LT - Educational Institutions Institutions etc. etc

Table 20 (Page 74)

Projection of sales by TNEB Projection of sales by TNEB for LT recognized educational for LT educational institutions institutions

Table 21 (Page 75)

Sales trend for LT recognized Sales trend for LT educational

educational institutions 9 Table 22 (Page 75)

institutions

Projection of sales by TNERC Projection of sales by TNERC for LT recognized educational for LT educational institutions institutions

10

3.2.16.8 (ii) (Page The number of consumers as The number of consumers as 81) on 31-03-2009 is taken as on 31-03-2009 is taken as 1884750.. 1889204 based on subsidy reconciliation report of TNEB

11

Table 40 (Page 84)

Sales projections by TNERC Sales projections by TNERC for LT commercial for LT commercial (in MU) equity ratio

12

Words in 9th line in equity ration para 96) 4.1.7 (Page

13

Last para 97)

sentence 4.1.7

in The

adjustmeny

could

be The

adjustment

could

be

(Page positive or negative and this positive or negative and this adjustment will be carried out adjustment will be carried out in the true up petition for in the true up petition for 20102010-11 along with carring 11 along with carrying cost. cost.

14

First 130)

sentence

in The estimated per MW capital The estimated per MW capital very high. is very high.

para 6.2.2.10 (Page of hydro generating plant is cost of hydro generating plant

15

First 138)

sentence

in The TNEB has not furnished The TNEB has not furnished details for computing the details for computing construction, Interest during construction, Interest in project consecration during

para 6.3.19 (Page the

revenue expenditure incurred revenue expenditure incurred in project construction.

16

7.3 (Page 159)

In

respect

of

power In

respect in

of the

power station

generated in the station generated

owned by the distribution owned by the distribution licensee and distributed by licensee and distributed by the licensee itself in his the licensee himself in his area of supply, the area of supply, the

generation

tariff

of

the generation

tariff

of

the

station shall be considered station shall be considered as the transfer price to the as the transfer price to the distribution licensee which distribution licensee which will be determined in the will be determined in the licensees itself.
17 164)

tariff

petition licensees itself.

tariff

petition

Para 7.10.1 (Page The TNEB procures coal from The TNEB procures coal from the following sources through the following sources through multi model transport (rail, multi model transport (rail, seasea-rail) under coal shipping rail) agreement plants for the under coal supply power agreement for the power plants

18

First row in Table HFO (Rs / kg) HSD/LDO (Rs / kg) 136 in para 7.14.7 (1) (Page 172)

HFO (Rs / kl) HSD/LDO (Rs / kl)

19

7.14.8..2 173)

(Page Regulation 7 (7) (i) of the Regulation 6 (7) (i) of the TNERC Tariff Regulations TNERC Tariff Regulations specify the following specify the following Energy Rate (Rs / unit)

20

Last row in tables Energy Rate (in paise / unit) 158, 159 160 and 161 in para 7.15.4.1 (Page 185 and 186)

21

8.1 (Page 191)

Determination Transmission Charges

Annual Determination

of

Annual

Transmission Charges

22

9.4.1.1 (Page 198)

Power purchase cost for the Power purchase cost for the control period control period (Rs in Crores)

23

9.4.9 (Page 201)

The comprehensive Revenue The comprehensive Revenue Requirement claimed TNEB is Requirement claimed by TNEB compared with the revenue is compared with the revenue requirement admitted by the requirement admitted by the Commission for distribution Commission licensee. licensee. for distribution

24

9.11.19 under the column minimum Monthly (in

40 / kw

40/ kw or part thereof of the contracted load

Rupees) (Page 226) 25 Fourth line in pump sets of Government coil pump sets of Government oil seed farms

condition (1) under seed farms para 9.11.20 LOW TENSION TARIFF IV (Page 228) 26

Second sentence in Noncompliance shall invite Noncompliance

shall

invite

para 9.11.21 (3) compensation charges as per compensation charges as per (Page 229) TNEBs terms and conditions TNERCs Regulations

27

Revenue

gap 7905.04

7905.40

arrived by TNERC for the year 2010 11 in table para 184 9.14 under

(Page 232) 28 9.15.3 (1) (Page The case of Orissa relates to The case of Orissa relates to 234) treatment the difference in treatment of the difference in revenue due to different basis revenue due to different basis of calculation of T & D losses of calculation of T & D losses adopted by the GRIDCO adopted by the GRIDCO (41%) and the OERC (35%). (41%) and the OERC (35%). 29 The first

three The Commission has arrived The Commission has arrived at crores, Rs.7905.40 crores, Rs.6062.24 crores and crores and Rs.3489.18 crores crores respectively and this gap is

sentences in sub- at the gap for these years as the gap for these years as para (9) of para Rs.7905.04 9.15.3 (Page 235) Rs.6062.24 Rs.3489.18

respectively and this gap is after allowing a tariff increase after allowing a tariff increase of Rs.1650.46 crores. It is to of Rs.1650.46 crores. It is to be noted here that the last tariff

be noted here that the last hike in Tamil Nadu was in tariff hike in Tamil Nadu was March 2003 and the TNEB has in June 2003 and the TNEB not preferred any tariff revision has not preferred any tariff thereafter, revision eventhough their eventhough their thereafter, operating costs have been operating going up.

costs have been going up.

30. The existing tariff schedule under para 9.11.21 (Page 229) shall be read as below: Existing: 9.11.21 LOW TENSION TARIFF V: Tariff Consumption slabs Energy Fixed charges (Rupees / Month) Monthly minimum (in Rupees)

Range in kWh(units) and charges in billing period (one or paise / kWHr two months) Low Tension Tariff V From 0 to 50 units per month ( or) 0 to 100 units for two months From 51 to 100 units per month ( or) 101 to 200 units for two months From 101 and above per month ( or) 201 and above for two months 650 530 430

30

30

40

30

To be read as: 9.11.21 Tariff LOW TENSION TARIFF V: Consumption slabs Energy Fixed charges (Rupees / Month) 30 40 Monthly minimum (in Rupees)

Range in kWh(units) and charges in billing period (one or two paise / months) Low Tension Tariff V 0 to 50 units per month ( or) 0 to 100 units for two months (as per para 9.10.10 of the order) From 0 to 100 units per month ( or) 0 to 200 units for two months From 101 and above per month ( or) 201 and above for two months 650 530 kWHr 430

30

40 30

-Sd(K.VENUGOPAL) MEMBER

-Sd(S.KABILAN) CHAIRMAN