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Chapter 5

Data Analysis

The analysis chapter is divided into three parts. In first part, the technical and

financial records of HPUs are analyzed on various dimensions. In second part, the

consumer’ attitude is measured and red areas requiring to be improved; are

identified. In third part, the ideas, comments, suggestions, and initiatives are

analyzed to find out effective initiatives for improving the efficiency in electricity

supply and transmission management.

Part I: Performance of HPUs

The Ministry of Power (MoP) formulates, processes, monitors and implements

the electricity projects of HPUs and administers their activities. The efficiency, in

technical terms, depends upon the fuel consumption and Plant Load Factor (PLF)

of HPGCL power plants; while in financial terms, the efficiency depends upon

minimizing the expenditures by keeping revenues grow.

1. Haryana Power Generation Corporation Limited (HPGCL)

The utility is primarily responsible for generating sufficient electricity and

maintenance of power generation plants. The technical performance of HPGCL

can be analyzed on various dimensions like Generated Units, Plant Load Factor

(PLF), Auxiliary Consumption Rate (ACR), Coal Consumption Rate (CCR), Oil

Consumption Rate (OCR), and Station Heat Rate (SHR). The performance of

power plants depends upon various factors such as Technology and Equipment,

Ambient conditions, Fuel quality, and Plant operation and maintenance practices48.

The Panipat Thermal Power Station has 8 units and first four units are known as

PTPS-1 and remaining four are known as PTPS-2 units. Plant Load Factor (PLF) is

48 This information is retrieved from http://www.cercind.gov.in/October08/Report-CERC-norms-CEA-Final-04-11-08.pdf on 30th May 2011.

http://www.cercind.gov.in/October08/Report-CERC-norms-CEA-Final-04-11-08.pdfhttp://www.cercind.gov.in/October08/Report-CERC-norms-CEA-Final-04-11-08.pdf

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a technical parameter which states the proportion of total plant capacity that is

actually utilized to generate electricity. In other words, it shows the actual output

of a power plant compared to the maximum output it could produce49. The

auxiliary consumption is the energy consumed by power stations for running their

equipment and common services. It comprises power consumed by the unit

auxiliaries including common station requirement such as station lighting, air

conditioning etc50. The primary purpose of an auxiliary unit is to provide power to

start the main engine51. The Auxiliary Consumption Rate (ACR) is the rate of fuel

consumed over generated units. Similarly, the Coal Consumption Rate and Oil

Consumption Rates are the rates of coal and oil consumed over generated units of

electricity. The Station Heat Rate (SHR) is related to the efficiency of installed

boilers which states the content of fuel burned on generated electricity and it is

computed by dividing the “content of fuel burned” with “Generated units of

electricity”. The linear trend values are computed to measure the technical

performance of HPGCL power plants.

a. Technical Performance of HPGCL Units:

Table 4.1 shows that the generation of PTPS-1 Units has remained within the

range of 2093 to 2681 MU52. The generation of PTPS-1 units has been showing

downward trend and depicts the projected generation of the units for 2013-14 i.e.

2093.53 MU. The generation has shown sudden increase i.e. from 2231.4 to 2681.4

FY 2009-10 due to renovation and modernization (R&M) activities. It seems that

49 This information is retrieved from http://en.wikipedia.org/wiki/Load_control#Plant_load_factoron 8th June, 2011.50 This information is retrieved fromhttp://www.cea.nic.in/reports/yearly/thermal_perfm_review_rep/9900/Sec11%20fin_lo.pdf on 6th

June 2011.51 This information is retrieved from http://en.wikipedia.org/wiki/Auxiliary_power_unit on 30thMay 201152 The abbreviation of MU is Million Units and here MU stands for a unit of energy generated fromthe power plants.

http://en.wikipedia.org/wiki/Load_controlhttp://www.cea.nic.in/reports/yearly/thermal_perfm_review_rep/9900/Sec11 fin_lo.pdfhttp://en.wikipedia.org/wiki/Auxiliary_power_unit

59

these units are based on obsolete technology and require timely Renovation and

Modernization (R&M) to generate maximum units of electricity53.

Table 4.1: Generated Units of PTPS54-1 Units

YearGeneration

(MU)TrendValues

2007 2566.6 2486.022008 2296.3 2429.952009 2231.4 2373.882010 2681.4 2317.812011 2093.7 2261.742012 2205.672013 2149.62014 2093.53

Source: HPGCL petition for Approval of Tariff for the year FY 2012-13 retrieved fromwww.hpgcl.gov.in

Table 4.2 : Comparison of Generated Units of PTPS-1 Units with Specified

Norms

(Figures in MUs)

Financial

Year

Target as per

CEA55 norm

Target as per

HERC norm

Actual

Generated Units

Excess / (-)

Shortfall as

compared to

HERC norm

2005-06 2504 2505 2227 -278

2006-07 2310 2120 2567 447

2007-08 2515 2706 2296 -410

2008-09 2832 2968 2232 -736

2009-10 2830 3138 2681 -457

Total 12991 13437 12003 -1434

Source: Chapter II of Haryana state Audit Report56

Table 4.2 shows the comparison of actual generated units with the specified

53 The data is retrieved from http://www.hpgcl.gov.in/powerplants_3.hp on 8th June 2011.54 The abbreviation of PTPS is Panipat Thermal Power Station.55 The abbreviation of CEA is Central Electricity Authority56 The information is retrieved fromhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf on 8th June,2011.

http://www.hpgcl.gov.in/powerplants_3.hp

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norms of HERC and CEA. It is found that the PTPS-1 units have not achieved the

targets as per specified norms of HERC and CEA57 during 2007-08 to 2010-11. It

depicts that the resources and capacity of PTPS-1 units are not being utilised to the

optimum levels. It is required to focus upon the causes behind the forced

breakdowns and take initiatives to reduce the causes. It is stated in an audit report58

that the inefficiencies in PTPS-1 units are due to frequent breakdowns, excess time

taken in renovation and modernisation (R&M) of Unit I, and delay in rectification

of defects.

Table 4.3: Plant Load Factor of PTPS-1 Units

Year PLF (%) Trend Values

2007 66.59 64.63

2008 59.41 62.88

2009 57.89 61.13

2010 68.38 59.38

2011 53.37 57.63

2012 55.88

2013 54.13

2014 52.38


Table 4.3 shows that the Plant Load Factors of PTPS-1 units have remained

within the range of 53.37% to 68.38% during 2006-07 to 2010-11. However, the

PLF has shown sudden increase in 2009-10 which is the result of renovation and

modernization (R&M) of units. the PLF has been showing downward trend and

depicts the projected PLF of PTPS-1 units for FY 2013-14 i.e. 52.38%. The PLF

should be higher so that the fixed costs can be spread over more kWh of output

showing efficiency in term of more output at lower cost per unit. As the units are

57 The abbreviation of CEA is Central Electricity Authority58 This information is retrieved from pg. 19 ofhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf ; accessed on30th May 2011.

http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf

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old and based on obsolete technology, the HERC approved 75% PLF for these

units59. The PLF of the units have remained lower than the specified norms.

Therefore, it is required to take strict steps to improve the PLF of these units.

Table 4.4 shows that the auxiliary consumption rates (ACR) of PTPS-1 units

have shown that the ACR ranges from 11.4% to 12.13% during 2006-07 to 2010-

11; while the HERC specified norm for ACR of these units is 11%60. The ACR has

shown sudden increase i.e. 11.59% to 12.13% during 2007-08 due to excessive

forced shutdowns of the units. The ACR has been showing upward trend and

depicts the projected ACR of PTPS-1 units for FY 2013-14 i.e. 11.77. The

auxiliaries’ consumption rate is very high and it is required to control the ACR up

to the HERC specified norm. In an order61, the HERC has ordered the utility to

make all possible efforts to bring down the ACR.

Table 4.4: Auxiliary Consumption Rates of PTPS-1 Units

YearAux. Cons.Rates (%)

TrendValues

2007 11.59 11.7

2008 12.13 11.71

2009 11.48 11.72

2010 11.4 11.73

2011 12 11.74

2012 11.75

2013 11.76

2014 11.77


It is reported in the HERC orders that the major cause of higher ACR is

excessive forced shutdowns of the units as auxiliaries continue to run and consume

59 This information is retrieved from pg. 33 of http://herc.gov.in/orders/pdf/2011/20110503a.pdf on30th May, 2011.60 The approved auxiliary consumption rates are given athttp://herc.gov.in/orders/pdf/2011/20110503a.pdf retrieved on 13th May 2011.61 This information is taken from Pg. 12 of an order retrieved fromhttp://herc.gov.in/orders/pdf/2011/20110503a.pdf.

http://herc.gov.in/orders/pdf/2011/20110503a.pdfhttp://herc.gov.in/orders/pdf/2011/20110503a.pdfhttp://herc.gov.in/orders/pdf/2011/20110503a.pdf

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power even after shutting down of the units62. Therefore, steps are required to

control the forced shutdown activities to improve the efficiencies.

Table 4.5: Coal Consumption Rates of PTPS-1 Units

Year

Coal Cons.Rates (gm/kwh)

TrendValues

2006 843 849.8

2007 842 852.2

2008 876 854.6

2009 872 857

2010 840 859.4

2011 861.8

2012 864.2

2013 866.6

Source: Generation statistics given on HPGCL’s website i.e.http://hpgcl.gov.in/personal_18.hp

Table 4.5 shows the coal consumption rates (CCR) of PTPS-1 units which have

remained within the range of 840 grams to 876 grams per kWh during 2005-06 to

2009-10. It is found that the coal consumption rates have remained higher in 2007-

08 and 2008-09 i.e. 876 and 872 grams per kWh respectively due to inferior

quality of coal and negligence in periodic maintenance of equipments consuming

more coal. The CCR has shown sudden increase i.e. from 842 to 876 grams per

kWh during 2007-08 due to delay in the maintenance of equipments consuming

more coal. The result shows that the CCR has been showing upward trend and

depicts the projected CCR of PTPS-1 units for FY 2013-14 i.e. 866.6 grams per

kWh. It is required to control the coal consumption by ensuring availability of high

caloric coal and timely repair and maintenance of equipments. It is reported in the

audit report that the coal consumption rate depends upon the caloric value of coal

means the rate can be reduced by using high quality coal and the utility has no

62 This information is taken from Pg. 12 of an order retrieved fromhttp://herc.gov.in/orders/pdf/2011/20110503a.pdf.

http://hpgcl.gov.in/personal_18.hphttp://herc.gov.in/orders/pdf/2011/20110503a.pdf

63

control over quality of coal63.

Table 4.6 shows the oil consumption rates (OCR) of PTPS-1 units which have

remained within the range of 2.92 ml to 5.8 ml per kWh during 2006-07 to 2010-

11; while the HERC specified norm is 2 ml per kWh64. The OCR has shown

sudden increase i.e. from 2.44 to 5.8 ml per kWh during 2010-11. The oil

consumption rates have been showing upward trend and depicts the projected OCR

of PTPS-1 units for FY 2013-14 i.e. 6.13 ml per kWh.

Table 4.6: Oil Consumption Rates of PTPS-1 Units

Year

Oil Cons.Rates(ml/ kwh)

TrendValues

2007 2.92 2.42

2008 2.93 2.95

2009 3.33 3.48

2010 2.44 4.01

2011 5.8 4.54

2012 5.07

2013 5.6

2014 6.13


The reasons for higher coal and oil consumption rates of PTPS-1 units are

reported in an audit report65 that the PTPS-1 units are quite old and also based on

obsolete technology and due to non adherence to periodic maintenance of

equipments; the units are consuming more coal and oil. Therefore, it is required to

ensure periodic maintenance of equipments for long term sustainable levels of

63 This information is accessed from pg. 19 ofhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf ; accessed on30th May 2011.64 The approved specific oil consumption rates for different HPGCL plants are given at pg. 13 ofHERC orders retrieved at http://herc.gov.in/orders/pdf/2011/20110503a.pdf on 13th May 201165 The information is taken from the audit report which is retrieved formhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf.

http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://herc.gov.in/orders/pdf/2011/20110503a.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf

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performance66. In audit report67, it is explained that the continuous deterioration in

PTPS-1 units is due to delay in annual maintenance activities which are normally

delayed from 107 to 328 days. It is required to be strict in timely maintenance of

the units i.e. carrying out R&M activities within 91 to 253 days; only then the

technical performance of these units can be improved.

Table 4.7: Station Heat Rates of PTPS-1 Units

Year

Station HeatRates (Kcal/kwh)

TrendValues

2007 3341 3407.8

2008 3470 3384.9

2009 3425 3362

2010 3225 3339.1

2011 3349 3316.2

2012 3293.3

2013 3270.4

2014 3247.5


Table 4.7 shows that the station heat rates of PTPS-1 units have remained

within the range of 3470 to 3225 Kcal per kWh during 2006-07 to 2010-11. The

SHR has shown sudden fall i.e. from 3425 to 3225 Kcal per kWh during 2009-10

which is a positive sign of improvement. The HERC specified norm for SHR of

PTPS-1 units is 3100 Kcal per kWh68. The SHR has been showing downward trend

and depicts the projected SHR of PTPS-1 units for FY 2013-14 i.e. 3247.5 Kcal

per kWh. The station heat rates have remained higher than the specified norms. It

66 The information is given at pg. no. 25 of Report can be accessed athttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf.67 The information is given at pg. no. 25 of Report can be accessed athttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf.68 The approved specific norms for different HPGCL plants are given at pg. 13 of HERC ordersretrieved at http://herc.gov.in/orders/pdf/2011/20110503a.pdf on 13th May 2011

http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://herc.gov.in/orders/pdf/2011/20110503a.pdf

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is required to control it and make it close to the design rate as possible69. As

reported in the energy audit report of these units70, there is need to bring down the

station heat rate to 2750 Kcal per kWh; that needs the attention of top management

of HPGCL to take necessary and relevant steps immediately.

Overall, The PTPS-1 units are required to be operated efficiently so that the

technical performance of these units can be improved. In a report71, it is

recommended to cross check various factors for improving technical efficiencies of

power plants, like: a) Technology and Equipment, b) Ambient conditions, c) Fuel

quality, and d) Plant operation and maintenance (O&M) practices. The technical

performance of PTPS-1 units can be improved by focusing upon these factors. In

recommendations on operation norms of HPGCL thermal station, it is given that

there are few factors which affect the technical performance of these units and are

beyond the control of HPGCL; like coal quality, grid frequency, cooling water

temperature, and unit loading or dispatch instructions, but the overall impact of

these uncontrollable factors is only about 0.12%72. Thus it is clear that the

technical efficiencies should be improved to generate more electricity from PTPS-

1 units.

Table 4.8 shows that the generation of PTPS-2 units has remained within the

range of 7564.94 to 7179.6 MU73. The generation has shown sudden fall i.e. from

7525.43 to 7179.6 MU during 2010-11. It is found that the generation has been

69 This information is taken from Pg. 37 of HERC order which is retrieved fromhttp://herc.gov.in/orders/pdf/2011/20110503a.pdf on 30th May, 2011.70 This is recommended in energy audit reports of these units and this information is taken from Pg.37 of HERC order which is retrieved from http://herc.gov.in/orders/pdf/2011/20110503a.pdf on 30th

May, 2011.71 Pg. 13 of “Recommendations on Operation Norms for Thermal Power Stations for Tariff Periodbeginning 1st April, 2009”72 Pg. 26 of Recommendations on Operation Norms for Thermal Power Stations for Tariff Periodbeginning 1st April, 200973 The abbreviation of MU is Million Units and here MU stands for a unit of energy generated fromthe power plants.

http://herc.gov.in/orders/pdf/2011/20110503a.pdfhttp://herc.gov.in/orders/pdf/2011/20110503a.pdf

66

showing downward trend and depicts the projected generation of PTPS-2 units for

2013-14 i.e. 7212.04 MU. It is observed by the researcher that the increase in

generation in 2007-08 and 2009-10 is the result of renovation and modernization

(R&M) activities. It is required to undertake timely renovation and modernization

(R&M) activities so that generation of these units can be improved.

Table 4.8 : Generated Units of PTPS-2 Units

YearGeneration (MU)

TrendValues

2007 7341.51 7466.35

2008 7564.94 7430.02

2009 7356.98 7393.69

2010 7525.43 7357.36

2011 7179.6 7321.03

2012 7284.7

2013 7248.37

2014 7212.04


Table 4.9 : Comparison of Generated Units of PTPS-2 with Specified Norms

(Figures in MUs)

Year Target as per

CEA74 norm

Target as per

HERC norm

Actual

Generated Units

Excess / (-) Shortfall as

compared to HERC

norm

2005-06 6448 6414 5909 -505

2006-07 6780 6447 7342 895

2007-08 7091 6465 7565 1100

2008-09 7015 6447 7357 910

2009-10 6819 6447 7525 1078

Total 34153 32220 35698 3478

Source: Chapter II of Haryana state Audit Report75

74 The abbreviation of CEA is Central Electricity Authority75 This audit report is retrieved fromhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/rece

http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf

67

Table 4.9 shows the comparison of generation of PTPS-2 units with the

specified norms of HERC and CEA. It is clear from the table that the units have

met the targets specified as per HERC and CEA norms during 2006-07 to 2009-10

except 2005-06. It is reported in the audit report76 that the technical efficiencies

can be improved by ensuring supply of high caloric coal and minimum forced

outages.

Table 4.10: Plant Load Factor of PTPS-2 Units

Year PLF (%)TrendValues

2007 91.09 92.532008 93.61 92.112009 91.29 91.692010 93.38 91.272011 89.09 90.852012 90.432013 90.012014 89.59


Table 4.10 shows the values of Plant Load Factor of PTPS-2 units which have

remained within the range of 89.09% to 93.61% during 2006-07 to 2010-11. The

PLF has shown sudden fall i.e. from 93.38% to 89.09% during 2010-11. The

HERC specified norm for PLF of PTPS-2 units is 80%77. It is found that the PLF

has been showing downward trend and depicts the projected PLF of PTPS-2 units

for FY 2013-14 i.e. 89.59%. The PLF has remained more than the specified norms;

it shows that the units have utilized their plant capacity effectively. However the

downward trend in projected values of PLF is a negative sign. Therefore, it is

nt_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf on 20th June,2012.76 This information is taken from Pg. 20 of an audit report which is retrieved fromhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf77 The approved specific norms for different HPGCL plants are given at pg. 13 of HERC ordersretrieved at http://herc.gov.in/orders/pdf/2011/20110503a.pdf on 13th May 2011

http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://herc.gov.in/orders/pdf/2011/20110503a.pdf

68

required to take steps for improving the performance of these units. Further, the

audit report states that one unit i.e. unit VII of PTPS (which is included in PTPS-2)

has performed very well and achieved PLF of 98.91 and 98.40% during 2007-08

and 2009-10 respectively78. It is also stated in the audit report that the units are

performing well due to plant availability of the units79.

Table 4.11 shows the plant availability of PTPS-2 units and depicts that there is

less variation between planned and forced outages during 2007-08 and 2009-10.

The plant availability has remained highest during these years i.e. 91.79% and

91.73% respectively. It is observed that the higher plant availability is the result of

timely repair and maintenance (R&M) of these units. It also depicts that the

technical efficiencies of PTPS-2 units can be further improved by undertaking

R&M activities properly.

Table 4.11: Plant Availability of PTPS-2 Units

Particulars 2005-06 2006-07 2007-08 2008-09 2009-10

Total Hours Available 34872 35040 35136 35040 35040

Operated Hours 26836 31660 32252 31560 32142

Planned Outage (in hours) 1158 1970 1431 2298 1342

Forced Outages (in hours) 6288 1055 1453 1082 1372

Reserve Shut down (in hours) 590 355 0 100 184

Plant availability (percent) 76.96 90.35 91.79 90.07 91.73

Source: Chapter II of Haryana state audit report80

Table 4.12 shows the auxiliary consumption rates (ACR) of PTPS-2 units which

78 See pg. no. 21 ofhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf ; accessed on30th May 2011.79 Plant availability means the ratio of actual hours operated to maximum possible hours availableduring a certain period.80 Can be accessed athttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf

http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf

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have remained within the range of 8.74% to 9.66% during 2006-07 to 2013-14.

The ACR has shown sudden increase i.e. from 8.8 to 9.13% during 2009-10. The

ACR has been showing upward trend and depicts the projected ACR of PTPS-2

units for FY 2013-14 i.e. 10.13. The HERC norm for ACR of these units is 9%81. It

is reported in the audit report82 that the auxiliaries have consumed more fuel due to

forced outages. It is also detailed in the report that due to increase in ACR, there

has remained a shortfall of 155.68 MUs valued at 42.91 crores to the grid.

Therefore, it is required to ensure maximum plant availability of these units.

Table 4.12: Auxiliary Consumption Rates of PTPS-2 Units

YearAux. Cons.Rates (%) Trend Values

2007 8.74 8.59

2008 8.81 8.81

2009 8.8 9.03

2010 9.13 9.25

2011 9.66 9.47

2012 9.69

2013 9.91

2014 10.13


Table 4.13 shows the coal consumption rates (CCR) of PTPS-2 units which

have remained within the range of 649 to 672 grams per kWh during 2005-06 to

2009-10. It is found that the CCR has reduced from 665 to 649 grams per kWh

during 2006-07 due to use of high caloric coal and timely repair and maintenance

of equipments. It is found that the CCR has been showing upward trend and

depicts the projected CCR of PTPS-2 units for FY 2013-14 i.e. 673 grams per

81 The approved auxiliary consumption rates are retrieved fromhttp://herc.gov.in/orders/pdf/2011/20110503a.pdf on 13th May 2011.82 This information is taken from Pg. 24 of an audit report which is retrieved fromhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf on 13th May2011.

http://herc.gov.in/orders/pdf/2011/20110503a.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf

70

kWh. It is detailed in an audit report that the coal consumption rate depends upon

the caloric value of coal means the rate can be reduced by using high quality coal

and the utility has no control over quality of coal83. Therefore, it is required from

the Government side to ensure supply of good quality coal for power generation.

Table 4.13: Coal Consumption Rates of PTPS-2 Units

Year


TrendValues

2006 665 654.6

2007 649 656.9

2008 652 659.2

2009 658 661.5

2010 672 663.8

2011 666.1

2012 668.4

2013 670.7

2014 673


Table 4.14: Oil Consumption Rates of PTPS-2 Units

YearOil Cons. Rates(ml/ kwh)

TrendValues

2007 0.86 0.38

2008 0.59 0.79

2009 0.8 1.2

2010 1.05 1.61

2011 2.68 2.02

2012 2.43

2013 2.84

2014 3.25


Table 4.14 shows the oil consumption rates (OCR) of PTPS-2 units which have

remained within the range of 0.86 to 2.68 ml per kWh during 2006-07 to 2010-11.

83 This information is accessed from pg. 19 ofhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf ; accessed on30th May 2011.

http://hpgcl.gov.in/personal_18.hphttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf

71

The OCR has reduced from 0.86 to 0.59 ml per kWh during 2007-08. The OCR

has shown sudden increase i.e. from 1.05 to 2.68 ml per kWh during 2010-11. The

HERC specified norm for OCR of these units is 2 ml per kWh84. It is found that the

OCR has been showing upward trend and depicts the projected OCR of PTPS-2

units for FY 2013-14 i.e. 3.25 ml per kWh. It is observed by the researcher that the

OCR depends upon the timely repair and maintenance of equipments consuming

more oil. Therefore, it is required to control the oil consumption rate by

undertaking proper repair and maintenance at periodic intervals. It is also stated in

the audit report85 that the OCR can be reduced by ensuring periodic maintenance of

equipments.

Table 4.15: Station Heat Rates of PTPS-2 Units

Year

Station HeatRates (Kcal/kwh)

TrendValues

2007 2620 2579.4

2008 2571 2590.2

2009 2574 2601

2010 2561 2611.8

2011 2679 2622.6

2012 2633.4

2013 2644.2

2014 2655


Table 4.15 shows the station heat rates (SHR) of PTPS-2 units which have

remained within the range of 2561 to 2679 Kcal per kWh during 2006-07 to 2010-

11. It is found that the SHR has reduced from 2620 to 2571 Kcal per kWh during

84 The approved specific oil consumption rates for different HPGCL plants are taken from pg. 13 ofHERC order which is retrieved from http://herc.gov.in/orders/pdf/2011/20110503a.pdf on 13th May201185 This information is taken from pg. no. 25 of an audit report which is retrieved fromhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf

http://herc.gov.in/orders/pdf/2011/20110503a.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf

72

2007-08 due to higher plant availability of the units86. The SHR has shown sudden

increase i.e. from 2561 to 2679 Kcal per kWh during 2010-11. The HERC

specified norm for unit V and VI is 2600 Kcal per kWh while it is 2500 Kcal per

kWh for unit VII and VIII of PTPS87. Table 4.15 shows that the SHR has remained

more than the specified norms during 2006-07 and 2010-11. It is found that The

result shows that the SHR has been showing upward trend and depicts the

projected SHR of PTPS-2 units for FY 2013-14 i.e. 2655 Kcal per kWh. Therefore,

it is required to improve the technical efficiencies in terms of SHR by undertaking

timely repairs and maintenance of the boilers of PTPS-2 units.

Table 4.16: Total generation of HPGCL Thermal Units

YearGeneration

(MU) Trend Values

2007 10524.49 10561.15

2008 10575.1 11516.29

2009 13236.58 12471.43

2010 14866.51 13426.57

2011 13154.47 14381.71

2012 15336.85

2013 16291.99

2014 17247.13


Table 4.16 shows the generation of HPGCL thermal units which has remained

within the range of 10524 MUs88 to 14866 MUs during 2006-07 to 2010-11. The

generation has shown sudden increase i.e. 10575.1 to 13236.58 MU during 2008-

09. It is found that the generation has been showing upward trend and depicts the

projected generation for FY 2013-14 i.e. 17247.13 MU. It is observed by the

86 The plant availability of PTPS-2 units is detailed in table 4.11 of this chapter.87 The norms are given on Pg. 37 of the HERC order which is retrieved fromhttp://herc.gov.in/orders/pdf/2011/20110503a.pdf on 30th May, 2011.88 The abbreviation of MU is Million Units and here MU stands for a unit of energy generated fromthe power plants.

73

researcher that the generation depends upon three major factors including

availability of coal in bunkers (PTPS I and II), Plant Load Factor, and Hours of

forced outages. It is required to ensure the availability of high caloric coal, to

maintain PLF at higher levels by undertaking timely repair and maintenance of

equipments, and control forced outages so that the units can generate maximum

electricity and efficiencies are improved to the extent possible. In an audit report89,

the test check of records relating to outages revealed that the PTPS units have lost

130.51 MUs generation in forced shutdowns during 2005-06 and 2009-10 due to

non-availability of coal and this loss of generation is valued at 13.58 crores.

Table 4.17: Plant Load Factor of HPGCL Thermal Units

Year PLF (%)TrendValues

2007 78.78 78.59

2008 78.94 78.49

2009 75.01 78.39

2010 82.93 78.29

2011 76.28 78.19

2012 78.09

2013 77.99

2014 77.89


Table 4.17 shows the values of PLF of HPGCL thermal units which have

remained within the range of 75.01% to 82.93% during 2006-07 to 2010-11. The

PLF has shown sudden increase i.e. from 75.01% to 82.93% during 2009-10 due to

renovation and modernization (R&M) activities. It is found that the PLF has been

showing downward trend and depicts the projected PLF of HPGCL thermal units

for FY 2013-14 i.e. 77.89%. The units have under-utilized their capacity and

resources. It is stated in HERC orders that the main reasons for decline in PLF are

89 The information is taken from pg. no. 18 of an audit report which is retrieved fromhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf

74

extended shutdowns, part load operation at DCRTPS unit-2, and increase in forced

outages on HPGCL units90. Therefore, it is required to take necessary measures to

improve the PLF so that the units can generate electricity with more technical

efficiencies.

Table 4.18 shows that the auxiliary consumption rates (ACR) of HPGCL

thermal units which have remained within the range of 9.66% to 10.06% during

2006-07 to 2010-11. While the HERC norm for ACR of these units is 9%91. The

ACR has shown sudden increase i.e. from 8.8 to 9.13% during 2009-10. The ACR

has been showing upward trend and depicts the projected ACR of PTPS-2 units for

FY 2013-14 i.e. 10.13. It is observed by the researcher that the auxiliaries are

consuming more due to excess forced shutdowns of thermal units. It is required to

renovate and modernise the units so that excess outages can be controlled.

Table 4.18: Auxiliary Consumption Rates of HPGCL Units

YearAux. Cons.Rates (%)

TrendValues

2007 9.8 9.76

2008 9.93 9.8

2009 9.66 9.84

2010 9.77 9.88

2011 10.06 9.92

2012 9.96

2013 10

2014 10.04


Table 4.19 shows the coal consumption rates (CCR) of HPGCL thermal units

which have remained within the range of 706 to 741 grams per kWh during 2005-

06 to 2009-10. It is found that the CCR has been showing downward trend and

90 Pg. 50 of the orders of HERC available at http://herc.gov.in/orders/pdf/2011/20110503a.pdf,retrieved on 30th May, 2011.91 The approved auxiliary consumption rates are retrieved fromhttp://herc.gov.in/orders/pdf/2011/20110503a.pdf on 13th May 2011.

http://herc.gov.in/orders/pdf/2011/20110503a.pdfhttp://herc.gov.in/orders/pdf/2011/20110503a.pdf

75

depicts the projected CCR of HPGCL units for FY 2013-14 i.e. 675.6 grams per

kWh. It is required to improve CCR by ensuring availability of high caloric coal

and undertake timely renovation and modernization (R&M) activities. It is stated

in the audit report92 that due to delay in R&M activities of unit III and IV of PTPS,

the total coal consumption is exceeded by 79.03 lac million tones which is valued

at 2,016.32 crores.

Table 4.19: Coal Consumption Rates of HPGCL Thermal Units

Year


TrendValues

2006 741 738.8

2007 721 730.9

2008 735 723

2009 712 715.1

2010 706 707.2

2011 699.3

2012 691.4

2013 683.5

2014 675.6


Table 4.20 shows the oil consumption rates (OCR) of HPGCL units which have

remained within the range of 1.61 to 3.08 ml per kWh during 2006-07 to 2010-11.

The OCR has shown sudden increase i.e. from 1.61 to 3.08 ml per kWh during

2010-11. It is found that the OCR has been showing upward trend and depicts the

projected OCR of HPGCL units for FY 2013-14 i.e. 3.41 ml per kWh. The rates

have remained higher than the HERC specified norm93 of 2 ml per kWh. It is

observed by the researcher that the oil consumption have remained higher due to

various problems like generic defects in operating units, design deficiency, and old

92 Pg. 59 ofhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf.93 The approved specific oil consumption rates for different HPGCL plants are given at pg. 13 ofHERC orders retrieved at http://herc.gov.in/orders/pdf/2011/20110503a.pdf on 13th May 2011

http://hpgcl.gov.in/personal_18.hphttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://herc.gov.in/orders/pdf/2011/20110503a.pdf

76

technology based systems. In an audit report94, it is admitted that the periodic

maintenance of equipment is necessary to reduce oil consumption rate and for

ensuring long term sustainable levels of performance. Therefore, it is required to

check the problems of equipments and upgrade them on regular intervals in order

to control the excess consumption of oil.

Table 4.20: Oil Consumption Rates of HPGCL Thermal Units

YearOil Cons. Rates(ml/ kwh)

TrendValues

2007 1.85 1.73

2008 1.66 1.97

2009 2.87 2.21

2010 1.61 2.45

2011 3.08 2.69

2012 2.93

2013 3.17

2014 3.41


Table 4.21: Station Heat Rates of HPGCL Thermal Units

YearStation Heat Rate(Kcal/ kwh)

TrendValues

2007 2894 2909.6

2008 2916 2853.2

2009 2762 2796.8

2010 2684 2740.4

2011 2728 2684

2012 2627.6

2013 2571.2

2014 2514.8

Source: HPGCL petition for approval of tariff for the year FY 2012-13 retrieved fromwww.hpgcl.gov.in

Table 4.21 shows the station heat rates (SHR) of HPGCL thermal units during

2006-07 to 2010-11 which have remained within the range of 2684 and 2916 Kcal

per kWh.

94 The information is given at pg. no. 25 of Report can be accessed athttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf.


77

The HERC specified norm for SHR of HPGCL units is 2500 Kcal per kWh95.

The SHR has shown sudden fall i.e. from 2916 to 2762 Kcal per kWh during 2008-

09 due to renovation and modernization (R&M) activities. It is found that the SHR

has been showing downward trend and depicts the projected SHR for FY 2013-14

i.e. 2514.8 Kcal per kWh. The SHR has increased due to delay in repair and

maintenance of equipments. Further, the station heat rates have remained higher

than the HERC specified norm i.e. 2500 Kcal per kWh96. It is stated in an audit

report that due to excess heat rate, the coal consumption is also increased which is

valued at Rs. 251.75 crores97. Therefore, it is required to take proper initiatives for

controlling the station heat rates more effectively.

Table 4.22: Generation of WYC Hydel Units

YearGeneration

(MU)TrendValues

2007 255.72 263.49

2008 270.31 263.4

2009 282.39 263.31

2010 235.42 263.22

2011 272.7 263.13

2012 263.04

2013 262.95

2014 262.86


Table 4.22 shows the generation of Western Yamuna Canal (WYC) Hydel units

which has remained within the range of 235.42 MU to 282.39 MU. The generation

has shown upward trend during 2006-07 to 2010-11 except 2009-10. The projected

95 The specified norms are taken from Pg. 39 of HERC orders retrieved fromhttp://herc.gov.in/orders/pdf/2011/20110503a.pdf96 The specified norms are taken from Pg. 39 of HERC orders retrieved fromhttp://herc.gov.in/orders/pdf/2011/20110503a.pdf97 This information is taken from Pg. 19 of an audit report which is retrieved fromhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf.

http://herc.gov.in/orders/pdf/2011/20110503a.pdfhttp://herc.gov.in/orders/pdf/2011/20110503a.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdfhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf

78

trend values depict that the generation of WYC Hydel units will be 262.86 MU in

2013-14. It is required to find out the reasons for lower generation during 2009-10

and also to take measures for improving generation of these units.

The input efficiencies are concerned with coal and oil consumption rates which

can be improved by using high quality coal and oil and undertaking regular repair

and maintenance of equipments consuming more fuel coal and oil. The output

efficiencies are concerned with generation and plant load factor which can be

improved by undertaking timely renovation and modernization activities and also

by reducing the number of forces breakdowns. In this regard, it is must to reduce

the forced outages of power plants and undertake regular renovation and

modernization (R&M) of equipments to improve the technical efficiencies. Finally,

the technical performance of the units depend upon the qualitative fuel, timely

repairing works, less forced outages, and regular R&M activities.

b. Financial Performance of HPGCL

The financial performance depends upon the effectiveness and efficiency of

financial decisions to ensure optimum utilization of available resources. The utility

earns revenues from sale of electricity and utilizes the funds for making payment

of purchase bills and other expenditures such as debt servicing, employees cost,

administrative expenditures, and system improvement works.

Table 4.23 shows the revenues earned by HPGCL which have remained within

the range of 1654.42 to 7110.23 crores during 2004-05 to 2008-09. It is found that

the revenues have become three times during 2005-06 and reduced to half of the

previous year in 2008-09. The projected trend values are showing upward trend

and the revenues are increasing with the increase in demand of electricity which is

79

growing every year. It is stated in the audit report98 that 99.2% of the revenues are

coming from the sale of electricity. It is required to increase the generation to

improve the financial performance of the utility as well as to meet the growing

electricity demands of consumers.

Table 4.23: Revenues of HPGCL (in crores)

Year Revenues Trend Values

2005 1654.42 3564.55

2006 5286.6 4180.38

2007 6108.08 4796.21

2008 7110.23 5412.04

2009 3821.73 6027.87

2010 6643.7

2011 7259.53

2012 7875.36

2013 8491.19

2014 9107.02

Source: Financial statements of HPGCL available at www.hpgcl.gov.in

Table 4.24: Expenditures of HPGCL (in crores)

Year Expenditures Trend Values

2005 1523.25 3357.89

2006 4977.66 3928.96

2007 5756.5 4500.03

2008 6750.62 5071.1

2009 3492.13 5642.17

2010 6213.24

2011 6784.31

2012 7355.38

2013 7926.45

2014 8497.52


Table 4.24 shows that expenditures of HPGCL which have remained within the

range of 1523.25 to 6750.62 crores during 2004-05 to 2008-09. The expenditures

have shown sudden fall i.e. 6750.62 to 3492.13 crores during 2008-09. The table

98 See Pg. 50 ofhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf


80

shows that the expenditures have become three times of the previous year during

2005-06. These expenditures include the expenses spent over generating and

purchasing electricity power, repair and maintenance of equipments, employees

cost, administrative expenses, and other expenses. It is found that the expenditures

have been showing upward trend and depicts the projected expenditures of HPGCL

for FY 2013-14 i.e. 8497.52 crores. It is required to control the expenditures of

HPGCL. In an audit report99, it is stated that a major chunk of total expenditures

i.e. 66.8% is spent over the fuel consumption which directly depends upon the

technical efficiencies of HPGCL units. The expenditures can be reduced by

controlling fuel consumption and improving technical efficiencies of the units. The

use of high quality coal and oil will improve the PLF of HPGCL units and there

will be improvement is technical operations of the utility. Further, it is also

required to control the employees’ cost and interest and finance charges spent for

debt servicing; which is possible by taking effective financial decisions like debt

restructuring, making long term fuel supply contracts, reducing employees’

strength, and optimum utilization of resources.

Table 4.25 shows the net losses of HPGCL which have remained within the

range of 86.94 to 170.2 crores during 2004-05 to 2008-09. It is found that the

losses have decreased during 2007-08 and 2008-09 which is a positive sign of

improvement in profitability of the utility. The projected trend values are showing

downward trend in utility profits and depict that the losses will increase further in

the coming years. It is observed by the researcher that the increase in losses is due

to rise in utility expenditures including increasing fuel consumption, employees’

99 The information is taken from the audit report which is retrieved fromhttp://saiindia.gov.in/english/home/Our_Products/Audit_Report/government_Wise/state_audit/recent_reports/Haryana/2010/Commercial/Commercial_Haryana_2010/Chapter_ll.pdf


81

cost, and depreciation. It is required to reduce the expenditures and improve the

revenues by taking effective financial decisions and initiatives for improving the

performance of human resources. Further, the depreciation can be reduced by

undertaking timely repairs and maintenance of equipments.

Table 4.25: Net Profits of HPGCL (in crores)

Year Net Profit Trend Values

2005 -86.94 -93.29

2006 -87.74 -111.96

2007 -170.2 -130.63

2008 -168.26 -149.3

2009 -140.03 -167.97

2010 -186.64

2011 -205.31

2012 -223.98

2013 -242.65

2014 -261.32


Table 4.26 shows the employees cost of HPGCL during 2004-05 to 2009-10

which has remained within the range of 121.4 to 355.3 crores. It is found that the

employees cost has increased from 209 to 355 crores during 2008-09 due to

payment of arrears occurred from implementing sixth pay commission. It is found

that the employees cost has been showing upward trend. The trend depicts that the

employees cost of HPGCL for FY 2013-14 will be 570.85 crores. It is observed by

the researcher that the utility is unable to cut the employees’ salaries due to public

sector undertaking; however, it is possible to empower employees and build their

capacity to earn more revenues by delivering effective services to the utility. It is

required to introduce monetary and non-monetary incentives for motivating

employees to contribute and improve their performance in financial terms. Further,

the financial decisions can be taken to hire new employees on contract basis or to

have negotiation with recruitment agencies for providing technical employees at

82

lower cost.

Table 4.26: Employees Cost of HPGCL (in crores)

YearEmployeesCost Trend Values

2005 121.4 94.12

2006 147.92 147.09

2007 165.83 200.06

2008 209.84 253.03

2009 355.3 306

2010 358.97

2011 411.94

2012 464.91

2013 517.88

2014 570.85


Table 4.27: Depreciation on HPGCL’s fixed assets (in crores)

Year DepreciationTrend

Values

2005 127.22 149.26

2006 255.26 210.07

2007 274.26 270.88

2008 277.47 331.69

2009 420.17 392.5

2010 453.31

2011 514.12

2012 574.93

2013 635.74

2014 696.55


Table 4.27 shows that the depreciation of HPGCL’s fixed assets during 2004-05

to 2008-09 which has remained within the range of 127.22 to 420.77 crores. The

table shows that the depreciation has become double during 2005-06. Further, the

projected trend values has been showing upward trend and depicts the projected

value of depreciation for FY 2013-14 i.e. 696.55 crores. It is required to maintain

the fixed assets in order to improve their generating capacity so that more revenues

can be earned. It is also advised by HERC to prepare and maintain fixed assets

83

registers having proper records showing full particulars including qualitative

details and situations, identity number, date of acquisition, depreciated values, and

location of fixed assets at its units and Head Office100.

Overall, the efficiencies in financial operations of HPGCL depends upon the

maintenance of fixed assets, management of human resources, meeting operation

and maintenance functions properly, and improving productivity of power plants

and equipments. It is observed from the financial statements of HPGCL that due to

lack of funds, the utility depends upon the external debt to meet its financial

requirements. The utility is also affected with other problems such as delay in

recovery of power supply bills, heavy interest commitment on loans, and locking

up of funds in inventory. It is required to take effective financial decisions and

introduce smart activities and use of advanced technological tools in utilities’

operations for cutting its expenditures.

c. Financial Performance of HVPNL

The Haryana Vidyut Prasaran Nigam Limited (HVPNL) is primarily engaged in

the business of transmission in state and also operating State Load Dispatch

Centre (SLDC) at Sewah located in Panipat101. The utility has commissioned 208

new substations, augmented 400 existing substations, and added transmission

lines of 2733 Km length during March 2005 to June 2010 by making an

expenditure of Rs. 1964.80 crores102. Table 4.28 shows the year-wise investments

of HVPNL in substations and transmission lines from 2007-08 to 2011-12. The

utility has invested largest amount i.e. Rs. 2790 crores in 2010-11 and created 53

100 This information is taken from Pg. 44 of HERC orders retrieved fromhttp://herc.gov.in/orders/pdf/2011/20110503a.pdf101 The data is taken from Commission’s Order on ARR of HVPNL i.e. Case No. HERC/PRO – 2of 2010, 26th April 2011.102 This information is taken from website of the utility i.e. www.hvpn.gov.in on dated 20th June,2012.

http://herc.gov.in/orders/pdf/2011/20110503a.pdfhttp://www.hvpn.gov.in/

84

stations including 400kV, 220 kV, 132kV, and 66kV stations. In total, the utility

has invested Rs. 6453 crores upon new creations in substations and transmission

lines during 2007-08 to 2011-12.

Table 4.28 : HVPNL Investments in Substations and transmission lines

11th Five Year Investment Plan Rs. in Crores

Year 2007-08 2008-09 2009-10 2010-11 2011-12 2007-12

Nos Amount Nos Amount Nos Amount Nos Amount Nos Amount Nos Amount

New Creations

400kV 1 250 2 500 3 750

220kV 3 120 4 282 7 490 13 910 7 490 34 2292

132kV 11 61 7 245 7 245 19 665 7 245 51 1461

66kV 10 135 7 245 7 245 19 665 6 210 49 1500

Augmentations 50 50 50 50 50 250

SLDC 50 100 50 200

Total HVPN 24 416 18 922 22 1330 53 2790 20 995 137 6453

Grand Total 26 541 19 997 23 1410 55 3120 23 1575 146 7643

Source: Data taken from www.hvpn.gov.in103

Table 4.29: HVPNL’s Revenues from Wheeling (in lacs)

YearRevenue from

wheeling Trend Values

2007 35972.38 40112.3

2008 64404.76 54625.5

2009 65745.94 69138.7

2010 77659.36 83651.9

2011 101911.1 98165.1

2012 112678.3

2013 127191.5

2014 141704.7

Source: Financial statements of HVPNL taken from www.hvpnl.gov.in

Table 4.29 shows the revenues of HVPNL from wheeling operations which have

increased from 35972.38 lacs to 101911.1 lacs during 2006-07 to 2010-11. The

revenues have shown sudden increase i.e. from 35972.38 to 64404.76 during 2007-

08. The revenues have been showing upward trend and the projected revenues

103 The data is retrieved from http://www.hvpn.gov.in/page.php?page=1&type=content#topOn 12th September 2012.

http://www.hvpnl.gov.in/http://www.hvpn.gov.in/page.php?page=1&type=content

85

depict that the wheeling operations will generate revenues of Rs. 141704.7 lacs in

2013-14. The slope of trend line depicts that these revenues have been growing at

increasing rate and contributing in improving the financial position of the utility.

These revenues can be further increased by encouraging consumers to use open

access facilities provided by the utility.

Table 4.30: HVPNL’s Revenues from Sale of Power (in lacs)

Year Revenues Trend Values

2007 20285.45 21772.78

2008 22490.62 20842.8

2009 21002.34 19912.82

2010 17809.71 18982.84

2011 17976 18052.86

2012 17122.88

2013 16192.9

2014 15262.92


Table 4.30 shows the revenues of HVPNL from sale of power during 2006-07

to 2010-11 which have remained within the range of Rs. 17809.71 to 22490.62

lacs. The revenues have shown sudden fall i.e. from 21002.34 to 17809.71 lacs

during 2009-10. The projected revenues have been showing downward trend and

depicts the projected revenues from sale of power for FY 2013-14 i.e. 15262.92

lacs. The revenues from sale of power depend upon the quantity of electricity sold

and the tariffs charged by the utility. The tariffs are determined by the utility after

getting approval of HERC and the HERC approves the tariff rates after examining

the Annual Revenue Report104 (ARR) of HVPNL. In ARR, the HVPNL submits

the estimated expenditures and proposes tariff rates to be determined on the basis

104 As per the provisions of regulation 7 of the HERC Regulations, 2008, HVPNL submits AnnualRevenue Report (ARR) by 30th November of each year and as per section 86 (a) of Electricity Act,2003, HERC determines the tariffs for generation, transmission, supply, and wheeling of electricity.

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of estimated expenditures. It is observed by the researcher that the utility should be

allowed to charge higher tariffs so that the financial position can be improved and

the utility become able to improve its financial efficiencies.

Table 4.31: HVPNL’s Employees Cost (in lacs)

YearEmployees

CostTrend

Values

2007 25589.82 26786.25

2008 29740.28 31085.61

2009 40216.79 35384.97

2010 38842.45 39684.33

2011 42535.53 43983.69

2012 48283.05

2013 52582.41

2014 56881.77


Table 4.31 shows that the employees cost of HVPNL which has remained

within the range of 25589.83 to 42535.53 lacs during 2006-07 to 2010-11. The

values of employees cost are showing upward trend except 2009-10. The

employees cost has shown sudden increase i.e. from 29740.28 to 40216.79 lacs

during 2008-09 due to payment of arrears occurred from implementing sixth pay

commission. The projected values of employees’ cost have been showing upward

trend and depict the employees cost for FY 2013-14 i.e. 56881.77. The slope of

trend line depicts that the employees cost has been growing at increasing rate and

putting more pressure on the profitability of HVPNL. The employees cost includes

the cost incurred for making payments to employees including salary, respective

allowances, pension, gratuity, leave encashment, and other payments as admissible

to employees under service rules.

While comparing the employees’ costs of power utilities of various states, it is

found that the employee cost in Haryana is extremely high as compared to other

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states’ transmission utilities105. Therefore, it is required to control employees’ cost

by optimum use of available human resources without resorting to new

recruitments. Further, it is also observed that HVPNL has recruited over 1000

employees during 2010-11 and plans to add more employees in coming years. But

as the employees cost is already higher, such decisions should be reconsidered. It is

also required to implement information technology in operational functions of

HVPNL in order to the productivity and generate more revenues from operational

activities. It is also observed by the researcher that a good number of employees

are not assigned duties according to their academic and skill experience. Therefore,

there is requirement of a job analysis to put the right person for the right job.

Table 4.32 shows the interest and finance charges of HVPNL during 2006-07 to

2010-11 which have remained within the range of 18383.52 lacs to 27829.29 lacs.

The interest and finance charges have shown sudden increase i.e. from 19981.23 to

23131.1 lacs during 2009-10. The interest and finance charges have been showing

upward trend and depicts the projected interest and finance charges for FY 2013-

14 i.e. 32942.14 lacs. The slope of the trend line depicts that the interest and

finance charges have been growing at increasing rate and putting more pressure

upon profitability of HVPNL. It is observed by the researcher that due to lack of

financial resources and increasing financial requirements, the utility proposes to

borrow more funds every year in Annual Revenue Report (ARR) and the HERC

normally approves it after considering future requirements of the utility

particularly for capital works and working capital needs. The upward trend in these

charges alerts the utility to control its borrowings and meet its financial

requirements through generated revenues.

105 This information is taken from Commission’s Order on ARR of HVPNL i.e. Case No.HERC/PRO – 2 of 2010 dated 26th April 2011.

88

Table 4.32: Interest and Finance Charges of HVPNL (in lacs)

Year

Interest andFinanceCharges Trend Values

2007 18383.52 17372.8

2008 19780.77 19596.99

2009 19981.23 21821.18

2010 23131.1 24045.37

2011 27829.29 26269.56

2012 28493.75

2013 30717.94

2014 32942.13


Table 4.33: HVPNL’s Profits after Tax (in lacs)

YearProfits after

tax Trend Values

2007 -1388 2350.27

2008 14313.93 6005.38

2009 6048.86 9660.49

2010 10566.23 13315.6

2011 18761.42 16970.71

2012 20625.82

2013 24280.93

2014 27936.04


Table 4.33 shows the profits earned by the HVPNL during 2006-07 to 2010-11

which have remained within the range of (-) 1388 to 18761.42 lacs. The profits are

showing upward trend except 2008-09. The profits have shown sudden increase i.e.

from (-) 1388 to 14313.93 during 2007-08. The projected profits have been

showing upward trend and depicts the projected net profits for FY 2013-14 i.e.

27936.04 lacs. The slope of trend line depicts that the net profits have been

growing at increasing rate during the period. However, the net profits depend upon

the revenues and expenditures of the utility. The expenditures of HVPNL include

employee’s cost, repair and maintenance charges, administrative expenses, and

http://www.hvpnl.gov.in/

89

general expenses. Further, as per HERC transmission tariff regulations, the HERC

considers Return on Equity of 14% on the basis of figures stated in ARR which

means it is expected that the profits will improve further in coming years. As the

utility’s profits are expected to be increased in future, financial decisions should be

taken to reduce its dependence over the external borrowings.

Table 4.34: Computation of Debt/Equity Ratios of HVPNL

(Figures in lacs)

Particulars 2006-2007 2007-2008 2008-2009 2009-10 2010-11

Debt or Loans

liabilities252536.78 247427.57 279056.69 364539.6 408951.98

Net Worth (Share

Capital + Reserve &

Surpluses + Profit and

Loss Account)

87279.32 95385.58 110086.79 144187.98 200816.69

Debt/Equity Ratio i.e.

loans liability/Net

Worth

2.89 2.59 2.53 2.53 2.04

Source: Financial statements of HVPNL available at www.hvpnl.gov.in

Table 4.34 computes the Debt to Equity ratio of HVPNL and it shows that the

loan liabilities have increased from 252536.78 to 408951.98 lacs during 2006-07 to

2010-11. However, due to increase in net worth of the utility, the Debt to Equity

ratios have been showing downward trend except 2007-08. It is observed by the

researcher that the ratio can be reduced by better utilization of financial resources

and not relying upon debt in meeting utility’s financial requirements. As per

accounting rules, this ratio should be less than 1 which states that the external

liabilities should not be more than the net worth of the utility. Therefore, it is

required to use financial resources more efficiently to reduce the debt to equity

ratio.


90

Table 4.35: Debt/Equity Ratios of HVPNL

YearDebt/Equity

RatioTrend

Values

2007 2.89 2.88

2008 2.59 2.7

2009 2.53 2.52

2010 2.53 2.34

2011 2.04 2.16

2012 1.98

2013 1.8

2014 1.62

Source: Table 4.34 showing computed values of Debt / Equity Ratio.

Table 4.35 shows the values of debt to equity ratios of HVPNL which have

remained within the range of 2.89 to 2.04 during 2006-07 to 2010-11. The values

have been showing downward trend which a positive sign for long term stability of

the utility. Further, the projected trend values depict that the ratio will reduce

further and will be 1.62 in 2013-14. However, it is required to take effective

financial decision to reduce external borrowings. It is also found that due to

inefficient financial performance of HVPNL, the CRISIL has given it the corporate

credit rating of ‘CCR BB+’ which states that the credit risk profile of HVPNL is

weak and unlikely to improve significantly over the medium term. CRISIL also

explained that the utility is heavily dependent on short-term loans for meeting its

large working capital requirements106. However, due to monopoly in power

transmission business in Haryana and increasing demand of electricity services

rendered by DHBVNL and UHBVNL; it is estimated that the utility’s revenues

will increase in coming years and it is required to improve efficiencies in financial

operations. The utility can contribute in economic development of Haryana by

106 The data is taken from http://www.crisil.com/Ratings/RatingList/RatingDocs/haryana-vidyut-prasaran-nigam_29sep10.htm

91

building strong transmission network for wheeling generated electricity to

DHBVNL and UHBVNL.

Table 4.36: Computation of Current Ratios of HVPNL

(in lacs)

Particulars 2006-2007 2007-2008 2008-2009 2009-10 2010-11

Current Assets 77770.92 64840.1 77047.23 95792.14 115210.71

Current Liabilities 62990.86 80431.15 101978.31 94413.19 102417.75

Current Ratio(Current Assets/Current Liabilties)

1.23 0.81 0.76 1.01 1.12


Table 4.36 computes the current ratios of HVPNL from 2006-07 to 2010-11.

The current assets have been showing upward trend except 2007-08 and the current

liabilities have been increasing during the period except 2009-10. Table 4.37

shows that the current ratios have remained within the range of 0.76 to 1.23. It is

found that the current ratio has decreased from 1.23 to 0.76 during 2006-07 to

2008-09 but thereafter, it increased to 1.12 in 2010-11. The current ratio should be

more than 2 but in case of HVPNL, it has remained less than 2. It means that the

utility is facing problems in meeting its short term requirements due to working

capital deficit. Further, CRISIL, a credit rating agency also explained that the

utility is heavily dependent on short-term loans for meeting its working capital

requirements107. The projected trend values are also showing downward trend and

depict that the current ratio will be 0.89 in 2013-14. Therefore, it is required to

improve the liquidity position of HVPNL and it is possible by keeping a part of

earned revenues to meet its working capital needs.

107 The data is taken from http://www.crisil.com/Ratings/RatingList/RatingDocs/haryana-vidyut-prasaran-nigam_29sep10.htm

92

Table 4.37: Current Ratios of HVPNL

YearCurrent

RatioTrend

Values

2007 1.23 1.1

2008 1.06 1.07

2009 0.76 1.04

2010 1.01 1.01

2011 1.12 0.98

2012 0.95

2013 0.92

2014 0.89

Source: Table 4.36 showing computed values of Current Ratio.

Table 4.38: Returns on Capital Employed Ratios of HVPNL

(in lacs)Particulars 2006-2007 2007-2008 2008-2009 2009-10 2010-11

Net Worth(Share Capital+ Reserve &Surpluses)

87279.32 95385.58 110086.79 135830.94 173698.19

Profit/(Loss)after Taxes

-1,388 14313.93 6048.86 10566.23 18761.42

Returns onCapitalEmployed i.e.Net Profit/NetWorth

-1.59 15.01 5.49 7.78 10.8


Table 4.38 shows the computation of ‘Return on Capital Employed ratios’ of

HVPNL from 2006-07 to 2010-11. The ratio compares the earnings of utility with

the capital employed in the utility. The ratio has shown sudden increase i.e. from (-

) 1.59 to 15.01 during 2007-08. In table 4.39, the ratios have been showing upward

trend and depicts the projected value of returns on capital employed ratio for FY

2013-14 i.e. 16.3 which indicates that the utility will become able to meet its

financial needs easily. The slope of trend line depicts that this ratio has been

growing at decreasing rate during the period. It means that the ratio can be

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improved by taking effective financial decisions.

Table 4.39: Trend in Returns on Capital Employed Ratios of HVPNL

Year

Returns onCapitalEmployed

TrendValues

2007 -1.59 3.98

2008 15.01 5.74

2009 5.49 7.5

2010 7.78 9.26

2011 10.8 11.02

2012 12.78

2013 14.54

2014 16.3

Source: Table 4.38 showing computed values of Net Worth and Capital Employed

Ratio.

Table 4.40 computes the values of interest coverage ratios from 2006-07 to

2010-11. It is found that the cost of servicing debt i.e. ‘interest and finance

charges’ is continously increasing and has become from 18383.52 lacs (FY 2006-

07) to 27829.29 lacs (2010-11). It also shows that the utility has remained

dependent upon external liablities to meet its financial needs during this period. A

major portion of the earned profits (i.e. more than 50% of the profits) is spent over

servicing of debts in the form of interest and finance charges.

Table 4.40: Computation of Interest Coverage Ratios of HVPNL

(Figures in lacs)Particulars 2006-2007 2007-2008 2008-2009 2009-10 2010-11

Profit/(Loss) beforeInterest & FinanceCharges

13935.58 35575.41 30526.88 36027.35 51408.46

Interest & FinanceCharges

18383.52 19780.77 19981.23 23131.1 27829.29

Interest Coverage Ratioi.e. Profit beforeinterest andtaxes/interest charges

0.76 1.8 1.53 1.56 1.85



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Table 4.41 shows the values of interest coverage ratios and depict that the ratio

has increased from 0.76 (FY 2006-07) to 1.85 (FY 2010-11) which is a positive

sign of financial performance of the utility. The ratio has shown sudden increase

i.e. from 0.76 to 1.8 during 2007-08. The ratios have been showing upward trend

and depicts the projected ICR for FY 2013-14 i.e. 2.45. The value of interest

coverage ratio has been growing even after increase in the interest and finance

charges. It means the utility has generated more returns from utilizing financial

resources than the interest and finance charges required for servicing the debts. As

per accounting norms, the ICR is an indicator of profitability and it should be

more. The slope of trend line depicts that the interest coverage ratios have been

growing at decreasing rate. It is required to control and reduce interest and finance

charges which is possible only after reducing utility’s dependence over external

borrowings.

Table 4.41: Interest Coverage Ratios of HVPNL

Year

InterestCoverage

RatiosTrend

Values

2007 0.76 1.12

2008 1.8 1.31

2009 1.53 1.5

2010 1.56 1.69

2011 1.85 1.88

2012 2.07

2013 2.26

2014 2.45

Source: Table 4.40 showing computed values of Interest Coverage Ratio.

Overall, the ratio analysis of financial figures of HVPNL clarifies that the utility

requires to take more effective and efficient decisions to utilize the financial

resources, restoring financial health, improve short-term liquidity for meeting its

working capital requirements. Futher, it is also required to take cost cutting

95

measures, use smart and Information Technological (IT) tools, and provide training

to executives for making effective financial decisions so that the financial

efficiencies can be improved. The working capital management and debt

restructuring can also be used to improve the financial efficiencies.

d. Financial Performance of DHBVNL and UHBVNL

These two utilities procure electricity from HPGCL in bulk and cater the

distribution and retail supply in north and south zones of Haryana respectively. The

utility earns revenues from sale of power and utilizes funds for making payment of

procured power, employees’ salaries, interest and finance charges, and other

expenses. The financial performance of the utilities can be measured with the help

of ratio analysis.

Table 4.42: DHBVNL’s Revenue from Sales of Power( in crores)

YearRevenue fromSale of Power

TrendValues

2007 2375.31 2493.51

2008 2686.25 2992.21

2009 3156.32 3490.91

2010 3556.01 3989.61

2011 4433.92 4488.31

2012 4987.01

2013 5485.71

2014 5984.41

Source: Financial statements of DHBVNL available at www.dhbvnl..gov.in

Table 4.42 shows the DHBVNL’s revenues from sale of power which have

increased from 2375.31 crores (FY 2006-07) to 4433.92 crores (FY 2010-11). The

revenues have been increasing due to growing demand of electricity and increase

in the tariffs being charged from the consumers. However, the tariffs with respect

to supply, transmission, wheeling, and retail supply of electricity are determined by

HERC in accordance with section 86 (a) of Electricity Act, 2003. The utilities

http://www.dhbvnl..gov.in/

96

prepare and file Annual Revenue Report (ARR) and propose to determine tariffs

on the basis of its financial requirements. The projected revenues from sale of

power have been showing upward trend and depict that the revenues will be

5984.41 crores in 2013-14 which is a positive sign for improvement in the

financial strength of the utility. It is observed by the researcher that the utility

collects the projected revenues as per approved Annual Revenue Report, but it is

stated in the executive summaries108 that the utility has collected less than

approved projected revenues during FY 2009-10 and 2010-11 and the revenue gaps

(i.e. ARR- Revenues collected through tariffs and subsidies) have remained Rs.

1887 crores and Rs. 1228 crores respectively. It is required to focus upon

improving the collections and reduce such revenues gaps in future.

Table 4.43: DHBVNL’s Revenue from Subsidies(in crores)

Year

Revenuefrom

Subsidies Trend Values

2007 590.49 718.19

2008 829.2 893.99

2009 1005.34 1069.79

2010 1200.68 1245.59

2011 1283.75 1421.39

2012 1597.19

2013 1772.99

2014 1948.79


Table 4.43 shows the DHBVNL’s revenues from subsidies which have

increased from 590.49 (FY 2006-07) to 1283.75 (FY 2010-11). The revenues have

shown sudden increase i.e. from 590.49 to 829.2 crores during 2007-08 due to

increase in the volume of electricity supplied to the agricultural consumers.

108 The information is taken from Executive Summaries of FY 2010-11 (Pg. 48) and FY 2011-12(Pg. 30).


97

Further, the projected values of revenues from subsidies have been showing

upward trend and depict that the revenues from subsidies will become 1948.79

crores in 2013-14. As per the HERC directives, the subsidies should be allocated

only for one category i.e. agricultural sales. It is observed that the subsidies are

putting extra burden on government budget as the subsidies are afforded by the

government to improve the agricultural output of the state.

Table 4.44: DHBVNL’s Expenditures over Purchase of Power(in crores)

Year

Expenditureover

purchase ofpower Trend Values

2007 2681.05 2955.44

2008 3269.27 3461.55

2009 3705.36 3967.66

2010 4142.19 4473.77

2011 4775.15 4979.88

2012 5485.99

2013 5992.1

2014 6498.21


Table 4.44 shows the DHBVNL’s expenditures over purchase of power from

2006-07 to 2010-11. It is found that the expenditures have increased from 2681.05

crores to 4775.15 crores during this period. The projected expenditures have been

showing upward trend and depict that the expenditures over purchase of power will

be 6498.21 crores in 2013-14. It is stated in the executive summary109 that the

percentage of power purchase cost over total expenditure has remained highest i.e.

84% in DHBVNL than the distribution utilities of other states including Punjab,

Andhra Pardesh, Karnataka, Tamilnadu, and Gujarat. It is observed by the

researcher that the DHBVNL and UHBVNL purchase power through Haryana

109 The data related to this conclusion can be seen at Pg. 39 of Executive Summary of FY 2008-09available at www.dhbvnl.gov.in


98

Power Purchase Cell (HPPC) and HPPC procures power from HPGCL, central

generating stations, and other external sources. The major external sources are

NTPC, NHPC, NPCIL for long-term requirements and PTC, NVVNL, ADANI,

TATA, REL etc. for short term requirements. As the cost of power purchase is

more than the other states, it is required to explore and encourage new external

sources for the purchase of power and the government should encourage the

sources of alternative generation, independent power producers (IPPs), and also the

captive power generation by involving big industrial consumers.

Table 4.45: Employees Cost of DHBVNL(Figures in Crores)

YearEmployeesCost Trend Values

2007 230.45 294

2008 246.01 413.28

2009 490.27 532.56

2010 896.05 651.84

2011 501.84 771.12

2012 890.4

2013 1009.68

2014 1128.96


Table 4.45 shows the values of employees cost of DHBVNL which have

remained within the range of 230.45 crores to 896.05 crores during 2006-07 to

2010-11. The values are showing upward trend except 2010-11. The employees’

cost has shown sudden increase i.e. from 490 crores to 896 crores during 2009-10

due to payment of arrears occurred from implementing sixth pay commission. The

employees cost includes the cost incurred on present and retired employees i.e.

salary and allowances payable to present employees and pension and retirement

benefits payable to retired employees, as applicable. The projected values of

employees cost have also been showing upward trend and depict that the


99

employees cost will be 1128.96 crores in 2013-14. The slope of trend line depicts

that the employees cost has been growing at increasing rate and putting more

pressure on the profitability of DHBVNL. Therefore it is required to take measures

for controlling the employees cost. In future, the new employees may be hired or

engaged on long term contract basis including remuneration based on specified

performance norms so that financial burden can be reduced and efficiencies can be

improved.

Table 4.46: Interest and Finance Charges of DHBVNL(in crores)

Year

InterestandFinanceCharges

TrendValues

2007 53.31 75.19

2008 116.09 175.49

2009 179.74 275.79

2010 332.38 376.09

2011 446.67 476.39

2012 576.69

2013 676.99

2014 777.29


Table 4.47: Net Profits of DHBVNL( in crores)

Year Net Profits Trend Values

2007 -102.26 -203.32

2008 -284.38 -310.98

2009 -265.25 -418.64

2010 -778.8 -526.3

2011 -393.36 -633.96

2012 -741.62

2013 -849.28

2014 -956.94


Table 4.46 shows that the interest and finance charges of DHBVNL which has

http://www.dhbvnl..gov.in/http://www.dhbvnl..gov.in/

100

increased from 53.31 (2006-07) to 446.67 (2010-11). It is found that the interest

and finance charges have increased from 179.74 to 332.38 crores during 2009-10.

It seems that the utility have paid the arrears (occurred from implementing sixth

pay commission) after taking the loans. Further, the projected values of interest

and finance charges have shown the upward trend and depict that the interest and

finance charges will be 777.29 crores in 2013-14. Therefore, it is required to

control these charges by making payments of the borrowings and utilizing financial

resources more efficiently. The HERC may also approve the higher tariffs to be

charged from industrial and commercial consumers; in order to improve the

financial position of the utility.

Table 4.48: Debt / Equity Ratios of DHBVNL

(in crores)

Particulars 2006-07 2007-08 2008-09 2009-10 2010-11

Share Capital (A) 673.67 806.42 946.42 1180.86 1260.47

Reserve & Surplus (B) 20.84 30.17 -1233.75 -1866.92 -2260.28

Capital Consumer

contribution and grant (C)396.17 440.39 535.78 590.94 661.67

Shareholders’ funds

(A+B+C) 1090.68 1276.98 248.45 -95.12 -338.14

Secured Loans (D) 256.27 539.48 931.64 2631.27 3512.54

Unsecured Loans (E) 631.31 806.48 1451.84 1226.1 1309.22

Consumer Security

Deposit (F)317.51 394.4 461.84 526.52 599.27

Debt (D+E+F) 1205.09 1740.36 2845.32 4383.89 5421.03

Debt / Equity Ratio 1.1 1.36 11.45 -46.09 -16.03


Table 4.47 shows the net profits of DHBVNL during 2006-07 to 2010-11. The


101

utility is suffering from financial losses and the losses have increased from 102.26

crores (FY 2006-07) to 778.8 crores (778.8) in 2009-10 due to payment of arrears

occurred from implementing pay scales of sixth pay commission. However,

thereafter the losses have reduced to 393.36 crores in 2010-11. Further, the

projected values of net profits have shown downward trend and depict that the

utility’s losses will be 956.94 crores in 2013-14. As per the Annual Revenue

Requirement for FY 2012-13; the utility has projected losses of 2444.08 crores110.

The utility is getting grants from Rural Electrification Corporation (REC) and also

getting capital grants from various agencies for improving efficiencies. But it is

required to take effective financial decisions to adopt cost control mechanisms,

debt restructuring, and information technological (IT) tools in performing

operational and financial activities. Further, it is also required to maintain

efficiency standards to evaluate and ensure the performance of human resources by

fixing their responsibilities.

Tabl

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