PUNJAB STATE ELECTRICITY REGULATORY COMMISSION SITE NO. 3, BLOCK B, SECTOR 18-A MADHYA MARG, CHANDIGARH CONTENTS CHAPTER TITLE PAGE NO. 1. Introduction 1-7 2. True Up of FY 2018-19 9-70 3. Annual Performance Review of FY 2019-20 71-107 4. Aggregate Revenue Requirement for 2 nd MYT Control Period FY 2020-21 to FY 2022-23 109-166 5. Tariff Related Issues 167-176 6. Directives for FY 2020-21 177-209 7. Determination of Tariff for FY 2020-21 211-223 ANNEXURE I. General Conditions of Tariff 225-234 II. Schedules of Tariff 235-255 III. Minutes of the Meeting of State Advisory Committee 257-269 IV. Voltage-wise Cost of Supply 271 V. List of Objectors 273-274 VI. Objections 275-388 VII. Letter of the Commission to Govt. of Punjab Regarding Subsidy 389-390 VIII. Reply of Govt. of Punjab regarding Subsidy 391-397 Phone: 0172-2861800 Fax: 0172-2540491 Email: [email protected]Website: www.pserc.gov.in
Transcript
PUNJAB STATE ELECTRICITY REGULATORY COMMISSION SITE NO. 3, BLOCK B, SECTOR 18-A MADHYA MARG,
CHANDIGARH
CONTENTS
CHAPTER TITLE PAGE NO.
1. Introduction 1-7
2. True Up of FY 2018-19 9-70
3. Annual Performance Review of FY 2019-20 71-107
4. Aggregate Revenue Requirement for 2nd MYT Control Period FY 2020-21 to FY 2022-23
109-166
5. Tariff Related Issues 167-176
6. Directives for FY 2020-21 177-209
7. Determination of Tariff for FY 2020-21 211-223
ANNEXURE
I. General Conditions of Tariff 225-234
II. Schedules of Tariff 235-255
III. Minutes of the Meeting of State Advisory Committee 257-269
IV. Voltage-wise Cost of Supply 271
V. List of Objectors 273-274
VI. Objections 275-388
VII. Letter of the Commission to Govt. of Punjab Regarding Subsidy
389-390
VIII. Reply of Govt. of Punjab regarding Subsidy 391-397
Petrol pumps and Tele-communication towers 30 days
f) Non-Residential (general) i.e. other than (e) 25 days
g) Water works &street lights 30 days
h) Other categories 30 days
H is use of supply hours per day, which shall be taken for different categories of
use as below:
a) Single shift industry (day / night only) 08 hrs.
b) Non-continuous process industry (day & night) 20 hrs.
c) Continuous process industry 24 hrs
d) (i) Non-Residential (general) including restaurants 12hrs.
(ii) Hotels, hospitals, nursing homes, guest houses, 20hrs.
Petrol pumps and Tele-communication towers
e) Domestic 08 hrs.
f) Agriculture 06 hrs.
g) Water works 08 hrs.
h) Street light 08 hrs.
i) Other categories 12 hrs.
F is demand factor, which shall be taken for different categories of use as below:
a) (i) Industrial (General) 60%
(ii) Power Intensive, Arc Furnace 75%
b) Non-Residential 40%
c) Domestic 30%
d) Agriculture 100%
e) Other categories including temporary supply 100%
f) Direct supply for any use by a person 100%
In this regard, PSPCL submitted that it has collected the sanctioned load for different
consumer categories on each of the mixed feeders in Kandi area. The demand factor
specified in Supply Code Regulations has been applied on such aggregate sanctioned
load for each consumer categories. Further, PSPCL has computed the energy units
based on number of hours of supply and days specified therein the Supply Code
Regulations. The demand factor, sanctioned load for each consumer category after
PSERC – Tariff Order FY 2020-21 for PSPCL 13
applying demand factor and computed energy for such Mixed Feeders in Kandi area is
as under:
Table 3: Computed Energy on Mixed Feeders in Kandi Area submitted by PSPCL
Sr.
No. Category
Demand
Factor
Sanctioned load
(kW) after applying
Demand Factor
Computed
Energy
(MkWh)
I II III IV V
1. Domestic 30% 140,979 406.02
2. Non-Residential 40% 36,619 131.83
3. Small Power 60% 19,877 71.56
4. Medium Supply 60% 15,982 57.53
5. Large Supply 60% 25,331 91.19
6. Public Lighting 100% 2,122 9.17
7. Agriculture 100% 298,217 644.15
8. Grand Total 539,127 1,411.45
9. % Agriculture consumption 55.31% 45.64%
Accordingly, the AP consumption submitted by PSPCL for true up of FY 2018-19 is
given in the following table:
Table 4: AP Consumption submitted by PSPCL for True up of FY 2018-19
Sr. No. Category MkWh
I II III
1. Energy pumped in case of 3 Phase 3 Wire AP feeders 11,413.77
2. Energy pumped in case of 3 Phase 4 Wire AP feeders 2.92
3. Energy pumped in case of Kandi area mixed feeders 848.45
4. Energy pumped in case of Kandi area pure AP feeders 7.56
5. Total Energy pumped 12,272.70
6. Less: losses @10.11% 1,240.77
7. Net AP consumption for FY 2018-19 11,031.93
8. Metered AP consumption 155.46
9. Total AP Consumption 11,187.39
Commission’s Analysis:
i) The Commission also estimates the AP consumption based on the methodology of
pumped energy. However, in order to minimize the error on account of human
intervention, the Commission had issued a directive to PSPCL in the Tariff Orders to
ensure supply of monthly AMR data of AP feeders regularly to the Commission failing
which a cut will be imposed on AP consumption. In compliance thereof PSPCL has
PSERC – Tariff Order FY 2020-21 for PSPCL 14
started submitting the monthly AMR data. But, since the data for FY 2018-19 is
available for only about 1200 to 1500 AP feeders against a total of about 6000 AP
feeders and does not contain true feeder wise sanctioned load of AP consumers, it
cannot be used to accurately estimate the AP consumption of the State as a whole.
Thus, the Commission decides to continue with the estimation of the AP
consumption on the basis of pumped energy data supplied by PSPCL, with a
prudence check. The Commission reiterates its directive to ensure availability
of monthly AMR data of all AP feeders along with sanctioned load of AP
consumers connected to feeder and feeder wise maximum demand without
any further delay.
ii) Kandi Area Mixed Feeders: For assessment of AP consumption fed from Kandi
Area mixed feeders, the pumped energy for agriculture load is being considered as
30% of the total pumped energy, as per the percentage of AP load in the total load of
consumers fed from these feeders as furnished by PSPCL vide its letter No. 2944
dated 23.12.2013. The Commission was not convinced by the request of PSPCL to
consider 45% of the total pumped energy of Kandi Area mixed feeders as AP
consumption, with the plea that although the percentage of sanctioned load of AP
consumers fed from Kandi Area mixed feeders is around 30%, the billed energy of
the consumers is around 45% of the total pumped energy. During the processing of
the ARR for FY 2014-15, PSPCL was asked to submit comments on the
observations of the Commission in the matter vide letter No. 702 dated 20.01.2014.
Since, PSPCL had not submitted any comments in the matter; it was presumed that
PSPCL had nothing more to say in the matter.
However, in order to ensure more accurate assessment of agriculture consumption of
Kandi Area feeders, directions were issued to PSPCL way back in the Tariff Order for
FY 2013-14, that AP load of Kandi Area feeders fed from mixed feeders should be
segregated and in case of any practical difficulty due to difficult terrain in certain
areas, all AP consumers of such feeders should be metered. Also, in the Tariff Order
for FY 2015-16, the Commission directed PSPCL specifically to utilise Deendayal
Upadhyaya Gram Jyoti Yojana (DDUGJY) for segregation of mixed Kandi Area
feeders and/or achieve 100% metering on these feeders. These directions were
reiterated in successive Tariff Orders of the Commission. However, PSPCL has so
far neither completed segregation of the mixed Kandi area feeders nor achieved
100% metering of AP consumers on such feeders.
The new contention of PSPCL to estimate the AP energy consumption of mixed
PSERC – Tariff Order FY 2020-21 for PSPCL 15
Kandi Feeders on the basis of LDHF formula provided in Annexure-8 of the Supply
Code Regulations is not in order as the same is the provision for assessment of
electricity charges in cases of unauthorized use/theft where load is taken on
estimated basis. Moreover, the Commission notes that PSPCL has failed to consider
the 4th Amendment to Supply Code Regulations wherein the supply hours/day for
Agriculture category (H) in the LDHF formula was amended from 6 to 4 hours.
Thus, pending implementation of its directives for completion of feeder
segregation/AP consumer metering, the Commission has no option but to
continue determining the AP consumption of mixed Kandi Area feeders as per
the existing approach of considering the energy for agriculture load as 30% of
the total pumped energy, in line with the percentage of AP load in the total load
of consumers fed from Kandi Area mixed feeders. Further, the Commission
reiterates its directive to PSPCL to ensure that the work of feeder
segregation/AP consumer metering is completed at the earliest. Further,
PSPCL is directed to submit the data of segregated feeders/100% metered
feeders along with monthly pumped energy data of AP feeders.
iii) Kandi Area Pure AP Feeders:
PSPCL submitted that energy of 7.56 MkWh has been pumped into 3 kandi area
pure AP feeders. However during validation the Commission observed that some
load of other categories was also being fed from 2 of such feeders. The AP
consumption of these feeders has been worked out as under:
Table 5: AP Consumption for Kandi Area pure AP feeders for FY 2018-19
Sr.
No. Feeder
AP consumption
submitted by
PSPCL (MkWh)
Load on Feeder (kW) AP energy
calculated on
pro-rata basis
(MkWh)
Total
AP
Load
Other
Loads
I II III IV V VI VII
1. Dhada 3.32 1570 1500 70 3.17
2. Rajpur 2.06 1286 1278 8 2.05
3. Kalupur 2.18 1659 1659 0 2.18
4. Total 7.56 7.40
Accordingly, the Commission considers the AP consumption from 3 Kandi area
AP feeders as 7.40 MkWh for truing up of FY 2018-19.
iv) AP load fed from urban feeders: The Commission in the Tariff Orders for FY 2018-19
and FY 2019-20 has specified that consumption of only metered AP consumers shall be
considered for urban feeders. PSPCL in its Petition has submitted metered AP
consumption of 155.46 MkWh. In response to the Commission‟squery,PSPCLvideits
PSERC – Tariff Order FY 2020-21 for PSPCL 16
memo no.75 dated 13.01.2020 submitted the break-up of metered and non-metered AP
consumption on urban feeders as under:
Table 6: Break-up of metered and non-metered AP consumption on urban feeders for FY 2018-19
Sr. No. Description Metered Unmetered Total
I II III IV V
1. No. of Consumers 7976 1008 8984
2. Connected load (kW) 46704.75 6756.37 53461.12
3. Consumption (MkWh) 135.81 19.65 155.46
PSPCL was further asked to provide data of metered AP consumers where from
135.81 MkWh has been assessed by PSPCL. In reply thereof PSPCL vide e-mail
dated 12.02.2020 submitted the data of 49326 readings with AP consumption of
119.20 MkWh. On perusal of the same it was observed as under:
a) Out of these 49326 readings, in respect of 7517 readings, no initial and final
reading was provided but energy of 25.60 MkWh has been shown consumed
against these consumers.
b) 525 readings have initial readings marked as Zero and consumption is not
corresponding to the closing readings. The readings constitute 4.26 MkWh of
energy.
c) In case of 1895 readings with AP consumption of 36.87 MkWh, monthly AP
consumption is more than the maximum permissible energy as per given
load.
d) For the balance 39389 monthly readings Energy Consumption has been
given as 52.47 MkWh.
Therefore, 39389 monthly readings having energy consumption of 52.47 MkWh
is considered by the Commission. The monthly consumption works out to be
1332 units per consumer per month. Applying this on 49326 readings, the same
comes out to 65.71 MkWh, which the Commission approves.
The Commission notes that its directive for 100% metering of all AP
connections fed from urban feeders is pending full compliance since FY 2013-
14. The Commission while reiterating its directions in Directive 5.5(c) of the
Tariff Order for FY 2018-19 has stated that after due validation, consumption of
only metered AP consumers fed from urban feeders shall be considered while
computing AP consumption. The said directive was also reiterated in the Tariff
Order for FY 2019-20. Accordingly, unmetered consumption from Urban
feeders is not being considered. The Commission reiterates its directions to
PSERC – Tariff Order FY 2020-21 for PSPCL 17
PSPCL, to meter all AP consumers being fed from urban feeders without any
further delay.
v) Assessment of T&D losses on AP feeders: To arrive at a more accurate
assessment regarding distribution losses in the AP sector, the Commission, in the
Tariff Orders for FY 2015-16 and FY 2016-17 issued directions to PSPCL to cover at
least 5% of the AP feeders under 100% metering spread across the State and to
calculate T&D losses of these feeders on regular basis. However, in the Tariff Order
for FY 2017-18, theCommission onPSPCL‟s request reduced the size of sample
feeders to 1% and issued directions as under:
“The Commission directs PSPCL to ensure completion of the work of providing 100% meters on at least 1% AP feeders and computation of T&D
losses by engaging an independent agency within time period allotted by the
Commission. In case of delay in completing the job in the allotted time, the
Commission shall assess the losses of AP sector for calculating AP
consumption as the basis of data/information available with the Commission.”
The above directive was also reiterated in Tariff Order for FY 2018-19. During
processing of ARR for FY 2019-20, PSPCL submitted that installation of 100%
meters on 55 (1%) AP Feeders has been completed and engagement of 3rd party to
compute T&D losses on 1% feeders is under progress and will be finalized shortly.
The Commission in the Tariff Order for FY 2019-20 has directed PSPCL that till the
engagement of an independent agency for the subject cited assignment, monthly
readings of AP consumers on 1% sample feeders covered under 100% metering be
recorded departmentally and the computation of losses based on the same be
provided to the Commission along with the data of monthly pumped energy.
However, PSPCL is yet to submit the computed losses of the sample feeders.
As, PSPCL has failed to implement the directions of the Commission and
demonstrate its claim of lower T&D losses on the AP feeders, the Commission
has no option but to continue with the assumption of losses of AP feeders (11
kV and below) in accordance with Regulation 30(2) of the PSERC (Terms &
Conditions of Intra-state Open Access) Regulations, 2011, which specifies that
the customers availing supply at 33/66 KV shall bear 15% of the distribution
losses in addition to transmission losses. Accordingly, losses for AP Feeders
(11kV and below) has been considered as 85% of the target distribution losses.
Accordingly, the Commission determines the AP consumption for Truing-up of FY
2018-19 as under:
PSERC – Tariff Order FY 2020-21 for PSPCL 18
Table 7: AP consumption determined by the Commission for FY 2018-19
Sr. No. Description MkWh
I II III
1.
Energy pumped during the year:
i) 3-phase 3-wire AP feeders 11413.55*
ii) 3-phase 4-wire AP feeders a2.92
iii) Kandi Area mixed feeders feeding AP load b557.47
iv) Kandi Area pure AP feeders 7.40
Total 11981.34
2. Less losses @10.11% (85% of 11.89%) c1210.89
3. Net AP consumption 10770.45
4. Metered AP consumption 65.71
5. Total AP consumption for FY 2018-19 10836.16 * As per the data of pumped energy supplied by PSPCL. aCalculated by multiplying the number of 3-phase 4-wire AP feeders for each month with AP
consumption per feeder for that month of 3-phase 3-wire AP feeders. bCalculated by assuming the AP load on Kandi area mixed feeders feeding mixed load, as 30%.
cThe loss @10.11%(11 kV and below) for FY 2018-19 has been worked out as per the target of
distribution loss of 11.89% fixed in the Tariff Order for FY 2017-18.
Thus, the Commission approves the AP Consumption of 10836.16 MkWh for
True-up of FY 2018-19.
2.2.3 Total Energy Sales
The total energy sales submitted by PSPCL and approved by the Commission for
True up for FY 2018-19 is as under:
Table 8: Total Energy Sales for FY 2018-19 (MkWh)
Sr. No.
Particulars Submitted by
PSPCL Approved by the
Commission for True-up
I II III IV
1. Metered sales within State *36207.26 36207.26
2. AP consumption 11187.39 10836.16
3. Total sales within State 47394.65 47043.42
4. Common pool sale 301.20 301.20
5. **Outside State sale 2268.42 2268.42
6. Total 49964.27 49613.04 *Revised submission **Royalty to HP from Shanan and share of HP in RSD is not considered in sales as it has been excluded
from the net Generation.
2.3 Transmission and Distribution (T&D) Loss Target and Energy Requirement
The Commission in the Tariff Order for FY 2018-19, while retaining the overall loss
target of 14.00% for FY 2018-19 given in the Tariff Order for FY 2017-18 decided to
segregate the same into target of 11.89% for distribution losses for PSPCL
considering the transmission loss level as 2.40%. In the Tariff Order for FY 2019-20,
the Commission decided to consider the intra-State transmission losses for FY 2018-
19 and FY 2019-20 at 2.50%. However, distribution loss target of 11.89% was
retained for FY 2018-19. The Commission decides to consider the same for Truing-
PSERC – Tariff Order FY 2020-21 for PSPCL 19
up of FY 2018-19. Further, PSPCL is considering the NRSE generation available at
66/11 KV of its distribution system also for allowing the transmission losses which is
not in order. The Commission decides to exclude the same as it does not flow
through the intra-State Transmission system.
Accordingly, the energy requirement for FY 2018-19 approved in the Tariff Order for
FY 2019-20, submitted by PSPCL vide its revised submission dated 06.02.2020 and
determined by the Commission after prudence check is as under:
Table 9: Energy Requirement of PSPCL determined by the Commission for FY 2018-19
(MkWh)
Sr. No.
Particulars
Approved in Review by the Commission in
TO for FY 2019-20
Submitted by PSPCL (vide e-mail dated 06.02.2020)
Determined by the Commission with target T&D
losses
Computed by the Commission
with Actual Losses
I II III IV V VI
1. Energy Sales within the State
46678.00 *47392.57 47043.42 47043.42
2. Target Distribution Loss
% 11.89% **14.20% 11.89% 12.94%
MkWh 6298.96 7842.71 6348.27 6994.22
3. Input Energy Required 52976.96 55235.28 53391.69 54037.64
4. Gen. available at 66/11 KV 2080.37 2080.37
5. Input Energy Required (excluding Gen. available at 66/11 KV)
51311.32 51957.27
6.
Target Transmission Loss
% 2.50% Included in
2 above
2.50% 2.50%
MkWh 1358.38 1315.67 1332.24
7. Total Energy Input Required (excluding Gen available at 66/11 KV)
52626.99 53289.51
8. Total Energy Required for sale in the State
54335.34 55235.28 54707.36 55369.88
9. Sales to Common pool consumers
305.40 301.20 301.20 301.20
10. Outside State Sales 1822.94 2268.42 2268.42 2268.42
11. Total Requirement/Trued-up*** at State periphery
56463.68 Say 56464
57804.90 57276.98 ***57939.50
* Energy sales considered by PSPCL is different than indicated figure of 47,394.65 in Table 8 **Including transmission losses ***Trued up availability (Ref Table12)
Accordingly, the Commission approves the total energy requirement of PSPCL at
State periphery as 57276.98 MkWh for True-up of FY 2018-19. However, PSPCL has
submitted a higher figure of 57804.90 MkWh as its actual requirement, which further
increases to 57939.50 MkWh on truing up (Ref Table 12). Considering the trued-up
figure of 47043.42 MkWh as Sales within the State, the actual distribution losses of
PSPCL works out to be 12.94% against the target losses of 11.89%. And,
considering 2.50% as transmission losses, the T&D losses work out to 15.04%. The
impact of the same is discussed in Para 2.6.
PSERC – Tariff Order FY 2020-21 for PSPCL 20
2.4 PSPCL’s Net Thermal Generation
PSPCL’s Submissions: PSPCL has submitted the figures of actual net thermal generation during
FY 2018-19 as 3817.92 MkWh for True-up as follows:
Table 10: Net Generation submitted by PSPCL for FY 2018-19
Sr. No. Station Installed Capacity
(MW) Generation Net
(MkWh) PLF
I II III IV V 1. GGSSTP 210X4=840 1572.82 23.50% 2. GHTP 250X2 + 210X2= 920 2245.10 30.84% 3. Total 1760 3817.92
Commission’s Analysis: The Commission notes that the net energy submitted by PSPCL has been validated
by SLDC vide its Memo No. 1531/32/T-543 dated13.01.2020. Accordingly, the same
has been considered by the Commission for True-up of FY 2018-19.
2.5 PSPCL’s Hydel Generation
The station-wise installed capacity, generation approved in Review by the
Commission in the Tariff Order for FY 2018-19, submitted by PSPCL for true-up and
approved by the Commission for True-up of FY 2018-19 is as under:
Table 11: PSPCL’s Hydel Generation for FY 2018-19
(MkWh)
Sr. No.
Hydel Station Installed
capacity in MW
Approved in Review by the Commission in TO for FY 2019-
20
Submitted by PSPCL for True- up
Approved by the Commission for
True-up
I II III IV V VI 1. Own Generation
i) Shanan 110.00 452 472.38 472.38
ii) UBDC Stage I 45.00 121 104.89 104.89 Stage II 46.35 207 270.72 270.72
iii) RSD 600.00 1434 1454.51 1454.51
iv) MHP Stage I 207.00 1053 1173.73 1173.73 Stage II 18.00 59 77.00 77.00
2. Less: Auxiliary consumption and Transformation losses
31.53 37.92 *32.57
3. Less: HP share in RSD 115.34 60.79 60.79
4. Less: Royalty to HP from Shanan
52.92 52.92 52.92
5. Net own generation 3637.21 3835.99 3841.34
6.
Share from BBMB (Net) i)PSPCL‟sshare 1161 3267.87 3574.61 3574.61 ii) Common pool share 305.40 301.20 301.20 Total Share from BBMB 3573.27 3875.81 3875.81
7. Total hydro generation (Net) (Own + BBMB)
7210.00 7711.80 7717.15
*Transformation losses @0.5%, auxiliary consumption @0.5% for RSD & UBDC stage-1 (having static exciters) and @0.2% for others.
PSERC – Tariff Order FY 2020-21 for PSPCL 21
Accordingly, the Commission approves PSPCL’s net Hydel Generation as
7717.15 MkWh for True-up of FY 2018-19, as shown in the Table above.
2.6 Energy Balance/ Power Purchase
The Commission observes that, the Ministry of Power (GoI) vide Orders dated
30.9.2016 and 14.06.2017 granted waiver of ISTS charges and losses on
transmission of electricity generated from solar and wind resources of energy under
para 6.4(6) of the Tariff Policy, 2016 to the solar and wind projects awarded through
competitive bidding process. Provision for the same was incorporated by CERC in its
Regulations vide CERC (Sharing of Inter State Transmission Charges and Losses)
(Fifth Amendment) Regulations, 2017. However, for FY 2018-19, PSPCL has shown
inter-State losses of 1.71 MkWh and 1.35 MkWh on Solar power received from
NVVN and SECI respectively.
Further, PSPCL has also shown inter-State losses of 126.20 MkWh on its net
banking power. On query, it was informed that, imported as well as exported energy
is settled at regional periphery and no separate losses on resultant net transaction
may be considered. Thus, PSPCL has shown its net power purchase lesser to the
extent of 129.26 MkWh, thereby also underestimating its requirement by this extent.
Accordingly, energy requirement, availability and purchase determined by the
Commission in the Tariff Order of FY 2019-20, submitted by PSPCL for True-up and
approved by the Commission for True-up of FY 2018-19, is as under:
Table 12: Approved Energy Balance/Power Purchase for FY 2018-19
(Net MkWh)
Sr. No.
Particulars Approved by the Commission in
TO for FY 2019-20
Submitted by PSPCL for
True-up
Approved by the
Commission for True-up
I II III IV V
A. PSPCL’s Energy requirement (Table 9) 56464 57804.90 57276.98
B. Energy Available
i)PSPCL‟sownThermal 4275 3817.92 3817.92
ii)PSPCL‟sownHydro(IncludingfromBBMB)
7210 7711.80 7717.15
iii) UI OA 2.65 2.65
Total 11485 11532.37 11537.72
C. Power Purchase (A-B) 44979 46272.52 45739.26
D. Increase in Power Purchase on account of addition of power shown as inter-State losses on import of Solar power and Banking
129.26
E. Excess power purchase made by PSPCL (46272.52+129.26-45739.26)=662.52
F. Actual Energy Input 57939.50
PSERC – Tariff Order FY 2020-21 for PSPCL 22
The balance energy i.e. the (net) requirement for purchase of power from outside
sources works out to 45739.26 MkWh for FY 2018-19 against the actual outside
purchase of 46401.78 (46272.52+129.26) MkWh made by PSPCL. The difference of
662.52 MkWh is attributable to the under achievement of target distribution
losses/normative parameters (refer para 2.3). The issue of disallowance for the same
is discussed in para 2.9.1.
2.7 Norms for Performance Parameters of PSPCL’s Generating Stations
2.7.1 Auxiliary Consumption, Station Heat Rate (SHR) and Secondary fuel
consumption
PSPCL’s submission:
In case of GGSSTP and GHTP, actual Plant load factors for both the plants are much
lower during FY 2018-19, because of partial load operation and backing down.
Frequent stop/start after reserve shutdown and running of units under backing down
affects the performance of units. During backing down, power generation is reduced,
but most of the auxiliaries remain running at nearly full load, which results in an
increase in actual auxiliary consumption.
Regulation 36 of PSERC MYT Regulations, 2014 specifies that the performance
parameters for PSPCL‟s Generating stations shall be as per norms specified by
CERC in its Tariff Regulations.
Furthermore, Regulation 6.3B of CERC (Indian Electricity Grid Code) (Fourth
Amendment) Regulations, 2016 provides for the compensation for auxiliary
consumption and Station Heat Rate on account of part load operations. In view of
CERC Order dated May 5, 2017, Central Generating Stations have been granted
relief on account of part load operation & multi start/stop of units and accordingly are
claiming the compensation charges. In fact, PSPCL is also paying the compensation
charges to Central Generating Stations on this account. However, the same relief
has not been granted to its own thermal generating stations.
*The Commission has considered the availability of power submitted by PSPCL for the purpose of Energy Balance and Power Purchase for FY 2018-19 only. The same should not be construed as the Commission’s approval for procurement of power on long term basis.
PSERC – Tariff Order FY 2020-21 for PSPCL 32
Commission’s Analysis: The Commission observes that the power purchase cost of Rs. 20547.35 Crore
Table 50: Working Capital and interest thereon for Distribution allowed by the Commission for FY 2018-19
(Rs. Crore)
Sr. No. Particulars Amount
I II III
1. O&M Exp for 1 month 346.29
2. Maintenance Charges @ 15% of O&M exp. 623.33
3. Receivables for 2 months 4569.24
4. Less: Average Consumer Security Deposit 3152.41
5. Total Working Capital 2386.45
6. Rate of Interest 9.10%
7. Interest on Working Capital 217.17
Accordingly, the Commission approves Interest on Working Capital of
Rs. 83.35 (65.65+17.70) Crore for FY 2018-19 for Generation Business and
Rs. 217.17 Crore for FY 2018-19 for Distribution Business.
2.19 Return on Equity
PSPCL’s Submission:
PSPCL has submitted the Return on Equity of Rs. 942.62 Crore computed on equity
balance of Rs. 6081.47 Crore at a return rate of 15.5%. The Return on Equity has
been allocated to Generation and Distribution based on Gross Fixed Assets as on
April 1, 2018. PSPCL further submits that the same principle was adopted for
allocation of Return on Equity in the past Petitions.
Commission’s Analysis:
In the ARR, Tariff Petition and Review Petition for FY 2018-19, PSPCL claimed the
Return on Equity of Rs. 942.62 Crore on the base equity of Rs. 6081.43 Crore
against which the Commission had approved RoE of Rs. 942.62 Crore to PSPCL.
The Commission has considered project-wise RoE based on the RoE approved in
True-up of FY 2017-18. As PSPCL did not submit project-wise/ plant-wise equity
during the True-up of FY 2017-18, the allocation was done based on GFA. However,
PSPCL has submitted project report of GNDTP in which it is mentioned that there
had been no infusion of equity in GFA of GNDTP and the same was financed
completely through loans.
In accordance with the Regulation 20 of PSERC MYT Regulations, 2014 (as
amended from time to time), the Commission allows RoE of Rs. 942.62 Crore
@15.5% on the equity of Rs. 6081.43 Crore for FY 2018-19.The project-wise RoE
is given in the following table:
PSERC – Tariff Order FY 2020-21 for PSPCL 54
Table 51: Project wise ROE allowed by the Commission for Generation and Distribution Business for FY 2018-19
(Rs. Crore)
Sr. No. Projects Amount I II III 1. Shanan 2.36 2. UBDC 16.60 3. RSD 151.65 4. MHP 18.76 5. ASHP 12.14 6. Micro 0.50 7. BBMB 11.20 8. Total (Hydro) (A) 213.21 9. GGSSTP 70.16 10. GHTP 88.89 11. Total (Thermal) (B) 159.05 12. Total Generation (A)+(B) 372.26 13. Distribution 570.36
2.20 Other Debits and Extraordinary Items
PSPCL’s Submission
PSPCL has submitted that „Other Debits‟ are items which arise on account of
retrospective changes in material cost variances, bad & doubtful debts written off,
miscellaneous losses and write off etc. PSPCL has recorded „other debits‟ of Rs.
215.00 Crore in the Audited Annual Accounts of FY 2018-19, details of which are
shown in the following table
Table 52: Other Debits claimed by PSPCL as per Audited Annual Accounts of FY 2018-19
(Rs. Crore)
Sr. No. Particulars Amount
I II III
1. Bad & doubtful debts written off 17.93
2. Provision for Bad & doubtful debts 51.53
3. Losses and doubtful debts provided for – Others 89.51
4. Miscellaneous losses and write offs 17.40
5. Loss on a/c of fire at mine W/f 7.18
6. Loss on sale of Assets- Plant & Machinery 31.45
7. Total 215.00
Commission’s Analysis: Regulation49ofPSERCMYTRegulations,2014related to „Bad&DoubtfulDebts‟
states as under:
“49.1 Bad and doubtful debts shall be allowed to the extent the distribution licensee has identified/actually written off bad debts, subject to a maximum of 1% of annual
sales revenue, and according to a transparent policy approved by the Commission.
In case, there is any recovery of bad debts already written off, the recovered bad
debts will be treated as Other Income.
49.2 Other debits including miscellaneous losses and write offs, sundry debts,
material cost variance, losses on account of flood, cyclone, fire etc. shall be
considered by the Commission.” The Commission notes that only the bad and doubtful debts identified/ actually
PSERC – Tariff Order FY 2020-21 for PSPCL 55
written off is to be considered as per the above Regulations.
The amount of Rs. 89.51 Crore considered under the head „Losses and doubtfuldebts provided for – Others‟ relates to amount recoverable from erstwhile
HPSEB,HSEB and UT Administration after the bifurcation of Punjab into Haryana,
Himachal and UT Chandigarh and the same is not allowed by the Commission.
Further, Rs. 7.18 Crore claimed by PSPCL on account of fire at mine is also
disallowed by the Commission as the business of Pachwara mine is not a part of
PSPCL‟sGenerationorDistributionBusiness.
The Commission allows Rs. 118.31(215.00-89.51-7.18) Crore as other debits
and extraordinary items for FY 2018-19.
2.21 Charges Payable to GoP on RSD
In the current Petition, PSPCL has claimed Rs. 12.60 Crore for FY 2018-19 as
royalty charges payable to Government of Punjab on power from RSD (under
Generation Business).
The Commission approves royalty charges of Rs. 12.60 Crore for FY 2018-19 as
claimed by PSPCL.
2.22 Non- tariff Income
In the Tariff Order for FY 2018-19, the Commission had approved Non-Tariff Income
of Rs. 1046.26 Crore. In the Review of FY 2018-19, the Commission revised the
Non-Tariff Income to Rs. 922.45 Crore.
PSPCL’s Submission:
In the True-Up Petition for FY 2018-19, PSPCL has submitted Non-Tariff Income of
Rs. 1127.42 Crore details of which are given in the following table:
Table 53: Non-Tariff Income for FY 2018-19 as claimed by PSPCL (Rs. Crore)
2018, Review Petition No 6 of 2019 and of unadjusted revenue gap of
transmission charges, Gap Surplus(+)/Deficit(-) upto FY 2017-18 is re-
determined as under:
Table 62: Net revenue Requirement of Distribution Business of PSPCL for FY 2017-18
(Rs. Crore)
Sr. No.
Items of Expenses Amount approved in
Tariff Order dated 27
th May, 2019
Finally approved by the Commission
after impact
I II III IV
1. Cost of power purchase 16,933.38 16,933.38
2. Employee Cost 3,744.51 3,744.51
3. R &M and A&G expenses 290.37 290.37
4. Depreciation 797.94 797.94
5. Interest & Finance charges 1100.81 1100.81
6. Return on Equity 493.50 493.50
7. Cost of Generation 3820.74 3,812.03
8. Transmission charges payable to PSTCL 1174.99 1,182.05*
9. Provision for DSM 0.00 0.00
10. Other Debits 29.39 29.39
11. Prior Period Expenses -230.78 -230.78
12. Incentive on Loss reduction 0 0
13. Total Revenue Requirement 28154.85 28,153.20
14. Less: Non-Tariff Income 922.45 922.45
15. Net Revenue Requirement 27232.40 27,230.75
16. Revenue from existing tariff 28778.92 28,724.04
17. Gap: Surplus(+)/ Deficit(-) for FY 2016-17 (+)1546.52 (+)1493.29
18. Gap: Surplus(+)/ Deficit(-) upto FY 2016-17 (as per table 3.14 of Tariff Order dated 23.10.2017)
(-)2252.13 (-)2252.13
19. Carrying Cost on FY 2016-17 Gap (as per table 5.66 of Tariff Order dated 23.10.2017)
(-)465.13 (-)465.13
20. Carrying cost on Revenue Gap during the year(half year)
289.51 289.51
21. Gap Surplus (+)/Deficit (-) upto FY 2017-18 -881.23 -934.46 * This includes carrying cost of Rs.7.06 Crore for FY 2016-17 & FY 2017-18 payable to PSTCL.
PSERC – Tariff Order FY 2020-21 for PSPCL 64
Subsidy payable by Govt of Punjab for FY 2017-18 determined as Rs. 8080.60 (page
71 of Tariff Order of FY 2019-20) Crore is re-determined as Rs 8025.72 Crore.
Accordingly, interest on delayed payment of subsidy is re-determined as Rs 461.29
Crore against Rs 463.85 Crore determined (page 71) in Tariff Order for FY 2019-20.
Total subsidy ending 31.03.2018 works out to Rs. 11405.68 Crore.
2.29 Revenue from sale of power
2.29.1 In the petition, PSPCL has submitted the assessed revenue as Rs. 30665.40 Crore
for true up of FY 2018-19. On perusal, it was observed that PSPCL has reported the
revenue from Fixed charges for the year as only Rs. 1373.75 Crore (Format D-24A),
whereas for the first half itself of FY 2019-20 the actual revenue from Fixed charges
was coming to Rs. 1101 Crore (Format D-25). Thus, PSPCL was asked to check the
discrepancy. In reply thereof, PSPCL vide its letter 84/ARR/Dy.CAO/256/Deficiencies
dated 16.01.2020, furnished the revised Format with submission as under:
“….. that misclassification in fixed charges and energy charges have been reconciled.
The fixed charges have been revised from RS. 1373.25 Crore to Rs. 2067.78 Crore.
However, the total revenue across the category remains the same.”
2.29.2 In view of the above, the Commission decided to work out the assessment for FY
2018-19 and accordingly asked PSPCL to furnish the category-wise, sub-category
wise and slab-wise sales figures as per the formats specified to be submitted with the
ARR petition. The matter regarding pending replies by PSPCL to deficiencies/queries
raised by the Commission was taken up for hearing on 06.02.2020 wherein after
hearing PSPCL, the Commission in its Order dated 07.02.2020 observed as under:
“….
PSPCL’s submission that sub-category wise and slab-wise sales and revenue figures
for FY 2018-19 are not available, cannot be accepted, as the tariff and billing of
consumers is sub-category wise and slab-wise.
In view of timelines specified in the PSERC MYT Regulations, 2014, regarding the
processing and issuance of Tariff Order, the Commission is of the view that delay in
furnishing of the requisite information by PSPCL is not acceptable. Accordingly,
PSPCL is directed to furnish all the pending information by 10.02.2020 (Monday),
failing which, the Commission shall be constrained to process the ARR petition on the
basis of data available with the Commission.” 2.29.3 In compliance to the above said Order of the Commission, PSPCL vide letter No. 270
dated 12.02.2020 submitted the category/slab/unit wise data for FY 2018-19 on pro
rata basis as per the slab wise unit wise actual data of FY 2019-20 H1, with
submission as under:
"Prior to 2018-19, the format in which data was required by PSERC, there was no
such requirement of slab wise data, hence the report was designed accordingly and
prior to that the data in slab wise is not available. Billing of consumers is being carried
slab wise in system, but slabs were not being stored for reporting purpose as there
PSERC – Tariff Order FY 2020-21 for PSPCL 65
had been no such requirement. Later when the requirement of slab wise data was
raised, the provision in system to store slab wise information for reporting purpose
had been developed and report was also redesigned as per the new Slab Wise
Format. The report was made available from 01.01.2019….” 2.29.4 Based on the above sales data submitted by PSPCL (with correction for AP
consumption figures as approved by the commission for true-up) and the tariff rates
applicable during the period, the revenue assessment for FY 2018-19 (considering
Surcharges/Rebates, other charges, FCA and revenue from sale of power to outside
State/commonpoolasperPSPCL‟ssubmissionsinthepetition)worksouttobeRs.31893.91 Crore, which is Rs. 1228.50 Crore more than the PSPCL submission.
Accordingly, the Commission vide letter no. 2787/PSERC/Dir./Tariff dated
18.02.2020 directed PSPCL to explain the difference in revenue assessment by
24.02.2020 and it was apprised to PSPCL that in case PSPCL could not explain the
difference by the said date, the Commission will proceed as per its own calculations.
No reply in this regard was received from PSPCL. The matter was further taken up
for hearing by the Commission on 04.03.2020. During the hearing also, PSPCL could
not justify the reason(s) for under assessment of revenue for FY 2018-19 except that
it is as per the annual audited accounts. Accordingly, the Commission in its Order
dated 06.03.2020 observed as under:
“With regard to the query of the Commission on the difference of revenue of Rs. 1228.50 Crore for FY 2018-19 as submitted by PSPCL and as approved in the tariff Order by the Commission, PSPCL has submitted, vide memo No. 411/ARR/DY.CAO//256 dated 04.03.2020, that the revenue submitted by PSPCL is as per the annual audited accounts and the Commission may consider the revenue as submitted in the petition. During hearing, the representatives of PSPCL could not satisfy the Commission on the issue of difference of revenue, and the issue will be decided by the Commission as per the facts available on the record.”
2.29.5 As evident, despite the numerous opportunities given, PSPCL could not justify the
under assessment of revenue by it for FY 2018-19. The Commission is of the view
that since assessed revenue submitted by PSPCL is not commensurate with the
sales figures and the tariff approved by the Commission for different categories of
consumers for FY 2018-19, the revenue assessment submitted by PSPCL cannot be
accepted.
In view of the above and after considering the facts available on record, the
Commission decides to rework the revenue assessment by applying tariff rates
as per Tariff Order of FY 2018-19 on the trued-up figures of energy sales (with
slab-wise/sub-category wise figures of sales as provided by PSPCL) and
considering surcharge/rebate and revenue from theft and FCA as submitted by
PSPCL, which works out to be Rs. 31846.97 Crore. Details of the calculations
and comparison of the same with the submission of PSPCL are placed at Table
63 and Table 63A respectively. Further, the Commission directs PSPCL to
maintain historical data for slab-wise, sub-category wise and category wise
Revenue Assessment vis-à-vis Sales, at least till the final disposal of true-up
petition for the relevant year.
PSERC – Tariff Order FY 2020-21 for PSPCL 66
Table 63: Revenue from Sale of Power approved by the Commission for FY 2018-19
(Rs. Crore)
Sr. No.
Description
Submitted by PSPCL Revenue as assessed by the Commission
13. Total Metered Sales 20083.83 *16723.31 *36807.26 19688.60 16724.14 36412.75
(Say 36413)
* Incorrect total figures.
The Commission decides to consider the revised projected sales figures furnished by
PSPCL for FY 2019-20.
Thus, the Commission approves the revised estimates for metered energy
sales within State as 36413 MkWh for review of FY 2019-20.
3.2.2 AP Consumption
Against the estimated AP consumption of 11521 MkWh approved by the Commission
in Tariff Order for FY 2019-20, PSPCL has submitted the revised estimate of
12333.24 MkWh for APR of FY 2019-20.
PSPCL’s submissions: For estimation of AP consumption for FY 2019-20, PSPCL has considered the actual
AP consumption for H1 of FY 2019-20 based on pumped energy methodology. As
submitted in the previous chapter for True-up of FY 2018-19, PSPCL has calculated
the AP consumption of Kandi area mixed feeders as 45.64% of the total
consumption. For H2 of FY 2019-20, AP consumption has been estimated by
applying 5 Year CAGR of 2.02% on the AP consumption for H2 of FY 2018-19.
Table 2: Total AP Consumption submitted by PSPCL for FY 2019-20
(MkWh)
Sr. No. Consumer Category H1 H2 Total
I II III IV V
1. AP consumption 9521.36 2811.88 12333.24
PSERC – Tariff Order FY 2020-21 for PSPCL 73
Commission’s Analysis: Submissions made by PSPCL in respect of assessment of AP consumption and
observation by the Commission on the same has been discussed in detail under para
2.2.2 of this Tariff Order.
The Commission has assessed the AP consumption for H1 of FY 2019-20 on the
same methodology as followed in the chapter 2 of this Tariff Order, on the basis of
pumped energy data supplied by PSPCL. For H2 of FY 2019-20, the Commission
decides to provisionally accept the figure estimated by PSPCL, which shall be
revisited during true-up on receipt of AP consumption data for the complete year.
Accordingly, the AP consumption submitted by PSPCL and that estimated by the
Commission for review of FY 2019-20 is as follows:
Table 3: AP Consumption approved by the Commission for FY 2019-20
(MkWh)
Sr. No.
Description Submitted by PSPCL
Approved by the Commission
I II III IV
1.
Energy pumped during H1 of FY 2018-19
i) 3-phase 3-wire AP feeders 9835.27 *9832.50
ii) 3-phase 4-wire AP feeders 1.40 a
1.17
iii) Kandi Area mixed feeders feeding AP load 612.21 b
402.44
iv) Kandi Area pure AP feeders 6.89 6.89
Total 10455.77 10243.0
2. Less losses @9.81%c (85% of 11.54) 1025.71
c1004.84
3. Metered AP consumption 91.30 66.00
4. Net AP consumption for H1 of FY 2019-20 9521.36 9304.16
5. Estimated AP consumption for H2 of FY 2019-20 2811.88
2811.88
6. Total AP consumption for FY 2019-20
12333.24 12116.04 (Say 12116)
* As per the data of pumped energy supplied by PSPCL a. Calculated by multiplying the number of 3-phase 4-wire AP feeders for each month with AP consumption per
feeder for that month of 3-phase 3-wire AP feeders. b. Calculated by considering the AP load on Kandi area mixed feeders feeding mixed load, as 30%. c. The loss @9.81% (11 kV and below) for FY 2019-20 has been worked out as per the distribution loss target of
11.54% fixed in the Tariff Order for FY 2019-20.
Thus, the Commission approves the revised estimates for AP Consumption as
12116 MkWh for review of FY 2019-20. The Commission shall re-assess the
same at the time of true up of FY 2019-20 based on the actual figures available
and after considering the efforts/physical progress made by PSPCL regarding
the compliance of various directives given by the Commission.
3.2.3 Common Pool/Outside State Sales
For FY 2019-20, PSPCL has projected sales to common pool consumers as 306.21
MkWh and outside State sale as 2341.81 MkWh.
The Commission decides to accept the figure of 306 MkWh for Common Pool sales
for FY 2019-20. However, in view of PSPCL’s actual outside State Sales of 379
PSERC – Tariff Order FY 2020-21 for PSPCL 74
MkWh in H1 of FY 2019-20, the Commission feels it prudent to consider the outside
State sales for FY 2019-20 as 758 MkWh i.e. twice the value of actual sales during
H1 of FY 2019-20.
3.2.4 Total Energy Sales
The total energy sales as per PSPCL’s submission and revised by the Commission
for FY 2019-20 are as follows:
Table 4: Total energy sales approved by the Commission for FY 2019-20
(MkWh)
Sr. No.
Particulars
FY 2019-20
As per PSPCL’s submission
*Approved by the Commission
I II III IV
1. Metered sales within State 36412.75 36413
2. AP consumption 12333.24 12116
3. Total sales within State 48745.99 48529
4. Common pool sale 306.21 306
5. Outside State sale 2341.81 758
6. Total 51394.01 49593 *Rounded off
3.3 Transmission & Distribution Losses and Energy Requirement
3.3.1 Transmission & Distribution Losses
PSPCL’s Submissions: PSPCL submitted that, for the purpose of APR for FY 2019-20, it has projected T&D
Losses of 14%, after considering the actual T&D Loss of 16.34% for FY 2017-18 and
14.17% for FY 2018-19.
Commission’s Analysis: In the 1st MYT Tariff Order issued in FY 2017-18, the Commission had accepted the
T&D loss trajectory projected by PSPCL as 13.75% for FY 2019-20. Further, on the
request of PSPCL to set separate target of losses for PSTCL and PSPCL, the
Commission in the Tariff Order for FY 2019-20 while retaining the overall T&D target
loss of 13.75%, approved the target of 11.54% for distribution losses considering
2.50% as transmission losses. The Commission decides to retain the same for
review of FY 2019-20.
3.3.2 Energy Requirement
As discussed in para 2.3, the Commission has not considered generation/RE power
available at 66/11 KV of PSPCL’s distribution system for allowing the transmission
losses. The energy requirement for FY 2019-20 approved by the Commission in the
PSERC – Tariff Order FY 2020-21 for PSPCL 75
Tariff Order for FY 2019-20, submitted by PSPCL for review and approved by the
Commission is as follows:
Table 5: Energy Requirement for FY 2019-20 (MkWh)
Sr.
No. Particulars
Approved by the
Commission in
TO of FY 2019-20
Submitted by
PSPCL vide E-
mail dated
02.03.2020
Approved by
Commission
for APR
I II III IV V
1. Energy Sales within the State 48943 **48754.74 48529
2. Target Distribution Loss % 11.54% *14.00% 11.54%
MkWh 6384.83 7936.82 6331
3. Input Energy Required 55327.83 56691.55 54860
4. Gen. /RE power available at 66/11 KV
2233
5. Input Energy Required (excluding Gen./RE Power available at 66/11 KV)
52627
6. Target Transmission
Loss
% 2.50% included in 2 above
2.50%
MkWh 1418.66 1349
7. Total Energy Input Required (excluding Gen./RE Power available at 66/11 KV)
53976
8. Total Energy Input Required 56746.49 56691.55 56209
9. Sales to Common pool consumers 309.30 306.21 306
10. Outside State Sales 900.00 2341.81 758
11. Total Requirement 57955.79 59339.57 57273
*Including Transmission losses **PSPCL has computed the Energy Requirement by considering sales of 48754.74 MkWh whereas the figure as per Table4 is 48745.99 MkWh.
Accordingly, the Commission approves the energy requirement of 57273 MkWh
for FY 2019-20.
3.4 PSPCL’s Net Thermal Generation
PSPCL’s Submissions:
PSPCL has considered the actual Generation for H1 of FY 2019-20. For H2, power
availability from State’s own thermal Generating Stations has been projected on the
basis of various performance parameters such as plant load factor, gross generation
and auxiliary consumption. PSPCL submitted that, it has undertaken consistent and
regular maintenance apart from timely renovation and overhaul of its units to sustain
the generation from each of these power plants at the target output level set by the
CEA. The Net Thermal Generation for FY 2019-20 approved by the Commission in the
Tariff Order for FY 2019-20 and submitted by PSPCL in APR is as follows:
PSERC – Tariff Order FY 2020-21 for PSPCL 76
Table 6: Thermal Generation (Net) submitted by PSPCL (MkWh)
Sr. No.
Station Installed
Capacity (MW)
Approved by the Commission in TO
of FY 2019-20
Submitted by PSPCL for APR
I II III IV V
1. GGSSTP 4x 210 = 840 1868.03 1740.35
2. GHTP 2(250+210)= 920 2491.69 1628.50
3. Total 1760 4359.72 3368.85
Commission’s Analysis:
The Commission accepts the net thermal generation projections from PSPCL’s own
plants as 1740 MkWh and 1629 MkWh for GGSSTP and GHTP respectively for FY
2019-20.
3.5 PSPCL’s Hydel Generation
PSPCL’s Submissions:
The availability from own Hydel plants has been estimated based on the actual
generation during H1 of FY 2019-20 and revised generation targets for H2 of FY
2019-20. PSPCL has also considered Royalty to HP from Shanan and Share to HP
from RSD for FY 2019-20 (H2). The share to J&K from RSD has been considered
from January 2019 onward.
Commission’s Analysis:
The Commission accepts the station-wise gross hydel generation submitted by
PSPCL (after rounding off). However, the Commission observes that PSPCL has
considered 50 MkWh from its Hydel generation as J&K share in RSD. Whereas, in its
reply to Objection No.11, Issue 7(1) submitted vide memo no428/ARR/Dy.
CAO/256/Obj.No.11 dated 06.03.2020, PSPCL has submitted that it has not yet
started supplying the J&K share of power from RSD, as there are technical
constraints on the J&K side for receiving power but presently RSD is being run on full
capacity and PSPCL is utilizing the full power from RSD. Hence, the Commission has
considered supply to J&K from RSD as NIL for FY 2019-20. Accordingly, hydel
generation approved by the Commission is as follows:
PSERC – Tariff Order FY 2020-21 for PSPCL 77
Table 7: PSPCL's Hydel generation approved by the Commission for FY 2019-20
(MkWh)
Sr. No. Station
Submitted by PSPCL for APR
Revised by PSPCL vide email dated 04.03.2020
Approved by the
Commission for APR
I II III IV V
1. Shanan 537.60 537.60 538
2. UBDC Stage I 159.88 159.88 160
Stage II 253.38 253.38 253
3. RSD 1899.45 1899.45 1899
4.
MHP Stage I
Stage I 1152.60 1152.60 1153
Stage II 96.84 96.84 97
5. ASHP 687.06 687.06 687
6. Micro Hydel 10.44 10.44 10
7. Total own generation (Gross) 4797.25 4797.25 4797
8. Less: Auxiliary consumption and Transformation Loss
39.76 37.31 40*
9. Less: HP share in RSD 74.28 74.28 74
10. Less: J&K share in RSD 50.00 50.00 -
11. Less HP Royalty in Shanan 52.92 52.92 53
12. Total own generation (Net) 4580.29 4582.74 4630
13. PSPCL share from BBMB
(a) PSPCL share excluding common pool share (Net)
4168.61 4333.58 4334
(b) Add Common pool share 306.21 306.21 306
14. Net share from BBMB 4474.82 4639.79 4640
15. Total hydro availability (Net) (Own + BBMB)
9,055.12 9222.54 9270
*Transformation loss @0.5%, Auxiliary consumption @0.5% for RSD and UBDC stage-I (having static exciters) and @0.2% for others.
The Commission, thus, approves the revised estimates for PSPCL’s own net hydel generation as 9270 MkWh for review of FY 2019-20.
3.6 Energy Balance/Purchase (Net) required
The energy requirement, PSPCL’s own Generation availability and purchase (Net)
required from outside sources submitted by PSPCL in the APR and approved by the
Commission is as follows:
Table 8: Energy Balance approved by the Commission for FY 2019-20 MkWh
Sr. No. Particulars Submitted by
PSPCL Approved by the Commission**
I II III IV
1. Energy requirement (Table 5) 59339.57 57273
2.
i) PSPCL’s Thermal Gen 3368.85 3369
ii) PSPCL’s Hydel Gen 9222.54 9270
Total 12591.39 12639
3. UI (Open Access) 3.62 4
4. Purchase (net) *46744.56 44630 *In view of sales revised for H1 by PSPCL, figure does not match with the power purchase of 47193.13 MkWh submitted by it in Format D3 vide additional submission dated 14.02.2020. **Rounded off
PSERC – Tariff Order FY 2020-21 for PSPCL 78
Thus, the Commission approves the purchase (net) requirement of PSPCL as
44630 MkWh for APR of FY 2019-20.
3.7 Norms of Operation for Own Thermal Generating Stations
PSPCL’s submission: PSPCL submitted that it has already discussed the issue of part load operation in its
submission in previous chapter for True-up regarding the Auxiliary Consumption,
Station Heat Rate and Secondary Fuel Oil Consumption. PSPCL’s own thermal
Generating stations are to be operated as per the Merit Order Dispatch and thus
remained under reserve outage/backing down for maximum time as per directions of
Power Controller, Patiala. During frequent stop/start after reserve outage and running
of units under backing down affects the performance of units. In view of this, PSPCL
has considered the performance parameters as under:
Table 9: Performance Parameters submitted by PSPCL for FY 2019-20
3. Station Heat Rate (kCal/kWh) 2801 2576 2847 2576
4. Secondary Fuel Oil Consumption (ml/kWh)
1.82 1.50 1.81 1.10
5. Transit Loss -0.47% 0.8% -0.81% 0.8%
Commission’s Analysis:
The Commission observes that submissions made by PSPCL seeking relaxed norms
for performance parameters i.e. auxiliary consumption, SHR, secondary fuel oil
consumption and transit loss are same as submitted in the Chapter of True up of FY
2018-19, the same has been already discussed in detail under para 2.7.1 and 2.7.2
of this Tariff Order. Further, Regulation 36 of the PSERC MYT Regulations, 2014
specifies that norms for performance parameters shall be in accordance with CERC
norms.
Thus, for FY 2019-20, the Commission decides to consider the normative
performance parameters i.e. auxiliary consumption, SHR, secondary fuel oil
consumption and transit loss as specified in CERC Tariff Regulations, 2019 as
follows:
PSERC – Tariff Order FY 2020-21 for PSPCL 79
Table 10: Performance Parameters considered by the Commission for FY 2019-20
Sr. No. Parameters GGSTP GHTP
I II III IV
1. Auxiliary Consumption % 8.50 8.50
2. Station Heat Rate kCal/ kWh 2430 Unit:I-III 2430
Unit: IV 2387
3. Oil Consumption ml/kWh 0.50 0.50
4. Transit Loss % 0.80 0.80
3.8 Fuel Cost
PSPCL’s Submissions:
Fuel Cost for APR of FY 2019-20 is given as under:
Table 11: Fuel Cost submitted by PSPCL for FY 2019-20
Sr. No.
Particulars Submitted by PSPCL in APR
GGSSTP GHTP Total
I II III IV V
1. Fuel Cost (Rs. Cr.) 643.35 645.81 1289.16
2. Cost of Generation (Rs./kWh) 3.34 3.58 -
PSPCL has considered actual Fuel Cost for H1 of FY 2019-20, while for H2 of FY
2019-20 it is based on actual weighted average Gross Calorific Value and Price of
Fuels for H1 of FY 2019-20. The estimates of fuel cost by PSPCL are based on
following parameters:
Table 12: Cost Parameters submitted by PSPCL for FY 2019-20
Particulars Unit FY 2019-20
H1 H2
I II III IV
GGSSTP
GCV of Coal kCal/kg 4014.00 4014.00
Price of Coal Rs./MT 4831.48 4952.27
GCV of Oil kCal/kL 9900.00 9900.00
Price of Oil Rs./kL 43006.18 43006.18
GHTP
GCV of Coal kCal/kg 4003.00 4100.00
Price of Coal Rs./MT 5233.00 5363.83
GCV of Oil kCal/kL 9500.00 9500.00
Price of Oil Rs./kL 40100.00 40100.00
Commission’s Analysis:
Fuel cost being a major item of expense, the Commission thought it prudent to get
the same validated for H1 of FY 2019-20. During validation, it was observed that,
PSERC – Tariff Order FY 2020-21 for PSPCL 80
PSPCL has also included the following O&M cost in the Fuel costs of GGSSTP and
GHTP:
A. GGSSTP
Rs. 1.02 Crore on account of R&M of machinery used in coal handling plant
B. GHTP
Coal handling contract cost of Rs. 3.63 Crore
Rs. 0.10 Crore on account of Salary of Mine Manager and Counsel fee
engaged for defending case relating to Pachhwara Central Coal Mine.
The Commission observes that the R&M and Employee (coal handling contract)
costs of coal handling plant are components of fixed cost of the projects and do not
form part of the landed cost of fuel. Secondly, coal mining is a separate business and
is required to be accounted for separately.
Further, the GCV of coal has been considered on received coal as per CERC Tariff
Regulations, 2019. The price/calorific value of oil & coal as per validation obtained by
the Commission are indicated in Table 13. The Commission decides to consider the
same to determine the fuel cost for PSPCL’s thermal Generating stations. However,
in respect of cost of coal for H2 of FY 2019-20, keeping in view the increasing trend
of fuel and freight charges, the Commission has considered a 5% escalation over the
cost of coal for H1 of FY 2019-20.
The Cost Parameters considered by the Commission for working out the fuel cost are
as follows:
Table 13: Cost Parameters considered by the Commission for FY 2019-20
Sr. No. Parameters GGSTP GHTP
I II III IV
1. GCV of coal* kCal/kg 4113 3968
2. CV of Oil kCal/lt 9522 9429
3. Price of Oil Rs./ KL 43006.18 40099.00
4. Price of coal H1
Rs./MT 4827.14** 5364.40
H2 5068.50 5632.62
*Weighted Average Gross calorific value of coal as received less 85 Kcal/Kg on account of variation during storage at generating station as per Regulation 40 and 43(2)(a) of the CERC Tariff Regulations, 2019
**GGSSTP Ropar is having lower coal price due to adjustment of Rs. 30.88 Crore received from Coal companies during FY 2019-20, resulting in lower ECR computation of its generation in the Table 14
Based on the above parameters, the fuel cost for FY 2019-20 has been worked out
as follows:
PSERC – Tariff Order FY 2020-21 for PSPCL 81
Table 14: Fuel Cost for GGSSTP approved by the Commission for FY 2019-20
Sr. No. Item Derivation Unit GGSSTP (FY 2019-20)
H1 H2 Total
I II III IV V VI V
1. Net Generation A MkWh 896 844 1740
2. Auxiliary Consumption B 8.50% 8.50% 8.50%
3. Gross Generation C MkWh 979.23 922.40 1901.63
4. Heat Rate D kcal/kWh 2430 2430
5. Specific oil consumption E ml/kWh 0.50 0.50
6. Calorific value of oil F kcal/litre 9522 9522
7. Calorific value of coal G kcal/kg 4113 4113
8. Overall heat H= (C x D) Gcal 2379528.90 2241432.00
9. Heat from oil I = (C x E x F) / 1000
Gcal 4662.11 4391.55
10. Heat from coal J = (H-I) Gcal 2374866.79 2237040.45
11. Oil consumption K= (Ix1000)/F KL
489.61
461.20
12. Transit loss of coal L (%) 0.80% 0.80%
13. Total coal consumption excluding transit loss
M= (J*1000) /G MT 577405.01 543895.08
14. Quantity of Imported/ captive coal priced on FOR basis
N MT 0.00 0.00
15. Quantity of coal not priced on FOR basis
O=M-N MT 577405.01 543895.08
16. Quantity of coal not priced on FOR basis including transit loss
P=O/(1-L/100) MT 582061.50 548281.33
17. Total quantity of coal required
Q=N+P MT 582061.50 548281.33
18. Price of oil R Rs./KL 43006.18 43006.18
19. Price of coal S Rs./MT 4827.14 5068.50
20. Total Cost of oil T=R x K / 10^7 Rs. Cr. 2.11 1.98 4.09
21. Total Cost of coal U=Q x S/10^7 Rs. Cr. 280.97 277.89 558.86
22. Total Fuel cost V=T+U Rs.Cr. 283.08 279.87 562.95
23. Per unit Cost (gross) W=V*10/C Rs./kWh 2.891 3.034 2.960
24. Per unit Cost (Net) X=V*10/A Rs./kWh 3.159 3.316 3.235
PSERC – Tariff Order FY 2020-21 for PSPCL 82
Table 15: Fuel Cost for GHTP approved by the Commission for FY 2019-20
Sr. No.
Item Derivation Unit
GHTP (Unit I, Unit II & Unit III)
GHTP (Unit IV) GHTP
H1 H2 H1 H2 Total
I II III IV V VI VII VIII IX
1. Net Generation A MkWh 649 698 135 147 1629
2. Auxiliary Consumption
B 8.50% 8.50% 8.50% 8.50% 8.50%
3. Gross Generation C MkWh 709.29 762.84 147.54 160.66 1780.33
4. Heat Rate D kcal/kWh 2430 2430 2387 2387
5. Specific oil consumption
E ml/kWh 0.50 0.50 0.50 0.50
6. Calorific value of oil F kcal/litre 9429 9429 9429 9429
13. Disallowance of penalty deposited by PSPCL on account of non compliance of RPO
(-) 0.01
14. Total Revenue Requirement 32757.55 35074.91 32572.19
15. Less: Non-Tariff Income 922.45 1127.42 1029.26
16. Net Revenue Requirement 31835.10 33947.49 31542.93
* Employee Cost and R&M and A&G expenses include O&M expenses of PSPCL’s share in BBMB. These figures are based on normative as per PSERC MYT Regulations, 2014 (as amended from time to time) and will be reviewed at the time of True up for FY 2019-20.
3.31 Revenue from Sale of Power
In the current Petition, PSPCL has projected revenue from sale of power at Rs.
31757.54 Crore for FY 2019-20. The Commission has assessed the revenue as
follows:
PSERC – Tariff Order FY 2020-21 for PSPCL 106
Table 46: Revenue from Sale of Power approved by the Commission for FY 2019-20
14. Outside State Sale 758 0.00 187.23 0.00 0.00 187.23
15. Total 49593 2366.83 29224.12 96.60 -241.59 31445.96
*Rounded off
The Commission approves revenue from sale of power at Rs. 31445.96 Crore
for FY 2019-20 in Distribution Business of PSPCL.
3.32 Revenue Gap for FY 2019-20
Accordingly, the Cumulative Gap upto FY 2019-20 has been worked out as under:
Table 47: Cumulative Gap (Surplus)/ Deficit upto FY 2019-20
(Rs. Crore)
Sr. No.
Particulars Claimed by
PSPCL Allowed by the Commission
FY 2019-20
I II III IV
1. Net Revenue Requirement 33947.49 31542.93
2. Revenue from existing tariff 31757.54 31445.96
3. Gap: (Surplus)/ Deficit during FY 2019-20 2189.95 96.97
4. Cumulative Gap: (Surplus)/ Deficit up to FY 2018-19
3715.89 (515.80)
5. Add: Carrying cost for Revenue gap for FY 2019-20
241.53
6. Cumulative Gap: (Surplus)/ Deficit up to FY 2019-20
6147.37 (418.83)
The Cumulative Gap/ (Surplus) up to FY 2019-20 is thus determined at Rs. (418.83)
Crore.
3.33 Subsidy payable by GoP for FY 2019-20
The Commission has worked out the category wise subsidy payable by GoP for FY
PSERC – Tariff Order FY 2020-21 for PSPCL 107
2019-20 as under:
Table 48: Subsidy estimated for different Categories for FY 2019-20
(Rs. Crore)
Sr. No.
Consumer Category Estimated by the
Commission
I II III
1. AP Consumers 6373.02
2. Surcharge on AP Consumption @30 paise per kWh as per PSERC Order dated 24.12.2019 in Petition no. 25/2019
29.34
3. Scheduled Caste (SC) / Domestic Supply (DS) free power consumers
1395.35
4. Non-SC/BPL DS consumers 86.97
5. Backward class DS consumer free power consumers 116.15
6. Small Power (concessional tariff @ Rs.499 paise per unit) consumers
171.57
7. Freedom fighter consumers 0.83
8 Medium Supply Consumers 159.30
9. LS supply consumers 1521.09
10 Total 9853.62
Interest on delayed payment of subsidy: The GoP has paid Rs. 9394.11 Crore
subsidy to PSPCL during FY 2019-20 in staggered instalments. Thus, there is
shortfall of Rs. 459.51 (9853.62 - 9394.11) Crore. Thus, the total shortfall is of Rs.
5360.20 (4900.69+459.51) Crore in subsidy paid by GoP by 31st March, 2020. The
Commission observed that there was delay in payment of subsidy to PSPCL in FY
2019-20. With a view to compensate PSPCL on this account, the Commission levies
interest on the delayed payment of subsidy @ 9.10% (effective rate of interest on
working capital loan) which works out to Rs. 418.85 Crore.
Accordingly, the subsidy payable for FY 2019-20, inclusive of interest on
delayed payment of subsidy, has been determined by the Commission at
Rs. 15173.16 (9853.62+418.85+4900.69) Crore against which GoP had paid
subsidy of Rs.9394.11 Crore. As such, there is shortfall in subsidy of
Rs. 5779.05 (15173.16-9394.11) Crore ending FY 2019-20. This has been carried
forward to para 7.4.
PSERC – Tariff Order FY 2020-21 for PSPCL 109
Chapter 4
Aggregate Revenue Requirement for 2nd
MYT Control Period FY 2020-21 to FY 2022-23
4.1 Background
The Commission has notified the PSERC (Terms and Conditions of Determination of
Generation, Transmission, Wheeling and Retail Supply Tariff) Regulations, 2019
(also called “PSERC MYT Regulations, 2019”) for the 2nd MYT Control Period from
FY 2020-21 to FY 2022-23. In this petition PSPCL has filed the ARR for the same,
along with True-up for FY 2018-19 and APR for FY 2019-20 with the submission that,
its projections are based on the capital expenditure as per the Capital Investment
Plan (CIP) submitted before the Commission. PSPCL stated that, it has also
considered the past trends, regulatory norms and activities planned and taken up
during the previous control period for projecting the expenses.
PSPCL submitted additional submission vide memo 362 dated 14.02.2020, stating
that it is revising its ARR on the basis of CIP and T&D Loss Trajectory approved by
the Commission vide Order dated 03.12.2019 in Petition No. 18 of 2019. PSPCL also
revised its projections for Power Purchase Cost and Transmission Charges payable
to PSTCL stating that same are now being projected on the basis of energy charge
rate of November 2019.
The Commission has analysed the same in this Chapter. The Commission‟s Order
dated 03.12.2019 in Petition No. 18 of 2019, shall be deemed to be amended to the
extent of revised projections of Energy Sales, T&D Losses, CIP, Capitalisation etc.
approved in this petition.
4.2 Energy Demand (Sales)
4.2.1 Metered Energy Sales within the State
PSPCL’s submissions:
PSPCL has projected the energy sales for the 2nd MYT Control period after analysing
actual sales data from FY 2013-14 to FY 2018-19 and CAGR for different periods as
shown in the following table:
PSERC – Tariff Order FY 2020-21 for PSPCL 110
Table 1: CAGR considered by PSPCL for estimating Energy Sales for the 2nd MYT Control Period
Sr. No.
Consumer Category 5 Yr CAGR
(FY 2013-14 to FY 2018-19)
4 Yr CAGR (FY 2014-15 to
FY 2018-19)
3 Yr CAGR (FY 2015-16 to 2018-19)
CAGR Considered
I II III IV V VI
1. Domestic 5.37% 5.38% 6.05% 6.05%
2. Commercial -0.29% 1.65% 2.94% 2.94%
3. Small Supply -0.31% 0.76% 0.79% 0.79%
4. Medium Supply -2.46% -0.61% 0.54% 0.54%
5. Large Supply 11.69% 6.09% 7.46% 7.46%
6. Public Lighting -8.02% -3.67% -1.50% 0.00%
7. Bulk Supply -3.03% -1.46% -0.04% 0.00%
8. Railway Traction 10.09% 9.72% 9.03% *
* In view of open access granted to Railways by PSPCL in current year, the reduced energy sales of 55.25 MU have been projected for each year of the Control period.
Accordingly, the energy sale estimated by PSPCL for the 2nd MYT Control Period is
given in the following table:
Table 2: Energy Sales submitted by PSPCL for the 2nd MYT Control Period
MkWh
Sr. No.
Category FY
2020-21 FY
2021-22 FY
2022-23
I II III IV V
1. Domestic 15241.60 16163.68 17141.54
2. Non-Residential 3554.64 3659.26 3766.96
3. Small Power Ind. 995.04 1002.87 1010.77
4. Medium Supply Ind. 2252.21 2264.26 2276.38
5. Large Supply Ind. 15556.51 16717.61 17965.38
6. Public Lighting 133.58 133.58 133.58
7. Bulk Supply 636.01 636.01 636.01
8. Railway Traction 55.25 55.25 55.25
9. AP High technology/ High Density farming 0.89 0.91 0.92
10. Compost/ Solid waste Management Plants for Municipalities/ Urban Local Bodies
0.38 0.39 0.39
11. Start-up Power for generators/CPPs 152.56 154.08 155.62
12. Temporary Supply 198.97 200.96 202.97
13. Total 38777.64* 40988.86* 43345.77* *Corrected figures
Commission’s Analysis:
The Commission observes that for projecting energy sales, PSPCL has relied on 5-
year CAGR except for Public lighting and Bulk Supply whose growth is negative
(probably due to DSM measures adopted by them) and for Railway Traction which
has started availing power through open access.
However, in view of nationwide lockdown imposed due to Covid-19 outbreak, the
Commission asked PSPCL to submit the impact of the same on sales projections of
FY 2020-21. PSPCL vide Memo No. 01/spl/ARR/Dy.CAO/256/vol-I dated 09.04.2020
submitted the information as under:
PSERC – Tariff Order FY 2020-21 for PSPCL 111
Table 3: Impact of Lockdown on Sale during the Month of April and May 2020
However, PSPCL in its additional submission made vide Memo No. 362 dated
14.02.2020 submitted that, the Commission in its Business Plan Order has approved
the trajectory for Distribution Loss for PSPCL. Accordingly, PSPCL wishes to revise
the Energy Balance for Control Period without proposing any change in energy sales
projection for the Control Period. The revised Energy Balance is shown in the
following Table:
Table 9: Revised Energy Balance for 2nd MYT Control Period submitted by PSPCL
(MkWh)
Sr. No. Particulars Control Period
FY 2020-21 FY 2021-22 FY 2022-23
I II III IV V
1. Total Sales within State *51333.05 53770.43 56357.58
2. Distribution Loss
2.1 % 12.30% 12.00% 11.70%
2.2 MU 7199.50 7332.33 7467.54
2.3 Sub-total 58532.55 61102.76 63825.12
3. Transmission Loss
3.1 % 2.86% 2.84% 2.82%
3.2 MU 1723.32 1786.04 1852.10
3.3 Sub-total 60255.87 62888.81 65677.22
4. Add: Sale to Common Pool 307.20 307.20 307.20
5. Energy Requirement at State Periphery 60563.07 63196.01 65984.41
6. Net thermal generation 4854.69 4671.55 4731.93
6.1 GGSSTP 2149.57 2011.03 2098.28
6.2 GHTP 2705.12 2660.53 2633.65
7. Net Power Purchase 47807.10 50502.10 52329.71
8. Availability from Hydel Generation 7901.28 8022.35 8922.78
9. Total projected Energy Purchase (6+7+8) 60563.07 63196.01 65984.41
*Figures projected prior to COVID outbreak
Commission’s Analysis:
The Commission in its Order dated 03.12.2019 in Petition No. 18 of 2019 on the
Business Plan and Capital Investment Plan had observed as under:
“The Commission is of the view that actual losses for the year FY 2019-20
should form the basis for setting of target loss figures for the 2nd MYT Control
Period. But actual losses for FY 2019-20 shall be available only upon
completion of True-up of FY 2019-20 (to be carried out in FY 2021-22). In
view of setting higher level of distribution losses and approval of the
substantially higher amount of capital investment for the 2nd MYT Control
period for various schemes of network strengthening, augmentation and loss
reduction etc. (which is a ~30% increase in total capitalisation over the 1st
Control Period), the Commission decides to approve the trajectory of loss
PSERC – Tariff Order FY 2020-21 for PSPCL 115
reduction of 0.30% in distribution losses for each of the subsequent year i.e.
FY 2021-22 and FY 2022-23.
The Commission notes that for FY 2020-21, PSPCL has projected T&D loss
target of 14.80% in this petition. Considering transmission loss levels of
2.86% (achieved by PSTCL in FY 2018-19) the distribution loss for FY 2020-
21 works out to around 12.30%. Accordingly, the Commission decides to
provisionally approve the distribution loss target at 12.30% for FY 2020-21.
Therefore, the distribution loss trajectory provisionally approved by the
Commission is shown in the following table:
Table 10: Distribution loss trajectory provisionally approved by the
Commission
Sr. No. Particulars FY
2020-21
FY
2021-22
FY
2022-23
1. Distribution loss trajectory* 12.30% 12.00% 11.70%
*The distribution loss trajectory shall be subject to revision based on actual figures for FY 2018-19 true up and APR of FY 2019–20. However, the reduction trajectory of 0.30% shall remain the same.”
Since, the actual distribution losses of FY 2019-20 are still not available, thus, the
Commission decides to consider the distribution loss for the 2nd MYT Control period
on the basis of distribution loss target of 11.54% approved in APR for FY 2019-20.
Accordingly, considering the loss reduction trajectory of 0.30%, the distribution loss
target works out to 11.24%, 10.94% and 10.64% respectively for each year of the 2nd
MYT Control Period. Similarly, in the Tariff Order for PSTCL, the Commission has
decided to consider the transmission loss for the 2nd MYT Control period on the basis
of normative loss target of 2.50% approved in APR for FY 2019-20. And, considering
the loss reduction trajectory of 0.02%, the transmission loss target has been worked
out provisionally as 2.48%, 2.46% and 2.44% respectively for each year of the 2nd
MYT Control Period.
Further, as discussed in para 2.3, the Commission has not considered generation/RE
power available at 66/11 KV of PSPCL‟s distribution system for allowing the
transmission losses. Accordingly, the energy requirement for 2nd MYT Control Period
approved by the Commission is as follows:
PSERC – Tariff Order FY 2020-21 for PSPCL 116
Table 11: Energy Requirement for 2nd MYT Control Period approved by the Commission
(MkWh)
Sr.
No. Particulars
Approved by Commission
FY 2020-21 FY 2021-22 FY 2022-23
I II III IV V
1. Energy Sales within the State 47900 53545 56128
2. Target Distribution Loss (%) 11.24% 10.94% 10.64%
3. Target Distribution Loss (MkWh) 6066 6577 6683
4. Input Energy Required 53966 60122 62811
5. Gen./RE power available at 66/11 KV 2498 2582 2599
6. Input Energy Required (excluding Gen./RE
Power available at 66/11 KV) 51468 57540 60212
7. Target Transmission Loss (%) 2.48% 2.46% 2.44%
8. Target Transmission Loss (MkWh) 1309 1451 1506
9. Total Energy Input Required (excluding
Gen./RE power available at 66/11 KV) 52777 58991 61718
10. Total Energy Input Required 55275 61573 64317
11. Sales to Common pool consumers 307 307 307
12. Total Energy Requirement 55582 61880 64624
Accordingly, the Commission approves the total energy requirement of PSPCL
as 55582 MkWh, 61880 MkWh and 64624 MkWh for FY 2020-21, FY 2021-22 and
FY 2022-23 respectively.
4.4 PSPCL’s Net Thermal Generation
PSPCL’s Submissions:
PSPCL has projected energy to be scheduled from Own Thermal Generating
Stations based on the Merit Order principle. The Net Thermal Generation for the 2nd
MYT Control Period submitted by PSPCL is as follows:
Table 12: Thermal Generation (Net) submitted by PSPCL for 2nd MYT Control Period
Regarding the implementation of UDAY loan, PSPCL submits that there would be
addition of equity of Rs. 15,628.26 Crore after conversion of loan into equity by
Government of Punjab during FY 2020-21.
Also, for funding of capital expenditure for Control period, PSPCL has considered the
normative debt: equity ratio of 70:30, after excluding grant and consumer
contribution. Accordingly, equity addition has been considered for Control Period.
The rate of return on equity has been considered as 15.5% for Generation and 16%
for Distribution Business. Equity has been allocated in ratio of Gross Fixed Assets as
on April 1, 2018 i.e., 47.65:52.35
The return on Equity for 2nd MYT Control period claimed by PSPCL for the 2nd MYT
Control Period is as follows:
Table 75: Return on Equity claimed by PSPCL for the 2nd MYT Control Period
Sl. No. Particulars FY 2020-21 FY 2021-22 FY 2022-23
I II III IV V
1. Opening Equity 6,081.43 22,439.49 23,029.09
2. Addition of Equity 16,358.06 589.59 577.25
3. Closing Equity 22,439.49 23,029.09 23,606.34
4. Rate of Return on Equity (%) 15.90% 15.93% 15.93%
5. Return on Equity 2,266.76 3,621.78 3,714.40
6. Return on Equity for Generation 462.30 486.89 509.38
7. Return on Equity for Distribution 1,804.46 3,134.90 3,205.02
PSERC – Tariff Order FY 2020-21 for PSPCL 162
Commission’s Analysis: The Commission determines the Return on Equity for the Control Period in accordance with
Regulation 20 of PSERC MYT Regulations, 2019 which is reproduced as under:
“20. Return on equity
Return on equity shall be computed at the base rate of 15.5% for thermal generating stations, Transmission Licensee, SLDC and run of the river hydro generating stations and at the base rate of 16.5% for the storage type hydro generating stations and run of river generating stations with pondage and 16% for Distribution Licensee on the paid up equity capital determined in accordance with Regulation 19:
Provided that Equity invested in foreign currency shall be converted to rupee currency based on the exchange rate prevailing on the date(s) it is subscribed:
Provided further that assets funded by consumer contributions, capital subsidies/Government. grants shall not form part of the capital base for the purpose of calculation of Return on Equity.”
The Commission has considered the opening of equity for FY 2020-21 as the approved
closing of equity from the APR of FY 2019-20. As explained in para, no addition of equity is
considered. The Commission determines Return on Equity for the 2nd MYT Control Period as
follows:
Table 76: Return on equity approved by the Commission for FY 2020-21 (Rs. Crore)
The Cumulative Gap upto FY 2020-21 has been worked out as under:
Table 83: Cumulative Gap [(Surplus(+)/Deficit(-)] upto FY 2020-21 approved by the Commission
(Rs. Crore)
Sr. No
Particulars Claimed by PSPCL
Allowed by the Commission
FY 2020-21
1. Net Revenue Requirement as per Table 79 for FY 2020-21
35573.60 31519.45
2. Less: Revenue from Sale of Power at existing tariff as per Table 82
32704.97 30875.79
3. Surplus(+)/ Deficit (-) (-)2868.93 (-)643.66
4. Cumulative Gap: Surplus(+)/ Deficit (-) for the previous years
(-)6147.37 (+)418.83
5. Cumulative Gap: Surplus(+)/ Deficit (-) for the previous years
(-)9016.30 (-)224.83
PSERC – Tariff Order FY 2020-21 for PSPCL 167
Chapter 5
Tariff Related Issues
5.1 Utilization of Surplus Power
5.1.1 In order to utilize surplus power so as to reduce the burden of fixed cost of the
surrendered power on the consumers of the State, the Commission in the Tariff
Order of FY 2016-17 introduced a reduced tariff rate for Large Supply industrial
category consumers for any consumption above the threshold limit. The benefit of
reduced tariff was further extended to all categories of industrial consumers, in the
Tariff Order for FY 2017-18.
5.1.2 In the Tariff Order for FY 2018-19 while deciding to continue with its policy of
incentivizing the industry for the productive use of surplus power, the Commission
also simplified the method of determination of threshold consumption, by delinking
the same from any change in the contract demand during the period of consideration.
The same methodology was continued in the Tariff Order for FY 2019-20.
5.1.3 As per the revised estimates (RE) submitted by PSPCL for FY 2020-21, it has a
surplus in excess of 21000 MU, which is proposed to be surrendered as per the merit
order of power purchase from Thermal Stations. The surplus is bound to increase
further due to restrictions imposed on commercial and Industrial activities to contain
the spread of Covid 19. Some of the members of the State Advisory Committee and
various consumers/stakeholders in their comments on the ARR petition have
suggested continuing with the system of reduced rate for energy consumption above
the threshold limit.
5.1.4 The Commission is also of the view that, in a regime of surplus power, the policy of
encouraging the industry in promoting the productive use of surplus power needs to
be continued, in order to reduce the burden of fixed cost of the surrendered power on
the consumers of the State.
Thus, the Commission decides to continue with its policy of encouraging the
industry in promoting the productive use of surplus power by offering lower
rate of energy charge for consumption of power exceeding the threshold limit.
The applicable reduced energy charge for FY 2020-21 shall be Rs. 4.83 per
kVAh, with other terms and conditions remaining the same. The terms and
conditions are reproduced below for ready reference:
PSERC – Tariff Order FY 2020-21 for PSPCL 168
i) The maximum annual consumption in any of the last two financial years shall
be taken as threshold. In case, the period is less than two financial years i.e.
if connection has been released after 31.03.2018, reduced Energy Charge
shall not be permissible.
ii) Only PSPCL consumption shall be considered for calculating the maximum
annual consumption in any of the last two financial years which is to be
taken as threshold limit and also for calculating consumption eligible for
reduced Energy Charge.
iii) Any change in the contract demand either during the last two financial
years or during the current financial year, shall not be considered while
calculating the threshold limit or calculating consumption eligible for
reduced Energy Charge. Any consumption above the threshold
consumption will be eligible for the reduced Energy Charge.
iv) The billing at the reduced Energy Charge shall be done once the consumer
crosses the threshold consumption e.g. if a consumer has maximum annual
consumption in any of two preceding financial years as 10000 kVAh, the
reduced Energy Charge shall be allowed to the consumer as and when his
consumption during the current year exceeds 10000 kVAh.
v) The cumulative effect of ToD rebate on the Energy Charges (including
reduced Energy Charges for consumption exceeding threshold limit and/or
use of electricity exclusively during night hours) at any time shall be limited
to the Energy Charge of Rs. 4.83 per kVAh. In addition all other surcharges/
rebates as approved by the Commission and Govt. levies as notified by the
State Government shall be charged/allowed extra.
5.2 Time of Day (ToD) Tariff
5.2.1 A distribution licensee generally plans for long term power procurement to meet its
base load/demand and goes for short term power procurement to cater to its peak
demand. Thus, to achieve optimum power procurement, the load curve throughout
the day needs to be as flat as possible. To achieve this objective, Time of Day (ToD)
tariff is an accepted tool for DSM, wherein an additional charge is levied for
consumption of electricity during peak-hours and rebate is allowed for consumption
during off-peak hours, in order to incentivize consumers to shift their consumption
from peak to off-peak hours, for achieving flattening of the load curve and minimizing
the cost of power procurement to the distribution licensee.
PSERC – Tariff Order FY 2020-21 for PSPCL 169
5.2.2 Accordingly, the Commission in the Tariff Order for FY 2016-17 decided to shift from
the Peak Load Exemption Charges (PLEC) to the ToD tariff; comprising of normal
tariff plus Rs. 2.00 per kVAh for the consumption during peak hours of 06:00 PM to
10:00 PM for the period of 1st June to 30th September and normal tariff minus Rs.
1.00 per kVAh for the consumption during off-peak hours of 10:00 PM to 06:00 AM
(next day) for the period of 1st October to 31st May of next year. The ToD tariff was
made applicable initially for LS/MS industrial category consumers.
5.2.3 In the tariff Order for FY 2017-18, NRS/BS category consumers with sanctioned
demand exceeding 100 kVA were also covered under ToD tariff. Also, off-peak
rebate was increased to Rs.1.25 per kVAh, with the provision to limit the cumulative
effect of ToD rebate and reduced energy charges for consumption beyond threshold
limit to the lowest Energy charges of Rs. 4.23 per kVAh. The cumulative effect of ToD
rebate and reduced Energy Charges for consumption beyond threshold limit was
limited to the lowest Energy charge of Rs. 4.28 per kVAh, in the tariff Order for FY
2018-19.
5.2.4 In the Tariff Order for FY 2019-20, the Commission decided to continue with the ToD
Tariff as approved in the Tariff Order for FY 2018-19. However, it was made
applicable for NRS/BS consumers with sanctioned Contract Demand exceeding 100
kVA, all LS/MS consumers (including Rural Water Supply Schemes & Compost/Solid
Waste Management Plants) and EV charging stations, with the provision that,
cumulative effect of ToD rebate and Voltage rebate on the Energy Charges (including
reduced energy charges for consumption exceeding threshold limit / use of electricity
exclusively during night hours) at any time shall be limited to the lowest Energy
Charge of Rs. 4.45 per kVAh.
5.2.5 Some of the members of the State Advisory Committee and various
consumers/stakeholders in their suggestions submitted on the ARR petition have
suggested the following:
a) The reduction/removal of ToD surcharge and increase in the night rebate or to
have same rates for Surcharge and rebate.
b) Exclusion of Voltage rebate from the capping of lowest energy charges.
5.2.6 PSPCL in its reply submitted vide letter No. 363 dated 14.02.2020 has submitted as
under:
“ToD tariff was introduced as a Demand Side Management system. There are certain times during the day when the demand for electricity is at its peak and
certain times when it falls, which distort the load curve of the Utility. During peak
PSERC – Tariff Order FY 2020-21 for PSPCL 170
load hours the domestic and NRS load reaches to its maximum and has to be
made available to the consumers. Also, during four months of the Paddy
season the AP supply is given in three shifts of 8 hours each as per the
instructions of GoP due to which the electricity demand rises during peak hours.
Further there are system constraints and availability of corridor which limits the
availability of power during peak hours. To flatten the peak load curve and
implementing various energy conservation measures, electricity is made
expensive during peak hours so that consumers use lesser electricity during
this period. Electricity charges during off peak hours are reduced as an
incentive for people to use more electricity during the off peak hours.
Regarding reduction of TOD surcharge, it is submitted that TOD charges @ Rs
2/unit is recovered only for 4 hours/day during four months of Paddy/summer
season. However TOD rebate @ Rs 1.25/unit is given for 8 hours/day during
balance eight months. TOD surcharge act as a deterrent and any reduction in
surcharge may encourage them to use more power during peak load hours.”
Also, PSPCL in compliance to the Commission’s directive to examine the effect
of introducing ToD tariff has informed that the ToD surcharge has helped in checking
peak demand during the peak hours. However, ToD rebate introduced during the
night in lean season has not enhanced the utilization of power during night hours.
5.2.7 The Commission notes that, in our State the objective of imposing additional charge
during peak hours is to curtail the use of supply during the peak hours in order to
flatten the load curve of a day, as PSPCL is having system constraints and a problem
of corridor availability, which limits the availability of power during peak hours. The
Commission is also conscious of the fact that, in Punjab, ToD Surcharge is applicable
for four hours per day during the four months of summer/paddy season only, whereas
ToD rebate is applicable for eight hours per day during the remaining eight months of
the year and thus a comparison of rates of Surcharge and Rebate is not feasible.
Also, as per the information submitted by PSPCL regarding revenue assessment for
true-up of FY 2018-19, ToD rebates at Rs. 253.79 Crore already outweighs the ToD
surcharge of Rs. 166.51 Crore.
Therefore, for FY 2020-21, the Commission decides to continue with the
existing ToD Tariff for NRS/BS consumers with sanctioned demand of more
than 100 kVA, all LS/MS consumers (including Rural Water Supply Schemes &
Compost/Solid Waste Management Plants) and EV charging stations.
However, while being conscious of the fact (as brought out in the Order dated
13.09.2019 in the Review Petition 05 of 2019) that a concessional/discounted tariff
can be provided subject to certain limitations, the Commission decides to consider
the suggestion made by industrial consumers that the consumers availing supply at
higher voltages should not be treated at par with the consumers getting supply at
PSERC – Tariff Order FY 2020-21 for PSPCL 171
lower voltages.
Accordingly, the Commission decides to amend the provision regarding the
cumulative effect of ToD rebate on the Energy Charges as under:
“Cumulative effect of ToD rebate on the Energy Charges (including
reduced Energy Charges for consumption exceeding threshold limit
and/or use of electricity exclusively during night hours) at any time shall
be limited to the Energy Charge of Rs. 4.83 per kVAh.
The amended provision shall be applicable with effect from the date of
applicability of this Tariff Order. The applicable ToD Tariff shall be as per
condition 15 of General Conditions of Tariff.
5.3 Special tariff for use of electricity exclusively during night hours
5.3.1 In the Tariff Order for FY 2018-19, the Commission in order to give an impetus to the
consumption of power particularly during night hours and to further flatten the load
curve of the utility during a day, decided to introduce a special reduced tariff for
LS/MS Industrial consumers who opt to use electricity exclusively during night hours
i.e. from 10.00 PM to 06.00 AM next day. This initiative was continued in the Tariff
Order for FY 2019-20. Also, on the request of various industrial consumer
organizations and after receiving PSPCL’s confirmation of its feasibility, the
Commission decided to allow the use of electricity with normal rates of tariff for the
period of 06:00 AM to 10:00 AM, during the non- paddy season.
5.3.2 Some of the members of the State Advisory Committee and various industrial
consumer’s associations in their comments submitted on the ARR petition, have
suggested that the provision of use of electricity for the period of 06:00 AM to 10:00
AM, should be made available throughout the year, as it becomes difficult for them to
price their finished product differently during the different periods of a year. In
response thereof, PSPCL vide letter No. 363 dated 14.02.2020 has submitted as
under:
“Exclusive night tariff was introduced by the Commission to utilize surplus
power during period when the demand for electricity falls. In Tariff Order for FY
2019-20, the Commission decided that reduced tariff shall be applicable to
LS/MS Industrial consumers, who opt to use electricity exclusively during night
hours from 10.00 PM to 06.00 AM next day. However, from 01.10.2019
onwards, they shall be entitled to use electricity also from 06:00 AM to 10:00
AM at normal tariff rate. Since inception, there has been positive response
PSERC – Tariff Order FY 2020-21 for PSPCL 172
from consumers and number of consumers opting for exclusive night category
Tariff has grown to 74 with total demand of 229.72 MVA. As such as of now it
should not pose any problem if it is extended throughout the year.”
5.3.3 Accordingly, the Commission decides to continue with special reduced tariff
for LS/MS Industrial consumers who opt to use electricity exclusively during
night hours i.e. from 10.00 PM to 06.00 AM next day. The Commission also
decides to extend the benefit of exclusive night time tariff to SP industrial
category consumers. However such consumers shall be required to bear the
cost of compatible meters. The distribution Licensee is directed to provide
compatible meters to consumers who exercises the option to switchover to
exclusive night time tariff. Such consumers shall also be at liberty to arrange
their own compatible meters and get these installed from PSPCL as per the laid
down procedure.
Further, the Commission is conscious of the fact that there is an issue of
morning peak also, but in view of the small number of consumers under this
category and PSPCL’s submission that as of now it should not pose any problem if extended throughout the year, the Commission decides to allow for
this year, the use electricity from 06:00 AM to 10:00 AM at normal tariff rate,
also during the paddy season of FY 2020-21 to the consumers under night
category. The terms and conditions for use of electricity exclusively during
night hours shall be as per condition 22 of General Conditions of Tariff.
5.4 Power Intensive Unit (PIU) Tariff
5.4.1 In response to the suggestion made by some of the members of the State Advisory
Committee and various consumers/stakeholders in their suggestions submitted on
the ARR petition, to shift from a regime of separate tariff for Power Intensive Units
and General Industry to the same Tariff with additional levy for harmonics producing
units, PSPCL vide letter No. 363 dated 14.02.2020 has submitted as under:
“PIU industries affect the Distribution System on account of various
parameters like Voltage Dip, Voltage flickers and Voltage & current waveform
distortion, harmonics, capacity loss of the utility Distribution System, Demand
Factor, Energy loss in Distribution System, etc. The main points are also listed
as under:
(i) The loads of these PIU industries are non-linear.
(ii) The non-linear nature of these loads distorts the voltage waveform
and pollutes the power quality.
PSERC – Tariff Order FY 2020-21 for PSPCL 173
(iii) The presence of harmonics in the system reduces the Distribution
capacity of the Utilities. The capacity loss increases with the increase
in non-linear load.
(iv) As the harmonic current increases, the true maximum demand will
increase. But the static energy meters will record only RMS value of
maximum demand. The excess demand increases with the increase in
non-linear load.
(v) The non-linear load will not exhibit true power factor. The true power
factor of non-linear load is low where harmonic currents are present.
(vi) The presence of harmonics in the system increases the Iron/Energy
Losses of Utility Power Transformers. The energy loss in Utility Power
Transformer increases with the increase in non-linear load.
(vii) The Utility has to invest more to provide higher level of short circuit
MVA to absorb the power quality pollutants created by the industry
having a large capacity of non-linear loads.
As such the tariff of PIU and Arc furnace consumer is on high side than
general industry consumers. Utilization factor of such industries is high and per
unit cost is low therefore such industries stand to gain due to inherent nature
of two-part tariff. Further, cross subsidy levels to various categories of
consumers is under the purview of the Commission.
However, the demand of the industry for same tariff as that of General industry
can be considered subject to installation of Power Quality Meters, for which
the Commission may allow at least six to eight months to procure, install and
training of personnel after the approval of proposal and formulation of
Regulations on Power Quality. It is proposed that consumers may procure and
install these meters after getting it tested from accredited laboratories.”
5.4.2 The Commission agrees with the objector’s view that PIUs which are putting in
efforts/investment to maintain their harmonics within the permissible levels need to
be treated differently from the consumers who continue to inject harmonics in the
system. But for this to happen, designated consumers have to install power quality
meters. The requisite infrastructure and manpower training for collection and analysis
of data captured from Power Quality meters /analyzers is also required to be put in
place by PSPCL. The Commission is already in the process of specifying harmonic
limits including its measurement after following the due process. The Commission
also arranged a workshop on Power Quality, attended by PSPCL officers, where the
concept of harmonics including the methodology of its measurement etc was
PSERC – Tariff Order FY 2020-21 for PSPCL 174
discussed in detail. The PSPCL has submitted that, it requires at least six to eight
months to procure, install and training of personnel after the approval of proposal and
formulation of Regulations on Power Quality.
Also, some of the objectors in response to the Public Notice issued in Petition No. 12
of 2020 have submitted that the industry is closed due to lockdown imposed by the
Central/ State Government to prevent spread of Covid-19 pandemic. The revival
of manufacturing activity of the industry will take some time and it would not be
possible to invest on harmonics filters and allied equipment at this time. As such,
the objectors have requested for time for designated consumers to procure and
install power quality meters at their premises/Point of Coupling.
Accordingly, separate instructions shall be issued in the matter.
5.4.3 PSPCL also submitted that, as per the methodology specified by the Commission in
Tariff Order for FY 2018-19, regarding billing for Arc/PIU industries, where the load is
of mixed nature, the total charges being paid by some of the Mixed Industry is even
less than General Industry. Therefore, it is proposed that for billing of mixed
industries the energy & fixed charges be levied according to the tariff slab of General
and Arc/PIU category as per the total CD (General plus Arc/ PIU) of the consumer.
The Commission observes that in the Tariff Order for FY 2018-19, the methodology
for billing of industries having mixed loads i.e. where in addition to General Industrial
loads, Arc/ Power Intensive loads are also running, was specified in Schedule SI.3.6
of Schedule of Tariff with the intention to clarify the issue regarding applicability of
slab rates for charging of Fixed/Energy charges to be levied from such consumers.
Further, in order to avoid such a discrepancy in billing of Mixed Industry
consumers, the Commission decides to insert a proviso below first sub-Para in
Schedule SI.3.6 of Schedule of Tariff as under:
“Provided that the total charges payable by such Mixed Industry consumer shall not be less than the charges payable, in case his
total load (General and PIU) is considered as the general load.”
5.5 Demand-based tariff:
5.5.1 In the Tariff Order for FY 2014-15, the Commission decided to introduce the demand
(kVA) based tariff for Large Supply, Bulk Supply, Railway Traction, Medium Supply
and DS/NRS (with load more than 100 kW) consumers. The same was extended to
DS/NRS (load of more than 50 kW) consumers in Tariff Order for FY 2015-16 and to
NRS (with load of more than 20 kW) and SP Industrial supply consumers in Tariff
PSERC – Tariff Order FY 2020-21 for PSPCL 175
Order for FY 2018-19.
5.5.2 Some of the consumers during the public hearing at Jalandhar, informed that
nowadays residential houses are built with the provision for AC and other modern
gadgets in all the rooms, thus having a higher connected load. Whereas, only one or
two room are put to regular use. Also, there are number of domestic consumers who
have built large houses, but due to migration of their children in pursuit of better
avenues only elders/caretaker lives in them, resulting in a very lower utilization factor.
Thus, it would be proper if demand-based tariff is also extended to such DS
consumers.
5.5.3 PSPCL vide letter No. 363 dated 14.02.2020 has submitted that, it has no objection
on extension of demand based tariff to remaining categories and furnished the
information as under:
Category Total No. of
Connections
No. of connections where
Compatible meters have been installed
compatible meters yet to be installed
I II III IV
DS
(above 20 KW & up to 50KW)
19631 15504 4127
NRS
(above 7KW & upto 20KW)
93274 63970 29304
TOTAL 112905 79474 33431
PSPCL has also requested to grant it a timeframe of 6 months for procurement and
installation of balance 33,431 nos. of meters for extension of demand-based tariff for
other consumer categories.
5.5.4 The Commission observes that, demand based system is a win-win situation for the
consumers as well as the utility. For the utility, the prime benefit is that, it doesn’t
have to deploy its manpower for physical checking of consumer premises for
assessment of the load. Whereas, the same is advantageous to the consumers in the
sense, that it give them flexibility in installation of additional electricity
equipments/loads provided they keeps their demand within the sanctioned limits.
Thus, the Commission intends to shift all consumers (covered under two part
Tariff) from connected load based tariff to the contract demand/load based
tariff system (kVA or kW), in a phased manner. However, the Commission is of
the view that any new tariff system should be implemented after ensuring 100%
installation of the compatible meters on the target consumers and creating
PSERC – Tariff Order FY 2020-21 for PSPCL 176
awareness amongst them about the proposed tariff system for smooth rollover
to the new system. Accordingly, PSPCL is directed to install the compatible
meters on 100% of the consumers proposed to be covered under the contract
demand/load based tariff system and create awareness amongst them about
the proposed tariff system.
5.6 Simplification of Billing/Tariff
5.6.1 PSPCL has proposed as under:
a) To merge the consumption slabs of 301-500 units and above 500 units for DS sub-
categories having load above 2 kW.
b) To merge the DS sub-categories of above 2 kW & upto 7 kW and above 7 kW &
upto 50 KW to have only two sub-categories of 0-2 kW and Above 2 kW.
c) To merge consumption slab of 101 to 500 units and above 500 units for NRS
consumers.
5.6.2 a) The Commission decides to accept the PSPCL’s proposal to merge the consumption slabs of 301-500 units and above 500 units for DS sub-
categories for consumers above 2kW also.
b) Regarding PSPCL’s proposal to merge DS sub-category of 2 to 7 KW with 7
KW to 50 KW, some of the objectors in their objections/comments have
submitted that, this will impact the middle class most and would not be
acceptable to them. The Commission is also of the view, that in view of the
huge difference in utilization factor of these sub-categories, it would not be
proper to merge them into a single sub-category.
c) As the projected sales data for NRS is not commensurate with the change in
load, the Commission decides to defer the issue of merge consumption
slabs of 101 to 500 units and above 500 units for the time being.
PSERC – Tariff Order FY 2020-21 for PSPCL 177
Chapter 6
Directives for FY 2020-21
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
6.1
Reduction in T&D losses
PSPCL is directed
(i) To achieve the distribution loss trajectory approved by the Commission.
Reduction in T&D Losses
PSPCL submissions in the compliance report ending December, 2019 are as under:
PSPCL is striving hard to achieve distribution loss trajectory approved by the Commission in MYT ending 2019-20.
As per provisional data upto 31.12.2019, PSPCL registered distribution loss of 11.21% which has been decreased by 0.31% from last year (corresponding period).
Following measures have been taken by PSPCL to achieve distribution loss trajectory.
1. Shifting of meters outside the consumer premises: -
5.47 Lac meters are pending for shifting ending December, 2019.The work of shifting covered under R-APDRP, IPDS and DDUGJY will be completed by March 2020.
2. Replacement of electro mechanical meters:-
1,25,742 single phase electro mechanical meters replaced from 31st December, 2018 to 31st December, 2019 and 4,36,700/- are still pending for replacement ending December, 2019.
3. Clearance of Key Exceptions:-
4857 Key Exceptions of 2018 and 186092 Key exceptions of 2019 are pending for clearance ending December, 2019.
4. Checking of theft:-
13,81,175 connections were checked in 2019-20 (upto December, 2019) and 1,28,139 theft cases detected. Penalty
Against a distribution loss target of 12.5% for FY 2017-18, PSPCL recorded a loss level of 14.19%. During FY 2018-19, PSPCL recorded a distribution loss of 12.94% against a target of 11.89%.
PSPCL has failed to bring down losses to the desired level despite huge capital investments allowed by the Commission.
PSPCL is again directed to identify high loss feeders/areas and take corrective measures to achieve distribution loss trajectory.
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Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
of Rs.157.54 crore has been levied.
5. New Sub-Stations:-
Against 8 no. 66kV Sub-Stations commissioned in 2018-19, 11 no. new 66kV Sub-Stations have been commissioned in 2019-20, ending December, 2019.
6. Kandi Area feeder segregation:-
The Kandi Area feeder segregation and metering on all AP consumers in Kandi Area where segregation is not possible is being carried out.
7. HVDS in AP:-
Out of 13.83 Lac AP connections, 6.43 Lac are all HVDS. All new AP connections are being released on HVDS.
8. Argumentation of undersize conductor to reduce I2 R losses:-
Under DDUGJY and IPDS Schemes argumentation of 3258 circuit km of HT lines out of total scope of 4218 circuit km and 653.41 circuit km of LT lines out of total scope of 910.1 circuit km lines have been completed and the balance works shall be completed by March, 2020.
9. Installation of whole current smart meters and RF meters:-
PSPCL is procuring 96000 whole current smart meters, 90000 RF meters, 34000 LT CT meters and 2500 LT CT compact meters.
6.1
Reduction in T&D losses
(ii) carry out energy audit of at least one circle and submit the report by March 2020.
NOTE:
PSPCL submitted the energy audit data of Thermal Plants and Hydel projects which is irrelevant and as such has not been reproduced.
PSPCL was directed to carry out the energy audit of atleast one distribution circle. In the review meeting held on 12.12.2019, PSPCL submitted that
PSERC – Tariff Order FY 2020-21 for PSPCL 179
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
the order for energy audit of one sub-station has been placed by PSPCL and job will be completed by March, 2020. PSPCL was directed to share the results with the Commission and roll out the energy audit for all other sub-stations and then for all circles. The Commission reiterates its directive for compliance during FY 2020-21.
(iii) To reduce the losses of divisions with distribution loss level above 25% to below 15% during FY 2019-20.
DIVISIONS WITH LOSSES MORE THAN 25%.
As per energy audit of FY 2019-20, following 12 nos. divisions under PSPCL has registered distribution losses more than 25 % and the data for these divisions is discussed as under;
The 12 high loss divisions are West Amritsar, Sub-Urban Amritsar, Ajnala, City Taran Taran, Patti, Bikhiwind, Patran, Lehra Gaga, Bhagta Bhai, Zira, Bhagapurana and Maloat.
PSPCL attributes the losses to rampant theft of energy in these divisions.
Surprise raid to curb the theft are made by PSPCL, but there employees are gheraoed and manhandled.
Rural feeders in these areas have more losses.
1,24,809 connections have been checked and 11,593 theft cases have been detected in these divisions ending December, 2019 and the leakage of revenue of Rs.21.87 crore detected.
PSPCL submitted the loss figures of FY 2018-19 of 12 divisions without indicating the reduction in losses achieved in these divisions during FY 2019-20. The quarterly report on the action being taken and status of losses achieved in these Divisions should be shared with the Commission.
PSERC – Tariff Order FY 2020-21 for PSPCL 180
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
1,16,864 meters in these 12 divisions are yet to be shifted outside the premises. 13700 meters will be shifted in remaining 3 months of this FY and 103164 meters will be shifted during FY 2020-21.
23,928 electromechanical meters are yet to be replaced in these 12 divisions. 12247 will be shifted in 4th quarter and 11681 during FY 2020-21.
6.1
Reduction in T&D losses
(iv) to complete shifting of meters outside consumer premises within 6 months of the issue of this Tariff Order.
The Status of meter shifted by PSPCL is as under:-
6030 meters are pending for shifting in APDRC areas where the work is being executed by the contractor.
Total of 5.47 lac meters are pending for shifting ending December, 2019.
Out of 5.47 lac pending meters stiff resistance is experienced in 2.11 lac cases of meter shifting.
Out of 5.47 lac pending meters PSPCL claimed that 1.43 lac meters will be shifted by March, 2020 and balance 4.03 lac to be shifted in FY 2020-21.
PSPCL needs to report compliance.
6.1
Reduction in T&D losses
(v) To replace all single phase electro-mechanical meters with electronic meters during FY 2019-20
Replacement of Balance Electromechanical Meters with Electronic Meters as submitted by PSPCL is as under:-
PSPCL submitted that 4,36,700 electromechanical meters are pending for shifting as on 31.12.2019.
Out of 4,36,700 electromechanical meters, 1,67,145 electromechanical meters fall under SAP area and 2,69,555 meters under non-SAP area.
5,62,442 meters were pending for replacement ending December, 2018.
46,624 electromechanical meters out of balance 4,36,700 meters would be replaced by March 2020.
The balance 3,90,076 electromechanical meters are stated to be replaced by September, 2020.
The Commission notes that there are still 4,36,700 electromechanical meters pending for replacement which is violation of CEA Metering Regulations and the directives of the Commission issued repeatedly since FY 2011-12. The utilities in other parts of the country are contemplating smart metering but PSPCL is still continuing with electro-mechanical
PSERC – Tariff Order FY 2020-21 for PSPCL 181
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
meters.
PSPCL needs to report compliance by 31.9.2020.
6.2
Metering
(i) 100% Metering
The Commission directs the distribution licensee to implement the mandate of the Act regarding 100% metering of consumers by the end of next MYT control period.
100% METERING
PSPCL has submitted that though 100% metering is the mandate of the act yet 100% metering of the AP consumers involves huge expenditure and may not justify the return on investment.
PSPCL further submitted as under:-
1. Feeders supplying power to Agriculture Pump Sets have been segregated and are metered.
2. HVDS which is a more direct measure that helps in loss reduction and helps in curtailing power leakage.
3. PSPCL has already adopted a policy mandating HVDS and DT Metering on all new AP connections.
4. FEEDER SEGREGATION and AP CONSUMER METERING IN KANDI AREA under DDUGJY scheme has been initiated at a cost 191 Crore for better accounting of AP energy in Kandi feeders.
5. PSPCL is using an online system to record AP feeder energy readings.
6. Data of about 1800 AP feeders is being received under AMR/REC rural feeder monitoring portal.
7. For 100% metering of all AP consumers and recording monthly readings on AMR involves connectivity issues.
8. Assuming approximately 13.78 Lac total AP consumers an investment of approx. 1143.74 Cr. shall be required for AMR/ Smart meters, Data Centre Servers and Software Licenses.
9. PSPCL is going to assess the T&D Losses on AP Feeders and 1% AP Feeders to be covered under 100%
The Commission observes that no progress has been made by PSPCL to implement the mandate of the Act to achieve 100% metering.
PSPCL is directed to submit the plan to achieve 100% metering as per the mandate of the Act within 6 months of the issue of this tariff order.
PSERC – Tariff Order FY 2020-21 for PSPCL 182
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
metering.
10. PSPCL under instructions of Punjab Govt and in collaboration with M/S J-PAL and World Bank, has launched a DBTE scheme Pani Bachao Paise Kamo on 256 no AP feeders.
11. Various Kissan Unions are not allowing PSPCL to install meters at their AP connections.
6.2
Metering
(ii) Introduction of prepaid and smart meters
PSPCL shall submit a complete action plan with target dates for introduction of new metering technologies such as pre-paid meters/smart meters for different classes of consumers by 1st Sept. 2019.
In compliance to the directive of the Commission, the complete action plan for introducing new metering technologies/pre-paid metering technology has been submitted by PSPCL.
Out of total of 10,549 LS consumers the AMR of about 2622 LS consumers is pending ending December, 2019 and shall be completed by March, 2020.
Regarding 25kW to 100kW industrial connections, LT CT meters are used. AMR of about 100 such LT CT meters is carried out. Data of about 27,000 LT CT meters is yet to be received on AMR.
T.E. for 34000 TC CT meters has been floated and these 34000 LT CT meters are likely to be commissioned by April, 2021 to bring all industrial 25kW to 100kW connections on AMR.
Another order for 2500 built in LT CT meters with built in modem has been placed against which 1600 have already been received and are under installation on 25kW to 100kW connections in Ludhiana City and there data shall be received on AMR.
T.E. has been floated for 96000 three phase whole current smart meters. 52000 three phase whole current smart meters out of 96000 meters shall be used on 250 numbers AP feeders with DBTE Scheme and remaining three phase whole current smart meters shall be installed on industrial and commercial consumers with load between 20kW to 25kW. Supplies are excepted to comments from April, 2020 and all these meters shall be
The action plan to install smart/ prepaid meters on temporary, Govt. connections and consumers upto a load of 25 kW (in areas where there are high AT&C losses) may be shared with the Commission.
PSERC – Tariff Order FY 2020-21 for PSPCL 183
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
commissioned by October, 2020.
PSPCL is procuring 1.20 lac (30000 three phase and 90000 single phase) meters with RF Mesh Technology to illuminate the human intervention in getting data from the meters. Supplies are likely to comments to July 2020 and may be completed in next six months.
T.E. for 10 thousand single phase pre-paid meters was floated but no response has been received.
It is submitted that pre-paid meters are available in single phase and three phase whole current and not in HT & LT CT meters.
6.2
Metering
(iii) AMR of HT/MS consumers
PSPCL is directed to complete AMR of HT/MS consumers during FY 2019-20.
AMR of HT Consumers:
PSPCL is getting AMR data of 8129 HT/LS Consumers December, 2019.
There are 1302 MS consumers on HT line in SAP Area. Out of these, 921 MS/HT Consumers are covered under AMR.
For AMR of H.T consumers in 97 towns covered under IPDS, the WO for supply, installation and commissioning of modems has been issued.
The Commission reiterates its directive to complete the work in FY 2020-21.
6.2
Metering
(iv) Accreditation of existing meter testing labs from NABL
PSPCL is directed to get accreditation of its existing testing labs from NABL as per provisions of Supply Code.
It is submitted that the requisite training regarding understanding and implementing IS/ISO/IEC 17025-2017 including Management System and Documentation and internal Auditing shall be imparted to 15 no. officers/officials from Metering Organisation in the month of Jan 2020 and approval for the same has been given by the Competent Authority. After that process regarding NABL accreditation for ME Lab Ludhiana and ME Lab Patiala shall be started.
The status of NABL accreditation of all ME labs may be shared with the Commission.
6.2
Metering
(v) PSPCL shall ensure on site testing of all HT/EHT metering equipments
T.E for on site Mobile Van duly NABL accrediting to test HT/EHT meters including CTs/PTs has been floated. Despite prepaid discussions, no bid has been received on date of opening of 24.10.2019.
The Commission notes that no tangible progress has been made to test 10% of EHT
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including CTs/PTs. In case PSPCL is unable to develop its own testing capabilities, a third party may be engaged to test check atleast 10% of the EHT connections in next 6 months. A report be submitted to the Commission by Dec. 2019.
Discussions are going on with venders regarding their comments received by PSPCL to float tender fresh enquiry.
However, to engage third party for testing 10% EHT (19 no. 66KV) connections, open tender shall be floated separately. The case for the same is under process. The tender shall be floated in the month of Feb 2020.
.
meters by engaging a third party for testing the meters on site. As discussed during meeting with the management of PSPCL on 12.12.2019, the procurement of NABL accredited mobile testing lab appears to be in the initial stages therefore, the Commission directs PSPCL to outsource the testing of all HT/EHT metering equipments including CT/PTs to complete testing of all HT/EHT meters as per the time lines fixed in Regulation 21.3 of Supply Code, 2014 till such equipment is procured and made operational.
6.3A(i)
Status of Central Schemes
(A) R-APDRP
(i) PSPCL shall ensure successful completion of the SCADA project within the stipulated time.
SCADA/DMS – Status of audit by TPIEA
The SCADA/DMS audit by TPIEA in three control centres at Jalandhar, Amritsar and Ludhiana and one DR centre at Patiala is underway. The town wise progress of the phase-1 activity is as under:
It is expected that the Phase-2 verification will start at Amritsar by 6th February 2020 and shall be completed by 20th February
The report of the 3rd Party Audit being conducted by TPIEA may be shared with the Commission within one month of completion of the Audit. PSPCL is directed to ensure completion
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2020.
within the time period allowed for the project.
6.3A(i)
Status of Central Schemes
(ii)PSPCL shall submit status of conversion of loan to grant under the R-APDRP scheme.
The work of 46 towns completed.
Financial closure documents of 38 towns submitted to Nodal agency PFC.
Final tranche of 10% loan of 18 towns out of 38 towns has been received.
No loan amount has been converted to grant as procedure of conversion of loans into grants is under the consideration of MoP/GoI.
The Commission notes the action taken by PSPCL. As the final tranche of 10% loan of 18 towns has been received, therefore, the status of the remaining towns may be shared with the Commission within three months of issue of the Tariff Order. The complete status of conversion of loans into grants under RAPDRP Projects should be supplied to the Commission on a quarterly basis.
6.3A(i)
Status of Central Schemes
(B) IPDS and DDUJJY
PSPCL shall implement the schemes within the time period allotted by GoI and submit quarterly report to the Commission.
a) IPDS Scheme:
W.O. for executing IPDS scheme in 20 No. circles issued in September, 2017. The completion of the scheme as per the W.O was by September, 2019. The completion date has been extended to March, 2020.
The work of 13 No. circles in IPDS Scheme has been completed ending December, 2019.
b) DDUGJY Scheme:
5 nos. packages for carrying out work in 20 districts covered under DDUGJY have been awarded to the contractors. The %age progress for the 5 packages ending December, 2019 is as under:’
Package 1 (M/S HR) -43.65%,
IPDS
PSPCL is directed to ensure completion of work of the remaining seven circles within the time period allowed by PFC and share the compliance within three months of the issue of the Tariff Order.
DDUGJY
The status of
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The scope of work in all the 20 no. Sansad Adarsh Gram Yojana (SAGY) Villages adopted by concerned MPs stands completed. Under this project total works amounting to Rs. 176.49 Cr. Approx. have been completed (overall progress of 70.05% of awarded works).
PSPCL intends to complete the project in all the 20 no. districts by March 2020.
completion of work for 20 Towns under DDUGJY Scheme, should be shared with the Commission within three months of the issue of the Tariff Order.
6.3A(i)
Status of Central Schemes
(C) PSPCL is directed to submit the status of implementation of MIS in Non APDRP Towns in the State.
The office of Chief Engineer/RE & APDRP has been updating the progress of DDUGJY scheme regularly on MIS Portal.
The Commission notes the action being taken.
6.4
AP Consumption
(i) AMR of AP feeders
The Commission directs PSPCL to ensure availability of monthly AMR data along with feeder wise sanctioned load of AP consumers of all AP feeders without any further delay.
Out of 5859 AP feeders, the data of 3594 AP feeders is being received by PSPCL.
Out of 5859 AP feeders, 3650 nos. of AP feeders are under Rural Feeder Monitoring Scheme (RFMS) of RECTPCL New Delhi. Out of 3650 AP feeders, 894 feeders have DLMS compliant meters and balance 2756 AP feeders have non DLMS compliant meters. Though, the data of 2756 non DLMS compliant meters is being captured by PSPCL/ RECTPCL, but all parameters of non DLMS meters are not available due to protocol issues at modem/server end. The Protocol/AMI for billing parameters has been successfully implemented on pilot basis by the firm with effect from 05.02.2020, therefore, duly validated complete data of these 3650 feeders shall be available from March 2020.
Out of 5859 AP feeders 760 feeders are covered under AMR project. Out of these 760 AP feeders the data of only 610 AP feeders is being received by PSPCL. The
The Commission notes that the said directive is pending full compliance since FY 2013-14. Presently AMR data of only 1200-1500 AP feeders is available. The Commission observes that PSPCL has not committed timelines for supply of AMR data of 1199 AP feeders requiring additional nodes and recently brought RFMS scheme. The Commission reiterates its
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balance 150 feeders have hardware issues, therefore, these are being shifted to 11kV RFMS of RECTPCL
Out of 5859 AP feeders 250 AP feeders are covered under MDAS project where data of only 116 feeders is being captured by PSPCL. The balance feeders have UPS/battery issues or meter compatibility issues. The work has been taken up to sort out these issues and the same is likely to be completed by 15.02.2020.
Out of 5859 AP feeders, 1199 feeders need additional nodes and these are to be brought under RFMS scheme and as such their data is not being received.
AMR data from 2858 feeders under 11 kV RFMS will be made available in addition to in-house AMR and MDAS data ensuring 100% data availability from March 2020 onwards
Earlier AMR data of 3200 AP feeders was available during 2015-16 but due to introduction of 11kV RFMS Scheme by RECTPCL New Delhi. the majority of the rural AP feeders were shifted under their scope.
Regarding submission of monthly AMR data along with feeder wise sanctioned load of AP consumers of all AP feeders, it is submitted that the data regarding sanctioned load is manually punched and uploaded on Distribution Return Portal of PSPCL website and the same is submitted to Hon’ble PSERC w.e.f. September, 2019 onwards on the prescribed format.
directive to ensure availability of monthly AMR data of all AP feeders along with sanctioned load of AP consumers connected to the feeder and feeder wise maximum demand without any further delay.
6.4
AP Consumption
(ii) Kandi area feeders
The Commission directs PSPCL to submit the physical progress of segregation of kandi area feeders /
(ii) Kandi Area Feeders
5 packages have been awarded for Rs.191.19 Cr. has been sanctioned by MoP/GoI for feeder segregation/ P consumer metering in five districts of Kandi Area in the State of Punjab under DDUGJY (Gurdaspur, Hoshiarpur, SBS Nagar, Rupnagar, SAS Nagar).
4 packages under DDUGJY Scheme of Kandi Areas work awarded on 01.12.2017 and 1 package was awarded on
The Commission notes that the directive regarding segregation of kandi area feeders is pending full compliance since FY 2013-
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providing of meters on quarterly basis. PSPCL is further directed to submit the data of segregated feeders/100% metered feeders along with monthly pumped energy data of AP feeders.
15.11.2018.
The completion of all the 5 packages is in 24 months from the date of order.
Out of 276 feeders in Kandi Areas the work of segregation of AP feeders is to be carried out on 82 Kandi Area Feeders and for remaining 194 feeders 100% metering of AP consumer is to be carried out under the scheme.
Out of 82 Kandi Area feeders for segregation the work has started on only 58 feeders and completed on 4 feeders but these 4 feeders are yet to run as independent AP feeders after testing by C.E.I Punjab.
Out of 194 Kandi Area feeders for 100% metering the work has not started even on a single feeder ending December, 2019.
The progress is stated to be slow on account of stiff resistance from the Kisan Unions. However, with the intervention of Govt. of Punjab and PSPCL Management, the pace of the work has now picked up and are likely to be completed by September, 2020 for 4 packages and for the 5th package the work shall be completed by November, 2020.
14. PSPCL should ensure that the work of feeder segregation/AP consumer metering is completed at the earliest. Further, PSPCL is directed to submit the data of segregated feeders/100% metered feeders along with monthly pumped energy data of AP feeders.
6.4
AP Consumption
(iii) 100% metering on A.P. consumers fed from urban feeders
The Commission directs PSPCL to complete 100% metering of all such AP connection fed from urban feeders. The Commission reiterates its directive that after due validation,
((iii) 100% metering on A.P. consumers fed from urban feeders
At present only 890 AP connections on urban feeders are pending for metering.
The detail of pending 890 AP connections is Suburban Amritsar (267), City Amritsar (168), Tarn Taran (69) and Bathinda (890). The delay is mainly due to stiff resistance from Kisan Union, Gherao and manhandling of PSPCL employees.
The Commission notes that the said directive is pending full compliance since FY 2013-14. The Commission further reiterates its directive that PSPCL should complete 100% metering of all such AP connection fed from urban feeders. The Commission after due validation, shall
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consumption of only metered AP consumers fed from urban feeders shall be considered while computing AP consumption.
be considering consumption of only metered AP consumers for computing AP consumption of PSPCL.
6.4
AP Consumption
(iv) Assessment of T&D losses on AP feeders:
The Commission directs PSPCL that till the engagement of an independent agency for the subject cited assignment, monthly readings of AP consumers on 1% sample feeders covered under 100% metering be recorded departmentally and the computation of losses based on the same be provided to the Commission along with the data of monthly pumped energy.
Tender Enquiry has been floated for engaging independent agency to take monthly readings of 1% sample feeder with 100% metering. As per the decision of the WTDs in their 232nd meeting held on 04.12.2019.
Due to insufficient bids the date of opening has been extended to 11.02.2020.
Regarding recording of the meter reading departmentally the same shall be provided w.e.f. January 2020 onwards as per instructions issued to DS offices.
The Commission reiterates its directive that PSPCL should ensure engagement of a 3rd party to compute T&D losses at the earliest. However, till the engagement of an independent agency, monthly readings of AP consumers on 1% sample feeders covered under 100% metering be recorded departmentally and the computation of losses based on the same be provided to the Commission along with the data of monthly pumped energy.
6.5
Improving power factor of AP feeders
During public hearings, some consumers raised the issue of poor power factor on the AP feeders due to non-installation
The List of Power factor of AP Feeders for November-2019 and December-2019 is attached where the Power factor of AP Feeders generally ranges from 0.5 to 0.95.
PSPCL has issued instructions to install shunt capacitor vide memo No. 797/801
The Commission observes that the power factor of some of the AP feeders is as low as 0.5. The Commission notes that
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of necessary capacitors by the farmers. PSPCL shall submit the power factor of AP feeders along with monthly pumped energy data to the Commission. PSPCL is directed to take necessary steps to ensure installation/operation of adequate capacity of capacitors at AP motors.
dated 16.04.2019
PSPCL has distributed Pamphlets to Kissan Union held meetings with them and advertised on PSPCL website to create awareness.
PSPCL has not given any information regarding addition of capacitors on 11kV AP feeders and improvement in power factor of these feeders achieved during FY 2019-20. The Commission directs PSPCL to take all necessary steps to improve the power factor of AP feeders and submit the report of compliance within 3 months of the issue of the Order.
6.6
Receivables
PSPCL is directed to take action against the defaulters as per the provisions of the Supply Code, 2014.
The total defaulting amount ending March 2019 is Rs.3081.59 crores which includes defaulting amount of Govt. Sector equal to 1769.02 crores and general defaulting amount equal to 1312.57 crore.
The total defaulting amount ending December, 2019 has reason to 3524.46 crore which includes the defaulting amount of Govt. Sector equal to 2129.79 crore and that of general defaulting amount as 1394.67 crore.
PSPCL is striving hard to recover outstanding dues from defaulting consumers.
As on 31.12.2019 the net recoverable amount of PSPCL excluding court cases, DSC cases and Government departments is Rs.1026.71 Cr.
It is pertinent to mention here that PSPCL has recovered/adjusted around 1606.10 crore against defaulting consumers upto 31.12.2019 during this Financial Year.
The Commission is determining the tariff on the basis of revenue assessed as per the Regulations and not on the basis of realization. Therefore PSPCL’s finances suffer. PSPCL is again directed to take action against the defaulters as per the provisions of the Supply Code, 2014.
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6.7
Consumer Service
(i) Interest on Security
The Commission reiterates its directive that PSPCL should ensure that no consumer is deprived of the right to get interest on security deposit as per the provisions of the Supply Code. As per regulation 17.2 of the Supply Code, 2014, the distribution licensee shall credit the interest on security to the account of the consumer annually and shall adjust it in the first bill raised after 1st April. PSPCL shall submit a certificate on affidavit by 30th June, 2019 that necessary compliance has been made.
Total consumers: 55299
New consumers: 10052
Change of Name: 170
Locked: 1185
Moved Out: 5028
Less than Rs. 1 Interest 38864
From above, it is clear that interest on security of 38864 consumers is insignificant and interest on security to the remaining consumers will be posted as per the due date after March-2020 as per PSPCL Regulations.
PSPCL was directed to check the data of over 38000 consumers with less than Rs.1, as interest on ACD.
As per regulation 16.4, the distribution licensee is required to review the ACD after every three years in case of LT consumers. The data therefore shows that PSPCL is not implementing the regulations. PSPCL should explain the reasons. The Commission reiterates the directive that PSPCL should ensure that no consumer is deprived of the right to get interest on Security Deposit as per the provisions of Supply Code, 2014.
6.7
Consumer Service
(ii) PSPCL shall ensure release of all new connections within the time period specified in Supply Code 2014
All connections are being released within stipulated time period irrespective of technical constraints and disputes. PSPCL only lags behind in case of GSC connections due to shortage of meters and after March-2020 all connections of GSC shall also release within the time periods specified in Supply Code, 2014.
PSPCL is directed to adhere to the timelines specified in Supply Code, 2014 for release of connections. Henceforth, the
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Commission shall review the Standards of Performance achieved by the licensee separately.
6.7
Consumer Service
(iii)PSPCL is directed to resolve the billing disputes within the time period specified in Supply Code, 2014
PSPCL endeavors to resolve the billing disputes in a timely manner. However, in order to monitor the timely redressal of billing related complaints, a pilot project on 1912 as a Single Touch Point has been started under 5 nos. PSPCL's DS Sub Divisions. This project will be further rolled out in other DS Sub Divisions in a phased manner after analyzing the performance and usefulness of this project to consumers.
Noted. Henceforth, the Commission shall review the Standards of Performance achieved by the licensee separately.
6.7
Consumer Service
iv)PSPCL shall extend the facility of on-line registration of all new connection applications during FY 2019-20.
The feature of Online registration of application for load above 100 KVA is already running on single window system provided by M/s Yeah and by In-house IT office. There is also provision of registration of connections online for load below 100KVA (SAP Area) which is being run under IT office. For left out Non SAP consumer below 100 kW separate application has been developed by IT office, which has been made live. A Commercial Circular No. 02 dated 03.01.2020 has been issued for registration of application below 100KVA (Non-SAP). With this, registration of all new/extension load applications has been made online during FY 2019-20.
Noted. Henceforth, the Commission shall review the Standards of Performance achieved by the licensee separately.
6.7
Consumer Service
(v)The website of the PSPCL is not user-friendly from the point of view of a consumer. A separate consumer services portal/page may be created where all copies of formats used to avail various services, the charges payable
“Online Consumer services “webpage has been re-designed to make it more user friendly from the point of view of consumers and make them aware about the online services provided by PSPCL. In this webpage, consumers are having the facility of consumer login for new connection, extension of loads, NOC etc., Load calculator, LDHF Calculator, bill payment, download bill receipt, current tariff, documents for consumers. A screenshot of the redesigned –homepage of PSPCL website is attached at Annexure-C
Noted. Henceforth, the Commission shall review the Standards of Performance achieved by the licensee separately.
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by the applicant/consumer, rights and obligations of consumers with all relevant rules and regulations shall be made available in an easy to understand and viewable format.
6.7
Consumer Service
(vi) To create awareness amongst consumers, PSPCL shall use electronic media, social media and all other means to reach the consumers.
(vi) 24x7 social media control room established to answer queries of consumers on social media twitter.com/PSPCLPb, facebook.com/PSPCLPb, instagram.com/PSPCLPb, Telegram: t.me/PSPCLPb, Email: [email protected], PSPCL WhatsApp (+91-9646106835) number and PSPCL Mobile APP have been made available for the convenience of consumers.
Noted. Henceforth, the Commission shall review the Standards of Performance achieved by the licensee separately.
6.7
Consumer Service
(vii) PSPCL shall regularly hold ‘Consumer grievances resolution week’ in every quarter at divisional/circle level where grievances of the consumers shall be resolved immediately by the senior officers.
(vii) PSPCL instructed all DS Zones vide CE/ Commercial office Memo no. 1626-30 Dated: 22.08.2019 (copy enclosed) to held monthly meetings regarding redressal of consumer grievances with the esteemed consumers. The status of monthly meetings conducted by all DS Zones is as below.
Noted. Henceforth, the Commission shall review the Standards of Performance achieved by the licensee separately.
6.7
Consumer Service
(viii)A ‘Frequently asked Question’ link shall be created which provides all information to the consumers regarding frequently raised queries
IT-related FAQ already available on homepage of PSPCL. Website since June 2018.
Noted. Henceforth, the Commission shall review the Standards of Performance achieved by the licensee separately.
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regarding PSPCL procedures and its rules/ regulations.
6.7
Consumer Service
(ix)PSPCL shall submit billing cycle wise key exception reports of both SAP and Non-SAP areas quarterly to the Commission
The Key Exception reports of billing Cycle-5 (Bi-Monthly) and Cycle-10 (Monthly) under SAP & Non SAP Areas are attached.
Noted. Henceforth, the Commission shall review the Standards of Performance achieved by the licensee separately.
6.8
Employee Cost
PSPCL shall submit category wise recruitment plan of employees for FY 2019-20 and for next MYT control period. PSPCL shall also submit a comprehensive cadre management plan for next 10 years.
Staffing study of manpower requirement based on work load norms of erstwhile PSEB was conducted by PWC in 2007 as desired by PSERC.
Consultant submitted revised report in 2011 after unbundling of PSEB in 2010.
Revised report recommended employee strength to be brought to 48767 from the then sanctioned strength of 77382. (Annexure D).
As per recommendation of PWC report, PSPCL constituted three committees of officers for suggesting modifications/revisions in Generation Organization, Distribution Organization and other Organization.
Generation Organization submitted to reduce sanctioned strength of GNDTP Bathinda from 2392 to 198 and that of GGSSTP Ropar from 2927 to 1763.
According two agendas placed before BOD.
Recommendations of the committee for other organization staffing is awaited as the committed conducted its first meeting on 15.01.2020.
Proposal regarding rationalizing manpower for store and workshop organization Ludhiana is received and against present strength of 1046 employees, proposed strength is 695.
PSPCL has not submitted category wise recruitment plan of employees for FY 2019-20 and for the next MYT control period. The PWC report was only valid upto 2018-19. PSPCL must prepare a comprehensive cadre management plan for the next 10 years.
PSPCL is directed to submit category wise details of sanctioned posts in BBMB along with staff posted and vacancies for the last five years. PSPCL should explain the reasons for not filling the vacancies of Punjab share in BBMB. PSPCL is also directed
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BOD of PSPCL in their 73rd & 75th meetings held on 2.2.2019 and 01.06.2019 respectively decided to discontinue recruitment of many categories of employees to reorganize employee strength.
Against cadre strength of 83445 of PSEB on 16.04.2010 (date of unbundling) PSPCL cadre strength was 78125 against PWC recommendation of 48767. The present sanctioned strength of PSPCL is 75757 as on 30.06.2019 and posted strength of PSPCL as on 30.06.2019 is 34555.
Also against sanctioned strength of 4350 of PSTCL as per PWC report sanctioned strength of PSTCL is 5129 and posted strength of PSTCL is 2774 on 08.01.2020.
Also 1746 PSPCL officers/officials are working in PSTCL as on 08.01.2020.
Also since 30.06.2019, PSPCL has recruited another 225 employees apart from another 137 numbers recruited on compassionate grounds.
PSPCL has submitted data that comparing data of 31.03.2010 with the max demand has increased by 70.62%, consumers have increased by 37.01%, Load has increased by 40.42%, Energy sold has increased by 40.62%, DTs have increased by 164.30%, 33kV/66kV line length has increased by 30.09%, No. of grids have increased by 57.40%, 11kV lines have increased by 50.17%.
LT lines have decreased by 11.94%.
Careful deliberation/reconsideration of recommendations of PWC are required for restructuring of PSPCL.
to submit the status report regarding re-deployment of surplus staff from GNDTP/ GGSSTP within 3 months.
PSPCL shall also submit information regarding out-sourced services/staff employed by the utility along with expenses incurred.
PSPCL is directed to prepare a detailed Training Need Assessment (Technical, IT, Soft Skill, Finance etc) for employees at various levels and submit the same to the Commission within 6 months of issue of this tariff order.
6.9
Performance parameters
(A) DISTRIBUTION
(i) Damage to DTs
PSPCL should supply rating wise information regarding DTs
(A) Rating wise DTs installed, DTs damaged and DTs Overloaded for FY-2018-19.
PSPCL has not supplied the rating wise damage rate of DTs for FY 2019-20. The damage rate of DTs (without
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installed, DTs damaged and number of overloaded DTs during FY 2018-19. The damage rate of DTs (excluding warranty of new & repaired DTs) upto Dec. 2018 is 3.41% as compared to 3.60% during the same period of last year. PSPCL shall bring down the damage rate of DTs to below 3% (excluding warranty of new & repaired DTs) during FY 2019-20.
6.3 KVA
10 KVA 16 KVA 25 KVA 63
KVA 100 KVA
Above 100 KVA
TOTAL
INSTALLED 11534
3 325074 182107 201809
116727
103309
22399
1066768
DAMAGE (Without
Warranty & Theft)
3710 9242 5770 9767 6862 6731 415 42497
OVERLOADED
2075 1396 3688 202 210 170 41 7782
To reduce damage rate of DTs during first quarter of FY 2019-20, 6147 no., during second quarter of FY 2019-20, 5932 no. and during third quarter of FY 2019-20, 9718 no. DTs have been Augmented for deloading. PSPCL is hopeful to bring down the damage rate of DTs during FY 2019-20.
Damage rate of DTs excluding warranty, repair, theft and storm upto 12.2019 is 3.50%.
warranty & theft) upto Dec. 2018 was 3.41% whereas the damage rate during the same period in FY 2019-20 has been reported as 3.50%. Thus, there is no reduction in damage to DTs.
The Commission also notes that the percentage of overloaded 6.3KVA, 10KVA and 16KVA DTs is high as compared to higher rating DTs. The Commission directs PSPCL to check overloading and load balancing of DTs to bring down the damage rate of DTs below 2.5% during FY 2020-21. PSPCL is directed to submit a quarterly DT damage along with age analysis report.
6.9
Performance parameters
(II) Standards of Performance
PSPCL is directed to ensure implementation of the Standards of
Standards of performance parameters which includes information regarding billing mistakes, faulty meters, line breakdowns, outages, equipment failure, voltage fluctuations, release of new connections, shifting of meter/lines, consumer complaints, reliability indices etc. a meeting was held with Hon'ble Commission on dated 18,09,2019 with Director/Distribution, PSPCL, wherein new instructions were
Noted. Henceforth, the Commission shall review the Standards of Performance achieved by the licensee separately.
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Performance specified by the Commission and submit quarterly information to the Commission.
passed regarding SOP's. Further these instructions were passed on to all distribution zones for strict compliance
6.9
Performance parameters
(III) it has been observed from the MIR data of damaged transformers (Format-29) that the damage rate of distribution transformers got repaired from the Firms during FY 2017-18 was 15.2%. PSPCL is directed to inform the Commission regarding the reasons for such a high rate of damage of repaired transformers and also the remedial measures being taken to reduce the damage rate.
On comparison of the data of format MR-14 and MR-29 of the MIR for the period from 2010-11 to 2019-20 upto september-2019) ,(copy of the comparison attached-Annexure-E) it was found that 235536 T/Fs were got repaired from various firms during this period. Whereas as per MR-29 ending 09/2019, 111793 T/Fs were shown as installed by all the Chief Engineer/Operations Zones which seems to be incorrect. The T/Fs repaired by various firms under this organization (Chief Engineer/Store & Workshop, Ludhiana) ending 09,2019 were 235536 and damaged T/Fs during this period were 102147. The difference of repaired & damaged T/Fs which was 133389 had not been added in installed T/Fs by the concerned Operation Zones. As per annexure attached, 35116 T/Fs were shown as installed upto 03/2011.had the above difference of 133389 Nos. T/Fs been added to the already installed T/Fs( i.e. 35116) then Total installed T/Fs would have been 168505( 35116+133389) instead of 35116. During the year 2019-20 ( upto September 2019) 11139 T/Fs were damaged out of 168505 total No. of installed T/Fs hence damaged rate is 6.6%
It is further added that a letter vide memo no. 3877/81 dated 15.07.2019 and reminders have been already written to all CE/Operations of all zones to reconcile the figure as detailed in above para. After reconciliation from all operation zones current figure of damaged rate can be initiated.
Noted.
6.9
Performance parameters
(B) Sub-Transmission System
(i) Overloading of grid sub-stations
There were 9 No. 66KV Grids with loading more than 90% out of these 9 No. Grids, work of 4 No. Grids had been completed and 1 No. grid has been de-loaded by shifting the load to nearby grids and de-loading of balance 4 No. Grids has been planned in TWL 2018-19.and subsequently in TWL 2019-20 These
Noted.
PSERC – Tariff Order FY 2020-21 for PSPCL 198
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
PSPCL is directed to ensure deloading of the nine number grid sub-stations with loading more than 90% before start of paddy season of 2019.
4 No. grids will be de-loaded by 31.03.2020.
(II) Maintenance of sub-transmission system
PSPCL is directed to ensure adequate number of line staff at the load centres to reduce the response time to attend to breakdowns.
(B) Sub-Transmission System
(ii) The status of line staff for maintenance at 66 KV Sub-Transmission System under PSPCL is as below:
a) Additional Posts have already been created under P&M Circle Jalandhar. The vacant post of lineman's are filled during promotion from ALM to Lineman and vacant posts of ALM's are to be filled from new recruitment of ALM's for carrying out maintenance of 66 KV Lines.
b) 2 nos. AE/TL S/D Ropar and Malerkotla have been created under P&M Circle Patiala
c) The vacant post of 9 no. lineman's all filled during promotion from ALM to Lineman and 31 no. vacant posts of ALM's are to be filled from new recruitment of ALM's for carrying out maintenance of 66 KV Lines under P&M Circle Bathinda..
d) Additional Posts have already been created under P&M Circle Amritsar. The vacant post of 7 no. lineman's are field during promotion from ALM to Lineman and 18 no. vacant posts of ALM's are to be filled from new recruitment of ALM's for carrying out maintenance of 66 KV Lines.
e) A new AEE/TL S/D West Ludhiana has already been created under P&M Circle Jalandhar. However, the working labor shall be outsourced from contractors/ service providers.
The process of new recruitment of ALM's is under process.
Noted.
PSERC – Tariff Order FY 2020-21 for PSPCL 199
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
6.9
Performance parameters
(C) Preventive maintenance of 11/66 kV Feeders
PSPCL shall formulate a comprehensive feeder – wise maintenance schedule to ensure un-interrupted power supply to the consumers.
PSPCL shall submit feeder wise monthly trippings/breakdowns and total time period of interruptions.
PSPCL shall also submit details of electrical accidents (both fatal and non-fatal) which occurred on the feeders along with reasons for the mishap
(C) For Preventive maintenance of 11/66 kV Feeders, instructions were issued by the o/o. Director/Distribution.
During 3rd Quarter of FY 2019-20, Maintenance of 4248 nos. 11 KV Feeders have been done by DS Zones and maintenance of 258 nos. 66 KV Lines have been done by P&M Organisation.
The information regarding monthly trippings/ breakdowns and total time period of interruptions has been supplied and attached as Annexure-K-1 to K-3.
Details of electrical accidents (both fatal and non-fatal) occurred on the feeders along with reasons for the mishap is enclosed as annexure L.
Noted.
6.10
Accounting of Defective Transformers after repair
The Commission notes that the repaired transformers are being issued to Accounting units of PSPCL in the field, on the value based on weighted average method, which is not appropriate. The same transformer when issued to
The receipt/issue of damaged and thereafter repaired transformers is being done as per respective method prescribed in Memo No. 11893 dt 19.9.1995 of Chief Accounts Officer/Commercial Accounting Cell PSEB Patiala.
So currently the accounting done by the office of AO/Evaluation PSPCL Patiala is as per the policies of the PSPCL. Annexure-G
The reply of PSPCL in this regard is not convincing. Transformers are a part of the GFA, therefore, they should be issued on the original GFA value along-with accumulated depreciation. Accordingly, PSPCL is directed to issue
PSERC – Tariff Order FY 2020-21 for PSPCL 200
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
other Accounting Unit in the field after repair has to be valued on actual value basis and not on weighted average method. Since the Fixed Assets Cards/Registers are already being maintained by PSPCL with complete nomenclature, value of the transformer and depreciation thereof so PSPCL is directed to re-examine the accounting method of issuing the transformers after repair and devise a proper accounting procedure. PSPCL shall account for any loss due to damaged transformers
proper instructions regarding accounting policy for issuing of transformers to the accounting units after its repair.
6.11
(i) Fixed Asset Register
(i) PSPCL is directed to maintain the updated Fixed Assets Registers and make them available online within a year.
(i) It is submitted that in compliance of directives of PSERC, an M.S. Office (Excel) utility has been designed to for preparation of fixed assets registers and calculation of depreciation, which is being used by all field accounting uttits through this utility, uniform assets and depreciation record has been maintained by all the accounting units of PSPCL. Further, the process of implementation of ERP system has also been initiated by PSPCL and this work has been awarded to M/s Tech Mahindra Ltd. As such online preparation of fixed assets register will be taken up at the time of implementation of
(i) PSPCL has not made available Fixed Assets Register online.
The Commission reiterates its directive to make the Fixed Asset Register available online within a period of six months.
PSERC – Tariff Order FY 2020-21 for PSPCL 201
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
(ii) Segregation of Accounts
(ii) The Commission reiterates its directive to segregate the accounts for distribution & generation (project wise) businesses for determination of tariff as per Regulation 5 of MYT Regulation
(iii) PSPCL is also directed to further segregate the accounts of its distribution business into wheeling business and retail supply as per Regulation 6 of MYT Regulation.
ERP.
As such Hon'ble Commission is now requested to drop this directive.
As PSPCL has started the implementation of ERP Software package in Oct., 2019 which shall be having three major modules i.e. HR, Finance & Accounts and Material Management. Concerned Finance office needs to co-ordinate for maintaining Fixed Assets Register in ERP with ERP team.
(ii) The Statement of Allocation and Apportionment of Expenses for FY2018-19 (Provisional) is placed as ANNEXURE-H of the PSPCL submission.
(ii) PSPCL’s submission in Annexure-H (Statement of Allocation and Apportionment of Expenses for FY2018-19 Provisional) shows that PSPCL has not complied with PSERC directives for segregation of the accounts of distribution and generation (project wise) business till date. Moreover, PSPCL has not intimated the reasons/ difficulties being faced in implementation of the same. The Commission directs PSPCL to segregate accounts immediately and submit compliance report within three month.
PSERC – Tariff Order FY 2020-21 for PSPCL 202
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
(iii)The segregation of costs/expenses and revenues of the distribution business into wheeling business and retail supply business is not available in the present accounting system. The accounts of Wheeling and retail supply are integrated and are being maintained by same accounting units i.e. Distribution divisions. Further, as desired bv PSERC to formulate system to maintain accounts in such a way that the information with regard to segregation the accounts of distribution business into wheeling business and retail supply business is concerned, the matter is under active consideration of the management to revive the P&M divisions, shortly, to maintain accounts of transmission system separately. lt is also added that the process of implementation of ERP System has also been initiated, the possibilities of segregation will be explored in the developing stage.
(iii) Further, segregation of the accounts of its distribution business in wheeling business and retail supply business has also not been done till date.
The Commission directs PSPCL to complete the task of segregation of accounts which is required as per Regulation-5 and 6 respectively under PSERC MYT Regulations-2014 and MYT Regulations-2019 within a period of 6 months and submit its report in this regard.
6.12
DSM
PSPCL is directed to execute at least one pilot project each for Ag. DSM and efficient lighting to showcase the benefits to the stakeholders.
Regarding implementation of Agriculture Demand Side Management (Ag-DSM) in the state of Punjab:
For Agricultural DSM, 11kV Wazir Bhullar Fdr under Beas Division has been selected.
Wazir Bhullar feeder has 158 no. consumers with different capacity pumpsets.
Consumers have given consent for replacement of their motors with BEE, 5 Star, Pumpsets.
Replacement of ICLs/Tube Lights with LEDs in the buildings of PSPCL departmentally:
PSPCL is directed to share quarterly progress on DSM measures taken by it.
PSERC – Tariff Order FY 2020-21 for PSPCL 203
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
WTDs in their 211th meeting held on 23.08.2018 approval the procurement of 4137 nos. 9W LED lamps & 42582 nos. 20W LED Tubelights in two phases
P.O. HD506 dt.11.10.2018 is placed on M/s EESL for supply of 4137 nos. 9W LED lamps and 42582 nos. 20W LED Tubelights for replacement of ICL's and Fluorescent Tubes in buildings of PSPCL.
Material has been received from EESL against above P.O.
Various departments of PSPCL are replacing ICLs and Fluorescent Tubes.
Distribution of 9 W LED Bulbs among the consumers that falls under the category of BPL, SC & BC category:
Proposal to distribute 2 nos. 9W lamps to 1.01 lac BPL, 15.48 lac of SC and 1.28 lac of BC consumers of subsidized category (load upto 1kw) at a cost of 21.72 Cr. was put up to PSERC vide memo 2300 dated 18.07.2018.
Scheme for Phase-I was approved by PSERC for execution in vide memo 2179 dated 5.12.2018 with certain conditions.
PSPCL brought out difficulties to comply the conditions and submitted revised proposal.
The revised proposal was approved by PSPCL for Phase-I of 17.75 lac 9W LED lamps.
PSPCL allocated funds of Rs.10 Cr. for Phase-I of the scheme.
Replacement of conventional incandescent lamps /CFLs/Tube lights and Fans with efficient 20 Watt LED Tube Lights & 50 Watt BEE star rated Energy Efficient Fans in the Government Hospitals:
Proposal to replace ICLs, CFLs,
PSERC – Tariff Order FY 2020-21 for PSPCL 204
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
Tubelights and Fans of Govt. Hospitals with Energy Efficient Appliances was submitted to PSERC vide memo 711 dated 04.09.2019.
PSERC held the meeting with PSPCL officers on 29.10.2019 to discuss the scheme.
B&R Punjab, PWD and PHSC, Mohali have been approved to issue necessary instructions for joint verification.
Joint Verification for all hospitals covered in the scheme has been carried out with PWD, B&R Punjab.
PWD, B&R Punjab and PHSC Mohali have been asked to concur the execution of DSM scheme.
Regarding disposal of material, matter has been taken separately with above offices.
6.13
Surplus power
PSPCL is directed to continue with its efforts in selling surplus power through the exchange / traders in order to reduce the fixed cost liability on consumers of the State. PSPCL should submit quarterly report of power sold, per unit sale price and profit earned through sale of power.
PSPCL is also directed to
For sale of surplus power PSPCL has created a dedicated cell consisting of a Dy. CE, an Addl. SE and an AEE to manage sale of surplus power.
PSPCL has appointed M/s NHPC Ltd for sale of surplus power on behalf of PSPCL.
PSPCL is considering tenders for sale of power to other Utilities/Discoms and participating in every tender except for the issues like paddy season, coal related conditions, transmission corridor congestion etc.
PSPCL has floated Tender enquiry for Sale of Surplus Power (500 MW RTC & 1000 MW night hours) in which no one participated so tender enquiry was dropped finally.
With above efforts PSPCL has sold 14.8416 Mus of Energy at an average rate
PSPCL’s reply is noted efforts in this direction need to be continued.
PSERC – Tariff Order FY 2020-21 for PSPCL 205
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
include in the ARR the details of power surrendered/proposed to be surrendered during the year along with the financial implication regarding the fixed cost of this power.
of Rs. 4.97 per KWH at Punjab periphery in Day Ahead Market and 3.1595 Mus of Energy at an average rate of Rs. 5.21 per KWH at Punjab periphery in Term Ahead Market in Exchange during the period Oct’19 to Dec’19 by daily bidding.
In 3rd quarter of 2019-20, 18.MUs have been sold at the average rate of Rs.4.99 to earn benefit of Rs.3.46 Cr. with variable cost and Rs.1.18 Cr. along with normative fixed cost.
6.14
Load flow studies
PSPCL should submit all proposals for sub-transmission system works supported by load flow studies
The requisite software has been received from PSTCL and in this regard the required technical data ihas been obtained from concerned DS/P&M organization of PSPCL and PSTCL. The work of data feeding in PSS/E software is being initiated and under process. The process of load flow studies shall be commenced by 28.02.2020.
The Commission notes the reply of PSPCL and further directs PSPCL that henceforth no proposal shall be accepted without the supporting load flow studies.
6.15
Harmonics Measurement
As per Regulation 24 of the Supply Code, 2014, the distribution licensee is required to monitor the harmonic currents and voltages at its HT/EHT Sub-stations and of HT/EHT consumers, which are prone to generation of harmonics. It has further been provided that the consumers contributing harmonics distortion in excess of
Meetings of the Committee constituted vide EIC/Commercial Office order no. 227/CC/DTR-104 dt. 21.08.2019 to consider the process of monitoring/measurement of voltage/ current harmonics/ Total harmonics distortion (THD) was concluded on 30.09.2019 and committee had submitted its report/ Minutes of Meeting (MoM) on 11.10.2019, which were circulated to all the concerned offices including the O/o CE/ARR & TR vide this office Memo no. 213 dated 11.10.2019. The above proposal has already been forwarded to the PSERC on dated 15.11.2019 by the O/o CE/ARR & TR. vide memo no. 2530 for your consideration.
Similarly comments desired on draft regulations on Power Quality were also submitted to the Commission through the O/o CE/ARR & TR vide this office Memo no. 237 dated 08.11.2019, where a formula was also proposed regarding imposition of penalty for excess values of THD.
Directions/decision on proposal is awaited before further action is taken towards
The Commission is already in the process of specifying harmonic limits including its measurement after following due process. PSPCL is directed to ensure that necessary equipment/ infrastructure including manpower training for collection and analysis of data captured from Power Quality meters/ analysers are
PSERC – Tariff Order FY 2020-21 for PSPCL 206
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
specified standards shall be served with a three months notice to rectify the violation, failing which penalty can be imposed as prescribed by the licensee with the approval of the Commission.
Power Intensive category of Industrial consumers are prone to generation of harmonics affecting quality of supply and also resulting in long term damage to the electrical equipments. The Commission observes that the distribution licensee is neither measuring the harmonics injected by the PIU category consumers in to the system nor has any penalty been suggested for violation.
PSPCL is directed to submit a complete plan regarding installation of necessary power quality meters for measurement
compliance of the directive.
put in place within specified time period.
PSERC – Tariff Order FY 2020-21 for PSPCL 207
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
of harmonics levels along with time frame for recording the harmonics. PSPCL may also recommend penalty to be recovered from the PIU consumers contributing harmonics in excess of the specified standards. PSPCL shall submit the proposal by 1st August, 2019.
6.16
Supply of Sales/ revenue data
i) PSPCL is directed to supply category wise and slab wise number of consumers, connected load/demand, consumption (in kWh as well as kVAh), power factor and revenue data to the Commission along with ARR for next MYT. The revenue data shall contain separate figures of SoP, rebate and surcharge
The slab wise data, as finalized by PSERC, has been made available in system from Jan 2019. The data in desired slab wise format prior to Jan 2019 is not available in the system as logic for slab wise was developed in system w.e.f Jan 2019. However, while testing the report, some structural issues were there in slab wise report which were rectified after consultation with all concerned offices and the correct report was made available in system from April 2019. However data for the year 2018-19 has also been provided in slab wise format from 01.01.2019 to 31.03.2019.
Also the data for the FY 2018-19 has been supplied on prorata basis, based upon the data of FY 2019-20 H1.
Noted.
6.16
Supply of Sales/revenue data
ii) During processing of ARR for FY 2019-20, it has been noticed that kVAh consumption has
The KVAh billing for LS, MS and other categories was started from FY 2014-15 onward in different timelines. The data of 40 no. towns was also in transit due to migration from NON SAP to SAP system during FY 2014-15 and 2015-16. As such, the data may contain inflated bills and dial over cases
Noted.
PSERC – Tariff Order FY 2020-21 for PSPCL 208
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
erroneously been shown as kWh consumption thus affecting the Energy Balance in the Tariff Order. It is apprehended that same error might have occurred in the consumption data supplied to the Commission since introduction of kVAh tariff w.e.f. FY 2014-15. PSPCL is directed to supply the correct consumption data in kWh for the previous years within 3 months from the date of issue of this Tariff Order.
during that period. The reversal activity regarding inflated/ dial over cases is being monitored regularly from FY 2019-20. As such the data for FY 2019-20, is being supplied as per the requirement of PSERC.
6.17
Review of Rebates/ surcharges
i) PSPCL is directed to examine in detail the effect of introducing ToD tariff on the recovery of revenue and flattening of load curve. PSPCL shall submit detailed report by 1st Nov. 2019 along with a fresh proposal for next MYT.
The load curves have been studied by the O/o CE/PPR and inference is as under:
ToD tariff during peak season of Summer/Paddy/Khariff:
It has been observed that with regular implementation of ToD from financial year 2017-18 onwards has shifted from peak period of 06.00PM to 10.00 PM of financial year 2013-14 to 2016-17, to other period usually 3.00PM to 4.00PM. It can be inferred that ToD tariff has helped in checking peak demand during peak hours. To flatten the load curve, further night tariff has also been introduced. So far 74 no. industries have opted for it with cumulative load of 226 MVA upto 31.01.2020.
ToD tariff during lean season of Winter/Rabi:
The Commission notes the reply of PSPCL. However, the Commission further directs PSPCL to study the issue of morning peak and suggest revision in TOD, if any required during the next Tariff Petition.
PSERC – Tariff Order FY 2020-21 for PSPCL 209
Directive No. Directive for FY 2019-20
Status of Compliance submitted by PSPCL (ending December, 2019)
Comments by PSERC &
directives for FY 2020-21
During above period load curves do not suggest any perceptible change in profile during the night period of lean season from 10.00 PM to 6.00AM next day. Thus the ToD tariff introduced during the lean season has not enhanced utilization of power during night hours since the demand falls steeply during the winter months in these hours.
6.17
Review of Rebates/ surcharges
(ii) rise in consumption of various categories of consumers and benefits accrued to PSPCL with the introduction of Threshold limit rebate. PSPCL shall submit detailed report by 1st Nov. 2019
Regarding this part of directive, information regarding industrial consumers was collected and accordingly following observation has been made:
Number of Threshold units and consumers availing Threshold rebates has shown upward trend. Consumption of Threshold units by LS category consumers has resulted in additional sale of Rs. 118.97 Cr. of PSPCL for the period of 2016-17 to 2018-19.
The Commission notes the reply of PSPCL.
NEW DIRECTIVES
1. Recording Of maximum demand (in KW) of DS/NRS Consumers PSPCL shall start recording maximum demand (in KW) of all DS & NRS Consumers who are not covered under contract demand system and where static meters have been installed. PSPCL is directed to complete installation of compatible meters of the consumers proposed to be covered under the contract demand/load based tariff system and create awareness amongst them about the proposed tariff system. The compliance of this directive may be intimated to the Commission within three months of the issue of this Tariff Order.
2. Audit of Sales & Revenue figures PSPCL is directed to supply division-wise category-wise and slab-wise figures of sales and revenue for FY 2019-20 by 30th June, 2020. PSPCL is directed to submit quarterly report on category wise/slab wise revenue assessed vis-à-vis the sales for the year 2020-21 onward.
3. Audit of Capital Works PSPCL is directed to submit division-wise capital expenditure incurred scheme wise for the last three years by 31st July, 2020.
4. Details of Capital Expenditure PSPCL is directed to submit the quarterly details of Capital Expenditure and Capitalisation with clear break up between Spill Over Schemes and New Schemes approved for the next MYT Period. Further, PSPCL is also directed to supply quarterly physical progress scheme wise along with expenditure.
PSERC – Tariff Order FY 2020-21 for PSPCL 211
Chapter 7
Determination of Tariff for FY 2020-21
7.1 Aggregate Revenue Requirement for FY 2020-21
The Commission in Table 79 (Chapter 4) of this Tariff Order has determined the net
Revenue Requirement for FY 2020-21 as Rs. 31519.45 Crore. The cumulative
revenue gap at existing tariff, ARR and the Average Cost of Supply for FY 2020-21 is
worked out as follows:
Table 7.1: Aggregate Revenue Requirement for FY 2020-21
(Rs. Crore)
Sr. No.
Particulars Allowed by the Commission
I II III
1. Net Revenue Requirement (after excluding NTI of Rs. 1080.72 Crore) 31519.45
Regulation 14 of PSERC MYT Tariff Regulations, 2019, specifies that, the tariff for
sale of electricity from a generating plant shall comprise of two parts, namely;
7.7.1 Annual Fixed Charges (Capacity Charges)
Regulation 37 of PSERC MYT Tariff Regulations, 2019, specifies that, the fixed cost
of a generating station shall be computed on annual basis, based on norms specified
under these regulations, and recovered on monthly basis under capacity charge
(inclusive of incentive and energy charge for Hydro station), which shall be payable
by the beneficiaries in proportion to their respective share/allocation in the saleable
capacity of the generating station. Accordingly, based on the project wise ARR/AFC
determined for FY 2020-21 as shown in Table 7.6, the Annual Fixed Charges
(Capacity Charges) for PSPCL‟s Generating Stations are determined as under:
Table 7.7: Annual Fixed Charges (AFC) of Generation Projects for FY 2020-21
Sr. No.
Plant
Annual Fixed/Capacity
Charges (Rs. Crore)
Generation (MkWh)
Indicative FC (paise/kWh)
I II III IV V
A Thermal Plants 1074.51
1. GGSSTP 536.44 *5546.60 **2150 *96.72 **249.51
2. GHTP 538.07 *5904.99 **2705 *91.12 **198.92
B Hydel Plants 302.24
(50% of AFC) (Rs. Crore)
1. Shanan 18.40 470 39.15
2. UBDC 29.22 364 80.27
3. RSD 180.12 1500 120.08
4. Mukerian 51.71 1165 44.39
5. Anandpur Sahib 22.42 685 32.73
6. Micro Hydel 0.37 15 24.67
7. BBMB *** * Worked out by taking Normative Annual Plant Availability Factor (NAPAF) of 85%. ** Worked out as per estimated schedule. *** AFC is determined by CERC.
PSERC – Tariff Order FY 2020-21 for PSPCL 220
Accordingly, the total AFC (50% for Hydro Plants) recoverable in the case of thermal
and hydro plants are:
i) Thermal - Rs. 1074.51 Crore
ii) Hydro (excluding BBMB) - Rs. 302.24 Crore
Full AFC for both thermal and hydro plants will be payable on achievement of
normative plant availability as specified in PSERC MYT Tariff Regulations, 2019.
7.7.2 Energy Charges
Regulation 38.1 of PSERC MYT Tariff Regulations, 2019, specifies that, the Energy
(Variable) Charges for a thermal generating plant shall cover the primary fuel cost,
secondary fuel cost, cost of limestone or any other reagent, as applicable and, shall
be payable by every beneficiary for the total energy scheduled to be supplied to such
beneficiary during the calendar month on ex-power plant basis, at the energy charge
rate of the month (with fuel price adjustment). Accordingly, based on the project wise
Fuel Cost/AFC for FY 2020-21 as shown in Table 7.6, the Energy Charges for
PSPCL‟s Generating Stations are determined as follows:
Table 7.8: Energy Charges for Thermal Generating Station FY 2020-21
Sr. No. Plant Fuel Cost
(Rs. Crore) Generation
(MkWh) Energy Charges
(paise/kWh)
I II III IV V
1. GGSSTP 814.58 2150 378.87
2. GHTP 1038.08 2705 383.76
Table 7.9: Energy Charges for Hydro Generating Station FY 2020-21
Sr. No. Plant Variable Cost (50% of AFC) (Rs. Crore)
Generation (MkWh)
Energy Charges (paise/kWh)
I II III IV V
1. Shanan 18.40 470 39.15
2. UBDC 29.22 364 80.27
3. RSD 180.12 1500 120.08
4. Mukerian 51.71 1165 44.39
5. Anandpur Sahib 22.42 685 32.73
6. Micro Hydel 0.37 15 24.67
7.7.3 Total charges for Generating Stations (Thermal and Hydel)
The total charges (Capacity and Energy) for generating plants are summarized as
under:
PSERC – Tariff Order FY 2020-21 for PSPCL 221
Table 7.10: Total charges for PSPCL’s Generating Stations for FY 2020-21
(Paise/kWh)
Sr. No. Plant Capacity Charges
Energy Charges Total Charges
I II III IV V = (III+IV)
A Thermal Generating Stations
a) For generation as per NAPAF
1. GGSSTP 96.72 378.87 475.59
2. GHTP 91.12 383.76 474.88
b) For generation as per scheduled energy
1. GGSSTP 249.51 378.87 628.38
2. GHTP 198.92 383.76 582.68
B Hydel Plants
1. Shanan 39.15 39.15 78.30
2. UBDC 80.27 80.27 160.54
3. RSD 120.08 120.08 240.16
4. Mukerian 44.39 44.39 88.78
5. Anandpur Sahib 32.73 32.73 65.46
6. Micro Hydel 24.67 24.67 49.34
* The Charges for BBMB work out to be Rs. 0.93 per unit (Rs. 382.00 Cr. for 4126.06 MUs)
7.8 Wheeling Charges for using distribution network of PSPCL
The Commission has worked out the total distribution capacity of PSPCL for FY
2020-21 as 13323.58 MW (net of transformation losses and auxiliary consumption).
Accordingly, wheeling charges for FY 2019-20 are determined as under:
Table 7.11: Wheeling Charges for FY 2020-21
Sr. No.
Details Units Wheeling Charges
I II III IV
1. Input Energy at the distribution periphery (as per Table 11 in Chapter 4 of the Tariff Order)
MkWh 53966
2. Distribution capacity of PSPCL (Net) MW 13323.58
3. Revenue requirement for wire business of distribution network (Table 7.6)
Rs. Crore 3609.61
4. Wheeling charges for using distribution network of PSPCL
Rs./MWh 668.87
Rs. /MW /month
225766
7.9 Open Access (OA) Charges
OA Charges for the month of April 2020 and May 2020 shall remain as per Tariff
Order for FY 2019-20 as ordered by the Commission in the Interim Order dated
18.03.2020. For the period of 01.06.2020 onwards of FY 2020-21, Open Access
charges are determined as under:
PSERC – Tariff Order FY 2020-21 for PSPCL 222
7.9.1 Wheeling Charges
Regulation 25 of PSERC (Terms and Conditions for Intra-state Open Access)
Regulations, 2011 provides that, Wheeling Charges shall be payable by an Open
Access customer who utilises the distribution network for wheeling of electricity.
Accordingly, wheeling charges for use of distribution network of PSPCL are
determined as under:
a) For Long Term/Medium Term Open Access Customers = Rs.225766/MW/Month
b) For Short Term Open Access Customers = Rs. 668.87/MWh
However, in case of wheeling of power generated from NRSE project for
consumption within the State, transmission and wheeling charges shall be levied @
2% of the energy injected into the State Grid, irrespective of the distance i.e.
additional 2% of the total energy shall be injected at injection point(s). 10% of the
average revenue realized by distribution licensee from such additional injection shall
be passed on to the STU/Transmission licensee for compensating it on account of
transmission charges. In case of wheeling of power generated from NRSE project
outside the state, full transmission and wheeling charges shall be leviable.
Provided that in case of wheeling of power for consumption within the State,
generated from NRSE project in the State, achieving commercial operation (COD)
from 09.07.2015 to 31.03.2017, no transmission and wheeling charges shall be
leviable, irrespective of the distance, for a period of 10 (ten) years from its date of
commercial operation (COD).
7.9.2 Transmission & Distribution losses
As per Regulation 30(2) of PSERC (Terms and Conditions for Intra-state Open
Access) Regulations, 2011, the Open Access customers shall bear Transmission &
Distribution losses as under:
(i) OA customers at 132/220/400 kV
2.48%
(ii) OA customers at 66/33 kV 15% of distribution losses (11.24%),
which works out to 1.69%, in addition
to Transmission Loss of 2.48%.
iii) OA customers at 11 kV 40% of distribution losses (11.24%),
which works out to 4.50%, in addition
to Transmission Loss of 2.48%.
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7.9.3 Cross subsidy surcharge
As per Regulation 26(2) of PSERC (Terms and Conditions for Intra-state Open
Access) Regulations, 2011, the cross-subsidy surcharge for various categories of
consumers are determined as under:
Large Supply 72 paise/kWh
Domestic Supply : 0 paise/kWh
Non-Residential supply : 129 paise/kWh
Bulk Supply : 128 paise/kWh
Railway Traction : 83 paise/kWh
8 Date of Effect
The Commission decides to make the new tariff/Charges applicable from June
01, 2020 except where specified otherwise in this Order. The tariff determined
above shall remain operative till March 31, 2021. For the month of April 2020
and May 2020, tariff/charges shall be applicable as per Tariff Order for FY 2019-
20 as specified by the Commission in the Interim Order dated 18.03.2020.
This Order is signed and issued by the Punjab State Electricity Regulatory
Commission on this day, the 1st of June, 2020.
Date: June 01, 2020
Place: CHANDIGARH
Sd/-
(Anjuli Chandra) MEMBER
Sd/-
(S.S. Sarna) MEMBER
Sd/-
(Kusumjit Sidhu) CHAIRPERSON
Certified
Sd/-
Secretary
Punjab State Electricity Regulatory Commission,
Chandigarh.
PSERC – Tariff Order FY 2020-21 for PSPCL 225
ANNEXURE - I
GENERAL CONDITIONS OF TARIFF
1. General
Supply of electric energy to various categories of consumers shall be chargeable
under the relevant Schedule of Tariff. The particular schedule applicable to a new
consumer shall be determined with reference to the nature and/or quantum of
load/demand and intimated to the prospective consumer at the time of issue of
Demand Notice. This shall be subject to review on the basis of any change in nature
and/or the quantum of actual connected load/demand.
2. Tariffs to be exclusive of levies
The tariffs i.e. Fixed and Energy Charges shall be exclusive of electricity duty,
cesses, taxes and other charges levied by the Government or other competent
authority from time to time.
3. Tariffs to be exclusive of general charges
The tariffs shall be exclusive of rentals and other charges as per the Schedule of
General Charges as approved by the Commission from time to time.
4. Point of Supply
Unless otherwise approved by the Commission, the tariffs shall be applicable to
supply at a single point and at the voltage specified in the Supply Code 2014 as
amended from time to time. Supply at other points and/or other voltages shall be
billed separately, if otherwise permissible.
5. Connected Load shall be as specified in Supply Code 2014 as amended from time
to time.
6. Applicability of Industrial Tariff Category
The applicable category of tariff, under Schedules for Large Power Supply (LS),
Medium Power Supply (MS) & Small Power supply (SP) industrial consumers, shall
be based on the total of industrial and general demand (kVA) i.e. bona-fide factory
lighting, residential quarters and colony lighting including street lighting. While
computing the total demand (kVA) for determining the applicable schedule, fraction
of half and above shall be taken as whole kVA and fraction below half shall be
ignored.
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7. Periodicity of Billing
Periodicity of Billing shall be as per Supply Code 2014 as amended from time to time.
However, in case of bimonthly billing, consumption slabs shall be doubled while
applying the relevant tariff.
8. Fuel Cost Adjustment (FCA)
8.1 To neutralize the changes in fuel cost, FCA as per provisions of PSERC (Terms and
Conditions for Determination of Generation, Transmission, Wheeling and Retail
Supply Tariff) Regulation, 2019 and PSERC (Conduct of Business) Regulations,
2005, as amended from time to time, shall be applicable in addition to the energy
charges specified in the relevant Schedule of Tariff.
8.2 FCA clause shall be applicable to all metered and un-metered categories of
consumers.
9. Two Part Tariff (TPT) Structure/Fixed Charges
All consumers (except AP, AP High-Technology/High Density Farming, EV Charging
Stations, Sri Harmandir Sahib and Sri Durgiana Mandir) shall be covered under the
Two Part Tariff structure, as approved by the Commission in the Tariff Order. Further
fixed charges (unless otherwise specified in Schedules of Tariff) shall be charged as
under:
(a) For consumers covered under Contract Demand system as per condition 10
below, the Fixed Charges shall be levied on 80% of the sanctioned Contract
Demand or Actual demand recorded during the billing cycle/month (restricted
to sanctioned Contract Demand), whichever is higher. In case, the consumer
exceeds the sanctioned Contract Demand during a billing cycle/month,
he/she shall be liable to pay applicable demand surcharge as provided in the
Schedule of Tariff for the relevant category.
(b) For other consumers (not covered under Contract Demand system as per
condition 10 below), the Fixed Charges shall be levied on 80% of the
sanctioned load in kW.
10. Contract Demand
10.1 Contract demand shall mean the maximum demand in kVA sanctioned to the
consumer.
10.2 All consumers (except DS consumers with load upto 50 kW, NRS consumers with
load upto 20 kW, Public Lighting, AP, AP High-Technology/High Density Farming, Sri
Harmandir Sahib and Sri Durgiana Mandir) are required to get their contract demand
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sanctioned in kVA.
10.3 The maximum demand for any day or month, shall be considered as the highest
average load measured in kilovolt Ampere (kVA) during a block of 30/15 minutes
period as may be applicable.
11. Metering
Metering equipment for HT/EHT consumers for the entire supply including general
load shall normally be installed on the HV side of the transformer at the point of
commencement of supply.
12. Non availability of Metering Equipment
In case of an HT/EHT consumers receiving supply at 11 kV and above, where
metering equipment is installed on the LV side of the transformer due to non-
availability of metering equipment, both the energy consumption (kWh/kVAh) and
the maximum demand shall be enhanced by 3% to account for the transformation
losses.
13. Voltage Surcharge/rebate
13.1 Voltage Surcharge:
The levy of voltage surcharge on the energy charges shall be as under:-
i) All consumers catered at 400 volts against specified voltage of 11 kV shall be
levied surcharge at the rate of 15%.
ii) All consumers catered at 11 kV against specified voltage of 33/66 kV shall be
levied surcharge at the rate of 10%.
iii) All consumers catered at 33/66 kV against specified voltage of 132/220 kV
shall be levied surcharge at the rate of 5%.
iv) The exemptions from levy of surcharge(s) shall continue as under:
(a) LS consumers existing as on 31.03.2010 availing supply at 33/66 kV but
required to convert their system so as to receive supply at 132/220 kV will
not be levied any surcharge related to supply voltage, till such consumers
request for change of their Contract Demand.
(b) DS/NRS/BS consumers existing as on 31.03.2010 catered at a voltage
lower than specified in Supply Code 2014 will be liable to pay surcharge
only in case of any change in Contract Demand.
13.1.1 The release of new connection or additional load/demand to the consumers at the
specified supply voltage or at lower/higher voltage level shall be governed by the
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Supply Code, 2014, as amended from time to time.
Provided that existing consumers paying surcharge as per sub-clause (ii) or (iv) of
condition 13.1 of General Conditions of Tariff annexed as Annexure-I to the Tariff
Order for FY 2016-17 shall continue to be governed by existing provisions till
conversion to the amended Supply Voltage in accordance with regulation 4.2 read
with sub-regulation 4.2.2 of PSERC (Electricity Supply Code and Related Matters)
(2nd Amendment) Regulations, 2016.
13.2 Voltage Rebate
As the cost to serve at higher voltage is lower than the cost to serve at lower
voltage, therefore the rebate on energy charges to the consumers getting supply at
HT/EHT voltages shall be applicable as under:
a) 30 paise/kVAh to all consumers getting supply at 400/220/132 kV,
b) 25 paise/kVAh to all consumers getting supply at 66/33 kV,
c) 20 paise/kVAh to DS (including Charitable Hospitals setup under PWD Act),
NRS, MS consumers (including Rural Water Supply Schemes of the DWSS/
GPWSCs & Compost / Solid Waste Management Plants for Municipalities/
Urban Local Bodies) getting supply at 11 kV and
d) 20 paise/kWh to AP/AP High-Technology/High Density Farming consumers
getting supply at 11 kV shall be continued.
14. Steel Rolling Mill Surcharge (Deleted in Tariff Order FY 2018-19)
15. Time of Day (ToD) Tariff
Time of the Day (ToD) tariff shall be applicable to NRS/BS consumers with
sanctioned Contract Demand exceeding 100 kVA, all LS/MS consumers (including
Rural Water Supply Schemes & Compost/Solid Waste Management Plants) and EV
charging stations as under:
Period Time period ToD Tariff
1st April to 31st May
06.00 AM to 06.00 PM Normal Tariff* 06.00 PM to 10.00 PM
10.00 PM to 06.00 AM (next day) Normal Tariff* minus Rs.1.25/kVAh
1st June to 30th September
06.00 AM to 06.00 PM Normal Tariff*
06.00 PM to 10.00 PM Normal Tariff* plus Rs. 2.00/kVAh
10.00 PM to 06.00 AM (next day) Normal Tariff*
1st October to 31st March
06.00 AM to 06.00 PM Normal Tariff*
06.00 PM to 10.00 PM
10.00 PM to 06.00 AM (next day) Normal Tariff* minus Rs. 1.25/kVAh
* As per applicable Schedule of Tariff for the year.
However, the cumulative effect of ToD rebate on the Energy Charges (including
reduced Energy Charges for consumption exceeding threshold limit / use of
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electricity exclusively during night hours) at any time shall be limited to the Energy
Charge of Rs. 4.83/ kVAh.
16. Non-availability of MDI reading and/or kVAh Consumption
16.1 Defective MDI:
In case the MDI of a consumer becomes defective, the maximum demand shall be
computed as under:
16.1.1 Higher of the average of maximum demands recorded during the preceding three
months before the MDI became defective or the maximum demand of the
corresponding month of the previous year provided there was no change of
load/demand thereafter, shall be adopted for billing purposes for the period the MDI
remained defective.
16.1.2 If there was change of load/demand immediately before the MDI became defective,
the maximum demand computed as above shall be adjusted on pro-rata basis.
16.1.3 In case of new connections where the previous reading record is not available the
maximum demand shall be taken as 80% of sanctioned contract demand for billing
purposes during the period MDI became defective.
16.2 Non-availability of kVAh consumption
16.2.1 In case kVAh consumption is not available due to defective meter or otherwise,
monthly average power factor of the consumer’s installation recorded during the last
three correct working months preceding the period of overhauling (i.e. period of
review of billing account) shall be taken as monthly average power factor for the
purpose of power factor surcharge/incentive to the applicable category till such time
kVAh consumption is available.
16.2.2 Where the billing is done on kVAh consumption basis, the procedure given in the
Supply Code 2014 shall be followed for billing purposes as applicable to
defective/dead stop meters.
17. Tariff for News Paper Printing Presses
Accredited news paper printing presses shall be treated as industrial premises and
therefore the supply to these consumers shall be considered as industrial supply
and shall be charged under relevant industrial tariff. However, the lighting load in the
premises of accredited news paper presses shall be metered separately and
charged as per rates under Schedule Non-Residential Supply.
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18. Seasonal Industries
18.1 Seasonal industries mean industries/factories which by virtue of nature of their
production, work during part of the year up to a maximum of 9 months during the
year as specified below in Condition 18.2.
18.2 Approved seasonal industries are as under:
(i) All cotton ginning, pressing and bailing plants
(ii) All rice shellers
(iii) All rice bran stabilization units (without T.G. Sets)
(iv) Kinnow grading & Waxing Centers
(v) Maize Dryer Plants
(vi) Food (including fruits and vegetables) processing, packaging and storage
units.
Seasonal period for industries at Sr. No. (i), (iii) and (iv) shall be considered
from 1st September to 31st May next year and seasonal period for rice sheller
industry at Sr. no. (ii) shall be from 1st October to 30th June next year. The
seasonal industrial consumers at Sr. no. (i) to (iv) shall not be required to
serve advance notice before starting or closing the unit.
Seasonal industrial consumers at Sr. No. (v) and (vi) shall be required to
intimate the period of their season subject to maximum 9 months by 31st May
or one month prior to start of season, whichever is earlier.
Seasonal industry consumers shall not be required to give any undertaking
not to run his seasonal industry during off season.
18.3 Rice bran stabilization units having T.G. Sets, Rice Huller Mills, Ice Factories and
Ice Candy Plants shall not be treated as seasonal industries.
18.4 The seasonal Industry consumers shall have the option to be covered under
General Industry Category and the relevant Industrial Tariff shall be applicable in
such cases. The seasonal industrial consumers shall exercise their option one
month prior to the start of the season. In such cases, the billing as general industry
shall be done for the whole one year i.e. for a period of 12 months from the date of
start of season.
18.5 Billing of Seasonal Industries
Billing for all seasonal industries shall be done on a monthly basis and charged as
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under:
18.5.1 For exclusive Seasonal industries mentioned above, billing shall be as per the
tariff (comprising of fixed and energy charges) applicable in the respective schedule
of tariff for seasonal industry. However, the Fixed Charges, as applicable in the
respective schedule of tariff for seasonal period, shall be levied only for the period of
six months from the beginning of the seasonal period, in accordance with condition
9 above. Thereafter, only energy charges, as applicable in the respective schedule
of tariff, shall be levied on actual consumption recorded during the month. However,
demand surcharge shall be leviable for the excess demand, if any, as per the
relevant schedule of tariff.
18.5.2 For mixed Industries, comprising of seasonal Industry and general industry, billing
shall be done monthly as under:
a) Energy Charges shall be levied on actual consumption recorded during the
month, as applicable in the respective Schedule of Tariff for General
Industry, throughout the year.
b) Fixed Charges in accordance with condition 9 above, shall be levied on
sanctioned contract demand for general load, as applicable in respective
Schedule of Tariff for General Industry throughout the year and on
sanctioned contract demand for seasonal load for six months at seasonal
rates, as applicable in the respective Schedule of Tariff, from the beginning
of seasonal period, irrespective of the actual period of running of seasonal
load.
19. Agricultural Pumping Supply
19.1 All AP connections shall be released only after installation of minimum four star
labeled motor and through meter.
19.2 Chaff cutters, threshers and cane crushers for self use shall be allowed to be
operated on agriculture pumping supply connections.
19.3 The water from the agriculture tube well shall be allowed to be used by the
consumers only to irrigate the land in their possession.
20. Rounding-off Energy Bill
The charges i.e. both Fixed and energy charges including surcharges, rebates,
octroi (if applicable), meter/MCB rentals, electricity duty as well as total energy bill
(net as well as gross) shall be rounded-off individually to the nearest rupee by
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ignoring 1 to 49 paise and taking 50 to 99 paise as one rupee. Thus the amount
mentioned in the bill shall be in whole rupee. The net amount payable in all
electricity bills shall be rounded-off to the nearest Rs. 10/- (Rupees ten) and
difference due to rounding-off shall be adjusted in subsequent bills.
21. Late Payment Surcharge
In the event of the energy bill or other charges relating to electricity not being paid
in full within the time specified in the bill, the consumers shall be levied late
payment surcharge as under:
21.1 For all categories of consumers catered at HT/EHT supply voltage, if the full amount
of the bill is not paid within the due date, late payment surcharge shall be levied @
2% on the unpaid amount of the bill up to 7 days after the due date. After 7 days, the
surcharge shall be levied @ 5% on the unpaid amount of bill up to 15 days from the
due date.
21.2 In case of consumers catered at LT supply voltage, if the full amount of the bill is not
paid within the due date, the late payment surcharge shall be levied @ 2% on the
unpaid amount of the bill up to 15 days from the due date.
21.3 In case of AP consumers, late payment surcharge shall not be levied up to 7 days
after the due date. After 7 days surcharge shall be levied as in the case of LT
consumers.
21.4 Interest @ 1.5% per month on gross unpaid amount including surcharge payable as
per clause 21.1, 21.2 & 21.3 above shall be levied after expiry of 15 days from the
due date of the bill till the deposit of outstanding amount. Part of the month shall be
treated as full month for this purpose.
22. Use of electricity exclusively during night hours
Reduced tariffs as may be decided by the Commission in the Tariff Order for the year
shall be applicable to Industrial consumers who opt to use electricity exclusively
during night hours from 10.00 PM to 06.00 AM next day. However, for FY 2020-21,
they shall be entitled to use electricity also from 06:00 AM to 10:00 AM at normal
tariff rate of energy charge applicable to the respective category. Other conditions
shall be as under:
i) ToD rebate shall not be allowed on the reduced tariff under this category, as
the tariff rate is already reduced.
ii) A maximum of 10% of total units consumed during night hours(10:00 PM to
06:00 A.M. next day) in a billing period can be availed during the period of
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10.00 AM to 10.00 PM. However, ToD surcharge, as applicable, shall be
chargeable for the consumption, if any, during the peak hours.
iii) In case the consumer exceeds the %age specified in condition no. (ii) above
during any billing month, then fixed charge and energy charges for the entire
energy consumption during the relevant billing month shall be billed as per
normal tariff applicable to the respective category.
iv) This tariff shall be applicable if the consumer opts to be so charged in place of
normal tariff by using electricity exclusively during night hours as above. The
option can be exercised to switch over from normal tariff to exclusive night
time tariff by giving not less than one month’s notice in writing.
v) Other terms and conditions shall remain the same as applicable to the
respective categories as per the relevant Schedule of Tariffs.
23. Load/Demand Surcharge
23.1 Load/Demand Surcharge for Consumers covered under Contract Demand
System
23.1.1 Load Surcharge
No load surcharge shall be levied for the extra load connected by the consumer
temporarily or otherwise thereby exceeding sanctioned load. However, the
installation of extra load shall conform to CEA (Measures relating to Safety and
Electric Supply) Regulations, 2010 and statutory clearances wherever applicable
shall be obtained by the consumer.
23.1.2 Demand Surcharge for exceeding the Contract Demand
If a consumer exceeds the sanctioned contract demand, demand surcharge shall be
charged at a rate of Rs. 750/- per kVA per month on excess demand irrespective of
the number of defaults in a month.
However, for Open Access customers and CPPs demand surcharge shall be
charged on daily basis at a rate of Rs. 50/- per kVA per day on excess demand
irrespective of the number of defaults in a day. Provided that the demand surcharge
so levied in a month shall not exceed the demand surcharge applicable on monthly
basis.
This demand surcharge shall be without prejudice to the distribution licensee’s right
to take such other appropriate action as may be deemed necessary to restrain the
consumer from exceeding his contract demand.
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In the event of MDI being defective, maximum demand for billing purpose shall be
computed as per clause 16 of General Conditions of Tariff. However, no surcharge
for demand consequent to such computation shall be levied.
23.2 Load Surcharge for Consumers not covered under Contract Demand System
If the connected load of a consumer exceeds the sanctioned load, the excess load
shall be unauthorized load. Such excess load shall be charged load surcharge at a
rate of Rs. 1000/- per kW or part thereof for each default. This load surcharge shall
be without prejudice to the distribution licensee’s right to take such other appropriate
action as may be deemed necessary to restrain the consumer from exceeding his
sanctioned connected load. The unauthorized load so detected shall be got
removed. However if the unauthorized extension is up to 10% of the sanctioned
load, the consumer shall be required to pay load surcharge and the connection shall
not be disconnected. The unauthorized load upto 10% of the sanctioned load so
detected shall either be removed or got regularized by the consumer.
23.3 Compensation for damage
Any consumer who exceeds his sanctioned load/demand shall be liable to
compensate the distribution licensee for all damages caused to its equipments or
machinery by reason of this default. Without prejudice to this right, the distribution
licensee may also cause the service of the consumer to be disconnected
without any notice to the consumer.
24. Interpretation of Tariff
If a question arises as to the applicability of tariff to any class of consumer or as to
the interpretation of various clauses of tariff or General Conditions of Tariff,
decision of the Commission shall be final.
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ANNEXURE-II
SCHEDULES OF TARIFF
For FY 2020-21 w.e.f. 01.06.2020
(For the period of 01.04.2020 to 31.05.2020 applicable Schedule of Tariff shall be as annexed with TO for FY 2019-20)
(To be read with General Conditions of Tariff annexed at Annexure – I)
SI. SCHEDULE OF TARIFF FOR LARGE SUPPLY INDUSTRIAL POWER (LS)
SI.1 Availability
SI.1.1 This tariff shall apply to all industrial power supply consumers having contract
demand exceeding 100 kVA, including IT units covered under definition of
‘Electronic Hardware and Information Technology (IT) Sector’ as per the GoP notification no. 17/7/2014-AS 1/ 1372 dated 09.11.2015 or as amended from time
to time.
Oil/Gas terminals, gas bottling plants, depots of oil/gas companies, poultry, goatery,
piggery, fish farming (exclusive), dairy farms, Maize Dryer Units and Food
(including fruits and vegetables) processing, packing & storage units, meeting
above criteria shall also be covered in this schedule.
SI.1.1.1 A separate NRS connection in the premises of LS consumers shall be permissible
for regular conduct of commercial activities provided such activity is permissible
under by laws/Rules of the Govt. The electric wiring and portion of the building for
such activity should be separate.
SI.2 Character of Service
SI.2.1 Alternating Current, 50 cycles/second, Three Phase 11 kV or higher Voltage as
specified in the Supply Code 2014, depending on quantum/type of load/ contract
demand and availability of bus voltage & transformer winding capacity at the
feeding sub-station.
SI.3 Tariff
Description Energy Charge
(Rs./kVAh)
Fixed Charge
(Rs./kVA/month)
SI.3.1
General Industry
i) Above 100 kVA and upto1000 kVA 5.98 165
ii) Above 1000 KVA and upto 2500 kVA 6.08 225
iii) Above 2500 KVA 6.19 260
SI.3.2
Power Intensive Units i.e. Induction furnaces, Chloroalkaline units, Billet heaters, Surface hardening Machines, Electrolytic process industries, Electrical Bell Furnace for Annealing, Arc Furnaces (including Electro Slag Refining units) etc.
i) Above 100 kVA and upto1000 kVA 6.02 170
ii) Above 1000 KVA and upto 2500 kVA 6.33 260
iii) Above 2500 KVA 6.41 295
SI.3.3
Seasonal Industries covered under condition 18 of the General Conditions of Tariff
a) Seasonal Rate Same as
specified for the relevant general
Industrial
i) Above 100 kVA and upto1000 kVA 330 (for 6 Months)
ii) Above 1000 KVA and upto 2500 kVA 450 (for 6 Months)
iii) Above 2500 KVA 520 (for 6 Months)
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Description Energy Charge
(Rs./kVAh)
Fixed Charge
(Rs./kVA/month)
b) Off Seasonal Rate category Nil
SI.3.4
Ice Factories, Ice Candies & Cold Storages
i) April to July 330
ii) August to March next year 83
SI.3.5 For use of electricity exclusively during night hours (in accordance with condition 22 of General Conditions of Tariff)
i) 10.00 PM to 06.00 AM (next day) 4.83
50% of the charges specified for the relevant category
ii) 06.00 AM to 10.00 AM
Normal rates as applicable to the
respective category under relevant
Schedule
Note: In addition to the Energy Charge:
(i) Fuel Cost Adjustment (FCA) charge for the relevant period shall be applicable in
accordance with condition 8 of General Conditions of Tariff;
(ii) ToD tariff shall be applicable in accordance with condition 15 of General Conditions
of Tariff.
SI.3.6 For industries where the load is of mixed nature, i.e. in addition to General Industrial
loads, Arc/ Power Intensive loads are also running, Fixed and Energy Charges shall
be determined by computing the Maximum Demand and energy consumption for the
billing month on pro-rata basis in proportion to such demands sanctioned by the
distribution licensee and applicable tariff (Fixed Charge and Energy Charge) shall be
as specified against the corresponding demand slab (without clubbing of Arc/Power
Intensive and general load) under the relevant schedule of tariff. Provided that the
total charges payable by such Mixed Industry consumer shall not be less than the
charges payable, in case his total load (General and PIU) is considered as the
general load.
In such cases, Power Intensive loads shall comprise of loads as mentioned in para
SI.3.2, including auxiliary loads, loads of pollution control machinery, gas plants &
corresponding lighting loads, and general industrial loads in such cases shall
comprise loads of rolling mills and its allied loads, related workshop, general
engineering machinery and corresponding lighting load, for the purpose of levy of
Fixed Charges. Provided that billet heaters having total installed/connected kVA
rating upto 100 kVA shall not be considered as PIU load. Where rating in kVA is
not available, rated load in kW shall be converted into kVA considering unity
power factor.
SI.3.7 Voltage Surcharge/Rebate
The voltage surcharge/rebate shall be applicable as per condition 13 of General
Conditions of Tariff.
SI.4 Seasonal Industries
Seasonal industries shall be billed as per condition 18 of General Conditions of
Tariff.
SI.5 Factory Lighting and Colony Lighting
All consumption for bona fide factory lighting shall be included for charging under
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the above tariff. The consumption for residential purposes i.e. staff quarters of
factory, street lighting etc. shall also be charged under this Schedule. However, a
separate single point connection may be allowed for the colony load including
street lighting under PSERC (Single Point Supply to Cooperative Group Housing
Societies/Employers) Regulations 2008, if the colony is in separate premises.
SI.6 Load/Demand Surcharge
Load/demand surcharge shall be applicable as per Condition 23 of General
Conditions of Tariff.
SI.7 Force Majeure applicable for Arc/Induction furnaces
In the event, where normal working of the industry is affected as a result of lock
out due to labour problem, damage of EHV Power Transformer, failure on the part
of distribution licensee to supply power, fires, earth-quakes, floods, tempests and
lightning, directly resulting in closure of industry or normal supply hours reduced
through specific order of the distribution licensee for power regulation purposes,
the consumer shall be entitled to proportionate reduction in fixed charges,
provided that such closure or reduced working hours continue for at least
seven days consecutively in a billing cycle month directly as a consequence of
any of the above conditions, with the approval of load sanctioning authority. In the
event of relief being allowed in fixed charges under above conditions, the
consumers shall, however, be required to pay atleast fixed charges as applicable
to general Industry large supply consumers.
SII SCHEDULE OF TARIFF FOR MEDIUM SUPPLY INDUSTRIAL POWER (MS):
SII.1 Availability
This tariff shall apply to all industrial power supply consumers having contract
demand above 20 kVA but not exceeding 100kVA, including IT units covered
under definition of ‘Electronic Hardware and Information Technology (IT) Sector’ as per the GoP notification no. 17/7/2014-AS 1/ 1372 dated 09.11.2015 or as
amended from time to time.
Oil/Gas terminals, gas bottling plants, depots of oil/gas companies, poultry,
goatery, piggery, fish farming (exclusive), dairy farms, Maize Dryer Units and
Food (including fruits and vegetables) processing, packing & storage units,
meeting above criteria shall also be covered in this schedule.
SII.1.1 A separate NRS connection in the premises of MS consumers shall be
permissible for regular conduct of commercial activities provided such activity is
permissible under by laws/Rules of the Govt. The electric wiring and portion of the
building for such activity should be separate.
SII.2 Character of Service
SII2.1 Alternating Current, 50 cycles/ second, Three Phase 400 volts or 11 kV (at
consumer’s discretion), as specified in the Supply Code 2014.
SII.2.2 Metered supply connections to poultry, goatery, piggery, fish farming (exclusive)
and dairy farms may be released from category-1 or UPS or AP feeder at the
option of the consumer subject to the technical feasibility to release such
connection. However, the consumer opting for supply from AP feeder shall be
PSERC – Tariff Order FY 2020-21 for PSPCL 238
entitled to limited hours of supply as per power supply schedule applicable to AP
consumers. The consumers opting for supply from AP feeder shall not be eligible
for tariff applicable to agriculture consumers.
SII.3 Tariff
Description Energy Charge
(Rs./kVAh) Fixed Charge
(Rs./kVA/month)
SII.3.1 General Industry 5.80 120
SII.3.2
Seasonal Industries covered under condition 18 of the General Conditions of Tariff:
SII.3.4 For use of electricity exclusively during night hours (in accordance with condition 22 of General Conditions of Tariff)
i) 10.00 PM to 06.00 AM (next day) 4.83 50% of the
charges specified for the relevant
category ii) 06.00 AM to 10.00 AM
5.80
Note: In addition to the Energy Charge:
(i) Fuel Cost Adjustment (FCA) charge for the relevant period shall be applicable in
accordance with condition 8 of General Conditions of Tariff;
(ii) ToD tariff shall be applicable in accordance with condition 15 of General Conditions
of Tariff.
SII.3.5 Voltage Surcharge/Rebate
The voltage surcharge/rebate shall be applicable as per condition 13 of the
General Conditions of Tariff.
SII.3.6 In case of Rice Shellers, Ice Factories, Cold Storage & Stone Crushers falling
under this schedule, where the metering is done on 11 kV and the consumer has
installed his own transformer, additional rebate of 3 paise per kVAh shall be
admissible over and above the voltage rebate admissible as per condition 13 of
the General Conditions of Tariff.
SII.4 Seasonal Industries
Seasonal industries shall be billed as per condition 18 of General Conditions of
Tariff.
SII.5 Factory Lighting
The consumption for the bona fide factory lighting and residential quarters, if any,
attached to the factory shall not be metered separately. Only one meter shall be
installed for industrial & general load and entire consumption shall be charged at
the rate for industrial consumption.
SII.6 Load/Demand Surcharge
Load/demand surcharge shall be applicable as per Condition 23 of General
Conditions of Tariff.
PSERC – Tariff Order FY 2020-21 for PSPCL 239
SIII SCHEDULE OF TARIFF FOR SMALL POWER INDUSTRIAL SUPPLY (SP)
SIII.1 Availability
This tariff shall apply to Industrial Power Supply consumers with sanctioned load/
demand not exceeding 20 kVA, including IT units covered under definition of
‘Electronic Hardware and Information Technology (IT) Sector’ as per the GoP notification no. 17/7/2014-AS 1/ 1372 dated 09.11.2015 or as amended from time
to time.
Oil/Gas terminals, gas bottling plants, depots of oil/gas companies, poultry,
goatery, piggery, fish farming (exclusive), dairy farms, Maize Dryer Units and
Food (including fruits and vegetables) processing, packing & storage units,
meeting above criteria shall also be covered in this schedule.
SIII.1.1 A separate NRS connection in the premises of SP consumers shall be
permissible for regular conduct of commercial activities provided such activity is
permissible under the by laws/Rules of the Govt. The electric wiring and portion
of the building for such activity should be separate.
SIII.2 Character of Service
SIII.2.1 Alternating Current, 50 cycles/second, Single Phase 230 volts or Three Phase 400
volts, as specified in the Supply Code 2014.
SIII2.2 Metered Supply connections to poultry, goatery, piggery, fish farming (exclusive)
and dairy farms may be released from category-1 or UPS or AP feeder at the
option of the consumer subject to the technical feasibility to release such
connection. However, the consumer opting for supply from AP feeder shall be
entitled to limited hours of supply as per power supply schedule applicable to AP
consumers. The consumers opting for supply from AP feeder shall not be eligible
for tariff applicable to agriculture consumers.
SIII.3 Tariff
Description Energy Charge
(Rs./kVAh) Fixed Charge
(Rs./kVA/month)
SIII.3.1 General Industry 5.37 80
SIII.3.2
Seasonal industries covered under condition 18 of the General Conditions of Tariff:
i) Seasonal Rate 5.37
160 (for 6 Months)
ii) Off Seasonal Rate Nil
SIII.3.3
Ice Factories, Ice Candies & Cold Storages
i) April to July 5.37
160
ii) August to March next year 40
SIII.3.4
For use of electricity exclusively during night hours (in accordance with condition 22 of General Conditions of Tariff)
i) 10.00 PM to 06.00 AM (next day) 4.83 50% of the charges specified for the relevant
category ii) 06.00 AM to 10.00 AM 5.37
Note: In addition to the Energy Charge, Fuel Cost Adjustment (FCA) charge for the
relevant period shall be applicable in accordance with condition 8 of General Conditions
of Tariff.
SIII.3.5 Voltage Surcharge/Rebate
Voltage surcharge/rebate shall be applicable as per condition 13 of General
PSERC – Tariff Order FY 2020-21 for PSPCL 240
Conditions of Tariff.
SIII.4 Seasonal Industry
Seasonal industries shall be billed as per condition 18 of General Conditions of
Tariff.
SIII.5 Factory Lighting
The consumption for the bona fide factory lighting and residential quarters, if any,
attached to the factory shall not be metered separately. Only one meter shall be
installed for industrial & general load and entire consumption shall be charged at
the rate for industrial consumption.
SIII.6 Load/Demand Surcharge
Load/demand surcharge shall be applicable as per Condition 23 of General
Conditions of Tariff.
SIV SCHEDULE OF TARIFF FOR AGRICULTURAL PUMPING SUPPLY (AP)
SIV.1 Availability
This tariff shall apply to irrigation pumping supply loads including Kandi Area
tube wells, tube wells in farms of PAU, Lift irrigation tube wells, PSTC tube wells,
Scheme, tube wells of Co-operative Societies formed by marginal farmers for
installing deep bore tube wells under Central Assistance Schemes, tube wells
used to provide irrigation for horticulture/floriculture in open field condition or net
houses, green/hot houses, tube wells of Harijan farmer’s cooperative societies and Punjab Water Resources Management and Development Corporation’s tube wells for reviving ecology of Holy Bein.
Power utilized for any other purpose shall be separately metered and charged
under the relevant schedule.
SIV.2 Character of Service
Alternating Current, 50 cycles/second, Single Phase 230 volts or Three Phase
400 volts or higher voltage, as specified in the Supply Code 2014.
SIV.3 Tariff
Description Energy Charge
(Rs.) Fixed Charge (Rs./month)
SIV.3.1 Agricultural Pumping
Supply (AP)
5.57/kWh or
412 /BHP/month
Note: In addition to the Energy Charge, Fuel Cost Adjustment (FCA) charge for the
relevant period shall be applicable in accordance with condition 8 of General Conditions
of Tariff.
SIV.3.2 Voltage Surcharge/Rebate
Voltage surcharge/rebate shall be applicable as per condition 13 of General
Conditions of Tariff.
SIV.4 Flat rate supply shall only be allowed to consumers getting supply from agriculture
PSERC – Tariff Order FY 2020-21 for PSPCL 241
feeders. The consumers located within Municipal Limits of cities/towns or getting
supply from Urban/City/Urban Pattern Supply/Kandi area feeders shall be covered
under metered supply only.
SIV.4.1 20% surcharge on flat rate charges or as may be determined by the Commission
in the Tariff Order, shall be leviable in case of agricultural consumers covered
under flat rate/metered supply category until a consumer fulfils the following
requirements:
SIV.4.1.1 Delivery pipe should not be more than 2 feet above the ground level water
channel except for the consumers who are having underground irrigation system.
SIV.4.1.2 Bend used in the delivery pipe should not be sharp but of suitable curvature.
SIV.4.1.3 Motor-Pump should be installed on a Pucca leveled foundation in case of mono-
block or belt driven pump-sets.
SIV.4.2 Extra fixed charges shall be levied wherever an agricultural tube well covered
under this schedule is also used for fish farming as below:
SIV.4.2.4 Relevant industrial tariff shall be applied for such tube wells which are
exclusively used for fish farming.
SIV. 4.3 Misuse of AP supply
The misuse of AP supply provided to agricultural tube wells for other purposes
shall be dealt with as per provisions of Electricity Act, 2003.
SIV.5 Pump House Lighting
The consumption for bona fide lighting of the pump or machine house of 2 CFLs
with total wattage aggregating 40 watts shall be allowed per tube well connection.
SIV.6 Load Surcharge
Load surcharge shall be applicable as per Condition 23 of General Conditions of
Tariff.
SIV.7 Installation of Shunt Capacitors
SIV.7.1 No tube well connection shall be released without installation of ISI mark Shunt
Capacitors of requisite capacity. The kVArh capacity of Shunt Capacitors to be
installed shall be as prescribed by the distribution licensee with the approval of
the Commission.
SIV.7.2 AP consumers having got installed Shunt Capacitors at their tube well premises
from the distribution licensee against payment of monthly rentals, shall be
charged rentals @ Rs. 4/- per kVArh per month from the date of installation. The
rentals shall, however, be recovered on half yearly basis i.e. Rs. 24 per kVArh in
April and October every year.
SIV.4.2.1 Fish culture in a pond up to half acre: Rs. 900/- per annum
SIV.4.2.2 Fish culture in a pond above half acre, but up to one acre: Rs. 1800/- per annum
SIV.4.2.3 Additional area under fish pond to be charged in multiples of half acre rate. The pond area shall include bundhing.
PSERC – Tariff Order FY 2020-21 for PSPCL 242
SIV.7.3 Before allowing extension in load/regularization of load by distribution licensee,
the existing AP consumers shall install capacitors of adequate capacity as
prescribed by distribution licensee with the approval of the Commission.
SV SCHEDULE OF TARIFF FOR NON RESIDENTIAL SUPPLY (NRS)
SV.1 Availability
SV.1.1 This tariff shall apply to:
Non-residential premises such as business houses, cinemas, clubs, offices,
hotels/motels, marriage palaces, hot mix/ready mix plants, departmental stores,
shops, guest houses, restaurants for lights, fans, pumping set, air conditioning
units/plants, lifts, welding sets, small lathes, electric drills, heaters etc.;
EV Charging Stations, battery chargers, embroidery machines, printing presses,
ice candy machines, dry cleaning machines, power presses, small motors etc.;
Private hospitals (other than charitable), Private unaided educational institutions
i.e. schools, colleges and universities, hostels and residential quarters attached
thereto where such institutions/installations are not covered under schedule
DS/BS;
Telecommunication/Cellular Mobile Phone Towers and all private sports
institutions/ facilities including gymnasiums.
SV.1.2 If a portion of residential/industrial premises is regularly used for any commercial
activity permitted under law, the consumer shall be required to obtain a separate
connection under NRS category for the portion put to commercial use. In such an
event, two connections, one under Schedule DS/Industrial and the other under
Schedule NRS shall be permitted.
SV.1.3 Any of the following activities carried out in a part of residential premises shall also
be covered under this schedule.
a) A private outpatient clinic/hospital or laboratory.
b) PCO.
c) Milk processing (other than chilling plant)) for commercial purposes.
d) Offices of any other professional service provider.
e) ATM.
SV.2 Character of Service
Alternating Current, 50 cycles/second, Single Phase 230 volts or Three Phase
400 volts or 11 kV or higher voltage as specified in the Supply Code 2014,
depending on quantum of load/contract demand and availability of bus voltage &
transformer winding capacity at the feeding sub-station.
SVI.3.5 Demand above 100 kVA (All units) 6.53/kVAh 110/kVA
SVI.3.6 Sri Harmandir Sahib and Sri Durgiana Mandir, Amritsar
First 2000 kWh Free NA
Beyond 2000 kWh 6.11/kWh
Note: In addition to the Energy Charge, Fuel Cost Adjustment (FCA) charge for the
relevant period shall be applicable in accordance with condition 8 of General Conditions
of Tariff.
PSERC – Tariff Order FY 2020-21 for PSPCL 245
SVI.3.7 Voltage Surcharge/Rebate
Voltage surcharge/rebate shall be applicable as per condition 13 of General
Conditions of Tariff.
SVI.4 Load/ Demand Surcharge
Load/demand surcharge shall be applicable as per Condition 23 of General
Conditions of Tariff.
SVI.5 Single Point Supply to Co-operative Group Housing Societies/
Employers etc.
Supply to such consumers shall be governed by the provisions as contained in
PSERC (Single Point Supply to Co-operative Group Housing Societies/
Employers) Regulations, 2008, as amended from time to time, i.e. total
consumption of electricity recorded at single point connection of a Co-operative
Housing Society/employer’s colony will be billed at a rate equal to the highest slab rate of Schedule of Tariff for Domestic Supply (DS) and a rebate of 12% (Twelve
percent) will be admissible in addition to any other rebate on electricity charges,
comprising of fixed and energy charges as may be approved by the Commission.
The Fixed Charges on the basis of Contract Demand of the consumer shall be
applicable as specified in the Tariff Order for the year.
SVII SCHEDULE OF TARIFF FOR BULK SUPPLY (BS)
SVII.1 Availability
This tariff shall apply to the following:
SVII.1.1 General or mixed loads exceeding 10 kW/kVA to MES, Defence Establishments,
Railways, Central PWD institutions, Irrigation Head works, Jails, Police/Para
Military Establishments/Colonies and Govt. Hospitals/ Medical Colleges/Govt.
Educational Institutions having mixed load subject to a minimum of 25% domestic
load and motive/Industrial load not exceeding 50%, where further distribution will
be undertaken by the consumer.
SVII.1.2 General or mixed loads exceeding 10 kW/kVA to all private educational institutes/
universities/ colleges/ hospitals etc. having mixed load subject to a minimum of
25% domestic load and motive/Industrial load not exceeding 50%, for their own
use and to run the affairs connected with the functions of such educational
institutes/ universities/ colleges/ hospitals etc. provided the entire LD system has
been laid at the cost of the consumer.
SVII.1.3 However, institutions/Installations having DS load less than 25% will be covered
under relevant NRS Schedule of Tariff. Where motive/Industrial load of any
installation exceeds 50% of the total load, such an installation will be charged
applicable industrial tariff.
SVII.2 Character of Service
Alternating Current, 50 cycles/second, Three Phase 400 volts or 11 kV or higher
voltage as specified in the Supply Code 2014, depending on quantum of contract
demand and availability of bus voltage & transformer winding capacity at the
feeding sub-station.
PSERC – Tariff Order FY 2020-21 for PSPCL 246
SVII.3 Tariff
Description Energy Charge
(Rs./kVAh) Fixed Charge
(Rs./kVA/month)
SVII.3.1 LT 6.46 195
SVII.3.2 HT 6.05 270
Note:
i) Fuel Cost Adjustment (FCA) charges for the relevant period shall be applicable in
addition to the energy charges in accordance with condition 8 of General Conditions
of Tariff;
ii) ToD tariff to BS consumers with sanctioned Contract Demand exceeding 100 kVA
shall be applicable in accordance with condition 15 of General Conditions of Tariff;
iii) Energy charges shall be increased by 25% in case of private hospitals & MRI/CT
Scan centers getting continuous supply through independent feeders under BS
Schedule.
SVII.3.3 Voltage Surcharge/Rebate
Voltage Surcharge/rebate shall be applicable as per condition 13 of General
Conditions of Tariff.
SVII.4 Load /Demand Surcharge
Load/demand surcharge shall be applicable as per Condition 23 of General
Conditions of Tariff.
SVIII SCHEDULE OF TARIFF FOR PUBLIC LIGHTING SUPPLY
SVIII.1 Availability
Available for Street Lighting system including signalling system and road & park
lighting undertaken by the local bodies like Municipal Corporations, Municipal
Committees, Nagar Councils, Panchayats, Institutions etc.
SVIII.2 Character of Service
Alternating Current, 50 cycles/second, Single Phase 230 volts or Three Phase
400 volts or higher voltage, as specified in the Supply Code 2014.
SVIII.3 Tariff
Energy Charge (Rs.) Fixed Charge (Rs./month)
7.43/kWh 100/kW
Note: In addition to the Energy Charge, Fuel Cost Adjustment (FCA) charge for the
relevant period shall be applicable in accordance with condition 8 of General
Conditions of Tariff.
SVIII.4 Rates of Line Maintenance and Lamp Renewal Charges
SVIII.4.1 Category-A
Where the initial installation of complete street light fittings & lamps and their
subsequent replacement shall be carried out at the licensee's cost, the line
maintenance and lamp renewal charges shall be as under:
SVIII.4.1.1 Ordinary/CFL/LED lamps
(i) Lamps up to 150 watts Rs.16/-per lamp per month
(ii) Lamps above 150 watts Special quotation
PSERC – Tariff Order FY 2020-21 for PSPCL 247
SVIII.4.1.2 Mercury/ Sodium Vapour lamps
(i) Lamps of 80 watts Rs. 49/- per lamp per month
(ii) Lamps of 125 watts Rs. 53/- per lamp per month
(iii) Lamps of 250 watts Rs. 90/- per lamp per month
(iv) Lamps of 400 watts Rs. 101/-per lamp per month
SVIII.4.1.3 Fluorescent tubes
(i) Single 2 ft 20 watts Rs. 26/- per point per month
(ii) Single 4 ft 40 watts Rs. 43/- per point per month
(iii) Double 2 ft 20 watts Rs. 43/- per point per month
(iv) Double 4 ft 40 watts Rs. 68/-per point per month
SVIII.4.2 Category-B
Where the initial installation and subsequent replacement of complete street light
fittings shall be done at the cost of the licensee and initial installation &
subsequent replacement of lamps shall be done at the cost of Street Lighting
consumers i.e. lamps to be supplied by the consumer, the line maintenance and
lamp renewal charges shall be as under:
SVIII.4.2.1 Ordinary/CFL/LED lamps
(i) Lamps up to 150 watts Rs. 14/- per lamp per month
(ii) Lamps above 150 watts Special quotation and special lamps
SVIII.4.2.2 Mercury/Sodium Vapour lamps
(i) Lamps of 80 watts Rs. 29/- per lamp per month
(ii) Lamps of 125 watts Rs. 36/- per lamp per month
(iii) Lamps of 250 watts Rs. 63/- per lamp per month
(iv) Lamps of 400 watts Rs. 68/-per lamp per month
SVIII 4.2.3 Fluorescent tubes
(i) Single 2 ft 20 watts Rs. 23/- per point per month
(ii) Single 4 ft 40 watts Rs. 40/- per point per month
(iii) Double 2 ft 20 watts Rs. 39/- per point per month
(iv) Double 4 ft 40 watts Rs. 61/-per point per month
SVIII.4.3 Category-C
Where the initial installation of complete street light fittings and lamps as well as
their subsequent replacement shall be done at the cost of Street Lighting
consumer i.e. fittings and lamps to be supplied by the consumer, the line
maintenance and lamp renewal charges shall be as under:
SVIII.4.3.1 Ordinary/CFL/LED lamps
(i) Lamps up to 150 watts Rs. 11/- per lamp per month
(ii) Lamps above 150 watts Special quotation and special lamps
SVIII.4.3.2 Mercury/Sodium Vapour lamps
(i) Lamps of 80, 125, 250 and
400 watts
Rs. 13/- per lamp per month
PSERC – Tariff Order FY 2020-21 for PSPCL 248
SVIII.4.3.3 Fluorescent tubes
(i) Single 2 ft 20 watts Rs. 13/- per point per month
(ii) Single 4 ft 40 watts Rs. 13/- per point per month
(iii) Double 2 ft 20 watts Rs. 13/- per point per month
(iv) Double 4 ft 40 watts Rs. 13/-per point per month
Note: Where the work of lamp renewal/replacement is being carried out by the local
bodies, the charges pertaining to line maintenance and lamp renewal/
replacement shall be shared by licensee and the Municipal Corporation/
Committee/Council/Panchayat in the ratio of 50:50.
SVIII.4.4 Category-D
Where the initial installation of complete street light fittings and lamps as well as
subsequent replacement of fittings shall be carried out at the cost of Street
Lighting consumer but the replacement of fluorescent tubes shall be done at the
cost of the licensee i.e. fluorescent tubes to be supplied by the licensee, the line
maintenance and fluorescent tube replacement charges shall be as under:
(i) Single 2 ft 20 watts Rs.16/- per point per month
(ii) Single 4 ft 40 watts Rs.16/- per point per month
(iii) Double 2 ft 20 watts Rs.18/- per point per month
(iv) Double 4 ft 40 watts Rs.21/-per point per month
SVIII.5 Rebate to Village Panchayats
For Street Lighting supply to Village Panchayats, a rebate of twenty five percent
over the standard tariff (i.e. energy charges and line maintenance and lamp
renewal charges under all categories) shall be admissible.
SIX SCHEDULE OF TARIFF FOR RAILWAY TRACTION (RT)
SIX.1 Availability
Available to the Railways for traction load.
SIX.2 Character of Service
Alternating Current, 50 cycles/second, Single/Two/Three Phase 132 kV or higher
voltage, as specified in the Supply Code 2014, depending upon the availability of
bus voltage & transformer winding capacity at the feeding sub-station wherever
possible at the discretion of the distribution licensee.
SIX.3 Tariff
Energy Charges (Rs.) Fixed Charges (Rs./month)
6.87/kVAh 300/kVA
Note: In addition to the Energy Charge, Fuel Cost Adjustment (FCA) charge for the
relevant period shall be applicable in accordance with condition 8 of General Conditions
of Tariff.
SIII.3.1 Voltage Surcharge/Rebate
Voltage surcharge/rebate shall be applicable as per condition 13 of General
Conditions of Tariff.
PSERC – Tariff Order FY 2020-21 for PSPCL 249
SIX.4 Demand Surcharge
Demand surcharge shall be applicable as per Condition 23 of General Conditions
of Tariff.
SIX. 5 Single Point Delivery
The above tariff is based on the supply being given through a single delivery &
metering point and at a single voltage. Supply at any other point or at other
voltage shall be separately metered and billed.
SX. SCHEDULE OF TARIFF FOR TEMPORARY METERED SUPPLY (TM)
Availability
Temporary supply shall be permitted to an applicant as per Supply Code 2014 for
a period as per applicant’s request, but not exceeding two years in the first instance. However, the distribution licensee may extend such supply on an
application by the consumer.
Fixed Charges for Temporary Supply shall be levied @ 12*2A/365 per day, where
‘A’ is the Monthly Fixed Charge applicable to the corresponding permanent supply consumer category. Provided that fixed charges so computed shall not exceed the
fixed charges applicable on monthly basis.
SX.1 Tariff for Domestic and Non-Residential Supply
SX.1.1 Availability
Temporary supply shall be permitted on an application to domestic and non-
Alternating Current, 50 cycles/second, Single Phase 230 volts or Three Phase
400 volts or 11 kV or higher voltage as specified in the Supply Code 2014.
SX.1.3 Tariff
Description Energy Charge (Rs.) Fixed Charges (Rs.)
SX.1.3.1 Domestic Supply 1.25 times the charges (highest slab rate) specified under the relevant schedule for permanent supply corresponding to the Connected Load/Demand SX.1.3.2
Non Residential Supply
Note: In addition to the Energy Charge, Fuel Cost Adjustment (FCA) charge for the
relevant period shall be applicable in accordance with condition 8 of General Conditions
of Tariff.
SX.1.3.3 Voltage surcharge/rebate
The voltage surcharge/rebate shall be applicable as per Condition 13 of General
Conditions of Tariff.
SX.1.4 Load/ Demand Surcharge
In case a temporary supply consumer covered under this schedule exceeds his
sanctioned load/contract demand at his premises, the consumer shall be levied
load/demand surcharge at the same rate as applicable under relevant schedule
for permanent supply.
SX.2 Tariff for Temporary Small, Medium and Large Power Industrial Supply
SX.2.1 Availability
Temporary supply shall be permitted to all industrial consumers for loads including
pumps for dewatering in case of floods on an application as per applicant’s
PSERC – Tariff Order FY 2020-21 for PSPCL 250
request.
SX.2.2 Character of Service
Alternating Current, 50 cycles/second, Single Phase 230 volts or Three Phase
400 volts or 11 kV or higher voltage as specified in the Supply Code 2014.
SX.2.3 Tariff
Description Energy Charge (Rs.) Fixed Charges (Rs.)
SX.2.3.1 SP 1.25 times the charges specified under the relevant schedule for permanent industrial supply corresponding to the Contract Demand
SX.2.3.2 MS
SX.2.3.3 LS
Note: In addition to the Energy Charge, Fuel Cost Adjustment (FCA) charge for the relevant period shall be applicable in accordance with condition 8 of General Conditions of Tariff.
SX.2.3.4 Voltage Surcharge/Rebate
The voltage surcharge/rebate shall be applicable as per condition 13 of General
Conditions of Tariff.
SX.2.4 Factory Lighting
In case of temporary supply to Large Supply, Medium Supply & Small Power
Industrial consumers, the bonafide factory lighting and motive/ Industrial power
consumption shall be measured through one and the same meter and charged at
the relevant tariff as per para SX.2.3 of this Schedule.
SX.2.5 Load/Demand Surcharge
In case a temporary supply consumer covered under this schedule exceeds his
contract demand at his premises, the consumer shall be levied demand surcharge
at double the rates as applicable under relevant schedule for permanent supply.
SX.3 Tariff for Wheat Threshers
SX.3.1 Availability
Available for threshing of wheat for the period between 1st April to 30th June.
SX.3.2 Character of Service
Alternating Current, 50 cycles/ second, Three Phase 400 volts or as specified in
the Supply Code 2014.
SX.3.3 Tariff
Description Energy Charge (Rs.) Fixed Charges (Rs.)
SX. 3.3.1 SP 1.25 times the charges specified under the relevant schedule for permanent industrial supply corresponding to the Contract Demand
SX. 3.3.2 MS
SX. 3.3.3 LS
Note: In addition to the Energy Charge, Fuel Cost Adjustment (FCA) charge for the
relevant period shall be applicable in accordance with condition 8 of General Conditions
of Tariff.
SX.3.3.4 Voltage surcharge/rebate
The voltage surcharge/rebate shall be applicable as per condition 13 of General
Conditions of Tariff.
PSERC – Tariff Order FY 2020-21 for PSPCL 251
SX.3.4 Load/Demand Surcharge
In case a temporary supply consumer covered under this schedule exceeds his
contract demand at his premises, the consumer shall be levied demand surcharge
at double the rates as applicable under relevant schedule for permanent industrial
supply.
SX.4 Tariff for Fairs, Exhibitions, Melas and Congregations
SX.4.1 Availability
Available for temporary loads of Fairs, Exhibitions, Melas and Congregations.
SX.4.2 Character of Service
Alternating Current, 50 cycles/second, Three Phase 400 volts or 11 kV or higher
voltage as specified in the Supply Code 2014.
SX.4.3 Tariff Description Energy Charge (Rs.) Fixed Charges (Rs.)
SX. 4.3.1 LT 1.25 times the charges specified under the relevant schedule for permanent bulk supply SX. 4.3.2 HT
Note: In addition to the Energy Charge, Fuel Cost Adjustment (FCA) charge for the relevant
period shall be applicable in accordance with condition 8 of General Conditions of Tariff.
SX.4.3.3 Voltage Surcharge/Rebate
The voltage surcharge/rebate shall be applicable as per condition 13 of General
Conditions of Tariff.
SX.4.4 Load/Demand Surcharge
In case a temporary supply consumer covered under this schedule exceeds his
contract demand at his premises, the consumer shall be levied demand surcharge
at the same rate as applicable under the relevant schedule for bulk supply.
SX.5 Tariff for Touring Cinemas
SX.5.1 Availability
SX.5.1.1 Available to all touring cinemas, theatres, circuses etc.. However, supply shall be
given separately for general loads (Lights/fans and motive loads).
SX.5.1.2 The connection shall be sanctioned in the first instance for the entire period of
validity of license or for the period requisitioned for, whichever is less.
SX.5.2 Character of Service
Alternating Current, 50 cycles/second, Single Phase 230 volts or Three Phase
400 volts or 11 kV or higher voltage as specified in the Supply Code 2014.
SX.5.3 Tariff
Description Energy Charge (Rs.) Fixed Charges (Rs.)
SX.5.3.1 Lights and fans 1.25 times the charges (highest slab rate) specified under the relevant schedule for permanent NRS supply corresponding to the Sanctioned Load/Demand
SX.5.3.2 Motive load
1.25 times the charges specified under the relevant schedule for permanent Industrial supply corresponding to the Contract Demand
Note: In addition to the Energy Charge, Fuel Cost Adjustment (FCA) charge for the relevant period shall be applicable in accordance with condition 8 of General Conditions of Tariff.
PSERC – Tariff Order FY 2020-21 for PSPCL 252
SX.5.3.3 Voltage surcharge/rebate
The voltage surcharge/rebate shall be applicable as per clause 13 of General
Conditions of Tariff.
SX.5.4 Load/ Demand Surcharge
In case a temporary supply consumer covered under this schedule exceeds his
sanctioned load/contract demand at his premises, the consumer shall be levied
load/demand surcharge at the same rate as applicable under relevant schedule
for permanent industrial supply.
SXI SCHEDULE OF TARIFF FOR AP HIGH TECHNOLOGY/HIGH DENSITY
FARMING SUPPLY
SXI.1 Availability
Available for High Technology green house farming and High Density AP farming.
The AP (High Technology) Supply shall be subject to fulfilling the conditions as
mentioned at SXI.1.1, 1.2 & 1.3 whereas High Density AP Supply shall be subject
to conditions mentioned at SXI.1.4
SXI.1.1 Setting up a green house with a minimum area of 2000 sq. metres.
SXI.1.2 Production of certificate from Director/Agriculture and/or Director/Horticulture or
any other officer authorized by the Govt. of Punjab, to the effect that the farming
being carried out by the consumer involves use of high technology requiring
power supply to produce quality products such as vegetables/ fruits/seeds/flowers
etc., to meet the standards of domestic/International markets.
SXI.1.3 A distribution licensee shall take necessary steps to annually verify that all
consumers continue to fulfil the obligations as above for coverage under this
category. In the event of a consumer ceasing to fulfil these obligations, connection
released shall be disconnected after giving at least 15 days notice.
SXI.1.4 The farmers opting for High Density Farming supply shall furnish a certificate
from Director/Agriculture and/or Director/Horticulture department to the effect that
farming being carried out by the applicant is covered under High Density farming
as per the State Government policy.
SXI.2 Character of Service
Alternating Current, 50 cycles/second, Three phase 400 volts for loads not
exceeding 100 kW and 11 kV or higher voltage supply for loads above 100 kW as
specified in the Supply Code 2014.
SXI.3 Tariff
Energy Charge (Rs.) Fixed Charges (Rs./month)
5.57/kWh Not Applicable
Note: In addition to the Energy Charge, Fuel Cost Adjustment (FCA) charge for the
relevant period shall be applicable in accordance with condition 8 of General Conditions
of Tariff.
SXI.3.1 Voltage Surcharge/Rebate
Voltage Surcharge/rebate shall be applicable as per condition 13 of General
PSERC – Tariff Order FY 2020-21 for PSPCL 253
Conditions of Tariff.
SXI.4 The provisions of Regulation 9 of the Supply Code 2014 shall be applicable for the
release of a connection under this category. Connections with a load of more than
100 kW shall be released at 11 kV. An independent feeder shall be provided at
the consumer’s expense if uninterrupted supply is required. Connection with a
load not exceeding 100 kW may be released from AP feeder or category-1 or UPS
feeder at the option of the consumer, subject to the technical feasibility to release
such connection. However, the consumers opting for supply from agriculture
feeders shall be entitled to limited hours of supply as per power supply schedule
applicable to AP consumers. Only metered supply shall be admissible under this
category.
SXI.5 Load Surcharge
Load surcharge shall be applicable as per Condition 23 of General Conditions of
Tariff.
SXI.6 Power Factor Surcharge/Incentive
Consumers shall be required to maintain a monthly average power factor of 0.90.
The monthly average power factor shall mean the ratio of total kWh to total kVAh
supplied during the month. The ratio shall be rounded up to two decimal points.
SXI. 6.1 Low Power Factor Surcharge
If the monthly average power factor falls below 0.90, the consumer shall pay on
the energy charges a surcharge of 1% for each 0.01 decrease in the monthly
average power factor below 0.90. The surcharge shall be 2% for each 0.01
decrease of monthly average power factor below 0.80.
SXI.6.2 Power Factor Incentive
If the monthly average power factor exceeds 0.90, incentive @ 0.25%, for each
increase of 0.01 above 0.90 shall be allowed on the energy charges.
SXI.6.3 For power factor surcharge & incentive, the energy charges shall also include the
surcharge or rebate as applicable under para SXI.3.1 of this schedule.
SXII. SCHEDULE OF TARIFF FOR COMPOST PLANTS/SOLID WASTE
MANAGEMENT PLANTS AND RURAL WATER SUPPLY SCHEMES
SXII.1 Availability
Available for Industrial/motive loads of compost plants/solid waste management
plants including pumps etc., for Municipalities/Urban Local Bodies and Rural
Water Supply (RWS) Schemes of Department of Water Supply & Sanitation
Punjab (DWSS) and Gram Panchayat Water Supply & Sanitation Committee
(GPWSCs). The connections shall be released under this category as per terms
and conditions applicable to industrial consumers.
SXII.2 Character of Service
Alternating Current, 50 cycles/second, Three Phase 400 volts or 11 kV or higher
voltage as per Supply Code 2014 depending on quantum of demand.
PSERC – Tariff Order FY 2020-21 for PSPCL 254
SXII.3 Tariff
Energy Charge
(Rs.)
Fixed Charges
(Rs./month)
5.12/kVAh 40/kVA
Note: In addition to the Energy Charge:
(i) Fuel Cost Adjustment (FCA) charge for the relevant period shall be applicable in
accordance with condition 8 of General Conditions of Tariff.
(ii) ToD Tariff (for loads with contract demand exceeding 20kVA) shall be applicable in
accordance with condition 15 of General Conditions of Tariff.
SXII.3.1 Voltage Surcharge/Rebate
Voltage Surcharge/rebate shall be applicable as per condition 13 of General
Conditions of Tariff.
SXII.4 Load/Demand Surcharge
Load/demand surcharge shall be applicable as per Condition 23 of General
Conditions of Tariff.
SXIII. SCHEDULE OF TARIFF FOR START UP POWER
SXIII.1 Availability
Available to Generators/CPPs, who seek supply for start up power for pre-
commissioning or planned/forced outages.
This power shall also be available to generators/CPPs connected to CTU grid with
proper accounting.
SXIII.2 Character of service
Alternating Current, 50 cycles/second, Three Phase 11kV or higher voltage as
specified in the Supply Code 2014, as amended from time to time.
SXIII.3 Tariff
Energy Charge (Rs.) Fixed Charges (Rs.)
7.12/kVAh Not Applicable
Note: In addition to the energy charges, Fuel Cost Adjustment (FCA) charges shall be
applicable in accordance with condition 8 of General Conditions of Tariff.
SXIII.3.1 Voltage Surcharge/Rebate
Voltage Surcharge/rebate shall be applicable as per condition 13 of General
Conditions of Tariff.
SXIII.4. Demand Surcharge
The Demand Surcharge for exceeding the Contract Demand shall be as
applicable to Large Supply Industrial Consumers (General).
SXIII.5. Terms and Conditions
SXIII.5.1 The Contract Demand for supply for start up power shall not exceed 15% of the
rated capacity of the unit with highest rating in the power plant.
SXIII.5.2 The generator shall execute an agreement with the distribution licensee for
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meeting the requirement for start up power incorporating above terms and
conditions.
SXIII.5.3 Start up Power to CPPs shall be governed by terms and conditions as specified in
PSERC (Harnessing of Captive Power Generation) Regulations, 2009, as
amended from time to time.
SXIV. SCHEDULE OF TARIFF FOR CHARITABLE HOSPITALS SET-UP UNDER
PERSONS WITH DISABILITY (EQUAL OPPORTUNITIES, PROTECTION OF
RIGHTS AND FULL PARTICIPATION), ACT 1995.
SXIV.1 Availability
Available to Charitable Hospitals set-up under Persons with Disability (Equal
Opportunities, Protection of Rights and Full Participation), Act 1995. The
connections shall be released under this category as per terms and conditions
applicable to domestic consumers.
SXIV.2 Character of Services
Alternating Current, 50 cycles/second, Three Phase 400 volts or 11 kV or higher
voltage as specified in the Supply Code 2014, depending on quantum of
load/demand.
SXIV.3 Tariff
Energy Charge (Rs./kVAh) Fixed Charges (Rs./Month)
SXIV.3.1 5.12/kVAh 40/kVA.
Note: Fuel Cost Adjustment (FCA) charges for the relevant period shall be applicable in
addition to the energy charges, in accordance with condition 8 of General Conditions of
Tariff.
SXIV.3.2 Voltage Surcharge/Rebate
Voltage surcharge/rebate shall be applicable as per Condition 13 of General
Conditions of Tariff.
SXIV.4 Load/ Demand Surcharge
Load/demand surcharge shall be applicable as per Condition 23 of General
Conditions of Tariff.
PSERC – Tariff Order FY 2020-21 for PSPCL 257
ANNEXURE - III
Minutes of the Meeting of PSERC, State Advisory Committee, Chandigarh held on
06th February, 2020.
A meeting of the PSERC, State Advisory Committee was held in the office of the
Commission at Chandigarh on 6th February, 2020. PSERC had invited comments of the
members on the Petitions for True up for FY 2018-19, Annual performance Review
(APR) for FY 2019-20 of the first MYT control period and MYT Petition and Annual
Revenue Requirement and Tariff Proposal for the second MYT control period from FY
2020-21 to FY 2022-23 respectively filed by Punjab State Power Corporation Ltd.
(PSPCL) and Punjab State Transmission Corporation Ltd. (PSTCL). The following were
present/ represented in the meeting:
Sr. No. Name and Address Designation
1. Ms. Kusumjit Sidhu
Chairperson, PSERC, Site No.3, Sector-18-A, Chandigarh.
Ex-officio Chairperson
2. Er. S.S. Sarna
Member, PSERC, Site No.3, Sector-18-A, Chandigarh.
Ex-officio Member
3. Er. Anjuli Chandra
Member, PSERC, , Site No.3 Sector-18-A, Chandigarh.
Ex-officio Member
4.
Additional Chief Secretary
Department of Power,
Government of Punjab,
Chandigarh
Member
5.
Principal Secretary
New and Renewable Sources of Energy (NRSE),
Govt. of Punjab, Chandigarh
Member
6. Smt. Parneet Mahal Suri,
Secretary, PSERC, Site No.3, Sector-18-A, Chandigarh.
Ex-officio Secretary
7. Chairman-cum-Managing Director, PSPCL, The Mall, Patiala. Member
8. Chairman-cum-Managing Director,
PSTCL, The Mall, Patiala Member
9. Labour Commissioner,
Deptt. of Labour & Employment, Government of Punjab, Chandigarh
Member
10. Chairman, Punjab Farmers‟ Commission for the State of Punjab Mandi Bhawan, Sector-65A,Phase-XI,Mohali,
Member
11.
S. Bhupinder Singh Mann,
Ex-MP, (Rajya Sabha)
National President (BKU), Chairman, National Kisan Coordination Committee.
In order to increase industrial consumption in backward areas of Mukatsar, Mansa
and Bathinda, Industrialists should be encouraged to establish units by providing
concessions in stamp duty and GST on the pattern of border areas.
Steps should be taken for revival of closed units. With farmers shifting to growing
cotton crop again, Industrialists intend to restart their closed Ginning units,
however, PSPCL is demanding MMC charges to revive the connection. The
Commission should step in so that some of surplus power can be used.
Since, the Cotton & Ginning industry run for about 4 ½ months only during the
year, fixed charges need to be reduced for such Seasonal Industry.
7. Er P.S. Virdi, President, The Consumers Protection Federation(Regd.) Mohali:
He suggested as under:
Most of consumers in the State are having free electricity. It would be reasonable
to consider only small farmers (up to 2.5 to 5 acres) for subsidy and not medium &
rich farmers with 5 to 10 acres & above. These freebees lead to misuse power for
houses, AC‟s, heaters, more than one motor and also by way of sale of water.
Subsidy should be in the form of units through fitted meters & not for free
PSERC – Tariff Order FY 2020-21 for PSPCL 264
connections. Each farmer must be charged for extra consumption. Out of 14.5 lac
tubewells on subsidy in Punjab, small farmers beneficiaries are only 19% and rest
81% are larger/rich and Medium farmers. The Commission should watch the
interests of the consumers as well as PSPCL.
Illegal Tube well connections add additional load on Pb. exchequer. Recently,
more than 100 illegal tube well connections were caught during raids, in Bathinda
District alone, where some old documents have also been found tampered with and
missing. This practice may be curbed.
Rs. 2100 Crores are still pending against the various depts. of Punjab Govt. which
may improve the financial position of the Corporation, in case PSPCL takes serious
measures to recover the same.
Per unit cost of electricity in the State is very high.
T&D losses in certain pockets of the State are on higher side. To control the same,
the help of local Welfare Associations at the district level may be taken.
Punjab Govt. is encouraging Solar power. On the other hand, PSPCL is harassing
by not issuing proper Bills to Solar power consumers and other domestic
consumers in Mohali from the last more than one year. This require attention.
8. Dr. Sat Bhushan Pandhi, Ludhiana:
He gave the following suggestions:-
The Tariff is already high because of faulty PPAs, the interest and late payment
surcharge on the amount to be paid to two IPPs as per Hon‟ble Supreme
Court‟s verdict, should not be passed to the consumers. Fixed charges may
also be reduced.
Out of the two-part tariff, rates of Fixed Charges be decreased by 30-40%
which have nothing to do with electricity consumption.
The formula for calculating consumed units for Variable Charges be made
simple. Instead of 3 different rates i.e. Rs.4.99 for first 100 units, Rs.6.59 for
next 200 units and Rs. 7.20 for next 200 units only one rate should be kept for
first 500 or 400 units. Rate beyond that limit be kept different.
Rich farmers having more than 5 Acre of land should not be given any subsidy.
Comparatively poor farmers having less than 5 acres of land be given electricity
at nominal rates but it should not be absolutely free, because there is always
misuse of the things received in free.
PSERC – Tariff Order FY 2020-21 for PSPCL 265
No free electricity be given to Religious places as they earn a lot from
donations.
Electricity to Gau-Shallas etc. be given at subsidised rates but not absolutely
free avoiding national wastage and mis-use.
Pending dues of more than Rs.2100 Crore be recovered from Govt.
Departments or other such departments.
9. Sh. Kamal Dalmia, Chairman, Focal Point Industries Association, (Regd)
Amritsar, expressed his inability to attend the meeting However, He made following
suggestions in writing:
PSPCL should improve its working with the help of Internal Auditors having
global experience and minimize its losses.
Due to electricity rates on the higher side, Industry is not in a position to
compete with the products of adjoining states.
The number of suppliers be increased to have healthy competition,
improvement in quality of power. Presently, PSPCL is passing on the cost of
their inefficiency to consumers.
10. Sh. Nitin Bhatt, Regional Manager, Punjab/Haryana, Chandigarh, Energy
Efficiency Services Limited, Noida:
He stressed for reduction in cost of supply by reducing T&D losses and adopting
energy efficient appliances.
He apprised the Committee that LEDs are available in the Post Offices in Punjab
at subsidised rates. Also energy efficient ACs at 20% less cost are being
marketed as a „pilot project‟ in five districts of Punjab. He also apprised the
committee that more than one lac smart meters have been installed.
11. Sh. Vijay Talwar, Vice President Laghu Udyog Bharti:
He appreciated the formation of the Consumer Advocacy Cell in PSERC which
should be strengthened further to help, guide and watch the interest of electricity
consumers so that every poor consumer who can‟t afford to pay legal expanses
should be provided services free of cost.
To ease out the burden of surplus power that causes increase in Tariff every
year, he suggested that :
o Shortage of Technical Staff is causing delay in attending consumer
PSERC – Tariff Order FY 2020-21 for PSPCL 266
complaints. PSPCL should deploy the manpower in the Divisions/ Sub-
Divisions appropriately so that the operation work may not suffer.
o Value of damaged transformers is Rs. 396 Crore. The earthing and periodical
de-hydration of transformers installed by PSPCL is urgently required, which
will not only reduce transformer damages but will also reduce T&D losses.
This will ultimately help in increased use of electricity by consumers.
o During the period (paddy season), only short term power purchase is
required, for the rest of the year i.e. 16th Sep to 14th June every year there is
surplus power. Thus, this period can be said as off peak period and Tariff
rates during this off peak period should be reduced to Rs: 4/-per unit so that
consumers of all categories may use more power towards industries, hotels,
motels, marriage palaces, public lighting, Power intensive units, paper mills
etc. which will not only increase per capita consumption of electricity, but
industry can compete with units installed in neighbouring states. where
electricity rates including taxes are lesser than Punjab.
o During, winter season, surplus power in night hours can be reduced by
attracting industry to use more power during night at concessional rate
which should not be more than the rate on which PSPCL surrenders power.
o Tariff for Power Intensive Unit and General Industry under LS category
should be the same so as to encourage PIU to use more power which will
ultimately let Industry to compete with similar industry in other States.
o PIU Industry should be allowed to install independent feeder exceeding
Contract Demand of 1000kVA, which will solve problem of harmonics
generation and it will increase the usage of surplus power by getting un-
interrupted supply.
o T.O.D. tariff and Threshold limit rebates should be allowed to all the
consumers irrespective of load/voltage so as to encourage usage of
electricity during night hours by switching electric appliances and replacing
the gas burners with electric heater/induction heater for cooking food.
o Consumers should be allowed to increase 10% load/demand every year
without any service connection charges to meet demand which will
ultimately benefit PSPCL by way of additional fixed charges on extended
Load/demand.
o PSPCL should release electricity connection within 30 days from receipt of
PSERC – Tariff Order FY 2020-21 for PSPCL 267
Application (A&A Form) as mandated U/S 43 of Indian Electricity Act-2003.
o Feeder length should not be more than 2 KM to save line losses.
Consumers near or far away from sub-stations should be charged
proportionately the cost of feeder assuming 2 KM as length of feeder
irrespective of actual length. This will encourage consumers to install new
connections and extension in load/demand which will reduce surplus power.
o To increase the demand from 4000 KVA to 5000 KVA on H.T. in view of
capacity of 150 mm2 X LPE cables upto 5600 KVA and 300 mm2 X LPE
cables upto 8600 KVA. The increase in limits shall help to increase the load of
consumers to tackle surplus power and may also help in releasing of extra
demand without Right of way problems.
o LT supply should be given for getting the load sanctioned up to 150 kVA
instead of 99kVA so that consumer may extend their load/demand.
o Consumers who load up to 7kW may be allowed to have 3 phase
connection at their option so that consumers having single phase supply are
able to install electric installations such as geysers, air conditions etc. within
sanctioned load less than 7 kW.
In the Tariff Order and subsidy allowed by State Government. The words “the
Variable” charges is mentioned. Understanding the meaning of Variable tariff is
must for the purpose of calculating Government subsidy granted U/S 65 of
Electricity Act 2003.
Tariff Policy 2016 Clause 8.3(4) clearly states that Free Electricity is not
desirable as it encourages wasteful consumption of electricity and in most cases
results in lowering of the Water table which in turn creates an avoidable
problem of water shortage for irrigation and drinking water for the coming
generations. Subsidized rates of electricity should be permitted only upto a pre-
identified level of consumption, beyond which tariff reflecting efficient cost of
service should be charged from consumers.
Ministry Of Power, Government Of India has instructed all the Electricity
Regulatory Commissions of India to implement the policy of installing Prepaid /
Prepayment Meters within 6 (Six) months from 16-01-2020 i.e. date of issue of
these directions. Moreover, cash flow of Licensee will improve by getting
advance payment. Supply Code and Related Matters regulations (2014) also
mandate providing Prepaid / Pre-payment meters and to encourage supply on
PSERC – Tariff Order FY 2020-21 for PSPCL 268
Prepaid / Pre-payment meters has allowed 1% rebate.
He suggested that if the data downloaded from the meters shows power supply
not available on the meter of the consumer for more than 72 hrs in the billing
cycle, the fixed charges be reduced accordingly. This will help in quick restoration
of supply.
12. Er. Baldev Singh Sran, CMD/PSPCL:
While welcoming the feedback of the committee members, he gave his comments as
under:
The ACS including PPAs in Punjab is Rs.6.08 which compared to other State is
very reasonable.
There is a typical load pattern of the State, wherein maximum demand varies
from 5000-5500 MW in winter to around 12000 MW in the summer. Also, there is
wide variation in load pattern during day and night in the winter. With this type of
load, it is difficult to optimize the generation capacity of own sources and power
procurement from other sources. As a result, the state has surplus power during
the winter.
PSPCL is committed to give quality supply to its consumers at reasonable rates.
Of course, the issue of surplus power, higher employee cost and inefficiency in
certain areas is a matter of concern which PSPCL is trying to address.
The Average Cost of Supply (ACoS) in Punjab is still reasonable as compared to
most of the other States.
PSPCL is trying its best to decrease the burden of surrendered power by selling
power through exchange, although sale during the current year has not been as
good.
The Hon‟ble Supreme Court‟s decision regarding the payment of coal washing
charges to IPPs has resulted in increased cost of power from IPPs. So far Power
Purchase Agreements are concerned; a white paper is being prepared. However,
since 3100 MW of power is being met out from two IPPs, scraping of these PPAs
may result in reduced supply to AP and DS consumers during the paddy season,
when demand of energy jumps to 14000 MWs.
Operationalization of thePachhwara coal mine and Shahpur Kandi Hydel Project
will substantially reduce the cost of supply.
At present no weekly off day is observed. However, in case any preventive
PSERC – Tariff Order FY 2020-21 for PSPCL 269
maintenance is required, the same is scheduled with prior notice.
Efforts are being made to prevent thefts and recover arrears.
A request has been made to the Commission in the ARR Petition for
simplification of categories.
There is no scope for relaxation of ToD surcharge in the evening peak-Load
hours during the paddy season. as, despite the restriction being imposed on AP
feeders, load curve during paddy season is almost flat throughout the day.
Morning peak during the summer is also a serious issue as exchange rates during
this period is quite high. However, in view of only small number of consumers
opting for exclusive night category, PSPCL has consented to extend the benefit to
this category for the ongoing paddy season.
The Chairperson thanked all the members for their valuable comments and
suggestions.
The meeting ended with a vote of thanks to the chair.
PSERC – Tariff Order FY 2020-21 for PSPCL 271
ANNEXURE-IV
Category-wise & Voltage-wise Cost of Supply and Cross Subsidy comparison with Cost of Supply
Voltage level
FY 2020-21
Consumer category
Cost of Supply Cross subsidy level w.r.t. Cost of
Supply Rs./unit
I II III IV
220 kV/132 kV
Industrial 5.14 39.96%
Traction 5.05 43.49%
Bulk 5.06 52.84%
66 kV/33 kV
Industrial 5.81 23.90%
NRS 6.88 17.61%
Bulk 5.58 38.64%
Domestic 6.07 0.15%
11 kV
Industrial LS 6.36 13.17%
Domestic 6.15 -1.15%
NRS 7.37 9.80%
Bulk 6.16 25.55%
LT
Industrial SP 7.80 -11.25%
Industrial MS 8.38 -14.11%
Domestic 6.97 -12.74%
Agriculture 6.17 -10.46%
NRS 8.06 0.37%
Public Lighting 6.83 14.21%
Bulk 6.23 24.16%
Note: The voltage-wise/category-wise Cost of Supply (CoS) worked out on the basis of estimated/allocation data supplied by PSPCL may not be depicting the actual cost of supply.
PSERC – Tariff Order FY 2020-21for PSPCL 273
ANNEXURE-V
LIST OF OBJECTORS – PSPCL
Objection No. Name & address of Objector
1. Yashpal Bansal, President, Lala Sant Ram Memorial Library (Regd.), Bathinda.
2. Tarun Bahal, GM Projects, Ganpati Township Ltd, Hotel Comfort Inn Tulip Height, Opp. Rose Garden, Goniana Road, Bathinda.
3. Tarun Bahal, BCL Industries & Infrastructure Ltd., Ganpati Estates, Hotel Comfort Inn Tulip Height, Opp. Rose Garden, Goniana Road, Bathinda
4. Mittals, Ganpati Townships Limited, Hotel Comfort Inn Tulip Height, Opp. Rose Garden, Goniana Road, Bathinda
46. Government of Punjab, Department of Power, (Power Reforms Wing), Chandigarh.
PSERC – Tariff Order FY 2020-21 for PSPCL 275
ANNEXURE-VI PSPCL - OBJECTIONS
Objection No.1: Lala Sant Ram Memorial Library (Regd.) Issue: A Library (Institution) is running in the name of Freedom Fighter Lala Sant Ram in the Quarter No. T-4 of Grade-3, Civil Station Bathinda allocated by the Government. The bill amounting to Rs. 26336/- is pending against its electricity A/c No. 30011556929. We met Executive Engineer of PSPCL who said that after death of Lala Sant Ram, the bill cannot be considered in the Freedom Fighter category. The Library is running for the public welfare. This Institute is not personal and not for the personal benefit of anyone and not dead. We are only caretaker for this library and there is no source of income of this library. It is therefore requested that the bill be corrected after giving free supply of 300 units for each month in the Freedom Fighter category as per rules. PSPCL’s Reply: The issue does not relate to the Tariff Petition filed and shall be dealt separately. Commission’s View: The objector may note the response of PSPCL. Objection No. 2, 3 & 4: Ganpati Townships Limited
We are Distribution Franchisee for Single Point connection for Ganpati Township Ltd. at Bathinda. The terms and conditions of the agreement are so hard and cumbersome, that sometimes we feel to terminate the Agreement. But due to 100% underground /under ceiling cabling it is beyond thought to get out of the agreement. It is therefore, requested to review the terms and conditions of the Agreement and revise the tariff for Single Point Connections for Distribution Franchisee so that running of the same may become financially viable. Main difficulties are detailed as under: - Issue No.1: Terms and Conditions of the Franchisee Agreement i) As per para-7 of CE/Commercial memo no.303-397 dated 30-05-2017, LT supply is being given to consumers inside franchisee area from our own LD system. Our main single point supply is metered at 11KV so HT rebate on the whole consumption of single point supply should be given to us. Moreover, we also bear distribution losses of LD system which is about 10-15%, establishment expenditure to take meter readings to prepare bills, to distribute bills, to collect revenue and to maintain an office, depreciation of electrical equipment @ 3.10% per year, R&M of the electrical equipment/LD system and annual increase in salaries of staff are per price index. This expenditure does not commensurate with the 10% rebate allowed on the SOP charges of the billed amount of all the consumers. It is requested that rebate may please be enhanced to at least 18%. ii) As per para-6 of the memo only 2% losses are allowed on the difference of the main meter and sum total of all the connections inside the franchisee area to account for the consumption of un-metered common services. Whereas PSPCL distribution losses as per tariff order MYT 2019-20 are 15-25%. So at least 15% losses for the consumption of common services should be given instead of 2%. iii) In case of NRS connections fixed charges, we pay @Rs110/KVA and we charge only Rs 45/KW for load up to 7KW, Rs 55/KW for load exceeding 7KW to 20KW and Rs 100/KVA for loads exceeding 20KW up to 100KVA. Most of the connections of SCO‘s are up to 20KW. So, there is a loss of revenue borne by us. Moreover, consumers with load less than 20KW are billed on KWH basis whose power factor is generally much less than 0.9. Losses due to this reason are also born by us. iv) As per para-2 of CE/Comm. memo no. 393-397 dated 30-05-2017 regarding installation of meters on the existing/New individual connections, the meters will have to be got tested/issued from ME Lab or private meters will have to be got tested from ME lab after depositing meter testing fee with SDO Distribution PSPCL. This procedure is very cumbersome and time consuming which will increase our expenses manifold. Moreover, all the existing meters installed are branded make and accuracy has already been tested by the manufacturers. v) As per para-3 of the memo, the billed amount of the consumers as per billing done on behalf of PSPCL shall have to be deposited with PSPCL on or before the due date of the bills. We may get the billed amount on the due date or not, depositing amount with the PSPCL office again involves one person per day and hence additional burden on us including defaulting amount, if any. vi) As per para-8 of the memo, BG as security for LD works equivalent to 25% of cost of outdoor S/S erected/installed may not be got deposited from us as R & M of the LD System is solely our
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responsibility. Keeping in view the above difficulties, you are requested to review the tariff applicable for Distribution Franchisee. PSPCL’s Reply: i) Since the billing is being done by the Distribution Franchisee on LT Supply to the consumers inside its area, voltage rebate is not admissible. However, if there are any HT/EHT supply consumers inside the area of Distribution Franchisee, the voltage rebate may be passed on to such consumers as applicable in the Tariff Order. The distribution losses of LD system cited in the letter as 10-15% are not justified for a small internal Distribution system of the Distribution Franchisee. Maximum of 2% losses are reasonable for the same. Therefore, to account for losses and other works being performed by the Franchisee, a rebate of 10% or 12% on the SOP charges is being allowed on the energy billed. ii) Common Services have to be separately metered. However, in cases where it is not possible to meter the supply to consumer services in the already laid down system, the consumption of common services may be segregated at the main meter as difference of cumulative consumption of all metered supply and reading of main meter by allowing 2% losses. The figure of units thus arrived is to be considered as consumption of common services. The 2% losses are reasonable for a small internal Distribution system of the Distribution Franchisee. On the other hand, the PSPCL distribution losses cited in the letter as 15-25% are for the entire Transmission & Distribution System of electricity starting from the Grid/Substation to the consumer's premises. Therefore, the same cannot be compared with the losses in the internal Distribution system of the Distribution Franchisee. iii) The sum of the billed amount of all the consumers as per slab-wise billing done by Distribution Franchisee has to be deposited with PSPCL by the Distribution Franchisee. In addition to it, Distribution Franchisee has to deposit the amount billed for the difference of cumulative consumption of all metered supply and reading of main meter. iv) The meters are the revenue monitoring/computing units for PSPCL. Therefore, the meters have to be tested as per PSPCL specifications to ensure their accuracy to the satisfaction of PSPCL. v) Due date of the bill is as per the Regulations of Supply Code and have to be adhered by all the consumers including Distribution Franchisee. vi) This Bank Guarantee is security amount for LD works inside the area of Distribution Franchisee which is necessary to be kept as a safeguard for consumers in the event of any default on part of Distribution Franchisee towards maintenance or repair of the LD system. The same has been reduced from 25% to 5% of the cost of HT outdoor substation erected/installed in the Franchisee area w.e.f. 13.02.2018 as per Commercial Circular No. 08/2018 dated 13.02.2018 Commission’s View: The issues pertain to the terms and conditions of the Franchisee Agreement and does not relate to the instant petition. However, the objector may note the response of the PSPCL. Issue No. 2: Time of Day (ToD) Working hours of the Mall are such that maximum load comes during peak load hours and almost nil load remains during night hours. We cannot reduce our load during peak load hours. So, on one side we are burdened with peak load charges and on the other side we cannot avail the benefit of rebate during night hours as per ToD tariff. So, it is requested to give us some relief from peak load charges. PSPCL’s Reply: Time of Day (ToD) tariff is a tariff structure in which different rates are applicable for use of electricity at different times of the day. There are certain times in a day when the demand for electricity is at its peak. During these times, the utility has to purchase power at a very high cost, much higher than the price paid by the consumers. Time of Day tariff is implemented to reduce consumption of electricity during peak hours. To achieve this objective, electricity is made expensive during peak hours so that consumers use less electricity during these hours. Electricity charges during off peak hours are also reduced as an incentive for people to use more electricity during the off-peak hours. As per Tariff Order 2019-20 for FY 2019-20, ToD Tariff shall be applicable to NRS/BS consumers with sanctioned Contract Demand exceeding 100 kVA, all LS/MS consumers (including Rural Water Supply Schemes & Compost/Solid Waste Management Plants, for loads with Contract Demand exceeding 20KVA) and EV charging stations which cannot be altered to suit the Load curve of the consumer. Commission’s View: The Commission agrees with PSPCL. The objector may note the response of the PSPCL.
Issue: Nonpayment of electricity bills As per various newspaper clippings, critical shortcomings/lapses are reported regarding nonpayment of electricity bills by bigwigs of society rather law enforcers i.e. DCs & SSP for their residences and offices in particular and all other Government Officers residences and offices in general and nonpayment of electricity subsidies by the Punjab Government itself which they always promise to pay in time before the commission. PSPCL never dare to touch these bigwigs to recover the public money whereas they always use full force to recover from poor consumers even by minor defaults. By not recovering Crore of rupees from these bigwigs of society and due to nonpayment of huge subsidies by Punjab Govt., PSPCL is forced to buy money from market at exorbitant interest rates for working capital which is booked as expenditure in the ARR by putting huge costs to the consumers which is a grave injustice to the consumers. So in the interest of justice it is humbly requested that quarterly progress regarding recovery of dues from the above said bigwigs may please be ensured by the commission from PSPCL and as of subsidies by the government for various sections of society seeing the track record of failure of Government for payment, it may please be either discontinued or the Punjab Govt. may be asked to pay in advance so that rest of the consumers should not suffer. PSPCL’s Reply: The query does not relate to the Tariff Petition filed by PSPCL and will be dealt separately. Commission’s View: The objector‘s concerns are noted. The Commission determines the tariff on the basis of assessed revenue and not the realized revenue. However, PSPCL, for its own financial health, needs to ensure recovery of its dues. Objection No. 6: Indian Ex Services League, Bathinda Issue No. 1: Theft and Non-payment of dues a) Electricity now-a-days is the essential need for domestic life, Industry, Agriculture and Services
Sector. The large-scale theft by all sectors has badly affected the common man and ruined the Economy of Punjab and State Finances. Who is to be blamed? The Political will of Governments of the day-Let it be any party in power be it Congress or BJP.
b) When the Jathedars like Dayal Singh Kolian Wali or a Transporter of Akali Dal are defaulters in lakhs nearing one Crore and Deputy Commissioners, SSPs etc all do not have moral character to pay Bills and Set bad example to common Citizen, then the Wisdom of Philosophy will dis-appear from the National Scene. When Chief Engineers and their ilk are found stealing power by Kundi connection from Street Lights Feeders in Haryana‘s Panipat Thermal Power Station as reported in media few day ago by Power Minister, how a Junior Engineer or Lineman can dare to check theft of Electricity. Free Power for Tube- Wells even for Super-Rich Farmers for many Tube-Wells is depleting water Table. The land of Five Rivers will turn shortly to barren land. Drinking water in Bottles sells with high price is transported for delivery. A shameful Scenario for Punjab. Like one citizen-one vote; only one Tube Well be given free power.
c) When a Big Leader like Parkash Singh Badal supports Kundi connection at Maghi Mela at Mukatsar, how the common man can build-up his integrity and honestly. The PSPCL and PSTCL with Thermal Power Station Engineers have done good work to supply power generated with regulated load shedding during peak seasons. The State is at 4th position in Power Management in the country but let down by Political class bereft of Sikhism to follow Gurus Footprints — equal Distribution.
d) A few letters sent to CMD PSPCL, CMO Punjab and rigid Rules followed by States like Kerala, Gujrat, Maharashtra State Electricity Boards are examples of Good Governance in Energy Management.
PSPCL’s Reply: The query is not related to the Tariff Petition filed and shall be dealt separately. Commission’s View: The objector‘s concerns are noted. PSPCL is directed to take strict action on theft as per the provisions of the Electricity Act. The Commission determines the tariff on the basis of assessed revenue and not the realized revenue. PSPCL, for its own financial health, needs to ensure recovery of its dues.
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Issue No. 2: a) May we request the Chairperson of Punjab State Electricity Regulatory Commission to guide the
Government of Capt. Amrinder Singh to show Political will to relieve Debt-ridden Power Corporations to save the economy of Punjab. Otherwise Punjab State will plunge into Total Darkness during nights and Crime in Society and particularly against Women and Young Girls will increase beyond Proportions. Ex-Servicemen of Punjab like those in Haryana can help to raise revenue from Electric Supply and Bill collections.
b) Chief Minister of Haryana has done well that any one Defaulter in electricity Bills cannot contest any election be it for Sarpanch, MLA, MP. Any village found stealing Electricity will not get 24 x 7 Supply. More theft means reduced hours supply varying 12 to 18 Hours to control fiscal loss to power utilities. We need that type of rigid instructions for implementation. As an upright integrity, your good self as Chairperson SERC can do it. CM of Haryana has also issued instructions that there will be no Political interference in Electric Supply System. Also, the damaged Transformer will not be changed unless Panchayat and Gram Sabha agree to Pay Bills regularly.
c) Since 11th Schedule to Constitution lays down responsibility of Panchayat and Duties of a
Sarpanch laid down in Punjab Panchayat Act-1994 (Chapter-III), it will be Prudent and appropriate to legally add the responsibility of a Sarpanch to ensure that there will be no theft of Electricity in his Village. Every house, School, Dharamshala and Water Supply Scheme will Pay Bills regularly to avoid heavy amount accumulations. This duty of Panchayat be added in Article 30 (9) of ibid Act. Similar provision be made in all municipalities Acts.
d) To discipline Senior Officers for use of Electricity in their Residence, Pre-paid Chips before Electric Meters must be fixed on Electric Poles for tapping Service Connection in the Fuse-Cut out itself to make Pre-paid use of power. Meters for Camp Offices of all Administrators, Police and Judicial Officers should be in the Pillar Boxes outside the House. Let the Charity began at Home to show our Resolve. ―Let the Authority of Punjab State Electricity Regulatory Commission Prevail to Check theft of Power. Government offices should be covered by Bureau of Energy Efficiency (BEE) and power consumption be laid per person with 15 to 20 Sqm Floor Space to make everyone conscious of Energy use with ECBC Regulations stipulated now.
PSPCL’s Reply: The query has been addressed to the Commission. Commission’s View: The objector‘s concerns are noted. Objection No. 7: Er. Darshan Singh Bhullar. Issue No. 1: Domestic Consumers Domestic Consumers in the State are reeling under the high tariff. In spite of the lower ―Average Cost of Supply‖ in Punjab as compared to neighboring States, domestic consumers are paying huge unjustified amounts. Industrial and Commercial tariff needs to be looked into closely for providing relief to DS consumers. Across, India, 22 states/UTs have higher commercial tariff than Punjab and 28 states/UTs have higher industrial tariff than Punjab. The industrial tariff in Haryana is Rs.6.87/kWh to Rs.8.14/kWh,in Delhi is Rs.10.68/kWh to rs.13.23/kWh, in UP is Rs.7.95/kWh to Rs.10/kWh and in Rajasthan is Rs.7.36/kWh to Rs.8.89/kWh where as it is just Rs.4.99/kWh to Rs.6.13/kWh in Punjab. Further government is paying Rs.1990.38 Cr. as direct subsidy to Industry and whereas direct subsidy to the selected DS consumers is only Rs.1623.05 Cr. If incentives to the industry such as ―Consumption of Power exceeding previous two FY Consumption‖, Time of Day (ToD) rebate, Special Night Tariff etc. is considered then the industrial tariff in Punjab becomes almost lowest in India and as a result domestic tariff becomes higher which is quite unfair and rankle. So, tariff of these two categories needs to be little bit on higher side. Further, Cross Subsidy should be given to the poorer section of the society consuming below a specific amount of energy in accordance with the National Tariff Policy. Cross subsidizing amongst various categories needs a freshlook:
Stop Subsidizing AP Category from DS Category: -Domestic Consumers are subsidizing Agriculture Sector in Punjab only. Cross Subsidy Level for DS Category is +2.71% in FY 2019-20 putting a burden of approx. Rs.269.24 Cr. on DS category. The gap so created must be plugged by withdrawing subsidy from the rich farmers.
Divert Cross Subsidy from other Categories to DS Category: - Whole of the amount of the cross subsidy, which was approximately Rs. 1000 Cr in FY2019-20, charged to other categories
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should be used to subsidize DS category on the pattern of other States e.g. Delhi
Inter Slab Cross Subsidy: - The rich consumers consuming high energy should be charged high tariff as is being done in Delhi and Haryana for cross subsiding the lower strata of the society. Delhi is charging Rs.3.00/kWh up to 200 units and Haryana is charging just Rs.2.70/kWh for first 50 Units and Rs.4.50/kWh for next 100 Units whereas Punjab is charging Rs.4.99/kWh for first 100 units. So, Inter Slab Subsidy must be restructured to provide benefits to the poor DS consumers.
PSPCL’s Reply: Determination of cross subsidy is the prerogative of the Commission. Commission’s Views: The suggestion is noted. Issue No. 2: Electricity Duty (ED) National Tariff policy states that ―as a substitute of cross-subsidies, the State Government has the option of raising resources through mechanism of electricity duty and giving direct subsidies to only needy consumers.‖ So, in my opinion, Electricity duty should also be treated as Cross Subsidy. When cross subsidies and 20% ED are taken together then the total cross subsidy crosses the limit of +/-20% and it is a violation of National Tariff Policy. No doubt that it is not in the purview of PSERC to impose/reduce the amount of ED but as the regulator is supposed to take care of the consumers by making PSPCL/PSTCL accountable for each paisa adding to the tariff, but in view of the above, it is requested that the Punjab Govt. must be made answerable for imposing too high ED i.e. 20%. Further it is not out of context to mention here that across India four States are charging 10-15% ED and rest are charging just around 0-8% ED. PSPCL’s Reply: Electricity duty is prerogative of the Government of Punjab and the determination of cross subsidy is the prerogative of the Commission. Commission’s View: It is the prerogative of the State Govt. to decide on matters in respect of levy of electricity duty. Issue No. 3: Theft of Electricity/ Distribution losses Theft of Electricity: It has been estimated that energy equal to the amount of around Rs 1200 is being stolen each year. There are 15 (Bhikhiwind, Patti, West Amritsar, Ajnala, Sub urban Amritsar, City Tarn Taran, Sub Urban Btala, Patran, Lehragaga, Zeera, Bhagta Bhaika, Zeera, Malout, Rampura Phul and Jalalabad) notorious divisions having line losses ranging between 30% to 71% whereas the overall losses for 2018-19 were only 12.32%. So, in order to curb the theft, especially in above noted divisions, PSERC is requested to monitor the checking of theft by various agencies. PSERC should ask for submitting quarterly theft checking reports by DS organizations and Enforcement Wing of PSPCL separately. Eradication of theft will lead to reduce the ARR of PSPCL which will result in lowering the tariff. PSPCL’s Reply: PSPCL is striving hard to curb theft in these divisions despite the stiff resistance being faced by
distribution and enforcement agencies from local public and various kissan unions. Sometimes PSPCL employees have been Gheraoed and Manhandled by public during checking of connections. Even some of the PSPCL employees were seriously injured and hospitalized during these incidents. In spite of this PSPCL is carrying out checkings on routine basis.
Most of the divisions mentioned in the objection pertains to Border and West Zones and the checking status of these zones during FY 2019-20 upto December 2019 is as under: -
Zone Nos. of connections
checked Theft cases
detected Penalties Imposed
( In Lacs)
Border 320417 14814 1894.07
West 82990 9189 1599.09
Total 403407 24003 3493.16
However, During FY 2019-20, upto December 2019 8,59,528 nos. connections have been checked by distribution organization under PSPCL and penalties of Rs. 89.29 Cr. have been imposed on 65433 nos. power thieves which shall be continued in remaining year.
Also, people are being made aware about the consequences of power theft by holding meetings with local leaders Commission’s View: PSPCL is directed to take strict action on theft as per the provisions of the Electricity Act. Also refer to
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directive No. 6.1 regarding reduction in distribution losses in high loss divisions. Issue No. 4: Free Electricity to the Rich Farmers: As the govt is providing free electricity to the selected poor e.g. SC, BC, BPL etc. there must be some criterion to provide subsidy to the agriculture sector. It should be based on the land holding. Only poor and medium farmers should be provided free electricity. The large and extra-large having land holding between 15-20 acres may be provided electricity on reasonable subsidized rates. There should be no subsidy for rich farmers, income tax payee and farmers having more than one tube well connection. Direct Subsidies are not in purview of the Commission, but the EA Act has appointed the Commission to listen to the views of Electricity Consumers. I hope that your good self will take note of this and will convey to the government. This is the voice of many not my own. PSPCL’s Reply: Providing subsidy is the prerogative of the Government of Punjab. Commission’s View: Subsidizing any consumer category is the prerogative of the State Govt. Objection No. 8: Indian Ex Services League, Bathinda. Issue No. 1: Theft of Electricity There is a large-scale theft of Electricity in the rural villages particularly infested with Union Leaders be it KISSANs, Teachers, Lineman or any other by name and Industrial Units/Govt Offices and so on. We have met Engineer-in-Chief and three Dy. CEs vigilance from Amritsar, Bathinda and Patiala in the Guest House at Bathinda. On a Single day vigilance check in Malout, Lambi and Mukatsar area Rs. 50.00 Lakh fines /recovery was found due on single day on 11.12.2019. PSPCL’s Reply: PSPCL is striving hard to curb theft in high losses areas despite the stiff resistance being faced by distribution and enforcement agencies from local public and various kissan unions. Sometimes PSPCL employees have been Gheraoed and Manhandled by public during checking of connections. Even some of the PSPCL employees were seriously injured and hospitalized during these incidents. In spite of this PSPCL is carrying out checking‘s on routine basis. During FY 2018-19, PSPCL had checked 16,58,663 nos. connections, out of which 1,41,639 nos.
cases of theft and UUE were detected and penalties to the tune of Rs. 179.29 Cr. were imposed on people who were involved in power theft.
Similarly, during FY 2019-20, up to December 2019, 8,59,528 nos. connections have been checked by distribution organization under PSPCL and penalties of Rs. 89.29 Cr. have been imposed on 65433 nos. power thieves which shall be continued in remaining year
Commission’s View: PSPCL is directed to deal with issues in respect of theft as per provisions of the Electricity Act. Issue No. 2: a) Ex-serviceman employed in Haryana with the blessings of Chief Minister Bhupinder Singh
Hooda, within three months the Revenue generation was up by 3 times when meter Reading and Billing was done by ESM. The Dy. CE (Vigilance) Patiala brought out that his batch mates have confirmed this Revenue generation.
b) After discussion, the E-in-C and his ream agreed to enroll ESM with outsourcing Agency providing manpower for Meter Reading/Billing in Bathinda Zone (SW) as a Pilot project with Two days training capsule to ESM particularly from Engineer/EME/Signals Technical Stream.
PSPCL’s Reply: The query does not relate to the Tariff Petition and has to be dealt separately. Commission’s View: The Objector may note PSPCL‘s response Issue No. 3: The PSPCL & PSTCL can come out from debt and Subsidy from Tube Wells/Free Power to BPL/SCs. You are requested for directions to Chairman PSPCL to prepare the Scheme to improve the financial Health of Punjab to pay salaries in time to reduce frequent protests by employees/beneficiaries of Govt. Schemes. PSPCL’s Reply: The query has been addressed to the Commission. Commission’s View: This is a matter regarding subsidy and may be addressed to the Government.
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Objection No. 9: S.S. JAIN SABHA NABHA. The structure of Domestic supply bill contains Energy charges (EC), Fixed charges (FC), Electricity Duty (ED), Infrastructure Dev. Tax, Oct/MT, FCA (Fuel Surcharge) and Meter Rent etc. Besides increase in the rate of Electricity from 80 paisa to 115 per unit +20% tax, PSPCL has imposed Fixed Charges on Domestic supply consumer w.e.f. 1.1.2018 is Rs. 20/- to 30/- per kW which was further increased from time to time. Now rate of Fixed charges is Rs. 35 to 50 per kw. The present Govt. has promised at the time of elections, to give relief to public by decreasing the rate of electricity. But it is surprising that besides increasing the rates of DS consumers, it has also imposed Fixed Charges on load basis w.e.f. 1.1.2018 and further increased in it. It is also pointed out that 20% taxes (ED+ Infrastructure tax +Oct) are also imposed on Fixed Charges. Due to Fixed Charges & 20% taxes on it, the rate of electricity has become so high that the amount of Bill has risen to 150% after the new Govt. came in, this is injustice to people of Punjab. Now, if a consumer consume less electricity, his rate per unit comes more than of consumer consuming more electricity on same load i.e. if on the same load, a consumer consumes less electricity or saves electricity, he has to pay more average rate per of unit. Issue No. 1: Earlier in the year 2000, ED was charged 9 paise per unit for Domestic Supply and 11 paise per unit was for Industrial and Commercial supply consumers. But now it is changed @ 13% of EC & FC, which comes to 125 paise to 160 paise per unit. Throughout India, rate of ED in Punjab are the highest. In all the States, ED is being charged on the basis of consumption. Further, Octroi/MT has been converted @ 2%of the EC and FC instead of 2 paise per unit of the consumption. This practice does not exist in any other State i.e. charging of Octroi/MT on ad valorem basis. Infrastructure is charged @5% of the EC & FC and it is not being charged in any other State. It is requested that: i) Electricity Duty should be charged at the rate of per unit as it was in practice before year 2000. ii) Oct./DF levies be stopped as this type of levies are not being charged nowhere, as the share of
GST is being provided to Punjab Govt/Municipal Corporation. Levy of fixed charged be stopped, at least 20% tax (ED/DF) should not be levied as fixed charged. PSPCL’s Reply: Levy of ED and other taxes is the prerogative of the Government of Punjab Commission’s View: It is the prerogative of the State Govt. to decide on matters in respect of levy of electricity duty and other taxes. Further, the Punjab is one of the last State to implement two-part tariff as provided in the National Tariff Policy. Issue No. 2: Has PSPCL checked/reduced its line losses for Theft of Energy? PSPCL is fooling people by showing its line losses and theft of energy as electricity consumed in Agricultural supply and in this way PSPCL is concealing its own weaknesses. Line loss should be reduced and meters on all the AP consumer premises be installed to determine actual line losses. PSPCL should reduce its expenditure/Line losses/theft of energy and should withdraw its proposed 14% increase in Tariff or PSERC should not allow this increase. PSPCL’s Reply: T&D losses for FY 2018-19 is 14.17%. The calculation of the same has been mentioned in the Tariff Petition. Commission’s View: Refer para 2.3 of this Tariff Order. Issue No. 3: In Haryana, Gujrat and Delhi rates of electricity are less than Punjab State. Hydro Power constitutes a major share/part of the PSPCL‘s generation. So why the electricity rates are higher than Haryana? No fixed charges are being levied there. After 1.6.2019, detail of the component of the electricity Bill is being shown on the bill, itself. Electricity Bills are too complicated to understand by the consumers. Even PSPCL official dealing hands are not able to understand it. The Electricity Bill structure should be easy to understand. The Free supply to AP/Domestic consumer is being provided, out of revenue collected. State levies 20% of the Bill i.e ED, FC and Octroi etc. which is the highest in India. The burden of subsidy is thrusted upon the general public. It is injustice to the people of Punjab. Free AP supply is being provided to landlords and rich farmers. Income tax is also not levied on AP income.
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PSPCL reply: The objector has only compared the Tariff for the Domestic Category of Punjab with the other states whereas the Tariff for Commercial category and industrial category is higher in Delhi than in Punjab. The average cost of Supply is the prime indicator of Tariff and the ACoS of Punjab is lower than the other states for which the comparison is done. The ACoS of Punjab is Rs.6.62/unit, for Delhi (TPDDL) is Rs.7.32, for Haryana is Rs. 6.89. Further, Haryana charges MMC in place of fixed charges for Domestic category. The provision of taxes and subsidy is the prerogative of the Government of Punjab. Commission’s View: The tariff is determined as per PSERC Tariff Regulations. However, subsidy and ED etc. are the prerogative of the State Government. Issue No. 4: Increase in tariff @ 30 paisa per unit w.e.f. 01.01.2020 be withdrawn. PSPCL’s Reply: The 30 paisa has been levied as a surcharge arising out of the judgment passed by Hon‘ble Supreme Court in contempt petition filed by TSPL and NPL. Commission’s View: The objector may note the response of the PSPCL.
Objection No.10: Er. Darshan Singh. Issue No. 1: It has become a well-known fact through discussions at various media forums that Punjab is reeling under high Electricity Tariff due to poor and questionable decisions w.r.t. addition of excessive Thermal Power Generation in private sector and one sided PPAs with these IPPs. It has now become very much clear that power in State is costly because of addition of surplus Generation capacity (3920MW) in private sector which is more than the envisaged /planned as originally only two units at TSPL (660 MW each) i.e. 1320 MW were to be installed but the capacity was enhanced to 1980 MW silently without any justification /planning. Now, this fact has also been raised through a paper issued by a section of Congress MLAs on 21.01.2020 that the earlier Cong Govt. in Punjab during its regime in 2006 period had framed a policy that keeping in view the demand scenario in the State, the new Green‘ field project in Thermal power should be limited to 2000 MW and each plant should not be more than 1000MW but the projects of capacity 3920 MW have been erected and commissioned through IPPs. Additional burden on State power consumers due to this excess 1920 MW above the planned requirement should not be a liability on the Punjab Energy Consumers. PSPCL’s Reply: Secretary/ PSEB, vide its letter no 13602/W-141 dated 02.08.2006 forwarded a proposal for setting up 3 No. power projects, one each of 1000 MW at Doraha (Gas-cum-coal based), Nabha and Talwandi Sabo to the Secretary/ Power Govt. of Punjab. In order to meet the gap between peak demand and availability of power, it was planned by erstwhile PSEB to add about 10,000 MW of power during the 11
th (2007-12) and 12
th (2012-17) five year plans which included power from the above three within
State power projects. Later on Gas-cum-coal based Doraha Project could not materialize due to issues relating to non-availability of gas, finalization of site for acquiring land etc. The above was based on the power scenario during 10
thplan (2002-2007) and 11
th plan (2007-2012)
wherein the installed generation capacity in Punjab during the year 2006-07 was around 4431 MW in State Sector and the share of Punjab in Centre sector projects was 1488 MW. As per the peak demand assessed by 17th Electric Power Survey Committee of CEA and expected projected availability of peak demand worked out as per peak demand availability norms of CEA for various power plants, the gap between demand and availability was projected as 2435 MW (34.5%) by the end of 10
th five year plan and 3182 MW (30.4%) by the end of 11
th five year plan. Therefore, an
additional capacity of 4000 MW @ 80% PLF was estimated to be required to meet the gap between demand and supply of power during the 11
th five year plan.
The Punjab Council of Ministers in the meeting dated 06.09.2006 approved. Commission’s View: The objector may note the response of PSPCL. Issue No. 2: Date of signing PPAs with IPP‘s and fixed charges paid to them in the year 2017- 18 are as per table given below.
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Sr. No. PPA Date lPP Fixed Charges per Unit being paid in 2018-19
Technology
1. 22.04.2007 MUNDRA 0.90 Super Critical
2. 07.08.2007 SASAN 0.17 Super Critical
3. 01.09.2008 TSPL 1.18 Super Critical
4. 26.05.2009 GVK 2.20 Sub Critical
5. 18.01.2010 NPL 1.36 Super Critical
It is clear that when most of PPA‘s were done in the year 2007-08 of super critical technology then what was the compulsions to sign PPA‘s with M/s GVK in 2009 of sub critical technology and that too at high fixed charges? It shows the malafide intentions of authorities and this illogical framing of fixed charges should be reversed immediately to give relief to the consumers. PSPCL’s Reply: The issue is not related to the Tariff Petition filed and shall be dealt separately. Commission’s View: The objector may note the response of PSPCL. Issue No. 3: It is agreed that Govt. can give free or subsidized power to any category of society but tax (ED) part of these free-bees should not be charged from the remaining consumers who are already reeling under burden of high tariff. Therefore, to reduce the burden, ED should also be charged from free users of power. PSPCL’s Reply: This query does not relate to the Tariff Petition filed and shall be dealt separately. Commission’s View: Charging of ED is the prerogative of the State Government. Issue No. 4: PSPCL signed PPA.s with M/s Sukhbir Agro for purchase of Bio-mass power at rate Rs 8.16 per unit with annual increase of 5% in the year January 2018. Later in the same year BODs of PSPCL approved the proposal to convert its unit no. 4 of GNDTP to 60 MW and rate of power from that project was estimated just Rs 4.5 per unit that too with profit margin of 16%. The commission is humbly requested to ask M/s Sukhbir Agro to justify/reduce the high rates being charged so that consumers of State can get some relief. PSPCL’s Reply: The issue is not related to the Tariff Petition filed and shall be dealt separately. Commission’s View: The Objector may note the response of PSPCL. The tariff for the biomass based power projects of Sukhbir Agro Energy Limited was determined by the Commission vide Orders dated 06.12.2016 and 20.12.2016 in the petition no. 53 of 2016 and 83 of 2016 respectively. Similarly, the tariff for the stated 60 MW biomass project at GNDTP, Bathinda shall be determined by the Commission as and when the petition for the same is filed. Objection No. 11: PHD Chamber of Commerce. General PSPCL has submitted ARR 2020-21 to the tune of Rs.43884.64 Cr comprising of projected Net ARR for the FY2020-21 as Rs.36156.38 Cr and a revenue gap of Rs.7728.26 Cr including carrying cost. The revenue gap projected by PSPCL is increasing every year in ARR whereas generally surplus is being determined by the Commission. Further, PSPCL projections of ARR of the ensuing year and the final figures in ARR True Up for the same year after two years clearly indicates that either the figures are being inflated or extensive exercise taken up by PSERC for determining the revenue requirement and pegging of expenditure by PSERC has no consideration for PSPCL and they are incurring expenditure at their will. Moreover, this expenditure is being incurred by PSPCL by drawing interest bearing working capital loans from various sources and incurring finance charges on arranging loans. Perusal of the above figures speaks of the total financial indiscipline. Issue No. 1: The power supplied to the agriculture sector has been growing consistently at very high rate due to
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increase in capacity of tube wells due to depletion of water table. Now with the lifting of ban on release of new connections for agriculture since last year, the consumption is further set to increase due to additional new tube well connections being released. Providing the power at the subsidized rate of Rs 5.28/kWh as per TO 2019-20, which is far less than the actual cost of power (as high as Rs.7.18 per unit as per COS for 2019-20, Page 241 of TO 2019-20) is leading to serious financial crisis for the PSPCL and will ultimately seriously affect the interest of industrial consumers in the State, which are already reeling under recession. It is imperative to cap the maximum amount of power year wise & approved by the Commission that can be supplied to agriculture sector at the subsidized rate inclusive of additional connections projected in a year and the power supplied above that limit should be billed as per Cost of Supply for agriculture power as worked out in ARR. PSPCL’s Reply: The objector has requested the Commission to limit consumption and fix the quantum of subsidized power to be supplied to categories being cross-subsidized. In this regard it is submitted that in domestic category as consumption increases the average cost increases due to consumption slabs. In case of AP consumers, proposed tariff for AP category for FY 2020-21 is Rs.7.26 /Unit same as Average Cost of Supply, so the cross subsidy for AP Category would be zero. Further all these factors such as slab and category wise tariff rates, cost of supply, cross subsidy etc. are in the purview of the Commission while keeping in view Electricity Act, 2003 and provisions of the PSERC Tariff Regulations and Act. Further, it is submitted that as per Clause 5.3 of Supply Code 2014, GoP can decide the number of agricultural pump set (A.P.) connections and the manner in which these are to be released each year in the State or any part thereof. Commission’s View: Subsidizing any consumer category is the prerogative of the State Govt. In respect of cross subsidies, the Commission has always endeavored to reduce the cross subsidy as provided in the Tariff Policy. Issue No.2: PSPCL and PSTCL were constituted in 4/2010 as successor companies to PSEB and since then Transmission losses were being assumed as 2.5% on notional basis. PSTCL has now claimed Transmission Losses as 2.86% in Table 3 of its True Up for the year 2018-19 against 2.5% in the TO. Further, as per RE 2019-20, the average Transmission losses for H1 (actual for 5 months) work out to as 2.30% and for the total year 2018-19 as 3.0%. For MYT period 2020-21 to 2022-23, the Projections are given as 3%. In the MYT ARR submitted in 2016, PSTCL had projected Transmission Loss trajectory as 2.8% for 2017-18, 2.6% for 2018-19 and 2.5% for 2019-20. Against this, in the TO 2017-18, PSERC approved the trajectory as 2.5% for 2017-18, 2.4% for 2018-19 and 2.3% for 2019-20. However, due to non-finalization of boundary metering, the Transmission Losses are being provided notionally as 2.5% in TO 2017-18 and 2019-20. Instead of reducing the Transmission Loss and coming out with a trajectory for MYT period 2020-21 to 2022-23, PSTCL has proposed fixed loss level of 3% in spite of heavy capital investment proposed for MYT period. This needs to be looked into critically by the Commission. The losses claimed by PSTCL are higher than the trajectory given by PSERC in the TO. When PSTCL is being allowed the Capital Investment as per its demand, the trajectory agreed to needs to be followed and the losses be restricted to the approved trajectory only. Accordingly, the Energy Balance of PSPCL needs to be trued up for 2018-19 and RE for 2019-20 as per the approved trajectory of Transmission & Distribution Losses. Transmission Losses and Distribution Losses Trajectory need to be fixed separately for PSPCL and PSTCL for the next MYT period. It is submitted that the Commission in the Order of the Capital Investment Plan and Business Plan has approved separate transmission losses and Distribution losses for PSPCL and PSTCL respectively. PSPCL’s Reply: PSPCL has been able to reduce the T&D Losses from 16.34% in FY 2017-18 to 14.17% in FY 2018-19. The Commission has been allowing separate Transmission and Distribution losses in its Tariff Orders. Commission’s View: Refer to the para No. 2.3 and 3.3 of this Tariff Order and para No. 2.3 & 3.3 of PSTCL Tariff Order for FY 2020-21 regarding Transmission & Distribution Losses. Issue No.3: Interest on Short Term Loans for Working capital The PSPCL has been admitting to raise short term loans to meet the revenue shortfall arising out of disallowances of ARR components, non-receipt of subsidy from the Government and delayed payments from consumers etc. It is submitted that interest on delayed receipt of subsidy is being
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loaded to the State Govt. while determining the subsidy amount in the tariff orders. Further, PSERC is allowing the carrying cost of difference in revenue and ARR amount including delay in recovery of revenue from consumers. For late payments by consumers, PSPCL is getting Late Payment Surcharge. Therefore, WC interest should be allowed on normative basis and after deducting the Advance Consumption Deposit (Security) parked with PSPCL as per Regulations and practice being followed by the Commission so far. We also request that on the same lines, GPF fund parked with PSPCL by employees (Rs 1363.80 Cr ending 31.3.2018 and Rs 1129.05 Cr ending 31.3.19 as per Format 16 and being used by PSPCL to meet the working capital be also reduced from normative WC and interest on WC be reduced and only thereafter interest on GPF be allowed. Alternatively, PSPCL be asked to bear the interest on GPF amount from its internal accruals and claim by PSPCL in ARR need to be rejected. PSPCL’s Reply: PSPCL avails the working capital loans to meet with its working capital requirement due to non-receipt of Government dues, non-receipt of timely subsidy from GOP and due to cash losses of PSPCL.PSPCL has been claiming interest charges on the basis of actual interest paid against the loans availed by PSPCL, whereas PSERC allows the same on normative basis. So far as ACD is concerned, it is mentioned that PSERC has already deducting the ACD while calculating the working capital requirement. As such the interest burden of excess working capital loans is being borne by PSPCL and is not being passed on to the consumers. Moreover, after unbundling of PSEB, GPF Trust has been established and GPF subscription of employees is being transferred to Trust by PSPCL on monthly basis. PSPCL is making monthly repayments towards its GPF liability which has been parked to PSPCL at the time of unbundling of PSEB. Further, It is also submitted that As per regulation 41(a) of Provident Fund Regulation 1960, G.P Fund balances, after deducting final payments, permanent and temporary advances as admissible under these Regulations will be available for use by the Board in meeting its Capital Expenditure under the Plan. As such, the objection regarding reduction of GPF Balance for calculation of normative working capital and interest thereon is not justified. Commission’s View: Interest on working capital is allowed in line with PSERC MYT Regulations after prudence check on normative basis. Issue No.4: Return on Equity The Commission has approved 15.5% return on equity for 2012-13 to 2015-16 purportedly as per PSERC Regulations as per the FRP approved by GOP increasing the cost of assets by their revaluation and merging the Consumer Contribution, Subsidies and Grants with GOP equity leading to increase in the equity share capital of PSPCL from 2617.61 Cr to 6081.43 Cr which has led to increase of ROE from 405.73 Cr to 942.62 Cr i.e. an increase of 232% in both the figures without any fresh investment or infusion of cash by GOP or PSPCL. This matter was challenged in APTEL and it has already directed PSERC to reconsider the issue vide judgment Dated 17-12-14 in Appeal No 168 and 142 of 2013. Accordingly, we request the Commission to re determine ROE for all the years w.e.f. 2011-12 onwards and adjust the same in RE 2019-20 along with carrying cost to provide relief to consumers.‖ PSPCL’s Reply: The Government of Punjab will be converting the UDAY loans of Rs.15,628 Crore into equity. As per PSERC MYT Regulations, PSPCL is entitled to return on equity of 15.50% on the equity amount. Commission’s view: Return on Equity is determined by the Commission in-line with PSERC MYT Regulations after prudence check. Issue No. 5: Comments on True-Up of 2018-19 Issue No.5 (1) PSPCL has shown the Total Energy Requirement at Punjab Periphery as 57804.90 MU. However, the actual Energy Input as 58824.90 MU as per Sr. No 1 of Table No 3 titled Actual Transmission Loss for 2018-19. The energy input at Punjab Periphery is different as per the ARRs of PSPCL and PSTCL which need to be reconciled. PSPCL’s Reply: It is submitted that 58824.90 MU‘s is the energy injected in PSTCL substations during FY18-19. While reconciliation of output energy of PSTCL with input energy of PSPCL, net energy flow (i.e. export – import) through T-D PSTCL network is taken into account.
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Commission’s view: The objector may note the response of PSPCL. Issue No.5 (2) PSPCL has surrendered 80.73 MUs under UI and has also paid 73.08 Cr to the UI pool account which is indicative of mismanagement and inefficiency. This amount should be disallowed. PSPCL’s Reply: PSPCL never intends to purchase of power through UI by overdrawing and sale power by under drawing through UI. Over drawl & under drawl are part of system, because Punjab being a heavy power consuming State where load variations are frequent & caused by a no. of reasons such as day & night, crops season, winter & summer – domestic load variations. Most of them are dependent on weather. UI cost indicates Net cost of under drawn & over drawn energy. During load crash situations, normally frequency is higher and UI rate is lower, so under force majeure conditions power in grid is injected at very lower rate and during normal periods when energy is drawn from grid even at normal rates, net amount comes out to be irrational. In spite of such multifarious power system, by putting best efforts PSPCL has managed to keep net UI energy to be very negligible in comparison to total power exchanged by PSPCL for state of Punjab as a whole. Commission’s view: Refer to Para 2.9 (i) of this Tariff Order. Issue No.5 (3) Late Payment Surcharge and TDS of Rs 47.48 Cr has been claimed at Sr. No 83 which needs to be disallowed as PSPCL is retaining Early Payment incentive and TDS is adjustable against overall liability of I Tax. PSPCL’s Reply: The late Payment Surcharge and TDS have been claimed by PSPCL as per the PSERC MYT Regulations. Commission’s view: Refer to Para 2.9 (ii) of this Tariff Order. Issue No.5 (4): Reactive Energy Charges of Rs 1.79 Cr have been paid to RE pool by PSPCL. The reactive energy is imported by PSPCL during Paddy season only and is due to the Heavy Agriculture load coming on the system. This needs to be recovered from agriculture sector by appropriately increasing their tariff. The Industry is maintaining the PF almost unity throughout the year and it rather generates MVARH by installing and maintaining costly equipment at its end and the Industry should not be penalized for this. PSPCL’s Reply: During summer season demand of all the sectors goes up i.e. Domestic, Industrial & agriculture. & therefore, claim of the objector regarding Short Term Purchase only for agriculture sector is not agreeable. Moreover, rate of power purchased on short term basis is well below the rate approved by the Commission, (which is already including all the charges mentioned by the objector). Commission’s view: The Commission agrees with the reply of PSPCL. Issue No.5 (5): GOP subsidy for agriculture was worked out as Rs 5874 Cr for 11227 MUs for 2018-19 which gives sale rate of Rs 5.23/unit. However, in Table No 4 of the ARR, the consumption for Agriculture is indicated as 11187.39 MUs which gives sale rate of Rs 5.25/unit. However, PSERC approved sale rate is Rs 5.16/unit plus FCA of 12 paisa per unit for 6 months only. Further in Form D-24A of the ARR, units sold to agriculture have been shown as 11228.83 MUs with revenue of 5755.07 Cr. Such wide difference of consumption and revenue in different formats is not understandable. It shows that the ARR has been prepared casually and to confuse the stakeholders. PSPCL’s Reply: AP sales are to be considered as 11,187.39 MU. The difference in the AP consumption is due to a typographical error. Commission’s view: The Commission approves the sales quantum for AP category after detailed prudence check and validation. Refer para 2.2.2 of this Tariff Order.
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Issue No.5 (6): GOP subsidy for LS consumers was worked out as Rs 1204.94 Cr for 13187.05 MUs (Rs 0.914/unit) for 2018-19 in the TO. However, in Table No 54 of the ARR 2019-20, the figures were Rs 1310.01 Cr and 14221 MUs (Rs 0.921/unit). Now, in Form D11 of the ARR, the subsidy for 14319 MUs has been stated as Rs 1141 Cr with which the per unit rate works out to 0.79/unit. The difference of per unit rate over the years is not understandable. PSPCL’s Reply: The Objector is comparing the subsidy in Tariff Order for FY 2018-19, Tariff Order for FY 2019-20 and the subsidy of Truing up for FY 2018-19 which is not correct. Commission’s view: The actual subsidy received from Govt. of Punjab for various categories is considered as per the audited financial statements when the true up takes place. Issue No.5 (7): The Form D11 indicates the total subsidy due from GOP as 8757 Cr against which GOP has paid Re 9036 Cr i.e. PSPCL has received excess subsidy of Rs 279 Cr. However, the form indicates that Rs 280 Cr is still to be paid by GOP. Further, in Table 27 of ARR, the subsidy received from GOP has been shown as 8635.94 Cr which needs to be reconciled. PSPCL’s Reply: The format D 11 in which the subsidy for the year 2018-19 was shown as 8756.91 crore and in the foot note no.2, it was explained that after adjustment of True up of FY 2017-18, the actual subsidy booked for FY 2018-19 was Rs.8635.93 Crore. Also, in this format, the excess subsidy received was shown of 279.51 Crore. Commission’s view: Amount of subsidy changes as per the true up. Issue No.5 (8): The energy sale to Agriculture shown as 11187.45 MUs in Table 4 need to be revised after taking 30% consumption of Kandi feeders as per the methodology approved by the commission so far. The arguments put forward on the basis of LDHF formula is an afterthought put forward for the first time since the adoption of pumped energy methodology and needs to be rejected as it shows wide variation of consumption pattern varying from 35% to 56% and cannot be relied up on. Further, PSPCL has been directed to segregate the load of mixed feeders but no progress is being reported. PSPCL cannot take benefit of its own wrong. It is also requested that methodology of calculating the AP consumption of mixed feeders based on connected load as approved by the Commission be incorporated in the MYT regulations so that the arguments put forward by PSPCL are stopped forthwith. PSPCL’s Reply: The data has been submitted as per existing methodology adopted by the commission for estimation of energy for different categories of consumers and is not an afterthought as claimed by the objector. The variation in consumption pattern is due to different loading conditions and mostly dependent on the water table depth and the type of cropping in that area. From almost 6000 AP feeders only about 319 Feeders have mixed load i.e. AP and non-AP (DS & NRS). Due to various technical and other constraints PSPCL was unable to segregate supply of AP consumers on these feeders. Already under the DDU scheme, PSPCL is making efforts to segregate AP supply wherever possible and installing meters on AP consumers. But due to resistance by various kissan unions and consumers, the work has been delayed. Though the work has been resumed and is expected to be completed by November 2020, it has been prayed before the commission to allow for a more reasonable methodology of estimating AP consumption on these feeders, so that PSPCL is not being denied billing on AP energy being utilized by the AP consumers on these kandi feeders. PSPCL has submitted data regarding the same and the petition is pending for decision before the Commission. Commission’s view: Refer para 2.2.2 of this Tariff Order. Issue No.5 (9): In APR, power purchase of 45841 MUs was approved at delivered cost of 19374 Cr at Punjab Periphery which works out to an average rate of Rs 4.23 per unit. However, the actual volume in true up has been indicated as 47007 MUs at a cost of 20547 Cr i.e. at an average rate of Rs 4.37 per unit. Thus, PSPCL has not been able to follow merit order dispatch and additional expenditure needs to be disallowed.
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PSPCL’s Reply: In APR, PSPCL submitted power purchase of 48321.25 MUs at the cost of Rs. 20303.69 Cr. and the average rate towards the same comes out to be Rs. 4.20 per unit. The power purchase data submitted by PSPCL was on actual basis for April‘18 to Sept‘18 and projected (on the basis of Sept‘18 rates) for the period from Oct‘18 to Mar‘19. However, the power purchase of 45841 MUs was approved at cost of Rs. 19374 Cr. and the average rate towards the same comes out to be Rs. 4.23 per unit. Further, in true up, PSPCL has submitted power purchase of 47007 MUs at the cost of 20547.36 Rs. Cr. and the average rate towards the same comes out to be Rs. 4.37 per unit which is on actual basis. Hence, PSPCL is following merit order in letter and spirit. Commission’s view: The power purchase cost is allowed after prudence check. Refer to para 2.9 of this Tariff Order. Issue No.5 (10): Impairment Loss of Rs 644.33 Cr has already been booked by PSPCL in its accounts ending 31.3.2018 (Already trued up by PSERC) as per Note No 37 of Annual Financial Statement 2018-19. Therefore, the sale value of retired assets of GNDTP and GGSTP be adjusted in the year in which this accrues. Moreover, PSPCL be asked to give the status of disposal of retired assets through quarterly reports so that consumers are given relief. PSPCL’s Reply: It is intimated that assets & work-in-progress of GNDTP Bathinda and SYL of Rs. 644.33 impaired as per requirement of Ind AS 36 issued by the MCA under The Companies Act, 2013 not yet allowed by PSERC in the tariff. So, for as the sale value of retired assets be adjusted in which year in which this accrues is concerned, it is submitted that the same will be accounted for, as per Ind AS 105, in the year in which assets are sold. It is again requested that impairment loss should be allowed in the review. With regard to the status of retired assets it is submitted that there is a proposal to convert one unit of GNDTP into 1 X 60 MW Biomass plant. The proposed conversion to Biomass Unit is technically, commercially as well as environmentally feasible. The Board of PSPCL cleared the proposal after detailed deliberations and after considering all these aspects. Before submitting the proposal to board of PSPCL, each and every technical detail was discussed with the experts from Denmark who are into this field and are manufacturers of this technology since many years. Further, the proposal is still pending with the Govt. of Punjab for approval and shall be put up to PSERC for approval after that with all the relevant documentation. Regarding the proposed Solar plant, it is mentioned that the GOP has decided that the current proposal to install the solar plant in view of the vacant land may be postponed till decision is made for the optimal utilization of vacant land Commission’s view: Refer para 2.15 of this Tariff Order. Issue No.5 (11): PSPCL has stated that they have claimed interest on actual amount of loans for working capital which is again wrong as consumer is bound to bear interest on Working capital as per Normative and Regulations are clear on the same. Action to consider Late Payment Surcharge as Non-Tariff Income is as per Regulations and as per previous tariff orders. PSPCL’s Reply: PSPCL has claimed the interest on working capital on actual basis as the working capital loans have been taken to fund its financials. It is requested to the Commission to allow the actual interest on working capital. Commission’s View: Interest on working capital is allowed in line with PSERC MYT Regulations after prudence check on normative basis. Issue No.5 (12): PSPCL has claimed interest on subsidy delayed by GOP through reduction from Non-Tariff Income. It is submitted that GOP commits the payment of subsidy in advance and interest for delay is also to be borne by GOP. However, PSPCL through such manipulation is trying to recover the interest from consumers which is not supported by Regulations and is illegal. Thus, the proposal of PSPCL needs to be rejected and it should be asked to explain as to why they have made such a proposal. PSPCL needs to pass on all the rebates and GBI received for solar plants etc. to the consumers by treating 100% of the same as Non Tariff Income. However, PSPCL has not considered the same in non tariff
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income and instead has further retained 50% of the same through reduction. PSPCL’s Reply: PSPCL has claimed the Non-Tariff Income as per PSERC MYT Regulations. Commission’s view: Non-tariff income is allowed as per applicable MYT Regulations after prudence check. Issue No.6: Comments on RE 2019-2020 Issue No.6 (1): The surrender of power needs to be reviewed / checked every month in view of changing scenario of coal cost due to allotment of coal mines through bidding process, variation in imported coal prices and increasing gas prices. PSPCL’s Reply: PSPCL already has a practice to review variable costs of projects on monthly basis. Commission’s view: The objector may note the response of PSPCL. Issue No.6 (2): In table 31, the projected sales for Commercial, Small Power, Medium Supply and Street Lighting categories have been reduced drastically whereas it should be more than H1. The length of night hours is more in H2 and the Ginning and Rice Sheller seasonal industry operate during H2 and thus the consumption should be more in H2. PSPCL’s Reply: The projected sales for Commercial, Small Power, Medium Supply and Street Lighting has been calculated as per the CAGR for the last three years and after considering the escalation in each category. Commission’s view: The objector may note the response of PSPCL. Issue No.6 (3) Pumped Energy in Kandi Area mixed feeders needs to be reviewed based on PSERC adopted methodology till the feeders are segregated by PSPCL. PSPCL’s Reply: The pumped energy in Kandi area mixed feeders has been submitted as per the LDHF formula as specified in the PSERC Supply Code Regulations. Commission’s view: Refer para 2.2.2 of this Tariff Order. Issue No.6 (4) PSPCL has projected the Transmission and Distribution losses as 14%. Taking into consideration the proposed 3% losses for transmission proposed by PSTCL ARR, the figure needs to be reviewed. PSPCL’s Reply: The query has been addressed to the Commission. Commission’s view: Refer para 3.3 of this Tariff Order and para No. 3.3 of PSTCL Tariff Order for FY 2020-21. Issue No.6 (5) PSPCL has projected surrender of 106.70 MUs of energy under UI and has also paid 29.14 Cr to UI pool account. This needs to be disallowed as PSPCL has failed to efficiently operate the system. PSPCL’s Reply: Refer PSPCL‘s reply is issue No. 5(2) Commission’s view: Refer para 3.9 of this Tariff Order. Issue No.6 (6) PSPCL has proposed Rs 135 Cr. towards banking open access charges for 463.11 MUs of banked energy which works out to Rs 2.92/unit of energy. Similarly rate for 2018-19 works out to Rs 3.27/unit. Thus, viability to continue with banking needs to be checked under such high liability of open access as well as banking charges payable for banking transactions. PSPCL’s Reply: Open Access charges are paid for whole quantum of export import banking transactions, not only on
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net banking. During 2018-2019, only Net banking has been compared with OA charges paid, while it needs to be understood in a way that during year 2018-19, 5008.81 MUs power exported by PSPCL and 4603.16 MUs power imported during paddy season. The open access charges were paid on total power transacted 9611.97MUs not for net power transacted. Similarly, during year 2019-20, 2871.64 MUs power exported by PSPCL and 5184.50 MUs power imported during paddy season. The open access charges were paid on total power transacted 8056.14 MUs not for net power transacted. Commission’s view: The objector may note the response of PSPCL. Issue No.6 (7) PSPCL has indicated net banking of (-) 405.64 MUs in 2018-19 and (-) 463.11 MUs in 2019-20 totaling 868.75 MUs to be received from the other states. However, in 2020-21 only 556.13 MUs have been shown as receipt under banking and Zero banking in 2021-22 and 2022-23, indicating loss of 312.62 MUs not accounted for which needs to be checked into. PSPCL’s Reply: Banking shown for 2020-21, 2021-22 & 2022-23 are part of projections will be settled on actual basis as will be decided time to time depending every season real time demand / availability gap to meet peak paddy demand & utilize surplus in winters. This proved to be very fruitful to PSPCL during recent paddy seasons. As PSPCL was able to have sufficient power arrangements and it did not require to purchase power on short term basis. Commission’s view: The objector may note the response of PSPCL. Issue No.6 (8) PSERC had approved power purchase for 2019-20 @ Rs 4.50 per unit as per Table 3.8(A) of TO 2019-20. However, the RE now submitted indicate in Table 42 the power purchase cost as Rs 4.75/unit. Thus, PSPCL is unable to control the expenditure and incurring costs more than approved. PSPCL’s Reply: PSPCL submitted power purchase of 48001.73MUs at the cost of Rs. 21389.43 Cr. for FY 2019-20 in ARR 2020-21 and the average rate towards the same comes out to be Rs. 4.46 per unit. However, the power purchase approved for FY 2019-20 in TO 2019-20 was 47120.09 MUs at cost of Rs. 20834.98 Cr. and the average rate towards the same comes out to be Rs. 4.42 per unit. The power purchase data submitted by PSPCL for FY 2019-20 in ARR 2020-21 was on actual basis for April‘19 to Sept‘19 and projected (on the basis of Sept‘19 rates) for the period from Oct‘19 to Mar‘20.Further, the power purchase data submitted by PSPCL in ARR 2019-20 for FY 2019-20 was projected on the basis Sept‘18 rates. Commission’s view: The objector may note the response of PSPCL. Further, the Commission approves the power purchase after prudence check as per applicable MYT Regulations. Issue No.6 (9) In capital expenditure, PSPCL has claimed expenditure for creating new assets and has shown the capitalization of the WIP during the year. However, the assets to be retired during the year and recovery of cost of retired asset need to be accounted for on accrual/notional basis and Capital Investment Plan expenditure need to be reduced to that extent. PSPCL’s Reply: It is intimated that as per accounting policy 2.12 of Company, the value of retired assets is withdrawn from the gross block as well as accumulated depreciation. At the time of sale of such assets the profit/loss on the sale proceeds is accounted for in the accounts. Commission’s view: The Commission approves the addition of GFA in-line with PSERC MYT Regulations after prudence check. Issue No.6 (10) Interest on Loans be allowed after disallowing the excess loans taken to meet the excess expenditure and Interest on WC loans be allowed on WC calculated on normative basis instead of actual basis as per MYT Regulations. PSPCL’s Reply: PSPCL has claimed the interest on working capital on actual basis as the working capital loans have
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been taken to fund its financials. It is requested to the Commission to allow the actual interest on working capital. Commission’s View: Interest on working capital is allowed in line with PSERC MYT Regulations after prudence check on normative basis. Issue No.6 (11) Regarding ROE, refer to issue No. 4 above. Issue No.6 (12) An amount of Rs 30 Cr was provided to PSPCL for DSM fund and the same amount has been asked for again in RE without disclosing the actual expenditure in H1 of 2019-20. The provision may be reviewed and actual expenditure incurred so far and likely expenditure feasible in the remaining period be allowed. PSPCL’s Reply: The amount of Rs.30 Crore has been claimed as allowed by the Commission in the ARR for FY 2019-20. Commission’s view: The amount allowed on DSM shall be trued up based on actuals during the True-up of FY 2019-20. Issue No.6 (13) Regarding Non-tariff income, comments at issue No. 5 (12) above may be referred for 2019-20 also. Issue No. 7: Comments on ARR for MYT Period 2020-21 to 2022-23 Issue No. 7 (1) Para 4.2 states that RSD capacity is 600 MW but PSPCL allocation is 452.40 MW. However, PSPCL is indicating only part sale to J&K and HP out of the balance 147.60 MW capacity which is less than their entitlement with the result that PSPCL is bearing the fixed costs for the capacity not utilized by J&K and HP. Thus, in turn, this is being passed on to the consumers. Consumers are at the receiving end as PSPCL is not able to recover fixed charges where it can be legally passed on and is paying fixed charges to IPPs of Punjab and cannot get out of liability. PSPCL’s Reply: PSPCL has not yet started supplying the J&K share of power from RSD as there are technical constraints on the J&K side for receiving power. However, presently RSD is being run on full capacity and PSPCL is utilizing the available power from RSD. Commission’s view: The objector may note the response of PSPCL. Issue No. 7 (2) GNDTP Bathinda a) We strongly object to taking up the GNDTP Biomass Project. Before approving the proposal of PSPCL, PSPCL should submit the demand supply projections and establish as to in which year it is going to consume the total contracted capacity available as on date and how the mismatch between Paddy period (Demand 13000 MW) and winter period (Demand 4000 MW) will be reduced with the proposed and / or any other new power plants. Also what is the generation cost of the power plants at present prices and how the generation cost will compare with the power available from other sources. b) PSPCL has claimed impairment loss for all the four units of GNDTP Bathinda last year and these are being shown in the Audited statements. However, now PSPCL has indicated that they propose to convert some Bathinda units for biomass generation. Will PSPCL reverse the impairment loss in the event proposal is approved to pass on the relief to the consumers. Further, PSPCL failed to operate Jalkheri project and consumers had to bear the cost of idle capacity standing in the books of PSPCL and it is still to be made operational. PSERC need to approve the proposal only after critically examining the same other wise the present officers will retire and consumers will have to bear the adventurism of PSPCL in the shape of higher tariff. c) PSPCL has not come out with its proposal of 100 MW solar plant at ash dyke site of GNDTP Bathinda so far for approval of PSERC. PSPCL’s Reply: It is pertinent to mention that the proposal is to convert only one unit of GNDTP into 1 X 60 MW Biomass plant. The proposed conversion to Biomass Unit is technically, commercially as well as environmentally feasible. BODs of PSPCL cleared the proposal after detailed deliberations and after considering all these aspects. Before submitting the proposal to BODs of PSPCL, each and every
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technical detail was discussed with the experts from Denmark who are into this field and are manufacturers of this technology since many years. Further, the proposal is still pending with the Govt. of Punjab for approval and shall be put up to PSERC for approval after that with all the relevant documentation. Impairment cost of GNDTP has been booked as per the accounting standards issued by the Accounting Regulatory bodies. Reversal of impairment cost shall also be done, if realized value is more than the impaired value, as per the prevalent accounting standards. Regarding the proposed Solar plant, it is mentioned that the GOP has decided that the current proposal to install the solar plant in view of the vacant land may be postponed till decision is made for the optimal utilization of vacant land. Commission’s view: The Commission has not included the biomass plant and solar plant at GNDTP Bathinda in its approval in Order in the Petition No. 18 of 2019. Refer para 2.15 of Tariff Order regarding impairment cost of GNDTP.
Issue No. 7 (3) PSPCL has also not informed about the disposal of two units of GGSSTP Ropar. PSPCL projections for GGSSTP Ropar are extracted as under: -
The above figures show that inspite of having retired 2 units, the expenditure is being booked which needs to be disallowed. Assets of two units be sold immediately and the sale proceeds of 2 units of Ropar and 4 units of Bathinda be used to repay the capital loans so that consumer get some relief. As PSPCL is delaying the disposal of assets, PSERC may start recovery of sale proceeds on notional basis say @ Rs 250 Cr per year till disposal of the assets. PSPCL’s Reply: The process for disposal of 2 units of GGSSTP, Ropar which have been retired w.e.f 01.01.2018 by the decision of Punjab Govt. is already under process. Work Order has been issued for assessing the saleable value of the Units. Meanwhile, for preservation of boiler & for condition monitoring of the assets of the retired Units, operation & supervision by the Operation & Maintenance Staff is required at regular intervals of time. The only expenditure which is presently booked in respect of Units 1 &2 is on account of use of chemicals for preservation of their boilers, which is only a meager amount. Commission’s view: Impact of expenditure on assets not in use will be considered in line with relevant regulations of PSERC MYT Regulations. Issue No. 7 (4) PSPCL has taken actual performance parameters of its own thermal plants higher than the normative parameters and has worked out the ARR accordingly. We request that parameters as per CERC Tariff regulations 2019 or actual whichever is lower, be allowed as per the practice being followed here to fore as these are controllable items. PSPCL’s Reply: In the current & future power scenario of Punjab Units of GGSSTP, Ropar are run only at partial load & it is not possible to achieve optimum performance parameters as same can be achieved only if Units are run at full load., as such submission of performance parameters higher than normative parameters by PSPCL is fully justified. It is further submitted in order to achieve performance Parameters at partial loads R &M activities which require huge Capital Investment will have to be taken on Units of GGSSTP, Ropar which will only increase the cost of Power & ultimately this increase in cost will have to be passed on the consumers which in current power scenario of Punjab will be detrimental to the consumers. However, PSERC is allowing costs as per Normative basis only. Commission’s view: Normative parameters have been considered wherever applicable. Refer to para 4.7 of this Tariff Order
Year 2017-18 (TU) 2018-19 2019-20 2020-21
Rs. Crore (Table No) of TO 19-20
Table 26 of MYT ARR
Table 53 of MYT ARR
Table 86 of MYT ARR
Employee cost 306.18 (2.19) 335.51 359.81 381.89
R&M+A&G 61.05 (2.26) 54.04 34.13 49.06
Depreciation 19.46 (2.31) 34.84 35.14 35.72
ROE 70.16 (2.40) 83.95 83.95 86.41
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Issue No. 7 (5) The quantum and cost of surrendered power has been worked out by PSPCL in Format D2 of ARR as under:-
Year Surrendered Quantum Fixed charges
2018-19 8570.94 976.86
2019-20 11616,44 1374.93
2020-21 14499.23 1761.78
2021-22 13547.97 1626.90
2022-23 11533.65 1359.86
The above data shows that in spite of increase in consumption over the years, the quantum and cost of surrendered power is increasing up to the year 2020-21 as per PSPCL‘s own projections. The figures are further set to increase during the Tariff Order after PSERC scrutinizes the data and allows justified figures. The data shows that the surrendered quantum of power is increasing indicating that PSPCL is still executing new PPAs for the power in spite of being surplus since the year 2016-17. This action is against the interests of consumers as ultimately they have to pay for the misadventure of PSPCL. PSERC is requested to check all the PPAs where the power is yet to flow and direct PSPCL to cancel all such PPAs where the power flow is yet to start. Further, it should also be directed not to take up any own capacity addition or contract any additional power until it is proved by PSPCL that the additional capacity will not increase the idle capacity. PSPCL’s Reply: Surrendered quantum is showing decreasing trend in upcoming years. PSPCL has not signed any new PPA. Further, the petition regarding approval of long term PPAs signed by PSPCL has already been submitted by PSPCL before PSERC. Commission’s view: The objector may note the response of PSPCL. Issue No. 7 (6) Regarding the UDAY Loans which are appearing as GOP loans in the books of PSPCL had been given to improve the working of PSPCL. These loans are to be converted into grant or equity at the expiry of UDAY scheme. Presently GOP is paying interest of Rs 1307 cr per annum on these loans at around 8.36% of rate of interest which is repaid to GOP by PSPCL and is being further recovered from consumers thro‘ tariff. PSPCL has proposed in Para 4.6 to convert these loans amounting to Rs 15628.26 Cr into GOP equity on 31.3.20. As per Para 4.17, the ROE is payable @ 15.90 to 15.93% for the year 2020-21 to 2022-23 as per CERC norms. Thus, consumers will be loaded with the difference of Rate of Interest on loan and Rate of Return on Equity (15.93-8.36=) 7.57% i.e. Rs 1183 Cr per year. Thus, in the transaction, PSPCL will get additional Rs 1200 Cr approximately every year which it is not going to pay to GOP as ROE is not being paid to GOP till date, PSPCL being in loss. As such, the amount should either be converted into grants or be kept as Loans and consumers be saved from this manipulated source being created to earn extra money. PSPCL’s Reply: The Government of Punjab will be converting the UDAY loans of Rs.15,628 Crore into equity. As per PSERC MYT Regulations, PSPCL is entitled to return on equity of 15.50% on the equity amount. Commission’s view: Return on Equity is considered by the Commission in-line with PSERC MYT Regulations after prudence check. Issue No. 7 (7) PSERC has already defined the trajectory of Transmission and Distribution loss levels and the same should be followed without any relaxation as Capital Investment Plan are being approved as per projections of PSPCL and PSTCL. PSPCL’s Reply: All out efforts shall be made by PSPCL to achieve the trajectory of distribution losses approved by the Commission. Commission’s view: The objection is noted. Issue No. 7 (8) PSPCL has projected purchase of energy from Tapovan Vishnugad HEP, Parbati II, Singrauli III TPS
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and Vishnugad Pipal koti HEP in Para 4.12 of ARR. PSERC should check that PPAs of these projects were entered into after taking approval of GOP and PSERC. If PSPCL has entered into these PPAs without such approvals, the purchase needs to be disallowed as PSPCL is already heavily surplus since last so many years and such PPAs will further bound the consumers to pay for idle capacity due to inefficient planning of PSPCL. PSPCL’s Reply: PSPCL signed PPAs towards Tapovan Vishnugarh HEP on 29.12.2010, towards Parbati II HEP on 02.11.2002, for Singrauli III on 29.12.2010 and towards Vishnugarh Pipalkoti HEP on 05.06.2007. Further, the petition regarding approval of long term PPAs signed by PSPCL has already been submitted by PSPCL before PSERC. Commission’s View: The objector may note the response of PSPCL. Issue No. 7 (9) PSPCL has proposed financing of Capital Expenditure through normative 70% Debt and 30% as equity. PSPCL is not disclosing the source of funding of equity and evidently, equity is also proposed to be funded through taking loans since as per Balance Sheet, it has no investible funds (Reserves and Surplus) at its disposal and it is running into losses. By this innovation PSPCL is trying to fleece the consumers by taking loan @ 8% and charging 15.93% from consumers as ROE. PSERC should look into this matter and save the consumers from such exploitation. PSPCL’s Reply: PSPCL has been given profit in Regulatory accounts as Return on equity every year. PSPCL will be infusing the equity from the same profit. Commission’s view: ROE is allowed after prudence check as per applicable MYT Regulations. Issue No. 7 (10) Interest on Working capital for Generation and Distribution business be allowed on normative basis after deducting Consumer Security deposit and GPF from the WC so worked out and PSPCL‘s request for allowing WC interest on actual loans be not considered as per Regulations. PSPCL’s Reply: PSPCL in the MYT petition for FY 2020-21 to FY 2022-23 has claimed the interest on Working Capital on normative basis. Commission’s view: Interest on working capital is allowed in line with PSERC MYT Regulations after prudence check on normative basis. Issue No. 7 (11) : Other Suggestions i) Carry forward the rationalization of Electricity Tariff towards reduction of cross subsidy in a
phased manner. ii) Move towards fixing tariffs on the basis of realistic category wise cost of supply principle as early
as possible. iii) Reduce the electricity tariff of the subsidizing class of consumers as per the Act so that the GOP
is not unduly burdened for providing power to industry at Rs 5/- per unit. iv) PSPCL should be directed to
a. Amend its pattern of submitting ARR. Instead of submitting ARR based on actuals with the same bunch of excuses for over expenditure every time, it should limit its expenditure as per Approvals.
b. Explain as to why it is not able to recover revenues as per TO in-spite of increase in sales projected in TO.
v) The TOD peak charge need to be abolished as PSPCL is not purchasing any extra costly power during peak period and rather it is selling power during peak period. This will encourage the industry to operate for 24 hours instead of 20 hours presently.
vi) HT rebate was allowed as per the Directions of APTEL to align the Category wise tariff to voltage wise cost of supply. However, in tariff order 2019-20, the HT rebate during night hours has been withdrawn by including it in the cap on TOD night rebate whereas it was kept separate in TO 2018-19. This is in violation of APTEL order and HT rebate need to be restored round the clock throughout the year.
vii) More reforms and ease of doing business initiatives be introduced for the industrial consumers. viii) Continue with incentives for increase of consumption by consumers to reduce the idle
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capacity/surplus power. PHD Chamber requests the Commission to check all the data provided by PSPCL and give some relief to industry by readjusting Voltage Rebate and TOD Night Rebate / TOD Peak Charges and introducing Load Factor Rebate. This is also necessary so that the industry of Punjab remains competitive viz-a-viz neighboring States otherwise it will have no other alternative but continue shifting to other States. The Punjab industry is situated in a land locked area and has to face many hardships. We will also bring to your kind notice that the State Govt. is also charging 13% Electricity Duty in-addition to 5% Infrastructure Development Fee and 2% as Municipal Tax. Commission’s View: The suggestions have been noted. However, ED and other State levies/taxes are the prerogative of the State Govt. Objection No.12: Mandi Gobindgarh Induction Furnace Association Issue No.1: Timely issue of Tariff order for 2020-21 PSPCL has already filed the Petition on due date of 30.11.2019 and PSERC has issued notice for Public Comments. Public Hearings are scheduled between Jan 23thto Feb4
th2020 and PSPCL‘s Presentation is ready. Thus, the tariff order for the year 2020-21 can very easily be issued by 30
thMarch to be made applicable from 1.4.2020. We request the Commission to stick to the timelines
and issue the TO well in advance so that industry is aware of the costing of the products and do not suffer financially on this count. This will also spare the GOP of the complications of bearing the arrears. Further, if there is delay in issue of Tariff Order, consumer should not be made to suffer and TO be made effective prospectively. PSPCL’s Reply: The query has been addressed to the Commission. Commission’s View: The suggestion is noted. Issue No.2: Cross Subsidization Levels of Agriculture and Industry Issue No.2 (I) The National Tariff Policy stipulates to keep the average realization per unit from each category to the 20% (plus or minus) of combined average cost of supply (ACOS). APTEL has also given directions to PSERC in Appeal No 142 & 168 of 2013 between Mawana Sugars & Bansal Alloys Vs PSPCL and others in para 14 of the order to work out the cross subsidy on the basis of voltage wise category wise cost of supply (VCOS) and has also held that the cross subsidy of any category of consumers will not be increased from the level of last year. as under:-
“…….the cross subsidy with respect to voltage wise cost of supply is not increased. However, the tariffs for different categories have to be within + 20% of the overall average cost of supply as per the Tariff Policy …….‖ In compliance to the orders of APTEL, PSERC has determined the cross-subsidy levels for both the ACOS and VCOS in the TO 2017-18 and 2018-19. It is submitted that while working out the same in TO 2020-21, the tariff of the subsidized class of consumers i.e. agriculture sector and domestic consumers be managed suitably so that in the tariff order to be issued for 2020-21: a. Cross subsidy levels based on cost of supply remain equal to or are less than those of last
year. b. Cross Subsidy levels remain within +/-20% based on average cost of supply as here to fore. c. Back up calculations and assumptions taken in calculation of VCOS be included in the TO. Further, APTEL has also ordered that trajectory for gradual reduction of cross subsidies shall also be finalized by the SERCs in line with provisions of the Section 61 of the Act. In this regard, Judgment dated 9.1.2017 in Appeal No 134 of 2015 in Spentex Industries Limited Vs MPERC and others may be referred vide which Hon‘ble APTEL has made following observations:- ―26 (e)----------The State Commission is required to prepare a road-map for reduction of cross subsidies amongst the various categories of consumers. 27(c ). We would like to put a remark on this count that the State Commission while issuing the Retail Supply Tariff orders and avoiding tariff shock to consumers should also identify the road map for reduction of cross subsidy” Accordingly. the Commission is also requested to identify the road map for reduction of cross subsidies.
PSPCL’s Reply: The determination of cross subsidy is the prerogative of the Commission.
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Commission’s view: The objection is noted. The Commission has always endeavored to reduce the cross subsidy as provided in the Tariff Policy. Issue No.2 (II) PSPCL for the first time, has proposed tariff for 2020-21 in which PSPCL has proposed to increase the Tariff for Agriculture Sector from existing Rs 5.28/Kwh to Rs 7.26/Kwh i.e.an increase of Rs 1.98/Kwh and also totally eliminating the cross subsidy to agriculture, which seems to be impractical proposal. Similarly, while rate for Domestic Supply for load up to 2 KW is proposed to be reduced, category 2 to 7 KW is proposed to be merged with 7 KW to 50 KW which will impact the middle class most and would not be acceptable to them. PSPCL has also proposed to merge the upper slabs of NRS supply which will greatly affect marginal businessman. Proposed increase of tariff for industrial category is unacceptable as there is no scope to further increase the sale value of products and any increase will make the Punjab industry uncompetitive. Thus, the proposed tariff be kept unchanged so that common man may not be pressed to shift to net metering. PSPCL’s Reply: ARR is being prepared and submitted before the Commission as per the regulatory principles set by the Commission. The methodology adopted by PSPCL for truing up for FY 2018-19, RE for FY 2019-20 and MYT petition for FY 2020-21 to FY 2022-23 is very well elaborated in the Petition and is in line with the regulatory principles set by the Commission and PSERC MYT Regulations. Commission’s view: Refer to Tariff Order for detailed tariff schedule and rationale for the same. Issue No.2 (III) PSPCL has proposed to recover only 37250.76 Cr of the ARR of 43884.66 Cr through tariff increase and carry forward the balance 6633.90 Cr to next year as Regulatory Asset. PSERC is requested to check the ARR of the Licensee critically and reject the excess claims. We feel that with the proposed increase in the consumption, flow of low-cost wind power and retirement of 6 units of PSPCL/s own thermal plants, there should be no requirement of increase in tariff for 2020-21. PSPCL’s Reply: Please refer to the reply (ii) above. Commission’s view: Refer to Tariff Order for detailed tariff schedule and rationale for the same. Issue No. 2 (IV) Limit on consumption should be specified by the Commission for the categories of consumers which are to be cross subsidized. Once the consumption of these categories exceed their limit specified in the order, they should be charged at normal tariff rate and not at subsidized rate. Thus, if supply of additional power to Agriculture Sector is to be given due to draught conditions through additional costly spot purchase or imposing cuts on highest tariff categories like industry, it should not be at subsidized but normal tariff and subsidy due from GOP be worked out accordingly. PSPCL’s Reply: The query has been addressed to the Commission. Commission’s view: Subsidizing any consumer category is the prerogative of the State Government. Issue No. 2 (V) The cross-subsidy burden on LS consumers which had increasing trend till the year 2015-16 had been reversed thereafter but for the year 2018-19, the support from Industry has again increased. This is against the directions of the APTEL and the directions of APTEL be followed while issuing Tariff Order for 2020-21 and the cross subsidy for industry be eliminated. PSPCL’s Reply: The determination of Cross subsidy is the prerogative of the Commission. Commission’s View: The Commission has always endeavored to reduce the cross subsidy to the level of ± 20 % of the average cost of supply as provided in the Tariff Policy. Issue No.3: Return on Equity (A) The Commission has approved 15.5% return on equity for 2010-11 to 2017-18 purportedly as per
PSERC Regulations in line with the FRP of GOP through which the cost of assets of erstwhile PSEB were revaluated and the Consumer Contribution, Subsidies and Grants were merged with
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GOP equity leading to increase in the equity share capital of PSPCL from 2617.61 Crore to 6081.43 Crore which has led to increase of ROE from 405.73 Crore to 942.62 Crore i.e. an increase of 232% in both the figures without any fresh investment or infusion of cash by GOP or PSPCL. Similar is the case of PSTCL where the equity base has been increased from Rs 328.50 Cr to Rs 605.88 Cr as per FRP and ROE has been increased from Rs 45.99 Cr to Rs 93.91 Cr, an increase of 204%. The matter was appealed in APTEL and Hon‘ble Tribunal directed PSERC to reconsider the issue vide judgment Dated 17-12-14 in Appeal No 168 and 142 of 2013. As the PSPCL has filed Appeal in Supreme Court and the order of APTEL is under stay, we request the Commission to record our objection on the issue and the tariff orders from 2011-12 will be subject to review as per the orders of the Supreme court.
(B) PSPCL has proposed conversion of loans taken over by GOP under UDAY scheme amounting to Rs 15628.26 Cr into equity of GOP on 31.3.2019 and have claimed ROE of 15.90% on this amount during 2020-21 onwards. We are aware that loans under UDAY scheme was on the interest rate of about 8.4% whereas after conversion into equity, consumers will have to bear the ROE @ 15.90%. Further interest on loan was being recovered by PSPCL from consumers and being paid to the banks. However, ROE is being recovered from consumers and retained by PSPCL for adjustment against its losses due to inefficiencies and wrong planning. We strongly oppose the proposal of PSPCL to convert the UDAY loans into equity and request for adjustment of loans through grant of GOP as per terms of the UDAY scheme.
(C) PSPCL has also proposed to finance the Capital Investment through deemed loans of 70% and deemed equity of 30% i.e. PSPCL will take loan for 100% investment but finance equity out of loan taken at around 9% and claim ROE @ 15.93% on the same from consumers. This is nothing but cheating of the consumers as PSPCL does not have any Reserves and Surplus in its Balance Sheet to finance such equity nor there is any cash infusion from GOP towards equity. MYT regulations clearly provide that Debt equity ratio is to be taken as Equity is to be taken as 30% or actuals, whichever is low and further equity must be paid up i.e. there should be cash flow from GOP towards equity or contribution should be from Reserves and Surplus available in balance sheet. Thus, increase in equity need to be reflected in the balance sheet as well. Thus, even if PSPCL converts the loans into equity, PSERC is not bound to pay ROE on such amounts as it is nothing but unjust enrichment at the cost of consumers. Notwithstanding to the above and without prejudice to the above submissions, it is also submitted that PSPCL has increased equity simultaneously with the loan amount for claiming ROE. Whereas, interest on loan is admissible as IDC (Interest during construction period)but equity does not earn any ROE till commissioning of the project. Thus, ROE if at all it is to be granted, is to be granted only on capitalization of the assets.
PSPCL’s Reply: A) The query has been addressed to the Commission. B) Government of Punjab will be converting the UDAY loans of Rs.15,628 Crore into equity. As per PSERC MYT Regulations PSPCL is entitled to return on equity of 15.50% on the equity amount. C) PSPCL has claimed equity infusion of 30% as PSPCL has been given profits in regulatory account. PSPCL wishes to infuse the equity from the profits given in the Regulatory accounts. Commission’s View: A) The issue is pending with Hon‘ble Supreme Court. B) & C) Return on Equity is considered by the Commission in-line with PSERC MYT Regulations after prudence check.
Issue No.4: ARR and carrying cost of Revenue gap The gap in realization with current tariff and expenditure incurred by PSPCL as projected in ARR along with carrying cost is increasing every year. This is very abnormal and indicates total financial indiscipline in PSPCL. This clearly indicates that PSPCL is incurring expenditure at their will and leading towards debt trap in spite of relief available under UDAY scheme. PSPCL had projected Net Revenue Requirement of 32718.64 Cr in the ARR of 2017-18 with total revenue gap as 5576.21 Cr. The actual figures presented in ARR 2019-20 for true up were Rs 31127.53 Cr and 5524.53 Cr respectively whereas PSERC in the TO 2019-20, trued up the ARR of 2017-18 as 27232.40 Cr with Revenue gap of 881.23 Cr only. The ARR for 2018-19 presented the Net Revenue Requirement as 33562.12 Cr with total Revenue Gap of Rs 5339.33 Cr. The revised estimates presented in ARR 2019-20 were Rs. 33796.12 Cr and 10195.25 Cr respectively against which PSERC approved Rs 30251.12 Cr and worked out Revenue gap of only Rs 497.25 Cr. However, PSPCL has now presented the ARR for 2018-19 under True Up
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as Rs 33028 Cr and Revenue gap of Rs 3715.89 Cr. In the ARR 2019-20, the Net Revenue Requirement has been worked out as 34505.60 Cr and total revenue gap with carrying cost has been worked out as12118.55 Cr. PSERC in the Tariff Order 2019-20, approved ARR of 31835.10 Cr with Revenue gap of 569.72 Cr. In the Current ARR 2020-21, the RE of ARR for 2019-20 are given as 35371.34 Cr and Revenue gap of Rs 7728.26 cr. Now in present ARR, PSPCL has projected ARR for 2020-21 as Rs. 36156.38 Cr and previous years Revenue gap of 7728.26 Cr. Thus PSPCL requires revenue of Rs 43884.64 Cr whereas Revenue expected at current tariff works out to Rs 32704.97 Cr. Thus for full recovery of ARR, the tariff has to be increased by 21.37% across the board. indicating that for the PIU industry, present fixed charges of Rs 295 to be refixed as Rs 358 and Energy charge of Rs 6.19 to be refixed as Rs 7.51. With 30 Paisa Coal Washing Surcharge and 20% of ED+IDF+MT, the effective tariff would work out to above Rs 10.35 per unit for 2020-21. However, PSPCL has proposed to recover part of the revenue requirement i.e. 37250.76 Cr in the year 2020-21 (i.e. 14% increase in Tariff) and balance to be carried forward as Regulatory Assets to be recovered in future. Thus, PSPCL has proposed Fixed Charge as Rs 335 and Energy Charge as Rs 6.98. The solution presented by PSPCL to increase the tariff by such hefty amount in tariff (14%) will prove disastrous for the industry in Punjab. The ARR needs to be critically examined by the Commission. Any increase will have to be passed on to GOP which is already short of money. PCPCL should manage the increase in ARR from increase in sale of power and better utilization of its assets. Industry in Punjab cannot bear any increase in tariff and the tariff needs to be frozen for next five years. Further, in-spite of 2.17% increase in Tariff in 2018-19 and 1.78% in 2019-20 coupled with projected 11.8% increase in sales in 2020-21 over 2018-19, the gap still persists. It clearly indicates that there is something wrong in the operations of PSPCL. It is evident from the above that besides continuing with its inefficiencies, there seems to be a tendency on the part of PSPCL to inflate the figures of ARR to get higher tariff to cover up its continuing losses which need to be looked into by the Commission thoroughly otherwise the industry in Punjab will become totally uncompetitive with the industry of neighboring states and shall have to close down their factories. PSPCL’s reply: ARR is being prepared and submitted before the Commission as per the regulatory principles set by the Commission. The methodology adopted by PSPCL for truing up for FY 2018-19, RE for FY 2019-20 and MYT petition for FY 2020-21 to FY 2022-23 is very well elaborated in the Petition and is in line with the regulatory principles set by the Commission and PSERC MYT Regulations. Further, the determination of Tariff is the prerogative of the Commission. Commission’s View: The revenue gap is determined by the Commission keeping in view the PSERC Regulations.
Issue No.5: Excess claims PSPCL had filed Appeal No 106 of 2013 in APTEL which was decided vide order dated 16.12.2015. The decision was further considered by the Commission for compliance and order dated have been issued on 4.1.2016. In these orders contentions of the PSPCL on many issues relating to tariff Order 2013-14 were considered and Hon‘ble APTEL decided all the issues except one against PSPCL and upheld the orders of the Commission as per Tariff Order. With the coming into force of new MYT regulations, PSPCL has again gone to the Hon‘ble APTEL and has challenged all the disallowances in the Tariff orders. Thus, PSPCL is continuing its practice of incurring expenditure at will without caring for PSERC directions and Regulations and after the ARR is curtailed, wastes time and money seeking legal remedy on the already rejected contentions. This is proving disastrous for the consumers as expenditure on legal fees is increasing every year without corresponding benefit. PSERC need to disallow legal fees in such cases and not burden the consumers with such unsuccessful litigations. It is also pointed out that the expenditure already denied / methodology already rejected by the Commission in the previous tariff orders should not have been included/ reiterated in the ARR at all but the PSPCL is continuing the practice. PSPCL reiterated the rejected arguments for justification of inflated Agriculture Consumption, Thermal parameters, Late payment surcharge etc. Thus, PSPCL wants to have the best of all. In our view, there is no reason for admitting the same. PSPCL’s reply: PSPCL files an appeal before Hon‘ble APTEL as per Section 111 of the Electricity Act, 2003 only when it is aggrieved by Order of the Commission. Further, PSPCL challenges the PSERC Orders on issues which PSPCL believes are legitimate and an appeal can be filed before Hon‘ble APTEL.
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Commission’s View: The Commission determines the ARR in line with the PSERC Regulations after considering APTEL orders.
Issue No. 6: Subsidized AP tariff The absolute cost of power supplied to agriculture sector has been growing consistently at very high rate. Providing the power at the subsidized rate of Rs 5.28 per unit, which is far less than the actual cost of power (as high as Rs.7.18 per unit for 2019-20). PSPCL has not submitted the working of Voltage wise category wise cost of supply in the ARR but for the last year it was worked out by PSPCL as Rs. 9.61 as per ARR 2019-20. It may be pointed out that Induction furnace and Rolling mill industry (PIU Category) to which the objector belongs, consumes power extensively and the cost of power is more than 50% of the operating costs. The reason for prevailing high tariff for PIU industry is that they have to bear the cross subsidy for cheap power being supplied to agriculture. The Commission is requested to fix the quantum of subsidized power to be supplied to agriculture and quantum above that ceiling be charged at full rate so that cross subsidy is kept in manageable levels. PSPCL’s reply: The determination of cross subsidy is the prerogative of the Commission. Commission’s View: The Commission has always endeavored to reduce the cross subsidy to the level of ± 20 % of the average cost of supply as provided in the Tariff Policy. Issue No.7: Interest on Short Term Loans PSPCL had admitted in earlier ARRs that it has to raise short term working capital loans to meet the revenue shortfall arising out of various factors stated in the ARRs i.e. disallowances by the Commission (Reduction in fuel & power purchase cost due to T&D losses etc., employee cost, R&M cost, A&G expenses), Non/late receipt of subsidy due from the Government and delayed payments from consumers. However these arguments are missing in the current ARR. PSPCL had got converted 75% all the long and short term loans under UDAY and requested for treating all loans under UDAY as long term. This would have amounted to legitimizing of all disallowances made by PSERC in earlier Tariff Orders. Accordingly, PSERC rightly and correctly, worked out the short and long-term loans separately and treated short term loans as WC loans. Now PSPCL wants that PSERC should accept the total figure of UDAY loans for adjustment in current ARR of 2020-21 as UDAY is coming to end on 31.3.2020. The loans which were not accepted as long term loans prior to UDAY scheme should not be considered for adjustment. Similarly, all short term loans covered under UDA scheme should also not be considered as UDAY scheme was only for long term loans. Recognizing such loans as part of UDAY loans will amount to regularizing the loans and PSPCL may come out with demand of claims of Interest on such rejected loans. The mismatch due to expenditure made by PSPCL without approval of PSERC year after year should have been met through internal accruals and ROE being retained by PSPCL. Similarly, interest on the subsidy due but not received is already being loaded in the due amount of subsidy payable by GOP and recovered from the Government. PSPCL is getting late payment surcharge for delayed payments by consumers. As such all such claims of PSPCL are not acceptable. Further, PSPCL needs to be told in clear terms that it has to stick to the approved expenses in Tariff Orders and any expenditure made over and above will not be reflected and submitted for approval in the next ARR. PSPCL’s reply: The Ministry of Power, Government of India has notified UDAY scheme during 2015-16 for financial turnaround of Power Distribution Companies (DISCOMs) with an objective to improve the operational and financial efficiency of the State DISCOMs. Accordingly, PSPCL has signed the MOU on dated 04.03.2016 and as per the provisions of UDAY, GoP has issued the special bonds amounting to Rs. 15,628.26 crore during the year 2015-16 and 2016-17. The proceeds of these bonds were handed over to PSPCL as GOP loans. While issuing the tariff orders, the Commission allows interest only on long term loan converted into GOP loans under UDAY scheme and disallows the interest on working capital loans converted into GOP loans under UDAY scheme. PSPCL avails the working capital loans to meet with its working capital requirement due to non-receipt of Government dues, non-receipt of timely subsidy from GOP and due to cash losses of PSPCL.PSPCL is being claiming interest charges on the basis of actual interest paid against the loans availed by PSPCL, whereas PSERC allows the same on normative basis. So far as ACD is concerned, it is mentioned that PSERC has already deducting the ACD while calculating the working capital requirement. As such the interest burden of excess working capital loans is being borne by
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PSPCL and is not being passed on to the consumers. PSPCL raise Working Capital Loans for meeting its day to day expenditure towards purchase of power, fuel cost etc. By adopting UDAY Scheme, PSPCL can raise Working capital loans upto 25% of the previous year revenue. While submitting the ARR, PSPCL has made the provision of interest on Working capital loans by restricting its working capital loans upto 25% of previous year revenue. Commission’s View: Interest on short term loan for working capital is allowed in line with PSERC MYT Regulations after prudence check on normative basis. Issue No.8: Surplus power and capacity charge of idle capacity: The increase in expenses in ARR of PSPCL in recent years is due to power proposed to be surrendered on Merit order dispatch due to commissioning of new IPP stations of PSPCL. This saves the energy/variable charges but PSPCL has to bear the capacity/fixed charges for such non purchase of power. This position was predicted by PSERC and in this regard directive was given to PSPCL as early as in TO 2013-14 to review all the PPAs and surrender costly contracted capacity in view of commissioning of IPPs in the State. However, PSPCL has failed to surrender any contracted capacity and the directive was dropped in 2018-19 without any result. PSPCL is consistently coming out with and disclosing new capacities which it had contracted earlier but not disclosed to stake holders. Now PSPCL has stated that it will be getting power from projects like Tapovan Vishnugad, Vishnugad Pipalkoti, SingrauliIII and Parbati II in the MYT control period. It has also stated that Shahpurkandi Project and 60 MW biomass project at GNDTP Bhatinda will also be commissioned during the period. PSPCL had also proposed 100 MW solar plant on Ash Dyke area of GNDTP Bhatinda but the same has not been included in the projections. PSPCL has also worked out the power plant wise year wise quantum of power (MUs) and Fixed Charge liability for idle capacity in Form D2 of ARR. The liability varies as under:- a) Rs 976.86 Cr (Actual) in 2018-19 b) Rs 1374.93 Cr (RE) in 2019-20 c) Rs1761.78 Cr (Proj) in 2020-21 d) Rs 1626.90 Cr (Proj) in 2021-22 e) Rs1369.86 Cr (Proj) in 2022-23 As is evident, inspite of increase in yearly consumption, the idle capacity and liability increases up to 2020-21 and starts reducing thereafter provided that PSPCL does not have any other PPA which it has not disclosed so far. The liability will also increase depending on the capacities added through Solar Plants set up under Net Metering or as CPPs, Power plants coming up under NRSE Policy, Cogeneration power plants to be set up by industry etc as such generation will replace PSPCL power and surplus power will increase equal to their generation. It is not understandable as to how and why PSPCL acted to contract such huge capacities. Surplus capacity was envisaged by the Commission in 2013-14 when directive to review PPAs was given to PSPCL. It shows that all such PPAs were signed before 2013-14, there was no power flow for 7 to 8 years and still PSPCL is not able to cancel PPAs and is taking for granted the PSERC and Consumers and to be duty bound to pay and bear the capacity charges for such excess capacity. Industrial consumers cannot survive the competition from other states under such situation as the tariff is bound to be higher. As such to reduce the burden on the industrial consumers of idle capacity created by the wrong actions of GOP and PSPCL, PSERC may direct the GOP to share the fixed charges thro‘ Lump sum grant to PSPCL. PSPCL’s reply: Regarding review of long term PPAs signed by PSPCL with Centre Sector Generating Stations, it is intimated that the agreement can only be reviewed on mutually agreed terms and conditions. Also, a legal opinion regarding surrender of power share has been taken by PSPCL and the advocate Mr. M.G. Ramachandran opined that PSPCL cannot treat any agreement as terminated unless the Generating Company agrees to the same. Further, the matter regarding surrender of power from NTPC/NHPC Generating Stations has been reviewed by PSPCL & accordingly MoP, GoI has been requested to reallocate PSPCL share of power from Anta, Auriya, Dadri & APCPL jhajjar to some other needy States in India. Regarding payment of fixed charges against surrender of power, fixed charges have to be paid irrespective of the fact that weather PSPCL avails power from plant or not. So real time operation depending upon demand for matching availability does not depend on fix charges. Hence relating payment of fixed charges is not appropriate with surrender of power. Moreover, the matter regarding the opinion from AG Punjab towards the issue of payment of fixed charges to M/s NTPC even after the lapse of contract period is under process.
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PSPCL signed PPAs towards Tapovan Vishnugarh HEP on 29.12.2010, towards Parbati II HEP on 02.11.2002, for Singrauli III on 29.12.2010 and towards Vishnugarh Pipalkoti HEP on 05.06.2007. Further, the petition regarding approval of long term PPAs signed by PSPCL has already been submitted by PSPCL before PSERC. Commission’s View: The objector may note the response of PSPCL. Issue No.9: Employees expenses It is strange that, the claims made in the initial ARRs are highly inflated and actual in true up have come down drastically and even lower than those approved by the Commission. PSPCL also needs to explain as to how it was giving justifications for inflated figures in the ARRs. In view of the fact that now Audited Employee cost is being allowed in True Up as per APTEL orders, PSPCL should come out with realistic figures in ARR so that tariff determined by the Commission is somewhat realistic. The Commission had been allowing increase in employees cost on the basis of Wholesale Price Index as per Tariff Regulations which have been amended now to cover CPI also. Therefore, increase in employees cost on the basis of amended regulations may be allowed during MYT period. Recruitment of new employees and grant of any allowance need to be made by PSPCL keeping in view the provisions of the Tariff Order which should act as Budget for PSPCL which should not be exceeded at any cost. PSPCL’s reply: Employee expenses have been claimed by PSPCL as per the Regulations specified by the Commission and PSPCL has never claimed inflated employee expenses. The employee costs claimed in the ARR petition is on the basis of WPI index and CPI index. The index changes every year and hence the actual employee cost changes. Commission’s View: Employee cost is considered by the Commission as per the PSERC MYT Regulations. Issue No.10: Cost of supply / HT rebate In compliance to APTEL orders, PSPCL has carried out the study on Cost of Supply, which was a part of ARR 2013-14 and PSERC accepted methodology II of the study. While submitting the comments on cost of supply study, we had pointed out that the study is based on lot of assumptions which had to be taken at every step due to absence of one or other parameter required for the study and sample feeders taken are quite inadequate. Further, even the assumptions had been so taken that HT/EHT consumers were loaded with unjustified costs and made to share big burden of the ARR. The T&D losses for 220 and 132 KV consumers had been taken as 6.6% against 2.5% assumed by the commission in the tariff order. T&D losses for agriculture had been taken as 22% whereas these should have been more than 30% as it is well known that these consumers do not install Capacitors, use high wattage bulbs against CFLs permitted free with pump set, use non ISI motors and indulge in theft of power during paddy season. PSERC had accepted methodology II and had worked out Voltage wise and category wise Cost of supply for 2013-14 in TO 2013-14. Accordingly rebate for EHT consumers was reintroduced. The practice has been continuing and the rebate of 30/25 paisa is being continued till date. However the difference in cost of supply for 66 KV industrial consumers and 11 KV industrial consumers which was Rs 0.56/unit in 2013-14 had increased to 0.64/unit in 2019-20. PSPCL has not worked out the cost of supply for 2020-21 in ARR. Therefore, there is strong case of increasing the 66 KV voltage rebate. However, PSERC in the Tariff Order 2019-20 has provided a cap on the tariff chargeable during night period i.e. Normal Tariff minus HT Rebate minus TOD night rebate will not be lower than the cap and through this the HT rebate of LS consumers has virtually been withdrawn for 8 hours of night period for 8 months. HT rebate is granted on account of difference in Cost to serve for consumers connected at 11 KV and 66 KV and this difference in COS is on 24X7 basis. 66 KV consumers were requesting for increase in HT rebate but instead it has been partly disallowed. With GOP subsidy, now all LS consumers at 11 KV, 66 KV and 132/220 KV are paying same tariff during 8 hours X 8 months. This has been done in-spite of directions of the APTEL. We request the Commission to not to include HT rebate in the cap along with TOD night rebate as was granted by the Commission in the tariff Order 2018-19. In order to make the determination of cost of supply more realistic and reliable, it is requested that PSPCL be asked to firm up the data required for the study since lot of computerization/digitization has taken place and IT practices have been introduced under APDRP schemes in PSPCL/PSTCL. Further as per recent orders of APTEL in an appeal filed by the Objector, it has been ordered that Cross-Subsidy Levels be also worked out on the basis of Cost of supply and it should be ensured that these
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levels remain or are less than those of last year and should not exceed 20% limit. Further, voltage rebate be further enhanced to make it commensurate with the cost of supply. PSPCL’s reply: Determination of tariff, rebate or surcharge to any category is prerogative of the Commission as per Electricity Act, 2003 on the basis of data supplied by PSPCL in the ARR, keeping the interest of stakeholders in view. Regarding the matter of capping of Rs. 4.45 per unit and HT rebate, the Commission in its Order dated 13.09.19 in Review Petition No. 5 of 2019 filed by industrial consumers, has decided that concessional/ discounted tariff can be provided subject to certain limitations only, it was decided to limit the same to Rs. 4.45 per kVAh, being only the marginal cost to generate additional energy. Charging tariff below this cost would have resulted in uneconomical rate of supply which would have defeated the purpose of giving concessional tariff. Further, the cumulative effect of ToD rebate and Voltage rebates on the Energy Charges including reduced Charges for consumption exceeding threshold limit/ use of electricity exclusively during night hours at any time has been limited to the lowest Energy Charge of Rs. 4.45 per kVAh. This limitation comes into effect only in case they opt to consume power in excess of the threshold consumption (i.e. the consumption in excess of maximum annual consumption in any of the last two financial years) and/or exclusively during night hours. Commission’s View: The suggestion is noted.
Issue No.11: MOR for lower end consumers PSERC had introduced two part tariff system with effect from 1/4/2017 which was later shifted to 1/1/2018 due to the difficulties brought to the notice of the PSPCL, GOP and this Commission. One of the adverse impact of the two part tariff has been highlighted as exponential increase in per unit effective cost after considering the impact of fixed charges. Though, the fixed charges have been kept lower for low end consumers but per unit impact is still very high for Small and Medium Enterprises having CD above 100 KVA. The charges for the consumers falling in the category of 100 KVA – 1000 KVA under PIU category are Rs170/KVA/month and 593 paisa per unit. This works out to 24paise per KVAH for 100 % Utilization Factor but for a consumer running his factory for 4 hours per day for 20 days a month,, this works out to 213 paisa per unit and overall rate as 806paise/unit and with 30 paisa coal washing surcharge and 5 paisa FCA and 20% ED+IDF, the rate is 1009 paisa per unit. For some industries working on job order basis or which do not have regular orders and during TOD peak charge period, the total tariff may reach Rs12 to Rs14 per unit and it is actually happening with small scale industry. PSPCL designs and provide distribution equipment as per the peak demand observed during paddy of each year irrespective of the connected load on the system. Only the service cable connecting the premises and metering equipment is provided as per CD but the cost of these is borne by the consumer in full. Beyond that, the system is based on demand observed. Therefore PSPCL argument that it has to arrange equipment for the CD of the consumer does not hold good. Punjab has lot of MSME units and keeping in view the genuine difficulty of such lower end consumers employing thousands of workmen, we request the Commission to make the MoR as the permanent feature of the two part tariff to give relief to industry operating on the margin otherwise these are bound to become financially unviable and shut their shops causing huge blow to the efforts of GOP to revive the industry in Punjab. PSERC may consider introducing MOR initially for 100 to 1000 KVA and 1000 to 2500 KVA slabs of LS consumers only. PSPCL’s reply: Two Part Tariff was implemented w.e.f. 01.01.2018 as per provisions of National Tariff Policy, after giving two months‘ time to the consumers, so that they could optimize/reduce the sanctioned load as per their requirement. Two Part Tariff for respective categories was split at certain Utilization Factor (UF), Consumer having UF higher are liable to pay less per unit cost as compared to consumer having lower UF i.e. the consumers who consume more power as per their sanction load/contract demand will be benefitted because in such cases as the consumption rise, per unit electricity rate comes out to be low. To give relief to consumers having low UF and adapt to the structure of two part tariff as the same was implemented first time in the State, the GoP had decided that Two Part Tariff system introduced w.e.f. 01.01.2018, shall be subject to Maximum Over All Rate (MOR) and the concept of MOR (Subject to MM therein) for Large Supply and Medium Supply industrial consumers (from 01.01.2018 to 31.03.2018) was fixed. The State Government had borne additional financial implication on this account which was estimated as Rs. 50 Crore approximately for 3 months period i.e. January to March, 2018. However, it may be noted that the introduction of concept of MOR again shall defeat the
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basic structure and motive (regarding recovery of fixed cost from fixed charges and variable cost from energy charges) of introduction of Two-Part Tariff and shall be an additional burden of subsidy on the GoP. It is also intimated that the Power Purchase is being done in two-part tariff structure wherein fixed cost as well as variable cost is being paid to generators as per PPAs. PSPCL is paying for power purchase expense in two-part structure (fixed cost plus variable cost per unit), as such revenue should also be recovered in the same structure without any intervention of MOR as same will put an additional burden on State Government. Commission’s View: The objector may note the reply of PSPCL.
Issue No.12: Submissions of Induction Furnace Industry Induction furnace industry is passing through a critical phase. The viability of the industry greatly depends on the hand holding of GOP and its departments. As the cost of power constitute around 50 to 60 % of the value addition cost, the tariff and rebates of power play vital role in its survival. Savings through open access has stopped and industry has started using PSPCL power. We thank the Commission for withdrawl of PLEC, increasing the night rebate period from 6 months to 8 months and increasing the night rebate to 1.25/unit. However, introduction of two-part tariff, increase in tariff rates for last three years, introduction of Coal Washing Surcharge and increase in Electricity Duty by GOP, Capping of TOD night rebate plus HT rebate and FCA has taken away part of the meager reductions. Industry is looking forward to further concessions in power rates as under:-
Issue No.12 (1) There is full justification to increase the 66 KV voltage rebate to reduce the gap between cost and supply and tariff. PSPCL’s reply: Determination of tariff, rebate or surcharge to any category is prerogative of the Commission as per Electricity Act, 2003 on the basis of data supplied by PSPCL in the ARR, keeping the interest of stakeholders in view. Commission’s View: The suggestion is noted.
Issue No.12 (2) Merging of PIU and General Category or to reduce the gap in tariff between two categories. PSPCL’s reply: PIU industries affect the Distribution System on account of various parameters like Voltage Dip, Voltage flickers and Voltage & current waveform distortion, harmonics, capacity loss of the utility Distribution System, Demand Factor, Energy loss in Distribution System etc. The main points are also listed as under:- (i) The load of these PIU industries is non-linear. (ii) The non-linear nature of these loads distorts the voltage waveform and pollutes the power
quality. (iii) The presence of harmonics in the system reduces the Distribution capacity of the Utilities. The
capacity loss increases with the increase in non-linear load. (iv) As the harmonic current increases, the true maximum demand will increase. But the static
energy meters will record only RMS value of maximum demand. The excess demand increases with the increase in non-linear load.
(v) The non-linear load will not exhibit true power factor. The true power factor of non-linear load is low where harmonic currents are present.
(vi) The presence of harmonics in the system increases the Iron/Energy Losses of Utility Power Transformers. The energy loss in Utility Power Transformer increases with the increase in non-linear load.
(vii) The Utility has to invest more to provide higher level of short circuit MVA to absorb the power quality pollutants created by the industry having a large capacity of non-linear loads.
As such the tariff of PIU and Arc furnace consumer is on high side than general industry consumers. Utilization factor of such industries is high and per unit cost is low therefore such industries stand to gain due to inherent nature of two-part tariff. Further cross subsidy levels to various categories of consumers is under the purview of the Commission. Regarding measurement of harmonics in LS/PIU industries, a report /proposal has already been sent to PSERC. Similarly, comments desired on draft regulations on Power Quality were also submitted to the Commission through the O/o CE/ARR & TR
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vide this office Memo no. 237 dated 08.11.2019, where a formula was also proposed regarding imposition of penalty for excess values of total harmonic distortion (THD). Directions on proposal are awaited, however the demand of the industry for same tariff as that of General industry can be considered subject to installation of Power Quality Meters, for which the Commission may allow at least six months to procure, install and training of personnel. Commission’s View: The suggestion is noted. Also refer para 5.4 of this Order.
Issue No.12 (3) Threshold rebate has already served its purpose and now industry has no incentive as it is not possible to increase consumption every year. As such, we request to introduce load factor rebate for industry. PSPCL’s reply: Determination of tariff, rebate or surcharge to any category is prerogative of the Commission as per Electricity Act, 2003 on the basis of data supplied by PSPCL in the ARR, keeping the interest of stakeholders in view. Commission’s View: The suggestion is noted.
Issue No.12 (4) Solar power has become very cheap and does not require incentive. Consumer setting up solar power plant gets benefit of banking, ED and IDF whereas the fixed charges for the capacity becoming surplus is passed on to the other consumers. Therefore, for level playing field, incentives to such plants be curtailed. PSPCL’s reply: The levying of Taxes is the prerogative of the Government of Punjab. Commission’s View: The objector may note the response of PSPCL.
Issue No.12 (5) We further request for timely issue of Tariff Order in the first week of April. PSPCL’s reply: The Tariff Order is issued by the Commission. Commission’s View: The suggestion is noted. Objection No. 13: Nahar Spinning Mills
Issue No. 1: General There is lack of transparency as details of arrears being claimed in the monthly and supplementary bills is still not being provided. Further, resolution of billing disputes at sub division level is not available at all and consumers are being directed to approach dispute resolution authorities. Software updates are delayed requiring manual intervention. Keeping in view heavily surplus scenario and to increase the demand of power and energy , ease of doing business strategies be evolved and implanted for industry through mutual discussions. PSPCL’s Reply: The details related to arrear are currently displayed in the supplementary bills. However, the provision of displaying the corresponding document number has been made in the New bill Formats as desired by PSERC. Software is updated as and when the Commercial instructions are received and the corresponding developments are approved by the Commercial Organization after testing Commission’s view: PSPCL needs to address the issue to the satisfaction of the consumers in line with the provisions of the Supply Code.
Issue No. 2 PSPCL has delayed uploading the public notice inviting comments on the ARR on their web site whereas ARRs have been loaded. Public Notices printed in the daily newspapers though meet the legal requirement but may get skipped by person interested due to his tour outside the State or other preoccupation or the newspaper he purchases may be different. As such Licensees may be directed to upload such public notices related with ARR and Petitions etc. on their web site at a designated link simultaneously while releasing it to the press so that it does get noticed by stake holders.
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PSPCL’s Reply: The public notices were uploaded on the website of PSPCL at the designated link. Further, Public notice has also been published in two English and two Hindi newspapers. Commission’s View: The objector may note the reply of PSPCL.
Issue No. 3: Delay in CAG Audit Report for True Up 2018-19 Audited accounts of 2018-19 have been supplied with ARR 2020-21. However, the CAG report is not submitted as it is still not supplied by GAG and approved by PSPCL. The delay in timely compiling and submitting the audited data along wills true up ARR for the previous years is proving disastrous for the consumers in both the scenarios. lf the actual / admissible for true up are untrue, then consumer has to bear the carrying cost of Revenue Gap for 2 years and if the actual/admissible are less, then consumer gets relief after 2 years and in the meanwhile suffers due to high production costs resulting from higher tariff, Moreover, the Regulations/ Electricity Act 2003 do not permit such laxity and APTEL has already held that suo motu proceedings be started where the utility fails to present its case. MYT Regulations also provide that for delay, the carrying cost will not be allowed. As such PSERC may initiate action against the utility for willful and continuous violation of regulations and the Act. Further, PSPCL/PSERC are requested to share these reports with the stake holders by making these part of ARR Petition and placing on the web site link of PSPCL/PSERC, PSPCL’s Reply: It is intimated that the annual accounts of PSPCL for FY 2018-19 were timely prepared and got approved from BoDs in its 77th meeting held on 24-09-2019 and stand audited by the Statutory Auditor on 25-09-2019. Thereafter, the CAG has conducted the supplementary audit of accounts of PSPCL for FY 2018-19 from 14-10-2019 to 13-11-2019. The management replies on the draft comments were submitted to their office on 26-11-2019. The final audit report is still awaited. As & when received, the same along with management replies will be placed before BoDs for its approval and for onward adoption in AGM. Thereafter the same will be supplied, In view of the above, it is submitted that there is no delay or laxity in the finalization of accounts on the part of PSPCL. Commission’s view: PSPCL has now submitted CAG report of FY 2018-19, which has been uploaded on the website.
Issue No.4: Revenue Gap and its Financing From the figures of Revenue Gap as projected by PSPCL in the ARRs and tariff orders, the Cumulative gap works out to 11179.66 Cr against the Net ARR 2019-20 figure of 36156.38 Cr which is 30.92%. PSPCL, which had surplus power up to FY 2015-16 turned into a loss-making utility after that and the increase in loss is rising alarmingly. PSPCL, has not separately worked out the liability of GOP for nonpayment of subsidy and is also manipulating the interest on delayed payment of subsidy of GOP by accounting it in Non-Tariff Income thereby loading it on the consumers rather than seeking recovery of the same from GOP. The GOP subsidy and interest on the delayed payments need to be charged from GOP. Perusal of ARR shows that PSPCL is not presenting the correct picture in the ARR. Even the contents of the ARR Petitions show that the information being given in ARR has been considerably reduced and more information is being submitted through the Reply to Deficiency and submission of ARR is becoming a mere formality. With the Revenue for 2020-21 at current tariff projected as 32704.97 Cr, and Net ARR to be recovered through tariff worked out as Rs 43884.63 Cr with Revenue gap of 11179.66 Cr, the required increase in tariff works out to 34.20%. Thus, PSPCL needs the tariff to be 134% of the present tariff immediately to meet its current expenditure and previous unmet liabilities which seems to be absurd and either ARR or Tariff Orders are not presenting the real picture of State of affairs in PSPCL. Further, to reduce the tariff shock, PSPCL has proposed to recover Only Rs 37250.76 cr during current year i.e. raising the tariff by 11.4% and the balance Rs 6633.87 Cr to be carried forward as Regulatory Asset to be recovered in the future years. However, APTEL order in OP no 1 clearly indicate that recovery of revenue gap be done in the relevant year and creation of Regulatory assets should be discouraged. The revenue from consumers for H2 of 2019-20 has not been indicated in Form D25 (A) and in Reply to Deficiency including LS consumers. For 2020-21, Projected net revenue is Rs 11963 Cr on the sale of 15908 MUs indicating average tariff of Rs 7.52/unit. The final tariff with 20% taxes, the tariff of LS consumer will be Rs 9.02/unit. After counting the 35 paisa Surcharge for Coal Washing (Including taxes), withdrawal of 0.25 paisa per unit of HT rebate to 66 KV consumers during night hours for 8 months, difference of interest of Security Consumption (6% being paid by PSPCL Vs 12% payable to banks) and FCA which is certainly to be levied etc. the tariff works out to Rs 10.50 plus without subsidy and Rs 9.30 with GOP subsidy.
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The figures therefore need appropriate scrutiny by PSERC as neither consumer can bear any more increase in tariff nor GOP can bear any more subsidy burden beyond the existing level. With the current net tariff being Rs 5/- as variable charge with GOP subsidy plus Rs 260/KVA/Month as fixed charges for the General Industry plus ED+IDF+MC of 20%, imposition of 35 paisa surcharge, merging of HT rebate in TOD for night hours of 8 months etc, industry is finding it difficult to remain in profit. With any further increase, industry cannot compete with neighboring States and will have to shut down. PSPCL’s Reply: With regard to the query of the objector regarding the passing of nonpayment of subsidy of GoP to the consumers, the Commission had approved the carrying cost on account of delayed payment of subsidy amounting to Rs.1057 Crore. Also, the query of the objector that PSPCL has been reducing the contents of the ARR is incorrect as PSPCL has been transparent in filing the petition and has submitted the ARR as per Regulations issued by PSERC. Further, the replies to deficiencies have also been uploaded on the website. Further, the query of the objector that the ARR does not present the real picture of state of affairs in PSPCL, it is submitted that the ARR petition is filed as per the Regulations issued by the PSERC. With regard to PSPCL creating regulatory assets, it is submitted that PSPCL has proposed the revenue gap to be recovered during FY 2021-22 and FY 2022-23 in order to avoid Tariff shock for the consumers of Punjab. It is further submitted that the determination of Tariff is the prerogative of the Commission. Commission’s view: The Revenue gap is determined by the Commission keeping in view the expenses and income as per MYT Regulations. Tariff order is issued after prudence check and due diligence. Issue No.5: Interest on Short Term Loans The PSPCL has admitted in previous ARRs to raise short term loans to meet the revenue shortfall arising out of non-receipt of subsidy from the Government, disapproval of expenses, and delayed payments by consumers etc. though in the present ARR, this has not been repeated. However, the fact remains that PSPCL has raised loans on its own over and above the approved loans as per Tariff orders and claiming interest on the same which were being disallowed. Interest on such loans should not be passed on to the consumers. The mismatch between the ARR approved by the Commission in the Tariff Order and actual expenses incurred by the PSPCL on its own should be met through internal accrual. It is also pertinent to point out here that if the request of PSPCL to allow the interest on Short Term Loans taken to meet the disallowances in the previous Tariff orders is accepted, this would automatically approve the actual expenditures on Employee Cost, power purchases, fuel expenses, R&M expenses and other similar disallowances and whole exercise of submitting ARR, submission of comments by stake holders and Public hearings will become farce. It is also submitted that as per Regulations, PSPCL is to be allowed working capital on normative basis. PSPCL has GPF of the employees and this amount just like Advance Consumption Deposit (Security) is being used by PSPCL for its working capital requirement and therefore funds parked with PSPCL by employees in the shape of GPF' should also be deducted from the Working capital as per Advance Consumption Deposit (Security) and claim of PSPCL for interest on GPF as well as interest on actual amount of short term loans as claimed by PSPCL in ARR need to be rejected. Further PSPCL is getting interest/carrying cost for late receipt of subsidy from GOP which is being worked out by PSERC. Further, PSPCL is getting Late Payment Surcharge for delayed payments of consumers. So, there is no reason for approving interest cost for such loans. PSPCL’s Reply: PSPCL avails the working capital loans to meet with its working capital requirement due to non-receipt of Government dues, non-receipt of timely subsidy from GOP and due to cash losses of PSPCL.PSPCL is being claiming interest charges on the basis of actual interest paid against the loans availed by PSPCL, whereas PSERC allows the same on normative basis. So far as ACD is concerned, it is mentioned that PSERC has already deducting the ACD while calculating the working capital requirement. As such the interest burden of excess working capital loans is being borne by PSPCL and is not being passed on to the consumers. Moreover, after unbundling of PSEB, GPF Trust has been established and GPF subscription of employees is being transferred to Trust by PSPCL on monthly basis. PSPCL is making monthly repayments towards its GPF liability which has been parked to PSPCL at the time of unbundling of PSEB. Further, It is also submitted that As per regulation 41(a) of Provident Fund Regulation 1960 "G.P Fund balances, after deducting final payments, permanent and temporary advances as admissible under these Regulations will be available for use by the Board in meeting its Capital Expenditure under the Plan." As such the
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objection regarding reduction of GPF Balance for calculation of normative working capital and interest thereon is not justified. Commission’s view: Interest on working capital is allowed in line with PSERC MYT Regulations after prudence check on normative basis.
Issue No.6: Conversion of Loans under Uday Scheme to GOP equity PSPCL has equity base of Rs 6081.43 Cr as per FRP approved by GOP while PSEB was bifurcated into PSPCL and PSTCL on 16.4.2010. Though the matter regarding conversion of Consumer Contribution and Govt Subsidies into equity has not been approved by APTEL, still the matter is under litigation in Supreme Court and PSERC is granting ROE on Rs 6081.43 Cr. APTEL had observed that the Govt can hold any amount as equity in PSPCL (and PSTCL) but ROE needs to be granted only on actually subscribed and paid up equity only i.e. cash money which has been infused need to be counted as equity for the purpose of ROE. Subsequently, MOP, GOI introduced UDAY scheme for stressed power sector and PSPCL, GOP and MOP entered into a tripartite agreement as per which PSPCL loans of Rs 15628.26 Cr were taken over by GOP through issue of SLR bonds by banks in the name of GOP and loans were taken off the books of PSPCL. However, instead of paying the interest on such loans from the State govt funds, GOP continued to recover the interest on such loans from PSPCL. The amount paid by PSPCL is 1307 Cr in 2017-18 and 2018-19 and Rs 867 Cr for 9 months of 2019-20. The rate of interest works out to 8.4% per year. Since the UDAY scheme is up to 31.3.2020, PSPCL has proposed in Para 4.17 of ARR to convert the loan amount of Rs 15628.26 Cr as GOP equity in PSPCL thereby increasing GOP equity from 6081.43 cr to 21709.69 cr. It is also proposed to recover ROE on this loan converted equity amount of Rs 15628.26 @ 15.90% which works out to Rs 2485 Cr. Thus, by simply maneuvering the entry of loan amount to equity, consumers will be asked to pay Rs. 2485 Cr instead of Rs. 1307 cr i.e. an increase of Rs. 1178 Cr requiring increase of tariff of about 23 paisa per unit across the board on this account alone. Consumers will have to pay 28 paisa per unit including taxes of GOP. This is clearly against the interest of the consumers and PSERC should not allow it. It is also pointed out that we had been raising the issue of excess capital and WC loans, PSERC had been disallowing such excess loans. Therefore, the loan amount was much less and all such loans of Rs 15620.26 Cr cannot be charged to the consumers though may have been taken by PSPCL. Further, the UDAY loans need to be treated as per tripartite agreement executed at the time of execution of UDAY scheme. PSPCL itself says that the loans are to be converted into grants and/or equity: Then why the PSPCL has proposed to convert these into equity only and not grants. We request that firstly the loan amount be scrutinized and after disallowing the excess loan amount, balance amount be first considered for GOP grant as per amount fixed in Tripartite agreement and remainder amount only be considered as equity but it should not qualify for ROE as per orders of APTEL dated 17.12.2014 in Appeal No 168 and 142 of 2013 as there is no cash flow towards equity and it is only paper adjustment. PSPCL’s Reply: The Government of Punjab will be converting the UDAY loans of Rs.15,628 Crore into equity. As per PSERC MYT Regulations, PSPCL is entitled to return on equity of 15.50% on the equity amount. Commission’s view: Interest on long term loans and Return on Equity is determined by the Commission in-line with PSERC MYT Regulations after prudence check.
B) Detailed comments on the True up of 2018-19 and Revised Estimates 2019-20. Issue No.7: Power Purchase Issue No 7Bi) Directive regarding review of PPAs etc. PSERC directive in TO 2013-14 may be referred asking PSPCL to review all the PPAs and surrender costly powers in view of commissioning of IPPs in the State. This directive was being perused every year but PSPCL has not reported any progress so far. PSERC has dropped the directive in the tariff Order 2018-19 without any drop in contracted capacity. PSPCL has also not submitted any proposal for "Sale of Surplus Power" in the ARR and has proposed to simply pass on the fixed cost of idle capacity to the consumers. We are very sorry to say that In spite of being grossly surplus in power, PSPCL is not changing its mind set to encourage increase in consumption by the industry and other consumers with in Punjab. Instead of adopting consumer friendly practices enabling ease of doing business, it is creating environment in which it is forcing the existing consumer base to pay so much that the revenue equals its revenue requirement. In the process, there is no incentive for the industry to willfully invest here. We may point out that Rebate for Threshold limit to eligible LS consumers at reduced tariff of Rs 4.99
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in 2016-17 was given in Oct-Nov 2017 i.e. after 7 months of closing of FY, that too after the intervention of PSERC and thereafter reduced tariff of Rs 4.23 for 2017-18 was given after the year was over as per orders of the Commission and PSPCL is treating such eligible consumers as though they are a liability for PSPCL. PSPCL is still to refund ED+IDF collected upfront and interest for the period of delay in releasing payments. Facility of pre-paid meters is not being made available since PSPCL will have to refund the security amount of the consumers because it is earning about 6% interest being the difference of rate of interest of RBI and WC. Remote reading of LS consumers under SAP has been introduced but neither display units nor the TOD wise meter readings are being provided to consumers for verification. Bills being issued under SAP are wrong most of the times and consumers have to run after PSPCL to get them corrected. Each CBC is adjusting GOP subsidy in its own fashion and there is no uniformity. Sundry charges are not supported by details/calculations and consumers are asked to deposit the amount within 7 days with threat of action as per rules of PSPCL though the grace period of bill should be at least 15 days/30 days from date of receipt. Industry opting for Special Night Tariff was issued bills at full rate and they had to run to the SDO and CBC office for getting the bills corrected manually since software is not updated. Such reform measures should not be left at the mercy of PSPCL and time bound action needs to be ensured as it will encourage consumers to plan its consumption in an efficient manner. PSPCL’s Reply: With regard to review of long term PPAs signed by PSPCL with Centre Sector Generating Stations, it is intimated that the agreement can only be reviewed on mutually agreed terms and conditions. Also, a legal opinion regarding surrender of power share has been taken by PSPCL and the advocate Mr. M.G. Ramachandran opined that PSPCL cannot treat any agreement as terminated unless the Generating Company agrees to the same. Further, the matter regarding surrender of power from NTPC/NHPC Generating Stations has been reviewed by PSPCL & accordingly MoP, GoI has been requested to reallocate PSPCL share of power from Anta, Auriya, Dadri & APCPL jhajjar to some other needy States in India. For handling of surplus power PSPCL had created a dedicated cell in Nov'15 under PPR organization. Since 2015, every year PSPCL had floated tender enquiry for empanelment of traders for signing MOU for sale of power on behalf of PSPCL. For sale of power, PSPCL is bidding in Day Ahead market segment of IEX for last many years. PSPCL has also started to bid in Term Ahead market segment of IEX as well as PXIL (Power Exchange India Limited) from the year 2018 onwards, to exploit various market opportunities available in this segment. For sale of surplus power PSPCL had also considered Tender Enquiries floated by other State Utilities/ Discoms for purchase of power and participated in such Tender Enquiries in which PSPCL was eligible/surplus Commission’s view: The objector may note the response of PSPCL.
Issue No 7B ii) Extra cost of short term purchase/banking transactions for Agriculture The short-term purchase of power and banking of power with other States is being done for meeting the consumption of agricultural sector during paddy for which industry is not responsible. Consumption of industrial sector remains almost same throughout the year and is not generally linked with the season where as PSPCL arranges the additional power and books the interstate/inter regional corridor for open access in advance for Agriculture sector which is dependent on rains and in case of excessive rain, the power has to be surrendered at very cheap rates and in case of shortfall in rain, industry has to suffer power cuts/weekly off days. Justice demands that industrial consumers should not suffer and bear the burden for enhanced power requirement during the paddy season. Hence, such increase in power consumption and extra cost attached to it should be loaded on the sector which is responsible for such consumption of electricity rather than loading the same on the overall tariff including the industrial sector. PSPCL’s Reply: During summer season demand of all the sectors goes up i.e. Domestic, Industrial & agriculture. & therefore, claim of the objector regarding Short Term Purchase only for agriculture sector is not agreeable. Moreover, rate of power purchased on short term basis is well below the rate approved by the commission, (which is already including all the charges mentioned by the objector). The Government of Punjab is effectively pursuing its policy to reduce the area under paddy cultivation and increase in the area of maize and sugarcane cultivation to reduce electricity consumption by tube wells and drawing less water to sustain underground water level as well. Supply to agriculture tube wells is free as per policy of the Government and capping of the same is at the discretion of the Government of Punjab. Moreover, supply to AP consumers is limited only up to 8 hours that too
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during the months of June to September for paddy cultivation. Commission’s view: The objector may note the response of PSPCL.
Issue No 7B iii) Power Purchase Perusal of year wise power purchase data given reveals that PSPCL is not exercising due care in its planning of power purchases as under: a) Power surrendered/ to be surrendered The increase in quantum of surrendered power indicates that there are some PPAs already entered in to by PSPCL, which will be commissioned during 2019-20 to 2021-22. PSPCL has also disclosed that they will be receiving power from Tapovan Vishnugad HEP, Vishnugad Pialkoti HEP, Parbati II HEP and Singrauli III. Inspite of being surplus in Power, PSPCL is adding new projects to its kitty for purchase of power under long term contracts binding the consumers of the State to pay for the fixed costs for such projects. The excess capacity will continue till around 2027-28 if no fresh capacity addition takes place in these years. However, in view of additional capacity coming up udder roof top solar. Solar IPPs, wind capacity already contracted and other RE based projects for meeting RPO and energy conservation/Demand side management measures, the period may further extend to 2029-30. PSPCL is surplus in power and PSERC had directed PSPCL to review all PPAs in TO 2013-14. It is strange that inspite of such situation and inspite of projected increase in consumption over the years, the idle capacity is increasing. PSPCL has commitments to purchase power from power plants to be commissioned in 2020-21. We request PSERC to take action for the episode: i) Why PSPCL has signed such PPAs and why no action taken has been to cancel such PPAs. ii) Whether advance approvals were taken by PSPCL from its owner GOP and PSERC. iii) Justifications given by PSPCL for purchase of the capacity needs thorough investigation and if the projections given in justifications have not materialized then why related officers should not be held responsible. iv) How PSPCL can bind consumers to bear fixed charges for such capacity year after year. v) Whether GOP and PSPCL should not bear the fixed charges of such capacity till the demand increases to that extent. Further, PSPCL needs to be advised in clear terms that it should not bind the consumers of Punjab for the fixed charges of any new capacity unless prior approval of GOP and PSERC is taken after prior publication of the proposal from stakeholders and holding Public Hearing: otherwise the liability will have to be borne by them. PSPCL’s Reply: Surrendered quantum is showing decreasing trend in upcoming years. Further, the matter regarding surrender of power from NTPC/NHPC Generating Stations has been reviewed by PSPCL & accordingly MoP, Gol has been requested to reallocate PSPCL share of power from Anta, Auriya, Dadri & APCPL jhajjar to some other needy States In India. PSPCL signed PPAs towards Tapovan Vishnugarh HEP on 29.12.2010, towards Parbati II HEP on 02.11.2002, for Singrauli III on 29.12.2010 and towards Vishnugarh Pipalkoti on 05.06.2007. Further, the petition regarding approval of long term PPAs signed by PSPCL has already been submitted by PSPCL before PSERC. Commission’s view: The objector may note the response of PSPCL
Issue No B 7iii b) Year 2018-19 (Form D-3) i) PSPCL had indicated in ARR of 2019-20 that PSPCL, had purchased 3432.04 MUs of short-term power in of 2018-19 through traders at 311 paisa per unit at Punjab Periphery. In addition, 71.78 Cr is also paid for open access charges. However, this item is not appearing in the True up of 2018-19 submitted in ARR 2020-21. This needs to be checked. ii) Previous year payments of Rs 350.08 Cr included distorts the average purchase rate of power as these are not related to the year 2018-19. iii) PSPCL has surrendered 80.73 MUs under UI and also paid Rs 73.08 Cr to UI pool account which is indicative of mismanagement and inefficiency. This transaction should be disallowed. iv) Late Payment Surcharge and TDS need to be disallowed as Early Payment Discount is not being counted in Power Purchase Cost and being retained by PSPCL. v) Reactive charges of Rs 1.79 Cr indicate that PSPCL is importing reactive power from grid and PSPCL is not generating enough reactive power to meet its demand. This import is mainly during paddy season as farmers are not providing Reactive power compensation and thermal plants which are producing more KWH and not maintaining rated power factor. PSERC is requested to introduce Reactive power charges on thermal plants to save the situation.
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vi) Pragati III gas plant variable rate is Rs 3.77/unit which is above the variable rate of PSPCL's own plants. Purchase of 246 MUs of power should have been avoided. PSPCL’s Reply: i) PSPCL has submitted purchased 3432.04 MUs (net MUs) of short-term power and Rs. 71.78 cr. towards open access charges in ARR 2019-20 for FY 2017-18 (true up). ii) The previous year payments in respect of central sector generating stations have been made towards the bills raised by various firms for previous period on account of revised energy charges, capacity charges, water usages charges, RLDC charges etc. on the basis of various CERC orders revising AFCs. However, previous year Charges against Sasan Power Ltd for FY 2018-19 accounts towards various Supplementary bills raised by Sasan Power Ltd due to certain Change in Law events as allowed by CERC, APTLL and SCI. Further, previous year payments towards GVK has been made during FY 2018-19 on account of revised calculation of monthly bills in view of PSERC order dated 06.03.19 27.05.19 for FY 16-17, FY 17-18. In case of Mallana-II HEP, Previous year payments has been made on account of revised calculation of monthly bills in view of PSERC order dated 11.02.19 for FY 14-15,15-16,16-17,17-18. iii) Refer PSPCL‘s reply in issue No. 5(2) of Objection No. 11. iv) The Late Payment Surcharge and TDS are being dealt as per the PSERC MYT Regulations. v) The query has been addressed to the Commission. vi) Power available from Pragati III gas Plant is only availed as per their lower variable cost in comparison to other stations. Load pattern varies during day and different seasons. To meet peak of day/year power from all projects needs to be availed at same time & surrendered during lean period of day/year. During surrender firstly costly power is surrendered. Moreover, being the center sector generating stations, even if power is not requisitioned by PSPCL from these stations, at times while running on technical minimum, some quantum is booked by NRLDC in order to maintain desirable availability of power in grid depending upon real time operation. PSPCL is following merit order in letter and spirit. It is evident from such minimal quantum of power from such stations. Commission’s View: i) to iv) The objector may note the response of PSPCL. v) The concern of the objector is noted. vi) The objector may note the response of PSPCL.
Issue No 7B iii b) APR for FY 2019-20 (Form D3) i) Para III to VI above for 2018-19 are also applicable to 2019-20 also. ii) The variable rate of Unchahar II (352.55 paise/Unit) is highest amongst its 4 No. units but the power scheduled is highest means that merit order Is not followed. iii) Details of other receipts ( -7.88 Cr) is not given iv) PSERC has decided the Petition No 25 of 2019 and imposed 29 paisa per KVAH Surcharge. Therefore, the amounts under other charges be reduced from the Power Purchase Cost. PSPCL’s Reply: i) Please refer to the reply given for FY 2018-19. ii) Power available from Unchahar II is only availed as per their lower variable cost in comparison to
other stations. Load pattern varies during day and different seasons. To meet peak of day/year power from all projects needs to be availed at same time & surrendered during lean period of day/year. During surrender firstly costly power is surrendered. Moreover, being the centre sector generating stations, even if power is not requisitioned by PSPCL from these stations, at times while running on technical minimum, some quantum is booked by NRLDC in order to maintain desirable availability of power in grid depending upon real time operation. PSPCL is following merit order in letter and spirit. It is evident from such minimal quantum of power from such stations.
.iii) The detail of other receipts (-7.88 Cr.) is as under: Sr. No. Company Name Amount (in Rs.)
1 Arunachal -1,73,120/-
2 GMR -18,010/-
3 Manikaran Power -3,32,459/-
4 NVVNL -60,39,968/-
5 RUVNL -5,87,80,763/-
6 Telangana -13,43,848/-
7 POSOCO-NRLDC -9,000/-
8 Other -1,21,20,001/- Total Other Receipts (Rs.) -7,88,17,169/-
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iv) The amount of Rs. 421.77 Cr. included in other charges of NPL paid by PSPCL (variable charges) in view of Hon'ble Supreme Court order dated 07.08.19 to NPL for the period Jan-14 to June-19 and the amount of Rs. 1002.05 crone included in other charges of TSPL paid by PSPCL to M/s TSPL in compliance to SC order dated 07.08.19 for the period of Jun, 14 to June, 19 has already been removed from other charges by PSPCL. Commission’s view: The objector may note the response of PSPCL. Issue No 7B iii c) Projections of 2020-21 i) The surrender of power needs to be reviewed/checked every month in view of changing scenario
of coal cost due to allotment of coal mines thro' bidding process, variation in imported coal prices and increasing gas prices.
ii) PSPCL is bearing the fixed charges of Anta and Auriya power stations but the generation at these plants is very costly. PPAs for these stations were executed on 31.10.1994. The useful life of the gas-based projects is 25 years and thus PPA term is already over by 30.10.2019. PSPCL and GOP should clearly intimate the MOP and NTPC that it will not extend the PPA for these two stations. PSPCL may associate Haryana, Himachal and other beneficiaries of these plants which are also surplus in power. The matter needs to be flagged in CEA also that these plants may be retired after their useful life is over. This will save PSPCL Rs. 71 Cr of fixed charges and 133 MW of contracted capacity.
iii) Banking import and export is shown as 606.13 and 50 Mus respectively for 2020-21 and 1700 Mus in 2021-22 against 4765.80 in 2019-20. PSPCL may bring out the reasons for the same.
PSPCL’s Reply: i) PSPCL already has a practice to review variable costs of projects on monthly basis. ii) As per PPAs signed between NTPC & PSEB for Anta & Auriya, the duration of the agreement shall remain operative upto 31.10.97 provided that this agreement may be mutually extended, renewed or replaced by another agreement such terms and for such further period as the parties mutually agree. In case Bulk power Customer(s) continue to get power from NTPC-stations even after expiry of this agreement without further renewal or formal extension thereof, then all the provision of agreement shall continue to operate till this agreement is formally renewed, extended or replaced. Further, MoP, GoI has been requested to reallocate PSPCL share of power from Anta & Auriya generating stations to some other needy States in India. iii) Banking shown for 2020-21, 2021-22 & 2022-23 are part of projections will be settled on actual basis as will be decided time to time depending every season real time demand / availability gap to meet peak paddy demand & utilize surplus in winters. This proved to be very fruitful to PSPCL during recent paddy seasons. As PSPCL was able to have sufficient power arrangements and it did not require to purchase power on short term basis. Commission’s view: The objector may note the response of PSPCL. Issue No. 8: UDAY Scheme benefits: i) Perusal of UDAY scheme reveals that PSPCL transferred 75% of its long term and short-term
working capital loans to Punjab Govt and again started taking loans for working capital negating the savings in interest due to lower interest rates under UDAY. PSERC has been rightly disallowing the interest charges on excess working capital loam converted under UDAY and we request that the practice should be continued as consumers cannot be punished with the mismanagement of finances by PSPCL.
ii) PSPCL had brought out the provisions of the MOU signed under UDAY scheme for conversion of the 75% of Loan taken over by COP into loan and equity and the extract is produced as under: PSPCL submits that, as per clause no. : 1.2 (d) of MOU of UDAY Scheme, State Government will convert the GOP loans .of Rs. 15,625.26 Crore into Grant of Rs. 11,728.26 Crore and Equity of Rs. 3,900 Crore. Further, for projecting interest expenses for 2019-20, it has been assumed that the State Government will convert the GOP loans into Grant and Equity on March 31, 2020, Accordingly, repayment of GOP loans has been assumed on March 31, 2020. Further, PSPCL submits that consequential impact of conversion of loan into grant and equity shall be considered after April 1, 2020. PSPCL has now proposed that the UDAY loans will be converted into GOP equity in PSPCL which is wrong and we strongly object to the same. GOP is presently paying interest on UDAY loans @ 8.36% whereas after conversion of equity, PSPCL will get ROE @ 15.93% from the consumers benefitting to the extent of 7.57 %.
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PSERC had rejected lot of capital loans and Working capital Loans as these were taken w/out approval of PSERC and these are detailed out in the respective tariff orders. These were also not recognized by PSERC as per tariff Orders of PSERC under UDAY Loans. PSERC is requested to consider only the approved loans for adjustment under clause 1.2 (d) of MOU of UDAY and determine the closing balance of admissible amount out of Rs 15625.26 Cr as on 31.3.2020 and adjust the balance firstly under Grant of 11728.26 Cr and only balance be treated as equity. Further, no return on equity will be admissible as there is no cash flow from GOP to PSPCL.
PSPCL’s Reply: i) Working capital loans have been taken by PSPCL, to fund the deficit of its financials. ii) It is submitted that the Government of Punjab will be concerting the entire Rs.15,628 Crore loan
into equity and hence PSPCL is entitled to RoE on the equity infused by the GoP. Commission’s view: Interest on long term loans and Return on Equity is determined by the Commission in-line with PSERC MYT Regulations after prudence check. Issue No. 9: Purchase of NRSE Power The details of NRSE power show that PSPCL has signed PPAs with SECI for purchase of windpower. It is a fact that wind power is infirm power and it will flow during night hours of non-paddy period of 8.5 months when PSPCL is heavily surplus of power. Though the sale rate is lower but since the night power is sure to be dumped at zero cost, the ultimate cost will be much higher. PSPCL cannot burden the consumers with such purchases. Setting up Biomass projects in Punjab particularly based on Rice Straw as fuel is the need of the hour. Setting up such projects will bring investments in Punjab, create employment, increase rural incomes, bring down losses of PSPCL and above all reduce pollution. It is therefore suggested that PSPCL should sign long term PPAs with developers of NRSE power projects under APPC regime only. This will make available NRSE power to PSPCL at cheaper rites and allow the developers to get RECs which they can sell in power exchanges. Alternatively, the power purchase can be made on APPC plus Floor price of REC. In this front-loaded tariff of RE power will be replaced with back loaded tariff and give relief to the consumers as well as PSPCL. PSPCL should not bind the consumers with infirm solar and wind power from the sources out of the State and instead either purchase such power from plants to be set up in the State or else may purchase RECs to meet the shortfall of RPO. We also suggest that contracts for power from new projects be executed keeping in view the surplus scenario forcing the consumers to bear the fixed cost of idle capacity, tariff of the project, RPO requirement, rate of REC, present sale rate of power to consumers in Punjab vis a vis sale rate in neighboring states, GOP subsidy liability etc. PSPCL’s Reply: It is correct that Wind Power is Infirm Power but it is not correct to say that it will flow during night hours of non-paddy period of 8.5 months when PSPCL is heavily surplus of power. As per studies conducted by various bodies, it has been observed that the Wind Resource available in India peaks during summer season (May-Aug) i.e. maximum during the month of June. It is worth mentioning that Load demand of Punjab rises abruptly during June due to Paddy season. Availability of more Wind Power during that time will help to mitigate the demand. Further, PPA was signed with SECI for purchase of 150 MW of Wind Power. This power has already been started flowing from May, 2019. During the month of Nov, 2019, it has been observed that more Wind Power per hour is available during night hours but it also recompenses the morning and evening peak load hours. Moreover, further analyzing the data depicts that the daytime (06:00 hrs. to 21:00 hrs.) generation on monthly average basis is at par with the night time (21:00 hrs. to 06:00 hrs.) generation in the said month. PSPCL has also signed a PSA with NTPC to purchase 200 MW Wind Power from the project of M/s Sprng Vayu Vidyut Pvt. Ltd., (Madhya Pradesh) at a tariff of Rs. 2.776/kWh. The Firm has sent the estimated project data to PSPCL regarding monthwise wind power Generation and Day & Night Wind Power Generation. After perusal, it is observed that during winters i.e. in the month of October to March, Night Generation is at par with Day Generation, but in summers i.e. April to September, Day Generation is substantially higher than Night Generation. It is also observed that more energy (approx. 51% of the total energy supplied in year) is available during the period from May to September i.e. the period of Paddy Season for PSPCL. During the remaining months i.e. October to April, the monthly energy available during nights is approx. 23% of the total energy supplied in a year which is relatively smaller and acceptable. PSPCL agreed that setting up Biomass Projects in Punjab particularly based on Rice Straw as fuel is the need of the hour and setting up of such projects will bring investments in Punjab, create employment, increase rural incomes and reduce pollution, but the tariff notified by PSERC for such
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types of projects for FY 2019- 20 using Rice Straw & Juliflora (plantation) with water cooled condenser & travelling grate boiler i.e. Rs. 8.75 /kWh(Fixed Cost Rs.3.01/kWh + Variable cost Rs.5.74 /kWh) with 5% annual escalation on variable cost is on much higher side and is the maximum ceiling rate which is not affordable to PSPCL in the interest of electricity consumers of Punjab. The Firm suggested that PSPCL should sign long term PPAs with developers of NRSE power projects under APPC (Average Pooled Power Cost/Average Power Purchase Cost) regime only as this will make available NRSE power to PSPCL at cheaper rates and allow the developers to get RECs which they can sell in Power Exchanges. In this regard, it is submitted that power purchased through this mode will not be treated as RE power for RPO Compliance by PSERC. If PSERC accept/consider this power (purchased through this mode) as RE Power for the purpose of RPO Compliance, then PSPCL have no objection to purchase RE Power through this mode and it will be in the interest of peoples of Punjab State from the point of view of pollution & low cost power. If PSERC allow, then, it will be the good option for PSPCL. Alternatively, Firm suggested that the power purchase can be made on APPC plus Floor Price of REC. The applicable APPC for the FY 2019-20 is Rs. 4.29/kWh as determined by PSERC in Tariff Order FY 2019-20 for PSPCL. Floor Price is Rs.1000/REC for each Solar & Non-Solar REC. If any 100% Rice Straw Biomass IPP Power Project developer is ready to sell power to PSPCL at this suggested mode i.e. at the rate of 5.29/kWh (4.29+1.00) then it is also a good option for PSPCL to purchase RE power from such projects through this mode. Offers to sell power through this mode by the Rice Straw biomass IPP project developers will be accepted by the PSPCL. As per PSERC's RPO Regulations, RPO Compliance is must. To compliance RPO, PSPCL have the option to purchase either RE Power or RECs. In the market (PXIL & IEX), at present (January, 2020), Solar REC is available in the range of Rs. 2400/--2500/- and Non-solar REC is available in the range of Rs. 2000/- - 2200/-. Combination of Solar and Wind Power is good from the point of view that Solar Power is available during Day time and Wind Power at Night time. Moreover, the most of the Wind power is available during May to August i.e. during the paddy season when PSPCL needs more power during both day and night times. PSA with SECI for 150 MW Wind Power was signed @ Rs.2.52/kWh and for 200 MW Wind Power signed on Rs. 2.72/kWh, which are the comparable rates with the present rates of RECs. Further, the Firm suggested that contracts for power from new projects be executed keeping in view the surplus scenario forcing the consumers to bear the fixed cost of idle capacity, tariff of the project, RPO requirement, rate of REC, present sale rate of power to consumers in. Punjab vis a vis sale rate in neighboring States, GOP subsidy liability etc. In this regard it is informed that Power Purchase Agreements to purchase RE Power from the new projects are signed only after examining the above mentioned factors. Commission’s view: The Objector may note the response of PSPCL. Issue No. 10. Other issues i) PSPCL has consumer security deposit of Rs 3254.91 Cr on 31.3.2019. This is reduced from WC requirement as per normative to work out the interest on WC. However, Similarly GPF amount of Rs. 1129 Cr as on 31.3.2019 is also available with PSPCL for use as WC. However, PSPCL is able to get more than the admissible WC loans from banks. Probably PSPCL is not disclosing the Consumer Security Deposit granted by PSERC to be used as WC and GPF amounts to banks and getting higher WC loans. It is probability this ability of PSPCL to get more WC loans which enables GOP to default on subsidy amounts. ii) Details of Other Debits of Rs 215 Cr for 2018-19 are given in Schedule 38 of Audited statement. These are not admissible to be passed on to the consumers as PSPCL is getting revenue through TO mostly on normative basis and such losses & bad debts not recoverable need to be borne by the PSPCL. This also include Rs 7.18 Cr as loss due to fire in mine which is not admissible as mine was under the joint venture custody. Therefore, this needs to be disallowed. PSPCL’s Reply: i) Please refer to reply in Issue no.5 above. ii) The Other Debits Rs. 215 Crore has been claimed as per actual accounts of PSPCL and within the limit (subject to a maximum of 1% of annual sales revenue excluding subsidy) specified under regulation no. 47 "Bad and Doubtful Debts and other Debits" of PSERC. It is intimated that after the decision of Hon'ble Supreme Court of India on dated 25-08-14 to cancel the mine allotments, with the strenuous efforts of PSPCL through Government of Punjab, the Pachhwara Central Coal Mine got allotted again to PSPCL in the year 2014-15. As such the expenditure of Rs. 7.18 Crore on account of loss on fire in mine is borne by PSPCL.
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Commission’s view: The Commission allows Other Debits as per Regulation-47 ‖Bad and Doubtful Debits and other Debits‖ of PSERC MYT Regulations-2014 after prudence check. Objection No. 14: Punjab Alkalies and Chemicals Limited Issue No. 1: Voltage Rebate PSERC issued the Tariff Order for 2019-20 on 27.5.2019 effective from 01.06.2019 in which the condition of Capping of TOD night tariff was changed as under: -
―.....cumulative effect of ToD rebate and Voltage rebate on the Energy Charges (including reduced Energy Charges for consumption exceeding threshold limit / use of electricity exclusively during night hours) at any time shall be limited to the lowest Energy Charge of Rs. 4.45 per kVAh.
Thus ―voltage rebate‖ was included in the cap of TOD for the first time in this tariff order of 2019-20 and during night hours all the consumers on 11 KV, 33/66 KV and 132/220 KV were clubbed together at the same tariff of Rs 4.45/KVAH for 8 hours of night period during 8 months of the year. With this, while the Energy Charge was increased by 11 paisa per unit for 16 hours of day and peak hours under Tariff Order 2019-20, the Energy Charge for 66 KV consumers was increased from 4.03 to 4.45 i.e. an increase of 0.42 paisa per unit and net increase of 0.31 paisa per unit. Thus, the action of PSERC has withdrawn the benefit of Voltage Rebate during night hours which was granted by the PSERC itself as per directions of the APTEL and as per the provisions of Electricity Act 2003. PSPCL was granting voltage rebate of 3% to 66 KV consumers earlier considering the investments on 66 KV substation incurred by the consumer and the savings of transformation losses of 66/11 KV borne by the consumers. However, this HT rebate was withdrawn w.e.f. 1.4.2010 in the Tariff Order 2010-11. Consumers having set up 66 KV infrastructures felt aggrieved and approached PSERC, GOP and APTEL for continuation of voltage rebate or aligning the Tariff with ―Voltage wise cost of supply‖ as per Electricity Act 2003. In compliance with the orders of APTEL, PSERC, in the Tariff Order 2012-13 directed PSPCL as under: -- “6.11 Cost of Supply and Cross Subsidy
The Hon’ble Appellate Tribunal for Electricity while delivering its judgment on January 11, 2012, in various Appeals has directed the Commission to determine the category-wise Cost of supply. PSPCL, in the ARR Petition for FY 2012-13, has submitted that it has engaged an agency (TERI) on September 23, 2010 to conduct cost of supply study and TERI has submitted the draft report on methodology to arrive at cost of service which is to be finalized by the committee constituted by PSPCL for this purpose. The Commission directs PSPCL to expedite finalization of the report
and submit the findings of the study to the Commission at the earliest. Thereafter, the Commission will consider and decide the issue.” Accordingly PSPCL submitted the study report of TERI which was deliberated, discussed with stake holders and PSERC ordered in Tariff Order 2013-14 to grant voltage rebate of 20 paisa/unit which was later increased to 25 paisa per unit in the Tariff Order 2014-15. Therefore, 66 KV industrial consumers submit that it is not correct to merge the voltage rebate with the minimum tariff of Rs.4.45/unit since it was granted due to persisting difference of Cost of Supply in the previous years, which is still continuing. Further, it was granted as per the directions of APTEL and as per provisions of Electricity Act 2003, the same should be separately given to the consumers who draw power on 66 KV voltage level. In addition, the voltage rebate be increased appropriately to align it with the difference in Cost of Supply as brought out above. We request that HT rebate be restored for night hours as was being granted during 2018-19 so that industry can continue to operate in Punjab and remain viable. Since 2014-15, the industry is requesting the PSERC to increase the voltage rebate further in line with provisions of Electricity Act 2003 to align it with the difference of cost of supply on 11 KV and 66 KV voltage levels as is being determined by the Commission in the tariff orders but the action of PSERC as per TO 2019-20 has acted reversely and withdrawn the same for 8 hours i.e. for 33% period. Thus the order was completely unfavorable to the industrial power consumers in the State. Further, the Commission in its tariff order FY 2019-20 has also worked out the cost of supply for 66 and 11 KV industrial consumers as Rs 6.22/unit and Rs 6.86/unit i.e. a difference of Rs 0.64/unit against which we are being given the voltage rebate of only Rs 0.19/unit [(0.25* 16 hours *8 months + 0.25*24 hours * 4 months)/ (24 hours * 12 months)]. It is also added that there was no proposal from PSPCL in the ARR to merge Voltage Rebate in the cap nor any proposal was indicated by PSERC during the Public Hearings. GOP had confirmed that the subsidy will continue to be paid as per pattern of 2018-19 and thus there was no request from
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GOP for any such merger. Even the tariff order does not give any reasoning/speaking order for the merger and therefore the action of PSERC lacks transparency. PSPCL’s Reply: It was clarified by Department of Power, GOP vide its letter dated 09.08.2018 that in no case Tariff below Rs. 4.23 per KVAh for FY 2017-18 and Rs. 4.28 per KVAh for FY 2018-19 as capped by PSERC be charged. Regarding the matter of capping of Rs. 4.45 per unit and HT rebate, the Commission in its Order dated 13.09.19 in Review Petition No. 5 of 2019 filed by industrial consumers, has decided that concessional/ discounted tariff can be provided subject to certain limitations only, it was decided to limit the same to Rs. 4.45 per kVAh, being the marginal cost to generate additional energy. Charging tariff below this cost would have resulted in a revenue gap which would have defeated the purpose of giving concessional tariff. Further, the cumulative effect of ToD rebate and Voltage rebates on the Energy Charges including reduced Charges for consumption exceeding threshold limit/ use of electricity exclusively during night hours at any time has been limited to the lowest Energy Charge of Rs. 4.45 per kVAh. This limitation comes into effect only in case they opt to consume power in excess of the threshold consumption (i.e. the consumption in excess of maximum annual consumption in any of the last two financial years) and/or exclusively during night hours. Commission’s View: The suggestion is noted.
Objection No.15: Focal Point Industries Association
Issue No. 1: Improve Working& Efficiency PSPCL should improve its working/ efficiency and reduce avoidable losses. Loss to the PSPCL is due to their inefficient working/ pilferage which leads to increase in cost of electricity generation and same is ultimately recovered from the consumers by increasing Tariff every year. It is suggested that PSPCL should improve its working with help of experts and minimise its losses. If other States can supply power at cheaper rates, then why not PSPCL? Study should be made. Increasing rate every year is no solution. PSPCL’s Reply: PSPCL always endeavors for improvement in its working and reduction in its T&D and AT&C
losses. To achieve this concerted effort have been made by PSPCL from past many years resulting into improvement in technical as well as commercial parameters since its inception.
As per provisional figures of PSPCL for FY 2018-19, PSPCL has achieved 14.11% T&D losses and 11.32% Distribution Losses by the end of March-2019 which have been decreased by -2.23% and -2.87% respectively from FY 2017-18. The overall collection efficiency of PSPCL has also been increased by 5.27% from last year i.e 93.02% to 98.29% resulting into achievement of 12.83% AT&C losses against target of 14% for FY 2018-19 under UDAY scheme. PSPCL is striving hard for further reduction of T&D losses by undertaking various loss reduction schemes.
PSPCL had taken the main initiative to crack down the power theft during FY 2018-19. To curb the energy theft 16.58 lac connections were checked by PSPCL during FY 2018-19. Out of which 1.41 lac cases of theft and UUE were detected and penalties to the tune of Rs.179.29 Cr. were imposed on consumers which were found indulging in power theft.
Similarly, During FY 2019-20, upto December 2019, 8,59,528 nos. connections have been checked by distribution organization and penalties of Rs. 89.29 Cr. have been imposed on 65433 nos. power thieves.
Commission’s view: The objector may note the response of PSPCL.
Issue No.2: Free Power to Farmers Punjab Government is providing Free Electricity to the farmers irrespective of their land holding and the burden of the same is passed on to the other consumers. Giving free electricity to them also leads to misuse of electricity especially it effects underground water level because misuse of tube wells. It is suggested that free electricity should be given only to the farmers up to the Land Holding of 5 (five) acres. PSPCL’s Reply: This issue relates to the Government of Punjab and is not related to the Tariff Petition filed. Commission’s View: It is the prerogative of the Govt. to decide matters regarding subsidy.
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Issue No.3: Compensation to the Private supplier of Electricity The PSPCL has made wrong agreement with the private supplier of electricity. PSPCL is paying compensation to the private supplier even against Non-requirement/Non-purchase of electricity. The compensation paid to the private supplier is ultimately recovered from the consumers by increasing the tariff. The State like Gujarat is not paying such type of charges. The consumers of Punjab are suffering due to the mistake made by the PSPCL officials. It is suggested that auditing of the private supplier be initiated so that the private supplier improve their efficiency & reduce the price of the electricity supplied to PSPCL. PSPCL’s Reply: This issue is not related to the Tariff Petition filed and will be dealt separately. Commission’s View: The Commission notes the concern of the objector. Issue No.4: More Suppliers of Electricity In order to curb the monopolistic status of PSPCL, the number of suppliers should be increased which will lead to healthy competition. Quality of power supply will also improve. Presently, PSPCL is passing on cost of their inefficiency to consumers due to Monopoly business. PSPCL’s Reply: This issue is not related to the Tariff Petition filed and will be dealt separately. Commission’s View: The issue is not related to Tariff Petition. Issue No. 5: Rate Revisions from Retrospective dates PSPCL is implementing & demanding rate revisions from retrospective date whereas it should be made effective from the current month billing to follow fair business practice. PSPCL’s Reply: Tariff Order is released by the Commission. Commission’s View: The suggestion is noted. Objection No.16: Punjab Steel Forging and Agro Industries Objection No.18: Joginder Casting Private Limited Objection No.19: Oasis Enterprises Private Limited Objection No.28: Bansal Alloys & Metal Private Limited Objection No.36: Madhav Alloys Limited Objection No. 37: Hansco Iron Steel Private Limited Issue The Commission in its tariff order for FY 2019-2020 had changed the terms of TOD tariff and made it un-favorable to the consumers drawing power at 66/132/220KV voltage level. The minimum tariff has been fixed as Rs.4.45/unit under TOD tariff including the high voltage rebate given to the industry. In the previous year FY2018-19, The minimum power tariff was Rs.4.28/unit excluding the voltage rebate, which is 25 paise/unit. For 2019-20, not only the minimum tariff was increased by 17paisa/unit, but the voltage rebate of 25 paisa per unit was merged with it, increasing the night tariff 66 KV consumers by 42 paisa. Thus, the night tariff for 8 months of the year was same for all LS consumers drawing power at 11/33/66/132/220 KV voltage level. It is accepted fact that voltage rebate is not a concession or incentive but compensation of investment on High voltage Substation and savings accruing to PSPCL on transformation losses. HT rebate is being granted in accordance with the Electricity Act 2003 which provides that tariff should be in line with voltage wise cost of supply. Hon'ble APTEL has upheld this provision and Voltage rebate was also granted to Punjab consumers in view of the numerous orders issued by APTEL in this regard. InTariffOrderFY2013-14, the Commission accepted that cost of supply for HT consumers is lower and accordingly given relief to the consumers drawing power at higher voltage. Due to the inability to charge cost of supply based tariff, voltage rebate is given to partially compensate such consumers.
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Further, the Commission in its tariff order FY2019-20 also calculated the cost of supply for 11 KV and 66 KV industrial consumers and the cross subsidy based on cost of supply. While the Cost of supply for11KVConsumershas been worked out as 6.86/unit, it is 6.22 per unit for 66 KV consumers. Thus there is difference 64 paisa per unit whereas HT rebate was being given as only 25 paisa per unit which has now been reduced to17 paisa per unit. Similarly, the cross subsidy paid by 66 KV consumers is 14.58%, which is much more than CS levels of 11 KV and LT consumers. Therefore, the action to merge the voltage rebate with the minimum tariff of Rs.4.45/unitis against the provisions of the Act, orders of the Hon'ble APTEL and also against the principles accepted by the Commission while granting this rebate and the same need to be restored to the consumers who draw power on 66 KV system. It is also submitted that there were no directions from GOP which is bearing the subsidy for grant of Energy charge of Rs 5/- per unit to industry as GOP had consented to continue the subsidy as per pattern of 2018-19. There was no demand from PSPCL in the ARR to this effect and the proposal was never put up in the Public domain. The tariff order was also silent as to the reasons requiring this action. Thus the action of the Commission lacked conviction. It is therefore requested that the matter of merging HT rebate in minimum tariff slab of TOD on urgent basis be reconsidered and the HT rebate may please be restored in the Tariff Order 2020-21 so that industry can continue to operate in Punjab and remain viable. PSPCL’s Reply: It is intimated that determination of tariff, rebate or surcharge to any category is prerogative of the Commission as per Electricity Act, 2003 on the basis of data supplied by PSPCL in the ARR, keeping the interest of stakeholders in view. Regarding the matter of capping of Rs. 4.45 per unit and HT rebate, the Commission in its Order dated 13.09.19 in Review Petition No. 5 of 2019 filed by industrial consumers, has decided that concessional/ discounted tariff can be provided subject to certain limitations only, it was decided to limit the same to Rs. 4.45 per kVAh, being only the marginal cost to generate additional energy. Charging tariff below this cost would have resulted in uneconomical rate of supply which would have defeated the purpose of giving concessional tariff. Furrther, the cumulative effect of ToD rebate and Voltage rebates on the Energy Charges including reduced Charges for consumption exceeding threshold limit/ use of electricity exclusively during night hours at any time has been limited to the lowest Energy Charge of Rs. 4.45 per kVAh. This limitation comes into effect only in case they opt to consume power in excess of the threshold consumption (i.e. the consumption in excess of maximum annual consumption in any of the last two financial years) and/or exclusively during night hours. Commission’s View: The objection is noted. Objection No.17: Steel Furnace Association of India. Issue No.1: Balance sheets and ARR are designed for two different purposes and should not
be mixed The Board is regularly filing its revised revenue requirement based on actual Balance Sheet figures without excluding the portion of expenditure disallowed by the Commission based on certain provisions of the Act while passing Tariff Order. Therefore, the Board should be directed to file a separate Income & Expenditure Account along with Balance Sheet based on costs as approved by the Commission from year to year so that a clear picture may emerge and a comparison may be drawn between the actual expenditure and approved expenditure of the Board. PSPCL’s Reply: ARR is being prepared and submitted before the Commission as per the regulatory principles set by the Commission. The methodology adopted by PSPCL for truing up for FY 2018-19, RE for FY 2019-20 and MYT petition for FY 2020-21 to FY 2022-23 is very well elaborated in the Petition and is in line with the regulatory principles set by the Commission and PSERC MYT Regulations. Commission’s View: The Commission determines the claims of PSPCL in line with the PSERC MYT Regulations. Issue No. 2: Subsidized agriculture consumption to be capped The power supplied to agriculture sector has been growing consistently at very high rate. Providing the power at the subsidized rate, which is far less than the actual cost of power purchase) will lead to serious financial crisis for the Board and ultimately seriously affects the interest of industrial consumers in the State, which are already reeling under recession. Therefore, it is imperative to cap the maximum amount of power year wise & approved by the commission that can be supplied to
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agriculture sector at subsidized rate inclusive of additional connection projected in a year. PSPCL’s Reply: Provision of subsidy is the prerogative of the Government of Punjab Commission’s View: Subsidy is Government‘s prerogative. Issue No. 3: Diversion of funds The diversion of funds happened in the past need to be continuously updated based on new facts and information. Such exercise is required to ensure that no more funds raised for capital purpose are diverted toward meeting revenue requirement of the Board. For instant, the Commission has been disapproving the excess expenses claimed by the Board in its previous ARRs, which were funded from somewhere by the Board. For illustration, PSPCL in its replies to deficiencies to PSERC has admitted that excess capital expenditure was incurred to the tune of Rs.2846.33 Crore by diversion of funds by raising working capital loans during FY2011-17. It is submitted to the Commission to ensure that such expenses are not claimed in the ARR of the Board. A detail investigation in this regard is required to work out the exact amount of diversion to be disallowed for ARR purpose to safeguard the interest of the consumers. PSPCL’s Reply: Please refer to reply on Issue No.(1) above. Commission’s View: Interest on working capital is allowed in line with the PSERC MYT Regulations after prudence check on normative basis. Issue No.4: Sale of surplus power The detailed information of surplus power as being provided in the tariff petitions of previous years and even in earlier tariff orders by the Commission is not being provided. Such details include quantum of surplus power, plant wise fixed cost surrender, as part of purchase cost, quantity sold out of State at different rates and other details as the commission may deemed fit. It is prayed to the Commission that the complete information related to surplus power need to be provided by PSPCL during public hearing and complete Profit and loss account of surrender power may be given in tariff order as well. This issue is dealt in Madhya Pradesh Tariff Order FY 2018-19. Power surrendered / to be surrendered PSPCL has worked out the year wise surrender of power along with quantum and cost of surrender and the same is extracted as under:-
Year Surrendered Quantum (MUs) Fixed charges (Rs Crore)
2018-19 8570.94 976.86
2019-20 11616,44 1374.93
2020-21 14499.23 1761.78
2021-22 13547.97 1626.90
2022-23 11533.65 1359.86
The increase in quantum of surrendered power indicates that there are some PPAs already entered in to by PSPCL, which will be commissioned during 2019-20 to 2021-22. PSPCL has also disclosed that they will be receiving power from Tapovan Vishnugad HEP, Vishnugad Pialkoti HEP, Parbati II HEP and Singrauli III. In spite of being surplus in Power, PSPCL is adding new projects to its kitty for purchase of power under long term contracts binding the consumers of the State to pay for the fixed costs for such projects. The excess capacity will continue till around 2027-28 if no fresh capacity addition takes place in these years. However, in view of additional capacity coming up under roof top solar, Solar IPPs, wind capacity already contracted and other RE based projects for meeting RPO and energy conservation / Demand side management measures, the period may further extend to 2029-30. PSPCL is surplus in power and PSERC had directed PSPCL to review all PPAs in Tariff 2013-14. It is strange that in spite of such situation and in spite of projected increase in consumption over the years, the idle capacity is increasing. PSPCL has commitments to purchase power from power plants to be commissioned in 2020-21. We request PSERC to take up matter with concerned authorities to ensure that such PPAs should be cancelled and no burden of fixed cost is levied on consumers of the State. PSPCL’s Reply: Surrendered quantum is showing decreasing trend in upcoming years. Further, PSPCL signed PPAs towards Tapovan Vishnugarh HEP on 29.12.2010, towards Parbati II HEP on 02.11.2002, for
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Singrauli III on 29.12.2010 and towards Vishnugarh Pipalkoti HEP on 05.06.2007. Moreover, the petition regarding approval of long term PPAs signed by PSPCL has already been submitted by PSPCL before PSERC. Commission’s View: The objector may note the response of PSPCL. Issue No.5: Voltage Rebate for 66 KV consumers: T&D losses for 66 KV consumers as per open access regulations worked out in TO 2018-19 are 4.28% for 2018-19 against total T&D losses of 14%. In addition to T&D loss, the 66 KV consumer has to be compensated for the investment and operating cost of the 66/11 KV transformer and switchyard. The voltage wise cost of supply worked out by PSPCL for 2019-20 for 66 KV industry is Rs 5.77 and for 11 KV industry as Rs 6.59 indicating a difference of 72 paisa per unit. However the rebate being given to consumers connected at 66 KV is only 25 paisa per unit. Voltage rebate need to be enhanced appropriately and fixed in percentage terms as per pattern of Voltage Surcharge being charged on percentage. Since Voltage Surcharge for consumers eligible for 66 KV but getting supply at 11 KV have to pay 10% Voltage Surcharge, Similarly, Voltage rebate for 66 KV consumers should also be 10%. PSPCL’s Reply: Determination of tariff, rebate or surcharge to any category is prerogative of the Commission as per Electricity Act, 2003 on the basis of data supplied by PSPCL in the ARR, keeping the interest of stakeholders in view. Regarding the matter of capping of Rs. 4.45 per unit and HT rebate, the Commission in its Order dated 13.09.19 in Review Petition No. 5 of 2019 filed by industrial consumers, has decided that concessional/ discounted tariff can be provided subject to certain limitations only, it was decided to limit the same to Rs. 4.45 per kVAh, being only the marginal cost to generate additional energy. Charging tariff below this cost would have resulted in uneconomical rate of supply.Further, the cumulative effect of ToD rebate and Voltage rebates on the Energy Charges including reduced Charges for consumption exceeding threshold limit/ use of electricity exclusively during night hours at any time has been limited to the lowest Energy Charge of Rs. 4.45 per kVAh. This limitation comes into effect only in case they opt to consume power in excess of the threshold consumption (i.e. the consumption in excess of maximum annual consumption in any of the last two financial years) and/or exclusively during night hours. Commission’s View: The suggestion is noted. Issue No. 6: Fix industrial Tariff as per category wise cost of supply The Board has submitted the category wise cost of supply. We appreciate the Board on this account to come up category wise cost of supply as well as related cross subsidy earned/given to each segment of consumers. Therefore, it is also prayed to the commission to reduce the cross-subsidy burden on LS consumers and fix the tariff based on category wise cost of supply, tariff of the LS consumers may be rationalized and tariff for subsidized class may be increased. It is also submitted that category wise cost of supply basis has been fixed many years back. It is submitted that the same should be revisited to revise the category wise cost of supply. PSPCL’s Reply: Determination of tariff, rebate or surcharge to any category is prerogative of the Commission as per Electricity Act, 2003 on the basis of data supplied by PSPCL in the ARR, keeping the interest of stakeholders in view. Commission’s View: The suggestion is noted. Issue No.7: T&D losses We would like to appreciate reduction in T&D losses achieved by PSPCL, however, we request the commission to verify the same independently. It is also important to note that T&D losses were claimed for FY 2018-19 as 14.17% while the agriculture consumption is increased from 11111MU against approved by PSERC to11187.39 MU by changing the assumption for working out consumption of power in agriculture sector. The assumption regarding agriculture supply through mixed feeder is changed mainly in Kandi area. It is stated in the ARR that the assumption of 30% supply through mixed feeder as assumed by PSERC in previous tariff order (FY18-19) is not followed and instead 45% of total supply is taken as mixed supply. It looks that by increasing agriculture consumption, lower T&D are claimed. It is our submission that the Commission may kindly look into the matter and incentive be passed only if it actual T&D loss reduction is achieved as per PSERC method. Meanwhile, PSPCL may be asked
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to finish the work of separating the supply of power to agriculture from mixed feeders to independent feeders in fixed time period and not in ―Future‖ as claimed by Discom. T&D losses are very high in selected regions as also pointed out by PSERC time and again. It is submitted that same also need to be reduced drastically. PSPCL’s Reply: With regard to the agricultural consumption of Kandi area feeders, it is submitted that the detailed methodology of computing AP consumption (45%) of Kandi area feeders has been submitted in the petition. Further, the T&D losses have been calculated as per the Energy Balance prepared in the petition. Commission’s View: Refer para No. 2.3 of this Tariff Order. Issue No. 8: Power purchase cost The power purchase cost should be subject to approved T&D loss by PSERC for FY 2018-19 onwards. In the ARR, it is mentioned that power cost was approved at Rs.4.25/unit against which actual power purchase cost is Rs.4.37/unit. It also covers previous years expenses of Rs.350.08 Crore. Previous years expenses should be dealt separately and no expenses can be allowed in ARR simply due to reason that it is actually incurred. For part of ARR, it should be approved also by PSERC. Therefore, only after taking out of such exaggeration, the power cost should be approved. Further, in the past, power purchase cost separately shows amount of fixed charges paid for surrender of power. However, no separate information on the same is provided for. In the absence of the same, it is difficult to find out as how much is the actual cost of power per unit of power purchased from IIPs in Punjab. Based on installed capacity and dedicated to PSPCL (100% in case of Rajpura and Talwandi Sabo) and actual power purchase units from these plants need to be verified and separated calculated and shown. In the absence of such information, it is difficult to work out a price at which such power can be sold, if any opportunities arise. PSPCL is bearing the fixed charges of Anta and Auriya power stations but the generation at these plants is very costly. PPAs for these stations were executed on 31.10.1994. The useful life of the gas based projects is 25 years and thus PPA term is already over by 30.10.2019. PSPCL and GOP should clearly intimate the MOP and NTPC that it will not extend the PPA for these two stations. PSPCL may associate Haryana, Himachal and other beneficiaries of these plants which are also surplus in power. The matter needs to be flagged in CEA also that these plants may be retired after their useful life is over. This will save PSPCL 71 Cr of fixed charges and 133 MW of contracted capacity. PSPCL’s Reply: The previous year payments in respect of central sector generating stations have been made towards the bills raised by various firms for previous period on account of revised energy charges, capacity charges, water usages charges, RLDC charges etc. on the basis of various CERC orders revising AFCs. However, previous year Charges against Sasan Power Ltd for FY 2018-19 and 2019-20 (H1) accounts towards various Supplementary bills raised by Sasan Power Ltd due to certain Change in Law events as allowed by CERC, APTEL and SCI. Further, previous year payments towards GVK has been made during FY 2018-19 on account of revised calculation of monthly bills in view of PSERC order dated 06.03.19 & 27.05.19 for FY 16-17 , FY 17-18 and during FY 2019-20 H1 previous year payments has been made on account of reduced capacity charges for FY 17-18 as per PSERC order 12.9.19 in pet 37 of 2018 & revised calculation of monthly bills in view of PSERC order dated 06.03.19 & 27.05.19 for FY12-13, FY 16-17. In case of Mallana-II HEP, Previous year payments has been made on account of revised calculation of monthly bills in view of PSERC order dated 11.02.19 for FY 14-15,15-16,16-17,17-18. The information towards surrender of power and the fixed costs incurred on the same has already been submitted against MYT format D2 for FY 2018-19 to FY 2022-23. As per PPAs signed between NTPC & PSEB for Anta & Auriya, the duration of the agreement shall remain operative upto 31.10.97 provided that this agreement may be mutually extended, renewed or replaced by another agreement such terms and for such further period as the parties mutually agree. In case Bulk power Customer(s) continue to get power from NTPC-stations even after expiry of this agreement without further renewal or formal extension thereof, then all the provision of agreement shall continue to operate till this agreement is formally renewed, extended or replaced. Further, MoP, GoI has been requested to reallocate PSPCL share of power from Anta &Auriya generating stations to some other needy States in India. Moreover, the matter regarding the opinion from AG Punjab towards the issue of payment of fixed charges to M/s NTPC even after the lapse of contract period is under process
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Commission’s View: The objector may note the response of PSPCL. Issue No. 9: Excess capital expenditure incurred than approved PSPCL has claimed higher capital expenditure of Rs. 1992.23 Crore against 1700 Crore approved by the Commission in its tariff order FY 2019. We have some observations in this regard
i. As per audited annual accounts for the period 1/4/18 to 31/3/2019, consumer contribution has increased from Rs. 2635 Crore in FY2018 to Rs. 2953 Crore in FY2019 an increase of Rs. 318 Crore. It is to be seen that whether the same is reduced from the capital expenditure requirement of PSPCL for the year FY 2018-19 or not. It is our submission that the same should be reduced.
ii. In hydel project construction, Rs. 137.30 Crore are shown as expenditure for FY19 in the ARR for FY2019. It is also mentioned in previous petition that most of the funds are spent on Shahpur Kandi project. In our view, Shahpurkandi project is an irrigation cum power project. If it is so, then the total capital expenditure is to be divided between irrigation department of the Punjab Government and PSPCL suitably. As per a news-report, the project is aimed to produce 206 MW power and irrigate 37173-hectare land. The civil work is to be done by irrigation department of Punjab Govt. and PSPCL has to do only electro and mechanical work only as per Punjab Government notification. Therefore, it is to be ensured that a fair allocation of total expenditure is done between Irrigation department and PSPCL( ref. Times of India, 9
th
Sept 2018). iii. The capital expenditure in case of GNDTP in FY 2018-19 is towards pending payment of
repair and maintenance of FY 2012-2017. First, it is prior period expenses not be dealt here and second capital expenditure cannot be taken for revenue items. Therefore, all such anomalies need to be isolated before considering ARR for approval purpose.
iv. The capital expenditure in transmission and distribution work is also shown above approved level, which also need close scrutiny. Taken together, it is our submission that only such cost of such capital expenditure in terms of depreciation, interest and finance charge etc. should be passed on to the consumers of electricity in the State, for which benefits start flowing and remaining should be not be allowed as a part of the ARR. The same approach needs to be adopted for FY2019-20 onwards.
PSPCL’s Reply: i. The consumer contribution has been reduced from the capital expenditure. ii. With regard to the claim of Rs.137.30 Crore on account of Shahpur kandi Power project, it
is submitted that only the expenses on account of power project has been claimed in the Capital Expenditure.
iii. The capital expenditure in GNDTP in FY 2018-19 has been claimed on account of pending payments towards Renovation & Modernization and not repair and maintenance.
iv. PSPCL requests the Commission to approve the capital expenditure as submitted in the petition
Commission’s View: The objector may note the response of PSPCL. The Commission allows the Capital Expenditure in line with PSERC Regulations, after prudence check. Issue No.10: Depreciation charges Though, we do not wish to comment specific on depreciation charges claimed by PSPCL for FY2018-19 and FY2020-23. However, we would like to submit that the Commission may kindly look into the matter of those fixed assets which have completed their life. Such assets need to be identified and shown separately and no depreciation on such assets to be allowed for ARR determination purpose. PSPCL’s Reply: The query has been addressed to the Commission. Commission’s View: Depreciation is provided in line with PSERC MYT Regulations. Issue No.11: High interest and finance charges PSPCL has claimed actual interest and finance charges of Rs. 2113.14 Crore on loan amount of Rs. 25000 Crore for FY2018-19. It also includes interest of Rs. 1306.95 Crore on GOP Loan (UDAY Bond) of Rs.15628.26 Crore. First of all, the loan taken for unapproved purpose should be taken out of this loan amount and no
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interest is to be provided on the same. Thereafter, the loan from Government (Uday Bond) of Rs.15628.26 cCrore also needs to be divided between equity and grant. It is estimated about Rs.11728 Crore will be in form of grant and no interest burden of the same should come to ARR. Regarding return on equity of about Rs.3900 Crore should be treated as equity and return on the same should be given only if the equity is injected in cash in the PSPCL otherwise there is no logic of giving return on equity on this amount also. In the light of above, interest cost should be approved accordingly, which would be substantial lower than interest claimed by them. It is absolutely wrong on account of PSPCL to ask interest on UDAY loan. The viability of PSPCL is to be ensured by removing the UDAY loan from books and not by giving interest on the same. It is also pertinent to note that PSPCL has shown other debits of Rs.215 Crore including bad and doubtful debts. It is submitted that bad and doubtful debts are allowed to 2% of sale and subject to the actually bad debt written off. Therefore, such expenses should be restricted to the actual bad-debt written off and subject to 2% of sale or as provided in the regulations. PSPCL’s Reply: Government of Punjab will be converting the UDAY loans of Rs.15,628 Crore into equity. As per PSERC MYT Regulations, PSPCL is entitled to return on equity of 15.50% on the equity amount. Further, the other debits Rs. 215 Crore has been claimed as per actual accounts of PSPCL and within the limit (subject to a maximum of 1% of annual sales revenue excluding subsidy) specified under regulation no. 47 "Bad and Doubtful Debts and other Debits" of PSERC. Commission’s View: Interest & Finance charges and bad & doubtful debts are allowed in line with PSERC MYT Regulations. Issue No.12: Return on equity PSPCL has equity base of Rs 6081.43 Cr as per FRP approved by GOP while PSEB was bifurcated into PSPCL and PSTCL on 16.4.2010. Though the matter regarding conversion of Consumer Contribution and Govt Subsidies into equity has not been approved by APTEL, still the matter is under litigation in Supreme Court and PSERC is granting ROE on Rs 6081.43 Cr. APTEL had observed that the Govt can hold any amount as equity in PSPCL (and PSTCL) but ROE needs to be granted only on actually subscribed and paid up equity only i.e. cash money which has been infused need to be counted as equity for the purpose of ROE. Subsequently, MOP, GOI introduced UDAY scheme for stressed power sector and PSPCL, GOP and MOP entered into a tripartite agreement as per which PSPCL loans of Rs 15628.26 Cr were taken over by GOP through issue of SLR bonds by banks in the name of GOP and loans were taken off the books of PSPCL. However, instead of paying the interest on such loans from the State govt funds, GOP continued to recover the interest on such loans from PSPCL. The amount paid by PSPCL is 1307 Cr in 2017-18 and 2018-19 and Rs 867 Cr for 9 months of 2019-20. The rate of interest works out to 8.4% per year. Since the UDAY scheme is up to 31.3.2020, PSPCL has proposed in Para 4.17 of ARR to convert the loan amount of Rs 15628.26 Cr as GOP equity in PSPCL thereby increasing GOP equity from 6081.43 cr to 21709.69 cr. It is also proposed to recover ROE on this loan converted equity amount of Rs 15628.26 @ 15.90% which works out to Rs 2485 Cr. Thus, by simply maneuvering the entry of loan amount to equity, consumers will be asked to pay 2485 Cr instead of 1307 cr i.e. an increase of Rs 1178 cr requiring increase of tariff of about 23 paisa per unit across the board on this account alone. Consumers will have to pay 28 paisa per unit including taxes for GOP. This is clearly against the interest of the consumers and PSERC should not allow it. PSPCL’s Reply: Government of Punjab will be converting the UDAY loans of Rs.15,628 Crores into equity. As per PSERC MYT Regulations PSPCL is entitled to return on equity of 15.50% on the equity amount. Commission’s View: Return on Equity is determined by the Commission in-line with PSERC MYT Regulations after prudence check. Issue No.13: Employee cost We have reiterated many times that employee cost has been growing consistently and also acknowledge that the same cannot be capped due to manifold reasons. This is our submission that only reasonable cost be passed through ARR and remaining must be taken over by Government as PSPCL employees are government employees and must get their dues as per Government rules and regulation, but the same should not be used as an excuse to increase the ARR and cost of power for consumers.
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PSPCL’s Reply: The employee costs have been claimed as per PSERC MYT Regulations and PSPCL requests the Commission to allow the employee costs accordingly. Commission’s View: Employee cost is allowed by the Commission in-line with Regulation-26 of PSERC MYT Regulations. Issue No.14: Subsidy and interest thereon due from government not fully accounted for PSPCL has not separately worked out the liability of GOP for nonpayment of subsidy and is also manipulating the interest on delayed payment of subsidy of GOP by accounting it in Non-Tariff Income thereby loading it on the consumers rather than seeking recovery of the same from GOP. The GOP subsidy and interest on the delayed payments need to be charged from GOP. PSPCL’s Reply: PSPCL avails the working capital loans to meet with its working capital requirement due to non-receipt of Government dues, non-receipt of timely subsidy from GOP and due to cash losses of PSPCL.PSPCL has been claiming interest charges on the basis of actual interest paid against the loans availed by PSPCL, whereas the Commission allows the same on normative basis. On the other hand, the Commission allows interest on delayed payment of subsidy by GOP to PSPCL. As the interest on working capital loans raised to meet the cash gap due to delayed payment of subsidy is not allowed by the PSERC on actual basis so the interest allowed to be recoverable from GOP on delayed payment of subsidy should also not be treated as income. As such, PSPCL has reduced this amount from the non-tariff income and there is no manipulation. Hence, it is requested to allow it. Commission’s View: The objector may note the response of PSPCL. Non Tariff income is allowed in line with PSERC MYT Regulations after prudence check. Issue No.15: Separate cost of shut down plant-Bhatinda Total cost of Bhatinda plant be segregated including work, maintenance and employee cost etc. and should not be allowed as a part of ARR and passed through to electricity consumers of the State. For example, PSPCL has mentioned that Rs.39.89 Crore is the expenditure up to November 2018 on employee cost of Bhatinda plant. Such cost should not be passed on to ARR and must be dealt separately. PSPCL has also not informed about the disposal of two units of GGSSTP Ropar. PSPCL projections for GGSSTP Ropar are extracted as under:-
Year 2017-18 (TU) 2018-19 2019-20 2020-21
(Table No) of TO 19-20
Table 26 of MYT ARR
Table 53 of MYT ARR
Table 86 of MYT ARR
Employee cost 306.18 (2.19) 335.51 359.81 381.89
R&M+A&G 61.05 (2.26) 54.04 34.13 49.06
Depreciation 19.46 (2.31) 34.84 35.14 35.72
ROE 70.16 (2.40) 83.95 83.95 86.41
The above shows that in spite of having retired 2 units, the expenditure is being booked which needs to be disallowed. Assets of two units be sold immediately and the sale proceeds of 2 units of Ropar and 4 units of Bhatinda units be used to repay the capital loans so that consumer get some relief. PSPCL’s Reply: With regard to GNDTP employee cost, deployed manpower of 933 in 31.12.2017 has been reduced to 240 ending 31.01.2020 and is further being reduced to 160 during Feb‘2020 which is the bare minimum strength mandatory for the effective and cost-effective disposal of GNDTP Assets. Further, with regard to GGSSTP Ropar, it is submitted that process for disposal of 2 units of GGSSTP, Ropar which have been retired w.e.f. 01.01.2018 by the decision of Punjab Govt. is already under process. Work Order has been issued for assessing the saleable value of the Units. It is also submitted that since 4 Units of GGSSTP, Ropar are still operational, as such only equipment‘s installed on Units 1 & 2 will be disposed of such land used for Units1 &2 cannot be disposed of as common auxiliaries/system of all the six units is installed spanning over this land. Presently no manpower is deployed exclusively for Units 1 & 2 of GGSSTP, Ropar, however manpower from Stage 2 & 3 Units is used for carrying out the preservation of the boilers & for condition monitoring of the equipment‘s of Stage-I Units at regular intervals of time. Commission’s View: Refer para No. 2.15 of this Tariff Order.
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Issue No.16: Overdue receivables As per note 41 in balance-sheet FY 2018-19 given with ARR, the outstanding amount to Govt. office was 431.02 Crore as on 30/9/2015, which increased to Rs.1417 Crore. We fully support PSERC suggestion that prepaid meters to be installed in government offices. However, as far as outstanding from Government office is concerned (Rs.1417 Crore), the same should be deducted from the Government loans given to PSPCL or the Government equity be reduced by Rs.1417 Crore plus due interest for delay payments and return on equity be reduced by the same amount. This should be left to the government as how to deals with these outstanding amount of various government offices. Similarly, it is also humbly suggested that a detailed MIS system to be developed to track such accounts where power is regularly supplied but payment is not received. Such account holders may be pursued suitably to pay due bill amount to PSPCL. PSPCL’s Reply: The issue is not related to the Tariff petition filed by PSPCL and shall be dealt separately. Commission’s View: PSPCL needs to take appropriate steps to recover the overdue receivables. Issue No.17: Revenue Gap
Thus, the Cumulative gap works out to 11179.66 Cr against the Net ARR 2019-20 figure of 36156.38 Cr which is 30.92%. In the light of above submission made, there would be no or negligible deficit will be there for at least next couple of years and same PSPCL should meet through internal efficiency measures. PSPCL’s Reply: ARR is being prepared and submitted before the Commission as per the regulatory principles set by the Commission. The methodology adopted by PSPCL for truing up for FY 2018-19, RE for FY 2019-20 and MYT petition for FY 2020-21 to FY 2022-23 is very well elaborated in the Petition and is in line with the regulatory principles set by the Commission and PSERC MYT Regulations. Commission’s View: Revenue gap is determined by the Commission after prudence check of ARR petition and as per PSERC MYT Regulations. Issue No.18: Security (Consumption) Presently interest on Security is at RBI rate which is only around 5-6% whereas we have to take working capital loan at 12-13%. There is provision of pre-paid meter in Supply Code. PSPCL should spell out the road map for introducing Pre-Paid meters for industry. If PSPCL is not ready, then consumers be allowed the facility to submit Bank Guarantee for Security (Consumption) and the cash deposited for Security be refunded PSPCL’s Reply: The issue is not related to the Tariff petition filed by PSPCL and shall be dealt separately.
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Commission’s View: The objector may note the response of PSPCL. Issue No.19 For 2020-21, Projected net revenue is Rs 11963 Cr on the sale of 15908 MUs indicating average tariff of Rs 7.52/unit. The final tariff with 20% taxes the tariff of LS consumer will be Rs 9.02/unit. After counting the 35 paisa Surcharge for Coal Washing (Including taxes), withdrawal of 0.25 paisa per unit of HT rebate to 66 KV consumers during night hours for 8 months, difference of interest of Security Consumption (6% being paid by PSPCL Vs 12% payable to banks) and FCA which is certainly to be levied etc. the tariff works out to Rs 10.50 plus without subsidy and Rs 9.30 with GOP subsidy. This much burden, the State industry cannot bear and will result into closer of the industrial units in the State. The relief given by State Government by fixing variable cost at Rs.5/unit will become ineffective to give any relief to the consumers. Therefore, increase in tariff for the industry consumers should be avoided for next couple of years. PSPCL’s Reply: The determination of Tariff is the prerogative of the Commission. Commission’s View: Tariff is determined by the Commission after prudence check of ARR petition and as per PSERC MYT Regulations. Issue No.20
i) There is no case for allowing full increase in ARR as sought by the Board for the control period
ii) Carry forward the rationalization of Electricity Tariff in the State based on the principle of category wise ‗Cost To Serve‘ principle
iii) Reduce the electricity tariff of the subsidizing class of consumers particularly EHT category of consumers.
iv) Ensure tariff rationalization of subsidized class of consumers or ask State Government to compensate the Board through explicit subsidy.
v) Minimize the power cut on large industrial EHT and HT consumers. vi) No one category of consumers may be given preferential treatment and no one should be
discriminated against. vii) Voltage rebate for 66 KV consumers be increased from 25 paise/unit to 50 paise/unit
Commission’s View: The suggestions have been noted. Objection No. 20: SEIL Chemicals. A - General Submissions Issue No. A (1) As per MYT Regulations, PSPCL and PSTCL are required to get approval of additional Capital Expenditure over the approved Capital Investment Plan and Business Plan approved by the Commission. MYT Tariff Petitions are to be prepared by the utilities based on such approved plans. However, here, Capital Expenditure of Rs 1992.23 has been incurred in 2018-19 against approved plan of Rs 1700 Cr. Similarly, RE for Capital Expenditure for 2019-20 have been stated as Rs 2606.19 Cr against finally approved projected plan of 966.72 Cr. PSPCL has further stated that this does not include Capital expenditure on Shahpur Kandi Project and Pachwara coal mine. Further, PSERC had approved 100 Cr for installation of FGD at thermal plants which amount is proposed to be surrendered and not included. Thus, the figures of PSPCL are already at variance to the approved expenditure/capitalization showing little respect given by PSPCL to the orders of the Commission. We request that this tendency of PSPCL to incur expenditure at their will without due approvals of the Commission and then coming up with actual figures in the ARR need to be curbed as this puts the Commission as well as Consumers in a very tricky situation. If such expenditure is not approved, then PSPCL suffers and if approved, tariff increase becomes inevitable. PSPCL’s reply: For FY 2018-19, the capital expenditure of Rs.1992.93 Crore incurred by PSPCL is inclusive of the costs of Pachwara Coal Mine and Shahpur Kandi Power Project which were not considered by the Commission while approving the capital expenditure. Moreover, the capital expenditure for FY 2019-20 has been estimated based on the expenses incurred by PSPCL during the last few years and is required for development works to be done by PSPCL.
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Commission’s View: Refer Para 2.10 and 3.11 of this Tariff Order. Issue No. A(2) For the first time, PSERC has also worked out and proposed the tariff for each category of consumers to meet the revenue gap in Table 92 and Form D-24. The category wise cross subsidy levels on Average COS have also been worked out which show that the tariff for the PIU category (>2500 KVA) to which the objector belongs is proposed to be increased by 13.16% but Cross subsidy, which is 6.89% at existing tariff shall reduce to 6.20% with the proposed tariff. However, proposal is not likely to mature in view of the proposal of PSPCL to drastically increase the Tariff of Agriculture pumps from the existing Rs 5.28/Kwh to Rs 7.26/Kwh (37.50%) increasing the GOP subsidy amount from existing Rs 6060 Cr in 2019-20 to proposed Rs 9115 Cr in 2020-21 which is not likely to be accepted by GOP. PSPCL’s reply: The Tariff Proposal and the determination of cross subsidy is the prerogative of the Commission. Commission’s View: Refer to Chapter 7 of this Tariff Order. Issue No. A (3) Data being disclosed by PSPCL in ARRs is being reduced every year. PSPCL comes up with actual expenditure during RE and True up which widely varies from the approved figures of TO and requests for approval of excess expenditure in relaxation of Regulations but tries to retain the savings. Suggestions on voltage based categorization of tariff, consumption of agriculture sector, road-map towards cross subsidy reduction etc are some of the suggestions which are imperative and convincing, but still being ignored. Details of these points are being touched upon in specific issues highlighted in succeeding paras for consideration of PSPCL/PSERC. PSPCL’s reply: ARR is being prepared and submitted before the Commission as per the regulatory principles set by the Commission. The methodology adopted by PSPCL for truing up for FY 2018-19, RE for FY 2019-20 and MYT petition for FY 2020-21 to FY 2022-23 is very well elaborated in the Petition and is in line with the regulatory principles set by the Commission and PSERC MYT Regulations. Commission’s View: The Suggestions are noted. Issue No. A (4) As per the Tariff Orders being issued every year, the Commission is modifying the Rebates and Surcharges under ―Tariff Related Issues‖. As per the Time of Day tariff, TOD peak charge is leviable for 4 months from 00.00 hours of 1
st June to 24.00 hours of 30
th Sept each year and
for balance 8 months, the night rebate is admissible. PSPCL has changed the billing cycle from 21st of
the month to 21st of next month whereas the change of tariff takes place on 1
st of the month. LS
Consumers have suffered in 2019-20 as peak charges were imposed and TOD rebate was reduced on proportionate basis for the billing month 21.9.2019 to 21.10.2019 though it is mandatory for the Licensee to take readings on the date of every change of tariff. The software updating is delayed and in the mean while consumers have to run after officers for corrections. PSPCL’s Reply: For accurate calculation of TOD surcharge/rebate, the provision for recording the reading of 30
th
September and 31st March are required in the system and S/D‘s has already been authorized in the
SAP system for the same. Commission’s View: The objector may note the response of PSPCL. Issue No. A (5) Threshold limit is either not fixed in advance or calculated wrongly or reduced tariff is not made applicable when due. This is giving rise to disputes of the billing and the consumer has to run after the Local/CBC officers for getting the bill corrected. The Objector is facing such situation and every year, we have to depute our concerned officers to Patiala for corrections of the bills being issued. PSPCL be directed to update the billing software to indicate the threshold limit for the year on the bill itself and automatic grant of rebate as soon as the consumer crosses the threshold limit. PSPCL’s Reply: The software is already updated to automatically calculate the threshold limit and pass the threshold rebate when the consumer becomes eligible, for each financial year. Commission’s View: The objector may note the response of PSPCL.
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B: PRELIMINARY SUBMISSIONS: Issue No. B(1) Cross Subsidy Level based on Voltage Wise Cost of Supply a) APTEL has given directions to PSERC in para 14 of the order in Appeal No 142 & 168 of 2013 between Mawana Sugars & Bansal Alloys Vs PSPCL and others as under:
“…….We only want that the cross-subsidy with respect to actual cost to supply should also be shown to reflect the cross-subsidies transparently and to ensure in the future tariff exercise that the cross subsidy with respect to voltage wise cost of supply is not increased. ……..”
b) In line with above directions of the Hon‘ble APTEL, this Commission has worked out the cross subsidy w.r.t. cost of supply in the respective tariff orders. We, request that the orders of APTEL may please be complied with in the MYT Tariff orders as well and cross subsidy levels based on cost of supply for 2020-21 should be kept below 14.58%. PSPCL’s Reply: The query has been addressed to the Commission. Commission’s View: The objection is noted. Issue No. B (2) Determination of Voltage wise Cost of Supply a) It is submitted that Section 61(g) of the Electricity Act, 2003 mandates as follows: ―… The tariff progressively reflects the cost of supply of electricity and also reduces cross-
subsidies in the manner specified by the Appropriate Commission; ― b) Hon‘ble APTEL In its order dated 12.07.2012 passed in Review Petition No. 8 of 2012, filed by Mawana Sugars Ltd, directed PSERC/PSPCL to ensure completion of the exercise of determination of voltage-wise cost of supply by the end of November, 2012. Pursuant to these directions, a Voltage wise cost of supply study was got conducted by PSPCL from ―The Energy and Resources Institute (T.E.R.I.)‖ and cost of supply was worked out detailing data considered / assumptions taken etc. for the years 2011-12 and 2012-13. Thereafter PSPCL and PSERC are working out the Cost of Supply every year on the same assumptions and data. The difference between tariff and cost of supply has increased from Rs 0.18/unit in 2017-18 to 0.48 in 2018-19 and further increased to 0.53 in 2019-20, meaning thereby that industry is being loaded with increased Cross Subsidy in successive tariff orders which may be kept in view while determining tariff for 66 KV PIU category for 2019-20. c) PSERC has withdrawn the HT rebate during night hours and merged it with TOD rebate with a cap of Rs 4.45 per unit and now HT rebate is available only for 16 hours. HT rebate is granted in accordance with the Electricity Act 2003 which provides that tariff should be in line with the difference of voltage wise cost of supply for the relevant voltage. Hon‘ble APTEL has upheld this provision and Voltage rebate was also granted to Punjab consumers in view of the numerous orders issued by APTEL in this regard. In Tariff Order FY 2013-14, para 4.21, page 104, the Commission accepted that cost of supply for HT consumers is lower and accordingly given relief to the consumers drawing power at higher voltage. Due to the difficulties in implementing voltage wise cost of supply-based tariff, voltage rebate is given to partially compensate such consumers. The difference in cost of supply is increasing over the years and is more than the HT rebate of Rs 0.25/unit available to 66 KV consumers. Instead of increasing the HT rebate to bring the tariff of HT consumers in line with cost of supply as directed by APTEL, PSERC chose to withdraw the HT rebate by putting a cap on TOD tariff along with HT rebate. There was no such proposal from PSPCL in the tariff order and no indication was available during the proceedings of the ARR that HT rebate is being reduced by 33%. Sudden merging of HT rebate in the capping of TOD rebate in the Tariff Order of 2019-20 has brought the 66 KV consumers at par with 11 KV consumers which is not as per the orders of the APTEL. We therefore request for restoring the HT rebate on round the clock basis independently and fix the TOD night rebate independently since both are being granted to achieve separate and distinct goals. PSPCL’s Reply: The determination of tariff, rebate or surcharge to any category is prerogative of the Commission as per Electricity Act, 2003. Regarding the matter of capping of Rs. 4.45 per unit and HT rebate, the Commission in its Order dated 13.09.19 in Review Petition No. 5 of 2019 filed by industrial consumers, has decided that concessional/ discounted tariff can be provided subject to certain limitations only, it was decided to limit the same to Rs. 4.45 per kVAh, being only the marginal cost to generate additional energy. Charging tariff below this cost would have resulted in uneconomical rate of supply which would have defeated the purpose of giving concessional tariff. Further, the cumulative effect of ToD rebate and Voltage rebates on the Energy Charges including reduced Charges for consumption exceeding threshold limit/ use of electricity exclusively during night hours at any time has been limited to the lowest Energy Charge of Rs. 4.45 per kVAh. This limitation
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comes into effect only in case they opt to consume power in excess of the threshold consumption (i.e. the consumption in excess of maximum annual consumption in any of the last two financial years) and/or exclusively during night hours. Commission’s View: The objection is noted.
Issue No. B (3): True up of Previous Year 2018-19 Issue No. B(3) a) PSPCL has submitted Financial Statements for 2018-19 along with the MYT ARR which are prepared by Independent Auditors appointed by PSPCL. Further, Annual Audited Accounts for 2018-19 have been supplied in Reply to Deficiencies. However, Certificate/Report of CAG is not supplied. As per Regulations 12.4 of MYT Regulations 2014, True Up exercise is to be taken up only when audited accounts are made available by the Licensee. Further, MYT Regulation 12.6 provide as under: -
Provided that no carrying cost shall be permitted for the period of delay in filing of true up on account of non submission of audited accounts due to the fault of the utility:
It is therefore requested that Audit Report of CAG may be supplied to us immediately and a copy be posted on the web site so that we are in a position to offer comments. PSPCL’s Reply: Refer PSPCL‘s reply in Issue No. 3 of Objection No. 13. Commission’s View: Refer the Commission‘s view in Issue No. 3 of Objection No. 13. Issue No. B(3) b) As per Regulation 13 of MYT Regulations, Commission is to review the achievements of the objectives laid down in the Regulations at the end of control period. Commission is requested to carry out the exercise as laid down in the Regulations. PSPCL’s Reply: The query has been addressed to the Commission. Commission’s View: The objection is noted. Issue No. B (3) c): Comments on True-up for 2018-19, RE for 2019-20 and MYT ARR 2020-21 to
2022-23: Issue No. B (3) c) 1 ARR applications for the year post FRP indicate steep rise in the total revenue requirement. The Difference between Net Revenue Requirement presented by PSPCL in ARR is escalated to claim higher tariff and in the end during true up, the requirement comes down by about Rs 4000 cr. The escalation which was 11.87% in 2010-11 has escalated to 20.15% in 2017-18. If the Revenue gap and carrying cost is also considered, the escalation of ARR will be much more. The total revenue gap projected in ARR of 2010-11 indicated as 1433.91 Cr has reached alarming level of Rs 12118.55 Cr ending 2019-20 and 11179.66 Cr ending 2020-21 indicating PSPCL to be in debt trap. The abnormal rise in projected requirements seems to be artificially escalated to get very hefty tariff escalations and needs careful consideration by the Commission so that all consumers, like the Petitioner, are not burdened with undue tariff increase. PSPCL’s Reply: PSPCL has been transparent in filing the petition for the True up for FY 2018-19, APR for FY 2019-20 and MYT petition for FY 2020-21 to FY 2022-23. In the present petition, PSPCL has submitted the revenue requirements based on the audited accounts for FY 2018-19, actual figures for the first half of FY 2019-20 as available at the time of petition filing exercise. The methodology adopted by PSPCL for filing the petition is very well elaborated in the Petition and is in line with the regulatory principles set by the Commission and PSERC MYT Regulations. It has been observed that during the year FY 2018-19, the main input costs relating to cost of purchase of power from outside sources, establishment cost etc. has gone up and therefore has resulted in increase in revenue gaps. Further, PSPCL submits that the determination of tariff is the prerogative of the Commission. Commission’s View: The Revenue gap is determined by the Commission after the prudence check and due diligence of the expenses and income in line with the provisions of the MYT Regulations. Issue No. B3 (c) (2): The AP-tariff rates are required to be fixed in line with the National Tariff Policy that envisages that the rates for subsidized categories should not be less than 80% of average cost of supply. However,
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PSERC is not adhering to this principle. In addition to 20% burden, the consumers are also bearing additional burden varying from 2 paisa to 20 paisa which has been transferred to industry by & large for power supplied to Agriculture sector. It is requested to keep the directives of the National Tariff Policy in view for the year 2017-18 and burden be reduced below 20% and further brought down every year progressively PSPCL’s Reply: Cross subsidy of Agriculture sector is within +/-20% as per the provisions of the National Tariff Policy. The cross subsidy for AP category FY 2019-20 is (-17.82%) and the calculation of the same as mentioned in page 189 of the Tariff Order for FY 2019-20. Commission’s View: The Commission has always endeavored to reduce the cross subsidy to the level of ± 20 % of the average cost of supply as provided in the Tariff Policy. Issue No. B3 (c) (3): The power supplied to agriculture sector has been growing consistently at very high rate due to release of new connections, unpredictable rains and depletion of water table. Supplying power to agriculture sector at the subsidized rate, at far less than the actual cost of supply is leading to serious distortions for the PSPCL and seriously affecting the interest of industrial consumers in the State, which are already reeling under recession. Therefore, while adequate rise in agriculture tariff is the need of the hour, it is also imperative to cap the maximum amount of power year wise & approved by the commission that can be supplied to agriculture sector at subsidized rate inclusive of additional connections projected in a year and power supplied above that limit should be billed as COS for agriculture worked out in TO. These provisions need to be kept in view for determination of agriculture tariff. PSPCL’s Reply: PSPCL in its Tariff Proposal has proposed the AP Tariff at the rate of Average Cost of Supply in line with the provisions of the National Tariff Policy. However, the determination of tariff is the prerogative of the Commission. Commission’s View: The Commission has always endeavored to reduce the cross subsidy to the level of ± 20 % of the average cost of supply as provided in the Tariff Policy. Issue No. B3 (c) (4): It is also felt that many suggestions made by us during previous hearings on ARRs do not heed to any result. Submission of ARR, conducting hearing, then announcing of tariff order by fixing various bench marks and then PSPCL going in its own way to manage the show without caring any bench marks/cut off has become an annual ritual. Every year, PSPCL comes up with actual expenditure during RE and True up and requests for approval irrespective of laid down regulations and defined caps/approvals. The repetition of arguments for AP consumption of Kandi Area agriculture consumption and Interest charges on long term & working capital loans etc. shows that PSPCL does not care about the determination of tariff process, Suggestions like reclassification of categories of consumers, restrictions on release of connections to consumers and justification of consumption of agriculture sector, road-map towards cross subsidy reduction and voltage based categorization of tariff are some of the suggestions which are imperative and convincing, but still ignored. PSPCL’s Reply: PSPCL has always adhered to the constructive objections received from the objectors. With regard to the AP sales of Kandi area mixed feeders, it is submitted that PSPCL in the Truing up petition for FY 2018-19 has computed the AP sales for kandi area feeders as 45.64% of the total AP consumption on those feeders. Further, the suggestions received from the objectors are being analyzed by PSPCL and deliberations are being done on the suggestions received from various objectors. Commission’s View: The objection is noted. Issue No. B3 (c) (5): Distribution Loss for PSPCL are 11.54% for 2019-20 and 1.73% for those receiving supply at 66 KV (15% of 11.54%). PSTCL claims to have commissioned the Boundary Metering system and have worked out the Average Transmission Losses of 2.86% for True Up of 2018-19 and 2.3% for H1 of 2019-20 against 2.5% approved by the Commission for 2018-19 and 2019-20. Now PSTCL has requested for approval of 3.0% loss level for 2019-20 as well as for the 3 years of MYT period of 2020-21 to 2022 to 2023, Total T&D losses as per True up of 2018-19 indicated in ARR by PSPCL
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are 14.17% for 2019-20. The Transmission and distribution Losses for 2019-20 as per TO 2019-20 are 2.5% and 11.54% respectively totaling 13.75% against which PSPCL has now proposed T&D losses as 14%. With PSTCL proposal of 3% Transmission Loss for 2019-20 (RE), the Distribution losses works out to 11.34%. Thus for the year 2019-20, PSPCL has proposed Distribution Loss of 11.34% for 66-33-11-0.415 KV for the year 2019-20 T&D losses for 66 KV consumers work out as ((11.34 X 15%)+3=) 4.07% since PSPCL receives supply at 66 KV from PSTCL and supplies to us on 66 KV itself. However the rebate being given to consumers connected at 66/33 KV (compensation for investment of 66 KV equipment plus T&D Losses) is only 25 paisa per unit. 66 KV consumers are paying more fixed and energy charges compared with 11 KV industrial consumers though they use less of the grid system and have to invest on the 66 KV system. Thus the 66 KV consumers are not getting adequate incentive on account of heavy investment made on creating and maintaining facilities by the consumer and the resultant reduction in T&D losses accruing to PSPCL. It is therefore submitted that in view of directions of Hon‘ble APTEL, a) the industrial consumers be divided into four separate distinct categories based on supply
voltage levels i.e. 220/132 KV, 66KV, 33KV and 11 KV and voltage wise cost of supply based tariff be implemented for these consumers OR
b) adequate voltage rebate be given commensurate with cost of supply worked out till implementation of such tariff, OR
c) the voltage rebate be enhanced appropriately and fixed in percentage terms as per pattern of Voltage Surcharge being charged on percentage. Since Voltage Surcharge for consumers eligible for 66 KV but getting supply at 11 KV have to pay 10% Voltage Surcharge, Similarly, Voltage rebate for 66 KV consumers should also be 10%.
PSPCL’s Reply: Determination of tariff is the prerogative of the Commission. Commission’s View: The suggestion is noted. Issue No. B3 (c) (6): Expenditure already denied by the regulatory commission in the previous tariff orders should not have been included in the ARR at all but the PSPCL is continuing the practice of presenting/preparing ARR as per expenditure already incurred and continues to put forward the same arguments time and again to justify and defend the denied expenditure. The PSPCL has approached even APTEL on some of these issues but their arguments have been rejected there as well but still PSPCL continues to present ARR in the same fashion. With the introduction of new Tariff Regulations for MYT period, PSPCL has again filed appeal in APTEL challenging each and every disallowance in the Tariff Orders under MYT Regulations. Consumers neither have financial resources nor understanding to contest such appeals. Therefore, the Commission is requested to contest the claim of PSPCL to full extent. Order dated 16-12-2015 of APTEL in Appeal No 106 of 2013 filed by PSPCL needs to be referred vide which APTEL has rejected PSPCL‘s Appeal for revision of Revenue Requirement for 9 items of ARR/Tariff Order 2013-14, Many of these issues are covered in the MYT Regulations also. However, PSPCL is still pressing the rejected arguments again and again. This indicates that licensee is not bothered to adhere to the approved expenditure and/or follow the already notified regulations upheld time and again by even the APTEL in the Appeals filed by PSPCL itself. It may also be added here that we are raising this issue time and again and request PSERC to direct PSPCL to prepare their ARR accordingly and if PSPCL still continues the same, punitive action like disallowance of the Legal Expenses of advocates engaged for frivolous appeals and petitions be taken against PSPCL besides penalties under Section 142 of the Act. It is added that PSPCL‘s legal expenses are increasing exponentially and were 8.47 Cr in 2017-18 have increased to 11.70 Cr in 2018-19 (Rise of 38%). PSPCL has not given the legal charges for subsequent years. PSPCL’s Reply: PSPCL files an appeal before Hon‘ble APTEL as per Section 111 of the Electricity Act, 2003 only when it is aggrieved by Order of the Commission. Further, PSPCL challenges the PSERC Orders on issues which PSPCL believes are legitimate and an appeal can be filed before Hon‘ble APTEL. Commission’s View: The Revenue gap is determined by the Commission after the prudence check and due diligence of the expenses and income in line with the provisions of the MYT Regulations. Issue No. B3(c) (7): The ARR for 2020-21 now submitted indicate Net Revenue Requirement of 36156.38 Cr for the year
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2020-21. Thus the ARR of Rs 16612 Crore in 2010-11 when PSPCL was formed has escalated to Rs 36156 Crore in 2020-21 indicating an increase of 218% over Ten years. The total requirement trued up for 2010-11 plus Gap as (14849.23+1433.91=) 16283.14 Crore has now been projected as (36156+11180=) Rs 47336 Crore, indicating a rise of 291% over Ten years. As against this, the Total Energy Requirement which was projected as 42915 MUs at Punjab Periphery in 2010-11 has increased to only 59927.46 MUs in 2020-21 showing increase of 140% only. The abnormal rise in projected revenue requirements seems to be artificially escalated to get very hefty tariff escalations and needs careful consideration by the Commission so that all consumers, like the Objector, are not burdened with undue tariff increase. PSPCL’s Reply: PSPCL has been transparent in filing the petition for the True up for FY 2018-19, APR for FY 2019-20 and MYT petition for FY 2020-21 to FY 2022-23. In the present petition, PSPCL has submitted the revenue requirements based on the audited accounts for FY 2018-19, actual figures for the first half of FY 2019-20 as available at the time of petition filing exercise. The methodology adopted by PSPCL for filing the petition is very well elaborated in the Petition and is in line with the regulatory principles set by the Commission and PSERC MYT Regulations. It has been observed that during the year FY 2018-19, the main input costs relating to cost of purchase of power from outside sources, establishment cost etc. has gone up and therefore has resulted in increase in the ARR. Commission’s View: The Revenue gap is determined by the Commission after the prudence check and due diligence of the expenses and income in line with the provisions of the MYT Regulations. Issue No. B3 (c) (8): GOP ordered to retire 4 units of GNDTP Bhatinda and 2 units of GGSSTP Ropar w.e.f. 1.1.2018 and PSPCL has accordingly assumed their generation as Zero from 1.1.2018 onwards. ARR of PSPCL is silent on the disposal of the scrap of the material of retired assets and disposal of the Land of the projects. Further, no separate data regarding man power deployed on the retired assets and their schedule of reduction is available in the ARR. The details need to be provided to the objector for information and comments. PSPCL’s Reply: After the retirement of GNDTP units w.e.f. 01.01.2018, the process of disposal of Scrap at GNDTP is under continual progress. The equipment/material is being transferred to other wings of PSPCL/PSTCL, the scrap & surveyed off material is being sold on regular basis. The details of the disposed of material/equipment is as under:
Sr. No.
Description Amount
1 Coal Mill Reject/Carpet Coal 68.74 Lakh
2 Furnace oil 254.64 Lakh
3 Light Diesel Oil 42.34 Lakh
4 Spares 601.73 Lakh
5 Consumables & Lubricants 292.12 Lakh
6 Scrap 569.72 Lakh
7 Other material/ equipment transferred
947.64 Lakh
Total 2776.9 Lakh
The Assets of GNDTP are being actively disposed of in a phased and cost-effective manner. Regarding the land of GNDTP, it is intimated the Govt. of Punjab is already in process to explore all the possibilities for optimal utilization of vacant land. As far as the manpower deployed is concerned, it is intimated that from deployed manpower of 933 in 31.12.2017,it has been reduced to 240 ending 31.01.2020 and is further being reduced to 160 during Feb‘2020 which is the bare minimum strength mandatory for the effective and cost effective disposal of GNDTP Assets. Further, with regard to GGSSTP, the process for disposal of 2 units of GGSSTP, Ropar which have been retired wef 01.01.2018 is already under process. Work Order has been issued for assessing the saleable value of the Units. For preservation of boiler & for condition monitoring of the assets of the retired Units operation & supervision by the Operation & Maintenance Staff is required at regular intervals of time. The only
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expenditure which is presently booked in respect of Units 1 &2 is on account of use of chemicals for preservation of their boilers, which is only a meagre amount. Since 4 Units of GGSSTP, Ropar are still operational, as such only equipments installed on Units 1 & 2 will be disposed off ,as such land used for Units1 &2 cannot be disposed off as common auxiliaries/system of all the six units is installed spanning over this land. Presently no manpower is deployed exclusively for Units 1 & 2 of GGSSTP, Ropar, however manpower from Stage 2 & 3 Units is used for carrying out the preservation of the boilers & for condition monitoring of the equipments of Stage-I Units at regular intervals of time. Commission’s View: The objector may note the response of PSPCL. ISSUE NO. D: SPECIFIC ISSUES: Issue No. D1 Cross Subsidy : i)As per the mandate given under the Electricity Act, 2003 to the Commission, the cross subsidies have to be progressively reduced. The same provision has been made In the National Tariff Policy also, Central government has advised State Regulatory Commissions to fix time frame for eliminating cross subsidy and declare the trajectory upfront. APTEL is also issuing orders for declaring such trajectories. The Objector requests the Commission to declare the trajectory in the tariff order for 2019-20. (ii)We would also like to mention that as per Table 7.3 of TO 2019-20, there are only two categories of consumers which are being cross subsidized i.e. AP (to the extent of ((-) 17.82%) and Compost/RWW ( to the extent of ((-)15.08%). The lowest slab of Domestic Consumers is also subsidized category but the same is not appearing separately in the table. In real sense, the subsidy of AP category has not been reduced in tariff orders issued by the Commission in last 3-4 years, which is in contradiction to the provisions of the Electricity Act, 2003. The concept of gradual elimination of cross subsidy of Agriculture Sector has been ignored by the Commission while issuing tariff orders so far, which is mandatory as per law. In the present scenario, where the market is very competitive, it is very difficult for the industry to take the huge burden of cross subsidizing other categories of consumers. It is requested that the cross subsidy should be got eliminated in phased manner and a road map may kindly be got drawn by PSERC. PSPCL’s Reply: The query has been addressed to the Commission. Commission’s View: The Commission has always endeavored to reduce the cross subsidy level of various categories of the consumers. Issue No. D2: AGRICULTURAL CONSUMPTION: i) AP Category of consumers get cross subsidised by the industrial consumers. But, consumption of AP consumers earlier increasing exceptionally year by year has suddenly started showing decreasing trends. The objector had been repeatedly stressing in its objections that AP consumption being estimated based on sample meters was not correct and being inflated. Probably this is the reason that PSPCL is not ensuring 100% metering of agriculture consumers as per Act 2003 and not complying with repeated directives of PSERC in this regard. This compelled PSERC to estimate the Agriculture Consumption based on Pumped Energy. Thus the increasing trend of agriculture consumption has been arrested and actual consumption has fallen steeply in audited/actual. ii) The arguments given by PSPCL in the ARR for allowing higher consumption for Kandi Area feeders are not at all convincing. PSPCL has repeatedly stated that lower AP consumption will result in higher T&D Losses thereby proving that unmetered agriculture sector was being used by PSPCL to inflate AP consumption and lowering T&D Losses. iii) The PSERC has disallowed a portion of Pumped Energy of PSPCL for 2014-15 to 2016-17 as per Suo Motu Petition No 42 of 2016. However, no such exercise was undertaken later due to which PSPCL has again inflated the figures of 2018-19. PSERC is requested to undertake such exercise again to stop inflating the agriculture consumption by PSPCL. iv) PSPCL has started segregation of Mixed Kandi feeders into Pure AP and Urban Supply feeders and exercise is likely to be completed soon. However, no time span has been defined in the ARR. Further no progress regarding segregation is available. v) The argument for considering 45.46% energy of Kandi feeders towards agriculture is not at all convincing and PSPCL is coming up with new arguments Instead of segregating the mixed feeders
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expeditiously as directed in TO of 2013-14. Such arguments have already been rejected during previous Tariff Orders but being repeated again. Since PSPCL has failed to segregate the feeders in the last 7 years and is also not submitting any progress on the issue, the 30% norms has attained finality and no arguments on this count be entertained at this stage. The arguments of LDHF formula is an afterthought and therefore, We, request PSERC to continue with 30% figure. PSPCL’s Reply: i) Although The Electricity Act provides for 100% metering of all consumers but installation of meters on AP category of consumers which are being provided free power by GoP will not serve any purpose except recording energy, as meters have already been provided on all feeders. In case 100% metering on AP feeders is carried out, there is no doubt this would certainly make AP energy accounting more accurate but this scheme would also require considerable investment in manpower and equipment‘s keeping in view the large expenses of network and may not justify the return on investment. At present, AP energy is being billed on the basis of energy input recorded from AP feeder meters. PSPCL has been submitting feeder meter readings of all AP feeders on a monthly basis to the Commission. ii) From almost 6000 AP feeders only about 319 Feeders have mixed load i.e. AP and non-AP (DS & NRS). Due to various technical and other constraints PSPCL was unable to segregate supply of AP consumers on these feeders. Already under the DDUGJY scheme, PSPCL is making efforts to segregate AP supply wherever possible and installing meters on AP consumers. But due to resistance by various kissan unions and consumers, the work has been delayed. Though the work has been resumed and is expected to be completed by November 2020 , it has been prayed before the commission to allow for a more reasonable methodology of estimating AP consumption on these feeders, so that PSPCL is not being denied billing on AP energy being utilized by the AP consumers on these kandi feeders. PSPCL has submitted data regarding the same and pending for decision before the Commission. Further, PSPCL in the truing up petition filed for FY 2018-19 has computed the AP consumption of kandi area feeders and estimated the AP consumption on those feeders to 45.64%. iii) PSPCL has always been open and receptive of any checking or data as demanded by the Commission iv) Please refer to reply (ii) above. v) The data has been submitted as per existing methodology adopted by the commission for estimation of energy for different categories of consumers and is not an afterthought as claimed by the objector. The variation in consumption pattern is due to different loading conditions and mostly dependent on the water table depth and the type of cropping in that area. It is requested to the Commission to consider the computed figure of 45% for consumption in kandi area AP feeders. Commission’s View: Refer para 2.2.2 of this Tariff Order regarding AP consumption. Issue No. D 3 INTEREST COST: i) PSPCL is increasing the burden of loans every year. The total loans including working capital loans which were 14649.80 Cr on 1.04.2010 have been projected as 31601.87 Cr on 31-3-2019. These evidences financial indiscipline of PSPCL. Further, after part loans are taken over by GOP under UDAY scheme, the balance loan will be 17624.13 Cr ending 31.3.2020. The fate of taking over will be known only on 31.3.2020. The tendency of incurring expenditure above the ARR by PSPCL by taking loans has to be curbed by the Commission firmly and PSPCL be asked to freeze the loans and seek prior approval for any additional loan which should be sanctioned only after studying its pay back benefits. PSPCL has admitted to raise short term loans to meet the revenue shortfall arising out of various factors viz. Non/late receipt of subsidy from the Government, delayed payments by consumers and Disallowances etc., Under MYT Regulations, most expenses are allowed on normative basis and thus there are no disapprovals. PSERC is allowing carrying costs of delayed payments of subsidy and PSPCL is getting Late Payment Surcharge from consumers for delayed payments. The mismatch between the ARR approved by the Commission in the Tariff Order and actual expenses incurred by the PSPCL should be met through internal accruals and ROE being retained by PSPCL. Unlike previous years, in the present ARR, PSPCL has worked out the Working capital as per normative and source wise interest charges without disclosing the nature of loan. Loans covered under UDAY are to be taken over by GOP as per terms and conditions of UDAY scheme on 31.3.2020. This will substantially reduce the loan portfolio of PSPCL, It is to be seen that the loans again do not reach the earlier levels of debt trap. PSPCL has also claimed interest of Rs 93.35 Cr on GPF amount deposited by employees for 2018-
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19, Rs 73.38 Cr for 2019-20. This amount just like Consumer Security deposit has also been used by PSPCL to meet the working capital and as such the factual WC being utilized by PSPCL is much more than being reflected here. PSERC may direct PSPCL to give clarity on where these amounts have been utilized or invested and interest charges should be allowed accordingly. (ii) PSERC has started approving the Capital/Business investment plan for the control period in advance as per MYT regulations. PSPCL is not sticking to approved figures and is also not obtaining prior approval of the Commission for changing the scope of approved investment. This practice unnecessarily changes the projections of ARR and Tariff order. PSPCL intention is not clear as to why such changes are not got approved in advance so as to scrutinize the proposal and analyze for cost benefit analysis. Therefore, we submit to the Commission to look into the lapses of the PSPCL for a realistic assessment and only such changes be accepted which are as per legal requirement or are financially beneficial and reduce the ARR of PSPCL in the long run and accordingly approve interest cost for capital works for the APR and RE. PSPCL’s Reply: i) Refer PSPCL‘s reply in issue No. 3 of objection No. 11. ii) With regard to the capital expenditure submitted and approved by the Commission, the difference is due to the additional schemes which PSPCL had to undertake due to some emergency nature of work. All the schemes are system improvement schemes and were necessary for public welfare and maintaining the reliable supply of electricity.
During FY 2018-19, The Commission had approved the Capital Expenditure of Rs. 1700.00 Crore, however PSPCL has claimed a Capital Expenditure of Rs. 1992.23 Crore. While approving the CAPEX, expenditures of Shahpur Kandi Power Project (SKPP) and Pachwara Coal Mine were not considered but during the true-Up of FY 2018-19, these schemes have been included in the Capital Expenditure Head.
During the FY 2019-20, The Commission had approved the Capital Expenditure of Rs.1055.46 Crore, however PSPCL has claimed a Capital Expenditure of Rs. 1867.37 Crore (earlier 2606.19 Cr). In addition to including expenditure of Pachwara Coal Mine in CAPEX (earlier not included in CAPEX by PSERC), some emergency nature of works has to be executed during FY 2019-20 such as:-
i) Under Normal Development works, due to VDS, about 94944 new AP load extension applications were received. The revised requirement of funds is based upon the anticipated consumption pattern for maintaining requisite inventory level of various items for use in distribution system for normal development works including system improvement schemes and additional distribution transformers for AP consumers (about 25000 more than previous years).
ii) Under Sub-Transmission scheme, it is submitted that Commission approved only Rs 180 Cr. against proposed capital expenditure of Rs 350 Cr which was very low keeping in view the development works supposed to be executed during FY 2019-20. Till 30.11.2019, PSPCL has incurred expenditure of Rs 128.17 Cr and it is expected that expenditure of balance Progressive work amounting to Rs 179.58 will be incurred in the remaining period of FY 2019-20 (summary attached as annexure-A). Therefore, total expenditure will be around Rs 307.75 Cr as per the expenditure incurred in the previous years.
iii) Under the schemes DDUGJY and IPDS, the funds could not be fully utilized in FY 2017-18 due to lesser period of FY 2017-18 and slow initial pace of work. The pace of work picked up during FY 2018-19 as such more funds were utilized in FY 2018-19 and FY 2019-20.
PSPCL had/has to execute the normal/emergency nature of works for improving the quality of supply to its valuable consumers. Commission’s View: Capital expenditure and interest on long term loans are allowed as per PSERC MYT Regulations. Similarly, Interest on working capital is allowed in line with PSERC MYT Regulations after prudence check on normative basis. Issue No. D4 POWER PURCHASE COST Issue No. D4 i) One of the main reasons of increase in expenses in ARR of PSPCL is power proposed to be surrendered on merit order principle due to commissioning of new IPP stations of Talwandi Sabo, Rajpura and Goindwal sahib in Punjab and PPAs executed with Interstate Generating Stations which are being commissioned now. This will only save the energy/variable part of tariff but PSPCL has to bear the capacity/fixed charges for such non purchase of power. This position was predicted by PSERC and in this regard directive given to PSPCL in TO 2013-14 to direct PSPCL to review all the
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PPAs and surrender costly powers in view of commissioning of IPPs in the State. However, the Directive was dropped in TO 2018-19
PSPCL sold power last year as market conditions were favorable / sale rate on Power exchange was viable, but it is not so this year. Thus, PSPCL has to come out with strategy to increase consumption by existing / prospective consumers of Punjab and consumers do not go in for captive generation for self use and facilitating environment has to be provided by GOP/PSPCL/PSERC. PSPCL should change its mind set to encourage increase in consumption by the industry and other consumers. Instead of bringing reforms in its working by adopting consumer friendly practices enabling ease of doing business, it is creating environment in which industry feels suffocated and pressed against the wall. Billing errors are prevailing on large scale and industry has to run from pillar to post to get the errors rectified. Facility of pre paid meters is not being made available since PSPCL will have to refund the security amount of the consumers. Remote reading of LS consumers under SAP has been introduced but neither display units are being provided to consumers nor initial and final readings for TOD blocks are being supplied. Billing cycle dates (20
th of the month) and dates for change of TOD
tariff / FCA (1st of relevant month) are now different and even this is being used to the loss of
consumers. The bills issued by CBC and bills placed on web site differ widely. Software update for revised tariff is delayed and in the meanwhile consumer suffers. Threshold limit is not displayed on bills in advance. Peak TOD charge is levied for more than 122 days and night rebate is given for less than 243 days Such reform measures should not be left at the mercy of PSPCL and time bound action needs to be ensured as it will encourage consumers to plan their consumption in an efficient manner. PSPCL’s Reply: Issue is not related to the Tariff petition filed by PSPCL and shall be dealt separately. Commission’s View: PSPCL needs to address the issues raised by the objector to the satisfaction of the consumers.
Issue No. D4 (ii) PSERC took a right decision in not allowing any short term purchase during Paddy 2018 since PSPCL had sufficient power to meet the paddy demand. Still as per RE 2018-19 as appearing in ARR 2019-20, PSPCL had made short term power purchase through Traders of 764.84 MUs costing Rs 329.97 Cr @ 422.76 paisa per unit in H1 of 2018-19. However, in Form D2 for 2018-19 (Actuals) of ARR now submitted the short term power purchase is through power exchange the actual purchase is 498.97 MUs @ 328 paisa per unit. Open access charges are paid separately. PSERC is requested to please check if the directions given in orders for Petition No 12 have been complied with by PSPCL and whether the total cost of delivered power fits in the merit order dispatch as variable cost of most of the NTPC and other plants is less than the purchase cost. PSPCL may be asked to provide details of short term power contracted, scheduled, surrendered under Ui and actually utilized along with costs involved for each, penalty paid if any for non scheduling and open access corridor booked and corridor actually availed, open access charges paid for the same. PSPCL’s Reply: Cost indicated under Short Term Power Purchase is for purchase of RE power done for RPO compliance, which has different cost structure than conventional power. Costs indicated under Short Term Power Purchase through exchange is to meet different demand pattern throughout the day specially during winters when demand is higher during day instead of running our units whole day/ night and minimum i.e. nearly half during night which would otherwise lead cheaper power surrender during night. The desired details related to Short term power purchase are as under: Detail of Short Term Power
Power Contracted as per PPA (MU)
Power Scheduled (MU)
Corresponding power at Himachal State Periphery (MU)
Surrendered under UI
Power Actually Utilized (MU)
Costs Rs. crore (Excluding OA charges)
Penalty for Non-Scheduling
OA corridor booked (MU)
OA corridor actually availed (MU)
OA Charges paid (Rs. Crore)
NRSE Power
738 725.50 737.32 NIL 725.5 306.72 NA 725.5 725.50 16.304
throug Exch.
504.51 504.51 498.973 NA
498.973
165.62 NA 504.51 504.51 NA
Commission’s View: The objector may note the response of PSPCL. Issue No. D4 (iii) & (iv) Year wise comparison of the rate of power purchase approved by PSERC in the respective TOs and
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now proposed by PSPCL in ARR, the actual rates of power purchase are way below the rate proposed in the ARR. This proves that PSPCL has been inflating the ARR to claim higher revenue. Perusal of year wise power purchase data given reveals that PSPCL is not exercising due care in its planning of power purchases as under: a) True Up for 2018-19 a i) PSPCL has worked out the actual total rate per unit for Anta Gas Station as Rs 12.82/unit and for Auriya Gas station as Rs 27.68/Unit. These rates are abnormally high and occurring year after year. As per web site information, The Anta station was commissioned in March 1990 and Auriya station in June 1990. The useful life of Gas based thermal plants as per CERC Terms and Conditions of determination of tariff Regulations is 25 years which is already over in June 2015. Therefore, these projects need to be retired as we have done in case of GNDTP and GGSTP. As already requested last year also, the case needs to be taken with CEA, MOP and NTPC by PSPCL/GOP. PSPCL’s Reply: Refer PSPCL‘s reply in Issue No. B iii(c) of objection No. 13. Commission’s view: The objector may note the response of PSPCL.
a ii) On perusal of UI of TSPL and NPL indicate that TSPL over injected 21.18 MU and received Rs 3.72 Cr @ 175.56 Paisa per unit and NPL under injected 32.11 MUs and paid Rs 10.70 Cr @ 333.24 paisa per unit. However, UI power of PSPCL indicate that PSPCL under drawn 80.73 MU and have also paid Rs 73.08 Cr under UI. This is a double blow to consumers as power had also been surrendered and payment has also been paid. Thus, whereas IPPs of Punjab are managing their affairs very well, PSPCL is not able to manage its scheduling and drawl. The rate of Dadri Gas Station worked out as Rs 1.13/Unit seems to be wrong as the total cost of Rs 113.26 Cr has been paid for total power purchase of 13.682 Cr units which gives the per unit cost as Rs 8.28 per unit. PSPCL’s Reply: PSPCL never intends to purchase of power through UI by overdrawing and sale power by under drawing through UI. Over drawl & under drawl are part of system, because Punjab being a heavy power consuming State where load variations are frequent & caused by a no. of reasons such as day & night, crops season, winter & summer – domestic load variations. Most of them are dependent on weather. UI cost indicates Net cost of under drawn & over drawn energy. During load crash situations, normally frequency is higher and UI rate is lower, so under force majeure conditions power in grid is injected at very lower rate and during normal periods when energy is drawn from grid even at normal rates, net figure of cost per unit of both under/over drawn energy comes out to be higher which results in net high per unit rate of UI. In view of this actual cost during True-up shall be considered. Further total per unit cost towards Dadri Gas station comes out to be 807.25 paisa/unit. Commission’s View: Refer to Para 2.9 (i) of this Tariff Order.
a iii) The VC for short term power thro‘ traders had been indicated for 2019-20H1 (Actuals) as 422.76 ps/unit. Further, the open access charges had been shown as 13.78 Cr for 764.84 MUs i.e. 18 paisa per unit. However though these figures were appearing for H1 (Actually incurred) of 2018-19, these are not appearing in True up of 2018-19 in present ARR. PSPCL’s Reply: Out of total 780.52 gross MUs (net MUs 764.84) shown under Short term power purchase during FY 2018-19 (H1) submitted in ARR 2019-20, 737.32 MUs are under Non-Solar RE Short term power purchase and balance power purchase was through Exchange. Now, PSPCL submitted 737.32 gross MUs under short term NRSE power and 504.51 gross MUs under short term power through exchange for FY 2018-19 (true up) in ARR 2020-21. And the open access charges for short term power are of Rs. 16.30 Cr. Commission’s view: The objector may note the response of PSPCL. a iv) Late Payment Surcharge and TDS of Rs 47.48 Cr need to be disallowed as Early Payment Discount is not being counted in Power Purchase cost and being retained by PSPCL. PSPCL’s Reply: The Late payment surcharge and TDS have been claimed as per PSERC MYT regulations. Commission’s View: Refer to Para 2.9 (ii) of this Tariff Order. a v) Previous Year Payments need to be considered under prior period payments.
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PSPCL’s Reply: The previous year payments in respect of central sector generating stations have been made towards the bills raised by various firms for previous period on account of revised energy charges, capacity charges, water usages charges, RLDC charges etc. on the basis of various CERC orders revising AFCs. However, previous year Charges against Sasan Power Ltd for FY 2018-19 and 2019-20 (H1) accounts towards various Supplementary bills raised by Sasan Power Ltd due to certain Change in Law events as allowed by CERC, APTEL and SCI. Further, previous year payments towards GVK has been made during FY 2018-19 on account of revised calculation of monthly bills in view of PSERC order dated 06.03.19 & 27.05.19 for FY 16-17 ,FY 17-18 and during FY 2019-20 H1 previous year payments has been made on account of reduced capacity charges for FY 17-18 as per PSERC order 12.9.19 in pet 37 of 2018 & revised calculation of monthly bills in view of PSERC order dated 06.03.19 & 27.05.19 for FY12-13, FY 16-17. In case of Mallana-II HEP, Previous year payments has been made on account of revised calculation of monthly bills in view of PSERC order dated 11.02.19 for FY 14-15,15-16,16-17,17-18. Commission’s View: Previous year payments are taken as ‗prior period expenses‘ and dealt with as per PSERC MYT Regulation.-2014 a vi) PSPCL has surrendered 80.73 MUs under UI and also paid Rs 73.08 Cr to UI pool account which is indicative of mismanagement and inefficiency. This transaction should be disallowed. PSPCL’s Reply: Refer PSPCL‘s reply in issue No. 5(2) of objection No. 11. Commission’s View: Refer the Commission‘s view in issue No. 5(2) of objection No. 11. b) Revised Estimates for 2019-20 b i) The comments for Anta and Auriya Gas Station at a(i) above are also applicable for this year also. PSPCL’s Reply: Refer PSPCL‘s reply in Issue No. 7 B iii(c) of objection No. 13. Commission’s View: The objector may note the response of PSPCL. b ii) MOP had allocated 30 MW power from Unchahar-I station of NTPC to Arunachal Pradesh w.e.f. 1.2.2019 vide their letter no 3/6/19/OM dated 21.1.19 and revised allocation as per the Revision No 12/2018-19 for Punjab is 1.43% permanent share and 0.18% unallocated share totaling 1.61%. However, the fixed cost claimed for Unchahar 1 plant is Rs 23.05 Cr for 2018-19, Rs 22.31 Cr for 2019-20 and Rs 25.93 Cr for 2020-21 indicating that PSPCL has paid full fixed charges for all the years. This needs to be checked. PSPCL’s Reply: MoP has allocated 30MW power from Unchahar-1 station of NTPC to Arunachal Pradesh vide their letter no 3/6/2018-OM dated 21/01/19 for three months w.e.f 1st February, 2019 to 30thApril, 2019. Accordingly, fixed charges has been paid to M/s NTPC towards Unchahar-1 generating station keeping in view the allocation to PSPCL and CERC regulations. Commission’s View: The objector may note the response of PSPCL. b iii) Purchase of power from Unchahar, Dadri II, Jhajjar, Singrauli Small Hydro, Pargati Gas, may be reviewed keeping in view the VC of PSPCL thermal plants. PSPCL’s Reply: Power available from Uchahar, Dadri II, Jhajjar & Pragati gas are only availed as per their lower variable cost in comparison to other stations. Load pattern varies during day and different seasons. To meet peak of day/year power from all projects needs to be availed at same time & surrendered during lean period of day/year. During surrender firstly costly power is surrendered. Moreover being the centre sector generating stations, even if power is not requisitioned by PSPCL from these stations, at times while running on technical minimum, some quantum is booked by NRLDC in order to maintain desirable availability of power in grid depending upon real time operation. PSPCL is following merit order in letter and spirit. It is evident from such minimal quantum of power from such stations. It is further submitted that Hydro plants are must run plants, Power from plants is must drawn in any condition. Commission’s View: The objector may note the response of PSPCL.
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b iv) The surrender of power needs to be reviewed/checked every month in view of changing scenario of coal cost due to allotment of coal mines thro‘ bidding process, variation in imported coal prices and increasing gas prices. PSPCL’s Reply: PSPCL already has a practice to review variable costs of projects on monthly basis. Commission’s View: The objector may note the response of PSPCL. Issue No. D 5: TRANSMISSION & DISTRIBUTION LOSSES (T&D LOSS): Issue No. D5 (a) T&D Loss Target were proposed in MYT ARR for 2017-18 as 14.25%, 14% and 13.75% for the MYT control period of 2017-18, 2018-19 and 2019-20 respectively and were accepted in TO for MYT period. In the present ARR for 2020-21, the actual T&D Loss for 2018-19 is indicated as 14.17%, 14% for RE 2019-20 and 13.90%, 13.80% & 13.70% for MYT control period of 2020-21, 2021-22 and 2022-23 respectively. While fixing the targets of T&D loss level for PSPCL, the loss level for PSTCL were fixed as 2.5%, 2.4% and 2.3% for 2017-18, 2018-19 and 2019-20 respectively. However, the PSERC had been approving the loss of 2.5% so far and now PSTCL has proposed Loss level for transmission system is proposed as 3% for the period 2019-20 to 2022-23. Thus, the loss levels fixed by the Commission are not being achieved by PSPCL as well as PSTCL. This needs to be critically analyzed by the Commission. PSPCL’s Reply: PSPCL has been striving hard to attain the T&D Loss levels as fixed by the Commission. PSPCL has been able to significantly bring down the T&D losses to 14.17% in FY 2018-19 from16.34% for FY 2017-18 as approved by the Commission. Further, PSPCL has projected -2.49% reduction in Distribution Losses by the end of FY 2022-23 from FY 2017-18. To achieve this, PSPCL requires adequate Capital Investment for the Sub–Transmission & Distribution System strengthening and its modernization. Accordingly, PSERC has approved the Capital Expenditure Plan for reduction in distribution losses Commission’s View: Refer para No. 2.3, 3.3 & 4.3 of this Tariff Order and para No. 2.3, 3.3 & 4.3 of PSTCL Tariff Order for FY 2020-21. Issue No. D5 (b): PSPCL is revising the T&D Loss level trajectory on its own. The loss level of 13.75% was projected for 2019-20 which is now proposed to be shifted to 2022. The reduction in loss level trajectory from 1% per year to 0.5% and now to 0.1% per year for PSPCL means that projections of cost recovery and cost benefit analysis of saving in power purchase and additional revenue given in the DPRs for obtaining huge loans for loss reduction programs will be disturbed, loan repayments will be delayed and additional interest burden will be loaded to consumers which will be greatly unfair. Therefore it is requested that the interest burden due to such shifting of loss targets be met from the internal accruals or performance incentives of the PSPCL. With the huge surplus scenario and huge cost of capital investment for further reduction of T&D loss by merely 0.1% each year, capital investment plan for loss reduction needs to be reviewed for cost benefit analysis taking variable coat of power saved instead of full power purchase cost. The objector feels that it will not be cost efficient to invest further in loss reduction programs. PSPCL’s Reply: PSPCL does not revise the loss trajectory on its own. The loss trajectory is fixed by the Commission. The loss trajectory of 13.75% has been shifted to FY 2022-23 keeping in view the actual T&D Losses of 16.34% for FY 2017-18. Commission’s View: Refer para No. 4.3 of this Tariff Order and para No. 4.3 of PSTCL Tariff Order for FY 2020-21. Issue No. D6: Employees Expenses: It is strange that for 2014-15 to 2016-17, the claims made were highly inflated and actual have come down drastically. As per APTEL order, audited Employee Cost has to be approved in True up. Therefore, either PSPCL needs to control the employee cost or else we request that all the recruitments of new employees should be subject to the approval of PSERC. PSPCL also needs to explain as to how it was giving justifications for inflated figures in the ARRs. The following parameters of Employee Cost also need perusal:
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2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Employee Cost (Rs. Crore)
4397.99 (TU)
4551.57 (TU)
4480.97 (TU)
4656.74 (Actual)
4958.45 (RE)
5240.79 (Proj)
Total Sale in State (MUs)
40600 43778 47374 47407 49141 51333
Employee Cost per unit (Paisa/unit)
108 104 95 98 101 102
No of Employees 39157 39036 35413 35359 35957 36555
Per Employee expenditure in Rs. Lac
11.232 11.660 12.653 13.170 13.790 14.337
The above reveals that in spite of all the claims made by PSPCL for containing the employee cost i.e. reduction in no of employees, making urgent new recruitments on contract basis, increasing demand of power in the State and improved employees performance parameters etc., the employees cost per unit has started increasing and yearly average pay of each employee is increasing abnormally which is unjustified and defies any logic in reference with WPI and CPI. In spite of decrease in no. of employees in the ARR there is increase in employee cost per unit which needs to be looked into from WPI angle. The abnormal decrease in employee cost during true up over the ARR figures confirms our argument that projections are initially inflated to claim higher revenue. PSPCL is unable to find the real cause of abnormal increase in employee cost year after year compared with the increase admissible as per Regulations in spite of repeated disallowances. PSPCL’s Reply: The employee expenses have been claimed by PSPCL as per the Regulations specified by the Commission and PSPCL has never claimed inflated employee expenses. With regard to the query of the objector that the employee costs must decrease with the no. of employees it is submitted that the employee expenses are approved on a normative basis. Commission’s View: Employee cost is allowed in line with PSERC MYT Regulations after prudence check. Issue No. D7: Tariff for PIU industry based on power factor: In Tariff Order for 2014-15, PSERC had approved the tariff of Rs 6.33 per KVA for PIU industry against 6.33/KWH prevailing in 2013-14. Thus, power factor incentive available to us in 2013-14 was withdrawn. However, the tariff of general industry was lowered from 6.33 to 6.14 paisa per unit. Same tariff has been continued for 2015-16. Thus, the PIU industry has been put in a disadvantageous position under two part tariff as in addition to existing 20 paisa per unit, PIU industry was loaded with Rs 35 to Rs 65/KVA/Month also compared with General Industry. Based on the comments submitted by PIU industry and submissions made in Public Hearings, the Commission reduced the FC in the T.O 2018-19. PSPCL opposed the merger of PIU and General Industry category as per para (vi) of Page 190 of ARR of the previous year on the same logic and has also failed to submit any proposal for checking of Harmonics. PSPCL is conveniently forgetting that PIU industry has higher utilization factor and also better power factor than general industry. CEA regulations on connectivity and Supply Code provide for limits of harmonics which should be the guiding factor for injections of distortions. PSPCL is charging higher tariff from PIU industry but has not installed any equipment like harmonics filter etc in the sub stations and the variations are being simply passed on to the other consumers. Checking of Harmonics will force the consumers to contain the distortions and this will increase the life of PSPCL equipment and thus will be beneficial to PSPCL also. As such justice demands that under the present surplus scenario, the tariff for PIU industry should be lower or at least equal to general industry. We also submit that tariffs based on KVAH should be rationalized and PSERC may look into it keeping in view the higher Power actor and higher Load factor of PIU industry and benefits accruing to PSPCL in view of improved voltage profile and reduced line losses and above all, all the expenditure on equipment installed is borne by the consumer. We also request that cross subsidy levels and voltage wise cost of supply for PIU and general category be worked out separately and shown in Tariff orders instead of single figure for both the categories to indicate the correct picture. PSPCL’s Reply: Refer PSPCL‘s reply in issue No. 12(2) of objection No. 12.
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Commission’s View: Refer Commission‘s view in issue No. 12(2) of objection No. 12. Issue No. D8: Cost of supply / HT rebate: The voltage rebate of 25 paisa per unit is continuing for the last many years though the gap of cost of Supply is much more. Further, the calculations of cost of supply along with assumptions are not disclosed for study of stake holders. PSERC has also put a cap on the HT rebate and night rebate from the year 2019-20 by which the EHT and HT consumers from 220 KV to 11 KV are paying same tariff during night hours. The Commission is therefore requested to:- a) Direct the PSPCL to be transparent on the cost of supply and make the complete calculations a part of ARR. b) The cost of supply study be made more realistic and reliable by firming up the data required for the study since lot of computerization/digitization has taken place and IT practices have been introduced under APDRP schemes in PSPCL/PSTCL. c) As per recent orders of APTEL in an appeal filed by the Objector, it has been ordered that Cross Subsidy Levels worked out on the basis of Cost of supply should be kept less than that of last year. Further cross subsidy levels based on average cost of supply basis should not exceed 20% limit. d) Till the tariffs are determined based on cost of supply, voltage rebate for night hours be not capped with night rebate and be further enhanced to make it commensurate with the cost of supply. e) As the Voltage Surcharge is levied on percentage basis, on the same analogy, voltage rebate should also be fixed on percentage basis. PSPCL’s Reply: The query has been addressed to the Commission. Commission’s View: The objection is noted. Issue No. D9: Return on Equity: The FRP approved by GOP has increased the cost of assets by their revaluation/merging of consumer contribution, subsidies and grants with its equity leading to increase in the equity share capital of GOP in PSPCL from 2617.61 crore to 6081.43 crore w.e.f. 16.4.10 which has led to increase of ROE from 607.55 crore in ARR to 1411.50 crore i.e. an increase of 232% in both the figures without any fresh investment by GOP or PSPCL. This revaluation is causing cyclic increase in ARR for subsequent years also. It will be appreciated that this revaluation of dead assets is neither a cash flow nor the increased cost of assets is reclaimable for cash flow. These revaluated assets remain in books only and it cannot be used for any improvement in financial performance of the licensees. GOP has already recalled its loans advanced to the then PSEB due to financial crunch in GOP due to huge subsidy amount of agriculture power. Now GOP may start recalling its equity from PSPCL or adjust it against the subsidy amount forcing financial crunch in PSPCL. Further, Regulation 25.4 is very clear that only cash infusion is to be treated as equity for grant of ROE. The consumer contribution, grants and subsidies are not cash flow for the purpose of equity as per settled financial principles and this has been acknowledged by the Commission in the proposed amendment of Regulation 25.4 and more recently in MYT Regulations. This matter was appealed in APTEL and it has already directed PSERC to reconsider the issue vide judgment Dated 17-12-14 in Appeal No 168 and 142 of 2013. PSPCL has filed an Appeal against the order in Supreme Court and stay has been granted. Accordingly, we will approach the Commission to re determine ROE for all the years w.e.f. 2011-12 onwards after the verdict of the Hon‘ble SC. PSPCL’s Reply: The matter is sub-judice under the Hon‘ble Supreme court and PSPCL has no comments to offer. Commission’s View: The commission will take the call on the issue in accordance with decision of the Supreme Court, as and when given. Issue No. D10: Conversion of Loans to be taken over by GOP under UDAY scheme: Now PSPCL has proposed in the ARR that loans taken over by GOP under UDAY scheme on 31.3.2020 amounting to Rs 15628.26 Cr be converted into equity of GOP in PSPCL whereby GOP equity in PSPCL is proposed to be increased from 6081.43 Cr to 21709.69 Cr and increase in Return on Equity @ 15.9% from Rs 966.95 cr to 3451.84 cr.
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It is to be seen that the para also states that matter regarding implementation of UDAY loan has been ―discussed in earlier section of this order‖. However, no reference of the order is available where the conversion of all the loans into equity were discussed. We invite the attention of the Commission to MOU entered into between PSPCL, GOP and MOP dated 4.3.2016 regarding implementation of UDAY scheme in Punjab submitted to the Commission vide CE/ARR & Tr letter no 481/CC/DTR/Dy CAO/246/Voll-1 dated 12.4.2016 which clearly says that the Loans of Rs 15628.26 will be adjusted by conversion of Rs 11728.26 Cr as GOP grant at the end of 5
th year and Rs 3900 Cr as equity. GOP and PSPCL cannot make their own adjustments at this
stage as it will kill the very purpose of the UDAY scheme and will be illegal. It is also submitted that PSERC, for the purpose of grant of ROE, is required to consider the equity actually contributed and subscribed by GOP and must be through cash flow and not thro book adjustment as it will undue burden the consumers of the State. It is not necessary for the PSERC to consider the equity as projected by PSPCL for the purpose of ROE and can work out the actually contributed equity for the purpose of ROE. In this regard, comments of the objectors on the ARR with UDAY effect submitted vide above referred letter dated 12.4.2016 wherein we have stated that the all the loans covered under UDAY does not qualify for consideration as PSERC had been disallowing large part of working capital loans and some capital loans in the tariff orders. We request that only accepted loans by PSERC as per TO 2016-14 be considered for adjustment under UDAY and PSPCL should also be asked to bear the liability of unapproved WC and Capital loans. PSPCL’s Reply: Government of Punjab will be converting the UDAY loans of Rs.15,628 Crores into equity. As per PSERC MYT Regulations PSPCL is entitled to return on equity of 15.50% on the equity amount. Further, the working capital loans have been taken by PSPCL to fund its financials and PSPCL requests the Commission to allow it. Commission’s View: Refer para 3.17 of this tariff Order. Issue No. D11: Infusion of additional equity for Capital investment. PSPCL is proposing additional equity for financing the capital investment plan to maintain Debt Equity ratio of 70% to 30% without disclosing the source from which the cash flow will be brought when PSPCL is showing loss in its Annual Financial Reports and no fund flow from GOP. MYT Regulations are very clear that the Debt Equity ratio will be kept as normative 70: 30 if the equity is more than 30% and actual Debt equity if it is less than 30%. Therefore, there is no requirement of financing the capital works with 30% equity by taking loan on 8 to 9% and earning 15.5 to 16.5% ROE on the same. Such arrangement needs to be rejected outrightly with strong message to the Licensee that such attempts to increase the sale rate of power on artificial means. PSPCL’s Reply: PSPCL has proposed equity of 30% has been projected as per the Regulatory framework issued by the Commission. Further, PSPCL earns profits in Regulatory accounts on account of RoE. PSPCL will be infusing from the earned profits. Commission’s View: Return on Equity is determined by the Commission in-line with PSERC MYT Regulations after prudence check. Objection No.21: Varun Steel & Castings Private Limited Issue No.1: TOD tariff/ HT Rebate The Commission in its tariff order for FY 2019-2020 had changed the terms of TOD tariff and made it un-favorable to the consumers drawing power at 66/132/220 KV voltage level. The minimum tariff has been fixed as Rs.4.45/unit under TOD tariff including the high voltage rebate given to the industry. In the previous year FY 2018-19. the minimum power tariff was Rs.4.28/unit excluding the voltage rebate, which is 25 paise/unit. For 2019-20, not only the minimum tariff was increased by 17 paisa/unit, but the voltage rebate of 25 paisa per unit was merged with it, increasing the night tariff tar 66 kV consumers by 42 paisa. Thus, the night tariff for 8 months of the year was made same for all LS consumers drawing power at 11/33/66/132/220 KV voltage level. It is accepted fact that voltage rebate is not a concession or incentive but compensation of investment on High voltage Substation and savings accruing to PSPCL on transformation losses. HT rebate is being granted in accordance with the Electricity Act 2003 which provides that tariff should
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be in line with voltage wise cost of supply. Hon'ble APTEL has upheld this provision and Voltage rebate was also granted to Punjab consumers in view of the numerous orders issued by APTEL in this regard. In Tariff Order FY 2013-14, the Commission accepted that cost of supply for HT consumers is lower and accordingly given relief to the consumers drawing power at higher voltage. Due to the inability to charge cost of supply based tariff, voltage rebate is given to partially compensate such consumers. Further, the Commission in its tariff order FY 2019-20 also calculated the cost of supply for 11 KV and 66 KV industrial consumers and the cross subsidy based on cost of supply. While the Cost of supply for 11 KV Consumers has been worked out as 6.86/unit, it is 6.22 per unit for 66 KV consumers. Thus, there is difference 64 paisa per unit whereas HT rebate was being given as only 25 paisa per unit which has now been reduced to 17 paisa per unit. Similarly, the cross subsidy paid by 66 KV consumers is 14.58%, which is much more than CS levels of 11 KV and LT consumers. Therefore, the action to merge the voltage rebate with the minimum tariff of Rs.4.45/unit is against the provisions of the Act, orders of the Hon'ble APTEL and also against the principles accepted by the Commission while granting this rebate and the same need to be restored to the consumers who draw power on 66 KV system. There were no directions from GOP which is bearing the subsidy for grant of Energy charge of Rs 5/- per unit to industry as GOP had consented to continue the subsidy as per pattern of 2018-19. There was no demand from PSPCL in the ARR to this effect and the proposal was never put up in the Public domain. The tariff order was also silent as to the reasons requiring this action. Thus, the action of the Commission lacked conviction. It is therefore requested that the matter of merging HT rebate in minimum tariff slab of TOD on urgent basis be reconsidered and the HT rebate may please be restored in the Tariff Order 2020-21 so that industry can continue to operate in Punjab and remain viable. PSPCL’s Reply: Determination of tariff, rebate or surcharge to any category is prerogative of the Commission as per Electricity Act, 2003 on the basis of data supplied by PSPCL in the ARR, keeping the interest of stakeholders in view. Regarding the matter of capping of Rs. 4.45 per unit and HT rebate, the Commission in its Order dated 13.09.19 in Review Petition No. 5 of 2019 filed by industrial consumers, has decided that concessional/ discounted tariff can be provided subject to certain limitations only, it was decided to limit the same to Rs. 4.45 per kVAh, being only the marginal cost to generate additional energy. Charging tariff below this cost would have resulted in uneconomical rate of supply which would have defeated the purpose of giving concessional tariff. Further, the cumulative effect of ToD rebate and Voltage rebates on the Energy Charges including reduced Charges for consumption exceeding threshold limit/ use of electricity exclusively during night hours at any time has been limited to the lowest Energy Charge of Rs. 4.45 per kVAh. This limitation comes into effect only in case they opt to consume power in excess of the threshold consumption (i.e. the consumption in excess of maximum annual consumption in any of the last two financial years) and/or exclusively during night hours. Commission’s View: The suggestion is noted. Objection No.22: Apex Chamber of Commerce and Industry Issue No.1 Country is passing through a severe economic slowdown. Punjab has special reason to worry because it is predominantly an agriculture State. Hard work of people in Punjab is mainly responsible for the development of Industry in the absence of ingredients promoting industry. Ludhiana is the commercial capital of Punjab. Power rates affect the economics of industry vitally. PSPCL has its own problems. To strike the proper balance Regulatory Commission plays a very predominate role. It is learnt that Regulatory Commission is thinking of avoiding public hearing at Ludhiana. This is perhaps based on some disturbance last year, perhaps by some political workers. Miscreants can be expected anywhere anytime. This can be handled by the administration with strong hands. Miscreants should not be allowed to affect such a vital gathering on economic issue. In view of above fact public hearing of Regulatory Commission to have the views on power rates from the affected industry must be held at Ludhiana. Administration can be informed before hand to keep the miscreants at Bay. The absence of Public hearing in this slowdown will speak differently on the role of the Regulatory Commission.
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PSPCL’s Reply: The query has been addressed to the Commission. Commission’s View: The Commissions reaches out to new consumers every year and hence the Public Hearings are conducted at different cities in addition to the Commission‘s office at Chandigarh. All consumers are welcome to attend at any venue. The Ludhiana consumers were specifically invited and they did attend the hearing in Chandigarh. Objection No.23: Mr. Kulwarn Singh Atwal. Issue No. 1: PSPCL should be run in a more professional was as the present set up system of Technocrats has failed in first finalizing agreements for purchase of power and later failed in representing the case in courts. Medial discussions and mudslinging by Congress & Akalis have brought the cat out. PSERC should ask PSPCL to bring more members from all categories of consumers who have to bear the cost of expensive power. The consumer has to pay for the aged inefficient and politically recruited staff in the guise of providing jobs to jobless. Outsourced staff is efficient and inexpensive and more caring; reduce salary bill of PSPCL and less burden on consumer. PSPCL should reduce its cost as per adjoining Himachal Pradesh & Delhi. PSPCL’s Reply: The query does not relate to the Tariff Petition filed and shall be dealt separately. Commission’s View: PSPCL would benefit from more efficient practices. Issue No.2: Power supplied to AP consumers in night shift is of no use. The labour is unwilling to irrigate fields at night due to free movement and fear of wild boars and cows roaming in fields. Moreover, if tube wells are switched on at night lot of water is wasted. The cost of power at night to Agriculture Sector is same as in day and no relief on subsidy bill of Govt. of Punjab. The State is surplus in power, power generation units lying closed should generate during day and no generation be made for agriculture sector at night. The farmer should have liberty to switch on his motor during day, at par with industry & NRS beneficiaries. Though there are fixed timings but supply is not given in that time & switched off abruptly without informing, a lot of wasted and electricity is unutilized when tube well, industrial supply is given which is unattended by farmer/worker. To stop wastage, What‘s app group of a particular feeder, village, farmers, industrial consumers would be made or mobile SMS service should be started to inform the consumers about the power supply timings. Monthly/Quarterly charges as per banking norms can be collected from farmers for the service. PSPCL’s Reply: The query does not relate to the Tariff Petition filed and shall be dealt separately. Commission’s View: The objector may note the reply of PSPCL. Objection No.24: UDYOG NAGAR MANUFACTURER’S ASSOCIATION: Issue No. 1: Electricity rates in Punjab are too high in comparison to neighboring States. Any hike of electricity will lead to slow down of industrial output and lower the consumption thereof. So, there will be decrease in revenue of PSPCL due to lower consumption of electricity. PSPCL’s Reply: ARR is being prepared and submitted before the Commission as per the regulatory principles set by the Commission. The methodology adopted by PSPCL for truing up for FY 2018-19, RE for FY 2019-20 and MYT petition for FY 2020-21 to FY 2022-23 is very well elaborated in the Petition and is in line with the regulatory principles set by the Commission and PSERC MYT Regulations. Further, the determination of Tariff is the prerogative of the Commission. Commission’s View: The Tariff is determined by the Commission after prudence check of ARR petition and as per PSERC Tariff Regulations.
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Issue No. 2: In case of LS connection, an individual Gang Switch was installed outside the premises of Industrial unit, in case of any fault in any unit these switches were used to isolate the concerned unit. But these switches have been removed. Due to this when there is some fault in transformer or switches of any industrial unit, whole feeder has to be shutdown and all industries falling under the feeder comes to halt. This leads to loss of revenue of both PSPCL & Industries. So G.O. switches or some mechanism should be installed to solve the problem. PSPCL’s Reply: The query does not relate to the Tariff Petition filed and shall be dealt separately. Commission’s View: The objector may note the reply of PSPCL. Issue No.3: In August 2019, a number of industrial unit were unable to make payment on last date due to ―Punjab Bandh‖ on that day and have to make payment on the next day with surcharge. It was informed to concerned officers on that day telephonically and request letter on whatsapp Bandh was called after demolition of Shri Guru Ravidas Mandir, Delhi on 10th of August,2019 which is Saturday of the Month, 11th was Sunday,12th was EID holiday (All bank Holiday). 13th August was the last date of payment. On this day even the movements of the person were restricted and banks were closed. Copies of bill of the two of the effected consumer and letter sent to concerned officers are attached herewith. As per Electricity Laws the last due bill payment automatically goes to next working day in case of any closure. So, the surcharge should be adjusted in our next electricity bills. The requested letter for waiving of that surcharge has been given to the concerned authorities but nothing happened till date. PSPCL’s Reply: The query does not relate to the Tariff Petition filed and shall be dealt separately. Commission’s View: The objector may note the reply of PSPCL. Issue No.4 Charges other than monthly charges & any disputed charges should be sent separately to consumers. As consumers has to get done amendment from the department every time to pay it online. This leads to unnecessary harassment. PSPCL’s Reply: The query does not relate to the Tariff Petition filed and shall be dealt separately. Commission’s View: The issue does not relate to the ARR Petition. However, PSPCL needs to settle the issue to the satisfaction of the consumers. Objection No.25: District Jalandhar Beopar Mandal. Issue No. 1: 1) That the sum of Rs. 1420/- Crore to be paid or paid by PSPCL relates to be washing charges of
coal to two thermal plants in Rajpura & Talwandi Sabo for the period of 2012-13 to 2019. 2) The process of coal washing was to be done by the producer plants and not the distributors
PSPCL. 3) That PSPCL has been charging from consumers at the rate fixed from time to time by either
Punjab State Electricity Regulatory Commission or by PSPCL. 4) That it is totally unjustified and against the principles of natural justice to burden the consumers in
the State who are facing already the economic slowdown after demonetization and introduction of GST.
5) The practice of burdening the consumers every time with retrospective effect is totally unjustified and illegal.
6) That the Punjab Government in its Industrial Policy-2017 announced on 01.11.2017 that existing and new units will get assured power @ Rs. 5/- per unit net for fixed period of 5 years. Hence the increase of rate after 01.11.2017 is ultra-virus and illegal.
PSPCL’s Reply: The amount of Rs.1423.82 Crore is on account of the judgment and Order dated 07.08.2019 passed by the Hon‘ble Supreme Court in contempt petition(Civil) No.1766-1767 of 2018 filed by TSPL and Contempt petition(Civil) Nos.1277-1278 of 2018 filed by NPL. Further, the Commission vide Order dated December 24, 2019 approved the recovery of the said amount through separate surcharge of
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Rs. 0.30/kWh for the period of twelve (12) months commencing from January 1, 2020. Further, the determination of Tariff is the prerogative of the Commission. Commission’s View: The objector may note the reply of PSPCL. However, grant of subsidy to the consumers is the prerogative of the Commission. Objection No.26: Pathankot Road Manufacturers Association. Issue No.1: Peak Load Hours: For the last 40 years, timing of PLH were for 3 years i.e. from 6 to 9 PM or so. After the introduction of TOD, it has been increased to 4 hours i.e. 6 to 10 PM. This is set back to industry. It is worthwhile to mention here that in the starting of TOD, PLH were 3 hours but later on it was increased to 4 hours without any need. PSPCL’s Reply: Determination of tariff, rebate or surcharge to any category is prerogative of the Commission as per Electricity Act, 2003 on the basis of data supplied by PSPCL in the ARR, keeping the interest of stakeholders in view. Commission’s View: Noted. Issue No.2 - Rate per unit during PLH and Night Usage: During PLHs Rs 2/- are charged from the industry whereas during night usage, rebate of Rs 1.25 is given. It should be both ways. Either PLHs should be charged Rs 1.25 per unit or night rebate should be Rs 2.00 per unit. PSPCL’s Reply: There are certain times in a day when the demand for electricity is at its peak and certain times where it falls, this distorts the load curve of the Utility. To flatten the peak and implementing various energy conservation measures, electricity is made expensive during peak hours so that consumers use less electricity during these hours. Electricity charges during off peak hours are also reduced as an incentive for people to use more electricity during the off peak hours. Commission’s View: The objector may note the reply of PSPCL. Also refer to Para 5.2 of this Tariff Order. . Issue No.3 - Restriction of Minimum rate of unit/night usage: Minimum rate is fixed at Rs 4.45 per unit. Units using electricity at night are unable to get the benefit due to this minimum rate. Minimum rate should not be applicable for night usage units. PSPCL’s Reply: Regarding the matter of capping, the Commission in its Order dated 13.09.19 in Review Petition No. 5 of 2019 filed by industrial consumers, has decided that concessional/ discounted tariff can be provided subject to certain limitations only, it was decided to limit the same to Rs. 4.45 per kVAh, being the marginal cost to generate additional energy. Commission’s View: The suggestion is noted. Also refer to Para 5.2 of this Tariff Order. Issue No.4: Threshold limit/excess consumption: Lower rate of electricity is given to industry which is using more electricity as compared to last 2 years. Consumption should be compared with one year i.e. last year only. Secondly, this should also supersede the minimum rate clause. PSPCL’s Reply: It is intimated that determination of tariff, rebate or surcharge to any category is prerogative of the Commission as per Electricity Act, 2003 on the basis of data supplied by PSPCL in the ARR, keeping the interest of stakeholders in view. Regarding the matter of capping, the Commission in its Order dated 13.09.19 in Review Petition No. 5 of 2019 filed by industrial consumers, has decided that concessional/ discounted tariff can be provided subject to certain limitations only, it was decided to limit the same to Rs. 4.45 per kVAh, being the marginal cost to generate additional energy. Commission’s View: The suggestion is noted. Also refer to Para 5.1 of this Tariff Order. Issue No. 5 - Payment through Credit Card/Charges: PSPCL has made a lot of arrangements for online payment of bills. Payments through Amazon,
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Paytm are free of Charge but the PSPCL is charging 0.75% of bill amount if the payment is more through website of PSPCL through Credit Cards. This is not justifiable. There should be Cap of maximum charges as per other payments options. PSPCL’s Reply: The issue does not relate to the Tariff Petition filed and shall be dealt separately. Commission’s View: The objector may note the response of PSPCL. However, facilitating online payments is in the interest of the PSPCL. Objection No.27: Federation of Jalandhar Industrial and Traders Associations. Issue No. 1: Demand of power @5 Rs/unit Punjab Govt. had promised us in 2017 to provide power @ Rs. 5 Per unit to all the industries. But PSPCL implemented 2 Part Tariff simultaneously. This implementation has worsened the situation of small-scale industries. Early industry was getting power @ 7.35 Rs. Per unit. Now the industries consuming less power are getting bills @ 9-10 Rs. Per unit because of 2 part tariff. PSPCL’s Reply: Single Part tariff has been converted into Two Part Tariff at an average utilization factor (U.F.) of each category. Two Part Tariff for respective categories has been split at certain U.F., there may be consumers having UF above the Utilization Factor at which the tariff has been designed and consumers having Utilization Factor below the level of designed Utilization Factor. In case we fix MOR tariff equal to Single Part Tariff, all consumers having UF above designed Utilization Factor shall be paying less than Single Part Tariff determined by the Commission and all consumers having UF below designed Utilization Factor will be paying the revised Single Part Tariff only, though they were required to pay higher than revised Single Part Tariff as per designed Two Part Tariff. Commission’s View: The objector may note the reply of PSPCL. However, subsidy is in the purview of the State Government. Issue No.2- Fixed Charges Industry is going through big crises from a very long time. Currently industry is burdened with the fixed charges that are calculated on Sanctioned Loads. This is a big injustice. Fixed charges should be calculated on MDI instead of Sanctioned Load. PSPCL’s Reply: Fixed charges are to be calculated on Sanctioned Load only. Commission’s View: The fixed charges are levied at 80% of the contract demand or actual MDI whichever is higher. Issue No.3: Limit of SP connection & MS connection There is a demand going on from a very long time. Limit for Small Power Connection should be increased to 50 KW & Medium Supply should be increased to 200 KW in order to help the industrial growth. PSPCL’s Reply: The determination of Tariff is the prerogative of the Commission. Commission’s View: The Commission notes the suggestion. Issue No.4: Burden of 1420 Crore Rs. On PSPCL Consumers PSPCL is going to collect Rs. 1420 Crore in the shape of new charges to its consumers, which is to be paid or has been paid by PSPCL as the washing charges of Coal of Thermal Plants of Rajpura & Talwandi Sabo for the period 2012-13 to 2019. The, Coal washing charges has to be paid by the producer plants & not PSPCL who is only the distributor. This is direct injustice Industry in not in a situation to bear this burden. Govt. should take measures to help industry in growth instead of harassing & burdening it. PSPCL’s Reply: The amount of Rs.1423.82 Crore is on account of the judgment and Order dated 07.08.2019 passed by the Hon‘ble Supreme Court in contempt petition(Civil) No.1766-1767 of 2018 filed by TSPL and Contempt petition(Civil) Nos.1277-1278 of 2018 filed by NPL.Further, the Commission vide Order dated December 24, 2019 approved the recovery of the said amount through separate surcharge of
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Rs. 0.30/kWh for the period of twelve (12) months commencing from January 1, 2020. Commission’s View: The objector may note the response of PSPCL. Objection No. 29: CYCLE TRADE UNION (REGD). Issue No. 1: Our Association strongly oppose any increase in tariff as well as fixed charged for all types of consumers of Punjab because we did not trust the inflated, enhanced, created as well as fabricated shown figures in above said petitions without the production of Audited-Certified sheets of the PSTCL and PSPCL for the year 2017-18 and 2018-19 to check the truth and irregularities of PSPCL and PSPCL. Moreover, the tariff of Punjab is already unbearable. The PSTCL and PSPCL are white elephants of Punjab. These should be handed over to the payers as is done by the Central Government. PSPCL’s Reply: ARR is being prepared and submitted before the Commission as per the regulatory principles set by the Commission. The methodology adopted by PSPCL for truing up for FY 2018-19, RE for FY 2019-20 and MYT petition for FY 2020-21 to FY 2022-23 is very well elaborated in the Petition and is in line with the regulatory principles set by the Commission and PSERC MYT Regulations. Further, the determination of Tariff is the prerogative of the Commission. Commission’s View: The Revenue gap is determined by the Commission keeping in view the expenses and income as per MYT Regulations. The Tariff Order is issued after prudence check and due diligence. Objection No. 30: Apex Chamber of Commerce.
Issue No.1: TOD night Tariff inclusive of HT Rebate In compliance to APTEL orders to determine voltage wise category wise cost of supply to determine cross subsidies based on cost of supply in line with Electricity Act 2003 and to gradually reduce the same, PSPCL carried out the study on Cost of Supply, which was a part of ARR 2013-14 and PSERC accepted methodology II of the study and Voltage wise and category wise Cost of supply for 2013-14 in TO 2013-14. Accordingly, recognizing that cost of supply in case of 66 KV consumers is less than 11 KV consumers, HT rebate for such consumers was introduced. The practice is since continuing and rebate of Rs 0.25 /unit for 66 KV is being granted. We had been requesting through comments on ARRs for the previous years to further increase the HT rebate as 66 KV consumers are not fully compensated with meager 25 Paisa HT rebate. However, we were surprised to find that in the Tariff order 2019-20, PSERC ordered that Energy Charge during 8 hours of night period for 8 months will be capped at Rs 4.45 inclusive of HT rebate. No such clause existed during 2018-19 and HT rebate was granted in addition to Tariff of Rs 4.28 fixed for night period. There was no request by PSPCL in the ARR for such capping. Thus, after the grant of subsidy by GOP, 66 KV consumers were charged Rs 4.03 as EC during TOD night period in 2018-19 whereas in 2019-20, they have been charged Rs 4.45 increasing their tariff by 42 paisa during night hours against 11 paisa during balance 16 hours of 8 months. This action has hit the 66 and 220 KV consumers very hard as all consumers at 11, 66 and 220 KV consumers are paying same Energy charge of Rs 4.45 during TOD night hours, thereby withdrawing even the meager benefit granted due to difference in Cost of Supply as per APTEL orders. By this action, PSERC has presumed that the cost of supply is same for all voltage levels during night hours which are not correct. We request that while issuing tariff order for 2020-21, the status of 2018-19 may be restored and in view of large difference in cost of supply of 11 KV and 66 KV, the HT rebate may be further increased. The voltage surcharge is being levied in percentage terms i.e. a consumer required to take supply at 66 KV but taking supply at 11 KV is levied voltage surcharge of 10% but voltage rebate is flat 25 paisa per unit. Therefore, we request that Voltage rebate be increased proportionately and fixed in percentage terms. PSPCL’s Reply: The determination of tariff, rebate or surcharge to any category is prerogative of the Commission as per Electricity Act, 2003 on the basis of data supplied by PSPCL in the ARR, keeping the interest of PSPCL in view. Commission’s View: The objection is noted.
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Issue No.2: Maximum overall rate (MOR) for the industry under two part tariff system. PSERC introduced two part tariff system retrospectively with effect from 1/4/2017 vide tariff order dated 23.10.2017 but was later reviewed and modified vide order dated 9.11.2017 to single part system from 1.4.2017 to 31.12.2017 and two part system was made applicable for 3 months of 1.1.2018to 31.3.2018.This was after the industry brought the difficulties to the notice of the PSPCL, GOP and this Commission. One of the adverse impact of the two part tariff is the exponential increase in per unit cost after considering the impact of fixed charges for low end industries passing thro‘ low demand phase due to recession in economy or low utilization factor etc.Though the fixed charges have been kept lower for low end consumers but per unit impact is still very higher for Small and Medium Enterprises having contract demand of above 100KVA. The fixed charges for the consumers falling in the category 100 KVA – 1000 KVA for the category of PIU industry is Rs170/KVA/Month and Energy Charge of 593 paisa per unit.The fixed charge works out to 24paise per KVAH per 100 % utilization factor and for a MSME consumer running his factory for 4 hours a day for 20 days will work out to be 213 paisa per unit and total billing with 20% ED+IDF works out to (593+213) X 1.2 = 967 paisa per unit and more than Rs 12 per unit during peak hours of Peak TOD. The rate per unit will increase if the usage reduces further due to market conditions or low demand phase as happened in the recent past. Keeping in view the difficulties of such consumers, GOP was kind enough to agree to the concept of MOR for the industry for the period 1.1.18 to 31.3.18.Thereafter the MOR facility has been withdrawn. It is a well-known fact that SMSEs are the backbone of Punjab economy and business environment for them must be to facilitate their operations. PSPCL has not touched the issue in Chapter 5 of the ARR titled Proposed tariff for 2020-21. Keeping in view the genuine difficulty of the lower end consumers employing thousands of workmen and as approved by GOP also, we request the Commission to introduce the Maximum Overall Rate for industryto give relief to industry operating on the margin otherwise these are bound to suffer financially causing huge blow to the efforts of GOP to revive the industry in Punjab. PSPCL’s Reply: Single Part tariff has been converted into Two Part Tariff at an average utilization factor (U.F.) of each category. Two Part Tariff for respective categories has been split at certain U.F., there may be hundreds of consumers having UF above the Utilization Factor at which the tariff has been designed and hundreds below this designed Utilization Factor. In case we fix MOR tariff equal to Single Part Tariff, all consumers having UF above designed Utilization Factor shall be paying less than Single Part Tariff determined by the Commission and all consumers having UF below designed Utilization Factor will be paying revised Single Part Tariff only, though were required to pay higher than revised Single Part Tariff as per designed Two-Part Tariff. This will result in perpetual revenue loss. In view of PSPCL, there should not be MOR concept in two-part tariff system or it has to be fixed sufficiently higher than Single Part Tariff. Commission’s View: The Commission agrees with PSPCL that there should be no maximum overall rate (MOR) concept in the two part tariff system.
Issue No.3: One tariff for LS industry (Removal of sub categories based on CD) In single part tariff, same tariff rate was applicable to all consumers of the category, in two-part tariff, sub categories have been created based on the CD. The tariff i.e. fixed and energy charges both have been kept lower for consumers with lower CD. However, the conversion of single part tariff to two-part tariff for revenue neutrality and subsidy levels were worked out for all PIU consumers treating them as one category. Thus, such LS consumers with CD between 100 to 1000KVA are being subsidized at the cost of consumers with CD above 1000 KVA. This sub categorization within one category of industry gives heart burning to consumers at the margin. Thus, a consumer with 950 to 990 KVA Demand is unduly benefitted compared to a consumer with 1010 to 1050 KVA demand since the per unit effective cost of power increases abnormally for the later consumer. It is also pointed out that the basis for this categorization i.e. Contract demand is not a valid basis for differentiation as per Section 62(3) of the Act 2003. Sub categorization be dispensed with immediately and MOR be introduced which will take care of low utilization factor of industries appropriately. Electricity is a commodity and tariff should be same and linked with CD and consumption only and different tariff rates fixed for consumers having low and high CD & Consumption is against the Section 62 (3) of Electricity Act 2003 which no-where provides different tariff based on connected load or consumption. We also request that while re-fixing tariff for any category, revenue neutrality need to be ensured for PSPCL as a whole and not for that category.
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PSPCL’s Reply: It is the prerogative of the Commission. Further as far as the proposal sent by PSPCL is concerned it is submitted that revenue neutrality has been considered by PSPCL. Commission’s View: Sub-categories within the LS category were created based on their utilization factors. However, the suggestion is noted. Issue No.4: TARIFF FOR POWER INTENSIVE LS INDUSTRY (PIU): In Tariff Order for 2014-15, while adopting KVAH tariff, PSERC had approved the tariff of Rs 6.33 per KVAH for PIU industry against 6.33/KWH prevailing in 2013-14. Thus power factor incentive available to us in 2013-14 was withdrawn. However, the tariff of general industry was lowered from Rs 6.33 to 6.14 per unit. Same tariff continued for General and PIU categories in 2015-16. The PIU industry has been put in a disadvantageous position under two part tariff vis-à-vis general Industry while changing over from single part tariff to two part tariff as in addition to existing difference of 20 paisa per unit on 31.12.2017, PIU industry has been loaded additionally with Rs 65/KVA/Month of fixed charges on 1.1.2018.This difference is persisting thereafter. Though higher MMC was applicable earlier on PIU category. But it was not affecting 99% of consumers since their consumption was higher than MMC. However, the fixed charge is applicable irrespective of usage/non usage of power and the difference is now apparently hurting us. PSPCL recovers higher tariff from PIU consumers, but does not install any equipment at its end proving thereby that no harmful effect occurs on the grid due to PIU industry. Further, data supplied by PSPCL along two part tariff proposal indicate that PIU industry has high Utilization Factor than General Industry proving that assets deployed for PIU industry is giving higher returns to PSPCL. PIU industry also maintains higher Power factor than General Industry and thus has better voltage profile. It is unfair to impart undue preference to General Industry consumer‘s vis-à-vis PIU. As such justice demands that under the present surplus scenario, there is no justification for creating two sub categories under LS category and these needs to be merged. PSERC also acknowledged the arguments put forward by us 2018-19 and observed in Para 4.5.1 of TO as under:-
The Commission notes that the provisions for compliance with the specified harmonics standards, measurements/monitoring of harmonics currents generated by a consumer and provision for penal action against consumers contributing harmonic distortion in excess of the specified standards already exists in Regulation 24 of the Supply Code 2014. However, PSPCL is yet to submit a proposal before the Commission, regarding the penalty to be levied on the consumers contributing harmonic distortion in excess of the specified standards. Thus, till a system for measurements/monitoring of Harmonics currents
generated by a consumer and levy of penalty on the consumers contributing
harmonic distortions in excess of the specified standards is put in place, the
Commission decides to give some relief in the fixed charges payable by the Arc/ PIU
units. In reply, PSPCL in para iv of page 190 of ARR 2019-20 stated as under:-
In case of Arc Furnaces and other PIU industries, tariff should be kept higher, since they affect the distribution system of PSPCL more than that of General Industry as load of these PIU industry is nonlinear which distorts the voltage wave form and pollutes the power quality. The presence of harmonics in the system reduces the Distribution capacity of the utilities and increases losses.
In this regard we submit that CEA vide amendment dated 6.2.2019 of Central Electricity Authority (Technical Standards for Connectivity to the Grid) Regulations, 2007, has substituted the paragraph 2 and 3 of Part IV as under:-
”(3) Voltage and Current Harmonics. - (i) The limits of voltage harmonics by the distribution licensee in its electricity system, the limits of injection of current harmonics by bulk consumers, point of harmonic measurement, i.e., point of common coupling, method of harmonic measurement and other related matters, shallbe in accordance with the IEEE 519-2014 standards, as amended from time to time; (ii) Measuring and metering of harmonics shall be a continuous process with meters complying with provisions of IEC 61000-4-30 Class A. (iii) The data measured and metered as mentioned in sub-paragraph (ii) with regard to the harmonics, shall be available with distribution licensee and it shall also be shared with the consumer periodically. (iv) The bulk consumer shall install power quality meter and share the recorded data thereof
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with the distribution licensee with such periodicity as may be specified by the appropriate Electricity Regulatory Commission: Provided that the existing bulk consumer shall comply with this provision within twelve months from the date of commencement of the Central Electricity Authority (Technical Standards for Connectivity to the Grid)(Amendment) Regulations, 2018. (v) In addition to harmonics, periodic measurement of other power quality parameters such as voltage sag, swell, flicker, disruptions shall be done as per relevant International Electro technical Commission Standards by the distribution licensee and the reports thereof shall be shared with the consumer. (vi) The distribution licensee shall install power quality meters in a phased manner within three years from the date of commencement of the Central Electricity Authority (Technical Standards for Connectivity to the Grid)(Amendment) Regulations, 2018 covering at least 33% of the 33 kV substations each year.”
Thus PSPCL cannot continue to reiterate the same arguments time and again. When connectivity standards are not differentiating between types of industries, PSPCL cannot take the shield of voltage sag-swell, flicker and harmonics etc. The PSERC is requested to look into it keeping in view the benefit accruing to PSPCL on account of higher Power factor and bulk consumption i.e. improved voltage profile and reduced line losses and above all, all the expenditure on equipment installed being borne by the consumer and merge these two categories. PSPCL’s Reply: Refer PSPCL‘s reply in issue No. 12(2) of Objection No. 12. Commission’s View: Refer Commission‘s view in issue No. 12(2) of Objection No. 12. Issue No. 5: Increasing the eligible Contract Demand on 11 KV to 4950 KVA The Commission has already increased the contract Demand on 11 KV Voltage from 2500 KVA to 4000 KVA vide 2
nd amendment of Supply Code Regulations 2016 dated 5.10.2016. For availing
demand above 4000 KVA, voltage connectivity is required at 66 KV. We have been requesting the Commission to increase the eligible limit of CD on 11 KV to 4950 KVA. However, PSPCL has been opposing the suggestion on the plea that it will increase the T&D Losses of the utility. In this regard we reiterate that the issue needs to be considered from the revenue side rather than Loss. As per data submitted by PSPCL in ARR, The number of consumers for 2020-21 having CD above 2500 KVA are only 258 Number with demand of 2786 MVA. Prior to the Amendment, all consumers above 2500 KVA were connected at 66 KV. Only those consumers having demand between 2500 -- 4000 KVA and connected at 11 KV presently may seek extension of CD to 4000 – 4950 KVA if this is permitted. The number will not be such which may disturb the T&D Loss of the licensee. In any case, the losses can be brought down by augmenting the conductor of the 11 KV line to the higher size at the cost of consumer. Therefore the apprehensions of PSPCL on this count are not correct. Further, the erection of new 66 KV lines and towers in the existing already developed industrial areas is difficult due to permanent structures already constructed posing serious right of way problems. The release of additional Demand under such conditions will be technically non feasible depriving the PSPCL of possible additional revenue. However if increased CD is allowed on existing 11 KV line, there will be very minor and negligible overall increase of losses but PSPCL will start getting Rs 300/KVA/Month of fixed charges and Rs 6 per unit on additional demand and consumption which will be much above the losses. We agree to bear the cost of upgrading of the 11 KV line conductors and other equipment. New Induction furnaces are of 3800 to 4000 KVA which are more efficient with less consumption/ton of scrap handled. If the CD is increased to 4950 KVA, the consumer can plan for a pipe plant or rolling mill along with the upgraded induction furnace enhancing the viability of the project which will motivate the industry to invest in the project. This will enable the GOP to achieve the target of setting up additional industry in Punjab. PSERC is requested to consider our proposal as it will be a win win situation for both consumers and PSPCL as well as for the State. PSPCL's Reply: On the persistent demand of industrial consumers, 11 kV supply voltage was increased for loads from 2500kVA to 4000kVA vide 2
nd amendment to Supply Code-2014 notified by PSERC vide notification
dt. 05/10/16 and instructions in this regard were circulated vide Commercial Circular No. 51/2016 dt. 11.11.16. The Commission has already considered the prevalent voltage for loads in the other states and technical constraints in allowing the same. The theoretical power carrying capacity of 11 kV line
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with 100mm2 ACSR conductor is 4839 kVA. However, loading the line up to its maximum capacity will
stress the system to a greater extent and therefore, the same may not be accepted and moreover induction furnaces and rolling mills have jerk load, though it is not recorded but it has impact on the system. Commission’s View: The issue does not relate to the instant petition. Issue No.6: Grant of Night Rebate and levy of Peak Charge in monthly bills The TOD is applicable on LS, MS, BS and NRS consumers with CD exceeding 100 KVA. Thus thousands of consumers become liable to pay peak charge or receive night rebate at 00 hours of the appointed day. In addition to above, now, PSPCL has changed the billing cycle of industrial consumers from 1
st of each month to 21
st of each month. PSPCL‘s action put the LS industrial
consumers in great difficulty during October billing as billing for peak charges for 21st Sept to 30
th Sept
and night rebate for 1st Oct to 20
th Oct was charged on proportionate basis in the absence of reading
of 1st Oct. Consumers did not use power during peak hours from 21
st to 30
th Sept but were billed for
Peak Charge on proportionate basis for power consumed during 1st to 20
th Oct treating this as
consumption for 21st Sept to 20
th Oct. Similarly night rebate was reduced as night consumption of 1
st
to 20th Oct was taken for 21
st Sept to 20
th Oct 2019.
Thus the bills issued are being prepared by PSPCL as per their suitability. The consumer is made to suffer in the process and peak charges are claimed in excess and night rebate is curtailed. We fear that unless suitable directions are issued to PSPCL, same thing will happen on 1
st of June
this year when TOD tariff will change over. Therefore we request that i) PSPCL be directed to start AMR on all LS consumers ii) Till AMR is introduced, manual readings need to be taken on 1
st of June and 1
st of Oct in
addition to readings on 21st of each month.
iii) Or else the TOD changeover should take place on the meter reading date i.e.21st of June and
Sept each year. We also request that penalty for wrong billing is introduced in the Standard of Performance. PSPCL's Reply: PSPCL has already taken up the project of AMR on all consumers having load > 100 KVA. Presently, PSPCL has 10549 (6459 in SAP and 4090 in NON SAP) consumers with load > 100 KVA. A total of 7927 (6201 in SAP and 1726 in NON SAP) have been installed with AMR facility. The remaining 2622 (258 in SAP and 2364 in NON SAP) consumers should be brought on AMR in near future. Commission’s View: PSPCL to address the issue to the satisfaction of consumers. Issue No. 7: Revenue Assessed and Revenue earned as per Tariff Orders in Projections and
True Up. Perusal of the TOs being presented year after year indicate that the revenue earned as per True Up is always less than the revenue projected in the tariff orders. It is evident that recovery is less by around 600 to 2700 Cr and there is some serious error in the methodology of assessment of revenue and revenue actually earned. The reasons for these needs to be investigated as PSERC is permitting increase in tariff to meet the ARR of licensee but PSPCL is not able to recover the revenue from existing consumers shifting the burden on future consumers who are not responsible for the same. PSPCL's Reply: ARR is being prepared and submitted before the Commission as per the regulatory principles set by the Commission. The methodology adopted by PSPCL for truing up for FY 2018-19, RE for FY 2019-20 and MYT petition for FY 2020-21 to FY 2022-23 is very well elaborated in the Petition and is in line with the regulatory principles set by the Commission and PSERC MYT Regulations. Commission’s View: Refer to Para (Revenue) 2.29 and 3.31 of this Tariff Order. Issue No.8 - Agriculture Tariff less than Cost of Supply i) The absolute cost of power supplied to agriculture sector has been growing consistently at very high rate. Providing the power at the subsidized rate of Rs 5.28 per unit, which is far less than the actual cost of power will seriously affect the interest of industrial consumers in the State. ii) Induction furnace and Rolling mill industry (PIU Category) to which the Objector belongs consumes power extensively and the cost of power is more than 50-60% of the operating costs and this is the reason that almost 50% industry was closed and rest of them was running in one shift prior to grant of
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subsidy by GOP. The reason for prevailing high tariff for PIU industry is that they have to bear the cross subsidy for cheap power being supplied to agriculture. iii) The Commission is requested to fix the quantum of subsidized power to be supplied to agriculture and quantum above that ceiling be charged at full rate so that cross subsidy is kept in manageable levels. PSPCL's Reply: The determination of cross subsidy is the prerogative of the Commission. Commission’s View: The Commission has always endeavored to reduce the cross subsidy as provided in the Tariff Policy. However, It is Govt.‘s purview to grant subsidy to different categories of consumers. Issue No.9 - Return on Equity
PSERC has been allowing Return on equity as per CERC Regulations which was 15.5% for the period 2014-18 and around 15.93% for 2020 onwards. This ROE is being retained by PSPCL and not transferred to GOP in whose name the equity stands in the balance sheet of the Company on the plea that the company is in loss and does not have surplus funds to pay dividend.
It is evident that Return on Equity being recovered by PSPCL is being adjusted against unapproved expenditure/other liabilities and the tendency is continuing unabated. PSPCL will not introspect to economize and work efficiently till the ROE is continued to be paid.
It is also noted that ROE starts accruing only after the assets are capitalized whereas in the ARR, PSPCL has claimed contribution of equity simultaneously with the loan amount which is wrong. Further to above, we invite the kind attention of the Commission to the Tariff order issued by UPERC for ―Determination of APR for FY 2017-18 & FY 2018-19 and ARR for FY 2019-20 and True up of ARR for FY 2016-17 for UPPTCL‖ in which
i) ROE is granted for equity corresponding to 30% value of assets capitalized. ii) ROE is only 2% in view of large gap in revenue earned and requirement.
In view of the huge equity addition proposed by PSPCL for conversion of UDAY bonds issued to GOP while taking over 75% of long-term loans, amount of equity is set to increase from present 6071.43 Cr to 22439.49 Cr, in 2020-21 and ROE is set to increase from present Rs 942.68 Cr to 2266.76 Cr. The situation being similar to UP, We request the Commission to seek voluntary reduction of ROE from GOP, PSPCL and PSTCL so as to give relief to the consumers. PSPCL's Reply: The Government of Punjab will be converting the UDAY loans of Rs.15,628 Crores into equity. As per PSERC MYT Regulations PSPCL is entitled to return on equity of 15.50% on the equity amount. Commission’s View: Return on Equity is considered by the Commission in-line with PSERC MYT Regulations. Issue No.10 - Wrong Billing of Consumers opting for Special Night tariff Many of our members have opted for Special Night Tariff and running the industry for 12 hours between 10 PM to 10 AM of next day. Due notices of changeover were given to PSPCL and most of the consumers opted from 1.10.2019. However, PSPCL had already changed their billing cycle to 21
st
of the month to 20th of next month but the meter readings on 1
st Oct were taken only for few
consumers who took up the matter with local SDOs. Then CBC/IT cell did not update the billing software for such consumers and they were issued the bills on full rate as per normal billing. PSPCL officers advised the consumers to deposit the bills in full assuring that bill on Special Night tariff will be prepared next month and excess amount will be adjusted. However, all such consumers are still getting the bills in full as PSPCL has not updated the software till date. The Association had brought the matter to the notice of EIC/Central Zone Ludhiana but so far no action in the matter has been taken. The consumers are still getting bills initially on full rate and thereafter, MMTS officers have to be brought to down load the data to extract consumption between 10 PM to 6 AM and 6 AM to 10 AM for the billing period, bring the consumption to SDO who informs the CBC and the bill is amended thereafter by CBC.
Thus the efforts of PSERC to increase night consumption for flattening the load curve are being negated by PSPCL. The consumers are getting only part relief of 50% of Fixed Charge instead of 80% of fixed charge as Energy charge is equal to other consumers. The efficiency of the workers during night hours also decreases further reducing the benefit. Then waiting for the refund of 30% of Fixed Charge for months and complacency of PSPCL in the matter are negative factors which need to be addressed by checking with PSPCL and giving appropriate directions so that PSERC orders are implemented in true spirit.
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PSPCL's Reply: With the introduction of special Night Tariff a new time slot was required for 6.00 AM to 10.00 AM which is not available in current meters installed in field. Procuring compatible meters at short notice is not viable. Accordingly, it was decided to upload a patch in the energy meters for creating additional time slot in addition to existing 04 time slots. The uploaded patch requires the DDL downloading for arriving at energy consumption for 6.00 AM to 10.00 AM. With the patch it becomes essential that DDL be downloaded with reading itself and be forwarded to concerned CBC for billing so that consumer could be served with actual bill. Dealing matter productively, PSPCL replaced meters of almost all Night Tariff consumers with meters uploaded with patch for recording reading from 6.00 AM to 10.00AM and these readings of the slot can be downloaded through DDL only.
DDL of most of Night Tariff consumers is done on date of reading only and consumers of Night Tariff are getting refund systematically. However, there can be some cases where DDL is done after reading date and consumers get refund afterwards. Commission’s View: PSPCL is directed to address the issue to the satisfaction of the consumers. 12. Suggestions and requests: (a) The special night tariff which is applied from October to March, should be available for full year. (b) Under Two Part Tariff, it is very difficult to control production in the times of economic slowdown,
recession in market etc. As requested many times the Two Part Tariff should be with Maximum Overall Rate (MOR). This, Two Part Tariff without MOR is resulting into closure of many industrial units.
(c) The industry which is being categorized as PIU is charged highest tariff whereas it is most profitable connection for PSPCL. Therefore we request you to make single industrial tariff in respect of General or PIU industry. An industry is categorized as PIU because of the harmonics it generates. We request the Commission to make provision that any unit controlling harmonics within the prescribed limits shall be categorized as General Industry.
(d) Presently even under PIU category tariff, there are different tariff rates as per Contract Demand which again creates unfair competition between the same type of industry but with different Contract Demand.
(e) The voltage rebate for connections on 66KV should be increased. (f) In the Tariff Order 2019-20, cumulative effect of ToD rebate and voltage rebate on the Energy
Charges at any time shall be limited to the lowest Energy Charge of Rs. 4.45 per kVAh. We bring to your attention that this minimum tariff of Rs 4.45 has been calculated at 11KV supply voltage and consumers at 66KV voltage are incurring extra cost which should be given as voltage rebate and if voltage rebate is withdrawn this benefit is being passed on to PSPCL which is not part of ARR. In fact almost energy charges should be calculated at different supply voltages and fixed accordingly.
Commission’s View: The suggestions are noted. Objection No. 31: Laghu Udyog Private Limited. Issue No.1: Concealing Actual Sale Figures of kWh Consumption: 1. That, PSPCL (Punjab State power Corporation Ltd) being licensee has not shown correct picture of actual sales. Tariff of many categories are in kVAH & kVA base, but PSPCL has giving the figures only in kWH & kW basis by converting the KVAH consumption into kWH by adopting 0.9 Power Factor. Whereas while designing Tariff on kVAH base, average Power Factor was taken as 0.95. Thus, conversion of power sale in kVAH can‘t be converted in kWH without adopting Power Factor as 0.95. PSPCL is concealing actual sale figures of kWH consumption on this issue, we reiterate As Under: A. The PSERC directed PSPCL to start recording the kVAH reading alongwith kWH reading in respect of LS General, LS Power Intensive, MS, Bulk Supply HT, Bulk Supply LT, DS with connection more than 100 kW and Railway Traction with effect from 01.04.2014. These instructions of the PSERC was circulated by PSPCL vide Commercial Circular No. 21 / 2014 Dt. 24.04.2014. B. PSPCL has issued Commercial Circular No. 49 / 2014 Dt. 16-10-2014 in compliance to orders issued by the PSERC. This circular gives the method with which kVAH consumption is to be converted on different Power Factors, average Power Factor of which comes to 0.95. Thus, in absence of true consumption in kVAH (which is available with PSPCL). The PSERC can convert KVAH consumption into kWH consumption by adopting Power factor 0.95.
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C. That, PSPCL has issued all the bills to the consumers by giving readings in KWH, KVAH and KVA. PSPCL should disclose actual KWH consumption which has already been recorded and shown on consumer bills. It is also pertinent to mention here that, consumers are maintaining Power Factor even upto unity. Thus, kVAH consumption is not required to be converted into KWH consumption when PSPCL is already having sales figure of KWH consumption available with them, but they are concealing the same. This wrong figure given by PSPCL is false seems to have been manipulated to show revenue deficit. In view of above, kindly verify the wrong sales figures reflected and correct the same. D. True up should be approved only on the basis of Norms and Parameters approved in annual performance review of FY 2018-2019 and after going through Controller General Audit Report. PSPCL's Reply: PSPCL is not concealing the sales as mentioned by the objector. The energy sales in kWH and kVAh for FY 2018-19 has been supplied to the Commission in the deficiencies raised. Further, the category, sub-category and slab wise actual sales in kWH and kVAH for FY 2019-20 H1 onwards have been supplied to the Commission. Commission’s View: The objector may note the response of PSPCL. Issue No. 2(I) 1. Controller Audit General Report has not been provided. PSPCL should be directed to put the same on their website for view and comments thereupon. It is requested that CAG Report must be kept in view. PSPCL's Reply: Refer PSPCL‘s reply in issue No. 3 of objection No. 13. Commission’s View: Refer Commission‘s view in issue No. 3 of objection No. 13. Issue No. 2(I) 2 PSPCL has charged full cost of Distribution Lines, Service Lines and Breakers from consumers upto the load of 30,000 MW (Thirty Thousand Mega Watt) upto 2014 when kVA tariff was made applicable and thereafter further demand of approximately 4,000 MVA (Four Thousand Mega Watt) is released by the Distribution Licensee. But we are strange to know that System can take up load upto 12,000 MVA (Twelve Thousand Mega Watt) only. PSPCL's Reply: This issue is not related to the Tariff Petition filed by PSPCL and shall be dealt separately. Commission’s View: The objector may note the response of PSPCL Issue No. 2(I) 3 Keeping in view, the above, charging of Fixed Charges on 80% of Sanctioned Contract Demand is not fair. Fixed Charges should be charged from LT consumers at 40% of Sanctioned Demand, HT Supply at 60% and EHT consumers at 75%. PSPCL's Reply: The determination of Tariff is the prerogative of the Commission. Commission’s View: Fixed Charges are determined on the basis of utilization factor of the consumer category. Issue No. 2(II) - Voltage Surcharge: Issue No. 2(II) 1. Certain categories are receiving supply at lower voltage than specified and are wrongly, illegally enjoying supply without paying Voltage Surcharge due to lacuna left in General Condition of Tariff. It is mandatory to levy Voltage Surcharge @ 15% on consumers for getting supply at 400 Volt against specified voltage 11000 volts as per Clause 13.1(V)(b) of General Condition of Tariff. There are many consumers existing as on 31.03.2010 who have been wrongly, illegally been allowed to get supply at lower voltage. There is no provision in Act, Rules or in Regulations which allows to discriminate consumers having same load factor in same geographically area. In this case of existing consumers getting supply at 400 volt against specified voltage of 11000 volt should be directed to convert their supply voltage to specified voltage failing which they must be charged Voltage Surcharge @15% on tariff. In the similar case, Hon‘ble Supreme Court has ordered to charge Voltage Surcharge. It is pertinent to mention that, loss of revenue from these consumers can‘t be overloaded to other consumers. Thus, such type of consumers should be directed to convert their supply to specified voltage or to pay surcharge. This will bring the true picture of sale. PSPCL's Reply: The exemptions from levy of voltage surcharge are as per General Condition of Tariff Clause 13.1(v),
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which is as under: (a) LS consumers existing as on 31.03.2010 availing supply at 33/66 kV but required to convert their system so as to receive supply at 132/220 kV will not be levied any surcharge related to supply voltage, till such consumers request for change of their Contract Demand. (b) DS/NRS/BS consumers existing as on 31.03.2010 catered at a voltage lower than specified in Supply Code 2014 will be liable to pay surcharge only in case of any change in Contract Demand. PSPCL agrees with the view point of Objector and proposes that the Commission may issue Order for such consumers to convert these system on specified voltage in a definite time period failing which they shall have to pay Voltage Surcharge. Commission’s View: The objection is noted. Issue No. 2(II) 2. PSPCL is billing consumers at different rates as per Slab Rates, Sub Category rates, main category rates, Supply Voltage wise, LT Supply, HT Supply but sales figures are shown just consolidate figures which is not giving true picture. The PSERC should get true picture of actual sale price calculated on actual sold category wise, slab wise and sub category wise. PSPCL's Reply: The energy sales and Revenue for FY 2018-19 and FY 2019-20 have been supplied to the Commission. Commission’s View: The objector may note the reply of PSPCL. Issue No. 2 (III): TOD Tariff Income: PSPCL has not shown tariff income of TOD Peak Hours rates slab wise, sub category wise. There are extra charges for using electricity during peak hours 06:00 PM to 10:00 PM for categories NRS / BS / MS / LS etc. income of TOD units used during peak hours 06:00 AM to 10:00 PM during paddy season has yet not been shown. PSPCL's Reply: PSPCL has filed the Tariff Petition as per PSERC MYT Regulations and submitted all information as desired by the Commission. Commission’s View: The Objector may note the response of PSPCL. Issue No. 2 (IV) Fuel Cost Adjustment: Fuel Cost adjustment charges (FCA) is also part of tariff. These charges have been charged from consumers, but figures of these charges have not been shown as unit sales charges. Thus, value of FCA earned need to be given. PSPCL's Reply: The revenue on account of FCA charges has not been supplied for FY 2018-19 as the FCA was subsumed in the energy charges, however from H1 of FY 2019-20 PSPCL has submitted the revenue from FCA in the formats supplied to the Commission. Commission’s View: The objector may note the response of PSPCL. Issue No. 2(V) Fixed Charges: Fixed Charges rates are applicable now on kVA basis as per slab wise, category wise and sub category wise. These should be calculated accordingly and true sale figures of Fixed Charges should be disclosed. PSPCL's Reply: The fixed charges are calculated as per the provisions of the PSERC MYT Regulations. Commission’s View: The objector may note the response of PSPCL. Issue No. 2(VI) : Share of BBMB: There is share of 1600 PSPCL employees with BBMB. But only 500 employees from PSPCL are working in BBMB resulting either payment of 1100 employees are paid extra or surplus staff available with PSPCL can be transferred to BBMB. Non providing of 1100 surplus employees to BBMB is creating burden on consumer tariff. Even if there is no surplus staff available with PSPCL in that case also they should recruit new staff of 1100 employees provide 1100 PSPCL employees in BBMB. This will give employment to unemployed youth of Punjab.
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PSPCL's Reply: The issue does not relate to the Tariff petition and shall be dealt separately. Commission’s View: The objector may note the response of PSPCL Issue No. 2(VII) - Consumer ACD (Security Deposits): There is sale of Rs: 42,000/- Crore approximately. Thus, Consumer Security Deposit for 1.5 month comes to Rs: 5,250/- Crore. But PSPCL is showing the same as Rs: 3,400/- Crore only. PSPCL has not updated Security Deposits inspite of directions by the Commission in Tariff Orders and by PSPCL through their commercial Instruction issued by Chief Engineer. PSPCL officers / Officials are not updating Security Consumptions actually deposited by consumers. Actual Security Consumption of consumers should be more than Rs: 5,250/- Crore. PSPCL's Reply: The issue does not relate to the Tariff petition and shall be dealt separately. Commission’s View : Refer to the directive No. 6.7 in this Tariff Order. Issue No. 2 (VIII) - Franchise Agreement: There are many connections released by PSPCL to different Colonies, Malls and Multiplex‘s. There is no provision for single supply connection to these categories except through franchise agreement. Sale under this category has not given. PSPCL (Licensee) should be directed to put the names of approved franchise with detail of load approved, load connected, and number of consumers running in franchise area. Income from this category has not been reflected. PSPCL's Reply: ARR is being prepared and submitted before the Commission as per the regulatory principles set by the Commission. Commission’s View: PSPCL is required to supply information directly to the Objector under intimation to the Commission. Issue No. 2 (IX): Income from shifting of lines, sale of scrap, sale of fly ash and sale of old
vehicles etc: Income from shifting of lines, Sale of Scrap, Sale of Fly Ash, Gain on Sale of Assets, Sale of Old Vehicles etc. etc has not been shown. Same needs clarification. PSPCL's Reply: The other income has been shown in the Petition as a part of Non-Tariff Income. Commission’s View: The objector may note the response of PSPCL. Issue No. 2(X) - Demand Surcharge: Demand Surcharge is applicable for using demand over and above the sanctioned kVA Demand. Income from demand Surcharge has not been shown. PSPCL's Reply: PSPCL has filed the petition as per the norms specified by the Commission in its Tariff Regulations. Commission’s View: PSPCL is directed to show income from each head separately. Issue No. 2(XI): Grant, Consumer Contribution and Amount of Uday Scheme can’t be
considered as Equity: PSPCL is considering these contributions as their equity which is against the Norms fixed by Commission. These amounts can‘t be considered as equity. PSPCL's Reply: The equity amount has been infused by the Government of Punjab and hence PSPCL is entitled to RoE on the equity infused. Commission’s View: Equity and Return on Equity is determined by the Commission in accordance with relevant regulations of MYT Regulation after prudence check. Issue No. 2(XII) Non tariff Income: All the amounts received from any account of business are Non-Tariff Income. Under the provisions of section 51 and 45 of Electricity Act 2003, all these incomes should be charged to revenue receipts.
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PSPCL's Reply: The Non-Tariff Income has been reduced from the ARR and submitted in the petition. Commission’s View: The objector may note the response of PSPCL. Issue No. 2(XIII) -Notifications U/S 45 And 181: It is settled law that, Notifications override administrative Orders / Instructions. Thus, we humbly request the Commission to issue Notifications for General Condition of Tariff, Schedule of Tariff after its approval as per the provisions contained in section 45 (2) Read with Section 181 of Electricity Act 2003. PSPCL's Reply: The query has been addressed to the Commission. Commission’s View: General Conditions of tariff and Schedule of tariff are part of the Tariff Order. Issue No. 2(XIV) - Two CGRF’s In Patiala and Ludhiana: 1. That, Dispute Settlement Committees seems to have been formed in violation to the provisions of Electricity Act. These committees were formed temporarily just to give speedy resolution of consumer disputes at local level. Continuations of these Committees i.e. Division Level, Circle Level and Zonal Level Dispute Settlement Committees functioning at Patiala and Ludhiana are not required now for the simple reason that, Two CGRF (Consumer Grievances Redressal Forum) one at PATIALA and second at LUDHIANA has already been constituted and are working under the provisions of Section 42(5) of Electricity Act 2003. 2. That, it is commonly said that staff with Licensee at divisional level of all the Divisions in North Zone is short by more than 70% of approved strength. Now in Ludhiana and Patiala, there is no need of continuing Dispute Settlement Committees and same needs to be abolished. This will save time and energy of officers / officials of PSPCL and they can do other works for consumers by devoting this time. Accordingly, some staff from the divisions having more than 50% strength can be transferred to Jalandhar. Furthermore there is no transparency of the Orders issued by Dispute Settlement Committees because their orders are not appearing on website of PSPCL or on the website of PSERC, whereas orders of CGRF are appearing on Website. Full bench of Hon‘ble Punjab and Haryana High Court has already held in the case of Ranbaxy Laboratories Ltd Vs. Punjab State Electricity Board cited in 2004 AIR (Punjab) 137 stating that, Electricity Act does not authorized the Distribution Licensee (PSPCL / PSEB) to make any law for settlement of civil disputes between consumers and Distribution Licensee (PSPCL / PSEB). Section 42 (5) of Electricity Act 2003 also mandates formation of CGRF (Consumer Grievances Redressal Forum) not the Dispute Settlement Committees. Thus, parallel Dispute Settlement Committees at same station i.e. Ludhiana and Patiala is not required because two different CGRF are already functioning. PSPCL's Reply: The dispute Settlement Committees were constituted by the Distribution Licensees as per the mechanism and procedure specified in the Consumer complaint handling procedure of the distribution licensee framed and notified by the Commission. DSC‘s play a vital role in addressing the complaints of consumers at local level as every consumer cannot approach forums for small billing/meter related issues. Therefore, DLDSC, CLDSC and ZLDSC should not be abolished but must be retained. However, if forums are established at each zonal level as has been envisaged in future then ZLDSC can be closed because of same location of ZLDSC and CGRF and scope of ZLDSC being covered in CGRF. Commission’s View: The issue does not relate to the Tariff petition. However, the objector may note the response of PSPCL. Issue No. 2(XV): Subsidy Under the provisions of Clause 8.3 of Tariff Policy 2016, it is categorically stated that ―The State Governments can give subsidy to the extent they consider appropriate as per the provisions of section 65 of the Act. Direct subsidy is a better way to support the poorer categories of consumers than the mechanism of cross subsidizing the tariff across the board. Subsidies should be targeted effectively and in transparent manner. As a substitute of cross subsidies, the State Government has the option of raising resources through mechanism of electricity duty and giving direct subsidies to only needy consumers. This is a better way of targeting subsidies effectively‖.
That, State Government has already levied Electricity Duty under the powers conferred with Section 65 of Electricity Act 2003. Thus, it is government to give cash subsidy to the consumers
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eligible for government subsidy. Thus, there should be no double burden on consumers i.e. one by charging Electricity Duty to pay subsidy and second through cross subsidizing the tariff. PSPCL's Reply: The provision of subsidy is the prerogative of the Government of Punjab. Commission’s View Subsidy and Electricity Duty are the prerogative of the State Govt. Issue No. 2(XVI) Issue No. 2(XVI) 1. Prepaid / Prepayment meters: As per Meter Regulations framed under the provisions of Electricity Act 2003, Supply Code and Related Matters Regulations framed by the Commission and Tariff Policy 2016 framed by Ministry of Power Government Of India, where it is clearly stated that, Prepaid / Pre-Payment meters should be used on consumers availing supply at Subsidized Tariff, Temporary Connections, Defaulting Consumers and Government Connections by installing Prepaid / Pre-Payment meters resulting no need of Meter Readers, Bill Distributors, Staff preparing Bills / Maintenance of Account and Cashiers. Moreover cash flow of Licensee will improve by getting advance payment. Supply Code and Related Matters regulations (2014) also mandates providing Prepaid / Pre-payment meters and to encourage supply on Prepaid / Pre-payment meters has allowed 1% rebate. The Commission should pass necessary Orders / Regulations for installing Prepaid / Pre-payment meters in Punjab. PSPCL’s Reply: PSPCL is procuring 96,000, 3 phase whole current smart meters, which can be used either in postpaid or pre-paid mode. For this tender enquiry no. MQP-145 has been floated by PSPCL and 3 no. firms namely M/s L&T Ltd., M/s HEPL & M/s Genus Power Infrastructure Ltd., have participated in the tender and presently, the sample meters are being tested for technical parameters by Sample Testing Committee at ME Lab Jalandhar, Regarding Single Phase Pre-paid meters tender enquiry for 10,000 meters has been floated by PSPCL and meters are likely to reach ME Labs within a span of six months. Commission’s View The objector may note the response of PSPCL. Issue No. 2(XVI) 2. Industry of Punjab is facing financial crises, we hereby suggest for providing Prepaid/Prepayment Meters to the consumers. This will reduce the carrying cost leading to reduce requirement of working capital of the Distribution Licensee. This will also eliminate associated cost involved in meter readings, billing and collections. Ministry Of Power, Government of India has also requested all the Electricity Regulatory Commissions of India to implement the policy of installing Prepaid / Prepayment Meters within 6 (Six) months from 16-01-2020 i.e. date of issue of these directions. PSPCL’s Reply: Regarding prepaid HT & LT CT meters, it is intimated that prepaid metering can be done only on whole current meters. It is not possible for CT connected and CT/PT connected meters. However, Electricity Act-2003 has provision for installation of pre-paid meter for consumers and in that case no security is required to be deposited/maintained. Electricity Supply Code-2006 and 2014 also have similar provisions. Prepaid metering is available in whole current meters only (single and three phase) and not in LT CT meters or HT meters. This fact has also been verified by representative of M/s L&T limited and M/s Secure Meters. For Industrial consumers as far as SP connections are concerned, pre-paid metering is thus possible. For MS connections having sectioned load up to 25 kw, pre-paid three phase whole current meters can be used but it is not possible to use LT CT pre-paid or HT pre-aid meters. Commission’s View The objector may note the response of PSPCL. Objection No.32: Nahar Fibres. Issue No.1: PSPCL cannot increase tariff year after year indefinitely. 1. PSPCL comes out with demand of 14 to 20% rise in tariff every year based on Projected ARR.
The Commission allows some expenditure, rejects some revenue requirement and ultimately 2 to 8 % rise is allowed.
2. The rise is being allowed despite the fact that i) There is increase in demand, both peak and energy, by 2 to 6% every year resulting
in additional revenue.
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ii) PSPCL is receiving huge amounts under Consumer Contribution, Govt Subsidy and grants. As per Balance Sheet attached with ARR, PSPCL received Rs 272.97 Cr in 2018-19 under this head.
iii) PSPCL is retaining the Return on Equity of Rs 942.62 Cr since 2010-11 and not transferring the same to GOP.
iv) To reduce the burden of surplus capacity, GOP has retired 860 MW thermal capacity of Bhatinda and Ropar plants.
v) Reducing burden of interest on GPF amount retained by PSPCL in previous years. vi) Changing the interest on Security from SBI rate to RBI rate. Etc etc.
3. The retail tariff of PSPCL has already reached to alarmingly high value and pinching the society in general. However, PSPCL is taking the society and consumers for granted to reimburse it the costs incurred thro tariff. The proposal of merging the Slabs of DS and NRS categories will further increase the monthly bills of the consumers which averages around Rs 6000/- per 2 months per family during summer months whereas Monthly Minimum Wages payable for highly skilled worker is only for 11486 as per GOP notification issued in November 2019. The situation cannot continue indefinitely and PSPCL has to put a stop somewhere.
4. We also request the Commission to amend the Regulations so that increase in expenditure of PSPCL should be met from the increase in sales and accompanying revenue.
PSPCL’s Reply: ARR is being prepared and submitted before the Commission as per the regulatory principles set by the Commission. The methodology adopted by PSPCL for truing up for FY 2018-19, RE for FY 2019-20 and MYT petition for FY 2020-21 to FY 2022-23 is very well elaborated in the Petition and is in line with the regulatory principles set by the Commission and PSERC MYT Regulations. Commission’s View: The Commission undertakes a detailed prudence check of the Tariff Petition and allows expenditure & losses as per the applicable MYT Regulations while deciding the tariff. Issue No.2: Distribution System for serving Rural Load including Agriculture. 1. As per press report which appeared on 26.12.2015 in ET, Punjab is losing about Rs 1200 Cr due
to higher T&D losses in many areas in Punjab. We further quote the figures given in the news as under:-
Maximum losses have been reported from 12 divisions in Amritsar, Tarn Taran and Sangrur, where figures exceed 25%. In Tarn Taran circle, which falls in the border zone, Bhikhiwind and Patti divisions have losses of 47.14% and 40.28%, respectively. Amritsar cricle‘s three divisions — West, Ajnala, and Sub-urban — have losses of 33.18%, 31.62% and 31.21%, respectively.
In the west zone, Malout division of Muktsar circle has losses of 33.28%. In the south zone, Patran division of Sangrur circle has losses of 30.24%. Divisions where losses are between 25 % and 30% are City Tarn Taran, Lehragaga, BhagtaBhaiKa, Zira and Baghapurana divisions.
2. An article by a retired PSPCL Engineer in HT of 17 January 2020 states that Bhikhiwind Division has losses of 54.84%, Patti has 52%, Tarn Taran as 40.71%, West Amritsar has 43.13%, Gurdaspur has 32.88%, Batala has 38.77%, Patran :36.47%, Jalalabad : 36.28%, Baghapurana : 35.78% and Malout : 52.83%.
3. These T&D losses were last available in Public domain in UDAY MOU submitted by PSPCL in 2016 ARR. These divisions are also appearing in the list annexed with UDAY scheme MOU. Thus PSPCL has failed to bring down the losses in these divisions in last 5 years though agreed to in UDAY agreement till date when UDAY scheme is getting over.
4. Theft of power is a major contributing factor for persisting high losses as almost all the divisions are predominantly serving rural areas, the inadequate capacitive compensation at the consumer end is also adding to the losses. It is a known fact that farmers are not installing the Capacitors on their motors for irrigation. The excess drawl of reactive power from the grid by agriculture pump motors increase the current drawl thereby increasing the losses. This not only disturbs the agriculture supply but also affects the industry getting supply from rural grids.
5. Thus, while there is urgent need to contain the theft in these high loss areas, the system also needs strengthening by providing on line capacitors at the H pole serving the tubewell by PSPCL.
PSPCL’s Reply: The query raised by the petitioner does not relate to the Tariff Petition filed and shall be dealt separately. Commission’s View: The objector‘s concerns are noted. PSPCL is directed to take strict action on theft as per the
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Electricity Act. Also refer to directive No. 6.1 regarding reduction in distribution losses in high loss divisions. Issue No. 3: Grant of HT rebate during Night Hours with TOD Night rebate 1. The Commission in its TO for FY 2019-20 fixed the min. tariff as Rs.4.45/unit under TOD night tariff including the HT rebate. In FY 2018-19, the min. tariff was Rs.4.28/unit excluding the HT rebate, thus increasing the night tariff/energy charge for 66 KV consumers by 42 paisa (0.17 of minrate + 0.25 HT rebate). Thus, the night tariff for 8 months of the year was made same for all LS consumers drawing power at 11/33/66/132/220 KV voltage level. 2. It is accepted fact that voltage rebate is not a concession or incentive but compensation of investment on High voltage Substation and savings accruing to PSPCL on transformation losses. 3. HT rebate is granted as per Electricity Act 2003 providing that tariff should be in line with voltage wise cost of supply. Hon‘ble APTEL has upheld this provision and Voltage Rebate was granted to Punjab consumers as per numerous orders of APTEL. In Tariff Order 2013-14, the Commission accepted that cost of supply for HT consumers is lower and accordingly given relief to the consumers drawing power at higher voltage. Due to the inability to charge cost of supply based tariff, HT rebate is given to partially compensate such consumers. 4. The Cost of supply for 2019-20 worked out in TO for 11 and 66 KV consumers is Rs 6.86 and 6.22/unit respectively i.e. difference of 64 paisa/unit whereas HT rebate is only 25 paisa/unit which has now been reduced to 17 paisa/unit. Therefore, the merging of the HT rebate with the min. tariff of Rs.4.45/unit is against the provisions of the Act, orders of the Hon‘ble APTEL and also against the principles accepted by the Commission while granting this rebate and the same need to be restored to the consumers who draw power on 66 KV system. 5. It is also submitted that GOP consented to bear the subsidy for grant of Energy charge of Rs 5/unit as per pattern of 2018-19. There was no demand from PSPCL in the ARR and the proposal was never put up in the Public domain. The tariff order has no speaking orders on this. Thus the action of the Commission lacked conviction. 6. It is therefore requested that the matter of merging HT rebate in minimum tariff slab- of TOD on urgent basis be reconsidered and the HT rebate may please be restored in the Tariff Order 2020-21 so that industry can continue to operate in Punjab and remain viable. PSPCL's Reply: Determination of tariff, rebate or surcharge to any category is prerogative of the Commission as per Electricity Act, 2003 on the basis of data supplied by PSPCL in the ARR, keeping the interest of stakeholders in view. Regarding the matter of capping of Rs. 4.45 per unit and HT rebate, the Commission in its Order dated 13.09.19 in Review Petition No. 5 of 2019 filed by industrial consumers, has decided that concessional/ discounted tariff can be provided subject to certain limitations only, it was decided to limit the same to Rs. 4.45 per kVAh, being only the marginal cost to generate additional energy. Charging tariff below this cost would have resulted in uneconomical rate of supply. Further, the cumulative effect of ToD rebate and Voltage rebates on the Energy Charges including reduced Charges for consumption exceeding threshold limit/ use of electricity exclusively during night hours at any time has been limited to the lowest Energy Charge of Rs. 4.45 per kVAh. This limitation comes into effect only in case they opt to consume power in excess of the threshold consumption (i.e. the consumption in excess of maximum annual consumption in any of the last two financial years) and/or exclusively during night hours. Further, as per Tariff Orders, Cross Subsidy burden on LS(GI) consumers for F.Y. 2017-18 was 11.01%,F.Y. 2018-19 was 7.49% and for F.Y. 2019-20 is 6.04%, so there has been gradual reduction in cross subsidy levels and it is in line with the National Tariff Policy. Commission’s View: The objection is noted. Issue No.4: Wrong monthly and supplementary billing and bill dispute Resolution Though PSERC grants relief to consumers through Tariff Order and Regulations and PSPCL is also quick to pass on the relief to the consumers by timely issue of the Commercial instructions to the field staff, however, the working of Centralized Billing Cells and issue of bills under AMR through IT still need improvement for expeditious disposal of the disputes of billing which are increasing day by day. There is lack of transparency as details of arrears being claimed in the monthly and supplementary bills are still not being provided. Further, resolution of billing disputes at sub division level, though specifically provided in Supply Code is not available at all and consumers are being directed to approach dispute resolution authorities. Software updates are delayed requiring manual intervention. Keeping in view heavily surplus scenario and to increase the demand of power and energy, ease of
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doing business strategies be evolved and implemented for industry thro‘ mutual discussions. PSPCL's Reply: The issue is not related to the Tariff petition filed and shall be dealt separately. Commission’s View: PSPCL needs to address the issue to the satisfaction of the consumers in line with the provisions of the Supply Code. Issue No.5: Disposal of 2 units of Ropar thermal plants 1. GOP ordered to retire 4 units of GNDTP Bhatinda and 2 units of GGSSTP Ropar w.e.f. 1.1.2018 and PSPCL has accordingly assumed their generation as Zero from 1.1.2018 onwards. Whereas SLDC has removed 4 units of Bhatinda from Real Time Data appearing on SLDC web site, 2 units of Ropar are still appearing. When these units have been retired, SLDC should also remove these two units of Ropar from the real time data link. 2. ARR of PSPCL is silent on the time lines of disposal of the scrap of the material of retired assets and disposal of the Land of the project. 3. No separate data regarding man power deployed on the Ropar power plant and its reduction post retirement of two units is not evident from ARR. 4. PSPCL has also not indicated any time line for 100 MW solar plant and 60 MW biomass plant at Bhatinda plant site. 5. The details need to be provided to the objector for information and comments. PSPCL's Reply: With regard to GGSSTP Ropar, process for disposal of 2 units of GGSSTP which have been retired w.e.f. 01.01.2018 by the decision of Punjab Govt. is already under process. Work Order has been issued for assessing the saleable value of the Units. Since 4 Units of GGSSTP are still operational, as such only equipment‘s installed on Units 1 & 2 will be disposed of such land used for Units 1 & 2 cannot be disposed of as common auxiliaries/system of all the six units is installed spanning over this land. Presently no manpower is deployed exclusively for Units 1 & 2 of GGSSTP, Ropar, however manpower from Stage 2 & 3 Units is used for carrying out the preservation of the boilers & for condition monitoring of the equipment‘s of Stage-I Units at regular intervals of time. Commission’s View: The objector may note the response of PSPCL. Objection No. 33: NATIONAL ELECTRICITY CONSUMERS ASSOCIATION. Issue No.1: Controller General Audit Report on Balance Sheet of PSPCL FY: 2018 – 2019 has neither been made available to us nor is available on website of PSPCL. Respondents (PSPCL) be directed to put Controller General Audit Report on PSPCL website. PSPCL’s Reply: Refer PSPCL‘s reply in issue No. 3 of Objection No. 13. Commission’s View: Refer the Commission‘s view in issue No. 3 of Objection No. 13. Issue No.2: Consumers always face panic after seeing Tariff proposals seeking hike by showing huge false revenue deficit whereas it is settled principal that approved norms and parameters can‘t be deviated. Inefficiency on the part of Licensee (by not forecasting correct growth of sales, by not making efforts to find market for sale of surplus electricity (wrongly purchased excess than the requirement of consumers in the State.) Inefficient actions of wrong decisions by Licensee cannot be and should not be burdened on consumer retail tariff. PSPCL’s Reply: ARR is being prepared and submitted before the Commission as per the regulatory principles set by the Commission. The methodology adopted by PSPCL for truing up for FY 2018-19, RE for FY 2019-20 and MYT petition for FY 2020-21 to FY 2022-23 is very well elaborated in the Petition and is in line with the regulatory principles set by the Commission and PSERC MYT Regulations. Commission’s View: The Commission undertakes a detailed prudence check of the Tariff Petition and allows expenditure & losses as per the applicable MYT Regulations while deciding the tariff.
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Issue No.3: As per Supply Code and related matters Regulation 2014 clause 29, Distribution Licensee can charge in respect of supply of electricity from consumers only as per GENERAL CONDITION OF SUPPLY and SCHEDULE OF TARIFF (Framed under Section 45 read with Section 181 of Electricity Act 2003). In addition, consumer shall be liable to pay rent and / or other charges in respect of Electric Meter or Electric Plant provided by Distribution Licensee. Thus, all the charges approved by the Commission which Licensee (PSPCL) can collect from consumers are Part of Tariff and Non Tariff Income of Distribution License and same should be considered as part of receipts while calculating revenue earned. Any of the expenses charged or claimed from consumers without approval of Commission is illegal recovery by misusing the power enjoyed as wholly Government owned company and having monopoly to supply electricity. This illegal recovery is without authority of Law and is liable to be returned to consumers or alternatively that is also a non tariff income and is to be considered while calculating Revenue Surplus / Deficit at the time of determining tariff. PSPCL’s Reply: Non-Tariff Income has been reduced from the ARR in the petition filed by PSPCL. Commission’s View: The objector may note the response of PSPCL. Issue No.4: Distribution Licensee has not disclosed the figures of Connected Load in kW, kVA and consumption in KWH, KVAH for all the categories, sub categories and of different slabs. Non providing of these figures is nothing except depriving the consumers to know the correct revenue receipts collected by Licensee as Fixed Charges, Energy Charges, TOD Peak Period Charges, Demand Charges, Fuel Cost Adjustment Charges and Voltage Surcharge Charges from each and every consumer. PSPCL’s Reply: All the details regarding connected load, revenue receipts etc. have been provided in the petition and the subsequent deficiencies raised by the Commission. Commission’s View: The objector may note the response of PSPCL. Issue No.5: Distribution Licensee is charging many other charges from consumers, prospective consumers, applicants and Govt. Departments i.e. Sundry Charges without disclosing the reasons of charging. PSPCL is also charging Disconnection and Reconnection Charges without physically disconnecting and or reconnecting connections. Further PSPCL is further adding late payment Surcharge in every bill again and again. All these charges, although collected illegally, are also revenue receipts and is Non-Tariff Income, which needs to be included in Revenue Earned, while computing Aggregate Revenue Requirement. Distribution Licensee should also be restrained from collecting any charges in future without prior approval of the Commission. PSPCL’s Reply: The charges collected are as per PSERC Supply Code Regulations and the applicable charges are being considered as a part of the Non-Tariff Income. Commission’s View: The objector may note the response of PSPCL. Issue No.6: That, it is settled law that, Notifications override administrative Orders / Instructions. Thus, we humbly request the Commission to issue Notifications for General Condition of Tariff, Schedule of Tariff after its approval as per the provisions contained in SECTION 45 (2) READ WITH SECTION 181 OF ELECTRICITY
ACT 2003. PSPCL’s Reply: The query has been addressed to the Commission. Commission’s View: General Conditions of tariff and Schedule of tariff are part of the Tariff Order. Issue No.7: Generating business and distribution business is two distinct and separate activities. ARR of Generation Tariff and Distribution Retail tariff are to be filed declaring separate assets, separate income and expenditures. But Distribution Licensee is making excuses since last ten years right from 2010 stating that separate accounts are not available. This is nothing except concealment of facts.
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The Commission should take cognizance of the same. PSPCL’s Reply: As per the existing accounting system PSPCL maintains financial accounts as per the Companies Act 2013 for both generation and Distribution Business being a single entity. However, it is submitted that PSPCL maintains the Cost Accounting Records every year in which the cost sheet of generation and distribution business is prepared separately and separate income and expenditure is shown in the cost accounting records. Commission’s View: The objector may note the response of PSPCL. Issue No. 8 & 9: Refer issue No. 2(XIV) of Objection No. 31 .PSPCL’s Reply: Refer PSPCL‘s reply in issue No. 2(XIV) of Objection No. 31 Commission’s View: Refer the Commission‘s view in issue No. 2(XIV) of Objection No. 31. Issue No. 10 & 11: Refer issue No. 2(XV) of Objection No. 31 PSPCL’s Reply: Refer PSPCL‘s reply in issue No. 2(XV) of Objection No. 31 Commission’s View Refer the Commission‘s view in issue No. 2(XV) of Objection No. 31. Issue No. 12: Refer issue No. 2(XVI)1 of Objection No. 31 PSPCL’s Reply: Refer PSPCL‘s reply in issue No. 2(XVI)1 of Objection No. 31 Commission’s View Refer the Commission‘s view in issue No. 2(XVI)1 of Objection No. 31. Issue No.13: It is need of the day to install meters on each and every connection installed to arrive at correct consumption for the sale of electricity to consumers. In the Tariff Policy 2016 Clause 8.4(3) it is stated that ―The Appropriate Commission may provide incentives to encourage metering and billing based on metered tariffs, particularly for consumer categories that are presently unmetered to a large extent. The metered tariffs and the incentives should be given wide publicity. Smart meters have the advantages of remote metering and billing, implementation of peak and off-peak tariff and demand side management through demand response. Smart Meters have an advantage of remote metering and billing. To curb un-metered supply installation of Smart Meters / Prepaid / Pre-payment meters should be encouraged by keeping metered supply rates less and by increasing un-metered supply rates. PSPCL’s Reply: Refer PSPCL‘s reply is issue No. 11 above. Commission’s View The objector may note the response of PSPCL. Issue No.14: That, Tariff Policy 2016 Clause 8.3(4) clearly states that Free Electricity is not desirable as it encourages waist full consumption of electricity besides in most cases Lowering of Water Table in turn creating avoidable problem of water shortage for irrigation and drinking water for the coming generations. It is also likely to lead to rapid rise in demand of electricity putting strain on the distribution network, thus, adversely affecting the quality of power. Therefore it is necessary that reasonable level of user charges is levied. Subsidized rates of electricity should be permitted only up to a pre-identified level of consumption, beyond which tariff reflecting efficient cost of service should be charged from consumers. It is also mandated in Tariff Policy 2016 that if the State Government wants to reimburse even part of this cost of electricity to poor category of consumers, the amount can be paid in cash or any other way. Use of Prepaid / Pre-payment meters can also facilitate this transfer of subsidy to such consumers. PSPCL’s Reply: The provision of subsidy is the prerogative of the Govt.
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Commission’s View Subsidy is the prerogative of the State Govt. Issue No.15: That, industry of Punjab is facing financial crises, we hereby suggest for providing Prepaid/Prepayment Meters to the consumers. This will reduce the carrying cost leading to reduce requirement of working capital of the Distribution Licensee. This will also eliminate associated cost involved in meter readings, billing and collections. Ministry Of Power, Government of India has also requested all the Electricity Regulatory Commissions of India to implement the policy of installing Prepaid / Prepayment Meters within 6 (Six) months from 16-01-2020 i.e. date of issue of these directions. PSPCL’s Reply: Refer PSPCL‘s reply is issue No. 11 above. Commission’s View The objector may note the response of PSPCL. Issue No.16: Previously PSPCL was issuing bills after 15 (Fifteen) days from the date of reading. Now AMR (Automatic Meter Reading) devices are installed and are recording on the same day and bills are issued on next day. This procedure is as good as Spot Billing. In the case of Spot Billing, one month Consumption Charges are required. Thus, it is requested that Security Consumption from the consumers whose readings are recorded automatically through AMR should becharged 1 (One) month average consumption instead of 1½ (One & a Half) month average consumption. PSPCL’s Reply: The issue does relate to the Tariff petition filed and shall be dealt separately. Commission’s View The objector may note the response of PSPCL. Issue No.17 In the other States of India i.e. Maharashtra and Delhi, the Commissions has made the regulation to accept bank guarantee as Security Deposit (Security Consumption) instead of cash deposit with Distribution Licensee. In that case consumers will not be entitled for any interest on Security Deposits. Distribution Licensee is already availing wrong capital limits from banks, interest for which is overloaded in ARR and consumers are paying the same. This will be fair for Distribution Licensee and for consumers too. PSPCL’s Reply: The query has been addressed to the Commission. Commission’s View : The issue does relate to the instant petition. However, the suggestion is noted. Issue No.18 That, as per Tariff Policy, the Commission is to frame the tariff first and only thereafter to know from the State government regarding subsidy to be given to different consumers. After the issue of the Tariff Order subsidized tariff should be pronounced giving clear tariff rates chargeable from consumers. PSPCL’s Reply: The query has been addressed to the Commission. Commission’s View: The provision of subsidy is the prerogative of the Commission. Issue No. 19: That, categories framed in Schedule of Tariff are too much in numbers and is confusing. Figures in the bills of such huge categories can‘t be given by the Distribution Licensee. It is evident from the facts that, PSPCL is not giving the figures / instructions / information‘s which are mandatory to be given as per Clause 30 of Supply Code and Related Matters Regulations (2014). PSPCL’s Reply: PSPCL has submitted all the relevant information as per PSERC Tariff Regulations. Commission’s View: PSPCL is directed to address the issue to the satisfaction of consumers.
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Objection No. 34: PSEB ENGINEERS ASSOCIATION. Issue No. 1: In the true up for 2018-19, the assessment has been made of AP supply in Kandi area mixed feeders as 55.31% in terms of agricultural kw load and 45.64% in terms of energy consumption. In case PSPCL can carry out segregation of AP supply 11 KV feeders from mixed supply feeders, it would enable the correct/ reliable measurement of AP energy as metered at the grid substation. PSPCL may give the position or target by which the segregation of 11 KV AP feeders from mixed feeders in Kandi area would be achieved. In table-3, page 23, the AP consumption of mixed feeders is shown as 644.15 MU but in table-4, the energy figures are shown as 1859.12 MU. PSPCL may clarify. PSPCL's Reply: From almost 6000 AP feeders only about 319 Feeders have mixed load i.e. AP and non-AP (DS & NRS). Due to various technical and other constraints PSPCL was unable to segregate supply of AP consumers on these feeders. Already under the DDU scheme, PSPCL is making efforts to segregate AP supply wherever possible and installing meters on the premises of AP consumers. But due to resistance by various kissan unions and consumers, the work has been delayed. Though the work has been resumed and is expected to be completed by November 2020. The AP consumption shown in Table no.3 is only of the Hoshiarpur, Nawashahar and Ropar circle whereas in Table No.4 the AP consumption of all the kandi area feeders have been shown. Commission’s View: The objector may note the response of PSPCL. Issue No. 2: TRUE UP OF THERMAL STATIONS 2018-19 Actual station heat rate of GGSSTP Ropar is 2703 kCal/KWh and for GHTP it is 2655. The increased SHR is due to low PLF which is further due to prolonged shut down and operation at low loads. In such circumstances, the fuel cost may not be allowed on SHR-normative basis but on actual basis. Similarly, in case of specific oil consumption. PSPCL's Reply: PSPCL agrees with the objector and requests the Commission to allow the actual fuel costs. Commission’s View: The Commission allows fuel cost as per PSERC MYT Regulations after prudence check. Issue No. 3: TRANSIT LOSS OF COAL FOR 2018-19 PSPCL has stated that transit loss is negative for Ropar and Lehra TPS. Negative loss implies that weight of coal received is more than the weight of coal loaded at the mine. One possible reason for negative loss may be that the weigh-bridges (in motion weigh bridges) may be recording higher weight of the wagons than the actual. PSPCL may carry out the calibration of the weigh bridges located at Ropar and Lehra. PSPCL's Reply: The in-motion weighbridges (IMWB) of GHTP, Lehra Mohabbat are calibrated every year regularly with a standard test wagon of Railways. The last calibration of IMWB was carried out on 04th Feb, 2020. It is further intimated that the weigh bridge at GGSSTP is being calibrated annually and last calibration was done on 26.09.2019. Commission’s View: The objector may note the response of PSPCL. Issue No. 4: ARR 2018-19 Issue No. 4.1 The following items of ARR are a matter of grave concern:
APR (Annual Performance Review)
True up
Interest charges (₨. Crore) 824.25 2113.14
Interest on working capital (₨. Crore)
302.4 870.04
It is observed that there is a substantial increase in the interest figures (actuals) as compared with the APR figures. During past years, when loans are taken to meet the gap between expenditure and revenue, it may be a short-term solution but the long-term impact results in the form of increased interest charges and interest on working capital which results in the stress on financial condition of PSPCL. While the tariff policy as well as National Electricity Policy lays stress on restoring the
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financial health of DISCOMS, the position is reverse. For example, under UDAY scheme, the outstanding loans of ₨.15628.26 Crore were transferred to Govt. of India, the resulting interest of ₨.1306.95 Crore has caused an increase in the interest charges to ₨. 2113.14 Crores. While the loan amount of ₨. 15628.26 Crore may originally have been at higher interest rate of around 11 or 11.5%, the interest payable on UDAY bonds to Punjab Govt. is at lower interest rate of 8.36%, even then the interest of ₨.1306.95 Crore is huge resulting in the total interest on loan amount being ₨.2113.14 Crore. PSPCL's Reply: So far as difference in interest on loans is concerned, PSPCL has claimed interest charges on the basis of actual interest paid against the loans availed by PSPCL, whereas (APR) figures are on the basis of normative. PSPCL raises Working Capital Loans for meeting its day to day expenditure towards purchase of power, fuel cost etc. By adopting UDAY Scheme, PSPCL can raise Working capital loans upto 25% of the previous year revenue. While submitting the ARR, PSPCL has made the provision of interest on Working capital loans by restricting its working capital loans upto 25% of previous year revenue. However, on True up of financial data, interest on working capital is claimed on actual basis. Under UDAY scheme, PSPCL has signed the MOU on dated 04.03.2016 and as per the provisions of UDAY, GoP has issued the special bonds amounting to Rs. 15,628.26 crore during the year 2015-16 and 2016-17. The proceeds of these bonds were handed over to PSPCL as GOP loans against which PSPCL is making the payment of interest of Rs. 1306.95 crore to GOP. GOP has decided to convert these GOP loans of Rs. 15628.26 crore into Equity by the end of 31.03.2020. Accordingly, GOP has made the provision in their budget. Resultantly, the interest cost of PSPCL will be reduced by Rs. 1306.95 crore w.e.f. 01.04.2020. Commission’s View: Interest on working capital loan is allowed on normative basis in line with PSERC MYT Regulations after prudence check. Issue No. 4.2: In the ARR Table, the ROE component of ARR has been indicated as ₨ 942.62 crore. PSPCL may inform whether there is any court case regarding ROE and if so, the present status. PSPCL's Reply: The issue regarding RoE is pending with the Hon‘ble Supreme Court. However, the date of hearing on the issue has not been fixed yet. Commission’s View: The objector may note the response of PSPCL. Issue No. 4.3: REVENUE GAP 2018-19 Revenue gap for ARR of 2018-19 is shown as ₨ 2334 crores which becomes ₨ 3716 crores with carrying cost and will adversely impact the finances in future years. PSPCL's Reply: The carrying cost has been computed as per the provisions of the PSERC MYT Regulations. Commission’s View: Revenue gap is determined by the Commission after prudence check of ARR petition and as per PSERC MYT Regulations. Issue No. 5: Annual performance review 2019-20 Issue No.5 a) Thermal Plant‘s performance: The Station Heat Rate for H-1 of 2019-20 and projected SHR for H-2 of 2019-20 are summarized as under:
GGSSTP GHTP
H-1 SHR 2801 2847
H-2 SHR 2576 2576
The same problem of low load operation and low value of annual PLF will surely prevail in H-2 of 2019-20 as in the case of H-1 of 2019-20. The SHRs of H-2 would certainly suffer similarly, due to low PLF operation and would be approximately of the same order for H-2 as for H-1. However, PSPCL has indicated a much better station heat rate of 2576 for both the thermal plants for H-2 whereas the SHR of H-1 is in the range of 2801-2847. Accordingly, assessment of SHR for H-2 would be of the same order as for H-1.
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PSPCL's Reply: PSPCL agrees with the objector and requests the Commission to allow the SHR as submitted in the petition. Commission’s View: The Commission considers the normative Station Heat Rate as per PSERC MYT Regulations. Issue No. 5 b) Capital Expenditure PSPCL may give details of following expenditures proposed under capital head: i)₨. 47 Crore for GHTP ii)₨. 138 Crore for metering labs. iii)Expenditure for IPDS and IT. PSPCL has stated that capital expenditure proposed for SP Kandi project and for Pachhwara coal mine would be considered separately. The salient details and time frame for execution of these critically important projects may be given by PSPCL. PSPCL's Reply:
i. 47 Crore for GHTP: In FY 2019-20, Rs 47 Cr was expected expenditure of GHTP. Out of this till 31.01.2019, Rs 41.66 Cr has been incurred. Majority of the expenditure is on Coal Mine under Lease (Pachwara) - Rs. 33.95 Crore. Along with this Rs 5.29 Cr. has been incurred on Supply, Delivery, installation and commission for HMI Up gradation. The expenditure of Rs 1.16 Cr. has been incurred on FGD. The other expenditure is on
ii. ₨. 138 Crore for metering labs:The major works included are:- a. Single/Phase Meters-Rs 43.5 Cr b. 3-Phase meters-Rs 9.16 Cr c. Smart Meters(3-phase)- Rs 16.04 Cr. d. LT-CT Smart Meters- Rs. 13.5 Cr. e. RF Meters(Radio Frequency)-single-Rs 6.6 Cr f. RF-Meters(Radio Frequency)-3phase-Rs 3.60 Cr g. Pre-paid meters(Single phase)-Rs 5 Cr h. LT CT Box (3-phase)- Rs 6.84 Cr.
iii. Expenditure for IPDS and IT: A.) IPDS: The physical execution of work is likely to be completed by 31.03.2020.Till 31.01.2020, the actual expenditure incurred is Rs 83.82 Cr and the total expected expenditure till 31.03.2020 is Rs 247.87 Cr. out of total project total cost of Rs 329.99 Cr.The pending /Final payments amounting to Rs 82.12 Cr (approx) will be made in the next financial year i.e. FY 2020-21. B.) IT: 1. ERP implementation under IPDS- 20 Cr. 2. SCADA-RTDAS- 5 Cr. 3. In –House- 23.66 Cr Salient features of Shahpur kandi power project: CWC vide its letter dated 24.07.2018 has approved the revised cost on Feb.,2018. P.L. of civil works of Rs. 2298.95 Cr. and CEA vide its letter dated 12.09.2018 has approved revised cost on Feb.,2018 P.L. of E & M works of Rs. 416.75 Cr. Hence, total estimated cost of project at, Feb, 2018 PL is Rs.2715.70 Cr. Govt. of Punjab vide its letter dated 21.08.2018 has concurred the cost apportionment as 71.39 % for Power Component & 28.61 % for Irrigation Component. Accordingly, the cost of Irrigation Component works out to be Rs. 776.96 Cr and that of Power Component work out to be Rs. 1938.74 Cr. Consultancy contract for E & M works with WAPCOS has been revived on 29.04.2019.The E & M Contract with BHEL has also been revived and amendments thereof have been issued on 10.05.2019 & 23.05.2019. As per revised contract E & M, the completion/commissioning date has been revised as 30.04.2022 counted from zero date of 01.11.2018. In compliance to the WTDs decision against CE/HPs Agenda No.33 dated 04.02.2019, PSPCL has tied up for the loan amounting to Rs.1894.84 cr. with PFC. The amendment no. III dated 14.10.2019 regarding approval for acceptance of revised output guarantees of 33MW& 8MW units of (PH-I&II) on a/c of changed made in heads & other hydraulic data by Water Resources Department, GoP, was issued to BHEL. 1st milestone payment amounting to Rs.6,05,58,452/- (2% of Ex-works amount of Rs. 302, 79, 22,600/-) has been released to BHEL through RTGS on 02.12.2019. The tender enquiry for Civil Works of Power Houses has been invited by CE/SPKD, Water
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Resources Department, GoP on 01.11.2019 for opening on 17.12.2019. This due date of bid opening was extended to firstly 16.01.2020, then to 17.02.2020 due to NIL receipt of tenders. Salient Features of Pachwara Coal Mine: •Global Tender Enquiry floated by PSPCL on 31.08.2015 for selection of Mine Developer-cum-Operator (MDO) for Pachhwara Central coal mine, was dropped in July 2017, as the selection of MDO was getting delayed due to CWPs filed by participated bidders against their disqualification and encashment of Bank Guarantees. •On 30.04.2018, fresh Global Tender Enquiry was floated by PSPCL. •M/s DBL - VPR Consortium, has been selected as MDO and Coal Mining Agreement has been signed on 11.09.2018. •In the meantime, CWP 26180 of 2015 was filed by EMTA in High Court Chandigarh for Right of First Refusal and Novation of existing Contracts. •On 01.02.2018, Hon‘ble High Court ordered that M/s EMTA shall file its claims to PSPCL and PSPCL shall consider its claims. •On 06.04.2018, PSPCL issued Speaking Order that optional novation as per Section 11 of Coal Mining Act 2015 is not permissible at this stage, so representation of EMTA for Novation of existing contracts cannot be acceded. •EMTA filed CWP 10055 of 2018 and CWP 16245 of 2018 challenging PSPCL's Speaking order dated 06.04.2018 and fresh Global Tender Enquiry dated 30.04.2018. •On 25.01.2019, Hon'ble High Court ordered that petitioner would have the first right of refusal but it would not claim any benefit from the previous contractual agreements. •EMTA vide letter dated 30.01.2019 informed that they are ready to match the lowest price bid that has been revealed in the Tender Enquiry dated 30.04.2018. •After taking the legal opinion of AG Punjab, PSPCL filed SLP 9924-9925 of 2019 in Hon'ble Supreme Court on 08.04.2019 against High Court order dated 25.01.2019. •The case was listed on 06.05.2019, 13.08.2019, 17.01.2019 & 10.02.2020 and 17.02.2020. Now the hearing is fixed for 24.03.2020. •Status of transfer of statutory clearances/licenses in the name of PSPCL: For starting mining operations, PSPCL has already obtained Mining Lease, Environment Clearance, Forest Clearance, Ground Water Clearance, Land Licensing Agreement of Pakur Railway Siding and is in the process of transfer of private siding at Pakur Railway Siding and applied for Consent to Establish from State Pollution Control Board Jharkhand.
Commission’s View: The objector may note the response of PSPCL. Issue No. 6: WORKING CAPITAL FOR DISTRIBUTION Against opening balance of loans, 6460 crores, additional loans of ₨. 2412 crores were taken with repayment of ₨ 1911 crores leading to a closing balance of ₨. 6961 crores and interest amount of ₨. 708.54 crores. This shows a position of debt trap where PSPCL had to take more loans to repay the earlier loans and in the process incur huge interest charges. The closing loan amount is ₨. 6961 crores which is more than the opening loan of 6460 crores. This shows that instead of coming out the debt trap, PSPCL has gone deeper into the debt trap to the extent of ₨. 501 crore and in coming years, the interest on loan will be charged/ payable on a bigger amount during 2020-21 and interest claim would thereby be higher. In other words, the financial position regarding working capital loans would become worse in 2020-21 as compared to 2019-20. The practice of taking working capital loans to bridge the gap of expenditure and revenue is not sustainable at all. PSPCL's Reply: PSPCL raises Working Capital Loans for meeting its day to day expenditure towards purchase of power, fuel cost etc. By adopting UDAY Scheme, PSPCL can raise Working capital loans upto 25% of the previous year revenue. While submitting the ARR, PSPCL has made the provision of interest on Working capital loans by restricting its working capital loans upto 25% of previous year revenue. Commission’s View Interest on working capital is determined and allowed in line with PSERC MYT Regulations after prudence check Issue No. 7: PARA 3.11, TABLE 47 For 2019-20, the equity amount is shown as ₨ 6081.43 Crore on which ROE of ₨ 942.62 Crore is claimed. However, on 31.3.2020, the Govt. of Punjab UDAY loan of ₨ 15628.26 Crore would be converted to equity with effect from 1.4.2020. This would reduce the interest on loan by ₨ 1306.95 Cores and increase the ROE at 15.5% of ₨ 15628.26 Crore i.e. by about ₨ 2422 Crore.
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PSPCL's Reply: The GoP will be converting the entire UDAY Loan of Rs.15,628 Crore to equity and hence PSPCL has claimed RoE on the equity amount infused. Commission’s View: Return on equity is determined and allowed in line with PSERC MYT Regulations. Issue No. 8: Cumulative Revenue Gap The Revenue Gap of 2019-20 is stated as ₨ 3613.80 Crore and cumulative revenue gap including past period carry over and carrying cost as on 31.3.2020 is stated as ₨ 7728.26 Crore. Such high revenue gap is unsustainable and runs counter to section 61(D) of the Electricity Act 2003 which prescribes the recovery of cost of electricity in a reasonable manner. PSPCL's Reply: ARR is being prepared and submitted before the Commission as per the regulatory principles set by the Commission. The methodology adopted by PSPCL for truing up for FY 2018-19, RE for FY 2019-20 and MYT petition for FY 2020-21 to FY 2022-23 is very well elaborated in the Petition and is in line with the regulatory principles set by the Commission and PSERC MYT Regulations. Commission’s View: Revenue gap is determined by the Commission after prudence check of ARR petition and as per PSERC MYT Regulations. Issue No. 9: ARR Forecast Issue No. 9(a) PSPCL may give the salient construction targets and schedules of SPK Project vide which the project would be made operational by 1.4.2021 i.e. 2021-22. The commissioning and construction of such projects depend upon the timely execution of civil works which is to be done by the Punjab PWD Irrigation Branch. The PSPCL portion of the power project will start with the execution of civil works of the power house which is essential to be completed before the mechanical and electricity works can be taken up. Past experience shows that with different agencies executing a hydro-electric power project, a High-Level Steering-cum-Monitoring Committee to monitor the works and expedite the construction. PSPCL's Reply: Please refer to reply on Issue No. 5(b) above. Commission’s View: The objector may note the response of PSPCL Issue No. 10. NORMS FOR THERMAL STATIONS The PLF of GGSSTP and GHTP is given as under:
2015-16 2016-17 2017-18 2018-19 2019-20 (H1)
PLF GGSSTP
36 25 21 23 27
PLF GHTP 39 34 37 31 22
With such low PLF and repeated start/ stop of the units due to backing down and low demand etc., the attainment of designed operating norms of SHR and specific oil consumption would not be possible. The SHR for H-1 of 2019-20 and specific oil consumption (actuals) is as under:
SHR Specific Oil consumption
GGSSTP Ropar 2801 kCal/KWh 1.82 Milli litres/ KWh
GHTP Lehra 2847 1.81
It is suggested that Commission may consider and allow actual coal and oil consumption expenses since the regime of low PLF operation is going to continue in the coming years also. The parameters in Table 59 are not attainable when the thermal stations operate at around 30% annual PLF. PSPCL's Reply: The Commission may consider and allow actual coal and oil consumption expenses. Commission’s View: The Commission allows fuel cost as per PSERC MYT Regulations after prudence check. Issue No. 11: TABLE 62-63, PAGE 83 The energy charge rate and fuel cost table 62-63 for the control MYT period of three years are based on assumed SHR and specific oil consumption parameters which are practically not attainable due to
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low PLF operation. The PLF taken for GGSSTP and GHTP are as under for 2020-21.
GGSSTP GHTP
PSPCL MU 2020-21 2956 2537
Gross MU 3284 2819
PLF 44.6 35
PSPCL's Reply: The energy charge rate has been computed keeping in view the normative parameters as specified in the CERC Regulations 2019. Commission’s View: The objector may note the response of PSPCL Issue No. 12: Energy Sale Projections, 2020-21 to 2022-23, Tables 66-67. In case of Large Supply category, the metered sale figures in MU are as under:
Year LS consumption (MU)
2018-19 True up 14056
2019-20 APR 14476
2020-21 1557
2021-22 16718
2022-23 17965
For period 2020-21 to 2022-23, the Compound Annual Growth rate CAGR are taken as 7.46%, due to which the LS consumption is shown to increase from year to year. However, in view of the economic slowdown and recession condition across the country, the LS CAGR of 7.46% may not be realistic as it is based on past year‘s data while the current and future position is of economic slow-down. PSPCL's Reply: The increase in sales has been projected as per the CAGR of past years. However, there might be variation in actual sales. Commission’s View: The objector may note the response of PSPCL. Issue No. 13: TABLE 71, PAGE 89 PSPCL may clarify, whether 4.6% share of HP in RSD is free power or at generation cost. And, whether 20% share of J&K from RSD Project is at generation cost or whether it is free power. The copy of interstate power sharing agreement may be supplied by PSPCL. PSPCL's Reply: The 4.6% share of HP in RSD is free power. With regard to 20% share of J&K from RSD project, it is submitted that the power is supplied at the bus bar rate to be determined by CERC with a ceiling of Rs.3.50/unit. Commission’s View: The objector may note the response of PSPCL. Issue No. 14: POWER PURCHASE COST – FIXED CHARGED
The fixed charges may be taken as per relevant PPA, particularly in case of Sasan and Mundra UMPPs which have PPAs specifying the year-wise fixed and variable charges.
PSPCL's Reply: The fixed charges have been considered in the petition as per the relevant PPA. Commission’s View: The objector may note the response of PSPCL. Issue No. 15: Pachwara Coal Mine and SKPP. PSPCL may give the current updated position regarding Pachhwara Coal mine and SKP project. PSPCL's Reply: Please refer to Reply No. 5(b) above. Commission’s View: The objector may note the response of PSPCL. Issue No. 16: Return on Equity For the three years period 2020-21 to 2022-23, the major difference in ARR is that during the earlier two years, 2018-19 and 2019-20, the equity is ₨ 6081 crores and ROE is about ₨.942 crores.
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However, from 1.4.2020, the Govt. of Punjab loans under UDAI schemes get converted into equity and the ROE component increases correspondingly as under:
2018-19 2019-20 2020-21 2021-22 2022-23
ROE (₨. Crores) 942.62 942.62 2267 3622 3714
The ROE component of tariff should be retained by PSPCL as it would be helpful in reducing or bridging the gap between revenue and expenditure and it would be an important parameter in improving the financial condition of PSPCL. PSPCL's Reply: PSPCL requests the Commission to kindly approve the RoE as claimed in the petition. Commission’s View: Return on equity is determined and allowed in line with PSERC MYT Regulations. Issue No. 17: Interest Charges During 2018-19 and 2019-20, the PSPCL has to pay interest charges at the rate of 8.36% on the UDAY loan of ₨ 15628.26 crores. From 1.4.2020, the amount of ₨ 15628.26 crores of UDAI bonds is converted into equity and from 2020-21 onwards, the claim of interest charges reduces. The component of interest charges year-wise is tabulated as under:
Year Interest charges (₨ crore)
2018-19 2113.14
2019-20 2259.98
2020-21 1264.79
2021-22 1339.80
2022-23 1391.60
For PSPCL ARR of 2020-21, the ROE component has increased by ₨ 1324 crores as compared to 2019-20 while on the other hand, interest component has reduced by 995 crores. PSPCL's Reply: PSPCL requests the Commission to kindly approve the RoE as claimed in the petition. Commission’s View: Interest Charges & ROE is allowed as per PSERC MYT Regulations. Issue No. 18: MONTHLY POWER PURCHASE, 2020-21 TO 2022-23 IN RESPECT OF PUNJAB IPPS Format D4 gives the Monthly Projected figures of MU power purchase and cost in ₨ crore from each source year-wise, 2020-21 to 2022-23. 18.1: The data of IPPs in Punjab for each year is tabulated and summarized as under: TSPL 2020-21 MU drawl by PSPCL is nil from the months Nov-2020 to Mar-2021 while capacity charge is to be paid at ₨.142.86 crore per month (only for month of Dec-2020, some energy is drawn) NPL 2020-21 Monthly energy drawl is maintained during all the months Nov-20 to Mar-21. GVK 2020-21 During months Nov-20 to Mar-21, nil MU drawl is there while monthly fixed charge of ₨. 77.62 Crore is to be paid. (Except for Dec-2020 when some energy drawl takes place) TSPL 2021-22 There is nil energy drawl for the months Nov-21 up to Mar-22 while monthly fixed charge of ₨ 177.65 crore is payable for each month, Nov-21 to Mar-22. NPL 2021-22 Energy drawl is maintained for each month during the period Nov-21 to Mar-22. GVK 2021-22 From Nov-21 to Mar-22, there is nil MU drawl while fixed charges of ₨ 77.62 crore per month are payable. Only in Dec-21 there is some drawl of 59 Mu. TSPL 2022-23 There is nil MU drawl each month from Nov-22 up to Mar-23 while fixed charge of ₨ 175.56 crore is payable for each month. NPL 2022-23 Monthly energy drawl is maintained for all the months of 2022-23 GVK 2022-23 There is nil MU drawl in the month of Feb-2023 with capacity charger of 77.62 crore. PSPCL's Reply: The observations of the objector are correct. Commission’s View: The objector may note the response of PSPCL Issue No. 19: The PSPCL formats attached with petition give the following data station-wise and year-wise covering
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the Punjab IPPs for the period 2018-19 up to 2022-23. The following data is tabulated: a) Fixed cost (capacity charge) of each station year wise based on availability (declared
capacity) b) Quantum of energy (Mu) surrendered due to non-scheduling. c) Quantum of fixed charges to be paid on the capacity that was not availed by PSPCL due to
low schedule i.e. quantum of fixed charges paid corresponding to the surrendered energy for the year.
The summary of backing down data is given as under:
i) Mu surrendered by the 3 Nos. IPPs year wise ii) Corresponding fixed charges on capacity that was surrendered (not availed) The summary of data is as under:
2018-19 2019-20 2020-21 2021-22 2022-23
Mu surrendered 5086.2 8349.7 11224 10637.4 8841.2
Mu surrendered capacity, ₨ Crore
687.2 1098.8 1473.6 1373.2 1138
PSPCL's Reply: PSPCL making efforts to sell the surplus Power in open market to generate revenue. The details are as under:-
FY Units Sold
(MUs) Amount (Rs. Cr.)
Rate per unit (Rs./kWh)
Saving
(Rs. Cr.)
2016-17 361 108 2.98 -
2017-18 1219 446 3.66 162
2018-19 2268 1183 5.21 453
2019-20 (up to 22.01.20)
397 187 4.72 64.21
Commission’s View: The objector may note the response of PSPCL Issue No. 20: TOTAL COST OF ENERGY SUPPLIED BY IPPS The PSPCL formats give the following data in respect of each IPP station: i) MU scheduled (availed) ii) Variable (fuel) cost and fixed (capacity) charge iii) Total energy cost, variable cost + capacity charge (fixed charge) 20.1 THE YEAR-WISE SUMMARY IS AS UNDER:
PSPCL's Reply (20): The data for IPP‘s collected by the objector is correct. Commission’s View: The objector may note the response of PSPCL Issue No. 21: Delayed payment of subsidy by Punjab Govt Delayed payment and default in subsidy for 2019-2020 , PSPCL data
Subsidy default as on Amount of default, ₨ Cr
30-Apr 2019 762.92
31 May 2019 1361.85
30 June 2019 1925.67
31 Oct 2019 3496.95
15 Nov 2019 4680.52
30 Nov 2019 4227.87
15 Dec 2019 5109.91
31 Dec 2019 4294.86
15 Jan 2020 5188.06
21.1 PSERC may incorporate stringent instructions in Tariff order for GoP to ensure timely payment of subsidy as per Electricity Act sec 65. PSPCL's Reply: The query has been addressed to the Commission. Commission’s View: The Commission allows carrying cost for the delay/non-payment of subsidy by the State Government. Objection No. 35: Amritsar Hotel and Restaurant Associations, Amritsar. Issue This is with reference to the subject above. Kindly note that there has been a phenomenal increase in the electricity charges for the city. We as consumers and representatives of the Association of Hoteliers in the city wish to express our disappointment to you over this matter. Punjab Government had earlier through its notification in Industrial Policy-2017 promised to give the industry a rate of Rs. 5/- per unit but now however we are being charged rate almost double of this. This is not only totally unjustified but also a breach of promise on the part of the Government. As you are already aware that business of Tourism is very sensitive in nature and gets affected by almost every aspect whether be
PSERC – Tariff Order FY 2020-21 for PSPCL 374
climate, political or of any other nature lading to fall in arrival of tourists. We as Hoteliers have had our share of problems with PSPCL in terms of TOD rebate not being passed on other like bills not being delivered on time lading to penalties. This is to kindly request you to please look into the matter and have the unit rate of electricity levies as Rs.5/- per unit only and not more. PSPCL’s Reply: ARR is being prepared and submitted before the Commission as per the regulatory principles set by the Commission. The methodology adopted by PSPCL for truing up for FY 2018-19, RE for FY 2019-20 and MYT petition for FY 2020-21 to FY 2022-23 is very well elaborated in the Petition and is in line with the regulatory principles set by the Commission and PSERC MYT Regulations. Further, the determination of Tariff is the prerogative of the Commission. Commission’s View: The Commission notes the concern of the objectors. Objection No. 38: All India Steel Re-rollers Association, Mandi Gobindgarh.
Issue No. 1: Provision of Voluntary Disclosure Scheme (VDS) to LS Industry: Presently Voluntary Disclosure Scheme (VDS) for load extension for commercial consumers is available to all but not available for LS Industries, which is undergoing modernization/up gradation under Industrial and Business Development Policy – 2017, to improve their production capacity to survive from recession and to compete in the market which is very essential in present scenario. The industry has to install machinery, technology and new mechanism and it will naturally be needed more electricity load. In normal process for getting load extension, which is presently needed to go through feasibility process with so many forms which are mandatory through PSPCL channels is so complicated, too lengthy for which the industrialists are wandering here to there since last six months and files moving table to table. In such circumstances the industrialists facing harassment and even not aware how much time it will take. As the same problem was discussed by the undersigned in front the Chairperson on 3.2.2020 in the public hearing and vide mentioned facts, it is humbly submitted that provision of Voluntary Disclosure Scheme (VDS) may please be permissible for existing LS industry with provision to increase for extension of their industry load up to 25% of the existing (already sanctioned) load without any concession. It will not only serve to survive the industry will also be big beneficial to the PSPCL for boosting their collection, minimizing routine faults and increase revenue of the states well as contribute the GDP growth also. In view of the facts it is once submitted your kind honors that ruling may please be provided for affected industry as soon as possible. PSPCL’s Reply: With reference to the representation of All India Steel Re-rollers Association on the subject regarding, introduction of Voluntary Disclosure Scheme (VDS) for LS industries with provision of extension upto 25% of sanctioned load without feasibility process, it is intimated that only DS consumers upto 50 kW sanctioned load & NRS consumers upto 20 kW sanctioned load are covered under load based Tariff whereas all Industrial consumers (SP, MS & LS) are covered under Demand based Tariff. The Maximum Demand (MD) is not recorded for DS consumers upto 50 kW & NRS consumers up to 20 kW. Non declaration of true connected load adversely affects the distribution system due to overloading of distribution lines/transformers as the actual load running on system is more than sanctioned load. PSPCL suffers continuous & recurring financial loss on account of fixed charges under two-part tariff system on one hand and consumers also have to face breakdowns or interruption of supply due to inadequacy of distribution system on the other hand. In view of above, Voluntary Disclosure Scheme (VDS) was launched vide Commercial Circular No. 44/2019 dated 27.08.19 (extended upto 30.11.2019 vide CC No. 56/2019 dated 31.10.2019) was meant only for those DS/NRS Consumers which are covered under load based Tariff to give them an opportunity to get their unauthorized load/hidden load regularized. 50% discount was offered on Service Connection Charges under VDS was offered to motivate these DS/NRS Consumers. Since all Industrial consumers (SP, MS & LS) are covered under Demand based Tariff, there is no hidden load in these category of consumers as Maximum Demand is regularly recorded alongwith monthly consumption readings and so there is no purpose of launching Voluntary Disclosure Scheme for industries. Regarding the requirement of feasibility study, it is intimated that feasibility clearance is not required in cases where new or total demand including additional demand is upto 500 KVA. However, the load/demand sanctioning authority i.e. Addl. SE/Sr. XEN (DS) considers the technical aspects before release of the load/demand. Further, as per Regulation-6.3 of the PSERC (Electricity Supply Code and Related Matters) Regulations 2014, feasibility clearance is required only in those cases where
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new or total demand including additional demand exceeds 500 KVA which has to be granted to an applicant/consumer by PSPCL within 60 days. All application of new connections with demand above 100 KVA are required to be applied through single window system, which are being disposed of in time bound manner. Therefore, by default there is a monitoring of such new applications received from all through the Punjab and there is a regular check on operation offices for timely disposal of new applications. If this system is stopped, then new applicants might have to approach their respective field offices, which may further delay the release of new connection above 100 KVA. In all cases where it is technically feasible to release the load, the clearance is being granted by PSPCL within stipulated timeline of maximum 60 days. However, every effort is made to grant feasibility clearance as early as possible i.e before the maximum timeline of 60 days. After feasibility clearance, the electricity connection is also released within stipulated time limit as per Regulation-8 of Supply Code-2014 (maximum 45 days & 90 days from date of compliance of Demand Notice in case of HT & EHT consumers respectively). It is also brought out that the consumers desirous of availing additional load without any change in contract demand may avail such additional load by informing PSPCL about increase in load which may be recorded in the A&A form. No feasibility is required in such cases. However, proposal regarding allowing conditional feasibility to avail partial load/demand to the applicant upto the extent of bearing capacity of the system is under consideration. Commission’s View: The objector may note the response of PSPCL. Issue No. 2: Change in Meter Reading dates from 31
st to 21
st:
Change in the reading dates factor is directly affecting adverse to the Industry to calculation the production figures because all the calculations are being monitored 1
st to 31
st of each month and it is
not understood that what is the reason behind the change in dates and there is no any logic. One more technically foul here that the consumption reading is on 21st and the Contact demand as on 31
st
on the energy bills. This system may please be reversed as if was earlier to bring out the industry from the calculations. PSPCL’s Reply: The change in billing cycle has been done as per financial requirement of PSPCL as forwarded by Finance Section of PSPCL. Further, regarding MDI reset, it is submitted that all the energy meters of consumers having load >100KVA have been updated vide a patch which effects the MDI reset on 00:00 hrs of 22
nd day of each month in line with present billing cycle.
Commission’s View: The objector may note the response of PSPCL. Issue No. 3: Surcharge from various consumers: Amounts have been recovered from the consumers billing is unfortunate and unaccepted. If PSPCL loosing in court cases regarding private thermal Plants, the charges recovered from the consumers are not fare because industry billing unit rate is fixed by your good office. It has also been noticed and grievances from the members that violation of order dated 29.3.2017 passed in Petition No. 66 of 2016 (Suo-moto) is started and needed fresh instruction to be issued to the concerned departments to obey the order strictly. In view of the above it is submitted that such recovery is to be repaid and to be bear by the corporation or Punjab State. Please review of the surcharge. PSPCL’s Reply: The surcharge has been imposed as per order dated 24.12.2019 of the PSERC's in Petition No. 25 of 2019 filed by PSPCL, for recovery of the amount paid to Nabha Power Limited (NPL) and Talwandi Sabo Power Limited (TSPL) in compliance of the Hon‘ble Supreme Court‘s Order dated 07.08.2019. Commission’s View: The objector may note the response of PSPCL. Issue No. 4: Double circuit G-1 (220 KVA) to Focal Point 66 KVA Mandi Gobindgarh. 220 KVA Ambey Mazra Mandi gobindgrh grid to Single circuit to 66 KVA grid point is already running. Feasibility for double circuit already passed by the PSTCL on existing towers, however the work is not been started by the PSTCL Ludhiana due to which the list of extensions load is pending on 66 KVA focal point grid resulting big loss of PSPCL and the consumers. PSPCL’s Reply: This issue does not relate to the Tariff Petition filed by PSPCL and shall be dealt separately.
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Commission’s View: The objector may note the response of PSPCL. Issue No. 5: Night Tariff: The induction furnaces working only 12 hrs due to night tariff as where the fixed charges are 50% but in the monthly billing due to the slot reading by the MMTC the provisions of 50% rebate is not served as the industry is continue running in the night only. PSPCL’s Reply: With the introduction of special Night Tariff a new time slot was required for 6.00 AM to 10.00 AM which is not available in current meters installed in field. Procuring of compatible meters at short notice is not viable. Accordingly, it was decided to upload a patch in the energy meters for creating additional time slot in addition to existing 04 time slots. The uploaded patch requires the DDL downloading for arriving at energy consumption for 6.00 AM to 10.00 AM. With the patch it becomes essential that DDL be downloaded with reading itself and be forwarded to concerned CBC for billing so that consumer could be served with actual bill. Dealing matter pro-actively, PSPCL replaced meters of almost all Night Tariff consumers with meters uploaded with patch for recording reading from 6.00 AM to 10.00AM and these readings of the slot can be downloaded through DDL only. DDL of most of Night Tariff consumers is done on date of reading only and consumers of Night Tariff are getting rebate systematically. However, there can be some cases where DDL is done after reading date and consumers get rebate afterwards; for which instructions are being issued to the field offices for ensuring the DDL's to be done on the reading date only, so that there may not be any discrepancy in billing and refund amount if any. The O/o CE/Metering has also been directed to purchase new meters compatible to record time slot of 6.00 AM to 10.00 AM separately, which will also helps to solve the above problem of readings of Night Tariff consumers.
Commission’s View: The objector may note the response of PSPCL. Objection No. 39: Siel Chemicals Complex Rajpura. Issue No. 1: T & D LOSS TRAJECTORY PSPCL has revised the transmission and distribution loss trajectory for the MYT period to bring these in line with the trajectory approved by the Commission in the Business and Capital Investment Plan. However, comparison with the ARR submitted earlier by PSPCL on 30.11.2019 reveals that PSPCL itself proposed a combined transmission and distribution loss of 13.90% for the year 2020-21, whereas now, the combined loss has been proposed as 14.8%. It is very strange that PSPCL while submitting ARR had itself proposed T&D loss of 14.17 % for the true up of 2018-19, 14% in revised estimates for 2019-20 and for 2020-21. However, now PSPCL has revised and proposed T&D loss of 14.8% in 2020-21 i.e. an increase of 0.9% of 16056.07-59927.46+635.61 MUs of energy and ever the Commission has agreed to revise the figures upwards against the interest of the consumers. As per Regulation 8.2 of MYT regulations the transmission and distribution losses are controllable parameters. However PSPCL has failed to achieve the trajectory approved by the Commission for the first MYT control period of 2017-18 to 2019-20. Still, PSERC has accepted the submissions of PSPCL and revised the loss trajectory upwards without penalizing PSPCL for non-achievement of controllable parameters. It is also strange that the PSTCL has taken to 10 years to complete the boundary metering and the transmission losses assumed as 2.5% for the year have now been revised onwards to 2.86% in tenth year. It is evident that consumers are taken for granted to bear the inefficiency of PSPCL and PSTCL. PSPCL has been investing heavily on system improvement and loss reduction programs and got support of GOI and GOP to further reduce the T&D losses under UDAY Scheme. All these expenditure incurred has not yielded the desired loss reductions indicating there by that the cost recovery commitments were wrongly projected and now PSPCL wants that the consumer be burdened or it‘s under achievement of losses. Since T&D losses are controllable parameter PSPCL needs to bear the under achievement and consumer should not be burdened for its underperformance. PSERC has approved of T&D loss from 12.3% in FY 2020-21 to 12% in 2021-22 i.e. a reduction if 0.3 percent in one year for PSPCL. With an energy requirement of 61103 MU in 2020-21 this will save 183 MU of energy and with average energy charge of Rs. 3.5 per unit, it will give relief of Rs. 64 Crore to PSPCL/consumers. However, the capital expenditure as per capital investment plan approved by
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PSERC, PSPCL has been granted Rs. 290.69 Crore for system augmentation plus 465.35 Crore for system improvement and Rs. 269 Crore for loss reduction i.e. a total Rs. 956.69 Crore. The investment will require yearly interest payment of Rs. 96 Cr @ 10% nominal rate of interest against savings of Rs. 64 Cr per year and thus the approved capital investment is not justified in view of very meager reduction in distribution losses. It is therefore requested that the proposals of PSPCL may be reviewed and a proper cost benefit analysis need to be carried out and only justified expenditure needs to be approved keeping in view the interest of consumers. PSPCL’s Reply: PSPCL has revised the T&D Losses based on the T& D losses approved by the Commission in the Order for Business Plan and Capital Investment Plan approved for FY 2020-21 to FY 2022-23 on the 3rd December 2019.It is further submitted that PSPCL always endeavors to reduce its T&D losses to minimum level. The main component of T&D losses under PSPCL is low billing efficiency which is mainly due to high theft especially in Border Areas. To curb the energy theft 16.58 lakh connections were checked by distribution and enforcement organization in FY 2018-19 out of which 1.41 Lakh cases were detected and penalties to the tune of Rs. 179.29 Cr were imposed on consumers which were found indulging in power theft. Similarly, during FY 2019-20 upto December 2019, 13.81 Lac connections have been checked by distribution and enforcement organization and penalties of Rs. 157.55 Cr. have been imposed on 1.28 Lac. power thieves. During checking PSPCL faces stiff resistances from local public and various kissan unions. Sometimes PSPCL employees have been Gheraoed and Manhandled by public during checking of connections. Therefore, concerted efforts are required from local administration also in order to facilitate PSPCL employees for checking of power theft in these areas, as without their support it is not possible to curb the theft of power. Commission’s View: Refer para No. 2.3, 3.3 & 4.3 of this Tariff Order and para No. 2.3, 3.3 & 4.3 of PSTCL Tariff Order. Issue No. 2: CHANGE IN POWER PURCHASE COST The MYT regulations provide that the power purchase cost for the ensuing year is to be worked out based on the bills of the power purchase of September of the current year and the same have been attached with ARR for reference. The MYT petition was prepared accordingly. However, in the Additional Submissions submitted now, PSPCL has proposed to shift the base to November of the current year for which the bills of November are required to be supplied but not attached with the additional submissions. As such the request of PSPCL needs to be rejected. The deduction in the power purchase cost will automatically appear in the true up/next year. It is also submitted that as per ARR submitted on 30.11.2019, PSPCL's requirement of energy at State periphery for 2020-21 has been projected as 59927.46 MUs. In BP&CIP approved by Commission on 3.I2.2019, the approved energy is 62612.89 MUs. Now in additional submissions, the quantum of energy has been revised as 60563.07MUs. Such wide variations need to be investigated. It is also evident that the figures in BP&CIP are inflated to get higher capital expenditure and the returns on investment will be loss than projected burdening the consumers. The cost of 46533.52 MUs of power purchase for 2020-21 in ARR was Rs 21914.48 Cr. @Rs4.53/unit. The figures have been revised in Additional submissions to 47807.16 MUs at a cost of Rs21491.68 Cr @Rs4.42 per unit. While working out her revised Power Purchase cost, PSPCL has reduced/increased the fixed cost (Rs. Cr.) for almost all CGS which is not understandable as to how FC has changes between Sept. and Nov. 2019. PSPCL’s Reply: The Power Purchase rates for November 2019 have been assumed because it would provide more accurate rates for projections of future Power Purchase Cost. Since the Tariff Petition is to be filed in November so the rates of September are taken for projections of Power Purchase. Further, with regard to the changes in quantum of energy at PSPCL‘s periphery, it is submitted that the energy requirements have changed due to the revised T&D Losses approved by the Commission in the BP & CIP Order after the ARR petition was filed by PSPCL. The Fixed Costs have changed as PSPCL has not considered the effect of Mega Power Status, FGD & SNCR towards NPL and TSPL in the additional submissions which were considered earlier in the Tariff Petition filed by PSPCL. Commission’s View: The objector may note the response of PSPCL.
Issue No. 3: TRANSMISSION CHARGES PAYABLE TO PSTCL The proposal of PSPCL to revise the transmission charges payable to PSTCL is only to inflate the ARR. PSTCL has not been revised its ARR under similar exercise for revising transmission loss and its trajectory as per approved Business Plan and Capital Investment Plan. Evidently PSTCL has left it
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to PSERC to revise the figures while issuing the Tariff Order. As such the transmission charges payable to PSTCL though revised by PSPCL are not final figures and are to be determined by PSERC. PSPCL’s Reply: The Transmission charges payable to PSTCL have been revised based on the MYT petition submitted by PSTCL to the Commission. Commission’s View: The objector may note the response of PSPCL.
Issue No. 4: RECOVERY OF REVENUE GAP AND AVERAGE COST OF SUPPLY. PSPCL had purposed to partially recover Rs. 4545.79 Crore of the revenue gap through increase of tariff and worked out the Average Cost of Supply as Rs. 7.26 per unit in the ARR. Now in the additional submission, the recovery proposed through increase in tariff has been reduced to Rs. 2965.40 Crore with Average Cost of Supply as Rs.6.95/unit. PSPCL has not given any justification for arbitrarily changing the amount of partial recovery of revenue gap and fixing amount of Regulatory Assets of the revenue gap. We request the Commission to not to carry forward the revenue gap and partially convert it into Regulatory Asset and urge to fully recover the revenue gap as worked out for the year 2020-21 in the year itself so that the consumers pay the actual cost of supply. It is necessary that the difference is not passed on to the future generations and in line with the principle of "Pay as you go". If such trend of creating Regulatory Asset is approved by the PSERC, this will put the consumers in distress at some stage below the line when huge increase in Tariff will become imminent. This will also create mismatch of GOP subsidy in current and future years. It may also be added here that APTEL has already ordered in many petitions that Regulatory Assets should not be created as a routine and it will be a violation of the orders of APTEL. PSPCL’s Reply: The Regulatory Assets have been created in order to avoid Tariff Shock for the consumers of Punjab. Commission’s View: The Revenue gap is determined by the Commission keeping in view the expenses and income as per MYT Regulations. Tariff order is issued after prudence check and due diligence. However, the concern of the objector regarding Regulatory Asset is noted. Objection No. 40: Nahar Fibres: Issue No. 1: T&D Losses for true up, Revised estimates and MYT period and Distribution loss trajectory. In the Additional Submission, PSPCL has revised the T&D losses for the year 2020-21 from 13.90% as per ARR to 14.8% as per Additional Submission and so on. As per Regulation 8 of MYT Regulations 2019, one of the criteria for adopting base line values for next MYT period shall be true up values of the previous period. The trued up aggregate T&D loss for the year 2018-19 in ARR is 14.17% and thus the T&D loss in 2020-21 have to be less than 14.17%. Therefore, revised /proposed T&D loss of 14.8% in 2020-21 is wrong and needs immediate revision by PSERC. It is evident that heavy investments on system improvement, system augmentation and loss reduction schemes to reduce the T&D losses have not yielded results. PSPCL has failed to achieve the desired loss levels, indicating there by that the cost benefit projections given by PSPCL were wrong. Further, now PSPCL wants that the consumer be burdened for its under achievement of losses. Since T&D losses are controllable parameters as per MYT regulations. PSPCL needs to bear the under achievement and consumer should not be burdened for its under-performance. PSPCL’s Reply: Refer PSPCL‘s reply in issue No. 1 of Objection No. 39. Commission’s View: Refer the Commission‘s view in issue No. 1 of Objection No. 39. Issue No. 2: Power Purchase Cost: In additional submissions, PSPCL has revised the Formats of Fixed charges and surrender of power due to excess contracted capacities Further, the formats of the Power Purchase cost have also been revised by PSPCL and the cost as demanded in ARR and revised now in additional submission for 2020-21 are compared as under:
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Parameter Unit As per ARR As per Addl.
Subm. +/-
Energy purchase MUs 46533.52 47807.10 + 1273.58
Cost of Energy Rs. Cr. 21914.48 21491.68 - 422.80
Fixed Cost Rs. Cr. 8288.85 7996.50 - 292.35
Variable Charge Rs/unit 2.89 2.74 - 0.15
Total Rate Rs./Unit 4.63 4.42 - 0.21
There seems to be something wrong in submission for the MYT period as the change does not show any consistency. Energy surrendered for 2020-21 has reduced but fixed charges for idle capacity have increased. At the same time, Purchase of energy has increased but cost of energy, fixed cost, variable charge and total rate have decreased. The Commission may check the data so that liability of the current year is not shifted to future years. PSPCL’s Reply: In the additional submission although the total quantum of power purchase has decreased, the surrendered quantum of power towards IPPs (i.e. NPL, GVK) has increased. Therefore, the fixed charges on normative basis payable for surrendered power for FY 2020-21 have increased. Further, in the additional submission the power purchase cost for FY 2020-21 to FY 2022-23 has been projected on the basis of November 2019(FY 2019-20) MOD and considering NIL effect of Mega Power Status, FGD & SNCR towards NPL and TSPL. Accordingly, the power purchase cost has been reduced in the Additional Submission. Commission’s View: The objector may note the response of PSPCL. Issue No. 3: Recovery of Revenue gap: The proposal to partly recover the revenue gap in 2020-21 and make the balance as Regulatory asset is not in the interest of consumers as it will be at the cost of consumers who shall have to bear the interest cost of regulatory asset. If this trend is adopted, where will be more violations in recovery of subsidy and defaulting amounts setting a wrong precedent. This shifting of liability to give relief to existing consumers and shifting the liability to future years is also not acceptable. APTEL has also ordered that regulatory assets should not be creed as a routine. We request the Commission not to carry forward revenue gap by creating regulatory asset and recover the revenue gap as worked out for the year 2020-21 in the year itself by appropriate increase in tariff so that the consumer pays the actual cost of supply and the difference is not passed on to the future consumers. PSPCL’s Reply: The Regulatory Assets have been proposed in order to avoid any Tariff Shocks for the consumers. Commission’s View: The concern of the objector is noted. Issue No. 4: PSPCL has not made available the Report of CAG for the year 2018-19 to the stake holders so far whereas this is available to the media as is evident from the report appearing in The Tribune dated 01.03.2020. PSPCL may be directed to make available the report failing which the true up exercise should not be taken up this year and no carrying cost be allowed as per MYT regulations. PSPCL’s Reply: Report of CAG for the year FY 2018-19 has been submitted to the Commission and uploaded on the website of PSPCL. Commission’s View: The objector may note the response of PSPCL. Issue No. 5: PSPCL has proposed rationalization of tariff for different slabs of domestic category proposing relief to domestic consumers up to 2 KW connected load. It is submitted that whereas subsidy is proposed and paid by GOP, PSPCL has taken up on itself to provide subsidy to Domestic Consumers hurting the interests of the other categories of consumers. When GOP has not provided any relief to domestic consumers through reduction in ED, IDF and MT in the budget already presented and PSPCL has recently removed the creamy layer of SC and BC DS consumers from eligibility of GOP subsidy, PSPCL proposed reduction in tariff will simply put the clock reverse. This will also reduce the
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amount of subsidy payable by GOP as the lower tariff will also benefit the SC,BC and FF category of consumers. We also submit that since introduction of subsidy for industrial consumers, PSPCL is trying to increase their burden of tariff this way or that way. For revival of industry to State, such actions should be avoided. While introducing two-part tariff on KVAH tariff or removal of PLEC and introducing TOD tariff, PSPCL had always been insisting on category wise revenue neutrality.We, therefore, request that the increase in tariff should be on proportionate basis or else cost of supply be introduced for all categories. PSPCL’s Reply: Providing subsidy and collection of Taxes is the prerogative of the Government of Punjab. Commission’s View: The concern of the objector is noted.
Objection No. 41: Mandi Gobindgarh Induction Furnace Association
Objection No. 42: HANSCO Iron & Steel Pvt. Ltd.
Objection No. 43: Confederation of Indian Industries (CII)
Issue No. 1: Voltage Rebate to 66/220 KV industry during night hours PSPCL‘s additional submissions are silent on restoring the voltage rebate of 66 / 220 KV
industry during night hours. HT rebate of industry connected at 66/220 KV during night hours stands withdrawn since 1.4.2019 and merged it with TOD rebate with a cap of Rs. 4.45 per unit and thus HT rebate is available only for 16 hours. HT rebate is granted in accordance with the Electricity Act 2003 providing that tariff should be in line with the difference of voltage wise cost of supply for the relevant voltage Hon‘ble APTEL has also upheld this provision and Voltage rebate was also granted to Punjab consumers in view of the numerous orders issued by APTEL in this regard.
Due to the difficulties in implementing voltage wise cost of supply-based tariff, voltage rebate is given to partially compensate such consumers. The difference in cost of supply is increasing over the years and is much more than the HT rebate of Rs 0.25/unit available to 66 KV consumers. Instead of increasing the HT rebate to bring the tariff of HT consumers in line with cost of supply as directed by APTEL, PSERC chose to withdraw the HT rebate by putting a cap on TOD tariff along with HT rebate. Sudden merging of HT rebate in the capping of TOD rebate in the Tariff Order of 2019-20 has brought the 66 KV consumers at par with 11 KV consumers which is not as per the orders of the APTEL. We therefore request for restoring the HT rebate on round the clock basis independently and fix the TOD night rebate independently since both are being granted to achieve separate and distinct goals. PSPCL’s Reply: Voltage rebate is available to consumers getting supply at HT/EHT voltages as per Clause No. 13.2 of General Condition of Tariff of Tariff Order 2019-20. Rebate of 30 paise/kVAh is available to all consumers getting supply at 400/220/132 kV and 25 paise/kVAh to all consumers getting supply at 66/33 kV. However, cumulative effect of ToD rebate and Voltage rebate on the Energy Charges (including reduced Energy Charges for consumption exceeding threshold limit / use of electricity exclusively during night hours) at any time, has been limited to the lowest Energy Charge of Rs. 4.45 per kVAh. Regarding the matter of capping of Rs. 4.45 per unit and HT rebate, the Commission in its Order dated 13.09.19 in Review Petition No. 5 of 2019 filed by industrial consumers, has decided that concessional/ discounted tariff can be provided subject to certain limitations only. It was decided to limit the same to Rs. 4.45 per kVAh, being the marginal cost to generate additional energy. It is further intimated that determination of tariff, rebate or surcharge to any category is prerogative of the Commission as per Electricity Act, 2003 on the basis of data supplied by PSPCL in the ARR, keeping the interest of stakeholders in view. Commission’s View: The suggestion is noted.
Issue No. 2: Return on Equity: PSPCL has not withdrawn the conversion of UDAY Loans into equity of GOP, infusion of equity through loans and demand of Return on Equity of GOP without any cash flow from GOP.
A) Conversion of Consumer Contributions and Grants & Subsidy to equity through FRP
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and claiming ROE on such equity:- As per the FRP approved by GOP, the consumer contribution, subsidies and grants were converted into equity of GOP leading to increase in the equity share capital of GOP in PSPCL from 2617.61 crore to 6081.43 crore w.e.f. 16.4.10. Consequently, ROE was increased from 607.55 crore per year to 1411.50 crore though there was no fresh investment/cash flow by GOP or PSPCL. This revaluation is causing cyclic increase in ARR for subsequent years also and has hurt the consumers through increase intariff. Regulation 25.4 clear states that only cash infusion is to be treated as equity for grant of ROE. The consumer contribution, grants and subsidies are not cash flow for the purpose of equity as per settled financial principles and this has been acknowledged by the Commission in the proposed amendment of Regulation 25.4 and more recently in MYT Regulations. Even the CAG has also raised objections to it. This matter was appealed in APTEL by consumers and it has already directed PSERC to reconsider the issue vide judgment Dated 17-12-14 in Appeal No 168 and 142 of 2013. PSPCL has filed an Appeal against the order in Supreme Court and stay has been granted. Accordingly, we will approach the Commission to re determine ROE for all the years w.e.f. 2011-12 onwards after the verdict of the Hon‘ble SC. PSPCL’s Reply: The matter regarding Return on Equity is sub-judice before the Hon‘ble Supreme Court and PSPCL has no comments to offer in this regard. Commission’s View: The Commission will take action on the issue as per the decision of the Supreme Court.
B) Conversion of Loans taken over by GOP under UDAY scheme into equity: PSPCL had proposed that loans taken over by GOP under UDAY scheme dated 4.3.2016 amounting to Rs 15628.26 Cr be converted into equity of GOP in PSPCL whereby GOP equity in PSPCL is proposed to be increased from 6081.43 Cr to 21709.69 Cr and increase in Return on Equity @ 15.9%from Rs 966.95 Cr. to 3451.84 Cr. PSPCL has not withdrawn the demand in the Additional Submissions and still propose to unduly burden the consumers for the additional ROE. The MOU entered into between PSPCL, GOP and MOP dated 4.3.2016 regarding implementation of UDAY scheme in Punjab submitted to the Commission vide CE/ARR & TR letter no 481/CC/DTR/Dy.CAO/246/Vo11-1 dated 12.4.2016 clearly says that the Loans of Rs 15628.26 will be adjusted by conversion of Rs 11728.26 Cr as GOP grant at the end of 5
th year and Rs 3900 Cr. as
equity. This is clear violation of the MOU and is illegal. PSERC, for the purpose of grant of ROE, is required to consider the equity actually contributed and subscribed by GOP and such contribution must be through cash flow and not through book adjustment as it will undue burden the consumers of the State. It is not necessary for the PSERC to grant Return on Equity on equity as projected by PSPCL and can grant the ROR on equity actually contributed. It is also submitted that all the loans covered under UDAY does not qualify for consideration as PSERC had been disallowing large part of WC and Capital loans in the tariff orders. We request that only loans accepted by PSERC as per TO 2016-17 be considered for adjustment under UDAY and liability of unapproved WC and Capital loans be borne by PSPCL. The approved loans covered under UDAY be converted into GOP grants and equity in the ratio approved in UDAY MOU but ROE be granted only if there is cash flow/actual contribution/payments. PSPCL’s Reply: The Government of Punjab will be converting the UDAY loans of Rs.15,628 Crores into equity. As per PSERC MYT Regulations PSPCL is entitled to return on equity of 15.50% on the equity amount. Commission’s View: Equity and Return on Equity is determined and approved by the Commission as per PSERC Regulations after prudence check.
C) Non infusion of additional equity for Capital investment. PSPCL has proposed financing of Capital Investment through additional equity and loan through Debt Equity ratio of 70% to 30% without disclosing the source from which the cash flow will be brought when PSPCL is showing loss in its Annual Financial Reports and there is no fund flow from GOP for equity contribution. MYT Regulations are very clear that the Debt Equity ratio will be kept as normative 70:30 if the equity is more than 30% and actual Debt equity if it is less than 30%. Therefore, there is no requirement of financing the capital works with 30% equity by taking loan on 8 to 9% and earning 15.5 to 16.5% ROE
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on the same. This is nothing but fleecing of the consumers. Such arrangement needs to be rejected out-rightly with strong message to the Licensee to not to make such attempts to increase the sale rate of power on artificial means. PSPCL’s Reply: PSPCL has claimed equity infusion of 30% as PSPCL has been given profits in regulatory account. PSPCL wishes to infuse the equity from the profits given in the Regulatory accounts. Commission’s View: Equity and Return on Equity is determined and approved by the Commission as per PSERC Regulations after prudence check.
Issue No. 3: T&D losses for true up, revised estimates and MYT period and Distribution loss trajectory
In the Additional Submissions, PSPCL has revised the T&D losses for the 2nd
MYT period as per the loss level approved by PSERC in the order dated 3.12.2019 in Petition No.18 of 2019 regarding approval of Business Plan and Capital Investment Plan. In the ARR submitted by PSPCL on 30-11-2019, PSPCL had itself proposed aggregate T&D loss of 13.90% for the year 2020-21. However, now in the Additional Submissions, Loss for 2020-21 has been proposed as14.8%. MYT Regulations 2019 provide the criteria for adopting base line values for MYT period in Regulation 8. The true up data for the year 2018-19 in MYT ARR indicates T&D loss 14.17% and thus the T&D loss in 2020-21 cannot be more than 14.17%. Therefore, the proposal of T&D loss of 14.8% in 2020-21 finalized on BP & CIP petition (When audited figures of 2018-19 were not available) is wrong and needs immediate revision by PSERC. If PSPCL proposal in additional submissions is accepted, it indicates that PSPCL has failed to achieve the trajectory approved by the Commission for the first MYT controlperiodof2017-18 to 2019-20 and now requires upward revision at the start of 2
nd MYT control period.
It is pointed out that PSERC has been approving and PSPCL has been investing heavily on system improvement, system augmentation and loss reduction schemes and got full support of GOI and GOP to reduce the T&D losses under UDAY and other schemes. As is evident from PSPCL projections, PSPCL has failed to achieve the desired loss levels, indicating there by that the cost recovery projections given by PSPCL were wrong. Further, now PSPCL wants that the consumer be burdened for its under achievement of losses. Since T&D losses are controllable parameter as per MYT regulations, PSPCL needs to bear the under achievement and consumer should not be burdened for its under performance. PSPCL’s Reply: Refer PSPCL‘s reply in issue No. 1 of Objection No. 39. Commission’s View: Refer the Commission‘s view in issue No. 1 of Objection No. 39.
Issue No. 4: Power Purchase Cost In additional submissions, PSPCL has revised the Formats of Fixed charges and surrender of power due to excess contracted capacities. There seems to be something wrong in submissions for the MYT period as the quantum of surrendered power has reduced but fixed charges on normative basis payable for surrendered power has increased. At the same time, PSPCL has reduced the power purchase cost in Additional submissions. PSERC may check the data so that liability of the current year is not shifted to future years. PSPCL’s Reply: Refer PSPCL‘s reply in issue No. 2 of Objection No. 40. Commission’s View: Refer the Commission‘s view in issue No. 2 of Objection No. 40.
Issue No. 5: Recovery of Revenue gap
ARR proposed to recover Rs 4545. 79 Crore through increase of tariff with average cost of supply as Rs 7.26 per unit. The additional submissions propose reduced recovery of Rs 2965.40 Crore through increase in tariff with average cost of supply as Rs 6.95 per unit. PSPCL has not given any justification for arbitrary decrease in recovery of revenue gap and variation in the amount of creating regulatory asset of the revenue gap. We request the Commission to not to carry forward revenue gap by creating regulator asset and recover the revenue gap as worked out for the year 2020-21 in the year itself by appropriate increase in tariff so that the consumer pays the actual cost of supply and the difference is not passed on to the future consumers. We also submit that if such trend of creating regulatory asset is approved by the PSERC, this will put
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the consumers in loss as they will have to bear the interest charges for financing regulatory asset which will be loaded in the tariff of future years. Further, if this trend is adopted, there will be more violations in recovery of subsidy and defaulting amounts setting a wrong precedent. It may also be added here that APTEL has already ordered that regulatory assets should not be created as a routine and it will be violation of the orders of the APTEL. We therefore request that our above submissions be considered while processing the additional submissions of PSPCL as referred to above. PSPCL’s Reply: Refer PSPCL‘s reply in Issue No. 4 of Objection No. 39. Commission’s View: Refer Commission‘s view in Issue No. 4 of Objection No. 39. Objection No. 44: Nahar Spinning Mills Limited (Nahar Fibres). Issue No. 1: T&D Losses for true up, Revised estimates and MYT period and Distribution
loss trajectory. PSPCL has revised the T&D losses for the year 2020-21 from 13.90% as per ARR to 14.8% as per Additional Submission and so on. The trued up aggregate T&D loss for the year 2018-19 in ARR is 14.17% and thus the T&D loss in 2020-21 have to be less than 14.17%. Therefore, revised /proposed T&D loss of 14.8% in 2020-21 is wrong and needs immediate revision by PSERC. It is evident that in spite of heavy investment on T&D loss reduction schemes, PSPCL has failed to achieve the trajectory. Thus cost projections given by PSPCL were wrong. Now PSPCL wants that the consumer be burdened for its under achievement of losses. Since T&D losses are controllable parameters as per MYT regulations. PSPCL needs to bear the under achievement and consumer should not be burdened for its under-performance. PSPCL’s Reply: Refer the PSPCL‘s reply in issue No. 1 of Objection No. 39. Commission’s View: Refer the Commission‘s view in issue No. 1 of Objection No. 39.
Issue No. 2: Power Purchase Cost: PSPCL has revised the Formats of Fixed charges and surrender of power due to excess contracted capacities. We are unable to understand as to how the fixed charges of idle capacity in 2020-21has increased when surrendered quantum has decreased due to increase in T&D losses. Further, PSPCL has also revised the formats of Power Purchase cost for FY 2020-21. We are unable to understand as to how cost of power purchase has decreased by Rs. 422.80 Crore whereas power purchase has increased by 1273.58 MUs. There seems to be something wrong in submission for the MYT period as the change does not show any consistency. PSPCL is manipulating the data so as to artificially reduce the ARR for 2020-21 which will increase the ARR of 2021-22 during revised estimates and 2022-23 during true up. As presently GoP is committed to give subsidy to many categories in 2020-21 which may not be available during next year or thereafter and all such consumers will suffer. APTEL has already ordered that ―Under business as usual conditions, no creation of Regulatory Asset shall be allowed‖ i.e. Regulatory Asset should not be created as a routine. We request that ARR be strictly dealt with as per MYT Regulations so that consumers get full benefit of GoP subsidy schemes. Commission’s View: The Commission notes the concern of the objector.
Issue No. 3: CAG Audit Report for FY 2018-19: As PSPCL has failed to make available the CAG report for FY 2018-19 to the stake holders as far whereas this is available to media as is evident from the report appearing in The Tribune dated 01.03.2020. PSPCL may be directed to make available the report failing which the true up exercise for 2018-19 should not be taken up this year and no carrying cost be allowed as per MYT regulations. Commission’s View: CAG report has been submitted and uploaded on website by PSPCL. Issue No. 4: MOD of IPPs and PSPCL power plants: As per directions of the Commission, PSPCL has started placing Merit Order Dispatch (MOD) on its website. As per data of December 2019 and January 2020. MOD of Punjab plants is as under:
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(Rs./kWH) December 2019 January 2020
Rajpura (NPL) 2.96 2.76
Talwandi Sabo (TSPL) 3.62 3.57
Goindwal Sahib (GVK) 3.67 4.13
Ropar GGSSTP (PSPCL) 3.87 4.23
Lehra Mohabbat GHTP (PSPCL) 4.44 4.22
So even after payment of coal washing and other charges, the MOD rate of IPPs is lower than PSPCL plants and the difference is in the range of 65 to 145 paise per unit. Therefore we feel that misinformation campaign is being spread against IPPs and PSPCL is benefitted compared with its power plants. Refer to the news item dated 29.02.2020 in The Tribune in reference to audit in PSPCL accounts. It is stated that PSPCL did not pay the washing charges to the IPPs which resulted in payment of Rs. 961 Crore for transportation of unwashed coal with ash content up to 63.16%. PSPCL had also submitted to PSERC that washed coal resulted in saving of 59.16 paise per unit of generation. Thus the hue and cry against the IPPs is wrong. Commission’s View: Objection is of general nature and does not relate to the Tariff Petition. Issue No. 5: PSPCL signed 8 PPAs for conventional projects and around 140 PPAs for NRSE projects after signing PPA with 1
st IPP i.e. TSPL. 8 PAAs are signed with NTPC and NHPC etc.
should have been avoided by PSPCL in view of surplus scenario. PSPCL‘s action to hold IPPs responsible solely for surplus scenario is not justified. In fact PSPCL failed to prepare its own power projections and revising it on yearly basis and therefore consumers can not be held responsible for such excess capacity. Commission’s View: Issue does not relate to the Tariff Petition. However the concern of the objector is noted. Objection No. 45: Batala Foundry Cluster. Issue No. 1: State of Punjab vide notification dated 17.10.2017 approved and passed special package and sick MSME (Micro, Small and Medium enterprises) giving special relief and concession for its rehabilitation and revival such as minimum charges of electricity connection would be exempted during the closure period and only cost of consumed units were to be paid and to be recovered as per the plan approved by the financial institution with the normal interest. However, surprisingly PSPCL had not till date notified the requisite relief resultantly the notified benefit is not being extended to sick MSME, despite being sanction and notified by GoP. Issue No. 2: The notified benefit is required to be extended to all eligible sick MSME w.e.f. 17.10.2017 or earlier date of other notified industrial policies and the excess payment received by PSPCL is liable to be refunded and necessary directions are required to be issued in this regard to PSPCL for effective compliance of directives issued by GoP. Issue No. 3: In order to boost industrialization and revive economic activity in the State, Punjab Cabinet had further approved the new Industrial and Business Power Tariff at Rs. 5 per unit w.e.f. 01.11.2017 including provisions of fixed Tariff for years to existing and new industries. However, PSPCL is not following the spirit of directives issued by GoP and it had devised a new technique to defeat financial relief by converting the head of minimum charges into fixed charges and extort huge money from MSME, apart from several other additional charges under various heads are also being levied on MSME‘s with result in exuberant bill amount, wherein the average per unit cost comes around Rs. 9-10 against promise of Rs. 5 per unit given by GoP. It would be useful to submit that prior to this the fixed charges were not levied. The imposition of fixed charges along with actual consumption charges, tactically takes away the financial benefit of Rs. 5 per unit extended by GoP. Issue No. 4: The notified benefit is required to be extended to all eligible MSMEs w.e.f. 01.11.2017 and the fixed charges and other surcharges being levied by PSPCL are liable to be scrapped and the
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excess amount received by PSPCL w.e.f. 01.11.2017 should be refunded to all eligible MSMEs. Commission’s View: Subsidy is the prerogative of the State Government.
Objection No. 46: Government of Punjab, Department of Power, (Power Reforms Wing), Chandigarh.
Issue No. 1: Power Purchase Cost
PSPCL has projected Power Purchase Cost for the period FY 2019-20 and FY 2020-21 at Rs. 22813.26 Crore and Rs. 21914.51 Crore respectively. Although, the PSPCL has purchased power on merit order basis to meet demand supply gap, efforts should be made by PSPCL to purchase power for FY 2020-21 at competitive prices. PSPCL should ensure that Power Purchase and its sale to the consumers should be commercially viable and do not result in any net loss to PSPCL. It is encouraging to note that PSPCL is selling power at a good price to make some profits and help in reducing the fixed charges. PSPCL should endeavor to buy bio-mass based renewable power at competitive price so as to fulfill the non-solar RPO at lower price. Otherwise, buying of this costlier power will further aggravate the problem of paying exorbitant fixed charges and any additional unit of costly renewable energy in the system will lead to surrendering the conventional energy from IPPs as PSPCL is surplus in power. Suitable tie-ups nationally/internationally and other avenues for sale of power are required to be explored urgently by PSPCL.
The Commission may allow the actual Power Purchase Cost and also take a judicious view as regards the quantum of power being purchased vis-a-vis its optimum utilization/ requirement.
Commission’s View: The Commission agrees with Govt. that PSPCL should ensure the power purchase and its sale should be commercially viable and do not result in any net loss to PSPCL.
The Commission determines the quantum of power purchase on the basis of energy balance, which is prepared from the estimated energy sale of PSPCL, target T&D losses and energy available to PSPCL from its own sources. The difference in quantum of power purchase claimed and allowed is primarily on account of over assessment of AP consumption and under achievement of target distribution losses by PSPCL. Further, the rate of power purchase is provisioned for on the basis of rates of the previous year payments. This is trued up afterwards on the basis of the actual rate at which payments have been made.
Issue No. 2: Employee Cost
PSPCL should reduce Employee‘s Cost and bring in efficiency. Commission’s View: The Commission agrees with Govt. PSPCL has been directed to do a proper cadre review keeping in mind the need to staff BBMB properly while also redeploying the surplus staff from GNDTP and GGSSTP optimally.
Issue No. 3: DSM Fund
The Commission is requested to approve DSM fund to promote various DSM programmes, as these programmes will help in reducing the Power Purchase Cost. The utility in this regard needs to be proactive to innovate and implement various DSM programmes and utilize the funds effectively.
Commission’s View: The Commission has been allowing DSM funds as sought by PSPCL in the last few tariff orders but no expenditure has been reported by the utility. The Commission had directed PSPCL to execute at least one pilot project each for Agriculture DSM and efficient lighting to showcase the benefits to the stakeholder. The funds spent on these measures would be allowed on actual basis after prudence check. Refer directive no. 6.12 of this Tariff Order. Issue No. 4: Energy Consumption
The Commission on its part should device a mechanism to encourage energy consumption while at the same time encouraging energy efficiency. The Commission should determine a tariff structure that encourages such behavior from the consumer and also incentivize industry which shall increase economic output, boost employment and increase consumption.
View of the Commission:
The Two Part Tariff introduced by the Commission inherently encourages increased consumption as the consumers with higher consumption would have a lower overall unit rate. Since FY 2016-17 the
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Commission has provided for a reduced tariff for consumption in excess of the last two years and since FY 2018-19 there has been a special tariff to increase night consumption. The Commission has also allowed reduced fixed charges for marriage places and Hot mix / Ready mix plants to shift these loads from DG Sets to PSPCL‘s system. A low tariff for electric vehicle charging stations has also been introduced to increase the energy consumption.
Issue No. 5: Capital Expenditure
The Commission is requested to approve the proposed Capital Expenditure amounting to Rs. 2606.19 Crore for FY 2019-20 and Rs. 2599.39 Crore for FY 2020-21 which includes R&M activities of the Thermal Power Plants, Network Capacity addition, Improvement Projects for Network upto 66 KV, Construction of new Sub-Stations and Mini Grid Sub-Stations alongwith associated Transmission Lines and for Improvement works in Distribution.
View of the Commission:
The Commission determines the Capital Expenditure as per PSERC Regulations after due process. PSPCL has already incurred Capital Expenditure in 2019-20 which will be considered at the time of true-up. For the 2
nd MYT Control Period, the Commission has approved Capital Investment Plan of
Rs. 2504.96 for FY 2020-21, Rs. 2078.62 for FY 2021-22 of and Rs. 1845.74 for FY 2022-23.
Issue No. 6: Energy Audit
It should be made obligatory for the utility to carry out energy audit of its system to identify high loss areas and take remedial measures to reduce the same. PSPCL should also ensure that the various schemes such as DDUGJY, IPDS etc. being implemented for improving the Distribution System and hence T&D losses, are completed within the targets specified by Ministry of Power, Government of India so that the grants are utilized fully. In case timelines and targets are not achieved, PSPCL should bear the liability on account of conversion of grant into loan in such schemes.
View of the Commission:
The Commission has issued directives to PSPCL in Tariff Order FY 2019-20 to reduce the losses of divisions with distribution loss level above 25% to below 15% during FY 2019-20 and carry out energy audit of at least one circle and submit the report by March 2020. Further, PSPCL has been directed to submit the quarterly report on the action being taken and status of losses achieved in these Divisions. Refer Directive No. 6.1.
Issue No. 7: T&D Losses and AP consumption
The main emphasis should be to continue to pursue the loss reduction programs initiated in earlier years and also increasingly use the technology to target erring consumers and reduce the losses further during the projection period. The investments being made under Sub-transmission and Distribution strengthening schemes are also expected to aid in the reduction of Distribution loss both in urban and rural areas. Accurate estimation of T&D Losses has gained importance as the level of losses directly affects the sales and power purchase requirements and hence has a bearing on the determination of electricity tariff of a utility by the Commission. The issue of T&D Losses is of equally deep concern to the Government, as there is a direct correlation between AP consumption and T&D loss pattern. Any disallowance/reduction in AP consumption estimated by the PSPCL is reflected as a corresponding increase in T&D loss level in Commission‘s estimate. It is requested that the Commission may keep AP Tariff hike at a reasonable level till the various other aspects like improvement in accuracy in measurement in AP and T&D losses are taken care of.
It is vital to accurately measure the AP consumption of the State. AMR Scheme should be implemented in the right earnest by PSPCL. As the funds for feeder segregation in Kandi Area have been allocated, PSPCL should complete the work on war-footing. It is hoped that the Commission will make prudence checks on the AP consumption on some of the AP feeders and arrive at AP consumption as accurate as possible.
View of the Commission:
The consumption of AP consumers is being assessed on the basis of energy pumped into AP feeders which is recorded at the substations. However, for a more accurate assessment of AP consumption, PSPCL has already been directed to cover at least 1% AP feeders under 100% metering and compute the losses on the basis of input and metered sale of these feeders. Directions has been also issued for segregation of Kandi Area mixed feeders.
The Commission has also issued directions to PSPCL to ensure availability of monthly AMR data along with feeder wise sanctioned load of AP consumers of all AP feeders. However, the said directive is pending full compliance since FY 2013-14. Presently AMR data of only 1200-1500 AP feeders is available despite repeated directions in the tariff orders of last few years. It would be in
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Govt‘s interest to insist that the utility assess its AP consumption correctly. Refer directive No. 6.4 of this Tariff Order to PSPCL.
Issue No. 8: Tariff
It is submitted that for subsidized categories i.e. for Industrial And Agriculture, PSPCL has proposed a tariff hike varying from 12.36% to 15.56% for Industrial category and 37.50% for Agriculture category. The Government does not support any proposal to raise the tariff. The Utility should be advised to reduce its expenditure and increase internal and external efficiencies.
As per the data obtained from PSPCL the number of Large Supply (LS) Industry users is 8785 with 32321 belonging to Medium Supply (MS) Category and 1,00,995 Small Scale users (SP) category. However, the Large Supply industry received 80.60% of the total subsidy to the industries for FY 2019-20 till December, while MS and SP supply received 10.67% and 8.72% respectively. This translates to Rs. 10.47 lacs of subsidy per LS user in comparison to Rs. 0.38 lacs for MS and Rs. 0.10 lacs for SP users. Industrial tariff needs to be rationalized to ensure that the principle of equity is established and industrial subsidy is not concentrated in Large Supply segment alone as the MS and SP Industry is responsible for significant employment and economic growth in the State.
View of the Commission:
The larger share of subsidy per consumer for Large Supply Industry is due to its higher consumption as compared to medium supply as small power industrial consumers. Large Industrial Supply accounts for 27% energy consumption 29.42% of the revenue from industry for PSPCL. In any case, grant of subsidy is the Govt‘s prerogative.
Issue No. 9: Return on Equity (RoE)
The Return on Equity (RoE) incorporated in the calculation of tariff for the Control Period has witnessed a significant rise on account of conversion of UDAY Discom Loans into Equity. The takeover of UDAY Loans as Equity was aimed at financial turnaround of Discom and by increasing the RoE component by 140%, an additional amount of almost Rs.1325 Crore is being computed in the Net Revenue Requirement. It is noteworthy that the Government has already taken a financial hit by converting loans into equity and now by building the additional component of RoE in the tariff, the citizens of the State are expected to again bear the brunt of it. Keeping this in mind, the Government of Punjab is willing to let go of the Return on its Equity by keeping it unchanged at Rs. 942.62 Crore for the next five years and the RoE on UDAY Loan Equity may be incorporated in the subsequent five years in an equal and phased manner so that the ARR of PSPCL is not projected in an enhanced manner thereby leading to a demand of increased tariff by PSPCL.
View of the Commission:
Noted. Refer Para no. 4.19.
Issue No. 10: Sales Projection for Industrial Category:
For FY 2019-20, PSPCL had estimated a subsidy to industries amounting to Rs. 1991 Crore as per the Tariff Order. As per the data provided by PSPCL in this regard for 2018-19 and H1 of 2019-20, the assessment of the Finance Department is that the industrial subsidy amount should be estimated to be around Rs.1500 Crore in FY 2019-20 keeping in view the trends observed. This pegs the estimates of PSPCL 32.71% higher than those observed by FD. The growth estimated in the industrial subsidy as per internal assessment is 3.20% to FY 2019-20 over previous FY. Therefore, the same growth rate be applied for the future control periods for estimation of subsidy to industries.
View of the Commission:
Refer to para 4.2.1.
Issue No. 11: Subsidy
The State Government is committed to supply free power to AP consumers and 200 units per month to SC Domestic (DS) consumers, Non-SC BPL DS consumers, BC DS consumers and 300 units Freedom Fighter DS consumers in the State. Besides, the State Government is also committed to provide supply to industry tariff @Rs.5/- per Kvah (excluding FCA). The difference between the variable tariff determined by the Commission and tariff @ Rs.5/- per Kvah shall be borne by the State Government.
View of the Commission:
Noted.
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Issue No. 12: Tariff of Domestic Category
As Domestic consumers has faced tariff hike of 60% in the last 10 years and no subsidy has been given to this category for the last many years. Besides, due to the present pandemic COVID-19: the National Disaster under the National Disaster Management Act-2005 and resultant complete shutdown of trade, business and industry, incomes and paying capacity of the households, both rural and urban, have been badly impaired and reduced considerably in the State of Punjab. Therefore, the State Government has issued Order under Section 108 of the Electricity Act 2003 to give relief to give Domestic category and if required, cross subsidy level can be increased upto +40% for NRS category. The Commission may also consider the Policy stated in this order and allow readjustment of Domestic tariff accordingly.
View of the Commission:
The direction is being dealt with as per due process of law.
