KARNATAKA ELECTRICITY REGULATORY COMMISSION
TARIFF ORDER 2017
OF
MESCOM
ANNUAL PERFORMANCE REVIEW FOR FY16
&
REVISION OF ANNUAL REVENUE REQUIREMENT
FOR FY18
&
REVISION OF RETAIL SUPPLY
TARIFF FOR FY18
11th April 2017
6th and 7th Floor, Mahalaxmi Chambers
9/2, M.G. Road, Bengaluru -560 001
Phone: 080-25320213 / 25320214
Fax : 080-25320338
Website: www.karnataka.gov.in/kerc - E-mail: [email protected]
ii
C O N T E N T S
CHAPTER
Page No.
1 Introduction 3
1.0 Mangalore Electricity Supply Company Ltd., -
MESCOM
3
1.1 MESCOM at a Glance 5
1.2 Number of Consumers, Sales in MU to various
categories of consumers and details of Revenue
for FY16
5
2 Summary of Filing and Tariff Determination
Process
7
2.0 Background for Current Filing 7
2.1 Preliminary Observations of the Commission 7
2.2 Public Hearing Process 8
2.3 Consultation with the Advisory Committee of the
Commission
8
3 Public Consultation 10
3.1 Public Consultation – Suggestions / Objections
and Replies
10
3.2 List of persons who filed written objections 10
3.3 Gist of replies by MESCOM 11
3.4 List of persons who made oral submissions 11
3.5 Gist of submissions made during Public Hearing 12
4 Annual Performance Review for FY16 15
4.0 MESCOM’s Application for APR for FY16 15
4.1 MESCOM’s Submission 15
4.2 MESCOM’s Financial Performance as per
Audited Accounts for FY16
17
4.2.1 Sales for FY16 18
4.2.2 Distribution Losses for FY16 24
4.2.3 Power Purchase for FY16 25
4.2.4 RPO Compliance by MESCOM for FY16 28
4.2.5 Operation and Maintenance Expenses 30
4.2.6 Depreciation 33
4.2.7 Capital Expenditure for FY16 35
4.2.8 Interest and Finance Charges 49
4.2.9 Other Debits 53
4.2.10 Net Prior Period Charges 53
4.2.11 Return on Equity 54
4.2.12 Exceptional Items 56
4.2.13 Income Tax 56
4.2.14 Other Income 56
4.2.15 Fund towards Consumer Relations / Consumer
Education
57
4.2.16 Carrying cost on Regulatory Assets 57
iii
4.2.17 Revenue for FY16 58
4.2.18 Subsidy for FY16 58
4.3 Abstract of Approved ARR for FY16 59
4.3.1 Gap in Revenue for FY16 61
5 Revised Annual Revenue Requirement for FY18 62
5.0 Revised Annual Revenue Requirement for FY18 -
MESCOM’s application
62
5.1 Annual Performance Review for FY16 63
5.2 Revised Annual Revenue Requirement for FY18 63
5.2.1 Capital Investments for FY18 63
5.2.2 Sales Forecast for FY18 67
5.2.3 Distribution Losses for FY18 75
5.2.4 Power Purchase for FY18 77
5.2.5 RPO Target for FY18 80
5.2.6 O & M Expenses for FY18 83
5.2.7 Depreciation 87
5.2.8 Interest and Finance charges 88
5.2.9 Other Debits, Net Prior Period Charges &
extraordinary Items
93
5.2.10 Return on Equity 94
5.2.11 Other Income 96
5.2.12 Fund Towards Consumer Relations / Consumer
Education
96
5.2.13 Contribution to Pension and Gratuity trust 97
5.3 Abstract of Revised ARR for FY18 98
5.4 Segregation of ARR into ARR for Distribution
Business and ARR for Retail Supply Business
99
5.5 Gap in Revenue for FY18 100
6 Determination of Retail Supply Tariff for FY18 102
6.0 MESCOM’s proposal 102
6.1 Tariff Application 102
6.2 Statutory Provisions guiding determination of
Tariff
102
6.3 Factors considered for Tariff setting 103
6.4 New Tariff proposals by MESCOM 104
6.5 Revenue at existing Tariff and deficit for FY18 110
6.6 Wheeling and Banking Charges 139
6.6.1 Wheeling within MESCOM area 140
6.6.2 Wheeling of Energy using Transmission Network
or network of more than one licensee
141
6.6.3 Charges for Wheeling of energy by RE sources
(Non REC route) to consumer in the State
142
6.6.4 Charges for Wheeling Energy by RE sources
wheeling energy from the State to a
consumer/other outside the State and for those
opting for Renewable Energy Certificate
142
6.6.5 Banking charges and additional surcharges 143
6.7 Cross Subsidy surcharge 143
6.8 Other issues 146
iv
6.8.1 Tariff for Green power 146
6.9 Other Tariff related issues 146
6.10 Cross Subsidy Levels for FY18 148
6.11 Effect of Revised Tariff 149
6.12 Summary of Tariff Order 149
6.13 Commission’s Order 151
Appendix 153
Appendix-I 184
v
LIST OF TABLES
Table
No.
Content Page
No.
4.1 ARR for FY16 – MESCOM’s Submission 16
4.2 Financial Performance of MESCOM for FY16 17
4.3 MESCOM’s Accumulated Profit / Losses 18
4.4 Approved & Actual Sales for FY16 19
4.5 Approved Sales for FY16 23
4.6 MESCOM’s Power Purchase for FY16 25
4.7 Shortfall in availability of power in FY16 26
4.8 RPO Compliance for FY16 – MESCOM’s Submission 28
4.9 Non-Solar RPO 29
4.10 Solar RPO 29
4.11 O & M Expenses – MESCOM’s Submission 30
4.12 Approved O & M Expenses as per Tariff Order dated
2.3.2015
31
4.13 Allowable inflation for FY16 32
4.14 Normative O & M Expenses for FY16 32
4.15 Allowable O & M Expenses for FY16 33
4.16 Depreciation for FY16- MESCOM’s Submission 34
4.17 Allowable Depreciation for FY16 35
4.18 Capital expenditure of MESCOM for FY16 36
4.19 Approved Vs Actual capital investment 38
4.20 Details of assets created during FY16 39
4.21 Selection of sample for prudence check 39
4.22 Gist of prudence check findings for FY16 40
4.23 Details of works not meeting prudence norms 41
4.24 Details of works which are conditionally prudent 41
4.25 Summary of Works having cost overrun 42
4.26 Division wise summary of Works having cost overrun 42
4.27 Summary of Woks having time overrun 43
4.28 Division wise summary of Works having time overrun 43
4.29 Details of amounts disallowed in APR of FY16 45
4.30 Allowable Interest on Loans – FY16 49
4.31 Allowable Interest on Working Capital for FY16 51
4.32 Allowable Interest and Finance Charges 52
4.33 Allowable Other Debits 53
4.34 Status of debt equity ratio for FY16 54
4.35 Allowable Return on Equity 55
4.36 Return on equity for additional equity received during
FY16
55
4.37 Approved revised ARR for FY16 as per APR 59
5.1 Revised ARR for FY18-MESCOM’s Submission 62
5.2 Capital investment for FY18 – MESCOM’s Submission 64
5.3 Mid-year number of IP Set Installations 73
5.4 Approved sales for FY18 75
vi
5.5 Approved & Actual Distribution Losses – FY11-FY16 76
5.6 Approved Distribution Losses for FY18 76
5.7 Power Purchase quantum and cost as filed by
MESCOM
77
5.8 Approved Power Purchase quantum and Cost for the
State
79
5.9 Approved Power Purchase quantum and Cost of
MESCOM for FY18
80
5.10 Estimates of RPO for FY18 81
5.11 Anticipated additional RE capacity for FY18 81
5.12 Anticipated additional RE energy for FY18 82
5.13 Revised O & M Expenses for FY1 – MESCOM’s
Submission
84
5.14 Approved O & M Expenses for FY18 as per
Commission’s Order dated 30th March, 2016
85
5.15 Approved O & M Expenses for FY18 86
5.16 Depreciation FY18 – MESCOM’s Submission 87
5.17 Approved Depreciation for FY18 88
5.18 Interest on Capital Loans - MESCOM’s Submission 89
5.19 Approved Interest on Loans for FY18 90
5.20 Interest on Working Capital – MESCOM’s Submission 90
5.21 Approved Interest on Working Capital for FY18 91
5.22 Interest on Consumer Security Deposits for FY18 –
MESCOM’s Submission
92
5.23 Approved Interest on Consumer Security Deposits for
FY18
92
5.24 Approved Interest and Finance Charges for FY18 93
5.25 Return on Equity – MESCOM’s Submission 94
5.26 Status of Debt Equity Ratio for FY18 95
5.27 Approved Return on Equity for FY18 95
5.28 Approved Revised ARR for FY18 98
5.29 Approved Segregation of ARR FY18 99
5.30 Approved Revised ARR for Distribution Business – FY18 100
5.31 Approved ARR for Retail Supply Business- FY18 100
5.32 Revenue Gap for FY18 101
6.1 Revenue Deficit for FY18 110
6.2 Wheeling charges 140
vii
LIST OF ANNEXURES
SL.NO. DETAILS OF ANNEXURES Page
No.
I Total Approved Energy and Cost of all ESCOMs for
FY17
198
II Approved Power Purchase of MESCOM – FY18 201
III Proposed and approved Revenue for FY18 204
IV Electricity Tariff – 2018 205
viii
ABBREVIATIONS
AAD Advance Against Depreciation
AEH All Electric Home
ABT Availability Based Tariff
A & G Administrative & General Expenses
ARR Annual Revenue Requirement
ATE Appellate Tribunal for Electricity
BST Bulk Supply Tariff
CAPEX Capital Expenditure
CCS Consumer Care Society
CERC Central Electricity Regulatory Commission
CEA Central Electricity Authority
CPI Consumer Price Index
CWIP Capital Work in Progress
DA Dearness Allowance
DCB Demand Collection & Balance
DPR Detailed Project Report
EA Electricity Act
EC Energy Charges
ERC Expected Revenue From Charges
ESAAR Electricity Supply Annual Accounting Rules
ESCOMs Electricity Supply Companies
FA Financial Adviser
FKCCI Federation of Karnataka Chamber of Commerce & Industry
FR Feasibility Report
FoR Forum of Regulators
FY Financial Year
GFA Gross Fixed Assets
GoI Government Of India
GoK Government Of Karnataka
GRIDCO Grid Corporation
HP Horse Power
HRIS Human Resource Information System
ICAI Institute of Chartered Accountants of India
IFC Interest and Finance Charges
IW Industrial Worker
IP SETS Irrigation Pump Sets
KASSIA Karnataka Small Scale Industries Association
KEB Karnataka Electricity Board
KER Act Karnataka Electricity Reform Act
KERC Karnataka Electricity Regulatory Commission
KM/Km Kilometre
KPCL Karnataka Power Corporation Limited
KPTCL Karnataka Power Transmission Corporation Limited
KV Kilo Volts
ix
KVA Kilo Volt Ampere
KW Kilo Watt
KWH Kilo Watt Hour
LDC Load Despatch Centre
MAT Minimum Alternate Tax
MD Managing Director
MESCOM Mangalore Electricity Supply Company
MFA Miscellaneous First Appeal
MIS Management Information System
MoP Ministry of Power
MU Million Units
MVA Mega Volt Ampere
MW Mega Watt
MYT Multi Year Tariff
NFA Net Fixed Assets
NLC Neyveli Lignite Corporation
NCP Non Coincident Peak
NTP National Tariff Policy
O&M Operation & Maintenance
P & L Profit & Loss Account
PLR Prime Lending Rate
PPA Power Purchase Agreement
PRDC Power Research & Development Consultants
REL Reliance Energy Limited
R & M Repairs and Maintenance
ROE Return on Equity
ROR Rate of Return
ROW Right of Way
RPO Renewable Purchase Obligation
REC Renewable Energy Certificate
SBI State Bank of India
SCADA Supervisory Control and Data Acquisition System
SERCs State Electricity Regulatory Commissions
SLDC State Load Despatch Centre
SRLDC Southern Regional Load Dispatch Centre
STU State Transmission Utility
TAC Technical Advisory Committee
TCC Total Contracted Capacity
T&D Transmission & Distribution
TCs Transformer Centres
TR Transmission Rate
VVNL Visvesvaraya Vidyuth Nigama Limited
WPI Wholesale Price Index
WC Working Capital
x
KARNATAKA ELECTRICITY REGULATORY COMMISSION,
BENGALURU - 560 001
Dated 11th April, 2017
In the matter of:
Application of MESCOM in respect of the Annual Performance Review for
FY16, Revision of Annual Revenue Requirement for FY18 and Revision of Retail
Supply Tariff for FY18, under Multi Year Tariff framework.
Present: Shri M.K.Shankaralinge Gowda Chairman
Shri H.D.Arun Kumar Member
Shri D.B.Manival Raju Member
O R D E R
The Mangalore Electricity Supply Company Ltd., (hereinafter referred to
as MESCOM) is a Distribution Licensee under the provisions of the
Electricity Act, 2003, and has, on 30.11.2016, filed the following
applications for consideration and orders:
a) Review of Annual Performance for the financial year 2015-16
(FY16) and approval of revised ARR thereon.
b) Approval for revision of ARR for the financial year 2017-18
(FY18).
c) Approval for revision of Retail Supply Tariff, for the financial
year 2017-18 (FY18).
xi
In exercise of the powers conferred under Sections 62, 64 and other provisions
of the Electricity Act, 2003, read with the KERC (Terms and Conditions for
Determination of Tariff for Distribution and Retail Sale of Electricity) Regulations
2006, as amended and other enabling Regulations, the Commission has
considered the applications and also the views and objections submitted by
the consumers and other stakeholders. The Commission’s decisions are
brought out in the subsequent Chapters of this Order.
xii
CHAPTER – 1
INTRODUCTION
1.0 Mangalore Electricity Supply Company Ltd.- (MESCOM):
The MESCOM is a Distribution Licensee under Section 14 of the
Electricity Act, 2003 (hereinafter referred to as the ‘Act’). The MESCOM
is responsible for purchase of power, distribution and retail supply of
electricity to its consumers and also providing infrastructure for Open
Access, Wheeling and Banking in its area of operation which includes
four Districts of the State as indicated below:
1. Dakshina
Kannada
2. Udupi
3.
Chikkamagaluru
4. Shivamogga
The MESCOM is a company registered under the Companies Act, 1956,
incorporated on 30th April, 2002. The MESCOM commenced its
operations on 1stJune, 2002.
xiii
Subsequently, the MESCOM was split into two companies namely the
Mangalore Electricity Supply Company Ltd., with headquarters at
Mangaluru covering five districts namely Dakshina Kannada, Udupi,
Shivamogga, Chikkamagaluru and Kodagu and the Chamundeshwari
Electricity Supply Corporation Ltd., (CESC) with headquarters at Mysore
covering four districts namely Mysore, Chamarajanagara, Mandya
and Hassan. This came into effect from 1st April, 2005.
Further, the Madikeri Division (Kodagu District) was transferred from the
MESCOM to the CESC with effect from 1st April, 2006.
At present, the MESCOM’s area of operations are structured as follows:
O&M Zones O&M Circles O&M Divisions
Mangalore
Mangalore Circle
Mangaluru-1
Mangaluru-2
Bantwal
Puttur
Udupi Circle
Udupi
Kundapura
Shivamogga Circle
Shivamogga
Bhadravathi
Sagar
Shikaripura
Chikkamagaluru Circle
Kadur
Chikkamagaluru
The O & M Divisions of the MESCOM are further divided into fifty seven
Sub-Divisions with each of the Sub-Divisions having two to three O & M
xiv
Section Offices. There are 221 O & M accounting / non-accounting
Section Offices.
The Section Offices are the base level offices looking into operation
and maintenance of the distribution system in order to provide reliable
and quality power supply to the MESCOM’s consumers.
1.1 The MESCOM at a glance:
The profile of MESCOM is as indicated below:
Sl.
No.
Particulars (As on 30-09-2016)
Figures
1 Area Sq. Km. 26222
2 Districts No.s 4
3 Taluks No.s 22
4 Population Lakhs 61.55
5 Consumers (As on 30-09-2016) Laksh 21.85
6 Energy sales (FY16) MUs 4309.17
7 Zone Nos 1
8 Distribution Transformer Centers No.s 56426
9 Assets (Net Fixed Assets As on 31-03-2016) Rs. in Cr. 1003.96
10 HT lines (As on 30-09-2016) Ckt. Km 32507
11 LT lines (As on 30-09-2016) Ckt. Km 77473
12 Total employee strength:
A Sanctioned (As on 30-09-2016) Nos. 8741
B Working (As on 30-09-2016) Nos. 5520
13 Rev. Demand in (FY16) Rs. in Cr. 2691.75
14 Rev. Collection in (FY-16) Rs. in Cr. 2497.21
1.2 Number of Consumers, Sales in MU to various categories of
consumers and details of Revenue for FY16 as filed by
MSECOM are as follows:
FY 2015-16
Category No. of Installation Sales in MU Revenue in Rs.Crs.
Domestic 1604864 1336.92 606.10
Commercial 190681 509.95 414.20
Industrial 28584 735.74 508.94
Agriculture 278374 1206.96 508.40
Others 50043 519.60 654.11
Total 2152546 4309.17 2691.75
M/s Mangalore Special Economic Zone Ltd, (MSEZL), as a deemed licensee, is
purchasing power from MESCOM as per the bulk supply tariff determined by the
Commission. M/s MSEZL, has filed separate application for approval of
xv
Revision of ARR and retail supply tariff for its distribution and supply area for
FY18.
The MESCOM has filed its application for approval of Annual Performance
Review for FY16, Revision of Annual Revenue Requirement (ARR) for FY18
and Revision of Revision of Retail Supply Tariff for FY18.
MESCOM’s application, the objections / views of stakeholders thereon and the
Commission’s decisions are discussed in detail in the subsequent Chapters of this
Order.
xvi
CHAPTER – 2
SUMMARY OF FILING & TARIFF DETERMINATION PROCESS
2.0 Background for Current Filing:
The Commission in its Tariff Order dated 30th March, 2016 had
approved the ARR for FY17 to FY19 and Revised Retail Supply Tariff of
MESCOM for FY17 under the MYT principles for the control period of
FY17 to FY19. MESCOM in its present application filed on 30th
November, 2016 has sought approval for the Annual Performance
Review (APR) for FY16 based on the audited accounts, Revision of ARR
for the second year of the fourth control period i.e., FY18 and Revised
Retail Supply Tariff for FY18.
2.1 Preliminary Observations of the Commission:
After preliminary scrutiny of applications, the Commission had
communicated its observations to MESCOM on 21st December, 2016.
The preliminary observations were mainly on the following points:
Capital Expenditure for FY16
Proposed capex for FY18
Estimation of Sales for FY18
Estimation of sales to IP sets consumption for FY18
Distribution Losses
RPO Compliance
Power Purchase
Interest and Finance charges
Issues pertaining to items of Revenue and Expenditure
Compliance to Directives issued by the Commission
MESCOM in response had furnished its replies on 30th December, 2016.
The Commission had issued Rejoinder to the replies vide Commission letter
dated 10th January, 2017, the replies to the Rejoinder were received vide
letter dated 13th January, 2017. The replies furnished by MESCOM are
considered in the respective Chapters of this Order.
xvii
2.2 Public Hearing Process:
As per the Karnataka Electricity Regulatory Commission (Terms and
Conditions for Determination of Tariff for Distribution and Retail Sale of
Electricity) Regulations, 2006, read with the KERC Tariff Regulations
2000, and the KERC (General and Conduct of Proceedings)
Regulations, 2000, the Commission vide its letter dated 04th January,
2017 treated the application of the MESCOM as petition and directed
the MESCOM to publish the summary of ARR and Tariff proposals in the
newspapers calling for objections, if any, from interested persons.
Accordingly, the MESCOM has published the same in the following
newspapers:
Name of the News Paper Language Date of Publication
The Hindu English 07-1-2017
&
08-1-2017
The New Indian Express
Udayavani
Kannada
Vijayakarnataka
Vijayavani
MESCOM’s application on APR for FY16, Revision of ARR for FY18 and
revision of retail supply tariff for FY18 were also hosted on the web sites of
MESCOM and the Commission for the ready reference and information of the
general public.
In response to the application of MESCOM, the Commission has received
Two hundred and thirty nine statements / letters of objections. MESCOM has
furnished its replies to all these objections. The Commission has held a
Public Hearing on 27th February, 2017 at Mangaluru. The details of the
written / oral submissions made by various stakeholders and the response
from MESCOM thereon have been discussed in Chapter - 3 / Appendix to
this Order.
2.3 Consultation with the Advisory Committee of the Commission: The Commission has also discussed the proposals of the KPTCL and all
ESCOMs in the State Advisory Committee meeting held on 8th March, 2017.
During the meeting the following important issues were also discussed:
Performance of KPTCL / ESCOMs during FY16
xviii
Major items of expenditure of KPTCL / ESCOMs
Members of the Committee have offered valuable suggestions on the
proposals. The Commission has taken note of these suggestions while
issuing the Order.
xix
CHAPTER – 3
PUBLIC CONSULTATION - SUGGESTIONS / OBJECTIONS & REPLIES
3.1 In pursuance of the provisions of Section 64 of the Electricity Act, 2003,
the Commission has undertaken the process of public consultation, to
obtain suggestions/views/objections from the interested stake-holders,
on the application filed by the MESCOM, for Annual Performance
Review for FY16, approval of ERC and Revised ARR for FY18 and
approval of revised retail supply tariff for FY18, under the MYT
Regulations. In the written submissions as well as during the public
hearing, the Stake-holders and the public have raised several
objections/ suggestions, on the Tariff Application.
3.2 The names of the persons who have filed written objections and made
oral submissions are given below:
List of persons who have filed written objections:
Sl.No Application No. Name & Address of Objectors
1 AE-01 Sri. Prem Chand, Chief Electrical
Traction Engineer, South Western
Railway.
2 AE-02 Smt.Shroti Bhatia, VP (Regulatory
Affairs & Communication), Indian
Energy Exchange.
3 MB -01 Sri.Anantha Padmanabha, Shimoga.
4 MB -02 Sri Charles Pereira, “Puneeth Sadan”,
Shirwad, Karwar (N.K.Dist)
5 MB-03 to MB-
176
Sri. Ravindra Gujra Shetty, Secretary,
Udupi District Krushika Sangha and
others.
6 MA-01 Sri Suryanarayana , Vice- President
Mangalore SEZ Limited.
7 MA-02 to MA-
13
Sri. Ramakrishna Sharma and others,
Udupi District Krushikara Sangha
8 MA-14 to MA-
16
Sri.K.Narasimha Murthy Naik & Others
Thirthathalli.
9 MA-17 Sri. Pascal Dias, Koppa
10 MA-18 K.N.Ventakagiri Rao, Secretary,
Consumer Forum, Sagar
11 MA-19 Sri.D.Subrahmanya Bhat, Bantval
Taluk, Dakshina Kannada District
12 MA-20 to 24 Sri.Vishwanath Shetty &Others ,Udupi
District.
xx
13 MA-25 Sri. Bujanga V. Poojari, Udupi District.
14 MA-26 Sri. Balasubramanya Bhat.J,
Belathangadi Taluk.
15 MA-27 Sri Yagnanarayana M.N., General
Secretary, Laghu Udyog Bharati -
Karnataka
16 MA-28 Sri. Prem Chand, Chief Electrical
Traction Engineer, South Western
Railway.
17 MA-29 Sri. Anwar Basha, Sagar.
18 MA-30 Sri. Manudev, Thirthahalli.
19 MA-31 Sri. Nithraram Bhat, Thirthahalli.
20 MA-32 Sri.B. Praveen, Hon General Secretary,
KASSIA.
21 MA-33 Sri. Rajendra Suvarna, The Karnataka
Coastal Ice Plant and Cold Storage
Owners Association.
22 MA-34 Sri. Praveen Kumar Kalbhavi,
Secretary, KCCI
23 MA-35 to MA-
49
Sri. Swathy Bhagavath& Others
Chitpady, Udupi
24 MA-50 to MA-
61
Sri. Ravindra Shetty & Others,
Kundapur Taluk.
3.3 The gist of the objections, replies by MESCOM and the Commission’s
views are given in Appendix-1 of this order.
3.4 To elicit the views of the stakeholders and interested persons, the
Commission held a public hearing at Mangaluru on 27.02.2017. In the
public hearing, the following persons made oral submissions before the
Commission. A List of the persons who made oral submissions during the
Public Hearing on 27.02.2017 is as under:
Sl.
No.
Names & Addresses of Objectors
1 Sri. B.V. Poojari, President, Bharatiya Kissan Sangh, Udupi
District.
2 Sri. Satyanarayana Udupa, General Secretary, Bharatiya
Kissan Sangh, Udupi District.
3 Sri. Govinda Raju Bhat, Secretary, Bharatiya Kissan Sangh,
Karkala Taluk.
4 Sri. Shanthappa Gowda, President Bharatiya Kissan Sangh,
Dakshina Kannada.
5 Sri. Udaya Kumar, General Secretary, Karnataka Cold
Storage Owner’s Association.
6 Sri. Anil Savoor, Karnataka Planters Association,
Chickkamagalur.
7 Sri. Jeevan Saldana, President Kanara Chamber of
xxi
Commerce (KCCI) Mangalore and Kanara Small Industries
Association, Baikampady.
8 Sri K. Parameswarappa, Principal Secretary, Bharatiya
Kissan Sanga, Karnataka South Region.
9 Sri. Shoban Babu, Secretary, Vidyuth Balakedara Sangha.
10 Sri. Ramakrishna Sharma, Udupi District Krushi Sangha.
11 Sri. Srinivass Bhat, Secretary, Udupi District Krushi Sangha.
12 Sri.K.N.Venkatagiri, BalakedaraVidke Sangha.
13 Sri.Balasubramanya Bhat, Secretary, Savayava Krushi
Parivar.
14 Sri. V. Suryanarayana, COO, MSEZ.
15 Sri.A.G. Pai, JBM Petro Chemicals, MSEZ.
16 Sri. Narasimha Naik, Pump set Balakedara Sangha,
Thirthahalli.
17 Sri. Hanumantha Kamath, President, Nagareekara
Hitarakshana Samithi, Mangaluru.
18 Sri. D Sagayamani Raj, Divisional Electrical Engineer, South
Western Railways.
19 Sri. Eshwar Raj, Photo Journalist, Mangaluru.
3.5 The gist of the submissions made during the Public Hearing held on
27.02.2017.
xxii
1 It is not proper to increase the tariff every year, instead MESCOM should improve its services to the
consumers and reduce the Tariff.
MESCOM
has replied
orally to the
points
raised by
the public.
MESCOM
has also
assured the
Commission
that it will
look into
the
operational
issues
raised by
the
participants
and
address
them
suitably.
2 The revenue gap of Rs. 700/- crore stated by MESCOM can be managed if the dues of Rs. 1200/- crore
to MESCOM is collected.
3 Pension & Gratuity amount of Rs. 239/- crore should not be allowed by the Commission, as the same will
burden the consumers.
4 Reasons for erosion of share capital of Rs. 2000/- crore as stated by the MESCOM are not known.
5 MESCOM’s capex has not reached 60% to 70% every year and therefore, capex only to the extent of
capex achieved needs to be considered while fixing the tariff to the consumers.
6 MESCOM has distributed around 29 lakhs of LED bulbs, in which 60% of them are not working now. But,
MESCOM is not responding properly to the consumers’ request for replacement. MESCOM should also
take up awareness regarding availability of LED bulbs.
7 During off season, Ice manufacturing plants under LT are operated for maintenance purpose only.
Therefore, the condition mentioned in the Tariff Order to claim off-season concession should be
removed. This facility should also be extended to HT installations.
8 LT4 C(i) &(ii) were earlier categorized under LT4(a), at least tariff at current rates for these categories
should be retained.
9 Small scale industries are not faring better, therefore, tariff concession should be extended as in Kerala
state. Also, Tamilnadu has not sought any tariff hike for FY16-17.
10 The energy meters fixed to IP sets have become old; MESCOM should replace them immediately. LT
lines have become old / deteriorated. Because of this, energy losses are more and public accidents are
caused. Hence, MESCOM should replace these lines.
11 MESCOM is not supplying 3 phase 7 hours power and within this 7 hour also, power interruptions are
caused due to line repair taken up by the field staff.
12 Since, 50% of the IP sets are not working in the field, IP consumption submitted by MESCOM should not
be considered.
13 Consumer interaction meetings have not been conducted for the last 1 ½ years.
14 MESCOM has not displayed the SoP parameters in its O&M offices but it is claiming that the details of
SoP have been displayed.
15 MESCOM’s calculation of specific consumption of IP-sets as 4,448 units/installation/annum is not
correct as the actual specific consumption is only about 2500 units/installation/annum. Hence, the
Commission should take a tough decision on this.
16 All IP set installations should be provided with energy meters.
17 MESCOM has spent only Rs. 46 Crore as against Rs. 70 crore for line improvement and now for the
current year it has sought Rs. 300 crore, which is not justifiable.
18 Hospitals & Educational Institutions have been categorized under HT2c(i) and are extended
concessional tariff which is not correct as they are not passing on the benefits to their customers.
Hence, the same should be immediately stopped.
19 In future hold Public Hearing on Tariff proposals of MESCOM in Shivamogga for enabling larger
participation of consumer from that part.
20 MESCOM should be directed to introduce/provide a “Mobile app“ for consumer complaints and their
proper redressal.
21 MESCOM is not allowing HT commercial consumers to provide sub-meters to the tenants, resulting in
excess collection by the consumers from their tenants, therefore sub-meters should be allowed for these
installations.
22 As the Railways have not increased the charges for the passengers for a long period, the proposed
Tariff hike by MESCOM will increase the cost of train travelling. Railways use supply for its domestic
consumers on bulk supply, hence, concessional tariff should be extended to such use.
23 Meter readers are not reporting not-recording meters resulting in loss of revenue to MESCOM on
account of average billing.
24 MESCOM is not conducting DTC-wise energy audit, hence, in the absence of energy audit, Tariff hike is
not justified.
25 Recent development suggests that excess supply of power is available in the country and hence the
cost of procurement of power will come down, Tariff should be reduced like in Gujarat.
Commission’s Views: The Commission has considered the points relating to the tariff raised by the public / stakeholders and the
replies given by the MESCOM, while passing this Tariff Order.
xxiii
CHAPTER – 4
ANNUAL PERFORMANCE REVIEW FOR FY16
4.0 MESCOM’s Application for APR for FY16:
MESCOM has filed its application for Annual Performance Review
(APR) for FY16 and revision of Annual Revenue Requirement (ARR)
along with revision of retail supply tariff for FY18 on 30th November,
2016. MESCOM has sought the Annual Performance Review (APR) for
FY16 and approval of a revised ARR thereon based on the Audited
Accounts of FY16.
The Commission in its letter dated 21st December, 2016, had
communicated its preliminary observations on the application of
MESCOM. In its letter dated 30th December, 2016, MESCOM has
furnished its replies to the preliminary observations of the Commission.
The Commission had issued rejoinders on the replies furnished by the
MESCOM vide its letter date 10th January, 2017 and MESCOM has
furnished replies to the rejoinders in its letter dated 13th January, 2017.
The Commission in its Multi Year Tariff (MYT) Order dated 6th May, 2013
had approved MESCOM’s Annual Revenue Requirement (ARR) for
FY14 – FY16. Further, in its Tariff Order dated 2nd March, 2015, the
Commission had approved the APR for FY14 and had revised the ARR
along with Retail Supply Tariff for FY16.
The revised Annual Revenue Requirement (ARR) of MESCOM for FY16,
based on the audited accounts, is discussed in this Chapter.
4.1 MESCOM’s Submission:
MESCOM has submitted its proposals for revision of ARR for FY16 based
on the Audited Accounts as follows:
xxiv
TABLE – 4.1
ARR for FY16 – MESCOM’s Submission Amount in Rs. Crores
Sl.
No Particulars As Filed
1 Energy at Gen Bus in MU 5027.72
2 Energy at Interface in MU 4869.12
3 Distribution Losses in % 11.50
Sales in MU
4 Sales to other than IP & BJ/KJ 3097.96
5 Sales to BJ/KJ 13.78
6 Sales to IP & BJ/KJ 1197.43
Total Sales 4309.17
Revenue
7
Revenue from other than IP & BJ/KJ and
Misc. Charges 1852.20
8 RE Subsidy to BJ/KJ 9.25
9 RE Subsidy to IP 501.77
Total Revenue 2363.22
Expenditure
10 Power Purchase Cost 2010.15
11 Transmission charges of KPTCL 218.70
12 SLDC Charges 1.71
Power Purchase Cost including cost of
transmission 2230.56
13 Employee Cost 249.24
14 Repairs & Maintenance 33.04
15 Admin. & General Expenses 67.41
Total O&M Expenses 349.69
16 Depreciation 63.74
Interest & Finance charges
17 Interest on Loans 62.68
18 Interest on Working capital 37.74
19 Interest on belated payment of PP Cost 0.29
20 Interest on consumer deposits 35.55
21 Other Interest & Finance charges 1.21
22 Less: interest & other expenses capitalised 1.30
Total Interest & Finance charges 136.17
23 Other Debits 5.03
24 Return on Equity 76.87
25 Provision for taxation 2.31
26
Funds towards Consumer
Relations/Consumer Education 0.11
27 Other Income 47.74
Net ARR 2816.74
xxv
Considering the revenue of Rs.2363.22 Crores against a net ARR of
Rs.2816.74 Crores, MESCOM has reported a gap in revenue of Rs.453.52
Crores for FY16.
4.2 MESCOM’s Financial Performance as per the Audited Accounts for
FY16:
An overview of the financial performance of MESCOM for FY16 as per
its Audited Accounts is given below:
TABLE – 4.2
Financial Performance of MESCOM for FY16
Amount in Rs. Crores
Sl.
No. Particulars FY16
Receipts
1 Revenue from Tariff and misc. charges 2201.30
2 Tariff Subsidy 510.43
Total Revenue 2711.73
Expenditure
3 Power Purchase Cost 2010.15
4 Transmission charges of KPTCL 218.70
5 SLDC Charges 1.71
Power Purchase Cost including cost of
transmission 2230.56
6 O&M Expenses 350.82
7 Depreciation 64.08
Interest & Finance charges
8 Interest on Loans 51.37
9 Interest on Working capital 23.50
10 Interest on belated payment of power purchase 0.29
11 Interest on consumer deposits 35.55
12 Other Interest & Finance charges 1.20
13 Less: Interest and other expenses capitalized 2.32
Total Interest & Finance charges 109.59
14 Other Debits 4.69
15 Net Prior Period Debit/Credit (8.67)
16 Exceptional Items (2.70)
17 Other income 47.75
18 Income tax 0.00
Total Expenditure 2700.62
As per the Audited Accounts, MESCOM has earned a profit of Rs.11.11
Crores for FY16. The profits / losses reported by MESCOM in its audited
accounts in the previous years are as follows:
xxvi
TABLE – 4.3
MESCOM’s Accumulated Profit / Loss
Particulars
Amount in
Rs.Crs
Accumulated profits as at the end of FY10 50.73
Profit earned in FY11 1.70
Profit earned in FY12 6.41
Profit earned FY13 12.60
Profits earned in FY14 0.20
Profits earned in FY15 13.93
Profits earned in FY16 11.11
Accumulated losses as at the end of FY16 96.68
As seen from the above table, the accumulated profits are Rs.96.68
Crores.
APR Exercise by the Commission:
The Annual Performance Review for FY16 has been taken up duly
considering the actual revenue and expenditure booked as per the
Audited Accounts against the revenue and expenditure approved by
the Commission in its Tariff Order dated 2nd March, 2015. The item-wise
review of expenditure and the decisions of the Commission thereon
are as discussed in the following paragraphs:
4.2.1 Sales for FY16:
a) Sales - Other than IP sets:
I. Annual Performance Review for FY-16
The Commission in its Tariff Order 2015 dated 02.03.2015, had approved
total sales to various consumer categories at 4431.33 MU as against the
MESCOM’s proposal of 4433.40 MU, excluding the sales of 80.84 MU to
xxvii
MSEZ and 11.33 MU to KPCL. The actual sales of the MESCOM as per
the current APR filing [D-2 FORMAT] is 4226.67 MU indicating a short fall
in sales to an extent of 204.66 MU, as compared to the approved sales.
The reduction in sales is 35.15 MU in LT-categories and 169.52 MU in HT-
categories. It is noted that, as against approved sales [excluding KPCL
sales and supply to MSEZ] of 3227.44 MU to the categories other than
BJ/KJ and IP sets, the actual sales achieved by the MESCOM is 3015.46
MU, resulting in the reduction of sales to these categories by 211.98 MU.
Further, the MESCOM has sold 1211.21 MU to BJ/KJ and IP categories
against approved sales of 1203.89 MU resulting in increased sales to
these categories by 7.32 MU.
The category-wise sales approved by Commission in its Tariff Order
2015, and the actuals for the FY 16 are indicated in the table below:
TABLE-4.4
Approved and Actual Sales for FY16
Units in MU
Category Approved Actuals** Actuals -
Approved
LT-2a* 1341.96 1292.56 -49.40
LT-2b 12.74 13.68 0.94
LT-3 324.48 329.87 5.39
LT-4b 0.98 0.92 -0.06
LT-4c 7.17 6.40 -0.77
LT-5 131.41 135.47 4.06
LT-6 115.05 111.93 -3.12
LT-6 64.06 63.97 -0.09
LT-7 19.02 19.63 0.61
HT-1 87.99 85.01 -2.98
HT-2a 782.85 586.43 -196.42
HT-2b 152.12 180.07 27.95
HT-2c 126.97 155.05 28.08
HT-3a & b 24.98 8.60 -16.38
HT-4 13.78 16.90 3.12
HT-5 21.86 8.98 -12.88
Sub total 3227.44 3015.46 -211.98
BJ/KJ 12.63 13.78 1.15
IP 1191.26 1197.43 6.17
Sub total 1203.89 1211.21 7.32
Grand total** 4431.33 4226.67 -204.66 *Including BJ/KJ installations consuming more than 18 units/month
**Excludes sale of 9.59 MU to KPCL and 13.88 MU to MSEZ as filed by MESCOM.
The Commission has noted that the major categories contributing to
the reduction in sales with respect to the estimates are HT-2a Industries
(196.42 MU) and LT2a (49.40 MU). The MESCOM, while analyzing the
reasons for reduction in HT -2a sales, has stated that out of the total
xxviii
reduction of 196.44 MU in HT-2a category, twelve EHT consumers had
consumed energy losses by 125.67 MU in the FY16 as compared with
the energy consumption in the FY15.
While taking note of the analysis carried out by the MESCOM regarding
reduction in sales, to further validate the sales, the Commission in its
preliminary observations had requested MESCOM to furnish certain
information. The information directed and the replies furnished are
discussed below:
a) MESCOM was directed to furnish the data in respect of sales to
HT2(a) and HT2(b) categories along with the consumption from
open access / wheeling for the period 2011-12 to 2015-16 in a
specified format.
MESCOM in its replies has furnished the details from 2012-13 to 2015-
16, without furnishing the category-wise break up for HT-2a and HT-
2b. Subsequently, in its replies to the Rejoinder, MESCOM has
furnished the details, which has been analyzed by the Commission
while arriving at sales for these categories for FY18.
b) To estimate the impact of shifting of installations from HT2a, HT2b
and HT-4 to HT-2c, MESCOM was directed to furnish the number of
installations shifted from these categories and also furnish the
corresponding sales figures for FY14, FY15 and FY16.
MESCOM has furnished the details, which has been analyzed by the
Commission while arriving at sales for these categories for FY18.
b) Sales to IP sets
In its Tariff Order dated 2nd March, 2015, the Commission had approved
a specific consumption of IP-sets as 4,597 units/installation/annum for
FY16, whereas, as per the data of IP-set consumption reported by the
MESCOM in its Tariff filing for APR of FY16, the specific consumption
works out to 4,447 units /installation/annum, which indicates a
decrease in the specific consumption by 150 units/installation/annum
when compared to the approved figure. The total IP-set consumption
reported by the MESCOM for the FY16 was 1,197.43 MU as against
xxix
1,191.26 MU approved by the Commission which indicates that overall
sales have increased by 6.17 MU compared to the sales quantum
approved.
Further, the Commission had approved 2,63,139 as number of IP-set
installations for FY16; whereas the actual number of installations
serviced as reported by the MESCOM in its Tariff filing is 2,78,171. This
indicates an increase in number of installations by 15,032 and this
corresponds to around 6 per cent increase in the number of
installations as compared to number of installations approved for the
FY16. Also, it is noted that the increase in number of installations has
resulted in increase in sales by 6.17 MU.
In the Tariff Order dated 2nd March, 2015, the MESCOM was directed to
furnish to the Commission, every month, the IP-set consumption by
considering the actual meter readings of individual IP-set installations
due to the fact that substantial progress has been reported in metering
of IP-sets and the MESCOM was also instructed do away with the
methodology for assessing the IP-set consumption as per the meter
readings of sample DTCs feeding predominantly IP-set loads,. However,
the MESCOM in its Tariff filing has not submitted the IP-set consumption
based on the meter reading data of individual IP-set installations, but, it
has submitted the IP-consumption based on the meter readings of
sample DTCs supplying power predominantly to IP-set loads.
I. In view of this, the Commission, in its preliminary observations on
the MESCOM’s Tariff application, had directed it to justify its
claims of IP-set consumption of 1,197.43 MU reported for the
FY16 with necessary data in support of the same.
II. The MESCOM, in its reply to the preliminary observations, has
submitted the consolidated month-wise data in respect of IP-set
consumption for FY16 along with the details of assessment based
on the meter readings of sample DTCs feeding predominantly to
IP-set loads. However, the MESCOM has not submitted the IP-set
xxx
consumption based on the meter reading data of individual IP-
set installations despite reporting that substantial IP-set
installations are provided with meters. Also, it has not furnished
the reasons for not considering the meter readings of individual
IP-set installations to arrive at an overall consumption of 1,197.43
MU reported for the FY16.
III. Further, the MESCOM, in its replies dated 13.12.2016 to the
rejoinder of the Commission, has stated that the meters provided
to IP-set installations are not functioning as most of the them
have been un-authorizedly removed by the farmers opposing
the installation of meters, resulting in non-availability of
consumption data based on the meter reading of individual IP-
set installations. It is also stated that the data regarding number
of meters existing in the IP-set installations is proposed to be
collected along with the work of enumeration of IP-sets. It is
further stated that it will try to convince the farmers to obtain the
meter readings and then compute the IP-set consumption
based on the actual meter readings of individual installations
after completion of enumeration of IP sets.
Therefore, citing the non-availability of metered consumption
data of individual IP-set consumers, the MESCOM has requested
the Commission to allow assessing the IP-set consumption based
on the readings of the sample meters provided to DTCs feeding
predominantly to IP-sets, as per the methodology being followed
hitherto. Accordingly, MESCOM has requested the Commission
to approve the sales of 1,197.43 MU as reported in the format D2
of its Tariff filing, for APR of FY16. The Commission has therefore
accepted the MESCOM’s request to consider the consumption
recorded as per the DTC meter reading data.
IV. The Commission notes that the specific consumption of IP-sets
has decreased by 150 units/installation/annum as compared to
the quantity approved by the Commission for the FY16.
xxxi
However, the sales have increased marginally when compared
to the quantity approved by the Commission, which can be
attributed to the fact that, more number of installations has
been serviced by the MESCOM than the approved quantity in
FY16. Further, it is also noted that unlike in other ESCOMs, NJY
scheme (for bifurcating the 11 kV feeders as separate rural and
agricultural feeders) is not implemented in the jurisdiction of the
MESCOM in order to compute the IP-set consumption on the
basis of metered data of segregated agricultural feeders at the
substations.
However, the MESCOM is directed that in future it shall consider
only the actual meter readings of individual IP-set installations
duly ascertaining the correct number of working meters in the
field, as discussed above and report the consumption of IP-sets
on the basis of meter reading data from such IP-set installations
every month, to the Commission, as this would enable accurate
measurement of IP-set consumption as compared to assessing
the consumption based on the meter readings of sample DTCs
feeding predominant IP loads.
Hence, in the absence of 100 per cent meter reading data of
individual IP-set installations, but considering the figures furnished
being reasonable the Commission decides to approve the sales
to IP-sets for the APR of FY16, as 1197.43 MU as reported by the
MESCOM in its Tariff filing.
In the light of the above discussion, the Commission approves the total
sales of 4226.67 MU for FY16 and the category-wise sales as indicated
in the table below. In addition to the above, Sales to KPCL at 9.59 MU
and to MSEZ at interface point at 13.88 MU are also approved.
TABLE – 4.5
Approved Sales for FY16
Figures in MU
xxxii
Category Approved Actuals
LT-2a* 1341.96 1292.56
LT-2b 12.74 13.68
LT-3 324.48 329.87
LT-4b 0.98 0.92
LT-4c 7.17 6.40
LT-5 131.41 135.47
LT-6 115.05 111.93
LT-6 64.06 63.97
LT-7 19.02 19.63
HT-1 87.99 85.01
HT-2a 782.85 586.43
HT-2b 152.12 180.07
HT-2c 126.97 155.05
HT-3a & b 24.98 8.60
HT-4 13.78 16.90
HT-5 21.86 8.98
Sub total 3227.44 3015.46
BJ/KJ 12.63 13.78
IP 1191.26 1197.43
Sub total 1203.89 1211.21
Grand total** 4431.33 4226.67
* Including BJ/KJ installations consuming more than 18 units/month
**Excludes sale of 9.59 MU to KPCL, 13.88 MU to SEZ at interface point and
wheeled energy of 59.04 MU.
4.2.2 Distribution Losses for FY16:
MESCOM’s Submission:
The Commission in its Tariff Order dated 2nd March, 2015 had
approved distribution losses for FY16 as shown in the table below:
Range FY16
Upper limit 11.50%
Average 11.25%
Lower Limit 11.00%
MESCOM, in its annual accounts, has reported distribution losses
of 11.50% for FY16.
1 Energy at Interface Points in MU 4869.12
2 Total sales in MU including wheeled
energy 4309.17
3 Distribution losses as a percentage of
input energy at IF points 11.50%
Commission’s analysis and decisions:
The distribution loss of 11.50% reported by MESCOM exceeds the
targeted losses fixed by the Commission for FY16 by 0.25 percentage
points. However, the actual overall distribution loss of 11.50% is within
xxxiii
the approved range of losses for FY16. Hence no penalty/incentive
has been factored in the APR for FY16.
4.2.3 Power Purchase for FY16:
MESCOM Submission:
The Commission in its Tariff order dated 2nd March,2015, had approved
source- wise quantum and cost of power purchase for FY16. MESCOM,
in its application has submitted the details of actual power purchase
for FY16 for the purpose of reviewing its Annual Performance. The
details of power purchase are as under:
TABLE-4.6
MESCOM’s POWER PURCHASE FOR FY16
* Source : D1 format
Commission’s analysis and decisions:
Source of Generation
Actuals for FY16 Approved for FY16 Difference-between Actuals
and Approved-for FY16
% increase
(+)/decrease (-)
over an approved
figures
Energy
in MUs
Cost in
Rs Cr.
Rate in
Rs per
Unit
Energy
in MUs
Cost in
Rs Cr.
Rate in
Rs per
Unit
Energy
in MUs
Cost in
Rs Cr.
Rate in Rs
per Unit Energy Cost
KPCL Hydel
Stations 541.1 78.69 1.45 869.33 59.15 0.68 -328.23 19.54 0.77 -37.76 33.03
KPCL-
Thermal
Stations
1734.68 758.27 4.37 2064.76 800.77 3.88 -330.08 -42.50 0.49 -15.99 -5.31
CGS 1165.49 387.70 3.33 1009.42 327.48 3.24 156.07 60.22 0.08 15.46 18.39
Major IPPs 381.47 159.83 4.19 373.15 154.2 4.13 8.32 5.63 0.06 2.23 3.65
IPPs -Minor
(NCE
Projects)
554.24 208.82 3.77 842.73 311.63 3.70 -288.49 -102.81 0.07 -34.23 -32.99
Other States
Projects 0.75 4.79 63.87 15.54 2.80 1.80 -14.79 1.99 62.06 -95.17 71.07
Short
/Medium
term
520.30 273.98 5.27 112.65 59.14 5.25 407.63 214.84 0.02 361.86 363.27
UI Charges 44.42 13.44 3.03
Transmission
Charges
(KPTCL &
PGCIL)
290.51
269.14
21.37
7.94
SLDC
Charges
(POSOOC&
SLDC)
1.98
2.77
-0.79
-28.51
Energy
Balancing 36.15 32.30 8.93
Others
Charges 49.14 20.25 4.12
TOTAL 5027.72 2230.56 4.44 5287.58 1987.08 3.76 -259.86 243.43 0.68 4.91 12.25
xxxiv
1. The actual power purchase for FY16 as filed by MESCOM for
approval of Annual Performance Review is 5027.72MU amounting
to Rs 2230.56 Crores, as against the approved quantum of
5287.58MU amounting to Rs1987.08 Crores. There is reduction in
quantum of power purchase to an extent of 259.86 MU and
increase in cost by Rs. 243.43 Crores. This has been reflected in
reduced sales of 204.66 MU in FY16.
2. As against the approved quantum of 5287.58MU the actual power
purchased by MESCOM is 5027.72MU for FY16, which is about 4.91%
less than the approved quantum.
3. On an analysis of the source-wise approved and actual power
purchases, the following deviations in the quantum of energy and
its cost of purchase are observed:
i. There is a shortfall in supply from sources of power like KPCL
Hydel, KPCL Thermal and IPP Minor to an extent of:
TABLE- 4.7
Short fall in Availability of Power in FY16
**Differenc
e
between
Source-
wise
approved and Actual Energy Purchase
Consequently, after partially making good the shortfall through
additional procurement from CGS & major IPP sources, MESCOM
has purchased short-term power to a tune of 564.70 MU at a cost of
Rs.287.42 Crores. MESCOM has incurred an additional cost
Rs.243.43 Crores towards short-term/medium-term power purchase,
resulting in an increase in per unit cost by 68 Paise.
ii. The change in the source-wise mix of supply, reconciliation of
energy and its cost among ESCOMs have resulted in increased
Source of
Generation
Energy Difference
between actual and
approved in MU**
Cost Difference
between actual and
approved in Rs Crs.**
KPCL Hydel -328.23 19.54
KPCL Thermal -330.08 -42.50
IPP Minor -288.49 -102.81
xxxv
average power purchase cost of MESCOM at the rate of Rs.4.44
per KWh as against the approved rate of Rs.3.76 per KWh.
5. In order to ensure proper accounting of energy drawn by the
ESCOMs, the MESCOM is directed to reconcile the inter-ESCOM
energy exchanges and its costs every month and it shall
collect/pay any difference amounts out of the tariff subsidy
received from Government of Karnataka.
6. The Commission notes that, the SLDC has not implemented the intra-
state ABT. As per the directions issued by the Government of
Karnataka vide its letter dated 28th January, 2016, intra state ABT
has to be implemented immediately by the KPTCL and ESCOMs.
The Commission therefore directs the SLDC, KPCL and the MESCOM
to take appropriate action immediately to implement intra-state
ABT and to host the details thereof, on their respective websites.
7. On an analysis of Power Purchase cost for FY16 in respect of KPCL
Hydel Stations it is observed that the per unit rates allowed by
ESCOMs, significantly vary among ESCOMs as shown below:
BESCOM Rs 0.90 per unit.
MESCOM Rs 1.45 per unit.
CESC Rs 1.11 per unit.
HESCOM Rs 0.91 per unit.
GESCOM Rs 0.97 per unit.
t is seen from the above that, MESCOM has allowed a rate of Rs.1.45
per unit for the power purchased from KPCL Hydro stations whereas for
the same source, BESCOM has paid at the rate of RS. 0.90 per unit. This
indicates that while making payment for the power purchase bills,
adequate checks have not been exercised by MESCOM.
Commission also notes that the ESCOMs had paid the following rates to
the KPCL Hydro stations in FY15. below:
xxxvi
BESCOM Rs 0.57 per unit.
MESCOM Rs 0.56 per unit.
CESC Rs 0.58 per unit.
HESCOM Rs 0.56 per unit.
GESCOM Rs 0.59 per unit.
It is seen from the above that there is no significant variation in the
rates among the ESCOMs, as compared with the rates paid in FY16.
There should be justifiable reasons for the variations, which are not
available in the tariff applications.
In the light of this, MESCOM is directed to verify the correctness of the
payment made by it at the rate of Rs.1.45 per unit towards KPCL Hydel
power. The excess payment if any, may be recovered from KPCL under
intimation to the Commission.
Thus, the Commission decides to approve the power purchases of
5027.72 MU at a cost of Rs 2230.56 Crores for the purpose of Annual
Performance Review for FY16.
4.2.4 Renewable Purchase Obligation (RPO) compliance by MESCOM for
FY16:
1. MESCOM in its petition has filed the details of RPO compliance for solar
and non-solar RPO for 2015-16 as indicated below:
TABLE-4.8
RPO Compliance for FY16-MESCOM’s Submission
Energy Purchased-MU 5027.71
Non-Solar energy required to be procured at
10% target-MU 502.77
Non-Solar energy actually procured excluding
energy sold under green tariff -MU 693.93
Non-Solar compliance as percentage of energy
purchased 13.80%
xxxvii
Solar energy required to be procured at 0.25%
target-MU 12.57
Solar energy actually procured -MU 42.15
Solar compliance as percentage of energy
purchased 0.84%
For validating the RPO compliance, the Commission had directed
MESCOM to furnish the data as per a specified format, duly reconciling
the data with the audited accounts.
xxxviii
MESCOM in its replies has furnished the following data:
TABLE-4.9
Non-solar RPO for FY16 No. Particulars Quantum in
MU
Cost- Rs. Crs.
1 Total Power Purchase quantum from
all sources
5027.72 2230.56
2 Non–solar Renewable energy
purchased under PPA route at
Generic tariff including Non-solar RE
purchased from KPCL
522.13 182.37
3 Non –solar Short-Term purchase from
RE sources, excluding sec-11
purchase
90.20 45.82
4 Non –solar Short-Term purchase from
RE sources under sec-11
94.29 47.90
5 Non-solar RE purchased at APPC 0 0
6 Non-solar RE pertaining to green
energy sold to consumers under
green tariff
12.69 0.63
7 Non-solar RE purchased from other
ESCOMs
0 0
8 Non-solar RE sold to other ESCOMs 0 0
9 Non-solar RE purchased from any
other source like banked energy
purchased at 85% of Generic tariff
0 0
10 Total Non-Solar RE Energy Purchased
[No 2+ No.3+No.4+No.5 +No.7+No.9]
706.62 276.09
11 Non-Solar RE accounted for the
purpose of RPO
[ No.10- No.5-No.6-No.8]
693.93 275.46
12 Non-solar RPO complied in %
[No11/No1]*100
13.80
TABLE-4.10 Solar RPO for FY16
No. Particulars Quantum in
MU
Cost- Rs. Crs.
1 Total Power Purchase quantum from all
sources
5027.72 2230.56
2 Solar energy purchased under PPA route
at Generic tariff including solar energy
purchased from KPCL
32.11 26.45
3 Solar energy purchased under Short-Term,
excluding sec-11 purchase
0 0
4 Solar Short-Term purchase from RE under
sec-11
0 0
5 Solar energy purchased under APPC 0 0
6 Solar energy pertaining to green energy
sold to consumers under green tariff
0 0
xxxix
7 Solar energy purchased from other
ESCOMs
0 0
8 Solar energy sold to other ESCOMs 0 0
xl
9 Solar energy purchased from NTPC (or
others) as bundled power
10.04 10.65
10 Solar energy purchased from any other
source like banked energy purchased at
85% of Generic tariff
0 0
11 Total Solar Energy Purchased
[No2+ No.3+No.4+No.5+No.7+No.9+No.10]
42.15 37.10
12 Solar energy accounted for the purpose
of RPO
[ No.11- No.5-No.6-No.8]
42.15 37.10
13 Solar RPO complied in %
[No12/No.1]*100
0.84
The Commission has perused the data submitted by MESCOM. The
Commission has approved total input energy of 5027.72 MU for FY16 in
its APR. Thus, MESCOM was required to purchase 502.77 MU of Non-
Solar energy and 12.57 MU of solar energy to meet its RPO targets.
Based on the information furnished, the Commission notes that
MESCOM has achieved 13.80% of Non-Solar and 0.84% of solar RPO
targets for FY16. Thus, MESCOM has over-achieved its non-solar and
solar RPO targets by 3.80 percentage points and 0.59 percentage
points respectively.
4.2.5 Operation and Maintenance Expenses:
MESCOM’s Submission:
In its application, MESCOM, as per its audited accounts has
sought approval of O&M expenditure of Rs.349.69 Crores for
FY16. The break-up of O&M expenses are as follows:
TABLE – 4.11
O & M Expenses – MESCOM’s submission
Amount in Rs. Crores
Particulars FY16
Employee cost 249.24
Administrative & General Expenses 67.41
Repairs and Maintenance 33.04
Total O & M Expenses 349.69
xli
Commission’s analysis and decisions:
The Commission in its Tariff Order dated 2nd March, 2015 had approved
O&M expenses for FY16 as detailed below:
TABLE – 4.12
Approved O&M Expenses as per Tariff Order dated 02.03.2015
Particulars FY16
No. of installations as per actuals as per Audited Accts 2156749
Weighted Inflation Index 6.69%
CGI based on 3 Year CAGR 3.86%
Actual O&M expenses for FY13 - in Rs. Crores. 260.06
Total approved O&M Expenses for FY16 – in Rs. Crores. 344.83
The Commission in its preliminary observations, on the application of
MESCOM, had sought the details of the certain expenses booked
under A & G expenses during FY16 and noted the replies furnished.
The Commission notes that the actual O&M expenses reported by
MESCOM are more than the approved O&M expenses by Rs.4.86
Crores. The Commission, in accordance with the methodology
adopted while approving the ARR for FY14-16 and subsequent APRs,
proceeds with the determination of normative O&M expenses based
on the 12 Year data of WPI and CPI besides considering 3 year
compounded annual growth rate (CAGR) of consumers. Considering
the Wholesale Price Index (WPI) as per the data available from the
Ministry of Commerce & Industry, Government of India and Consumer
Price Index (CPI) as per the data available from the Labour Bureau,
Government of India and adopting the methodology followed by the
CERC with CPI and WPI in a ratio of 80 : 20, the allowable rate of
inflation for FY16 is computed as follows:
xlii
TABLE-4.13
Allowable inflation for FY16
Year WPI CPI
Composite
Series Yt/Y1=Rt Ln Rt
Year
(t-1)
Product
[(t-1)*
(LnRt)]
2004 98.72 111.1 108.624
2005 103.37 115.8 113.314 1.04 0.04 1 0.04
2006 109.59 122.9 120.238 1.11 0.10 2 0.20
2007 114.94 130.8 127.628 1.17 0.16 3 0.48
2008 124.92 141.7 138.344 1.27 0.24 4 0.97
2009 127.86 157.1 151.252 1.39 0.33 5 1.66
2010 140.08 175.9 168.736 1.55 0.44 6 2.64
2011 153.35 191.5 183.87 1.69 0.53 7 3.68
2012 164.93 209.3 200.426 1.85 0.61 8 4.90
2013 175.35 232.2 220.83 2.03 0.71 9 6.39
2014 182.00 246.90 233.92 2.15 0.77 10 7.67
2015 177.03 261.42 244.542 2.25 0.81 11 8.93
A= Sum of the product column 37.56
B= 6 Times of A 225.37
C= (n-1)*n*(2n-1) where n= No of years of data=12 3036.00
D=B/C 0.07
g(Exponential factor)= Exponential (D)-1 0.0771
e=Annual Escalation Rate (%)=g*100 7.71
For the purpose of determining the normative O & M expenses for FY16,
the Commission has considered the following:
a) The actual O & M expenses allowed for FY13 excluding contribution
to Pension and Gratuity Trust.
b) The three year compounded annual growth rate (CAGR) of the
number of installations considering the actual number of
installations as per the audited accounts up to FY16.
c) The weighted inflation index (WII) at 7.71% as computed above.
d) Efficiency factor at 1% as considered in the earlier two control
periods.
Thus, the normative O & M expenses for FY16 will be as follows:
TABLE-4.14
Normative O & M Expenses
Particulars FY16
No. of Installations As per actuals as per Audited Accts 2152546
Weighted Inflation Index 7.71%
Consumer Growth Index (CGI) based on 3 Year CAGR 3.79%
Base year O & M expenses for FY13 excluding P&G
contribution - Rs. Crores 217.49
O&M Index= 0&M (t-1)*(1+WII+CGI-X)- Rs. Crores. 292.06
xliii
The above normative O & M expenses have been computed without
considering the contribution to Pension and Gratuity Trust for FY 16.
The Commission has treated the employee costs on account of
contribution to P&G Trust as uncontrollable O&M expenses. This
component has been allowed beyond the normative O&M expenses
to enable the ESCOMs to meet their actual employee costs.
MESCOM, as per the audited accounts has incurred an amount of
Rs.46.40 Crores towards contribution to Pension and Gratuity Trust for FY
16. Considering the request of MESCOM to treat the pension and
gratuity contribution as uncontrollable O & M expenses, the
Commission computes the allowable O & M expenses for FY16 as
follows:
TABLE – 4.15
Allowable O & M Expenses for FY16
Amount in Rs. Crores
Sl.
No. Particulars FY16
1 Normative O & M expenses 292.06
2 Additional employee cost (uncontrollable
O & M expenses)
46.40
Allowable O & M expenses for FY16 338.46
Thus, the Commission decides to allow an amount of Rs.338.46 Crores
as O&M expenses for FY16.
4.2.6 Depreciation:
MESCOM’s Submission:
MESCOM in its application as per the audited accounts has claimed
an amount of Rs.63.74 Crores as depreciation worked out after
deducting an amount of Rs.26.34 Crores being the depreciation on
account of assets created out of consumers’ contributions / grants as
per Accounting Standards (AS) – 12.
As per the audited accounts for FY 16, the asset-wise depreciation is as
follows:
xliv
TABLE – 4.16
Depreciation for FY16- MESCOM’s Submission
Amount in Rs.
Crores
Particulars
Opening
Balance of
Asset as on
01.04.2015
Closing
Balance of
Asset as on
31.03.2016
Depreciation
for FY16
Land :Freehold 4.79 6.58 -
Buildings 30.95 36.93 1.16
Civil 2.42 2.53 0.16
Other Civil 0.64 0.72 0.02
Plant & M/c 319.94 364.32 18.05
Line, Cable Network 1504.76 1662.20 72.51
Vehicles 3.96 4.63 0.12
Furniture 3.28 3.59 0.18
Office Equipment 0.78 0.85 0.03
Sub Total 1871.52 2082.35 92.23
Less: Depreciation on
account of Assets created
out of grants/Consumer
contribution
482.68 515.17 26.34
Less: Excess/under
provided Depreciation
during previous years
1388.84 1567.18 (2.15)
Net Depreciation 63.74
Commission’s analysis and decisions:
In accordance with the provisions of the KERC (Terms and Conditions
for Determination of Tariff) Regulations, 2006 and amendments
thereon, the depreciation for FY16 has been determined by the
Commission. Based on the opening and closing balances of gross
blocks of fixed assets for FY16 and the depreciation as per annual
accounts, the weighted average rate of depreciation works out to
4.70%.
Further, as per the Accounting Standards (AS) – 12, an amount of
Rs.26.34 Crores of depreciation is towards the assets created out of
consumer contribution / grants. Also, there is excess/under provision of
depreciation of the previous years to the extent of Rs.2.15 Crores.
Accordingly, the approved asset wise depreciation for FY16 is as
follows:
xlv
TABLE – 4.17
Allowable Depreciation for FY16
Amount in Rs. Crores
Particulars
Opening
Balance of
Asset as on
01.04.2015
Closing
Balance of
Asset as on
31.03.2016
Depreciation
for FY16
Buildings 30.85 35.63 1.16
Civil 2.43 2.53 0.16
Other Civil 0.63 0.72 0.13
Plant & M/c 221.33 254.84 12.65
Line, Cable Network 1120.70 1256.52 49.66
Vehicles 3.98 4.63 0.12
Furniture 3.28 3.59 0.18
Office Equipment 0.76 0.85 0.03
Net Depreciation 1383.96 1559.30 64.08
Thus, the Commission decides to allow the net depreciation of Rs.64.08
Crores for FY16.
4.2.7 Capital Expenditure for FY16:
MESCOM’s Submission:
MESCOM has reported the category-wise actual capital expenditure
at Rs.230.10 Crores for FY16 as against the capital expenditure
approved by the Commission at Rs.353.89 Crores. MESCOM has
indicated a capital expenditure of Rs.274.73 Crores in format D-17. The
category-wise expenditure submitted by MESCOM is shown below:
xlvi
Table -4.18
Capital expenditure of MESCOM for FY16 Amount in Rs. Crores
Sl No Particulars
CAPEX
approved
by the
Commission
Actual
Capex
1 E&I Works (Addl. Transformers, Link-Lines,
HT/LT Re-conductoring, HVDS ) 41.56 84.44
2 DTC metering, 50.00 1.22
3
Replacement of MNR/DC &
Electromagnetic meters by Static meters
& providing SMC meter protection box
wherever required
25.00 2.86
4 Nirantara Jyothi Yojane 90.00 -
5 R - Accelerated Power Development
and Reform Programme 10.00 4.78
6 Replacement of faulty Distribution
Transformers 30.00 5.37
7 Service Connection including promoter
vanished layout Works 20.00 27.48
8 Rural Electrification (General)
a Rural Electrification (RGGVY 12th Plan) 10.00 14.97
b RGGVY(DDG)
c Electrification of Hamlets 2.00 0.54
d Energization of IP sets Including providing
Infrastructure to regularized UIP 50.00 51.44
e Kutir Jyothi 0.01
f. Sheegra Samparka Yojane 0.25 1.66
g. Naxal package 0.03
9 Tribal Sub-Plan
a Electrification of Tribal Colonies 0.60 0.16
b Energization of IP sets 0.38 0.24
c Kutir Jyothi 0.02 -
10 Special Component Plan
a Electrification of S.C Colonies 1 0.24
b Energization of IP sets 0.98 0.36
c Kutir Jyothi 0.1 -
11 Tools & Plants & Computers 2.00 9.41
12 Civil Engineering Works 5.00 14.35
13 33 KV Station and Line Works 15.00 10.54
Grand Total 353.89 230.10
Commission’s analysis and decision:
The Commission notes that, though, the overall capital expenditure of
Rs.230.10 Crores for FY16 is within the approved capex of Rs.353.89
Crores, MESCOM has exceeded its capex limit in respect of a few
categories of works. Some of the major categories exceeding the limit
are shown below:
xlvii
i) In respect of “E&I Works (Addl. Transformers, Link-Lines, HT/LT Re-
conductoring, HVDS)”, MESCOM has incurred a capex of Rs.84.44
Crores, in which Rs.42.88 Crores is over and above the approved
capex of Rs.41.56 Crores. MESCOM in its replies to the preliminary
observations made by the Commission has stated that, the
increased capex in this category was due to completion of spill-
over works of earlier years as well as some of the additional works, it
has taken up for improvement of the distribution system during
FY16.
ii) In respect of “DTC metering, replacement of MNR/DC &
Electromagnetic meters by Static meters & providing SMC meter
protection box, wherever, required”, MESCOM has achieved a
meagre capex of Rs.1.22 Crores and Rs.2.86 Crores, against the
approved capex of Rs.50 Crores and Rs.25 Crores respectively. The
Commission has been directing MESCOM to complete DTC
metering and energy audit, but, MESCOM has failed to achieve its
own set targets. MESCOM in its replies to the preliminary
observations made by the Commission has stated that, MESCOM
has awarded the tenders and achieved 66% physical progress of
implementation of metering works, for which, the expenditure
would be reflected in FY17, after the works are fully completed and
paid for.
iii) In the category of “Tools, Plants & Computers”, the MESCOM has
achieved a capex of Rs.9.41 Crores against the approved capex of
Rs.2 Crores. MESCOM in its replies to the preliminary observations
has stated that, some of the major items like, five Lorries, four Energy
meter testing benches, high visibility reflective rain wear, ten
Lenovo laptops, safety helmets and chain saw have been
procured during FY16 along with the other minor T&P materials.
Further, looking at the capital expenditure of MESCOM against the
approved amounts during the past five years, it is observed that,
the percentage achievement is ranging from 36.55% to 68.64%,
which is not very encouraging except in FY15, which is 96.09% of the
xlviii
target capex. The details of the expenditure targets achieved by
MESCOM for the last five years is shown below:
TABLE –4.19
Approved Vs Actual capital investment
Amount in Rs. Crores Particulars FY12 FY13 FY14 FY15 FY16
Capital Investment
Proposed &
Approved
348.55 249.85 281.44 262.33 353.89
Capital Investment
actually incurred 127.4 130.92 193.17 252.07 230.10
Short fall 221.15 118.93 88.27 10.26 123.79
% Achievement 36.55% 52.40% 68.64% 96.09% 65.02%
In light of the above discussions and considering the explanation
furnished by MESCOM, the Commission decides to consider the
capital expenditure of Rs.230.10 Crores incurred by MESCOM, for
APR of FY16, subject to disallowance if any, as per the results of the
prudence check conducted for FY16, indicated in the following
para.
The prudence check of capital expenditure and material procurement
of MESCOM for FY16:
The Commission has got the Prudence check of capital expenditure for
FY16, done through third party verification of the capital works
categorized and also the material procurement of MESCOM during
FY16. This was taken up in two parts:
a) Prudence check of execution of the capital works of FY16:
b) Prudence check of material procurement process of FY16:
a) Prudence check of execution of the capital works of FY16:
The Commission has taken up prudence check of the capital
expenditure incurred by MESCOM pertaining to FY16 by engaging the
services of M/s. The Energy and Resources Institute (M/s TERI) as
consultant, being the lowest bidder for the said job, through a
xlix
transparent process of e-tendering, to evaluate the capital
expenditure incurred during FY16 in respect of the categorized works.
M/s TERI has stated that, the capital expenditure of MESCOM for FY16
was Rs.274.13 Crores and the total asset categorized as per the annual
accounts was Rs.228.81 Crores. This included the spill over works of
previous year as well as new works of FY16. In the total assets
categorized for FY16, Plants & Machinery accounted for Rs.73.51
Crores and lines & cables accounted for Rs.146.25 Crores.
M/s TERI has received the list of works data from MESCOM towards
categorized works of 11,688 Nos. with Rs.186.93 Crores, in which 550
works belonged to Rs.6 Lakhs and above accounting to 35.3% of the
entire assets categorized. The remaining works belonged mainly to a
very low value for each work, but with a huge number of 11,138 works.
The details of capitalization of assets from the annual audited
accounts are as below:
TABLE - 4.20
Details of Assets created during FY16
Particulars Amount
[Rs. Crores]
Total addition in Gross Fixed Assets (GFA) 228.81
Addition in assets created out of grants and
consumer contributions 43.99
Total addition in GFA, excluding those created
out of grants and consumer contributions 184.82
M/s TERI has considered a total sample of 215 Nos of works costing
Rs.38.04 Crores as against the total works and cost as shown below:
TABLE – 4.21
Selection of samples for prudence check
Cost Category
Master List Samples Selected
No. of
Projects
Actual Cost
(Rs. Lakhs)
No. of
Projects
Actual Cost
(Rs. Lakhs)
Above Rs. 6 Lakhs 550 6615.83 121 3460.2
Rs 3 Lakhs to 6
Lakhs 2450 6173.92 52 297.0
Rs 1 Lakh to Rs 3
Lakhs 8688 5903.71 42 46.5
l
Total 11688 18693.48 215 3803.86
M/s TERI has stated that, as per the detailed guidelines by KERC, the
prudence check was carried out for selected 215 projects by
conducting field visits. The following data was collected on the
technical and financial details for the analysis.
i. Collection of DPRs/estimates (for project objectives, energy
savings, cost benefits etc.)
ii. Details of technical parameters like peak load, monthly energy
handled, tail end voltage etc. were collected from the
substations & consumer premises.
iii. Details of finance incurred were collected from respective O&M
division & circle offices.
M/s TERI has stated that, the individual works were reviewed by duly
verifying the primary/major objective of investment as envisaged in the
Detailed Project Report (DPR) / project estimates, spread of planned
expenditure, merits of alternatives for the proposed work, details of
financing, cost benefit analysis, schedule of implementation and time
& cost overrun (with specific reasons) etc. Based on these technical
and financial parameters, each of the works was analyzed taking into
account the realized benefits and capacity utilization. Thereafter,
evaluation of each project was carried out by assigning the
score/marks as per the KERC guidelines and concluded with remarks.
Based on the analysis carried out, 212 numbers of projects were found
to be satisfying the prudence norms and the 3 projects didn’t satisfy
the prudence norms. Some of the salient features are stated as follows:
TABLE – 4.22
Gist of Prudence check findings for FY16
Particulars Numbers Amount in
Rs. Crores
Works costing Rs.6 Lakhs and above
considered as samples 121 34.602
Works costing between than Rs.6 Lakhs and
Rs.3 Lakhs considered as samples 52 2.97
Works costing below Rs.3 Lakhs considered as
samples 42 0.462
Works not meeting
the norms of
prudence
Rs.6 Lakhs and above
Rs.6 Lakhs and Rs.3 Lakhs 03 0.1538
below Rs.3 Lakhs Nil
li
Total works not meeting the norms of
prudence as stipulated in the guidelines issued
by this Commission and cost
03 0.1538
M/s TERI has furnished the details of works not meeting prudence norms
and the works which are conditionally prudent as follows:
TABLE – 4.23
Details of works not meeting prudence norms
Sl.
No Project Name
Cost of
project in
Rs.Lakh
Remarks
1 Sagara: Sulugodu Drinking
Water Supply
4.75
Infrastructure created exclusively
for Grama Panchayath water
supply system, but at present
many illegal IP sets are
connected to DTC and actual
water supply scheme is not in use
from more than a year.
2 Kunchebailu: A/P/S to 35*2
HP IP set inst. of M/s
Rajendra Coffee Estate,
Gantanaika, Kunchebailu,
Jayapura.
5.82
Work was completed in all
respects, since the consumer has
not installed proposed IP sets, line
and transformer was not charged
for nearly one year.
3 Ajjampura: Providing
quality power supply to IP
set of Sri. B. Lingaraju S/O
Basappa at
Gadirangapura in Shivani
Section, Ajjampura sub
division under ganga
kalyana scheme
4.81
Work was completed in all
respect, but, due to non-
availability of water, the pump
set was not installed and the lines
and transformer could not be
energised.
From the same 25kVA
transformer, 2 numbers of un-
authorised pump set were found
to be connected.
TABLE – 4.24
Details of works which are conditionally prudent
Sl.
No Project Name Remarks
1 Ishwarakatte and Perara
feeders: Formation of new
express feeder Iswarakatte
and Perara feeders from
220/110/33/11KV MSEZ MUSS
Out of the two new express feeders,
Ishwarakatte line was charged and
only some load was transferred on
this new line from Kaikamba feeder
and the present peak load on this
new line is 0.85 MW. Perara line was
idle charged and presently no load
was transferred as it is yet to be
completed. HT conductoring work of
lii
more than 2 Kms is pending on this
feeder.
The summery of works which are having cost overrun as well as time
overrun are shown as follows:
TABLE – 4.25
Summary of Works having cost overrun
Particulars No Cost
overrun Within
25% 26-50%
Above
50%
Rs.6 Lakhs and
above
76 15 3
0
Rs.6 Lakhs and Rs.3
Lakhs
52 8 0
1
below Rs.3 Lakhs 36 6 0 1
Total 164 29 3 2
Note: For 17 works, the actual cost of completion was not available.
TABLE – 4.26
Division-wise summary of Works having cost overrun
Division Cost over-run analysis
No over run <25% 26 - 50% >50%
Chikkmagalur 6 4 2 2
Kadur 5 3 5 9
Bantwal 18 12 10 4
Mangaluru-1 2 6 4 2
Mangaluru-2 2 7 5 1
Puttur 14 15 7 0
Bhadravathi 3 2 2 1
Shikaripura - 2 7 1
Sagar 2 5 1 1
Shivamogga - 2 4 3
Kundapura 4 6 2 -
Udupi 8 10 3 1
Total 64 74 52 25
liii
TABLE – 4.27
Summary of Works having Time overrun
Particulars
No
Delay
Within
one
month
Between
one and six
months
Above
1Year
Rs.6 Lakhs and
above 53 15 4 0
Rs.6 Lakhs and Rs.3
Lakhs 36 33 4 3
below Rs.3 Lakhs 32 12 2 0
Total 164 60 10 3
TABLE – 4.28
Division-wise summary of Works having Time overrun
Division
Time over-run analysis
No
delay <1month
1 - 3
months
3 - 6
months
6 - 12
months >1year
Chikkamagalur 1 3 7 3 - -
Kadur 22 - - - - -
Bantwal 20 11 9 2 1 1
Mangaluru-1 13 1
Mangaluru-2 2 10 1 1 1
Puttur 17 8 4 4 2 1
Bhadravathi 5 - 1 1 1 -
Shikaripura 8 - 2 - - -
Sagar 8 1
Shivamogga 9
Kundapura 11 1
Udupi 9 5 3 2 2 1
Total 125 37 29 14 7 3
The Commission had forwarded the copy of the Report on the
Prudence check submitted by the consultant to MESCOM, seeking its
views as well as any justification towards the projects termed as non-
prudent to be meeting to the norms of prudence to reach the
Commission on or before 20th March, 2017.
MESCOM in its replies dated 20th March, 2017 has furnished the
justifications on three projects identified as not meeting the prudence
norms as indicated below:
1. Sagara: Sulugodu Drinking Water Supply
liv
MESCOM’s reply: Infrastructure created exclusively for Grama
Panchayath water supply system, is presently operational. The 3 Nos IP
Sets on this transformer are authorised IP Sets.
The Commission notes that, MESCOM cannot claim IP Sets connected
to a water supply TC as authorised installations as the water supply TC
would be supplied with 24 Hours of power supply and connecting IP
Sets to such TCs would be against the policy of Government, which
stipulates power supply of only 6-7 Hrs to IP sets. This project is to be
treated as non-prudent. The Commission directs MESCOM to shift the IP
Sets to some other TC and make the water supply TC as exclusive
installation and report compliance.
2. Kunchebailu: A/P/S to 35*2 HP IP set inst. of M/s Rajendra
Coffee Estate, Gantanaika, Kunchebailu, Jayapura.
MESCOM’s reply: The Transformer and line are charged on 3.2.2017.
Power supply could not be charged as the consumer had delayed
installing metering equipment.
The Commission notes that, MESCOM has not taken any action over
one year and has not even taken initiative to issue notice to the
consumer and treat the installation as deemed to have been serviced.
For this lapse in the project of MESCOM, it is to be treated as non-
prudent.
3. Ajjampura: Providing quality power supply to IP set of Sri. B.
Lingaraju S/o Basappa at Gadirangapura in Shivani Section, Ajjampura
sub division under ganga kalyana scheme.
MESCOM’s reply: Work was completed in all respects, but, due to
non-availability of water, the pump set was not installed and the lines
and transformer could not be energised.
From the same 25kVA transformer, one authorised IP Set is connected
and an un-authorised pump set which was connected by the farmer
has been disconnected.
lv
The Commission notes that, since, the infrastructure is used for
providing power supply to the authorised IP set, the project can be
treated as prudent.
In light of the above discussions, the Commission decides that, two
works are not meeting norms of prudence check and decides to
disallow the weighted average interest and depreciation on the
capex of works not meeting the norms of prudence as stated below:
TABLE – 4.29
Details of Amounts disallowed in APR FY16
Sl
No Particulars
Amount in
Rs. Crores
1 Total cost of categorized works eligible for prudence
check 186.93
2 Total cost of the sample works 38.04
3
Cost of sample works in the category of Service
connections, not meeting prudence norms (02 work
with cost of Rs.4.75+5.82 Lakh)
0.1057
4
Cost of sample works not meeting prudence norms
(02 work with cost of Rs.4.75+5.82 Lakh against a
sample basket of 12 works with Rs.34 Lakhs in the
category of Service connection work escalated to a
total size of category of 977 Nos. and total cost of
Rs.11.16Crores)
3.47
5
Amount to be disallowed towards works not meeting
prudence norms calculated on the basis of weighted
average interest & weighted average depreciation
on the capex to be disallowed.
0.402
Thus, the Commission decides to deduct an amount of Rs.0.402 Crores
towards disallowance of interest and depreciation on the imprudent
capital works for FY16 in the revised approved ARR for FY18 as
discussed in the subsequent Chapter of this Order.
Some of the general observations and suggestions made by the
consultant on the execution of works are listed below.
a) Most of the projects are taken up due to load growth and for
improving the voltage levels. The primary aim of most of these
completed projects is to minimize distribution loss and to handle
additional load growth.
lvi
b) Most of the grant funded projects are not executed in specified
time, which consequently get converted as loan. For those projects,
interest has been enforced by the funding agency that has
capitalized burden on the consumers.
c) It was observed that there was either delay in asset categorization
of the projects or projects were partially categorized due to various
reasons such as non-submission of bills, price variation, liquidated
damages & accounting procedures adopted.
d) For planning of a new project, MESCOM should consider not only
the connected load of a particular location, but also the actual
recorded peak load of the area which can be accessed through
DTC metering.
e) In some of the distribution transformers, the connected load is more
than the rated capacity. Due to this overloading of the transformers
leading to increased transformer failures.
f) In some of the areas of RGGVY scheme, it was observed that
feeders are lengthy with very few beneficiaries. The energy
consumption pattern is very minimal associated with significant line
losses (annual line losses is more than the total energy consumption
of the hamlet/villages).
g) It is also suggested to provide energy efficient lighting schemes for
Hamlet electrification village consumers.
h) To avoid ambiguity and effective utilization of R-APDRP, it is
recommended to provide training for all the urban staffs.
i) In some of the areas of MESCOM, auto re-closers with sectionalizer
were installed which has resulted in reduction of interruptions. Such
lvii
schemes can be implemented on a larger scale in high interruption
areas.
j) DTC metering allows the officials to know the current load and
peak load on a particular area whenever they required. But in
many places particularly in Shivamogga and Chikkamagalur circle,
DTC metering of IP sets are not installed or installed systems are
faulty. Hence, MESCOM officials should conduct frequent checks of
the performance of DTC metering and ensure their correct
operation.
b) Prudence check of material procurement process of FY16
MESCOM is executing the capital works through total turnkey as well as
partial turnkey works. In some cases, the agency or the contractor
assigned with the partial turnkey would also invest in some of the
smaller materials whenever it is necessary. While procuring the
materials at large quantities, it is very essential for MESCOM to see that,
no stock is kept idle for a longer period and the material procurement
is carried out in a prudent manner as per the requirement. The
Commission has been instructing the consultants to check the material
procurement process in all the ESCOMs along with the prudence
check of execution of works.
M/s TERI has stated that, the capital works is mainly divided into two
categories.
a) Main capital works and
b) general capital works
The “Main Capital works” broadly comprises of the following;
a) Construction of new sub-station with associated lines and also
exclusive lines to link the distribution system.
b) Augmentation of station capacity and distribution lines
capacity.
c) Service connections such as water supply, GK –IP sets
d) RGGVY under social responsibility scheme
lviii
e) Pure civil works such as construction of buildings, etc.,
The “General capital works” includes works related to replacement of
faulty transformers, breakers, CT’s, PT’s, Relays, station battery & battery
chargers, providing new/additional switchgears, and other associated
equipment, etc.
The Main capital works are carried out on total turnkey or Partial
turnkey based concept, which are covered under contractor’s scope.
The procurement of materials for general capital works has been
planned by MESCOM.
M/s TERI has made observations on procurement of major materials as
follows:
i. MESCOM is following the procedure of procurement of major
materials according to the specified norms. Bulk of the
procurement cost is accounted for procurement of extension
and improvement works along with augmentation and
replacement of faulty transformer and lines.
ii. For the augmentation and replacement of transformers actual
planned works (along with their estimated cost) are given in the
MESCOM annual progress works and utilized transformers are
reported in the Annual reports.
iii. Significant portion of investment has been incurred towards the
procurement of circuit breakers, CTs’, PT’s and other auxiliary
protection equipment for maintenance.
M/s TERI has stated that, from the prudence check of material
procurement of major materials, it was observed that inventory level
stocks of conductors, insulators and line supports are maintained at
higher level than the required quantities when compared with actual
utilization. M/s has discussed this issue with the MESCOM officials, and it
was understood that procurement of such items are very tedious and
lix
most essential for timely execution of projects, as some of the materials
procurement lead time is very high due to market conditions.
The Commission after noting the above discussions:
i. Directs MESCOM to take action to make the conditionally
prudent works to meet the norms of prudence and furnish
compliance.
ii. Directs MESCOM to take action to rectify the work termed as not
meeting prudence check and report.
iii. Directs MESCOM to monitor the works, complete and categorize
the works within the target time.
iv. Directs MESCOM to monitor the stock position continuously and
plan procurement in stages to avoid keeping huge stock of
materials.
4.2.8 Interest and Finance Charges:
a) Interest on Capital loan:
MESCOM’s Submission:
MESCOM in its application has claimed an amount of Rs.62.68
Crores towards interest on capital loans drawn from
Banks/Financial Institutions for FY16.
Considering the opening balance of loans, new borrowings and
the repayment of capital loans during FY16, the weighted
average rate of interest on the average loan amount works out
to 13.16%.
Commission’s analysis and decisions:
The Commission has noted the status of opening and closing balances
of capital loans as per the audited accounts for FY16 and format D9 of
the filings as shown below:
TABLE – 4.30
Allowable Interest on Loans – FY16 Amount in Rs. Crores
lx
As per the audited accounts for FY16, the actual interest on capital
loans is Rs.51.37 Crores. MESCOM has claimed interest on capital loans
of Rs.62.68 Crores which includes interest on short term loans. The
Commission has been allowing the interest on working capital
separately, duly considering the actual interest on short term loans. The
actual interest on capital loans as per audited accounts is Rs.51.37
Crores only.
Considering the average loan of Rs.468.70 Crores and an amount of
Rs.51.37 Crores incurred towards interest on capital loans, the weighted
average of interest works out to 10.96%. The actual weighted average
rate of interest is comparable with the prevailing rate of interest for
long term loans.
Hence, the Commission decides to allow an amount of Rs.51.37 Crores
towards interest on capital loans for FY16.
b) Interest on Working Capital:
MESCOM’s Submission:
MESCOM in its application has stated that it has borrowed short
term loans and overdrafts to meet its day to day expenditure
(working capital) during FY16. As per the audited accounts,
MESCOM has incurred an amount of Rs.23.50 Crores towards
interest on short term loans/overdrafts during FY16. However,
MESCOM in its application under format D9 has claimed an
amount of Rs.37.74 Crores an interest on working capital and has
sought approval of the Commission for the same.
Particulars FY16
Opening Balance Secured Loans 442.39
Opening Balance Un-secured Loans 17.64
Total opening balance of loans 460.03
Add: New Loans 120.00
Less: Repayments 102.65
Total loan at the end of the year 477.38
Average Loan 468.70
Allowable Interest on Capital Loans 51.37
lxi
Commission’s analysis and decisions:
As per the audited accounts MESCOM has incurred an interest of
Rs.23.50 Crores on short term loans/over drafts for FY16.
As per the MESCOM’s replies to the Commission’s preliminary
observations, it is stated that short term loans are availed at an interest
rate of 10% to10.90% and overdraft at 10.70% during FY16. As decided
in the Tariff Order dated 2nd March, 2015 while approving the revised
ARR for FY16, the Commission decides to allow working capital loans at
a normative interest rate of 11.75% for FY16.
As per the KERC (Terms and Conditions for Determination of Tariff)
Regulations, 2006 and amendments thereon, the Commission has
computed the allowable interest on working capital for FY16 as follows:
TABLE – 4.31
Allowable Interest on Working Capital for FY16 Amount in Rs. Crores
Particulars FY16
One-twelfth of the amount of O&M Expenses 28.20
Opening GFA 2082.35
Stores, materials and supplies 1% of Opening balance
of GFA 20.82
One-sixth of the Revenue 393.87
Total Working Capital 442.90
Rate of Interest (% p.a.) 11.75
Normative Interest on Working Capital 52.04
Actual interest on WC as per audited accounts for FY16 23.50
Allowable Interest on Working Capital 37.77
The Commission therefore decides to allow an amount of Rs.37.77
Crores towards interest on working capital for FY16.
c) Interest on Consumers’ Security Deposits:
MESCOM’s Submission:
MESCOM in its application as per audited accounts has claimed
an amount of Rs.35.55 Crores towards payment of interest on
consumers’ security deposits for FY16.
Commission’s analysis and decisions:
lxii
The Commission notes that, based on the average amount of
consumer security deposits, the interest on consumer security deposits
amounting to Rs.35.55 Crores claimed by MESCOM works out to a
weighted average rate of interest of 8.23%. As per the KERC (Interest
on Security Deposit) Regulations, 2005, the interest on consumer
deposits is to be allowed as per the bank rate prevailing on the 1st of
April of the relevant year. The bank rate as on 1st April, 2015 was 8.50%.
The weighted average rate of interest claimed by MESCOM as per the
audited accounts is within the applicable bank rate.
Thus, the Commission decides to allow an amount of Rs.35.55 Crores
towards interest on consumer security deposits for FY16.
d) Other Interest and Finance charges:
MESCOM has claimed an amount of Rs.1.21 Crores towards other
interest and finance charges for FY16, paid to banks / financial
institutions as per format D9. As per the audited accounts for FY16,
MESCOM has incurred Rs.1.20 Crores as interest and finance charges.
The Commission decides to allow the same for FY16.
e) Interest on belated payment of Power Purchase Cost:
MESCOM in its application has claimed an amount of Rs.0.29 Crores
towards Interest on belated payment of Power Purchase Cost for FY16.
As per the audited accounts, an amount of Rs.0.29 Crores is indicated
as interest on power purchase dues payable to KPCL. The Commission
has been consistently allowing the interest on working capital as per
the norms under MYT Regulations to meet the day to day expenses of
the ESCOMs. Hence, there is no justification for claiming interest on
power purchase dues separately. Hence, the Commission decides not
to allow any interest on power purchase dues in the APR for FY16.
f) Capitalization of Interest and other expenses:
MESCOM in its filing and as per the audited accounts for FY16 has
capitalized interest of Rs.1.30 Crores on funds used during construction
and Rs.1.02 Crores towards A&G expenses during FY16. The
Commission has considered an amount of Rs. 2.32 Crores towards
lxiii
capitalization of Interest and other expenses for computation of APR
for FY16.
As per the above discussions, the allowable interest and finance
charges for FY16 are as follows:
TABLE – 4.32
Allowable Interest and Finance Charges Amount in Rs. Crores
Sl.No. Particulars FY16
1. Interest on Loan capital 51.37
2. Interest on working capital 37.77
3. Interest on consumer deposits 35.55
4. Interest on Power Purchase dues 0.00
5. Other interest and finance charges 1.20
6. Less Interest and other expenses capitalized 2.32
Total interest and finance charges 123.57
4.2.9 Other Debits:
MESCOM’s Submission:
MESCOM, in its application has claimed an amount of Rs.5.03
Crores towards other debits for FY16.
Commission’s analysis and decisions:
The Commission notes that as per the audited accounts, the allowable
other debits excluding the provision for bad and doubtful debts for
FY16 are as detailed below:
TABLE – 4.33
Allowable Other Debits
Amount in Rs. Crores
Sl
No Particulars FY16
1 Small and Low value items written off 0.08
2 Losses relating to fixed assets 1.89
3 Assets decommissioning cost 0.13
4 Miscellaneous losses and write offs 1.29
5 Bad debts written off excluding
provisions 1.07
6 Interest paid to Income Tax
Department 0.07
Total 4.53
Thus, the Commission decides to consider an amount of Rs.4.53 Crores
as other debits for FY16.
4.2.10 Net Prior Period Charges:
lxiv
MESCOM’s Submission:
MESCOM in its application has not claimed Prior Period
income/expenses for FY16.
Commission’s analysis and decisions:
As per the Audited Accounts for FY16, the prior period debit is Rs.0.53
Crores on account of employee costs, A&G expenses, interest and
finance charges and expenses of earlier years. Further the prior period
credit of Rs.9.20 Crores is on account of income relating to prior period.
Thus, the Commission decides to consider a net prior period credit of
Rs.8.67 Crores for FY16 for the purpose of APR.
4.2.11 Return on Equity:
MESCOM’s Submission:
MESCOM in its application has claimed Return on Equity at
Rs.76.87 Crores for FY16.
Commission’s analysis and decisions:
The closing balances of gross fixed assets along with break-up of equity
and loan component and the details of GFA, debt and equity (net-
worth) for FY16 as per actual data as per the audited accounts are
indicated as follows:
TABLE – 4.34
Status of Debt Equity Ratio for FY16 Amount in Rs.
Crores
GFA
(Closing
Balance)
Debt
(Closing
Balance)
Equity
(Net-
worth)
(Closing
Balance)
Normative
Debt @
70% of
GFA
Normative
Equity @
30% of
GFA
%age
of
actual
debt
on GFA
%age
of
actual
equity
on GFA
1871.52 477.38 351.04 1310.06 561.46 25.51 18.76
From the above table it is evident that the debt and equity amount lie
within the amounts as per the normative debt equity ratio of 70: 30 on
the closing balances of GFA for FY16.
lxv
As per the KERC (Terms and Conditions for Determination of Tariff)
Regulations, 2006 and amendments thereon, the Commission has
computed the allowable Return on Equity at 15.5% on equity plus the
accumulated balance of profit/loss as per audited accounts as at the
beginning of the year and also factoring recapitalization of security
deposit of Rs.26.00 Crores in compliance with the Orders of the Hon’ble
ATE in appeal No.46/2014. The allowable RoE for FY16 is determined as
follows:
As per the KERC (Terms and Conditions for Determination of Tariff)
Regulations, 2006 and amendments thereon, the Commission has
computed the allowable Return on Equity at 15.50% on equity plus
reserves and surplus as at the beginning of the year and also factoring
recapitalization of security deposit of Rs.26.00 Crores in compliance
with the Orders of the Hon’ble ATE in appeal No.46/2014. The allowable
RoE for FY16 is determined as follows:
TABLE – 4.35
Allowable Return on Equity
Amount in Rs. Crores
Particulars FY16
Paid Up Share Capital 216.07
Share deposit 36.66
Reserves and Surplus as on 31.03.2015 85.57
Recapitalization of Consumers’ security
deposit (26.00)
Total Equity 312.30
Allowable RoE @ 15.50% 48.41
Further, as reported by MESCOM an additional equity of Rs.27.63 Crores has
been received during the year from Government of Karnataka. Considering
the actual date of receipt of this additional equity, the Commission as per
provisions of the MYT Regulations, has determined the allowable return on
additional equity as detailed below:
TABLE – 4.36
Return on equity for the additional equity received during FY16
Additional Equity received during
FY16
Amount
in Crs
Received
on
No. of
Months
RoE
allowe
d in Rs.
Crores
lxvi
EN 16 PSR 2015 dated 26.06.2015 0.95 10.7.2015 8 0.10
EN 16 PSR 2015 dated 26.06.2015 0.30 10.7.2015 8 0.03
EN 11 PSR 2015 dated 25.08.2015 1.43 8.9.2015 6 0.11
EN 10 PSR 2015 P1 dated 9.11.2015 1.90 27.11.2015 4 0.10
EN 10 PSR 2015 P1 dated 9.11..2015 0.60 27.11.2015 4 0.03
EN 16 PSR 2015 P1 dated 3.12.2015 10.00 15.12.2015 3 0.39
EN 11 PSR 2015 dated30.12.2015 0.75 8.1.2016 2 0.02
EN 16 PSR 2015 P1 dated10.2..2016 1.20 24.02.2016 1 0.02
EN 11 PSR 2015 P1 dated 18.2.2016 0.67 5.3.2016 0 0.00
EN 16 PSR 2015 dated 29.02.2016 9.83 10.3.2016 0 0.00
TOTAL 27.63 0.79
Thus, the Commission decides to allow Return on Equity of Rs.49.20
Crores for FY16.
4.2.12 Exceptional Items:
MESCOM in its applications has not claimed any expenses as
exceptional items. However, as per the audited accounts a credit
amount of Rs.2.70 Crores is indicated as exceptional item.
The Commission notes that, the amount of Rs.2.70 Crores as stated
under Note 32 of the audited accounts pertains to income on account
of MAT credit entitlement of previous years. Thus, the Commission
decides to allow the credit amount of Rs.2.70 Crores as exceptional
item in the APR for FY16.
4.2.13 Income tax:
As per the audited accounts, MESCOM has factored Rs.2.31 Crores towards
payment of Income Tax for FY16. Further, as per the profit and loss
statement, credit entitlement of MAT is indicated as Rs.2.31 Crores. Thus, the
allowable tax to be factored in ARR is nullified.
4.2.14 Other Income:
MESCOM’s Submission:
MESCOM in its application has claimed an amount of Rs.47.74 Crores
as Other Income for FY16.
lxvii
Commission’s analysis and decisions:
As per the audited accounts, the other income is Rs.76.92 Crores for
FY16. This includes income from sale of scrap, income from rent,
rebate for collection of electricity duty, delayed payment charges
from consumers, income relating to prior period and miscellaneous
recoveries. The delayed payment charges from consumers amounting
to Rs.48.57 Crores are considered as revenue and an amount of Rs.9.20
Crores of income relating to prior period is included in prior period
debit/credit. Also an amount of Rs.21.81 Crores pertaining to incentive
received for early payment of power purchase bills and an amount of
Rs.6.77 Crores being other income related to power purchase which is
wrongly included under revenue head, is considered as other income.
Further, as decided in the earlier Tariff Orders, to encourage and bring
in financial discipline in timely payment of monthly power purchase
bills, the Commission continues to allow10% of the total incentive
amounting to Rs.2.18 Crores on account of early payment of power
purchase bills, to be retained by MESCOM for FY16. Further, as per the
APR of MSEZ for FY16, the power purchase cost is reckoned as Rs. 7.96
Crores as against Rs. 7.28 Crores factored in the power purchase cost
by MESCOM. The Commission has considered the difference of
Rs.0.68 Crores as other income to be received by MESCOM from MSEZ.
Thus, the Commission decides to allow an amount of Rs.46.25 Crores as
other income for FY16.
4.2.15 Fund towards Consumer Relations / Consumer Education:
The Commission has been allowing an amount of Rs.0.50 Crore per year
towards consumer relations / consumer education. MESCOM in its filing has
reported that an amount of Rs.0.11 Crores has been incurred towards
Consumer Relations / Consumer Education for FY16. The Commission
decides to allow an amount of Rs.0.11 Crores as expenditure towards
Consumer Relations / Consumer Education for FY16.
4.2.16 Carrying Cost on Regulatory Asset:
lxviii
MESCOM in its application has not claimed any amount of carrying cost on
the Regulatory Assets kept by the Commission in its earlier Tariff Orders. The
Commission in its Tariff Order dated 12th May, 2014 had treated the unmet
gap in revenue of Rs.101.02 Crores as Regulatory asset to be recovered in
FY16 and FY17 and also decided to allow carrying cost at 12% per annum on
the Regulatory Asset to be assessed at the time of APR of FY16 and FY17.
Accordingly, the Commission had factored Rs.50.50 Crores being the 50% of
Regulatory Asset in the ARR of FY16 and allowed it to be recovered in the
revised retail supply tariff.
The Commission while computing the revised ARR as per APR of MESCOM
for FY16, has arrived at a gap of Rs.396.42 Crores after duly allowing the
Carrying cost of Rs.6.06 Crores at 12% per annum on the amount of
Regulatory Asset of Rs. 50.50 Crores kept for FY16 and carried forward the
gap in revenue to the approved the ARR for FY18 and allows it to be
recovered in the retail supply tariff for FY18.
The Commission has considered Regulatory Asset of Rs. 92.25 Crores while
approving the ARR of FY17 and the same has been passed on to the
consumers in the retail supply tariff for FY17. Hence, no Regulatory Asset is
remaining to be recovered after the issue of this Tariff Order.
4.2.17 Revenue for FY16:
MESCOM, in its application has considered Rs.2363.22 Crores as revenue
from sale of power from consumers and miscellaneous charges.
The Commission notes that as per the audited accounts for FY16, the
revenue from sale of power is Rs. 2691.75 Crores. This amount includes the
notional income on account of Regulatory asset/ Truing up subsidy of
Rs.348.52 Crores which is not a revenue amount to be considered in real
terms.
The incentives amount on account of early payment of power purchase bill
amounting to Rs.21.81Crores and other income relating to purchase of power
of Rs.6.77 Crores not being the revenue from sale of power to consumers
has been included under revenue head of account. Further, Rs. 48.56 Crores
being the delayed payment charges from consumers which has been
lxix
included in the audited accounts under other income, has been factored as a
part of revenue.
After factoring in the above aspects, the Commission decides to consider
Rs.2363.21 Crores as revenue from sale of power to consumers for the
purpose of approval of revised ARR as per the APR of MESCOM for FY16.
4.2.18 Subsidy for FY16:
The Commission in its tariff order dated 2nd March, 2016 has approved
tariff subsidy of Rs. 513.12 Crores towards sale of power to BJ/KJ and IP
sets for FY 16 in accordance with the prevailing Government Order.
The Commission in computation of APR for FY16 has approved the
revised tariff subsidy of Rs.511.02 Crores towards sale of power to BJ/KJ
and IP sets for FY 16.
4.3 Abstract of Approved ARR for FY16:
As per the above item-wise decisions of the Commission, the
consolidated Statement of revised ARR for FY16 is as follows:
TABLE – 4.37
Approved revised ARR for FY16 as per APR
Amount in Rs. Crores
Sl.
No
Particulars FY16
As Appd.
02.03.2015
As Filed
30.11.2016
As per
APR
1 Energy at Gen Bus (With
MSEZ)
5287.58 5027.72 5027.72
2 Transmission Losses in % 3.80% 3.15% 3.43%
3 Energy at Interface in MU 5086.65 4869.12 4869.12
4 Distribution Losses in % 11.25% 11.50% 11.50%
5 Sales in MU
Sales to other than IP &
BJ/KJ
3227.38 3097.96 3038.92
Sales to BJ/KJ 12.69 13.78 13.78
Sales to IP 1191.26 1197.43 1197.43
Total Sales 4431.33 4309.17 4250.13
6 Revenue from tariff in Rs Crs
Revenue from tariff and
Misc. Charges
1935.68 1852.20 1852.19
RE Subsidy to BJ/KJ 6.83 9.25 9.25
lxx
RE Subsidy to IP 506.29 501.77 501.77
Total Revenue 2448.80 2363.22 2363.21
Expenditure in Rs Crs
7 Power Purchase Cost 1767.35 2010.15 2010.15
Transmission charges of
KPTCL
217.21 218.70 218.70
SLDC Charges 2.52 1.71 1.71
Power Purchase Cost
including cost of
transmission
1987.08 2230.56 2230.56
8 Employee Cost 249.24
Repairs & Maintenance 33.04
Admin & General Expenses 67.41
Total O&M Expenses 344.83 349.69 338.46
9 Depreciation 72.37 63.74 64.08
10 Interest & Finance charges
Interest on Loans 67.17 62.68 51.37
Interest on Working capital 51.11 37.74 37.77
Interest on belated
payment on PP Cost
0.00 0.29 0.00
Interest on consumer
deposits
38.30 35.55 35.55
Other Interest & Finance
charges
3.33 1.21 1.20
Less interest capitalised 2.51 1.30 2.32
Total Interest & Finance
charges
157.39 136.17 123.57
11 Other Debits 0.00 5.03 4.53
12 Exceptional Items -2.70
13 Net Prior Period Debit/Credit 0.00 0.00 -8.67
14 RoE 61.71 76.87 49.20
15 Taxation/MAT Credit 0.00 2.31 0.00
16 Funds towards Consumer
Relations/Consumer
Education
0.50 0.11 0.11
17 Other Income 95.97 47.74 46.25
ARR 2527.91 2816.74 2752.89
18 Surplus of FY14 carried
forward
86.00 0.00 0.00
19 Regulatory asset of FY16 &
FY17
101.02 0.00 0.00
lxxi
20 Carrying cost on Regulatory
asset of Rs.50.50 crores as
per TO dated 02.03.2015
0.00 0.00 6.06
21 Disallowance due to
prudence check of capex
1.89
22 Net Regulatory asset to be
recovered in FY17
-92.25
Net ARR 2448.80 2816.74 2758.95
The wheeled energy of 59.04 MU has been considered for computation of distribution losses.
lxxii
4.3.1 Gap in Revenue for FY16:
As against an approved ARR of Rs.2448.80 Crores, the Commission,
after the Annual Performance Review of MESCOM, decides to allow a
revised ARR of Rs.2758.95 Crores for FY16. Considering the revenue of
Rs.2363.21 Crores, the revenue gap for the year FY16 is Rs.395.74 Crores.
Thus, the Commission decides to carry forward the deficit of Rs.395.74
Crores of FY16 to the ARR for FY18, as discussed in the subsequent
Chapter of this Order.
lxxiii
CHAPTER – 5
REVISED ANNUAL REVENUE REQUIREMENT FOR FY18
5.0 Revised Annual Revenue Requirement (ARR) for FY18
MESCOM’s Application:
MESCOM in its application dated 30th November, 2016, has sought
approval of the Commission for the revised ARR for FY18. The summary
of the proposed revised ARR for FY18 is as follows:
TABLE – 5.1
Revised ARR for FY18-MESCOM’s Submission
Amount in Rs. Crores
Sl.
No. Particulars FY18
1 Energy at Gen Bus in MU 5585.97
2 Transmission Losses in % 3.37%
3 Energy at Interface in MU 5397.72
4 Distribution Losses in % 11.05%
Sales in MU
5 Sales to other than IP & BJ/KJ 3434.32
6 Sales to BJ/KJ 14.63
7 Sales to IP Sets 1352.32
8 Total Sales 4801.27
Revenue at existing tariff in Rs Crs
9 Revenue from Tariff and Misc Charges 2209.20
10 Tariff Subsidy from BJ/KJ 8.79
11 Tariff Subsidy from IP Sets 639.65
12 Total Existing Revenue 2857.64
Expenditure in Rs Crs
13 Power Purchase Cost 1863.68
14 Transmission charges of KPTCL 238.16
15 SLDC Charges 1.94
16
Power Purchase Cost including cost of
transmission 2103.78
17 Employee Cost 327.75
18 Repairs & Maintenance 46.89
19 Admin & General Expenses 81.17
20 Total O&M Expenses 455.81
21 Depreciation 87.45
Interest & Finance charges
21 Interest on Loans 72.78
22 Interest on Working capital 64.83
23 Interest on belated payment on PP Cost 0.00
lxxiv
24 Interest on consumer deposits 40.79
25 Other Interest & Finance charges 1.21
26 Less interest & other expenses capitalised 1.30
27 Total Interest & Finance charges 178.31
27 Other Debits 5.03
29 Extraordinary items -5.02
30 Net Prior Period Debit/Credit -11.58
31 Return on Equity 95.53
32
Funds towards Consumer
Relations/Consumer Education 0.50
33
Provision for contribution to P&G Trust (GoK
Liability) 239.88
34 Other Income 45.12
35 ARR 3104.57
36 Deficit for FY16 carried forward -453.52
Net ARR 3558.09
The MESCOM has requested the Commission to approve the revised
Annual Revenue Requirement of Rs.3558.09 Crores for FY18.
Considering the estimated revenue of Rs. 2857.64 Crores based on the
existing retail supply tariff, MESCOM has projected a revenue gap of
Rs. 700.45 Crores for FY18 along with the carried forward gap of
revenue of Rs. 453.52 Crores of FY16. In order to bridge this gap in
revenue, MESCOM, in its application has proposed increase in retail
supply tariff by 148 paise per unit in respect of all the categories of
consumers including BJ/KJ and IP set consumers for FY18.
5.1 Annual Performance Review for FY16:
As discussed in the preceding chapter of this Order, the Commission
has carried out the Annual Performance Review for FY16 based on the
audited accounts furnished by MESCOM. Accordingly, a deficit of
Rs.395.74 Crores of FY16 is carried forward in to the ARR of FY18.
5.2 Revised Annual Revenue Requirement for FY18:
The item-wise expenditure proposed by MESCOM and approved by
the Commission is discussed in this Chapter as follows:
5.2.1 Capital Investments for FY18:
The MESCOM has proposed a capital investment of Rs.595.40 Crores for
FY18, as against the approved capex of Rs.289.40 Crores in the MYT
lxxv
order dated 30th March, 2016. The details of Capital investment
program of the MESCOM for the FY18 are as follows:
Table –5.2
Capital investment for FY18- MESCOM’s Submission Amount in Rs.
Crores
Sl.
No Particulars
As
approved
in MYT filing
for FY18
Proposed
capex for
FY18
1
Extension & Improvement (Addl. DTCs, Link-
Lines, HT/LT Reconductoring, providing
intermediate poles, HVDS, etc.)
100.00 100.00
2 DTC Metering 0.25 0.25
3
Replacement of MNR / DC &
Electromagnetic meters by Static meters and
providing SMC meter protection box
wherever required.
5.00 5.00
4 Nirantara Jyothi Yojana 0.00 0.00
5 R-APDRP Programme 0.00 0.00
6 Replacement of faulty DTCs 4.00 40.00
7 Service Connections 40.00 40.00
8 Rural Electrification (General) 0.00 0.00
a. RGGVY (DDG) Programme 0.00 0.00
b. Electrification of Hamlets 2.00 2.00
c. Energization of IP sets (including providing
infrastructure of UA IP sets) 75.00 345.00
d. Kutir Jyothi 0.25 0.25
9 Tribal Sub Plan 0.00 0.00
a. Electrification of Tribal Colonies 1.50 1.50
b. Energization of IP Sets 0.75 0.75
c. Kutir Jyothi 0.05 0.05
10 Special Component Plan 0.00 0.00
a. Electrification of S.C. Colonies 1.00 1.00
b. Energization of IP sets 1.00 1.00
c. Kutir Jyothi 0.10 0.10
11 Tools & Plants and Computers 5.00 5.00
12 Civil Engineering Works 16.00 16.00
13 33 kV Sub stations & Line works 37.50 37.50
GRAND TOTAL: 289.40 595.40
Commission’s analysis and decision:
The MESCOM has proposed a capex of Rs.595.40 Crores for the FY18 as
against the approved capex of Rs.289.40 Crores in the MYT Order,
which amounts to an additional capex of Rs.306 Crores. In the
lxxvi
proposed capex, for “Energization of IP Sets, including providing
infrastructure to regularized Un-authorized IP Sets”, the MESCOM has
proposed an amount of Rs.345 Crores as against Rs.75 Crores
approved in the MYT Order. For “Replacement of faulty Distribution
Transformers”, Rs.40 Crores is indicated as against the MYT approved
capex of Rs.5 Crores.
In respect of “Energization of IP Sets, including providing infrastructure
to regularized Un-authorized IP Sets”, MESCOM has achieved a capex
of Rs.51.44 Crores for FY16 (approved amount-Rs.50 Crores) and
Rs.46.55 Crores only during FY17 till the end of September, 2016
(approved amount-Rs.75 Crores). Keeping these facts in view, it is
unlikely that, MESCOM would achieve a capex of Rs.345 Crores during
FY18. Also it is observed that, the overall capex of MESCOM in any year
has not crossed Rs.300 Crores. Despite this, MESCOM has proposed an
ambitious capex of Rs.345 Crores in one category of work for FY18,
which is unlikely to be achieved. Hence, MESCOM’s proposal to incur
Rs.345 Crores towards energization and providing infrastructure to IP
sets is not justified and not acceptable.
Further, in the respect of “Replacement of faulty Distribution
Transformers”, it is noted that, MESCOM has indicated a capex of Rs.40
Crores as against the Commission approved capex of Rs.5 Crores for
FY18. MESCOM should note that, only the failed transformers which are
beyond repairs due to burning or total damage should be scraped
and replaced by new transformers. The investment on such new
transformers can be accounted as capital expenditure, but the
charges incurred for the repairs of failed Transformers are to be met
with Revenue Expenditure. Further, MESCOM should note that, the
scrapped transformers are not large in numbers, as compared to the
total number of failed transformers and may not cost more than Rs.5
Crores per year. Hence, the proposed increase of capex in this
category is not justified.
In respect of DTC metering, the MESCOM has stated in the replies to
the preliminary observations that, 66% of the DTC metering and
replacing of electromechanical meters by electronic meters is
lxxvii
completed. The MESCOM needs to focus on DTC-wise energy audit
and identify and rectify the high loss making DTCs and feeders with a
view to bring down the distribution loss below the target level.
The MESCOM in its replies to the preliminary observations, has not
stated as to whether, it has followed the “Capital Expenditure
Guidelines for ESCOMs” issued by the Commission. It should be noted
that, the proposed capex for every year should be commensurate
with:
a) The network expansion required,
b) Reliability of power to be improved
c) The target loss reduction trajectory
Also, the MESCOM should mandatorily follow the “Capital Expenditure
Guidelines for ESCOMs” in which the capital investment planning
process, prioritization and post commissioning analysis to be adopted
by the ESCOMs, are elaborated. The Commission has been directing
the ESCOMs to conduct energy audit and prepare a list of high loss
making 11kV feeders and take up strengthening works to reduce
energy losses. The MESCOM should also move in this direction and list
the high loss making feeders based on the input energy to the feeders
and sale of energy in that feeder for the financial year. The MESCOM
should prepare the list of 11kV feeders having losses above the target
level, in the descending order, prioritize such projects and take up
execution in order to address the issue of high losses and reduce the
distribution losses to the desired levels.
In light of the above discussions and keeping in view that, MESCOM
may not be in a position to spend the proposed Rs.345 Crores for
“Energization of IP Sets, including providing infrastructure to regularized
Un-authorized IP Sets”, and Rs.40 Crores for “Replacement of faulty
Distribution Transformers”, the Commission decides to allow a Capex
of Rs.289.40 Crores, as already approved in the MYT Order, subject to
prudence check and directs that, MESCOM should meet any
additional capex required during FY18, only through re-appropriation
of approved amounts for the prioritized category within the overall
lxxviii
capex and not to seek the approval of the Commission in the middle of
the year for additional/higher capex.
5.2.2 Sales Forecast for FY18:
a) Sales- Other than IP Sets & BJ/KJ:
The MESCOM in its tariff application has stated that for the FY18, the
estimates of installations and energy has been done based on CAGR
method. It is stated that, the number of installations and energy sales
projections in respect of LT-2, HT-2b, HT2(c)and HT-4 categories have
been estimated on the basis of three year CAGR for the period from FY
14 to FY 16 and for LT-3, LT-5 and LT-6 on four year CAGR for the period
FY13 to FY16. Further, it is stated that the number of installations in case
of BJ/KJ and IP sets has been estimated based on three-year CAGR
and sales to these categories is estimated based on the specific
consumption of the FY-16. For HT-1 category, the MESCOM has
estimated the number of installations and sales based on five-year
CAGR. For HT-2a, the number of installations is estimated based on five
year CAGR, whereas the sales are estimated based on the FY-16
growth over the FY-15, after excluding the sales of twelve EHT
installations which had shown negative growth. For these installations,
the MESCOM has retained the sales for the FY18 at the FY16 level. Also,
wherever the CAGR is negative, the MESCOM has retained the number
of installations and sales at the FY16 levels.
The preliminary observations of the Commission on sales forecast for
FY18 and the replies of MESCOM are discussed below:
i. The MESCOM has not proposed any growth in the number of
installations for HT-3 category even though the CAGR is positive and
similarly, for HT-4 category, though the previous year’s growth is
positive. The MESCOM shall explain the reasons for the same.
As per MESCOM’s reply, the growth in these categories is
inconsistent and therefore, the number of installations as at the end
of FY16 is retained for FY18 also. The Commission has noted the
replies furnished and the approach of the Commission in estimating
lxxix
the number of installations is discussed in the subsequent
paragraphs.
ii. The sales growth rate considered for LT-2a and HT-1 categories
appears to be slightly lower considering the past trends. MESCOM
in its replies has stated that after analyzing the CAGRs for different
years, it has considered 3-year CAGR as reasonable.
iii. The growth rate considered for HT-2a, HT-2b and HT-4 categories
appears to be higher considering past trends. Since the number of
installations for HT-4 categories has been retained at the FY-16 level,
the sales to this category should also have been retained at the FY-
16 level.
MESCOM in its replies has stated that after analyzing the CAGRs for
different years, it has considered 3-year CAGR as reasonable for
HT-2b and HT-4 categories. Regarding HT-2a, MESCOM has
reiterated its explanation furnished in the filing.
iv.The Commission had directed MESCOM to furnish the number of
installations and sales, category-wise in a specified format to
validate the estimates for FY-18. MESCOM has furnished the same.
v. The Commission had observed that, the number of installations as
on 31.03.2016 and as on 31.03.2015 furnished in the replies to
preliminary observations did not tally with the data for the relevant
years as per D-2 formats. Similarly, the sales for HT-2a category
furnished in the replies for FY16, did not tally with the data as per D-
2 format. Hence, the Commission had directed MESCOM to
reconcile category wise data.
MESCOM has submitted the revised data in its replies to the
rejoinder.
Commission’s approach for estimating the number of installations
and sales for FY18:
i) No. of Installations:
lxxx
The methodology adopted by the Commission to estimate the
number of installations and sales to categories other than BJ/KJ and
IP sets is discussed below:
While estimating the number of installations (excluding BJ/KJ and
IP), the following approach is adopted:
a. The base year number of installations for FY17 is modified duly
validating the revised estimate furnished by MESCOM in the current
filing and the data available as on 30.11.2016. The Commission has
validated both the number of installations and sales to various
categories considering the actuals as on 30.11.2016 and has
estimated the number of installations and sales for the remaining
period reasonably, keeping in view the number of installations and
sales as on 31.03.2016 also. Accordingly, the base year estimation
has been revised which has an impact on the estimates on the
number of installations and sales for the year FY18.
b. Wherever the number of installations estimated by MESCOM for the
FY18 is within the range of the estimates based on the CAGR for the
period FY11 – FY16 and for the period FY13 - FY16, the estimates of
MESCOM are retained.
c. Wherever the number of installations estimated by MESCOM for the
FY18 is lower than the estimates based on the CAGRs for the period
FY11 – FY16 and for the period FY13 - FY16, the estimates based on
the lower of the CAGRs are considered.
d. Wherever the number of installations estimated by MESCOM for
FY18 is higher than the estimates based on the CAGRs for the
period FY11 – FY16 and for the period FY13 - FY16, the estimates
based on the higher of the CAGRs are considered.
e. For LT 4(b), the number of installations for FY-18 is retained at FY-17
half-year data furnished by MESCOM, as the year end installations
estimated by MESCOM for FY-17 is lower than the half-year figure.
lxxxi
f. For LT-7, HT-2(c) and HT-5 categories, the estimates of MESCOM are
retained, as the growth rate for these categories is not consistent.
Based on the above approach, the total number of installations
(excluding BJ/KJ and IP) estimated by the Commission for FY 18 is
1806710 as against 1806971 proposed by MESCOM.
ii) Energy Sales:
For categories other than BJ/KJ and IP sets, generally the sales are
estimated considering the following approach:
a. The base year sales for FY17 as estimated by MESCOM are
validated duly considering the actual sales up to November,
2016 and modified suitably as stated earlier.
b. Wherever the sales estimated by MESCOM for the FY18 is within
the range of the estimates based on the CAGR for the period
FY11 – FY16 and for the period FY13 - FY16, the estimates of
MESCOM are retained.
c. Wherever the sales estimated by MESCOM for the FY18 is lower
than the estimates based on the CAGRs for the period FY11 –
FY16 and for the period FY13- FY16, the estimates based on the
lower of the CAGRs are considered.
d. Wherever sales estimated by MESCOM for the FY18 is higher
than the estimates based on the CAGRs for the period FY11 –
FY16 and for the period FY13 - FY16, the estimates based on the
higher of the CAGRs are considered.
e. For LT4(b) and LT 4(c), the sales are worked out considering the
specific consumption of FY-16.
lxxxii
f. For LT-7, HT-2(c) and HT-5 categories, the estimates of MESCOM
are retained, as the growth rate for these categories is not
consistent.
g. For HT2(a) category, the sales estimate based on the analysis of
open access impact is considered. It is noted that based on
methodology specified at paras b, c and d above, the sales
growth would be negative, in spite of positive growth in the
number of installations. Therefore, the sales estimate based on
the analysis of open access impact is considered as reasonable
for FY18.
h. For HT2(b) category, based on the Open Access transaction
impact analysis, the sales growth would be lower indicating a
negative growth. Therefore, estimates based on the
methodology specified at paras b, c and d above, is
considered as reasonable.
Based on the above approach, the sales (excluding BJ/KJ and IP)
estimated and approved by the Commission for FY18 is 3317.33 MU,
as against 3316.31 MU proposed by MESCOM.
b. Sales to BJ/KJ and IP sets:
i) Sales to BJ/KJ:
The electricity consumption to this category up to 18 units per
installation per month hitherto was being subsidized by the
Government of Karnataka and any installation under this
category consuming more than 18 units per month was billed
under relevant LT 2(a) category. However, the Government of
Karnataka in its Budget for 2017-18 has announced that it would
extend the subsidy to BJ/KJ installations consuming upto 40 units
per installation per month. Therefore, the Commission has
reckoned the above and has worked out the subsidy
accordingly.
lxxxiii
Considering the specific consumption and the number of
installations, for FY16, for installations consuming upto 18 units
and above 18 units as per the actual data furnished by
MESCOM, the total sales estimated for this category for FY18
works out to 44.92 MU. Considering the total number of BJ/KJ
installations of 209118 for FY18 as proposed by MESCOM, the
specific consumption works out to 17.90 units per installation per
month which is less than 40 units per installation per month
announced by the Government for the purpose of subsidy.
Thus, the entire consumption of 44.92 MU is considered for the
purpose of estimating the subsidy for this category. However,
the MESCOM while claiming the subsidy shall consider only such
installation which consume upto 40 units per installation per
month and any installation under this category consuming more
than 40 units shall be billed under the relevant LT 2(a) category.
II. IP-set sales projections for FY18:
The Commission, in its Tariff Order dated 30th March, 2016, had
approved the specific consumption of IP-sets as 4,597
units/installation/annum for the control period of FY17 to FY19.
The MESCOM has reported total sales of 1,197.43 MU with
2,78,171 numbers of IP-set installations serviced during FY16,
which translates into a specific consumption of 4,447 units /
installation / annum, for the FY16. It is observed that the specific
consumption worked out based on the sales reported by the
MESCOM for the FY16 is less than the approved specific
consumption by150 units /installation/annum. The approved
sales quantity for the FY16 was 1,191.26 MU. This indicates an
increase in sales to an extent of 6.17 MU to that of approved
quantum for the FY16.
The Commission notes that the MESCOM has reported a specific
consumption of 4,447 units/installation/annum on the basis of IP-
sales reported by it for the FY16. Therefore, the Commission decides
lxxxiv
to continue the specific consumption at 4,447 units / installation /
annum, as reported by the MESCOM during the FY16, for estimation
of IP-set consumption for the FY18 also.
The Commission also notes that the MESCOM has projected the
number of IP-set installations as 2,95,112 and 3,13,084 for FY17 and
FY18 respectively in its Tariff filing. It is also noted that number IP-set
installations serviced in FY17 from April, 2016, upto November, 2016,
as reported by the MESCOM is 2,84,736 which is well within the
estimated figures for FY17. Hence, it is reasonable to accept the
number of installations reported by the MESCOM for FY18.
Accordingly, the Commission has considered the number of IP-sets
as furnished by the MESCOM for the FY18 without any modifications.
Hence, based on the estimated number of installations for FY17 and
FY18, the mid-year number of installations is calculated and the
sales to IP-set category of consumers for FY18 are indicated as
below:
TABLE-5.3
Mid-year No. of IP set Installations i) ii)
Particulars As filed by the MESCOM
As approved
by the
Commission
FY17 FY18 FY18
No of installations 2,95,112 3,13,084 3,13,084
Mid-Year no. of
installations
3,04,098 3,04,098
Specific consumption in
units/installation/annum
4,447 4,447
Sales in MU 1,352.32 1,352.32
Accordingly, the Commission approves 3,13,084 as the number of IP-
set installations and energy sale of 1,352.32 MU for the FY18. This
approved IP-set consumption is with the assumption that the
Government of Karnataka would release subsidy to fully cover the
approved quantum of IP-sales. However, if there is any reduction in
the subsidy allocation by the GoK, the quantum of supply/sales to IP-
sets of 10 HP and below shall be proportionately regulated.
lxxxv
During the course of Public hearing held by the Commission, the
representatives of certain Farmers’ Association have suggested that
the Government may consider paying the subsidy directly to the
farmers against their IP Set consumption. They have also expressed
that meters could be installed to their IP Sets, by the ESCOMs to whom
energy charges would be paid by the farmers.
The Commission is of the view that implementing the suggestion of
direct remittance of subsidy to the farmers would encourage metering
of the IP Sets enabling proper accounting of energy and also facilitate
accurate computation of losses in the distribution system. The
Commission notes that the Government of Karnataka would have to
formulate suitable policy in the matter.
Further, it is noted here that the MESCOM was directed to take up GPS
survey of IP-sets in order to identify the defunct/dried up/not-in-use
installations in the field and to take necessary action to arrive at
correct number of IP-sets by deducting such IP-sets from its account on
the basis of GPS survey report. The MESCOM has reported that this
work is in progress and likely to take some more time to complete this
exercise in its jurisdiction. In this regard, the MESCOM is directed to
complete the GPS survey of IP-sets at the earliest and compliance
thereon shall be submitted to the Commission, immediately thereafter.
In view of pendency of the GPS survey of IP-sets by the MESCOM, the
number of installations estimated for FY17 as well as for FY18 are
subject to change, based on the GPS survey. Accordingly, on
completion of the GPS survey, the MESCOM shall arrive at correct
number of IP-sets in the field duly deducting from its account the
number of defunct/dried up/not-in-use wells based on the GPS survey
results. Therefore, on account of this, any variation in sales due to
change in the number of installations in the FY18 would be trued up
during the Annual Performance Review, for FY18.
lxxxvi
Further, the MESCOM shall consider the actual meter readings of
individual IP-set installations duly ascertaining the correct number of
such meters working in the field and report the consumption of IP-sets
on the basis of energy meter reading data from IP-set installations
every month, to the Commission, as this would be an accurate
measure of IP-set consumption compared to assessing the
consumption based on the meter readings of sample DTCs feeding
predominant IP-set loads.
Based on the above discussions, the category-wise approved number
of installations and sales for the year FY 18 vis-à-vis the estimates made
by MESCOM is indicated as follows:
lxxxvii
TABLE-5.4
Approved Sales for FY18
Category
FY18 MESCOM’s
estimate FY18 Approved
Installations Sales Installations Sales
No. MU No. MU
LT-2a 1509300 1417.4 1509300 1420.25
LT-2b 3424 17.48 3435 17.48
LT-3 207132 375.64 206424 375.65
LT-4 (b) 179 0.92 182 0.93
LT-4 (c) 3296 6.4 3727 7.24
LT-5 31878 142.6 31712 140.55
LT-6-WS 14175 122.74 14175 122.75
LT-6-PL 19123 68.7 19284 69.7
LT-7 16506 19.63 16506 19.63
HT-1 91 88.95 91 88.26
HT-2 (a) 829 601.21 829 614.81
HT-2 (b) 639 212.69 638 196.74
HT2C 309 204.34 309 204.34
HT-3(a)& (b) 24 8.61 32 11.25
HT-4 46 20.01 46 18.78
HT-5 20 8.99 20 8.99
Sub-Total other than
BJ.KJ & IP sets 1806971 3316.31 1806710 3317.33
BJ/KJ 209118 44.93 209118 44.92
IP 313084 1352.32 313084 1352.32
Sub Total BJ/KJ & IP
sets 522202 1397.25 522202 1397.25
Total 2329173 4713.56 2328912 4714.57
In addition to the above sales of 4714.57 MU, the Commission approves
sales to KPCL at 9.59 MU and to MSEZ at interface point of 85.33 MU for
FY18.
5.2.3 Distribution Losses for FY18:
MESCOM’s Submission:
lxxxviii
As per the audited accounts for FY16, the MESCOM has reported
distribution losses of 11.50% as against an approved loss level of 11.25%.
The Commission in its Tariff Order dated 30th March, 2016 had fixed the
target level of losses for FY18 at 11.05%. MESCOM in its application has
proposed to retain the loss levels of 11.05% for FY18.
Commission’s Analysis and Decisions:
The performance of MESCOM in achieving the loss targets set by the
Commission in the past six years is as follows:
TABLE – 5.5
Approved & Actual Distribution Losses-FY11 to FY16
Figures in % Losses
Particulars FY11 FY12 FY13 FY14 FY15 FY16
Approved
Distribution losses
12.50 12.10 12.00 11.75 11.50 11.25
Actual distribution
losses
13.07 12.09 11.88 11.93 11.56 11.50
The Commission has allowed the capex as proposed by MESCOM and
capital expenditure is consistently being incurred by the MESCOM.
Investments in improvements of the existing distribution system enable
the MESCOM to reduce the distribution losses besides increasing the
reliability and quality of power supply to end consumers.
The Commission, in its preliminary observations had stressed on the
need for further reduction in the distribution loss levels proposed by the
MESCOM, for FY18, duly considering the past and the present capex.
However, the MESCOM has not proposed any changes to its proposed
loss levels.
Hence, based on the achievement made by MESCOM in reduction of
losses in the previous years and the current loss levels, besides
considering the capex incurred so far along with the proposed capex
for FY18, the Commission decides to fix the following distribution loss
targets for FY18:
lxxxix
TABLE – 5.6
Approved Distribution Losses for FY18
Figures in % Losses
Particulars FY18
Upper limit 11.25
Average 11.05
Lower limit 10.85
5.2.4 Power Purchase for FY18
MESCOM’s Submission:
MESCOM has submitted the power purchase requirement along with
its cost including the transmission charges and SLDC charges, in D-1
Format. MESCOM has sought approval of the Commission for purchase
of power to an extent of 5585.97MU at Cost of Rs 2103.78Crores for the
FY18, which includes transmission charges and SLDC charges
The cost of power purchase has been considered by the MESCOM as
per the norms defined in the contracts (PPAs)/Regulations and based
on the Tariff indicated by the KPCL, for its Stations. In respect of Central
Generating Stations, DVC Stations and UPCL Stations, the cost is
considered as per the tariff determined by the CERC.
Table-5.7
Power Purchase quantum and Cost as filed by MESCOM for FY18
Source of Power Energy in MU Cost in Rs. Crs
Cost in
Rupees Per
Unit
KPCL Hydel Energy 1487.56 103.28 0.69
KPCL Thermal
Energy
864.32 380.34 4.40
CGS Energy 1629.04 579.14 3.55
IPP 598.39 253.73 4.24
NCE 897.20 388.16 4.32
Other State Hydel 2.47 4.30 17.38
Short Term/Medium
term
106.99 48.15 4.50
KPTCL Transmission
charges
240.1
PGCIL Charges 106.30
POSOCO Charges 0.28
xc
Total 5585.97 2103.78 3.77
Commission’s Analysis and Decisions:
The energy requirement of the ESCOMs, including MESCOM is being
met by Karnataka Power Corporation Limited (KPCL) Generating
Stations, Central Generating Stations(CGS), Major Independent Power
Producers (IPPs) and Minor Independent Power Producers (RE sources)
through long term Power Purchase Agreements.
The Commission has considered the availability of energy as furnished
by KPCL for its generation and by SRPC/CEA in respect of Central
Generating Stations (CGS). The availability of CGS stations is based on
the share of Karnataka, as notified by MoP from time to time. However,
the availability of energy from CGS thermal Generating units has been
considered duly limiting the quantum of energy as per the requirement
of the ESCOMs, to meet the sales target on the basis of merit Order
dispatch.
The energy availability for FY18 from the upcoming thermal projects of
750MW unit#3 of BTPS, 2X800 MW units of YTPS and 1X800MW of Kudagi
plant of NTPC, has not been considered by the MESCOM, since these
units are under trial Operation and are yet to stabilize.
The Commission has decided to consider the energy availability from
these units in line with the LGBR furnished by the NTPC for the 1X800
MW unit of Kudagi Power Plant for the FY18. However, the energy has
been considered from these units by limiting the quantum of energy as
per the requirement of the ESCOMs, to meet the sales target on the
basis of merit order despatch. It is expected that any surplus energy
available from tied up sources of energy would be traded by the
ESCOMs through PCKL on commercial principles. Similarly, any
requirement over and above the quantum approved in this Tariff Order
shall be procured from the tied up sources only.
While approving the cost of power purchase, the Commission has
determined the quantum of power from various sources in
accordance with the principles of merit order schedule and despatch
based on the ranking of all approved sources of supply, according to
the merit order of the variable cost.
xci
After a detailed analysis of the rates claimed by the MESCOM, the
Commission has arrived at the power purchase cost to be allowed in
the ARR for the FY18.
The fixed charges and the variable charges for the Central Generating
Stations, UPCL Stations and the DVC Stations are reckoned based on
the Tariff determined by the CERC and the CERC norms. The
transmission charges payable to PGCIL are arrived at with 5% annual
escalation on the base figure for FY16.
The fixed charges and the variable charges for the State owned
Thermal and Hydel Power Stations are based on the tariff approved by
the Commission and the norms in the PPAs wherever the tariff is
regulated as per the PPAs. In respect of upcoming new stations only
variable charge has been considered.
The variable costs of State thermal stations and UPCL are considered
based on the recent power purchase bills admitted by the BESCOM
duly keeping in view the substantial increase in the fuel costs. This is
subject to adjustment in the FAC exercise/Annual Performance Review
of FY18.
The ESCOM-wise share of the quantum of power from different sources
of generation is as per the allocation given by the Government of
Karnataka.
The Source wise approved power purchase quantum for the State (of
all ESCOMs) and its cost is as under:
TABLE-5.8
Approved Power Purchase Quantum & Cost- For the State
Source of Power
Power Purchase
Energy
(MU)
Amount in
Rs. Crores
Cost/Unit
in Rs.
KPCL Thermal Energy 16071.68 6963.89 4.33
CGS Energy 20542.91 7283.67 3.55
IPP 6712.00 3288.88 4.90
KPCL Hydel Energy 11668.46 926.33 0.79
OTHER HYDRO 119.37 49.54 4.15
NCE 7165.41 2980.86 4.16
NTPC Bundled power 582.21 258.46 4.44
Power purchase from Co gen 1300.00 451.10 3.47
xcii
Short term Power Purchase 1120.00 467.04 4.17
Short term Purchase from MSEDCL 294.00 106.43 3.62
TRANSMISSION CHARGES
PGCIL CHARGES
1066.00
KPTCL CHARGES
2753.70 SLDC
24.77
POSOCO CHARGES
3.48
TOTAL INCLUDING TRANSMISSION
&
SLDC CHARGES 65576.04 26624.15 4.06
The Source-wise approved Power Purchase quantum and cost of
MESCOM is as under:
TABLE-5.9
Approved Power Purchase Cost of MESCOM for FY18
Source of Power
Power Purchase Cost as filed
by MESCOM
Power Purchase Cost as
approved by the
Commission
Energy in
MU
Cost in
Rs Cr
Per
Unit
Cost in
RS
Energy in
MU
Cost in
Rs Cr
Per
Unit
Cost
in RS
KPCL Hydel Energy 1487.56 103.28 0.69 1500.33 105.04 0.70
KPCL Thermal Energy 864.32 380.34 4.40 1082.52 468.61 4.33
CGS Energy 1629.04 579.14 3.55 1724.17 611.32 3.55
UPCL 598.39 253.73 4.24 205.28 100.59 4.90
Renewable Energy 897.20 388.16 4.32 793.745 318.149 4.00
Other State Hydel 2.47 4.30 17.38 10.02 4.16 4.15
Short Term/Medium
term
106.99 48.15 4.50 267.81 103.08
PGCIL Charges 106.30 85.53
KPTCL Charges 240.1 216.20
SLDC & POSOCO
Charges
0.28 2.22
Total 5585.97 2103.78 3.77 5583.87 2014.90 3.61
The details of station-wise / Source-wise power purchased quantum & cost for
the State and MESCOM are shown in Annexure-I & Annexure-II respectively.
5.2.5 RPO target for FY18:
1. The Commission had directed MESCOM to submit the estimates for
complying with solar and non-solar RPO for 2017-18, including cost
implication for purchasing RECs, if any.
MESCOM in its revised replies dated 10.02.2017, has furnished the
estimates as detailed below:
xciii
TABLE-5.10
Estimates of RPO for FY18
Estimated Energy Purchase-MU 5585.78
Estimated Non-Solar energy purchase –MU 551.04
Estimated Non-Solar compliance as percentage of energy
purchase*
9.87%
Estimated Solar energy purchase –MU** 299.77
Estimated Solar compliance as percentage of energy purchase 5.37%
* MESCOM in its replies dated 10.02.2017 has requested to adjust excess solar energy against Non-Solar RPO. **MESCOM in its replies dated 10.02.2017 has informed that, 299.77 MU includes 10.04 MU of solar out of the NTPC bundled power of 53.83 MU.
2. Further, the Commission had directed MESCOM to furnish certain
details, with respect to the renewable energy purchase estimates
made for the FY18.
MESCOM in its replies has furnished the following details:
TABLE-5.11
Anticipated Additional RE Capacity for FY18
Source
Capacity
under PPA
in MW as on
30.11.2016
Anticipated MW
capacity
addition under
PPA during the
remaining
period of FY17
Anticipated
capacity
addition under
PPA during
FY18
Wind 149.35 0 0
Mini-hydel 168.58 0 0
Co-generation 0 0
Biomass 0 0
Waste to
Energy
0 0
Solar 47 0 99
3. The Commission had directed MESCOM to furnish certain data on
solar power projects. MESCOM has furnished the details as under:
xciv
TABLE-5.12
Anticipated Additional RE Energy for FY18
Type of Solar Plant
Capacity
in
MWp
Estimated
Energy
contribution
and cost for
FY17
Estimated Energy
contribution and
cost for FY18
Qty
(MU)
Cost
(Rs
Crs)
Qty
(MU)
Cost
(Rs.
Crs)
Solar Rooftop plants
of < 500KW
11.50 3.91 3.74 13.36 10.56
Solar Rooftop plants
of >500KW
4.26 0 0 4.14 2.15
1-3 MW Projects
allotted to Farmers by
KREDL.
9* 0 0 11.23 9.25
20 MW Projects Taluk
wise issued by KREDL.
70 0 0 48.55 40.01
Other MW scale
projects
67* 64.13 52.84 92.10 75.89
NTPC-VVNL bundled 0 9.92 9.92 9.92 8.17
Solar park- Pavagada 48* 0 46.60 46.60 38.40
Total 209.76 77.96 225.90 225.90 184.43
*Projects expected in FY18
Commission’s observations on MESCOM’s RPO Submissions:
The Commission notes that:
a. As per D-1 format, the non-solar renewable energy is estimated as
551.04 MU.
b. Even though, MESCOM has not considered any addition of non-
solar projects during FY17 and FY18, in D-1 format it has
considered 28.91 MU under new Mini-Hydel Projects. MESCOM
has stated that 5-Mini-hydel projects with capacity of 49.5 MW
are pending for commission since long time and therefore, it has
considered energy from these projects based on 20% CUF for
FY18.
c. With the estimated energy of 5585.78 MU for FY18 and considering
excess solar energy of 229.95 MU, MESCOM as per its filing would
meet of Non-solar RPO of 13.98% as against target of 12% for FY18.
As far as solar RPO is concerned, the Commission notes that:
a. As per D-1 format, the solar energy is estimated as 299.77 MU.
xcv
b. With the estimated energy of 5585.78 MU, MESCOM would meet
solar RPO of 5.37% as against target of 1.25% for FY18.
c. In replies to the preliminary observations, MESCOM has estimated
solar energy as 225.90 MU, which is not in tune with the data
furnished in D-1 format. Considering 225.90 MU, MESCOM would
meet solar RPO of 4.04%.
Commission’s Analysis:
The Commission has approved power purchase quantum of 5583.87
MU for FY18. The Non-solar RPO target at 12% would be 670.06 MU. The
Commission has approved purchase of 657.72 MU from non-solar RE
sources. Thus, MESCOM would be able to procure 657.72 MU as against
an estimated RPO of 670.06 MU, resulting in shortfall of 12.34 MU, which
could be met by the anticipated surplus of solar energy of 126.68 MU,
as discussed later. Therefore, the need for purchasing RECs may not
arise to meet MESCOM’s non solar RPO.
However, in case there is a shortfall based on the actuals, MESCOM
may purchase RECs at the market rates, which would be considered
by the Commission in the APR of FY18.
The Commission has approved power purchase quantum of 5583.87
MU for FY18. The Solar RPO target at 1.25 % would be 69.80 MU. The
Commission has approved purchase of 196.48 MU of Solar energy.
Thus, MESCOM would exceed the solar RPO by 126.68 MU, which shall
be utilized to meet the shortfall in non-solar RPO. In case, there is any
need to buy Solar RECs to fully meet the solar RPO, the cost thereon
would be factored in the APR of FY18.
5.2.6 O & M Expenses for FY18:
MESCOM’s Proposal:
The MESCOM, in its application, has considered actual O&M expenses
for FY15 as the base value with the weighted average inflation index of
7.24% and consumer growth index of 4.13% and efficiency factor of 1%
as being considered by the Commission in its Tariff Order dated 30th
March, 2016.
xcvi
Accordingly, MESCOM has claimed the O&M expenses of Rs.567.63
Crores which includes normative plus additional employee cost of
Rs.23.84 Crores on account of recruitment of 408 employees during
FY18. Further, the MESCOM has considered an amount of Rs.239.88
Crores as MESCOM portion of liability towards pension and gratuity as
per the instructions of the Energy Department, Government of
Karnataka vide letter No. EN 26 PSR 2016/ P3 dated 16th September,
2016.
Based on the above, the MESCOM has sought the O & M expenses for
FY18 as detailed below:
TABLE – 5.13
Revised O&M Expenses for FY18- MESCOM’s Submission
Amount in Rs.Crores
Sl.
No. Particulars FY18
1 Employee cost 303.91
2 Other Expenses (Administrative and
General expenses)
81.17
3 Repairs and Maintenance expenses 46.89
4 Contribution to P&G Trust – MESCOM
Portion of liability
239.88
5 Additional Employee Cost due to
recruitment
23.84
Total O & M Expenses 695.69
Commission’s analysis &decision:
The Commission in its MYT Order dated 30th March, 2016 while deciding
the ARR for each year of the control period FY17-19, had approved
O&M expenses of Rs. 432.40 Crores for FY18 based on the actual O&M
expenses incurred in FY15, three years compounded annual growth
rate (CAGR) of consumers of 4.13% and weighted inflation index of
7.24%. The approved O&M expenses for FY18 were as follows:
xcvii
TABLE-5.14
Approved O&M Expenses for FY18 as per Tariff Order dated 30th March,
2016
Particulars FY16 FY17 FY18
No. of Installations 2246171 2342309
CGI based on 3 Year CAGR 4.04% 4.13%
Weighted Inflation index 7.24% 7.24%
Base Year O&M expenses (as per
actuals of FY15)-Rs. Crs. 355.27
Total O&M Expenses-Rs. Crs 391.78 432.40
As per the norms specified under the MYT Regulations, the O & M
expenses are controllable expenses and the distribution licensee is
required to incur these expenses within the approved limits.
The Commission notes that, the MESCOM has claimed additional O&M
expenses of Rs.23.84 Crores for the proposed recruitment of employees
during FY18.
The Commission is of the view that additional employee cost due to
recruitment during FY18 could be factored only after being incurred by
the distribution licensee.
In view of the above discussion, the Commission has computed the O
& M expenses for FY18 duly considering the actual O & M expenses of
FY16 as per the audited accounts (being the latest data available as
per the audited accounts) to arrive at the O & M expenses for the
base year i.e. FY16. The actual O& M expense for FY16 is Rs.350.82
Crores inclusive of contribution to P&G Trust. Considering the
Wholesale Price Index (WPI) as per the data available from the Ministry
of Commerce & Industry, Government of India and Consumer Price
Index (CPI) as per the data available from the Labour Bureau,
Government of India and adopting the methodology followed by
CERC with CPI and WPI in a ratio of 80 : 20, the allowable annual
escalation rate for FY18 is 7.71%.
xcviii
For the purpose of determining the normative O & M expenses for FY18,
the Commission has considered the following:
e) The actual O & M expenses incurred as per the audited accounts
inclusive of contribution to the Pension and Gratuity Trust to
determine the O & M expenses for the base year FY16.
f) The three year compounded annual growth rate (CAGR) of the
number of installations considering the actual number of
installations as per the audited accounts up to FY16 and as
projected by the Commission for FY17 and FY18.
g) The weighted inflation index (WII) at 7.71%.
h) Efficiency factor at 1% as considered in the MYT Order.
The above said parameters are computed duly considering the same
methodology as being followed in the earlier Tariff Orders of the
Commission and the relevant Orders issued by the Commission on
Review Petitions. The MESCOM’s claim of liability of Rs.239.88 Crores
towards pensions and gratuity is dealt in later portion of this chapter.
Accordingly, the normative O & M expenses for FY18 are as follows:
TABLE – 5.15
Approved O & M expenses for FY18
Particulars FY16 FY17 FY18
No. of Installations 2237494 2328912
CGI based on 3 Year CAGR 3.90% 3.93%
Weighted Inflation index 7.71% 7.71%
Base Year O&M expenses (as per actuals of
FY16)-Rs. Crs. 350.82
Total allowable O&M Expenses-Rs. Crs 429.30
Since, the base year data includes the O & M expenses inclusive of
contribution to the P & G Trust, the Commission has not considered
allowing contribution to the P & G Trust separately.
Thus, the Commission decides to approve O&M expenses of Rs.429.30
Crores for FY18.
xcix
5.2.7 Depreciation:
MESCOM’s Proposal:
The MESCOM, in its application has claimed the depreciation of
Rs.87.45 Crores for FY18 after deducting deprecation on assets created
out of grants and consumer contribution as detailed below:
TABLE – 5.16
Depreciation-FY18- MESCOM’s Submission
Amount in Rs.Crores
Particulars FY18
Buildings 1.46
Civil 0.15
Other Civil 0.03
Plant & M/c 17.44
Line, Cable Network 67.99
Vehicles 0.12
Furniture 0.22
Office Equipment 0.04
Total 87.45
Commission’s analysis and decision:
The Commission, in accordance with the provisions of the MYT
Regulations and amendments issued thereon, has determined the
depreciation for FY18 considering the following:
a) The actual rate of depreciation of category--wise assets has been
determined considering the depreciation and gross block of
opening and closing balance of fixed assets, as per the audited
accounts for FY16.
b) The actual rate of depreciation, so arrived at, is considered to allow
the depreciation on the gross block of fixed assets projected by
MESCOM, in its application for FY18.
c
c) The depreciation on account of assets created out of consumers
contribution / grants are deducted based on the opening and
closing balance of such assets duly considering the addition of
assets as proposed by the MESCOM, at the weighted average rate
of depreciation as per actuals in FY16.
Accordingly, the depreciation for FY18 is arrived at as follows:
TABLE – 5.17
Approved Depreciation for FY18
Amount in Rs. Crores
Particulars FY18
Buildings 1.51
Civil 0.17
Other Civil 0.15
Plant & M/c 15.92
Line, Cable Network 61.44
Vehicles 0.15
Furniture 0.21
Office Equipments 0.04
Total 79.60
Thus, the Commission decides to approve an amount of Rs.79.60 Crores
towards depreciation for FY18.
5.2.8 Interest and Finance Charges:
a) Interest on Capital Loans:
MESCOM’s proposal:
MESCOM in its application has stated that, based on the approved
capex of Rs.289.40 Crores for FY18 in the Tariff Order dated 30th
March,2016, the capital loan requirement is projected at normative
levels of 70% of the capex amounting to Rs. 202.58 Crores and it has
claimed interest on capital loan of Rs.72.78 Crores at 11.75% rate of
interest for FY18.
ci
The MESCOM has requested to approve interest on capital loan for
FY18 as follows:
TABLE – 5.18
Interest on Capital Loan– MESCOM’s Submission
Amount in Rs. Crores
Commission’s analysis and decision:
The Commission in its Order dated 30th March, 2016 had approved
capex of Rs.289.40 Crores for FY18. MESCOM in its present application
has not revised its capex proposal.
As per the audited accounts and as per the APR of FY16, the MESCOM
had incurred interest on capital loan at a weighted average rate of
interest of 10.96% p.a. This rate of interest is considered for the existing
loan balances for which interest has to be factored during FY17.
Further, for the year FY18, the weighted average rate of interest of the
preceding year has been considered on the existing loan balances.
The Commission has considered new loan, in compliance of the debt
equity ratio of 70:30 as in MYT Regulations.
The Commission notes that, the present interest rates by commercial
banks and financial institutions are charged mainly on the basis of
Marginal Cost of fund based Lending Rates (MCLR). These rates are
comparatively lower than the base rates considered earlier. Further, in
view of the changing economic situation, it is observed that there is a
considerable reduction in the MCLR and also downward trend is
evident in the interest rates. Hence, in such a situation, the Commission
is of the view that, the ESCOMs can avail Capital loans at competitive
interest rates which would be less than the proposed rates of 11.75% by
Particulars FY18
Opening Balance of Capital Loans 575.27
Add: New Loans 202.58
Less: Repayments 114.33
Total Loan at the end of the year 663.52
Average Loan for the year 619.40
Rate of Interest 11.75%
Total Interest on Capital Loans 72.78
cii
MESCOM. The Commission notes that, the present SBI MCLR rate for
capital loans with tenure of 3 years is 8.15%. Considering the present
MCLR, the Commission decides to allow an interest rate of 11.00% for
FY18 for new Capital loans. It shall be noted that, the rate of interest
now considered by the Commission on the new capital loans is subject
to review during APR for FY18.
Accordingly, the approved interest on loans for FY18 is as follows:
TABLE – 5.19
Approved Interest on Loans for FY18
Amount in Rs. Crores
Particulars FY18
Opening Balance long term loans 575.28
Add new Loans 202.58
Less: Repayments 114.33
Total loan at the end of the year 663.53
Average Loan 619.40
Weighted average rate of interest in % 11.09%
Interest on long term loans 68.71
Thus, the Commission decides to approve interest of Rs.68.71 Crores on
Capital loans for FY18.
b) Interest on Working Capital:
MESCOM’s proposal:
MESCOM has claimed interest on working capital based on the norms
prescribed in the MYT Regulations and considering the rate of interest
of 11.75% p.a. The interest on working capital computed by MESCOM
are as follows:
TABLE – 5.20
Interest on Working Capital – MESCOM’s Submission
Amount in Rs. Crores
Particulars FY18
1/12th Operation and Maintenance 57.97
Opening GFA 1751.44
1% of Gross fixed assets at the beginning of the year 17.51
2 months Receivables 476.27
Estimated Working Capital 551.75
Rate of Interest 11.75%
Interest on working capital 64.83
ciii
civ
Commission’s analysis and decision:
The Commission in its MYT Order dated 30th March, 2016 while deciding
the ARR for each year of the control period FY17-19, had approved
Interest on working capital at Rs. 59.25 Crores for FY18.
The Commission has been computing the interest on working capital as
per the norms specified under the MYT Regulations and amendments
thereon, which consists of one month’s O & M expenses, 1% of opening
GFA and two months’ revenue. As discussed earlier, the current interest
regime is based on MCLR. The present MCLR for loans with tenure of
one year is 8.00%. Therefore, the Commission decides to consider
interest on working capital at 11% p.a. for FY18.
Accordingly, the approved interest on working capital for FY18 is as
follows:
TABLE – 5.21
Approved Interest on Working Capital for FY18
Amount in Rs. Crs
Particulars FY 18
One-twelfth of the amount of O&M Expenses 35.77
Opening Gross Fixed Assets (GFA) 2266.61
Stores, materials and supplies 1% of Opening balance
of GFA 22.67
One-sixth of the Revenue 474.41
Total Working Capital 532.85
Rate of Interest (% p.a.) 11.00%
Interest on Working Capital 58.61
Thus, the Commission hereby approves interest of Rs. 58.61 Crores on
working capital for FY18.
c) Interest on Consumer Security Deposit:
MESCOM’s proposal:
MESCOM in its application has claimed interest on consumer security
deposit of Rs.40.79 Crores for FY18 duly considering the addition of
deposits for FY18 based on Bank rate of 7.75 %. MESCOM has
cv
requested to consider average of the opening and closing balances
of consumer deposits in the respective year for computation of interest
on consumer security deposits. The interest on consumer deposit
projected for FY18 is as follows:
TABLE – 5.22
Interest on Consumer Security Deposits – MESCOM’s Submission
Amount in Rs. Crores
Particulars FY18
Opening Balance of Consumer Security Deposit 505.63
Add: Deposits collected during the year 41.31
Closing Balance of Consumer Security Deposit 546.94
Average Consumer Security Deposit 526.29
Rate of Interest 7.75%
Interest on consumer security deposit 40.79
Commission’s analysis and decision:
In accordance with the KERC (Interest on Security Deposit) Regulations
2005, the interest rate on consumer security deposit to be allowed is
the bank rate prevailing on the 1st of April of the financial year for
which interest is due. As per the Reserve Bank of India notification
dated 4th October, 2016, the applicable bank rate is 6.75%. The
Commission has considered the same, for computation of interest on
consumer security deposits for FY18.
The Commission has considered the consumer security deposits as per
the audited accounts of FY16 for onward projection for FY18. Also, the
Commission is considering the average of the opening and closing
balances of consumer deposits of the relevant year. Accordingly, the
interest on consumer deposits for FY18 is as follows:
TABLE – 5.23
Approved Interest on Consumer Security Deposits for FY18 Amount in Rs. Crores
Particulars FY18
Opening balance of consumer security deposits 509.44
Addition of deposits during FY18 46.00
Closing balance of consumer security deposits 555.44
Average Consumer Security Deposits for FY18 532.44
cvi
Bank rate to be allowed as per Regulations 6.75%
Approved Interest on average Consumer
Security Deposit 35.94
Thus, the Commission decides to approve interest of Rs.35.94 Crores on
consumer security deposits for FY18.
d) Other Interest and Finance Charges:
MESCOM has claimed an amount of Rs.1.21 Crores towards other
interest and finance charges for FY18. Considering, the expenditure on
this item in the earlier years, the Commission decides to allow an
amount of Rs.1.21 Crores towards interest and finance charges for
FY18.
e) Interest and other expenses Capitalized:
MESCOM has claimed an amount of Rs.1.30 Crores towards
capitalization of interest and other expenses during FY18. Considering,
the capital expenditure incurred and capitalized in the previous years,
the Commission decides to allow capitalization of interest and other
expenses of Rs.1.30 Crores as proposed by MESCOM for FY18.
The abstract of approved interest and finance charges for FY18 are as
follows:
TABLE – 5.24
Approved Interest and finance charges for FY18 Amount in Rs. Crores
Particulars FY18
Interest on Loan Capital 68.71
Interest on Working Capital 58.61
Interest on Consumers Security Deposit 35.94
Other Interest & Finance Charges 1.21
Less Interest & other expenses capitalized (1.30)
Total Interest & Finance Charges 163.18
5.2.9 Other Debits, Prior period charges and extraordinary item:
cvii
MESCOM, in its application has claimed an amount of Rs.5.03 Crores
towards other debits, net prior period debit / credit of Rs.11.58 Crores
and extraordinary items of expenditure of Rs.5.02 Crores for FY18.
cviii
Commission’s analysis and decision:
The Commission notes that, MESCOM has claimed expenditure
towards Other Debits, Prior period debit/credit and extraordinary item.
It is to be noted that, these items of expenditures/income cannot be
estimated upfront and included in the proposed ARR for FY18. But, as
per the provisions of the MYT Regulations, the Commission would
consider the same based on the actuals as per the audited accounts
while approving APR for FY18.
5.2.10 Return on Equity:
MESCOM’s proposal:
MESCOM in its application has claimed RoE of Rs. 95.53 Crores for FY18
based on the Share Capital, share deposits, accumulated balance of
surplus/deficit under Reserves and surplus account as detailed below:
TABLE-5.25
Return on Equity- MESCOM Submission
Amount in Rs. Crores
Particulars FY18
Opening balance of share capital 266.36
Share deposit 14.00
Reserves and Surplus 204.41
Total Equity 484.77
Return on Equity @ 15.50% with MAT 95.53
Commission’s analysis and decision:
The Commission has considered the actual amount of share capital,
share deposits and reserves & surplus as per the audited accounts for
FY16 for arriving at the allowable equity base for the control period
FY18.
The Commission, in accordance with the provisions of the MYT
Regulations, has considered 15.5% of Return on Equity duly grossed up
with the applicable Minimum Alternate Tax (MAT) of 21.342%. This
works out to 19.706% per annum. Further, as per the decision of the
Commission in the Review Petition No.6/2013 and Review Petition
5/2014, the Return on Equity is to be computed based on the opening
balances of share capital, share deposits and reserves and surplus.
Further, an amount of Rs.26.00 Crores of recapitalized consumer
cix
security deposit as net-worth is considered as per the orders of the
Hon’ble Appellate Tribunal for Electricity in Appeal No.46/2014.
Further, in compliance with the Orders of the Hon’ble ATE in Appeal
No.46/2014, wherein it is directed to indicate the opening and closing
balances of gross fixed assets along with break-up of equity and loan
component in the Tariff Order henceforth, the details of GFA, debt and
equity (net-worth) for FY18 are indicated as follows:
TABLE – 5.26
Status of Debt Equity Ratio for FY18 Amount in Rs. Crores
Year Particulars GFA Debt
Equity
(Net-
worth)
Normative
Debt @
70% of
GFA
Normative
Equity @
30% of
GFA
%age of
actual
debt on
GFA
%age of
actual
equity
on GFA
FY18 Opening
Balance
2266.61 575.28 405.45
Closing
Balance
2444.45 663.53 468.29 1711.12 733.34 27.14 19.16
From the above table it is seen that the amounts of debt equity are
within the normative debt equity amounts ratio of 70:30 on the closing
balances of GFA for FY18. Further, the Commission would review the
same during the Annual Performance Review, for FY18, based on the
actual data, as per the audited accounts.
Accordingly, the Return on Equity that could be approved for FY18,
works out as follows:
TABLE – 5.27
Approved Return on Equity for FY18
Amount in Rs. Crores
Particulars FY18
Opening Balance of Paid Up Share Capital 266.36
Share Deposit 14.00
Reserves and Surplus 151.09
Less Recapitalised Security Deposit (26.00)
Total Equity 405.45
Approved Return on Equity with MAT 79.90
Thus, the Commission decides to approve Return on Equity of Rs.79.90
Crores, for FY18.
cx
5.2.11 Other Income:
MESCOM’s proposal:
MESCOM has claimed an amount of Rs.45.12 Crores as other income
for the FY18.
Commission’s analysis and decision:
The other income received by the MESCOM mainly includes rebate
from collection of electricity duty, income from miscellaneous
recoveries, interest on bank deposits, rent from staff quarters and sale
of scrap, profit on sale of stores besides incentives for timely payment
of power purchase bills. The actual ‘other income’ as per the audited
accounts for FY16 is Rs.47.75 Crores.
The Commission notes that, the other income earned by the MESCOM
in the past three years. Further, MESCOM would receive income from
sale of power to MSEZ which needs to be factored as non-tariff
income. As per the approved power purchase for MSEZ, the income
available to MESCOM will be Rs.49.49 Crores. Accordingly, the
Commission decides to approve other income of Rs.89.36 Crores for
FY18.
5.2.12 Fund towards Consumer Relations / Consumer Education:
The Commission has been allowing an amount of Rs.0.50 Crore per
year towards consumer relations / consumer education. This amount
is earmarked to conduct consumer awareness and grievance
redressal meetings periodically and institutionalize a mechanism for
addressing common problems of the consumers. The Commission has
already issued guidelines for consumer education and grievance
redressal activities.
The Commission decides to continue providing an amount of Rs.0.50
Crore for FY18, towards meeting the expenditure on consumer relations
/ consumer education.
Further, the Commission directs MESCOM to furnish a detailed plan of
action for utilization of this amount and also maintain a separate
account of these funds and furnish the same at the time of APR.
cxi
cxii
5.2.13 Contribution towards Pension and Gratuity Trust
MESCOM in its application has claimed under O&M expenses an
amount of Rs.239.88 Crores being the arrears of contribution to P&G
Trust not released by the Government of Karnataka.
The Commission in its preliminary observations had asked MESCOM to
furnish reasons /justifications for inclusion of this amount in the
proposed ARR for FY18 to be recovered from the consumers as part of
the retail supply tariff during FY18 in contravention to the Commission’s
decision in Tariff Order 2016.
In its replies to the Commission’s preliminary observations, MESCOM has
stated that it has included an amount of Rs. 239.88 Crores towards
MESCOM portion of arrears of contribution to P&G Trust not released by
the Government of Karnataka, in accordance to the instructions issued
by the Energy Department, GoK vide Letter No. EN 26 PSR 2016/P3
dated 16.09.2016.
The Commission in its Order dated 30th March, 2016 has already dealt
with this issue and has observed that:
a) ‘As per Rule 4(13) of the Karnataka Electricity Reforms (Transfer of
Undertakings of KPTCL and its Personnel to Electricity Distribution and
Retail Supply Companies) Rules, 2002, notified by the Government on
31.05.2002, the State Government is liable for funding the pension
and gratuity liability of existing pensioners as on the effective date of
Second Transfer Scheme.
b) The Government, as per its order dated 19.12.2002, has adopted
“pay as you go” approach to meet the pension and gratuity
requirements of existing pensioners on the effective date of second
transfer Scheme. With this arrangement, the GoK is liable to meet the
pension and gratuity requirement of existing pensioners.’
As per the provisions of the prevailing Rules and Government Orders
issued thereon, the Commission had earlier decided that this liability
cannot be passed on to the consumers, through tariff. In spite of this
Order of the Commission, MESCOM has claimed this liability (in the
proposed ARR for FY18) which should have been borne by the
Government of Karnataka.
cxiii
The Commission reiterates its earlier decision that, as per Rule 4(13) of
the Karnataka Electricity Reforms (Transfer of Undertakings of KPTCL
and its Personnel to Electricity Distribution and Retail Supply
Companies) Rules, 2002, notified by the Government on 31.05.2002
and the Government Order No. DE 15 PSR 2002 Dated 19.12.2002, the
amount in question is liable to be borne only by the Government of
Karnataka and cannot be passed on to the consumers, through tariff.
In view of the above, the Commission is unable to accept the claim of
MESCOM to allow an amount of Rs.239.88 Crores being the GoK liability
towards arrears of contribution to P&G Trust in the ARR for FY18.
5.3. Abstract of revised ARR for FY18:
In the light of the above analysis and decisions of the Commission, the
following is the approved revised ARR for the control period FY18:
TABLE – 5.28
Approved revised ARR for FY18 Amount in
Rs. Crores
Sl.
No Particulars
FY18
As Appd
30.03.2016
As Filed
30.11.2016
As
Revised
Approved
Revenue at existing tariff in Rs Crs
1
Revenue from tariff and Miscellaneous
Charges 2209.20 2179.80
2 Tariff Subsidy to BJ/KJ 8.79 27.00
3 Tariff Subsidy to IP 639.65 639.65
4 Total Existing Revenue 0.00 2857.64 2846.44
5 Expenditure in Rs Crs
6 Power Purchase Cost 2003.82 1863.68 1796.76
7 Transmission charges of KPTCL 238.16 238.16 216.20
8 SLDC Charges 1.94 1.94 1.94
9
Power Purchase Cost including cost of
transmission 2243.92 2103.78 2014.90
10 Employee Cost 327.75
11 Repairs & Maintenance 46.89
12 Admin & General Expenses 81.17
13 Total O&M Expenses 432.40 455.81 429.30
14 Depreciation 86.12 87.45 79.60
Interest & Finance charges
15 Interest on Capital Loans 70.33 72.78 68.71
16 Interest on Working capital loans 59.25 64.83 58.61
17 Interest on belated payment on PP Cost 0.00 0.00 0.00
18 Interest on consumer security deposits 41.55 40.79 35.94
cxiv
19 Other Interest & Finance charges 2.19 1.21 1.21
20 Less interest & other expenses capitalised 2.39 1.30 1.30
21 Total Interest & Finance charges 170.93 178.31 163.18
22 Other Debits 0.00 5.03 0.00
23 Extraordinary items -5.02 0.00
24 Net Prior Period Debit/Credit 0.00 -11.58 0.00
25 Return on Equity 82.71 95.53 79.90
26
Funds towards Consumer
Relations/Consumer Education 0.50 0.50 0.50
27
Provision for contribution to P&G Trust
(GoK Liability) 239.88 0.00
28
Other Income (Including income from
sale of power to MSEZ) 80.54 45.12 89.36
29
Disallowance of Interest and Depreciation
on imprudent investments in FY16 0.40
ARR 2936.03 3104.57 2677.61
30 Surplus/Deficit for FY16 carried forward -453.52 -395.74
Net ARR 2936.03 3558.09 3073.36
5.4. Segregation of ARR into ARR for Distribution Business and ARR for Retail
Supply Business:
MESCOM in its application has proposed the segregation of ARR into
ARR for Distribution Business and ARR for Retail Supply Business as
approved by the Commission in its Tariff Order dated 30th March, 2016.
The Commission decides to continue with the same ratio of
segregation of ARR as detailed below:
TABLE – 5.29
Approved Segregation of ARR – FY18
Particulars Distribution
Business
Retail Supply
Business
O&M 39% 61%
Depreciation 84% 16%
Interest on Loans 100% 0%
Interest on Consumer Deposits 0% 100%
RoE 78% 22%
GFA 84% 16%
Non-Tariff Income 7% 93%
Accordingly, the following is the approved ARR for Distribution Business
and Retail supply business:
cxv
TABLE – 5.30
APPROVED REVISED ARR FOR DISTRIBUTION BUSINESS – FY18
Amount in Rs. Crores
Sl.
No Particulars
FY18
1 R&M Expenses
167.43
2 Employee Expenses
3 A&G Expenses
4 Depreciation 66.86
5 Interest & Finance Charges
6 Interest on Capital Loans 68.31
7 Interest on Working capital loans 7.28
8 Other Interest & Finance charges 1.21
9 Less interest & other expenses capitalised 1.30
Total 309.79
10 ROE 62.32
11 Other Income 6.25
NET ARR 365.86
TABLE – 5.31
APPROVED ARR FOR RETAIL SUPPLY BUSINESS – FY18
Amount in Rs.Crores
Sl.
No Particulars
FY18
1 Power Purchase 1796.76
2 Transmission Charges 218.13
3 R&M Expenses
261.87
4 Employee Expenses
5 A&G Expenses
6 Depreciation 12.74
Interest & Finance Charges
7 Interest on Working capital loans 51.33
8 Interest on consumer security deposits 35.94
Total 2376.78
9 ROE 17.58
10 Other Income 83.10
11
Fund towards Consumer Relations / Consumer
Education 0.50
NET ARR 2311.75
5.5. Gap in Revenue for FY18:
As discussed above, the Commission decides to approve the revised
Annual Revenue Requirement (ARR) of MESCOM for its operations in
FY18 at Rs.3073.36 Crores as against MESCOM’s application proposing
the revised ARR of Rs.3558.09 Crores by including the revenue deficit of
Rs.453.52 Crores for FY16. This approved revised ARR includes an
amount of Rs.395.74 Crores which is determined as the deficit in FY16
cxvi
as discussed in Chapter-4. Based on the existing retail supply tariff, the
total realization of revenue will be Rs.2846.44Crores which is Rs.226.91
Crores less than the projected revenue requirement for FY18.
The net ARR and the gap in revenue for FY18 are shown in the following
table:
TABLE – 5.32
Revenue gap for FY18
Particulars FY18
Net ARR including carry forward gap of FY16 (in Rs. Crores) 3073.36
Approved sales (in MU) 4724.16
Average cost of supply (in Rs./unit) 6.51
Revenue at existing tariff (in Rs. Crores) 2846.44
Gap in revenue (in Rs. Crores) (226.91)
The determination of revised retail supply tariff on the basis of the
above approved ARR is detailed in the following Chapter.
cxvii
CHAPTER – 6
DETERMINATION OF RETAIL SUPPLY TARIFF FOR FY18
6.0 Revision of Retail Supply Tariff for FY18-MESCOM’s Proposals and
Commission’s Decisions:
6.1 Tariff Application
As per the Tariff application filed by the MESCOM, it has projected an
unmet gap in revenue of Rs.700.45 Crores for FY18, which also includes
the gap in revenue of Rs.453.52 Crores for FY16. In order to bridge this
gap in revenue, MESCOM has proposed a uniform tariff increase of 148
paise per unit, in respect of all the categories of consumers.
In the previous chapters of this order, the Annual Performance
Review(APR) for FY16 and the revision of ARR for FY18 has been
discussed. The various aspects of determination of tariff for FY18 are
discussed in this Chapter.
6.2 Statutory Provisions guiding determination of Tariff
As per Section 61 of the Electricity Act 2003, the Commission is guided
inter-alia, by the National Electricity Policy, the Tariff Policy and the
following factors, while, determining the tariff so that,
the distribution and supply of electricity are conducted on
commercial basis;
competition, efficiency, economical use of resources, good
performance, and optimum investment are encouraged;
the tariff progressively reflects the cost of supply of electricity, and
also reduces and eliminates cross subsidies within the period to be
specified by the Commission;
efficiency in performance is to be rewarded: and
a multi-year tariff framework is adopted.
cxviii
Section 62(5) of the Electricity Act 2003, read with Section 27(1) of the
Karnataka Electricity Reform Act 1999, empowers the Commission to
specify, from time to time, the methodologies and the procedure to be
observed by the licensees in calculating the Expected Revenue from
Charges (ERC). The Commission determines the Tariff in accordance
with the Regulations and the Orders issued by the Commission from time
to time.
6.3 Factors Considered for Tariff setting:
The Commission has considered the following relevant factors for
determination of retail supply tariff:
a) Tariff Philosophy:
As discussed in the earlier tariff orders, the Commission continues to
fix tariff below the average cost of supply in respect of consumers
whose ability to pay is considered inadequate and also fix tariff at
or above the average cost of supply for categories of consumers
whose ability to pay is considered to be higher. Thus, the system of
cross subsidy continues. However, the Commission has taken due
care to progressively bring down the cross subsidy levels as
envisaged in the Tariff Policy 2016, issued by the Government of
India.
b) Average Cost of Supply:
The Commission has been determining the retail supply tariff on the
basis of the average cost of supply. The KERC (Tariff) Regulations,
2000, as amended from time to time, require the licensees to
provide details of embedded cost of electricity voltage / consumer
category-wise. The distribution network of Karnataka is such that, it
is difficult to segregate the common cost between voltage levels.
Therefore, the Commission has decided to continue the average
cost of supply approach for recovery of the ARR. With regard to
the indication of voltage- wise cross subsidy with reference to the
cxix
voltage-wise cost of supply, the same is indicated in the Annexure
to this Order.
c) Differential Tariff:
The Commission has been determining differential retail supply tariff
for consumers in urban and rural areas, beginning with its Tariff
Order dated 25th November, 2009. The Commission decides to
continue the same in the present order also.
6.4 New Tariff Proposals by MESCOM:
i) Tariff determination for Auxiliary Consumption of KPTCL’s Sub-
stations:
MESCOM, in its tariff application dated 30th November, 2016,
besides seeking revision of retail supply tariff for all the
categories of consumers, has prayed for determination tariff for
the Auxiliary Consumption of KPTCL Stations. CESC has also filed
separate Petition before this Commission seeking tariff
determination for auxiliary consumption of KPTCL’s substations.
MESCOM Submission:
MESCOM and other ESCOMs have requested fixation of tariff for
KPTCL’s Auxiliary consumption on the following grounds:
1. The power utilized by KPTCL Substations for auxiliary
consumption purpose is supplied by ESCOMs through a
separate feeder or local feeder. The power so supplied by
ESCOMs is from the pooled purchase of power from different
sources at different rates. The cost incurred in procurement
of power by the ESCOMs, need to be paid by the KPTCL.
2. The auxiliary consumption of PGCIL stations, being the
transmission utility, is being billed under commercial tariff.
3. The auxiliary consumption of KPTCL Substations is being billed
at average power purchase cost of the ESCOMs where the
cxx
substations are geographically located, from June, 2005 to
October 2016 as per the KPTCL’s letter dated 15.12.2005.
Commission’s analysis and decision:
The treatment of the electricity consumption of KPTCL’s substations
has been a matter of contention between KPTCL and ESCOMs.
While the KPTCL has been urging the Commission to treat the
consumption of its substations as transmission loss, the ESCOMs
have been requesting the Commission to fix a commercial tariff.
The BESCOM in its letter dated 29.05.2015, had requested the
Commission to approve the Commercial tariff to the auxiliary
consumptions in respect of KPTCL Sub-stations. After examining the
issue in detail, the Commission had clarified that as per the
provisions of Regulation 3.3 of the KERC (Terms and Conditions for
Determination of Transmission Tariff) Regulations, 2006, the charges
for the auxiliary consumptions of KPTCL substations used for the
purpose of air-conditioning, lighting etc. are part of the normative
operation and maintenance expenses of KPTCL and hence the
charges for the same have to be borne by KPTCL. Further, the
Commission also notes that, the KPTCL while computing the
transmission losses, is not considering the electricity consumption of
its sub-stations as part of the transmission loss. Accordingly, the
Commission vide its letter No. B/07/05/451 dated 23.06.2015, had
clarified that since there is no specific category in the present tariff
schedule for billing the auxiliary consumption of KPTCL Substations,
the ESCOMs should seek determination of tariff in respect of sale of
power to KPTCL substations under the provisions of clause 3.05 of
the Conditions of Supply of Electricity by Distribution Licensees in
the State of Karnataka. Accordingly, the ESCOMs have filed the
petitions.
From the submissions made by ESCOMs, it is clear that, the power
utilized by KPTCL Sub-stations for the consumption purpose is being
supplied by the ESCOMs through a separate / local feeder. Since,
KPTCL is responsible for accounting the energy purchased by the
ESCOMs upto the interface point of the ESCOMs and the energy
cxxi
utilized by KPTCL Substations for auxiliary consumption purpose has
not been recognized in computation of transmission losses, the
energy supplied from the distribution network of the ESCOMs for
the consumption of the KPTCL Sub stations has to be accounted
and charged in accordance with the provisions of the KERC (Terms
and Conditions for Determination of Transmission Tariff)
Regulations, 2006.
Now, keeping in view the request of the ESCOMs, the issue before
the Commission is whether to fix a commercial tariff or a tariff
equal to the State’s average power purchase cost, to bill the
auxiliary consumption of KTPCL Sub-stations. The Commission notes
that any tariff charged to bill the KPTCL’s substations consumption,
shall have to be ultimately recovered through transmission tariff,
which in turn, is passed on to the end consumers in the form of
retail supply tariff. In order to minimise the burden on the retail
supply consumers, the Commission decides as follows:
In accordance with the provisions of Regulation 3.3 of the KERC
(Terms and Conditions for Determination of Transmission Tariff),
Regulations, 2006 and amendment thereon and Clause 3.05 of the
Conditions of Supply of Electricity by Distribution Licensees in the
State of Karnataka, the power supplied by the ESCOMs to the
KPTCL’s Substations for auxiliary consumption purposes, the
Commission decides to fix a single part tariff rate at the State
Average Power Purchase Cost, as approved by the Commission, in
the Tariff Orders issued from time to time.
Further, for the energy consumption by KPTCL’s Sub-stations for
auxiliary purposes, during the previous periods, the ESCOMs shall
bill it at the average power purchase cost of the State, as
determined by the Commission in the Tariff Order issued from time
to time.
ii) Petition seeking increase in Demand Charges and energy charges to
HT consumers.
cxxii
MESCOM in its petition No.101/2016 has proposed increase in Demand
Charges (Fixed Cost) and reduction in energy charges to HT-1, HT-
2(a)(b) (c) and HT4 consumers for the following reasons:
i) The ratio of fixed and variable cost of power purchase cost
payable to the private generators is 33: 67
ii) All the ESCOMs in the state are recovering the fixed cost of their
distribution network only 9% of the ARR, the balance 24%. of the
fixed cost through energy charge (variable charge)
iii) MESCOM, it is not able to recover the variable costs which
include the fixed cost by Rs.10/- (Rupees Ten only) Per
KVA/HP/KW from the HT consumer opting for open access.
iv) The contribution of Fixed cost is only 9% of the ARR and the
remaining fixed cost is camouflaged in the energy charges,
which are higher.
With the above justification, the MESCOM has proposed to increase
the Demand charges upto Rs.250 per KVA of the billing demand from
the existing Demand Charge of Rs.180 -200 per KVA. MESCOM has also
proposed reduction in energy charges ranging between 20 Paise to 85
paise per unit to the various categories of HT consumers.
Consumers’ Response:
The representatives of small scale industries have opposed the
proposal for increasing the Demand Charges. They have contended
that MESCOM has not furnished the working details of fixed charges
and its percentage to the total fixed charges being incurred. It is
submitted that as per the provisions of the Electricity Act, 2003, the
MESCOM should realise the cost of supply from all the categories of
consumers and should not confine recovery of fixed cost only to a
specific category of consumers.
Commission’s analysis and decision:
cxxiii
MESCOM, in its petition has considered the recovery of Fixed Cost (FC)
of generation sources and the distribution network. It has not
considered the FC involved in transmission of power and the SLDC
charges which is one of the major components of the ARR. Further,
seeking increase in demand charges only for HT consumers and
increase in energy charges for higher slabs of domestic consumers
while reducing the energy charges to HT consumers does not appear
to a proper approach to retain HT consumers in its fold. Any proposal
to encourage sale or to improve the ESCOM’s finances should be
made by keeping the interest of all the consumers in mind and the
treatment to various class of consumers across the ESCOM should be
just and equitable. Hence, the Commission is unable to accept the
proposal of MESCOM to increase the Demand Charges of its HT
consumers, in total.
The Commission in its Tariff Order dated 30th March,2016 had
considered increase in demand charges to the consumers of all
consumer in the State. While doing so it had observed that:
“As per the new Tariff Policy issued by the Ministry of Power,
Government of India, dated 28th January, 2016, two-part Tariff
featuring separate fixed and variable charges shall be
introduced for all consumers. In order to ensure their financial
viability, it is imperative that the fixed expenditure incurred by
the ESCOMs are recovered in the form of fixed charges. On a
study of the existing rate of fixed charges levied on the
consumers and the amount collected thereon, it is observed
that fixed charges needs to be increased gradually to meet the
above objective”.
In pursuance of the above, the Commission has again reviewed the
status of recovery of fixed charges while revising the tariff for FY18. The
fixed costs to be incurred by MESCOM to supply power to its consumers
for FY18, consists of the following components:
cxxiv
Activity Total Fixed Cost to be
incurred -Rs. Crs.
Generation 339.09
Transmission including SLDC charges 303.95
Distribution network cost 366.18
Total Fixed cost of MESCOM 1009.22
The approved Net ARR of MESCOM is Rs. 3073.36 Crores out of which,
RS.1009.32 Crores is towards fixed cost. As per the existing Revenue
rates, MESCOM recovers an amount of Rs.251.30 Crores towards the
fixed cost, which accounts for recovery of 24.90% of the fixed cost,
incurred by the MESCOM.
Since the Commission has decided to increase the FC year on year
gradually, an increase ranging between Rs. 10 to Rs.20 has been
considered while approving the tariff to various categories of
consumers. The details of the actual increase is indicated in the tariff
schedule of each of the consumer categories.
iv) Introduction of morning peak from 6 AM to 10 AM under ToD billing:
In respect of HT consumers, the MESCOM in its petition No.99/2016 has
proposed to introduce ToD billing for morning peak between 6 AM to
10AM in addition to the prevailing ToD billing for usage of energy
during evening peak (6 p.m. to 10 p.m.) and not to allow any incentive
for off peak usage (during night hours) against the existing rate of
Rs.1.25 per unit.
MESCOM has submitted that the ToD billing is to encourage the HT
consumers to shift their load from peak hours to non-peak hours by
incentivising them and also to levy a penalty to discourage usage of
energy during peak hours. It has also cited the examples of Delhi,
Mumbai and Gujarat where ToD billing is prevailing for both morning
and evening peak usage as compared to the State’s single ToD billing
for evening peak usage. The off peak incentive helps in shifting the
load curve to night hours which is helpful for optimum power
generation during night hours.
cxxv
Consumers across the State have opposed this proposal and have
requested the Commission to make the ToD billing optional instead of
making it mandatory.
The Commission has examined the issue in detail. It is found that during
most part of the year, the morning peak usage is higher than the
evening peak usage. In the absence of penal charges during the
morning peak, the tendency to use the power in the morning peak is
more as compared to the evening peak. The system of ToD billing for
morning peak is also prevalent in the States referred to above. Hence,
the Commission decides to introduce ToD billing in respect of HT
consumers for morning peak between 6 AM to 10AM in addition to the
prevailing ToD billing for usage of energy during evening peak (6 p.m.
to 10 p.m.) and also to reduce the incentive for off-peak usage (during
night hours) to Rs.1/ per unit as against the existing rate of Rs.1.25 per
unit. The necessary changes in the ToD billing are indicated in the
respective Tariff schedule of the HT Consumers, in this Tariff Order.
6.5 Revenue at existing tariff and deficit for FY18:
The Commission in its preceding Chapters has decided to carry
forward the gap in revenue of Rs.395.75 Crores of FY16 to the ARR of
FY18. The gap in revenue for FY18 is proposed to be filled up by revision
of Retail Supply Tariff, as discussed in the following paragraphs of this
Chapter.
Considering the approved ARR for FY18 and the revenue as per the
existing tariff, the gap in revenue for FY18 is as follows:
TABLE – 6.1
Revenue Deficit for FY18
Amount Rs. in Crores
Particulars Amount
Approved Net ARR for FY18 including gap of FY16 3073.36
Revenue at existing tariff 2846.44
Surplus / (- )Deficit (226.91)
Additional Revenue to be realised by Revision of Tariff 226.91
Accordingly, in this Chapter, the Commission has proceeded to
determine the Revised Retail Supply Tariff for FY18. The category-wise
cxxvi
tariff as existing, as proposed by MESCOM and as approved by the
Commission are as follows:
1. LT-1 Bhagya Jyothi:
The existing tariff and the tariff proposed by MESCOM are given below:
Sl.
No
Details Existing as per 2016
Tariff Order
Proposed by MESCOM
1 Energy charges
(including recovery
towards service main
charges)
601Paise / Unit Subject
to a monthly minimum
of Rs.30 per installation
per month.
749Paise / Unit Subject
to a monthly minimum
of Rs.30 per installation
per month.
Commission’s Views/ Decision
The Government of Karnataka has continued its policy of providing
free power to all BJ/KJ consumers with a single outlet, whose
consumption is not more than 40 units per month, vide Government
Order No. EN12 PSR 2017 dated 20th March, 2017 (instead of
the earlier limit of 18 units per month). Based on the present average
cost of supply, the tariff payable by these BJ/KJ consumers is revised to
Rs.6.51 per unit.
Further, the ESCOMs have to claim subsidy for only those consumers
who consume 40 units or less per month per installation. If the
consumption exceeds 40 units per month or if any BJ/KJ installation is
found to have more than one out- let, it shall be billed as per the Tariff
Schedule LT 2(a).
The Commission determines the tariff (CDT) in respect of BJ / KJ
installations as follows:
LT – 1 Approved Tariff for BJ / KJ installations
Commission determined Tariff Retail Supply Tariff
determined by the
Commission
651 paise per unit,
Subject to a monthly minimum of
Rs.30 per installation per month.
-Nil-*
Fully subsidized by GoK
*Since GOK is meeting the full cost of supply to BJ / KJ, the
Tariff payable by these Consumers is shown as nil. However,
if the GOK does not release the subsidy in advance, a Tariff
of Rs.6.51 per unit subject to a monthly minimum of Rs.30 per
cxxvii
installation per month, shall be demanded and collected
from these consumers.
2. LT2 - Domestic Consumers:
MESCOM’s Proposal:
The details of the existing and proposed tariff under this category are
given in the Table below:
Proposed Tariff for LT-2 (a)
LT-2 a (i) Domestic Consumers Category
Applicable to areas coming under City Municipal Corporations and all
Urban Local Bodies
Details Existing as per 2016
Tariff Order
Proposed by MESCOM
Fixed Charges per Month For the first KW Rs.30 For the first KW Rs.30
For every additional
KW Rs.40
For every additional KW
Rs.40
Energy Charges
0-30 units (life line
Consumption )
0 to 30 units:300 paise
/unit
0 to 30 units: 448 paise
/unit
Energy Charges
exceeding 30 units per
month
31 to 100 units:440
paise/unit
31 to 100 units: 588
paise / unit
101 to 200 units:590
paise /unit
101 to 200 units:738
paise/unit
Above 200 units: 690
paise /unit
Above 200 units: 838
paise /unit
LT-2(a)(ii) Domestic Consumers Category
Applicable to Areas under Village Panchayats
Details Existing as per 2016 Tariff Order
Proposed by MESCOM
Fixed charges per
Month
For the first KW Rs.20 For the first KW Rs.20
For every additional
KW Rs.30
For every additional
KW Rs.30
Energy Charges
0-30 units ( life line
Consumption )
Upto 30 units:290
paise/unit
0 to 30 units:438 paise
/unit
Energy Charges
exceeding 30
Units per month
31 to 100 units:410
paise / unit
31 to 100 units:558
paise / unit
101 to 200 units: 560
paise /unit
101 to 200 units: 708
paise /unit
Above 200 units: 640
paise /unit
Above 200 units:788
paise /unit
Commission’s decision:
cxxviii
The Commission decides to continue with the two tier tariff structure in
respect of the domestic consumers as shown below:
(i) Areas coming under City Municipal Corporations and all Urban
Local Bodies.
(ii) Areas under Village Panchayats.
The Commission approves the tariff for this category as follows:
Approved Tariff for LT 2 (a) (i) Domestic Consumers Category:
Applicable to Areas coming under City Municipal Corporations and all
Urban Local Bodies
Details Tariff approved by the
Commission
Fixed charges per Month For the first KW: Rs.40/-
For every additional KW Rs.50/-
Energy Charges up to 30 units per
month (0-30 units)-life line consumption.
Upto 30 units: 325paise/unit
Energy Charges in case the
consumption exceeds 30 units per
month
31 to 100 units:470 paise/unit
101 to 200 units:625 paise/unit
Above 200 units: 730 paise/unit
Approved Tariff for LT-2(a) (ii) Domestic Consumers Category:
Applicable to Areas under Village Panchayats
Details Tariff approved by the Commission
Fixed Charges per Month For the first KW: Rs.25/-
For every additional KW Rs.40/-
Energy Charges up to 30 units
per month (0-30 Units)-Lifeline
Consumption
Up to 30 units: 315 paise/unit
Energy Charges in case the
consumption exceeds 30 units
per month
31 to 100 units: 440 paise/unit
101 to 200 units:595paise/unit
Above 200 units: 680 paise/unit
LT2 (b) Private and Professional Educational Institutions& Private
Hospitals and Nursing Homes:
MESCOM’s Proposal:
The details of the existing and the proposed tariff by MESCOM under
this category are given in the Table below:
cxxix
LT 2 (b) (i)Applicable to areas under City Municipal Corporations Areas
and all urban Local Bodies
Details Existing as per 2016 Tariff Order Proposed by MESCOM
Fixed
Charges per
Month
Rs.45 Per KW subject to a
minimum of Rs.75 per month
Rs.45 Per KW subject to a
minimum of Rs.75 per month
Energy
Charges
For the first 200 units 625
paise per unit
For the first 200 units 773 paise
per unit
Above 200 units 745 paise per
unit
For the balance units 893
paise per unit
LT 2 (b)(ii) Applicable to Areas under Village Panchayats
Details Existing as per 2016 Tariff
Order
Proposed by MESCOM
Fixed
Charges per
Month
Rs.35 per KW subject to a
minimum of Rs.60 per Month
Rs.35 per KW subject to a
minimum of Rs.60 per Month
Energy
Charges
For the first 200 units: 570
paise per unit
For the first 200 units:718
paise per unit
Above 200 units: 690 paise
per unit
For the balance units:838
paise per unit
Commission’s decision
As in the previous Tariff Order the Commission decides to continue the
two tier tariff structure as follows:
(i) Areas coming under City Municipal Corporation and all urban local
bodies.
(ii) Areas under Village Panchayats.
cxxx
Approved Tariff for LT 2 (b) (i)
Private Professional and other private Educational Institutions, Private
Hospitals and Nursing Homes
Applicable to areas under City Municipal Corporations and all other
urban Local Bodies.
Details Tariff approved by the Commission
Fixed Charges per Month Rs.55 per KW subject to a minimum of Rs.85
per Month
Energy Charges 0-200 units: 650 paise/unit
Above 200 units: 775 paise/unit
Approved Tariff for LT 2 (b) (ii)
Private Professional and other private Educational Institutions, Private
Hospitals and Nursing Homes
Applicable in Areas under Village Panchayats
Details Tariff approved by the Commission
Fixed Charges per Month Rs.45 per KW subject to a minimum of Rs.70 per
Month
Energy Charges 0-200 units: 595 paise/unit
Above 200 units: 720 paise/unit
3. LT3- Commercial Lighting, Heating& Motive Power:
MESCOM’s Proposal:
The existing and proposed tariff are as follows:
LT- 3 (i) Commercial Lighting, Heating& Motive Power
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Details Existing as per 2016 Tariff
Order
Proposed by MESCOM
Fixed charges per
Month
Rs.50 per KW Rs.50 per KW
Energy Charges For the first 50 units:715
paise per unit
For the first 50 units:863paise
per unit
For the balance units:815
paise per unit
For the balance units: 963
paise per unit
Demand based tariff (optional) where sanctioned load is above 5 KW
but below 50 KW.
Details Existing as per 2016 Tariff Order Proposed by MESCOM
Fixed
charges
Rs.65 per KW Rs.65 per KW
Energy
Charges
For the first 50 units:715paise
per unit
For the first 50 units:863paise
per unit
For the balance units:815
paise per unit
For the balance units:963
paise per unit
LT-3 (ii) Commercial Lighting, Heating & Motive
Applicable to areas under Village Panchayats
Details Existing as per 2016 Tariff
Order
Proposed by MESCOM
Fixed Charges
per Month
Rs.40 per KW Rs.40 per KW
Energy Charges For the first 50 units:665paise
per unit
For the first 50 units:813
paise per unit
For the balance
units:765paise per unit
For the balance
units:913paise per unit
cxxxiii
Demand based tariff (optional) where sanctioned load is above 5 KW
but below 50 KW
Details Existing as per 2016 Tariff
Order
Proposed by MESCOM
Fixed Charges
per Month
Rs.55 per KW Rs.55 per KW
Energy Charges For the first 50
units:665paise per unit
For the first 50 units:813
paise per unit
For the balance units:765
paise per unit
For the balance
units:913 paise per unit
Commission’s Views/ Decision
As in the previous Tariff Order, the Commission decides to continue
with the two tier tariff structure as below:
(i) Areas coming under City Municipal Corporations and other
urban local bodies.
(ii) Areas under Village Panchayats.
Approved Tariff for LT- 3 (i) Commercial Lighting, Heating& Motive
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Details Approved by the Commission
Fixed Charges per Month Rs.60 per KW
Energy Charges For the first 50 units: 750 paise/ unit
For the balance units: 850 paise/unit
Approved Tariff for Demand based tariff (Optional) where sanctioned
load is above 5 kW but below 50 kW
Details Approved by the Commission
Fixed Charges per
Month
Rs.75 per KW
Energy Charges For the first 50 units:750paise /unit
For the balance units:850 paise/unit
Approved Tariff forLT-3 (ii) Commercial Lighting, Heating and Motive Applicable to areas under Village Panchayats
Details Approved by the Commission
Fixed charges per
Month
Rs.50 per KW
Energy Charges For the first 50 units: 700 paise per unit
For the balance units: 800 paise per unit
Approved Tariff for Demand based tariff (Optional)where sanctioned
load is above 5 kW but below 50 kW
Details Approved by the Commission
Fixed Charges per
Month
Rs.65 per KW
Energy Charges For the first 50 units: 700 paise per unit
For the balance units: 800 paise per unit
cxxxvi
4. LT4-Irrigation Pump Sets:
MESCOM’s Proposal:
The existing and proposed tariff for LT4 (a) are as follows:
LT-4 (a) Irrigation Pump Sets
Applicable to IP sets upto and inclusive of 10 HP
Details Existing as per 2016 Tariff
Order
Proposed by MESCOM
Fixed charges per
Month
Nil Nil
Energy charges CDT 473 paise per unit Free (In case GoK does not
release the subsidy in
advance, CDT of 621 paise
per unit will be demanded
and collected from
consumers)
Commission’s Decision
The Government of Karnataka has extended free supply of power to
farmers as per Government Order No. EN 55 PSR 2008 dated
04.09.2008. As per this policy of GoK, the entire cost of supply to IP sets
up to and inclusive of 10 HP is being borne by the GoK through tariff
subsidy. In view of this, all the consumers under the existing LT-4(a) tariff
are covered under free supply of power.
Considering the cross subsidy contribution from categories other than
IP Sets and BJ/KJ Categories, the Commission determines the tariff for
IP Sets under LT4(a) category as follows:
cxxxvii
Approved CDT for IP Sets for FY18
Particulars MESCOM
Approved ARR in Rs. Crore 3073.36
Revenue from other than IP & BJ/KJ
installations in Rs. Crore 2339.56
Amount to be recovered from IP &
BJ/KJ installations in Rs. Crore 733.80
Approved Sales to BJ/KJ installations in
MU 44.92
Revenue from BJ/KJ installations at
Average Cost of supply in Rs. crore 29.24
Amount to be recovered from IP Sets
category in Rs. crore 704.56
Approved Sale to IP Sets in MU 1352.32
Commission Determined Tariff (CDT) for
IP set Category for FY18 in Rs/Unit 5.21
Accordingly, the Commission decides to approve tariff of Rs.5.21 per
unit as CDT for FY18 for IP Set category under LT4 (a). In case the GoK
does not release the subsidy in advance, a tariff of Rs.5.21 per unit shall
be demanded and collected from these consumers.
Approved by the Commission
LT-4 (a) Irrigation Pump Sets
Applicable to IP sets up to and inclusive of 10 HP
Details Approved by the Commission
Fixed charges per Month
Energy charges
Nil*
CDT (Commission Determined Tariff):
521 paise per unit
* In case the GoK does not release the subsidy in advance, a tariff of
Rs.5.21 per unit shall be demanded and collected from these
consumers.
The Commission has been issuing directives to ESCOMs for conducting
Energy Audit at the Distribution Transformer Centre (DTC)/feeder level
for properly assessment of distribution losses and to enable detection
and prevention of commercial loss. In view of substantial progress in
implementation of feeder segregation under NJY scheme, the ESCOMs
were also directed to submit IP set consumption on the basis of the
meter readings of the 11 kV feeders at the substation level duly
cxxxviii
deducting the energy losses in 11kV lines, distribution transformers & LT
lines, in order to compute the consumption of power by IP sets
accurately. Further, in the Tariff Order 2016, the ESCOMs were also
directed to take up enumeration of IP sets, 11 KV feeder-wise by
capturing the GPS co-ordinates of each live IP set in their
jurisdiction. In this regard, the Commission has noted that the ESCOMs
have complied partly with these directions and they have initiated
measures to achieve full compliance. The ESCOMs need to ensure full
compliance as this has direct impact on their revenues and tariff
payable by other categories of consumers.
For the forgoing reasons, the Commission directs the ESCOMs as
follows:
The ESCOMs shall manage supply of power to the IP sets for the FY18,
so as to ensure that it is within the quantum of subsidy committed by
the GoK. They shall procure power which is proportional to such supply.
In case the ESCOMs opt to supply power to the IP sets in excess of the
quantum corresponding to the amount of subsidy the GoK has assured
to be released for FY18, the difference in the amount of subsidy relating
to such supply shall be claimed from the GoK. If the difference in
subsidy is not paid by the GoK, the same has to be collected from the
IP set consumers.
LT4 (b) Irrigation Pump Sets above 10 HP:
MESCOM’s Proposal
The Existing and proposed tariff for LT-4(b) are as follows:
LT-4 (b) Irrigation Pump Sets:
Applicable to IP Sets above 10 HP
Details Existing as per 2016 Tariff
Order
Proposed by MESCOM
Fixed charges per
Month
Rs.40 per HP Rs.40 per HP
Energy charges for the
entire consumption
280 paise per unit 428 paise per unit
The existing and proposed tariff for LT4(c) are as follows:
cxxxix
LT-4 (c) (i) - Applicable to Private Horticultural Nurseries, Coffee, Tea
& Rubber plantations up to & inclusive of 10 HP
Details Existing as per 2016 Tariff
Order
Proposed by MESCOM
Fixed charges per
Month
Rs.30 per HP Rs.30 per HP
Energy charges for
the entire
consumption
280 paise per unit 428 paise per unit
LT-4 (c) (ii) - Applicable to Private Horticultural Nurseries, Coffee, Tea &
Rubber plantations above 10 HP
Details Existing as per 2016 Tariff
Order
Proposed by MESCOM
Fixed charges per
Month
Rs.40 per HP Rs.40 per HP
Energy charges for
the entire
consumption
280paise per unit 428paise per unit
Approved Tariff:
The Commission decides to revise the tariff in respect of these
categories as shown below:
LT-4 (b) Irrigation Pump Sets:
Applicable to IP Sets above 10 HP
Fixed charges per Month Rs.50 per HP
Energy charges for the entire
consumption
300 paise/unit
LT4(c) (i) - Applicable to Horticultural Nurseries,
Coffee, Tea &Rubber plantations up to & inclusive of 10 HP
Fixed charges per Month Rs.40 per HP
Energy charges 300 paise / unit
LT4 (c)(ii) - Applicable to Horticultural Nurseries, Coffee, Tea&
Rubber plantations above 10 HP
Fixed charges per Month Rs.50 per HP
Energy charges 300 paise/unit
5. LT5 Installations-LT Industries:
MESCOM’s Proposal:
The existing and proposed tariffs are given below:
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LT-5 (a) LT Industries:
Applicable to arrears under City Municipal Corporation
i) Fixed charges
Details Existing as per 2016 Tariff Order Proposed by MESCOM
Fixed
charges
per Month
i) Rs. 30 per HP for 5 HP & below
ii) Rs. 35 per HP for above 5 HP
& below 40 HP
iii) Rs. 40 per HP for 40 HP &
above but below 67 HP
iv)Rs. 100 per HP for 67 HP &
above
i) Rs. 30 per HP for 5 HP & below
ii) Rs. 35 per HP for above 5 HP &
below 40 HP
iii) Rs. 40 per HP for 40 HP &
above but below 67 HP
iv)Rs. 100 per HP for 67 HP &
above
Demand based Tariff (Optional)
Details Description Existing Tariff as per
2016 Tariff Order
Proposed by
MESCOM
Fixed
Charg
es per
Month
Above 5 HP and less
than 40 HP
Rs.50 per KW of billing
demand
Rs.50 per KW of
billing demand
40 HP and above but
less than 67 HP
Rs.65 per KW of billing
demand
Rs.65 per KW of
billing demand
67 HP and above Rs.150 per KW of
billing demand
Rs.150 per KW of
billing demand
ii) Energy Charges
Details Existing as per 2016
Tariff Order
Proposed by MESCOM
For the first 500 units 495 paise per unit 643 paise/ unit
For next 500 units 585 paise per unit 733 paise /unit
For the balance unit 615 paise per unit 763 paise /unit
LT-5 (b) LT Industries:
Applicable to all areas other than those covered under LT-5(a)
i) Fixed charges
Details Existing as per 2016 Tariff Order Proposed by MESCOM
cxli
Demand based Tariff (optional)
Details Description Existing Tariff as per
2016 Tariff Order
Proposed by
MESCOM Fixed Charges per Month
Above 5 HP and
less than 40 HP
Rs.50 per KW of
billing demand
Rs.50 per KW of
billing demand
40 HP and above
but less than 67 HP
Rs.65 per KW of
billing demand
Rs.65 per KW of
billing demand
67 HP and above Rs.150 per KW of
billing demand
Rs.150 per KW of
billing demand
ii) Energy Charges
Details Existing as per 2016 Tariff
Order
Proposed by
MESCOM
For the first 500 units 485 paise per unit 633 paise/ unit
For the next 500 units 570 paise per unit 718 paise/ unit
For the balance units 600 paise per unit 748 paise/ unit
Existing ToD Tariff for LT5 (a) & (b): At the option of the consumers
ToD Tariff
Time of Day Increase (+ )/ reduction (-) in energy
charges over the normal tariff applicable
22.00 Hrs to 06.00 Hrs (-) 125 paise per unit
06.00 Hrs to 18.00 hrs 0
18.00 Hrs to 22.00 Hrs (+) 100 paise per unit Proposed ToD Tariff for LT5 (a) & (b): At the option of the consumers
ToD Tariff
Time of Day Increase (+ )/ reduction (-) in energy
charges over the normal tariff applicable
06.00 Hrs to 10.00 Hrs (+) 100 paise per unit
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 hrs (+) 100 paise per unit
22.00 Hrs to 06.00 Hrs 0
Commission’s Decision:
Time of the Day Tariff:
The decision of the Commission in its earlier Tariff Orders, providing for
mandatory Time of Day Tariff for HT2(a), HT2(b) and HT2(c) consumers
Fixed Charges per Month
i)Rs.30 per HP for 5 HP &
below
ii) Rs.35 per HP for above 5 HP
& below 40 HP
iii) Rs.40 per HP for 40 HP &
above but below 67 HP
iv)Rs.100 per HP for 67 HP &
above
i) Rs.30 per HP for 5 HP &
below
ii) Rs.35 per HP for above 5
HP & below 40 HP
iii) Rs.40 per HP for 40 HP &
above but below 67 HP
iv)Rs.100 per HP for 67 HP &
above
cxlii
with a contract demand of 500 KVA and above is continued. The
optional ToD will continue as existing for HT2(a), HT2(b) and HT2(c)
consumers with contract demand of less than 500 KVA. Further, for LT5
and HT1 consumers, the optional ToD is continued as existing.
The Commission has decided to continue with two tier tariff structure
introduced in the previous Tariff Orders, which are as follows:
i) LT5 (a): For areas falling under City Municipal Corporations
ii) LT5 (b): For areas other than those covered under LT5 (a) above.
Approved Tariff:
The Commission approves the tariff under LT 5 (a) and LT 5 (b) as given
below:
Approved Tariff for LT 5 (a):
Applicable to areas under City Municipal Corporations
i) Fixed charges
Details Approved by the Commission
Fixed
Charges per
Month
i) Rs.40 per HP for 5 HP & below
ii) Rs.45 per HP for above 5 HP & below 40 HP
iii) Rs.60 per HP for 40 HP & above but below 67 HP
iv) Rs.120 per HP for 67 HP & above
Demand based Tariff (optional)
Fixed
Charges per
Month
Above 5 HP and less than 40
HP
Rs.60 per KW of billing
demand
40 HP and above but less
than 67 HP
Rs.85 per KW of billing
demand
67 HP and above Rs.170 per KW of billing
demand
ii) Energy Charges
Details Approved by the Commission
For the first 500 units 510 paise/unit
For the next 500 units 605 paise/ unit
For the balance units 635 paise/ unit
Approved Tariff for LT 5 (b):
Applicable to all areas other than those covered under LT-5(a)
i) Fixed charges
cxliii
Details Approved Tariff
Fixed
Charges
per Month
i) Rs.35 per HP for 5 HP & below
ii) Rs.40 per HP for above 5 HP & below 40 HP
iii) Rs.55 per HP for 40 HP & above but below 67 HP
iv)Rs.110 per HP for 67 HP & above
ii) Demand based Tariff (optional)
Details Description Approved Tariff
Fixed Charges per
Month
Above 5 HP and
less than 40 HP
Rs.55 per KW of billing
demand
40 HP and above
but less than 67 HP
Rs.80 per KW of billing
demand
67 HP and above Rs.160 per KW of billing
demand
cxliv
iii) Energy Charges
Details Approved tariff
For the first 500 units 500 paise/ unit
For the next 500 units 590 paise/ unit
For the balance units 620 paise/unit
As discussed earlier in this Chapter, the approved ToD Tariff for LT5 (a) & (b): At the option of the consumers
ToD Tariff
Time of Day Increase (+ )/ reduction (-) in energy
charges over the normal tariff applicable
06.00 Hrs to 10.00 Hrs (+) 100 paise per unit
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 hrs (+) 100 paise per unit
22.00 Hrs to 06.00 Hrs (-) 100 paise per unit
6. LT6 Water Supply Installations and Street Lights:
MESCOM’s Proposal:
The existing and the proposed tariffs are given below:
LT-6(a) : Water Supply
Details Existing as per 2016 Tariff
Order
Proposed by MESCOM
Fixed charges per
Month
Rs.45/HP/month Rs.45/HP/month
Energy charges 390 paise/unit 538 paise/unit
LT-6 (b) : Public Lighting
Details Existing as per 2016 Tariff
Order
Proposed by MESCOM
Fixed charges per
Month
Rs.60/KW/month Rs.60/KW/month
Energy charges
without LED bulbs
550 paise/unit 698 paise/unit
Energy charges for
LED / Induction
450 paise/unit 598 paise/unit
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The Commission approves the tariff for these categories are as follows:
Tariff Approved by the Commission for LT-6 (a): Water supply
Details Approved Tariff
Fixed Charges per Month Rs.55/HP/month
Energy charges 425 paise/unit
Tariff Approved by the Commission for LT-6 (b): Public Lighting
Details Approved Tariff
Fixed charges per Month Rs.70 /KW/month
Energy charges 585 paise/unit
Energy charges for LED /
Induction Lighting
485 paise/unit
7. LT 7- Temporary Supply & Permanent supply to Advertising Hoardings:
MESCOM’s Proposal:
The existing rate and the proposed rate are given below:
Tariff Schedule LT-7(a) Applicable to Temporary power Supply for all purposes.
a) Less than 67
HP:
Energy charge at 950
paise per unit subject
to a weekly minimum
of Rs.170 per KW of
the sanctioned load.
Energy charge at 1098 paise
per unit subject to a weekly
minimum of Rs.170 per KW of
the sanctioned load.
TARIFF SCHEDULE LT-7(b)
Applicable to power supply to Hoardings & Advertisement boards
on Permanent connection basis.
a) Less than 67
HP:
Fixed Charge Rs.50 per
KW/ month of the
sanctioned load.
Fixed Charge Rs.50 per KW/
month of the sanctioned
load.
Energy charge at 950
paise per unit
Energy charge at 1098
paise per unit
Commission’s decision
Details Existing as per 2016
Tariff Order
Proposed by MESCOM
Details Existing as per 2016 Tariff
Order
Proposed by MESCOM
cxlvi
As decided in the previous Tariff Order, the tariff specified for
installations with sanctioned load / contract demand above 67 HP
shall be covered under the HT temporary tariff category under HT5.
With this, the Commission decides to approve the tariff for LT-7
category as follows:
TARIFF SCHEDULE LT-7(a)
Applicable to Temporary Power Supply for all purposes.
LT 7(a) Details Approved Tariff
Temporary Power
Supply for all
purposes.
Less than 67 HP:
Energy charges at 1000 paise / unit
subject to a weekly minimum of Rs.190
per KW of the sanctioned load.
TARIFF SCHEDULE LT-7(b)
Applicable to Hoardings & Advertisement boards, Bus Shelters with
Advertising Boards, Private Advertising Posts / Sign boards in the
interest of public such as Police Canopy Direction boards, and other
sign boards sponsored by Private Advertising Agencies / firms on
permanent connection basis.
LT 7(b) Details Approved Tariff
Power supply on
permanent
connection basis
Less than 67 HP:
Fixed Charges at Rs.60 per KW / month
Energy charges at 1000 paise / unit
H.T. Categories:
Time of Day Tariff (ToD)
The Commission decides to continue the mandatory Time of Day Tariff
for HT2 (a), HT-2(b) and HT2(c) consumers with a contract demand
of 500 KVA and above. Further, the optional ToD will continue as
existing for HT2 (a), HT-2(b) and HT2 (c) consumers with contract
demand of less than 500 KVA. The details of ToD tariff are indicated
under the respective tariff category.
8. HT1- Water Supply & Sewerage
MESCOM’s Proposal:
The existing and proposed tariff are as given below:
cxlvii
The Existing and the proposed tariff – HT-1 Water Supply and Sewerage
Installations
Sl.
No.
Details Existing tariff as per
2016Tariff Order
Proposed Tariffs by
MESCOM dated
31.11.2016
Revised proposed tariff
by MESCOM as per
petition dated
08.02.2017.
1 Demand
charges
Rs.190 / kVA of
billing demand /
month
Rs.190 / kVA for
billing demand /
month
Rs.250 / kVA for billing
demand / month
2 Energy
charges
450 paise per unit 598 paise per unit 440 paise per unit
Existing ToD tariff to HT-1 tariff to Water Supply & Sewerage installations at the option of the consumer
22.00 Hrs to 06.00 Hrs next day (-) 125 Paise per unit
06.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs (+) 100 Paise per unit
Proposed ToD Tariff to HT-1 category:
Time of day Increase (+) / reduction (-) in the energy
charges over the normal tariff applicable
06.00 Hrs to 10.00 Hrs (+) 100 Paise per unit
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs (+) 100 Paise per unit
22.00 Hrs to 06.00 Hrs 0
Commission’s decision:
As discussed earlier in this chapter, the Commission approves the tariff for HT 1 Water Supply & Sewerage
category as below:
Details Approved Tariff for HT 1
Demand
charges
Rs.200 / kVA of billing demand / month
Energy charges 485 paise/ unit
As discussed earlier in this chapter, the approved ToD tariff to HT-1 tariff to
Water Supply & Sewerage installations at the option of the consumer is as
follows
06.00 Hrs. to 10.00 hours (+) 100 paise per unit
10.00 Hrs to 18.00 Hrs 0
Time of day Increase (+) / reduction (-) in the energy
charges over the normal tariff applicable
Time of day Increase (+) / reduction (-) in the energy
charges over the normal tariff applicable
cxlviii
18.00 Hrs to 22.00 Hrs (+)100 paise per unit
22.00 Hrs to 06.00 Hrs next day (-) 100 paise per unit
9. HT2 (a) – HT Industries & HT 2(b) – HT Commercial
MESCOM’s Proposal:
The existing and proposed tariff are as given below:
HT – 2 (a) HT Industries
Applicable to all areas of MESCOM
Details Existing tariff as
per Tariff Order
2016
Proposed Tariff by
MESCOM dated
30.11.2016
Revised proposed tariff by
MESCOM as per petition
dated 08.02.2017.
Demand charges Rs. 180 / kVA of
billing demand /
month
Rs. 180 / kVA of billing
demand / month
Rs. 250 / kVA of billing
demand / month
Energy charges
(i) For the first
one lakh units
(ii) For the
balance units
620 paise per
unit
660 paise per
unit
768 paise per unit
808 paise per unit
580 paise per unit
620 paise per unit
Railway traction and Effluent Plants under HT2 (a).
Details Existing tariff as per
Tariff order 2016
Tariff Proposed by
MESCOM dated
30.11.2016
Revised proposed
tariff by MESCOM as
per petition dated
08.02.2017.
Demand
charges
Rs. 190 / kVA at billing
demand / month
Rs. 190 / kVA of billing
demand / month
Rs. 250 / kVA of billing
demand / month
Energy charges 590paise per unit for
all the units
738 paise per unit for
all the units
550 paise per unit for
all the units
Existing ToD Tariff for HT-2(a)
Time of day Increase (+) / reduction (-) in the energy
charges over the normal tariff applicable
22.00 Hrs to 06.00 Hrs next day (- )125 Paise per unit
06.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs (+) 100 Paise per unit
Proposed ToD Tariff for HT-2(a)
Time of day Increase (+) / reduction (-) in the energy
charges over the normal tariff applicable
06.00 Hrs to 10.00 Hrs (+) 100 Paise per unit
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs (+) 100 Paise per unit
22.00 Hrs to 06.00 Hrs 0
Commission’s Decision:
Approved Tariff for HT – 2 (a):
cxlix
As discussed earlier in this chapter, the Commission approves the tariff for HT 2(a) category as below:
Applicable to all areas under MESCOM
Details Tariff approved by the Commission
Demand charges Rs.200 / kVA of billing demand / month
Energy charges
For the first one lakh units 660 paise/ unit
For the balance units 680 paise/ unit
As discussed earlier in this chapter, the approved ToD tariff to HT2(a)(i) &
(ii) tariff.
06.00 Hrs. to 10.00 hours (+) 100 paise per unit
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs (+)100 paise per unit
22.00 Hrs to 06.00 Hrs (-)100 paise per unit
i) Railway Traction & Effluent Treatment Plants under both HT2(a)
Details Tariff approved by the Commission
Demand charges Rs. 210 / kVA of billing demand / month
Energy charges 620 paise / unit for all the units
10. HT-2 (b) HT Commercial
MESCOM’s Proposal:
The existing and proposed tariff are as given below:
Existing and proposed tariff HT – 2 (b) HT Commercial
Applicable to all areas of MESCOM
Details Existing tariff as per
Tariff Order 2016
Tariff Proposed by
MESCOM dated
30.11.2016
Revised proposed
tariff by MESCOM
as per petition
dated 08.02.2017.
Demand
charges
Rs.200 / kVA of
billing demand /
month
Rs.200 / kVA of
billing demand /
month
Rs.250 / kVA of
billing demand /
month
Energy charges
(i) For the first
two lakh units
785paise per unit
933paise per unit
770 paise per unit
(ii)For the
balance units
815paise per unit 963paise per unit 800 paise per unit
Existing ToD Tariff for HT-2(b)
Time of day Increase (+) / reduction (-) in the energy
charges over the normal tariff applicable
Time of day Increase (+) / reduction (-) in the energy
charges over the normal tariff applicable
cl
22.00 Hrs to 06.00 Hrs next day (- )125 Paise per unit
06.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs (+) 100 Paise per unit
Proposed ToD Tariff for HT-2(b)
Time of day Increase (+) / reduction (-) in the energy
charges over the normal tariff applicable
06.00 Hrs to 10.00 Hrs (+) 100 Paise per unit
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs (+) 100 Paise per unit
22.00 Hrs to 06.00 Hrs 0
Commission’s Decision
The Commission notes the issue raised by the consumer of Diagnostic
centres and their request to classify under HT-2(c)(ii) category. The
Commission examined the issue in detail and decided to classify the HT
power supply to Diagnostic centres running on commercial lines under
HT-2(b) category.
As discussed earlier in this chapter, the Commission approves the
following tariff for HT 2 (b) consumers:
Approved tariff for HT – 2 (b) - HT Commercial
Applicable to all areas of MESCOM
Details Tariff approved by the Commission
Demand charges Rs.220 / kVA of billing demand / month
Energy charges
(i) For the first two lakh
units
825 paise per unit
(ii) For the balance units 835 paise per unit
Note: The above tariff under HT2 (b) is not applicable for construction of new
industries. Such power supply shall be availed only under the temporary
category HT5.
Approved ToD Tariff for HT-2(b)
06.00 Hrs. to 10.00 hours (+) 100 paise per unit
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs (+)100 paise per unit
22.00 Hrs to 06.00 Hrs next day (-)100 paise per unit
11. HT – 2 (c) – Applicable to Hospitals and Educational Institutions:
Time of day Increase (+) / reduction (-) in the energy
charges over the normal tariff applicable
cli
The existing and proposed tariff are given below:
clii
Existing and proposed tariff for HT – 2 (c) (i)
Applicable to Government Hospitals & Hospitals run by Charitable Institutions & ESI
Hospitals
and
Universities, Educational Institutions belonging to Government, Local Bodies and
Aided Institutions and Hostels of all Educational Institutions
Details Existing tariff as per
Tariff Order 2016
Tariff Proposed by
MESCOM dated
30.11.2016
Revised proposed tariff
by MESCOM as per
petition dated
08.02.2017.
Demand charges Rs.180 / kVA of billing
demand / month
Rs.180 / kVA of billing
demand / month
Rs.250 / kVA of billing
demand / month
Energy charges
(i) For the first one
lakh units
600 paise per unit 748 paise per unit 580 paise per unit
(ii) For the balance
units
650 paise per unit 798 paise per unit 630 paise per unit
Existing and proposed tariff for HT – 2 (c) (ii) –
Applicable to Hospitals and Educational Institutions other than those covered under
HT2(c) (i)
Details Existing tariff as per
Tariff Order 2016
Tariff Proposed by
MESCOM dated
30.11.2016
Revised proposed tariff
by MESCOM as per
petition dated
08.02.2017.
Demand charges Rs. 180 / kVA of
billing demand /
month
Rs. 180 / kVA of
billing demand /
month
Rs. 250 / kVA of billing
demand / month
Energy charges
(i) For the first one
lakh units
700 paise per unit 848paise per unit 680 paise per unit
(ii) For the balance
units
750 paise per unit 898paise per unit 730 paise per unit
Existing ToD Tariff for HT-2(c)(i) & (ii)
Time of day Increase (+) / reduction (-) in the energy
charges over the normal tariff applicable
22.00 Hrs to 06.00 Hrs next day (- )125 Paise per unit
06.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs (+) 100 Paise per unit
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Proposed ToD Tariff for HT-2 HT-2(c)(i) & (ii)
Time of day Increase (+) / reduction (-) in the energy
charges over the normal tariff applicable
06.00 Hrs to 10.00 Hrs (+) 100 Paise per unit
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs (+) 100 Paise per unit
22.00 Hrs to 06.00 Hrs 0
Commission’s Decision:
The Commission approves the following tariff for HT2(c) consumers.
Approved tariff for HT – 2 (c) (i)
Applicable to Government Hospitals, Hospitals run by Charitable Institutions, ESI
Hospitals,
Universities and Educational Institutions belonging to Government& Local Bodies,
Aided Educational Institutions and Hostels of all Educational Institutions
Details Approved Tariff
Demand charges Rs.200/ kVA of billing demand / month
Energy charges
(i) For the first one lakh units 640 paise per unit
(ii) For the balance units 680 paise per unit
Approved tariff for HT – 2 (c) (ii) Applicable to Hospitals/Educational Institutions other than those covered under
HT2(c) (i)
Details Approved Tariff
Demand charges Rs.200 / kVA of billing demand / month
Energy charges
(i) For the first one lakh units 740 paise per unit
(ii) For the balance units 780 paise per unit
As discussed earlier in this Chapter approved ToD for Tariff to HT-2(c)
(i) & (ii)
06.00 Hrs. to 10.00 hours (+) 100 paise per unit
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs (+)100 paise per unit
22.00 Hrs to 06.00 Hrs next day (-)100 paise per unit
Time of day Increase (+) / reduction (-) in the energy
charges over the normal tariff applicable
cliv
12. HT-3(a) Lift Irrigation Schemes under Government Departments /
Government owned Corporations/ Lift Irrigation Schemes under Pvt.
Societies:
The existing and proposed tariff are given below:
Existing and proposed tariff for HT – 3 (a) –Lift Irrigation Schemes
HT 3(a) (i) Applicable to LI Schemes under Government Departments /
Government owned Corporations
Details Existing charges as per Tariff
Order 2016
Proposed charges by
MESCOM
Energy
charges/
Minimum
charges
200 paise / unit
Subject to an annual minimum
of Rs.1120 per HP / annum
348 paise / unit
Subject to an annual
minimum of Rs. 1120
per HP / annum
HT 3(a) (ii) Applicable to Pvt. LI Schemes and Lift Irrigation Societies:
Fed through Express / Urban feeders
Details Existing Tariff as per Tariff
Order 2016
Proposed by MESCOM
Fixed charges Rs. 40 / HP / Month of
sanctioned load
Rs. 40 / HP / Month of
sanctioned load
Energy charges 200paise / unit 348 paise / unit
HT 3(a) (iii) Applicable to Pvt. LI Schemes and Lift Irrigation Societies:
other than those covered under HT-3 (a)(ii)
Details Existing Tariff as per Tariff
Order 2016
Proposed by MESCOM
Fixed charges Rs.20 / HP / Month of
sanctioned load
Rs.20 / HP / Month of
sanctioned load
Energy charges 200paise / unit 348paise / unit
Commission’s Decision:
The Commission approves the following tariff for HT3(a) consumers:
clv
Approved tariff for HT 3 (a) (i)
Applicable to LI schemes under Govt. Dept. / Govt. owned Corporations
Energy charges /
Minimum charges
225 paise/ unit subject to an annual
minimum of Rs. 1240 per HP / annum
Approved tariff for HT 3 (a) (ii)
Applicable to Private LI Schemes and Lift Irrigation Societies fed through
express/ urban feeders
Fixed charges Rs.50 / HP / Month of sanctioned load
Energy charges 225 paise / unit
Approved tariff for HT 3 (a) (iii)
Applicable to Private LI Schemes and Lift Irrigation Societies
other than those covered under HT 3 (a) (ii)
Fixed charges Rs.30 / HP / Month of sanctioned load
Energy charges 225 paise / unit
13. HT3 (b) Irrigation & Agricultural Farms, Government Horticulture farms,
Private Horticulture Nurseries, Coffee, Tea, Coconut & Arecanut
Plantations:
MESCOM’s Proposal:
The existing and the proposed tariff are given below:
HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,
Private Horticulture Nurseries, Coffee, Tea, Coconut & Arecanut
Plantations:
Details Existing Tariff Order 2016 Proposed tariff by
MESCOM
Energy charges /
minimum
charges
400 paise / unit subject to
an annual minimum of
Rs.1120 per HP of
sanctioned load
548 paise / unit subject to
an annual minimum of
Rs.1120 per HP of
sanctioned load
Commission’s Decision
The Commission approves the tariff for this category as indicated
below:
clvi
Approved Tariff
HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,
Private Horticulture Nurseries, Coffee, Tea, Rubber, Coconut & Arecanut
Plantations:
Details Approved Tariff
Energy charges /
minimum charges
425 paise / unit subject to an
annual minimum of Rs.1240 per
HP of sanctioned load
14. HT4- Residential Apartments/ Colonies:
MESCOM’s Proposal:
The existing and the proposed tariff for this category are given below:
Existing and proposed tariff for HT – 4 - Residential Apartments/
Colonies HT – 4 Applicable to all areas.
Details Existing Tariff Order
2016
Tariff Proposed by
MESCOM dated
30.11.2016
Revised proposed
tariff by MESCOM as
per petition dated
08.02.2017.
Demand charges Rs.110 / kVA of billing
demand
Rs.110 / kVA of
billing demand
Rs.250 / kVA of
billing demand
Energy charges 585 paise per unit 733 paise/ unit 530 paise/ unit
Commission’s Decision
As discussed earlier in this chapter, the Commission approves the tariff
for this category as indicated below:
Approved tariff
HT – 4 Residential Apartments/ Colonies Applicable to all areas
Demand charges Rs.120 / kVA of billing demand
Energy charges 620 paise/ unit
15. TARIFF SCHEDULE HT-5
MESCOM’s Proposal:
The existing and the proposed tariffs are given below:
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HT – 5 – Temporary supply
67 HP and above: Existing Proposed
Fixed charges /
Demand Charges
Rs.220/HP/month for the
entire sanction load /
contract demand
Rs.220/HP/month for the
entire sanction load /
contract deman
Energy Charge 950 paise / unit (weekly
minimum of Rs.160/- per
KW is not applicable)
1098 paise / unit (weekly
minimum of Rs.160/- per
KW is not applicable)
Commission’s Views/Decisions:
TARIFF SCHEDULE HT-5
(i) As approved in the Commission’s Tariff Order dated 6th May,
2013, this Tariff is applicable to 67 HP and above hoardings,
advertisement boards and construction power for industries
excluding those category of consumers covered under HT2(b)
Tariff schedule availing power supply for construction power for
irrigation and power projects and also applicable to power
supply availed on temporary basis with the contract demand of
67 HP and above of all categories.
Approved Tariff for HT – 5 – Temporary supply
67 HP and above: Approved Tariff
Fixed Charges /
Demand Charges
Rs.240 /HP/month for the entire sanction load /
contract demand
Energy Charges 1000 paise / unit
The Approved Tariff schedule for FY18 is enclosed in Annex – IV of this
Order.
6.6 Wheeling and Banking Charges: MESCOM in their tariff petition have proposed Wheeling charges in cash
for HT network at 34 paise/unit and for LT network at 80 paise/unit in
addition to HT network technical loss at 4.40% and LT network technical
loss at 5.27 %.
clviii
The Commission in its preliminary observation had directed MESCOM to
include in its petition that, for NCE sources the prevailing wheeling
charges would continue. However, MESCOM has not replied in the
matter.
The approach of the Commission regarding wheeling & banking charges
is discussed in the following paragraphs:
The Commission has considered the approved ARR pertaining to
distribution wires business and has proceeded determining the wheeling
charges as detailed below:
6.6.1 Wheeling within MESCOM Area:
The allocation of the distribution network costs to HT and LT networks for
determining wheeling charges is done in the ratio of 30:70, as was being
done earlier. Based on the approved ARR for distribution business, the
wheeling charges to each voltage level is worked out as under:
TABLE – 6.2
Wheeling Charges
Distribution ARR-Rs. Crs 365.86
Sales-MU 4724.16
Wheeling charges- paise/unit 77.44
Paise/unit
HT-network 23.23
LT-network 54.21
In addition to the above, the following technical losses are applicable
to all open access/wheeling transactions:
Loss allocation % loss
HT 4.36
LT 6.65
Note: Total loss is allocated to HT, LT & Commercial loss based on energy flow diagram furnished by MESCOM.
The actual wheeling charges payable (after rounding off) will depend
upon the point of injection & point of drawal as under:
paise/unit
Injection point
Drawal point
HT LT
clix
HT 23(4.36%) 77(11.01%)
LT 77(11.01%) 54(6.65%) Note: Figures in brackets are applicable loss
The wheeling charges as determined above are applicable to all the
open access or wheeling transactions for using the MESCOM network,
except for energy transmitted or wheeled from Renewable sources to
the consumers within the State.
6.6.2 WHEELING OF ENERGY USING TRANSMISSION NETWORK OR NETWORK OF
MORE THAN ONE LICENSEE
In case the wheeling of energy [other than RE sources wheeling to
consumers in the State] involves usage of Transmission network or
network of more than one licensee, the charges shall be as indicated
below:
i. If only transmission network is used, transmission charges
determined by the Commission shall be payable to the
Transmission Licensee.
ii. If the Transmission network and the ESCOMs’ network are used,
Transmission Charges shall be payable to the Transmission
Licensee. Wheeling Charges of the ESCOM where the power is
drawn shall be shared equally among the ESCOMs whose
networks are used.
Illustration:
If a transaction involves transmission network &MESCOM’s network and
100 units is injected, then at the drawal point the consumer is entitled
for 85.99 units, after accounting for Transmission loss of 3.37%
&MESCOM technical loss of 11.01%.
The Transmission charge in cash as determined in the Transmission Tariff
Order shall be payable to KPTCL & Wheeling Charge of 77 paise per
unit shall be payable to MESCOM. In case more than one ESCOM is
involved the above 77 paise shall be shared by all the ESCOMs
involved.
clx
iii. If ESCOMs’ network only is used, the Wheeling Charges of the
ESCOM where the power is drawn is payable and shall be
shared equally among the ESCOMs whose networks are used.
Illustration:
If a transaction involves injection to BESCOM’s network & drawal at
MESCOM’s network, and 100 units is injected, then at the drawal point
the consumer is entitled for 88.99 units, after accounting MESCOM’s
technical loss of 11.01%.
The Wheeling charge of 77 paise per unit applicable to MESCOM shall
be equally shared between MESCOM & BESCOM.
6.6.3 CHARGES FOR WHEELING OF ENERGY BY RE SOURCES (NON-REC ROUTE
) TO CONSUMERS IN THE STATE
The separate Orders issued by the Commission from time to time in the
matter of wheeling and banking charges for RE sources (non-rec route)
wheeling energy to consumers in the State shall be applicable.
6.6.4 CHARGES FOR WHEELING ENERGY BY RE SOURCS WHEELING ENERGY
FROM THE STATE TO A CONSUMER/OTHERS OUTSIDE THE STATE AND FOR
THOSE OPTING FOR RENEWABLE ENERGY CERTIFICATE[REC]
In case the renewable energy is wheeled from the State to a consumer
or others outside the State, the normal wheeling charges as
determined in para 6.6.1 and 6.6.2 of this Order shall be applicable. For
Captive RE generators including solar power projects opting for RECs,
the wheeling and banking charges as specified in the Orders issued by
the Commission from time to time shall be applicable.
6.6.5 BANKING CHARGES AND ADDITIONAL SURCHARGE
The Commission notes that all the ESCOMs except CESC, have filed
separate petitions seeking modifications to the existing banking facility.
Further, all the ESCOMs have filed petitions separately to introduce
additional surcharge. The above issues pertaining to banking facility
and additional surcharge are being dealt separately by the
Commission in those petitions. Till such time the Orders are passed in
clxi
those petitions, the existing banking facility shall be continued and no
additional surcharge is payable.
6.7 CROSS SUBSIDY SURCHARGE[CSS]:
MESCOM in its tariff petition has worked out the Cross Subsidy
surcharge as per the Tariff Policy-2016 and has worked out the
surcharges as indicated below at the proposed tariff:
Paise/unit
Voltage Level HT-1 HT-2a HT-2b HT-2C HT-4 HT-5
66KV &
above
114 366 480 367 242 638
HT level-33KV 121 372 487 373 248 644
HT level-11KV 144 395 510 396 271 667
The Commission in its preliminary observations had directed MESCOM
to delete the details of CSS worked out at page-62 and at Annexure-5,
in the petition based on actuals for FY16, as the CSS for FY-16 had
already been determined in the Tariff Order 2015 and the same is
binding.
MESCOM in its replies to rejoinder has stated that it has withdrawn the
CSS proposal for FY16 as filed at page-62 and at Annexure-5.
The determination of cross subsidy surcharge by the Commission is
discussed in the following paragraphs:
The Commission in its MYT Regulations has specified the methodology
for calculating the CSS as per Tariff Policy 2006. Meanwhile, the Central
Government has issued the new Tariff Policy 2016, wherein a revised
methodology has been specified for determining CSS. So far the
Commission, for determining the CSS had adopted the methodology
specified in the earlier Tariff Policy of 2006. However, considering that
such Tariff Policy has been replaced now by the Tariff Policy-2016 and
that a few ESCOMs including MESCOM have sought determination of
CSS under such new Tariff Policy, the Commission decides to adopt the
methodology specified in the latest Tariff Policy 2016 for determination
of CSS in this Tariff Order for FY18. Action shall be taken to amend the
relevant Regulations for adoption of the revised methodology for
determination of CSS. Based on this methodology, the category-wise
cross subsidy will be as indicated below:
clxii
Paise/unit
Particulars Category
Tariff
Average Cost
of supply @
66 kV and
above level*
Average
Cost of
supply at HT
level**
Cross subsidy
surcharge
paise/unit @ 66
kV & above level
as per formula
Cross subsidy
surcharge
paise/unit @
HT level as per
formula
20% of tariff
payable by
relevant
category
1 2 3 4 8 9 10
HT-1
Water
Supply
536.76 410.53 445.45 126.23 91.32 107.35
HT-2a
Industries 762.23
410.53 445.45 351.70 316.79 152.45
HT-2b
Commercial 962.09
410.53 445.45 551.56 516.64 192.42
HT-2 (C)(i) 735.84 410.53 445.45 325.31 290.40 147.17
HT-2 (C)(ii) 819.70 410.53 445.45 409.17 374.25 163.94
HT3 (a)(i)
Lift Irrigation 225.48
410.53 445.45 -185.05 -219.97 45.10
HT3 (a)(ii)
Lift Irrigation 318.06
410.53 445.45 -92.47 -127.38 63.61
HT3 (a)(iii)
Lift Irrigation 262.67
410.53 445.45 -147.86 -182.77 52.53
HT3 (b)
Irrigation &
Agricultural
Farms
426.55
410.53 445.45
16.02 -18.90 85.31
HT-4
Residential
Apartments
662.71
410.53 445.45 252.18 217.27 132.54
HT5
Temporary 1642.58
410.53 445.45 1232.05 1197.14 328.52
clxiii
* Includes weighted average power purchase costs of 347.33Ps/unit, transmission
charges of 51.09/unit and transmission losses of 3.37%.
** Includes weighted average power purchase costs of 347.33Ps/unit, transmission
charges of 51.09 Ps/unit and transmission losses of 3.37%, HT distribution network /
wheeling charges of 20.81Ps/unit and HT distribution losses of 3.77%. Note:
i. The carrying cost of regulatory asset for the current year is zero.
ii. Even though MESCOM has estimated CSS separately for 33kV and 11 kV, following a common
approach for all ESCOMs, the Commission has determined the CSS for HT level without
segregating 33kV and 11 kV.
As per the Tariff Policy 2016, while limiting the CSS so as not to exceed
20% of the tariff applicable to relevant category, the CSS (after
rounding off to nearest paise) is determined as under:
Cross Subsidy Surcharge for FY18
Paise/unit
Particulars
66 kV
&
above
HT level-11
kV/33kV
HT-1 Water Supply 107 91
HT-2a Industries 152 152
HT-2b Commercial 192 192
HT-2 (C)(i) 147 147
HT-2 (C)(ii) 164 164
HT3 (a)(i) Lift Irrigation 0 0
HT3 (a)(ii) Lift Irrigation 0 0
HT3 (a)(iii) Lift Irrigation 0 0
HT3 (b) Irrigation &
Agricultural Farms 16
0
HT-4 Residential Apartments 133 133
HT5 Temporary 329 329 Note: wherever CSS is negative, it is made zero
The cross subsidy surcharge determined in this order shall be
applicable to all open access/wheeling transactions in the area
coming under MESCOM. However, the above CSS shall not be
applicable to captive generating plant for carrying electricity to the
destination of its own use and for those renewable energy generators
who have been exempted from CSS by the specific Orders of the
Commission.
The Commission directs the Licensees to account the transactions under open
access separately.
clxiv
6.8 Other Issues:
6.8.1 Tariff for Green Power:
In order to encourage generation and use of green power in the State,
the Commission decides to continue the existing Green Tariff of 50
paise per unit as the additional tariff over and above the normal tariff
to be paid by HT-consumers, who opt for supply of green power from
out of the renewable energy procured by distribution utilities over and
above their Renewable Purchase Obligation (RPO).
6.9 Other tariff related issues:
i) Rebate for use of Solar Water Heater:
While some of the ESCOMs have requested to discontinue the Solar
rebate to consumers, the consumers have requested to increase
the Solar Rebate. Since the use of Solar Water Heaters is
advantageous to both the ESCOMs and the consumers, the
Commission has decided to retain the existing rebate of 50 paise
per unit subject to a maximum of Rs.50 per installation per month for
use of solar water heaters.
ii) Prompt payment incentive:
The Commission had approved a prompt payment incentive at the
rate of 0.25% of the bills amount (i) in all cases of payment through
ECS; and (ii) in the case of monthly bill exceeding Rs.1,00,000/-
(Rs.one lakh), where payment is made 10 days in advance of due
date and (iii) advance payment of exceeding Rs.1000 made by the
consumers towards monthly bills. The Commission decides to
continue the same.
iii) Relief to Sick Industries:
The Government of Karnataka has extended certain reliefs for
revival/rehabilitation of sick industries under the New Industrial
Policy 2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001.
Further, the Government of Karnataka has issued G.O No.CI2 BIF
2010, dated 21.10.2010. The Commission, in its Tariff Order 2002,
had accorded approval for implementation of reliefs to the sick
clxv
industries as per the Government policy and the same was
continued in the subsequent Tariff Orders. However, in view of issue
of the G.O No.CI2 BIF 2010, dated 21.10.2010, the Commission has
accorded approval to the ESCOMs for implementation of the
reliefs extended to sick industrial units for their revival / rehabilitation
on the basis of the orders issued by the Commissioner for Industrial
Development and Director of Industries & Commerce, Government
of Karnataka.
iv) Power Factor:
The Commission in its previous order had retained the PF threshold
limit and surcharge, both for LT and HT installations at the levels
existing as in the Tariff Order 2005. The Commission has decided to
continue the same in the present order as indicated below:
LT Category (covered under LT-3, LT-4, LT-5 & LT-6 where motive
power is involved): 0.85
HT Category: 0.90
v) Rounding off of KW / HP:
In its Tariff Order 2005, the Commission had approved rounding off
of fractions of KW / HP to the nearest quarter KW / HP for the
purpose of billing and the minimum billing being for 1 KW / 1HP in
respect of all the categories of LT installations including IP sets. This
shall continue to be followed. In the case of street light installations,
fractions of KW shall be rounded off to the nearest quarter KW for
the purpose of billing and the minimum billing shall be for a quarter
KW.
vi) Interest on delayed payment of bills by consumers:
The Commission, in its previous Order had approved interest on
delayed payment of bills at 12% per annum. The Commission
decides to continue the same in this Order also.
vii) Security Deposit (3 MMD/ 2 MMD):
clxvi
The Commission had issued the K.E.R.C. (Security Deposit)
Regulations, 2007 on 01.10.2007and the same has been notified in
the Official Gazette on 11.10.2007. The payment of security deposit
shall be regulated accordingly, pending orders of the Hon’ble High
Court in WP No.18215/2007.
viii) Mode of Payment by consumers:
The Commission, in its previous Order had approved revenue
payment in cash/cheque/DD of amounts up to and inclusive of
Rs.10,000/- and payment of amounts above Rs.10,000 to be made
only through cheque. The consumers can also make payment of
power bills through Electronic Clearing System(ECS)/ Credit card/
online E-payment up to the limit prescribed by the RBI,
RTGS/NEFT/on line E-Payment / Digital mode of payments as per
the guidelines issued by the RBI wherever such facility is provided
by the Licensee in respect of bill payments, up to the limit
prescribed by the RBI.
MESCOM in its application had proposed to consider the collection
of power supply bills above One lakh rupees, through RTGS/NEFT.
The Commission has examined the request of MESCOM, and
decides to approve the payment of power supply bills above One
lakh rupees, through RTGS/NEFT, at the option of the consumer.
6.10 Cross Subsidy Levels for FY18:
The Hon’ble Appellate Tribunal for Electricity (ATE), in its order dated
8th October, 2014, in Appeal No.42 of 2014, has directed the
Commission to clearly indicate the variation of anticipated
category-wise average revenue realization with respect to overall
average cost of supply in order to implement the requirement of the
Tariff Policy that tariffs are within ±20% of the average cost of supply,
in the tariff orders being passed in the future. It has further directed
the Commission to also indicate category-wise cross subsidy with
clxvii
reference to voltage-wise cost of supply so as to show the cross
subsidies transparently.
In the light of the above directions, the variations of the anticipated
category-wise average realization with respect to the overall
average cost of supply and also with respect to the voltage-wise
cost of supply of MESCOM and the cross subsidy thereon, is
Indicated in ANNEXURE- III of this Order. It is the Commission’s
endeavour to reduce the cross subsidies gradually as per the Tariff
policy.
6.11 Effect of Revised Tariff:
As per the KERC (Tariff) Regulations 2000, read with the MYT
Regulations 2006, the ESCOMs have to file their applications for
ERC/Tariff before 120 days of the close of each financial year in the
control period. The Commission observes that the ESCOMs have
filed their applications for revision of tariff on 30th November, 2016. As
the tariff revision is effective from 1st April, 2017 onwards, the ESCOMs
would be recovering revenue as per the revised tariff for eleven
months of the Financial Year (Except in case where the billing cycle
is lesser than a month).
A statement indicating the proposed revenue and approved
revenue is enclosed vide Annexure-III and detailed tariff schedule is
enclosed vide Annexure IV.
6.12 Summary of the Tariff Order:
The Commission has approved an ARR of Rs.3073.36 Crores for FY18,
which includes the deficit for FY16 of Rs.395.75 Crores with a net gap
in revenue of Rs.226.91 Crores as against MESCOM’s proposed ARR
of Rs.3558.09 Crores.
The Commission has allowed recovery of entire gap in revenue with
additional revenue of Rs.226.91 Crores on Tariff Revision as against
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the additional revenue of Rs.700.45 Crores proposed by MESCOM for
FY18.
MESCOM in its filing dated 30.11.2016 had proposed an increase of
148 paise per unit for all categories of consumers resulting in
average increase in retail supply tariff by 24.51%. The Commission
has approved an average increase of 48 paise per unit. The
average increase in retail supply tariff of all the consumers for FY18 is
8%.
MESCOM in its subsequent petition dated 08.02.2017, has
proposed to increase the demand charges and reduction of
energy charges for HT2(a), HT2(b), HT2(c) and HT4.
The Commission has allowed for recovery of additional
revenue partly by increase in fixed charges ranging from Rs.5
per KW/HP/KVA to Rs.20 per KW/HP/KVA.
The Commission has allowed for recovery of additional
revenue partly by increase in the energy charges in the range
of 15 paise per unit to 50 paise per unit.
The increase in the energy charge for domestic category up
to 30 to 100 units is 25/30 paise per unit.
The increase in the LT industries category is in the range of 15
paise per unit to 20 paise per unit and for other categories,
the increase is in the range of 20 paise per unit to 50 paise per
unit.
In order to increase the sales under HT industry and HT
commercial category, the increase made in energy charges
in 2nd slab is 20 paise per unit as against 40 paise per unit
increase in 1st slab for consumption upto 1 lakh / 2 lakh units
per month.
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Time of the day tariff which was made mandatory in the previous
Tariff Orders for installations under HT2 (a), HT2 (b) and HT2(c) with
contract demand of 500KVA and above is continued in this Order.
The Commission has introduced Time of Day billing for
morning peak period from 06.00 hours to 10.00 hours in
respect of LT/ HT consumers in addition to the prevailing ToD
billing.
A rebate of 50 paise per unit is allowed for effluent treatment
plant installed within the industrial premises under HT-2(a) tariff
schedule.
Green tariff of additional 50 paise per unit over and above
the normal tariff which was introduced a few year ago for HT
industries and HT commercial consumers at their option, to
promote purchase of renewable energy from ESCOMs, is
continued in this Order.
As in the previous Orders, the Commission has continued to
provide a separate fund for facilitating better Consumer
Relations /Consumer Education Programmes.
The Commission has decided to impose penalty upto Rs.one
lakh per sub division on MESCOM who fail to conduct
Consumer Interaction Meetings at least once in three months
and such penalty would be payable by the concerned
officers of the MESCOM.
6.13 Commission’s Order
1. In exercise of the powers conferred on the Commission under
Sections 62, 64 and other provisions of the Electricity Act, 2003, the
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Commission hereby determines and notifies the retail supply tariff
of MESCOM for FY18 as stated in Chapter-6 of this Order.
2. The tariff determined in this order shall be applicable to the
electricity consumed from the first meter reading date falling on or
after 1st April 2017.
3. Consequent to issue of this Tariff Order, the petition filed by
MESCOM vide OP.No.99 of 2016 and OP No.101 of 2016 stands
disposed of.
4. This Order is signed dated and issued by the Karnataka Electricity
Regulatory Commission at Bengaluru this day, the 11th April, 2017.
Sd/- Sd/- Sd/-
(M.K.Shankaralinge Gowda) (H.D. Arun Kumar) (D.B. Manival Raju)
Chairman Member Member
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APPENDIX
NEW DIRECTIVES
AND
REVIEW OF COMPLIANCE OF PREVIOUS DIRECTIVES ISSUED BY THE
COMMISSION
The following new directives are issued by the Commission:
i. Directive on conducting Consumers’ Interaction Meetings in the O
& M sub-divisions for redressal of consumer complaints:
During the Public Hearings held by the Commission to hear the
consumers on the ESCOMs’ Tariff applications, it was brought to
the notice of the Commission that the Consumer Interaction
Meetings chaired by the Superintending Engineers, in the O&M
sub-divisions are not being conducted by the ESCOMs regularly,
thus denying them of the opportunity to attend such meetings to
get their pending complaints pertaining to supply of electricity
resolved. Further, the consumers have urged the Commission to
impose penalty on the ESCOMs for their failure to conduct
Consumer Interaction meetings at the sub-divisional level to
address the consumer grievances.
The Commission also is of the view that if the ESCOMs conduct
consumer interaction meetings regularly, most of the grievances of
the consumers could be redressed in such meetings, to ensure
better and satisfactory service to the consumer.
Hence, the Commission hereby directs the MESCOM to conduct
Consumer Interaction Meetings chaired by the Superintending
Engineers, in the O&M sub-divisions according to a published
schedule, once in every three months with a view to providing a
forum to the consumers to get their grievances resolved. Further,
the consumers shall be invited to such meetings in advance
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through emails, letters, local newspapers etc., to facilitate
maximum consumers’ participation in such meetings. The
MESCOM is also directed to videograph the proceedings of such
meetings and to upload them on its website, for the information of
consumers.
Compliance in this regard shall be reported once in three months
to the Commission, indicating the name of the sub-division, the
number of consumers attending such meetings and the status of
redressal of their complaints.
If the MESCOM fails to conduct the Consumer Interaction Meetings
for redressal of consumer grievances as directed, the Commission
may consider imposing penalty of Rs one lakh on MESCOM for
such non-compliance, on case to case basis and the penalty shall
be recovered from the concerned Superintending Engineer who
fails to conduct such meetings, in the O&M sub-divisions.
ii. Directive on preparation of energy bills on monthly basis by
considering 15 minute’s time block period in respect of EHT/HT
consumers importing power through power exchange under Open
Access
The Commission has noticed that, year on year, there has been a
substantial increase in the number of EHT and HT consumers of the
distribution licensees opting for open access involving huge
volume of energy being procured through Power Exchanges,
which requires greater care by the SLDC, in the grid management.
Further, in accordance with the stipulations in Clause 6.3 (f) of the
Karnataka Electricity Grid Code (KEGC),2015, under Operation
Planning chapter regarding demand estimation for operational
purpose, the distribution licensee shall provide to the SLDC, on a
day ahead basis, at 09.00 hours each day, their estimated
demand for each 15-minute block, for the ensuing day. The
distribution licensee shall also provide to the SLDC, the estimates of
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loads that may be shed, when required, in discrete blocks, with the
details of arrangements of such load shedding. To comply with this
also, ESCOMs need to prepare monthly energy bills in respect of
EHT/HT consumers importing power through power exchange
under Open Access, by considering 15 minute’s time block.
In view of this, the Commission directs the MESCOM to prepare
energy bills on monthly basis by considering the 15 minute’s time
block period in respect of EHT/HT consumers importing power
through power exchange under Open Access. The MESCOM shall
implement the directive forthwith and the compliance regarding
the same shall be submitted monthly from May, 2017 onwards, to
the Commission, regularly.
2. Review of Compliance of Existing Directives:
The Commission had in its earlier Tariff Orders and other
communications issued several directives for compliance by the
MESCOM. While reproducing such directives, the compliance of
the directives as reported by the MESCOM is analyzed in this
Section.
i. Directive on Energy Conservation:
The Commission had directed the ESCOMs to service all the new
installations only after ensuring that the BEE ***** (Bureau of Energy
Efficiency five-star rating) rated Air Conditioners, Fans,
Refrigerators, etc., are being installed in the applicant consumers’
premises.
Similarly, all new streetlight/high mast installations including
extensions made to the existing streetlight circuits shall be serviced
only with LED lamps/energy efficient lamps like induction lamps.
Further, the Commission had directed the ESCOMs to take up
programmes to educate all the existing domestic, commercial and
industrial consumers, through media and distribution of pamphlets
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along with monthly bills, regarding the benefits of using five-star
rated equipment certified by the Bureau of Energy Efficiency in
reduction of their monthly electricity bills and conservation of
precious energy.
Compliance by the MESCOM:
The MESCOM has already distributed more than one lakh LED bulbs
of 9W capacity to its consumers. The MESCOM is also informing the
applicants seeking power supply, to use the BEE star rated
electrical appliances in their installations. A circular dated
26.07.2016 was issued to the field engineers to ensure that energy
efficient BEE 5 star rated electrical appliances are used by the
applicants.
The MESCOM has requested all the Municipal / local bodies to
mandatorily install LED streetlights for new installations and adopt
retrofitting of fluorescent lamps/sodium vapour lamps, in their
jurisdiction to enable saving the maximum quantum of energy.
Further, the MESCOM has sent a MoU to BEE, New Delhi, to study
and in turn submit a proposal of DSM project suitable for the
MESCOM. In reply, the BEE has stated that MESCOM will be
included in the new scheme, in future. In the meanwhile, TERI, New
Delhi, has come forward for conducting a system study/load
survey of 11kV feeders for proposing a suitable model project for
the MESCOM. Therefore, the work of system study and load survey
covering the entire geographical area of the MESCOM has been
entrusted to TERI in line with KERC, DSM Regulations, 2015 and the
data is being collected for the study.
Commission’s Views: The Commission notes that, the MESCOM has not submitted the
compliance regularly on implementation of the directive. It is also
observed from the MESCOM’s compliance that it has merely issued
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a circular to all its field engineers to ensure that BEE five-star rated
energy efficient appliances are used by the applicants. The
Commission is of the view that, merely issuing a circular is not
enough and that the MESCOM needs to verify whether there is any
real progress made in the field in servicing of the BEE star rated Air
Conditioners, Fans, Refrigerators, etc., in the applicant consumers’
premises. In this regard, the MESCOM shall review the
progress/status of implementation of the directive with the field
officers periodically.
Further, it is also important that the MESCOM takes up continuous
awareness programmes to educate the consumers about the
benefits of using the energy efficient appliances in their premises to
ensure that penetration of energy efficient appliances is increased
significantly, in its jurisdiction.
The Commission reiterates that the MESCOM shall service all the
new installations only after ensuring that the BEE ***** (Bureau of
Energy Efficiency five-star rating) rated Air Conditioners, Fans,
Refrigerators, etc., are being installed in the applicant consumers’
premises and the compliance thereon shall be reported to the
Commission once in a quarter regularly.
ii. Directive on implementation of Standards of Performance
(SoP):
The Directive was:
“The MESCOM is directed to strictly implement the specified
Standards of Performance while rendering services related to
supply of power as per the KERC (Licensee’s Standards of
Performance) Regulations, 2004. Further, the MESCOM is directed
to display prominently in Kannada the details of various critical
services such as replacing the failed transformers, attending to fuse
off calls / line breakdown complaints, arranging new services,
change of faulty energy meters, reconnection of power supply,
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etc., rendered by it as per Schedule-1 of the KERC (Licensee’s
Standards of Performance) Regulations, 2004 and Annexure-1 of
the KERC (Consumer Complaints Handling Procedure) Regulations,
2004, on the notice boards in all the O & M sections and O & M
sub-divisions in its jurisdiction for the information of consumers as
per the following format.
Nature of
Service
Standards of
performance
(indicative
minimum time
limit for rendering
services)
Primary
responsibility
centres where to
lodge complaint
Next higher
Authority
Amount
payable to
affected
consumer
The MESCOM shall implement the above directive within one
month from the date of the order and report compliance to the
Commission regarding the implementation of the directives.”
Compliance by the MESCOM:
It is submitted that, the MESCOM has displayed the details of
specified standards of performances for the information of the
consumers and public, on the notice boards of all the O&M section
and sub-division offices. The MESCOM is also adhering to the
specified Standards of Performance while rendering services to
consumers to ensure that complaints are being attended to in a
time bound manner as per the KERC (Licensee’s Standards of
Performance) Regulations, 2004.
Further, the MESCOM has already submitted the compliance for
the 1st and 2nd quarter of FY17, to the Commission and the 3rd
quarter report will be submitted during January 2017.
Commission’s Views:
The Commission notes that the MESCOM has reported that it has
complied with the directive by displaying the details of SoP in all its
O&M offices for the information of the consumers.
clxxvii
However, the consumers participating in the Public Hearings held on
the MESCOM’s Tariff revision proposals have stated that the
MESCOM, contrary to its submission before the Commission on
compliance of directive issued by the Commission, in reality has not
displayed the details of SoP on the notice boards in O&M offices.
They have sought the intervention of the Commission to ensure that
the MESCOM comply with the directive on SoP in toto.
The Commission views seriously the non-compliance of its directive
by the MESCOM and also considers this as a deliberate attempt on
its part to mislead the Commission by incorrect reporting. The
Commission warns that in future any such incorrect reporting will not
be tolerated and dealt with seriously. The Commission directs the
MESCOM to strictly monitor for implementation of the directive on
SoP in all its O&M offices within one month from the date of issue of
this Order and compliance reported thereon to the Commission
immediately thereafter. If the MESCOM fails to implement the
directive within the time period allowed, the Commission would be
constrained to initiate penal proceedings against the MESCOM
under section 142 of the Electricity Act, 2003, for non-compliance.
The Commission reiterates its directive to the MESCOM to continue
to strictly implement the specified SoP while rendering services
related to supply of power as per the KERC (Licensee’s Standards of
Performance) Regulations, 2004. The compliance regarding the
same shall be submitted to the Commission, regularly.
iii. Directive on use of safety gear by linemen:
The Directive issued was:
“The Commission directs the MESCOM to ensure that all the
linemen in its jurisdiction are provided with proper and adequate
safety gear and also ensure that the linemen use such safety gear
provided while working on the network. The MESCOM should
sensitise the linemen about the need for adoption of safety
aspects in their work through suitably designed training and
clxxviii
awareness programmes. The MESCOM is also directed to device
suitable reporting system on the use of safety gear and mandate
supervisory/higher officers to regularly cross check the compliance
by the linemen and take disciplinary action on the concerned if
violations are noticed. The MESCOM shall implement this directive
within one month from the date of this order and submit
compliance thereon to the Commission.”
Compliance by the MESCOM:
The MESCOM has provided all its 3,294 linemen with safety gear
such as rubber hand gloves, earthing rod, safety belt, rain coat
etc., to use in line work and has also initiated to provide additional
safety tools to linemen to facilitate them to carry out their work
safely. Further, instructions have been given for compulsory usage
of safety equipment while working on the network and supervisory
officers have been instructed to verify this during surprise visits to
work spots.
Further, the MESCOM has taken steps to increase the frequency of
imparting training to linemen so that adherence to safety aspects
becomes part of their routine. A training programme was arranged
on 05.11.2016 at Attavar, Mangaluru, to all Supervisory level
Engineers. Regular training programme to linemen is being
conducted at HRD center, Mangaluru, under REC Programme.
In this regard, compliance is being furnished to the Commission on
quarterly basis to review meetings.
Commission’s Views:
The Commission notes that the MESCOM has provided safety
gadgets to its linemen and initiated steps to provide additional
safety tools to facilitate them to carry out their work safely. The
MESCOM should attach paramount importance to focus on safety
aspects with a view to reduce the electrical accidents occurring
due to non-adherence to safety procedures while working on the
clxxix
network. Further, the linemen should be given training on
adherence to safety aspects so that it becomes part of their
routine.
The Commission reiterates its directive that the MESCOM shall
ensure that all the linemen in its jurisdiction are provided with
proper and adequate safety gear and the linemen use such safety
gear provided to them while working on the network. The
compliance in this regard shall be submitted once in a quarter to
the Commission regularly.
iv. Directive on providing Timer Switches to Streetlights by the
ESCOMs
The Commission directs the MESCOM to install timer switches using
own funds to all the streetlight installations in its jurisdiction
wherever the local bodies have not provided the same and later
recover the cost from them. The MESCOM shall also take up
periodical inspection of timer switches installed and ensure that
they are in working conditions. They shall undertake necessary
repairs / replacement work, if required and later recover the cost
from local bodies. The compliance regarding the progress of
installation of timer switches to streetlight installations shall be
reported to the Commission.
Compliance by the MESCOM:
As per the directives, the MESCOM has requested the
Municipal/local bodies, to service new streetlight installations and
any extension/modification to be carried out to the existing
streetlight installations only with timer switches. Further, local bodies
have provided 1,773 of timer switches to streetlights out of total
18,989 streetlight control points. The MESCOM has also invited
tender for fixing timer switches along with RRAMR meter to all
streetlight control points during 2016. However, no bids were
received till the closure date of tender. Therefore, the MESCOM is
planning to call retender for providing timer switches along with
RRAMR meter to all remaining 14,833 control points suitably
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designing the specifications for the tender. This will also include
remote reading of meters for billing and energy audit.
Commission’s Views:
It is noted that the MESCOM has not installed timer switches to
streetlight installations in its jurisdiction for ensuring prompt control
by switching “ON” & “OFF” at scheduled time and avoidance of
wastage of electricity.
The Commission reiterates that the MESCOM should install the timer
switches at its cost and recover the amount from the concerned
local bodies later. Further, persuading the local bodies to fix timer
switches at their own cost availing funds / grants received from
Government and other agencies for such programmes / works
should also be explored seriously. However, it seems that the
MESCOM has not taken the work of installation of timer switcher in
its jurisdiction seriously, going by the poor progress of the same.
The Commission reiterates its directive to MESCOM to provide timer
switches to the existing street lights and also directs MESCOM to
ensure that, all the new streetlight installations to be serviced and
any extension/modification to be carried out to the existing
streetlight installations shall be serviced only with timer switches
besides taking necessary action.
v. Directive on load shedding:
The Commission had directed that:
1. Load shedding required for planned maintenance of
transmission / distribution networks should be notified in daily
newspapers at least 24 hours in advance for the information of
consumers.
2. The ESCOMs shall on a daily basis estimate the hourly
requirement of power for each sub-station in their jurisdiction
clxxxi
based on the seasonal conditions and other factors affecting
demand.
3. Any likelihood of shortfall in the availability during the course of
the day should be anticipated and the quantum of load
shedding should be estimated in advance. Specific sub-stations
and feeders should be identified for load shedding for the
minimum required period with due intimation to the concerned
sub-divisions and sub-stations.
4. The likelihood of interruption in power supply with time and
duration of such interruption may be intimated to consumers
through SMS and other means.
5. Where load shedding has to be resorted to due to unforeseen
reduction in the availability of power, or for other reasons,
consumers may be informed of the likely time of restoration of
supply through SMS and other means.
6. Load shedding should be carried out in different sub-stations /
feeders to avoid frequent load shedding affecting the same
sub-stations / feeders.
7. The ESCOMs should review the availability of power with respect
to the projected demand for every month in the last week of the
previous month and forecast any unavoidable load shedding
after consulting other ESCOMs in the State about the possibility
of inter-ESCOM load adjustment during the month.
8. The ESCOMs shall submit to KERC their projections of availability
and demand for power and any unavoidable load shedding for
every succeeding month in the last week of the preceding
month for approval.
clxxxii
9. The ESCOMs shall also propose specific measures for minimizing
load shedding by spot purchase of power in the power
exchanges or bridging the gap by other means.
10. The ESCOMs shall submit to the Commission sub-station-wise and
feeder- wise data on interruptions in power supply every month
before the 5th day of the succeeding month.
The Commission had directed that the ESCOMs shall make every
effort to minimize inconvenience to consumers by strictly
complying with the above directions. The Commission had
indicated to review the compliance of directions on a monthly
basis for appropriate orders.
Compliance by the MESCOM:
It is submitted that, three phase and single phase power supply is
being arranged in all the districts of the MESCOM area, as per the
GoK order. Regarding scheduled load shedding for planned
maintenance of distribution networks, prior notification is being
given in daily newspapers for the information of the consumers and
week ahead district-wise planned maintenance of distribution
networks is also being published in the MESCOM website regularly.
As per the directive, MESCOM has taken care to avoid frequent
load shedding of 11 kV feeders to avoid inconvenience to
consumers/public.
Further, based on projections / availability of power as per the real
time data collected by the ALDC, the next day availability of
power is contemplated by the MESCOM. HT consumers are being
informed about future load shedding. The mobile numbers of all
consumers is being collected and after that the consumers
affected by power supply due to unavoidable load shedding will
be informed through mass messages.
Commission’s Views:
clxxxiii
The Commission notes that the MESCOM has not taken any definite
action for providing information to the consumers through SMS
regarding the time and duration of interruptions occurring due to
various reasons. As seen, there is no change in the status as
compared to the status in the last year and in reality MESCOM has
not made any headway in the matter. The MESCOM should
expedite this process as the consumers need to be informed
through SMS in addition to notification in newspaper media
regarding load shedding due to reasons such as system constraints,
breakdown of lines/equipment, maintenance etc. Further, it is also
necessary to avoid load shedding involving the same sub-
stations/feeders and the load shedding should be carried out on
rotation basis to avoid inconvenience to consumers/public.
The Commission directs the MESCOM to submit its projections of
availability and demand for power and any unavoidable load
shedding for every succeeding month in the last week of the
preceding month, to the Commission regularly.
The Commission reiterates that the MESCOM shall comply with the
directive on load shedding and submit compliance reports to the
Commission regularly.
vi. Directive on Establishing a 24x7 Fully Equipped Centralized
Consumer Service Center for Redressal of Consumer
Complaints:
The directive was:
“The MESCOM is directed to put in place a 24x7 fully equipped
Centralized Consumer Service Center at its Headquarters with a
state of the art facility/system for receiving consumer complaints
and monitoring their redressal so that electricity consumers in its
area of supply are able to seek and obtain timely and efficient
services/redressal in the matter of their grievances. Such a Service
Center shall have adequate number of desk operators in each shift
clxxxiv
so that consumers across the jurisdiction of MESCOM are able to
lodge their complaints directly with this Centre.
Every complaint shall be received on a helpline telephone number
by the desk operator and registered with a docket number which
shall be intimated to the Consumer. Thereafter, the complaints shall
be transferred online / communicated to the concerned field staff
for resolving the same. The concerned O&M / local service station
staff shall visit the complainant’s premises / fault location at the
earliest to attend to the complaints and then inform the
Centralized Service Centre that the complaint is attended. In turn,
the call centre shall call the complainant and confirm with him
whether the complaint has been attended to. The complaints
shall be closed only after receiving consumer’s /
complainant’s confirmation. Such a system should also generate
daily reports indicating the number / nature of complaints
received, complaints attended, complaints pending and reasons
for not attending to the complaints.
The MESCOM shall publish the details of the complaint handling
procedure / Mechanism with contact numbers in the local media
periodically for the information of the consumers. The compliance
of the action taken in the matter shall be submitted to the
Commission within two months from the date of this Order.
Further, the Commission directs the MESCOM to
establish/strengthen 24x7 service stations, equipping them with
separate vehicles & adequate line crew, safety kits and
maintenance materials at all its sub-divisions including rural areas
for effective redressal of consumer complaints”.
Compliance by the MESCOM:
The MESCOM has taken initiative to ensure prompt response by its
officials to consumer complaints regarding interruptions in power
clxxxv
supply due to breakdown of lines/equipment, failure of
transformers etc.
Consumer Interaction meetings are being regularly conducted at
sub-division levels under the chairmanship of Superintending
Engineer (Elec.) of the concerned O&M circle. Further, wide
publicity is being given in advance on conduction of consumer
interaction meetings, through leading newspapers and local
announcements. The MESCOM has conducted 60 Consumer
Interaction meetings at the sub-divisions during the period from
April to October, 2016.
Further, to address the issues/complaints raised by the consumers
and to create awareness among them, the MESCOM has
conducted awareness programme during FY15. Also, the
MESCOM has published a Kannada Hand Book and the same was
distributed to its consumers for creating awareness among them.
Wide publication of ‘Do’s & Don’ts of electricity usage are also
being given in daily newspapers and Audio jingles are being
announced in people concentrated areas like KSRTC Bus-stations
in MESCOM jurisdiction.
The MESCOM is conducting interaction meetings involving HT
consumers and Independent Power Producers every year to
resolve their grievances. Also, personal invitations in writing are
extended to the consumers/generators for such meetings.
The MESCOM has already established 39 full-fledged 24 hours’
service stations and 6 number of 12 hours’ service stations by
providing men, material and vehicle to redress the consumer
complaints effectively.
The MESCOM has established a 24*7 Centralized Consumer Service
Centre at Mangaluru and the complaints are being received from
all the consumers of MESCOM at this centre only. However, it will
be fully operational in January-February 2017 to receive complaints
clxxxvi
from consumers. The consumers are requested to call short code
number ‘1912’ to lodge their complaints related to electricity.
Further, the MESCOM has taken appropriate measures to
popularize the same through local newspapers and local TV
channels. The MESCOM has issued suitable instructions to its field
officers to attend to the complaints efficiently avoiding deliberate
delay on their part.
Commission’s Views:
The MESCOM should continue to focus on improving the consumer
services to reduce the consumer complaint downtime so as to
ensure that prompt services are extended to them. In this regard,
prompt response by the MESCOM is the need of the hour for
attending to consumer complaints regarding breakdown of
lines/equipment, failure of transformers etc., resulting in
interruptions in power supply. In addition to this, MESCOM should
take up necessary action to continuously sensitize its field staff so
that they gear up for discharging their work efficiently and
effectively.
The Commission reiterates its directive to the MESCOM to publish
the complaint handling procedures / contact number of the
Centralized Consumer Service Centre in the local media and other
modes periodically for the information of the public and ensure
that all the complaints of consumers are registered only through
the centralized consumer service centre for proper monitoring of
disposal of complaints registered. The compliance in this regard
shall be furnished regularly, to the Commission.
vii. Directive on Energy Audit:
The Commission had directed the MESCOM to prepare a metering
plan for energy audit to measure the energy received in each of
the interface points and to account for the energy sales. The
Commission had also directed the MESCOM to conduct energy
clxxxvii
audit and chalk out an action plan to reduce distribution losses to
a maximum of 15 per cent wherever it was above this level in
towns/cities having a population of over 50,000.
The Commission had earlier directed all the ESCOMs to complete
installation of meters at the DTCs by 31st December, 2010. In this
regard, ESCOMs were required to furnish to the Commission the
following information on a monthly basis:
a) Number of DTCs existing in the Company.
b) Number of DTCs already metered.
c) Number of DTCs yet to be metered.
d) Time bound monthly programme for completion of work.
Compliance by the MESCOM:
As per the directions of the Commission, intensive energy audit is
being conducted at the selected cities / towns. The distribution
losses in respect of the selected 7 cities are less than 5 per cent
whereas in 12 cities the loss is between 5-10 per cent. The details of
distribution loss in the selected cities/towns in FY16 and FY17 (up to
July16) are as below:
clxxxviii
Sl. No. City/Town FY16 FY17 (up to
July’16)
1 Mangaluru 4.17 1.46
2 Udupi 5.15 2.28
3 Shivamogga 7.72 8.92
4 Bhadravathi 9.21 8.24
5 Sagar 6.59 10.84
6 Chikamagaluru 10.44 8.35
7 Puttur 7.46 2.83
8 Bantwal 9.70 10.20
9 Shikaripura 10.50 4.62
10 Kadur 9.15 6.63
11 Tarikere 8.81 10.59
12 Beltangady 4.77 5.19
13 Sullia 7.46 2.14
14 Kundapura 4.08 6.63
15 Karkala 5.31 5.55
16 Soraba 10.08 13.32
17 Hosanagar 5.68 8.61
18 Thirthahalli 6.16 6.29
19 Mudigere 4.00 3.39
20 Koppa 4.72 5.40
21 Sringeri 4.80 4.70
22 NR Pura 4.85 5.29
The MESCOM has also issued work award for providing meters to
27,300 DTCs with automatic meter reading protocols. Hence,
the MESCOM is emphasizing the metering of DTCs for the
feeders which are having the losses above 15 per cent to take
up the energy audit on top priority in phased manner. The
MESCOM is carrying out the energy audit at division level & 11kV
feeder level, monthly and submitting the report regularly to the
Commission. Further, efforts are being made to reduce the
losses below 11.05 per cent as fixed by the Commission.
The energy audit of 11KV feeders, as per the formats prescribed
by the Commission, has already been submitted up to July,
2016. The work of providing RRAMR meters to 27,301 DTCs of
non-APDRP area was awarded to M/s Asian Fabtech,
Bengaluru, at a cost of Rs 133 crore. As of now, 19,884 meters
have been fixed to DTCs and the energy audit of 2,401 DTCs is
being carried out to know the DTC-wise loss levels, out of which
79 DTCs are showing 15-20 per cent of losses. Field officers have
been directed to analyze further to find out the reasons for
clxxxix
abnormal losses and to take remedial measure to reduce the
same.
Commission’s Views:
The Commission notes that the distribution losses in respect of
Chikkamagaluru, Bantwal, Soraba, Tarikere and Sagar towns
are more than 10 per cent and the MESCOM shall initiate
measures to bring down the loss levels further downwards in
respect of these towns and compliance regarding the specific
remedial measures initiated to reduce the losses shall be
submitted to the Commission every month regularly. It is also
observed that in a few divisions namely Udupi, Puttur and Sullia
the losses are less than 3%. The correctness of the losses arrived
at need to be checked as the distribution losses cannot be
below the minimum technical losses, particularly in the Rural
areas.
Further, the Commission notes that the MESCOM has not taken
up DTC-wise energy audit in spite of providing meters to 19,884
DTCs. The MESCOM has taken up energy audit of only 2,401
DTCs and out of this 79 DTCs are showing the losses in the range
of 15-20 per cent. The higher losses may be due to improper
tagging of consumer installations with the concerned DTCs or
any other reasons and the MESCOM needs to examine and
take corrective action including proper tagging. Hence, the
MESCOM is directed to take up energy audit of DTCs for which
meters have already been installed and also initiate remedial
measures for reducing distribution losses wherever they are
above the targeted level.
The MESCOM shall also expedite metering of remaining DTCs
and complete the same at the earliest so as to take up DTC-
wise energy audit to facilitate initiating remedial measures for
reducing distribution losses wherever they are on higher side.
cxc
The compliance in respect of DTC-wise energy audit
conducted with analysis and the remedial action initiated to
reduce loss levels, shall be submitted every month, regularly to
the Commission.
Further, the MESCOM is directed to submit to the Commission
the consolidated energy audit report for the FY17, as per the
formats prescribed by the Commission vide its letter No:
KERC/D/137/14/91 dated 20.04.2015, before 15th May 2017.
viii. Directive on Implementation of HVDS:
In view of the obvious benefits in the introduction of HVDS in
reducing distribution losses, the Commission had directed
MESCOM to implement High Voltage Distribution System in at
least one O&M division in a rural area in its jurisdiction by utilizing
the capex provision allowed in the ARR for the year.
Compliance by the MESCOM:
As per the Commission’s guidelines, F-7-Doddapattanagere
feeder, in Kadur sub-division, Kadur division, has been selected for
implementation of HVDS scheme as it is having the highest
distribution loss in Kadur sub-division. In this regard, the DPR is
prepared at a cost of Rs 873.87 lakh with a BCR as 1.38 and
payback period as 2.66. The work involves the replacement of 63
and 100 KVA DTCs by 25KVA. The DPR is under scrutiny/ verification
and will be submitted to the Commission for approval.
Further, as a practice of adoption of high voltage distribution
system, higher capacity distribution transformers are being
replaced by smaller capacity transformers duly ensuring proper
load balancing which also results in improving HT/LT ratio.
The physical progress achieved during 2015-16 and 2016-17 (upto
October 2016) is given below:
cxci
Sl.
No. Year
250 KVA
replaced
No. of transformers
installed at load
centers by replacing
250 KVA
100 KVA
replaced
No. of transformers
installed at load
centers by
replacing 100 KVA
100
KVA
63
KVA
25
KVA
63
KVA 25 KVA
1 2015-16 17 12 29 0 27 28 11
2
2016-17
(up to
October
2016)
1 1 1 2 4 6 4
Commission’s Views:
The Commission notes that the status of implementation of HVDS in
the MESCOM remains the same as the previous year. The
MESCOM needs to speed up finalization of the DPR for
implementation of HVDS in F-7- Doddapattanagere feeder in
Kadur sub-division and submit the same to the Commission for its
approval before taking up the proposed work.
Further, it is important that the MESCOM shall expedite
implementation of HVDS in its jurisdiction under an action plan for
timely completion of the same and to derive the benefits that are
envisaged on implementation of the scheme.
The Commission, with a view to minimize the cost, has issued
revised guidelines for implementation of HVDS in sub-
divisions/feeders having the highest distribution losses, so that a
higher loss reduction could be achieved on implementation of
HVDS at a reasonable cost. The MESCOM shall follow the revised
guidelines issued by the Commission and implement HVDS
programme in Kadur sub-division and submit the
progress/compliance thereon once in a quarter to the Commission
regularly.
cxcii
ix. Directive on Niranthara Jyothi Feeder Separation:
The ESCOMs were directed to furnish to the Commission, the
programme of implementing 11 KV taluk wise feeders’ segregation
with the following details:
a) Number of 11 KV feeders considered for segregation.
b) Month wise time schedule for completion of envisaged work.
c) Improvement achieved in supply after segregation of feeders.
Compliance by the MESCOM:
The MESCOM has taken up feeder segregation works in
Chikkamagaluru and Shivamogga districts under Deen Dayal
Upadhyaya Gram Jyoti Yojana (DDUGJY) and M/s REC has
communicated sanction amounting to Rs.265.30 crore to this
scheme.
Further, a total number of feeders covered under this scheme in
Chikkamagaluru and Shivamogga districts are 56 and 68
respectively (Totally 124 feeders). The likely time of completion of
the project is 24 months from the date of issue of DWA as per the
guidelines issued by the REC. However, the DPR has been revised in
accordance with the change in guidelines issued by GoK / GoI /
REC. The tender was called on 20.10.2016.
Commission’s Views:
The Commission, notes that there is no progress of feeder
segregation work in MESCOM and the status is no different than the
last year. Therefore, the MESCOM is directed to expedite
implementation of feeder segregation work without any further
delay, so as to derive the benefits envisaged in the DPR on
completion of the project. The MESCOM is directed to submit
progress/compliance thereon to the Commission regarding the
time bound schedule to complete the targeted works, regularly
once in a quarter.
cxciii
Further, after segregation of the feeders under DDUGJY is
completed, the MESCOM shall compute the IP-set consumption on
the basis of energy meter readings available in the exclusive
agricultural feeders at the sub-station levels.
The Commission reiterates its directive that the MESCOM shall
expedite implementation of feeders’ segregation work and
compliance thereon shall be submitted to the Commission once in
a quarter regularly.
x. Directive on Demand Side Management in Agriculture:
In view of the urgent need for conserving energy for the benefit of
the consumers in the State, the Commission had directed the
MESCOM to take up replacement of inefficient pumps with energy
efficient pumps approved by the Bureau of Energy Efficiency, at
least in one sub-division in its jurisdiction.
Compliance by the MESCOM:
The MESCOM had requested BEE, New Delhi, to include the
MESCOM in the BEE funded DISCOM DSM scheme. However, BEE
has informed that the MESCOM is not included in this scheme.
Further, M/s TERI, New Delhi, was requested to carry out system
study / load survey of 11 KV feeders in MESCOM area to develop a
suitable DSM for predominately feeding load of domestic /
commercial / agriculture. The TERI has accepted the MESCOM’s
request and the data is being collected by it for selection of
feeders to have base line data before implementing the
programme.
Commission’s Views:
The Commission notes that there is no progress in implementation
of DSM in agriculture by the MESCOM. The Commission observes
that the MESCOM has not taken any concrete action to take
forward the implementation of DSM measures in its jurisdiction. The
MESCOM needs to expedite DSM measures otherwise its action on
cxciv
this so far can be termed as merely rhetoric without any action on
the ground. The Commission is of the view that there is a huge
potential for energy saving in the agricultural sector which needs
to be tapped by implementing the scheme as early as possible
and to derive the benefits on completion of the same. In this
regard, strong emphasis should be given for implementation of
DSM measures to conserve energy and also precious water for the
benefit of farmers.
Further, the Commission while emphasizing the need for
implementation of DSM in agriculture during its review meetings
held with the ESCOMs has been directing them to initiate DSM
measures in any one sub-division/taluk in order to assess the results
of such measures before the same is scaled up in whole of its
jurisdiction.
The Commission directs the MESCOM to expedite the
implementation of DSM measures in its jurisdiction and complete
the same at the earliest and compliance thereon shall be submitted
to the Commission within three months from the date of this Order.
xi. Directive on Lifeline Supply to Un-Electrified Households:
The Commission had directed the ESCOMs to prepare a detailed
and time bound action plan to provide electricity to all the un-
electrified villages, hamlets and habitations in every taluk and to
every household therein. The action plan was required to spell out
the details of additional requirement of power, infrastructure and
manpower along with the shortest possible time frame (not
exceeding three years) for achieving the target in every taluk and
district. The Commission had directed that the data of un-
electrified households could be obtained from the concerned
Gram Panchayaths and the action plan be prepared based on
the data of un-electrified households.
Compliance by the MESCOM:
cxcv
Rajeev Gandhi Grameena Vidyuthikaran Yojana (RGGVY) XI Plan:
In MESCOM under RGGVY XI Plan Phase-I & II projects, 1,48,325
rural households including BPL households have been electrified.
Further, it is proposed to cover about 83,346 rural households,
including BPL households, for electrification under DDUGJ Yojana,
for which tendering is in process.
New Proposals:
a. Decentralized Distributed Generation (DDG):
In MESCOM 3 villages namely Shettihalli, Chithrashettihalli and
Urulugallu of Shivamogga district are left out for electrification as
these villages are situated in thick forest area which could not be
electrified through conventional method earlier. However, at
present sanction has been communicated by the REC for
electrification of these 3 villages covering 123 households for an
amount of Rs 0.615 crore considering standalone solar system and
the work is in progress.
b. Rajeev Gandhi Grameena Vidyuthikaran Yojana (RGGVY) XII
Plan:
As RGGV Yojana has been subsumed in DDUGJY, the proposal for
electrification of rural households submitted under RGGVY XII Plan
has been considered to be taken up under DDUGJY. M/s REC has
communicated sanction for an amount of Rs. 49.38 crore for RE
component covering 83,346 rural households including BPL
households to be electrified.
The MESCOM is also taking up the rural electrification works under
budgetary works including electrification of hamlets, households
etc., a brief progress of the same is as below:
YEAR
Electrification of hamlets/colonies Electrification of household
(BJ/KJ)
Special
Componen
t Plan
Tribal
Sub
Plan
General
Special
Component
Plan
Tribal
Sub
Plan
General
2013-14 13 4 43 198 30 264
2014-15 8 10 12 106 37 1208
2015-16
6 8 12 95 42 946
cxcvi
2016-17
(up to
Oct’16)
7 2 1 41 21 938
Commission’s Views:
The Commission expresses its displeasure over the MESCOM’s tardy
progress and apparent lack of seriousness in electrification of
un-electrified households in its jurisdiction. Even after so many
years, there are a large number of households remain without
electricity, which is of serious concern.
Further, the Commission concerned with the slow pace of progress
in this programme, in its previous Tariff Orders had directed the
MESCOM to cover electrification of 5 per cent of the total
identified un-electrified households every month beginning from
April, 2015 so as to complete this programme in about twenty
months. However, the progress achieved in electrification of
households so far by the MESCOM remains much to be desired.
The Commission directs the MESCOM to expedite action to provide
electricity to the un-electrified households and cover all the
remaining households at the earliest and report compliance
thereon to the Commission regarding the monthly progress
achieved from May, 2017 onwards. The Commission as already
indicated in the earlier Tariff Orders would be constrained to initiate
penalty proceedings under section 142 of the Electricity Act, 2003,
against MESCOM in the event of non-compliance in the matter.
xii. Directive on Implementation of Financial Management
Framework:
The present organizational set up of the ESCOMs at the field level
appears to be mainly oriented to maintenance of power supply
without a corresponding emphasis on realization of revenue. This
has resulted in a serious mismatch between the power supplied,
expenditure incurred and the revenue realized in many cases. The
continued inability of ESCOMs to effectively account the input
cxcvii
energy and its sale in different sub-divisions of the ESCOM in line
with the revenue realization rate fixed by the Commission, urgently
calls for a change of approach by the ESCOMs, so that the field
level functionaries are made accountable for ensuring realization
of revenues vis-à-vis the input energy supplied to the jurisdiction of
sub-division/ division.
The Commission had therefore directed the MESCOM to introduce
a system of Cost-Revenue Centre Oriented sub-divisions at least in
two divisions, on a pilot basis, in its operational area and report the
results of the experiment to the Commission.
Compliance by the MESCOM:
It is submitted that, as per the directions of the Commission,
MESCOM has tried to implement the SBU concept in Puttur and
Shivamogga divisions. However, for putting the concept of SBU in
place, functional autonomy is very vital but, practically deriving
the functional independency on Puttur and Shivamogga divisions is
proving non-functional. In the present system, corporate office is
dealing with major aspects of power purchase, subsidy accounting
and borrowings and dissection of these major expenses which
involves high cost purchase/short term purchase. The dissection of
subsidy/grants/capex and borrowing against these two divisions
may not happen logically unless and otherwise system is in place.
However, the MESCOM is working out the strategy in this regard
and will submit the same to the Commission in due course.
Commission’s Views:
The Commission has forwarded a report prepared by the
consultants, M/s PWC regarding implementation on Financial
Management Framework to bring in accountability on the
performance of the divisions / sub-divisions by analyzing the
quantum of energy received, sold and recovery of costs through
revenue, so that the ESCOMs conduct their business on
commercial principles.
cxcviii
However, it is observed from the MESCOM’s compliance on the
directive it has taken not any action for implementing this
directive. The MESCOM, without actually taking any measurable
action, has only repeated whatever it has submitted to the
Commission last year on the directive of formation of SBUs. The
Commission directs MESCOM to review the performance of the
divisions & sub-divisions in respect of energy received, sold,
average revenue realization and average cost of supply using the
financial framework Model without giving lengthy explanation.
Further, the MESCOM is directed to analyze the following
parameters each month to monitor the performance of the
divisions/sub-divisions at corporate level.
a) Target losses fixed and the achievement at each stage.
b) Target revenue to be billed and achievement at each
category.
c) Target revenue to be collected and achievement at all
categories.
d) Targeted distribution loss reduction when compared to
previous years’ losses.
e) Comparison of high performance divisions in sales with low
performance divisions.
Based on an above analysis, the MESCOM needs to take
corrective measures to ensure 100 per cent meter reading, billing,
and collection; analysis of sub-normal consumption; replacement
of non-recording meters; etc.
The Commission reiterates its directive that the MESCOM shall
implement the financial management framework model in its
jurisdiction at the earliest to bring in accountability on the
performance of the divisions / sub-divisions in the matter of the
quantum of energy received, sold and its cost so as to conduct its
business on commercial principles. Compliance in this regard
shall be submitted to the Commission on a quarterly basis,
regularly.
xiii. Directive on Prevention of Electrical Accidents:
The directive was as follows:
cxcix
“The Commission has reviewed the electrical accidents that have
taken place in the State during the year 2015-16 and with regret
noted that as many as 430 people and 520 animals have died in
the State due to these accidents.
From the analysis, it is seen that the major causes of these
accidents are due to snapping of LT/HT lines, accidental contact
with live LT/HT/EHT lines, hanging live wires around the electric
poles /transformers etc., in the Streets posing great danger to
human lives.
Having considered the above matter, the Commission hereby
directs to prepare an action plan to effect improvements in the
distribution network and implement safety measures to prevent
electrical accidents. Detailed division wise action plans shall be
submitted by the MESCOM to the Commission.”
Compliance by the MESCOM:
As per the directive, the MESCOM has made sincere efforts for
identification and rectification of hazardous installations in densely
populated areas /public areas and the local bodies were also
informed of the need to rectify the hazardous streetlight
installations under their control. Further, in order to prevent and
reduce the number of fatal electrical accidents, measures are
being taken to provide HT/LT protections to distribution transformers
where such protection is not satisfactory.
It is submitted that, the MESCOM has already taken initiative to
circulate the manual for “Safety/Technical Audit for Power
Distribution System” forwarded by the Commission to the field
officers and instructions were issued to the them to follow the
guidelines contained in the said manual.
Safety tools such as high voltage detectors, earthing rods, Helmets,
Safety kits, etc., are provided to all the linemen of MESCOM and
cc
also periodical training is being imparted to them on safety
measures by providing safety instruction manual and various field
demonstrations through trained professionals.
Wide publication of “Do’s & Don’ts” of electricity usage are also
being given in daily newspapers and Audio jingles are being
announced in people concentrated areas like KSRTC Bus-stations
in MESCOM jurisdiction.
Further, hazardous installations are identified regularly by the
linemen and section officers of the sub-divisions during their
inspection and necessary action such as preparing estimate /
sanctioning it and executing the work immediately is being taken.
The progress of identification of hazardous installations is submitted
monthly to the higher office and the consolidated circle-wise data
of 4 circles are prepared and submitted to the Commission
quarterly. Hazardous installations such as damaged / deteriorated
poles, slanted poles, damaged conductors, line close to the
building are identified in 6,624 locations and the same are being
rectified.
Commission’s Views:
The Commission has noted that the MESCOM has taken various
remedial measures including rectification of hazardous installations
in its distribution network. However, despite these measures being
taken by the MESCOM, the number of fatal electrical accidents
involving both human and livestock has increased which is a
serious concern. The Commission would like to impress upon the
MESCOM that the identification and rectification of hazardous
installations is a continuous process, which should be regularly
carried out without any let up. The MESCOM should make more
concerted efforts for identification and rectification of all the
hazardous installations including streetlight installations / other
electrical works under the control of local bodies to prevent
cci
electrical accidents. In addition, it is also important that the
MESCOM takes up awareness campaigns through visual/print
media continuously about safety aspects among public to ensure
that the attention on safety aspects is maintained.
During the Review meetings held with the ESCOMs, the Commission
has been emphasizing that the ESCOMs should take up periodical
preventive maintenance works, install LT protection to distribution
transformers, conduct regular awareness programme for public on
electrical safety aspects in use of electricity and also ensure use of
safety tools & tackles by the field staff besides imparting necessary
training to the field staff at regular intervals.
Further, the Commission is of the view that the hazardous
installations in the distribution network is the result of works done
shabbily without adhering to the best construction practices as per
the standards, while taking up construction/expansion of the
distribution network. Therefore, the MESCOM shall take adequate
and effective steps in rectifying the hazardous installations to
ensure that distribution network is hazardous free. In addition to this,
the MESCOM also needs to conduct regular safety audit of its
distribution system and to carryout preventive maintenance works
as per schedule in order to keep the network equipment in healthy
condition.
The Commission has forwarded the “Safety Technical Manual” to
the ESCOMs, which enumerates detailed account of the steps to
be taken on each element of the distribution system which would
help the engineer in the field to identify and attend to the defects.
In this context, it is necessary that the ESCOMs are required to
continuously monitor the implementation of the suggestions /
recommendations contained in the Safety Technical Manual to
ensure that distribution network is maintained properly.
The Commission, therefore, reiterates its directive that the MESCOM
shall continue to take adequate measures to identify & rectify all
ccii
the hazardous locations/installations existing in its distribution
system under an action plan to prevent and reduce the number of
electrical accidents occurring in the distribution system. The
compliance thereon shall be submitted to the Commission every
month, regularly.
cciii
APPENDIX-1
Statement showing the Objections of the Stakeholders/Public, MESCOM’s
response
and the Commission’s Views
Objection on Tariff Issues
Objections Replies by the MESCOM
1. M/s MSEZ is a licensee similar to
MESCOM. MESCOM has ignored
this fact and also the formulae /
method adopted & approved by
the Commission in making
proposal for increase of Tariff by
Rs.1.48 per unit.
The MESCOM has proposed a hike of
Rs.1.48 per unit across all the categories
of consumers in order to make good
the deficit estimated by MESCOM for
FY18.
Commission’s Views: This issue has been suitably dealt with in the Tariff Orders of
MESCOM and MSEZ.
2. As per the computation of power
purchase cost for FY17 approved
by the Commission in the Tariff
Order 2016 and the data filed by
MESCOM in the present filing,
power purchase cost of MSEZL
would be Rs.5.15/unit as against
the approved cost of Rs.5.61 for
FY18 in the Tariff Order 2016.
Like all other consumers, MESCOM is
also supplying power to M/s MSEZ.
Hence, the same rate of increase has
been proposed for M/s MSEZ also,
commensurate with the increased cost
of supply. However, the Commission
may validate the MESCOM’s proposal
considering the views expressed by M/s
MSEZ but not the cost computed by
them.
Commission’s Views: This has been suitably dealt with in the Tariff Orders of
MESCOM and MSEZ.
3. The MESCOM has proposed an
increase of Tariff by Rs.1.48 per unit.
The increase in tariff could be
minimised by reducing distribution
losses. The increase in Tariff should
not burden the consumers. The loss
in the revenue should not be
passed on to the consumers
through revision of Tariff.
The MESCOM has submitted its tariff
petition duly taking into consideration
all the expenses incurred by it.
Commission’s Views: This issue has been suitably dealt with in this Tariff Order.
cciv
4. Action should be planned by
MESCOM for avoiding the theft of
power.
At sub-division / division level action is
being carried out for avoiding the theft
of power. On information about theft of
power, immediate action is being taken
by MESCOM.
Commission’s Views: Reply furnished by MESCOM is noted.
5. Bills should not be generated for IP
set consumers.
For IP set consumers, bill is generated to
know the actual consumption for
claiming the subsidy from the Govt. of
Karnataka.
Commission’s Views: Reply furnished by MESCOM is noted.
6. For consumers installing solar water
heaters and solar light,the ESCOMs
should allow rebate of Rs.100/- in
the energy bills.
Rebate of Rs.50/- in the bill is being
given for consumers who have installed
solar water heaters.
Commission’s Views: This issue has been dealt in the relevant chapter of the Tariff
Order.
7. For all LT category consumers like
LT-2a (i), LT2a (ii), LT2b (i), LT2b (ii),
LT5 etc, the increase in tariff of
Rs.1.48 is a burden.
The revision of Tariff is needed to meet
the increase in the cost of generation,
distribution and maintenance of
network and related cost due to
inflation. ESCOMs have to give quality
power supply to the consumer, which
comes at a cost.
Commission’s Views: This issue has been suitably dealt with in the Tariff Order.
8. The Commission should cause third
party verification of the MESCOM’s
performance in respect of energy
audit and electrical accidents.
The Commission is issuing directives to
the ESCOMs on the issues affecting its
performance and it also periodically
reviewing the same in the review
meetings.
Commission’s Views: Reply of MESCOM is acceptable.
9. Specific consumption of 4448 units
/IP/annum is irrational and not
practical, since geographical and
weather characteristics of the
areas coming under MESCOM are
different and versatile. Therefore,
the actual meter readings at the
DTCs may be considered for
arriving at IP consumption.
The specific consumption of 4448 units is
the Company average. But, it is
different for different sub-divisions /
sections, as the energy recorded in the
IP feeders of the particular sub divisions
/ sections is being considered for those
particular subdivisions / sections.
Further, taking the meter readings from
IP set installations is being continuously
objected to by many of the farmers
and some of the meters were un-
authorizedly removed by the farmers.
ccv
In such a situation, considering the
meter readings of IP sets will end up
with misleading figures.
Commission’s Views: This issue is discussed in detail in the relevant chapters of the
Tariff Order.
10. There should be differential tariff
among ESCOMs.
As of now, except for BESCOM, the
retail supply tariff in Karnataka is uniform
in the State.
Commission’s Views: MESCOM’s reply is noted and the tariff for various categories
is discussed in the relevant chapter of this Order.
11. The revenue deficit of Rs.700
Crores proposed for FY18 can be
made good by realizing the
pending subsidy receivables from
the Government and collecting
the dues from, M/s. MPM.
The MESCOM is following the accrual
basis of accounting practice where all
the receivable demands are
considered as received in the year in
which the transaction takes place.
Hence, the contention that the
realization of the dues will result in
reduction of the revenue gap is not
correct.
Commission’s Views: Reply of MESCOM is acceptable.
12. It is not prudent to give absolute
subsidy to LT-4a category since
National Electricity Policy and
Electricity Act contemplates for
removal of the same and the
Commission should review the
same as to levy at least a nominal
tariff.
It is the policy of the State Government
to extend free power supply to irrigation
pump sets, having connected load of
10HP & below. Accordingly, the
Government is releasing the subsidy
amount towards the consumption
relating to this category to the
concerned ESCOMs. As such, the
MESCOM being a Government
Company, has to act as per the policy
of the Government.
Commission’s Views: Reply of MESCOM is noted.
13. The MESCOM has been showing
profit of Rs.12.60 Crores, Rs.20.17
Crores Rs.13.92 Crores, and
Rs.11.12 Crores in FY13, FY14, FY15,
and FY16 respectively. But,
MESCOM has stated that with
existing tariff it will incur Rs.700.45
Crores revenue loss in 2018, hence,
seeking a hike of 148 paise per unit
which is not substantiated.
The MESCOM has estimated the loss in
the revenue and the same has been
explained in detail in the tariff petition.
Commission’s Views: This issue has been suitably dealt in the relevant chapter of
the Tariff Order.
ccvi
14. The outstanding amount on the
power purchase dues payable
from 2006 from other ESCOMs is
about Rs.1204.63 Crores and this
has resulted in delay in payment to
generators by MESCOM, leading
to accrued interest of Rs.29.22
Crores. This burden should not be
passed on to the consumers.
Based on the actual consumption by
the ESCOMs, reconciliation is carried
out and steps are being taken to
collect the dues from other ESCOMs.
However, Interest dues are inevitable
due to delay in cash flows.
Commission’s Views: The Commission is not allowing the interest payable/ paid
on belated payments of power purchase cost.
15. Even though the Commission has
rejected the money spent on
employee’s bonus, welfare fund
and advertisement, MESCOM is
accounting it in the tariff revision-
proposals.
MESCOM has submitted in its tariff
petition, taking into consideration all the
expenses incurred by it and the
Commission will pass appropriate
Orders in the matter.
Commission’s Views: This issue has been dealt with suitably in the relevant
chapter of the Tariff Order.
16. Loss occurred due to high power
purchase cost and subsidy burden
should not be passed on to the
consumers in the revision of tariff.
As per requirement of energy, the
power purchase allocation is done by
the Govt. Being the Company owned
by the Government MESCOM has to
follow its Orders.
Commission’s Views: This issue of power purchase is discussed in detail, in the
relevant chapter of the Tariff Order and the Commission notes that power
purchase quantum is allocated by GoK.
17. HT consumers are paying higher
tariff because the ESCOMs are
taking the average cost of supply
as the basis for seeking tariff
revision. The cost to serve a HT
installation is much less compared
to LT power installation. The cost of
supply should be the basis for
determination of tariff.
The Commission is yet to implement the
Cost to Serve model in Karnataka for
the reasons explained in the Tariff
Order.
Commission’s Views: The Commission is indicating the cross subsidy levels based
on cost to serve as well as average cost of supply in its Tariff Order. The
Commission’s endeavour is to reduce cross subsidies gradually.
18. Tariff Petition filed by MESCOM is
not maintainable, due to the
following reasons.
The supply to Agriculture pump
sets is increasing year on year
MESCOM is envisaging higher
consumption in Agriculture pump sets
due to failure of monsoon and hence is
calculating the required energy for the
same.
ccvii
No release of timely subsidy by
GoK.
Non-implementation of prepaid
meters.
ESCOMs have sought for
increase in fixed charges.
Introduction of morning peak in
ToD Tariff.
Banking facility within 3 months
under open access.
The Govt. subsidy is based on the
assessed energy and in this regard GoK
is releasing monthly subsidy to the
MESCOM.
For implementing prepaid meters,
MESCOM has selected LT temporary
installations in Mangaluru and Udupi
divisions. The work of implementing
prepaid smart card Technology meters
in these divisions is awarded to an
Agency.
The MESCOM has filed a petition to
increase the fixed charges and reduce
energy charges for HT installations for
attracting HT consumers back to
MESCOM.
No proposal is submitted for
introduction of morning peak penalty in
ToD scheme.
The very purpose of allowing open
access is to use energy by any
consumer as and when it is generated,
to encourage the open access. The
Banking facility at present is provided
for water year from the beginning of
open access. Now, a review is required
as the generator may inject during the
off peak hour and the OA customer
may draw the energy during the peak
hour. Three month’s Banking is sufficient
for using the generated power and the
MESCOM is not affected by this open
access. Hence, a petition is filed before
the KERC to review the Banking facility
provided to the open access
transactions.
Commission’s Views: The Reply of MESCOM is noted. The above issues have been
suitably dealt with in the relevant chapters of the Tariff Order. Regarding banking
facility, the Commission would issue separate Orders, as separate petitions have
been filed by ESCOMs in the matter. As far as prepaid meters are concerned, the
same has to be implemented in a phased manner as considerable cost is
involved.
19. LT-2a Tariff should be applied for The MESCOM is servicing the
ccviii
domestic installations serviced
under HT-4 tariff. LT-2a tariff rate is
only Rs.3 per unit whereas HT-4 tariff
is Rs.5.85 per unit. Alternatively, in
the case of Railways provide
separate bulk power tariff for
domestic supply.
installations duly categorizing the same
as per the prevailing Regulations and
also applicable tariff is being applied.
Further, it may not be appropriate to
compare the first slab of LT-2a
category with that of HT-4 tariff since
under LT-2a tariff, as the consumption
increases the average rate per unit will
be above the HT-4 tariff rate.
Commission’s Views: The reply furnished by the MESCOM is noted. As the
installations are serviced under HT, HT-tariff is applicable.
20. The application for tariff should be
made 120 days before the financial
year for which tariff revision is
requested. Efficiency of MESCOM
has not improved. The Gap of FY16
is loaded to FY18 and mistakes are
made. Cost to serve model is not
approved. Load shedding is done
without approval of the KERC.
In the data of FY16, MESCOM’s
expenditure is more than the cost,
approved by the Commission.
The MESCOM has filed its tariff revision
petition on 30.11.2016 for the year
starting from 01.04.2017 which is 120
days before the start of financial year.
Efficiency of the MESCOM is improving.
The cost to serve model cannot be
implemented due to various other
factors. Scheduled load shedding is
being done with the prior intimation to
the consumers affected. Unscheduled
load shedding sometimes is beyond
the control of MESCOM, due to various
reasons. MESCOM has explained the
reasons for variation in expenditure
due to uncontrollable factors, in the
tariff petition.
Commission’s Views: The reply furnished by the MESCOM is noted. MESCOM has
filed its application within the time stipulated in the Regulations. The other issues
have been discussed in the relevant chapters of the Tariff Order.
21. The HT: LT ratio is not brought down
and the unauthorized IP sets data is
not given. The failure rate of
distribution transformers is high.
Interest on consumers deposit is not
given quarterly to consumers.
The failure rate of distribution
transformers is low in MESCOM. The
interest on consumers deposit is being
given yearly during 1st quarter of
subsequent year as per the KERC
Regulations relating to consumer
deposit.
Commission’s Views: The reply furnished by the MESCOM is acceptable.
22.
ESCOMs are servicing the
installations without installing
meters.
MESCOM should have its own
generation to the extent of
No installation in MESCOM is serviced
without a meter. The capital
investment for own generation in a
suitable project is the policy decision
of GoK. It is true that the HT2
consumption is decreasing and the
ccix
2000MW
HT2 (a) consumption is steadily
decreasing.
Even though all ESCOMs have
different distribution cost, they
are proposing for uniform tariff
increase
The low cost hydro power of the
State can be utilized.
The KPC thermal unit cost is more
than the CGS generation cost,
this has to be reduced.
Open access may be extended
to consumers with contract
demand below 1MW.
The tariff in Karnataka is more
than the Tariff in other States.
Entrust the management of
MESCOM through tariff
competitive bidding.
MESCOM is studying the same. The
MESCOM has explained this and
submitted the data to the Commission
for its perusal to consider increase in the
tariff and the Commission will validate
the same.
The power allocation among
hydro/thermal/nuclear is depending on
demand. The scheduling of power
generation/load is done by the State
Load Dispatch Centre, in consultation
with generation/ transmission /
distribution companies.
The comparison of tariff in Karnataka
with other States is not proper as each
tariff setting process and data are
different for different States. The source
of generation, consumer mix, and the
demand varies from state to state.
The remarks that MESCOM is passing its
inefficiency to its consumers is not true.
The MESCOM has proposed increase in
the tariff which is commensurate with
the expected increase in cost of supply,
due to various factors as detailed in the
petition. Further, the capex proposed
by MESCOM is necessary to upkeep its
network and the Commission will take
up prudent check of all capex made in
its APR exercise.
Commission’s Views: The reply furnished by the MESCOM is noted. The power
allocation is done as per GoK Orders. The expenses incurred by MESCOM are
appropriately dealt in the relevant chapters of this Order.
23. The proposed tariff for IP set
category is 621paise per unit and
that of BJ/KJ category is 749 paise
per unit indicating a vast
difference. As these categories are
being subsidized by GoK, the GoK
has to bear the full cost arising out
of their commitment.
The tariff in respect of BJ/KJ category is
at the level of average cost of supply,
whereas the tariff in respect of IP
category is after factoring the cross
subsidy from other cross subsidizing
categories. However, the MESCOM
has requested the Commission to
increase the tariff by 148 paise per unit
ccx
for all categories of consumers
including IP sets and BJ/KJ in the
present tariff petition. It is for the
Commission to take a view on the
above.
Commission’s Views: These issues have been suitably dealt with in the relevant
chapters of the Tariff Order.
24. The cross subsidization factor is
destroying the small scale industries.
Tariff for small scale industries are
much lower in the neighbouring
State.
The GoK is paying Tariff for consumers
of IP and BJ/KJ categories as tariff
subsidy every month to MESCOM. The
Tariff for consumers paying below the
cost of supply needs to be increased
progressively and till such time, cross
subsidization is inevitable.
Commission’s Views: The reply of MESCOM is noted. The tariff structure in other
States cannot be compared to Karnataka owing to various factors affecting the
same. The Commission’s endeavour is to reduce cross subsidies gradually.
25. ToD tariff should be designed to
incentivize usage during the period
from 20.00 Hrs to 8.00 Hrs without
having any disincentive factor for
usage in peak hours.
The rationale behind the ToD tariff is to
incentivize the usage during off-peak
hours and disincentives the use of
power at peak hours to reduce the
peak demand. Hence, the contention
on ToD is not reasonable.
Commission’s Views: This issue has been suitably dealt with in the relevant
chapter of the Tariff Order.
Objections relating to Quality of Power Supply and Service;
26. Recruiting the ground level staff for
rendering good services to the
consumers, should be considered
rather than the higher rank
officials.
MESCOM has already recruited 1953
Junior Linemen and in future also
MESCOM will find ways to fill the
vacancies in the lower cadre with the
approval of the Government.
Commission’s Views: Reply furnished by the MESCOM is acceptable.
27. Accidents have not been reduced.
MESCOM is doing only emergency
work and is not carrying out
periodical maintenance work on
distribution line and equipment.
The periodical maintenance work on
lines / substations is being carried out
regularly. The reason for accidents is
not only due to line problems, but also
due to many other reasons. MESCOM
linemen are being trained to work on
the network using proper safety
equipment availing line clear. The
training to linemen and maintenance
of distribution system are regular
processes and are being carried out
ccxi
by the MESCOM.
Commission’s Views: These issues have been discussed as part of the directives
issued by the Commission in the Tariff Order.
28. The present limit of 67 HP to 100 HP
for availing LT power supply should
be increased.
The MESCOM will follow the
Regulations of the Commission.
Commission’s Views: At present 67 HP limit is specified in the Regulations for
availing Power on LT basis. There is no provision to give LT power supply beyond 67
HP.
ccxii
29. The Commission should direct
MESCOM for the payment of
Electricity Bills through NEFT/ RTGS to
avoid dishonouring of cheques for
technical reasons.
The MESCOM has arranged payment
system in its Websitewww.mesco.in for all
consumers. The bill amount can be
transferred to MESCOM account with
consumer ID as in the bill issued to the
consumers.
Commission’s Views: The reply furnished by the MESCOM is acceptable.
30. Programmes should be scheduled
for conducting consumer
awareness at sub-divisional levels.
For CFL and LED bulbs rebate
should be given.
A book named as “Vidyuth nimageshtu
gottu” is being distributed among
consumers in the sub-divisions / divisions
during awareness programme as part
of consumer education. LED Bulbs are
sold at Rs.85 per unit by M/s
EESL to all consumers.
Commission’s Views: The reply of MESCOM is noted.
31. During 2015 and 2016, the
monsoon has failed and resulted in
availability of lesser hours of power
supply to the IP sets.
The shortfall in generation is due to
failure of monsoon during 2015 and
2016. This has forced the MESCOM to
regulate the power supply to all the
consumers within the available power.
Commission’s Views: Reply of MESCOM is noted.
32. Even after deployment of linemen,
restoration of power supply is being
delayed. There is no improvement
in supply of power to rural areas. If
transmission loss and distribution
losses are reduced, the Company
need not seek increase in tariff.
For early restoration of power supply
and to extend efficient services to all
the consumers, necessary training is
being given to all the newly deployed
linemen. Further, MESCOM has
undertaken measures to replace the
deteriorated conductors and failed
distribution transformers. Based on the
availability of power, MESCOM is
supplying to the consumers in rural
areas. The MESCOM is taking all the
remedial measures to bring down the
losses in distribution system.
Commission’s Views: Reply of MESCOM is noted.
33. MESCOM has not supplied
continuous power to the small
scale industries, agricultural and
domestic consumers in rural areas.
For developing the distribution
infrastructure, the burden should
not be passed on to the
consumers by revision of Tariff.
MESCOM has undertaken various
improvement works to its distribution
network to arrange quality power to all
the consumers including consumers in
rural areas. Further, maintenance work
on distribution equipment/ line is being
carried out on a regular basis, including
the replacement of failed Auto
reclosures.
Commission’s Views: The reply of MESCOM is acceptable.
34. The cost incurred till date due to
delay in commissioning of
Konandoor station, should not be
The 110 KV Konandoor sub-station
comes under the preview of KPTCL and
the same has been intimated to KPTCL
ccxiii
passed on to the consumers. for taking further needful action in the
matter.
Commission’s Views: Reply of MESCOM is acceptable.
35. Meters should be supplied to the
LT consumers in rural areas of
MESCOM.
Meters are made available in the
metering outlets managed by the
Meter manufacturers at division offices.
The consumers can collect the meters
by paying necessary charges towards
the meters. This arrangement is made to
avoid delay in getting the connection
for want of meters.
Commission’s Views: Reply of MESCOM is noted.
36. The regularization of IP
connections is a major problem
faced by the farmer community.
They are waiting for years to get
the line improvement works done
by the MESCOM for their IP
connections.
The MESCOM has provided
infrastructure to the unauthorized IP sets
regularized up to May, 2015 and has
taken action for providing infrastructure
to the remaining regularized IP sets also
by calling tenders.
Commission’s Views: The MESCOM’s reply is noted.
37. The Commission has stopped the
office of the Consumer Advocacy
Cell (OCA) working under it. OCA
was doing a good job for the
benefit of the consumers, and
hence, the Commission is
requested to start the functioning
of OCA, as earlier.
The Commission may take a view on
the above.
Commission’s Views: The Commission takes note of the suggestion.
38. Rs. 1 crore is allocated to each
ESCOM for consumer education
programme in Tariff Orders issued
by the Commission. But, the
ESCOMs are not using the amount
as per the allocation and are
limiting their activities to
publication of hand books only.
MESCOM’s allocation for consumer
education is Rs. 50 lakhs. MESCOM has
conducted consumer interaction
meetings for LT/HT consumers in
Mangaluru, Udupi, Shivamogga and
Chickkamagaluru during Dec-2016 to
Feb-2017 and many issues relating to
them were discussed. Further, Jana
Samparka sabhas are being regularly
held at division/sub-division level to
educate the consumers and to attend
to their problems.
Commission’s Views: The reply of MESCOM is noted.
39. In the present power supply
situation the quality of power
supply is poor. Timer switches is to
be provided to streetlight circuits.
Segregation of commercial and
technical losses are not done. The
MESCOM has not furnished the
The MESCOM is arranging power supply
to all its consumers based on availability
and demand. The source-wise
purchase of power is planned for the
future year well in advance. The
Urban/local bodies are advised to
provide timer switches to streetlight
installations to save energy.
Energy audit of towns/cities, feeders
ccxiv
correct number of IP sets after
enumeration. Hence, the
MESCOM tariff petition should be
rejected.
and DTCs are being done every month
and the same is being reported to the
Commission. Segregation of
commercial and technical losses is
done and the same is submitted in the
tariff petition for each financial year.
The enumeration work of IP sets has
already been awarded to an Agency
and the report will be submitted after
completion of work.
Commission’s Views: The MESCOM’s reply is noted. MESCOM is directed to
persuade local bodies to install timer switches for. street lights. The Commission
strongly emphasizes the need to effectively conduct the energy audit for
plugging leakage and to make the company viable both technically and
financially.
40. MESCOM has not taken action
regarding energy conservation,
ToD, Niranthara Jyothi
implementation, HVDS, metering of
DTCs and DSM.
The LED bulbs have been distributed to
consumers by EESL in MESCOM area.
DSM project for several energy saving
schemes is under study by TERI, New
Delhi. The Niranthara Jyothi scheme is
in progress. ToD has been
implemented as per the Tariff Order.
Metering of the DTCs is in progress.
Commission’s Views: These issues have been discussed as part of the directives
issued by the Commission, in the Tariff Order.
41. The receivables by MESCOM from
KPTCL & other ESCOMs etc., have
increased to Rs.1204.63 Crores from
Rs.234 Crores in 2007-08 and there
should be a clear mechanism for
the settlement of the same.
These issues are being deliberated
upon for settlement. GoK has initiated
action to cut down the subsidy
payable to other ESCOMs and
releasing the same to MESCOM as
receivable from other ESCOMs.
Commission’s Views: The reply of MESCOM is noted.
42. In the Auditor’s observation in the
Annual Accounts for FY16 it is stated
that MESCOM is claiming interest on
consumers’ deposit and also RoE on
the capitalized portion of consumer
deposits.
In the Tariff Order 2015 and Tariff Order
2016, the Commission has already
settled the issue by stating that “The
Commission has allowed RoE at 15.5%
on equity plus reserves and surplus as
at the beginning of the year end also
considering the recapitalized assets
worth Rs.26 Crores in compliance with
the Order of the ATE, in appeal No
46/2014, besides allowing taxes as per
actual”. Hence, the contentions of the
objector that the equity component
includes the capitalized consumer
deposit for computing RoE is not true.
Commission’s Views: The reply furnished by the MESCOM is noted and this issue
has been suitably dealt with in the relevant chapter of the Tariff Order.
43. The Railway is a public utility, which
is essential part of the transport
infrastructure, and the Railways
Like Railways, MESCOM is also a public
utility playing a pivotal role in the
country’s economy. In the tariff petition
ccxv
play a vital role in the country’s
economy, increasing the Tariff will
burden the Railway passengers in
the form of increased fares.
Railways should be exempted
from tariff hike and, single part
tariff should be allowed instead of
present two part tariff for Railways.
MESCOM has furnished all the
parameters justifying the tariff hike.
Consequent to increase in various cost
components, as detailed in the Tariff
petition, it becomes inevitable for
MESCOM to propose increase in the
tariff for recovery of such costs.
Therefore, exempting any of the
categories from tariff hike means
transferring the burden to other
categories of consumers.
The two part system is a widely
accepted one to ensure recovery of
minimum fixed charges and to recover
the energy cost as variable cost.
Hence, single part tariff for Railways is
not recommended.
Commission’s Views: The reply of MESCOM is noted.
44. Requested to provide special
incentives for improved PF above
0.9.
The MESCOM will adhere to the
Regulations / Orders of the Commission
in providing incentives.
Commission’s Views: The maintenance of proper PF is in the interest of consumer
only. PF above the threshold levels would improve the voltage of the supply to
the consumers and also enable optimizing their power consumption.
45. The realization of income due to
vigilance cases is not reported in
the tariff petition. The interest on
delayed payment by the
generators should not be passed on
to consumers. UDAY scheme is not
accepted by MESCOM. The
proposal for increase in fixed cost to
HT consumer should not be
accepted. A separate tariff should
be fixed for SSI units.
The realization of revenue due to
vigilance cases is a continuous process
and in some of the cases, the affected
consumers seek legal remedies also.
Hence, the data of collection does not
match with the number of cases and
penalty levied. The MESCOM is
submitting the data to UDAY scheme
and rest of this scheme is the policy of
the State government. The MESCOM
has proposed to increase the fixed
charges for HT consumers and the
reasons are explained in the petition
filed before the Commission. To
consider separate tariff for SSI units, the
Commission may take a decision
regarding tariff categories.
Commission’s Views: The MESCOM’s reply regarding vigilance and UDAY Scheme
is acceptable. Regarding separate tariff for SSI, it is to be noted that, the retail
tariff to the consumers is being fixed keeping in view the recovery of average
cost of supply and the cross subsidy levels with reference to the average cost of
supply. Fixing a tariff below the cost of supply would entail meeting the balance
cost either by government subsidy or through cross subsidization. Extending
concessions to SSI category would result in increase in cross subsidy levels of other
categories of consumers, which is not permissible under the Tariff Policy. The issue
of fixed cost, is suitably dealt in the relevant chapter of this Tariff Order.
ccxvi
46. Due to increase in power
consumption, there will be a deficit
in power supply. There is no
addition of domestic generation.
Power purchased from outside is
costlier and hence, the ESCOMs are
requesting the Commission to
increase the consumer tariff.
The consumption is in increasing trend
and the additional generation of
power is also increasing. Presently the
solar power generation is increasing
due to encouragement from GoK and
GoI. The cost of power purchased
from power exchange is also
decreasing due to competition
created in power generation. The
power purchase cost will be balanced
with the increase in demand. Striking a
balance between supply and demand
and the cost thereon is a continuous
process and the ESCOMs will strive
hard to reduce the power purchase
cost.
Commission’s Views: The reply by the MESCOM is noted.
47. The facilities and concessions made
available to seasonal industries
should be extended to the ice
plants and cold storage industries
as in the neighbouring states and
also a separate tariff be fixed.
MESCOM will abide by the orders of
the Commission.
Commission’s Views: This issue has been suitably dealt with in the relevant
chapter of the Tariff Order.
ccxvii
Annexure I
ESCOM's Total Approved Power Purchase For FY18
NAME OF THE GENERATING STATION
ENERGY
ALLOWED
(MU)
CAPACITY
CHARGES
(Rs Cr)
ENERGY
CHARGES
PER UNIT
RATE
(RS/Kwh)
ENERGY
CHARGES
(Rs Cr)
TOTAL COST
(Rs Cr)
PER UNIT
RATE
(RS/Kwh)
KPCL THERMAL STATIONS
RAICHUR THERMAL POWER
STATION_RTPS 1-7 (7x210) 7850.68 792.92 3.34 2622.13 3415.05 4.35
RAICHUR THERMAL POWER
STATION_RTPS 8 (1x250) 1269.00 227.15 2.88 365.47 592.62 4.67
BELLARY THERMAL POWER
STATIONS_BTPS-1 (1x500) 2516.00 274.36 3.52 885.63 1159.99 4.61
BELLARY THERMAL POWER
STATIONS_BTPS-2 (1x500) 2516.00 470.49 3.06 769.90 1240.39 4.93
BELLARY THERMAL POWER
STATIONS_BTPS-3 (1x700) 960.00 0.00 2.87 275.52 275.52 2.87
YTPS (1x 800) 960.00 0.00 2.92 280.32 280.32 2.92
TOTAL KPCL THERMAL 16071.68 1764.92 3.23 5198.97 6963.89 4.33
CGS SOURCES
N.T.P.C-RSTP-I&II
(3X200MW+3X500MW) 3214.00 198.82 2.29 735.65 934.48 2.91
N.T.P.C-RSTP-III (1X500MW) 792.00 75.94 2.40 190.08 266.02 3.36
NTPC-Talcher (4X500MW) 2845.00 225.86 1.68 478.13 703.99 2.47
Simhadri Unit -1 &2 (2X500MW) 987.68 163.12 2.77 274.00 437.12 4.43
NTPC Tamilnadu Energy
Company Ltd (NTECL)_Vallur TPS
Stage I &2 &3 (3X500MW)
702.21 125.25 2.64 185.34 310.60 4.42
Neyveli Lignite Corporation_NLC
TPS-II STAGE I (3X210MW) 710.08 82.73 2.82 200.24 282.97 3.99
Neyveli Lignite Corporation_NLC
TPS-II STAGE 2 (4X210MW) 1126.00 135.83 2.82 317.53 453.36 4.03
Neyveli Lignite Corporation_NLC
TPS I EXP (2X210MW) 698.00 98.92 2.61 182.07 281.00 4.03
Neyveli Lignite Corporation_NLC
TPS2 EXP (2X250MW) 520.98 111.33 2.55 132.67 244.00 4.68
NLC TAMINADU POWER LIMITED
(NTPL) (TUTICORIN) (2X500MW) 1153.11 216.03 2.50 288.28 504.30 4.37
MAPS (2X220MW) 199.00 0.00 42.80 42.80 2.15
Kaiga Unit 1&2 (2X220MW) 920.00 0.00 293.10 293.10 3.19
Kaiga Unit 3 &4 (2X220MW) 912.00 0.00 290.55 290.55 3.19
NPCIL-KudanKulam Atomic
Power Generating Station
(KKNPP U1 (1X1000MW)
1511.00 0.00 623.16 623.16 4.12
NPCIL-KudanKulam Atomic
Power Generating Station
(KKNPP) U2(1X1000MW)
345.77 0.00 142.60 142.60
4.12
NAME OF THE GENERATING STATION
ENERGY
ALLOWED
(MU)
CAPACITY
CHARGES
(Rs Cr)
ENERGY
CHARGES
PER UNIT
RATE
ENERGY
CHARGES
(Rs Cr)
TOTAL COST
(Rs Cr)
PER UNIT
RATE
(RS/Kwh)
ccxviii
(RS/Kwh)
DVC-Unit-1 &2 Meja TPS
(2x500MW) 1402.48 208.22 2.38 333.59 541.82 3.86
DVC-Unit-7 & 8-KODERMA TPS
(2x500MW) 1753.58 321.82 2.19 383.48 705.30 4.02
Kudgi 750.04 0.00 3.02 226.51 226.51 3.02
TOTAL CGS Energy @ KPTCL
periphery 20542.92 1963.88 5319.80 7283.68 3.55
TOTAL MAJOR IPPS
UDUPI POWER CORPORATION
LIMITED_UPCL (2x600) 6712.00 1141.04 3.20 2147.84 3288.88 4.90
KPCL HYDEL STATIONS
SHARAVATHI VALLEY
PROJECT_SVP (10x103.5+2x27.5) 4914.10 21.27 0.35 173.40 194.67 0.40
MAHATMA GANDHI HYDRO
ELECTRIC POWER HOUSE_MGHE
(4x21.6+4x13.2)
279.58 2.32 0.45 12.60 14.92 0.53
GERUSOPPA_GPH (SHARAVATHI
TAIL RACE_STR) (4x60) 521.59 24.43 1.11 57.94 82.37 1.58
KALI VALLEY PROJECT_KVP
(2x50+6x150) 3172.76 21.36 0.55 174.31 195.67 0.62
VARAHI VALLEY PROJECT_VVP
(4x115+2x4.5) 1068.73 40.64 1.18 125.65 166.29 1.56
ALMATTI DAM POWER
HOUSE_ADPH (1x15+5x55) 481.63 31.50 0.97 46.73 78.23 1.62
BHADRA HYDRO ELECTRIC
POWER HOUSE_BHEP
((1x2+2x12)+(1x7.2+1x6))
60.65 1.50 3.36 20.39 21.89 3.61
KADRA POWER HOUSE_KPH
(3x50) 362.80 19.38 1.46 53.13 72.51 2.00
KODASALLI DAM POWER
HOUSE_KDPH (3x40) 340.17 12.01 1.14 38.86 50.87 1.50
GHATAPRABHA DAM POWER
HOUSE_GDPH (2x16) 82.75 2.18 1.68 13.92 16.10 1.95
SHIVASAMUDRAM (4x4+6x3) &
SHIMSHAPURA (2x8.6) HYDRO
STATIONS.
292.24 3.54 0.80 23.52 27.06 0.93
MUNIRABAD POWER HOUSE
(2x9+1x10) 91.46 0.43 0.58 5.32 5.75 0.63
TOTAL KPCL HYDRO 11668.46 180.56 0.64 745.77 926.33 0.79
OTHER HYDRO
PRIYADARSHINI JURALA HYDRO
ESLECTRIC STATION (6x39) 110.00 4.35 47.82 47.82 4.35
TUNGABHADRA DAM POWER
HOUSE_TBPH (4x9+4x9) 9.37 1.83 1.72 1.72 1.83
TOTAL OTHER HYDRO 119.37 4.15 49.54 49.54 4.15
RENEWABLE ENERGY SOURCES
WIND-IPPS 3704.87 1343.76 1343.76 3.63
KPCL-WIND (9x0.225+10x0.230) 7.80 2.89 2.89 3.71
MINI HYDEL-IPPS 1009.11 331.59 331.59 3.29
CO-GEN 160.01 74.30 74.30 4.64
NAME OF THE GENERATING STATION
ENERGY
ALLOWED
(MU)
CAPACITY
CHARGES
(Rs Cr)
ENERGY
CHARGES
PER UNIT
RATE
(RS/Kwh)
ENERGY
CHARGES
(Rs Cr)
TOTAL COST
(Rs Cr)
PER UNIT
RATE
(RS/Kwh)
CAPPTIVE 13.17 3.74 3.74 2.84
BIOMASS 119.71 59.23 59.23 4.95
ccxix
SOLAR-existing (anticipated as
on 31.03.2017) 932.00 618.10 618.10 6.63
Solar-New Park 535.96 187.59 187.59 3.50
Solar-KREDL 672.16 353.29 353.29 5.26
SOLAR-KPCL
(YELESANDRA,ITNAL,YAPALDINNI,
SHIMSHA) (3x1+3x1+1x3x1x5)
10.61 6.37 6.37 6.00
TOTAL RE 7165.41 2980.86 2980.86 4.16
NTPC Bundled power 582.21 258.46 258.46 4.44
Power purchase from Co gen 1300.00 451.10 451.10 3.47
Short term power purchase 1120.00 467.04 467.04 4.17
Short term Purchase from
MSEDCL 294.00 106.43 106.43 3.62
TRANSMISSION CHARGES 0.00
PGCIL CHARGES 1066.00 1066.00
KPTCL CHARGES 2753.70 2753.70
SLDC 24.77 24.77
POSOCO CHARGES 3.48 3.48
TOTAL INCLUDING
TRANSMISSION & SLDC CHARGES 65576.04 8898.35 17725.80 26624.15 4.06
Annexure II
MESCOM’s Approved Power Purchase For FY18
NAME OF THE GENERATING STATION
% SHARE
OF
ENERGY
ALLOWED
ENERGY
ALLOWED
(MU)
CAPACIT
Y
CHARGES
(Rs Cr)
ENERGY
CHARGES
PER UNIT
RATE
(RS/Kwh)
ENERGY
CHARGES
(Rs Cr)
TOTAL
COST
(Rs
Cr)
PER
UNIT
RATE
(RS/Kw
h)
KPCL THERMAL STATIONS
RAICHUR THERMAL POWER
STATION_RTPS 1-7 (7x210) 5.000 392.53 39.65 3.34 131.11
170.7
5 4.35
RAICHUR THERMAL POWER
STATION_RTPS 8 (1x250) 8.393 106.51 19.06 2.88 30.67 49.74 4.67
BELLARY THERMAL POWER
STATIONS_BTPS-1 (1x500) 8.393 211.17 23.03 3.52 74.33 97.36 4.61
BELLARY THERMAL POWER
STATIONS_BTPS-2 (1x500) 8.393 211.17 39.49 3.06 64.62
104.1
1 4.93
BELLARY THERMAL POWER
STATIONS_BTPS-3 (1x700) 8.393 80.57 0.00 2.87 23.12 23.12 2.87
YTPS (1x 800) 8.393 80.57 0.00 2.92 23.53 23.53 2.92
TOTAL KPCL THERMAL
1082.52 121.23 3.21 347.38
468.6
1 4.33
CGS SOURCES
N.T.P.C-RSTP-I&II
(3X200MW+3X500MW) 8.393 269.75 16.69 2.29 61.74 78.43 2.91
ccxx
N.T.P.C-RSTP-III (1X500MW) 8.393 66.47 6.37 2.40 15.95 22.33 3.36
NTPC-Talcher (4X500MW) 8.393 238.78 18.96 1.68 40.13 59.09 2.47
Simhadri Unit -1 &2 (2X500MW) 8.393 82.90 13.69 2.77 23.00 36.69 4.43
NTPC Tamilnadu Energy
Company Ltd (NTECL)_Vallur TPS
Stage I &2 &3 (3X500MW) 8.393 58.94 10.51 2.64 15.56 26.07 4.42
Neyveli Lignite Corporation_NLC
TPS-II STAGE I (3X210MW) 8.393 59.60 6.94 2.82 16.81 23.75 3.99
Neyveli Lignite Corporation_NLC
TPS-II STAGE 2 (4X210MW) 8.393 94.51 11.40 2.82 26.65 38.05 4.03
Neyveli Lignite Corporation_NLC
TPS I EXP (2X210MW) 8.393 58.58 8.30 2.61 15.28 23.58 4.03
Neyveli Lignite Corporation_NLC
TPS2 EXP (2X250MW) 8.393 43.73 9.34 2.55 11.14 20.48 4.68
NLC TAMINADU POWER LIMITED
(NTPL) (TUTICORIN) (2X500MW) 8.393 96.78 18.13 2.50 24.20 42.33 4.37
MAPS (2X220MW) 8.393 16.70 2.15 3.59 3.59 2.15
Kaiga Unit 1&2 (2X220MW) 8.393 77.22 3.19 24.60 24.60 3.19
Kaiga Unit 3 &4 (2X220MW) 8.393 76.54 3.19 24.39 24.39 3.19
ccxxi
NAME OF THE GENERATING
STATION
% SHARE OF
ENERGY ALLOWED
ENERGY
ALLOWED
(MU)
CAPACI
TY
CHARGE
S
(Rs Cr)
ENERGY
CHARGES
PER UNIT
RATE
(RS/Kwh)
ENERGY
CHARGES
(Rs Cr)
TOTAL
COST
(Rs Cr)
PER UNIT
RATE (RS/Kwh)
NPCIL-KudanKulam Atomic
Power Generating Station
(KKNPP U1 (1X1000MW) 8.393 126.82 4.12 52.30 52.30 4.12
NPCIL-KudanKulam Atomic
Power Generating Station
(KKNPP) U2(1X1000MW) 8.393 29.02 4.12 11.97 11.97 4.12
DVC-Unit-1 &2 Meja TPS
(2x500MW) 8.393 117.71 17.48 2.38 28.00 45.47 3.86
DVC-Unit-7 & 8-KODERMA
TPS (2x500MW) 8.393 147.18 27.01 2.19 32.19 59.20 4.02
Kudgi 8.393 62.95 0.00 3.02 19.01 19.01 3.02
TOTAL CGS Energy @ KPTCl
periphery
1724.17 164.83 2.59 446.49 611.32 3.55
TOTAL MAJOR IPPS
UDUPI POWER
CORPORATION
LIMITED_UPCL (2x600) 3.058 205.28 34.90 3.20 65.69 100.59 4.90
KPCL HYDEL STATIONS
SHARAVATHI VALLEY
PROJECT_SVP
(10x103.5+2x27.5) 12.857 631.80 2.73 0.35 22.29 25.03 0.40
MAHATMA GANDHI HYDRO
ELECTRIC POWER
HOUSE_MGHE
(4x21.6+4x13.2) 8.393 23.46 0.19 0.45 1.06 1.25 0.53
GERUSOPPA_GPH
(SHARAVATHI TAIL
RACE_STR) (4x60) 8.393 43.78 2.05 1.11 4.86 6.91 1.58
KALI VALLEY PROJECT_KVP
(2x50+6x150) 17.900 567.92 3.82 0.55 31.20 35.02 0.62
VARAHI VALLEY
PROJECT_VVP (4x115+2x4.5) 8.393 89.70 3.41 1.18 10.55 13.96 1.56
ALMATTI DAM POWER
HOUSE_ADPH (1x15+5x55) 8.393 40.42 2.64 0.97 3.93 6.57 1.62
BHADRA HYDRO ELECTRIC
POWER HOUSE_BHEP
((1x2+2x12)+(1x7.2+1x6)) 8.393 5.09 0.13 3.36 1.71 1.84 3.61
KADRA POWER HOUSE_KPH
(3x50) 8.393 30.45 1.63 1.46 4.46 6.09 2.00
KODASALLI DAM POWER
HOUSE_KDPH (3x40) 8.393 28.55 1.01 1.14 3.26 4.27 1.50
GHATAPRABHA DAM
POWER HOUSE_GDPH (2x16) 8.393 6.95 0.18 1.68 1.17 1.35 1.95
SHIVASAMUDRAM (4x4+6x3)
& SHIMSHAPURA (2x8.6)
HYDRO STATIONS. 8.393 24.53 0.30 0.80 1.97 2.27 0.93
MUNIRABAD POWER HOUSE
(2x9+1x10) 8.393 7.68 0.04 0.58 0.45 0.48 0.63
TOTAL KPCL HYDRO
1500.33 18.13 0.58 86.91 105.04 0.70
OTHER HYDRO
PRIYADARSHINI JURALA
HYDRO ESLECTRIC STATION
(6x39) 8.393 9.23 4.35 4.01 4.01 4.35
TUNGABHADRA DAM
POWER HOUSE_TBPH 8.393 0.79 1.83 0.14 0.14 1.83
ccxxii
(4x9+4x9)
TOTAL OTHER HYDRO 8.393 10.02 4.15 4.16 4.16 4.15
NAME OF THE GENERATING
STATION
% SHARE OF
ENERGY ALLOWED
ENERGY
ALLOWED
(MU)
CAPACI
TY
CHARGE
S
(Rs Cr)
ENERGY
CHARGES
PER UNIT
RATE
(RS/Kwh)
ENERGY
CHARGES
(Rs Cr)
TOTAL
COST
(Rs Cr)
PER UNIT
RATE
(RS/Kwh
)
RENEWABLE ENERGY
SOURCES
WIND-IPPS 269.43 97.72 97.72 3.63
KPCL-WIND
(9x0.225+10x0.230) 0.00 0.00 0.00 3.71
MINI HYDEL-IPPS 281.61 92.54 92.54 3.29
CO-GEN 0.00 0.00 4.64
CAPPTIVE 2.44 0.69 0.69 2.84
BIOMASS 0.00 0.00 4.95
SOLAR-existing (anticipated
as on 31.03.2017) 93.43 61.96 61.96 6.63
Solar-New Park 8.017 42.97 15.04 15.04 3.50
Solar-KREDL 50.04 26.30 26.30 5.26
SOLAR-KPCL
(YELESANDRA,ITNAL,YAPALD
INNI,SHIMSHA)
(3x1+3x1+1x3x1x5) 0.00 0.00 0.00 6.00
TOTAL RE 739.92 294.25 294.25
NTPC Bundled power 9.246 53.83 23.90 23.90 4.44
Power purchase from Co
gen 8.018 104.24 36.17 36.17 3.47
Short term power purchase 12.500 140.00 58.38 58.38 4.17
Short term Purchase from
MSEDCL 8.018 23.573 8.53 8.53 3.62
TRANSMISSION CHARGES
PGCIL CHARGES 85.53 85.53
KPTCL CHARGES 216.20 216.20
SLDC 1.94 1.94
POSOCO CHARGES 0.28 0.28
TOTAL INCLUDING
TRANSMISSION & SLDC
CHARGES 5583.87 643.04 1371.86 2014.90 3.61
ccxxiii
With ref. to
ACS
Approved as per RST
Sales-M U Revenue
Rs. crores
Sales-M U Revenue
Rs. crores
1
LT-1[fully subsidised
by GoK]*
Bhagya Jyothi/Kutir Jyothi
44.93 26.69 44.92 29.24 6.51 0.00 -2.12
2
LT-2(a)(i) Dom. / AEH - Applicable to City
Municipal Corporations areas and
all area under Urban Local 785.96 535.07 765.51 458.64 5.99 -7.97 -9.91
3
LT-2(a)(ii) Dom. / AEH - Applicable to areas
under Village Panchayats 631.44 375.14 654.74 321.69 4.91 -24.53 -26.12
4
LT-2(b)(i) Pvt. Educational Institutions
Applicable to all areas of Local
Bodies including City Corporations 10.94 9.31 11.62 8.65 7.44 14.34 11.93
5
LT-2(b)(ii) Pvt. Educational Institutions
Applicable to areas under Village
Panchayats 6.54 5.39 5.86 3.81 6.50 -0.12 -2.22
6
LT-3(i) Commercial - Applicable in areas
under all ULBs including City
Corporations. 254.05 253.04 253.56 229.58 9.05 39.08 36.15
7
LT-3(ii) Commercial - Applicable to areas
under Village Panchayats 121.59 115.30 122.09 99.99 8.19 25.81 23.16
8 LT-4(a)* IP<=10HP 1352.32 839.79 1352.32 704.56 5.21 -19.97 -21.65
9 LT-4(b) IP>10HP 0.92 0.78 0.93 0.47 5.05 -22.37 -24.00
10
LT-4 (c) (i) Pvt. Nurseries, Coffee & Tea
Plantations of sanctioned load of
10 HP & below 3.09 1.89 2.90 1.75 6.03 -7.18 -9.13
11
LT-4 (c) (ii) Pvt. Nurseries, Coffee & Tea
Plantations of sanctioned load of
above 10 HP 3.31 2.27 4.34 2.56 5.90 -9.47 -11.38
12 LT-5 (a) LT Industrial 142.60 119.37 56.22 47.03 8.37 28.49 25.78
13 LT-5 (b) LT Industrial 0.00 0.00 84.33 62.70 7.44 14.21 11.81
14 LT-6 Water supply 122.74 70.10 122.75 57.34 4.67 -28.24 -29.76
15 LT-6 Public lighting 68.70 54.70 69.70 43.90 6.30 -3.25 -5.29
16 LT-7(a) Temporary supply 19.63 32.39 19.29 32.01 16.59 154.90 149.54
17LT-7 (b) Permanent Supply to Adversiting
& Holding 0.00 0.00 0.34 0.37 10.88 67.16 63.64
3568.76 2441.23 3571.42 2104.29 5.89 -9.49 -11.40
1 HT-1 Water supply & sew erage 88.95 58.00 88.26 47.90 5.43 -16.63 -11.03 -6.59
2 HT-2(a) Industrial - 601.21 543.18 614.81 478.91 7.79 19.66 27.70 34.07
3 HT-2(b) Commercial 212.69 216.52 196.74 181.68 9.23 41.85 51.38 58.94
4 HT-2 ( c)(i)
Govt./ Aided Hospitals &
Educational Institutions 53.39 43.17 67.43 46.90 6.96 6.85 14.03 19.72
5 HT-2 ( c)(ii)
Hospitals and Educational
Institutions other than covered
under HT-2( c) (i) 150.95 141.71 136.91 112.87 8.24 26.63 35.14 41.89
6
HT-3(a)(i) Lift Irrigation - Applicable to lif t
irrigation schemes under Govt
Dept, / Govt. ow ned Corporations 8.32 5.98 10.84 2.44 2.25 -65.42 -63.10 -61.26
7
HT-3(a)(ii) Lift Irrigation - Applicable to
Private lif t irrigation schemes Lift
Irrigaton societies on
urban/express feeders 0.00 0.00 0.05 0.02 0.00 0.00 0.00 0.00
8HT-3(a)(iii) LI schemes other than those
covered under HT 3(a)(ii) 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00
9
HT - 3b Irrigation & Agriculture
Farms,Govt. Horticultural Farms,
Pvt.Horticulture Nurseries,
Coffee, Tea,Cocanut & Arecanut
Plantations 0.29 0.20 0.36 0.15 4.17 -36.00 -31.69 -28.28
10 HT-4 Residential Apartments -Colonies 20.01 15.60 18.78 12.66 6.74 3.56 10.52 16.04
11 HT-5 Temporary supply 8.99 10.57 8.99 10.63 11.82 81.56 93.76 103.44
1144.80 1034.93 1143.18 894.16 7.82 20.15 28.22 34.62
4713.56 3476.16 4714.60 2998.45 6.35
68.36 74.93
68.63 9.59
19.08 13.57 85.33
4801.27 3558.09 4809.52 3073.38 6.51 0.00
* These categories are subsidised by GoK. In case subsidy is not released by the Gok in advance,MESCOM
shall raise demand & collect CDT of Rs.6.51 unit by BJ/KJ & Rs.5.21/unit from IP set Consumers.
* Voltage w ise cost of supply per unit to: LT Rs: 6.65, HT Rs.6.10 & EHT- Rs.5.81 Page 204
PROPOSED AND APPROVED REVENUE AND REALISATION AND LEVEL OF CROSS SUBSIDY FOR FY-18 OF MESCOM
Annexure- III
KPC/ Wheeled
Description
Grand Total
Proposed Supply to MSEZ @ IF Points
Misc. Revenue
Level o f
C ro ss Subsidy
in %
LT - TOTAL
HT - TOTAL
With ref. to voltage wise
COS*
Level of
Cross
Subsidy in %
(EHT)
TOTAL
Average
Realisation
in Rs. Per
Kwh
Proposed by M ESCOM
Sl No Category
Level of
Cross
Subsidy in
% (LT&HT)
ccxxiv
ANNEX - IV
ELECTRICITY TARIFF - 2018
K.E.R.C. ORDER DATED: 11th April, 2017
Effective for the Electricity consumed from the first meter
reading date falling on or after 01.04.2017
Mangalore
Electricity Supply Company Ltd.,
ccxxv
ELECTRICITY TARIFF-2018
GENERAL TERMS AND CONDITIONS OF TARIFF:
(APPLICABLE TO BOTH HT AND LT)
1. Supply of power is subject to execution of agreement by the
Consumer in the prescribed form, payment of prescribed
deposits and compliance of terms and conditions as stipulated
in the Conditions of Supply of Electricity of the Distribution
Licensees in the State of Karnataka and Regulations issued
under the Electricity Act, 2003 at the time of supply and
continuation of power supply is subject to compliance of the
said Conditions of Supply / Regulations as amended from time
to time.
2. The tariffs are applicable to only single point of supply unless
otherwise approved by the Licensee.
3. The Licensee does not bind himself to energize any installation,
unless the Consumer guarantees the minimum charges. The
minimum charge is the power supply charges in accordance
with the tariff in force from time to time. This shall be payable by
the Consumer until power supply agreement is terminated,
irrespective of the installation being in service or under
disconnection.
4. The tariffs in the schedule are applicable to power supply within
the area of operation of the licensee.
5. The tariffs are subject to levy of Tax and Surcharges thereon as
may be decided by the State Government from time to time.
6. For the purpose of these tariffs, the following conversion table would
be used:
ccxxvi
1 HP=0.746 KW. 1HP=0.878 KVA.
7. The bill amount will be rounded off to the nearest Rupee, i.e., the bill
amount of 50 Paise and above will be rounded off to the next higher
Rupee and the amount less than 50 Paise will be ignored.
8. Use of power for temporary illumination in the premises already having
permanent power supply for marriages, exhibitions in hotels, sales
promotions etc., is limited to sanctioned load at the applicable
permanent power supply tariff rates. Temporary tariff rates will be
applicable in case the load exceeds sanctioned load as per the
Conditions of Supply of Electricity of the Distribution Licensees in the
State of Karnataka.
9. No LT power supply will be given where the requisitioned load is 50
KW/67 HP and above. This condition does not apply for installations
serviced under clause 3.1.1 of K.E.R.C. (Recovery of Expenditure for
supply of Electricity) Regulations, 2004 and its amendments from time
to time. The applicant is however at liberty to avail HT supply for lesser
loads. The minimum contract demand for HT supply shall be 25 KVA or
as amended from time to time by the Licensee with the approval of
KERC.
10. The Consumer shall not resell electricity purchased from the Licensee
to a third party except -
(a) Where the Consumer holds a sanction or a tariff provision for
distribution and sale of energy,
(b) Under special contract permitting the Consumer for resale of
energy in accordance with the provisions of the contract.
11. Non-receipt of the bill by the Consumer is not a valid reason for non-
payment. The Consumer shall notify the office of issue of the bill, if the
same is not received within 7 days from the meter reading date.
Otherwise, it will be deemed that the bills have reached the Consumer
in due time.
12. The Licensee will levy the following charges for non-realization of each
Cheque
ccxxvii
1 Cheque amount upto
Rs. 10,000/-
5% of the amount subject to a
minimum of Rs100/-
2 Cheque amount of
Rs. 10,001/- and upto
Rs. 1,00,000/-
3% of the amount subject to a
minimum of Rs500/-
3 Cheque amount above
Rs. 1 Lakh:
2% of the amount subject to a
minimum of Rs3000/-
13. In respect of power supply charges paid by the Consumer through
money order, Cheque /DD sent by post, receipt will be drawn and the
Consumer has to collect the same.
14. In case of any belated payment, simple interest at the rate of 1 % per
month will be levied on the actual No. of days of delay subject to a
minimum of Re.1/- for LT installation and Rs.100/- for HT installation. No
interest is however levied for arrears of Rs.10/- and less.
15. All LT Consumers, except BhagyaJyothi and KutirJyothi Consumers, shall
provide current limiter/Circuit Breakers of capacity prescribed by the
Licensee depending upon the sanctioned load.
16. All payments made by the Consumer will be adjusted in the following
order of priority: -
(a) Interest on arrears of Electricity Tax
(b) Arrears of Electricity Tax
(c) Arrears of Interest on Electricity charges
(d) Arrears of Electricity charges
(e) Current month’s dues
17. For the purpose of billing,
(i) the higher of the rated load or sanctioned load in respect of LT
installations which are not provided with Electronic Tri-Vector
meter.
(ii) sanctioned load or MD recorded, whichever is higher, in respect
of installations provided with static meters or Electronic Tri-Vector
meter will be considered.
Penalty and other clauses shall apply if sanctioned load is
exceeded.
ccxxviii
18. The bill amount shall be paid within 15 days from the date of presentation
of the bill failing which the interest becomes payable.
19. For individual installations, more than one meter shall not be provided
under the same tariff. Wherever two or more meters are existing for
individual installation, the sum of the consumption recorded by the meters
shall be taken for billing, till they are merged.
20. In case of multiple connections in a building, all the meters shall be
provided at one easily accessible place in the ground floor.
21. Reconnection charges: The following reconnection charges shall be
levied in case of disconnection and included in the monthly bill.
For reconnection of:
a Single Phase Domestic installations
under Tariff schedule LT 1 & LT2 (a)
Rs.20/- per installation
b Three Phase Domestic installations
under Tariff schedule LT2 (a) and
Single Phase Commercial & Power
installations.
Rs.50/- per installation
c All LT installations with 3 Phase supply
other than LT2 (a)
Rs.100/- per
installation
d All HT& EHT installations Rs.500/-per
Installation.
22. Revenue payments upto and inclusive of Rs.10, 000/- shall be made by
cash or cheque or D.D and payments above Rs.10, 000/- shall be made
by cheque or D.D only. Payments under other heads of account shall be
made by cash or D.D up to and inclusive of Rs.10, 000/- and
payment above Rs.10, 000/-shall be by D.D only.
Note: The Consumers can avail the facility of payment of monthly power
supply bill through Electronic clearing system (ECS)/ Credit cards /
RTGS/ NEFT/ on-line E-Payment / Digital mode of payments in line
with the guidelines issued by the RBI wherever such facility is
provided by the Licensee in respect of revenue payments up to the
limit prescribed by the RBI.
23. For the types of installations not covered under any Tariff schedules, the
Licensee is permitted to classify such installations under appropriate Tariff
schedule under intimation to the K.E.R.C.
24. Seasonal Industries
Applicable to all Seasonal Industries
ccxxix
i) The industries that intend to avail this benefit shall have Electronic Tri-
Vector Meter fitted to their installations.
ii) ‘Working season’ months and ‘off-season’ months shall be
determined by an order issued by the Executive Engineer of the
concerned O&M Division of the Licensee as per the request of the
Consumer and will continue from year to year unless otherwise
altered. The Consumer shall give a clear one month’s notice in
case he intends to change his ‘ working season’.
iii) The consumption during any month of the declared off-season shall
not be more than 25% of the average consumption of the previous
working season.
iv) The ‘Working season’ months and ‘off-season’ months shall be full–
calendar months. If the power availed during a month exceeds
the allotment for the ‘off-season’ month, it shall be taken for
calculating the billing demand as if the month is the ‘working
season’ month.
v) The Consumer can avail the facility of ‘off-season’ up to six months
in a calendar year not exceeding in two spells in that year. During
the ‘off-season period, the Consumer may use power for
administrative offices etc., and for overhauling and repairing plant
and machinery.
25 Whether an institution availing Power supply can be considered as
charitable or not will be decided by the Licensee on the
production of certificate Form-12 A from the Income Tax
department.
26 Time of the Tariff (ToD)
The Commission as decides in the earlier tariff order, decide to
continue compulsory Time of Day Tariff for HT2 (a), HT2 (b) and HT2(c)
consumers with a contract demand of 500 KVA and above. Further,
the optional ToD would continue as existing earlier for HT2(a), HT2(b)
and HT2(c) consumers with contract demand of less than 500 KVA.
Also the ToD for HT1 consumers on optional basis would continue as
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existing earlier. Details of ToD tariff are indicated under the respective
tariff category.
27. SICK INDUSTRIES:
The Government of Karnataka has extended certain reliefs for
revival/rehabilitation of sick industries under the New Industrial Policy
2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001. Further, the
Government of Karnataka has issued G.O No.CI2 BIF 2010, dated
21.10.2010. The Commission, in its Tariff Order 2002, has accorded
approval for implementation of reliefs to the sick industries as per the
Government policy and the same was continued in the subsequent
Tariff Orders. In view of issue of the G.O No.CI2 BIF 2010, dated
21.10.2010, the Commission has accorded approval to ESCOMs for
implementation of the reliefs extended to sick industrial units for their
revival / rehabilitation on the basis ofthe orders issued by the
Commissioner for Industrial Development and Director of Industries &
Commerce, Government of Karnataka.
28. Incentive for Prompt Payment / Advance Payment: An incentive at the
rate of 0.25% of such bill shall be given to the following Consumers by way
of adjustment in the subsequent month’s bill:
(i) In all cases of payment through ECS.
(ii) And in the case of monthly bills exceeding Rs.1,00,000/-
(Rs. One akh), if the payment is made 10 days in
advance of the due date.
(iii) Advance Payment exceeding Rs.1000/- made by the
Consumers towards monthly bills
29. Conditions of Supply of Electricity of the Distribution Licensees in the State
of Karnataka and amendments issued thereon from time to time and
Regulations issued under the Electricity Act, 2003 will prevail over the
extract given in this tariff book in the event of any discrepancy.
30. Self-Reading of Meters:
The Commission has approved Self-Reading of Meters by Consumers
and issue of bills by the Licensee based on such readings and the
Licensee shall take the reading at least once in six months and
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reconcile the difference, if any and raise the bills accordingly. This
procedure may be implemented by the Licensee as stipulated under
Section 26.01 of Conditions of Supply of Electricity of the Distribution
Licensees in the State of Karnataka.
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ELECTRICITY TARIFF - 2018
PART-1
HIGH TENSION SUPPLY
Applicable to Bulk Power Supply at Voltages of 11KV (including
2.3/4.6 KV) and above at Standard High Voltage or Extra High
Voltages when the Contract Demand is 50 KW / 67 HP and above.
CONDITIONS APPLICABLE TO BILLING OF HT INSTALLATIONS:
1. Billing Demand
A) The billing demand during unrestricted period shall be the
maximum demand recorded during the month or 75% of the
CD, whichever is higher.
B) When the Licensee has imposed demand cut of 25% or less, the
conditions stipulated in (A) shall apply.
C) When the demand cut is in excess of 25%, the billing demand
shall be the maximum demand recorded or 75% of the
restricted demand, whichever is higher.
D) If at any time the maximum demand recorded exceeds the CD
or the demand entitlement, or opted demand entitlement
during the period of restrictions, if any, the Consumer shall pay
for the quantum of excess demand at two times the normal rate
per KVA per month as deterrent charges as per Section 126(6)
of the Electricity Act, 2003. For over-drawal during the billing
period, the penalty shall be two times the normal rate.
E) During the periods of disconnection, the billing demand shall be
75% of CD, or 75% of the demand entitlement that would have
been applicable, had the installation been in service, whichever
is less. This provision is applicable only, if the installation is under
disconnection for the entire billing month.
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F) During the period of energy cut, the Consumer may get his
demand entitlement lowered, but not below the percentage of
energy entitlement, (For example, In case the energy
entitlement is 40% and the demand entitlement is 80%, the re-
fixation of demand entitlement cannot be lower than 40% of the
CD). The benefit of lower demand entitlement will be given
effect to from the meter reading date of the same month, if the
option is exercised on or before 15th of the month. If the option is
exercised on or after 16th of the month, the benefit will be given
effect to from the next meter reading date. The Consumer shall
register such option by paying a processing fee of Rs.100/- at
the Jurisdictional sub-division office.
(i) The billing demand in such cases, shall be the “Revised
(Opted) Demand Entitlement” or, the recorded demand,
whichever is higher. Such option for reduction of demand
entitlement, is allowed only once during the entire span
of that particular “Energy Cut Period”. The Consumer,
can however opt for a higher demand entitlement upto
the level permissible under the demand cut notification,
and the benefit will be given effect to from the next
meter reading date. Once the Consumer opts for
enhancement of demand, which has been reduced
under Clause (F), no further revision is permitted during
that particular energy cut period.
(ii) The opted reduced demand entitlement will
automatically cease to be effective, when the energy
cut is revised. The facility for reduction and enhancement
can however be exercised afresh by the Consumer as
indicated in the previous paras.
G) For the purpose of billing, the billing demand of 0.5 KVA and
above will be rounded off to the next higher KVA, and billing
demand of less than 0.5 KVA shall be ignored.
2. Power factor (PF)
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It shall be the responsibility of the HT Consumer to determine the
capacity of PF correction apparatus and maintain an average PF
of not less than 0.90.
(i) The specified P.F. is 0.90. If the power factor goes below 0.90
Lag, a surcharge of 3 Paise per unit consumed will be levied
for every reduction of P.F. by 0.01 below 0.90 Lag.
(ii) T
he power factor when computed as the ratio of KWh /
KVAh will be determined upto 3 decimals (ignoring figures in
the other decimal places), and then rounded off to the
nearest second decimal as illustrated below:
(a) 0.8949 to be rounded off to 0.89
(b) 0.8951 to be rounded off to 0.90
In respect of Electronic Tri-Vector meters, the recorded average PF
over the billing period shall be considered for billing purposes. If the
same is not available, the ratio of KWh to KVAh consumed in the
billing month shall be considered.
3. Rebate for supply at high voltage:
If the Consumer is availing power at voltage higher than 13.2 KV, he will
be entitled to a rebate as indicated below:
Supply Voltage: Rebate
A) 33/66 KV 2 Paise/unit of energy consumed
B) 110 KV 3 Paise/unit of energy consumed
C) 220 KV 5 Paise/unit of energy consumed
The above rebate will be allowed in respect of all the installations of
the above voltage class, including the existing installations, and also
for installations converted from 13.2 KV and below to 33 KV and above
and also for installations converted from 33/66 KV to 110/220 KV, from
the next meter reading date after conversion / service / date of
notification of this Tariff order, as the case may be. The above rebate is
applicable only on the normal energy consumed by the Consumer,
including the consumption under TOD Tariff, and is not applicable on
any other energy allotted and consumed, if any, viz.,
i) Wheeled Energy.
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ii) Any energy, including the special energy allotted over and above
normal entitlement.
iii) Energy drawal under special incentive scheme, if any.
The above rebate is not applicable for Railway Traction.
4. In respect of Residential Quarters/ Colonies availing Bulk power supply
by tapping the main HT supply, the energy consumed by such Colony
loads, metered at single point, shall be billed under HT-4 tariff schedule.
No reduction in demand recorded in the main HT meter will be
allowed.
5. Energy supplied may be utilized for all purposes associated with the
working of the installations, such as, Office, Stores, Canteens, Yard
Lighting, Water Supply and Advertisements within the premises.
6. Energy can also be used for construction, modification and expansion
purposes within the premises.
7. Power supply under HT-4 tariff schedule may be used for Commercial
and other purposes inside the colony, for installations such as Canteen,
Club, Shop, Auditorium etc., provided, this load is less than 10% of the
CD.
8. In respect of Residential Apartments availing HT Power supply under HT-
4 tariff schedule, the supply availed for Commercial and other
purposes like Shops, Hotels, etc., will be billed under appropriate tariff
schedule, (Only Energy charges) duly deducting such consumption in
the main HT supply bill. No reduction in the recorded demand of the
main HT meter is allowed. Common areas shall be billed at Tariff
applicable to that of the predominant Consumer category. [
9. Seasonal Industries
a. The industries, which intend to utilize seasonal industry benefit,
shall conform to the conditionalities under Para no. 24 of the
General terms and conditions of tariff (applicable to both HT &
LT).
b. The industries that intend to avail this benefit, shall have
Electronic Tri-Vector Meter fitted to the installation.
c. Monthly charges during the working season shall be the
demand charges on 75% of the contract demand or the
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recorded maximum demand during the month, whichever is
higher, plus the energy charges
d. Monthly charges during the off season, shall be demand
charges on the maximum demand recorded during the month,
or 50% of the CD whichever is higher plus the energy charges.
TARIFF SCHEDULE HT 1
Applicable to Water Supply, Drainage / Sewerage water treatment plant and
Sewerage Pumping installations, belonging to Karnataka Urban Water Supply
and Sewerage Board, other local bodies, State and Central Government.
RATE SCHEDULE
Demand charges Rs.200/-KVA of billing demand/month
Energy charges 485 paise/unit
TOD Tariff at the option of the Consumer Time of Day Increase + / reduction (-) in energy
charges over the normal tariff applicable
06.00 Hrs to 10.00 Hrs + 100 paise per unit
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs + 100 paise per unit
22.00 Hrs to 06.00 Hrs (-)100 paise per unit
Note: Energy supplied to residential quarters availing bulk supply by
the above category of Consumer, shall be metered separately
at a single point, and the energy consumed shall be billed at HT-
4 Tariff. No reduction in the demand recorded in the main HT
meter will be allowed.
TARIFF SCHEDULE HT-2(a)
Applicable to Industries, Factories, Workshops, Research &
Development Centres, Industrial Estates, Milk dairies, Rice Mills, Phova
Mills, Roller Flour Mills, News Papers, Printing Press, Railway
Workshops/KSRTC Workshops/ Depots, Crematoriums, Cold Storage,
Ice & Ice-cream mfg. Units, Swimming Pools of local bodies, Water
Supply Installations of KIADB and other industries, all Defence
Establishments. Hatcheries, Poultry Farm, Museum, Floriculture, Green
House, Bio Technical Laboratory, Hybrid Seeds processing Units, Stone
Crushers, Stone cutting, Bakery Product Manufacturing Units, Mysore
Palace illumination, Film Studios, Dubbing Theatres, Processing, Printing,
Developing and Recording Theaters, Tissue Culture, Aqua Culture,
Prawn Culture, Information Technology Industries engaged in
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development of Hardware & Software, Information Technology (IT)
enabled Services / Start-ups(As defined in GOI notification dated
17.04.2015)/ Animation / Gaming / Computer Graphics as certified by
the IT & BT Department of GOK/GOI, Drug Mfg. Units, Garment Mfg.
Units, Tyre retreading units, Nuclear Power Projects, Stadiums
maintained by Government and local bodies, also Railway Traction,
Effluent treatment plants and Drainage water treatment plants owned
other than by the local bodies, LPG bottling plants, petroleum pipeline
projects, Piggery farms, Analytical Lab for analysis of ore metals, Saw
Mills, Toy/wood industries, Satellite communication centres, and
Mineral water processing plants / drinking water bottling plants.
RATE SCHEDULE
HT-2(a): Applicable to all areas of MESCOM.
Demand charges Rs.200/kVA of billing demand/month
Energy charges
For the first one lakh units 660 paise per unit
For the balance units 680 paise per unit
Railway Traction and Effluent Treatment Plants
Demand charges Rs.210/kVA of billing demand/month
Energy Charges 620 paise per unit for all the units
TARIFF SCHEDULE HT-2(b)
Applicable to Commercial Complexes, Cinemas, Hotels, Boarding & Lodging,
Amusement Parks, Telephone Exchanges, Race Course, All Clubs, T.V. Station, All
India Radio, Railway Stations, Air Port, KSRTC bus stations, All offices, Banks,
Commercial Multi-storied buildings.
APMC Yards, Stadiums other than those maintained by Government and Local
Bodies, Construction power for irrigation, Power Projects and Konkan Railway
Project, Petrol / Diesel and Oil storage plants, I.T. based medical transcription
centers, telecom, call centers, BPO/KPO, Diagnostic centres, concrete mixture
(Ready Mix Concrete) units.
RATE SCHEDULE
HT-2 (b): Applicable to all areas of MESCOM
Energy charges
Demand charges Rs.220 /kVA of billing demand/month
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For the first two lakh units 825 paise per unit
For the balance units 835 paise per unit
TARIFF SCHEDULE HT-2(c)
RATE SCHEDULE
HT-2 (c) (i)- Applicable to Government Hospitals, Hospitals run by Charitable
Institutions, ESI hospitals, Universities and Educational Institutions belonging to
Government and Local bodies, Aided Educational Institutions andHostels of
all Educational Institutions.
Demand charges Rs.200/kVA of billing demand/month
Energy charges
For the first one lakh units 640 paise per unit
For the balance units 680 paise per unit
RATE SCHEDULE
HT-2 (c) (ii) - Applicable to Hospitals and Educational Institutions other than
those covered under HT-2 (c)(i).
Demand charges Rs.200/kVA of billing demand/month
Energy charges
For the first one lakh units 740 paise per unit
For the balance units 780 paise per unit
Note: Applicable to HT-2 (a) , HT-2 (b) & HT-2(c) Tariff Schedule.
1. Energy supplied may be utilized for all purposes associated
with the working of the installation such as offices, stores,
canteens, yard lighting, water pumping and
advertisement within the premises.
2. Energy can be used for construction, modification and
expansion purposes within the premises.
3. In respect of industries availing HT power supply under HT2
(a) tariff schedule, the supply availed for Effluent Treatment
Plant situated within the premises by fixing the separate
sub-meter, a rebate of 50 paise per unit of electricity
consumed by such Effluent Treatment Plant shall be given
to the applicable tariff schedule. No reduction in the
recorded demand of the main HT supply is allowed.
TOD Tariff applicable to HT-2(a), HT-2(b) and HT-2(c) category.
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Time of Day Increase + / reduction (-) in energy
charges over the normal tariff applicable
06.00 Hrs to 10.00 Hrs + 100 paise per unit
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs + 100 paise per unit
22.00 Hrs to 06.00 Hrs (-)100 paise per unit
TARIFF SCHEDULE HT-3 (a)
Applicable to Lift irrigation Schemes/ Lift irrigation societies,
RATE SCHEDULE
HT-3 (a)(i): Applicable to LI schemes under Govt. Departments/ Govt.
owned Corporations
Energy charges/ Minimum Charges 225 paise per unit subject to an
annual minimum of Rs.1240 per
HP/Annum
HT-3(a)(ii): Applicable to Private LI schemes and Lift Irrigation societies:
Connected to Urban/Express feeders
Fixed Charges Rs.50 /HP/ per month of sanctioned
load
Energy charges 225 paise/unit
HT-3(a)(iii): Applicable to Private LI schemes and Lift Irrigation societies
other than those covered under HT-3 (a)(ii)
Fixed Charges Rs.30 /HP/ per month of sanctioned
load
Energy charges 225 paise/unit
TARIFF SCHEDULE HT-3 (b)
HT-3 (b): Applicable to Irrigation and Agricultural Farms, Government
Horticultural Farms, Private Horticulture nurseries, Coffee, Tea,
Rubber, Coconut &Arecanut Plantations.
RATE SCHEDULE
Energy charges / Minimum Charges 425paise per unit subject to an
annual minimum of Rs.1240/- per HP
of sanctioned load.
Note: These installations are to be billed on quarter yearly basis.
TARIFF SCHEDULE HT-4
Applicable to Residential apartments and colonies (whether situated outside
or inside the premises of the main HT Installation) availing power supply
independently or by tapping the main H.T. line. Power supply can be used for
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residences, theatres, shopping facility, club, hospital, guest house, yard/street
lighting, canteen located within the colony.
RATE SCHEDULE
Applicable to all areas
Demand charges Rs.120/- per KVA of billing demand/
month
Energy charges 620 paise/unit
NOTE: (1) In respect of residential colonies availing power supply by tapping
the main H.T. supply, the energy consumed by such colony loads
metered at a single point, is to be billed at the above energy
rate. No reduction in the recorded demand of the main H.T.
supply is allowed.
(2) Energy under this tariff may be used for commercial and other
purposes inside the colonies for installations such as, Canteens,
Clubs, Shops, Auditorium etc., provided, this commercial load is
less than 10% of the Contract demand. [
(3) In respect of Residential Apartments, availing HT Power supply
under HT-4 tariff schedule, the supply availed for Commercial and
other purposes like Shops, Hotels, etc., will be billed under
appropriate tariff schedule (Only Energy charges), duly deducting
such consumption in the main HT supply bill. No reduction in the
recorded demand of the main HT meter is allowed. Common
areas shall be billed at Tariff applicable to the predominant
Consumer category.
TARIFF SCHEDULE HT-5
Tariff applicable to sanctioned load of 67 HP and above for
hoardings and advertisement boards and construction power for
industries excluding those category of consumers covered under
HT2(b) Tariff schedule availing power supply for construction
power for irrigation, power projects and Konkan Railway Projects
and also applicable to power supply availed on temporary basis
with the contract demand of 67 HP and above of all categories.
HT – 5 – Temporary supply
RATE SCHEDULE
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67 HP and above:
Fixed charges /
Demand Charges
Rs240/HP/month for the entire sanction load /
contract demand
Energy Charges 1000 paise / unit
Note:
1. Temporary power supply with or without extension of distribution main shall
be arranged through a pre–paid energy meter duly observing the
provisions of Clause 12 of the Conditions of Supply of Electricity of the
Distribution Licensees in the State of Karnataka.
2. This Tariff is also applicable to touring cinemas having license for a duration
of less than one year.
3. All the conditions regarding temporary power supply as stipulated in Clause
12 the Conditions of Supply of Electricity of the Distribution Licensees in the
State of Karnataka shall be complied with before service.
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ELECTRICITY TARIFF-2018
PART-II
LOW TENSION SUPPLY
(400 Volts Three Phase and
230Volts Single Phase Supply)
MESCOM
CONDITIONS APPLICABLE TO BILLING OF LT INSTALLATIONS
1. In the case of LT Industrial / Commercial Consumers, Demand based Tariff
at the option of the Consumer, can be adopted. The Consumer is
permitted to have more connected load than the sanctioned load. The
billing demand will be the sanctioned load, or Maximum Demand recorded
in the Tri-Vector Meter during the month, whichever is higher. If the
Maximum Demand recorded is more than the sanctioned load, penal
charges at two times the normal rate shall apply.
2. Use of power within the Consumer premises for bonafide temporary
purpose is permitted subject to the conditions that, total load of the
installation on the system does not exceed the sanctioned load.
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3. Where it is intended to use power supply temporarily, for floor polishing and
such other portable equipment, in a premises having permanent power
supply, such equipment shall be provided with earth leakage circuit
breakers of adequate capacity.
4. The laboratory installations in educational institutions are allowed to install
connected machineries up to 4 times the sanctioned load. The fixed
charges shall however be on the basis of sanctioned load.
5.Besides combined lighting and heating, electricity supply under tariff
schedules LT2 (a) & LT2 (b), can be used for Fans, Televisions, Radios,
Refrigerators and other household appliances, including domestic water
pumps and air conditioners, provided, they are under single meter
connection. If a separate meter is provided for Air-conditioner load, the
Consumer shall be served with a notice to merge this load and to have a
single meter for the entire load. Till such time, the air conditioner load will be
billed under Commercial Tariff.
6. Bulk LT supply:
If power supply for lighting / combined lighting & heating {LT 2(a)}, is availed
through a bulk Meter for group of houses belonging to one Consumer, (i.e,
where bulk LT supply is availed), the billing for energy shall be done at the
slab rate for energy charges matching the consumption obtained by
dividing the bulk consumption by number of houses. In addition, fixed
charges for the entire sanctioned load shall be charged as per Tariff
schedule.
7. A rebate of 25 paise per unit will be given for the House/ School/Hostels
meant for Handicapped, Aged, Destitute and Orphans, Rehabilitation
Centres under Tariff schedule LT 2(a).
8. SOLAR REBATE: A rebate of 50 paise per unit of electricity consumed subject
to a maximum of Rs. 50/- per installation per month will be allowed to Tariff
schedule LT 2(a), if solar water heaters are installed and used. Where Bulk
Solar Water Heater System is installed, Solar Water Heater rebate shall be
allowed to each of the individual installations, provided that, the capacity
of Solar Water Heater in such apartment / group housing shall be a
minimum capacity of 100 Ltr. per household.
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9. A rebate of 20% on fixed charges and energy charges will be allowed in
the monthly bill in respect of public Telephone booths having STD/ISD/ FAX
facility run by handicapped persons, under Tariff schedule LT 3.
10. A rebate of 2 paise per unit will be allowed if capacitors are installed as
per Clause 23 of Conditions of Supply of Electricity of the Distribution
Licensees in the State of Karnataka in respect of all metered IP Set
Installations.
11. Power Factor (PF):
Capacitors of appropriate capacity shall be installed in accordance with
Clause 23 of Conditions of Supply of Electricity of the Distribution Licensees
in the State of Karnataka, in the case of installations covered under Tariff
category LT 3, LT4, LT 5, & LT 6, where motive power is involved.
(i) The specified P.F. is 0.85. If the PF is found to be less than 0.85 Lag, a
surcharge of 2 paise per unit consumed will be levied for every
reduction of P.F. by 0.01 below 0.85 Lag. In respect of LT installations,
however, this is subject to a maximum surcharge of 30 paise per unit.
(ii) The power factor when computed as the ratio of KWh/KVAh will be
determined up to 3 decimals (ignoring figures in the other decimal
places) and then rounded off to the nearest second decimal as
illustrated below:
(a) 0.8449 to be rounded off to 0.84
(b) 0.8451 to be rounded off to 0.85
(iii) In respect of Electronic Tri-Vector meters, the recorded average PF
over the billing period shall be considered for billing purposes.
(iv) During inspection, if the capacity of capacitors provided is found to be
less than what is stipulated in Conditions of Supply of Electricity of the
Distribution Licensees in the State of Karnataka, a surcharge of 30
Paise/unit will be levied in the case of installations covered under Tariff
categories LT 3, LT 5, & LT 6 where motive power is involved.
(v) In the case of installations without electronic Tri-vector meters even
after providing capacitors as recommended in Clause 23.01 and 23.03
of Conditions of Supply of Electricity of the Distribution Licensees in the
State of Karnataka, if during any periodical or other testing / rating of
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the installation by the Licensee, the PF of the installation is found to be
lesser than 0.85, a surcharge determined as above shall be levied from
the billing month following the expiry of Three months’ notice given by
the Licensee, till such time, the additional capacitors are installed and
informed to the Licensee in writing by the Consumer. This is also
applicable for LT installations provided with electronic Tri-vector meters.
12. All new IP set applicants shall fix capacitors of adequate capacity in
accordance with Clause 23 of Conditions of Supply of Electricity of the
Distribution Licensees in the State of Karnataka before taking service.
[13. All the existing IP set Consumers shall also fix capacitors of adequate
capacity in accordance with Clause 23 of Conditions of Supply of
Electricity of the Distribution Licensees in the State of Karnataka, failing
which, PF surcharge at the rate of Rs.60/-per HP/ year shall be levied. If
the capacitors are found to be removed / not installed, a penalty at
the same rate as above (Rs. 60/-per HP / Year) shall be levied.
14. The Semi-permanent cinemas having Semi-permanent structure, with
permanent wiring and licence of not less than one year, will be billed
under commercial tariff schedule i.e., LT 3.
15. Touring cinemas having an outfit comprising cinema apparatus and
accessories, taken from place to place for exhibition of
cinematography films, and also outdoor shooting units, will be billed
under Temporary Tariff schedule i.e., LT 7.
16. The Consumers under IP set tariff schedule, shall use the energy only for
pumping water to irrigate their own land as stated in the IP set application /
water right certificate and for bonafide agriculture use. Otherwise, such
installations shall be billed under appropriate Industrial / Commercial tariff,
based on the recorded consumption if available, or on the consumption
computed as per the Table given under Clause 42.06 of the Conditions of
Supply of Electricity of the Distribution Licensees in the State of Karnataka.
17. The water pumped for agricultural purposes may also be used by the
Consumer for his bonafide drinking purposes and for supplying water to
animals, birds, Poultry farms, Dairy farms and fish farms maintained by
the Consumer in addition to agriculture.
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18. The motor of IP set installations can be used with an alternative drive
for other agricultural operations like sugar cane crusher, coffee
pulping, arecanut cutting etc., with the approval of the Licensee. The
energy used for such operation, shall be metered separately by
providing alternate switch and charged at LT Industrial Tariff (Only
Energy charges) during the period of alternative use. However, if the
energy used both for IP Set and alternative operation is measured
together by one energy meter, the energy used for alternate drive
shall be estimated by deducting the average IP Set consumption for
that month as per the IP sample meter readings for the sub-division, as
certified by the sub-divisional Officer.
19. The IP Consumer is permitted to use energy for lighting the pump house
and well limited to two lighting points of 40 Watts each.
20. Billing shall be made at least once in a quarter year for all IP sets.
21. In the case of welding transformers, the connected load shall be
taken as:
a) Half the maximum capacity in KVA as per the nameplate specified
under IS: 1851
OR
b) Half the maximum capacity in KVA as recorded during the rating by
the Licensee, whichever is higher.
22. Electricity under Tariff LT 3 / LT 5 can also be used for Lighting, Heating
and Air-conditioning, Yard-Lighting, water supply in the respective
premises of Commercial / Industrial Units.
23. Fluorescent fittings shall be provided by the Licensee for the Streetlights
in the case of villages covered under the Licensee’s electrification
programme for initial installation.
In all other cases, the entire cost of fittings including Brackets, Clamps,
etc., and labour for replacement, additions and modifications shall be
met by the organizations making such a request. Labour charges shall
be paid at the standard rates fixed by the Licensee for each type of
fitting.
24. Lamps, fittings and replacements for defective components of fittings
shall be supplied by the concerned Village Panchayaths, Town
Panchayaths or Municipalities for replacement.
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25. Fraction of KW / HP shall be rounded off to the nearest quarter KW / HP
for purpose of billing and the minimum billing being for 1 KW / 1HP in
respect of all categories of LT installations including I.P. sets. In the case
of street lighting installations, fraction of KW shall be rounded off to
nearest quarter KW for the purpose of billing and the minimum billing
shall be quarter KW.
a) The industries which intend to utilize seasonal industry benefit, shall
comply with the conditionalities specified under Para no. 24 of the
General terms and conditions of tariff (applicable to both HT & LT).
b) The industries that intend to avail this benefit, shall have Electronic
Tri-Vector Meter fitted to their installation.
c) Monthly charges during the seasonal months shall be fixed charges
and energy charges. The monthly charges during the off seasonal
months, shall be the energy charges plus 50% of the fixed charges.
TARIFF SCHEDULE LT-1
LT-1: Applicable to installations serviced under Bhagya Jyothi and Kutira
Jyothi (BJ/KJ) schemes.
RATE SCHEDULE
Energy charges
(including recovery towards
service main charges)
Nil*
Fully subsidized by the GOK
Commission Determined Tariff for the above category i.e., LT-1 is Rs.6.51 per unit.
*Since GOK is meeting the full cost of supply to BJ / KJ, the Tariff payable by
these Consumers is shown as Nil. However, if the GOK does not release the
subsidy in advance, a Tariff of Rs.6.51 per unit subject to monthly minimum of Rs.
30/- per Installation per month shall be demanded and collected from these
Consumers.
Note: If the consumption exceeds 40 units per month or any BJ/KJ installation
is found to have more than one out let, it shall be billed as per Tariff
Schedule LT 2(a).
TARIFF SCHEDULE LT-2(a)
Applicable to lighting/combined lighting, heating and motive Power
installations of residential houses and also to such houses where a portion is
used by the occupant for (a) Handloom weaving (b) Silk rearing and reeling
26. Seasonal Industries.
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and artisans using motors up to 200 watts (c) Consultancy in, (i) Engineering,
(ii) Architecture, (iii) Medicine, (iv) Astrology, (v) Legal matters, (vi) Income
Tax, (vii) Chartered Accountants, (d) Job typing, (e) Tailoring, (f) Post Office,
(g) Gold smithy, (h) Chawki rearing, (i) Paying guests/Home stay guests, (j)
personal computers, (k) Dhobis, (l) Hand operated printing press, (m) Beauty
Parlours, (n) Water Supply installations, Lift which is independently serviced for
bonafide use of residential complexes/residence, (o) Farm Houses and yard
lighting limiting to 120 Watts, (p) Fodder Choppers & Milking Machines with a
connected load upto 1 HP.
Also applicable to the installations of (i) Hospitals, Dispensaries, Health Centres
run by State/Central Govt. and local bodies; (ii) Houses, schools and Hostels
meant for handicapped, aged, destitute and orphans; (iii) Rehabilitation
Centres run by charitable institutions, AIDS and drug addicts Rehabilitation
Centres; (iv) Railway staff Quarters with single meter (v) fire service stations.
It is also applicable to the installations of (a) Temples, Mosques, Churches,
Gurudwaras, Ashrams, Mutts and religious/Charitable institutions; (b) Hospitals,
Dispensaries and Health Centres run by Charitable institutions including X-ray
units (c) Jails and Prisons (d) Schools, Colleges, Educational institutions run by
State/Central Govt.,/Local Bodies; (e) Seminaries; (f) Hostels run by the
Government, Educational Institutions, Cultural, Scientific and Charitable
Institutions; (g) Guest Houses/Travelers Bungalows run in Government buildings
or by State/Central Govt./Religious/Charitable institutions (h) Public libraries;
(i) Silk rearing; (j) Museums; (k) Installations of Historical Monuments of
Archeology Departments(l) Public Telephone Booths without STD/ISD/FAX
facility run by handicapped people; (m) Sulabh / Nirmal Souchalayas; (n)
Viswa Sheds having Lighting Loads only.
RATE SCHEDULE
LT 2 (a) (i): Applicable to areas coming under City Municipal Corporations
and all other urban local bodies
Fixed charges per month For the first KW Rs.40/- per KW
For every additional KW Rs.50/- per KW
Energy charges
For 0 - 30 units (Lifeline
consumption)
325 paise/unit
31 to 100 units 470 paise/unit
101 to 200 units 625 paise/unit
Above 200 units 730 paise/unit
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LT-2(a)(ii): Applicable to Areas under Village Panchayats
Fixed charges per month For the first KW Rs.25/- per KW
For every additional KW Rs.40/- per KW
Energy charges
For 0 - 30 units (Lifeline
consumption)
315 paise/unit
31 to 100 units 440paise/unit
101 to 200 units 595 paise/unit
Above 200 units 680paise/unit
TARIFF SCHEDULE LT-2(b)
Applicable to the installations of Private Professional and other Private
Educational Institutions including aided, unaided institutions, Nursing
Homes and Private Hospitals having only lighting or combined lighting
& heating, and motive power. [[[[[
RATE SCHEDULE
LT 2 (b) (i): Applicable to City Municipal Corporations and all other urban
local bodies
Fixed charges Rs.55 Per KW subject to a minimum of Rs.85per
month
Energy charges
0 to 200 units 650 paise/unit
Above 200 units 775 paise/unit
LT-2(b)(ii): Applicable in Areas under Village Panchayats
Fixed charges Rs.45 per KW subject to a minimum of Rs.70per
month
Energy charges
0 to 200 units 595 paise/unit
Above 200 units 720 paise/unit
Note: Applicable to LT-2 (a), LT-2 (b) Tariff Schedules.
1 A rebate of 25 paise. Per unit shall be given for installation of a house/
School/ Hostels meant for Handicapped, Aged, Destitute and Orphans,
Rehabilitation Centres run by Charitable Institutions.
2 (a) Use of power within the consumer’s premises for temporary purposes
for bonafide use is permitted subject to the condition that, the total
load of the installation on the system does not exceed the
sanctioned load.
(b) Where it is intended to use floor polishing and such other portable
equipment temporarily, in the premises having permanent supply,
such equipment shall be provided with an earth leakage circuit
breaker of adequate capacity.
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3 The laboratory installations in educational institutions are allowed to
install connected machinery up to 4 times the sanctioned load. The fixed
charges shall however be on the basis of sanctioned load.
4. Besides lighting and heating, electricity supply under this schedule can be
used for fans, Televisions, Radios, Refrigerators and other house-hold
appliances including domestic water pump and air conditioners,
provided, they are under single meter connection. If a separate meter is
provided for Air conditioner Load, the consumption shall be under
commercial tariff till it is merged with the main meter.
5. SOLAR REBATE: A rebate of 50 paise per unit of electricity consumed to a
maximum of Rs.50/- per installation per month will be allowed to Tariff
schedule LT 2(a), if solar water heaters are installed and used. Where Bulk
Solar Water Heater System is installed, Solar Water Heater rebate shall be
allowed to each of the individual installations, provided that, the
capacity of Solar Water Heater in such apartment / group housing shall
be a minimum capacity of 100 Ltr, per household.
TARIFF SCHEDULE LT-3
Applicable to Commercial Lighting, Heating and Motive Power installations of
Clinics, Diagnostic Centres, X Ray units, Shops, Stores,
Hotels/Restaurants/Boarding and Lodging Homes, Bars, Private guest Houses,
Mess, Clubs, KalyanMantaps / Choultry, permanent Cinemas/ Semi
Permanent Cinemas, Theatres, Petrol Bunks, Petrol, Diesel and oil Storage
Plants, Service Stations/ Garages, Banks, Telephone Exchanges. T.V.Stations,
Microwave Stations, All India Radio, Dish Antenna, Public Telephone Booths/
STD, ISD, FAX Communication Centers, Stud Farms, Race Course, Ice Cream
Parlours, Computer Centres, Photo Studio / colour Laboratory, Photo Copiers,
Railway Installation excepting Railway workshop, KSRTC Bus Stations
excepting Workshop, All offices, Police Stations, Commercial Complexes, Lifts
of Commercial Complexes, Battery Charging units, Tyre Vulcanizing Centres,
Post Offices, Bakery shops, Beauty Parlours, Stadiums other than those
maintained by Govt. and Local Bodies. It is also applicable to water supply
pumps and street lights not covered under LT 6, Cyber cafés, Internet surfing
cafés, Call centres, BPO/KPO, telecom I.T. based medical transcription
centres, Private Hostels not covered under LT -2 (a), Paying guests
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accommodation provided in an independent / exclusive premises, concrete
mixtures (Ready mix Concrete) units .
RATE SCHEDULE
LT-3 (i): Applicable to City Municipal Corporations and all other urban local
bodies.
Fixed charges Rs.60 per KW per month
Energy charges
For 0 - 50 units 750 paise/unit
Above 50 units 850 paise/unit
Demand based tariff (optional) where sanctioned load
is above 5 KW but below 50 KW
Fixed charges Rs.75 per KW
Energy charges As above
RATE SCHEDULE
LT-3 (ii): Applicable in Areas under Village Panchayats
Fixed charges Rs.50 per KW per month
Energy charges For 0 - 50 units 700 paise/unit
Above 50 units 800 paise/unit
Demand based tariff (optional) where sanctioned load
is above 5 KW but below 50 KW
Fixed charges Rs.65 per KW per month
Energy charges As above
Note: 1. Besides Lighting, Heating and Motive power, Electricity supply under
this Tariff can also be used for Yard lighting/ air Conditioning/water
supply in the premises.
2. The semi-permanent Cinemas should have semi-Permanent
Structure with permanent wiring and licence for a duration of not
less than one year.
3. Touring Cinemas having an outfit comprising Cinema apparatus and
accessories taken from place to place for exhibition of
cinematography film and also outdoor shooting units shall be billed
under LT- 7 Tariff.
4. A rebate of 20% on fixed charges and energy charges shall be
allowed in the monthly bill in respect of telephone Booths having
STD / ISD/FAX facility run by handicapped persons.
5. Demand based Tariff at the option of the Consumer can be
adopted as per Para 1 of the conditions applicable to LT
installations.
TARIFF SCHEDULE LT-4 (a), LT-4 (b) & LT-4(c)
Applicable to (a) Agricultural Pump Sets including Sprinklers (b) Pump
sets used in (i) Nurseries of forest and Horticultural Departments; (ii)
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Grass Farms and Gardens; (iii) Plantations other than Coffee, Tea,
Rubber and Private Horticulture Nurseries
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TARIFF SCHEDULE LT-4 (a)
Applicable to I.P. Sets upto and inclusive of 10 HP
RATE SCHEDULE
Fixed charges Free
Energy charges
Commission Determined Tariff (CDT) for LT4 (a) category is 521 paise per
unit. In case the GOK does not release the subsidy in advance in the
manner specified by the Commission in K.E.R.C. (Manner of Payment of
subsidy) Regulations, 2008, CDT of 521 paise per unit shall be demanded
and collected from these Consumers.
Note: This Tariff is applicable for Coconut and Areca nut plantations
also.
TARIFF SCHEDULE LT-4 (b):
Applicable to IP sets above 10 HP
RATE SCHEDULE
Fixed charges Rs.50 per HP per month.
Energy charges 300 paise per unit
TARIFF SCHEDULE LT-4 (c) (i):
Applicable to Private Horticultural Nurseries, Coffee, Tea and Rubber
plantations of sanctioned load upto and inclusive of 10 HP.
RATE SCHEDULE
Fixed charges Rs.40 per HP per month.
Energy charges 300 paise per unit
TARIFF SCHEDULE LT-4 (c)(ii):
Applicable to Private Horticultural Nurseries, Coffee , Tea and Rubber
plantations of sanctioned load above 10 HP.
RATE SCHEDULE
Fixed charges Rs.50 per HP per month.
Energy charges 300 paise per unit
Note: 1) The energy supplied under this tariff shall be used by the consumers only for
pumping water to irrigate their own land as stated in the I.P. Set application /
water right certificate and for bonafide agriculture use. Otherwise, such
installations shall be billed under the appropriate Tariff (LT-3/ LT-5) based on the
recorded consumption if available, or on the consumption computed as per the
Table given under Clause 42.06 of the Conditions of Supply of Electricity of the
Distribution Licensees in the State of Karnataka.
2) The motor of IP set installations can be used with an alternative drive for other
agricultural operations like sugar cane crusher, coffee pulping, arecanut
cutting etc., with the approval of the Licensee. The energy used for such
operation shall be metered separately by providing alternate switch and charged
at LT Industrial Tariff (Only Energy charges) during the period of alternative use.
If the energy used both for IP Set and alternative operation, is however measured
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together by one energy meter, the energy used for alternate drive shall be
estimated by deducting the average IP Set consumption for that month as per the
IP sample meter readings for the sub-division as certified by the sub-divisional
Officer.
3) The Consumer is permitted to use the energy for lighting the pump house and
well limited to 2 lighting points of 40 W each.
4) The water pumped for agricultural purposes may also be used by the Consumer
for his bonafide drinking purposes and for supplying water to animals, birds,
Poultry farms, Dairy farms and fish farms maintained by the Consumer in addition
to agriculture.
5) Billing shall be made at least once in a quarter year for all IP sets. 6) A rebate of 2 paise per unit will be allowed if capacitors are installed as per
Clause 23 of Conditions of Supply of Electricity of the Distribution Licensees in
the State of Karnataka in respect of all metered IP Set Installations.
7) Only fixed charges as in Tariff Schedule for Metered IP Set Installations shall be
collected during the disconnection period of IP Sets under LT 4(a), LT 4(b) and
LT 4(c) categories irrespective of whether the IP Sets are provided with Meters or
not.
TARIFF SCHEDULE LT-5
Applicable to Heating & Motive power (including lighting) installations of
industrial Units, Workshops, Poultry Farms, Sugarcane Crushers, Coffee Pulping,
Cardamom drying, Mushroom raising installations, Flour, Huller & Rice Mills,
Wet Grinders, Milk dairies, Ironing, Dry Cleaners and Laundries having
washing, Drying, Ironing etc., Exclusive Tailoring shop, Bulk Ice Cream and Ice
manufacturing Units, Coffee Roasting and Grinding Works, Cold Storage
Plants, Bakery Product Mfg. Units, KSRTC workshops/Depots, Railway
workshops, Drug manufacturing units and Testing laboratories, Printing Presses,
Garment manufacturing units, Bulk Milk vending Booths, Swimming Pools of
local Bodies, Tyre retreading units, Stone crushers, Stone cutting, Chilly
Grinders, Phova Mills, pulverizing Mills, Decorticators, Iron & Red-Oxide
crushing units, crematoriums, hatcheries, Tissue culture, Saw Mills, Toy/wood
industries, Viswa Sheds with mixed load sanctioned under Viswa Scheme,
Cinematic activities such as Processing, Printing, Developing, Recording
theatres, Dubbing Theatres and film studios, Agarbathi manufacturing unit.,
Water supply installations of KIADB & industrial units, Gem & Diamond cutting
Units, Floriculture, Green House, Biotech Labs., Hybrid seed processing units.
Information Technology industries engaged in development of hardware &
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Software, Information Technology (IT) enabled Services / Start-ups(As defined
in GOI notification dated 17.04.2015)/ Animation / Gaming / Computer
Graphics as certified by the IT & BT Department of GOK/GOI, Silk filature units,
Aqua Culture, Prawn Culture, Brick manufacturing units, Silk / Cotton colour
dying, Stadiums maintained by Govt. and local bodies, Fire service stations,
Gold / Silver ornament manufacturing units, Effluent treatment plants,
Drainage water treatment plants, LPG bottling plants and petroleum pipeline
projects, Piggery farms, Analytical Lab. for analysis of ore metals, Satellite
communication centres, Mineral water processing plants / drinking water
bottling plants and soda fountain units.
Tariff for LT 5 :
Tariff for LT 5 (a):
Applicable to areas under Municipal Corporations
i) Fixed charges
Details Approved by the Commission
Fixed
Charges per
Month
i) Rs.40 per HP for 5 HP & below
ii) Rs.45 per HP for above 5 HP & below 40 HP
iii) Rs.60 per HP for 40 HP & above but below 67 HP
iv) Rs.120 per HP for 67 HP & above
Demand based Tariff (optional)
Fixed
Charges per
Month
Above 5 HP and less than 40
HP
Rs.60 per KW of billing
demand
40 HP and above but less
than 67 HP
Rs.85 per KW of billing
demand
67 HP and above Rs.170 per KW of billing
demand
ii) Energy Charges
Details Approved by the Commission
For the first 500 units 510 paise/unit
For the next 500 units 605 paise/ unit
For the balance units 635 paise/unit
Tariff for LT 5 (b):
Applicable to all areas other than those covered under LT-5(a)
i. Fixed charges
Fixed Charges i) Rs.35 per HP for 5 HP & below
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per Month ii) Rs.40 per HP for above 5 HP & below 40 HP
iii) Rs.55 per HP for 40 HP & above but below 67 HP
iv)Rs.110 per HP for 67 HP & above
ii. Demand based Tariff (optional)
Fixed
Charges
per Month
Above 5 HP and less than 40 HP Rs.55 per KW of billing demand
40 HP and above but less than
67 HP
Rs.80 per KW of billing demand
67 HP and above Rs.160 per KW of billing demand
iii. Energy Charges
0 to 500 units 500 paise/unit
501 to 1000 units 590 paise/unit
Above 1000 units 620 paise/unit
TOD Tariff applicable to LT-5:At the option of the Consumer
Time of Day Increase + / reduction (-) in energy
charges over the normal tariff applicable
06.00 Hrs to 10.00 Hrs + 100 paise per unit
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs + 100 paise per unit
22.00 Hrs to 06.00 Hrs (-)100 paise per unit
NOTE:
1. DEMAND BASED TARIFF
In the case of LT Industrial Consumers, Demand based Tariff at the option of
the Consumer can be adopted. The Consumer is permitted to have more
connected load than the sanctioned load. The billing demand will be the
sanctioned load or Maximum Demand recorded in the Tri-Vector Meter
during the month whichever is higher. If the Maximum Demand recorded is
more than the sanctioned load, penal charges at two times the normal rate
shall apply.
2. Seasonal Industries: The industries which intend to utilize seasonal industry
benefit shall comply with the conditionalities under para no. 24 of general
terms and conditions applicable to LT.
3. Electricity can also be used for lighting, heating, and air-conditioning in the
premises.
4. In the case of welding transformers, the connected load shall be taken as,
(a) Half the maximum capacity in KVA as per the name plate specified
under-IS1851, or (b) Half the maximum capacity in KVA as recorded
during rating by the Licensee, whichever is higher.
TARIFF SCHEDULE LT-6
Applicable to water supply and sewerage pumping installations and also
applicable to water purifying plants maintained by Government and Urban
Local Bodies/ Grama Panchayats for supplying pure drinking water to
residential areas, Public Street lights/Park lights of village Panchayat, Town
Panchayat, Town Municipalities, City Municipalities / Corporations / State and
Central Govt. / APMC, Traffic signals, Surveillance Cameras at traffic locations
cclvii
belonging to Government Department, subways, water fountains of local
bodies. Also applicable to Streetlights of residential Campus of universities,
other educational institutions, housing colonies approved by local
bodies/development authority, religious institutions, organizations run on
charitable basis, industrial area / estate and notified areas, also Applicable to
water supply installations in residential Layouts, Street lights along with signal
lights and associated load of the gateman hut provided at the Railway level
crossing High Mast street lights, Lifts/ Escalators installed in pedestrian road
crossing maintained by Government and Urban local bodies/ Grama
Panchayats independently serviced.
RATE SCHEDULE
Water Supply- LT-6 (a)
Fixed charges Rs.55/HP/month
Energy charges 425 paise/unit
Public lighting- LT-6 (b)
Fixed charges Rs.70/KW/month
Energy charges 585 paise/unit
Energy Charges for LED/ Induction
Lighting
485 paise/unit
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TARIFF SCHEDULE LT-7
Temporary Supply and Permanent Supply to Advertising Hoardings
TARIFF SCHEDULE LT-7(a)
Applicable to Temporary Power Supply for all purposes.
LT 7(a) Details Approved Tariff
Temporary Power
Supply for all
purposes.
Less than 67 HP:
Energy charges at 1000 paise / unit
subject to a weekly minimum of Rs.190
per KW of the sanctioned load.
TARIFF SCHEDULE LT-7(b)
Applicable to Hoardings & Advertisement boards, Bus Shelters with
Advertising Boards, Private Advertising Posts / Sign boards in the interest of
public such as Police Canopy Direction boards, and other sign boards
sponsored by Private Advertising Agencies / firms on permanent connection
basis.
LT 7(b) Details Approved Tariff
Power supply on
permanent
connection basis
Less than 67 HP:
Fixed Charges at Rs.60 per KW/month
& Energy charges at 1000 paise / unit
Note:
1. Temporary power supply with or without extension of distribution main
shall be arranged through a pre–paid energy meter duly observing the
provisions of Clause 12 of the Conditions of Supply of Electricity of the
Distribution Licensees in the State of Karnataka.
2. This Tariff is also applicable to touring cinemas having licence for
duration less than one year.
3. All the conditions regarding temporary power supply as stipulated in
Clause 12 of the Conditions of Supply of Electricity of the Distribution
Licensees in the State of Karnataka shall be complied with before
service.
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