Order
On
True up for FY 2016-17,
Annual Performance Review
for FY 2017-18
&
Annual Fixed Charges
for FY 2018-19
For
UJVN Ltd.
March 21, 2018
UTTARAKHAND ELECTRICITY REGULATORY COMMISSION
Vidyut Niyamak Bhawan,
Near I.S.B.T., P.O. Majra, Dehradun–248171
(i)
Table of Contents
1 Background and Procedural History .............................................................................................. 4
2 Summary of Stakeholders’ Objections/Suggestions, Petitioner’s Responses and
Commission’s Views ......................................................................................................................... 8
2.1 Tariff Hike ................................................................................................................................................ 8
2.1.1 Stakeholder’s Comment ............................................................................................................ 8
2.1.2 Petitioner’s Reply ....................................................................................................................... 8
2.1.3 Commission’s View ................................................................................................................... 9
2.2 Capital Cost and RoE of MB-II Project................................................................................................ 9
2.2.1 Stakeholder’s Comment ............................................................................................................ 9
2.2.2 Petitioner’s Reply ....................................................................................................................... 9
2.2.3 Commission’s Views ............................................................................................................... 10
2.3 Design Energy/Actual Energy Generated ......................................................................................... 10
2.3.1 Stakeholder’s Comment .......................................................................................................... 10
2.3.2 Petitioner’s Reply ..................................................................................................................... 10
2.3.3 Commission’s Views ............................................................................................................... 11
2.4 Other Cost ............................................................................................................................................... 11
2.4.1 Stakeholder’s Comments ........................................................................................................ 11
2.4.2 Petitioner’s Reply ..................................................................................................................... 11
2.4.3 Commission’s Views ............................................................................................................... 12
2.5 Issues Raised During Meeting of State Advisory Committee ...................................................... 12
2.5.1 Views of State Advisory Committee ..................................................................................... 12
2.5.2 Petitioner’s Reply ..................................................................................................................... 12
2.5.3 Observations of Secretary, Energy, Government of Uttarakhand during SAC .............. 13
2.5.4 Commission’s View ................................................................................................................. 13
3 Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on
Truing-up of 9 LHPs & MB-II for FY 2016-17 ............................................................................. 14
(ii)
3.1 Impact of Sharing of Gains and Losses on account of Controllable Factors for FY 2016-
17 ............................................................................................................................................................... 15
3.1.1 Physical Parameters ................................................................................................................. 16
3.1.2 Financial Parameters ............................................................................................................... 21
3.1.3 Summary of Net Impact on Account of Truing-up of FY 2016-17 of MB-II
including Carrying Cost .......................................................................................................... 74
4 Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR
for FY 2017-18, Revised AFC & Tariff for FY 2018-19 ................................................................ 75
4.1 Annual Performance Review .............................................................................................................. 75
4.2 Physical Parameters .............................................................................................................................. 76
4.2.1 NAPAF ...................................................................................................................................... 76
4.2.2 Design Energy, Auxiliary Energy Consumption and Saleable Primary Energy ............. 79
4.3 Financial Parameters ............................................................................................................................. 82
4.3.1 Apportionment of Common Expenses ................................................................................. 82
4.3.2 Capital Cost............................................................................................................................... 83
4.3.3 Additional Capitalisation ........................................................................................................ 84
4.3.4 Depreciation .............................................................................................................................. 98
4.3.5 Return on Equity .................................................................................................................... 100
4.3.6 Interest on Loans .................................................................................................................... 103
4.3.7 Operation and Maintenance expenses ................................................................................ 105
4.3.8 Interest on Working Capital ................................................................................................. 115
4.3.9 Non-Tariff Income ................................................................................................................. 117
4.3.10 Annual Fixed Charges, Capacity Charge and Energy Charge Rate (ECR) for FY
2018-19 ..................................................................................................................................... 119
5 Directives ......................................................................................................................................... 123
5.1 Compliance to the Directives Issued in Order dated 05.04.2010................................................. 123
5.1.1 Performance Improvement Measures ................................................................................. 123
5.1.2 Transfer Scheme ..................................................................................................................... 124
(iii)
5.2 Compliance to directives issued in Order dated 10.05.2011 ........................................................ 126
5.2.1 Colony Consumption ............................................................................................................ 126
5.2.2 Income from electricity distribution to Sundry Consumers ............................................ 126
5.3 Compliance to the Directives Issued in MYT Order dated 06.05.2013 ...................................... 128
5.3.1 Design Energy ........................................................................................................................ 128
5.4 Directives specifically issued in Meeting dated 04.09.2013 ......................................................... 129
5.4.1 Status of upcoming projects ................................................................................................. 129
5.4.2 Utilisation of Expenses approved by the Commission ..................................................... 130
5.5 Compliance to the Directives Issued in Tariff Order dated 11.04.2015 ..................................... 130
5.5.1 View of State Advisory Committee ..................................................................................... 130
5.6 Compliance to the Directives Issued in Tariff Order dated 29.03.2017 ..................................... 131
5.6.1 Financial Relief towards restoration of damage caused due to Natural Calamity ....... 131
5.6.2 Details of various offices and projects of UJVN Ltd. ........................................................ 132
5.6.3 RMU works of Khatima LHP ............................................................................................... 132
5.6.4 Impact of VII Pay Commission ............................................................................................ 133
5.6.5 Non Tariff Income .................................................................................................................. 134
5.7 New Directives Issued........................................................................................................................ 135
5.7.1 Expenses claimed under Major Overhauling ..................................................................... 135
5.7.2 Balance Capital Works of MB-II HEP .................................................................................. 135
5.7.3 Observation on abnormal increase in Additional Capital Expenditure in certain
LHPs ........................................................................................................................................ 136
5.7.4 Views of State Advisory Committee ................................................................................... 136
6 Annexure .......................................................................................................................................... 138
6.1 Annexure 1: Public Notice ................................................................................................................. 138
6.2 Annexure 2: List of Respondents ...................................................................................................... 139
6.3 Annexure 3: List of Participants in Public Hearings ..................................................................... 139
6.4 Annexure 4: Breakup of works carried out under RMU in Khatima LHP as claimed by
the Petitioner for FY 2016-17 .............................................................................................................. 144
(iv)
6.5 Annexure 5: List of Items shifted from Add Cap to R&M and R&M to Add Cap for FY
2016-17 ................................................................................................................................................... 148
6.6 Annexure 6: Expenses covered under Balance Capital Petition for MB-II as claimed by
the Petitioner ........................................................................................................................................ 150
6.7 Annexure 7: Details of the Revised Additional Capitalisation claimed by the Petitioner
for MB-II for FY 2017-18 and FY 2018-19 ......................................................................................... 153
(i)
List of Tables
Table 1.1: Publication of Notice ......................................................................................................................... 5
Table 1.2: Schedule of Hearing........................................................................................................................... 5
Table 3.1: NAPAF approved vide MYT order dated 05.04.2016 for FY 2016-17 ....................................... 17
Table 3.2: Design Energy and Saleable Primary Energy Approved for FY 2016-17 ................................. 21
Table 3.3: Approved Capital Cost as on 14.01.2000 ...................................................................................... 23
Table 3.4: Approved Capital Cost for MB-II as on CoD ............................................................................... 24
Table 3.5: Financing for MB-II as on CoD ....................................................................................................... 24
Table 3.6: Additional Capitalisation already approved by the Commission from FY 2001-02 to FY
2015-16 for 9 LHPs .................................................................................................................................... 25
Table 3.7: Opening GFA for 9 LHPs as considered by the Commission for FY 2016-17 .......................... 25
Table 3.8: Additional Capitalisation for 9 LHPs claimed by the Petitioner for FY 2016-17 ..................... 26
Table 3.9: Total RMU expenses incurred on Khatima as claimed by the Petitioner ................................. 27
Table 3.10:Details of additional capital expenditure under RMU works in Khatima LHP for FY 2016-17
approved by the Commission ................................................................................................................. 30
Table 3.11:Additional Capitalisation approved for Khatima LHP for FY 2016-17 ................................... 31
Table 3.12: Expenses of Capital Nature wrongly booked under R&M Expenses for three of the 9 LHPs
during FY 2016-17 ..................................................................................................................................... 32
Table 3.13: Expenses of R&M Nature but included under Additional Capitalization for 9 LHPs during
FY 2016-17 .................................................................................................................................................. 33
Table 3.14: Quarterly Progress of Investment Approval accorded to UJVN Ltd. as on 31.12.2017 ........ 34
Table 3.15: Additional Capitalisation for 9 LHPs for FY 2016-17 approved by the Commission
including de-capitalization ...................................................................................................................... 35
Table 3.16: Year-wise Additional Capitalisation already approved by the Commission from FY 2007-
08 to FY 2015-16 for MB-II LHP .............................................................................................................. 35
Table 3.17: Opening GFA for MB-II as considered by the Commission for FY 2016-17 .......................... 36
Table 3.18: Additional Capitalisation claimed by the Petitioner for FY 2016-17 ....................................... 36
Table 3.19: Item-wise details of Additional Capitalisation approved by the Commission for MB-II FY
2016-17 ........................................................................................................................................................ 40
Table 3.20: Asset-wise Additional Capitalization approved by the Commission for FY 2016-17 .......... 41
Table 3.21: Procurements done on single quotation basis ............................................................................ 41
Table 3.22: Procurements done on proprietary basis .................................................................................... 42
Table 3.23: Works where procurement done on exorbitantly higher rates than the prevailing market
rates/Schedule of Rates (SoR) of the Power Sector Utilities in the State .......................................... 43
Table 3.24: Works with large variation in prices within HEPs of UJVN Ltd. ............................................ 44
(ii)
Table 3.25: Depreciation approved for 9 LHPs after truing-up of FY 2016-17 .......................................... 47
Table 3.26: Revised Depreciation for MB-II for FY 2016-17 ......................................................................... 48
Table 3.27: Income Tax as claimed by the Petitioner for 9 LHPs ................................................................. 49
Table 3.28: Equity and Return on Equity for Nine Old LHPs for FY 2016-17 ........................................... 50
Table 3.29: RoE approved for MB-II for FY 2016-17 ...................................................................................... 52
Table 3.30:Interest on Loan for Nine Old LHPs for FY 2016-17 .................................................................. 54
Table 3.31: Interest on Loan as approved for MB-II for FY 2016-17 ............................................................ 55
Table 3.32: Escalation Rates as considered by the Commission .................................................................. 56
Table 3.33: Growth Factor ‘Gn’ as considered by the Commission for FY 2016-17 .................................. 56
Table 3.34: Employee Expenses approved for FY 2016-17 ........................................................................... 57
Table 3.35: K-Factor as considered by the Commission ............................................................................... 58
Table 3.36: R&M Expenses approved for FY 2016-17 ................................................................................... 59
Table 3.37: A&G Expenses approved for FY 2016-17 .................................................................................... 60
Table 3.38: Normative O&M Expenses as approved for 9 LHPs for FY 2016-17 ...................................... 60
Table 3.39: Amount allowed by the Commission in this Tariff Order towards Provision amount
disallowed in Tariff Order dated 29.03.2017 ......................................................................................... 62
Table 3.40: O&M Expenses approved for FY 2016-17 ................................................................................... 63
Table 3.41: Normative O&M Expenses as approved for MB-II Station for FY 2016-17 ............................ 64
Table 3.42: O&M Expenses approved after sharing of gains and losses for FY 2016-17 .......................... 65
Table 3.43: Interest on Working Capital for Nine LHPs for FY 2016-17 ..................................................... 67
Table 3.44 Interest on Working Capital for Nine LHPs for FY 2016-17 after sharing of Gains ............... 67
Table 3.45 Interest on Working Capital as approved for FY 2016-17 ......................................................... 68
Table 3.46: Interest on Working Capital for MB-II for FY 2016-17 after sharing of gains ........................ 68
Table 3.47: Summary of AFC for FY 2016-17 ................................................................................................. 68
Table 3.48: Non-Tariff Income for 9 LHPs for FY 2016-17 ............................................................................ 71
Table 3.49: Summary of net AFC as Trued up by the Commission for 9 LHPs for FY 2016-17 to be
recovered from UPCL............................................................................................................................... 71
Table 3.50: Summary of net truing-up for FY 2016-17 for UPCL ................................................................ 72
Table 3.51: Summary of net AFC as Trued up by the Commission for 9 LHPs to be refunded to UPCL
..................................................................................................................................................................... 72
Table 3.52: Summary of net AFC as Trued-up for FY 2016-17 by the Commission for 9 LHPs to be
recovered from HPSEB ............................................................................................................................. 73
Table 3.53: Summary of net AFC as Trued up by the Commission to be refunded to HPSEB .............. 73
Table 3.54: Summary of truing-up of Net AFC of MB-II for FY 2016-17 .................................................... 74
Table 3.55: Net impact on account of truing-up of FY 2016-17 .................................................................... 74
(iii)
Table 3.56: Summary of net amount Trued up by the Commission for FY 2016-17 to be refunded to
UPCL........................................................................................................................................................... 74
Table 4.1: NAPAF as approved by the Commission for FY 2018-19 .......................................................... 79
Table 4.2: Possible Generation during June to October of 2018 for Khatima LHP as claimed by the
Petitioner .................................................................................................................................................... 80
Table 4.3: Design Energy and Saleable Primary Energy approved for FY 2018-19 .................................. 82
Table 4.4: Approved Original Cost inherited from UPJVNL ....................................................................... 83
Table 4.5: Approved Capital Cost and Financing for MB-II as on CoD ..................................................... 84
Table 4.6: GFA considered by the Commission for 9 LHPs upto 31.03.2017 ............................................. 84
Table 4.7: Additional Capitalisation projected by the Petitioner for FY 2017-18 and FY 2018-19 .......... 85
Table 4.8: Expenditure for RMU projected by the Petitioner for FY 2017-18 and FY 2018-19 for 9 LHPs
..................................................................................................................................................................... 86
Table 4.9: Additional Capitalization claimed under RMU works for Khatima LHP for FY 2017-18 and
FY 2018-19 .................................................................................................................................................. 88
Table 4.10: Additional Capitalization claimed under DRIP Scheme for FY 2017-18 and FY 2018-19 .... 91
Table 4.11: Additional Capitalization claimed for New Multi-Storied Residential and Office Buildings
in Dehradun for FY 2017-18 and FY 2018-19 ......................................................................................... 92
Table 4.12: Details of Office & Residential Building as claimed by the Petitioner .................................... 93
Table 4.13: Additional Capitalization claimed for works other than RMU, DRIP and Office &
Residential Building for FY 2017-18 and FY 2018-19............................................................................ 94
Table 4.14: Additional Capitalization as approved for 9 LHPs for FY 2017-18 and FY 2018-19 ............. 95
Table 4.15: Opening GFA for MB-II as considered by the Commission for FY 2017-18 .......................... 96
Table 4.16: Revised Additional Capitalisation claimed by the Petitioner for MB-II for FY 2017-18 and
FY 2018-19 .................................................................................................................................................. 97
Table 4.17: Depreciation Charges as approved by the Commission for 9 LHPs for FY 2018-19 ............. 99
Table 4.18: Depreciation charges as approved by the Commission for MB-II for FY 2018-19 of second
Control Period ......................................................................................................................................... 100
Table 4.19: Return on Equity for Nine Old LHPs for FY 2018-19 .............................................................. 102
Table 4.20: Return on Equity for MB-II for FY 2018-19 of second Control Period .................................. 103
Table 4.21: Interest on Loan for Nine Old LHPs for FY 2018-19 ............................................................... 104
Table 4.22: Interest on Loan for MB-II for FY 2018-19 of second Control Period .................................... 105
Table 4.23: Escalation Rate as considered by the Commission .................................................................. 108
Table 4.24: Employee expenses for 9 LHPs for FY 2018-19 ........................................................................ 110
Table 4.25: R&M Expenses for 9 LHPs for FY 2018-19 ................................................................................ 112
Table 4.26: Expenses on ERP system as claimed by the Petitioner for 9 LHPs for FY 2018-19 ............ 113
Table 4.27: A&G Expenses for 9 LHPs for FY 2018-19 ................................................................................ 114
(iv)
Table 4.28: O&M Expenses for 9 LHPs for FY 2018-19 ............................................................................... 114
Table 4.29: O&M expenses approved by the Commission for MB-II for FY 2018-19 ............................. 115
Table 4.30: Interest on Working Capital approved by the Commission for 9 LHPs for FY 2018-19 .... 116
Table 4.31: Interest on Working Capital approved by the Commission for MB-II for FY 2018-19 ....... 117
Table 4.32: Non-Tariff Income for 9 LHPs for FY 2018-19 .......................................................................... 118
Table 4.33: Non-Tariff Income for MB-II for FY 2018-19 of second Control Period ............................... 119
Table 4.34: Approved AFC of 9 LHPs of UJVN Ltd. for FY 2018-19......................................................... 121
Table 4.35: Approved Capacity Charge and Energy Charge Rate for 9 LHPs for FY 2018-19 .............. 121
Table 4.36: Approved AFC, Capacity Charge and Energy Charge Rate for MB-II for FY 2018-19....... 122
Before
UTTARAKHAND ELECTRICITY REGULATORY COMMISSION
Petition No.: 52 to 61 of 2017
In the Matter of:
Petitions filed by UJVN Limited for True up for FY 2016-17, Annual Performance Review for FY
2017-18 and Aggregate Revenue Requirement FY 2018-19 for 10 LHPs.
In the Matter of:
UJVN Ltd.
UJJWAL, Maharani Bagh, GMS Road, Dehradun. ...............Petitioner
Coram
Shri Subhash Kumar Chairman
Date of Order: March 21, 2018
Section 64(1) read with Section 61 and 62 of the Electricity Act, 2003 (hereinafter referred to
as “the Act”) requires the Generating Companies and the Licensees to file an application for
determination of tariff before the Appropriate Commission in such manner and along with such fee
as may be specified by the Appropriate Commission through Regulations.
In accordance with relevant provisions of the Act, the Commission had notified Uttarakhand
Electricity Regulatory Commission (Terms and Conditions for Determination of Multi Year Tariff)
Regulations, 2015 (hereinafter referred to as “UERC Tariff Regulations, 2015”) for the Second
Control Period from FY 2016-17 to FY 2018-19 specifying therein terms, conditions and norms of
operation for licensees, generating companies and SLDC. The Commission had issued the Order on
approval of Business Plan and Multi Year Tariff dated April 5, 2016 for the Control Period from FY
2016-17 to FY 2018-19. In accordance with the provisions of the UERC Tariff Regulations, 2015, the
2 Uttarakhand Electricity Regulatory Commission
Commission had carried out the Annual Performance Review for FY 2016-17 vide its Order dated
March 29, 2017.
As per the provisions of Regulation 12 of the UERC Tariff Regulations, 2015, UJVN Ltd.
(hereinafter referred to as “UJVN Ltd.” or “the Petitioner”) filed the Petitions (Petitions No. 52 to 61
of 2017 and hereinafter referred to as the “Petitions”), giving details of its revised projections of
Annual Fixed Charges (AFC) for FY 2018-19, based on the true-up for FY 2016-17 and Annual
Performance Review for FY 2017-18 on 30.11.2017.
The Petitions filed by UJVN Ltd. had certain infirmities/deficiencies which were informed
to UJVN Ltd. vide Commission’s letter no. UERC/6/TF/432/2017-18/1425 dated 07.12.2017 and
UJVN Ltd. was directed to rectify the said infirmities in the Petitions necessary for admission of the
Petitions and also submit certain additional information/data for further analysis of the Petitions.
UJVN Ltd. vide its letter no. 517/UJVNL/04/D(F)/UERC dated 14.12.2017 has removed the critical
deficiencies necessary for admission of the Petitions. Based on the submission dated 14.12.2017
made by UJVN Ltd., the Commission vide its Order dated 21.12.2017 provisionally admitted the
Petitions for further processing subject to the condition that UJVN Ltd. shall furnish any further
information/clarifications as deemed necessary by the Commission during the processing of the
Petitions within the time frame, as may be stipulated by the Commission, failing which the
Commission may proceed to dispose of the matter as it deems fit based on the information available
with it.
This Order, accordingly, relates to Petitions filed by UJVN Ltd. for true-up for FY 2016-17,
APR for FY 2017-18 and revised AFC for FY 2018-19 and is based on the original as well as all the
subsequent submissions made by UJVN Ltd. during the course of the proceedings and the relevant
findings contained in the MYT Order dated 05.04.2016 and Tariff Order dated 29.03.2017.
Tariff determination being one of the most vital function of the Commission, it has been the
practice of the Commission to elaborate in detail the procedure and to explain the underlying
principles in determination of tariffs. Accordingly, in the present Order also, in line with past
practices, the Commission has tried to elaborate the procedure and principles followed by it in
determining the ARR of the licensee. The Annual Fixed Charges of UJVN Ltd. are recoverable from
the beneficiaries. It has been the endeavour of the Commission in past also, to issue Tariff Orders
for UJVN Ltd. concurrently with the issue of Order on retail tariffs for UPCL, so that UPCL is able
Uttarakhand Electricity Regulatory Commission 3
to honour the payment liability towards generation charges of UJVN Ltd. For the sake of
convenience and clarity, this Order has further been divided into following Chapters:
Chapter 1 - Background and Procedural History
Chapter 2 - Stakeholders’ Objections/suggestions, Petitioner’s Responses & Commission’s
Views
Chapter 3 - Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on
Truing-up for FY 2016-17
Chapter 4 - Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on
APR for FY 2017-18 and Revised AFC & Tariff for FY 2018-19
Chapter 5 - Commission’s Directives
4 Uttarakhand Electricity Regulatory Commission
1 Background and Procedural History
UJVN Ltd. is a company wholly owned by the State Government and is engaged in the
business of generation of power in the State including 10 Large Hydro Power Stations to which this
Order relates. These generating stations are Dhakrani, Dhalipur, Chibro, Khodri, Kulhal,
Ramganga, Chilla, Maneri Bhali-I, Maneri Bhali-II and Khatima. Electricity generated by these
generating stations is supplied to Uttarakhand Power Corporation Ltd (UPCL), the sole distribution
licensee in the State) and Himachal Pradesh State Electricity Board (HPSEB), which, as per an old
arrangement/scheme, has share in five of these generating stations viz. Dhakrani (25%), Dhalipur
(25%), Chibro (25%), Khodri (25%) and Kulhal (20%).
The Commission vide its Order dated 05.04.2016 approved the Business Plan and Multi Year
Tariff for UJVN Ltd. for the second Control Period FY 2016-17 to FY 2018-19. The Commission, in
the approval of Business Plan, approved the Capital Expenditure Plan, Capitalisation Plan, Human
Resource Plan and Trajectory of the performance parameters and, in the approval of MYT,
approved the Aggregate Revenue Requirement for each year of the Control Period from FY 2016-17
to FY 2018-19. Further, the Commission had issued the Tariff Order for FY 2017-18 vide its Order
dated 29.03.2017. In accordance with Regulation 12 of the UERC Tariff Regulations, 2015, the
Generating Company is required to file a Petition for Annual Performance Review by November 30
of every year.
In compliance with the Regulations, UJVN Ltd. filed its Petitions for true-up for FY 2016-17,
APR for FY 2017-18 and AFC for FY 2018-19 based on the audited accounts for FY 2016-17 on
30.11.2017. The above Petitions were provisionally admitted by the Commission vide its Order
dated 21.12.2017. The Commission, through its above Admittance Order dated 21.12.2017, to
provide transparency to the process of tariff determination and give all Stakeholders an opportunity
to submit their objections/suggestions/comments on the proposals of UJVN Ltd., also directed
UJVN Ltd. to publish the salient points of its proposals in the leading newspapers. The salient
points of the proposal were published by the Petitioner in the following newspapers:
1. Background and Procedural History
Uttarakhand Electricity Regulatory Commission 5
Table 1.1: Publication of Notice
S. No. Newspaper Name Date Of Publication
1 Amar Ujala 27.12.2017
2 Dainik Jagran 27.12.2017
3 Times of India 28.12.2017
4 Hindustan Times 28.12.2017
Through above notice, Stakeholders were requested to submit their
objections/suggestions/comments latest by 31.01.2018 (copy of the notice is enclosed as Annexure
1). The Commission received in all 06 comments/suggestions/objections in writing on the Petition
filed by UJVN Ltd. The list of Stakeholders who have submitted their
objections/suggestions/comments in writing is enclosed as Annexure 2.
Further, for direct interaction with all the Stakeholders and public at large, the Commission
also held public hearings on the proposals filed by the Petitioner at the following places in the State
of Uttarakhand.
Table 1.2: Schedule of Hearing
S. No. Place Date
1 Bageshwar 20.02.2018
2 Rudrapur 21.02.2018
3 Rudraprayag 27.02.2018
4 Dehradun 28.02.2018
The list of participants who attended the Public Hearing is enclosed at Annexure 3.
The Commission also sent the copies of the salient features of tariff proposals to Members of
the State Advisory Committee and the State Government. The salient features of the tariff proposals
submitted by UJVN Ltd. were also made available on the website of the Commission, i.e.
www.uerc.gov.in. The Commission also held a meeting with the Members of the Advisory
Committee on 05.03.2018 wherein, detailed deliberations were held with the Members of the
Advisory Committee on the various issues linked with the Petitions filed by UJVN Ltd.
The objections/suggestions/comments, as received from the Stakeholders through
mail/post as well as during the course of public hearing were sent to the Petitioner for its response.
All the issues raised by the Stakeholders, Petitioner’s response and Commission’s views thereon are
detailed in Chapter 2 of this Order. In this context, it is also to underline that while finalizing this
Order, the Commission has, as far as possible, tried to address all the issues raised by the
Stakeholders.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
6 Uttarakhand Electricity Regulatory Commission
Meanwhile, based on the scrutiny of the Petitions submitted by UJVN Ltd., the Commission
vide its letter no. UERC/6/TF/432/2017-18/1425 dated 07.12.2017 and letter no.
UERC/6/TF/432/Pet. No. 52 to 61 of 2017/1526 dated 29.12.2017 has pointed out certain data gaps
in the Petitions and sought following additional information/clarifications from the Petitioner:
With regards to other capital expenditure:
Detailed breakup of R&M expenses.
Reconciliation of additional capitalization with audited accounts for FY 2016-17.
Details of bills of water tax paid for FY 2016-17 and FY 2017-18.
Quarter wise interest paid, refund received and repayment of actual loan for FY
2016-17
Sub-asset breakup of additional capitalization claimed during FY 2016-17.
Asset wise de-capitalization for each station.
Sub-head wise expenses incurred/proposed to be incurred on works covered under
Balance Capital Expenditure for MB-II generating station.
Monthly detailed calculation of PAFM for 10 LHPs for FY 2016-17.
Details of actual number of employees recruited/retired.
With regard to the RMU works of Khatima LHP:
The actual expenses incurred on cash basis and undischarge liabilities as on COD of
various Units.
Discharge of such liabilities post CoD of the respective units along with documentary
evidence of such payment made.
Detailed computation of IDC and the basis of allocation of such IDC on various units.
Copy of all the contracts awarded towards RMU works.
Computation of all price variation paid to contractors.
Details of Liquidated Damages levied by UJVN Ltd., if any.
1. Background and Procedural History
Uttarakhand Electricity Regulatory Commission 7
Appropriate justification for the funding of the project.
Year-wise de-capitalization of the assets retired.
So as to have better clarity on the data filed by the Petitioner and to remove inconsistency in
the data, a Technical Validation Session (TVS) was also held with the Petitioner’s officers on
04.01.2018, for further deliberations on certain issues related to the Petitions filed by UJVN Ltd.
Minutes of above Technical Validation Session were sent to the Petitioner vide Commission’s letter
no. UERC/6/TF/432/Pet. No. 52 to 61 of 2017/1563 dated 05.01.2018, for its response.
The Petitioner submitted the replies to Minutes of TVS vide letter no. 11/UJVNL/04/D(F)
dated 12.01.2018 and letter no. 12/UJVNL/04/D(F) dated 15.01.2018. Meetings were held between
the Officers of the Commission and field Officers of UJVN Ltd. along with Officers of UJVN Ltd.’s
Commercial wing in the Commission between 17.01.2018 to 23.01.2018 and certain queries were
observed on the submissions made to the Commission, which were communicated to the Petitioner.
In response, the Petitioner vide its letter No. 73/UJVNL/04/D (F)/ dated 02.02.2018 submitted its
reply. Further, the Commission vide its letter no. 1757 dated 08.02.2018 and letter no. 1834 dated
27.02.2018 pointed out certain additional data gaps in the Petitions. The Petitioner vide its letter no.
120/UJVNL/04/D(F) dated 23.02.2018, letter no. 137/UJVNL/04/D(F) dated 08.03.2018 & letter no.
140/UJVNL/04/D(F) dated 13.03.2018 submitted its reply.
The submissions made by UJVN Ltd. in the Petition as well as additional submissions have
been discussed by the Commission at appropriate places in the Order along with the Commission’s
views on the same.
8 Uttarakhand Electricity Regulatory Commission
2 Summary of Stakeholders’ Objections/Suggestions, Petitioner’s
Responses and Commission’s Views
The Commission has received 06 objections/suggestions/comments on UJVN Ltd.’s Petition
for true-up of FY 2016-17, Annual Performance Review for FY 2017-18 and determination of Annual
Fixed Charges for FY 2018-19 of 10 Large Generating Stations. List of Stakeholders who have
submitted their objections/suggestions/comments in writing is given at Annexure 2 and the list of
respondents who have raised the issues in the public hearings is enclosed at Annexure 3. The
Commission has further obtained replies from UJVN Ltd. on the objections/suggestions/comments
received from the Stakeholders. For the sake of clarity, the objections raised by the Stakeholders,
responses of the Petitioner & Commission’s view on the same have been consolidated and
summarised below. In the subsequent Chapters of this Order, the Commission has, kept in view the
objections/suggestions/comments of the Stakeholders while deciding the Annual Fixed Charges
and Tariffs for different generating stations of UJVN Ltd.
2.1 Tariff Hike
2.1.1 Stakeholder’s Comment
Shri Munish Talwar of M/s Asahi Glass India Ltd., Shri Man Singh of M/s ALPS Industries
Ltd. and Shri Pawan Agarwal of M/s Uttarakhand Steel Manufacturers Association requested the
Commission not to increase the tariff at this juncture as any tariff increase would put the industry
into further hardship.
2.1.2 Petitioner’s Reply
The Petitioner submitted that the Petitions for determination of tariff are filed in accordance
to the Regulations notified by the Commission. The tariff of upcoming years is proposed on
normative basis and truing-up for the past year is claimed based on the actual audited expenditure
and as per the provisions specified in the Regulations. The Petitioner also submitted that UJVN Ltd.
continuously makes efforts to ensure strict commercial discipline, strive to protect the public
interest and comply with the directives of Commission.
The Petitioner further submitted that it has proposed additional capitalization in various old
hydro power stations which have become necessary for efficient and safe operation of power
2. Stakeholders’ Responses & Petitioner’s Comments
Uttarakhand Electricity Regulatory Commission 9
stations, thus resulting in increase of proposed tariff. Further, it has requested the Commission for
revision in tariff as proposed by the Petitioner in order to ensure optimum and quality generation
for its hydro power stations.
2.1.3 Commission’s View
The Commission would like to clarify that it has been the practice of the Commission to
explain in detail its approach in every Tariff Order. Normal approach so far has been to follow the
Regulations and detail the reasons for any deviation in exceptional conditions. The Commission
before allowing any tariff increase or increase in expenses under truing-up of previous years carries
out due diligence and prudence check of all the expenses incurred by the Petitioner before
considering it as part of ARR. The Commission ascertains that no unnecessary cost attributable to
inefficiencies of the Petitioner is passed on to the consumers.
2.2 Capital Cost and RoE of MB-II Project
2.2.1 Stakeholder’s Comment
Shri Pankaj Gupta of Industries Association of Uttarakhand submitted that the Commission
has given its analysis on Capital Cost of Maneri Bhali-II Project in its Order issued in previous
years. He further submitted that the Commission in its last order had fixed the Capital Cost of MB-
II as Rs. 1885.50 Crore. However, UJVN Ltd. in the current Petition has considered the Capital Cost
of Rs. 1923.60 Crore and calculated RoE on Equity amount of Rs. 654.92 Crore including investment
of Rs. 341.39 Crore made out of PDF. He further submitted that the Petitioner has filed an Appeal
before the Hon’ble Tribunal of Electricity and therefore, has considered full amount of equity
including the amount invested out of PDF as the decision of Hon’ble Tribunal is still pending.
Therefore, in line with the Tariff Order dated April 04, 2012, he further requested the Commission
to not allow any return on equity utilized for creation of assets funded out of PDF.
2.2.2 Petitioner’s Reply
The Petitioner has submitted that the Tariff Petition of MB-II HEP has been prepared on the
basis of capital expenditure actually incurred. Further, with regard to equity contributed by GoU
out of withdrawal from Power Development Fund, the Petitioner has considered Return on Equity
on full equity amount including the amount invested out of PDF in view of the Appeal filed with
the Hon’ble APTEL in matter of Capital cost and RoE on PDF for MB-II.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
10 Uttarakhand Electricity Regulatory Commission
2.2.3 Commission’s Views
The Commission had not allowed Return on Equity on funds deployed by the GoU out of
PDF fund for reasons recorded in the previous Tariff Orders. Unlike other funds, available with the
Government, collected through taxes and duties, PDF is a dedicated fund created in accordance
with the provisions of the PDF Act passed by the GoU and the amount is collected directly from the
consumers through the electricity bills as the same forms part of the power purchase cost of UPCL
which in turn is loaded on to the consumers. PDF Act and Rules made there under, further, clearly
indicate that money available in this fund has to be utilized for the purposes of development of
generation and transmission assets. Though the UJVN Limited has filed an Appeal on this issue
with Hon’ble APTEL, however, no stay has been granted by Hon’ble APTEL. Therefore, the
Commission has adopted the same approach as adopted in previous Tariff Orders while allowing
Return on Equity for MB-II project.
2.3 Design Energy/Actual Energy Generated
2.3.1 Stakeholder’s Comment
Shri Pankaj Gupta of Industries Association of Uttarakhand submitted that in the previous
Orders, the Commission had taken the average of annual generation of last 15 years as projected
generation for Year 2004-05. The same analogy should not hold good for future years as the same
was acceptable as sufficient data was not available and considering the requests of UJVN Ltd. that
the plants were not kept in good conditions.
He submitted that UJVN Ltd. is claiming that it has moved a long distance in setting right its
generating stations by taking appropriate steps and hence, there is a substantial improvement in
availability. He requested the Commission to revisit the design energy and allow the benefit of
power generation to the consumers which is in line with the Tariff Policy in respect of the operating
norms as the tariff policy stipulates that the operating norms should be at normative levels and not
at lower of normative and actual.
2.3.2 Petitioner’s Reply
The Petitioner submitted that it has not sought any deviation in saleable energy for its old
hydro power plants in the Petitions. The Petitioner also submitted that the Commission may revisit
the Design Energy after Renovation and Modernization of old hydro power plants.
2. Stakeholders’ Responses & Petitioner’s Comments
Uttarakhand Electricity Regulatory Commission 11
2.3.3 Commission’s Views
Due to non-availability of reliable information on the design water discharges and DPRs for
nine old generating stations, the Commission in its previous Orders had considered the lower of 15
years’ average annual generation or the plant-wise Design Energy (as mutually agreed between
UPJVNL and UPPCL) as the projected primary energy generation of these generating stations for
tariff purposes. For Maneri Bhali-II, the Commission had considered the design energy as per DPR
of the Project in the previous Tariff Order. The same approach has been continued in this order also.
However, for Khatima HEP for which RMU works have been completed, the Commission has
considered revised design energy for FY 2018-19 in accordance with DPR for RMU works of the
said project.
2.4 Other Cost
2.4.1 Stakeholder’s Comments
Shri Pankaj Gupta of Industries Association of Uttarakhand submitted that the Petitioner
has proposed very high increase in all heads of expenses for all generating stations, which is not
commensurate with the past and requested the Commission to look closely at all these costs.
Shri Vijay Singh Verma, Secretary, Kisan Club requested the Petitioner to justify about the
benefit arising out of Renovation and Modernization of the hydro power plants of UJVN Ltd. He
further submitted that the free power provided to the employees of the Electricity Department
(UJVN Ltd.) causes commercial losses and is unjustified.
Shri Rajiv Agarwal of Industries Association of Uttarakhand submitted that the Petitioner
has claimed higher rate of interest in its Petition. In this regard, he suggested that the Petitioner as a
Government entity should check for cheaper options available in the market.
2.4.2 Petitioner’s Reply
The Petitioner submitted that it has proposed additional capitalization in various old hydro
power stations which have become necessary for efficient and safe operation of power stations, thus
resulting in increase of proposed AFC. The Petitioner submitted that it has prepared its Tariff
Petition on actual/normative basis in accordance to the Regulations notified by the Commission.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
12 Uttarakhand Electricity Regulatory Commission
2.4.3 Commission’s Views
The Commission, in this regard, would like to clarify that the actual expenses both of
revenue and capital nature submitted by the Petitioner are examined separately, in detail while
carrying out the truing-up of expenses and revenues and only legitimate expenses are allowed in
accordance with the UERC Tariff Regulations applicable from time to time. Further, with regard to
the power being provided to the departmental employees by the Petitioner, the Commission has
already been directing the Petitioner in the previous Tariff Orders that it should ensure the meter
reading of each employee on monthly basis and keep proper record of the same and submit the
consumption alongwith the next tariff filing. Such consumption are not, however, allowed by the
Commission and shall thus, not be a pass through in the tariff.
2.5 Issues Raised During Meeting of State Advisory Committee
2.5.1 Views of State Advisory Committee
During the Advisory Committee meeting held on 05.03.2018, the Members made the
following suggestions on the Tariff Petitions for FY 2018-19.
UJVN Ltd. has again claimed Return on Equity on PDF amount, though this is settled
issue as per Commission’s Orders and is sub-judice at APTEL. As no stay has been
granted by APTEL on Commission’s Orders, RoE on PDF amount should not be
allowed.
UJVN Ltd. has proposed very high increase in all heads of expenses for all generating
stations and the same needs to be examined carefully.
Clarification regarding actual generation lower than design energy in case of MB-II
generating station.
Clarification regarding the pending expenditure on the civil works under RMU of
Khatima LHP.
2.5.2 Petitioner’s Reply
The Petitioner submitted the following replies for queries raised:
a) As regards the issue of actual generation of MB-II station being lower than the Design
Energy, UJVN Ltd. submitted that the works for increasing the Dam height was
2. Stakeholders’ Responses & Petitioner’s Comments
Uttarakhand Electricity Regulatory Commission 13
completed in FY 2016-17. However, if the water level reaches to 1105 or 1106 m, the
Petitioner has to face resistance from local population, due to which the actual
generation is lower than the Design energy.
b) With regard to pending works of Khatima RMU, UJVN Ltd. submitted that the
pending civil works like repair of power channel, tail race etc needs to be completed as
part of overall RMU. However since the water flow is under control of UPID (Uttar
Pradesh Irrigation Department), the civil works related to RMU Khatima are still
pending. UJVN Ltd. is taking up the matter with UPID for completion of these works
at the earliest.
2.5.3 Observations of Secretary, Energy, Government of Uttarakhand during SAC
Advised UJVN Ltd. to hold a meeting with DM regarding resistance from locals if the
water level reaches to 1105 or 1106 m at MB-II and sort out this issue at the earliest.
Advised UJVN Ltd. to move forward and hold meetings with Uttar Pradesh Irrigation
Department (UPID) in Lucknow in order to get pending civil works done related to
Khatima RMU.
2.5.4 Commission’s View
Based on the suggestion made by the Members of State Advisory Committee during the
meeting held on 05.03.2018, the Commission directs UJVN Ltd. to actively pursue the following
issues with Appropriate Government/Competent authorities/Hon’ble Courts and apprise the
Commission from time to time.
(i) Resolve the issue related to MB-II Generation specifically with regard to the Dam
height of 1108 m which has already been allowed by the District Administration.
(ii) Expedite the completion of Civil Works related to Khatima RMU.
(iii) Additional allocation from THDC in the Case pending before Hon’ble Supreme
Court.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
14 Uttarakhand Electricity Regulatory Commission
3 Petitioner’s Submissions, Commission’s Analysis, Scrutiny and
Conclusion on Truing-up of 9 LHPs & MB-II for FY 2016-17
Regulation 12 of the UERC Tariff Regulations, 2015 specifies as follows:
“12. Annual Performance Review
(1) Under the multi-year tariff framework, the performance of the Generating Company or
Transmission and Distribution Licensees or SLDC, shall be subject to an Annual Performance
Review.
(2) The Applicant shall under affidavit and as per the UERC (conduct of Business) Regulations 2014
as amended from time to time, make an application for Annual Performance Review by November
30th of every year;
…
(3) The scope of the Annual Performance Review shall be a comparison of the actual performance of
the Applicant with the approved forecast of Aggregate Revenue Requirement and expected revenue
from tariff and charges and shall comprise of following:
a) A comparison of the audited performance of the applicant for the previous financial year with
the approved forecast for such previous financial year and truing up of expenses and revenue
subject to prudence check including pass through of impact of uncontrollable factors;
b) Categorisation of variations in performance with reference to approved forecast into factors
within the control of the applicant (controllable factors) and those caused by factors beyond the
control of the applicant (un-controllable factors).
c) Revision of estimates for the ensuing financial year, if required, based on audited financial
results for the previous financial year;
d) Computation of the sharing of gains and losses on account of controllable factors for the
previous year”
In its present filings, the Petitioner has submitted the data relating to its expenses and
revenues for FY 2016-17 for nine LHPs and MB-II based on the audited accounts and has,
accordingly, requested the Commission to carry out the truing-up for FY 2016-17 along with the
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 15
sharing of gains and losses. In addition to the above, with regard to MB-II, the Petitioner has also
requested the Commission to consider the capital cost as Rs. 1923.60 Crore as on CoD.
In the matter of truing-up of AFC of MB-II the Commission vide its Tariff Order dated
29.03.2017 has already carried out the final true-up upto FY 2015-16 considering the capital cost of
Rs. 1885.50 Crore as approved by the Commission as on CoD of the project. Hence, the Commission
in the current tariff proceedings has decided to carry out truing-up of MB-II for FY 2016-17
considering the capital cost as on CoD as approved by the Commission in the Tariff Orders dated
05.04.20016 and 29.03.2017 in accordance with the UERC Tariff Regulations, 2015.
3.1 Impact of Sharing of Gains and Losses on account of Controllable Factors for FY 2016-17
Regulation 14 of the UERC Tariff Regulations, 2015 specify as follows:
“14. Sharing of Gains and Losses on account of Controllable factors
(1) The approved aggregate gain and loss to the Applicant on account of controllable factors shall
be dealt with in the following manner:
a) 1/3rd of such gain or loss shall be passed on as a rebate or allowed to be recovered in tariffs
over such period as may be specified in the Order of the Commission;
b) The balance amount of such gain or loss may be utilized or absorbed by the Applicant.”
The UERC Tariff Regulations, 2015 requires a comparison of the audited performance of the
applicant for the previous financial year with the approved forecast for such previous financial year
and truing-up of expenses and revenues subject to prudence check including pass through of
impact of uncontrollable factors.
O&M expenses comprise of the major portion of AFC of UJVN Ltd. and are within the
control of the Petitioner and, moreover, in accordance with UERC Tariff Regulations, 2015 these are
controllable expenses. Similarly, in accordance with the UERC Tariff Regulations, 2015, the
variation in working capital requirements is also a controllable factor. Hence, the sharing of gains
and losses has been carried out for these expenses.
Accordingly, the Commission has worked out the trued-up (surplus)/gap of the Petitioner
after sharing of gains and losses as per the provisions of UERC Tariff Regulations, 2015.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
16 Uttarakhand Electricity Regulatory Commission
3.1.1 Physical Parameters
3.1.1.1 Relaxation sought in approved NAPAF
A. Relaxation sought for 9 LHPs
The Commission vide its MYT Order dated 05.04.2016 had approved the NAPAF for hydro
generating stations of UJVN Ltd. in accordance with Regulations 47(1)(b) of UERC Tariff
Regulations, 2015. The Commission in its MYT order dated 05.04.2016 for approving the NAPAF
had stated as follows:
“As the RMU works for some of the nine old generating stations are yet to be completed, the
Commission is of the view that the NAPAF approved for the first Control Period shall continue to
be applicable for the second Control Period except for the stations for which the Petitioner has
projected higher NAPAF for the second Control Period. Accordingly, the Commission has
approved the NAPAF for each station for Second Control Period equivalent to higher of the
NAPAF approved in first Control Period or NAPAF now projected by the Petitioner. However,
the Commission shall take a fresh view on the same once the RMU works for the stations get
completed. For Khatima HEP, as the RMU works are likely to be completed, the Commission at
this stage has approved the NAPAF only for FY 2016-17. For FY 2017-18 and FY 2018-19 the
Commission will approve the NAPAF of Khatima HEP as a part of APR Petition for FY 2016-17.
With regard to MB-II,…
The Commission is of the view that it will not be appropriate to consider MB-II plant as pure RoR
plant when the plant is designed for RoR with pondage and the capital cost has been approved
which includes the cost of Pondage also. In case the plant is to be treated as RoR, then the Capital
Cost will also require adjustment accordingly. The Commission has been relaxing the NAPAF for
MB-II for previous years also. Considering the ground realities, the Commission is of the view that
the works of increasing the height of Barrage from 1104 m to 1108 m should be taken on top
priority along with other related works which are essentially to be carried out for attaining the
design generation from MB-II Plant and, therefore, the Commission directs the Petitioner to
complete all works which are causing hindrances in achieving the reservoir level upto
1108 m and other related works which restrict the generation capacity as well as the
design generation of MB-II HEP by the end of FY 2016-17. The Commission, accordingly, has
considered three months shutdown from November, 2016 to January 2017 for carrying out these
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 17
works during FY 2016-17 and has relaxed the NAPAF to 61.51% for FY 2016-17. The
Commission would also like to caution UJVN Ltd., that this is the last time, the Commission is
relaxing the NAPAF of MB-II on the issue of raising the height of the barrage. However, in case
the Petitioner fails to carry out such works during FY 2016-17 as directed by the Commission, the
NAPAF for the station shall be considered as 74% while carrying out the truing- up for FY 2016-
17. The Commission shall take a fresh view on the NAPAF for FY 2017-18 and FY 2018-19 once
the reservoir is raised to the design height.”
The Commission in its MYT order dated 05.04.2016 had fixed the NAPAF for the 10 LHPs as
follows:
Table 3.1: NAPAF approved vide MYT order dated 05.04.2016 for FY 2016-17
Sl. No. Name and Type of Plant NAPAF Approved by the Commission in
Order dt. 05.04.2016 for FY 2016-17
1 Dhakrani RoR 61.04%
2 Dhalipur RoR 57.26%
3 Chibro Pondage 65.06%
4 Khodri Pondage 57.23%
5 Kulhal RoR 65.00%
6 Ramganga Storage 19.00%
7 Chilla RoR 74.00%
8 MB-I Pondage 79.00%
9 Khatima RoR 47.21%
10 MB-II Pondage 61.51%
Now, in the current Petitions, the Petitioner has requested to relax the NAPAF norms for FY
2016-17 for its plants namely Dhakrani, Dhalipur, Ramganga and MB-I LHPs. In support of its
claim, the Petitioner has submitted the following plant-wise reasons for not being able to achieve
prescribed NAPAF and the same are discussed below:
▪ Dhakrani–The Petitioner has submitted that the station could not achieve NAPAF as the
generating plant remained closed during 16.03.2017 to 30.04.2017 on account of DRIP works
at Dakpathar barrage and the power channel. The Petitioner has requested the Commission
to approve the NAPAF for FY 2016-17 as 54.88% instead of 61.04%.
▪ Dhalipur- The Petitioner has submitted that the station could not achieve NAPAF as the
generating plant remained closed during 16.03.2017 to 30.04.2017 on account of DRIP works
at Dakpathar barrage and the power channel. The Petitioner has requested the Commission
to approve the NAPAF for FY 2016-17 as 55.02% instead of 57.26%.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
18 Uttarakhand Electricity Regulatory Commission
▪ Ramganga–The Petitioner submitted that the water released from Ramganga Dam is purely
irrigation based and the control of which rests with Uttar Pradesh Irrigation Department
and, therefore, they have no control over the same. Therefore, the Petitioner has requested
the Commission to revise the NAPAF for FY 2016-17 as 10.81% instead of 19.00%.
▪ MB-I -The Petitioner has submitted that the Power Station is suffering from excessive silt
and aging. The Petitioner further submitted that the breakdown of the equipment and
closure of the Power Station increased unprecedentedly even after best possible maintenance
efforts by the Petitioner. The Petitioner has also submitted that due to the following reasons
the Power Station was not able to achieve the approved NAPAF:
The Power Station was under forced closure from 25.04.2016 to 30.04.2016 due to
very urgent work in cooling water system (Strainer valves of the units were replaced)
and repair of MIV bypass valve of Unit 2.
Unit 2 of the station was under forced outage from 19.07.2016 to 26.07.2016 and from
30.07.2017 to 31.07.2017 as there was excessive leakage of water from top cover.
Unit 2 of the Power Station was under forced outage from 01.05.2016 to 19.06.2016
due to fault in stator winding.
The Power Station was under monsoon closure from 07.08.2016 to 10.09.2016 for
interim repair of underwater parts.
Unit 1 of the Power Station was under outage from 13.02.2017 to 14.07.2017 for
reverse engineering works for RMU.
The Petitioner accordingly, requested the Commission to revise the NAPAF of 59.72% from
79.00% in FY 2016-17.
The Commission has gone through the submissions of the Petitioner and is of the view that
the norms for 9 LHPs have already been relaxed considering the actual conditions at the plant site
and, therefore, further relaxation of the approved norms is not justified unless under exceptional
circumstances.
With regard to Dhakrani and Dhalipur LHPs, the reasons for not achieving NAPAF as
submitted by the Petitioner is on account of closure of Power Stations for DRIP works at Dakpathar
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 19
barrage and the power channel from 16.03.17 to 30.04.17 i.e. for a period of 15 days. The
Commission in its Tariff Order dated 05.04.2016 while approving the NAPAF for FY 2016-17 has
already factored in the outage plan for the two stations which included one month shutdown for
DRIP works for Dhakrani and Dhalipur LHPs for FY 2016-17. The Commission, therefore, is of the
view that there is no case for further relaxation with regard to the NAPAF of Dhakrani and
Dhalipur stations for FY 2016-17, and, therefore, no relaxation has been allowed by the Commission.
Further, with regard to Ramganga LHP, the relaxation sought by the Petitioner was on
account of the reason that the control of water release lies with Uttar Pradesh Irrigation Department
(UPID). The Commission observes that the Petitioner itself in its MYT Petition had projected
NAPAF for the station as 17.24% after factoring in the above reason. Further, it is also observed that
the Petitioner was able to achieve PAFY of 30.07% in FY 2015-16 and had earned incentive on it.
The Commission while approving NAPAF for the second Control Period had considered the
maximum of NAPAF approved for the first Control Period and that projected by the Petitioner for
the second Control Period which already factors in the fact that the control of water release lies with
UPID. The Commission has, therefore, not allowed any relaxation with regard to NAPAF for FY
2016-17 for Ramganga LHP.
With regard to NAPAF of MB-I for FY 2016-17, the Commission in its Order dated
03.09.2013 has already considered the operating problems on account of site conditions. While
approving NAPAF of the station total of 77 days plant shutdown has already been factored
including 28 days shutdown due to abnormal conditions. The Commission is of the view that the
forced shutdown on account of replacement of strainer valves, repair of MIV bypass valve, excess
water leakage from top cover and stator winding fault are recurring and the same cannot be
attributed to unforeseen circumstances of uncontrollable nature, instead it only signals towards lack
of preventive maintenance and therefore, these reasons are untenable. Further, with regards to
forced shutdown in monsoon season due to abnormal conditions, as stated above, the Commission
has already factored in 77 days shutdown on account of planned and other maintenance activities
including 28 days shutdown on account of abnormal conditions. The Commission is, therefore, of
the view that there is no case for relaxation of NAPAF on account of the above reasons. With regard
to reverse engineering works for RMU of the MB-I station, the Commission is of the view that the
same has not been considered while approving NAPAF for the station and, hence, the Commission
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
20 Uttarakhand Electricity Regulatory Commission
has re-stated the PAFY of MB-I generating station as 61.96% for FY 2016-17 after considering the
reverse engineering works of Unit 1 of MB-I station.
B. Maneri Bhali-II
The Petitioner, in the instant Petition, has claimed NAPAF of 65.15% for FY 2016-17. The
NAPAF for MB-II was fixed as 61.51% for FY 2016-17 in the MYT Order dated 05.04.2016 issued for
the second Control Period from FY 2016-17 to FY 2018-19. The Commission, in the MYT Order
dated 05.04.2016 had considered three months shutdown from November, 2016 to January 2017 for
increasing the height of Barrage from 1104 m to 1108 m and other related works which restricts the
generating capacity of MB-II HEP. However, in accordance with the generation data as submitted
by the Petitioner, it is observed that the Petitioner did not require the prolonged shutdown to
increase the dam height as the station was generating in all the months. The Commission is,
therefore, of the view that the actual PAFY achieved by the Petitioner for FY 2016-17 is not on
account of its enhanced efficiency but is on account of prolonged shutdown considered by the
Commission while fixing NAPAF for FY 2016-17. The Commission is, therefore, of the view that the
Petitioner is not entitled to the benefit in terms of incentive recovered by the Petitioner on account
of over-achieving a relaxed NAPAF. The Commission has, therefore, re-stated actual PAFY for the
station for FY 2016-17 equal to the NAPAF of 61.51% approved by the Commission for allowing the
recovery of fixed charges.
3.1.1.2 Energy Generation and Saleable Primary Energy
The Commission in its MYT Order dated 05.04.2016 on approval of Business Plan and Multi
Year Tariff for the second Control Period from FY 2016-17 to FY 2018-19 had approved the Design
Energy equivalent to the Design Energy approved in the previous Orders. UJVN Ltd. has not
sought any deviation in the approved design energy for FY 2016-17. Accordingly, the Commission
decides to maintain the design energy and saleable primary energy as considered in the MYT Order
dated 05.04.2016 for 9 LHPs and MB-II LHP of the Petitioner. Accordingly, the Design Energy
approved is as under:
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 21
Table 3.2: Design Energy and Saleable Primary Energy Approved for FY 2016-17 (MU) Name of the
Generating Station Original
Design Energy Design Energy
Auxiliary consumption (including Transformation Loss)
Saleable Primary energy
MU MU % MU MU
Dhakrani 169.00 156.88 0.70% 1.10 155.78
Dhalipur 192.00 192.00 0.70% 1.34 190.66
Chibro 750.00 750.00 1.20% 9.00 741.00
Khodri 345.00 345.00 1.00% 3.45 341.55
Kulhal 164.00 153.91 0.70% 1.08 152.83
Ramganga 385.00 311.00 0.70% 2.18 308.82
Chilla 725.00 671.29 1.00% 6.71 664.58
MB-I 546.00 395.00 0.70% 2.77 392.24
Khatima 208.00 194.05 1.00% 1.36 192.69
MB-II 1566.10 1566.10 1.00% 15.66 1550.44
Total 5050.10 4735.23
44.65 4690.59
3.1.2 Financial Parameters
3.1.2.1 Apportionment of Common Expenses
The Petitioner in its Petition has considered the allocation for indirect expenses in the ratio
of 85:10:5 among 9 LHPs, MB-II and SHPs respectively. The Commission in its Order dated
05.04.2016 had considered the allocation for indirect expenses in the ratio of 85:10:5 among 9 LHPs,
MB-II and SHPs respectively, stated as follows:
“The Petitioner in its Petition has changed the allocation for indirect expenses from the initial ratio of
80:10:10 to 85:10:5 among 9 LHPs, MB-II and SHPs respectively. The Commission directed the
Petitioner to submit the rationale for changing the methodology for apportionment of common
expenses. The Petitioner in its reply has submitted that the ratio towards SHPs have been reduced as
22 nos. of SHPs have been transferred to UREDA which has resulted in the reduction in the existing
capacities with UJVN Ltd. to 32.70 MW from the earlier 58.10 MW and, therefore, the said expenses
have been allocated on to 9 LHPs.
The Commission has gone through the submission made by the Petitioner and observes that almost
half of the capacity of the SHPs has been transferred to UREDA and, therefore, the Commission
agrees with the methodology proposed by the Petitioner and has considered the same for allocation of
common expenses.”
Accordingly, in line with the above decision in the Order dated 05.04.2016, the Commission
has considered the ratio of 85:10:5 among 9 LHPs, MB-II and SHPs, respectively, for allocation of
common expenses. However, the Commission would like to point out that UJVN Ltd. is
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
22 Uttarakhand Electricity Regulatory Commission
diversifying its business and is also in solar generation now, accordingly, while seeking truing-up
for FY 2017-18, UJVN Ltd. would be required to review the basis for such apportionment of
common expenses.
3.1.2.2 Capital Cost
A. Old Nine Generating Stations
Pending finalization of the Transfer Scheme, for various reasons recorded in the previous
Tariff Orders, the Commission had been approving the opening GFA for the nine LHPs as on
14.01.2000 as Rs. 506.17 Crore.
The Commission directed UJVN Ltd. to submit the current status towards finalization of
transfer scheme. In response, the Petitioner has submitted that the issues regarding transfer scheme
viz. (a) liability of LIC loan of Rs. 352.59 Crore regarding MB-II LHP and (b) remittance of GPF
liabilities of Rs. 135.78 Crore are yet to be finalized. The Petitioner in compliance to the above
directive submitted that a meeting was held between Hon’ble Chief Ministers of Uttarakhand and
Uttar Pradesh on April 10, 2017 on division of assets and liabilities between the State of
Uttarakhand and Uttar Pradesh and therein matters pertaining to UJVN Ltd. and UPJVNL were
discussed. Also, further meeting is scheduled to be held between Chief Secretary of both the States
in near future. Further, the Petitioner vide letter no. 276/UJVNL/D(F)/G-4 dated 07.07.2017 has
apprised to the Secretary Energy (Govt. of Uttarakhand) for remittance of the outstanding amount
of GPF liabilities of Rs. 146.42 Crore as on 30.6.2017. The Commission has noted the submissions
of the Petitioner and directs Petitioner to closely follow up with issue and submit quarterly
status report to the Commission. However, the Commission would like to point out that there
has been an inordinate delay in the finalization of the transfer scheme which is attributable to
the Petitioner, hence, any consequential claim arising due to finalization of the transfer scheme
shall be considered on merits by the Commission without any carrying cost on the same.
Since, the Transfer Scheme is yet to be finalized, the Commission for the purposes of truing-
up for FY 2016-17 has considered the opening GFA of nine LHPs, as on 14.01.2000 as Rs. 506.17
Crore as per the details given below:
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 23
Table 3.3: Approved Capital Cost as on 14.01.2000 (Rs. Crore)
Name of the Generating Stations (9LHPs) Claimed Approved
Dhakrani 12.40 12.40
Dhalipur 20.37 20.37
Chibro 87.89 87.89
Khodri 73.97 73.97
Kulhal 17.51 17.51
Ramganga 50.02 50.02
Chilla 124.89 124.89
MB-I* 111.93 111.93
Khatima 7.19 7.19
Total 506.17 506.17 *Including DRB claim
B. Maneri Bhali-II
The Petitioner has requested the Commission to consider the capital cost of Rs. 1923.60 Crore
as on CoD, i.e. 15.03.2008 and, accordingly, allow true-up of AFC and Tariff for MB-II HEP.
With regard to fixation of the Capital Cost of MB-II on the date of its Commercial Operation
(CoD), the Commission in its Tariff Order dated 05.04.2016 had revised the Capital Cost as on CoD
to Rs. 1885.50 Crore and stated as follows:
“The Commission in the current tariff proceedings observed that the Petitioner has submitted that the
Capital Cost as on COD included provisioning towards discharge of liabilities in future amounting to
Rs. 3.72 Crore which was actually discharged in FY 2008-09 and wrongly included as R&M
expenses. In accordance with MYT Regulations, 2011, any capital expenditure after COD is to be
considered as additional capital expenditure subject to condition provided there in and also it has been
the approach of the Commission in the past to not allow tariff on the provisioned amount and,
therefore, the Commission has revised the Capital Cost of MB-II as on COD to Rs. 1885.50 Crore.
Further, the Commission has considered the aforesaid amount of Rs. 3.72 Crore as additional
capitalisation in FY 2008-09 as the same was actually discharged during FY 2008-09.”
Moreover, the Petitioner has filed an Appeal before the Hon’ble ATE agitating the issue of
Capital Cost of MB-II LHP approved by the Commission which is pending before the Hon’ble ATE.
Hence, pending disposal of the Appeal, the Commission does not find any reason to revisit the
capital cost of MB-II LHP as already approved by it in the Tariff Orders dated 05.04.2016 and
29.03.2017.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
24 Uttarakhand Electricity Regulatory Commission
Accordingly, in line with the above decision in Tariff Order dated 05.04.2016, and 29.03.2017,
the Commission for the purposes of this Tariff Order is considering the capital cost for MB-II Power
Station, as on CoD i.e. 15.03.2008, as Rs. 1885.50 Crore as per the details given below:
Table 3.4: Approved Capital Cost for MB-II as on CoD (Rs. Crore)
Particulars Approved in Tariff Order dt.
05.04.2016 Approved
Now
Capital Expenditure 1490.98 1490.98
Add: Adjustment on Account of DRB Award 44.51 44.51
Price Variation -7.94 -7.94
Sub-total (A) 1527.55 1527.55
IDC & Other Financial Charges
Interest paid to PFC 257.41 257.41
Guarantee Fee 28.86 28.86
Intt. On GoU Loan 5.04 5.04
Intt. Repayment AGSP 66.64 66.64
Excess Guarantee Fee Payable 0.00 0.00
Sub-total (B) 357.95 357.95
Total Capital cost (A+B) 1885.50 1885.50
Further, financing of the approved capital cost of MB-II Power Station approved as on CoD
is shown in the Table below:
Table 3.5: Financing for MB-II as on CoD (Rs. Crore)
Particulars Approved in Tariff Order dt. 05.04.2016 Approved Now
Loans
PFC Loan 1200.00 1200.00
Unpaid Liability 0.00 0.00
Guarantee Fee Payable 0.00 0.00
Normative Loan 119.85 119.85
Total debts 1319.85 1319.85
Equity
PDF 326.76 326.76
GoU Budgetary support 74.89 74.89
Pre-2002 expense 164.00 164.00
Total Equity 565.65 565.65
Total Loan and Equity 1885.50 1885.50
In the above Table, the total equity, i.e. Rs. 565.65 Crore which is 30% of the total approved
Capital Cost of MB-II, has been considered to be funded by way of pre 2002 expenses of Rs. 164
Crore, actual disbursement from PDF upto CoD of Rs. 326.76 Crore and the balance amount of Rs.
74.89 Crore from the GoU budgetary support.
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 25
3.1.2.3 Additional Capitalisation
A. Old Nine Generating Stations
In addition to the opening GFA of Rs. 506.17 Crore as on 14.01.2000 of 9 LHP’s, the
Commission had approved the additional capitalization from FY 2001-02 to FY 2015-16 amounting
to Rs. 186.06 Crore in its previous Tariff Orders.
Accordingly, the additional capitalisation from FY 2001-02 to FY 2015-16 so far considered
by the Commission for 9 LHPs is shown in the Table below:
Table 3.6: Additional Capitalisation already approved by the Commission from FY 2001-02 to FY 2015-16 for 9 LHPs (Rs. Crore)
Name of Generating Station Amount
Dhakrani 2.81
Dhalipur 4.61
Chibro 27.03
Khodri 12.88
Kulhal 2.73
Ramganga 5.71
Chilla 38.17
MB-I 33.97
Khatima 58.15*
Total 186.06 *Excluding de-capitalisation of Rs. 2.03 Crore in FY 2014-15
Based on the approved capital cost of 9 LHPs as on 14.01.2000 and considering, the
additional capitalisation upto FY 2015-16 for these LHPs, the Commission has considered the
opening GFA for FY 2016-17 for nine LHPs as presented below:
Table 3.7: Opening GFA for 9 LHPs as considered by the Commission for FY 2016-17 (Rs. Crore)
Name of the Generating Stations Amount
Dhakrani 15.21
Dhalipur 24.98
Chibro 114.92
Khodri 86.85
Kulhal 20.24
Ramganga 55.73
Chilla 163.06
MB-I 145.90*
Khatima 63.30**
Total 690.19 * Including DRB claim
**Including de-capitalisation of Rs. 2.03 Crore in FY 2014-15
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
26 Uttarakhand Electricity Regulatory Commission
The Petitioner for its 9 LHPs has claimed the additional capitalisation for FY 2016-17 as
given in the Table below:
Table 3.8: Additional Capitalisation for 9 LHPs claimed by the Petitioner for FY 2016-17
Name of the Generating Stations
Additional Capitalisation
De-Capitalisation
Net Additional Capitalisation
Dhakrani 6.26 0.03 6.23
Dhalipur 3.98 0.05 3.93
Chibro 10.52 0.26 10.25
Khodri 7.61 0.11 7.50
Kulhal 1.75 0.03 1.72
Ramganga 1.12 0.20 0.92
Chilla 4.40 0.14 4.26
MB-I 1.67 0.03 1.64
Khatima 89.73 0.04 89.69
Total 127.03 0.89 126.14
It is observed that the Commission in its Order dated 05.04.2016 had considered the
additional capitalisation of Rs. 163.89 Crore for FY 2016-17, however, UJVN Ltd. in this instant
Petition has claimed additional capitalisation of Rs. 127.03 Crore for FY 2016-17. The Commission
however, observed that UJVN Ltd. has sought additional capitalization for almost all the LHPs
during FY 2016-17 to FY 2018-19 by just stating that the same is essential for the efficient operations
of the plant and the need of additional capitalization has not been properly justified in the Petition
as per Regulation 22(2) of the UERC Tariff Regulations, 2015. The Commission vide its letter dated
05.01.2018 directed UJVN Ltd. that as per Regulation 22(2) of the UERC Tariff Regulations, 2015 all
the additional capitalization after the cut-off date of the LHPs should be substantiated with
technical justification duly supported by documentary evidence like test results carried out by
independent agency in case of deterioration of assets, report of an independent agency in case of
damage caused by natural calamities, obsolescence of technology, up-gradation of capacity for the
technical reason such as increase in fault level, etc. and has sought detailed justification for
additional capitalisation claimed along with station-wise reconciliation with audited accounts for
FY 2016-17. In response, UJVN Ltd. submitted the station-wise reconciliation of the additional
capitalization with audited accounts for FY 2016-17 along with the necessary supporting
documents.
Further, with regards to RMU of Khatima the Commission sought unit-wise details of
expenses incurred as on CoD.
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 27
The Commission in its Tariff Order dated 29.03.2017 had directed the Petitioner to submit
audited RMU expenses of Khatima LHP as on the date of completion of RMU works alongwith the
details of de-capitalisation and stated as follows:
“As discussed above, the Petitioner has submitted that it has incurred capitalisation of Rs. 49.77
Crore in FY 2016-17 (upto December 2016) and Rs. 49.66 Crore in January 2017 under RMU and
other civil works in case of Khatima LHP. The Commission in its investment approval dated
17.05.2015 has given in-principle approval of Rs. 256.77 Crore (including IDC) towards RMU
works subject to prudence check. The Commission is of the view that the amount so far claimed till
FY 2016-17 is well within the approval however, since the final completion cost is yet to be finalised,
the Commission shall carry out detailed prudence check of RMU expenses once audited cost is
available during the truing up of FY 2016-17. The Petitioner is directed to submit the audited
RMU expenses as on date of completion of RMU works along with details of de-
capitalisation in respect of the same as soon as the same is available including quantity.
The Petitioner is also directed to submit the details of scrap available on de-capitalisation
of old plant and machinery and expected time frame in which the same will be disposed.
In view of the above submission, the Commission has provisionally considered the capitalisation of
Rs. 99.43 Crore (i.e. Rs. 49.77 Crore + Rs. 49.66 Crore) for Khatima LHP for FY 2016-17...”
The Petitioner in current Petition did not submit the above details as sought by the
Commission in Tariff Order dated 29.03.2017. Accordingly, the Commission vide its letter dated
07.12.2017 directed the Petitioner to submit the copy of the above details. In response, the Petitioner
vide its letter dated 14.12.2017 submitted the copy of the audited RMU expenses as on the date of
completion of RMU works, i.e. 08.09.2016 along with the details of scrap available on de-
capitalisation of old plant and machinery. Also, the Petitioner has submitted the details of RMU
expenses incurred unit-wise on Khatima LHP as under:
Table 3.9: Total RMU expenses incurred on Khatima as claimed by the Petitioner (in Rs.) Particulars E&M IDC Total CoD
Machine 1 608181870.00 53662369.00 661844239.00 06-04-2015
Machine 2 403992604.00 51235270.00 455227874.00 28-04-2016
Machine 3 386187571.00 51235270.00 437422841.00 08-09-2016
Total 1398362045.00 156132909.00 1554494954.00
The Petitioner has further submitted the breakup of the works carried out and capitalised in
FY 2016-17 amounting to Rs. 89.29 Crore as given in Annexure 4 of this Order.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
28 Uttarakhand Electricity Regulatory Commission
The Commission has gone through the submissions of the Petitioner and observes that in its
Tariff Order dated 05.04.2016 the Commission had de-capitalized assets amounting to Rs. 2.03 Crore
in FY 2014-15 pertaining to old Plant & Machinery of Khatima LHP since RMU works were being
carried out. Further, the Petitioner in its Tariff Petition for FY 2017-18 had claimed the amount of Rs.
66.56 Crore (including IDC of Rs. 5.37 Crore) in FY 2015-16. Thereafter, the Commission in its Tariff
Order dated 29.03.2017 had allowed the amount of Rs. 56.35 Crore on account of RMU works after
deducting expenses of Rs. 10.21 Crore incurred by UJVN Ltd. on restoration works due to breaching
of power channel that occurred due to the fault of UJVN Ltd.
As the RMU works pertaining to the three units of Khatima are completed, the Commission
sought copy of all the contracts awarded towards RMU works of Khatima LHP along with the
computation of all the price variations paid to the Contractor. The Petitioner in response submitted
the same. Further, the Petitioner was directed to submit the comparison of scope of works as per
DPR and that actually executed by it through various contracts. In response, the Petitioner vide its
letter dated 30.01.2018 submitted the comparison of scope of works as per DPR of RMU and works
actually executed by it through various contracts. In response, the Petitioner vide its letter dated
16.02.2018 has submitted its reply to the same.
From the above submissions of the Petitioner, the Commission observed that in its Tariff
Order dated 29.03.2017 it had already disallowed the expenses of Rs. 7.68 Crore for major civil
works and Rs. 2.53 Crore for plant & machinery totalling to Rs. 10.21 Crore for restoring the failure
in Khatima LHP on account of damages due to breaching of Power Channel that occurred due to
own fault of UJVN Ltd. However, the expenses of Rs. 89.29 Crore (including IDC of Rs. 10.25 Crore)
for FY 2016-17 claimed by the Petitioner in the instant Tariff Petition on account of works under
RMU includes the restoration work of Generator Step Up (GSU) transformer. Accordingly, the
Commission vide its letter dated 23.02.2018 directed the Petitioner to clarify about claiming such
expense in FY 2016-17 on account of restoration work of GSU transformer, inspite of the same
having been disallowed in Tariff Order dated 29.03.2017. The Commission also directed the
Petitioner to furnish the details of year-wise capitalisation of expenses amounting to Rs. 10.21 Crore
along with head-wise details. The Petitioner vide its letter dated 08.03.2018 has submitted the
details of the expenses for Plant and Machinery against Additional Capitalization disallowed in
Commission’s Order dated 29.03.2017.
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 29
The Petitioner with regard to the completion of entire scope of works of RMU submitted that
though the works pertaining to E&M have been completed for all the three units, however, the civil
works related to RMU Khatima are still pending. The Commission in this regard sought time frame
in which the above works would get completed. The Petitioner in response vide letter dated
15.01.2018 submitted that though Khatima Power house is under the possession of UJVN Ltd. but
water conductor system of this power house upstream side of the forebay tank is under possession
of Uttar Pradesh Irrigation Department (UPID). Thus, though the system is being used for power
generation for UJVN Ltd., the necessary repairs on the upstream side involving civil works are to be
done only through UPID. Further, the Petitioner has submitted that continuous effort had been
made in order to complete the work and some preliminary budgetary offer was also received from
UPID for completion of the works but detailed estimates are still awaited for which meeting is
scheduled in March 2018 and efforts are being made to streamline the issue so that all the works get
completed through UPID latest by December 2018 or January 2019. The Commission has gone
through the submissions of the Petitioner and is of the view that RMU works should be completed
as soon as possible and the same cannot be allowed to continue indefinitely. The Commission
directs the Petitioner to complete the entire works under the DPR of RMU of Khatima by FY
2018-19 as no capitalisation on account of deferred works of RMU beyond FY 2018-19 shall be
allowed.
Based on the above discussions, the Commission is of the view that the RMU expenses
claimed by the Petitioner includes the amount of Rs. 10.21 Crore disallowed by the Commission in
Tariff Order dated 29.03.2017. Accordingly, the Commission at this stage has considered the
additional capitalization excluding IDC of Rs. 78.64 Crore (i.e. Rs. 139.84 Crore as per audited
accounts for FY 2016-17- Rs. 50.98 Crore allowed in Tariff Order dated 29.03.2017-Rs. 10.21 Crore
disallowed in Tariff Order dated 29.03.2017) for Khatima LHP for FY 2016-17 on account of RMU
works as claimed by the Petitioner. The Commission will carry out the detailed prudence check of
Capital Cost of Khatima RMU once the entire works pertaining to RMU of Khatima are completed.
Further, with regard to the IDC incurred during RMU works of Khatima LHP, the
Commission vide its letter dated 05.01.2018 directed UJVN Ltd. to submit the detailed computation
of IDC corresponding to RMU works of Khatima. The Petitioner vide its letter dated 02.02.2018 has
given details of IDC corresponding to Khatima RMU, however, the Petitioner did not provide the
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
30 Uttarakhand Electricity Regulatory Commission
computation of IDC. Therefore, the Commission vide its letter dated 08.02.2016 redirected the
Petitioner to provide the detailed computation of quarter-wise IDC. In response, the Petitioner vide
its letter dated 16.02.2018 submitted the quarter-wise details of IDC till the CoD of Machine 3,
however, it did not submit the quarter-wise actual phasing of expenditure along with the funding
of such expenditure. Therefore, the Commission has computed the Base Case IDC considering the
approved hard cost of Rs. 129.63 Crore as discussed above. For computation of Base Case IDC, the
Commission has considered the debt equity ratio of 70:30 and the actual interest rate of 11.42%.
Accordingly, the Commission has derived the total IDC of Rs. 13.95 Crore incurred till 31.03.2017 on
account of works under RMU. As the Commission in its Tariff Order dated 29.03.2017 had
approved the IDC of Rs. 5.37 Crore in FY 2015-16, IDC to be allowed in FY 2016-17 works out to Rs.
8.58 Crore (i.e. Rs. 13.95 Crore – Rs. 5.37 Crore).
Accordingly, the Commission has approved the additional capitalization for Khatima LHP
for FY 2016-17 as under:
Table 3.10:Details of additional capital expenditure under RMU works in Khatima LHP for FY 2016-17 approved by the Commission (Rs. Crore)
Particulars Claimed Approved
Total RMU under Plant & Machinery 79.02 78.64
IDC capitalized 10.25 8.58
Furniture & Fixtures 0.01 0.01
Office Equipments & Others 0.01 0.01
Computer 0.01 0.01
Total 89.29 87.25
The Petitioner has further submitted that in addition to the above, some additional
capitalisation was on account of indirect expenses as shown below. The Commission has gone
through the submissions of the Petitioner and has approved the total additional capitalisation for
Khatima LHPs (net of de-cap of Rs. 0.04 Crore) as shown below:
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 31
Table 3.11:Additional Capitalisation approved for Khatima LHP for FY 2016-17(Rs. Crore)
S. No. Particulars Claimed Approved
Direct Apportioned Total Direct Apportioned Total
1 Land 0.00 0.00 0.00 0.00 0.00 0.00
2 Building 0.00 0.01 0.01 0.00 0.01 0.01
3 Hydraulic Works 0.00 0.00 0.00 0.00 0.00 0.00
4 Major civil works 0.00 (0.03) (0.03) 0.00 (0.03) (0.03)
5 Plant & Machinery 89.61 0.02 89.63 87.23 0.02 87.25
6 Vehicles 0.01 0.03 0.03 0.00 0.03 0.03
7 Furniture & Fixtures 0.00 (0.00) (0.00) 0.01 (0.00) 0.01
8 Office Equipment 0.01 0.04 0.05 0.01 0.04 0.05
Total 89.63 0.06 89.69 87.25 0.06 87.31
The Commission, with regard additional capitalisation claimed for Dhakrani HEP observed
that an amount of Rs. 0.026 Crore of expenditure was booked against Submersible Pump and an
amount of Rs. 0.026 Crore towards the same asset is also booked under R&M Expenses. The
Commission vide its letter dated 17.01.2018 directed the Petitioner to justify the same. The Petitioner
in response has submitted that one wrong booking in Dhakrani Unit in Adjustment voucher No. A-
5 dated August 2017 amounting to Rs. 2,61,050 was a repetitive entry. The Commission has,
therefore, reduced the same from the additional capitalization of Dhakrani HEP.
Further, the Commission observed that under the sub-head ‘Building’ in Dhakrani Power
Station, the Petitioner had wrongly shown the additional capitalization of Rs. 55.25 Lakh and Rs.
54.58 Lakh, however, the same was incurred as a part of R&M expenses of Kulhal Power Station
and Dhalipur Power Station, respectively. Accordingly, the amount of Rs. 55.25 Lakh and Rs. 54.58
Lakh have been reduced from the additional capital expenditure of Dhakrani and added into R&M
of Kulhal Power Station and Dhalipur Power Station.
Further, with regard to Chilla LHP, the Commission vide its letter dated 07.12.2017 directed
the Petitioner to submit the detailed breakup of claimed additional capitalisation and the same was
provided by the Petitioner vide its letter dated 22.12.2017. From the details of additional
capitalisation, the Commission observed that in case of Chilla LHP, the Petitioner has claimed de-
capitalisation of Rs. 19.30 Crore. The Commission directed the Petitioner to provide the details of
such expenses. In reply, the Petitioner vide its letter dated 02.02.2018 has submitted that such
amount of Rs. 19.30 Crore was already approved by the Commission in its Tariff Order dated
29.03.2017 in additional capitalisation of Chilla in FY 2015-16 under civil works in RMU. The
Petitioner has further submitted that now such works have been funded by DRIP scheme and,
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
32 Uttarakhand Electricity Regulatory Commission
accordingly, the Petitioner has transferred the said expenses into separate DRIP accounting unit in
FY 2016-17. In this regard, the Commission is of the view that the truing-up of FY 2015-16 has
already been done in Tariff Order dated 29.03.2017, in which a total of Rs. 23.49 Crore was
approved for additional capitalisation for Chilla LHP. Since the financing pattern of the works
covered under DRIP are still unclear and loan/grant or interest rates are not available for the same,
therefore, in the absence of firm details of funding & interest rate for the DRIP scheme and non-
capitalization of the works executed, the Commission is deducting the said amount of Rs. 19.30
Crore from the opening GFA of Chilla HEP for FY 2016-17 and this would be considered as and
when UJVN Ltd. claims for capitalisation of DRIP works with the details of funding plan.
In MB-I, the Commission observed that the Petitioner has claimed the amount of Rs. 1.33
Crore on account of protection work of Siroor Bridge alongwith river training work and asked the
Petitioner to provide the details of such expenses. In reply, the Petitioner vide its letter dated
02.02.2018 has submitted that expense of Rs. 1.33 Crore was incurred on account of protection work
of Siroor Bridge along with river training work which is covered under Special Project Assistance
Scheme works and the same has been funded by the Government of Uttarakhand. Since the work is
funded through GoU, the Commission is of the view that the additional capitalization against the
said works is to be treated as grant. Also, the Commission is of the view that in the further tariff
proceedings the Petitioner should provide the details of works undertaken by the approved grant.
The Commission further observed that the Petitioner had included some of the expenses of
capital nature under R&M expenses. The Commission has, accordingly, deducted expenses of
capital nature from R&M expenses and considered the same as additional capitalisation.
Table 3.12: Expenses of Capital Nature wrongly booked under R&M Expenses for three of the 9 LHPs during FY 2016-17 (Rs. Crore)
Name of the Generating Stations Expenses of Capital Nature
but included in R&M
Dhakrani 0.53
Chilla 0.11
MB-I 0.18
Total 0.82
Further, the Commission also observed that the Petitioner in additional capitalisation for FY
2016-17 had included some of the expenses amounting to Rs. 14.42 Crore of R&M nature, as listed in
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 33
Annexure 5 of this Order. The Commission has accordingly, deducted expenses of R&M nature
from the additional capitalization and considered the same under R&M expense.
Table 3.13: Expenses of R&M Nature but included under Additional Capitalization for 9 LHPs during FY 2016-17 (Rs. Crore)
Name of the Generating Stations Expenses of R&M Nature but included in
Additional Capitalization
Dhakrani 3.120
Dhalipur 3.202
Chibro 5.715
Khodri 0.000
Kulhal 0.865
Ramganga 0.000
Chilla 1.520
MB-I 0.000
Khatima 0.000
Total 14.42
It is observed that UJVN Ltd. is having different approach for claiming expenses under
major overhauling for different plants. In this regard, the Commission is of the view that the nature
of expense is independent of the values of expense being incurred and thus the expenses should be
booked under the respective head of ARR under which it should actually fall. Hence the
Commission has taken a view that all the works related to Major overhaul claimed under
additional capitalization is shifted to R&M expenses of UJVN Ltd. The Petitioner is further
directed to comply the same philosophy in future claims as well.
The Commission while going through the submissions of the Petitioner observed that the
Petitioner had included some of the expenses of A&G nature in the additional capitalization. The
Commission has accordingly, deducted expenses of A&G nature amounting to Rs. 0.004 Crore in
Chilla and Kulhal Power Stations from the additional capitalization and considered the same under
A&G expense.
The Commission has further observed that in case of Dhakrani LHP, the Petitioner had
wrongly shown the values of Rs. 0.12 Crore and Rs. 0.11 Crore totalling to Rs. 0.23 Crore of Plant &
Machinery into office equipment & others, and therefore, the same has been shifted from office
equipment & others to Plant & Machinery. Similarly, in case of Dhakrani LHP, the Petitioner had
wrongly shown the values of Rs. 0.018 Crore of office equipment & others into Plant & Machinery,
and, therefore, the same has been shifted from Plant & Machinery to office equipment & others.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
34 Uttarakhand Electricity Regulatory Commission
Further, the Commission observed that UJVN Ltd. in its instant Petition for various LHPs
has claimed capital expenditure of Rs. 39.29 Lakh for FY 2016-17 on account of DRIP scheme along
with other capital expenditure. The Commission vide its letter dated 05.01.2018 directed the
Petitioner to submit the status of the Works carried out under DRIP Scheme. The Petitioner vide its
reply dated 15.01.2018 submitted the same as under:
Table 3.14: Quarterly Progress of Investment Approval accorded to UJVN Ltd. as on 31.12.2017
S. No. Works/Projects Date of
Investment Approval
Estimated Cost (Rs.
Crore)
Schedule Completion
Physical Progress (In % of
Total civil
works)
Physical Progress (In % of
Total E&M
Works)
Financial Progress
(Rs. Crore)
1 Refurbishing of Asan Barrage
29.04.2016
25.94/29.65 Jun-2018 95% 80% 13.94
2 Refurbishing of Dakpathar Barrage
27.19/30.98 Apr-2022 71% 75% 27.39
3 Refurbishing of Ichari Dam
22.18 Mar-2024 75% 27% 9.87
4 Refurbishing of Virbhadhra Barrage
Jul-2018 90% 38% 24.48
5 Refurbishing of Maneri Dam
Dec-2018 40% 0% 1.00
Total
76.68
As the works under DRIP scheme have separate financing structure, the Commission sought
station-wise works under DRIP scheme along with the financing of the scheme separately from
other capital expenditure claimed and also directed to submit the revised financing of schemes
other than DRIP. In response, UJVN Ltd. in its reply dated 23.02.2018 submitted that for DRIP
projects 80% funding will be from World Bank (50% IDA credit and 50% IBRD loan) and 20%
funding will be from State/Central Government budgetary support. Out of the total estimated cost
of Rs. 2100 Crore, the share of World Bank, DRIP States and Centre shall be Rs. 1680 Crore, 393.60
Crore and Rs. 26.40 Crore respectively. Further, the Petitioner has also submitted the Loan
agreement for DRIP works vide which the cost of borrowing to UJVN Ltd. shall be as per loan terms
and conditions to be defined by GoU at the time of sanction of such funds/loans to UJVN Ltd.
However, the details of financing cost associated with the funding is not clear in the Loan
agreement as submitted by the Petitioner.
Based on the above submissions of the Petitioner with regard to works carried out under
DRIP Scheme, the Commission is of the view that since the works under the DRIP Scheme has not
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 35
been capitalised yet, therefore, the Commission has not considered the expenses claimed by the
Petitioner for FY 2016-17 under DRIP Scheme.
The Commission, accordingly, approves an additional capitalisation for FY 2016-17 for 9
LHPs as shown below:
Table 3.15: Additional Capitalisation for 9 LHPs for FY 2016-17 approved by the Commission including de-capitalization(Rs. Crore)
Name of the Generating Station
Claimed Approved Approved including de-
capitalization
Dhakrani 6.26 3.63 3.60
Dhalipur 3.98 0.75 0.70
Chibro 10.52 4.67 4.40
Khodri 7.61 7.54 7.43
Kulhal 1.75 0.86 0.84
Ramganga 1.12 1.12 0.92
Chilla 4.40 2.91 (16.53)*
MB-I 1.67 1.80 1.77
Khatima 89.73 87.34 87.31
Total 127.03 110.62 90.43 * including the de-cap of Rs. 19.30 Crore on account of transfer by the Petitioner into DRIP accounting unit
B. Maneri Bhali-II
In addition to the Capital Cost of Rs. 1885.50 Crore as on 15.03.2008, the Commission had
approved the additional capitalization from FY 2007-08 to FY 2015-16 amounting to Rs. 259.44 Crore
in its previous Tariff Orders as shown in the Table below:
Table 3.16: Year-wise Additional Capitalisation already approved by the Commission from FY 2007-08 to FY 2015-16 for MB-II LHP (Rs. Crore)
Financial Year Approved including de-capitalization
2007-08 0.09
2008-09 10.26
2009-10 8.14
2010-11 21.70
2011-12 2.01
2012-13 17.90
2013-14 35.32
2014-15 36.77
2015-16 127.24
Total 259.44
Based on the above opening GFA approved for FY 2016-17 for MB-II LHP is presented
below:
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
36 Uttarakhand Electricity Regulatory Commission
Table 3.17: Opening GFA for MB-II as considered by the Commission for FY 2016-17 (Rs. Crore) Particulars Amount
Capital Cost 1885.50
Additional Capitalization from FY 2007-08 to FY 2015-16 259.44
Opening GFA for FY 2016-17 2144.94
The Petitioner for MB-II LHP has claimed additional capitalization for FY 2016-17 as given in
Table below:
Table 3.18: Additional Capitalisation claimed by the Petitioner for FY 2016-17 (Rs. Crore)
Components Additional
Capitalisation De-
capitalization Net Additional Capitalisation
Land 0.02 0.00 0.02
Building 2.84 0.06 2.79
Hydraulic works 46.59 0.00 46.59
Major Civil Works 0.01 0.00 0.01
Plant & Machinery 5.55 0.01 5.55
Vehicles 0.03 0.00 0.03
Furniture and Fixtures 0.10 0.05 0.05
Office Equipment & Others 0.31 0.00 0.31
Total 55.45 0.11 55.34
It is observed that the Commission in its Order dated 05.04.2016 had not considered any
additional capitalisation for FY 2016-17, stating that the same is to be considered at the time of
truing-up of tariff. However, UJVN Ltd. in this instant Petition has submitted the additional
capitalisation of Rs. 55.34 Crore for FY 2016-17. UJVN Ltd. submitted that out of the capital
expenditure of Rs. 55.34 Crore, Rs 26.99 Crore was claimed towards the balance capital works of
MB-II LHP and Rs. 17.56 Crore corresponds to the IDC of Balance capitalization works capitalized
and Rs. 10.79 Crore for other additional capitalization for MB-II LHP. UJVN Ltd. further submitted
that the capital expenditure has been incurred on the basis of actual requirement.
The Commission sought detailed breakup of the Balance capitalisation and additional
capitalisation allowed and actually incurred till date and that projected till FY 2018-19. The same
was submitted by UJVN Ltd. Further, the Commission sought sub-head-wise details of expenses
incurred or proposed to be incurred on works covered under Balance Capital Petition for MB-II. In
response, the Petitioner vide letter dated 02.02.2018 submitted the sub-head-wise details of expenses
of Rs. 26.99 Crore for FY 2016-17 and expenses for FY 2017-18 & FY 2018-19 for works covered
under Balance Capital Petition as given in Annexure 6 of this Order.
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 37
The Commission observed that UJVN Ltd. with regard to MB-II has claimed balance capital
works of Rs. 217.05 Crore till FY 2016-17 as against Rs. 211.72 Crore approved in the Tariff Order
dated 05.04.2016. The Commission directed UJVN Ltd. to submit proper justification towards
increase in the balance capital expenditure works along with the status of balance capital works
completed and submit its revised claim of add cap for FY 2016-17 onwards. In response, UJVN Ltd.
submitted that after reconciliation the expenditure incurred up to 31.03.2016 is Rs. 190.06 Crore
against balance capital works of MB-II HEP. The Petitioner in Tariff order dated 29.03.2017 has
revised the expenditure on Balance Capital work estimated to Rs. 238.62 Crore up to FY 2018-19.
The Petitioner in the instant Petition has again revised the expenditure on Balance Capital works
estimated to Rs. 252.07 Crore. The actual capital expenditure for FY 2016-17 against Balance Capital
works is Rs. 26.99 Crore.
The Commission in its Tariff Order dated 05.04.2016 had allowed expenses of Rs. 211.72
Crore, however, the Petitioner in its Tariff Petition for FY 2017-18 had revised the projection to Rs.
238.62 Crore to be incurred till FY 2018-19. The Petitioner in the current Tariff Petition has again
revised the projection to Rs. 252.07 Crore till FY 2018-19. The Commission has observed that the
Petitioner has incurred Rs. 217.05 Crore (i.e. Rs. 190.06 Crore upto 31.03.2016 + Rs. 26.99 Crore in
FY 2016-17) upto FY 2016-17 and is projecting to incur total Rs. 252.07 Crore by FY 2018-19 against
balance capital works of MB-II HEP. The Commission is of the view that the Petitioner is adopting a
callous approach and is deferring important works like testing of surge shaft, which is certainly not
in the interest of UJVN Ltd. Therefore, the Commission has taken a serious note of the same and
directs the Petitioner to complete all the works covered in the Petition of balance capital works
of MB-II HEP latest by 31.03.2019, beyond which no expense (including IDC) in this regard
would be allowed.
The Commission observed that the Petitioner has received an amount of Rs. 125.52 Cr. as
grant from GoI through GoU under disaster during 2013 for MB-II Project. In this regard, the
Commission directs the Petitioner to submit the details of Financial Year-wise expenditures
made against this amount for respective works at the time of filing of true-up/ARR for FY 2017-
18.
Further, the Commission sought detailed breakup of the additional capitalisation and R&M
expenses for FY 2016-17 for MB-II from UJVN Ltd., which was submitted by UJVN Ltd. Further, the
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
38 Uttarakhand Electricity Regulatory Commission
Commission sought details of IDC corresponding to Balance Capital Expenditure of MB-II. UJVN
Ltd. vide letter dated 15.01.2018 has given detail of IDC, however, the same does not provide
proper computation of IDC. Therefore, the Commission vide its letter dated 08.02.2018 directed the
Petitioner to provide the detail of quarter-wise IDC in MS Excel with proper links. In response, the
Petitioner has submitted the quarter-wise IDC regarding balance capital works of MB-II generating
station, however, the Petitioner did not submit the quarter-wise actual phasing of expenditure along
with the funding of such expenditure. Therefore, the Commission has provisionally considered the
IDC of Rs. 17.56 Crore as claimed by the Petitioner.
The Commission has gone through the submissions of the Petitioner. As the Balance Capital
works are under progress and yet to be finalised by FY 2018-19, the Commission has allowed the
additional capitalisation of Rs. 26.99 Crore claimed by the Petitioner for Balance Capital Works and
provisionally allows IDC corresponding to the balance capital works as Rs. 17.56 Crore.
Besides above, UJVN Ltd. has claimed an additional capitalization amounting to Rs. 6.67
Crore on account of other capital works including balance capital works for FY 2016-17.
Further, the Commission observed that the Petitioner had claimed some of the expenses
totalling to Rs. 3.96 Crore towards adjustment of debtors with the approval of its Board of Directors
(BoD) concurred in 60th BoD meeting (Agenda No. 60.16). In this regard, the Commission sought the
copy of such BoD meeting. In response, the Petitioner vide its letter dated 22.12.2017 submitted the
copy of its 60th BoD meeting dated 07.09.2011. From the said submission, the Commission further
observed that the construction of MB-II project started in 1980 and the Irrigation Department of
Uttar Pradesh had signed 4 major civil contracts with 4 contractors (viz. M/s NPCC, M/s Hydel
Construction Company, M/s Raj Kumar Construction Company and M/s Continental Construction
Company) and as per the terms of original contracts electricity to the contractors was to be made
available at the rate of 44 paise/Unit. As the project work progressed at slow pace due to lack of
financial resources, the work came to halt after 1989-90 and finally stopped in 1992. After the
creation of Uttarakhand State in 2002, the project was restarted and the old contracts were renewed.
In supplementary agreements, the rate of electricity was fixed at Rs. 1 per kWh for all the contracts
except M/s Shring Construction Company (earlier known as M/s Raj Kumar Construction
Company), in which case the original contract continued. UPJVN Ltd. raised bills at the rate of Rs.
1/kWh for all the four contractors. However, M/s Shring Construction Company paid those bills at
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 39
the rate of 0.44 paise/kWh. The old disputed electricity arrears from 1992 to July 2002 amounted to
Rs. 4.72 Crore and the same was pending with the four civil contractors engaged by Irrigation
Department in MB-II Project due to lack of decision in view of contract clause. As per the
supplementary agreement all outstanding issues/claims pertaining to the period upto 2002 were to
be solved through DRB and no recovery were to be made through RA bills of supplementary
agreement. Accordingly, Irrigation Department had not made any recovery from contractors nor
was the DRB formed to solve the dispute. After the commissioning of MB-II Project on 15.03.2008,
the four major civil contracts were handed over by Uttarakhand Irrigation Department to UJVN
Ltd. for finalisation.
The Commission has gone through the submission of the Petitioner. The Commission
observes that the Petitioner had raised the issue of above dispute in its 60th BOD meeting held on
September 07, 2011, where it was decided as under:
“In view of finalization of above contracts it is proposed that the bills in question be withdrawn and
corrected bills as per terms of contracts served to the contractors. The balance expenditure shall
automatically be absorbed by UJVN Ltd. and booked on MB-II Project Head as purchase of power.”
The Commission observes that the Petitioner in its internal audit for FY 2012-13 was able to
book the dispute of outstanding claims of Rs. 3.96 Crore from the four civil contractors pertaining to
the period upto 2002. Though the matter was raised in FY 2012-13, it is observed that said issue was
in the knowledge of the Board of the Petitioner’s company as is evident from the minutes of the
Company’s 60th Board Meeting held on 07.09.2011. Also the query in this regard was raised by the
CAG auditors in FY 2012-13. The Commission is of the view that the Petitioner could have brought
this matter at the time of truing-up of FY 2012-13 itself, while claiming the capital cost of its MB-II
project and if for any reasons was not able to claim the same at that time, then it should have
brought the same for the consideration of the Commission while claiming the amount of balance
capital works in FY 2016-17 with respect to the project. It appears that the Petitioner has shown a
very lackadaisical approach in dealing with this issue in view of the fact that it took them 5 long
years to settle the issue. However, the Commission taking into cognisance that such expenses are
legitimate and were incurred by the Petitioner during the construction of the LHP, allows the said
amount of Rs. 3.96 Crore as an additional capitalisation in FY 2016-17 for MB-II HEP of the
Petitioner as an exceptional case, however, no such expenditure shall be allowed in future. The
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
40 Uttarakhand Electricity Regulatory Commission
Petitioner is directed to take a note of the same and refrain from claiming such amounts in
future.
The Commission while going through the submissions observed that the Petitioner had
included some of the expenses of R&M nature under additional capitalization. The Commission
has, accordingly, deducted expenses of R&M nature amounting to Rs. 0.264 Crore from additional
capital expenditure and considered the same as R&M expense. Similarly some of the expenses of
A&G nature were booked under additional capital expenditure. Therefore, the Commission has
deducted the same from additional capitalization amounting to Rs. 0.004 Crore and has considered
the same in A&G expense.
The Commission has, accordingly, considered the above additional capitalisation and
approves the additional capitalisation for FY 2016-17 for MB-II LHP as submitted below:
Table 3.19: Item-wise details of Additional Capitalisation approved by the Commission for MB-II FY 2016-17 (Rs. Crore)
Particulars
Additional Capital
Expenditure Claimed
Additional Capital
Expenditure Approved
Remarks
Balance capital works 26.99 26.99 Allowed after prudence check
IDC of Balance capitalization works capitalized
17.56 17.56 Provisionally allowed.
Other capital works 6.67 6.67 Allowed after prudence check
Adjustment of debtors with the approval of 60th BoD meeting (Agenda No. 60.16)
3.96 3.96 Allowed after prudence check
Expenses of R&M nature 0.26 0.00 Shifted such expenses from additional capital expenditure to R&M expenses
Expenses of A&G nature 0.004 0.00 Shifted such expenses from additional capital expenditure to A&G expenses
Less: De-capitalization (0.11) (0.11) Allowed after prudence check
Total 55.34 55.08
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 41
Table 3.20: Asset-wise Additional Capitalization approved by the Commission for FY 2016-17 (Rs. Crore)
Particulars of Assets
Approved in Order dated
29.03.2017 for FY 2016-17
Approved now after Truing-up for FY 2016-17
Additional Capitalization
De-capitalization
Net Additional Capitalization
Land 0.02 0.02 0.00 0.02
Building 2.18 2.84 (0.06) 2.79
Hydraulic works 0.00 46.59 0.00 46.59
Major Civil Works 14.29 0.01 0.00 0.01
Plant & Machinery 5.70 5.31 (0.01) 5.31
Vehicles 0.15 0.03 0.00 0.03
Furniture and Fixtures 0.04 0.09 (0.05) 0.05
Office Equipment & Other Items
0.23 0.29 0.00 0.29
Total 22.62 55.19 (0.11) 55.08
C. Observation on abnormal increase in Additional Capital Expenditure in certain LHPs
While examining the additional capitalization details for FY 2016-17, it is observed that there
has been a substantial increase in the expenditures claimed by the Petitioner against additional
capitalization w.r.t. the claims made during previous years specifically, in the additional
capitalization claims of the LHPs of Yamuna Valley, where out of 5 plants, RMU in two plants
namely Dhalipur & Dhakrani has already been proposed. Accordingly, the Commission decided to
scrutinize the expenditures and also conducted a ‘Sample Study’ of procurement process being
followed by the respective cost centres namely Chibro, Khodri & PDD-Dakpathar for FY 2016-17. In
this regard, based on the submission made by the Petitioner vide letter no. 654 dated 09.02.2018,
following has been observed:
Generally procurement has been done on single quotation basis defeating the basic purpose
of discovering the competitive prices for the items/works being procured viz.
Illustration:
Table 3.21: Procurements done on single quotation basis (In Rs. Lakh) S.
No. HEP Work Supplier/Contractor Amount
1 Chibro Rehabilitation & Retrofitting of FDA system of fire protection system of Cable Gallery of Chibro Power Station
M/s Tri-parulex fire protection system, Ghaziabad
68.52
2 Chibro Electrical Panels retrofitting M/s Keymech Technologies, Haridwar
49.29
3 Chibro Procurement of Alfa Laval make centrifuging machine, Model -MAB103 (1300 LPH)
M/s Multi Industrial Product, Kashipur
16.62
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
42 Uttarakhand Electricity Regulatory Commission
Table 3.21: Procurements done on single quotation basis (In Rs. Lakh) S.
No. HEP Work Supplier/Contractor Amount
4 Chibro Supply installation, Testing and Commissioning of General Purpose Air Compressor
M/s Shree Services, Nashik 24.10
5 Dakpathar Supply & Retrofitting of C&S make AH/AHA type of ACB's with micropro 4.1 series in LT panel of substation no. 1 & Lakhwar Pump House
M/s Mittal Machines (P) Ltd., Saharanpur
55.00
6 Dakpathar Supply & Retrofitting of C&S make AH/AHA type ACB's with micropro 4.1 series in LT panel of substation no. 3
M/s Mittal Machines (P) Ltd., Saharanpur
33.00
7 Dakpathar Supply & Retrofitting of BIECCO LAWRIE make VCB's with all accessories for 33/11 kV substation at Chibro
M/s Mittal Machines (P) Ltd., Saharanpur
215.00
8 Khodri Supply and retrofitting of existing Seimens make LVACB panels of Unit Auxiliary Board and station Board at Khodri Power Station
M/s Keymech Technologies, Haridwar
53.18
9 Khodri Water Mist Fire Extinguisher M/s Cease Fire, Ddun 14.28
10 Khodri Retrofitting and re-instrumentation of Co2 flooding system for generators of Khodri Power Station
M/s Tri-parulex, Ghaziabad 57.91
Procurement of various items/works has been done on proprietary basis claiming the
works/items as that of proprietary nature even when the items/works do not qualify for the
proprietary nature in accordance with the procurement rules of GoU, due to which competitive
bidding for such procurements could not take place and the procurement was done on the
monopoly prices offered by the firms/channel partners viz.
Illustration:
Table 3.22: Procurements done on proprietary basis S.
No. HEP Work Supplier/Contractor
Amount(in Rs. Lakh)
Remarks
1 Chibro
Rehabilitation & Retrofitting of FDA system of fire protection system of Cable Gallery of Chibro Power Station
M/s Tri-parulex fire protection system, Ghaziabad
68.52
Since in the order/agreement the word ‘Equivalent’ has been mentioned in the Make column which contradicts the proprietary nature of the items/works.
2 Dakpathar
Supply & Retrofitting of C&S make AH/AHA type of ACB's with micropro 4.1 series in LT panel of substation no. 1 & Lakhwar Pump House
M/s Mittal Machines (P) Ltd., Saharanpur
55.00
Retrofitting Order was issued straight away on budgetary offer, generally the prices offered in budgetary proposal remain much higher than the actual prices/market rates.
3 Dakpathar
Supply & Retrofitting of C&S make AH/AHA type ACB's with micropro 4.1 series in LT panel of substation no. 3
M/s Mittal Machines (P) Ltd., Saharanpur
33.00
Retrofitting
Procurement done on single quotation basis considering proprietary nature item of C&S make.
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 43
Table 3.22: Procurements done on proprietary basis S.
No. HEP Work Supplier/Contractor
Amount(in Rs. Lakh)
Remarks
4 Dakpathar
Supply & Retrofitting of BIECCO LAWRIE make VCB's with all accessories for 33/11 kV substation at Chibro
M/s Mittal Machines (P) Ltd., Saharanpur
215.00
Retrofitting
Procurement done on single quotation basis considering proprietary nature item of Biecco Lawrie make VCB's.
5 Khodri
Supply and retrofitting of existing Seimens make LVACB panels of Unit Auxiliary Board and station Board at Khodri Power Station
M/s Keymech Technologies, Haridwar
53.18
Retrofitting Offer was taken from M/s Siemens. Order on single quotation and proprietary basis.
6 Khodri
Retrofitting and re-instrumentation of Co2 flooding system for generators of Khodri Power Station
M/s Tri-parulex, Ghaziabad
57.91
Retrofitting
Offer was taken from M/s Surex authorised dealer is M/s Tri-parulex on single quotation, on proprietary basis. As per commercial terms 100% advance for supply with taxes of amount Rs 53 Lakhs was given.
Besides above, in certain cases the estimates framed in the cost centers for supply/works
appears to be exorbitantly higher than the prevailing market rates/Schedule of Rates (SoR) of other
power sector utilities of the State and bids were invited on such exaggerated estimates resulting in
over pricing by the bidders.
Illustration:
Table 3.23: Works where procurement done on exorbitantly higher rates than the prevailing market rates/Schedule of Rates (SoR) of the Power Sector Utilities in the State
S. No.
HEP Work Contractor Amount(in Rs. Lakh)
Remarks
1 Dakpathar Renovation & Modernization of 33/11 kV substation & DPH Khodri
M/s Social Mindlabs, New Delhi
588.00
The prices offered in the order appear to be on very higher side specially for breakers, DG sets, 11 kV & 33 kV Cables in comparison to the similar items procured in UPCL.
2 Dakpathar
Supply & Retrofitting of BIECCO LAWRIE make VCB's with all accessories for 33/11 kV substation at Chibro
M/s Mittal Machines (P) Ltd., Saharanpur
215.00
1. Cost of work appears to be on a very higher side as it is renovation work done at 33/11 kV S/s only comprising of replacement of breakers, Cables, cable tray etc. 2. Cost of breakers, cables appears to be on a very higher side. 3. Total work of proprietary nature of procurement of 11 kV breakers is approx. 1 Cr. which is on a very higher side.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
44 Uttarakhand Electricity Regulatory Commission
Table 3.23: Works where procurement done on exorbitantly higher rates than the prevailing market rates/Schedule of Rates (SoR) of the Power Sector Utilities in the State
S. No.
HEP Work Contractor Amount(in Rs. Lakh)
Remarks
3 Dakpathar
Additional Qty. in agreement no. 18 dt. 21.12.2016 for Renovation &Modernization of 33/11 kV substation & DPH Khodri
M/s Social Mindlabs, New Delhi
60.00
Repeat Order in continuation to order at S. No. 1 above. Procurement was done by UJVN Ltd. on 3 times higher prices than that of the prices of SoR of UPCL.
It has also been observed that there is a huge variation in prices in similar items of capital
nature procured at different HEPs during the same Financial Year.
Illustration:
Table 3.24: Works with large variation in prices within HEPs of UJVN Ltd. S.
No. HEP Work
Supplier/ Contractor
Amount (in Rs. Lakh)
Remarks
1 Chibro
Supply, installation, testing and commissioning of 500 kVA, Silent DG set for Chibro Power Station
M/s Shree Services, Nashik
51.04 (the hard cost of DG set without tax in this case is Rs. 35.75 Lakh)
It is observed that DG set of similar rating was purchased at a cost of approx. Rs. 62 Lakh without taxes and duties in Dakpathar (mentioned at S. No. 2 below)
2 Dakpathar Renovation & Modernization of 33/11 kV substation & DPH Khodri
M/s Social Mindlabs, New Delhi
588.00 (the hard cost (without taxes & duties of DG set is approx. Rs. 62 Lakh)
As discussed in S. No. 1 above, the prices offered in the order appear to be on a very higher side specially the prices of breakers, DG sets, 11 kV & 33 kV Cables.
Based on the observations made above, the Commission is of the view that such practices
prevailing in UJVN Ltd. are responsible for the substantial increase in expenditures incurred against
the additional capitalization. As the prices so discovered are on the higher side as that of the
prevailing market rates/schedule of rates of power sector utilities in the State (UPCL & PTCUL). It
is known that any additional loading due to such irregularities ultimately leads to increase in
consumer tariff, hence, immediate corrective actions are required for streamlining the procurement
process being practised in the respective cost centres of the Petitioner to make it economical.
In this regard, the Commission directs the Petitioner to:
(i) Frame its Schedule of Rates (SoR) for common capital items inline with the SoR of
other power utilities in the State.
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 45
(ii) Procure the common items of capital nature through Centralised Procurement
System and strictly adhere to the procurement Rules of the GoU/ Rules framed by
the Petitioner (if any).
(iii) Review the working of its internal audit system specifically for checking the
anomalies in procurements and take corrective action for strengthening the internal
audit wing.
An action taken report on the above is required to be submitted to the Commission latest
by 30.06.2018.
3.1.2.4 Depreciation
A. Old Nine Large Generating Stations
Regulation 28 of the UERC Tariff Regulations, 2015 specifies as follows:
“28. Depreciation
(1)The value base for the purpose of depreciation shall be the capital cost of the asset admitted by the
Commission.
Provided that depreciation shall not be allowed on assets funded through Consumer Contribution and
Capital Subsidies/Grants.
(2) The salvage value of the asset shall be considered as 10% and depreciation shall be allowed up to
maximum of 90% of the capital cost of the asset.
...
(4) Depreciation shall be calculated annually based on Straight Line Method and at rates specified in
Appendix - II to these Regulations.
...”
The Petitioner has submitted that while computing the depreciation, it has considered 90%
of the opening GFA as the permissible limit. Accordingly, for the plants where accumulated
depreciation on the approved opening GFA has already reached 90%, such as Khatima, Dhakrani,
Dhalipur, Ramganga, Kulhal, Chilla and Chibro, the Petitioner has not claimed any depreciation.
The Petitioner has claimed depreciation on the opening GFA only for the remaining two plants, i.e.
Khodri and Maneri Bhali-I.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
46 Uttarakhand Electricity Regulatory Commission
The Petitioner submitted that it has computed depreciation on the basis of rates considered
by the Commission in its previous Tariff Orders. UJVN Ltd. submitted that it has considered
depreciation till FY 2012-13 at the rate of 2.38% on the opening GFA. Thereafter, the Petitioner has
spread the remaining depreciable value over the balance useful life. With regard to the depreciation
on additional capitalization, the Petitioner has computed depreciation for different class of assets in
accordance with the rates specified in UERC Tariff Regulations, 2004 till FY 2012-13, UERC Tariff
Regulations, 2011 from 01.04.2013 till 31.3.2016 and UERC Tariff Regulations, 2015 from 1.4.2016.
With regard to the opening GFA as on January, 2000, the Commission has computed
depreciation in accordance with the UERC Tariff Regulations, 2015. All the 9 LHPs are over 12 years
old and 7 out of 9 stations have depreciated by 90% of the original cost. Depreciation allowed for
Khodri and MB-I LHPs have not reached 90% till FY 2016-17, and hence, the Commission has
computed the accumulated depreciation on opening GFA till 01.04.2016 to determine the remaining
depreciable value for each LHP. The Commission for computing the accumulated depreciation till
31.03.2013 has considered the depreciation rate of 2.38% as considered in previous Tariff Orders.
Further, in accordance with UERC Tariff Regulations, 2011 & UERC Tariff Regulations, 2015 and
considering the life of 35 years from the CoD, the Commission has equally divided the remaining
depreciable value as on 01.04.2016 on the remaining useful life of each LHP.
As regards the depreciation computation on the asset added during the period from FY
2001-02 to FY 2015-16, the Commission has computed the depreciation in accordance with the
provisions of UERC Tariff Regulations, 2011. The Commission has computed the balance
depreciable value for assets added in each year after January, 2000 by deducting the cumulative
depreciation as admitted by the Commission upto 31.03.2016 from the gross depreciable value of
the assets. The Commission, further, computed the difference between the cumulative depreciation
as on 31.03.2016 and the depreciation so arrived at by applying the depreciation rates as specified in
UERC Tariff Regulations, 2015 corresponding to 12 years. The Commission has spread over the
above difference in the remaining period upto 12 years of such asset addition. Further, in case
where asset life has crossed 12 years from the year of addition, the remaining depreciable value as
on 31st March of the year closing has been spread over the balance life.
As regards the depreciation computation on assets added during FY 2016-17, the
Commission has computed the depreciation by applying the depreciation rates as specified in
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 47
UERC Tariff Regulations, 2015. Based on the above discussed approach, the summary of
depreciation as approved in Order dated 05.04.2016 and as approved now by the Commission for
FY 2016-17 after truing-up is shown in the Table given below:
Table 3.25: Depreciation approved for 9 LHPs after truing-up of FY 2016-17 (Rs. Crore)
Name of the Generating
Stations
On Opening GFA as on 14.01.2000
On Additional Capitalisation upto FY 2015-16
Total Depreciation
Approved in Tariff Order dt. 05.04.2016 for
FY 2016-17
Approved now after
Truing-up for FY 2016-17
Approved in Tariff Order dt. 05.04.2016 for
FY 2016-17
Approved now after
Truing-up for FY 2016-17
Approved in Tariff Order dt. 05.04.2016 for
FY 2016-17
Claimed by the Petitioner in FY 2016-17
Approved now after
Truing-up for FY 2016-17
Dhakrani 0.00 0.00 0.19 0.19 0.19 0.18 0.19
Dhalipur 0.00 0.00 0.29 0.30 0.29 0.30 0.30
Chibro 0.00 0.00 1.27 1.44 1.27 1.46 1.44
Khodri 0.59 0.59 0.73 0.76 1.32 1.36 1.35
Kulhal 0.00 0.00 0.17 0.17 0.17 0.17 0.17
Ramganga 0.00 0.00 0.31 0.31 0.31 0.32 0.31
Chilla 0.00 0.00 0.93 1.13 0.93 2.17 1.13
MB-I 2.53 2.58 1.70 1.57 4.23 4.55 4.15
Khatima 0.00 0.00 2.35 2.95 2.35 2.97 2.95
Total 3.12 3.17 7.94 8.81 11.05 13.47 11.98
B. Maneri Bhali-II
As discussed earlier, the Commission has worked out the additional capitalization for FY
2016-17 for MB-II Plant. Accordingly, the Commission has computed the depreciation considering
the Capital Cost approved as on CoD of the Project and year-wise additional capitalisation
approved by the Commission upto FY 2015-16.
The Commission for computing the depreciation for FY 2016-17 in accordance with the
UERC Tariff Regulations, 2015 has computed the balance depreciable value for MB-II by deducting
the cumulative depreciation as admitted by the Commission upto 31.03.2016 from the gross
depreciable value of the assets. The Commission, further, computed the difference between the
cumulative depreciation as on 31.03.2016 and the depreciation so arrived at by applying the
depreciation rates as specified in UERC Tariff Regulations, 2015 corresponding to 12 years. The
Commission has spread the above difference in the remaining period upto 12 years from CoD of
MB-II.
In line with the above approach, the Commission has computed the depreciation for FY
2016-17 for MB-II on the approved capital cost as on CoD of Rs. 1885.50 Crore along with additional
capitalisation approved upto FY 2015-16. Accordingly, the Commission in this Order has trued-up
the depreciation for FY 2016-17 as follows:
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
48 Uttarakhand Electricity Regulatory Commission
Table 3.26: Revised Depreciation for MB-II for FY 2016-17 (Rs. Crore)
Particulars Approved in Tariff Order
dated 05.04.2016 for FY 2016-17 Claimed
Approved after truing-up
FY 2016-17 58.81 67.85 60.13
3.1.2.5 Return on Equity (RoE)
Regulation 26 of the UERC Tariff Regulations, 2015 specifies as follows:
“26. Return on Equity
(1) Return on equity shall be computed on the equity base determined in accordance with
Regulation 24.
Provided that, Return on Equity shall be allowed on amount of allowed equity capital for the
assets put to use at the commencement of each financial year.
(2) Return on equity shall be computed on at the base rate of 15.5% for thermal generating
stations, Transmission Licensee, SLDC and run of the river hydro generating station and at the
base rate of 16.50% for the storage type hydro generating stations and run of river generating
station with pondage and Distribution Licensee on a post-tax basis.
...”
In the previous Tariff Orders, pending finalisation of the Transfer Scheme of the Petitioner,
the Commission had allowed RoE on the provisional value of the opening equity of Rs. 151.19 Crore
in accordance with the directions of the Hon’ble Appellate Tribunal for Electricity issued in the
Order dated 14.09.2006 (Appeal No. 189 of 2005), and detailed in the Commission’s Order dated
14.03.2007. As regards RoE on additional Capitalisation, the Commission has considered a
normative equity of 30% where entire financing has been done through internal resources and on
actual basis in other cases subject to a ceiling of 30% as specified in the UERC Tariff Regulations,
2015.
Further, a de-capitalisation of Rs. 2.03 Crore in the year FY 2014- 15 in Khatima LHP was
considered, accordingly, the same was deducted from the original GFA resulting in reduction in the
Original capital cost as on 01.04.2015. Due to de-capitalisation, the Commission has reduced the
30% of equity of the de-capitalised amount from the equity infused in the original capital cost and
has thus computed RoE on Rs. 150.58 Crore instead of the earlier amount of Rs. 151.19 Crore.
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 49
The Petitioner has submitted that it has claimed RoE in accordance with the aforesaid UERC
Tariff Regulations, 2015 at the rate of 16.50% for Chibro, Khodri, Ramganga & MB-I and at the rate
of 15.50% for Dhakrani, Dhalipur, Kulhal, Chilla & Khatima on post tax basis. The Petitioner further
submitted that it may be allowed to recover Income Tax of Rs. 7.92 Crore as per Regulations 34 of
UERC Tariff Regulations, 2015 which stipulates as follows:
“34. Tax on Income
Income Tax, if any, on the income stream of the regulated business of Generating Companies,
Transmission Licensees, Distribution Licensees and SLDC shall be reimbursed to the Generating
Companies, Transmission Licensees, Distribution Licensees and SLDC as per actual income tax paid,
based on the documentary evidence submitted at the time of truing up of each year of the Control Period,
subject to the prudence check.”
In this regard, the Petitioner has submitted the copy of certificates issued by the Chartered
Accountant, M/s DSM & Associates certifying that the Petitioner has paid Rs. 7.92 Crore as income
tax in respect of sale of energy to Uttarakhand Power Corporation Ltd. and Himachal Pradesh State
Electricity Board as given below:
Table 3.27: Income Tax as claimed by the Petitioner for 9 LHPs (Rs. Crore) Name of the
Generating Stations Income Tax in respect of sale
of energy to UPCL Income Tax in respect of sale of
energy to HPSEB Total Income
Tax
Dhakrani 0.21 0.07 0.28
Dhalipur 0.32 0.11 0.43
Chibro 1.50 0.50 2.00
Khodri 0.75 0.25 1.00
Kulhal 0.20 0.05 0.25
Ramganga 1.65 - 1.65
Chilla 1.20 - 1.20
MB-I 0.75 - 0.75
Khatima 0.35 - 0.35
Total 6.94 0.98 7.92
The Commission has allowed RoE at the rate of 16.50% for Chibro, Khodri, Ramganga &
MB-I and at the rate of 15.50% for Dhakrani, Dhalipur, Kulhal, Chilla & Khatima as per Regulation
26 of UERC Tariff Regulations, 2015. Further, with regard to recovery of income tax paid, the
Commission is of the view that the Regulation 34 of UERC Tariff Regulations, 2015 allows recovery
of actual tax paid subject to submission of documentary proof. Therefore, the Commission has
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
50 Uttarakhand Electricity Regulatory Commission
allowed the Petitioner to recover actual paid income tax separately from its beneficiaries in
accordance with the Regulation 34 of the UERC Tariff Regulations, 2015.
As the Transfer Scheme is yet to be finalized, the Commission is provisionally allowing a
return on normative equity at the rate of 16.50% for Chibro, Khodri, Ramganga & MB-I and at the
rate of 15.50% for Dhakrani, Dhalipur, Kulhal, Chilla & Khatima in accordance with the provisions
of UERC Tariff Regulations, 2015. The summary of the Return on Equity approved for 9 LHPs for
FY 2016-17 is shown in the Table given below:
Table 3.28: Equity and Return on Equity for Nine Old LHPs for FY 2016-17 (Rs. Crore)
Name of the Generating
Station
RoE approved in Tariff Order dated 05.04.2016 for FY 2016-17
Claimed by the Petitioner
Approved after Truing-up for FY 2016-17
On Transferred
Asset
On Additional Capitalisation
RoE Opening
Equity RoE
On Transferred Asset as on Jan 14, 2000
On Additional Capitalisation upto
FY 2015-16 Total RoE
Normative Equity
RoE Opening
Equity RoE
Dhakrani 0.58 0.13 0.71 4.56 0.71 3.72 0.58 0.84 0.13 0.71
Dhalipur 0.95 0.21 1.16 7.49 1.16 6.11 0.95 1.38 0.21 1.16
Chibro 4.35 1.14 5.49 34.48 5.69 26.37 4.35 7.93 1.31 5.66
Khodri 3.66 0.60 4.26 26.05 4.30 22.19 3.66 3.80 0.63 4.29
Kulhal 0.81 0.12 0.94 6.07 0.94 5.25 0.81 0.82 0.13 0.94
Ramganga 2.48 0.28 2.76 16.72 2.76 15.01 2.48 1.71 0.28 2.76
Chilla 5.81 0.68 6.48 48.92 7.58 37.47 5.81 11.35 1.76 7.57
MB-I 5.43 1.76 7.19 43.77 7.22 32.92 5.43 10.19 1.68 7.11
Khatima 0.33 1.80 2.13 18.99 2.94 1.55 0.24 17.44 2.70 2.94
Total 24.40 6.72 31.12 207.05 33.30 150.58 24.30 55.47 8.83 33.14
B. Maneri Bhali-II
As discussed earlier, the Commission has considered the Capital cost of MB-II project as on
CoD as Rs. 1885.50 Crore as approved by the Commission in Order dated 05.04.2016 and 29.03.2017
and, accordingly, the financing of the project. The relevant para of the Tariff Order dated 05.04.2016
with respect to financing of the capital cost is as extracted below:
“As discussed earlier, the Commission has approved the Capital cost of MB-II project as on COD and,
accordingly, the financing of the project. The Commission has reworked the total equity component as
on COD to Rs. 685.50 Crore. In accordance with the Tariff Regulations, equity in excess of 30% has
to be treated as normative loan. Accordingly, the equity for MB-II LHP as on COD works out to Rs.
565.65 Crore which includes pre-2002 expenses of Rs. 164 Crore, power development fund of Rs.
326.76 Crore and GoU budgetary support of Rs. 74.89 Crore and the balance amount of Rs. 119.85
Crore has been considered as normative loan.”
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 51
Further, as discussed in Tariff Order dated 29.03.2017, the Commission has considered the
funding of the additional capitalisation of Rs. 40.37 Crore for FY 2015-16 as grants and the same has
been continued in FY 2016-17 as the Petitioner has already recovered some amount in this regard
from GoU. Further, the Commission is of the view that in the further tariff proceedings the
Petitioner should provide the details of works undertaken by the approved grant.
Further, as decided in the Tariff Orders dated 05.04.2016 and 29.03.2017, the Commission
has considered equity infusion from FY 2013-14 onwards subject to ceiling limit of 30% towards
funding of additional capitalisation as extracted below:
“With regards to funding of additional capitalisation, the Commission directed the Petitioner to
submit the proof of actual equity infused towards additional capitalisation. The Petitioner in its reply
submitted that it received GoU budgetary support of Rs. 25.56 Crore in FY 2013-14 through three
separate sanctions. The Petitioner submitted the required documentary proof for the same. The
Commission has, accordingly, considered equity infusion from FY 2013-14 subject to ceiling limit of
30% towards funding of additional capitalisation.”
The Commission has not been allowing Return on Equity on funds deployed by the GoU out
of PDF fund for reasons recorded in the previous Tariff Orders. In line with the approach
considered in previous Tariff Orders, the Commission is of the view that unlike other funds,
available with the Government collected, through taxes and duties, PDF is a dedicated fund created
in accordance with the provisions of the PDF Act passed by the GoU and the amount is collected
directly from the consumers through the electricity bills as the same forms part of the power
purchase cost of UPCL which in turn is loaded on to the consumers. PDF Act and Rules made
thereunder, further, clearly indicate that money available in this fund has to be utilized for the
purposes of development of generation and transmission assets.
Thus, the Commission has not deviated from its earlier approach and is of the view that the
money for the purpose of this fund is collected by the State Government through cess imposed on
the electricity generated from old hydro generating stations which are more than 10 years old. The
cost of such cess is further passed on to UPCL which in turn recovers the same from ultimate
consumers of electricity through tariffs. Further, as the Petitioner in this regard has preferred an
Appeal before the Hon’ble APTEL, the Commission is not deviating from its approach as the matter
is sub-judice.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
52 Uttarakhand Electricity Regulatory Commission
The Petitioner has further submitted that it may be allowed to recover Income Tax of Rs. 2.54
Crore as per Regulations 34 of UERC Tariff Regulations, 2015. It has submitted the copy of
certificate issued by the Chartered Accountant, M/s DSM & Associates certifying that the Petitioner
has paid the Rs. 2.54 Crore as income tax in respect of sale of energy to Uttarakhand Power
Corporation Ltd. As discussed above in this regard, the Commission has allowed the Petitioner to
recover actual paid income tax separately from its beneficiaries in accordance with the Regulation
34 of the UERC Tariff Regulations, 2015.
The Commission on account of the financing of the project additional capitalisation for FY
2016-17 has revised the RoE allowed for FY 2016-17 as shown below:
Table 3.29: RoE approved for MB-II for FY 2016-17 (Rs. Crore)
Particulars Approved in MYT Order
for FY 2016-17 dated 05.04.2016
Claimed Approved after truing-up
FY 2016-17 43.63 108.06 46.20
3.1.2.6 Interest on Loans
A. Old Nine Generating Stations
Regulation 27 of the UERC Tariff Regulations, 2015 specifies as follows:
“27. Interest and finance charges on loan capital and on Security Deposit
(1) The loans arrived at in the manner indicated in Regulation 24 shall be considered as gross
normative loan for calculation of interest on loan.
(2) The normative loan outstanding as on 1.4.2016 shall be worked out by deducting the cumulative
repayment as admitted by the Commission up to 31.3.2016 from the gross normative loan.
(3) The repayment for each year of the Control Period shall be deemed to be equal to the depreciation
allowed for that year
...
(5) The rate of interest shall be the weighted average rate of interest calculated on the basis of the
actual loan portfolio of the previous year after providing appropriate accounting adjustment for
interest capitalised:
Provided that if there is no actual loan for a particular year but normative loan is still outstanding,
the last available weighted average rate of interest shall be considered.
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 53
Provided further that if the generating station or the transmission system or the distribution system
or SLDC, as the case may be, does not have actual loan, then the weighted average rate of interest of
the generating company or the Transmission Licensee or the Distribution Licensee or SLDC as a
whole shall be considered.
(6) The interest on loan shall be calculated on the normative average loan of the year by applying the
weighted average rate of interest.
…”
The Petitioner submitted that as per the provisions of Regulation 24 of UERC Tariff
Regulations, 2015, interest on normative debt has been considered on the value equivalent to 70% of
additional capitalisation only.
Further, the Petitioner submitted that the rate of interest has been considered as the
weighted average rate of interest for FY 2016-17 and the repayment has been considered as equal to
the depreciation claimed for the year. Further, the Commission sought details of quarter-wise actual
loan repayment, interest paid towards existing loans along with interest refund received for FY
2016-17 for the 10 LHPs and the same was submitted by the Petitioner.
For the purpose of truing-up and computing the interest expenses for FY 2016-17, the
Commission has determined the normative loan in accordance with the UERC Tariff Regulations,
2015. The Commission, in accordance with UERC Tariff Regulations, 2015 has computed the
weighted average interest rate based on the outstanding loans for UJVN Ltd. except for loans taken
for new projects that are yet to achieve CoD. The interest rate based on the above works out to
11.42% in case of Khatima LHP and 10.07% for other 8 LHPs. The Commission has, accordingly,
considered the above mentioned interest rates for computing the interest expenses for 9 LHPs.
Based on the above considerations, the Commission has approved interest on loan based on
the average of opening and closing loans for 9 LHPs for FY 2016-17 after excluding the loan
corresponding to Additional Capitalisation during the year as the practice of the Petitioner is to
capitalise the assets at the end of the year. The same is shown in Table below:
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
54 Uttarakhand Electricity Regulatory Commission
Table 3.30:Interest on Loan for Nine Old LHPs for FY 2016-17 (Rs. Crore)
Name of the Generating Station
Approved in MYT Order dt. 05.04.2016
Interest Claimed
Approved after Truing-up
Opening Loan
Closing Loan
Interest
Dhakrani 0.05 0.31 0.53 0.34 0.04
Dhalipur 0.06 0.26 0.94 0.00 0.05
Chibro 1.20 1.85 12.81 11.37 1.22
Khodri 0.10 0.46 1.95 0.60 0.13
Kulhal 0.06 0.14 0.66 0.49 0.06
Ramganga 0.16 0.19 1.47 1.16 0.13
Chilla 0.01 1.99 16.44 15.31 1.60
MB-I 0.84 0.75 8.06 3.71 0.59
Khatima 3.45 8.21 39.45 36.50 4.34
Total 5.91 14.15 82.31 69.48 8.16
B. Maneri Bhali-II
The Commission has considered the Capital Cost of Maneri Bhali-II as on CoD and the
financing thereof as approved in Tariff Orders dated 05.04.2016 and 29.03.2017. The Commission
has considered the equity in excess of 30% of the capital cost of MB-II as normative loan which
works out to Rs. 119.85 Crore in addition to PFC loan of Rs. 1200 Crore.
Further, the Commission sought details of interest refund/rebate received on loans
pertaining to MB-II LHP for FY 2016-17 and the same was submitted by UJVN Ltd.
In case of MB-II station as the actual loan has been availed for the project, therefore, the
interest has been computed on the basis of these loans availed for the project. For calculating the
interest expense for FY 2016-17, the Commission has considered the interest rate of 10.98% for MB-II
LHP. The Commission has adjusted the yearly interest refunds received by the Petitioner as done
previously in the Orders dated 05.04.2016 and 29.03.2017. As discussed above, the Commission has
computed the weighted average interest rate of 10.98% based on the outstanding PFC loans and
GoU loans. The Commission for computing interest for MB-II station for FY 2016-17 has considered
the above mentioned interest rate.
The Commission based on the approved capital cost and the opening and closing loan
including the normative loan for MB-II as on 31.03.2017 has computed the interest expenses for FY
2016-17 after excluding the loan corresponding to the additional capitalisation during the year as
the practice of the Petitioner is to capitalise the asset at the end of the year. The Commission, in
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 55
accordance with Regulation 27(3) of UERC Tariff Regulations, 2015 has considered the repayment
for FY 2016-17 equal to the depreciation allowed for that year.
Further, the Commission in its Order dated 22.01.2016 in Misc. Appeal No. 58 of 2015 stated
that the guarantee fee calculation on the basis of opening loan as against closing loan shall be
considered at the time of MYT Petition. The Commission has, therefore, for computing guarantee
fee on PFC loan has considered opening value of loan as against the previous approach of closing
value.
Based on the above considerations and the UERC Tariff Regulations, 2015, the Commission
has calculated the interest expenses for MB-II for FY 2016-17 as shown in the Table below:
Table 3.31: Interest on Loan as approved for MB-II for FY 2016-17 (Rs. Crore)
Particulars Approved in MYT
Order for FY 2016-17 dated 05.04.2016
Claimed Approved after
truing-up
FY 2016-17 86.80 87.88 80.05
3.1.2.7 Operation & Maintenance (O&M) Expenses
3.1.2.7.1 Truing-up of O&M Expenses for FY 2016-17 (Nine Large Generating Stations)
The Petitioner submitted that O&M expenses for FY 2016-17 have been considered as per the
audited accounts. The components of total O&M expenses have been bifurcated into direct and
indirect expenses. Direct expenses have been allocated to respective hydro power project for which
corresponding expenses have been incurred. The Petitioner has allocated indirect expenses as
already detailed earlier in this Order. The Commission, in this regard, has also taken a similar view
on the approach of allocating indirect expenses.
The Petitioner has submitted the actual O&M expenses on the basis of audited accounts for
FY 2016-17. Further, the Petitioner has submitted the separate details of employee, R&M and A&G
expenses.
The Commission has considered the revision in CPI Inflation and WPI Inflation on the basis
of actual data and has computed the O&M expenses on the basis of Regulation 48(2) of UERC Tariff
Regulations, 2015. Accordingly, for arriving at the normative O&M expenses for FY 2016-17, the
Commission has escalated the expenses of FY 2015-16. The Commission for the purpose of
escalation has considered following escalation rates.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
56 Uttarakhand Electricity Regulatory Commission
Table 3.32: Escalation Rates as considered by the Commission
Particulars FY 2016-17
CPI Inflation 7.21%
WPI Inflation 1.83%
Further, for the purpose of arriving at employee expenses for FY 2016-17, the Commission
has considered the value of Growth Factor ‘Gn’ on the basis of actual details of recruitment
provided by UJVN Ltd. Further, the Commission has considered the K factor as approved in the
Order dated 29.03.2017.
3.1.2.7.2 Employee Cost
The Commission has considered the same approach for computation of employee expenses
for FY 2016-17 as considered by it in Tariff Order dated 29.03.2017. The Commission sought for
actual number of employees recruited/retired in FY 2016-17 and the same was submitted by the
Petitioner. Growth Factor ‘Gn’ has been considered as given below:
Table 3.33: Growth Factor ‘Gn’ as considered by the Commission for FY 2016-17
Particulars FY 2016-17
Gn 2.16%
In its MYT Order dated 05.04.2016, the Commission had considered the impact of VII Pay
Commission at the rate of 20% of the approved net employee expenses and had allowed certain
provision to the Petitioner for FY 2016-17 to FY 2018-19. Thereafter, on the basis of the details of the
impact of VII Pay Commission submitted by the Petitioner, the Commission in its Tariff Order
dated 29.03.2017 had revised the impact of pay revision to 15% as against 20% approved by the
Commission in its MYT Order dated 05.04.2016 and directed the Petitioner to maintain separate
details of the amount paid as arrears to its employees on account of implementation of the
recommendations of VII Pay Commission.
The Petitioner in this Tariff Petition has submitted that GoU has not issued the Orders for
implementation of recommendations of VII Pay Commission in FY 2016-17. The Petitioner has
further submitted that the GoU has agreed for implementation of recommendation of seventh Pay
Commission to UJVNL employees, w.e.f. 01.01.2016. Therefore, the Petitioner has made a provision
for such expenses of Rs. 27.06 Crore for 10 LHPs (including SHPs) in its audited accounts for all its
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 57
employees for FY 2016-17 and has considered the impact of Seventh Pay Commission in projections
of the employee expenses for FY 2017-18 and FY 2018-19.
In this regard, the Commission in TVS meeting held on 04.01.2018 asked the Petitioner to
submit the computation for impact of VII Pay Commission. In response, the Petitioner vide its letter
dated 15.01.2018 submitted that the total tentative liability of salary on account of implementation
of VII Pay Commission for FY 2016-17 is Rs. 22.75 Crore and the tentative liability for 15 months
starting from 01.01.2016 to 31.03.2017 is Rs. 27.52 Crore. The Petitioner further submitted that the
amount of other tentative establishment cost like Gratuity etc. is considered as Rs. 4.48 Crore for FY
2016-17 and total tentative liability of salary which has been capitalized for the project under
construction is considered as Rs. 4.93 Crore. Therefore, the Petitioner had made a provision of Rs.
27.06 Crore toward impact of VII Pay Commission for 10 LHPs (including SHPs) in its audited
accounts for all its employees for FY 2016-17. Further, the Commission has observed that generation
incentive has not been claimed by the Petitioner.
From the above submissions, it is observed that as the State Government has not issued the
orders for implementation of the recommendations of VII Pay Commission in FY 2016-17, UJVN
Ltd. has not paid the corresponding amount as arrears to its employees in FY 2016-17. Accordingly,
the Commission in this Tariff Order has not considered any impact of pay revision for FY 2016-17.
The Commission would provide the impact of pay revision on the basis of the actual payments
made.
In view of above, the Commission has approved the employee expenses for FY 2016-17 as
shown in the Table below:
Table 3.34: Employee Expenses approved for FY 2016-17 (Rs. Crore)
Name of the Generating Stations
Approved in Tariff Order dated 05.04.2016
Claimed Approved after
Truing-up as per norms
Dhakrani 11.36 12.30 8.29
Dhalipur 12.73 10.12 12.51
Chibro 40.22 39.99 34.58
Khodri 21.22 19.66 19.10
Kulhal 8.31 6.67 7.37
Ramganga 26.80 27.83 23.20
Chilla 32.91 29.74 25.27
MB-I 25.32 21.91 18.47
Khatima 14.03 11.68 10.27
Total 192.90 179.91 159.07
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
58 Uttarakhand Electricity Regulatory Commission
The employee expenses approved by the Commission for 9 LHPs in this Tariff Order is less
than that approved in the MYT Order on account of non-consideration of VII Pay Commission
arrear and change in Growth Factor and CPI escalation indices.
3.1.2.7.3 Repairs and Maintenance Expenses
The Commission in its MYT Order dated 05.04.2016 has computed the percentage of actual
R&M expenses vis-a-vis actual opening GFA for each year of FY 2012-13 to FY 2014-15 as
considered in its Order dated 29.03.2017. Thereafter, the Commission has considered the average of
such percentages as K factor. The Commission has considered the constant factor ‘K’ as follows:
Table 3.35: K-Factor as considered by the Commission
Station Average of 3 years
Dhakrani 30.84%
Dhalipur 16.06%
Chibro 8.12%
Khodri 3.65%
Kulhal 10.47%
Ramganga 2.70%
Chilla 7.74%
MB-I 7.84%
Khatima 21.75%
Total 8.00%
For computing the R&M expenses for FY 2016-17, the Commission has multiplied the K
Factor as given above with the opening GFA approved for FY 2016-17. The Commission has
considered the average increase in WPI for last three years from FY 2013-14 to FY 2015-16 as 1.83%.
With regards to the generating station undergoing RMU works or planned for RMU works
in the second Control Period the Commission in its Regulation 48(2) of UERC Tariff Regulations,
2015 had stated that for projects whose Renovation and Modernisation works has been carried out,
the R&M expenses for the nth year shall not exceed 2% of the capital cost admitted by the
Commission. Accordingly, as the RMU works for Khatima LHP has been completed in FY 2016-17,
the Commission has considered allowable R&M Expenses for FY 2016-17 equal to 2% of the opening
GFA of FY 2016-17.
Accordingly, the Commission has approved the R&M expenses for FY 2016-17 as shown in
the Table below:
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 59
Table 3.36: R&M Expenses approved for FY 2016-17 (Rs. Crore)
Name of the Generating Stations
Tariff Order dated 05.04.2016 for FY 2016-17
Claimed Approved after Truing-up as per
norms for FY 2016-17
Dhakrani 4.91 6.45 4.78
Dhalipur 4.21 5.49 4.09
Chibro 9.53 6.95 9.50
Khodri 3.31 4.51 3.23
Kulhal 2.22 3.38 2.16
Ramganga 1.58 2.59 1.53
Chilla 11.38 12.08 12.86
MB-I 12.15 10.98 11.65
Khatima 0.98 0.92 1.27
Total 50.27 53.35 51.06
The R&M expenses approved by the Commission for 9 LHPs in this Tariff Order has
increased due to increase in additional capital expenditure from Rs. 47.57 Crore considered in MYT
Order dated 05.04.2016 to Rs. 87.62 Crore for FY 20115-16 approved in Tariff Order dated 29.03.2017
and adjustment on account of decrease in WPI indices from 5.11% considered in MYT Order dated
05.04.2016 to 1.83% approved on actual WPI indices in Tariff Order dated 29.03.2017.
3.1.2.7.4 Administrative & General Expenses
The Commission in its Tariff Order dated 29.03.2017 on approval of APR for FY 2016-17
approved the A&G expenses in accordance with the UERC Tariff Regulations, 2015. The
Commission is considering the same approach for determining the A&G expenses for FY 2016-17.
The Commission observed that there are number of discrepancies in the insurance premium
claimed and the supporting document submitted by UJVN Ltd. for example, at page 34 of reply
dated 22.12.2017 in one of the insurance receipt, UJVN Ltd. has paid an amount of Rs. 2677 for
insuring “Furniture/Fixture/ Fittings /Utensils and machine for ULTRASOUND, Rs. 12,75,000 and
Rs. 1822500 at Clinic used at diagnostic centre” which does not pertain to UJVN Ltd. Further, at
some places there is error in the totalling of the premium amount and it is also observed that
premium amounts for SHPs and other projects (e.g. Asiganga Valley) has been claimed. UJVN Ltd.
in response submitted that this is error apparent and they have informed to the insurance company
regarding the same. Further, the Commission directed UJVN Ltd. to re-verify all the insurance
receipts vis-à-vis its claim and re-submit the same for 9 LHPs & MB-II. The Petitioner in response
has submitted the same. The Petitioner has further submitted that as such insurance receipt was
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
60 Uttarakhand Electricity Regulatory Commission
related to Pathri Power House (solar plant), it has not claimed the above mentioned amounts in this
Tariff Petition. In this regard, the Commission cautions the Petitioner that it should take utmost care
in the matter of insurances as in case of any eventuality, the Petitioner may face difficulties in
insurance claims. Besides this, the Petitioner is also cautioned that it should properly check the
documents prior to submission of the same before the Commission.
The Commission is considering the same approach for determining the A&G expenses for
FY 2016-17. The WPI escalation rate is revised to 1.83% based on the actual values. Accordingly, the
Commission has approved the A&G expenses as shown in the Table below:
Table 3.37: A&G Expenses approved for FY 2016-17 (Rs. Crore)
Name of the Generating Stations
Tariff Order dated 05.04.2016 for FY 2016-17
Claimed Approved after Truing-up as per
norms for FY 2016-17
Dhakrani 1.21 1.85 0.49
Dhalipur 1.44 2.01 0.84
Chibro 4.69 7.47 3.28
Khodri 2.35 4.73 1.47
Kulhal 0.85 1.66 0.41
Ramganga 3.14 5.38 2.30
Chilla 3.65 5.08 2.42
MB-I 2.64 3.26 1.38
Khatima 1.13 1.66 0.43
Total 21.10 33.10 13.03
The A&G expenses approved by the Commission for 9 LHPs in this Tariff Order is lower
than the A&G expenses in MYT Order due to decrease in WPI escalation rate during FY 2016-17
from 5.11% considered in MYT Order dated 05.04.2016 to 1.83% approved on actual WPI indices in
Tariff Order dated 29.03.2017. Further, reduction in A&G expenses is due to change in the base year
for computing A&G expenses from FY 2013-14 (computed as the average of FY 2012-13 to FY 2014-
15) adopted in MYT Order dated 5.04.2016 to FY 2015-16 as considered in Order dated 29.03.2017.
Table 3.38: Normative O&M Expenses as approved for 9 LHPs for FY 2016-17 (Rs. Crore)
Particulars Approved in Tariff Order dated
05.04.2016 Claimed
Normative O&M Expenses
Employee Expenses 192.90 179.91 159.07
R&M Expenses 50.27 53.35 51.06
A&G Expenses 21.10 33.10 13.03
Total O&M 264.27 266.36 223.15
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 61
As per the UERC Tariff Regulations, 2015, O&M Expenses are controllable expenses and
accordingly, the sharing of gains and losses have been carried out for O&M expenses and Interest
on Working Capital.
Further, as discussed in additional capitalisation, the Commission has included the amount
of Rs. 55.25 Lakh towards actual R&M expenses of Kulhal LHP and Rs. 54.58 Lakh towards actual
R&M expenses of Dhalipur LHP. Further, the Commission has transferred some of the expenses
booked as capital expenses to R&M expenses for 9 LHPs amounting to Rs. 14.42 Crore.
Further with regard to the details of R&M expenses for Kulhal LHP submitted by the
Petitioner, the Commission, while checking the vouchers, has observed that there is a double entry
of Rs. 2619123/- in R&M expenses towards Plant & Machinery for re-instrumentation of CO2
Flooding System. In reply, the Petitioner vide its letter dated 02.02.2018 confirmed about such
double entry. Therefore, the Commission has deducted the amount of Rs. 0.26 Crore from R&M
expenses of Kulhal LHP on account of double entry.
Further, the Commission in its Tariff Order dated 29.03.2017, while truing-up for FY 2015-16
had disallowed the provision made by the Petitioner in its books amounting to Rs. 3.21 Crore in
R&M expenses as under:
“... In case of R&M expenses, the Commission from the details submitted by the Petitioner observed
that some entries pertained to provision made by the Petitioner in its books amounting to Rs. 3.21
Crore which is not allowable as per the UERC Tariff Regulations, 2011. The Commission has,
therefore, not considered these amounts as R&M expenses as the same had not been actually paid in
FY 2015-16. The Station wise detail of provisioning amount not considered for 9 LHP is as shown in
Table below and detailed in Annexure-4. The Petitioner may claim the same in FY 2016-17 subject to
discharge of such liability and also providing the reconciliation for the same before the Commission in
its tariff filings.
Table 3.25: Amount Towards Provision Claimed in R&M Expenses for 9 LHPs
Name of Station Amount (In Rs.)
Chilla 1.75
Ramganga 0.03
Khatima 0.02
Chibro 0.02
Dhakrani 0.54
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
62 Uttarakhand Electricity Regulatory Commission
Table 3.25: Amount Towards Provision Claimed in R&M Expenses for 9 LHPs
Name of Station Amount (In Rs.)
Dhalipur 0.48
Kulhal 0.37
Total 3.21
”
With regard to the above provisional amount of R&M disallowed in Tariff Order dated
29.03.2017, the Petitioner vide its letter dated 16.02.2018 submitted the details along with invoices of
Rs. 2.84 Crore for the above amount as under:
Table 3.39: Amount allowed by the Commission in this Tariff Order towards Provision amount disallowed in Tariff Order dated 29.03.2017
Name of Station Amount (In Rs.) Chilla 1.40
Ramganga 0.03
Khatima 0.02
Chibro 0.02
Dhakrani 0.52
Dhalipur 0.48
Kulhal 0.37
Total 2.84
Accordingly, after prudence check of the invoices submitted by the Petitioner, the
Commission has allowed the above expenses of Rs. 2.84 Crore in R&M expenses for FY 2016-17.
The Petitioner has submitted the actual O&M expenses of Rs. 266.36 Crore including interest
on GPF trust and provision for VII Pay Commission arrear. As discussed above, the Commission
has deducted the duplicate entry of 0.26 Crore from R&M expenses of Kulhal Station. Further, as
discussed in additional capitalisation, the Commission has observed the amount of Rs. 0.82 Crore
towards expenses of capital nature wrongly booked under R&M, details of the same are annexed as
Annexure 5. For computing net gain or loss, the Commission has considered actual O&M expenses
excluding interest on GPF trust of Rs. 5.66 Crore, provision for VII Pay Commission arrear of Rs.
23.01 Crore and expenses of capital nature wrongly booked under R&M expenses for FY 2016-17.
Further, the Commission has included amount of Rs. 2.84 Crore regarding provisions (disallowed in
Tariff Order dated 29.03.2017), R&M expenses of Rs 14.42 Crore and A&G expenses of Rs. 0.004
Crore wrongly booked in capital expenses for 9 LHPs.
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 63
Accordingly, the Commission has approved the total O&M expenses for FY 2016-17 after
sharing of gains and losses as shown in the Table below:
Table 3.40: O&M Expenses approved for FY 2016-17 (Rs. Crore)
Name of the Generating
Stations
Approved in Tariff Order dt. 05.04.2016 for FY
2016-17
Claim based on
actual
Adjusted claim
Approved after Truing -up as per
norms for FY 2016-17
Efficiency gain/(loss)
Net Entitlement
(A) (B) (C)=(B)-(A) (D)=(B)+1/3 of
(-C)
Dhakrani 17.48 20.59 21.58 13.56 (8.03) 16.23
Dhalipur 18.38 17.62 20.31 17.43 (2.87) 18.39
Chibro 54.43 54.40 52.88 47.36 (5.52) 49.20
Khodri 26.88 28.91 25.28 23.80 (1.47) 24.29
Kulhal 11.37 11.71 12.33 9.94 (2.39) 10.74
Ramganga 31.52 35.81 29.84 27.03 (2.81) 27.97
Chilla 47.94 46.90 45.36 40.55 (4.81) 42.15
MB-I 40.12 36.15 33.25 31.51 (1.75) 32.09
Khatima 16.14 14.27 13.04 11.97 (1.07) 12.33
Total 264.27 266.36 253.88 223.15 (30.73) 233.39
3.1.2.8 O&M Expenses for Maneri Bhali-II
In accordance with Regulation 48(2) of the UERC Tariff Regulations, 2015, the O&M
expenses for the first year of the Control Period shall be determined by the Commission taking into
account actual O&M expenses of the previous years and any other factors considered appropriate
by the Commission. The escalation rates have been computed on the basis of revised CPI Inflation
and WPI Inflation. The Commission has considered the revision in CPI Inflation and WPI Inflation
on the basis of actual data and has computed the O&M expenses on the basis of Regulation 48(2) of
UERC Tariff Regulations, 2015.
For computing the normative O&M expenses for FY 2016-17, the Commission has
considered the actual employee expenses for FY 2015-16. Further, for the purpose of arriving at the
employee expenses for FY 2016-17, the Commission has considered the value of Growth Factor ‘Gn’
on the basis of actual details of recruitment provided by UJVN Ltd. The Commission has considered
the average increase in CPI for last three years from FY 2013-14 to FY 2015-16 as 7.21%.
For computing the normative R&M expenses for FY 2016-17, the Commission has multiplied
the K Factor (average of FY 2012-13 to FY 2014-15) with the opening GFA approved for FY 2016-17.
The Commission has considered the average increase in WPI for last three years from FY 2013-14 to
FY 2015-16 as 1.83%.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
64 Uttarakhand Electricity Regulatory Commission
For computing the normative A&G Expenses for FY 2016-17, the Commission has
considered the actual A&G expenses for FY 2015-16 and escalated the same with the revised WPI
escalation rate of 1.83%. The Commission, accordingly, approves O&M expenses for MB-II as
shown in the Table below:
Table 3.41: Normative O&M Expenses as approved for MB-II Station for FY 2016-17 (Rs. Crore)
Particulars Approved in Tariff Order dated
05.04.2016 Claimed
Normative O&M Expenses
Employee Expenses 23.83 22.02 19.40
R&M Expenses 26.76 18.05 26.08
A&G Expenses 4.95 5.21 5.29
Total O&M 55.53 45.27 50.77
The Commission in its Tariff Order dated 29.03.2017 had disallowed the provisional amount
of Rs. 1.22 Crore from actual R&M expenses for FY 2015-16 for MB-II. In this regard, the Petitioner
vide its letter dated 16.02.2018 has submitted the details along with invoices of such amount.
Accordingly, the Commission has allowed the provisional amount of Rs. 1.22 Crore in R&M
expenses of the Petitioner for FY 2016-17.
The employee expenses approved now is less than that approved in the MYT Order due to
non consideration of VII Pay Commission impact and change in Growth Factor and CPI escalation
indices. Further, decrease in R&M expenses is on account of decrease in WPI escalation rate during
FY 2016-17 from 5.11% considered in MYT Order dated 05.04.2016 to 1.83% approved on actual WPI
indices in Tariff Order dated 29.03.2017.
Further, the UERC Tariff Regulations, 2015 specify for sharing of gains/losses due to
controllable factors. For computing net gain or loss, the Commission has considered actual O&M
expenses excluding interest on GPF trust and VII Pay Commission arrear and including amount of
Rs. 1.22 Crore regarding provisions (disallowed in Tariff Order dated 29.03.2017), expenses of 0.264
Crore of R&M nature and Rs. 0.004 Crore of A&G nature wrongly booked under additional
capitalization. Thus, the Commission has worked out the actual O&M expenses of Rs. 43.39 Crore
for tariff purposes. As already discussed above, O&M expenses have been considered as
controllable factor, accordingly, the gains/losses for FY 2016-17 will have to be shared in the
manner given in the Table below:
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 65
Table 3.42: O&M Expenses approved after sharing of gains and losses for FY 2016-17 (Rs. Crore)
Particulars Claimed based on
actual
Adjusted claim considered for Tariff Purpose
Approved after Truing -up as per
norms for FY 2016-17
Efficiency gain/(loss)
Generator Share
Net Entitlement
(A) (B) (C)=(B)-(A) (D)=2/3 of (C) (E)=(A)+(D)
O&M Expenses of
MB-II 45.27 43.39 50.77 7.38 4.92 48.31
3.1.2.9 Interest on Working Capital
A. Old Nine Medium and Large Generating Stations
The Petitioner has claimed that it has computed the working capital for each plant in
accordance with the provisions of the UERC Tariff Regulations, 2015, on normative basis. The rate
of interest considered by the Petitioner for computing interest on working capital for FY 2016-17 has
been considered as 14.05% on the basis of the PLR of State Bank of India. Further, the Commission
has observed that the SBAR of State Bank of India as on date of filing of Tariff Petition is 13.70%.
The Commission has considered the same for calculating the interest on working capital.
The components of working capital as per Regulation 33(b)(i) of UERC Tariff Regulations,
2015 are as follows:
“In case of hydro power generating stations and transmission system and SLDC, the working capital
shall cover:
(i) Operation and maintenance expenses for one month
(ii) Maintenance spares @ 15% of operation and maintenance expenses; and
(iii) Receivables equivalent to two months of the annual fixed charges”
With respect to the interest on working capital Regulation 33 of the UERC Tariff
Regulations, 2015 specifies as under:
“Rate of interest on working capital shall be on normative basis and shall be equal to the State Bank
Advance Rate (SBAR) of State Bank of India as on the date on which the application for
determination of tariff is made.
....”
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
66 Uttarakhand Electricity Regulatory Commission
3.1.2.9.1 One Month O&M Expenses
The Commission has trued-up the annual O&M expense plant-wise for FY 2016-17. Based on
the approved O&M expenses, one month’s O&M expenses has been worked out plant-wise for
determining the working capital requirement.
3.1.2.9.2 Maintenance Spares
The Commission has considered the maintenance spares in accordance with UERC Tariff
Regulations, 2015. The Commission has determined the plant-wise maintenance spares requirement
at the rate of 15% of the trued-up O&M Expenses for FY 2016-17.
3.1.2.9.3 Receivables
The UERC Tariff Regulations, 2015 envisages receivables equivalent to two months of fixed
charges for sale of electricity as an allowable component of working capital. Plant-wise Annual
Fixed Charges (AFC) for the Petitioner includes O&M expenses, depreciation, interest on loan,
return on equity and interest on working capital. The Commission has considered the receivables
for two months based on the trued-up plant-wise AFC for FY 2016-17.
As regards the interest on working capital, Regulation 33 of the UERC Tariff Regulations,
2015 specifies rate of interest on working capital to be taken equal to the State Bank Advance Rate
(SBAR) of State Bank of India as on the date on which the application for determination of tariff is
made. As the Tariff Petition for FY 2016-17 was filed on 30.11.2017, the Commission has considered
the prevailing State Bank Advance Rate (SBAR) of State Bank of India for computing the Interest on
Working Capital.
Accordingly, the normative Interest on Working Capital for FY 2016-17 as approved by the
Commission is as shown in the Table below:
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 67
Table 3.43: Interest on Working Capital for Nine LHPs for FY 2016-17 (Rs. Crore)
Plant
Approved Working Capital after Truing-up Interest on Working Capital
1 month O&M
Expenses
Maintenance Spares @15%
of O&M
2 months Receivables
Total Working Capital
Approved in MYT
Order dt. 05.04.2016
Claimed
Normative Approved
after Truing-up
Dhakrani 1.35 2.43 2.91 6.69 1.01 1.21 0.92
Dhalipur 1.53 2.76 3.35 7.64 1.07 1.05 1.05
Chibro 4.10 7.38 8.96 20.44 3.22 3.35 2.80
Khodri 2.02 3.64 4.99 10.66 1.63 1.81 1.46
Kulhal 0.89 1.61 2.01 4.51 0.67 0.70 0.62
Ramganga 2.33 4.20 5.07 11.60 1.80 2.14 1.59
Chilla 3.51 6.32 8.83 18.67 2.88 2.98 2.56
MB-I 2.67 4.81 7.38 14.87 2.46 2.38 2.04
Khatima 1.03 1.85 3.17 6.04 1.09 1.16 0.83
Total 19.45 35.01 46.67 101.12 15.83 16.79 13.85
Further, the UERC Tariff Regulations, 2015 specify for sharing of gains/losses due to
controllable factors and as per UERC Tariff Regulations, 2015, variation in working capital
requirements is a controllable factor. The actual interest on working capital for UJVNL as per
audited accounts is NIL. As the actual interest on working capital incurred by the Petitioner is less
than the normative interest on working capital, the Commission has shared the gain in interest on
working capital in accordance with the provisions of UERC Tariff Regulations, 2015.
The interest on working capital for nine LHPs after sharing the gains is as given in Table
below:
Table 3.44 Interest on Working Capital for Nine LHPs for FY 2016-17 after sharing of Gains (Rs. Crore)
Particulars Actual
Normative as Trued up
Efficiency gain/(loss)
Rebate in Tariff
Net Entitlement
(A) (B) (C)=(B)-(A) (D)=1/3x (C) (E)=(B)-(D)
Interest on Working Capital
0.00 13.85 13.85 4.62 9.24
B. Maneri Bhali-II
As discussed earlier, the Commission has approved the Capital Cost of MB-II as on CoD and
has considered additional capitalisation, and has reviewed all the components of AFC. As a result of
which the Interest on Working Capital has been revised in accordance with UERC Tariff
Regulations, 2015 as shown in the Table below:
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
68 Uttarakhand Electricity Regulatory Commission
Table 3.45: Interest on Working Capital as approved for FY 2016-17 (Rs. Crore)
Particulars Approved in MYT
Order for FY 2016-17 dated 05.04.2016
Claimed Approved after
truing-up
FY 2016-17 7.67 8.93 6.96
As discussed above, as the actual interest on working capital incurred by the Petitioner for
FY 2016-17 is less than the normative interest on working capital, the Commission has shared the
gain in interest on working capital in accordance with the provisions of UERC Tariff Regulations,
2015.
The interest on working capital for MB-II after sharing the gains for FY 2016-17 is as given in
Table below:
Table 3.46: Interest on Working Capital for MB-II for FY 2016-17 after sharing of gains (Rs. Crore) Particulars Actual Normative as
Trued up Efficiency gain/(loss)
Rebate in Tariff
Net Entitlement
Interest on Working Capital
(A) (B) (C)=(B)-(A) (D)=1/3x(C) (E)=(B)-(D)
FY 2016-17 0.00 6.96 6.96 2.32 4.64
3.1.2.10 Annual Fixed Charges for Nine LHPs for FY 2016-17
Based on the above analysis, the Commission has worked out the approved figures of Gross
AFC for FY 2016-17 after truing-up. The summary of Gross AFC for FY 2016-17 is as shown in the
Table below:
Table 3.47: Summary of AFC for FY 2016-17 (Rs. Crore)
Name of Generating
Stations
Approved in Tariff Order dt. 05.04.2016 for FY 2016-17
AFC
Claimed
AFC Approved after truing-up of FY 2016-17
Depreciation Interest on loan
Interest on Working Capital after sharing of
gains
O&M expenses
RoE Gross
Annual Fixed Cost
Dhakrani 19.44 20.93 0.19 0.04 0.61 16.23 0.71 17.78
Dhalipur 20.96 20.89 0.30 0.05 0.70 18.39 1.16 20.59
Chibro 65.62 66.76 1.44 1.22 1.87 49.20 5.66 59.39
Khodri 34.20 35.48 1.35 0.13 0.97 24.29 4.29 31.03
Kulhal 13.21 13.44 0.17 0.06 0.41 10.74 0.94 12.32
Ramganga 36.54 38.35 0.31 0.13 1.06 27.97 2.76 32.23
Chilla 58.23 62.31 1.13 1.60 1.70 42.15 7.57 54.15
MB-I 54.84 53.70 4.15 0.59 1.36 32.09 7.11 45.30
Khatima 25.15 30.81 2.95 4.34 0.55 12.33 2.94 23.11
Total 328.19 342.69 11.98 8.16 9.24 233.39 33.14 295.91
3.1.2.11 Non Tariff Income
A. Old Nine Large Hydro Generating Stations
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 69
Regulation 46 of the UERC Tariff Regulations, 2015 specifies as follows:
“46. Non Tariff Income
The amount of non-tariff income relating to the Generation Business as approved by the
Commission shall be deducted from the Annual Fixed Charges in determining the Net Annual
Fixed Charges of the Generation Company.
Provided that the Generation Company shall submit full details of its forecast of non tariff income
to the Commission in such form as may be stipulated by the Commission from time to time.
The indicative list of various heads to be considered for non tariff income shall be as under:
a) Income from rent of land or buildings;
b) Income from sale of scrap;
c) Income from statutory investments;
d) Interest on delayed or deferred payment on bills;
e) Interest on advances to suppliers/contractors;
f) Rental from staff quarters;
g) Rental from contractors;
h) Income from hire charges from contactors and others;
i) Income from advertisements, etc.;
j) Any other non- tariff income.
Provided that the interest earned from investments made out of Return on Equity corresponding to
the regulated business of the Generating Company shall not be included in Non-Tariff Income.”
The Petitioner has submitted the details of actual Non-Tariff Income for 9 old large hydro
generating stations as well as for MB-II LHP for FY 2016-17 in accordance with the audited
accounts. The Petitioner has further submitted that Non-Tariff income for FY 2016-17 has been
claimed in accordance with the following exception provided in Regulation 46 of UERC Tariff
Regulations, 2015.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
70 Uttarakhand Electricity Regulatory Commission
“…Provided that the interest earned from investments made out of Return on Equity corresponding
to the regulated business of the Generating Company shall not be included in Non-Tariff Income. “
The Commission observed that Petitioner has not considered interest on fixed deposit as a
part of Non Tariff Income stating that the interest amount is out of Return on Equity for 9 LHPs and
MB-II.
The Commission vide its letter dated 05.01.2018 directed the Petitioner to substantiate its
claim towards “other income” from fixed deposits which has been through Return on Equity earned
by the Petitioner. In response the Petitioner vide its letter dated 08.03.2018 submitted its justification
for the same. The Commission examined the matter and has considered the plant-wise non-tariff
income for truing-up purposes as proposed by the Petitioner.
Further, with regard to RMU works of Khatima LHP, the Commission in its Tariff Order
dated 29.03.2017 had directed the Petitioner to submit the details of old plant and machinery
received back for disposal after RMU of Khatima LHP as given below:
“...Accordingly, the Commission directs the Petitioner to submit the audited RMU expenses as on
date of completion of RMU works along with details of de-capitalisation in respect of the same as soon
as the same is available including quantity. The Petitioner is also directed to submit the details of
scrap available on de-capitalisation of old plant and machinery and expected time frame in which
same will be disposed.”
In compliance to the above direction, the Petitioner in letter dated 14.12.2017 has submitted
that it has given an order to M/s N.A. Steel, Saharanpur amounting to Rs. 3.35 Crore for sale of
scrap material lying at Sharda Power House, Lohiahead (Khatima) of UJVN Ltd. Accordingly, the
Commission has considered an additional non-tariff income of Rs. 3.35 Crore in case of Khatima
LHP.
Further, as discussed in Commission’s Order dated 21.10.2009, that the provision of the
UERC Tariff Regulations permitting adjustment of non-tariff income from AFC is not in consonance
with the 1972 Agreement with HP as the components of cost of generation specified in Schedule-
VIII of The Electricity (Supply) Act, 1948 considers only the cost components and does not provide
for adjustment of any kind of revenue. Therefore, in order to have conformity with the provisions of
the said agreement, the Commission has not considered any adjustment of proportion of non-tariff
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 71
income for HPSEB and has considered the entire amount of the above said non-tariff income for
adjustment in truing-up of UPCL’s share of AFC.
The Non-Tariff income as approved by the Commission for FY 2016-17 is shown in the Table
below:
Table 3.48: Non-Tariff Income for 9 LHPs for FY 2016-17 (Rs. Crore) Name of the Generating
Stations Approved in Tariff Order dated
05.04.2016 for FY 2016-17 Claimed
Approved after Truing-Up for FY 2016-17
Dhakrani 0.62 0.35 0.35
Dhalipur 0.91 0.47 0.47
Chibro 4.20 5.64 5.64
Khodri 2.01 1.11 1.11
Kulhal 0.50 0.29 0.29
Ramganga 3.96 1.79 1.79
Chilla 2.47 1.17 1.17
MB-I 5.96 1.00 1.00
Khatima 1.40 0.76 4.10
Total 22.03 12.56 15.91
In case of MB-II, the Non Tariff income approved vide MYT order dated 05.04.2016 for FY
2016-17 is Rs. 2.73 Crore, the Petitioner has now claimed Rs. 1.98 Crore. Therefore, for MB-II LHP,
the Commission has considered the Non Tariff Income as claimed by the Petitioner.
3.1.2.12 Truing-up for Nine LHPs for FY 2016-17 and its net impact on UPCL
The Commission has Trued-up the (Surplus)/Gap for 9 LHPs pertaining to FY 2016-17 to be
recovered by UJVN Ltd. from UPCL and HPSEB. Based on the above, the total amount recoverable
by UJVN Ltd. from UPCL and HPSEB excluding the carrying cost is as summarized in the Table
below:
Table 3.49: Summary of net AFC as Trued up by the Commission for 9 LHPs for FY 2016-17 to be recovered from UPCL (Rs. Crore)
Power Stations Approved Net AFC in Tariff Order dated 05.04.2016 for FY
2016-17 Total AFC to be
recovered
Dhakrani 13.96 12.99
Dhalipur 14.81 14.97
Chibro 45.01 38.90
Khodri 23.64 22.17
Kulhal 10.07 9.57
Ramganga 32.58 30.44
Chilla 55.76 52.98
MB-I 48.88 44.30
Khatima 23.75 19.00
Total 268.46 245.33
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
72 Uttarakhand Electricity Regulatory Commission
The summary of truing-up for FY 2016-17 for UPCL after considering the actual
performance parameter achieved in FY 2016-17 is shown in the Table below:
Table 3.50: Summary of net truing-up for FY 2016-17 for UPCL (Rs. Crore)
Nam
e o
f th
e S
tati
on
AF
C t
o b
e re
cov
ere
d f
rom
U
PC
L (
Rs
Cro
re)
Ca
pac
ity
Ch
arg
es (
Rs
Cro
re)
NA
PA
F (
%)
Act
ua
l /
Re
-sta
ted
PA
FY
(%
)
Ca
pac
ity
ch
arg
es
all
ow
ab
le
(Rs
Cro
re)
Ca
pac
ity
ch
arg
es
aft
er
sha
rin
g
Act
ua
l E
ne
rgy
Co
nsi
de
red
(M
U)
Pe
r u
nit
ra
te a
pp
rov
ed
(Rs/
kW
h)
All
ow
ab
le E
C (
Rs
Cro
re)
Se
con
dar
y e
ne
rgy
(M
U)
Se
c E
ne
rgy
Ra
te
(Rs/
kW
h)
To
tal
Se
c. E
ne
rgy
ch
arg
es
(Rs
Cro
re)
To
tal
all
ow
able
(EC
+C
C)
(R
s C
rore
)
To
tal
reco
ve
red
fro
m U
PC
L
Tru
ing
-up
-im
pac
t
Dhakrani 12.99 6.49 61.04% 54.88% 5.84 6.06 66.35 0.56 3.69 0.00 0.52 0.00 9.75 10.24 (0.49)
Dhalipur 14.97 7.49 57.26% 55.02% 7.19 7.29 142.59 0.52 7.47 0.00 0.52 0.00 14.76 14.51 0.25
Chibro 38.90 19.45 65.06% 66.75% 19.96 19.79 532.64 0.35 18.64 0.00 0.35 0.00 38.43 44.70 (6.27)
Khodri 22.17 11.08 57.23% 58.96% 11.42 11.31 248.00 0.43 10.73 0.00 0.43 0.00 22.04 23.63 (1.59)
Kulhal 9.57 4.79 65.00% 71.61% 5.27 5.11 95.16 0.39 3.73 0.00 0.37 0.00 8.84 9.46 (0.63)
Ramganga 30.44 15.22 19.00% 10.81% 8.66 10.85 178.97 0.49 8.82 0.00 0.40 0.00 19.67 18.69 0.97
Chilla 52.98 26.49 74.00% 73.83% 26.43 26.45 753.66 0.40 26.49 35.91 0.37 1.33 54.26 59.49 (5.22)
MB-I 44.30 22.15 79.00% 61.96% 17.37 18.97 339.83 0.56 19.19 0.00 0.41 0.00 38.16 39.64 (1.48)
Khatima 19.00 9.50 47.21% 55.73% 11.22 10.64 173.59 0.49 8.56 0.00 0.46 0.00 19.20 24.73 (5.53)
Total 245.33 122.66 113.36 116.46 2530.78 107.31 35.91 1.33 225.10 245.09 (19.99)
Thus, for 9 LHPs, the Commission has computed the net surplus of Rs. 19.99 Crore for FY
2016-17 on account of sharing of gains and losses and considering the actual performance
parameters.
The Commission has Trued-up the (Surplus)/Gap for 9 LHPs pertaining to FY 2016-17 to be
recovered by UJVN Ltd. from UPCL. Based on the above, the total amount refundable by UJVN
Ltd. from UPCL along with the carrying cost is as summarized in the Table below:
Table 3.51: Summary of net AFC as Trued up by the Commission for 9 LHPs to be refunded to UPCL (Rs. Crore)
Particulars FY 2016-17 FY 2017-18
Opening Balance - (21.36)
True Up Amount Gap/(Surplus) (19.99) -
Carrying Cost (1.37) (2.93)
Closing Balance (21.36) (24.29)
Interest Rate 13.70% 13.70%
The Commission directs UJVN Ltd. to refund Rs. 24.29 Crore to UPCL in accordance with
the provisions of UERC Tariff Regulations, 2015 in twelve equal monthly instalments starting from
April 2018 to March 2019.
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17
Uttarakhand Electricity Regulatory Commission 73
3.1.2.13 Truing-up of 5 LHPs of UJVN Ltd. for FY 2016-17 for HPSEB
The Commission has determined the Plant-wise total truing-up to be recovered from HPSEB
as follows:
Table 3.52: Summary of net AFC as Trued-up for FY 2016-17 by the Commission for 9 LHPs to be recovered from HPSEB (Rs. Crore)
Power Stations
Approved Net AFC in APR Order dated 05.04.2016
Total AFC to be Recovered
Dhakrani 4.86 4.45
Dhalipur 5.24 5.15
Chibro 16.40 14.85
Khodri 8.55 7.76
Kulhal 2.64 2.46
Ramganga - -
Chilla - -
MB-I - -
Khatima - -
Total 37.70 34.66
Based on the above, the total amount refunded by UJVN Ltd. to HPSEB alongwith carrying
cost is as summarised in the Table below:
Table 3.53: Summary of net AFC as Trued up by the Commission to be refunded to HPSEB (Rs. Crore)
Particulars FY 2016-17 FY 2017-18
Opening Balance - (3.24)
True Up Amount Gap/(Surplus) (3.03) -
Carrying Cost (0.21) (0.44)
Closing Balance (3.24) (3.68)
Interest Rate 13.70% 13.70%
The Commission directs UJVN Ltd. to refund Rs. 3.68 Crore to HPSEB on the basis of actual
PAFY and energy billed in accordance with the provisions of UERC Tariff Regulations, 2015 in
equal twelve equal monthly instalments starting from April, 2017 to March, 2018.
3.1.2.14 Net Annual Fixed Charges for MB-II from FY 2016-17
Based on the approved capital cost of MB-II and the approved additional capitalisation and
O&M expenses in accordance with MYT Regulations 2015, the net truing-up of AFC for FY 2016-17
is as shown in the Table below:
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
74 Uttarakhand Electricity Regulatory Commission
Table 3.54: Summary of truing-up of Net AFC of MB-II for FY 2016-17 (Rs. Crore)
Particulars Approved in Tariff Order for FY
2016-17 dated 05.04.2016 Claimed
Approved after truing-up
Depreciation 58.81 67.85 60.13
Interest on loan 86.80 87.88 80.05
Interest on Working Capital 7.67 8.93 4.64
O&M expenses 55.53 52.11 48.31
RoE 43.63 108.06 46.20
Total Annual Fixed Costs 252.44 324.83 239.33
NTI 2.73 1.98 1.98
Net AFC 249.71 322.85 237.35
The summary of truing-up of MB-II with regard to the Net AFC approved for FY 2016-17 in
the Order dated 05.04.2016 is as shown in the Table below:
3.1.2.15 Net impact on account of Truing-up of FY 2016-17 of MB-II
Table 3.55: Net impact on account of truing-up of FY 2016-17
AFC to be recovered
from UPCL (Rs
Crore)
Capacity Charges
(Rs Crore)
NAPAF (%)
Actual/ Re-
stated PAFY
(%)
Capacity charges
allowable (Rs Crore)
Capacity charges
after sharing
Actual Energy
Considered (MU)
Actual Billed Energy (MU)
Allowable EC (Rs Crore)
Total allowable (EC+CC)
(Rs Crore)
Total recovered
from UPCL
Truing- up
impact
237.35 118.68 65.15% 65.15% 118.68 118.68 1550.44 1245.10 95.31 213.98 232.75 (18.77)
3.1.3 Summary of Net Impact on Account of Truing-up of FY 2016-17 of MB-II including Carrying
Cost
The Commission has Trued-up the (Surplus)/Gap for MB-II pertaining to FY 2016-17 to be
recovered by UJVN Ltd. from UPCL. Based on the above, the total amount refundable by UJVN
Ltd. to UPCL along with the carrying cost is summarized in the Table below:
Table 3.56: Summary of net amount Trued up by the Commission for FY 2016-17 to be refunded to UPCL (Rs. Crore)
Particulars 2016-17 2017-18
Opening (Surplus)/Gap 0.00 (20.06)
True Up Amount (18.77) 0.00
Carrying Cost (1.29) (2.75)
Closing (Surplus)/Gap (20.06) (22.80)
Interest Rate 13.70% 13.70%
The Commission directs UJVN Ltd. to refund the above approved amount of Rs. 22.80 Crore
on account of truing-up of MB-II for FY 2016-17 to UPCL in accordance with the provisions of
UERC Tariff Regulations, 2015 in twelve equal monthly instalments starting from April 2018 to
March 2019.
Uttarakhand Electricity Regulatory Commission 75
4 Petitioner’s Submissions, Commission’s Analysis, Scrutiny and
Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
4.1 Annual Performance Review
The Commission, vide its Order dated 05.04.2016, approved the Multi Year Tariff for the
Petitioner for the Control Period FY 2016-17 to FY 2018-19. Further, the Commission vide its Order
dated 29.03.2017, approved the Tariff for FY 2017-18. Regulation 12(3) of the UERC (Terms and
Conditions for Determination of Multi Year Tariff) Regulations, 2015 stipulate that under the MYT
framework, the performance of the generating company shall be subject to Annual Performance
Review.
Regulation 12(3) of the UERC (Terms and Conditions for Determination of Multi Year Tariff)
Regulations, 2015 specify as under:
“The scope of Annual Performance Review shall be a comparison of the performance of the Applicant
with the approved forecast of Aggregate Revenue Requirement and expected revenue from tariff and
charges and shall comprise the following:-
a) A comparison of the audited performance of the applicant for the previous financial year with
the approved forecast for such previous financial year and truing up of expenses and revenue
subject to prudence check including pass through of impact of uncontrollable factors;
b) Categorisation of variations in performance with reference to approved forecast into factors
within the control of the applicant (controllable factor) and those caused by factors beyond the
control of the applicant (un-controllable factors);
c) Revision of estimates for the ensuing financial year, if required, based on audited financial
results for the previous financial year;
d) Computation of sharing of gains and losses on account of controllable factors for the previous
year.”
The Commission, vide its Order dated 05.04.2016, on approval of Business Plan and MYT
Petition for the Control Period from FY 2016-17 to FY 2018-19 approved the AFC for the Control
Period based on the audited accounts till FY 2014-15. Further, the Commission vide its Order dated
29.03.2017, approved the AFC for FY 2017-18 based on the Audited accounts till FY 2015-16. The
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
76 Uttarakhand Electricity Regulatory Commission
Petitioner, in this Petition, has proposed revision of estimates for FY 2018-19 based on the audited
accounts for FY 2016-17 and revised estimates for FY 2017-18.
The Commission, in this Order, has carried out the Truing-up of 9 LHPs and MB-II for FY
2016-17 in accordance with the UERC (Terms and Conditions for Determination of Tariff)
Regulations, 2015. In accordance with Regulation 12(3) of the UERC Tariff Regulations, 2015 the
scope of annual performance review is limited to the revision of estimates for the ensuing year, if
required, based on the audited financial results for the previous year and does not provide for the
revision of estimates for the current year and give effect on this account in the estimates of the
ensuing year. The Commission shall carry out the truing-up of FY 2017-18 based on the audited
accounts for that year and give effect on this account in the AFC of FY 2019-20. The Commission, as
discussed earlier, has revised additional capitalisation and R&M expenses for FY 2016-17 for 9 LHPs
and MB-II. Hence, the Commission, under the provisions of Regulation 12(3) of the UERC Tariff
Regulations, 2015, has revised the AFC for FY 2018-19 based on the revised additional capitalization
and O&M expenses for 9 LHPs and MB-II for FY 2016-17 and FY 2017-18. The approach adopted by
the Commission in the approval of each element of ARR for FY 2018-19 is elaborated in the
subsequent paragraphs.
4.2 Physical Parameters
4.2.1 NAPAF
Regulation 47(1)(b) of UERC Tariff Regulations, 2015 specifies as under:
“(b) For existing hydro generating stations:
The trajectory for NAPAF fixed by the Commission in case of existing hydro generating stations, in
the preceding Control Period would continue to be applicable. However, the NAPAF of the stations
undergone RMU would be adjusted accordingly, considering the impact of RMU.”
The Commission in its MYT Order dated 05.04.2016 had approved NAPAF for its LHPs
except Khatima and MB-II for FY 2017-18 & FY 2018-19. With regard to Khatima and MB-II LHPs,
the Commission in its Order dated 29.03.2017 had approved the NAPAF of Khatima and MB-II for
FY 2017-18 & FY 2018-19 as under:
“...Therefore, considering the generator efficiency of 97% and turbine efficiency of 93%, the
achievable PAFY for Khatima LHP works out to 69.30%. Accordingly, the Commission has revised
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 77
the NAPAF for Khatima LHP to 69.30% post RMU works for the rest of the Control Period, i.e. FY
2017-18 and FY 2018-19 for recovery of capacity charges.
...
The Commission in its MYT Order dated 06.05.2013 for the First Control Period had approved a
NAPAF of 85% for MB-II.
…
As discussed above, the dam height issue is now resolved and further TRC modification works have
now been completed, therefore, the Commission has not reduced availability on account of the same.
With regard to impact of shutdown on account of overhauling as given in (iii) above, the Commission
has considered factor of 97% towards machine availability as approved for FY 2015-16. Hence,
NAPAF stands revised to 82.00% (i.e. 85% x 97%) for rest of the Control Period, i.e. FY 2017-18
and FY 2018-19. “
The Commission observed that the Petitioner has sought relaxation of NAPAF in FY 2018-19
for Ramganga, MB-I and MB-II HEP’s. In support of its claim, the Petitioner has submitted the
following plant-wise reasons for not being able to achieve the stipulated NAPAF and the same are
discussed below:
▪ Ramganga–The Petitioner submitted that the water released from Ramganga Dam is purely
irrigation based and the control of which rests with Uttar Pradesh Irrigation Department
and, therefore, they have no control over the same. The Petitioner further submitted that
based on water released from the dam during FY 2016-17, PAFM of 13.20% during FY 2017-
18 & FY 2018-19 is expected to be achieved with best efforts. Therefore, the Petitioner has
requested the Commission to revise the NAPAF for FY 2018-19 as 13.20% instead of 19.00%.
▪ MB-I -The Petitioner has submitted that the power station is suffering from excessive silt
and aging. The Petitioner further submitted that the breakdown of the equipment and
closure of the power station increased unprecedentedly even after best possible maintenance
efforts by the Petitioner. The Petitioner further submitted the details of the major closure and
forced outages in FY 2017-18. The Petitioner further submitted that Unit 1 of the power
station was under outage from 13.02.2017 to 14.07.2017 for reverse engineering works for
RMU. Further Unit 3 had been under forced outage from 01.07.2017 to 04.07.2017 due to
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
78 Uttarakhand Electricity Regulatory Commission
heavy water leakage from penstock drain valve. Also, the power station had been under
monsoon closure from 24.07.2017 to 23.08.2017 for interim repair of underwater parts. The
Petitioner further submitted that the power station achieved 56.97% PAFM till September
2017 due to the above mentioned reasons, and, accordingly, the power station is expected to
achieve 64.60% of PAFM for FY 2017-18 and FY 2018-19 instead of 79.00% with best possible
efforts.
▪ MB-II: The Commission in its Order dated 29.03.2017 had fixed the NAPAF for MB-II as
82% for FY 2017-18 and FY 2018-19. The Petitioner submitted that it is unable to achieve the
approved NAPAF due to the excessive silt in river Bhagirathi. The Petitioner also submitted
that the underwater parts have eroded badly resulting in prolong maintenance period.
Further, the Petitioner submitted that due to excessive PPM in River Bhagirathi during
Monsoon period, machine shaft seal and other parts were damaged many times resulting in
355 hours of forced outage of machine in the month of July, August and September 2017.
Further, due to stator fault in Machine No. 4, it was under breakdown for 536 hours from
23.08.2017 to 14.09.2017. The Petitioner has further submitted that it has been able to achieve
PAFM of 77.77% by September 2017 due to better utilization of capacity and availability of
water. However, the Petitioner has requested the Commission to revise the NAPAF for FY
2017-18 and FY 2018-19 as 65.75% instead of 82.00%.
The Commission observes that initially in the tariff determination Petitions of previous
years, the Petitioner used to seek relaxation in NAPAF for MB-II stating that it was unable to reach
1108 m head as dam height raising works were pending. In the previous tariff Petitions, the
Petitioner had claimed relaxation in NAPAF in order to raise the dam height which was allowed by
the Commission in FY 2016-17 in MYT Order dated 05.04.2016. Now after incurring all the cost
towards raising the dam height, it is still seeking further relaxation on the basis of plant conditions.
The Commission while approving the NAPAF in MYT Order and APR Order for FY 2016-17
for various stations has already factored in plant operating conditions and past performances.
Therefore, the Commission has not allowed any relaxation in NAPAF for any station for FY 2018-19.
The Commission has, therefore, approved NAPAF for FY 2018-19 same as approved in MYT
Order dated 05.04.2016 for 10 LHPs except Khatima and MB-II stations. Further, for Khatima and
MB-II LHPs, the Commission has approved NAPAF for FY 2018-19 same as approved in Tariff
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 79
Order dated 29.03.2017 as under:
Table 4.1: NAPAF as approved by the Commission for FY 2018-19
Station Approved in Tariff Order dated 29.03.2017 for
Khatima & MB-II stations and MYT Order dated 05.04.2016 for other 8 LHPs
Approved
Dhakrani 60.94% 60.94%
Dhalipur 58.62% 58.62%
Chibro 65.06% 65.06%
Khodri 57.23% 57.23%
Kulhal 67.14% 67.14%
Ramganga 19.00% 19.00%
Chilla 74.00% 74.00%
MB-I 79.00% 79.00%
Khatima 69.30% 69.30%
MB-II 82.00% 82.00%
4.2.2 Design Energy, Auxiliary Energy Consumption and Saleable Primary Energy
A. Old Nine Large Generating Station
The Commission in its MYT Order dated 05.04.2016 with regard to design energy of 9 LHPs
had stated as follows:
“..., the Commission provisionally approves the earlier approved primary energy as design energy for
the Control Period. However, the same is subject to revision as and when RMU works for generating
stations are completed. Thereafter, for ascertaining the saleable primary energy, normative auxiliary
consumption including transformation losses as specified in the UERC Tariff Regulations, 2015 is
deducted from the Design Energy to arrive at the saleable primary energy for the second Control
Period.”
Accordingly, the Commission in line with the MYT Order dated 05.04.2016 approves the
earlier approved primary energy as design energy for FY 2018-19 for all the 9 LHPs except Khatima
hydro power station.
The Petitioner for Khatima LHP has claimed Design Energy same as approved by the
Commission in its Order dated 29.03.2017. The Petitioner with regard to Design Energy for Khatima
LHP submitted that Khatima LHP cannot generate its full design energy in the Month of June, July,
August, September and October. In this regard, the Petitioner submitted that discharge in Sharda
Canal is controlled by U.P. Irrigation Department from Banbasa barrage and TRC level goes high in
case of increased discharge which is pre-dominant if the Nagla Escape channel is closed. This
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
80 Uttarakhand Electricity Regulatory Commission
decreases the head thereby decreasing the generation and power house runs at around 40 MW
during high discharge period. The Petitioner has further submitted that daily generation of 960
MWh is possible without considering any outage. Considering 95% availability (allowing 5% forced
outage), the daily generation figure works out to 912 MWh, so, generation of approximately 27.36
MU is achievable in the month of June, July, August and September provided there is no flood. The
Petitioner has further submitted that UPID normally undergo canal closure in the months of
October, November or December for about 20 days, and therefore, it will be appropriate to consider
the generation of October as 10 MUs projected as under:
Table 4.2: Possible Generation during June to October of 2018 for Khatima LHP as claimed by the Petitioner (MU)
Month Generation Projections as per DPR (MU) Possible Generation (MU)
June 30.00 27.36
July 30.00 27.36
August 30.00 27.36
September 30.00 27.36
October 30.00 10.00
In view of the above, the Petitioner requested the Commission to revise the Design Energy
for Khatima LHP.
With regard to the Design Energy of Khatima LHP, the Commission in its Order dated
29.03.2017 had stated as follows:
“Since the RMU works for Khatima LHP have been completed in FY 2016-17, the Commission is
revising the design energy for the LHP. It is observed that the Petitioner in its Petition dated
06.09.2013 for Investment Approval had submitted that after execution of the RMU works as per the
revised DPR the LHP is expected to generate 41.4 MW with average generation of 235.59 MU in
90% dependable year. The Commission taking cognisance of the submissions made by the Petitioner
and the revised DPR gave in-principle approval of RMU works in its Order dated 07.05.2015. The
Petitioner has, however, now submitted that the station shall only be able to generate 207 MU as
compared to earlier projected generation of 235.59 MU. The Commission, in this regard, is of the view
that the projected generation of 235.59 MU submitted by the Petitioner was based on revised DPR
while the current projection of the Petitioner does not have any basis or grounds for refuting the
projection made in its revised DPR. Further, the Petitioner cannot have separate set of performance
parameters for getting investment approval and for claiming tariff which only results in unjust
financial burden on to the consumers. The Commission, therefore, finds no merit in considering the
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 81
design energy projected by the Petitioner.
Hence, the Commission in line with the order dated 07.05.2015 for approval of “Capital Investment
for Renovation & Modernization” of Khatima (3x13.8 MW) HEP has revised the design energy of
Khatima LHP to 235.59 MU.”
As discussed in above paras of the Tariff Order dated 29.03.2017, the Commission had
already revised the design energy for Khatima LHP in view of the completion of RMU works. It has
been observed that UJVN Ltd. is seeking further relaxation in design energy on the basis of Plant
conditions, whereas, based on the data available with the Commission, in a post RMU scenario
(generator efficiency of 97%, Turbine efficiency of 93%, auxiliary consumption of 1%) considering
overall generation loss due to uncontrollable situations of 4.7%, the computed Saleable Primary
Energy works out to be 237.54 MUs which itself is higher than the approved Saleable Primary
Energy of 233.23 MUs.
Thus, the Commission hereby reiterates that the Petitioner cannot have separate set of
performance parameters for getting investment approval and for claiming tariff which only results
in unjust financial burden on the consumers. The Commission in line with the Order dated
29.03.2017 approves the design energy for FY 2018-19 for Khatima hydro power station as 235.59
MU as submitted by the Petitioner in the DPR for obtaining the investment approval for RMU of
Khatima.
Further, with regard to Auxiliary energy consumption for Khatima LHP, the Commission in
its Order dated 29.03.2017 had approved auxiliary energy consumption for the station as 1% after
RMU works as the station has static excitation system. With regard to other LHPs auxiliary
consumption was considered same as that approved in MYT Order dated 05.04.2016. The
Commission in this Order has also approved same auxiliary consumption for FY 2018-19 as
approved for FY 2017-18 in its Order dated 29.03.2017.
Accordingly, the design energy and saleable primary energy approved by the Commission
is shown in the Table below:
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
82 Uttarakhand Electricity Regulatory Commission
Table 4.3: Design Energy and Saleable Primary Energy approved for FY 2018-19 (MU)
Name of the Generating Station
Original Design Energy
Design Energy
Auxiliary consumption (including Transformation Loss)
Saleable Primary energy
MU MU % MU MU
Dhakrani 169.00 156.88 0.70% 1.10 155.78
Dhalipur 192.00 192.00 0.70% 1.34 190.66
Chibro 750.00 750.00 1.20% 9.00 741.00
Khodri 345.00 345.00 1.00% 3.45 341.55
Kulhal 164.00 153.91 0.70% 1.08 152.83
Ramganga 385.00 311.00 0.70% 2.18 308.82
Chilla 725.00 671.29 1.00% 6.71 664.58
MB-I 546.00 395.00 0.70% 2.77 392.24
Khatima* 235.59 235.59 1.00% 2.36 233.23
Total 3511.59 3210.67 29.98 3180.69 *Post RMU
For, other LHPs, the Commission in the past had not considered the Original Design Energy
for some of the LHPs for calculation of energy charge rate (ECR) as it would have resulted in under-
recovery of the AFC of the Petitioner on account of old hydro stations. The Commission in line with
its previous approach for the calculation of ECR has approved design energy of 8 LHPs (other than
Khatima LHP) as approved in MYT Order dated 05.04.2016 and for Khatima LHP in Tariff Order
dated 29.03.2017. The ECR will be calculated based on the approved saleable primary energy as
specified above. However, secondary energy will be calculated only in case the actual energy
generation exceeds the Original Design Energy and any energy generated in excess of design
energy (approved in this Tariff Order) upto the original design energy shall not be considered as
secondary energy.
B. Maneri Bhali-II
With regard to the design energy and saleable primary energy, UJVN Ltd. submitted that it
has considered the design energy as approved in the previous Control Period.
The Commission approves the original design energy as 1566.10 MU as per the DPR of the
station and saleable primary energy after deducting the normative auxiliary consumption
(including transformation losses) of 1%, as 1550.44 MU.
4.3 Financial Parameters
4.3.1 Apportionment of Common Expenses
As discussed in detail in Chapter 3 of this Order, the Commission has considered the ratio of
85:10:5 among 9 LHPs, MB-II and SHPs, respectively, for allocation of common expenses, as
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 83
proposed by the Petitioner. However, the Commission would like to point out that UJVN Ltd. is
diversifying its business and is also in solar generation now, accordingly, while seeking truing-up
for FY 2017-18, UJVN Ltd. would be required to review the basis for such apportionment of
common expenses.
4.3.2 Capital Cost
A. Old Nine Generating Stations
As detailed earlier in Truing-up section, pending finalization of the Transfer Scheme, for
various reasons recorded in the previous Tariff Orders, the Commission had been approving
opening GFA for the nine old LHPs as on 14.01.2000, as Rs. 506.17 Crore. Since, the Transfer Scheme
is yet to be finalized, the Commission for the purpose of determination of ARR for FY 2018-19 is
considering the opening GFA of nine old LHPs, as on 14.01.2000, as Rs. 506.17 Crore only. Further,
as discussed in the Chapter 3 of this Order, the Commission has revised the Original Cost of
Khatima LHP as on 1.4.2015 on account of de-capitalisation of Rs. 2.03 Crore carried out in FY 2014-
15. The GFA considered are as per the details given below:
Table 4.4: Approved Original Cost inherited from UPJVNL (Rs. Crore)
Name of the Generating Stations
Claimed Approved as on
14.01.2000 Approved as on
01.04.2016
Dhakrani 12.40 12.40 12.40
Dhalipur 20.37 20.37 20.37
Chibro 87.89 87.89 87.89
Khodri 73.97 73.97 73.97
Kulhal 17.51 17.51 17.51
Ramganga 50.02 50.02 50.02
Chilla 124.89 124.89 124.89
MB-I* 111.93 111.93 111.93
Khatima 7.19 7.19 5.16**
Total 506.17 506.17 504.14 *Including DRB
**Excluding de-capitalisation of Rs. 2.03 Crore in FY 2014-15
B. Maneri Bhali-II
As detailed earlier in Chapter 3, the Commission has considered the capital cost as on CoD
of Rs. 1885.50 Crore in accordance with the Orders dated 05.04.2016 and 29.03.2017. The financing
for the project has been considered same as approved in MYT Order dated 05.04.2016 as shown in
the Table below:
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
84 Uttarakhand Electricity Regulatory Commission
Table 4.5: Approved Capital Cost and Financing for MB-II as on CoD (Rs. Crore)
Particulars Approved in Order dated 05.04.2016 Approved Now
Loans
PFC Loan 1200.00 1200.00
Unpaid Liability 0.00 0.00
Guarantee Fee Payable 0.00 0.00
Normative Loan 119.85 119.85
Total debts 1319.85 1319.85
Equity
PDF 326.76 326.76
GoU Budgetary support 74.89 74.89
Pre-2002 expense 164.00 164.00
Total Equity 565.65 565.65
Total Loan and Equity 1885.50 1885.50
4.3.3 Additional Capitalisation
A. Old Nine Generating Stations
The Commission in addition to the opening GFA of Rs. 506.17 Crore as on 14.01.2000, has
also approved additional capitalisation of Rs. 276.48 Crore for the period 01.04.2001 to 31.03.2017 in
Chapter 3 of this Order and de-capitalisation of Rs. 2.03 Crore in FY 2014-15 as approved in its MYT
Order dated 05.04.2016 as shown in Table below:
Table 4.6: GFA considered by the Commission for 9 LHPs upto 31.03.2017 (Rs. Crore)
Name of the Generating
Stations
Opening GFA
claimed as on
14.01.2000
Opening GFA
Approved as on
14.01.2000
Additional Capitalization Claimed from 01.04.2001 to
31.03.2017
Additional Capitalization
Approved from 01.04.2001 to
31.03.2017
Total GFA claimed
upto 31.03.2017
Total GFA approved
upto 31.03.2017
Dhakrani 12.40 12.40 9.04 6.41 21.44 18.81
Dhalipur 20.37 20.37 8.54 5.31 28.91 25.68
Chibro 87.89 87.89 37.28 31.43 125.17 119.32
Khodri 73.97 73.97 20.37 20.31 94.34 94.28
Kulhal 17.51 17.51 4.44 3.57 21.95 21.08
Ramganga 50.02 50.02 6.62 6.63 56.64 56.65
Chilla 124.89 124.89 42.43 21.64 167.32 146.53
MB-I 111.93 111.93 35.61 35.74 147.54 147.67
Khatima 7.19 7.19 145.79 143.42** 152.98 150.61**
Total 506.17 506.17 310.12 274.46 816.29 780.63 **Including de-capitalisation of Rs. 2.03 Crore in FY 2014-15
UJVN Ltd. in its current Petition submitted the projected additional capitalization details for
FY 2017-18 and FY 2018-19 as shown in the Table below:
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 85
Table 4.7: Additional Capitalisation projected by the Petitioner for FY 2017-18 and FY 2018-19 (Rs. Crore)
Name of the Generating Stations FY 2017-18 FY 2018-19
Dhakrani 13.24 34.25
Dhalipur 9.57 28.54
Chibro 50.59 50.23
Khodri 34.94 56.61
Kulhal 16.93 22.25
Ramganga 33.25 14.13
Chilla 24.74 37.54
Maneri Bhali-I 7.38 37.81
Khatima 44.36 53.56
Total 235.01 334.91
The Commission observed that, as compared to previous years, the Petitioner has projected
exorbitantly high amount of capitalization in FY 2017-18 and FY 2018-19 and the same is much
higher than the additional capitalisation approved by the Commission in Order dated 29.03.2017
and 05.04.2016 respectively. The Commission directed UJVN Ltd. to submit the reasons for the
same. In response, UJVN Ltd. vide its letter dated 22.12.2017 submitted that the Commission in its
previous orders has approved additional capitalization only for RMU and DRIP works. However,
in the instant Petition, the Petitioner has projected the additional capitalization which also include
other works, not covered in RMU or DRIP works, but are necessary for the safe and efficient
operations of the Power Stations.
4.3.3.1 RMU Works and DRIP
4.3.3.1.1 RMU Works
The Petitioner in the instant Petition has projected an amount of Rs. 30.00 Crore in case of
MB-I HEP, Rs. 23.00 Crore in case of Dhakrani HEP and Rs. 25.00 Crore in case of Dhalipur HEP
towards the RMU works for FY 2017-18 and FY 2018-19 as shown in Table below:
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
86 Uttarakhand Electricity Regulatory Commission
Table 4.8: Expenditure for RMU projected by the Petitioner for FY 2017-18 and FY 2018-19 for 9 LHPs (Rs. Crore)
Name of the Generating
Stations
FY 2017-18 FY 2018-19 Approved
in MYT Order dated
05.04.2016
Projected by the
Petitioner
Approved in Order dated 29.03.2017
Projected by the
Petitioner for FY 2018-19
Dhakrani 0.00 0.00 0.00 23.00
Dhalipur 32.60 0.00 36.38 25.00
Chibro 0.00 0.00 0.00 0.00
Khodri 0.00 0.00 0.00 0.00
Kulhal 0.00 0.00 0.00 0.00
Ramganga 0.00 0.00 0.00 0.00
Chilla 47.43 0.00 51.53 0.00
Maneri Bhali-I 0.00 0.00 0.00 30.00
Khatima 12.00 41.46 0.00 0.00
Total 92.03 41.46 87.91 78.00
With regards to the expenses of Rs. 30.00 Crore claimed under RMU for MB-I HEP, the
Commission vide its letter dated 23.01.2018 directed the Petitioner to submit the details of Rs. 30
Crore along with supporting documents, i.e. Agreement Copy and L1 Schedule. The Petitioner in
response submitted the copy of the Contract Agreement No. 02, 03 and 04/DGM (M&U-
GV)/Tiloth-RMU/2016-17 dated 14.12.2015 for comprehensive RMU of MB-I HEP and the
associated L1 Schedule. The Petitioner further submitted that in accordance with the contract
Agreement and L1 Schedule of the MB-I station, 10% of the supply portion of the contract, i.e. 10%
of Rs. 99.92 Crore amounting to around Rs. 10 Crore shall be paid to the Contractor on fulfilment of
following 5 Conditions:
a) Completion of site measurements of the existing hydro generating unit and related
cavity/space dimensioning for new design and engineering and handing back the
completely re-assembled unit in Working Conditions.
b) Submission of Model testing or CFD based model testing and analysis report whichever
is applicable as per the tender conditions and acceptance of the same by UJVN Ltd.
c) Submission of complete design analysis of Turbine, Generator and Associated
Auxiliaries.
d) Submission of complete sets of drawings of major design works of Turbine and
generator and acceptance of the same by UJVN Ltd.
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 87
e) Submission of documentary evidence regarding purchase of major raw material for
manufacturing of generating plants.
The Petitioner further submitted that the above conditions in case of RMU works of MB-I
LHP are expected to be fulfilled in FY 2018-19 and, therefore, amount is to be paid to the Contractor.
The Petitioner further submitted that as per L1 Schedule, first unit of MB-I LHP is to be handed over
to the contractor for Comprehensive RMU in December, 2018 which means all the supplies related
to one unit shall be delivered within FY 2018-19. It further submitted that considering the values of
supply pertaining to one unit to be around Rs. 30 Crore, 70% of the said amount, i.e. Rs. 21 Crore is
to be paid to the Contractor towards the supply of material. Accordingly, the Petitioner has
proposed the expenditure of Rs. 30 crore on RMU of MB-I.
The Commission has gone through the submissions of the Petitioner and has observed that
the RMU works of MB-I LHP are expected to start by December 2018 and with scheduled time of
completion of 1st Unit as per the past record of UJVN Ltd., the probability of capitalization of the
RMU expenses in FY 2018-19 is very less. Even going by the Petitioner’s submission, it has claimed
Rs. 30 Crore towards expenditure/advances to be paid to the supplier/contractor which will not be
capitalised till RMU of Unit-I is complete & will be treated as CWIP or advance. Therefore, the
Commission in this Order has not considered the additional capital expenditure of Rs. 30 Crore for
MB-I generating station for FY 2018-19.
Further, with regard to RMU works of Dhakrani generating station, the Commission vide its
letter dated 17.01.2018 directed the Petitioner to submit the unit-wise schedule of RMU to be
undertaken. The Petitioner in response vide its letter dated 02.02.2018 has submitted the Schedule of
RMU according to which it has planned to undertake Unit B under RMU by November 2018. Based
on the above submission, the Commission observes that tendering process for Dhakrani generating
station is yet to be finalized and Unit-B is expected to be taken under reverse engineering by end of
December, 2018 i.e. in the lean discharge period. The Commission is of the view that as the RMU
work of Unit B of the Dhakrani generating station is in the process of award, the expected
capitalisation of Rs. 23 Crore which can only be done once the RMU works gets completed may not
get completed in FY 2018-19. Therefore, the Commission in this Tariff Order has not considered the
additional capital expenditure of Rs. 23 Crore for Dhakrani LHP for FY 2018-19.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
88 Uttarakhand Electricity Regulatory Commission
In case of RMU of Dhalipur station, the Commission vide its letter dated 17.01.2018 directed
the Petitioner to submit the unit-wise schedule of RMU to be undertaken. The Petitioner in response
vide its letter dated 02.02.2018 has submitted the Schedule of RMU as under:
Unit A: November 2020 to May 2021
Unit B: November 2018 to May 2019
Unit C: November 2019 to May 2020
In view of the above submission of the Petitioner, the Commission observes that in case of
Dhalipur HEP, the Petitioner has projected the time schedule of November 2018 to May 2021 for
completion of RMU works. The Commission in its MYT Order dated 05.04.2016 had already
approved additional capitalisation of Rs. 32.60 Crore for FY 2017-18 and Rs. 36.38 Crore for FY 2018-
19 for RMU works, subject to truing-up as under:-
“...Additional capitalisation for Second Control Period for Dhalipur HEP has also been provisionally
allowed since the Petition for the same has been submitted before the Commission subject to the
detailed scrutiny of the Petition at the Commission’s end...”
As there is nothing new and substantial in the Petitioner’s claim for additional capitalisation
for Dhalipur LHP, the Commission has provisionally approved the additional capitalization for
Dhalipur LHP same as that approved in MYT Order dated 05.04.2016.
In case of RMU of Khatima LHP, the Petitioner vide its letter dated 02.02.2018 has claimed
the additional capitalisation of Rs. 10.99 Crore for FY 2017-18 and Rs. 16.86 Crore for FY 2018-19
towards works under RMU as under:
Table 4.9: Additional Capitalization claimed under RMU works for Khatima LHP for FY 2017-18 and FY 2018-19 (Rs. Crore)
Sl. No.
Particulars FY
2017-18 FY
2018-19
A E&M
Turbine and Generator
1 Turbine and associated equipment(new item- Misc. item and Instruments for Turbine Guide Bearing
1.27 -
2 Plant SCADA (Centralised control, outlet works control, data acquisition & local communication)
0.43 -
Services and Spares
1 Freight, insurance, taxes on Plant & Equipment - -
2 Refurbishment of Stator and services 5.93 -
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 89
Table 4.9: Additional Capitalization claimed under RMU works for Khatima LHP for FY 2017-18 and FY 2018-19 (Rs. Crore)
Sl. No.
Particulars FY
2017-18 FY
2018-19
Total E&M 7.63 0.00
B Hydro-Mechanical Works
1 Intake gates dogging/storage arrangement, replacement wheel assslly. 0.10 -
2 Draft tube gate &hoist:-New two sets of gates, renovation of existing 1 set gate, provision for holding gates in open condition. Gates are in 2 tier. Lower tier gate 16 ft high &17 ft wide, upper tier gate 24 ft high & 17 ft wide
0.26 -
Total Hydro-Mechanical 0.36 0.00
C Additional Works (after dismantling/reverse engineering), other than RMU contract agreement
1 Additional Order of E&M equipment- Sole plate of Lower Brackets 0.00 -
2 Supply and Installation of new Diffusers - 16.86
3 New Lower Bracket of machine no. 3 0.85 -
4 Supply and Fixing of 2 numbers 50 kL MS Water Tanks along with accessories for Shaft Seal System
0.74 -
5 Supply and Installation of New LED Lighting System 1.40 -
Total additional works 3.00 16.86
Total expenses claimed under R&M 10.99 16.86
From the above table, the Commission observes that the above works claimed under RMU
pertains to the deferred works as the CoD, i.e. 06.04.2015 for Machine-1, 28.04.2016 for Machine-2
and 08.09.2016 for Machine-3 installed under RMU of Khatima LHP. It is also observed that the
Petitioner has claimed the above works upto the cut-off date, i.e. 31.03.2019 of the RMU works
under Khatima LHP. Therefore, the Commission has taken a serious note of the same and directs
the Petitioner to complete all the works covered under RMU of Khatima LHP latest by the cut-off
date, i.e. 31.03.2019, beyond which no expense (including IDC) in this regard would be allowed.
Further with regard to the above submission of the Petitioner regarding the RMU works for
Khatima LHP, the Commission observes that the Petitioner has claimed the expenditure towards
the repair and procurement of new Diffuser for Rs. 16.86 Crore in FY 2018-19. Further, the Petitioner
vide its letter dated 22.12.2017 has also proposed cost of Rs. 40.91 Crore towards construction of a
Bypass channel stating that the diffuser in not fully reliable. The Commission vide its letter dated
05.01.2018 directed UJVN Ltd. to submit proper justification for first incurring cost towards repair
of damaged diffusers and then incurring cost towards procuring new diffusers and the current
proposal for construction of Bypass Channel. The Petitioner in response vide letter dated 15.01.2018
submitted that originally diffusers were installed in 1955-56 and were under water operation since
62 years. Therefore, these originally installed diffusers have outlived their useful life and are in the
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
90 Uttarakhand Electricity Regulatory Commission
process of replacement with newly procured diffusers to ensure the safety of the Plant. The
Petitioner has further submitted that such newly installed diffuser are reliable and capable of
performing its function but these are of the category of Electro mechanical items of the power plant
which have their own limitations of operation and there is always a possibility of occurrence of
various faults in the underwater E&M equipment like blockage due to wooden piece, debris,
pebbles or any other material like silts etc., non development of desired pressure due to power
failure or any leakage of oil or any sudden incidents. For avoiding such catastrophe which may
possibly occur in the absence of the backing up E&M equipment by the provision of civil structure,
construction of Bypass channel is proposed in accordance with Regulation 23 of the UERC Tariff
Regulation, 2015, under Renovation and Modernization of Khatima HEP.
With regard to the expenditure towards the repair and replacement of diffuser, the
Commission observed that the original diffusers were installed in 1955-56 and were working
smoothly until one set of original diffusers got damaged due to negligence of UJVN Ltd. in FY 2014-
15. The Commission further, observed that no such untoward incident had happened from the year
1955-56, i.e. from the CoD of the Plant and in FY 2014-15 the incident took place due to the
carelessness of the Petitioner’s Plant Staff. Thereafter, UJVN Ltd. proposed replacement of all the
original diffusers under the RMU works which was agreed by the Commission vide its Order dated
07.05.2015.
Therefore, regarding the expenditures claimed towards the Bypass channel of Khatima LHP
as alternate of diffusers in case of any exigency, the Commission is of the view that this would
certainly lead to double loading of expenses on the consumers of the State. Hence, the Commission
is not approving the proposed expenditure towards Bypass channel. The Commission has,
however, not revised the additional capitalisation for FY 2018-19 and has considered the additional
capitalisation approved by it in its MYT Order. The Commission shall consider the actual expenses
once the audited cost is available at the time of truing-up of FY 2018-19.
4.3.3.1.2 DRIP Works
The Petitioner in the instant Petition has projected the expenditure of Rs. 57.44 Crore for FY
2017-18 and Rs. 33.88 Crore for FY 2018-19 under DRIP Scheme as under:
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 91
Table 4.10: Additional Capitalization claimed under DRIP Scheme for FY 2017-18 and FY 2018-19 (Rs. Crore)
Name of the Generating Stations FY 2017-18 FY 2018-19
Dhakrani 7.54 0.00
Dhalipur 2.09 0.00
Chibro 17.45 14.97
Khodri 4.93 0.00
Kulhal 8.14 3.72
Chilla 17.29 14.49
Maneri Bhali-I 0.00 0.70
Total 57.44 33.88
With regard to the additional capitalisation for DRIP Scheme, the Commission vide its Order
dated 29.04.2016 had given approval for only 1 TRCM (Trash Rack Cleaning Machine), i.e. for Asan
Barrage. However, UJVN Ltd. in its claim has proposed 3 TRCM Machines for Assan Barrage, Ichari
Dam and Dakpathar Barrage. The Commission vide its letter dated 19.01.2018 directed the
Petitioner to justify the same. The Petitioner vide its reply dated 02.02.2018 submitted that the
capacity of TRCM installed at Ichari Dam for Chibro Power House is degraded and also the spare
parts for the same are not available due to its old design and technology. Further, the Petitioner
submitted that the said work and the related bid document have been accepted by World Bank
India under DRIP Scheme as the budget for the same will be acquired from World Bank India.
As already discussed in Chapter 3 with regard to works carried out under DRIP Scheme, the
Commission based on the submissions of the Petitioner in its MYT Order has already approved
DRIP works for the second Control Period. The Commission observed that since the works under
the DRIP Scheme has not been capitalised yet, therefore, the capitalisation proposed by Petitioner
under DRIP Scheme has not been allowed. The Commission shall carry out detailed prudence check
of the expenses capitalised under DRIP scheme once audited cost is available.
4.3.3.2 Construction of New Multi-Storied Residential and Office Buildings in Dehradun
With regard to construction of New Multi-Storied Residential and Office Buildings in
Dehradun the Petitioner has claimed expenditure for FY 2017-18 and 2018-19 as given in Table
below:
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
92 Uttarakhand Electricity Regulatory Commission
Table 4.11: Additional Capitalization claimed for New Multi-Storied Residential and Office Buildings in Dehradun for FY 2017-18 and FY 2018-19 (Rs. Crore)
Name of the Generating Stations FY 2017-18 FY 2018-19
Dhakrani 0.78 1.66
Dhalipur 1.18 2.51
Chibro 5.53 11.81
Khodri 2.77 5.90
Kulhal 0.69 1.48
Ramganga 4.56 9.74
Chilla 3.32 7.09
Maneri Bhali-I 2.07 4.43
Khatima 0.95 2.04
Total for 9 LHPs 21.85 46.66
MB-II 2.57 5.49
SHPs 1.29 2.74
Grand Total for 10 LHPs & SHPs 25.71 54.89
Further, with regard to construction of new multi-storied residential and office building in
Dehradun, the Petitioner has submitted that UJVN Ltd. in its last APR Petition for FY 2016-17 had
proposed construction of new multi-storied residential buildings in Yamuna Colony Dehradun and
Office building in Ujjwal premises, Dehradun. The Petitioner proposed three multi storied
buildings, 01 tower (type-IV, 3+1 BHK, super area for each unit of 224.48 Sq.m.) for senior officers
with designation DGM and above, 01 tower (type-III, 3 BHK, super area for each unit 170.20 Sq.m.)
for officers of EE/AE level and 01 tower (type-II, 2 BHK, super area for each unit=115.05 Sq.m.) for
staff class-III, in order to meet the short fall of residences for Nigam employees posted in Dehradun.
The Petitioner further submitted that each tower shall consist of 9+ stilt (10 floors) with each tower
having total 36 units (04 units on each floor).
The Petitioner has further submitted that the Commission in Tariff Order dated March 29,
2017 had not denied approval for residential building but directed to work out the Cost benefit
analysis for the same after getting the approval from BoD. Further, the Petitioner also submitted
that most of the residences of Yamuna Colony are worn out due to aging and are in a very bad
condition, which are prone to possibilities of occurrence of accidents. The Petitioner submitted that
considering the limited availability and huge cost of land these residential buildings are proposed
to be multi storied and involve the latest state of art of structural engineering. Thus, an independent
consultant was involved in study and preparation of DPR. Further, the Training Centre Cum Sports
Complex would comprise of a Training Centre form which will be a major part as it will be helpful
in providing in-house training as well as lectures which in turn will convert into efficient working
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 93
of the organization. Further, sports and gym section shall be helpful in creating healthy
environment. The Petitioner further stated that there is no need of prior approval for the additional
capital expenditure proposed for Training Centre Cum Sports complex as well as Multi storied
building which is the need of time and should be allowed in view of necessities as mentioned
above. The Petitioner further requested the Commission to consider the need for Training Centre
Cum Sports complex as well as Multi storied building and allow the proposed expenditure under
additional Capitalization.
The Commission in its Tariff Order dated 29.03.2017 had granted in-principle approval for
works pertaining to the office building excluding the cost of sports complex. However, the
Commission had not approved the expenditure towards multi storied residential buildings as the
same was not approved by the BoD of the Petitioner. The year-wise expenses claimed by the
Petitioner for office & residential building is shown in the Table given below:
Table 4.12: Details of Office & Residential Building as claimed by the Petitioner (Rs. Crore)
Particulars Estimated/agreement cost
(Crore)+GST
FY 2016-17 (Rs. In Crore)
FY 2017-18 (Rs. In Crore)
FY 2018-19 (Rs. In Crore)
Remarks
Construction of Office Building
29.37 - 10.00 19.37 GST have not been included
Training Centre cum Sports Complex
2.70 - 0.50 2.21
Residential buildings (3+1 BHK / 3 BHK / 2BHK)
55.50 - - 5.00
Total 87.57 - 10.5 26.58
It is observed that the Petitioner has claimed the proposed expenses towards construction of
new multi-storied residential and office building in Dehradun stating that more residential
accommodation is required for its employees as staff strength is increasing day by day in order to
meet the growing challenges of the Company. In this regard, the Commission observed from the
historical data that the number of employees of UJVN Ltd. were 2289 as on 31.3.2013. However, as
submitted by the Petitioner in its letter dated 22.12.2017, the projected number of employees
claimed by the Petitioner works out to 2157 as on 31.03.2019. From the above data, it is observed
that the number of employees of UJVN Ltd. has decreased from FY 2012-13 to FY 2018-19, however,
the Petitioner has still claimed three towers consisting of 9+ stilt (10 floors) with each tower having
total 36 units (04 units on each floor). It emerges from the above data that the Petitioner was able to
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
94 Uttarakhand Electricity Regulatory Commission
manage accommodation to its employees in FY 2012-13, when the number of employees were even
more than that proposed in FY 2018-19. Further, the residential building would not cater to all the
employees of UJVN Ltd & some employees will have to manage their own accommodation.
Further, as of now since the employees of the Petitioner’s Company are managing without the
employer provided accommodations, they can also do so in future also. It would be clear that any
expenses towards employee benefits like accommodation elsewhere other than Plant colonies,
sports complex, etc. will have to be borne by the Company out of its own resources & will not be
passed on to the consumers. Regulations clearly stipulates that Additional Capitalization for the
generating station and not for expenses towards the pooled colonies outside the generating stations.
Accordingly, the Commission is of the view that the rationale provided by the Petitioner for
claiming the above proposed expenses is not justifiable, and therefore the same has not been
approved.
4.3.3.3 Other Additional Capital Works
Details of the expenditures projected for additional capital works other than RMU, DRIP
and Office & Residential Building for FY 2017-18 and FY 2018-19 are shown in Table below:
Table 4.13: Additional Capitalization claimed for works other than RMU, DRIP and Office & Residential Building for FY 2017-18 and FY 2018-19 (Rs. Crore)
Name of the Generating Stations FY 2017-18 FY 2018-19
Dhakrani 4.93 9.59
Dhalipur 6.30 1.03
Chibro 27.61 23.45
Khodri 27.25 50.70
Kulhal 8.10 17.05
Ramganga 28.69 4.39
Chilla 4.13 15.96
Maneri Bhali-I 5.31 2.68
Khatima 1.95 51.52
Total 114.27 176.37
With regard to the additional capitalization claimed for Khodri LHP, the Commission
observed that the Petitioner in its claim for additional capitalization for FY 2018-19 has submitted an
expenditure of Rs. 20.00 Crore for Construction of 1 no. 220 kV feeder Bay at Switch yard Khodri
Power Station for Barnigad SHP. The said expenditure has been proposed in order to evacuate
power from Barnigad SHP. In this regard, as per UERC (Tariff and other terms of supply of
electricity from renewable energy sources and non-fossil fuel based co-generating stations)
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 95
Regulations, 2013, it is the duty of the licensee to provide connectivity to the RE based generating
station. However, the generator has an option to construct the evacuation system wherein the cost
has to be borne by it. Therefore, such works should not be carried out by UJVN Ltd. and should be
carried out by the licensee or the RE generator. Accordingly, the Commission has not considered
the said expenditure as the same doesn’t form part of Khodri LHP.
The Commission has gone through the submissions of the Petitioner with regards to other
additional capital expenditure claimed now in the instant tariff Petition and is of the view that since
no major works have been proposed by the Petitioner, the Commission finds no reason to deviate
from the earlier approved additional capitalisation in MYT Order dated 05.04.2016.
In view of the above, the Commission has approved the additional capitalization for FY
2017-18 and FY 2018-19 same as that approved in its Order dated 29.03.2017 and MYT Order dated
05.04.2016 respectively. In case of any variations in actual capitalisation with respect to the
approved capitalisation for the approved works, the Commission shall consider the same on actual
basis subject to prudence check at the time of truing-up in accordance with the UERC Tariff
Regulations, 2015.
In view of the above submissions, the Commission has considered the capitalisation of Rs.
92.03 Crore for FY 2017-18 and Rs. 87.91 Crore for FY 2018-19. Accordingly, additional capitalisation
approved for FY 2017-18 and FY 2018-19 is as follows:
Table 4.14: Additional Capitalization as approved for 9 LHPs for FY 2017-18 and FY 2018-19 (Rs. Crore)
Particulars
FY 2017-18 FY 2018-19
Approved in Order dated
29.03.2017 Claimed
Approved Now
Approved in MYT Order dated
05.04.2016 Claimed
Approved Now
Dhakrani 0.00 13.24 0.00 0.00 34.25 0.00
Dhalipur 32.60 9.57 32.60 36.38 28.54 36.38
Chibro 0.00 50.59 0.00 0.00 50.23 0.00
Khodri 0.00 34.94 0.00 0.00 56.61 0.00
Kulhal 0.00 16.93 0.00 0.00 22.25 0.00
Ramganga 0.00 33.25 0.00 0.00 14.13 0.00
Chilla 47.43 24.74 47.43 51.53 37.54 51.53
MB-I 0.00 7.38 0.00 0.00 37.81 0.00
Khatima 12.00 44.36 12.00 0.00 53.56 0.00
Total 92.03 235.01 92.03 87.91 334.91 87.91
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
96 Uttarakhand Electricity Regulatory Commission
With regards to funding of works to be done by the Petitioner, the Commission vide its
letter dated 05.01.2018 sought details of funding of additional capitalization claimed by UJVN Ltd.
for FY 2017-18 and FY 2018-19 along with the documentary evidence of any budgetary support
received from GoU or relevant management approval. The Petitioner in response vide its letter
dated 15.01.2018 submitted that GoU has already committed equity support for Vyasi (120
MW)/RMU projects / SHP Projects. The Petitioner further submitted that in FY 2018-19 final
Investment clearance of GoI for Lakhwar Project (300 MW) is expected and GoU will provide equity
for the same, therefore, funding for additional capitalization from GoU is not possible. Therefore,
funding of additional capitalization claimed is being planned through internal accruals of UJVN
Ltd. The Petitioner further submitted that for capital expenditure to be incurred in FY 2017-18 and
FY 2018-19, the possibilities of debt funding is being explored by the Petitioner.
The Commission has examined the matter and as the funding pattern is yet to be finalised
by UJVN Ltd., the Commission at this stage has considered the approved additional capitalization
to be funded through normative debt equity ratio of 70:30. The Commission will consider the actual
funding at the time of truing-up based on the prudence check.
B. Maneri Bhali-II
The Commission, as discussed earlier has approved that additional capitalisation since CoD
of the project and has approved additional capitalisation of Rs. 314.51 Crore till 31.03.2017.
Table 4.15: Opening GFA for MB-II as considered by the Commission for FY 2017-18 (Rs. Crore) Particulars Amount
Capital Cost 1885.50
Additional Capitalization from FY 2007-08 to FY 2015-16 259.44
Additional Capitalization during FY 2016-17 55.07
Opening GFA for FY 2017-18 2200.01
The Petitioner submitted the likely additional capitalisation to be incurred in FY 2017-18 and
FY 2018-19 as Rs. 41.64 Crore and Rs. 31.10 Crore, respectively.
As discussed in Chapter 3 of this Order, the Commission directed UJVN Ltd. to submit
proper justification towards increase in the balance capital expenditure works along with the status
of balance capital works completed and projected to be completed in FY 2017-18 and FY 2018-19
and submit its revised claim of additional capitalisation for FY 2017-18 and FY 2018-19. In response,
UJVN Ltd. vide letter dated 02.02.2018 has submitted the details of revised claim of actual and
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 97
projected additional capitalisation of MB-II LHP for FY 2017-18 and FY 2018-19 along with the
details of Balance Capital Works and additional capitalisation (Civil works) for FY 2017-18 and FY
2018-19. The revised additional capitalisation claimed by the Petitioner for FY 2017-18 and FY 2018-
19 for MB-II is as follows:
Table 4.16: Revised Additional Capitalisation claimed by the Petitioner for MB-II for FY 2017-18 and FY 2018-19 (Rs. Crore)
S. No. Particulars FY 2017-18 FY 2018-19
1 Works covered under Balance Capital Works Petition (details enclosed in Annexure 7 of this Order)
21.56 13.46
2 Other works (works not covered under Balance Capital Works) 31.04 28.39
Total 52.60 41.85
Further, the detail of the Revised Additional Capitalisation claimed by the Petitioner for MB-
II for FY 2017-18 and FY 2018-19 is annexed as Annexure 7.
With regard to the additional capitalization, the Commission in its Tariff Order dated
05.04.2016 had allowed additional capitalisation of Rs. 211.72 Crore, however, the Petitioner in its
Tariff Petition for FY 2017-18 had revised the projection to Rs. 238.62 Crore to be incurred till FY
2018-19. Further, the Petitioner in the current Tariff Petition has again revised the projection to Rs.
252.07 Crore till FY 2018-19. The Commission has observed that the Petitioner has incurred Rs.
217.05 Crore (i.e. Rs. 190.06 Crore upto 31.03.2016+ Rs. 26.99 Crore in FY 2016-17) upto FY 2016-17
and is projecting to incur total Rs. 252.07 Crore by FY 2018-19 against balance capital works of MB-II
HEP.
Based on the above observations, the Commission is of the view that the Petitioner is
adopting a callous approach and is deferring important works like testing of surge shaft, which is
certainly not in the interest of UJVN Ltd. Therefore, the Commission has taken a serious note of
the same and directs the Petitioner to complete all the works covered in the Petition of balance
capital works of MB-II HEP latest by 31.03.2019, beyond which no expense (including IDC) in
this regard would be allowed.
As there is nothing new and substantial in the claim for additional capitalisation proposed in
FY 2017-18 and FY 2018-19 for MB-II generating station, the Commission at this stage doesn’t find
any reason to approve any additional capitalisation for FY 2017-18 and FY 2018-19 in line with the
approach adopted in MYT Order dated 05.04.2016 and Tariff Order dated 29.03.2017. Additional
capitalisation, if any, shall be considered on actual basis subject to prudence check.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
98 Uttarakhand Electricity Regulatory Commission
4.3.4 Depreciation
A. Old Nine Generating Stations
Regulation 28 of the UERC Tariff Regulations, 2015 specifies as follows:
“28. Depreciation
(1) The value base for the purpose of depreciation shall be the capital cost of the asset admitted by
the Commission.
Provided that depreciation shall not be allowed on assets funded through Consumer Contribution
and Capital Subsidies/Grants.
(2) The salvage value of the asset shall be considered as 10% and depreciation shall be allowed up
to maximum of 90% of the capital cost of the asset.
...
(4) Depreciation shall be calculated annually based on Straight Line Method and at rates specified
in Appendix - II to these Regulations.
...”
The Petitioner submitted that UERC Tariff Regulations, 2015 are applicable from 01.04.2016.
Further, UERC Tariff Regulations, 2011, is applicable for the period 01.04.2013 to 31.03.2016. Hence,
till FY 2012-13, the Petitioner calculated depreciation based on Tariff Regulations 2004. The
Petitioner has claimed depreciation considering the applicable Regulations.
The Commission in accordance with Regulation 28 of UERC Tariff Regulations, 2015 has
computed the depreciation for FY 2018-19 of the second Control Period as detailed below:
(i) Depreciation on Opening GFA as on 14.01.2000: All the 9 LHPs are over 12 years old
and 7 out of 9 stations have already depreciated by 90% of the original cost. Depreciation
allowed till date for Khodri, and MB-I LHPs have not reached 90%, the Commission has
computed the accumulated depreciation till 31.03.2017 to determine the remaining
depreciable value for each LHP. The Commission for computing the accumulated
depreciation till 31.03.2013 has considered the depreciation rate of 2.38% as considered in
previous Tariff Orders. Further, in accordance with UERC Tariff Regulations, 2011 and
UERC Tariff Regulations, 2015 and considering the life of 35 years from the CoD, the
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 99
Commission has equally divided the remaining depreciable value as on 01.04.2016 on the
remaining useful life of each LHP.
(ii) Depreciation on additional capitalisation: For the asset added during the period from
FY 2001-02 to FY 2015-16, the Commission has computed the depreciation in accordance
with the provisions of UERC Tariff Regulations, 2004 and UERC Tariff Regulations, 2011.
In accordance with the UERC Tariff Regulations, 2015 the Commission has computed the
balance depreciable value for assets added in each year after January 2000 by deducting
the cumulative depreciation as admitted by the Commission upto 31.03.2016 from the
gross depreciable value of the assets. The Commission further, computed the difference
between the cumulative depreciation as on 31.03.2016 and the depreciation so arrived at
by applying the depreciation rates as specified in UERC Tariff Regulations, 2015
corresponding to 12 years. The Commission has spread over the above difference in the
remaining period upto 12 years of such asset addition. Further, in case where the asset
life has crossed 12 years from the year of addition, the remaining depreciable value as on
31st March of the year closing has been spread over the balance life.
In line with the above approach, the Commission has computed the depreciation for 9 LHPs
for FY 2018-19 based on closing GFA for FY 2017-18 and without considering the asset addition
during FY 2018-19 since the Petitioner capitalises the assets at the end of the Financial Year. The
summary of Depreciation Charges for FY 2018-19 as approved by the Commission is shown in the
Table below:
Table 4.17: Depreciation Charges as approved by the Commission for 9 LHPs for FY 2018-19 (Rs. Crore)
Name of the Generating
Stations
Approved in MYT Order dt. 05.04.2016
Claimed
Approved in this Order
On opening GFA as on 14.01.2000
On Additional Capitalization
Total On opening GFA as on 14.01.2000
On Additional Capitalization
upto FY 2017-18 Total
Dhakrani 0.00 0.59 0.59 1.17 0.00 0.38 0.38
Dhalipur 0.00 3.01 3.01 0.99 0.00 2.04 2.04
Chibro 0.00 1.46 1.46 4.53 0.00 1.66 1.66
Khodri 0.59 0.81 1.40 3.49 0.59 1.13 1.72
Kulhal 0.00 0.66 0.66 1.14 0.00 0.21 0.21
Ramganga 0.00 0.27 0.27 2.03 0.00 0.33 0.33
Chilla 0.00 3.24 3.24 3.02 0.00 3.37 3.37
MB-I 2.53 3.87 6.40 5.00 2.58 1.59 4.16
Khatima 0.00 5.05 5.05 10.03 0.00 8.17 8.17
Total 3.12 18.96 22.08 31.39 3.17 18.87 22.04
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
100 Uttarakhand Electricity Regulatory Commission
B. Maneri Bhali-II
As regards the depreciation for MB-II for FY 2018-19 of the second Control Period, the
Commission in accordance with the UERC Tariff Regulations, 2015 has computed the balance
depreciable value for MB-II by deducting the cumulative depreciation as admitted by the
Commission upto 31.03.2016 from the gross depreciable value of the assets. The Commission
further, computed the difference between the cumulative depreciation as on 31.03.2016 and the
depreciation so arrived at by applying the depreciation rates as specified in UERC Tariff
Regulations, 2015 corresponding to 12 years. The Commission has spread over the above difference
in the remaining period upto 12 years from the CoD of MB-II.
In line with the above approach, the Commission has computed the depreciation for MB-II
for FY 2018-19. The total depreciation for MB-II for FY 2018-19, accordingly, works out as shown in
the Table below:
Table 4.18: Depreciation charges as approved by the Commission for MB-II for FY 2018-19 of second Control Period (Rs. Crore)
Particular Approved in MYT Order dated
05.04.2016 Claimed Approved in this Order
Depreciation 58.81 72.84 63.00
4.3.5 Return on Equity
A. Old Nine Generating Stations
Regulation 26 of the UERC Tariff Regulations, 2015 specifies as follows:
“26. Return on Equity
(1) Return on equity shall be computed on the equity base determined in accordance with Regulation
24.
Provided that, Return on Equity shall be allowed on account of allowed equity capital for the assets
put to use at the commencement of each financial year.
(2) Return on equity shall be computed on at the base rate of 15.50% for thermal generating stations,
transmission licensee, SLDC and run of the river hydro generating station and at the base rate of
16.50% for the storage type hydro generating stations and run of river generating station with
pondage and distribution licensee on a post-tax basis.”
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 101
The Petitioner has submitted that it has claimed RoE in accordance with the aforesaid
Regulations at the rate of 16.50% for Chibro, Khodri, Ramganga & MB-I and at the rate of 15.50% for
Dhakrani, Dhalipur, Kulhal, Chilla & Khatima on post tax basis. The Petitioner further submitted
that it may be allowed to recover Income Tax as per Regulations 34 of UERC Tariff Regulations,
2015 which stipulates as follows:
“Income Tax, if any, on the income stream of the regulated business of Generating Companies,
Transmission Licensees, Distribution Licensees and SLDC shall be reimbursed to the Generating
Companies, Transmission Licensees, Distribution Licensees and SLDC as per actual income tax paid,
based on the documentary evidence submitted at the time of truing up of each year of the Control Period,
subject to the prudence check.”
The Commission has allowed RoE at the rate of 16.50% for Chibro, Khodri, Ramganga &
MB-I and at the rate of 15.50% for Dhakrani, Dhalipur, Kulhal, Chilla & Khatima as per Regulation
26 of UERC Tariff Regulations, 2015. Further, pending finalisation of the Transfer Scheme and in
view of equity erosion due to de-capitalisation of Rs. 2.03 Crore in FY 2014-15 in Khatima LHP of
the Petitioner, the Commission had allowed RoE on the provisional value of the opening equity of
Rs. 150.58 Crore in accordance with the directions of the Hon’ble Appellate Tribunal for Electricity
issued in the Order dated 14.09.2006 (Appeal No. 189 of 2005), and detailed in the Commission’s
Order dated 14.03.2007. As regard RoE on additional Capitalisation, the Commission has
considered a normative equity of 30% where entire financing has been done through internal
resources and on actual basis in other cases subject to a ceiling of 30% as specified in the
Regulations. Further, with regard to recovery of income tax paid the Commission is of the view that
Regulation 34 of UERC Tariff Regulations, 2015 allows recovery of actual tax paid, subject to
submission of documentary proof. Therefore, the Petitioner is entitled to claim the same at the time
of truing-up as per the actuals in accordance with the Regulations 34 of UERC Tariff Regulations,
2015.
As Transfer Scheme is yet to be finalized, the Commission is provisionally allowing a return
on normative equity at the rate of 16.50% for Chibro, Khodri, Ramganga & MB-I and at the rate of
15.50% for Dhakrani, Dhalipur, Kulhal, Chilla & Khatima in accordance with the provisions of
UERC Tariff Regulations, 2015. The summary of the Return on Equity approved for 9 LHPs for FY
2018-19 of second Control Period is shown in the Table given below:
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
102 Uttarakhand Electricity Regulatory Commission
Table 4.19: Return on Equity for Nine Old LHPs for FY 2018-19 (Rs. Crore)
Name of the Generating
Stations
Approved in MYT Order dt. 05.04.2016
Claimed
Approved in this Order
On Transferred Asset as on 14.01.2000
On Additional Capitalisation
Total
On Transferred Asset as on 14.01.2000
On Additional Capitalisation
Total
Dhakrani 0.58 0.59 1.16 1.61 0.58 0.30 0.87
Dhalipur 0.95 3.04 3.99 1.79 0.95 1.76 2.71
Chibro 4.35 1.40 5.75 8.70 4.35 1.53 5.88
Khodri 3.66 0.73 4.39 6.40 3.66 0.99 4.66
Kulhal 0.81 0.69 1.50 1.81 0.81 0.17 0.98
Ramganga 2.48 0.28 2.76 4.45 2.48 0.33 2.80
Chilla 5.81 3.00 8.81 8.93 5.81 1.40 7.21
Maneri Bhali-I 5.43 4.39 9.82 7.67 5.43 1.70 7.13
Khatima 0.33 4.68 5.02 9.18 0.24 8.83 9.07
Total 24.40 18.80 43.20 50.54 24.30 17.01 41.31
B. Maneri Bhali-II
As discussed above, the Commission has considered the Capital Cost as on CoD of Rs.
1885.50 Crore as approved by the Commission in its Order dated 05.04.2016 and in Order dated
29.03.2017. As per the financing considered by the Commission of the total approved Capital Cost
of Rs. 1885.50 Crore and additional capitalisation of Rs. 314.51 Crore till FY 2016-17, Rs. 647.89 Crore
[30% of (Rs. 1885.40 + Rs. 314.51 - Rs. 40.37)] have been funded through equity as already discussed
in Chapter 3 of this Order.
As discussed in above paras, the Commission has not allowed any additional capitalisation
in FY 2017-18, the total equity, thus, infused at the beginning of FY 2018-19 works out to Rs. 647.89
Crore. Out of it, Rs. 351.39 Crore had come through PDF. The Commission has not allowed the
Return on Equity on the contribution from PDF while approving AFC of the station for the
Petitioner for FY 2018-19 for reasons recorded in the respective Orders of the Commission. UJVN
Ltd. in its Petition submitted that it has considered Return on Equity on full equity including the
amount invested out of PDF in view of the Appeal filed with the Hon’ble APTEL in matter of RoE
on PDF for MB-II.
The Commission had not allowed Return on Equity on funds deployed by the GoU out of
PDF fund for reasons recorded in the previous Tariff Orders. Unlike other funds, available with the
Government, collected through taxes and duties, PDF is a dedicated fund created in accordance
with the provisions of the PDF Act passed by the GoU and the amount is collected directly from the
consumers through the electricity bills as the same forms part of the power purchase cost of UPCL
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 103
which in turn is loaded on to the consumers. PDF Act and Rules made there under, further, clearly
indicate that money available in this fund has to be utilized for the purposes of development of
generation and transmission assets in the State. Though UJVN Limited has filed an Appeal on this
issue before Hon’ble APTEL, however, no stay has been granted by Hon’ble APTEL. Therefore, the
Commission has adopted the same approach as adopted in previous Tariff Orders while allowing
Return on Equity for MB-II project.
The Commission has, therefore, considered the equity of Rs. 296.50 Crore eligible for return.
The Commission has computed the RoE at the rate of 16.50% as specified in UERC Tariff
Regulations, 2015. The summary of the Return on Equity approved for MB-II for FY 2018-19 is
shown in the Table given below:
Table 4.20: Return on Equity for MB-II for FY 2018-19 of second Control Period (Rs. Crore)
Particular Approved in MYT Order
dated 05.04.2016 Claimed Approved in this Order
Return on Equity 43.63 112.86 48.92
4.3.6 Interest on Loans
A. Old Nine Generating Stations
Regulation 27 of the UERC Tariff Regulations, 2015 specifies as follows:
“27. Interest and finance charges on loan capital and on Security Deposit
(1) The loans arrived at in the manner indicated in Regulation 24 shall be considered as gross
normative loan for calculation of interest on loan.
(2) The normative loan outstanding as on 1.4.2016 shall be worked out by deducting the
cumulative repayment as admitted by the Commission up to 31.3.2016 from the gross normative
loan.
(3) The repayment for each year of the Control Period shall be deemed to be equal to the
depreciation allowed for that year
...
(5) The rate of interest shall be the weighted average rate of interest calculated on the basis of the
actual loan portfolio of the previous year after providing appropriate accounting adjustment for
interest capitalised:
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
104 Uttarakhand Electricity Regulatory Commission
Provided that if there is no actual loan for a particular year but normative loan is still outstanding,
the last available weighted average rate of interest shall be considered.
Provided further that if the generating station or the transmission system or the distribution
system or SLDC, as the case may be, does not have actual loan, then the weighted average rate of
interest of the generating company or the Transmission Licensee or the Distribution Licensee or
SLDC as a whole shall be considered.
(6) The interest on loan shall be calculated on the normative average loan of the year by applying
the weighted average rate of interest.
…”
As discussed in Chapter 3 of this Order, the Commission has computed the weighted
average interest rate based on the outstanding loans for UJVN Ltd. except for loans taken for new
projects that are yet to achieve CoD. The interest rate based on the above works out to 11.42% in
case of Khatima LHP and 10.07% for other 8 LHPs. Thus, the Commission has considered the
interest rate of 11.42% in case of Khatima LHP and 10.07% for other 8 LHPs for computing the
interest expenses. In case of MB-II station as the actual loan has been availed for the project,
therefore, the interest has been computed on the basis of actual loans availed for the project. For
repayment purpose, the Commission has considered repayment equal to depreciation in accordance
with the UERC Tariff Regulations, 2015, while loan addition during the year is not considered since
the Petitioner capitalise the assets at the end of the Financial Year.
Based on the above considerations and the UERC Tariff Regulations, 2015 the Commission
has calculated the interest expense for 9 LHPs for FY 2018-19 of second Control Period as shown in
the Table below:
Table 4.21: Interest on Loan for Nine Old LHPs for FY 2018-19 (Rs. Crore) Name of the Generating
Stations
Approved in MYT Order
Revised Projections
Approved in this Order
Opening Loan
Loan Addition
Repayment Closing
Loan Interest
Dhakrani 0.77 2.94 2.48 0.00 0.38 2.11 0.23
Dhalipur 4.33 2.25 22.82 25.47 8.17 40.12 1.89
Chibro 1.29 7.93 12.79 0.00 1.66 11.13 1.20
Khodri 0.04 5.50 4.07 0.00 1.72 2.35 0.32
Kulhal 0.96 2.42 0.86 0.00 0.21 0.64 0.08
Ramganga 0.09 3.38 1.47 0.00 0.33 1.14 0.13
Chilla 3.96 5.19 47.47 36.07 3.37 80.18 4.61
Maneri Bhali-I 3.92 1.88 0.00 0.00 0.00 0.00 0.00
Khatima 7.73 16.15 98.47 0.00 8.17 90.30 10.78
Total 23.09 47.63 190.43 61.54 24.01 227.96 19.25
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 105
B. Maneri Bhali-II
As discussed in the preceding para, the Commission has computed the weighted average
interest rate of 10.98% based on the outstanding loans for the project up to 31.03.2017. The
Commission for computing interest for MB-II station for FY 2018-19 has considered the above
mentioned interest rate.
The Commission based on the closing loan for MB-II as on 31.03.2017 has computed the
interest expenses for FY 2018-19. The Commission in accordance with UERC Tariff Regulations,
2015 has considered the repayment for each year of the Control Period equal to the depreciation
allowed for that year.
Based on the above considerations and the UERC Tariff Regulations, 2015, the Commission
has calculated the interest expense for MB-II for FY 2018-19 of the second Control Period as shown
in the Table below:
Table 4.22: Interest on Loan for MB-II for FY 2018-19 of second Control Period (Rs. Crore)
Particular Approved in MYT Order dated 05.04.2016 Claimed Approved in this Order
Interest on Loan 71.97 78.25 65.21
4.3.7 Operation and Maintenance expenses
Regarding the Operation and Maintenance expenses, Regulation 48(2) of the UERC Tariff
Regulations, 2015 specifies as follows:
“48 Operation and Maintenance Expenses
(2) For Hydro Generating Stations
(a) For Generating Stations in operation for more than five years preceding the Base
Year
The operation and maintenance expenses for the first year of the control period will be
approved by the Commission taking in to account the actual O&M expenses for last five
years till base year, based on the audited balance sheets, excluding abnormal operation and
maintenance expenses, if any, subject to prudence check and any other factors considered
appropriate by the Commission.
(b) For Generating Stations in operation for less than 5 years preceding the base year:
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
106 Uttarakhand Electricity Regulatory Commission
In case of the hydro electric generating stations, which have not been in existence for a period
of five years preceding the base year, i.e. FY 2014-15, the operation and maintenance expenses
for the base year of FY 2014-15 shall be fixed at 2.0% of the capital cost as admitted by the
Commission for the first year of operation and shall be escalated from the subsequent year in
accordance with the escalation principles specified in clause (e) below.
(c) For Generating Stations declared under commercial operation on or after 1.4.2016.
In case of new hydro electric generating stations, i.e. the hydro electric generating stations
declared under commercial operation on or after 1.4.2016, the base operation and
maintenance expenses for the year of commissioning shall be fixed at 4% and 2.5% of the
actual capital cost (excluding cost of rehabilitation & resettlement works) as admitted by the
Commission, for stations less than 200 MW projects and for stations more than 200 MW
respectively.
(d) Post determination of base O&M Expenses for the base year, i.e. FY 2014-15, the O&M
expenses for the nth year and also for the year immediately preceding the Control Period, i.e.
2015-16 shall be approved based on the formula given below:-
O&Mn = R&Mn + EMPn + A&Gn
Where –
O&Mn – Operation and Maintenance expenses for the nth year;
EMPn – Employee Costs for the nth year;
R&Mn – Repair and Maintenance Costs for the nth year;
A&Gn – Administrative and General Costs for the nth year;
The above components shall be computed in the manner specified below:
EMPn = (EMPn-1) x (1+Gn) x (1+CPIinflation)
R&Mn = K x (GFA n-1 ) x (1+WPIinflation) and
A&Gn = (A&Gn-1) x (1+WPIinflation)+ Provision
Where -
EMPn-1 – Employee Costs for the (n-1)th year;
A&G n-1 – Administrative and General Costs for the (n-1)th year;
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 107
Provision: Cost for initiatives or other one-time expenses as proposed by the
Generating Company and approved by the Commission after prudence check.
‘K’ is a constant to be specified by the Commission %. Value of K for each year of the
control period shall be determined by the Commission in the MYT Tariff order based on
Generating Company’s filing, benchmarking of repair and maintenance expenses,
approved repair and maintenance expenses vis-à-vis GFA approved by the Commission
in past and any other factor considered appropriate by the Commission;
Provided that for the projects whose Renovation and Modernisation has been carried out,
the R&M expenses for the nth year shall not exceed 2% of the capital cost admitted by the
Commission.
CPI inflation – is the average increase in the Consumer Price Index (CPI) for
immediately preceding three years;
WPI inflation – is the average increase in the Wholesale Price Index (CPI) for
immediately preceding three years;
GFAn-1 – Gross Fixed Asset of the Generating Company for the n-1th year;
Gn is a growth factor for the nth year. Value of Gn shall be determined by the
Commission in the MYT tariff order for meeting the additional manpower requirement
based on Generating Company’s filings, benchmarking and any other factor that the
Commission feels appropriate
Provided that in case of a existing generating station governed by Government pay
structure, the Commission may consider allowing a separate provision in Employee
expenses towards the impact of VIIth Pay Commission.
Provided that repair and maintenance expenses determined shall be utilised towards
repair and maintenance works only.
(e) O&M expenses determined in sub-Regulation 2(b) & 2(c) above, shall be escalated for
subsequent years to arrive at the O&M expenses for the control period by applying the
Escalation factor (EFk) for a particular year (Kth year) which shall be calculated using the
following formula:
EFk = 0.55xWPIInflation + 0.45xCPIInflation
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
108 Uttarakhand Electricity Regulatory Commission
(f) In case of multi-purpose hydroelectric stations, with irrigation, flood control and power
components, the O&M expenses chargeable to power component of the station only shall be
considered for determination of tariff.”
The O&M expenses include Employee expenses, R&M expenses and A&G expenses. In
accordance with Regulation 48(2) of the UERC Tariff Regulations, 2015, the O&M expenses for FY
2018-19 shall be determined by the Commission taking into account actual O&M expenses of the
previous years and any other factors considered appropriate by the Commission.
The Commission has calculated the annual growth in values of CPI (overall) for Industrial
Workers and WPI (overall) based on the average of preceding three years for the corresponding
years and has considered the same for determination of indices during the base year and the second
Control Period. The summary of the same is provided in the Table below:
Table 4.23: Escalation Rate as considered by the Commission Particulars FY 2016-17 FY 2017-18 FY 2018-19
CPI Inflation 7.21% 5.35% 5.35%
WPI Inflation 1.83% 1.07% 1.07%
Inflation (Average 55: 45) 4.25% 2.99% 2.99%
The submissions of the Petitioner and the Commission’s analysis for approving the various
components of the O&M expenses for FY 2018-19 are detailed below:
A. Old Nine Generating Stations
4.3.7.1 Employee expenses
The Commission had approved the employee expenses of Rs. 228.36 Crore for FY 2018-19 in
its MYT Order dated 05.04.2016. The Petitioner, in its Petition, has proposed the employee expenses
for FY 2018-19 as Rs. 201.87 Crore as per the UERC Tariff Regulations, 2015 considering the actual
employee expenses for FY 2016-17.
The Commission has computed the employee expenses in accordance with the UERC Tariff
Regulations, 2015. In accordance with the UERC Tariff Regulations, 2015, the Gn (growth factor) is
to be considered in the computation of employee expenses. The Commission, in its Order dated
29.03.2017 computed the Gn factor of 0.00% for FY 2016-17 and 1.09% for FY 2017-18. Further, the
Commission in MYT Order dated 05.04.2016 in the approval of the Business Plan for the second
Control Period from FY 2016-17 to FY 2018-19, based on the approved HR Plan computed the Gn
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 109
factors of 0.00% for FY 2018-19 respectively. In line with the same, the Petitioner has proposed the
Gn factors of 1.09% and 0.00% for FY 2017-18 and FY 2018-19 respectively. The Commission has
considered the closing no. of employees for FY 2016-17 as the opening no. of employees for FY 2017-
18. The Commission sought for actual number of employees recruited/retired in FY 2017-18 till
November 2017 and projections for employees to be recruited/retired during December, 2017 to
March, 2018 and in FY 2018-19. In response, the Petitioner vide its letter dated 22.12.2017 has
submitted the recruitment of 27 no. of employees in FY 2017-18 till November 2017, 9 no. of
employees during December, 2017 to March, 2018 and 139 no. of employees during FY 2018-19.
Further, the Petitioner submitted the details of retirement as 89 no. of employees in FY 2017-18 till
November 2016, 26 no. of employees during December, 2016 to March, 2017 and 78 no. of
employees during FY 2018-19. The Commission has considered the recruitment details as submitted
by the Petitioner for FY 2017-18 and FY 2018-19. Accordingly, the Commission has approved the Gn
factors of 0.00% for FY 2017-18 and 1.46% for FY 2018-19. However, if the actual addition to number
of employees is lower than the number of employees addition considered in this Order, the impact
of the same shall be adjusted while carrying out the truing-up and will not be considered as
reduction in Employee expenses on account of controllable factors. Further, the Petitioner is
directed to give the details of total recruitment carried out during the year, project-wise during the
truing-up proceedings.
In accordance with UERC Tariff Regulations, 2015, CPI inflation which is the average
increase in the Consumer Price Index (CPI) for the preceding three years is to be considered. The
Commission has calculated the annual growth in values of CPI (overall) based on the average of
preceding three full years upto FY 2016-17 as 5.35%.
The Commission has considered the normative employee expenses approved in the true-up
for FY 2016-17 for projecting the employee expense for FY 2017-18 and FY 2018-19 in accordance
with the UERC Tariff Regulations, 2015. The normative employee expenses have been projected for
truing-up of FY 2016-17 under the MYT framework, accordingly, to bring efficiency in controllable
expenses, norms should be followed unless sufficient reasons warrant any deviations in the same.
Accordingly, the Commission has considered the normative expenses worked out for FY 2016-17 for
projecting the employee expenses for subsequent years.
With regard to impact of VII Pay Commission, it has been observed that the Petitioner has
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
110 Uttarakhand Electricity Regulatory Commission
considered the impact of VII Pay Commission in projection of the employee expenses for FY 2017-18
& FY 2018-19. In this regard the Commission in the minutes of meeting of TVS held on 04.01.2018
had directed the Petitioner to furnish the computation for impact on account of implementation of
VII Pay Commission, subsequently, the Commission vide its letter no. 1834 dated 27.02.2018
directed the Petitioner to furnish status of implementation of VII Pay Commission alongwith the
details of payment of arrears in FY 2017-18 and balance arrear to be paid in FY 2018-19 and was also
directed to submit the impact of VII Pay Commission on current salaries. In compliance to the same
the Commission vide its letter no. 140 /UJVNL/04/D(F)/UERC dated 13.03.2018 submitted its
reply, however, it has been observed that the Petitioner has not furnished the requisite information
including plant-wise breakup of such arrears. Accordingly, the Commission has decided not to
consider the impact of VII Pay Commission in APR of FY 2017-18 and in revised AFC for FY 2018-19
and the same shall be considered at the time of truing-up. However, the Petitioner is directed to
maintain Plant-wise separate details of the amount paid as arrears to its employees on account of
implementation of the recommendations of VII Pay Commission. The Commission would carry
out the truing-up for FY 2017-18 and FY 2018-19 based on the actual impact of VII Pay Commission
including arrears and no sharing of gains and losses on this account would be allowed.
The normative employee expenses approved by the Commission for FY 2018-19 are as
shown in the Table below:
Table 4.24: Employee expenses for 9 LHPs for FY 2018-19 (Rs. Crore)
Name of the Generating Stations
Approved in MYT Order
Revised Projections
Approved in this Order
Dhakrani 13.44 13.80 9.50
Dhalipur 15.07 11.36 14.33
Chibro 47.61 44.87 39.63
Khodri 25.12 22.06 21.88
Kulhal 9.84 7.48 8.44
Ramganga 31.73 31.23 26.59
Chilla 38.96 33.37 28.96
Maneri Bhali-I 29.98 24.59 21.17
Khatima 16.61 13.11 11.77
Total 228.36 201.87 182.27
4.3.7.2 R&M expenses
The Petitioner in its APR Petition has projected Repairs and Maintenance Expenses for FY
2018-19 based on the K factor and revised Opening GFA for FY 2018-19 in accordance with the
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 111
UERC Tariff Regulations, 2015. The Petitioner has computed the R&M expenses by multiplying K
factor with revised Opening GFA of FY 2018-19 and has escalated the same with WPI inflation of
1.07%. Accordingly, the Petitioner has proposed the R&M expenses of Rs. 82.88 Crore for FY 2018-
19.
The Commission in its MYT Order dated 05.04.2016 had approved the R&M expenses of Rs.
75.33 Crore for FY 2018-19. As against the same, the Petitioner has proposed R&M expenses of Rs.
82.88 Crore.
As discussed in Chapter 3 of this Order, the Commission has considered the Constant Factor
‘K’ same as determined by the Commission in the Tariff Order dated 29.03.2017. For projecting the
R&M Expenses for FY 2018-19, the Commission has multiplied the K Factor as approved in the
Tariff Order dated 29.03.2017 with the opening GFA approved for FY 2018-19. The Petitioner is
undertaking the additional capitalization proposed by it in FY 2017-18 and FY 2018-19, however, the
Commission has considered the capitalization for FY 2017-18 as approved in Tariff Order dated
29.03.2017 while determining the opening GFA for FY 2018-19.
Further, the Commission has considered the WPI inflation of 1.07% which is the average
increase in the Wholesale Price Index (WPI) for FY 2014-15 to FY 2016-17. The Commission has
computed R&M Expenses for FY 2018-19 as per the methodology as stated above using the
following formulae.
R&Mn = K x (GFA n-1 ) x (1+WPIinflation)
With regards to the generating station undergoing RMU works or planned for RMU works
in the second Control Period the Commission in its Regulation 48(2) of UERC Tariff Regulations,
2015 had stated that for projects whose Renovation and Modernisation works has been carried out,
the R&M expenses for the nth year shall not exceed 2% of the capital cost admitted by the
Commission. The Commission further observes that as per the details submitted by the Petitioner
only RMU of Khatima is completed in FY 2016-17. Further with regard to Dhakrani, Dhalipur,
Chilla and MB-I, the RMU works are projected to be carried out in FY 2018-19. With regard to
Khatima, the Commission has considered allowable R&M Expenses for FY 2018-19 equal to 2% of
the opening GFA of that year. With regard to other Stations, wherein the RMU works shall be
completed in FY 2018-19, the Commission on the provisional basis has considered R&M expenses
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
112 Uttarakhand Electricity Regulatory Commission
for FY 2018-19 based on the methodology provided in the Regulations. However, the Commission
shall determine the same during the APR/truing-up Review and sharing of any gain or loss on
account of such re-consideration shall not be allowed.
Based on above, the R&M expenses approved by the Commission for FY 2018-19 is as shown
in the Table below:
Table 4.25: R&M Expenses for 9 LHPs for FY 2018-19 (Rs. Crore)
Name of the Generating Stations
Approved in MYT Order
Revised Projections
Approved in this Order
Dhakrani 8.12 14.25 5.86
Dhalipur 14.49 7.93 9.46
Chibro 9.97 13.73 9.79
Khodri 3.41 4.84 3.48
Kulhal 3.55 5.02 2.23
Ramganga 1.58 4.28 1.54
Chilla 15.45 16.74 15.18
Maneri Bhali-I 16.54 12.06 11.71
Khatima 2.22 4.03 3.25
Total 75.33 82.88 62.50
4.3.7.3 A&G expenses
The Petitioner in its APR Petition has revised A&G expenses on the basis of actual A&G
expenses for FY 2016-17. The Petitioner has computed the A&G expenses for FY 2018-19 by
escalating the actual A&G expenses for FY 2016-17 by WPI escalation rate of 1.07% per annum.
Accordingly, the Petitioner has proposed the A&G expenses of Rs. 33.82 Crore for FY 2018-19.
The Commission in its TVS meeting held on 04.01.2018 directed the Petitioner to provide the
status of implementation of ERP works along with details of expenditure for FY 2017-18 and FY
2018-19. In response, the Petitioner vide its letter dated 15.01.2018 submitted that the Contract
Agreement with M/s Accenture Solutions Pvt. Ltd. (The System Integrator) has been signed on
29.04.2017 and thereafter, Inception report for implementation of ERP system has been submitted
on 12.05.2017. The Petitioner further submitted that ERP licences have been installed on the
Development server on 09.08.2017 and thereafter, Business Blue Prints (BBPs) have been finalized
on 25.08.2017, based on which the ERP system is being developed by M/s Accenture. Further, the
Petitioner submitted that User Acceptance Test (UAT) is planned to be started in January, 2018 and
expected implementation date of the ERP system is April 1, 2018. Further, the Petitioner has
submitted the details of expected expenditure on ERP system as under:
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 113
Table 4.26: Expenses on ERP system as claimed by the Petitioner for 9 LHPs for FY 2018-19
S. No.
Details of Work
Capex. (in Rs. Crore) OPEX (in Rs. Crore)
Year 2017-18 Year
2018-19 Year
2018-19 Year
2019-20 Year
2020-21 Actual Upto
31.12.2017 1.1.18 to 31.3.18
1 Implementation of ERP system 11.291 7.63 3.81 3.48 3.68 3.78
2 Network Cost (MPLS VPN) 0.00 0.97 0.00 1.01 1.31 1.31
3 Internet Connectivity - - - 0.20 0.20 0.20
4 Data Centre/ Data Recovery Centre Cost
- - - 1.25 1.25 1.25
Total 11.29 8.60 3.81 5.94 6.44 6.53
In this regard, the Commission in its Tariff Order dated 29.03.2017 had stated as under:
“The Regulations provide for Provision in A&G expenses towards cost for initiatives or other one-
time expenses. The Petitioner has proposed ERP implementation in the second Control Period. The
Commission is of the view that Capital Cost of such initiatives doesn’t fall under A&G expenses
and should be capitalised as such works are of capital nature which are to be incurred as onetime
expenses. The Commission taking cognisance of the need of such system grants in-principle
approval for the scheme. The expenses on account of the same shall be considered on the basis of
actual subject to prudence check.”
As discussed in Chapter 3, the Commission has approved the revision in A&G expenses for
FY 2016-17, on account of revised WPI Indices in accordance with the UERC Tariff Regulations,
2015. Thereafter, in accordance with the UERC Tariff Regulations, 2015, the gross A&G expenses
thus arrived for FY 2016-17 has been escalated by appropriate WPI inflation to arrive at A&G
expenses for FY 2017-18 and FY 2018-19.
The Regulations provide for Provision in A&G expenses towards cost for initiatives or other
one-time expenses. The Petitioner has proposed ERP implementation from FY 2018-19. The
Commission is of the view that such initiatives doesn’t fall under A&G expenses and should be
capitalised as such works are of capital nature which are to be incurred as one-time expenses. The
Commission has, therefore, not considered the provisions made towards ERP implementation as
A&G expenses. However, the same shall be considered as additional capitalisation once
implemented and after carrying out due prudence check at the time of Annual Performance
Review/true-up.
The A&G expenses approved by the Commission for FY 2018-19 is as shown in the Table
below:
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
114 Uttarakhand Electricity Regulatory Commission
Table 4.27: A&G Expenses for 9 LHPs for FY 2018-19 (Rs. Crore) Name of the Generating
Stations Approved in MYT
Order Revised
Projections Approved in this
Order
Dhakrani 1.34 1.89 0.50
Dhalipur 1.59 2.05 0.86
Chibro 5.18 7.63 3.34
Khodri 2.60 4.83 1.50
Kulhal 0.94 1.70 0.42
Ramganga 3.47 5.50 2.35
Chilla 4.03 5.19 2.47
Maneri Bhali-I 2.92 3.33 1.41
Khatima 1.25 1.70 0.44
Total 23.31 33.82 13.29
In addition to the above, the Commission shall allow UJVN Ltd. to recover Petition filing
fees on the basis of actual at the time of truing-up.
4.3.7.4 O&M expenses
Based on the above discussions, the O&M expenses approved by the Commission for FY
2018-19 is as shown in the Table below:
Table 4.28: O&M Expenses for 9 LHPs for FY 2018-19 (Rs. Crore) Name of the Generating
Stations Approved in MYT
Order Revised
Projections Approved in this
Order
Dhakrani 22.90 29.94 15.86
Dhalipur 31.16 21.34 24.65
Chibro 62.76 66.22 52.76
Khodri 31.12 31.73 26.87
Kulhal 14.33 14.20 11.10
Ramganga 36.78 41.00 30.48
Chilla 58.44 55.30 46.60
Maneri Bhali-I 49.44 39.98 34.28
Khatima 20.07 18.84 15.46
Total 327.00 318.56 258.06
B. Maneri Bhali-II
The Petitioner in its instant Petition for projecting the O&M Expenses for MB-II for FY 2018-
19 has considered actual O&M expenses of FY 2016-17 based on the audited accounts and escalated
the same with appropriate CPI and WPI Indices, K-Factor and Gn to derive at the O&M expenses
for FY 2018-19 as discussed in the above paras for 9 LHPs.
The Commission has adopted the same approach as discussed above in case of 9 LHPs and
has, accordingly, approved the O&M expenses for MB-II for FY 2018-19 as shown below:
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 115
Table 4.29: O&M expenses approved by the Commission for MB-II for FY 2018-19 (Rs. Crore)
Particulars Approved in MYT Order dated
05.04.2016 Claimed
Approved in this Order
Employee Expenses 28.20 24.70 21.85
R&M Expenses 26.76 20.07 26.55
A&G Expenses 5.47 5.32 5.40
Total 60.43 50.09 53.79
4.3.8 Interest on Working Capital
A. Old Nine Generating Stations
The Petitioner has submitted that the interest on working capital for FY 2018-19 has been
proposed in accordance with Regulation 33 of UERC Tariff Regulations, 2015.
Regulation 33 of UERC Tariff Regulations, 2015 specifies as follows:
“Rate of interest on working capital shall be on normative basis and shall be equal to the State
Bank Advance Rate (SBAR) of State Bank of India as on the date on which the application for
determination of tariff is made.
...
In case of hydro power generating stations and transmission system and SLDC, the working
capital shall cover:
(i) Operation and maintenance expenses for one month
(ii) Maintenance spares @ 15% of operation and maintenance expenses
(iii) Receivables equivalent to two months of the annual fixed charges”
The Petitioner has further submitted that it has considered the rate of interest on working
capital equal to SBI PLR of 14.05% in accordance with the Regulations. The Petitioner further
submitted documentary proof towards rate of interest on working capital considered.
The Commission has determined the interest on working capital for FY 2018-19 in
accordance with the aforesaid Regulations and is as discussed below.
4.3.8.1 One Month O&M Expenses
The annual O&M expense approved by the Commission is Rs. 258.06 Crore for FY 2018-19.
Based on the approved O&M expenses, one month’s O&M expenses work out to Rs. 21.51 Crore for
FY 2018-19.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
116 Uttarakhand Electricity Regulatory Commission
4.3.8.2 Maintenance Spares
The Commission has considered the maintenance spares as 15% of O&M expenses in
accordance with UERC Tariff Regulations, 2015, which work out to Rs. 38.71 Crore for FY 2018-19.
4.3.8.3 Receivables
The Commission has approved the receivables for two months based on the approved ARR
of Rs. 334.52 Crore for FY 2018-19, which works out to Rs. 55.75 Crore for FY 2018-19.
Based on the above, the total working capital requirement of the Petitioner for FY 2018-19
works out to Rs. 115.97 Crore. The Commission has considered the rate of interest on working
capital as 13.70% equal to State Bank Advance Rate (SBAR) as prevalent on the date of filing of this
Petition, and, accordingly, the interest on working capital works out to Rs. 15.89 Crore for FY 2018-
19. The interest on working capital approved by the Commission for FY 2018-19 is as shown in the
Table below:
Table 4.30: Interest on Working Capital approved by the Commission for 9 LHPs for FY 2018-19 (Rs. Crore)
Generating Stations
1 month O&M
Expenses
Maintenance Spares @15%
of O&M
2 months Receivables
Total Working Capital
Interest on Working Capital
Approved in MYT Order
Claimed Approved
Dhakrani 1.32 2.38 2.94 6.64 1.36 1.86 0.91
Dhalipur 2.05 3.70 5.32 11.07 2.04 1.35 1.52
Chibro 4.40 7.91 10.06 22.37 3.71 4.32 3.07
Khodri 2.24 4.03 5.53 11.80 1.88 2.20 1.62
Kulhal 0.92 1.66 2.08 4.67 0.89 0.95 0.64
Ramganga 2.54 4.57 5.25 12.36 2.10 2.60 1.69
Chilla 3.88 6.99 10.37 21.25 3.69 3.59 2.91
MB-I 2.86 5.14 6.94 14.94 3.18 2.65 2.05
Khatima 1.29 2.32 7.26 10.87 1.55 1.93 1.49
Total 21.51 38.71 55.75 115.97 20.41 21.44 15.89
B. Maneri Bhali-II
As regards the interest on working capital for MB-II, the Commission has computed the
same based on the UERC Tariff Regulations, 2015 and considering the prevailing State Bank
Advance Rate (SBAR) of 13.70% as on the date of filing of this Petition. The summary of the interest
on working capital for MB-II for FY 2018-19 is shown in the Table below:
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 117
Table 4.31: Interest on Working Capital approved by the Commission for MB-II for FY 2018-19 (Rs. Crore)
Generating Stations
1 month O&M
Expenses
Maintenance Spares @15% of
O&M
2 months Receivables
Total Working Capital
Interest on Working Capital
Approved in MYT Order
Claimed Approved
MB-II 4.48 8.07 39.21 51.77 7.59 9.21 7.09
4.3.9 Non-Tariff Income
A. Old Nine Generating Station
Regulation 46 of UERC Tariff Regulations, 2015 specifies as follows:
“46. Non Tariff Income
The amount of non-tariff income relating to the Generation Business as approved by the Commission
shall be deducted from the Annual Fixed Charges in determining the Net Annual Fixed Charges of the
Generating Company.
Provided that the Generating Company shall submit full details of its forecast of non tariff income to
the Commission in such form as may be stipulated by the Commission from time to time.
The indicative list of various heads to be considered for non tariff income shall be as under: a) Income
from rent of land or buildings;
b) Income from sale of scrap;
c) Income from statutory investments;
d) Interest on delayed or deferred payment on bills;
e) Interest on advances to suppliers/contractors;
f) Rental from staff quarters;
g) Rental from contractors;
h) Income from hire charges from contactors and others;
i) Income from advertisements, etc.;
j) Any other non- tariff income.
Provided that the interest earned from investments made out of Return on Equity corresponding to
the regulated business of the Generating Company shall not be included in Non-Tariff Income.”
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
118 Uttarakhand Electricity Regulatory Commission
The Petitioner has proposed a non-tariff income of Rs. 22.03 Crore for FY 2018-19 as
approved by the Commission in MYT Order dated 05.04.2016. The Commission in this regard
observes that most of the 9 LHPs are under RMU which involves replacement of old and obsolete
equipment which will be eventually disposed off as it gets de-capitalised. The Petitioner in this
regard is directed to ensure proper accounting with regard to disposal of such assets including
sale of scrap and submit the same separately along with subsequent tariff filings.
The Commission provisionally accepts the Non Tariff Income projected by the Petitioner for
FY 2018-19. The same shall, however, be trued-up based on the actual audited accounts for the year.
Table 4.32: Non-Tariff Income for 9 LHPs for FY 2018-19 (Rs. Crore) Name of the Generating
Stations Approved in MYT
Order Revised
Projections Approved in this
Order
Dhakrani 0.62 0.62 0.62
Dhalipur 0.91 0.91 0.91
Chibro 4.20 4.20 4.20
Khodri 2.01 2.01 2.01
Kulhal 0.50 0.50 0.50
Ramganga 3.96 3.96 3.96
Chilla 2.47 2.47 2.47
M Bhali I 5.96 5.96 5.96
Khatima 1.40 1.40 1.40
Total 22.03 22.03 22.03
Further, as discussed in Truing-Up section and the Commission’s Order dated 21.10.2009,
the provision of the Regulations permitting adjustment of non-tariff income from AFC is not in
consonance with the 1972 Agreement with HP as the components of cost of generation specified in
Schedule-VIII of The Electricity (Supply) Act, 1948 considers only the cost components and does not
provide for adjustment of any kind of revenue. Therefore, in order to have conformity with the
provisions of the said agreement, the Commission has not considered any adjustment of proportion
of non-tariff income for HPSEB share of AFC based on its share of generation in LHPs namely
Chibro, Khatima, Dhalipur, Dhakrani & Kulhal and has considered the entire amount of the above
said non tariff income for adjustment in UPCL’s share of AFC.
B. Maneri Bhali-II
The Petitioner has proposed a non-tariff income of Rs. 2.73 Crore for FY 2018-19 as approved
in the MYT Order dated 05.04.2016. The Commission provisionally accepts the same for FY 2018-19.
The same shall, however, be trued-up based on the actual audited accounts for the year.
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 119
Table 4.33: Non-Tariff Income for MB-II for FY 2018-19 of second Control Period (Rs. Crore)
Name of the Generating Station
Approved in MYT Order dated 05.04.2016
Claimed Approved in this
Order
MB-II 2.73 2.73 2.73
4.3.10 Annual Fixed Charges, Capacity Charge and Energy Charge Rate (ECR) for FY 2018-19
A. Old nine Generating Stations
Based on the above analysis for all the heads of expenses of AFC, the Commission has
approved the Annual Fixed Charges (AFC) of UJVN Ltd. for FY 2018-19 attributable to its two
beneficiaries. The Commission has allocated the AFC among the two beneficiaries of the Petitioner,
viz. UPCL and HPSEB, based on their share in Dhakrani, Dhalipur, Chibro, Khodri and Kulhal and
100% on UPCL for other plants. Further, as discussed above, the Commission has adjusted the
entire Non-Tariff Income in the AFC of UPCL.
Regulation 50 of UERC Tariff Regulations, 2015 specify as follows:
“50. Computation and Payment of Capacity Charges and Energy Charges for Hydro Generating
Stations
(1) The Annual Fixed Charges of Hydro Generating Station shall be computed on annual basis,
based on norms specified under these Regulations, and recovered on monthly basis under
capacity charge (inclusive of incentive) and Energy Charge, which shall be payable by the
beneficiaries in proportion to their respective percentage share/allocation in the saleable capacity
of the generating station, i.e. in the capacity excluding the free power to the home State.
(2) The capacity charge (inclusive of incentive) payable to a hydro generating station for a calendar
month shall be:
AFC x 0.5 x NDM / NDY x (PAFM / NAPAF) (in Rupees)
Where,
AFC = Annual fixed cost specified for the year, in Rupees.
NAPAF = Normative plant availability factor in percentage
NDM = Number of days in the month
NDY = Number of days in the year
PAFM = Plant availability factor achieved during the month, in Percentage
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
120 Uttarakhand Electricity Regulatory Commission
(3) The PAFM shall be computed in accordance with the following formula:
PAFM
Where,
AUX = Normative auxiliary energy consumption in percentage
DCi = Declared capacity (in ex-bus MW) for the ith day of the month which the station can deliver
for at least three (3) hours, as certified by the Uttarakhand State Load Despatch Centre after the day
is over.
IC = Installed capacity (in MW) of the complete generating station
N = Number of days in the month
(4) The Energy Charge shall be payable by every beneficiary for the total energy supplied to the
beneficiary, during the calendar month, on ex-power plant basis, at the computed Energy Charge rate.
Total Energy Charge payable to the Generating Company for a month shall be:
(Energy Charge Rate in Rs. / kWh) x {Energy supplied (ex-bus)} for the month in kWh} x
(100- FEHS)/100
(5) Energy Charge Rate (ECR) in Rupees per kWh on ex-power plant basis, for a Hydro Generating
Station, shall be determined up to three decimal places based on the following formula, subject to the
provisions of sub-Regulation (7):
ECR = AFC x 0.5 x 10 / {DE x (100 – AUX) x (100 –FEHS)}
Where,
DE = Annual Design Energy specified for the hydro generating station, in MWh.
FEHS = Free Energy for home State, in percent, as applicable”
In accordance with the above Regulations, the Annual Fixed Charge (AFC) for FY 2018-19
for 9 LHPs as approved by the Commission is shown in the Table below:
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19
Uttarakhand Electricity Regulatory Commission 121
Table 4.34: Approved AFC of 9 LHPs of UJVN Ltd. for FY 2018-19 Name of
the Generating
Station
Depreciation (Rs.Cr.)
Interest on Loan (Rs. Cr)
Interest on working Capital (Rs. Cr.)
O&M Expenses (Rs. Cr.)
RoE (Rs. Cr.)
Gross Annual
Fixed Cost (Rs. Cr.)
Gross AFC (UPCL) (Rs.
Cr.)
Non-Tariff Income (Rs. Cr.)
Net AFC (UPCL) (Rs. Cr.)
Gross/Net AFC
(HPSEB) (Rs. Cr.)
Dhakrani 0.38 0.23 0.91 15.86 0.87 18.25 13.69 0.62 13.07 4.56
Dhalipur 2.04 1.89 1.52 24.65 2.71 32.81 24.60 0.91 23.69 8.20
Chibro 1.66 1.20 3.07 52.76 5.88 64.57 48.43 4.20 44.23 16.14
Khodri 1.72 0.32 1.62 26.87 4.66 35.18 26.39 2.01 24.38 8.80
Kulhal 0.21 0.08 0.64 11.10 0.98 13.01 10.41 0.50 9.91 2.60
Ramganga 0.33 0.13 1.69 30.48 2.80 35.43 35.43 3.96 31.47 0.00
Chilla 3.37 4.61 2.91 46.60 7.21 64.70 64.70 2.47 62.23 0.00
MB-I 4.16 0.00 2.05 34.28 7.13 47.63 47.63 5.96 41.67 0.00
Khatima 8.17 10.78 1.49 15.46 9.07 44.97 44.97 1.40 43.57 0.00
Total 22.04 19.25 15.89 258.06 41.31 356.55 316.25 22.03 294.22 40.30
The summary of Capacity Charge and Energy Charge Rate (ECR) for 9 LHPs for FY 2018-19
is as given in the Table below:
Table 4.35: Approved Capacity Charge and Energy Charge Rate for 9 LHPs for FY 2018-19
Name of the Generating
Station
Net AFC
(UPCL) (Rs. Cr.)
Capacity Charge (UPCL) (Rs.Cr.)
Saleable Primary Energy
(UPCL)(MU)
Energy Charge Rate
(UPCL) (Rs./kWh)
Gross/Net AFC (HPSEB)
(Rs. Cr.)
Capacity Charge
(HPSEB) (Rs. Cr.)
Saleable Primary Energy
(HPSEB)(MU)
Energy Charge Rate
(HPSEB) (Rs./kWh)
Dhakrani 13.07 6.53 116.84 0.559 4.56 2.28 38.95 0.586
Dhalipur 23.69 11.85 143.00 0.829 8.20 4.10 47.67 0.860
Chibro 44.23 22.11 555.75 0.398 16.14 8.07 185.25 0.436
Khodri 24.38 12.19 256.16 0.476 8.80 4.40 85.39 0.515
Kulhal 9.91 4.95 122.26 0.405 2.60 1.30 30.57 0.426
Ramganga 31.47 15.74 308.82 0.510 0.00 0.00 0.00 0.000
Chilla 62.23 31.12 664.57 0.468 0.00 0.00 0.00 0.000
MB-I 41.67 20.83 392.23 0.531 0.00 0.00 0.00 0.000
Khatima 43.57 21.78 233.23 0.934 0.00 0.00 0.00 0.000
Total 294.22 147.11 2792.86 0.568 40.30 20.15 387.81 0.314
B. Maneri Bhali-II
Based on the analysis of all the heads of expenses of AFC, the Commission has approved the
Annual Fixed Charges (AFC) for MB-II for FY 2018-19. The Commission to arrive at the Net AFC for
MB-II has adjusted the Non-Tariff Income in the AFC of MB-II. The summary of Annual Fixed
Charge, Capacity Charge and Energy Charge rate for MB-II for FY 2018-19 of the second Control
Period is given in the Table below:
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
122 Uttarakhand Electricity Regulatory Commission
Table 4.36: Approved AFC, Capacity Charge and Energy Charge Rate for MB-II for FY 2018-19
Ye
ar
De
pre
cia
tio
n
Inte
rest
on
Lo
an (
Rs.
Cr.
)
Inte
rest
on
wo
rkin
g
Ca
pit
al
(R
s. C
r.)
O&
M E
xp
en
ses
(Rs.
Cr.
)
Ro
E (
Rs.
Cr.
)
Gro
ss A
nn
ua
l F
ixe
d
Co
st (
Rs.
Cr.
)
No
n-T
ari
ff I
nco
me
(R
s. C
r.)
Ne
t A
FC
(R
s. C
r.)
Ca
pa
city
Ch
arg
e
(Rs.
Cr.
)
Sa
lea
ble
Pri
ma
ry
En
erg
y (
MU
)
En
erg
y C
ha
rge
Ra
te
(Rs.
/kW
h)
FY 2018-19 63.00 65.21 7.09 53.79 48.92 238.02 2.73 235.29 117.64 1550.44 0.76
Subject to the provisions of the Regulations, the secondary energy rate shall be equal to rate
derived based on the original design energy and shall be applicable when the Saleable Primary
Energy exceeds the Original Design Energy. In case the rate exceeds Rs. 0.90/kWh, the secondary
energy rate shall be equal to Rs. 0.90/kWh.
Uttarakhand Electricity Regulatory Commission 123
5 Directives
5.1 Compliance to the Directives Issued in Order dated 05.04.2010.
5.1.1 Performance Improvement Measures
The Commission in its Tariff Order dated 21.10.2009 and in its subsequent Orders gave
directions to the Petitioner on the performance improvement measures by conducting a
benchmarking study of its plants with other utilities like NHPC, SJVNL, etc. and explore further
scope of improvement in technical losses and manpower rationalisation including incentive
mechanism.
In compliance to the above direction, the Petitioner had submitted the benchmarking study
Report and had also submitted the action taken as well as action plan on the basis of benchmarking
study specifically with regard to manpower deployment & rationalization and reduction in planned
maintenance days. Accordingly, the Commission in its MYT Order dated 05.04.2016 had directed
the Petitioner to submit details of the measures taken towards manpower deployment,
rationalization and data to support reduction in planned maintenance days and the same was
submitted by the Petitioner within directed timeframe.
Further, during the tariff proceedings of APR Order for FY 2016-17 the Petitioner had
submitted that it has already reduced downtime from annual maintenance from 60 days to 45 days
and is further planning to reduce it below 35 days by maintaining proper spares inventory in order
to reduce the downtime. The Commission on perusal of the planned outages/maintenance days
proposed by the Petitioner for FY 2017-18, had observed that the planned outages/maintenance
days for various LHPs for FY 2017-18 had not reduced to the optimum levels. In this regard, the
Commission in its Tariff Order dated 29.03.2017 had directed the Petitioner to submit details of the
measures to support reduction in planned maintenance days as under:
“The Commission is of the view that UJVN Ltd. being a commercial entity should focus on reducing
its down-time by reducing its planned maintenance periods by adopting best practices of other generating
companies such as NHPC, SJVNL etc. Therefore, the Commission again directs the Petitioner to submit
details of the measures to support reduction in planned maintenance days within 3 months from date of this
Order.”
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
124 Uttarakhand Electricity Regulatory Commission
In compliance to the above direction, the Petitioner vide its letter dated 17.11.2017 submitted
that all the power plants of UJVN Ltd. have become very old and efforts are being made to reduce
the maintenance period. Further, the Petitioner submitted that it is undertaking RMU of the old
power plants in sequential manner, and after completion of RMU, the maintenance period is likely
to be reduced. The Commission has taken note of the Petitioner’s reply.
5.1.2 Transfer Scheme
The Commission in its Tariff Order dated 05.04.2010 and in its subsequent Orders gave
suitable directions to expedite finalisation of transfer scheme. In compliance, the Petitioner in its
APR Petition for FY 2014-15 submitted the initiatives taken by it to finalize the transfer scheme.
Accordingly, the Commission in its APR Order dated 10.04.2014 had directed the Petitioner as
under:
“The Commission directs UJVN Ltd. that till the time transfer scheme is finalised it should submit
the quarterly progress report to the Commission”
In compliance to the above direction, the Petitioner had submitted the Quarterly Progress
Report vide letter dated 04.08.2015 stating that a Consultant was appointed to determine the value
of assets and liabilities proposed to be transferred from UPJVNL to UJVN Ltd. and also to finalise
the transfer scheme with UPJVNL, the final outcome of the same has not been brought before the
Commission. Therefore, the Commission in its MYT Order dated 05.04.2016 had directed the
Petitioner as under:
“...the Commission again directs UJVN Ltd. that till the time transfer scheme is finalised it should
continue to submit the updated quarterly progress report to the Commission.”
In compliance to the above direction, the Petitioner had submitted that there is no
disagreement on the value of current assets and current liabilities but UPJVNL emphasized mainly
on acceptance of LIC Loan of Rs. 352.59 Crore, GPF trust liabilities of Rs. 42.63 Crore and CWIP of
Rs. 128.55 Crore on account of Interest of Loan etc. which has already been disagreed by UJVNL
and informed to them. Further, with regard to LIC loan of Rs 352.59 Crore, the Petitioner had
submitted that since the amount of loan transferred to the State of Uttarakhand was not utilized for
MB-II HEP, as such GoU had not consented to accept the said liability and decided to contest the
transfer of the said loan to GoU in the APEX Court. The Petitioner further submitted that
5. Directives
Uttarakhand Electricity Regulatory Commission 125
simultaneously the matter was taken up by Govt. of Uttarakhand with Central Govt. for review of
LIC loan allocation. Moreover, with regard to Remittances of GPF liabilities of Rs. 135.78 Crore, the
Petitioner had submitted that approval for filing the writ Petition had been granted by UJVNL
Employee Trust (GPF) and drafting of the writ Petition was under process.
In this regard, the Commission in its Tariff Order dated 29.03.2017 had directed the
Petitioner as follows:
“...the Commission directs the Petitioner to rigorously follow-up with the concerned authorities for
finalization of transfer scheme alongwith issues of GPF trust and LIC loan and submit updated
quarterly progress report to the Commission.”
In compliance of the above direction, the Petitioner has submitted the Quarterly Progress
Report for the first quarter vide its letter dated 10.08.2017 and second quarter vide its letter dated
27.10.2017, wherein, the Petitioner has submitted that the issues regarding transfer scheme viz. (a)
liability of LIC loan of Rs. 352.59 Crore regarding MB-II LHP and (b) remittance of GPF liabilities of
Rs. 135.78 Crore are yet to be finalized. The Petitioner in compliance to the above directive
submitted that a meeting was held between Hon’ble Chief Ministers of Uttarakhand and Uttar
Pradesh on April 10, 2017 on division of assets and liabilities between State of Uttarakhand and
Uttar Pradesh and therein matters pertaining to UJVN Ltd. and UPJVNL were discussed. Also,
further meeting is scheduled to be held between Chief Secretary of both the States in near future.
Further, the Petitioner vide letter no. 276/UJVNL/D(F)/G-4 dated 07.07.2017 has apprised to the
Secretary Energy (Govt. of Uttarakhand) for remittance of the outstanding amount of GPF liabilities
of Rs. 146.42 Crore as on 30.6.2017. The Commission has noted the submissions of the Petitioner
and directs Petitioner to closely follow up with issue and submit quarterly status report to the
Commission. However, the Commission would like to point out that there has been an
inordinate delay in the finalization of the transfer scheme which is attributable to the Petitioner,
hence, any consequential claim arising due to finalization of the transfer scheme shall be
considered on merits by the Commission without any carrying cost on the same.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
126 Uttarakhand Electricity Regulatory Commission
5.2 Compliance to directives issued in Order dated 10.05.2011
5.2.1 Colony Consumption
In compliance of the directions issued in the previous Tariff Orders, the Petitioner vide letter
dated 29.07.2015 submitted that energy meters have been installed for all the connections to the
respective colonies and thus 100% metering has been ensured.
Accordingly, the Commission in its MYT Order dated 05.04.2016 directed the Petitioner as
follows:
“The Commission has taken note of the same and directs the Petitioner to ensure proper accounting of
the energy consumed by the employees and furnish the annual details alongwith the tariff Petition.”
In response, the Petitioner vide its reply letter dated 07.12.2016 had submitted the energy
account statement for all the 10 LHPs and DDD Dakpathar. Accordingly, the Commission in its
Tariff Order dated 29.03.2017 had directed the Petitioner as under:
“Since, 100% metering of its employees has been done, therefore, the Petitioner is directed to ensure
the meter reading of each employee on monthly basis and keep proper record of the same and submit
the colony-wise consumption of the employees alongwith the next tariff filing.”
In compliance to the above direction, the Petitioner has submitted the actual energy accounts
for FY 2016-17 and FY 2017-18 (from April, 2017 to September, 2017) of each Power House. In this
regard, the Commission directs the Petitioner to submit the colony-wise consumption of the
employees on monthly basis along with the next tariff filing.
5.2.2 Income from electricity distribution to Sundry Consumers
The Commission in its Tariff Order dated 10.05.2011 observed that the Petitioner is
maintaining distribution system in three of its Plant colonies and supplying power to sundry
consumers in these colonies. Since, sale of power to other consumers by a generating company is
not permissible under the Act, therefore, the Commission in its subsequent Tariff Orders directed
the Petitioner to handover the distribution of other consumers to UPCL. In absence of any progress
in the matter, the issue was taken up during the 6th Co-ordination Forum Meeting held on
06.01.2015, in which the Commission directed both the Managing Directors to resolve the matter on
top priority and asked Secretary, Energy, GoU to monitor the progress of the same. The
5. Directives
Uttarakhand Electricity Regulatory Commission 127
Commission accordingly in its APR Order dated 11.04.2015 directed the Petitioner as follows:
“In this regard, the Commission further directs the Petitioner to submit a quarterly status of the
progress till the entire handing over of distribution business is completed.”
The Commission had further reviewed the issue during a joint meeting held with UPCL and
UJVN Ltd. on 28.10.2015, wherein the Commission had directed that:
“... UJVN Ltd. and UPCL to nominate atleast 02 Officers not below the rank of DGM/SE from their
Organization & submit their joint report for ensuring the compliance of the Commission’s directions
latest by 30.11.2015”
Thereafter, both the utilities i.e. the Petitioner and UPCL nominated its Officers for ensuring
the compliance, however, despite the above steps of the utilities it was observed that entire handing
over/taking over of distribution business had not taken place, even after sufficient time was
provided to both the utilities. Further, UPCL in its submission had stated that UJVN Ltd. did not
provide the documents pertaining to the sundry consumer’s viz. Application form, Security deposit,
verification details etc. while, the Petitioner in its submission had stated that UPCL had never
informed for providing such documents. Accordingly, the Commission in its MYT Order dated
05.04.2016 had directed the Petitioner as follows:
“In this regard, the Commission is of the view that sufficient time has already been provided to both
the utilities, therefore, directs the Petitioner and UPCL to comply with the directions of the
Commission in all respect by 30.05.2016 and submit compliance report in the matter by 15.06.2016,
failing which appropriate action shall be initiated against both the utilities in accordance with the
provisions of the Act/Regulations.
In compliance to this the Petitioner vide its letter dated 26.07.2016 submitted the status
report which was not found satisfactory by the Commission.
The Commission further observed that despite several directions in this regard, the
Petitioner and UPCL have failed to comply with the provisions of the Act and also failed to comply
with the directions of the Commission issued from time to time in the matter. However, the
Commission took a lenient view and gave final opportunity to the Petitioner and UPCL directing
both the Utilities in its Tariff Order 29.03.2017 to:
“… complete the handing over/taking over of distribution business in all respect by 30.06.2017 and
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
128 Uttarakhand Electricity Regulatory Commission
submit compliance report in the matter by 15.07.2017, failing which the appropriate action shall be initiated
against the Managing Directors and concerned Nodal Officers responsible for the same in accordance with the
provisions of the Act/Regulations.”
However, despite the aforesaid direction and the Commission’s considerate & lenient view
in the matter both the Petitioner and UPCL have failed to ensure compliances and had taken wrong
advantage of Commission’s considerate view in the matter. Taking cognizance of the non-
compliance by the Utilities and its Nodal Officers, the Commission initiated suo-moto proceedings
against the Managing Directors and the Nodal Officers of both the Utilities and issued Show Cause
Notices. The replies to the Show Cause Notices have been received to the Commission and are
being examined.
Since Suo-Moto proceeding in the matter has been initiated, therefore, further necessary
directions would be issued by the Commission through a separate Order after completion of the
proceedings.
5.3 Compliance to the Directives Issued in MYT Order dated 06.05.2013
5.3.1 Design Energy
With respect to the design energy of 9 LHPs, earlier the Petitioner in its first MYT Petition
submitted that the DPRs for existing 9 LHPs were not available with it and therefore, expressed its
inability to submit the same. The Commission, accordingly, directed the Petitioner in its MYT Order
dated 06.05.2013 as follows:
“...the Commission directs UJVN Ltd. to arrange the Detailed Project Report for each of its hydro
generating stations and submit the same to the Commission along with first Annual Performance
Review (APR) Petition for the Control Period.“
In response, the Petitioner submitted that since the DPRs of the 9 LHPs were not available
with UJVN Ltd., it had requested the Head of Department, Irrigation Department, Uttarakhand
vide letter No. 1240 & 1906 dated 10.06.2013 & 26.08.2013 respectively and Engineer-in-Chief &
Head of Department, Irrigation Department–Uttar Pradesh vide letter no. 1247/UJVNL/D(O)/Q-5
dated 11.06.2013, to provide copies of original DPRs of the Power Stations of UJVN Ltd., however,
no response was received. In this regard, the Commission in its APR Orders dated 10.04.2014 and
11.04.2015, accordingly, directed as follows:
5. Directives
Uttarakhand Electricity Regulatory Commission 129
“The Commission ...directs the Petitioner to pursue the above matter with appropriate authorities to
arrange the DPRs for each of its hydro generating stations and submit the quarterly progress report
to the Commission.”
As the Petitioner had not submitted any status report for the same, the Commission in its
MYT Order dated 05.04.2016 had directed the Petitioner as follows:
“The Commission in this regard, again directs the Petitioner to nominate/depute senior officers to
pursue the above matter personally with appropriate authorities to arrange the DPR for each of its 9
Large Hydro Generating Stations by August, 2016 positively.”
In compliance to this the Petitioner vide its letter no. 4087 dated 27.08.2016 had submitted
the DPRs for two of its Hydro Power Stations, namely Chibro and Khodri LHPs with the comment
that “...we are not certain whether the DPRs are final editions or not…”.Accordingly, the Commission
vide its Tariff Order dated 29.03.2017 had directed the Petitioner as follows:
“In this regard, the Commission again directs the Petitioner to nominate/depute senior officers to
pursue the above matter personally with appropriate authorities to arrange the DPR for each of its 9
Large Hydro Generating Stations by 30.09.2017 positively.
In compliance to the above direction, the Petitioner vide its letter dated 17.11.2017 has
submitted that efforts are being made to trace out the original DPRs of old LHPs of UJVN Ltd.
However, no DPR except Chibro and Khodri could be found which have already been submitted to
the Commission. The Petitioner further submitted that in case the DPR of any of the other plants
becomes available the same shall be submitted with the Commission. On examination of the
aforesaid submission of the Petitioner, the Commission re-directs the Petitioner to
nominate/depute senior officers to pursue the above matter personally with appropriate
authorities to arrange the DPR for each of its 9 Large Hydro Generating Stations along with the
next Tariff Petition.
5.4 Directives specifically issued in Meeting dated 04.09.2013
5.4.1 Status of upcoming projects
The Commission in its previous Tariff Orders had been directing the Petitioner to submit
quarterly progress report of the upcoming projects, without fail.
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
130 Uttarakhand Electricity Regulatory Commission
In compliance to the above, the Petitioner submitted the quarterly progress report from time
to time. In line with the same the Petitioner is directed to submit the quarterly progress report on
status of all upcoming projects without fail.
5.4.2 Utilisation of Expenses approved by the Commission
As per directions issued by the Commission in the previous Tariff Orders, UJVN Ltd. has
been submitting the Annual Budget for the ensuing year for each and every Plant. In line with the
same the Commission further directs the Petitioner to submit annual budget for future financial
years by 31st May of the respective financial year.
5.5 Compliance to the Directives Issued in Tariff Order dated 11.04.2015
5.5.1 View of State Advisory Committee
The Commission in APR Order dated 11.04.2015 had stated that it agrees with the views of
State Advisory Committee members that UJVN Ltd. has been continuously raising same issues in its
ARR and Tariff Petitions on which the Commission has already made its decision and given its
ruling in the previous Tariff Orders. The Commission had accordingly directed the Petitioner that:
“...not to raise such issues again in the subsequent ARR and Tariff Petitions on which the
Commission has already taken the decision and given its ruling in the previous Tariff Orders, failing
which, the Commission may reject the Petition upfront.”
The Petitioner in its Petition for tariff determination for the Control Period FY 2016-17 to FY
2018-19 had again claimed return on PDF amount despite the above directions. Since the
Commission had already given its ruling in previous Tariff Orders and had not considered the
same. Accordingly, the Commission in its MYT Order dated 05.04.2016 had re-directed the
Petitioner as follows:
“Hence the Commission again directs the Petitioner not to raise such issues again in the subsequent
ARR and Tariff Petitions on which the Commission has already taken the decision and given its
ruling in the previous Tariff Orders.”
In compliance to the above directive, the Petitioner has submitted that it had filed review
Petition on 09.09.2015 against the Tariff Order dated 11.04.2015 before the Commission on several
issues including disallowance of Return on Equity (RoE) on the amount invested out of Power
5. Directives
Uttarakhand Electricity Regulatory Commission 131
Development Fund (PDF) for construction of MB-II HEP along with all necessary documentary
support. In this regard, the Commission vide its Order 22.01.2016 had rejected the issue of RoE on
investments made out of PDF. Subsequently, the Petitioner has filed appeals before the Hon’ble
Appellate Tribunal for Electricity (APTEL), however, no stay has been granted by Hon’ble APTEL.
Despite the repeated directions issued in the matter in the Commission’s previous Tariff Orders,
and pending decision of the Hon’ble APTEL on the Petitioner’s Appeal, raising the issue in the
instant Petition is not appropriate. Accordingly, the Commission in its Tariff Order dated 29.03.2017
had directed the Petitioner as follows:
“Hence the Commission further directs the Petitioner not to raise such issues again and again in the
subsequent ARR and Tariff Petitions on which the Commission has already taken the decision and
given its ruling in the previous Tariff Orders, till final decision of the Hon’ble APTEL in the matter.”
However, the Petitioner has again claimed RoE on investments made out of Power
Development Fund (PDF). Accordingly, as discussed in Chapter 3, the Commission in line with its
approach in previous orders disallows Return on Equity (RoE) on the amount invested out of PDF
for construction of MB-II HEP. Further, the Commission re-directs the Petitioner not to raise such
issues again and again in the subsequent ARR and Tariff Petitions on which the Commission
has already taken the decision and given its ruling in the previous Tariff Orders, till final
decision of the Hon’ble APTEL in the matter.
5.6 Compliance to the Directives Issued in Tariff Order dated 29.03.2017
5.6.1 Financial Relief towards restoration of damage caused due to Natural Calamity
The Commission in its Tariff Order dated 29.03.2017 had considered the funding of
additional capitalisation of around Rs. 40.37 Crore as grants as the same was used to restore the
damage caused due to natural calamity which occurred in FY 2013-14. In this regard, the
Commission had directed the Petitioner as follows:
“... The Commission has therefore considered the funding of the said additional capitalisation for FY
2015-16 as grants and directs the Petitioner to pursue the matter with the GoU and submit the
quarterly status report to the Commission.”
In this regard, no reply was received from the Petitioner, and therefore, the Commission in
TVS held on 04.01.2018 directed the Petitioner to submit the details of the amount received by GoU
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
132 Uttarakhand Electricity Regulatory Commission
on account of disaster relief for MB-II. In reply, the Petitioner in its letter dated 15.01.2018 submitted
that it has received Rs. 125.52 Crore on account of disaster relief of MB-II and the utilisation
certificates for Rs. 67.82 Crore has been given to Government of Uttarakhand.
On analysis of the above submissions, the Commission directed the Petitioner to provide
year-wise details of works executed from the aforesaid grant amount of Rs. 125.52 Crore with
details of amount capitalised /proposed to be capitalized in each financial year and also submit the
copies of the said utilization certificates. In reply, the Petitioner in its letter dated 08.03.2018 has
submitted the copies of the said utilisation certificates of Rs. 67.82 Crore and further submitted that
it has not claimed the amount of Rs. 67.82 Crore in this Petition as the same was used under disaster
for river training works of MB-I Station. The Petitioner further submitted that the grant amount of
Rs. 40.37 Crore was used for construction of protection wall around reservoir rim of Joshiyara
Barrage from 08.02.2014 to 31.07.2017 under balance capital works of MB-II Station. Also, the
Petitioner submitted that it has the balance available grant of Rs. 17.78 Crore for which the works
are in tendering stage. In this regard, the Commission further directs the Petitioner to submit the
details of financial year-wise expenditures made against the grant amount received from
GoU/GoI for respective works at the time of filing of true-up of FY 2017-18 and FY 2018-19.
5.6.2 Details of various offices and projects of UJVN Ltd.
The Commission vide its Tariff Order dated 29.03.2017 had directed the Petitioner as
follows:
“1) Detail of various offices of UJVN Ltd. and activities being run by them and number of staff in
each office.
2) Details of various projects being run/taken up by UJVN Ltd. and number of employees in each
such projects.”
In compliance to the direction, the Petitioner vide its letter dated 15.05.2017 has submitted
the staff strength of all its existing and new projects as on 31.03.2017.
5.6.3 RMU works of Khatima LHP
The Petitioner in its Petition for APR for FY 2016-17 had submitted that it had incurred
capitalisation of Rs. 49.77 Crore in FY 2016-17 (upto December 2016) and Rs. 49.66 Crore in January
5. Directives
Uttarakhand Electricity Regulatory Commission 133
2017 under RMU and other civil works in case of Khatima LHP. The Commission in its investment
approval dated 17.05.2015 has given in-principle approval of Rs. 256 Crore towards RMU works
subject to prudence check. In this regard, the Commission in its Tariff Order dated 29.03.2017 had
directed the Petitioner as follows:
“The Commission is of the view that the amount so far claimed till FY 2016-17 is well within the
approval however, since the final completion cost is yet to be finalised, the Commission shall carry out
detailed prudence check of RMU expenses once audited cost is available during the truing up of FY
2016-17. Accordingly, the Commission directs the Petitioner to submit the audited RMU expenses as
on date of completion of RMU works along with details of de-capitalisation in respect of the same as
soon as the same is available including quantity. The Petitioner is also directed to submit the details of
scrap available on de-capitalisation of old plant and machinery and expected time frame in which same
will be disposed.”
In compliance to the above direction, the Petitioner in its letter dated 14.12.2017 has
submitted the copy of the Order dated 24.06.2017 placed by UJVN Ltd. to M/s N. A. Steel,
Saharanpur for sale of 1260 items of old plant and machinery scrap amounting to Rs. 3.35 Crore
received for disposal after RMU of Khatima LHP. The copy of the order provides the details of such
1260 items with the clause of expected time frame for disposal of scrap within 90 days from the date
of order. Accordingly, as discussed in Chapter 3 of this Order, the Commission has considered an
additional non-tariff income of Rs. 3.35 Crore in case of Khatima LHP in FY 2016-17.
Further, as discussed in Chapter 3 and Chapter 4 of this Order, with regard to completion of
entire scope of works of Khatima RMU, the Commission is of the view that RMU works should be
completed as soon as possible and the same cannot be allowed to continue indefinitely.
Therefore, the Commission has taken a serious note of the same and directs the Petitioner
to complete all the works covered under RMU of Khatima LHP latest by the cut-off date, i.e.
31.03.2019, beyond which no expense (including IDC) in this regard would be allowed.
5.6.4 Impact of VII Pay Commission
The Commission in its Tariff Order dated 29.03.2017 had considered 15% towards the impact
of the VII Pay Commission for FY 2016-17 as submitted by UJVN Ltd. to estimate the net salary for
FY 2016-17 and the same was escalated in accordance with the Regulations considering the growth
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
134 Uttarakhand Electricity Regulatory Commission
factor and CPI inflation to arrive at the employee expenses for FY 2017-18. In this regard, the
Commission in its Tariff Order dated 29.03.2017 had directed the Petitioner as follows:
“...the Commission directs the Petitioner to maintain separate details of the amount paid as arrears to
its employees on account of implementation of the recommendations of VII Pay Commission”
In compliance to the above direction, the Petitioner vide its letter dated 17.11.2017 has
submitted the status/compliance report in which it had submitted that the GoU had issued orders
for VII Pay Commission, however, the same are yet to be issued by UJVN Ltd and therefore, no
payment made. Further, the Petitioner vide its letter dated 09.03.2018 has submitted that the arrears
of VII Pay Commission is Rs. 42.80 Crore till 31.12.2017, out of which Rs. 12.50 Crore arrears has
been paid during FY 2017-18 and Rs. 30.30 Crore are yet to be paid in FY 2018-19. In view of the
above, the Commission observes that the Petitioner has not submitted the detailed station wise
breakup of such arrears. Accordingly, the Commission in this Tariff Order has not considered the
impact of arrears of VII Pay Commission and directs the Petitioner to maintain Plant-wise
separate details of the amount paid as arrears to its employees on account of implementation of
the recommendations of VII Pay Commission.
5.6.5 Non Tariff Income
The Commission in its Tariff Order dated 29.03.2017 observed that most of the 9 LHPs are
under RMU which involves replacement of old and obsolete equipment which will be eventually
disposed off as it gets de-capitalised. In this regard, the Commission in its Tariff Order dated
29.03.2017 had directed the Petitioner as follows:
“In this regard, the Commission directs the Petitioner to maintain proper accounting with regard to
disposal of such assets including sale of scrap and submit the same separately along with subsequent
tariff filings.”
In compliance to the above direction, the Petitioner in its letter dated 14.12.2017 has
submitted that it has given an order to M/s N.A. Steel, Saharanpur amounting to Rs. 3.35 Crore for
sale of 1260 items of scrap material lying at Sharda Power House, Lohiahead (Khatima) of UJVN
Ltd. Further, the Petitioner has submitted that it shall maintain proper accounting with regard to
disposal of old plant and machinery scrap including sale of scrap and the same shall be informed
accordingly. As already discussed in Chapter 3 of this Order, the Commission has considered an
5. Directives
Uttarakhand Electricity Regulatory Commission 135
additional non-tariff income of Rs. 3.35 Crore in case of Khatima LHP. Further, the Commission re-
directs the Petitioner to maintain proper accounting with regard to disposal of such assets
including sale of scrap and submit the same separately along with subsequent tariff filings.
5.7 New Directives Issued
5.7.1 Expenses claimed under Major Overhauling
As discussed in Chapter 3 of this Order, it is observed that UJVN Ltd. is having different
approach for claiming expenses under major overhauling for different plants. In this regard, the
Commission is of the view that the nature of expense is independent of the values of expense being
incurred and thus the expenses should be booked under the respective head of ARR under which it
should actually fall. Hence the Commission has taken a view that all the works related to Major
overhaul claimed under additional capitalization be shifted to R&M expenses of UJVN Ltd. In
this regard, the Petitioner is directed to comply with the same philosophy in future claims as
well.
5.7.2 Balance Capital Works of MB-II HEP
The Commission in its Tariff Order dated 05.04.2016 had allowed expenses of Rs. 211.72
Crore, however, the Petitioner in its Tariff Petition for FY 2017-18 had revised the projection to Rs.
238.62 Crore to be incurred till FY 2018-19. The Petitioner in the current Tariff Petition has again
revised the projection to Rs. 252.07 Crore till FY 2018-19. The Commission has observed that the
Petitioner has incurred Rs. 217.05 Crore (i.e. Rs. 190.06 Crore upto 31.03.2016+Rs. 26.99 Crore in FY
2016-17) upto FY 2016-17 and is projecting to incur total Rs. 252.07 Crore by FY 2018-19 against
balance capital works of MB-II HEP. The Commission is of the view that the Petitioner is adopting a
callous approach and is deferring important works like testing of surge shaft, which is certainly not
in the interest of UJVN Ltd. Therefore, the Commission has taken a serious note of the same and
directs the Petitioner to complete all the works covered in the Petition of balance capital works
of MB-II HEP latest by 31.03.2019, beyond which no expense (including IDC) in this regard
would be allowed.
The Commission observed that the Petitioner has received an amount of Rs. 125.52 Cr. as
grant from GoI through GoU under disaster during 2013 for MB-II Project. In this regard, the
Commission directs the Petitioner to submit the details of Financial Year-wise expenditures
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
136 Uttarakhand Electricity Regulatory Commission
made against this amount for respective works at the time of filing of true-up/ARR for FY 2017-
18.
5.7.3 Observation on abnormal increase in Additional Capital Expenditure in certain LHPs
While examining the additional capitalization details for FY 2016-17, it is observed that there
has been a substantial increase in the expenditures claimed by the Petitioner against additional
capitalization w.r.t. the claims made during previous years specifically, in the additional
capitalization claims of the LHPs of Yamuna Valley, where out of 5 plants, RMU in two plants
namely Dhalipur & Dhakrani has already been proposed. Therefore, as discussed in Chapter 3 of
this Order, the Commission scrutinized the expenditures in detail and also conducted a ‘Sample
Study’ of procurement process being followed by the respective cost centres namely Chibro, Khodri
& PDD-Dakpathar for FY 2016-17. Accordingly, on the basis of the analysis, the Commission
observes that the prices claimed by the Petitioner in its additional capitalisation are on the higher
side as that of the prevailing market rates/schedule of rates of power sector utilities of the State
(UPCL & PTCUL), and therefore, the Commission directs the Petitioner to:-.
(i) Frame its Schedule of Rates (SoR) for common capital items inline with the SoR of
other power utilities in the State.
(ii) Procure the common items of capital nature through Centralised Procurement
System and strictly adhere to the procurement Rules of the GoU/ Rules framed by
the Petitioner (if any).
(iii) Review the working of its internal audit system specifically for checking the
anomalies in procurements and take corrective action for strengthening the internal
audit wing.
An action taken report on the above is required to be submitted to the Commission latest
by 30.06.2018.
5.7.4 Views of State Advisory Committee
Based on the suggestion made by the Members of State Advisory Committee during the
meeting held on 05.03.2018, the Commission directs UJVN Ltd. to actively pursue the following
issues with Appropriate Government/Competent authorities/Hon’ble Courts and apprise the
Commission from time to time.
5. Directives
Uttarakhand Electricity Regulatory Commission 137
(i) Resolve the issue related to MB-II Generation specifically with regard to the Dam
height of 1108 m which has already been allowed by the District Administration.
(ii) Expedite the completion of Civil Works related to Khatima RMU.
(iii) Additional allocation from THDC in the Case pending before Hon’ble Supreme
Court.
The approved revised AFC for FY 2018-19 shall be deemed to be recoverable in accordance
with the mechanism specified in UERC Tariff Regulations, 2015. The Tariffs approved in this Order
shall be applicable from 01.04.2018 and shall continue to apply till further Orders of the
Commission.
(Subhash Kumar) Chairman
Uttarakhand Electricity Regulatory Commission 138
6 Annexure
6.1 Annexure 1: Public Notice
6. Annexure
Uttarakhand Electricity Regulatory Commission 139
6.2 Annexure 2: List of Respondents
Sl. No.
Name Designation Organization Address
1 Sh. Man Singh General Manager (Engg.)
M/s Alps Industries Ltd.
Plot No. 1A, Sector-10, Integrated Industrial Estate, SIDCUL,
Roshnabad Road, Distt. Haridwar-249403
2 Sh. Pawan Agarwal Vice-President
M/s Uttarakhand Steel
Manufacturers Association
C/o Shree Sidhbali Industries Ltd., Kandi Road, Kotdwar, Uttarakhand
3 Sh. Munish Talwar - M/s Asahi India
Glass Ltd.
Integrated Glass Plant, Village-Latherdeva Hoon, Manglaur-
Jhabrera Road, P.O. Jhabrera, Tehsil Roorkee, Distt. Haridwar,
Uttarakhand
4 Sh. Pankaj Gupta President M/s Industries Association of Uttarakhand
Mohabewala Industrial Area, Dehradun-248110
5 Sh. Vijay Singh Verma Secretary Kisan Club Village-Delna, P.O. Jhabrera,
Haridwar-247665, Uttarakhand
6 Sh. Rajiv Agarwal Sr. Vice-
President
M/s Industries Association of Uttarakhand
C/o Satya Industries, Mohabbewala Industrial Area, Dehradun
6.3 Annexure 3: List of Participants in Public Hearings
List of Participants in Hearing at Bageshwar on 20.02.2018
Sl. No.
Name Designation Organization Address
1. Sh. Deewan Singh Danu
Chairman Daanpur Sewa
Samiti Danu Niwas, Village-Mandal Sera, Near Peepal Chowk, Distt. Bageshwar-263642
2. Heera Singh
Takuli Secretary
Daanpur Sewa Samiti
Village-Mandal Sera, Jeetnagar, Near Peepal Chowk, Distt. Bageshwar-263642
3. Sh. Joga Singh
Mehta Member
Chetra Panchayat, Jakhadi
Village &Post-Jakhadi, Distt. Bageshwar-263640
4. Sh. Hoshiyar Singh Mehra
- - Village-Lamjhigara, Post-Mahroori, Tehsil-
Kanda, Distt. Bageshwar
5. - Convenor Jan Kalyan Samiti Mandalsera, Near Peepal Chowk, Distt.
Bageshwar
6. Sh. Pratap Singh
Garia - -
Maziakhet, Tehsil Road, P.O.-Bageshwar, Distt. Bageshwar
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
140 Uttarakhand Electricity Regulatory Commission
List of Participants in Hearing at Rudrapur on 21.02.2018 Sl. No.
Name Designation Organization Address
1. Sh. R.S. Yadav Vice President (HR & Admn.)
M/s India Glycols Ltd.
A-1, Industrial Area, Bazpur Road, Kashipur-244713, Distt. Udham Singh
Nagar.
2. Sh. B.S.
Sehrawat -
M/s ACME Cleantech Solutions
Ltd.
Plot 3-8, 29-34, Sector-5, Integrated Industrial Estate Sidcul, Rudrapur,
Distt. Udham Singh Nagar.
3. Sh. Shakeel A.
Siddiqui
Sr. General Manager
(Commercial)
M/s Kashi Vishwanath Textile
Mill (P) Ltd.
5th KM Stone, Ramnagar Road, Kashipur-244713, Distt. Udham Singh
Nagar.
4. Sh. Pankaj Bora - M/s Galwalia Ispat
Udyog Ltd.
Narain Nagar Industrial Estate, Bazpur Road, Kashipur-244713, Distt. Udham
Singh Nagar.
5. Sh. Pradeep
Semwal -
M/s Kashi Vishwanath Textile
Mill (P) Ltd.
5th KM Stone, Ramnagar Road, Kashipur-244713, Distt. Udham Singh
Nagar.
6. Sh. S.K. Garg - M/s BST Textile Mills Pvt. Ltd.
Plot 9, Sector 9, IIE, SIDCUL, Pantnagar, Distt. Udham Singh Nagar
7. Sh. P.K. Mishra - M/s BST Textile Mills Pvt. Ltd.
Plot 9, Sector 9, IIE, SIDCUL, Pantnagar, Distt. Udham Singh Nagar
8. Sh. Sanjay
Kumar -
M/s Perfect Dynamics Auto Pvt.
Ltd.
Sector 9, Sidcul, Rudrapur, Distt. Udham Singh Nagar
9. Sh. Jagdish
Singh - -
Village-Dharampur, P.O. Chattarpur, Distt. Udham Singh Nagar
10. Sh. Akash Jain - M/s Roop Polymers
Ltd.
Plot No. 19, Sector-9, IIE SIDCUL, Pantnagar, Distt. Udham
Singh Nagar
11. Sh. G.S. Sandhu Managing Director
M/s Tarai Foods Ltd.
Sandhu Farms, P.O. Box No. 18, Rudrapur-263153, Distt. Udham Singh
Nagar.
12. Sh. R.P. Singh Executive Director M/s Tarai Foods
Ltd.
Sandhu Farms, P.O. Box No. 18, Rudrapur-263153, Distt. Udham Singh
Nagar.
13. Sh. Gurdayal
Singh - -
Village-Dharampur, P.O. Chattarpur, Distt. Udham Singh Nagar
14. Sh. A.K. Singh - - Village Fulsunga, Post Off.-Transit
Camp, Rudrapur-263153, Distt. Udhamsingh Nagar.
15. Sh. Prem Maurya
- - Village & P.O. Chattarpur, Rudrapur,
Distt. Udham Singh Nagar-263153
16. Sh. Harendra
Singh - -
Fauji Matkota, Bhurarani, Rudrapur, Distt. Udham Singh Nagar
17. Sh. Kunwar Pal
Singh - -
Fauji Matkota, Bhurarani, Rudrapur, Distt. Udham Singh Nagar
18. Sh. Deepak
Kumar -
M/s Nestle India Ltd.
Pantnagar, SIDCUL Industrial Area Road, Distt. Udham Singh Nagar-263153
19. Sh. Umesh - M/s Voltas Ltd. Plot No. 2-5, Sector-8, IIE, Pantnagar
6. Annexure
Uttarakhand Electricity Regulatory Commission 141
List of Participants in Hearing at Rudrapur on 21.02.2018 Sl. No.
Name Designation Organization Address
Sharma Industrial Area, Rudrapur, Distt. Udhamsingh Nagar-263153
20. Sh. Sukha Singh - - Village & P.O. Chattarpur, Distt.
Udham Singh Nagar
21. Sh. Harpal
Singh - -
Village & P.O. Chattarpur, Distt. Udham Singh Nagar
22. Sh. Rohit Chopra
- - Village-Beria Daulat, Bazpur, Distt.
Udhamsingh Nagar
23. Sh. Bhaskar
Joshi -
M/s Titan Company Ltd.
Sector-2, Plot No. 10 A, Sidcul, Pantnagar, Rudrapur-263154, Distt.
Udhamsingh Nagar
24. Sh. Sanjay Adlakha
- M/s Ambashakti
Glass India Pvt. Ltd. Plot. No. 41, Sector-3, SIDCUL,
Pantnagar, Distt. Udham Singh Nagar
25. Sh. Rajendra
Singh Makkar Block President
Bhartiya Kisan Union
Village-Alakhdeva, P.O.-Premnagar, Tehsil-Gadarpur, Distt. Udham Singh
Nagar
26. Sh. Lakhvinder
Singh Mehta - -
Village-Beria Daulat, Bazpur, Distt. Udham Singh Nagar
27. Col. Jitender Pal - M/s SETCO
Automotive Ltd.
Plot No.-196A, Phase-I, Eldeco Sidcul Industrial Park, Village Lalarpatti,
Sitarganj, Distt. Udham Singh Nagar
28. Sh. Kuldeep
Singh -
Bhartiya Kisan Union
Village-Dakiya Kalan, Post Off.-Dakiya No.-I, Tehsil-Kashipur, Distt. Udhamsingh Nagar-244713
29. Sh. Teeka Singh
Saini Former State
General Secretary Kisan Congress
33, Katoratal, Kashipur, Distt. Udham Singh Nagar
30. Sh. R.B. Biradar Sr. General Manager
M/s Radico Khaitan Ltd.
A-1, A-2, B-3, Industrial Area, Bazpur, Distt. Udham Singh Nagar
31. Sh. Parmeshwar
Sharma -
M/s Parle Biscuits Pvt. Ltd.
Plot No. D-10, Eldeco Sidcul Industrial Area, Sitarganj-262405, Distt. Udham
Singh Nagar
32. Sh. R.K.
Maheshwari -
M/s Mantri Metallics Ltd.
Plot No. 31, Sector-11, Sidcul, Pantnagar, Distt. Udham Singh Nagar
33. Sh. Rajesh
Kumar Mishra -
M/s Sidcul Entrepreneur
Welfare Society
Plot No. 1, Sector-9, IIE, SIDCUL Pantnagar, Distt. Udham Singh Nagar
34. Sh. Harbhajan
Singh - -
Bajar Patti, Gadarpur, Distt. Udham Singh Nagar
35. Sh. Shyam Chandra Kamboj
- - Roshanpur, Totawala, P.O. Gularbhoj,
Distt. Udham Singh Nagar
36. Sh. Ashok
Kumar - -
Mahaveer Nagar, Dr. Adarsh Nagar, Gadarpur, Distt. Udham Singh Nagar
37. Sh. Tushar Agarwal
- M/s BTC Industries
Ltd. Village-Kishanpur, P.O. Deooria, Tehsil-
Kichha, Distt. Udhamsingh Nagar
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
142 Uttarakhand Electricity Regulatory Commission
List of Participants in Hearing at Rudraprayag on 27.02.2018
Sl. No.
Name Designation Organization Address
1. Sh. Harshwardhan
Benjwal Former
Sarpanch -
Village & Post-Nakot, Nagar Panchayat-Augustmuni, Distt.
Rudraprayag
2. Sh. Balbeer Lal Former
Pradhan -
Village & Post-Nakot, Nagar Panchayat-Augustmuni, Distt.
Rudraprayag
List of Participants in Hearing at Dehradun on 28.02.2018 Sl. No.
Name Designation Organization Address
1 Sh. Devesh Pant - M/s Tata Motors
Ltd.
Plot No. 1, Sector 11, Integrated Industrial Estate, SIDCUL,
Pantnagar-263153, Distt. Udham Singh Nagar
2 Sh. Pankaj Gupta President M/s Industries Association of Uttarakhand
C/o Satya Industries, Mohabbewala Industrial Area, Dehradun
3 Sh. Rajiv Agarwal Sr. Vice-
President
M/s Industries Association of Uttarakhand
C/o Satya Industries, Mohabbewala Industrial Area, Dehradun
4 Sh. Katar Singh President Kisan Club Village-Sultanpur Sabatwali, P.O.
Jhabrera-247667, Haridwar
5 Sh. Vijay Singh Verma Secretary Kisan Club Village-Delna, P.O. Jhabrera,
Haridwar-247665, Uttarakhand
6 Sh. Munish Talwar - M/s Asahi India
Glass Ltd.
Integrated Glass Plant, Village-Latherdeva Hoon, Manglaur-
Jhabrera Road, P.O. Jhabrera, Tehsil Roorkee, Haridwar
7 Sh. Arvind Jain Member Tarun Kranti
Manch (Regd.) 6-Ramleela Bazaar, Dehradun
8 Sh. Gulshan Rai
Khanduja -
Sh. Ganesh Roller Floor Mills
Mohabbewala Industrial Area, Subhash Nagar, Dehradun-248001
9 Sh. K.L. Sundriyal General
Secretary
M/s Prantiya Electrical
Contractors Association, Uttarakhand
4(4/3), New Road, Near Hotel Relax, (Amrit Kauri Road),
Dehradun
10 Sh. Naval Duseja DGM (Finance & Accounts)
M/s Flex Foods Ltd.
Lal Tappar Industrial Area, P.O. Resham Majri, Haridwar Road,
Dehradun-248140
11 Sh. S.C. Mittal Director M/s Instruments &
System 30, Mohabbewala Industrial Area,
Dehradun-248002
12 Sh. P.K. Rajput Executive Director
M/s Vista Alps Industries Ltd.
Plot No. 1 B, Sector-10, Integrated Industrial Estate, SIDCUL, Distt.
6. Annexure
Uttarakhand Electricity Regulatory Commission 143
List of Participants in Hearing at Dehradun on 28.02.2018 Sl. No.
Name Designation Organization Address
Haridwar
13 Sh. Chandra Mohan
Goyal -
M/s Manoj Floor Mill
Near Sahastradhara Bus Stand, Sahastradhara, Dehradun
14 Sh. Sunil Gupta Editor Teesri Aankh ka
Tehalka 16, Chakrata Road (Tiptop Gali),
Dehradun-248001
15 Sh. Man Singh General Manager (Engg.)
M/s Alps Industries Ltd.
Plot No. 1A, Sector-10, Integrated Industrial Estate, SIDCUL,
Roshnabad Road, Distt. Haridwar-249403
16 Sh. Vijay Verma - M/s Shiv Shakti
Electricals Sarrafa Bazaar, Kankhal, Distt.
Haridwar, Uttarakhand
17 Sh. Viru Bisht - Mohanpur, Post Off.-Premnagar,
Dehradun-248007
18 Sh. G.D. Madhok - - 146/1, Rajendra Nagar, Street No. 9,
Kaulagarh Road, Dehradun
19 Sh. Subodh Kumar - - Village-Harbanswala, Near
Seemadwar, Dehradun
20 Dr. H.S. Rawat President
M/s Progressive Dairy Farmers
Association Uttarakhand
S-1, D-6, Defence Colony, Dehradun.
21 Sh. Arvind Jain Member Tarun Kranti
Manch (Regd.) 6-Ramleela Bazaar, Dehradun
22 Sh. Kamaldeep Kamboj - Parvatiya Saaptahik G-3, Janpad Shopping Complex,
Chakrata Road, Dehradun
23 Sh. Parshuram - - Jagjeetpur, Haridwar
24 Ms. Rubi Goyal - - Chaman Vihar, Phase-II, ITBP Road,
Dehradun
25 Sh. Sudhir Goyal - - Lane No. 11, Chaman Vihar, P.O.
Majra, Dehradun.
26 Sh. Surya Prakash - - 153, 2nd Block, Dharampur, Dehradun
27 Sh. S.K. Yadav - - Lane No. 11, Chaman Vihar, Near
Niranjanpur, Dehradun
28 Sh. Deshraj - - Sohta House, Lane No. 11, Chaman Vihar, Near Niranjanpur, Dehradun
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
144 Uttarakhand Electricity Regulatory Commission
6.4 Annexure 4: Breakup of works carried out under RMU in Khatima LHP as claimed by the
Petitioner for FY 2016-17
Breakup of works carried out under RMU in Khatima LHP as claimed by the Petitioner for FY 2016-17 (in Rs.)
Particulars Name of Supplier /
Contractor Amount
Capitalized
1. Plant & Machinery
Power & Control Cable Lot-2 Alstom India Ltd. 9296816
Rotor Rim lamination Unit-III Alstom India Ltd. 15418245
Rotor Rim lamination Unit-II Alstom India Ltd. 3262674
Rotor Handling tools, Hydraulic Stud Tensioners, Turbine guide bearing & instrument , guide bearing and turbine, Water level measurement, Handling tools of turbine & distributor handling tools, Regulating ring, Refurbishment of Stator. Generator shaft transportation fixtures, Runner transportation fixtures
Alstom India Ltd. 7622153
Generator online monitoring Alstom India Ltd. 5916309
Generator on line monitoring ( Freight & Insurance) Alstom India Ltd. 329526
Pole wedges, Generator PRT ( RTD Spares) Stator windings, thrust bearing pads, upper guide bearings), Generator Spare , upper guide bearing, and other items
Alstom India Ltd. 42828886
- Freight & Insurance on above items Alstom India Ltd. 22217211
Rotor Spider with Unit-II Alstom India Ltd. 3769613
Cable Gland &Accessories( Freight & Insurance) Alstom India Ltd. 7540775
Rotor spider with hub for Unit-II & III, Inner Head Cover Unit-II, Rotor spider with hub, Rotor rim lamination, Generator rotor handling tools, Hydraulic stud tensioners, Generator online monitoring,
Alstom India Ltd. 9732323
Runner Chamber Unit-II. ( 2646 454 )& Air valves all 3 Units ( 4452951) Alstom India Ltd. 7987257
-Freight & Insurance on above item Alstom India Ltd. 165836
Stator lamination Unit-II Alstom India Ltd. 10125540
-Freight & Insurance on above item Alstom India Ltd. 12198136
Shutter vanes Unit-II Alstom India Ltd. 8326412
-Freight & Insurance on above item Alstom India Ltd. 455261
Control metering protection & SCADA Alstom India Ltd. 6414541
-Freight & Insurance on above items Alstom India Ltd. 355274
Rotor, CC leads, fabricated shaft, slip ring Unit- 2,3 Alstom India Ltd. 9329891
-Freight & Insurance on above item Alstom India Ltd. 510128
Stator, Core, Stator lamination Unit-III Alstom India Ltd. 10327500
-Freight & Insurance on above item Alstom India Ltd. 563972
Shutter vanes Unit-III Alstom India Ltd. 8336787
-Freight & Insurance on above item Alstom India Ltd. 455261
Guide vanes Unit-II Alstom India Ltd. 20106825
-Freight & Insurance on above item Alstom India Ltd. 1098008
Guide vane Unit-III Alstom India Ltd. 23266436
-Freight & Insurance on above item Alstom India Ltd. 1118921
Inner Head Cover Unit-III Alstom India Ltd. 17174503
-Freight & Insurance on above item Alstom India Ltd. 955741
Bottom Ring Unit-II Alstom India Ltd. 14226158
-Freight & Insurance on above item Alstom India Ltd. 776872
Inner Head Cover Unit-II Alstom India Ltd. 17174503
-Freight & Insurance on above item Alstom India Ltd. 937878
Stator handling tools, stator core stacking, hydraulic tensioners for stator core bolt, stator winding tools, stator lamination
Alstom India Ltd. 5221125
-Freight & Insurance on above item Alstom India Ltd. 285103
Stator coil Alstom India Ltd. 6279724
6. Annexure
Uttarakhand Electricity Regulatory Commission 145
Breakup of works carried out under RMU in Khatima LHP as claimed by the Petitioner for FY 2016-17 (in Rs.)
Particulars Name of Supplier /
Contractor Amount
Capitalized
-Freight & Insurance on above item Alstom India Ltd. 347525
Restoration invoice Alstom India Ltd. 606098
Bottom Ring Unit-III Alstom India Ltd. 14226158
-Freight & Insurance on above item Alstom India Ltd. 791669
Outer head cover Unit-III Alstom India Ltd. 22082833
-Freight & Insurance on above item Alstom India Ltd. 1057362
Outer Head Cover Unit-II Alstom India Ltd. 21840719
-Freight & Insurance on above item Alstom India Ltd. 1042151
Runner Unit-II Alstom India Ltd. 15527206
-Freight & Insurance on above item Alstom India Ltd. 705053
Runner Unit-III Alstom India Ltd. 16921556
-Freight & Insurance on above item Alstom India Ltd. 873310
Guide bearing shaft seal assembly. Unit-II Alstom India Ltd. 9416088
-Freight & Insurance on above item Alstom India Ltd. 445047
Scaffolding pipes , clamps, Lowering of rotor, Run out machine, Installation testing & commissioning of DT liner cone & liner
Alstom India Ltd. 4656261
Guide vanes Alstom India Ltd. 7057125
Price Variation: Alstom India Ltd. 80204299
Supply of DT liner, DT cone & door, Service invoice soak pit for GSU construction Cooling water pump-,erection of runner chamber, removal of existing liner, cone& door & concrete), Intake gates, dogging /storage replacement of wheel asslly.ss plates, GM bushes, Replacement of 22 No New trash racks, 11 KV switchgear ,surge protection for generator, NGT (Freight & Insurance) and Supply of AC system, Cooling water header pipeline
PES. Engg. Pvt. Ltd. 12293424
Service of Turbine top cover and regulating ring Unit-III ,replacement of stator coils wedges, filler Unit-III, Replacement of stator windings Unit-III, HV testing Unit-III, pole welding Unit-III,HV test Unit-III, break ring Unit-III, Erection of runner, turbine shaft, Testing & commissioning Unit-III, Power House Aux, Unit-II Hydro Mechanical Equipment Unit-II, commissioning of unit-II
PES Engg. Pvt. Ltd. 2878943
Replacement of EPS trash racks PES Engg. Pvt. Ltd. 11802260
Supply of fittings, bushing etc. & dismantling of GT and installation of New GT
PES Engg. Pvt. Ltd. 28051017
Air/Oil accumulator PES Engg. Pvt. Ltd. 4905155
-Freight & Insurance on above item PES Engg. Pvt. Ltd. 281986
Runner Chamber Handling tools PES Engg. Pvt. Ltd. 514715
-Freight & Insurance on above item PES Engg. Pvt. Ltd. 28731
Rotor pole complete unit-II PES Engg. Pvt. Ltd. 16212245
-Freight & Insurance on above item PES Engg. Pvt. Ltd. 902989
Rotor spider with Hub PES Engg. Pvt. Ltd. 3695896
Rotor Rim lamination PES Engg. Pvt. Ltd. 16392244
-Service of rotor Unit-I Lower Bracket, Generator shaft & dummy shaft. Unit-I , -Service for crane, electrical equipment, erection runner, turbine shaft, pump motor set Manual operated duplex filter, compressed air system ventilation system, installation & testing of rotor assembly,
PES Engg. Pvt. Ltd. 4801903
OPU Portable, Completer cooling water system, Structure frame for side bypass channel gate, Draft tube drain valve, Hydrant system. Fire alarm, portable fire extinguisher, 11/132 KV,12/20 MVA T/F ,Current transformer, Neutral CT,
PES Engg. Pvt. Ltd. 18959828
Manually operated gate and super structure frame for side bypass channel PES Engg. Pvt. Ltd. 4135538
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
146 Uttarakhand Electricity Regulatory Commission
Breakup of works carried out under RMU in Khatima LHP as claimed by the Petitioner for FY 2016-17 (in Rs.)
Particulars Name of Supplier /
Contractor Amount
Capitalized
gate
Hardware and accessories, piping, fittings, bore well including piping, pipings valves, seals gasket etc.
PES Engg. Pvt. Ltd. 6499418
Four core ratio 150-100/0.5 A ( Step up T/F circuit), one core ratrio 150/1A(132 KV transformer neutral )
PES Engg. Pvt. Ltd. 5043899
Cleaning of aite Unit III & Unit-II, Inspection of T/F Oil drain out form T/F, Dismantling of Power cable strengthening of T.F area, shifting of T/F Tests, testing of all power cable laying of Lugs, Glands, ferrules, oil filtration centrifuging machine in the scope of contractor.,
PES Engg. Pvt. Ltd. 4397770
Motor, gear boxes, steel & cable, hoisting including structural platform PES Engg. Pvt. Ltd. 25023114
Intake gate, New Supply of dogging/storing arrangement, Replacement of wheel asslly.
PES Engg. Pvt. Ltd. 7409279
By pass gate EPS, By pass channel gate, Rubberseals, guide shoe, limits witch, chain breaks, wheel asslly, guide roller, wire rope, fuses, relays contacts, push button, lugs, pins., pivot, pins & bushes.
PES Engg. Pvt. Ltd. 2058316
Motors, Gear Boxes, steel and hardware etc. hoist manually operated gate and super structure frame for side bypass channel gate.
PES Engg. Pvt. Ltd. 1453485
Constt of all cable trench for T/F, shifting of T/F, erection of T/F laying all cables constt of earthing and pits, laying of inter connection piping, Replacement of EPS trash racks
PES Engg. Pvt. Ltd. 2946923
Draft tube liner Unit-I and Oil filtration for T/F with centrifuging machine. required tests for T/F , oil filtration T/F Testing &commissioning of T/F
PES Engg. Pvt. Ltd. 2503158
Dismantling of existing valve, overhauling nit -II repair of stator frame unit-II ,stator coils air duct soacer finger plate Un it-II , Pole welding nit-II, generator equipment , turbine equipment Unit-II Electrical equipment Unit-II Removal runner chamber-Unit-II, commissioning of Power House Aux. Unit-I Hydro mechanical equipment-Unit-I, Commissioning of Unit-I commissioning of draft tube liner cone door Unit-I
PES Engg. Pvt. Ltd. 2106542
Repair of stator frame Unit-II, lower Braket Unit-II, erection bottom ring, removal of mud layer, Unit-II Trash rack machine, taking our replaceable gate EPS, Replaceable intake gates, Unit-II replaceable steel parts Unit-II Erection EPS of Unit-II
PES Engg. Pvt. Ltd. 4081947
Restoration invoice PES Engg. Pvt. Ltd. 4278703
Set of tools for repair of all gates, Additional order 50 ton crane, 10 ton capacity truck, concrete breaker, exhaust blower, gratings, polyweb slings, chainpully block, EHS, generator working platform, Supply of RCC M20 dowels and misc. works
PES Engg. Pvt. Ltd. 3997759
Dismantling Stay ring, stay vanes plates, removal of mud layers, reboring of bottom bush, installation of regulating ring, & servomotor., installation of link & liver, dismantling of pole welding, &turbine equipment, Re assembly and erection of runner Unit-II erection of turbine shaft, erection of guide apparatus.
PES Engg. Pvt. Ltd. 3048525
Draft tube Unit-III, Installation of regulating ring, link & liver, new pole welding, breaking upper and lower fan, alignment of rotor lowering generator shaft coupling turbine shaft, Lowering dummy shaft, coupling generator shaft, Additional order compressor 288 m 3 Hrs., Hydra 14 ton Capacity, welding machines
PES Engg. Pvt. Ltd. 3485112
dismantling old hydraulic & mechanical equipment Unit -III replacement of stator coil ,wedges, fillers etc Unit-II replacement of stator welding Unit-II HV testing Unit-II Generator equipment Unit-III, Electrical equipment Unit-II, Taking out EPS Vent -22 taking out trash racks 22 no
PES Engg. Pvt. Ltd. 1603190
- Refurbishment oil Existing main door & replacement of Drainage valve. PES Engg. Pvt. Ltd. 5737939
6. Annexure
Uttarakhand Electricity Regulatory Commission 147
Breakup of works carried out under RMU in Khatima LHP as claimed by the Petitioner for FY 2016-17 (in Rs.)
Particulars Name of Supplier /
Contractor Amount
Capitalized
Unit-II, lowering, leveling ¢ering of upper bracket Unit-II, Lower Bracket and pit cover Unit 0-II, Pit cover & nut guard Unit-II, Bearing box up Unit-II, installation of sensors Unit-II, removal of runner chamber & discharge ring Unit-III, Erection of runner chamber Unit-III, Erection runner servo motor & oil header Unit-II, Erection of Turbine guide bearing & shaft seal Unit-II -Dismantling of Air valve unit-II, Piping work Unit-II, erection of discharge ring Unit-III, piping work Unit-II, erection of bottom ring Unit-III,, Governor & OPU Unit-III, Fitting for OPU Unit-III,CW system Unit-III, cooling water system Unit-II,NGT panel Unit-II - Service refurbishment man door, replacement of drainage valve Unit-III, Air valve, diffuser valve Unit-II, Drainage & dewatering system Unit-III, laying of dedicated water header pipe line
CW system Unit-II cooling water system Unit-III, A/C driven pump Unit-I,II,III, pump motor-Unit-I,II,III Piping valve instruments control panel, NGT panel Unit-III, Talking out EPS Unit-III ,taking out steel-Unit-III, Taking our rail, erection of EPS Unit-III, Refurbishment of Intake gate Unit-III, Erection Unit-III
PES Engg. Pvt. Ltd. 2944928
Removal Installation of DT liner, cone door, drum hoisting, Refurbishment of intake gates erection of intake gates, reboring of bottom bush, erection of discharge ring, erection of runner chamber, Governor & OPU station T/.F Unit-II
PES Engg. Pvt. Ltd. 4170041
Service of Turbine top cover & regulating ring Unit-III, Diffuser valve Unit-III, Lowering of rotor Unit-III, lowering leveling & centering of upper bracket Unit-III, Lower bracket & pit cover Unit-III, Bearing housing and collar Unit-III, Generator shaft & dummy shaft Unit-III, Reassembly & erection of Turbine Unit-III, constt of various foundation
PES Engg. Pvt. Ltd. 5050228
Trash rack cleaning rails, Trash disposal system & RCC deck slab. PES Engg. Pvt. Ltd. 30615458
Price Variation PES Engg. Pvt. Ltd. 25959488
Total RMU under Plant & Machinery 790180680
2. Furniture & Fixtures 66000
3. Office Equipments & Others 91825
4. Computer 57946.35
5. IDC capitalized 102470540
Grand Total 892866991.4
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
148 Uttarakhand Electricity Regulatory Commission
6.5 Annexure 5: List of Items shifted from Add Cap to R&M and R&M to Add Cap for FY 2016-
17
List of Items shifted from Add Cap to R&M for FY 2016-17
S. No. Voucher No. Asset Name Amount in Rs.
Chilla Power House
1 A-13 Capital Maintenance of Machine No. 1 at Chilla power House. 15200000.00
Total amount transferred to R&M 15200000.00
MB-I Power House
1 A-3 of 12/16 Barrel Pump (01 no) 4960.00
Total amount transferred to R&M 4960.00
Chibro Power House
1 OE-15,05/2016 Capital Maintenance of Machine No. 4 3965400.00
2 O-3,O-4,O-6 and O-7, 07/2016
Capital Maintenance of Machine No. 4 23583115.00
3 OE-54,10/2016 Capital Maintenance of Machine No. 3 7766847.00
4 OE-12,10/2016 Capital Maintenance of Machine No. 4 7930800.00
5 A-27,03/2017 Capital Maintenance of Machine No. 4 13645685.00
6 A-13 ,03/2017 Adjustment of T&P receipt a/c of C/S, Chibro, for the M/o of 03/17 & 02/17
262702.00
Total amount transferred to R&M 57154549.00 Dhakrani Power House
1 A-50 Expenditure on Residential building (ATD 21/DGM(civil)/2016-17) 10224390.00
2 A-54 Renovation & Modernisation of Type-II & Type-III Type-IV Residence of Dhakrani P.H. Colony
6597278.00
3 A-18 125 MM Angle Grinder 5448.00
4 A-47 Major overhauling and painting of Unit A,B&C 2956780.00
5 A-5 4 step multipurpose alum ladder with one platform 4900.00
6 A-5 Multimeter (0-600) make Motwane 5612.00
7 A-35 M.S. Tray 6'x4'x4', thickness of sheet 1.5mm 5210.00
8 A-35 Heat Gun, tem 100-500 deg C, Airflow 240-450 L/min 4575.00
9 A-23 Wheel spanner, size 19 mm 272.00
10 A-23 Cutter 450.00
11 A-4 Gum boot good quality 5394.00
12 A-4 Rain Coat with Hood 5440.00
13 A-19 Drill Machine 10 FF GBS Heavy duty Make Bosch 5448.00
14 A-23 Screw Driver (Set) with magnet 5448.00
15 A-23 Tester 168.00
16 A-23 Slide Wrench size 9" 1200.00
17 A-23 Combination Pliers 650.00
18 A-23 Nose Pliers 640.00
19 A-23 Hammer Small size 500.00
20 A-23 Paint Brush 600.00
21 A-23 Multi Meter (0-600 V) Motwane make 5662.00
22 A-23 Hydraulic jack capacity 6 ton with Rod 4256.00
23 A-23 Taparia cutting Pliers, size 210 mm 1136.00
24 A-23 Bamboo ladder length 24 feet with 19 step 4654.00
25 A-18 Tyre and tube size 185/85/R 16 17364.00
26 A-19 Tyre Size 215/75/R-15 42130.00
27 A-19 Tube Size 215/75/R-15 4470.00
28 A-19 Tyre Size 10.00-20 (16PR) Rib 33102.00
29 A-19 Tyre Size 10.00-20 (16PR) Lug 45944.00
30 A-19 Tube Size 10.00-20 (16PR) 8701.00
31 A-19 Flap Size 10.00-20 2898.00
6. Annexure
Uttarakhand Electricity Regulatory Commission 149
List of Items shifted from Add Cap to R&M for FY 2016-17
S. No. Voucher No. Asset Name Amount in Rs.
32 A-12 Clamp Meter Make 164935.00
33 A-12 Multimeter Make Megger 48450.00
34 A-12 Gum boot (good quality rubber) 4875.00
35 A-86 Screw Driver (Set) with magnet. (correction entry) -4998.00
36 A-86 Multi Meter (0-600 V) Motwane make(correction entry) -100.00
Total amount transferred to R&M 20213882.00
Dhalipur Power House
1 A-54 Renovation & Modernisation of Type-II & Type-III Type-IV Residence of Dhalipur P.H. Colony
5457705.00
2 A-16 Expenditure on Residential building (ATD No. 22/DGM(Civil)/2016-17)
5410183.00
3 A-15 Major Over hauling of Unit-C 24763000.00
4 A-12 Master Level 10000.00
5 A-12 Gaitty Set with radenet 8 mm to 32 mm 10000.00
6 A-12 Ring spanner 50 mm 15000.00
7 A-12 Box Spanner 40000.00
8 A-13 Rebabbitting of UGB, Thrust bearing & lower guide bearing 1768000.00
Total amount transferred to R&M 37473888.00
Kulhal power House
1 A-54 Renovation & Modernisation of Type-1 & Type-II Residence of Kulhal
5524756.00
2 A-12 Major Overhaul of Machine 8654700.00
Total amount transferred to R&M 14179456.00
MB-II Power House
1 O-25 Tools & tackles 1768680.00
2 O-6 Tools & tackles 638141.00
3 A-24 Tools & tackles 31698.00
4 A-22 Tools & tackles -104740.00
5 A-2 Tools & tackles 104739.00
6 A-31 Tools & tackles 202650.00
Total amount transferred to R&M 2641168.00
Grand Total of expenses transferred to R&M from Add-Cap 146867903.00
List of Items shifted from R&M to Add-Cap for FY 2016-17
List of Items shifted from R&M to Add-Cap for FY 2016-17
S. No. Voucher No. Asset Name Amount in Rs.
Chilla Power House
1 A-7 HT Isolator without switch complete, Etc misc items 1105131.77
Total 1105131.77
Tiloth Power House
1 A-9 L&T make MCCB 250A/3P, LNT make ACB 1250A/3P 1783428.00
Total 1783428.00
Dhakrani Power House
1 A-5 Stock Issue Account for the for M/o 03/17 Centre Store Dhakrani 3966732.50
2 A-35 Stock Issue Account for the for M/o 02/17 Centre Store Dhakrani 1340000.00
Total 5306732.50 Grand Total 8195292.27
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
150 Uttarakhand Electricity Regulatory Commission
6.6 Annexure 6: Expenses covered under Balance Capital Petition for MB-II as claimed by the
Petitioner
Expenses covered under Balance Capital Petition for MB-II as claimed by the Petitioner
Sl. No.
Description of claimed item
Estimated amount as per DPR.
Revised estimated
cost (Approved)
Reason for Diff Expenditure
upto FY 2015-16
2016-17
2017-18
2018-19
Total
1 Rehabilitation. 15.56 27.32 Due to variation in plinth area rate.
13.62 5.7251 2.82 5.16 27.32
2
Construction of school building for Saraswati Shishu Mandir School in Shaktipuram Colony Chinyalisaur.
2.00 2.72 Due to Variation in work as per site requirement.
1.32 0.72 0.00 0.00 2.03
3 Modification of tail race channel.
24.00 27.30 Due to Variation in work as per site requirement.
27.30 0.00 0.00 0.00 27.30
4 Compensation for the affected people.
1.14 1.14 0.20 0.00 0.93 0.00 1.14
5
Payments to M/s NPCC against claims of Principle Agreement in accordance to the decision of High Power Committee.
12.86 12.19 5.67 6.527 0.00 0.00 12.19
6
Construction of Cement Concrete Protection wall around Joshiyara barrage reservoir.
83.08 75.87
Due to site condition and geological constraint the quantity of works has increased at some locations. Also on demand of local affected people the Ghat was constructed at some locations alongwith the protection wall near Bhagirathi River. This increases the cost of works and involved extra time.
75.87 9.43 6.92 0.00 92.22
7 Construction of Office Building at Joshiyara.
1.03 1.06 Due to Variation in work as per site requirement.
1.06 0.00 0.00 1.06
8 Construction of officer’s residence at Joshiyara colony. (Annexure-CE-8)
1.10 1.15 Due to Variation in work as per site requirement.
1.15 0.00 0.00 0.00 1.15
9
Construction of 04 Nos. Type-IV Residences and 01 Nos. Type-V Residence in Shaktipuram Colony, Chinyalisaur.
1.10 1.12 Due to Variation in work as per site requirement.
0.68 0.00 0.00 0.00 0.68
10
Strengthening of water distribution system of Shaktipuram colony, Chinyalisaur.
0.89 0.84 0.84 0.00 0.00 0.00 0.84
11
Construction of workshop building at Dharasu power house of MB-II project.
1.69 1.60
0.75 0.00 0.24 0.00 0.99
12 Protection work on hill slope behind Dharasu
2.57 3.12 Due to increase in scope and quantity of work after
1.48 0.93 0.67 0.00 3.08
6. Annexure
Uttarakhand Electricity Regulatory Commission 151
Expenses covered under Balance Capital Petition for MB-II as claimed by the Petitioner
Sl. No.
Description of claimed item
Estimated amount as per DPR.
Revised estimated
cost (Approved)
Reason for Diff Expenditure
upto FY 2015-16
2016-17
2017-18
2018-19
Total
power house. damages due to Calamity/flood held on FY 16-17 June 2013.
13
Construction of Road from Joshiyara Bridge to Flushing conduit on left Bank (1.2 km) and from Barrage to NH-108 on Right Bank (0.4 Km).
2.22 3.30 Due to Variation in work as per site requirement.
0.32 1.01 1.23 0.00 2.55
14
Construction of Infrastructure works for affected villagers from Joshiyara, Gyansu and Kansain village as per their demands.
9.50 9.50 0.19 1.31 5.02 3.00 9.52
15
Construction of boundary wall, security fencing and gate for Shaktipuram colony and Shifting of existing boundary wall of Shaktipuram colony and provide the separate way for villagers behind Shaktipuram colony.
1.21 1.12 Due to Variation in work as per site requirement.
0.72 0.25 0.00 0.00 0.97
16 Testing of surge shaft gate.
5.00 5.00 0.00 0.00 0.00 5.00 5.00
17
River training works from Dharasu Steel bridge to Dharasu Power house up to TRC.
2.00 3.63
Due to increase in scope and quantity of work after damages due to calamity/flood occurred on FY 16-17 of June 2013.
2.29 0.38 0.96 0.00 3.63
18 Slope protection work on uphill side of Surge shaft.
0.90 1.30 Due to Variation in work as per site requirement.
0.00 0.3818 0.92 0.00 1.30
19
Consultancy expenditure on TRC works & other works except for Joshiyara Barrage.
2.00 0.79 Due to Variation in work as per site requirement.
0.66 0.00 1.86 0.30 2.82
20 Liabilities against major civil contract of MB-II Project.
0.00 0.00 0.00 0 0.00 0.00 0.00
a Reimbursement of Sales Tax.
8.15 19.24
Awarded Amount with Interest of Rs. 1924.47 Lakh has been deposited in Hon’ble High court As per decision of Hon’ble High court.
19.24 0.00 0.00 0.00 19.24
b Reimbursement of royalty.
0.45 0.45 0.00 0.00 0.00 0.00 0.00
c
Award given by the arbitrator in favour of M/s Hydel Construction (P) Ltd against dispute
30.73 35.30
Awarded Amount with Interest of Rs. 3529.76 Lakh has been deposited in Hon’ble High court As per
35.30 0.00 0 0.00 35.30
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
152 Uttarakhand Electricity Regulatory Commission
Expenses covered under Balance Capital Petition for MB-II as claimed by the Petitioner
Sl. No.
Description of claimed item
Estimated amount as per DPR.
Revised estimated
cost (Approved)
Reason for Diff Expenditure
upto FY 2015-16
2016-17
2017-18
2018-19
Total
related to swellex Rock Bolt, Steel Fibre as Extra Item and loss due to flood along with interest of Rs 95424/- per month.
decision of Hon’ble High court.
d Payment against misc. Works.
0.26 0.26 0.00 0.20 0.00 0.00 0.20
e Security. 0.35 0.35 0.26 0.11 0.00 0.00 0.36
f Pending payment of GSI. 0.95 0.95 0.00 0.00 0.00 0.00
g Expenditure incurred for arbitration.
1.00 2.00
The Arbitration & Court cases of M/s Hydel Construction. & M/s Shring Construction are in process.
1.15 0.02 0.00 0.00 1.17
Total 211.73 238.62 Total (in Rs. Cr.) 190.06 26.99 21.56 13.46 252.07
6. Annexure
Uttarakhand Electricity Regulatory Commission 153
6.7 Annexure 7: Details of the Revised Additional Capitalisation claimed by the Petitioner for
MB-II for FY 2017-18 and FY 2018-19
Details of the Revised Additional Capitalisation claimed by the Petitioner for MB-II for FY 2017-18 and FY 2018-19 (Rs. Crore)
Sl. No. Description of claimed item 2017-18 2018-19
Work under Balance Capital
1 Rehabilitation. 2.82 5.16
2 Compensation for the affected people. 0.93 0.00
3 Construction of Cement Concrete Protection wall around Joshiyara barrage reservoir. 6.92 0.00
4 Construction of workshop building at Dharasu power house of MB-II project. 0.24 0.00
5 Protection work on hill slope behind Dharasu power house. 0.67 0.00
6 Construction of Road from Joshiyara Bridge to Flushing conduit on left Bank (1.2 km) and from Barrage to NH-108 on Right Bank (0.4 Km).
1.23 0.00
7 Construction of Infrastructure works for affected villagers from Joshiyara, Gyansu and Kansain village as per their demands.
5.02 3.00
8 Testing of surge shaft gate. 0.00 5.00
9 River training works from Dharasu Steel bridge to Dharasu Power house up to TRC. 0.96 0.00
10 Slope protection work on uphill side of Surge shaft. 0.92 0.00
11 Consultancy expenditure on TRC works & other works except for Joshiyara Barrage. 1.86 0.30
Total Works under Balance Capital 21.56 13.46
Other works (works not covered under Balance Capital Works)
1 Construction of multipurpose hall (Badminton court, Gym, Table Tennis etc) at Shaktipuram Colony, Chinyalisaur.
0.70 0.50
2 Construction of Security hut and its associate work at Dharasu Power house Complex at Dharasu, Uttarkashi.
0.31 0.00
3 Renovation and modernization of officers field hostel at Shaktipuram colony Chinyalisaur, Uttarkashi.
0.40 0.00
4 Construction of security hut & fencing at Dhanari Gad Adit of MB-II Project at Dhanari, Uttarkashi.
0.40 0.00
5 Construction of garage & vehicle shed at Shaktipuram colony Chinyalisaur, Uttarkashi.
0.70 0.00
6 Renovation and modernization of BP type Quarters at Shaktipuram colony Chinyalisaur, Uttarkashi.
0.45 0.00
7 Renovation and modernization of CP type Quarters upper side near vidya Mandir School at Shaktipuram colony Chinyalisaur, Uttarkashi.
0.75 0.00
8 Renovation and modernization of Type –III Club near Shiv Mandir at Shaktipuram colony Chinyalisaur, Uttarkashi
0.35 -
9 Renovation and Modification of Roller Bucket, Guide Wall and Piers of Joshiyara Barrage MB-II, Uttarkashi
0.83 3.00
Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19
154 Uttarakhand Electricity Regulatory Commission
Details of the Revised Additional Capitalisation claimed by the Petitioner for MB-II for FY 2017-18 and FY 2018-19 (Rs. Crore)
Sl. No. Description of claimed item 2017-18 2018-19
10 Design, Supply, Erection, Commissioning & Testing of Sewer Treatment Plant with (STP) with BIO-DIGESTER, REED BED & ETP and Laying of sewer lineat Dharasu PH MB-II
0.21 -
11 Reconstruction and laying of Semi Dense Bituminous Concrete (SDBC) of Roads from Switchyard to Surge shaft at Dharasu Power House of MB-II Project.
0.91 -
12 Reconstruction and laying of Semi Dense Bituminous Concrete (SDBC) of Roads of Shaktipuram colony, Chinyalisaur of MB-II Project.
1.26 -
13 Design, Supply, Erection, Commissioning & Testing of Sewer Treatment Plant with (STP) with BIO-DIGESTER, REED BED & ETP and Laying of sewer line in Joshiyara colony ,Uttarkashi.
- 0.90
14 Fencing and CC road work of Office and Residential colony of Joshiyara Uttarkashi. 0.70 -
15 CC Road and Fencing work from Police line to sadhubela Gyansu at right side Uttarkashi.
0.45 1.00
16 Renovation of water treatment plant in Joshiyara Uttarkashi. - 0.30
17 Shotcrete/Concrete canvas in hill slope from steel bridge Dharasu to Power house Chainage 30.00 to 100.00
- 0.70
18 Security Fencing and misc. civil work around Shring Camp and NPCC campus area 0.65
19 Design, Supply, Erection, Commissioning & Testing of Sewer Treatment Plant with (STP) with BIO-DIGESTER, REED BED & ETP and Laying of sewer line in Shaktipuram Colony, Chinyalisaur, Uttarkashi
- 2.50
20 Renovatio of Spillway gate no. 1.2 &3 of Joshiara barrage 2.96 -
21 Flood protection works right bank of Bhagirathi river in front of Tail Race Channel at Dharasu power house near Hitara village, Dharasu, Uttarkashi.
1.00 1.97
22 Balance work of slope protection on hill slope behind Surge Shaft Tank of Maneri Bhali Project stage -II at Dharasu Uttarkashi.
- 0.92
23 Award given by Arbitrator in favour of M/s Hydel construction Pvt. Ltd. for Claim due to Idle Charges and Incentives. The awarded amount with interest has been deposited in Hon’ble High Court as per order of Hon'ble High Court.
18.01 -
24 Re-construction of left wing wall at downstream of Joshiyara barrage - 16.6
Other works (works not covered under Balance Capital Works) 31.04 28.39
Total additional capital expenditure claimed for MB-II Station 52.60 41.85