1

CHAPTER-1

1.1: Profile of GESCOM

Gulbarga Electricity Supply Company Ltd., (GESCOM) is a Distribution

Licensee under Section 14 of the Electricity Act 2003 (hereinafter referred to as

Act). GESCOM is responsiblefor purchase of power, distribution and retail

supply of electricity to its consumer and also providing infrastructure for open

access, Wheeling and Banking in its area of operation which includes Six

Districts Viz., Bidar, Kalaburagi, Yadgiri, Raichur, Koppal and Ballari of the state

as indicated below.

Gulbarga Electricity Supply Company Limited (GECOM) is a registered

company under the companies Act, 1956, incorporated on 30th April 2002 and

commenced its operation on 1st June 2002. The registered office of the

Company is located at Kalaburagi.

1. Ballari

2. Bidar

3. Kalaburagi

4. Koppala

5. Raichur

6. Yadgiri

2

Sl. No Particulars (As on 30.09.2017) Statistics

1. Area Sq.km. 43861

2. Districts Nos. 6

3. Taluka’s Nos. 31

4. Population Lakhs 121.10

5. Consumers as on Sept-17 In Lakhs 2891342

6. Energy Consumption during FY-18

up to Sept-17 MU 3210.85

7. Demand(FY-18 up to Sept-17) Rs. in Crores 2068.99

8. Collection( FY-18 up to Sept-17) Rs. in Crores 1956.63

9. O & M Distribution Zone Nos. 2

10 Assets Rs. in Crores 2753.39

11 33KV HT line Ckt. Kms 2633.64

12 11 kV HT lines Ckt. kms. 56733.59

13 Stations

a) 220 kV Nos. 14

b) 110 kV Nos. 112

c) 33 kV Nos. 132

14 DTCs Nos. 89436

15 LT lines Ckt. Kms 85607.90

16 Total employees strength:

a) Sanctioned Nos. 10292

b) Working Nos. 7110

3

GESCOM’s area of operation is structured as below.

Name of the

O&M Zone O&M Circle O&M Division O&M Sub-division

Gulbarga

Gulbarga

Gulbarga Urban

City Sub-Division-1

City Sub-Division-2

City Sub-Division-3

City Sub-Division-4

Gulbarga Rural-1

Gulbarga Rural

Aland

Kadaganchi

Afzalpur

Gulbarga Rural-2

Jewargi

Yedrami

Shahabad

Chittapura

Kalagi

Sedam Sedam

Chincholi

Yadagiri

Yadagiri

Gurmitkal

Surapura

Hunasagi

Shahapura

Bidar

Bidar

Bidar

Bhalki

Kamathana

Aurad

Humanabad

Humanabad

Basavakalyana

Mann-E-Khalli

4

Ballari

Ballari

Ballari Urban City Sub-Division-1

City Sub-Division-2

Ballari Rural

Ballari Rural

Sanduru

Siraguppa

Hosapete Urban City Sub-Division-1

City Sub-Division-2

Hosapete Rural

Hosapete Rural

Kudligi

HagariBommanahalli

Hadagali

Raichur

Raichur Urban City Sub-Division-1

City Sub-Division-2

Raichur Rural

Raichur Rural

Manvi

Sirawar

Devadurga

Sindhanoor

Sindhanoor

Maski

Lingasugur

Koppala

Koppala

Koppala

Munirabad

Yelaburga

Gangavati

Gangavati

Karatagi

Kustagi

Each sub-division is having four to nine O&M Section offices.

The section officers are the base level offices looking into operation and

maintenance of the distribution system in order to provide reliable and quality

power supply to GESCOMs consumers.

5

Number of Consumers, Sales in MU and Revenue details of GESCOM in

FY18 ( up to Sept-17) is as follows:

The hot and dry tropical climate of the area has primarily an agro – based

economy and is economically and educationally lesser developed as compared

to other parts of Karnataka. The fact that three rivers (Tungabhadra, Bheema,

and Krishna) flowing through this region, provide little respite to the farmer’s

dependence on rain. Dams constructed across Tungabhadra River in Ballari

District and Krishna River in Kalaburagi District have obviated this dependence

to certain extent. Bore wells and open wells run dry during summer. The

primary crops cultivated in this area are Paddy, Sugarcane, Pulses, Jawar, Cotton

etc.

Industries and Power Generation

The prestigious Raichur Thermal Power Station (RTPS), Bellary Thermal

Power Station (BTPS) and the Hydel Power Generation unit at Munirabad which

are owned by KPCL and also number of Independent Power Producing units are

located in the GESCOM area.

However, lack of proper infrastructure facilities has led to the region

being starved of industrial growth. The industrial scenario is dotted by small

and big Steel & Cement, Dal, Sugar and Edible Oil Industries.

Distribution Network

The following statistics provide a brief overview on some of GESCOM's

distribution assets.

CATEGORY GESCOM

No. of Installations Sales in MU Revenue

In Crs.

Domestic 2178246 723.51 408.88

Commercial 248995 204.91 180.48

Industrial 62156 511.08 424.50

Agriculture 348372 1467.10 806.34

Others 53573 304.25 248.78

Total 2891342 3210.85

2068.99

6

As on 30.09.2017, the distribution network of the Company comprises

14 of 220 KV, 112 of 110 kV and 132 of 33 kV stations, 2633.64 kms of 33 KV

line, 56733.59 kms 11 kv line, 85607.90 kms of LT line and 89436 number of

distribution transformer centers.

Human Resource

As on 30.09.2017, the total working strength of GESCOM is 7110 against

the sanctioned posts of 10292. The Company resorts to outsourcing the very

needy & critical services, to tide over the shortage of manpower and to provide

better service to the consumers.

The study of the man power requirement based on the existing job analysis is

under way. Emphasis is given on training of the employees on various subjects

and fields in order to meet the challenges before it effectively.

Customer Service

Customer service has been improved in the area of billing significantly

after the computerization of the billing system in all the sub-divisions. Owing to

addition of 4 new stations during 16-17 and 6 new stations during 17-18(up to

Sept-17),, it has enabled the Company to provide quality and reliable power

supply to the customers with minimal interruptions.

Commercial Efficiency

GESCOM has been using the media effectively to bring awareness among

the consumers on the Anti Theft Law. This is aimed at improving the revenue by

decreasing theft of energy. Other initiatives like effective implementation of the

Anti Theft Law, replacing of MNR meters, regularization of unauthorized

connections, mass disconnection drive etc., are also underway.

1.2 Mission Statement of GESCOM

The company intends to face the challenges ahead by imbibing and

accomplishing the company’s mission statement, which proclaims:

“The mission of the GESCOM is to ensure reliable quality power to its

customers at competitive prices. The GESCOM is committed to achieve this

mission through:

Encouraging best practices in distribution, Encouraging high order maintenance of its technical facility. Emphasizing the best standards in customer service and

7

Optimizing its human and technical resources for the benefit of all its customers”.

1.3 ERC Filing Requirement

In terms of Section 27 of the KERC and the Tariff Regulation -2000 (with

amendments) framed by the Honorable Commission, the licensee is required to

file its Expected Revenue from Charges not later than four months before the

commencement of the financial year i.e., on or before 30.11.2017for the

ensuing financial year commencing from 1st April, 2018. The Expected

Revenue from charges and Revision of Retail Supply Tariff for FY-19 under MYT

principles is herewith submitted.

The formats prescribed in KERC (Tariff) Regulations are enclosed with

this petition. The details are furnished in respect of MYT filing for the year FY-

19. The details of the revenue anticipated and the expenditure assessed for FY-

19 is detailed in the following paragraphs.

Hon’ble Commission vide Ltr. No. B/07/17/1292 dated 07.11.2017has

intimated to Tariff filing for the year FY-19 and Annual Revenue Requirement,

Distribution/Retail Tariff for FY-19 on or before 30.11.2017 under MYT

principle.

The information provided on the previous year FY-17 is as per the audited

Accounts. The information provided for the financial year FY-18 is as per the

provisional and for the FY-19 is projected. The Hon’ble Commission is therefore

requested to consider these figures. The licensee most respectfully submits that

it has made sincere efforts to comply with the requirements of the KERC (Tariff)

Regulations with the information currently available.

8

CHAPTER–2

Annual Performance for Fy-17

2.1 ARR for FY17

Annual Performance Review for FY17 is as here under Amt in Crs.

Sl. No

Particulars Actual Approved Difference

1 Energy @ Gen Bus in MU 8046.46 8608.65 562.19

2 Energy @ Interface in MU 7691.05 8309.93 618.88

3 Distribution Losses in % 17.33 17.00 -0.33

Sales in MU

4 Sales to other than IP & BJ/KJ installation 6358.35

3471.75

5 Sales to IP & BJ/KJ installation 3425.48

Total Sales 6358.35 6897.23 538.88

Revenue at in Rs Crs

6 Revenue from tariff, Tariff subsidy and Misc.

3773.28 3648.29

7 Other income 87.61 46.00

Total Revenue 3860.89 3694.29 -166.60

Expenditure in Rs Crs

8 Power Purchase Cost 2858.68 2692.24 -166.44

9 Transmission charges of KPTCL 589.85 402.84 -187.01

10 SLDC Charges 2.67 2.65 -0.02

Power Purchase Cost including cost of transmission

3451.2 3097.73 -353.47

11 Employee Cost 335.16

440.47

12 Repairs & Maintenance 33.37

13 Admin & General Expenses 80.01

Total O&M Expenses 448.54 440.47 -8.07

14 Depreciation 120.14 125.00

Interest & Finance charges

15 Interest on Loans 89.71 115.59

16 Interest on Working capital 14.52 81.00

17 Interest on belated payment of power purchase cost

210.92 0.00

9

18 Interest on consumer deposits 34.03 35.29

19 Other Interest & Finance charges 1.11 0.00

20 Less interest & other expenses capitalised

-7.87

Total Interest & Finance charges 350.29 224.01 -126.28

Net ARR

21 Other Debits 88.91 0.00 -88.91

22 Net Prior Period Charges -57.79 0.00 57.79

23 Return on Equity 0 53.33 53.33

24 Provision for taxation 0 0.00 0.00

26 Funds toward consumer relation/consumer education

0 0.50 0.50

27 Surplus/(deficit) for FY-15 carried forward

69.43 69.43

28 Regulatory asset for FY-16 0 -152.94 -152.94

29 Net ARR for FY-17 4516.87 3978.56 -538.31

30 Surplus/(deficit) for FY-17 -655.98

Note: The Revenue for the year is arrived after accounting the Regulatory Asset of Rs

353.77 Crores on accrual cost being the difference of actual power purchase cost and

the approved power purchase cost for the year 2016-17 as per the Guidance note of the

ICAI on accounting of Rate Regulated Activities vide GN(A) (Revised 2015). The loss of

Rs. 302.21 Crores is depicted in the Accounts of GESCOM for FY 17 is after accounting

of the Regulatory Asset with corresponding Income of Rs 353.77 Crores as recoverable

from Consumers in future years.Hence , we request the Hon’ble Commission to

consider the Regulatory Asset of Rs. 353.77 as part of GAP to be passed on to the

Consumers in the Tariff.

Details of Capital Budget Investment Approved and Expenditure booked for FY 2017. PP

Sl.

No. Works

Approved

Budget for

FY – 2017

Expenditure

Booked for

FY 2017

1 33Kv Sub-Stations, 33kV Line works & Augmentation of

33kV Sub-Station. 8

2 RGGVY Works 3 3 RAPDRP Works 10 4 Non-RAPDRP Works 20 5 Reconductoring works 3 6 DTC Metering works 10 7 Water Supply Works. 2 8 Additional DTC's Works. 2

9 Replacement failed 11kV Transformers & 33kV Power

Transformers. 10

10

10 Replacement of MNR Meters. 3 11 Providing ETV Meters. 1 12 Providing HT Metering Cubicles for Ring Fencing. 0.5 13 Sevice Connection Works. 10

14 SI Works (33kV Link Line / Express Feeders) & (11kV Link

Line / Express Feeders). 6

15 Nirantara Jyothi Works. 50

16 a) Major Replacement in Sub-Stations & Lines, R&M to

33kV Stations & Lines, 11kV DTC's & Lines. 2

17 Civil Engineering works. 6 18 It Initiatives 1.5 19 HVDS works. 12 20 Providing ABC, UG Cables & RMUs. 65 21 SCADA Works 1 22 SCP & TSP Works. 0 23 Ganga Kalyan Scheme works. 12 24 T&P Articles. 1 25 Replacing of Electro Magnetic Meters by Static Meters 0.5 26 Metering of IP / Street Lights/ BJ & KJ Sets. 0.5

27 Providing Infrastructure to Regularization of Unauthorized IP

Sets. 20

28 R.E. General Works. 0 29 Prevention of Electrical Accident & Safety. 2 30 Electrification of Rehabilitation Villages. 1.5 31 LT Line Conversion, Fixing of SMC Box to DTC and

Replacement of Broken Poles.

0 32 Energisation of IP Sets General Electrification of HB/JC's and

KJ's 1

33 Providing Times Switches to Street Lights. 0 34 Shifting of Meters to Outside Premises. 0 35 Taluka Wise Segregation. 0 36 IPDS 50 37 Enhancement of DTC 1 38 Peplacement of Power Transformer 1 39 IP set work 2 40 Deen Dayal Upadyaya Grameen Jyoti Yojane 50 41 Replacement of Age old S/S & Lines 3 42 Electrification of HB/ JC s 0.5 43 Electrification of Kuteer Jyoti 0.5

Total 374 486.61*

*The work wise details are as per the annexure-1

2.2 Financial performance of GESCOM for FY-17

Sl.No. Particulars FY17

Receipts

1 Revenue from Tariff, Tariff subsidy and

misc. charges

3773.28

2 Other income 87.61

Total Revenue 3860.89

Expenditure

11

3 Power Purchase Cost 2858.68

4 Transmission charges of KPTCL 589.85 5 SLDC Charges 2.67 Power Purchase Cost including cost of

transmission 3451.2

6 O&M Expenses 448.54 7 Depreciation 120.14 Interest & Finance charges

8 Interest on Loans

350.29

9 Interest on Working capital

10 Interest on consumer deposits

11 Interest on belated payment of

power purchase cost

12 Other Interest & Finance charges

Total Interest & Finance charges 350.29

13 Other Debits 88.91 14 Net Prior Period Debit/Credit -57.79 Net ARR for FY-17 4516.87

2.3 GESCOM’s Accumulated Profit / Losses Amount in Rs.

Crs

Particulars Profit / (Loss)

for the year Cumulative

profit / (Loss)

For the year 2016-17 (655.98) (655.98)

For the year 2018-19 (504.04) (1160.02)

The loss for FY 17 is after accounting income on Regulatory Asset

recoverable from consumers in subsequent financial years

2.4 Energy sale for FY-17

Tariff wise approved &Actual number of installations and Salesfor FY17

Category Sales for FY-17in MU No. of installation FY-17in

Approved Actuals Approved Actuals

LT-2a 1068.07 1041.76 1570058 1543967

LT-2b 9.20 10.45 4131 4149

LT-3 289.14 284.02 242198 242791

LT-4 (b) 11.81 1.91 2129 1946

LT-4 (c) 1.44 1.22 490 382

LT-5 172.17 163.86 59483 59578

12

LT-6 167.15 201.38 16238 16918

LT-6 237.51 213.77 14209 12887

LT-7 18.43 16.90 37495 20637

HT-1 86.87 92.81 150 131

HT-2 (a) 1192.42 905.86 1402 1397

HT-2 (b) 72.19 70.74 323 345

HT2C 11.95 18.07 82 129

HT-3(a)& (b) 114.63 89.45 307 307

HT-4 13.31 13.07 34 30

HT-5 5.46 7.83 30 26

BJ/KJ 118.60 108.14 551646 597195

IP 3306.88 3122.71 358483 339639

Total 6897.24 6363.96 2858887 2842454

2.4.1: SalesotherthanIPsets and BJ/KJ:

TheCommissioninitsTarifforderdated30-03-

2016hadapprovedtotalsalestovariousconsumercategoriesat6897.24MUasagains

ttheGESCOM’sproposalof 6808.08MU.TheActualsalesoftheGESCOMfor FY-

17is6363.96MUindicatingadecreaseinsalestoanextentof444.12MUwithrespectt

otheapprovedsales.ThereisadecreaseinsalestoLT-categories (other than IP and

BJ/KJ)by197.86MUand there is a decreaseinsales to HT-categories by299MU

withrespecttotheapprovedsales.

2.4.2:Sales to IP Sets:

InitsTariffOrderdated30.03.2016,theCommissionhadapprovedspecificcons

umptionofIPsetsat9503units/installation/annumfortheentirecontrolperiodofthe

FY-17. IP sets consumption of GESCOM works out to 9194.20units/ installation/

annum for the FY-17, which indicates an decrease in the specific consumption by

308.8units/installation/annum.The total IPsets consumption of GESCOM for the

FY17 is 3122.71MU as against 3306.88MU sales quantities approved by the

Commission.The difference in IPsets consumption between the approved and the

actual for the FY17 is 184.17MU. Thus, the specific consumption has decreased

by 308.8units/installation/annum.

13

It is noted that the specific consumption achieved by the GESCOM for the

FY17 has decreased by about 3.25%

Particular No., of

Installations in Nos

Consumption in MU

Specific consumption

installation Annam

IP Set 339639 3122.71 9194.20

2.4.3: Sales to BJ/KJ:

The total BJ/KJ consumption of GESCOM for the FY17 is 108.14 MU as

against 118.60 MU sales quantities approved by the Commission. The difference

in BJ/KJ consumption between the approved and the actual for the FY17

isreduced by 10.46 MU.

2.5: Distribution Losses for FY17:

The Commission had approved distribution losses for FY17 as shown in

the table below:

Range FY17

Upper limit 17.50%

Average 17.00%

Lower Limit 16.50%

The distribution loss of GESCOM for FY-17 is as shown in the table below:

SI. No Particulars For FY-17

1 Input energy at IF points in MU 7691.05

2 Total sales in MU 6358.35

3 Avg. Distribution loss in % 17.33

In the Tariff Order 2016, Hon’ble Commission has approved a distribution

loss level of 17.50 % (Upper limit) for FY-17, against which the GESCOM has

achieved distribution loss of 17.25% which is less than 17.5%.

2.6: Financial Performance:

14

The financial performance of GESCOM as per the audited Annual Accounts for

FY-17 and the Annual Revenue Requirement approved by the Hon’ble

Commission in the Tariff Order-2016 is tabulated below;

Income :

Sl.

No

Particulars Income (Rs Cr)

Approved Actuals

1 Revenue at existing tariff 3648.29 3860.89

2 Energy Sales in MU 6897.23 6358.35

Expenditure

Sl.

No Particulars

Expenses (Rs Cr)

As approved Actuals

1 Power purchase cost inclusive of transmission

charges and SLDC Charges 3097.73 3451.2

2 R&M Expenses

440.47 448.54 3 Employee Expenses

4 A&G Expenses

5 Depreciation 125.00 120.14

6 Interest & Finance Charges

7 Interest on Loan Capital

224.01 350.29

8 Interest on Working Capital

9 Interest on Consumer Deposits

10 Interest on belated payment of power purchase

11 Other Interest & Finance Charges

12 Less Interest & other expenses capitalized

13 Other Debits (incl. Prov for Bad debts) 0.00 88.91

14 Extraordinary Items 0.00 0.00

15 Other (Misc.)-net prior period credit 0.00 -57.79

Total

16 ROE 53.33 0.00

17 Other Income 46.00 87.61

18 Provision for taxes 0.00 0.00

19 Fund towards Consumer Relations / Consumer

Education 0.05 0.00

NET ARR 4516.87

The major variation in the expenditure, with reference to the approved

costs, is observed in O&M Cost, Interest & Finance Charges and power purchase

cost including cost of Transmission.

15

2.7 :Power Purchase Cost:

The details of the Power Purchase quantum and Cost approved by KERC

and actual Cost is as under:

Particulars Energy in MU Rs .Crores

As approved by KERC at Generator Bus (Tariff

Order 2016) (Cost including Transmission &

SLDC Charges)

8608.65 3097.73

Actuals of GESCOM after accounting of Energy

Balancing Liability (Cost including Transmission

& SLDC Charges)

8046.46 3451.20

2.8 Interest & Finance Cost:

This includes, the accounting of the Interest payable to the KPCL on the

past dues payable. Though the current demand of KPCL is being fully paid

by GESCOM since last couple of years, the old arrears are still outstanding

and hence, Interest is levied by KPCL and the same is accounted.

Therefore, it is submitted before the Hon’ble Commission to allow the

interest liability on belated power purchase payments.

2.9 Loss: It is to be submitted before the Hon’ble Commission that the loss for

FY-17 is Rs. 655.98 Cr.

2.10 Annual Accounts:

Annual for FY-17 is enclosed as ANNEXURE-1.

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CHAPTER-3

Rationale for ERC Filing

GESCOM is filing this ARR & ERC under MYT principles for FY-19 with the

following imperatives

3.1 Revenue insufficient to Cover Costs in FY-19.

Based on the 2017 tariff order and subsequent amendments, GESCOM is

unable to meet its current costs as there is a deficit of Rs 655.98 crs for FY 17 &

Rs 504.04 crs deficit for FY 19 total amounting to Rs 1160.02 crs. The deficit will

met by revision of tariff.

Cost Coverage / Deficit Rs in Crs.

Sl. No

Particulars FY-17 Actual

FY-18 Projected

FY-19 Projected

1 Revenue from Existing Tariffs (including Misc. Revenue &

Other Income) 3860.89 4320.64 4614.04

2 Expenditure 4516.87 5004.08 5774.06

3 Rate of Return at 15.5% on equity and surplus for FY 17

& FY19 0.00 34.18 45.81

4 Deficit (-) with existing tariffs -655.98 683.44 1160.02

5 Subsidy receivable from GoK 0.00 0.00 0.00

6 GAP ( Sl.No 2-1) (655.98) (683.44) (1160.02)

7 Met by Tariff Hike

162 ps/unit

Note: Gap of FY 17 and FY 19 is considered for Tariff hike with proposal

of 162 Ps per unit for all category installations in the FY 19