8/3/2019 Ex Summary 2012-13

1/14

EXECUTIVE SUMMARY

ARR AND TARIFF PROPOSAL FORTRANSMISSION BUSINESS

FOR THE FY 2012-13

HARYANA VIDYUT PRASARAN NIGAM LTD.(Regd. Office Shakti Bhawan Sec-6, Panchkula,

Haryana)

Submitted to

HARYANA ELECTRICITY REGULATORY COMMISSION

December 2011

8/3/2019 Ex Summary 2012-13

2/14

Summary of the ARR Filing

This Executive Summary of Aggregate Revenue Requirement (ARR) of Transmission &

SLDC for FY 2012-13 presents here the key elements of ARR filing made by HVPNL to HERC

and it is not a part of the filings and interested parties are encouraged to examine the documents

filed by the licensee for detailed information. Further, some of the annexure mentioned and

references made in that document may not be included in this summary and would be available

only with the complete document filed with the Commission on 07.12.2011.

1. ARR includes Transmission & State Load Despatch Centre

HVPNL is a licensee for the Transmission business and has been declared State

Transmission Utility by the Govt. of Haryana. The Government of Haryana through its notification

dated 9th December 2003 had also declared that the SLDC in the State of Haryana shall be

operated by the Haryana State Transmission Utility (HVPNL).

Since HVPNL is STU and owns the State Load Despatch Centre (SLDC). Therefore,

HVPNL is filing an ARR for the Transmission Tariff and SLDC business separately along with an

application for fixation of fee & charges of Transmission and SLDC by the Honble Commission in

pursuance to the provisions of Section 32 (3) of the Electricity Act 2003.

HVPNL also holds ownership interest in the generation projects of BBMB & IP Station.

HVPNLs share of power generation of that power projects has been assigned to Discoms vide

the Government of Haryana notification dated 11.04.2008. Under Section 86 (a) of the Electricity

Act 2003, the Honble Commission has the power to fix the tariff of generation of power within thestate. Since the above power projects are not falling within the State, HVPNL is not filing a tariff

application for fixation of generation tariff of these power projects. HVPNL will enter into a power

supply agreement with Discoms, which will contain the tariff for supply of power to Discoms of

these power projects.

2. Summary of key positions and regulatory treatment

2.1 Transmission losses

HVPNL is now a Transmission Utility. As per the principle laid down by the Honble

Commission in the earlier orders on the ARR & Tariffs, the transmission losses were a part of the

bulk supply tariff. In line with the above principle, the licensees ARR & tariff proposals for FY

2012-2013 for the transmission business do not include the impact of transmission losses.

However, the trend of transmission losses is given below for information of the Honble

Commission.

8/3/2019 Ex Summary 2012-13

3/14

Period % Losses

Interstate Intrastate TotalTransmission

2009-10 4.70 2.68 4.66

2010-11 3.82 2.63 4.21

2011-12(up to Sept, 2011)

2.18 2.61 4.79

Transmission loss has two components: Inter-state transmission losses (i.e. loss incurred in

wheeling power from out-of-state generating sources to the HVPNL system) and intra-state

transmission losses (i.e. losses taking place within the state). The utility has no control over inter-

state transmission losses.

Intra-state transmission losses comprising of technical losses and losses due to load of the

distribution utilities. The technical losses are due to energy dissipated in the conductors and

equipment used for transmission, transformation, sub-transmission. These technical losses are

inherent in a system and cannot be reduced beyond an optimum level. The losses can be further

sub-grouped depending upon the stage of power transformation & transmission system as

Transmission losses (400kV/220kV/132kV/66kV). Further the inter-state transmission losses over

a given transmission system keep varying over time depending upon power flows, voltage profile,

reactive flows, pattern of energy use, load demand, load density and capability & configuration of

transmission system etc. The transmission system owner has little control over these, except that

outage of a transmission element increases power flow on parallel path which affects losses. The

Central Electricity Regulatory Commission is also of the similar view and has categorically

indicated in the proposed approach for sharing of charges and losses in interstate transmission

system that transmission losses is the phenomenon of physics and are unavoidable.

With the installation and commissioning of meters at the interface locations of HVPNL with the

Distribution Companies (DISCOMs) at 765 locations, the transmission losses of the system arebeing calculated on the basis of energy recorded by these meters.

The transmission loss level for the years 2008-09, 2009-10 and 2010-11 & 2011-2012 (end of sept.,

2012) is here under:-

% Losses

8/3/2019 Ex Summary 2012-13

4/14

Period Interstate withReference to Import

Intra-state TotalTransmission

2008-09 4.56 2.57 4.50

2009-10 4.70 2.68 4.66

2010-11 3.82 2.63 4.21

2011-12 (ending sept.) 2.18 2.61 4.79

It is further submitted that as per CERC (Rates, Charges and Terms and Conditions for use of

intervening Transmission Facilities) Regulations, 2010, the normative transmission losses for line

length of every 50km of distance is as under:

Sr. No. Type of Transmission System Line Losses %

1. 400 kV 0.5%

2. 220 kV 1.0%3. 132 kV 4.3%

4. 66 kV 8.0%

The total number of sub-stations and transmission lines of upto October 2011 is as under:

TransmissionLines (in Ckt. Kms.)

400 kV 381.6

220 kV 4184

132 kV 3752

66 kV 2353Total 10670.6

Sub-Stations

400 kV 2220 kV 49

132 kV 16366 kV 117

Total 337

It may be seen from above that in Haryana major contribution in the Transmission system is of

132 kV and below network. It is well acknowledge fact that lower the Transmission voltage more

are the losses as also specified by CERC in the (Rates, Charges and Terms and Conditions foruse of intervening Transmission Facilities) Regulation, 2010, as stated above.

The Commission in the past had been restricting the Transmission losses and is not allowing the

actual losses through the loss figure achieved by HVPNL is very much comparable with other

best performing utilities.

8/3/2019 Ex Summary 2012-13

5/14

HVPN while submitting its response to the Compliance of Directives issued by Honble HERC has

made submissions in support of the above, the same are reproduced below for the kind

consideration of the Honble Commission.

State Year Transmission Losses

Punjab 2010-11 2.5%Andhra Pardesh 2011-12 4.1%

Rajasthan 2011-12 4.3%

Uttarakhand 2011-12 1.76%Karnataka 2011-12 4.20%

Gujarat 2009-10 4.30%UP 2009-10 4.0%

Orissa 2011-12 3.90%Chhattisgarh 2010-11 4.60%

Madhya Pradesh 2008-09 4.08%

Also according, to a study carried out by Electric Power Research Institute (EPRI) of the USAsome time back, (referred in 17th Power survey report of CEA) the losses in various elements of

the Transmission system usually are of the order as indicated below:-

System element Power losses (%)

Minimum MaximumStep-up transformers & EHV transmission system 0.5 1.0

Transformation to intermediate voltage level, transmission system &

step down to sub-transmission voltage level

1.5 3.0

Sub-transmission system & step-down to distribution voltage level 2.0 4.5

In view of the above, it is requested that the Honble Commission may allow the actual

Transmission losses which will be of the order of 2.6 % keeping in view the level achieved

upto September, 2011 of the current financial year.

2.2 Expenses of Transmission Business

The expenses for Transmission business include salary & wages, R&M Expenses, A&G

Expenses, Depreciation, interest & Finance Charges, Other Expenses, Fringe Benefit Tax,

Income Tax, special appropriation for contingency reserve, expenditure on PPP Project etc.

Licensee has also claimed return on equity capital. The details of each item have been given in

Section 5 of the ARR.

3. ARR for the ensuing year 2012-2013

Abstract of the ARR for the ensuing year 2012-2013 is as follows:

8/3/2019 Ex Summary 2012-13

6/14

Sr.Sr.No.No.

Description Projected (2012-2013)

(Rs in Millions)

11 Employees CostEmployees Cost 3496.193496.19

22 R&M ExpenditureR&M Expenditure 214.38214.3833 A&G Expenses (including other expenditure)A&G Expenses (including other expenditure) 108.25108.25

44 Interest on Pension BondsInterest on Pension Bonds 673.00673.00

55 Interest for Capital ExpenditureInterest for Capital Expenditure 1983.461983.46

66 Debenture interest (PF Bonds)Debenture interest (PF Bonds) 129.86129.86

77 Interest for Working CapitalInterest for Working Capital 357.90357.90

88 DepreciationDepreciation 2249.062249.06

99 PPP Project ExpenditurePPP Project Expenditure 681.72681.72

1010 Total ExpenditureTotal Expenditure 9893.829893.82

1111 Special Appropriations:Special Appropriations:1212 Tax on income & ProfitTax on income & Profit 510.56510.56

1313 Debt Redemption Obligation ( for redemption of PF & PensionDebt Redemption Obligation ( for redemption of PF & PensionBonds)Bonds)

481.93481.93

1414 Fringe Benefit tax for 2005-2006Fringe Benefit tax for 2005-2006 6.206.20

1515 Total Special AppropriationTotal Special Appropriation 998.69998.69

1717 Total Expenditure (including special appropriations)Total Expenditure (including special appropriations) 10892.5010892.50

1818 Return on equityReturn on equity 2551.892551.89

1919 MinusMinus Non-tariff expenditure/ (income)Non-tariff expenditure/ (income) 31.3131.31

2020 Total Aggregate revenue requirementTotal Aggregate revenue requirement 13413.0813413.08

4. Revenue Gap

For the ensuing year, the Transmission Licensee is expected to have the following

difference between its revenue requirements and what it recovers from the wheeling of

electricity of the present tariff.

ConsumersExisting Tariffs( Approved by HERC for FY

2011-12)Total Revenues from

Existing tariffs

Fixed Charges(Rs. In millions per month) (Rs in million)

UHBVNL 363.99 4367.88

DHBVNL 359.94 4319.28

Total 8687.16

Total Net

Aggregate Revenue

Requirement 13,413.08

8/3/2019 Ex Summary 2012-13

7/14

Difference 4725.92

Licensee proposes to meet the above difference through suitable increase in transmission tariffs

for which tariff proposal has been filed.

For the financial year 2012-13, HVPN is proposing the Transmission Tariff, calculated onthe basis of transformation capacity as follows:

Transmission TariffFixed Charge

(Rs. in million per month)

UHBVNL 566.256

DHBVNL 551.501

It is relevant to mention that all the costs for transmission are fixed costs only. The entireTransmission Losses would be born by the Long Term Customers (UHBVN & DHBVN) as well

as by the prospective long / short term open access customers.

Computation of Proposed Tariffs

With the aforesaid broad tariff design principles, the Licensee has followed a 4-step procedure

given below to arrive at the Transmission Tariff:

Step 1 Identify the Aggregate Costs (Revenue Requirement) for the Transmission Business

Step 2 Estimate the transformation capacity at the inter-face points during the year 2011-12.

Step 3 Estimation of monthly recoverable charges in Rs. million per monthStep 4 Calculate the estimate of total cost recovery to be made from each of the Distribution

Companies & long-term customers.

Each of these steps has been described below:

Step 1: Identify the aggregate costs (revenue requirement) for the Transmission business

Based on the ARR filings accompanied with this application, the net aggregate revenuerequirement for the Transmission business for FY 2012-13 is as follows-

Particulars Amounts (Rs millions)

Return on Equity 2551.892551.89

Total Expenditure 10892.5010892.50

Non Tariff Income 31.3131.31

Net Aggregate Revenue Requirement 13413.0813413.08

8/3/2019 Ex Summary 2012-13

8/14

Step 2: Estimate the transformation capacity at the inter-face points for the period April, 2011 to

March, 2012.

The anticipated transformation capacity at all Interface points has been verified from the record

and has been found to be 19295.60 MVA for the year 2012-2013 with following break up amongst

two DISCOMs. The transformation capacity has been estimated keeping in view the target /

estimated commissioning schedule of various schemes under execution/proposed during the

financial year 2011-2012 & 2012-2013.

Abstract of anticipated Transformation Capacity allocation in respect of DISCOMs as on

31.03.2013:

(Figures in MVA)

UHBVNL DHBVNL Total

Transformation Capacity as

on 31.03.2011

7519.70 6400.90 13920.60

Anticipated Transformation

Capacity as on 31.03.2012

8976.70 9191.90 18168.60

Projected Transformation

Capacity as on 31.03.2013

9774.20 9521.40 19295.60

% 50.66 44.34 100

Step 3: Estimation of monthly recoverable fixed charges (million Rs. per month)

The proposed Transmission Charges for the full year FY 2011-2012determined on the

basis of the Annual Revenue Requirement is provided in the following table.

Particulars Fixed Costs

Net Annual Revenue Requirement of Transmission(Rs in millions)

13,413.08

Average tariff for Transmission (Rs in million per month) 1117.76

The revised tariff is proposed to be effective from April 1, 2012

Step 4: Calculate the total cost recovery made from each of the Distribution Companies

8/3/2019 Ex Summary 2012-13

9/14

The total transmission charges to be recovered from each of the two Distribution

Companies is arrived at as follows-

Description FY 2012-13

Net Annual Revenue Requirement (Rs in million) 13,413.08

Transformation Capacity (in MVA) 19295.60

UHBVNL 9774.20

DHBVNL 9521.40

Total 19295.60

Ratio of Average Transformation Capacity

UHBVNL 50.66%

DHBVNL 49.34%

Annual Transmission charges (Rs in million) 13,413.08

Recoverable from UHBVNL 6795.07

Recoverable from DHBVNL 6618.01Total 13,413.08

Monthly Transmission charges (Rs in million) 1117.76

Recoverable from UHBVNL 566.256

Recoverable from DHBVNL 551.501

Charges for Prospective Open Access Power Customers

i) Long Term Customers: The Long term Open access customer shall submit details of

capacity needed, on the prescribed formats and will sign the long term open access

agreement as per provision in HERC Regulations on open access. The charges to be

levied on long term open access customer shall be apportioned between all long term

customers including DISCOMs on the basis of requirement of transformation capacity or

load requirement (where any additional transformer is not used) at inter connection points

and shall be recovered on monthly basis from all long term open access customer

including DISCOMs. However, the Commission has provided mechanism to recover

transmission charges in draft Open Access regulation 2011, which is yet to be notified.

Short Term Open Access Charges

A customer who contract firm transmission capacity on short-term basis should pay open

access charges on the lines of open access charges notified by HERC from time to time for using

the State Transmission facility.

8/3/2019 Ex Summary 2012-13

10/14

In order to keep uniformity of intra-state short term rates applicable to short term

customers having intra state/inter state power transactions, it is proposed to charge short term

open access charges in line with the provisions of HERC order dated 23.04.2008.and the short

term rate has been calculated accordingly.

Details of Calculations

2011-12 2012-2013Transmission Cost (Million Rs.) 8687.16 13413.08

Energy Sales (MU) 37842.20 41626.42Wheeling Charge (Rs./kWh) 0.23 0.32

The projection energy sales to be approved by the Commission for FY 2012-13 has beenconsidered as 41626.42 MU after increasing 10% of energy sales 37842.20 MU approved by

Commission for FY 2011-12.

TRANSMISSION SYSTEM AVAILABILITY

The Certified Deemed Availability in respect of HVPNL for the month of September 2010 upto

August 2011 calculated on the basis of the CERC notification dated 19.01.2009 is given below:-

All fig in %age

Month Certified deemed availability

Sept. 2010 99.6447

Oct. 2010 99.6966

Nov. 2010 99.7319

Dec. 2010 99.6053

January 11 99.6379

February 11 99.6981

March 11 99.3882

April 11 99.5580

May 11 99.5631

June 11 99.3481

July 11 99.5445

August 11 99.5327Reactive Energy Charges

DISCOMs, Generators and Short/Long Term Open Access Customer are expected to

provide adequate reactive compensation in order to ensure that they do not draw / inject

VArs during low /high voltage conditions, in line with the criteria laid under Clause 6.6 of

Indian Electricity Grid Code.

8/3/2019 Ex Summary 2012-13

11/14

According to Clause-6.6(2) of Indian Electricity Grid Code the VArh shall be @ 10

paise per KVArh w.e.f. 1.4.2010. The above charges are to be escalated at the rate of

0.5 paise per KVArh per year thereafter.

Accordingly HVPN is raising reactive energy bills on Discoms / open accesscustomers at rates fixed by CERC according to Clause-6.6(2) of Indian Electricity

Grid Code

For the FY2012-13, HVPNL proposed to charge UHBVN & DHBVN and all

short/long term Open Access Customers, the rate of 11 paise /KVArh from 1.4.2012 on

the basis of recording made by existing SEMs and individual ABT compliant meters of

short term and long term open access customers.

Need for SLDC Fee and Charges

The Electricity Act, 2003 provides under sub section (3) of Section 32 that the State Load

Dispatch Center (SLDC) may levy and collect such fee and charges from the generating

companies/licensees engaged in intra-State transmission of electricity as may be specified by the

State Commission.

It is pertinent to mention that to strengthen the Load Dispatch infrastructure in the

Northern Region (NR) a Unified Load Dispatch and Communication Scheme was undertaken by

POWERGRID. The scheme covered setting up of Northern Region Load Dispatch Centre at New

Delhi and State Load Dispatch Centres for various states of NR. The SLDC for Haryana has been

set up at Panipat with Sub Load Dispatch Centres at Dadri and Narwana. The Scheme was

commissioned on 01.08.2002.

The Govt. of Haryana vide its notification dated 9

th

December 2003 has entrusted theresponsibility to operate the State Load Dispatch Centre at Sewah (Panipat) to Haryana State

Transmission Utility and vide another Notification dated 9 th December 2003 has notified Haryana

Vidyut Parsaran Nigam Ltd. as the Haryana State Transmission Utility w.e.f. 10 th December 2003.

Keeping in view the above facts, HVPNL is seeking approval of the SLDC fees and charges to be

recovered from UHBVN, DHBVN and long term/short term open access customers, if any.

8/3/2019 Ex Summary 2012-13

12/14

Besides the long term power customers (UHBVN, DHBVN) and long term open access

customers, if any, SLDC charges are also proposed to be recovered from the Short Term

Customers in line with the Regulation on Open Access notified by the Central Regulatory

Commission and as amended from time to time.

Fee and Charges Design:

The Fee and Charges design has been based on the recovery of the Annual Revenue

Requirement of SLDC from the two distribution companies and long-term open access

customers, if any in the ratio of MW entitlement. In case of State Load Despatch Centre the work

involved is similar irrespective of actual drawl or transformation capacity. The Government of

Haryana has allocated the MW entitlement in the ratio of 50:50. As such it is proposed that State

Load Despatch Centre charges may be recovered from both the Discoms in the same ratio. As

regards other prospective long term open access customer, the charges shall be apportioned

according to MW requirement of concerned Long Term Open Access customer and the overall

recovery shall remain the same.

It is proposed to make recovery of SLDC charges on monthly basis.

Computation of proposed Fee and Charges:

The computation of the Fee and Charges involves following steps:

Step 1: - Estimate the Annual Revenue Requirement (ARR) of SLDC: The ARR of SLDC has

been estimated in the accompanying filing as follows

(Figures in rupee million)

Sr.

No.

Particulars Projected for

2011-12

Projected for

2012-13

1 Employee Cost 39.894 43.9012 Administration & General Charges 6.696 7.031

3 Repairs and Maintenance Expenses 15.367 16.136

4 Depreciation 21.400 24.272

5 Interest & Finance Charges 15.871 22.920

6 Interest on Working Capital - -

7 Other Expenses 0.001 0.0018 Income tax - 1.737

9 Prior Period Adjustments(+ / - ) - -

8/3/2019 Ex Summary 2012-13

13/14

10 Return on equity 8.680 8.680

11 Total Revenue Requirement 107.910 124.678

12 Less other income (fee etc.,) 0.5102 0.536

13 Net ARR 107.399 124.142

Step 2: - Estimation of transformation ratio for apportioning the charges among deemed long term

open access customers i.e. UHBVN & DHBVN.

The Government of Haryana vide its notification dated 11 th April 2008 while transferring

the rights relating to procurement of electricity etc. from HPGCL to Discoms (UHBVNL and

DHBVNL) apportioned the MW entitlement in the ratio of 50:50. Accordingly, it is proposed that

the present Long Term Open Access customers be charged State Load Despatch Centre tariff in

similar proportion i.e. 50:50.

The prospective Long Term Open Access customers, if any shall be charged on the basis

of the respective MW entitlement and State Load Despatch Centre charges in respect of the

Discom in which it is situated shall be apportioned accordingly.

Step 3: - Calculation of the total charges recoverable for the full financial year: The charges to be

recovered from each Discom during the full financial year 2012-13 has been calculated as follows:

Rs in million

Total ARR of SLDC 124.142

Share of UHBVNL @ 50% 62.071

Share of DHBVNL @ 50% 62.071

Step 4: - Recovery of the fees and charges : The recovery of the full charges for the financial year

2012-13 has been proposed on monthly basis by dividing the total recoverable charges by 12.

The monthly charge works out as under:

Rs in million

Monthly charges for UHBVNL 5.1725

Monthly charges for DHBVNL 5.1725

Total Recovery per month 10.345

8/3/2019 Ex Summary 2012-13

14/14

Chief Engineer/Commercial

HVPNL, Panchkula