Final Tariff Order of UPCL for FY 2018-19 21.03.2018 With Hindiuerc.gov.in/ordersPetitions/orders/Tariff/Tariff Order... · 2018. 7. 10. · Order on True up for FY 2016-17, Annual

Order on True up for FY 2016-17,

Annual Performance Review for FY

2017-18

&

ARR for FY 2018-19

For

Uttarakhand Power Corporation 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. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views .... 8

2.1 General ...................................................................................................................................... 8

2.2 Overall Tariff Increase ............................................................................................................. 9

2.3 Domestic Tariff ....................................................................................................................... 11

2.4 Non-Domestic Tariff .............................................................................................................. 12

2.4.1 Tariff Hike ................................................................................................................................ 12

2.5 Agricultural Tariff .................................................................................................................. 13

2.6 Agriculture Allied Activities ................................................................................................. 15

2.7 Industrial Tariff ...................................................................................................................... 16

2.7.1 Tariff Hike ................................................................................................................................ 16

2.8 Time of Day Tariff .................................................................................................................. 19

2.8.2 Load Factor based Tariff.......................................................................................................... 20

2.9 Fuel Charge Adjustment ......................................................................................................... 22

2.10 Minimum Consumption Guarantee (MCG) .......................................................................... 23

2.11 Rebate and Incentives ............................................................................................................ 25

2.12 Energy Sale Forecast............................................................................................................... 28

2.13 Cost of Supply and Cross Subsidy ........................................................................................ 30

2.14 Continuous Supply ................................................................................................................. 30

2.15 Components on ARR and Revenue........................................................................................ 32

2.15.1 Power Purchase Cost ............................................................................................................... 32

2.15.2 Return on Equity ...................................................................................................................... 36

2.15.3 Operation & Maintenance Expenses ...................................................................................... 38

2.15.4 Interest and Finance Charges .................................................................................................. 39

2.15.5 Depreciation ............................................................................................................................. 40

2.15.6 Non Tariff Income.................................................................................................................... 40

2.16 Consumer Security Deposit ................................................................................................... 41

2.16.2 Sharing of Gains & Losses ....................................................................................................... 43

2.16.3 Provision for Bad and Doubtful Debts ................................................................................... 44

2.17 Capital Expenditure ............................................................................................................... 45

2.18 Truing-up for Past Years ........................................................................................................ 47

ii

2.19 Distribution Losses ................................................................................................................48

2.20 Departmental Employees .......................................................................................................52

2.21 Tariff for Cane Crushers .........................................................................................................54

2.22 Metering and Billing ...............................................................................................................54

2.23 Temporary Connections .........................................................................................................58

2.24 KCC Data ................................................................................................................................58

2.25 Quality of Power ....................................................................................................................59

2.26 Railway Traction ....................................................................................................................60

2.27 Open Access .............................................................................................................................64

2.28 Collection Efficiency ...............................................................................................................68

2.29 Promotion of Renewable Energy ...........................................................................................68

2.30 Miscellaneous Comments .......................................................................................................70

2.30.1 Terms and Conditions for Seasonal Industries (RTS-7) ......................................................... 70

2.31 Views of State Advisory Committee: ....................................................................................71

3. Petitioners’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing-up

for FY 2016-17 ........................................................................................................................................... 75

3.1 Impact of Change in Financing from FY 2012-13 to FY 2015-16 ..........................................75

3.2 Truing-up for FY 2016-17 ........................................................................................................77

3.2.1 Sales ........................................................................................................................................... 78

3.2.2 Distribution Losses ................................................................................................................... 85

3.2.3 Power Purchase Expenses (Including Transmission Charges) .............................................. 86

3.2.4 Operation and Maintenance (O&M) Expenses ....................................................................... 92

3.3 Cost of Assets and Financing .................................................................................................99

3.3.1 Capital cost of Original Assets ................................................................................................. 99

3.3.2 Financing of Capital Cost ....................................................................................................... 101

3.3.3 Provisions for Bad and Doubtful Debts ................................................................................ 106

3.3.4 Interest on Working Capital (IoWC) ..................................................................................... 108

3.3.5 Return on Equity .................................................................................................................... 109

3.3.6 Non Tariff Income .................................................................................................................. 110

3.4 Tariff Revenue ....................................................................................................................... 112

3.5 Sharing of Gains and Losses ................................................................................................ 116

3.6 ARR and Revenue for FY 2016-17 ........................................................................................ 119

iii

4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual

Revenue Requirement for FY 2018-19 ................................................................................................. 120

4.1 Background ........................................................................................................................... 120

4.2 Sales ....................................................................................................................................... 122

4.3 Distribution Loss Trajectory ............................................................................................... 127

4.4 Aggregate Revenue Requirement ......................................................................................... 132

4.5 Power Purchase Cost ........................................................................................................... 133

4.5.1 Power Purchase from UJVN Ltd. ........................................................................................... 137

4.5.2 Power Purchase from NHPC Ltd. ......................................................................................... 138

4.5.3 Power Purchase from THDC India Ltd. ................................................................................ 139

4.5.4 Power Purchase from NTPC Ltd. .......................................................................................... 140

4.5.5 Power Purchase from SJVN Ltd............................................................................................. 141

4.5.6 Power Purchase from NPCIL Stations .................................................................................. 141

4.5.7 Power Purchase from existing Renewable Energy Sources ................................................. 142

4.5.8 Power Purchase from Vishnu Prayag HEP and GVK Srinagar (State Royalty Power) ...... 142

4.5.9 Power Purchase from Sasan UMPP ....................................................................................... 142

4.5.10 Power purchase from State Gas Generating Station............................................................. 143

4.5.11 Power purchase from Greenko Budhil Hydro ...................................................................... 143

4.5.12 Power purchase from upcoming generating stations........................................................... 144

4.5.13 Energy available from Firm Sources...................................................................................... 145

4.5.14 Power Purchase for fulfilling RPO ........................................................................................ 145

4.5.15 Deficit/ (Surplus) energy ....................................................................................................... 147

4.5.16 Cost of power purchase .......................................................................................................... 147

4.6 Cost of Meeting RPO Target ............................................................................................... 156

4.7 Transmission Charges .......................................................................................................... 157

4.7.1 Inter-State Transmission Charges payable to PGCIL ........................................................... 157

4.7.2 Intra-State Transmission Charges payable to PTCUL .......................................................... 157

4.7.3 Transmission Charges ............................................................................................................ 157

4.8 SLDC Charges ....................................................................................................................... 158

4.9 GFA and Additional Capitalisation ................................................................................... 158

4.9.1 GFA base for FY 2017-18 and FY 2018-19 .............................................................................. 158

4.10 Means of Finance .................................................................................................................. 162

4.11 Interest and Finance Charges ............................................................................................... 162

4.11.1 Depreciation ............................................................................................................................ 165

iv

4.11.2 Operation and Maintenance expenses .................................................................................. 166

4.11.3 Employee Expenses ................................................................................................................ 168

4.11.4 R&M Expenses ........................................................................................................................ 172

4.11.5 A&G Expenses ........................................................................................................................ 173

4.11.6 O&M Expenses ....................................................................................................................... 176

4.11.7 Interest on Working Capital................................................................................................... 176

4.11.8 Capital required to finance shortfall in collection of current dues ...................................... 178

4.11.9 Adjustment for security deposits and credit by power suppliers ....................................... 178

4.11.10 Return on Equity .................................................................................................................... 179

4.11.11 Income Tax .............................................................................................................................. 180

4.11.12 Provision for Bad and doubtful debts ................................................................................... 180

4.11.13 Non-Tariff Income .................................................................................................................. 182

4.11.14 Adjustment of revenue from Free Power .............................................................................. 182

4.11.15 Treatment of past year adjustments ...................................................................................... 183

4.11.16 Revenue Requirement for FY 2018-19 ................................................................................... 184

4.11.17 Revenue at Existing Tariff ...................................................................................................... 184

4.11.18 Revenue Gap for FY 2018-19 at existing Tariff ..................................................................... 185

5. Tariff Rationalisation, Tariff Design and Related Issues ....................................................... 187

5.1 Tariff Rationalisation and Tariff Design for FY 2018-19 .................................................. 187

5.1.1 General .................................................................................................................................... 187

5.1.2 Petitioner’s Proposals ............................................................................................................. 187

5.1.3 Commission’s Views on Tariff Rationalisation Measures ................................................... 190

5.1.4 Treatment of Revenue Gap .................................................................................................... 211

5.1.5 Cross Subsidy ......................................................................................................................... 212

5.1.6 Category-wise Tariff Design .................................................................................................. 212

5.1.7 RTS-2: Non-Domestic Tariff ................................................................................................... 214

5.1.8 RTS-3: Government Public Utilities....................................................................................... 216

5.1.9 RTS-4: Private Tube Wells/Pump Setsand Agriculture Allied Activities .......................... 217

5.1.10 RTS-5: Industry ....................................................................................................................... 217

5.1.11 RTS-6: Mixed Load ................................................................................................................. 219

5.1.12 RTS-7: Railway Traction ......................................................................................................... 219

5.2 Revenue for FY 2018-19 ......................................................................................................... 220

5.3 Cross Subsidy ........................................................................................................................ 220

5.4 Open Access Charges ............................................................................................................ 222

v

6. Review of Commercial Performance of UPCL ......................................................................... 226

6.1 General .................................................................................................................................. 226

6.1.1 Consumer Mix during FY 2015-16 & FY 2016-17 .................................................................. 228

6.1.2 Consumption Pattern during FY 2015-16 & FY 2016-17 ....................................................... 229

6.1.3 Revenue Pattern during FY 2015-16 & FY 2016-17 ............................................................... 231

6.2 Commission’s Analysis and Directions on Commercial Performance ............................ 232

6.2.1 Metering .................................................................................................................................. 234

6.2.2 Billing....................................................................................................................................... 241

6.2.3 Billing and Bill Collection System.......................................................................................... 247

6.3 Energy Audit ......................................................................................................................... 250

6.4 AT&C Losses ......................................................................................................................... 251

6.5 Commission’s Analysis and Directions on Financial Performance ................................. 255

6.5.1 Liquidity Ratio ........................................................................................................................ 255

6.5.2 Solvency Ratio ......................................................................................................................... 259

6.5.3 Profitability Ratio .................................................................................................................... 261

6.5.4 Operating or Activity Ratio .................................................................................................... 262

6.5.5 Efficiency Ratio ....................................................................................................................... 265

6.5.6 Conclusion............................................................................................................................... 268

7. Commission’s Directives ............................................................................................................ 270

7.1 Compliance to the Directives Issued in Tariff Order for FY 2017-18 dated March 29, 2017270

7.1.1 Performance Report ................................................................................................................ 270

7.1.2 Sales ......................................................................................................................................... 271

7.1.3 Load Shedding ........................................................................................................................ 274

7.1.4 AT&C Losses ........................................................................................................................... 275

7.1.5 Power Purchase Quantum and Cost ..................................................................................... 276

7.1.6 Fixed Assets Register .............................................................................................................. 277

7.1.7 Depreciation ............................................................................................................................ 279

7.1.8 Return on Equity ..................................................................................................................... 280

7.1.9 Employee Expenses ................................................................................................................ 281

7.1.10 Bad &Doubtful Debts ............................................................................................................. 284

7.1.11 Reliability Indices ................................................................................................................... 285

7.1.12 Voltage wise Cost of Supply .................................................................................................. 285

7.1.13 Demand Side Management Measures ................................................................................... 287

vi

7.1.14 Issues raised by the Petitioner again despite Commission’s ruling in previous Tariff

Orders ...................................................................................................................................... 288

7.1.15 Metering of unmetered connections ...................................................................................... 289

7.1.16 Interest on GPF Trust ............................................................................................................. 289

7.1.17 Power Purchase Expenses (Including Transmission Charges) ............................................ 290

7.1.18 Deficit/Surplus Power ........................................................................................................... 291

7.1.19 Status of NA/NR, IDF/ADF/RDF ....................................................................................... 292

7.1.20 Replacement of Improper, Non-Functional, Stop/Stuck up defective or IDF Meters ....... 293

7.1.21 Replacement of Mechanical Meters ....................................................................................... 294

7.1.22 Ghost/Fictitious Consumers ................................................................................................. 295

7.1.23 NB & SB Cases ........................................................................................................................ 296

7.1.24 Outstanding Arrears............................................................................................................... 297

7.1.25 Status of KCC Consumers ...................................................................................................... 298

7.1.26 Status of Revenue realisation per unit sold .......................................................................... 299

7.1.27 Billing and Collection System ................................................................................................ 300

7.1.28 Energy Audit .......................................................................................................................... 301

7.1.29 Transfer of Distribution Business from UJVN Ltd. to UPCL (Reference Para 7.2.22 of Tariff

Order dated 10.04.2014) ......................................................................................................... 302

7.1.30 Departmental Employees ....................................................................................................... 303

7.1.31 Location of Installation of Meters .......................................................................................... 305

7.1.32 Transfer of Petitioner’s Personnel ......................................................................................... 305

7.1.33 Water Tax ................................................................................................................................ 306

7.1.34 Open Access Charges ............................................................................................................. 306

7.1.35 Tariff Hike ............................................................................................................................... 308

7.1.36 Collection Efficiency ............................................................................................................... 309

7.1.37 Metering & Billing .................................................................................................................. 310

7.1.38 Construction of 33/11 kV Sub-station ................................................................................... 311

7.1.39 LED Distribution .................................................................................................................... 312

7.1.40 Defective Metering Correction .............................................................................................. 312

7.1.41 Online Load Survey Reports .................................................................................................. 313

7.1.42 Delay in Fault Rectification .................................................................................................... 313

7.1.43 Proof of Ownership ................................................................................................................ 314

7.1.44 Tariff Revenue ........................................................................................................................ 314

7.1.45 Distribution Loss Trajectory .................................................................................................. 314

7.1.46 Impact of Seventh Pay Commission ...................................................................................... 315

vii

7.1.47 Prepaid Metering .................................................................................................................... 315

7.1.48 Current Ratio........................................................................................................................... 316

7.1.49 Repair & Maintenance to Inventory Ratio ............................................................................ 317

7.1.50 Average Collection Period ..................................................................................................... 317

7.2 Fresh Directives .................................................................................................................... 318

7.2.1 Departmental Employees ....................................................................................................... 318

7.2.2 Billing....................................................................................................................................... 318

7.2.3 Temporary Connection........................................................................................................... 319


7.2.5 Views of State Advisory Committee ..................................................................................... 319

7.2.6 Cost of Free Power .................................................................................................................. 319

7.2.7 Depreciation ............................................................................................................................ 319

7.2.8 Bad Debt .................................................................................................................................. 319

7.2.9 Distribution Loss..................................................................................................................... 320

7.2.10 Impact of VII Pay Commission .............................................................................................. 320

7.2.11 Additional A&G Expenses ..................................................................................................... 320

7.2.12 Adjustment of Free Power ..................................................................................................... 320

7.2.13 Consumer Mix ........................................................................................................................ 320

7.2.14 Conductor Augmentation ...................................................................................................... 320

7.2.15 Inventory Management .......................................................................................................... 321


7.3 Conclusion ............................................................................................................................. 321

8. Annexures ..................................................................................................................................... 323

8.1 Annexure 1: Rate Schedule Effective from 01.04.2018 ........................................................ 323

8.2 Annexure 2: Schedule of Miscellaneous Charges ................................................................ 347

8.3 Annexure 3: Public Notice .................................................................................................... 348

8.4 Annexure 4: List of Respondents ......................................................................................... 350

8.5 Annexure 5: List of Participants in Public Hearings ......................................................... 353

viii

List of Tables

Table 1.1: Publication of Notice ................................................................................................................. 5

Table 1.2: Schedule of Hearing .................................................................................................................. 5

Table 2.1: Details of year wise capital expenditure and improvement in collection (productivity)

submitted by the Petitioner .............................................................................................................. 46

Table 2.2: Revised Level of Distribution Loss proposed by the Petitioner ........................................... 51

Table 3.1: Revised Means of Finance of additional capitalization from FY 2012-13 to FY 2015-16 as

claimed by the Petitioner (Rs. Crore) ............................................................................................... 76

Table 3.2: Impact of change in funding of additional capitalisation from FY 2012-13 to FY 2015-16 as

claimed by the Petitioner (Rs. Crore) ............................................................................................... 76

Table 3.3: Impact of change in funding of additional capitalisation from FY 2012-13 to FY 2015-16

approved by the Commission (Rs. Crore) ....................................................................................... 77

Table 3.4: Break up of Sales submitted by the Petitioner for FY 2016-17 (MU) .................................... 79

Table 3.5: Findings of the Sales audit for FY 2015-16 ............................................................................. 80

Table 3.6: Re-casted Sales for Domestic Category for FY 2016-17 (MU) ............................................... 81

Table 3.7: Departmental Employees of UPCL, PTCUL and UJVN Ltd. as on 31.03.2016 and

31.03.2017 as per Commercial Diary ................................................................................................ 82

Table 3.8: Consumption Pattern of Departmental Employees .............................................................. 82

Table 3.9: Re-casted sales for Other Categories for FY 2016-17 (MU) ................................................... 84

Table 3.10: Category-wise Sales for FY 2016-17 (MU) ............................................................................ 85

Table 3.11: Assessed Distribution losses for FY 2016-17 (MU) .............................................................. 86

Table 3.12: Power Purchase Cost approved in the Tariff Order Vs Actual Power Purchase Cost for

FY 2016-17 (Rs. Crore)....................................................................................................................... 87

Table 3.13: Cost of UI Overdrawal approved by the Commission ....................................................... 89

Table 3.14: Details of Cost of Free Power (Rs. Crore) ............................................................................. 90

Table 3.15: Power Purchase Cost claimed by UPCL and approved by the Commission for FY 2016-

17 (Rs. Crore) ..................................................................................................................................... 91

Table 3.16: Power Purchase Cost claimed by UPCL and approved by the Commission for FY 2016-

17 (Rs. Crore) ..................................................................................................................................... 91

Table 3.17: Revised Employee Expenses as claimed by the Petitioner (Rs. Crore) .............................. 94

Table 3.18: Approved Employee Expenses for FY 2016-17 (Rs. Crore)................................................. 95

ix

Table 3.19: Approved R&M Expenses for FY 2016-17 (Rs. Crore) ........................................................ 95

Table 3.20: Additional A&G Expenses as claimed by the Petitioner (Rs. Crore) ................................. 96

Table 3.21: Operational Cost towards maintenance of Data Centre as submitted by the Petitioner

(Rs. Crore) .......................................................................................................................................... 97

Table 3.22: Additional Cost of A&G Expenses as submitted by the Petitioner (Rs.) ........................... 97

Table 3.23: Approved A&G expenses for FY 2016-17 (Rs. Crore) ......................................................... 98

Table 3.24: Approved O&M Expenses for FY 2016-17 (Rs. Crore) ........................................................ 99

Table 3.25: Assets base approved by the Commission (Rs. Crore) ..................................................... 100

Table 3.26: Assets base approved by the Commission for FY 2016-17 (Rs. Crore) ............................ 100

Table 3.27: Means of Finance for FY 2016-17 as submitted by the Petitioner (Rs. Crore) ................. 101

Table 3.28: Means of Finance as approved by the Commission for FY 2016-17 (Rs. Crore) ............. 101

Table 3.29: Guarantee Fee claimed by the Petitioner in FY 2016-17 (Rs. Crore) ................................ 103

Table 3.30: Basis of computing provisions on account of Guarantee Fee (Rs. Crore) ....................... 104

Table 3.31: Interest and Finance Charges for FY 2016-17 (Rs. Crore) ................................................ 105

Table 3.32: Depreciation approved for FY 2016-17 (Rs. Crore) ........................................................... 106

Table 3.33: Provision for Bad and Doubtful Debts and Actual Write off (Rs. Crore) ........................ 107

Table 3.34: Interest on Working Capital for FY 2016-17 (Rs. Crore) ................................................... 109

Table 3.35: Return on Equity approved by the Commission for FY 2016-17 (Rs. Crore) .................. 110

Table 3.36: Non-tariff Income approved by the Commission for FY 2016-17 (Rs. Crore) ................. 112

Table 3.37: Revenue for FY 2016-17 Corresponding to Assessed Sales .............................................. 114

Table 3.38: Revenue from Sale of Power for FY 2016-17 (Rs. Crore) .................................................. 115

Table 3.39: Additional Revenue from Sale due to inefficiency for FY 2016-17 (Rs. Crore) ............... 115

Table 3.40: Sharing of Gains and Losses for FY 2016-17 claimed by the Petitioner (Rs. Crore)........ 116

Table 3.41: Sharing of Gains on Account of Controllable Factors approved by the Commission for

FY 2016-17 (Rs. Crore) .................................................................................................................... 118

Table 3.42: O&M Expenses as Trued up by the Commission for FY 2016-17 (Rs. Crore) ................. 118

Table 3.43: Summary of true up for FY 2016-17 approved by the Commission (Rs. Crore) ............. 119

Table 4.1: Actual Energy sales for consumer categories during FY 2011-12 to FY 2016-17 (MU) .... 122

Table 4.2: CAGR calculated for Energy Sales to each consumer category ......................................... 124

Table 4.3: Sales projected by the Petitioner for FY 2018-19 (MU) ....................................................... 126

Table 4.4: Consumer Category wise sales approved by the Commission for FY 2018-19 (MU) ...... 127

x

Table 4.5: Distribution Loss Trajectory approved by the Commission for the second Control Period

from FY 2016-17 to FY 2018-19 ....................................................................................................... 127

Table 4.6: Distribution Loss for FY 2015-16 to FY 2018-19 ................................................................... 128

Table 4.7: High Distribution Loss divisions as on 31.03.2017 .............................................................. 129

Table 4.8: AT&C Loss Target as per UDAY .......................................................................................... 130

Table 4.9: Distribution Losses for FY 2018-19 ....................................................................................... 131

Table 4.10: Energy Input requirement approved by the Commission for FY 2018-19 ...................... 132

Table 4.11: Power Purchase from UJVN Ltd......................................................................................... 137

Table 4.12: Summary of Energy Availability from UJVNL for FY 2018-19 (MU) .............................. 138

Table 4.13: Power Purchase from NHPC Ltd. ...................................................................................... 138

Table 4.14: Energy Availability from NHPC Ltd. for FY 2018-19 (MU) ............................................. 139

Table 4.15: Power Purchase from THDC India Ltd. ............................................................................. 139

Table 4.16: Energy Availability at State periphery from THDC Ltd. for FY 2018-19 (MU) .............. 139

Table 4.17: Power Purchase from NTPC Ltd. ....................................................................................... 140

Table 4.18: Energy Availability from NTPC Ltd. at State periphery for FY 2018-19 (MU) ............... 140

Table 4.19: Power Purchase from SJVN Ltd.......................................................................................... 141

Table 4.20: Energy Availability from SJVN Ltd. at State periphery for FY 2018-19 (MU)................. 141

Table 4.21: Energy Availability from NPCIL at State periphery for FY 2018-19 (MU) ...................... 141

Table 4.22: Energy Availability from existing Renewable Energy Sources for FY 2018-19 (MU) ..... 142

Table 4.23: Energy Availability from Vishnu Prayag HEP at State Periphery (State Royalty Power)

for FY 2017-18 (MU) ........................................................................................................................ 142

Table 4.24: Energy Availability from Sasan UMPP at State periphery for FY 2018-19 (MU) ............ 143

Table 4.25: Energy Availability from State Gas Generating Stations at State periphery for FY 2018-19

(MU) ................................................................................................................................................. 143

Table 4.26: Energy Availability from Greenko Budhil Hydro at State periphery for FY 2018-19 (MU)

.......................................................................................................................................................... 144

Table 4.27: Energy Availability from Upcoming Stations at State periphery for FY 2018-19 (MU) . 144

Table 4.28: Energy Availability from Firm Sources at State periphery for FY 2018-19 (MU) ........... 145

Table 4.29: Additional Purchase for fulfilling RPO as claimed for FY 2018-19 .................................. 146

Table 4.30: Additional Purchase for fulfilling RPO .............................................................................. 146

Table 4.31: Approach of the Commission in estimating the Cost of Power Purchase ....................... 151

xi

Table 4.32: Summary of Free Power Rate for FY 2018-19 .................................................................... 153

Table 4.33: Summary of power purchase cost for FY 2018-19 ............................................................. 154

Table 4.34: Quarterly Power Purchase approved by the Commission for FY 2018-19 ...................... 156

Table 4.35: Energy Charges of Thermal Generating Stations for FY 2018-19 ..................................... 156

Table 4.36: Transmission Charges for FY 2018-19 (Rs. Crore) ............................................................. 158

Table 4.37: Proposed Capital Expenditure and Capitalisation for FY 2017-18 and FY 2018-19 (Rs.

Crore) ............................................................................................................................................... 160

Table 4.38: Actual GFA addition of UPCL (Rs. Crore) ........................................................................ 161

Table 4.39: GFA base approved by the Commission for FY 2018-19 (Rs. Crore) ............................... 162

Table 4.40: Means of Finance approved by the Commission (Rs. Crore) ........................................... 162

Table 4.41: Interest on Loan approved by the Commission for FY 2018-19 (Rs. Crore) .................... 164

Table 4.42: Depreciation approved for FY 2018-19 (Rs. Crore) ........................................................... 166

Table 4.43: Status of recruitment as submitted by the Petitioner for FY 2017-18 and FY 2018-19 .... 169

Table 4.44: Employee Expenses approved by the Commission for FY 2018-19 (Rs. Crore) .............. 172

Table 4.45: R&M Expenses approved by the Commission for FY 2018-19 (Rs. Crore) ..................... 173

Table 4.46: Additional Provisioning for Data Centre (Rs. Crore) ....................................................... 174

Table 4.47: A&G Expenses approved by the Commission for FY 2018-19 (Rs. Crore) ...................... 176

Table 4.48: O&M Expenses as approved by the Commission for FY 2018-19 (Rs. Crore)................. 176

Table 4.49: Capital required to finance the shortfall in collection of current dues approved by the

Commission..................................................................................................................................... 178

Table 4.50: Return on Equity approved by the Commission for FY 2018-19 (Rs. Crore) .................. 180

Table 4.51: Past Year Adjustment approved for FY 2018-19 (Rs. Crore) ............................................ 183

Table 4.52: Revenue Requirement approved by the Commission for FY 2018-19 (Rs. Crore) .......... 184

Table 4.53: Revenue for FY 2018-19 at existing Tariff (Rs. Crore) ....................................................... 185

Table 4.54: Revenue Gap for FY 2018-19 (Rs. Crore)............................................................................ 186

Table 5.1: Effective Tariff & Cross-subsidy for HT Industry having contracted load 1 kVA ........... 204

Table 5.2: Tariff for Domestic Consumers ............................................................................................ 214

Table 5.3: Concessional Tariff for Snowbound Areas .......................................................................... 214

Table 5.4: Tariff for Non-domestic consumers ..................................................................................... 215

Table 5.5: Tariff for Public Lamps ......................................................................................................... 216

Table 5.6: Tariff for Government Irrigation System ............................................................................. 216

xii

Table 5.7: Tariff for Public Water Works ............................................................................................... 216

Table 5.8: Tariff for Private tube Wells/ Pump Sets............................................................................. 217

Table 5.9: Tariff for LT Industries .......................................................................................................... 218

Table 5.10: Existing and Proposed Tariff for HT Industries ................................................................ 218

Table 5.11: Approved Tariff for HT Industry ....................................................................................... 219

Table 5.12: Tariff for Mixed Load .......................................................................................................... 219

Table 5.13: Tariff for Railway Traction .................................................................................................. 219

Table 5.14: Summary of Category Wise Projected Revenue ................................................................ 220

Table 5.15: Cross Subsidy at Average Cost of Supply ......................................................................... 221

Table 5.16: Cross Subsidy at Approved Tariffs in FY 2017-18 and FY 2018-19 .................................. 221

Table 5.17: Wheeling Charges approved for FY 2018-19 ..................................................................... 223

Table 6.1: Detail of Substations (S/s) maintained by UPCL as on 31.12.2017 .................................... 226

Table 6.2: Detail of Lines maintained by UPCL as on 31.12.2017 ........................................................ 227

Table 6.3: Increase in Assets of UPCL in last one year (31.12.16 to 31.12.2017) ................................. 227

Table 6.4: Quantum of Power Traded through Open Access .............................................................. 231

Table 6.5: Revised Formats prescribed by the Commission vide letter dated 27.11.2014 ................. 233

Table 6.6: Status of Provisional Billing viz. NA/NR/IDF/ADF/RDF ............................................... 236

Table 6.7: Status of Defective Meters .................................................................................................... 238

Table 6.8: Status of Unmetered Consumers .......................................................................................... 239

Table 6.9: Status of Mechanical Meters ................................................................................................. 240

Table 6.10: Status of Ghost/Fictitious Consumers ............................................................................... 241

Table 6.11: Status of NB & SB Cases ...................................................................................................... 242

Table 6.12: Status of Outstanding Arrears ........................................................................................... 243

Table 6.13: Comparison of Outstanding Arrears (Rs. Crore) .............................................................. 244

Table 6.14: Status of KCC Consumers ................................................................................................... 245

Table 6.15: Status of Revenue Realisation per unit sold ..................................................................... 247

Table 6.16: Status of AT&C Losses of UPCL ........................................................................................ 251

Table 7.1: Findings of UPCL’s Consultant on Sales Audit for FY 2015-16 ........................................ 273

Table 7.2: Power Purchase for 1st Quarter of FY 2017-18 as submitted by the Petitioner ................. 277

Table 7.3: Recruitment Status as submitted by the Petitioner ............................................................. 281

Table 7.4: Posts Under-Process as submitted by the Petitioner ........................................................... 282

xiii

Table 7.5: Posts Under-Process as submitted by the Petitioner........................................................... 283

Table 7.6: Details of SAIFI, SAIDI & MAIFI for the month of August, 2017 ...................................... 285

Table 7.7: Division-wise Progress of Metering at 33 kV ...................................................................... 286

Table 7.8: Status of Distribution of Energy Efficient Equipments....................................................... 288

Table 7.9: Details of Banking Arrangement done in FY 2017-18 ......................................................... 291

Table 7.10: Details of Advance Banking................................................................................................ 292

Table 7.11: Status of Creation of facilities at the collection centers ..................................................... 301

Table 7.12: Division wise Progress of Energy Auditing ...................................................................... 302

Table 7.13: Accounting Heads for booking Revenue received under Open Access ......................... 307

Table 7.14: Details of payment collected through the Bill Collection Agencies ................................. 309

Table 7.15: Status of Distribution of Energy Efficient Equipments..................................................... 312

Table 7.16: Status of Prepaid Meter installed on monthly basis ......................................................... 316

Uttarakhand Electricity Regulatory Commission 1

Before

UTTARAKHAND ELECTRICITY REGULATORY COMMISSION

Petition No. 49 of 2017

In the Matter of: Petition filed by Uttarakhand Power Corporation Limited for True up for FY 2016-17, Annual

Performance Review for FY 2017-18 and Aggregate Revenue Requirement of FY 2018-19.

AND

In the Matter of:

Uttarakhand Power Corporation Limited

Urja Bhawan, Kanwali 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 the 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 True-up for FY 2016-17, APR for FY 2017-18 & ARR for FY 2018-19

2 Uttarakhand Electricity Regulatory Commission

Order on approval of Business Plan and Multi Year Tariff dated April 5, 2016 for the Control Period

FY 2016-17 to FY 2018-19. In accordance with the provisions of the UERC Tariff Regulations, 2015,

the 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, UPCL filed a

Petition (Petition No. 49 of 2017 and hereinafter referred to as the “Petition”), giving details of its

revised projections of Aggregate Revenue Requirement (ARR) for FY 2018-19, based on the true up

for FY 2016-17 and Annual Performance Review for FY 2017-18 on November 29, 2017.

The Petition filed by UPCL had certain infirmities/deficiencies. The Commission,

accordingly, vide its letter no. UERC/6/TF-429/17-18/2017/1422 dated December 7, 2017 directed

UPCL to rectify these infirmities/deficiencies and to submit certain additional information

necessary for admission of the MYT Petition. UPCL vide its letter no. 5033/UPCL/RM/B-19 dated

December 15, 2017 submitted most of the information sought by the Commission. Based on the

submission dated December 15, 2017 by UPCL, the Commission vide its Order dated December 21,

2017 provisionally admitted the APR Petition, with the condition that UPCL shall furnish any

further information/clarifications as deemed necessary by the Commission during the processing of

the Petition within the time frame, as may be stipulated by the Commission, failing which the

Commission may proceed to dispose of the matter as deemed fit by it based on the information

available with it.

This Order, accordingly, relates to APR Petition filed by UPCL for true up of FY 2016-17,

APR of FY 2017-18 and ARR of FY 2018-19 and is based on the original as well as all the subsequent

submissions made by UPCL during the course of the proceedings.

Tariff determination being 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 the past

practices, the Commission has tried to detail the procedure and principles followed by it in

determining the ARR of the licensee. 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

Annual Revenue Requirement for FY 2018-19

Chapter 5 –

Chapter 6 -

Chapter 7 -

Tariff Rationalisation, Tariff Design and Related Issues

Review of Commercial Performance of UPCL

Commission’s Directives


1. Background and Procedural History

In accordance with the provisions of the Uttar Pradesh Reorganization Act, 2000 (Act 29 of

2000), enacted by the Parliament of India on August 25, 2000, the State of Uttaranchal came into

existence on November 9, 2000. Section 63(4) of the above Reorganization Act allowed the

Government of Uttaranchal (hereinafter referred to as “GoU” or “State Government”) to constitute

a State Power Corporation at any time after the creation of the State. GoU, accordingly, established

the Uttaranchal Power Corporation Limited (UPCL) under the Companies Act, 1956, on February

12, 2001 and entrusted it with the business of transmission and distribution in the State.

Subsequently, from April 1, 2001, all works pertaining to the transmission, distribution and retail

supply of electricity in the area of Uttaranchal were transferred from UPPCL to UPCL, in

accordance with the Memorandum of Understanding dated March 13, 2001, signed between the

Governments of Uttaranchal and Uttar Pradesh. On May 31, 2004, GoU first vested all the interests,

rights and liabilities related to Power Transmission and Load Despatch of “Uttaranchal Power

Corporation Limited” into itself and, thereafter, re-vested them into a new company, i.e. “Power

Transmission Corporation of Uttaranchal Limited”, now renamed as “Power Transmission

Corporation of Uttarakhand Limited” after change of name of the State. Since then Uttarakhand

Power Corporation Ltd. (UPCL) a company wholly owned by the Government of Uttarakhand

became the sole distribution licensee engaged in the business of distribution and retail supply of

power in the State of Uttarakhand.

The Commission vide its Order dated April 05, 2016 issued the Order on approval of

Business Plan for UPCL for the second Control Period FY 2016-17 to FY 2018-19 and Tariff for FY

2016-17. Further, the Commission had issued the Tariff Order for FY 2017-18 vide its Order dated

March 29, 2017.

As mentioned earlier also, in accordance with the provisions of the Electricity Act, 2003 and

Regulation 12 of the UERC Tariff Regulations, 2015, UPCL was required to submit the APR Petition

for determination of its ARR by November 30, 2017. UPCL in compliance to the Regulations

submitted the APR Petition for True up for FY 2016-17, Annual Performance Review for FY 2017-18

and Aggregate Revenue Requirement for FY 2018-19 on November 29, 2017.

The APR Petition was provisionally admitted by the Commission vide its Order dated



December 21, 2017. The Commission, through its above Admittance Order dated December 21,

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 the Distribution

Licensee, also directed UPCL to publish the salient features of its proposals in the leading

newspapers. The salient features of the proposal were published by the Petitioner in the following

newspapers:

Table 1.1: Publication of Notice S.No. Newspaper Name Date Of Publication

1. Amar Ujala 25.12.2017 2. Dainik Jagran 25.12.2017 3. Hindustan 25.12.2017 4. Rashtriya Sahara 25.12.2017 5. Times of India 25.12.2017 6. Hindustan Times 25.12.2017 7. Indian Express 25.12.2017

Through above notice, the stakeholders were requested to submit their

objections/suggestions/comments latest by 31st January, 2018 (copy of the notice is enclosed as

Annexure-3). The Commission received in all 41 objections/suggestions/comments in writing on

the Petition filed by UPCL. The list of stakeholders who have submitted their

objections/suggestions/comments in writing is enclosed as Annexure-4.

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 February 20, 2018 2. Rudrapur February 21, 2018 3. Rudraprayag February 27, 2018 4. Dehradun February 28, 2018

The list of participants who attended the Public Hearing is enclosed at Annexure-5.

The Commission also sent the copies of salient features of tariff petitions to the Members of

the State Advisory Committee and the State Government. The salient features of the APR Petition

submitted by UPCL 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 March 5, 2018, wherein, detailed deliberations were held with the Members of the

Advisory Committee on the various issues linked with the Petition filed by UPCL.

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 and 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 the issues raised by the

stakeholders.

Meanwhile, based on the scrutiny of the Petition submitted by UPCL, the Commission vide

its letter no. UERC/6/TF-429/17-18/2017/1422 dated December 7, 2017, pointed out certain data

gaps in the Petitions and sought following additional information/clarifications from the Petitioner:

• Audited accounts for FY 2016-17 along with Statutory Auditor’s and AG’s Audit Report.

• Submission of duly filled excel formats along with the break-up of actual for H1 (April -September) and estimated for H2 (October – March) of FY 2017-18.

• Details of Bad Debts written off by it.

• Category-wise revenue billed during FY 2016-17

• Actual sales data for FY 2017-18 till September, 2017.

• Status of capital expenditure (both physical and financial) which has been proposed in FY 2017-18 and FY 2018-19.

• Actual number of new employees employed, employees promoted and employees retired in FY 2016-17, FY 2017-18 and FY 2018-19 along with the preparedness for the proposed recruitments.

• Segregated additions of fixed assets into HT and LT works and clearance from the Electrical Inspector for capitalization of various HT/EHT schemes for FY 2016-17.

• Rationale and necessary government approval behind adjustment of Government revenue from free power to reduce cross subsidy.

• Category wise load shedding data for FY 2016-17 and FY 2017-18.

• Existing and proposed category wise cross subsidy.



• Actual interest on Consumer Security Deposit paid to consumers/adjusted in Consumer’s bills in FY 2016-17.

• Basis of considering expected COD for new generating stations.

• Scheme wise additional capitalisation details matching the same with investment approval accorded by the Commission.

• Power Purchase Bills for FY 2016-17 and recent bills for FY 2017-18.

• MTB’s till September 2017.

So as to have better clarity on the data filed by the Petitioner and also to remove

inconsistency in the data, a Technical Validation Session (TVS) was also held with the Petitioner’s

Officers on January 5, 2018, for further deliberations on certain issues related to the Petition filed by

UPCL. Minutes of above Technical Validation Session were sent to the Petitioner vide

Commission’s letter no. UERC/6/TF-429/17-18/2017/1565 dated January 05, 2018, for its response.

The Petitioner submitted the replies to the data gaps and clarifications sought during TVS

vide its letter no. 5033/UPCL/RM/B-19 dated December 15, 2017, letter no. 189/UPCL/RM/B-19

dated 16.01.2018, letter no. 434/UPCL/RM/B-19 dated January 31, 2018. The submissions made by

UPCL in the Petition as well as additional submissions have been discussed by the Commission at

appropriate places in the Tariff Order along with the Commission’s views on the same.


2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views

The Commission has received suggestions and objections on UPCL’s Petition for True-up for

FY 2016-17, Annual Performance Review of FY 2017-18 and Determination of Annual Revenue

Requirement for FY 2018-19. The Commission also obtained responses from UPCL on the comments

received from the stakeholders.

Since, several issues are common and have been raised by more than one Respondent all the

comments have been clubbed issue-wise and summarized below.

2.1 General

2.1.1.1 Stakeholder’s Comments

Shri Pawan Agarwal of Uttarakhand Steel Manufacturers Association submitted that instead

of determining annual tariff, tariffs should be fixed for a period of 3-4 years to increase investment

and reduce expenditure in the State. He further submitted that considering the difficult

geographical conditions in Uttarakhand, there should be special exemptions for industries

operating in the State. Shri Ram Kumar of Mussoorie Hotels Association submitted that the exercise

of determining annual tariff is unjust and the tariff should be revised atleast after 5 years.

Dr. V.K. Garg submitted that the summary of UPCL, UJVN Ltd., PTCUL and SLDC ARR for

FY 2018-19 does not seem consistent with the Capital Expenditure, Cost of Capital, RoE and Rates of

Interest being paid on Debt separately for Capital expenditure and Working Capital on Cost side.

Shri Amit Joshi submitted that prudence check of each and every component of ARR should

be done so that the inefficiencies of UPCL do not pass on to the consumers of the State.

Shri Sudhir Goyal submitted that the Petitioner has been subject to a recurring penalty

imposed on it by the Commission and this shows the inefficiency of the Petitioner. In this regard, he

suggested that the losses incurred because of the inefficiency of UPCL should not be passed on to

the consumers.

2. Summary of Stakeholders’ Objections/Suggestions, Petitioner’s Responses and Commission’s Views


2.1.1.2 Petitioner’s Reply

The Petitioner submitted that the Commission vide its Tariff Order dated 05.04.2016

approved the ARR excluding power purchase cost for the Control Period FY 2016-17 to FY 2018-19.

However, annual tariff determination is necessary in order to estimate the price closer to the actual

cost of supply.

Further, the Petitioner submitted that in annual Tariff Petitions it has provided a detailed

section on revenue from sale of power, actual/proposed capital expenditure, capitalization,

depreciation and RoE in line with the UERC Tariff Regulations, 2015.

Further with regard to penalty imposed on UPCL by the Commission, the Petitioner

submitted that no penalty of UPCL has been passed on to the consumers. However, sharing of gains

& losses computed as per actual performance as compared to targeted performance are being

passed on to the consumers as per provisions of the Regulations.

2.1.1.3 Commission’s Views

As per the provisions of UERC (Terms and Conditions for Determination of Multi Year

Tariff) Regulations, 2015, the tariff for the ensuing year is determined every year based on the true

up of the ARR of the previous year for which latest audited accounts available and the latest power

purchase costs. Further, the tariff is determined on the basis of normative parameters and expenses

are only allowed after carrying out due prudence check.

2.2 Overall Tariff Increase


Shri R.K. Singh of Tata Motors Ltd., Shri Munish Talwar of Asahi India Glass Ltd., Shri

Pawan Agarwal of Uttarakhand Steel Manufacturers Association, Shri Pankaj Singh Bora of

Galwalia Ispat Udyog Pvt. Ltd., Smt. Rashmi Agrawal, Shri Pramod Singh Tomar of PSR

Innovations LLP, Shri Shiv Narayan Baluni and Shri Shakeel A Siddiqui submitted that an increase

proposed by UPCL in categories like Domestic, Public Water Works, LT & HT Industry and Mixed

load along with the hikes proposed by UJVN Ltd. and PTCUL are exorbitant and unjustified.



M/s Hero MotoCorp Ltd. submitted that there has been a hike of 21.2% in power tariff in the

last 2.5 years and the Petitioner in the instant Tariff Petition has proposed a further tariff hike of

13.44%, which should not be allowed.

Shri Jatinder Kumar of Air Liquide India submitted that the tariff increase for the Industry

sector is too steep and shall discourage the industrial sector of the State. He suggested that the

revenue gap of Rs. 420 Crore should not be passed on to the consumers immediately to avoid tariff

shocks.

Shri Naval Duseja of Flex Foods Limited submitted that tariff increase proposed by UPCL

for industrial consumers is exorbitant and unjustified. He further submitted that it is not viable to

run industry due to tough competition with the tariff hike, and, therefore, any tariff hike would put

the industry into further hardships.

Shri Sudhir Goyal submitted that UPCL should check for proper solutions to recover its

losses instead of increasing tariff every year. He also submitted that UPCL should focus on the

issues like distribution losses, electricity theft, unmetered supply of electricity, free power to BPL

category, departmental expenses etc.


The Petitioner submitted that Uttarakhand has the lowest tariff in India and average tariff

hike during last four years has been only 5.48%. It further submitted that UPCL is a commercial

organization and is required to meet its Annual Revenue Requirement out of the revenue realized

from the consumers through electricity tariffs. The revenue deficit for FY 2018-19 has been

estimated at Rs. 820.29 Crore for which a tariff hike of 13.44% is required. Further, the Petitioner

submitted that it has proposed a tariff hike of 15.63% for domestic category, 12.11% for HT category

to meet the revenue gap in FY 2018-19.


The Commission is of the view that the overall tariff increase is a function of projected

Annual Revenue Requirement for the ensuing year (including impact of truing up of expenses and

revenue for previous year) and projected revenue at existing tariffs. The Commission has carried

out the detailed scrutiny of ARR for FY 2018-19 and truing up for FY 2016-17 in accordance with the

provisions of the relevant Regulations as discussed in subsequent Chapters of the Order. Based on



the approved ARR for FY 2018-19 including impact of truing up for FY 2016-17, the Commission has

marginally increased the tariff with respect to tariff for FY 2017-18 approved vide Tariff Order

dated 29.03.2017 to meet the projected revenue gap as discussed in detail in Chapter 5 of the Order.

However, as the consumers are currently paying Additional Energy Charge which is effective till

31st March, 2018, there is no tariff increase if the tariff approved in this Order is compared with the

existing tariff approved by the Commission in its Order dated 29 March, 2017 plus AEC being paid

by the consumers.

2.3 Domestic Tariff


Shri Vijay Singh Verma of Kisan club requested that UPCL should mention the basis of

charging additional electricity surcharge and fixed surcharge on Domestic consumer. He also

submitted that in RTS-I category, the energy charges may be enhanced in proper ratio and the fixed

charges should be kept same.

Shri Joga Singh Mehta submitted that the Petitioner should improve the quality of power

instead of hike in tariff. He also submitted that UPCL should charge different tariff for urban and

rural people.

M/s Shiv Shakti Electricals submitted that the Fixed Charges should only be applicable for

consumers whose premises are locked for certain period of time and not on all the consumers.

Shri Sudhir Goyal submitted that UPCL should remove the components of fixed and fuel

charges from the electricity bills as these components are not applicable to the consumers.


With regard to the levy of Fixed Charges, the Petitioner submitted that Section 45(3) of the

Electricity Act, 2003 mandates for imposition of Fixed Charge in addition to the Energy Charge for

electricity supplied. The Petitioner further submitted that total costs of UPCL may be segregated

into power purchase cost and other costs. The other cost is about 10% to 15% of the total cost is and

fixed in nature. This cost has necessarily to be incurred by UPCL and is not related to the energy

consumed, but is related to the contracted load of the consumers. Thus, this cost needs to be

recovered through Fixed/Demand Charges.



As regards additional energy surcharge, the Petitioner submitted that Additional Energy

Charges (AEC) were imposed in order to meet the additional revenue gap allowed by the

Commission in its Review Order dated 03.08.2017 as pass-through in tariff for FY 2017-18.


The Commission appreciates the views expressed by some of the stakeholders. As discussed

earlier, based on the projected ARR for FY 2018-19 including the impact of truing up for FY 2016-17,

the Commission has marginally increased the tariff with respect to tariff for FY 2017-18 approved

vide Tariff Order dated 29.03.2017 to meet the projected revenue gap as discussed in detail in

Chapter 5 of the Order. However, as the consumers are currently paying Additional Energy Charge

which is effective till 31st March, 2018, there is no tariff increase if the tariff approved in this Order is

compared with the existing tariff approved by the Commission in its Order dated 29 March, 2017

plus AEC being paid by the consumers.

Further, the Commission has deliberated in detail on the issue of levy of Fixed Charges in

Chapter 5 of the Order.

Further, continuing with the approach adopted in the previous years, the Commission has

attempted to reduce the cross-subsidy while designing the tariffs for various categories as

elaborated in Chapter 5 of the Order.

2.4 Non-Domestic Tariff

2.4.1 Tariff Hike


Shri Ram Kumar of Mussoorie Hotels Association submitted that the proposed increase in

RTS-2 category for consumers having contracted demand above 25 kW from Rs. 5.15/kVAh to Rs.

6.15/kVAh is exorbitant and the consumers should not be burdened for inefficiency of UPCL.


The Petitioner in response submitted that UPCL is a commercial organization and is

required to meet its Annual Revenue Requirement out of the revenue realized from the consumers



through electricity tariffs. The revenue deficit for FY 2018-19 has been estimated at Rs. 820.29 Crore

for which tariff hike of 13.44% is required.


As discussed earlier, based on the APR for FY 2017-18, Revised ARR for FY 2018-19

including impact of truing up for FY 2016-17, the Commission has marginally increased the tariff

with respect to tariff for FY 2017-18 approved vide Tariff Order dated 29.03.2017 to meet the

projected revenue gap as discussed in detail in Chapter 5 of the Order. However, as the consumers

are currently paying Additional Energy Charge (AEC) which is effective till 31st March, 2018, there

is no tariff increase if the tariff approved in this Order is compared with the existing tariff approved

by the Commission in its Order dated 29 March, 2017 plus AEC being paid by the consumers.

Further, continuing with the approach adopted in the previous years, the Commission has

attempted to reduce the cross-subsidy while designing the tariffs for various categories as

elaborated in Chapter 5 of the Order.

2.5 Agricultural Tariff


Shri Teeka Singh Saini, Shri Kuldeep Singh and some stakeholders submitted that the tariff

hike proposed by UPCL is very high and it shall affect the livelihood of farmers and other poor

population of the State. They requested the Commission not to allow the hike in tariffs.

Shri Vijay Singh Verma submitted that PTW connections supplied power through L.T.

networks should either be connected through ABC cable or through HVDS (High Voltage Direct

Supply) system. He further submitted that the reading of PTW connection should be taken on

monthly basis and billing should be done quarterly. He also submitted that Late Payment Surcharge

should be charged after 6 months in case of PTW connections. He further requested the Petitioner to

provide the accountability of revenue in case of RDF (Defective Reading) /NA (Not Accessible), NR

(Meter Not Read)/IDF (Defective Meter) for PTW connections.

Shri Katar Singh, President, Kisan club submitted that UPCL claims to have 100% metering

in case of PTW connections, however, timely meter reading, replacement of defective meters and



redressal of grievances is not being done. He further requested the Commission not to increase the

tariff for PTW consumers.

Shri Jagdish Singh of Bhartiya Kisan Sangh and Shri Sukha Singh, Shri Bulkar Singh Fauji

and other stakeholder submitted that the agricultural tariff is already on the higher side and should

not be increased. They further submitted that HT poles/lines passing through their agricultural

fields are tilted and damage their crops and hence, requested the Commission to insulate the HT

lines passing through their fields. They further submitted that no connections below 7.5 HP have

been provided by UPCL.


The Petitioner submitted that all the PTW connections are metered now and field officers

have been directed to ensure timely meter reading of such connections as well as replacement of

defective meters.

The Petitioner further submitted that UPCL is a commercial organization and is required to

meet its Annual Revenue Requirement out of the revenue realized from the consumers through

electricity tariffs, and, accordingly, it has proposed a tariff hike of 16.85% for PTW category in FY

2018-19.

Regarding the issue of no connections below 7.5 HP being released, the Petitioner submitted

that it has provided connections as per requirement.


As discussed earlier, based on APR for FY 2017-18 and Revised ARR for FY 2018-19

including impact of truing up for FY 2016-17, the Commission has marginally increased the tariff

with respect to tariff for FY 2017-18 approved vide Tariff Order dated 29.03.2017 to meet the

projected revenue gap as discussed in detail in Chapter 5 of the Order. However, as the consumers

are currently paying Additional Energy Charge (AEC) which is effective till 31st March, 2018, there

is no tariff increase if the tariff approved in this Order is compared with the existing tariff approved

by the Commission in its Order dated 29 March, 2017 plus AEC being paid by the consumers.

Further, continuing with the approach adopted in previous years, the Commission has

attempted to reduce the cross subsidy while designing the tariffs for various categories as



elaborated in Chapter 5 of this Order. With regard to meter reading the Commission has issued

suitable directions to the Petitioner to reduce provisional billing on the basis of RDF/NA/NR/IDF.

2.6 Agriculture Allied Activities


Shri G. S. Sandhu of Tarai Farm Lands private limited submitted that the farmers involved

in fisheries are not getting the benefits of electricity tariff under RTS-4A so far. Therefore, in the

interest of promoting fishery activities in Uttarakhand, Shri G. S. Sandhu requested the Commission

to include Fishery activity under Agriculture Allied Activities RST-4(A). He further requested the

Commission to incorporate aeration, recirculation and storage under the Fishery activity.

Dr. Harendra Singh Rawat, Chairman, progressive Dairy Farmer Association has submitted

that in Uttarakhand the demand for Milk is higher than that of the current production. The

production can only be increased by reducing the expenses. He further submitted that “Dairy

farming” should be included under Agriculture Allied Activities RTS-4(A) in place of Commercial

Activity.

Dr. R. P. Singh, Tarai foods Limited submitted that Tariff for Mushroom cultivation should

not be increased.


As regards tariff for Fishery activity and dairy farming, the Petitioner submitted that as per

the Tariff Order dated April 11, 2015, Rate Schedule RTS-4 pertains to “Private Tube

Wells/Pumping Sets” and such category currently applies for irrigation purposes and for incidental

agricultural processes confined to chaff cutter, thrasher, cane crusher and rice huller only. Also Rate

Schedule RTS-4A pertains to “Agriculture Allied Activities”and such category currently applies to

supply of power for use in nurseries growing plants/ saplings, polyhouses growing

flowers/vegetables and fruits including Mushroom cultivation which doesn’t involve any kind of

processing of product except for storing and preservation. Therefore, this RTS-4A is not applicable

for fishery activities.

The Petitioner further submitted that in accordance with Section 61(g) of the Electricity Act,

2003, the tariff should progressively reflect the cost of supply of electricity and also reduce cross



subsidies. As per the existing Tariff Order the Fishery activity and dairy farming is covered under

Rate Schedule RTS – 7 (Industry) which is the cross-subsidizing category whereas Rate Schedule

RTS – 4A is cross-subsidized category. In case, fishery activity or dairy farming is covered under

Rate Schedule RTS – 4A, it will be transferred from cross-subsidizing category to cross-subsidized

category which is against the provisions of Electricity Act, 2003.


The Commission with regard to inclusion of fishery and dairy farming in RTS-4A category is

of the view that these activities cannot be included in RTS-4A as RTS-4A is a subsidised category

applicable for supply of power for use in nurseries growing plants/saplings, polyhouses growing

flowers/vegetables and fruits including Mushroom cultivation which doesn’t involve any kind of

processing of product except for storing and preservation. In this regard, the Commission would,

however, like to clarify as follows:

a) As per the current practice, if the domestic consumer has kept any cattles such as cow or

buffalo in its residential premises and the milk given by that animal is utilized for self

consumption, the tariff applicable for RTS-1 Domestic Category shall be applicable.

b) If the small consumers are engaged in dairy farming at their residences and part of the

milk given by animals is being sold, then, for such consumers, as per Rate schedule

(RTS-1), Domestic Tari

Documents

Final Tariff Order of UPCL for FY 2018-19 21.03.2018 With Hindiuerc.gov.in/ordersPetitions/orders/Tariff/Tariff Order... · 2018. 7. 10. · Order on True up for FY 2016-17, Annual