TARIFF ORDER 2016

KARNATAKA ELECTRICITY REGULATORY COMMISSION

TARIFF ORDER 2016

OF

CESC

ANNUAL PERFORMANCE REVIEW FOR FY15

&

ANNUAL REVENUE REQUIREMENT FOR FY17-19

&

REVISION OF RETAIL SUPPLY

TARIFF FOR FY17

30th

March 2016

6th and 7th Floor, Mahalaxmi Chambers

9/2, M.G. Road, Bengaluru-560 001

Phone: 080-25320213 / 25320214

Fax : 080-25320338

Website: www.karnataka.gov.in/kerc - E-mail: [email protected]

http://www.karnataka.gov.in/kerc

ii

C O N T E N T S

CHAPTER

Page No.

1.0 Chamundeshwari Electricity Supply Corporation

Ltd.,

3

1.1 The CESC at a glance 5

1.2 Number of Consumers, Sales in MU to various

categories of consumers and details of Revenue

for FY15

5

2 Summary of Filing and Tariff Determination

Process

7

2.0 Background for current filing 7

2.1 Preliminary Observations of the Commission 7

2.2 Public Hearing Process 8

2.3 Consultation with the Advisory Committee of the

Commission

9

3.0 Public consultation – Suggestions / Objections

and Replies

10

3.1 List of persons who filed written objections 10

4 Annual Performance Review for FY15 12

4.0 CESC’s Application for APR for FY15 12

4.1 CESC’s Submission 12

4.2 CESC’s Financial Performance as per Audited

Accounts for FY15

14

4.2.1 Sales for FY15 15

4.2.2 Distribution Losses for FY15 19

4.2.3 Power Purchase for FY15 20

4.2.4 RPO Compliance by CESC for FY15 23

4.2.5 Operation and Maintenance Expenses 25

4.2.6 Depreciation 28

4.2.7 Capital Expenditure for FY15 30

4.2.8 Prudence check of FY15 32

4.2.9 Interest and Finance Charges 36

4.2.10 Interest on Working Capital 37

4.2.11 Interest on Consumer Deposit 38

4.2.12 Other Interest and Finance Charges 39

4.2.13 Interest o belated payment of power purchase

cost

39

4.2.14 Capitalisation of Interest 39

4.2.15 Other Debits 40

4.2.16 Net Prior Period Charges 41

4.2.17 Return on Equity 41

4.2.18 Income Tax 42

4.2.19 Other Income 42

4.3 Abstract of Approved revised ARR for FY15 43

4.3.1 Gap in Revenue for FY15 44

5.0 Annual Revenue Requirement for FY17-19 –

CESC’s filing

45

iii

5.1 Annual Performance Review for FY15 & FY16 46

5.2 Annual Revenue Requirement for FY17-19 46

5.2.1 Capital Investments for FY17-19 46

5.2.2 Sales forecast for FY17-19 51

5.2.3 Distribution Losses for FY17-19 63

5.2.4 Power Purchase for FY17-19 65

5.2.5 Sources of Power 66

5.2.6 CESC’s Power Purchase Cost and Transmission

Charges

69

5.2.7 RPO Target for FY17 72

5.2.8 O & M Expenses for FY17-19 73

5.2.9 Depreciation 76

5.2.10 Interest on Capital Loan 77

5.2.11 Interest on Working Capital 80

5.2.12 Interest on Consumer Deposit 81

5.2.13 Interest and other Expenses Capitalised 82

5.2.14 Other Debits 83

5.2.15 Net Prior Period Credit / Charges 83

5.2.16 Return on Equity 73

5.2.17 Other Income 85

5.2.18 Fund towards Consumer Relations / Consumer

Education

86

5.3 Treatment of Regulatory Asset 86

5.4 Abstract of ARR for FY17-19 87

5.5 Segregation of ARR into ARR for Distribution

Business and ARR for Retail Supply Business

88

5.6 Gap in Revenue for FY17 90

5.7 Application for Additional Revenue Requirement

for FY17

91

6 Determination of Tariff for FY17 94

6.0 CESC’s Proposal and Commission’s Analysis for

FY17

94

6.1 Tariff Application 94

6.2 Statutory Provisions Guiding Determination of

Tariff

94

6.3 Consideration for Tariff Setting 95

6.4 New Tariff Proposals by CESC 96

6.5 Revenue at Existing Tariff and Deficit for FY16 99

6.6 Other Issues 131

6.6.1 Tariff for Green Power 131

6.6.2 Determination of Wheeling Charges 132

6.6.3 Wheeling within CESC area 132

6.6.4 Wheeling of Energy using Transmission Network

or network of more than one licensee

134

6.6.5 Charges for Wheeling of Energy by RE sources

(non REC route) to consumer in the State

135

6.6.6 Charges for Wheeling Energy by RE sources

wheeling energy from the State to a consumer /

others outside the State and for those opting for

renewable energy

135

iv

6.7 Other Tariff related issues 135

6.8 Cross Subsidy Levels for FY17 140

6.9 Effect of Revised Tariff 140

6.10 Summary of Tariff Order 141

6.11 Commission’s Order 142

Appendix 143

Appendix - I 183

v

LIST OF TABLES

Table

No.

Content Page

No.

4.1 Revised ARR for FY15 – CESC’s Submission 13

4.2 CESC’s Financial Performance as per Audited

Accounts for FY15

14

4.3 CESC’s Accumulated Profits / Losses 15

4.4 Approved Sales as per APR for FY15 18

4.5 Incentives for loss reduction in FY15 20

4.6 CESC’s Power Purchase for FY15 21

4.7 RPO Compliance as submitted by CESC for FY15 23

4.8 Normative O & M Expenses – CESC’s Submission 25

4.9 Approved O & M Expenses as per Tariff Order dated

12.05.2014

25

4.10 O & M Expenses of CESC as per Annual Audited

Accounts for FY15

26

4.11 Allowable O & M Expenses for FY15 28

4.12 Depreciation for FY15 – CESC’s Submission 29

4.13 Actual Capital Expenditure incurred by CESC for FY15 30

4.14 Approved Vs Actual Capital Investment 32

4.15 Gist of Prudence Check findings for FY15 33

4.16 Allowable Interest on Loans – FY15 36

4.17 Allowable Interest on Working Capital for FY15 38

4.18 Allowable Interest and Finance Charges 39

4.19 Other Debits CESC’s Submission 40

4.20 Allowable other Debits 40

4.21 Net Prior Period Charges – CESC’s Submission 41

4.22 Allowable Return on Equity 42

4.23 Approved Revised ARR for as per APR 43

5.1 Proposed ARR for FY17-19 45

5.2 Proposed Capital Investment by CESC for FY17 to

FY19

48

5.3 Category wise approved number of installations 62

5.4 Category wise approved energy sales 62

5.5 Projected Distribution Losses FY17-19 – CESC’s

Submission

63

5.6 Approved & Actual Distribution Losses – FY11 to FY16 64

5.7 Approved Distribution Losses for FY17-19 65

5.8 Consolidated requirement of electricity as filed by

ESCOMs

65

5.9 Source wise Power Purchase of ESCOMs for the

Control Period FY17 to FY19

68

5.10 Power Purchase Cost of CESC for FY17 70



5.13 O & M Expenses – CESC’s Proposal 74

vi

5.14 Computation of Inflation Index for FY17 74

5.15 Approved O & M Expenses for FY17-19 75

5.16 Depreciation – FY17-19 – CESC’s proposal 76

5.17 Approved Depreciation for FY17-19 77

5.18 Interest on Capital Loans – CESC’s Proposal 78

5.19 Approved Interest on Capital Loans for FY17-19 79

5.20 Interest on Working Capital – CESC’s Submission 80

5.21 Approved Interest on Working Capital for FY17-19 81

5.22 Interest on Consumer Security Deposits for FY17-19 –

CESC’s Proposal

81

5.23 Approved Interest on Consumer Security Deposits for

FY17-19

82

5.24 Approved Interest and Finance Charges for FY17-19 82

5.25 Status of Debt Equity Ratio for FY17-19 84

5.26 Return on Equity for FY17-19 85

5.27 Other Income – CESC’s Proposal 85

5.28 Approved Other Income for FY17-19 86

5.29 Approved ARR for FY17-19 88

5.30 Approved Segregation of ARR – FY17-19 – CESC’s

Proposal

89

5.31 Approved Segregation of ARR FY17-19 89

5.32 Approved Revised ARR for Distribution Business – FY17-

19

90

5.33 Approved ARR for Retail Supply Business FY17-19 90

5.34 Revenue Gap for FY17 91

6.1 Revenue Deficit for FY17 99

6.2 Wheeling Charges 133

vii

LIST OF ANNEXURES

SL.NO. DETAILS OF ANNEXURES Page

No.

I Total Approved Power Purchase Quantum and Cost

of all ESCOMs for FY17

210

II Approved Power Purchase quantum and cost of

CESC for FY17

216

III Proposed and approved Revenue for FY17 222

IV Electricity Tariff – 2017 223

viii

ABBREVIATIONS

AAD Advance Against Depreciation

AEH All Electric Home

ABT Availability Based Tariff

A & G Administrative & General Expenses

ARR Annual Revenue Requirement

ATE Appellate Tribunal for Electricity

BBMP Bruhut Bangalore Mahanagara Palike

BDA Bangalore Development Authority

BESCOM Bangalore Electricity Supply Company

BMP Bangalore Mahanagara Palike

BST Bulk Supply Tariff

BWSSB Bangalore Water Supply & Sewerage Board

CAPEX Capital Expenditure

CCS Consumer Care Society

CERC Central Electricity Regulatory Commission

CEA Central Electricity Authority

CESC Chamundeshwari Electricity Supply Corporation

CPI Consumer Price Index

CWIP Capital Work in Progress

DA Dearness Allowance

DCB Demand Collection & Balance

DPR Detailed Project Report

EA Electricity Act

EC Energy Charges

ERC Expected Revenue From Charges

ESAAR Electricity Supply Annual Accounting Rules

ESCOMs Electricity Supply Companies

FA Financial Adviser

FKCCI Federation of Karnataka Chamber of Commerce & Industry

FR Feasibility Report

FoR Forum of Regulators

FY Financial Year

GESCOM Gulbarga Electricity Supply Company

GFA Gross Fixed Assets

GoI Government Of India

GoK Government Of Karnataka

GRIDCO Grid Corporation

HESCOM Hubli Electricity Supply Company

HP Horse Power

HRIS Human Resource Information System

ICAI Institute of Chartered Accountants of India

IFC Interest and Finance Charges

IW Industrial Worker

ix

IP SETS Irrigation Pump Sets

KASSIA Karnataka Small Scale Industries Association

KEB Karnataka Electricity Board

KER Act Karnataka Electricity Reform Act

KERC Karnataka Electricity Regulatory Commission

KM/Km Kilometre

KPCL Karnataka Power Corporation Limited

KPTCL Karnataka Power Transmission Corporation Limited

KV Kilo Volts

KVA Kilo Volt Ampere

KW Kilo Watt

KWH Kilo Watt Hour

LDC Load Despatch Centre

MAT Minimum Alternate Tax

MD Managing Director

MESCOM Mangalore Electricity Supply Company

MFA Miscellaneous First Appeal

MIS Management Information System

MoP Ministry of Power

MU Million Units

MVA Mega Volt Ampere

MW Mega Watt

MYT Multi Year Tariff

NFA Net Fixed Assets

NLC Neyveli Lignite Corporation

NCP Non Coincident Peak

NTP National Tariff Policy

O&M Operation & Maintenance

P & L Profit & Loss Account

PLR Prime Lending Rate

PPA Power Purchase Agreement

PRDC Power Research & Development Consultants

REL Reliance Energy Limited

R & M Repairs and Maintenance

ROE Return on Equity

ROR Rate of Return

ROW Right of Way

RPO Renewable Purchase Obligation

SBI State Bank of India

SCADA Supervisory Control and Data Acquisition System

SERCs State Electricity Regulatory Commissions

SLDC State Load Despatch Centre

SRLDC Southern Regional Load Dispatch Centre

STU State Transmission Utility

TAC Technical Advisory Committee

TCC Total Contracted Capacity

x

T&D Transmission & Distribution

TCs Transformer Centres

TR Transmission Rate

VVNL Visvesvaraya Vidyuth Nigama Limited

WPI Wholesale Price Index

WC Working Capital

xi

KARNATAKA ELECTRICITY REGULATORY COMMISSION,

BANGALORE - 560 001

Dated this 30th day of March, 2016

Order on CESC’s Annual Performance Review for FY15 & Annual Revenue

Requirement for FY17-19 & Revision of

Retail Supply Tariff for FY17

In the matter of:

Application of CESC in respect of the Annual Performance Review for FY15,

Annual Revenue Requirement for FY17-19 and Revision of Retail Supply Tariff

for FY17, under Multi Year Tariff framework.

Present: Shri M.K.Shankaralinge Gowda Chairman

Shri H.D.Arun Kumar Member

Shri D.B.Manival Raju Member

O R D E R

The Chamundeshwari Electricity Supply Corporation Ltd.,

(hereinafter referred to as CESC) is a Distribution Licensee under

the provisions of the Electricity Act, 2003, and has, on 30.11.2015

& 15.12.2015, filed the following applications for consideration

and orders:

a) Review of Annual Performance for FY15 and approval of

revised ARR thereon.

b) Approval of ARR for FY17-19

xii

c) Approval for revision of Retail Supply Tariff, for the financial

year 2016-17 (FY17)

In exercise of the powers conferred under Sections 62, 64 and other

provisions of the Electricity Act, 2003, read with KERC (Terms and

conditions for Determination of Tariff for Distribution and Retail Sale of

Electricity) Regulations 2006, and other enabling Regulations, the

Commission has considered the applications and the views and

objections submitted by the consumers and other stakeholders. The

Commission’s decisions are given in this order, Chapter wise.

xiii

CHAPTER – 1

INTRODUCTION

1.0 Chamundeshwari Electricity Supply Corporation Ltd.:

The Chamundeshwari Electricity Supply Corporation Ltd., (CESC) is a

Distribution Licensee under Section 14 of the Electricity Act, 2003

(hereinafter referred to as the Act). The CESC is responsible for

purchase of power, distribution and retail supply of electricity to its

consumers and also providing infrastructure for open access, Wheeling

and Banking in its area of operation which includes five Districts of the

State as indicated below:

1. Mysuru

2. Hassan

3. Mandya

4. Chamarajnagara

5. Kodagu

The CESC is a registered company under the Companies Act, 1956,

incorporated on 19th August, 2004. The CESC commenced its

operations on 1st April, 2005, with four districts in its area of operation.

Further, the Madikeri Division (Kodagu District) which was earlier under

the MESCOM, was transferred to the CESC with effect from 1st April,

2006.

At present the CESC’s area of operations is structured as follows:

CESC, Mysore

HASSAN

MANDYA

KODAGU MYSORE

CH NAGAR

xiv

O&M Zones O&M Circles O&M Divisions

Mysore zone

Mysore Works Circle

VV Mohalla

NR Mohalla

Nanjangud

Hunsur

Mysore O&M Circle

Chamarajnagar

Kolegala

Madikeri

Hassan Circle

Hassan

CR patna

Arasikere

HN Pura

Mandya Circle

Mandya

Pandavapura

Nagamangala

Maddur

These O & M divisions of the CESC are further divided into sixty one

O&M sub-divisions with accounting / non accounting sections.

The section offices are the base level offices looking into operation

and maintenance of the distribution system in order to provide reliable

and quality power supply to the CESC’s consumers.

xv

1.1 The CESC at a glance:

The profile of the CESC is as indicated below:

1.2

Number of Consumers, Sales in MU to various

categories of consumers and details of Revenue for FY15

are as follows:

CATEGORY

CESC

No. of

Installation

Sales in

MU

Revenue in

Rs.Crs.

Domestic 2121040 937.94 391.04

Commercial 197847 354.35 287.57

Industrial 35276 883.01 568.45

Agriculture 305791 2355.47 940.02

Others 75848 709.3 442.16

Total 2735802 5240.07 2629.24

The CESC has filed its application for Annual Performance Review for FY15,

Annual Revenue Requirement (ARR) for FY17-19 and revision of Retail Supply

Tariff for FY17.

The CESC’s application, the objections / views of stakeholders thereon and the

Commission’s decisions on the Annual Performance Review for FY15, ARR for

Sl.

No. Particulars (As on 31.03.2015) Statistics

1. Area Sq. km. 27772.82

2. Districts Nos. 5

3. Taluks Nos. 29

4. Population lakhs 81.55

5. Consumers Lakhs 27.36

6. Energy Sales MU 5240.07

7. Zone Nos. 1

8. DTCs Nos. 84086

9. Assets (including current assets) Rs. in Crores 4806.40

10. HT lines Ckt. kms 42658

11. LT lines Ckt. kms 75117

12. Total employees strength:

A Sanctioned Nos. 10411

B Working Nos. 5048

13. Revenue Demand in FY15 Rs. in Crores 2629.24

14. Revenue Collection in FY15 Rs. in Crores 2483.34

xvi

FY17-19 and Revision of Retail Supply Tariff for FY17 are discussed in detail in

the subsequent Chapters of this Order.

xvii

CHAPTER – 2

SUMMARY OF FILING & TARIFF DETERMINATION PROCESS

2.0 Background for Current Filing:

The Commission in its Tariff Order dated 6th May, 2013 had approved

the ERC for FY14 to FY16 and the Retail Supply Tariff of CESC for FY14

under MYT principles for the control period of FY14 to FY16. CESC in its

present application filed on 15th December, 2015 has sought for

Annual Performance Review (APR) for FY15 based on the audited

accounts, ARR for the fourth control period i.e. FY17-19 and revision of

Retail Supply Tariff for FY17.

2.1 Preliminary Observations of the Commission

After a preliminary scrutiny of applications the Commission had

communicated its observations to CESC on 1st January, 2016 which

were mainly on the following points:

Capital Expenditure

Sales Forecast

Assessment of IP set consumption

Power Purchase

Issues pertaining to items of revenue and expenditure

Other new proposals

Compliance to Directives

The CESC has furnished its replies on 11th January, 2016. The replies

furnished by CESC are considered in the respective Chapters of this Order.

Further, the Commission also held a validation meeting to discuss the

proposals of CESC on 10th February, 2016.

xviii

2.2 Public Hearing Process:

As per the Karnataka Electricity Regulatory Commission (Terms and

Conditions for Determination of Tariff for Distribution and Retail Sale of

Electricity) Regulations, 2006, read with the KERC Tariff Regulations,

2000, and KERC (General and Conduct of Proceedings) Regulations,

2000, the Commission vide its letter dated 14th January, 2016 treated

the application of CESC as petition and directed CESC to publish the

summary of ARR and Tariff proposals in the newspapers calling for

objections, if any, from interested persons.

Accordingly, CESC has published the same in the following newspapers:

Name of the News Paper Language Date of Publication

Deccan Herald English 18/1/2016

&

19/1/2016

The Hindu

Udayavani Kannada

Kannada Prabha

The CESC’s applications on APR of FY15, ARR for FY17-19 and revision of

retail supply tariff for FY17 were also hosted on the web sites of CESC and

the Commission for the ready reference and information of the general public.

In response to the application of CESC, the Commission has received thirty

seven statements / letters of objections. CESC has furnished its replies to all

these objections. The Commission has held a Public Hearing on 27th

February, 2016 at Mysore. The details of the written / oral submissions made

by various stake holders and the response from CESC thereon have been

discussed in Chapter - 3 / Appendix to this Order.

2.3 Consultation with the Advisory Committee of the Commission:

The Commission has also discussed the proposals of KPTCL and all

ESCOMs in the State Advisory Committee meeting held on 10th March, 2016.

During the meeting the following important issues were also discussed:

xix

Performance of KPTCL / ESCOMs during FY15

Major items of expenditure of KPTCL / ESCOMs for FY17-19

Members of the Committee have offered valuable suggestions on the

proposals. The Commission has taken note of these suggestions while

passing the order.

xx

CHAPTER – 3

PUBLIC CONSULTATION

SUGGESTIONS / OBJECTIONS & REPLIES

3.1 In pursuance of section 64 of the Electricity Act, 2003, the Commission

undertook the process of public consultation, to obtain

suggestions/views/objections from the interested stake-holders, on the

application filed by CESC, for Annual Performance Review for FY15,

approval of ERC, and ARR for FY17, FY18 and FY19 and approval of

revised retail supply tariff for FY17, under the MYT Principle. In the

written submissions as well as during the public hearing, the Stake-

holders and the public have raised several objections/ made

suggestions, on the Tariff Application. The names of the persons who

have filed written objections and made oral submissions are given

below:

List of persons who filed written objections:-

Sl.

No

Application

No. Name & Address of Objectors

1 CB-01 Sri Yagnanarayana M.N, General Secretary, Laghu Udyog

Bharati – Karnataka, Bengaluru.

2 CB-02 Sri Chetan Jain, AM- Business Development, Indian Energy

Exchange Limited, New Delhi.

3 CA-01 Sri N. Ravidranath & others, Madhuvanahalli, Kollegala.

4 CA-02 Sri R. Ramanna, Financial Advisor & Chief Accounts Officer,

BWSSB, Bengaluru.

5 CA-03 Sri K.B. Arasappa, Hon. Gen. Secretary, KASSIA, Bengaluru.

6 CA-04 Sri Anil Savur D, Secretary, The Karnataka Planters Association,

Chikmagaluru

7 CA-05 Sri M.M. Suryanarayana, General Secretary, Akhila Bharatiya

Grahak Panchayat ( R). Mysuru.

8

CA-06

Sri K. Ravindra Prabhu, Vice President, KIADB Industrial Area

Manufactures Association, Mysuru.

9 CA-07 Sri P.B. Chengappa, Chairman, Kodagu Planters Association,

Kodagu.

10 CA-08 Sri C.A. Subbaiah, Vice President, Kodagu District Small Growers

Association, Kodagu.

11 CA-09 Sri Lokaraj, Secretary, Federation of Karnataka Chambers of

Commerce and Industry Bengaluru.

12 CA-10 Sri K. Ravindra Prabhu, Chairman, Energy Subcommittee,

Hebbal Industrial Estate Manufacturers Association, Mysuru.

13 CA-11 to

CA-35

Sri S.B. Kempegowda & others, Mandya, Maddur,

Nagamangala, Pandavapura, T. Narasipura and Mysuru.

14 AE-01 Sri P.N. Karanth, Kundapura.

15 AE-02 Sri Praveen Sood, IPS, Additional Director General of Police,

Administration, Bengaluru

xxi

3.2 List of the persons, who made oral submissions during the Public

Hearing, held on 27.02.2016.

SL.No. Names & Addresses of Objectors

1 Sri K. Ravindra Prabhu, Vice President, KIADB Industrial Area Manufacturers

Association & Hebbal Industrial Estate Manufacturers Association.

2 Sri Suresh Kumar Jain, Mysuru Industries Association

3 Sri Mallappa Gowda & Manjunath, KASSIA.

4 Sri Savitha Ranganath, The Call, Secretary General, CVO.

5 Sri Rajesh Kadi, Anti-Corruption Committee, Mysuru.

6 Sri N. Nataraj, Chamarajanagar Kissan Sangha.

7 Sri Y.M. Raju, Hassan District Kissan Sangha.

8 Sri Anil Savur, Secretary, Karnataka Planters Association.

9 Sri Mohd. Arif Khan, Advocte, BWSSB.

10 Sri Vasanth. S. Karnataka State Electrical Contractors Association.

11 Sri Anselm Nazareth, Consumer, Mysuru.

12 Sri Rajendra, Bharatiya Kissan Sangha, Chamarajanagar.

13 Sri K.V. Siddappa, Hanuru Kissan Sangha.

14 Sri Chethan Jain, IEx.

15 Sri Capt. M.A. Hussain, Mysuru.

16 Sri Biddappa M.C, Orange County.

3.3 The gist of the objections, replies by CESC and the Commission’s views

in Appendix-1 of this order.

xxii

CHAPTER – 4

ANNUAL PERFORMANCE REVIEW FOR FY15

4.0 CESC’s Application for APR for FY15:

The CESC, in its application dated 30th November, 2015, has sought for

review of its Annual Performance (APR) for FY15 and approval of a

revised ARR thereon, based on the Audited Accounts.

The Commission in its letter dated 1st January, 2016 had communicated

its preliminary observations on the application of CESC. The CESC, in its

letter dated 11th January, 2016 has furnished its replies to the

preliminary observations of the Commission.

The Commission in its Multi Year Tariff (MYT) Order dated 6th May, 2013

had approved the CESC’s Annual Revenue Requirement (ARR) for

FY14 – FY16. Further, in its Tariff Order dated 12th May, 2014, the

Commission had approved the APR for FY13 and had revised the ARR

for FY15 along with Retail Supply Tariff for FY15.

The Annual Performance Review for FY15 based on the CESC’s Audited

Accounts is discussed in this Chapter.

4.1 CESC’s Submission:

The CESC has submitted its proposals for revision of ARR for FY15 based

on the Audited Accounts as follows:

xxiii

TABLE – 4.1

Revised ARR for FY15 – CESC’s Submission Amount in Rs. Crores

Sl.

No Particulars As Filed

1 Energy @ Gen Bus in MU 6299.35

2 Energy @ Interface in MU 6084.89

3 Distribution Losses in % 13.88

Sales in MU

4 Sales to other than IP & BJ/KJ installations 2911.20

5 Sales to IP & BJ/KJ installations 2328.87

Total Sales 5240.07

Revenue in Rs Crs

6 Revenue from tariff and Misc. Charges 1671.36

7 RE Subsidy 957.87

Total Revenue 2629.23

Expenditure in Rs Crs

8 Power Purchase Cost 1894.39

9 Transmission charges of KPTCL 265.50

10 SLDC Charges 3.42

Power Purchase Cost including cost of

transmission 2163.31

11 Employee Cost 294.33

12 Repairs & Maintenance 37.56

13 Admin & General Expenses 39.55

Total O&M Expenses 371.44

14 Depreciation 46.08

Interest & Finance charges

15 Interest on Loans 78.85

16 Interest on Working capital 1.41

17 Interest on belated payment of power purchase 1.54

18 Interest on consumer deposits 37.09

19 Other Interest & Finance charges 2.44

20 Less interest & other expenses capitalised 27.71

Total Interest & Finance charges 93.62

21 Other Debits 4.94

22 Net Prior Period Debit/Credit (72.44)

23 Return on Equity 0.00

24 Tax 15.78

25 Other Income 33.77

Net ARR 2588.96

Considering a revenue of Rs.2629.23 Crores against a net ARR of

Rs.2588.96 Crores, the CESC has reported surplus in revenue of Rs.40.27

Crores for FY15.

xxiv

4.2 CESC’s Financial Performance as per Audited Accounts for FY15:

An overview of the financial performance of the CESC for FY15 as per

their Audited Accounts is given below:

TABLE – 4.2

Financial Performance of CESC for FY15

Amount in Rs. Crores

Sl.

No. Particulars FY15

Receipts

1 Revenue from Tariff and misc. charges 1671.36

2 Tariff Subsidy 957.87


Expenditure



5 SLDC Charges 3.42

Power Purchase Cost including cost of transmission 2163.31

6 O&M Expenses 371.45






11 Interest on belated payment of power purchase

cost 1.54


13 Less interest and other expenses capitalized 27.71



15 Net Prior Period Debit/Credit (72.44)

16 Other income 32.77

17 Income tax 15.77

Net ARR 2588.96

As per the Audited Accounts, the CESC has earned a profit of Rs.40.27

Crores for FY15. The profits / losses reported by the CESC in its audited

accounts in the previous years are as follows:

xxv

TABLE – 4.3

CESC’s Accumulated Profits / Losses

Particulars

Amount in

Rs. Crs

Accumulated losses as at the end of FY10 (285.15)

Profit earned in FY11 11.38

Loss incurred in FY12 (123.45)



Profits earned in FY15 40.27

Accumulated losses as at the end of FY15 (642.19)

As seen from the above table, the accumulated losses are Rs.642.19

Crores.

Commission’s analysis and decisions:

The Annual Performance Review for FY15 has been taken up duly

considering the actual expenditure as per the Audited Accounts

against the expenditure approved by the Commission in its Tariff Order

dated 12th May, 2014. The item wise review of expenditure and the

decisions of the Commission thereon are as discussed in the following

paragraphs:

4.2.1 Sales for FY15:

a) Sales-Other than IP sets

The Commission in its Tariff order dated 12.05.2014 had approved for

FY15 total sales to various consumer categories at 5448.45 MU as

against the CESC proposal of 5596.11 MU. The Actual sales of CESC as

per the current APR filing [FORMAT D-2] is 5240.09 MU, indicating a short

xxvi

fall in sales to an extent of 208.36 MU vis-à-vis the approved sales. The

shortfall in sales is 104.21 MU in LT-categories and104.15 MU in HT-

categories.

The Commission notes that, as against approved sales of 2997.80 MUs

to categories other than BJ/KJ and IP sets, the actual sales achieved

by CESC is 2911.22 MU, resulting in shortfall of sales to these categories

by 86.58 MU. Further, the CESC has sold 2328.87 MU to BJ/KJ and IP

categories against approved sales of 2450.65 MU resulting in lower

sales to these categories by 121.78 MU.

The actual share of sales to categories other than BJ/KJ and IP sets is

55.56% as against the estimated share of 55.02% resulting in marginal

increase in share of sales to these categories, while the actual share of

sales to BJ/KJ and IP sets has taken short by the same percentage

point. The Commission notes that the major categories contributing to

the lower sales are HT Industries (134.79 MU), HT Commercial (27.23 MU)

and IP sets (121.46 MU).

b) Sales to IP sets

In its Tariff Order dated 6th May, 2013, the Commission had approved

specific consumption of IP sets at 8,195 units/installation/annum for the

entire control period of FY14 to FY16, whereas, as per the IP set

consumption reported by the CESC in its filing, the specific

consumption works out to 7,843 units /installation/annum for the FY15,

which indicates a decrease in the specific consumption of 352

units/installation/annum. The total IP set consumption reported by the

CESC for the FY15 is 2,294.33 MU as against 2,415.79 MU sales quantum

approved by the Commission. Thus, the specific consumption has

decreased by 352 units /installation/annum with the corresponding

decrease in sales by 121.46 MU when compared to those approved by

the Commission for the FY15.

xxvii

Further, the Commission had approved 3,16,336 as number of

installations likely to be serviced in the FY 15; whereas the actual

number of installations serviced as reported by the CESC is 3,00,070.

The difference in number of installations is 16,266. This indicates

decrease of around 5 per cent in number of installations serviced, as

compared to the approved number of installations by the Commission

for the FY15. Further, it is noted that the shortfall in the sales can be

attributed to lower number of installations serviced than the projected

numbers.

The Commission in its Tariff Order dated 12th May, 2014 had directed

the CESC to furnish feeder wise IP set consumption based on the

feeder energy meter data, every month to the Commission, in respect

of agricultural feeders segregated under NJY. The CESC in its tariff

application has submitted the data of IP sets from April 14, to March 15,

without indicating as to how much loss in 11 kV lines, distribution

transformers and LT system has been deducted from the gross

consumption obtained from the agricultural feeders, to arrive at the

net IP set consumption.

The Commission in its preliminary observations had directed the CESC

to justify its claims of IP consumption of 2,294.33 MU declared for the

FY15 with necessary data in support of the same and the methodology

adopted to arrive at the energy loss figures in the 11 kV System. The

CESC was also directed to explain whether the total IP set

consumption for the FY15 has been worked out by considering the

specific consumption of agricultural feeders segregated under NJY or

on the basis of readings obtained from the meters fixed to sample

DTCs feeding predominantly IP set loads, with the necessary data to

justify its claims in support of IP sales declared for the FY15.

The CESC, in its reply to the preliminary observations made by the

Commission, has stated that it has submitted the IP set details based on

the energy meters data in respect of the segregated agricultural

xxviii

feeders as desired by the Commission and the distribution system loss

figures at 15 per cent has been considered to arrive at the net IP set

consumption from April, 2014 to March 2015.

Further, the CESC during the validation meeting held on 10.02.2016 in

the Commission has also submitted the necessary data in respect of IP

set consumption for the FY15 on the basis of energy meter readings of

11 kV agricultural feeders which have been segregated under NJY.

The Commission notes that the decrease in IP set sales for the FY15 can

be attributed to the fact that the CESC has serviced less number of IP

sets than it has projected. However, it is also noted that the specific

consumption as well as the sales have significantly decreased vis-à-vis

the approved quantities by the Commission for the FY15 perhaps due

to restricted hours of power supply made to agricultural feeders which

are segregated under NJY. The Commission also notes that the CESC

has declared overall 11 kV distribution system losses at 15 per cent,

whereas, the same could have been directly calculated for each

feeder considering the 11 kV and LT sketches in respect of all the

agricultural feeders to arrive at accurate IP set consumption.

The CESC is directed to report henceforth the total IP set consumption

on the basis of data from energy meters in respect of agricultural

feeders segregated under NJY to the Commission every month

regularly duly calculating the distribution system losses in 11 KV lines,

distribution transformers and LT lines, as discussed above.

For the present, the Commission decides to accept the sales to IP sets

for the FY15 as 2,294.33 MU as submitted by the CESC.

The category wise sales approved by Commission and the actuals for

FY 15 are indicated in the table below:

TABLE – 4.4

Approved Sales as per APR for FY15

Figures in MU

Category Approved Actuals Actuals - Approved

xxix

LT-2a* 889.51 903.40 13.89

LT-2b 6.65 7.21 0.56

LT-3 249.02 245.89 -3.13

LT-4b 0.71 0.89 0.18

LT-4c 8.55 9.77 1.22

LT-5 133.93 138.74 4.81

LT-6 147.85 140.98 -6.87

LT-6 83.16 90.40 7.24

LT-7 11.92 11.59 -0.33

HT-1 392.45 413.98 21.53

HT-2a 879.06 744.27 -134.79

HT-2b 135.69 108.46 -27.23

HT-2c 7.80 36.63 28.83

HT-3a & b 40.90 50.48 9.58

HT-4 9.06 5.82 -3.24

HT-5 1.54 2.71 1.17

Sub total 2997.80 2911.22 -86.58

BJ/KJ 34.86 34.54 -0.32

IP 2415.79 2294.33 -121.46

Sub total 2450.65 2328.87 -121.78

Grand total 5448.45 5240.09 -208.36

*Including BJ/KJ installations consuming more than 18 units/month

Thus the Commission approves the energy sales for FY15 at 5240.09 MU.

4.2.2 Distribution Losses for FY15:

CESC’s Submission:

The Commission had approved distribution losses for FY15 as

shown in the table below:

Range FY15

Upper limit 15.50%

Average 15.00%

Lower Limit 14.50%

CESC has reported a loss level of 13.88% for FY15 as detailed

below:

xxx

1 Energy at Interface Points in MU 6084.89

2 Total sales in MU 5240.07

3 Distribution losses as a percentage of

input energy at IF points 13.88%


The distribution losses of 13.88% reported by CESC is based on the sales

of 5240.09 MU as against the energy of 6084.89 MU at interface points.

Considering the approved range of losses for FY15, CESC has achieved

distribution loss reduction of 0.62% as compared to the lower limit of

allowable losses. As per the provisions of the MYT Regulations,

incentives for loss reduction is allowed to CESC as follows:

TABLE – 4.5

Incentives for loss reduction in FY15

Particulars FY15

Actual input at IF points as per audited accounts in

MU 6084.89

Retail sales as per audited accounts in MU 5240.07

Percentage distribution losses 13.88%

Target of lower limit of distribution loss 14.50%

Reduction in loss in percentage point 0.62%

Input at target loss for actual sales in MU 6128.74

Decrease in input due to reduction in distribution

losses in MU 43.85

Average cost of power purchase @ IF points in

Rs./unit 3.43

Reduction in power purchase cost due to lower

distribution losses in Rs. Crores 15.06

Incentives allowed in APR 15 (Sharing gains with

consumers in the ratio of 50:50) in Rs.Crs. 7.53

Accordingly, the Commission decides to add an amount of Rs.7.53

Crores as incentive towards loss reduction in the revised ARR for FY15.

4.2.3 Power Purchase for FY15:


xxxi

1. The Commission in its Tariff order dated 12th May, 2014 had

approved source-wise quantum and cost of power purchase for

FY15. The CESC, in its application has submitted the details of actual

power purchase for FY15 for its Annual Performance Review. The

details of power purchase are detailed as under:

xxxii

TABLE – 4.6

CESC’s POWER PURCHASE FOR FY15

Particulars

Actuals for FY15 Approved for FY15

Difference of Actuals

over the Approved-for

FY15

% increase /decrease

over approved figures

Energy

in MUs

Cost in

Rs Crs.

Rate

in Rs

per

Unit

Energy

in MUs

Cost in

Rs Crs.

Rate

in Rs

per

Unit

Energy

in MUs

Cost

in Rs

Crs.

Rate

in Rs

per

Unit

Energy Cost Rate

KPCL Hydel

Stations

1808.49 105.07 0.58 1793.84 101.74 0.57 14.65 3.33 0.01 0.82 3.27 2.44

KPCL-Thermal

Stations

1627.55 627.25 3.85 1694.06 645.15 3.81 -66.51 -17.90 0.05 -3.93 -2.77 1.20

Total 3436.04 732.32 2.13 3487.9 746.89 2.14 -51.86 -14.57 -0.01 -1.49 -1.95 -0.47

CGS 1451.01 439.02 3.03 1578.31 503.76 3.19 -127.30 -64.74 -0.17 -8.07 -12.85 -5.21

Major IPPs 38.90 16.76 4.31 0.78 0.36 4.62 38.12 16.40 -0.31 4887.18 4555.56 -6.65

IPPs -Minor

(NCE

Projects)

615.03 220.92 3.59 895.83 318.51 3.56 -280.80 -97.59 0.04 -31.35 -30.64 1.03

Other States

Projects

15.86 4.74 2.99 21.7 6.91 3.18 -5.84 -2.17 -0.20 -26.91 -31.40 -6.15

Short

/Medium

term

including U I

& Sce-11

910.78 476.02 5.23 679.31 354.33 5.22 231.47 121.69 0.01 34.07 34.34 0.20

Transmission

Charges

(KPTCL &

PGCIL)

318.47 309.9 0.00 8.57 0.00 2.77

LDC Charges

(POSOO &

SLDC)

3.77 3.56 0.00 0.21 0.00 5.90

Energy

Balancing

-168.23 -53.27 3.17 -168.23 -53.27 3.17

Others

Charges

4.52 0.00 4.52 0.00

TOTAL 6299.39 2163.31 3.43 6663.83 2244.22 3.37 -364.44 -80.95 0.07 -5.47 -3.61 1.97

Commission’s analysis and decisions;

1. The actual power purchase for FY15 as filed by the CESC for

approval of Annual Performance Review is 6299.39 MU at a cost of

Rs.2163.97 Crores, as against the approved quantum of 6663.83 MU,

amounting to Rs.2244.22 Crores. Thus there is reduction in quantum

of power purchased to an extent of 364.44 MU and in cost by

Rs.80.95 Crores.

xxxiii

2. On an analysis of the source-wise approved and actual power

purchases, the following deviations in quantum of energy and its

cost of purchase are found:

i. As against the approved quantum of 6663.83 MU the actual

power purchased by the CESC is 6299.39 MU for FY15, which is

around 5.47% of the approved quantum. Such decrease during

FY14 was 3.39%. This has reflected in reduction in power

purchase.

ii. On a verification of the source-wise power purchase, it is found

that, there is lesser energy supply from KPCL thermal, CGS, NCE

and outside the State projects to an extent of 480.45 MU at a cost

of Rs.182.40 Crores. Consequently, CESC has purchased

additional power from KPCL hydel, major IPPs and Short-term

supplies, over and above the approved power purchase against

these sources, to a tune of 284.24 MU, incurring an expenditure of

Rs.141.42 Crores. However, there is an overall reduction in power

purchase to a tune of Rs.80.95 Crores. Consequent to reduced

supply of energy from KPCL thermal, CGS, NCE etc., the power

purchase cost per unit, has increased by 7 paise.

iii. All these factors including the change in the source-wise mix of

supply and reconciliation of energy and its cost among ESCOMs

have resulted in higher average power purchase cost of CESC at

Rs.3.43 per KWh as against the approved rate of Rs.3.37 per KWh

leading to an overall increase by Rs.0.07 per unit. During FY 14 the

increase in per unit cost was Rs.0.29 per unit which worked out to

9.66 %. Now, for FY15, the increase in per unit cost is 1.97 %.

iv. D1 format of CESC indicates energy balancing among other

ESCOMs to an extent of 168.23 MU amounting to Rs.53.27 Crores,

which has been reconciled with Energy Balancing Statement of

SLDC.

3. The Commission notes that, the SLDC is yet to implement the intra-

state ABT scheme. The Commission therefore directs SLDC to take

xxxiv

appropriate action immediately to expedite the implementation of

intra-state ABT and to host such details on its website.

4. The Commission in its Tariff order dated 2nd March, 2015 had

directed CESC to move the Government to effect necessary

adjustments in the tariff subsidy payable to ESCOMs and ensure

that there are no inter ESCOM payments outstanding in their

accounts. Further, CESC was also directed to reconcile the inter

ESCOM exchanges and its costs duly making necessary

adjustments to ensure proper accounting of energy and its cost.

5. CESC is directed to reconcile the inter ESCOM energy exchanges

and its costs every month and the difference amounts shall be

collected/paid out of the tariff subsidy received from the

Government of Karnataka, to ensure proper accounting of energy

and its cost.

6. The Commission reiterates that, for the prior period

receivables/payables, CESC should move the Government to

effect necessary adjustments out of the tariff subsidy, to be

received from the Government of Karnataka.

In terms of the MYT Regulations, the Commission taking note of the

above facts, decides to consider 6299.39 MU at a cost of Rs.

2163.30 Crores (as per audited Accounts), towards power purchase

for approving the Annual Performance Review of CESC for FY15.

4.2.4 Renewable Purchase Obligation (RPO) compliance by CESC for FY15:

CESC has submitted that its achievement of non-solar RPO and solar

RPO are at 11.51% and 0.23% respectively as against target of 10% and

0.25% respectively, as indicated below:

TABLE – 4.7

RPO compliance as submitted by CESC for FY15

xxxv

Company

Name

Total

Input

Energy

(MU)

Non-Solar RPO Solar RPO

Target Achieved Target Achieved

(MU) (%) (MU) (%) (MU) (%) (MU) (%)

CESC 6299.35 629.94 10 725.23 11.51 15.74 0.25 14.50 0.23

The Commission has perused the source-wise renewable energy

purchased, as submitted by CESC under D1 format of the Petition vis-à-

vis the RPO compliance data submitted by CESC in its reply to the

Commission’s preliminary observations.

The Commission has observed that, CESC has accounted 7.49 MU of

non-solar renewable energy purchased under APPC for the purpose of

non-solar RPO compliance. Since, renewable energy purchased under

APPC cannot be considered for the RPO calculation, the Commission

has not considered the same. Thus, the non-solar RE reckoned by the

Commission for non-solar RPO compliance is 717.74 MU as against

725.23 MU declared by CESC.

The Commission has approved total power purchase quantum of

6299.3MU for FY15 in its APR. Thus, CESC was required to purchase

629.93 MU of Non-solar energy to meet its RPO target. Based on the

information furnished, the Commission notes that CESC has purchased

717.74 MU of non-solar RE power for FY15 complying with the non-solar

target for FY15.

Regarding solar RPO target, it is noted that CESC has been able to

achieve solar RPO target of 0.23% as against a specified target of

0.25%, resulting in shortfall of 0.02% in meeting the solar RPO target.

Further, in replies to the observations made by the Commission in the

validation meeting, CESC has stated that the shortfall is due to

inordinate delay in commissioning of 10MW capacity M/s Sai Sudhir

Energy Pvt. Ltd. It is further, stated that if the project had been

commissioned, CESC would have been able to meet the solar RPO

from the anticipated generation of 15 MU. Further, CESC has requested

the Commission to allow them to carry forward unfulfilled FY-15 solar

xxxvi

RPO to FY16 as two solar projects of M/s Madhav Solar of 5 MW

capacity each have been commissioned during July, 2015 and in the

event of non-fulfillment of solar RPO in FY-16, it would consider

purchase of RECs to achieve the solar RPO.

The Commission notes that when the State as a whole is taken for the

purpose of assessment of achievement of solar RPO, in aggregate all

the State owned ESCOMs have achieved the total solar RPO target set

for the State. The Commission therefore decides not to recognize the

individual achievement of CESC and to treat the matter as closed.

4.2.5 Operation and Maintenance Expenses:


CESC has sought approval of O&M expenditure of Rs.371.44

Crores for FY15. CESC has claimed this O&M expenses as follows:

TABLE – 4.8

Normative O & M Expenses – CESC’s submission


Particulars FY15

Repairs & Maintenance 37.56

Employee Expenses 294.33

A&G expenses 39.55

O&M expenses 371.44


The Commission had approved O&M expenses for FY15 as detailed

below:

TABLE – 4.9

Approved O&M Expenses for FY15 Amount in Rs. Crores

Particulars FY15

No. of installations as per actuals as per Audited Accts 2888721

Weighted Inflation Index 6.89%

CGI based on 3 Year CAGR 5.54%

xxxvii

Actual O&M expenses for FY13 326.07

Approved O&M Expenses for FY15 393.51

As per the Annual Audited Accounts of the CESC for FY15, the actual

O&M expenditure is as follows:

xxxviii

TABLE – 4.10

O&M Expenses of CESC for FY15 as per actuals

Amount in Rs. Crores Repairs & Maintenance 37.56

Employee Expenses 294.33

A&G expenses 39.55

O&M expenses 371.44

The Commission in its preliminary observations made on the O & M

expenses had sought the details of the items of expenditure incurred

by the CESC during FY15 under A & G expenses. The CESC in its replies

has stated that it has incurred expenses of Rs.14.70 Crores towards

professional charges, Rs.8.52 Crores towards conveyance, travel and

vehicles expenses besides other A&G expenses. On detailed review of

the expenses, it is observed that CESC is incurring substantial expenses

on vehicle hire charges and professional charges.

Also, the R&M expenses are increasing year on year without proper

justification. One of the major items noticed under R & M is expenses

incurred on repairs of distribution transformers. The CESC needs to

institutionalize a mechanism for minimizing such expenses.

These expenses are abnormally increasing as compared to the

previous years. Since the O & M expenses are controllable expenses,

the CESC has to initiate necessary measures to ensure prudence in

incurring these expenses. The Commission is of the view that the CESC

should continue control its O & M expenses as per the approved O & M

expenses.

However, for the present, based on the provisions of the MYT

Regulations, the Commission has proceeded with determining the

normative O & M expenses.

Considering the Wholesale Price Index (WPI) as per the data available

from the Ministry of Commerce & Industry, Government of India and

Consumer Price Index (CPI) as per the data available from the Labour

xxxix

Bureau, Government of India and adopting the methodology followed

by the CERC with CPI and WPI in a ratio of 80 : 20, the allowable

inflation for FY15 is computed as follows:

Year WPI CPI Composite

Series Yt/Y1=Rt Ln Rt

Year

(t-1)

Product [(t-

1)* (LnRt)]

2003 92.6 107 104.12

2004 98.72 111.1 108.624 1.04 0.04 1 0.04

2005 103.37 115.8 113.314 1.09 0.08 2 0.17

2006 109.59 122.9 120.238 1.15 0.14 3 0.43

2007 114.94 130.8 127.628 1.23 0.20 4 0.81

2008 124.92 141.7 138.344 1.33 0.28 5 1.42

2009 127.86 157.1 151.252 1.45 0.37 6 2.24

2010 140.08 175.9 168.736 1.62 0.48 7 3.38

2011 153.35 191.5 183.87 1.77 0.57 8 4.55

2012 164.93 209.3 200.426 1.92 0.65 9 5.89

2013 175.35 232.2 220.83 2.12 0.75 10 7.52

2014 182 246.9 233.92 2.25 0.81 11 8.90

A= Sum of the product column 35.36

B= 6 Times of A 212.19

C= (n-1)*n*(2n-1) where n= No of years of data=12 3036.00

D=B/C 0.07

g(Exponential factor)= Exponential (D)-1 0.0724

e=Annual Escalation Rate (%)=g*100

7.24

For the purpose of determining the normative O & M expenses for FY15,

the Commission has considered the following:

a) The actual O & M expenses allowed for FY13 excluding contribution

to Pension and Gratuity Trust.

b) The three year compounded annual growth rate (CAGR) of the

number of installations considering the actual number of

installations as per audited accounts up to FY15.

c) The weighted inflation index (WII) at 7.24% as computed above.

d) Efficiency factor at 2% as considered in the earlier two control

periods.

Thus, the normative O & M expenses for FY15 will be as follows:

Particulars FY15

No. of Installations as per actuals as per Audited Accts 2735802

Weighted Inflation Index 7.24%

Consumer Growth Index (CGI) based on 3 Year CAGR 3.65%

Normative O & M expenses for FY13 excluding P&G 270.60

xl

contribution - Rs. Crs.

O&M Index= 0&M (t-1)*(1+WII+CGI-X)- Rs. Crores 318.60

The above normative O & M expenses have been computed without

considering the contribution to Pension and Gratuity Trust.

The Commission has treated certain employee costs on account of

contribution to P&G Trust as uncontrollable O&M expenses. This

component has been allowed beyond the normative O&M expenses

to enable ESCOMs to meet their actual employee costs.

The CESC in its audited accounts for FY15 has indicated an amount of

Rs.48.70 Crores towards contribution to Pension and Gratuity trust.

Considering the request of the CESC to treat gratuity contribution as

uncontrollable O & M expenses, the Commission has computed the

allowable O & M expenses for FY15 as follows:

TABLE – 4.11

Allowable O & M Expenses for FY15

Amount in Rs. Crores Sl.


1 Normative O & M expenses 318.60

2 Additional employee cost (uncontrollable

O & M expenses)

48.70

3 Allowable O & M expenses 367.30

The Commission decides to allow an amount of Rs.367.30 Crores as

O&M expenses for FY15.

4.2.6 Depreciation:


CESC in its application has claimed an amount of Rs.46.08 Crores as

depreciation computed after deducting an amount of Rs.35.87 Crores

towards depreciation withdrawn on account of contributions /

subsidies as per Accounting Standards (AS) – 12.

As per the audited accounts, the asset wise depreciation is as follows:

xli

TABLE – 4.12

Depreciation for FY15 – CESC’s Submission


Particulars

Opening

Balance of

Asset as on

01.04.2014

Closing

Balance of

Asset as on

31.03.2015

Depreciation

for FY15

Buildings 52.62 58.81 1.84

Civil 1.72 1.79 0.09

Other Civil 0.69 0.72 0.02

Plant & M/c 327.77 432.87 20.64

Line, Cable Network 1244.80 1505.59 58.85

Vehicles 3.80 4.38 0.05

Furniture 3.95 3.90 0.18

Office Equipment 6.93 5.18 0.28

Total 1642.28 2013.24 81.95

Intangible assets 2.17 2.17

Net Depreciation 1644.45 2015.41 81.95


The depreciation is determined by the Commission in accordance

with the provisions of the KERC (Terms and Conditions for

Determination of Tariff) Regulations, 2006 as amended on 1st February,

2012. Considering the opening and closing balance of gross blocks of

fixed assets for FY15 and the depreciation as per annual accounts, the

weighted average rate of depreciation works out to 4.46%.

As per the audited accounts for FY15, an amount of Rs.35.87 Crores on

account of depreciation on assets created out of grants and

contribution on actual basis, is considered for computation of

allowable depreciation for FY15.

Based on the above, the Commission decides to allow the actual

depreciation of Rs.46.08 Crores for FY15.

xlii

4.2.7 Capital Expenditure for FY15

CESC has reported a capital expenditure of Rs.368.12 Crores against

the approved capex of Rs.455 Crores (CESC had approached the

Commission for approval of additional capex for FY15 duly furnishing

the reasons for its increased capex requirement from Rs.378 Crores and

the Commission had approved an additional capex of Rs.77 Crores for

FY15 totalling to a capex of Rs.455 Crores for FY15). The actual

expenditure incurred by CESC for different category of works is as

shown in the table below:

TABLE- 4.13

The actual capital expenditure incurred by CESC for FY15

Amount in Rs.

Crores

Sl.

No. Schemes Approved

Actual

expenditure

1 Extension & Improvement

a) HVDS+LTD Box + E&I works 70 65.95

b) NJY 125 85.77

2 R-APDRP 45 16.83

3 RGGVY(Restructured )+DDG 25 0.04

4 Replacement of failed

Transformers 50 62.57

5 Service Connections 35 31.52

6 Rural Electrification(General)

A Electrification of

Hamlets/HB/JC/KJ under RGGVY 38 79.97

B

Providing infrastructure to

Irrigation Pump sets & Energization

of IPSETS

C Kutir Jyothi(RGGVY)

7 Tribal plan


HB/JC/AC(RGGVY) 3 4

B Energization of IP sets

C Kutir Jyothi (RGGVY)

8 Special Component Plan


HB/JC/AC(RGGVY) 8 11

B Energization of IP sets

C Kutir Jyothi (RGGVY)

9 Tools & Plants (Other works) 4 2.23

10 Civil Engineering Works 10 8.20

xliii

Sl.

No. Schemes Approved

Actual

expenditure

11 Providing Meters to DTC, IP Set. 42 0.04

Total 455 368.12

Commission’s Analysis and decision:

From the above table it is to be noted that, in the category of RGGVY

(Restructured) +DDG works, the CESC has incurred very meager capex

of only Rs.0.04 Crores against the approved capex of Rs.25 Crores.

In case of replacement of failed Transformers, the CESC has indicated

capital expenditure of Rs.62.57 Crores, which is 25% more than the

approved capex of Rs.50 Crores. It is to be noted that, the failed

transformers should be replaced by repaired good transformers only

and it should be charged to revenue expenditure. In case, the failed

transformer is scrapped then only it can be replaced by a new

transformer which can be booked under capex. However, in the reply

to the preliminary observations, the CESC has admitted that, there is a

discrepancy in accounting system/booking of expenditure pertaining

to replacement of failed transformers. The CESC has indicated that,

1397 numbers of new transformers (100kVA, 63kVA and 25kVA) are

used for replacing failed transformers amounting to a total of Rs.13.28

Crores only. But, the amount indicated in capital expenditure for

replacement of failed transformer is at Rs.62.57 Crores. The CESC has

agreed to streamline its accounting system to reflect only the capital

expenditure actually incurred for replacement of failed transformers by

new transformers. Further, when the capex incurred for replacement of

failed transformers by new transformers, is considered as Rs.13.25

Crores only, the capital expenditure of FY15 will be Rs.318.83 Crores

instead of Rs.368.12 Crores.

The CESC had ambitiously sought additional capex approval from the

Commission for FY15 from Rs.373 Crores to Rs.455 Crores, but, it could

achieve only Rs.368.12 Crores which is very well within the original

approval of Rs.378 Crores. The CESC should have strived to complete

xliv

more number of works and achieve a higher capex nearer to the

additionally approved capex figures.

The year-wise expenditure incurred by the CESC against the approved

Capex during the last four years is shown in the following Table:

TABLE – 4.14

Approved Vs Actual capital investment

Amount in Rs.Crores

Particulars FY12 FY13 FY14 FY15

Capital Investment Proposed

& Approved

485.00 560.00 575.50 455

Capital Investment actually

incurred

183.27 195.87 321.75 318.83

Short fall 301.73 364.13 253.75 136.17

% Achievement 37.79% 34.98% 55.91% 70.07%

From the above table, it can be observed that, though the CESC has

improved its spending on capital investments over the years, it has not

achieved more than 70% of its approved capex in any year from FY12.

Considering the above points, the Commission considers the capital

expenditure incurred by the CESC at Rs.318.83 Crores subject to

prudence check of capital investment of FY15 as discussed in the

following paras.

4.2.8 Prudence check of FY15:

The prudence check of capex of CESC was taken in two parts:

a) Prudence check of execution of the capital works of FY15:

b) Prudence check of material procurement process of FY15:

a) Prudence check of execution of the capital works of FY15

The Commission had taken up prudence check of the capital

expenditure incurred by the CESC for the period FY15 by engaging the

services of M/s. Power Research Development Consultants Private

xlv

Limited, (M/s PRDC) as consultants to evaluate the capital expenditure

incurred during FY15, in respect of completed and categorized works.

The Consultant has taken a list of division wise and cost wise total

Capex works carried out, completed and categorized in the CESC

during FY-15 from KERC. It has classified the works cost wise in three

groups as per the Scope of work mentioned in bid document, namely,

works costing above 6 lakhs, works costing between Rs.6 lakh and 3

lakh and works costing between 3 lakh and 1 lakh respectively. The

works were taken up under various schemes like RAPDRP, UNIP and

Niranthara Jyothi Schemes apart from General capital works like

service connection, Extension & Improvement works, Civil engineering

works, metering, etc. A representative sample in each category was

selected covering the geographical area of the Company as per the

Scope of work and submitted the report of the prudence check.

As per the prudence check report submitted by the consultants, the

following are the salient features:

TABLE – 4.15

Gist of Prudence check findings for FY15

Particulars Numbers Amount

in Rs. Crs

Works costing Rs.6 Lakhs and above considered as

samples for validation 119 95.79

Works costing between than Rs.6 Lakhs and Rs.3

Lakhs considered as samples 50 2.53

Works costing below Rs.3 Lakhs considered as

samples 24 0.69

Works not meeting the

norms of prudence

Rs.6 Lakhs and above Nil

Rs.6 Lakhs and Rs.3 Lakhs Nil

below Rs.3 Lakhs Nil

Total works not meeting the norms of prudence as

stipulated in the guidelines issued by this

Commission

Nil

A summary of the other findings in the prudence check are given in

following Table:

Summary of Works having cost overrun

xlvi

Particulars Within 10% 10-25% Above 25%

Rs.6 Lakhs and above 04 09 07

Rs.6 Lakhs and Rs.3 Lakhs 03 01 00

below Rs.3 Lakhs 01 01 00

xlvii

Summary of Works having Time overrun

Particulars Within one

Year

Between one

and two Years above 2 Years

Rs.6 Lakhs and above 22 16 08

Rs.6 Lakhs and Rs.3 Lakhs 11 03 03

below Rs.3 Lakhs 04 02 02

The Commission has forwarded the copy of the Report on the Prudence

check to the CESC for its information.

b) Prudence check of material procurement process of FY15:

The Consultant has stated that, the CESC has considered all the

aspects related to procurement prudently and procured the materials

as per the requirement after due process of “e-tendering” dully

following the transparency act. However the Government of

Karnataka has exempted the ESCOMs from the KTPP act in respect of

purchase of materials directly from a few firms without calling for

tenders. Some materials are also purchased through rate contract

basis from firms after necessary bidding processes.

The following are the observations made by the Consultant on the

procurement of materials:

a) The CESC has considered the actual requirement of materials

based on work in progress and the annual program of works

planned.

b) The materials are procured through the process of e-tendering

duly following the regulations as per the KTPP Act and from the

firms which are exempted from KTTP.

c) There has been a downward trend in the materials stocked at

the end of the year (Closing Balance) as compared to the

beginning (Opening Balance). Only in respect of conductors,

insulators, Group Operating Switch (GOS), HG fuse and PSC

xlviii

poles there was a small percentage of increase (15 to 20%)

which may be of necessity considering the large consumer

base, huge quantity of infrastructure to be maintained and

developmental needs. Only in respect of weasel and rabbit

ACSR conductors there has been a huge pile up of stock to an

extent of 774 kms and 815 kms respectively.

d) Major materials like 250 kVA transformers, UG cables, aerial

bunched cables, RMU’s have not been procured during the

year.

e) Some of the materials like energy meters are under Rate

Contract agreement with leading and reputed Firms, these

meters are ordered by sub-division or divisional levels as and

when required.

c) Prudence check of execution of the capital works of FY13 &

FY14:

The Commission had disallowed interest and depreciation charges on

the two works pertaining to FY13& FY14, which were termed as not

meeting the norms of prudence in the Tariff Order dated: 02-03-2015.

The CESC in its reply to the preliminary observation has submitted that,

the short comings of the two works have been rectified and requested

the Commission to consider them as meeting the norms of prudence.

Based on the reply of the CESC, the Commission desired to revalidate

the two works of the CESC, by the consultant conducting prudence

check of capital works of the CESC for FY15 and submit a separate

report.

The consultant, M/s PRDC (P) Ltd. has verified the two projects and

furnished a separate report and stated that, CESC has rectified the

system of metering of DTCs and started energy audit. In view of the

rectification and utilisation of the assets for the benefit of the

xlix

Company, M/s PRDC (P) Ltd, has stated that, the projects can be

treated as meeting the norms of prudence.

Hence, the Commission, having taken note of the findings has decided

to consider the two projects as meeting norms of prudence and

discontinue the disallowance.

l

4.2.9 Interest and Finance Charges

a) Interest on loan:


The CESC has claimed an amount of Rs.39.19 Crores towards

interest on long term loans drawn from banks / financial

institutions during FY15.


The Commission has noted the status of opening and closing balances

of loans as per the audited accounts and format D9 of the filings as

shown below:

TABLE – 4.16

Allowable Interest on Loans – FY15


Particulars FY15

Opening Balance Secured Loans 394.74

Opening Balance Un-secured Loans 36.30

Total opening balance of loans 431.04

Less Short term loans/ Over draft 0.00

Less Interest accrued & dues 0.00

Total Long term secured & unsecured loans 431.04

Add new Loans 286.67

Less Repayments 46.47

Total loan at the end of the year 671.24

Average Loan 551.14

Interest on long term loans as per audited accounts for FY15 56.56

Considering the average loan of Rs.551.14 Crores and an amount of

Rs.56.56 Crores incurred towards interest on long term loans, the

weighted average of interest works out to 10.26%. The actual

weighted average rate of interest is comparable with the prevailing

rate of interest for long term loans.

li

Thus, the Commission decides to allow an amount of Rs.56.56 Crores

towards interest on long term loans for FY15.

4.2.10 Interest on Working Capital:


The CESC in its application has stated that it has borrowed short

term loans and overdrafts during the year to meet day to day

expenditure during FY15. The interest on these loans is

indicated at Rs.1.41 Crores. However, as per the replies to the

preliminary observations, The CESC has informed that the interest

on short term loan and overdraft for FY15 is Rs.23.71 Crores.


As per its audited accounts the CESC has incurred an interest of

Rs.23.71 Crores on short term borrowings and overdrafts during FY15.

The present interest rates by commercial banks and financial

institutions are charged mainly on the basis of base rate of interest

declared by RBI from time to time. Hence, the Commission would

consider base rate plus certain basis points depending upon the

tenure of the loan. Considering the base rate of interest of 9.30% with

a spread of 250 basis points and noting the downward trend in the

interest rate, the Commission decides to allow the normative interest

on short term loans of 11.75% for FY15.

As per the KERC (Terms and Conditions for Determination of Tariff)

Regulations, 2006 as amended on 1st February, 2012, the Commission

lii

has computed the allowable interest on working capital for FY15 as

follows:

liii

TABLE – 4.17

Allowable Interest on Working Capital for FY15

Amount in Rs.

Crores Particulars FY15

One-twelfth of the amount of O&M Expenses 30.61

Opening GFA 1644.73

Stores, materials and supplies 1% of Opening balance of GFA 16.45

One-sixth of the Revenue 438.21

Total Working Capital 485.26

Rate of Interest (% p.a.) 11.75%

Normative Interest on Working Capital 57.02

Actual interest on WC as per audited accounts for FY15 23.71

Allowable Interest on Working Capital 40.36

The Commission decides to allow an amount of Rs.40.36 Crores

towards interest on working capital for FY15.

4.2.11 Interest on Consumer Deposits:


The CESC in its application has claimed an amount of Rs.37.09

Crores towards payment of interest on security deposits for FY15.


The Commission notes that, the interest on consumer deposits

amounting to Rs.37.09 Crores claimed by the CESC works out to a

weighted average rate of interest of 8.91%. As per the KERC (Interest

on Security Deposit) Regulations, 2005 the interest on consumer

deposits is to be allowed as per the bank rate prevailing on the 1st of

April of the relevant year. The bank rate as on 1st April, 2013 was 9%.

The weighted average rate of interest as per actuals is within the

applicable bank rate.

Thus, the Commission decides to allow an amount of Rs.37.09 Crores

claimed towards interest on consumer deposits for FY15.

liv

4.2.12 Other Interest and Finance charges:

The CESC has claimed an amount of Rs.2.44 Crores towards other

interest and finance charges for FY15 which includes charges payable

to banks / financial institutions and guarantee commission payable to

GoK. The Commission notes that the claims are as per audited

accounts and hence decides to allow the same for FY15.

4.2.13 Interest on belated payment of power purchase cost:

The CESC in its application has claimed an amount of Rs.1.54 Crores

towards interest on belated payment of power purchase cost during

FY15. Since the Commission is allowing interest on working capital on

normative basis, the Commission decides to disallow any claims on

interest on belated payment of power purchase cost separately.

4.2.14 Capitalization of Interest:

The CESC has capitalized interest of Rs.27.71 Crores during FY15. The

same has been considered for computation of APR for FY15.

Thus the allowable interest and finance charges for FY15 are as follows:

TABLE – 4.18

Allowable Interest and Finance Charges


Sl.


1. Interest on Loan capital 56.56

2. Interest on working capital 40.36

3. Interest on consumer deposits 37.09

4. Other interest and finance charges 2.44

5. Capitalisation of interest (27.71)

6. Total interest and finance charges 108.74

lv

4.2.15 Other Debits:


CESC, in its application has claimed an amount of Rs.4.94 Crores

towards other debits as detailed below:

TABLE – 4.19

Other Debits-CESC’s Submission


Sl

No Particulars FY15

1 Small and Low value items written off 0.08

2 Losses/gains relating to Fixed assets 0.70

3 Assets decommissioning cost (0.07)

4 Bad debts written off 0.18

5 Miscellaneous losses and write offs 1.71

6 Provision for bad and doubtful debts 2.34

Total 4.94


The Commission notes that the claims of the CESC include an amount

of Rs.2.34 Crores towards provision for bad and doubtful debts which

are not actual expenses incurred. Considering the claims as per the

audited accounts, the allowable other debits for FY15 is as detailed

below:

TABLE – 4.20

Allowable Other Debits

Amount in Rs. Crs.

Sl

No Particulars FY15

1 Small and Low value items written off 0.08

2 Losses/gains relating to Fixed assets 0.70

3 Assets decommissioning cost (0.07)

4 Bad debts written off 0.18

5 Miscellaneous losses and write offs 1.71

Total 2.60

Thus, the Commission decides to consider an amount of Rs.2.60 Crores

as other debits for FY15.

lvi

4.2.16 Net Prior Period Charges:


The CESC in its application as per audited accounts has claimed a

net credit balance of Rs.72.44 Crores towards Net Prior Period

Credits as detailed below:

TABLE – 4.21

Net Prior Period Charges-CESC’s Submission

Amount in Rs. Crs.

Particulars FY15

Prior period expenses / losses 110.94

Prior period income (183.38)

Net prior period credits 72.44


As per the Audited Accounts for FY15, the prior period debit is Rs.110.94

Crores on account of employee costs, A&G expenses and under

provided depreciation of earlier years. Further the prior period credit

of Rs.183.38 Crores is on account of excess depreciation, finance

charges and other expenses. Hence the Commission decides to allow

net prior period credit of Rs.72.44 Crores for FY15.

4.2.17 Return on Equity:


CESC in its application has not claimed Return on Equity for FY15.


As per the KERC (Terms and Conditions for Determination of Tariff)

Regulations, 2006 as amended on 1st February, 2012, the Commission

has computed the allowable Return on Equity at 15.5% on equity plus

reserves and surplus as at the beginning of the year besides allowing

lvii

taxes as per actuals. The allowable RoE for FY15 is determined as

follows:

TABLE – 4.22

Allowable Return on Equity


Particulars FY15

Paid Up Share Capital 325.52

Share deposit 23.20

Reserves and Surplus (682.46)

Less recapitalized security deposit (23.00)

Total Equity (356.74)

Considering accumulated losses of Rs.682.46 Crores and total equity of

Rs.348.72 Crores as at the beginning of the year and recapitalization of

security deposit of Rs.23.20 Crores, CESC has negative net worth of

Rs.356.74 Crores.

Thus, the Commission decides not to allow any Return on Equity for

FY15.

4.2.18 Income tax :

As per the audited accounts, CESC has incurred an expenditure of Rs.15.78

Crores towards payment of Income Tax for FY15. The Commission decides

to allow the actual Income Tax payment of Rs.15.78 Crores for FY15.

4.2.19 Other Income:


As per the audited Accounts, an amount of Rs.33.77 Crores is shown as

Other Income for FY15. This amount includes income from interest on

fixed deposits, sale of scrap, incentives / rebate for collection of

electricity tax and rent from staff quarters.


As decided in the earlier Tariff Orders to encourage and bring in

financial discipline in timely payment of monthly power purchase bills,

the Commission continues to allow10% of the total incentive

lviii

amounting to Rs.1.20 Crores on account of timely payment of power

purchase bills to be retained by the CESC for FY15. Thus after

deducting the incentive amount of Rs.1.20 Crores, the Commission

decides to allow an amount of Rs.32.57 Crores as other income for

FY15.

4.3 Abstract of Approved revised ARR for FY15:

As per the above item-wise decisions of the Commission, the

consolidated Statement of ARR for FY15 is as follows:

TABLE – 4.23

Approved Revised ARR for FY15 as per APR


Sl.

No. Particulars As per APR

Revenue at existing tariff in Rs Crs







5 SLDC Charges 3.42

Power Purchase Cost including cost of transmission 2163.31

6 Employee Cost

7 Repairs & Maintenance

8 Admin & General Expenses

Total O&M Expenses 367.30





12 Interest on belated payment on PP Cost 0.00



15 Less interest capitalised 27.71



17 Net Prior Period Debit/Credit -72.44

18 RoE 0.00

19 Provision for taxation 15.78

20

Funds towards Consumer Relations/Consumer

Education 0.00

21 Other Income 32.57

lix

ARR 2598.80

22

Incentives / penalties for performance on

distribution losses 7.53

Net ARR 2606.33

4.3.1 Gap in Revenue for FY15:

As against an approved ARR of Rs.2784.40 Crores, the Commission

after the Annual Performance Review of CESC decides to allow an

ARR of Rs.2606.33 Crores for FY15. Considering the revenue of

Rs.2629.23 Crores, a surplus of Rs.22.90 Crores is determined for the year

FY15.

The Commission decides to carry forward the surplus of Rs.22.90 Crores

of FY15 to the proposed ARR for FY17 as discussed in the subsequent

Chapter of this Order.

lx

CHAPTER – 5

ANNUAL REVENUE REQUIREMENT FOR FY17-19

5.0 Annual Revenue Requirement (ARR) for FY17-FY19 - CESC’s Filing:

CESC in its application dated 15th December, 2015, has sought

approval of ARR for FY17-19. The summary of the proposed ARR for

FY17-19 is as follows:

TABLE – 5.1

Proposed ARR for FY17-19

Amount in Rs.Crores

Sl.

No Particulars FY17 FY18 FY19

1 Energy @ Gen Bus in MU 7214 7725 8274

2 Transmission Losses in % 3.47% 3.37% 3.26%

3 Energy @ Interface in MU 6964 7465 8004

4 Distribution Losses in % 13.70% 13.60% 13.50%

Sales in MU

6 Sales to other than IP & BJ/KJ 3339.38 3595.54 3873.09

7 Sales to IP & BJ/KJ 2670.41 2854.01 3050.28

8 Total Sales 6009.79 6449.55 6923.37

Revenue at existing tariff in Rs Crs

9 Revenue from tariff and Misc Charges 1905.98 2098.74 2259.04

10 Tariff Subsidy 1259.24 1298.70 1388.16

11 Total Existing Revenue 3165.22 3397.44 3647.20


12 Power Purchase Cost 2540.19 2842.82 3088.63

13 Transmission charges of KPTCL 326.23 365.41 378.75

14 SLDC Charges 3.42 3.42 3.42

15


transmission 2869.84 3211.65 3470.80

16 Employee Cost 412.52 480.26 535.44

17 Repairs & Maintenance 47.28 53.38 60.42

18 Admin & General Expenses 49.38 55.75 63.10

19 Total O&M Expenses 509.18 589.39 658.96

20 Depreciation 102.29 136.91 170.37


21 Interest on Loans 190.31 239.55 288.95

22 Interest on Working capital 48.67 53.52 58.48

23 Interest on belated payment on PP Cost

24 Interest on consumer deposits 42.77 47.04 51.75

25 Other Interest & Finance charges 0.00 0.00 0.00

26 Less interest & other expenses capitalised 22.00 24.00 26.00

lxi

27 Total Interest & Finance charges 259.75 316.11 373.18

28 Other Debits 5.94 6.94 7.94

29 Net Prior Period Debit/Credit (8.00) 2.00 2.00

30 Return on Equity 0.00 0.00 0.00

31

Funds towards Consumer

Relations/Consumer Education 0.00 0.00 0.00

32 Other Income 40.77 42.81 44.95

33 ARR 3698.23 4220.19 4638.30

34 Deficit (533.01) (822.75) (991.10)

35 Surplus for FY15 carried forward 40.27

36 Regulatory asset (120.41)

Net ARR 3778.37 4220.19 4638.30

CESC has requested the Commission to approve the Annual Revenue

Requirement of Rs.3778.37 Crores for FY17, Rs.4220.19 Crores for FY18

and Rs.4638.30 Crores for FY19. Further, CESC has proposed increase in

retail supply tariff by 102 paise per unit in respect of all the categories

of consumers including BJ/KJ and IP set consumers for FY17, in order to

bridge the gap in revenue of Rs.613.15 Crores.

5.1 Annual Performance Review for FY15 & FY16:

As discussed in the preceding chapter of this Order, the Commission

has carried out the Annual Performance Review for FY15 based on the

audited accounts furnished by CESC. Accordingly, a surplus of Rs.22.90

Crores of FY15, is required to be carried forward in to the ARR of FY17.

As regards APR for FY16, the current financial year (i.e. FY16) is yet to be

completed. Hence, the Commission decides to take up the APR of

FY16 during the revision of ARR / Retail Tariff for FY18.

5.2 Annual Revenue Requirement for FY17-19:

5.2.1 Capital Investments for FY17-19:

In the application for approval of ARR for FY17-19, the CESC has

proposed capex of Rs.762 Crores, Rs.752 Crores and Rs.722 Crores for

FY17, FY18 and FY19 respectively. The scheme wise capital expenditure

proposed for the fourth control period and the necessity to take up

these works are as stated below:-

lxii

i. System improvements work: It is stated that, the CESC has taken

steps to improve the system parameters, reduce the breakdowns

and interruptions, balance the load on the system, provide

additional distribution transformers in towns and villages not

covered under R-APDRP, provide Link lines from newly established

MUSS, provide Express feeders from Stations, re-conductor the lines,

replace deteriorated Poles etc.

ii. High Voltage Distribution System (HVDS) :The CESC has stated that, it is

not implementing HVDS, but, other works in lieu of HVDS to reduce

the system loss are proposed to be taken up, such as shifting of

transformers to load centres.

iii. Unauthorized IP set works and Regular IP set works: It is stated that,

as per the directions of GoK all unauthorized IP sets (UNIP) are being

regularized. As at the end of November, 2015, 52,599 UNIP have

been regularized. The work of providing infrastructure to 10790

numbers of identified UNIP sets will have to be completed. Further,

infrastructure is to be provided to the new applicants.

iv. Niranthara Jyothi Project: It is stated that, the segregation of

agricultural loads from existing rural feeders, by drawing separate

11 kV feeders and to provide 24 hours power supply to the rural

areas, will reduce migration of rural population to town and cities,

improve the rural economy, reduce power supply interruptions,

improve the voltage etc.

v. RGGVY: The electrification of BPL households under RGGVY 12th

Plan of Mysuru and Mandya districts has already been awarded for

Rs.34.50 Crores and the work is expected to be completed by FY-

17.

vi. Integrated Power Development Scheme-IPDS: It is stated that, 33

towns are included under this scheme and the proposed project

lxiii

cost is Rs.170.00 Crores. As per the given guidelines of IPDS, the work

has to be awarded within one month from the date of approval

from GoI. Hence Budget provision has been made for Rs.170.00

Crores for FY-16 after which no further provision has been made in

the ensuing years.

vii. Replacement of failed Transformers: During FY-15, 10371 nos of

transformers of different capacities have failed. An expenditure of

Rs.62.00 Crores has been incurred for their replacement.

Considering the same figure for FY-16, a budget provision of

Rs.60.00 Crores has been made for FY17 and FY18. As a decrease in

the transformer failure rate is expected, a budget provision of Rs.50

Crores has been made for FY-19 to FY-21.

viii. Rural Electrification (General): The general IP set and Ganga

Kalyana IP sets are covered and tender has already been finalized

and work awarded to the extent of Rs.61.00 Crores.

ix. Metering programme: It is planned to replace about 2 lakh electro-

mechanical energy meters by static meters during each year of the

fourth control period for which an amount of Rs.40.00 Crores is

needed. The summary of the category wise proposed capex is as

follows:

TABLE – 5.2

Proposed capital investment by CESC for FY17 to FY19


Sl.

No 16-17 17-18 18-19

1 System Improvements works 250.00 350.00 350.00

a. HT

b. DTC

c. L.T

2 HVDS 5.00 5.00 15.00

3 N.J.Y 100.00 50.00 25.00

4 Replacement of Failed DTC 60.00 60.00 50.00

5 Service Connection 40.00 50.00 50.00

6 RGGVY (Restructured) +

DDG 10.00 0.00 0.00

7 R- APDRP (APDRP) 50.00 25.00 10.00

8 IPDS

9 DDUGJY 100.00 100.00 100.00

lxiv

10 Rural Electrification

65.00 50.00 50.00 a.

Electrification of

Hamlets/DB/JC

b. I.P. Set

c. BPL Households

11 TSP

3.00 3.00 3.00 a. Electrification of T. C

b. I. P. Set

c. BPL Households

12 SCP

10.00 10.00 10.00 a. Electrification of DB/JC

b. I. P. Set

c. BPL Households

13 Metering DTC, etc 60.00 40.00 50.00

14 T & P 4.00 4.00 4.00

15 Civil 5.00 5.00 5.00

Total 762.00 752.00 722.00

Commission’s Analysis and decision:

From the above table the Commission notes that, the CESC has

indicated a capex of Rs.60 Crores for FY17 & FY18 and Rs.50 Crores for

FY19 and onwards for replacement of failed transformers stating that

the failure rate is likely to come down from FY19 onwards. The CESC

should note that, the failed distribution transformers should be replaced

by repaired good transformers only and it should be charged to

revenue expenditure. In case, the failed transformer is to scrapped,

then only it can be replaced by a new transformer, which has to be

accounted under capex. It is also to be noted here that, the capex of

actual number of new transformers procured for replacement of failed

transformers during FY15 was very less as compared with the indicated

capex incurred. The CESC has agreed during the validation meeting

that, there is some discrepancy in accounting of expenditure by the

CESC. Hence, depending on scrap transformers the capex

requirement for replacement of failed transformers by new

transformers should be limited to Rs.5 Crores and the total capex

required shall be modified to Rs.707 Crores, Rs.697 Crores and Rs.677

Crores for FY17, FY18 and FY19 respectively.

lxv

In case of RGGVY (Restructured) and DDG works, the CESC has not

shown any capex requirement for FY 18 onwards and also not

indicated as to whether it is going to complete all the works within

FY18.

The CESC has been proposing a higher capex of more than, Rs.700

Crores in the recent past years, but has not achieved capital

expenditure of more than Rs.368 Crores (FY15), which is the highest in

the past four years from FY12 to FY15.

While projecting the capital expenditure for the control period, the

CESC should identify high loss feeders, high loss subdivision, division

and circles to specifically to reduce losses and to improve reliability of

distribution system. CESC should list out the lengthy 11 kV feeders with

huge loads and bifurcate them to reduce the loads and losses and

improve the reliability and quality of supply. It may be noted that, the

optimal distribution system loss should be less than 10%, even to

maintain the voltage regulations within the permissible limits of 9 % for

11kV system and 6% for LT distribution system. CESC should plan

towards bringing down the distribution system losses below 10% by the

end of plan period. CESC should list out high loss feeders for the year in

descending order and should chalk out a program to tackle high loss

feeders on priority to reap the benefit of loss reduction.

The CESC should have prepared a detailed perspective plan by

conducting 11kV feeder wise and DTC wise load flow studies

considering the present and projected loads on each feeder. This

would lead to least cost, techno-economically feasible improvement

methods for reducing distribution system energy losses to less than 10%

and improve the reliability of the system. CESC had submitted load

forecast, perspective plan and capex plan for which the Commission

has suggested improvements. Further, CESC should plan its capex

using the “capital expenditure guidelines for ESCOMs” issued by the

Commission.

lxvi

The CESC should have considered its system strengthening works for

the period from FY17 to FY21, to reflect result in loss reduction and

improvement of reliability by conducting Techno-economic analysis.

The CESC should take up system improvement works such as:

a) Reactive power compensation to improve the PF to 0.9-0.95 lag.

b) Reconfiguration of distribution lines.

c) Replacement of conductors by higher size, wherever required.

d) Drawing express feeders to bifurcate the loads of lengthy feeders.

e) Establishing new 33kV substations and proposing for Establishment

of new transmission voltage substations by KPTCL.

f) Installing additional DTCs and shifting DTCs to load centers to

reduce the LT line lengths.

Based on the above discussion, the Commission decides to recognize

the capex of Rs.707 Crores, Rs.697 Crores and Rs.677 Crores for FY17,

FY18 and FY19 respectively after deducting the capex towards

replacement of failed transformers. However, the Commission decides

to consider Rs.562 Crores, Rs.552 Crores and Rs.522 Crores for FY17,

FY18 and FY19 respectively for tariff computations, subject to prudence

check for the purpose of ARR and directs the CESC to approach the

Commission for in principle approval, in case, it require any additional

capex during the financial year.

5.2.2 Sales Forecast for FY17-19:

I) Category wise estimation of number of installations and sales by

CESC for the control period FY17-19:

1) As per the sales forecast filed by the CESC, for the control period

FY17 to FY19, it is indicated that the forecast has been done on an

half-yearly basis, applying different growth rates for the first half and

second half of the year, for each of the categories. The CESC has

lxvii

stated that, it has worked out the average growth in the previous

three years, as also 3 year and 5 year CAGR for this purpose.

The Commission is of the view that for the purpose of estimating the

Annual Revenue Requirement, it would be adequate if the number

of installations and sales are estimated on an annual basis. Further,

to capture monthly or seasonal variations, stochastic time series

models like Auto regression [AR], and Auto regression Moving

Average [ARMA] etc., models need to be used, as CAGR method

does not capture the underlying pattern. Since for the purpose of

tariff annual sales is sufficient capturing of monthly or seasonal

variations is not required.

The CESC has also stated that it has compared the projections with

respect to 18th EPS, PRDCL report and Feedback Venture and has

not considered the above projections stating that the projections

made in the above reports for FY14 and FY15 were way off the

mark. The CESC has furnished the comparative statement of the

above projections for the period FY16 to FY19, in its replies to the

preliminary observations which is indicated below:

Source of Estimation FY16 FY17 FY18 FY19

18th EPS 6448 6952 7437 7931

PRDC Scn-1 6090 6531 7003 7513

PRDC Scn-2 6169 6639 7146 7696

PRDC Scn-3 6175 6710 7283 7827

Feedback Ventures Scn-1 6513 6936 7391 7881



The CESC has stated that, the above estimates are for the

unrestricted power supply and as supply is restricted to various

categories of consumers, as per the GoK orders dated 22.01.2014

and 31.05.2013, and therefore the CESC has not considered the

same.

lxviii

2) The Commission’s preliminary observations and the queries raised

during the validation process in respect of sales forecast, for the

control period and the replies furnished by the CESC, are discussed

in the following paragraphs:

i) LT(1) – BJ/KJ category:

The Commission in its preliminary observations had observed that no

additions to the number of installations were proposed during the

control period even though 657 installations were added in FY15 and

that even- though the number of installations is retained at the same

level for the control period, increase in sales is proposed. The issue was

again raised during the validation process, as the CESC had proposed

CAPEX of Rs.34.50 Crores for electrification of BPL households under

12th plan in Mysuru and Mandya districts under RGGVY.

The CESC in their replies to preliminary observations have stated that,

at present there are no additions to this category. Further, in their

replies to the queries raised during validation meeting, the CESC has

replied that, it would abide by the directions of the Commission in the

matter and has not furnished any data. Regarding the increase in

sales, the CESC has stated that, the specific consumption has been

increased due to addition of 657 installations in FY15.

The Commission is of the view that, sales to BJ/KJ for FY15 includes the

above 657 installations also. Hence, the Commission has considered

the actual specific consumption of FY-15 for estimating the sales to this

category. Regarding the number of BJ/KJ installations, the CESC has

not furnished any additional data. Hence, the Commission has

considered the number of installations as proposed by the CESC for the

control period.

ii) Other Categories excluding IP Sets:

lxix

a) Regarding the considerable increase in LT-6 street lights’

consumption, in FY-15, CESC has replied that the same is due to

increase in specific consumption and the number of installations.

The Commission notes that, the reply furnished is factually correct

based on data furnished, as the specific consumption has increased

from 342 units/installation per month in FY11 to 394 units/installation

per month in FY15.

b) Regarding reduction in sales to HT-2(b) category in FY15, the CESC

has stated that the same is due to shifting of 23 installations to HT-2c

category.

The Commission notes that the impact of shifting of installations to HT-

2c category is 12.94 MU in FY-15 as per the details furnished in the

replies, which only partly accounts for reduction in sales to this

category.

c) Regarding reduction in sales to HT-4 category, the CESC has stated

that the same is due to reduction in the number of installations to 17

in FY15 from 28 in FY14.

The Commission notes that as per the information furnished by the

CESC 10 installations have been shifted HT-2c category and the

impact of shifting is 3.60 MU in FY-15.

d) Regarding the lower sales growth rate considered for LT5, CESC has

replied that during the first half of FY15 it was negative and during

the second half it was only 1.06 %.

The Commission has noted the replies furnished by CESC.

lxx

e) Regarding the higher sales growth rate considered for HT2 (a)

andHT2 (b), CESC has stated that it has considered higher of the

first half and second half 5-year CAGR.

The Commission is of the view that, for the purpose of the estimating

the Annual Revenue Requirement, it would be adequate to

forecast the number of installations and sales, on annual basis.

f) The Commission had observed that the impact of implementation

of NJY on category wise sales in rural areas also need to be

analyzed and accordingly accounted in the sales forecast for the

control period. The CESC has replied that, sales forecast in respect

of LT-2a, has been made considering the impact of NJY.

The Commission notes that the CESC has stated in its application

that, it has estimated sales to LT-2 category considering the first half

and second half5-year CAGR and has not indicated the impact of

NJY scheme on sales, separately.

g) Regarding the estimation of number of installations, the Commission

had observed that the growth rate considered for LT2 (b), LT3, HT3

and HT4 categories were higher and for LT6 street light and LT7 were

lower as compared to the normal growth rates. The CESC has not

furnished any replies regarding the above observations.

II. Commission’s approach for estimating the number of installations and

sales for Control Period FY17-19

The Commission has issued the KERC (Load Forecast) Regulations, 2009

which specify that the Commission shall normally adopt the forecast as per

EPS and can deviate from the EPS while approving ERCs or PPAs by passing

orders after duly giving opportunity to the stakeholders.

For the present control period FY17 to FY19, the filing done by ESCOMs

indicates that sales forecast is not in tune with the 18th EPS. The tariff

lxxi

petition filed by the ESCOMs which includes the sales estimates and

power purchase quantum has been made public and the

stakeholders have been heard in the matter. After considering the

views expressed by the stakeholders, the Commission has decided to

adopt the methodology specified in the following paragraphs which is

different from the CEA’s approach for the reasons stated below:

a. The State of Karnataka is under peak and energy shortages

situation and the supply of electricity is determined by the present

restricted availability of generation capacity. The last three years

data of energy at the generation bus is shown below, justifies the

above stand:

lxxii

Year

18th EPS-

Generation

MU

Actual supplied

MU

2013 58513 57046

2014 63001 57725

2015 67833 59969

From the above Table, it is seen that the actual growth rate is

different from those estimated by in the 18th EPS, by the CEA.

b. The loss levels considered by the Commission are as per the loss

reduction trajectory fixed by the Commission for the respective

control periods. Hence the loss levels as adopted by the CEA are

not relevant for the purpose of the approval of ARR and Tariff.

In view of the above, the Commission has considered the business as

usual scenario and the methodology adopted by the Commission to

estimate the number of installations and sales to categories other than

BJ/KJ and IP sets is discussed below:

1) No. of Installations:

While estimating the number of installations (Excluding BJ/KJ and IP),

the following approach is adopted:

a. The base year number of installations for FY16 is modified duly

validating the revised estimate furnished by the CESC in the current

filing and data available as on 30.11.2015. Accordingly the base

year estimation have been revised which has an impact on the

estimates on number of installations and sales for the control

period.

b. Wherever the number of installations estimated by the CESC for the

control period is within the range of the estimates based on the

lxxiii

CAGR for the period FY10 – FY15 and for the period FY12 - FY15, the

estimates of CESC are retained.

c. Wherever the number of installations estimated by the CESC for the

control period is lower than the estimates based on the CAGRs for

the period FY10 – FY15 and for the period FY12 - FY15, the estimate

based on the lower of the CAGRs for the period FY10 – FY15 and for

the period FY12 - FY15 are considered.

d. Wherever the number of installations estimated by the CESC for the

control period is higher than the estimates based on the CAGRs for

the period FY10 – FY15 and for the period FY12 - FY15, the estimates

based on the higher of the CAGRs for the period FY10 – FY15 and

for the period FY12 - FY15 are considered.

e. For LT 4b and 4c, LT6 water supply, LT-7, HT-2(c), HT-4 and HT-5

categories, the estimates of the CESC are retained as there is no

specific growth pattern in these categories.

Based on the above approach, the total number of installations

(excluding BJ/KJ and IP installations) estimated by the Commission

for the control period is indicated in the table below:

Figures in

Nos.

FY17 FY18

FY19

Filed Approved Filed Approved Filed

Approved

2235199 2228978 2328386 2312562 2425797

2399556

2) Energy Sales:

i) For categories other than BJ/KJ and IP sets, generally the sales are

being estimated considering the following approach:

lxxiv

a. The base year sales for FY16 as estimated by the CESC are

validated duly considering the actual sales up to November,

2015 and modified suitably.

b. Wherever the sales estimated by the CESC for the control period

is within the range of the estimates based on the CAGR for the

period FY10 – FY15 and for the period FY12 - FY15, the estimates

of the CESC are retained.

c. Wherever the sales estimated by the CESC for the control period

is lower than the estimates based on the CAGRs for the period

FY10 – FY15 and for the period FY12- FY15, the estimates based

on the lower of the CAGRs for the period FY10 – FY15 and for the

period FY12 - FY15 are considered.

d. Wherever sales estimated by the CESC is higher than the

estimates based on the CAGRs for the period FY10 – FY15 and

for the period FY12 - FY15, the estimates based on the higher of

the CAGRs for the period FY10 – FY15 and for the period FY12 -

FY15 are considered.

e. For LT 4b and 4c, LT6 water supply, LT-7, HT-2(c), HT-4 and HT-5

categories, the estimates of CESC are retained as there is no

specific growth pattern in these categories.

f. For HT-2a, HT-2(b) and HT-4, based on the information furnished

by the CESC regarding the number of installations shifted to HT-

2(c) category and the energy sold under open access, the

Commission has worked out the sales, duly factoring the impact

of the above. However, the above approach has not been

adopted, as sales estimation based on CAGR was more

reasonable.

Based on the above approach, the sales (excluding BJ/KJ and IP

sales) estimated by the Commission for the control period is

indicated in the table below:

lxxv

Figures in MU

FY17 FY18

FY19

Filed Approved Filed Approved Filed

Approved

3339.39 3306.72 3595.55 3565.09 3873.11

3845.49

ii) Sales to BJ/KJ :

The break-up of sales to BJ/KJ installations as filed in the APR by CESC

for FY-15 is as indicated below:

Particulars No. of

Installations

Consumption in

MU

Specific

consumption per

installation per

month (kWh)

Installations consuming less

than or equal to18 units

355844 34.54 8.09

Installations consuming

more than 18 units and

billed under LT2(a)

141625 55.79 32.83

Considering the above specific consumption the sales approved for

the control period for BJ/KJ is as indicated below:

MU

Particulars FY17 FY18 FY19

Installations

consuming less than

or equal to18 units

37.72 37.72 37.72

Installations

consuming more than

18 units and billed

43.10 43.10 43.10

lxxvi

under LT2(a)

Note: For the control period 1,09,432 number of installations considered for BJ/KJ installations

consuming more than 18 units, as year-end figure of 109284 proposed by CESC is less than

the number of installations as is existing on 30.11.2015. Further, for BJ/KJ installations

consuming less than or equal to18 units, 388496 installations considered as proposed by

CESC.

iii) IP set sales projections for ARR FY 17-19

In its Tariff Order dated 6th May, 2013, the Commission had approved

the specific consumption of IP sets as 8,195 units/ installation/annum for

the entire control period of the FY14 to the FY16 by considering the

existence of unauthorized IP sets in the distribution system. The CESC

has reported the total sales of 2,294.33 MU against 3,00,070 numbers of

IP set installations serviced, which translates into a specific

consumption of 7,843 units / installation / annum for the FY15. It is

observed that the actual specific consumption achieved by the CESC,

for the FY15 is less than the approved figure of 8,195 units / installation /

annum by 352 units /installation/annum. The approved sales quantity

for the FY15 was 2,415.79 MU. This indicates that there is a decrease in

sales to an extent of 121.46 MU as compared to the approved

quantum for the FY15.

It is noted that the CESC has achieved a specific consumption of 7,843

units/installation/annum on the basis of consumption reported for the

FY15. As discussed above, the CESC has also considered the meter

readings of agricultural feeders segregated under NJY for arriving at

the total IP set consumption for the FY15. Hence, it is relevant to

consider the specific consumption of 7,843 units/installation/annum for

the FY17 to the FY19 also. In view of this, the Commission decides to

approve the specific consumption of 7,843 units / installation / annum

for the FY17 to the FY19.

The Commission notes that the CESC has projected the number of IP

set installations as 3,45,526, 3,69,402 and 3,94,929 for tFY17, FY18 and

FY19 in the present Tariff filing. In view of this, the Commission has

lxxvii

considered the number of IP sets furnished by the CESC for the FY17 to

the FY19 without any modifications. Hence, based on the estimated

number of installations for FY17 to FY19, the mid-year number of

installations is computed and the sales to IP set consumers are

estimated as below:

Particulars As filed by the CESC As approved by the

Commission

FY16 FY17 FY18 FY19 FY17 FY18 FY19

No of installations 3,23,193 3,45,526 3,69,402 3,94,929 3,45,526 3,69,402 3,94,929

Mid-Year no of

installations

3,34,360 3,57,464 3,82,166 3,34,360 3,57,464 3,82,166

Specific consumption in

units/installation/annum

7,871 7,871 7,871 7,843 7,843 7,843

Sales in MU 2,631.81 2,813.67 3,008.10 2,622.39 2,803.59 2,997.33

Accordingly, the Commission approves 2,622.39 MU, 2,803.59 MU and

2,997.33 MU as energy sales to IP sets as against the CESC’s sales

projections of 2,631.81MU, 2,813.67 MU and 3,008.10 MU respectively for

FY17, FY18 and FY19. Further, any variation in sales in the FY17 would

be trued up during the Annual Performance Review for the FY17 based

on the energy consumption in respect of agricultural feeders

segregated under NJY.

The above approved IP set consumption is with the assumption that the

Government of Karnataka would release full subsidy to cover the

approved quantum. However, if there is any variation in the subsidy

allocation by the GoK, the quantum of power to be supplied to IP sets

of 10 HP and below shall be proportionately regulated. The payment of

subsidy by the GoK on supply to IP sets is detailed in Chapter 6 of this

Order.

The Commission reiterates that, the CESC shall report the total IP set

consumption on the basis of data from energy meters in respect of

agricultural feeders segregated under NJY, to the Commission every

month, regularly duly deducting the actual distribution system losses in

11 KV lines, distribution transformers and LT lines, calculated as per the

methodology approved by the Commission.

lxxviii

Further, the CESC is directed to adhere to the duration of power supply

stipulated by the Government in respect of arranging power supply to

exclusive agricultural feeders. The Commission also directs the CESC to

take up enumeration of IP sets in its jurisdiction in order to identify

number of defunct/dried up wells and un-authorized IP sets in the field

and take necessary action to arrive at correct number of IP sets in its

account on the basis of enumeration report. The compliance

regarding the same shall be submitted to the Commission within six

months from the date of issue of this order.

Based on the above discussions, the category wise approved number

of installations for the control period vis-à-vis the estimates made by

CESC are indicated below:

lxxix

TABLE – 5.3

Category wise approved number of installations

Category

FY-17 FY-18 FY-19

CESC’s

estimate

Approved CESC’s

estimate

Approved CESC’s

estimate

Approved

No. No. No. No. No. No.

LT-2a* 1879570 1874976 1951799 1940208 2026975 2007850

LT-2b 3021 3057 3210 3222 3409 3395

LT-3 227419 225234 241225 236611 255868 248562

LT-4 (b) 230 230 247 247 264 264

LT-4 (c) 6629 6629 7087 7087 7578 7578

LT-5 38609 38833 40370 40353 42211 41932

LT-6 24002 24002 25661 25661 27435 27435

LT-6 20293 20593 20754 21146 21226 21715

LT-7 33490 33490 35992 35992 38681 38681

HT-1 147 145 167 167 189 192

HT-2 (a) 885 891 925 927 966 966

HT-2 (b) 563 563 588 587 613 612

HT2C 214 214 223 223 232 232

HT-3(a)& (b) 98 93 107 101 117 109

HT-4 20 20 21 21 22 22

HT-5 9 9 10 10 11 11

Sub-Total

other than BJ/KJ and IP sets

Other than BJ/KJ & IP

2235199 2228978 2328386 2312562 2425797 2399556

BJ/KJ 388496 388496 388496 388496 388496 388496

IP 345526 345526 369402 369402 394929 394929

Sub Total

BJ/KJ and IP sets

734022 734022 757898 757898 783425 783425

Total 2969221 2963000 3086284 3070460 3209222 3182981

*Includes BJ/KJ consuming more than 18 units/installation/month

Accordingly, the category wise approved sales for the control period

vis-à-vis the estimates made by CESC, are indicated below:

TABLE – 5.4

Category wise approved Energy Sales

Category

FY-17 FY-18 FY-19

CESC’s

estimate

Approved CESC’s

estimate

Approved CESC’s

estimate

Approved

MU MU MU MU MU MU

LT-2a* 1038.01 1001.92 1117.49 1077.28 1203.11 1158.55

LT-2b 8.76 8.72 9.62 9.51 10.56 10.37

LT-3 288.14 286.98 313.75 315.31 341.65 346.44

LT-4 (b) 1.24 1.24 1.38 1.38 1.54 1.54

LT-4 (c) 10.96 10.96 11.29 11.29 11.63 11.63

lxxx

LT-5 142.69 141.96 146.28 146.64 149.96 151.47

LT-6 WS 153.88 153.88 158.63 158.63 163.51 163.51

LT-6 SL 101.33 100.24 107.01 104.14 113.03 108.20

LT-7 13.55 13.55 14.68 14.68 15.89 15.89

HT-1 473.96 473.96 515.86 520.38 561.62 571.35

HT-2 (a) 837.72 837.72 903.59 901.86 974.67 970.90

HT-2 (b) 122.42 118.50 133.03 130.92 144.58 144.64

HT2C 44.62 44.62 46.48 46.48 48.42 48.42

HT-3(a)& (b) 92.17 102.53 106.00 116.13 121.90 131.54

HT-4 5.16 5.16 5.21 5.21 5.26 5.26

HT-5 4.78 4.78 5.25 5.25 5.78 5.78

Sub-Total

other than BJ/KJ and IP sets

Other than BJ/KJ & IP

3339.39 3306.72 3595.55 3565.09 3873.11 3845.49

BJ/KJ 38.60 37.72 40.34 37.72 42.18 37.72

IP sets 2631.81 2622.39 2813.67 2803.59 3008.10 2997.33

Sub Total

BJ/KJ and IP sets

2670.41 2660.11 2854.01 2841.31 3050.28 3035.05

Total 6009.80 5966.83 6449.56 6406.40 6923.39 6880.54

*Includes BJ/KJ consuming more than 18 units/installation

5.2.3 Distribution Losses for FY17-19:


CESC in its application has reported distribution losses of 13.88% for

FY15 as against an approved loss level of 15.00%. The Commission in its

Tariff Order dated 2nd March, 2015 had fixed the target level of losses

for FY16 at 14.50%. CESC in its filing has proposed to achieve the

following loss levels during FY17-19:

TABLE – 5.5

Projected Distribution Losses-FY17-19 – CESC’s Submission

Figures in % Losses


Projected

Distribution losses

13.70 13.60 13.50

lxxxi

Commission’s Analysis and Decisions:

The performance of CESC in achieving the loss targets set by the

Commission in the past five years is as follows:

TABLE – 5.6

Approved & Actual Distribution Losses-FY11 to FY16

Figures in % Losses

Particulars FY11 FY12 FY13 FY14 FY15 FY16

Approved Distribution

losses

15.50 15.24 15.00 15.50 15.00 14.50

Actual distribution

losses

16.42 16.20 15.07 14.73 13.88 -

The Commission notes that the loss reduction achieved by CESC in the

control period FY11-13 was 2.28 percentage point. In the preceding

years of FY14 & FY15, the loss reduction has been 1.19 percentage

point (in two years of the control period FY14-16). Overall in the past

five years CESC has been able to achieve distribution loss reduction of

3.47 percentage point.

The distribution loss projections indicated by the CESC shows reduction

from existing levels of 13.88% in FY15 to 13.70% in FY17 and further

reduction 0.10 percentage point for each of the year FY18 and FY19.

It is observed that, the Commission has been allowing capital

expenditure as incurred by the CESC and has also allowed the capex

as proposed for the ensuing control period. The majority of the capex

like HVDS, E&I works, NJY, DTC metering, RAPDRP should enable CESC

not only to strengthen its infrastructure but also reduce the distribution

losses.

The loss reduction proposed by CESC is meager as compared to

present actual loss levels. Hence, the Commission, during the

validation meeting stressed upon the need to further reduce the

lxxxii

distribution loss levels proposed by CESC for the control period FY17-19

duly considering the past and the present capex, to which CESC

agreed with the suggestions of the Commission.

Thus by considering the present loss levels and the investments made

during the past/ proposed for the ensuing control period, the

Commission decides to fix the following distribution loss targets for FY17-

19:

TABLE – 5.7

Approved Distribution Losses for FY17-19

Figures in % Losses


Upper limit 13.50 13.25 13.00

Average 13.25 13.00 12.75

Lower limit 13.00 12.75 12.50

5.2.4 Power Purchase for FY17-19:

The ESCOMs in their filings, have submitted the D1- statement where in

the requirement of power purchase for the control period has been

furnished. The consolidated statement showing the energy

requirement of the State year-wise is shown hereunder:

TABLE – 5.8

Consolidated requirement of electricity as filed by ESCOMs

Distribution Utilities Energy

(MU)

Energy

(MU)

Energy

(MU)

FY17 FY18 FY19

BESCOM 32907.24 34674.06 36540.95

MESCOM 5589.96 5904.27 6236.49

CESC 7214.18 7725.09 8274.48

HESCOM 13738.00 13942.08 14849.40

GESCOM 8559.14 8902.63 9292.18

HRECS 322.87 350.14 372.61

lxxxiii

AQUEOS 12.98 17.78 22.46

MSEZ 80.49 89.33 113.06

TOTAL 68424.40 72168.78 76161.08

CESC’s submission:

The CESC has submitted its power purchase requirement for the control

period FY17 to FY19 based on the projected sales as follows:

As filed by CESC

Particulars FY 17 FY18 FY19

Sales (MU) 6010.00 6450.00 6923.00

Distribution losses (%) 13.70 13.60 13.50

Energy at IF point (MU) 6964.08 7465.28 8003.47

Transmission Losses (%) 3.47 3.37 3.27

Energy Required to meet the

sales of MESCOM (MU) 7214.42 7725.63 8274.03


The validation of sales and allowable distribution losses, has been

discussed in the previous section of this chapter. Based on the

approved sales and the allowable distribution losses, the requirement

of Power for the CESC, for the control period FY17 to FY19, is worked

out as detailed below:

Power Purchase requirement of CESC as approved

for the control period FY17 to FY19

Particulars FY 17 FY18 FY19

Sales (MU) 5966.83 6406.40 6880.54

Distribution losses (%) 13.25 13.00 12.75

Energy at IF point (MU) 6878.19 7363.68 7886.01

Transmission Losses (%) 3.47 3.37 3.27

Energy Required to meet

the sales of CESC(MU) 7125.44 7620.49 8152.60

lxxxiv

5.2.5. Sources of Power;

CESC’s submission;

In its filings the CESC has submitted that, the sources of power

considered to meet the requirement of power for the control period

FY17 to FY19 is the allocation of energy from each sources specified by

the Government of Karnataka

Commission’s analysis and decisions

The energy requirement of the ESCOMs, including CESC is being met

by Karnataka Power Corporation Limited (KPCL) Generating stations,

Central Generating Stations (CGS), Major Independent Power

producers (IPPs) and Minor Independent Power producers (NCE

sources) through long-term power purchase agreements. The

contingent requirement to meet the deficit is being met through

purchases from Short/Medium term sources by calling for bids and also

purchases from the Power Exchange. Hence, to arrive at the available

energy and power for the control period FY17 to FY19, the Commission

has considered the availability as furnished by KPCL and by

SRPC/CERC/CEA for CGS, in respect of their respective Generating

Stations. The availability of CGS stations is based on the share of

Karnataka, as notified from time to time.

In the case of Minor IPPs (NCE/RE sources), the actual generation

capacity contracted by the ESCOMs, as indicated in D-1 format has

been considered. The availability from the other sources such as Jurala

Hydel Station and TB dam Power Stations of Telangana State are taken

at 50% and 20 % of their installed capacity respectively as the share of

Karnataka, as per the contracts executed with these generators.

Further, as the Short Term Power/Medium Term Power procurement to

an extent of around 1108.80 MU has already been contracted by

lxxxv

ESCOMs till May, 2016, the same has been considered towards

availability for FY17.

The availability as furnished by the KPCL in respect of Yeramarus Unit-1

& Unit-2 and Yelahanka Combined Cycle Power Plant (YCCPP), having

a capacity of 1600 MW and 350 MW respectively, has not been

considered, as the said generating stations are yet to be synchronized

with the grid and the CoD is yet to be declared. Similarly, Kudgi Unit1,

Unit2 and Unit3, having a total capacity of 2400 MW, are not

considered since they are yet to be synchronized with the grid and

CoD is yet to be declared.

The availability of BTPS unit 3 has been considered since it has been

synchronized and supplying power to the grid. As its commissioning

date and Commercial operation date of is yet to be declared by the

KPCL, the quantum of energy is restricted to the requirement of

ESCOMs and allowed fuel expenses in FY17. For FY18 and FY19, the

availability of energy from this unit has been considered, as furnished

by the KPCL, duly limiting the quantum of energy as per the

requirement of ESCOMs, to meet the sales targets.

Based on the above availability criteria, the energy allowed for the

State to achieve the sales target of the respective years, is given in the

following Table.

TABLE – 5.9

Source-wise power purchase of ESCOMs for the

CONTROL PERIOD FY17 TO FY19

SOURCES

FINANCIAL YEAR 2016-17 FINANCIAL YEAR 2017-18 FINANCIAL YEAR 2018-19

Energy

in MU

Cost in Rs

Cr

Per unit

Cost

Energy in

MU

Cost in Rs

Cr

Per unit

Cost

Energy in

MU

Cost in Rs

Cr

Per

unit

Cost

in Rs.

KPCL Hydel

Energy 10704.90 1001.38 0.94 12045.33 1099.16 0.91 12045.33 1139.37 0.95

KPCL Thermal

Energy 17646.77 7252.08 4.11 19323.50 8392.29 4.34 20992.89 9198.23 4.38

CGS Energy 21525.17 6980.84 3.24 21525.17 7082.24 3.29 21525.17 7184.17 3.34

UPCL 7462.68 3093.67 4.15 7462.68 3129.03 4.19 7462.68 3165.10 4.24

Renewable 6846.71 2790.38 4.08 8394.81 3413.83 4.07 10265.57 4452.20 4.34

lxxxvi

Energy:

Other State

Hydel 144.08 67.73 4.70 144.08 71.64 4.97 144.08 75.78 5.26

Short Term 1108.80 558.84 5.04 0.00 0.00 0.00 0.00

PGCIL &

POSOCO

Charges - 949.21 0.44 958.70 0.45 968.29 0.45

KPTCL

Transmission

& SLDC and

PGCIL

POSOCO

Charges - 3112.76 0.48 3197.08 0.47 3500.45 0.50

TOTAL 65439.11 25806.89 3.94 68895.57 27343.97 3.97 72435.72 29683.58 4.10

5.2.6 CESC’s Power Purchase Cost & Transmission Charges:

CESC’s Submission

The CESC has submitted the Power Purchase requirement along with

the cost including the transmission charges and SLDC charges, in D-1

format. The CESC has sought approval of the Commission for purchase

of power to en extent of 7214.42MU, 7725.09 MU and 8274.08 MU at a

cost of Rs.2870.20 Crores, Rs.3211.65 Crores and Rs.3470.80 Crores for

FY17, FY18 and FY19 respectively.

As regards the cost of power, the CESC has submitted that, same is

considered as per the norms defined in contracts (PPAs)/ Regulations

and based on the tariff indicated by KPCL for its Stations and the tariff

determined by the CERC in respect of Central Generating Stations,

DVC Stations, and UPCL stations. Further, it is submitted that, the

average cost without escalation, paid towards the supply of NCE

during FY15 has been considered, to arrive at the cost of NCE for the

control period FY 17 to FY19.

Commission’s analysis and decisions

After a detailed analysis of the tariff rates claimed by the CESC, the

Commission has arrived at the power purchase cost to be allowed in

the ARR for the control period.

lxxxvii

The basis for computation of power purchase cost for the control

period FY17 to FY19 is as indicated below:

The fixed charges and variable charges of RTPS Unit 1 to 7, BTPS unit 1

and the Hydel Generating Stations exclusive of Muinirabad, MGHE,

Shiva & Shimsha, are reckoned based on the respective PPAs

approved by the Commission.

The fixed charges and variable charges of Muinirabad, MGHE, Shiva &

Shimsha hydel Stations, BTPS Unit 2 and RTPS unit 8, have been

computed based on the tariffs determined by the Commission and the

Commission’s norms approved in the PPAs.

The fixed charges and variable charges for the Central Generating

Stations, UPCL Station and the Stations of DVC are reckoned based on

the tariffs determined by the CERC and the CERC norms.

The variable charges of all the thermal stations including CGS stations

are reckoned based on the recent landed cost of fuel and other

variable components.

The variations, if any, in these allowed costs, will be considered during

the FAC exercise / Annual Performance Review of FY17.

Based on the allowed requirement of energy and the power allocation

given by the Government of Karnataka, the Power Purchase quantum

and its costs are approved in the ARR of CESC for the control period

FY17 to FY19, as shown in Annexure – 1 & 2.

The consolidated power purchase cost allowed by the Commission vis-

a-vis the power purchase cost as filed by the CESC for the control

period FY17 to FY19 is shown following:

TABLE – 5.10

Approved Power Purchase Cost of CESC for FY17

lxxxviii

Source of Power

Power Purchase Cost as filed by

CESC

Power Purchase Cost approved

by the Commission

Energy in

MU

Cost in

Rs Cr

Per Unit

cost in Rs

Energy in

MU

Cost in

Rs Cr

Per Unit

cost in Rs

KPCL Hydel Energy 1349.93 85.26 0.632 1673.73 134.326 0.803

KPCL Thermal Energy 2054.41 936.18 4.557 1459.99 609.794 4.177

CGS Energy 1977.02 692.47 3.503 2379.19 771.597 3.243

UPCL 977.99 375.02 3.835 824.85 341.945 4.146

Renewable Energy 649.19 251.05 3.867 649.19 244.838 3.771

Others 17.89 7.42 4.148 15.93 7.486 4.701

Short Term 187.75 95.37 5.080 122.556 61.769 5.040

PGCIL & POSOCO Charges 96.76 104.916 0.441

KPTCL Transmission and SLDC

& PGCIL POSOCO Charges 330.49 0.458 346.840 0.487

TOTAL 7214.180 2870.020 3.978304 7125.444 2623.512 3.68189

TABLE – 5.11


Source of Power

Power Purchase Cost as filed

by CESC

Power Purchase Cost

approved by the Commission

Energy

in MU

Cost in

Rs Cr

Per Unit

cost in

Rs

Energy

in MU

Cost in

Rs Cr

Per Unit

cost in

Rs



CGS Energy 2246.60 835.48 3.719 2438.368 802.275 3.290

UPCL 731.72 324.12 4.430 845.371 354.456 4.193


Others -74.33 -28.70 3.861 16.322 8.115 4.972

PGCIL & POSOCO Charges 125.31 0.558 108.601 0.445

KPTCL Transmission & SLDC

and PGCIL) POSOCO

Charges 369.67 0.479 334.940 0.440

TOTAL 7725.090 3211.650 4.157 7620.489 2986.75 3.919

TABLE – 5.12


lxxxix

Source of Power

Power Purchase Cost as filed

by CESC

Power Purchase Cost

approved by the Commission

Energy

in MU

Cost in

Rs Cr

Per Unit

cost in

Rs

Energy

in MU

Cost in

Rs Cr

Per Unit

cost in

Rs



CGS Energy 2465.18 921.65 3.739 2505.845 836.343 3.338

UPCL 731.72 327.40 4.474 868.765 368.463 4.241


Others 108.37 40.01 16.070 16.773 8.821 5.259

PGCIL & POSOCO Charges 143.48 0.582 112.723 0.450

KPTCL Transmission and SLDC

& PGCIL POSOCO Charges 383.01 0.463 380.850 0.467

TOTAL 8274.48 3470.80 4.195 8152.596 3287.897 4.032945

The CESC shall regulate the quantum and cost of power as allowed by

the Commission.

However, since the power purchase costs are uncontrollable as per

MYT Regulations, any excess quantum or cost will be trued up in

Annual Performance Review of the respective years.

The Commission has fixed a ceiling rate of Rs.4.50 per unit for short-term

procurement and the same is retained for the year FY17.

The Commission notes that, the procurement of power under short term

has come down significantly over the years. With a view to reduce the

cost of power procurement by avoiding purchase of high cost energy,

the Commission reiterates its earlier directive that any short-term/

contingent power procurement over and above the approved rate

Rs.4.50 per Kwh, shall be made by the ESCOMs only with the prior

approval of the Commission.

The Commission also reiterates that any short-term or medium-term

power purchase to be made over and above the approved

xc

quantities, shall be procured only through competitive bidding, duly

complying with the GoI guidelines, issued in the matter from time to

time.

5.2.7 Renewable Purchase Obligation (RPO) target for FY17:

a. Non-Solar RPO:

CESC has submitted that it will only be able to achieve non-solar RPO

of 8.48% as against target of 11% specified by the Commission vide its

(Procurement of Energy from Renewable Sources)(Third Amendment)

Regulations, 2015 for FY17. CESC has proposed to meet the remaining

RPO target of 181.85 MUs for FY17 by purchasing RECs at the rate of

Rs.3.30 per unit. Thus, the total cost of non-solar RECs to be purchased

to meet the RPO for FY17 is Rs.60.01Crores.

The Commission has approved power purchase quantum of 7125.44

MU for FY17. The Non-solar RPO target at 11% would be 783.80MU. The

Commission has approved purchase of 810.65 MU from non-solar RE

sources. Thus, CESC would be able to meet its non-solar RPO target.

Therefore, the need for purchasing RECs may not arise.

In case, there is any need to buy RECs to meet the RPO, the cost

thereon would be factored in the APR of FY17.

b. Solar RPO

As regards solar RPO compliance, CESC has submitted that it will be

able to achieve solar RPO of 0.94% as against the specified target of

0.75% .

The Commission has approved power purchase quantum of

7125.44MU for FY17. The Solar RPO target would be 53.44MU. The

Commission has approved purchase of 104.43 MU of Solar energy.

Thus, CESC would be able to meet its non-solar RPO target. Therefore,

the need for purchasing RECs may not arise.

In case, there is any need to buy RECs to meet the RPO, the cost

thereon would be factored in the APR of FY17.

xci

5.2.8 O & M Expenses for FY17-19:

CESC’s Proposal:

The CESC in its application has requested the Commission to consider

the projected O&M expenses based on:

i. Weighted inflation index of CPI and WPI at 8.84%, 9.29% and 9.75%

for FY17, FY18 & FY19 respectively

ii. Consumer growth index at 4.05%, 4.10% and 3.94% for FY17, FY18 &

FY19 respectively.

iii. Efficiency factor of 0.50% for the control period.

Considering these indices, CESC has projected the R& M expenses,

A&G expenses and employee cost for the control period as detailed

below:

TABLE – 5.13

O &M Expenses - CESC’s Proposal

Amount in Rs.Crores

Sl.

No. Particulars FY17 FY18 FY19

1 Employee cost 412.52 480.26 535.44

2 Administrative and General

expenses

49.38 55.75 63.10

3 Repairs and Maintenance

expenses

47.28 53.38 60.42

Total O & M Expenses 509.18 589.39 658.96

Commission’s analysis &decision:

As per the norms specified under the MYT Regulations, the O & M

expenses are controllable expenses and the distribution licensee is

required to operate these expenses within the approved values.

The Commission has computed the O & M expenses for FY17-19 duly

considering the actual O & M expenses of FY15 as per the audited

accounts (being the latest data available as per the audited

accounts) to arrive at the O & M expenses for base year i.e. FY16. The

actual O& M expenses for FY15 were Rs.371.44 Crores. Considering the

xcii

Wholesale Price Index (WPI) as per the data available from the Ministry

of Commerce & Industry, Government of India and Consumer Price

Index (CPI) as per the data available from the Labour Bureau,

Government of India and adopting the methodology followed by

CERC with CPI and WPI in a ratio of 80 : 20, the allowable annual

escalation rate for FY17 is computed as follows:

TABLE – 5.14

Computation of Inflation Index for FY17

Year WPI CPI Composite

Series Yt/Y1=Rt Ln Rt

Year

(t-1)

Product [(t-

1)* (LnRt)]

2003 92.6 107 104.12

2004 98.72 111.1 108.624 1.04 0.04 1 0.04

2005 103.37 115.8 113.314 1.09 0.08 2 0.17

2006 109.59 122.9 120.238 1.15 0.14 3 0.43

2007 114.94 130.8 127.628 1.23 0.20 4 0.81

2008 124.92 141.7 138.344 1.33 0.28 5 1.42

2009 127.86 157.1 151.252 1.45 0.37 6 2.24

2010 140.08 175.9 168.736 1.62 0.48 7 3.38

2011 153.35 191.5 183.87 1.77 0.57 8 4.55

2012 164.93 209.3 200.426 1.92 0.65 9 5.89

2013 175.35 232.2 220.83 2.12 0.75 10 7.52

2014 182 246.9 233.92 2.25 0.81 11 8.90

A= Sum of the product column 35.36

B= 6 Times of A 212.19

C= (n-1)*n*(2n-1) where n= No of years of data=12 3036.00

D=B/C 0.07

g(Exponential factor)= Exponential (D)-1 0.0724

e=Annual Escalation Rate (%)=g*100

7.24

For the purpose of determining the normative O & M expenses for

FY17-19, the Commission has considered the following:

e) The actual O & M expenses incurred as per the audited accounts

for FY15 inclusive of contribution to the Pension and Gratuity Trust to

arrive at the base rate of O&M expenses for FY16.

f) The three year compounded annual growth rate (CAGR) of the

number of installations considering the actual number of

installations as per the audited accounts up to FY15 and as

projected by the Commission for FY16-FY19.

g) The weighted inflation index (WII) at 7.24% as computed above.

xciii

h) Efficiency factor at 2% as considered in the earlier two control

periods.

The above said parameters are computed duly considering the same

methodology as followed in the earlier orders of the Commission.

Accordingly, the normative O & M expenses for FY17-19 are as follows:

TABLE – 5.15

Approved O & M expenses for FY17-19

Particulars FY16 FY17 FY18 FY19

No. of Installations 2963000 3070460 3182981

Consumer Growth Index (CGI)

based on 3 Year CAGR 3.98% 3.92% 3.63%

Weighted Inflation index 7.24% 7.24% 7.24%

Base Year O&M Cost (as per

actuals of FY15)in Rs.Crs 406.02

Approved O&M Expenses in

Rs.Crs 443.46 484.09 527.01

Since, the base year data of O & M expense for FY16 also includes the

contribution to the P & G Trust, the Commission has not considered

allowing contribution to the P & G Trust separately for the control

period for FY17-19.

Thus, the Commission decides to approve O&M expenses of Rs.443.46

Crores for FY17, Rs.484.09 Crores for FY18 and Rs.527.01 Crores for FY19.

5.2.9 Depreciation:

CESC’s Proposal:

The CESC, in its application has claimed the depreciation for the

control period as follows:

TABLE – 5.16

Depreciation-FY17-19- CESC’s Proposal



Depreciation 102.29 136.91 170.37

xciv

Commission’s analysis and decision:

In accordance with the provisions of the MYT Regulations and

amendments thereon, the Commission has determined the

depreciation for FY17-19 considering the following:

a) The actual rate of depreciation of category wise assets is

determined considering the depreciation and gross block of

opening and closing balance of fixed assets as per the audited

accounts for FY15.

b) This actual rate of depreciation is considered on the gross block of

fixed assets projected by CESC duly considering the projections for

FY16.

c) The depreciation on account of assets created out of consumers

contribution / grants are considered (deducted) based on the

opening and closing balance of such assets as proposed by the

CESC at the weighted average rate of depreciation as per actuals

in FY15.

Accordingly, the depreciation for FY17-19 is as follows:

TABLE – 5.17

Approved Depreciation for FY17-19



Buildings 2.68 3.39 4.07

Civil 0.12 0.16 0.19

Other Civil 0.03 0.04 0.05

Plant & M/c 31.69 40.14 48.27

Line, Cable Network 92.08 116.63 140.25

Vehicles 0.08 0.10 0.12

Furniture 0.26 0.33 0.40

Office Equipments 0.34 0.43 0.52

Depreciation 127.29 161.22 193.86

xcv

Less Depreciation on assets

created out of grants/contribution 51.01 56.66 62.21

Approved net depreciation 76.28 104.56 131.65

Thus, the Commission decides to approve an amount of Rs.76.28

Crores, Rs.104.56 Crores and Rs.131.65 Crores towards depreciation for


5.2.10 Interest on Capital Loans:

CESC’s proposal:

CESC in its application has stated that, the Interest on capital loan for

the control period are computed based on the following assumptions:

Funding of CAPEX is based on 80% from borrowings and 20% from

internal resources.

Interest on the existing loan balances are considered as per the

terms and conditions of each loan.

Interest rate in respect of the new loans are considered at 12.25%

for REC/PFC loans. For other loans from commercial banks the

interest rate considered is on the basis of the prevailing base rate

plus 1% to 1.75% spread.

Based on the above assumptions. CESC has requested to approve

interest on capital loans for FY17-19 as follows:

TABLE – 5.18

Interest on Capital Loans– CESC’s Proposal


Particulars FY 17 FY 18 FY 19

Opening Balance of

loans

1356.67 1729.79 2168.16

Proposed new loans 640.00 659.00 639.00

Repayment 266.88 220.63 274.30

Closing Balance of

loans

1729.79 2168.16 2532.86

Interest on Capital loan 190.30 239.55 288.96

xcvi


The Commission notes the capex and capital loan proposals of the

CESC for FY17-19. As discussed in the preceding paragraphs of this

Chapter, considering the capex amount recognized by the

Commission for the approval of ARR for the control period, the

requirement of loan capital is Rs.393.40 Crores, Rs.386.40 Crores and

Rs.365.40 Crores for FY17, FY18 and FY19 respectively. Further, the

Commission has considered the repayment of loan as proposed by the

CESC at Rs.145.27 Crores, Rs.155.51 Crores and Rs.178.48 Crores for


As per the audited accounts of FY15, the CESC had incurred weighted

average rate of interest of 10.26% on long term loans. This rate of

interest is considered for the existing loan balances for which interest

has to be factored during FY17. For further period, the weighted

average rate of interest of the preceding year is considered for existing

loans. As discussed in the preceding paragraphs, the Commission has

considered capex amount of Rs.562.00 Crores for FY17, Rs.552.00 Crores

for FY18 and Rs.522.00 Crores for FY19 for the purpose of factoring

interest on loan. The Commission has considered new loans which is in

compliance with the debt equity ratio of 70: 30.



notified by the RBI from time to time plus spread of certain basis points

depending upon the tenure of the loan. Hence, the Commission

would consider the same approach in factoring the interest on new

capital loans. As per the data furnished by CESC, the new loans are

proposed at interest rate ranging from 10.30% to 12.25%. The

Commission notes that the interest rates proposed by CESC are

comparatively on higher side. CESC needs to initiate financial

prudence measures so as to avail loans at comparatively lesser interest

xcvii

rates and reduce its interest burden on consumers. However,

considering the base rate of interest with spread of 200 basis points

and noting the downward trend in the interest rate, the Commission

decides to allow capital loans at an interest rate of 11.75% for FY17-19.

It shall be noted that, the rate of interest now considered by the

Commission on the new capital loans for the control period is subject

to review during APR and revision of ARR of the relevant years of the

control period.

Accordingly, the approved interests on loans for FY17-19 are as follows:

TABLE – 5.19

Approved Interest on Capital Loans for FY17-19



Opening balance of loan 805.19 1053.32 1284.21

Add new Loans 393.40 386.40 365.40

Less Repayment of Loans 145.27 155.51 178.48

Total loan at the end of the year 1053.32 1284.21 1471.13

Average Loan 929.26 1168.77 1377.67

Approved interest on capital loans 97.80 124.89 148.70

Thus, the Commission decides to approve interest on capital loans of

Rs.97.80, Rs.124.89 Crores and Rs.148.70 Crores for FY17, FY18 and FY19

respectively.

5.2.11 Interest on Working Capital:

CESC’s proposal:

CESC has claimed interest on working capital as follows:

TABLE – 5.20

Interest on Working Capital – CESC’s Submission



Interest on Working Capital 48.67 53.52 58.48


xcviii

As per the norms specified under the MYT Regulations, the Commission

has computed the interest on working capital which consists of one

months O & M expenses, 1% of opening GFA and two month’s

revenue.



declared by RBI from time to time with spread of certain basis points

depending upon the tenure of loans. Hence, the Commission would

consider base rate plus certain basis points in allowing the interest on

working capital. As per the replies furnished by CESC, it is stated that,

the short term loans/ overdrafts has been availed at the rate of interest

ranging from 11.75% to 13%. The Commission notes that, the present

short term loans availed by CESC is comparatively at a higher rate of

interest. CESC needs to initiate financial prudence measures in availing

short term loans so that the interest burdens on its consumers are

reduced. Considering the base rate of interest with spread of 250 basis

points and noting the downward trend in the interest rate, the

Commission decides to allow working capital loans at a normative

interest of 11.75% for FY17-19.

Accordingly, the approved interest on working capital loans for FY17-

19 are as follows:

TABLE – 5.21

Approved Interest on Working Capital for FY17-19


Particulars FY 17 FY 18 FY 19

One-twelfth of the amount of

O&M Exp. 36.96 40.34 43.92

Opening GFA 2461.22 3228.02 3975.31

Stores, materials and supplies 1%

of Opening balance of GFA 24.61 32.28 39.75

One-sixth of the Revenue 516.07 554.09 595.10

Total Working Capital 577.64 626.71 678.77

Interest on Working Capital loans 67.87 73.64 79.76

xcix

Thus, the Commission decides to approve interest on working capital of

Rs.67.87 Crores, Rs.73.64 Crores and Rs.79.76 Crores for FY17, FY18 and

FY19 respectively.

5.2.12 Interest on Consumer Deposit:

CESC’s proposal:

CESC has claimed interest on consumer security deposit as follows:

TABLE – 5.22

Interest on Consumer Security Deposits for FY17-19- CESC’s Proposal


Particulars FY-17 FY-18 FY-19

Interest on Consumer Security Deposit 42.77 47.04 51.75


In accordance with the provisions of the KERC (Interest on Security

Deposit) Regulations 2005, the interest rate to be allowed is the bank

rate prevailing on the 1st of April of the financial year for which interest

is due. As per Reserve Bank of India notification dated 29th September,

2015, the bank rate is 7.75%. This being the latest notified bank rate, the

Commission has considered the same for computation of interest on

consumer security deposits for FY17-19.

The Commission has considered the deposits as per audited accounts

of FY15 and half yearly accounts of FY16 for onward projection for

FY17-19. The interest on consumer deposits for FY17-19 are as follows:

TABLE – 5.23

Approved Interest on Consumer Security Deposits for FY17-19



Opening balance of consumer security deposits 469.95 509.95 554.95

Rate of Interest at bank rate to be allowed as per

Regulations 7.75% 7.75% 7.75%

Approved Interest on Consumer Security Deposits 37.97 41.26 44.95

c

Thus, the Commission decides to approve interest on consumer

deposits of Rs.37.97 Crores, Rs.41.26 Crores and Rs.44.95 Crores for


5.2.13 Interest and other expenses Capitalised:

CESC has claimed an amount of Rs.22.00 Crores, Rs.24.00 Crores and

Rs.26.00 Crores towards capitalization of interest and other expenses

during FY17, FY18 & FY19 respectively. Considering the capital

expenditure incurred and capitalized in the previous years, the

Commission decides to allow capitalization of interest and other

expenses as proposed by CESC for the control period FY17-19.

The abstract of approved interest and finance charges for FY17-19 are

as follows:

TABLE – 5.24

Approved Interest and finance charges for FY17-19



Interest on Loan Capital 97.80 124.89 148.70

Interest on Working Capital 67.87 73.64 79.76

Interest on Consumers Deposit 37.97 41.26 44.95

Less Interest & other expenses capitalised (22.00) (24.00) (26.00)

Total Interest & Finance Charges 181.64 215.79 247.40

5.2.14 Other Debits:

CESC in its application has claimed an amount of Rs.5.94 Crores,

Rs.6.94 Crores and Rs.7.94 Crores towards other debits for FY17, FY18 &

FY19 respectively. The Commission has not been considering the

projections of other debits for the reason that, the same cannot be

estimated beforehand. The Commission, therefore has not allowed the

same in the ARR for the control period. However, such expenses would

be considered as per the audited accounts for the relevant years at

the time of APR.

ci

5.2.15 Net Prior Period Credit / Charges:

CESC in its application has claimed net prior period credit / charges of

Rs. (-) 8.00 Crores, Rs.2.00 Crores and Rs.2.00 Crores for FY17, FY18 &

FY19 respectively. The Commission has not been considering the

projections for net prior period credit / charges for the reason that, the

same cannot be estimated beforehand. The Commission therefore has

not allowed the same in the ARR for the control period. However, such

expenses would be considered as per the audited accounts for the

relevant years at the time of APR.

5.2.16 Return on Equity:

CESC’s proposal:

CESC in its application has not claimed the Return on Equity for having

estimated negative net-worth for the control period FY17-19.


The Commission has considered the actual amount of opening

balances of share capital, share deposits and the accumulated

profit/loss amount under reserves & surplus as per the audited

accounts for FY15 and the additional share deposit reported in the half

yearly accounts for FY16 for arriving at the allowable equity base for

the control period FY17-19. Further, an amount of Rs.23.00 Crores of

recapitalized consumer security deposit as networth is considered as

per the orders of the Hon’ble Appellate Tribunal for Electricity in

Appeal No.46/2014.

Further, in compliance with the orders of the Hon’ble ATE in Appeal

No.46/2014 wherein it is directed to indicate the opening and closing

balances of gross fixed assets along with break-up of equity and loan

cii

component in the Tariff Order henceforth, the details of GFA, debt and

equity (networth) for FY17-19 are as follows:

TABLE – 5.25

Status of Debt Equity Ratio for FY17-19


Year Particulars GFA Debt Equity

(Networth)

Normative

Debt @

70% of

GFA

Normative

Equity @

30% of

GFA

%age

of

actual

debt

on

GFA

%age of

actual

equity on

GFA

FY17 Opening

Balance

2461.22 805.19 (243.67)

Closing

Balance

3228.02 1053.32 (243.67) 2259.61 968.41 32.63% Negative

FY18 Opening

Balance

3228.02 1053.32 (243.67)

Closing

Balance

3975.31 1284.21 (243.67) 2782.72 1192.59 32.30% Negative

FY19 Opening

Balance

3975.31 1284.21 (243.67)

Closing

Balance

4684.51 1471.13 (243.67) 3279.16 1405.35 31.40% Negative

From the above table it is evident that the debt equity amounts lies

within the normative debt equity ratio of 70 : 30 on the closing

balances of GFA for each year of the control period. Further, the

Commission will review the same during the Annual Performance

Review for each year based on the actual data as per the audited

accounts.

Based on the above, the computation of allowable Return on Equity

for FY17-19 are as follows:

ciii

TABLE – 5.26

Return on Equity for FY17-19



Paid Up Share Capital 325.515 325.515 325.515

Share Deposit 96.00 96.00 96.00

Reserves and Surplus -642.19 -642.19 -642.19

Less Recapitalised Security Deposit 23.00 23.00 23.00

Total Equity -243.67 -243.67 -243.67

Approved Return on Equity 0.00 0.00 0.00

Since the networth of CESC is negative for all the three years of the

control period FY17-19, the Commission decides not to factor any

amount of return on equity for the Control period.

5.2.17 Other Income:

CESC’s proposal:

CESC has claimed other income for the control period by projecting

5% increase over the previous year based on actuals as per audited

accounts in FY15 as detailed below:

TABLE – 5.27

Other Income – CESC’s Proposal

Amount in Rs.Crores


Other Income 40.77 42.81 44.95


The other income received by CESC mainly includes income from

rebate on collection of electricity duty, interest on bank deposits, rent

from staff quarters, sale of scrap, profit from sale of stores and income

from miscellaneous recoveries besides incentives for timely payment of

power purchase bills.

Based on the amount of other income earned by CESC in the previous

years, the Commission decides to approve the following other income

for the control period as proposed by CESC:

civ

TABLE – 5.28

Approved Other Income for FY17-19

Amount in Rs.Crores


Approved Other Income 40.77 42.81 44.95

5.2.18 Fund towards Consumer Relations / Consumer Education:

The Commission has been allowing an amount of Rs.0.50 Crore per

year towards consumer relations / consumer education. This amount

is earmarked to conduct consumer awareness and grievance

redressal meetings periodically and institutionalize a mechanism for

addressing common problems of the consumers. The Commission has

already issued guidelines for consumer education and grievance

redressal activities.

The Commission decides to continue providing an amount of Rs.0.50

Crore for each year of the control period FY17-19 towards meeting the

expenditure on consumer relations / consumer education.

The Commission directs CESC to furnish a detailed plan of action for

utilization of this amount and also maintain a separate account of

these funds and furnish the same at the time of APR.

5.3 Treatment of Regulatory Asset:

CESC in its application has claimed an amount of Rs.120.41 Crores as

Regulatory asset to be recovered in the ARR for FY17.

The Commission notes that as per the Tariff Order dated 12th May, 2014

the deficit of Rs.85.89 Crores for FY13 was determined duly factoring

the additional subsidy of Rs.126.69 Crores payable by the Government

of Karnataka. This deficit was included in the ARR for FY15. Further,

while approving the ARR for FY15, an amount of Rs.131.60 Crores was

set aside as regulatory asset to be recovered in the tariff over the next

two years (FY16 & FY17). The Commission had decided to allow

cv

carrying cost at 12% p.a on the regulatory asset to be assessed at the

time of Annual Performance Review for FY15 and FY16. However, in the

present APR for FY15, as discussed in the previous chapter of this Order,

the revenue earned was more than sufficient to meet the expenses

during FY15. The APR of FY15 indicates a surplus of Rs.22.90 Crores.

Further, the Commission in its Tariff Order dated 2nd March, 2015 had

decided to carry forward a Regulatory asset of Rs.120.41 Crores being

determined as detailed below:

Sl.

No Particulars

Amount

in

Rs Crs

1 Regulatory asset as per Commission’s Order dated 12th May, 2014. 131.60

2 Deficit in revenue on APR of FY14 (10.69)

3 Gap in revenue as per ARR for FY16. 82.26

4 Total Gap for FY16 224.55

5 Additional revenue allowed by revision of tariff in FY16 103.34

6 Balance unfilled gap in revenue 121.21

7 Amount disallowed on imprudent capex (0.08)

8 Regulatory asset to be recovered in FY17 120.41

Hence the Commission decides to include this amount of Rs.120.41

Crores in the ARR for FY17.

5.4 Abstract of ARR for FY17-19:

In the light of the above analysis and decisions of the Commission, the

following is the approved ARR for the control period FY17-19:

cvi

TABLE – 5.29

Approved ARR for FY17-19


Sl.

No Particulars FY17 FY18 FY19

Revenue at existing tariff



3 Total Existing Revenue 3096.42


4 Power Purchase Cost 2276.67 2651.81 2907.05

5 Transmission charges of KPTCL 344.44 332.24 377.82

6 SLDC Charges 2.40 2.70 3.03

7


transmission 2623.51 2986.76 3287.90

8 O&M Expenses 443.46 484.09 527.01

9 Depreciation 76.28 104.56 131.65


10 Interest on Capital Loans 97.80 124.89 148.70

11 Interest on Working capital loans 67.87 73.64 79.76

12 Interest on consumer security deposits 37.97 41.26 44.95

13

Less: interest & other expenses

capitalised 22.00 24.00 26.00

14 Total Interest & Finance charges 181.64 215.79 247.40

15 Other Debits 0.00 0.00 0.00

16 Net Prior Period Debit/Credit 0.00 0.00 0.00

17 Return on Equity 0.00 0.00 0.00

18

Funds towards Consumer

Relations/Consumer Education 0.50 0.50 0.50

19 Other Income 40.77 42.81 44.95

20 ARR 3284.62 3748.89 4149.52

21 Surplus for FY15 carried forward 22.90

22 Regulatory asset -120.41

23 Net ARR 3382.14 3748.89 4149.52

5.5 Segregation of ARR into ARR for Distribution Business and ARR for Retail

Supply Business:

CESC in its application has proposed the same ratio as being adopted

for the previous control period for segregation of consolidated ARR into

ARR for Distribution Business and ARR for Retail Supply as follows:

cvii

TABLE – 5.30

Approved Segregation of ARR – FY17 – 19- CESC’s Proposal

Particulars

Distribution

Business

Retail Supply

Business

Power Purchase 0% 100%

Repairs & Maintenance 90% 10%

Employee costs 48% 52%

A&G expenses 55% 45%

Depreciation 78% 22%

Interest and Finance charges 100% 0%

Other interest charges 0% 100%

Other debits 48% 52%

Extra-ordinary items 0% 0%

Prior period expenses 91% 9%

RoE 75% 25%

Provision for taxes 50% 50%

Commission’s Analysis and Decisions:

The Commission notes that CESC has retained the same ratio as being

adopted for the previous control period for segregation of

consolidated ARR into ARR for Distribution Business and ARR for Retail

Supply and has not justified its proposal. In the absence of any justified

proposal, the Commission decides to continue with the existing ratio of

segregation of ARR as detailed below:

TABLE – 5.31

Basis of Segregation of ARR – FY17 - 19

Particulars Distribution

Business

Retail Supply

Business

O&M 51% 49%

Depreciation 84% 16%

Interest on Loans 100% 0%

Interest on Consumer Deposits 0% 100%

RoE 75% 25%

GFA 84% 16%

Non-Tariff Income 2% 98%

cviii

Accordingly, the following is the approved ARR for Distribution Business

and Retail supply business:

TABLE – 5.32 APPROVED ARR FOR DISTRIBUTION BUSINESS – FY17 - 19


Sl.

No Particulars

FY17 FY18 FY19

1 O&M Expenses 226.17 246.89 268.78

2 Depreciation 64.07 87.83 110.59

Interest & Finance Charges






8 ROE 0.00 0.00 0.00

9 Other Income 0.82 0.86 0.90

10 ARR 371.08 441.66 509.12

TABLE – 5.33

APPROVED ARR FOR RETAIL SUPPLY BUSINESS – FY17 - 19

Amount in Rs.Crores

Sl.

No Particulars

FY17 FY18 FY19

1 Power Purchase 2276.67 2651.81 2907.05

2 Transmission Charges 346.84 334.95 380.85

3 O&M Expenses 217.30 237.20 258.24

4 Depreciation 12.20 16.73 21.06

Interest & Finance Charges






10 ROE 0.00 0.00 0.00

11 Other Income 39.95 41.95 44.05

12

Fund towards Consumer Relations /

Consumer Education 0.50 0.50 0.50

13 ARR 2913.54 3307.23 3640.40

5.6 Gap in Revenue for FY17:

As discussed above, the Commission decides to approve the Annual

Revenue Requirement (ARR) of CESC for its operations in FY17 at

Rs.3382.14 Crores as against CESC’s application proposing an ARR of

Rs.3778.37 Crores. This includes an amount of Rs.22.90 Crores which is

cix

determined as the surplus revenue earned in FY15 as discussed in

Chapter-4 of this Order. Based on the existing retail supply tariff, the

total realization of revenue will be Rs.3096.42 Crores which is Rs.285.72

Crores less than the projected revenue requirement for FY17.

The net ARR and the gap in revenue for FY17 are shown in the following

table:

TABLE – 5.34

Revenue gap for FY17

Particulars FY17

Net ARR including carry forward surplus of FY15 ( Rs. Crores) 3382.14

Approved sales ( MU) 5966.83

Average cost of supply for FY17 ( Rs./unit) 5.67

Revenue at existing tariff ( Rs. Crores) 3096.42

Gap in revenue for FY17 (Rs. Crores) (285.72)

The determination of revised retail supply tariff on the basis of the

above approved ARR is detailed in the following Chapter.

5.7 Application for Additional Revenue Requirement for FY17:

The CESC, in its application dated 18th March, 2016, filed on 21st March,

2016, seeking additional ARR for FY17, has submitted that:

1. The Second Transfer Scheme Rules dated 31.05.2002 were issued by

the GoK, for transfer of assets and liabilities and personnel of KPTCL

to the ESCOMs. According to Rule 4(13) of these Rules, the State

Government is responsible for funding the pension and other

liabilities of the personnel as on the date of Second Transfer i.e.

31.05.2002 and sub-rule 13(2)(b) provides for establishment of a

Pension Trust for managing the fund.

2. The GoK, vide its order dated 19.12.2002, has ordered constitution

of the Pension and Gratuity Trust and also decided to adopt “Pay

as you go” approach, in funding the pension and gratuity

requirement.

3. The GoK vide its letter dated 25.02.2016, has informed that against

the proposed pension and gratuity contribution of Rs.996.39 Crores

for FY17 and the arrears of pension contribution of Rs.2047.84 Crores

cx

payable to KPTCL and ESCOMs, the Finance Department (FD) has

agreed to provide Rs.550 Crore for meeting the pension liability. As

there is difference between the proposed requirement and the

availability as indicated by the FD for FY17, the Pension Trust is

directed to work out the amount of contribution to be recovered

through tariff, considering the indicative amount of contribution

available from the Government.

4. It is submitted by CESC that, as worked out by the Pension Trust, an

amount of Rs.282.63 Crores (Arrears of Rs.230.67 Crores and Rs.51.96

Crores for FY17), has to be recovered through tariff.

5. Further, CESC has submitted that, additional power purchase cost

has to be incurred by the ESCOMs due to outage of Sharavathi

generating Station and consequent revision of availability of energy

resulting in increase in cost of power purchases to an extent of

Rs.79.17 Crores, for FY17.

Accordingly, CESC has filed an application claiming an additional ARR

of Rs.282.63 Crores towards pension and gratuity contribution and

Rs.79.17 Crores towards additional power purchase cost, to be

recovered through tariff.

Commission’s views and decision

The Commission proceeds to dispose of the application filed by CESC,

as follows:

a) The application for additional ARR has been filed on 16th March,

2016, that is much after completion of the process of calling for

objections on the original tariff application and furnishing replies

thereon. The Commission has also completed the process of public

consultation by holding a public hearing, in respect of CESC, on

27th February, 2016.

b) As per Rule 4(13) of the Karnataka Electricity Reforms (Transfer of

Undertakings of KPTCL and its Personnel to Electricity Distribution

and Retail Supply Companies) Rules, 2002, notified by the

cxi

Government on 31.05.2002, the State Government is liable for

funding the pension and gratuity liability of existing pensioners as on

the effective date of Second Transfer Scheme.

c) The Government, as per its order dated 19.12.2002, has adopted

“pay as you go” approach to meet the pension and gratuity

requirements of existing pensioners on the effective date of second

transfer Scheme. With this arrangement, the GoK is liable to meet

the pension and gratuity requirement of existing pensioners as

noted above. Hence, this liability cannot be passed on to the

consumers, through tariff.

d) The Commission has considered the energy availability from

Sharavathi generating station as projected by the KPCL, after the

fire accident and the same is factored in the power purchase cost

of BESCOM.

In view of the above, the Commission is unable to accept the

application for approval of additional ARR towards pension and

gratuity of the said pensioners. Accordingly, the said application

stands disposed of.

cxii

CHAPTER – 6

DETERMINATION OF TARIFF FOR FY17

6.0 CESC’S Proposal and Commission’s Analysis for FY17:

6.1 Tariff Application

As discussed in the preceding Chapters, CESC has projected an unmet

gap in revenue of Rs.613.15 Crores for FY17. In order to bridge this gap

in revenue, CESC, in its Tariff Application, has proposed a tariff increase

of 102 paise per unit in respect of all the categories of consumers.

6.2 Statutory Provisions Guiding Determination of Tariff

As per section 61 of the Electricity Act 2003, the Commission, is guided

inter-alia, by the National Electricity Policy, the Tariff Policy and the

following factors, while, determining the tariff so that,

the distribution and supply of electricity are conducted on

commercial basis;

competition, efficiency, economical use of resources, good

performance, and optimum investment are encouraged;

the tariff progressively reflects the cost of supply of electricity, and

also reduces and eliminates cross subsidies within the period to be

specified by the Commission;

efficiency in performance is to be rewarded ; and

a Multi-Year Tariff framework is adopted

Section 62(5) of the Electricity Act 2003, read with Section 27(1) of the

KER Act 1999, empowers the Commission to specify, from time to time,

the methodologies and the procedure to be observed by the licensees

in calculating the Expected Revenue from Charges (ERC). The

Commission determines the Tariff in accordance with the Regulations

and the Orders issued by the Commission from time to time.

6.3 Consideration for Tariff Setting:

cxiii

The Commission has considered the following relevant factors for

determination of Retail Supply Tariff:

a) Tariff philosophy:

As discussed in the earlier tariff orders, the Commission continues to

fix tariff below the average cost of supply for consumers whose

ability to pay is considered inadequate and fix tariff at or above the

average cost of supply for categories of consumers whose ability to

pay is considered to be greater. As a result the system of cross

subsidy continues. However, the Commission has taken due care

to progressively bring down the cross subsidy levels as envisaged in

the Tariff Policy of the Government of India.

b) Average cost of supply:

The Commission has been determining the retail supply tariff on the

basis of the average cost of supply. The KERC (Tariff) Regulations,

2000 require the licensees to provide details of embedded cost of

electricity voltage / consumer category-wise. The distribution

network of Karnataka is such that, it is difficult to segregate the

common cost between voltage levels. Therefore, the Commission

has decided to continue the average cost of supply approach for

recovery of the ARR. With regard to the indication of voltage-wise

cross subsidy with reference to the voltage wise cost of supply, the

decision of the Commission is noted in the subsequent para of this

Chapter.

c) Differential Tariff:

Beginning with its tariff order dated 25th November, 2009 the

Commission has been determining differential retail supply tariff for

consumers in urban and rural areas. The Commission decides to

continue the same in the present order also.

6.4 New Tariff Proposals by CESC

cxiv

CESC, in its tariff application has made the following new proposals:

1. Increase in Fixed Charges:

CESC has proposed to increase the fixed cost by Rs.10/- to Rs.40/- Per

HP/KW/KVA for different categories of consumers.

Commission’s Analysis and decisions:

On an analysis of the revenue at existing tariff of CESC, the Commission

notes that the total amount of fixed charges likely to be recovered on

the projected consumers, works out to Rs.216.90 Crores for FY17.

Whereas as per the approved ARR of CESC for FY17, the fixed cost to

be incurred in each of the activity in generation, transmission and

distribution is as follows:

(Amount in Rs.Crores)

Activity Total FC to be

incurred

Generation 524.88

Transmission including

SLDC charges

346.84

Distribution network cost 661.11

Total Fixed cost 1532.83

From the above analysis, the Commission notes that as against total

fixed expenditure of Rs.1532.83 Crores, CESC is able to collect the

expenditure only to an extent of Rs.216.90 Crores in the form of fixed

charges at the existing rate. This accounts for recovery of only 14.15%

of fixed charges. The remaining 85.85% is being recovered in the form

of energy charges, which is not an efficient method of recovery of

fixed expenditure.

As per the Tariff Policy issued by the Ministry of Power, Government of

India, dated 28th January 2016, two-part Tariff featuring separate fixed

and variable charges shall be introduced for all consumer. In order to

ensure their financial viability, it is imperative that the fixed expenditure

incurred by the ESCOMs, are recovered in the form of fixed charges.

On study of the existing rate of fixed charges levied on the consumers

and the amount collected thereon, it is observed that fixed charges

cxv

needs to be increased gradually to meet the above objective. Hence

the Commission hereby decides to provide for collection of additional

fixed charge of Rs.5/- per KW/HP per month from the Domestic and LT

Industrial consumers and RS.10/- per KW /HP/ KVA per month from all

the other categories of consumers. This would enable the CESC to

recover an additional fixed charges from the projected consumers

only to the extent of Rs. 27.98 Crores and the projected total recovery

of fixed charges would be Rs.244.88 Crores for FY17 which accounts for

15.98% of the total fixed charge incurred.

2. Billing on KVAH basis to EHT/HT consumers

CESC has proposed to introduce KVAH billing in place of the present

system of billing on KWH basis in respect of EHT and HT consumers with

a view to reduce the distribution losses, encourage efficient

consumption of electricity by consumers, lower electricity bill of the

consumers and reduce CESC energy requirement.

In order to estimate the category-wise KvAh consumption and its

impact on revenue/ consumer tariff/ cross subsidy the Commission had

directed CESC to furnish the KvAh consumption data of all its HT

consumers for FY13 to FY15 and up to November, 2015 and to rework

the financial implication for FY17 on the proposed billing on KvAh basis

for all the HT consumers. But, the required information has not been

fully submitted by CESC. In the absence of any scientific study and

failure on the part of CESC to furnish the require data along with the

financial implications, the Commission is unable to take any decision in

the matter and hence decides to continue the existing Kwh billing

system for all the HT consumers.

3. Introduction of morning peak from 6 AM to 10 AM under ToD billing:

CESC has proposed to introduce ToD billing for morning peak between

6 AM to 10AM, to consumers currently covered under the ToD system

of billing.

cxvi

The Commission, in its preliminary observation had sought the details of

the revenue impact of the existing ToD billing and also by inclusion of

the proposed morning peak period. CESC has not furnished the

required data/ revenue impact as required by the Commission.

Hence, in the absence of data and revenue impact to justify the

proposal, the Commission is unable accept the proposal of CESC.

4. Billing of auxiliary consumption of KPTCL:

CESC in its application has proposed billing of auxiliary consumption of

KPTCL at Rs.40 per KW as fixed charges and energy charge at Rs.4.00

per unit for consumption up to 50 unit and Rs.5 per unit for

consumption above 50 unit per month.

The Commission in its letter No. B/07/05/451 dated 23.06.2015

addressed to the MD, BESCOM, where in it was suggested to seek

determination of tariff in respect of sale of power to KPTCL in

accordance with the provisions Clause 3.05 of the COS. It is further

informed that the auxiliary consumption is not a part of transmission loss

but it is a part of the normative operation and maintenance of KPTCL

and the charges for the same are to be borne by KPTCL.

ESCOMs have not taken any action on the above suggestion made by

the Commission. Further, the new proposal of CESC to bill the auxiliary

consumption of KPTCL is not supported with any justification. Since the

new proposal made by CESC is without complying the provisions of

COS, the Commission is unable to take any decision in the matter.

5. Other proposals:

CESC has made the following proposals:

a) Extend concessional tariff to RO drinking water supply units.

c) Withdrawal Solar Rebate.

cxvii

d) Special new tariff for irrigation Pump sets under HT Tariff: HT3(c).

The Commission has examined the above proposals and notes that the

new proposals are not properly justified with financial implications and

hence, decides not to accept the proposals made.

6.5 Revenue at Existing Tariff and Deficit for FY17:

The Commission in its preceding Chapters has decided to carry

forward the surplus in revenue of Rs.22.90 Crores of FY15 to the ARR of

FY17.The gap in revenue for FY17 is proposed to be filled up by revision

of Retail Supply Tariff as discussed in the following paragraphs of this

Chapter.

Considering the approved ARR for FY17 and the revenue as per the

existing tariff, the gap in revenue for FY17 is as follows:

TABLE – 6.1

Revenue Deficit for FY17


Particulars Amount

Approved Net ARR for FY17 including surplus of

FY15

3382.14

Revenue at existing tariff 3096.42

Surplus / deficit (285.72)

Additional Revenue to be realised by Revision of

Tariff

285.72

Accordingly, in this Chapter, the Commission has proceeded to

determine the retail supply tariff for FY17. The category-wise tariff as

existing, as proposed by CESC and as approved by the Commission is

as follows:

1. LT-1 BhagyaJyothi

The existing tariff and the tariff proposed are given below:

Sl.

No

Details Existing as per 2015

Tariff Order

Proposed by CESC

cxviii

1 Energy Charges

(including recovery

towards service main

charges)

526 paise / unit Subject

to a monthly minimum

of Rs. 30 per installation

per month.

628 paise / unit Subject

to a monthly minimum

of Rs. 30 per installation

per month.

Commission’s Views/ Decision:

The GoK, as a policy, has extended free power to all BJ/KJ consumers,

whose consumption is not more than 18 units per month. The tariff

payable by these consumers is revised to Rs.5.67 per unit.

Further, the ESCOMs have to claim subsidy for only those consumers

who consume 18 units or less per month per installation. If the

consumption exceeds 18 units per month or any BJ/KJ installation is

found to have more than one out- let, it shall be billed as per the Tariff

Schedule LT 2(a).

The Commission determines the tariff (CDT) in respect of BJ / KJ

installations as follows:

cxix

LT – 1 Approved Tariff for BJ / KJ installations

Commission Determined Tariff Retail Supply Tariff

determined by the

Commission

567 paise per unit,

subject to a monthly minimum of

Rs. 30 per installation per month.

-Nil-

Fully subsidized by GoK

*Since GOK is meeting the full cost of supply to BJ / KJ, the Tariff payable by these

Consumers is shown as Nil. However, if the GOK does not release the subsidy in

advance, a Tariff of Rs. 5.67 per unit subject to monthly minimum of Rs.30/- per

Installation per month shall be demanded and collected from these consumers.

Note: If the consumption exceeds 18 units per month or any BJ/KJ

installation is found to have more than one light point being

used, it shall be billed as per Tariff Schedule LT 2(a).

2. LT2 (a) Domestic Consumers:

CESC’s Proposal:

The details of the existing and proposed tariff under this category are

given in the Table below:

Proposed Tariff for LT-2 (a)

LT-2 a (i) Domestic Consumers Category

Applicable to areas coming under City Municipal Corporations and all

Urban Local Bodies

Det

ails

Existing as per 2015 Tariff

Order

Proposed by CESC

Fixed

Charges

per Month

For the first KW Rs.25 For the first KW Rs.25

For every additional KW

Rs.35

For every additional KW Rs.35

Energy

Charges

0-30 units

( life line

Consumpti

on )

0 to 30 units 270 paise/unit 0 to 30 units 372 paise

/ unit

Energy

Charges

exceeding

30 Units

per month

31 to 100 units 400 paise/unit 31 to 100 units 502 paise

/ unit

101 to 200 units 540 paise

/unit


/unit

Above 200 units 640 paise

/unit


/unit

LT-2(a)(ii) Domestic Consumers Category

Applicable to Areas under Village Panchayats

cxx

Details Existing as per 2015 Tariff Order

Proposed by CESC

Fixed Charges per

Month

For the first KW Rs.15 For the first KW Rs.15

For every additional KW

Rs.25

For every additional

KW Rs.25

Energy Charges

0-30 units ( life line

Consumption )


/unit


/unit

Energy Charges

exceeding 30 Units

per Month


/ unit


/ unit


/unit


/unit


/unit


/unit

Commission’s Views/ Decision

The Commission has decided to continue the two tier tariff structure in

respect of the domestic consumers as shown below:

(i) Areas coming under City Municipal Corporations and all Urban

Local Bodies

(ii) Areas under Village Panchayats.

The Commission approves the tariff for this category as follows:

cxxi

Approved Tariff for LT 2 (a) (i) Domestic Consumers Category:

Applicable to City Municipal Corporations and all other

Urban Local Bodies.

Details Tariff approved by the

Commission

Fixed Charges per Month For the first KW Rs.30/-

For every additional KW Rs.40/-

Energy Charges up to 30 Units per

Month (0-30 Units)-life line consumption.

Upto 30 units: 300 paise/unit

Energy Charges in case the

consumption exceeds 30 Units per

month

31 to 100 units: 440 paise/unit


Above 200 units: 690 paise/unit

Approved Tariff for LT-2(a)(ii) Domestic Consumers Category:


Details Tariff approved by the Commission

Fixed Charges per Month For the first KW Rs 20/-

For every additional KW Rs.30/-

Energy Charges up to 30

units per Month (0-30 Units)-

Lifeline Consumption

Upto 30 units: 290 paise/unit

Energy Charges in case the

Consumption exceeds 30

units per Month




3. LT2 (b) Private Professional Educational Institutions & Private Hospitals

and Nursing Homes:

CESC’s Proposal:

The details of the existing and the proposed tariff under this category

are given in the Table below:

LT 2 (b) (i) Private and Professional Educational Institutions & Private Hospitals

and Nursing Homes:

cxxii

Applicable to areas coming under Municipal Corporations

& Urban Local Bodies

Details Existing as per 2015 Tariff Order Proposed by CESC

Fixed

Charges per

Month

Rs.35 Per KW subject to a

minimum of Rs.65 per month


minimum of Rs.65 per

month

Energy

Charges

For the first 200 units 600

paise per unit


paise per unit

For the balance units 720

paise per unit


paise per unit

LT 2 (b) (ii) Private & Professional Educational Institutions& Private

Hospitals and Nursing Homes:


Details Existing Tariff Proposed by CESC

Fixed

Charges per

Month


minimum of Rs.50 per Month


minimum of Rs.50 per

Month

Energy

Charges

For the first 200 units: 550

paise per unit

For the first 200 units:652

paise per unit

For the balance units: 670

paise per unit

For the balance units:772

paise per unit

Commission’s Decision:

As in the previous Tariff Order, the Commission decides to continue the

two tier tariff structure as below:

(i) Areas coming under Municipal Corporation and urban local

bodies.


Approved Tariff for LT 2 (b) (i) Private Professional and other Private

Educational Institutions, Private Hospitals and Nursing Homes.

Applicable to areas under City Municipal Corporations and all other

urban Local Bodies.


Fixed Charges per Month Rs.45 per KW subject to a minimum of Rs.75 per

Month

cxxiii

Energy Charges 0-200 units: 625 paise/unit


Approved Tariff for LT 2 (b) (ii) Private Professional and other Private

Educational Institutions, Private Hospitals and Nursing Homes

Applicable in Areas under Village Panchayats


Fixed Charges per Month Rs. 35 per KW subject to a minimum of Rs.60

per Month

Energy Charges 0-200 units: 570 paise/unit


4. LT3- Commercial Lighting, Heating & Motive Power

CESC’s Proposal:

The existing and proposed tariff are as follows:

LT- 3 (i) Commercial Lighting, Heating & Motive Power

Applicable in areas under all Urban Local Bodies including City

Municipal Corporations

Details Existing as per 2015 Tariff

Order

Proposed by CESC

Fixed Charges per

Month

Rs.40 per KW Rs. 40 per KW

Energy Charges For the first 50 units 695

paise per unit


paise per unit


paise per unit


paise per unit

Demand based tariff (optional) where sanctioned load is above 5 KW

but below 50 KW.


Order

Proposed by CESC

Fixed

Charges

Rs.55 per KW Rs.55 per KW

Energy

Charges

For the first 50 units 695 paise

per unit

For the first 50 units 797 paise

per unit


paise per unit


paise per unit

LT-3 (ii) Commercial Lighting, Heating & Motive Power

Applicable in areas under Village Panchayats


Order

Proposed by CESC

Fixed Charges per Rs.30 per KW Rs.30 per KW

cxxiv

Month

Energy Charges For the first 50 units 645

paise per unit


paise per unit

For the balance units

745paise per unit


paise per unit

Demand based tariff (optional) where sanctioned load is above 5 KW

but below 50 KW


Order

Proposed by CESC

Fixed Charges per

Month

Rs.45 per KW Rs.45 per KW

Energy Charges For the first 50 units

645paise per unit


paise per unit


paise per unit


paise per unit


As in the previous Tariff Order, the Commission decides to continue the

two tier tariff structure as below:

(i) Municipal Corporations and other urban local bodies.


Approved Tariff for LT- 3 (i) Commercial Lighting, Heating & Motive

Power

Applicable to areas under all Urban Local Bodies including Municipal

Corporations

Details Approved by the Commission

Fixed Charges per Month Rs.50 per KW

Energy Charges For the first 50 units: 715 paise/ unit

For the balance units: 815 paise/unit

Approved Tariff for Demand based tariff (Optional) where sanctioned

load is above 5 kW but below 50 kW


Fixed Charges per

Month

Rs.65 per KW

Energy Charges For the first 50 units: 715 paise /unit

For the balance units: 815 paise/unit

Approved Tariff for LT-3 (ii) Commercial Lighting Heating& Motive Power Applicable to areas under Village Panchayats


cxxv

Fixed Charges per

Month

Rs.40 per KW

Energy Charges For the first 50 units : 665 paise per unit

For the balance units : 765 paise per unit

Approved Tariff for Demand based tariff (optional)where sanctioned

load is above 5 kW but below 50 kW


Fixed Charges per

Month

Rs.55 per KW

Energy Charges For the first 50 units: 665 paise per unit

For the balance units: 765 paise per unit

5. LT4-Irrigation Pump Sets:

CESC’s Proposal:

The existing and proposed tariff for LT4 (a) is as follows:

LT-4 (a) Irrigation pump sets

Applicable to IP sets up to and inclusive of 10 HP


Order

Proposed by CESC

Fixed Charges per

Month

Nil Free (In case GoK does

not release the subsidy

in advance, CDT of 542

paise per unit will be

demanded and

collected from

consumers)

Energy Charges CDT 440 paise per unit


The Government of Karnataka has extended free supply of power to

farmers as per Government Order No. EN 55 PSR 2008 dated

04.09.2008. As per this policy of GoK, the entire cost of supply to IP sets

up to and inclusive of 10 HP is being borne by the GoK through tariff

subsidy. In view of this all the categories under the existing LT-4a tariff

are covered under free supply of power.

Considering the cross subsidy contribution from categories other than

IP Sets & BJ/KJ Categories, the Commission determines the tariff for IP

Set under LT4(a) category as follows:

cxxvi

Approved CDT for IP Sets for FY17

Particulars CESC

Approved ARR in Rs.crore 3382.14

Revenue from other than IP & BJ/KJ installations in Rs.crore 2081.02

Amount to be recovered from IP & BJ/KJ installations in

Rs.crore 1301.12

Approved Sales to BJ/KJ installations in MU 37.72

Revenue from BJ/KJ installations at Average Cost of Supply in

Rs.crore 21.39

Amount to be recovered from IP Sets category in Rs.crore 1279.73

Approved Sale to IP Sets in MU 2622.39

Commission Determined Tariff (CDT) for IP Sets Category for

FY17 in Rs/unit 4.88

Accordingly, the Commission decides to approve tariff of Rs.4.88 per

unit as CDT for FY17 for IP Set category under LT4(a). In case the GoK

does not release the subsidy in advance, a tariff of Rs.4.88 per unit shall

be demanded and collected from these consumers.

Approved by the Commission

LT-4 (a) Irrigation Pump Sets

Applicable to IP Sets up to and inclusive of 10 HP


Fixed Charges per Month Free*

Energy Charges

CDT (Commission Determined Tariff):

488 paise per unit

* In case the GoK does not release the subsidy in advance, a tariff of

Rs.4.88 per unit shall be demanded and collected from these

consumers.

PAYMENT OF SUBSIDY BY GOVERNMENT OF KARNATAKA FOR FY17:

Several consumers and stakeholders who participated in the Public

Hearing held by the Commission have expressed that the ESCOMs may

be showing part of their technical losses against IP set consumption by

inflating the number of live pump sets, in order to report technical

losses lower than the actual losses prevailing in the distribution system.

Further, they have also expressed that there are many defunct, non-

working/idle IP sets provided to both open wells and bore wells which

have dried up and the same have not been identified / deleted from

the ledger accounts by the ESCOMs and that the ESCOMs, however,

cxxvii

are treating these IP sets as live IP set installations and claiming subsidy

from the Government, which needs to be stopped immediately. They

have requested the Commission to direct the ESCOMs to take up

enumeration of IP sets in their jurisdiction to identify defunct/dried up

wells and un-authorized IP sets in the field and take necessary action to

arrive at the correct number of IP sets in their account on the basis of

the enumeration report. The Commission is also of the view that IP sets

of defunct /dried up wells should be deleted in the accounts of the

ESCOMs in order to reflect exact numbers of live IP sets and its usage

for claiming subsidy from the Government and more importantly to

assess the performance of the ESCOMs.

The Commission has approved in respect of all the ESCOMs, a total

ARR of Rs.31,917.59 Crores for the FY17, which includes estimated

revenue of Rs.8,571.08 Crores against supply of 19,505.96 MU of power

to 25,64,999 number of IP sets (excluding HRECS). The Commission is of

the view that the actual number of IP set installations would be far less

than 25,64,999 approved for the FY17, if proper enumeration is carried

out to ascertain the correct number of IP sets by the ESCOMs.

Therefore, the ESCOMs need to immediately take up enumeration of IP

sets to arrive at the exact number of IP sets in use. The ESCOMs should

note that the quantum of sales to IP sets approved in ARR for FY17 is

subject to APR and the Commission will not accept such sales without

being substantiated in the manner specified by it.

The Commission has been issuing directives to ESCOMs for conducting

Energy Audit at the Distribution Transformer Centre (DTC)/feeder level

to enable detection and prevention of commercial losses. In view of

substantial progress in implementation of feeder segregation under

NJY scheme, the ESCOMs were also directed to submit IP set

consumption on the basis of the meter readings of the 11 kV feeders at

the substation level duly deducting the energy losses in 11kV lines,

distribution transformers & LT lines, in order to compute the

consumption of power by IP sets accurately. In this regard, the

cxxviii

Commission has noted that the ESCOMs have complied partly with

these directions and they have initiated measures to achieve full

compliance. The ESCOMs need to ensure full compliance as this has

direct impact on their revenues and tariff payable by other categories

of consumers.

For the forgoing reasons, the Commission directs the ESCOMs as

follows:

1) The ESCOMs shall manage supply of power to the IP sets for the

FY17, so as to ensure that it is within the quantum of subsidy

committed by the GoK. They shall procure power which is

proportional to such supply. In case the ESCOMs opt to supply

power to the IP sets in excess of the quantum corresponding to the

amount of subsidy the GoK has assured to be released for FY17, the

difference in the amount of subsidy relating to such supply shall be

claimed from the GoK. If the difference in subsidy is not paid by the

GoK, the same has to be collected from the IP set consumers.

2) The ESCOMs shall, immediately take up enumeration of IP sets,

11kV feeder wise by capturing the GPS co-ordinates namely

longitude, latitude and altitude of each live IP set in their jurisdiction

and complete this process within six months from the date of this

Order and submit the list of 11 kV feeder-wise IP sets’ census with

GPS co-ordinates to the Commission, on or before 15th October,

2016. The Commission would accordingly revise the number of IP

sets and its consumption for the FY17.

3) The ESCOMs shall compute the specific consumption and total sale

of energy to IP sets considering the month-wise energy input to 11

kV segregated agricultural feeders at the substation duly deducting

the energy losses prevailing in 11 kV lines, DTCs & LT Lines and

submit to the Commission, the monthly DTC wise/ feeder-wise

energy audit reports regularly in the formats prescribed by the

Commission, before 15th of succeeding month.

cxxix

Pending compliance of the directives contained in (2) and (3) above,

the Commission hereby advises the Government to release only 90% of

the subsidy allocated for FY17. The Commission will advise the

Government, in the last quarter of the financial year to release the

balance 10% of subsidy for the year, on satisfactory compliance of the

above directives.

cxxx

LT4 (b) Irrigation Pump Sets above 10 HP:

CESC’s Proposal

The existing and proposed tariff for LT-4(b) is as follows:

LT-4 (b) Irrigation Pump Sets:

Applicable to IP Sets above 10 HP


Order

Proposed by CESC

Fixed Charges per

Month

Rs. 30 per HP Rs. 30 per HP

Energy Charges 240 paise per unit 342 paise per unit

The existing and proposed tariff for LT4(c) is as follows:

LT-4 (c) (i) Irrigation Pump Sets :

Applicable to Private Horticultural Nurseries, Coffee and Tea

plantations up to & inclusive of 10 HP


Order

Proposed by CESC

Fixed Charges per

Month

Rs. 20 per HP Rs. 20 per HP


LT-4 (c) (ii) Irrigation Pump Sets:

Applicable to Private Horticultural Nurseries, Coffee and Tea

plantations above 10 HP.


Order

Proposed by CESC

Fixed Charges per

Month

Rs.30 per HP Rs.30 per HP


cxxxi

Approved Tariff:

The commission decides to revise the tariff in respect of these

categories as shown below:

LT-4 (b) Irrigation Pump Sets:

Applicable to IP Sets above 10 HP

Fixed Charges per Month Rs.40 per HP

Energy Charges for the entire

consumption

280 paise/unit

LT4(c) (i) Irrigation Pump Sets

Applicable to Horticultural Nurseries,

Coffee, Tea &Rubber Plantations up to& inclusive of 10 HP


Energy Charges 280 paise / unit

LT4 (c)(ii) Irrigation Pump Sets

Applicable to Horticultural Nurseries, Coffee, Tea& Rubber

Plantations above 10 HP


Energy Charges 280 paise/unit

6. LT5 Installations-LT Industries:

CESC’s Proposal

The existing and proposed tariffs are given below:

cxxxii

LT-5 LT Industries:

Applicable to all areas under CESC

i) Fixed charges


ii) Demand based Tariff (optional)

Details Description Existing Tariff as per

2015 Tariff Order

Proposed by CESC

Fixed Charges per Month

Above 5 HP and

less than 40 HP

Rs.45 per KW of

billing demand

Rs.45 per KW of

billing demand

40 HP and above

but less than 67 HP

Rs.60 per KW of

billing demand

Rs.60 per KW of

billing demand

67 HP and above Rs.150 per KW of

billing demand

Rs.150 per KW of

billing demand

iii. Energy Charges


Tariff Order

Proposed by CESC

For the first 500 units 475 paise per unit 577 paise/ unit

For the next 500

units

555 paise per unit 657 paise/ unit

For the balance

units



i)Rs.25 per HP for 5 HP &

below

ii) Rs.30 per HP for above 5 HP

& below 40 HP

iii) Rs.35 per HP for 40 HP &

above but below 67 HP

iv)Rs.100 per HP for 67 HP &

above

i) Rs.25 per HP for 5 HP &

below

ii) Rs.30 per HP for above 5

HP & below 40 HP




above

cxxxiii

LT-5(b) LT Industries:

Applicable to all areas other than those covered under LT-5(a).

i) Fixed charges



Details Description Existing Tariff as per

2015 Tariff Order

Proposed by CESC


Above 5 HP and

less than 40 HP

Rs.45 per KW of

billing demand

Rs.45 per KW of

billing demand

40 HP and above

but less than 67 HP

Rs.60 per KW of

billing demand

Rs.60 per KW of

billing demand

67 HP and above Rs.150 per KW of

billing demand

Rs.150 per KW of

billing demand

iii. Energy Charges


Tariff Order

Proposed by CESC

For the first 500 units 470 paise per unit 572 paise/ unit

For the next 500

units


For the balance

units


Existing ToD Tariff for LT5 : At the option of the consumers


i)Rs.25 per HP for 5 HP &

below

ii) Rs.30 per HP for above 5 HP

& below 40 HP




above

i) Rs.25 per HP for 5 HP &

below

ii) Rs.30 per HP for above 5

HP & below 40 HP




above

cxxxiv

ToD Tariff

Time of Day Increase (+ )/ reduction (-) in energy

charges over the normal tariff applicable

22.00 Hrs to 06.00 Hrs (-) 125 paise per unit

06.00 Hrs to 18.00 hrs 0

18.00 Hrs to 22.00 Hrs (+) 100 paise per unit

Proposed ToD Tariff for LT5 : At the option of the consumer

ToD Tariff




06.00 Hrs to 18.00 hrs 0


Commission’s Views/Decisions:

The decision of the Commission in its earlier Tariff Orders providing for

mandatory Time of Day Tariff for HT2 (a) HT2 (b) and HT2(c) consumers

with a contract demand of 500 KVA and above is continued. The

optional ToD will continue as existing for HT2 (a) HT2 (b) and HT2(c)

consumers with contract demand of less than 500 KVA. Further, for LT5

and HT1 consumers, the optional ToD is continued as existing.

The Commission has decided to continue with two tier tariff structure

introduced in the previous Tariff Orders, which are as follows:

i) LT5 (a): For areas falling under Municipal Corporations.

ii) LT5 (b): For areas other than those covered under LT5 (a) above.

Approved tariff:

The Commission approves tariff under LT-5(a) and LT-5(b) as given

below:

cxxxv

Approved Tariff for LT 5 :

Approved Tariff for LT 5 (a):

Applicable to areas under Municipal Corporations

i) Fixed charges


Fixed

Charges per

Month

i) Rs.30 per HP for 5 HP & below

ii) Rs.35 per HP for above 5 HP & below 40 HP

iii) Rs.40 per HP for 40 HP & above but below 67 HP

iv) Rs.100 per HP for 67 HP & above

Demand based Tariff (optional)

Fixed

Charges per

Month

Above 5 HP and less than 40

HP

Rs.50 per KW of billing

demand

40 HP and above but less

than 67 HP


demand

67 HP and above Rs.150 per KW of billing

demand

ii) Energy Charges


For the first 500 units 495 paise/unit

For the next 500 units 585 paise/ unit

For the balance units 615 paise/unit

Approved Tariff for LT 5 (b):

Applicable to all areas other than those covered under LT-5(a)

i) Fixed charges


Fixed

Charges per

Month






Fixed

Charges per


HP


demand

cxxxvi

Month 40 HP and above but less

than 67 HP

Rs. 65 per KW of billing

demand

67 HP and above Rs. 150 per KW of billing

demand

iii) Energy Charges

Details Approved tariff

For the first 500 units 485 paise/ unit



Approved TOD Tariff for LT5 :At the option of the consumer TOD Tariff



22.00 Hrs to 06.00 Hrs (-)125 paise per unit

06.00 Hrs to 18.00 hrs 0

18.00 Hrs to 22.00 Hrs (+)100 paise per unit

7. LT6 Water Supply Installations and Street Lights

CESC’s Proposal:

The existing and the proposed tariffs are given below:

LT-6(a): Water Supply


Order

Proposed by CESC

Fixed Charges per

Month

Rs. 35/HP/Month Rs. 35/HP/Month

Energy Charges 340 paise/unit 442 paise/unit

LT-6 (b) : Public Lighting


Order

Proposed by CESC

Fixed Charges

per Month

Rs. 50/KW/ Month Rs. 50/KW/Month

Energy Charges

Energy Charges

for LED Lighting

500 paise/unit

400 paise/unit

602 paise/unit

502 paise/unit

The Commission approves the tariff for water supply installations as

follows:

cxxxvii

Tariff Approved by the Commission for LT-6 (a): Water Supply

Details Approved Tariff

Fixed Charges per

Month

Rs. 45 /HP/Month


Tariff Approved by the Commission for LT-6 (b): Public Lighting


Fixed Charges per

Month

Rs. 60 /KW/Month


Energy Charges

for LED/ Induction

Lighting

450 paise/unit

8. LT 7- Temporary Installations and Advertising Hoardings:

CESC’s Proposal:

The existing rate and the rate proposed are given below: LT-7(a) Temporary Supply

a) Less than 67

HP:

Energy charge at 900

paise per unit subject

to a weekly minimum

of Rs. 160 per KW of

the sanctioned load.

Energy charge at 1002 paise

per unit subject to a weekly

minimum of Rs. 160 per KW of


LT-7(b) Temporary Power Supply on Permanent connection basis

a) Less than 67

HP:

Energy charge at 900

paise per unit subject

to a weekly minimum

of Rs. 40 per KW of the

sanctioned load.

Energy charge at 1002 paise

per unit subject to a weekly

minimum of Rs. 40 per KW of


Commission’s Views/Decision

Details Existing tariff as per

2015 Tariff Order

Proposed by CESC

Details Existing tariff as per

2015 Tariff Order

Proposed by CESC

cxxxviii

As decided in the previous Tariff Order, the tariff specified for

installations with sanctioned load / contract demand above 67 HP

shall be covered under the HT temporary tariff category under HT5.

With this, the Commission decides to approve the tariff LT-7 category

as follows:

APPROVED TARIFF SCHEDULE LT-7(a) Applicable to Temporary Power Supply for all purposes.

LT 7(a) Details Approved Tariff

Temporary Power

Supply for all

purposes.

Less than 67 HP:

Energy charges at 950 paise / unit

subject to a weekly minimum of Rs.170

per KW of the sanctioned load.

APPROVED TARIFF SCHEDULE LT-7(b)

Applicable to Hoardings & Advertisement boards, Bus Shelters with

Advertising Boards, Private Advertising Posts / Sign boards in the

interest of public such as Police Canopy Direction boards, and other

sign boards sponsored by Private Advertising Agencies / firms on

permanent connection basis.

cxxxix

LT 7(b) Details Approved Tariff

Power supply on

permanent

connection basis

Less than 67 HP:

Fixed Charges at Rs 50 per KW / month

& Energy charges at 950 paise / unit

H.T. Categories:

Time of the Tariff (ToD)

The Commission decides to continue the mandatory Time of Day Tariff

for HT2(a) and HT2(b) and HT2 (c) consumers with a contract demand

of 500 KVA and above. Further, the optional ToD will continue as

existing for HT2 (a) and HT2 (b) and HT2 (c) consumers with contract

demand of less than 500 KVA. The details of ToD tariff are indicated

under the respective tariff category.

9. HT1 Water Supply & Sewerage

CESC’s Proposal:

The Existing and the Proposed tariff are as given below:

Sl.

No.

Details Existing tariff as per 2015

Tariff Order

Proposed by CESC

1 Demand

Charges

Rs. 180 / kVA of billing

Demand / Month

Rs. 180 / kVA for billing

demand / Month

2 Energy Charges 410 paise per unit 512 paise per unit

Existing ToD tariff to HT-1 tariff to Water Supply & Sewerage installations at the option of the consumer

22.00 Hrs to 06.00 Hrs next day (-) 125 Paise per unit

06.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 Hrs (+) 100 Paise per unit

Proposed ToD Tariff to HT-1

Time of day Increase (+) / reduction (-) in the energy




cxl

22.00 Hrs to 06.00 Hrs next day (- ) 125 Paise per unit

06.00 Hrs to 18.00 Hrs 0


Commission’s Views/Decision:

The Commission approves the tariff for HT 1 Water Supply and Sewerage category as below:


Demand

Charges

Rs.190 / kVA of billing demand / Month

Energy Charges 450 paise/ unit

Approved ToD tariff to HT-1 tariff to Water Supply &

Sewerage installations at the option of the consumer

22.00 Hrs to 06.00 Hrs next day (-)125 Paise per unit

06.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 Hrs (+)100 Paise per unit

10. HT2 (a) – HT Industries & HT 2(b) – HT Commercial

CESC’s Proposal:

Existing and proposed tariff are as given below:



cxli

HT – 2 (a) - HT Industries - Applicable to all areas of CESC

Details Existing tariff as per Tariff

Order 2015

Proposed by CESC

Demand Charges Rs. 170 / kVA of billing

demand / Month


demand / Month

Energy Charges

(iii) For the first one

lakh units

(iv) For the

balance units

585 paise per unit

615 paise per unit

687 paise per unit

717 paise per unit

Railway traction and Effluent Plants


Order 2015

Proposed by CESC

Demand Charges Rs. 180 / kVA at billing

demand / Month


demand / Month

Energy Charges 555 paise per unit for all the

units

657 paise per unit for all

the units

Existing TOD Tariff for HT-2(a)



22.00 Hrs to 06.00 Hrs next day (- )125 Paise per unit

06.00 Hrs to 18.00 Hrs 0


Proposed TOD Tariff for HT-2(a)



22.00 Hrs to 06.00 Hrs next day (- ) 125 Paise per unit

06.00 Hrs to 10.00 Hrs +125 paise per unit

10.00 Hrs to 18.00 Hrs 0


Commission’s Views/Decision

The Commission approves the tariff for HT 2(a) category as below:

Approved Tariff for HT – 2 (a)

Applicable to all areas of CESC


Demand Charges Rs. 180 / kVA of billing demand / Month

Energy Charges

cxlii

For the first one lakh units 620 paise/ unit

For the balance units 660 paise/ unit

Railway Traction & Effluent Treatment Plants


Demand Charges Rs.190 / kVA of billing demand / Month

Energy Charges 590 paise / unit for all the units

11. HT-2 (b) HT Commercial

CESC’s Proposal:

The Existing and proposed tariff are as given below:

HT – 2 (b)-HT Commercial - Applicable to all areas of CESC


Order 2015

Proposed by CESC


demand / Month


demand / Month

Energy Charges

(i) For the first two

lakh units

735 paise per unit

837 paise per unit

(ii)For the balance

units

765 paise per unit 867 paise per unit

Proposed ToD Tariff to HT-2(b)



22.00 Hrs to 06.00 Hrs next day (- ) 125 paise per unit


10.00 Hrs to 18.00 Hrs 0



The Commission approves the following tariff for HT 2 (b) consumers:

Approved tariff for HT – 2 (b) - HT Commercial

Applicable to all areas of CESC



Energy Charges

(i) For the first two lakh units 785 paise per unit

(ii) For the balance units 815 paise per unit

cxliii

Note: The above tariff under HT2 (b) is not applicable for construction of new

industries. Such power supply shall be availed under the temporary

category HT5.

12 HT – 2 (c) – Applicable to Hospitals and Educational Institutions:

The Existing and proposed tariff are given below:

HT-2 ( c) (i)- Applicable to Government Hospitals & Hospitals run by

Charitable Institutions & ESI Hospitals and

Universities, Educational Institutions belonging to Government, Local

Bodies and Aided Institutions and Hostels of all Educational Institutions.

Details Existing Tariff as per

Tariff Order 2015

Proposed by CESC


demand / Month


demand / Month

Energy Charges

(i) For the first one lakh units 560 paise per unit 662 paise per unit

(ii) For the balance units 610 paise per unit 712 paise per unit

cxliv

Existing and proposed tariff for HT – 2 (c) (ii) -

Applicable to Hospitals/Educational Institutions

other than those covered under HT2(c) (i)

Details Existing Tariff as per Tariff

Order 2015

Proposed by CESC

Demand Charges Rs.170 / kVA of billing

demand / Month

Rs.170 / kVA of billing

demand / Month

Energy Charges

(i) For the first one lakh units 660 paise per unit 762 paise per unit

(ii) For the balance units 710 paise per unit 812 paise per unit


The Commission approves the following tariff for HT 2 (c) consumers:

Approved tariff for HT – 2 (c) (i)

Applicable to Government Hospitals, Hospitals run by Charitable

Institutions, ESI Hospitals, Universities and Educational Institutions belonging to

Government & Local Bodies, Aided Educational Institutions and Hostels of all

Educational Institutions


Demand Charges Rs. 180/ kVA of billing demand / Month

Energy Charges

(i) For the first one lakh units 600 paise per unit


cxlv

Approved tariff for HT – 2 (c) (ii) - Applicable to Hospitals and Educational Institutions other than those covered

under HT2(c) (i)



Energy Charges

(i) For the first one lakh units 700 paise per unit


Time of the Day Tariff:

Approved ToD Tariff to HT-2(a), HT- 2(b) and HT2(c)



22.00 Hrs to 06.00 Hrs next day (- )125paise per unit

06.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 Hrs (+)100paise per unit

13. HT-3(a) Lift Irrigation Schemes under Government Departments /

Government owned Corporations/ Lift Irrigation Schemes under Pvt

/Societies:

CESC’s Proposal:

The Existing and proposed tariff are given below:

HT – 3 (a) Lift Irrigation Schemes

HT 3(a) (i) - Applicable to LI Schemes under Government Departments

/ Government owned Corporations

Details Existing tariff as per Tariff Order

2015

Proposed charges by

CESC

Energy

Charges/

Minimum

Charges

170 paise / unit

Subject to an annual minimum

of Rs.1000 per HP / annum

272 paise / unit

Subject to an annual

minimum of Rs. 1000

per HP / annum

HT 3(a) (ii) Applicable to Pvt. LI Schemes and Lift Irrigation

Societies

fed through Express / Urban feeders


Order 2015

Proposed by CESC

Fixed Charges Rs. 30 / HP / Month of

sanctioned load

Rs. 30 / HP / Month of

sanctioned load

Energy Charges 170 paise / unit 272 paise / unit

cxlvi

HT 3(a) (iii) Applicable to Pvt. LI Schemes and Lift Irrigation Societies

other than those covered under HT-3 (a)(ii)


Order 2015

Proposed by CESC

Fixed Charges Rs. 10 / HP / Month of

sanctioned load

Rs. 10 / HP / Month of

sanctioned load

Energy Charges 170 paise / unit 272 paise / unit

Commission’s decision:

The Commission approves the following tariff for HT-3(a) consumers:

Approved tariff for HT-3 (a) (i)

Applicable to LI schemes under Govt. Dept. / Govt. owned Corporations

Energy Charges /

Minimum Charges

200 paise/ unit

subject to an annual minimum of Rs. 1120

per HP / annum

Approved tariff for HT 3 (a) (ii)

Applicable to Private LI Schemes and Lift Irrigation Societies fed through

express / urban feeders

Fixed Charges Rs.40/ HP / Month of sanctioned load


cxlvii

Approved tariff for HT 3 (a) (iii)

Applicable to Private LI Schemes and Lift Irrigation Societies

other than those covered under HT 3 (a) (ii)

Fixed Charges Rs.20 / HP / Month of sanctioned load


14. HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,

Private Horticulture Nurseries, Coffee, Tea, Coconut & Arecanut

Plantations:

CESC’s Proposal:

The existing and the proposed tariff are as given below:

HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,

Private Horticulture Nurseries, Coffee, Tea, Coconut & Arecanut

Plantations:


Order 2015

Proposed tariff by CESC

Energy Charges /

minimum

Charges

370 paise / unit

subject to an annual

minimum of Rs.1000 per HP

of sanctioned load

472 paise / unit

subject to an annual

minimum of Rs.1000 per HP

of sanctioned load


The Commission approves the tariff for this category as indicated

below:

Approved Tariff

HT-3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,

Private Horticulture Nurseries, Coffee, Tea, Rubber, Coconut & Arecanut

Plantations:


Energy Charges /

minimum Charges

400 paise / unit

subject to an annual minimum

of Rs.1120 per HP of sanctioned

load

cxlviii

15. HT-4- Residential Apartments/ Colonies:

CESC’s Proposal:

The existing and proposed tariff for this category are as follows:

Existing and proposed tariff for HT – 4 - Residential Apartments/

Colonies Applicable to all areas of CESC


Order 2015

Proposed tariff by CESC

Demand Charges Rs.100 / kVA of billing

demand

Rs.100 / kVA of billing

demand

Energy Charges 550 paise per unit 652 paise/ unit


The Commission approves the tariff for this category as indicated

below:

Approved tariff

HT – 4 Residential Apartments/ Colonies Applicable to all areas of

CESC

Demand Charges Rs. 110 / kVA of billing demand

Energy Charges 585 Paise/ unit

16. TARIFF SCHEDULE HT-5

CESC’s Proposal:

The existing and proposed tariff for this category are as follows:

HT – 5 – Temporary supply

67 HP and above: Existing Proposed

Fixed Charges /

Demand Charges

Rs.210/HP/month for the

entire sanction load /

contract demand

Rs.210/HP/month for the

entire sanction load /

contract demand

Energy Charges 900 paise / unit (weekly

minimum of Rs.160/- per

KW is not applicable)

1002 paise / unit (weekly

minimum of Rs.160/- is not

applicable)

Commission’s Views/Decisions:

TARIFF SCHEDULE HT-5

cxlix

As approved in the Commission’s Tariff Order dated 2nd March 2015,

this tariff is applicable to 67 HP and above hoardings and

advertisement boards and construction power for industries excluding

those category of consumers covered under HT2(b) Tariff schedule

availing power supply for construction power for irrigation and power

projects and also applicable to power supply availed on temporary

basis with the contract demand of 67 HP and above of all categories.

Approved Tariff for HT – 5 – Temporary supply

67 HP and above: Approved Tariff

Fixed Charges /

Demand Charges

Rs.220 /HP/month for the entire sanction load /

contract demand.

Energy Charges 950 paise / unit.

The Approved Tariff schedule for FY17 is enclosed in Annex IV of this

Order.

6.6 Other Issues

6.6.1 Tariff for Green Power:

In order to encourage generation and use of green power in the State,

the Commission decides to continue the existing green Tariff of 50

paise per unit as the additional tariff over and above the normal tariff

to be paid by HT-consumers, who opt for supply of green power from

out of the renewable energy procured by distribution utilities over and

above their Renewable Purchase Obligation (RPO).

6.6.2 Determination of wheeling charges for FY17:

CESC in its tariff filing had referred to the orders of the Commission

dated 04.07.2014 and 08.07.2014 regarding wheeling and banking

applicable to RE sources. As such the Commission in its preliminary

observations had directed CESC to furnish the working details of

normal wheeling charges in line with the approach adopted by the

Commission in its earlier orders.

cl

CESC in their replies to preliminary observations has furnished the

following details on wheeling charges:

Wheeling charges for FY-17

Distribution ARR-Rs. Crs. 522.04

Sales -MU 6009.79

Wheeling charges-paise/unit: 86.86

HT-Network @ 30% 26.06

LT-Network @ 70% 60.80

Note: CESC has not indicated applicable losses in its replies

The approach of the Commission regarding wheeling & banking

charges is discussed in the following paragraphs:

The Commission has considered the approved ARR pertaining to

distribution wires business and has proceeded determining the

wheeling charges as detailed below:

6.6.3 Wheeling within CESC Area:

The allocation of the distribution network costs to HT and LT networks for

determining wheeling charges is done in the ratio of 30:70, as was

being done earlier. Based on the approved ARR for distribution

business, the wheeling charges to each voltage level is worked out as

under:

TABLE – 6.2

Wheeling Charges

Distribution ARR-Rs. Crs 371.08

Sales-MU 5966.83

Wheeling charges- paise/unit 62.19

Paise/unit

HT-network 18.66

LT-network 43.53

cli

In addition to the above, the following technical losses are applicable

to all open access/wheeling transactions:

Loss allocation % loss

HT 3.77

LT 8.03 Note: Total loss is allocated to HT, LT & Commercial loss based on energy flow

diagram furnished by CESC.

The actual wheeling charges payable (after rounding off) will depend

upon the point of injection & point of drawal as under:

paise/unit

Injection point

Drawal point

HT LT

HT 19 [3.77%] 62[11.80%]

LT 62[11.80%] 43[8.03%] Note: Figures in brackets are applicable loss

The wheeling charges as determined above are applicable to all the

open access or wheeling transactions for using the CESC’s network,

except for energy transmitted or wheeled from Renewable sources to

the consumers in the State.

6.6.4 WHEELING OF ENERGY USING TRANSMISSION NETWORK OR NETWORK OF

MORE THAN ONE LICENSEE

In case the wheeling of energy [other than RE sources wheeling to

consumers in the State] involves usage of Transmission network or

network of more than one licensee, the charges shall be as indicated

below:

i. If only transmission network is used, transmission charges

determined by the Commission shall be payable to the

Transmission Licensee.

ii. If the Transmission network and the ESCOMs’ network are used,

Transmission Charges shall be payable to the Transmission

Licensee. Wheeling Charges of the ESCOM where the power is

drawn shall be shared equally among the ESCOMs whose

networks are used.

clii

Illustration:

If a transaction involves transmission network &CESC’s network and 100

units is injected, then at the drawal point the consumer is entitled for

85.14 units, after accounting for Transmission loss of 3.47% &CESC’s

technical loss of 11.80%.

The Transmission charge in cash as determined in the Transmission Tariff

order shall be payable to KPTCL & Wheeling charge of 62 paise per

unit shall be payable to CESC. In case more than one ESCOM is

involved the above 62 paise shall be shared by all ESCOMs involved.

iii. If ESCOMs’ network only is used, the Wheeling Charges of the

ESCOM where the power is drawn is payable and shall be

shared equally among the ESCOMs whose networks are used.

Illustration:

If a transaction involves injection to BESCOM’S network & drawal at

CESC’s network, and 100 units is injected, then at the drawal point the

consumer is entitled for 88.20 units, after accounting CESC’s technical

loss of 11.80%.

The Wheeling charge of 62 paise per unit applicable to CESC shall be

equally shared between CESC& BESCOM.

6.6.5 CHARGES FOR WHEELING OF ENERGY BY RE SOURCES (NON-REC ROUTE

) TO CONSUMERS IN THE STATE

The separate orders issued by the Commission from time to time in the

matter of wheeling and banking charges for RE sources (non-rec route

) wheeling energy to consumers in the State shall be applicable.

cliii

6.6.6 CHARGES FOR WHEELING ENERGY BY RE SOURCS WHEELING ENERGY

FROM THE STATE TO A CONSUMER/OTHERS OUTSIDE THE STATE AND FOR

THOSE OPTING FOR RENEWABLE ENERGY CERTIFICATE[REC]

In case the renewable energy is wheeled from the State to a consumer

or others outside the State, the normal wheeling charges as

determined in para 6.6.3 and 6.6.4 of this order shall be applicable. For

Captive RE generators including solar power projects opting for RECs,

the wheeling and banking charges as specified in the orders issued by

the Commission from time to time shall be applicable.

6.7 Other tariff related issues:

i) Cross subsidy surcharge:

CESC in its tariff petition has stated that based on the approach

adopted by the Commission in the Tariff Order,2015, it has proposed

the Cross Subsidy surcharge as indicated below:

Paise/unit

Voltage Level HT-2a HT-2b HT-2C HT-4 HT-5

66KV &

above

92 248 114 9 490

HT level-

11KV/33KV

70 226 92 0 468

The determination of cross subsidy surcharge by the Commission is

discussed in the following paragraphs:-

The Commission in its MYT Regulations has specified the methodology

for calculating the cross subsidy surcharge. Based on the above

methodology, the category wise cross subsidy will be as indicated

below:

Particulars

HT-1

Water

Supply

HT-2a

Industries

HT-2b

Commercial

HT-2

(C)

HT3 (a)

Lift

Irrigation

HT3 (b)

Irrigation &

Agricultural

Farms

HT-4

Residential

Apartments

HT5

Temporary

Average Tariff-

Paise/unit 498.81 721.70 902.87 735.25 181.60 398.01 625.67 1509.97

cliv

Cost of supply

at 5% margin

@ 66 kV and

above level

565.04 565.04 565.04 565.04 565.04 565.04 565.04 565.04

Cross subsidy

surcharge

paise/unit @ 66

kV & above

level

-66.23 156.66 337.83 170.21 -383.44 -167.03 60.63 944.93

Cost of supply

at 5% margin

@ HT level

607.04 607.04 607.04 607.04 607.04 607.04 607.04 607.04

Cross subsidy

surcharge

paise/unit @ HT

level

-108.22 114.66 295.83 128.21 -425.44 -209.03 18.63 902.94

For the categories where the surcharge is negative, the surcharge is

made zero at the respective voltage level. For the remaining

categories, the Commission decides to determine the surcharge at

75% (instead of the 80% considered in its tariff order dated 02.03.2015)

of the cross subsidy amount as worked out above, as the cross subsidy

surcharge has to be gradually reduced. Thus, the cross subsidy

surcharge is determined as under rounding off to nearest paise:

Paise/unit

Voltage

level

HT-1 HT-2a HT-2b HT-2c HT-3a HT-3b HT-4 HT-5

66 kV &

above

0 118 253 128 0 0 45 709

HT level-11

kV/33kV

0 86 222 96 0 0 14 677

The cross subsidy surcharge determined in this order shall be

applicable to all open access/wheeling transactions in the area

coming under CESC. However, the above CSS shall not be applicable

to captive generating plant for carrying electricity to the destination of

his own use and for those renewable energy generators who have

been exempted from CSS by the specific orders of the Commission.

The Commission directs the Licensees to account the transactions

under open access separately. Further, the Commission directs the

Licensees to carry forward the amount realized under Open

clv

Access/wheeling to the next ERC, as it is an additional income to the

Licensees.

iii) Rebate for use of Solar Water Heater:

The Commission has decided to retain the existing rebate of 50 paise

per unit subject to a maximum of Rs.50 per installation per month for

use of solar water heaters.

iv) Prompt payment incentive:

The Commission had approved a prompt payment incentive (i) in all

cases of payment through ECS and (ii) in the case of monthly bill

exceeding Rs.1,00,000/- (Rs. One lakh). The earlier rate of incentive was

0.25 % of the bill amount. The Commission decides to continue the

same.

v) Relief to Sick Industries:

The Government of Karnataka has extended certain reliefs for

revival/rehabilitation of sick industries under the New Industrial Policy

2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001. Further, the

Government of Karnataka has issued G.O No.CI2 BIF 2010, dated

21.10.2010. The Commission, in its Tariff Order 2002, has accorded

approval for implementation of reliefs to the sick industries as per the

Government policy and the same was continued in the subsequent

Tariff Orders. In view of issue of the G.O No.CI2 BIF 2010, dated

21.10.2010, the Commission has accorded approval to the ESCOMs for

implementation of the reliefs extended to sick industrial units for their

revival / rehabilitation on the basis of the orders issued by the

Commissioner for Industrial Development and Director of Industries &

Commerce, Government of Karnataka.

vi) Power Factor

clvi

The Commission in its previous order had retained the PF threshold limit

and surcharge, both for LT and HT installations at the then existing levels

in the Tariff Order 2005. The Commission has decided to continue the

same in the present order as indicated below:

LT Category (covered under LT-3, LT-4, LT-5 & LT-6 where motive power

is involved): 0.85 and HT Category: 0.90

vii) Rounding off of KW / HP:

In the Tariff Order 2005, the Commission had approved rounding off of

fractions of KW / HP to the nearest quarter KW / HP for the purpose of

billing and the minimum billing being for 1 KW / 1HP in respect of all the

categories of LT installations including IP sets. This shall continue to be

followed. In the case of street light installations, fractions of KW shall be

rounded off to the nearest quarter KW for the purpose of billing and

the minimum billing shall be for a quarter KW.

viii) Interest on delayed payment of bills by consumers:

The Commission, in its previous Order had approved interest on

delayed payment of bills at 12% per annum. The Commission decides

to continue the same in this Order also.

ix) Security Deposit (3 MMD/ 2 MMD):

The Commission had issued K.E.R.C. (Security Deposit) Regulations,

2007 on 01.10.2007 and the same has been notified in the Official

Gazette on 11.10.2007. The payment of security deposit shall be

regulated accordingly, pending orders of the Hon’ble High Court in

WP 18215/2007.

x) Mode of Payment by consumers:

The Commission, in its previous Order had approved revenue payment

in cash/cheque/DD of amounts up to and inclusive of Rs.10,000/-, and

payment of amounts above Rs.10,000 to be made only through

cheque. The consumers can also make payment of power bills

clvii

through Electronic Clearing System((ECS)/ Credit card/ online E-

payment up to the limit prescribed by the RBI.

CESC in its application had proposed to consider the collection of

power supply bills above One lakh rupees, through RTGS/NEFT. The

Commission has examined the request of CESC, and decides to

approve the payment of power supply bills above One lakh rupees,

through RTGS/NEFT, at the option of the consumer.

clviii

6.8 Cross Subsidy Levels for FY17:

The Hon’ble Appellate Tribunal for Electricity (ATE), in its order dated 8th

October, 2014, in Appeal No.42 of 2014, has directed the Commission

to clearly indicate the variation of anticipated category-wise average

revenue realization with respect to overall average cost of supply in

order to implement the requirement of the Tariff Policy that tariffs are

within ±20% of the average cost of supply, in the tariff orders being

passed in the future. It has further directed the Commission to also

indicate category-wise cross subsidy with reference to voltage-wise

cost of supply so as to show the cross subsidies transparently.

In the light of the above directions, the variations of the anticipated

category-wise average realization with respect to the overall average

cost of supply and also with respect to the voltage wise cost of supply

of CESC and the cross subsidy thereon, is Indicated in ANNEXURE - III of

this Order. It is the Commission’s endeavor to reduce the cross subsidies

gradually as per the Tariff policy.

6.9 Effect of Revised Tariff

As per the KERC (Tariff) Regulations 2000, read with the MYT Regulations

2006, the ESCOMs have to file their applications for ERC/Tariff before

120 days of the close of each financial year in the control period. The

Commission observes that the ESCOMs have filed their applications for

revision of tariff on 15th December, 2015 (within the time extended by

the Commission). As the tariff revision is effective from 1st April, 2016

onwards, ESCOMs would be recovering revenue for eleven months of

the Financial Year.

A statement indicating the proposed revenue and approved revenue

is enclosed vide Annexure III and detailed tariff schedule is enclosed

vide Annexure IV.

6.10 Summary of Tariff Order:

clix

The Commission has approved an ARR of Rs.3382.14 Crores for FY17

which includes the surplus for FY15 of Rs.22.90 Crores and the

Regulatory Asset of Rs.120.41 Crores with a total gap in revenue of

Rs.285.72 Crores as against CESC’s proposed ARR of Rs.3778.37

Crores.

The Commission has allowed recovery of entire gap in revenue with

additional revenue of Rs.285.72 Crores on Tariff Revision as against

the additional revenue of Rs.613.15 Crores proposed by CESC for

FY17.

CESC had proposed an increase of 102 paise per unit for all

categories of consumers resulting in average increase in retail supply

tariff by 19.37%. The Commission has approved an average increase

of 48 paise per unit in the tariff. The average increase in retail supply

tariff of all the consumers for FY17 is 9%.

The Commission has allowed for recovery of additional

revenue partly by increase in fixed charges ranging from Rs.5

per KW/HP/KVA to Rs.10 per KW/HP/KVA.

The Commission has allowed for recovery of additional

revenue partly by increase in the energy charges in the range

of 15 paise per unit to 50 paise per unit.

The increase in energy charges for commercial category is 20

paise per unit, for LT Industries category is in the range of 15

paise per unit to 30 paise per unit and for other categories is in

the range of 20 paise per unit to 50 paise per unit.

Time of the day tariff which was made mandatory in the previous

Tariff Orders for installations under HT2 (a), HT2(b) and HT2(c) with

contract demand of 500KVA and above is continued in this Order.

clx

Green tariff of additional 50 paise per unit over and above

the normal tariff which was introduced in the previous Tariff

Orders for HT industries and HT commercial consumers at their

option, to promote purchase of renewable energy from

ESCOMs, is continued in this Order.

As in the previous Order, the Commission has continued to

provide a separate fund for facilitating better Consumer

Relations /Consumer Education Programmes.

The cap on cost of short-term power purchase to meet

shortfall in supply is continued at Rs.4.50 per unit.

6.11 Commission’s Order

1. In exercise of the powers conferred on the Commission under

Sections 62, 64 and other provisions of the Electricity Act, 2003, the

Commission hereby determines and notifies the retail supply tariff of

CESC for FY17 as stated in Chapter-6 of this Order.

2. The tariff determined in this order shall be applicable to the

electricity consumed from the first meter reading date falling on or

after 1st April, 2016.

3. This Order is signed dated and issued by the Karnataka Electricity

Regulatory Commission at Bengaluru this day, the 30th March, 2016.

Sd/-

(M.K.Shankaralinge Gowda)

Chairman

Sd/-

(H.D.Arun Kumar)

Member

Sd/-

(D.B.Manival Raju)

Member

clxi

APPENDIX

ISSUE OF NEW DIRECTIVES AND

REVIEW OF COMPLIANCE OF DIRECTIVES ISSUED BY THE

COMMISSION

1. The following new directive is issued by the Commission

Directive on Energy Conservation:

In view of the increase in cost of electricity and the constraints in

capacity additions to generate additional power to meet the

increase in demand, it is imperative that all the consumers use

energy efficient equipment and adopt energy conservation

measures, in their daily activities to conserve electricity. To

achieve this, the Commission has notified the Demand Side

Management Regulations, 2015, on 28.07.2015. As per these

Regulations, the ESCOMs have to implement Demand Side

Management (DSM) and Energy Efficiency (EE) programmes in

their jurisdiction, to mitigate peak and energy shortages by

adoption of conservation technologies for more efficient use of

electricity. The objective is to flatten the load curve by reducing

the loads in their respective areas leading to reduction in system

peak load.

The Commission has noted that the ESCOMs have already

initiated the DELP (Domestic Efficient Lighting programme) for

supplying/distributing 9 watts capacity LED bulbs to the

clxii

consumers at a subsidised price. This initiative will certainly help

conserve substantial quantum of energy used for domestic

lighting, provided all the consumers accept and adopt it.

In addition to the above initiative, the Commission notes that

there is a scope for energy conservation in use of equipment like

Air Conditioners, Fans, Refrigerators etc., in domestic/

commercial and industrial installations. Also, use of LED

lamps/energy efficient lamps like induction lamps in all the

streetlight installations including high mast street light installations

should be considered so as to make energy conservation

measures more broad based across wider range of consumers.

Therefore, the Commission hereby directs the ESCOMs to service

all the new installations only after ensuring that the BEE *****

(Bureau of Energy Efficiency five star rating) rated Air

Conditioners, Fans, Refrigerators, etc., are being installed in the

applicant consumers’ premises.

Similarly, all new streetlight/high mast installations including

extensions made to the existing streetlight circuits shall be

serviced only with LED lamps/energy efficient lamps like

induction lamps.

Further, the Commission directs the ESCOMs to take up

programmes to educate all the existing domestic, commercial

and industrial consumers, through media and distribution of

pamphlets along with monthly bills, regarding the benefits of

using five star rated equipment certified by the Bureau of Energy

Efficiency in reduction of their monthly electricity bills and

conservation of precious energy.

clxiii

2. Review of Compliance of Existing Directives:

The Commission had in its earlier tariff orders and other

communications issued several directives for compliance by the CESC.

While reproducing such directives, the compliance of the directives as

reported by the CESC is analysed in this Section.

i. Directive on implementation of Standards of Performance (SoP):

The Directive was:

“The CESC is directed to strictly implement the specified Standards of

Performance while rendering services related to supply of power as per

the KERC (Licensee’s Standards of Performance) Regulations, 2004.

Further, the CESC is directed to display prominently in Kannada the

details of various critical services such as replacing the failed

transformers, attending to fuse off call / line breakdown complaints,

arranging new services, change of faulty energy meters, reconnection

of power supply, etc., rendered by it as per Schedule-1 of the KERC

(Licensee’s Standards of Performance) Regulations, 2004 and

Annexure-1 of the KERC (Consumer Complaints Handling Procedure)

Regulations, 2004, on the notice boards in all the O & M sections and O

& M sub-divisions in its jurisdiction for the information of consumers as

per the following format.

Nature of

Service

Standards of

performance

(indicative

minimum time

limit for

rendering

services)

Primary

responsibility

centers where

to lodge

complaint

Next higher

Authority

Amount

payable to

affected

consumer

clxiv

The CESC shall implement the above directive within one month from

the date of the order and report compliance to the Commission

regarding the implementation of the directives.”

Compliance by the CESC

The CESC has implemented the specified Standards of Performance while

rendering services related to supply of power as per the KERC (Licensee’s

Standards of Performance) Regulations, 2004. The CESC has displayed

prominently in Kannada the details of various services such as replacing the

failed transformers, attending to fuse off call / line breakdown complaints,

arranging new services, change of faulty energy meters, reconnection of

power supply, etc., rendered as per Schedule-1 of the KERC (Licensee’s

Standards of Performance) Regulations, 2004 and Annexure-1 of the KERC

(Consumer Complaints Handling Procedure) Regulations, 2004, on the notice

boards in all the O & M sections and O & M subdivisions for the information of

consumers. The details have already been furnished to the Commission vide

letter No: CESC/SEE (Coml.)/EE (Com)/2015-16/12661-66, dated 07.11.2015.

Implementation of the KERC directive on Standards of Performance

(SOP) for the month of October 2015:

SL

NO Circle

No of

O&M

sub

divisions

existing

No of

O&M

sections

existing

No of

O&M sub

divisions

where

the

details

displayed

No of

O&M

sections

where

the

details

displayed

No of

complaints

received

for the

delay in

rendering

the service

Amount

paid to

the

consumer

in Rs

Cumulative

No. of hrs

of delay in

rendering

services

Cumulative

amount

paid to the

consumer

in Rs.

Nos Nos Nos Nos Nos Nos Nos Nos

1 Works circle 19 74 19 74 0 0 0 0

2 O&M Circle 13 49 13 49 0 0 0 0

3 Mandya Circle 13 52 13 52 0 0 0 0

4 Hassan Circle 16 65 16 65 0 0 0 0

CESC Total 61 240 61 240 0 0 0 0

Commission’s Views:

The Commission notes that the CESC has complied with the directive by

displaying the details of specified Standards of Performance on the

notice boards in all its O & M sections and subdivision offices for the

clxv

information of the consumers. The Commission directs the CESC to

adhere to the specified standards of performance while rendering

services to ensure that consumer complaints are attended to in a time

bound manner.

The Commission reiterates its directive to the CESC to continue to strictly

implement the specified Standards of Performance while rendering

services related to supply of power as per the KERC (Licensee’s

Standards of Performance) Regulations, 2004. Compliance of the same

shall be submitted to the Commission on a quarterly basis regularly.

ii. Directive on use of safety gear by linemen:

The directive issued was:

“The Commission directs the CESC to ensure that all the linemen in its

jurisdiction are provided with proper and adequate safety gear and

also ensure that the linemen use such safety gear provided while

working on the network. The CESC should sensitise the linemen about

the need for adoption of safety aspects in their work through suitably

designed training and awareness programmes. The CESC is also

directed to device suitable reporting system on the use of safety gear

and mandate supervisory/higher officers to regularly cross check the

compliance by the linemen and take disciplinary action on the

concerned if violations are noticed. The CESC shall implement this

directive within one month from the date of this order and submit

compliance report to the Commission.”


The CESC has provided proper and adequate safety gear to all the linemen in

the jurisdiction and is also ensuring that the linemen use such safety gear

provided while working on the distribution system. The CESC is conducting

training programmes for the linemen wherein the necessity of adoption of

safety aspects in their work is constantly highlighted. The CESC has also

clxvi

directed the field officers to monitor the proper up keep of the safety gear

provided and keep in stock reasonable spare sets of safety gear. The action

also has been taken to monitor the use of the same by linemen and take

disciplinary action on the concerned if violations are noticed. Further, the

CESC has already put in place a suitable reporting system on the use of safety

gear by linemen. A compliance report in this regard has already been sent to

the Commission vide letter No: CESC/SEE (Coml.)/RA-1/1/15-16/7155, dated

18.08.2015.

The details of the same are furnished below:

Implementation of KERC Directive on use of safety gear by linemen for

the month of October 2015

S

l

N

o

Circle

No of

Lineme

n /Asst

Lineme

n

Existing

No of

Lineme

n/Asst.

Lineme

n

Provide

d with

safety

gear

No of

trainin

g and

aware

ness

progra

mme

condu

cted

No of

surpris

e

Inspec

tions

condu

cted

regard

ing

use of

Safety

gear

/Unifor

m by

Linem

en

No

of

Noti

ces

give

n to

the

Line

men

for

not

usin

g

Safet

y

gear

Discipl

inary

action

s

taken

again

st

Linem

en

Cumul

ative

No of

trainin

g and

aware

ness

progra

mme

condu

cted

Cumul

ative

No of

surpris

e

Inspec

tions

condu

cted

regard

ing

use of

Safety

gear

/Unifor

m by

Linem

en

Cumul

ative

No of

notice

s

given

to the

Linem

en for

not

using

Safety

gear

year

Cumul

ative

No of

discipli

nary

action

s

taken

agains

t

Linem

en

Nos Nos Nos Nos Nos Nos Nos Nos Nos Nos

1 2 3 4 5 6 7 8 9 10 11 12

1 Works

circle

599 579 17 46 2 0 92 639 5 0

2 O&M

Circle

361 335 4 13 0 0 49 138 0 0

3 Mandy

a

497 408 6 22 2 0 30 149 21 2

4 Hassan 594 594 4 7 0 0 59 146 4 0

CESC Total 2051 1916 31 88 4 0 230 1072 30 2


The Commission notes that the CESC has provided safety gadgets to its

linemen and also taken action to provide additional safety tools

required for them to work in the field. It is important that the CESC

should continue to focus on safety aspects to reduce the electrical

clxvii

accidents occurring due to negligence on the part of the field staff and

non-adherence of safety procedures by them while working on the

network. It is also important that the frequency of imparting training to

linemen should be increased so that adherence to safety aspects

becomes part of their routine.

The Commission reiterates its directive that the CESC shall ensure that all

the linemen in its jurisdiction are provided with proper and adequate

safety gear and the linemen use such safety gear provided to them

while working on the network.

The compliance in this regard shall be submitted once in a quarter to

the Commission regularly.

iii. Directive on providing Timer Switches to Street lights by the

ESCOMs

The directive issued was:

“The Commission directs the CESC to install timer switches using own

funds to all the street light installations in its jurisdiction wherever the

local bodies have not provided the same and later recover the cost

from them. The CESC shall also take up periodical inspection of timer

switches installed and ensure that they are in working conditions. They

shall undertake necessary repairs / replacement work, if required and

later recover the cost from local bodies. The compliance regarding the

progress of installation of timer switches to street light installations shall

be reported to the Commission within three months of the issue of the

order.”


With the financial support of Rs.50 lakh from the B.E.E, KREDL has awarded

the work of providing energy saver units to streetlight control points in Mysuru

city to M/s Energy Efficiency Services Limited. This system includes capacitors

clxviii

for improvement of power factor, automatic switch “OFF” and switch “ON”

and brightness dimming of streetlights after midnight.

The Central Zone sub-division of the CESC was selected for providing

energy saver units to streetlight control points as a demonstration

project. A total of 50 numbers of energy savers of the following

capacities have been installed at various locations in the heart of

Mysuru city and are in operation from 05.01.2015.

3 KVA Capacity-17 numbers



The minimum energy savings from this energy saver unit is 20 per cent of the

total consumption. The system is supplied and maintained by M/s OMNE

AGATE Systems Pvt. Limited, Chennai. The complete energy saving system is

guaranteed and is to be maintained for 3 years from the date of operation.

Depending on the performance, it is intended to extend the project to other

areas by M/s KREDL.

Apart from this, 270 streetlight circuits are provided with timer switches by the

local bodies as at the end of June, 2015. The remaining 17,263 circuits will be

provided with timer switches in a phased manner after studying the merits and

de-merits of the system installed already.


The Commission notes that the CESC has not complied with the

directive of installing timer switches in its jurisdiction. However, it is noted

that a few timer switches have been installed to streetlight installations

in Mysuru city by the local bodies and M/s KREDL as reported by the

CESC. The CESC is directed to install timer switches in other areas in its

jurisdiction by coordinating with the concerned local bodies.

Further, it is suggested that providing timer switches to streetlight

installations under “Nagara Jyothi” programme through M/s EESL needs

clxix

to be earnestly pursued by the CESC also, on the lines of the BESCOM,

to ensure installation of timer switches covering of all streetlight

installations in its jurisdiction. Further progress /status in this regard shall

be reported to the Commission on a quarterly basis regularly.

The Commission reiterates that the streetlight installations should be

provided with timer switches for enabling them to be automatically

switched on only during the scheduled time. This measure would not

only save significant quantum of energy that is currently wasted

because of inefficient and unreliable manual operation of the switches

which allow them to be lit unnecessarily even during day time, but also

ensure that streetlights are lit during the scheduled dark hours when

the general public require them. As directed earlier the CESC should

install the timer switches at their cost and later recover it from the local

bodies. Persuading the local bodies to fix timer switches at their own

cost availing funds / grants received from Government and other

agencies for such programmes / works should also be explored

seriously.

The Commission further directs the CESC that henceforth, the new

streetlight installations and any extension/modification to be carried

out to the existing streetlight installations shall be serviced only with

timer switches.

iv. Directive on Load shedding:

The Commission had directed that:

(1) Load shedding required for planned maintenance of

transmission /

distribution networks should be notified in daily newspapers at

least 24

hours in advance for the information of consumers.

clxx

(2) the ESCOMs shall on a daily basis estimate the hourly

requirement of

power for each sub-station in their jurisdiction based on the

seasonal

conditions and other factors affecting demand.

(3) Any likelihood of shortfall in the availability during the course of

the

day should be anticipated and the quantum of load shedding

should

be estimated in advance. Specific sub-stations and feeders

should be

identified for load shedding for the minimum required period

with due

intimation to the concerned sub-divisions and sub-stations.

(4) The likelihood of interruption in power supply with time and

duration of

such interruption may be intimated to consumers through SMS

and

other means.

(5) Where load shedding has to be resorted to due to unforeseen

reduction in the availability of power, or for other reasons,

consumers

may be informed of the likely time of restoration of supply

through SMS

and other means.

(6) Load shedding should be carried out in different sub-stations /

feeders

to avoid frequent load shedding affecting the same sub-

stations /

feeders.

(7) The ESCOMs should review the availability of power with

respect to the

projected demand for every month in the last week of the

previous month and forecast any unavoidable load shedding

clxxi

after consulting other ESCOMs in the State about the possibility

of inter-ESCOM load adjustment during the month.

(8) The ESCOMs shall submit to KERC their projections of

availability and

demand for power and any unavoidable load shedding for

every

succeeding month in the last week of the preceding

month for

approval.

(9) The ESCOMs shall also propose specific measures for

minimizing load

shedding by spot purchase of power in the power exchanges

or

bridging the gap by other means.

(10) The ESCOMs shall submit to the Commission sub-station wise

and feeder

wise data on interruptions in power supply every month before

the 5th

day of the succeeding month.

The Commission had directed that the ESCOMs shall make every effort

to minimize inconvenience to consumers strictly complying with the

above directions. The Commission had indicated to review the

compliance of directions on a monthly basis for appropriate orders.


(a) Load shedding required for planned maintenance of distribution

networks are being notified in daily newspapers in advance by

the concerned O&M officials.

(b) At present the SLDC is instructing the CESC regarding shortfall in

power and based on real time allocation of power the CESC is

clxxii

taking action to effect unscheduled load shedding on the

identified specific substations and feeders on rotation basis.

(c) If unscheduled load shedding is to be imposed, the same is being

informed to all O&M circle Superintending Engineers, O&M

division Executive Engineers through SMS for intimating to

consumers. The CESC is informing all 220 kV substations to effect

load shedding through Distribution Control Center (DCC)

established at Mysore. Also, the CESC is taking action to intimate

about the unscheduled load shedding effected during short fall in

generation, to the public through newspapers and FM radio

channel. The CESC is implementing uniform load shedding in all

the five districts.

(d) At present, the SLDC is monitoring inter-ESCOM availability and

allocation of power.

(e) Details of substation feeder wise interruption data (both number

and duration of interruptions) are being submitted to the

Commission every month in the form of PQM statements.

(f) The CESC will henceforth, submit the projections of availability

and demand for power and any unavoidable load shedding to

the Commission every month regularly.

Implementation of “SDRA” (SCADA Data Reporting and Analysis)

application in the CESC:

As per the directions of the Commission, the CESC has floated tender

to develop application software –SDRA for providing information

about time and duration of unscheduled interruptions to the

consumers through SMSes on the lines of BESCOM with additional

features. The work has been awarded to M/s Idea Infinity IT solutions

clxxiii

Pvt Ltd, Bengaluru, on 7-1-2016 and the application is to be

implemented within 60 days from the date of issue of work award.

Smart Grid Pilot Project:

For better Load management, a Smart Grid Pilot Project is being implemented

in parts of the area under V. V. Mohalla O & M division. The project was

awarded to M/s Enzen Global Solutions Private Limited, on 30.04.2014.

The pilot area covers 14 feeders comprising 24,000 consumers from all

categories. Cost of the DPR is Rs.32.59 crore, wherein 50 per cent is funded by

the Ministry of Power, Government of India, 25 per cent by the system

integrator and the remaining 25 per cent by the CESC.

The awarding of contract, timeline for implementation and base line

requirement etc., are completed. Software solution Architecture Design with

modules, functional specifications and data flow exchange and hardware

design requirement sheets, network configuration and test procedures are

completed and approved in the month of February, 2015.

440 numbers of single phase RF smart meters have been installed and

commissioned with AMI in the month of August, 2015 and the data is being

collected and analyzed. Installation of Modems for HT installations is in

progress. 60 Modems have been installed as on date and the work in respect

of establishing Smart Grid Control Center is completed. Servers and allied

hardware are installed and commissioned.

Commission’s views:

The Commission observes that the CESC is not submitting its projections

of availability and demand for power and any unavoidable load

shedding for every succeeding month in the last week of the

preceding month to the Commission regularly. The CESC shall

henceforth submit the same regularly to the Commission. The

Commission also notes that the CESC has not expedited the

‘application software’ which it has been developing through

Consultants to enable providing information to the consumers through

clxxiv

SMSes regarding the probable time and duration of interruptions

caused due to any reasons. This has to be expedited as the consumers

need to be informed through SMSes regarding both scheduled and

un-scheduled load shedding, due to reasons such as system

constraints, breakdowns of lines/equipment, maintenance etc. This

would address significantly the consumers’ dissatisfaction on this issue.

Further, it is also necessary to avoid load shedding involving the same

sub-stations/feeders; the same should be on rotation basis to avoid

inconvenience to consumers/public.

The Commission reiterates that the CESC shall comply with the

directive on load shedding and submit monthly compliance reports to

the Commission regularly.

v. Directive on Establishing a 24x7 Fully Equipped Centralized

Consumer Service Center for Redressal of Consumer Complaints:

The directive was as below:

“ The CESC is directed to put in place a 24x7 fully equipped

Centralized

Consumer Service Center at its Headquarters with state of the art

facility/system for receiving consumer complaints and monitoring their

redressal so that electricity consumers in its area of supply are able to

seek

and obtain timely and efficient services / redressal in the matter of their

grievances. Such a Service Center shall have adequate number of

desk

operators in each shift so that consumers across the jurisdiction of the

CESC

are able to lodge their complaints directly with this Centre.

clxxv

Every complaint shall be received on a helpline telephone number by

the

desk operator and registered with a docket number which shall be

intimated to the consumer. Thereafter, the complaints shall be

transferred

online / communicated to the concerned field staff for resolving the

same. The concerned O&M / local service station staff shall visit the

complainant’s premises / fault location at the earliest to attend to the

complaints and then inform the Centralized Service Centre that the

complaint is attended. In turn, the call centre shall call the

complainant

and confirm with him whether the complaint has been attended to.

The

complaints shall be closed only after receiving consumer’s /

complainant’s confirmation. Such a system should also generate daily

reports indicating the number / nature of complaints received,

complaints

attended, complaints pending and reasons for not attending to the

complaints.

The CESC shall publish the details of the complaint handling procedure

/

Mechanism with contact numbers in the local media periodically for

the

information of the consumers. The compliance of the action taken in

the matter shall be submitted to the Commission within two months

from the date of this Order.

Further, the Commission directs the CESC to establish/strengthen 24x7

service stations, equipping them with separate vehicles and adequate

line crew, safety kits and maintenance materials at all its sub-divisions

including rural areas for effective redressal of consumer complaints.

clxxvi

The Commission also directs the CESC to hold Consumer Interaction

Meetings (CIM) in each O&M sub-division once every two months

according to a published schedule and invite consumers in advance

to participate in such meetings to sort out their grievances. Such

meetings shall be chaired

by officers of the level of Superintending Engineers and attended by

the

concerned divisional and sub-divisional Engineers. The CESC shall

submit

compliance of the same to the Commission once in a quarter.”


1. Under R-APDRP project, the CESC has established during December

2011; a 24x7 fully equipped Centralized Consumer Service Centre

at Mysore with a state of the art facility / system for receiving

consumer complaints and monitoring their redressal. This Customer

Care Center is established to provide efficient services and to

resolve customer grievances in minimum time.

2. Single window Customer Care Centre is connected directly to data

centre for online user service and is equipped with IVRS server, 15

PCs, IP phones, Fax, server etc.

3. Customer can call this Center through telephone number “1912”.

The number is published in all leading newspapers, CESC’s website

and also printed on the back side of the electricity bills so that

consumers can utilize this facility for their queries.

4. An Assistant Engineer, 5 team leaders and 16 customer care

representatives (CCR) are working at the Call Centre.

5. One team leader with 4 CCRs are working round the clock to

address the customer complaints/requests and one team Leader to

supervise the activities in general shifts.

clxxvii

6. In the Customer Care Centre, the CESC has implemented web

based Public Grievance Redressal System (PGRS) software

application to address electricity complaints effectively. On

22.09.2015, web based PGRS (Public Grievance Redress system)

Software was installed succesfully and is working satisfactorily,

enabling speedy complaint registration and redressal. Provision of

consumer complaints registration through various sources like;

helpline, SMS, Email, Web, Facebook and retrieving of consumer

history is also provided for in the software.The application is

available as a link to the CESC’s website URL

http://www.cescmysore.org. Consumers can register their

complaints online using this website. Consumers can also register

their complaint by sending SMS to mobile number 9220592205 or

56263 by typing the word “CESC”. Once a consumer registers the

complaint, the docket number is automatically generated and sent

to consumer’s mobile number. Consumers can also track their

status of complaint online. Further, the consumers are being

requested to use this website for their benefit while seeking

redressal of their complaints, through paper notifications both in

English and Kannada.

7. A complaint received at Customer Care Center is registered

immediately in the software and docket numbers is given to

consumers and to the concerned sub divisional officer/ section

officer or local service station automatically via SMS to their mobile

numbers. Once the complaint is resolved, the status of complaint is

updated by concerned sub-divisional officer/ section officer / local

service station or Customer Care executive, closing the docket. The

consumers can also track the status of their complaint through

online also.

8. Further, 27 numbers of 24x7 service stations are established at 17

subdivisions. These service stations are equipped with vehicles,

http://www.cescmysore.org/

clxxviii

crew, safety kits and maintenance materials for effective redressal

of consumer complaints.

9. The photos /videos taken during consumer interaction meetings

have been uploaded on the CESC’s website.

Details of Jana Samparka Sabhas conducted during the FY15 are

furnished as below:

Sl

No

Name of the

Circle

Apr14 May14 Jun14 Jul14 Aug14 Sep14 Oct14 Nov14 Dec14 Jan15 Feb15 Mar15 Total

1 Work Circle,

Mysore

4 13 6 9 9 5 5 7 7 13 3 4 85

2 O&M Circle,

Mysore

0 0 2 0 6 0 2 1 1 1 0 1 14

3 Mandya Circle 2 4 2 3 5 2 9 4 2 4 2 3 42

4 Hassan Circle 0 0 15 0 13 0 13 0 13 0 13 0 67

CESC Total 6 17 25 12 33 7 29 12 23 18 18 8 208

Details of Janasamparka Sabha from April to October,2015

Sl

No

Name of

the Circle Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Total

1 Work Circle,

Mysore 5 6 7 7 5 2 7 39

2 O&M Circle,

Mysore 0 1 0 0 0 2 1 4

3 Mandya

Circle 1 0 1 3 2 2 1 10

4 Hassan

Circle 16 0 13 0 6 0 0 35

CESC Total 22 7 21 10 13 6 9 88

clxxix


The Commission notes that the CESC has taken adequate measures for

effective redressal of consumer complaints. The CESC is directed to

continue to focus on improving the consumer services and further

reduce the consumer complaint downtime to ensure prompt services

to the consumers. The CESC should ensure prompt response to

consumer complaints about interruptions in power supply due to

breakdown of lines/equipment, replacement of faulty transformers etc.

The CESC should sensitize its field staff in this regard.

The CESC shall continue to ensure that the higher officers are present in

the consumer interaction meetings at the subdivisions to effectively

redress the grievances of the consumers.

The Commission reiterates its directive to the CESC to publish the

complaint handling procedures / contact number of the Centralized

Consumer Service Centre regularly in the local media and other

modes periodically for the information of public and ensure that all the

complaints of consumers are registered only through the centralized

consumer service centre for proper monitoring of disposal of

complaints registered.

The compliance in the matter shall be submitted to the Commission

once in a quarter regularly.

vi. Directive on Energy Audit:

The Commission had directed the CESC to prepare a metering plan for

energy audit to measure the energy received in each of the Interface

Points and to account for the energy sales. The Commission had also

directed the CESC to conduct energy audit and chalk out an Action

clxxx

Plan to reduce distribution losses to a maximum of 15 per cent

wherever it was above this level in towns/ cities having a population of

over 50,000.

The Commission had earlier directed all the ESCOMs to complete

installation of meters at the DTCs by 31st December, 2010. In this

regard the ESCOMs were required to furnish to the Commission the

following information on a monthly basis:

a) Number of DTCs existing in the Company.

b) Number of DTCs already metered.

c) Number of DTCs yet to be metered.

d) Time bound monthly programme for completion of work.


Energy Audit of DTCs

As on 31.10.2015, 179 exclusive agricultural feeders have been

commissioned. There are 13,169 distribution transformers on these

feeders. Metering is not required in respect of these transformers

as the feeder consumption is being considered for calculation of

IP set consumption.

9,444 water supply installations have been serviced and all of

them are in rural areas. Each of these water supply installations

has been provided with an independent distribution transformer.

As such metering is not required in respect of these transformers

also. A letter has been addressed to the Commission requesting

for exemption in providing meters to such independent

distribution transformers of water supply installations vide No:

CESC/MD/2015-16/35 dated 29-07-2015.

clxxxi

In view of the above, as on 31.10.2015, 46,312 DTCs have to be

provided with meters. The details are furnished in the following

table:

Particulars Existing DTCs Metered DTCs

DTCs where

meters are not

required

DTCs to be metered

Urban(non RAPDRP) 9,093 4,553 0 4,540

Urban (RAPDRP) 6,855 6,693 0 162

Rural 73,677 9,454 22,613 41,610

Total 89,625 20,700 22,613 46,312

Tenders have been called for procurement of 15,000 energy meters and the

DWA for the same has been issued. As on 31.10.2015, 6,693 meters have

already been installed to DTCs.

Energy Audit of Towns:

The CESC has submitted to the Commission the details of energy audit

conducted in respect of cities /towns every month up to September,

2015 in format 3C of PQM formats. The energy audit of cities /towns for

the months of October to November, 2015 is enclosed in Annexure-

A1.

The total number of feeders in the CESC’s jurisdiction as on 31.10.2015

is 1,412.

NJY feeders : 161 numbers

Agricultural feeders : 179 numbers

Industrial feeders : 68 numbers

Urban feeders : 415 numbers

Rural feeders : 589 numbers

RAPDRP area

The number of feeders in RAPDRP areas is 187 (non-agricultural feeders).In

RAPDRP areas; the process of updating the incremental assets from 2011 was

awarded during April-2015. The work involves three iterations and is spread

clxxxii

over a period of two years. The first iterations were completed during October,

2015 in which 85 to 90 per cent of the incremental assets have been updated

into the system. Migration of updated incremental assets into GIS application

in respect of 10 towns out of 12 towns was completed by M/s Infosys during

November, 2015. Validation of the updated incremental assets is being done

by the subdivision offices. There are still around 55,000 floating consumers to

be migrated to GIS application. DTC wise energy audit reports will be

generated during the first week of January, 2016.

Further, the modems fixed to the DTCs in RAPDRP areas are not

functioning due to some technical reasons and these modems are

being replaced. The work is likely to be completed by December

2015/January 2016.

The feeder wise energy audit of 187 feeders and 6,855 DTCs in RAPDRP areas

will be available only after the above works are completed.

Non RAPDRP areas:

The number of feeders in non-RAPDRP areas as on October, 2015 is

1,225, out of which 179 are exclusive IP feeders. 100 per cent

metering of DTCs is completed for 28 feeders and action has been

taken to carryout energy audit at feeder/DTC level.

The number of feeders where DTCs are to be metered is 1,018.

However, energy audit of metered DTCs is being conducted every

month. The details for April 2015, to June 2015 have already been

submitted to the Commission.

The gaps in Metering, Billing and Collection (MBC) modules are being

rolled out by ITIA, as some of the Modems installed for DTCs are burnt

out and DTCs’ meter data is not being communicated. In view of this,

DTC wise and feeder wise energy audit is not prepared by the ITIA.

Hence, due to non-availability of online data, all RAPDRP towns are

processing manual energy audit in six go live towns. Presently,

clxxxiii

manual energy auditing is being done for 6,693 DTCs every month.

GIS based incremental data and network assets mapping process is

under progress (tender has been called by the nodal agency i.e.,

BESCOM through third party- KSRSAC). After completion of GIS

mapping, energy audit for all the DTCs will be possible under RAPDRP

town limits.

In respect of DTCs in rural area, the consumption of exclusive

agricultural feeders is being obtained from the substations due to

completion of bifurcation of agricultural and non-agricultural feeders

under NJY scheme. So far, as at the end of October, 2015, 179

exclusive agricultural feeders are existing in the CESC.

Further, the metering of non-agricultural DTCs will also be taken up at

the earliest.

The loss levels of 3,632 distribution transformers for which energy audit

has been carried out as at the end of October, 2015, are as given

below:

DTC Energy Loss Analysis from April14 to March15

SL

N

o

Month /

Year

Total no. of DTCs for which

energy audited DTC energy loss analysis

URBAN RURAL TOTAL <5% 5-

10% 10-20% 20-30% >30%

1 Apr-14 566 43 609 195 222 155 29 8

2 May-14 776 43 819 284 345 181 8 1

3 Jun-14 1149 45 1194 495 489 202 8 0

4 Jul-14 1424 45 1469 615 575 271 8 0

5 Aug-14 1346 45 1391 604 551 229 4 3

6 Sep-14 1693 45 1738 668 613 437 5 15

7 Oct-14 1795 45 1840 796 649 363 14 18

8 Nov-14 1858 45 1903 741 775 374 8 5

9 Dec-14 2233 45 2278 937 1000 314 18 9

1

0

Jan-15 2280 45 2325 1035 909 312 55 14

1

1

Feb-15 2629 45 2674 1188 930 414 125 17

1

2

Mar-15 2653 45 2698 1245 1017 390 31 15

DTC Energy Loss Analysis from April15 to Oct15

Sl No Month / Year Total no.of DTCs for Total DTC energy loss analysis

clxxxiv

which energy

audited

Urban Rural <5% 5-10% 10-20% 20-30% >30%

1 Apr-15 2868 45 2913 1435 1019 421 36 2

2 May-15 2889 45 2934 1428 1047 434 23 2

3 Jun-15 2994 45 3039 1517 1055 450 17 0

4 Jul-15 2942 45 2987 1391 1073 500 21 2

5 Aug-15 2910 10 2920 1311 1148 429 30 2

6 Sep-15 3338 14 3352 1337 1223 742 35 15

7 Oct-15 3618 14 3632 1518 1332 718 57 7

Action is being initiated to bring down the percentage of losses in respect of

transformers where the losses are more than 10 per cent.

For reducing the loss levels during the FY2015-16 the following measures

are proposed:

a. Running 53 numbers of new 11 KV link lines/express lines at an

expenditure of Rs. 8.26 crore,

b. Providing 1,183 numbers of additional DTCs / enhancement of

DTCs at a cost of Rs 22.70 crore.

c. Reconductoring of 42 HT Lines at a cost of Rs 6 crore.

d. Reconductoring of 36 LT Lines at a cost of Rs 2 crore.


The Commission notes that the CESC is not submitting regularly the

monthly analysis of energy audit conducted in cities / towns. The CESC

shall initiate suitable measures to bring down the loss levels further

downwards wherever they are more than 10 per cent, and

compliance regarding the energy audit conducted and the specific

remedial measures initiated shall be submitted to the Commission

every month regularly.

Further, the Commission notes that the CESC has conducted DTC wise

energy audit for only 3,632 DTCs despite providing meters to 20,700

DTCs as per its own submission, leaving large number of DTCs

unaudited. Even as per the analysis of 3,632 DTCs, in more than 22 per

cent of the DTCs, the loss levels are reportedly more than 10 per cent,

clxxxv

which the CESC is required to take immediate remedial measures to

bring down the losses within the targeted levels. The CESC shall also

expedite metering of balance DTCs under an action plan and

complete it early so as to take up DTC wise energy audit and initiate

remedial measures for reducing distribution losses wherever they are

above the targeted level.

The compliance in respect of DTC wise energy audit conducted with

analysis and the remedial measures initiated to reduce loss levels shall

be submitted every month regularly to the Commission.

Further, the CESC is directed to submit to the Commission the

consolidated energy audit report for the FY16, as per the formats

prescribed by the Commission vide its letter No: KERC/D/137/14/91

dated 20.04.2015, before 15th May 2016.

vii. Directive on Implementation of HVDS:

In view of the obvious benefits in the introduction of HVDS in reducing

distribution losses, the Commission had directed the CESC to

implement High Voltage Distribution System in at least one O&M

division in a rural area in its jurisdiction by utilizing the capex provision

allowed in the ARR for the year.


As per the directions of the Commission, HVDS scheme for reduction in

technical losses duly converting LT line into HT line so as to bring down the

H.T:L.T ratio was taken up in K.R.Pet taluk, Mandya district, involving 46 IP

feeders emanating from nine different substations. The DPR was prepared at a

total cost of Rs. 141 crore, which was revised as per the suggestion of the

Commission to a total cost of Rs. 131 crore. The proposal was resubmitted for

approval of the Commission on 10.9.2014 and the same was approved by the

Commission. The subject was placed in the 49th meeting of the Board of

Directors of the CESC. The Board has resolved that implementation of High

clxxxvi

Voltage Distribution System is not necessary as NJY project is under progress.

Hence this work has not been taken up.


The Commission has been directing the ESCOMs to identify one

subdivision in each ESCOM with high LT / HT ratio and high distribution

loss levels, so that substantial loss reduction could be achieved by

implementing the HVDS in such subdivisions. The Commission, with a

view to bring down the cost of implementation of HVDS, also issued

revised guidelines to all the ESCOMs to implement HVDS in

subdivisions/feeders having the highest distribution losses. The CESC has

not taken up implementation of HVDS in its jurisdiction despite these

directions issued by the Commission. Further, the Commission after

verifying the DPR in respect of 11 numbers of 11kV feeders pertaining to

Kikkeri and Mandagere O & M sections has approved the same and

directed the CESC to take up implementation of HVDS. However, the

CESC has not taken up the same.

In the ESCOMs’ Review meetings held in the Commission, the CESC

was also directed to submit a detailed report on the viability of

implementation of HVDS scheme, for taking a view in the matter by the

Commission. However, the CESC so far has not submitted its report in

this regard.

As regards its decision that the implementation of High Voltage

Distribution System is not necessary as NJY project is under progress, it is

noted that the concept of HVDS and NJY is totally different and the

ESCOMs were directed to implement the HVDS for the agricultural

feeders segregated under NJY wherever high losses are prevailing. The

CESC is directed to submit the compliance on the above issues as to

clxxxvii

why implementation of HVDS is not feasible in its jurisdiction in the wake

of implementation of NJY.

viii. Directive on Nirantara Jyothi – Feeder Separation:

The ESCOMs were directed to furnish to the Commission the

programme of implementing 11 KV taluk wise feeders segregation with

the following details

a) Number of 11 KV feeders considered for segregation.

b) Month wise time schedule for completion of envisaged work.

c) Improvement achieved in supply after segregation of feeders.


NJY phase-1

The CESC has taken initiatives to commission the completed feeders on top

priority and to complete/commission the feeders where the works are under

progress. The works in respect of 125 feeders have been completed and 120

feeders have been commissioned under NJY phase-1 scheme as at the end

of October 2015.

Out of the remaining 10 feeders, works are under progress and the same will

be completed before March, 2016. In respect of the balance 26 feeders,

works are proposed to be taken up by inviting fresh tenders.

Progress of NJY phase-1 as at the end of October, 2015 and the action plan

for completing NJY phase 1 works is as detailed below:

Physical progress of NJY Phase 1 as at the end of 31.10.2015 No. of

taluks

Total

feeders

Feeders Action Plan

Complete Commission Balanc Nov- Dec- Jan- Feb- Mar- Total

clxxxviii

covere

d

d ed e 15 15 16 16 16

10 135* 125 120 10 2 2 2 2 2 10

As per DPR, 161 NJY feeders were proposed but, due to field constraints, work

on 26 feeders could not be taken up and the same is proposed to be taken

up in phase-3 (DDUGJY).

Financial Progress of NJY Phase-I as on 31.10.2015 Amount

required for

phase-1

Amount

released by

State Govt.

(40% equity)

+SDP

Mode of arrangement

for 60% amount (REC)

2014-15 2015-16

(Up to

Oct-15)

Cumulative

expenditure booked

as on Oct-15

248.47 99.4 52.28 10.82 6.86 187.45

NJY Phase-2

Out of 235 proposed feeders, works on 139 feeders have been completed,

out of which 107 feeders have been commissioned as at the end of October,

2015. Action is being taken to commission the completed feeders works under

progress in the remaining 96 feeders.

Progress of works under NJY phase-2 as at the end of October, 2015 and the

action plan for completing the works under NJY phase 2 is as detailed below:

Physical progress of NJY phase 2 as at the end of 31.10.2015

No. of taluks

covered

Total

feed

ers

Feeders

Completed Commissioned Balance

14 235 139 107 96

Financial Progress of NJY Phase-2 as on 31.10.2015 Amount

Required

for Phase-

2

Amount

Released by

State

Govt.(40%

equity)

Mode of

arrangement

for 60%

amount

2014-15 2015-16

(Up to

Oct-15)

Cumulative Expenditure

booked as on Oct-15

452.76 86.42 195.51 154.03 52.72 312.18

The CESC is taking all measures to complete and commission the proposed

feeders under NJY scheme as per the action plan.

Action Plan Nov-15 Dec-15 Jan-16 Feb-16 Mar-

16

Apr-16 May-16 Jun-16 Total

7 13 12 14 10 14 14 12 96

clxxxix

M/s CPRI has been entrusted for analyzing the benefits accrued to the system

post implementation of NJY scheme and one sample report has been

submitted to the Commission and also herewith enclosed as Annexure B.


The Commission notes that the CESC is yet to commission 32 feeders

whose work has been reported as completed and totally it is yet to

commission 96 feeders in phase 2. The progress achieved in

implementing the works under NJY phase 2 is not satisfactory as the

implementation of the same has been inordinately delayed. The delay

in implementation of NJY works by the CESC has resulted in non-

realization of envisaged benefits set out in the DPR when the project

was initiated.

The Commission directs the CESC to take immediate action to

commission the balance feeders and to carry out the analysis of those

feeders to ensure that the objectives set out as per DPR are

accomplished.

Further, the Commission has noted that the CESC has carried out the

evaluation of feeders commissioned under NJY indicating the benefits

accrued to the system in terms of improvement in tail-end voltage,

improvement in supply/reduction in interruptions and increase in

metered consumption. The analysis reveals that there is overall

improvement in supply condition after implementation of NJY.

The CESC is directed to expedite execution of NJY works under phase

2 and report compliance thereon to the Commission. Further, the

CESC shall ensure that NJY feeders are not tapped illegally for running

IP sets which would defeat the very purpose of feeder separation

scheme undertaken at huge cost.

cxc

Further, it is noted that the CESC has already segregated 227 feeders

taken up under both phase1&2 works and consequently agricultural

feeders are exclusive from rural loads and the energy consumed by

the IP sets could be more accurately measured at the 11 KV feeder

level at the substations after duly allowing for distribution losses in 11 KV

lines, distribution transformers and LT lines. The CESC is directed to

report every month, the total IP set consumption on the basis of data

from agriculture feeder energy meters only and furnish the specific

consumption of IP sets as per the formats prescribed by the

Commission vide its letter No: KERC/D/137/14/91, dated 20.04.2015,

before 15th May 2016.

The CESC is also directed to continue to furnish feeder wise IP set

consumption based on feeder energy meter data in respect of

agriculture feeders segregated under NJY, to the Commission every

month regularly.

ix. Directive on Demand Side Management in Agriculture:

In view of the urgent need for conserving energy for the benefit of the

consumers in the State, the Commission had directed the CESC to take

up replacement of inefficient pumps with energy efficient pumps

approved by the Bureau of Energy Efficiency, at least in one

subdivision in its jurisdiction.


Agriculture DSM pilot project in Malavalli Taluk of Mandya district was taken

up for implementation after entering into an agreement (EPA) with M/s EESL,

New Delhi, on 06.08.2013. In this programme, the existing inefficient pump sets

are to be replaced by energy efficient pump sets (EEPS) at free of cost to

farmers. As on date, 1,337 IP sets coming under five 11kv feeders have been

replaced by energy efficient pump sets.

cxci

Further, this project is extended to T.N. Pura and Varuna areas of Mysore

district covering 1,753 numbers of pump sets at a cost of Rs.11crore, for which

KTPP exemption is sought from Energy Department, GoK.

Abstract showing energy calculation and savings under Agriculture

DSM

SL

No

66/11

KV Sub-

Station

Feeder Name EEPS

Installed

Consumption in units per Hour

(KWh/Hr)

Savings

in units

at 180

hrs/

month

for 10

months

% age

savings

savings

in Rs @ Rs

4.40 per

unit

Before After Difference

1 Hadli Antharahalli (F1) 184 1183.24 761.79 421.45 758610 35.62 3337884

2 Hadli Chandahalli (F3) 525 3334.59 2099.66 1234.93 2222874 37.03 9780646

3 Hadli Basavanapura(F4) 299 1905.82 1197.82 708 1274400 37.15 5607360

4 Mallavalli Banasamudra(F6) 177 1102 687 415 747000 37.66 3286800

5 Mallavalli Banasamudra(F8) 152 1007.57 637.79 369.78 665604 36.70 2928658

Total 1337 8533.22 5384.06 3149.16 5668488 36.90 24941347


The Commission notes that the CESC has implemented a pilot project of

agriculture DSM in Malavalli Taluk and the analysis carried out in respect

of the energy efficient pumps installed indicates that around 36 per

cent savings in energy. It is also noted that the agriculture DSM project is

proposed to be taken up in T.N. Pura and Varuna areas of Mysore

district covering 1,753 numbers of IP sets, on the basis of pilot project

results. It is important to see that all the balance works relating to this

project are expedited so that the work is completed in time and the

farmers are able to avail the benefits of this scheme. Further, the CESC

should give emphasis on implementation of DSM measures in the other

parts of its jurisdiction in order to conserve energy and also precious

water for the benefit of farmers. The CESC should focus its attention on

implementation of DSM measures by necessary coordination with all the

stakeholders concerned to arrive at an early agreement on crucial

measurement and verification methodology to move forward and

scale up in its jurisdiction.

cxcii

The Commission directs the CESC to expedite implementation of

agriculture DSM project in T.N. Pura & Varuna and submit the

compliance thereon to the Commission within three months from the

date of this order.

x. Directive on Lifeline Supply to Un-Electrified Households:

The Commission had directed the ESCOMs to prepare a detailed

and time bound action plan to provide electricity to all the un-

electrified villages, hamlets and habitations in every taluk and to

every household therein. The action plan shall spell out the

details of additional requirement of power, infrastructure and

manpower along with the shortest possible time frame (not

exceeding three years) for achieving the target in every taluk

and district. The Commission had directed that the data of un-

electrified households could be obtained from the concerned

Gram Panchayaths and the action plan be prepared based on

the data of un-electrified households.


Under RGGVY 12th plan and DDUGVY, the un-electrified households which are

not completed in the previous plans and also newly added un-electrified

households are taken up in all the five districts of the CESC and the details are

as follows:

Sl.

No District

No.of

Habitations

covered

No.of BPL

households

No.of rural

households

Project

cost in Rs.

crore

Sanctioned

by M.o.P

1 Mysore 1,621 14,274 33,401 18.84 Yes

2 Mandya 1,610 10,824 23,,336 12.48 Yes

3 Chamarajnagara 681 10,504 20,099 19.69 No

4 Hassan 3,515 23,316 40,157 30.35 No

5 Coorg 435 6,287 21,177 12.92 No

Total 7,862 65,205 1,38,170 94.30

Survey and preparation of DPR was awarded to M/s RECPDCL, New-

Delhi. Sanction from MoP for Mysore and Mandya districts has been

cxciii

obtained and LOI /DWA has been issued. Material procurement is in

progress and the works have to be taken up.

The CESC has identified 67 hamlets covering 2,879 BPL households to

electrify hamlets and BPL households under Decentralized Distributed

Generation scheme. The following are the details:

Latest status is as follows:

Decentralized Distribution Generation (DDG)

Solar Project

Sl. No Particulars

Plant

capacity

in KW

No of

DPRs

covered

No of

Hamlets

Covered

No of BPL

households

Covered

No of

street

lights

Name of the

L1 Bidder

Award

amount

in

Lakhs

Remarks

1

Package-1

(Madikeri District,

Virajpet Taluk)

108.00 6 7 357 105

M/s Naviya

Technologies,

Mumbai

520.77

Work

award

issued

on

16.11.15

2

Package-2

(Mysore District, HD

Kote & Periyapatna

Taluk)

113.00 11 11 480 149

M/s Sun

Edison Pvt

Ltd, Chennai

619.97 LOI

issued

3

Package-3

(Chamarajanagara

District,C R

NagaraTaluk )

56.00 1 3 156 35

M/s Naviya

Technologies,

Mumbai

269.00

Work

award

issued

on

16.11.15

4

Package-4

(Chamarajanagara

District,Kollegala

Taluk )

127.00 7 8 546 155

M/s Naviya

Technologies,

Mumbai

664.39

Work

award

issued

on

16.11.15

I. 25 hamlets, covering 1,443 BPL households have been

sanctioned by M/s REC at a cost of Rs.20 crore.

II. 11 hamlets, covering 828 BPL households have been sanctioned

by the REC at a cost of Rs.6 crore. Tender has been evaluated

and since the cost quoted by the bidder is 110% excess over the

cost sanctioned by the REC. In this backdrop, subject tender was

retendered & evaluated and accordingly the proposal was sent

to REC, New Delhi, vide No: CESC/MD/CEE/EE (Proj.)/15-16/4996-

5001 dated 03.07.2015, for approval at quoted rate of Rs 821.12

lakh and approval for the same is awaited.

cxciv

III. In respect of 27 hamlets, covering 402 BPL households, DPRs have

been furnished to “KREDL” as the population per hamlet is below

100. The KREDL will be taking up this work.


The Commission notes that there is no progress in electrification of un-

electrified households except formulation of schemes under DDUGTY by

the CESC. The CESC needs to expedite electrification of un-electrified

households with the seriousness this matter deserves. It seems that the

electrification of households has remained stagnant for the last many

years leaving vast numbers of households in the remote areas remain

without electricity. The programme should be implemented within in a

time frame to ensure that the people are provided with the basic need

of electricity.

The Commission, while reviewing, the status of compliance of its

directives during the ESCOMs’ Review meetings, has been stressing

upon the ESCOMs to initiate necessary action to provide electricity to

the un-electrified households with funding arrangement by RGGVY or

any other source. The CESC shall promptly act on this and come out

with an action plan to implement the directive of the Commission for

providing electricity to the un-electrified households in its jurisdiction

and submit compliance/progress achieved monthly to the Commission.

Further, the Commission, concerned with the slow pace of progress of

this programme, in the previous Tariff Order had directed the CESC to

cover electrification of 5 per cent of the total identified un-electrified

households every month beginning from April 2015 so as to complete

this programme in about twenty months. However, as seen from the

compliance, there is not progress in these aspects. The CESC is

directed to expedite action to provide electricity to the un-electrified

households covering all the remaining households within the targeted

time and report compliance to the Commission regarding the monthly

cxcv

progress achieved from May, 2016 onwards. In the event of non-

compliance, the Commission may be constrained to initiate penalty

proceedings under section 142 of the Electricity Act, 2003.

xi. Directive on sub-division as Strategic Business Units (SBU):

The present organizational set up of the ESCOMs at the field level

appears to be mainly oriented to maintenance of power supply

without a corresponding emphasis on realization of revenue. This has

resulted in a serious mismatch between the power supplied,

expenditure incurred and the revenue realized in many cases. The

continued viability of the ESCOMs urgently calls for a change of

approach in this regard, so that the field level functionaries are made

accountable for ensuring realization of revenues corresponding to the

energy supplied in their jurisdiction.

The Commission had directed the CESC to introduce the system of

Cost-Revenue Centre Oriented sub-divisions at least in two divisions in

its operational area and report results of the experiment to the

Commission.


As per the directives of the Commission, Bannur subdivision is selected

for implementation of franchise model/ SBU on a pilot basis. The Bannur

subdivision needs an average input energy of 6.5 MU per month and

the demand from all tariffs is Rs.70 lakh. A Work Award was issued

through tendering process to L1 bidder M/s Veerabhadreshwara

Electricals, on 2.5.2015 for Rs. 64.2.Lakh for providing electrical

infrastructure comprising of 15 HT metering cubicles and 31 LT metering

boxes for boundary meters. Now, the progress is that the work is in

progress with the required materials have already been procured. The

work is expected to be completed by 30.03.2016.

cxcvi


The Commission notes that, the ESCOMs have expressed their difficulty

in introduction of SBU concept in their O & M divisions / sub divisions due

to implementation issues in the field. The Commission recognizes the

problems associated with implementation of SBU concept. As an

alterantive, the Commission had instituted a study to make field

formations of the ESCOMs financially accountable without any

modification in their existing administrative set up. The Commission has

forwarded a report prepared by the consultants M/s PWC regarding

implementation on Financial Management Framework for distribution

utilities to take further action to implement a model suggested by the

consultant, in their jurisdiction to bring in accountability on the

performance of the divisions / sub-divisions in relation to the quantum of

energy received, sold and its cost so that they conduct their business on

commercial principles.

The CESC is therefore, directed to implement this financial

management framework model and report compliance thereon within

three months from the date of issue of this Order.

xii. Directive on Prevention of Electrical Accidents:

The directive was as follows:

“The Commission has reviewed the electrical accidents that

have taken place in the State during the year 2014-15 and with

regret noted that as many as 564 people and 514 animals have

died due to these accidents.

From the analysis, it is seen that the major causes of these

accidents are due to snapping of LT/HT lines, accidental contact

with live LT/HT/EHT lines, hanging live wires around the electric

cxcvii

poles /transformers etc., in the streets posing great danger to

human lives.

Having considered the above matter, the Commission hereby

directs to prepare an action plan to effect improvements in the

transmission and distribution networks and implement safety

measures to prevent electrical accidents. Detailed division wise

action plans shall be submitted by the CESC to the Commission.


The details of electrical accidents occurred during 2014-15 are appended

below:

Departmental Non-departmental Animals

Fatal Non-Fatal Fatal Non-Fatal

5 26 66 34 66

In order to prevent electrical accidents and spread awareness about safety

conservation of energy, the following action plan has been initiated in the

CESC.

Identifying and rectification of hazardous installations like

providing intermediate poles to lengthy spans, replacement of

deteriorated service wires/conductors/poles, replacement of

lower size conductor by higher size, restringing of loose spans,

shifting the transformers and lines which are close to

buildings/structures.

Carrying periodical /preventive maintenance of the distribution

system and pruning of tree branches coming in contact with

power lines.

Providing safety equipment to linemen and carrying out surprise

inspection of works to verify that the field staff uses such safety

equipment provided to them.

cxcviii

Conducting safety meetings at section offices to train the

maintenance staff regarding use of safety equipment and safety

procedures to be followed while working on lines.

Issuing notices to consumers constructing the buildings near

distribution network and to ensure adequate safety clearance

before servicing new installations.

Educating the consumers regarding the safety precautions to be

adopted by them to avoid electrical accidents through media,

interaction meetings, distributing pamphlets, etc.

Exhibiting the safety advertisements containing safety aspects, in

prime locations during public programs to educate the general

public regarding the safety precautions to be taken to avoid

accidents.

Safety awareness advertisements at Railway Stations, Chandana

TV Programme, Vividabharati Radio Programme.

Safety awareness through street plays.

Highlighting the issues of conservation of energy and prevention

of electrical accidents on the reverse of the monthly electricity

bills.

Displaying hoardings regarding safety aspects at all district

Headquarters and all offices of the CESC.

Conducting quiz programme, essay competition and debates

among students studying in High Schools, ITI and Diploma

institutions.

Progress regarding action taken for reduction of electrical accidents as

at the end of October, 2015:

Sl

No Details of action taken

Works

Circle

Mysore

O&M

Circle

Mysore

Mandya

Circle

Hassan

Circle Total

cxcix

1

Replacement of

damaged/

deteriorated RCC/PSC,

I Beam, Tubular,

Ladder, Wooden poles

No 1047 1307 952 535 3841

2

Replacement of

deteriorated

Aluminum conductor

Ckm 17.6 79 39 2.85 138

3 Enhancement of size of

conductor Ckm 49.6 0 15 0 64.6

4 Replacement of

copper conductor Ckm 3.71 1.68 6.85 0 12.2

5 Providing

intermediate

poles

HT

line No 442 2205 203 222 3072

6 LT

line No 387 1160 191 278 2016

7 No of slanted poles set

right No 833 856 363 828 2880

8

No of places where

lines close to/ above

the buildings are

shifted

No 275 125 20 5 425

9

No of places where the

transformers are shifted

to safe place

No 26 32 19 13 90

10

No of poles where

jumbled service main

connections are set

right

No 1084 2277 68 1197 4626

11

No of places where LT

kits/ MCCBs are

provided

No 179 310 90 95 674

12 Aerial bunched cables

provided km 0 20 0 0 20

13

No of awareness

programs for public is

conducted

No 122 178 5 31 336

14

No of training

programs to field staff

conducted

No 47 142 11 194 394

15

No of other preventive

maintenance works

like pruning of tree

branches, restringing of

wires, providing proper

fuses, replacement of

lead wires, providing

proper earthing etc., is

carried out

No 2478 2284 333 3414 8509

Vigilance Activities:

Inspection drives at various levels are being carried out to check theft /misuse

of energy. The progress achieved during FY15 and FY16 (as on October

2015) are as given below:

cc

Particulars FY15 FY16 (October 2015)

No of Installations inspected 53,708 29,295

No of discrepancies detected 6,667 2,367

No of cognizable cases

booked

768 484

No of non-cognizable cases

booked

5,899 1,883

Penalty levied In Rs lakhs 1,472.88 679.95

Penalty collected In Rs lakhs 656 450


The Commission observes that despite the CESC taking various

remedial measures including rectification of hazardous installations in

its network, the number of fatal electrical accidents involving both

human and livestock has only increased which is of a serious concern.

This indicates that identification and rectification of all hazardous

installations is not completed. The CESC should make more concerted

efforts for identification and rectification of all the hazardous

installations prevailing in the distribution system particularly in densely

populated areas & public places. The CESC also needs to take up with

the concerned local bodies for rectification of the hazardous

streetlight installations and other electrical works under their control to

ensure safety of the public. It is also necessary that the CESC creates

awareness through visual/print media continuously about safety

aspects among public to ensure that the attention on safety aspects is

maintained.

The Commission, during the Review meetings held with the ESCOMs

has been prompting them to take up periodical preventive

cci

maintenance works, install LT protection to distribution transformers,

conduct regular awareness program for public on electrical safety

aspects in use of electricity and also ensure use of safety tools and

tackles by their field staff besides imparting them necessary training to

the field staff at regular intervals. The CESC shall take effective steps to

achieve these.

Further, the CESC shall adhere to the best construction practices as per

the standards on construction/expansion of the distribution network so

that no maintenance is required for such network for a reasonably

long period of time. The CESC shall also conduct safety audit and

carryout preventive maintenance works as per schedule to keep the

distribution equipment in a healthy condition.

The Commission has already forwarded the Safety Technical Manual

prepared by a sub-Committee comprising of experts from the Advisory

Committee constituted by the Commission which should serve as a

useful guide for the field engineers to record all the technical

deficiencies prevalent in the distribution network and also enable them

to take remedial action on the basis of the technical audit conducted.

In the Safety Technical Manual, a detailed account of the steps to be

taken on each element of the distribution system is enumerated clearly

which would help the field engineer in attending to the defects. The

ESCOMs are required to circulate Safety Technical Manual among

their field staff for necessary guidance and also to continuously monitor

the implementation of the suggestions / recommendations contained

in the reports.

The Commission therefore, reiterates its directive that the CESC shall

continue to take necessary measures to identify and rectify all the

hazardous locations/installations prevalent in its distribution system and

to provide LT protection to distribution transformers under an action

plan to prevent and reduce the number of fatal electrical accidents

occurring in the distribution system.

ccii

The compliance regarding the same shall be submitted to the

Commission every month regularly.

cciii

Appendix - 1

Objections related to Tariff Issues:

CESC Sl.

No. Objections Replies by Licensee

1

The projected average power purchase

cost does not correspond to the

decreasing fuel prices. Hence, a

prudence check on all the power

purchase is to be carried out.

The variable rate in the energy

charge, the cost of coal is an

important component. It increases

or decreases on the basis of coal

cost as procured by the Generators.

The CERC / KERC has taken into

consideration the above aspect

while determining the energy

charges of a particular Generator.

Commission's Views: The reply of the CESC is acceptable. The variable cost

reflects the rates of coal prevailing from time to time. The basis of reckoning the

rates of power purchases have been dealt with in the Tariff Order.

2

CESC has considered a linear increase in

the power purchase cost without

considering the distinct nature of fixed

(capacity) charges and variable

(energy) charges. The fixed charges

ought to have decreased on a year to

year basis. Hence, the submission for

increase in capacity charges ought to be

rejected.

The payment towards power

purchase is made on the tariff

determined by KERC/CERC. Further

Annual Fixed Charges is determined

by the relevant Commission duly

analyzing the recent trends in fuel

price, decrease in fixed charges on

a year to year basis with subsequent

increase in O & M expenses. The

cost of coal is a variable charge. It

increases or decreases on the basis

of coal cost as procured by the

Generators. The above aspects are

considered by CERC/KERC while

determining the energy charges of

a Generator.

Commission's Views: The reply of the CESC is reasonable. The matter is

appropriately dealt in the Tariff Order.

cciv

3 The short term/medium term power of

820.67MUs has been procured at an

average rate of Rs.5.49 /kWh incurring

Rs.438.75 Crores. The short term/medium

term power over and above the

quantum approved in tariff order and

purchased at rates exceeding the ceiling

rate approved by the Commission in the

tariff order for 2014-15 to the tune of

Rs.69.45 Crores ought to be disallowed.

The approach of CESC to consider the

capacity charges from CGS stations

contrary to the provisions of the CERC

(Terms and Conditions of Tariff)

Regulations 2014.

CESC Mysore has obtained the

approval of the Commission for

purchasing power on Short and

Medium term at Rs.5.5/unit during

the year 2014-15. CESC Mysore has

projected the power purchase cost

based on the information obtained

from M/s. PCKL and the prevailing

tariff. Subsequently any increase or

decrease in the tariff as per the final

orders of CERC will be taken into

account during the truing up.

Commission's Views: The reply of the CESC is acceptable. The Short-term power

is being bought through competitive bids at the bid discovered rate, after

getting the approval of the Commission.

4 The actual employee expenses is 80% of

the total O&M expenses and R&M and

A&G expenses have been 20% of the

total O&M expenses during FY15. The

allowable weighted average inflation

index is 6.86 % for 2014-15 and 6.92 % for

2016-17. Considering the actual O & M

expenses for 2013-14 without contribution

to Pension and Gratuity Trust, the three

year compounded annual growth rate

(CAGR) of the number of installations and

the actual number of installations as per

audited accounts for the period FY12 to

FY15, and efficiency factor of 2%, the

normative O&M expenses will be

The O&M expenses for the FY-15 is

based on the audited financial

statements i.e., the actual

expenditure incurred. CESC Mysore

has considered 45% of WPI and 55%

of CPI as per indexation formula of

DELHI ERC. The Objector has

considered an efficiency factor of

2% for determination of O&M

expenses. It would be very difficult

to achieve an efficiency factor of

2% in view of the current manpower

position, network condition etc.,

CESC has considered an efficiency

factor of 0.5% for determination of

ccv

Rs.328.19 Crores for FY15 and Rs.409.17

Crores for FY17. CESC has booked

Rs.48.70 Cores towards pension and

gratuity contributions. The interest earned

on Pension and Gratuity fund investments

have to be accounted for in the

ARR/APR either by (i) Reducing the yearly

provision for pension and gratuity fund by

the interest income earned on the

investments or (ii) Reducing the ARR by

such interest income by computing a

revenue side truing up. Hence, the

allowable O&M expenses will be

Rs.376.89 Crores for FY15 and Rs.409.17

Crores FY17.

O&M expenses. Further, the figures

are assumptions and while truing up,

the Commission will approve the

figures.CESC Mysore has also taken

into account the WPI indices that

are notified by the Govt. of India

and published on the website of

Ministry of Commerce and Industry

and the CPI indices that are

published on the website of Labour

Bureau, Government of India.Hence

the CPI and WPI indices are

considered as suggested.Further,

CESC Mysore has considered the

CPI for industrial workers from April to

March i.e., the financial year,

whereas the Objector has

considered the CPI for industrial

workers from January to December.

As such, there is some difference in

the indices.CESC is making

contribution to separate Trust called

the KPTCL & ESCOMS Pension and

Gratuity Trust (KEPGT). In the

absence of any corpus provided for

by the Government at the time of its

inception, the Trust has to invest

money obtained as contribution by

the electricity companies in order to

pay pension/ family pension and

gratuity to the retired officials.

Interest earned on such investment

does not come into the Account of

CESC Mysore. Contributions made

ccvi

are expected to meet not only

present but future outgoes. The

interest earned on investments of

KEPGT cannot be treated as interest

earned on investment of CESC

Mysore and hence, reducing the

yearly provision for pension and

gratuity fund by interest income

earned or reducing the ARR by such

interest income by computing a

revenue side truing up will not arise.

Commission's Views: The basis for allowing the inflation factor and for allowing

pension contribution as uncontrollable O & M expenses are explained in the

relevant tariff orders. The Commission has considered the MYT norms irrespective

of the claims of the petitioner.

5

The CESC has claimed the interest on

working capital on normative basis,

without any sharing of gains with the

consumers on actual basis, contrary to

the Tariff Regulations. The consumer

security deposits ought to have been

deducted from the working capital for

the purposes of calculation of interest on

working capital. The consumer security

deposits are to the tune of Rs.432.11

Crores in 2014-15 as per audited

accounts and has been projected to be

Rs.490.63 Crores in 2016-17. The CESC is

double charging the consumers by

claiming interest on working capital

without accounting for the consumer

security deposits which have been

utilised as working capital. Hence, the

Commission has to reduce the security

Only actual expenditure incurred

towards interest on working capital is

reflected in the Annual Accounts of

CESC Mysore for FY15.

For FY16, the interest on working

capital is calculated based on the

prevailing rates fixed by the banks

on borrowings. CESC has availed

borrowings at a rate of interest less

than that approved by KERC.

The security deposit collected from

consumers has been utilized as part

of working capital. As a result, the

interest on working capital is

reduced and the consumer is also

indirectly benefitted.

ccvii

deposits from the working capital for

computing the interest on working capital

or approve a notional interest income @

9% on the security deposits as CESC has

not retained the same in the retail supply

business.

Commission's Views: The interest on working capital is being allowed as per the

provisions of the MYT Regulations. Any savings in the interest on working capital is

passed on the consumers by way of reducing the normative interest.

6 The CESC has claimed the interest on

security deposits during 2016-17 at a rate

of 9% and the same is not in consonance

with the clause 3.1 of the KERC (Interest

on Security Deposit) Regulations, 2005

which provides for considering the bank

rate as on 1st April of the relevant

financial year.

The interest rate as prescribed by RBI

for FY 15 is 9%. Hence CESC has

projected the Interest rates at 9% for

projected years. During the truing

up, the Commission will consider the

actual rate of interest and allow that

quantum of expenditure.

Commission's Views: The interest on security deposits of consumers is being

regulated as per the provisions of the Electricity Act and the Regulations framed

by the Commission, irrespective of the claims by the Petitioner.

7

CESC has claimed expenses of Rs.4.94

Crores and Rs.5.94 Crores during FY15

and FY17 towards Losses relating to

Fixed Assets and such claims are

extraneous to the Tariff Regulations. CESC

has not been able to demonstrate the

benefits of the expenses which have

accrued to the consumers. Hence, the

expenses have to be disallowed.

The expenditure related to Other

Debits for FY15 is based on the

audited financial statements i.e. the

actual expenditure incurred.

Majority portion of the expenditure is

related to Provision for bad and

doubtful debts which is done on

case to case basis. For projected

period it is assumed and projected

that there will be an increase of Rs.1

Crore per year.

Commission's Views: The Commission has not been allowing the provisions for

ccviii

bad debts automatically and only the allowable other debits are being allowed.

8 For additional sale of power to the

subsidized consumers above the

approved sales, the Government has to

release additional subsidy at the average

cost of supply. In the circumstances, the

consumers are entitled for a refund / tariff

reduction of Rs.116.20 Crores in FY15 as

against a surplus of Rs.40.27 Crores

computed by the Petitioner.

The Commission will decide the tariff

rate and subsidy amount and until

such time, existing rates are

considered for subsidy calculation.

Commission's Views: The Tariff of the subsidized consumers is determined by the

Commission as CDT. The difference in subsidy arises only when the consumption

of subsidized categories exceeds the approved energy or when the costs are

above the approved average costs. Hence the question of refunding the

amount to other consumers will not arise.

9

The allowable ARR for FY 17 is Rs.3586.35

Crores vis-a-vis the ARR of Rs.3698.22

Crores projected by CESC.

The objector’s assessment clearly

indicates that there is no proposed

disallowance against CESC’s

projected power purchase cost for

FY-17. As such, any disallowance in

ARR for FY-17 cannot be accepted.

Commission's Views: The basis for allowing the ARR is discussed in the Tariff

Order.

10 The Tariff Policy read with Section 61(g) of

the Act, provides that the Commission is

required to ensure that the cross subsidies

are to be progressively reduced and that

tariff for each category is within ±20% of

the overall average cost of supply latest

by the year 2010- 11. CESC has not been

able to adhere to the mandate of the

Tariff Policy. The subsidizing consumers

such as industrial consumers cannot be

penalized, for making good the cost, to

CESC, Mysore will abide by the

orders of the Commission in this

regard.

ccix

be recovered from the subsidized

category beyond the permissible ±20% of

the average cost of supply. Any benefit

which the Licensee wants to confer to

the subsidized category beyond the

maximum of ±20% should be recovered

through Government subsidy.

Commission's Views: The Commission has dealt with this issue suitably in the Tariff

Order.

11 Rural areas have a tremendous scope in

load management as the pump sets

used for irrigation purposes are highly

inefficient and since the power supply is

free, the farmers have least interest in

efficiency of the equipment. CESC has

not provided any concrete plan towards

agricultural DSM in its ARR and tariff

proposal

1337 inefficient IP sets have been

replaced with energy efficient

pump sets during March 2015. A

detailed analysis has also been

furnished in the application for APR

for FY-15.

Commission's Views: The Commission has issued DSM Regulations recently and

would monitor the progress of implementation of DSM programmes that CESC is

required to take up.

12 There are no separate estimates provided

for technical and commercial losses.

Hence, the Commission may either

require the Licensee to carry out proper

loss estimation studies for assessment of

technical and commercial losses under its

supervision, or initiate a study itself to

segregate voltage wise distribution losses

into technical loss (i.e. Ohmic/Core loss in

the lines, substations and equipment) and

commercial loss.

Detailed procedure is being

awaited for segregation of

Commercial and Technical losses.

Commission's Views: The computation of distribution losses at 11 KV feeder level

and DTC levels has already been initiated by the ESCOMs as directed by the

ccx

Commission. This enables determination of technical losses. Further energy

auditing at DTC levels as directed by the Commission, enables computation of

DTC level losses, which includes commercial losses and technical losses. This

mechanism of DTC wise energy audit, after its full implementation, would enable

complete segregation of technical and commercial losses in the distribution

system. The Commission is monitoring the implementation of these measures.

13 An appropriate roadmap for 100%

metering of particularly IP Sets should be

approved by the Commission and a

realistic time frame should be laid. The

road map should provide for disincentives

in case of slippages / noncompliance by

the Licensee towards the targets set for

metering.

CESC Mysore will abide by the

decision of G.O.K. and the

Commission in this regard

Commission's Views: The Government has been paying subsidy towards power

supplied to the irrigation pump sets based on the assessed consumption with

reference to DTC metering of the predominantly agricultural feeders. With the

proposed segregation of agricultural and non-agricultural feeders and also DTC

metering, it would be possible to assess the IP set consumption with substantial

accuracy till complete metering of all IP Set installations is achieved.

14

Even though NJY work is completed, the

rural areas are not being provided power

supply for 24X7 Hrs. Hence a hike of tariff

by Rs.1.02 should not be allowed.

The NJY feeders are constructed to

provide 24X7 Hrs power supply to

rural areas, but, due to failure of pin

insulators in some of the NJY feeders

in Kollegal, the interruptions has

resulted in lesser hours of power

supply. CESC has taken steps to

replace the faulty 11kV pin insulators

Commission's Views: The Commission is regularly monitoring the quality of power

supply by all ESCOMs and directing corrective measures wherever references

are noticed. The issue of revision of tariff is discussed in the Tariff Order.

15 The Commission has to consider the

nature and purpose for which the

electricity supply is utilized by BWSSB and

The tariff for various categories of

consumers is determined by the

Commission and CESC, Mysore

ccxi

its social obligation to provide water to all

categories of citizens. The BWSSB has

stated that, the proposed hike of 102

paise per unit in power tariff would result

in additional burden of Rs.100 Crores.

abides by the orders of the

Commission.

Commission's Views: The Commission will deal with the matter appropriately.

16

BWSSB has stated that, increase of 102

paise per unit claimed by CESC is not

supported by additional information as

required under Regulations, CESC has not

filed the petition as per the chapter 2,

clause 2.8, of the Regulations. The

application is not made within 120 days

before the commencement of financial

year, hence, the application is not

maintainable. CESC has failed to furnish

the perspective plan, depreciation,

advance against depreciation as

required under Regulations. Further, the

application may be rejected as CESC has

failed to furnish the data of past two

years preceding the base year as per

clause 3.10 of the regulations.

The Application for Annual

Performance Review of CESC,

Mysore for FY 15 has been filed

before the Commission on

30.11.2015 and the application for

determination of tariff for FY17 has

been filed on 15.12.2015. Extension

of time up to 15-12-2015 has been

granted by the Commission for filing

of application for MYT for FY-17 FY-

19/revision of tariff for FY-17 in

respect of CESC Mysore vide letter

no KERC/B5/15/1467 dt.01.12.2015

and filing has been made on 15-12-

2015, within the time specified by

the KERC. The perspective plan for

the period FY-17 to FY-21 has been

submitted to the Commission on 15-

12-2015 along with the MYT filing

application for the years FY-17 to F-

19. The perspective plan contains

Sales forecast, CAPEX and power

procurement plan Income and

expenditure projections including

Projected Balance sheet for the

years FY-17 to FY-21.

Commission's Views: The reply furnished by CESC is reasonable.

ccxii

17 CESC has not indicated any steps to

improve its efficiency to transfer the

benefit of efficiency gains to the

consumers and in the absence of any

specific gains the application is not

maintainable. CESC has failed to improve

efficiency and has not complied with all

the directives properly. Hence, the

Commission has to reverse the earlier

increased tariff instead of revising it

further.

CESC Mysore has taken steps for the

improvement of the system. The

Distribution losses of CESC, Mysore

has reduced from 15.07 % during

FY13 to 14.73 % during FY14 and to

13.88% during FY-15. The distribution

loss as approved by KERC for FY15 in

respect of CESC, Mysore is 15%.The

capex incurred during FY15 is

Rs.368.12 Crores for various E&I

/NJY/RAPDRP/Rural Electrification

works.

Commission's Views: The Commission has discussed the issue of compliance with

directives and given its decision on the claim for tariff hike in the Tariff Order.

18 The Regulatory asset of Rs.120.41 Crores

pertaining to FY13 should not be carried

forward to FY17.

As stated in the Tariff order 2015,

Rs.120.41 Crores is shown as

regulatory asset for FY17.

Commission's Views: This matter has been dealt with in the Tariff Order.

19

CESC has not indicated the outstanding

arrears of local bodies in the deficit of

Rs.613.42 Crores for FY17. CESC has to

collect the arrears from the local bodies

and improve the collection efficiency

from 88.35% to 100%.

CESC Mysore is accounting the

income on accrual basis. Hence the

Collection of arrears does not have

any impact on revision of tariff.

CESC Mysore is making all efforts to

recover the Consumer dues

including dues pertaining to

Statutory institutions (local bodies).

The collection efficiency of principal

amount is 100.73% and tax

collection is 88.35%.

Commission's Views: The reply furnished by CESC is acceptable.

20 As per the tariff policy the tariff to be

fixed should be within +/- 20 % of the

“cost to serve”. Since the cost to serve of

CESC has not been approved by the

The details have been furnished in

formats D23 a, b and c in the MYT

application for FY-17 to FY-19 and

also in the replies to the general

ccxiii

Commission, it is not possible to verify

whether the proposed tariff is within limits.

observations of the Commission.

Commission's Views: This aspect has been suitably dealt with in the Tariff Order.

21

As per section 23 of the Act, CESC should

have taken approval of the Commission

for load shedding, but, CESC is resorting

to unscheduled load shedding on its own

which is adversely affecting the industries.

Load shedding is being done only as

a last resort in the identified specific

stations and feeders when there is

shortage of availability of power

and to maintain grid discipline.

Scheduled interruptions are being

brought to the notice of the public

by publishing the same in

newspapers.

Commission's Views: The reply furnished by CESC is reasonable. The Commission

is monitoring the compliance of ESCOMs to its directives on load shedding and

adoption of modes of communication with the consumers.

22 The cost of power to IP Sets is being

recovered from the Industrial consumers

through cross subsidy, which is not proper.

The CDT for IP sets under LT4a

category is Rs.4.40 per unit as per

the tariff order of the Commission

issued on 02-03-2015.

Commission's Views: The Electricity Act, 2003 provides for levy of cross subsidy as

specified in the Act, the Commission’s endeavour has been reduce cross

subsidies, as far as possible.

23

CESC has not furnished annual abstract

of reliability index and the number of IP

sets after enumeration.

CESC Mysore is furnishing the details

of reliability index of feeders to the

Commission every month. All the

regularized IP sets have been

included in the DCB for which

subsidy is being claimed from G.O.K.

Commission's Views: The reply furnished by CESC is acceptable. The Commission

is hosting all the data of ESCOMs on the reliability Indices.

ccxiv

24 The connected load in HP of

Unauthorized IP sets, their consumption is

not known. CESC is manipulating their

numbers, consumption, consequently

subsidy amount and percentage of

losses. CESC has not taken any effective

measures to regularize the un-authorized

IP Sets and meter the IP Sets

The Commission had approved a

specific consumption of 8195

units/installation/IP set per annum for

FY14 to FY16. As per the IP set

consumption for FY15, the specific

consumption is 7843 Units per

annum. The number of unauthorized

IP sets regularized as on 31-01-2016 is

52715.

Commission's Views: The matter is appropriately dealt in the Tariff Order.

25 CESC has not made available details of

slab wise sanctioned load, fixed charges,

energy charges and consumption and

GIS mapping of at least one feeder with

transformer centers as directed by the

Commission.

Slab wise consumption, energy

charges and fixed charges details

are made available in form D-21 in

the application for ERC and Tariff

revision for FY-17 filed before the

Commission.

Commission's Views: The reply furnished by CESC is acceptable. It is not

practicable to furnish slab-wise sanctioned load, fixed charges etc., as the

consumptions keep varying month on month.

26

CESC has not indicated the details of the

total amount of consumer deposits and

the quarterly interest paid

For FY 14-15, CESC Mysore has paid

9% interest on consumer security

deposit to the consumers and the

interest is credited to the consumer

account in the 1st quarter of FY15-16

as per the KERC (interest on security

deposit) Regulations-2005.

Commission's Views: This issue has been suitably dealt with in the Tariff Order.

27

The solar energy incentive needs to be

increased to encourage people to go in

for the alternate source of energy in a big

way.

CESC has purchased 14.50 MU of

solar power during FY-15 which

amounts to 0.23% of the total power

purchased and signed PPAs with

seven solar power producers for

purchase of solar energy. Two solar

power producers have

ccxv

commissioned their solar power

plants of 5MW capacity each and

power is being procured from them.

One other solar power producer is

scheduled to commission his 10 MW

solar power plant during March

2016.

Commission's Views: This is not a tariff related issue.

28 The management audit of the

companies is to be carried out to

increase the efficiency and incentivize

the companies for better performance

CESC, Mysore will abide by the

instructions in the Tariff Orders issued

by the Commission from time to

time.

Commission's Views: The ESCOMs are owned by the Government of Karnataka

and hence the C A & AG is conducting their audit which includes performance

audit. Also ESCOMs, being companies under the provisions of the Companies

Act, they are also subjected to Statutory Audit by the Chartered Accountants.

29 The prompt payers are to be rewarded

and the defaulters punished and the

names and photos of defaulters should

be published in newspapers.

In respect of defaulters, the

installations are being disconnected.

Also disconnection drives are being

undertaken to realize the arrears.

Commission's Views: As per the Tariff orders, there is an incentive for prompt

payment of bills through ECS. Defaulters are dealt with as provided under the

Electricity Act and Regulations made thereunder.

30 Existing rebate to installations with solar

water heating system is to be continued

and enhanced to Rs.100

CESC will abide by the orders of The

Commission.

Commission's Views: This issue has been dealt with suitably in the Tariff Order.

31

CESC has not given the details of how

many installations are yet to be serviced

with solar water heaters.

In CESC Mysore, all residential

buildings with built up area of 600

Sq. ft. and above constructed on

sites measuring 1200 sq. ft. and

above and falling within the limits of

Municipalities / Corporations are

ccxvi

being serviced only with solar water

heaters as per the GOK order no EN

87 NCE 2008/08-04-2008.

Commission's Views: The reply of CESC is reasonable.

32

CESC has to furnish the status of projects

listed under headings the CAPEX -16

(page45) to tune of Rs.883 Crores and

under regular planned works(page-46)

Rs.447 Crores and the means of Finance

including grant from the Government.

During the past years, CESC has not

achieved its earlier targets. Hence, the

Commission should restrict the capital

expenditure to realistic value.

There are a lot of works under E& I

like installation of additional

distribution transformers,

enhancement of DTCs, providing link

line etc. in all 15 divisions of CESC

Mysore. All these works are in various

stages like preparation of DPR, issue

of DWA, actual execution of works

etc. As these works are too many in

number, it is not possible to furnish

the status of each and every work.

As many projects are nearing

completion, the PERT & CPM charts

are not necessary. The means of

Finance for the above projects has

already been furnished in page 46

of application of MYT for FY-17 to FY-

19 and Tariff revision for FY-17.

Commission's Views: The reply furnished by CESC is reasonable.

33

CESC is not incurring any expenditure in

providing service connection to any

consumer. All the expenditures are borne

by consumers under self-execution

scheme. Under this head CESC has

proposed an expenditure of Rs.30 Crores

& Rs.l0.5 Crores under Planned Works.

Not all service connection works are

under self-execution scheme. Only if

the consumer expressively comes

forward to execute the work of

extension of line with/ without

transformer under self-execution

scheme, the work will be executed

by the consumer. Only in case of MS

buildings, New layouts and HT

installations the consumer has to

execute the work under self-

execution scheme.

ccxvii


34 The Projected gap for FY17 at Rs.613.16

Crores is not realistic as compared to the

gap for FY16 which is Rs.295.17 Crores.

CESC has not offered any

comments.

Commission's Views: The matter has been suitably dealt with in the Tariff Order.

35

CESC has not furnished the demand

pattern on various stations. CESC has

furnished the demand pattern of

Hootagally, Hunsur, Kadakola, Hebbal,

KHB colony, Metagally, without giving

allocation of power in terms of MVA.

The 220 kV Station wise allocation

will be given on daily basis in MU

(Million Units) and not in MVA. The

monitoring and control of CESC load

is done at 220kV level at DCC,

hence only the 220kV station wise

allocation and demand curves of

the stations feeding the KIAMA area

were furnished.

Commission’s Views: The reply furnished by CESC is reasonable.

36

CESC has not furnished the details about

installation of 1500 additional

transformers. Also, CESC has not

considered 500 transformers of different

capacities for redeployment, which

would have reduced the number of

additional transformers.

1500 DTC has to be installed in all 15

divisions of CESC Mysore with

capacities-25, 63, 100 KVA. The

exact number of transformers

installed will be made known in next

filing. Wherever possible the

released Transformers are used for

various work including for

replacement of failed Transformers


37 Under metering program, CESC has

shown Rs.110 Crores in Capex and Rs.80

Crores under regular planned works. In

reality CESC is collecting meter charges

from the consumers. For replacing

Electromechanical meters also, CESC is

collecting charges from consumers.

The total expenditure to be incurred

under metering programme is Rs.110

Crores out of which Rs.80 Crores

pertains to regular planned works.

This expenditure is for providing

thread through meters for

Distribution Transformers,

replacement of Electro mechanical

ccxviii

meters by static meters, providing

smart grid meters as per the

directives of Commission.


38

CESC has not taken action to purchase

transformers at the lowest quoted tender

price and has incurred a loss of Rs.20

Crores by such purchase.

Due procedure is followed in CESC

Mysore for procurement of all

material which include distribution

transformers. There is no question of

purchase at higher rates as claimed

by objector.

Commission's Views: The reply furnished by CESC is reasobale.

39 CESC has to collect dues of Rs.520 Crores

and Rs.745 Crores from Government and

Local bodies respectively and the interest

burden will be Rs.93 Crores, due to

delayed payments.

The arrears of Rs.745 Crores include

interest which is as per Tariff

Regulation. Hence, the question of

claiming interest does not arise.

Commission's Views: The reply furnished by CESC is acceptable. However, CESC

shall continue its efforts to collect these dues expeditiously.

40 Although the LT2(b) tariff is applicable to

Hospitals and Nursing homes as per the

recent tariff order, ESCOM is not

extending this benefit to Hospitals having

X-ray, Scanning facility, Canteen and

Drug shops on the ground that, the said

tariff is applicable only for lighting,

heating and motive power. Hence, the

nomenclature “nursing homes &

hospitals” should be changed as

“dispensary and outpatient medical

practitioner” under the tariff category LT-

2(b).

The Commission determines the Tariff

for various categories of consumers

as well as categorization in terms of

Tariff. CESC Mysore will abide by the

orders of the Commission.

Commission's Views: The reply furnished by CESC regarding tariff classification is

ccxix

acceptable.

41 The meter to be installed in consumer

premises should be supplied and owned

by CESC. CESC insists the consumer to

purchase and maintain the same. If

consumer purchases the meter, the

amount paid by the consumer for the

meter should be considered as meter

security deposit.

The consumer has to procure the

meters only from authorized outlets.

The meter will be tested and sealed

by CESC Mysore before fixing the

same to HT & LT installations and the

cost of purchase of the meter is

considered as Meter security deposit

(MSD).

Commission's Views: It is for the enabling speedy service connections, the

facility of installing meters at the cost of consumers, is provided. As regards

treating the meter cost as meter security deposit, there are no provisions to this

effect. The cost of meter met by the consumers is treated as consumers’

contribution for service connection.

42 As cheaper power is available in IEX as

short term power, ESCOMs should be

directed to adopt merit order despatch

principle while adhering to the day

ahead schedules, giving priorities to IEX

as power is available round the clock

and during night.

IEX in its representation to the

Commission has requested to direct

the DISCOMs to adopt the following

Merit Order Despatch (MOD)

principle which is appropriate.

Commission's Views: The ESCOMs are buying cheaper power whenever required

through the IEX based on the availability.

43 CESC has not billed 78242 installations out

of 52.26 Lakh installations resulting in

revenue deficit of Rs.146.14 Crores

CESC has not replied.

Commission's Views: The basis for this observation is not provided.

44 The cross subsidy surcharge proposed by

CESC is more than 25% increase over the

current cross subsidy surcharge.

According to the Tariff policy 2016, cross

subsidy surcharge should be capped at

20% of the tariff applicable to the

As stated in MYT filing, the CSS is

calculated based on the actual

realization rate and adopting the

surcharge formula as specified in

the KERC (Terms and Conditions for

Open Access) (First Amendment)

ccxx

category of consumers i.e. at Rs.1.73 per

unit for HT2(b) consumers.

Regulations 2006. KREC has issued

3rd Amendment to KERC (Terms and

Conditions for Open Access)

Regulations 2015 in October-2015

and the Commission has not

modified the calculation for CSS. If

KERC decides to modify the CSS as

per National Tariff Policy, CESC will

abide by Commissions decision

Commission's Views: Cross subsidy surcharge is being determined as per the

MYT Regulations.

Objections related to Quality of Service:

45

Continuity of power supply is not

maintained by CESC and the

interruptions are very high with

unscheduled load shedding and low

voltage problems. As the interruptions are

on a increasing trend, the power supply

situation and quality of power supply in

rural areas have been deteriorated

further during the current year. Hence,

CESC should reduce fixed charges on a

pro-rata basis.

The average duration of interruption

does not exceed 30hr/month which

is as fixed by the Commission. Efforts

are being made to reduce the

interruptions and ensure quality

power supply to all consumers. The

total interruptions include Scheduled

interruption for maintenance works

along with unscheduled outages

due to failure in power generation

and due to breakdown. The fixed

charges collected by CESC, from

consumers are in order.


46 CESC should rectify and replace sagging

wires, slant and deteriorated/broken

poles in rural areas. CESC is not properly

responding to the complaints lodged by

villagers through toll free number 1912.

Consumers can lodge their

complaints through toll free number

1912. CESC has introduced Public

Grievance Redressal System (PGRS )

and the web page for the same is

“http://www.cescmysorepgrs.com”

ccxxi


47 The interruption of power supply to the

healthy feeders is increasing. While taking

up maintenance of other feeders as the

healthy feeder crossing the faulty feeder

is switched off during the period. The

same work could be carried out by

switching off of GoS in the feeder, but,

CESC is resorting to easy way of taking LC

of entire feeder.

In case of some of the 11kV lines

crossing each other in

Madhuvanahalli area, CESC is

taking Line clear for both the

feeders during the maintenance

works.


48 The Bills issued should specify the slab

rates clearly and the print quality should

be improved.

CESC will take action to implement

the same.


49

The line from Mullur Village to Kollegal is

idle resulting in un-utilisation of the assets.

The line from Mullur village to

Kollegal is constructed by the

Karnataka Water Supply and

Sewerage Board which is idle and

CESC has communicated to them

for removing the line.

Commission's View: The reply furnished by CESC is reasonable.

50 CESC has not shown any seriousness in

complying with the directives of the

Commission viz., HVDS, DSM in agriculture,

DTC metering, reduction of distribution

losses, reducing HT: LT ratio, energy audit,

consumer indexing, improving reliability,

reducing accidents, Bachat lamp

yojana, metering of IP sets & BJ/KJ and

100% metering of installations.

CESC is implementing all the

directives of the Commission. The

details have been furnished in the

Application for APR for FY-15. Efforts

are being made to reduce the

interruptions and ensure quality

power supply to all consumers


ccxxii

51

ALDC which will help in monitoring of

loads is not operational in CESC

To monitor the loads of its jurisdiction

Distribution control Centre (DCC) is

established and is Operational since

April, 2011


52

CESC had stated that by August 2011 First

Phase work of Niranthara Jyothi in 161

feeders will be completed. Work is still

under progress and CESC has not

committed any completion date. Further

CESC has not quantified the

improvement in power supply to rural

areas and reduction in loss.

CESC has commissioned 127 feeders

in NJY phase-I and for 8 feeders

work is going on. After

commissioning of the NJY feeders in

the rural areas, the power supply

position has improved considerably.

The Distribution loss has reduced

from 15.07 % during FY 13 to 14.73 %

during FY14 and to 13.88% during FY-

15.


53 CESC has not furnished the information

on the accidents and has not educated

the consumers on prevention of

accidents. The Number of Fatal and Non-

fatal accidents are not furnished. CESC

has not taken any preventive

maintenance of its distribution system for

reducing the accidents.

The number of accidents during

FY13, FY14, FY15 and up to

December, 2015 are 157,174,197

and 169 respectively. The fatal

departmental/ Non departmental

accidents are 3/50, 3/64, 5/34 and

5/44 respectively for FY13, FY14,

FY15 and up to December, 2015.

Commission's Views: While CESC has furnished the details of accidents, it has not

furnished the details of consumer education and safety aspects and the

preventive maintenance work undertaken to prevent accidents. The

Commission is in the process of finalizing a ‘Manual for Safety / Technical Audit

of Power Distribution System. The compliance to the directives will be reviewed

in the ESCOMs review meeting.

54 CESC has not provided the details of

failed transformers and the expenditure

incurred to repair the failed transformers.

The rate of failure is very high due to poor

CESC has stated that, during FY15,

676 (4.8%) and 9695 (13.8%)

transformers have failed in urban

and rural respectively and Rs.20.51

ccxxiii

maintenance. Crores has been spent for repair of

failed transformers during FY15.

Commission's Views: The reply furnished by CESC is reasonable. The Commission

is also monitoring this issue in its quarterly review meetings.

55 Energy audit at inter-phase points is not

done. Energy audit of 15 towns is not

furnished. Figures pertaining to Energy

audit of 8 towns done by CPRI is not

supplied. Voltage wise losses are not

furnished.

CPRI is not conducting Energy Audit

in CESC Mysore. The details of

Energy Audit are furnished in pages

22 to 26 in the application for APR

for FY15.


56 The inventory of assets updated by the

officers are not being cross verified by the

higher officers.

CESC has not replied.

Commission's Views: This is not a tariff issue, but CESC should address this issue.

57 The number of un-metered installations is

increasing year by year resulting in

increased subsidy claims.

No new installation in its area is

serviced without a meter.

Commission's Views: The reply furnished by CESC is acceptable. Regarding of

metering of IP sets, the Commission has discussed the issue in the Tariff Order.

58 CESC is not adhering to Standards of

Performance (SoP) in replacement of

failed transformers and is not replacing

the failed transformer within 72 Hrs. The

Parameters of SoP should be displayed in

all O&M offices.

Out of 91148 distribution transformers

installed in CESC, 74427 transformers

are located in rural areas. Action is

being taken to replace the failed

transformers as per the SoP issued by

the Commission. If the O&M officers

fail to replace the transformers

within the stipulated time, penalty of

Rs.50 per day is being levied on the

officers.

Commission's Views: The reply of CESC is reasonable with regard to failed

transformers. CESC should ensure display of SoP parameters in all O & M offices.

Specific Requests :

ccxxiv

59 The fixed charges and the energy

charges are to be levied based on the

hours of power supply provided in the

rural area. (like Kollegal).

As per the current tariff structure, the

rural area consumers are paying 30

paise less than the urban areas.

Commission's Views: The fixed charges are incurred by ESCOMs irrespective of

the quantum of energy supplied and needs to be recovered.

60 To provide quality power supply, a

separate feeder from 220/ 66/ 11kV

Madhuvanahalli substation (Kollegal)

needs to be provided.

Niranthara Jyothi Yojana (NJY)

feeder is already commissioned to

Madhuvanahalli area. But, there are

RoW issues to construct NJY feeder

towards the Madhuvanahalli Village.

Commission's Views: The reply furnished is acceptable.

61 The demand based tariff is existing only

for LT3 and LT5. The demand based tariff

to be extended to other LT categories

such as) LT2(b), LT4, LT6 and LT7. The

consumer will not have any unnecessary

interference like meter testing and

vigilance raids. The exact load on

transformer can be calculated and large

capacity transformers can be avoided.

The Commission determines the Tariff

for various categories of consumers

as well as categorisation in terms of

Tariff. CESC Mysore will abide by the

orders of the Commission.

Commission's Views: Demand based tariff is provided to LT3 and LT5 category

having connected load of 5kW and above. As per the provisions of demand

based tariff, the consumers can have the load more than the sanctioned load in

his premises. In case of LT2(a) as per the Regulations, fixed charges for domestic

and A.E.H category shall be based on the sanctioned load, irrespective of the

connected load, as long as the load limiter is working in good condition. Hence,

demand based tariff is not suitable for this category. Other categories such as

LT2(b) (except educational institutions), LT4, LT6 and LT7 should not have the

load more than sanctioned load. As, the meters fixed to these categories of

installations have no option for recording maximum demand.

ccxxv

62

ToD should be made optional as

industries are facing difficulties due to

compulsory implementation of ToD.

The detailed analysis after

implementation of TOD is under

process. CESC has proposed

another slab for TOD tariff i.e. from

06:00 hrs to 10.00 hrs in the tariff

proposals.

Commission's Views: This issue has been dealt with in the Tariff Order.

63

Independent feeders should be provided

for the industries to reduce interruptions.

At present there are 68 industrial

feeders in CESC Mysore. It is

proposed to provide additional

independent feeders during FY 17

through bifurcation and creation of

link lines both under E&I and the

newly introduced IPDS of the Central

Government.

Commission's Views: The reply furnished is reasonable.

64 LT4 (c) i and ii consumers should be

clubbed into one category considering

the paying capacity of Coffee growers

while determining the tariff as against the

existing basis of below 10 HP and above

10 HP in the LT4 (c) (i) and (ii) categories.

CESC, will abide by the orders of the

Commission

Commission's Views: Coffee plantations have been given a special status as

compared to other agricultural lands and therefore coffee planters cannot be

treated on par with other agriculturists. Further, extending any subsidy to coffee

plantations has to be decided by the State Government.

65 Uninterrupted power supply to be

provided during November to February

from 3 pm to 8 pm to enable the coffee

growers to process coffee.

Clear instructions will be issued to

the concerned for the maintenance

of uninterrupted power supply as

requested

Commission's Views: : The reply furnished is acceptable.

66 SMS alert and Email should be introduced

to inform consumers about the power

cuts.

As per the directions of the

Commission, CESC has floated a

tender to develop application

ccxxvi

software – SDRA (SCADA Data

Reporting and Analysis) - for

providing information of the time

and duration of unscheduled

interruptions to the consumers

through SMS. DWA has been issued

to the successful bidder and the

work is under progress.

Commission's Views: The reply furnished is acceptable.

67 Due to high cost of fertilizers, shortage of

labour and volatile prices for Coffee, the

Coffee growers are facing hardship and

any increase in existing tariff would

increase the burden on the Coffee

growers. The Coffee plantations use IP

sets for a period of 6 weeks in a year

during February and March and only as

back up when rains fail, Hence, Coffee

plantations have to be considered as

seasonal industry and tariff concession

has to be provided.

The tariff for various categories of

consumers is determined by the

Commission. CESC, Mysore will

abide by the orders of the

Commission.

Commission's Views: The matter has been suitably dealt with in the Tariff Order.

68 The Coffee plantations should be

exempted from payment of reintroduced

Electricity tax of 10 paise per unit on

captive generators

CESC has not furnished the replies.

Commission's Views: This is not a levy under the purview of the Commission.

69

3 Phase power supply to be given during

the day time to IP Sets, instead of during

night to avoid inconvenience to farmers

of Mandya District.

Providing 3 phase power supply

during the day time instead of night

is not possible as the transformers at

the main substation, i.e. 400 /220 KV

Basthipur substation will be over

loaded and the 11 kV feeders will

ccxxvii

get overloaded due to continuous

loading. Hence, as per the

directions of the Government, 4

hours 3 phase supply during the day

time and 3 hours 3 phase supply

during the night time will be

provided to IP Sets and drinking

water supply in the Rural areas.

Commission's Views: The reply furnished is reasonable.

70 The Additional Director General of Police,

Administration, Bengaluru, has requested

to include police stations under LT2 (a)

category instead of LT3 category

considering the nature of service

rendered by the Police to the citizens.

The classification of categories and

the determination of tariff are done

by the Commission and CESC

Mysore abides by the orders of the

Commission.

Commission's Views: The Police stations are office establishments like any other

office. The usage of power in not for domestic purposes, hence the request to

charge police station at LT2a, is not reasonable.

The gist of the submissions made during the Public Hearing, held on

27.02.2016.

1 Power purchases made by CESC should

be planned in advance.

CESC has suitably replied to the

points raised by the public, during

the public hearing.

2 Solar energy purchased at a higher price

will result in a loss of Rs.2-3 per unit to

CESC.

3 Unmetered consumption has increased

by 39% causing revenue loss.

4 The benefits of implementation of NJY

should have been more than Rs.54 Crores

as claimed by CESC. Proper analysis

needs to be made in this regard.

5 1.5% of the installations are not billed,

causing loss to an extent of Rs.32 Crores

ccxxviii

and also an amount of Rs.40 Crores

revenue not collected from 1.6 % of

installations.

6 The Distribution transformers procured

from M/s Kavika at higher cost has

resulted in loss to the tune of Rs.300Crores.

Hence, transformers have to be procured

through tendering process to reduce

cost.

7 A separate category of tariff has to be

fixed for Micro Small and Medium

Enterprises (MSME) sector as in Gujarat.

The cross subsidy should not be levied on

Micro industries.

8 The Power supply should not be

extended to the industries coming up in

unauthorized/revenue areas.

9 The energy efficient LED bulbs should be

provided to industries also.

10 The Capacitors of adequate capacity

should be mandatorily fixed to IP Sets to

improve the power factor and the same

should be monitored by ESCOMs

11 The Consumer interaction meetings are

not being conducted by CESC. Hence,

Rs.50 lakhs earmarked for consumer

education/interaction should not be

allowed.

12 The capital expenditure of Rs.883 Crores is

twice the approved capex. The same

should be recovered from the

Government and not loaded on the

industrial consumers.

13 The implementation of Smart Grid at a

ccxxix

cost of Rs.32 Crores should not be

burdened on the consumers.

14 The Complaints regarding theft of

electricity and hazardous installations in

electrical network and also street light

installations are not being attended on

priority. The elephant deaths by

electrocution is increasing in the elephant

corridors due to inadequate safety

clearances.

15 34 Nos of villages in and around

Malemahadeshwara hills are yet to be

electrified.

16 Additional transformers have to be

provided for servicing of IP sets under

Regularization scheme. Procedure for

regularization of IP Sets to be made

simpler to avoid inconvenience.

17 Even though 30% of IP Sets are defunct,

CESC has considered them for

computation of IP Set consumption.

18 The released assets like, poles, cross arms

etc. are lying idle on the street side. The

same should be properly put to use.

19 Energy conservation measures to be

taken up and awareness about the same

needs to be created.

Commission's Views: The Commission has considered the points raised by the

public and the points relating to tariff have been given due considering while

passing the Tariff Order.

ccxxx

ANNEXURE - I

ESCOMS’ TOTAL APPROVED POWER PURCHASE FOR FY17

NAME OF THE GENERATING STATION

ENERGY

ALLOWE

D (MU)

CAPACIT

Y

CHARGES

(RS Cr)

ENERGY

CHARG

ES (RS

Cr)

TOTAL

COST

(RS Cr)

PER UNIT

RATE

(RS/

Kwh)

KPCL THERMAL STATIONS

RAICHUR THERMAL POWER STATION_RTPS 1-7 (7x210) 7538.53 619.64 2327.80 2947.44 3.91

RAICHUR THERMAL POWER STATION_RTPS 8 (1x250) 1510.85 211.06 454.42 665.49 4.40

BELLARY THERMAL POWER STATIONS_BTPS-1 (1x500) 2823.10 295.60 1035.95 1331.55 4.72



TOTAL KPCL THERMAL 17646.77 1570.36 5681.72 7252.08 4.11

CGS SOURCES

N.T.P.C-RSTP-I&II (3X200MW+3X500MW) 3246.74 197.69 739.53 937.23 2.89

N.T.P.C-RSTP-III (1X500MW) 819.69 75.28 192.48 267.76 3.27

NTPC-Talcher (4X500MW) 2765.03 213.25 400.36 613.61 2.22

Simhadri Unit -1 &2 (2X500MW) 1490.74 226.09 363.15 589.24 3.95

NTPC Tamilnadu Energy Company Ltd (NTECL)_Vallur TPS Stage I

&2 &3 (3X500MW) 1081.78 174.91 222.18 397.09 3.67

Neyveli Lignite Corporation_NLC TPS-II STAGE I (3X210MW) 950.35 68.49 228.93 297.41 3.13

Neyveli Lignite Corporation_NLC TPS-II STAGE 2 (4X210MW) 1280.64 105.25 308.49 413.73 3.23

Neyveli Lignite Corporation_NLC TPS I EXP (2X210MW) 731.33 90.16 182.73 272.90 3.73

Neyveli Lignite Corporation_NLC TPS2 EXP (2X250MW) 865.82 111.21 199.16 310.37 3.58

NLC TAMINADU POWER LIMITED (NTPL) (TUTICORIN) (2X500MW) 1442.76 185.27 371.08 556.34 3.86

MAPS (2X220MW) 249.31 0.00 49.86 49.86 2.00

Kaiga Unit 1&2 (2X220MW) 922.44 0.00 274.89 274.89 2.98

Kaiga Unit 3 &4 (2X200MW) 1001.80 0.00 298.54 298.54 2.98

NPCIL-Kudan Kulam Atomic Power Generating Station (KKNPP)

(1X1000MW) 1527.09 0.00 455.07 455.07 2.98

DVC-Unit-1 &2 Meja TPS (2x500MW) 1574.83 274.91 360.39 635.30 4.03

DVC-Unit-7 & 8-KODERMA TPS (2x500MW) 1574.83 261.62 349.87 611.49 3.88

TOTAL CGS 21525.17 1984.13 4996.71 6980.84 3.24

TOTAL MAJOR IPPS

UDUPI POWER CORPORATION LIMITED_UPCL (2x600) 7462.68 1325.73 1767.94 3093.67 4.15

KPCL HYDEL STATIONS

SHARAVATHI VALLEY PROJECT_SVP (10x103.5+2x27.5) 4203.20 20.49 182.11 202.60 0.48

MAHATMA GANDHI HYDRO ELECTRIC POWER HOUSE_MGHE

(4x21.6+4x13.2) 180.68 2.32 17.79 20.11 1.11

GERUSOPPA_GPH (SHARAVATHI TAIL RACE_STR) (4x60) 527.47 24.38 55.93 80.30 1.52

KALI VALLEY PROJECT_KVP (2x50+5x150+1x135) 2923.95 19.16 229.11 248.27 0.85

VARAHI VALLEY PROJECT_VVP (4x115+2x4.5) 1087.86 11.82 129.40 141.22 1.30

ALMATTI DAM POWER HOUSE_ADPH (1x15+5x55) 523.72 27.51 80.48 107.99 2.06

ccxxxi

BHADRA HYDRO ELECTRIC POWER HOUSE_BHEP

((1x2+2x12)+(1x7.2+1x6)) 65.15 1.14 29.76 30.90 4.74

KADRA POWER HOUSE_KPH (3x50) 355.25 19.15 47.57 66.72 1.88

KODASALLI DAM POWER HOUSE_KDPH (3x40) 325.56 12.00 34.43 46.42 1.43

GHATAPRABHA DAM POWER HOUSE_GDPH (2x16) 91.67 1.96 14.77 16.74 1.83

SHIVASAMUDRAM (4x4+6x3) & SHIMSHAPURA (2x8.6) HYDRO

STATIONS_SHIVA & SHIMSHA 310.76 3.54 27.46 31.00 1.00

MUNIRABAD POWER HOUSE (2x9+1x10) 109.63 0.43 8.68 9.11 0.83

TOTAL KPCL HYDRO 10704.90 143.90 857.48 1001.38 0.94

OTHERS

PRIYADARSHINI JURALA HYDRO ESLECTRIC STATION (6x39) 111.61 65.09 0.00 65.09 5.83

TUNGABHADRA DAM POWER HOUSE_TBPH (4x9+4x9) 32.47 2.64 0.00 2.64 0.81

TOTAL OTHER HYDRO 144.08 67.73 0.00 67.73 4.70

SHORT TERM POWER

SHORT TERM POWER 1108.80 0.00 558.84 558.84 5.04

NON-CONVENTIONAL ENERGY SOURCES

WIND-IPPS 3826.75 0.00 1368.74 1368.74 3.58

KPCL-WIND (9x0.225+10x0.230) 12.86 0.00 4.32 4.32 3.36

MINI HYDEL-IPPS 1344.12 0.00 450.45 450.45 3.35

CO-GEN/CAPTIVE 172.09 0.00 65.02 65.02 3.78

BIOMASS 196.60 0.00 97.72 97.72 4.97

SOLAR-IPP 1261.40 0.00 784.50 784.50 6.22

SOLAR-KPCL (YELESANDRA,ITNAL,YAPALDINNI,SHIMSHA)

(3x1+3x1+1x3x1x5) 32.89 0.00 19.63 19.63 5.97

TOTAL NCE 6846.71 0.00 2790.38 2790.38 4.08

TRANSMISSION CHARGES

PGCIL CHARGES 949.21 949.21 0.44

KPTCL CHARGES 3092.77 3092.77 0.47

SLDC & POSOCO CHARGES 19.99 19.99 0.003

TOTAL INCLUDING TRANSMISSION & LDC CHARGES 65439.11 5091.87 20715.0

2

25806.8

9 3.94



ENERGY

ALLOWED

(MU)

CAPACI

TY

CHARGE

S (RS Cr)

ENERGY

CHARGES

(RS Cr)

TOTAL

COST

(RS Cr)

PER UNIT

RATE

(RS/

Kwh)








ccxxxii

CGS SOURCES


N.T.P.C-RSTP-III (1X500MW) 819.69 75.28 196.33 271.61 3.31

NTPC-Talcher (4X500MW) 2765.03 213.25 408.37 621.62 2.25



&2 &3 (3X500MW) 1081.78 176.33 226.63 402.96 3.72






MAPS (2X220MW) 249.31 0.00 50.86 50.86 2.04

Kaiga Unit 1&2 (2X220MW) 922.44 0.00 280.39 280.39 3.04

Kaiga Unit 3 &4 (2X200MW) 1001.80 0.00 304.51 304.51 3.04


(1X1000MW) 1527.09 0.00 464.17 464.17 3.04



TOTAL CGS 21525.17 1985.60 5096.64 7082.24 3.29

TOTAL MAJOR IPPS


KPCL HYDEL STATIONS



(4x21.6+4x13.2) 195.03 2.32 20.00 22.32 1.14






((1x2+2x12)+(1x7.2+1x6)) 63.36 1.14 30.59 31.73 5.01





STATIONS. 330.66 3.54 30.45 33.99 1.03


TOTAL KPCL HYDRO 12045.33 142.53 956.63 1099.16 0.91

OTHER HYDRO


ccxxxiii


TOTAL OTHER HYDRO 144.08 71.64 0.00 71.64 4.97


WIND-IPPS 3981.63 0.00 1424.99 1424.99 3.58

KPCL-WIND (9x0.225+10x0.230) 12.86 0.00 4.32 4.32 3.36

MINI HYDEL-IPPS 1344.81 0.00 450.68 450.68 3.35

CO-GEN/CAPTIVE 172.09 0.00 64.12 64.12 3.73

BIOMASS 262.15 0.00 135.15 135.15 5.16

SOLAR-IPP 2588.38 0.00 1314.95 1314.95 5.08


(3x1+3x1+1x3x1x5) 32.89 0.00 19.63 19.63 5.97

TOTAL NCE 8394.81 0.00 3413.83 3413.83 4.07


PGCIL CHARGES 958.70 958.70 0.45

KPTCL CHARGES 3171.28 3171.28 0.46


TOTAL INCLUDING TRANSMISSION & LDC CHARGES 68895.57 5569.41 21774.55 27343.96 3.97

ccxxxiv



ENERGY

ALLOWED

(MU)

CAPACI

TY

CHARGE

S (RS Cr)

ENERGY

CHARGES

(RS Cr)

TOTAL

COST

(RS Cr)

PER UNIT

RATE

(RS/

Kwh)







YERMARUS THERMAL POWER STATION_YTPS (2x800) 1547.46 204.23 413.13 617.36 3.99


CGS SOURCES


N.T.P.C-RSTP-III (1X500MW) 819.69 75.28 200.26 275.54 3.36

NTPC-Talcher (4X500MW) 2765.03 213.25 416.53 629.79 2.28



&2 &3 (3X500MW) 1081.78 176.33 231.16 407.49 3.77






MAPS (2X220MW) 249.31 0.00 51.88 51.88 2.08

Kaiga Unit 1&2 (2X220MW) 922.44 0.00 285.99 285.99 3.10

Kaiga Unit 3 &4 (2X200MW) 1001.80 0.00 310.60 310.60 3.10


(1X1000MW) 1527.09 0.00 473.46 473.46 3.10



TOTAL CGS 21525.17 1985.60 5198.58 7184.17 3.34

TOTAL MAJOR IPPS


KPCL HYDEL STATIONS



(4x21.6+4x13.2) 195.03 2.32 20.83 23.16 1.19




ccxxxv



((1x2+2x12)+(1x7.2+1x6)) 63.36 1.14 32.33 33.47 5.28





STATIONS_SHIVA & SHIMSHA 330.66 3.54 31.75 35.29 1.07


TOTAL KPCL HYDRO 12045.33 138.20 1001.17 1139.37 0.95

OTHERS



TOTAL OTHERS 144.08 75.78 0.00 75.78 5.26


WIND-IPPS 4649.94 0.00 1669.14 1669.14 3.59

KPCL-WIND (9x0.225+10x0.230) 12.86 0.00 4.32 4.32 3.36

MINI HYDEL-IPPS 1443.36 0.00 483.69 483.69 3.35

CO-GEN/CAPTIVE 172.09 0.00 64.12 64.12 3.73

BIOMASS 262.15 0.00 135.15 135.15 5.16

SOLAR-IPP 3692.28 0.00 2076.14 2076.14 5.62


(3x1+3x1+1x3x1x5) 32.89 0.00 19.63 19.63 5.97

NTPC- SOLAR 0.00 0.00 0.00 0.00 0.00

TOTAL NCE 10265.57 0.00 4452.20 4452.20 4.34


PGCIL CHARGES 968.29 968.29 0.45

KPTCL CHARGES 3472.60 3472.60 0.48


TOTAL INCLUDING TRANSMISSION & LDC CHARGES 72435.72 5795.47 23888.11 29683.58 4.10

ccxxxvi

ANNEXURE - II

APPROVED POWER PURCHASE FOR CESC - FY17


% SHARE

OF

ENERGY

ALLOWED

ENERGY

ALLOWE

D (MU)

CAPACI

TY

CHARGE

S (RS Cr)

ENERGY

CHARGE

S (RS Cr)

TOTAL

COST

(RS Cr)

PER UNIT

RATE

(RS/

Kwh)


RAICHUR THERMAL POWER STATION_RTPS 1-7 (7x210) 4.546 342.724 28.171 105.829 133.999 3.910

RAICHUR THERMAL POWER STATION_RTPS 8 (1x250) 11.053 166.995 23.329 50.228 73.557 4.405

BELLARY THERMAL POWER STATIONS_BTPS-1 (1x500) 11.053 312.039 32.673 114.504 147.177 4.717



TOTAL KPCL THERMAL 8.273 1459.994 133.255 476.539 609.794 4.177

CGS SOURCES

N.T.P.C-RSTP-I&II 3X200MW+3X500MW 11.053 358.864 21.851 81.741 103.592 2.887

N.T.P.C-RSTP-III (1X500MW) 11.053 90.600 8.321 21.275 29.596 3.267

NTPC-Talcher (4X500MW) 11.053 305.621 23.571 44.252 67.823 2.219

Simhadri Unit -1 &2 (2X500MW) 11.053 164.772 24.990 40.139 65.129 3.953

NTPC Tamilnadu Energy Company Ltd (NTECL)_Vallur TPS

Stage I &2 &3 (3X500MW) 11.053 119.570 19.333 24.558 43.891 3.671

Neyveli Lignite Corporation_NLC TPS-II STAGE I (3X210MW) 11.053 105.042 7.570 25.303 32.873 3.130

Neyveli Lignite Corporation_NLC TPS-II STAGE 2

(4X210MW) 11.053 141.550 11.633 34.097 45.730 3.231

Neyveli Lignite Corporation_NLC TPS I EXP (2X210MW) 11.053 80.834 9.966 20.198 30.163 3.732

Neyveli Lignite Corporation_NLC TPS2 EXP (2X250MW) 11.053 95.700 12.292 22.013 34.306 3.585

NLC TAMINADU POWER LIMITED (NTPL) (TUTICORIN)

(2X500MW) 11.053 159.470 20.478 41.015 61.493 3.856

MAPS (2X220MW) 11.053 27.556 0.000 5.511 5.511 2.000

Kaiga Unit 1&2 (2X220MW) 11.053 101.958 0.000 30.384 30.384 2.980

Kaiga Unit 3 &4 (2X200MW) 11.053 110.729 0.000 32.997 32.997 2.980

NPCIL-Kudan Kulam Atomic Power Generating Station

(KKNPP) (1X1000MW) 11.053 168.790 0.000 50.299 50.299 2.980

DVC-Unit-1 &2 Meja TPS (2x500MW) 11.053 174.067 30.386 39.834 70.220 4.034

DVC-Unit-7 & 8-KODERMA TPS (2x500MW) 11.053 174.067 28.917 38.671 67.588 3.883

TOTAL CGS 11.053 2379.190 219.307 552.289 771.597 3.243

TOTAL MAJOR IPPS

UDUPI POWER CORPORATION LIMITED_UPCL (2x600) 11.053 824.854 146.534 195.411 341.945 4.146

KPCL HYDEL STATIONS

SHARAVATHI VALLEY PROJECT_SVP (10x103.5+2x27.5) 22.723 955.097 4.656 41.380 46.036 0.482

MAHATMA GANDHI HYDRO ELECTRIC POWER

HOUSE_MGHE (4x21.6+4x13.2) 11.053 19.971 0.257 1.967 2.223 1.113

GERUSOPPA_GPH (SHARAVATHI TAIL RACE_STR) (4x60) 11.053 58.302 2.695 6.181 8.876 1.522

KALI VALLEY PROJECT_KVP (2x50+5x150+1x135) 11.053 323.186 2.117 25.324 27.441 0.849

VARAHI VALLEY PROJECT_VVP (4x115+2x4.5) 11.053 120.242 1.307 14.302 15.609 1.298

ALMATTI DAM POWER HOUSE_ADPH (1x15+5x55) 11.053 57.887 3.041 8.895 11.936 2.062


1x2+2x12)+(1x7.2+1x6 11.053 7.201 0.126 3.290 3.416 4.743

KADRA POWER HOUSE_KPH (3x50) 11.053 39.266 2.117 5.258 7.374 1.878

KODASALLI DAM POWER HOUSE_KDPH (3x40) 11.053 35.984 1.326 3.805 5.131 1.426

GHATAPRABHA DAM POWER HOUSE_GDPH (2x16) 11.053 10.132 0.217 1.633 1.850 1.826

ccxxxvii

SHIVASAMUDRAM (4x4+6x3) & SHIMSHAPURA (2x8.6)

HYDRO STATIONS 11.053 34.348 0.392 3.035 3.426 0.998

MUNIRABAD POWER HOUSE (2x9+1x10) 11.053 12.117 0.048 0.960 1.007 0.831

TOTAL KPCL HYDRO 15.635 1673.734 18.297 116.029 134.326 0.803

OTHERS

PRIYADARSHINI JURALA HYDRO ESLECTRIC STATION (6x39) 11.053 12.337 7.194 0.000 7.194 5.832

TUNGABHADRA DAM POWER HOUSE_TBPH (4x9+4x9) 11.053 3.589 0.292 0.000 0.292 0.813

TOTAL OTHERS 11.053 15.926 7.486 0.000 7.486 4.701

SHORT TERM POWER 11.053 122.556 0.000 61.769 61.769 5.040

RENEWABLE SOURCES

WIND-IPPS 0.000 200.170 0.000 71.461 71.461 3.570

KPCL-WIND (9x0.225+10x0.230) 0.000 0.000 0.000 0.000 0.000 0.000

MINI HYDEL-IPPS 0.000 300.260 0.000 100.587 100.587 3.350

CO-GEN/CAPTIVE 0.000 41.800 0.000 17.830 17.830 4.266

BIOMASS 0.000 2.530 0.000 1.230 1.230 4.862

SOLAR-IPP 0.000 104.430 0.000 53.730 53.730 6.160


(3x1+3x1+1x3x1x5) 0.000 0.000 0.000 0.000 0.000 0.000

TOTAL RENEWABLE SOURCES 0.000 649.190 0.000 244.838 244.838 3.771


PGCIL CHARGES 11.053 0.000 0.000 104.916 104.916 0.441

KPTCL CHARGES 11.053 0.000 0.000 344.440 344.440 0.483

SLDC & POSOCO CHARGES 11.053 0.000 0.000 2.400 2.400 0.003

TOTAL INCLUDING TRANSMISSION & LDC CHARGES 11.053 7125.444 524.880 2098.632 2623.512 3.682



% SHARE

OF

ENERGY

ALLOWED

ENERGY

ALLOWE

D (MU)

CAPACI

TY

CHARGE

S (RS Cr)

ENERGY

CHARGE

S (RS Cr)

TOTAL

COST

(RS Cr)

PER UNIT

RATE

(RS/

Kwh)








CGS SOURCES

N.T.P.C-RSTP-I&II (3X200MW+3X500MW) 11.328 367.790 22.395 85.450 107.844 2.932

N.T.P.C-RSTP-III (1X500MW) 11.328 92.854 8.528 22.241 30.768 3.314

NTPC-Talcher (4X500MW) 11.328 313.223 24.157 46.260 70.417 2.248

ccxxxviii



Stage I &2 &3 (3X500MW) 11.328 122.544 19.975 25.672 45.647 3.725



(4X210MW) 11.328 145.070 11.922 35.644 47.567 3.279




(2X500MW) 11.328 163.436 20.987 42.876 63.863 3.908

MAPS (2X220MW) 11.328 28.242 0.000 5.761 5.761 2.040

Kaiga Unit 1&2 (2X220MW) 11.328 104.494 0.000 31.762 31.762 3.040

Kaiga Unit 3 &4 (2X200MW) 11.328 113.483 0.000 34.494 34.494 3.040


(KKNPP) (1X1000MW) 11.328 172.988 0.000 52.581 52.581 3.040



TOTAL CGS 11.328 2438.368 224.928 577.347 802.275 3.290

TOTAL MAJOR IPPS


KPCL HYDEL STATIONS



HOUSE_MGHE (4x21.6+4x13.2) 11.328 22.093 0.263 2.265 2.528 1.144






((1x2+2x12)+(1x7.2+1x6)) 11.328 7.177 0.129 3.465 3.594 5.008





HYDRO STATIONS_SHIVA & SHIMSHA 11.328 37.457 0.401 3.449 3.851 1.028


TOTAL KPCL HYDRO 11.328 1364.494 16.146 108.367 124.513 0.913

OTHERS



TOTAL OTHERs 11.328 16.322 8.115 0.000 8.115 4.972

RENEWABLE SOURCES

WIND-IPPS 0.000 200.170 0.000 71.661 71.661 3.580

KPCL-WIND (9x0.225+10x0.230) 0.000 0.000 0.000 0.000 0.000 0.000

MINI HYDEL-IPPS 0.000 300.950 0.000 100.818 100.818 3.350

CO-GEN/CAPTIVE 0.000 41.800 0.000 16.930 16.930 4.050

ccxxxix

BIOMASS 0.000 2.530 0.000 1.230 1.230 4.862

SOLAR-IPP 0.000 221.520 0.000 112.532 112.532 5.080


(3x1+3x1+1x3x1x5) 0.000 0.000 0.000 0.000 0.000 0.000

TOTAL RENEWABLE SOURCES 0.000 766.970 0.000 303.171 303.171 0.000


PGCIL CHARGES 11.328 0.000 0.000 108.601 108.601 0.445

KPTCL CHARGES 11.328 0.000 0.000 332.240 332.240 0.436

SLDC & POSOCO CHARGES 11.328 0.000 0.000 2.700 2.700 0.004

TOTAL INCLUDING, TRANSMISSION & LDC CHARGES 11.328 7620.489 630.903 2355.846 2986.749 3.919



% SHARE

OF

ENERGY

ALLOWED

ENERGY

ALLOWE

D (MU)

CAPACI

TY

CHARGE

S (RS Cr)

ENERGY

CHARGE

S (RS Cr)

TOTAL

COST

(RS Cr)

PER UNIT

RATE

(RS/

Kwh)







YERMARUS THERMAL POWER STATION_YTPS (2x800) 11.641 180.147 23.775 48.095 71.869 3.989


CGS SOURCES

N.T.P.C-RSTP-I&II (3X200MW+3X500MW) 11.641 377.968 23.014 89.571 112.585 2.979

N.T.P.C-RSTP-III (1X500MW) 11.641 95.423 8.764 23.313 32.077 3.362

NTPC-Talcher (4X500MW) 11.641 321.891 24.826 48.491 73.316 2.278



Stage I &2 &3 (3X500MW) 11.641 125.935 20.527 26.910 47.438 3.767



(4X210MW) 11.641 149.085 12.252 37.363 49.616 3.328




(2X500MW) 11.641 167.959 21.568 44.944 66.512 3.960

MAPS (2X220MW) 11.641 29.023 0.000 6.039 6.039 2.081

Kaiga Unit 1&2 (2X220MW) 11.641 107.386 0.000 33.294 33.294 3.100

Kaiga Unit 3 &4 (2X200MW) 11.641 116.624 0.000 36.158 36.158 3.100

ccxl


(KKNPP) (1X1000MW) 11.641 177.775 0.000 55.117 55.117 3.100



TOTAL CGS 11.641 2505.845 231.153 605.190 836.343 3.338

TOTAL MAJOR IPPS


KPCL HYDEL STATIONS



HOUSE_MGHE (4x21.6+4x13.2) 11.641 22.704 0.270 2.425 2.696 1.187






((1x2+2x12)+(1x7.2+1x6)) 11.641 7.376 0.133 3.764 3.897 5.283





HYDRO STATIONS_SHIVA & SHIMSHA 11.641 38.494 0.413 3.696 4.109 1.067


TOTAL KPCL HYDRO 11.641 1402.253 16.089 116.550 132.639 0.946

OTHERS



TOTAL OTHERs 11.641 16.773 8.821 0.000 8.821 5.259

RENEWABLE SOURCES

WIND-IPPS 200.170 0.000 71.861 71.861 3.590

KPCL-WIND (9x0.225+10x0.230) 0.000 0.000 0.000 0.000 0.000

MINI HYDEL-IPPS 308.830 0.000 103.458 103.458 3.350

CO-GEN/CAPTIVE 41.800 0.000 16.930 16.930 4.050

BIOMASS 2.530 0.000 1.230 1.230 4.862

SOLAR-IPP 361.750 0.000 183.769 183.769 5.080


(3x1+3x1+1x3x1x5) 0.000 0.000 0.000 0.000 0.000

TOTAL RENEWABLE SOURCES 915.080 0.000 377.248 377.248 0.000


PGCIL CHARGES 0.000 0.000 112.723 112.723 0.450

KPTCL CHARGES 0.000 0.000 377.820 377.820 0.463

SLDC & POSOCO CHARGES 0.000 0.000 3.030 3.030 0.004

TOTAL NCLUDING, TRANSMISSION & LDC CHARGES 11.641 8152.596 674.678 2613.219 3287.897 4.033

ccxli

Sales-M U Revenue

Rs. crores

Sales-M U Revenue

Rs. crores

1

LT-1[fully

subsidised by

GoK]*

Bhagya Jyothi/Kutir Jyothi

108.41 68.08 37.72 21.39 5.67 0.00 -3.24

2

LT-2(a)(i) Dom. / AEH - Applicable to City

Municipal Corporations areas and all

area under Urban Local Bodies. 629.51 346.37 643.18 317.24 4.93 -13.01 -15.83

3LT-2(a)(ii) Dom. / AEH - Applicable to areas

under Village Panchayats 338.69 156.63 358.74 142.12 3.96 -30.13 -32.40

4

LT-2(b)(i) Pvt. Educational Institutions

Applicable to all areas of Local

Bodies including City Corporations 5.92 5.08 5.76 4.36 7.57 33.48 29.15

5

LT-2(b)(ii) Pvt. Educational Institutions

Applicable to areas under Village

Panchayats 2.84 2.25 2.96 1.96 6.62 16.46 12.69

6

LT-3(i) Commercial - Applicable in areas

under all ULBs including City

Corporations. 215.94 203.68 214.14 185.19 8.65 52.52 47.58

7LT-3(ii) Commercial - Applicable to areas

under Village Panchayats 72.20 63.45 72.84 59.29 8.14 43.57 38.92

8 LT-4(a)* IP<=10HP 2631.81 1,426.44 2622.39 1279.73 4.88 -13.93 -16.72

9 LT-4(b) IP>10HP 1.24 0.67 1.24 0.66 5.32 -5.78 -8.83

10

LT-4 (c) (i) Pvt. Nurseries, Coffee & Tea

Plantations of sanctioned load of 10

HP & below 7.28 3.41 6.58 3.20 4.86 -14.20 -16.98

11

LT-4 (c) (ii) Pvt. Nurseries, Coffee & Tea

Plantations of sanctioned load of

above 10 HP 3.68 2.69 4.38 3.54 8.08 42.27 37.66

LT-5(a) LT Industrial 80.66 56.57 80.25 50.65 6.31 11.32 7.71

LT-5(b) LT Industrial 62.03 50.57 61.71 46.71 7.57 33.50 29.17

12 LT-6(a) Water supply 153.88 75.83 153.88 69.70 4.53 -20.12 -22.71

13 LT-6(b) Public lighting 101.33 69.91 100.24 65.84 6.57 15.85 12.09

14 LT-7 Temporary supply 13.55 21.02 13.55 20.52 15.14 167.12 158.46

4428.97 2552.65 4379.56 2272.10 5.19 -8.50 -11.47

1 HT-1 Water supply & sew erage 473.96 263.62 473.96 228.52 4.82 -14.97 -8.34 -3.95

2 HT-2(a) Industrial - 837.72 670.70 837.72 594.21 7.09 25.10 34.85 41.30

3 HT-2(b) Commercial 122.42 121.94 118.50 108.08 9.12 60.87 73.40 81.69

4 HT-2 ( c) (i)

Govt./ Aided Hospitals & Educational

Institutions 26.65 21.11 25.76 18.17 7.05 24.43 34.12 40.54

5 HT-2 ( c) (ii)

Hospitals and Educational

Institutions other than covered

under HT-2( c) (i) 17.97 15.84 18.86 14.88 7.89 39.12 49.96 57.13

6

HT-3(a)(i) Lift Irrigation - Applicable to lif t

irrigation schemes under Govt Dept,

/ Govt. ow ned Corporations 91.95 30.56 102.28 8.24 0.81 -85.80 -84.69 -83.96

7

HT-3(a)(ii) Lift Irrigation - Applicable to Private

lif t irrigation schemes Lift Irrigaton

societies on urban/express feeders 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

8HT-3(a)(iii) LI schemes other than those

covered under HT 3(a)(ii) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

9

HT - 3b Irrigation & Agriculture Farms,Govt.

Horticultural Farms, Pvt.Horticulture

Nurseries, Coffee, Tea,Cocanut &

Arecanut Plantations 0.22 0.10 0.25 0.10 4.00 -29.45 -23.95 -20.32

10 HT-4 Residential Apartments -Colonies 5.16 3.60 5.16 3.21 6.22 9.78 18.33 23.99

11 HT-5 Temporary supply 4.78 6.20 4.78 18.44 38.58 580.20 633.21 668.21

1580.83 1133.68 1587.27 993.85 6.26 10.43 19.04 24.73

6009.80 3686.33 5966.83 3265.95 5.47 -3.47

91.91 116.19

6009.80 3778.24 5966.83 3382.14 5.67 0.00

* These categories are subsidised by GoK. In case subsidy is not released by the Gok in advance, CESC

shall raise demand & collect CDT of Rs.5.67/unit by BJ/KJ &Rs.4.88/unit from IP set Consumers.

* Voltage w ise cost of supply per unit to: LT Rs: 5.86, HT Rs.5.26 & EHT- Rs.5.02 Page - 222

Cross

Subsidy in

w ith ref.

toVoltage

wise COS

% (EHT)

PROPOSED AND APPROVED REVENUE AND REALISATION AND LEVEL OF CROSS SUBSIDY FOR FY-17 OF CESC

Annexure- III

Grand Total

Level o f

C ro ss

Subsidy with

ref .to

A verage

co st o f

supply in %

HT - TOTAL

TOTAL

Proposed by CESC

LT - TOTAL

Average

Realisation

in Rs. Per

Kwh

Cross

Subsidy

with ref.

to ACS %

(LT/HT)

Misc. Revenue

Sl No Category Description

Approved as per RST

ccxlii

ANNEX - IV

ELECTRICITY TARIFF - 2017

K.E.R.C. ORDER DATED: 30th March, 2016

Effective for the Electricity consumed from the first meter

reading date falling on or after 01.04.2016

Chamundeshwari

Electricity Supply Corporation Ltd.,

ccxliii

ELECTRICITY TARIFF-2017

GENERAL TERMS AND CONDITIONS OF TARIFF:

(APPLICABLE TO BOTH HT AND LT)

1. Supply of power is subject to execution of agreement by the

Consumer in the prescribed form, payment of prescribed

deposits and compliance of terms and conditions as stipulated

in the Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka and Regulations issued

under Electricity Act 2003 at the time of supply and continuation

of power supply is subject to compliance of the said Conditions

of Supply / Regulations as amended from time to time.

2. The tariffs are applicable to only single point of supply unless

otherwise approved by the Licensee.

3. The Licensee does not bind himself to energize any installation,

unless the Consumer guarantees the minimum charges. The

minimum charge is the power supply charges in accordance

with the tariff in force from time to time. This shall be payable by

the Consumer until power supply agreement is terminated,

irrespective of the installation being in service or under

disconnection.

4. The tariffs in the schedule are applicable to power supply within

the Karnataka State.

5. The tariffs are subject to levy of Tax and Surcharges thereon as

may be decided by the State Government from time to time.

6. For the purpose of these tariffs, the following conversion table would

be used:

1 HP=0.746 KW. 1HP=0.878 KVA.

ccxliv

7. The bill amount will be rounded off to the nearest Rupee, i.e., the bill

amount of 50 paise and above will be rounded off to the next higher

Rupee and the amount less than 50 paise will be ignored.

8. Use of power for temporary illumination in the premises already having

permanent power supply for marriages, exhibitions in hotels, sales

promotions etc., is limited to sanctioned load at the applicable

permanent power supply tariff rates. Temporary tariff rates will be

applicable in case the load exceeds sanctioned load as per the

Conditions of Supply of Electricity of the Distribution Licensees in the

State of Karnataka.

9. No LT power supply will be given where the requisitioned load is 50

KW/67 HP and above. This condition does not apply for installations

serviced under clause 3.1.1 of K.E.R.C. (Recovery of Expenditure for

supply of Electricity) Regulations, 2004 and its amendments from time

to time. The applicant is however at liberty to avail HT supply for lesser

loads. The minimum contract demand for HT supply shall be 25 KVA or

as amended from time to time by the Licensee with the approval of

KERC.

10. The Consumer shall not resell electricity purchased from the Licensee

to a third party except –

(a) Where the Consumer holds a sanction or a tariff provision for

distribution and sale of energy,

(b) Under special contract permitting the Consumer for resale of

energy in accordance with the provisions of the contract.

11. Non-receipt of the bill by the Consumer is not a valid reason for non-

payment. The Consumer shall notify the office of issue of the bill if the

same is not received within 7 days from the meter reading date.

Otherwise, it will be deemed that the bills have reached the Consumer

in due time.

12. The Licensee will levy the following charges for non-realization of each

Cheque

ccxlv

1 Cheque amount upto

Rs. 10,000/-

5% of the amount subject to a

minimum of Rs100/-

2 Cheque amount of

Rs. 10,001/- and upto

Rs. 1,00,000/-


minimum of Rs500/-

3 Cheque amount above

Rs. 1 Lakh:


minimum of Rs3000/-

13. In respect of power supply charges paid by the Consumer through

money order, Cheque /DD sent by post, receipt will be drawn and the

Consumer has to collect the same.

14. In case of any belated payment, simple interest at the rate of 1 % per

month will be levied on the actual No. of days of delay subject to a

minimum of Re.1/- for LT installation and Rs.100/- for HT installation. No

interest is however levied for arrears of Rs.10/- and less.

15. All LT Consumers, except Bhagya Jyothi and Kutir Jyothi Consumers,

shall provide current limiter/Circuit Breakers of capacity prescribed by

the Licensee depending upon the sanctioned load.

16. All payments made by the Consumer will be adjusted in the following

order of priority: -

(a) Interest on arrears of Electricity Tax

(b) Arrears of Electricity Tax

(c) Arrears of Interest on Electricity charges

(d) Arrears of Electricity charges

(e) Current month’s dues

17. For the purpose of billing,

(i) The higher of the rated load or sanctioned load in respect of LT

installations which are not provided with Electronic Tri-Vector

meter.

(ii) Sanctioned load or MD recorded whichever is higher, in respect of

installations provided with static meters or Electronic Tri-Vector

meter will be considered.

Penalty and other clauses shall apply if sanctioned load is

exceeded.

ccxlvi

18. The bill amount shall be paid within 15 days from the date of

presentation of the bill failing which the interest becomes payable.

19. For individual installations, more than one meter shall not be provided

under the same tariff. Wherever two or more meters are existing for

individual installation, the sum of the consumption recorded by the

meters shall be taken for billing, till they are merged.

20. In case of multiple connections in a building, all the meters shall be

provided at one easily accessible place in the ground floor.

21. Reconnection charges: The following reconnection charges shall be

levied in case of disconnection and included in the monthly bill.

For reconnection of:

a Single Phase Domestic installations

under Tariff schedule LT 1 & LT2 (a)

Rs20/-per Installation.

b Three Phase Domestic installations

under Tariff schedule LT2 (a) and

Single Phase Commercial & Power

installations.

Rs50/-per Installation.

c All LT installations with 3 Phase supply

other than LT2 (a)

Rs. 100/-per

Installation.

d All HT& EHT installations Rs. 500/-per

Installation.

22. Revenue payments up to and inclusive of Rs.10, 000/- shall be made by

cash or cheque or D.D and payments above Rs.10, 000/- shall be

made by cheque or D.D only. Payments under other heads of

account shall be made by cash or D.D up to and inclusive of

Rs.10, 000/- and payment above Rs.10, 000/-shall be by D.D only.

Note: The Consumers can avail the facility of payment of monthly power

supply bill through Electronic clearing system (ECS)/ Credit cards /

on line E-Payment @ www.billjunction.com at counters wherever

such facility is provided by the Licensee in respect of revenue

payments up to the limit prescribed by the RBI.

23. For the types of installations not covered under any Tariff schedules,

the Licensee is permitted to classify such installations under

appropriate Tariff schedule under intimation to the K.E.R.C.

24. Seasonal Industries

Applicable to all Seasonal Industries.

i) The industries that intend to avail this benefit shall have Electronic

Tri- Vector Meter installed to their installations.

ccxlvii

ii) ‘Working season’ months and ‘off-season’ months shall be

determined by an order issued by the Executive Engineer of the

concerned O&M Division of the Licensee as per the request of the

Consumer and will continue from year to year unless otherwise

altered. The Consumer shall give a clear one month’s notice in

case he intends to change his ‘working season’.

iii) The consumption during any month of the declared off-season shall

not be more than 25% of the average consumption of the previous

working season.

iv) The ‘Working season’ months and ‘off-season’ months shall be full–

calendar months. If the power availed during a month exceeds

the allotment for the ‘off-season’ month, it shall be taken for

calculating the billing demand as if the month is the ‘working

season’ month.

v) The Consumer can avail the facility of ‘off-season’ up to six months

in a calendar year not exceeding in two spells in that year. During

the ‘off-season period, the Consumer may use power for

administrative offices etc., and for overhauling and repairing plant

and machinery.

25 Whether an institution availing Power supply can be considered as

charitable or not will be decided by the Licensee on the

production of certificate Form-12 Afrom the Income Tax

department.

26 Time of the Tariff (ToD)

The Commission as decides in the earlier tariff order, decide to

continue compulsory Time of Day Tariff for HT2(a),HT2(b) and HT 2(c)

consumers with a contract demand of 500 KVA and above. Further,

the optional ToD would continue as existing earlier for HT2(a),HT2(b)

and HT 2(c) consumers with contract demand of less than 500 KVA.

Also the ToD for HT1 consumers on optional basis would continue as

ccxlviii

existing earlier. Details of ToD tariff are indicated under the respective

tariff category.

27. SICK INDUSTRIES:

The Government of Karnataka has extended certain reliefs for

revival/rehabilitation of sick industries under the New Industrial Policy

2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001. Further, the

Government of Karnataka has issued G.O No.CI2 BIF 2010, dated

21.10.2010. The Commission, in its Tariff Order 2002, has accorded

approval for implementation of reliefs to the sick industries as per the

Government policy and the same was continued in the subsequent

Tariff Orders. In view of issue of the G.O No.CI2 BIF 2010, dated

21.10.2010, the Commission has accorded approval to ESCOMs for

implementation of the reliefs extended to sick industrial units for their

revival / rehabilitation on the basis of the orders issued by the

Commissioner for Industrial Development and Director of Industries &

Commerce, Government of Karnataka.

28. Incentive for Prompt Payment / Advance Payment: An incentive at the

rate of 0.25% of such bill shall be given to the following Consumers by

way of adjustment in the subsequent month’s bill:

(i) In all cases of payment through ECS.

(ii) And in the case of monthly bills exceeding Rs.1, 00,000/-

(Rs. one lakh), if the payment is made 10 days in

advance of the due date.

(iii) Advance Payment exceeding Rs.1000/- made by the

Consumers towards monthly bills

29. Conditions of Supply of Electricity of the Distribution Licensees in the

State of Karnataka and amendments issued thereon from time to time

and Regulations issued under Electricity Act 2003 will prevail over the

extract given in this tariff book in the event of any discrepancy.

30. Self-Reading of Meters:

The Commission has approved Self-Reading of Meters by Consumers

and issue of bills by the Licensee based on such readings and the

Licensee shall take the reading at least once in six months and

reconcile the difference, if any and raise the bills accordingly. This

procedure may be implemented by the Licensee as stipulated under

ccxlix

Section 26.01 of Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka.

---0---

ccl

ELECTRICITY TARIFF—2017

PART-1

HIGH TENSION SUPPLY

Applicable to Bulk Power Supply of Voltages

at 11KV (including 2.3/4.6 KV) and above at

Standard High Voltage or Extra High Voltages

when the Contract Demand is 50 KW / 67 HP

and above.

ccli


PART-1

HIGH TENSION SUPPLY

Applicable to Bulk Power Supply at Voltages of 11KV (including

2.3/4.6 KV) and above at Standard High Voltage or Extra High

Voltages when the Contract Demand is 50 KW / 67 HP and above.

CONDITIONS APPLICABLE TO BILLING OF HT INSTALLATIONS:

1. Billing Demand

A) The billing demand during unrestricted period shall be the

maximum demand recorded during the month or 75% of the CD,

whichever is higher.

B) When the Licensee has imposed demand cut of 25% or less, the

conditions stipulated in (A) shall apply.

C) When the demand cut is in excess of 25%, the billing demand shall

be the maximum demand recorded or 75% of the restricted

demand, whichever is higher.

D) If at any time the maximum demand recorded exceeds the CD or the

demand entitlement, or opted demand entitlement during the period

of restrictions, if any, the Consumer shall pay for the quantum of excess

demand at two times the normal rate per KVA per month as deterrent

charges as per Section 126(6) of Electricity Act 2003. For over drawal

during the billing period, the penalty shall be two times the normal

rate.

E) During the periods of disconnection, the billing demand shall be

75% of CD, or 75% of the demand entitlement that would have

been applicable, had the installation been in service, whichever is

less. This provision is applicable only, if the installation is under

disconnection for the entire billing month.

cclii

F) During the period of energy cut, the Consumer may get his demand

entitlement lowered, but not below the percentage of energy

entitlement, ( For example, In case the energy entitlement is 40%

and the demand entitlement is 80%, the re-fixation of demand

entitlement cannot be lower than 40% of the CD). The benefit of

lower demand entitlement will be given effect to from the meter

reading date of the same month, if the option is exercised on or

before 15th of the month. If the option is exercised on or after 16th of

the month, the benefit will be given effect to from the next meter

reading date. The Consumer shall register such option by paying

processing fee of Rs.100/- at the Jurisdictional sub-division office.

(i) The billing demand in such cases, shall be the “Revised (Opted)

Demand Entitlement” or, the recorded demand, whichever is

higher. Such option for reduction of demand entitlement, is

allowed only once during the entire span of that particular

“Energy Cut Period”. The Consumer, can however opt for a

higher demand entitlement up to the level permissible under the

demand cut notification, and the benefit will be given effect to

from the next meter reading date. Once the Consumer opts for

enhancement of demand, which has been reduced under

Clause (F), no further revision is permitted during that particular

energy cut period.

(ii) The opted reduced demand entitlement will automatically

cease to be effective, when the energy cut is revised. The

facility for reduction and enhancement can however be

exercised afresh by the Consumer as indicated in the previous

paras.

G) For the purpose of billing, the billing demand of 0.5 KVA and above

will be rounded off to the next higher KVA, and billing demand of

less than 0.5 KVA shall be ignored.

2. Power factor (PF)

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It shall be the responsibility of the HT Consumer to determine the

capacity of PF correction apparatus and maintain an average PF of

not less than 0.90.

(i) The specified P.F. is 0.90. If the power factor goes below 0.90

Lag, a surcharge of 3 Paise per unit consumed will be levied for

every reduction of P.F. by 0.01 below 0.90 Lag.

(ii) The power factor when computed as the ratio of KWh / KVAh

will be determined up to 3 decimals (ignoring figures in the other

decimal places), and then rounded off to the nearest second

decimal as illustrated below:

(a) 0.8949 to be rounded off to 0.89

(b) 0.8951 to be rounded off to 0.90

In respect of Electronic Tri-Vector meters, the recorded average PF

over the billing period shall be considered for billing purposes. If the

same is not available, the ratio of KWh to KVAh consumed in the billing

month shall be considered.

3. Rebate for supply at high voltage:

If the Consumer is availing power at voltage higher than 13.2 KV, he will

be entitled to a rebate as indicated below:

Supply Voltage: Rebate

A) 33/66 KV 2 Paise/unit of energy consumed

B) 110 KV 3 Paise/unit of energy consumed

C) 220 KV 5 Paise/unit of energy consumed

The above rebate will be allowed in respect of all the installations of

the above voltage class, including the existing installations, and also

for installations converted from 13.2 KV and below to 33 KV and above

and also for installations converted from 33/66 KV to 110/220 KV, from

the next meter reading date after conversion / service / date of

notification of this Tariff order, as the case may be. The above rebate is

applicable only on the normal energy consumed by the Consumer,

including the consumption under ToD Tariff, and is not applicable on

any other energy allotted and consumed, if any, viz.,

i) Wheeled Energy.

ii) Any energy, including the special energy allotted over and above

normal entitlement.

ccliv

iii) Energy drawal under special incentive scheme, if any.

The above rebate is not applicable for Railway Traction.

4. In respect of Residential Quarters/ Colonies availing Bulk power supply

by tapping the main HT supply, the energy consumed by such Colony

loads, metered at single point, shall be billed under HT-4 tariff schedule.

No reduction in demand recorded in the main HT meter will be

allowed.

5. Energy supplied may be utilized for all purposes associated with the

working of the installations, such as, Office, Stores, Canteens, Yard

Lighting, Water Supply and Advertisements within the premises.

6. Energy can also be used for construction, modification and expansion

purposes within the premises.

7. Power supply under HT-4 tariff schedule may be used for Commercial

and other purposes inside the colony, for installations such as Canteen,

Club, Shop, Auditorium etc., provided, this load is less than 10% of the

CD.

8. In respect of Residential Apartments availing HT Power supply under HT-

4 tariff schedule, the supply availed for Commercial and other

purposes like Shops, Hotels, etc., will be billed under appropriate tariff

schedule, (Only Energy charges) duly deducting such consumption in

the main HT supply bill. No reduction in the recorded demand of the

main HT meter is allowed. Common areas shall be billed at Tariff

applicable to that of the predominant Consumer category. [

9. Seasonal Industries

a. The industries, which intend to utilize seasonal industry benefit, shall

conform to the conditionalities under Para no. 25 of the General

terms and conditions of tariff (applicable to both HT & LT).

b. The industries that intend to avail this benefit, shall have Electronic

Tri-Vector Meter fitted to the installation.

c. Monthly charges during the working season shall be the demand

charges on 75% of the contract demand or the recorded maximum

demand during the month, whichever is higher, plus the energy

charges

cclv

d. Monthly charges during the off season, shall be demand charges

on the maximum demand recorded during the month, or 50% of the

CD whichever is higher plus the energy charges.

TARIFF SCHEDULE HT 1

Applicable to Water Supply, Drainage / Sewerage water treatment

plant and Sewerage Pumping installations, belonging to Karnataka

Urban Water Supply and Sewerage Board, other local bodies, State

and Central Government.

RATE SCHEDULE

Demand charges Rs.190/kVA of billing demand/month

Energy charges 450 paise/unit

cclvi

ToD Tariff at the option of the Consumer

Time of Day Increase + / reduction (-) in energy



06.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 Hrs + 100 paise per unit

Note: Energy supplied to residential quarters availing bulk supply by

the above category of Consumer, shall be metered separately

at a single point, and the energy consumed shall be billed at HT-

4 Tariff. No reduction in the demand recorded in the main HT

meter will be allowed.

TARIFF SCHEDULE HT-2(a)

Applicable to Industries, Factories, Workshops, Research &

Development Centres, Industrial Estates, Milk dairies, Rice Mills, Phova

Mills, Roller Flour Mills, News Papers, Printing Press, Railway

Workshops/KSRTC Workshops/ Depots, Crematoriums, Cold Storage,

Ice & Ice-cream mfg. Units, Swimming Pools of local bodies, Water

Supply Installations of KIADB and other industries, all Defence

Establishments. Hatcheries, Poultry Farm, Museum, Floriculture, Green

House, Bio Technical Laboratory, Hybrid Seeds processing Units, Stone

Crushers, Stone cutting, Bakery Product Manufacturing Units, Mysore

Palace illumination, Film Studios, Dubbing Theatres, Processing, Printing,

Developing and Recording Theaters, Tissue Culture, Aqua Culture,

Prawn Culture, Information Technology Industries engaged in

development of Hardware & Software, Information Technology (IT)

enabled Services / Start-ups (As defined in GOI notification dated

17.04.2015)/ Animation / Gaming / Computer Graphics as certified by

the IT & BT Department of GOK/GOI, Drug Mfg. Units, Garment Mfg.

Units, Tyre retreading units, Nuclear Power Projects, Stadiums

maintained by Government and local bodies, also Railway Traction,

Effluent treatment plants and Drainage water treatment plants owned

other than by the local bodies, LPG bottling plants, petroleum pipeline

projects, Piggery farms, Analytical Lab for analysis of ore metals, Saw

Mills, Toy/wood industries, Satellite communication centers, and

Mineral water processing plants / drinking water bottling plants.

cclvii

RATE SCHEDULE

HT-2(a): Applicable to all areas of CESC

.Demand charges Rs.180/kVA of billing demand/month

Energy charges

For the first one lakh units 620 paise per unit

For the balance units 660 paise per unit

Railway Traction and Effluent Treatment Plants


Energy Charges 590 paise per unit for all the units

TARIFF SCHEDULE HT-2(b) Applicable to Commercial Complexes, Cinemas, Hotels, Boarding &

Lodging, Amusement Parks, Telephone Exchanges, Race Course, All

Clubs, T.V. Station, All India Radio, Railway Stations, Air Port, KSRTC

bus stations, All offices, Banks, Commercial Multi-storied buildings.

APMC Yards, Stadiums other than those maintained by Government and

Local Bodies, Construction power for irrigation, Power Projects and

Konkan Railway Project, Petrol / Diesel and Oil storage plants, I.T. based

medical transcription centers, telecom, call centers, BPO/KPO.

RATE SCHEDULE

HT-2 (b): Applicable to all areas of CESC

Energy charges

For the first two lakh units 785 paise per unit


TARIFF SCHEDULE HT-2(c)

RATE SCHEDULE

HT-2 (c) (i)- Applicable to Government Hospitals, Hospitals run by Charitable

Institutions, ESI hospitals, Universities and Educational Institutions belonging

to Government and Local bodies, Aided Educational Institutions and Hostels

of all Educational Institutions.


Energy charges



RATE SCHEDULE

HT-2 (c) (ii) - Applicable to Hospitals and Educational Institutions other than

those covered under HT-2 (c)(i).


Energy charges


Demand charges Rs.200 /kVA of billing demand/month

cclviii


Note: Applicable to HT-2 (a) , HT-2 (b) & HT-2(c) Tariff Schedule.

1. Energy supplied may be utilized for all purposes associated

with the working of the installation such as offices, stores,

canteens, yard lighting, water pumping and

advertisement within the premises.

2. Energy can be used for construction, modification and

expansion purposes within the premises.

ToD Tariff applicable to HT 2(a), HT2(b) and HT2(c) category.

Time of Day Increase + / reduction (-) in energy charges

over the normal tariff applicable


06.00 Hrs to 18.00 Hrs 0


TARIFF SCHEDULE HT-3 (a)

Applicable to Lift irrigation Schemes/ Lift irrigation societies,

RATE SCHEDULE

HT-3 (a)(i): Applicable to LI schemes under Govt. Departments/ Govt.

owned Corporations

Energy charges/ Minimum Charges 200 paise per unit subject to an

annual minimum of Rs.1120 per

HP/Annum

HT-3(a)(ii): Applicable to Private LI schemes and Lift Irrigation societies:

Connected to Urban/Express feeders

Fixed Charges Rs.40 /HP/per month of sanctioned

load


HT-3(a)(iii): Applicable to Private LI schemes and Lift Irrigation societies

other than those covered under HT-3 (a)(ii)

Fixed Charges Rs.20 /HP/per month of sanctioned

load


TARIFF SCHEDULE HT-3 (b)

HT-3 (b): Applicable to Irrigation and Agricultural Farms, Government

Horticultural Farms, Private Horticulture nurseries, Coffee, Tea,

Rubber, Coconut &Arecanut Plantations. RATE SCHEDULE

Energy charges / Minimum Charges 400 paise per unit subject to an

annual minimum of Rs.1120/- per HP

of sanctioned load.

Note: These installations are to be billed on quarter yearly basis.


cclix

Applicable to Residential apartments and colonies (whether situated

outside or inside the premises of the main HT Installation) availing

power supply independently or by tapping the main H.T. line. Power

supply can be used for residences, theatres, shopping facility, club,

hospital, guest house, yard/street lighting, canteen located within the

colony.

RATE SCHEDULE

Applicable to all areas

Demand charges Rs.110/- per kVA of billing demand/

month


NOTE: (1) In respect of residential colonies availing power supply by tapping

the main H.T. supply, the energy consumed by such colony loads

metered at a single point, is to be billed at the above energy

rate. No reduction in the recorded demand of the main H.T.

supply is allowed.

(2) Energy under this tariff may be used for commercial and other

purposes inside the colonies for installations such as, Canteens,

Clubs, Shops, Auditorium etc., provided, this commercial load is

less than 10% of the Contract demand. [

(3) In respect of Residential Apartments, availing HT Power supply

under HT-4 tariff schedule, the supply availed for Commercial and

other purposes like Shops, Hotels, etc., will be billed under

appropriate tariff schedule (Only Energy charges), duly deducting

such consumption in the main HT supply bill. No reduction in the

recorded demand of the main HT meter is allowed. Common

areas shall be billed at Tariff applicable to the predominant

Consumer category.


Tariff applicable to sanctioned load of 67 HP and above for

hoardings and advertisement boards and construction power for

industries excluding those category of consumers covered under

HT2(b) Tariff schedule availing power supply for construction

power for irrigation and power projects and also applicable to

cclx

power supply availed on temporary basis with the contract

demand of 67 HP and above of all categories.

RATE SCHEDULE – HT - 5

67 HP and above:

Fixed charges /

Demand Charges

Rs.220/HP/month for the entire sanction load /

contract demand


Note:

1. Temporary power supply with or without extension of distribution main shall

be arranged through a pre–paid energy meter duly observing the

provisions of Clause 12 of the Conditions of Supply of Electricity of the

Distribution Licensees in the State of Karnataka.

2. This Tariff is also applicable to touring cinemas having licence for duration

less than one year.

3. All the conditions regarding temporary power supply as stipulated in Clause

12 the Conditions of Supply of Electricity of the Distribution Licensees in the

State of Karnataka shall be complied with before service.

------

cclxi

ELECTRICITY TARIFF-2017

PART-II

LOW TENSION SUPPLY

(400 Volts Three Phase and

230Volts Single Phase Supply)

CESC


PART-II

LOW TENSION SUPPLY (400 Volts Three Phase and

230Volts Single Phase Supply)

CONDITIONS APPLICABLE TO BILLING OF LT INSTALLATIONS:

1. In case of LT Industrial / Commercial Consumers, Demand based Tariff

at the option of the Consumer, can be adopted. The Consumer is

permitted to have more connected load than the sanctioned load.

The billing demand will be the sanctioned load, or Maximum Demand

cclxii

recorded in the Tri-Vector Meter during the month, which ever is

higher. If the Maximum Demand recorded is more than the sanctioned

load, penal charges at two times the normal rate shall apply.

2. Use of power within the Consumer premises for bonafide temporary

purpose is permitted subject to the conditions that, total load of the

installation on the system does not exceed the sanctioned load.

3. Where it is intended to use power supply temporarily, for floor polishing

and such other portable equipments, in a premises having permanent

power supply, such equipments shall be provided with earth leakage

circuit breakers of adequate capacity.

4. The laboratory installations in educational institutions are allowed to

install connected machineries up to 4 times the sanctioned load. The

fixed charges shall however be on the basis of sanctioned load.

5. Besides combined lighting and heating, electricity supply under tariff

schedules LT2 (a) & LT2 (b), can be used for Fans, Televisions, Radios,

Refrigerators and other household appliances, including domestic

water pumps and air conditioners, provided, they are under single

meter connection. If a separate meter is provided for Air-conditioner

load, the Consumer shall be served with a notice to merge this load

and to have a single meter for the entire load. Till such time, the air

conditioner load will be billed under Commercial Tariff.

6. Bulk LT supply

If power supply for lighting / combined lighting & heating {LT 2(a)}, is

availed through a bulk Meter for group of houses belonging to one

Consumer, (ie, Where bulk LT supply is availed), the billing for energy

shall be done at the slab rate for energy charges matching the

consumption obtained by dividing the bulk consumption by number of

houses. In addition, fixed charges for the entire sanctioned load shall be

charged as per Tariff schedule.

7. A rebate of 25 Paise per unit will be given for the House/ School/Hostels

meant for Handicapped, Aged, Destitute and Orphans, Rehabilitation

Centres under Tariff schedule LT 2(a).

8. SOLAR REBATE: A rebate of 50 Paise per unit of electricity consumed

subject to a maximum of Rs. 50/- per installation per month will be

cclxiii

allowed to Tariff schedule LT 2(a), if solar water heaters are installed

and used. Where Bulk Solar Water Heater System is installed, Solar

Water Heater rebate shall be allowed to each of the individual

installations, provided that, the capacity of Solar Water Heater in such

apartment / group housing shall be a minimum capacity of 100 Ltr. per

household.

9. A rebate of 20% on fixed charges and energy charges will be allowed

in the monthly bill in respect of public Telephone booths having

STD/ISD/ FAX facility run by handicapped people, under Tariff schedule

LT 3.

10. A rebate of 2 paise per unit will be allowed if capacitors are installed

as per Clause 23 of Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka in respect of all metered IP Set

Installations.

11. Power Factor (PF):

Capacitors of appropriate capacity shall be installed in accordance

with Clause 23 of Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka, in case of installations covered

under Tariff category LT 3, LT4, LT 5, & LT 6, where motive power is

involved.

(i) The specified P.F. is 0.85. If the PF is found to be less than 0.85 Lag, a

surcharge of 2 Paise per unit consumed will be levied for every

reduction of P.F. by 0.01 below 0.85 Lag. In respect of LT

installations, however, this is subject to a maximum surcharge of 30

Paise per unit.

(ii) The power factor when computed as the ratio of KWh/KVAh will be

determined up to 3 decimals (ignoring figures in the other decimal

places) and then rounded off to the nearest second decimal as

illustrated below:

(a) 0.8449 to be rounded off to 0.84

(b) 0.8451 to be rounded off to 0.85

(iii) In respect of Electronic Tri-Vector meters, the recorded average PF

over the billing period shall be considered for billing purposes.

cclxiv

(iv) During inspection, if the capacity of capacitors provided is found to

be less than what is stipulated in Conditions of Supply of Electricity

of the Distribution Licensees in the State of Karnataka, a surcharge

of 30 Paise/unit will be levied in the case of installations covered

under Tariff categories LT 3, LT 5, & LT 6 where motive power is

involved.

(v) In the case of installations without electronic Tri-vector meters even

after providing capacitors as recommended in Clause 23.01 and

23.03 of Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka, if during any periodical or other

testing / rating of the installation by the Licensee, the PF of the

installation is found to be lesser than 0.85, a surcharge determined

as above shall be levied from the billing month following the expiry

of Three months’ notice given by the Licensee, till such time, the

additional capacitors are installed and informed to the Licensee in

writing by the Consumer. This is also applicable for LT installations

provided with electronic Tri-vector meters.

12. All new IP set applicants shall fix capacitors of adequate capacity in

accordance with Clause 23 of Conditions of Supply of Electricity of the

Distribution Licensees in the State of Karnataka before taking service. [

13. All the existing IP set Consumers shall also fix capacitors of adequate

capacity in accordance with Clause 23 of Conditions of Supply of

Electricity of the Distribution Licensees in the State of Karnataka, failing

which, PF surcharge at the rate of Rs.60/-per HP/ year shall be levied. If

the capacitors are found to be removed / not installed, a penalty at

the same rate as above (Rs. 60/-per HP / Year) shall be levied.

14. The Semi-permanent cinemas having Semi-permanent structure, with

permanent wiring and licence of not less than one year, will be billed

under commercial tariff schedule i.e., LT 3.

15. Touring cinemas having an outfit comprising cinema apparatus and

accessories, taken from place to place for exhibition of

cinematography films, and also outdoor shooting units, will be billed

under Temporary Tariff schedule i.e., LT 7.

cclxv

16. The Consumers under IP set tariff schedule, shall use the energy only for

pumping water to irrigate their own land as stated in the IP set application /

water right certificate and for bonafide agriculture use. Otherwise, such

installations shall be billed under appropriate Industrial / Commercial tariff,

based on the recorded consumption if available, or on the consumption

computed as per the Table given under Clause 42.06 of the Conditions of

Supply of Electricity of the Distribution Licensees in the State of Karnataka.

17. The water pumped for agricultural purposes may also be used by the

Consumer for his bonafide drinking purposes and for supplying water to

animals, birds, Poultry farms, Dairy farms and fish farms maintained by

the Consumer in addition to agriculture.

18. The motor of IP set installations can be used with an alternative drive

for other agricultural operations like sugar cane crusher, coffee

pulping, etc., with the approval of the Licensee. The energy used for

such operation, shall be metered separately by providing alternate

switch and charged at LT Industrial Tariff (Only Energy charges) during

the period of alternative use. However, if the energy used both for IP

Set and alternate operation is measured together by one energy

meter, the energy used for alternate drive shall be estimated by

deducting the average IP Set consumption for that month as per the IP

sample meter readings for the sub division, as certified by the sub

divisional Officer.

19. The IP Consumer is permitted to use energy for lighting the pump house

and well limited to two lighting points of 40 Watts each.

20. Billing shall be made at least once in a quarter year for all IP sets.

21. In case of welding transformers, the connected load shall be taken

as:

a) Half the maximum capacity in KVA as per the nameplate specified

under IS: 1851

OR

b) Half the maximum capacity in KVA as recorded during the rating by

the Licensee, whichever is higher.

22. Electricity under Tariff LT 3 / LT 5 can also be used for Lighting, Heating

and Air-conditioning, Yard-Lighting, water supply in the premises of

Commercial / Industrial Units respectively.

cclxvi

23. Fluorescent fittings shall be provided by the Licensee for the Streetlights

in the case of villages covered under the Licensee’s electrification

programme for initial installation.

In all other cases, the entire cost of fittings including Brackets, Clamps,

etc., and labour for replacement, additions and modifications shall be

met by the organizations making such a request. Labour charges shall

be paid at the standard rates fixed by the Licensee for each type of

fitting.

24. Lamps, fittings and replacements for defective components of fittings

shall be supplied by the concerned Village Panchayaths, Town

Panchayaths or Municipalities for replacement.

25. Fraction of KW / HP shall be rounded off to the nearest quarter KW / HP

for purpose of billing and the minimum billing being for 1 KW / 1HP in

respect of all categories of LT installations including I.P. sets. In the case

of street lighting installations, fraction of KW shall be rounded off to

nearest quarter KW for the purpose of billing and the minimum billing

shall be quarter KW.

26. Seasonal Industries.

a) The industries who intend to utilize seasonal industry benefit, shall

comply with the conditionalities under Para no. 24 of the General

terms and conditions of tariff (applicable to both HT & LT).

b) The industries that intend to avail this benefit, shall have Electronic

Tri-Vector Meter fitted to their installation.

c) Monthly charges during the seasonal months shall be fixed charges

and energy charges. The monthly charges during the off seasonal

months, shall be the energy charges plus 50% of the fixed charges.

cclxvii

TARIFF SCHEDULE LT-1

LT-1: Applicable to installations serviced under Bhagya Jyothi and Kutira

Jyothi (BJ/KJ) schemes.

RATE SCHEDULE

Energy charges

(including recovery towards

service main charges)

Nil*

Fully subsidized by the GOK

Commission Determined Tariff for the above category i.e., LT-1 is Rs.5.67 per unit.

*Since GOK is meeting the full cost of supply to BJ / KJ, the Tariff payable by

these Consumers is shown as Nil. However, if the GOK does not release the

subsidy in advance, a Tariff of Rs.5.67 per unit subject to monthly minimum of

Rs.30/- per Installation per month shall be demanded and collected from these

Consumers.

Note: If the consumption exceeds 18 units per month or any BJ/KJ installation

is found to have more than one out let, it shall be billed as per Tariff

Schedule LT 2(a).

TARIFF SCHEDULE LT-2(a)

Applicable to lighting/combined lighting, heating and motive Power

installations of residential houses and also to such houses where a

portion is used by the occupant for (a) Handloom weaving (b) Silk

rearing and reeling and artisans using motors up to 200 watts (c)

Consultancy in (i) Engineering (ii) Architecture (iii) Medicine (iv)

Astrology (v) Legal matters (vi) Income tax (vii) Chartered Accountants

(d) Job typing (e) Tailoring (f) Post Office (g) Gold smithy (h)

Chawki rearing (i) Paying guests/Home stay guests (j) personal

Computers (k) Dhobis (l) Hand operated printing press (m) Beauty

Parlours (n) Water Supply installations, Lift which is independently

serviced for bonafide use of residential complexes/residence, (o) Farm

Houses and yard lighting limiting to 120 Watts, (p) Fodder Choppers &

Milking Machines with a connected load up to 1 HP.

Also applicable to the installations of (i) Hospitals, Dispensaries, Health

Centers run by State/Central Govt. and local bodies. (ii) Houses,

schools and Hostels meant for handicapped, aged destitute and

orphans (iii) Rehabilitation Centres run by charitable institutions, AIDS

and drug addicts Rehabilitation Centres (iv) Railway staff Quarters with

single meter(v) fire service stations.

cclxviii

It is also applicable to the installations of (a) Temples, Mosques,

Churches, Gurudwaras, Ashrams, Mutts and religious/Charitable

institutions (b) Hospitals, Dispensaries and Health Centres run by

Charitable institutions including X-ray units (c) Jails and Prisons (d)

Schools, Colleges, Educational institutions run by State/Central

Govt.,/Local Bodies (e) Seminaries (f) Hostels run by the Government,

Educational Institutions, Cultural, Scientific and Charitable Institutions

(g) Guest Houses/Travelers Bungalows run in Government buildings or

by State/Central Govt./Religious/Charitable institutions (h) Public

libraries (i) Silk rearing (j) Museums (k) Installations of Historical

Monuments of Archeology Departments(l) Public Telephone Booths

without STD/ISD/FAX facility run by handicapped people (m) Sulabh /

Nirmal Souchalayas (n) Viswa Sheds having Lighting Loads only.

RATE SCHEDULE

LT 2 (a) (i): Applicable to areas coming under City Municipal Corporations

and all other Urban Local Bodies

Fixed charges per month For the first KW Rs.30/- per KW

For every additional KW Rs.40/- per KW

Energy charges

For 0 - 30 units (Lifeline

consumption)

300 Ps/unit

31 to 100 units 440 paise /unit


Above 200 units 690 paise /unit

cclxix

LT-2(a)(ii): Applicable to Areas under Village Panchayats

Fixed charges per month For the first KW Rs.20/- per KW

For every additional KW Rs.30/- per KW

Energy charges

For 0 - 30 units (Lifeline

consumption)

290 paise/unit




TARIFF SCHEDULE LT-2(b)

Applicable to the installations of Private Professional and other

Private Educational Institutions including aided, unaided

institutions, Nursing Homes and Private Hospitals having only

lighting or combined lighting & heating, and motive power. [[[[[

RATE SCHEDULE

LT 2 (b) (i): Applicable to City Municipal Corporations and all other Urban

Local Bodies

Fixed charges Rs.45 per KW subject to a minimum of Rs.75 per

month

Energy charges



LT-2(b)(ii): Applicable in Areas under Village Panchayats

Fixed charges Rs.35 per KW subject to a minimum of Rs.60 per

month

Energy charges



Note: Applicable to LT-2 (a), LT-2 (b) Tariff Schedules.

1 A rebate of 25 paise. Per unit shall be given for installation of a house/

School/ Hostels meant for Handicapped, Aged, Destitute and Orphans,

Rehabilitation Centres run by Charitable Institutions.

2 (a) Use of power within the consumer’s premises for temporary purposes

for bonafide use is permitted subject to the condition that, the total

load of the installation on the system does not exceed the

sanctioned load.

(b) Where it is intended to use floor polishing and such other portable

equipment temporarily, in the premises having permanent supply,

such equipment shall be provided with an earth leakage circuit

breaker of adequate capacity.

3 The laboratory installations in educational institutions are allowed to

install connected machinery up to 4 times the sanctioned load. The

fixed charges shall however be on the basis of sanctioned load.

cclxx

4. Besides lighting and heating, electricity supply under this schedule can

be used for fans, Televisions, Radios, Refrigerators and other house-hold

appliances including domestic water pump and air conditioners,

provided, they are under single meter connection. If a separate meter

is provided for Air conditioner Load, the consumption shall be under

commercial tariff till it is merged with the main meter.

5. SOLAR REBATE: A rebate of 50 Paise per unit of electricity consumed to

a maximum of Rs.50/- per installation per month will be allowed to Tariff

schedule LT 2(a), if solar water heaters are installed and used. Where

Bulk Solar Water Heater System is installed, Solar Water Heater rebate

shall be allowed to each of the individual installations, provided that,

the capacity of Solar Water Heater in such apartment / group housing

shall be a minimum capacity of 100 Ltr, per household.


Applicable to Commercial Lighting, Heating and Motive Power

installations of Clinics, Diagnostic Centers, X Ray units, Shops, Stores,

Hotels/Restaurants/Boarding and Lodging Homes, Bars, Private guest

Houses, Mess, Clubs, Kalyan Mantaps / Choultry, permanent Cinemas/

Semi Permanent Cinemas, Theatres, Petrol Bunks, Petrol, Diesel and oil

Storage Plants, Service Stations/ Garages, Banks, Telephone

Exchanges. T.V.Stations, Microwave Stations, All India Radio, Dish

Antenna, Public Telephone Booths/ STD, ISD, FAX Communication

Centers, Stud Farms, Race Course, Ice Cream Parlours, Computer

Centres, Photo Studio / colour Laboratory, Xerox Copiers, Railway

Installation excepting Railway workshop, KSRTC Bus Stations excepting

Workshop, All offices, Police Stations, Commercial Complexes, Lifts of

Commercial Complexes, Battery Charging units, Tyre Vulcanizing

Centres, Post Offices, Bakery shops, Beauty Parlours, Stadiums other

than those maintained by Govt. and Local Bodies. It is also applicable

to water supply pumps and street lights not covered under LT 6, Cyber

cafés, Internet surfing cafés, Call centers, I.T. based medical

transcription centers, Private Hostels not covered under LT -2 (a),

Paying guests accommodation provided in an independent /

exclusive premises.

cclxxi

RATE SCHEDULE

LT-3 (i): Applicable to City Municipal Corporations and all other urban local

bodies

Fixed charges Rs.50 per KW per month

Energy charges

For 0 - 50 units 715 paise /unit


Demand based tariff (optional) where sanctioned load

is above 5 KW but below 50 KW

Fixed charges Rs.65 per KW

Energy charges As above

RATE SCHEDULE

LT-3 (ii): Applicable in Areas under Village Panchayats


Energy charges For 0 - 50 units 665 paise /unit


cclxxii

Demand based tariff (optional) where sanctioned load

is above 5 KW but below 50 KW


Energy charges As above

Note: 1. Besides Lighting, Heating and Motive power, Electricity supply under

this Tariff can also be used for Yard lighting/ air Conditioning/water

supply in the premises.

2. The semi-permanent Cinemas should have semi-Permanent

Structure with permanent wiring and licence for a duration of not

less than one year.

3. Touring Cinemas having an outfit comprising Cinema apparatus

and accessories taken from place to place for exhibition of

cinematography film and also outdoor shooting units shall be billed

under LT- 7 Tariff.

4. A rebate of 20% on fixed charges and energy charges shall be

allowed in the monthly bill in respect of telephone Booths having

STD / ISD/FAX facility run by handicapped people.

5.Demand based Tariff at the option of the Consumer can be

adopted as per Para 1 of the conditions applicable to LT

installations.

TARIFF SCHEDULE LT-4 (a), LT-4 (b) & LT-4(c)

Applicable to (a) Agricultural Pump Sets including Sprinklers (b) Pump

sets used in (i) Nurseries of forest and Horticultural Departments (ii)

Grass Farms and Gardens (iii) Plantations other than Coffee, Tea,

Rubber and Private Horticulture Nurseries

TARIFF SCHEDULE LT-4 (a)

Applicable to I.P. Sets up to and inclusive of 10 HP

RATE SCHEDULE

Fixed charges Free

Energy charges

Commission Determined Tariff (CDT) for LT4 (a) category is 488 Paise per

unit. In case the GOK does not release the subsidy in advance in the

manner specified by the Commission in K.E.R.C. (Manner of Payment of

subsidy) Regulations, 2008, CDT of 488 Paise per unit shall be demanded

and collected from these Consumers.

Note: This Tariff is applicable for Coconut and Arecanut plantations

also.

TARIFF SCHEDULE LT-4 (b):

Applicable to IP sets above 10 HP

RATE SCHEDULE

cclxxiii

Fixed charges Rs.40 per HP per month.

Energy charges 280 paise per unit

TARIFF SCHEDULE LT-4 (c) (i):

Applicable to Private Horticultural Nurseries, Coffee, Tea and Rubber

plantations of sanctioned load up to and inclusive of 10 HP.

RATE SCHEDULE



TARIFF SCHEDULE LT-4 (c)(ii):

Applicable to Private Horticultural Nurseries, Coffee, Tea and Rubber

plantations of sanctioned load above 10 HP.

RATE SCHEDULE



Note: 1) The energy supplied under this tariff shall be used by the consumers only for

pumping water to irrigate their own land as stated in the I.P. Set application /

water right certificate and for bonafide agriculture use. Otherwise, such

installations shall be billed under the appropriate Tariff (LT-3/ LT-5) based on the

recorded consumption if available, or on the consumption computed as per the

Table given under Clause 42.06 of the Conditions of Supply of Electricity of the


2) The motor of IP set installations can be used with an alternative drive for other

agricultural operations like sugar cane crusher, coffee pulping, etc., with the

approval of the Licensee. The energy used for such operation shall be metered

separately by providing alternate switch and charged at LT Industrial Tariff (Only

Energy charges) during the period of alternative use. If the energy used both for

IP Set and alternate operation, is however measured together by one energy

meter, the energy used for alternate drive shall be estimated by deducting the

average IP Set consumption for that month as per the IP sample meter readings

for the sub division as certified by the sub divisional Officer.

3) The Consumer is permitted to use the energy for lighting the pump house and

well limited to 2 lighting points of 40 W each.

4) The water pumped for agricultural purposes may also be used by the Consumer

for his bonafide drinking purposes and for supplying water to animals, birds,

Poultry farms, Dairy farms and fish farms maintained by the Consumer in addition

to agriculture.

5) Billing shall be made at least once in a quarter year for all IP sets.

cclxxiv

6) A rebate of 2 paise per unit will be allowed if capacitors are installed as per Clause

23 of Conditions of Supply of Electricity of the Distribution Licensees in the State

of Karnataka in respect of all metered IP Set Installations.

7) Only fixed charges as in Tariff Schedule for Metered IP Set Installations shall be

collected during the disconnection period of IP Sets under LT 4(a), LT 4(b) and

LT 4(c) categories irrespective of whether the IP Sets are provided with Meters or

not.

cclxxv


Applicable to Heating & Motive power (including lighting) installations

of industrial Units, Workshops, Poultry Farms, Sugarcane Crushers,

Coffee Pulping, Cardamom drying, Mushroom raising installations,

Flour, Huller & Rice Mills, Wet Grinders, Milk dairies, Ironing ,Dry Cleaners

and Laundries having washing, Drying, Ironing etc., exclusive Tailoring

Shops, Bulk Ice Cream and Ice manufacturing Units, Coffee Roasting

and Grinding Works, Cold Storage Plants, Bakery Product Mfg. Units,

KSRTC workshops/Depots, Railway workshops, Drug manufacturing units

and Testing laboratories, Printing Presses, Garment manufacturing units,

Bulk Milk vending Booths, Swimming Pools of local Bodies, Tyre

retreading units, Stone crushers, Stone cutting, Chilly Grinders, Phova

Mills, pulverizing Mills, Decorticators, Iron & Red-Oxide crushing units,

crematoriums, hatcheries, Tissue culture, Saw Mills, Toy/wood industries,

Viswa Sheds with mixed load sanctioned under Viswa Scheme,

Cinematic activities such as Processing, Printing, Developing,

Recording theatres, Dubbing Theatres and film studios, Agarbathi

manufacturing unit., Water supply installations of KIADB & industrial

units, Gem & Diamond cutting Units, Floriculture, Green House, Biotech

Labs., Hybrid seed processing units. Information Technology industries

engaged in development of hardware & Software, Information

Technology (IT) enabled Services / Start-ups (As defined in GOI

notification dated 17.04.2015)/ Animation / Gaming / Computer

Graphics as certified by the IT & BT Department of GOK/GOI, Silk

filature units, Aqua Culture, Prawn Culture, Brick manufacturing units,

Silk / Cotton colour dying, Stadiums maintained by Govt. and local

bodies, Fire service stations, Gold / Silver ornament manufacturing

units, Effluent treatment plants, Drainage water treatment plants, LPG

bottling plants and petroleum pipeline projects, Piggery farms,

Analytical Lab. for analysis of ore metals, Satellite communication

centers, Mineral water processing plants / drinking water bottling plants

and soda fountain units.

cclxxvi

Tariff for LT 5 :

Tariff for LT 5 (a):

Applicable to areas under Municipal Corporations

i) Fixed charges


Fixed

Charges per

Month





Demand based Tariff (optional)

Fixed

Charges per

Month


HP


demand

40 HP and above but less

than 67 HP


demand

67 HP and above Rs.150 per KW of billing

demand

ii) Energy Charges


For the first 500 units 495 paise/unit



Tariff for LT 5 (b):

Applicable to all areas other than those covered under LT-5(a)

i. Fixed charges

Fixed Charges

per Month




iv)Rs.100 per HP for 67 HP & above

ii. Demand based Tariff (optional)

Fixed

Charges

per Month

Above 5 HP and less than 40 HP Rs.50 per KW of billing demand

40 HP and above but less than

67 HP

Rs.65 per KW of billing demand

67 HP and above Rs.150 per KW of billing demand

iii. Energy Charges




cclxxvii

ToD Tariff applicable to LT-5:At the option of the Consumer

Time of Day Increase+ / reduction (-) in energy



06.00 Hrs to 18.00 Hrs 0


NOTE:

1. DEMAND BASED TARIFF

In the case of LT Industrial Consumers, Demand based Tariff at the

option of the Consumer can be adopted. The Consumer is permitted

to have more connected load than the sanctioned load. The billing

demand will be the sanctioned load or Maximum Demand recorded in

the Tri-Vector Meter during the month whichever is higher. If the

Maximum Demand recorded is more than the sanctioned load, penal

charges at two times the normal rate shall apply.

2. Seasonal Industries: The industries which intend to utilize seasonal

industry benefit shall comply with the conditionalities under para no. 26

of general terms and conditions applicable to LT.

3. Electricity can also be used for lighting, heating, and air-conditioning in

the premises.

4. In the case of welding transformers, the connected load shall be taken

as (a) Half the maximum capacity in KVA as per the name plate

specified under-IS1851 or (b) Half the maximum capacity in KVA as

recorded during rating by the Licensee, whichever is higher.


Applicable to water supply and sewerage pumping installations and

also applicable to water purifying plants maintained by Government

and Urban Local Bodies/ Grama Panchayats for supplying pure

drinking water to residential areas, Public Street lights/Park lights of

village Panchayat, Town Panchayat, Town Municipalities, City

Municipalities / Corporations / State and Central Govt. / APMC, Traffic

signals, Surveillance Cameras at traffic locations belonging to

Government Department, subways, water fountains of local bodies.

Also applicable to Streetlights of residential Campus of universities,

other educational institutions, housing colonies approved by local

bodies/development authority, religious institutions, organizations run

on charitable basis, industrial area / estate and notified areas, also

cclxxviii

Applicable to water supply installations in residential Layouts, Street

lights along with signal lights and associated load of the gateman hut

provided at the Railway level crossing.

RATE SCHEDULE

Water Supply- LT-6 (a)

Fixed charges Rs.45/HP/month


Public lighting- LT-6 (b)

Fixed charges Rs.60/KW/month


Energy Charges for LED/ Induction

Lighting

450 paise/unit


Temporary Supply and Permanent Supply to Advertising Hoardings

RATE SCHEDULE

TARIFF SCHEDULE LT-7(a)

Applicable to Temporary Power Supply for all purposes.

LT 7(a) Details Approved Tariff

Temporary Power

Supply for all

purposes.

Less than 67 HP:

Energy charges at 950 paise / unit

subject to a weekly minimum of Rs.170

per KW of the sanctioned load.

TARIFF SCHEDULE LT-7(b)

Applicable to Hoardings & Advertisement boards, Bus Shelters with

Advertising Boards, Private Advertising Posts / Sign boards in the

interest of public such as Police Canopy Direction boards, and other

sign boards sponsored by Private Advertising Agencies / firms on

permanent connection basis.

LT 7(b) Details Approved Tariff

Power supply on

permanent

connection basis

Less than 67 HP:

Fixed Charges at Rs.50 per KW / month

& Energy charges at 950 paise / unit

Note:

1. Temporary power supply with or without extension of distribution main shall

be arranged through a pre–paid energy meter duly observing the

provisions of Clause 12 of the Conditions of Supply of Electricity of the


cclxxix

2. This Tariff is also applicable to touring cinemas having licence for duration

less than one year.

3. All the conditions regarding temporary power supply as stipulated in Clause

12 of the Conditions of Supply of Electricity of the Distribution Licensees in

the State of Karnataka shall be complied with before service.

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Documents

TARIFF ORDER 2016