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    Tamil nadu central and state plants Tamil nadu central and state plants Document Transcript

    • TAMIL NADU ELECTRICITY REGULATORY COMMISSION ----------------------------------------------------------------Determination of Tariff for Generation and Distribution --------------------------------------------- Order No. 1 of 2012 dated 30-03-2012 (effective from 01-04-2012)
    • TAMIL NADU ELECTRICITY REGULATORY COMMISSION (Constituted under section 82 (1) of Electricity Act 2003) (Central Act 36 of 2003)PRESENT : Thiru. K.Venugopal – Member Thiru. S.Nagalsamy – Member Order No 1 of 2012, dated 30-03-2012 In the matter of: Determination of Tariff for Generation and DistributionIn exercise of power conferred by clauses (a), (c)& (d) of sub section (1) of Section 62 andclause (a) of subsection(1) of Section 86 (1) (a) of the Electricity Act 2003, (Central Act 36 of2003), and after taking into account the stipulations in the National Electricity Policy and theTariff Policy, TNERC (Terms and conditions for determination of tariff) Regulations 2005,TNERC (Terms and Conditions for Determination of Tariff for Intra state Transmission /Distribution of Electricity under MYT Framework ) Regulations, 2009, and all other powers hereunto enabling in that behalf and after considering the views of the State Advisory Committeemeeting held on 27-01-2012 in accordance with section 88, after examining the commentsreceived from the stakeholders and after considering suggestions and objections received fromthe public during the public hearings held on 30-01-2012, 02-02-2012, 06-02-2012 and 10-02-2012 as per section 64, the Tamil Nadu Electricity Regulatory Commission, hereby, passes thisorder for Generation and Distribution Tariff.This Order shall take effect on and from the April 1, 2012.(S. Nagalsamy) (K.Venugopal) Member Member
    • Table of Contents1 INTRODUCTION ..................................................................................................................................... 1Background ................................................................................................................................................... 1Preamble ....................................................................................................................................................... 12 Issue-wise summary of views, comments and suggestions of stakeholders on Petition andTANGEDCO’s Replies and Commission’s Views .......................................................................................... 103 ENERGY SALES ..................................................................................................................................... 93Energy Sales: ............................................................................................................................................... 93T&D Loss: .................................................................................................................................................. 1124 Energy Availability ............................................................................................................................. 117Thermal Power Stations: ........................................................................................................................... 117Gas Turbine Power Stations: ..................................................................................................................... 129Hydel Generation: ..................................................................................................................................... 138Wind Generation: ..................................................................................................................................... 142Energy Available from Other Sources: ...................................................................................................... 1445 FIXED COST ........................................................................................................................................ 164Capital Expenditure and Capitalisation ..................................................................................................... 1646 Expenses on account of Generation ................................................................................................. 196Part-I: Fixed Cost: ...................................................................................................................................... 196Return on Equity: ...................................................................................................................................... 197Operation and Maintenance Expenses: .................................................................................................... 203Other debts and Miscellaneous Income: .................................................................................................. 211Part-II: Variable Cost: ................................................................................................................................ 217Provisional Tariff for New Thermal Power Stations:................................................................................. 230Variable cost for Gas Turbine Power Stations: ......................................................................................... 230Hydro Generating Stations:....................................................................................................................... 237Provisional Tariff for New Hydro Generating Stations: ............................................................................ 239Wind Generating Stations: ........................................................................................................................ 239Summary for Own Generation:................................................................................................................. 2407 POWER PURCHASE COST FROM OTHER SOURCES ........................................................................... 245
    • Merit Order Ranking: ................................................................................................................................ 245Power Purchase Cost: ............................................................................................................................... 2488 Aggregate Revenue Requirement of TANGEDCO ............................................................................. 276Regulatory Framework.............................................................................................................................. 276Fixed Cost: ................................................................................................................................................. 277Own Generation and Power Purchase Cost:............................................................................................. 277Intra-State Transmission Charges: ............................................................................................................ 278Non Tariff and Other Income .................................................................................................................... 279Sharing of Gain and Losses ....................................................................................................................... 280Aggregate Revenue Requirement of TANGEDCO ..................................................................................... 2819 TARIFF PHILOSOPHY AND CATEGORY-WISE TARIFFS FOR FY 2010-11 ............................................. 28310 TARIFF SCHEDULE ......................................................................................................................... 319TARIFF FOR HIGH TENSION SUPPLY CONSUMERS .................................................................................... 319TARIFF FOR LOW TENSION SUPPLY CONSUMERS..................................................................................... 325Applicability of the Tariff Schedule ........................................................................................................... 33811 SUMMARY OF DIRECTIVES ............................................................................................................ 340
    • List of AbbreviationsS. No Abbreviation Description 1 A&G Administration and General Expenses 2 ABC Aerial Bunched Cables 3 ABR Average Billing Rate 4 ARR Aggregate Revenue Requirement 5 CERC Central Electricity Regulatory Commission 6 CGS Central Generating Station 7 COS Cost of Supply 8 CPP Captive Power Plant 9 CSD Consumer Security Deposit 10 DA Dearness Allowance 11 EA Electricity Act 12 ED Electricity Duty 13 FY Financial Year 14 GFA Gross Fixed Assets 15 H1 First Half 16 H2 Second Half 17 HT High Tension 18 HVDS High Voltage Distribution System 19 kWh Kilo-watt Hour 20 LT Low Tension 21 MU Million Units 22 MW Mega-watt 23 MYT Multi-Year Tariff 24 O&M Operation & Maintenance 25 R&M Repair & Maintenance 26 O&M Operation & Maintenance 27 RoE Return on Equity 28 TO Tariff Order 29 TP Tariff Policy 30 TVS Technical Validation Session 31 Y-O-Y Year on Year
    • 1 INTRODUCTION Background Preamble1.1.1 Consequent to the enactment of the Electricity Regulatory Commissions Act 1998 (Central Act 14 of 1998), the Government of Tamil Nadu constituted the Tamil Nadu Electricity Regulatory Commission (TNERC) vide G.O.Ms.No.58, Energy (A1) Department, dated 17-03-1999.1.1.2 The Commission issued its first tariff order under section 29 of the Electricity Regulatory Commission Act, 1998, on 15-03-2003 based on the petition filed by the Tamil Nadu Electricity Board (TNEB) on 25-09-2002.1.1.3 In Para 7.2 of the order dated 15-03-2003, the Commission issued the following rulings: “The Commission thus rules that the revised tariffs would be applicable from 16th March 2003 to 31st March 2004, and till such further time as the TNEB does not approach the Commission for tariff revision. The Commission also directs that, henceforth, the TNEB should submit a Tariff Proposal for any financial year by the end of December of the previous financial year. In other words, the Commission expects the TNEB to submit a tariff revision proposal for FY 2004-05 before the end of December 2003, in case the TNEB desires to revise the tariffs for FY 2004-05.”1.1.4 The TNEB did not come before the Commission for revision of retail tariff till January 2010. In the meantime, Electricity Regulatory Commission Act, 1998 was repealed and the Electricity Act 2003 (Central Act 36 of 2003) (hereinafter called Act) was enacted with effect from 10-06-2003.1.1.5 The Commission notified the Tamil Nadu Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff) Regulations 2005 (herein after called Tariff Regulations) on 03-08-2005 under section 61 read with section 181 of the Act.1.1.6 The Commission issued separate order on Transmission charges, Wheeling Charges, Cross Subsidy surcharge and Additional Surcharge on 15-05-2006, based on the petition filed by TNEB on 26-09-2005 under section 42 of the Act.1|Page
    • 1.1.7 The Commission has also issued two generation Tariff Orders between 2003 and 2010 for wind, biomass based power plants and other captive and co-generation plants.1.1.8 The Commission notified the TNERC (Terms and Conditions for Determination of Tariff for Intra state Transmission / Distribution of Electricity under MYT Framework) Regulations, 2009 (herein after called MYT Regulations).1.1.9 Subsequently, TNEB filed an application for determination of tariff with Aggregate Revenue Requirement (ARR) for all functions on 18-01-2010, which was admitted by the Commission after initial scrutiny on 09-02-2010.1.1.10 The Commission issued its second Retail Tariff Order on 31.07.2010.1.1.11 Government of Tamil Nadu, in G.O (Ms) No 114 Energy Dept, dated 08-10-2008 have accorded in principle approval for the re-organisation of TNEB by establishment of a holding company, namely TNEB Ltd and two subsidiary companies, namely Tamil Nadu Transmission Corporation Ltd (TANTRANSCO) and Tamil Nadu Generation and Distribution Corporation Ltd (TANGEDCO) with the stipulation that the aforementioned companies shall be fully owned by Government.1.1.12 Tamil Nadu Generation and Distribution Corporation Ltd. was incorporated on 01-12- 2009 and started functioning as such w.e.f. 01-11-2010.1.1.13 This is the third Order of the Commission on determination of Generation and Retail Tariff.1.1.14 TNEB was formed as a statutory body by the Government of Tamil Nadu (GOTN) on 01- 07-1957 under the Electricity (Supply) Act 1948. The Board was primarily responsible for generation, transmission, distribution and supply of electricity in the State of Tamil Nadu and on 1/11/2010 it was bifurcated as TANGEDCO, TANTRANSCO and and a holding company, TNEB Limited.1.2 Applicability of Order1.2.1 This Order will come into effect from 01-04-2012. The Generation and retail tariff contained in this order will be valid till 31-03-2013. TANGEDCO shall file necessary petition in accordance with the Regulations in time to enable the Commission to pass the next Tariff Order in time.2|Page
    • 1.3 Tariff Filing1.3.1 The Tamil Nadu Generation and Distribution Corporation Ltd. (TANGEDCO) has filed Application before the Commission on 17-11-2011 for preliminary true-up and approval of Aggregate Revenue Requirement (ARR) for the year 2010-11 and approval of ARR for the year 2011-12 and 2012-13 under Multi Year Tariff and also applied for tariff revision with effect from 01-04-2012 or earlier.1.3.2 The above petition was admitted and hosted by the Commission on its website on 25-11- 2011 and registered as TP 1 of 2011.1.4 Procedure Adopted1.4.1 Regulation 7 (2) of Tariff Regulation specifies the following: “The applicant shall publish, for the information of public, the contents of the application in an abridged form in English and Tamil newspapers having wide circulation and as per the direction of the Commission in this regard. The copies of Petition and documents filed with the Commission shall also be made available at a nominal price, besides hosting them in the website.”1.4.2 The public notice containing the salient details with regard to the petition was approved and communicated to TANGEDCO on December 1, 2011, with a direction to arrange publication of the notice in news papers on December 2, 2011 and invited written objections/suggestions/views from by 31-01-2012.1.4.3 The TANGEDCO published the public notice in the following newspapers on December 2, 2011. a) The New Indian Express (English Daily); b) The Hindu (English Daily); c) Dinamalar (Tamil Daily) and d) Daily Thanthi (Tamil Daily)1.4.4 The Petition was placed before the State Advisory Committee on 27-01-2012. The list of Members who participated in the meetings is detailed as Annexure I to this Order.1.4.5 The views / comments expressed by the members are included in Chapter 2 of this Order.3|Page
    • 1.4.6 The list of stakeholders who have submitted objections/suggestions/views regarding the petition in response to the public notice are detailed in Annexure II and Objectios/suggestions/views are included in Chapter 2.1.4.7 The Commission conducted public hearing at the following places on the dates noted against each: Date Day Place Venue Tamil Isai Sangam, Raja Annamalai 30-01-2012 Monday Chennai Mandram, (Near High Court),5, Esplanade Road, Chennai- 108 Corporation Kalaiarangam, R.S. Puram, 02-02-2012 Thursday Coimbatore Coimbatore Barbier Hall (Jubilee Building), St. Josephs 06-02-2012 Monday Tiruchirappalli College, Tiruchirappalli - 2 Indian Medical Association Hall, Madurai 10-02-2012 Friday Madurai Medical College Premises, No. 1 Panagal Road, Madurai - 201.4.8 The lists of participants in each public hearing, is attached as Annexure III to this Order. The views / comments / objections raised by the participants are discussed in Chapter 2.1.5 The Electricity Act, 2003, Tariff Policy (TP) and Regulations Section-61 of the Act stipulates the guiding principles for determination of Tariff by the Commission and mandates that the Tariff should ‘progressively reflect cost of supply of electricity’, ‘reduce cross-subsidy’, ‘safeguard consumer interest’ and ‘recover the cost of electricity in a reasonable manner’. Section-62 (1) of Act states as under: “Section-62 (1): 1. The Appropriate Commission shall determine the tariff in accordance with provisions of this Act for a. supply of electricity by a generating company to a distribution licensee: Provided that the Appropriate Commission may, in case of shortage of supply of electricity, fix the minimum and maximum ceiling of tariff for sale4|Page
    • or purchase of electricity in pursuance of an agreement, entered into between a generating company and a licensee or between licensees, for a period not exceeding one year to ensure reasonable prices of electricity; b. transmission of electricity ; c. wheeling of electricity; d. retail sale of electricity. Provided that in case of distribution of electricity in the same area by two or more distribution licensees, the Appropriate Commission may, for promoting competition among distribution licensees, fix only maximum ceiling of tariff for retail sale of electricity.”1.6 Similarly, the objectives stipulated in the Tariff Policy are as under: “4.0 Objectives of the policy The objectives of this tariff policy are to: a. Ensure availability of electricity to consumers at reasonable and competitive rates; b. Ensure financial viability of the sector and attract investments; c. Promote transparency, consistency and predictability in regulatory approaches across jurisdictions and minimise perceptions of regulatory risks; d. Promote competition, efficiency in operations and improvement in quality of supply.”1.6.1 In the State of Tamil Nadu, Tamil Nadu Electricity Regulatory Commission in exercise of powers vested in it under the Electricity Act, 2003 (Act) passes the Tariff Orders.1.7 Brief Note on Tariff Filing and Public Hearing1.7.1 The Tariff Petition TP 1 of 2011 filed by TANGEDCO is the first Tariff Petition for fixation of retail tariff for the year 2012-13 after the unbundling and issue of transfer scheme by the Government of Tamil Nadu. The Transfer scheme dated 19-10-2010 is enclosed as Annexure IV. This Transfer Scheme is a provisional Transfer Scheme, addresses various issues like transfer of assets, revaluation of assets and partly address the accumulated losses. This Transfer Scheme also envisages deployment of staff of the erstwhile TNEB in the TANGEDCO and TANTRANSCO. The Commission in its earlier Tariff Order No. 3 of 2010 dated 31-07-2010 had suggested in line with the Natioanal Electricity Policy (para 5.4.3) and Tariff Policy that the accumulated losses should not be passed on to the successor entities and financial restructuring has to be resorted to clean5|Page
    • up the Balance Sheet of the successor companies and allow them to start on a clean slate so that the successor entities can start performing better. The following statutory advices have been sent to the Government of Tamil Nadu in this regard and they are appended as Annexure V The Commission has also sent another statutory advice with regard to the establishment of a separate Generating Company and establishment of four Distribution Companies so that the performance of these companies can be improved which will enable proper investments and growth of the individual company. These are also appended as Annexure VI.1.7.2 The Government of Tamil Nadu has issued an amended Transfer Scheme on 2-1-2012 which is appended as Annexure VII. This Transfer Scheme is also provisional and is subject to revision. Besides various other issues, this Transfer Scheme specified that the retirement benefits of the employees of TNEB/ successor entities will be met out of the Revenue Account.1.7.3 Over a period of years, the Capital Account and the Revenue Account has been mixed up in the operation of TNEB and an attempt is being made in this order to segregate this to bring financial discipline in the successor entities. TNEB and successor entities have reported accumulated losses of around Rs. 50,000 crores over the years. The Commission in its earlier Order dated 31-07-2010 through its various Statutory advices has suggested to the Government of Tamil Nadu to take care of the accumulated losses up to the unbundling period by way of financial restructuring so that the burden of the same is not passed on to the consumers. This suggestion is also in line with Para 5.4.3 of the National Electricity Policy which are extracted below. “5.4.3 For achieving efficiency gains proper restructuring of distribution utilities is essential. Adequate transition financing support would also be necessary for these utilities. Such support should be arranged linked to attainment of predetermined efficiency improvements and reduction in cash losses and putting in place appropriate governance structure for insulating the service providers from extraneous interference while at the same time ensuring transparency and accountability. For ensuring financial viability and sustainability, State Governments would need to restructure the liabilities of the State Electricity Boards to ensure that the successor companies are not burdened with past liabilities. The Central Government would also assist the States, which develop a clear roadmap for turnaround, in arranging transition financing from various sources which shall be linked to predetermined improvements and efficiency gains aimed at attaining financial viability and also putting in place appropriate governance structures.”6|Page
    • 1.7.4 The following generating stations are likely to be commissioned during the year 2012-13. Name of the Generation Commercial OperationSl. No. Capacity in MW Station Date 1 North Chennai TPS Unit I 600 October, 2012 2 North Chennai TPS Unit II 600 June, 2012 Vallur TPS (JV of TNEB 3 and NTPC) - Unit I 500 March, 2012 - Unit II 500 February, 2013 - Unit III 500 (Allocation from this station to Tamil Nadu is 1075 MW) 300 MW by March 2012; 4 Mettur TPS Stage III 600 300 MW by June 2012 Nevyeli Lignite 250 MW by March 2012 Corporation TS Expansion 5 2 x 250 and 250 MW by II Unit 1 &2 (Allocation to September 2012 Tamil Nadu is 195.5 MW) MAPS Additional PFBR 6 Kalpakkam (Allocation of 500 500 MW by May 2012 142 MW to Tamil Nadu)1.7.5 This Order deals with major issues like accumulated losses of TANGEDCO, Regulatory Asset, Tariff hike, power cuts. and new capacity additions by TANGEDCO etc. The unmetered supply in the State mainly relate to agriculture and huts. TANGEDCO has been assuming the AT&C loss level by back calculating the consumption of agriculture and huts. This issue was also a subject matter of Appeal before the Hon’ble Appellate Tribunal of Electricity. The Commission had estimated agricultural consumption based on the CEA formula in its last Tariff Order. The Commission had also directed TANGEDCO to furnish sample data of the metered connections for agricultural supply. Based on the same data furnished by TANGEDCO the consumption per Horse Power (HP) for agriculture was worked out and the same has been taken into account while calculating the energy requirement for agriculture. Similarly, estimates have been made for consumption by huts duly reflecting the number of huts with and without televisions. It is also proposed to factor in the consumption on account of distribution of free mixers, grinders and fans.1.7.6 The cost of entire consumption on account of huts as well as on account of agricultural consumption has to be borne by the Government of Tamil Nadu by way of subsidy under7|Page
    • Section 65 of the Electricity Act 2003. In this matter, GoTN has issued a policy direction and commitment letter Ms No. 8 dated 04-02-2012 detailing provision of tariff subsidy to certain categories of electricity consumers. GoTN has also stated that they would consider any modifications of the stated subsidy rates in future also taking into consideration the needs of TANGEDCO and cannons of financial prudence. TANGEDCO would prepare an estimate of the susbsidy and reflect the same in their quarterly subsidy bills. The TANGEDCO shall furnish such details to the Commission on quarterly basis and on approval of the same, the Government of Tamil Nadu will have to provide the matching subsidy. As an improvement of the sampling process for agricultural consumption, it is necessary for TANGEDCO to install Distribution Transformer Meters in all the Distribution Transformers. These meters shall have AMR facility so that they can be read from remote. Based on the reading of the Distribution Transformer Meters, it will be possible to work out the unmetered consumption more accurately after accounting for all the metered connections and a reasonable assumption on the line loss in the last mile can be made. Nevertheless, the existing arrangement of the sample meters shall be continued. The TANGEDCO has also stated that they have awarded a study to Anna University for estimation of losses. This study shall be expeditiously completed and the report, after approval by Board of Directors of TANGEDCO, shall be submitted to the Commission latest by 30th November 2012.1.7.7 The proposal of TANGEDCO in their petition involves creation of Regulatory Asset to the tune of Rs. 24,762 Crores. Creation of a Regulatory Asset is not a good practice under most conditions. In this particular case, the tariff hike sought for by the TANGEDCO for the year 2012-13 is Rs. 9,741 Crore which amounts to 37% increase over the existing tariff. Even after this proposal, the Petition envisages creation of Regulatory Assets of Rs. 4,806 Crore for FY 2012-13. It is not possible to hike the tariff by Rs. 24762 Crore (the entire revenue gap), which will amount to an increase in tariff of 93%, further. Such a steep increase may also not be justifiable as the same (high level of) tariff may not be required to be maintained in future. While the accumulated losses before unbundling have been proposed to be addressed through financial restructuring, losses to the magnitude of Rs. 24762.31 Crore may be dealt with by a combination of Tariff hike and Regulatory Asset. The Commission, therefore, would like to get the reaction of the Government of Tamil Nadu in this regard and accordingly a reference was made to the Government of Tamil Nadu on 16-03-2012 vide Commission letter Lr. No. TNERC/Tariff/DDT-II/R.A./D.No.381/2012, which is enclosed as Annexure VIII in reply of which the Government has reverted vide letter dated 25-03-2012 which is8|Page
    • enclosed as Annexure IX. The Commission appreciates the concerns expressed by various stake holders both in the written comments submitted by them to the Commission as well as the concerns expressed during the Public Hearings held at Chennai at 30th January 2012, Coimbatore on 2nd February 2012, Tiruchirapalli on 6th February 2012 and at Madurai on 10th February 2012. The Commission directs the TANGEDCO to properly monitor the on-going projects so that they are commissioned without further delay. The TANGEDCO should also ensure that the TANTRANSCO completes all the associated transmission system for evacuation of power from the generating stations which are getting commissioned during the year 2012-13 so that power generated from the generating stations are transmitted up to the Load Centers without any bottle necks. The TANGEDCO should ensure that the power which is available at the sub-stations is taken up to the consumption points by way of appropriate distribution system. All these arrangements will have to be carried out through a well structured business plan and individual schemes matching with the business plan. All such plans and schemes shall be submitted in accordance with the Terms and Conditions of Tariff Regulations 2005, MYT Tariff Regulations as well as Licensing Conditions to the Commission. The submission for approval in this regard so far has been unsatisfactory. The Commission has been addressing the utilities by way of letters as well as by way of directions. The compliance to such letters and directions will have to be more serious.1.8 Further, correspondence with TANGEDCO in regard to data gaps and replies furnished are enclosed in Annexure X.1.9 The meetings and discussions referred to in this Order pertain to meetings between the staff of the Commission and the TANGEDCO.1.10 Various suggestions and objections that were raised on TANGEDCO’s Petition after issuance of the Public Notice both in writing as well as during the Public Hearing, along with TANGEDCO’s response and the Commissions rulings have been detailed in Section 2 of this Order.9|Page
    • 2 Issue-wise summary of views, comments and suggestions of stakeholders on Petition and TANGEDCO’s Replies and Commission’s ViewsThe following are the views/ objections/ suggestions given by stakeholders in writing as well asin public hearing.Issue-1: General2.1.1 The Commission to reduce the Tariff instead of increasing the same.2.1.2 TANGEDCO may submit the Tariff Petition every year by December and the new tariff may be made applicable with effect from 1st April of every financial year so that the burden on the consumers due to the abrupt rise in tariff maybe avoided.2.1.3 The Commission to issue guidelines for domestic consumers and commercial establishments to install single star rated installations and three star rated installations.2.1.4 TANGEDCO may be further bifurcated into Generation Company and Distribution Company for better management.2.1.5 TANGEDCO may provide the Action Taken Report on the suggestions, directions and decisions issued by TNERC in the Tariff Order No. 3/2010 dated 31-07-2010.2.1.6 The deemed demand benefit may be continued in view of the supply of demand by the generator to the grid while allotting energy to Open Access consumers.2.1.7 TANGEDCO’s petition does not adhere to the directions given by the APTEL.2.1.8 Truing-up for the previous year is based on ‘preliminary estimates’ for the year 2010-11. The numbers approved by TNERC are different from the numbers submitted in the Tariff Order dated 31-07-2010 and the numbers submitted for truing up on preliminary basis.2.1.9 TANGEDCO should provide electricity bill or demand note to its consumers which will help the consumers to understand the date of reading taken on energy meter.10 | P a g e
    • 2.1.10 TANGEDCO has reduced the payment period from 30 days to 20 days. It should be continued as 30 days and it should issue notices to all its consumers as being done by other Government departments.2.1.11 The neighboring states like Kerala, Karnataka, and Andhra Pradesh have lesser cost of electricity than Tamil Nadu.2.1.12 The Commission is processing the Tariff Petition at a fast pace in the absence of the Chairman of the Commission.2.1.13 The Government may control road side advertisements/ hoardings which consume electricity.2.1.14 The Tamil Nadu Government may constitute an Empowered Group of Eminent Energy Experts for the resolution of power crisis and submit its recommendations within a specified time frame.2.1.15 TANGEDCO should take measures for non-collection of dues from even Government departments, Panchayats, Municipalities etc.2.1.16 The Commission may publish a white paper on the case that TANGEDCO was making profit till 1998 and after 2003, TANGEDCO has reported a loss of Rs. 40,000 crores.2.1.17 The interest on Current Consumption Deposit is paid at 6% whereas the BPSC charges are levied at a higher rate.2.1.18 Electricity cess should be introduced on the same lines as Education cess.2.1.19 The Commission has not raised the tariff for 8 years and therefore tariff may be increased for all the categories. Tariff revision may be uniform for all categories of consumers. The Commission may increase the tariff but tariff shock may be avoided.2.1.20 The tariff may be increased on account of increase in power purchase cost.2.1.21 The Commission may direct TANGEDCO to create a special Reconciliation Wing in the Regulatory Cell.2.1.22 TANGEDCO has not provided backup calculations for the retail tariffs. TANGEDCO is requested to furnish the basis of deriving Rs. 300 per KVA and Rs. 5 as energy charge.11 | P a g e
    • Issue-2: Regulatory Asset2.1.23 The Objectors submitted that the deficit for the current year and ensuing year FY 2012-13 is projected as Rs. 14,496.53 Crore and Rs. 14,547 Crore respectively. TANGEDCO has proposed to recover only Rs. 9,741 Crore through partial tariff revision proposal, leaving a revenue gap of Rs. 4,806 Crore in FY 2012-13 and prayed to treat the unrecovered revenue gap as regulatory asset. Regulatory asset could be created only under exceptional circumstances as stipulated in National Tariff Policy and TNERC Regulation 2005. Tariff Policy Para 8.2.2. The facility of a regulatory asset has been adopted by some Regulatory Commissions in the past to limit the tariff impact in a particular year. This should be done only as exception, and subject to the following guidelines. a. The circumstances should be clearly defined through regulations, and should only include natural causes or force majeure conditions. Under business as usual conditions, the opening balance of unrecovered gap must be covered through transition financing arrangement or capital restructuring; b. Carrying cost of Regulatory Asset should be allowed to the utilities; c. Recovery of Regulatory Asset should be time bound and within a period not exceeding three years at the most and preferably within control period; d. The use of facility of Regulatory Asset should not be repetitive. e. In cases where Regulatory Asset is proposed to be adopted, it should be ensured that the return on equity should not become unreasonably low in any year so that the capability of licensee to borrow is not adversely affected. TNERC Tariff Regulation 2005: Regulation 13: Regulatory Asset “Wherever the licensee could not fully recover the reasonably incurred cost at the tariff allowed with his best effort and after achieving the benchmark standards for the reasons beyond his control under natural calamities and force majeure conditions and consequently there is a revenue shortfall and if the Commission is satisfied with such conditions, the Commission shall treat such revenue shortfall as Regulatory Asset.” The Hon’ble Appellate Tribunal for Electricity has also ruled at Para 8.10 of their judgment rendered in Appeal nos. 196 & 206 of 2010: “Now the question arises whether the creation of Regulatory Asset is in the interest of Distribution Company and the consumers. Respondent no. 1 will have to raise debt to meet its revenue shortfall for meeting its O&M expense, power purchase costs and system augmentation works. It is not understood how the respondent no. 1will service its debts when no recovery of regulatory asset and12 | P a g e
    • carrying costs has been allowed in the ARR. Thus, the respondent no.1 will suffer with cash flow problem affecting its operations and power procurement which will also have an adverse effect on maintaining a reliable power supply to the consumers. Thus, creation of regulatory asset will neither be in the interest of the respondent no. 1 nor the consumers.”2.1.24 The Government may come out with a proposal for undertaking TANGEDCO’s liabilities in line with a similar dispensation provided in 2002 based on The Ahluwalia Committee Recommendations in which the pending payments of all the SEBs to CPUs were undertaken by the respective state government by issue of bonds.2.1.25 Losses accumulated to the tune of Rs. 6,273.21 Crore, upto 03-10-2010, has been proposed to be absorbed in the final Transfer Scheme. Therefore it cannot be included as part of regulatory asset. The Regulatory Asset concept should not be an adjustment mechanism for accounting of losses as per International Financial Reporting System (IFRS).2.1.26 The entire Revenue Requirement must be met through the Tariff Proposal without any gap. Also, it was submitted that control period for the Tariff Order must be only for 1 year. For the year 2013-14, the tariff petition should be approved before 31-03-2013, failure of which should attract tariff reduction by 10%. This may also be incorporated in the present order.2.1.27 Initially, capital subsidy was given to TANGEDCO (erstwhile TNEB) which was later stopped in 1993-94. If continued, there will be no need to create Regulatory Asset. Issue-3: Interest on Loan2.1.28 There is abnormal increase in the interest on loan as there is no clarity on data provided by TANGEDCO as to how much loan has been availed for capital expenditure and how much for revenue expenditure. Issue-4: Pension Fund Reserve2.1.29 TANGEDCO has not addressed the issue of creating a Reserve for Pension Fund despite being repeatedly directed by the Commission.13 | P a g e
    • Issue-5: Fuel Cost / Fuel Price Adjustment Charge (FPAC)2.1.30 The fuel cost shows abnormal increase compared to power purchase cost. Fuel cost has been claimed more than twice the increase in power purchase cost, when apparently there is no corresponding increase in quantum of energy generated from own thermal generating stations2.1.31 Capacity addition with respect to new thermal generating stations or in existing generating stations may be verified in detail before approval by the Commission.2.1.32 TANGEDCO has not resorted to seek the sanction of Fuel Price Adjustment Charge (FPAC) even though Electricity Regulatory Commission’s Act 1998 or the Electricity Act 2003 provided the same. An appropriate and simple formula should be derived for calculating FPAC. Also, FPAC should be recovered from all the consumers – paying, subsidized or non paying consumers.2.1.33 The quarterly estimation of escalation charge should be worked out for which TANGEDCO should get internally audited and certified figures for all the fuel purchases. Alternatively, quarter wise FPAC comparison may be covered. Also, TANGENDCO should get the particulars from the suppliers of power, excluding the power traders which will ensure four or two charges per year. If TANGEDCO wants to add any other charge, then it should be proved that such added charges for any quarter are truly related to fuel purchases made during that adjustment period.2.1.34 Proof of payment to the supplier of power may be provided by TANGEDCO at the time of claiming FPAC. The Commission is requested to fix a time line for submitting FPAC every quarter.2.1.35 In case of blending of indigenous and imported coal for generation, the increase in value of both the coal types must be considered with the GCV and ash value, so that the blend’s weighted average GCV of coal can be assessed.2.1.36 The Commission may prescribe norms of consumption for different load factors for the units/substations.14 | P a g e
    • 2.1.37 The valuation of coal or oil must be based on a weighted average methodology (ARC or APRC) and not on FIFO or LIFO prices. TANGEDCO may be using the FIFO or LIFO for financial accounting purpose.2.1.38 TANGEDCO has proposed the average rate of power purchase as approved by the Commission for FPAC on power purchase. The Commission may provide the method to treat the excess purchases over the approved quantity of purchases while calculating FPAC.2.1.39 FPAC should include variable cost only. The fixed cost should not be considered in the FPAC formula. Interest charges on increase in stock of fuel may not be included and hence, working capital may form a part of FPAC. Any excess transportation charges or demurrages payable for delay in clearing the coal supplies for the port or non availability of berths in the ports of loading or discharge must not be included in FPAC. For the fuel supplies made during the adjustment period, no transit and handling losses must be added for calculating FPAC.2.1.40 The FPAC may be calculated in two parts: a. The FPAC for individual supplies or purchases of power must be identified, as the GCV or supplies may vary as also the specific fuel consumption. b. FPACs thus calculated, must be aggregated as a total charge per unit of consumption for all electricity consumers.2.1.41 TANGEDCO may ask for a consent letter from the State Government for FPAC incurred on the partially or totally subsidized consumers.2.1.42 The formula suggested by TANGEDCO is simple but working out the charge for individual sources of power generation or source of supply may be very cumbersome. Source of the coal and transportation cost incurred has been one of the major issues. The pricing of coal may be done recognizing the multimodal mechanism of transport. The voyages accounts of the PSC may be reconciled promptly and payments settled for the correct grade of coal as well as its transportation costs as the landed price of coal.2.1.43 TANGEDCO may submit the FPAC schedule timely and also account the entire major factors involved in the fuel cost. If there is any delay in submission of FPAC, then the FPAC may be made applicable from the date of approval by the Commission and not on quarterly basis.15 | P a g e
    • 2.1.44 The Commission may establish a normative datum reference cost per million kilocalories of all fuels on a weighted basis and direct TANGEDCO to work out the difference in consumption of fuels compared to normative consumption levels and allow the excess to merge with the tariff or extend the deficit as a tariff adjustment for all the consumers.2.1.45 TANGEDCO has filed its proposal for the FPAC formula for avoiding the uncontrollable cost on account of hydro thermal mix in power generation and purchase. This would enable TANGEDCO to recover the actual cost of the fuel incurred and the actual cost of power purchase. Issue-6: Cost of Supply2.1.46 The Tariff may be fixed as per the consumer’s load factor, power factor, voltage, total consumption of electricity and should reflect the Cost of Supply to the concerned consumer category.2.1.47 TANGEDCO should furnish a statement showing the Cost to Serve for each category of consumers at different voltage level with allocation of Transmission & Distribution loss and consumer wise cross subsidy at the existing tariff while submitting ARR.2.1.48 TANGEDCO has assumed that all the energy imported into and handled in the grid is at a single voltage level of 230 KV and priced accordingly. The ARR must reflect that TANGEDCO is receiving power from various internal and external sources and at different voltage levels.2.1.49 The transmission loss for each of 110 KV and 33 KV levels have been stated to be 1409 MU, while the estimated annual consumption at these voltage levels are 2342 MU and 2805 MU respectively. The loss figures seem to be incorrect as the loss should be approximately proportional to load factor and its squared value.2.1.50 TANGEDCO has consumers in EHT-230 KV, 110 KV, 66 KV, 33 KV, and HT-22/11 KV voltage levels besides in LT 415/230 voltage segments. The rates mentioned do not reflect the correct cost or loss levels. Also, the T & D loss figures may be recalculated.2.1.51 The loss assigned to the specific consumer should be as per the voltage category.2.1.52 The format figures did not reflect a rational approach in its calculations, to arrive at the different voltage levels cost or average costs. The approach that has been adopted seems16 | P a g e
    • to be without validation that true operating costs have been reflected. The petition should negate the concept of “Cost of Service” process of tariff determination.2.1.53 The cost of supply for all categories of consumers has been furnished in Form- 25 of the ARR formats as Rs. 5.98 per kWh. As per the orders of Appellate Tribunal for Electricity in Appeal Nos. 192 & 206 of 2010, the Tribunal has directed the State Commission to determine the voltage wise cost of supply within six months from the date of judgment, i.e., July 28, 2011, but TANGEDCO has not furnished the data. Therefore, the Commission may issue orders to TANGEDCO to furnish the voltage wise cost of supply before finalizing the Order. Issue-7: Subsidy2.1.54 The amount of Rs. 2,234.32 Crore as subsidy payable by the State Government appears to be very small. TANGEDCO has used a very low level pricing of power for a set of consumers. Therefore, appropriate methodology should be used by TANGEDCO instead of ‘Cost to Serve’ model.2.1.55 The subsidy should be offered for the domestic consumers having a monthly consumption of more than 500 units also.2.1.56 TANGEDCO should be provided with the subsidy amount before the start of the financial year by the Government of Tamil Nadu. The Government should pay the subsidy towards domestic consumer to TANGEDCO on a quarterly basis.2.1.57 The subsidy has been given as 150 paisa and 100 paisa per unit for the bi-monthly consumption up to 100 and 200 units respectively, but there has been no provision for subsidy for the first 200 units in the bi-monthly consumption exceeding 200 units and the subsidy is minimal of 50 paise per unit above 200 to 500 units. Therefore, the subsidy should be increased by at least Re. 1 per unit for the first 200 units for the consumers who consume between 200 and 500 units bi-monthly.2.1.58 Fixed charges and minimum charges (Rs. 110/-) should be reduced.2.1.59 The subsidy should be provided for residents in huts using one bulb. Rs. 50 per month should be collected from other consumers in huts.17 | P a g e
    • 2.1.60 Issue-8: Cross SubsidyThe practice of cross-subsidies should be done away with. The free and subsidized supplies to agriculture or economically weaker sections of society should continue, but TANGEDCO should not divert electricity (in the event of a shortage) to other consumers to cover its own deficit. The Supreme Court of India ruled in the case of West Bengal Electricity Regulatory Commission Vs West Bengal High Court and CESC Ltd., Kolkata that there cannot be cross subsidy from one consumer to another.2.1.61 The consumers below poverty line who consume below a specified level, say 30 units per month, may receive a special support by way of cross subsidy. Tariff for such designated group of consumers may be at least 50% of the average Cost of Supply. This provision should be re-examined after five years. Issue-9: Tariff for HT Industry2.1.62 The industrial output in the state is already adversely affected due to power cuts. The tariff increase should ensure un-interrupted power supply to HT industrial consumers.2.1.63 Measures should be taken by TANGEDCO to increase the power supply to meet the demand of Industry, either through spare capacity available within the State or through procurement of power from other states.2.1.64 The morning peak hour cut for industries should be withdrawn.2.1.65 Demand charges may be uniform at Rs. 200 per KVA per month for HT consumers instead of applying varying levels with high increases.2.1.66 All HT consumers should be allowed to procure power under provisions of Open Access.2.1.67 HT Consumers, availing power supply at high voltage are virtually consumers of TANTRANSCO. TANGEDCO comes into picture only for metering and billing purposes. Hence, a HT consumer has to bear the entire cost of the transmission line from the Grid substation of TANTRANSCO to the consumption point, switching, protection and the metering equipment and the utility incurs no capital cost. Maintenance of these equipments is done by TANTRANSCO and the cost of which has been covered in the18 | P a g e
    • ARR of the TANTRANSCO. There is no expenditure towards Distribution. Therefore, the demand charges should be lower.2.1.68 The transmission loss at HT voltage is less compared to when supplied at 11 KV, thus, the energy charges should also be reduced.2.1.69 The energy charges should not be increased from Rs. 3.00 per unit to Rs. 5.00 per unit for HT Tariff IA.2.1.70 The industrial output in the state is already adversely affected due to power cuts. The tariff increase should ensure un-interrupted power supply to HT industrial consumers.2.1.71 Measures should be taken by TANGEDCO to increase the power supply to meet the demand of Industry, either through spare capacity available within the State or through procurement of power from other states.2.1.72 The morning peak hour cut for industries should be withdrawn.2.1.73 Demand charges may be uniform at Rs. 200 per KVA per month for HT consumers instead of applying varying levels with high increases.2.1.74 All HT consumers should be allowed to procure power under provisions of Open Access.2.1.75 HT Consumers, availing power supply at high voltage are virtually consumers of TANTRANSCO. TANGEDCO comes into picture only for metering and billing purposes. Hence, a HT consumer has to bear the entire cost of the transmission line from the Grid substation of TANTRANSCO to the consumption point, switching, protection and the metering equipment and the utility incurs no capital cost. Maintenance of these equipments is done by TANTRANSCO and the cost of which has been covered in the ARR of the TANTRANSCO. There is no expenditure towards Distribution. Therefore, the demand charges should be lower.2.1.76 The transmission loss at HT voltage is less compared to when supplied at 11 KV, thus, the energy charges should also be reduced.2.1.77 The energy charges should not be increased from Rs. 3.00 per unit to Rs. 5.00 per unit for HT Tariff IA.19 | P a g e
    • 2.1.78 The machineries being used by 90% of the industries are fully non linear load and polluting the Grid.2.1.79 In accordance with section 62 (3) of Electricity Act 2003, TNERC may differentiate the tariff on the basis of operating voltage.2.1.80 The stipulation of minimum demand of 90% of the sanctioned demand should be exempted for educational institutions.2.1.81 TANGEDCO is levying demand charges at Rs. 300/KVA for the whole of the month, when they only supply for 14 hours per day. The Commission may penalize TANGEDCO when consumers do not get power supply as envisaged under Electricity Act 2003, by fixing unreliability charge or non-performance charge which may be paid to the consumers. This could be adjusted against the Regulatory Asset, if it is created and so long as it unamortised.2.1.82 TANGEDCO has requested to continue to keep the present billing demand in its petition. Accordingly, in the case of two part tariff, the maximum demand charges for any month will be levied on the KVA demand actually recorded in that month or 90% of the sanctioned demand whichever is higher. However, in case of R&C measures, it is the actual recorded maximum demand or 90% of the demand quota as fixed from time to time whichever is higher. The present billing of 90% may be reduced to 80% as prevailing in Andhra Pradesh.2.1.83 Electricity consumption by labor welfare establishments like canteen, hostel, dispensary, crèche etc in HT premises are being treated as commercial use. TANGEDCO should provide separate electricity meters for measuring the consumption at labor welfare establishment so that it need not be charged as theft and the HT consumers should not be penalized. Therefore, the consumption of such establishments (when not metered separately) should be billed along with the HT consumption.2.1.84 HT industrial consumers should be allowed to use at least 15% of their sanctioned demand for the purpose of labor welfare measures. Separate meters should be installed to meter the load when it exceeds 15% of the sanctioned demand and the LT tariff may be charged for the excess demand.20 | P a g e
    • 2.1.85 TANGEDCO should not demand 15% extra energy charges from a consumer maintaining quality power at the point of common coupling with proper harmonic equipment. Central Electricity Authority (CEA) have given power quality parameters for the bulk consumers in their Notification No. 12/X/STD (CONN) GM/CEA (21-Feb-07) (the Central Electricity Authority (technical) Standards for Connectivity to the Grid) Regulations, 2007 in Part IV under the heading “Grid Connectivity Standards” applicable to the distribution system and bulk consumers, CEA have sought compliance of the following: a. Total voltage harmonic distortion should not exceed 5% b. Total current distortion should not exceed 8% Hence, such extra charges should be levied only on those consumers who do not meet the requirements of CEA. TANGEDCO should notify in the Tariff Order, the reason for this 15% extra charges, as notified in the old tariff order w.e.f. 16-03-2003 and an opportunity should be given to the consumers to limit the harmonics within the values prescribed by CEA and get exempted from this 15% extra energy charges.2.1.86 Textile industry submitted that the Commission has unequally revised the tariff in the Tariff Order dated 31-07-2010, and requested not to repeat it this time as it overloads a few consumer categories.2.1.87 TANGEDCO has made an allocation of 1% of the total units consumed towards maintenance of canteen, rest shed, garden, RO plant, effluent treatment plant, residential quarters and hostels etc., to be billed under HT Tariff IA and in case of excess, to be billed under LT Tariff V (1) in Para 11.1.1. (viii). This move of TANGEDCO was welcomed and there was a request that this be extended to 1.5% of the total units consumed, when R&C measures are in force. Further, the following are the activities integrated with the Industrial activity according to the various provisions under the Factories Act, 1948 and Tamil Nadu Factories Rules 1950 and therefore, any industrial consumer is required to be in compliance with the Statutory provisions: a. Canteen (Section 46) b. Shelters, Rest Rooms and Lunch Rooms (Section 47) c. Creches (Section 48) d. Garden and Greenery (Rules 52-A) e. RO Plant for drinking water (Section 18) f. CETP (TNPCB Norms)21 | P a g e
    • g. Borewell motors and well motors to satisfy the above purposes.2.1.88 Printing industry, jewel merchants and the textile industry have requested that the tariff should not be hiked and that the existing tariff should be continued.2.1.89 The Commission may permit HT industries to draw upto 25% of the Maximum Demand during evening peak hours instead of 10%.2.1.90 The Commission may hike the tariff for big industries and foreign industries and Multi National Companies (MNCs) instead of domestic consumers.2.1.91 TANGEDCO’s proposal of charging extra 10 paisa / unit from HT consumers whose sanctioned demand exceeds 5000 KVA and not availing the supply at i.e. 33 KV, may be made applicable only for future supply to new HT consumers.2.1.92 Sufficient time of at least 5 years to be provided for change from existing level to new voltage level supply. In the meanwhile, TNERC in its Draft Notification dated 01-12- 2011 in respect of Tamil Nadu Electricity Supply (6th Amendment) Code, 2011 wherein Section 3 “Categories of Supply” Clause d & e, it was defined as follows: d. Three-phase three wire supply at 11 KV or 22 KV depending on the voltage level existing in the area of supply shall be provided for a demand limit up to 3 MVA or 5 MVA as the case may be. However, the minimum demand shall be 63 KVA. e. The Consumer shall be provided supply at 33 KV for a demand exceeding 3 MVA and up to 10 MVA if the area of supply is fed through 11 KV system and if the area of supply is fed through 22 KV system, supply at 33 KV shall be provided for a demand exceeding 5 MVA and up to 10 MVA. These provisions differed from the present proposal suggested by TANGEDCO. Issue-10: Tariff for HT - II Category2.1.93 TANGEDCO has proposed an increase of 100 paise per unit of energy supplied to HT IIB (i) category for the private educational institutions and 50% hike in demand charges from Rs. 200/KVA/month to Rs. 300/KVA/month, thus raising the present average charge from Rs. 5.50 to Rs. 7.41 (for 650 KVA demand & 1,25,000 units monthly consumption).22 | P a g e
    • 2.1.94 Educational institutions have a very low load factor and majority of consumption is between 9:00 am to 5:00 pm. For FY 2012-13, the increase in tariff is not in proportion with the consumption as the Consumption by LT II category has been projected as almost double of HT II category whereas expected revenue has been projected as equal.2.1.95 The rate for supply of energy for film exhibitors has been proposed to increase from Rs. 4.50 to Rs. 6.80 per unit for cinema theatres under High Tension Category. As the lowest rates of admission are fixed by the state government and due to poor state of film exhibitors (because of competition from Cable TV and Satellite TV), the requested tariff hike may not be accepted.2.1.96 Continue the existing demand charge of Rs. 200/KVA per month and increase the energy charges by 5% for HT Tariff IIA.2.1.97 Private educational institution may be included in HT IIA category as the ultimate objective of the educational institution is to impart knowledge to students, which is a socially desirable service. The Hon’ble Supreme Court of India in Case number Writ Petition, (Civil) 317 of 1993 (TMA Pai Foundation Vs State of Karnataka) has ruled that “Reasonable Surplus (Funds collected by Education Institutions) to meet cost of expansion and augmentation of facilities in educational institutions does not amount to profiteering.” Therefore it was suggested that private education institutions should come under HT Tariff IIA.2.1.98 Proposed extra levy of 20% on energy consumed during peak hours is strongly objected by HT consumers. The proposed incentive of 5% rebate may be increased up to 20% on energy consumption during night hours.2.1.99 Private educational institution should not be differentiated from government institutions with respect to tariff categorisation.2.1.100 The proposed tariff structure for HT II (B) has been identical to HT Tariff III and it is requested to be grouped under HT Tariff III. a. Tariff applicability must encompass all allied utilities connected with the educational institutions such as hostels, guest houses, canteen, laboratories, conference hall, auditorium, indoor and outdoor stadium, water works, and other supplementary services. b. Extra levy for peak hour consumption have been objected on the account of being study hours for the students for exams.23 | P a g e
    • c. The proposed rebate should be increased to 20%.2.1.101 In Karnataka, there is no separate tariff for Government Educational Institutions. The discrimination will lead to violation of Section 62 (3) of the Electricity Act 2003 regarding discrimination between the consumers and hence, there should not be a separate tariff category for government and private educational institutions. Issue-11: Tariff for HT Tariff III2.1.102 The Commission is requested to have differential tariff for aviation and other commercial activities such as shops, restaurants etc. If no separate metering is possible, than a separate category other than HT Commercial can be proposed for Airports and composite tariff can be determined for aviation and commercial activities. The ATE in its judgment dated 22-07-2011 in Hyderabad International Airport Vs APERC has also given the same findings. Issue-12: Tariff for HT Tariff IV2.1.103 Many service industries like automobile service centers, etc are brought under Tariff IV. These industries should be brought under Tariff III B. Issue-13: Tariff for Domestic2.1.104 The hike in electricity tariff will greatly affect the consumers as the proposed tariff is exorbitant and that the revision results in increase by about 100%.2.1.105 Air conditioner users and UPS users should pay Additional Security Deposit.2.1.106 The domestic consumers belonging to category I(A)- (a), (b), (c), (d) and (e) will end up in paying extra 75%, 90%, 83%, 65% and 85% respectively over and above the existing rates, after the proposed hike in domestic tariff.2.1.107 Various combinations of energy charges for various types of slabs were suggested2.1.108 Due to the power cuts, the domestic consumers are using inefficient Invertors, which further consume a lot of power. As the efficiency of domestic UPS is 50% which is a loss that results in increased subsidized domestic consumption. The increase in the failure of24 | P a g e
    • Distribution Transformers (DTs) of TANGEDCO has increased due to the poor quality of power.2.1.109 The slab system should be common for all consumers irrespective of total consumption of electricity. TANGEDCO has proposed revision of Tariff for consumption of electricity more than 500 units bi-monthly. It was submitted that the common slab system may be implemented, without changing slab rates, based on total units consumed bi-monthly.2.1.110 As per Electricity Act 2003, the Security Deposit amount is refundable to the consumers if it is paid in excess of contract demand or it should be adjusted in two billing cycles. If the contract demand exceeds the metered demand, the excess amount may be refunded by the Board with interest before the due date of payment of third billing cycle. The Commission may direct TANGEDCO for: a. Levy of Additional Consumption Caution Deposit which can be adjusted in case of disconnection of service in the event of any default in payment by the consumer. b. Initiate stringent recovery steps to recover long over dues. c. Introduce a suitable Tax Saving Investment Scheme like Floating of Short term or Long term Infrastructure Power Bonds or Certificates. d. Resort to Differential Tariff Mechanism for end-user (like IT Corporate Majors) of power back up gadgets like inverters and generators which also indirectly contribute to the drain of power from the grid who can be differentiated from the non users by adopting a suitably administered price mechanism.2.1.111 Separate tariff may be given for the State Government and Central Government employees.2.1.112 Prepaid card should be introduced for the domestic consumers for the payment of electricity in advance for the bi-monthly consumption. Issue-14: Tariff for Hut2.1.113 The existing sanction load for the BPL families is 110 watts (Bulb - 40 watts, Color TV 70 watts). The proposed additional load as per Government of Tamil Nadu’s announcement for the BPL families, would be additional 970 Watts (Mixi 750 Watts, Wet grinder 150 Watts, and Table Fan 70 Watts). For a total load of 1080 watts, the per day consumption by the connected load is as follows:25 | P a g e
    • TV 5hrs x 70W 0.35 kWh Fan 8hrs x 70W 0.56 kWh Mixi 0.5hrs x 750W 0.375 kWh Wet grinder 1hr x 150W 0.15 kWh Bulb 6hrs x 40W 0.24 kWh Approximately 1.7 kWh Annual consumption per Hut SC would be 1.7 x 365 i.e. 621 units. The minimum average generation cost of electricity with TANGEDCO’s own generation is 350 paise. Therefore, the compensation by Government of Tamil Nadu to TANGEDCO per annum will amount to Rs. 2173.5 per SC.2.1.114 TANGEDCO has projected the rise in consumption of huts (BPL) as 424 MU whereas the actual consumption is expected to be much more because of color TV, fan, Mixi, grinder and laptop. The Commission has already stated in its Tariff Order of 2003 that for Huts and Agricultural services a separate policy has to be evolved and followed for all services to be metered. Hence, the Commission may direct TANGEDCO for undertaking implementation of 100% metering, collection and disconnection mechanism.2.1.115 The load limit to BPL category may be increased to 110 watts. Meters may be fixed and consumption of electricity by BPL category consumers up to the limit of 100 units bi- monthly may be free. Consumption beyond 100 units may be charged at regular tariff. Issue-15: Tariff for Street Lighting and Water Supply2.1.116 TANGEDCO may equip street lights with Dusk to Dawn switches so as to save electricity.2.1.117 Electronic chokes may be introduced by TANGEDCO instead of conventional ones. Issue-16: Tariff for LT Educational Institutions & Recognized Hospitals2.1.118 Under LT Tariff IIB, the pricing parity between the government educational institutions and private educational institutions is objected by the private educational institutes. The26 | P a g e
    • Government is promoting subsidies/cross subsidies by providing concessional rates to its own institutions.2.1.119 Objection was raised on the increase in the fixed charges by the HT II category consumers. Instead, it was suggested that the slabs may be defined keeping 10 KW of contracted load instead of connected load as one slab and the rate should be fixed at Rs. 10 per slab per month. There should be separate rate for fixed charges for LTCT services.2.1.120 Private Educational institutions have objected to the tariff hike.2.1.121 There should not be fixed charges for LTCT services as it has no relevance. Therefore, it may be dropped. Issue-17: Tariff for Places of Public Worship2.1.122 Meditation centers may be considered in the category of Actual Place of Public Worship. Issue-18: Tariff for Tiny Industries2.1.123 LT Tariff IIIA (i) and IIIA (ii) may be rationalized into a single category.2.1.124 TANGEDCO has provided the minimum load under IIIA categories as 10 HP in its petition. Most of the Micro industries with minimum work force have been operating on a load range of 15 HP to 20 HP. It was suggested that LT Tariff IIIA may be applied to loads up to 20 HP.2.1.125 The charges may be computed on actual power consumed. The current rate of fixed charges for Tariff IIIA & IIIB is Rs. 30 per connection per month. TANGEDCO could have asked for a hike to Rs. 100 per connection per month, however, it has proposed a change to per KW basis for a charge of Rs. 100 per KW per month. The proposal to change the very basis of the charge from Rs. /connection to Rs. /KW may be denied.2.1.126 TANGEDCO has requested to levy demand charges (fixed charges) at the rate of Rs. 50/KW for Tiny Industries (LT IIIA), Rs. 100/KW for LT Industries and Rs. 120/KW for LT CT services per month. The Commission may reject the proposal of tariff hike.27 | P a g e
    • 2.1.127 TANGEDCO has requested to increase the energy charges for Tiny Industries in two fold from the existing rate. The Commission may not increase the energy charges and if needed, the increase may limit to Rs. 0.50 per unit.2.1.128 The proposed increase of 10% in energy charges for LT III (B) category (i.e. from Rs. 5.00/unit to Rs. 5.50/unit) may be uniformly charged to all categories of consumers including LTCT services.2.1.129 Flour mills submitted that due to the presence of HT consumer units near their site, they need to pay TANGEDCO Rs. 2000 for the damage due to natural accidents in the HT line. It is requested to exempt the damage charges for the damages due to natural accidents.2.1.130 Silver chain makers which were earlier categorized under LT Tariff IIIA (1) have requested for the same tariff to continue.2.1.131 A separate dedicated power station may be setup in Tirupur for the benefit of knitwear sector. Issue-19: Tariff for Power Loom2.1.132 The concessional tariff is allowed to cottage, micro and power loom consumers with the intention of helping poor self-employed consumers. However, these concessions are being misused. Further, it submitted that Auto Loom consumers that have been categorized under the Power Loom category have been enjoying concessional tariff rates and subsidies from Tamil Nadu Government. Issue-20: Tariff for LT Industries2.1.133 For the LT consumers, TANGEDCO has proposed an average increase of 59% energy charges while the range for individual consumer category is 0% for bulk supply and 589% for agriculture. In terms of absolute values of energy rates, against a existing rate of 25 paise per unit for agriculture and 666 paise per unit for LT commercial category, the proposed rates are 175 paise for agriculture and 872 paise per unit for LT Industries. In monetary terms, TANGEDCO has proposed to collect Rs. 7,260.76 Crore through proposed revision, out of Rs. 9,741.01 Crore.28 | P a g e
    • 2.1.134 Objections submitted on LT CT services are: a. The fixed charges have been increased from Rs. 60 for two months to Rs. 240/KW/month which is a 400% increase. b. The energy charges have been increased from 500 paise per unit to 600 paise per unit. This is 20% increase in the rates. Hence, the slab charges are requested to be retained at the existing levels. c. The monthly minimum charge is escalated by 250%. Therefore, the LT CT based industries will have to bear 82.30% of the entire increase in charges, under category III of the LT tariffs.2.1.135 The fixed charges should not be related to MD or connected load and should be retained at the existing energy charges.2.1.136 The export units may be exempted from tariff hike so that they can sustain themselves in the global market. Issue-21: Tariff for LT Agriculture2.1.137 For calculation of revenue from sale of power by Agriculture category, the connected load may be considered as submitted by consumers for the replacement of energy efficient motors.2.1.138 The unauthorized additional load may be regularized by collecting Rs. 10,000 per HP. This amount may be utilized for improving the TANGEDCO’s infrastructure.2.1.139 TANGEDCO has admitted that the agricultural consumption has been 100% free. There has been no road map submitted on fixing meters in the agricultural services. The Commission in its Tariff Order 3 of 2010 dated 31-07-2010 directed TANGEDCO that a time bound program for 100% metering needs to be worked out and submitted to the Commission. It was requested that necessary directions should be given to provide meters for all services.2.1.140 The farmers who are having above 10 acres of land have to be supported for constructing a storage tank to avoid lift irrigation.29 | P a g e
    • 2.1.141 As observed by the Commission earlier in its Tariff Order 3 of 2010 dated 31-07-2010, the gap between the expenditure incurred by TANGEDCO and the subsidy paid by the government is the main reasons for the poor financial health of TANGEDCO.2.1.142 As provided in the Electricity Act 2003, the Commission should safeguard consumer’s interest and recover the cost of electricity in a reasonable manner. The Commission should pass appropriate orders directing the utility to recover the cost of electricity, if not from consumers, then from the Government since the Government itself is responsible for the free supply of electricity as per Section 65 of the Electricity Act which states: “Provided that no such direction of the state Government shall be operative if the payment is not made in accordance with the provision contained in this section and the tariff fixed by the state Commission shall be applicable from the date of issue of orders by the Commission in this regard.”2.1.143 For fixing meters to free services in Agriculture sector, a sum of Rs. 2,000 Crores will be required which may be born by Government of Tamil Nadu.2.1.144 The Free Electricity Pump Set scheme should be stopped.2.1.145 The water from agriculture connection should be permitted to be used for poultry and feeding animals. There should not be any penalty for using the agricultural water for animal husbandry, sericulture etc.2.1.146 Enforcement squads are misusing the provisions relating to theft of energy and are charging commercial tariff for agriculturists. There may be a ceiling of 25,000 to 35,000 numbers of cattle to bring an agricultural service connection within the meaning of commercial category.2.1.147 The ex-service men squad employed by TANGEDCO has booked farmers maintaining cows and goats in their agricultural field under the theft of energy which should not to be done as Government also gives free cows and goats to the farmers.2.1.148 The electricity used for Integrated Farming may not be considered as Electricity Theft.30 | P a g e
    • Issue-22: Tariff for Commercial2.1.149 TANGEDCO has proposed to levy uniform 1% of consumption at LT Tariff V {page 129 clause 11.1.1 (viii)}, for usage of the energy for other purposes, irrespective of actual usage. This proposal may badly affect the major consumers like Foundries. Applying 1% of the energy to the LT Tariff V would be irrational for the industries whose consumption of the energy for other purposes is nil or very minimal.2.1.150 The marriage/community halls should have 2 service connections for indoor and outdoor consumption and the lavish illumination should be charged at appropriate tariff.2.1.151 The Commission may re-categorize telecom towers under separate sub-category within the existing commercial category.2.1.152 The tariffs currently charged to consumers falling under the Commercial category in Tamil Nadu are on the higher side when compared to various states in India.2.1.153 The Commission has been requested to consider the proposal of compulsory installation of AMR meters and roll out of consolidated billing for large consumers with multiple connections.2.1.154 The Commission may consider reducing the tariff proposed for the commercial consumers.2.1.155 There is no definition of commercial tariff in the Tariff Order of 31-7-2010. Therefore, those consumers who do not fall in the tariff slabs of LT I to IV may not be brought under the Commercial category.2.1.156 The proposed fixed charge under LT Tariff V should be charged at a rate of Rs. 50 per month plus Rs. 5 per slab of 10KW of motive power (connected load) per month taking grinder, A/C and water heater under motive power. Separate rate for LTCT services may be denied.31 | P a g e
    • Issue-23: Tariff for LT Temporary Supply2.1.157 Presently, for any power used for construction activity by an existing consumer, it is classified as power theft/misuse. It is suggested that the procedure may be modified and TANGEDCO should accept the application for permission for the extra power requirement for the construction activities. The extra charges, if any, may be collected in the existing meters. There should be no requirement for applying fresh temporary connections.2.1.158 The compounding fees should not be collected for the misuse of the energy and instead, the consumer should pay the difference in tariff for misuse of energy.2.1.159 Proposal for applying LT Tariff VI category for the construction activities which are carried out by HT Category consumers with the purpose of expansion or improvement or replacement for the infrastructure connected with the main utility for which HT supply has been availed, contradicts with the applicability of HT Tariff III submitted by TANGEDCO the new proposal which also dealt with construction activity.2.1.160 The lavish illumination has to be discouraged during R&C period. The tariff for lavish illumination should be more than excess demand and energy charges payable for violation of quota.2.1.161 The temporary power usage for construction activity for temple functions, public meetings, exhibitions, conferences of political parties and religious discourses, etc., are different from the construction activity which would become a part of main building after completion. Hence, a separate category within Temporary Supply may be required.2.1.162 The power theft by political parties in public meetings and functions should be discouraged by TANGEDCO through a minimum charge of Rs. 5000 towards Madras Electricity Supply (MES) charges.2.1.163 The existing rate of Rs. 10.50 per unit should be reduced to Rs. 9.00 per unit which would be 50% more than the LT commercial tariff of Rs. 6.00 per unit as suggested. TANGEDCO has not mentioned the unit of the connected load or contracted demand in its submission. The per day basis approach may be replaced by the fixed charge per month adopting a charge of Rs. 10 per KW since the consumer is also paying the cost of extension to the supply agency.32 | P a g e
    • 2.1.164 The monthly minimum charge has no relevance to LT temporary supply and hence it may be dropped. Issue-24: Free/Concessional Tariff2.1.165 As per National Tariff Policy, the minimum and maximum of tariff should be +/- 20% of the average cost of energy. The free energy to huts and agriculture is against the Tariff policy. Power supply to huts should be metered and ceiling for consumption of electricity should be specified for these categories of consumers. Agricultural supply should also be metered and should be rationalized with respect to the area of agricultural land with consumption ceiling.2.1.166 The Government may pay the cost of energy incurred by TANGEDCO for free electricity, wherever provided, for agriculture and huts, on a quarterly basis.2.1.167 The concession given to consumers whose bi-monthly consumption is up to 100 units is proposed to be withdrawn i.e. on fixed rates and the rate of Rs. 1.50 per unit has been proposed to be charged throughout, resulting is the consumer paying a bi-monthly minimum of Rs. 110 instead of Rs. 40 charged earlier. The tariff may be hiked for the consumers who consume 1000 or 2000 units per two months.2.1.168 Ice Producers have sought for concessional tariff.2.1.169 The Steel plants should be exempted from the 15% extra energy charges and limit the harmonics within the limits prescribed by Central Electricity Authority (CEA).2.1.170 Salt manufacturing industries, Non Government Organizations, Rice Mills, CMC Vellore and hospitals attached to educational institutions have requested for concessional tariff.2.1.171 Electricity generation tax should be waived as long as R&C measures are in force. Issue-25: Free Power2.1.172 TANGEDCO should provide free power to the farmers who are having more than 10 acres of land and should be encouraged to install solar power panels. The free power for farmers having 5 to 10 acres of land should be charged at a rate of 50 paise per unit.33 | P a g e
    • 2.1.173 The number of free connections to the farmers has to be restricted to only one service while all other remaining services should be charged.2.1.174 The concept of free power should be dropped and there should be no exemption in electricity tariffs to any category of consumers.2.1.175 Free power to horticulture service connection for farmers may be provided. Issue-26: Generation2.1.176 TANGEDCO may limit its activities in respect of its own generation. Power purchase by TANGEDCO may be monitored and controlled by the Commission.2.1.177 The seven generators which were classified as captive generators were exempted from the payment of cross subsidy charges. Their status may be verified again and cross subsidy charges may be recovered from these consumers.2.1.178 TANGEDCO has lost Rs. 1500 Crore in the dispute between GMR and PPN. TANGEDCO may try to lodge a claim for this loss from both the parties.2.1.179 The Kudankulam Nuclear power project may begin power generation to meet the shortage of 1500 MW in the State.2.1.180 The energy generation by TANGEDCO’s thermal power stations has dropped by 2000 MUs for the year 2010-11 compared to 2009-10 which amounts to Rs. 600 crores of loss. The Commission may ask TANGEDCO to find out the reasons so that the further generation loss could be avoided.2.1.181 There has been heavy loss incurred in the Fixed Cost and Variable Cost in respect of power purchased from Independent power Producers except Pillaiperumalnallur. TANGEDCO may take necessary steps to reduce the cost.2.1.182 The tariff for GMR, PPN, Samalpatti, Madurai and ST CMS has not been regulated. The fixed cost of IPPs should come down from 24% of capital cost to approximately 9% after a period of 10 years. The O&M cost in fixed cost component of IPP tariff should be checked.34 | P a g e
    • 2.1.183 TANGEDCO should follow a strategy to meet the demand by having more power stations than actually planned, and may exploit the full potential of non conventional and renewable sources of energy as also mobilize private investment.2.1.184 TANGEDCO may promote jatropha/bio-diesel cultivation to be used as fuel for generation of power.2.1.185 TANGEDCO may add sufficient capacities to cater to the future demand.2.1.186 The Basin Bridge plant may be converted to Combined Cycle plant.2.1.187 TANGEDCO may prioritize local small scale industries (SSI) which are not having sufficient supply of electricity over the multinational companies for giving new electricity connections. The new connections to the multinationals sectors should be continued but the generation capacity should be increased proportionately.2.1.188 The electricity tax at the rate of 10 paisa per unit on self generation of electricity from generators may be withdrawn.2.1.189 Big shopping malls and Business houses should install their own non-conventional electricity production units. Issue-27: Power Purchase2.1.190 TANGEDCO may purchase power from affordable generating stations except the power from Kayangulam.2.1.191 The power purchase from non conventional energy sources may be restricted to statutory limits, if it is not affordable.2.1.192 TANGEDCO is firming up the infirm power from wind generations with a very high reactive component, causing serious losses to them. TANGEDCO may account for the quantum of losses under a separate head. TANGEDCO might have made losses by way of banking of 6000 MW of infirm power in 10000 MW grids with high technical losses by way of accommodating very high reactive component.35 | P a g e
    • 2.1.193 TANGEDCO should not purchase power above Rs. 3 per unit. Instead, it is better to shed load instead of such high purchase.2.1.194 HT consumers are allowed to enter into power purchase agreements with potential suppliers of power. Medium and small industries have requested for permission to source power from other states. Power generators may be given permission to sell power to other states under open access (Inter-state Open Access).2.1.195 In 2009-10, 14500 MUs was purchased from open market. Private generators which constitute 19% of the total power purchases by TANGEDCO have swindled 50% of the total revenue earned by TANGEDCO. TANGEDCO has bought power at Rs.15 per unit from the open market, which the Commission may regulate.2.1.196 TANGEDCO started incurring losses from the year 2002-03 amounting to Rs.1,000 Crore and gradually increased up to the present level of Rs.53,000 Crore. This is because of high power purchase cost from IPPs, traders and open market. The Commission may regulate the private power purchase as per the provisions of the Electricity Act, 2003.2.1.197 The procedure of involving FPAC is unnecessary as the tariff determination process is an annual exercise which may take care of fuel price adjustment during the year.2.1.198 The hydro power generation from Pycara and Kundah projects costs 20 paise per unit as all its fixed cost has been recovered. Therefore, this source should be earmarked for agricultural sector. Issue-28: Renewable Energy2.1.199 The barrier to wind power development may be removed (including infrastructure for evacuation) and an enabling regulatory and policy environment for investments in this sector should be created.2.1.200 The consumers having contract demand more than 10 MVA may generate electricity up to 5% to 10% of the contract demand which should gradually increase to 25% from renewable sources.36 | P a g e
    • 2.1.201 Banking of wind energy may be dispensed with to avoid serious losses. Demand side management may be enforced for the wind mills by levying common power factor compensation.2.1.202 A separate company may be formed for cheap power sources like hydro power station which should sell power to TANGEDCO at non conventional energy cost and utilize the fund to compensate weaker section like hut and agriculture.2.1.203 Solar power generation should be promoted. Government of Tamil Nadu may take initiatives and offer subsidized rates to boost solar energy use. The usage of solar energy to power the domestic consumers and schools may be promoted as is done in Karnataka.2.1.204 The power generation from wind mills may be enhanced. The power generation potential from Courtrallan falls may be examined for hydro electric power scheme.2.1.205 The Commission may direct TANGEDCO to procure additional power from wind energy generators or alternatively allow to bank the same for a longer duration as third party sale is technically restrictive.2.1.206 Manufacturing & selling of storage electric water heaters may be banned. Instead, solar water heater should be promoted. Similarly, usage of solar water heating system for colleges, big canteens for the hot water usage for cooking purpose may be promoted.2.1.207 There should be no sales tax for LED lighting systems, solar PV panels, and solar water heaters. The concession of tax percentage for domestic appliances should be according to star rating approval.2.1.208 Green houses may be promoted by lowering the power tariffs for such type of houses. Issue-29: Energy Audit/ Demand Side Management / Energy Efficiency2.1.209 TANGEDCO has not been checking the correctness of Current Transformers/Power Transformers and meters provided for the feeders.2.1.210 Under the Energy Conservation Act 2001, power generation, transmission and distribution are designated consumers for energy audit, whereas, TANGEDCO has not undertaken any such audit.37 | P a g e
    • 2.1.211 TANGEDCO may undertake measures to check loss in transmission/theft and install meters in huts (BPL) so that excess energy consumed over the allotted free units could be checked and properly accounted.2.1.212 TANGEDCO may have a full time Member in charge of DSM and this activity may be given same importance as Generation and Distribution.2.1.213 The Bachat Lamp Yojna may be implemented throughout the State. It is also requested to constitute a high level local experts committee in all the districts for assessing the potential of energy savings and implementing the recommendations in a phased manner.2.1.214 In street lighting and Government offices, incandescent lighting may be replaced with efficient fluorescent lamps (CFLs).2.1.215 Energy efficient pump sets should be distributed to farmers replacing their old pump sets. Issue-30: Time of Day Tariff and Extending evening peak hours2.1.216 It was appealed to the APTEL that the morning peak hours have been set between 6 am and 9 am without any study or statistics. The Regulations in this regard provide for 6:00 am to 9:00 am as the morning peak and 18:00 hours to 21:00 hours as the evening peak. APTEL has accepted this Regulation because the Commission’s Regulations provide for specific timings. However, in TANGEDCO’s petition, the evening peak is sought to be revised to 18:00 hours to 23:00 hours. TANGEDCO has not provided any justification for the change sought for. Therefore, the Commission may maintain the Peak hour from morning 6 am to 9 am and evening 6 pm to 9 pm.2.1.217 Peak hour charges are collected at 20% whereas the incentive for consumption during 10:00 pm to 5:00 am is provided at 5%. The night shift allowance (incentive for night shift consumption) may be increased to 20%.2.1.218 Extending of evening peak hours has been objected by the consumers on the account of: a. There have already been R&C measures in place whereby TANGEDCO has allowed industries to draw only 10% of the eligible quota during the evening peak hours. b. By extending peak hours, TANGEDCO has proposed to levy additional 20% of the tariff for the two additional hours. There has been no proper justification for extending the evening peak hours. c. The rebate for consumption during night hours will be reduced by one hour.38 | P a g e
    • d. The proposed change will increase the overall power cost for the industries.2.1.219 The night hour concession may be increased by 10% for the months of June to October to encourage consumption at night hours.2.1.220 TANGEDCO has provided an incentive of 5% on the energy charges being used between 22:00 hrs to 05:00 hrs. The industrial consumer may loose its shift production this way, thereby incurring huge loss and increasing the cost. Maharashtra State Electrcity Board in 1984 has announced such a scheme with 23 paisa per unit as concession which was a failure.2.1.221 Peak hour tariff and night hour rebate may be treated on equal footing. Issue-31: Retail Tariffs2.1.222 Varieties of consumers avail access to power and each consumer has different affordable concerns for the price to be paid for energy consumed. TANGEDCO being a commercial organization is eligible to earn 14% return on their equity. TANGEDCO is not concerned about the ‘ability to pay’ of consumer. TANGEDCO has proposed an extraordinary increase in tariff of nearly 100% for HT consumer and 63% for LT consumer.2.1.223 If the Government is directing such supplies (under Section 65 and or Section 108 of the Electricity Act 2003) the Commission may instruct the Government to provide for the grant of the deficit too.2.1.224 The retail tariff for such consumers who fall under the category of free or subsidized supplies must be determined by the Commission truly and meticulously, so that the consumers do not suffer any part of the burden of such supplies. About 22% of the total consumption in Tamil Nadu is falling under this category.2.1.225 Industrial and Commercial classes of consumers are under burden because of cross- subsidy.39 | P a g e
    • 2.1.226 Introduce KVAH billing for LT and HT consumers so that TANGEDCO can get additional revenue without investment, which may also enable optimum utilization of transformers and related equipment. . Already few states in India have implemented this approach and recently Andhra Pradesh has also implemented KVAH billing for HT consumers. Issue-32: Power factor Incentive2.1.227 TANGEDCO is levying low power factor surcharges in respect of HT & LT services, when the power factor falls below 0.90 & 0.85 respectively. It is suggested that the incentive for maintaining power factor above the minimum required level may be considered as given below. As per the APTEL Order, it was prayed in front of the Commission to provide Power Factor incentive as below: For HT Services maintaining A rebate of 1% of Current above 0.95 to 1.0 Consumption charges for every increase of 0.01 in power factor from 0.9 to 1.0 For LT Services maintaining A rebate of 1% of Current above 0.90 to 0.95 Consumption charges for every increase of 0.01 in power factor from 0.85 to 0.9 For LT Services maintaining A rebate of 2% of Current from 0.95 to 1.0 Consumption charges for every increase of 0.01 in power factor from 0.95 to 1.002.1.228 The power factor incentive should be reintroduced for the industry which was withdrawn in July/August 2010 as it may help efficient consumers of energy. Issue-33: Wheeling Charges2.1.229 TANGEDCO has proposed to increase the Wheeling Charge from the existing 14.74 paise per unit to 20.80 paise per unit for 2011-12 and 19.84 paise per unit for 2012-13. This increase, as presented by TANGEDCO in the petition is due to the increased cost of distribution network incurred by TANGEDCO.40 | P a g e
    • 2.1.230 The proposed reduction in wheeling loss has been objected as the reduction in wheeling loss has been carried away by the increase in wheeling charge. Issue-34: AT&C Losses2.1.231 Out of the total electricity distributed, around 22% of the total consumption in the State has not been metered. Steps may be taken to measure the total losses to calculate the actual T&D loss.2.1.232 Strict police action may be taken against the people using hooks to pilfer electricity from the transformers.2.1.233 The transmission and distribution loss has remained static at 18% against 17% in 80s and 90s. TANGEDCO may use one size conductor for LT and one size conductor for HT instead of various sizes. Issue-35: Power Supply2.1.234 Though TANGEDCO has announced 2 hours mandatory power cut, the time of power cut exceeds 5 to 6 hours. Thus, there is production loss to Medium and Small Enterprises (MSE). No remedial measures have been taken by TANGEDCO in this regard. A Weekly power holiday may be introduced dividing Tamil Nadu into 6 regions and continuous uninterrupted power supply may be maintained for 5 days a week.2.1.235 Due to frequent power shutdown, following issues were presented: a. Due to scheduled and unscheduled load shedding, each switching creates switching surges which is injurious to the equipment. It was submitted that a lot of failure of equipments due to switching (especially sensitive electronic components). b. TANGEDCO’s HT breaker life has reduced drastically, which would result in heavy expenses for replacement of all existing breakers within a short time. Breakers are rated for number of mechanical operations at No Load but TANGEDCO has switched off the breakers at the time of load conditions. Hence, the average operating cycle has reduced than the manufacturer’s recommendation. c. Frequent power cuts have also resulted in failure of winding in the distribution transformers due to the voltage transients and high inrush current. Most of the industries availed additional loads to run the existing industry fully or up to 90% by showing additional machineries. The purpose of 20% power cuts becomes meaningless and TANGEDCO has been requested to impose scheduled and41 | P a g e
    • unscheduled power cuts during the day times. Power cut to all HT industries was requested to increase by 5% to 10%. The norms for additional demand sanctioned should to be stringent in sanctioning and additional demand has to be given only for expansion of machineries with proof.2.1.236 The hospitals responsible for health of citizen may be given uninterrupted power supply.2.1.237 TANGEDCO has proposed to give supply only at 33 KV if the sanctioned load is between 5000 KVA and 10000 KVA and 110 KV or 230 KV supply to be effective only if the demand exceeds 10000 KVA. The Objectors suggested that this change maybe made applicable for the future supply to the new HT consumers.2.1.238 The Commission has approved 40% power cut and 2 hours load shedding including restriction to use power during hours of 6:00 pm and 10:00 pm in the Order No. MP 42 of 2008 dated 28-11-2008, which TANGEDCO has violated and extended the load shedding to more than 8 hours a day. Therefore, it has rendered itself for the consequences under Section 24 of the Electricity Act 2003. Issue-36: Surcharge on Welding Power Supply2.1.239 Presently, 15% surcharge on welding power supply is being levied. This practice has started due to non maintenance of power factor earlier. Now, since the power factor is maintained and levy of penal charges are in force, there should be no necessity to levy the additional surcharge.2.1.240 Welding surcharge is not levied in any other part of the country. Therefore, it is requested that the same may be followed in TANGEDCO.2.1.241 Welding surcharge is levied only for IIIB category. This charge should be levied on other categories like Tariff VI (temporary supply) and IIB (Educational institutions like ITI, Diploma & Engineering Colleges). Issue-37: Levying of Extension estimate cost2.1.242 TNERC has already approved for levying estimate cost for effecting the supply to the intending consumers, which TANGEDCO has not implemented till now.42 | P a g e
    • 2.1.243 A flat rate may be collected as estimate cost for all the extension category works other than IB & IV (other than RSFS Category). Issue-38: Quality of Power2.1.244 The quality of power may be improved so as to have better life of installations at consumer end. The power cut may be uniformly enforced in the urban and rural areas through out the State without affecting the Industrial development.2.1.245 The permissible AT&C and T&D losses may be specified by TNERC without comparing with the National Average power losses so as improve the system by TANGEDCO which will improve the power quality and the availability of power. Issue-39: Metering2.1.246 The meters being used are not standardized as per TANGEDCO requirement. Meters provided at 91,000 distribution transformers at the cost of Rs. 91 Crore was a redundant exercise because of insufficient manpower.2.1.247 The electricity consumption may be noted monthly instead of bi-monthly to avoid the upward trend in the energy charges in the tariff slab.2.1.248 The Commission may call for the following details of the amount collected by vigilance department to get more information on issues based on end use classification of tariff: a) Unauthorized use of electricity (change in tariff classification) b) Theft of energy (i.e. tampering, by-passing meters) c) Details of expenditure incurred by vigilance department2.1.249 It was suggested that Commission may switch to voltage level based tariff.2.1.250 The Commission may direct TANGEDCO to notify the meter reading once in two month as the meter readings are taken by TANGEDCO staff over and above 70 days.2.1.251 The old meters may be replaced by new meters.2.1.252 The subsidy is provided for the value Rs. 10 per month under the Hut Service scheme – “One Light for One Hut” by Tamil Nadu Government. However, in many huts, grinding43 | P a g e
    • is done commercially. Thus, the hut and power loom connections should be properly metered.2.1.253 The Commission may consider installation of Static meters with demand recording facility in the service connections given under LT Tariff IIIA (1) and LT Tariff IIIA (2).2.1.254 Power supply to the domestic consumer may be strictly monitored in a way. A second supply to the same house may be given in case of separate entry and kitchen for tenants.2.1.255 The overcharging of tenants by the house owner is an offence and may be punished under section 142 and 146 of the Electricity Act 2003. Tenants may be provided with a separate meter. Issue-40: Economic and Efficient Operational Aspects2.1.256 Power may not be purchased from Ennore TPS as its specific fuel consumption is 1.17 kg/kWh and auxiliary consumption is 14.48%. The coal meant for Ennore TPS should be diverted to NCTPS, which will enhance the performance of NCTPS.2.1.257 The Commission may fix a deadline for segmentation of TANTRANSCO and TANGEDCO into SLDC and Sub-SLDC.2.1.258 The HT: LT ratio has been almost same for the past few years. No HVDS system has been introduced in a substantial manner. Therefore, transformer failures are increasing.2.1.259 TANGEDCO may concentrate on R-APDRP scheme in high density areas, so that the losses can be contained. Issue-41: Request for Separate Category2.1.260 Health care service providers are service sectors and may not be considered as commercial. As per Supreme Court judgment in 2005, with respect to a case filed by Madhya Pradesh Electricity board, it was stated that Health Care providers should not be treated as commercial entities.44 | P a g e
    • 2.1.261 Addiction treatment and rehabilitation centres for alcohol and drug dependents requests for change in the tariff category from Commercial and may be provided concessional tariff.2.1.262 TANGEDCO has proposed to consider the Information Technology Enabled Service (ITES) industries as different from Information Technology industries by fixing the tariff under the classification as “Commercial” while treating IT industries as “Industries”. In this regard, it is stated that the differentiation is against the mandate in Section 62(3) of the Electricity Act 2003 and contrary to letter issued by TANGEDCO to the Commission dated 12-4-2010 and IT policy framed by the Govt. of Tamil Nadu. Clause 9.5 of Information Communication Technology (ICT) polity, 2008 states , Tamil Nadu Electricity Board will provide power supply for low tension units as per LT Tariff IIIB and for high tension units as per HT Tariff IA to IT industries setup in IT-ITES parks or in stand-alone locations and also ensure the quality of power as required by the industry. For the purpose of power tariff, IT (as defined in Para 5, 5(a), 5(b) and 5 (c) of this policy) maintenance and servicing units and hardware units will be treated as Industrial and not Commercial consumers and electricity tariff as applicable to Industry Consumers will be charged.”2.1.263 The Commission in its order dated 31-07-2010 stated that the tariff for IT services/PCP may be continued in HT Tariff IA and LT Tariff IIIB and for IT Enabled Services, tariff under HT Tariff III and LT Tariff V would be applicable.2.1.264 Charitable institutions have sought for the change of tariff categories to LT Tariff IIC for the meditation hall, dormitories and the offices.2.1.265 LTCT connections catering to residential complex consisting of kitchen, canteen, staff quarters, guest blocks, toilet blocks, training centers, administrative blocks etc have requested for tariff under LT Tariff IC.2.1.266 100% free schools that are run by charitable institutions and which do not receive any Government grants may have a separate tariff slab and tariff may be charged at 50% of proposed domestic rates.2.1.267 National Highway Authority of India (NHAI) and the contractors have requested to change the tariff category of National Highway maintained street lights from Tariff V to IIB (i).45 | P a g e
    • 2.1.268 A separate category of “Aquaculture” tariff may be introduced and Pisciculture should be introduced.2.1.269 Job works in computer typing in small towns have requested to change the tariff category from LT V to LTIII A (1).2.1.270 Orphanages have requested change of tariff from LT II B (2). To LT I A2.1.271 Many guesthouses, gents’ hostel, ladies hostel have come up in residential building for which they do not pay any commercial charge and continues to pay subsidized domestic tariff. A separate category of tariff is requested for such PGs, hostels.2.1.272 Ice manufacturing units may be charged under HT Industrial IA instead of HT Commercial Tariff III.2.1.273 The Cellular towers who use green energy have requested to be classified under bulk LT Consumer slab.2.1.274 Fishing Harbor have requested to be charged under Industrial Tariff.2.1.275 Sericulture, floriculture, raising fruit fodder and waste land development have requested to change their tariff from LT Tariff IIIA (1) to Tariff IV.2.1.276 MSME industry has requested to change the tariff category from LT Tariff V to LT Tariff IIIB.2.1.277 Residential quarters of staff of hotels have requested to be considered under LT Tariff IA instead of LT Tariff V.2.1.278 Poultry and jewellery manufacturers have submitted to change the tariff to LT Tariff IIIA and Tariff IIIB respectively.2.1.279 Yoga meditation centers have requested for change of tariff category to LT Tariff IC. Textile industry has requested for a separate tariff.46 | P a g e
    • Issue 42: Objections/Suggestions by Southern Railways2.1.280 The cross subsidy charged to railway traction is proposed to be increased from 15.37% in 2011-12 to 46.40% in 2012-13.2.1.281 Demand and Energy charges for EHT categories may be fixed at a rate lower than those for corresponding HT categories considering the reduced infrastructure expenditure and reduced losses for power supply at EHT voltage than when compared to HT level.2.1.282 Excess MD surcharge should be levied only when recorded maximum demand exceeds 120% of the contract maximum demand and the excess MD surcharge may be reduced from 200% to 100%.2.1.283 Excess MD surcharge should not be levied for feed extensions necessitated due to reasons attributable to TANGEDCO, TANTRANSCO and reasons beyond the control of Railways.2.1.284 Railway Traction tariff may be separate from general industrial tariff.2.1.285 HT supply points at Erode (HTSC No. 19) and Tiruchirappally (HTSC No. 129) availed for water pumping may be classified under HT-IIA, and LT supply points exclusively for water pumping should be classified under LT IIA tariff categories. Also, it was submitted that HT supply point (HTSC No. 1002) at MRS/Villivakkam may be exempted from availing supply at 110 KV or may be permitted to continue at 33 KV, as a special case, without any penalty till the 33 KV transformers complete their useful lives.2.1.286 Railways Tiruchirapalli division submitted that they have 12 numbers of HT supply points under various categories. The HT supply points availed by Railways mainly caters to Railway Hospital, Railway stations and pumping installations. Introducing TOD tariff on the said HT II A and HT III tariff will be an extraordinary additional burden on the Railways. The operation in Tamil Nadu is predominantly passenger oriented without much scope for more financially viable freight movements.2.1.287 Classify HT supply points with respect to major pumping loads and major colony under HT IIA category.2.1.288 Railways may be exempted from TOD tariff under HT II A and HT III tariff supply points.47 | P a g e
    • 2.1.289 Electricity tariff for Government of India undertaking and public utilities should be lower than the tariffs charged to other bulk consumers in HT category.2.1.290 Suitable rebate on the demand and energy charges may be granted for a period of at least 5 years from the date of commissioning for the new Railways Traction substations. Madhya Pradesh Electricity Regulatory Commission (MPERC) and Rajasthan Electricity Regulatory Commission (RERC) are providing concessional tariffs to new electrification projects by Railways.2.1.291 HT supply points availed by Railway for hospitals, Railways stations and residential quarters may be exempted from TOD metering.2.1.292 Leading power factor should be ignored for power factor metering for Railway Traction load. Alternatively, approve voltage linked VAR charges as given below at the rates prescribed by CERC for Reactive power exchange: a. Railways get paid for VAR return when voltage is below 97% b. Railways pays for VAR return when voltage is above 103%2.1.293 Railways stated that reactive power absorption/supply is a service to be rendered by the utility at a cost as per recommendation of CEA. TANGEDCO in its petition has stated that for the year 2011-12 and 2012-13, 168 MVAR of HT fixed capacitors are proposed to be provided in 11 KV and 22 KV but yet to be complied with. Stipulating lag + lead metering for PF computation for Traction who are availing supply at transmission voltage of 110 KV and distributing 25 kV up to Loco terminal needs to be changed to Lag only metering for PF computation as being done in other states connected to the southern grid for honoring the principle of cost causation in tariff setting.2.1.294 Railways have sought for introduction of EHT category. Most of the states in the country have differentiation between EHT and HT consumers. In the southern grid also all the three States except Tamil Nadu have separate EHT category. Tamil Nadu Electricity Supply Code and Distribution Code also distinguish EHT consumers from HT consumers and therefore merits separate EHT and HT category for tariff consideration.2.1.295 Separate EHT tariff may be introduced with demand and Energy Charges lower than the HT tariff. Railway traction may be subcategorized under EHT category considering the special nature of moving Railway traction load and the purpose of public carriage without profit motive.48 | P a g e
    • Issue-43: Objections/Suggestions by Airport Authority of India2.1.296 Airport Authority of India (AAI) submitted that TANGEDCO should provide a sub meter to capture the consumption of operational offices of AAI administrative offices and charge their electricity consumption under HT II A category.2.1.297 AAI has requested that its offices be included in HT II A and LT IC.2.1.298 AAI has submitted that 97% of electricity is used only for Aviation activities while only 3% is used for commercial activities like shops, restaurants which are actually an integral and small part of the airport operations as an Industry. The services of Aerodromes come under ESMA 1968 cannot be charged under Commercial tariff. As per Tariff Order dated 31-07-2010, energy charges for Railway Traction is same as that of Industrial establishment which means that transport sector is considered under Industrial category. Hence, Airports should also to be charged under Industrial category. The Industrial Disputes Act 1947 has also considered AAI as Industry.2.1.299 AAI has further submitted that as per Section 62(3) of the Electricity Act 2003, the Commission may differentiate the tariff for Airport and allied services. The Appellate Tribunal of Electricity (ATE) in its judgment dated 26-02-2009 in the Appeal No 106 of 2008 had observed that Mumbai International Airport Pvt. Ltd. would not be treated on par with consumers of HT II commercial category and directed MERC to re-determine tariff by way of special category as the services was a public utility.2.1.300 AAI requested for the permission to extend the power supplies to all user agencies working at airport for facilitation of passengers at same rate of TANGEDCO tariff.2.1.301 AAI have requested for change of tariff for CISF Barracks HT SC 727 to HT II A and inclusion of the term “ CISF Barracks “ in Tariff Schedule HT II A and LT I C. AAI Residential complexes have also requested to be included in HT II A and LT I C instead of Commercial category. TANGEDCO’s Response to Railways2.1.302 Considering wind energy injection, as already prayed by the Commission in Appeal No. 75 of 2010 by Indian Railways at APTEL, any EHT and HT consumers has to pay the49 | P a g e
    • entire distribution cost. Hence, the existing method of adoption of single tariff for the both demand and energy charges for EHT and HT may continue.2.1.303 The demand and energy charges for Railways may be kept on for HT industries.2.1.304 The prayer regarding power factor by the Railways is not related to tariff petition filed, but it is related to Regulation on Supply Code. The prayer made in respect of excess MD surcharge to be levied only for RMD above 120% is not feasible of compliance. In respect of request of ignoring leading power factor, the average power factor is arrived considering both the leading and lagging VAR and hence the request may not be accepted.2.1.305 TOD metering is proposed to be based on the additional expenditure incurred by TANGEDCO based on UI mechanism. TANGEDCO is also serving the public without profit motive and without receiving any concession from Railways. Therefore, the exemption of TOD metering may not be considered.2.1.306 With respect to connections of water pumps, since the water pumped are not exclusively for public and it has been used for railways purpose also, the existing tariff may continue.2.1.307 The Railway substation at Villivakkam has served more than 15 years (more than 100% depreciation and served life time). The HT supply point (HTSC No. 1002) at MRS/Villivakkam need not be exempted from availing supply at 110KV and penalty may be levied. If penalty is levied, only then will Railways take necessary action for conversion from 33 KV to 110KV.2.1.308 Due to non availability of voltage wise assets, as directed by Hon’ble APTEL in appeal no. 192 & 206 and appeal no. 102, 113, 112, preliminary working with apportioning the total cost at different voltage, taking into account loss at relevant voltage level has been submitted in the tariff petition. Further, the Hon’ble Commission in the counter affidavit of Appeal No 75 filed by the Indian Railways in APTEL has stated the technical loss up to 110 KV systems alone cannot be added to the Railway Tariff because during the wind season, around 25% of the energy comes from the wind energy generators and these wind generators are connected to 33/22/11 KV lines of Distribution System. Hence, the Railways have to bear all the expenditure incurred by the licensee in the transmission as well as distribution system and tariff may be fixed at +/- 20% of average cost of supply.50 | P a g e
    • TANGEDCO’s Response to Airport Authority of India2.1.309 APTEL in the Appeal No 195 of 2009 (Mumbai International Airport Private Limited Vs MERC & RInfra-D) dated 31-05-2011 has directed that “the State Commission to have differential tariff for the aviation as well as the purely commercial activities, such as shops, restaurants, etc. at the airport. However, if the aviation services could not be metered separately and purely commercial activities separately, then the State Commission could re-categorize the Appellant in a separate category other than HT Commercial II and determine the composite tariff for aviation and the commercial activities of the Appellant”. Accordingly, Airport (HTSC No. 15 and 232 /Chennai South) may be categorized under High Tension tariff IIB (ii) with lesser tariff than HT Commercial.2.1.310 Extension of power supply to all user agencies working at Airport for facilitation of passengers does not come under purview of TANGEDCO. The extension of power supply for construction activities within the premises of Airport for the development of Airport is to be charged HT Tariff III, since the construction could not be considered as aviation activity.2.1.311 Since AAI’s operational offices’ (comprising only AAI Administrative offices) are getting power supply from Airport power supply, therefore, it may be separately metered in High Tension tariff IIB (ii) and charged under LT tariff V.2.1.312 CISF Barracks (HT SC No 727/Chennai South) power supply tariff may be changed to HT Tariff IIA. The term “CISF Barracks” need not be included in Tariff schedule HT IIA (under HT category) since this comes under the term “Housing Complexes”. “CISF Barracks” is also not included under LT Tariff IC since no LT service connection for the same is available at present.2.1.313 AAI Residential Complexes may be included in HT Tariff IIA. Tariff for HTSC No 208/Chennai South may be changed to HT Tariff IIA.2.1.314 The term “AAI Residential Complexes” may not be included in Tariff schedule HT IIA (under HT category) since this comes under the term “Housing Complexes” and “AAI Residential Complexes” is also not to be included under LT Tariff IC since there is no LT service connection for the same available at present.51 | P a g e
    • TANGEDCO’s Response to General Issues2.1.315 TANGEDCO will try to file tariff petition every year in future.2.1.316 Since the last partial revision in tariff from 01-08-2010, there has been substantial increase in operational costs of TANGEDCO on account of increase in its cost of inputs, production cost, wages-salaries of employees as well as the inflationary conditions.2.1.317 Hon’ble APTEL has directed to amortize along with the interest charges as per the provision of the Act, Policy and the Regulations and true up for ARR for the year 2010- 11 and gave consequential directions for recovery of the revenue gap derived after true up along with the carrying cost within a period of three years. The un-recovered gap for the year 2010-11 to 2012-13 may be treated as regulatory asset and carried over to be recovered through future tariffs with necessary allowance on regulatory asset in five financial years with necessary amendments in the Tariff Regulation.2.1.318 TANGEDCO submitted that it has not claimed for the losses from 2003-04 to 2009-10 for Regulatory asset and have only proposed for losses for control period years of 2010- 11 and 2012-13.2.1.319 The control period could not be one year as per Multi Year tariff process.2.1.320 TANGEDCO has drawn up a detailed investment and capital expenditure program to augment the generation capacities and also to strengthen the Transmission & Distribution systems with the aim to provide efficient service to the consumers. Any project expansion and improvement of Transmission & Distribution (T&D) Network has to be borne out of internal generation of resources. However, in the absence of revenue surplus, this amount can be raised only from the debt market. This has resulted in increase in the interest and finance charges on the borrowings to fund these expenditures.2.1.321 TANGEDCO is also undertaking R&M of its old generating stations, which would lead to extension of life and improvement of the Plant Load Factor (PLF) .All these efforts, would ultimately result in enhanced availability of power at lower cost to the consumer.2.1.322 The Transfer Scheme transferring the properties and personnel of the erstwhile TNEB was notified by the Government of Tamil Nadu vide G.O. (Ms.) No. 100 dated 19-10- 2010.52 | P a g e
    • 2.1.323 As per Clause 6(2) of the Government Order, all personnel of the Board (excluding Chairman and Director of the Board) shall stand transferred to and absorbed in TANGEDCO on a provision basis, subject to finalization of Employee Transfer Scheme by the State Government in consultation with the Chairman of TNEB Limited.2.1.324 Clause 6(5) of the Transfer Scheme states that the personnel of the Board shall stand assigned to the services of the relevant Transferee, on deputation basis, on “as-is-where- is” basis, namely that they will continue to serve in the place where they are posted on the date of transfer.2.1.325 As per clause 6(17) of the Government Order, till finalization of transfer of personnel to TANTRANSCO, the payment of terminal benefits to existing pensioners will be continued to be met from the cash flow of the operations of the TANGEDCO and TANTRANSCO would reimburse its proportionate share. The more accurate and realistic assessment of the probable amount of pension liability could be made, only when employee transfer is finalized. Hence the process of assessment of liability and creation of corpus fund could be started by the successor entities once the employee transfer is finalized.2.1.326 The limitation of power purchase could not be done, since the same is based on demand. If the same will be limited and fixed, for the month/day/month/year there will be no power during fag end of that period (i.e. Quota will be finished before the expiry of that period).2.1.327 The procurement of fuel inside India is based on the allocation and TANGEDCO could not change the grade of coal at the allocated site. However, all efforts are being taken to maximize efficiency.2.1.328 The fuel price adjustment charges have been proposed for all the consumers. With respect to unmetered service, the sampling data of agriculture consumption and computed consumption of Hut service may be considered.2.1.329 As per Tariff Policy, Tariff is to be fixed at +/- 20% of the average cost of supply. It has proposed tariff for HT industries (Textile Industries) as +6.69% of average cost of supply and since the tariff for HT industries has not been revised from 2003 and marginally increased by Tariff Order dated 31-07-2010, the reduction of cross subsidy could not de done. Further, if the tariff has not been revised for HT industries, the same53 | P a g e
    • will be -10.3% of the average cost of supply and reduction of cross subsidy cannot be considered at this juncture for HT industries.2.1.330 The HT industries have not been overloaded by means of cross subsidy. There has been no direction to propose tariff below Average Cost of Supply for the consumers with lesser cost to serve and the tariff has been proposed above the average cost of supply considering affordability.2.1.331 The demand charges have been proposed based on the expenditure to be incurred for fixed cost and variable cost (available power). Hence the proportionate reduction of demand charges does not arise for R&C period. Considering the expenditure to be incurred, more demand charges has to be proposed in the tariff petition but it has not been proposed due to further increase of cross subsidy.2.1.332 The preparation of actual cost to serve model will be complex due to wind energy. Since cost to serve model is to be used for deriving cross subsidy and the same need to be arrived based on the cost coverage cross subsidy analysis submitted in the ARR. Hence the tariff may be fixed at +/- 20% of average cost of supply.2.1.333 On the query raised regarding the fixation of tariff subsidy, TANGEDCO clarified that any decision related to tariff subsidies is under purview of Government of Tamil Nadu for all the consumers.2.1.334 The tariff subsidy is being paid by the Government of Tamil Nadu in advance. This is vide GO Letter (Ms) No 8 dated 04-02-2012 wherein the Government has given concurrence for payment of subsidy for various categories of consumers and issued the commitment letter.2.1.335 As per Tariff Policy, tariff is to be fixed at +/- 20% of the average cost of supply. The proposed tariff for HT industries (Textile Industries) is within +6.69% of average cost of supply and since the tariff for HT industries has not been revised from 2003 and marginally increased in the Tariff Order dated 31-07-2010, the deduction of cost subsidy could not de done.2.1.336 The tariff for HT industries has been increased to 18.59% with minimum cross subsidy burden of 6.69%.2.1.337 Separate metering for other purposes for constructions in the HT industries premises may not be considered as industrial activity and has to be treated as Temporary supply.54 | P a g e
    • Similarly, the employee dormitory system cannot be considered as residential activity since they are similar to Hotels without charges.2.1.338 The tariff petition was filed before the issue of the Draft Notification dated 01-12-2011 with regard to Tamil Nadu Electricity Supply (6th Amendment) Code, 2011 by the Commission. TANGEDCO has already submitted the recommendation for exemption of existing 33 KV HT consumers who availed supply at 110KV supply to the Commission. For the surcharge of 10 paisa per unit, it submitted that the consumer has to pay it until the conversion to respective voltage wise supply by the existing consumer.2.1.339 The Multi National Companies (MNCs) and Information Technology (IT) companies are providing employment and foreign exchange to the State. Considering the long term development of the state, continuous supply has been given to the MNCs. Such concessions and levy of industrial tariff for IT services is based on the Policy of Government of Tamil Nadu.2.1.340 As per National Tariff Policy, tariff for any category of consumer has to be fixed at +/- 20% of average cost of supply. Accordingly, the tariff for HT private recognized education institutions has been proposed more than average cost of supply but within the range of +/- 20% of cost of supply.2.1.341 The tariff for HT industries has to be more than LT industries since the cross subsidy by LT industries is less than HT industries. Hence, the tariff hike for HT and LT industries may not be the same.2.1.342 The basis of adoption of Rs. 300/KVA for demand charge have already been submitted to Hon’ble TNERC. Energy charge (Rs. 500/unit) has been proposed in order to have minimum cross subsidy for HT industries.2.1.343 The demand charges for educational institutions have been proposed based on the fixed cost. Since the demand charges is not related to variable cost, reduction of demand for minimum consumption need not be considered.2.1.344 As per section 62(3) of Electricity Act 2003, tariff may be fixed based on the load factor and nature of supply. With respect of private educational institutions, load factor will be high and is commercial in nature. Hence, private educational institutions should be charged a higher tariff. In other states, the fixed charges have been collected on KW basis. The estimated expenditure towards fixed cost for the year 2012-13 work out to be55 | P a g e
    • Rs. 158/KW/month. However, Rs. 120/KW/month has been proposed in the tariff petition.2.1.345 TANGEDCO submitted that considering the nature and usage of supply, tariff hike has been proposed from HT Tariff III.2.1.346 Higher tariff for domestic consumption above 500 units has been proposed for both urban and rural consumers which cover the A/C units for villages.2.1.347 After a gap of seven years, tariff has been proposed to increase marginally during the year 2010-11 for certain category of consumers. The domestic consumers have been given tariff hike of only Rs. 1.00 per unit for their bi-monthly consumption of above 600 units. For the consumption up to 600 units, the tariff has been kept the same from the year 2003 itself. The operational cost (68%), the coal and oil cost (229%) and power purchase cost (235%) have increased drastically whereas the tariff for the industrial consumers remained the same as that of 2003.The loss per unit has increased vis-à-vis the average cost of supply (CoS) and the average rate of realization (RoR) from the year 2005-06 onwards to 2012-13.2.1.348 In order to complete the on-going power projects and subsequent reduction in power cuts and for day to day operation, the tariff hike is essential.2.1.349 The tariff for commercial category has been reduced. Tariff for 0-100 units is proposed from Rs. 5.30 per unit to Rs. 4.30 per unit and tariff for 0-200 units is retained at Rs. 5.30 per unit. Tariff for above 200 units has been raised marginally from Rs. 5.80 per unit to Rs. 6.50 per unit.2.1.350 The tariff for domestic category is -56.99% which has been proposed to increase up to 42% and the cross subsidy has been increased to (-38.46%).2.1.351 Since the cross subsidy by the LT industries is less than HT industries, the proposed tariff is more for LT industries than HT industries. The tariff for the affluent consumers such as cinema theatres, commercial complexes, health clubs are proposed at a higher tariff.2.1.352 The detailed representation for a separate dedicated power station for knitwear sector and total no. of services etc. and availability of land in Tirupur area may be forwarded to Director (Distribution)/TANGEDCO for further analysis.56 | P a g e
    • 2.1.353 The proposed tariff for domestic and local bodies is still below average cost of supply and the existing tariff of industries itself is above the average cost of supply. In order to reduce the cross subsidy, lesser tariff increase has been proposed for HT industries.2.1.354 The tariff for LT Industries has been proposed based on HT and LT slabs system provided for consumption of domestic, cottage and power loom industries. Since the cross subsidy by the LT industries are less than HT industries, the proposed tariff is more for LT industries than HT industries.2.1.355 The tariff for agriculture has been increased by 600% and directions for road map have been requested in the tariff petition for proposing future tariff for all categories.2.1.356 Due to less hours of supply to the Agriculture sector, agriculture consumption is reducing.2.1.357 TANGEDCO submitted that considering the nature and usage of supply, tariff hike has been proposed for LT Commercial category.2.1.358 Maximum tariff for lavish illumination has been proposed in the tariff petition.2.1.359 The construction of college building may not be considered as educational activity and may be charged under LT Tariff IV.2.1.360 Section 46 of Electricity Act 2003 is related to the extension of new line and not related to fixing tariff for consumers. As per the Section 62(3), electricity charges may be fixed for the purpose for which the supply is required. Therefore, temporary supply for construction purpose of building has to be charged higher than normal supply services.2.1.361 The power purchase from the private generators is based on the power purchase agreements and disputes in this regard are under legal jurisdiction.2.1.362 TANGEDCO is taking all efforts to commission the new generating plants.2.1.363 Since there is no sufficient own generation and increasing demand, power has been purchased based on the agreements and from traders for the benefit of consumers, which if not done, will lead to reduction in existing power supply and increase in power cut.2.1.364 Considering the demand, TANGEDCO will adhere to the merit order dispatch to be issued by the Commission to the extent possible.57 | P a g e
    • 2.1.365 If the power purchase cost is limited to Rs. 3/unit, then there will be more power cuts which may not be endured by the people of Tamil Nadu.2.1.366 If cheaper hydro power is marked for the Agriculture category, then tariff for other consumers will increase.2.1.367 As regards the requests of the horticulture growers to be treated under agriculture, it is submitted that the classification has to be decided by the GoTN. For orchards, there can be no free power as stated by the GoTN assembly. TANGEDCO requested the Commission to take steps as per rules.2.1.368 All suggestion for promoting renewable energy shall be considered.2.1.369 The suggestion of promoting CFL and energy saving measures will be considered.2.1.370 Quality management, preventive maintenance, Demand side management and improvement works are being undertaken under various schemes with available financial and human resources.2.1.371 TANGEDCO will make necessary efforts for Demand Side Management (DSM) and Energy Efficiency (EE) as per direction of the Commission, after perusal of blue print for DSM and Energy Efficiency.2.1.372 As per the Tariff Policy, the tariff for hut services will be atleast 50% of cost of supply. The proposed tariff is -53% of average cost of supply and in order to submit the future proposal, road map for reduction of cross subsidy is being prayed from the Commission.2.1.373 The revised peak hour timing proposal is based on the load condition and extra expenditure to be incurred for that timing. The consumer has to pay for the energy consumed during peak hours with surcharge.2.1.374 The night hour incentive has been included to motivate the consumers to use the excess energy available during night hours. There is no excess energy available during the night hours at present. The night hour incentive may be withdrawn, but the same is not proposed due to less capacity addition. The peak timing does not depend on peak. Instead it depends on sustained peak hours.2.1.375 TANGEDCO has submitted the appeal for power factor incentive before the Supreme Court of India and the same is pending for jurisdiction.58 | P a g e
    • 2.1.376 Action is being taken by TANGEDCO to reduce the line loss. Further, the enforcement wing has been effectively undertaking remedial measures for reduction of commercial losses.2.1.377 The petition filed is not a final true up petition. The petition is based on the preliminary Balance sheets and final true up petition will be filed in the later years as being done in other States.2.1.378 The income from Trading has been furnished as zero based on assumption. In case of any variation, the actual figures will be submitted at the time of true up petition.2.1.379 The detailed Capex schemes will be submitted as per direction of the Commission.2.1.380 The limitations of interest on loan can be detrimental. Any clarification sought in regard to the equity by the Commission will be submitted.2.1.381 Fresh capital for on-going works is being raised.2.1.382 The net annual transmission capacity has been adopted in the petition based on the Commission’s Order No. 2 dated 15-05-2006.2.1.383 The Government of Tamil Nadu has been addressed for provision of meters for 100% metering at agriculture service, considering social conditions of Tamil Nadu.2.1.384 The consumption of unmetered Agriculture services is based on scientific sampling and connected HT consumption has been submitted for measurement of T&D loss. In addition, Anna University has also been appointed for evolution of metering at agriculture services.2.1.385 Necessary steps will be taken to adhere to the specific directions of the Commission regarding improving operational efficiency.2.1.386 Drug and rehabilitation centers may not be treated on par with physically handicapped. Mentally retarded and rehabilitation centers may not be given any concessional tariff. However, Private educational institutions which run for free of cost for special purpose (mentally retarded and physically handicapped) alone deserve concessional and separate tariff. LT Tariff IIB (1) may be adopted for rehabilitation center for mentally ill which offers totally free treatment.59 | P a g e
    • 2.1.387 If the request of separate tariff category for textile industry is considered, then other consumers of industrial category will also request for the same and thus, there would be no tariff rationalization.2.1.388 The industrial tariff for Information Technology (IT) industries has been recommended based on Government of Tamil Nadu clarification.2.1.389 Housing complexes may be included under HT Tariff IIA.Commission’s Views on the Objections / Comments / Suggestions Southern Railways2.1.390 Calculation of cross subsidy is based on cost to serve. The Tariff Policy states that “for achieving the objective that the tariff progressively reflects the cost of supply of electricity, the SERC would notify roadmap within six months with a target that latest by the end of year 2010-2011 tariffs are within ± 20 % of the average cost of supply.” Thus, average cost of supply is to be reckoned for determination of tariff for various categories of consumers.2.1.391 Nothing in the Tariff Policy states the tariff should be determined on the basis of paying capacity of a consumer. Therefore, the contention of the Railways in this regard is a misplaced one. It is submitted that this Commission has to strictly adhere to section 62(3) of the Electricity Act in the matter of determination of tariff. The said section prescribes the circumstances under which differentiation can be made between various categories of consumers in the matter of determination of tariff as reproduced below: “(3) The Appropriate Commission shall not, while determining the tariff under this Act, show undue preference to any consumer of electricity but may differentiate according to the consumers load factor, power factor, voltage, total consumption of electricity during any specified period or the time at which the supply is required or the geographical position of any area, the nature of supply and the purpose for which the supply is required.”2.1.392 The Commission also noted that the Railways require uninterrupted power supply and such uninterrupted power supply reduces the available quantity of energy to various other categories of consumers. Ensuring uninterrupted power supply is a factor which places60 | P a g e
    • the Railways in a different category than other consumers. All HT consumers in the State are subject to R & C measures wherein upto 90% power cut is imposed upon them on peak hour consumption. They also need to pay extra charges for consumption in peak hours due to TOD tariff. Railways, however is not subject to R & C measures and TOD tariff.2.1.393 High power factor incentive was withdrawn by the Commission for different reasons. The important reason is that maintaining high power factor itself is an incentive to the consumer as it leads to stable voltage, reduction of strain to consumer equipments and reduction of current consumption charges to the consumer.2.1.394 Tamil Nadu Electricity Supply Code has adopted Lag + Lead logic for imposing penalty for low power factor. High reactive power, both due to leading and lagging power factor is injurious to the grid system. It affects the system voltage, capacity and stability. Only for this reason, the Commission introduced the Lag + Lead logic for power factor measurement by appropriately amending the Supply Code. Lag + Lead logic for power factor measurement is followed in many States.2.1.395 System loss is minimum only at unity power factor. It means, the losses will increase both at lagging and leading power factors and hence not desirable. Both leading and lagging power factors have to be controlled. Both capacitive VAR and inductive VAR pumped into the system are detrimental to the grid and therefore, the consumer has to improve the power factor as specified in the Commission’s Regulations / Codes. Even though, the 110 KV lines are dedicated for the Railways, the drawal/injection of leading reactive power will reflect on the State grid causing voltage fluctuation, increased line losses, etc.2.1.396 The request of Railways for considering its water pumping load under HT IIA and LT IIA categories depending on the type of connection and the request for exemption from TOD tariff cannot be considered because it is a mixed load as water is used for all purposes like residential quarters, stations, trains etc.2.1.397 As regard to the request for allowing MRS/Villivakkam to avail supply at 110 KV, the Commission is of the view that this issue is a local issue and related to the Supply Code and cannot be included in the tariff determination exercise.61 | P a g e
    • Airport Authority of India:2.1.398 The Commission is of the opinion that the two services i.e. AAI Residential Complex and CISF Barracks used for residential purpose of the staff and the security personnel may be given under HT Tariff 2A meant for Housing Complexes.2.1.399 The power used for other activities like shops, banks, restaurants, temples, etc. in the residential area shall be metered and billed accordingly by TANGEDCO under the respective LT categories.2.1.400 As regards the request of AAI relating to consider its offices under HT IIA and LT IC, the Commission states that all the Government of Tamil Nadu offices are classified under Commercial category and therefore this request cannot be accepted.2.1.401 The supply of power to aerodomes and commercial activities likes shops, restaurants services which are used for airports are composite in nature involving both aviation and non-aviation activities. The main issue involved is on the determination of the quantum of power used for aeronautical and non-aeronautical activities. Therefore, a decision on this can be taken after detailed study by the Commission. Till such time the status quo may continueGeneral Issues2.1.402 The Commission examined various issues raised by different stakeholders and the response of the TANGEDCO. These issues were raised in the written comments received by the Commission as well as highlighted during the hearings held at different locations. The views expressed by the TANGEDCO are in the form of response to the comments of individual stakeholders and the response of TANGEDCO at the conclusion of hearings in each location. The Commission would like to make a summary comment on these issues.2.1.403 As regards to the functioning of the Commission and processing the Tariff petition in the absence of Chairman of the Commission, the Commission would like to follow the provision of the Electricity Act 2003: Section 93. (Vacancies, etc. not to invalidate proceedings): No act or proceedings of the Appropriate Commission shall be questioned or shall be invalidated merely on the ground of existence of any vacancy or defect in the constitution of the Appropriate Commission.62 | P a g e
    • Section 92. (Proceedings of Appropriate Commission): … (2) The Chairperson, or if he is unable to attend a meeting of the Appropriate Commission, any other Member nominated by the Chairperson in this behalf and, in the absence of such nomination or where there is no Chairperson, any Member chosen by the Members present from amongst themselves, shall preside at the meeting. (3) All questions which come up before any meeting of the Appropriate Commission shall be decided by a majority of votes of the Members present and voting, and in the event of an equality of votes, the Chairperson or in his absence, the person presiding shall have a second or casting vote. Regulation 12 of Tamil Nadu Electricity Regulatory Commission Conduct of Business Regulations dated 08-01-2004, reads as follows “12. Except for initial procedural issues like notices, filing of copies and documents, the quorum of the Commission shall be two among the three members. For all initial procedural issues, the quorum may be one member.” From the above provisions, it could be seen that the Electricity Act 2003 and TNERC Conduct of Business Regulations enables the two Members to function in the absence of Chairperson.2.1.404 On the contentions of consumers that the tariff hike is nearly 100% for domestic cateogry, the Commission would like to clarify that this increase in tariff has been proposed after the year 2002-03 for most categories of domestic consumers and after introduction of subsidy in 2004.2.1.405 The issue of Transmission and Distribution losses is discussed separately in this Order.2.1.406 The Commission advises TANGEDCO to streamline the procedure for temporary power supply requirement for construction activities.2.1.407 The accumulated losses submitted by TANGEDCO up to 31-10-2010 is Rs. 17207.30 Crore, which needs to be addressed in final transfer scheme through financial restructuring. Statutory advice of the Commission to GoTN in this regard vide TNERC letter dated 09-12-2010 (Annexure VI) may also be referred.63 | P a g e
    • 2.1.408 Even in the subsequent years FY 2011-12 and FY 2012-13, the TANGEDCO has indicated losses in each of the years. The analysis on expenditure on individual item is discussed under respective heading separately in this Order.2.1.409 For Tariff design of FY 2012-13, the Commission has carried out prudence check of each of the cost elements submitted by TANGEDCO in its petition. Based on this prudence check, the Commission has determined Net Revenue Requirement recoverable from tariff. The Commission in this Order has adopted a Tariff Philosphy to allow incremental revenue from approved tariff matching with the net additional revenue requirement, thereby designing the tariff for FY 2012-13 on revenue neutral basis.2.1.410 The Commission directs TANGEDCO to submit the detailed CAPEX schemes with in 3 months of the date of issue of this Order.2.1.411 As regards to levying of estimate extension cost, the Commission clarifies that it has already been directed to TANGEDCO for not collecting the estimated cost from the intending consumers and also to reimburse the amount collected earlier against the provision of TNERC Distribution Code.2.1.412 As regards tenants being overcharged by the house owners, the Commission in this regard had issued a press note on 04-08-2010 in which TANGEDCO had been advised to file such complaints under Section 142 of Electricity Act 2003 or before the appropriate judicial magistrate under Section 146 of Electricity Act 2003.2.1.413 The Commission directs TANGEDCO to comply with various provision of Energy Conservation Act 2001 pertaining to energy audit.2.1.414 The major reasons for the losses are shortage of power, exponential growth of demand and the need for power purchase from the market at high price coupled with lower average billing rate as compared to average cost of supply, notwithstanding the increase in various input costs.2.1.415 The proposal of TANGEDCO in its petition involves creation of Regulatory Asset to the tune of Rs. 24762.31 Crores. Generally creation of Regulatory Asset is not encouraged. In this particular case, the tariff hike sought for by the TANGEDCO for the year 2012-13 is Rs. 9741 Crore which amounts to 37% of increase over the existing tariff. Even after this proposal, the Petition envisages creation of Regulatory Assets of Rs. 4806 Crore for 2012-13 alone. Proposed tariff hike to yield revenue of Rs. 24762 crore, which is the64 | P a g e
    • revenue gap upto FY 2012-13 on standalone basis, would be around 93%, further. Such an increase may not also be justified as the same tariff may not be required to be maintained in future. While the accumulated losses before unbundling has been proposed to be addressed through financial restructuring, losses to the magnitude of Rs. 24762.31 Crore may be dealt with by combination of Tariff hike and Regulatory Asset. The Commission, therefore, would like to get the reaction of the Government of Tamil Nadu in this regard and accordingly a reference is made to the Government of Tamil Nadu on 16-03-2012 which is enclosed as Annexure VIII.2.1.416 The Commission appreciates the concerns expressed by various stake holders both in the written comments submitted by them to the Commission as well as the concerns expressed during the Public Hearings held at Chennai at 30th January 2012, Coimbatore on 2nd February 2012, Tiruchirapalli on 6th February 2012 and at Madurai on 10th February 2012. The Commission directs the TANGEDCO to properly monitor the on- going projects so that they are commissioned without further delay. The TANGEDCO should also ensure that the TANTRANSCO completes all the associated transmission system for evacuation of power from the generating stations which are getting commissioned during the year 2012-13 so that power generated from the generating stations are transmitted up to the Load Centers without any bottle necks.2.1.417 As regards the generation cost of new capacity addition, the Commission has directed TANGEDCO to file separate petition for the approval of capital cost and tariff determination of new power plants. However, the Commission in this Tariff Order has provisionally considered the variable charges for new power plants.2.1.418 The Commission clarifies that Ennore TPS has been proposed to be decommissioned by 2016-17.2.1.419 The Commission has received the comments from the industrial consumers supporting for restarting the incentive for maintaining near about unity power factor. A view was also expressed that most of the consumers would maintain the power factor at around 0.9 lag and therefore TANGEDCO will be the most affected party in the discontinuance of the incentive. The provisions relating to power factor are reproduced below: Regulation 13(3) of Tamil Nadu Electricity Distribution Code dated 21-07-200465 | P a g e
    • “It shall be obligatory on the part of the consumers to improve the power factor of their connected loads to the required level in accordance with provisions made in this code. Every consumer with a power factor less than the stipulated level may be suitably advised to rectify the situation by installing appropriate power factor correction equipment, without prejudice to the levy of compensation charges as per the orders of the Commission from time to time.” Regulation 8(6)(ii) of Tamil Nadu Grid Code dated 19-10-2005 “ii) All the end users, distribution licensees, transmission licensees and STU are expected to provide local VAR compensation such that they do not draw VARs from the HV Grid. VAR compensation has to commence in the following order. • Consumer end • Distribution transformer end • At the substations end of 11 / 22 KV distribution feeders • Substations • Generating stations” Regulation 4.6.1(a) of Indian Electricity Grid Code (IEGC) Reactive Power compensation and/or other facilities, shall be provided by STUs, and Users connected to ISTS as far as possible in the low voltage systems close to the load points thereby avoiding the need for exchange of Reactive Power to/from ISTS and to maintain ISTS voltage within the specified range. As per the above stipulations, the Commission is of the view that it shall be obligatory on the part of the consumer to generate adequate reactive power at his load end so as to maintain stipulated power factor in the network. The role of the consumer is most important because only if the consumer maintains a power factor of near unity in his load end, the entire network (from generator to the load) is relieved of carrying the reactive power.66 | P a g e
    • 2.1.420 In the Explanatory Memorandum to the Tamil Nadu Electricity Supply (Amendment) Code, 2010 notified vide Notification No. TNERC/SC/7-21 dated 25-10-2010, it was stated that “7. Maintaining high power factor at load end (consumer end) helps to maintain the stability of the grid and good voltage profile in the electrical network. This ultimately helps the consumer to avail quality power. 8. The important factor to be considered is that by maintaining a high power factor, a consumer could save his electricity charges considerably by way of reduced demand charges. By way of lower demand charges, a consumer can recover his capacitor installation cost within a few months. After this short pay back period, the consumer is continuously benefited by the lower demand charges. 9. In the above circumstances, the Commission considers that any further incentive provided to the consumer by the TNEB would be a bonus for the consumer. The incentive being paid as power factor incentive, if used directly by TNEB for installing additional capacitors, it will benefit all the consumers. Therefore, the Commission finds no reason to extend the benefit of high power factor incentive to limited consumers and therefore the Commission decides to withdraw the incentive component for power factor improvement with effect from 01-08-2010 as stipulated in the tariff order No. 3 of 2010 dated 31-07-2010.” PF disincentive and incentive should not be equated with each other. The Commission notes that PF disincentive mainly caters to passing the additional cost of the grid imbalance settlement to the consumer. Whereas, maintaining high power factor itself is an incentive to the consumer as it leads to stable voltage, reduction of strain to consumer equipments and reduction of current consumption charges to the consumer. The Commission in TNERC (Terms and Conditions for Determination of Tariff) Regulations, 2005 dated 18.03.2011 has stated that “12. Power Factor The Commission may direct certain categories of consumers to maintain power factor at a prescribed level and allow incentive / disincentive for maintaining above / below the prescribed level.” The Commission has only specified the minimum power factor to be maintained by the consumers as 0.9 for levying penalty and has not specified any benchmark power factor for the purpose of incentive.67 | P a g e
    • 2.1.421 The Commission would like to state that it is understood that the matter regarding power factor incentive is yet to be taken up for hearing by the Supreme Court.2.1.422 The TANGEDCO should also ensure that the power which is available at the sub-stations are taken up to the consumption points by way of appropriate distribution systems. All these arrangements will have to be carried out through a well structured business plan and individual schemes matching with the business plan. All such plans and schemes shall be submitted in accordance with the Terms and Conditions of Tariff Regulations 2005, MYT Tariff Regulations as well as Licensing Conditions. The submission in this regard so far has been very unsatisfactory. The Commission has been addressing the utilities by way of letters as well as by way of directions. The compliance to such letters and directions will have to be more serious.2.1.423 The Commission clarifies that lavish illumination for weddings and other private functions are charged LT VI i.e. Supply to Temporary Connections.2.1.424 As regards the request of certain stakeholders seeking TANGEDCO to provide separate electricity meters for measuring the consumption at labor welfare establishments and not treating as theft, the Commission states that there are several such cases which have been stayed by the High Court. Tariff schedule of this Order may also be referred in this regard.2.1.425 Various issues raised by stakeholders relating to Supply Code Regulations and R&C Orders do not fall under the purview of present exercise of Tariff determination.2.1.426 Objection regarding the waiving off electricity generation tax during the period of R&C measures, the Commission would like to specify that Electricity Generation Tax is in the domain of Government of Tamil Nadu.2.1.427 The drives against theft of electricity are governed by Section 126 (Assessment) and Section 135 (Theft of Electricity) of Electricity Act 2003. Enforcement Squad has to work in accordance with such provisions and the Regulation of the Commission.2.1.428 Sufficient data is not available to assess the impact of the additional hour in Peak hours, and hence the Commission is continuing with the existing TOD slabs. The TANGEDCO is directed to submit data on ToD consumption alongwith the next Tariff Application along with proper justification and consideration by the Commission. Depending on the68 | P a g e
    • impact and response to the ToD tariffs, the Commission may consider extending the ToD tariffs depending on data availability and viability.2.1.429 The Commission disagrees with the suggestion that peak hour tariff and night hour rebate should be on equal footing. During the Peak hours, marginal cost of power procurement is very high and being in revenue neutral regulated business, a pass through mechanism has to be made available to the Utility to recover its cost and also to disincentivise the avoidable consumption during the peak period. During the night off-peak hours the Utility would be operating its base load plants to cater to the off peak load, which are built in to the tariff of the consumer and there is no equitable avoidance of cost for the Utility vis-à-vis peak hour consumption.2.1.430 The tariff for agricultural consumers is not zero. The Commission in its last Tariff Order dated 31-07-2010 has prescribed Rs. 250 per HP per annum and TANGEDCO has proposed to increase the same to Rs. 1750 per HP per annum which is borne by the Government of Tamil Nadu by way of subsidy.2.1.431 As regards to the determination of tariff on the basis of operating voltage, the Commission is of the opinion that the voltage wise cost of supply is synonymous with Cost to Serve method to determine tariff as already discussed by the Commission.2.1.432 Since audited accounts are not available for the year FY 2011-12, the Commission has considered two stage of True-up i.e. Provisional True-up and final True-up. Presently, the Commission is providing Provisional True-up and the final True-up based on the audited accounts for FY 2011-12 will be done in the next Tariff determination process.2.1.433 As regards to the objection raised by the objector regarding TANGEDCO not incurring any cost towards supplying power to the consumer drawing power directly from the grid, the Commission is of the opinion that as per Section 38 & 39 of the Electricity Act 2003 specifying the functions of Central Transmission Utility (CTU) and State Transmission Utility (STU), it has been clearly mentioned that CTU and STU cannot engage in the trading of power and therefore, cost incurred in the supply of power of such consumers also comes under the purview of Distribution Company. Section 38 & 39 of the Electricity Act 2003 are as below: “Section 38. (Central Transmission Utility and functions): (1) The Central Government may notify any Government company as the Central Transmission Utility:69 | P a g e
    • Provided that the Central Transmission Utility shall not engage in the business of generation of electricity or trading in electricity. Section 39. (State Transmission Utility and functions): (1) The State Government may notify the Board or a Government company as the State Transmission Utility: Provided that the State Transmission Utility shall not engage in the business of trading in electricity.” In view of this, all consumers, even if served at EHT voltages, are billed by Distribution licencees only.2.1.434 The Commission has directed TANGEDCO in its Tariff Order dated 15-03-2003 that “7.13 Surcharge for Arc Furnaces In the existing tariff schedule, High Tension industries under Tariff I-A having arc furnaces are being charged 25% extra to the High Tension Tariff I-A for the electricity consumption. This additional charge is on account of the harmonics created by the rectifiers used by the arc furnaces. The Commission has modified this clause in the Tariff Schedule and these arc furnaces will now have to pay additional energy charges of 15%, on the base HT I-A tariffs. Further, the Commission is of the opinion that this extra charge should be levied only till such time as the harmonics are created by such industries. These industries and TNEB would be well advised to study remedial measures available to rectify the situation. If such remedial measures are adopted by the industries / TNEB, then this surcharge has to be reviewed.” The clause for review of surcharge if TANGEDCO/Industries adopt remedial measure to rectify the harmonics in the system does not appear in the Commission’s last Tariff Order dated 31-07-2010. However the Provision in Tariff order No. 3 of 2010 dated 31-07-2010 for similar charges is reproduced below: “9.11.2.4 The consumption of electrical energy by the HT Industrial Consumers under HT IA having Arc furnaces will be charged an additional energy charge of 15% on the HT IA tariff.” The Commission’s Supply Code has the following provisions for levy of additional charges for harmonics dumping: Regulation 4(1)(iv) of Supply Code:70 | P a g e
    • “Additional charges for harmonics dumping Where any equipment installed by a consumer generates harmonics, the consumer shall provide adequate harmonic suppression units to avoid dumping of harmonics into Licensee’s distribution system and the Licensee is at liberty to provide suitable metering equipment to measure the harmonic level pursuant to such harmonic. Where the consumer fails to provide such units, he shall be liable to pay compensation at such rates as the Commission may declare from time to time.”2.1.435 The Central Electricity Authority in its Technical standards for connectivity to the grid regulations, 2007 has specified the following limits for harmonic distortions in the Distribution system and Bulk consumers: “3. Voltage and current Harmonics (1) The total harmonic distortion for voltage at the connection point shall not exceed 5% with no individual harmonic higher than 3%. (2) The total harmonic distortion for current drawn from the transmission system at the connection point shall not exceed 8%. (3) The limits prescribed in (1) and (2) above shall come into force not later than five years from the date of publication of these regulations in the official gazette.”2.1.436 The above regulation was notified in the Government Gazette on 21-02-2007. As specified in the Supply Code, when the consumer fails to provide adequate harmonic suppression unit to avoid dumping of harmonics into Licensee’s distribution system he shall be liable to pay compensation at 15% of the respective tariff. If such remedial measures are adopted by consumers/TANGEDCO to bring down the harmonics within the limit as specified by CEA regulations, then this compensation charge shall not be levied. The measurement of harmonics shall be done by the Distribution Licensee using standard meters/equipments in the presence of the consumers or their representative. Accordingly, non-levy of Compensation Charge, if consumer takes corrective action as per CEA Regulations, is being introduced in this Order.71 | P a g e
    • Fuel Cost2.1.437 Adjusting FPAC charges in the mid of the year has been allowed by the Electricity Act 2003 under section 62 sub section 4, which states: “No tariff or part of any tariff may ordinarily be amended, more frequently than once in any financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge formula as may be specified.” Also, the APTEL in its Order O.P. 1 of 2011 dated 11-11-2011 under para 65 (vi) has stated that “(vi) Fuel and Power Purchase cost is a major expense of the distribution Company which is uncontrollable. Every State Commission must have in place a mechanism for Fuel and Power Purchase cost in terms of Section 62 (4) of the Act. The Fuel and Power Purchase cost adjustment should preferably be on monthly basis on the lines of the Central Commission’s Regulations for the generating companies but in no case exceeding a quarter. Any State Commission which does not already have such formula/mechanism in place must within 6 months of the date of this order must put in place such formula/ mechanism.” Therefore, the Commission clarifies that FPAC exercise is important and should be implemented and it is irrespective of annual tariff increase.2.1.438 The derivation of Fuel Price Adjustment Charge (FPAC) is dealt separately in this Order.2.1.439 As regards to the deriving Cost per million kilocalories for all the fuels, the Commission is of the view that fuel cost cannot be adjusted on the basis of calorific value of the fuel. Separate fuel cost is to be dealt with for the power generation plants consuming different type of fuel and hence it cannot be brought at same platform on the basis of calorific value. Further, the Commission would like to clarify that the Fuel Supply Aggrements are based on the weight or Volume and not on Calorific Value basis.72 | P a g e
    • Regulatory Asset2.1.440 The issue of Regulatory Asset is dealt with in Regulation No. 13 of the Terms and Conditions of Tariff Regulations 2005. This issue was also the subject matter of appeal before the Hon’ble Appellate Tribunal for Electricity arising out of the Commission’s Order No. 3 of 2010 dated 31-07-2011 and the decision of the Appellate Tribunal for Electricity is extracted below:- 8.4. Let us first examine the provisions of the Tariff Policy in this regard. The relevant extracts are as under: “8.2.2. The facility of a regulatory asset has been adopted by some Regulatory Commissions in the past to limit tariff impact in a particular year. This should be done only as exception, and subject to the following guidelines: a. The circumstances should be clearly defined through regulations, and should only include natural causes or force majeure conditions. Under business as usual conditions, the opening balances of uncovered gap must be covered through transition financing arrangement or capital restructuring; b. Carrying cost of Regulatory Asset should be allowed to the utilities; c. Recovery of Regulatory Asset should be time-bound and within a period not exceeding three years at the most and preferably within control period; d. The use of the facility of Regulatory Asset should not be repetitive. e. In cases where regulatory asset is proposed to be adopted, it should be ensured that the return on equity should not become unreasonably low in any year so that the capability of the licensee to borrow is not adversely affected”. The Tariff Policy stipulates creation of the regulatory asset only as an exception subject to the guidelines specified above. According to the guidelines the circumstances under which the regulatory assets should be created are under natural causes or force majeure conditions. 8.5. Let us now examine Regulation 13 of the 2005 Tariff Regulations of the State Commission: “13. Regulatory Asset:73 | P a g e
    • (1) Wherever the licensee could not fully recover the reasonably incurred cost at the tariff allowed with his best effort after achieving the benchmark standards for the reasons beyond his control under natural calamities and force majeure conditions and consequently there is a revenue shortfall and if the Commission is satisfied with such conditions, the Commission shall treat such revenue shortfall as Regulatory Asset. (2) The regulatory asset shall first be adjusted against the contingency reserve. The balance regulatory asset, if any, will be allowed to be recovered within a period of three years as decided by the Commission. (3) The licensee shall intimate the Commission then and there when such contingency arises. (4) Any un-recovered gap at the beginning must be covered through transition financing arrangement or capital restructuring”. Under the State Commission’s Regulations also the regulatory asset is to be created when the licensee is not able to recover the reasonably incurred cost for reasons beyond its control under natural calamities and force majeure conditions. Further, the regulatory asset has to be recovered within a period of three years. Admittedly, in the present case occurrence of natural calamities and force majeure conditions did not arise. 8.6. Now we shall examine the findings of the State Commission in this regard. The relevant extracts from the impugned order under paragraph 9.15.3 (9) are reproduced in paragraph 7.4 above. 8.7. The State Commission has justified creation of the regulatory asset for the anticipated revenue gap during the control period to prevent the tariff shock. The order does not clearly state the total amount of the regulatory asset created but if we add up the projected revenue gap of Rs. 7904.04 Cr., Rs. 6062.24 Cr. and Rs. 3489.18 Cr. for FY 2010-11, 2011-12 and 2012-13 respectively it totals upto Rs. 17445.46 Cr. It is also noticed that the State Commission has also not provided for any carrying cost on the regulatory asset and the programme for recovery of the amount to be taken as expenses in future tariff.74 | P a g e
    • 8.8. We are of the opinion that the regulatory asset created by the State Commission is not in consonance with the Tariff Policy and its own Regulations. Moreover, the impugned order does not provide for recovery of the regulatory assets with the carrying cost as envisaged in the Regulations and the Tariff Policy. 8.9. The State Commission has justified creation of regulatory asset for avoiding tariff shock. Now, let us examine the increase in tariff decided in the impugned order. We reproduce below the response of TNEB (Respondent-1) recorded in the impugned order regarding the tariff increase. “2.27.2 Domestic users consume 15 million units/ day. Individual consumption has already crossed more than 1000 units, whereas the per capita consumption envisaged in the 11th Plan is 1000 units only. Last year, the average cost of supply was Rs.4.70/unit and it is expected to increase to Rs.4.90 / unit. Ason date, the average recovery is Rs.2.60/unit. For every consumer, the average subsidy is Rs.2.30/unit. In Tamil Nadu, except Commercial and Industry, other categories come under subsidized tariff. Out of 2.09 crores consumers, no hike is proposed for 1.65 crores consumers. Out of 1.50 crores domestic consumers, there is no hike for 1.40 crores consumers. Hike is proposed for only 10 to 12 lakh domestic consumers. The average increase is 65 ps. Only”. Thus, despite huge gap between average cost of supply and average recovery, TNEB had proposed no hike in tariff for 1.65 crores consumers out of total 2.09 crores consumers i.e. tariff was not to be increased for about 79% of the consumers. Out of 1.5 Crores domestic consumers no hike was proposed for 1.4 Crores (93%) consumers. In fact, the first respondent withdrew its own petition for tariff increase for domestic consumers consuming from 201 units to 600 units bio- monthly and the State Commission permitted the same. In its response to the comments of the stakeholder the State Commission has recorded in para 2.29.1(6) of the impugned order that it had proposed to increase tariff only to certain categories of consumers. We do not understand why no tariff was increased for majority of consumers even though the Respondent no. 1 was facing huge revenue gap while it had proposed to carry out a number of system improvement works for which funds were required and considering that the tariff was being increased after a span of seven years. When the tariff has not been increased for most of the consumers, how the creation of the regulatory asset of such high magnitude, that75 | P a g e
    • too without any direction for its amortization, can be justified on the pretext of avoiding tariff shock? 8.10. Now, the question arises whether the creation of the regulatory asset is in the interest of the distribution company and the consumers. The respondent no. 1 will have to raise debt to meet its revenue shortfall for meeting its O&M expenses, power purchase costs and system augmentation works. It is not understood how the respondent no. 1 will service its debts when no recovery of the regulatory asset and carrying cost has been allowed in the ARR. Thus, the respondent no. 1 will suffer with cash flow problem affecting its operations and power procurement which will also have an adverse effect on maintaining a reliable power supply to the consumers. Thus, creation of the regulatory asset will neither be in the interest of the respondent no. 1 nor the consumers.”2.1.441 Order No. 3 dated 31-07-2010 had extensively discussed the reasons for the accumulated losses of the utility as already discussed in the Chapter 1-Introduction. The losses of TNEB have accumulated over a period of more than ten years. While the load has been growing continuously, the capacity addition has not kept pace with the increasing demand. Consequently power was purchased from the market. The tariff has not kept pace with the increase in costs with tariff revisions only in 2003 and then in 2010. The gap up to the unbundling of the TNEB on 1-11-2010 is Rs. 17207.30 Crore. Thereafter the revenue gap up to 31st March 2013 is Rs. Rs. 34503.32 Crore. The Commission had expressed a view earlier that the accumulated losses up to the date of unbundling will have to be dealt with in accordance with Para 5.4.3 of the Naional Elelctricity Policy and Tariff Policy. The provisions of the National Electrcity Policy and Tariff Policy envisages that the gap at the time of unbundling will have to be sorted out by financial restructuring and support from the Government rather than passing on the accumulated losses to the successor entities. The intention of the Tariff Policy is to allow the unbundled utilities to start on a clean slate. Accordingly, this Commission leaves the matter of the accumulated losses up to the date of unbundling for resolution by the Government of Tamil Nadu. The Commission’s suggestion to Government of Tamil Nadu in this regard is that such restructuring of successor entities should not result in increase in tariff to consumers. The TANGEDCO and TANTRANSCO have also not claimed any relief of account of accumulated losses prior to unbundling on 1-11-2010 in this tariff petition.76 | P a g e
    • 2.1.442 After the date of unbundling i.e., with effect from 01-11-2010 and up to the end of this control period i.e. up to 31-3-2013, the proposed revenue gap is Rs. 34503.32 Crore. Out of this the proposal of TANGEDCO is to raise additional revenue to the extent of Rs. 9,741.01 Crore by raising the tariff. The uncovered deficit is still Rs. 24762.31 Crore. The proposal of TANGEDCO is to create Regulatory Asset for this uncovered deficit. The Commission is concerned with creation of such a large Regulatory Asset especially when the same is to be amortized during the next three to five years. Even if there is no other change in the tariff, the regulatory asset alone would be required to be serviced at Rs. 5,000 to 6,000 Crore every year for the next three to five years. Such an arrangement may not be workable as the tariffs would become very high and may not really be necessary subsequent to the amortization of the Regulatory Asset. A practical view needs to be taken to handle this grave situation. Two Committees constituted by Government of India are going through these issues. The Shunglu Committee has already submitted its report. The report of the Chaturvedi Committee is awaited. The Commission is of the view that the short term borrowings which have been resorted to by the two utilities should be converted into long term borrowings with appropriate moratorium periods. Support of the State / Central Governments are also required to be assessed in dealing with the Regulatory Assets. The Commission would therefore like to obtain the view of the Government of Tamil Nadu in this regard. The Commission has addressed the Government of Tamil Nadu on 16-03-2012 on this issue as enclosed Annexure VIII. Capacity Addition2.1.443 The Commission has considered energy from all available sources including upcoming Generating Stations during FY 2012-13. The details of energy available during FY 2012- 13 have been elaborated in the Chapter on Energy Availability in this Tariff Order.2.1.444 Basin Bridge GTPS (BBGTPS) is a peaking Station in which Naptha is used as fuel. Since the cost of generation for BBGTPS is high, the Commission has considered the PLF as approved in the last Tariff Order for FY 2012-13.2.1.445 The Commission has considered the following capacity addition while calculating energy availability during FY 2012-13: Name of the Generation Commercial OperationSl. No. Capacity in MW Station Date 1 North Chennai TPS Unit I 600 October, 201277 | P a g e
    • Name of the Generation Commercial OperationSl. No. Capacity in MW Station Date 2 North Chennai TPS Unit II 600 June, 2012 Vallur TPS (JV of TNEB 3 and NTPC) - Unit I 500 March, 2012 - Unit II 500 February, 2013 - Unit III 500 (Allocation from this station to Tamil Nadu is 1075 MW) 300 MW by March 2012; 4 Mettur TPS Stage III 600 300 MW by June 2012 Nevyeli Lignite 250 MW by March 2012 Corporation TS Expansion 5 2 x 250 and 250 MW by II Unit 1 &2 (Allocation to September 2012 Tamil Nadu is 195.5 MW) MAPS Additional PFBR 6 Kalpakkam (Allocation of 500 500 MW by May 2012 142 MW to Tamil Nadu)2.1.446 The Commission observes that there are time-over-runs in Capacity Addition. However all upcoming Generating Stations are expected to be commissioned during FY 2012-13 and has been considered by the Commission for estimating energy availability. Power Purchase2.1.447 The Commission in this Tariff Order has considered the power purchase quantum and cost on the basis of Merit Order Despatch according to the variable cost of various power plants.2.1.448 The Commission has elaborated the details of power purchase allowed from FY 2010-11 to FY 2012-13 in the chapter of Power Purchase Cost.2.1.449 As regard to earmarking power from Pycara and Kundah small Hydro stations to agriculture sector, the Commission is of the opinion that the tariff is determined for all the categories on the basis of the consolidated ARR which is arrived after determination of various components including power purchase cost as well.2.1.450 The Commission appreciates the concern of the objectors regarding huge quantum being purchased from Open Market. The Commission has given specific directive in this regard78 | P a g e
    • under which TANGEDCO is required to take prior approval from the Commission if the power purchase quantum and cost from Traders is expected to exceed the specified quantum and cost for FY 2012-13 in this Order. Quality of Supply:2.1.451 The concern expressed by various consumers with regard to the quality of supply is very relevant. The Commission has already notified the Standards of Performance Regulations, which stipulate the quality of supply levels to be maintained by the Utility. While overall standards may be maintained by the Utility, it is quite possible that some chronic problems may exist in the system. TANGEDCO should take adequate efforts to attend to these problems.2.1.452 The common problems expressed by the consumers include low voltage, overloading and burning of transformers, cable failures, load shedding etc.2.1.453 While load shedding is directly related to the availability of power and the ability of TANGEDCO to purchase power at high cost, the other issues are technical in nature and will need investment in improving last mile connectivity.2.1.454 The distribution planning to be done by the TANGEDCO, duly taking into account the requirements of Supply Code, Distribution Code etc. would go a long way in improving the quality of supply.2.1.455 The Commission believes that TANGEDCO has its own in-house guidelines with regard to operation and maintenance of distribution system. Adequate transformation ratio will have to be created depending on the requirement.2.1.456 HT/LT ratio needs to be improved.2.1.457 The distribution transformers are to be metered to get the profile of the voltage, down time as well as the energy. Normally load on transformers should be limited to the extent of 80% of the rated capacity to prevent failures.2.1.458 The cables should be properly selected to prevent overloading and frequent failures. The voltage at the tail end needs to be monitored at regular intervals. Proactive action on the79 | P a g e
    • part of TANGEDCO will go a long way in reducing the consumers’ complaints and improving their satisfaction.2.1.459 Erection procedure and safety requirements as per section 53 of Electricity Act, 2003 should be followed in letter and spirit.2.1.460 As far as consumers are concerned, these complaints could be taken up with the Utility directly and in the absence of corrective action by TANGEDCO, the issue could be taken up with the Consumer Grievance Redressal Forum (CGRF) for Redressal of grievances. In case the consumer is not satisfied with the Order of CGRF, an appeal could be preferred to the Ombudsman. The Regulations relating to CGRF and Ombudsman could be referred from the website of the Commission. Cost to Serve, Average Cost of Supply and Cross Subsidy:2.1.461 These are inter-related issues. The provisions regarding these three items are extensively covered in the Order of Hon’ble Appellate Tribunal of Electricity dated 11th January 2012 in Appeal Nos. 57 of 2008, 155 of 2007, 125 of 2008, 45 of 2010, 40 of 2010, 196 of 2009, 199 of 2009, 163 of 2010, 6 of 2011 and 144 of 2010. Para 40 of the said order is relevant and is extracted below. “17. Section 61(g) of the 2003 Act stipulates that the tariff should progressively reflect the cost of supply and cross subsidies should be reduced within the time period specified by the State Commission. The Tariff Policy stipulates the target for achieving this objective latest by the end of year 2010-11, such that the tariffs are within ± 20% of the average cost of supply. In this connection, it would be worthwhile to examine the original provision of the Section 61(g). The original provision of Section 61(g) “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 Appropriate Commission” was replaced by “the tariff progressively reflects the cost of supply of electricity and also reduces cross subsidies in the manner specified by the Appropriate Commission” by an amendment under Electricity (Amendment) Act, 2007 w.e.f. 15.6.2007. Thus the intention of the Parliament in amending the above provisions of the Act by removing provision for elimination of cross subsidies appears to be that the cross subsidies may be reduced but may not have to be eliminated. The tariff should progressively reflect the cost of supply but at the same time the cross subsidy, though may be reduced, may not be80 | P a g e
    • eliminated. If strict commercial principles are followed, then the tariffs have to be based on the cost to supply a consumer category. However, it is not the intent of the Act after the amendment in the year 2007 (Act 26 of 2007) that the tariff should be the mirror image of the cost of supply of electricity to a category of consumer. 18. Section 62(2) provides for the factors on which the tariffs of the various consumers can be differentiated. Some of these factors like load factor, power factor, voltage, total electricity consumption during any specified period or time or geographical position also affects the cost of supply to the consumer. Due weightage can be given in the tariffs to these factor to differentiate the tariffs. 19. The National Electricity Policy provides for reducing the cross subsidies progressively and gradually. The gradual reduction is envisaged to avoid tariff shock to the subsidized categories of consumers. It also provides for subsidized tariff for consumers below poverty line for minimum level of support. Cross subsidy for such categories of consumers has to be necessarily provided by the subsidizing consumers. 20. The Tariff Policy clearly stipulates that for achieving the objective, the State Commission has not been able to establish that the tariff progressively reflects the cost of supply of electricity, latest by the end of the year 2010-11, the tariffs should be within ±20% of the average cost of supply, for which the State Commission would notify a road-map. The road map would also have intermediate milestones for reduction of cross subsidy. 21. According to the Tariff Regulation 7 (c) (iii) of the State Commission the cross subsidy has to be computed as difference between cost-to-serve a category of consumer and average tariff realization of that category. 22. after cogent reading of all the above provisions of the Act, the Policy and the Regulations we infer the following: i) The cross subsidy for a consumer category is the difference between cost to serve that category of consumers and average tariff realization of that category of consumers. While the cross-subsidies have to be reduced progressively and gradually to avoid tariff shock to the subsidized categories, the cross-subsidies may not be eliminated.81 | P a g e
    • ii) The tariff for different categories of consumer may progressively reflect the cost of electricity to the consumer category but may not be a mirror image of cost to supply to the respective consumer categories. iii) Tariff for consumers below the poverty line will be at least 50% of the average cost of supply. iv) The tariffs should be within ±20% of the average cost of supply by the end of 2010-11 to achieve the objective that the tariff progressively reflects the cost of supply of electricity. v) The cross subsidies may gradually be reduced but should not be increased for a category of subsidizing consumer. vi) The tariffs can be differentiated according to the consumer’s load factor, power factor, voltage, total consumption of electricity during specified period or the time or the geographical location, the nature of supply and the purpose for which electricity is required. Thus, if the cross subsidy calculated on the basis of cost of supply to the consumer category is not increased but reduced gradually, the tariff of consumer categories is within ±20% of the average cost of supply except the consumers below the poverty line, tariffs of different categories of consumers are differentiated only according to the factors given in Section 62(3) and there is no tariff shock to any category of consumer, no prejudice would have been caused to any category of consumers with regard to the issues of cross subsidy and cost of supply raised in this appeal.” “29. The State Commission has indicated in the impugned order that the voltage- wise cost determination is the first step in determining the consumer-wise cost of supply but has expressed difficulties in determination of voltage-wise cost of supply due to non-segregation of costs incurred by the licensee related to different voltage levels and determination of technical and commercial losses at different voltage levels due to non-availability of meters. The State Commission has also noted that the data submitted by the distribution licensee does not have technical or commercial data support.82 | P a g e
    • 30. It is regretted that even after six years of formation of the Regulations data for the distribution losses. The position of metering in the distribution system of respondent no. 2 is pathetic. Only about 1/4th of 11 KV feeders have been metered and very small numbers of transformers have been provided with meters. Only 68% of the consumer meters are functional in the distribution system as indicated in Table-37 of the impugned order. It is also noticed that a large number of meters are old electro mechanical meter which are not functioning. This is in contravention to Section 55 of the Act. Section 55(1) specifies that no licensee shall supply electricity after the expiry of two years from the appointed data, except through installation of a correct meter in accordance with the Regulations of the Central Electricity Authority. According to Section 55(2) meters have to be provided for the purpose of accounting and audit. According to Section 8.2.1 (2) of the Tariff Policy, the State Commission has to undertake independent assessment of baseline data for various parameters for every distribution circle of the licensee and this exercise should be completed by March, 2007. In our opinion the State Commission can not be a silent spectator to the violation of the provisions of the Act. In view of large scale installation of meters, the State Commission should immediately direct the distribution licensee to submit a capital scheme for installation of consumer and energy audit meters including replacement of defective energy meters with the correct meters within a reasonable time schedule to be decided by the State Commission. The State Commission may ensure that the meters are installed by the distribution licensee according to the approved metering scheme and the specified schedule. In the meantime, the State Commission should institute system studies for the distribution system with the available load data to assess the technical distribution losses at different voltage levels. 31. We appreciate that the determination of cost of supply to different categories of consumers is a difficult exercise in view of non-availability of metering data and segregation of the network costs. However, it will not be prudent to wait indefinitely for availability of the entire data and it would be advisable to initiate a simple formulation which could take into account the major cost element to a great extent reflect the cost of supply. There is no need to make distinction between the distribution charges of identical consumers connected at different nodes in the distribution network. It would be adequate to determine the voltage-wise cost of supply taking into account the major cost element which would be applicable to all83 | P a g e
    • the categories of consumers connected to the same voltage level at different locations in the distribution system. Since the State Commission has expressed difficulties in determining voltage wise cost of supply, we would like to give necessary directions in this regard. 32. Ideally, the network costs can be split into the partial costs of the different voltage level and the cost of supply at a particular voltage level is the cost at that voltage level and upstream network. However, in the absence of segregated network costs, it would be prudent to work out the voltage-wise cost of supply taking into account the distribution losses at different voltage levels as a first major step in the right direction. As power purchase cost is a major component of the tariff, apportioning the power purchase cost at different voltage levels taking into account the distribution losses at the relevant voltage level and the upstream system will facilitate determination of voltage wise cost of supply, thoughnot very accurate, but a simple and practical method to reflect the actual cost of supply. 33. The technical distribution system losses in the distribution network can be assessed by carrying out system studies based on the available load data. Some difficulty might be faced in reflecting the entire distribution system at 11 KV and 0.4 KV due to vastness of data. This could be simplified by carrying out field studies with representative feeders of the various consumer mix prevailing in the distribution system. However, the actual distribution losses allowed in the ARR which include the commercial losses will be more than the technical losses determined by the system studies. Therefore, the difference between the losses allowed in the ARR and that determined by the system studies may have to be apportioned to different voltage levels in proportion to the annual gross energy consumption at the respective voltage level. The annual gross energy consumption at a voltage level will be the sum of energy consumption of all consumer categories connected at that voltage plus the technical distribution losses corresponding to that voltage level as worked out by system studies. In this manner, the total losses allowed in the ARR can be apportioned to different voltage levels including the EHT consumers directly connected to the transmission system of GRIDCO. The cost of supply of the appellant’s category who are connected to the 220/132 KV voltage may have zero technical losses but will have a component of apportioned distribution losses due to difference between the loss level allowed in ARR (which includes84 | P a g e
    • commercial losses) and the technical losses determined by the system studies, which they have to bear as consumers of the distribution licensee. 34. Thus Power Purchase Cost which is the major component of tariff can be segregated for different voltage levels taking into account the transmission and distribution losses, both commercial and technical, for the relevant voltage level and upstream system. As segregated network costs are not available, all the other costs such as Return on Equity, Interest on Loan, depreciation, interest on working capital and O&M costs can be pooled and apportioned equitably, on pro-rata basis, to all the voltage levels including the appellant’s category to determine the cost of supply. Segregating Power Purchase cost taking into account voltage-wise transmission and distribution losses will be a major step in the right direction for determining the actual cost of supply to various consumer categories. All consumer categories connected to the same voltage will have the same cost of supply. Further, refinements in formulation for cost of supply can be done gradually when more data is available.”2.1.462 The judgment of the Apex Court regarding the withdrawl of Cross subsidy for West Bengal Electricity Regulatory Commission (WBERC) Vs. West Bengal High Court and CESC Ltd. was prior to the Electricity Act 2003. The judgment was issued on 03-10- 2002. Hence, the directions of Electricity Act 2003 and Electricity (Amendment) Act 2003 with effect from 15-6-2007 would be applicable which says: “Section 39. (State Transmission Utility and functions): … Provided further that such surcharge and cross subsidies shall be progressively reduced in the manner as may be specified by the State Commission”2.1.463 Cost to Serve, Average Cost of Supply and Cross Subsidy are also discussed extensively in the above referred Order of the Hon’ble Appellate Tribunal of Electricity in paragraphs, 36, 37, 38 and 39. The Hon’ble Appellate Tribunal of Electricity had expressed the opinion that consequent to the Electricity (Amendment) Act 2003 with effect from 15-6-2007, elimination of cross subsidy has been omitted which implies that the tariff for a particular category of consumers need not be the mirror image of cost to serve. Provisions of Tariff Policy envisage that the tariff for various categories of consumers shall be within +/- 20% of the average cost of service. A conjoint reading of85 | P a g e
    • the Electricity Act 2003 after the amendment in the year 2007 with the other provisions of the Act as well as the Tariff Policy, the intent of the Act seems to be that the tariff need not be the mirror image of the cost of supply of electricity to a category of consumers. The applicable portion of the Judgment which is contained in para 22 of the decision of the Hon’ble Appellate Tribunal of Electricity in Appeals No. 102, 103 and 112 of 2010 rendered on 30th May 2011 is extracted below: “22. After cogent reading of all the above provisions of the Act, the Policy and the Regulations we infer the following: i. The cross subsidy for a consumer category is the difference between cost to serve that category of consumers and average tariff realization of that category of consumers. While the cross-subsidies have to be reduced progressively and gradually to avoid tariff shock to the subsidized categories, the cross-subsidies may not be eliminated. ii. The tariff for different categories of consumer may progressively reflect the cost of electricity to the consumer category but may not be a mirror image of cost to supply to the respective consumer categories. iii. Tariff for consumers below the poverty line will be at least 50% of the average cost of supply. iv. The tariffs should be within ±20% of the average cost of supply by the end of 2010- 11 to achieve the objective that the tariff progressively reflects the cost of supply of electricity. v. The cross subsidies may gradually be reduced but should not be increased for a category of subsidizing consumer. vi. The tariffs can be differentiated according to the consumer’s load factor, power factor, voltage, total consumption of electricity during specified period or the time or the geographical location, the nature of supply and the purpose for which electricity is required. Thus, if the cross subsidy calculated on the basis of cost of supply to the consumer category is not increased but reduced gradually, the tariff of consumer categories is within ±20% of the average cost of supply except the consumers below the poverty line, tariffs of different categories of consumers are differentiated only according to the factors given in Section 62(3) and there is no tariff shock to any category of consumer, no prejudice would have been caused to any category of consumers with regard to the issues of cross subsidy and cost of supply raised in this appeal.86 | P a g e
    • “29. The State Commission has indicated in the impugned order that the voltage-wise cost determination is the first step in determining the consumer-wise cost of supply but has expressed difficulties in determination of voltage-wise cost of supply due to non- segregation of costs incurred by the licensee related to different voltage levels and determination of technical and commercial losses at different voltage levels due to non- availability of meters. The State Commission has also noted that the data submitted by the distribution licensee does not have technical or commercial data support.” (1) From the above it can be seen that the following are the tests for deciding the tariff in compliance of the Electricity Act, Tariff Policy and Regulations of the Commission. 1. The Cost of service for each category of consumer will have to be worked out separately. 2. The cross subsidy should be going down from year to year. 3. The tariff fixed for various categories should be within +/- 20% of the average cost of service. 4. Tariff need not be a mirror image of cost to supply to the respective consumer categories. 5. Tariff for different categories of consumers are differentiated only according to the factors give in Section 62(3). 6. There is no tariff shock to any category of consumer. (2) If the above are carried out and the tariff decided accordingly, no prejudice would have been caused to any category of consumers with regard to the issues of cross- subsidy and cost of supply. Renewable Energy2.1.464 Banking of wind energy and related issues are not under the purview of existing tariff determination process. Power Supply2.1.465 The Commission recognizes the power cuts for the HT industry under Restriction & Control (R&C) which were specified by Government of Tamil Nadu by the policy directives in letter Ms. 121 Energy dated 22-10-2008, as below: “4.2.2. Present R&C Measures:87 | P a g e
    • 20% cut on base Demand & Energy for HT Industrial and Commercial Services from 10.05.2011. (Partially relaxed for willing HT consumers with effect from 08.08.2011 up to September 2011 during 22:00 Hours to 05.00 Hours using Wind energy).” The Commission in its Order M.P. no. 15 of 2011 dated 22-03-2012, regarding lifting of R&C measures has stated that: “Normal Hours: The load relief available corresponding to 40% restriction is 800 MW. With the commissioning of every 400 MW capacity, 200 MW relief shall be provided during the normal hours i.e. R & C measures shall be reduced to 30% from 40% with addition of 400 MW installed capacity. 10% additional relief in R & C will be provided with the capacity addition of 400 MW of conventional power capacity. Thus the entire restriction and control measures during the normal hours shall stand lifted when 1600 MW of conventional capacity is added to the Tamil Nadu Electricity System. Evening Peak Hours: 90% restriction as existing today provides a relief of 700 to 800 MWs. With commissioning of every 400 MW of conventional capacity, 200 MW relief shall be provided in the restriction and control during evening peak hours. In effect, with the addition of 1600 MW of additional conventional power generation, the entire R & C measures of 90% during evening peak hours shall stand withdrawn. In this arrangement, the consumers who own captive generation, both wind and other types of generation, would get the relief earlier during the wind season commencing from May onwards. The Commission believes that this will be a fair approach to lifting R & C measures for HT consumers both industrial and commercial. This arrangement would also be providing some relief to other consumers who face load shedding. The expectations of new consumers who are waiting in the queue for new connections could also be satisfied to some extent.”2.1.466 As regards to uninterrupted power supply, the Commission directs TANGEDCO to maintain quality of supply as specified in Tamil Nadu Electricity Distribution Standards of Performance Regulations dated 21-07-2004 in which it is specified that “3. Quality of Service Quality of service means providing uninterrupted, reliable electric supply at stipulated voltage and frequency, which will be the end result of its planning, designing of network, operation and service management to ensure stability in supply and prompt compliance of consumers’ complaints on metering and billing. The supply with88 | P a g e
    • frequent power failure, fuse of calls, voltage fluctuations will not ensure continuity in supply. These factors determine the degree of satisfaction of the consumers.” Also, the Commission feels that if the capacity addition would be on time, as discussed in later chapters, the power supply situation should improve. Demand Side Management, Energy Efficiency2.1.467 Demand Side Management is an effective tool to meet the demand – supply position in the short term. Being a cheaper option, it helps in meeting the demand as compared to capacity addition. Also, it enables to reduce the carbon emission and defers the investment to subsequent years.2.1.468 It is necessary to create awareness among users for promoting Energy Conservation and Demand Side Management.2.1.469 TANGEDCO should motivate the domestic and agriculture sector to adopt DSM measures. Awareness has to be created for using Star Labelled Appliances which may cost more but would pay back by way of energy saving.2.1.470 TANGEDCO is suggested to submit relevant schemes for implementing DSM and Energy Efficiency schemes to the Commission.2.1.471 Use of CFLs should be encouraged with adequate arrangement for disposal of unserviceable CFLs. Metering and Energy Audit2.1.472 Section 55 of the Electricity Act envisages that all connections shall be energised through a correct meter. The relationship between Utility and the Consumer is through the meter. The specification of meters has already been laid down by Regulations of the Central Electricity Authority (CEA) in accordance with the Act. The Commission in its last Tariff Order No. 3 of 2010 dated 31-07-2010 had directed TANGEDCO to submit a time bound program for 100% metering which was not submitted within the time frame of six months. This should be submitted within 3 months of the issue of this Order.2.1.473 TANGEDCO should implement SCADA/ data management system which will enable carrying out Energy Audit and Demand Side Management. The Commission in its last89 | P a g e
    • Tariff Order has asked TANGEDCO to submit the Study for Assessment of Transmission & Distribution (T&D) Losses. TANGEDCO should submit the study so as to properly assess the power purchase to be allowed for an estimated sales projection.2.1.474 As regards to the metering of huts, the Commission is of the view that hut consumption should be metered. Metering should be done as otherwise it distorts the subsidy payments.2.1.475 TANGEDCO should provide sub meters with AMR facility and additional modems to the commercial and industrial consumers. This would help in bringing down the loss levels. APDRP funds should be utilized properly for this purpose.2.1.476 The Commission observes that feeder level metering and DT metering has not been 100% achieved as directed by the Commission in its Tariff Order dated 31-07-2010. The Commission also considers the consumption of unmetered Agriculture services based on scientific sampling for this Order. The study report of Anna University on Transmission & Distribution losses shall be submitted to the Commmission upto 30th November 2012.2.1.477 The Regulation issued by the CEA envisages installation of Static Meters for all consumers. The Static meters will help in reduction of tampering, identifying various parameters, downloading of data, introduction of time of the day tariff etc. besides reducing billing errors. Tariff categorization2.1.478 Tariff categorization is dealt with in detail within the tariff schedule.2.1.479 In this context, quite a few consumers have been representing before the Commission during the Public Hearings, stating that they are not undertaking any “commercial” activity or activities for making “profit” within their premises, and hence, they should not be classified under the “commercial” category. It is clarified that the Commercial category actually refers to all “non-residential, non-industrial” purpose, or which has not been classified under any other specific category. For instance, all office establishments (whether Government or private), hospitals, educational institutions, airports, bus-stands, multiplexes, shopping malls, small and big stores, automobile showrooms, etc., are all covered under this categorisation, since they cannot be termed as residential or industrial.90 | P a g e
    • 2.1.480 The Commission issued a clarificatory Order no. 3-1 of 2010 dated 08-11-2010 where in the Commission clarified various categories of services which are covered under each group of Information Technology services.2.1.481 Health care service providers have referred to a Supreme Court judgement in 2005 which states that health care providers should not be treated as commercial entities. The Commission has perused the judgement and observes that the judgement relates to the occupation carried on by individual professionals such as doctors, lawyers, chartered accountants in their individual capacity and not for nursing homes/hospitals.2.1.482 As regards submission by different consumers for creation of new categories is to protect their own interest, the past experience has shown that whenever the Commission created some new categories, the same was challenged on the ground that such creation of new category was neither proposed by the Utility nor the public or the concerned consumer was put to notice. In the result such matters were remanded to the Commission for reconsideration by the concerned Apellate authorities. Hence, in case the distribution licencee feels the justification and necessity for the creation of a new category, then it should submit the necessary data on consumer and consumption pattern and also ensure that the categorisation is in accordance with the criteria for differentiation provided under Section 62(3) of the EA 2003, for the Commissions consideration.2.1.483 A similar impression is conveyed as regards the “Industry” categorisation, with the Commission receiving several representations during and before the Public Hearings, from the AAI, stating that they have also been classified as “industry” for the purpose of taxation and/or other benefits being extended by the Central Government or State Government, and hence, they should also be classified as “industry” for the purpose of tariff determination. In this regard, it is clarified that classification as Industry for tax purposes and other purposes by the Central or State Government shall apply to matters within their jurisdiction and have no bearing on the tariffs determined by the Commission under the EA 2003, and the import of the categorisation under Industry under other specific laws cannot be applied to seek relief under other statutes. Broadly, the categorisation of “Industry” is applicable to such activities, which entail “manufacture”. While appreciating the anxiety of different classes of consumers to reduce their payments on account of use of electricity, the reasonable costs incurred by the Utilities have to be recovered irrespective of the number of consumer categories or the sub-classification considered in accordance with the provisions of Section 62(3) of the EA 2003. The91 | P a g e
    • Commission is of the view that services defined under ESMA 1968 do not automatically qualify the consumer to be cateogrized under Industrial category.92 | P a g e
    • 3 ENERGY SALES3.1.1 Tamil Nadu Generation and Distribution Company Limited (TANGEDCO), in its Petition submitted the actual energy sales for various categories during FY 2010-11 and the projection towards FY 2011-12 and FY 2012-13. In this Section, the Commission has analysed the sales and Distribution Loss trajectory from FY 2010-11 to FY 2012-13. On the basis of approved sales and Distribution Loss, the Commission has approved the energy balance. Energy Sales:3.1.2 The Commission in its previous Tariff Order has approved the category-wise energy sales after considering the past trends. The category-wise energy sales approved for FY 2010- 11 to FY 2012-13 are tabulated below: Table 1: Energy Sales for various consumer categories approved in the last Tariff Order (MU) Consumer Sl. No. Tariff FY10 FY 11 FY 12 FY 13 Category I High Tension 1 Industries I 14820 16055 17392 18841 Government 2 Educational II A 970 1034 1102 1175 Institutions etc. Place of Public 3 II B 4 4 4 4 Worship 4 Commercial III 1600 1744 1901 2072 5 Lift Irrigation IV 9 9 9 9 Supply to 6 V Puducherry Sale to Other 7 States Total HT 17403 18846 20408 22101 Low Tension 1 Domestic IA 15535 16282 17065 17886 2 Huts IB 393 411 428 447 3 Bulk Supply IC 3 4 5 6 Public Lighting 4 II A 1540 1581 1625 1669 & Water Supply93 | P a g e
    • Consumer Sl. No. Tariff FY10 FY 11 FY 12 FY 13 Category Government 5 Educational II B 357 386 416 450 Institutions, etc. Places of Public 6 II C 93 98 104 110 Worship Cottage & Micro 7 III A-1 111 117 122 128 Enterprises 8 Power Loom III A-2 822 855 889 924 9 Industries III B 3942 4089 4242 4401 10 Agriculture IV 10976 11206 11436 11666 11 Commercial V 4257 4555 4874 5215 Temporary 12 VI 11 19 33 56 Supply Total LT 38040 39603 41239 42958 Grand Total 55443 58449 61647 650593.1.3 TANGEDCO in its Petition submitted that the load forecast has been done after taking into account the economic growth and other factors that affect electricity consumption in the major categories of load. TANGEDCO further submitted that it has attempted to refine the forecasts in the wake of economic outlook for the State and check that they are consistent with the likely movements of the principle macroeconomic parameters of demand. The basic parameters underlying load forecast by TANGEDCO are: • Sales data up to FY 2010 has been used for analysis • Managing agricultural demand • Rationalization of tariffs which included incentive structure for HT consumers, increase in tariffs at inflationary level for subsidizing categories and increase in tariffs for subsidized categories including agriculture.”3.1.4 TANGEDCO has submitted the following approach for development of the load forecast for each category:a) Domestic or Residential: The domestic load has been expected to grow with the increase in population as well as growth in per capita income. The past trend showed increase of demand in this category. TANGEDCO submitted the growth trend in consumption by domestic consumers as the quality of life increases, thereby increasing energy requirement as well. Also, consumers may shift from Huts category to domestic category.94 | P a g e
    • b) Commercial: The Commercial load is expected to grow again with the increase in population as well as increased spending. Tamil Nadu primarily being to a large extent a service economy, commercial demand growth has been expected to continue growing during the projection period. c) Industrial Load (Low, Medium, High): The Industrial load would depend upon the capital formulation as well as the growth in manufacturing sector. The effect of captive generation has also been a major parameter in determining the future demand growth in industrial HT sector. It further submitted that the past trends have shown small increase YOY growth rate in industrial HT demand, though industrial LT demand has shown reasonable growth. With measures to retain HT clients and neutralize the impact of captive generation, HT demand is expected to grow at a low YOY rate. d) Public Lighting, water works, etc.: The load growth for Public Lighting, Water works etc. has been expected to depend upon the spending of Government for social services. During the past, YOY growth rate has shown a significant increase in load growth. The previous year rates have been taken as an indicative benchmark for projecting growth in this category. e) Agriculture: TANGEDCO has nearly 20 lakh agricultural consumers with a connected load of 103.30 lakh HP. TANGEDCO further estimated an increase of 40000 agricultural connections per year. 3.1.5 Based upon above TANGEDCO in their Petition has projected the sales from FY 2010- 11 to FY 2012-13 for various consumer categories which is tabulated below: Table 2: Energy Sales from FY 2010-11 to FY 2012-13 (MU)S. Category Tariff FY 2010-11 FY 2011-12 FY 2012-13No Estimated Estimated No. of Estimated No. of High Tension No. of Consumpti Consumption Consumer Consumption Consumer Category Consumers on (MU) s (MU) s (MU)1 HT Industries, I-A 5359 16817 5413 19155 5521 21645 Railway2 I-B 21 485 21 494 23 549 Traction Government Educational3 II-A 643 903 643 911 649 929 Institutional Etc. (HT) 95 | P a g e
    • S. Category Tariff FY 2010-11 FY 2011-12 FY 2012-13No Pvt. Educational4 II-B 212 155 212 157 214 163 Institutions etc. Places of Public5 II-C 6 3 6 3 7 3 Worship Commercial and6 III 1470 1906 1544 2211 1621 2498 Other HT Lift irrigation7 IV 12 7 12 8 13 8 and co-ops (HT) Supply to Other8 413 413 425 States Low Tension Category 9 Domestic I-A 15061518 16249 15739286 17550 16445796 1861010 Huts I-B 1420109 350 1519517 385 1625883 424 Defence11 I –C 715 10 794 10 894 13 Colonies etc Public Lighting12 II-A 439348 1597 477722 1709 497216 1942 & water works Government13 Educational II-B 1 42000 219 43050 221 44520 223 Institution Pvt. Educational14 II B-2 74054 149 75905 150 78591 300 Institutions Places of Public15 II-C 131869 98 138462 106 145386 114 Worship (LT) Cottage and16 IIIA(1) 72370 122 79607 125 87568 128 Tiny Industries17 Power Loom IIIA(2) 124026 822 131468 873 139356 92518 Industries III-B 276513 4418 363123 4529 372201 4891 Agriculture &19 Government IV 1922400 10417 1949164 10903 1973528 11546 seed farm Commercial and20 V 2252596 4592 2760421 4914 2870838 5258 Other Temporary21 VI 3450 16 3700 17 4200 18 Supply Total 21848691 59750 23290069 64843 24292341 70342 Consumption 96 | P a g e
    • Commission’s View:3.1.6 The Commission observed the past trends for projection of sales of various consumer categories. The Commission has also studied the methodology adopted by TANGEDCO for projection of various consumer categories. Accordingly the Commission has projected the sales of various consumer categories as detailed below:Sales for Consumer under Metered Categories3.1.7 As regards sales for various consumer categories in FY 2010-11, TANGEDCO has submitted category-wise actual energy sales. In reply to data gaps raised by the Commission, TANGEDCO submitted revised Form-19 on March 6, 2012. The Commission observed that the energy sales on account of various consumer categories during FY 2010-11 were also revised by TANGEDCO. Since this is the latest submission of TANGEDCO, the Commission has considered the revised sales for all metered categories as submitted in revised Form-19.3.1.8 For FY 2011-12, TANGEDCO in reply dated March 4, 2012 to data gaps raised by the Commission submitted the category-wise actual energy sales for first ten months, i.e., from April 2011 to January 2012 and projections for next two months, i.e., February 2012 and March 2012. Since TANGEDCO has submitted the actual energy sales for various consumer categories during first ten months and projections for next two months, the Commission has considered the same for all consumer categories except agriculture consumption and Hut Consumption in FY 2011-12.3.1.9 During discussion with TANGEDCO officials on the clarification sought by the Commission on wheeling adjustment amount claimed as a part of power purchase cost, it was observed that the captive consumption through wheeling by various sources like Wind, Cogeneration, Captive Power Plants, etc., are booked under power purchase as well as Sale of power. In reply to data gaps raised by the Commission, TANGEDCO segregated wheeling undertaken for various categories of consumers, which is tabulated below:97 | P a g e
    • Table 3: Energy on account of wheeling (MU) Sales incl. Wheeling Sales excl. Wheeling Wheeling Breakup Category FY 11 FY 12 FY 13 FY 11 FY 12 FY 13 FY 11 FY 12 FY 13 HT I Industry 16817 16718 21707 11968 10338 15707 4849 6380 6000 Pvt HT II Educational 155 232 240 148 221 230 7 11 10 B Inst. etc. HT Commercial 1906 1916 2498 1756 1637 2248 150 279 250 III Total 18878 18867 24445 13872 12197 18185 5006 6670 62603.1.10 Based on detailed analysis of the data submitted by TANGEDCO, the Commission’s observations on treatment of wheeling energy done by TANGEDCO are as under: a. Wind Energy: Quantum of wheeled energy was included in the Power Purchase quantum and added equal quantum of energy in the Sales . For cost part, TANGEDCO has considered at Rs 4/kWh and also deemed revenue from sale of power was included in Form 19. This overstatement of sales on account of wheeling energy led to understatement of T&D loss. The Commission would like to take an illustration to explain its view on this wheeling adjustment practice. For example: The energy consumption of a consumer is 150 MU out of which 50 MU is wheeled back to the Utility. The same consumer raises a credit note of 50 MU and the Utility charges the consumer only for 100 MU, i.e, net of wheeled energy. At the time of ARR, the Utility claims 150 MU out of which 100 MU is direct sales and rest 50 MU is sales on account of wheeling. Similarly in power purchase cost the Utility claims cost pertaining to 150 MU instead of 100 MU. By this method the T&D Loss appears less and at the same time, the Utility is claiming additional revenue on the wheeling sales and power purchase cost on account of wheeled energy. This does not give true picture of sales, power purchase quantum, power purchase cost, revenue and T&D Loss. This adjustment also has an impact on revenue from sale of power where the revenue is also over projected on account of higher sales. b. Cogen, Captive Power Plants and other Wheeling sales: Quantum of wheeled energy was not included in the Power Purchase quantum but TANGEDCO added wheeled quantum98 | P a g e
    • of energy in the Sales. For cost part, TANGEDCO has considered at Rs 4/kWh and shown as a wheeling adjustment in Form 6 of the Petition and also deemed revenue from sale of power considered at Rs 4/kWh was included in Form 19. The Commission found that this inconsistent approach is followed by TANGEDCO for wheeling from Wind and other sources. This overstatement of sales on account of wheeling energy led to understatement of T&D loss. c. No wheeling loss was deducted from wheeled energy injected in the system, which was shown in revised Form 6.3.1.11 Let us also try to understand as to how actually the billing of a wheeling consumer works. Let us take an example of a captive consumer, say a Captive consumer has a requirement of 100 MU in a month and credit that is available to him on part of his own wind generation is say 50 MU after adjusting 5% wheeling loss. In this case, the Utility will raise the bill for the net energy consumed, i.e., 50 MU by the Captive Consumer for that month. However, in this case the TANGEDCO is raising the bill to the captive consumer for 50 MU, but at the same time raising a book entry of deemed revenue for sales of another 50 MU totalling 100 MU. Wheeling is defined in Electricity Act 2003 as under: “Wheeling means the operation whereby the distribution system and associated facilities of a transmission licensee or distribution licensee, as the case may be, are used by another person for the conveyance of electricity on payment of charges to be determined under section 62” As regards Open Access, Section-42 (3) of Electricity Act 2003 states as under: “42 (1)… … (3) Where any person, whose premises are situated within the area of supply of a distribution licensee, (not being a local authority engaged in the business of distribution of electricity before the appointed date) requires a supply of electricity from a generating company or any licensee other than such distribution licensee, such person may, by notice, require the distribution licensee for wheeling such electricity in accordance with regulations made by the State Commission and the duties of the distribution licensee with respect to such supply shall be of a common carrier providing non-discriminatory open access”99 | P a g e
    • 3.1.12 As regards Transmission and Wheeling Charges, the Commission in its Tariff Order (Order No. 1 of 2009) dated March 20, 2009 ruled as under: “8.3 Transmission and Wheeling Charges The transmission and wheeling charges were initially fixed by the TNEB at 2% in 1986 The charges were enhanced to 5% by the TNEB in September 2001. They remained at that level till 2006. The Commission adopted the same rate of 5% towards the transmission and wheeling charges including line losses in order No.3 dated 15-5-2006. The TNEB has now pleaded for stepping up the charges to 15% on the ground that transmission and distribution losses have gone up in the recent years. The transmission and distribution losses of the TNEB has remained static at 18% since 2003 and therefore, the Commission does not see merit in the plea of the TNEB to abruptly raise the charges to 15%. The Commission decides to retain the wheeling and transmission charges including line losses at 5% uniformly for captive use and third party sale of wind energy in the case of HT / EHT consumption. However, the charges in regard to captive use and third party sale in LT services are fixed at 7.5%. “3.1.13 Similarly for Biomass and Cogeneration based power plants, the Commission in its Tariff Order dated April 27, 2009 and May 6, 2009 approved the same line loss of 5% uniformly for captive use and third party sales.3.1.14 For CPP, the actual loss for the injection at 110 kV and drawal at 11 kV is 6.25%. In case of IEX the power is injected into the grid and then drawal is done at 11 kV which results in wheeling loss as 5.5%. Thus wheeling loss should be charged accordingly.3.1.15 The Commission is of the view that the inclusion of energy on account of captive consumption through wheeling in sales and power purchase is not correct and should be treated in kind.3.1.16 The Commission has considered the quantum which was submitted by TANGEDCO on account of wheeled energy by Wind, Biomass, Cogen, Captive Power Plants and has applied 5% wheeling as an illustration in absence of proper segregation of data regarding wheeled energy included in Power Purchase and Sales. Once the segregated data is made available by TANGEDCO, the Commission will consider the same. The Commission directs TANGEDCO to submit the detailed segregation of wheeled energy included in power purchase and sales in next Tariff determination process.100 | P a g e
    • 3.1.17 The wheeled energy which has been deducted by the Commission from energy sales in FY 2010-11 and FY 2011-12 has been tabulated as under: Table 4: Wheeled Energy included in sales (MU) S. No Particulars Units FY 11 FY 12 FY 13 Quantum on account of wheeling of cogeneration, biomass 1 MU 946 1073 1218 CPP etc. 2 Quantum on account of wheeling of Wind Energy MU 3169 3942 4141 Quantum on account of wheeling of Open Access 3 MU 892 1654 900 Consumers, Reliability Power & TPS 4 Total Quantum on account of wheeling MU 5006 6670 6260 5 Wheeling loss % 5% 5% 5% 6 Total sales on account of wheeling MU 4756 6337 59473.1.18 The Commission has further divided the sales on account of wheeling as shown in the above table in the ratio submitted by TANGEDCO for the identified consumer categories. The wheeled energy as deducted by the Commission from the consumer categories identified by TANGEDCO is tabulated below: Table 5: Sales deducted on account of wheeling from various Consumer Categories (MU) Wheeling Sales Category FY 11 FY 12 HTI A Industry 4607 6061 HT II B Pvt Educational Inst. etc. 6.65 10 HT III Commercial 143 265 Total 4756 63373.1.19 The Commission has deducted the above energy from the sales approved for respective consumer categories in FY 2010-11 and FY 2011-12.3.1.20 The energy sales for various consumer categories as approved by the Commission in this Order for FY 2010-11 and FY 2011-12 is tabulated below:101 | P a g e
    • Table 6: Energy sales approved for FY 2010-11 and FY 2011-12 (MU) TANGEDCO Actuals Commission Particulars 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 HT Category I-A Industries 16817 19155 16817 16718 12210 10657 I-B Railway Traction 485 494 485 654 485 654 Govt. Educational Instns. II-A 903 882 Etc. 903 911 903 882 II-B Pvt Educational Inst. etc. 155 157 155 232 148 222 II-C Place of Worship 3 3 3 5 3 5 III Commercial 1906 2211 1906 1916 1763 1651 IV Lift Irrigation 7 8 7 6 7 6 Supply to Puducherry and V Other States 413 413 LT Category I-A Domestic 16249 17550 16309 17428 16309 17428 I-C LT bulk supply 10 10 10 11 10 11 Public Lighting and Water 1603 1614 II-A Supply 1597 1709 1603 1614 Govt. & Govt. Aided 84 127 II-B-1 Education Instns. Etc. 219 221 84* 127 II-B-2 Private College etc. 149 150 150 254 150 254 IIC Places of Pub. Worship 98 106 99 102 99 102 IIIA 1 Cottage and Tiny Industries 122 125 123 123 123 123 IIIA 2 Power Looms 822 873 824 730 824 730 IIIB L.T. Industries 4418 4529 4435 4015 4435 4015 V L.T. Commercial 4592 4914 4598 4514 4598 4514 VI Temporary supply 16 17 17 20 17 20*Private Educational Institutions were earlier categorised along with Government Educational Institutions underRecognised Educational Institutions. The Commission vide its Order No. 3 of 2010 recategorised PrivateEducational Institutions separately.There may be some abnormality in booking sales under these categories duringFY 2010-11. The Commission has considered sales submitted by TANGEDCO in Form-19 submitted on March 17,2012 for the purpose of approval of sales in FY 2010-11 and FY 2011-12 and projection of sales in FY 2012-13.3.1.21 As regards sales for various metered consumer categories in FY 2012-13, the Commission has worked out 5 year CAGR, 3 year CAGR and Y-O-Y growth rate which is tabulated as under:102 | P a g e
    • Table 7: Growth rates for HT Categories on the basis of actual sales in previous years (MU) Y on Y 5 Year 3 Year Consumer Category FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 Growth CAGR CAGR Rate HT I- Industries 11423 13879 15434 14219 14468 16817* 10.94% 5.88% 19.59% A HT I- Railway 485 B Traction Govt. HT Educational 731 815 872 871 954 903 9.68% 10.15% 10.89% II-A Institutions** Private HT Educational 155 II-B Institutions, etc. HT Place of - 2 2 2 3 4 3 10.67% 0.00% II-C Worship 26.83% HT Commercial 1070 1231 1408 1433 1600 1906 15.53% 15.33% 19.13% III HT - - Lift Irrigation 5 7 9 9 8 7 6.48% IV 11.81% 12.50% Other HT Supply/Supply - - HT V to Puducherry 897 603 576 685 413 15.32% 39.68% and Other States* FY 11 Sales considered after including sales on account of Railway Traction** FY 11 Sales considered after including sales on account of Private Educational Institutions, Cinema,Studio etc.Table 8: Growth rates for LT Categories on the basis of actual sales in previous years (MU) Y on Y 5 Year 3 Year Consumer Category FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 Growth CAGR CAGR Rate LT I- Domestic 11051 12033 12575 13603 15361 16309 10.22% 9.50% 6.17% A LT I- LT bulk 2 3 3 12 10 10 49.53% -8.71% -4.75% C supply Public LT Lighting and 1179 1295 973 1285 1494 1603 7.98% 11.69% 7.26% II-A Water Supply LT Government II-B- Educational 283 314 335 595 509 84 -26.19% -37.29% -54.03% 1 Institutions103 | P a g e
    • Y on Y 5 Year 3 Year Consumer Category FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 Growth CAGR CAGR Rate LT Private II-B- Educational 150 2 Instt. Etc. LT Places of 49 60 68 80 91 99 19.22% 11.24% 8.78% IIC Pub. Worship LT Cottage and IIIA Tiny 242 260 264 574 605 123 -15.56% -53.71% -79.67% 1 Industries LT Power IIIA 578 643 672 743 805 824 9.29% 5.31% 2.32% Looms 2 LT L.T. 3921 4454 4585 3750 3979 4435 3.13% 8.75% 11.47% IIIB Industries L.T. LT V 2897 3467 3720 3690 4137 4598 12.24% 11.38% 11.14% Commercial LT Temporary 11 11 11 39 35 17 11.50% -33.98% -50.73% VI supply3.1.22 The Commission has adopted the following methodology for calculation of energy sales in FY 2012-13: Methodology adopted for HT Categories: a. Category-HT I-A (Industries): Since there is negative growth in the approved energy sales due to R&C measures, Power Cuts and wheeled sales in FY 2011-12 on account of this category, the Commission has applied 5 Year CAGR, i.e., 10.94% (as shown in Table-3) considering FY 2010-11 as the base year. b. Category-HT I-B (Railway Traction): Since this category was a part of HT I-A Category up to FY 2009-10, the Commission has adopted the same percentage, i.e., 10.94% as calculated in the case of Category-HT I-A on the sales approved for FY 2011-12. c. Category-HT II-A (Government Educational Institutions): The Commission observed that there is negative growth in the approved sales of this category in FY 2011-12. This is due to the change in categorisation of consumers from Recognised Educational Institutions to two different consumer categories, i.e., Government and Private Educational Institutions. Therfore, the Commission has not considered any increase in the sales of this category. d. Category-HT II-B (Private Educational Institutes etc.): The Commission observed that there is substantial growth in this category in FY 2011-12. This is due to adding104 | P a g e
    • of all recognised Institutions in Private Educational Institutions which were earlier grouped in HT-II A. Therefore the Commission has considered 5 year CAGR on the basis of past data for projecting the sales for this category in FY 2012-13. e. Category-HT II-C (Place of worship): The Commission observed that there has not been significant growth in sales of this category from FY 2005-06 to FY 2011-12. Therefore, the Commission has not considered any increase in this category. f. Category-HT III (Commercial): The Commission has considered 5 year CAGR on the basis of past data for projecting the sales for this category in FY 2012-13. g. Category-HT IV (Lift Irrigation): The Commission observed there has not been significant growth in sales of this category from FY 2005-06 to FY 2011-12. Therefore, the Commission has not considered any increase in this category. h. Category-HT V (Supply to Puducherry and other States): The Commission has not considered the sales on account of this category, based on the rulings of the Commission in its previous Tariff Order dated July 31, 2010. Methodology adopted for LT Categories: a. Category-LT I-A (Domestic): For this category, the Commission has calculated the average of y-o-y increase in last 5 years in the number of consumers. The Commission has further applied this average on FY 2010-11 to arrive at the number of consumers in FY 2011-12. The Commission has further applied the same percentage on number of consumers in FY 2011-12 to arrive at number of consumers in FY 2012-13. Based upon the sales approved for this category in FY 2011-12 in this Tariff Order, the Commission has calculated the specific consumption. The Commission has calculated the energy sales on account of this category in FY 2012- 13 by multiplying the specific consumption in FY 2011-12 with the number of consumers calculated for FY 2012-13. The energy sales for LT I-A (Domestic) as calculated by the Commission is tabulated below: Table 9: Energy Sales for LT I-A (Domestic) in FY 2012-13 (MU) Avg.Particulars 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 Inc.No. of 11974293 12948941 13726048 13788042 14401239 15061518 15773164 16518436ConsumersConsumption 11052 12033 12575 13603 15361 16309 17428 18252(MU) 105 | P a g e
    • Avg.Particulars 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 Inc.% Increasein 4.49 8.14 6.00 0.45 4.45 4.58 4.72 4.72 4.72Consumers% Increasein 14.23 8.88 4.50 8.17 12.92 6.17ConsumptionSpecificConsumption 923 929 916 987 1067 1083 1105 1105(kWh/Annum) b. Category-LT I-C (LT Bulk Supply): The Commission observed there has not been significant growth in sales of this category from FY 2008-09 to FY 2011-12. Therefore, the Commission has not considered any increase in this category. c. Category-LT II-A (Public Lighting and Water Supply): The Commission has applied y-o-y percentage increase, i.e., 0.68% in the sales approved for FY 2011-12 over sales approved for FY 2010-11 considering FY 2011-12 as the base year. d. Category-LT II-B-1 (Government & Government Aided Educational Institutions): The Commission observed there has been negative growth in the approved sales of this category due to re-categorisation. . Therefore, the Commission has not considered any increase in this category. e. Category-LT II-B-2 (Private College): The Commission observed there has been sudden increase in the sales on account of this category due to re-categorisation. Therefore, the Commission has not considered any increase in this category. f. Category-LT IIIA-1 (Cottage and Tiny Industries): The Commission has adopted the percentage increase equal to the percentage increase as considered by TANGEDCO for projection of sales for this category in FY 2012-13 over sales projected in FY 2011-12. . g. Category-LT IIIA-2 (Power Looms): The Commission observed that there has been negative growth in the approved sales of this category due to R&C measures. Therefore, the Commission has not considered any increase in this category. h. Category-LT-III B (Industries): The Commission observed that there has been negative growth in the approved sales of this category due to re-categorisation. Therefore, the Commission has not considered any increase in this category. i. Category-LT V (LT Commercial): The Commission has considered 5 year CAGR, i.e., 12.24% as shown in Table-5 on the basis of past sales data for projecting the sales for this category in FY 2012-13. 106 | P a g e
    • i. Category-LT VI (Temporary Supply): The Commission observed there has not been significant growth in sales of this category from FY 2010-11 to FY 2011-12. Therefore, the Commission has not considered any increase in this category.3.1.23 The energy sales calculated by the Commission for various metered categories in FY 2012-13 are tabulated below: Table 10: Energy Sales calculated for various metered categories in FY 2012-13 (MU) Particulars TANGEDCO Commission HT Category I-A Industries 21645 13545 I-B Railway Traction 549 726 II-A Govt. & Govt. Aided Educational Instns. Etc. 929 882 II-B Pvt Educational Inst. etc. 163 243 II-C Place of Worship 3 5 III Commercial 2498 1908 IV Lift Irrigation 8 6 V Supply to Puducherry and Other States 425 LT Category I-A Domestic 18603 18252 I-C LT bulk supply 11 11 II-A Public Lighting and Water Supply 1829 1625 II-B-1 Govt. & Govt. Aided Education Instns. Etc. 223 127 II-B-2 Private Educational Instt. Etc. 152 254 IIC Places of Pub. Worship 114 102 IIIA 1 Cottage and Tiny Industries 128 126 IIIA 2 Power Looms 925 730 IIIB L.T. Industries 4891 4015 V L.T. Commercial 5258 5066 VI Temporary supply 18 20Methodology adopted for Unmetered Categories:3.1.24 The Commission observed that there are two unmetered categories, i.e., Huts and Agriculture . The Commission has adopted the following methodology for calculation of sales on account of unmetered categories: a. Category-LT I-B (Huts): In reply to data gaps raised by the Commission, TANGEDCO submitted the revised details towards the category of Huts from FY107 | P a g e
    • 2010-11 to FY 2012-13. The Commission has accepted the revised submission of TANGEDCO towards the category of Huts in FY 2010-11. As regards the consumption of Hut services in FY 2011-12 and FY 2012-13, the Commission observed that TANGEDCO has furnished calculations towards energy projection on account of Huts Category on the basis of certain assumptions. The Commission observed that the assumptions made by TANGEDCO are not in conformity with Government Order (G.O.).Ms. No.2 dated 03-06-2011 issued by GoTN. Therefore the Commission has recalculated the consumption based on the details available in the above said G.O. The load details and the duration of running hours per day for fan, mixie and grinder furnished by TANGEDCO are 80, 800 and 200 Watts and 12, 0.5 and 2 hours respectively. However the label of the GoTN depicts 61, 550 and 300 watts for fan, mixie and grinder respectively. The Commission has further considered the wattage as considered by the GoTN and the duration as provided by TANGEDCO. The Commission has considered the lighting load of 11 Watts (CFL) for new hut service and running hours of 6 Hours per day. Energy sales on account of Huts Category as calculated by the Commission are tabulated below: Table 11: Hut Consumption for FY 2011-12 and FY 2012-13 FY 2011-12 No. of Connected Load Energy Description Huts (KW) (MU) Present consumption of energy by all Hut 1476351 113940 403 services No. of consumers supplied with Fan, Mixie and 201687 Grinder in 2011-12 Fan 12303 27 Mixie 110928 10 Grinder 60506 22 Total Consumption for 2011-12 462 FY 2012-13 No. of Connected Load Energy Description Huts (KW) (MU) Number of Huts at the beginning of the year 1476351 297677 521 Addition of new Hut services in 2012-13 27000 297 0.33 Total Hut services at the end of year 1503351 No. of consumers supplied with Fan, Mixie and 201687 Grinder in 2011-12108 | P a g e
    • No. of Connected Load Energy Description Huts (KW) (MU) Number of Huts at the beginning of the year 1476351 297677 521 No. of consumers supplied with Fan, Mixie and 325416 Grinder in 2012-13 Fan 19850 43 Mixie 178979 16 Grinder 97625 36 Total Consumption for 2012-13 617 GOTN has programmed to distribute Fan, Mixie and Grinder during 2011-12 to 25 Lakh families out of 1.83 Crore beneficiary families. Accordingly, number of hut beneficiaries has been calculated based on the total number of hut services during 2011-12. The balance hut services are split across 4 years period from FY 2012-13 to FY 2015-16. b. Category-LT IV (Agriculture Consumption): The Commission has recalculated the energy sales on account of Agriculture Consumption. The Commission observed discrepancy in the data regarding number of agriculture service connections submitted by TANGEDCO in Form-19 annexed along with the Petition. In reply to data gaps raised by the Commission, TANGEDCO revised the number of agriculture service connections along with the connected load at the end of respective years. Further, the Commission vide its letter dated September 8, 2011 directed TANGEDCO to conduct a sample study for proper estimation of agricultural consumption. The Commission had also directed to estimate T&D losses scientifically and such study shall be reflected in their tariff petition so as to calculate the power purchase correctly. In response to the data gap raised, TANGEDCO submitted the methodology adopted for arriving at the agricultural consumption and line loss as below: “The agricultural consumption is calculated every month based on the sample meter reading furnished by the field in the absence of 100 % metering. The sample meters to a value of 5 % are provided/ available in each area/circle in which readings are taken every month by the field staff. As sample meter readings are available in each area/circlewise on monthly basis, the areawise geographical condition and seasonal condition are taken care for arriving at109 | P a g e
    • computed consumption. This calculated agricultural consumption in each area/circles are combined /added to arrive at the total agricultural consumption in the State. Since 5 % sample meters are available in each and every area/circle and the readings are taken in all the sample meters every month by the field staff, the computed consumption of the total agricultural consumption in the State based on sample meter readings is a reasonable and scientific agricultural consumption data. However Anna University has already been appointed for suggesting a suitable scientific methodology for arriving at the agricultural consumption in Tamil Nadu in the absence of 100 % metering. The agricultural consumption thus computed for 2010-11, based on the actual sample meter readings taken from the field is enclosed herewith. For the year 2011-12, the same is arrived with the actual sample meter readings received from the field for the period up to December 2011 and projected for the balance period of three months. Similarly, for the year 2012-13, the projected values are enclosed considering the addition of new agricultural services proposed to be effected during that period.” In another query raised by the Commission, the average consumption of agriculture consumers was submitted by TANGEDCO. The Commission for the purpose of calculation of sales on account of Agriculture Consumption has referred to the revised data submitted by TANGEDCO in reply to data gaps. However, the Commission has capped specific consumption for FY 2012-13 at 951 kWh/HP/Annum based on actuals of FY 2011-12.The Commission has calculated the average capacity of pumpset at the middle of the year by dividing the connected load at the middle of the year by number of service connections on account of agriculture consumption at the middle of the year. The Commission has further multiplied the average capacity of pumpset, the revised average specific consumption on account of agriculture consumers and number of service connections at the middle of the year. The sales on account of agriculture consumption approved in the Order the Commission from FY 2010-11 to FY 2012-13 is tabulated below:110 | P a g e
    • Table 12: Sales approved by the Commission for Agriculture Consumption (MU) S. No Details FY 2010-11 FY 2011-12 FY 2012-13 1 No. of Service Connection 1999237 2029237 2069237 No. of Service Connection at 2 1962091 2014237 2049237 the Middle of the Year Connected Load in HP at the 3 10872018 11036118 11254918 end of the year Connected Load in HP at the 4 10734318 10954068 11145518 middle of the year Average capacity of the 5 pumpset in HP at the middle 5.47 5.44 5.44 of the year (4/2) Average Consumption in 6 kWh/HP/Annum arrived 896.08 951.10 951.10 from sample study Consumption in MU 7 9618.8 10418.4 10600.5 (2x5x6)3.1.25 On the basis of above discussion the Category-wise energy sales as calculated by the Commission is tabulated below:Table 13: Category-wise energy sales approved by the Commission (MU) TANGEDCO Commission Particulars 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 HT Category I-A Industries 16817 19155 21645 12210 10657 13545 I-B Railway Traction 485 494 549 485 654 726 Govt. & Govt. Aided II-A Educational Instns. Etc. 903 911 929 903 882 882 II-B Pvt Educational Inst. etc. 155 157 163 148 222 243 II-C Place of Worship 3 3 3 3 5 5 III Commercial 1906 2211 2498 1763 1651 1908 IV Lift Irrigation 7 8 8 7 6 6 Supply to Puducherry V and Other States 413 413 425 Total HT 20689 23352 26220 15520 14078 17315 LT Category111 | P a g e
    • TANGEDCO Commission Particulars 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 I-A Domestic 16249 17550 18603 16309 17428 18252 I-B Huts 350 385 424 355 462 617 I-C LT bulk supply 10 10 11 10 11 11 Public Lighting and II-A Water Supply 1597 1709 1829 1603 1614 1625 II- Govt. & Govt. Aided B-1 Education Instns. Etc. 219 221 223 84 127 127 II- Private Educational Instt. B-2 Etc. 149 150 152 150 254 254 IIC Places of Pub. Worship 98 106 114 99 102 102 IIIA Cottage and Tiny 1 Industries 122 125 128 123 123 126 IIIA 2 Power Looms 822 873 925 824 730 730 IIIB L.T. Industries 4418 4529 4891 4435 4015 4015 IV L.T. Agriculture 10417 10903 11546 9619 10418 10601 V L.T. Commercial 4592 4914 5258 4598 4514 5066 VI Temporary supply 16 17 18 17 20 20 Total LT 39059 41492 44122 38226 39819 41546 Grand Total 59750 64844 70342 53746 53897 588613.1.26 With lifting of R&C, if sales increases for industrial consumers, the licensee’s revenue as well as Power Purchase Cost will increase without creating much of gap especially with the Power Purchase Cost adjustment which is already built in this Order. T&D Loss:3.1.27 The Commission in its previous Tariff Order approved y-o-y reduction of 0.4% in T&D loss from FY 2008-09 onwards. The Commission fixed the T&D loss of 18% in FY 2009-10.Table 14: T&D Loss approved by the Commission Particulars 2009-10 2010-11 2011-12 2012-13 Loss level in % 18 17.6 17.2 16.8112 | P a g e
    • 3.1.28 The Commission further ruled that in case the licensee achieves a loss at a level less than the target, he may retain 50% of the gain out of the loss reduction and the balance 50% will be passed to the consumers as per Regulation 3 (ix) of MYT Regulations.3.1.29 TANGEDCO submitted that the energy balance for the current year and ensuing financial year has been formulated after considering all the factors relating to demand and energy requirement. TANGEDCO submitted the T&D loss which has been calculated on the basis of energy input into the system and total output from the system for the year 2009- 10 and 2010-11 and as per balance sheet, AT&C loss has been adopted for the year 2011- 12 and 2012-13.3.1.30 TANGEDCO further submitted that as on 30.06.2011 only 45.35% of the total Distribution Transformers (DTs) havebeen metered.3.1.31 TANGEDCO also submitted that in order to arrive at proper estimate of AT&C loss and T&D loss as a pilot study with the above arrangement in Gopi, Bhavani, Sathya mangalam (UA) under R-APDRP scheme, modems in the DT meters have been fixed to enable the Automatic Meter Reading (AMR) facility. The DT meters would be connected to the data center through necessary hardware and software. On completion of pilot project, and Data capturing, the Energy Accounting/ Auditing could be completed in the pilot area. Based on that sample data, AT&C loss can be evaluated for the pilot area.3.1.32 TANGEDCO submitted that it has approached Anna University for scientific measurement of T&D loss and measurement of unmetered Agricultural consumption. This exercise is under progress.3.1.33 TANGEDCO has listed some other initiatives taken to reduce losses to the maximum extent possible which are as under: • Reduction of HT: LT ratio by erecting more High Tension lines and erecting new DT. • Establishment of new substations. • Strengthening of HT line conductors • Installation of HT shunt capacitors at substation end • Installation of LT fixed capacitors at LT side of DT • Erection of link lines & Re-routing of feeders113 | P a g e
    • 3.1.34 The T&D loss for FY 2009-10 and AT&C Loss for FY 2010-11 and FY 2011-12 as submitted by TANGEDCO in its Petition are tabulated as under:Table 15: T&D Loss as submitted by TANGEDCO from FY 2010-11 to FY 2012-13 Particulars 2010-11 2011-12 2012-13 Total sales (MU) 59750 64843 70342 Energy Loss in the system 12762 15349 16222 (MU) AT&C loss % 17.60% (T&D) 19.14% 18.74%Commission’s View:3.1.35 The Commission observed that TANGEDCO has not submitted T&D loss for FY 2011- 12 and FY 2012-13 in its Petition but the same was submitted later. Since the actual energy available during FY 2010-11 and first ten months of FY 2011-12 has been submitted by TANGEDCO, the Commission has re-estimated the T&D loss on the basis of energy sales from FY 2010-11 to FY 2011-12 and the energy available during FY 2010-11 and FY 2011-12 approved by the Commission in this Order.3.1.36 As regards FY 2012-13, the Commission has maintained the T&D loss, i.e., 16.80% approved for FY 2012-13 in the previous Tariff Order. The Commission has grossed up the total sales approved for FY 2012-13 by the T&D loss approved for FY 2012-13 in order to arrive at energy requirement during FY 2012-13.3.1.37 Energy Consumption on account of Kadamparai Pump Mode: The Commission observed that energy is required for the purpose of Pumping in Kadamparai. The Commission is of the view that the energy requirement on account of Pumping in Kadamparai is also met through the energy available during respective year. The Commission obtained the details of actual net energy generation and the energy consumed for the purpose of pumping in Kadamparai in FY 2010-11 and FY 2011-12 which are tabulated below:Table 16: Data submitted by TANGEDCO for Kadamparai (MU) Particulars Reference FY 2010-11 FY 2011-12 Kadamparai-Gen A 568 489 Kadamparai-Pump Mode B 612 508 Net Energy Required C=A-B (43) (19)114 | P a g e
    • 3.1.38 Based upon the data submitted by TANGEDCO, the Commission has considered the net difference between the net generation of Kadamparai and energy consumed for the purpose of pumping in Kadamparai as the differential energy required for Kadamparai Pump Mode during respective years. For FY 2012-13, the Commission has considered the average of differential energy calculated for FY 2010-11 and FY 2011-12.3.1.39 The T&D loss computed by the Commission from FY 2010-11 to FY 2012-13 is tabulated below:Table 17: T&D Loss computed by the Commission TANGEDCO Commission Particulars Units FY 11 FY 12 FY 13 FY 11 FY 12 FY 13 Sales MU 59750 64844 70342 53746 53897 58861 Differential Energy required MU 0 0 0 43 19 31 for KDM Pump Mode* Total Energy MU 59750 64844 70342 53789 53916 58892 consumption T&D Loss** % 17.60% 19.14% 18.74% 21.78% 22.13% 16.80% T&D Loss MU 12762 15349 16222 14981 15324 11892 Total Energy MU 72512 80193 86564 68770 69240 70784 Requirement*Difference between net energy generated by Kadamparai and energy required for Pumping**TANGEDCO submitted T&D Loss for FY 2010-11 and then AT&C for FY 2011-12 and FY 2012-133.1.40 As shown above the Commission has arrived at the energy requirement of 70784 MU in FY 2012-13. The Commission has considered this quantum for Merit Order Ranking in Order to decide the sources from which power is required to be purchased by TANGEDCO in FY 2012-13. However due to the delays in schedule of commissioning of the upcoming power stations MOD may get distorted and some more stations may get despatched.3.1.41 The Commission observed that the actual/revised T&D loss for FY 2010-11 and FY 2011-12 is 21.78% and 22.13% as compared to 17.60% and 17.20% approved by the Commission in its previous Tariff Order. The Commission has discussed the additional cost incurred by TANGEDCO on this account in Power Purchase chapter, later in this Order.115 | P a g e
    • 3.1.42 As regards the pilot study being conducted by TANGEDCO, the Commission is of the view that based upon the success of the same, it may be extended to the remaining areas.3.1.43 The Commission directs TANGEDCO to complete the exercise being done by TANGEDCO for accurate measurement of T&D Loss and unmetered agricultural consumption before October 31, 2012 and submit the findings before the Commission before December 1, 2012.116 | P a g e
    • 4 Energy Availability4.1.1 Tamil Nadu Generation and Distribution Company Limited (TANGEDCO), in its Petition submitted the expenses towards its Generation and Distribution activities from FY 2010-11 to FY 2012-13 based on the actual energy available and various expenses incurred during FY 2010-11 and FY 2011-12 (First Half (H1)). For FY 2011-12 (Second Half (H2)) and FY 2012-13, TANGEDCO projected the availability and expenses on account of various heads on the basis of certain assumptions and past trends.4.1.2 The Commission in its Order dated July 31, 2010 (Order No. 3 of 2010) determined the performance norms and expenses for various Generating Stations of TANGEDCO. Accordingly the Commission in this Section has analysed the performance and expenses on various heads for the Generation Business of TANGEDCO from FY 2010-11 to FY 2012-13 in accordance with TNERC (Terms and Conditions for determination of Tariff) Regulations, 2005.4.1.3 The energy availability of various own Generating Stations have been discussed in this section in the Order given below: 1. Thermal Power Stations 2. Gas Turbine Power Stations 3. Hydel Generation 4. Wind Generation 5. Other Sources Thermal Power Stations:4.1.4 Energy Availability mainly depends upon net generation available from the Power Plants. The Net Generation is determined on the basis of Plant Load Factor (PLF) and Auxiliary Consumption which are discussed below: Plant Load Factor4.1.5 Gross Generation of Generating Station depends upon its PLF. The Commission in its Previous Tariff Order calculated the Gross Generation for various Generating Stations on the basis of PLF which is tabulated as under:117 | P a g e
    • Table 18: Plant Load Factor (PLF) approved in Previous Tariff Order S. No Particulars MW FY 2010-11 FY 2011-12 FY 2012-13 1 Ennore TPS 450 50.81% 50.81% 50.81% 2 Tuticorin TPS 1050 90.02% 90.02% 90.02% 3 Mettur TPS 840 91.75% 91.75% 91.75% 4 North Chennai TPS 630 86.79% 86.79% 86.79% 5 NCTPS Stage-II 80% 80% 6 MTPS Stage-III 80% 80%4.1.6 TANGEDCO in its Petition submitted the actual PLF during FY 2010-11. For FY 2011- 12 and FY 2012-13, TANGEDCO projected the PLF for its various Generating Stations. The PLF from FY 2010-11 to FY 2012-13 as submitted by TANGEDCO in its Petition is tabulated as under: Table 19: Plant Load Factor (PLF) submitted in Petition S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 Ennore TPS 35.42% 29.04% 20.28% 2 Tuticorin TPS 77.33% 79.79% 82.25% 3 Mettur TPS 82.42% 92.70% 89.01% 4 North Chennai TPS 81.74% 91.70% 86.17%4.1.7 TANGEDO in its Petition has also projected net generation from new station, i.e., MTPS (Stage-III) during FY 2011-12. However TANGEDCO has not submitted the gross generation for the same.4.1.8 Similarly for FY 2012-13 TANGEDCO has projected generation from new stations (NCTPS (Stage-II Unit-1 and 2) and MTPS (Stage-III)) but separate PLF for these Units have not been submitted in the Petition and the generation from these Units have been clubbed with the existing Units in its Forms submitted along with the Petition.Commission’s View:4.1.9 As regards Target PLF to be achieved by various Thermal Power Stations, Regulation-37 of TNERC Tariff Regulations, 2005 states as under: “37. Norms of Operation The norms of operation for Thermal Generating Stations shall be as under:118 | P a g e
    • (i) Target Availability for recovery of full capacity (fixed) charges: a) All Thermal Generating Stations in Tamil Nadu except Ennore Thermal Power Generating Station-80% b) Ennore Thermal Power Generating Station (Till Renovation and Modernisation works in all units are completed)-50%. c) In respect of Generating Stations of Independent Power Producers- As per PPA d) New Thermal Stations-80%”4.1.10 The Commission observed that the PLF projected for all Thermal Power Stations (TPS) except Ennore TPS is more than 80%. In reply to the data gaps raised by the Commission regarding lower PLF for Ennore TPS during FY 2010-11, TANGEDCO submitted that all the Units at Ennore TPS have already served their lifetime and on completion of major R&M Works, the above Units of Ennore TPS have served further 5-10 years. TANGEDCO submitted that the Units are proposed to be de-commissioned by 2015-17 in phased manner. TANGEDCO further submitted the reasons for non-availability of various Units of Ennore TPS which are as under: 1. In Unit-I and Unit-II, the load is restricted due to non-availability of UAT, Turbine vibration, wet coal, stones in coal and to minimize oil usage. 2. In Unit-III, the load is restricted due to Chloride Ingress and severe O2 crash problem. 3. In Unit-IV, the load is restricted due to O2 crash, Low vacuum, Turbine vibration due to aged Rotors, etc. 4. In Unit-V, the load is restricted due to partial shaving of LP Rotor blades, RH pressure limit, low condenser vacuum, wet coal, stones in coal.4.1.11 In view of the above reasons submitted by TANGEDCO for lower PLF of Ennore TPS, the Commission has decided to accept the actual PLF in FY 2010-11 for Ennore TPS as a special case. As regards other Thermal Power Stations, the Commission observed that the actual PLF is around 80% in FY 2010-11 and there is considerable difference as compared to the target set by the Commission in last Tariff Order. Since FY 2010-11 is already over and TANGEDCO has submitted the actual PLF for its various generating stations, the Commission has decided to adopt the actual PLF for all Thermal Generating Stations in FY 2010-11. However while allowing capacity charges during FY 2010-11, the Commission has followed Regulation-37 of TNERC Tariff Regulations, 2005 which states as under: “37. Norms of Operation119 | P a g e
    • The norms of operation for the Thermal Generating Stations shall be as under: i. Target availability for recovery of full capacity (fixed) charges a. All Thermal Generating stations in Tamil Nadu except Ennore Thermal Power Generating Station - 80% b. Ennore Thermal Power Generating Station (Till Renovation and Modernization works in all units are completed) – 50% c. In respect of Generating Stations of Independent Power Producers - As per PPA d. New Thermal Stations – 80%”4.1.12 For FY 2011-12 and FY 2012-13, TANGEDCO in reply to data gaps, submitted the detailed annual overhauling and servicing schedule for various Thermal Power Stations in support of its projections towards projection of PLF and gross generation during FY 2011-12 and FY 2012-13.4.1.13 As regards energy availability from Thermal Power Stations in FY 2011-12, the Commission in the data gaps asked TANGEDCO to submit the actual generation up to December 2011 and projections for the next three months, i.e., from January to March 2012. TANGEDCO in its reply submitted actual Gross Generation up to December 2011 and revised projections from January to March 2012 which is tabulated below: Table 20: Revised Projections submitted by TANGEDCO for FY 2011-12 Projections Actual Up to FY 2011-12 S. No Particulars January-March Dec 2011 (MU) (MU) 2012 (MU) 1 Ennore TPS 728 289 1017 2 Tuticorin TPS 5774 2033 7807 3 Mettur TPS 5119 1680 6799 4 North Chennai TPS 3706 1125 48314.1.14 Based on the above data submitted by TANGEDCO, the Commission has calculated the PLF for various Generating Stations which is tabulated below: Table 21: PLF for Generating Stations S. No Particulars FY 2011-12 1 Ennore TPS 25.81% 2 Tuticorin TPS 84.87% 3 Mettur TPS 92.40% 4 North Chennai TPS 87.54%120 | P a g e
    • 4.1.15 The Commission observed that the PLF for all Generating Stations except Ennore TPS are within approved limits in accordance with Regulation-37 of TNERC Tariff Regulations, 2005. Since the above figures of PLF are based on 9 months actuals and 3 months projections, the Commission has decided to consider the above PLF during FY 2011-12. As regards energy availability from MTPS (Stage-III) during FY 2011-12, TANGEDCO has reported Generation of 259 MU for MTPS (Stage-III) for FY 2011-12. The Unit is not yet synchronized. Therefore, the Commission has not considered any generation from MTPS (Stage-III) for FY 2011-12.4.1.16 For FY 2012-13, TANGEDCO in its reply submitted the Unit-wise detailed report on projection of energy availability for Ennore TPS along with the constraints for reduced PLF.4.1.17 The Commission has noted the submission of TANGEDCO regarding the constraints in achieving higher PLF for Ennore TPS and the detailed basis for projection of energy available from Ennore TPS during FY 2012-13. Since this Power Station is to be decommissioned shortly, no major Repair and Maintenance work or capital work is expected to be undertaken. Therefore, the Commission has considered the PLF of 20.28% for Ennore TPS in FY 2012-13 as submitted by TANGEDCO.4.1.18 As regards PLF of Tuticorin and Mettur TPS during FY 2012-13, the Commission has worked out the last five years average PLF, i.e., from FY 2007-08 to FY 2011-12.Table 22: PLF on the basis of last 5 years average 5 Years S. No Particulars FY 08 FY 09 FY 10 FY 11 FY 12 Average Tuticorin 1 86.70% 85.35% 77.91% 77.33% 84.87% 82.43% (TTPS) 2 Mettur (MTPS) 90.94% 87.78% 86.85% 82.42% 92.40% 88.08%121 | P a g e
    • 4.1.19 As regards PLF for TTPS in FY 2012-13, the Commission observed that there was an irregular pattern for past five years. Therefore the Commission has considered average PLF calculated on the basis of last 5 years data.4.1.20 For MTPS, the Commission observed that the PLF projected by TANGEDCO is higher as compared to last 5 years average. Hence for MTPS the Commission has considered the PLF as projected by TANGEDCO in the Petition.4.1.21 For North Chennai TPS, TANGEDCO has reported that the poor PLF for FY 2010-11 is due to the forced shutdown of Unit-1 and Unit-2 for a considerable period on the account of certain specific problems.4.1.22 Therefore for NCTPS the Commission has taken average PLF from FY 2006-07 to FY 2011-12 excluding FY 2010-11. The average PLF on the basis of past trends as computed by the Commission is tabulated below:Table 23: PLF on the basis of last 5 years average 5 Years S. No Particulars FY 07 FY 08 FY 09 FY 10 FY 12 Average North Chennai 1 88.87% 84.38% 86.52% 87.43% 87.54% 86.95% (NCTPS)4.1.23 Therefore, the Commission has decided to adopt the following PLF during FY 2012-13 for various TPS for estimating the energy availability:Table 24: PLF adopted by the Commission for FY 2012-13 Last 5 years S. No Particulars Last Order Petition Commission Average 1 ETPS 50.81% 20.28% 40.00% 20.28% 2 TTPS 90.02% 82.25% 82.43% 82.43% 3 MTPS 91.75% 89.01% 88.08% 89.01% 4 NCTPS 86.79% 86.17% 86.95% 86.95%122 | P a g e
    • 4.1.24 For new upcoming units, i.e., NCTPS (Stage-II, Unit-1 and 2) and MTPS (Stage-III), the Commission has considered PLF as 80% during FY 2012-13 in accordance with Clause- 37 of TNERC Tariff Regulations, 2005. The comparison of PLF as projected by TANGEDCO in the Petition and that approved by the Commission in this Order is tabulated below:Table 25: PLF from FY 2010-11 to FY 2012-13 S. FY 2010-11 FY 2011-12 Particulars Last Last Rev. No Petition Commission Petition Commission Order Order Sub. 1 Ennore TPS 50.81% 35.42% 35.42% 50.81% 29.04% 25.81% 25.81% Tuticorin 77.33% 77.33% 79.79% 2 TPS 90.02% 90.02% 84.87% 84.87% 3 Mettur TPS 91.75% 82.42% 82.42% 91.75% 92.70% 92.40% 92.40% North Chennai 86.79% 81.74% 81.74% 86.79% 91.70% 87.54% 87.54% 4 TPS FY 2012-13 S. No Particulars Last Petition Commission Order 1 Ennore TPS 50.81% 20.28% 20.28% 2 Tuticorin TPS 90.02% 82.25% 82.43% 3 Mettur TPS 91.75% 89.01% 89.01% North Chennai 86.79% 86.17% 86.95% 4 TPS Auxiliary Consumption4.1.25 The Commission in Previous Tariff Order approved the following auxiliary consumption for various stations:Table 26: Auxiliary Consumption approved in Previous Tariff Order Percentage S. No Particulars approved 1 ETPS 8.50%* 2 TTPS 8.50% 3 MTPS 9% 4 NCTPS 8.50% NCTPS Stage- 5 II 8.50% 6 MTPS Stage- 9%123 | P a g e
    • Percentage S. No Particulars approved III* While calculating energy availability in Previous Tariff Order, the Commission considered 14.48% as auxiliaryconsumption based upon average of five years.4.1.26 TANGEDCO in its Petition did not submit the auxiliary consumption for various Generating Stations. However in the Format-7 annexed along with the Petition, TANGEDCO submitted the auxiliary consumption in MU for various generating stations. The auxiliary consumption as submitted in the formats for various Generating Stations is tabulated below:Table 27: Auxiliary Consumption submitted in the Petition (MU) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 Ennore TPS 220 155 131 2 Tuticorin TPS 591 638 669 3 Mettur TPS 516 557 579 4 North Chennai TPS 401 414 406TANGEDCO has clubbed the new generating units during FY 2012-13 (NCTPS (Stage-II Unit-1and 2) and MTPS (Stage-III)) in the existing units of NCTPS and MTPS in its Form-7 of NCTPSand MTPS respectively. Therefore auxiliary consumption percentage for new units during FY2012-13 is not available separately.Commission’s View:The Commission observed that in accordance with Regulation-37 (v) of TNERC TariffRegulations, 2005 the auxiliary consumption is required to be approved as percentage of GrossGeneration. Regulation-37 (v) of TNERC Tariff Regulations, 2005 states as under: “37. Norms of Operation The norms of operation for Thermal Generating Stations shall be as under: … (v) Auxiliary Energy Consumption (a) Coal based generating station With Cooling tower Without Cooling tower (i) 200 MW Series 9.00% 8.50% (ii) 500 MW Series Steam driven Boiler Feed Pumps 7.50% 7.00%124 | P a g e
    • Electrically driven BFPs 9.00% 8.50% …”4.1.27 The Commission has calculated the auxiliary consumption percentage from the gross generation (MU) and auxiliary consumption (MU) submitted by TANGEDCO in the formats annexed along with the Petition. The auxiliary consumption percentage as computed by the Commission based on the PLF% and Auxiliary Consumption (MU) given in the formats annexed along with the Petition is tabulated below:Table 28: Auxiliary Consumption percentage on the basis of formats submitted by TANGEDCO FY 2010-11 FY 2011-12 Gross Aux. Aux. Gross Aux. Aux. S. No Particulars Gen. Con. Con. Gen. Con. Con. MU MU % MU MU % 1 Ennore TPS 1396 220 15.78% 1033 155 15.00% 2 Tuticorin TPS 7113 591 8.31% 7656 638 8.33% 3 Mettur TPS 6065 516 8.51% 6791 557 8.20% 4 North Chennai TPS 4511 401 8.89% 5035 414 8.22% FY 2012-13 S. No Particulars Gross Gen. Aux. Con. Aux. Con. MU MU % 1 Ennore TPS 799 131 16.39% 2 Tuticorin TPS 7565 669 8.84% 3 Mettur TPS 6550 579 8.84% 4 North Chennai TPS 4756 406 8.54%4.1.28 As regards Auxiliary Consumption in FY 2010-11, the Commission believes that TANGEDCO has submitted actual auxiliary consumption for various power stations as FY 2010-11 is already over. Therefore the Commission has accepted the actual auxiliary consumption for all Thermal Power Stations for the purpose of energy availability.4.1.29 As regards FY 2011-12, the Commission in the data gaps asked TANGEDCO to submit the actual generation up to December 2011 and projections for the next three months, i.e., from January to March 2012. TANGEDCO in its reply dated January 25, 2012 submitted125 | P a g e
    • actual auxiliary consumption% along with the Gross generation up to December 2011 and projections from January to March 2012.4.1.30 Subsequently, TANGEDCO vide its letter dated March 4, 2012 resubmitted the net generation for FY 2011-12 for all of its generating stations based upon 10 months actual, i.e., from April 2011 to January 2012 and 2 months projections, i.e., February 2012 to March 2012. The Commission observed that the net generation for various Thermal generating stations resubmitted by TANGEDCO on March 4, 2012, i.e., 18724 MU is different as compared to the data earlier submitted on January 25, 2012, i.e., 18685 MU.4.1.31 Since there is difference between the net generation for various Thermal Power Stations submitted by TANGEDCO, the Commission has considered the latest submission of TANGEDCO for arriving at net energy availability during FY 2011-12. The Commission observed that TANGEDCO in its latest submission did not submit gross generation. The Commission has calculated the auxiliary consumption on the basis of the PLF approved for various Thermal Power Stations for FY 2011-12 in this Order and the net generation submitted by TANGEDCO in its latest submission dated March 4, 2012. The auxiliary consumption as calculated for FY 2011-12 is tabulated below:Table 29: Auxiliary consumption percentage as computed for FY 2011-12 Gross Net Auxiliary Auxiliary Particulars Generation Generation Consumption Consumption % (MU) (MU) (MU) Ennore (ETPS) 1017 851 166 16.32% Tuticorin (TTPS) 7807 7018 789 10.11% Mettur (MTPS) 6799 6234 565 8.31% North Chennai 4831 4621 210 4.35% (NCTPS) Total 20454 18724 1730* On the basis of revised gross generation submitted by TANGEDCO vide letter dated January 25, 2012 and netgeneration submitted submitted by TANGEDCO vide letter dated March 4, 2012 However the auxiliaryconsumption of North Chennai TPS does not seem to be realistic and TANGEDCO is required to check-up thedetails.4.1.32 As regards FY 2012-13, the Commission has considered the auxiliary consumption for all Thermal Power Stations (including new stations) except Ennore TPS in accordance with norms mentioned in Regulation-37 (v) of TNERC Tariff Regulations. For Ennore TPS, the Commission observed that TANGEDCO submitted that all the Units at Ennore TPS have already served their lifetime and on completion of major R&M Works, the Units of126 | P a g e
    • Ennore TPS have served further 5-10 years. TANGEDCO submitted that the Units are proposed to be de-commissioned by 2015-17 in phased manner. Hence as a special case, the Commission is approving Auxiliary Consumption of 15% during FY 2012-13. . The auxiliary consumption for various Thermal Power Stations as considered by the Commission for FY 2012-13 is tabulated below:Table 30: Auxiliary Consumption for various TPS in FY 2012-13 S. No Particulars Last Order Petition Commission 1 ETPS 8.50%* 16.39% 15.00% 2 TTPS 8.50% 8.84% 8.50% 3 MTPS 9.00% 8.84% 9.00% 4 NCTPS 8.50% 8.54% 8.50% 5 NCTPS Stage-II** 8.50% 8.54% 8.50% 6 MTPS Stage-III** 9.00% 8.84% 9.00%* While calculating energy availability in Previous Tariff Order, the Commission considered 14.48% as auxiliaryconsumption based upon average of five years.* *Norm for 600 MW is yet to be fixed. The above figures have been considered provisionally.Net Generation4.1.33 On the basis of above discussion, the net generation as submitted by TANGEDCO in its Petition and that computed by the Commission for Coal based Thermal Power Stations in this Tariff Order from FY 2010-11 to FY 2012-13 is tabulated below:Table 31: Net Generation for FY 2010-11 approved by the Commission (MU) FY 2010-11 Particulars Revised S. No Last Year Petition Submission dated Commission Order 4/03/2012 A Existing TPS 1 Ennore TPS 1713 1176 1176 1176 2 Tuticorin TPS 7576 6523 6522 6522 3 Mettur TPS 6143 5549 5549 5549 4 North Chennai TPS 4383 4110 4110 4110 5 Total 19815 17357 17357 17357 B New Cap. Addition NCTPS (Stage-II) (Unit- 1 I) 0 0 0 0 NCTPS (Stage-II) (Unit- 2 2) 0 0 0 0127 | P a g e
    • FY 2010-11 Particulars Revised S. No Last Year Petition Submission dated Commission Order 4/03/2012 3 MTPS Stage-III 0 0 0 0 4 Total 0 0 0 0 C Total TPS (A-5 + B-4) 19815 17357 17357 17357Table 32: Net Generation for FY 2011-12 approved by the Commission (MU) FY 2011-12 S. No Particulars Last Year Revised Submission Petition Commission Order dated 04.03.2012 A Existing TPS 1 Ennore TPS 1713 851 851 851 2 Tuticorin TPS 7576 7018 7018 7018 3 Mettur TPS 6143 6235 6234 6234 4 North Chennai TPS 4383 4621 4621 4621 5 Total 19815 18724 18724 18724 B New Cap. Addition NCTPS (Stage-II) (Unit- 1 I) 2561 0 0 0 NCTPS (Stage-II) (Unit- 2 2) 1276 0 0 0 3 MTPS Stage-III 2547 259 259 4 Total 6384 259 259 0 C Total TPS (A-5 + B-4) 26199 18983 18983 18724* TANGEDCO has reported Generation of 259 MU for MTPS (Stage-III) for FY 2011-12. The Unit has not been synchronized. Therefore, the Commission has not considered the generation from MTPS (Stage-III).Table 33: Net Generation for FY 2012-13 approved by the Commission (MU) FY 2012-13 S. No Particulars Last Year Order Petition Commission A Existing TPS 1 Ennore TPS 1713 1361 680 2 Tuticorin TPS 7576 6896 6938 3 Mettur TPS 6143 5971 5960 4 North Chennai TPS 4383 4184 4391 5 Total 19815 18412 17968 B New Cap. Addition128 | P a g e
    • FY 2012-13 S. No Particulars Last Year Order Petition Commission 1 NCTPS (Stage-II) (Unit-I) 3848 1760 NCTPS (Stage-II) (Unit- 2130 3030 2 2) 3848 3 MTPS Stage-III 3827 3528 3428 4 Total 11523 5658 8218 C Total TPS (A-5 + B-4) 31338 24070 26186* The Commission has considered normative Auxiliary consumption due to which net generation is low.4.1.34 In the letter dated February 28, 2012, TANGEDCO has reported that the Unit-I of NCTPS (Stage-II) will be commissioned during October 2012, Unit-2 of NCTPS (Stage- II) during June 2012. In respect of MTPS (Stage-III), the Unit will be synchronized during March 2012 with the generation of 300 MW and the Unit will reach its full generation of 600 MW during June 2012. Therefore, the generation of above new projects has been calculated accordingly. The generation on account of NCTPS (Stage-II) and MTPS (Stage-III) is tabulated below:Table 34: Generation on account of NCTPS (Stage-III) and MTPS (Stage-III) (MU) Installed Gross Aux. Net Particulars Capacity COD Next FY Days PLF Gen Cons. Gen. (MW) NCTPS (Stage- 600 15-Oct-12 03/31/2013 167 80% 1924 8.50% 1760 II) (Unit-I) NCTPS (Stage- 600 15-Jun-12 03/31/2013 289 80% 3329 8.50% 3030 II) (Unit-2) MTPS Stage-III 300 31-Mar-12 03/31/2013 365 80% 2102 9.00% 1913 MTPS Stage-III 300 15-Jun-12 03/31/2013 289 80% 1665 9.00% 1515 Gas Turbine Power Stations:4.1.35 Energy Availability mainly depends upon net generation available from the Power Plants. The Net Generation is determined on the basis of Plant Load Factor (PLF) and Auxiliary Consumption which are discussed below:129 | P a g e
    • Plant Load Factor4.1.36 Gross Generation of Generating Station depends upon its PLF. The Commission in its Previous Tariff Order determined the Gross Generation for various Generating Stations on the basis of PLF which is tabulated as under: Table 35: Plant Load Factor (PLF) approved in Previous Tariff Order S. No Particulars MW FY 2010-11 FY 2011-12 FY 2012-13 Tirumakottai GTPS 1 107.88 68.75% 68.75% 68.75% (Kovilkalappal) 2 Kuttalam GTPS 101 77.08% 77.08% 77.08% 3 Basin Bridge GTPS 120 5.75% 5.75% 5.75% 4 Valuthur Unit-I 95 71.62% 71.62% 71.62% 5 Valuthur Unit-II 92 78.37% 78.37% 78.37%4.1.37 TANGEDCO in its Petition submitted the actual PLF during FY 2010-11. For FY 2011- 12 and FY 2012-13, TANGEDCO projected the PLF for its various Generating Stations. The PLF from FY 2010-11 to FY 2012-13 as submitted by TANGEDCO in its Petition is tabulated as under: Table 36: Plant Load Factor (PLF) submitted in Petition S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 Tirumakottai GTPS 1 68.74% 69.25% 65.71% (Kovilkalappal) 2 Kuttalam GTPS 19.29% 46.80% 71.20% 3 Basin Bridge GTPS 4.93% 8.63% 11.60% 4 Valuthur Unit-I 67.54% 77.16% 78.50% 5 Valuthur Unit-II 0.00% 57.20% 78.30%4.1.38 TANGEDCO submitted the following reasons for lower PLF of various GTPS in its Petition: a. Kuttalam GTPS: The Unit was shut down from July 18, 2010 to May 26, 2011 due to release of Generator Stator for replacement at Valuthur GTPS. Tirumakottai GTPS: The gas availability was about 70% of the agreed quantity up to May 2011 due to which the plant was under part load. b. Valuthur GTPS-II: Valuthur GTPS-II was re-commissioned on May 7, 2011 after long breakdown from January 9, 2010 due to heavy damages in Gas Turbine rotor. Even after130 | P a g e
    • re-commissioning, full load could not be reached due to vibration problems. The vibration problems were sorted by OEM. The unit was operated in full capacity on August 18, 2011.Commission’s View:4.1.39 In Previous Tariff Order dated July 31, 2010, the Commission set target of around 70% for all GTPS except BBGTPS. The Commission observed that there is significant difference between the actual PLF achieved by various GTPS of TANGEDCO as compared to the target PLF set by the Commission in FY 2010-11.4.1.40 The Commission also observed the justification given by TANGEDCO for lower PLF for its various GTPS during FY 2010-11. In view of the justification given by TANGEDCO, the Commission has decided to consider the PLF as submitted by TANGEDCO for various GTPS in FY 2010-11 in its Petition. However the Commission has allowed the Capacity charges on Pro-rata basis depending upon the Target PLF set in last Tariff Order which has been discussed in the Chapter of Generation Tariff.4.1.41 As regards energy availability from Gas Turbine Power Stations in FY 2011-12, the Commission in the data gaps asked TANGEDCO to submit the actual generation up to December 2011 and projections for the next three months, i.e., from January to March 2012. TANGEDCO in its reply submitted actual Gross Generation up to December 2011 and revised projections from January to March 2012 which is tabulated below: Table 37: Revised Projections submitted by TANGEDCO for FY 2011-12 Projections Actual Up to FY 2011-12 S. No Particulars January-March Dec 2011 (MU) (MU) 2012 (MU) 1 Tirumakottai GTPS ( 519 173 692 Kovilkalappal) 2 Kuttalam GTPS 317 173 490 3 Basin Bridge GTPS 29 15 44 4 Valuthur Unit-I 543 164 707 5 Valuthur Unit-II 294 160 4544.1.42 Based on the above data submitted by TANGEDCO, the PLF for various Generating Stations is tabulated below:131 | P a g e
    • Table 38: PLF for Generating Stations S. No Particulars FY 2011-12 1 Tirumakottai GTPS 64.55% (Kovilkalappal) 2 Kuttalam GTPS 72.45% 3 Basin Bridge GTPS 5.71% 4 Valuthur Unit-I 67.29% 5 Valuthur Unit-II 55.22%4.1.43 Since the above figures are based on 9 months actuals and 3 months projections, the Commission has decided to consider the above PLF for various GTPS of TANGEDCO during FY 2011-12 for arriving at energy availability.4.1.44 For FY 2012-13, the Commission observed that the PLF projected by TANGEDCO for its various GTPS is about 70% except BBGTPS and TGTPS. The Commission has considered the PLF as projected for FY 2012-13 by TANGEDCO in its Petition for Kuttalam GTPS and Valuthur-I and Valuthur-II GTPS. The Commission observed that Basin Bridge GTPS is mainly operated with Naptha (fuel) in order to meet the peak demand. The Commission observed that TANGEDCO has projected PLF of 11.60% for BBGTPS in FY 2012-13 whereas the actual PLF during FY 2010-11 was 4.93%. Therefore the Commission has maintained the PLF of 5.75% as considered for FY 2012- 13 in last Tariff Order.4.1.45 As regards PLF of TGTPS, the Commission observed that the PLF of TGTPS is in the range of 65%-70% and TANGEDCO achieved the actual PLF of 68.74% in FY 2010-11. Therefore, the Commission has considered PLF of 68.75% for TGTPS in FY 2012-13 as approved in Previous Tariff Order. The Commission has decided to adopt the following PLF for various GTPS:Table 39: PLF considered by the Commission for FY 2012-13 S. No Particulars Last Order Petition Commission 1 Kuttalam GTPS 77.08% 71.20% 71.20% 2 Basin Bridge GTPS 5.75% 11.60% 5.75% 3 TGTPS 68.75% 65.71% 68.75% 4 Valuthur GTPS-I 71.62% 78.50% 78.50% 5 Valuthur GTPS-II 78.37% 78.30% 78.30%132 | P a g e
    • Auxiliary Consumption4.1.46 The Commission in Previous Tariff Order approved the following auxiliary consumption for various stations:Table 40: Auxiliary Consumption approved in Previous Tariff Order S. Percentage Particulars No approved 1 Kuttalam GTPS 6% Basin Bridge 2 GTPS 1%* 3 TGTPS 6% 4 Valuthur GTPS-I 6% 5 Valuthur GTPS-II 6%* For the purpose of calculation of energy availability, the auxiliary consumption was taken as 0.58% in PreviousTariff Order.4.1.47 TANGEDCO in its Petition did not submit the auxiliary consumption for various Generating Stations. However in the Format-7 annexed along with the Petition, TANGEDCO submitted the auxiliary consumption in MU for various generating stations. The auxiliary consumption as submitted in the formats for various Generating Stations is tabulated below:Table 41: Auxiliary Consumption submitted in the Petition (MU) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 Tirumakottai GTPS 40 40 40 (Kovilkalappal) 2 Kuttalam GTPS 12 32 40 3 Basin Bridge GTPS 0.32 0.33 1.22 4 Valuthur Unit-I 31 41 41 5 Valuthur Unit-II 18 40Commission’s View:4.1.48 The Commission observed that in accordance with Regulation-37 (v) of TNERC Tariff Regulations, 2005 the auxiliary consumption is required to be approved as percentage of Gross Generation. Regulation-37 (v) of TNERC Tariff Regulations, 2005 states as under: “37. Norms of Operation The norms of operation for Thermal Generating Stations shall be as under: …133 | P a g e
    • (v) Auxiliary Energy Consumption ... (b)Gas-based and Naptha based Generating Stations: (i) Combined Cycle: 3% (ii) Open Cycle: 1% …”4.1.49 However the Commission in its Order dated July 31, 2010 relaxed the norms of auxiliary consumption and permitted auxiliary consumption at 6% for the purpose of using gas booster compressor by TANGEDCO from FY 2010-11 to FY 2012-13.4.1.50 In order to arrive at auxiliary consumption percentage, the Commission relied upon the gross generation (MU) and auxiliary consumption (MU) submitted by TANGEDCO in the formats. The auxiliary consumption percentage as computed by the Commission is tabulated below:Table 42: Auxiliary Consumption percentage on the basis of formats FY 2010-11 FY 2011-12 Gross Aux. Aux. Gross Aux. Aux. S. No Particulars Gen. Con. Con. Gen. Con. Con. MU MU % MU MU % Tirumakottai 1 GTPS 650 40 6.19% 654 40 6.11% (Kovilkalappal) 2 Kuttalam GTPS 171 12 6.83% 414 32 7.73% 3 Basin Bridge GTPS 52 0.32 0.62% 91 0.33 0.36% 4 Valuthur Unit-I 562 31 5.52% 642 41 6.39% 5 Valuthur Unit-II 0 0 0.00% 462 18 3.90% FY 2012-13 S. No Particulars Gross Gen. Aux. Con. Aux. Con. MU MU % Tirumakottai GTPS 1 621 40 6.44% (Kovilkalappal) 2 Kuttalam GTPS 630 40 6.35% 3 Basin Bridge GTPS 122 1.22 1.00% 4 Valuthur Unit-I 653 41 6.28% 5 Valuthur Unit-II 632 40 6.33%134 | P a g e
    • 4.1.51 The Commission observed that the auxiliary consumption for TGTPS and KGTPS in FY 2010-11 is more than the norm approved by the Commission in Previous Tariff Order. In reply to data gaps raised by the Commission regarding justification for high auxiliary consumption, TANGEDCO submitted the following reasons for high auxiliary consumption during FY 2010-11: a. Tirumakottai GTPS: The auxiliary consumption was higher than the norms due to frequent failure of STG because of failure of condenser tubes during FY 2009-10. The generation was also lesser due to inadequate gas supply. b. Kuttalam GTPS: The unit was operated under part load (70-80%) during FY 2011-12. Hence norms could not be achieved.4.1.52 Since FY 2010-11 is already over and TANGEDCO has submitted the actual auxiliary consumption during FY 2010-11 along with the justification for the deviation from the norms approved in Previous Tariff Order in case of TGTPS and KGTPS, the Commission has decided to approve the same for FY 2010-11. However the Commission has allowed the recovery of capacity charges on pro-rata basis as the consumers are already burdened with the high cost of power purchase due to the energy purchased in place of non- availability of own generating stations.4.1.53 As regards FY 2011-12, the Commission in the data gaps asked TANGEDCO to submit the actual generation up to December 2011 and projections for the next three months, i.e., from January to March 2012. TANGEDCO in its reply dated January 25, 2012 submitted actual auxiliary consumption% along with the Gross generation up to December 2011 and projections from January to March 2012.4.1.54 Subsequently, TANGEDCO vide its letter dated March 4, 2012 resubmitted the net generation for FY 2011-12 for all of its generating stations based upon 10 months actual, i.e., from April 2011 to January 2012 and 2 months projections, i.e., February 2012 to March 2012. The Commission observed that the net generation for various Gas Turbine stations resubmitted by TANGEDCO on March 4, 2012 is same as that submitted earlier.4.1.55 The Commission observed that TANGEDCO in its latest submission did not submit gross generation. The Commission has calculated the auxiliary consumption on the basis of the PLF approved for various Gas Turbine Power Stations for FY 2011-12 in this Order and the net generation submitted by TANGEDCO in its latest submission dated135 | P a g e
    • March 4, 2012. The auxiliary consumption as calculated for FY 2011-12 is tabulated below:Table 43: Auxiliary Consumption computed for FY 2011-12 Gross Net Auxiliary Auxiliary Particulars Generation Generation Consumption Consumption % (MU) (MU) (MU) TGTPS 691 650 41 6.00% KGTPS 490 457 33 6.67% BBGTPS 44 44 0.13 0.30% Valuthur Unit-I 707 666 42 5.87% Valuthur Unit-II 454 428 27 5.84% Total 2386 2244 142* On the basis of revised gross generation submitted by TANGEDCO vide letter dated January 25, 2012 and netgeneration submitted submitted by TANGEDCO vide letter dated March 4, 20124.1.56 As regards Auxiliary Consumption of various GTPS in FY 2012-13, the Commission observed that TANGEDCO has projected higher auxiliary consumption for all GTPS. The Commission is of the view that the non-achievement of the targets set by the Commission in respect of various performance parameters does not fulfil the purpose of this exercise. Therefore TANGEDCO should attempt to achieve the performance parameters in accordance with the target set by the Commission. The Commission has already relaxed the norms for auxiliary consumption up to 6% in Previous Tariff Order. The Commission has capped the auxiliary consumption for all GTPS except BBGTPS at 6%.4.1.57 As regards BBGTPS, the Commission observed that TANGEDCO has submitted actual auxiliary consumption during FY 2010-11 and up to December 2011 is 0.62% and 3.43% respectively which seems to be incorrect. In absence of any reliable data from TANGEDCO, the Commission has maintained the auxiliary consumption as 1% in FY 2012-13 as approved in Previous Tariff Order but for the purpose of calculation of energy availability, auxiliary consumption of 3.43% based upon actual up to December 2011 has been considered. Though this power station was established as a peaking power station, in view of prohibitive naptha prices, it is not being operated even during peak hours. The generation from this station is very limited. In view of this the auxiliary consumption also cannot be estimated accurately. This station is being operated as synchronous condenser as facility was available for operating the gas turbines as synchronous condenser. The gas turbine is started and brought upto full speed after which the unit is synchronized with the grid. Thereafter the fuel supply is cut off and the gas turbine slows down and finally gets136 | P a g e
    • decoupled from the generator through the operation of a clutch. The generator continues to be in synchronism with the grid but operates as synchronous condenser. In this process it supplies VAR to system for compensation. It is understood that this kind of operation of Basin Bridge Gas Turbine Station has resulted in improving the voltage profile in the surrounding area and also improved the real power generation of North Chennai TPS. The operation of the Basin Bridge Gas Turbine Station as synchronous condensers will have to be continued to further optimize the VAR Compensation to the system.4.1.58 The auxiliary consumption for various Gas Turbine Power Stations as considered by the Commission for FY 2012-13 is tabulated below:Table 44: Auxiliary Consumption of GTPS in FY 2012-13 S. No Particulars Last Order Petition Commission 1 Kuttalam GTPS 6% 6.35% 6% 2 Basin Bridge GTPS 0.58% 1.00% 3.43% 3 TGTPS 6% 6.44% 6% 4 Valuthur GTPS-I 6% 6.28% 6% 5 Valuthur GTPS-II 6% 6.33% 6% Net Generation4.1.59 On the basis of above discussion, the net generation as submitted by TANGEDCO in its Petition and that computed by the Commission in this Tariff Order for Gas Turbine Power Stations from FY 2010-11 to FY 2012-13 is tabulated below:Table 45: Net Generation for GTPS approved by the Commission in FY 2010-11 (MU) FY 2010-11 S. No Particulars Last Year Revised Submission Petition Commission Order dated 4.03 1 Kuttalan GTPS 641 157 157 157 Basin Bridge 2 GTPS 60 51 52 52 3 TGTPS 610 649 610 610 4 Valuthur GTPS-I 560 531 531 531 5 Valuthur GTPS-II 446 0 6 Total 2317 1388 1349 1349137 | P a g e
    • Table 46: Net Generation for GTPS approved by the Commission in FY 2011-12 (MU) FY 2011-12 S. No Particulars Last Year Revised Submission Petition Commission Order dated 4.03 1 Kuttalan GTPS 641 382 457 457 Basin Bridge 60 90 44 44 2 GTPS 3 TGTPS 615 654 650 650 4 Valuthur GTPS-I 560 601 1093 1093 5 Valuthur GTPS-II 594 444 6 Total 2470 2172 2244 2244Table 47: Net Generation for GTPS approved by the Commission in FY 2012-13 (MU) FY 2012-13 S. No Particulars Last Year Revised Submission Petition Commission Order dated 4.03 1 Kuttalan GTPS 641 590 Not submitted 592 Basin Bridge 60 121 Not submitted 58 2 GTPS 3 T GTPS 581 581 Not submitted 611 4 Valuthur GTPS-I 560 611 Not submitted 614 5 Valuthur GTPS-II 594 592 Not submitted 593 6 Total 2436 2495 2469 Hydel Generation:4.1.60 The Commission in Previous Tariff Order approved the energy availability from hydel generation by considering 25% PLF in accordance with Regulation 76(2) of TNERC Tariff Regulations, 2005. The Commission deducted the energy on account of auxiliary consumption, i.e., 23 MU and consumption by Kadamparai PSHES for pump mode, i.e., 369 MU for arriving at net availability from hydel generation from FY 2010-11 to FY 2012-13. The hydel generation as approved by the Commission from FY 2010-11 to FY 2012-13 in Previous Tariff Order is tabulated below:Table 48: Net Hydel Generation approved in Previous Tariff Order S. No Particulars Units FY 2010-11 FY 2011-12 FY 2012-13 1 Net Hydel Generation MU 4397 4439 4601138 | P a g e
    • 4.1.61 TANGEDCO in its Petition submitted that the Gross Hydel Generation for FY 2010-11 is 5108 MU. However if for reasons beyond control hydel generation is significantly different then it would affect the overall generation as well as purchase requirements and consequently the financial position of board.Table 49: Net Hydel Generation submitted in the Petition S. No Particulars Units FY 2010-11 FY 2011-12 FY 2012-13 1 Net Hydel Generation MU 5085 5561 6025Commission’s View:4.1.62 In reply to data gaps raised by the Commission, TANGEDCO revised the energy available from various Hydel Stations in FY 2010-11 from 5085 MU to 4474 MU. Similarly for FY 2011-12, TANGEDCO revised the energy available from various Hydel Stations in FY 2011-12 from 5561 MU to 4912 MU.4.1.63 In another data gap raised by the Commission, TANGEDCO submitted actual gross generation and auxiliary consumption from various Hydro Power Plants from FY 2001- 02 to FY 2011-12. The Commission observed that consumption by Kadamparai PSHES for pump mode was not excluded from this data. Subsequent to this, the Commission in various discussions held with TANGEDCO officials asked to submit the data for Kadamparai PSHES for pump mode and the gross generation from Kadamparai PSHES. TANGEDCO in reply submitted the data for Kadamparai pump mode from FY 2001-02 to FY 2011-12.4.1.64 From the details related to Kadamparai PSHES Mode as submitted by TANGEDCO, the Commission observed that consumption of Kadamparai Pump Mode is more than the net generation of Kadamparai which is normal in a Pump Storage Power Project. The correct cost of generation as well as the energy required for pumping in Kadamparai power house can be done only if the block-wise UI rates is available both for the generation and pumping of water. In the absence of such data the net energy availability or requirement will be taken into account and appropriate financial treatment will be given.139 | P a g e
    • 4.1.65 Therefore the Commission has considered the net energy available on account of Kadamparai PSHES in FY 2010-11 and FY 2011-12 after adjusting consumption (which is negative) of Kadamparai Pump mode separately in energy requirement table.4.1.66 The hydro generation from FY 2010-11 and FY 2011-12 is tabulated below:Table 50: Hydro Generation (MU) for FY 2010-11 and FY 2011-12 S. No Particulars FY 11 FY 12 Net Hydel Gen. on account 1 of hydro plants excluding 4515 4701 Kadamparai4.1.67 As regards FY 2012-13, the Commission feels that 6025 MU as submitted by TANGEDCO in its Petition is very high. For calculation of net generation from Hydro Power Plants, the Commission has relied upon previous years data. The Commission has observed the previous ten years trend. The Commission observed that the net generation during FY 2002-03 and FY 2003-04 is abnormal as these were draught years having less rainfall, Hence, the Commission has taken last 8 years average, i.e., from FY 2004-05 to FY 2011-12 and considered the same as net hydel generation during FY 2012-13. The net hydel generation on account of existing capacity is tabulated below:Table 51: Net Hydel Generation (MU) Net Hydro Generation Financial S. No on account of hydro Years plants exc. Kadamparai 1 FY 2004-05 4153 2 FY 2005-06 5531 3 FY 2006-07 5849 4 FY 2007-08 5971 5 FY 2008-09 5040 6 FY 2009-10 5122 7 FY 2010-11 4515 8 FY 2011-12 4701 Average 9 hydro 5110 generation140 | P a g e
    • 4.1.68 The Commission observed that TANGEDCO has not projected the hydro generation accurately. Therefore the Commission directs TANGEDCO to project the hydro generation accurately and submit the same within 3 months of the issuance of this Order.4.1.69 In reply to data gaps, TANGEDCO submitted the list of new hydel projects to be commissioned during FY 2012-13 along with the Commissioning dates. The Commission has considered PLF of 25% and auxiliary consumption of 1% for projecting energy availability from new hydel projects. The energy available from the new hydel projects to be commissioned during FY 2012-13 is shown as under:Table 52: Energy Available from New Hydel Projects Installed Particulars COD Next FY Days PLF Aux. Con. Net Gen. Capacity MW % % MU Periyar-II 2.5 01-Apr-12 01/31/2013 305 25% 1% 4.53 Periyar-III 4 01-Jul-12 01/31/2013 214 25% 1% 5.08 Periayr-IV 2.5 01-Jun-12 01/31/2013 244 25% 1% 3.62 BhavaniBarrage-I 10 01-Nov-12 01/31/2013 91 25% 1% 5.41 BhavaniBarrage- 01-Jul-12 01/31/2013 214 25% 1% 12.71 II 10 Bhavani Kattalai- 01-Nov-11* 01/31/2012 365 25% 1% 65.04 II 30 Bhavani Kattalai- 01-Jul-12 01/31/2013 214 25% 19.07 III (Unit-I) 15 1% Bhavani Kattalai- 01-Aug-12 01/31/2013 183 25% 16.31 III (Unit-II) 15 1% Total 89 131.77* It has been assumed that the energy available during FY 12 for this hydel project has been considered byTANGEDCO in revised submission of FY 12.The energy availability from Hydel Generation as approved by the Commission from FY 2010-11 to FY 2012-13 is tabulated below:Table 53: Net Hydel Generation approved by the Commission in FY 2010-11 (MU) FY 2010-11 S. No Particulars Revised Last Year Petition Submission Commission Order dated 4.03.12 A Existing Hydro 4397 5085 4474 4515141 | P a g e
    • Table 54: Net Hydel Generation approved by the Commission in FY 2011-12 (MU) FY 2011-12 S. No Particulars Revised Last Year Petition Submission Commission Order dated 4.03.12 A Existing Hydro 4439 5561 4912 4701Table 55: Net Hydel Generation approved by the Commission in FY 2012-13 (MU) FY 2012-13 S. No Particulars Revised Last Year Petition Submission Commission Order dated 4.03.12 A Existing Hydro 4601 6025 Not Submitted 5110 B New Cap. Addition 0 0 Not Submitted 132 Total Hydro (A + C 4601 6025 5242 B) Wind Generation:4.1.70 The Commission in Previous Tariff Order approved net generation of 10 MU corresponding to 17.55 MW installed capacity of wind mills owned by TNEB.4.1.71 TANGEDCO in its Petition submitted that it has an installed capacity of 17.55 MW which was commissioned during 1990s. The net available energy from Wind Mills from FY 2010-11 as submitted by TANGEDCO is tabulated below:Table 56: Net energy available from Wind from FY 2010-11 to FY 2012-13 S. No Particulars Unit FY 2010-11 FY 2011-12 FY 2012-13 A Wind Generation MU 13 20 21142 | P a g e
    • Commission’s View:4.1.72 In reply to data gaps raised by the Commission, TANGEDCO submitted the actual energy available from Wind Mills during FY 2010-11 and FY 2011-12 as 12.675 MU and 11.314 MU respectively.4.1.73 For FY 2010-11 and FY 2011-12, the Commission has considered the revised submission of TANGEDCO.4.1.74 As regards energy availability from wind mills during FY 2012-13, the Commission has considered the same energy as actually available in FY 2011-12. The energy from wind mills as approved by the Commission from FY 2010-11 to FY 2012-13 in this Tariff Order is tabulated below:Table 57: Energy available from Wind Mills in FY 2010-11 (MU) FY 2010-11 S. No Particulars Last Year Petition Revised Submission Commission Order Wind A 10 13 13 13 GenerationTable 58: Energy available from Wind Mills in FY 2011-12 (MU) FY 2011-12 S. No Particulars Last Year Petition Revised Submission Commission Order Wind A 10 20 11 11 GenerationTable 59: Energy available from Wind Mills in FY 2012-13 (MU) FY 2012-13 S. No Particulars Last Year Revised Submission Petition Commission Order dated 4.03 Wind A 10 21 Not Submitted 11 Generation143 | P a g e
    • Energy Available from Other Sources:4.1.75 TANGEDCO in its Petition has included power purchase quantum from the following sources: 1. Central Generating Stations (CGS) 2. Independent Power Producers (IPPs) 3. Captive/Cogeneration and Non-Conventional energy sources4.1.76 The energy availability from the above mentioned sources as submitted by TANGEDCO and approved by the Commission in this Tariff Order has been discussed in detail. Central Generating Stations:4.1.77 The Commission in Previous Tariff Order approved the energy from Central Generating Stations (CGS) on the basis of the allocated share to TANGEDCO. The Commission considered 85% Plant Availability Factor for all CGS and Joint ventures and 70% for the proposed addition from Kaiga APS and Kalpakkam APS. The power purchase quantum from CGS from FY 2010-11 to FY 2012-13 as approved by the Commission in Previous Tariff Order is tabulated below: Table 60: Energy Available from CGS approved by the Commission in Previous Tariff Order S. No Particulars Unit FY 2010-11 FY 2011-12 FY 2012-13 Energy Available 1 MU 21348 27333 35723 from CGS4.1.78 TANGEDCO in its Petition submitted that the energy availability from existing Central Generating Stations has been assumed to remain unchanged in the ensuing financial years. The Commissioning schedule has been taken into account while formulating the projection of the power purchase from new CGS.4.1.79 TANGEDCO in its Petition projected the energy availability from FY 2010-11 to FY 2012-13 from Central Generating Stations which is tabulated below: Table 61: Energy Available from CGS as submitted by TANGEDCO S. No Particulars Unit FY 2010-11 FY 2011-12 FY 2012-13 Energy Available 1 MU 21633 23297 30710 from CGS144 | P a g e
    • Commission’s View:4.1.80 The Commission observed that TANGEDCO has submitted the power purchase quantum from various CGS during FY 2010-11 which includes UI also. Since TANGEDCO in its Petition has submitted actual quantum purchased from CGS during FY 2010-11, the Commission has considered the same for FY 2010-11.4.1.81 As regards power purchase quantum from CGS during FY 2011-12, the Commission asked TANGEDCO to submit the actual power purchased till December 2011 and revised projections for next three months, i.e., from January 2012 to March 2012. In reply TANGEDCO submitted the revised projection on the basis of actual power purchased from CGS till December 2011.4.1.82 The Commission observed that TANGEDCO in its revised submission has reduced the power purchase quantum from NTPC-Kayamkulam, Kudankulam APS and NLC-TS-II Expansion during FY 2011-12. The Commission has considered the power purchase quantum from CGS during FY 2011-12 as per the revised submission of TANGEDCO.4.1.83 For FY 2012-13, the Commission observed that TANGEDCO has submitted power purchase quantum from existing CGS on the basis of capacity allocation to TANGEDCO. The Commission has accepted the projection of power purchase quantum on account of existing CGS as submitted by TANGEDCO in the Petition. The Commission further observed that TANGEDCO has also projected 145 MU on account of UI along with CGS. The Commission is of the view that UI is not a source of power purchase and hence cannot be considered at the time of advance estimation of availability of power4.1.84 In case of new capacity addition in CGS during FY 2012-13, TANGEDCO has furnished revised COD along with installed capacity and its’ share in net availability for upcoming CGS in FY 2012-13. The Commission has also obtained COD details from NLC and NTPC for their upcoming Units. Based on the CODs furnished by TANGEDCO, NLC and NTPC, the Commission has calculated the net energy available from new CGS pertaining to TANGEDCO’s share during FY 2012-13. Table 62: Energy available from upcoming Power Stations during FY 2012-13 Installed Total TANGEDCO TANGEDCO Particulars Capacity COD Next FY Days Gen Share (MW) Share (MU) (MW) (MU) NLC TS Expansion-II 250 31-Mar-12 03/31/2013 365 97.75 2190 856 (Unit-I)145 | P a g e
    • Installed Total TANGEDCO TANGEDCO Particulars Capacity COD Next FY Days Gen Share (MW) Share (MU) (MW) (MU) NLC TS Expansion-II 250 15-Sep-12 03/31/2013 197 97.75 1182 462 (Unit-II) Total 500 195.50 3372 1318 Installed Total TANGEDCO TANGEDCO Particulars Capacity COD Next FY Days Gen Share (MW) Share (MU) (MW) (MU) Kudankulam 1000 15-May-12 03/31/2013 320 392.70 7680 3016 (Unit-I) Kudankulam 1000 15-Feb-13 03/31/2013 44 393.60 1056 416 (Unit-II) Total 2000 786.30 8736 3432 Considered 1716 50% Installed Total TANGEDCO TANGEDCO Particulars Capacity COD Next FY Days Gen Share (MW) Share (MU) (MW) (MU) Simhadri (Unit- 500 16-Sep-11 03/31/2013 365 80.75 4380 707 III) Simhadri (Unit- 500 03/31/2013 365 80.75 4380 707 IV) 31-Mar-12 Total 1000 161.50 8760 1414 Installed Total TANGEDCO TANGEDCO Particulars Capacity COD Next FY Days Gen Share (MW) Share (MU) (MW) (MU) NTPC-TNEB 500 31-Mar-12 03/31/2013 365 295 4380 2584 (Unit-I) NTPC-TNEB 500 03/31/2013 44 295 528 312 (Unit-II) 15-Feb-13 Total 1000 590 4908 2896 Installed Total TANGEDCO TANGEDCO Particulars Capacity COD Next FY Days Gen Share (MW) Share (MU) (MW) (MU) MAPS Addl. 500 31-May-12 03/31/2013 304 142 3648 1036 Considered 518 50%146 | P a g e
    • 4.1.85 As regards Kudankulam APS and MAPS Additional, the Commission has considered the energy availability as 50% from these two Power Stations in view of uncertainties in the Commercial date of Operation.4.1.86 The Power Purchase Quantum as approved by the Commission from FY 2010-11 to FY 2012-13 is tabulated below: Table 63: Energy Available from CGS in FY 2010-11 as approved by the Commission (MU) FY 2010-11 S. No Particulars Rev. sub. Dated Petition Commission 4.03 1 NLC-TS-I 3066 3066 3066 2 NLC-TS-II (Stage-I) 1214 1214 3042 NLC-TS-II (Stage-II) 1828 1828 3 NLC-TS-I Expansion 1509 1509 1509 4 NTPC SR (I & II) 4039 4039 4039 5 NTPC SR (III) 1024 1024 1024 6 NTPC ER 735 735 735 7 NTPC - Talcher II 3664 3664 3664 8 Kayankulam 854 854 854 9 MAPS 1398 1399 1399 10 KAIGA 860 860 860 11 Simahadri 0 0 0 12 Kudankulam 0 0 13 NLC-TS-IIExpansion 0 0 14 MAPC (Addl.) 0 0 15 NTPC-TNEB (JV) 0 0 16 UI 1441 1441 1441 17 Total 21633 21633 21633 Table 64: Energy Available from CGS in FY 2011-12 as approved by the Commission (MU) FY 2011-12 S. No Particulars Rev. sub. Petition Commission Dated 4.03 1 NLC-TS-I 3066 3066 3066 2 NLC-TS-II (Stage-I) 1503 1503 3242 NLC-TS-II (Stage-II) 1739 1739 3 NLC-TS-I Expansion 1609 1609 1609147 | P a g e
    • FY 2011-12 S. No Particulars Rev. sub. Petition Commission Dated 4.03 4 NTPC SR (I & II) 4139 4139 4139 5 NTPC SR (III) 1105 1105 1105 6 NTPC ER 885 885 885 7 NTPC - Talcher II 3690 3690 3690 8 Kayankulam 250 205 205 9 MAPS 1498 1499 1499 10 KAIGA 1107 1107 1107 11 Simahadri 328 328 328 12 Kudankulam 333 13 NLC-TS-II Expansion 1295 14 MAPS (Addl.) 0 15 NTPC-TNEB (JV) 0 16 UI 750 750 750 17 Total 23297 21625 21625 Table 65: Energy Available from CGS in FY 2012-13 as approved by the Commission (MU) FY 2012-13 S. No Particulars Petition Commission 1 NLC-TS-I 3066 3066 2 NLC-TS-II (Stage-I) 3272 3272 NLC-TS-II (Stage-II) 3 NLC-TS-I Expansion 1624 1624 4 NTPC SR (I & II) 4164 4164 5 NTPC SR (III) 1125 1125 6 NTPC ER 897 897 7 NTPC - Talcher II 3705 3705 8 Kayankulam 0 0 9 MAPS 1508 1508 10 KAIGA 1178 1178 11 Simahadri 925 1415 12 Kudankulam 3245 1716 13 NLC-TS-II Expansion 2135 1318 14 MAPS (Addl.) 256 518 15 NTPC-TNEB (JV) 3465 2896148 | P a g e
    • FY 2012-13 S. No Particulars Petition Commission 16 UI 145 17 Total 30710 28402 Independent Power Producers (IPPs):4.1.87 The Commission in Previous Tariff Order approved the energy from Independent Power Producers (IPPs) at 85% of the installed capacity (MW). The Commission approved total power purchase quantum on the basis of Merit Order Despatch.4.1.88 TANGEDCO in its Petition has submitted that it has entered into Power Purchase Agreements with several Independent Power Producers for procuring electricity. It further submitted that the power purchase price from these sources is governed by the applicable power purchase agreements entered into with these projects. TANGEDCO projected the following quantum of Power Purchase from FY 2010-11 to FY 2012-13 from IPPs in its Petition: Table 66: Energy Available from IPPS as submitted in the Petition (MU) Installed S. No Particulars Capacity (MW) FY 2010-11 FY 2011-12 FY 2012-13 1 GMR 196 875 795 495 2 Samalpatti 105.66 378 575 575 3 PPN 330.5 2494 2375 2395 4 Madurai 106 353 575 575 5 ST-CMS 250 1652 1780 1795 6 ABAN 113.2 820 801 810 7 Penna 52.8 370 365 375 8 Total 1154.16 6942 7266 7020 Commission’s View:4.1.89 In its reply dated March 4, 2012, TANGEDCO revised the quantum of power purchase from IPPs during FY 2010-11 from 6942 MU to 6945 MU. The Commission has considered the revised submission of Petitioner TANGEDCO regarding IPPs during FY 2010-11.149 | P a g e
    • 4.1.90 As regards FY 2011-12, TANGEDCO revised the power purchase quantum purchased from IPPs during FY 2011-12 from 7266 MU to 5982 MU on the basis of 9 months actual data available up to December 2011. The Commission asked TANGEDCO the reasons for purchasing costlier power from GMR as compared to the cheaper power available from Penna, Aban and PPN. In reply TANGEDCO submitted that these power plants were not able to provide energy due to shutdown and non-availability of fuel. The Commission has considered the revised submission of TANGEDCO regarding Power Purchase Quantum from IPPs.4.1.91 For FY 2012-13, the Commission observed that TANGEDCO has projected less energy availability from GMR PCL as compared to Samalpatti PPCL and Madurai PPCL. The Commission has considered the power purchase quantum as submitted by TANGEDCO in the Petition. However the Commission notes that the energy available from all the three stations is much higher if PLF corresponding to full cost recovery is considered. During advanced operation, interse Merit Order Despatch shall be followed for despatching the stations. The Commission has allowed the power to be purchased from IPPs on the basis of Merit Order Despatch for FY 2012-13. The Power Purchase quantum from IPPs from FY 2010-11 to FY 2012-13 is tabulated below: Table 67: Energy Available for FY 2010-11 as approved by the Commission (MU) FY 2010-11 Particulars Last Year Revised Petition Commission Order Submission GMR 1300 875 875 875 Samalpatti 300 378 378 378 PPN 2259 2494 2496 2496 Madurai 540 353 353 353 ST-CMS 1809 1652 1653 1653 ABAN 850 820 820 820 Penna 400 370 370 370 Total Quantum 7458 6942 6945 6945150 | P a g e
    • Table 68: Energy Available for FY 2011-12 as approved by the Commission (MU) FY 2011-12 Particulars Last Year Revised Petition Commission Order Submission GMR 300 795 962 962 Samalpatti 150 575 351 351 PPN 1406 2375 1483 1483 Madurai 179 575 333 333 ST-CMS 1574 1780 1711 1711 ABAN 850 801 776 776 Penna 400 365 366 366 Total 4859 7266 5982 5982 Quantum Table 69: Energy Available for FY 2012-13 as approved by the Commission (MU) FY 2012-13 Particulars Last Year Petition Commission Order GMR 300 495 495 Samalpatti 150 575 575 PPN 1441 2395 2395 Madurai 151 575 575 ST-CMS 1574 1795 1795 ABAN 850 810 810 Penna 400 375 375 Total Quantum 4866 7020 7020 Captive/ Cogeneration and Non-Conventional energy sources:4.1.92 The Commission in Previous Tariff Order approved the purchase from Captive Power Plants in accordance with the Power Purchase quantum projected by TANGEDCO in its Petition.151 | P a g e
    • 4.1.93 As regards power purchase quantum from Bagasse based Cogeneration Power Plants, the Commission in Previous Tariff Order approved power purchase quantum at the available capacity level as the purchase from these sources fall outside the Merit Order Despatch.4.1.94 For projection of quantum available from private wind mills in the Previous Tariff Order, the Commission calculated the quantum by considering the Capacity Utilization Factor of 19.57% based on last three years average.4.1.95 The quantum of power approved by the Commission from Non-Conventional Energy Sources in the last Order is tabulated below: Table 70: Quantum of energy approved in Previous Tariff Order (MU) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 CPP 671 571 371 2 Cogeneration 810 1038 1276 3 Biomass 111 111 111 Private Wind 4 Mills 9458 9973 10487 5 Total 11050 11693 122454.1.96 TANGEDCO in its Petition submitted that it has entered into agreements with some of the private energy generators owning captive generating sources and cogeneration sources, which pump their surplus power into the Grid. TANGEDCO further submitted that the power purchase quantum has been estimated on the basis of quantity of power likely to be made available for sale based on prevailing trends. The Power Purchase Quantum projected from various sources from FY 2010-11 to FY 2012-13 is tabulated below: Table 71: Quantum of energy submitted in the Petition (MU) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 CPP 460 575 580 2 Solar 2 10 11 3 Wind 8707 9245 9988 4 Cogeneration 997 1135 1469 5 Biomass 110 115 120 6 Total 10276 11080 12168152 | P a g e
    • Commission’s View:4.1.97 During the discussion held with TANGEDCO Officials, it was communicated that the wheeled energy of Open Access Consumers are booked under power purchase as well as Sale of power. TANGEDCO submitted the details of energy wheeled from Wind, Biomass, Cogen and Captive Generators.4.1.98 The details submitted by TANGEDCO from FY 2010-11 to FY 2012-13 are tabulated below: Table 72: Details of Energy wheeled from FY 2010-11 to FY 2012-13 Power Wheeled Particulars Purchase (MU) Energy (MU) Wind FY 2010-11 5263 3169 FY 2011-12 5130 3942 FY 2012-13 5408 4141 Cogeneration FY 2010-11 997 351 FY 2011-12 1135 400 FY 2012-13 1202 456 Biomass FY 2010-11 110 0 FY 2011-12 115 0 FY 2012-13 56 0 CPP FY 2010-11 460 595 FY 2011-12 575 673 FY 2012-13 582 762153 | P a g e
    • 4.1.99 The Commission is of the view that the inclusion of energy on account of captive consumption through wheeling in sales and power purchase is not correct and should be treated in kind. Therefore, the Commission has not considered the energy wheeled on account of wind, CPP, Cogeneration and Biomass in the sales as well as power purchase.4.1.100The Commission has considered only the energy directly purchased from Wind, CPP, Cogeneration and Biomass for calculating energy availability from FY 2010-11 to FY 2012-13 in accordance with the break-up submitted by TANGEDCO.4.1.101As regards Solar Power Plants, the Commission has considered the energy availability as submitted by TANGEDCO from FY 2010-11 to FY 2012-13 in the Petition.4.1.102The quantum of energy available as approved by the Commission from FY 2010-11 to FY 2012-13 is tabulated below: Table 73: Quantum of energy available during FY 2010-11 (MU) FY 2010-11 S. Revised Particulars Last Year No Petition Submission Commission Order dated 24.02 1 CPP 671 460 460 460 2 Solar 0 2 2 2 3 Wind 9458 8707 8707 5263 4 Cogeneration 810 997 997 997 5 Biomass 111 110 110 110 Total 11050 10276 10276 6833 6 Quantum Table 74: Quantum of energy available during FY 2011-12 (MU) FY 2011-12 S. Revised Particulars Last Year No Petition Submission Commission Order dated 4.03 1 CPP 571 575 575 575 2 Solar 0 10.27 10 10 3 Wind 9973 9245 9245 5130 4 Cogeneration 1038 1135 1135 1135 5 Biomass 111 115 115 115 6 Total 11693 11080 11081 6965154 | P a g e
    • FY 2011-12 S. Revised Particulars Last Year No Petition Submission Commission Order dated 4.03 Quantum Table 75: Quantum of energy available during FY 2012-13 (MU) FY 2012-13 S. Particulars Last Year No Petition Commission Order 1 CPP 371 580 582 2 Solar 0 11 11 3 Wind 10487 9988 5408 4 Cogeneration 1276 1469 1202 5 Biomass 111 120 56 Total 12245 12168 7258 6 Quantum Renewable Purchase Obligation (RPO):4.1.103In Para 8.18.4 of the comprehensive tariff order on wind energy (Order No.1 of 2009, dated 20-03-2009), the Commission has fixed the Renewable Purchase Obligation (RPO) at a minimum of 14% for 2010-11.4.1.104As regards FY 2011-12, the Commission in first Amendment in Renewable Energy Purchase Obligation Regulations, 2010 has fixed the RPO of 9% for all sources of Renewable Energy put together and 0.05% for Solar separately.4.1.105As regards target of RPO for future years, Tamil Nadu Electricity Regulatory Commission (Renewable Energy Purchase Obligation) Regulations, 2010 states as under: “2.If the RPO for any of the year is not specified by the Commission, the RPO specified for the previous year shall be continued beyond the period till any revision is effected by the Commission in this regard.”4.1.106For FY 2012-13, the Commission has not prescribed any RPO Target. Therefore, the Commission has considered same RPO Obligations as prescribed for FY 2011-12 till determination of RPO Target for FY 2012-13.155 | P a g e
    • 4.1.107Accordingly, the Commission has calculated the quantum to be purchased through RPO. The details of power purchase quantum in FY 2010-11 and FY 2011-12 is tabulated below:4.1.108The Commission has applied the above mentioned percentages of RPO from FY 2010-11 to FY 2012-13 on the energy required determined for respective years in this Order. Table 76: RPO Obligation (MU) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 Energy Requirement 68770 69240 70784 Purchase from 2 9628 6232 6371 Renewable 3 RPO% for all Sources 9% 9% 14% 4 RPO% for solar 0.05% 0.05%4.1.109As discussed earlier the Commission in this Order has allowed only direct purchased quantum on account of wind energy from FY 2010-11 to FY 2012-13. The Commission has given the appropriate treatment in the energy sales also and reduced the quantum of wheeled energy included in sales.4.1.110The actual energy purchased through Renewable Energy sources during FY 2010-11 and projected to be purchased from FY 2011-12 to FY 2012-13 on the basis of quantum of energy approved through various sources in this Order is tabulated below: Table 77: Renewable Energy Purchase from FY 2010-11 to FY 2012-13 (MU) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 Wind 5263 5130 5408 2 Small Hydro 212 207 262 3 Cogeneration 997 1135 1202 4 Biomass 110 115 56 5 Own wind generation 13 11 11 6 Total except solar 6596 6598 6938 7 Solar 2 10 11 8 Total including solar 6598 6609 6949 RPO % actually 9 achieved for all sources 9.59% 9.53% 9.80% except solar 10 Solar 0.0030% 0.02% 0.02%156 | P a g e
    • S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 11 RPO% actually 9.59% 9.54% 9.82% achieved for all sources4.1.111The Commission observed that TANGEDCO has met the target of RPO, i.e., 14% in FY 2010-11 based on the total Renewable energy utilised in the area of the licensee. .4.1.112As regards FY 2011-12 and FY 2012-13, the Commission observed that for all RE sources put together, TANGEDCO will achieve the target of 9% during FY 2011-12 and FY 2012-13.4.1.113As against the target of 0.05% in case of Solar, TANGEDCO has projected the achievement of 0.02% during FY 2011-12 and FY 2012-13. Also TANGEDCO has not requested the Commission to provide waiver for the same. The Commission in this Order has provisionally considered the power purchase from Solar as submitted by TANGEDCO for FY 2011-12 and FY 2012-13. However TANGEDCO is expected to fulfil the RPO Target in terms of Solar also. The Commission will consider the actual quantum purchased on account of Solar during FY 2011-12 during truing-up in next Tariff determination exercise. Traders :4.1.114The Commission in Previous Tariff Order considered the following quantum on account of purchase from Traders from FY 2010-11 to FY 2012-13: Table 78: Energy on account of Traders from FY 2010-11 to FY 2012-13 (MU) Particulars FY 2010-11 FY 2011-12 FY 2012-13 Traders 4538 2000 20004.1.115TANGEDCO submitted the energy quantum on account of Traders from FY 2010-11 to FY 2012-13 in the Petition which is tabulated below: Table 79: Energy on account of Traders from FY 2010-11 to FY 2012-13 (MU) Particulars FY 2010-11 FY 2011-12 FY 2012-13 Traders 10483 12500 5365157 | P a g e
    • Commission’s View:4.1.116The Commission observed that TANGEDCO has purchased considerable quantum of energy from Traders during FY 2010-11 and FY 2011-12 in order to meet its energy requirement. The Commission has considered the quantum on account of Traders according to the latest submission of TANGEDCO for respective years. The average cost of power purchased from Traders during FY 2010-11 and FY 2011-12 as submitted by TANGEDCO in the revised submission is Rs. 5.32/ kWh and Rs. 6.82/ kWh. However the Commission has capped the average rate of power purchase rate of Rs. 5.32/ kWh during FY 2010-11 and FY 2011-12. For FY 2012-13, the Commission has considered 2000 MU on account of Traders as considered in last Tariff Order. The energy considered on account of Traders is tabulated below: Table 80: Energy approved on account of Traders from FY 2010-11 to FY 2012-13 (MU) FY 2010-11 FY 2011-12 Particulars Revised Revised Petition Commission Petition Commission Submission Submission Traders 10483 10540 10540 12500 9400 9400 FY 2012-13 Particulars Petition Commission Traders 5365 20004.1.117The Commission directed TANGEDCO to follow the Government of India (GoI) guidelines under Section-63 for power purchase for less than 1 year which is under finalisation. The Commission also directs TANGEDCO to take prior approval before purchasing the energy from Traders higher than the quantum and rate specified by the Commission in this Tariff Order.Total energy available from all Sources:4.1.118Based upon the above discussion in respect of individual sources, the total energy available from all sources as submitted in the Petition and as approved in the Order is tabulated below:158 | P a g e
    • Table 81: Total Energy Available from all Sources (MU) FY 2010-11 FY 2011-12 Particulars Revised Revised Petition Commission Petition Commission Submission Submission Own Generation ETPS 1176 1176 1176 851 851 851 TTPS 6523 6522 6522 7018 7018 7018 MTPS 5549 5549 5549 6235 6234 6234 NCTPS 4110 4110 4110 4621 4621 4621 NCTPS (Stage-II) (Unit-I) NCTPS (Stage-II) (Unit-2) MTPS Stage-III 259 259 0 Subtotal-Thermal 17358 17357 17357 18984 18983 18724 Gas Turbine Stations Kuttalam 157 157 157 382 457 457 Basin Bridge 52 52 52 90 44 44 TGTPS 649 610 610 654 650 650 Valuthur -I 531 531 531 601 629 1093 Valuthur-II 444 465 Subtotal-Gas 1389 1349 1349 2172 2244 2244 Hydro Stations Erode HEP 767 846 Kadamparai HEP 1303 1279 4515 4701 Kundah HEP 2155 2497 Tirunelveli HEP 860 939 New Hydro addition Subtotal-Hydro 5085 4474 4515 5561 4912 4701 Wind Tirunelveli & 13 13 13 20 20 11 Udmalpet Total-Own 23845 23192 23233 26737 26159 25680 Generation Sources other than159 | P a g e
    • FY 2010-11 FY 2011-12 Particulars Revised Revised Petition Commission Petition Commission Submission Submission own generation IPPs GMR 875 875 875 795 962 962 Samalpatti 378 378 378 575 351 351 PPN 2494 2496 2496 2375 1483 1483 Madurai 353 353 353 575 333 333 ST-CMS 1652 1653 1653 1780 1711 1711 ABAN 820 820 820 801 776 776 Penna 370 370 370 365 366 366 Sub-total-IPPs 6942 6945 6945 7266 5982 5982 NCES & CPP CPP 460 460 460 575 575 575 Solar 2 2 2 10 10 10 Wind 8707 8707 5263 9245 9245 5130 Cogeneration 997 997 997 1135 1135 1135 Biomass 110 110 110 115 115 115 Sub-total-NCES & 10276 10276 6833 11080 11081 6965 CPP CGS NLC-TS-I 3066 3066 3066 3066 3066 3066 NLC-TS-II (Stage-I) 1214 1214 1503 1503 3042 3242 NLC-TS-II (Stage-II) 1828 1828 1739 1739 NLC-TS-I Expansion 1509 1509 1509 1609 1609 1609 NTPC SR (I & II) 4039 4039 4039 4139 4139 4139 NTPC SR (III) 1024 1024 1024 1105 1105 1105 NTPC ER 735 735 735 885 885 885 NTPC - Talcher II 3664 3664 3664 3690 3690 3690 Kayankulam 854 854 854 250 205 205 MAPS 1398 1399 1399 1498 1499 1499 KAIGA 860 860 860 1107 1107 1107 Simahadri 0 0 0 328 328 328 Kudankulam 0 0 0 333 0 0 NLC-TS-II Expansion 0 0 0 1295 0 0 MAPS (Addl.) 0 0 0 0 0 0 NTPC-TNEB (JV) 0 0 0 0 0 0 PGCIL-SR & ER UI 1441 1441 1441 750 750 750160 | P a g e
    • FY 2010-11 FY 2011-12 Particulars Revised Revised Petition Commission Petition Commission Submission Submission Subtotal-CGS 21633 21633 21633 23297 21625 21625 Traders 10483 10540 10540 12500 9400 9400 Wheeling on account of cogeneration, 968 1327 biomass, CPP etc. Grand Total 73180 73555 69183 80880 75574 69653 FY 2012-13 Particulars Petition Commission Own Generation ETPS 1361 680 TTPS 6896 6938 MTPS 5971 5960 NCTPS 4184 4391 NCTPS (Stage-II) (Unit- 1760 I) 2130 NCTPS (Stage-II) (Unit- 3030 2) MTPS Stage-III ( 300 MW available from 1913 March 12) 3528 MTPS Stage-III ( Rest 300 MW available from 1515 June 12) Subtotal-Thermal 24070 26186 Gas Turbine Stations Kuttalam 590 592 Basin Bridge 121 58 TGTPS 581 611 Valuthur -I 611 614 Valuthur-II 592 593 Subtotal-Gas 2495 2469 Hydro Stations161 | P a g e
    • FY 2012-13 Particulars Petition Commission Erode HEP 916 Kadamparai HEP 1385 5110 Kundah HEP 2706 Tirunelveli HEP 1018 New Hydro addition 132 Subtotal-Hydro 6025 5242 Wind Tirunelveli & 21 11 Udmalpet Total-Own Generation 32611 33908 Sources other own generation IPPs GMR 495 495 Samalpatti 575 575 PPN 2395 2395 Madurai 575 575 ST-CMS 1795 1795 ABAN 810 810 Penna 375 375 Sub-total-IPPs 7020 7020 NCES & CPP CPP 580 582 Solar 11 11 Wind 9988 5408 Cogeneration 1469 1202 Biomass 120 56 Sub-total-NCES & 12168 7258 IPPs CGS NLC-TS-I 3066 3066 NLC-TS-II (Stage-I) 3272 3272 NLC-TS-II (Stage-II) NLC-TS-I Expansion 1624 1624 NTPC SR (I & II) 4164 4164162 | P a g e
    • FY 2012-13 Particulars Petition Commission NTPC SR (III) 1125 1125 NTPC ER 897 897 NTPC - Talcher II 3705 3705 Kayankulam 0 0 MAPS 1508 1508 KAIGA 1178 1178 Simahadri 925 1415 Kudankulam 3245 1716 NLC-TS-II Expansion 2135 1318 MAPS (Addl.) 256 518 NTPC-TNEB (JV) 3465 2896 PGCIL-SR & ER UI 145 0 Subtotal-CGS 30710 28402 Traders 5365 2000 Wheeling on account of cogeneration, biomass, CPP etc. Grand Total 87874 78588163 | P a g e
    • 5 FIXED COSTCapital Expenditure and Capitalisation 5.1 Segregation of Fixed Assets5.1.1 TANGEDCO submitted that segregation of fixed assets for FY 2009-10 is done based on: a) For the financial year 2009-10, the opening balance of fixed assets are segregated to the three companies based on the segregation notified by Government of Tamil Nadu in the Transfer Scheme vide G.O. Ms. 100 dated 19-10-2010. b) During the year, additions and deductions for the transmission assets at distribution circles (i.e. Plant and Machinery and Lines & Cables), a ratio of 55:45 is adopted for segregation between Transmission and Distribution, which has been the overall ratio of transmission and distribution assets as per provisional transfer scheme notified vide G.O. Ms. 100 dated 19-10-2010.5.1.2 TANGEDCO submitted that segregation of fixed assets for FY 2010-11 is done based on: a) During the year, additions and deductions up to 31-10-2010 for the transmission assets at distribution circles (i.e. Plant and Machinery and Lines & Cables) a ratio of 55:45 is adopted for segregation between Transmission and Distribution, which has been the overall ratio of transmission and distribution assets as per provisional transfer scheme notified vide G.O. Ms. 100 dated 1910-2010. b) The actual addition and deduction to the assets of transmission circles from November 2010 to March 2011 are segregated based on the monthly accounts of November 2010 to March 2011 of TANTRANSCO circles.5.1.3 TANGEDCO submitted that segregation of fixed assets for FY 2011-12 and 2012-13 is as follows: a) The additions to assets are based on capital expenditure to be undertaken and its proportion of completion in each financial year taking the past trend. b) The additions to depreciation are based on the previous year proportion of depreciation to fixed assets.164 | P a g e
    • 5.2 Capital Expenditure and Capitalisation5.2.1 Regulation 17 (5) of the Tariff Regulations, 2005 and Regulation 3 (v) of the Tariff Regulation under MYT framework specifies that the licensee shall get the capital investment plan approved by the Commission before filing ARR and Application for determination of Tariff. The TANGEDCO has not complied with this provision.5.2.2 The TANGEDCO submitted the capital investment plan for 2010-11 to 2012-13 vide its letter dated 19.8.2011 without capitalization schedule. This will be examined and further action will be taken separately.5.2.3 TANGEDCO in its Petition has submitted Power Plant wise Gross Fixed Assets for its Own Generation Stations, which is as under:Table 82: GFA submitted by TANGEDCO (in Rs Crore) TANGEDCO Stations FY 11 FY 12 FY 13 ETPS 1069 1153 1859 NCTPS 2060 2222 3582 MTPS 1011 1091 1758 TTPS 1916 2066 3331 NCTPS II MTPS II Total Thermal 6056 6531 10530 BBGTPS 553 596 961 KGTPS 354 382 616 TGTPS 462 498 803 VGTPS 859 927 1494 Total Gas 2228 2403 3874 Erode 672 724 1168 Kadamparai 358 386 622 Kundah 952 1027 1656 Tirunelveli 347 374 604 Total Hydro 2329 2511 4049 Tirunelveli - Wind 143 155 249 Udumalpet - Wind 208 224 362 Total Wind 351 379 611 Total Generation 10964 11824 19064165 | P a g e
    • 5.2.4 TANGEDCO in its Petition has submitted Gross Fixed Assets and capitalisation for its distribution function as under:Table 83: Capitalisation submitted by TANGEDCO for Distribution function (in Rs Crore) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 Gross Block at the beginning of FY 7810.53 8407.54 9488.48 2 Gross Block at the end of FY 8407.54 9488.48 10596.10 3 Capitalisation as per Form 11 681.69 1080.94 1107.615.2.5 TANGEDCO in reply to the deficiency raised by the Commission has submitted following capital expenditure:Table 84: Capital Expenditure submitted by TANGEDCO (in Rs Crore)Particulars FY 2010-11 FY 2011-12 FY 2012-13GENERATION SCHEMESHYDRO 21.87 48.85 63.85THERMAL 55.75 96.78 270.08GAS 54.37 89.13 64.25WIND 1.16 0.00 0.00SUB-TOTAL - GENERATION SCHEMES (A) 133.15 234.76 398.18PROJECTSA. Thermal :NCTPS STAGE II 659.57 731.87 799.34MTPP STAGE III 1447.38 872.25 1146.57Ennore Annexe 0.51 10.00Ennore SEZ TPS (Kattupalli) 1.86 10.00TTPS Annexe (Stage - IV) 0.00 10.00Ennore Replacement of ETPS 0.00 10.00NCTPS Stage III 0.00 10.00Udangudi Expansion 0.00 10.00B. HYDRO :BK BARRAGE II 96.97 43.93 0.00BK BARRAGE III 161.02 49.92 15.24PERIYAR VAIGAI SMALL HEP I 2.47 8.19 0.00166 | P a g e
    • Particulars FY 2010-11 FY 2011-12 FY 2012-13PERIYAR VAIGAI II 12.73 12.61 1.15PERIYAR VAIGAI III 16.52 23.20 7.11PERIYAR VAIGAI IV 11.23 17.77 2.35PERIYAR VAIGAI V 0.00 12.50PERIYAR VAIGAI VI 0.00 12.50Bhavani Barrage - I HEP 41.29 11.86 20.50Bhavani Barrage - II HEP 39.37 19.67 3.99Kollimalai HEP 3.30 10.00Kundah Pumped Storage 3.32 28.28SUB-TOTAL –PROJECTS (B) 2488.55 1800.26 2119.53DISTRIBUTION33 KV LINES 0.00 39.45 285.4133 KV SUBSTATIONS 78.63 157.11 245.50OTHER CONSTRUCTIONS SCHEMES 399.68 329.93 245.25GENERAL IMPROVEMENT SCHEMES 399.32 365.23 244.24APDRP works 1.57 0.00 0.00Rural Electrification works 162.25 301.25 123.92RGGVY 115.14 18.84 0.00R-APDRP 27.85 32.84 110.00Co-operative sugar mill generation 225.17 160.00 40.00OTHERS - survey, investigation, computerisation, etc 214.15 1.40 11.54SUB-TOTAL-Distribution ( C) 1623.76 1406.06 1305.86SUB TOTAL (A+B+C=D) 4245.46 3441.08 3823.57Joint Ventureswith NTPC 0.00 313.00 500.00with NLC 0.00 0.00 200.00Others 0.00 5.00 100.00SUB-TOTAL (E)- Joint Ventures 0.00 318.00 800.00TOTAL Outlay (F=D+E) 4245.46 3759.08 4623.57Commission’s View:5.2.6 The Commission in its data deficiency sought for Capital Expenditure and Capitalisation schedule along with its Cost Benefit Analysis. In response TANGEDCO submitted the details. However on perusal of the same, the Commission noted that the data quality and iteration that went through the Capitalisation schedule along with its GFA schedule needed to be substantially improved.167 | P a g e
    • 5.2.7 TANGEDCO in reply dated 15-03-2012 to the deficiency raised by the Commission has submitted Power Plant wise Gross Fixed Assets for its Own Generation Stations, which is as under:Table 85: Revised Closing GFA submitted by TANGEDCO (in Rs Crore) Approved Stations FY 11 FY 12 FY 13 ETPS 1062 1064 1089 NCTPS 2047 2083 2118 MTPS 1061 1080 1126 TTPS 1903 1976 2141 NCTPS II 4074 MTPS II 2810 Total Thermal 6073 6203 13357 BBGTPS 549 549 551 KGTPS 352 378 394 TGTPS 459 465 476 VGTPS 854 910 943 Total Gas 2213 2303 2363 Erode 668 1169 1871 Kadamparai 355 389 409 Kundah 943 978 996 Tirunelveli 414 450 541 Total Hydro 2380 2986 3818 Tirunelveli - Wind 18 18 18 Udumalpet - Wind 3 3 3 Total Wind 21 21 21 Total Generation 10686 11513 195595.2.8 In the submission of TANGEDCO, the Commission noted that the TANGEDCO has shown capitalisation in Wind schemes and sought clarification for the same. During the discussion with TANGEDCO in the meeting held in the Commission’s Office on 14-03- 2012 to seek clarifications on discrepancies in the WIP statement, GFA schedule; and Depreciation and Interest expenses, the TANGEDCO confirmed the following observations of the Commission:168 | P a g e
    • 5.2.8.1 Wind Generation Schemes: No capitalisation will be undertaken and it is by mistake that it was shown separately. This capitalization is to be added to Thermal Generation Schemes. 5.2.8.2 Capital expenditure shown under Joint Venture Schemes is in the form of Equity infusion by TANGEDCO and hence, interest expenses on this head cannot be allowed. 5.2.8.3 TANGEDCO was asked to confirm whether Capital Expenditure and capitalisation shown under Cooperative Sugar Mills head would be treated as an asset in the Fixed Asset Register of TANGEDCO. TANGEDCO confirmed this vide their letter dated 15-03-2012. 5.2.8.4 Since details of Capital Expenditure plan and Capitalisation shown for Distribution Schemes are not submitted along with Cost benefit Analysis, TANGEDCO was asked to confirm that Capital Expenditure and capitalisation shown under Distribution head would be treated as an asset in the Fixed Asset Register of TANGEDCO. TANGEDCO confirmed this vide letter dated 15-03- 2012. 5.2.8.5 In the Depreciation schedule, under the Asset class “Vehicles”, depreciation is beyond 90% for FY 2010-11 and FY 2011-12. Therefore, depreciation shall not be allowed for this asset class for respective years for Generation and Distribution Function. 5.2.8.6 TANGEDCO submitted that Wind assets claimed include substation assets and submitted following segregation of Wind Assets:Table 86: GFA pertaining to Wind-TANGEDCO Submission (In Rs Crore) S. No Particulars Installed Capacity Amount (Rs. Crore) (MW) 1 Wind Generating Stations 17.5 20.86 Wind Sub-stations (Capacity Rating at 110 kV 2 322 and above) 3 Total 342.86169 | P a g e
    • 5.2.8.7 The Commission for the purpose of segregation of GFA among circles has use pro-rata method, which is as under: Table 87: GFA pertaining to Wind considered by the Commission (In Rs Crore) S. No Particulars Installed Capacity (MW) Amount (Rs. Crore) 1 Udumalpet Wind Generation Circle 2.5 2.98 2 Tirunelveli Generation Circle 15 17.88 3 Wind Generating Stations-Total 17.5 20.865.2.9 Regulation 6 (7) (i) (a) of the TNERC Tariff Regulations, 2005 specifies the following: “A generation company or a licensee may make an application as per Appendix – I to these Regulations, for determination of provisional tariff in advance of the anticipated date of completion of the project, based on the capital expenditure actually incurred up to the date of making of the application or a date prior to making of the application, duly audited and certified by the statutory auditors, and the provisional tariff shall be charged from the date of commercial operation of the respective units of the generation station or the line or sub-station of the transmission system.”5.2.10 The Commission observed that there are number of new generating stations for which TANGEDCO had neither sought prior approval of their capital investment plan nor applied for determination of tariff in advance for the new generating stations. However, the Commission is required to determine tariff for the new generating stations under Regulation 43 and hence, the capital costs of these projects are also required to be ascertained by the Commission. Hence, the Commission directs the TANGEDCO to file the petitions based on TNERC Regulations, within 90 days of issuance of this Order.5.2.11 The TANGEDCO plan requires further analysis and explanation from TANGEDCO before according approval of cost proposed by TANGEDCO. Pending approval, the Commission provisionally adopts the Capital Expenditure submitted by the petitioner.5.2.12 Capital expenditure and capitalisation considered by the Commission is as under:170 | P a g e
    • Table 88: Capital Expenditure and Capitalisation of Assets for Generation andDistribution (in Rs Crore) Particulars Capital Expenditure Capitalisation FY 11 FY 12 FY 13 FY 11 FY 12 FY 13GENERATION SCHEMESHYDRO 21.87 48.85 63.85 85.86 102.00 58.25THERMAL 56.91 96.78 270.08 177.24 130.50 270.95GAS 54.37 89.13 64.25 321.66 89.50 60.58WIND 0.00 0.00 0.00 0.00 0.00 0.00SUB-TOTAL (A) 133.15 234.76 398.18 584.76 322.0 389.78PROJECTSA. Thermal :NCTPS STAGE II 659.57 731.87 799.34 0.00 0.00 2809.66MTPP STAGE III 1447.38 872.25 1146.57 0.00 0.00 4073.77Ennore Annexe 0.00 0.51 10.00 0.00 0.00 0.00Ennore SEZ TPS (Kattupalli) 0.00 1.86 10.00 0.00 0.00 0.00TTPS Annexe (Stage - IV) 0.00 0.00 10.00 0.00 0.00 0.00Ennore Replacement of ETPS 0.00 0.00 10.00 0.00 0.00 0.00NCTPS Stage III 0.00 0.00 10.00 0.00 0.00 0.00Udangudi Expansion 0.00 0.00 10.00 0.00 0.00 0.00B. HYDRO :BK BARRAGE II 96.97 43.93 0.00 0.00 484.37 0.00BK BARRAGE III 161.02 49.92 15.24 0.00 0.00 408.08PERIYAR VAIGAI SMALL HEP I 2.47 8.19 0.00 10.91 20.15 0.00PERIYAR VAIGAI II 12.73 12.61 1.15 10.20 0.00 18.72PERIYAR VAIGAI III 16.52 23.20 7.11 18.61 0.00 34.80PERIYAR VAIGAI IV 11.23 17.77 2.35 11.69 0.00 25.40PERIYAR VAIGAI V 0.00 0.00 12.50 0.00 0.00 0.00PERIYAR VAIGAI VI 0.00 0.00 12.50 0.00 0.00 0.00Bhavani Barrage - I HEP 41.29 11.86 20.50 0.00 0.00 149.08Bhavani Barrage - II HEP 39.37 19.67 3.99 0.00 0.00 137.30Kollimalai HEP 0.00 3.30 10.00 0.00 0.00 0.00Kundah Pumped Storage 0.00 3.32 28.28 0.00 0.00 0.00SUB-TOTAL (B) 2488.55 1800.26 2119.53 51.41 504.52 7656.81DISTRIBUTION33 KV LINES 0.00 39.45 285.41 0.00 25.41 176.1633 KV SUBSTATIONS 78.63 157.11 245.50 35.81 195.39 287.24171 | P a g e
    • Particulars Capital Expenditure Capitalisation FY 11 FY 12 FY 13 FY 11 FY 12 FY 13OTHER CONSTRUCTIONS 399.68 329.93 245.25 167.78 433.98 457.56SCHEMESGENERAL IMPROVEMENT 399.32 365.23 244.24 215.83 454.22 466.25SCHEMESAPDRP works 1.57 0.00 0.00 4.55 23.41 0.00Rural Electrification works 162.25 301.25 123.92 70.53 447.90 123.92RGGVY 115.14 18.84 0.00 83.01 108.80 0.00R-APDRP 27.85 32.84 110.00 0.27 0.00 0.00Co-operative sugar mill generation 225.17 160.00 40.00 20.23 94.94 310.00OTHERS - survey, investigation, 214.15 1.40 11.54 83.68 197.52 11.54computerisation, etcSUB-TOTAL (c) 1623.76 1406.06 1305.86 681.69 1981.57 1792.66GRAND TOTAL (A to C) 4245.46 3441.08 3823.57 1317.86 2808.09 9839.255.2.13 Capital expenditure and capitalisation considered by the Commission for distribution function of TANGEDCO is as under:Table 89: GFA and Capitalisation of Assets as Approved by the Commission (in Rs Crore) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 Gross Block at the beginning of FY 7810.53 8407.54 9488.48 2 Gross Block at the end of FY 8407.54 9488.48 10596.10 3 Capex as per WIP Statement 1623.76 1406.06 1305.86 4 Capitalisation as per WIP Statement 681.69 1981.57 1792.66 5 Capitalisation as per Form 11 681.69 1080.94 1107.61 Note: TANGEDCO in the discussion with the Commission on 15.3.2012 accepted that the asset capitalisation shown in form-11 of the Petition needs to be considered for purpose of the calculation of Capital expenditure related heads in Aggregate Revenue Requirement.172 | P a g e
    • 5.3 Interest on Loan Capital:5.3.1 The Commission in the last Tariff Order considered the outstanding loan and interest at the beginning of FY 2009-10. The Commission obtained the actual borrowings and repayment during FY 2009-10 and revised the outstanding loans at the end of FY 2009- 10. The Commission accepted the Interest on Consumer Security Deposit as submitted by TNEB in the Petition.5.3.2 As regards interest on GPF, the Commission fixed the same after considering the salary hike on implementation of wage agreement. The Commission projected the other interests by considering an escalation of 4% over the actual in FY 2008-09. The Commission did not consider the claim of Hydro Balancing Fund as the same cannot be passed on to the Consumers.5.3.3 The Commission further accepted the capitalisation of interest as submitted by TNEB and calculated the net interest for all functions of TNEB from FY 2009-10 to FY 2012-13 and then allocated the total interest on loan capital among different functions of TNEB on the basis of Net Fixed Assets which is as under:Table 90: Interest on Loan Capital as allowed by the Commission in last Tariff Order (Rs.Crore) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 ETPS 78.41 64.99 61.84 2 NCTPS 104.17 83.13 75.6 3 MTPS 45.85 36.06 32.19 4 TTPS 109.75 88.86 82.26 5 NCTPS-II 216.18 216.18 6 MTPS-II 182.3 182 I Total Thermal 338.18 671.52 650.37 1 BBGTPS 20.13 15.29 13.02 2 KGTPS 37.23 31.37 30.41 3 TGTPS 32.16 26.75 25.57 4 VGTPS 102.39 86.99 85.08 II Total Gas 191.91 160.4 154.08 1 Erode 86.23 141.79 119.2 2 Kadamparai 30.51 25.41 24.31 3 Kundah 108.16 91.59 89.27173 | P a g e
    • S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 4 Tirunelveli 42.13 34.13 32.08 III Total Hydro 267.03 292.92 264.86 1 Tirunelveli-Wind 15.21 12.8 12.39 2 Udumalpet-Wind 12.33 10.5 10.3 IV Total -Wind 27.54 23.3 22.69 Total Generation 824.66 1148.14 1091.98 Transmission 1023.39 1094.49 1158.59 Distribution 1428.07 1324.72 1475.21 Total 3276.11 3567.34 3725.795.3.4 TANGEDCO submitted the following basis of segregation of Loans between TANGEDCO and TANTRANSCO: a) REC and PFC loans are apportioned between TANGEDCO and TANTRANSCO as per the provision Balance Sheet mentioned in the G.O. Ms. No. 100, dated 19-10- 2010. b) Generic loans (i.e.) loans availed from Banks, TNPFC, LIC, HUDCO and funds raised through Private placement of bonds are apportioned between TANGEDCO and TANTRANSCO in the ratio of 40 : 60. c) Due to non-revision of tariff, there is a huge accumulated loss and huge borrowing. TANGEDCO has to repay the interest on loan and repayment of principal has been considerably increased. In order to meet out the huge repayment of loan by TANGEDCO, the borrowings have been increased to that extent. d) Interests are being calculated at the average rate of interest for the previous year outstanding balance and for the current year borrowing. Interests are being calculated at the rate of 11.75% p.a. for six months for the FY 2011-12 and FY 2012-13 in respect of REC, PFC, TNPFC, Commercial Bank Loans and other loans interest are calculated on actual basis. e) Interests are being calculated at the average rate of interest for the previous year outstanding balance and for the current year borrowing interest are being calculated at the rate of 12.00%, 10.00% p.a., 11.75% p.a. and 10.50% p.a. for six months for the financial year 2012-13 in respect of TNEB Bonds, REC, PFC, TNPFC, and Commercial Bank Loans. Interest on LIC loan and HUDCO are being worked at actual basis.174 | P a g e
    • f) The erstwhile TNEB/ now TANGEDCO’s entire programmed capital expenditures, repayment of loan, and payment of interest and also part of the other revenue expenses are to be met out through borrowed funds in view of the non-availability of internal source of funds due to non-rationalization of tariff. Rural Electrification Corporation Ltd. g) TANGEDCO (then TNEB) has been availing loan from REC from the year 1970- 1971 onwards to implement the project system improvement and extension of electricity for energisation of pumpsets under P : SI (Systems improvements) category and SPA : PE pumpset energisation Category. Further REC has also sanctioned loan for establishment of Power Projects. In addition to this, TANGEDCO has also availed Short term loan for a period of one year to three years to meet Power Purchase expenditure. The REC interest rate is applicable as on the date of disbursement of loan and not on the date of the sanction of loan. The period of repayment of principal is 13 years (including moratorium period of 3 years). The loan drawl period is 3 years for the distribution scheme and will be extended up to one year at the request of the borrower. Each and every reimbursement of claim on each scheme loan is treated as separate loan since the rate of interest is different. Power Finance Corporation Ltd. h) Power Finance Corporation Ltd. is also extending financial assistance for specific Transmission and Distribution Schemes and also power projects. In addition to this, short term loan for a period of six months to one year has also been availed to meet Power purchase. HUDCO i) HUDCO is providing financial assistance for a period of 15 years. The repayment of loan is to be made in 56 quarterly installments. The present, rate of interest is 13% p.a. floating. As and when the interest rate increases/ reduces, the same effect will be reflected in the rate of interest. Life Insurance Corporation of India: j) TANGEDCO (then TNEB) has availed loan from Life Insurance Corporation of India. The period of loan is 15 years. The repayment of loan is equal annual/semi annual installments.175 | P a g e
    • Commercial Banks: k) TANGEDCO is availing Medium term loans from commercial banks for the purpose of meeting the capital expenditure and short term loan for meeting the mismatch of the cash flow. The loans availed from the banks are being utilized for meeting power purchase, payment commitments, repayment of principal, payment of interest and other inevitable payments. The short term and medium term loans carry an interest rate of more than 12.00% p.a.5.3.5 TANGEDCO in its Petition has not discussed the loan amount and the interest on loan for its generating stations. TANGEDCO has submitted the loan amount and the interest on loan pertaining to its generation business in form-13 of each station annexed along with the Petition. However in form-13, TANGEDCO has not submitted the details of the loan raised from FY 2010-11 to FY 2012-13 for its Generating Function. The interest on loan as claimed by TANGEDCO is tabulated below:Table 91: Interest on loan (Rs. Crore) as claimed by TANGEDCO in the Petition for itsGeneration Function TANGEDCOStations FY 11 FY 12 FY 13ETPS 12 58 91NCTPS 23 111 176MTPS 11 54 87TTPS 22 103 164NCTPS IIMTPS IITotal Thermal 69 326 518BBGTPS 6 30 47Kuttalam 4 19 30Kovilkalappal 5 25 40Valuthur 10 46 74Total Gas 25 120 191Erode 8 36 57Kadamparai 4 19 31Kundah 11 51 81Tirunelveli 4 16 22Total Hydro 26 123 191Tirunelveli - Wind 2 12 18Udumalpet - Wind 2 8 12Total Wind 4 20 30176 | P a g e
    • TANGEDCOStations FY 11 FY 12 FY 13Total Generation 124 588 9305.3.6 TANGEDCO submitted the Interest on loan for Distribution Function from FY 2010-11 to FY 2012-13 which is tabulated below:Table 92: Interest on Loan (Rs. Crore) for Distribution BusinessParticulars FY 2010-11 FY 2011-12 FY 2012-13Interest on Loan 1651.35 3150.2 3354.59Commission’s View: 5.4 Diversion of Capital Funds for Revenue Expenditure:5.4.1 In page no. 40 of Policy Notes-FY 2011-12, Energy Department, Government of Tamil Nadu has noted that: “The Board’s borrowings are being utilized to meet Capital Expenditure, Loan repayments and managing revenue deficit”5.4.2 The Commission has observed in many places in this Order that there is a mix up between the capital account and the revenue account. Equity as well as capital borrowings have been diverted from time to time to meet the revenue expenses. Equity being the owner’s investment, the Commission has taken a view that the return on equity shall not be permitted if equity has been diverted for meeting revenue expenses. Further, borrowings are also more than the investment shown for capital expenditure. This clearly brings out the fact that capital borrowings have also been diverted for revenue expenditure. This is also recognized by the policy paper which has been published in the Government of Tamil Nadu Website.5.4.3 The Regulations of the Commission are for normal situations and does not cover a situation which is encountered now. Therefore, the Commission has to take a practical view on this issue. The option available to the Commission is to disallow the interest costs on the entire borrowings in excess of capital works which will be in line with the Regulation but such a move would create a lot of confusion and may also affect the borrowing ability of the TANGEDCO / TANTRANSCO. The proposal regarding177 | P a g e
    • revaluation of assets in the two Transfer Schemes already issued by the Government of Tamil Nadu may address the balance sheet problems but will not generate additional cash to repay the existing loans which were borrowed. Loans would be carried forward for final settlement. The accumulated losses of some of Utilities is under consideration by two committees constituted by the Government of India Viz., Shunglu Comiittee and Chaturvedi Committee. Shunglu Committee has already submitted its report which is available in the website of Planning Commission. The report of the Chaturvedi Committee is not available in public domain yet. Under these circumstances, Commission is allowing the interest on entire borrowing duly considerin the loans shown in the Transfer Schemes and provisionally allows such interest, subject to final adjustment when the audited accounts are made available. This is also further subject to the actions taken by the appropriate authorities as well as the TANGEDCO / TANTRANSCO with regard to handling of the past liabilities based on the outcome of the above referred two reports and implementation thereof.5.4.4 The Commission is of the opinion that rise in borrowing towards revenue expenditure is a clear indication of deteriorating financial health of the Utility. Hence, the Commission directs the Utility to file their Tariff Petition on a timely basis every year.5.4.5 In the reply to query raised by the Commission about details of borrowings to meet revenue expenditure, the TANGEDCO has cited its precarious financial position and reiterated that it has no other option than to resort to borrowing to meet its daily revenue expenditure, in absence of any tariff increase in past so many years.5.4.6 The Commission further notes that Regulation 21 of TNERC Tariff Regulations, 2005 clearly provides for funding only to the extent of capitalisation of the asset added during the year. However, considering the financial crisis that TANGEDCO is presently going through, if only the interest expenditure is allowed to the extent of capital expenditure, it may lead to the further difficulty for TANGEDCO to borrow funds from the market. Even if TANGEDCO is able to raise funds, it may be at very high interest rates.5.4.7 The Commission is of the opinion that interest expenses disallowed would only contribute to postponement of the problem to be solved, which may not be in the interests of any of the stakeholders.5.4.8 During scrutiny of interest expenses, the Commission observed that interest expenses of new thermal power stations have been apportioned to all the existing stations by178 | P a g e
    • TANGEDCO. The Commission sought clarification and asked TANGEDCO to resubmit the Capital expenditure for its Generation function.5.4.9 In reply to datagaps, TANGEDCO after incorporating the comments of the Commission resubmitted its Interest expenses on 18-3-2012. Interest expenses approved by the Commission are as under:Table 93: Interest expenses approved by the Commission for Generation function (in RsCrore) CommissionStations FY 11 FY 12 FY 13ETPS 8 9 8NCTPS 15 16 16MTPS 8 9 9TTPS 14 15 16NCTPS II 0 0 174MTPS II 0 0 293Total Thermal 46 49 516BBGTPS 4 4 4Kuttalam 3 3 3Kovilkalappal 3 4 4Valuthur 4 7 7Total Gas 15 18 18Erode 5 5 9Kadamparai 3 3 3Kundah 7 8 8Tirunelveli 2 3 4Total Hydro 17 19 24Tirunelveli - Wind 0 0 0Udumalpet - Wind 0 0 0Total Wind 0 0 0Total Generation 78 86 558179 | P a g e
    • 5.4.10 TANGEDCO has included the funding of equity for its Joint Ventures projects in the Loan borrowing for the distribution function. The Commission is of the opinion that free equity infused for Joint Venture projects will attract return on equity and since, these Joint Ventures Projects come under the purview of CERC, the Commission for the purpose of computing interest expenses has not considered the equity involved in these projects.5.4.11 The Commission based on revised submission by TANGEDCO on Wind Generation Plants, notes that these wind assets have already lived their useful life and have depreciated upto 90% of the asset value. Hence, the loan borrowing, if any towards these assets would already be over. Hence, no interest expenses have been considered for Wind Generation Plants.5.4.12 The Commission has accepted the interest during construction submitted by TANGEDCO.5.4.13 Interest expenses approved by the Commission for distribution function are as under:Table 94: Interest expenses approved by the Commission for Distribution function (in RsCrore) TANGEDCO Approved Particulars FY 2010- FY 2011- FY 2012- FY 2010- FY 2011- FY 2012- 11 12 13 11 12 13 Opening Loan balance 16471 24057 29954 16471 24057 29954 Addition in Loan 16628 15153 13510 16628 15153 13510 Repayment 9035 9256 4639 9035 9256 4639 Closing Loan Balance 24057 29954 38825 24057 29954 38825 Interest Expenses 1865 3364 3569 1865 3364 3569 IDC 214 214 214 214 214 214 Net Interest Expenses 1651 3150 3355 1651 3150 3355 5.5 Depreciation:5.5.1 The Commission in the last Tariff Order allowed 3.31% as the rate of depreciation on existing assets of TNEB based upon the annual statement of accounts of TNEB for FY 2008-09. 3.56% was the rate of depreciation allowed on new assets to be added by TNEB from FY 2010-11 to FY 2012-13 based upon the weighted average rate of depreciation arrived after excluding the cost of land. The Commission further allocated the approved amount of depreciation among Generation, Transmission and Distribution function of180 | P a g e
    • TNEB. The depreciation allowed by the Commission for various Generating Stations of TANGEDCO in last Tariff Order is tabulated below:Table 95: Depreciation allowed by the Commission from FY 2010-11 to FY 2012-13 (Rs.Crore) Last Tariff Order Stations 2010-11 2011-12 2012-13 ETPS 32 32 32 NCTPS 65 65 65 MTPS 33 33 33 TTPS 60 60 60 NCTPS II 128 200 MTPS II 87 122 Total Thermal 189 404 512 BBGTPS 18 18 18 Kuttalam 11 11 11 Kovilkalappal 12 12 12 Valuthur 26 26 26 Total Gas 68 68 68 Erode 22 35 37 Kadamparai 12 12 12 Kundah 30 30 30 Tirunelveli 10 11 11 Total Hydro 74 88 90 Tirunelveli - 5 5 5 Wind Udumalpet - 3 3 3 Wind Total Wind 8 8 8 Total 339 568 679 Generation Transmission 268 311 352 Distribution 349 393 434 Total 956 1272 14645.5.2 TANGEDCO in its Petition has not discussed the depreciation and rates of depreciation applied on the GFA for calculating depreciation for its generating stations in the Petition. TANGEDCO has submitted the depreciation along with the Opening and Closing balance of depreciation pertaining to its generation business in Form-11 of each station annexed along with the Petition. TANGEDCO has also submitted the rates applied on various181 | P a g e
    • assets along with segregation of assets in Form-12. The Station-wise depreciation on the GFA as claimed by TANGEDCO is tabulated below:Table 96: Depreciation (Rs. Crore) as claimed by TANGEDCO in Form-11 TANGEDCO Stations 2010-11 2011-12 2012-13 ETPS 34 36 39 NCTPS 66 69 75 MTPS 32 34 37 TTPS 61 64 70 NCTPS II MTPS II Total Thermal 193 204 220 BBGTPS 18 19 20 Kuttalam 11 12 13 Kovilkalappal 15 16 17 Valuthur 27 29 31 Total Gas 71 75 81 Erode 21 23 24 Kadamparai 11 12 13 Kundah 30 32 35 Tirunelveli 11 12 13 Total Hydro 74 78 85 Tirunelveli - 7 7 8 Wind Udumalpet - 5 5 5 Wind Total Wind 11 12 13 Total 349 369 398 Generation5.5.3 TANGEDCO submitted the details of depreciation on account of assets pertaining to Distribution Business in Form-11 annexed along with the Petition. The depreciation claimed by TANGEDCO for its distribution business is tabulated as under:Table 97: Depreciation for Distribution Function (Rs. Crore) Particulars FY 2010-11 FY 2011-12 FY 2012-13 Depreciation during FY 278.26 307.43 351.61182 | P a g e
    • Commission’s View:5.5.4 The Commission based on revised submission by TANGEDCO on Wind Generation Plants, notes that these wind assets have already lived their useful life and have depreciated upto 90% of the asset value. Hence, no depreciation has been allowed on these Assets.5.5.5 The Commission also observed that vehicles asset class has been depreciated beyond 90% for distribution function for FY 2010-11 and FY 2011-12. Hence, the Commission has not allowed depreciation for this asset class for above mentioned years.5.5.6 The Commission has accepted revised submission of depreciation by TANGEDCO except mentioned above, which is as under:Table 98: Depreciation approved by the Commission for Generation function (Rs. Crore) TNERC Approval Stations FY 11 FY 12 FY 13 ETPS 61 61 61 NCTPS 61 63 64 MTPS 38 40 40 TTPS 53 54 56 NCTPS II MTPS II Total Thermal 213 218 222 BBGTPS 30 30 30 Kuttalam 16 16 17 Kovilkalappal 20 21 21 Valuthur 27 43 46 Total Gas 93 110 114 Erode 14 14 25 Kadamparai 9 9 10 Kundah 22 22 23 Tirunelveli 7 9 10 Total Hydro 52 55 68 Tirunelveli - Wind 0 0 0 Udumalpet - Wind 0 0 0 Total Wind 0 0 0 Total Generation 358 383 404183 | P a g e
    • 5.5.7 The Commission observed that average depreciation rates submitted by TANGEDCO for its distribution function in its Petition was different from the rates specified in TNERC Tariff Regulations. In response to queries raised by the Commission, TANGEDCO resubmitted following depreciation rates to be applied for purpose of calculation of depreciation. The submission of TANGEDCO has been accepted by the Commission, as the same is in line with the Tariff Regulations which is as under:Table 99: Depreciation rates for Distribution Function as submitted by TANGEDCO (Rs.Crore) TANGEDCO Particulars Petition Revised SubmissionLand and Land Rights 0.00% 0.00%Buildings 1.8% 1.80%Hydraulic Works 1.8% 3.09%Other Civil Works 1.8% 1.80%Plant & Machinery 6% 3.60%Lines& Cable Network 3.6% 2.61%Vehicles 18% 18.00%Furniture 6% 6.00%Office Equipment 6% 6.00%5.5.8 The Commission also observed that vehicles asset class has been depreciated beyond 90% and no proper justification was provided to explain the same. Hence, the Commission has not allowed depreciation for this asset class for above mentioned years.5.5.9 Depreciation approved by the Commission for Distribution function is as under:Table 100: Depreciation for Distribution Function approved by the Commission (Rs.Crore) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 Gross Block at the beginning of FY 7810.53 8407.54 9488.48 2 Gross Block at the end of FY 8407.54 9488.48 10596.10 3 Depreciation submitted by 278.26 307.43 351.61 TANGEDCO 4 Depreciation approved by the 229.01 254.05 287.05 Commission184 | P a g e
    • 5.6 Return on Equity:5.6.1 The Commission in the last Tariff Order considered Rs. 100 Crore as the equity addition each year from FY 2010-11 to FY 2012-13 based upon the actual equity infused by the Government of Tamil Nadu in FY 2009-10. The Commission further applied rate of 14% in accordance with Regulation-22 of TNERC Tariff Regulations, 2005 on the closing base of equity allowed from FY 2010-11 to FY 2012-13 in the previous Tariff Order. The Commission allocated the total Return on Equity calculated for TNEB among Generation, Transmission and Distribution Function in the ratio of GFA allowed to the various Generating Stations, Transmission and Distribution Function of TNEB in the last Tariff Order. The Return on Equity as calculated by the Commission from FY 2010-11 to FY 2012-13 is tabulated below:Table 101: Return on Equity allowed by the Commission in last Tariff Order (Rs. Crore) Last Tariff Order Stations FY 11 FY 12 FY 13 ETPS 12 8 8 NCTPS 24 17 17 MTPS 12 8 8 TTPS 22 16 15 NCTPS II 52 52 MTPS II 32 32 Total Thermal 68 134 133 BBGTPS 7 5 5 Kuttalam 4 3 3 Kovilkalappal 4 3 3 Valuthur 10 7 7 Total Gas 25 18 18 Erode 9 10 10 Kadamparai 4 3 3 Kundah 11 8 8 Tirunelveli 4 3 3 Total Hydro 28 24 23 Tirunelveli - 2 1 1 Wind Udumalpet - 1 1 1 Wind Total Wind 3 2 2 Total 124 177 176 Generation Transmission 102 89 95185 | P a g e
    • Last Tariff Order Stations FY 11 FY 12 FY 13 Distribution 134 108 117 Total 360 374 3885.6.2 TANGEDCO in its Petition has not discussed the equity base and rate applied on the equity base for calculating Return on Equity for its generating stations. TANGEDCO has submitted the closing balance of equity pertaining to its generation business along with the Return on Equity from FY 2009-10 to FY 2012-13 in Form-11 of each station annexed along with the Petition. The Station-wise Return on Equity as claimed by TANGEDCO is tabulated below:Table 102: Return on Equity (Rs. Crore) claimed by TANGEDCO TANGEDCO Petition Stations FY 11 FY 12 FY 13 ETPS 19 24 36 NCTPS 37 47 70 MTPS 18 23 34 TTPS 35 43 65 NCTPS II MTPS II Total Thermal 110 137 207 BBGTPS 10 12 19 Kuttalam 6 8 12 Kovilkalappal 8 10 16 Valuthur 16 19 29 Total Gas 41 50 76 Erode 12 15 23 Kadamparai 7 8 12 Kundah 17 22 32 Tirunelveli 6 8 12 Total Hydro 42 53 79 Tirunelveli - 4 5 7 Wind Udumalpet - 3 3 5 Wind Total Wind 6 8 12 Total 199 248 374 Generation186 | P a g e
    • 5.6.3 TANGEDCO submitted that it has calculated the equity pertaining to Distribution Business on the basis of Gross Fixed Assets. TANGEDCO has further considered rate of 14% to calculate Return on Equity. The Return on Equity as claimed by TANGEDCO in the petition from FY 2009-10 to FY 2012-13 is tabulated below:Table 103: Return on Equity from FY 2010-11 to FY 2012-13 for Distribution Business ofTANGEDCO (Rs Crore) Particulars FY 2010-11 FY 2011-12 FY 2012-13 Equity 1091.85 1421.39 1484.90 Return on Equity 152.86 199.00 207.89Commission’s View:5.6.4 The Commission has discussed return on equity for its own generating station in Chapter- 6.5.6.5 Regulation 21 of TNERC Tariff Regulations states as under: “21. Debt-Equity Ratio For the purpose of determination of tariff, debt-equity ratio as on the date of commercial operation of Generating Station and transmission projects, sub-station, distribution lines or capacity expanded after the notification of these Regulations shall be 70:30. Where equity employed is more than 30% the amount of equity shall be limited to 30% and the balance amount shall be considered as loans, advanced at the weighted average rate of interest and for weighted average tenor of the long term debt component of the investment. Provided that in case of a Generating Company or other licensees, where actual equity employed is less than 30%, the actual debt and equity shall be considered for determination of return on equity in tariff computation.” Emphasis Supplied5.6.6 The Commission observed that the TANGEDCO has computed Return on Equity on the closing equity. The Commission is of the opinion that for equity infused during the year, the return should be on pro-rata basis, based on commissioning date of assets. However, it is difficult to track asset wise equity infusion based on commissioning dates. Therefore, the average of opening and closing equity has to be considered for computation of Return on Equity.187 | P a g e
    • Table 104: Funding of Capitalisation (in Rs Crore) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 Capitalisation as per WIP Statement 682 1982 1793 2 Capitalisation as per Form 11 682 1081 1108 3 Loan Borrowing during the year 16628 15153 135105.6.7 It is clear from the above table that the equity infused, if any, is utilised for revenue expenditure, since entire capitalisation requirement is met through loan borrowings. The Commission is of the view that equity if infused as a part of capitalisation can only attract return on Equity. Hence, the Commission has disallowed return on equity as claimed for Distribution function of TANGEDCO. 5.7 Operation and Maintenance Expenses- Distribution:5.7.1 The Operation and Maintenance Expenses comprises of the following: a. Repair and Maintenance Expenses b. Employee Expenses c. Administration and Generation Expenses TANGEDCO’s Submission: Employee Expenses- Distribution5.7.2 TANGEDCO in its Petition has projected employee costs by considering the employee strength and salary profile of the employees. While estimating the costs under this head, the average cost for previous 5 years and actual trend in the year 2009-10 have been considered. On an average, 4% hike is proposed for most of the account heads in the current year 2011-12 & for the ensuing year 2012-13.5.7.3 Terminal benefits mainly include Gratuity & Commuted pension paid to the retiring employees. TANGEDCO submitted that Terminal benefits have been growing over the past 5 years due to higher number of retiring personnel. Thus terminal benefits expenses are estimated to show an increasing trend over the years.5.7.4 TANGEDCO submitted that it incurs expenses towards terminal benefits in the form of Pension and Gratuity. It creates a provision of 3.742% of the Basic Salary, Grade pay and Dearness Allowance during every financial year as reserve. TANGEDCO further submitted that the reserve so created is insufficient to meet the actual expenditure on188 | P a g e
    • pension. Hence, it has assessed the actual commitment on account of pension and booked the same in the employees cost, instead of charging to the pension reserve account. A&G Expenses- Distribution5.7.5 Administration expenses mainly comprises of rent, telephone charges, Legal & professional charges, conveyance and travelling, Vehicle related expenses, etc.5.7.6 While estimating the costs under Administration & General expenses , the average cost for previous 5 years and actual trend in the year 2009-10 have been taken into account. On an average, 4% hike is proposed for most of the expenses in the current year 2011-12 and for the ensuing year 2012-13. R&M Expenses- Distribution5.7.7 Repairs and maintenance (R&M) expenses are routine in nature and being incurred in all the wings viz., Distribution, Generation. Though the quantum of expenditure in Generation stations are more, there are certain portions of Repairs & Maintenance expenses incurred in Distribution network i.e. on Transformers, lines & cables, office equipments, etc., in order to maintain the uninterrupted and quality power supply.5.7.8 TANGEDCO has submitted that it has estimated the R&M expenses for the current financial year 2011-12 & ensuing financial year 2012-13. based on the value of Gross Fixed Assets of the Distribution wing.5.7.9 The O&M expenses as submitted by TANGEDCO for its Distribution function are as under:Table 105: O&M Expenses- Distribution- Past Trend (in Rs Crore) Actuals for previous 5 years AverageS.No. Details of 5 2005-06 2006-07 2007-08 2008-09 2009-10 years 1 Net R&M Expenses 23.43 29.87 29.95 32.46 34.78 30.10 2 Net Employees Cost 1170.91 1363.51 1497.79 1864.81 2122.35 1603.87 3 Net A&G Expenses 57.53 64.12 81.46 69.65 69.76 68.51 4 Total O&M expenses 1251.87 1457.51 1609.20 1966.92 2226.89 1702.48189 | P a g e
    • Table 106: O&M Expenses- TANGEDCO Submission (in Rs Crore) TANGEDCO Submission in Average PetitionS.No. Details Last Tariff Order of 5 FY FY FY FY FY FY years 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 1 Net R&M Expenses 30.10 32.74 34.05 35.41 41.36 43.01 44.73 2 Net Employees Cost 1603.87 2761.59 2964.93 3179.06 2525.15 2626.16 2731.21 3 Net A&G Expenses 68.51 129.07 131.32 141.58 56.55 58.81 61.17 4 Total O&M expenses 1702.48 2923.40 3130.30 3356.05 2623.06 2727.99 2837.11Commission’s View:5.7.10 O&M expenses pertaining to Own Generating Station has been discussed in Chapter-65.7.11 The Commission has been guided by Regulation-25 of TNERC Tariff Regulations while determining Operation and Maintenance Expenses. Regulation-25 of TNERC Tariff Regulations states as under: “25. Operation and Maintenance Expenses 1. The operation and maintenance expenses shall be derived on the basis of actual operation and maintenance expenses for the past five years previous to current year based on the audited Annual Accounts excluding abnormal operation and maintenance expenses, if any, after prudence check by the Commission. The Commission may, if considered necessary engage Consultant / Auditors in the process of prudence check for correctness. 2. The average of such normative operation and maintenance expenses after prudence check shall be escalated at the rate of 4% per annum to arrive at operation and maintenance expenses for current year i.e. base year and ensuing year. 3. The base operation and maintenance expenses so determined shall be escalated further at the rate of 4% per annum to arrive at permissible operation and maintenance expenses for the relevant years of tariff period. …”5.7.12 The Commission observed that TANGEDCO has submitted component-wise O&M Expenses for previous 6 years, i.e., FY 2005-06 to FY 2010-11. The Commission also observed that employee R&M and A&G Expense are within the limit approved by the Commission in its last Tariff Order and also the projection of FY 2011-12 and FY 2012- 13 is consistent with Regulation 25 of TNERC Tariff Regulations. Hence, the190 | P a g e
    • Commission has approved the Employee expenses, R&M expenses and A&G expenses as sought by the TANGEDCO for its Distribution function.5.7.13 The summary of O&M expenses approved by the Commission is as under:Table 107: O&M Expenses (Distribution) approved by the Commission (in Rs Crore) Petition ApprovedS.No. Details FY FY FY FY 2010- FY 2011- FY 2012- 2010-11 2011-12 2012-13 11 12 13 1 Net R&M Expenses 41.36 43.01 44.73 41.36 43.01 44.73 2 Net Employees Cost 2525.15 2626.16 2731.21 2525.15 2626.16 2731.21 3 Net A&G Expenses 56.55 58.81 61.17 56.55 58.81 61.17 4 Total O&M expenses 2623.06 2727.99 2837.11 2623.06 2727.99 2837.11 5.8 Other debits- Distribution5.8.1 The Commission in the last Tariff Order approved the amount claimed on account of other debits except Hydro Balancing Funds as the Commission projected the generation from Hydro Power Station by considering the Capacity Utilisation Factor of 25%. The Commission reduced the capitalization in the same ratio as was submitted by TNEB in the Petition. The other debits as approved by the Commission are tabulated below:Table 108: Other Debits as in Previous Tariff Order (Rs. Crore) Particulars FY 2010-11 FY 2011-12 FY 2012-13 Other Debits 9.56 7.31 7.465.8.2 TANGEDCO in its present Petition submitted that the expenses like material cost variance, bad and doubtful debts, extraordinary expenses etc. are accounted under this head. Out of this material cost variance and miscellaneous losses have been allocated to all the three functions and the remaining functions are allocated to Distribution Business. The expenses on account of other debits as claimed by TANGEDCO are tabulated below:Table 109: Other Debits (Distribution)- TANGEDCO submission (Rs. Crore)S. Particulars FY 2010-11 FY 2011-12 FY 2012-13No. Research & Development 1 0.11 0.11 0.11 expenses191 | P a g e
    • S. Particulars FY 2010-11 FY 2011-12 FY 2012-13No. Bad & Doubtful debts 2 26.38 26.91 27.45 written off Miscellaneous losses and 3 2.30 2.34 2.39 written off/provided for 4 Material cost variance 0.46 0.47 0.48 5 Sundry expenses 0 0 0 6 Extra ordinary debits 0.11 0.11 0.11 Total 29.36 29.95 30.55 Less: Capitalisation 1.34 1.37 1.40 Net expenses 28.02 28.58 29.15Commission’s View:5.8.3 Regulation 29 of TNERC Tariff Regulations states as under: “29. Bad and Doubtful Debt The Commission may consider and allow a provision upto 0.25% of receivables for writing off of bad and doubtful debts. The licensee or Generating Company shall write off the Bad and Doubtful debts as per the procedure laid down by them.”5.8.4 The Commission observed that provision of writing off bad and doubtful debt as submitted by TANGEDCO is within the permissible limit of 0.25% of receivable from sale of power at existing tariff. Hence, the Commission has approved the same.5.8.5 The Commission is also of the opinion that all other expense subheads under ‘Other debits’ are also within reasonable limits. Hence, the Commission has approved the same.Table 110: Other Debits (Distribution) - TANGEDCO submission (Rs. Crore) Petition ApprovedS. Particulars FY 11 FY 12 FY 13 FY 11 FY 12 FY 13No. Research & 1 Development 0.11 0.11 0.11 0.11 0.11 0.11 expenses Bad & Doubtful 2 debts written 26.38 26.91 27.45 26.38 26.91 27.45 off Miscellaneous losses and 3 2.30 2.34 2.39 2.30 2.34 2.39 written off/provided for 4 Material cost 0.46 0.47 0.48 0.46 0.47 0.48192 | P a g e
    • Petition ApprovedS. Particulars FY 11 FY 12 FY 13 FY 11 FY 12 FY 13No. variance Sundry 5 0 0 0 0 0 0 expenses Extra ordinary 6 0.11 0.11 0.11 0.11 0.11 0.11 debits Total 29.36 29.95 30.55 29.36 29.95 30.55 Less: 1.34 1.37 1.40 1.34 1.37 1.40 Capitalisation Net expenses 28.02 28.58 29.15 28.02 28.58 29.15 5.9 Prior Period Debit/(Credit) charges:5.9.1 TANGEDCO in its Petition submitted that the expenses pertaining to prior period like short provision of power purchase, Material related expenses, employee cost, Interest and finance charges and Other Charges are accounted under this head. The expenses on account of other debits as claimed by TANGEDCO are tabulated below:Table 111: Prior Period Debit/(Credit) charges (Distribution)- TANGEDCO submission(Rs. Crore)S. Particulars 2010-11 2011-12 2012-13No. Income relating to previous 1 348.46 0.00 0.00 year 2 Prior Period expenses /losses Short provision for power a 0.00 purchase 1003.40 236.29 b Material related expenses 0.01 c Employees cost 67.66 d Interest & Finance charges 2.06 e Other charges 7.17 Total 1080.30 236.29 0.00 Net prior period/credit 731.85 236.29 0.00Commission’s View:5.9.2 The Commission observed that debits and credits pertaining to prior period for FY 2010- 11 actually pertains to FY 2009-10 and is of the opinion that prior period charges should be addressed in the financial restructuring plan by TANGEDCO. The Commission is also allowing entire expenditure for Power purchase, employee cost, Interest and finance193 | P a g e
    • charges, etc, based on prudence check. Hence, the Commission is of the opinion that allowing these expenses again under this head would be a double accounting of these expenses. Hence, the Commission is not allowing expenses as claimed by TANGEDCO under his head for FY 2010-11 and FY 2011-12.5.9.3 If there is any variation between various expense heads approved by the Commission and actual expenses, TANGEDCO can approach the Commission with appropriate justification for truing up based on Audited Accounts and the Commission would revisit the expenses based on prudence check. 5.10 Demand Side Management5.10.1 The Commission in its previous Tariff Order had provisionally allowed Rs.10 Crores in the ARR for the purpose of carrying out the activities of Energy Conservation and Demand Side Management (DSM).5.10.2 However, the TANGEDCO in its Petition has not claimed any expenses towards DSM for the Control Period.5.10.3 The Commission is of the opinion that since FY 2010-11 and FY 2011-12 are already over and there is no expense claimed towards DSM by TANGEDCO, the Commission is not allowing the same for above mentioned period. However, the Commission retains Rs 10 Crore approval for FY 2012-13. 5.11 Summary of fixed Cost approved for Distribution functionTable 112: Summary of Fixed Cost – Distribution Function approved by the Commission(Rs. Crore) Last Tariff Order Petition Approved Particulars FY FY FY FY FY FY FY FY FY 11 12 13 11 12 13 11 12 13Operation and MaintenanceExpenses 2923 3130 3356 2623 2728 2837 2623 2728 2837Depreciation 349 393 434 278 307 352 229 254 287Interest on Long term loan 1428 1325 1475 1651 3150 3355 1651 3150 3355Other Debits & extra ordinaryitems 10 7 7 28 29 29 28 29 29Prior Period Debit/(Credit)Charges 0 0 0 732 236 0 0 0 0Reasonable Return / Return on 134 108 117 153 199 208 0 0 0194 | P a g e
    • Last Tariff Order Petition Approved Particulars FY FY FY FY FY FY FY FY FY 11 12 13 11 12 13 11 12 13EquityDemand Side Management 10 10 10 0 0 0 0 0 10Total 4854 4973 5399 5465 6649 6780 4531 6161 6518195 | P a g e
    • 6 Expenses on account of GenerationIn this Section, the Commission in accordance with TNERC (Terms and Conditions fordetermination of Tariff) Regulations, 2005 has analysed the expenses on account of Generationbusiness of TANGEDCO from FY 2010-11 to FY 2012-13 with reference to the Tariff Orderdated July 31, 2010.In respect of components of Tariff for Generating Stations, Regulation-36 of TNERC TariffRegulations, 2005 states as under: “36. Components of Tariff 1. The tariff for sale of power by the Generating Companies shall be of two part namely the Fixed Charges (recovery of annual capacity charges) and variable (energy) charges. 2. The Fixed (annual capacity) charges shall consist of the following elements: a. Interest on Loan Capital; b. Depreciation c. Return on Equity; d. Operation and Maintenance expenses; and e. Interest on Working Capital: 3. The energy (variable) charges shall cover fuel cost.”Therefore the cost for Thermal Power Stations comprises of two components, i.e., Fixed Costand Variable Cost. This Section has been organised in the following manner: a. Part-I: Fixed Cost: Expenses on account of various expenses of fixed cost for all generating stations have been discussed. b. Part-II: Variable Cost: Variable Cost in respect of various Thermal Power Stations, Gas Turbine Power Stations and Primary energy charges of Hydro Generating Stations have been discussed.Part-I: Fixed Cost:6.1.1 In absence of segregation of expenses, the Commission in the Previous Tariff Order allocated the expenses on account of various elements of fixed cost as detailed in Regulation-37 of TNERC Tariff Regulations, 2005 among Generation, Transmission and Distribution function on the basis of certain assumptions. For the purpose of196 | P a g e
    • determination of GFA for each Generating station, Transmission Function and Distribution Function, the Commission referred to the balance sheet of the generating stations, Audited Accounts for FY 2007-08 and preliminary accounts for FY 2008-09.6.1.2 TANGEDCO in its Petition has not discussed the fixed cost of various Thermal Power Stations. However in the formats attached along with the Petition, TANGEDCO has submitted the expenses on account of various heads of fixed cost from FY 2010-11 to FY 2012-13.6.1.3 The fixed cost mainly comprises of the following elements: a. Interest on Loan Capital b. Depreciation c. Return on Equity d. Operation and Maintenance Expenses e. Interest on Working Capital6.1.4 In accordance with Order No.3 dated 15-05-2006, the Commission has determined a tariff of Rs. 2.75 / unit for the wind power projects commissioned, and to be commissioned based on agreements executed prior to 15-05-2006. Therefore the Commission has not calculated the fixed cost for Wind Power Projects.6.1.5 The Commission has discussed all the components of fixed cost except Return on Equity and Operation and Maintenance expenses pertaining to Generation function of TANGEDCO in detail in the Chapter of expenditure. The Commission has provided the Station-wise break-up of GFA, Depreciation and Interest on Loan in the chapter of Capital expenditure. Return on Equity and Operation and Maintenance expenses in respect of each Generating Station have been explained below:Return on Equity:6.1.6 The Commission in the Previous Tariff Order considered Rs. 100 Crore as the equity addition each year from FY 2010-11 to FY 2012-13 based upon the actual equity infused by the Government of Tamil Nadu in FY 2009-10. The Commission further applied rate of 14% in accordance with Regulation-22 of TNERC Tariff Regulations, 2005 on the closing base of equity allowed from FY 2010-11 to FY 2012-13 in the previous Tariff Order. The Commission allocated the total Return on Equity calculated for TNEB among Generation, Transmission and Distribution Function in the ratio of GFA allowed to the various Generating Stations, Transmission and Distribution Function of TNEB in the197 | P a g e
    • Previous Tariff Order. The Return on Equity as calculated by the Commission from FY 2010-11 to FY 2012-13 in the previous Tariff Order is tabulated below:Table 113: Return on Equity allowed by the Commission in Previous Tariff Order (Rs. Crore) Previous Tariff Order Stations FY 11 FY 12 FY 13 ETPS 12 8 8 NCTPS 24 17 17 MTPS 12 8 8 TTPS 22 16 15 NCTPS II 52 52 MTPS II 32 32 Total Thermal 68 134 133 BBGTPS 7 5 5 Kuttalam 4 3 3 Kovilkalappal 4 3 3 Valuthur 10 7 7 Total Gas 25 18 18 Erode 9 10 10 Kadamparai 4 3 3 Kundah 11 8 8 Tirunelveli 4 3 3 Total Hydro 28 24 23 Tirunelveli - 2 1 1 Wind Udumalpet - 1 1 1 Wind Total Wind 3 2 2 Total 124 178 176 Generation6.1.7 TANGEDCO in its Petition has not discussed the equity base and rate applied on the equity base for calculating Return on Equity for its generating stations in the Petition. TANGEDCO has submitted the closing balance of equity pertaining to its generation business along with the Return on Equity from FY 2009-10 to FY 2012-13 in Form-11 of each station attached along with the Petition. The Station-wise Return on Equity as claimed by TANGEDCO is tabulated below:198 | P a g e
    • Table 114: Return on Equity claimed by TANGEDCO (Rs. Crore) TANGEDCO Petition Stations FY 11 FY 12 FY 13 ETPS 19 24 36 NCTPS 37 47 70 MTPS 18 23 34 TTPS 35 43 65 NCTPS II MTPS II Total Thermal 110 137 207 BBGTPS 10 12 19 Kuttalam 6 8 12 Kovilkalappal 8 10 16 Valuthur 16 19 29 Total Gas 41 50 76 Erode 12 15 23 Kadamparai 7 8 12 Kundah 17 22 32 Tirunelveli 6 8 12 Total Hydro 42 53 79 Tirunelveli - 4 5 7 Wind Udumalpet - 3 3 5 Wind Total Wind 6 8 12 Total 199 248 374 GenerationCommission’s View:6.1.8 The Commission has been guided by Regulation-22 of TNERC Tariff Regulations, 2005 while calculating Return on Equity on the equity base of TANGEDCO from FY 2010-11 to FY 2012-13. Regulation-22 of TNERC Tariff Regulations, 2005 states as under: “22. Return on Equity Return on equity shall be computed on the equity base determined in accordance with Regulation 21 @14% per annum. The return shall be allowed post tax.”199 | P a g e
    • 6.1.9 TANGEDCO in reply to data gaps revised the equity base for its various generating stations and Return on Equity from FY 2010-11 to FY 2012-13 which is tabulated below:Table 115: Equity base as submitted by TANGEDCO in Revised submission (Rs. Crore) Stations FY 2010-11 FY 2011-12 FY 2012-13 FY 2013-14 ETPS 84 145 171 240 NCTPS 184 272 329 470 MTPS 92 137 171 244 TTPS 169 256 306 446 NCTPS II MTPS II Total Thermal 528 809 977 1400 BBGTPS 51 75 88 124 Kuttalam 32 48 57 85 TGTPS 35 62 74 105 Valuthur 49 74 137 205 Total Gas 167 259 356 520 Erode 62 91 107 264 Kadamparai 32 48 57 88 Kundah 85 129 152 222 Tirunelveli 24 41 67 102 Total Hydro 203 309 384 675 Tirunelveli - Wind 19 19 19 19 Udumalpet - Wind 10 10 10 10 Total Wind 30 30 30 30 Total Generation 928 1406 1746 2624Table 116: Return on Equity Revised Submission of TANGEDCO (Rs. Crore) Revised Submission Stations FY 11 FY 12 FY 13 ETPS 20 24 34 NCTPS 38 46 66 MTPS 19 24 34 TTPS 36 43 62 NCTPS II MTPS II Total Thermal 113 137 196200 | P a g e
    • Revised Submission Stations FY 11 FY 12 FY 13 BBGTPS 11 12 17 Kuttalam 7 8 12 TGTPS 9 10 15 Valuthur 10 19 29 Total Gas 37 50 73 Erode 13 15 37 Kadamparai 7 8 12 Kundah 18 21 31 Tirunelveli 6 9 14 Total Hydro 44 54 95 Tirunelveli - Wind 4 5 7 Udumalpet - Wind 3 3 4 Total Wind 7 8 11 Total Generation 201 250 3756.1.10 The Commission observed that TANGEDCO has submitted substantial increase in equity base each year from FY 2010-11 to FY 2012-13. The Commission is of the view that equity addition can be allowed in a Financial Year only if there is additional capitalisation during that particular year. Regulation-19 of TNERC Tariff Regulations, 2005 states as under: “19. Additional Capitalization 1. The capital expenditure within the original scope of work actually incurred in respect of the following items after the date of commencement of operation and upto the cut off date may be admitted by the Commission, subject to prudence check. i. Deferred liabilities ii. Works deferred for execution iii. Procurement of initial spares subject to the ceiling specified in Regulation 18.5. iv. Liabilities to meet award of arbitration or for compliance of the order or decree of a court.201 | P a g e
    • v. On account of change of law vi. Any additional works / services which have become necessary for efficient and successful operation of the Generating Station, but not included in the original project cost. 2. Any expenditure on minor items / assets like normal tools and tackles, personal computers, furniture, air conditioners, etc. bought after the cut off date shall not be considered for additional capitalisation for determination of tariff. 3. The impact of additional capitalisation in tariff revision may be considered by the Commission twice in a tariff period, including revision of tariff after the cut off date.”6.1.11 TANGEDCO has not taken approval from the Commission for additional capitalisation from FY 2010-11 to FY 2012-13. Therefore the Commission in this Order is provisionally considering the revised submission of TANGEDCO for the purpose of calculation of Return on Equity.6.1.12 The Commission has calculated the Return on Equity on average of Opening and Closing balance of equity base from FY 2010-11 to FY 2012-13 as submitted by TANGEDCO in its revised submission. The Commission has assumed that the equity infusion during the respective years will be at the mid of the year. The Commission has further applied rate of 14% in accordance with Regulation-22 of TNERC Tariff Regulations, 2005 for calculating Return on Equity. The Return on equity calculated by the Commission from FY 2010-11 to FY 2012-13 is tabulated below:Table 117: Return on Equity from FY 2010-11 to FY 2012-13 (Rs. Crore) TANGEDCO Previous Tariff TANGEDCO Revised Commission Order Petition Stations Submission FY FY FY FY FY FY FY FY FY FY FY FY 11 12 13 11 12 13 11 12 13 11 12 13 ETPS 12 8 8 19 24 36 20 24 34 16 22 29 NCTPS 24 17 17 37 47 70 38 46 66 32 42 56 MTPS 12 8 8 18 23 34 19 24 34 16 22 29 TTPS 22 16 15 35 43 65 36 43 62 30 39 53 NCTPS II 52 52 MTPS II 32 32 Total 70 134 133 110 137 207 113 137 196 94 125 166202 | P a g e
    • TANGEDCO Previous Tariff TANGEDCO Revised Commission Order Petition Stations Submission FY FY FY FY FY FY FY FY FY FY FY FY 11 12 13 11 12 13 11 12 13 11 12 13 Thermal BBGTPS 7 5 5 10 12 19 11 12 17 9 11 15 Kuttalam 4 3 3 6 8 12 7 8 12 6 7 10 Kovilkalappal 4 3 3 8 10 16 9 10 15 7 9 13 Valuthur 10 7 7 16 19 29 10 19 29 9 15 24 Total Gas 25 18 18 41 50 76 37 50 73 30 43 61 Erode 9 10 10 12 15 23 13 15 37 11 14 26 Kadamparai 4 3 3 7 8 12 7 8 12 6 7 10 Kundah 11 8 8 17 22 32 18 21 31 15 20 26 Tirunelveli 4 3 3 6 8 12 6 9 14 5 8 12 Total Hydro 28 24 23 42 53 79 44 54 95 36 48 74 Tirunelveli - 2 1 1 4 5 7 4 5 7 0 0 0 Wind Udumalpet - 1 1 1 3 3 5 3 3 4 0 0 0 Wind Total Wind 3 2 2 6 8 12 7 8 11 0 0 0 Total 124 177 176 199 248 374 201 250 375 159 216 301 Generation6.1.13 The Commission directs TANGEDCO to submit separate Petition for approval of additional capitalisation along with all details within three months of the date of issuance of this Order.Operation and Maintenance Expenses:6.1.14 The Operation and Maintenance Expenses comprises of the following: a. Repair and Maintenance Expenses b. Employee Expenses c. Administration and General Expenses6.1.15 In the Previous Tariff Order based upon the detailed scrutiny and additional information submitted by TNEB, the Commission approved the following O&M Expenses from FY 2010-11 to FY 2012-13:203 | P a g e
    • Table 118: O&M Expenses approved in the Previous Tariff Order (Rs. Crore) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 Net Repair & 237.67 247.23 257.12 Maintenance Expenses 2 Net Employees Cost 3577.98 3841.46 4119.05 3 Net Admn. & General 252.8 257.82 272.15 Expneses 4 Total Operation and 4068.45 4346.51 4648.32 Maintenance expenses6.1.16 The Commission further allocated the O&M Expenses among Generation, Transmission and Distribution Functions. The O&M Expenses as approved by the Commission from FY 2010-11 to FY 2012-13 in its Previous Tariff Order is tabulated below: Table 119: O&M Expenses (excluding Operating Charges) - Station-wise (Rs. Crore) Previous Tariff Order Stations FY 11 FY 12 FY 13 ETPS 113 119 126 NCTPS 132 138 145 MTPS 87 92 97 TTPS 120 127 134 Total Thermal 451 476 502 BBGTPS 10 11 11 Kuttalam 13 14 14 Kovilkalappal 10 10 11 Valuthur 13 14 14 Total Gas 47 49 51 Erode 35 38 40 Kadamparai 30 32 34 Kundah 48 50 53 Tirunelveli 35 38 41 Total Hydro 149 158 168 Tirunelveli - 8 9 10 Wind Udumalpet - 3 4 4 Wind Total Wind 12 13 14204 | P a g e
    • Previous Tariff Order Stations FY 11 FY 12 FY 13 Total 658 695 734 Generation6.1.17 TANGEDCO in its Petition has not discussed the O&M Expenses for its generation business. TANGEDCO has submitted the O&M Expenses from FY 2009-10 to FY 2012- 13 in Form-19 of each station attached along with the Petition. TANGEDCO has also submitted the component-wise break-up of Employee expenses, R&M Expenses and A&G Expenses in Form- 17, Form-16 and Form-18 respectively. The O&M Expenses submitted by TANGEDCO in the Petition are tabulated below: Table 120: O&M Expenses as submitted by TANGEDCO (Rs. Crore) TANGEDCO Petition Stations FY 11 FY 12 FY 13 ETPS 95 140 146 NCTPS 121 149 155 MTPS 117 90 93 TTPS 147 124 129 Total Thermal 480 503 523 BBGTPS 6 10 10 Kuttalam 21 17 18 Kovilkalappal 7 11 12 Valuthur 11 10 10 Total Gas 45 47 49 Erode 34 27 28 Kadamparai 19 21 21 Kundah 39 37 39 Tirunelveli 23 28 29 Total Hydro 116 113 117 Tirunelveli - 4 4 4 Wind Udumalpet - 3 3 3 Wind Total Wind 7 7 7* Total 648 670 696 Generation * While GFA for wind and associated Transmission has been separated, the O&M expenses could not be separated.205 | P a g e
    • Commission’s View:6.1.18 The Commission has been guided by Regulation-25 of TNERC Tariff Regulations while determining Operation and Maintenance Expenses. Regulation-25 of TNERC Tariff Regulations states as under: “25. Operation and Maintenance Expenses 1. The operation and maintenance expenses shall be derived on the basis of actual operation and maintenance expenses for the past five years previous to current year based on the audited Annual Accounts excluding abnormal operation and maintenance expenses, if any, after prudence check by the Commission. The Commission may, if considered necessary engage Consultant / Auditors in the process of prudence check for correctness. 2. The average of such normative operation and maintenance expenses after prudence check shall be escalated at the rate of 4% per annum to arrive at operation and maintenance expenses for current year i.e. base year and ensuing year. 3. The base operation and maintenance expenses so determined shall be escalated further at the rate of 4% per annum to arrive at permissible operation and maintenance expenses for the relevant years of tariff period. …”6.1.19 The Commission observed that TANGEDCO has submitted component-wise O&M Expenses for previous 6 years, i.e., FY 2005-06 to FY 2010-11. The Commission also observed that O&M Expenses for various Stations of TANGEDCO have uneven pattern. The basis for approval of O&M Expenses for various Stations of TANGEDCO is detailed as under: Thermal Power Stations:6.1.20 For Ennore TPS, the Commission observed that TANGEDCO has submitted O&M Expenses data for previous 5 years only, i.e., from FY 2006-07 to FY 2010-11. The Commission has accepted the O&M Expenses as submitted by TANGEDCO for FY 2010-11. However the Commission is of the view that the employee expenses of ETPS are very high. The Commission understands that ETPS is going to be decommissioned by FY 2016-17. Therefore, TANGEDCO may consider re-deployment of Manpower in case of ETPS so as to have efficient utilization of resources.206 | P a g e
    • 6.1.21 For FY 2011-12 and FY 2012-13, the Commission has considered 4% increase on year- on-year basis considering FY 2010-11 as the base year. The O&M expenses for Ennore TPS are tabulated below: Table 121: O&M Expenses for Ennore TPS (Rs. Lakh) FY 2010-11 FY 2011-12 FY 2012-13 Particulars Petition Commission Petition Commission Petition Commission R&M 3207 3207 7298 3336 7590 3469 Expenses Employees 5411 5411 5534 5627 5756 5852 Expenses A&G Expenses 892 892 1203 928 1252 965 Total O&M 9510 9510 14036 9891 14598 10286 Expenses6.1.22 For TTPS, the Commission observed that from FY 2005-06 to FY 2007-08, the O&M expenses varied in between Rs. 8500 Lakh and Rs. 9500 Lakh. In FY 2008-09, there was an abnormal increase of Rs. 4200 Lakh due to which O&M expenses rose to Rs. 13527.20 Lakh. In FY 2009-10, the O&M expenses are Rs. 12556.40 Lakh which means reduction by Rs. 1000 Lakh. As regards FY 2010-11, TANGEDCO has submitted actual expenses of Rs. 14664.32 Lakh during FY 2010-11 which is again an abnormal increase of Rs. 2100 Lakh. Therefore, the Commission has relied on average of 5 years, i.e., from FY 2005-06 to FY 2009-10 for calculation of O&M Expenses in FY 2010-11. The Commission has further considered an escalation of 4% on year on year basis for projecting O&M expenses in FY 2011-12 and FY 2012-13 on approved O&M expenses of FY 2010-11. Table 122: O&M Expenses for TTPS (Rs. Lakh) FY 2010-11 FY 2011-12 FY 2012-13 Particulars Petition Commission Petition Commission Petition Commission R&M 5860 3182 4012 3309 4173 3442 Expenses Employee 7254 5588 6305 5812 6557 6044 Expenses A&G 1550 1958 2059 2036 2141 2118 Expenses Total O&M 14664 10728 12376 11157 12871 11603 Expenses207 | P a g e
    • 6.1.23 For MTPS, the Commission observed that there is an abnormal increase of Rs. 6000 Lakh in FY 2008-09 and reduction by Rs. 3000 Lakh in FY 2009-10. Therefore the Commission has followed the same methodology as detailed in case of TTPS. Table 123: O&M Expenses for MTPS (Rs. Lakh) FY 2010-11 FY 2011-12 FY 2012-13 Particulars Petition Commission Petition Commission Petition Commission R&M 3274 2617 2249 2722 2339 2831 Expenses Employees 6744 4558 5450 4740 5668 4930 Expenses A&G 1640 1107 1266 1151 1316 1197 Expenses Total O&M 11657 8282 8965 8613 9324 8957 Expenses6.1.24 For NCTPS, the Commission feels that the O&M expenses during FY 2010-11 as submitted by TANGEDCO are reasonable. The Commission has approved the same for FY 2010-11. For FY 2011-12 and FY 2012-13, the Commission has considered 4% increase on year-on-year basis considering FY 2010-11 as the base year. Table 124: O&M Expenses for NCTPS (Rs. Lakh) FY 2010-11 FY 2011-12 FY 2012-13 Particulars Petition Commission Petition Commission Petition Commission R&M 5418 5418 9204 5635 9572 5861 Expenses Employees 5682 5682 4429 5909 4606 6145 Expenses A&G 1039 1039 1279 1080 1330 1124 Expenses Total O&M 12139 12139 14911 12624 15508 13129 Expenses208 | P a g e
    • Gas Turbine Power Stations:6.1.25 In case of Gas Turbine Power Stations, the Commission has accepted the submission of TANGEDCO towards O&M expenses in FY 2010-11 for all GTPS except VGTPS.6.1.26 In case of VGTPS, the Commission observed that TANGEDCO has submitted the employee expenses as negative. The Commission is of the view that the employee expenses cannot be negative. Hence, the Commission has taken 4 years average of past 4 years, i.e., from FY 2005-06 to FY 2007-08 and FY 2009-10. Since FY 2008-09 has negative figures, the Commission has not considered the same for calculation of O&M Expenses.6.1.27 The Commission found many discrepancies in the data submitted by TANGEDCO. The Commission directs TANGEDCO to properly submit the data in next Tariff Petition.6.1.28 As regards FY 2011-12 and FY 2012-13, the Commission has taken 4% escalation considering FY 2010-11 as the base year. Table 125: O&M Expenses for BBGTPS (Rs. Lakh) FY 2010-11 FY 2011-12 FY 2012-13 Particulars Petition Commission Petition Commission Petition Commission R&M Expenses 78 78 306 82 318 85 Employee 368 368 370 383 385 398 Expenses A&G Expenses 152 152 293 158 305 164 O&M Expenses 598 598 969 622 1008 647 Table 126: O&M Expenses for KGTPS (Rs. Lakh) FY 2010-11 FY 2011-12 FY 2012-13 Particulars Petition Commission Petition Commission Petition Commission R&M Expenses 1557 1557 1229 1229 1278 1278 Employee 320 320 160 160 166 166 Expenses A&G Expenses 189 189 315 315 328 328 O&M Expenses 2066 2066 1704 1704 1772 1772209 | P a g e
    • Table 127: O&M Expenses for TGTPS (Rs. Lakh) FY 2010-11 FY 2011-12 FY 2012-13 Particulars Petition Commission Petition Commission Petition Commission R&M Expenses 154 154 571 160 594 166 Employee 359 359 283 373 294 388 Expenses A&G Expenses 232 232 270 242 281 251 O&M Expenses 745 745 1125 774 1170 805 Table 128: O&M Expenses for VGTPS (Rs. Lakh) FY 2010-11 FY 2011-12 FY 2012-13 Particulars Petition Commission Petition Commission Petition Commission R&M Expenses 1039 192 360 200 374 208 Employee -364 130 114 135 119 140 Expenses A&G Expenses 402 506 499 527 519 548 O&M Expenses 1076 828 974 862 1012 896 Hydro Generating Stations:6.1.29 For Hydro Generating Stations, the Commission opines that the O&M expenses submitted by TANGEDCO for FY 2010-11 are reasonable. Therefore, the Commission has accepted the submission of TANGEDCO towards FY 2010-11. As regards FY 2011- 12 and FY 2012-13, the Commission has taken 4% escalation considering FY 2010-11 as the base year. Table 129: Erode Generation Circle (Rs. Lakh) FY 2010-11 FY 2011-12 FY 2012-13 Particulars Petition Commission Petition Commission Petition Commission R&M Expenses 104 104 161 109 167 113 Employees 2865 2865 1777 2979 1848 3099 Expenses A & G Expneses 472 472 748 491 778 510 Total O&M 3441 3441 2686 3579 2793 3722 Expenses210 | P a g e
    • Table 130: Kundah Generation Circle (Rs. Lakh) FY 2010-11 FY 2011-12 FY 2012-13 Particulars Petition Commission Petition Commission Petition Commission R&M Expenses 316 316 223 223 232 232 Employee 2227 2227 1996 1996 2075 2075 Expenses A&G Expenses 1327 1327 1515 1515 1576 1576 Total O&M 3870 3870 3734 3734 3883 3883 Expenses Table 131: Kadamparai Generation Circle (Rs. Lakh) FY 2010-11 FY 2011-12 FY 2012-13 Particulars Petition Commission Petition Commission Petition Commission R&M Expenses 183 183 263 191 274 198 Employee 1470 1470 1260 1529 1311 1590 Expenses A&G Expenses 272 272 538 283 560 295 Total O&M 1926 1926 2062 2003 2144 2083 Expenses Table 132: Tirunelveli Generation Circle (Rs. Lakh) FY 2010-11 FY 2011-12 FY 2012-13 Particulars Petition Commission Petition Commission Petition Commission R&M Expenses 171 171 643 178 669 185 Employee 1833 1833 1550 1906 1612 1982 Expenses A&G Expenses 325 325 559 338 582 351 Total O&M 2329 2329 2752 2422 2862 2519 ExpensesOther debts and Miscellaneous Income:6.1.30 The Commission observed that other debts are within the limits approved by the Commission in Previous Tariff Order. The Commission has considered other debts and miscellaneous income as the same as submitted by TANGEDCO in the Petition.211 | P a g e
    • 6.1.31 Based upon the above discussion, the fixed charges for various Generating Stations are tabulated below: Table 133: Fixed Charges for Ennore TPS (Rs. Crore) Petition 2011 Revised Submission TNERC ApprovalComponents/Year 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13Depreciation 34.0 35.9 38.8 61.0 61.3 61.4 60.9 61.2 61.4Interest on Loan 12.1 57.5 91.5 8.2 8.5 8.4 8.2 8.5 8.4Return on Equity 19.4 24.2 36.5 20.2 23.9 33.6 16.0 22.1 28.8O&M Expenses 95.1 140.4 146.0 95.1 140.4 146.0 95.1 98.9 102.9Other Debts 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2Less: Misc Income 4.1 6.0 6.0 4.1 6.0 6.0 4.1 6.0 6.0Total 156.7 252.1 306.9 180.6 228.3 243.6 176.3 184.9 195.6 Table 134: Fixed Charges for TTPS (Rs. Crore) Petition 2011 Revised Submission TNERC Approval Components/Year 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 Depreciation 60.9 64.4 69.6 52.9 53.9 55.9 52.9 53.9 55.9 Interest on Loan 21.7 103.1 163.9 14.5 15.3 15.6 14.5 15.3 15.6 Return on Equity 34.8 43.3 65.4 35.8 42.9 62.4 29.7 39.3 52.6 O&M Expenses 146.6 123.8 128.7 146.6 123.8 128.7 107.3 111.6 116.0 Other Debts 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 Less: Misc Income 18.8 13.9 13.9 18.8 13.9 13.9 18.8 13.9 13.9 Total 245.6 321.0 414.0 231.4 222.3 249 185.9 206.5 226.6 Table 135: Fixed Charges for MTPS (Rs. Crore) Petition 2011 Revised Submission TNERC ApprovalComponents/Year 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13Depreciation 32.2 34.0 36.7 37.6 39.8 40.5 37.6 39.7 40.5Interest on Loan 11.4 54.4 86.5 7.8 8.5 8.5 7.8 8.5 8.5Return on Equity 18.4 22.9 34.5 19.2 23.9 34.1 16.0 21.6 29.0O&M Expenses 116.6 89.6 93.2 116.6 89.6 93.2 82.8 86.1 89.6Other Debts 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2Less: Misc Income 21.8 14.1 14.1 21.8 14.1 14.1 21.8 14.1 14.1Total 156.9 187.0 237.0 159.6 147.9 162.4 122.6 142.0 153.6212 | P a g e
    • Table 136: Fixed Charges for NCTPS (Rs. Crore) Petition 2011 Revised Submission TNERC ApprovalComponents/Year 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13Depreciation 65.5 69.3 74.8 61.5 63.3 64.4 61.5 63.3 64.4Interest on Loan 23.3 110.8 176.3 15.4 16.5 16.4 15.4 16.5 16.4Return on Equity 37.5 46.6 70.3 38.1 46.1 65.8 31.9 42.1 55.9O&M Expenses 121.4 149.1 155.1 121.4 149.1 155.1 121.4 126.2 131.3Other Debts 0.3 0.4 0.4 0.3 0.4 0.4 0.3 0.4 0.4Less: Misc Income 14.2 10.7 10.7 14.2 10.7 10.7 14.2 10.7 10.7Total 233.9 365.5 466.1 222.5 264.7 291.40 216.3 237.8 257.8 Table 137: Fixed Charges for KGTPS (Rs. Crore) Petition 2011 Revised Submission TNERC ApprovalComponents/Year 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13Depreciation 11.26 11.90 12.86 15.83 15.86 17.06 15.83 15.86 17.06Interest on Loan 4.01 19.05 30.30 2.72 2.83 2.98 2.72 2.83 2.98Return on Equity 6.44 8.01 12.08 6.72 7.92 11.95 5.63 7.32 9.94O&M Expenses 20.66 17.06 17.75 20.66 17.04 17.72 20.66 17.04 17.72Other Debts 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06Less: Misc Income 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01Total 42.4 56.1 73.0 46.0 43.7 49.76 44.9 43.1 47.8 Table 138: Fixed Charges for BBGTPS (Rs. Crore) Petition 2011 Revised Submission TNERC ApprovalComponents/Year 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13Depreciation 17.6 18.6 20.1 30.0 30.0 30.0 30.0 30.0 30.0Interest on Loan 6.3 29.7 47.3 4.2 4.4 4.3 4.2 4.4 4.3Return on Equity 10.0 12.5 18.9 10.5 12.4 17.3 8.8 11.4 14.9O&M Expenses 6.0 9.7 10.1 6.0 9.7 10.1 6.0 6.2 6.5Other Debts 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Less: Misc Income 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1Total 39.9 70.4 96.2 50.8 56.5 61.7 49.2 52.1 55.6 Table 139: Fixed Charges for TGTPS (Rs. Crore) Petition 2011 Revised Submission TNERC ApprovalComponents/Year 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13Depreciation 14.7 15.5 16.8 20.3 20.6 20.9 20.2 20.6 20.9213 | P a g e
    • Petition 2011 Revised Submission TNERC Approval Components/Year 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 Interest on Loan 5.2 24.8 39.5 3.5 3.7 3.7 3.5 3.7 3.7 Return on Equity 8.4 10.4 15.8 8.6 10.3 14.7 6.8 9.5 12.5 O&M Expenses 7.4 11.2 11.7 7.4 11.2 11.7 7.4 7.7 8.1 Other Debts 0.08 0.08 0.08 0.08 0.08 0.08 0.1 0.1 0.1 Less: Misc Income 0.05 0.11 0.11 0.05 0.11 0.11 0.0 0.1 0.1 Total 35.8 62.0 83.7 39.8 45.8 50.97 38.0 41.5 45.1 Table 140: Fixed Charges for VGTPS (Rs. Crore) Petition 2011 Revised Submission TNERC Approval Components/Year 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 Depreciation 27.3 28.9 31.2 27.3 43.1 46.0 27.3 43.1 46.0 Interest on Loan 9.7 46.2 73.5 4.2 6.9 7.2 4.2 6.9 7.2 Return on Equity 15.6 19.4 29.3 10.4 19.2 28.8 8.6 14.8 24.0 O&M Expenses 10.8 9.7 10.1 10.8 9.7 10.1 7.9 8.2 8.5 Other Debts 0.1 0.1 0.2 0.1 0.2 0.2 0.1 0.2 0.2 Less: Misc Income 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Total 63.5 104.3 144.2 52.7 79 92.2 48.1 73.1 85.7 Table 141: Fixed Charges for Erode Generation Circle (Rs. Crore) Petition 2011 Revised Submission TNERC ApprovalComponents/Year 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13Depreciation 21.35 22.58 24.39 14.08 14.12 24.69 14.07 14.11 24.69Interest on Loan 7.60 36.13 57.46 5.16 5.37 9.21 5.16 5.37 9.21Return on Equity 12.21 15.19 22.91 12.76 15.04 36.92 10.70 13.90 25.98O&M Expenses 34.41 26.86 27.93 34.41 26.86 27.93 34.41 35.79 37.22Other Debts 0.11 0.12 0.12 0.11 0.12 0.12 0.11 0.12 0.12Less: Misc Income 0.09 0.42 0.42 0.09 0.42 0.42 0.09 0.42 0.42Total 75.60 100.45 132.39 66.4 61.09 98.45 64.36 68.86 96.80 Table 142: Fixed Charges for Kadamparai Generation Circle (Rs. Crore) Petition 2011 Revised Submission TNERC ApprovalComponents/Year 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13Depreciation 11.4 12.0 13.0 8.9 9.0 9.8 8.9 8.9 9.8Interest on Loan 4.0 19.2 30.6 2.7 2.9 3.1 2.7 2.9 3.1 214 | P a g e
    • Petition 2011 Revised Submission TNERC ApprovalComponents/Year 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13Return on Equity 6.5 8.1 12.2 6.8 8.0 12.3 5.6 7.4 10.1O&M Expenses 19.3 20.6 21.4 19.3 20.6 21.4 19.3 20.0 20.8Other Debts 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Less: Misc Income 0.2 0.3 0.3 0.2 0.3 0.3 0.2 0.3 0.3Total 41.0 59.7 77.0 37.6 40.3 46.4 36.4 39.0 43.7 Table 143: Fixed Charges for Kundah Generation Circle (Rs. Crore) Petition 2011 Revised Submission TNERC Approval Components/Year 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 Depreciation 30.3 32.0 34.6 22.4 22.5 23.3 22.4 22.5 23.3 Interest on Loan 10.8 51.2 81.5 7.3 7.6 7.8 7.3 7.6 7.8 Return on Equity 17.3 21.5 32.5 18.0 21.3 31.1 14.9 19.7 26.2 O&M Expenses 38.7 37.3 38.8 38.7 37.3 38.8 38.7 37.3 38.8 Other Debts 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Less: Misc Income 0.8 1.0 1.0 0.8 1.0 1.0 0.8 1.0 1.0 Total 96.4 141.3 186.5 85.8 88 100.4 82.7 86.3 95.3 Table 144: Fixed Charges for Tirunelveli Generation Circle (Rs. Crore) Petition 2011 Revised Submission TNERC Approval Components/Year 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 2010-11 2011-12 2012-13 Depreciation 11.0 11.7 12.6 6.8 9.4 10.3 6.8 9.4 10.3 Interest on Loan 3.9 15.9 21.8 2.3 3.3 3.5 2.3 3.3 3.5 Return on Equity 6.3 7.9 11.8 5.7 9.3 14.2 4.5 7.5 11.8 O&M Expenses 23.3 27.5 28.6 23.3 27.5 28.6 23.3 24.2 25.2 Other Debts 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Less: Misc Income 1.2 1.7 1.7 1.2 1.7 1.7 1.2 1.7 1.7 Total 43.4 61.3 73.2 36.9 47.9 55 35.7 42.8 49.1 6.1.32 Regulation-42 of TNERC Tariff Regulations, 2005 states as under: “42. Recovery of Capacity Charges 1. Full capacity charges (Fixed Charges) shall be recoverable at target availability specified in clause (1) of Regulation 37. 2. Recovery of capacity charges below the level of target availability will be on pro rata basis. At zero availability, no capacity charges shall be payable. …” 215 | P a g e
    • 6.1.33 The above capacity charges as determined by the Commission are to be recovered when TANGEDCO is able to meet the target in terms of PLF set by the Commission in Previous Tariff Order. The Commission observed that during FY 2010-11 TANGEDCO was not able to achieve the Target PLF in respect of following generating Stations: Years for which capacity S. No Power Stations charges fully not recovered 1 ETPS FY 11 and FY 12 2 TTPS FY 11 3 KGTPS FY 11 4 VGTPS FY 11 and FY 126.1.34 The Commission is of the view that these Stations fall outside the Merit Order Despatch. The non-availability of these Power Stations leads to costly power purchase which gets reflected in power purchase cost in the ARR. Therefore, the Commission has decided to allow the capacity charges on Pro-rata basis. For Ennore TPS, the target PLF was 50% whereas for Kuttalam GTPS and Valuthur GTPS, the target PLF was 70%. The Capacity charges as allowed by the Commission are tabulated below: Table 145: Capacity charges allowed for FY 2010-11 (Rs. Crore) FY 2010-11 S. No Power Stations Target Capacity Actual Allowable PLF charges PLF Capacity Charges I Thermal 1 ETPS 50% 176.3 35.42% 124.9 2 TTPS 80% 185.9 77.33% 179.7 II Gas Turbine 1 KGTPS 70% 44.9 19.29% 12.4 2 VGTPS 70% 48.1 67.54% 46.4 Table 146: Capacity Charges allowed for FY 2011-12 (Rs. Crore) FY 2011-12 S. No Power Stations Allowable Target PLF Capacity charges Actual PLF Capacity Charges I Thermal 1 ETPS 50% 184.9 26% 95.5216 | P a g e
    • FY 2011-12 S. No Power Stations Allowable Target PLF Capacity charges Actual PLF Capacity Charges II Gas Turbine 1 TGTPS 69% 41.5 65% 39.0 2 VGTPS 70% 73.1 67% 70.2Part-II: Variable Cost:6.1.35 The Commission has worked out the variable cost for various generating stations on the basis of data submitted in the petition and the subsequent submission of TANGEDCO vide replies to the datagaps raised by the Commission. The variable cost as determined by the Commission in respect of various generating stations of TANGEDCO is detailed as under:Thermal Power Stations:6.1.36 As per Regulation 43 (ii) of the Tarff Regulation, the Energy (Variable) charges shall be worked out on the basis of ex-bus energy delivered / sent out from the generating station. Rate of energy charges is based on the following elements: a. Price of primary fuel b. Quantum of primary fuel (coal) in kg required for generation of one kWh of electricity at generator terminals, which shall be computed on the basis of Gross Station Heat Rate (less heat contributed by secondary fuel oil) and gross calorific value of coal. c. Price of secondary fuel oil d. Normative quantity of secondary fuel e. Normative auxiliary consumption The above elements have been discussed in detail as under:217 | P a g e
    • a. Price of Primary Fuel:6.1.37 The Commission in previous year calculated the weighted average cost of coal on the basis of quantity as per allocation. The Commission arrived at the following weighted average prices for various Thermal Power Stations: Table 147: Price of Primary Fuel approved by the Commission in previous Tariff Order (Rs./ MT) S. No Particulars FY 11 FY 12 FY 13 1 Ennore TPS 1938 1957 1957 2 TTPS 3063 3094 3125 3 MTPS 2722 2749 2777 4 NCTPS 2298 2321 23446.1.38 TANGEDCO in its Petition submitted that the projections of price of coal have been based on inflationary trends year over year. The price of primary fuel (both Indian and Imported) in respect of each of the stations is tabulated below Table 148: Price of Indian and Imported Coal in respected of Individual Stations (Rs./ MT) Sources FY 2010-11 FY 2011-12 FY 2012-13 ETPS 2278 2112 2217 TTPS (Indian) 2658 3180 3340 TTPS (Imported) 4970 6188 6497 MTPS (Indian) 2700 2480 2603 MTPS (Imported) 5532 6567 6895 NCTPS (Indian) 2208 2040 2141 NCTPS(Imported) 5113 6127 6433 Commission’s View:6.1.39 The Commission in order to determine the weighted average price of coal asked TANGEDCO to submit the month-wise consumption of Indian and Imported coal plant- wise along with the price of coal. TANGEDCO in reply to the datagaps raised by the Commission submitted the month-wise consumption of Indian and Imported coal along with prices.6.1.40 The Commission worked out the weighted average price of coal on the basis of the data submitted by TANGEDCO. The Commission observed that the weighted average price of coal was different as compared to the figures submitted in the Form-7 attached along with218 | P a g e
    • the Petition. The Commission believes that for FY 2010-11, the figures submitted in the Petition are actual figures and has decided to adopt the figures as given in Form-7 of the Petition.6.1.41 As regards FY 2011-12, TANGEDCO submitted actual month-wise consumption of Indian and Imported Coal along with prices up to the month of November 2011. The Commission calculated the weighted average price of coal on the basis of data submitted by TANGEDCO up to November 2011 and adopted the same as landed price of coal for FY 2011-12 and FY 2012-13.6.1.42 Based upon the actual data submitted by TANGEDCO, the blending ratio for various Thermal Power Stations as considered by the Commission is tabulated below: Table 149: Blending Ratio for various Thermal Power Stations Thermal Stations Blending Ratio TTPS 76:24 MTPS 80:20 NCTPS 81:196.1.43 The landed price of coal as approved by the Commission for different Thermal Power Stations taking into account the blendin ratio as discussed above is tabulated below: Table 150: Landed Price of Coal approved by the Commission (Rs. / MT) FY 2010-11 FY 2011-12 S. No Particulars Last Last Petition Commission Petition Commission Order Order 1 ETPS 1938 2278 2278 1957 2112 2261 TTPS-Indian 2658 3180 2 3063 3130 3094 3814 Imported 4970 6188 MTPS-Indian 2700 2480 3 2722 3084 2749 3395 Imported 5532 6567 NCTPS-Indian 2208 2040 4 2298 2559 2321 2939 Imported 5113 6127 FY 2012-13 S. No Particulars Last Petition Commission Order 1 ETPS 1977 2217 2261 2 TTPS-Indian 3125 3340 3814219 | P a g e
    • FY 2012-13 S. No Particulars Last Petition Commission Order Imported 6497 MTPS-Indian 2603 3 2777 3395 Imported 6895 NCTPS-Indian 2141 4 2344 2939 Imported 6433 b. Gross Station Heat Rate:6.1.44 The Commission in Previous Tariff Order relaxed the norms for Station Heat Rate of TTPS and NCTPS for FY 2010-11.The Commission allowed the following Station Heat Rate for various Thermal Power Stations: Table 151: Heat Rate allowed by the Commission (Kcal/ kWh) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 ETPS 3200 3200 3200 2 TTPS 2500 2500 2500 3 MTPS 2500 2500 2500 4 NCTPS 2466 2466 24666.1.45 The Gross Station Heat Rate (SHR) for various Thermal Power Stations as submitted by TANGEDCO in Form-7 attached along with the Petition is tabulated below: Table 152: Heat Rate as submitted by TANGEDCO (Kcal/ kWh) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 ETPS 3504 3600 3600 2 TTPS 2611 2651 2651 3 MTPS 2519 2532 2532 4 NCTPS 2533 2485 2485 Commission’s View:6.1.46 In reply to data gaps raised by the Commission, TANGECO submitted the actual SHR achieved till December 2011 and projections up to March 2011. The Commission observed that the SHR submitted by TANGEDCO till December 2011 was almost same220 | P a g e
    • for all Thermal Power Stations except Ennore TPS as approved by the Commission in Previous Tariff Order6.1.47 The Commission in the Previous Tariff Order relaxed the norm for SHR for TTPS and NCTPS only for FY 2010-11. The relaxed norms for SHR for various Thermal Power Stations as approved by the Commission in FY 2010-11 in Previous Tariff Order and specified Regulation-37 (iii) of TNERC Tariff Regulations, 2005 are tabulated below: Table 153: SHR for various Thermal Power Stations as per the Regulations and Previous Tariff Order in FY 2010-11 (Kcal/ kWh) As per Previous Tariff Thermal Stations As per Regulations Order TTPS 2453 2500 MTPS 2500 2500 NCTPS 2393 2466 ETPS 3200 32006.1.48 For FY 2010-11, the Commission has allowed the SHR for various Thermal Power Stations in accordance with the relaxed norms approved in the Previous Tariff Order.6.1.49 As regards SHR in FY 2011-12 and FY 2012-13, the Commission has allowed the SHR for various Thermal Power Stations in accordance with the norms specified in Regulation-37 (iii) of the TNERC Tariff Regulations, 2005.6.1.50 The SHR as accepted by the Commission for different Thermal Power Station is tabulated below: Table 154: SHR for various Thermal Power Stations as accepted by the Commission (Kcal/ kWh) FY 2010-11 FY 2011-12 S. Particulars No Last Order Petition Commission Last Order Petition Commission 1 ETPS 3200 3504 3200 3200 3600 3200 2 TTPS 2500 2611 2500 2500 2651 2453 3 MTPS 2500 2519 2500 2500 2532 2500 4 NCTPS 2466 2533 2466 2466 2485 2393221 | P a g e
    • FY 2012-13 Particulars Last Petition Commission Order ETPS 3200 3600 3200 TTPS 2500 2651 2453 MTPS 2500 2532 2500 NCTPS 2466 2485 2393 c. Gross Calorific value of coal:6.1.51 The Commission in Previous Tariff Order calculated the weighted average calorific value of coal according to the blending ratio as per the allocated quantity for different types of coal. The gross calorific value of coal as approved by the Commission in Previous Tariff Order is tabulated below: Table 155: Gross Calorific value of coal approved in Previous Tariff Order (kcal/ kg) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 ETPS 4323 4323 4323 2 TTPS 4306 4306 4306 3 MTPS 4219 4219 4219 4 NCTPS 4346 4346 43466.1.52 TANGEDCO in its Petition submitted the weighted average price of coal from FY 2010- 11 to FY 2012-13 which is tabulated below: Table 156: Gross Calorific Value of coal as submitted in the Petition (kcal/ kg) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 ETPS 2979 2986 & 3200-3500 3200-3500 2 TTPS 3255 3483, 3200-3500 3200-3500 3 MTPS 3363 3648, 3200-3800 3200-3800 4 NCTPS 3466 3807, 3200-3800 3200-3800222 | P a g e
    • Commission’s View:6.1.53 In reply to data gaps raised by the Commission, TANGEDCO vide its letter dated January 25, 2012 submitted the actual Gross calorific value of coal (Kcal/ Kg) up to December 2011 which is tabulated below: Table 157: Gross Calorific Value upto December 2011 (kcal/ kg) FY 2011-12 S. No Particulars Actuals upto Dec. 2011 1 ETPS 3120 2 TTPS 3487 3 MTPS 3570 4 NCTPS 37616.1.54 The Commission further asked TANGEDCO to submit the consumption of coal along with the GCV of Indian and Imported coal so as to understand the mix of coal used. In reply to the above query, TANGEDCO submitted the GCV of Indian and Imported coal along with the quantity of coal during FY 2010-11 and actual up to January 2012. TANGEDCO further vide its letter dated February 1, 2012 requested to consider the relaxed norms for Gross Calorific Value (GCV) in respect of four Thermal Power Stations owned by them. TANGEDCO vide further correspondences in this matter submitted the actual weighted average of GCV of coal based on the blending ratio adopted between the Indian and Imported Coal. The Commission has taken note of the submission of TANGEDCO in relation to GCV of various Thermal Power Stations. The Commission has decided to allow the actual GCV figures as submitted by TANGEDCO on the basis of data submitted from January 2011 to January 2012.6.1.55 The GCV from FY 2010-11 to FY 2012-13 as allowed by the Commission in this Tariff Order is tabulated below: Table 158: Weighted average calorific value of coal approved by the Commission (kcal/ kg) FY 2010-11 FY 2011-12 Particulars Actuals Actuals Last Last Petition Commission Petition upto dec. upto Commission Order Order 2011 Jan.2011 2986 & ETPS 4323 2979 3088 4323 3120 3153 3088 3200-3500223 | P a g e
    • FY 2010-11 FY 2011-12 Particulars Actuals Actuals Last Last Petition Commission Petition upto dec. upto Commission Order Order 2011 Jan.2011 3483, TTPS 4306 3255 3485 4306 3487 3647 3485 3200-3500 3648, MTPS 4219 3363 3525 4219 3570 3554 3525 3200-3800 3807, NCTPS 4346 3466 3728 4346 3761 3768 3728 3200-3800 S. FY 2012-13 Particulars No Last Order Petition Commission 1 ETPS 4323 3200-3500 3088 2 TTPS 4306 3200-3500 3485 3 MTPS 4219 3200-3800 3525 4 NCTPS 4346 3200-3800 3728 d. Specific Fuel Oil Consumption:6.1.56 The Commission in Previous Tariff Order approved the following as the Specific fuel oil consumption from FY 2010-11 to FY 2012-13: Table 159: Specific Fuel Oil Consumption (ml/ kWh) S. No Particulars Quantity 1 ETPS 6 2 TTPS 2 3 MTPS 2 4 NCTPS 26.1.57 TANGEDCO in the Petition submitted the following Specific Fuel Oil Consumption from FY 2010-11 to FY 2012-13: Table 160: Specific Fuel Oil Consumption (ml/ kWh) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 ETPS 12 10 10 2 TTPS 5 2 2 3 MTPS 1 0.55 1.89 4 NCTPS 0.98 0.44 0.44224 | P a g e
    • Commission’s View:6.1.58 The Commission observed that following normative secondary fuel oil consumption per kWh has been specified in the Tariff Regulations: (a) Coal based generating stations except ETPS - 2 ml / kWh (b) ETPS -12 ml / kWh6.1.59 The Commission observed that for ETPS, TANGEDCO has claimed secondary fuel oil consumption of 12 ml/ kWh. The Commission has decided to approve the same since it is within limits specified in the Regulations. As regard TTPS, the Commission observed that TANGEDCO has claimed 5ml/ kWh as specific fuel oil consumption in FY 2010-11. In reply to data gaps regarding the higher specific oil consumption, TANGEDCO submitted that the ID fan impellers in Unit-III are getting eroded frequently and need replacement due to non-availability of 7 ESP fields since January 2009 resulting in partial load operations and Unit tripping which in turn increases furnace oil consumption. TANGEDCO further submitted that during the month of July 2010 to December 2010 the coal received was very wet, sticky and slushy which forced the use of oil for boiler flame stability in order to avoid trippings. If oil was not used, Unit-I, II and III would have tripped because of trapezoidal design of bunkers.6.1.60 The Commission is of the view that TANGEDCO has the responsibility to inspect and ensure that the coal received should be of right quality. The Commission has allowed higher landed price of coal on the basis of data submitted in the Petition. Accordingly, the Commission has decided to allow the specific fuel oil consumption as per the norms specified in the Regulations.6.1.61 For MTPS and NCTPS, the Commission observed that the specific fuel oil consumption as claimed by TANGEDCO in the Petition is within approved limits. Therefore the Commission has decided to adopt the norms as specified in the Regulations. The specific fuel oil consumption as approved by the Commission is tabulated below: Table 161: Specific fuel oil consumption (ml/ kWh) FY 2010-11 FY 2011-12 Particulars Last Order Petition Commission Last Order Petition Commission ETPS 6 12 12 6 10 10 TTPS 2 5 2 2 2 2225 | P a g e
    • FY 2010-11 FY 2011-12 Particulars Last Order Petition Commission Last Order Petition Commission MTPS 2 1 2 2 0.55 2 NCTPS 2 0.98 2 2 0.44 2 FY 2012-13 Particulars Last Order Petition Commission ETPS 6 10 10 TTPS 2 2 2 MTPS 2 1.89 2 NCTPS 2 0.44 2.00 e. Price of Secondary Fuel Oil:6.1.62 The Commission in Previous Tariff Order approved the following as the price of Secondary fuel oil from FY 2010-11 to FY 2012-13 on the basis of prevailing prices as communicated by the oil suppliers with an escalation of 5% for FY 2011-12 and FY 2012-13. Table 162: Price of Secondary Fuel Oil (Rs./ Kl) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 ETPS 34751 36594 38423 2 TTPS 34835 36576 38405 3 MTPS 35588 37367 39235 4 NCTPS 34751 36594 384236.1.63 TANGEDCO in its Petition submitted the price of Secondary fuel oil from FY 2010-11 to FY 2012-13 which is tabulated below: Table 163: Price of Secondary Fuel Oil (Rs/ Kl) S. No Particulars FY 2010-11 FY 2011-12 FY 2012-13 1 ETPS 30174 39650 41633 2 TTPS 29839 39309 41274 3 MTPS 28988 37330 31959 4 NCTPS 29753 39423 41394 Commission’s View:226 | P a g e
    • 6.1.64 As regards FY 2010-11, the Commission has accepted the price of secondary fuel oil as submitted by TANGEDCO in the Petition as the same is within the approved limit specified by the Commission in Previous Tariff Order. For FY 2011-12 and FY 2012-13, the Commission asked TANGEDCO to submit the price of HSD and LDO used in various Thermal Power Stations along with the consumption. In reply to datagaps, TANGEDCO submitted the actual month-wise consumption and the price of LDO and HSD upto the month of November 2011. The Commission has calculated the weighted average and adopted the same as price of secondary fuel oil in FY 2011-12 and FY 2012- 13.6.1.65 The price of secondary fuel oil as approved by the Commission from FY 2010-11 to FY 2012-12 is tabulated below: Table 164: Price of Secondary Fuel Oil (Rs./ Kl) FY 2010-11 FY 2011-12 Particulars Last Order Petition Commission Last Order Petition Commission ETPS 34751 30174 30174 36594 39650 40361 TTPS 34835 29839 29839 36576 39309 37653 MTPS 35588 28988 28988 37367 37330 36900 NCTPS 34751 29753 29753 36594 39423 39997 FY 2012-13 Particulars Last Order Petition Commission ETPS 38423 41633 40361 TTPS 38405 41274 37653 MTPS 39235 31959 36900 NCTPS 38423 41394 39997 f. Variable Cost for Thermal Power Stations:6.1.66 On the basis of above discussion, the Commission has calculated the variable cost for various Thermal Power Stations of TANGEDCO which is tabulated as under:227 | P a g e
    • Ennore TPS: Table 165: Variable Cost for Ennore Thermal Power Stations S. No Description Unit 2010-11 2011-12 2012-13 1 Capacity MW 450 450 450 2 Gross Station Heat Rate Kcal/kWh 3200 3200 3200 3 Specific fuel oil consumption ml/kWh 12 10 10 4 Average calorific value of oil Kcal/l 10491 10491 10491 Average calorific value of 5 Kcal/Kg 3088 3088 3088 Coal 6 Weighted average price of oil Rs./Kl 30174 40361 40361 7 Average landed cost of coal Rs./MT 2278 2261 2261 8 Rate energy charges from Oil Paisa/kWh 35.15 41.69 41.69 9 Heat contributed from Oil Kcal/kWh 122.22 108.37 108.37 10 Heat contributed from Coal Kcal/kWh 3077.78 3091.63 3091.63 11 Specific consumption of coal Kg/kWh 1.00 1.00 1.00 12 Rate of energy from Coal Paisa/kWh 269.58 270.71 266.36 13 Variable Cost Paisa/kWh 304.73 312.40 308.05 14 Previous Tariff Order Paisa/kWh 189.17 192.08 195.07 Mettur TPS: Table 166: Variable Cost for Mettur TPS S. No Description Unit 2010-11 2011-12 2012-13 1 Capacity MW 840 840 840 2 Gross Station Heat Rate Kcal/kWh 2500 2500 2500 3 Specific fuel oil consumption ml/kWh 2.0 2.00 2.00 4 Average calorific value of oil Kcal/l 10544 10544 10544 Average calorific value of 5 Kcal/Kg 3525 3525 3525 Coal 6 Weighted average price of oil Rs./Kl 28988 36900 36900 7 Average landed cost of coal Rs./MT 3084 3395 3395 8 Rate energy charges from Oil Paisa/kWh 5.80 7.38 7.38 9 Heat contributed from Oil Kcal/kWh 21.09 21.09 21.09 10 Heat contributed from Coal Kcal/kWh 2478.91 2478.91 2478.91 11 Specific consumption of coal Kg/kWh 0.70 0.70 0.70 12 Rate of energy from Coal Paisa/kWh 237.04 260.38 262.36 13 Variable Cost Paisa/kWh 242.83 267.76 269.74 14 Previous Tariff Order Paisa/kWh 183.73 185.88 188.07228 | P a g e
    • Tuticorin TPS: Table 167: Variable Cost for Tuticorin TPS S. No Description Unit 2010-11 2011-12 2012-13 1 Capacity MW 1050 1050 1050 2 Gross Station Heat Rate Kcal/kWh 2500 2453 2453 3 Specific fuel oil consumption ml/kWh 2 2 2 4 Average calorific value of oil Kcal/l 10547 10547 10547 Average calorific value of 5 Kcal/Kg 3485 3485 3485 Coal 6 Weighted average price of oil Rs./Kl 29839 37653 37653 7 Average landed cost of coal Rs./MT 3130 3814 3814 8 Rate energy charges from Oil Paisa/kWh 5.97 7.53 7.53 9 Heat contributed from Oil Kcal/kWh 21.09 21.09 21.09 10 Heat contributed from Coal Kcal/kWh 2478.91 2431.91 2431.91 11 Specific consumption of coal Kg/kWh 0.71 0.70 0.70 12 Rate of energy from Coal Paisa/kWh 242.78 296.04 290.85 13 Variable Cost Paisa/kWh 248.75 303.57 298.39 14 Previous Tariff Order Paisa/kWh 200.52 202.83 205.18 North Chennai TPS: Table 168: Variable Cost for North Chennai TPS S. No Description Unit 2010-11 2011-12 2012-13 1 Capacity MW 630 630 630 2 Gross Station Heat Rate Kcal/kWh 2466 2393 2393 3 Specific fuel oil consumption ml/kWh 2 2 2 4 Average calorific value of oil Kcal/l 10340.60 10340.60 10340.60 Average calorific value of 5 Kcal/Kg 3728 3728 3728 Coal 6 Weighted average price of oil Rs./Kl 29753 39997 39997 7 Average landed cost of coal Rs./MT 2559 2939 2939 8 Rate energy charges from Oil Paisa/kWh 5.95 8.00 8.00 9 Heat contributed from Oil Kcal/kWh 20.68 20.68 20.68 10 Heat contributed from Coal Kcal/kWh 2445.32 2372.32 2372.32 11 Specific consumption of coal Kg/kWh 0.66 0.64 0.64 12 Rate of energy from Coal Paisa/kWh 184.21 195.51 204.37 13 Variable Cost Paisa/kWh 190.16 203.51 212.37 14 Previous Tariff Order Paisa/kWh 148.99 150.81 152.63229 | P a g e
    • Provisional Tariff for New Thermal Power Stations:6.1.67 The Commission in Previous Tariff Order approved the Provisional Tariff for NCTPS- Stage-II Unit-1 & 2 and MTPS Stage-III. The Tariff approved by the Commission is tabulated below: Table 169: Provisional Tariff approved for New Thermal Power Stations (Rs./ kWh) S. No Stations FY 2011-12 FY 2012-13 1 NCTPS (Stage-II) 2.52 2.22 2 MTPS (Stage-III) 2.96 2.686.1.68 The Commission observed that TANGEDCO in its Petition has not submitted the cost on account of New Thermal Power Stations. However in reply to datagaps raised by the Commission, TANGEDCO submitted the net energy generated and cost incurred on account of new generating stations during FY 2011-12 and FY 2012-13. As discussed in Chapter of Energy Availability (Chapter-4), none of the new Thermal Power Stations have been commissioned as on date, the Commission has considered the energy rates for both NCTPS (Stage-II) and MTPS (Stage-III) in accordance with the rates approved for FY 2011-12 in Previous Tariff Order considering FY 2012-13 as first year of operation.6.1.69 The Commission directs TANGEDCO to submit separate Petition for approval of Capital Cost and Generation Tariff for new Generating Stations.Variable cost for Gas Turbine Power Stations: a. Heat Rate:6.1.70 The Commission in Previous Tariff Order approved the heat rate for all Gas Turbine Stations except BBGTPS as per the norms specified in the TNERC Tariff Regulations, 2005, i.e., 1850 kcal/ kWh. For BBGTPS, the Commission accepted the Heat Rate proposed by TNEB, i.e., 3230 kcal/ kWh.6.1.71 TANGEDCO in its Petition has submitted the following Station Heat Rate for Gas Turbine Power Stations: Table 170: Heat rate for various Stations as submitted by TANGEDCO (Kcal/ kWh) S. No Stations FY 11 FY 12 FY 13 1 KGTPS 1880 1850 1850 2 TGTPS 1845 1850 1850230 | P a g e
    • S. No Stations FY 11 FY 12 FY 13 3 BBGTPS 3436 3219 3219 4 VGTPS-I 1790 1850 1850 5 VGTPS-II 1850 1850 Commission’s View:6.1.72 The Commission observed that, TANGEDCO has submitted higher heat rate for KGTPS and BBGTPS in its Petition. The Commission already relaxed the norm for BBGTPS in previous Tariff Order. Therefore, the Commission has allowed the heat rate for KGTPS and BBGTPS for FY 2010-11 according to the norms approved by the Commission in Previous Tariff Order.6.1.73 As regards TGTPS and VGTPS-I, the Commission observed that the actual Station Heat Rate in FY 2010-11 as submitted in the Petition is within the approved limits specified by the Commission in Previous Tariff Order. Hence the Commission has approved the same for TGTPS and VGTPS-I.6.1.74 In FY 2011-12 and FY 2012-13, TANGEDCO has proposed the SHR as per the norms specified in the Regulations. For BBGTPS, TANGEDCO has proposed 3219 kcal/ kWh which is acceptable by the Commission.6.1.75 The Station Heat Rate as approved by the Commission in this Order is tabulated below: Table 171: Station Heat Rate (Kcal/ kWh) FY 2010-11 FY 2011-12 Stations Previous Previous Petition Commission Tariff Petition Commission Tariff Order Order KGTPS 1850 1880 1850 1850 1850 1850 TGTPS 1850 1845 1845 1850 1850 1850 BBGTPS 3230 3436 3230 3230 3219 3219 VGTPS-I 1850 1790 1790 1850 1850 1850 VGTPS-II 1850 1850 1850 FY 2012-13 Stations Previous Tariff Petition Commission Order KGTPS 1850 1850 1850 TGTPS 1850 1850 1850231 | P a g e
    • FY 2012-13 Stations Previous Tariff Petition Commission Order BBGTPS 3230 3219 3219 VGTPS-I 1850 1850 1850 VGTPS-II 1850 1850 1850 b. Gross Calorific Value:6.1.76 The Commission in the Previous Tariff Order approved the calorific value of Gas as 10000 Kcal/SCM whereas for Naptha used in BBGTPS, the Commission approved the Calorific value of 10572 kcal/ kg.6.1.77 TANGEDCO has submitted Naptha as the main fuel and HSD as the start-up fuel used in BBGTPS. In other stations only gas is being used as fuel. TANGEDCO has submitted the following calorific value for the usage of gas and Naptha in its Stations: Table 172: Calorific Value as submitted by TANGEDCO in the Petition Sl. No. Station Fuel used Unit 2010-11 2011-12 2012-13 1 TGTPSl Gas Kcal/ SCM 9590 9271 10000 2 Kuttalam Gas Kcal/ SCM 9498 9630 10000 3 Valuthur I Gas Kcal/ SCM 8765 9179 10000 4 Valuthur II Gas Kcal/ SCM 0 8186 10000 Naptha Kcal/ Kg 10572 10572 10572 5 BBGTPS HSD Kcal/ Kg 10249 10249 10249 Commission’s View:6.1.78 The Commission in the last Tariff Order observed that in respect of gas fired generating station, the TNEB make payment at the rate for 1000 SCM for 10000 Kcal / SCM and whenever the GCV is less than 10000 Kcal / SCM, proportionate rebate is allowed. Therefore, the Commission has considered GCV as 10000 Kcal/ SCM for arriving at the quantity of coal consumed from FY 2010-11 to FY 2012-13.6.1.79 The Calorific value as approved by the Commission for various stations is as under:232 | P a g e
    • Table 173: Calorific Value from FY 2010-11 to FY 2012-13 Fuel 2010-11 2011-12 Station Unit Last Last Used Petition Approved Petition Approved TO TO Kcal/ 10000 TGTPS Gas 10000 9590 10000 10000 9271 SCM Kcal/ 10000 10000 Kuttalam Gas 10000 9498 10000 9630 SCM Kcal/ 10000 10000 Valuthur I Gas 10000 8765 10000 9179 SCM Valuthur Kcal/ 10000 Gas 10000 0 0 10000 8186 II SCM Kcal/ Naptha 10572 10572 10572 10572 10572 10572 Kg BBGTPS Kcal/ HSD 10249 10249 10249 10249 Kg Fuel 2012-13 Station Unit Used Last TO Petition Approved Kovilkappal Kcal/ SCM Gas 10000 10000 10000 Kuttalam Kcal/ SCM Gas 10000 10000 10000 Valuthur I Kcal/ SCM Gas 10000 10000 10000 Valuthur II Kcal/ SCM Gas 10000 10000 10000 Kcal/ Kg Naptha 10572 10572 10572 BBGTPS Kcal/ Kg HSD 10249 10249 c. Price of fuel:6.1.80 The Commission in the Previous Tariff Order approved the following prices of fuel: Table 174: Price of fuel approved by the Commission S. No Stations Units FY 2010-11 FY 2011-12 FY 2012-13 1 KGTPS Rs./ SCM 7.92 8.77 8.77 2 TGTPS Rs./ SCM 7.92 8.77 8.77 3 BBGTPS Rs./ kg 47.92 50.32 52.83 4 VGTPS-I Rs./ SCM 8.78 8.79 8.79 5 VGTPS-II Rs./ SCM 7.76 8.79 8.79233 | P a g e
    • 6.1.81 TANGEDCO has submitted the following prices of fuel from FY 2010-11 to FY 2012- 13: Table 175: Price of fuel as submitted by TANGEDCO Stations Fuel Used Units FY 2010-11 FY 2011-12 FY 2012-13 KGTPS Gas Rs./ SCM 8.55 8.55 8.55 TGTPS Gas Rs./ SCM 8.55 8.55 8.55 Naptha Rs./ kg 33.44 40.44 40.44 BBGTPS HSD Rs./ Kg 37.60 82.47 43.10 VGTPS-I Gas Rs./ SCM 8.55 8.93 8.93 VGTPS-II Gas Rs./ SCM 8.93 8.93 Commission’s View:6.1.82 As regards FY 2010-11, TANGEDCO has submitted the actual price of fuel consumed during FY 2010-11. The Commission has considered the same for all GTPS. For BBGTPS, Naptha is used as the fuel and HSD is used in order to meet the technical requirement of the power plant. The Commission has considered the weighted average cost on the basis of consumption and the price of Naptha and HSD. Though this power station was established as a peaking power station, in view of prohibitive naptha prices, it is not being operated even during peak hours. The generation from this station is very limited. In view of this the auxiliary consumption also cannot be estimated accurately. This station is being operated as synchronous condenser as facility was available for operating the gas turbines as synchronous condenser. The gas turbines is started and brought upto full speed after which the unit is synchronized with the grid. Thereafter the fuel supply is cut off and the gas turbine slows down and finally gets decoupled from the generator through the operation of a clutch. The generator continues to be in synchronism with the grid but operates as synchronized condenser. In this process it supplies VAR to system for compensation. It is understood that this kind of operation of Basin Bridge Gas Turbine Station has resulted in improving the voltage profile in the surrounding area and also improved the real power generation of North Chennai TPS. The operation of the Basin Bridge Gas Turbine Station as synchronous condensers will have to be continued to further optimize the VAR Compensation to the system.6.1.83 As regards FY 2011-12 and FY 2012-13, the Commission has considered the submission of TANGEDCO for all Gas Turbine Power Stations.234 | P a g e
    • 6.1.84 The Price of fuel as approved by the Commission is tabulated below: Table 176: Price of fuel approved by the Commission FY 2010-11 FY 2011-12 Stations Fuel Used Units Previous Previous Tariff Petition Commission Tariff Petition Commission Order Order Rs./ KGTPS Gas 7.92 8.55 8.55 8.77 8.55 8.55 SCM Rs./ TGTPS Gas 7.92 8.55 8.55 8.77 8.55 8.55 SCM Naptha Rs./ kg 47.92 33.44 33.44 50.32 40.44 40.44 BBGTPS HSD Rs./ Kg 37.60 37.60 82.50 82.50 Rs./ VGTPS-I Gas 8.78 8.55 8.55 8.79 8.93 8.93 SCM VGTPS- Rs./ Gas 7.76 8.79 8.93 8.93 II SCM FY 2012-13 Stations Fuel Used Units Previous Petition Commission Tariff Order KGTPS Gas Rs./ SCM 8.77 8.55 8.55 TGTPS Gas Rs./ SCM 8.77 8.55 8.55 Naptha Rs./ kg 52.83 40.44 40.44 BBGTPS HSD Rs./ Kg 43.10 43.10 VGTPS-I Gas Rs./ SCM 8.79 8.93 8.93 VGTPS-II Gas Rs./ SCM 8.79 8.93 8.93 d. Variable cost for various GTPS:6.1.85 Based upon the above discussion, the variable cost as approved for various Gas Turbine Stations is tabulated as under: Table 177: Variable Cost for KGTPS S. No Description Unit 2010-11 2011-12 2012-13 1 Capacity MW 101 101 101 2 Gross Station Heat Rate Kcal/kWh 1850 1850 1850 3 Average calorific value of gas Kcal/SCM 10000 10000 10000 4 Average Cost of Gas Rs./ SCM 8.55 8.55 8.55 5 Rate of energy from Gas Ps/ kWh 171.44 169.42 168.21 6 Net Generation MU 157 457 592235 | P a g e
    • S. No Description Unit 2010-11 2011-12 2012-13 Total Cost excluding 7 Rs. Crore 26.99 77.48 99.61 Transportation 8 Transportation Cost Rs. Crore 7.11 7.11 7.11 9 Total Cost Rs. Crore 34.09 84.59 106.71 10 Variable Cost Ps/ kWh 216.59 184.97 180.21 Table 178: Variable Cost for TGTPS S. No Description Unit 2010-11 2011-12 2012-13 1 Capacity MW 107.88 107.88 107.88 2 Gross Station Heat Rate Kcal/kWh 1845 1850 1850 3 Average calorific value of gas Kcal/SCM 10000 10000 10000 4 Average Cost of Gas Rs./ SCM 8.55 8.55 8.55 5 Rate of energy from Gas Ps/ kWh 168.07 168.28 160.77 6 Net Generation MU 610 650 611 Total Cost excluding 7 Rs. Crore 102.44 109.31 102.73 Transportation 8 Transportation Cost Rs. Crore 4.83 4.83 4.83 9 Total Cost Rs. Crore 107.27 114.14 107.56 10 Variable Cost Ps/ kWh 175.99 175.72 176.12 Table 179: Variable Cost for Valuthur-I S. No Description Unit 2010-11 2011-12 2012-13 1 Capacity MW 95 95 95 2 Gross Station Heat Rate Kcal/kWh 1790 1850 1850 3 Average calorific value of gas Kcal/SCM 10000 10000 10000 4 Average Cost of Gas Rs./ SCM 8.55 8.93 8.93 5 Rate of energy from Gas Ps/ kWh 162.03 185.77 167.06 6 Net Generation MU 531 629 614 Total Cost excluding 7 Rs. Crore 85.99 116.81 107.33 Transportation 8 Transportation Cost Rs. Crore 1.79 1.79 1.79 9 Total Cost Rs. Crore 87.78 118.60 109.12 10 Variable Cost Ps/ kWh 165.40 188.62 177.70 Table 180: Variable Cost for Valuthur-II S. No Description Unit 2010-11 2011-12 2012-13 1 Capacity MW 92.2 92.2236 | P a g e
    • S. No Description Unit 2010-11 2011-12 2012-13 2 Gross Station Heat Rate Kcal/kWh 1850 1850 3 Average calorific value of gas Kcal/SCM 10000 10000 4 Average Cost of Gas Rs./ SCM 8.93 8.93 5 Rate of energy from Gas Ps/ kWh 161.57 176.13 6 Net Generation MU 465 593 Total Cost excluding 7 Rs. Crore 75.08 104.25 Transportation 8 Transportation Cost Rs. Crore 1.79 1.79 9 Total Cost Rs. Crore 76.86 106.04 10 Variable Cost Ps/ kWh 165.42 178.77 Table 181: Variable Cost for BBGTPS S.No. Description Unit 2010-11 2011-12 2012-13 1 Capacity MW 120 120 120 kcal/ 2 Gross Station Heat Rate 3230 3219 3219 kWh 3 Average calorific value of gas kcal/ kg 10569 10566 10564 4 Average Cost of Naptha Rs./ kg 33 41 41 5 Rate of energy from Naptha Ps/ kWh 1028.58 1262.00 1278.15 6 Net Generation MU 52 44 58 7 Total Variable Cost Rs. Crore 53 55 75 * Please refer to the detailed paragraph for BBGTPS given aboveHydro Generating Stations:6.1.86 The Commission in Previous Tariff Order determined the Primary Energy charges for hydro generating stations on account of water charges, lubricants etc.. The Primary energy charges as allowed by the Commission in the Previous Tariff Order for various Hydro generating circles are tabulated as under: Table 182: Primary Energy allowed by the Commission in Previous Tariff Order (Rs. Crore) Generation S. No FY 2010-11 FY 2011-12 FY 2012-13 Circles 1 Erode 0.13 0.13 0.13 2 Kundah 0.01 0.01 0.01 3 Kadamparai 0.16 0.16 0.16 4 Tirunelveli 0.21 0.21 0.22237 | P a g e
    • 6.1.87 TANGEDCO has not discussed the Primary energy charges on account of hydro generating circles in the Petition. However in the formats, TANGEDCO has submitted the Primary Energy Charges which are tabulated below: Table 183: Primary Energy Charges submitted by TANGEDCO (Rs. Crore) Generation S. No FY 2010-11 FY 2011-12 FY 2012-13 Circles 1 Erode 0.03 0.04 0.04 2 Kundah 0.22 0.22 0.23 3 Kadamparai 0.00 0.00 0.00 4 Tirunelveli 0.25 0.25 0.26Commission’s View:6.1.88 The Commission observed that the total Primary Energy Charges as submitted by TANGEDCO are almost same as that approved by the Commission in Previous Tariff Order. Therefore the Commission has decided to allow Primary charges towards Hydro generating circles as submitted by TANGEDCO in the Petition. The Primary Energy Charges as allowed by the Commission in this Order are tabulated below: Table 184: Primary Energy Charges approved by the Commission (Rs. Crore) FY 2010-11 FY 2011-12 Generation S. No Last Circles Petition Commission Last Order Petition Commission Order 1 Erode 0.13 0.03 0.03 0.13 0.04 0.04 2 Kundah 0.01 0.22 0.22 0.01 0.22 0.22 3 Kadamparai 0.16 0.00 0.00 0.16 0.00 0.00 4 Tirunelveli 0.21 0.25 0.25 0.21 0.25 0.25 FY 2012-13 Generation S. No Last Circles Petition Commission Order 1 Erode 0.13 0.04 0.04 2 Kundah 0.01 0.23 0.23 3 Kadamparai 0.16 0.00 0.00 4 Tirunelveli 0.22 0.26 0.26238 | P a g e
    • Provisional Tariff for New Hydro Generating Stations:6.1.89 TANGEDCO has not proposed any Tariff on account of new hydro generating stations. The Commission for the purpose of calculating the cost on account of energy available from new hydro generating stations has considered Rs. 3.00 per kWh..6.1.90 The Commission directs TANGEDCO to submit separate Petition for approval of Capital Cost and determination of Tariff for New Hydro Generating Stations before next Tariff determination exercise.Wind Generating Stations:6.1.91 The Commission in Previous Tariff Order ruled that in the order No.3 dated 15-05-2006, the Commission has determined a tariff of Rs.2.75 / unit for the wind power projects commissioned, and to be commissioned based on agreements executed prior to May 15, 2006. Accordingly the Commission allowed the rate of Rs. 2.75/ Unit in Previous Tariff Order.6.1.92 TANGEDCO in its Petition has not discussed the energy charges on account of wind energy. Also in the formats attached along with the Petition, TANGEDCO has submitted only capacity charges.Commission’s View:6.1.93 . The wind mills of TANGEDCO were installed in between 1986 and 1993.Therefore rate of Rs. 2.75 per Unit is applicable for TANGEDCO owned Wind Mills. .6.1.94 The Commission is of the view that since the TANGEDCO owned Wind Mills are not operating properly and the cost of generation is very high, TANGEDCO should either shutdown the Wind Mills or re-power the machines. The high cost of generation on account of usage of old machines cannot be passed on to the consumers.239 | P a g e
    • Summary for Own Generation: Table 185: Summary for Own Generation in FY 2010-11 FY 2010-11 Petition CommissionS. No Particulars Fixed Variable Variable Fixed Variable Variable Quantum Total Cost Quantum Total Cost Cost Cost Cost Cost Cost Cost Rs. Rs. MU Rs./ kWh Rs. Crore Rs. Crore MU Rs./ kWh Rs. Crore Rs. Crore Crore Crore 1 ETPS 1176 157 3.61 425 581 1176 125 3.05 358 483 2 TTPS 6523 246 2.86 1865 2110 6523 180 2.49 1622 1802 3 MTPS 5549 157 2.55 1414 1571 5549 123 2.43 1347 1470 4 NCTPS 4110 234 2.10 864 1098 4110 216 1.90 782 998 Subtotal- I 17358 793 4568 5361 17358 644 4110 4753 Thermal 5 KGTPS 157 42 1.99 31 74 157 12 2.17 34 46 6 BBGTPS 52 40 15.24 79 118 52 49 10.29 53 102 7 TGTPS 649 36 1.51 98 134 610 38 1.76 107 145 8 Valuthur -I 531 64 1.70 90 154 531 46 1.65 88 134 9 Valuthur-II 0 II Subtotal-Gas 1389 182 298 480 1349 146 282 428 10 Erode HEP 767 76 0.00 0 76 64 0 64 11 Kadamparai HEP 1303 41 0.00 0 41 36 0 36 4515 12 Kundah HEP 2155 96 0.00 0 97 83 0 83 13 Tirunelveli HEP 860 43 0.00 0 44 36 0 36 III Subtotal-Hydro 5085 257 0.00 1 257 4515 219 0 1 220 240
    • FY 2010-11 Petition CommissionS. No Particulars Fixed Variable Variable Fixed Variable Variable Quantum Total Cost Quantum Total Cost Cost Cost Cost Cost Cost Cost Rs. Rs. MU Rs./ kWh Rs. Crore Rs. Crore MU Rs./ kWh Rs. Crore Rs. Crore Crore Crore Tirunelveli & 14 13 15.15 20 20 13 0 2.75 3 3 Udmalpet IV Subtotal-Wind 13 20 20 13 0 3 3 Total 15 23845 1231 4887 6118 23233 1009 4396 5404 Generation Table 186: Summary for Own Generation in FY 2011-12 FY 2011-12 Petition CommissionS. No Particulars Fixed Variable Variable Total Fixed Variable Variable Total Quantum Quantum Cost Cost Cost Cost Cost Cost Cost Cost Rs./ Rs. MU Rs. Crore Rs. Crore MU Rs. Crore Rs./ kWh Rs. Crore Rs. Crore kWh Crore 1 ETPS 851 252 3.56 303 555 851 95 3.12 266 361 2 TTPS 7018 321 3.19 2236 2557 7018 207 3.04 2130 2337 3 MTPS 6235 187 2.51 1562 1749 6235 142 2.68 1669 1811 4 NCTPS 4621 365 2.05 946 1312 4621 238 2.04 940 1178 5 MTPS (Stage-III) 259 2.81 73 73 Subtotal- I 18984 1126 5120 6245 18724 682 5006 5688 Thermal 6 KGTPS 382 56 1.93 74 130 457 43 1.85 85 128 7 BBGTPS 90 70 17.50 157 228 44 52 12.62 55 107 241
    • FY 2011-12 Petition CommissionS. No Particulars Fixed Variable Variable Total Fixed Variable Variable Total Quantum Quantum Cost Cost Cost Cost Cost Cost Cost Cost Rs./ Rs. MU Rs. Crore Rs. Crore MU Rs. Crore Rs./ kWh Rs. Crore Rs. Crore kWh Crore 8 TGTPS 654 62 1.67 110 172 650 39 1.76 114 153 9 Valuthur -I 601 629 70 1.89 119 189 104 3.25 195 300 10 Valuthur-II 444 465 0 1.65 77 77 II Subtotal-Gas 2172 293 536 829 2244 204 450 654 11 Erode HEP 846 100 0.00 0.04 100 69 0 69 12 Kadamparai HEP 1279 60 0.00 0.00 60 39 0 39 4701 13 Kundah HEP 2497 141 0.00 0.22 142 86 0 87 14 Tirunelveli HEP 939 61 0.00 0.25 62 43 0 43 III Subtotal-Hydro 5561 363 0.51 363 4700.9431 237 1 237 Tirunelveli & 15 20 0 17.78 36 36 11.31 0 2.75 3 3 Udmalpet IV Subtotal-Wind 20 0 36 36 11 0 3 3 Total-Own 16 26737 1781 5692 7473 25680 1123 5459 6582 Generation 242
    • Table 187: Summary for Own Generation in FY 2012-13 FY 2012-13 Petition CommissionS. No Particulars Fixed Variable Variable Total Fixed Variable Variable Total Quantum Quantum Cost Cost Cost Cost Cost Cost Cost Cost Rs./ Rs. MU Rs. Crore Rs. Crore MU Rs. Crore Rs./ kWh Rs. Crore Rs. Crore kWh Crore 1 ETPS 1361 307 3.44 468 775 680 196 3.08 209 405 2 TTPS 6896 414 3.45 2379 2793 6938 227 2.98 2070 2297 3 MTPS 5971 237 2.76 1647 1884 5960 154 2.70 1608 1761 4 NCTPS 4184 466 2.22 927 1393 4391 258 2.12 932 1190 NCTPS (Stage- 5 1760 2.52 444 444 II) (Unit-I) 2130 3.33 709 709 NCTPS (Stage- 6 3030 2.52 763 763 II) (Unit-2) 7 MTPS Stage-III 1913 2.96 566 566 3528 3.16 1113 1113 8 MTPS Stage-III 1515 2.96 448 448 Subtotal- I 24070 1424 7244 8668 26186 834 7041 7875 Thermal 9 Kuttalam 590 73 1.81 107 180 592 48 1.80 107 154 10 Basin 121 96 17.92 217 313 58 56 12.78 75 130 11 TGTPS 581 84 1.72 100 184 611 43 1.76 108 151 12 Valuthur -I 611 614 86 1.78 109 195 144 3.53 216 360 13 Valuthur-II 592 593 0 1.79 106 106 II Subtotal-Gas 2495 397 640 1037 2469 232 504 736 14 Erode HEP 916 132 0.00 0 132 97 0 97 5110 15 Kadamparai HEP 1385 77 0.00 0 77 44 0 44 243
    • FY 2012-13 Petition CommissionS. No Particulars Fixed Variable Variable Total Fixed Variable Variable Total Quantum Quantum Cost Cost Cost Cost Cost Cost Cost Cost Rs./ Rs. MU Rs. Crore Rs. Crore MU Rs. Crore Rs./ kWh Rs. Crore Rs. Crore kWh Crore 16 Kundah HEP 2706 186 0.00 0 186 95 0 96 17 Tirunelveli HEP 1018 73 0.00 0 73 49 0 49 New Hydro 18 132 3.00 40 40 addition III Subtotal-Hydro 6025 469 1 469 5242 285 40 325 Tirunelveli & 19 21 0 24.66 52 52 11.31 2.75 3 3 Udmalpet IV Subtotal-Wind 21 0 52 52 11 0 3 3 3 Total-Own 20 32611 2290 7936 10226 33908 1351 7589 8939 Generation 244
    • 7 POWER PURCHASE COST FROM OTHER SOURCESMerit Order Ranking:7.1.1 The Commission in accordance with Regulation 75 (1) of TNERC (Terms and Conditions for Determination of Tariff) Regulations, 2005 has determined the power purchase cost for various sources from which energy is available in FY 2012-13. Regulation 75(1) of the TNERC (Terms and Condition for Determination of Tariff) Regulation, 2005 states as under: “75. Cost of Power Purchase 1. The Distribution Licensee shall procure power on least cost basis and strictly on Merit Order Despatch and shall have flexibility to procure power from any source in the country”.7.1.2 For the purpose of determination of power purchase cost, the Commission has followed the methodology given below: a. Firstly, the total energy calculated by the Commission in this Order has been considered for Must-Run Power Plants. The total energy available from Must-Run Power Plants is given below: Table 188: Energy available from Must-Run Power Plants during FY 2012-13 (MU) Name of Power Petition Commission Plant Kaiga 1178 1178 MAPS 1508 1508 Additions Kaiga APS 0 0 Kudankulam 3245 1716 MAPS Additional 256 518 Total 6187 4920 b. Secondly, the total energy calculated by the Commission in this Order has been considered for TANGEDCO’s own generating stations in FY 2012-13 whichis tabulated below: 245
    • Table 189: Energy available from TANGEDCO’s own generating stations duringFY 2012-13 (MU) Power Stations Petition Commission Thermal Power 24070 26186 Stations Gas Turbine 2495 2469 Power Stations Hydel 6025 5242 Generation Wind Mills 21 11 Total 32611 33908c. Thirdly, the Commission has considered the energy available from CPP and Non- Conventional Energy Sources such as Private Wind Mills, Solar, Hydro, Cogeneration etc. The total energy available from various Non–conventional energy sources have been given below:Table 190: Energy available from NCES and CPP during FY 2012-13 (MU) FY 2012-13 S. No Power Plant Last Year Petition Commission Order 1 CPP 371 580 582 2 Solar 0 11 11 3 Wind 10487 9988 5408 4 Cogeneration 1276 1469 1202 5 Biomass 111 120 56 6 Total Quantum 12245 12168 7258d. After factoring in the energy available from all the above listed sources, the Commission has allowed the remaining energy to be purchased as per the energy requirement calculated by the Commission on Merit Order Ranking basis. The energy required to be purchased on Merit Order Despatch basis is given below: 246
    • Table 191: Balance energy required to be purchased through Merit Order Ranking for FY 2012-13 Particulars Energy (MU) Energy requirement 70784 Less: Energy available through 4920 Must-Run Plants Less: Net Energy Available 33908 through own generation Energy to be purchased in MU 31957 Less: Energy available through 7258 NCES and CPP Energy required to be purchased through Merit 24698 Order Ranking e. The Commission has prepared the Merit Order Despatch on the basis of variable cost of various power plants. The Commission has considered Merit Order Despatch upto the 24698 MU on the basis of calculation shown above. The power plants will be scheduled in accordance with the increasing trend of variable cost. On the basis of variable cost, following power plants will get despatched in accordance with Merit Order Ranking: Table 192: Merit Order Ranking for available sources Energy to be Cumulative Variable Cost Energy Cumulative purchase as Energy as S. No Other Plants (Rs./ kWh) Available (MU) Energy (MU) per MOD per MOD (MU) (MU)Power Plants required to be desptached as per MOD NTPC SR (I 1 & II) 1.68 4164 4164 4164 4164 2 NLC-TS-I 1.73 3066 7230 3066 7230 3 Penna 1.84 375 7605 375 7605 4 ABAN 1.86 810 8415 810 8415 NLC-TS-I 5 Expansion 1.91 1624 10039 1624 10039 NTPC SR 6 (III) 1.92 1125 11164 1125 11164 NLC-TS-II 7 (Stage-I) 1.95 3272 14436 3272 14436 247
    • Energy to be Cumulative Variable Cost Energy Cumulative purchase as Energy as S. No Other Plants (Rs./ kWh) Available (MU) Energy (MU) per MOD per MOD (MU) (MU) NLC-TS-II 8 Expansion 2.00 1318 15754 1318 15754 9 Simahadri 2.33 1415 17169 1415 17169 NTPC - 10 Talcher II 2.38 3705 20874 3705 20874 11 ST-CMS 2.52 1795 22669 1795 22669 NTPC-TNEB 12 (JV) 2.90 2896 25565 2029 24698 f. The fixed cost has been allowed for the Power Plants which are not scheduled as per Merit Order Despatch shown above. These Power Plants are listed below: i. NTPC-Eastern Region (NTPC-ER) ii. PPN iii. GMR iv. Samalpatti v. Madurai g. The Merit Order Despatch shown above has been considered assuming an idealistic scenario in which the energy is available from all the Power Plants listed in the Merit Order Ranking throughout the year. However due to corridor constraints, power flow from other regions may become difficult and other power plants may also get dispatched. Also with lifting of R&C, the demand may increase and go beyond the estimates resulting in dispatch of other available sources. TANGEDCO shall follow the MOD and try to optimize the power purchase cost on the basis of Merit Order Ranking shown above. For traders, TANGEDCO is directed to take prior approval of the Commission before purchasing energy beyond the quantum and rate specified by the Commission for FY 2012-13 in this Tariff Order.Power Purchase Cost:7.1.3 The Commission in accordance with Regulation 75 of TNERC (Terms and Conditions for Determination of Tariff) Regulations, 2005 has determined the power purchase cost for various sources from which energy is available in FY 2012-13. Regulation 75 of the TNERC (Terms and Condition for Determination of Tariff) Regulation, 2005 states as under: 248
    • “75. Cost of Power Purchase … 3. The cost of power purchased from Central Generating Company shall be worked out based on tariff determined by the Central Electricity Regulatory Commission. 4. The cost of power purchased from IPPs shall be considered based on Power Purchase Agreement. 5. In case of power purchased from Captive Generators and other non conventional energy sources, the cost shall be worked out as per the policy approved by the Commission”.Power Purchase from Central Generating Stations:7.1.4 The Commission in the previous Tariff Order adopted the tariff proposed by NTPC in its Tariff Petitions before the CERC with 5% escalation on the energy charges to take care of fuel cost adjustments for the purpose of estimating power from various CGS Stations (except nuclear stations). The Commission also estimated the Transmission charges payable to PGCIL with reference to the Petition submitted before CERC. For upcoming power projects the Commission referred to the similar capacity stations at same locations. For new nuclear projects, the Commission assumed tariff at the rate of Rs. 3.50/ Unit. The Power Purchase cost as allowed by the Commission in Previous Tariff Order has been tabulated below:Table 193: Power Purchase Quantum and Cost as approved by the Commission inPrevious Tariff Order 2010-11 2011-12 2012-13 S. No Stations Quantum Cost Quantum Cost Quantum Cost Rs. Rs. Rs. MU MU MU Crore Crore Crore CGS Neyveli TS- 1 3250 998.96 2996 1007.51 2996 1143.62 I Neyveli TS- 2 2842 713.07 2842 751.87 2842 760.2 II 3 Neyveli TS- 1434 416.63 1434 461.06 1434 474.9 Expansion NTPC SR I 4 3913 807.72 3913 818.08 3913 824.68 & II 249
    • 2010-11 2011-12 2012-13 S. No Stations Quantum Cost Quantum Cost Quantum Cost Rs. Rs. Rs. MU MU MU Crore Crore Crore NTPC SR 5 965 201.92 965 202.19 965 201.62 III 6 NTPC – 3636 723.94 3577 719.03 3577 720 Talcher-II NTPC – ER 7 & Spl 743 169.71 743 170.63 743 171.69 allotment 8 NTPC – 1076 796.29 926 703.78 926 683.02 Kayankulam 9 Maps 1431 276.34 1431 276.34 1431 276.34 10 Kaiga 911 291.68 911 291.68 911 291.68 CGS Additions 11 NLC TS II 299 91.19 1750 565.59 1750 596.59 Expansion NTPC 12 0 0 872 284.86 1026 320.14 Simhadri NTPC - 13 TNEB JV at 0 0 1615 397.29 6510 1601.46 Vallur NLC - 14 TNEB JV at 0 0 0 0 1688 492.9 Tuticorin 15 Kaiga APS 0 0 221 77.35 221 77.35 Kudankulam 16 848 296.8 3137 1097.95 3766 1318.1 APS Kalpakkam 17 0 0 0 0 1024 358.4 PFBR 18 Power Grid 0 512 0 538 0 564.9 Total CGS 21348 6296.26 27333 8363.21 35723 10877.67.1.5 TANGEDCO in its Petition submitted that the power purchase expenditure for FY 2010- 11 is based upon the actual expenditure during the year. TANGEDCO further submitted that the projection of power purchase cost during the current year has been made based on the availability of power during FY 2010-11 from these stations. TANGEDCO also submitted that the energy forecast plan for FY 2011-12 and FY 2012-13 has been based 250
    • on detailed station-wise analysis of monthly energy sent out and the consequent energy availability from generating stations during that period. TANGEDCO has referred to its share from the CGS as notified by GOI for calculating energy availability. The power purchase cost for the Central Generating Stations as projected by TANGEDCO is tabulated below:Table 194: Power Purchase Quantum and Cost as submitted by TANGEDCO in thePetition FY 2010-11 FY 2011-12 FY 2012-13 Quantum Cost Quantum Cost Quantum CostS. No Particulars Rs. Rs. MU MU MU Rs. Crore Crore Crore 1 NLC-TS-I 3066 630 3066 676 3066 692 NLC-TS-II 2 (Stage-I) 3042 532 3242 679 3272 708 NLC-TS-II (Stage-II) NLC-TS-I 3 Expansion 1509 453 1609 484 1624 494 NTPC SR (I & 4 II) 4039 806 4139 897 4164 932 5 NTPC SR (III) 1024 262 1105 302 1125 311 6 NTPC ER 735 224 885 323 897 340 NTPC - Talcher 7 II 3664 909 3690 1045 3705 1061 8 Kayankulam 854 786 250 369 0 0 9 MAPS 1398 277 1498 306 1508 321 10 KAIGA 860 263 1107 347 1178 364 11 Simahadri 0 0 328 95 925 268 12 Kudankulam 0 0 333 100 3245 1022 NLC-TS-II 13 Expansion 0 0 1295 259 2135 427 14 MAPS (Addl.) 0 0 0 0 256 77 15 PGCIL SR&ER 0 457 0 480 0 504 NTPC-TNEB 16 (JV) 0 0 0 0 3465 1005 17 UI 1441 472 750 270 145 60 17 Total 21632 6071 23297 6632 30710 8586 251
    • Commission’s View:7.1.6 As regards FY 2010-11, the Commission has considered the expenses on account of power purchase from CGS as submitted by TANGEDCO in the petition. The Commission for the purpose of determination of power purchase cost from CGS has referred to the Final Tariff Orders and Provisional Tariff Orders issued by Central Electricity Regulatory Commission for various Central Generating Stations. The Commission observed that TANGEDCO has submitted its share in MW out of the total capacity (MW) of various Central Generating Stations vide its letter dated February 2, 2012. The total share as submitted by TANGEDCO is tabulated below:Table 195: Share of TANGEDCO submitted in the Petition (MW) Share from Stations Total Capacity Firm Share unallocated capacity NLC TS - I 600 475 0 NLC TS - II 1470 441 32 NLC TS I - Expn. 420 193 33 NTPC SR (I & II) 2100 470 73 NTPC ER 3440 135.12 0 NTPC SR (III) 500 118 18 NTPC - Talcher II 2000 477 26 Kayankulam 360 0 0 MAPS 440 327 4 Kaiga 880 195.5 32 Simahadri 1000 99 18 Kudankulam 2000 925 0 NLC TS-II 500 230 0 MAPS Addl. 500 167 07.1.7 CERC has issued provisional orders and final orders for the Second Control Period, i.e., from FY 2009-10 to FY 2013-14 for some Central Generating Stations whereas some are still pending. The relevant details from the latest Order from FY 2009-10 to FY 2013-14 available on the website of CERC are tabulated below: 252
    • Table 196: Capacity charges for CGS as per CERC Orders (Rs. Crore) Capacity Particulars Order FY 2011-12 FY 2012-13 (MW) NLC-II (Stage-I) 630 T.O. dated 27.06.2011 214.75 229.86 NLC-II (Stage-II) 840 T.O. dated 27.06.2011 298.74 306.13 NLC TS-I 420 T.O. dated 31.08.2010 382.48 371.17 Expansion NTPC (SR)- Ramagundam (I & 2100 T.O. dated 6.7.2011 771.06 808.99 II) NTPC-SR Stage-III 500 T.O. dated 6.7.2011 328.01 326.05 NTPC Kayankulam 360 T.O. dated 6.7.2011 250.59 210.20 NTPC Talcher 2000 T.O. dated 29.12.2011 983.61 983.61 Stage-II Provisional T.O. dated 1000 567.06 567.06 Simhadri 29.09.20117.1.8 In its revised submission dated February 1, 2012, TANGEDCO revised the capacity charges and variable charges on account of CGS Stations. The Commission has considered the same for further calculations. For approval of capacity charges for FY 2011-12 and FY 2012-13, the Commission has referred to the capacity charges from those CERC Orders in respect of the stations where CERC has issued provisional orders or final orders. For other stations, the Commission has approved the capacity charges for FY 2011-12 as submitted by TANGEDCO in its revised submission based on 9 months actuals and 3 months projections. Similarly for FY 2012-13, the Commission has approved the capacity charges as submitted by TANGEDCO in the Petition for those stations where no latest orders of CERC are available.7.1.9 As regards variable charges, the Commission has considered the variable charges submitted by TANGEDCO in its revised submission dated February 1, 2012. The Commission has further considered an escalation of 5% over the variable charges approved during FY 2011-12.7.1.10 For new stations, the Commission observed that TANGEDCO has not submitted any capacity charges. The Commission has considered the variable charges as submitted by TANGEDCO in its Petition for new stations during FY 2011-12 and FY 2012-13. 253
    • 7.1.11 For NTPC-ER, the Commission has considered only the fixed cost in FY 2012-13 in accordance with Merit Order Ranking.7.1.12 The power purchase cost approved by the Commission for various CGS Stations is tabulated below:Table 197: Total Power Purchase Cost in FY 2010-11 as approved by the Commission Petition Commission S. Capacity Energy Total Capacity Energy Total Particulars Quantum Quantum No Charges Charges Cost Charges Charges Cost Rs. Rs./ Rs. Rs. Rs./ Rs. MU MU Crore kWh Crore Crore kWh Crore 1 NLC-TS-I 3066 152 1.56 630 3066 152 1.56 630 NLC-TS-II 2 (Stage-I) 3042 106 1.40 532 3042 106 1.40 532 NLC-TS-II 3 (Stage-II) NLC-TS-I 4 Expansion 1509 189 1.75 453 1509 189 1.75 453 NTPC SR (I 5 & II) 4039 151 1.62 806 4039 151 1.62 806 NTPC SR 6 (III) 1024 91 1.67 262 1024 91 1.67 262 7 NTPC ER 735 47 2.40 224 735 47 2.40 224 NTPC - 8 Talcher II 3664 270 1.75 909 3664 270 1.75 909 9 Kayankulam 854 117 7.83 786 854 117 7.83 786 10 MAPS 1398 0 1.98 277 1399 0 1.98 277 11 KAIGA 860 0 3.06 263 860 0 3.06 263 12 UI 1441 0 3.27 472 1441 0 3.27 472 13 Total 21633 1123 5613 21633 1123 5613Table 198: Total Power Purchase Cost in FY 2011-12 as approved by the Commission Petition Commission S. Capacity Energy Total Capacity Energy Total Particulars Quantum Quantum No Charges Charges Cost Charges Charges Cost Rs. Rs./ Rs. Rs. Rs./ Rs. MU MU Crore kWh Crore Crore kWh Crore 1 NLC-TS-I 3066 140 1.75 676 3066 151 1.64 655 NLC-TS-II 2 (Stage-I) 3242 105 1.77 679 3242 165 1.86 769 NLC-TS-II 3 (Stage-II) 254
    • Petition Commission S. Capacity Energy Total Capacity Energy Total Particulars Quantum Quantum No Charges Charges Cost Charges Charges Cost Rs. Rs./ Rs. Rs. Rs./ Rs. MU MU Crore kWh Crore Crore kWh Crore NLC-TS-I 4 Expansion 1609 184 1.86 484 1609 211 1.82 505 NTPC SR (I 5 & II) 4139 149 1.81 897 4139 199 1.60 504 NTPC SR 6 (III) 1105 89 1.92 302 1105 89 1.83 862 7 NTPC ER 885 49 3.10 323 885 76 2.81 291 NTPC - 8 Talcher II 3690 243 2.17 1045 3690 247 2.26 324 9 Kayankulam 250 110 10.34 369 205 64 9.87 1082 10 MAPS 1498 0 2.04 306 1499 0 2.03 267 11 KAIGA 1107 0 3.13 347 1107 0 3.16 304 12 Simahadri 328 0 2.90 95 328 33 2.22 349 13 Kudankulam 333 0 3.00 100 0 0 0.00 106 NLC-TS- 14 IIExpansion 1295 0 2.00 259 0 0 0.00 0 15 UI 750 0 3.60 270 750 0 3.60 0 16 Total 23297 6152 21625 5784Table 199: Total Power Purchase Cost in FY 2012-13 as approved by the Commission Petition Commission S. Capacity Energy Total Capacity Energy Total Particulars Quantum Quantum No Charges Charges Cost Charges Charges Cost Rs. Rs./ Rs. Rs. Rs./ Rs. MU MU Crore kWh Crore Crore kWh Crore 1 NLC-TS-I 3066 129 1.84 692 3066 129 1.73 658 NLC-TS-II 2 (Stage-I) 3272 105 1.84 708 3272 172 1.95 812 NLC-TS-II 3 (Stage-II) NLC-TS-I 4 Expansion 1624 179 1.94 494 1624 205 1.91 516 NTPC SR (I 5 & II) 4164 147 1.89 932 4164 209 1.68 909 NTPC SR 6 (III) 1125 88 1.98 311 1125 89 1.92 305 7 NTPC ER 897 52 3.21 340 52 52 255
    • Petition Commission S. Capacity Energy Total Capacity Energy Total Particulars Quantum Quantum No Charges Charges Cost Charges Charges Cost Rs. Rs./ Rs. Rs. Rs./ Rs. MU MU Crore kWh Crore Crore kWh Crore NTPC - 8 Talcher II 3705 218 2.27 1061 3705 247 2.38 1127 9 Kayankulam 0 0 0.00 0 0 0 0.00 0 10 MAPS 1508 0 2.13 321 1508 0 2.13 321 11 KAIGA 1178 0 3.09 364 1178 0 3.31 390 12 Simahadri 925 0 2.90 268 1415 0 2.33 330 13 Kudankulam 3245 0 3.15 1022 1716 0 3.15 540 NLC-TS-II 14 Expansion 2135 0 2.00 427 1318 0 2.00 264 MAPS 15 (Addl.) 256 0 3.00 77 518 0 3.00 155 NTPC-TNEB 16 (JV) 3465 0 2.90 1005 2029 0 2.90 588 17 UI 145 0 4.14 60 0 0 0.00 04 18 Total 30710 8082 26638 74737.1.13 As regards PGCIL cost, the Commission has considered the same in accordance with the submission of TANGEDCO from FY 2010-11 to FY 2012-13. The PGCIL Cost as approved by the Commission from FY 2010-11 to FY 2012-13 in this Order is tabulated below:Table 200: PGCIL Cost approved by the Commission (Rs. Crore) FY 2010-11 FY 2011-12 FY 2012-13 Particulars Revised Revised Petition Approved Petition Approved Petition Approved Submission Submission PGCIL 457 457 457 480 480 480 504 504 CostPower Purchase from Independent Power Producers:7.1.14 The Commission in the Previous Tariff Order estimated the cost from IPPs with reference to PPAs. The Power Purchase Cost corresponding to the Power Purchase Quantum of IPPs as approved by the Commission is tabulated below: 256
    • Table 201: Power Purchase Quantum and Cost from Independent Power Producers as perPrevious Tariff Order FY 2010-11 S. Variable Particulars Quantum Fixed Charges Cost No Charges MU Rs. Crore Rs./ kWh Rs. Crore a GMR 1300 173 6.58 1028.45 b Samalpatti 300 100 7.04 310.64 c PPN 2259 297 3.13 1003.59 d Madurai 540 108 6.17 440.86 e ST-CMS 1809 259 1.48 526.06 f ABAN 850 0 2.26 192.1 g Penna 400 0 2.74 109.6 h Total 7458 936 3611 S. FY 2011-12 Particulars No Fixed Variable Quantum Cost Charges Charges MU Rs. Crore Rs./ kWh Rs. Crore a GMR 300 174 6.91 382 b Samalpatti 150 99 7.39 210 c PPN 1406 293 3.28 755 d Madurai 179 105 6.48 221 e ST-CMS 1574 250 1.55 494 f ABAN 850 2.37 202 g Penna 400 2.88 115 h Total 4859 921 2379 S. FY 2012-13 Particulars No Variable Quantum Fixed Charges Cost Charges MU Rs. Crore Rs./ kWh Rs. Crore a GMR 300 176 7.26 394 b Samalpatti 150 99 7.76 215 c PPN 1441 293 3.45 788 d Madurai 151 105 6.80 208 e ST-CMS 1574 241 1.63 498 f ABAN 850 2.44 208 g Penna 400 2.96 119 257
    • S. FY 2012-13 Particulars No Variable Quantum Fixed Charges Cost Charges MU Rs. Crore Rs./ kWh Rs. Crore h Total 4866 914 24307.1.15 TANGEDCO submitted in its Petition that it has entered into Power Purchase Agreements with several Independent Power Producers for purchasing electricity. It further submitted that the procurement from various sources is expected to be lower in the wake of planned procurement from the less expensive sources such as Talcher, Southern Region and Eastern Region. The Power Purchase cost as submitted by TANGEDCO in its Petition from FY 2010-11 to FY 2012-13 is tabulated below:Table 202: Power Purchase Quantum and Cost as submitted by TANGEDCO in thePetition FY 2010-11 S. Variable Particulars Quantum Fixed Charges Total Cost No Charges MU Rs. Crore Rs./ kWh Rs. Crore a GMR 875 153 7.15 779 b Samalpatti 378 100 7.54 385 c PPN 2494 336 3.47 1202 d Madurai 353 107 7.46 370 e ST-CMS 1652 303 2.00 633 f ABAN 820 116 1.58 246 g Penna 370 59 1.59 118 h Total 6942 1174 3732 FY 2011-12 S. Variable Particulars Quantum Fixed Charges Total Cost No Charges MU Rs. Crore Rs./ kWh Rs. Crore a GMR 795 146 9.52 902 b Samalpatti 575 117 9.74 678 258
    • FY 2011-12 S. Variable Particulars Quantum Fixed Charges Total Cost No Charges MU Rs. Crore Rs./ kWh Rs. Crore c PPN 2375 328 6.10 1777 d Madurai 575 132 10.02 708 e ST-CMS 1780 310 2.19 700 f ABAN 801 115 1.77 256 g Penna 365 61 1.75 125 h Total 7266 1209 5146 FY 2012-13 S. Variable Particulars Quantum Fixed Charges Total Cost No Charges MU Rs. Crore Rs./ kWh Rs. Crore a GMR 495 154 10.86 692 b Samalpatti 575 94 11.21 738 c PPN 2395 309 8.20 2273 d Madurai 575 140 12.02 831 e ST-CMS 1795 317 2.52 769 f ABAN 810 110 1.86 261 g Penna 375 60 1.84 128 h Total 7020 1183 5692Commission’s View:7.1.16 As regards FY 2010-11, TANGEDCO has submitted the actual power purchase cost corresponding to the quantum purchased from Independent Power Producers. Since TANGEDCO has submitted the actual expenses, the Commission has allowed the power purchase cost corresponding to the quantum purchased from IPPs.7.1.17 As regards the projection of power purchase cost of various IPPs in FY 2011-12 and FY 2012-13, the Commission asked TANGEDCO to submit the basis of projection. TANGEDCO in its reply submitted the different assumptions made in respect of power to be purchased from various IPPs. As regards variable cost, TANGEDCO submitted that it has considered an escalation of 15-20% in the projection of variable cost for FY 2012-13. 259
    • 7.1.18 TANGEDCO revised the cost of power purchase from various IPPs in FY 2010-11 and FY 2011-12. The revised data submitted by TANGEDCO is tabulated below:Table 203: Revised data submitted by TANGEDCO FY 2010-11 FY 2011-12 S. Fixed Variable Total Fixed Variable Total Particulars Quantum Quantum No Charges Charges Cost Charges Charges Cost Rs. Rs./ Rs. Rs. Rs./ Rs. MU Crore kWh Crore MU Crore kWh Crore a GMR 875 153 7.15 779 962 146 9.52 1062 b Samalpatti 378 100 7.54 385 351 117 9.74 459 c PPN 2496 336 3.47 1202 1483 328 6.10 1233 d Madurai 353 107 7.46 370 333 132 10.02 466 e ST-CMS 1653 303 2.00 633 1711 310 2.19 684 f ABAN 820 116 1.58 246 776 115 1.77 252 g Penna 370 59 1.59 118 366 61 1.75 125 h Total 6945 1173 3732 5982 1209 42817.1.19 The variable cost for various IPPs as observed from the power purchase bills is tabulated below:Table 204: Variable Cost as observed from the bills Variable Cost S. No Particulars Range (Rs./ kWh) 1 Madurai PPCL 8.66-10.58 2 Lanco Tanjore-ABAN 1.69-1.90 3 Penna 1.69-1.95 4 ST-CMS 1.82-2.12 5 GMR 7.94-9.80 6 Samalpatti 8.36-10.46 7 PPN 4.21-7.297.1.20 In view of the above, the Commission feels that the fixed and variable cost claimed by TANGEDCO in respect of various IPPs is considered for FY 2011-12 and FY 2012-13. Further the Commission has allowed only fixed cost for those IPPs which do not get scheduled as per Merit Order Despatch discussed in earlier section. Wherever the Power Stations are to despatched outside Merit Order, TANGEDCO shall obtain approval of the Commission in advance by furnishing reasons for such action. In case of emergencies 260
    • TANGEDCO is permitted to resort to such a practice but will approach the Commission within a week of such action along with the reasons for such action. The Power Purchase Cost allowed by the Commission during FY 2011-12 and FY 2012-13 is tabulated below:Table 205: Total Cost as considered by the Commission FY 2010-11 Variable S. Quantum Fixed Charges Total Cost Particulars Charges No MU Rs. Crore Rs./ kWh Rs. Crore a GMR 875 153 7.15 779 b Samalpatti 378 100 7.54 385 c PPN 2494 336 3.47 1202 d Madurai 353 107 7.46 370 e ST-CMS 1652 303 2.00 633 f ABAN 820 116 1.58 246 g Penna 370 59 1.59 118 h Total 6942 1174 3732 FY 2011-12 S. Variable Particulars No Quantum Fixed Charges Charges Total Cost MU Rs. Crore Rs./ kWh Rs. Crore a GMR 962 146 9.52 1062 b Samalpatti 351 117 9.74 459 c PPN 1483 328 6.10 1233 d Madurai 333 132 10.02 466 e ST-CMS 1711 310 2.19 684 f ABAN 776 115 1.77 252 g Penna 366 61 1.75 125 h Total 5982 1209 4281 FY 2012-13 S. Variable Particulars No Quantum Fixed Charges Charges Total Cost MU Rs. Crore Rs./ kWh Rs. Crore a GMR 154 154 b Samalpatti 94 94 261
    • FY 2012-13 S. Variable Particulars No Quantum Fixed Charges Charges Total Cost MU Rs. Crore Rs./ kWh Rs. Crore c PPN 309 309 d Madurai 140 140 e ST-CMS 1795 317 2.52 769 f ABAN 810 110 1.86 261 g Penna 375 60 1.84 128 h Total 2980 1183 1855Power Purchase from NCES and Captive Power Plants:7.1.21 The Commission in the Previous Tariff Order for TNEB estimated the cost from NCES sources in accordance with the respective Tariff Orders issued by the Commission. The Power Purchase Cost corresponding to the Power Purchase Quantum of NCES and Captive Power Plants as approved by the Commission is tabulated below:Table 206: Power Purchase Cost approved by the Commission in Previous Tariff Order FY 2010-11 S. No Particulars Quantum Variable Cost Total Cost MU Rs./ kWh Rs. Crore 1 CPP 671 3.84 258 2 Solar 0 0 0 3 Wind 9458 3.59 3399 4 Cogeneration 810 3.92 318 5 Biomass 111 4.66 52 6 Total 11050 4027 FY 2011-12 Quantum Variable Cost Total Cost S. No Particulars MU Rs./ kWh Rs. Crore 1 CPP 571 3.84 219.26 2 Solar 0 0 0.00 3 Wind 9973 3.59 3584.30 4 Cogeneration 1038 4.91 509.66 5 Biomass 111 4.80 53.31 262
    • FY 2011-12 Quantum Variable Cost Total Cost S. No Particulars MU Rs./ kWh Rs. Crore 6 Total 11693 4367 FY 2012-13 S. No Particulars Quantum Variable Cost Total Cost MU Rs./ kWh Rs. Crore 1 CPP 371 3.84 142.46 2 Solar 0 0 0.00 3 Wind 10487 3.59 3769.03 4 Cogeneration 1276 4.91 626.52 5 Biomass 111 4.80 53.31 6 Total 12245 4591.327.1.22 TANGEDCO submitted that it has entered into agreements with a few private energy generators owning captive generating sources and cogeneration sources, which pump their surplus power into the Grid. In addition, private wind power producers also sell power to TANGEDCO based on the options exercised by them. The estimation of the quantity of power likely to be made available for sale is based on prevailing trends. The Power Purchase Cost as submitted by TANGEDCO in the Petition towards NCES is tabulated below:Table 207: Power Purchase Quantum and Cost towards NCES Sources as submitted byTANGEDCO in the Petition FY 2010-11 MU Rs./ kWh Rs. Crore S. No Particulars Quantum Variable Cost Total Cost 1 CPP 460 3.50 161 2 Solar 2 4.49 1 3 Wind 8707 3.38 2944 4 Cogeneration 997 3.52 351 5 Biomass 110 4.47 49 263
    • FY 2010-11 MU Rs./ kWh Rs. Crore S. No Particulars Quantum Variable Cost Total Cost 6 Total 10276 3506 FY 2011-12 MU Rs./ kWh Rs. Crore S. No Particulars Quantum Variable Cost Total Cost 1 CPP 575 4.23 243 2 Solar 10 4.74 5 3 Wind 9245 3.38 3125 4 Cogeneration 1135 3.60 409 5 Biomass 115 4.54 52 6 Total 11080 3834 FY 2012-13 MU Rs./ kWh Rs. Crore S. No Particulars Quantum Variable Cost Total Cost 1 CPP 580 4.44 258 2 Solar 11 4.77 5 3 Wind 9988 3.38 3376 4 Cogeneration 1469 3.78 555 5 Biomass 120 4.77 57 6 Total 12168 4251Commission’s View:7.1.23 As regards FY 2010-11, TANGEDCO has submitted the actual power purchase cost corresponding to the quantum purchased on account of NCES and Captive Power Plants. Since TANGEDCO has submitted actual expenses pertaining to NCES and CPPs, the Commission has allowed the power purchase cost corresponding to the quantum purchased from NCES and CPPs. 264
    • 7.1.24 For projection of power purchase cost in FY 2011-12 and FY 2012-13, the Commission asked TANGEDCO to submit the basis of power purchase cost in FY 2011-12 and FY 2012-13. In reply TANGEDCO submitted the following: a. Projection of CPP, Cogeneration and Biomass Power Plants: 5% escalation has been taken for projection of power purchase cost in FY 2011-12 (Second Half-H2) considering actual in first six months of FY 2011-12 as the base and further 5% escalation on total of FY 2011-12 to arrive at power purchase cost in FY 2012-13. b. Solar Power under RPSSP Scheme of National Solar Mission: Rs. 6.21/ Unit as the base rate in FY 2011-12 and further 3% escalation on base rate of Rs. 6.21/ Unit in FY 2012- 13 c. Solar Plant: Rs. 4.50 per Unit as determined by the Commission in Order 6-1 dated September 22, 2009. d. Wind energy: Since wind is infirm power, an incremental increase of 6% in FY 2011-12 considering FY 2010-11 as the base and further 15% increase in FY 2012-13 considering FY 2011-12 as the base.7.1.25 As regards Power purchase cost from CPP and NCES Sources other than Solar, TANGEDCO submitted revised cost on account of power purchased and energy wheeled from FY 2010-11 to FY 2012-13 which is tabulated below:Table 208: Revised Submission for Wheeled Energy from FY 2010-11 to FY 2012-13 Cost for wheeled Power PP Cost (Rs. WheeledParticulars energy (Rs. Purchase (MU) Crore) Energy (MU) Crore)WindFY 2010-11 5263 1585 3169 1267FY 2011-12 5130 1545 3942 1577FY 2012-13 5408 1629 4141 1657CogenerationFY 2010-11 997 351 351 140FY 2011-12 1135 409 400 160FY 2012-13 1202 430 456 182BiomassFY 2010-11 110 49 0 0FY 2011-12 115 52 0 0 265
    • Cost for wheeled Power PP Cost (Rs. Wheeled Particulars energy (Rs. Purchase (MU) Crore) Energy (MU) Crore) FY 2012-13 56 25 0 0 CPP FY 2010-11 460 161 595 238 FY 2011-12 575 243 673 269 FY 2012-13 582 258 762 3057.1.26 The Commission has considered the above data submitted by TANGEDCO for calculation of Power Purchase Cost from all NCES Sources except Solar and CPP.7.1.27 As regards cost of energy wheeled in case of Captive Power Plants and other sources, the Commission is of the view that it is not correct to include the same in power purchase cost and it should be treated separately.7.1.28 For power purchase cost on account of solar energy sources, the Commission is of the view that the escalation rates and the methodology adopted by TANGEDCO in projection of power purchase cost from Solar units are reasonable. Therefore the Commission has considered the same for allowing the Power Purchase Cost on account of Solar Power Plants.Table 209: Power Purchase Cost approved by the Commission for various NCES Sources FY 2010-11 Particulars Quantum Cost (Rs. Rate (Rs./ (MU) Crore) kWh)CPP 460 161 3.50Solar 2.07 0.93 4.50Wind 5263 1585 3.01Cogeneration 997 351 3.52Biomass 110 49 4.47Sub-total-NCES 6833 2147 3.14 266
    • FY 2011-12 Particulars Quantum Cost (Rs. Rate (Rs./ (MU) Crore) kWh)CPP 575 243 4.23Solar 10.44 4.87 4.67Wind 5130 1545 3.01Cogeneration 1135 409 3.60Biomass 115 52 4.54Sub-total-NCES 6965 2254 3.24 FY 2012-13 Particulars Quantum Cost (Rs. Rate (Rs./ (MU) Crore) kWh)CPP 582 258 4.43Solar 10.78 5.14 4.77Wind 5408 1629 3.01Cogeneration 1202 430 3.58Biomass 56 25 4.54Sub-total-NCES 7258 2347 3.23Traders:7.1.29 In the Previous Tariff Order, the Commission approved the power purchase on account of traders at an average rate of Rs. 5 per kWh. The Power Purchase quantum and cost approved by the Commission in the previous tariff Order from FY 2010-11 to FY 2012- 13 is tabulated below:Table 210: Power Purchase on account of Traders approved in Previous Tariff Order FY 2010-11 FY 2011-12 FY 2012-13 S. No Particulars Quantum Cost (Rs. Quantum Cost (Rs. Quantum Cost (Rs. (MU) Crore) (MU) Crore) (MU) Crore) 1 Traders 4538 2269 2000 1000 2000 10007.1.30 TANGEDCO has not offered any explanations on its purchases from Power traders in its Petition. However TANGEDCO has submitted the quantum and corresponding cost to be 267
    • purchased from Traders during FY 2010-11 and FY 2011-12 in their Petition which is tabulated below:Table 211: Power Purchase Cost on account of Traders as submitted by TANGEDCO inthe Petition FY 2010-11 FY 2011-12 FY 2012-13 S. No Particulars Petition Petition Petition Quantum Cost (Rs. Quantum Cost (Rs. Quantum Cost (Rs. (MU) Crore) (MU) Crore) (MU) Crore) 1 Traders 10483 5528 12500 6789 5365 3060Commission’s View:7.1.31 The Commission observed that TANGEDCO has included the quantum and amount of power purchased from Traders in purchase of power from CGS. Power purchase from Traders does not fall under CGS. Hence the Commission is allowing it separately.7.1.32 The Commission observed that TANGEDCO in its subsequent submissions has changed the cost on account of Traders multiple times. TANGEDCO has also revised the actual cost on account of power purchased from traders in FY 2010-11. It is observed from the latest submission of TANGEDCO that the average rate of power purchase from traders in FY 2010-11 was Rs. 5.32 per kWh. The Commission has considered the power purchase quantum and cost from traders as submitted by TANGEDCO in its revised submission.7.1.33 Similarly for FY 2011-12, TANGEDCO has submitted an even higher rate of power purchased from traders, i.e., Rs. 6.82/ kWh. Therefore the Commission has capped the power purchase rate on the power purchased from Traders in FY 2011-12 at Rs 5.32 per kWh.7.1.34 As regards quantum to be purchased from Traders in FY 2012-13, energy from Traders is not going to be scheduled under Merit Order Despatch made by the Commission. The Commission observed that the energy is available from other sources in order to meet the energy requirement. However in order to provide flexibility and to set the benchmark, the Commission has considered the purchase from traders at 2000 MU at an average rate of Rs. 4.00/ kWh in FY 2012-13. 268
    • 7.1.35 The Commission further directs that TANGEDCO shall take prior approval from the Commission in case power purchase from traders in FY 2012-13 exceeds the quantum and rate specified in this Tariff Order.7.1.36 The power purchase cost on account of traders as approved by the Commission in this Order is tabulated below:Table 212: Power Purchase Cost on account of Traders approved by the Commission FY 2010-11 Previous Tariff Order Petition CommissionParticulars Cost Cost Quantum Quantum Quantum Cost (Rs. (Rs. (Rs. (MU) (MU) (MU) Crore) Crore) Crore)Traders 4538 2269 10540 5607 10540 5607 FY 2011-12 Previous Tariff Order Petition Revised Submission CommissionParticulars Cost Cost Cost Quantum Cost (Rs. Quantum Quantum Quantum (Rs. (Rs. (Rs. (MU) Crore) (MU) (MU) (MU) Crore) Crore) Crore)Traders 2000 1000 12500 6789 9400 6413 9400 5000 FY 2012-13Particulars Previous Tariff Order Petition Commission Quantum Cost Quantum Cost Quantum Cost (MU) (Rs. Crore) (MU) (Rs. Crore) (MU) (Rs. Crore)Traders 2000 1000 5365 3060 2000 800 269
    • Power Purchase Summary: 7.1.37 Based on the above discussions, the power purchase summary from FY 2010-11 to FY 2012-13 from all the above sources is tabulated below: Table 213: Power Purchase Summary from FY 2010-11 to FY 2012-13 FY 2010-11 FY 2010-11 Revised Submission dated Petition 14.03.2012 CommissionParticulars Average Average Average Quantum Cost Rate Quantum Cost Rate Quantum Cost Rate Rs. Rs./ Rs. Rs./ Rs. Rs./ MU Crore kWh MU Crore kWh MU Crore kWhOther SourcesIPPsGMR 875 779 8.91 875 779 8.90 875 779 8.90Samalpatti 378 385 10.19 378 385 10.18 378 385 10.18PPN 2494 1202 4.82 2496 1202 4.81 2496 1202 4.82Madurai 353 370 10.48 353 370 10.49 353 370 10.49ST-CMS 1652 633 3.83 1653 633 3.83 1653 633 3.83ABAN 820 246 3.00 820 246 3.00 820 246 3.00Penna 370 118 3.20 370 118 3.20 370 118 3.20Sub-total-IPPs 6942 3732 5.38 6945 3732 5.37 6945 3732 5.37NCESCPP 460 161 3.50 460 161 3.50 460 161 3.50Solar 2.07 0.93 4.49 2.07 0.93 4.50 2.07 0.93 4.50Wind 8707 2944 3.38 8707 2944 3.38 5263 1585 3.01Cogeneration 997 351 3.52 997 351 3.52 997 351 3.52Biomass 110 49 4.47 110 49 4.47 110 49 4.47Sub-total- 10276 3506 3.41 10276 3506 3.41 6833 2147 3.14NCESCGSNLC-TS-I 3066 630 2.05 3066 630 2.05 3066 630 2.05NLC-TS-II 1214 246 2.02 2.02(Stage-I) 3042 532 1.75 3042 533NLC-TS-II 1828 287 1.57 1.57(Stage-II)NLC-TS-I 1509 453 3.00 1509 489 3.24 1509 453 3.00Expansion 270
    • FY 2010-11 Revised Submission dated Petition 14.03.2012 CommissionParticulars Average Average Average Quantum Cost Rate Quantum Cost Rate Quantum Cost Rate Rs. Rs./ Rs. Rs./ Rs. Rs./ MU Crore kWh MU Crore kWh MU Crore kWhNTPC SR (I & 4039 806 2.00 4039 806 2.00 4039 806 2.00II)NTPC SR (III) 1024 262 2.56 1024 262 2.56 1024 262 2.56NTPC ER 735 224 3.04 735 224 3.04 735 224 3.04NTPC - 3664 909 2.48 3664 909 2.48 3664 909 2.48Talcher IIKayankulam 854 786 9.20 854 786 9.20 854 786 9.20MAPS 1398 277 1.98 1399 277 1.98 1399 277 1.98KAIGA 860 263 3.06 860 263 3.06 860 263 3.06Simahadri 0 0 0.00 0 0 0.00 0 0 0.00Kudankulam 0 0 0.00 0 0 0.00 0 0 0.00NLC-TS- 0 0 0.00 0 0 0.00 0 0 0.00IIExpansionMAPC (Addl.) 0 0 0.00 0 0 0.00 0 0 0.00NTPC-TNEB 0 0 0.00 0 0 0.00 0 0 0.00(JV)PGCIL-SR & 0 457 0.00 0 457 0.00 0 457 0.00ERUI 1441 472 3.27 1441 472 3.28 1441 472 3.28Subtotal-CGS 21633 6070 2.81 21633 6108 2.82 21633 6072 2.81Traders 10483 5528 5.27 10540 5607 5.32 10540 5607 5.32Wheeling onaccount ofBiomass, 387 968 387 4.00Cogen andCaptive PowerPlantsTotal 49335 19224 3.90 50362 19339 3.84 45950 17556 3.82 271
    • FY 2011-12 FY 2011-12 Revised Submission dated Petition 14.03.2012 CommissionParticulars Average Average Average Quantum Cost Rate Quantum Cost Rate Quantum Cost Rate Rs. Rs./ Rs. Rs./ Rs. Rs./ MU Crore kWh MU Crore kWh MU Crore kWhOther SourcesIPPsGMR 795 902 11.35 962 1062 11.04 962 1062 11.04Samalpatti 575 678 11.79 351 460 13.09 351 459 13.08PPN 2375 1777 7.48 1483 1233 8.31 1483 1233 8.31Madurai 575 708 12.32 333 466 14.00 333 466 13.99ST-CMS 1780 699 3.93 1711 684 4.00 1711 684 4.00ABAN 801 256 3.20 776 252 3.25 776 252 3.25Penna 365 125 3.42 366 125 3.42 366 125 3.42Sub-total-IPPs 7266 5146 7.08 5982 4282 7.16 5982 4281 7.16NCESCPP 575 243 4.23 575 243 4.23 575 243 4.23Solar 10 5 4.74 10 5 4.67 10 5 4.67Wind 9245 3125 3.38 9245 3125 3.38 5130 1545 3.01Cogeneration 1135 409 3.60 1135 409 3.60 1135 409 3.60Biomass 115 52 4.54 115 52 4.54 115 52 4.54Sub-total- 11080 3834 3.46 11081 3834 3.46 6965 2254 3.24NCESCGSNLC-TS-I 3066 676 2.21 3066 655 2.14 3066 655 2.14NLC-TS-II(Stage-I) 1503 432 2.87 1503 3242 679 2.10 769 2.37NLC-TS-II(Stage-II) 1739 472 2.72 1739NLC-TS-IExpansion 1609 484 3.01 1609 526 3.27 1609 504 3.14NTPC SR (I &II) 4139 897 2.17 4139 877 2.12 4139 862 2.08NTPC SR (III) 1105 302 2.73 1105 294 2.66 1105 291 2.64NTPC ER 885 323 3.65 885 324 3.67 885 324 3.66NTPC -Talcher II 3690 1045 2.83 3690 1204 3.26 3690 1082 2.93 272
    • FY 2011-12 Revised Submission dated Petition 14.03.2012 CommissionParticulars Average Average Average Quantum Cost Rate Quantum Cost Rate Quantum Cost Rate Rs. Rs./ Rs. Rs./ Rs. Rs./ MU Crore kWh MU Crore kWh MU Crore kWhKayankulam 250 369 14.75 205 247 12.03 205 267 13.00MAPS 1498 306 2.04 1499 304 2.03 1499 304 2.03KAIGA 1107 347 3.13 1107 349 3.16 1107 349 3.16Simahadri 328 95 2.90 328 117 3.57 328 106 3.22Kudankulam 333 100 3.00 0 0 0.00 0 0 0.00NLC-TS-IIExpansion 1295 259 2.00 0 0 0.00 0 0 0.00MAPC (Addl.) 0 0 0.00 0 0 0.00 0 0 0.00NTPC-TNEB(JV) 0 0 0.00 0 0 0.00 0 0 0.00PGCIL-SR &ER 0 480 0.00 0 480 0.00 0 480 0.00UI 750 270 3.60 750 270 3.60 750 270 3.60Subtotal-CGS 23297 6632 2.85 21625 6553 3.03 21625 6264 2.90Traders 12500 6789 5.43 9400 6413 6.82 9400 5000 5.32Wheelingcharges 531 1327 531 4.00Total 54143 22932 4.24 49415 21612 4.37 43973 17800 4.05 FY 2012-13 FY 2012-13 Petition Commission Particulars Quantum Cost Average Rate Quantum Cost Average Rate Rs. Rs. MU Crore Rs./ kWh MU Crore Rs./ kWh Other Sources IPPs GMR 495 692 13.98 0 154 0 Samalpatti 575 738 12.84 0 94 0 PPN 2395 2273 9.49 0 309 0 Madurai 575 831 14.46 0 140 0 273
    • FY 2012-13 Petition CommissionParticulars Quantum Cost Average Rate Quantum Cost Average Rate Rs. Rs. MU Crore Rs./ kWh MU Crore Rs./ kWhST-CMS 1795 769 4.28 1795 769 4.28ABAN 810 261 3.22 810 261 3.22Penna 375 128 3.43 375 128 3.43Sub-total-IPPs 7020 5692 8.11 2980 1855 6.22NCESCPP 580 258 4.44 582 258 4.43Solar 10.78 5.14 4.77 10.78 5.14 4.77Wind 9988 3376 3.38 5408 1629 3.01Cogeneration 1469 555 3.78 1202 430 3.58Biomass 120 57 4.77 56 25 4.54Sub-total-NCES 12168 4251 3.49 7258 2347 3.23CGSNLC-TS-I 3066 692 2.26 3066 658 2.15NLC-TS-II (Stage-I) 3272 708 2.16 3272 812 2.48NLC-TS-II (Stage-II)NLC-TS-I Expansion 1624 494 3.04 1624 516 3.18NTPC SR (I & II) 4164 932 2.24 4164 909 2.18NTPC SR (III) 1125 311 2.76 1125 305 2.71NTPC ER 897 340 3.79 52NTPC - Talcher II 3705 1061 2.86 3705 1127 3.04Kayankulam 0 0 0.00 0 0 0.00MAPS 1508 321 2.13 1508 321 2.13KAIGA 1178 364 3.09 1178 390 3.31Simahadri 925 268 2.90 1415 330 2.33Kudankulam 3245 1022 3.15 1716 540 3.15NLC-TS-IIExpansion 2135 427 2.00 1318 264 2.00MAPC (Addl.) 256 77 3.00 518 155 3.00NTPC-TNEB (JV) 3465 1005 2.90 2029 588 2.90PGCIL-SR & ER 0 504 0.00 0 504 0.00UI 145 60 4.14 0 0 0.00Subtotal-CGS 30710 8586 2.80 26638 7473 2.81Traders 5365 3060 5.70 0 0 0.00 274
    • FY 2012-13 Petition CommissionParticulars Quantum Cost Average Rate Quantum Cost Average Rate Rs. Rs. MU Crore Rs./ kWh MU Crore Rs./ kWhWheeling charges 727Total 55263 22316 4.04 36876 11675 3.17 275
    • 8 Aggregate Revenue Requirement of TANGEDCORegulatory Framework8.1.1 Regulation 68 of the TNERC Tariff Regulations specifies the following: “68 Component of tariff for supply of electricity (1) The charges for the electricity supplied by the Distribution licensee may include:- (a) a fixed charges / Demand Charges; (b) Charges for actual electricity supplied; (c) a rent or other charge in respect of meter or electrical plant provided by the Distribution licensee; (2) Rent for meter provided by the licensee and other charges are treated as non tariff charges and shall be determined by the Commission in accordance with the provision of Tamil Nadu Electricity Supply Code and Tamil Nadu Electricity Distribution Code. (3) Charges for actual electricity supplied and fixed charges are tariff related charges and the Commission shall determine these charges on an application from the Distribution licensee.”8.1.2 Regulation 69 (1) of the Tariff Regulation 2005, specifies that the Distribution licensee shall file application for retail distribution of electricity along with Aggregate Revenue Requirement (ARR).8.1.3 Regulation 70 of the Tariff Regulations 2005 specifies the following: “70. The Aggregate Revenue Requirement of Distribution licensee The Aggregate Revenue Requirement of Distribution licensee consists of the following:- (i) Cost of Power Purchase (ii) Operation and Maintenance expenses (iii) Depreciation (iv) Interest and cost of finance (v) Income Tax (vi) Provision for Bad and Doubtful Debts (vii) Provision for Insurance (viii) Provision for contingency reserve (ix) other expenses (x) Return on equity / Reasonable rate of return” 276
    • Fixed Cost:8.1.4 The Commission in Chapter-5 of this Order has approved fixed cost pertaining to Distribution function of TANGEDCO, which is under: Table 214: Fixed Cost approved by the Commission in Chapter 5 (in Rs Crore) Petition Approved Particulars FY 11 FY 12 FY 13 FY 11 FY 12 FY 13 Operation and Maintenance Expenses 2623 2728 2837 2623 2728 2837 Depreciation 278 307 352 229 254 287 Interest on Long term loan 1651 3150 3355 1651 3150 3355 Other Debits & extra ordinary items 28 29 29 28 29 29 Prior Period Debit/(Credit) Charges 732 236 0 0 0 0 Reasonable Return / Return on Equity 153 199 208 0 0 0 Demand Side Management 0 0 0 0 0 10 Total 5465 6649 6780 4531 6161 6518Own Generation and Power Purchase Cost:8.1.5 The Commission in Chapter 6 and 7 of this Order has approved cost pertaining to own generating plants and Power purchase from other sources of TANGEDCO, which is under: Table 215: Power Purchase Cost approved by the Commission (in Rs Crore) FY 2010-11 Revised Submission datedParticulars Petition Commission 14.03.2012 Quant Average Quant Average Quant Averag Cost Cost Cost um Rate um Rate um e Rate Rs Rs Rs Rs/kW MU Rs/kWh MU Rs/kWh MU Crore Crore Crore hOwn 23845 6118 2.57 23192 6118 2.64 23233 5404 2.33GenerationPowerPurchase- 49335 19224 3.90 50362 19339 3.84 45950 17556 3.82OtherSourcesTotal 73180 25342 3.46 73555 25457 3.46 69183 22961 3.32 277
    • FY 2011-12 Revised Submission dated Petition Commission 14.03.2012Particulars Avera Quant Average Quantu Average Quan Cost Cost Cost ge um Rate m Rate tum Rate Rs Rs Rs Rs/kW MU Cror Rs/kWh MU Rs/kWh MU Crore Crore h eOwnGeneration 26737 7473* 2.80 26159 7392 2.83 25680 6582 2.56PowerPurchase- 54143 22932 4.24 49415 21612 4.37 43973 17800 4.05OtherSourcesTotal 80880 30405 3.76 75574 29005 3.84 69653 24382 3.50Note:*Rs 7473 Crore is Own Generation cost submitted by TANGEDCO formats along with the Petition. Howeverfor the purpose of Revenue gap calculation in page no. 125 of their petition, TANGEDCO has considered Rs 7467Crore towards cost of Own generation. The Commission for the purpose of comparison has considered thesubmission of TANGEDCO at various places in this Order. FY 2012-13 Petition Commission Particulars Average Average Quantum Cost Quantum Cost Rate Rate Rs Rs MU Rs/kWh MU Rs/kWh Crore Crore Own Generation 32611 10226 3.14 33908 8939 2.64 Power Purchase-Other 55263 22316 4.04 36876 11675 3.17 Sources Total 87874 32543 3.70 70784 20614 2.91Intra-State Transmission Charges: 8.1.6 The Intra-State transmission charges approved by the Commission in last Tariff Order are as below:Table 216: Intra-State Transmission Charges approved by the Commission in Last Tariff Order (in Rs Crore) Last Tariff Order Particulars FY 11 FY 12 FY 13Annual Transmission Charges payable to TANTRANSCO 1786 1917 2062 278
    • 8.1.7 The Commission noted that the TANTRANSCO has sought retrospective revision of Intra-State Transmission Charges for FY 2010-11 and FY 2011-12. Regulation (vii) of TNERC (Terms and Conditions for Determination of Tariff for Intra state Transmission / Distribution of Electricity under MYT Framework) Regulations, 2009, states as under: “vii).True up of variations in revenue and cost The variations on account of controllable factors like sales and power purchase shall be reviewed at the end of each year of the control period based on audited accounts of the licensee and prudence checks by the Commission.”8.1.8 The Commission notes that the FY 2010-11 and FY 2011-12 are already over and the transmission charges approved by the Commission in last Tariff Order would be payable by TANGEDCO, for FY 2010-11 and FY 2011-12. Truing up requirement for FY 2010- 11 and FY 2012-13, if any, based on prudence check of the Commission would be carried forward to FY 2012-13 and would be recoverable from Transmission tariff of FY 2012-13.8.1.9 The transmission charge approved by the Commission in Order for TANTRANSCO is as under:Table 217: Intra-State Transmission Charges approved by the Commission (in Rs Crore) Petition Approved Particulars FY 11 FY 12 FY 13 FY 11 FY 12 FY 13 Annual Transmission Charges 2333 2608 2782 1786 1917 3076 payable to TANTRANSCONon Tariff and Other Income8.1.10 The Commission has accepted the submission of TANGEDCO pertaining to Non Tariff Income and Other Income, except income from Trading, as same has not been considered as a part of Sales. Non tariff Income and Other Income approved by the Commission is as under: 279
    • Table 218: Non Tariff Income and Other Income approved by the Commission (in Rs Crore) Petition Approved Particulars FY 11 FY 12 FY 13 FY 11 FY 12 FY 13 (i) Non Tariff Revenue 522 624 746 522 624 746 (ii) Other Income 275 289 57 275 289 57 (iii)Other Income for Generation 70 59 59 70 59 59 (iv) Income from Trading 71 0 0 0 0 0Sharing of Gain and Losses8.1.11 Regulation (ix) of TNERC (Terms and Conditions for Determination of Tariff for Intra state Transmission / Distribution of Electricity under MYT Framework) Regulations, 2009, states as under: “ix). Mechanism for sharing approved gains or losses arising out of controllable factors. The financial loss, if any, due to failure to achieve the target for the controllable costs in any of the years in the control period shall be borne by the licensees and the gains, if any, shall be shared with the beneficiaries at 50: 50.”8.1.12 The Commission notes that the due to higher T&D loss vis-a-vis approved by the Commission in its last tariff Order, additional power purchase cost incurred by TANGEDCO is as under:Table 219: Additional power Purchase on account of Higher T&D loss (in Rs Crore) Particulars Reference FY 2010-11 FY 2011-12Sales A 53829 53916T&D Loss B 21.73% 22.13%Energy Requirement C=A/(1-B) 68770 69240Target T&D Loss D 17.60% 17.20%Energy Requirement as per Target E=A/(1-D) 65326 65116Extra Power Purchased F=C-E 3444 4124Average Power Purchase Cost approved Rs/kWh 3.32 3.50Additional Power Purchase on account of higher T&D loss Rs Crore 1143 1444 280
    • 8.1.13 Regulation (vii) of TNERC (Terms and Conditions for Determination of Tariff for Intra state Transmission / Distribution of Electricity under MYT Framework) Regulations, 2009, states as under: “vii).True up of variations in revenue and cost The variations on account of controllable factors like sales and power pur