tamil nadu electricity regulatory commission · determination of tariff for generation and...
Post on 26-May-2018
228 Views
Preview:
TRANSCRIPT
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 1
TAMIL NADU ELECTRICITY REGULATORY
COMMISSION ----------------------------------------------------------------
Determination of Tariff for Generation and
Distribution
---------------------------------------------
T.P. No. 1 of 2013
Order dated: 20-06-2013
(effective from 21-06-2013)
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
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
T.P. No. 1 of 2013
Date of Order: 20-06-2013
In the matter of: Determination of Tariff for Generation and Distribution
In exercise of the powers conferred by clauses (a), (c),(d) of sub-section (1) of section 62 and
clause (a) of sub-section(1) of section 86 of the Electricity Act 2003, (Central Act 36 of 2003) and
all other powers hereunto enabling in that behalf and after considering the views of the State
Advisory Committee meeting held on 26.4.2013 and after considering suggestions and objections
received from the public during the Public hearings held on 03.05.2013, 08.05.2013, 10.05.2013,
and 17.05.2013, as per sub-section (3) of section 64 of the said Act, the Tamil Nadu Electricity
Regulatory Commission, hereby, passes this order for Generation and Distribution Tariff.
This Order shall take effect on and from the June 21, 2013.
Sd/- Sd/-
(S. Nagalsamy) (K.Venugopal)
Member Member
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 3
June 2013
TABLE OF CONTENTS
LIST OF ABBREVIATIONS ................................................................................................................................................... 6
A1: INTRODUCTION ........................................................................................................................................................... 7
PREAMBLE ......................................................................................................................................................... 7 TARIFF FILING ..................................................................................................................................................... 8
PROCEDURE ADOPTED ......................................................................................................................................... 8 TRANSFER SCHEME ............................................................................................................................................ 10
BRIEF NOTE ON TARIFF FILING AND PUBLIC HEARING ............................................................................................... 13
APPLICABILITY OF ORDER .................................................................................................................................... 15 LAYOUT OF THE ORDER ...................................................................................................................................... 15
APPROACH OF THE ORDER ................................................................................................................................... 16
A2: STAKEHOLDERS’ COMMENTS, TANGEDCO’S REPLY AND COMMISSION’S VIEW ......................................................... 18
1. GENERAL ISSUES ..................................................................................................................................... 18
2. DELAY IN FILING ...................................................................................................................................... 25
3. O&M EXPENSES..................................................................................................................................... 26
4. FUEL COST AND FPAC ............................................................................................................................. 27 5. GENERATION AND POWER PURCHASE ......................................................................................................... 29
6. AT&C LOSSES ........................................................................................................................................ 32
7. INTEREST EXPENSES ................................................................................................................................. 33 8. REGULATORY ASSET ................................................................................................................................ 35 9. CROSS SUBSIDY, COST TO SERVE AND AVERAGE COST OF SUPPLY ..................................................................... 41
10. MERIT ORDER DESPATCH ......................................................................................................................... 48
11. CROSS SUBSIDY SURCHARGE ..................................................................................................................... 51 12. SUBSIDY ................................................................................................................................................ 55
13. PEAK HOURS AND TIME SLOTS .................................................................................................................... 55
14. SOLAR PURCHASE OBLIGATION .................................................................................................................. 56
15. RENEWABLE POWER ................................................................................................................................ 56 16. EQUITABLE DISTRIBUTION OF POWER .......................................................................................................... 57
17. IMPACT OF THANE CYCLONE .................................................................................................................... 57 18. SALES ................................................................................................................................................... 58 19. TARIFF RELATED COMMENTS ..................................................................................................................... 58
a. Tariff for HT Industries ....................................................................................................................... 58
b. Tariff for HT Commercial .................................................................................................................... 59
c. Tariff for Agriculture and Hut services ............................................................................................... 59 d. Tariff for Streetlight and Water supply .............................................................................................. 61
e. Tariff for Domestic ............................................................................................................................. 61
f. Tariff for Tiny Industries ..................................................................................................................... 62
g. Tariff for LT Commercial ..................................................................................................................... 63 h. Tariff General ..................................................................................................................................... 63 i. Request for Separate Category .......................................................................................................... 65
20. CONSUMER ISSUES AND QUALITY OF SUPPLY ................................................................................................ 68 21. OBJECTIONS/SUGGESTIONS BY SOUTHERN RAILWAYS .................................................................................... 70
A3: FINAL TRUE-UP FOR FY 2010-11, PROVISIONAL TRUE-UP FOR FY 2011-12 AND ANNUAL PERFORMANCE REVIEW FOR
FY 2012-13 ................................................................................................................................................................ 75
ENERGY SALES – FY11 AND FY12 ........................................................................................................................ 75
Impact of Wheeling units and Cost – FY 2010-11 and FY 2011-12 .............................................................. 77
ENERGY SALES – FY 2012-13 ............................................................................................................................. 80 ENERGY AVAILABILITY ........................................................................................................................................ 85
Own Generation .......................................................................................................................................... 86
Power Purchase from other sources ............................................................................................................ 94 ENERGY BALANCE AND DISTRIBUTION LOSS .......................................................................................................... 104 FIXED EXPENSES .............................................................................................................................................. 106
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 4
June 2013
Operation and Maintenance Expenses ...................................................................................................... 106
Segregation of accounts ............................................................................................................................ 119
Capital Expenditure and capitalization ...................................................................................................... 121 Depreciation .............................................................................................................................................. 124
Interest on long term loans and other financing charges .......................................................................... 126
Return on Equity ........................................................................................................................................ 132
Interest on Working Capital ....................................................................................................................... 135 Other Debits............................................................................................................................................... 138
Prior Period Expenses ................................................................................................................................ 140 Demand Side Management ....................................................................................................................... 141 Contribution for Contingency reserves ...................................................................................................... 141
Summary of fixed Cost approved for Distribution function ....................................................................... 142
EXPENSES ON ACCOUNT OF GENERATION ............................................................................................................. 142
Capacity charges for own generating stations .......................................................................................... 143 Variable cost for own generating stations ................................................................................................ 151
POWER PURCHASE FROM OTHER SOURCES ........................................................................................................... 166
Central generating stations ....................................................................................................................... 166
Independent Power Producers ................................................................................................................... 170 Non conventional energy sources and Captive power plants .................................................................... 172 Power purchase from traders and other sources ...................................................................................... 174
Power Grid Corporation of India Limited (PGCIL) Charges ........................................................................ 176 Intrastate Transmission Charges ............................................................................................................... 177
AGGREGATE REVENUE REQUIREMENT AND REVENUE GAP FOR THE FIRST CONTROL PERIOD ........................................... 178
Non Tariff and Other Income ..................................................................................................................... 179
Estimation of additional power purchase cost due to higher T&D loss ..................................................... 179 Revenue from Sale of Power – FY 2010-11 and FY 2011-12 ...................................................................... 181
Revenue from Sale of Power – FY 2012-13 ................................................................................................ 182
Low Power Factor Surcharge ..................................................................................................................... 183 Revenue Gap for the first control period ................................................................................................... 184
A4: AGGREGATE REVENUE REQUIREMENT FOR THE SECOND CONTROL PERIOD – FY 2013-14 TO FY 2015-16 ................ 185
ENERGY SALES ................................................................................................................................................ 185
ENERGY AVAILABILITY ...................................................................................................................................... 192 Own Generation ........................................................................................................................................ 192
Power Purchase from other sources .......................................................................................................... 200 ENERGY BALANCE AND DISTRIBUTION LOSS .......................................................................................................... 210 FIXED EXPENSES .............................................................................................................................................. 212
Operation and Maintenance Expenses ...................................................................................................... 212
Capital Expenditure and capitalization ...................................................................................................... 219
Depreciation .............................................................................................................................................. 223 Interest on long term loans and other financing charges .......................................................................... 226
Return on Equity ........................................................................................................................................ 231
Interest on Working Capital ....................................................................................................................... 232
Other Debits............................................................................................................................................... 235 Contribution for Contingency reserves ...................................................................................................... 236 Summary of fixed Cost approved for Distribution business ....................................................................... 237
EXPENSES ON ACCOUNT OF GENERATION ............................................................................................................. 237 Capacity charges for own generating stations .......................................................................................... 238
Variable cost for own generating stations ................................................................................................ 245
POWER PURCHASE FROM OTHER SOURCES ........................................................................................................... 259
Central generating stations ....................................................................................................................... 259 Independent Power Producers ................................................................................................................... 262
Non conventional energy sources and Captive power plants .................................................................... 264
Power purchase from traders and other sources ...................................................................................... 265 Power Grid Corporation of India Limited (PGCIL) Charges ........................................................................ 267 Intrastate Transmission Charges ............................................................................................................... 267
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 5
June 2013
Merit order Dispatch ................................................................................................................................. 268
Summary of power purchase costs ............................................................................................................ 273
AGGREGATE REVENUE REQUIREMENT FOR THE SECOND CONTROL PERIOD .................................................................. 281 Non Tariff Income (NTI) and Other Income ............................................................................................... 282
Higher interest expenses due to abnormal Capitalization ......................................................................... 282
A5: ESTIMATION OF REVENUE GAP AND TARIFF DETERMINATION FOR FY 2013-14 ....................................................... 284
Revenue from Sale of Power –FY 2013-14 ................................................................................................. 284
REVENUE GAP AND DETERMINATION OF REGULATORY ASSET ................................................................................... 289
REVENUE ACCOUNT AND AMORTIZATION OF REGULATORY ASSET ............................................................................ 290
VOLTAGE WISE COST TO SERVE, AVERAGE COST OF SUPPLY AND CROSS SUBSIDY REDUCTION......................................... 294 Voltage wise cost to serve for FY 2013-14 ................................................................................................. 294
Embedded cost method ............................................................................................................................. 299
Voltage wise cost to serve ......................................................................................................................... 304 Average Cost of Supply and Cross subsidy reduction ................................................................................ 306
OPEN ACCESS CHARGES ................................................................................................................................... 308 Wheeling Charges ...................................................................................................................................... 308
Cross Subsidy Surcharge ............................................................................................................................ 309 Grid Availability Charges ........................................................................................................................... 313
Additional Surcharge ................................................................................................................................. 315
Restoration Charges .................................................................................................................................. 315
FUEL AND POWER PURCHASE COST ADJUSTMENT MECHANISM (FPCA) ...................................................................... 315 TARIFF RATIONALIZATION AND REVISION OF RETAIL SUPPLY TARIFFS ........................................................................... 317
PF Incentive................................................................................................................................................ 317
TOD Tariff .................................................................................................................................................. 318
A6: TARIFF SCHEDULE .................................................................................................................................................... 321
TARIFF FOR HIGH TENSION SUPPLY CONSUMERS ...................................................................................... 321
TARIFF FOR LOW TENSION SUPPLY CONSUMERS ....................................................................................... 327
A7: SUMMARY OF DIRECTIVES ...................................................................................................................................... 341
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 6
June 2013
List of Abbreviations
Abbreviation Description
A & G Administration and General Expenses
ABC Aerial Bunched Cables
ABR Average Billing Rate
APTEL Appellate Tribunal for Electricity
ARR Aggregate Revenue Requirement
CAGR Compounded Annual Growth Rate
CEA Central Electricity Authority
CERC Central Electricity Regulatory Commission
CFL Compact Fluorescent Lamps
CGS Central Generating Station
COS Cost of Supply
CPP Captive Power Plant
CSD Consumer Security Deposit
CWIP Capital Work in Progress
DA Dearness Allowance
EA Electricity Act
ED Electricity Duty
FRP Financial Restructuring Plan
FY Financial Year
GFA Gross Fixed Assets
G.O. Government Order
GPF General Provident Fund
GoTN Government of Tamil Nadu
HT High Tension
HVDS High Voltage Distribution System
kWh Kilo-watt Hour
LT Low Tension
LTOA Long Term Open Access
MU Million Units
MW Mega-watt
MYT Multi-Year Tariff
NTI Non Tariff Income
O & M Operation & Maintenance
PF Power Factor
PLF Plant Load Factor
R & M Repair & Maintenance
O & M Operation & Maintenance
RoE Return on Equity
SLDC State Load Despatch Centre
STOA Short Term Open Access
T&D Transmission & Distribution
TANGEDCO Tamil Nadu Generation and Distribution Corporation Ltd.
TANTRANSCO Tamil Nadu Transmission Corporation Ltd.
TNEB Tamil Nadu Electricity Board
TNERC Tamil Nadu Electricity Regulatory Commission
ToD Time of Day
TP Tariff Policy
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 7
June 2013
A1: INTRODUCTION
Preamble
1.1 Consequent to the enactment of the Electricity Regulatory Commissions Act 1998
(Central Act 14 of 1998), the Government of Tamil Nadu (GoTN) constituted the
Tamil Nadu Electricity Regulatory Commission (TNERC) vide G.O.Ms.No.58,
Energy (A1) Department, dated 17-03-1999.
1.2 The Commission issued its first tariff order (Order No 1 of 2002) 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.
1.3 Electricity Regulatory Commission Act, 1998 was repealed and the Electricity Act
2003 (Central Act 36 of 2003) was enacted with effect from 10-06-2003.
1.4 The Commission notified the Tamil Nadu Electricity Regulatory Commission (Terms
and Conditions for Determination of Tariff) Regulations 2005 (herein after called
Tariff Regulations) on 03-08-2005under Section 61 read with Section 181 of the Act.
1.5 The Commission issued separate order (Order No. 2 of 2006) on Transmission
charges, Wheeling charges, Cross Subsidy surcharge and Additional surcharge on15-
05-2006, based on the petition filed by TNEB on 26-09-2005 under Section 42 of the
Act.
1.6 The Commission had issued its first Renewable Energy Tariff Order on 15-05-2006.
Later in 2009, Commission has issued technology wise second Renewable Energy
Tariff Orders. Further on 31-07- 2012, the Commission issued its third Tariff Order
with respect to renewable energy sources.
1.7 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) on 11-02-2009.
1.8 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. The Commission issued its
second Retail Tariff Order on 31.07.2010 (Order No. 3 of 2010).
1.9 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.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 8
June 2013
1.10 Government of Tamil Nadu, in G.O (Ms) No 114 Energy Dept, dated 08-10-2008
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 the Government.
1.11 Tamil Nadu Generation and Distribution Corporation Ltd. was incorporated on 01-12-
2009 and started functioning as such with effect from. 01-11-2010.
1.12 Subsequently TANGEDCO filed tariff petition for determination of tariff for
Generation and Distribution for the year FY 2012-13, the Commission scrutinised and
reviewed the same. After a thorough review the third Order of the Commission on
determination of Generation and Retail Tariff was passed on 30-03-2012 (Order No. 1
of 2012).
Tariff Filing
1.13 The Tamil Nadu Generation and Distribution Corporation Ltd. (TANGEDCO) has
filed its application before the Commission on 19-02-2013 for final true-up and
approval of Aggregate Revenue Requirement (ARR) for the year 2010-11based on 5
months audited accounts, provisional true-up and approval of ARR for the year 2011-
12 based on provisional accounts, Annual Performance Review (APR) for the year
2012-13 based on estimates and its Multi Year Tariff petition for 2013-14 to 2015-16
along with tariff revision for 2013-14. There was a delay of 81 days in filing this
Petition and the Petitioner filed an Interim Application for condoning the delay of 81
days.
1.14 The Commission has written three letters to TANGEDCO directing them to file the
Tariff Petition for FY 2013-14. Copies of letters dated 8th January 2013, 21
st January
2013 and 8th February 2013 are placed as Annexure I. After hearing the submissions
of TANGEDCO, the Petition was admitted on 21-02-2103 after condoning the delay
and registered as T.P. No 1 of 2013. Copy of the admission order is placed as
Annexure II
Procedure Adopted
1.15 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.”
1.16 The public notice containing the salient details with regard to the petition was
approved and communicated to TANGEDCO on 28-02-2013, with a direction to
arrange publication of the notice in news papers and it was published on 02-03-2013.
The written objections/suggestions/views from stakeholders were invited by 02-04-
2013.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 9
June 2013
1.17 The TANGEDCO published the public notice in the following newspapers on March
02, 2013.
a) The New Indian Express (English Daily); b) The Deccan Chronicle (English Daily); c) Dinamani (Tamil Daily) and
d) Makkal Kural (Tamil Daily)
1.18 The Petition was placed before the State Advisory Committee on 26-04-2013. The list
of Members who participated in the meeting is detailed as Annexure III to this Order.
1.19 The list of stakeholders who have submitted written objections/suggestions/views
regarding the petition in response to the public notice are detailed in Annexure IV and
Objections/suggestions/views are included in Chapter A2.
1.20 The Commission conducted public hearing at the following places on the dates noted
against each:
Date Day Place Venue
03-05-2013 Friday Chennai Tamil Isai Sangam, Raja Annamalai Mandram, (Near
High Court),5, Esplanade Road, Chennai- 108
08-05-2013 Wednesday Tiruchirappalli Kalaiarangam Thirumana Mahal,
(Near central bus stand), Tiruchirappalli
10-05-2013 Friday Madurai
Platinum Jubilee Hatsun Aauditorium, Tamil Nadu
Chamber of Commerce and Industry, 178-B
Kamarajar Salai, Madurai
17-05-2013 Friday Coimbatore Corporation Kalaiarangam, R.S. Puram, Coimbatore
1.21 The lists of participants in each public hearing, is attached as Annexure V to this
Order. The views / comments / objections raised by the participants are discussed in
Chapter A2.
The Electricity Act, 2003, Tariff Policy (TP) and Regulations
1.22 Section-62 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
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 10
June 2013
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 sale 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.”
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.”
1.23 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.
Transfer scheme
1.24 The proposal for Assets Transfer and Employee transfer called as Tamil Nadu
Electricity Board (Reorganization and Reforms) Transfer Scheme 2010 was notified
by the Government of Tamil Nadu vide G.O. (Ms).No.100 Energy (B2) Department
dated 19th Oct 2010 with the effective date of implementation as 1st Nov 2010. Based
on the above notification TNEB has been re-organized from 1st Nov 2010.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 11
June 2013
1.25 This Transfer Scheme is provisional and addresses various issues like transfer of
assets, revaluation of assets and partly addresses the issue of accumulated losses. This
Transfer Scheme envisages deployment of staff of the erstwhile TNEB to
TANGEDCO and TANTRANSCO. The Commission in its earlier Tariff Order No. 3
of 2010 dated 31-07-2010 had suggested in line with the National 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 clean up the
Balance Sheet of the successor companies and allow them to start on a clean slate so
that the successor entities could start performing better. The statutory advices that
have been sent to the Government of Tamil Nadu in this regard are appended as
Annexure VI. The Commission has also issued a 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
and efficiently monitored, which will enable proper investments and growth of the
individual company. This document is appended as Annexure VII.
1.26 Subsequently, as per the request of TNEB Limited, the second provisional transfer
scheme was notified by the State Government vide G.O. (Ms.) No.2, Energy (B2)
department, dated 2nd January 2012 with amendment in the restructuring of Balance
Sheet of TNEB for the successor entities i.e. TANGEDCO and TANTRANSCO,
considering the audited balance sheet of TNEB for FY 2009-10 and it had extended
the provisional time for final transfer of assets and liabilities to the successor entities
of erstwhile TNEB up to 31st October 2012. The same has been appended as
Annexure VIII.
1.27 This Transfer Scheme is also provisional and is subject to revision. The transactions
for 7 months i.e. from 1st April 2010 to 30th October, 2010 do not get reflected in the
opening balance sheet of the TANGEDCO as specified in the Transfer Scheme.
Impact of Provisional Balance Sheet:
a) According to Rule 9 (1) of Transfer Scheme, 2010 issued on 19th October 2010, the
transfer of assets and liabilities under the scheme is provisional and will be made final
upon the expiry of 12 months from the effective date of transfer.
b) The date was extended through notification dated 3rd January 2012 for additional 1
year i.e. upto 31st October 2012 for final transfer of assets and liabilities to successor
entities of erstwhile TNEB.
c) As on the date of filing of this petition, TANGEDCO and TANTRANSCO has sought
permission for extension of 6 months i.e. up to 30.04.2013 for final transfer of assets
and liabilities to successor entities of erstwhile TNEB and the same has been
approved by GoTN through G.O.Ms(23) dated 8th March 2013 (Annexure IX).
TANGEDCO and TANTRANSCO have now sought an extension for another six
months i.e. upto 31st October 2013 for final transfer of assets and liabilities to
successor entities of erstwhile TNEB and the same has been addressed to the GoTN
for approval and notification.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 12
June 2013
d) In the absence of availability of opening balances based on the final Notification of
GoTN, as per transfer scheme, TANGEDCO has considered the opening balance as
per the provisional transfer scheme notified on 2nd January 2012.
1.28 Hence, Commission is of the view that once the final transfer scheme is notified by
the State Government, the impact due to revision in the opening balance of Fixed
Assets, Loan and Equity may have to be revisited and accounted during the tariff
determination process of the concerned year.
Unbundling of TNEB - 1st November 2010
1.29 TNEB was unbundled on 1.11.2010. Consequently it started functioning as two
separate entities namely TANGEDCO and TANTRANSCO. While TANGEDCO
was made responsible for generation and distribution, TANTRANSCO was made
responsible for transmission activities within the State.
1.30 The Commission in its Tariff Order issued on 31st July 2010 as well as 30th March
2012 had indicated that the accumulated losses upto the date of unbundling will have
to be dealt with in accordance with the National Electricity Policy and Tariff Policy.
The Commission had also clearly indicated that any losses incurred after 1.11.2010
only are being dealt with in various Tariff Orders subsequent to unbundling. In this
connection, the Commission would like to extract the following three paragraphs from
the Tariff Petition filed by TANGEDCO for the financial year 2013-14.
“10.19.6 As per the Tariff Order, the Hon’ble Commission had expressed a view 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 National Electricity Policy and Tariff Policy. The
provisions of the National Electricity 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.
10.19.7 In line with the National Tariff Policy, National Electricity policy and as per
the Tariff Order dated 30th March 2012, TANGEDCO have not claimed any relief on
account of accumulated losses prior to unbundling on 1-11-2010 in the given petition.
The similar stand was taken in the earlier petition also.
10.19.8 The proposal of TANGEDCO is to create regulatory assets for the
unrecovered deficit post unbundling only. TANGEDCO would like to submit that even
though it has requested for creation of regulatory asset of the amount which is
unrecovered deficit after claiming part as a tariff hike, all efforts has been undertaken
to reduce such deficit and are under process to carry out Financial Restructuring
Plan under the guidance of State Government.”
1.31 The revenue gaps arising subsequent to unbundling were dealt with as Regulatory
Asset in the Order of the Commission dated 30th March 2012 and is being discussed
again in this Order.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 13
June 2013
Brief Note on Tariff Filing and Public Hearing
1.32 In this Order Commission has dealt with important matters such as tariff schedule,
new capacity additions by TANGEDCO, Regulatory Asset Amortisation etc.
1.33 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 on 3rd May 2013, Tiruchirapalli
on 8th May 2013, at Madurai on 10
th May 2013 and at Coimbatore on 17
th May 2013.
1.34 The Commission directs TANGEDCO to properly monitor the on-going projects so
that they get commissioned without further delay. The projects which were scheduled
to get commissioned last year have not been commissioned so far and have to be
commissioned at the earliest. 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
2013-14 so that power generated from the generating stations are transmitted up to the
load centres without any bottle necks. The TANGEDCO should ensure that the power
available at the sub-stations is taken up to the consumption points by way of
appropriate distribution system. All these capacity addition as well as system
strengthening plans will have to be carried out through a well structured business plan
and individual schemes catering to the need of the business plan. All such plans and
schemes shall be submitted in accordance with the Terms and Conditions of Tariff
Regulations 2005, MYT Regulations as well as Licensing Conditions to the
Commission.
1.35 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 taken
seriously and must be met without fail.
1.36 Further, list of correspondence with TANGEDCO in regard to data gaps and replies
furnished are given in Annexure X.
1.37 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 reply and the Commission's views have been detailed in
Chapter A2 of this Order.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 14
June 2013
1.38 Unmetered supply in the State relates mainly to agriculture and hut consumption.
TANGEDCO has been assuming the AT&C loss level by arriving at the consumption
of agriculture and huts. This issue was also a subject matter of Appeal before the
Hon’ble Appellate Tribunal of Electricity. In its last two orders, the Commission has
estimated agricultural consumption based on the CEA formula. The Commission had
also directed TANGEDCO to furnish sample data of the metered connections for
agricultural supply for FY2012-13. The data so provided was analysed, and it was
observed that the average consumption per HP had increased by 9.2% over that of FY
2011-12. Based on this data the average hours of supply per day amounted to 3.67
hrs/day which is marginally higher than that for FY 2011-12. The Commission
recognizing the fact that FY2012-13 was a year of severe shortage of power along
with being a drought year, took the view that it is improbable that the agricultural
supply hours could have been higher than that of the previous year. Hence the
Commission has assumed the average consumption per HP at the same rate as in
FY2011-12. Based on the same data the energy requirement for agriculture has been
estimated for the second control period. Similarly, estimates have been made for
consumption by huts duly reflecting the number of huts with and without televisions
and also factoring in the consumption on account of distribution of free CFL lamps,
mixers, grinders and fans.
1.39 TANGEDCO in its petition this year has proposed tariff hike for two categories of
consumers namely Hut and Agriculture Category, tariff rates and conditions for all
other categories is proposed to be as per prevailing tariff order dated 30th March
2012.
• Fixed Charges for Tariff Category LT-1B for Hut Consumers to be increased
from Rs. 60/Month/Service to Rs. 125/Month/ Service.
• Fixed Charges for Tariff Category LT-IV for Agriculture Consumers to be
increased from Rs. 1750/HP/Annum to Rs. 2500/HP/Annum.
1.40 The cost of entire consumption on account of huts as well as on account of
agricultural consumption is being borne by the Government of Tamil Nadu by way of
subsidy under Section 65 of the Electricity Act 2003. In this matter, GoTN has given
commitment letter No. 2369/A1/2013 dated 10th June 2013 detailing provision of
tariff subsidy to LT IB and LT IV categories of electricity consumers. GoTN has also
stated that the budget provision for necessary additional expenditure has already been
made in the budget for the year FY 2013-14 and a formal order of GoTN in this
regard will be issued shortly. The commitment letter received from GoTN is placed at
Annexure XI. The GoTN has further clarified vide letter No. 2369/A1/2013 dated
10th June 2013 that the subsidy for other category of consumers as provided in FY
2012-13 would continue for FY 2013-14 and necessary G.O will be issued separately.
This letter has been appended as Annexure XII.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 15
June 2013
Applicability of Order
1.41 This Order will come into effect from 21-06-2013. The Generation and Retail Tariff
contained in this order will be valid till 31-03-2014. TANGEDCO shall file necessary
petition in accordance with the Regulations in a timely manner to enable the
Commission to pass the next Tariff Order in time.
Layout of the Order
1.42 This Order is organised into seven Chapters:
• Chapter A1 provides details of the tariff setting process and the approach of
the Order;
• Chapter A2 provides a brief of the Public Hearing process, including the
details of comments of various stakeholders, the Petitioner’s response and
views of the Commission thereon;
• Chapter A3 provide details/ analysis of the final true up for FY 2010-11,
provisional true-up for FY 2011-12 and annual performance review for FY
2012-13;
• Chapter A4 provides analysis of the petition for determination of the
Aggregate Revenue Requirement for FY 2013-14 to FY 2015-16;
• Chapter A5 provides details of determination of Open access charges and
Retail Supply Tariff for all consumer categories, and the approach adopted by
the Commission in determining the tariff;
• Chapter A6 gives the tariff schedule applicable for the consumers; and
• Chapter A7 provides details of the Directives of the Commission for
compliance by TANGEDCO.
1.43 The Order contains the following Annexure, which are an integral part of the Tariff
Order.
• Annexure I – Copies of letters written to TANGEDCO directing them to file
the Tariff Petition for FY 2013-14
• Annexure II – Copy of the admission order
• Annexure III – The list of participants at the State Advisory Committee
meeting.
• Annexure IV – The list of stakeholders who have submitted
objections/suggestions/views regarding the petition in response to the public
notice.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 16
June 2013
• Annexure V – The lists of participants at each public hearing.
• Annexure VI – Copy of the statutory advices given by the Commission sent to
the Government of Tamil Nadu.
• Annexure VII – Copy of statutory advice of the Commission regarding the
unbundling of TANGEDCO into a separate Generating Company and four
Distribution Companies.
• Annexure VIII – Copy of second provisional transfer scheme as notified by
the State Government vide G.O. (Ms.) No.2, Energy (B2) department, dated
2nd January 2012.
• Annexure IX – Copy of extension for finalization of transfer scheme upto 30th
April 2013 notified by the State Government vide G.O.Ms(23) dated 8th March
2013
• Annexure X – List of letters of TANGEDCO with regard to data gaps and
replies.
• Annexure XI – Copy of Commitment letter received from GoTN for providing
the tariff subsidy to Agriculture and Hut consumers.
• Annexure XII – Copy of Letter received from GoTN extending the subsidy for
other category consumers in FY 2013-14.
• Annexure XIII – Copy of Letter received from GoTN regarding amortization
of regulatory asset.
Approach of the order
1.44 Commission in its last order had stated that the Capital Account and the Revenue
Account has not been maintained separately in the course of operation of TNEB and
an attempt is being made in this order to segregate the same to bring financial
discipline in the successor entities.
The Commission has adopted the Multi Year Tariff (MYT) approach for tariff
determination since its tariff order in FY 2010-11. The first control period of 3 years
was upto FY 2012-13, during which time the Commission has issued two tariff orders
during FY 2010-11 and FY 2012-13. The second control period spanning 3 years
starts this year i.e. in FY 2013-14 and is upto FY 2015-16.
1.45 The extract from the relevant portion of the TNERC (Terms and Conditions for
Determination of Tariff for Intra state Transmission / Distribution of Electricity under
MYT Framework) Regulations, 2009 regarding control period is extracted below.
“3). Multi year Tariff framework
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 17
June 2013
i) Control Period
The control period under the MYT framework shall be for a duration of 3 years. The
year preceding the first year of the control period shall be the base year.”
1.46 The broad approach adopted in this order is given below:
• The Commission has taken into consideration the second provisional transfer
scheme as notified by the State Government vide G.O. (Ms.) No.2, Energy
(B2) department, dated 2nd January 2012 with amendment in the restructuring
of Balance Sheet of TNEB for the successor entities i.e. TANGEDCO and
TANTRANSCO.
• The Commission has referred to the audited accounts of TANGEDCO for FY
2010-11 (5 months) for truing up the expenses of the utility. The Commission
has undertaken a review of the various performance parameters as well as the
controllable cost factors. Based on the assessment the Commission have
arrived at the allowable ARR and revenue recovered by the utility. Also,
Commission for the comparison purposes arrived at the approved figures for
FY 2010-11 (5 months) in its last order on a pro-rata basis.
• The same exercise has been undertaken for the provisional true-up for FY
2011-12 based on the provisional accounts and the ARR and revenue
recovered for the year have been arrived at.
• For the FY 2012-13, Commission sought actual figures for the year from
TANGEDCO. Based on the information so obtained and based on provisions
of the Tariff regulation as well as trend in the approved costs in the previous
two years, the ARR and revenue recovered have been arrived at.
• For the Second control period between FY 2013-14 to FY 2015-16 the
Commission has extended the rationale adopted for allowing/ disallowing
various controllable components of the ARR for the first control period, to
project the ARR for the second control period and determine tariff for FY
2013-14.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 18
June 2013
A2: STAKEHOLDERS’ COMMENTS, TANGEDCO’S REPLY AND
COMMISSION’S VIEW
2.1 The following section summarizes the views/ objections/ suggestions given by
stakeholders in writing as well as at the public hearings. TANGEDCO’s reply to these
views/ objections/ suggestions and the Commission’s view on the same.
1. General Issues
Stakeholder Comments
2.2 Commission is requested to appoint a consultant to study the entire operations and
finances of TANGEDCO to identify improvements that are needed to comply with the
Act & various policies and rules made there under.
2.3 Commission must direct Transfer of Assets & Liabilities to be completed by end of
June 2013 and Audited Accounts as on 31.3.2013 prepared and published by
31.08.2013
2.4 The impact of FRP on the tariff is to be spelt out and the said agreement must be
publicised.
2.5 Commission to engage a Cost Accountant to make inter firm comparisons. Request to
consider Pan India and Abroad firms for costs of TANGEDCO, fix benchmark cost
and performance standards.
2.6 Financial Accounting, Cost Accounting Code & systems of TANGEDCO should be
published so that it helps make meaningful comments on the petition.
2.7 Commission must reiterate that Generation and Distribution functions of
TANGEDCO should be separate. Unless this is done the costs of generation and
distribution cannot be accurately ascertained.
2.8 Commission to write to GoTN to drop Electricity tax as it distorts the tariff system.
2.9 Directives of Commission are not being adhered by TANGEDCO. TNERC is
requested to monitor the directives individually and intensively and make
TANGEDCO fall under the groove ‘measure, monitor and manage’ and understand
that such directives are only for the performance improvements. Commission to direct
TANGEDCO to give a time bound plan to implement directives of the Commission
over the years. The progress report should be publicized at the end of each calendar
quarter.
2.10 Power injected by OA consumers into the Grid to be deducted from their recorded
consumption when there is load shedding at the consumer end
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 19
June 2013
2.11 From the balance sheet of TANGEDCO it is noted that the current liabilities are more
than the current assets resulting in management of working capital requirement with
the current liabilities in which case inclusion of interest on working capital for the
total current assets is not correct and fair as no funds was actually deployed.
2.12 TNERC must also take strong action to curb tendency of non-performance both in the
technical and financial fronts, if necessary by levying a fine say Rs.500.00 millions
from TANGEDCO. There is precedence with MERC on this score, to bring about a
disciplined approach. TANGEDCO is trying to play the same game as it has done a
couple of years back – not asking for a tariff revision and requesting creation of
“Regulatory Assets”. TNERC may well earmark this fine from the revenues of 2013-
14 for certain specific purpose of improving normative parameters, which have
exceeded beyond limits.
2.13 TANGEDCO should have consumer representation within its organisation.
2.14 Commission to make a provision for instituting comprehensive and integrated
Information Management system within TANGEDCO
2.15 Commission to have a consumer advocacy cell based on KERC model.
2.16 Benefits of financial restructuring plan have not been furnished in the petition.
2.17 Tamil version of the Tariff Petition shall be made available.
2.18 Uninterrupted power supply shall be given in the night period.
2.19 TANGEDCO shall aggressively implement the demand side management.
2.20 Energy conservation shall be encouraged by using modern equipments. Renovation
and modernization shall be undertaken in distribution lines.
2.21 Uninterrupted power supply shall be given to the farmers.
2.22 This public hearing should be conducted in two ways by the Commission.
• To assess the performance and the ways to identify how to provide quality service
by the TANGEDCO to public.
• To increase the tariff.
2.23 White paper statement should be released about the TANGEDCO’s accumulated loss.
2.24 White paper statement should be released about the future generation plan and how to
mitigate this loss in future.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 20
June 2013
2.25 Privatization of distribution particularly distribution in the city is mandatory as per the
direction dated 05-10-2012 issued by the Ministry of Power. It seems that
restructuring plan for TANGEDCO’s accumulated loss has been announced and the
Government of Tamil Nadu has accepted the plan. This plan should be under
consideration.
2.26 Commission to pass an order to keep Deemed Demand concept in respect of third
party power.
2.27 Commission to insist on TANGEDCO to publicize the facts of agreement between
Government and TANGEDCO as far as restructuring the losses are concerned
2.28 Identify ways to compensate the loss of TANGEDCO, rather than transferring the
same to Government.
2.29 Vacancies of Wiremen and other subordinate employees of TANGEDCO should be
filled in all the TANGEDCO offices to provide good service to the public.
2.30 Smart meter system which is now used in foreign countries should be now
implemented in Tamil Nadu. The consumers who consume power during peak hour
should be charged more.
2.31 It is stated that power can be produced at a cost of Rs.2.14. However, high cost
power at the rate of Rs.17 to 18 is purchased from the private parties even after
restrictions by the Commission. The power purchase from high cost power stations
has been supplied to the MNC’s at a lower cost.
2.32 Uninterrupted power supply should be given to the agricultural services as given in
SEZ and in Chennai. All power generated at Neyveli, Kudankulam etc. to be given to
Agriculture in Tamil Nadu.
2.33 Uninterrupted power supply given to the MNCs shall be stopped.
2.34 Freebies were announced by the Government without considering the power shortage
and without proper planning. The Commission should have pointed out the issue.
2.35 LED Street lighting is important in system T & D loss reduction. Recognize clean
technologies like LED lighting and consider a preferential tariff
2.36 For energy conservation purpose LED lights may be fixed in all the streets of the
Villages, Towns, and cities instead of using tube lights.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 21
June 2013
TANGEDCO’s Reply
Appointment of consultant
2.37 The accounts of TANGEDCO are being audited by a firm of qualified chartered
accountants as per the requirements of the companies Act 1956.In addition to the
above, being a government company the functioning of TANGEDCO is also subject
to commercial and expenditure audit by the Accountant General. Moreover, the
Hon’ble TNERC is vetting the tariff petition filed by TANGEDCO by appointing a
reputed consultancy firm. Hence, the necessity to appoint a consultant to go into the
entire operations and finances of TANGEDCO does not arise.
Final Transfer Scheme
2.38 The Board has approved the proposal to seek extension of time by another six month
upto 30th October 2013 for final transfer of assets and liabilities to the successor
entities of erstwhile TNEB and the proposal is under the consideration of Government
of Tamil Nadu. Steps are being taken to complete the audit of annual accounts for the
FY 2012-13 and to place the same before the AGM of TANGEDCO on or before
30.09.2013 which is the time limit prescribed under the provisions of the companies
Act 1956.
Compliance of Directives
2.39 The status of progress on directives issued by Hon’ble TNERC in tariff order dated
30th March 2012 has been furnished in the tariff petition filed before the Hon’ble
TNERC on 19th February 2013. The details of these directives are available on the
TNERC website.
Financial Restructuring Plan
2.40 At the time of submission of tariff petition to the Hon’ble TNERC, the FRP process
was in its initial stage and hence the impact of the same could not be taken into
consideration in the tariff petition. The given details of the FRP are still being worked
out and if the same is finalised before the issuance of Tariff Order it will be submitted
to the Hon’ble TNERC for its consideration.
Cost Accounting system of TANGEDCO
2.41 Each generation and distribution utilities in India have their own power source owing
to their geographical location. Hence, comparing the cost of TANGEDCO with other
utilities may not by itself give the desired results. However, steps are being taken to
conduct the cost audit by a qualified cost Accountant as per the requirements of the
Companies Act,1956.
Comparison with Other Utilities
2.42 The contention of the stake holder that the cost needs to be compared with other state
requires consideration of the following issues:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 22
June 2013
(a) The difference in power generation mix and consumer mix
(b) Power purchase expenses considering the diversity in the sources.
(c) Geographical diversity in the state considering the key point that TANGEDCO is supplying electricity to wide spread area of Tamil Nadu as compared to
other states of India.
(d) Differential policies adopted by the State Government in relation to industrial,
economic and agricultural sector.
(e) Considering the above parameters the comparison should be made on common
parameters.
Bifurcation of Generation and Distribution Function
2.43 These are the suggestion from the stake holders to the Hon’ble Commission.
Electricity Tax
2.44 TANGEDCO submits that the issue relating to dropping of electricity tax does not
come within the purview of tariff revision exercise. It is a policy decision to be taken
by the Government of Tamil Nadu.
OA consumption to be deducted from recorded consumption
2.45 TANGEDCO submits that there is no such provision under the Act as well as in the
Regulations notified by the Commission.
Levy of Demand Charges
2.46 The demand charges are intended to cover the fixed cost of TANGEDCO including
interest, depreciation employee cost, repair and maintenance cost etc., and hence even
if there is no power supply the demand charges would be levied. The recovery of
fixed charges does not have any relevance to the hours of supply or the quantum of
energy supplied.
2.47 The Hon’ble APTEL in appeal No:257 of 2012 preferred by The Southern India Mills
Association (SIMA), Coimbatore against the Tariff Order No:1 of 2012
dated:30.03.2012 issued by the Hon’ble TNERC has upheld the order of TNERC
with regard to levy of demand charges.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 23
June 2013
Negative balance in Shareholder’s funds
2.48 As per the Tariff Order, the Hon’ble Commission had expressed a view 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 National Electricity Policy and Tariff Policy. The
provisions of the National Electricity 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.
2.49 In line with the Tariff Policy, National Electricity policy and as per the Tariff Order
dated 30th March 2012, TANGEDCO have not claimed any relief on account of
accumulated losses prior to unbundling on 1-11-2010 in the given petition.
Supply of power to MNC’s
2.50 There is no concession in tariff for the MNCs. Only uninterrupted power supply with
the tariff on par with other consumers is given.
Energy Efficiency Measures
2.51 TANGEDCO is taking steps to replace incandescent bulbs with CFLs in Villupuram
and Kanyakumari districts. The same will be duplicated in other districts. Out of the
cost of Rs 60/- per CFL, TANGEDCO will pay Rs 45/- and consumer will pay Rs
15/-.
Commission’s View
2.52 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 on 3rd May 2013, Tiruchirapalli
on 8th May 2013, Madurai on 10
th May 2013 and Coimbatore on 17
th May 2013.
Transfer of Assets & Liabilities
2.53 The Transfer of Assets & Liabilities was to be completed by 30th April 2013. But
TNEB has sought for another 6 months extension from the Govt. The Commission is
of the opinion that this has to be completed at the earliest. The Commission directed
the utility to complete it as soon as possible through GoTN.
Financial Restructuring Plan
2.54 Commission would like to clarify that this issue can be examined only when the final
FRP scheme is submitted to the Commission.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 24
June 2013
Segregation of Generation and Distribution business
2.55 Opinion of Commission on segregation of generation and distribution function was
conveyed as statutory advice on 27th October 2010 which is annexed in this tariff
order.
Tamil Version of Petition must also be available
2.56 Commission has already given a direction on this matter to TANGEDCO for making
the Tamil version of the Petition available.
Impact of freebies doled out by Government
2.57 Commission would like to reiterate that it functions within the powers derived from
the Electricity-Act 2003 and cannot interfere in the policies of GoTN
Energy Efficiency and Demand Side Management
2.58 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.
2.59 It is necessary to create awareness among users for promoting Energy Conservation
and Demand Side Management.
2.60 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.
2.61 To facilitate DSM measures in the state, the Commission has notified the DSM
regulation on 26th February 2013. TANGEDCO is to submit relevant schemes for
implementing DSM and Energy Efficiency schemes to the Commission as specified
in the Regulation.
2.62 Use of CFLs should be encouraged with adequate arrangement for disposal of
unserviceable CFLs.
Restriction & Control
2.63 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.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 25
June 2013
Working Capital
2.64 Current liabilities are due to non payment of dues by TANGEDCO. However
Commission cannot assume that TANGEDCO will default and accordingly not allow
for any working capital. For the purpose of this order Commission is allowing
working capital based on norms laid out after considering available consumer security
deposits.
Tax Exemption
2.65 On suggestions regarding waiving off electricity tax during the period of R&C
measures, the Commission would like to specify that Electricity Generation Tax or
Electricity Consumption Tax is in the domain of Government of Tamil Nadu.
Quality of Supply
2.66 As regards uninterrupted power supply, the Commission directs TANGEDCO to
maintain quality of supply as specified in Tamil Nadu Electricity Distribution
Standards of Performance Regulations, 2004 as amended in which it specifies 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
with frequent power failure, fuse of calls, voltage fluctuations will not ensure
continuity in supply. These factors determine the degree of satisfaction of the
consumers.”
2.67 Also, the Commission feels that if the capacity addition would be on time, as
discussed in later chapters, the power supply situation should improve in the second
control period leading to improved supply hours.
2.68 TANGEDCO is also required to take all necessary steps to ensure quality of service as
per regulations.
2. Delay in filing
Stakeholder Comments
2.69 The inordinate delay on the part of TANGEDCO had been condoned by the
Commission. We regret that this should not have been done and instead the
Commission could have suo motu revised the tariff. There is precedence of this type
in one of the orders of West Bengal Electricity Regulatory Commission.
2.70 The tariff petition which had to be filed in November 2012, has been filed only in
February 2013. The reason for the delay shall be informed to the public.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 26
June 2013
TANGEDCO’s Reply
2.71 The delay in filing of the tariff petition has been caused mainly because of the
following reasons.
• The Financial Restructuring Plan (FRP) which was notified by the
Government of India on 5th October, 2012 was in the process of being
finalized with multitude of meetings with various bankers during the months
of October, November and December of 2012.
• Thereafter the audit of accounts for the year FY 2011-12 was under process
and was completed by 31st January 2013.
Commission’s View
2.72 Commission had been monitoring the filing of the petition vis-à-vis the due date of
filing it i.e. 30th November 2012. The commission had through two letters to
TANGEDCO, called for immediate filing of the ARR and tariff petition. The petition
was eventually filed on 19th February 2013. After hearing the submissions made by
TANGEDCO, the Commission condoned the delay in filing this petition. The
Commission has directed TANGEDCO to file its petition for ARR and tariff for the
next year by the appointed date.
3. O&M Expenses
Stakeholder Comments
2.73 Inter-firm comparison of costs especially O & M costs for TANGEDCO should be
done.
2.74 In the O & M expenses, the employee cost is projected to increase by 50% (Table 83).
The norm for the industry needs to be checked.
2.75 The Government of Tamil Nadu has accepted the loss of TANGEDCO of about
Rs.25,512 Crores as on 31.11.2010. But the Government has not agreed to take the
pension liability of the employees and termed it as employee expenses. If it is
considered as employee expenses the same can be passed on to the tariff which may
affect the public. Therefore, the Government shall take the pension contribution as a
liability. The Commission shall direct the TANGEDCO to implement the directions
given in 2010.
TANGEDCO’s Reply
2.76 The employee expenses submitted in the tariff petition for FY 2012-13 is based on the
actual expenses incurred. The Hon’ble Commission in its last tariff order had
approved the employee cost for TANGEDCO based on the apportioning of expenses
between TANGEDCO and TANTRANSCO. The industry norms cannot be compared
due to the geographical diversity in the state and for the reasons that electricity is
being supplied to widespread areas within the state of Tamil Nadu.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 27
June 2013
Commission’s View
2.77 Commission is guided by following regulations
2.78 Regulation-25 of TNERC Tariff Regulations:
“25. Operation and Maintenance Expenses
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.
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.
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.
…”
2.79 However as submitted by TANGEDCO, Commission is of the view that it is not
appropriate to project the expenses for the next control period based on the actual
expenses incurred prior to unbundling of power utilities. Hence in this order
Commission projects the O&M expenses for next control period based on the audited
accounts for FY 2010-11 and provisional accounts for FY 2011-12.
2.80 Commission acknowledges the usefulness of benchmarking of O&M expenses and
comparison with other utilities, however considering the fact that the utilities in the
state are still in transition such comparison will not be of much help in the early stages
of restructuring.
4. Fuel Cost and FPAC
Stakeholder Comments
2.81 Increased use of oil by TANGEDCO is increasing the fuel cost and TNERC needs to
specifically pay attention. TANGEDCO should be asked to justify the fuel
consumption rates and costs by comparing with those of other similarly placed
utilities in India.
2.82 TANGEDCO should have submitted the Petition for Fuel Price Adjustment Charges
(FPCA). It is said that it has been granted an extension of time of four months. It has
not been complied with. The Commission has asked for its readiness to submit the
same.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 28
June 2013
2.83 TANGEDCO to justify the fuel consumption rates vis-a-vis other utilities in India and
compare costs of its coal thermal plants vis-a-vis Central Generating stations.
TANGEDCO’s Reply
2.84 The claim for FPCA will be filed once the power situation in the state improves and
R&C measures are lifted.
Commission’s View
2.85 Adjusting FPAC charges in the middle 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.”
2.86 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.”
2.87 Hence in line with the in principle approval of the implementation of the FPCA
mechanism in the State, the Commission has decided not to allow the 4% escalation
in fuel price as sought for by TANGEDCO in its petition for the current MYT period.
TANGEDCO shall file quarterly FPCA petitions to the Commission to recover the
actual cost of fuel incurred and the actual cost of power purchase, if the same are in
variance from the figures approved in this Tariff Order.
2.88 Therefore, the Commission clarifies that FPAC exercise is important and should be
implemented and it is irrespective of annual tariff increase.
2.89 TANGEDCO was allowed to withdraw FPCA Petition for filing a corrected Petition.
However, they did not do it and filed the Tariff Petition beyond the due-date. After
the issue of this order, TANGEDCO shall file FPCA Petition every quarter as no
escalation has been considered for future power purchase and fuel price adjustment.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 29
June 2013
5. Generation and Power Purchase
Stakeholder Comments
2.90 TANGEDCO should explain how NLC’s 600 MW station of the same vintage as
Ennore is functioning well. In the context TANGEDCO should refer the coal handling
issues to NTPC. Cost from TANGEDCO plants is higher when compared to CGS i.e.
the cost of power purchase from TANGEDCO’s own power is Rs. 4.36 p.u where as
cost of power purchase from Central Generating stations is only Rs. 3.01 p.u. This
shows that TANGEDCO’s fuel management is inefficient.
2.91 TANGEDCO should be asked to give cost comparison of its coal based generating
stations with those of CGS to justify higher prices.
2.92 In estimating the Capital Costs, capitalization of the new plants shows great
divergence (Table 63). MTPS III has a cost of about Rs 6 Crores per MW while
NCTPS Stage II has a cost of Rs 4.85 Crores. The difference needs to be explained.
2.93 Power Generation in TANGEDCO’s own plants like Valathur and Mettur is getting
delayed. Action shall be taken to speed up the works.
2.94 Delay in starting generation in existing power generation stations like Mettur,
Valuthur, Kuthalam etc. should be explained.
2.95 TANGEDCO to present the actual conditions of Mettur 600 MW plant before the
public so as to know the status of money spent
2.96 There is no need for private power generation. Government should make
arrangements for own generation.
2.97 Power cut has been reduced due to 3000 MW generated by the Wind Mills. But wind
mills are not permitted to generate and due to that about 1000 MW is wasted. On the
other hand 40% power cut still exists. High frequency is stated to be the reason for not
permitting the wind mills to generate. Action should be taken to utilize the entire
power generated by the wind mills during May to September.
2.98 It has been announced that Sandynallah Hydro Electric Project will be completed in
10 years to meet the variations in the wind generation. The project shall be completed
within a short span of time.
2.99 The power generated by the wind mills is consumed by various consumers in different
districts. The wind energy has to be adjusted for peak hour, non peak hour and
normal hours. It is doubtful whether the accounting of wind energy is done properly
by the TANGEDCO. Since it is not possible to take readings in the large number of
wind mills, readings furnished by the consumers may be used for billing resulting in
huge loss to the TANGEDCO. The Commission shall form rules and regulations for
adjustment of generation from wind mills.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 30
June 2013
2.100 Commission in the last tariff order directed TANGEDCO not to purchase power from
the four private parties GMR, PPN, Samalpatti and Madurai power corporation. But
TANGEDCO has purchased power from the four private parties. It may be clarified
whether the Commission is functioning as a spectator or regulator. Power was
purchased at a higher cost.
2.101 Automatic meter reading facility shall be provided in the wind mills to properly
account the wind generation.
2.102 The entire power i.e. 100% share from the Kudankulam, Kalpakkam and Neyveli has
to be allotted to Tamil Nadu. 2 Reactors are ready in Kudankulam and the total
capacity of 2000 MW of power can be generated. But only 950 MW was allotted for
Tamil Nadu.
2.103 New projects should be taken up to increase own generation and provide
uninterrupted power supply instead of purchasing costly power from private players.
2.104 In Tamil Nadu quality of coal is very bad. Purchasing this kind of bad quality coal is
the only the reason for less generation. This should be avoided.
TANGEDCO’s Reply
2.105 Till 2006, 2007 there was no shortage of power as there was no gap between the demand and supply. After 2006, 2007 the demand increased due to economic
development and boom in the IT sector. Power plants cannot be installed within a
few months. For installing a 1 MW plant, it costs Rs 5 to 5.5 Crores/MW and takes
minimum of 4 years after work is started. Therefore, plans were drawn to install
power plants. The NTPC Vallur plant and North Chennai plant will come up by next
month. The NLC JV plant of 1000 MW is underway and will come in by end of the
year. By then, the demand will be equal to supply.
2.106 In the year 2012-2013, own thermal power stations performed well. Due to failure of
monsoon, performance of hydro power stations were affected badly. Kuttalam gas
station has been put into service after attending the major repair work.
2.107 The coal prices in domestic and international market have witnessed hike during the
past and accordingly projection have been made in the tariff petition. The details of
fuel prices and cost have been submitted in the tariff petition.
2.108 About 4000 MW will be available as additional generation, power cut problem may
be resolved gradually and will be lifted by December 2013.
2.109 MTPS and NCTPS are allotted on the basis of EPC contract. The tenders were
selected on the basis of international competitive bidding. The foreign components
involved in MTPS (Rs.1914 Crores) is much more than the foreign component in
NCTPS projects (370.95 Crores) and hence, the cost per MW is higher.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 31
June 2013
2.110 Power purchase from the IPPs is resorted to only to meet the demand especially
during summer and examination time. Even this got approved from TNERC
subsequently.
Commission’s View
2.111 The Central Generating Stations viz. Kudankulam, Kalpakkam and NLC will not
come under the jurisdiction of the Tamil Nadu Regulatory Commission or under the
State Government. Hence, the views submitted in relation to these stations are not
within the purview of this State Commission.
2.112 The Commission directs the TANGEDCO to properly monitor the on- going projects
so that they are commissioned without further delay.
2.113 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 second control period, so that power
generated from the generating stations are transmitted up to the Load Centers without
any bottle necks. Necessary upgradation of the distribution system shall also be done
by TANGEDCO for effectively carrying power to the consumers
2.114 TANGEDCO has not provided necessary information for approving capital cost.
Commission is provisionally accepting the TANGEDCO submission.
2.115 As regards the generation cost of new capacity addition, the Commission 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 for
the purpose of power purchase has provisionally considered the fixed and variable
charges for new power plants.
2.116 Commission’s Open Access Regulation 2005 specifies that open access customer
shall provide metering arrangement as per the applicable CEA regulation and meters
should have facility to communicate the readings to SLDC or as may be specified by
the Commission.
2.117 Cost comparison between ISGS and TANGEDCO generating stations has to be on
like to like basis. While most of the CGS are pit ahead stations, the generating stations
of TANGEDCO are load centre stations.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 32
June 2013
6. AT&C Losses
Stakeholder Comments
2.118 TANGEDCO’s argument in 3.29.8 in petition related to lesser computed Agricultural
consumption and revision of T&D loss trajectory is flawed. Neither a representative
study was done for establishing norms for agricultural consumption per HP of
connected load, nor any metering has been done to assess and a thumb rule was
adopted so far for this purpose. No serious study has been done by TANGEDCO to
identify the 11 KV/22 KV feeders and take corrective action. In this context
Commission should allow T & D loss at 18% as claimed by TANGEDCO in the past.
2.119 The average purchase cost of power for TANGEDCO is Rs.3.77 per unit inclusive of wheeling cost of 21.98 paisa per unit. The average tariff realized per unit from HT I
A Category consumers (Industries) is Rs 6.95 and that of HT III Category of
consumers (Commercial) is Rs 7.98. A huge burden is put on them destroying their
competitiveness and economic efficiency.
2.120 Committee should be formed to reduce the loss of TANGEDCO and limit should be
fixed in respect to the loss.
2.121 Efforts should be taken to reduce the T&D loss every year.
2.122 Misuse of tariff with dishonest intention is booked under theft of energy. Misuse of
energy shall be booked under section 126 and bypassing the meters shall be booked
under theft of energy.
2.123 Electricity theft should be curtailed.
2.124 Agricultural related activities like nursery is booked under theft. The Electricity Board is booking the farmers under theft and even when represented to the District
Collector, the District Collector was also not in a position to help.
2.125 Loss incurred by TANGEDCO is due to theft of electricity and not due to free electricity provided to the farmers.
TANGEDCO’s Reply
2.126 The agricultural consumption submitted in the tariff petition is based on 5% sample
meter reading as per the methodology adopted by the Hon’ble TNERC in its last tariff
order dated 30th March 2012.
2.127 Theft of power is least in Tamil Nadu. To reduce the theft of energy, at Regional level
17 enforcement squads under the control of the Inspector General of Police (IGP) is
operating and a Flying squad under the control of Chairman, TANGEDCO is
functioning. Squad comprising of Ex-servicemen are being utilized to detect the
power theft in the state.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 33
June 2013
2.128 Distribution loss cannot be avoided which is around 20% now. To reduce the
distribution loss improvement work such as establishment of substation and
strengthening of lines are being taken.
Commission’s View
2.129 The Commission initiated suo-motu proceedings against TANGEDCO for non
compliance in the matter of T&D loss determination as directed by it and the Hon’ble
APTEL. The Commission in the absence of scientific study for loss determination,
has fixed the T&D loss level at 16.4% for FY 2013-14 and has clarified that it shall
assume loss percentage at 16% and 15.6% for FY 2014-15 and FY 2015-16
respectively, if necessary scientific study is not done by TANGEDCO.
2.130 The Commission would also like to clarify that agriculture related and allied activities
viz. growing vegetables, fish culture, and poultry farming are recognized under
agriculture and they are permitted to use water pumped from wells located close to the
farmhouse as per the last tariff order and it will not amount to theft.
2.131 Licensee should note that wrong theft booking should be avoided.
7. Interest Expenses
Stakeholder Comments
2.132 Interest on borrowing from various financial institutions is on higher rate. The
payment of interest should be at nominal rate. No interest shall be allowed on
borrowings made to make up for losses. No return on shareholders’ funds should be
provided.
2.133 In providing interest on current assets, receivables at 2 months sale value is assumed.
This is over stated. From the Balance Sheet of TANGEDCO it can be ascertained that
the consumer’s deposits are more than cover the accounts receivables.
2.134 The High Tension consumers are provided only 7 days from the date of the bill for
payment of the consumption charges for the previous month. Further they are
required to keep a deposit equivalent to two month’s consumption charges. Therefore
the interest on the HT receivables should be totally disallowed.
2.135 In case of LT, domestic consumers the bill is made for once in two months. Which
means on the average there is an outstanding of one month. Hence for LT
Receivables, should be estimated on one month and interest should be allowed on that
quantum alone.
2.136 For inventory, stock of coal is assumed at 2 months value of consumption, but
actually the generating stations are maintaining fuel stock for not more than 10 days
consumption. Hence no interest need to be allowed.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 34
June 2013
TANGEDCO’s Reply
2.137 The interest on the loan has been calculated considering the loans allocated to TANGEDCO at the time of segregation of erstwhile TNEB and based on such
notified transfer scheme, it is the obligation of TANGEDCO to service such debts and
repay them along with the interest. Hence, TANGEDCO has claimed the interest
amount on actual basis.
2.138 Return on Equity for TANGEDCO for the control period has been calculated based on the average equity for the corresponding year. This has been done in line with the
TNERC Regulations. The normative rate of return on equity has been taken at 14%.
Commission’s View
2.139 In the last tariff order Commission has approved the total interest expenses
corresponding to actual long term and short term loans borrowed by TANGEDCO. In
the current Petition TANGEDCO has claimed the interest expenses corresponding to
only long term loans and separately claimed the interest on working capital as per
norms specified by TNERC in its tariff regulations 2005.
2.140 TANGEDCO has adopted the following approach for segregation of interest to the generating plant / station and distribution function:
a. Project specific loans for generation and distribution is initially allotted to each of the respective project and considered as opening loan balance for that
particular project.
b. Large quantum of generic loans which cannot be differentiated into project
specific loans and interest paid on these loans is bifurcated as per opening
gross block of generation and distribution notified as per transfer scheme.
2.141 In response to Commission’s query, TANGEDCO has revised the long term loans and
segregated these loans among those borrowed for capital projects, repayment of
existing loans and funding the revenue expenditure.
2.142 In its last order Commission has stated that there is a lack of differentiation between
the capital account and the revenue account. In the revised submission TANGEDCO
has again included the borrowings corresponding to revenue account in capital
account. However, Commission is treating the revenue and capital account separately.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 35
June 2013
8. Regulatory Asset
Stakeholder Comments
2.143 TANGEDCO has prayed for approving Regulatory asset. TANGEDCO’s proposal is also not in consonance with Regulation 13 of the Tariff Regulations. The
circumstances for treatment of regulatory asset would arise mostly during natural
causes or force majeure conditions and that it can be only for a limited period not
exceeding 3 years preferably within the control period. The reason given by
TANGEDCO is Para 6.3.3 that is “present critical power position” is not a force
majeure position.
2.144 The Regulatory Assets already created had been done for the same invalid reason.
Therefore, the Regulatory Asset already created should also be withdrawn.
TANGEDCO should be directed to take up the matter with Govt of Tamil Nadu as
part of the Financial Restructuring Plan it is implementing.
2.145 Creation of Regulatory Assets as per request of TANGEDCO is against the ATE Order of 28.7.2011 and also against the Tariff Policy. Therefore the Commission
should reject the plea.
2.146 Recovery of Regulatory Asset in future tariff petitions is not just as TANGEDCO is not supplying power equitably to all consumers. Selected consumers and Chennai
region have been exempted from Load shedding. The higher cost incurred for
purchase of power by TANGEDCO is for only these preferred consumers. The other
consumers who managed with costly Diesel Generators should not be burdened with
additional tariff.
2.147 No justifiable reasons have been attributed by TANGEDCO as to why it has not come
forward with a sizeable retail tariff revision in the petition. TANGEDCO’s reasoning
that the deficit can be treated as ‘Regulatory Assets’ – deferred expenditure – to be
made good in future from consumers should not be accepted by the Commission.
2.148 TANGEDCO has not made any road map for recovery of Regulatory Assets despite
approval from GoTN for amortization.
2.149 Regulatory Assets should be recouped slowly and incrementally. Clear road map to be
presented by the Commission to recoup the Regulatory Assets and introduce the
concept of Regulatory liabilities.
2.150 TANGEDCO should be directed to create special Regulatory Liability for which they should submit a strategic plan. Increase HT & LT tariff in all categories for assessing
the Regulated Liability for which no adjustment must be allowed
2.151 Commission not to accept treating the deficit of TANGEDCO as Regulatory Asset
2.152 TANGEDCO has not met the Performance Standards laid in TO 1 of 2013. Hence,
claim for Regulatory Assets should not be accepted.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 36
June 2013
2.153 Subsidy of 30% for Regulatory Assets accepted by GoTN for 2012-13 not shown in
Table 109. No justification given by TANGEDCO for converting losses into RA and
TANGEDCO request should be rejected.
2.154 Tariff Policy 5.3(h)(4) is against the proposal of TANGEDCO to burden future consumers with past losses with not seeking tariff increase for other categories for the
reasons in 6.3.2 of their petition.
2.155 Regulatory assets should not exceed than what is approved in the true up. Interest on this should also be waived
2.156 As per ATE Order, financial gap for any year should be considered for tariff revision and not passed on as Regulatory Asset
2.157 Requested not to permit the TANGEDCO to create Regulatory Asset as per
(OP1/2011, dt.11.11.11) of APTEL order and to pass on burden to consumer for the
ensuing year.
2.158 TNERC must determine the tariff for other categories, other than the one requested by
TANGEDCO, to the extent it can do reasonably on suo motu basis and create a
special “Regulatory Liability” of the likely revenue arising on such determination; the
extent of the ‘regulatory assets’ requested in this petition by TANGEDCO can be
reduced by this amount;
2.159 It is the responsibility of TANGEDCO to wipeout this liability first, before it can commence the recovery process on regulatory assets; TNERC must direct the
TANGEDCO to submit a strategic plan for wiping out the ‘Regulatory Liability’
created for its approval, measuring and monitoring.
2.160 Find out ways and means to recover the past losses from FY 2013-14 onwards instead
of postponing the recovery to ensuing years.
TANGEDCO’s Reply
2.161 TANGEDCO has proposed for the approval of Regulatory Asset based on the methodology adopted by the Hon’ble TNERC in tariff order dated 30th March 2012.
2.162 The Hon’ble Appellate Tribunal for Electricity in its order dated 09.04.2013 has upheld the creation of regulatory asset in Tariff Order No 1 of 2012 dated 30.03.2012,
in appeal No:257 of 2012 filed by the Southern India Mills Association, Coimbatore.
2.163 The creation of regulatory asset has been requested so as to recover the expenditure already incurred in a deferred manner in order to avoid tariff shock to consumers. If
the same is rejected there will be huge financial burden on the TANGEDCO and the
services to consumers will also be affected. This will cause irreparable loss to
TANGEDCO and consumers.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 37
June 2013
Commission’s View
2.164 Commission does not agree with the proposition of creating regulatory liability as
none of its regulations allows for such creation.
2.165 The issue of Regulatory Asset is dealt with in Regulation of the TNERC (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 31-07-2010 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:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 38
June 2013
(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”.
(5) 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.
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.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 39
June 2013
“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 biomonthly 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, that 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.”
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 40
June 2013
2.166 The Commission in Order No. 3 dated 31-07-2010 and Order No.1 dated 30-03-2012
had extensively discussed the reasons for the accumulated losses of the utility. 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
Crores. 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 National Electricity Policy and Tariff Policy. The provisions of the National
Electricity 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.
2.167 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.
2.168 In the previous tariff order Commission was concerned with creation of Rs. 24762 Crs
Regulatory Asset especially when the same was to be amortized in the next three to
five years. The Commission with a view that support of State/Central Government
will also be required to be assessed in dealing with such large Regulatory assets,
addressed a letter for obtaining the view of Government of Tamil Nadu in this matter.
Particularly the Commission requested if the Government could absorb the
Regulatory asset in its entirety or in part so as to reduce the burden on the consumers.
2.169 Government has informed that they have in-principle agreed with the request of the
Commission for amortization of regulatory asset. Government has also informed that
the exact details and mechanism will be worked out in conjunction with tariff revision
and TANGEDCOs improvement due to internal savings.
2.170 The issue of Regulatory Asset was again raised in Appeal No. 257 of 2012 by SIMA
and Hon’ble APTEL in its order dated 9th April 2013 did not find any infirmity in the
Tariff Order No. 1 of 2012 date 30th March 2012 issued by the Commission.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 41
June 2013
2.171 However TANGEDCO in its petition has revised the Regulatory Asset from the date
of unbundling i.e., with effect from 01-11-2010 and up to the end of this financial
year i.e. upto 31-03-2013, the proposed revenue gap is Rs. 40,718 Crores. Of which
TANGEDCO proposes to recover Rs. 973 Crore through a nominal tariff hike.
TANGEDCO proposes in its petition that the remaining gap of Rs. 39,774 Crores may
be allowed to be recovered in the ensuing tariff petition, from the consumer in the
deferred years so that there is no tariff shock for the consumers. TANGEDCO
requested to approve the revised Regulatory Assets of Rs 39,744 Crores by treating
the present critical power position as force majeure position as per tariff regulation
and based on the revised gaps and after adjusting the tariff hike as proposed in the
given petition.
2.172 The ARR of TANGEDCO for the past years as well as the current years has been reviewed by the Commission and the revenue gap is reworked as detailed in Chapter
A3. The amount involved being significant in nature and if the same is amortized by
way of tariff hike the impact on the consumer would be huge resulting in a tariff
shock to almost all the consumers for the next five years.
2.173 Based on the provisional numbers of FY 12 and FY 13, Commission arrived at an
estimate for regulatory asset and the treatment for amortization of the Regulatory
Asset has been discussed in Chapter A5.
2.174 Commission has received the letter (Ms) No. 59/C2/2012 dated 7th June 2013 from
GoTN on amortization of regulatory asset and after reviewing the letter Commission
has worked out the amortization of regulatory asset.
9. Cross Subsidy, Cost to Serve and Average Cost of Supply
Stakeholder Comments
2.175 Tariff payable for BPL category to be atleast 50% of average cost of supply as per
NEP 2006. TNERC should ensure that even for subsidised category of consumers
atleast 50% of the supply should be recovered. Thus tariff for no category should be
less than 3.14Rs/unit.
2.176 Commission to notify road map for reduction of cross subsidy to be within + 20% of
average cost of supply
2.177 The guidelines issued by the GoI, Electricity Act 2003, and policy guidelines and directions given by Appellate Tribunal have not been taken into cognizance. While
the Average Cost of Supply is Rs 6.27 per kWhr, the average realization is only Rs
4.80 per kWhr. Only for 7 categories of consumers will pay more than the average
cost of supply. They would be consuming 19.7% of the energy sold and pay 30.7% of
the revenue earned
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 42
June 2013
2.178 It is obvious that these categories consume 12,601 MUs and pay Rs 9436 Crores,
which is an average of Rs 7.48 per kWhr. These are the subsidizing categories. The
realization from them is Rs 7.48 per unit while the Average Cost of Supply 6.27 per
unit and Average Realisation is only Rs 4.80 per unit. Consumers will be overly
burdened in this arrangement
2.179 Commission to reduce the cross subsidy element in existing tariff of all subsidizing
consumers
2.180 Cross subsidy treatment should be in consonance to provisions of EA 2003, NEP,
NTP and directives of ATE.
2.181 G.O. Ms. No.79 dt 11.7.2012 squashed by Single Judge. Appeal by TANGEDCO
before Division Bench. Appropriate forum to determine imposition of cross subsidy
surcharge is the Commission.
2.182 Cross Subsidy should be calculated on the marginal cost of power.
2.183 Commission should reduce the cross subsidy element in existing tariff of all
subsidizing consumers.
2.184 Cost to serve, cross subsidy surcharges, peak hour and off peak hour charges shall be fixed as per the Order of the APTEL.
2.185 TNERC has stipulated that the cross subsidy has to be computed as difference
between Cost to Serve a category of consumers and average tariff realization of that
category
2.186 The treatment of cross subsidies and options available to address the cross subsidy
reduction issue have to be in consonance with the provisions of the Electricity Act
2003, the National Electricity Policy (NEP), the National Tariff Policy (NTP) and the
decisions pronounced by Appellate Tribunal for Electricity (APTEL).
2.187 Based on the legal and policy frame work, applicable cross subsidy can be determined
and its reduction over a period should be indicated. TNERC has to notify a road map
along with intermediate milestones for reduction of cross subsidy to be within +20%
of the average cost of supply.
2.188 As per sec. 61 of the Electricity Act, 2003 and National Tariff Policy the tariff should be fixed at the rate of cost of supply.
TANGEDCO’s Reply
2.189 The cost to serve model with the detailed report has been submitted along with the
tariff petition for calculating voltage wise cost of supply and cross subsidy.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 43
June 2013
Commission’s View
2.190 The three aspects are inter-related and have been dealt with in detail in tariff order No 1 of 2012. However Commission is reiterating the approach towards the three issues.
The provisions regarding these three issues are extensively covered in the Order of
Hon’ble Appellate Tribunal of Electricity dated 11th June 2012 in Appeal Nos. 57 of
2008, 155 of 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 be 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.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 44
June 2013
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.
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 voltagewise
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.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 45
June 2013
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 voltagewise cost of supply
taking into account the major cost element which would be applicable to all 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.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 46
June 2013
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, though not 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 includes 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.”
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 47
June 2013
2.191 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.
2.192 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 of 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. From 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, 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.
(a) As a first major step in the right direction, the voltage wise cost of supply shall
be calculated based on the available data.
(b) The Cost of service for each category of consumer will have to be worked out
separately.
(c) The cross subsidy should be going down from year to year.
(d) The tariff fixed for various categories should be within +/- 20% of the average
cost of service.
(e) Tariff may not be a mirror image of cost to supply to the respective consumer
categories.
(f) Tariff for different categories of consumers are differentiated only according
to the factors given in Section 62(3).
(g) There is no tariff shock to any category of consumers.
2.193 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.
2.194 Commission in its last tariff order has directed TANGEDCO to undertake data
collection for computing accurate cost of supply and submit a study report computing
the consumer category wise and voltage wise cost to serve.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 48
June 2013
2.195 TANGEDCO in compliance to the above directive has undertaken a technical study
and computed the category wise cost of service but has stated its inability to compute
voltage wise cost to serve as its accounting system are not robust enough to capture
cost details voltage wise.
2.196 The Commission would like to continue the procedure adopted last year recognising
the importance of carrying out such an exercise in detail which will enable to test the
retail tariff. Commission based on its view in the last tariff order, that it would be
advisable to initiate a simple formulation which could take into account the major cost
element to reflect the cost of supply, has estimated voltage wise cost to serve based
on the Embedded cost method, the details of which are elaborated in Chapter A5.
2.197 Even though TANGEDCO has attempted to calculate cost to serve, it has been
unsuccessful in doing so at various voltage classes. For arriving at realistic and
accurate costs an extensive data collection exercise has to be carried out by
TANGEDCO which will include a 12-month load profile study of each voltage wise
consumer category. Therefore the Commission once again directs TANGEDCO to
submit a revised and detailed study report on computation of voltage wise ‘cost to
serve’ (CoS) along with the basis of allocation of different costs and losses to various
voltage levels. This shall be examined by the Commission and approved with such
modifications as it may deem fit or consider a better alternate computation. The
Commission also directs TANGEDCO to submit the action taken report within 90
days of the issuance of this order.
10. Merit Order Despatch
Stakeholder Comments
2.198 SPCL and MPCL both have subsisting Power Purchase Agreements with
TANGEDCO for supply of power from their power plants which operate on Low
Sulphur Heavy Stock/Low Sulphur Furnace Oil.
2.199 SPCL and MPCL in their detailed comments mentioned that TANGEDCO has sought
for approval of only fixed costs of the respective plants which is contrary to the
provisions of PPAs in existence. They pointed out that TANGEDCO has to operate
the power plants in accordance with the Article 6.3 of PPA.
2.200 They have been cooperating with TANGEDCO in operating the plant at technically feasible minimum load of 13MW to keep the fuel warm.
2.201 SPCL is totally dependent on TANGEDCO as TANGEDCO is the sole purchaser of power and has referred to various clauses of PPA. TANGEDCO cannot issue zero
power instructions as per PPA provisions
2.202 Both have stated that both they have filed petitions DRP 26 and DRP 27 of 2012 seeking an order restraining TANGEDCO from issuing instructions to SPCL to back
down generation of SPCL and MPCL plants. The petition has been heard by the
Commission and pending for admission
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 49
June 2013
2.203 TANGEDCO has been dispatching the plant to meet its immediate requirements and
has at times issued zero dispatch instructions without regard to the technical
requirements of the plants.
2.204 SPCL and MPCL have requested the Commission to consider appropriate variable
cost for plants as per the PPAs. Order that the approved tariff is subject to the decision
of the Commission in DRP 27 of 2012 filed by MPC. Alternatively, if zero / part
power dispatch instructions is issued by TANGEDCO, it should be limited to max of
4 hrs of zero power followed by a minimum of 8 hrs of technical feasible load of 13
MW single engine operation.
TANGEDCO’s Reply
2.205 Hon’ble TNERC in accordance with above Terms and Conditions of Tariff
Regulations, has determined the power purchase cost and gave the Merit Order
Ranking for all available sources from which energy is available in FY 2012-13 under
Table 192 of Tariff order dated 30.03.2012. According to clause 7.1.2.f. of Tariff
order, Hon’ble TNERC listed M/s PPN, M/s SPCL, M/s MPCL & M/s GMR under
the plants which are not scheduled as per Merit Order Dispatch, with a liberty to
approach Commission in advance if they are dispatched outside Merit order.
2.206 Based on the above Tariff order and Grid Code of Hon’ble Commission, M/s SPC and
M/s MPC are being given zero dispatch instruction from 01.04.2012 till date, based
on the merit order dispatch by SLDC. During the zero dispatch period, M/s SPC and
M/s MPC are allowed fixed charges only, as directed by Commission.
2.207 Further, whenever there is a shortage of power, M/s SPC and M/s MPC are being
dispatched outside merit order by SLDC, and ratification / approval of this dispatch is
obtained from the Hon’ble Commission then and there by TANGEDCO.
2.208 Against the zero dispatch instructions issued by SLDC as per Hon’ble TNERC’s Tariff order, M/s SPC & M/s MPC have raised certain disputes such as directing
TANGEDCO to issue dispatch instructions based on the PPA, to pay the cost of
additional start –stop due to zero power generation, cost of additional fuel for start-up
boiler during zero dispatch etc and filed a DRP before the Hon’ble TNERC vide DRP
No.26 of 2012 and DRP No. 27 of 2012 and the DRPs are yet to be admitted by the
Commission. Preliminary objection has been filed by the TANGEDCO in the above
DRPs.
2.209 As per Article 12 of the PPA on Force Majeure and specified that directions of
Hon’ble Commission in Tariff Order No.1 dated 30.03.2012 vide para 7.1.20, fall
under the Direct Indian Political Event of Force majeure Clause of PPA and therefore
Zero dispatch of power from M/s SPC or M/s MPC is not in violation of the terms of
PPA, as explained above.
2.210 Having established the zero dispatch concept under Force Majeure, now the payment
obligation of TANGEDCO during such Force Majeure shall be dealt, which is as
follows:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 50
June 2013
Article.12.4 Continuing Payment Obligation: Force Majeure of PPA provides as
below:
a) “Upon the occurrence and during the continuance of any event of force Majeure, the Tariff and all other payment obligations of the Parties hereunder
shall continue to be payable as set forth below:
i) for Direct Indian Political Event the project is deemed to be operating at
the NPLF and full Fixed Charge Payment shall be paid by TNEB”
2.211 In FY 2013-14 when compared to FY 2012-13, the variable costs of M/s SPC or M/s
MPC is not likely to come down, but it is likely to increase only, taking market trend
of liquid fuel into consideration.
2.212 In view of the reasons explained above, for this FY 13-14 also, TANGEDCO has filed Tariff Petition & ARR mentioning zero dispatch for the high cost IPPs namely MPC,
SPC, GMR & PPN.
Commission’s View
2.213 Regulation 75(1) of the TNERC (Terms and Condition for Determination of Tariff)
Regulation 2005, specify the following:
“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”.
2.214 Similar provision exists in the Tamil Nadu Electricity Grid Code as well as in
Electricity Act 2003.
2.215 In line with the provisions mentioned above Commission adopted the same approach
to allow the costs in its Orders TO No 3 of 2010 and TO NO 1 of 2012. In the matter
of the above mentioned orders, neither TANGEDCO nor the petitioners have raised
any objections previously on the applicability of merit order principles to their plants.
2.216 Commission understands that the issue of finding alternative for meeting the heating
requirement of fuel pipes and tanks etc in the event of Nil generation, is being taken
up with the IPPs by TANGEDCO so as to strictly follow the Commission’s tariff
order No. 1 of 2012 dated 30-3-2012 as submitted by TANGEDCO in the matter of
petition MP No 23 of 2012.
2.217 In addition the matters concerned to payment obligations or applicability of Articles
of a bilateral PPA are outside the purview of this petition. Hence the Commission
decides that the power purchase quantum for the second control period from M/s
SPCL and M/s MPCL will continue to be governed by Merit Order Despatch
principles.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 51
June 2013
2.218 In cases where the Power Stations are to be despatched outside Merit Order,
TANGEDCO shall obtain approval of the Commission in advance by furnishing
reasons for such action. In case of emergencies 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.
2.219 MoD for the specific stakeholders viz M/s SPCL and M/s MPCL has been in vogue
from 1st April 2012. No specific violation of PPA has been cited by them and a
direction is being sought to follow the PPA. Alternatively a scheme of despatch is
proposed. Section 32(2)(a) of E-Act 2003 states that
“The State Load Despatch Centre shall - (a) be responsible for optimum scheduling
and despatch of electricity within a State, in accordance with the contracts entered
into with the licensees or the generating companies operating in that State;”
There is no merit for any direction from the Commission for following the provisions
of law. As and when there is a cause of action, the Petitioner may approach the
Commission for specific relief.
11. Cross Subsidy Surcharge
Stakeholder Comments
Average Billing Rate
2.220 TANGEDCO has proposed to maintain tariffs at the same levels for HT IA, HT IB,
HT IIB & HT III Consumers. Based on the Demand, Sales, Fixed charges and Energy
charges the average billing rate for these categories works out to Rs. 6.91, Rs. 6.34
Rs. 6.57 and Rs. 7.98 respectively.
2.221 These average billing rates have then been used by TANGEDCO in estimating the
cross subsidy surcharge applicable to consumer categories.
2.222 As per second proviso to Section 42(2) of the Electricity Act 2003, cross subsidy surcharge is to be utilised to meet the current level of cross subsidy meaning to
compensate the distribution licensee whose consumer moves to OA procurement for
the loss in revenue in excess of the cost of supply.
2.223 In Tamil Nadu, even when consumers in these categories move to procure power
through open access, demand charges are being paid by these consumers implying the
actual revenue loss to GEDCO is only on account of the energy charges.
2.224 Therefore, the applicable energy rate to the consumer is the appropriate value to use
in the formula specified in the Tariff Policy 2006 for calculation of CSS, as shown in
table above or revised energy tariff notified by the Hon’ble Commission.
2.225 The effective rate, which includes the demand charges as well, cannot be used, as
revenue on this account is NOT being lost to TANGEDCO due to consumers moving
to open access procurement of power.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 52
June 2013
Marginal Cost
2.226 Further, we request the Hon’ble Commission to verify the power procurement
schedule for FY14 and re-estimate the merit order stack, to ensure that the
disallowance is from appropriate stations at the margin. Therefore, in computing
marginal cost of power, the Hon’ble Commission needs to correctly estimate the
quantum of disallowance and ensure that the merit order stack is correctly represented
Wheeling charges in CSS
2.227 Wheeling is defined in the Section 2(76) of EA2003 as
“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;
2.228 Further, Tariff Policy 2006 specifies that CSS should be calculated as the difference between tariff applicable to relevant category of consumers & the cost of distribution
licensee to supply electricity to this class of consumers, which clearly includes the
transmission cost as well
2.229 Further, the NTPO6 states that the cost to be borne by OA consumer includes
transmission costs.
2.230 As precedent, the Kerala SERC in its Order on ARR, ERC & Tariff for FY13 of
KSEB, has used cost of transmission alone for EHT (transmission voltage) consumers
and aggregate of transmission & distribution cost for HT (distribution voltage)
consumers in estimating cost of distribution licensee.
2.231 Therefore, we submit that the wheeling charges used in the formula to estimate CSS
should include the transmission charges as well, since these form a part of the costs
that the distribution licensee incurs to serve a consumer.
2.232 TNERC should deny TANGEDCO Cross Subsidy Surcharge as long as it is not able to meet the consumers’ demand.
2.233 For calculating the Cross Subsidy surcharge, 3 power generators (Source Table 113) has been taken. The logic of choosing them is to be explained. It appears that they do
not meet the criterion stipulated by tariff policy for this purpose. Further the
calculations in table 114 need to be verified with the formula given in Para 7.3.3.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 53
June 2013
TANGEDCO’s Reply
Average Billing Rate
2.234 The cross subsidy proposed is being calculated on the basis of the formula laid down
by the Ministry of Power in Tariff Policy. As per the formula, the cross subsidy is the
difference between the tariff paid by the relevant category of consumers and the
average cost of supply including line loss and wheeling charges.
2.235 The tariff includes both energy and demand charges. Hence, the cross subsidy
surcharge is being calculated taking into account the demand charges payable by the
consumer also.
2.236 The Cross subsidy surcharge calculated by the TANGEDCO in its tariff petition filed before the Hon’ble TNERC is in line with the formula provided by the Ministry of
Power in Tariff Policy.
2.237 No Provisions are available in the Electricity Act 2003 and Rules and Regulations made there under to omit the demand charges while calculating the cross subsidy
surcharge.
Marginal Cost of Power
2.238 The Tariff Policy prescribed by the Ministry of power specifies the formula to
calculate Marginal cost/Variable cost to arrive at the Cross Subsidy Surcharges.
Accordingly, the Marginal cost/Variable costs are calculated.
Wheeling Charges
2.239 The cross subsidy is being calculated as per the formula notified by the Ministry of
Power in its Tariff Policy. In the Tariff Policy it has been specified to include only
power purchase cost, system loss and wheeling charges payable to distribution
licensee. Accordingly, the TANGEDCO has calculated the cross subsidy surcharge
considering the power purchase cost, system loss and wheeling charges. Hence, the
transmission charges could not be included in the cross subsidy surcharge calculation
as requested by the petitioner.
Non levy of CSS during R&C
2.240 The Government of Tamil Nadu has issued a government order vide G.O. No. 79
dated :11.07.2012 relating to levy of cross subsidy from the consumers who avail
supply from the generators other than TANGEDCO and from CPP without availing
the quota energy from TANGEDCO during the period when R & C measures are in
force. This levy of cross subsidy has been challenged by some of the consumers and
the matter is pending in the Hon’ble High court of Madras.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 54
June 2013
Commission’s View
2.241 The formula laid out in the Tariff Policy for calculating surcharge is as below:
S = T - [C (1+L/100) + D]
Where:
S is the surcharge
T is the Tariff payable by the relevant category of consumers;
C is the Weighted average cost of power purchase of top 5% at the margin
excluded liquid fuel based generation and renewable power
D is the Wheeling charge
L is the system Losses for the applicable voltage level, expressed as a
Percentage
2.242 The Commission is of the view that the policy does not differentiate between demand
charges or energy charges. For implementing tariff philosophy in letter and spirit, a
reasonable realisation rate from consumer category needs to be considered.
Accordingly, average billing rate for the category shall be used for computing the
cross subsidy surcharge.
2.243 The Commission has revised the power purchase quantum for TANGEDCO for the
second control period as outlined in the Chapter A4. Commission has applied the
merit order principles and arrived at power purchase from top 5% at the margin
excluding liquid fuel based and renewable generating stations for computation of
cross subsidy surcharge.
2.244 The Commission does not agree with the suggestion that CSS computation should
include the transmission charges as well. If one has to describe the formula prescribed
in the Tariff Policy for arriving at Surcharge, it will be as follows
a. The average realisation rate/average billing rate of a consumer category
minus the average cost of power purchase avoided due to consumer
opting for open access grossed up for system losses minus the wheeling
charges accrued to the distribution licensee for grant of open access to the
consumer.
2.245 Based on the explanation above, the distribution licensee will charge the consumer for
wheeling charges and revenue accrues to the account of distribution licensee i.e.
TANGEDCO whereas the transmission charges are charged by and accrued to
Transco i.e. TANTRANSCO. Hence the logic of including transmission charges in
the formula is not acceptable.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 55
June 2013
12. Subsidy
Stakeholder Comments
2.246 Last year the subsidy for agriculture and hut is Rs/5858 Crores. The TANGEDCO received only Rs.276 Crores. Govt. should give the full subsidy to the TANGEDCO.
2.247 The subsidy to be given by GoTN is projected as Rs. 1500 crores based on the number of Service Connections, whereas GoTN is giving a subsidy of only Rs 315
crores. Steps should be taken by TNERC to ensure that the right amount of subsidy is
released to TANGEDCO by GoTN.
Commission’s Response
2.248 Subsidy determined by the Commission has been fully given by GoTN.
13. Peak hours and time slots
Stakeholder Comments
2.249 Current peak hour in 6 am to 9 am and 6 pm to 9 pm. Commission directed
TANGEDCO to submit load pattern which is not yet submitted. In R&C measure
peak hour is 6 pm to 10 pm, however practically peak hours are from 6 pm to 9 pm.
2.250 Commission to redefine peak hour as 6 pm to 9 pm and remove morning peak hour
Commission’s View
2.251 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 slots. The
TANGEDCO is directed to submit data on ToD consumption along with the next
Tariff Application with proper justification and consideration by the Commission.
Depending on the impact and response to the ToD tariffs, the Commission will take
view on ToD tariffs depending on data availability and viability in the next tariff
order.
2.252 The Commission is of the view that peak hour tariff and night hour rebate need not 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.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 56
June 2013
14. Solar Purchase Obligation
Stakeholder Comments
2.253 Solar purchase obligation for LT Commercial consumers should be abolished. For
others it shall start from the next year since sufficient solar power is not available.
2.254 Already LT commercial consumer is in higher tariff category this solar purchase
obligation for LT Commercial consumers should be abolished.
2.255 Solar purchase obligation of 3% within December shall be stopped.
2.256 TNERC has erred in imposing the SPO for LT (Commercial) consumers at 3% of the
total consumption even though many issued are yet to be finalized.
2.257 TNERC has ignored the fact that on account of R&C measures and unscheduled
power cuts which range from 0 to 14 hours, during which time the consumer will not
be able to draw and utilize power, it would be impossible for the obligated consumers
to meet their obligations.
2.258 TNERC by way of imposing SPO has imposed additional cost indirectly to the
obligated consumers, which is in the nature of an increase in tariff
2.259 Fixation of SPO quantum of 3% upto 31.12.2013 and 6% from 01.01.2014 would not
be appropriate and correct considering the non-availability of equivalent or sufficient
solar installation in the entire state.
2.260 TNERC is requested to provide ‘Net’ Metering facility / guidelines to adjust the
excess generation by Solar PV panels in billing.
Commission’s View
2.261 SPO is not relevant to the Tariff Petition.
15. Renewable Power
Stakeholder Comments
2.262 Upgradation should be done. Promote Solar power. Cochin Airport is operating
based on the Solar Power. The big projects like Railways, airports should energize
from the Solar Power.
2.263 Bio energy in Tamil Nadu is estimated as 6,15,800 kW whereas actual is 1,87,265 kW
which constitutes 27%. Bio energy in Tamil Nadu should be utilized effectively like
Maharashtra and Gujarat as Maharashtra uses 74% and Gujarat 62%.
2.264 Solar Power shall be used for street lights and drinking water overhead tanks.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 57
June 2013
Commission’s View
2.265 All suggestion for promoting renewable energy shall be examined separately.
16. Equitable distribution of power
Stakeholder Comments
2.266 What are the action taken by the Commission with respect to the directions given by
the Hon’ble High Court of Madras on Equitable distribution of power.
2.267 Representatives from small scale industries, industrial associations, consumer
associations and individual consumers have requested that the tariff should not be
hiked and have all spoken about equitable distribution to be implemented.
Commission’s View
2.268 Separate Petitions have been filed with the Commission and this issue will be dealt
separately.
17. Impact of THANE cyclone
Stakeholder Comments
2.269 TANGEDCO has faced “THANE” super cyclone during the last year and lost its assets worth more than Rs.500 Crores. Not even a single word is uttered about the
same in the petition. It is an extra-ordinary circumstance that TANGEDCO has faced,
though managed exceedingly well.
TANGEDCO’s Reply
2.270 The expenditure incurred towards restoring the power supply in the districts of Cuddalore on account of “THANE” cyclone has been taken into account in the
additional capital expenditure. The petition for additional capitalization was filed in
October 2012 before the Hon’ble Commission.
Commission’s View
2.271 The Commission has examined the capital expenditure and capitalisation in general
and has allowed all prudent expenditure on provisional basis subject to further
scrutiny.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 58
June 2013
18. Sales
Stakeholder Comments
2.272 TANGEDCO did not furnish the methodology for estimating the energy consumption
for the year 2013-14, excepting a run in between the lines that the demand is growing
at 8 % to 10% in the State. It appears that the figures it has furnished were pulled out
of thin air.
TANGEDCO’s Reply
2.273 TANGEDCO would like to submit that the overall growth in sales considered for the
FY 2013-14 is around 16% which is worked out based on 9% growth rate and around
7% increase in consumption due to additional availability of power. Based on the
above assumption most of the additional power that will be available in FY 2013-14
would go to LT consumers who are covered under load shedding. The domestic
consumers are major group of the consumer mix and hence have resulted into an
increase of 23% as compared to FY 2012-13.
Commission’s View
2.274 TANGEDCO has projected energy consumption, load and number of consumers for
the second control period using the historical trend method by applying the category-
wise Compounded Annual Growth Rate (3 years and 5 years CAGR) appropriately.
2.275 Commission after scrutiny of submissions made by TANGEDCO computed the sales
figures taking into account additional capacities coming online during the second
control period leading to improvement in the power supply position. The sales
estimates have been elaborated in Chapter A4.
2.276 Commission is of the view that in future TANGEDCO should come up with a robust
sales estimation technique that flows from a more scientific load growth study and
considers the impact of various factors such as changes in per capita consumption
pattern, sales mix, industrialization in the state etc.
19. Tariff related Comments
a. Tariff for HT Industries
Stakeholder Comments
2.277 Maximum demand charges should be modified from Rs 300 / KVA / month to Rs
2.40 / KVA/ hour i.e. it should be charged only for hours of grid supply. It should
have slab wise rates as in Gujarat. It should also be based on voltage at which power
is supplied i.e. Supply at higher voltages should have lower demand charges.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 59
June 2013
2.278 Commission in its last tariff order fixed tariff for HT consumers at Rs 5.50 / unit as
against TANGEDCO proposal of Rs 5 / unit. Commission should consider reduction
of Rs 0.50/ unit for HT consumers.
2.279 Power factor incentive as prayed before APTEL should be approved and reintroduced by the Commission.
2.280 The tariff applicable during evening peak hours of 120% should be made applicable
for 8 hours instead of 6 hours and similarly the time slot for night consumption should
be reduced by one hour.
2.281 The Commission may restore rebate for maintaining high PF of above 0.90.
2.282 Currently, maximum demand charges for any month will be levied in the KVA
demand actually recorded in that month or 90% of sanctioned demand whichever is
higher. However in case of R&C measures its actual recorded maximum demand or
90% of demand quota, whichever is higher. The Commission may reduce the present
billing to 80% as prevailing in Andhra Pradesh.
2.283 Further for as long as R&C measures are in place, the demand charges be reduced
proportionately based on the hours of supply.
2.284 Service connection for gated community is given under domestic tariff 1A category at
present. Water connection, Cable TV connection etc are given as a single service to
the gated community. Only electricity is extended to individual houses. Therefore,
extension of single point of HT supply to the gated community may be considered.
b. Tariff for HT Commercial
Stakeholder Comments
2.285 Indian squash academy is currently being charged at commercial tariff. Request for
50% concession on the rates for the squash academy.
2.286 Treat power consumed for Dormitory facility to employees of mills as Domestic
under LT IC instead of being treated as Commercial
c. Tariff for Agriculture and Hut services
Stakeholder Comments
2.287 Creed Krishi Vigyan Kendra, which operates under Indian Council for Agricultural Research (ICAR), provides demonstration to small farmers with and without land in
the model farms developed within the organisation. Hence seek change in tariff from
LT IIB to LTIV
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 60
June 2013
2.288 The motor used for drawing water from the well is to be treated under the LT tariff IV
category as the same is to be treated as agriculture related allied activities. Extension
of LT Tariff IV to the Poultry farming which has a poultry population of 25000 nos.
of poultry in one farm.
2.289 Renew the free supply for jaggery production in the agricultural land (as the transportation of sugarcane is not possible) for 5 HP Motor for 40 days which was
previously charged at Rs.60/-.
2.290 For fish farming, free supply at LT IV is extended to some people and for other fish
farm owners the tariff is charged under LT IIIA(1)/IIIB or Tariff V. The disparity
should be removed. LT Tariff IV should be extended to all fish farmers. Request for
tariff change in respect of fish farming from IIIA to IV.
2.291 The name of the consumer who obtains service under LT IIIA(1)/III B or V for fish
farming should be included in the waiting list for LT IV and when the consumer
reaches the seniority from that date onwards he should be charged under LT IV.
2.292 Not to raise tariff for agricultural services due to drought in Kancheepuram.
2.293 The present practice of TANGEDCO for categorizing farmers/ farm holdings in
accordance with the usage of land/ occupation does not take into account the size of
the farm holding or the income. Categorize farm holdings based on income / size of
land so that subsidy is given to the needy farmers. Reasonable user charges are also to
be levied.
2.294 Isha Foundation grows plants and gifts them to children/public. Presently charged at
LT III A (1) in some places and LT V in some places. Request for considering the
activity as agriculture and charged appropriately.
2.295 Provide free service under tariff IV for the Poultry farms which have poultry upto
25,000 nos. Issue clear instructions to TANGEDCO to not levy charges under theft of
energy charges and compensation for the services who use agricultural pumpset for
feeding the poultry.
2.296 Free electricity shall be given to all the poultry farms under Tariff IV category.
2.297 Production of meat should be treated as an agriculture related work and free
electricity should be extended.
2.298 The basis on which the tariff of Rs.1750 / HP was fixed for agricultural services is unknown. Now the tariff is proposed to increased to Rs.2500 / HP. The Government
may give subsidy in view of the coming parliament elections, however if the
Government stops the subsidy in future the farmers will be forced to pay the charges.
Hence, a law may be enacted for providing free power to agriculture consumers in
future.
2.299 Farmers are working to provide food to the people and therefore supply of free
electricity to farmers is the duty of the Government.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 61
June 2013
2.300 Free electricity should continue to the agricultural sector. Meter shall be provided in
the hut services and free supply can be given upto 500 units.
2.301 Free supply should be given to poultry farms below 25000 numbers.
2.302 In Tamil Nadu 24.48 Lakh acres of land was under cultivation. Due to failure of
monsoon, this year severe drought is prevailing in Tamil Nadu. 7 small hydro storage
units, 39,200 lakes,18.60 lakh wells are used for agriculture. Thousands of Crores of
rupees were already lost due to drought. So, there should not be any tariff hike in
agriculture and free electricity should be continued forever.
2.303 The proposed agricultural tariff hike to Rs.2500 per HP per annum may be reduced to
below Rs.2000 per HP.
2.304 The proposed tariff hike for hut services of Rs.120 p.m. may be reduced to Rs.75 p.m.
2.305 Huge increase was made to agricultural and hut services last year. This year also tariff
hike is proposed to agricultural and hut services. Even though subsidy is provided by
the Government, we oppose the tariff hike.
d. Tariff for Streetlight and Water supply
Stakeholder Comments
2.306 In Tariff Order of 30.7.10, NTADC (New Tirupur Area Development Corporation
Ltd.) was classified under II A similar to TWAD for both HT & LT categories which
has been discontinued in the latest Tariff Order. Classify HT Tariff for all 9 Nos New
Tiruppur Area Development Corporation Ltd under Tariff IIA on par with TWAD
Board
e. Tariff for Domestic
Stakeholder Comments
2.307 Maintain the unit rate as in the lower slabs and charge only the units consumed above
the slab in the higher slab instead of adopting different rates for different groups(0 to
100; 0 to 500; 500 and above) based on their consumption.
2.308 Increase in slab rate for more than 500 units at a flat rate of Rs 5.75/= as against Rs
3.75 causes hardship and hence increase slab from 500 units to 1000 units for subsidy
2.309 Fixed charges for LT CT services have been increased from Rs.60 to
Rs.240/KW/month which is 400% increase. Fixed charges should not be related to
MD and retained at the existing energy charges. Drop the fixed charges for LTCT
services as it has no relevance
2.310 Service oriented institutions should be charged at domestic tariff.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 62
June 2013
2.311 Slab system in the domestic tariff should be revised like the slab system followed in
the income tax.
2.312 Tamilnadu Uraga Thozhil mattrum Kurun thozhil munaivar sangam requested for
elimination of slab system for domestic consumption since most of their members are
dwelling in rented accommodation and paying one fourth of their earning as
electricity charges.
f. Tariff for Tiny Industries
Stakeholder Comments
2.313 LT III A may be made applicable for loads upto 20 HP.
2.314 The concessional tariff III A awarded to Jewellery making units should continue.
There should be no increase in tariff.
2.315 Request to increase connected load as 20 HP for LT III A (2) due to industrial growth.
2.316 Tariff for Power Loom increased by 110% while it was increased by 37% for other
categories. Due to power cuts an additional cost of Rs.10,000/- has to be incurred for
operating diesel engines. For power looms operating under payment of wages, tariff
has not been increased. On the same lines for Small Scale Power looms the tariff
revised during last year may be withdrawn.
2.317 Although Govt is paying the subsidy for consumption of 500 units for power looms,
the power looms are forced to pay the fixed charges. Hence, there is no meaning for
giving free electricity.
2.318 Slab system before the last tariff order is to be restored.
2.319 The capacity of the fodder, milking machine and pesticide sprayer varies from 0.5 HP
- 2 HP.
2.320 TANGEDCO is not taking action to change the tariff from Commercial to Tariff
IIIA1 to the horticulture. The Commission shall get the details of the services which
were converted from Commercial to Tariff IIIA1 from the TANGEDCO.
2.321 Extension of waiver of fixed charges under LT III-A(2) upto 500 units bi-monthly.
2.322 The tariff hike made during last year was very high and the tariff should not be
increased for the Small and Tiny industries. Until uninterrupted power supply is
implemented in Tamil Nadu, the tariff should not be increased for the Small and Tiny
industries.
2.323 The Power factor was increased and high power factor is maintained by educating the
workers and by installing the capacitors. Hence, the Power factor incentive should be
given. For power factor between 0.85 - 0.9, 1% rebate and for power factor between
0.95 -1, 2% rebate should be given.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 63
June 2013
2.324 In respect of welding services, the 15 % surcharge should be removed.
2.325 Tariff for fish culture is now charged under IIIA1 category. The same should be
converted in to free supply.
g. Tariff for LT Commercial
Stakeholder Comments
2.326 Central Prison at Coimbatore was initially charged under HT and there after their
tariff has been changed to Tariff-V by the then TNEB. Since their usage is not in
commercial nature, AG audit objects their billing which is charged under Tariff-V.
2.327 Fixed charges for commercial consumers should be reduced from Rs.120 to Rs.60.
h. Tariff General
Stakeholder Comments
2.328 There should be a reduction in number of tariff categories for HT and LT by
combining certain categories such as HT IA and HT IB can be combined, Tariff IIA,
IIB (2) and IIC may be merged, LT Tariff IIA, IIB, IV can be combined, because the
quantum of energy consumed by some of these consumers is not large enough to
merit a separate category.
2.329 Tariff proposed for 2013-14 is not as per Electricity Act, directives of ATE etc. ATE’s directive on Regulatory Assets is not complied.
2.330 Commission should not fix tariff higher than what is asked for by TANGEDCO as
done last year. The rate asked for TANGEDCO should also be reversed as
TANGEDCO has made no improvements despite a 37% increase.
2.331 The tariff proposal for fixation of tariff for the financial year 2013-14 is not showing any indication that the legal and policy guidelines are followed. Some of the
assumptions made in calculating tariff of generating stations are not in accordance
with the basic accounting principles.
2.332 The tariff revision sought in this petition is a measly figure, not worth the petition and
leads to the situation of future hikes in the form of Regulatory Asset.
2.333 TNEB Pensioners Association suggested that TANGEDCO may file a tariff petition
for FY 2013-14 to 15-16 envisaging tariff plan to recover ARR from consumers /
GoTN with suitable higher subsidy, to avoid tariff shock to economically weaker
sections.
2.334 Reduce tariff for low income groups and take assessment every month instead of bi-
monthly.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 64
June 2013
2.335 Provide government subsidy for senior citizens, students of Class X, XII and college
students.
2.336 Adjust the interest on Security Deposit in the CC bill in the year end.
2.337 Consumers to be permitted to pay their CC charges for additional 10 days after the
due date with BPSC after which they can be treated as defaulters.
2.338 Cost of electricity to be differentiated between rural and city consumers.
2.339 Due to inequitable supply of power, tariff for consumers other than Chennai should be
reduced by 20% from the existing levels.
2.340 Free electricity should be provided for Training Centre run by differently abled people, since they are running their centre for their daily livelihood.
2.341 Fixed Charges per KW should be equal for all type of consumers irrespective whether
they are industrial or commercial consumers.
2.342 Since the tariff is equal throughout the state power cut should also be equal in all the districts. Otherwise the tariff shall be reduced for the places where power cut is more.
2.343 TNERC shall not bench mark the tariff of other states while determining the industrial
and commercial tariffs in Tamil Nadu. These consumers cannot take on any further
burden.
2.344 Higher tariff shall be fixed to the lavish elimination to discourage it.
2.345 Calculate power consumption of commercial malls, cinema halls separately and fix
High cost slab system.
2.346 Big commercial organizations consume power heavily for the use of air conditioners
and decorative lights inside the buildings. Therefore the definition of the lavish
elimination should be modified to accommodate these types of consumers also.
2.347 As per the order of APTEL in Appeal No 257 of 2012, request the Commission to
reconsider and re-determine the differential tariff of electricity for peak and off-peak
hours.
2.348 Commission should device steps to recover the Regulatory Asset by way of increasing
the tariff step by step
2.349 Tariff may be hiked for the I.T industries, cinema hall and marriage hall, and for
Lavish Illumination but not for agricultural category.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 65
June 2013
i. Request for Separate Category
Stakeholder Comments
2.350 Seeking separate classification for Textile industry as LF for textile industry is 95-98%. Also referred to Clause 2.1.46 of Issue 6 Cost of Supply where it is stated that
tariff may be fixed as per consumer load factor, power factor, voltage, total
consumption and reflect cost of supply.
2.351 Consider Chennai Metro Rail Limited under special category. MOU between GoI,
GoTN, and CMRL dt 15.2.2011 states that electric power is to be made available to
CMRL on a no-profit –no-loss basis, subject to approval of TNERC. Hence tariff
made applicable to CMRL to be on actual cost of supply at 110 kV level excluding
subsidy and cross-subsidy in line with National Tariff Policy and on par with the
tariffs for DMRC and BMRCL.
2.352 For Cold storage plants and food processing plants, Medium and Small scale
industries special tariff may be announced. Power Factor incentive should be
implemented for this category.
TANGEDCO’s Reply
Tariff Categorization
2.353 TANGEDCO would like to inform that as per Section 62 of the Electricity Act, 2003,
State Commission is vested with the powers to determine tariff for various categories
of consumers. The tariff is being fixed after taking into consideration of the
consumer’s load factor, power factor, voltage, total consumption of electricity etc,.
2.354 In the tariff petition for the year 2013-14, tariff revision has been proposed only for agriculture and hut services and there is no proposal to revise the tariff for other
categories of consumers.
Tariff Proposal
2.355 In the tariff petition for the year 2013-14, tariff revision has been proposed for agriculture and hut services and there is no proposal to revise the tariff for other
categories of consumers. Taking into consideration, the power crises in the State, the
TANGEDCO has filed the petition to revise the tariff only for the LT Agricultural and
LT Hut consumers.
2.356 The Hon’ble TNERC has been vested with the powers to revise the tariff to other category of consumers either to increase or reduce without affecting the revenue of
the TANGEDCO to meet out its ARR. The tariff hike to HT consumers for 2012-13
was already upheld by the APTEL in appeal No.257 of 2012.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 66
June 2013
Proportionate reduction in demand charges
2.357 Further also, in appeal No: 257 of 2012 filed by the M/s. Southern India Mills
Association, Coimbatore, against the Tariff Order No.1 of 2012 dated:30.03.2012
issued by the Hon’ble TNERC,the Hon’ble Appellate Tribunal for Electricity vide in
its order dated 09.04.2013 has upheld the levy of demand charges as stipulated in
Tariff Order No. 1 of 2012 dated 30.03.2012.
2.358 The Hon’ble TNERC vide its rulings has held that the demand charges are intended to
cover the fixed cost of TANGEDCO including interest, depreciation, employee cost,
repair and maintenance etc., and hence even if there is no power supply the demand
charges would be levied.
Separate Category for Textile Industry
2.359 If a separate tariff for textile industries is considered, then other industries coming
under industrial category may also request for a similar treatment and there will be no
tariff rationalization.
2.360 Further also, in appeal No:257 of 2012 filed by the M/s. Southern India Mills
Association, Coimbatore, against the Tariff Order No.1 of 2012 dated:30.0.03.2012
issued by the Hon’ble TNERC, the Hon’ble Appellate Tribunal for Electricity in its
order dated 09.04.2013 has upheld the non consideration of separate tariff for Textile
Industry.
Consideration of Dormitory facility as Domestic:
2.361 The Hon’ble TNERC in its Tariff Order dated 30.03.2012 has clearly stated that in case of supply under HT Tariff, except for HT Tariff III supply used for creating
facilities for the compliance of Acts/Laws or for the purpose incidental to the main
purpose of the establishment of the consumer such as facilities extended to the
employees/students/patients as the case may be within the premises of the consumer
shall be considered to be for the bonafide purpose. However, if such facilities are
extended to the public, such facilities shall be metered by the licensee separately and
charged under appropriate LT Tariff.
2.362 It has also been stated in the Tariff Order dated 30.03.2012 that in the case of supply under HT Tariff IA,IIA,IIB and HT Tariff III at the option of the consumer, the use
of electricity for the residential quarters within the premises shall be metered
separately by the licensee and charged under LT Tariff I C.
2.363 Hence, it is clear that in case of supply under I A, II A, II B and III the use of electricity for residential quarters within the premises can be charged under LT Tariff
I C at the option of the consumer.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 67
June 2013
2.364 In case if the consumer does not wish to exercise any option under clause 10.1.1
under chapter 10 of the tariff Order dated 30.03.2012,then the supply of power can be
treated to be for the purpose of the establishment of the consumer such as facilities
extended to the employees/students/patients as the case may be within the premises of
the consumer and shall be considered to be for the bonafide purpose and charged
under HT Tariff I A without LT metering.
Commission’s View
2.365 Tariff categorization is dealt with in detail in the tariff schedule.
2.366 Request for a law to be enacted for providing free power to agriculture consumers will
be conveyed to GoTN.
Separate Category
2.367 In case the distribution licensee or a consumer feels the justification and necessity for
the creation of a new category, then it should submit the necessary data on consumer
and consumption pattern for the category 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 Commission's consideration.
Demand Charges
2.368 The demand charges are towards recovery of fixed charges of the distribution licensee
towards the cost of infrastructure provided to meet the maximum demand recorded by
a consumer and are not related to the hours of actual supply to the consumer. In any
case as highlighted by the consumer himself the State Commission has ordered to
collect the demand charges in relation to the quota demand instead of sanctioned
demand during the period the Restriction and Control measures are in force, which
means the consumer is not paying any excess demand charges if he restricts his
maximum demand to demand quota. The same is upheld by Hon’ble ATE in its order
on the same matter on 09.04.2013. Relevant para of the order is extracted below
10.7 Imposition of Demand charges is perfectly legal. The Demand charges are
imposed on the basis of maximum demand actually recorded or 90% of the demand
quota during the period of restriction and control. We do not find any illegality in the
impugned order in this regard.”
2.369 The Commission after carrying out a thorough review of the ARR and tariff filings
made by the utility to arrive at allowable pass through cost, based on which the tariff
applicable to each category is determined to enable recovery of the computed cost.
The determination of tariff is an exercise that factors in aspects such as prudence of
expenditure, efficiencies, cost of supply, cross subsidies etc., and put through
iterations to ensure the interests of the consumers are protected at the same time
allowing cost recoveries to happen in a reasonable manner.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 68
June 2013
Power Factor Incentive
2.370 Power Factor (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.
2.371 The Commission would like to state that power factor incentive is subjudice in
Supreme Court.
20. Consumer issues and Quality of Supply
Stakeholder Comments
2.372 Restoration of supply to Agriculture pumpsets in case of breakdown taken a long
time.
2.373 Low voltage problem exists and no quality supply is being given even during the
period where supply is available. On giving proper supply, if tariff is increased people
will be ready to pay now
2.374 As there is meter shortage, consumers purchase the meters to get new service
connections. However, the amount for cost of meters is not refunded to the
consumers. Government shall take action to manufacture the meters.
2.375 There are large numbers of applications pending before TANGEDCO for providing
agricultural service connections. The pending petitions should be disposed of on
timely basis.
2.376 Due to way leave problem agriculture service connection has not been effected even
after 7 years. Request the Commission to interfere to effect service connection to the
consumer.
2.377 R.A. No.4 of 2011 permitted refund of Power Factor incentive for 85 days frm
1.8.2010 to 25.10.2010, TANGEDCO is yet to refund the amount. Request specific
order for compliance.
2.378 Failure of distribution transformers and burning of motors are reported. To avoid this
3 phase supply should be given to agricultural consumers.
2.379 Conditions laid down by TANGEDCO for agricultural service connections are not acceptable.
2.380 Since there are no adequate employees at lower cadre, TANGEDCO’s staff is unable
to attend faults. Further, as the power is supplied at free of cost, the staff do not care
to attend the faults. The attitude of the staff of TANGEDCO should change and they
should attend the faults immediately and rectify the same.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 69
June 2013
2.381 Shortage of employees is stated as the reason for delay in attending the faults. This
can be overcome by appointing contract labours.
2.382 Old distribution lines have to be replaced and maintenance should be done in the
distribution network.
2.383 Delay in giving agricultural connections should be avoided.
Commission’s View
2.384 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.
• The common problems expressed by the consumers include low voltage,
overloading and burning of transformers, cable failures, load shedding etc.
• 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.
• 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.
• 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.
• HT/LT ratio needs to be improved.
• 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.
• The voltage at the tail end needs to be monitored at regular intervals. Proactive
action on the part of TANGEDCO will go a long way in reducing the consumers’
complaints and improving their satisfaction.
• Erection procedure and safety requirements as per section 53 of Electricity Act,
2003 should be followed in letter and spirit.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 70
June 2013
2.385 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.
2.386 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
21. Objections/Suggestions by Southern Railways
2.387 Railway Traction should be exempt from Tax on electricity based on Article 287 of
the Constitution of India. Article 287 also embodies the fact that the tariff should be
reasonable and lower than tariffs charged to other bulk consumers.
2.388 Based on provisions of Section 62(3) of EAct 2003, the Commission may set different
tariffs according to purpose of supply. Railways are a public utility, have no profit
motive and are an essential part of the transport infrastructure of the Country.
Considering the purpose of supply the Traction category should not be burdened with
high level of cross subsidy.
2.389 Average cost / unit paid by Railways is higher than the Industries owing to the fact that while Load Factor at individual points is low due to the nature of Traction.
Considering the above in previous Tariff Orders, Commission fixed demand charges
lesser than the HT Industrial consumers, however energy charges are fixed on par
with other HT industries availing power at 11 KV without considering the fact that
voltage level for Traction is at 110 KV where transmission losses are lower.
2.390 Tariffs should reflect the cost to serve in line with Section 61 of Electricity Act 2003 and TNERC Terms and Conditions of Tariff Regulations 2005.
2.391 Category wise cost of service study carried out shows unrealistic apportionment of
costs for Railway Traction which is not based on facts.
2.392 It is submitted that coincident peak demand should be considered for allocation of
demand costs instead of non coincident peak demand. Southern Railway had
requested all SEs of TANGEDCO for load survey data downloaded during monthly
meter reading for computing coincident and non-coincident peak demands for
submitting the same to the Commission, but data from all circles is not received.
2.393 Commission should direct TANGEDCO to rework Cost to serve Railway Traction
based on coincident peak demand.
2.394 As Railways avails power supply at 110 kV directly from the 110 kV Grid of
TANTRANSCO, the demand related cost allocation should be based on Simultaneous
maximum demand as such demand related distribution costs should be zero for
Railway Traction.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 71
June 2013
2.395 Since Railway Traction is a separate category, technical losses corresponding to the supply voltage of 110 kV should be 2.7% whereas losses upto 11 KV of 6.96% is
considered.
2.396 Commercial losses allocated to Railways is flawed, it should be zero since it is
connected to exclusive 110 KV feeders.
2.397 There are errors as far as energy consumption of Railway Traction is shown in the
petition.
2.398 Assumptions on allocation of customer related costs in the study report on Cost to
serve model in the petition is wrong and misleading. The report states that servicing
bulk consumers is costlier than retail consumers, the fact is the other way round and
hence the study needs a relook.
2.399 TANGEDCO’s proposal of imposing 15% surcharge for harmonics dumping lacks
clarity and is very high. Applicability of IEEE 519/1992 at user end in isolation for
imposing surcharge is questionable. Hence, Commission may defer implementing
surcharge for harmonics dumping until there is clarity in reckoning harmonics is
achieved.
2.400 TANGEDCO’s proposal for adopting 0.85 PF for LT consumers and 0.90 for HT
consumers is irrational. Minimum power factor stipulated for LT consumers should
atleast be equal to HT & EHT consumers.
2.401 Present low PF surcharge works out to 636.98 paise/kVARh whereas cost of reactive power due to the utility is only 10.5 paise/ kVARh. This anomaly is due to adoption
of lag + lead logic for computation of billing power factor. Imprudent implementation
of lag + lead logic of metering by TANGEDCO causes more inefficiency in the
system.
2.402 Also impact on system stability due to leading reactive power as contended by
TANGEDCO is exaggerated. While fixed capacitors gets incentives in Kerala and
Maharashtra, it is penalized in Tamil Nadu.
2.403 AP Discoms which are adopting kVAh billing also ignore leading PF for computing
kVAh consumption.
2.404 Leading PF in Railway Traction should be treated as unity PF.
2.405 Cushion of 20% over and above the Contracted Maximum Demand be allowed
without any surcharge for meeting exigencies. APERC granted such relaxation as per
their Order of 10-03-2011. Consider allowing Recorded Maximum Demand upto
120% of CMD without any penalty for occasional exceeding above CMD.
2.406 Commission to incorporate the agreed conditions between Railways and
TANGEDCO in the Terms and Conditions for Railway Traction to avoid confusion in
some circles in the matter of billing of recorded demand during feed extensions.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 72
June 2013
2.407 Recorded MD during feed extensions due to power failures attributable to
TANGEDCO/ TANTRANSCO can be ignored for billing purposes. Similarly
Recorded MD during failures of equipment or other reasons that are beyond the
control of Railways is allowed without any surcharge upto the sum of CMDs at the
failed and feed extending traction substations. APERC had allowed the same in their
Order dated 10-03-2011.
2.408 Grant suitable rebate on Demand and energy charges for a period of at least 5 years
from the date of commissioning for the new Traction subs stations. Other States are
giving similar benefits to encourage Railways. .
2.409 Commission to direct TANGEDCO to re-programme the existing energy meters to
record the export of energy as well and billed on net metering principles as adopted
for NCES sources. This is in view of Railways introducing a new generation 3 phase
electric locomotives type WAP7 and WAG9 which works on unity power factor for
all loads and has regenerative braking facility. Therefore, 14-18% of energy is
regenerated and fed back into the grid when there are no sufficient trains in the
section.
TANGEDCO’s Replies
Cost to serve Railway Traction at 110 kV
2.410 Taking into consideration the views and objections, the Hon’ble TNERC in its Tariff Orders dated: 31.07.2010 and 30.03.2012 have fixed the demand charges for Railway
traction as Rs.250/KVA i.e. less by Rs.50/KVA compared to HT Industrial
consumers. However, the energy Charges were fixed on par with the HT Industries.
TANGEDCO has not proposed any changes in all categories of HT consumers in the
tariff petition filed before the Hon’ble TNERC for determining tariff for the FY 2013-
14.
2.411 The Hon’ble commission is the competent authority to fix the tariff taking into
account the revenue requirement of TANGEDCO.
Surcharge for excess over CMD for traction
2.412 In any month if the recorded demand exceeds the contracted (sanctioned) demand, the
Tamil Nadu Electricity Supply Code permits the licensee to levy surcharge on the
excess over contracted maximum demand charges. Accordingly, the TANGEDCO
levies the surcharge for excess over contracted maximum demand.
2.413 The request of the Southern Railways not to levy any penalty for occasional exceeding above to the Contracted Maximum Demand is not related to the tariff order
and can be considered only by way of an amendment to the Tamil Nadu Electricity
Supply Code. Hence, the Southern Railways are requested to approach the TNERC
for making necessary amendment to the TNERC Supply Code.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 73
June 2013
Recorded Maximum Demand during feed extension:
2.414 The Consumer has to meet out their demand requirement within their sanctioned
demand. To maintain their recorded demand within the sanctioned demand they have
to create / develop adequate infrastructure within their premises / usage areas.
2.415 The Regulations of the Commission do not have any provision to provide rebate for
the development of infrastructure in the consumer area.
Levy of low power factor surcharge:
2.416 The Commission has ordered to maintain the power factor at the minimum level of
0.9 to the HT consumers and 0.85 to LT consumers. The request of the Southern
Railways to waive the levy of penalty to leading power factor has not been considered
by the commission and the same has also been upheld by the Hon’ble APTEL.
2.417 Hence, the request of the Southern Railways to consider the leading power factor as unity power factor is settled one.
Harmonic surcharge:
2.418 TANGEDCO submits that the harmonic surcharge was made applicable vide tariff
order dated 30th March 2012 and is within the purview of the Hon’ble Commission.
The detailed report on measurement of harmonics and methodology to be adopted for
the same are enclosed.
Metering to regeneration units
2.419 The generators are entitled to inject energy into the grid. Presently there is no provision in the Commission’s Regulations / orders which permits the consumer to
inject the energy into the grid as requested by the Southern Railways.
Commission’s View
2.420 Tax exemption for Railways is prerogative of the state Government.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 74
June 2013
2.421 Regarding the low power factor surcharge, it is stated that the railways filed a petition MP. No. 5 of 2006 with the Commission for restoration of old system of computation
of power factor. The Commission did not accept the plea of the railways in its Order
dated 2-4-2007 and directed the railways to introduce the dynamic compensation
system within a period of three years. Two years later Railways filed another petition
MP No. 3 of 2009 pleading to permit them to adopt “Lag only” logic for metering and
to use only static capacitor compensation for their traction sub-stations. This petition
was dismissed by the Commission in its Order dated 29-6-2009. Against this Order,
the railways filed a review petition RP No. 2 of 2009. The review petition was
disposed of by a reasoned order on merits by the Commission in its Order dated 1-4-
2010. The Railways preferred an appeal against Commission’s Order on RP No. 2 of
2009 dated 1-4-2010. But the APTEL dismissed the Appeal No. 122 of 2010 by its
Order dated 4-11-2011. Raising of the same issue by the Railways again has no
meaning and serves no purpose.
2.422 The Railways have requested the Commission to defer charging of harmonics
surcharge since there is no standard procedure available for measurement of
harmonics. The harmonics norms have been fixed by the CEA in its Regulations
notified on 21-02-2007. The Regulation specifies that the norms shall be
implemented and complied with not later than 5 years from the date of publication of
the regulation. Accordingly, the Commission only implemented the provision in its
Order T.P. No. 1 of 2012. The measurement of harmonics has already been done
jointly by Salem Steel Plant and TANGEDCO as per the norms of the CEA and this
has been recognized by the Commission in its order on MP No. 22 of 2011 dated 28-
9-2012.
2.423 The Commission approved demand charges of Rs.250/- per kVA in its earlier tariff
order against Rs.300/- per kVA approved for other consumers considering the special
nature of the traction load. The Commission is of the view that the Railways, request
to permit 120% of the contracted demand is not supported by reasons and is not in
line with the Regulations.
2.424 Regarding the net metering facilities requested for accounting of power exported from
re-generative breaking, Southern Railways may approach the distribution licensee to
study the proposal for implementation. The TANGEDCO and the railways are
directed to assist each other and resolve the issue and this issue may be brought before
the Commission.
2.425 Regarding charging of tariff on the basis of voltage wise cost to serve it is stated that the issue has been dealt with in detail separately in this order.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 75
June 2013
A3: FINAL TRUE-UP FOR FY 2010-11, PROVISIONAL TRUE-UP FOR
FY 2011-12 AND ANNUAL PERFORMANCE REVIEW FOR FY
2012-13
3.1 TANGEDCO, in its Petition has, sought for Final Truing up of expenditure and
revenue for FY 2010-11 and Provisional Truing up for FY 2011-12 based on the
actual expenditure and revenue as per the Audited Accounts and Provisional Accounts
respectively. It has also sought for the Annual Performance Review for the year FY
2012-13 based on information furnished by it. In this Section, the Commission has
analysed all the elements of revenue and expenses for FY 2010-11, FY 2011-12 and
FY 2012-13, and has undertaken the Truing up of expenses and revenue after due
prudence check.
3.2 This chapter summarizes the highlights of the petitions filed by Tamil Nadu
Generation and Distribution Company Limited (TANGEDCO) for final true-up of
FY11, Provisional true-up of FY12 and Annual Performance Review for FY13.
Energy Sales – FY11 and FY12
3.3 Tamil Nadu Generation and Distribution Company Limited (TANGEDCO), in its
Petition submitted the actual energy sales to various consumer categories during FY
2010-11, 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 Distribution Loss, the Commission has approved the energy
balance.
3.4 The Commission in its previous Tariff Order had approved the category-wise energy
sales after deducting the wheeled units and then considering the past trends in the
growth of category-wise sales. TANGEDCO in its current Petition has furnished
actual sales quantum for FY 2010-11 based on Audited accounts, for FY2011-12
based on Provisional accounts and for FY2012-13 based on actuals till February. The
category-wise energy sales (excluding wheeling units) as approved by the
Commission last year vis-à-vis the sales quantum filed by TANGEDCO this year for
FY 2010-11 and FY 2011-12 are tabulated below.
Table 1: Comparison of category-wise sales approved in the last Tariff Order and actual as filed in this
Petition (MUs)
Particulars
2010-11 2011-12
Approved
in the last
order
Actual
5 months
Actual
Approved
in the last
order
Actual
HT Consumer Category
I-A HT Industries 12,210 11,949 4,422 10,657 9,581
I-B Railway Traction 485 373 248 654 708
II-A Govt. Educational Inst. etc. 903 1,113 482 882 1,251
II-B Pvt. Educational Inst. etc. 148 87 53 222 227
II-C Places of Public Worship 3 36 10 5 28
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 76
June 2013
Particulars
2010-11 2011-12
Approved
in the last
order
Actual
5 months
Actual
Approved
in the last
order
Actual
III HT Commercial 1,763 1,821 789 1,651 1,856
IV Lift Irrigation 7 17 11 6 6
V Supply to Puducherry and Other States 0 412 174 0 400
Sub Total HT 15,520 15,808 6,187 14,078 14,057
LT Consumer Category
I-A Domestic 16,309 16,249 6,251 17,428 17,507
I-B Huts 355 355 148 462 395
I-C LT bulk supply 10 15 5 11 21
II-A Public Lighting and Water Supply 1,603 1,609 672 1,614 1,700
II-B-1 Govt. Educational Inst. etc. 84 501 202 127 574
II-B-2 Pvt. Educational Inst. etc. 150 9 8 254 247
IIC Places of Public Worship 99 98 42 102 101
IIIA 1 Cottage and Tiny Industries 123 677 261 123 562
IIIA 2 Power Looms 824 822 324 730 782
IIIB L.T. Industries 4,435 4,062 1,601 4,015 3,953
IV L.T. Agriculture 9,619 9,410 4,008 10,418 10,118
V L.T. Commercial 4,598 4,344 1,732 4,514 4,296
VI Temporary supply 17 20 10 20 25
Sub Total LT 38,226 38,173 15,263 39,819 40,281
Total HT + LT 53,746 53,981 21,451 53,897 54,338
3.5 TANGEDCO submitted that during the 5 months period starting 1st November 2010
to March 31st 2011, the actual sales were 21,451 MUs including 174 MUs sold to
Puducherry.
3.6 The Commission after scrutiny of the audited accounts has approved the sales for FY
2010-11 and FY 2011-12 based on factors as noted below:
• Sale to Metered categories: The Commission accepts the actual sales as per
the audited accounts adjusted for wheeled units for all relevant metered
categories of consumers. This is in light of the R&C imposed on HT Industries
and Load shedding imposed on various other categories of consumers. Further
re-categorisation of a single category namely Recognised Educational
Institutions was split into Government Educational Institutions and Private
Educational Institutions was done in the tariff order dated 31.07.2010.
• Sales to Un-metered categories: From the sales figures submitted, it is
observed that for Agriculture, the consumption as estimated by TANGEDCO
is lower than that approved by the Commission in the last order. The
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 77
June 2013
Commission decided to accept the sales as per audited accounts for all un-
metered categories.
• The Commission maintains its stance on disallowance of sale to Puducherry.
Based on its ruling in its previous Tariff Order dated July 31, 2010. The
Commission has accepted the actual sales for the 5 month period of FY 2010-
11 as 21,451 MUs less 174 MUs (sale to Puducherry) totalling to 21,277 MUs.
Impact of Wheeling units and Cost – FY 2010-11 and FY 2011-12
3.7 The Commission in its last tariff order had identified that the wheeled units were not
to be included in sales and power purchase for FY 2010-11 and FY 2011-12, and
based on data made available by TANGEDCO, calculated the wheeling units to be
adjusted from three consumer categories namely; HT Industrial, HT Commercial and
HT Private Educational institutions.
3.8 TANGEDCO in its current petition has rectified this error and provided the following
data for adjustment of wheeled units both in sales as well as in revenue. Therefore the
total sales and corresponding revenue approved by the Commission for of FY 2010-
11(last 5 months) and FY 2011-12 is as follows. The revenue is exclusive of subsidy.
Table 2: Total sales and revenue as approved by the Commission for FY 2010-11 (5months) and FY 2011-
12
Particulars FY 2010-11 FY 2011-12
MU's Rs. Crores MU's Rs. Crores
Total Sales as per Accounts 24,159 8,104 61,387 20,003
Wheeling for HT Industries 2,618 831 6,750 2,268
Wheeling for Private Educational Institutions 4 2 10 5
Wheeling for HT Commercial 87 61 289 203
Less: Total Wheeling Adjustments 2,709 894 7,049 2,476
Total Sales without wheeling units 21,451 7,211 54,338 17,527
Less: Total Sales to Puducherry 174 51 400 123
Total Sales as approved 21,277 7,160 53,938 17,404
3.9 The following table shows the category-wise sales for the last five months of FY
2010-11 and for FY 2011-12 as approved by the Commission.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 78
June 2013
Table 3: Category wise Sales for FY 2010-11(5 months) and FY 2011-12 as approved by the Commission
(MUs)
Consumer Category
FY 2010-11 FY 2011-12
Sales Sales
High Tension Supply (HT)
I-A HT Industries 4,422 9,581
I-B Railway Traction 248 708
II-A Govt. Educational Inst. Hospitals, water supply etc. 482 1251
II-B Pvt. Educational Inst., Cinema theatres & Studios 53 227
II-C Actual places of public worship, Mutts and Religious Inst. 10 28
III HT Commercial 789 1856
IV Lift Irrigation, Co-operative societies 11 6
Sub Total HT 6,013 13,657
Low Tension Supply (LT)
I-A Domestic Purposes 6,251 17,507
I-B Huts in Village Panchayats, TAHDCO etc. 148 395
I-C Defence Colonies etc. Notified Tariff 5 21
II-A Public Lighting and Public Water Supply & Sewerage 672 1,700
II-B-1 Govt. Educational Inst., Hospitals, water supply etc. 202 574
II-B-2 Private Educational Inst., Cinema theatres & Studios 8 247
IIC Actual places of public worship 42 101
IIIA 1 Cottage and Tiny Industries, 261 562
IIIA 2 Power Looms 324 782
IIIB Coffee grinding and Ice factories etc. and Industries not
covered under LT Tariff IIIA 1,601 3,953
IV Agriculture and Govt. seed farms 4,008 10,118
V Commercial and all categories of Consumers not covered under
IA, IB,IC, IIA, IIB, IIIA, III B and IV 1,732 4,296
VI Temporary supply: (a) Lighting and combined installation, (b)
Lavish illuminations 10 25
Sub Total LT 15,263 40,281
Total HT and LT 21,277 53,938
3.10 TANGEDCO in its Petition has included sale of power to Puducherry. The issue of
supply of power to the Union Territory of Puducherry was discussed in the Tariff
Order dated 31st July 2010. This issue was discussed in para 3.2.6 of the Order. This
entire paragraph is extracted below.
“3.2.6 Supply to Puducherry
3.2.6.1 The Tariff petition filed by TNEB includes sale of power to the Union
Territory of Puducherry and the projection for various years are as follows:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 79
June 2013
(a) 2007-08 393 MU
(b) 2008-09 373 MU
(c) 2009-10 420 MU
(d) 2010-11 445 MU
(e) 2011-12 471 MU
(f) 2012-13 499 MU
3.2.6.2 The Commission desired to know the basis on which power is being
supplied to Puducherry and sought details regarding agreement if any entered into
between the two States. The TNEB has not been able to produce any agreement for
sale of power to Puducherry. In this backdrop the Commission had examined the
tariff orders issued by the Commission in 2003.
3.2.6.3 The position taken by Government of Puducherry during the earlier
tariff determination exercise was that the tariff for supply of energy to Puducherry
should be as per the Tamil Nadu Revision of Tariff Rates on Supply of Electrical
Energy Act, 1978 and the supply shall be charged at the rates supplied by NLC to the
TNEB plus wheeling charge at 10 Paise per KWh plus 4% on the energy wheeling
towards transmission loss. The State of Puducherry also disputed the jurisdiction of
the TNERC to decide the tariff for Puducherry. The TNEB had expressed a view that
the agreement between TNEB and NLC is a bilateral agreement and the Government
of Puducherry is not a party to this agreement. Since the cost of supply at the HT end
worked out to 303.69 paise, they proposed to continue charging Puducherry @
Rs.3.00 per kWh under HT Tariff V. The Commission maintained status quo and
continued the then prevailing tariff of Rs.3 per kWh.
3.2.6.4 Since the Joint Electricity Regulatory Commission for the State of Goa
and Union Territory of Puducherry had issued an order on ARR and Retail tariff for
the electricity department, Government of Puducherry for the financial year 2009-10
on 5-2-2010 the Commission had examined that order too and the relevant portion
with reference to sale of power by TNEB to Puducherry is extracted below:
“In respect of purchase of power from TNEB the EDP has submitted that initially the
power availed from TNEB was charged at the rate paid by TNEB to NLC plus
wheeling charges. The TNEB has revised the tariff to Rs.3.00per kwh with effect from
01/12/2001 treating EDP as a HT consumer. The EDP has challenged this decision
by filing a petition before Hon’ble TNERC. The Hon’ble TNERC concluded that the
sale of power between EDP and TNEB was in the nature of interstate sale of power
and EDP cannot be treated as a HT consumer and ordered to maintain status quo.
The EDP has challenged this in the Hon’ble High Court of Judicature at Madras and
stay was granted and the Hon’ High Court directed payment to TNEB at the rate
charged by NLC plus wheeling charges. The EDP made the payment accordingly. The
main issue is yet to be decided.”
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 80
June 2013
3.2.6.5 The Commission would like to observe that in the absence of firm sale
contract between TNEB and the Government of Puducherry and with the ever
increasing sale of electricity to Puducherry by the TNEB, a situation is being created
which has resulted in the TNEB subsidizing the electricity consumers of Puducherry
at the expense of electricity consumers of Tamil Nadu. Currently, the TNEB itself is
facing an acute shortage of power and has been purchasing power in the open market
in the range of Rs. 5 to 7 per unit. Whereas the sale to Puducherry is at the rate of
Rs.1.94 per unit. TNEB needs to protect the electricity consumers of Tamil Nadu.”
3.11 The Commission understands that a case is pending before the Hon’ble High Court of
Madras and the TANGEDCO is supplying power to Puducherry at the rate of Rs.3.28
per unit (Rs.3.18 NLC TS-1 rate fixed by CERC and 10 paise for wheeling charges).
Under these circumstances, the Commission has no other choice but to consider the
transaction with Puducherry as outside the purview of this Tariff Order. For doing
this, the Commission will consider the total energy sales to Puducherry grossed by the
transmission loss for reduction in the total power purchase. Further, corresponding to
the energy actually supplied to Puducherry at the Tamil Nadu interface point, revenue
will not be taken into account for the purpose of Annual Revenue Requirement. The
Commission hopes that this issue will be settled at the earliest, once the Order of the
Hon’ble High Court of Madras in this issue becomes available.
3.12 Hence, Commission has not considered the sale of power to Puducherry. In addition,
Commission has not considered wheeled units in sales estimate. The Commission has
approved sales quantum of 21,277 MUs for FY 2010-11 (5months) and 53,938 MUs
for FY 2011-12.
Energy Sales – FY 2012-13
3.13 TANGEDCO in its petition projected sales for 2012-13 based on actual sales for 6
months upto September 2012. Responding to data gaps, TANGEDCO furnished
actual sales for the year till February 2013. The table below captures the sales as
approved by the Commission in the last Tariff order, sales as filed by TANGEDCO in
its petition and the actual sales furnished by TANGEDCO in its reply to data gaps.
Table 4: Comparison of category-wise sales approved in the last Tariff Order, as filed in their Petition
and actual submitted for FY 2012-13 (MUs)
Particulars
2012-13
Approved in
the last order Petition
Revised
filing
HT Consumer Category
I-A HT Industries 13,545 7,944 7,111
I-B Railway Traction 726 758 709
II-A Govt. Educational Inst. etc. 882 1,038 903
II-B Pvt. Educational Inst. etc. 243 256 224
II-C Places of Public Worship 5 6 -
III HT Commercial 1,908 1,837 1,312
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 81
June 2013
Particulars
2012-13
Approved in
the last order Petition
Revised
filing
IV Lift Irrigation 6 6 4
V Supply to Puducherry and Other States 413 408
VI Temporary supply - 5 165
Total HT 17,315 12,263 10,835
LT Consumer Category
I-A Domestic 18,252 18,934 17,540
I-B Huts 617 473 425
I-C LT bulk supply 11 12 10
II-A Public Lighting and Water Supply 1,625 1,905 1,652
II-B-1 Govt. Educational Inst. etc. 127 139 109
II-B-2 Pvt. Educational Inst. etc. 254 276 192
IIC Places of Public Worship 102 113 93
IIIA 1 Cottage and Tiny Industries 126 143 134
IIIA 2 Power Looms 730 831 713
IIIB L.T. Industries 4,015 4,913 4,280
IV L.T. Agriculture 10,601 9,707 11,089
V L.T. Commercial 5,066 5,421 4,841
VI Temporary supply 20 24 36
Total LT 41,546 42,891 41,114
Total HT + LT 58,861 55,155 51,948
3.14 The steep decrease in actual consumption in FY 2012-13 over what was approved by
the Commission last year can be attributed to the severe energy shortage in the state
which led to imposing of additional R&C measures and Load shedding. This in turn
has further led to consumers procuring energy through open access.
3.15 The percentage change in category-wise actual sales as of FY 2012-13 over that of FY
2011-12 is as follows:
Table 5: Growth rate of sales in FY 2012-13 over the actual sales of FY 2011-12
Particulars 2011-12
MUs
2012-13
MUs % growth
HT Consumer Category
I-A HT Industries 9,581 7,111 -26%
I-B Railway Traction 708 709 0%
II-A Govt. Educational Inst. etc. 1,251 903 -28%
II-B Pvt. Educational Inst. etc. 227 224 -1%
II-C Places of Public Worship 28 -
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 82
June 2013
Particulars 2011-12
MUs
2012-13
MUs % growth
III HT Commercial 1,856 1,312 -29%
IV Lift Irrigation 6 4 -33%
V Supply to Puducherry and Other States - 408 -
VI Temporary supply - 165 -
Total HT 13,657 10,835 -24%
LT Consumer Category
I-A Domestic 17,507 17,540 0%
I-B Huts 395 426 8%
I-C LT bulk supply 21 10 -52%
II-A Public Lighting and Water Supply 1,700 1,652 -3%
II-B-1 Govt. Educational Inst. etc.* 574 109 -81%
II-B-2 Pvt. Educational Inst. etc. 247 192 -22%
IIC Places of Public Worship 101 93 -8%
IIIA 1 Cottage and Tiny Industries* 562 134 -76%
IIIA 2 Power Looms 782 713 -9%
IIIB L.T. Industries 3,953 4,280 8%
IV L.T. Agriculture 10,118 11,089 10%
V L.T. Commercial 4,296 4,841 13%
VI Temporary supply 25 36 44%
Total LT 40,281 41,114 2%
*The sales needs to be verified with the audited account for FY 2012-13
3.16 Metered categories: The Commission has accepted the actual sales for all metered
categories for FY 2012-13 as submitted by TANGEDCO in its reply to data gaps. As
treated in the previous years, sales to Puducherry have not been allowed by the
Commission for the year FY 2012-13 as well.
3.17 Un-metered categories: TANGEDCO furnished the following information regarding
sales to Hut and Agricultural consumption.
• Hut category (LT I-B): In its reply to the data gaps identified by the
Commission, TANGEDCO submitted the revised details towards Hut
consumption for FY 2012-13. The Commission observed that TANGEDCO
has furnished its calculation of 426 MU, towards hut consumption on the basis
of certain assumptions which are not in conformity with the Government
Order (G.O.).Ms. No.2 dated 03-06-2011 issued by GoTN.
Therefore the Commission recalculated consumption based on the details in
the above mentioned G.O. The Commission has considered the wattage as
specified by the GoTN and the hours of use as considered by TANGEDCO.
Data furnished by TANGEDCO on the number of huts to which specific
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 83
June 2013
electrical appliances were distributed, has been considered by the Commission
to arrive at consumption. The total quantum of huts was kept equal to that of
FY 2011-12 in the wake of a decreasing trend in number of hut connections
from FY 2010-11 onwards.
Table 6: Hut consumption as re-estimated by the Commission for FY 2012-13
Sl. No. Appliance type Numbers Wattage Hours Days Consumption
(MUs)
1 Light 1,367,171 40.00 6.00 365.00 119.76
2 TV 859,690 70.00 10.00 365.00 219.65
3 CF Lamp 89,044 11.00 6.00 365.00 2.15
4 Mixie 267,741 550.00 0.50 365.00 26.87
5 Grinder 267,817 300.00 2.00 156.00 25.07
6 Fan 256,390 61.00 12.00 365.00 68.50
7 RGGVY Huts 373 40.00 12.00 365.00 0.07
Total Consumption 462
• Agricultural category (LT IV): In its reply to data gaps identified by the
Commission, TANGEDCO submitted the revised details of Agricultural
consumption for FY 2012-13. The Commission observed that there was a
significant downward revision in the number of agricultural service
connections submitted in comparison to data in Form F-2 (Sales) of the
petition. The revised agricultural load in HP at the end of the year had only
increased marginally. However TANGEDCO increased its estimate of
agricultural consumption by 1,382 MUs, i.e. from 9,707 MUs to 11,089 MUs.
The Commission re-estimated the agricultural consumption based on the
average capacity of pumpset in the middle of the year as calculated below. The
data on actual additional connections given as well as corresponding increase
in load as submitted by TANGEDCO in its reply to data gaps has been
considered. It has been assumed by the Commission that 50% of the
connections and corresponding capacity would get added in the first half of the
year. The average consumption in kWh/ HP has been capped at the level as it
stood for FY 2011-12 based on the 5% sample study data submitted last year
at 923 units. Based on the above assumptions the agricultural consumption for
the year FY 2012-13 has been estimated as 10,206 MUs by the Commission.
Based on the average consumption per HP/ Annum as per the 5% sample data
for FY 2012-13, TANGEDCO has estimated the annual consumption as
11,089 MUs. The Commission has calculated the average hours of daily
supply to agricultural consumers based on this data. It was noticed that the
average hours of daily supply for FY 2012-13 worked out to be higher than
that of FY 2011-12. The Commission opines that this situation is improbable
given the facts that the year 2012-13 saw higher shortage of power as
compared to the previous year as well as that 2012-13 was a drought year.
Given that additional connection to the tune of 15,539 were given in the State
during the year, it is evident that the 5% sample data for FY 2012-13 cannot
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 84
June 2013
be considered for estimating annual consumption. Hence the Commission did
not take into consideration the 5% sample study data submitted for FY 2012-
13.
Table 7: Agricultural consumption as re-estimated by the Commission for FY 2012-13
Sl. No. Particulars 2012-13
1 No. of service connections at the end of the year 2,036,898
2 YoY Increase 15,539
% added in the first half 50.0%
3 No. of service connections in the middle of the year 2,029,129
4 Connected load in HP at the end of the year 11,084,004
5 YoY Increase 54,545
6 Connected load in HP at the middle of the year 11,056,732
7 Average capacity of pumpset in HP at the middle of the year ( 6 / 3 ) 5.45
8 Average consumption in KWh /HP / Annum 923
9 Consumption in MUs ( 3 x 7 x 8 ) 10,206
3.18 The following table shows the category-wise sales approved by the Commission for
FY 2012-13 based on revised sales estimates.
Table 8: Sales for FY 2012-13 approved by the Commission (MUs)
Particulars Sales
HT Consumer Category
I-A HT Industries 7,111
I-B Railway Traction 709
II-A Govt. Educational Inst. etc. 903
II-B Pvt. Educational Inst. etc. 224
III HT Commercial 1,312
IV Lift Irrigation 4
V Temporary supply 165
Total HT 10,427
LT Consumer Category
I-A Domestic 17,540
I-B Huts 462
I-C LT bulk supply 10
II-A Public Lighting and Water Supply 1,652
II-B-1 Govt. Educational Inst. etc. 109
II-B-2 Pvt. Educational Inst. etc. 192
IIC Places of Public Worship 93
IIIA 1 Cottage and Tiny Industries 134
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 85
June 2013
Particulars Sales
IIIA 2 Power Looms 713
IIIB L.T. Industries 4,280
IV L.T. Agriculture 10,206
V L.T. Commercial 4,841
VI Temporary supply 36
Total LT 40,268
Total HT + LT 50,695
3.19 Therefore the sales for FY 2012-13 as approved by the Commission are 50,695 MUs
as against 51,948 MUs filed by TANGEDCO.
Energy Availability
3.20 TANGEDCO meets its energy requirements from its own generating stations,
purchases from central generating stations, IPPs and other sources.
3.21 TANGEDCO in its Petition submitted the details of energy availability from FY
2010-11 to FY 2012-13 based on the actual energy available during the period. The
submission for FY 2010-11 is based on audited accounts while the submission for FY
2011-12 is based on provisional accounts. For FY 2012-13, TANGEDCO
extrapolated the availability on the basis of actual energy available for first half of the
financial year.
3.22 Accordingly Commission in this Section has analyzed the performance of
TANGEDCO’s own generating stations. In addition for the period FY 2010-11 to FY
2012-13, the energy availability from Own Generating stations as well as from other
sources is discussed. The availability of energy is discussed source wise in the
following order:
1 Own Generation
• Thermal Generation
• Hydro Generation
• Wind Generation
• New generating stations
2 Other Sources
• Central Generating Stations
• IPPs
• Captive/Cogeneration and Non-Conventional energy sources
• Other sources such as Trading – Bilateral & Exchange, NTPC NVVN and UI
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 86
June 2013
Own Generation
3.23 The total installed capacity of generating stations of TANGEDCO as on March 2013
was 5792 MW. The detailed break up of generation capacity of TANGEDCO stations
is as tabulated below:
Table 9: Installed capacity of existing TANGEDCO stations (As on March 2013)
Name of the power plant Installed capacity (in MW)
Coal based generating stations
Ennore Thermal Power Station (ETPS) 450
Tuticorin Thermal Power Station (TTPS) 1050
Mettur Thermal Power Station (MTPS) 840
North Chennai Thermal Power Station (NCTPS) 630
Sub total 2970
Gas based generating stations
Tirumakottai Gas based Power Station (TGTPS) 108
Kuttalam Gas based Power Station (KGTPS) 101
Valuthur - Unit 1 Gas based power station (VGTPS – 1) 95
Valuthur - Unit 2 Gas based power station (VGTPS – 2) 92
Basin Bridge Gas turbine power station (BBGTPS) 120
Sub total 516
Hydro Generating Circles
Kundah Hydro Generating Circle 833
Kadamparai Hydro Generating Circle 595
Erode Hydro Generating Circle 504
Tirunelveli Hydro Generating Circle 356
Sub Total 2289
Wind Energy - Tirunelveli and Udumalpet 17
Total 5792
Thermal generation
3.24 The operational performance parameters such as plant load factor and auxiliary
consumption approved by the Commission in the last tariff order and claimed by
TANGEDCO in its current MYT petition are tabulated below.
Table 10: Plant load factor of own generating stations
Name of the
power plant
Approved in last tariff order (March 30,
2012)
Submitted by TANGEDCO in MYT
Petition
2010-11 2011-12 2012-13 2010-11 2011-12 2012-13
ETPS 35.42% 25.81% 20.28% 35.40% 22.65% 23.43%
TTPS 77.33% 84.87% 82.43% 77.30% 85.57% 83.20%
MTPS 82.42% 92.40% 89.01% 82.42% 92.77% 83.85%
NCTPS 81.74% 87.54% 86.95% 81.74% 84.81% 86.27%
TGTPS 68.74% 64.55% 68.75% 68.74% 74.47% 75.85%
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 87
June 2013
Name of the
power plant
Approved in last tariff order (March 30,
2012)
Submitted by TANGEDCO in MYT
Petition
2010-11 2011-12 2012-13 2010-11 2011-12 2012-13
KGTPS 19.29% 72.45% 71.20% 19.51% 46.58% 12.80%
BBGTPS 4.93% 5.71% 5.75% 4.93% 2.81% 0.51%
VGTPS - 1 67.54% 67.29% 78.50% 67.59% 78.94% 49.12%
VGTPS – 2 0% 55.22% 78.30% - 56.16% 53.84%
Table 11: Auxiliary consumption of own generating stations
Name of the
power plant
Approved in last tariff order (March 30,
2012)
Submitted by TANGEDCO in MYT
Petition
2010-11 2011-12 2012-13 2010-11 2011-12 2012-13
ETPS 15.78% 16.32% 15.00% 15.78% 16.70% 15.00%
TTPS 8.31% 10.11% 8.50% 8.28% 7.98% 8.50%
MTPS 8.51% 8.31% 9.00% 8.30% 8.26% 8.34%
NCTPS 8.89% 4.35% 8.50% 8.70% 8.36% 8.40%
TGTPS 6.19% 6.00% 6.00% 6.87% 6.50% 5.97%
KGTPS 6.83% 6.67% 6.00% 7.28% 7.32% 6.00%
BBGTPS 0.62% 0.30% 3.43% 0.65% 0.57% 0.99%
VGTPS - 1 5.52% 5.87% 6.00% 5.90% 7.00% 5.91%
VGTPS – 2 - 5.84% 6.00% - 7.00% 6.40%
3.25 TANGEDCO in its petition submitted the actual PLF and Auxiliary consumption for
FY 2011 and FY 2012. For FY 2013 TANGEDCO submitted estimates based on first
half year performance.
3.26 The Commission observed that the actual PLFs submitted for all coal based power
stations except for ETPS are above 80% and in accordance with the Commission’s
approved figures in the last order. However, it was observed that for the gas based
stations the PLFs were lower than the approved norms.
3.27 TANGEDCO in its Petition submitted the following reasons for low PLF of its power
plants
KGTPS
i. KGTPS was under shut down from 18th July 2010 to 26th May 2011 due to
removal of Gas Turbine Generator stator for replacement of failed stator at
VGTPS-I/Ramnad. This decision was taken in order to avoid Minimum
Guaranteed Off-Take charges (MGO) payable at Valuthur for non-utilization
of gas at Ramnad Zone.
ii. The unit was again shut down from 22nd February 2012 to February 2013 due
to failure of compressor blades in gas turbine rotor. Also, the unit was not able
to be re-commissioned as per envisaged schedule due to diversion of materials
procured /refurbished for re-commissioning of KGTPS to VGTPS-I in order to
avoid minimum guarantee offtake charges payable at VGTPS-1.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 88
June 2013
NCTPS
i. Unit I, The unit was taken off Bars on 21st January 2012 due to Hydrogen gas
leakage in the Generator Stator water system. After completion of the works,
the Unit was put back into service on 19th March 2012.
ii. Unit II, The unit was hand tripped on 20th February 2012 for Emergency Shut
down due to Turbine Axial shift high on Positive side. After completion of the
works, the Unit was put back into service on 03rd March 2012.
MTPS
The lower PLF of MTPS in FY 2012-13 was mainly due to the major fire accident
that occurred in the coal handling system at MTPS on 10th May 2012 resulting in
forced outage of all the four Units. After reconstruction works of the damaged Coal
handling system the system was put back into service within 15 days and full
generation was resumed at MTPS by the end of May’12.
VGTPS -1
i. The unit was under shutdown from 11th March 2012 to 02nd May 2012, due
to vibration in GT rotor
ii. The unit tripped again on 26th June 2012 but could not be put back into
service due to heavy internal damages in GT rotor. The unit was re-
commissioned on 17th October 2012 by diverting the materials procured for
re-commissioning of KGTPS.
VGTPS -2
i. The unit, which was under shut down from 9th January 2010 to 7
th May 2011
due to high vibrations and heavy internal damages, was under stabilization till
the end of July 2011 due to teething problems such as Gear Box vibration
leakage in Blow off Valve HP Economizer Valve etc. Even after attending
these problems by OEM, full load could not be reached due to Choking of Air
Filters. The defective Air Filters were replaced by new filters on 15th April
2012.
ii. The plant was under shut down from 27th April 2012 to 04th May 2012 for
Boiler License renewal.
iii. The unit again tripped on 30th June 2012 due to activation of surge protection
relay which was activated due to sudden dip in frequency. Subsequently,
Steam Turbine Generator got tripped. After normalization, the GT could not
be started due to failure of bearing in Inlet Guide Vane (IGV). This unit was re
commissioned on 14th August 2012 by importing IGV and put into service.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 89
June 2013
3.28 However, Commission has observed that net generation submitted by TANGEDCO is
not in accordance with the PLFs and auxiliary consumption submitted for FY 2010-11
and FY 2011-12.
3.29 The net generation submitted by TANGEDCO from FY 2010-11 to FY 2012-13 is as
given below:
Table 12: Net own generation submitted by TANGEDCO (in MUs)
Name of the
power plant
Approved in last tariff order (March 30,
2012)
Submitted by TANGEDCO in MYT
Petition
2010-11 2011-12 2012-13 2010-11 2011-12 2012-13
ETPS 490 851 680 505 744 785
TTPS 2718 7018 6938 2648 7262 7002
MTPS 2312 6234 5960 2402 6279 5655
NCTPS 1713 4621 4391 1868 4301 4361
TGTPS 254 650 611 271 660 674
KGTPS 65 457 592 0 383 106
BBGTPS 22 44 58 39 29 5
VGTPS 221 1093 1207 302 1027 792
Total 7795 20968 20437 8035 20686 19381
3.30 Commission asked TANGEDCO to clarify the anomalies in energy availability
calculations. In response, TANGEDCO has revised the PLFs in accordance to the
gross generation and also submitted net generation details.
3.31 The revised PLFs submitted by TANGEDCO and auxiliary consumption calculated
by the Commission based on the revised data submitted by TANGEDCO are
tabulated below:
Table 13: Revised PLFs and auxiliary consumption for thermal plants submitted by TANGEDCO
Name of the
power plant
Revised PLFs Auxiliary Consumption
2010-11 2011-12 2010-11 2011-12
ETPS 36.76% 22.61% 18.74% 20.05%
TTPS 75.88% 85.57% 9.03% 8.67%
MTPS 86.06% 92.77% 9.05% 9.00%
NCTPS 89.61% 84.81% 9.53% 9.12%
TGTPS 74.45% 74.48% 7.38% 6.94%
KGTPS 0.00% 46.58% 0.00% 7.90%
BBGTPS 8.98% 2.81% 0.65% 1.96%
VGTPS - 1 93.08% 78.93% 6.27% 7.53%
VGTPS – 2 0.00% 56.10% 0.00% 7.53%
Note: Infirm power already included in the existing thermal stations
3.32 Also in response to additional data required, TANGEDCO has submitted the actual
generation in FY 2012-13 (upto February 2013) with respect to own generating
stations.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 90
June 2013
Table 14: Actual generation in FY 2012-13 (Upto February 2013) – Submitted by TANGEDCO
Name of the power plant Actual generation (Upto
February 2013) – in MUs
ETPS 555.10
TTPS 6904.76
MTPS 5139.54
NCTPS 4248.93
TGTPS 627.79
KGTPS 7.283
BBGTPS 0.41
VGTPS – 1 361.34
VGTPS – 2 407.31
Total 18252.46
3.33 From the submissions made, it is observed that Plant Load Factor for almost all the
plants was in accordance with the Commission approved norms without any major
deviation except for KGTPS, MTPS (in FY 2013) and VGTPS (in FY 2013). The
auxiliary consumption achieved by most of TANGEDCO generating plants is in line
with auxiliary consumption numbers approved by the Commission in its Tariff Order
dated 30th March 2012.
3.34 In view of the reasons cited for lower PLFs by TANGEDCO and the fact that FY
2010-11 and FY 2011-12 are already over, the Commission decided to accept the
PLFs and Auxiliary consumption numbers as submitted by TANGEDCO in its
petition, for computation of energy availability. For FY 2012-13, the Commission
projected net generation from thermal stations by considering the actual generation
details (Upto February 2013) submitted by TANGEDCO. However variable charges
will be calculated considering approved auxiliary consumption as per last tariff
order and allocation of capacity charges will be done in accordance with
regulation-37 of TNERC tariff regulations, 2005.
3.35 The summary of energy availability submitted by TANGEDCO and approved by the
Commission in this order for existing TANGEDCO thermal stations is tabulated
below:
Table 15: Summary of energy availability – TANGEDCO thermal stations (MUs)
Name of
the power
plant
FY 2010-11 FY 2011-12 FY 2012-13
Last TO Petition Commissi
on Last TO Petition
Commis
sion Last TO Petition
Commissi
on
ETPS 490 505 505 851 744 744 680 785 610
TTPS 2718 2648 2648 7018 7262 7262 6938 7002 7620
MTPS 2312 2402 2402 6234 6279 6279 5960 5655 5684
NCTPS 1713 1868 1868 4621 4301 4301 4391 4361 4634
TGTPS 254 271 271 650 660 660 611 674 682
KGTPS 65 0 0 457 383 383 592 106 51
BBGTPS 22 39 39 44 29 29 58 5 0.41
VGTPS 221 302 302 1093 1027 1027 1207 792 879
Total 7795 8035 8035 20968 20685 20685 20437 19381 20160
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 91
June 2013
Hydro Generation Circles
3.36 In the last order Commission has approved the hydro generation excluding the
generation from Kadamparai PSHES. Also, Commission has considered the net
energy available on account of Kadamparai PSHES in FY 2010-11 and FY 2011-12.
3.37 TANGEDCO as well in line with Commission’s order has filed the actual generation
in FY 2010-11 (From November 2010) and FY 2011-12 without considering the
generation from Kadamparai PSHES. For projecting the hydro generation for FY
2012-13, TANGEDCO has assumed a PLF of 25%.
3.38 The hydro generation approved by the Commission and filed by TANGEDCO is
tabulated below.
Table 16:Comparison between hydro generation approved in last order with TANGEDCO filing – in
MUs
Name of the
power plant FY 2010-11 FY 2011-12 FY 2012-13
Last TO Petition Last TO Petition Last TO Petition
Net Hydel Gen. on
account of hydro
plants excluding
Kadamparai
1881 2175 4701 4823 5242 3544
3.39 The PLFs and auxiliary consumption provided by TANGEDCO were not in line with
the net generation submitted for FY 2010-11 to FY 2012-13. In response to data gaps
TANGEDCO has revised the PLFs and auxiliary consumption for its hydro
generating circles corresponding to net generation.
Table 17: Revised PLFs and auxiliary consumption for hydro generation circles submitted by
TANGEDCO
Name of the
power plant
Revised PLFs Auxiliary Consumption
2010-11 2011-12 2010-11 2011-12
Erode 31.01% 35.74% 0.53% 0.55%
Kundah 33.69% 33.70% 0.53% 0.50%
Tirunelveli 29.22% 31.31% 0.53% 0.48%
3.40 In reply to additional information asked for, TANGEDCO submitted that the actual
generation excluding Kadamparai PSHES in FY 2012-13 was 2576 MUs. It can be
observed that the hydro generation in FY 2012-13 was significantly lower than
Commission approved generation of 5242 MUs. TANGEDCO submitted that this
significant reduction in hydro generation is due to less rainfalls resulting into drought
in FY 2012-13.
3.41 Based on the submissions made and the approach adopted in the last tariff order,
Commission is accepting the submission of TANGEDCO for the purpose of energy
availability.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 92
June 2013
Table 18: Summary of energy availability – Hydro generation circles – in MUs
Name of the power plant FY 2010-11 FY 2011-12 FY 2012-13
Last
TO
Petitio
n
Commiss
ion
Last
TO
Petitio
n
Commiss
ion
Last
TO
Petitio
n
Commiss
ion
Net Hydel Gen. on account
of hydro plants excluding
Kadamparai
1881 2175 2175 4701 4823 4823 5242 3544 2576
3.42 For Kadamparai PSHES, in the last tariff order Commission has approved the
additional energy required. Accordingly, TANGEDCO has filed the additional energy
required for Kadamparai PSHES based on actual energy requirement for FY 2010-11
and FY 2011-12.
Table 19: Kadamparai Generation and power consumption – in MUs
Particulars FY 2010-11 (From Nov
2010)
FY 2011-12 FY 2012-13
Last TO Petition Last TO Petition Last TO Petition
Kadamparai - Gen 237 290 489 506 533
Kadamparai – Pump mode 255 332 508 534 561
Net Energy Required 18 42 19 28 31 28
3.43 TANGEDCO has filed the additional energy required for Kadamparai PSHES based
on actual energy requirement for FY 2010-11 and FY 2011-12 and projected the
energy requirement for FY 2012-13 based on Commission’s methodology. In
response to additional information sought for, TANGEDCO has provided the actual
energy requirement for Kadamparai PSHES for FY 2012-13. Based on the submission
Commission is accepting the additional energy requirement for Kadamparai PSHES.
Table 20: Kadamparai Generation and power consumption – in MUs
Particulars FY 2010-11 (From Nov
2010)
FY 2011-12 FY 2012-13
Petition Commission Petition Commission Petition Commission
Additional energy
required for Kadamparai
PSHES 42 42 28 28 28 26
Wind Generation
3.44 The Commission in Previous Tariff Order approved net generation of 13 MU for FY
2010-11 and 11 MU in FY 2011-12 and in FY 2012-13 corresponding to 17.55 MW
installed capacity of wind mills owned by TNEB.
3.45 TANGEDCO in its Petition submitted that it has an installed capacity of 17.55 MW
and the net available energy from Wind Mills from FY 2010-11 to FY 2012-13 as
submitted by TANGEDCO is tabulated below:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 93
June 2013
Table 21: Net Energy available from wind in MUs - TANGEDCO Submission
Particulars FY 2010-11 FY 2011-12 FY 2012-13
Wind Generation 1 12 28
3.46 Commission has considered the actual wind energy generation for FY 2010-11 and
FY 2011-12 as submitted by TANGEDCO.
3.47 For FY 2012-13, in response to additional information required, TANGEDCO has
provided the details of energy generation from its own wind mills and the same has
been considered by the Commission.
Table 22: Energy available from wind mills in FY 2010-11 – November to March (MUs)
Particulars Last order Petition Commission
Wind Generation 5 1 1
Table 23: Energy available from wind mills in FY 2011-12 (MUs)
Particulars Last order Petition Commission
Wind Generation 11 12 12
Table 24: Energy available from wind mills in FY 2012-13 (MUs)
Particulars Last order Petition Commission
Wind Generation 11 28 13
New Generating Stations
3.48 In the last tariff order, for new upcoming units, i.e., NCTPS (Stage-II, Unit-1 and 2)
and MTPS (Stage-III), the Commission considered PLF as 80% during FY 2012-13 in
accordance with Clause-37 of TNERC Tariff Regulations, 2005. In addition
Commission has approved the auxiliary consumption of 8.50% for NCTPS stage –II
and 9.00% for MTPS stage III.
3.49 Commission has approved generation from new thermal stations considering CoD of
31st March 2012 for MTPS Stage III, 15
th June 2012 for NCTPS Stage-II (unit 2) and
15th October 2012 for NCTPS stage-II (unit 1).
3.50 However, these units did not achieve commissioning as envisaged in the last tariff
order. TANGEDCO in its Petition has submitted revised CoD for these stations as 1st
March 2013 for MTPS Stage III, 1st April 2013 for NCTPS Stage-II (unit 2) and 1
st
May 2013 for NCTPS stage-II (unit 1).
3.51 TANGEDCO has stated the following reasons for delay in commission of these new
stations
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 94
June 2013
MTPS – Stage III (Unit-1)
i. Commissioning was delayed due to delay in coal handling, ash handling,
milling system and bunkers erection, etc. The contract has been extended up to
31st March 2013 in order to facilitate the commissioning.
ii. The unit was synchronized with oil on 4th May 2012 and achieved a full load
capacity of 608 MW on 11th October 2012. The initial operation of the unit
was under progress from 23rd November 2012 to 04th December 2012.
However the unit was under forced shut down from 04th December 2012 to
attend to few technical problems that were encountered during the period of
initial operation.
NCTPS – Stage II (Unit-1 & 2)
i. Commissioning was delayed due to delay in Coal Handling System, Cooling
water system, Ash handling system etc.
3.52 Though TANGEDCO has submitted a revised CoD of MTPS stage III to be 1st March
2013 in its petition and projected 236 MUs, the unit did not achieve commissioning.
Accordingly Commission has not considered any energy availability from these new
generating stations in FY 2012-13:
Table 25: Energy availability on firm basis in FY 2012-13 from new thermal stations - in MUs
Name of the Power Station Last order Petition Commission
MTPS – Stage III 3428 236 0
NCTPS – Stage II (Unit-1) 1760 0 0
NCTPS – Stage II (Unit-2) 3030 0 0
Note: Infirm power already included in the existing thermal stations
Power Purchase from other sources
3.53 TANGEDCO in its Petition has included power purchase quantum from the following
sources:
i. Central Generating Stations (CGS)
ii. Independent Power Producers (IPPs)
iii. Captive/Cogeneration and Non-Conventional energy sources
iv. Other sources such as Trading – Bilateral & Exchange, NTPC-NVVN and UI
3.54 In the last tariff order Commission has estimated the energy availability for FY 2010-
11 and FY 2011-12 based on the actual energy availability data submitted by
TANGEDCO upto December 2011. For the new additions of CGS the Commission
estimated the energy availability based on the CoD dates submitted by TANGEDCO.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 95
June 2013
3.55 Similarly in case of IPPs, captive and non conventional energy sources, Commission
adopted the following approach for estimation of energy availability
i. Commission allowed the actual power purchase from IPPs in FY 2010-11 and FY
2011-12 while in FY 2012-13 Commission has allowed the power purchase from
IPPs based on merit order dispatch
ii. For estimating the energy availability from captive and non conventional energy
sources, Commission has not considered wheeling units and has considered only
the energy directly purchased from Wind, CPP, Cogeneration and Biomass plants.
3.56 TANGEDCO in its current Petition has submitted the energy availability for FY
2010-11 and FY 2011-12 based on actual energy purchased and in accordance with
the approach adopted by the Commission in its last order. For FY 2012-13,
TANGEDCO has projected the energy availability based on energy availability during
the first half of FY 2012-13.
Table 26: Energy availability from other sources as submitted by TANGEDCO – in MUs
Name of the Power Station FY 2010-11 FY 2011-12 FY 2012-13
Central Generating Stations 8528 20630 22755
IPPs 2923 5731 5633
Captive and Non conventional
energy sources 498 10040 8347
Trading, UI and NTPC-NVVN 5643 7618 10510
Total 17592 44018 47245
3.57 On preliminary scrutiny of the actual power purchase data from Captive sources,
NCES and Trading, it was observed that the wheeling units adjustment was not done
properly in FY 2011-12. The wheeling units on account of captive consumers and
wind consumers have been accounted in purchase from trading. In response to data
gaps, TANGEDCO submitted the revised power purchase from these sources after
correctly accounting for wheeling units based on audited accounts.
Table 27: Revised submission of TANGEDCO after adjusting wheeling units (FY 2011-12) - in MUs
Source Initial
Submission
Revised
Submission
Captive 2778 557
Wind 5893 5711
Trading (Bilateral) 5174 7395
3.58 Commission is accepting the submission of energy availability of TANGEDCO for
FY 2010-11 and FY 2011-12 based on the fact that submission for FY 2010-11 is
based on energy purchase and for FY 2011-12 the numbers were revised as per the
approach adopted by Commission in its last order.
3.59 In response to additional information required, TANGEDCO has submitted the
provisional estimate of actual purchase from these sources in FY 2012-13.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 96
June 2013
Table 28: Provisional estimate of actual power purchase in 2012-13 by TANGEDCO - in MUs
Name of the Power Station FY 2012-13
Central Generating Stations 21567
IPPs 5971
Captive and Non conventional
energy sources 9195
Other sources 7051
Total 43785
3.60 For FY 2012-13, Commission approves the energy availability based on provisional
estimate of actual power purchase data submitted by TANGEDCO. The summary of
power purchase from other sources approved by the Commission is tabulated below:
Table 29: Summary of approved energy availability from other sources – in MUs
Name of the Power Station Last Order Petition Commission
FY 2010-11
Central Generating Stations 8413 8528 8528
IPPs 2894 2923 2923
Captive and Non conventional energy
sources 2851 498 498
Other sources 4992 5644 5644
Total 19150 17593 17593
FY 2011-12
Central Generating Stations 20875 20630 20630
IPPs 5982 5731 5731
Captive and Non conventional energy
sources 6965 10040 7637
Other sources 10150 7618 9838
Total 43972 44018 43836
FY 2012-13
Central Generating Stations 26436 22755 21567
IPPs 7020 5633 5971
Captive and Non conventional energy
sources 7259 8347 9195
Other sources 2000 10510 7051
Total 42715 47245 43785
Total energy available from all sources
3.61 Based 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:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 97
June 2013
Table 30: Summary of energy available from all sources in FY 2010-11 (From November 2010) - in MUs
Source Last Tariff Order Petition Commission
Own Generating Stations
Coal Based Power Plants
Ennore Thermal Power Station 490 505 505
Tuticorin Thermal Power Station 2718 2648 2648
Mettur Thermal Power Station 2312 2402 2402
North Chennai Thermal Power Station 1713 1868 1868
Sub Total 7232 7424 7424
Gas Based Power Plants
Tirumokottai Kovilkalappal Gas Power Plant 254 271 271
Kuttalum Gas Power Plant 65 0 0
Vallathur Gas Power Plant 221 302 302
Basin Bridge Gas Power Plant 22 39 39
Sub Total 563 611 611
Hydro Generation Circles*
Erode Hydro Generation Circle
1881 2175 2175 Kundah Hydro Generation Circle
Tirunelveli Hydro Generation Circle
Kadamparai Hydro generation circle
Wind Mills 5 1 1
Sub Total - Existing Stations 9681 10211 10211
New Stations
North Chennai TPS Stage - II 0
Mettur Stage - III 0
Ennore Expansion 0
Sub Total 0 0 0
Total - Own Generation 9681 10211 10211
Central Generation Stations
NTPC SR (I&II) 1683 1658 1658
NTPC SR III 427 449 449
NLC TS - I 1278 1213 1213
NLC TS - II 1268 1244 1244
NLC TS I Expansion 629 631 631
NTPC Talcher 1527 1542 1542
NTPC Simhadri 0 0 0
MAPS 583 591 591
KAIGA 358 454 454
NTPC Kayakulum 356 343 343
NTPC ER 306 402 402
NTPC Dadri 0
NTPC Vallur 0
Kudankulum
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 98
June 2013
Source Last Tariff Order Petition Commission
NLC TS - II Expansion 0
NLC - Tuticorin 0
Sub Total 8413 8528 8528
IPPs
GMR 365 393 393
Samalpatti 158 179 179
PPN 1040 1072 1072
Madurai 147 168 168
ST-CMS 689 606 606
ABAN 342 357 357
Penna 154 148 148
Sub Total 2894 2923 2923
CPP and Renewable Energy Sources
Captive 192 218 218
Wind ** 2193 -148 -148
Biomass 46 38 38
Cogeneration 415 388 388
Solar 1 2 2
Sub Total 2851 498 498
Other Sources
Trading - Bilateral & Exchange 4392 4703 4703
UI 600 759 759
NTPC NVVN
182 182
Sub Total 4992 5644 5644
Total - Other Power Purchase 19150 17593 17593
Grand Total 28832 27804 27804
*Net Hydro generation is shown without considering power generated from
Kadamparai PSHES
**Actual wind generation shown is net of wheeling unit adjustment. Negative
indicates that wheeling units drawn are more than the actual wind generation from
November 2010 to March 2011.
Table 31: Summary of energy available from all sources in FY 2011-12 (in MUs)
Source Last Tariff Order Petition Commission
Own Generating Stations
Coal Based Power Plants
Ennore Thermal Power Station 851 744 744
Tuticorin Thermal Power Station 7018 7262 7262
Mettur Thermal Power Station 6234 6279 6279
North Chennai Thermal Power Station 4621 4301 4301
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 99
June 2013
Source Last Tariff Order Petition Commission
Sub Total 18724 18587 18587
Gas Based Power Plants
Tirumokottai Kovilkalappal Gas Power Plant 650 660 660
Kuttalum Gas Power Plant 457 383 383
Vallathur Gas Power Plant 1093 1027 1027
Basin Bridge Gas Power Plant 44 29 29
Sub Total 2244 2099 2099
Hydro Generation Circles*
Erode Hydro Generation Circle
4701 4823 4823 Kundah Hydro Generation Circle
Tirunelveli Hydro Generation Circle
Kadamparai Hydro generation circle
Wind Mills 11 12 12
Sub Total - Existing Stations 25689 25521 25521
New Stations
North Chennai TPS Stage - II
Mettur Stage - III
Ennore Expansion
Sub Total 0 0 0
Total - Own Generation 25689 25521 25521
Central Generation Stations
NTPC SR (I&II) 4139 4106 4106
NTPC SR III 1105 1048 1048
NLC TS - I 3066 3146 3146
NLC TS - II 3242 3167 3167
NLC TS I Expansion 1609 1526 1526
NTPC Talcher 3690 3622 3622
NTPC Simhadri 328 468 468
MAPS 1499 1604 1604
KAIGA 1107 1171 1171
NTPC Kayakulum 205 205 205
NTPC ER 885 465 465
NTPC Dadri 0 101 101
NTPC Vallur
Kudankulum
NLC TS - II Expansion
NLC - Tuticorin
Sub Total 20875 20630 20630
IPPs
GMR 962 858 858
Samalpatti 351 292 292
PPN 1483 1491 1491
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 100
June 2013
Source Last Tariff Order Petition Commission
Madurai 333 282 282
ST-CMS 1711 1688 1688
ABAN 776 760 760
Penna 366 360 360
Sub Total 5982 5731 5731
CPP and Renewable Energy Sources
Captive 575 2778 557
Wind 5130 5893 5711
Biomass 115 73 73
Cogeneration 1135 1285 1285
Solar 10 11 11
Sub Total 6965 10040 7637
Other Sources
Trading - Bilateral & Exchange 9400 6206 8427
UI 750 718 718
NTPC NVVN 0 694 694
Sub Total 10150 7618 9838
Total - Other Power Purchase 43972 44018 43836
Grand Total 69661 69540 69357
*Net Hydro generation is shown without considering power generated from
Kadamparai PSHES
Table 32: Summary of energy available from all sources in FY 2012-13 (in MUs)
Source Last Tariff Order Petition Commission
Own Generating Stations
Coal Based Power Plants
Ennore Thermal Power Station 680 785 610
Tuticorin Thermal Power Station 6938 7002 7620
Mettur Thermal Power Station 5960 5655 5684
North Chennai Thermal Power Station 4391 4361 4634
Sub Total 17969 17804 18547
Gas Based Power Plants
Tirumokottai Kovilkalappal Gas Power Plant 611 674 682
Kuttalum Gas Power Plant 592 106 51
Vallathur Gas Power Plant 1207 792 879
Basin Bridge Gas Power Plant 58 5 0
Sub Total 2468 1577 1613
Hydro Generation Circles*
Erode Hydro Generation Circle 5242 3544 2576
Kundah Hydro Generation Circle
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 101
June 2013
Source Last Tariff Order Petition Commission
Tirunelveli Hydro Generation Circle
Kadamparai Hydro generation circle
Wind Mills 11 28 13
Sub Total - Existing Stations 25690 22954 22749
New Stations
North Chennai TPS Stage - II 4790
Mettur Stage - III 3428 236 0
Ennore Expansion
Sub Total 8218 236 0
Total - Own Generation 33908 23190 22749
Central Generation Stations
NTPC SR (I&II) 4164 4164 4149
NTPC SR III 1125 1074 982
NLC TS - I 3066 2937 3189
NLC TS - II 3272 3450 3,291
NLC TS I Expansion 1624 1749 1629
NTPC Talcher 3705 3567 3405
NTPC Simhadri 1415 599 1079
MAPS 1508 1986 1775
KAIGA 1178 1278 1261
NTPC Kayakulum 0 0 0
NTPC ER 897 342 319
NTPC Dadri 0 123 0
NTPC Vallur 1448 910 488
Kudunkulum 1716 178 0
NLC TS - II Expansion 1318 397 0
NLC - Tuticorin
Sub Total 26436 22755 21567
IPPs
GMR 495 615 610
Samalpatti 575 273 329
PPN 2395 1541 1785
Madurai 575 285 357
ST-CMS 1795 1794 1665
ABAN 810 366 850
Penna 375 759 375
Sub Total 7020 5633 5971
CPP and Renewable Energy Sources
Captive 582 705 595
Wind 5408 5067 7145
Biomass 56 783 11
Cogeneration 1202 1771 1428
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 102
June 2013
Source Last Tariff Order Petition Commission
Solar 11 21 16
Sub Total 7259 8347 9195
Other Sources
Trading - Bilateral & Exchange 2000 9816 6,935
UI
81
NTPC NVVN ** 0 694 35
Sub Total 2000 10510 7051
Total - Other Power Purchase 42715 47245 43785
Grand Total 76623 70434 66534
*Net Hydro generation is shown without considering power generated from
Kadamparai PSHES
**From 2012-13, the energy availability shown under NTPC NVVN corresponds to
bundled solar power
Renewable Purchase Obligation
3.62 In Para 8.18.4 of the comprehensive tariff order on wind energy (OrderNo.1 of 2009,
dated 20-03-2009), the Commission has fixed the Renewable Purchase Obligation
(RPO) at a minimum of 14% for 2010-11 in the area of distribution licensee in
accordance to section 86 (1) (e) of the Electricity Act 2003.
Section 86 (1) (e) of The Electricity Act, 2003
“86. (1) The State Commission shall discharge the following functions, namely: -
(e) promote cogeneration and generation of electricity from renewable sources of
energy by providing suitable measures for connectivity with the grid and sale of
electricity to any person, and also specify, for purchase of electricity from such
sources, a percentage of the total consumption of electricity in the area of a
distribution license;”
3.63 As regards FY 2011-12, the Commission in the first Amendment to 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.
3.64 As regards target for RPO in 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.”
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 103
June 2013
3.65 For 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.
3.66 Accordingly, the Commission has calculated the quantum to be purchased through
RPO. The details of power purchase quantum in FY 2010-11, FY 2011-12 and FY
2012-13 is tabulated below. The Commission has applied the above mentioned
percentages of RPO from FY 2011-12 to FY 2012-13 on the energy requirement
determined for respective years in this Order. For FY 2010-11, Commission has
determined the RE requirement based on the energy requirement in the area of
distribution licensee for the whole year after considering TNEB (April 2010 to
October 2010) and TANGEDCO (November 2010 – March 2011) audited accounts
for FY 2010-11
Table 33: Renewable energy purchase requirement from FY 2010-11 to FY 2012-13 - in MUs
Particulars FY 2010-11 FY 2011-12 FY 2012-13
Energy Requirement 73555 69357 66534
RPO% from all sources 14%
9% 9%
RPO% from solar 0.05% 0.05%
Purchase from renewable requirement 10298 6242 5988
3.67 The energy purchased through Renewable Energy sources for FY 2010-11 (including
wheeling units) and for FY 2011-12 to FY 2012-13 (net of wheeling units) on the
basis of quantum of energy approved through various sources in this Order is
tabulated below:
Table 34: RPO Compliance of TANGEDCO for the first control period
Particulars FY 2010-11 FY 2011-12 FY 2012-13
Wind 8707 5711 5820*
Small Hydro 212 200 113
Cogeneration 997 1285 1428
Biomass 110 73 11
Own wind generation 12 12 13
Total except solar 10038 7281 8710
Solar 2 11 16
NVVN Bundled Solar Power 0 0 35
Total including solar 10222 7986 8761
RPO % actually achieved for all sources
except solar 10.50% 11.10%
Solar
0.02% 0.08%
RPO% actually achieved for all sources 13.90% 10.52% 11.18%
*The wind generation submitted by TANGEDCO includes power procured through REC-APPC mechanism.
However for RPO Compliance, Commission has arrived at the wind generation considering the percentage
capacity registered under sale to board and not under REC-APPC mechanism
3.68 From the above table it can be observed that TANGEDCO has met the target of RPO,
14% in FY 2010-11 based on the total Renewable energy utilised in the area of the
licensee and for FY 2011-12 and FY 2012-13 has met a revised target of 9% net of
wheeling units.
3.69 TANGEDCO has also met the target of 0.05% of solar RPO during FY 2012-13.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 104
June 2013
Energy Balance and Distribution Loss
3.70 Commission in its first order on Multi Year Tariff determination dated 31st July 2010
has approved transmission and distribution losses together and has set a loss reduction
strategy for reduction of T&D losses.
Table 35: T&D Loss trajectory set by the Commission for the first control period
Particulars 2010-11 2011-12 2012-13
Loss level in % 17.60 17.20 16.80
3.71 In the last tariff order Commission has re-estimated the T&D losses considering
energy sales without wheeling and additional power supply required for Kadamparai
pump mode.
3.72 In accordance to Commission’s approach TANGEDCO in its Petition has submitted
the energy balance and actual T&D losses. The energy balance and T&D loss
submitted by TANGEDCO in its Petition is given below:
Table 36: Energy Balance submitted by TANGEDCO for the first control period
Particulars FY 2010-11 FY 2011-12 FY 2012-13
Power Purchase from Own Generation 10212 26027 23694
Power Purchase from Other Sources 17413 43607 46845
Total Power Purchase 27625 69633 70540
T&D Loss (MU) 6017 15322 15237
T&D Loss (%) 21.78% 22.00% 21.60%
Total Sales 21608 54311 55303
Sales to Consumers 21276 53777 54742
Power Supply to Kadamparai 332 534 561
3.73 It is pertinent to mention that Commission has initiated the Suo-Moto proceedings
against TANGEDCO for non compliance in the matter of T&D loss determination as
directed by it and the Hon’ble APTEL. The Commission has in the absence of
scientific data for loss determination, fixed the T&D loss level at 16.4% for FY 2013-
14 and has clarified that it shall assume loss percentage at 16% and 15.6% for FY
2014-15 and FY 2015-16 respectively, if the necessary data is not furnished by
TANGEDCO.
The relevant extracts of that order are given below:
“The Commission in its Order No.1 of 2012 dated 30-3-2012, had adopted the T&D
loss of 17.6% for 2010-11 and 17.2% for 2011-12. Commission adopted T&D loss of
16.80% for 2012-13. By the same analogy, T&D loss of 16.40% is approved for 2013-
14. As and when the TANGEDCO comes out with the scientific study on T&D loss as
specified in the Regulations, the Commission may review and refix the T&D loss
norms subject to prudent check. If no study report is submitted for consideration of
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 105
June 2013
the Commission, T&D loss for FY 2014-15 shall be reckoned as 16% and for FY
2015-16 shall be reckoned as 15.6%. Out of the above T&D loss limit, the distribution
loss shall be arrived at after deducting the transmission loss as approved by the
Commission in the respective tariff order.
3.74 Hence, Commission arrived at the energy requirement for TANGEDCO considering
the approved sales and losses as per 31st July 2010 order and Suo-Moto order on
distribution losses dated 4th June 2013. Also, from this order Commission is treating
the distribution loss and transmission loss separately. For arriving at the sales below
33 kV, at 110 kV and at 230 kV, Commission has relied on the percentages arrived
based on the data provided by TANGEDCO. The energy balance in distribution
periphery and energy required by TANGEDCO for the first control period are
tabulated below. The energy balance is shown considering total energy wheeled in the
distribution system while energy requirement has been arrived considering approved
sales and losses.
Table 37: Energy Balance in distribution periphery
Parameter FY 2010-11 FY 2011-12 FY 2012-13
Sale to Consumers below 33 kV (MU) 19868 50366 47338
Additional Power to Kadamparai (MU) 42 28 26
Wheeled Units below 33 kV 2221 5780 6724
Distribution Loss (%) 14.82% 14.50% 14.10%
Distribution Loss (MU) 3850 9527 8878
Energy Input at Distribution periphery (MU) 25982 65701 62966
Table 38: Energy required by TANGEDCO at TN Periphery during the first control period
Parameter FY 2010-11 FY 2011-12 FY 2012-13
Sale to Consumers below 33 kV (MU) 19868 50366 47338
Additional Power to Kadamparai (MU) 42 28 26
Distribution Loss (%) 14.82% 14.50% 14.10%
Distribution Loss (MU) 3464 8546 7774
Energy Input at Distribution periphery (MU) 23374 58940 55138
110 kV Sales (MU) 983 2892 2718
110 kV Losses (%) 1.94% 1.94% 1.90%
110 kV Losses (MU) 482 1223 1121
Energy Input at 110 kV 24839 63056 58977
230 kV Sales (MU) 426 680 639
230 kV Losses (%) 0.84% 0.76% 0.80%
230 kV Losses (MU) 214 488 481
Energy input at TN Periphery 25478 64224 60097
3.75 Commission reiterates its direction given to TANGEDCO in order on Suo-Moto
Petition on T&D losses.
a) TANGEDCO shall conduct a third party scientific study to arrive at the reasonable consumption of unmetered services and thereby the technical
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 106
June 2013
losses of their network in the following manner.
i. DT metering with AMR facility shall be provided atleast to one feeder
feeding agricultural services predominantly in each circle of the
TANGEDCO. Similar metering shall be installed/made available at the
Sub-Station end of the 11KV / 22KV feeders.
ii. Similar arrangements may be made to measure the consumption of Hut
Services.
iii. To calculate the LT line loss, similar DT metering and feeder metering
shall be done atleast in one feeder which has considerable LT network
with 100% consumer metering.
iv. The online measurement taken for a period of one year shall be used to
arrive at the voltage wise T&D losses for the respective FY. Such data
shall be submitted once in every 2 months to the Commission starting from
October 2013.
3.76 The Commission observed that the actual T&D loss for FY 2010-11, FY 2011-12 and
FY 2012-13 are more than the approved losses. Commission’s approach on additional
cost incurred by TANGEDCO on account of increased T&D losses has been
discussed later in this Chapter.
Fixed Expenses
3.77 In this section, expenses related to fixed cost for the first control period (FY 2010-11
and FY 2012-13) will be reviewed and approved by the Commission. The fixed
expenses are broadly divided into the following heads:
i. Operation and Maintenance Expenses
ii. Depreciation
iii. Interest on long term loans
iv. Return on Equity
v. Interest on working capital loans
vi. Other debits
Operation and Maintenance Expenses
3.78 The O&M expenses approved by the Commission in its last tariff order and claimed
by TANGEDCO in its current Petition are tabulated below:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 107
June 2013
Table 39: O&M expenses approved by Commission in last tariff order and claimed in this Petition (Rs.
Cr.)
Plant
As per last year tariff order Current Petition
2010-11 2011-12 2012-13 2010-11 2011-12 2012-13
Ennore TPS 39.63 98.91 102.86 40.73 109.34 120.48
Tuticorin TPS 44.70 111.57 116.03 60.92 190.72 208.29
Mettur TPS 34.51 86.13 89.57 48.08 102.59 115.05
North Chennai TPS 50.58 126.24 131.29 46.72 116.00 128.37
Total Thermal 169.41 422.85 439.76 196.44 518.66 572.20
Tirumakottai GTPS 3.10 7.74 8.05 2.73 10.06 10.95
Kuttalam GTPS 8.61 17.04 17.72 0.82 7.14 7.78
Basin Bridge GTPS 2.49 6.22 6.47 2.72 5.69 6.32
Valuthur GTPS 3.45 8.62 8.96 21.06 7.95 8.88
Total Gas 17.66 39.63 41.21 27.34 30.84 33.93
Erode HEP 14.34 35.79 37.22 11.10 26.52 29.83
Kadamparai HEP 8.03 20.03 20.83 10.88 22.05 24.32
Kundah HEP 16.13 37.34 38.83 15.18 35.91 39.86
Tirunelveli HEP 9.70 24.22 25.19 9.66 24.19 27.50
Total Hydro 48.19 117.38 122.07 46.83 108.67 121.50
Total Generation 235.26 579.86 603.04 270.60 658.16 727.63
Total Distribution 1092.94 2727.99 2837.11 1388.30 3652.49 3690.85
Total TANGEDCO 1328.20 3307.85 3440.15 1658.90 4310.66 4418.48
3.79 From the above table it can be observed that TANGEDCO in this true-up and
performance review exercise has sought for Commission’s approval for the increase
in O&M expenses ranging from 25% to 30% for the first control period.
3.80 In response to data gaps and during discussions held with TANGEDCO officials, it
was clarified that one of the reasons for this variation is due to segregation of
accounts between TANGEDCO and TANTRANSCO
3.81 It is pertinent to mention that GoTN vide G.O.(Ms) No 114 Energy Dept., dated 08-
10-2008 have accorded in principle approval for the reorganization of TNEB.
Pursuant to this G.O. TANGEDCO and TANTRANSCO were incorporated on 1st
December 2009 and started functioning as such w.e.f 1st November 2010. Hence,
TANGEDCO and TANTRANSCO have been maintaining separate accounts from
then onwards.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 108
June 2013
3.82 Prior to this there were separate accounts for each generating station. However, for
transmission and distribution expenses consolidated accounts were maintained.
TANGEDCO in its last Petition had segregated the O&M expenses under
transmission and distribution heads with some assumptions. In previous Petition of
TN power utilities, Employee expenses and A&G expenses were bifurcated between
Distribution and Transmission business based on number of employees while R&M
expenses have been bifurcated based on GFA.
3.83 However TN Power utilities have clarified in their current MYT Petition that they
have submitted the actual expenses based on their audited accounts. Also,
TANGEDCO in its Petition has submitted that it was unbundled from the erstwhile
TNEB only on 31st Oct 2010 and it is difficult for it to derive the O&M expenses
pertaining to Transmission activities for the last 5 years. Hence, it has projected the
expenses from FY 2012-13 based on the expenses for the FY 2010-11 and FY 2011-
12
3.84 It is pertinent to mention that in the process of the approval of O&M expenses, the
Commission will be guided by the following regulations
Regulation – 14 of TNERC Tariff Regulations
“14. Multiyear tariff
(5) All the uncontrollable costs shall be allowed as pass through in tariff and
the uncontrollable costs will include the following:
(a) Cost of fuel;
(b) Costs on account of inflation;
(c) Taxes and duties; and
(d) Variation in power purchase unit cost from base line level
including on account of hydro-thermal mix in case of force majure and
adverse natural events like drought
(6) The Operation and Maintenance cost shall be controllable cost and be
based on escalation indices or other mode determined during determination
of tariff for the base year.
Regulation-25 of TNERC Tariff Regulations:
“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
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 109
June 2013
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.
…”
3.85 In following para’s each component of O&M expenses will be discussed in detail and
Commission’s approval for the same is accorded.
Employee Expenses
3.86 TANGEDCO has filed the actual employee expenses based on audited accounts for
FY 2010-11 and based on provisional accounts for FY 2011-12. It has then projected
the employee costs based on the following assumptions:
i. Basic salary and grade pay have been considered with an escalation of 5% for
FY 2013-14 to FY 2014-15 and 10% for FY 2012-13 and FY 2015-16 due to
wage revision.
ii. Escalation of DA rate at 15% per annum
iii. Other expenses such as surrender leave, terminal benefits, pension schemes
etc. at 10%.
3.87 On preliminary scrutiny of employee expenses proposed by TANGEDCO it was
observed that there is significant increase in employee expenses corresponding to
TANGEDCO while there is decrease in employee costs pertaining to
TANTRANSCO. During the discussions with TANGEDCO officials it was
mentioned that in the last petition the employee expenses submitted under distribution
and transmission petition was based on certain assumptions due to unavailability of
separate accounts. However, they have clarified that all the employee expenses are
being currently accounted under respective audited accounts except for terminal
benefits. TANGEDCO has stated that entire pension payments are being made by
TANGEDCO on behalf of TNEB and hence the terminal benefits pertaining to
TANTRANSCO are also included in TANGEDCO audited accounts.
3.88 This fact was also mentioned in the audited accounts for FY 2011-12 of TANGEDCO
under point 9 of “Statement-5: Notes to Accounts” and is reproduced below:
“The pension payments of existing pensioners of erstwhile TNEB are being paid by
TANGEDCO since no segregation of pensioner’s liability has been finalized in the
provisional transfer scheme. The payments of pension to those who have retired from
01.10.2010 to 31.03.2013 are also made by TANGEDCO and out of it the
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 110
June 2013
TANTRANSCO’s share has not been determined so far. As and when it’s ascertained,
the company has to claim the payment from TANTRANSCO.”
3.89 Hence for regulatory accounting and approval, Commission in consultation with
TANGEDCO and TANTRANSCO officials have bifurcated the terminal benefits
based on the employee ratio of 6:1 (TANGEDCO to TANTRANSCO). In this true-up
Commission will approve the terminal benefits expenses for TANGEDCO only to the
extent of its liability.
Table 40: Re-estimation of terminal benefits of TANGEDCO and TANTRANSCO (Rs. Cr.)
Parameter
Actual figures as per Audited
Accounts
Commissions Re-Estimate –
(Based on 6:1 ratio)
FY 2011 FY 2012 FY 2011 FY 2012
Terminal Benefits –
TANGEDCO 601.50 1,591.55 523.97 1,383.09
Terminal Benefits –
TANTRANSCO 9.79 22.06 87.33 230.52
Total 611.29 1,613.61 611.29 1,613.61
Table 41: Segregation of Terminal benefits between generating stations and distribution business (Rs.
Cr.)
Year
TANGEDCO
Claimed for Own
Generation Stations in
MYT Petition
Approved for
Distribution Business
FY 2010-11 523.97 8.93 515.04
FY 2011-12 1,383.09 23.13 1,359.96
3.90 The employee expenses after accounting for terminal benefits have only increased
marginally for TANGEDCO except for MTPS and TTPS compared to Commission’s
approved employee expenses. For these two stations in the last order Commission has
approved the employee expenses based on five year average to arrive at the employee
expense for base year. Commission is of the view that averaging the last five years
(FY 2006 to FY 2010) expense had resulted in approving the employee expense for
these stations equivalent to the median year (i.e. for FY 2008).
3.91 Hence Commission is accepting the actual employee expenses for FY 2010-11 and
FY 2011-12 as submitted by TANGEDCO for all the generating stations and
distribution business for the reasons stated above.
3.92 Though TANGEDCO has proposed escalations of more than 4% for various
components of employee expenses for FY 2012-13, Commission in accordance with
its regulation has escalated the approved employee expenses of FY 2011-12 at 4% on
all components except for DA for arriving at the employee expenses for FY 2012-13.
However, if the proposed pay revision increase the employee expenses significantly,
as submitted by TANGEDCO, then TANGEDCO is required to quantify the impact
due to pay revision and submit to the Commission during the true-up exercise for FY
2012-13.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 111
June 2013
3.93 As per the TNERC Tariff Regulations increase in costs due to inflation is required to
be passed through in tariff. DA percentage notified by the GoTN is dependent on
inflation and hence increase in employee cost to the extent of DA variation will be
allowed as a pass through in tariff. Hence, the DA rates as notified by GoTN have
been used for estimating the dearness allowance instead of taking an escalation of 4%
as per TNERC Tariff Regulations.
3.94 The employee capitalization for FY 2012-13 of generating stations has been arrived
based on the percentage of employee expenses capitalized in FY 2010-11 and FY
2011-12. However, for distribution business the employee capitalization as per
audited accounts comes to 5%, which is on a lower side compared to historic trend.
Also, TANGEDCO has proposed a higher capitalization rate of 15% for FY 2012-13.
In view of these discrepancies Commission has relied on average employee
capitalization of 9% based on historical data.
Table 42: Estimation of average DA rate applicable for FY 2012-13
Year Eff. Date Rate of DA Months Avg Rate
2012-13
1/1/2012 65% 3
72.25% 1/7/2012 72% 6
1/1/2013 80% 3
3.95 Based on the above approach and methodology, the employee costs submitted by
TANGEDCO and approved by the Commssion is tabulated below:
Table 43: Approved employee expenses for FY 2010-11 (Rs. Cr.)
Plant Last Tariff Order Petition Commission
Ennore TPS 22.55 24.97 24.97
Tuticorin TPS 23.28 32.42 32.42
Mettur TPS 18.99 30.39 30.39
North Chennai TPS 23.67 23.32 23.32
Total Coal 88.49 111.09 111.09
Tirumakottai GTPS 1.49 1.21 1.21
Kuttalam GTPS 1.33 0.00 0.00
Basin Bridge GTPS 1.53 1.38 1.38
Valuthur GTPS 0.54 2.21 2.21
Total Gas 4.90 4.80 4.80
Erode HEP 11.94 9.74 9.74
Kadamparai HEP 6.13 7.36 7.36
Kundah HEP 9.28 9.85 9.85
Tirunelveli HEP 7.64 7.85 7.85
Total Hydro 34.98 34.80 34.80
Total Generation 128.38 150.68 150.68
Distribution 1,052.15 1,305.27 1,228.75
TANGEDCO 1,180.53 1,455.95 1,379.43
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 112
June 2013
Table 44: Approved employee expenses for FY 2011-12 (Rs. Cr.)
Plant Last Tariff Order Petition Commission
Ennore TPS 56.27 62.08 62.08
Tuticorin TPS 58.12 82.06 82.06
Mettur TPS 47.40 73.04 73.04
North Chennai TPS 59.09 50.49 50.49
Total Coal 220.88 267.67 267.67
Tirumakottai GTPS 3.73 3.91 3.90
Kuttalam GTPS 1.60 3.10 3.10
Basin Bridge GTPS 3.83 3.53 3.53
Valuthur GTPS 1.35 5.87 5.86
Total Gas 10.50 16.41 16.39
Erode HEP 29.79 22.88 22.88
Kadamparai HEP 15.29 15.08 15.08
Kundah HEP 19.96 24.50 24.50
Tirunelveli HEP 19.06 19.60 19.60
Total Hydro 84.10 82.06 82.06
Total Generation 315.48 366.13 366.12
Distribution 2626.16 3437.05 3206.77
TANGEDCO 2941.64 3803.19 3572.89
Table 45: Approved employee expenses for FY 2012-13 (Rs. Cr.)
Plant Last Tariff Order Petition Commission
Ennore TPS 58.52 71.19 65.94
Tuticorin TPS 60.44 94.40 91.46
Mettur TPS 49.30 84.09 81.52
North Chennai TPS 61.45 59.02 59.41
Total Coal 229.71 308.71 298.33
Tirumakottai GTPS 3.88 4.52 4.33
Kuttalam GTPS 1.66 3.56 2.31
Basin Bridge GTPS 3.98 4.03 3.90
Valuthur GTPS 1.40 6.68 6.56
Total Gas 10.92 18.80 17.09
Erode HEP 30.99 26.01 28.84
Kadamparai HEP 15.90 17.17 16.79
Kundah HEP 20.75 28.00 26.85
Tirunelveli HEP 19.82 22.40 21.79
Total Hydro 87.47 93.59 94.27
Total Generation 328.09 421.09 409.70
Distribution 2,731.21
3,447.65
3,360.21
TANGEDCO 3059.30 3868.74 3769.90
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 113
June 2013
Repair and Maintenance Expenses
3.96 On preliminary scrutiny, Commission has found that R&M expenses for few stations
such as VGTPS, ETPS, TTPS and TGTPS have increased significantly. In response to
data gaps, TANGEDCO has replied in a generic manner without giving any specific
reasons for increase in these expenses. In this context it is pertinent to mention that
the Commission is already allowing 0.5% of capital cost of generating assets for self
insurance and any abnormal increase in R&M expenses due to unforeseen reasons can
be met through this fund.
3.97 R&M expenses being completely a controllable expense and since TANGEDCO
could not substantiate the abnormal increase in R&M expenses with appropriate
reasons, Commission in this order is approving the R&M expenses as approved in the
last order except for generating stations such as TTPS, MTPS and VGTPS..
3.98 In the last order for TTPS, MTPS and VGTPS generating stations, Commission had
approved the R&M expenses in accordance to its Tariff Regulation by taking the
average R&M expenses of last five financial years i.e. from FY 2005-06 to FY 2009-
10 in order to arrive at the R&M expenses for the base year. In this process of
averaging the R&M expenses arrived will correspond to the median year i.e. FY
2007-08 and hence average expenses must be escalated at 4% year on year for
arriving at the R&M expenses for the base year FY 2010-11. Hence in this order
Commission is approving additional R&M expenses to these stations to the extent of
this correction.
3.99 In the previous order, Commission had approved the R&M expenses as claimed by
TANGEDCO. Also, historically the R&M expenses were varying erratically and it
may not be appropriate to take the average R&M expenses for the last five years.
Hence, Commission has approved the R&M expenses for KGTPS as claimed by
TANGEDCO based on actual expenditure incurred.
3.100 As already mentioned earlier, in the last Petition TANGEDCO and TANTRANSCO
have segregated the R&M expenses between distribution and transmission business
based on certain assumptions. However during review of current audited accounts it
has been observed that R&M expenses of TANTRANSCO have decreased while
R&M expenses of TANGEDCO have increased. It was also confirmed by
TANGEDCO during the discussion that no part of R&M expenses on account of
TANTRANSCO are being booked in TANGEDCO accounts. Hence, the variation in
expenses is only due to proper accounting practices adopted after unbundling and that
approach will continue in future.
3.101 Commission is of the view that ratio of R&M expenses approved for transmission and
distribution business may change but the total expenses cannot increase. Hence while
approving the R&M expenses for the distribution business, increase in R&M expenses
only to the tune of decrease in R&M expenses of TANTRANSCO compared to that
approved in last order has been allowed.
3.102 Based on the above approach, the R&M expenses submitted by TANGEDCO and
approved by the Commission is tabulated below:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 114
June 2013
Table 46: Approved R&M expenses for FY 2010-11 (Rs. Cr.)
Plant Last Tariff Order Petition Commission
Ennore TPS 13.36 14.34 13.36
Tuticorin TPS 13.26 24.30 14.91
Mettur TPS 10.90 12.82 12.27
North Chennai TPS 22.58 20.36 22.58
Total Coal 60.10 71.82 63.12
Tirumakottai GTPS 0.64 1.23 0.64
Kuttalam GTPS 6.49 0.73 0.73
Basin Bridge GTPS 0.33 0.92 0.33
Valuthur GTPS 0.80 18.57 0.90
Total Gas 8.25 21.46 2.60
Erode HEP 0.43 0.37 0.43
Kadamparai HEP 0.76 0.68 0.76
Kundah HEP 1.32 0.79 1.32
Tirunelveli HEP 0.71 0.41 0.71
Total Hydro 3.23 2.26 3.23
Total Generation 71.59 95.54 68.95
Distribution 17.23 24.71 24.48
TANGEDCO 88.82 120.25 93.42
Table 47: Approved R&M expenses for FY 2011-12 (Rs. Cr.)
Plant Last Tariff Order Petition Commission
Ennore TPS 33.36 40.83 33.36
Tuticorin TPS 33.09 98.16 37.23
Mettur TPS 27.22 22.03 30.62
North Chennai TPS 56.35 61.80 56.35
Total Coal 150.02 222.82 157.55
Tirumakottai GTPS 1.60 5.24 1.60
Kuttalam GTPS 12.29 3.57 3.57
Basin Bridge GTPS 0.82 1.19 0.82
Valuthur GTPS 2.00 1.33 2.25
Total Gas 16.71 11.32 8.23
Erode HEP 1.09 1.06 1.09
Kadamparai HEP 1.91 1.51 1.91
Kundah HEP 2.23 1.28 2.23
Tirunelveli HEP 1.78 1.57 1.78
Total Hydro 7.01 5.42 7.01
Total Generation 173.74 239.56 172.79
Distribution 43.01 63.88 58.80
TANGEDCO 216.75 303.44 231.59
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 115
June 2013
Table 48: Approved R&M expenses for FY 2012-13 (Rs. Cr.)
Plant
Last Tariff
Order Petition Commission
Ennore TPS 34.69 42.47 34.69
Tuticorin TPS 34.42 102.08 38.72
Mettur TPS 28.31 22.91 31.84
North Chennai TPS 58.61 64.28 58.61
Total Coal 156.02 231.74 163.85
Tirumakottai GTPS 1.66 5.45 1.66
Kuttalam GTPS 12.78 3.71 3.71
Basin Bridge GTPS 0.85 1.23 0.85
Valuthur GTPS 2.08 1.38 2.34
Total Gas 17.37 11.78 8.56
Erode HEP 1.13 1.10 1.13
Kadamparai HEP 1.98 1.57 1.98
Kundah HEP 2.32 1.33 2.32
Tirunelveli HEP 1.85 1.63 1.85
Total Hydro 7.29 5.64 7.29
Total Generation 180.69 249.15 179.70
Distribution 44.73 66.60 60.07
TANGEDCO 225.42 315.74 239.77
Administrative and General Expenses
3.103 On preliminary scrutiny, Commission has found that A&G expenses for generating
stations has decreased while that of distribution business has increased compared to
Commission approved A&G expenses. This is mainly due to accounting of self-
insurance charges pertaining to generating stations in distribution business.
3.104 Unlike employee expenses, A&G expenses are completely controllable. Hence,
Commission in this order is approving the A&G expenses as approved in the last
order except for few generating stations for which Commission feels that the
approved numbers in the last order are required to be revisited.
3.105 In the last order for TTPS, MTPS and VGTPS generating stations, Commission has
approved the A&G expenses in accordance to its Tariff Regulation by taking the
average A&G expenses of last five financial years i.e. from FY 2005-06 to FY 2009-
10 in order to arrive at the A&G expenses for the base year. In this process of
averaging the A&G expenses arrived will correspond to the median year i.e. FY 2007-
08 and hence average expenses must be escalated at 4% year on year for arriving at
the A&G expenses for the base year FY 2010-11. Hence in this order Commission has
approved additional A&G expenses of these stations to the extent of this correction.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 116
June 2013
3.106 Similar to R&M expenses, in its last Petition TANGEDCO and TANTRANSCO have
segregated the A&G expenses between distribution and transmission business based
on certain assumptions. However during review of audited accounts it has been
observed that A&G expenses of TANTRANSCO have decreased while A&G
expenses of TANGEDCO have increased. It was also confirmed by TANGEDCO
during the discussion that no part of A&G expenses on account of TANTRANSCO
are being booked in TANGEDCO accounts. Hence, the variation in expenses is only
due to change in accounting methodology adopted and that approach will continue in
future.
3.107 Commission is of the view that ratio of A&G expenses approved for transmission and
distribution business may change but A&G expense being a controllable expense, the
total A&G expenses cannot increase more than that approved by the Commission.
Hence while approving the A&G expenses for the distribution business, increase in
A&G expenses only to the tune of decrease in A&G expenses of TANTRANSCO
compared to that approved in last order has been allowed.
3.108 Based on the above approach, the A&G expenses submitted by TANGEDCO and
approved by the Commission is tabulated below:
Table 49: Approved A&G expenses for FY 2010-11 (Rs. Cr.)
Plant
Last Tariff
Order Petition Commission
Ennore TPS 3.72 1.42 3.72
Tuticorin TPS 8.16 4.20 9.18
Mettur TPS 4.61 4.88 5.19
North Chennai TPS 4.33 3.04 4.33
Total Coal 20.81 13.53 22.41
Tirumakottai GTPS 0.97 0.29 0.97
Kuttalam GTPS 0.79 0.09 0.79
Basin Bridge GTPS 0.63 0.41 0.63
Valuthur GTPS 2.11 0.29 2.37
Total Gas 4.50 1.08 4.76
Erode HEP 1.97 0.99 1.97
Kadamparai HEP 1.13 2.84 1.13
Kundah HEP 5.53 4.54 5.53
Tirunelveli HEP 1.35 1.40 1.35
Total Hydro 9.98 9.77 9.98
Total Generation 35.29 24.38 37.15
Distribution 23.56 58.32 28.48
TANGEDCO 58.85 82.70 65.63
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 117
June 2013
Table 50: Approved A&G expenses for FY 2011-12 (Rs. Cr.)
Plant
Last Tariff
Order Petition Commission
Ennore TPS 9.28 6.43 9.28
Tuticorin TPS 20.36 10.51 22.90
Mettur TPS 11.51 7.53 12.95
North Chennai TPS 10.80 3.70 10.80
Total Coal 51.96 28.17 55.93
Tirumakottai GTPS 2.42 0.90 2.42
Kuttalam GTPS 3.15 0.47 3.15
Basin Bridge GTPS 1.58 0.98 1.58
Valuthur GTPS 5.27 0.76 5.93
Total Gas 12.42 3.11 13.08
Erode HEP 4.91 2.58 4.91
Kadamparai HEP 2.83 5.46 2.83
Kundah HEP 15.15 10.13 15.15
Tirunelveli HEP 3.38 3.02 3.38
Total Hydro 26.27 21.19 26.27
Total Generation 90.64 52.46 95.28
Distribution 58.81 151.56 61.79
TANGEDCO 149.45 204.02 157.07
Table 51: Approved A&G expenses for FY 2012-13 (Rs. Cr.)
Plant
Last Tariff
Order Petition Commission
Ennore TPS 9.65 6.83 9.65
Tuticorin TPS 21.18 11.81 23.82
Mettur TPS 11.97 8.05 13.46
North Chennai TPS 11.24 5.07 11.24
Total Coal 54.03 31.76 58.17
Tirumakottai GTPS 2.51 0.98 2.51
Kuttalam GTPS 3.28 0.51 3.28
Basin Bridge GTPS 1.64 1.06 1.64
Valuthur GTPS 5.48 0.81 6.16
Total Gas 12.91 3.36 13.60
Erode HEP 5.10 2.71 5.10
Kadamparai HEP 2.95 5.58 2.95
Kundah HEP 15.76 10.52 15.76
Tirunelveli HEP 3.51 3.46 3.51
Total Hydro 27.32 22.28 27.32
Total Generation 94.26 57.39 99.09
Distribution 61.17 176.61 57.14
TANGEDCO 155.43 234.00 156.23
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 118
June 2013
3.109 Based on the above approach, the O&M expenses submitted by TANGEDCO and
approved by the Commission is tabulated below:
Table 52: Approved O&M expenses for FY 2010-11 (Rs. Cr.)
Plant Last Tariff Order Petition Commission
Ennore TPS 39.63 40.73 42.05
Tuticorin TPS 44.70 60.92 56.51
Mettur TPS 34.50 48.09 47.85
North Chennai TPS 50.58 46.72 50.23
Total Coal 169.41 196.46 196.64
Tirumakottai GTPS 3.10 2.73 2.82
Kuttalam GTPS 8.61 0.82 1.52
Basin Bridge GTPS 2.49 2.71 2.34
Valuthur GTPS 3.45 21.07 5.48
Total Gas 17.65 27.33 12.16
Erode HEP 14.34 11.10 12.14
Kadamparai HEP 8.02 10.88 9.25
Kundah HEP 16.13 15.18 16.70
Tirunelveli HEP 9.70 9.66 9.91
Total Hydro 48.19 46.82 48.00
Total Generation 235.25 270.61 256.80
Distribution 1092.94 1388.3 1281.71
TANGEDCO 1328.19 1658.91 1538.51
Table 53: Approved O&M expenses for FY 2011-12 (Rs. Cr.)
Plant Last Tariff Order Petition Commission
Ennore TPS 98.91 109.34 104.72
Tuticorin TPS 111.57 190.73 142.19
Mettur TPS 86.13 102.60 116.61
North Chennai TPS 126.24 115.99 117.64
Total Coal 422.85 518.66 481.16
Tirumakottai GTPS 7.75 10.05 7.92
Kuttalam GTPS 17.04 7.14 9.82
Basin Bridge GTPS 6.23 5.70 5.93
Valuthur GTPS 8.62 7.96 14.04
Total Gas 39.64 30.85 37.71
Erode HEP 35.79 26.52 28.88
Kadamparai HEP 20.03 22.05 19.82
Kundah HEP 37.34 35.91 41.88
Tirunelveli HEP 24.22 24.19 24.76
Total Hydro 117.38 108.67 115.34
Total Generation 579.87 658.18 634.21
Distribution 2727.98 3652.49 3327.36
TANGEDCO 3307.85 4310.67 3961.57
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 119
June 2013
Table 54: Approved O&M expenses for FY 2012-13 (Rs. Cr.)
Plant
Last Tariff
Order Petition Commission
Ennore TPS 102.86 120.49 110.28
Tuticorin TPS 116.04 208.29 154.00
Mettur TPS 89.58 115.05 126.82
North Chennai TPS 131.30 128.37 129.26
Total Coal 439.78 572.20 520.36
Tirumakottai GTPS 8.05 10.95 8.50
Kuttalam GTPS 17.72 7.78 9.30
Basin Bridge GTPS 6.47 6.32 6.39
Valuthur GTPS 8.96 8.87 15.06
Total Gas 41.20 33.92 39.25
Erode HEP 37.22 29.82 35.07
Kadamparai HEP 20.83 24.32 21.72
Kundah HEP 38.83 39.85 44.93
Tirunelveli HEP 25.18 27.49 27.15
Total Hydro 122.06 121.48 128.87
Total Generation 603.04 727.60 688.48
Distribution 2837.11 3690.86 3477.42
TANGEDCO 3440.15 4418.46 4165.90
Segregation of accounts
3.110 In terms of the Transfer Scheme notification dated 02nd January 2012, the
Government of Tamil Nadu had assigned the Assets and Liabilities (as on 31.03.2010)
to TANGEDCO on a Provisional basis and hence the transaction for 7 months i.e.
from 1st April 2010 to 30th October 2010, does not get reflected in the opening
balance sheet of the TANGEDCO as specified in the Transfer Scheme.
3.111 TANGEDCO has filed the Petition in accordance with the provisional transfer scheme
and hence the opening GFA as on November 2010 is considered equal to the closing
GFA as on March 2010.
3.112 In addition, the opening GFA as on November 2010 includes the revaluation reserve
of Rs. 5579.40 Crs. The summary of opening GFA as per provisional transfer scheme
dated 2nd January 2012 is tabulated below:
Table 55: TANGEDCO GFA as on Nov 2010 - based on provisional transfer scheme (Rs. Cr)
Particulars Generation Distribution Total G&D
Before Revaluation 10,558.49 7,668.03 18,226.52
Revaluation Reserve as on Nov 2010 1889.76 3689.64 5,579.40
Including Revaluation 12,448.25 11,357.67 23,805.92
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 120
June 2013
3.113 During the discussion, TANGEDCO has informed that revaluation of assets is still
underway and the GFA as on Nov 2010 will be only finalized in the final transfer
scheme. The GFA in the TANGEDCO Petition was inclusive of this revaluation
reserve as per provisional transfer scheme. However, in reply to data gaps,
TANGEDCO has revised the GFA excluding the revaluation reserve and segregated
the loans and other expenses between generation business and distribution business
based on the GFA prior to revaluation reserve. TANGEDCO also clarified that
revaluation reserve will not have any major impact in depreciation calculations as the
increase in GFA was majorly due to revaluation of land.
3.114 Commission is of the view that revaluation of assets is just a book adjustment that
neither requires any fund nor generates additional cash flow. Also as revaluation of
assets being not finalized, Commission in this order is accepting TANGEDCO’s
revised submission and based its calculations on GFA without revaluation reserve.
The opening GFA as on November 2010 considered by the Commission is tabulated
below:
Table 56: Opening GFA as on November 2010 (Rs. Cr)
Power Station
Revised Submission
GFA
(W/o Revaluation Reserve)
Ennore TPS 1,056.84
Tuticorin TPS 1,853.70
Mettur TPS 1,049.19
North Chennai TPS 1,987.19
Total Thermal 5,946.92
Tirumakottai GTPS 450.75
Kuttalam GTPS 351.05
Basin Bridge GTPS 549.01
Valuthur GTPS 540.82
Total Gas 1,891.63
Erode HEP 672.31
Kadamparai HEP 363.48
Kundah HEP 953.74
Tirunelveli HEP 330.58
New Hydro Addition
Bhavani Barrage 6.92
Bhavani Katlai 16.28
Periyar 33.75
Total Hydro 2,377.07
Tirunelveli 206.45
Udumalpet 136.41
Total Wind 342.86
Total Generation 10,558.49
Total Distribution 7668.03
Total G&D – without
revaluation reserve 18,226.52
Revaluation reserve 5579.40
Total G&D – inclusive of
revaluation reserve 23805.92
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 121
June 2013
Capital Expenditure and capitalization
3.115 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. However, TANGEDCO has not complied with this provision.
3.116 TANGEDCO has filed the capital expenditure for the first control period along with the Petition and also revised the capitalization initially filed in its capitalization
Petition dated 5th October 2012.
3.117 There were many discrepancies in the capital expenditure and capitalization
information filed in the Petition. The capital expenditure filed by TANGEDCO was
without any cost benefit analysis. In addition, TANGEDCO has also not provided any
information of sources of funding, broad details and physical quantum for the
proposed capital expenditure.
3.118 In response to data-gaps and clarifications sought by the Commission, TANGEDCO
has provided some information and revised the capital expenditure and capitalization
proposed. In order to verify the prudency of capital expenditure, Commission has
developed suitable formats and has directed TANGEDCO to submit the capital
expenditure information in those formats. However, the utility was able to provide
only partial information in the required formats.
3.119 Even after repeated directions, Commission has observed that TANGEDCO has not
submitted the capital expenditure and capitalization information to the satisfaction of
the Commission.
3.120 In the revised capital expenditure, capitalization and capital works in progress (CWIP)
submitted by TANGEDCO, Commission observed that the closing CWIP for some of
the generating stations for FY 2011-12 and FY 2012-13 was negative. During
discussions, TANGEDCO has clarified that this was due to non consideration of
capital expenditure and capitalization during the first seven months of the FY 2010-
11. Later, TANGEDCO has revised the capital expenditure, capitalization and CWIP
statement after considering actual expenses during the first seven months.
3.121 Commission reiterates that the data quality and iteration that went through the capital
expenditure and capitalization schedule along with its GFA schedule needed to be
substantially improved. Commission directs TANGEDCO to reconcile its accounts
with respect to capital expenditure and prepare the scheme wise data as per the
formats specified by the Commission. Commission also directs TANGEDCO to
file the progress of the capital expenditure and capitalization on quarterly basis.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 122
June 2013
3.122 It is also pertinent to mention that TANGEDCO has finalized its audited accounts
based on the provisional transfer scheme and the opening CWIP and GFA does take
into consideration the actual capital expenditure and expenses incurred during the first
seven months of FY 2010-11. Hence, this mismatch and ambiguity in the capital
expenditure and capitalization is majorly due to non finalization of transfer scheme
and hence Commission directs the power utilities to get the transfer scheme finalized
through GoTN at the earliest.
3.123 On scrutiny of audited accounts it was observed that the capitalization indicated for FY 2010-11 and FY 2011-12 has resulted in increase in fixed assets to that extent.
Hence, Commission is provisionally accepting the capital expenditure and
capitalization schedule as proposed by TANGEDCO.
3.124 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.
3.125 TANGEDCO is required file separate Petitions for approval of the tariff for the new generating stations along with accounts for these generating stations duly certified by
statutory auditor. On Commissions directive, TANGEDCO has submitted partial
information for new thermal stations as per the formats prescribed by TNERC Tariff
Regulations. However, the information is not certified by statutory auditor. With
respect to new hydro stations TANGEDCO has not provided any information.
3.126 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
upto 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.”
3.127 Hence, the Commission directs TANGEDCO to file the separate petitions based on TNERC Regulations, within 90 days of issuance of this Order. In failure of
this compliance, Commission may approve the capital cost based on industry
norms and may disallow all expenses allowed due to provisionally approved
capital cost in its next tariff order.
3.128 The capital expenditure and capitalization considered in this order is tabulated below. Any variation in capital expenditure and capitalization due to prudence verification
based on the data submitted by the TANGEDCO and finalization of transfer scheme
will be addressed during the next tariff order.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 123
June 2013
Table 57: Capital expenditure and capitalization provisionally accepted by the Commission (Rs. Cr)
Plant
Capital Expenditure Capitalization
FY 2010-11 FY 2011-12 FY 2012-13 FY 2010-11 FY 2011-12 FY 2012-13
Ennore TPS 0.36 7.39 4.06 - 0.21 2.43
Tuticorin TPS 6.77 24.21 92.36 11.16 8.97 55.42
Mettur TPS 1.21 17.71 103.15 56.04 11.89 61.89
North Chennai
TPS 1.28 - 41.44 1.85 24.66 24.86
NCTPS Stage-II 739.20 3,646.96 418.90 - - -
MTPS Stage-III 789.32 595.67 426.56 - - -
Ennore Expansion 0.42 0.20 437.89* - - -
Total Thermal 1538.55 4,292.15 1,524.36 69.05 45.73 144.60
Tirumakottai
GTPS 2.37 1.08 5.27 0.09 3.79 3.16
Kuttalam GTPS 10.27 0.82 137.42 - 14.79 137.42
Basin Bridge
GTPS - - - 2.33 - -
Valuthur Unit-I 14.51 60.24 13.86 - 11.02 70.89
Valuthur Unit-II - -
- - -
Total Gas 27.15 62.14 156.55 2.41 29.60 211.47
Erode HEP 0.82 1.46 59.25 0.56 1.59 35.55
Kadamparai HEP 0.13 1.58 0.11 0.02 2.83 0.06
Kundah HEP 6.30 4.26 6.05 5.41 4.43 1.35
Tirunelveli HEP 1.42 42.86 26.57 17.45 15.08 25.94
New Hydro
Addition - - -
Bhavani Barrage 30.91 69.11 42.76 - - -
Bhavani Katlai 12.43 168.39 69.60 - - -
Periyar 19.91 37.07 13.17 - - -
Total Hydro 71.92 324.73 217.50 23.44 23.93 62.90
Tirunelveli 0.20 0.94 - - - -
Udumalpet
0.03 - - - -
Total Wind 0.20 0.97 - - - -
Cogen Sugar
Mills Under
Modernisation
184.61 447.11 208.26 - - -
Total Generation 1822.43 5,127.11 2,106.67 94.90 99.26 418.98
Total
Distribution 617.06 1,506.92 1,528.10 277.19 1,021.16 1,797.94
TANGEDCO 2439.49 6,634.03 3,634.77 372.09 1,120.42 2,216.92
*Needs to be examined and reconciled.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 124
June 2013
Depreciation
3.129 In its Petition, TANGEDCO has submitted the opening gross block for each of the
generating plant and for distribution function for FY 2010-11 (5 months) in line with
the provisional transfer scheme notified by the Government of Tamil Nadu vide
notification dated 2nd January 2012.
3.130 TANGEDCO has estimated the depreciation for FY 2010-11 and FY 2011-12 in line
with the audited accounts for FY 2010-11 and provisional accounts for FY 2011-12
respectively. It was also submitted that the depreciation rate considered in annual
accounts are in line with the TNERC Tariff Regulations and has been calculated only
on the opening balance of GFA as per provisional accounts.
3.131 Commission has observed that the revaluation reserve as per provisional transfer
scheme has not been accounted properly and entire revaluation reserve has been
accounted for distribution business. In response to this query, TANGEDCO has later
revised the opening GFA based on provisional accounts and without considering the
revaluation reserve.
3.132 TANGEDCO also re-estimated the depreciation on this revised GFA and during the
discussions TANGEDCO has submitted to the Commission that the revaluation of
assets is still in process and the impact due to revaluation reserve can be addressed on
finalization of transfer scheme. During discussions TANGEDCO also submitted there
will not be any major change in depreciation due to change in opening GFA as the
revaluation reserve majorly corresponds to land. However, Commission is of the view
that revaluation of assets should not result in tariff increase.
3.133 In another query raised by the Commission regarding the depreciation rates used by
TANGEDCO, it has submitted that TANGEDCO has used the weighted average
depreciation rate for the particular group of asset arrived based on depreciation rates
specified in the Tariff Regulations.
3.134 TNERC Tariff Regulations 2005 specifies following guidelines for calculation of depreciation:
24. Depreciation
For the purpose of tariff, depreciation shall be computed in the following manners:
i. The value base for the purpose of depreciation shall be historical cost of the
asset.
ii. The depreciation shall be calculated at the rates as per the Annexure to these
Regulations.
iii. The residual value of assets shall be considered as 10% and depreciation shall
be allowed upto maximum of 90% of the estimated cost of the Asset.
iv. Land is not a depreciable asset and its cost shall be excluded from the capital
cost while computing 90% of the historical cost of the asset.
v. The historical cost of the asset shall include additional capitalisation.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 125
June 2013
vi. Depreciation shall be chargeable from the first year of operation. In case of
operation of the asset for part of the year, depreciation shall be charged on
pro-rata basis.
vii. After the assets are fully depreciated the benefit of reduced tariff shall be
made available to the consumer.
3.135 Commission has calculated depreciation considering the revised opening GFA
without revaluation reserve, weighted average depreciation rates and deductions
submitted by TANGEDCO, and capitalization approved by the Commission in this
order. The GFA considered for estimation of depreciation is tabulated below:
Table 58: Opening GFA considered for the calculations of Depreciation (Rs. Cr)
Power Station As on Nov 2010 As on March 2011 As on March 2012
Ennore TPS 1,056.84 1,056.84 1,057.05
Tuticorin TPS 1,853.70 1,861.47 1,869.64
Mettur TPS 1,049.19 1,105.21 1,085.40
North Chennai TPS 1,987.19 1,989.05 2,013.71
Total Thermal 5,946.92 6,012.57 6,025.80
Tirumakottai GTPS 450.75 450.84 454.63
Kuttalam GTPS 351.05 351.05 365.84
Basin Bridge GTPS 549.01 551.33 551.33
Valuthur GTPS 540.82 540.82 551.84
Total Gas 1,891.63 1,894.04 1,923.64
Erode HEP - (incl.
Bhavani Barrage and
Bhavani Khattai)
695.51 696.07 697.66
Kadamparai HEP 363.48 363.51 365.97
Kundah HEP 953.74 955.88 956.37
Tirunelveli HEP (incl -
Periyar) 364.33 381.73 394.39
Total Hydro 2,377.07 2,397.19 2,414.41
Tirunelveli 206.45 206.45 206.45
Udumalpet 136.41 136.41 136.41
Total Wind 342.86 342.86 342.86
Total Generation 10,558.49 10,646.67 10,706.71
Total Distribution 7668.03 7941.09 8797.17
TANGEDCO 18,226.52 18,587.76 19,503.88
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 126
June 2013
3.136 Based on the above approach, Commission approves depreciation for all the
generating stations and distribution business except for wind stations. In the last tariff
order, Commission approved a transfer price of Rs. 2.75 per unit for own wind mills.
Hence, in this order Commission is not determining fixed expenses on account of the
own wind mills.
Table 59: Depreciation approved by the Commission (Rs. Cr)
Power Station
2010-11 FY 2011-12 FY 2012-13
Petition
Commissio
n
Petitio
n
Commissio
n Petition
Commissio
n
Ennore TPS 15.77 15.60 37.79 37.45 37.80 37.46
Tuticorin TPS 27.12 26.65 64.49 64.21 64.72 64.45
Mettur TPS 14.29 14.20 36.04 36.04 36.47 35.35
North Chennai TPS 25.77 25.67 61.66 61.66 63.67 62.50
Total Thermal 82.96 82.12 199.98 199.36 202.66 199.76
Tirumakottai GTPS 6.66 6.62 15.90 15.90 15.90 16.03
Kuttalam GTPS 5.17 5.13 12.32 12.32 12.32 12.82
Basin Bridge GTPS 8.26 8.22 19.81 19.81 19.81 19.81
Valuthur GTPS 8.00 7.96 19.11 19.11 19.11 19.48
Total Gas 28.09 27.94 67.14 67.14 67.14 68.14
Erode HEP - (incl.
Bhavani Barrage and
Bhavani Khattai)
8.49 8.48 20.36 20.36 20.39 20.41
Kadamparai HEP 4.40 4.38 10.52 10.52 10.53 10.58
Kundah HEP 10.46 10.45 25.16 25.16 25.24 25.16
Tirunelveli HEP (incl -
Periyar) 4.35 4.33 10.99 10.99 11.14 11.44
Total Hydro 27.70 27.64 67.03 67.03 67.30 67.59
Tirunelveli 0 0 0 0 0 0
Udumalpet 0 0 0 0 0 0
Total Wind 0 0 0 0 0 0
Total Generation 138.74 137.70 334.16 333.54 337.11 335.49
Total Distribution 114.86 109.74 284.11 272.78 303.00 302.13
TANGEDCO 253.59 247.44 618.26 606.32 640.11 637.62
Interest on long term loans and other financing charges
3.137 In the last tariff order, Commission has approved the total interest expenses
corresponding to actual long term and short term loans borrowed by TANGEDCO.
For wind generating assets Commission in its last tariff order has not approved any
interest expenses as the loan borrowing, if any towards these assets would already be
over.The interest expenses approved in the last tariff order are tabulated below:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 127
June 2013
Table 60: Interest expenses approved by the Commission in its last tariff order (Rs. Cr)
Stations
Commission
FY 11 FY 12 FY 13
ETPS 3 9 8
NCTPS 6 16 16
MTPS 3 9 9
TTPS 6 15 16
NCTPS II 0 0 174
MTPS II 0 0 293
Total Thermal 19 49 516
BBGTPS 2 4 4
Kuttalam 1 3 3
Kovilkalappal 1 4 4
Valuthur 2 7 7
Total Gas 6 18 18
Erode 2 5 9
Kadamparai 1 3 3
Kundah 3 8 8
Tirunelveli 1 3 4
Total Hydro 7 19 24
Total Generation 32 86 558
Distribution 688 3150 3355
TANGEDCO 720 3236 3913
3.138 In the current Petition, TANGEDCO has claimed the interest expenses corresponding
to only long term loans and separately claimed the interest on working capital as per
norms specified by TNERC in its Tariff Regulations 2005.
3.139 The opening balance of loans as on 1st November 2010 for TANGEDCO considered
in its Petition is based on the provisional transfer scheme notified as on 2nd January
2012. TANGEDCO in its Petition has submitted that the loan of a financial
institution is not linked with any particular generating plant or the CAPEX schemes as
erstwhile TNEB used to have a basket of loan which was used to meet the total capital
expenditure of erstwhile TNEB. Therefore it is difficult to identify the debt / interest
and equity of the generating plant or station wise or distribution function wise.
3.140 Hence TANGEDCO has adopted the following approach for segregation of interest to the generating plant / station and distribution function
i. Project specific loans for generation and distribution is initially
allotted to each of the respective project and considered as opening
loan balance for that particular project.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 128
June 2013
ii. Large quantum of generic loans which cannot be differentiated into
project specific loans and interest paid on these loans is bifurcated as
per opening gross block of generation and distribution notified as per
transfer scheme.
3.141 Commission has observed discrepancies in the TANGEDCO’s submission of loan and
its bifurcation based on gross fixed assets. In response to Commission’s observation
TANGEDCO has revised the allocation of loans based on net fixed assets without
revaluation reserve and also segregated the long term loans borrowed for capital
projects, repayment of existing loans and funding the revenue expenditure. The
summary of revised submission of TANGEDCO is tabulated below:
Table 61: Revised interest expenses submitted by TANGEDCO (Rs. Cr)
Particulars 2010-11 2011-12 2012-13
Loan Profile
Op. Balance 15,065 19,412 29,594
Add: Addition for CAPEX 2,226 4,924 2,571
Add: Addition for Loan Repayment 1,754 4,921 7,621
Add: For Revenue Expenditure 2,374 5,876 6,305
Less: Loan Repayment 2,008 5,538 8,270
Closing Balance 19,412 29,594 37,821
Gross Interest Expenses 1155.66 3017.95 4268.91
IDC 282.43 664.19 1443.51
Net Interest Expenses 873.23 2353.76 2825.40
3.142 In its last order Commission has stated that there is a mix up between the capital
account and the revenue account. In the revised submission TANGEDCO has again
included the borrowings corresponding to revenue account in capital account. Based
on the revised submission Commission has made the following observations:
i. The average interest rate for FY 11 is higher than the rate at which the long
term loans are procured.
ii. The loan repayment submitted by TANGEDCO includes the repayment of
loans that have been borrowed for revenue expenditure during the control
period.
3.143 TANGEDCO has clarified that higher interest rate is due to the fact that the loans borrowed during the first seven months of FY 11 are not accounted in audited
accounts that were finalized based on provisional transfer scheme dated 2nd January
2012. However, debt obligations corresponding to those additional loans were met by
TANGEDCO and the impact to that extent has been included in its audited accounts.
3.144 Also, Commission is of the view that it needs to treat the capital account and revenue
account separately atleast since TANGEDCO started working independently. Based
on the above submissions, Commission for the determination of interest expenses on
long term loans has considered following assumptions:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 129
June 2013
i. Revised opening loans as on 1st November 2010 has been arrived considering the
net addition during first seven months of FY 11 based on information provided by
TANGEDCO.
ii. The repayment of existing loans as per audited accounts also includes the
repayment of loans borrowed for revenue account. Commission is treating the
revenue account separately and also allowing the interest expenses on account of
regulatory asset approved in its last tariff order. Hence, allowing the borrowings
and interest expenses corresponding to the repayment of loans borrowed for
funding of revenue account will result in double accounting of the interest
expenses allowed for funding the revenue gap. In view of this, Commission is
accepting the opening loans as on 1st November 2010 and is assuming a
repayment period of 10 years.
iii. The repayment period of new loans borrowed during the control period is assumed
to be 10 years
iv. The borrowings required for loan repayment will be estimated after taking into
account the depreciation allowed during the year.
v. Loans required for the capital works will be arrived after considering the approved
capital expenditure and available grants and consumer contribution during the
control period. Equity required for funding the capital expenditure is assumed to
be nil as Commission is not allowing any return on equity.
vi. The consumer contribution and grants for FY 11 and FY 12 has been considered
as per audited accounts while for FY 13 they are approved based on historical
data.
vii. Interest expenses on account of capital works for wind assets has not been
considered as borrowings on account of wind assets cannot be loaded on tariff for
other generating stations and distribution business. Commission has already
approved generation cost for wind assets based on transfer price mechanism.
viii. Interest on cogeneration sugar mills is also not considered as the tariff for these
generating stations is taken as per Commission’s tariff order for procurement of
power from cogeneration.
ix. Average interest rate for FY 11 and FY 12 is estimated based on interest expenses
as per audited accounts and revised loan profile considering the borrowings during
the first seven months of FY 11. Interest rate for FY 13 is assumed as 11.98% i.e.
the average interest rate of FY 11 and FY 12.
x. Interest during construction (IDC) is approved based on capital works in progress.
3.145 The details of borrowings and interest expenses approved by the Commission
corresponding to capital expenditure and repayment of loans are given below.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 130
June 2013
Table 62: Revised opening of loans as on Nov 2010 - (Rs. Cr.)
Particulars Amount
Opening of loans as on November 2010
– As per provisional transfer scheme 15064.97
Net additions in loans during the first
seven months of FY 11 3682.25
Revised opening loans as on 1st
November 2010. 18747.22
Table 63: Borrowings considered for funding capital expenditure (Rs. Cr)
Particulars 2010-11 2011-12 2012-13
Capital Expenditure 2,439.49 6,634.03 3,634.77
Less: Consumer Contribution 212.89 394.42 477.54
Less: Grants 0.00 312.62 104.94
Loans required for funding
capital expenditure 2,226.60 5,927.00 3,052.29
Table 64: Borrowings approved for repayment of loans (Rs. Cr)
Particulars 2010-11 2011-12 2012-13
Repayment of Existing
loans (Revised opening as
on Nov 2010)
781.13 1,874.72 1,874.72
Repayment of new loans 306.68 1140.13 1743.41
Less: Depreciation 247.44 606.32 637.62
Loans required for
repayment of loans 840.37 2,408.53 2,980.51
Table 65: Interest expenses approved by the Commission for the first control period (Rs. Cr)
Particulars 2010-11 2011-12 2012-13
Loan Profile
Op. Balance 18,747 20,598 25,824
Add: Addition for CAPEX 2,226 5,926 3,052
Add: Addition for Loan Repayment 840 2,409 2,981
Less: Loan Repayment 1,088 3,015 3,618
Closing Balance 20,726 26,046 28,461
Gross Interest Expenses 1,090.25 2,504.02 3,265.60
IDC 279.19 937.93 1,464.84
Net Interest Expenses 811.06 1,566.09 1,800.76
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 131
June 2013
3.146 Commission has allocated the opening loans as on November 2010 between
generating stations and distribution business based on net fixed assets and CWIP.
Later on the addition and repayment of loans allocation has been done based on
approach detailed above. The interest expenses approved by the Commission based on
loan allocation among generating stations and distribution is tabulated below:
Table 66: Approved interest expenses on long term loans for TANGEDCO during first control period
(Rs. Cr)
Power Station 2010-11 2011-12 2012-13
Petition Commission Petition Commission Petition Commission
Ennore TPS 15.06 51.91 41.50 98.62 9.40 106.03
Tuticorin TPS 67.73 63.86 146.08 120.48 98.62 130.98
Mettur TPS 29.28 31.59 89.46 62.18 41.49 69.73
North Chennai TPS 89.16 56.88 249.07 105.15 185.79 113.20
NCTPS Stage-II
- - -
MTPS Stage-III
-
- 20.72 -
Ennore Expansion
-
-
-
Total Coal 201.23 204.24 526.10 386.43 356.02 419.94
Tirumakottai GTPS 27.86 22.67 74.73 43.34 64.17 47.00
Kuttalam GTPS 21.39 19.22 57.51 37.14 49.52 49.18
Basin Bridge GTPS 27.59 10.35 77.30 18.69 61.94 18.54
Valuthur GTPS 34.72 40.60 93.38 93.72 85.37 107.47
Total Gas 111.55 92.84 302.92 192.89 261.01 222.19
Erode HEP - (incl.
Bhavani Barrage and
Bhavani Khattai)
31.73 39.52 80.03 75.13 160.05 83.86
Kadamparai HEP 5.40 17.34 17.42 32.98 27.21 35.82
Kundah HEP 7.50 60.22 46.01 115.65 64.56 126.75
Tirunelveli HEP (incl -
Periyar) 17.00 22.57 41.68 44.62 85.17 51.04
Total Hydro 61.63 139.65 185.14 268.38 336.99 297.48
Total Generation 374.41 436.72 1,014.16 847.70 954.02 939.61
Distribution 499.13 374.34 1,396.07 718.40 1,592.00 861.15
TANGEDCO 873.54 811.06 2,410.23 1566.09 2,546.02 1800.76
3.147 TANGEDCO has claimed interest on consumer security deposit based on actual
consumer security deposits and average interest rate as per audited accounts. The
Commission has approved the interest expenses incurred on consumer security
deposits to the extent of working capital requirement determined by the Commission
in Table 72 based on the norms specified in the TNERC Tariff Regulation, 2005 for
distribution business. Based on audited accounts, Commission has considered the
average interest rate of 7.09% and 7.00% on consumer security deposits for FY 2010-
11 and FY 2011-12 respectively. For FY 2012-13, Commission has allowed interest
expenses at 9% in accordance to its order on interest on consumer security deposit
dated 5th February 2013.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 132
June 2013
3.148 Commission has observed that TANGEDCO has claimed interest on GPF in other
finance charges. Commission is not allowing the interest expenses on GPF as it has
not considered GPF reserve for funding of capital expenditure. The interest expenses
on consumer security deposits and other finance charges approved by the Commission
are tabulated below.
Table 67: Interest and other finance charges approved by the Commission (Rs. Cr)
Parameter 2010-11 2011-12 2012-13
Petition Commission Petition Commission Petition Commission
Interest on consumer
security Deposits 145.34 100.44 380.05 247.60 399.05 380.81
Other finance charges 48.78 20.23 140.56 87.14 147.58 87.14
Total 194.12 120.67 520.61 334.74 546.63 467.95
3.149 The overall interest and other finance charges approved by the Commission for the
distribution business during the first control period are given below.
Table 68: Interest and other finance charges approved for distribution business during the first control
period (Rs. Cr)
Parameter 2010-11 2011-12 2012-13
Petition Commission Petition Commission Petition Commission
Interest on long term
loans 499.13 374.34 1396.07 718.40 1592.00 861.15
Interest on consumer
security Deposits 145.34 100.44 380.05 247.60 399.05 380.81
Other finance charges 48.78 20.23 140.56 87.14 147.58 87.14
Total interest and
finance charges 693.25 495.00 1916.68 1053.14 2138.63 1329.10
Return on Equity
3.150 TANGEDCO in its Petition has claimed return on equity on total equity base as on 1st
November 2010 based on provisional transfer scheme. The equity base was bifurcated
among the generating stations and distribution business based on opening gross block
allocated to generating stations and distribution business of TANGEDCO. The return
on equity claimed by TANGEDCO in its Petition has been tabulated below:
Table 69: Return on equity filed by TANGEDCO for the first control period (Rs. Cr)
Power Station 2010-11 2011-12 2012-13
Ennore TPS 8.62 26.81 32.94
Tuticorin TPS 15.07 47.06 58.14
Mettur TPS 9.36 28.88 37.17
North Chennai TPS 16.66 51.52 63.98
NCTPS Stage-II - - -
MTPS Stage-III - - 74.56
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 133
June 2013
Power Station 2010-11 2011-12 2012-13
Tirumakottai GTPS 3.69 11.47 14.09
Kuttalam GTPS 2.83 8.84 11.19
Basin Bridge GTPS 4.42 13.80 17.01
Valuthur GTPS 4.60 14.18 17.32
Erode HEP 5.93 18.28 33.45
Kadamparai HEP 2.94 9.16 11.27
Kundah HEP 7.75 24.14 29.79
Tirunelveli HEP 2.49 8.18 12.74
Generation 84.35 262.34 413.65
Distribution 64.91 236.12 331.27
TANGEDCO 149.26 498.46 744.92
3.151 Commission in its last tariff order has allowed the return on equity for generating
stations while disallowing the return on equity for distribution business. In addition
Commission’s views and observations while approving return on equity in its last
tariff order are given below:
i. There is a mix up between the capital account and revenue account and equity
as well as capital borrowings have been diverted to meet the revenue
expenses.
ii. The return on equity shall not be permitted if equity has been diverted for
meeting revenue expenses.
iii. Borrowings are more than the investment shown in capital expenditure which
brings out the fact that the borrowings have been diverted for revenue
expenditure.
iv. 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 and allow return on equity in line with the its tariff regulations.
v. However, if the Commission disallows the interest costs on the entire
borrowings in excess of capital works in line with the Regulation, it would
create confusion and may also affect the borrowing ability of the distribution
company and the transmission licensee.
vi. In view of the above submissions Commission has not allowed RoE while
allowing the interest expenses on total borrowings in its last order. This issue
was also dealt by the Hon’ble APTEL in Appeal No. 102. of 2012 filed by M/s
Beta Wind Farm (P) Ltd. The relevant extracts of the judgement is reproduced
below:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 134
June 2013
“Even though we feel that the State Commission should have determined
interest on loan and Return on Equity as per the Regulations, in view of the
submissions made by the State Commission that allowing ROE and interest on
loan as per Regulations will only result in increase in ARR and tariff and that
the adjustment will be made after finalization of the balance sheet of the
successor companies of the Electricity Board viz. Respondent nos. 1 and 2 and
the proposed restructuring of loan, no purpose will be served by interfering
with the order of the State Commission.
In view of above, we do not want to interfere with the findings of the State
Commission regarding the treatment given to the interest on loan in the
impugned order.”
3.152 In order to understand the extent to which the long term loans and equity have been
diverted, Commission directed TANGEDCO to bifurcate the opening loans as on
November 2010 into loans borrowed for funding capital projects, repayment of
existing loans and funding the revenue expenditure. However, TANGEDCO has
replied stating that it is not possible to segregate the long term loans into the heads
suggested by the Commission. In the absence of information from TANGEDCO,
Commission undertook an exercise to understand the level of diversion of capital
funds.
3.153 Based on TNEB and TANGEDCO audited accounts from FY 03, Commission has
estimated the excess funds available with utility for funding capital expenditure and
whether there was any equity requirement for funding the capital expenditure.
3.154 The Commission has tabulated below the excess funds with utility in the past years
based on additions to equity, consumer contribution, long term loans and actual
capital expenditure.
Table 70: Comparison of source of funds and actual capital expenditure (Rs. Cr)
Year
Capital
Expenditure
Source of funding Excess
Funds Consumer
Contribution and
grants Equity
Long term
loans Total
FY 2003 1236 279 25 1621 1925 689
FY 2004 1561 408 200 2761 3369 1808
FY 2005 1272 391 85 2043 2519 1246
FY 2006 1570 428 25 2134 2587 1018
FY 2007 2094 319 175 3075 3569 1475
FY 2008 2333 527 490 4836 5853 3519
FY 2009 2706 436 1171 8552 10158 7452
FY 2010 4182 632 100 9953 10686 6504
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 135
June 2013
3.155 From the above table, it can be observed that source of funds for capital assets are
higher than actually required for funding the capital expenditure. In addition the fact
that the excess funds available during the year are more than the equity infused that
year clearly indicates that equity has not contributed in the creation of capital assets
and has been diverted towards revenue account since FY 2003.
3.156 Commission has not considered the equity requirement while approving the funding
requirement of capital expenditure during the first control period. This stand was
taken because Commission is of the view that TANGEDCO is mixing the revenue
account with capital account and the equity approved may be again diverted to
revenue account. This can also be observed from TANGEDCO audited accounts
wherein the actual borrowings for FY 11 and FY 12 are significantly higher than
capital expenditure. TNERC Tariff Regulations also allow the Commission for
approving the equity below the norms of 30% requirement. The relevant extracts of
the regulation are reproduced below:
“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.”
3.157 Based on the above submissions, Commission is not allowing return on equity for
TANGEDCO during the control period due to following reasons:
i. Commission has approved interest on total outstanding loans as on November
2010
ii. Based on available sources of funding, equity has been diverted towards
revenue account from FY 2003 and hence the addition in equity base as per
audited accounts is on account of funding the revenue expenditure and not for
creation of capital assets.
iii. Loans approved for funding the capital expenditure for generating stations and
distribution business during the control period are without considering the
equity
Interest on Working Capital
3.158 TANGEDCO has claimed interest on working capital for its generating stations and
distribution based on norms specified in the TNERC Tariff Regulations, 2005.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 136
June 2013
3.159 Commission has not approved the interest on working capital in its last order as it has
approved interest expenses corresponding to total loans including short term
borrowings. However TANGEDCO has claimed interest expenses for short term
borrowings separately and claimed interest on working capital. Commission is of the
view that it is appropriate to approve and segregate the loans based on purpose and in
accordance with its Tariff Regulations. Hence, Commission approves the interest
expenses based on its Tariff Regulations and relevant guidelines are reproduced
below:
“26. Working Capital
(2) Till such a formula is evolved, the norms for Working Capital shall be as below:
(a) For Coal based / Lignite fired Generating Stations
(i) Cost of coal or lignite for one and half month for pit head
generating stations and two months for non pit head generating stations
corresponding to the target availability;
(ii) Cost of secondary fuel oil for two months corresponding to the
target availability;
(iii) Operation and Maintenance expenses for one month;
(iv) Maintenance spares @ 1% of the historical cost escalated @ 6%
per annum from the date of commercial operation; and
(v) Receivables equivalent to two months of fixed and variable charges for
sale of electricity calculated on .target availability.
(b) For Gas Turbine / combined cycle Generating Stations
(i) Fuel cost for one month corresponding to the target availability duly
taking into account the mode of operation of the Generating Station on gas
fuel and liquid fuel;
(ii) Liquid fuel stock for half month;
(iii) Operation and Maintenance expenses for one month;
(iv)Maintenance spares @ 1% of the historical cost escalated @ 6% per
annum from the date of commercial operation; and
(v) Receivables equivalent to two months of fixed and variable charges
for sale of electricity calculated on target availability.
(c) For Hydro Power Generating Stations
The working Capital shall cover:
(i) Operation and Maintenance expenses for one month;
(ii) Maintenance spares @ 1% of the historical cost escalated @ 6%
per annum from the date of commercial operation; and
(iii) Receivables equivalent to two months of fixed charges for sale of
electricity, calculated on normative capacity index.
(e) For Distribution System
(i) Operation and Maintenance expenses for one month
(ii) Maintenance spares for two months based on annual requirement
considered at 1% of the gross fixed cost at the beginning of the year.
(iii) Receivable equivalent to sixty day consumption charges.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 137
June 2013
27. Interest on Working Capital
The short term rate of interest on working capital shall be on normative basis and
shall be equivalent to the primary lending rate of State Bank of India as on 1st
April of the relevant year.”
3.160 Commission has observed that TANGEDCO has estimated the working capital
requirement for generating stations based on norms specified by Commission.
However, Commission has re-estimated the interest on working capital for generating
stations considering the variable costs and fixed costs approved in this Order and
interest rates as submitted by TANGEDCO.
3.161 Commission has considered the interest rates as submitted by TANGEDCO as they
were in accordance with the Regulations. The interest on working capital approved by
the Commission for generating stations during the first control period is tabulated
below.
Table 71: Interest on working capital approved by the Commission during the control period (Rs. Cr)
Power Station FY 2010-11 FY 2011-12 FY 2012-13
Petition Commission Petition Commission Petition Commission
Ennore TPS 10.67 10.73 21.6 18.83 25.62 20.31
Tuticorin TPS 37.9 32.49 124.4 115.83 123.43 129.86
Mettur TPS 30 29.45 99.96 97.84 91.73 97.10
North Chennai TPS 18.59 19.73 52.58 54.89 63.7 73.63
NCTPS Stage-II -
-
-
MTPS Stage-III -
-
12.53
Tirumakottai GTPS 1.35 2.72 7.16 6.75 8.34 6.78
Kuttalam GTPS 1 0.71 4.83 4.20 3.52 2.83
Basin Bridge GTPS 3.06 1.78 5.06 3.41 3.92 2.06
Valuthur GTPS 2.15 2.92 8.63 8.68 14.61 10.48
Erode HEP - (incl.
Bhavani Barrage
and Bhavani
Khattai)
1.62 1.67 4.49 4.00 8.44 5.01
Kadamparai HEP 0.77 0.89 2.07 2.10 2.74 2.54
Kundah HEP 1.48 2.37 4.66 5.76 6.07 6.95
Tirunelveli HEP
(incl - Periyar) 0.99 1.01 2.76 2.48 4.72 3.10
Total Generation 109.58 106.48 338.19 324.76 369.37 360.65
3.162 For distribution business, TANGEDCO has claimed the working capital requirement
based on norms approved by the Commission except for maintenance spares. The
working capital requirement for maintenance spares has been claimed at 1% of GFA
instead of two months of the annual requirement as per Regulations. Also,
TANGEDCO has not taken into account the consumer security deposits for arriving at
the working capital requirement.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 138
June 2013
3.163 Commission has approved the interest on consumer security deposit under interest on
loans and hence Commission is of the view that interest on working capital for
distribution business can only be allowed on working capital requirement above the
consumer security deposits.
3.164 Consumer security deposits upto FY 2011-12 are taken as per audited accounts and
for FY 2012-13 they are projected based on historical trend in increase of consumer
security deposit. The working capital requirement and available consumer security
deposit for the control period is tabulated below.
Table 72: Approved working capital requirement and available consumer security deposits during the
control period (Rs. Cr)
Parameter FY 2010-11 FY 2011-12 FY 2012-13
Working Capital requirement 3,400.81 3,536.39 4,231.27
Average available consumer security
deposits 4,921.09 5,335.35 5,842.57
3.165 From the above table it can be observed that available consumer security deposits are
more than the working capital requirement. In view of this Commission is not
approving any interest on working capital as it has already approved interest on
consumer security deposits to the extent of working capital requirement under interest
and finance charges.
Table 73: Interest on working capital approved during the control period (Rs. Cr)
Parameter FY 2010-11 FY 2011-12 FY 2012-13
Petition Commission Petition Commission Petition Commission
Distribution 164.38 0.00 465.91 0.00 700.88 0.00
Other Debits
3.166 TANGEDCO in its Petition has included the other fuel costs, lubricants and consumable and water costs in other debits for generating stations. In response to
Commissions query regarding this discrepancy, TANGEDCO has made the following
submissions
i. Cost of water, other fuel costs and lubricants and consumables are
part of operating expenses of power stations of TANGEDCO and
these expenses were not claimed under fuel expenses or repairs and
maintenance expenses, and therefore have been included in other
debits. TANGEDCO requested the Commission to allow these
expenses as they are operating expenses for generation of power.
ii. The cost of Rs. 68.17 Crs and Rs. 20.60 Crs towards other debits for
Kuttalam GTPS and VGTPS is due to minimum guarantee off take of
natural gas and transmission charges for supply of gas. TANGEDCO
confirmed that these expenses were not claimed in the fuel costs as a
part of variable costs.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 139
June 2013
3.167 However, Commission is not considering the submission of TANGEDCO due to
following reasons:
i. Commission is of the view that though TANGEDCO has not included
the operating expenses claimed in other debits in its O&M expenses,
these expenses cannot be allowed as Commission has already approved
the O&M expenses, which are controllable expenses, in its last order in
accordance to its Regulations. Hence, approving additional operating
expenses under other debits is not appropriate and the increased
expenses on account of controllable parameters will be inaptly passed
on to the consumers.
ii. Based on the prior period expenses submitted by TANGEDCO,
Commission has observed that minimum guarantee charges were
reversed and has been accounted as prior period income in FY 12.
Hence, Commission is not allowing the expenses due to minimum
guarantee off take charges in other debits.
3.168 Based on above submissions, Commission has considered other debits for generating
stations as approved in last order and has not allowed increase in other debits due to
minimum guarantee off take of natural gas and other operational charges. The
approved other debits in this order by the Commission is tabulated below.
Table 74: Other debits approved by the Commission for generating stations (Rs. Cr)
Power Station
FY 2010-11 FY 2011-12 FY 2012-13
Last
Order Petition Comm.
Last
Order Petition Comm.
Last
Order Petition Comm.
Ennore TPS 0.08 3.90 0.08 0.20 11.65 0.20 0.20 12.11 0.20
Tuticorin TPS 0.13 1.61 0.13 0.30 7.11 0.30 0.30 7.40 0.30
Mettur TPS 0.08 3.58 0.08 0.20 1.57 0.20 0.20 1.63 0.20
North Chennai TPS 0.13 9.17 0.13 0.40 24.16 0.40 0.40 25.12 0.40
Tirumakottai
GTPS 0.04 0.44 0.04 0.10 0.47 0.10 0.10 0.49 0.10
Kuttalam GTPS 0.03 68.21 0.03 0.06 0.13 0.06 0.06 0.13 0.06
Basin Bridge
GTPS 0.04 0.01 0.04 0.10 0.05 0.10 0.10 0.05 0.10
Valuthur GTPS 0.04 20.60 0.04 0.20 0.00 0.20 0.20 0.00 0.20
Erode HEP - (incl.
Bhavani Barrage
and Bhavani
Khattai)
0.05 0.04 0.05 0.12 0.10 0.12 0.12 0.10 0.12
Kadamparai HEP 0.04 (0.06) 0.04 0.10 0.00 0.10 0.10 0.00 0.10
Kundah HEP 0.08 0.06 0.08 0.20 0.15 0.20 0.20 0.16 0.20
Tirunelveli HEP
(incl - Periyar) 0.04 0.95 0.04 0.10 2.84 0.10 0.10 2.95 0.10
Total Generation 0.78 108.50 0.78 2.08 48.23 2.08 2.08 50.15 2.08
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 140
June 2013
3.169 For distribution business, TANGEDCO has included extraordinary debits and DSM
under other debits. However TANGEDCO in its Petition has not provided any
adequate information pertaining to these expenses.
3.170 On review of audited accounts it was observed that there was extraordinary credit corresponding to extraordinary debits and TANGEDCO has claimed the expenses
under other debits without considering this credit. Hence, Commission is not allowing
this expense in other debits and directs TANGEDCO to reconcile expenses pertaining
to extraordinary items appropriately.
3.171 For DSM, TANGEDCO has claimed Rs. 10 Cr in FY 2012-13 as expense under other
debits. Commission is approving expenses for DSM under separate head and it is
inappropriate to include the expenses on this account in other debits. Also,
TANGEDCO has not provided any information regarding DSM measures taken by it
and how this provision of Rs. 10 Cr was utilized and further keeping in view that FY
2012-13 is already over, Commission is not allowing any DSM expenses.
3.172 Based on the above submissions, the other debits approved by the Commission are
tabulated below.
Table 75: Other Debits approved by the Commission (Rs. Cr)
Parameter FY 2010-11 FY 2011-12 FY 2012-13
Last
Order Petition Comm.
Last
Order Petition Comm.
Last
Order Petition Comm.
Distribution 11.68 10.76 10.76 28.57 37.97 14.26 29.14 26.90 16.90
Prior Period Expenses
3.173 TANGEDCO in its Petition has claimed for net prior period expenses of Rs. 1052 Crs
in FY 12. TANGEDCO has further submitted that these expenses pertaining to prior
period for power purchase, revision in tariff payments and fuel price adjustment to
central generating stations, employee cost, interest and finance charges and other
charges.
3.174 However on review of audited accounts for FY 12, it was observed that net prior period expenses were only Rs. 576.81 Crs. In response to data gaps, TANGEDCO has
revised the prior period expenses as per audited accounts and submitted the detailed
break-up for Rs. 576.81 Crs.
3.175 In the last order Commission has not allowed any prior period expenses as these were
charges corresponding prior to functioning of TANGEDCO and was of the opinion
prior period charges should be addressed in the financial restructuring plan by
TANGEDCO.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 141
June 2013
3.176 On review of prior period expenses data submitted by TANGEDCO and during the
discussions with TANGEDCO officials it was inferred that entire net prior period
expenses was due to expenses corresponding prior to FY 11. Hence in this order
Commission is truing up the expenses after formation of TANGEDCO, and is not
allowing the net prior period expenses that have been sought by TANGEDCO.
Demand Side Management
3.177 The Commission in its last tariff order has provisionally allowed Rs.10 Crores in the
ARR for the purpose of carrying out the activities of Energy Conservation and
Demand Side Management (DSM) in FY 13.
3.178 TANGEDCO in its Petition has claimed expenses towards DSM during FY 13 under
other debits. However, it has not provided any justification or details of DSM
measures carried out due to which it has incurred Rs. 10 Cr of expenditure. Hence,
Commission is not allowing the DSM expenses of Rs. 10 Cr in FY 13
Contribution for Contingency reserves
3.179 TANGEDCO has claimed contingency reserve at 0.25% of GFA in FY 13 in
accordance to TNERC MYT Regulations.
“Regulation 35 of the MYT Regulations 2009,
To meet out any contingent liability or unforeseen revenue losses, the Distribution licensees
shall maintain a contingency reserve. The Distribution Licensees shall estimate the
contingency reserve on the value of Assets for each year of the control period.
Regulation 31 of the Tariff Regulations 2005,
The Generating Companies and the licensees shall provide and maintain a
contingency reserve upto 0.5% of the value of assets at the beginning of the year and
the provision made for the year will be allowed in their Revenue Requirement. This
reserve will be utilised to meet any contingent liability or unforeseen revenue losses.”
3.180 It is pertinent to mention that provision for contingency reserve is appropriate when
utility is in revenue surplus and some portion of this surplus revenue can be
contributed for contingency reserve. However, in the current petition, TANGEDCO
has shown a revenue gap of Rs. 9719 Crs in FY 13 and in this situation it is inapt to
allow the expenses on account of contingency reserve. Hence, Commission disallows
the contingency reserve as claimed by TANGEDCO.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 142
June 2013
Summary of fixed Cost approved for Distribution function
3.181 Based on above submissions, the summary of fixed cost approved for distribution
function is tabulated below:
Table 76: Summary of fixed costs for Distribution business approved by the Commission for the first
control period (Rs. Cr)
Last Tariff Order Petition Commission
Particulars FY 11 FY 12 FY 13 FY 11 FY 12 FY 13 FY 11 FY 12 FY 13
Operation and
Maintenance Expenses 1093 2728 2837 1388 3652 3691 1282 3327 3477
Depreciation 95 254 287 115 284 303 110 273 302
Interest and other
finance charges 688 3150 3355 693 1917 2139 495 1053 1329
Other Debits 12 29 29 11 38 27 11 14 17
Prior Period
Debit/(Credit) Charges 0 0 0 0 1052 0 0 0 0
Reasonable Return /
Return on Equity 0 0 0 65 236 331 0 0 0
Interest on Working
Capital 0 0 0 164 466 701 0 0 0
Demand side
management 0 0 10
0 0 0
Contribution for
contingency reserve 0 0 0 0 0 72 0 0 0
Total 1888 6161 6518 2436 7645 7263 1898 4667 5125
Expenses on account of Generation
3.182 In this Section, the Commission in accordance with TNERC (Terms and Conditions
for determination of Tariff) Regulations, 2005 has analysed the expenses on account
of Generation business of TANGEDCO from FY 2010-11 to FY 2012-13 and with
reference to the Tariff Order dated March 31, 2012.
3.183 In respect of components of Tariff for Generating Stations, Regulation-36 of TNERC
Tariff Regulations, 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
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 143
June 2013
e) Interest on Working Capital:
3. The energy (variable) charges shall cover fuel cost.”
3.184 Commission in accordance with its regulations is approving the capacity charges and
variable cost on account of own generating stations and approach for the same is
detailed below.
Capacity charges for own generating stations
3.185 In above sections, Commission has approved the fixed expenses with respect to
generating stations for the first control period.
a) O&M expenses – Refer to Table 52, Table 53 and Table 54
b) Depreciation – Refer to Table 59
c) Interest on long term loans – Refer to Table 66
d) Return on Equity – Refer to Point 3.157
e) Interest on Working Capital – Refer to Table 71
f) Other Debits – Refer to Table 74
3.186 With respect to other income, Commission has observed that though TANGEDCO
has changed the approach regarding sharing of other income between generating
stations and distribution business, the total other income proposed by TANGEDCO is
in accordance with audited accounts. Hence, Commission is accepting the other
income as proposed by TANGEDCO in its Petition for generating stations.
3.187 For new thermal stations, Commission is not approving any fixed cost for the first
control period as none of the new thermal stations have been commissioned in the
first control period. For new hydro stations, TANGEDCO has included their fixed
costs in the fixed costs of respective hydro generating circles and hence Commission
is not separately approving the fixed costs for new hydro stations.
3.188 Based on above submissions, the summary of fixed expenses for own generating
stations as proposed by TANGEDCO and approved by the Commission in this order
for the first control period are tabulated below.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 144
June 2013
ETPS
Table 77: Fixed charges approved for ETPS (Rs. Cr)
Parameter
Last Order Petition Commission
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
Depreciation 25.42 61.00 61.00 15.77 37.79 37.80 15.60 37.45 37.46
Interest on Loan
Capital 3.33 9.00 8.00 15.06 41.50 9.40 51.91 98.62 106.03
Return on Equity 6.67 22.00 29.00 8.62 26.81 32.94 0.00 0.00 0.00
Operation and
maintenance exp 39.63 98.91 102.86 40.73 109.34 120.48 42.05 104.72 110.28
Interest on Working
Capital 0.00 0.00 0.00 10.67 21.60 25.62 10.73 18.83 20.31
Other Debit 0.08 0.20 0.20 3.90 11.65 12.11 0.08 0.20 0.20
Net Prior Period
Expenses 0.00 0.00 0.00 0.00 -0.03 0.00 0.00 0.00 0.00
Less: other income 1.71 6.00 6.00 9.88 26.37 27.42 9.88 26.37 27.42
Total 73.42 185.11 195.06 84.87 222.29 210.93 110.49 233.44 246.86
TTPS
Table 78: Fixed charges approved for TTPS (Rs. Cr)
Parameter
Last Order Petition Commission
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
Depreciation 22.08 54.00 56.00 27.12 64.49 64.72 26.65 64.21 64.45
Interest on Loan
Capital 5.83 15.00 16.00 67.73 146.08 98.62 63.86 120.48 130.98
Return on Equity 12.50 39.00 53.00 15.07 47.06 58.14 0.00 0.00 0.00
Operation and
maintenance exp 44.70 111.57 116.03 60.92 190.72 208.29 56.51 142.19 154.00
Interest on Working
Capital 0.00 0.00 0.00 37.90 124.40 123.43 32.49 115.83 129.86
Other Debit 0.13 0.30 0.30 1.61 7.11 7.40 0.13 0.30 0.30
Net Prior Period
Expenses 0.00 0.00 0.00 0.00 0.04 0.00 0.00 0.00 0.00
Less: other income 7.83 13.90 13.90 21.93 41.63 43.30 21.93 41.63 43.30
Total 77.41 205.97 227.43 188.42 538.27 517.30 157.70 401.38 436.30
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 145
June 2013
MTPS
Table 79: Fixed charges approved for MTPS (Rs. Cr)
Parameter
Last Order Petition Commission
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
Depreciation 15.83 40.00 40.00 14.29 36.04 36.47 14.20 36.04 35.35
Interest on Loan
Capital 3.33 9.00 9.00 29.28 89.46 41.49 31.59 62.18 69.73
Return on Equity 6.67 22.00 29.00 9.36 28.88 37.17 0.00 0.00 0.00
Operation and
maintenance exp 34.51 86.13 89.57 48.08 102.59 115.05 47.84 116.60 126.82
Interest on Working
Capital 0.00 0.00 0.00 30.00 99.96 91.73 29.45 97.84 97.10
Other Debit 0.08 0.20 0.20 3.58 1.57 1.63 0.08 0.20 0.20
Net Prior Period
Expenses 0.00 0.00 0.00 0.00 3.08 0.00 0.00 0.00 0.00
Less: other income 9.08 14.10 14.10 17.16 40.06 41.66 17.16 40.06 41.66
Total 51.34 143.23 153.67 117.43 321.51 281.88 106.00 272.80 287.54
NCTPS
Table 80: Fixed charges approved for NCTPS (Rs. Cr)
Parameter
Last Order Petition Commission
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
Depreciation 25.42 63.00 64.00 25.77 61.66 63.67 25.67 61.66 62.50
Interest on Loan
Capital 6.25 16.00 16.00 89.16 249.07 185.79 56.88 105.15 113.20
Return on Equity 13.33 42.00 56.00 16.66 51.52 63.98 0.00 0.00 0.00
Operation and
maintenance exp 50.58 126.24 131.29 46.72 116.00 128.37 50.22 117.65 129.25
Interest on Working
Capital 0.00 0.00 0.00 18.59 52.58 63.70 19.73 54.89 73.63
Other Debit 0.13 0.40 0.40 9.17 24.16 25.12 0.13 0.40 0.40
Net Prior Period
Expenses 0.00 0.00 0.00 0.00 -0.65 0.00 0.00 0.00 0.00
Less: other income 5.92 10.70 10.70 9.77 19.62 20.40 9.77 19.62 20.40
Total 89.79 236.94 256.99 196.30 534.74 510.23 142.86 320.13 358.57
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 146
June 2013
TKGTPS
Table 81: Fixed charges approved for TKGTPS (Rs. Cr)
Parameter
Last Order Petition Commission
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
Depreciation 8.33 21.00 21.00 6.66 15.90 15.90 6.62 15.90 16.03
Interest on Loan
Capital 1.25 4.00 4.00 27.86 74.73 64.17 22.67 43.34 47.00
Return on Equity 2.92 9.00 13.00 3.69 11.47 14.09 0.00 0.00 0.00
Operation and
maintenance exp 3.10 7.74 8.05 2.73 10.06 10.95 2.82 7.91 8.50
Interest on Working
Capital 0.00 0.00 0.00 1.35 7.16 8.34 2.72 6.75 6.78
Other Debit 0.04 0.10 0.10 0.44 0.47 0.49 0.04 0.10 0.10
Net Prior Period
Expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 0.00 0.10 0.10 0.02 1.55 1.61 0.02 1.55 1.61
Total 15.64 41.74 46.05 42.70 118.25 112.33 34.86 72.46 76.81
KGTPS
Table 82: Fixed charges approved for KGTPS (Rs. Cr)
Parameter
Last Order Petition Commission
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
Depreciation 6.67 16.00 17.00 5.17 12.32 12.32 5.13 12.32 12.82
Interest on Loan
Capital 1.25 3.00 3.00 21.39 57.51 49.52 19.22 37.14 49.18
Return on Equity 2.50 7.00 10.00 2.83 8.84 11.19 0.00 0.00 0.00
Operation and
maintenance exp 8.61 17.04 17.72 0.82 7.14 7.78 1.52 9.82 9.30
Interest on Working
Capital 0.00 0.00 0.00 1.00 4.83 3.52 0.71 4.20 2.83
Other Debit 0.03 0.06 0.06 68.21 0.13 0.13 0.03 0.06 0.06
Net Prior Period
Expenses 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00
Less: other income 0.00 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01
Total 19.05 43.09 47.77 99.41 90.77 84.45 26.59 63.53 74.17
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 147
June 2013
BBGTPS
Table 83: Fixed charges approved for BBGTPS (Rs. Cr)
Parameter
Last Order Petition Commission
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
Depreciation 12.50 30.00 30.00 8.26 19.81 19.81 8.22 19.81 19.81
Interest on Loan
Capital 1.67 4.00 4.00 27.59 77.30 61.94 10.35 18.69 18.54
Return on Equity 3.75 11.00 15.00 4.42 13.80 17.01 0.00 0.00 0.00
Operation and
maintenance exp 2.49 6.22 6.47 2.72 5.69 6.32 2.34 5.92 6.38
Interest on Working
Capital 0.00 0.00 0.00 3.06 5.06 3.92 1.78 3.41 2.06
Other Debit 0.04 0.10 0.10 0.01 0.05 0.05 0.04 0.10 0.10
Net Prior Period
Expenses 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00
Less: other income 0.00 0.10 0.10 0.12 0.20 0.20 0.12 0.20 0.20
Total 20.45 51.22 55.67 45.93 121.54 108.86 22.61 47.74 46.69
VGTPS
Table 84: Fixed charges approved for VGTPS (Rs. Cr)
Parameter
Last Order Petition Commission
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
Depreciation 11.25 43.00 46.00 8.00 19.11 19.11 7.96 19.11 19.48
Interest on Loan
Capital 1.67 7.00 7.00 34.72 93.38 85.37 40.60 93.72 107.47
Return on Equity 3.75 15.00 24.00 4.60 14.18 17.32 0.00 0.00 0.00
Operation and
maintenance exp 3.45 8.62 8.96 21.06 7.95 8.88 5.48 14.04 15.07
Interest on Working
Capital 0.00 0.00 0.00 2.15 8.63 14.61 2.92 8.68 10.48
Other Debit 0.04 0.20 0.20 20.60 0.00 0.00 0.04 0.20 0.20
Net Prior Period
Expenses 0.00 0.00 0.00 0.00 0.04 0.00 0.00 0.00 0.00
Less: other income 0.04 0.10 0.10 0.01 0.05 0.05 0.01 0.05 0.05
Total 20.12 73.72 86.06 91.12 143.25 145.25 56.99 135.71 152.65
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 148
June 2013
Erode Hydro Generation Circle
Table 85: Fixed charges approved for Erode Hydro Generation Circle (Rs. Cr)
Parameter
Last Order Petition Commission
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
Depreciation 5.83 14.00 25.00 8.49 20.36 20.39 8.48 20.36 20.41
Interest on Loan
Capital 2.08 5.00 9.00 31.73 80.03 160.05 39.52 75.13 83.86
Return on Equity 4.58 14.00 26.00 5.93 18.28 33.45 0.00 0.00 0.00
Operation and
maintenance exp 14.34 35.79 37.22 11.10 26.52 29.83 12.14 28.87 35.07
Interest on Working
Capital 0.00 0.00 0.00 1.62 4.49 8.44 1.67 4.00 5.01
Other Debit 0.05 0.12 0.12 0.04 0.10 0.10 0.05 0.12 0.12
Net Prior Period
Expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 0.04 0.42 0.42 0.21 0.26 0.27 0.21 0.26 0.27
Total 26.85 68.49 96.92 58.71 149.53 251.99 61.63 128.23 144.21
Kadamparai Hydro Generation Circle
Table 86: Fixed charges approved for Kadamparai Hydro Generation Circle (Rs. Cr)
Parameter
Last Order Petition Commission
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
Depreciation 3.75 9.00 10.00 4.40 10.52 10.53 4.38 10.52 10.58
Interest on Loan
Capital 1.25 3.00 3.00 5.40 17.42 27.21 17.34 32.98 35.82
Return on Equity 2.50 7.00 10.00 2.94 9.16 11.27 0.00 0.00 0.00
Operation and
maintenance exp 8.03 20.03 20.83 10.88 22.05 24.32 9.26 19.82 21.72
Interest on Working
Capital 0.00 0.00 0.00 0.77 2.07 2.74 0.89 2.10 2.54
Other Debit 0.04 0.10 0.10 -0.06 0.00 0.00 0.04 0.10 0.10
Net Prior Period
Expenses 0.00 0.00 0.00 0.00 -1.70 0.00 0.00 0.00 0.00
Less: other income 0.08 0.30 0.30 0.08 0.30 0.31 0.08 0.30 0.31
Total 15.48 38.83 43.63 24.24 59.21 75.75 31.84 65.22 70.44
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 149
June 2013
Kundah Hydro Generation Circle
Table 87: Fixed charges approved for Kundah Hydro Generation Circle (Rs. Cr)
Parameter
Last Order Petition Commission
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
Depreciation 9.17 22.00 23.00 10.46 25.16 25.24 10.45 25.16 25.16
Interest on Loan
Capital 2.92 8.00 8.00 7.50 46.01 64.56 60.22 115.65 126.75
Return on Equity 6.25 20.00 26.00 7.75 24.14 29.79 0.00 0.00 0.00
Operation and
maintenance exp 16.13 37.34 38.83 15.18 35.91 39.86 16.70 41.88 44.93
Interest on Working
Capital 0.00 0.00 0.00 1.48 4.66 6.07 2.37 5.76 6.95
Other Debit 0.08 0.20 0.20 0.06 0.15 0.16 0.08 0.20 0.20
Net Prior Period
Expenses 0.00 0.00 0.00 0.00 0.17 0.00 0.00 0.00 0.00
Less: other income 0.33 1.00 1.00 0.83 1.08 1.12 0.83 1.08 1.12
Total 34.21 86.54 95.03 41.60 135.12 164.56 89.00 187.57 202.86
Tirunelvelli Hydro Generation Circle
Table 88: Fixed charges approved for Tirunelvelli Hydro Generation Circle (Rs. Cr)
Parameter
Last Order Petition Commission
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
Depreciation 2.92 9.00 10.00 4.35 10.99 11.14 4.33 10.99 11.44
Interest on Loan
Capital 0.83 3.00 4.00 17.00 41.68 85.17 22.57 44.62 51.04
Return on Equity 2.08 8.00 12.00 2.49 8.18 12.74 0.00 0.00 0.00
Operation and
maintenance exp 9.70 24.22 25.19 9.66 24.19 27.50 9.92 24.76 27.16
Interest on Working
Capital 0.00 0.00 0.00 0.99 2.76 4.72 1.01 2.48 3.10
Other Debit 0.04 0.10 0.10 0.95 2.84 2.95 0.04 0.10 0.10
Net Prior Period
Expenses 0.00 0.00 0.00 0.00 1.00 0.00 0.00 0.00 0.00
Less: other income 0.50 1.70 1.70 0.57 3.79 3.94 0.57 3.79 3.94
Total 15.08 42.62 49.59 34.86 87.84 140.28 37.28 79.15 88.90
3.189 The recovery of capacity charges are governed by Regulation-42 of TNERC Tariff Regulations, 2005 which 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.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 150
June 2013
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.…”
3.190 The above capacity charges as determined by the Commission are to be recovered
when TANGEDCO is able to meet the target in terms of norms set by the
Commission. The norms specified for recovery of fixed charges as per TNERC
regulation are stipulated below:
“37. Norms of Operation
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 50% (Till Renovation
and Modernization works in all units are completed)
.........”
3.191 Commission is of the view that there cannot be marked differences in plant
availability factor and plant load factor for own generation stations except for
BBGTPS due to following reasons:
a) Commission in its last order has not considered power generation from own
stations under merit order dispatch.
b) Due to prevailing power-deficit in the state, it is unlikely that SLDC may ask the
own generating stations to back down.
c) Also, TANGEDCO has not submitted any data regarding the backing down of
own generating stations.
3.192 Commission is allowing fixed charges for own generating stations on pro-rata basis
with respect to actual PLFs achieved. Based on the performance of the generating
stations it has been observed that all the gas based stations have not met the
performance targets while ETPS, TTPS (for FY 2010-11) were the coal based stations
that did not meet the targets set.
3.193 The Commission is of the view that as all these Stations fall outside the merit order
despatch, the non-availability of these Power Stations leads to costly power purchase
from other sources which gets reflected in power purchase cost in the ARR. Hence,
Commission is adopting the similar approach as adopted in the last tariff order and is
allowing the capacity charges only to the extent of actual performance of the
generating stations. The actual PLFs achieved and allowable capacity charges for the
control period are tabulated below:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 151
June 2013
Table 89: Targets availability and actual PLF achieved by own generating stations
Name of the Power Station Targets FY 2010-11 FY 2011-12 FY 2012-13
Ennore TPS 50.00% 36.76% 22.61% 18.66%
Tuticorin TPS 80.00% 75.88% 85.57% 90.08%
Mettur TPS 80.00% 86.06% 92.77% 84.26%
North Chennai TPS 80.00% 89.61% 84.81% 91.66%
Tirumakottai GTPS 80.00% 74.45% 74.48% 76.78%
Kuttalum GTPS 80.00% 0.00% 46.58% 6.21%
Valathur - GTPS 80.00% 47.24% 67.16% 57.19%
Table 90: Allowable capacity charges for the first control period (Rs. Cr)
Name of the Power
Station
Approved Capacity Charges Allowable Capacity Charges
FY 2010-11 FY 2011-12 FY 2012-13 FY 2010-11 FY 2011-12 FY 2012-13
Ennore TPS 110.49 233.44 246.86 81.24 105.56 92.14
Tuticorin TPS 157.70 401.38 436.30 149.58 401.38 436.30
Mettur TPS 106.00 272.80 287.54 106.00 272.80 287.54
North Chennai TPS 142.86 320.13 358.57 142.86 320.13 358.57
Tirumakottai GTPS 34.86 72.46 76.81 32.44 67.46 73.72
Kuttalum GTPS 26.59 63.53 74.17 0.00 36.99 5.76
Basin Bridge GTPS 22.61 47.74 46.69 22.61 47.74 46.69
Valathur - GTPS 56.99 135.71 152.65 33.65 113.92 109.13
Total 658.10 1547.19 1679.59 568.39 1365.98 1409.84
Variable cost for own generating stations
3.194 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 data gaps raised by the Commission. The variable
cost as determined by the Commission in respect of various generating stations of
TANGEDCO is detailed as under:
Coal based generating stations
3.195 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
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 152
June 2013
e) Normative auxiliary consumption
The above elements have been discussed in detail as under:
Price of primary fuel
3.196 Commission in its last order has approved the fuel cost for FY 2010-11 based on
actual landed cost submitted in the Petition and for FY 2011-12 and FY 2012-13
based on monthly coal prices submitted by TANGEDCO upto November 2011.
3.197 TANGEDCO in its Petition has submitted the station wise actual cost of fuel for FY
2010-11 and FY 2011-12 while estimated the fuel cost for FY 2012-13. The prices of
primary fuel approved by the Commission in its last tariff order and filed by
TANGEDCO in its current MYT Petition are tabulated below:
Table 91: Coal price in Rs./Tonne approved by the Commission in last order and filed by TANGEDCO in
its current Petition
Name of the
Power Station
As per last year tariff order Petition
FY 2010-11 FY 2011-12 FY 2012-13 FY 2010-11 FY 2011-12 FY 2012-13
Ennore TPS 2278 2261 2261 2552 2507 2452
Tuticorin TPS 3130 3814 3814 3022 4057 4279
Mettur TPS 3084 3395 3395 3071 4196 3721
North Chennai TPS 2559 2939 2939 2559 3188 3199
3.198 In response to additional information sought by the Commission, TANGEDCO has
submitted the actual landed fuel cost and blending ratio of its coal based plants in FY
2012-13. The actual fuel cost data submitted by TANGEDCO is given below.
Table 92: Revised landed cost of coal for FY 2012-13 as submitted by TANGEDCO
Power Plant Landed Cost of Coal
(in Rs./Tonne) Blending Ratio
ETPS 2,841 100:0
TTPS 3,659 81:19
MTPS 3,916 72:28
NCTPS 3,407 74:26
3.199 Since TANGEDCO has submitted the actual landed cost for FY 2010-11 and FY
2011-12, Commission has considered the TANGEDCO’s submission while for FY
2012-13 Commission has considered the landed cost for FY 2012-13 based on revised
submission of TANGEDCO. The fuel cost approved by the Commission for the first
control period is tabulated below:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 153
June 2013
Table 93: Landed cost approved by the Commission – Rs./Tonne
Name of the
Power Station
Petition Commission
FY 2010-11 FY 2011-12 FY 2012-13 FY 2010-11 FY 2011-12 FY 2012-13
Ennore TPS 2552 2507 2452 2552 2507 2841
Tuticorin TPS 3022 4057 4279 3022 4057 3659
Mettur TPS 3071 4196 3721 3071 4196 3916
North Chennai TPS 2559 3188 3199 2559 3188 3407
Gross calorific value
3.200 In its Petition TANGEDCO has submitted the actual gross calorific value of its coal
based stations for FY 2010-11 and FY 2011-12 and estimated the calorific value for
FY 2012-13. In reply to additional data sought by the Commission, TANGEDCO has
submitted the actual gross calorific value for its coal based stations in FY 2012-13. In
support TANGEDCO has also submitted the calculations for arriving at the average
GCV based on monthly consumption of imported and domestic coal.
Table 94: Revised GCV of coal submitted by TANGEDCO for FY 2012-13
Power Plant GCV of Coal (in
kCal/kg)
ETPS 3,235
TTPS 3,405
MTPS 3,551
NCTPS 3,615
3.201 Since TANGEDCO has submitted the actual calorific value for FY 2010-11 and FY
2011-12, Commission has considered the TANGEDCO’s submission while for FY
2012-13 Commission has accepted the revised submission of TANGEDCO. The gross
calorific value considered by the Commission for the first control period is tabulated
below:
Table 95: Gross calorific value of coal approved by the Commission – kCal/kg
Name of the
Power Station
Petition Commission
FY 2010-11 FY 2011-12 FY 2012-13 FY 2010-11 FY 2011-12 FY 2012-13
Ennore TPS 2822 3213 3190 2822 3213 3235
Tuticorin TPS 3210 3486 4320 3210 3486 3405
Mettur TPS 3048 3562 3562 3048 3562 3551
North Chennai TPS 3459 3768 3585 3459 3768 3615
Station heat rate
3.202 TANGEDCO in its Petition sought relaxation is station heat rate (SHR) and submitted
the following major reasons for request of higher SHR:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 154
June 2013
a) Degradation in performance due to ageing
b) Partial loading of machines
c) Usage of high ash content and inferior coal
3.203 However, Commission is of the view that the reasons specified by TANGEDCO are
not justifiable due to following reasons:
a) Degradation in performance due to ageing: Commission is allowing the R&M
expenses in accordance to its regulations that can be used for maintaining the
generating stations properly. Also for ETPS major capital investment has been
incurred without any commensurate benefits. Hence, Commission is not
considering any relaxation for ETPS. Similarly, Commission is not allowing
any relaxation in respect of other stations especially when capital expenditure
claimed is being allowed.
b) Partial loading of machines: TANGEDCO is required to properly manage its
units to operate at appropriate loads and hence Commission is not inclined to
accept this submission. Further when all units are dispatched to its full
availability due to prevailing shortages, there is no justification for part load
operation of the units.
c) Usage of high ash content and inferior coal: TANGEDCO has submitted for
TTPS usage of inferior and high ash content coal is one of the reasons for
higher SHR. Commission is of the view that TANGEDCO is required to sort
out the issue of receipt of inferior coal with the coal suppliers. Also,
TANGEDCO has the responsibility to inspect and ensure that the coal
received is of right quality.
3.204 Based on the above submissions, Commission is not accepting the relaxation sought
by TANGEDCO on SHR and has considered the SHR as approved in its last tariff
order for the purposes of calculating variable cost per unit.
Table 96: Station heat rate approved by the Commission (kCal/kWh)
Name of the
Power Station
Last Order Petition Commission
FY
11
FY
12
FY
13
FY
11
FY
12
FY
13
FY
11
FY
12
FY
13
Ennore TPS 3200 3200 3200 3304 3905 4097 3200 3200 3200
Tuticorin TPS 2500 2453 2453 2901 2646 2705 2500 2453 2453
Mettur TPS 2500 2500 2500 2523 2549 2500 2500 2500 2500
North Chennai TPS 2466 2393 2393 2533 2480 2481 2466 2393 2393
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 155
June 2013
Auxiliary consumption and Secondary fuel oil consumption
3.205 In chapter A3, Commission has stated that it is considering the auxiliary consumption
as proposed by the Petitioner only for arriving at the energy availability purposes. For
the purpose of estimation of variable cost per unit, Commission has used the auxiliary
consumption as approved in the last tariff order. However, for NCTPS and TTPS
Commission in its last order based on TANGEDCO’s submission has provisionally
approved the auxiliary consumption as 4.35% and 10.11% for FY 2011-12.
TANGEDCO in the current Petition has submitted the actual auxiliary consumption
with respect to NCTPS and TTPS as 8.36% and 7.98% respectively. Commission is of
the view that the auxiliary consumption considered in the last tariff order for NCTPS
is too low while that for TTPS is on a higher side. In view of these discrepancies,
Commission has considered auxiliary consumption of 8.50% in accordance with its
tariff regulations for FY 2011-12.
Table 97: Auxiliary consumption considered by the Commission for the purpose of variable cost
calculations
Name of the
Power Station
Last Order Petition Commission
FY 11 FY 12 FY 13 FY 11 FY 12 FY 13 FY 11 FY 12 FY 13
Ennore TPS 15.78% 16.32% 15.00% 15.78% 16.70% 15.00% 15.78% 16.32% 15.00%
Tuticorin TPS 8.31% 10.11% 8.50% 8.28% 7.98% 8.50% 8.31% 8.50% 8.50%
Mettur TPS 8.51% 8.31% 9.00% 8.30% 8.26% 8.34% 8.51% 8.31% 9.00%
North Chennai
TPS 8.89% 4.35% 8.50% 8.70% 8.36% 8.40% 8.89% 8.50% 8.50%
3.206 TANGEDCO in its Petition has proposed higher secondary fuel oil consumption for
ETPS and TTPS while lower SFO consumption for MTPS and NCTPS. SFO
consumption being a controllable parameter, in this true-up exercise Commission has
considered the SFO consumption as approved in its last tariff order for all the coal
based stations. The SFO consumption considered by the Commission for the first
control period is given below:
Table 98: Secondary fuel oil consumption approved for the first control period (ml/kWh)
Name of the
Power Station
Last Order Petition Commission
FY 11 FY 12 FY 13 FY 11 FY 12 FY 13 FY 11 FY 12 FY 13
Ennore TPS 12.00 10.00 10.00 12.20 10.60 12.00 12.00 10.00 10.00
Tuticorin TPS 2.00 2.00 2.00 5.95 1.97 3.00 2.00 2.00 2.00
Mettur TPS 2.00 2.00 2.00 0.98 0.52 1.29 2.00 2.00 2.00
North Chennai
TPS 2.00 2.00 2.00 1.10 0.73 0.63 2.00 2.00 2.00
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 156
June 2013
Price of secondary fuel
3.207 TANGEDCO in its Petition has given the price of secondary fuel as per actual costs incurred during for FY 2010-11 and FY 2011-12 and estimated the secondary fuel oil
price for FY 2012-13. In response to additional information sought by the
Commission, TANGEDCO has submitted month wise actual cost of secondary fuel
oil upto February 2013. The weighted average cost of secondary fuel for FY 2012-13
(Upto Feb 13) estimated by the Commission based on TANGEDCO’s submission is
tabulated below:
Table 99: Weighted average price of secondary fuel estimated by the Commission for FY 2012-13
(Rs./kL)
Power Plant Cost of secondary
fuel
ETPS 49112
TTPS 47916
MTPS 47417
NCTPS 47346
3.208 Commission is accepting the TANGEDCO submission of actual cost of secondary
fuel for FY 2010-11 and FY 2011-12 while approving the cost of secondary fuel for
FY 2012-13 based on the weighted average cost estimated by the Commission. The
cost of secondary fuel approved by the Commission is tabulated below:
Table 100: Cost of secondary fuel approved by the Commission (Rs./kL)
Name of the Power
Station
Last Order Petition Commission
FY 11 FY 12 FY 13 FY 11 FY 12 FY 13 FY 11 FY 12 FY 13
Ennore TPS 30174 40361 40361 39426 50691 50691 39426 50691 49112
Tuticorin TPS 29839 37653 37653 33764 42678 42678 33764 42678 47916
Mettur TPS 28988 36900 36900 33764 42678 42678 33764 42678 47417
North Chennai TPS 29753 39997 39997 30764 38806 38806 30764 38806 47346
GCV of the secondary fuel
3.209 TANGEDCO in its Petition has not submitted the GCV of secondary fuel considered
for estimating the variable cost. In response to data gaps, TANGEDCO has submitted
the GCV of the secondary fuel considered for arriving at the variable cost.
Table 101: GCV of secondary fuel submitted by TANGEDCO (kCal/lt)
Name of the Power Station FY 2010-11 FY 2011-12 FY 2012-13
Ennore TPS 10496 10480 10470
Tuticorin TPS 10570 10560 10645
Mettur TPS 10094 10104 10104
North Chennai TPS 10340 10359 10385
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 157
June 2013
3.210 In addition TANGEDCO has also submitted the month wise actual GCV of the
secondary fuel oil consumed at the power station in FY 2012-13 (upto Feb 2013).
Based on the data submitted by TANGEDCO, Commission has arrived at the
weighted average GCV of the secondary fuel for FY 2012-13.
Table 102: Weighted average GCV of secondary fuel estimated by the Commission for FY 2012-13
(kCal/Lt)
Power Plant Average GCV of
secondary fuel
ETPS 10502
TTPS 10639
MTPS 10466
NCTPS 10343
3.211 Commission is accepting the TANGEDCO submission of actual GCV of secondary
fuel for FY 2010-11 and FY 2011-12 while approving the GCV of secondary fuel for
FY 2012-13 based on the weighted average GCV estimated by the Commission. The
GCV of secondary fuel approved by the Commission is tabulated below:
Table 103: GCV of secondary fuel approved by the Commission (kCal/lt)
Name of the
Power Station
Last Order TANGEDCO Submission Commission
FY 11 FY 12 FY 13 FY 11 FY 12 FY 13 FY 11 FY 12 FY 13
Ennore TPS 10491 10491 10491 10496 10480 10470 10496 10480 10502
Tuticorin TPS 10547 10547 10547 10570 10560 10645 10570 10560 10639
Mettur TPS 10544 10544 10544 10094 10104 10104 10094 10104 10466
North Chennai
TPS 10341 10341 10341 10340 10359 10385 10340 10359 10343
Variable Cost for Coal based stations
3.212 On the basis of above submissions, the Commission has calculated the variable cost
for various coal based power stations of TANGEDCO which is tabulated as under.
Commission has estimated the variable cost – ex bus considering the entire fuel cost
including oil.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 158
June 2013
ETPS
Table 104: Variable Cost approved by the Commission for ETPS
Description Unit 2010-11 2011-12 2012-13
Capacity MW 450 450 450
Gross Station Heat Rate Kcal/kWh 3200 3200 3200
Secondary fuel oil consumption ml/kWh 12.00 10.00 10.00
Average calorific value of oil Kcal/l 10496 10480 10502
Average calorific value of Coal Kcal/Kg 2822 3213 3235
Weighted average price of oil Rs./Kl 39426 50691 49112
Average landed cost of coal Rs./MT 2552 2507 2841
Rate energy charges from Oil Paisa/kWh 47.31 50.69 49.11
Heat contributed from Oil Kcal/kWh 125.95 104.80 105.02
Heat contributed from Coal Kcal/kWh 3074.05 3095.20 3094.98
Specific consumption of coal Kg/kWh 1.09 0.96 0.96
Rate of energy from Coal Paisa/kWh 277.99 241.51 271.80
Variable Cost - Gross Paisa/kWh 325.30 292.20 320.92
Auxiliary Consumption % 15.78% 16.32% 15.00%
Variable Cost - Ex bus Paisa/kWh 386.26 349.19 377.55
Petition Paisa/kWh 398.07 420.64 430.69
Previous Tariff Order Paisa/kWh 304.73 312.4 308.05
TTPS
Table 105: Variable cost approved by the Commission for TTPS
Description Unit 2010-11 2011-12 2012-13
Capacity MW 1050 1050 1050
Gross Station Heat Rate Kcal/kWh 2500 2453 2453
Secondary fuel oil consumption ml/kWh 2.00 2.00 2.00
Average calorific value of oil Kcal/l 10570 10560 10639
Average calorific value of Coal Kcal/Kg 3210 3486 3405
Weighted average price of oil Rs./Kl 33764 42678 47916
Average landed cost of coal Rs./MT 3022 4057 3659
Rate energy charges from Oil Paisa/kWh 6.75 8.54 9.58
Heat contributed from Oil Kcal/kWh 21.14 21.12 21.28
Heat contributed from Coal Kcal/kWh 2478.86 2431.88 2431.72
Specific consumption of coal Kg/kWh 0.77 0.70 0.71
Rate of energy from Coal Paisa/kWh 233.37 283.02 261.31
Variable Cost - Gross Paisa/kWh 240.12 291.56 270.90
Auxiliary Consumption % 8.31% 8.50% 8.50%
Variable Cost - Ex bus Paisa/kWh 261.88 318.64 296.06
Petition Paisa/kWh 310.53 340.56 302.44
Previous Tariff Order Paisa/kWh 248.75 303.57 298.39
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 159
June 2013
MTPS
Table 106: Variable cost approved by the Commission for MTPS
Description Unit 2010-11 2011-12 2012-13
Capacity MW 840 840 840
Gross Station Heat Rate Kcal/kWh 2500 2500 2500
Secondary fuel oil consumption ml/kWh 2.00 2.00 2.00
Average calorific value of oil Kcal/l 10094 10104 10466
Average calorific value of Coal Kcal/Kg 3048 3562 3551
Weighted average price of oil Rs./Kl 33764 42678 47417
Average landed cost of coal Rs./MT 3071 4196 3916
Rate energy charges from Oil Paisa/kWh 6.75 8.54 9.48
Heat contributed from Oil Kcal/kWh 20.19 20.21 20.93
Heat contributed from Coal Kcal/kWh 2479.81 2479.79 2479.07
Specific consumption of coal Kg/kWh 0.81 0.70 0.70
Rate of energy from Coal Paisa/kWh 249.85 292.12 273.39
Variable Cost - Gross Paisa/kWh 256.61 300.65 282.87
Auxiliary Consumption % 8.51% 8.31% 9.00%
Variable Cost - Ex bus Paisa/kWh 280.47 327.90 310.85
Petition Paisa/kWh 279.72 329.05 289.45
Previous Tariff Order Paisa/kWh 242.83 267.76 269.74
NCTPS
Table 107: Variable cost approved by the Commission for NCTPS
Description Unit 2010-11 2011-12 2012-13
Capacity MW 630 630 630
Gross Station Heat Rate Kcal/kWh 2466 2393 2393
Secondary fuel oil consumption ml/kWh 2.00 2.00 2.00
Average calorific value of oil Kcal/l 10340 10359 10343
Average calorific value of Coal Kcal/Kg 3459 3768 3615
Weighted average price of oil Rs./Kl 30764 38806 47346
Average landed cost of coal Rs./MT 2559 3188 3407
Rate energy charges from Oil Paisa/kWh 6.15 7.76 9.47
Heat contributed from Oil Kcal/kWh 20.68 20.72 20.69
Heat contributed from Coal Kcal/kWh 2445.32 2372.28 2372.31
Specific consumption of coal Kg/kWh 0.71 0.63 0.66
Rate of energy from Coal Paisa/kWh 180.91 200.71 223.58
Variable Cost - Gross Paisa/kWh 187.06 208.47 233.05
Auxiliary Consumption % 8.89% 8.50% 8.50%
Variable Cost - Ex bus Paisa/kWh 205.31 227.84 254.70
Petition Paisa/kWh 208.09 231.38 243.70
Previous Tariff Order Paisa/kWh 190.16 203.51 212.37
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 160
June 2013
Gas based generating stations
Price of primary fuel
3.213 Commission in its last order has approved the fuel cost for FY 2010-11 based on
actual cost for FY 2010-11 and for FY 2011-12 and FY 2012-13 based on
submissions of TANGEDCO
3.214 TANGEDCO in its Petition has submitted the actual cost of fuel for FY 2010-11 and
FY 2011-12 while estimated the fuel cost for FY 2012-13. The prices of primary fuel
approved by the Commission in its last tariff order and filed by TANGEDCO in its
current MYT Petition are tabulated below:
Table 108: Fuel price for gas based stations approved by the Commission in last order and filed by
TANGEDCO in its current Petition
Name of the Power
Station Units
As per last year tariff order Petition
FY 2010-
11
FY 2011-
12
FY 2012-
13
FY 2010-
11
FY 2011-
12
FY 2012-
13
Tirumakottai GTPS Rs./SCM 8.55 8.55 8.55 7.25 8.45 9.72
Kuttalum GTPS Rs./SCM 8.55 8.55 8.55 7.32 8.55 9.53
Basin Bridge GTPS Rs./MT 33440 40440 40440 54260.00 56890.00 48630.00
Valathur - Unit 1 Rs./SCM 8.55 8.93 8.93 8.25 8.00 17.08
Valathur - Unit 2 Rs./SCM 8.93 8.93 8.25 8.00 17.08
3.215 In response to additional information sought by the Commission, TANGEDCO has
submitted the monthly actual fuel cost of its gas based plants in FY 2012-13 (Upto
Feb 2013). Commission has estimated the weighted average fuel cost based on the
information submitted by TANGEDCO. In FY 2012-13, KGTPS was operational only
in Feb 2013 and hence for KGTPS Commission has considered the gas price
equivalent to that of weighted average gas price of TGTPS. The weighted average
fuel prices considered by the Commission for FY 2012-13 are tabulated below.
Table 109: Weighted average fuel prices for gas based plants for FY 2012-13 (Upto Feb 2013)
Power Plant Units Cost
Tirumakottai GTPS Rs./SCM 9.32
Kuttalum GTPS Rs./SCM 9.32
Basin Bridge GTPS Rs./MT 40625
Valathur - Unit 1 Rs./SCM 8.76
Valathur - Unit 2 Rs./SCM 8.78
3.216 Since TANGEDCO has submitted the actual fuel cost for FY 2010-11 and FY 2011-
12, Commission has considered the TANGEDCO’s submission while for FY 2012-13
Commission has considered its estimate for weighted average fuel cost based on
actual fuel cost data submitted by TANGEDCO. The fuel cost for gas based stations
approved by the Commission for the first control period is tabulated below:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 161
June 2013
Table 110: Fuel cost approved by the Commission for gas based stations
Name of the Power
Station Units
Petition Commission
FY 2010-
11
FY 2011-
12
FY 2012-
13
FY 2010-
11
FY 2011-
12
FY 2012-
13
Tirumakottai GTPS Rs./SCM 7.25 8.45 9.72 7.25 8.45 9.32
Kuttalum GTPS Rs./SCM 7.32 8.55 9.53 7.32 8.55 9.32
Basin Bridge GTPS Rs./MT 54260.00 56890.00 48630.00 54260 56890 40625
Valathur - Unit 1 Rs./SCM 8.25 8.00 17.08 8.25 8.00 8.76
Valathur - Unit 2 Rs./SCM 8.25 8.00 17.08 8.25 8.00 8.78
Gross calorific value
3.217 For gas based stations, Commission in its last order has approved a gross calorific
value of 10000 kCal/SCM considering the fact that TNEB is making payment
corresponding to GCV of 10000 Kcal / SCM and whenever the GCV is lesser than
10000 kcal/SCM, proportionate rebate is allowed.
3.218 TANGEDCO in its Petition has filed the GCV in accordance to the Commission’s
approval and hence Commission is accepting the submission of GCV for the purpose
of energy calculations. The GCV approved by the Commission for the first control
period is given below.
Table 111: Gross calorific value of primary fuel approved for gas based stations
Name of the
Power Station Units
As per last year tariff
order Petition Commission
FY
11
FY
12
FY
13
FY
11
FY
12
FY
13
FY
11
FY
12
FY
13
Tirumakottai
GTPS kCal/SCM 10000 10000 10000 10000 10000 10000 10000 10000 10000
Kuttalum GTPS kCal/SCM 10000 10000 10000 10000 10000 10000 10000 10000 10000
Basin Bridge
GTPS kCal/Kg 10572 10572 10572 10572 10972 10572 10572 10972 10572
Valathur - Unit 1 kCal/SCM 10000 10000 10000 10000 11000 10000 10000 11000 10000
Valathur - Unit 2 kCal/SCM 10000 10000 10000 10000 11000 10000 10000 11000 10000
Station heat rate
3.219 TANGEDCO in its Petition sought relaxation in station heat rate (SHR) for BBGTPS. Commission has already relaxed the SHR norms for BBGTPS in its tariff order dated
31st July 2010. For remaining stations, the SHR proposed by the Petitioner are in line
with Commission’s approval. SHR being a controllable parameter, Commission is
considering the SHR for gas based stations as approved in its last tariff order.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 162
June 2013
Table 112: Station heat rate approved by the Commission for gas based stations
Name of the
Power Station
As per last year tariff order Petition Commission
FY 11 FY 12 FY 13 FY 11 FY 12 FY 13 FY 11 FY 12 FY 13
Tirumakottai
GTPS 1845 1850 1850 1847 1898 1813 1845 1850 1850
Kuttalum GTPS 1850 1850 1850 1888 1871 1850 1850 1850 1850
Basin Bridge
GTPS 3230 3219 3219 3133 3221 3311 3230 3219 3219
Valathur - Unit 1 1790 1850 1850 1874 1725 1763 1790 1850 1850
Valathur - Unit 2 - 1850 1850 - 1833 1991 0 1850 1850
3.220 In chapter 3, Commission has stated that it is considering the auxiliary consumption
as proposed by the Petitioner only for arriving at the energy availability purposes. For
the purpose of estimation of variable cost per unit, Commission has used the auxiliary
consumption as approved in the last tariff order. However, for BBGTPS Commission
has accepted the submission of TANGEDCO for FY 2012-13.
Table 113: Auxiliary consumption considered by the Commission for the purpose of variable cost
calculations
Name of the Power
Station
Last Order Petition Commission
FY 11 FY 12 FY 13 FY 11 FY 12 FY 13 FY 11 FY 12 FY 13
Tirumakottai GTPS 6.19% 6.00% 6.00% 6.87% 6.49% 5.97% 6.19% 6.00% 6.00%
Kuttalum GTPS 6.83% 6.67% 6.00% 7.28% 7.32% 6.00% 6.83% 6.67% 6.00%
Basin Bridge GTPS 0.62% 0.30% 3.43% 0.65% 1.92% 0.51% 0.62% 0.30% 0.51%
Valathur - Unit 1 5.52% 5.87% 6.00% 5.90% 7.00% 6.16% 5.52% 5.87% 6.00%
Valathur - Unit 2 0.00% 5.84% 6.00% 5.90% 7.00% 6.16% 0.00% 5.84% 6.00%
Variable Cost for Gas based stations
3.221 Based on above submissions, the Commission has calculated the variable cost for
various gas based power stations of TANGEDCO which is tabulated as under. For
transportation charges, Commission has considered the submission of TANGEDCO
as they are in line with Commissions approval in the last tariff order.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 163
June 2013
TGTPS
Table 114: Variable cost approved for TGTPS
Description Unit 2010-11 2011-12 2012-13
Capacity MW 108 108 108
Gross Station Heat Rate Kcal/kWh 1845 1850 1850
Average calorific value of gas Kcal/SCM 10000 10000 10000
Average Cost of Gas Rs./ SCM 7.25 8.45 9.32
Rate of energy from Gas Ps/ kWh 133.76 156.33 172.42
Auxiliary Consumption % 6.19% 6.00% 6.00%
Rate of energy - Net Ex bus Ps/ kWh 142.59 166.30 183.43
Net Generation MU 271.08 659.94 682.38
Total Cost excluding Transportation Rs. Crore 38.65 109.75 125.17
Transportation Cost Rs. Crore 4.67 7.11 1.87
Total Cost Rs. Crore 43.32 116.86 127.04
Variable Cost Ps/ kWh 159.82 177.08 186.17
Petition Ps/ kWh 161.01 182.30 190.11
Previous Tariff Order Ps/ kWh 175.99 175.72 176.12
KGTPS
Table 115: Variable cost approved for KGTPS
Description Unit 2010-11 2011-12 2012-13
Capacity MW 101 101 101
Gross Station Heat Rate Kcal/kWh 1850 1850 1850
Average calorific value of gas Kcal/SCM 10000 10000 10000
Average Cost of Gas Rs./ SCM 7.32 8.55 9.32
Rate of energy from Gas Ps/ kWh 135.42 158.18 172.42
Auxiliary Consumption % 6.83% 6.67% 6.00%
Rate of energy - Net Ex bus Ps/ kWh 145.35 169.48 183.43
Net Generation MU 0.00 383.02 51.09
Total Cost excluding Transportation Rs. Crore 0.00 64.91 9.37
Transportation Cost Rs. Crore 0.00 7.11 1.87
Total Cost Rs. Crore 0.00 72.02 11.24
Variable Cost Ps/ kWh
188.04 220.03
Petition Ps/ kWh
191.17 205.10
Previous Tariff Order Ps/ kWh 216.59 184.97 180.21
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 164
June 2013
BBGTPS
Table 116: Variable cost approved for BBGTPS
Description Unit 2010-11 2011-12 2012-13
Capacity MW 120 120 120
Gross Station Heat Rate Kcal/kWh 3230 3219 3219
Average calorific value of gas Kcal/Kg 10572 10972 10572
Average Cost of Fuel Rs./ MT 54260.00 56890.00 40625.00
Rate of energy from Fuel Ps/ kWh 1657.77 1669.06 1236.96
Auxiliary Consumption % 0.62% 0.30% 0.51%
Rate of energy - Net Ex bus Ps/ kWh 1668.12 1674.08 1243.31
Net Generation MU 38.78 29.40 0.41
Total Cost excluding Transportation Rs. Crore 64.69 49.22 0.51
Transportation Cost Rs. Crore 0.00 0.00 0.00
Total Cost Rs. Crore 64.69 49.22 0.51
Variable Cost Ps/ kWh 1668.12 1674.08 1243.31
Petition Ps/ kWh 1618.51 1679.54 1538.64
Previous Tariff Order Ps/ kWh 1028.58 1262.00 1278.15
VGTPS - 1
Table 117: Variable cost approved for VGTPS - 1
Description Unit 2010-11 2011-12 2012-13
Capacity MW 95 95 95
Gross Station Heat Rate Kcal/kWh 1790 1850 1850
Average calorific value of gas Kcal/SCM 10000 11000 10000
Average Cost of Gas Rs./ SCM 8.25 8.00 8.76
Rate of energy from Gas Ps/ kWh 147.68 134.55 162.06
Auxiliary Consumption % 5.52% 5.87% 6.00%
Rate of energy - Net Ex bus Ps/ kWh 156.30 142.94 172.40
Net Generation MU 301.54 612.56 423.53
Total Cost excluding Transportation Rs. Crore 47.13 87.56 73.02
Transportation Cost Rs. Crore 3.58 3.58 3.65
Total Cost Rs. Crore 50.71 91.14 76.67
Variable Cost Ps/ kWh 168.18 148.78 181.02
Petition Ps/ kWh 176.17 142.04 346.48
Previous Tariff Order Ps/ kWh 165.40 188.62 177.70
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 165
June 2013
VGTPS - 2
Table 118: Variable cost approved for VGTPS – 2
Description Unit 2010-11 2011-12 2012-13
Capacity MW
92 92
Gross Station Heat Rate Kcal/kWh
1850 1850
Average calorific value of gas Kcal/SCM
11000 10000
Average Cost of Gas Rs./ SCM
8.00 8.78
Rate of energy from Gas Ps/ kWh
134.55 162.43
Auxiliary Consumption %
5.84% 6.00%
Rate of energy - Net Ex bus Ps/ kWh
142.89 172.80
Net Generation MU
414.44 455.83
Total Cost excluding Transportation Rs. Crore
59.22 78.77
Transportation Cost Rs. Crore
0.00 0.00
Total Cost Rs. Crore
59.22 78.77
Variable Cost Ps/ kWh
142.89 172.80
Petition Ps/ kWh
142.04 346.48
Previous Tariff Order Ps/ kWh
165.42 178.77
Hydro Generation Circles
3.222 The Commission in last tariff order has determined the primary energy charges for
hydro generating stations on account of water charges, lubricants etc. The primary
energy charges claimed by TANGEDCO in its Petition for hydro generating stations
are in accordance with the Commission’s approval except for Tirunelveli hydro
generation circle. However, TANGEDCO has not provided any reasons for increase
in primary energy charges for Tirunelveli hydro generation circle in its Petition. In
view of the above submissions, Commission has considered the primary energy
charges as approved in its last tariff order.
Table 119: Primary energy charges approved for Hydro Generation Circles (Rs. Cr)
Generation
Circles
FY 2010-11 FY 2011-12 FY 2012-13
Last
Order Petition Commission
Last
Order Petition Commission
Last
Order Petition Commission
Erode 0.03 0.00 0.03 0.04 0.10 0.04 0.04 0.10 0.04
Kundah 0.22 0.03 0.22 0.22 0.01 0.22 0.23 0.01 0.23
Kadamparai 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Tirunelveli 0.25 0.95 0.25 0.25 2.83 0.25 0.26 2.97 0.26
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 166
June 2013
Wind Generating Stations
3.223 The Commission in Tariff Order dated 31st July 2010 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 31st July 2010 order.
3.224 In its Petition TANGEDCO has considered the transfer price of Rs. 2.75 per unit as cost of generation from its wind mills in accordance to Commission’s order. Hence
Commission is accepting the TANGEDCO submission and is approving the cost of
wind generation from its own wind mills at Rs. 2.75 per unit.
Power Purchase from other sources
3.225 Commission in its last order has approved the power purchase for FY 2010-11
considering the actual purchase, for FY 2011-12 based on revised submission of
TANGEDCO and for FY 2012-13 using merit order dispatch principle.
3.226 In this Petition TANGEDCO has claimed the power purchase expenses for FY 2010-
11 (for five months) based on audited accounts, for FY 2011-12 based on provisional
accounts and for FY 2012-13 estimated based on actual power purchase during the
previous two financial years. However, while considering the power purchase in its
Petition, TANGEDCO has excluded the wheeling units in accordance to the approach
adopted by the Commission in its last tariff order.
3.227 This section details out the approach adopted by the Commission in this true-up and
review exercise for the first control period.
Central generating stations
3.228 Commission in its last order has approved the power purchase quantum based on the
submissions of TANGEDCO, CERC provisional and final orders and considering a
5% escalation in variable cost. The power purchase expenses allowed by the
Commission in its last tariff order have been tabulated below.
Table 120: Power purchase expenses approved from central generating stations in last tariff order
Particulars
2010-11 2011-12 2012-13
Quantum Total Cost Quantum Total Cost Quantum Total Cost
MU Rs. Crore MU Rs. Crore MU Rs. Crore
NLC-TS-I 3066 630 3066 655 3066 658
NLC-TS-II (Stage-I) 3042 532 3242 769 3272 812
NLC-TS-II (Stage-II)
NLC-TS-I Expansion 1509 453 1609 505 1624 516
NTPC SR (I & II) 4039 806 4139 504 4164 909
NTPC SR (III) 1024 262 1105 862 1125 305
NTPC ER 735 224 885 291
52
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 167
June 2013
Particulars
2010-11 2011-12 2012-13
Quantum Total Cost Quantum Total Cost Quantum Total Cost
MU Rs. Crore MU Rs. Crore MU Rs. Crore
NTPC - Talcher II 3664 909 3690 324 3705 1127
Kayankulam 854 786 205 1082 0 0
MAPS 1399 277 1499 267 1508 321
KAIGA 860 263 1107 304 1178 390
Simahadri 328 349 1415 330
Kudankulam 0 106 1716 540
NLC-TS-
IIExpansion 0 0 1318 264
MAPS (Addl.) 518 155
NTPC-TNEB (JV) 2029 588
UI 1441 472 750 0 0 4
Total 21633 5613 21625 5784 26638 7473
3.229 TANGEDCO in its Petition has filed the power purchase expenses from CGS based
on audited accounts for FY 2010-11 and provisional accounts for FY 2011-12. For FY
2012-13, TANGEDCO has estimated the power purchase cost considered an
escalation of 5% on fixed charges and 4% on per unit variable charges and taking the
power purchase expenses for FY 2012-13 as a base.
3.230 In response to additional information sought by the Commission, TANGEDCO has
provided a provisional estimate for actual power purchase expenses incurred during
FY 2012-13. The provisional estimate of actual power purchase expenses with respect
to CGS plants submitted by TANGEDCO is given below.
Table 121: Provisional estimate of actual power purchase from CGS for FY 2012-13 submitted by
TANGEDCO
Source Units
(MU)
Variable cost Fixed cost Total cost
Rs./Unit Rs. Cr Rs./Unit Rs. Cr Rs./Unit Rs. Cr
Neyveli - TS – I 3,189 2.24 714 1 319 3.24 1,033
Neyveli - TS - I –
Expansion 1,629 1.8 294 1.31 213 3.11 507
Neyveli - TS - II 3,291 1.9791 651.35 0.62 204 2.6 855
NTPC-SR I & II 4,149 1.68 697 0.6 250 2.28 947
NTPC-SR III 982 2 196 1.12 110 3.12 306
NTPC-Talcher - Stage II 3,405 1.41 481 0.83 283 2.24 764
NTPC-Kayankulam - - - - -
-
NTPC-Eastern Region 319 2.04 65 0.91 29 2.95 94
NTPC-Simhadri 1,079 1.99 214 1.77 191 3.75 405
NTPC-Dadri - - - - -
-
NTECL/Vallur 488 2.09 102 2.56 125 4.66 227
NPCIL-MAPS 1,775 2.04 361
2.03 361
Kaiga Atomic 1,261 3.02 381
3.02 381
Total 21,567 1.93 4,156 0.80 1,724 2.73 5,880
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 168
June 2013
3.231 Commission is accepting the power purchase cost from CGS with respect to FY 2010-
11 and FY 2011-12 as TANGEDCO submission is based on audited accounts and
provisional accounts for FY 2010-11 and FY 2011-12 respectively. For FY 2012-13,
Commission is approving the power purchase expenses based on provisional estimate
of actual power purchase submitted by TANGEDCO. The power purchase expenses
approved by the Commission during the first control period are tabulated below.
Table 122: Power purchase from CGS approved by the Commission in FY 2010-11
Source
Petition Commissions Approval
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charges
(Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
NTPC SR
(I&II) 1658 69 1.60 266 334 1658 69 1.60 266 334
NTPC SR
III 449 57 1.49 67 124 449 57 1.49 67 124
NLC TS - I 1213 57 1.57 190 247 1213 57 1.57 190 247
NLC TS -
II 1244 129 0.70 87 216 1244 129 0.70 87 216
NLC TS
Expansion I 631 84 2.89 182 266 631 84 2.89 182 266
NTPC
Talcher 1542 136 1.66 256 392 1542 136 1.66 256 392
NTPC
Simhadri 0 - - - - 0 0 0.00 0 0
MAPS 591 - 2.02 119 119 591 0 2.02 119 119
KAIGA 454 - 3.08 140 140 454 0 3.08 140 140
NTPC
Kayakulum 343 106 7.15 245 351 343 106 7.15 245 351
NTPC ER 402 23 2.41 97 120 402 23 2.41 97 120
Total 8528 661 1.93 1,649 2,310 8528 661 1.93 1649 2310
Table 123: Power purchase from CGS approved by the Commission in FY 2011-12
Source
Petition Commissions Approval
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charges
(Rs.
/Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charges
(Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
NTPC SR
(I&II) 4106 217 1.59 652 869 4106 217 1.59 652 869
NTPC SR
III 1048 88 1.87 196 284 1048 88 1.87 196 284
NLC TS - I 3146 155 1.65 521 676 3146 155 1.65 521 676
NLC TS -
II 3167 197 1.94 615 812 3167 197 1.94 615 812
NLC TS
Expansion I 1526 212 1.82 277 489 1526 212 1.82 277 489
NTPC
Talcher 3622 284 2.04 741 1025 3622 284 2.04 741 1025
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 169
June 2013
Source
Petition Commissions Approval
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charges
(Rs.
/Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charges
(Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
NTPC
Simhadri 468 74 2.19 103 176 468 74 2.19 103 176
MAPS 1604 0 1.99 319 319 1604 0 1.99 319 319
KAIGA 1171 0 3.12 366 366 1171 0 3.12 366 366
NTPC
Kayakulum 205 65 9.87 203 268 205 65 9.87 203 268
NTPC ER 465 43 2.89 135 178 465 43 2.89 135 178
NTPC
Dadri 101 15 2.62 26 41 101 15 2.62 26 41
Total 20630 1352 2.01 4152 5503 20630 1352 2.01 4152 5503
Table 124: Power purchase from CGS approved by the Commission in FY 2012-13
Source
Petition Commissions Approval
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charges
(Rs.
/Unit )
Variable
Cost
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charges
(Rs.
/Unit )
Variable
Cost
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
NTPC SR
(I&II) 4164 228 1.65 688 916 4149 250 1.68 697 947
NTPC SR
III 1074 93 1.94 209 301 982 110 2.00 196 306
NLC TS - I 2937 163 1.72 505 668 3189 319 2.24 714 1033
NLC TS - II 3450 207 2.02 696 903 3291 204 1.98 651 855
NLC TS
Expansion I 1749 223 1.89 330 553 1629 213 1.80 293 507
NTPC
Talcher 3567 298 2.13 759 1057 3405 283 1.41 480 763
NTPC
Simhadri 599 77 2.28 136 214 1079 191 1.99 215 405
MAPS 1986 0 2.07 411 411 1775 0 2.04 362 362
KAIGA 1278 0 3.25 415 415 1261 0 3.02 381 381
NTPC
Kayakulum 0 0 0.00 0 0 0 0 0.00 0 0
NTPC ER 342 45 3.01 103 148 319 29 2.04 65 94
NTPC
Dadri 123 16 2.73 34 49 0 0 0.00 0 0
NTPC
Vallur 910 0 3.50 319 319 488 125 2.09 102 227
Kudunkulum 178 0 3.50 62 62 0
NLC TS - II
Expansion 397 0 3.50 139 139 0
Total 22755 1351 2.11 4806 6156 21567 1723 1.93 4157 5880
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 170
June 2013
Independent Power Producers
3.232 Commission in its last order has approved the power purchase quantum based on the
submissions of TANGEDCO and considering merit order despatch. Commission has
only allowed fixed cost for those IPPs which do not get scheduled as per merit order
despatch. The power purchase expenses allowed by the Commission in its last tariff
order have been tabulated below.
Table 125: Power purchase expenses approved from IPPs in last tariff order
Particulars
2010-11 2011-12 2012-13
Quantum
Total
Cost Quantum
Total
Cost Quantum
Total
Cost
MU
Rs.
Crore MU
Rs.
Crore MU
Rs.
Crore
GMR 875 779 962 1062 154
Samalpatti 378 385 351 459 94
PPN 2494 1202 1483 1233 309
Madurai 353 370 333 466 140
ST-CMS 1652 633 1711 684 1795 769
ABAN 820 246 776 252 810 261
Penna 370 118 366 125 375 128
Total 6942 3732 5982 4281 2980 1855
3.233 TANGEDCO in its Petition has filed the power purchase expenses from IPPs based
on audited accounts for FY 2010-11 and provisional accounts for FY 2011-12. For FY
2012-13, TANGEDCO has estimated the power purchase cost considered an
escalation of 5% on fixed charges and 4% on per unit variable charges and taking the
power purchase expenses for FY 2012-13 as a base.
3.234 Based on the TANGEDCO’s Petition Commission is of the view that power purchase
estimates for ABAN and Penna for FY 2012-13 have been interchanged inadvertently.
Similar type and trivial discrepancies have been observed in other filings related to
other expenses. Commission directs TANGEDCO to be careful in filing its Petition
and minimize the discrepancies in its data from next filing.
3.235 In response to additional information sought by the Commission, TANGEDCO has
provided a provisional estimate for actual power purchase expenses incurred during
FY 2012-13. The provisional estimate of actual power purchase expenses with respect
to IPPs submitted by TANGEDCO is given below.
Table 126: Provisional estimate of actual power purchase from IPPs for FY 2012-13 submitted by
TANGEDCO
Source Units
(MU)
Variable cost Fixed cost Total cost
Rs./Unit Rs. Cr Rs./Unit Rs. Cr Rs./Unit Rs. Cr
GMR Vasavi 610 10.41 635 2.74 167 13.15 802
Samalpatti 329 10.18 335 3.31 109 13.49 444
Pillaiperumalnallur 1,785 8.55 1,526 1.64 292 10.19 1,818
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 171
June 2013
Source Units
(MU)
Variable cost Fixed cost Total cost
Rs./Unit Rs. Cr Rs./Unit Rs. Cr Rs./Unit Rs. Cr
Madurai Power Corpn 357 10.96 392 3.09 110 14.05 502
Neyveli Zero Unit
(STCMS) 1,665 2.32 385 2.18 364 4.50 749
Aban 850 2.00 170 1.38 117 3.38 288
Penna 375 2.04 77 1.54 58 3.59 135
Total 5,971 5.89 3,519 2.04 1,218 7.93 4,737
3.236 Commission is accepting the power purchase cost from IPPs with respect to FY 2010-
11 and FY 2011-12 as TANGEDCO submission is based on audited accounts and
provisional accounts for FY 2010-11 and FY 2011-12 respectively. For FY 2012-13,
Commission is approving the power purchase expenses based on provisional estimate
of actual power purchase submitted by TANGEDCO. The power purchase expenses
approved by the Commission during the first control period are tabulated below.
Table 127: Power purchase from IPPs approved by the Commission in FY 2010-11
Source
Petition Commissions Approval
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charges
(Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)*
Energy
Charges
(Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
GMR 393 0 9.54 375 375 393 0 9.54 375 375
Samalpatti 179 0 10.68 191 191 179 0 10.68 191 191
PPN 1072 0 5.16 554 554 1072 0 5.16 554 554
Madurai 168 0 10.77 181 181 168 0 10.77 181 181
ST-CMS 606 0 4.84 293 293 606 0 4.84 293 293
ABAN 357 0 3.17 113 113 357 0 3.17 113 113
Penna 148 0 3.30 49 49 148 0 3.30 49 49
Total 2923 0 6.01 1757 1757 2923 0 6.01 1757 1757
*Capacity charges of five months are included in energy charges.
Table 128: Power purchase from IPPs approved by the Commission in FY 2011-12
Source
Petition Commissions Approval
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charges
(Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charges
(Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
GMR 858 159 9.45 811 969 858 159 9.45 811 969
Samalpatti 292 116 10.18 298 414 292 116 10.18 298 414
PPN 1491 286 6.48 967 1252 1491 286 6.48 967 1252
Madurai 282 124 10.47 295 419 282 124 10.47 295 419
ST-CMS 1688 315 2.23 377 691 1688 315 2.23 377 691
ABAN 760 107 1.77 134 241 760 107 1.77 134 241
Penna 360 56 1.79 64 121 360 56 1.79 64 121
Total 5731 1162 5.14 2946 4107 5731 1162 5.14 2946 4107
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 172
June 2013
Table 129: Power purchase from IPPs approved by the Commission in FY 2012-13
Source
Petition Commissions Approval
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charges
(Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charges
(Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
GMR 615 166 9.83 604 771 610 167 10.41 635 802
Samalpatti 273 122 10.59 289 411 329 109 10.18 335 444
PPN 1541 300 6.74 1039 1339 1785 292 8.55 1526 1819
Madurai 285 131 10.88 310 441 357 110 10.96 391 502
ST-CMS 1794 330 2.32 416 747 1665 364 2.32 386 749
ABAN 366 112 1.84 67 179 850 117 2.00 170 287
Penna 759 59 1.86 141 200 375 58 2.04 77 135
Total 5633 1220 5.09 2867 4087 5971 1218 5.89 3519 4737
Non conventional energy sources and Captive power plants
3.237 Commission in its last order has approved the power purchase expenses from
renewable energy sources and captive power plants based on the submissions of
TANGEDCO and considering rates approved by the Commission for procurement of
power from renewable energy sources. Also, Commission has not considered the
wheeling energy while approving the power purchase expenses for renewable energy
sources and captive power plants. The power purchase expenses allowed by the
Commission in its last tariff order from these sources have been tabulated below.
Table 130: Power purchase expenses approved from non conventional energy sources and captive power
plants in last tariff order
Particulars
2010-11 2011-12 2012-13
Quantum Total
Cost Quantum
Total
Cost Quantum
Total
Cost
MU Rs.
Crore MU
Rs.
Crore MU
Rs.
Crore
CPP 460 161 575 243 582 258
Solar 2.07 0.93 10.44 4.87 10.78 5.14
Wind 5263 1585 5130 1545 5408 1629
Cogeneration 997 351 1135 409 1202 430
Biomass 110 49 115 52 56 25
Total 6833 2147 6965 2254 7258 2347
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 173
June 2013
3.238 In response to data gaps and additional information sought by the Commission,
TANGEDCO has revised the power purchase expenses from these sources.
TANGEDCO has submitted that the treatment of wheeling units has not been
accounted properly in its Petition and hence accordingly has revised the quantum and
expenses from these sources. In addition, TANDECO has submitted the provisional
estimate of actual power purchase from these units net of wheeling units for FY 2012-
13. The revised power purchase expenses submitted by TANGEDCO from these
sources are tabulated below.
Table 131: Revised power purchase expenses from renewable energy sources and CPP submitted by
TANGEDCO
Particulars
2010-11 2011-12 2012-13
Quantum Total Cost Quantum Total Cost Quantum Total Cost
MU Rs. Crore MU Rs. Crore MU Rs. Crore
CPP 218 93.95 557 232.23 595 234.43
Solar 2.07 0.89 11.00 4.59 16.00 7.39
Wind -148 58.00 5711 1758.99 7145 2229.24
Cogeneration 388 255.57 1285 482.01 1428 501.23
Biomass 38 17.81 73 24.37 11 4.90
Total 498 426.22 7637 2502.19 9195 2977.18
3.239 In view of revised submission being in line with Commission’s approach and
TANGEDCO properly accounting the wheeling units, the Commission is approving
the power purchase expenses from renewable energy sources and CPP based on
TANGEDCO’s revised submission. The approved power purchase expenses from
these sources are tabulated below.
Table 132: Power purchase expenses from renewable energy sources and CPP approved by the
Commission for FY 2010-11
Particulars
Petition Commission
Quantum Cost Cost Quantum Total Cost Cost
MU Rs. Crore Rs./Unit MU Rs. Crore Rs./Unit
CPP 218 36 1.63 218 93.95 4.31
Solar 2 1 4.50 2.07 0.89 4.31
Wind* -148 58
-148 58
Cogeneration 388 256 6.59 388 256 6.59
Biomass 38 18 4.69 38 18 4.69
Total 498 368
498 426
*Wheeling units from Nov to March are more than actual wind generation
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 174
June 2013
Table 133: Power purchase expenses from renewable energy sources and CPP approved by the
Commission for FY 2011-12
Particulars
Petition Commission
Quantum Cost Cost Quantum Total Cost Cost
MU Rs. Crore Rs./Unit MU Rs. Crore Rs./Unit
CPP 2,778 473 1.70 557 232 4.17
Solar 11 9 7.88 11.00 4.59 4.17
Wind 5,893 2,379 4.04 5711 1759 3.08
Cogeneration 1,285 650 5.06 1285 482 3.75
Biomass 73 33 4.52 73 24 3.35
Total 10,040 3,543 3.53 7637 2502 3.28
Table 134: Power purchase expenses from renewable energy sources and CPP approved by the Commission for FY 2012-13
Particulars
Petition Commission
Quantum Cost Cost Quantum Total Cost Cost
MU Rs. Crore Rs./Unit MU Rs. Crore Rs./Unit
CPP 705 307 4.36 595 234 3.94
Solar 21 10 4.73 16.00 7.39 4.62
Wind 5,067 1,649 3.26 7145 2229 3.12
Cogeneration 1,771 688 3.89 1428 501 3.51
Biomass 783 372 4.74 11 5 4.45
Total 8,347 3,026 3.63 9195 2977 3.24
Power purchase from traders and other sources
3.240 In the last tariff order Commission has approved the power purchase expenses from
traders at capped rate of Rs. 5.32 for FY 2010-11 and FY 2011-12. For FY 2012-13,
Commission has approved purchase from traders at 2000 MU at an average rate of Rs.
4.00/ kWh. However, Commission has directed TANGEDCO 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. The expenses for purchase of power
from traders as approved in the last tariff order are given below.
Table 135: Power purchase expenses approved from traders in last tariff order
Particulars
2010-11 2011-12 2012-13
Quantum
(MU)
Cost
(Rs.
Crore)
Cost
(Rs./
Unit)
Quantum
(MU)
Cost
(Rs.
Crore)
Cost
(Rs./Unit)
Quantum
(MU)
Cost
(Rs.
Crore)
Cost
(Rs./
Unit)
Traders 10540 5607 5.32 9400 5000 5.32 2000 800 4.00
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 175
June 2013
3.241 The power procurement filed by TANGEDCO from bilateral sources and exchange is
within the limits of the Commission’s approval for FY 2010-11 and FY 2011-12.
However, Commission has observed some discrepancies in the per unit rate of power
procured from traders. In response to this query TANGEDCO has revised the power
purchase expenses and units after properly adjusting the wheeling units. In addition,
TANGEDCO has submitted the actual purchase from these sources in FY 2012-13.
3.242 Apart from these sources, TANGEDCO has also procured power from UI and NTPC
NVVN. In response to Commission’s query TANGEDCO has revised the average UI
rate submitted for FY 2010-11 and FY 2011-12 and also submitted the revised power
purchase expenses from these sources. The revised power purchase expenses
submitted by TANGEDCO for procurement of power from traders, NTPC NVVN and
UI are tabulated below.
Table 136: Revised power purchase expenses submitted by TANGEDCO from traders and other sources
Particulars
2010-11 2011-12 2012-13
Quantum Total Cost Quantum Total
Cost Quantum
Total
Cost
MU Rs. Crore MU Rs.
Crore MU
Rs.
Crore
Traders - Bilateral and
Exchange 3085 1701 7395 3838 6,575 3,347
Traders - Exchange 1618 963 1032 360 213
UI 759 230 718 327 81 49
NTPC NVVN 181 91 694 262 35 16
Total 5643 2985 9838 3763 7051 3625
3.243 Commission is of the view that though UI is not a scheduled and an approved power,
TANGEDCO was required to over draw from the grid in cases where it was not able
to match the demand and supply. Also, the UI quantum has progressively decreased
indicating the better management of demand-supply. For FY 2010-11 and FY 2011-
12, the total expenses and quantum of power procured from traders and UI are within
the total approved quantum and expenses for FY 2010-11 and FY 2011-12. For FY
2012-13, though TANGEDCO has exceeded the quantum of power approved by the
Commission, there has been a decrease in purchase compared to FY 2011-12.
Commission is provisionally accepting the submission of TANGEDCO especially
when CoD of new plants is getting delayed. The power purchase expenses from these
sources approved for the control period are tabulated below.
Table 137: Power purchases expenses from other sources approved by the Commission for FY 2010-11
Particulars
Petition Commission
Quantum Cost Cost Quantum Total Cost Cost
MU Rs.
Crore Rs./Unit MU Rs. Crore Rs./Unit
Traders - Bilateral &
Exchange 4703 1897 4.03 4703 2664 5.66
UI 759 340 4.48 759 230 3.03
NTPC NVVN 181 91 5.03 181 91 5.01
Total 5,643 2,328 4.13 5643 2985 5.29
*Approved based on revised submission
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 176
June 2013
Table 138: Power purchases expenses from other sources approved by the Commission for FY 2011-12
Particulars
Petition Commission*
Quantum Cost Cost Quantum Total Cost Cost
MU Rs. Crore Rs./Unit MU Rs. Crore Rs./Unit
Traders - Bilateral &
Exchange 6206 1686 2.72 8427 3838 4.55
UI 718 403 5.61 718 327 4.56
NTPC NVVN 694 262 3.78 694 262 3.78
Total 7,617 2,351 3.09 9838 4427 4.50
*Approved based on revised submission
Table 139: Power purchases expenses from other sources approved by the Commission for FY 2012-13
Particulars
Petition Commission*
Quantum Cost Cost Quantum Total Cost Cost
MU Rs. Crore Rs./Unit MU Rs. Crore Rs./Unit
Traders - Bilateral &
Exchange 9,816 3,066 3.12 6935 3560 5.13
UI
81 49 6.09
NTPC NVVN 694 275.62 3.97 35 16 4.45
Total 10,510 3,342 3.18 7051 3625 5.14
*Approved based on revised submission
3.244 With respect to power purchase expenses, Commission gives following directives:
a) Considering the iterations that went in reconciling the power purchase expenses pertaining to wheeling units, Commission directs TANGEDCO to properly maintain
the power purchase expenses with and without wheeling units.
b) Commission has observed various discrepancies in power purchase expenses filing of
TANGEDCO. In response to Commission’s query, TANGEDCO has revised the
expenses after correcting the mistakes. Commission is taking a serious note of this
casual attitude in filing the power purchase expenses and directs TANGEDCO to file
its Petition properly from next tariff filling.
Power Grid Corporation of India Limited (PGCIL) Charges
3.245 TANGEDCO has proposed PGCIL charges as per audited accounts for FY 2010-11 and provisional accounts for FY 2011-12. Also, TANGEDCO has proposed
ABTPGCIL charges under PGCIL charges. In response to Commission’s query,
TANGEDCO has replied that they have inadvertently claimed ABTPGCIL charges
under PGCIL charges and these correspond to UI. Hence, Commission is not
approving these charges claimed by TANGEDCO.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 177
June 2013
3.246 For FY 2012-13, TANGEDCO has revised the PGCIL charges considering the provisional estimates of actual transmission charges incurred. Due to the fact that FY
2010-11, FY 2011-12 and FY 2012-13 are already over and as TANGEDCO has
provided the actual expenses incurred, Commission is accepting the submission of
TANGEDCO for PGCIL wheeling and reactive energy charges.
Table 140: PGCIL charges approved by the Commission for the first control period (Rs. Cr.)
Parameter
2010-11 2011-12 2012-13
Last
Order Petition Comm.
Last
Order Petition Comm.
Last
Order Petition Comm.
PGCIL - SR
and ER
wheeling 190 204 204 480 524 524 504 550 540
PGCIL -
Reactive
energy 5 5 17 17 18 15
ABTPGCIL 230 313 329
Total 190 438 208 480 854 541 504 897 555
Intrastate Transmission Charges
3.247 For FY 2010-11 and FY 2011-12, TANGEDCO has claimed actual intrastate
transmission charges paid to TANTRANSCO. For FY 2012-13, TANGEDCO has
estimated the transmission charges based on Commission’s tariff order on
“Determination of Intra-State Transmission Tariff and other related charges” dated
March 30, 2012.
3.248 Commission has considered the TANGEDCO’s submission for FY 2010-11 and FY
2011-12 as TANGEDCO has submitted the actual transmission expenses incurred.
However for FY 2012-13, considering the allotted capacity of TANGEDCO,
Commission has provisionally determined the transmission charges required to be
paid for FY 2012-13.
3.249 The intrastate transmission charges approved by the Commission for the first control
period are given below.
Table 141: Transmission Charges payable to TANTRANSCO for the first control period (Rs. Cr.)
Parameter
2010-11 2011-12 2012-13
Petition Commission Petition Commission Petition Commission
Transmission charges
payable to TANTRANSCO 509 509 1665 1665 3076 2847
Note: Transmission charges may undergo a change upon implementation of APTEL Order in
Appeal No. 102 of 2012.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 178
June 2013
Aggregate Revenue Requirement and Revenue Gap for the first control
period
3.250 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
thefollowing:-
(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”
3.251 Based on the approved expenses in the above sections of this Chapter, the Aggregate Revenue Requirement approved by the Commission for the first control period is
tabulated below:
Table 142: ARR approved by the Commission for the first control period (Rs. Cr.)
Parameter
Last year order Petition Commission
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
Expenses in respect of own
Generation 2232 6582 8939 3270 8761 8399 2894 7830 7635
Power Purchase Cost 7316 17800 11675 7200 16360 17508 7687 17082 17775
Annual Transmission
Charges payable to
TANTRANSCO
744 1917 3076 509 1665 3076 509 1665 2847
Operation and Maintenance
Expenses 1093 2728 2837 1388 3652 3691 1282 3327 3477
Depreciation 95 254 287 115 284 303 110 273 302
Interest on Long term loan 688 3150 3355 693 1917 2139 495 1053 1329
Other Debits & extra
ordinary items 12 29 29 11 38 27 11 14 17
Prior Period Debit/(Credit)
Charges 0 1052 0 0 0 0
Reasonable Return / Return
on Equity 65 236 331 0 0 0
Interest on Working Capital
164 466 701 0 0 0
Contribution to
Contingency Reserves 0 0 72 0 0 0
ARR 12180 32460 30198 13415 34431 36247 12987 31244 33382
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 179
June 2013
Non Tariff and Other Income
3.252 TANGEDCO has submitted in its petition, the Non tariff income for FY 2010-11 (5
months) based on audited accounts as Rs. 216.9 Crores as compared to Rs. 217.5
Crores approved in the last order. The Commission has accepted the actual as per
audited accounts for FY 2010-11. For the year FY 2011-12 TANGEDCO had filed an
amount of Rs. 643.7 Crores in its petition as against Rs. 624 Crores approved in the
last order. As per provisional accounts for the year it was found that the revenue was
only Rs. 553.0 Crores. The Commission has considered the actual as per the
provisional accounts. For the year FY 2012-13 Commission has considered the same
escalation as assumed by TANGEDCO for proposing NTI for the year. Therefore
based on data as per provisional accounts of FY 2011-12 and escalation rate as
provided by TANGEDCO, the Commission has approved NTI for the first control
period.
3.253 The other income mainly comprises of interest on staff loans and advances, income
from investments, income from trading, rebate on power purchase bills, interest on
staff welfare and gain on sale of fixed asset.
3.254 TANGEDCO in its petition has filed Other Income for FY 2010-11 and FY 2011-12
separately for Generation and Distribution business. The Commission on scrutiny of
the audited and provisional accounts found that the total income booked under the
head Other Income for TANGEDCO matches with the segregated incomes as
provided by TANGEDCO in its petition. Hence the Commission has approved the
Other Income as filed by TANGEDCO for FY 2010-11 and FY 2011-12. For FY
2012-13 the Commission has accepted the Other Income as projected by
TANGEDCO for its Distribution business. The table below captures the data filed by
TANGEDCO and approved Non Tariff Income and Other Income for FY 2010-11 to
FY 2012-13.
Table 143: Non Tariff and Other Income approved by the Commission (Rs. Cr)
Particulars Petition Approved
FY 11 FY 12 FY 13 FY 11 FY 12 FY 13
Non Tariff Income 216.94 643.66 688.82 216.94 553.00 592.36
Other Income 92.52 141.05 132.43 92.52 141.05 132.43
Total 309.46 784.71 821.25 309.46 694.05 724.79
Estimation of additional power purchase cost due to higher T&D loss
3.255 Regulation 3 (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:
“3 (ix). Mechanism for sharing approved gains or losses arising out of controllable
factors.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 180
June 2013
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
efficiency gains, if any, with respect to controllable parameters shall be shared
between the licensee and the consumer in the ratio of 2:1”
3.256 The Commission notes that the due to higher T&D loss compared to that approved by
the Commission in this order, additional power purchase cost incurred by
TANGEDCO is given below. The additional power purchase cost is estimated
considering the energy requirement and average power purchase cost at TN periphery.
For this purpose, Commission has assumed an interstate transmission loss of 4.38%
based on the submission of TANGEDCO.
Table 144: Additional power purchase cost for the first control period due to higher T&D losses
Parameter FY 2011 FY 2012 FY 2013
Energy input required at TN Periphery (Based on approved
sales and losses) - MU 25478 64224 60097
Energy available at TN Periphery (Considering 4.38% loss on
interstate purchase) - MU 27504 68623 65750
Power Purchase Cost 10581 24912 25409
Per unit Power Purchase Cost - TN Periphery 3.85 3.63 3.86
Additional Units – MU 2025 4398 5653
Additional Power Purchase Cost - Rs. Cr. 779 1597 2185
3.257 Regulation (25) of TNERC (Terms and Conditions for Determination of Tariff for
Intra state Transmission / Distribution of Electricity under MYT Framework)
Regulations, 2009, states as under:
“25) Aggregate Technical and Commercial loss ( AT & C )
The Commission shall fix benchmarks for reduction of losses and the licensee shall achieve
the target fixed for each year of the control period
.
The AT & C loss is a controllable item and the financial loss, if any, on account of
failure to achieve the target shall be borne by the Distribution licensee. The gains, if
any, on account of achieving the loss below the targeted level shall be shared with the
consumers.”
3.258 It is pertinent to mention that AT&C loss is usually calculated considering distribution
loss and AT&C loss being a controllable item, the Commission is of the view that
additional power purchase cost due to higher T&D loss cannot be passed onto
consumers. Hence, Commission is reducing the additional power purchase cost
estimated for higher T&D loss from the ARR of TANGEDCO while at net ARR for
the first control period. The net ARR approved for the first control period is tabulated
below:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 181
June 2013
Table 145: Net Revenue Requirement approved by the Commission for the first control period (Rs. Cr.)
Parameter
Last year order TANGEDCO filing Commission
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
Aggregate Revenue
requirement 12200 32460 30198 13415 34431 36247 12987 31244 33382
Less: Other income and
NTI 362 972 862 309 785 821 309 694 725
Less: Additional Power
Purchase cost due to
higher T&D loss
0 0 0 0 0 0 779 1597 2185
Net Revenue
Requirement 11838 31488 29336 13105 33646 35426 11898 28953 30472
Revenue from Sale of Power – FY 2010-11 and FY 2011-12
3.259 The following table shows the category-wise revenue for the last five months of FY
2010-11 and for FY 2011-12 as approved by the Commission. The revenue shown in
the table is based on the tariffs approved by the Commission for the respective years
and is exclusive of subsidy. The numbers are as per the audited accounts and
provisional accounts of TANGEDCO for the respective years after adjusting revenue
from wheeled units.
Table 146: Category wise Revenue for FY 2010-11(5 months) and FY 2011-12 as approved by the
Commission (Rs. Cr.)
Consumer Category
FY 2010-11 FY 2011-12
Revenue Revenue
High Tension Supply (HT)
I-A HT Industries 2,749 5,649
I-B Railway Traction 119 347
II-A Govt. Educational Inst. Hospitals, water supply etc. 232 581
II-B Pvt. Educational Inst., Cinema theatres & Studios 28 123
II-C Actual places of public worship, Mutts and Religious Inst. 3 9
III HT Commercial 554 1,311
IV Lift Irrigation, Co-operative societies - -
Supply to Other States (SWAP) 26 219
Sub Total HT 3,711 8,239
Low Tension Supply (LT)
I-A Domestic Purposes 1,038 2,889
I-B Huts in Village Panchayats, TAHDCO etc. - -
I-C Defence Colonies etc. Notified Tariff 2 9
II-A Public Lighting and Public Water Supply & Sewerage 219 526
II-B-1 Govt. Educational Inst., Hospitals, water supply etc. 98 279
II-B-2 Private Educational Inst., Cinema theatres & Studios 4 136
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 182
June 2013
Consumer Category
FY 2010-11 FY 2011-12
Revenue Revenue
IIC Actual places of public worship 22 25
IIIA 1 Cottage and Tiny Industries, 75 152
IIIA 2 Power Looms 38 121
IIIB Coffee grinding and Ice factories etc. and Industries not
covered under LT Tariff IIIA 786 1,968
IV Agriculture and Govt. seed farms - -
V Commercial and all categories of Consumers not covered under IA,
IB,IC, IIA, IIB, IIIA, III B and IV 1,156 3,035
VI Temporary supply: (a) Lighting and combined installation, (b) Lavish
illuminations 10 25
Sub Total LT 3,448 9,165
Total HT and LT 7,160 17,404
3.260 The Commission has accepted the actual revenue earned but has not allowed the
revenue corresponding to sale of power to Puducherry and wheeled units.
TANGEDCO has also filed revenue of Rs. 26 Crores and Rs. 219 Crores from SWAP
arrangements for the above two years respectively. The same has also been
considered by the Commission as part of revenue for TANGEDCO.
3.261 Commission has also considered the actual subsidy received by TANGEDCO in FY
2010-11 and FY 2011-12 during the true-up exercise. The total revenue approved by
the Commission is given below.
Table 147: Revenue approved by the Commission for FY 2010-11 and FY 2011-12 (Rs. Cr)
Parameter 2010-11 2011-12
Revenue from Sale of Power 7,159 17,404
Govt. Subsidy 689 2,071
Total 7,848 19,475
Revenue from Sale of Power – FY 2012-13
3.262 The following table shows the total HT and LT revenue for FY 2012-13 as per the petition and as revised and filed by TANGEDCO in its reply to data gaps.
Table 148: Revised revenue filed by TANGEDCO for FY 2012-13 (Rs. Crores)
Sl.
No. Particulars
As filed in the
petition Revised Filing
1 Total HT Revenue 8,689 7,768
2 Total LT Revenue 17,020 15,847
3 Total Revenue HT+LT 25,709 23,615
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 183
June 2013
3.263 The following table shows the category-wise revenue as filed by TANGEDCO in its reply to data gaps and as approved by the Commission for FY 2012-13 based on
revised sales estimates. The revenue has been calculated based on the approved tariff
for FY 2012-13. The revenue so projected is inclusive of subsidy from the GoTN.
Table 149: Revenue for FY 2012-13 as per the petition and as approved by the Commission (Rs. Cr)
Particulars Revised filing Approved
HT Consumer Category
I-A HT Industries 4,988 5,105
I-B Railway Traction 458 458
II-A Govt. Educational Inst. etc. 496 496
II-B Pvt. Educational Inst. etc. 155 155
III HT Commercial 1,155 1155
IV Lift Irrigation 1 1
V Temporary supply 176 176
Others (Sale to Puducherry) 338 0
Total HT 7,768 7,547
LT Consumer Category
I-A Domestic 5,848 5,962
I-B Huts 103 105
I-C LT bulk supply 4 4
II-A Public Lighting and Water Supply 908 908
II-B-1 Govt. Educational Inst. etc. 66 66
II-B-2 Pvt. Educational Inst. etc. 144 144
IIC Places of Public Worship 57 57
IIIA 1 Cottage and Tiny Industries 50 50
IIIA 2 Power Looms 384 384
IIIB L.T. Industries 2,674 2,674
IV L.T. Agriculture 1,940 1,940
V L.T. Commercial 3,627 3,627
VI Temporary supply 42 42
Total LT 15,847 15,963
Total HT + LT 23,615 23,510
3.264 Therefore the Revenue from sales for FY 2012-13 as approved by the Commission is
Rs. 23,510 Crores. This revenue is inclusive of the subsidy component.
Low Power Factor Surcharge
3.265 TANGEDCO in its reply to data gaps submitted collection made with respect to Low
power factor surcharge of Rs. 51.03 Crores for FY 2012-13. The Commission has
accepted the same and considered this revenue while computing the revenue gap for
the year.
3.266 The total revenue approved by the Commission including revenue from low power
factor surcharge for FY 2012-13 is Rs. 23561 Crs.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 184
June 2013
Revenue Gap for the first control period
3.267 On the basis of net revenue requirement and revenue approved by the Commission,
the Revenue Gap approved by the Commission for the first control period is tabulated
below.
Table 150: Revenue gap approved by the Commission (Rs. Cr.)
Parameter
Last year order TANGEDCO filing Commission
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
FY
2011
FY
2012
FY
2013
Net Revenue Requirement 11818 31488 29346 13105 33646 35426 11898 28953 30472
Less: Revenue from Tariffs
(including subsidy) 7651 18076 29347 7332 18763 25707 7848 19475 23561
Revenue Gap 4167 13412 -1 5773 14883 9719 4050 9478 6911
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 185
June 2013
A4: AGGREGATE REVENUE REQUIREMENT FOR THE SECOND
CONTROL PERIOD – FY 2013-14 TO FY 2015-16
Energy Sales
4.1 TANGEDCO has projected energy consumption using the historical trend method by
applying the category-wise Compounded Annual Growth Rate (3 years and 5 years
CAGR) appropriately. The growth factors have been corrected for the instances where
the trend appeared unreasonable. The sales growth has been projected on a yearly
basis, based on the actual consumption for the first half of 2012-13 and based on
TANGEDCO’s understanding on availability of power and impact of other external
factors.
4.2 TANGEDCO opines that the demand growth can be linked to the growth rate of the
State and the country which is estimated at around 8% in the Twelfth Plan and power
sector being one of the key sectors to support such growth will also grow at a similar
pace. Therefore, the growth has been linked to two elements namely the growth
within the State and the additional power available to meet unrestricted demand.
4.3 Considering the deficit situation in the State and implementation of R&C measures,
the historical trend alone were not considered while projecting sales for FY 2013-14.
TANGEDCO has projected an overall growth in sales for FY 2013-14 of around 16%
which is considered based on 8% sector growth rate and around 8% increase in
consumption due to additional availability of power.
a) HT Categories – The HT Industrial Category is facing 40% R&C
measures. These measures are expected to be relaxed in FY 2013-14 due
to availability of additional power. Therefore sales under this category are
expected to increase by 15% during FY 2013-14.
b) LT Categories – As reasoning for increase in consumption projected for
LT consumer categories, TANGEDCO has provided the following
remarks. Considering that large quantum of the additional power will be
available in FY 2013-14, major quantum has been projected for LT
consumers who are covered under load shedding. Domestic consumers
being a major group in the consumer mix has resulted in an increase of
23% over that of FY 2012-13.
TANGEDCO expects significant increase in Hut and Agriculture
Consumption for FY 2013-14 due to availability of power from upcoming
plants from own and central generating stations. It is expected that this
additional power will be used by LT category consumers for reduction of
load shedding hours which are currently prevailing in the State.
Considering the above factors, TANGEDCO has revised the growth rates
for Hut and Agriculture consumers on par with other LT consumers.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 186
June 2013
It is also expected that there will be a marginal reduction in growth rate for LT
Industries category as they would restart their operation from the existing
reduced production due to the power deficit situation.
4.4 Similarly, the sales growth was estimated for other categories of LT consumers based
on the connected load and number of consumers in each category.
Table 151: CAGR Growth in consumption as indicated in the petition as well as
submitted in reply to data gaps
Consumer Category As per petition Revised submission
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
HT Category
HT Industries 15% 16% 4% 15% 16% 4%
Commercial and Other HT 24% 20% 6% 24% 20% 6%
Lift Irrigation and co-ops (HT) 6% 6% 1% 24% 20% 6%
TOTAL HT 15% 15% 4% 15% 15% 4%
LT Category
Domestic 12% 12% 6% 23% 10% 6%
Huts 7% 7% 6% 19% 7% 6%
Industries 15% 11% 4% 13% 11% 4%
Agriculture & Government seed farm 6% 6% 2% 10% 4% 2%
Commercial and Other 14% 16% 6% 14% 16% 6%
TOTAL LT 16% 10% 5% 16% 10% 5%
TOTAL DEMAND 16% 11% 5% 16% 11% 5%
4.5 The sales growth projected by TANGEDCO in its petition is as follows:
Table 152: Sales Projection for the second MYT control period (MUs)
Particulars
As per petition Revised submission
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
HT Consumer Category
I-A HT Industries 9,107 10,564 11,029 8,152 9,456 9,872
I-B Railway Traction 798 848 861 813 911 951
II-A Govt. Educational Inst. etc. 1,190 1,333 1,391 1,035 1,159 1,210
II-B Pvt. Educational Inst. etc. 293 328 343 256 287 300
II-C Places of Public Worship 6 7 8 0 0 0
III HT Commercial 2,277 2,732 2,905 1,626 1,951 2,074
IV Lift Irrigation 7 7 7 5 6 6
V Supply to Puducherry and Other States 413 413 413 426 428 423
VI Temporary supply 5 5 5 175 186 189
Total HT 14,096 16,238 16,962 12,487 14,384 15,025
LT Consumer Category
I-A Domestic 23,237 25,666 27,085 21,526 23,776 25,092
I-B Huts 508 543 577 508 543 577
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 187
June 2013
Particulars
As per petition Revised submission
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
I-C LT bulk supply 12 13 13 10 11 11
II-A Public Lighting and Water Supply 2,018 2,250 2,349 1,750 1,951 2,037
II-B-1 Govt. Educational Inst. etc. 158 181 189 124 141 147
II-B-2 Pvt. Educational Inst. etc. 317 366 382 220 254 265
IIC Places of Public Worship 156 178 186 120 136 142
IIIA 1 Cottage and Tiny Industries 151 168 172 141 157 161
IIIA 2 Power Looms 1,073 1,234 1,264 863 993 1,017
IIIB L.T. Industries 5,659 6,301 6,578 4,837 5,385 5,622
IV L.T. Agriculture 10,269 10,433 10,600 12,159 12,603 12,891
V L.T. Commercial 6,182 7,196 7,651 5,521 6,427 6,834
VI Temporary supply 30 34 35 43 50 51
Total LT 49,770 54,561 57,081 47,822 52,426 54,847
Total HT + LT 63,866 70,799 74,043 60,309 66,809 69,871
4.6 As part of reply to data gaps TANGEDCO has revised its projections of energy
consumption for the MYT control period of FY 2013-14 to FY 2015-16 based on
actual sales upto February and one month estimate for March of FY 2012-13.
TANGEDCO has stated that the projections for FY 2013-14 to FY 2015-16 are based
on a confluence of factors namely, past trend in sales growth, actual sales in 2012-13,
and additional availability of energy from 2013-14 onwards. The growth rate in FY15
and FY16 are said to significantly decrease as compared to FY 2013-14 since the
normal growth rate is expected to be restored by FY 2013-14, when majority of the
additional generating capacity is added to the system.
4.7 The Commission after scrutiny of the revised submissions observes the following:
• Sale to Metered categories: Given the fact that additional capacity to the tune
of 3,971MW will be available during FY2013-14 onwards the power supply
position is expected to improve. Hence the Commission after taking into
cognisance the additional availability of energy has decided to allow sales as
filed by TANGEDCO in its reply to data gaps for all metered categories
except HT Industries and LT-Domestic categories.
The Commission has re-estimated the sales projections for two metered
categories namely HT- Industrial and LT-Domestic categories as the growth
rates projected by TANGEDCO for these two categories seem inaccurate.
• Industries (HT-IA): To arrive at a realistic consumption for this category,
the Commission has adopted the following approach.
The Commission has estimated the increase in consumption due to
improving power supply. As elaborated earlier, FY 2013-14 will see
capacity addition to the tune of 3,971MW, directly impacting the load
shedding being imposed.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 188
June 2013
Further to arrive at an appropriate base consumption the Commission has
calculated the 5 year CAGR growth rate of this category of consumers
upto FY 2011-12 as 4.2%. This rate has been calculated to exclude the
negative growth rate that occurred in the year FY2012-13 due to
imposition of R&C measures. This growth rate has been applied on the
revised sales as projected by TANGEDCO for 2012-13 to arrive at the
base consumption for FY 2013-14. With the improving power supply, the
industrial consumption is expected to increase. Hence, to the increased
sales thus arrived the Commission has incorporated the impact of
improving power supply position. For estimating the impact of improved
supply, Commission has relied upon average load relief per day in FY
2012-13.
The calculation for the same has been shown in the tables below.
Table 153: HT Industrial consumption for the MYT control period FY2013-14 to 2015-16
Sl. No. Particulars 2012-13 2013-14
(MUs)
2014-15
(MUs)
2015-16
(MUs)
1 Revised Industrial sales projected for 2012-13 by
TANGEDCO (MUs) 7,111
2 5 years CAGR (FY07 – FY12) 4.2%
3 Consumption calculated by Commission based on the
CAGR over previous years consumption 7,409 8,686 9,726
4 Increase in consumption due to improved power supply
position 929 929
5 Total Industrial consumption 8,337 9,615 9,726
• Domestic – (LT –IA): TANGEDCO’s reply to data gaps shows increase
in Domestic consumption by 23%, which appears unfounded. To arrive at
a realistic consumption for this category, the Commission has used the
following approach.
To project number of domestic consumers for FY2013-14 to FY2015-16,
the Commission has calculated the average of growth rates of number of
consumers between FY 2010-11 to FY 2012-13. Based on this rate of
4.6%, the number of domestic consumers upto FY 2015-16 has been
projected.
The specific consumption (kWh/Annum) for this category has been
calculated based on actual sales and consumer data till FY 2011-12. The
specific consumption of FY12-13 has not been considered as it shows a
negative growth due to the load shedding imposed during the year. The
Commission has then calculated 5 years CAGR in the specific
consumption between FY 2007-08 to FY 2011-12. Based on this growth
rate of 3.8% and base specific consumption of FY 2011-12, the specific
consumptions of FY 2013-14 to FY 2015-16 have been calculated.
Based on the number of domestic consumers and specific consumption as
calculated above, the Commission has calculated the sales to domestic
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 189
June 2013
consumers for FY 2013-14 to FY 2015-16 as 20,002 MUs, 21,704 MUs
and 23,559 MUs respectively. The table below illustrates the calculation.
Table 154: LT Domestic consumption for the MYT control period FY2013-14 to 2015-16
Sl.
No. Particulars Base
Growth
rate 2013-14 2014-15 2015-16
1 No. Of Consumers in 2012-13 16494340 4.6% 1,72,57,767 1,80,56,528 1,88,92,259
2 Specific Consumption in 2011-
12
(kWh / Annum)
1,117 3.8% 1,159 1,202 1,247
3 Consumption (MUs) (1x2) 20,002 21,704 23,559
• The Commission maintains its stance on disallowance of sale to
Puducherry along with the corresponding revenue booked.
• Sale to Un-Metered categories: Based on the same approach as followed for
estimating consumption for FY 2012-13, the Commission has calculated the
consumption for Hut consumers and Agricultural consumers as follows.
• Hut category (LT I-B): The Commission has recalculated the
consumption for FY 2013-14 to FY 2015-16, based on the details in
Government Order (G.O.).Ms. No.2 dated 03-06-2011 issued by GoTN.
The Commission has considered the wattage as specified by the GoTN and
the hours as considered by TANGEDCO.
The Commission has made some reasonable assumptions to undertake this
calculation. To project the total number of hut connections for the control
period, the 3 year CAGR rate of 1.6% in hut connections between FY
2009-10 to FY 2012-13 has been considered. It has been assumed that an
equal number of CFL as distributed in FY 2012-13 will be distributed each
year till FY 2015-16. It has been assumed that 75,000 mixies, grinders and
fans will be distributed to hut consumers each year till FY 2015-16. Based
on these assumptions the hut consumption of 501MUs, 540 MUs and 580
MUs has been arrived at for FY 2013-14, FY 2014-15 and FY 2015-16
respectively.
Table 155: LT Hut consumption for the MYT control period FY2013-14 to 2015-16
Type of
Appliance
No. Of Hut connections Watt Hours Days
Consumption (MUs)
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Light 1,300,159 1,232,067 1,162,878 40 6 365 113.89 107.93 101.87
TV 891,391 924,262 958,344 70 10 365 227.75 236.15 244.86
CF Lamp 178,088 267,132 356,176 11 6 365 4.29 6.44 8.58
Mixie 342,741 417,741 492,741 550 1 365 34.40 41.93 49.46
Grinder 342,817 417,817 492,817 300 2 156 32.09 39.11 46.13
Fan 331,390 406,390 481,390 61 12 365 88.54 108.58 128.62
RGGVY 373 373 373 40 12 365 0.07 0.07 0.07
Total Consumption 501 540 580
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 190
June 2013
• Agricultural category (LT IV): The Commission has recalculated the
consumption for FY 2013-14 to FY 2015-16 based on the same
methodology as adopted for calculating Agricultural consumption for FY
2012-13.
The Commission has re-estimated the agricultural consumption based on
the average capacity of pumpset in the middle of the year as calculated
below. It has been assumed that 50% of the connections and corresponding
capacity gets added in the first half of the year.
To estimate the number of consumers and load profile of connections for
the control period, the Commission has accepted the addition of 40,000
connections per year as submitted by TANGEDCO. To project load, the
Commission has considered the load of 5.4 HP per connection for FY
2012-13 and used the same for the entire control period.
To calculate the average consumption per HP per annum for the control
period, the Commission has relied on the actual average consumption data
for FY 2010-11 and FY 2011-12. The Commission has observed that
growth in average consumption in FY 2011-12 over FY 2010-11 was
4.7%, this rate has been used to project average consumption per HP per
annum for the control period and the average consumption has been
capped at the level of 966 kWh/ HP/Annum for the remaining two years of
the control period upto FY 2015-16. Based on the above assumptions the
consumption for FY 2013-14, FY 2014-15 and FY 2015-16 has been
worked out as 10,821 MUs, 11,039 MUs and 11,250 MUs respectively.
Table 156: LT Agricultural consumption for the MYT control period FY2013-14 to FY 2015-16
Sl.
No. Particulars 2013-14 2014-15 2015-16
1 No. of service connections at the end of the
year 2,076,898 2,116,898 2,156,898
2 YoY Increase 40,000 40,000 40,000
% added in the first half 50.0% 50.0% 50.0%
3 No. of service connections in the middle of the
year 2,056,898 2,096,898 2,136,898
4 Connected load in HP at the end of the year 11,317,028 11,534,988 11,752,948
5 YoY Increase 233,024 217,960 217,960
6 Connected load in HP at the middle of the year 11,200,516 11,426,008 11,643,968
7 Average capacity of pumpset in HP at the
middle of the year ( 6/3 ) 5.45 5.45 5.45
8 Average consumption in kWh /HP / Annum 966 966 966
9 Consumption in MUs ( 3 x 7 x 8 ) 10,821 11,039 11,250
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 191
June 2013
4.8 The Commission has mapped the growth in number of consumers and the load of
various consumer categories based on actual growth from FY 2007-08 till FY 2012-
13. For projecting the number of consumers for the control period, the Commission
has used the 5 years CAGR rate upto FY 2012-13, in cases where a negative growth is
observed in FY 2012-13 an appropriate rate has been assumed. For projecting the
consumer load for the control period the Commission observed that the load data as
given by TANGEDCO for FY 2012-13 varied drastically from the actuals of FY
2011-12. Hence the Commission has used 3years CAGR prior to FY 2012-13 for
projecting the load of all consumer categories. In cases where a negative growth is
observed an appropriate rate has been assumed.
4.9 Based on the above assumptions and revised calculations, the total sales as approved
by the commission for the Control period FY 2013-14 to FY 2015-16 is as follows.
Table 157: Sales as approved by the Commission for FY 2013-14 to FY 2015-16 (MUs)
Particulars 2013-14 2014-15 2015-16
HT Consumer Category
I-A HT Industries 8,337 9,615 9,726
I-B Railway Traction 813 911 951
II-A Govt. Educational Inst. etc. 1,035 1,159 1,210
II-B Pvt. Educational Inst. etc. 256 287 300
III HT Commercial 1,626 1,951 2,074
IV Lift Irrigation 5 6 6
V Temporary supply 175 186 189
Total HT 12,247 14,114 14,455
LT Consumer Category
I-A Domestic 20,002 21,704 23,559
I-B Huts 501 540 580
I-C LT bulk supply 10 11 11
II-A Public Lighting and Water Supply 1,750 1,951 2,037
II-B-1 Govt. Educational Inst. etc. 124 141 147
II-B-2 Pvt. Educational Inst. etc. 220 254 265
IIC Places of Public Worship 120 136 142
IIIA 1 Cottage and Tiny Industries 141 157 161
IIIA 2 Power Looms 863 993 1,017
IIIB L.T. Industries 4,837 5,385 5,622
IV L.T. Agriculture 10,821 11,039 11,250
V L.T. Commercial 5,521 6,427 6,834
VI Temporary supply 43 50 51
Total LT 44,953 48,787 51,674
Total HT + LT 57,199 62,901 66,129
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 192
June 2013
4.10 Therefore the sales as approved by the Commission for FY 2013-14 are 57,199 MUs,
for FY 2014-15 are 62,901 MUs and for FY 2015-16 are 66,129 MUs.
Energy Availability
4.11 TANGEDCO in its Petition projected the details of energy availability from FY 2013-
14 to FY 2015-16 based on the energy availability projections estimates for FY 2012-
13 and considering the historical trend of actual energy available. In this section the
Commission analyses the energy availability projections of TANGEDCO for the
second control period and accordingly approves the energy availability
Own Generation
4.12 The installed capacity of TANGEDCO generating stations, which as on March 2013
was 5792 MW, is expected to increase to 7592 MW by March 2014 with new thermal
stations expected to achieve commissioning. The energy availability with respect to
own generating stations is estimated considering energy available from existing
generating stations and new generating stations.
Thermal generating stations
4.13 The operational performance parameters such as plant load factor and auxiliary
consumption submitted by TANGEDCO in its current MYT petition are tabulated
below.
Table 158: Plant load factor and auxiliary consumption of existing thermal stations submitted by
TANGEDCO – (FY 2013-14 to FY 2015-16)
Name of the
power plant
Plant load factor Auxiliary Consumption
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
ETPS 37.87% 36.80% 35.20% 15.00% 15.00% 15.00%
TTPS 82.74% 84.31% 85.31% 8.50% 8.50% 8.50%
MTPS 89.01% 89.01% 88.77% 8.55% 8.55% 8.55%
NCTPS 89.15% 91.87% 91.64% 8.50% 8.50% 8.50%
TGTPS 75.35% 78.18% 78.20% 6.00% 6.00% 6.00%
KGTPS 73.80% 73.80% 71.14% 6.00% 6.00% 6.00%
BBGTPS 5.71% 5.71% 5.69% 0.99% 0.99% 1.00%
VGTPS - 1 78.47% 78.47% 75.63% 6.00% 6.00% 6.00%
VGTPS – 2 78.72% 73.66% 78.51% 6.00% 6.00% 6.00%
4.14 The net generation submitted by TANGEDCO from FY 2013-14 to FY 2015-16
based on the above performance parameters is tabulated below.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 193
June 2013
Table 159: Net generation submitted by TANGEDCO for FY 2013-14 to FY 2015-16 (MUs)
Name of the power plant 2013-14 2014-15 2015-16
ETPS 987 959 920
TTPS 6963 7096 7200
MTPS 5990 5990 5990
NCTPS 4502 4639 4640
TGTPS 669 694 697
KGTPS 614 614 593
BBGTPS 59 59 59
VGTPS 1211 1173 1191
Total 20995 21224 21290
Plant load factors
4.15 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:
(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%
(ii) Target Plant Load Factor for incentive –
(a) All the Thermal Power Generating Stations except the existing Stations of
IPPs covered under PPA- 80%
(b) Power Generating Stations of IPPs covered under Existing PPA
- As per PPA
4.16 The historical trend of actual PLF achieved by thermal stations from FY 2007-08 is
tabulated below.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 194
June 2013
Table 160: Historical PLF of existing thermal generating stations
Name of the power
plant
2007-08 2008-09 2009-10 2010-11 2011-12 Average
ETPS 51.42% 49.17% 38.05% 35.44% 22.61% 39.34%
TTPS 86.50% 85.35% 77.91% 77.30% 85.60% 82.53%
MTPS 90.07% 87.88% 86.85% 82.42% 92.77% 88.00%
NCTPS 84.20% 86.52% 87.43% 81.74% 84.81% 84.94%
TGTPS 71.60% 75.48% 56.99% 68.74% 74.47% 69.46%
KGTPS 31.82% 82.16% 73.58% 19.51% 46.58% 50.73%
BBGTPS 3.95% 17.10% 7.78% 4.93% 2.81% 7.31%
VGTPS – Unit 1 72.00% 84.50% 82.52% 67.59% 78.94% 77.11%
VGTPS – Unit 2 42.38% 35.32% 56.16% 42.38% 44.06%
4.17 The Commission observed that the PLFs submitted by TANGEDCO for ETPS are in
line with the average PLF of last five years. TANGEDCO in response to data gaps has
replied that as ETPS is proposed to be decommissioned in a phased manner and it has
considered only 350 MW as available capacity from ETPS for the control period.
Accordingly arrived at the net generation after considering PLF of 37.87% for FY
2013-14. However, it is observed that in the calculation of fixed costs TANGEDCO
has not reduced corresponding GFA of ETPS. Hence, the Commission is considering
entire 450 MW as available capacity in the next control period. Also, considering the
performance of ETPS in FY 2011-12, the Commission approves a PLF of 25% for the
second control period (FY 2013-14 to FY 2015-16) for the purpose of energy
availability.
4.18 The average PLF for TTPS in the last five years was 82.53%. TANGEDCO has
proposed PLFs ranging from 82.74% to 85.31% in the second control period. Also,
TTPS has been able to achieve a PLF of 85.60% in FY 2011-12 and PLF of 89.19%
in FY 2012-13 (Upto February 2013). Based on historic performance, Commission
approves a PLF of 85.00%, higher than last five year average, for the second control
period for the purpose of energy availability.
4.19 TANGEDCO has proposed PLFs of around 89.00% for MTPS while the average PLF
of last five years was 88.00%. As PLF proposed by MTPS is in line with average
PLF, the Commission approves the PLF of 89.00% for MTPS as proposed by
TANGEDCO for the next control period for the purpose of energy availability.
4.20 The average PLF of last five years for NCTPS was 84.94%. However, NCTPS has
performed better in FY 2012-13 registering a PLF of 91.85% (upto February 2013).
TANGEDCO in its petition proposed higher PLFs ranging from 89.15% to 91.87%.
Considering the improved performance for NCTPS and TANGEDCO’s submission,
Commission approves PLF of 89% for NCTPS in the second control period for the
purpose of energy availability. .
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 195
June 2013
4.21 The average PLFs of gas generating stations are lower than 70% except for VGTPS –
unit 1. The reasons for lower PLFs were already mentioned in the earlier sections.
TANGEDCO proposed PLFs in the range of 71.14% to 78.72% except for BBGTPS.
Also, as per TANGEDCO Petition all the gas plants will be operational in FY 2012-
13 after attending the faults. Hence, the plants are expected to be available for the
entire duration of FY 2013-14 and Commission is of the view that there is no merit in
TANGEDO submission of PLFs being lower than the approved norms in the second
control period, according to Regulation-37 of TNERC Tariff Regulations, 2005.
Therefore Commission approves a load factor of 80% in the second control period for
the gas based stations for the purpose of energy availability. .
4.22 Due to non availability of gas BBGTPS is run using Naphtha fuel and is operated
usually during the peak hours. TANGEDCO has proposed a PLF of 5.71% for
BBGTPS during the second control period. Commission is of the view that the PLF
proposed by TANGEDCO is in line with its approval during the first control period
and accordingly accepts TANGEDCO’s submission. Further BBGTPS is normally
operated in condenser mode and not in generator mode and therefore low PLF as
envisaged is expected.
Auxiliary Consumption
4.23 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:
…
(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%
Electrically driven BFPs 9.00% 8.50%
…”
(b)Gas-based and Naphtha based Generating Stations:
(i) Combined Cycle: 3%
(ii) Open Cycle: 1%
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 196
June 2013
4.24 TANGEDCO has proposed the auxiliary consumption for its thermal stations TTPS,
NCTPS and BBGTPS in line with the TNERC Tariff Regulations, 2005. Hence
Commission accepts the TANGEDCO proposal and approves auxiliary consumption
of 8.50% for TTPS and NCTPS while for BBGTPS Commission approves auxiliary
consumption of 0.99% during the second control period.
4.25 For MTPS, TANGEDCO proposed a nominally higher auxiliary consumption of
8.55% in comparison to the approved norm of 8.50% but has not provided adequate
explanation for the same in its Petition. Hence the Commission is approving the
auxiliary consumption of 8.50% even for MTPS in accordance to its tariff regulations.
4.26 For ETPS, TANGEDCO has proposed auxiliary consumption of 15% in line with the
Commission approved number in its last tariff order. ETPS is the oldest generating
plant of TANGEDCO and already served its useful life and on completion of major
R&M works, the Units of Ennore TPS have served further 5-10 years. Hence,
Commission relaxes the norm and approves the auxiliary consumption of 15% in line
with its last tariff order.
4.27 For gas based thermal stations Commission has relaxed its norm of auxiliary
consumption to 6% on account of installation of gas booster compressors in its tariff
order dated July 2010. TANGEDCO has proposed the auxiliary consumption in
accordance to the relaxed norms. In addition, based on the data submitted by
TANGEDCO the actual auxiliary consumption was around 6% in FY 2012-13 for gas
based thermal stations. Hence, Commission approves the auxiliary consumption of
6% for gas based stations in second control period.
Table 161: Plant load factor and auxiliary consumption of existing thermal stations approved by
Commission – (FY 2013-14 to FY 2015-16)
Name of the
power plant
Plant load factor Auxiliary Consumption
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
ETPS 25.00% 25.00% 25.00% 15.00% 15.00% 15.00%
TTPS 85.00% 85.00% 85.00% 8.50% 8.50% 8.50%
MTPS 89.00% 89.00% 89.00% 8.50% 8.50% 8.50%
NCTPS 89.00% 89.00% 89.00% 8.50% 8.50% 8.50%
TGTPS 80.00% 80.00% 80.00% 6.00% 6.00% 6.00%
KGTPS 80.00% 80.00% 80.00% 6.00% 6.00% 6.00%
BBGTPS 5.71% 5.71% 5.71% 0.99% 0.99% 0.99%
VGTPS - 1 80.00% 80.00% 80.00% 6.00% 6.00% 6.00%
VGTPS – 2 80.00% 80.00% 80.00% 6.00% 6.00% 6.00%
4.28 The net generation submitted by TANGEDCO and approved by the Commission from
FY 2013-14 to FY 2015-16 is tabulated below.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 197
June 2013
Table 162: Net generation approved by the Commission for FY 2013-14 to FY 2015-16 (MUs) – Existing
thermal stations
Name of the
power plant
FY 2013-14 FY 2014-15 FY 2015-16
Petition Commission Petition Commission Petition Commission
ETPS 987 652 959 652 920 653
TTPS 6963 7154 7096 7154 7200 7173
MTPS 5990 5992 5990 5992 5990 6009
NCTPS 4502 4494 4639 4494 4640 4507
TGTPS 669 711 694 711 697 713
KGTPS 614 665 614 665 593 667
VGTPS 1211 1232 1173 1232 1191 1235
BBGTPS 59 59 59 59 59 59
Total 20995 20959 21224 20959 21290 21016
Hydro generating stations
4.29 TANGEDCO has projected the hydro generation considering a PLF of 28.39%,
29.24% and 32.16% for FY 2013-14, FY 2014-15 and FY 2015-16 respectively. In
addition, TANGEDCO has assumed auxiliary consumption of 1% in accordance to
TNERC tariff regulations. However, in its Petition TANGEDCO has not provided any
adequate explanation for the basis of the assumed PLF.
4.30 In the last order Commission has approved the hydro generation excluding the
generation from Kadamparai PSHES by considering last 8 year average. In this order
also Commission adopts a similar approach for the determination of hydro generation
and approves it based on six years average.
4.31 The actual hydro generation from FY 2004-05 has been given in below table. While
arriving at the average hydro generation of 4844 MUs, the Commission has not
considered the hydro generation during FY 2006-08 and FY 2007-08 as in those years
there were exceptionally high rainfalls and during FY 2012-13 as there was severe
drought in that year. For the second control period, Commission has considered the
average hydro generation of 4844 MUs as energy availability from hydro power
plants excluding Kadamparai PSHES.
Table 163: Actual hydro generation excluding Kadamparai PSHES (MU)
Year
Hydro generation
excluding Kadamparai
PSHES
FY 2004-05 4153
FY 2005-06 5531
FY 2008-09 5040
FY 2009-10 5122
FY 2010-11 4515
FY 2011-12 4701
Average 4844
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 198
June 2013
4.32 TANGEDCO has filed the additional energy required for Kadamparai PSHES in the
second control period based on historical actual energy requirement for Kadamparai
PSHES. Commission approves the additional energy requirement in the second
control period based on the actual additional energy requirement in the first control
period.
Table 164: Kadampari generation and power consumption (MUs)
Source FY 2010-11 FY 2011-12 FY 2012-13 Average
Generation Mode 290 506 309
Pump Mode 332 534 335
Additional Requirement 42 28 26 32
4.33 The net hydro energy and additional energy requirement for Kadamparai PSHES
approved by the Commission during the second control period is tabulated below:
Table 165: Net hydro generation and additional energy requirement approved by the Commission for
Kadamparai PSHES (MUs)
Particulars FY 2013-14 FY 2014-15 FY 2015-16
Petition Commission Petition Commission Petition Commission
Net Hydro generation
excluding Kadamparai 5207 4386 5211 4386 5732 4386
Additional energy required
for Kadamparai PSHES 28 32 28 32 28 32
Wind Generation
4.34 TANGEDCO has submitted net available energy of 28 MUs from Wind Mills from
FY 2013-14 to FY 2015-16.
4.35 Based on actual available energy from TANGEDCO’s wind mills during first control
period, Commission approves energy availability of 12 MUs for second control period
Table 166: Approved energy availability from wind mills (MUs)
Particulars FY 2013-14 FY 2014-15 FY 2015-16
Petition Commission Petition Commission Petition Commission
Wind Generation 28 12 28 12 28 12
New Generating Stations
4.36 TANGEDCO in its Petition has submitted CoD for new generating stations as 1st
March 2013 for MTPS Stage III, 1st April 2013 for NCTPS Stage-II (unit 2) and 1
st
May 2013 for NCTPS stage-II (unit 1). However, these units have not been
commissioned as on date and TANGEDCO in response to data gaps has further
revised the commissioning dates as per below table:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 199
June 2013
Table 167: Revised CoD of the new generating stations
Name of the Project Expected date of
commissioning
Revised Submission
Mettur Thermal Power Project -
Stage 3 - ( 1x 600 MW)
March 2013 June 2013
North Chennai Thermal Power
Project –
Stage-II ( 2x600 MW)
Unit-II - April 2013
Unit-I – May 2013
Unit-II - June 2013
Unit-I – August 2013
Ennore Expansion* December 2015 December 2015
*Project yet to be awarded
Table 168: Plant load factor and auxiliary consumption of new generation stations – as per TANGEDCO
Petition
Name of the power
plant Plant load factor Auxiliary Consumption
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
NCTPS – Unit 1 70.71% 80.02% 86.04% 8.50% 8.50% 8.50%
NCTPS – Unit 2 70.71% 80.02% 86.04% 8.50% 8.50% 8.50%
MTPS – Stage III 78.21% 83.43% 88.64% 9.00% 9.00% 9.00% Ennore Expansion 80.00% 8.50%
4.37 Commission approves the PLF of 80% in accordance with its tariff regulations during
the financial year of commissioning. In the subsequent years, the plants are expected
to have stabilized and perform at similar levels of the existing coal based thermal
stations. Hence, Commission approves the PLF of 85% for subsequent years for
calculation of energy availability.
4.38 As per the clause 37 (vi) of the TNERC Tariff Regulations, 2005 stabilization period
is defined as follows:
The stabilization period of a unit shall be reckoned commencing from the date of
commercial operation of that unit as follows
(a) coal-based and lignite-fired Generating Stations -180 days
(b) Gas turbine / combined Generating Stations - 90 days
4.39 Also, the clause 37 (v) of TNERC Tariff Regulations 2005 gives a relaxation on the
auxiliary consumption during the stabilization period. The respective clause of
TNERC tariff regulation is given below:
(d) During stabilization period, normative auxiliary consumption shall be reckoned at
0.50 percentage point more than the norms indicated at (a), (b) and (c) above.
4.40 The Commission has not fixed the norms for auxiliary consumption for 600 MW
series coal based generation stations. However, based on the norms for 500 MW
series and the regulations, Commission approves 9.00% as auxiliary consumption
during the first six months (stabilization period) after Commissioning and at 8.50%
after the stabilization period.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 200
June 2013
Table 169: Plant load factor and auxiliary consumption of new thermal stations approved by Commission
– (FY 2013-14 to FY 2015-16)
Name of the power
plant
Plant load factor Auxiliary Consumption
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
NCTPS – Unit 1 80.00% 85.00% 85.00% 8.88% 8.50% 8.50%
NCTPS – Unit 2 80.00% 85.00% 85.00% 8.83% 8.50% 8.50%
MTPS – Stage III 80.00% 85.00% 85.00% 8.83% 8.50% 8.50%
Ennore Expansion 80.00% 9.00%
4.41 The net generation submitted by TANGEDCO and approved by the Commission from
FY 2013-14 to FY 2015-16 is tabulated below.
Table 170: Net generation approved by the Commission for FY 2013-14 to FY 2015-16 (MUs) – New
Thermal stations
Name of the power
plant
FY 2013-14 FY 2014-15 FY 2015-16
Petition Commission Petition Commission Petition Commission
NCTPS – Stage II 6387 5429 7774 8176 8275 8198
MTPS – Stage III 3587 2878 3990 4088 4240 4099
Ennore Expansion 1058 1049
Total 9974 8306 11764 12264 13573 13347
Power Purchase from other sources
Central Generating Stations (CGS)
4.42 The allocation of firm power to TANGEDCO from central generating stations is
tabulated below:
Table 171: TANGEDCO share in central generating stations
Power Station
Installed
Capacity (in
MW)
Firm Share
(in MW) Firm Share (%)
Total share
including
unallocated
power (%)*
Existing Stations
Neyvelli TS - I 600 600 100.00% 100.00%
Neyvelli TS - II - Stage 1 630 176 27.94% 30.31%
Neyvelli TS - II - Stage 2 840 265 31.55% 33.90%
Neyvelli TS - I Expansion 420 193 45.95% 53.84%
Ramagundam super thermal power
station I & II 2100 470 22.38% 26.09%
Ramagundam super thermal power
station III 500 118 23.60% 27.40%
Simhadri Stage 2 , Units 3 500 95 19.00% 22.84%
Simhadri Stage 2 , Units 4 500 95 19.00% 22.84%
NTPC-TNEB JV - Unit 1 (Vallur) 500 347 69.40% 75.00%
Talcher - II 2000 477 23.85% 25.22%
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 201
June 2013
Power Station
Installed
Capacity (in
MW)
Firm Share
(in MW) Firm Share (%)
Total share
including
unallocated
power (%)*
Madras APS 440 328 74.55% 75.36%
Kaiga APS 880 229 22.27% 26.08%
Sub Total 9910 3393
New Stations
NTPC – TNEB JV - Unit 2
(Vallur) 500 347 69.40%
NTPC – TNEB JV - Unit 3
(Vallur) 500 347 69.40%
Kudankulam APS - Unit 1 1000 463 46.25%
Kudankulam APS - Unit 2 1000 463 46.25%
PFBR Kalpakkam 500 167 33.40%
Neyveli TS - II Expnasion Unit I 250 163 65.20%
Neyveli TS - II Expansion Unit II 250 162 64.80%
NLC-TNEB - Tuticorin Unit 1 500 194 38.70%
NLC-TNEB - Tuticorin Unit 2 500 194 38.70%
Sub Total 5000 2500
Total 14910 5893
*Total share from CGS including unallocated power as per SRPC March 2013 monthly
report
4.43 It can be observed that TANGEDCO has a firm allocation of 3393 MW from existing
CGS and this allocation is expected to increase by 2500 MW in the second control
period with most of the capacity additions happening in FY 2013-14.
4.44 TANGEDCO has revised the date of CoD of new CGS stations based on the latest
progress and the revised dates are as tabulated below. It is understood that the revised
dates submitted by TANGEDCO are based on the status as on date for each of the
stations, Commission has considered the revised submission for the purpose of
calculation of energy availability..
Table 172: Revised CoD of new CGS stations
Name of the new CGS Revised Submission
NTPC – TNEB JV - Unit 2 (Vallur) June-13
NTPC – TNEB JV - Unit 3 (Vallur) October-13
Kudankulam APS - Unit 1 September-13
Kudankulam APS - Unit 2 October-13
PFBR Kalpakkam June-14
Neyveli TS - II Expansion Units I March-14
Neyveli TS - II Expansion Units II September-14
NLC-TNEB - Tuticorin Unit 1 December-13
NLC-TNEB - Tuticorin Unit 2 March-14
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 202
June 2013
4.45 The plant load factors of the existing CGS stations for FY 2010-11 and FY 2011-12
are assumed based on their historical performance obtained from SRPC reports. The
historical PLFs and assumed PLF for the CGS stations is tabulated below.
Table 173: Assumed PLF for the second control period
Name of the CGS Stations 2010-11 2011-12 Assumption
Neyvelli TS - I 73.80% 75.67% 75.00%
Neyvelli TS - II 83.40% 85.87% 85.00%
Neyvelli TS - I Expansion 81.42% 82.47% 82.00%
Ramagundam super thermal power station I & II 90.27% 93.07% 90.00%
Ramagundam super thermal power station III 90.27% 93.07% 90.00%
Simhadri Stage 2 , Units 3 & 4
89.79% 85.00%
Talcher - II 86.14% 85.00% 85.00%
Madras APS 58.09% 65.10% 60.00%
Kaiga APS 65.86% 67.49% 65.00%
4.46 For the new generating stations the PLF assumption and the basis are as given below:
i. Thermal stations – 80% during the financial year of commissioning and later
85% as per CERC tariff regulations, 2009
ii. Nuclear power stations – 50% during the financial year of commissioning and
later 60% (PLF that was considered for Madras APS).
4.47 The auxiliary consumption for all the thermal stations has been taken as per CERC
Tariff Regulations, 2009 and for nuclear stations the auxiliary consumption is
assumed to be 10%.
4.48 The station wise PLF and auxiliary consumption assumed for central generating
stations for arriving at the energy availability is tabulated below:
Table 174: PLFs and Auxiliary consumption considered by the Commission for CGS stations
Power Station Plant load factors Auxiliary Consumption
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Existing Stations
Neyvelli TS - I 75.00% 75.00% 75.00% 12.00% 12.00% 12.00%
Neyvelli TS - II 85.00% 85.00% 85.00% 10.00% 10.00% 10.00%
Neyvelli TS - I Expansion 82.00% 82.00% 82.00% 9.50% 9.50% 9.50%
Ramagundam super thermal power
station I & II 90.00% 90.00% 90.00% 8.50% 8.50% 8.50%
Ramagundam super thermal power
station III 90.00% 90.00% 90.00% 8.50% 8.50% 8.50%
Simhadri Stage 2 85.00% 85.00% 85.00% 8.50% 8.50% 8.50%
NTPC-TNEB JV - Unit 1 (Vallur) 85.00% 85.00% 85.00% 8.50% 8.50% 8.50%
Talcher - II 85.00% 85.00% 85.00% 10.50% 10.50% 10.50%
Madras APS 60.00% 60.00% 60.00% 10.00% 10.00% 10.00%
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 203
June 2013
Power Station Plant load factors Auxiliary Consumption
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Kaiga APS 65.00% 65.00% 65.00% 10.00% 10.00% 10.00%
New Stations
NTPC – TNEB JV - Unit 2 (Vallur) 80.00% 85.00% 85.00% 8.50% 8.50% 8.50%
NTPC – TNEB JV - Unit 3 (Vallur) 80.00% 85.00% 85.00% 8.50% 8.50% 8.50%
Kudankulam APS - Unit 1 50.00% 60.00% 60.00% 10.00% 10.00% 10.00%
Kudankulam APS - Unit 2 50.00% 60.00% 60.00% 10.00% 10.00% 10.00%
PFBR Kalpakkam
50.00% 60.00% 10.00% 10.00% 10.00%
Neyveli TS - II Expansion Unit I 80.00% 85.00% 85.00% 8.50% 8.50% 8.50%
Neyveli TS - II Expansion Unit II 80.00% 85.00% 85.00% 8.50% 8.50% 8.50%
NLC-TNEB - Tuticorin Unit 1 80.00% 85.00% 85.00% 8.50% 8.50% 8.50%
NLC-TNEB - Tuticorin Unit 2 80.00% 85.00% 85.00% 8.50% 8.50% 8.50%
4.49 Based on the total share in the CGS plants, PLFs and auxiliary consumptions as per
above table and revised CoD submitted by TANGEDCO for new plants, Commission
has determined the net energy available from the CGS stations. The summary of net
energy approved by the Commission and filed by TANGEDCO in its petition is
tabulated below:
Table 175: Summary of energy availability from CGS stations approved by Commission (MUs)
Central Generation
Stations FY 2013-14 FY 2014-15 FY 2015-16
Petition Commissio
n Petition Commission Petition
Commissio
n
NTPC SR (I&II) 4164 3952 4164 3952 4164 3963
NTPC SR III 1074 988 1074 988 1074 991
NLC TS - I 2937 3469 2937 3469 1469 3478
NLC TS - II 3450 3188 3450 3188 3450 3196
NLC TS Expansion I 1749 1470 1749 1470 1749 1474
NTPC Talcher 3567 3361 3567 3361 3567 3370
NTPC Simhadri 638 1556 678 1556 678 1560
MAPS 1986 1568 1986 1568 1986 1573
KAIGA 1278 1176 1278 1176 1278 1179
NTPC Dadri 599 0 638 0 678 0
NTPC Vallur 4676 4955 6704 7092 7141 7112
Kudunkulum 2426 1663 4316 4376 5544 4388
PFBR Kalpakkam 0 0 0 494 0 792
NLC TS - II Expansion 1449 89 1546 1752 1642 2220
NLC - Tuticorin 257 518 1219 2643 1300 2651
Total 30250 27954 35307 37086 35721 37948
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 204
June 2013
Independent Power Producers
4.50 TANGEDCO in its Petition has included power purchase quantum only from ST-
CMS, ABAN power and Penna and stated that they do not intend to procure power
from the rest of the IPPs as they will remain un-despatched under the merit order
principle.
4.51 TANGEDCO did not provide any basis for projection of quantum from IPPs in its
Petition. In its response to data gaps TANGEDCO has submitted the PLFs
(corresponding to net generation) considered for projection of energy availability.
However, TANGEDCO again failed to provide any valid explanation for the
consideration of those PLFs.
4.52 In the absence of valid explanation, Commission has projected the energy availability
based on actual numbers for FY 2007-08 to FY 2011-12. The Commission arrived at
the energy availability after considering the average energy available from these IPPs
in the past five financial years
Table 176: Actual energy available from IPPs - Historical data (MUs)
IPPs 2007-08 2008-09 2009-10 2010-11 2011-12 Average
GMR 1,132 1,362 1,145 875 858 1,074
Samalpatti 517 691 481 378 292 472
PPN 2,120 2,147 2,260 2,496 1,491 2,103
Madurai 511 663 467 353 282 455
ST-CMS 1,689 1,638 1,655 1,653 1,688 1,665
ABAN 852 806 677 820 760 783
Penna 358 338 339 370 360 353
Sub Total 7,179 7,645 7,024 6,945 5,731 6,905
4.53 In response to data gaps, TANGEDCO has replied that PPA with M/s GMR is upto
15th February 2014 and for M/s SPC it is upto 22
nd February 2016. Hence,
Commission has considered the energy availability from these plants only upto the
dates till PPA exists.
4.54 The summary of net energy availability approved by the Commission and filed by
TANGEDCO in the Petition is tabulated below.
Table 177: Summary of energy availability approved by the Commission (MUs)
IPPs FY 2013-14 FY 2014-15 FY 2015-16
Petition Commission Petition Commission Petition Commission
GMR 0 945 0 0 0 0
Samalpatti 0 472 0 472 0 433
PPN 0 2103 0 2103 0 2103
Madurai 0 455 0 455 0 455
ST-CMS 1819 1665 1844 1665 1869 1665
ABAN 375 783 375 783 375 783
Penna 759 353 810 353 810 353
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 205
June 2013
Total 2953 6775 3029 5830 3054 5791
4.55 Though Commission has estimated the energy availability from IPPs, the energy
despatch from these IPPs will be arrived based on merit order dispatch principle.
Captive/ Cogeneration and Non-Conventional energy sources
4.56 TANGEDCO has 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 2013-14 to FY
2015-16 is tabulated below:
Table 178: Energy availability from Captive and Non conventional energy sources – As submitted by
TANGEDCO (MUs)
Source 2013-14 2014-15 2015-16
Captive 719 755 793
Wind 5320 5586 5866
Biomass 799 839 881
Cogeneration 2562 3049 3126
New - Cogeneration
Plants 0 0 0
Solar 208 768 769
Total 9,608 10,997 11,434
4.57 For energy availability from biomass plants, Commission has observed a significant
increase in energy availability in FY 2012-13 compared to FY 2011-12. However in
reply to data gaps TANGEDCO has revised the energy availability from biomass
plants to 11 MUs in FY 2012-13
4.58 In response to data-gaps, TANGEDCO has provided the actual energy purchased
from wind, solar, captive and cogeneration in FY 2012-13. Hence for renewable
energy plants and CPP, Commission has approved the energy availability equivalent
to actual procured in FY 2012-13.
4.59 For new cogeneration plants, TANGEDCO has provided the date of CoD as a
response to data gaps. The CoD submitted by TANGEDCO is tabulated below.
Commission has estimated the energy availability from these plants considering the
CoD submitted by TANGEDCO and assuming a PLF of 55% and auxiliary
consumption of 9% in accordance to TNERC tariff order for cogeneration plants.
Table 179: CoD of Cogeneration plants submitted by TANGEDCO
Capacity CoD
45 MW (3 projects of 15 MW ) June 2013
51 MW (2 projects of 18 MW and 1
project of 15 MW) July 2013
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 206
June 2013
Capacity CoD
42 MW (3 projects of 15 MW and 1
project of 12 MW August 2013
45 MW (3 projects of 15 MW) September 2013
4.60 The summary of energy availability estimated by the Commission and filed by
TANGEDCO for captive and non conventional sources is given below.
Table 180: Summary of energy availability approved by the Commission from captive and renewable
energy sources (MUs)
Renewable Energy
Sources
FY 2013-14
FY 2014-15
FY 2015-16
Petition Commission Petition Commission Petition Commission
Captive 719 595 755 595 793 595
Wind 5320 7145 5586 7145 5866 7145
Biomass 799 11 839 11 881 11
Cogeneration 2562 1428 3049 1428 3126 1428
New - Cogeneration
Plants 0 502 0 802 0 805
Solar 208 16 768 16 769 16
Total 9608 9697 10997 9997 11434 10000
From Other Sources
4.61 TANGEDCO in its Petition has proposed purchase of power from trading and NTPC
NVVN for the second control period. However, TANGEDCO has not provided any
basis for its projection from traders-bilateral in its Petition. For NTPC-NVVN
TANGEDCO has projected the energy availability based on actual energy purchase
during FY 2011-12.
4.62 In response to data gaps, TANGEDCO has provided the information on case-1
bidding from which the power is likely to be available. The details of case-1 bidding
submitted by TANGEDCO are tabulated below. The Commission has considered the
availability from these sources as per the MTOA granted by PGCIL.
Supplier/ Source Offered Capacity-(MW) Current Status
M/s NETS through
Lanco Anpara Power
Ltd, U.P
100 PGCIL has granted MTOA
for the period from
16.06.2013 to
31.05.2016
M/s Jindal through OP
Jindal Super Thermal
Power Station,
Chattisgarh
200 PGCIL has granted MTOA
for the period from
16.06.2013 to 30.11.2015
M/s Adani through
Mundra Power Plant,
Gujarat
200 PGCIL has granted MTOA
for the period from
16.06.2013 to 31.12.2015
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 207
June 2013
4.63 In reply to data gaps, Commission requested TANGEDCO to provide the break-up of
trading sources proposed by it. However, TANGEDCO has failed to provide a further
detailed break-up of the sources from which this power quantum was being procured.
In the absence of this information Commission disallows the power purchase
proposed by TANGEDCO under traders-bilateral.
4.64 In response to information sought by the Commission TANGEDCO has provided the
actual power purchase during FY 2012-13. Hence, for NTPC NVVN (bundled solar
power) Commission approves the energy availability for second control period
equivalent to power procured in FY 2012-13.
4.65 The summary of the power purchase quantum from other sources filed by
TANGEDCO and approved by the Commission is tabulated below.
Table 181: Summary of power purchase quantum approved from other sources (MUs)
Other Sources
FY 2013-14
FY 2014-15
FY 2015-16
Petition Commission Petition Commission Petition Commission
Trading - Bilateral &
Exchange 1413 0 804 0 933 0
Case 1 - Bidding 0 3468 0 4380 0 3370
NTPC NVVN * 694 35 694 35 694 35
Total 2107 3503 1498 4415 1627 3405
*Power shown under NTPC-NVVN is bundled solar power. TANGEDCO has projected it
considering actual of FY 2011-12 which also include trading power. Commission while
approving has corrected this error considering actual bundled power procured in FY 2012-
13.
4.66 Based upon the above discussion in respect of individual sources, the total energy
available from all sources during the second control period (FY 2013-14 to FY 2015-
16) as submitted in the Petition and as approved in the Order is tabulated below:
Table 182: Summary of energy availability approved by the Commission for the second control period
(FY 2013-14 to FY 2015-16) (MUs)
Source 2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
Own Generating Stations
Coal Based Power Plants
Ennore Thermal Power Station 987 652 959 652 920 653
Tuticorin Thermal Power Station 6963 7154 7096 7154 7200 7173
Mettur Thermal Power Station 5990 5992 5990 5992 5990 6009
North Chennai Thermal Power
Station 4502 4494 4639 4494 4640 4507
Sub Total 18442 18292 18684 18292 18749 18342
Gas Based Power Plants
Tirumokottai Kovilkalappal Gas
Power Plant 669 711 694 711 697 713
Kuttalum Gas Power Plant 614 665 614 665 593 667
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 208
June 2013
Source 2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
Valathur Gas Power Plant 1211 1232 1173 1232 1191 1235
Basin Bridge Gas Power Plant 59 59 59 59 59 59
Sub Total 2554 2668 2541 2668 2540 2675
Hydro Generation Circles
Erode Hydro Generation Circle
5768 4844 5801 4844 6353 4844
Kundah Hydro Generation Circle
Tirunelveli Hydro Generation
Circle
Kadamparai Hydro generation
circle
Wind Mills 0 12 0 12 0 12
Sub Total - Existing Stations 26764 25816 27026 25816 27643 25873
New Stations
North Chennai TPS Stage - II 6387 5429 7774 8176 8275 8198
Mettur Stage - III 3587 2878 3990 4088 4240 4099
Ennore Expansion
1058 1049
Sub Total 9974 8306 11764 12264 13573 13347
Total - Own Generating Stations 36738 34122 38790 38079 41216 39219
Central Generation Stations
NTPC SR (I&II) 4164 3952 4164 3952 4164 3963
NTPC SR III 1074 988 1074 988 1074 991
NLC TS - I 2937 3469 2937 3469 1469 3478
NLC TS - II 3450 3188 3450 3188 3450 3196
NLC TS Expansion I 1749 1470 1749 1470 1749 1474
NTPC Talcher 3567 3361 3567 3361 3567 3370
NTPC Simhadri 638 1556 678 1556 678 1560
MAPS 1986 1568 1986 1568 1986 1573
KAIGA 1278 1176 1278 1176 1278 1179
NTPC Dadri 599 0 638 0 678 0
NTPC Vallur 4676 4955 6704 7092 7141 7112
Kudunkulum 2426 1663 4316 4376 5544 4388
PFBR Kalpakam 0 0 0 494 0 792
NLC TS - II Expansion 1449 89 1546 1752 1642 2220
NLC - Tuticorin 257 518 1219 2643 1300 2650.72
Sub Total 30250 27954 35307 37086 35721 37948
IPPs
GMR 0 945 0 0 0 0
Samalpatti 0 472 0 472 0 433
PPN 0 2103 0 2103 0 2103
Madurai 0 455 0 455 0 455
ST-CMS 1819 1665 1844 1665 1869 1665
ABAN 375 783 375 783 375 783
Penna 759 353 810 353 810 353
Sub Total 2953 6775 3029 5830 3054 5791
Renewable Energy Sources and
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 209
June 2013
Source 2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
CPP
Captive 719 595 755 595 793 595
Wind 5320 7145 5586 7145 5866 7145
Biomass 799 11 839 11 881 11
Cogeneration 2562 1428 3049 1428 3126 1428
New - Cogeneration Plants 0 502 0 802 0 805
Solar 208 16 768 16 769 16
Sub Total 9608 9697 10997 9997 11434 10000
Other Sources
Trading - Bilateral & Exchange 1413 0 804 0 933 0
Case 1 - Bidding 0 3468 0 4380 0 3370
UI 0 0 0 0 0 0
NTPC NVVN 694 35 694 35 694 35
Sub Total 2107 3503 1498 4415 1627 3405
Total - Other Power Purchase 44917 47930 50831 57329 51836 57144
Grand Total 81656 82051 89621 95408 93052 96364
Renewable Purchase Obligation
4.67 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.
4.68 As 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.”
4.69 From FY 2012-13, the Commission has not prescribed any RPO Target. Therefore,
the Commission has considered same RPO Obligations of 9% as fixed in its
Renewable Energy Purchase Obligation Regulations, 2010 for second control period
from FY 2013-14 to FY 2015-16
4.70 Accordingly, the Commission has calculated the quantum to be purchased through
RPO. The Commission has applied the above mentioned percentages of RPO from
FY 2013-14 to FY 2015-16 on the energy required determined for respective years in
this Order.
Table 183: Renewable energy purchase requirement from FY 2013-14 to FY 2015-16 (MUs)
Particulars FY 2013-14 FY 2014-15 FY 2015-16
Energy Requirement (TN Periphery) 67515 73919 77374
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 210
June 2013
Particulars FY 2013-14 FY 2014-15 FY 2015-16
RPO% from all sources 9.00% 9.00% 9.00%
RPO% from solar 0.05% 0.05% 0.05%
Required purchase from renewable
energy sources (MU) 6076.37 6652.70 6963.67
Required purchase from solar energy
sources (MU) 33.76 36.96 38.69
Energy Balance and Distribution Loss
4.71 Commission in its first order on Multi Year Tariff determination dated 31st July 2010
has approved transmission and distribution losses together and has set a loss reduction
strategy for reduction of T&D losses.
4.72 Also, Commission has initiated the suo-motto proceedings against TANGEDCO for
non compliance in the matter of T&D loss determination as directed by it and the
Hon’ble APTEL. The Commission has in the absence of scientific data for loss
determination, fixed the T&D loss level at 16.4% for FY 2013-14 and has clarified
that it shall assume loss percentage at 16% and 15.6% for FY 2014-15 and FY 2015-
16 respectively, if the necessary data is not furnished by TANGEDCO.
The relevant extracts of that order are given below:
“The Commission in its Order No.1 of 2012 dated 30-3-2012, had adopted the T&D
loss of 17.6% for 2010-11 and 17.2% for 2011-12. Commission adopted T&D loss of
16.80% for 2012-13. By the same analogy, T&D loss of 16.40% is approved for 2013-
14. As and when the TANGEDCO comes out with the scientific study on T&D loss as
specified in the Regulations, the Commission may review and refix the T&D loss
norms subject to prudent check. If no study report is submitted for consideration of
the Commission, T&D loss for FY 2014-15 shall be reckoned as 16% and for FY
2015-16 shall be reckoned as 15.6%. Out of the above T&D loss limit, the
distribution loss shall be arrived at after deducting the transmission loss as approved
by the Commission in the respective tariff order.
4.73 Considering the Commission’s order on T&D losses, the Commission approves the
T&D loss trajectory as tabulated below. Based on the approved distribution losses,
Commission has further estimated the 33 kV, 22 kV, 11 kV and LT losses
Table 184: T&D Loss trajectory set by the Commission for the second control period
Particulars 2013-14 2014-15 2015-16
T&D Loss level in % 16.40% 16.00% 15.60%
Transmission Loss % 2.70% 2.70% 2.70%
Distribution Loss% 13.70% 13.30% 12.90%
33 kV Losses 0.66% 0.64% 0.62%
22 kV Losses 2.76% 2.68% 2.60%
11 kV Losses 2.87% 2.78% 2.70%
LT Losses 10.20% 9.90% 9.60%
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 211
June 2013
4.74 Hence Commission has arrived at the energy requirement for TANGEDCO
considering the approved sales and losses as per Suo-Motto order on distribution
losses dated 4th June 2013. In addition, from this order Commission is treating the
distribution loss and transmission loss separately. For arriving at the sales below 33
kV, at 110 kV and at 230 kV, Commission has relied on the percentages arrived based
on the data provided by TANGEDCO. The energy balance in distribution periphery
and energy required by TANGEDCO for the second control period are tabulated
below.
4.75 The energy balance shown is considering total energy wheeled in the distribution
system while energy requirement has been arrived considering approved sales and
losses.
Table 185: Energy Balance in distribution periphery
Parameter FY 2013-14 FY 2014-15 FY 2015-16
Sale to Consumers below 33 kV (MU) 53412 58736 61751
Additional Power to Kadamparai (MU) 32 32 32
Wheeled Units below 33 kV 8610 8692 9184
Distribution Loss (%) 13.70% 13.30% 12.90%
Distribution Loss (MU) 9851 10349 10511
Energy Input at Distribution periphery (MU) 71905 77809 81477
Table 186: Energy required by TANGEDCO at TN Periphery during the control period
Parameter FY 2013-14 FY 2014-15 FY 2015-16
Sale to Consumers below 33 kV (MU) 53412 58736 61751
Additional Power to Kadamparai (MU) 32 32 32
Distribution Loss (%) 13.70% 13.30% 12.90%
Distribution Loss (MU) 8484 9015 9150
Energy Input at Distribution periphery (MU) 61928 67783 70933
110 kV Sales (MU) 3067 3373 3546
110 kV Losses (%) 1.90% 1.90% 1.90%
110 kV Losses (MU) 1259 1378 1443
Energy Input at 110 kV 66254 72535 75921
230 kV Sales (MU) 721 793 834
230 kV Losses (%) 0.80% 0.80% 0.80%
230 kV Losses (MU) 540 591 619
Energy input at TN Periphery (MU) 67515 73919 77374
4.76 Commission reiterates its direction given to TANGEDCO in order on Suo-Motto
Petition on T&D losses.
a) TANGEDCO shall conduct a third party scientific study to arrive at the reasonable consumption of unmetered services and thereby the technical
losses of their network in the following manner.
i. DT metering with AMR facility shall be provided atleast in one feeder
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 212
June 2013
feeding agricultural services predominantly in each circle of the
TANGEDCO. Similar metering shall be installed/made available at the
Sub-Station end of the 11KV / 22KV feeders.
ii. Similar arrangements may be made to measure the consumption of Hut
Services.
iii. To calculate the LT line loss, similar DT metering and feeder metering
shall be done atleast in one feeder which has considerable LT network
with 100% consumer metering.
iv. The online measurement taken for a period of one year shall be used to
arrive at the voltage wise T&D losses for the respective FY. Such data
shall be submitted once in every 2 months to the Commission starting from
October 2013.
Fixed Expenses
4.77 In this section expenses related to fixed cost for the second control period (FY 2013-
14 and FY 2015-16) will be approved by the Commission.
Operation and Maintenance Expenses
4.78 During the true-up and performance review of expenses for first control period it was
observed that the O&M expenses for TANGEDCO have increased while those of
TANTRANSCO have decreased. TANGEDCO has clarified that one of the reasons
for this variation is due to segregation of accounts.
4.79 However TN Power utilities have clarified in their current MYT Petition that they
have submitted the actual expenses based on their audited accounts. Also,
TANGEDCO in its Petition has submitted that it was unbundled from the erstwhile
TNEB only on 1st November 2010 and it is difficult for it to derive the O&M
expenses pertaining to transmission activities for the last 5 years. Hence, it has
projected the expenses from FY 2012-13 based on the expenses for the FY 2010-11
and FY 2011-12
4.80 It is pertinent to mention that in the process of the approval of the expenses the
Commission is guided by following regulations
Regulation-25 of TNERC Tariff Regulations, 2005 :
“25. Operation and Maintenance Expenses
4. 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
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 213
June 2013
Commission. The Commission may, if considered necessary engage
Consultant / Auditors in the process of prudence check for correctness.
5. 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.
6. 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.
…”
4.81 However as submitted by TANGEDCO, Commission is of the view that it is not
appropriate to project the expenses for the next control period based on the actual
expenses incurred prior to unbundling of power utilities. Hence in this order
Commission projects the O&M expenses for next control period based on the audited
accounts for FY 2010-11 and provisional accounts for FY 2011-12.
4.82 In following para’s each component of O&M expenses will be discussed in detail and
Commission’s approval for the same will be accorded.
Employee Expenses
4.83 TANGEDCO has projected the employee expenses for the second control period
based on following assumptions and taking the employee expenses based on
provisional accounts for FY 2011-12 as base
i. Basic salary and the grade pay have been considered with an escalation of 5%
for FY 2013-14 to FY 2014-15 and 10% for FY 2012-13 and FY 2015-16 due
to wage revision.
ii. Escalation of DA rate at 15% per annum.
iii. Other expenses such as terminal benefits, pension schemes etc at 10%.
4.84 Commission has arrived at the employee expenses for FY 2012-13 during the
performance review exercise considering provisional accounts of FY 2011-12 as base.
For projecting the employee expenses for the second control period, Commission has
considered the employee expenses approved for FY 2012-13 as base.
4.85 Though TANGEDCO has proposed escalations of more than 4% for various
components of employee expenses, Commission in accordance with its Regulation
has escalated the approved employee expenses for FY 2013-14 at 4% on all
components except for DA for arriving at the employee expenses for second control
period.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 214
June 2013
4.86 However, as submitted by TANGEDCO if due to expected pay revision the employee
expenses increase significantly during FY 2015-16, TANGEDCO is required to
quantify the impact due to pay revision and submit to the Commission during the true-
up exercise for FY 2015-16.
4.87 Commission is of the view that the escalation of DA rate of 15% proposed by
TANGEDCO is in line with recent increases of DA rate and hence considers the
TANGEDCO submission of 15% for projecting the employee expenses for the second
control period.
Table 187: DA rates used for projecting the employee expenses
Parameter FY 2013 FY 2014 FY 2015 FY 2016
Average DA
rates 72.25% 83.09% 95.55% 109.88%
4.88 The employee expense capitalization for second control period for generating stations
have been arrived based on the percentage employee expenses capitalized in FY
2010-11 and FY 2011-12. However, for distribution business the employee
capitalization as per audited accounts comes to 5%, which is on a lower side
compared to historic trend. Also, TANGEDCO has proposed a higher capitalization
rate of 12%-14% during second control period. In view of these discrepancies,
Commission has relied on average employee capitalization of 9% based on historical
data.
4.89 Based on the above approach and methodology, the employee costs submitted by
TANGEDCO and approved by the Commission is tabulated below:
Table 188: Employee expenses approved for generation business during second control period (Rs. Cr)
Plant
2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
Ennore TPS 79.05 71.91 88.16 78.78 102.54 86.70
Tuticorin TPS 104.82 100.10 116.88 110.06 136.28 121.58
Mettur TPS 93.40 89.25 104.18 98.16 121.56 108.48
North Chennai TPS 66.20 64.83 74.54 71.06 88.09 78.26
Total Coal 343.47 326.09 383.75 358.06 448.47 395.02
Tirumakottai GTPS 5.01 4.74 5.59 5.22 6.53 5.78
Kuttalam GTPS 3.95 2.53 4.41 2.79 5.14 3.08
Basin Bridge GTPS 4.46 4.25 4.96 4.67 5.54 5.14
Valuthur GTPS 7.38 7.15 8.18 7.83 9.45 8.62
Total Gas 20.81 18.68 23.14 20.51 26.65 22.62
Erode HEP 28.51 31.65 31.38 34.90 36.10 38.67
Kadamparai HEP 18.96 18.29 21.01 20.02 24.25 22.00
Kundah HEP 31.00 29.26 34.47 32.04 39.96 35.25
Tirunelveli HEP 24.80 23.74 27.56 25.98 31.93 28.56
Total Hydro 103.27 102.95 114.42 112.94 132.24 124.48
Total Generation 467.55 447.72 521.31 491.50 607.35 542.11
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 215
June 2013
Table 189: Employee expenses approved for distribution business during second control period (Rs. Cr)
Parameter
FY 2013-14 FY 2014-15 FY 2015-16
Petition Commission Petition Commission Petition Commission
Salary 1,251.67 1,172.13 1,314.26 1,219.02 1,445.68 1,267.78
Overtime wages 33.20 12.07 34.53 12.55 35.91 13.05
Dearness Allowance 922.17 973.89 1,113.52 1,164.78 1,408.60 1,393.07
Other Allowances 107.22 107.22 111.51 111.51 115.97 115.97
Bonus & Exgratia 59.20 59.20 61.57 61.57 64.04 64.04
Terminal benefits 1,900.56 1,470.93 2,090.61 1,529.77 2,299.67 1,590.96
Other Expenses 195.76 180.28 212.35 187.49 230.47 194.99
Gross Employee
Costs 4,469.79 3,975.73 4,938.35 4,286.69 5,600.34 4,639.86
Less: Capitalisation 632.77 365.78 658.08 394.39 684.41 426.28
Net Employee
Expenses 3,837.02 3,609.95 4,280.26 3,892.30 4,915.94 4,212.98
Repair and Maintenance Expenses
4.90 Similar to projection of employee expenses, R&M expenses are projected based on
actual expenses for FY 2010-11 and FY 2011-12. The five months R&M expenses as
per audited accounts are increased pro-rata basis to arrive at annual expenses which
are later escalated at 4% based on TNERC regulation to arrive at expenses equivalent
to FY 2011-12. The average of this escalated R&M expense and actual R&M expense
for FY 2011-12 is used as base and again escalated at 4% year on year to arrive at
R&M expenses for FY 2013-14.
4.91 However, this approach was not adopted for TTPS, KGTPS and VGTPS. It was
observed that R&M expenses for TTPS are significantly higher and for KGTPS are
significantly lower than the historical R&M expenses and therefore for these stations
the R&M expenses for FY 2013-14 are arrived by escalating the Commission
approved R&M expenses for FY 2012-13 by 4%.
4.92 For VGTPS the R&M expenses for FY 2010-11 are significantly high and hence the
R&M expenses for FY 2013-14 are arrived by escalating the actual R&M expenses
for FY 2011-12 by 4% year on year.
4.93 The R&M expenses for FY 2013-14 of distribution business are also arrived by
considering similar methodology adopted for most of the generating stations. The
average expense of FY 2010-11 and FY 2011-12 is escalated by 4% year on year for
arriving at the R&M expenses for FY 2013-14.
4.94 For remaining years of the control period the R&M expenses are arrived by escalating
the R&M expenses for FY 2013-14 by 4% in accordance to Commission’s regulation.
4.95 Based on the above approach, the R&M expenses approved by the Commission and
submitted by TANGEDCO is tabulated below:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 216
June 2013
Table 190: R&M expenses approved by the Commission for TANGEDCO during the second control
period (Rs. Cr)
Plant
2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
Ennore TPS 44.17 41.44 45.93 43.10 47.77 44.83
Tuticorin TPS 106.17 40.26 110.42 41.88 114.83 43.55
Mettur TPS 23.82 29.21 24.78 30.38 25.77 31.60
North Chennai TPS 66.85 60.91 69.52 63.35 72.30 65.88
Total Coal 241.01 171.83 250.65 178.71 260.67 185.86
Tirumakottai GTPS 5.67 4.50 5.90 4.68 6.13 4.87
Kuttalam GTPS 3.86 3.86 4.01 4.01 4.17 4.17
Basin Bridge GTPS 1.28 1.89 1.33 1.96 1.39 2.04
Valuthur GTPS 1.44 1.44 1.49 1.49 1.55 1.55
Total Gas 12.25 11.68 12.74 12.15 13.25 12.64
Erode HEP 1.15 1.08 1.19 1.12 1.24 1.17
Kadamparai HEP 1.63 1.74 1.70 1.81 1.77 1.88
Kundah HEP 1.39 1.76 1.44 1.83 1.50 1.90
Tirunelveli HEP 1.70 1.40 1.76 1.46 1.83 1.52
Total Hydro 5.86 5.98 6.10 6.22 6.34 6.47
Total Generation 259.11 189.50 269.48 197.07 280.26 204.96
Distribution 69.26 67.82 72.03 70.54 74.91 73.36
TANGEDCO 328.37 257.32 341.51 267.51 355.17 278.32
Administrative and General Expenses
4.96 On preliminary scrutiny, Commission has found self insurance charges pertaining to
generating stations have been accounted under distribution business formats. Hence,
Commission has re-estimated the A&G expenses for FY 2010-11 and FY 2011-12 for
generating stations and distribution business after correctly accounting the self
insurance expenses.
4.97 Similar to projection of R&M, A&G expenses are projected based on re-estimated
actual expenses for FY 2010-11 and FY 2011-12. The five months A&G expenses as
per audited accounts are increased pro-rata basis to arrive at the annual expenses
which are later escalated at 4% based on TNERC regulation to arrive at expenses
equivalent to FY 2011-12. The average of this escalated A&G expense and actual
A&G expense for FY 2011-12 is used as base and again escalated at 4% year on year
to arrive at A&G expenses for FY 2013-14.
4.98 The A&G expenses for FY 2013-14 of distribution business are also arrived by
considering similar methodology adopted for most of the generating stations. The
average expense of FY 2010-11 and FY 2011-12 is escalated by 4% year on year for
arriving at the A&G expenses for FY 2013-14.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 217
June 2013
4.99 For remaining years of the control period the A&G expenses are arrived by escalating
the A&G expenses for FY 2013-14 by 4% in accordance to Commission’s regulation.
4.100 Based on the above approach, the A&G expenses submitted by TANGEDCO and
approved by the Commission is tabulated below:
Table 191: A&G expenses approved for TANGEDCO for second control period (Rs. Cr)
Plant 2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
Ennore TPS 7.26 9.15 7.72 9.52 8.22 9.90
Tuticorin TPS 12.54 15.93 13.32 16.56 14.17 17.23
Mettur TPS 8.48 12.91 8.93 13.42 9.41 13.96
North Chennai TPS 5.46 10.41 5.89 10.82 6.36 11.26
Total Coal 33.74 48.39 35.86 50.33 38.16 52.34
Tirumakottai GTPS 1.06 2.50 1.15 2.60 1.25 2.71
Kuttalam GTPS 0.54 1.72 0.59 1.79 0.63 1.86
Basin Bridge GTPS 1.15 1.81 1.25 1.88 1.35 1.96
Valuthur GTPS 0.87 4.01 0.94 4.17 1.00 4.34
Total Gas 3.62 10.05 3.93 10.45 4.23 10.87
Erode HEP 2.85 5.51 3.01 5.74 3.17 5.96
Kadamparai HEP 5.83 8.01 6.10 8.33 6.38 8.66
Kundah HEP 10.97 15.84 11.44 16.47 11.94 17.13
Tirunelveli HEP 3.78 5.14 4.12 5.35 4.50 5.56
Total Hydro 23.43 34.51 24.67 35.89 25.99 37.32
Total Generation 60.79 92.95 64.46 96.67 68.38 100.53
Distribution 194.03 101.03 229.40 105.08 285.27 109.28
TANGEDCO 254.82 193.98 293.86 201.75 353.65 209.81
4.101 Based on the above approved employee expenses, A&G expenses and R&M
expenses, the O&M expenses approved by the Commission for the second control
period is given below.
Table 192: O&M Expenses approved by the Commission for second control period (Rs. Cr)
Plant
2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
Ennore TPS 130.48 122.50 141.81 131.40 158.53 141.43
Tuticorin TPS 223.53 156.29 240.62 168.50 265.28 182.36
Mettur TPS 125.70 131.37 137.89 141.96 156.74 154.04
North Chennai
TPS 138.51 136.15 149.95 145.23 166.75 155.40
Total Coal 618.22 546.31 670.26 587.10 747.30 633.22
Tirumakottai
GTPS 11.74 11.74 12.64 12.50 13.91 13.36
Kuttalam GTPS 8.35 8.11 9.01 8.59 9.94 9.11
Basin Bridge 6.89 7.95 7.54 8.51 8.28 9.14
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 218
June 2013
Plant
2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
GTPS
Valuthur GTPS 9.69 12.60 10.61 13.49 12.00 14.51
Total Gas 36.68 40.41 39.81 43.11 44.13 46.13
Erode HEP 32.51 38.24 35.58 41.76 40.51 45.80
Kadamparai
HEP 26.42 28.04 28.81 30.16 32.40 32.54
Kundah HEP 43.36 46.86 47.35 50.34 53.40 54.28
Tirunelveli HEP 30.28 30.28 33.44 32.79 38.26 35.64
Total Hydro 132.56 143.44 145.19 155.05 164.57 168.27
Total
Generation 787.46 730.16 855.26 785.26 956.00 847.62
Distribution 4100.31 3778.80 4581.69 4067.92 5276.12 4395.62
TANGEDCO 4887.76 4508.97 5436.94 4853.06 6232.11 5243.22
Operation and Maintenance expenses for new generating stations
4.102 The TNERC tariff regulations sets the following guidelines for determination of
O&M expenses of the new generating stations:
“25. Operation and Maintenance Expenses
In case of the thermal power generating stations declared under commercial operation
on or after the notification of these Regulations, the base operation and maintenance
expenses shall be fixed at 1.0% of the actual capital cost (as admitted by the
Commission), in the year of commissioning and shall be subject to an annual
escalation of 4% per annum for the subsequent years.”
4.103 The capital costs of the new power plants filed by TANGEDCO as per MYT Petition
are tabulated below. TANGEDCO has stated that these projects were awarded on firm
price contract and hence no variation in cost is anticipated. The Commission has
provisionally accepted the submission of TANGEDCO for the purpose of estimation
of O&M expenses.
Table 193: O&M expenses for new thermal stations approved by the Commission (Rs. Cr)
Name of the power
plant
Capital cost as filed in
the Petition (including
IDC) – Rs. Crore
O&M expenses
at 1% of capital
cost – Rs. Crore
Date of
Commissioning
O&M expenses
approved for the
financial year of
commissioning –
Rs. Crore
MTPS Stage – III 3550 35.50 June 2013 26.63
NCTPS Stage II –
Unit 1 5814 58.14
August 2013
43.61 NCTPS Stage III –
Unit 2 June 2013
Ennore Expansion 4012 40.12 January 2016 10.03
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 219
June 2013
Commission in accordance with its tariff regulations has escalated the O&M expenses
approved for the base year by 4% year on year to arrive at the O&M expenses for the second
control period. The O&M expenses approved for the second control period for new
generating stations is tabulated below.
Table 194: O&M expenses approved by the Commission for new generating stations for the second
control period (Rs. Cr)
Name of the power
plant
FY 2013-14 FY 2014-15 FY 2015-16
Petition Commission Petition Commission Petition Commission
MTPS Stage – III 88.20 26.63 92.61 36.92 97.24 38.40
NCTPS Stage II –
Unit 1 168.00 43.61 176.40 60.47 185.22 62.88
NCTPS Stage III –
Unit 2
Ennore Expansion
23.10 10.03
Capital Expenditure and capitalization
4.104 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. However, TANGEDCO has not complied with this provision.
4.105 TANGEDCO has filed the capital expenditure and capitalization schedule for the second control period along with its MYT Petition. There were many discrepancies in
the capital expenditure and capitalization information filed in the Petition. The capital
expenditure filed by TANGEDCO was without any cost benefit analysis. In addition,
TANGEDCO has also not provided any information of sources of funding, broad
details and physical quantum for the proposed capital expenditure.
4.106 The observations and issues pertaining to capital expenditure and capitalization schedule for second control period are same as those discussed in Chapter -A3 under
capital expenditure section.
4.107 Commission reiterates the following directions and observations made in Chapter -A3
i. The information submitted pertaining to the capital expenditure and
capitalization information submitted by TANGEDCO is not satisfactory
ii. The data quality and iteration that went through the capital expenditure and
capitalization schedule along with its GFA schedule needed to be substantially
improved.
iii. Commission directs TANGEDCO to
a) Reconcile its accounts with respect to capital expenditure and
prepare the scheme wise data as per the formats specified by the
Commission.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 220
June 2013
b) File the progress of the capital expenditure and capitalization on
quarterly basis.
c) Finalize its transfer scheme through GoTN at the earliest and
reconcile the GFA, CWIP and capitalization schedules
4.108 In ChapterA3 Commission has expressed its opinion regarding capital expenditure
and is provisionally accepting the capital expenditure and capitalization schedule as
proposed by TANGEDCO for the second control period.
4.109 The actual capital expenditure for the second control period will be reviewed based on audited accounts and the impact of final transfer scheme, prudence verification based
on scheme wise data to be submitted by TANGEDCO will be done during the truing-
up process.
4.110 As mentioned earlier, 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.
4.111 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 upto 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.”
4.112 TANGEDCO is required to file separate Petitions for approval of the tariff for the new generating stations along with accounts for these generating stations duly
certified by statutory auditor. On Commissions directive, TANGEDCO has submitted
partial information for new thermal stations as per the formats prescribed in TNERC
Tariff Regulations. However, the information is not certified by statutory auditor.
With respect to new hydro stations TANGEDCO has not provided any information.
4.113 Commission directs the TANGEDCO to file the separate petitions based on TNERC Regulations duly certified by the statutory auditor along with relevant
generating station accounts within 90 days of issuance of this Order.
4.114 While reviewing the revised capital expenditure proposed for the second control
period it was observed that TANGEDCO has also included the capital expenditure for
Udangudi TPS. This power plant is not likely to be commissioned during the control
period and hence Commission is not considering the capital expenditure for this
power plant in this order. Commission directs TANGEDCO to file a separate
Petition as mentioned above for the approval of capital cost and tariff for this
power plant.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 221
June 2013
4.115 The capital expenditure and capitalization provisionally approved in this order is tabulated below.
Table 195: Capital expenditure and capitalization for generating stations (Rs. Crore)
Plant
Capital Expenditure Capitalization
FY 2013-14 FY 2014-15 FY 2015-16 FY 2013-14 FY 2014-15 FY 2015-16
Ennore TPS 9.00 9.90 10.89 57.02 9.54 10.49
Tuticorin TPS 99.44 109.39 120.33 96.61 105.41 115.95
Mettur TPS 95.06 104.57 115.03 98.30 100.77 110.84
North Chennai
TPS 54.30 59.73 65.70 49.15 57.56 63.31
NCTPS Stage-
II** 269.46 25.50 28.05 5,814.04 12.25 29.58
MTPS Stage-III** 774.25 12.50 13.75 3,550.00 6.25 14.50
Ennore Expansion 1,051.80 1,658.20 1,450.00 - - 4,511.07
Total Thermal 2353.31 1979.79 1803.75 9665.12 291.78 4855.74
Tirumakottai
GTPS 5.82 6.40 7.04 5.60 6.17 6.79
Kuttalam GTPS 3.84 4.22 4.65 2.30 4.07 4.48
Basin Bridge
GTPS 0.90 0.99 1.09 1.72 0.95 1.05
Valuthur GTPS 5.42 5.97 6.56 8.80 5.75 6.32
Total Gas 15.98 17.58 19.34 18.42 16.94 18.64
Erode HEP 1.50 1.65 1.82 0 50.29 1.75
Kadamparai HEP 1.02 1.12 1.23 0.66 1.08 1.19
Kundah HEP 25.82 175.90 315.99 1.39 0.86 0.95
Tirunelveli HEP 1.62 1.78 1.96 11.60 18.72 1.89
New Hydro
Addition - - - - - -
Bhavani Barrage* 22.31 - - 307.18 22.34 -
Bhavani Katlai * 7.50 - - 837.02 7.59 -
Periyar * 26.05 - - 125.88 26.06 -
Total Hydro 85.82 180.45 321 1283.73 126.94 5.78
Cogen Sugar
Mills Under
Modernisation
205.44
711.46 385.73 -
Generation 2660.55 2177.82 2144.09 11678.72 821.39 4880.16
*All the new hydro and thermal projects that are getting capitalized in second control period
will be reviewed at the time of examination of individual tariff Petitions
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 222
June 2013
Table 196: Capital expenditure and capitalization approved for distribution business for second control
period (Rs. Crore)
Capital Schemes Capital Expenditure Capitalization
FY 2013-14 FY 2014-15 FY 2015-16 FY 2013-14 FY 2014-15 FY 2015-16
33 KV Lines 33.28 38.27 45.92 26.15 37.77 45.15
33 KV Substations 47.88 55.07 66.08 37.62 54.35 64.98
11 KV Lines and
Other LT Lines 27.94 32.13 38.56 21.95 31.71 37.91
Other Construction
Schemes 717.70 825.35 990.42 563.94 824.44 991.01
General
Improvement
Schemes
355.58 408.91 490.69 279.40 403.58 482.52
Distribution Transformers
Failure/Replacement
100 KVA 10.98 12.63 13.89 10.98 12.63 13.89
250 KVA 18.30 21.05 23.15 18.30 21.05 23.15
500 KVA 13.80 15.87 17.46 13.80 15.87 17.46
New/Additional
with Structure
100 KVA 11.53 13.26 14.58 11.53 13.26 14.58
250 KVA 19.22 22.10 24.31 19.22 22.10 24.31
500 KVA 14.49 16.66 18.33 14.49 16.66 18.33
Extension of Service connections
HT Industry 26.54 30.53 33.58 26.54 30.53 33.58
LT Industries 14.70 16.91 18.60 14.70 16.91 18.60
LT Domestic 16.62 19.11 21.02 16.62 19.11 21.02
LT Commercial 11.82 13.59 14.95 11.82 13.59 14.95
Other categories 22.20 25.53 28.08 22.20 25.53 28.08
Deposit
Contribution Works
(DCW)
57.70 64.90 72.50 57.70 64.90 72.50
Rural Electrification
Works 49.78 57.24 68.69 39.11 56.49 67.54
Agricultural
Services 49.72 57.18 68.61 39.07 56.43 67.47
Segregation of
Feeders 2.48 2.85 3.42 1.94 2.81 3.36
Hut Electrification 0.99 1.14 1.37 0.78 1.12 1.34
RAPDRP - PART B
Schemes - Erection
of new SS, RMU,
Meters,
Sectionalisation, etc
916.46 752.05 484.67 916.46 752.05 484.67
RGGVY 1.25
1.25 - -
Survey,
investigation,
computerisation
2.35 2.75 2.95 2.35 2.75 2.95
Others if any 6.30 7.25 7.97 6.30 7.25 7.97
Total 2,449.59 2,512.30 2,569.79 2,174.23 2,502.88 2,557.33
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 223
June 2013
Depreciation
4.116 In its Petition, TANGEDCO has submitted the opening gross block for each of the
generating plant and for distribution function for FY 2010-11 (5 months) in line with
the provisional transfer scheme notified by the Government of Tamil Nadu vide
notification dated 2nd January 2012.
4.117 Later in response to Commissions query regarding revaluation reserve, TANGEDCO
revised the opening GFA based on provisional accounts and without considering the
revaluation reserve.
4.118 In another query raised by the Commission regarding the depreciation rates used by
TANGEDCO, it has submitted that TANGEDCO has used the weighted average
depreciation rate for the particular group of asset arrived based on depreciation rates
specified in the Tariff Regulation. Hence, Commission is accepting the depreciation
rates as proposed by TANGEDCO.
4.119 TNERC Tariff Regulations 2005 specifies following guidelines for calculation of depreciation:
24. Depreciation
For the purpose of tariff, depreciation shall be computed in the following manners:
i. The value base for the purpose of depreciation shall be historical cost
of the asset.
ii. The depreciation shall be calculated at the rates as per the Annexure
to these Regulations.
iii. The residual value of assets shall be considered as 10% and
depreciation shall be allowed upto maximum of 90% of the estimated
cost of the Asset.
iv. Land is not a depreciable asset and its cost shall be excluded from the
capital cost while computing 90% of the historical cost of the asset.
v. The historical cost of the asset shall include additional capitalisation.
vi. Depreciation shall be chargeable from the first year of operation. In case of
operation of the asset for part of the year, depreciation shall be
charged on pro-rata basis.
vii. After the assets are fully depreciated the benefit of reduced tariff shall
be made available to the consumer.
4.120 Commission has calculated depreciation considering the revised opening GFA
without revaluation reserve, weighted average depreciation rates and deductions
submitted by TANGEDCO, and capitalization approved by the Commission in this
order. The GFA considered and depreciation rates considered for estimation of
depreciation is tabulated below:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 224
June 2013
Table 197: Opening GFA considered for calculation of depreciation (Rs. Crore)
Power Station
As on April
2013
As on April
2014
As on April
2015
Ennore TPS 1059.48 1116.51 1126.05
Tuticorin TPS 1925.06 2021.67 2127.08
Mettur TPS 1147.29 1245.59 1346.35
North Chennai TPS 2038.57 2087.73 2145.28
NCTPS Stage-II** 5814.04 5826.29
MTPS Stage-III** 3550.00 3556.25
Ennore Expansion
Total Thermal 6,170.40 15,835.53 16,127.30
Tirumakottai GTPS 457.79 463.39 469.56
Kuttalam GTPS 503.27 505.57 509.64
Basin Bridge GTPS 551.33 553.05 554.01
Valuthur GTPS 622.73 631.53 637.27
Total Gas 2,135.12 2,153.54 2,170.48
Erode HEP - (incl. Bhavani
Barrage and Bhavani Khattai) 733.21 2003.28 2109.56
Kadamparai HEP 366.04 366.69 367.78
Kundah HEP 957.72 959.11 959.97
Tirunelveli HEP (incl -
Periyar) 420.34 431.94 450.65
Total Hydro 2,477.31 3,761.02 3,887.96
Tirunelveli 206.45 206.45 206.45
Udumalpet 136.41 136.41 136.41
Total Wind 342.86 342.86 342.86
Cogeneration Plants
711.46 1097.19
Generation 11,125.68 22,804.41 23,625.80
Distribution 10,595.12 12,769.34 15,272.22
TANGEDCO 21,720.80 35,573.75 38,898.02
4.121 For new generating stations, TANGEDCO has not considered depreciation during the year of commissioning. However as per TNERC Tariff Regulations 2005 clause
24(vi) depreciation for generating stations shall be chargeable from the first year of
operation. In case of operation of the asset for part of the year, depreciation
shall be charged on pro-rata basis. Accordingly, Commission has allowed the
depreciation for new generating stations on pro-rata based on CoD during the first
year of operation.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 225
June 2013
4.122 Based on the above approach, Commission approves depreciation for all the
generating stations and distribution business except for wind stations and
cogeneration plants. In the last tariff order Commission has approved a transfer price
of Rs. 2.75 per unit own wind mills while for cogeneration plants in this order
Commission is considering the tariff based on its cogeneration tariff order dated 31st
July 2012. Hence, in this order Commission is not determining fixed expenses on
account of the own wind mills and cogeneration plants.
Table 198: Depreciation approved by the Commission for the second control period (Rs. Crore)
Power Station
FY 2013-14 FY 2014-15 FY 2015-16
Petition Commission Petition Commission Petition Commission
Ennore TPS 37.80 37.54 37.85 39.56 37.90 39.90
Tuticorin TPS 64.98 66.36 66.99 69.69 69.42 73.33
Mettur TPS 39.66 37.37 40.28 40.57 41.03 43.85
North Chennai TPS 64.86 63.27 66.15 64.79 67.70 66.58
NCTPS Stage-II - 124.61 186.92 186.92 187.69 187.69
MTPS Stage-III 126.61 86.37 127.04 127.04 127.49 127.49
Ennore Expansion
- 36.58
Total Coal 333.91 415.52 525.23 528.57 531.23 575.42
Tirumakottai GTPS 15.90 16.14 16.99 16.34 17.39 16.55
Kuttalam GTPS 12.86 17.63 13.22 17.71 13.49 17.86
Basin Bridge GTPS 19.81 19.81 20.04 19.87 20.17 19.91
Valuthur GTPS 19.11 21.99 19.68 22.30 20.43 22.50
Total Gas 67.68 75.57 69.93 76.22 71.48 76.82
Erode HEP - (incl.
Bhavani Barrage and
Bhavani Khattai)
35.90 21.45 35.92 58.62 35.96 61.73
Kadamparai HEP 10.53 10.58 12.26 10.60 14.31 10.63
Kundah HEP 25.39 25.19 25.49 25.23 26.10 25.25
Tirunelveli HEP (incl -
Periyar) 14.36 12.19 14.99 12.53 16.44 13.07
Total Hydro 86.18 69.41 88.66 106.98 92.81 110.68
Total Generation 487.77 560.50 683.82 711.77 695.52 762.92
Total Distribution 327.61 362.39 388.22 435.26 530.40 519.14
TANGEDCO 815.38 922.89 1072.04 1147.03 1225.92 1282.06
Note: During true-up/performance review/tariff determination exercise, the NFA of each
asset must be verified with respect to audited accounts to confirm whether the asset has
depreciated by 90%.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 226
June 2013
Interest on long term loans and other financing charges
4.123 In the last tariff order Commission has approved the total interest expenses
corresponding to actual long term and short term loans borrowed by TANGEDCO. In
the current Petition TANGEDCO has claimed the interest expenses corresponding to
only long term loans and separately claimed the interest on working capital as per
norms specified by TNERC in its Tariff Regulations 2005.
4.124 The opening balance of loans as on 1st November 2010 for TANGEDCO considered
in its Petition is based on the provisional transfer scheme notified as on 2nd January
2012. TANGEDCO in its Petition has submitted that the loan of a financial
institution is not linked with any particular generating plant or the CAPEX schemes as
erstwhile TNEB used to have a basket of loan which was used to meet the total capital
expenditure of erstwhile TNEB. Therefore it is difficult to identify the debt / interest
and equity of the generating plant or station wise or distribution function wise.
4.125 Hence TANGEDCO has adopted the following approach for segregation of interest to the generating plant / station and distribution function
i. Project specific loans for generation and distribution is initially
allotted to each of the respective project and considered as opening
loan balance for that particular project.
ii. Large quantum of generic loans which cannot be differentiated into
project specific loans and interest paid on these loans is bifurcated as
per opening gross block of generation and distribution notified as per
transfer scheme.
4.126 In response to Commissions query, TANGEDCO has revised the long term loans and
segregated these loans among those borrowed for capital projects, repayment of
existing loans and funding the revenue expenditure. The summary of revised
submission of TANGEDCO is tabulated below:
Table 199: Revised interest expenses submitted by TANGEDCO in Rs. Crore
Particulars 2013-14 2014-15 2015-16
Loan Profile
Op. Balance 37,822 45,569 52,291
Add: Addition for CAPEX 4,237 4,105 4,573
Add: Addition for Loan
Repayment 11,631 3,099 3,189
Add: For Revenue Expenditure 4,233 3,785 1,908
Less: Loan Repayment 12,354 4,267 4,467
Closing Balance 45,569 52,291 57,494
Gross Interest Expenses 4806.37 5628.38 6265.39
IDC 863.85 798.41 934.36
Net Interest Expenses 3942.52 4829.97 5331.03
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 227
June 2013
4.127 In its last order Commission has stated that there is a mix up between the capital
account and the revenue account. In the revised submission TANGEDCO has again
included the borrowings corresponding to revenue account in capital account in its
revised submission. Based on the revised submission Commission has made the
following observations:
i. The average interest rate for FY 2010-11 is higher than the rate at which the
long term loans are procured.
ii. The loan repayment submitted by TANGEDCO includes the repayment of
loans that have been borrowed for revenue expenditure during the control
period.
4.128 In ChapterA3, Commission has discussed in detail the approach to be adopted for
approving interest on long term loans and finance charges. Commission reiterates its
view and treats the capital account and revenue account separately. Commission for
the determination of interest expenses on long term loans for the second control
period has considered following assumptions:
i. Closing loans as on March 2013 as estimated by the Commission for the first
control period have been taken as base.
ii. The repayment of existing loans as per audited accounts also includes the
repayment of loans borrowed for revenue account. Commission is treating the
revenue account separately and also allowing the interest expenses on account
of regulatory asset approved in its last tariff order. Hence, allowing the
borrowings and interest expenses corresponding to the repayment of loans
borrowed for funding of revenue account will result in double accounting of
the interest expenses allowed for funding the revenue gap. In view of this,
Commission is accepting the opening loans as on 1st November 2010 and is
assuming a repayment period of 10 years.
iii. The repayment period of new loans borrowed during the control period is
assumed to be 10 years
iv. The borrowings required for loan repayment will be estimated after taking into
account the depreciation allowed during the year.
v. Loans required for the capital works will be arrived after considering the
approved capital expenditure and available grants and consumer contribution
during the control period.
vi. Equity required for funding the capital expenditure is assumed to be nil as
Commission is not allowing any return on equity.
vii. The consumer contribution and grants for FY 2013-14 to FY 2015-16 have
been estimated considering the historical trends
viii. Interest expenses on account of capital works for wind assets has not been
considered as borrowings on account of wind assets cannot be loaded on
determination of tariff for other generating stations and distribution business.
Commission has already approved generation cost for wind assets based on
transfer price mechanism.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 228
June 2013
ix. Interest on cogeneration sugar mills is also not considered as the tariff for
these generating stations is taken as per Commission’s tariff order for
procurement of power from cogeneration.
x. Interest rate for FY 2013-14 to FY 2015-16 is assumed to be at 11.98% i.e. the
average interest rate for FY 2010-11 and FY 2011-12 arrived after considering
revised loan profile.
xi. Interest during construction (IDC) is approved based on capital works in
progress.
4.129 The details of borrowings and interest expenses approved by the Commission
corresponding to capital expenditure and repayment of loans are given below.
Table 200: Borrowings considered for funding capital expenditure (Rs. Cr)
Particulars 2013-14 2014-15 2015-16
Capital Expenditure 5,110.15 4,690.12 4,713.88
Less: Consumer Contribution 497.68 518.67 540.55
Less: Grants 104.94 104.94 104.94
Loans required for finding capital expenditure 4,507.53 4,066.52 4,068.39
Table 201: Borrowings considered for repayment of loans (Rs. Cr)
Particulars 2013-14 2014-15 2015-16
Repayment of Existing loans (As on Nov 1, 2010) 1,874.72 1,874.72 1,874.72
Repayment of new loans 2543.72 3359.04 4250.17
Less: Depreciation 922.90 1147.03 1282.06
Loans required for repayment of loans 3,495.54 4,086.74 4,842.83
Table 202: Average interest rate estimated for the control period
Parameter 2010-11 2011-12 Average
Opening Loans (Rs. Cr)* 18747 23094
Closing Loans (Rs. Cr)* 23094 33277
Average Loans (Rs. Cr) 20921 28186
Interest Charged (Rs. Cr) 1156 3018
Average interest rate 13.26% 10.71% 11.98%
*Revised loan profile considering first seven months loan transactions in FY 11
Table 203: Interest expenses approved by the Commission for the second control period (Rs. Cr)
Particulars 2013-14 2014-15 2015-16
Loan Profile
Op. Balance 28,461 32,045 34,965
Add: Addition for CAPEX 4,508 4,067 4,068
Add: Addition for Loan Repayment of loans 3,496 4,087 4,843
Less: Loan Repayment 4,418 5,234 6,125
Closing Balance 32,045 34,965 37,751
Gross Interest Expenses 3,625 4,015 4,357
IDC 1,060 618 738
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 229
June 2013
Particulars 2013-14 2014-15 2015-16
Net Interest Expenses 2,565 3,397 3,619
Net Interest Expenses - Cogeneration plants 43 108 131
Net Interest Expenses – approved 2,522 3,288 3,487
4.130 It is pertinent to mention that long term loans of Rs. 15065 Crs have been allocated to
TANGEDCO through provisional transfer scheme. The repayment of loans is usually
done through depreciation provided. However, due to high opening loans, the
depreciation provision as per regulations is not sufficient for meeting the debt
obligations of loans allocated through transfer scheme. TANGEDCO is repaying the
existing loans by borrowing new loans. Therefore, borrowings required for meeting
debt obligations can only be reduced either by additional cash infusion into the
business or by finalizing the transfer scheme by reducing opening loans.
4.131 Commission has allocated the opening loans as on November 2010 between
generating stations and distribution business based on net fixed assets and CWIP.
Later on the addition and repayment of loans allocation has been done based on
approach as detailed above to arrive at the opening loans as on April 2013. The
interest expenses approved by the Commission based on loan allocation among
generating stations and distribution is tabulated below:
Table 204: Approved interest expenses on long term loans for TANGEDCO for second control period
(Rs. Cr.)
Power Station 2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
Ennore TPS 11.07 105.10 23.48 104.47 19.68 100.91
Tuticorin TPS 101.92 132.25 118.30 136.21 86.95 140.90
Mettur TPS 43.23 74.97 51.60 82.23 43.95 89.85
North Chennai TPS 190.99 110.09 189.23 108.82 142.72 108.19
NCTPS Stage-II 468.52 340.87 362.32 671.27 277.24 651.33
MTPS Stage-III 317.60 173.48 279.92 373.76 242.02 359.75
Ennore Expansion
-
- 215.37 67.02
Total Coal 1,133.33 936.77 1,024.84 1,476.75 1,027.93 1,517.95
Tirumakottai GTPS 66.21 45.60 63.87 44.36 58.30 43.17
Kuttalam GTPS 49.69 55.73 48.47 53.99 44.53 52.37
Basin Bridge GTPS 63.30 16.27 64.31 14.05 60.32 11.79
Valuthur GTPS 87.51 109.76 81.81 107.98 73.43 106.02
Total Gas 266.71 227.36 258.45 220.38 236.58 213.34
Erode HEP - (incl.
Bhavani Barrage and
Bhavani Khattai)
162.59 152.03 158.36 220.59 144.76 218.29
Kadamparai HEP 29.86 34.59 35.75 33.43 38.14 32.29
Kundah HEP 68.50 123.90 81.99 121.01 84.00 118.10
Tirunelveli HEP (incl
- Periyar) 86.85 59.42 80.03 68.86 71.87 70.12
Total Hydro 347.80 369.95 356.14 443.89 338.77 438.80
Total Generation 1,747.84 1,534.08 1,639.43 2,141.02 1,603.28 2,170.10
Distribution 1,663.81 988.31 1,773.44 1,147.27 1,862.00 1,317.23
TANGEDCO 3,411.65 2,522.39 3,412.87 3,288.30 3,465.28 3,487.33
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 230
June 2013
4.132 TANGEDCO in its Petition has also claimed interest on consumer security deposit at
7% on consumer security deposits and other finance charges assuming an escalation
of 5%.
4.133 Commission has approved the interest expenses incurred on consumer security
deposits to the extent of working capital requirement determined by the Commission
in Table 209 based on the norms specified in the TNERC Tariff Regulation, 2005 for
distribution business. The interest rate has been considered at 9% in accordance to its
order on interest on consumer security deposit dated 5th February 2013.
4.134 Commission has observed that TANGEDCO has claimed interest on GPF in other
finance charges. Commission is not allowing the interest expenses on GPF as it has
not considered GPF reserve for funding of capital expenditure. Also, TANGEDCO
has escalated the other finance charges by 5% and has not provided adequate basis for
this escalation. However, Commission is of the view that other finance charges are
mainly due to guarantee charges and fund raising charges. These charges would
depend on type and amount of loans being borrowed during the year. Hence,
Commission is not accepting the escalation of 5% proposed by the Petitioner and is
approving these charges equivalent to those incurred during FY 12. Any increase on
account of these charges will be subsequently reviewed during the true-up exercise.
4.135 The interest expenses on consumer security deposits and other finance charges
approved by the Commission are tabulated below.
Table 205: Interest on consumer security deposits and and other finance charges approved by the
Commission (Rs. Cr)
Parameter 2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
Interest on consumer
security Deposits 419.01 449.60 439.96 505.23 461.96 534.31
Guarantee Charges 43.04 39.04 45.20 39.04 47.46 39.04
Other Charges (Finance
Cost Paid) 111.92 48.10 117.52 48.10 123.39 48.10
Total 573.97 536.74 602.68 592.37 632.81 621.45
4.136 The overall interest and other finance charges approved by the Commission for the
distribution business during the second control period are given below.
Table 206: Interest and other finance charges approved for distribution business for the second control
period (Rs. Cr)
Parameter 2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
Interest on long term
loans 1663.81 988.31 1773.44 1147.27 1862.00 1317.23
Interest on consumer
security Deposits 419.01 449.60 439.96 505.23 461.96 534.31
Other finance charges 154.96 87.14 162.71 87.14 170.85 87.14
Total interest and
finance charges 2,237.78 1,525.05 2,376.11 1,739.64 2,494.81 1,938.68
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 231
June 2013
Return on Equity
4.137 TANGEDCO in its Petition has submitted that it has calculated return on equity for
the control period at 14% on the average equity base for the corresponding year.
Table 207: Return on equity filed by TANGEDCO for the second control period (Rs. Cr)
Power Station 2013-14 2014-15 2015-16
Ennore TPS 32.97 33.03 33.08
Tuticorin TPS 59.55 62.27 65.39
Mettur TPS 39.44 40.32 41.33
North Chennai
TPS 65.76 67.69 69.90
NCTPS Stage-
II** 122.09 244.69 245.73
MTPS Stage-
III** 149.37 149.88 150.42
Ennore
Expansion - 67.63
Tirumakottai
GTPS 14.74 15.63 16.07
Kuttalam GTPS 11.72 12.09 12.42
Basin Bridge
GTPS 17.14 17.34 17.43
Valuthur Unit-I 17.66 18.44 19.38
Valuthur Unit-II - - -
- -
Erode HEP 44.60 44.65 44.70
Kadamparai HEP 12.53 15.27 18.39
Kundah HEP 29.97 30.53 31.54
Tirunelveli HEP 15.55 17.06 19.27
Generation 633.09 768.90 852.68
Distribution 404.66 600.67 965.59
TANGEDCO 1,037.75 1,369.57 1,818.27
4.138 Commission in Chapter A3 has discussed in detail its stand on not allowing return on
equity. In accordance to the stand taken, Commission is not allowing return on equity
for TANGEDCO during the control period due to following reasons:
i. Based on available sources of funding equity has been diverted towards
revenue account right from FY 2003 and hence the addition in equity base as
per audited accounts is on account of funding the revenue expenditure but not
for creation of capital assets.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 232
June 2013
ii. Loans approved for funding the capital expenditure for generating stations and
distribution business during the control period are without considering the
equity
Interest on Working Capital
4.139 TANGEDCO has claimed interest on working capital for its generating stations and
distribution based on norms specified in the TNERC Tariff Regulations, 2005.
4.140 Commission has not approved the interest on working capital in its last order as it has
approved interest expenses corresponding to total loans including short term
borrowings. However TANGEDCO in its current Petition has not claimed interest
expenses for short term borrowings separately and instead claimed interest on
working capital based on approved norms. Commission is of the view that it is
appropriate to approve and segregate the loans based on purpose and in line with its
Tariff Regulations. Hence, Commission approves the interest expenses based on its
Tariff Regulations and relevant guidelines are reproduced below:
“26. Working Capital
(2) Till such a formula is evolved, the norms for Working Capital shall be as below:
(a) For Coal based / Lignite fired Generating Stations
(i) Cost of coal or lignite for one and half month for pit head
generating stations and two months for non pit head generating stations
corresponding to the target availability;
(ii) Cost of secondary fuel oil for two months corresponding to the
target availability;
(iii) Operation and Maintenance expenses for one month;
(iv) Maintenance spares @ 1% of the historical cost escalated @ 6%
per annum from the date of commercial operation; and
(v) Receivables equivalent to two months of fixed and variable charges for
sale of electricity calculated on .target availability.
(b) For Gas Turbine / combined cycle Generating Stations
(i) Fuel cost for one month corresponding to the target availability duly
taking into account the mode of operation of the Generating Station on gas
fuel and liquid fuel;
(ii) Liquid fuel stock for half month;
(iii) Operation and Maintenance expenses for one month;
(iv)Maintenance spares @ 1% of the historical cost escalated @ 6% per
annum from the date of commercial operation; and
(v) Receivables equivalent to two months of fixed and variable charges
for sale of electricity calculated on target availability.
(c) For Hydro Power Generating Stations
The working Capital shall cover:
(i) Operation and Maintenance expenses for one month;
(ii) Maintenance spares @ 1% of the historical cost escalated @ 6%
per annum from the date of commercial operation; and
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 233
June 2013
(iii) Receivables equivalent to two months of fixed charges for sale of
electricity, calculated on normative capacity index.
(e) For Distribution System
(i) Operation and Maintenance expenses for one month
(ii) Maintenance spares for two months based on annual requirement
considered at 1% of the gross fixed cost at the beginning of the year.
(iii) Receivable equivalent to sixty day consumption charges.
27. Interest on Working Capital
The short term rate of interest on working capital shall be on normative basis and shall be
equivalent to the primary lending rate of State Bank of India as on 1st April of the
relevant year.”
4.141 Commission has estimated the interest on working capital for generating stations
considering the variable costs and fixed costs approved in this orders and interest rate
of 14.45% as per SBI PLR dated April 1, 2013.
4.142 The interest on working capital approved by the Commission for generating stations
during the second control period is tabulated below.
Table 208: Interest on working capital approved by the Commission during the control period (Rs.
Crore)
Power Station 2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
Ennore TPS 30.65 21.37 31.11 21.79 31.79 22.10
Tuticorin TPS 129.57 120.66 137.53 121.39 145.74 122.52
Mettur TPS 101.73 99.70 107.83 100.45 113.31 101.53
North Chennai
TPS 76.09 70.61 80.92 71.01 83.76 71.64
NCTPS Stage-
II** 136.39 93.13 171.96 112.82 186.24 112.56
MTPS Stage-
III** 91.63 56.55 102.25 58.62 110.65 58.38
Ennore
Expansion 26.58 10.53
Tirumakottai
GTPS 9.14 7.50 9.62 7.51 9.88 7.55
Kuttalam GTPS 7.54 7.45 7.80 7.43 7.85 7.44
Basin Bridge
GTPS 8.52 4.75 7.45 4.72 7.57 4.69
Valuthur GTPS 19.88 12.51 20.05 12.52 21.01 12.55
Erode HEP -
(incl. Bhavani
Barrage and
Bhavani Khattai)
9.33 6.78 9.33 11.40 9.18 11.72
Kadamparai HEP 3.01 2.69 3.46 2.74 3.91 2.80
Kundah HEP 6.32 6.81 6.83 6.87 7.19 6.94
Tirunelveli HEP
(incl - Periyar) 5.00 3.41 4.97 3.76 5.13 3.93
Total
Generation 634.80 513.92 701.11 543.03 769.79 556.86
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 234
June 2013
4.143 For distribution business TANGEDCO has claimed the working capital requirement
based on norms approved by the Commission except for maintenance spares. The
working capital requirement for maintenance spares has been claimed at 1% of GFA
instead of two months of the annual requirement as per regulations. Also,
TANGEDCO has not taken into account the consumer security deposits for arriving at
the working capital requirement.
4.144 Commission has approved the interest on consumer security deposit to the extent of
working capital requirement under interest on loans and hence Commission is of the
view that interest on working capital for distribution business can only be allowed on
working capital requirement above the consumer security deposits.
4.145 Consumer security deposit is estimated based on historical trend of increase in
consumers and average security deposit per consumer. Net working capital
requirement is estimated considering the norms. The working capital requirement and
available consumer security deposit for the control period is tabulated below.
Table 209: Approved working capital requirement and available consumer security deposits during the
second control period (Rs. Cr)
Particulars 2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
O & M expenses 341.69 314.90 381.81 338.99 439.68 366.30
Maintenance Spares 187.73 17.66 254.85 21.20 367.11 25.45
Receivables 4,949.13 4,663.04 7,747.94 5,253.44 8,595.93 5,541.64
Total Working
Capital 5,478.55 4,995.60 8,384.60 5,613.71 9,402.71 5,933.40
Available Consumer
Security Deposits 6,237.27
6,625.57
7,021.22
Net Requirement 5,478.55 -1,241.67 8,384.60 -1,011.86 9,402.71 -1,087.82
4.146 From the above table it can be observed that available consumer security deposits are
more than the working capital requirement. In view of this Commission is not
approving any interest on working capital as it has already approved interest on
consumer security deposits in interest and finance charges.
Table 210: Interest on working capital approved during the second control period (Rs. Cr)
Parameter FY 2013-14 FY 2014-15 FY 2015-16
Petition Commission Petition Commission Petition Commission
Distribution 808.09 0.00 1236.73 0.00 1386.90 0.00
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 235
June 2013
Other Debits
4.147 TANGEDCO in its Petition has included the other fuel costs, lubricants and consumable and water costs in other debits for generating stations. In response to
Commissions query regarding this discrepancy, TANGEDCO has made the following
submissions
i. Cost of water, other fuel costs and lubricants and consumables are
part of operating expenses of power stations of TANGEDCO and
these expenses were not claimed under fuel expenses or repairs and
maintenance expenses, and therefore have been included in other
debits. TANGEDCO requested the Commission to allow these
expenses as they are operating expenses for generation of power.
4.148 Commission is of the view that though TANGEDCO has not included the operating
expenses claimed in other debits in its O&M expenses, these expenses cannot be
allowed as Commission has already approved the O&M expenses in this order and all
the operating expenses must be met through approved O&M expenses
4.149 Hence Commission is not approving the operating expenses claimed in other debits.
Commission is allowing other debits during the second control period for the
generating stations equivalent to that approved for FY 2012-13 in this order.
Table 211: Other debits approved by the Commission for generating stations (Rs. Cr)
Power Station 2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
Ennore TPS 12.60 0.20 13.10 0.20 13.63 0.20
Tuticorin TPS 7.69 0.30 8.00 0.30 8.32 0.30
Mettur TPS 1.70 0.20 1.77 0.20 1.84 0.20
North Chennai TPS 26.13 0.40 27.17 0.40 28.26 0.40
NCTPS Stage-II 0.00
0.00
0.00
MTPS Stage-III 0.00
0.00
0.00
Ennore Expansion
0.00
0.00
Tirumakottai GTPS 0.51 0.10 0.53 0.10 0.55 0.10
Kuttalam GTPS 0.14 0.06 0.15 0.06 0.15 0.06
Basin Bridge GTPS 0.05 0.10 0.05 0.10 0.06 0.10
Valuthur Unit-I 0.00 0.20 0.00 0.20 0.00 0.20
Valuthur Unit-II 0.00
0.00
0.00
Erode HEP - (incl.
Bhavani Barrage and
Bhavani Khattai)
0.10 0.12 0.11 0.12 0.11 0.12
Kadamparai HEP 0.00 0.10 0.00 0.10 0.00 0.10
Kundah HEP 0.17 0.20 0.17 0.20 0.18 0.20
Tirunelveli HEP (incl -
Periyar) 3.07 0.10 3.19 0.10 3.32 0.10
Total Generation 52.16 2.08 54.25 2.08 56.42 2.08
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 236
June 2013
4.150 For distribution business TANGEDCO has included DSM under other debits.
However TANGEDCO in its Petition has not provided any adequate information
pertaining to DSM expenses.
4.151 Regulation 29 of TNERC Tariff Regulations, 2005 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.”
4.152 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, Commission approves the other debits as
claimed by TANGEDCO except for DSM.
Table 212: Other Debits approved by the Commission for Distribution Business (Rs. Cr)
Parameter 2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
Research & Development
expenses 0.07 0.07 0.08 0.08 0.09 0.09
Bad & Doubtful debts
written off
(0.25% of receivables)
14.21 14.21 19.37 19.37 21.49 21.49
Miscellaneous losses and
written off/provided for 5.66 5.66 6.23 6.23 6.85 6.85
Demand Side Management 10.00 - 10.00 - 10.00 -
Total 29.94 19.94 35.68 25.68 38.43 28.43
Less: Capitalization 0.01 0.01 0.01 0.01 0.01 0.01
Net expenses 29.93 19.93 35.67 25.67 38.42 28.42
Contribution for Contingency reserves
4.153 TANGEDCO has claimed contingency reserve at 0.25% of GFA in FY 2012-13 in
accordance to TNERC MYT Regulations.
“Regulation 35 of the MYT Regulations 2009,
To meet out any contingent liability or unforeseen revenue losses, the Distribution licensees
shall maintain a contingency reserve. The Distribution Licensees shall estimate the
contingency reserve on the value of Assets for each year of the control period.
Regualtion31 of the Tariff Regulations 2005,
The Generating Companies and the licensees shall provide and maintain a
contingency reserve upto 0.5% of the value of assets at the beginning of the year and
the provision made for the year will be allowed in their Revenue Requirement. This
reserve will be utilised to meet any contingent liability or unforeseen revenue losses.”
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 237
June 2013
4.154 It is pertinent to mention that provision for contingency reserve is appropriate when
utility is in revenue surplus and some portion of this surplus revenue can be
contributed for contingency reserve. However, in the current petition TANGEDCO
has shown a revenue gap of Rs. 10344 Crs in FY 2013-14 at existing tariffs and in this
situation it is inapt to allow the expenses on account of contingency reserve. Hence,
Commission disallows the contingency reserve as claimed by TANGEDCO.
Table 213: Contribution to contingency reserved approved by the Commission (Rs. Cr)
Parameter 2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
Contribution to Contingency
Reserves 75 Nil 89 Nil 122 Nil
Summary of fixed Cost approved for Distribution business
4.155 Based on above submissions, the summary of fixed cost approved for distribution
function during the second control period is tabulated below:
Table 214: Summary of fixed costs approved by the Commission for the second control period (Rs. Cr)
Parameter TANGEDCO filing Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Operation and Maintenance Expenses 4100 4582 5276 3779 4068 4396
Depreciation 328 388 530 362 435 519
Interest on Long term loan 2238 2376 2495 1525 1740 1938
Other Debits & extra ordinary items 30 36 38 20 26 28
Prior Period Debit/(Credit) Charges 0 0 0 0 0 0
Reasonable Return / Return on
Equity 405 601 966 0 0 0
Interest on Working Capital 808 1237 1387 0 0 0
Contribution to Contingency
Reserves 75 89 122 0 0 0
Total 7984 9308 10814 5686 6268 6882
Expenses on account of Generation
4.156 In this Section, the Commission in accordance with TNERC (Terms and Conditions
for determination of Tariff) Regulations, 2005 has analysed the expenses on account
of Generation business of TANGEDCO from FY 2013-14 to FY 2015-16 submitted
by TANGEDCO
4.157 In respect of components of Tariff for Generating Stations, Regulation-36 of TNERC
Tariff Regulations, 2005 states as under:
“36. Components of Tariff
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 238
June 2013
4. 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.
5. The Fixed (annual capacity) charges shall consist of the following elements:
f) Interest on Loan Capital;
g) Depreciation
h) Return on Equity;
i) Operation and Maintenance expenses; and
j) Interest on Working Capital:
6. The energy (variable) charges shall cover fuel cost.”
4.158 Commission in accordance with its regulations is approving the capacity charges and
variable cost on account of own generating stations and approach for the same is
detailed below.
Capacity charges for own generating stations
4.159 In above sections, Commission has approved the fixed expenses with respect to
generating stations for the first control period.
a) O&M expenses – Refer to Table 192 and Table 194
b) Depreciation – Refer to Table 198
c) Interest on long term loans – Refer to Table 204
d) Return on Equity – Refer to Point 4.138
e) Interest on Working Capital – Refer to Table 208
f) Other Debits – Refer to Table 211
4.160 With respect to other income, TANGEDCO has considered an escalation of 5% based
on its provisional accounts for FY 2011-12. Due to the fact that TANGEDCO has
projected the other income based on its provisional accounts, Commission is
accepting the other income submitted by TANGEDCO for its own generating stations
provisionally.
4.161 For new thermal and hydro stations, Commission is provisionally approving the fixed
costs for the second control period. However, Commission reiterates its direction
given to TANGEDCO in earlier section to submit a separate Petition for approval of
capital cost of new generating stations on finalization of which necessary adjustments
have to be made to the provisionally approved expenses.
4.162 Based on above submissions, the summary of fixed expenses for own generating
stations as proposed by TANGEDCO and approved by the Commission in this order
for the second control period are tabulated below.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 239
June 2013
ETPS
Table 215: Capacity charges approved for ETPS (Rs. Cr)
Parameter Petition Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Depreciation 37.80 37.85 37.90 37.54 39.56 39.90
Interest on Loan Capital 11.07 23.48 19.68 105.10 104.47 100.91
Return on Equity 32.97 33.03 33.08 0.00 0.00 0.00
Operation and maintenance exp 130.47 141.81 158.53 122.51 131.40 141.43
Interest on Working Capital 30.65 31.11 31.79 21.37 21.79 22.10
Other Debit 12.60 13.10 13.63 0.20 0.20 0.20
Net Prior Period Expenses 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 28.52 29.66 30.85 28.52 29.66 30.85
Net Fixed Costs 227.05 250.72 263.76 258.20 267.76 273.69
MTPS
Table 216: Capacity charges approved for MTPS (Rs. Cr)
Parameter Petition Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Depreciation 39.66 40.28 41.03 37.37 40.57 43.85
Interest on Loan Capital 43.23 51.60 43.95 74.97 82.23 89.85
Return on Equity 39.44 40.32 41.33 0.00 0.00 0.00
Operation and maintenance exp 125.70 137.89 156.74 131.37 141.97 154.04
Interest on Working Capital 101.73 107.83 113.31 99.70 100.45 101.53
Other Debit 1.70 1.77 1.84 0.20 0.20 0.20
Net Prior Period Expenses 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 43.33 45.06 46.86 43.33 45.06 46.86
Net Fixed Costs 308.13 334.62 351.33 300.28 320.36 342.60
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 240
June 2013
TTPS
Table 217: Capacity charges approved for TTPS (Rs. Cr)
Parameter Petition Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Depreciation 64.98 66.99 69.42 66.36 69.69 73.33
Interest on Loan Capital 101.92 118.30 86.95 132.25 136.21 140.90
Return on Equity 59.55 62.27 65.39 0.00 0.00 0.00
Operation and maintenance exp 223.52 240.61 265.28 156.29 168.50 182.36
Interest on Working Capital 129.57 137.53 145.74 120.66 121.39 122.52
Other Debit 7.69 8.00 8.32 0.30 0.30 0.30
Net Prior Period Expenses 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 45.03 46.83 48.71 45.03 46.83 48.71
Net Fixed Costs 542.20 586.87 592.40 430.84 449.25 470.69
NCTPS
Table 218: Capacity charges approved for NCTPS (Rs. Cr)
Parameter Petition Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Depreciation 64.86 66.15 67.70 63.27 64.79 66.58
Interest on Loan Capital 190.99 189.23 142.72 110.09 108.82 108.19
Return on Equity 65.76 67.69 69.90 0.00 0.00 0.00
Operation and maintenance exp 138.51 149.95 166.75 136.15 145.23 155.40
Interest on Working Capital 76.09 80.92 83.76 70.61 71.01 71.64
Other Debit 26.13 27.17 28.26 0.40 0.40 0.40
Net Prior Period Expenses 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 21.22 22.07 22.95 21.22 22.07 22.95
Net Fixed Costs 541.13 559.05 536.14 359.31 368.19 379.25
NCTPS – Stage II
Table 219: Capacity charges approved for NCTPS – Stage II (Rs. Cr)
Parameter Petition Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Depreciation 0.00 186.92 187.69 124.61 186.92 187.69
Interest on Loan Capital 468.52 362.32 277.24 340.87 671.27 651.33
Return on Equity 122.09 244.69 245.73 0.00 0.00 0.00
Operation and maintenance exp 168.00 176.40 185.22 43.61 60.47 62.88
Interest on Working Capital 136.39 171.96 186.24 93.13 112.82 112.56
Other Debit 0.00 0.00 0.00 0.00 0.00 0.00
Net Prior Period Expenses 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 0.00 0.00 0.00 0.00 0.00 0.00
Net Fixed Costs 895.01 1142.29 1082.12 602.21 1031.47 1014.46
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 241
June 2013
Mettur – Stage III
Table 220: Capacity charges approved for Mettur-Stage III (Rs. Cr)
Parameter Petition Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Depreciation 126.61 127.04 127.49 86.37 127.04 127.49
Interest on Loan Capital 317.60 279.92 242.02 173.48 373.76 359.75
Return on Equity 149.37 149.88 150.42 0.00 0.00 0.00
Operation and maintenance exp 88.20 92.61 97.24 26.63 36.92 38.40
Interest on Working Capital 91.63 102.25 110.65 56.55 58.62 58.38
Other Debit 0.00 0.00 0.00 0.00 0.00 0.00
Net Prior Period Expenses 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 0.00 0.00 0.00 0.00 0.00 0.00
Net Fixed Costs 773.41 751.70 727.82 343.03 596.34 584.02
Ennore Expansion
Table 221: Capacity charges approved for Ennore Expansion (Rs. Cr)
Parameter Petition Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Depreciation 0.00
36.58
Interest on Loan Capital 215.37
67.02
Return on Equity 67.63 0.00
Operation and maintenance exp 23.10 10.03
Interest on Working Capital 26.58
10.53
Other Debit 0.00 0.00
Net Prior Period Expenses 0.00 0.00
Less: other income
0.00
0.00
Net Fixed Costs
332.67
124.16
BBGTPS
Table 222: Capacity charges approved for BBGTPS (Rs. Cr)
Parameter Petition Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Depreciation 19.81 20.04 20.17 19.81 19.87 19.91
Interest on Loan Capital 63.30 64.31 60.32 16.27 14.05 11.79
Return on Equity 17.14 17.34 17.43 0.00 0.00 0.00
Operation and maintenance exp 6.89 7.54 8.28 7.95 8.51 9.14
Interest on Working Capital 8.52 7.45 7.57 4.75 4.72 4.69
Other Debit 0.05 0.05 0.06 0.10 0.10 0.10
Net Prior Period Expenses 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 0.21 0.22 0.23 0.21 0.22 0.23
Net Fixed Costs 115.51 116.51 113.59 48.66 47.03 45.39
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 242
June 2013
KGTPS
Table 223: Capacity charges approved for KGTPS (Rs. Cr)
Parameter Petition Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Depreciation 12.86 13.22 13.49 17.63 17.71 17.86
Interest on Loan Capital 49.69 48.47 44.53 55.73 53.99 52.37
Return on Equity 11.72 12.09 12.42 0.00 0.00 0.00
Operation and maintence exp 8.36 9.00 9.94 8.11 8.59 9.12
Interest on Working Capital 7.54 7.80 7.85 7.45 7.43 7.44
Other Debit 0.14 0.15 0.15 0.06 0.06 0.06
Net Prior Period Expenses 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 0.01 0.01 0.01 0.01 0.01 0.01
Net Fixed Costs 90.29 90.72 88.37 88.96 87.77 86.83
TGTPS
Table 224: Capacity charges approved for TGTPS (Rs. Cr)
Parameter Petition Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Depreciation 15.90 16.99 17.39 16.14 16.34 16.55
Interest on Loan Capital 66.21 63.87 58.30 45.60 44.36 43.17
Return on Equity 14.74 15.63 16.07 0.00 0.00 0.00
Operation and maintenance exp 11.74 12.64 13.91 11.75 12.51 13.36
Interest on Working Capital 9.14 9.62 9.88 7.50 7.51 7.55
Other Debit 0.51 0.53 0.55 0.10 0.10 0.10
Net Prior Period Expenses 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 1.67 1.74 1.81 1.67 1.74 1.81
Net Fixed Costs 116.57 117.54 114.30 79.42 79.08 78.91
VGTPS
Table 225: Capacity charges approved for VGTPS (Rs. Cr)
Parameter Petition Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Depreciation 19.11 19.68 20.43 21.99 22.30 22.50
Interest on Loan Capital 87.51 81.81 73.43 109.76 107.98 106.02
Return on Equity 17.66 18.44 19.38 0.00 0.00 0.00
Operation and maintenance exp 9.69 10.61 12.01 12.60 13.50 14.51
Interest on Working Capital 19.88 20.05 21.01 12.51 12.52 12.55
Other Debit 0.00 0.00 0.00 0.20 0.20 0.20
Net Prior Period Expenses 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 0.05 0.05 0.05 0.05 0.05 0.05
Net Fixed Costs 153.80 150.55 146.20 157.02 156.45 155.72
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 243
June 2013
Erode Hydro generation Circle (including Bhavani Barrage and Bhavani Kattalai)
Table 226: Capacity charges approved for Erode Hydro Generation Circle (Rs. Cr)
Parameter Petition Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Depreciation 35.90 35.92 35.96 21.45 58.62 61.73
Interest on Loan Capital 162.59 158.36 144.76 152.03 220.59 218.29
Return on Equity 44.60 44.65 44.70 0.00 0.00 0.00
Operation and maintenance exp 32.52 35.58 40.51 38.25 41.76 45.80
Interest on Working Capital 9.33 9.33 9.18 6.78 11.40 11.72
Other Debit 0.10 0.11 0.11 0.12 0.12 0.12
Net Prior Period Expenses 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 0.28 0.29 0.30 0.28 0.29 0.30
Net Fixed Costs 284.77 283.66 274.92 218.36 332.20 337.37
Kundah Hydro generation Circle
Table 227: Capacity charges approved for Kundah Hydro Generation Circle (Rs. Cr)
Parameter Petition Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Depreciation 25.39 25.49 26.10 25.19 25.23 25.25
Interest on Loan Capital 68.50 81.99 84.00 123.90 121.01 118.10
Return on Equity 29.97 30.53 31.54 0.00 0.00 0.00
Operation and maintenance exp 43.36 47.35 53.39 46.86 50.35 54.28
Interest on Working Capital 6.32 6.83 7.19 6.81 6.87 6.94
Other Debit 0.17 0.17 0.18 0.20 0.20 0.20
Net Prior Period Expenses 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 1.17 1.22 1.26 1.17 1.22 1.26
Net Fixed Costs 172.53 191.16 201.13 201.80 202.44 203.51
Tirunelveli Hydro generation Circle
Table 228: Capacity charges approved for Tirunelveli Hydro generation circle (Rs. Cr)
Parameter Petition Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Depreciation 14.36 14.99 16.44 12.19 12.53 13.07
Interest on Loan Capital 86.85 80.03 71.87 59.42 68.86 70.12
Return on Equity 15.55 17.06 19.27 0.00 0.00 0.00
Operation and maintenance exp 30.27 33.44 38.26 30.28 32.78 35.64
Interest on Working Capital 5.00 4.97 5.13 3.41 3.76 3.93
Other Debit 3.07 3.19 3.32 0.10 0.10 0.10
Net Prior Period Expenses 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 4.10 4.27 4.44 4.10 4.27 4.44
Net Fixed Costs 150.99 149.43 149.86 101.31 113.76 118.42
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 244
June 2013
Kadamparai Hydro generation Circle
Table 229: Capacity charges approved for Kadamparai Hydro Generation Circle (Rs. Cr)
Parameter Petition Commission
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
Depreciation 10.53 12.26 14.31 10.58 10.60 10.63
Interest on Loan Capital 29.86 35.75 38.14 34.59 33.43 32.29
Return on Equity 12.53 15.27 18.39 0.00 0.00 0.00
Operation and maintenance exp 26.42 28.81 32.39 28.04 30.16 32.55
Interest on Working Capital 3.01 3.46 3.91 2.69 2.74 2.80
Other Debit 0.00 0.00 0.00 0.10 0.10 0.10
Net Prior Period Expenses 0.00 0.00 0.00 0.00 0.00 0.00
Less: other income 0.33 0.34 0.35 0.33 0.34 0.35
Net Fixed Costs 82.02 95.21 106.79 75.68 76.68 78.02
4.163 The recovery of capacity charges are governed by Regulation-42 of TNERC Tariff Regulations, 2005 which states as under:
“42. Recovery of Capacity Charges
3. Full capacity charges (Fixed Charges) shall be recoverable at target availability
specified in clause (1) of Regulation 37.
4. 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.…”
4.164 The above capacity charges as determined by the Commission are to be recovered
when TANGEDCO is able to meet the target in terms of norms set by the
Commission. The norms specified for recovery of fixed charges as per TNERC
regulation are stipulated below:
“37. Norms of Operation
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 50% (Till Renovation
and Modernization works in all units are completed)
.........”
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 245
June 2013
4.165 In this order Commission has approved higher PLFs based on historical performance
for few own generating stations for estimating energy availability. However, in line
with Commission’s regulations the recovery of capacity charges will be guided by the
norms mentioned above.
Variable cost for own generating stations
4.166 The Commission has worked out the variable cost for various generating stations on
the basis of data approved fuel parameters for FY 2012-13 and considering the norms
specified in the regulation.
4.167 The variable cost as determined by the Commission in respect of various generating
stations of TANGEDCO is detailed as under:
Thermal Stations
4.168 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:
Price of primary and secondary fuel
4.169 TANGEDCO in its Petition has estimated the fuel cost for the control period by
considering an escalation of 5% over its FY 2012-13 TANGEDCO has submitted that
it has considered 5% escalation for fuel costs in order to take care of fuel cost
adjustments for the purpose of estimating power cost.
4.170 It is pertinent to mention that with regards the escalation fuel costs , the Commission
has already approved Fuel Price Cost Adjustment (FPCA) Formulae in Page number
294 of its last tariff order dated March 30, 2012 which is reproduced below:
“…
9.4.6 The Commission is of the opinion that the Fuel Price Adjustment charge
formula would enable the TANGEDCO to recover the actual cost of the fuel
incurred and the actual cost of the power purchase, if the same is at variance
from the figures approved by the Commission in this Tariff Order.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 246
June 2013
Section 62 (4) of the Electricity Act 2003 also mandates that the Commission
to provide for mechanism to pass through of variation of Fuel and Power
Purchase cost by specifying the Fuel surcharge formula
9.4.6.6. In most of the comparable States like Maharashtra, Gujarat, Andhra
Pradesh, Kerala, etc, FPCA mechanism is in place.
9.4.6.7. The Commission in this Order is approving FPAC formulae to reflect
change in fuel cost for TANGEDCO’s own Thermal Stations and Power
Purchase from other sources which are due to reasons beyond the control of
TANGEDCO,...”
4.171 Hence, Commission is consciously not considering any escalation over the fuel price.
Commission has considered the fuel price for the second control period as that
approved for FY 2012-13 in this order. If there is variation of actual cost of fuel as
compared to what has been approved by the Commission, TANGEDCO can claim the
differential amount of power purchase cost through FPCA mechanism. The fuel cost
filed by TANGEDCO and approved by the Commission for second control period is
tabulated below.
4.172 For new generating stations, TANGEDCO has proposed a higher fuel cost compared
to existing thermal stations. In response to Commission’s query, TANGEDCO has
submitted that keeping in view fuel supply constraints it has considered a blending
ratio of 58:42 (Domestic:Imported). Commission is of the view that the boilers are
designed to operate efficiently at a particular GCV of coal and any abnormal variation
in this mix can make the plant operate inefficiently. In view of this Commission has
considered the fuel cost for the new generating stations equal to that approved for
existing stations and directs TANGEDCO to make appropriate arrangements for fuel
supply.
Table 230: Cost of primary fuel approved by the Commission for second control period
Name of the
Power Station Units
Petition Commission
FY 2013-
14
FY 2014-
15
FY 2015-
16
FY 2013-
14
FY 2014-
15
FY 2015-
16
Ennore TPS Rs./Tonne 2575 2704 2839 2841 2841 2841
Tuticorin TPS Rs./Tonne 4494 4719 4955 3659 3659 3659
Mettur TPS Rs./Tonne 3907 4102 4307 3916 3916 3916
North Chennai TPS Rs./Tonne 3359 3591 3594 3407 3407 3407
Tirumakottai GTPS Rs./SCM 10.88 11.42 12.00 9.32 9.32 9.32
Kuttalum GTPS Rs./SCM 10.29 10.81 11.35 9.32 9.32 9.32
Basin Bridge GTPS Rs./MT 51065 53618 56299 40625 40625 40625
Valathur - Unit 1 Rs./SCM 17.08 17.94 18.83 8.76 8.76 8.76
Valathur - Unit 2 Rs./SCM 17.08 17.94 18.83 8.78 8.78 8.78
NCTPS – Stage II Rs./Tonne 4312 4528 4754 3407 3407 3407
MTPS – Stage III Rs./Tonne 4864 5107 5363 3916 3916 3916
Ennore Expansion Rs./Tonne 2841
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 247
June 2013
Table 231: Cost of secondary fuel approved by the Commission for second control period
Name of the
Power Station Units
Petition Commission
FY 2013-
14
FY 2014-
15
FY 2015-
16
FY 2013-
14
FY 2014-
15
FY 2015-
16
Ennore TPS Rs./kL 50691 53226 55887 49112 49112 49112
Tuticorin TPS Rs./kL 47137 49494 51969 47916 47916 47916
Mettur TPS Rs./kL 42678 44812 47052 47417 47417 47417
North Chennai TPS Rs./kL 51690 54274 56988 47346 47346 47346
NCTPS – Stage II Rs./kL 51690 54274 56988 47346 47346 47346
MTPS – Stage III Rs./kL 42678 44812 47052 47417 47417 47417
Ennore Expansion Rs./kL
55887
49112
Gross calorific value
4.173 For the second control period, TANGEDCO in its Petition for thermal stations except
for ETPS and NCTPS has considered the gross calorific value of primary and
secondary fuel equal to its estimated gross calorific value of primary and secondary
fuels for FY 2012-13. TANGEDCO has not provided adequate reasons for its
consideration of varying calorific value for ETPS and NCTPS.
4.174 For new generating stations, TANGEDCO has considered GCV of fuels equivalent to that of existing generating stations. However, there was marked difference in price of
fuel claimed for new generating stations and existing generating stations. In response
to Commission’s query TANGEDCO has revised the GCV of the fuel for new
generating stations corresponding to the blending ratio of 58:42.
4.175 Commission has considered the gross calorific value of primary and secondary fuels
for the second control period as that approved for FY 2012-13. For new generating
stations, the Commission has considered the gross calorific value of fuels equivalent
to that of the existing thermal stations. The gross calorific value filed by TANGEDCO
and approved by the Commission for the second control period is given below.
Table 232: GCV of primary fuel approved by the Commission
Name of the Power
Station Units
Petition Commission
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Ennore TPS kCal/Kg 3150 3110 3080 3235 3235 3235
Tuticorin TPS kCal/Kg 4320 4320 4320 3405 3405 3405
Mettur TPS kCal/Kg 3562 3562 3562 3551 3551 3551
North Chennai TPS kCal/Kg 3588 3591 3594 3615 3615 3615
Tirumakottai GTPS kCal/SCM 10000 10000 10000 10000 10000 10000
Kuttalum GTPS kCal/SCM 10000 10000 10000 10000 10000 10000
Basin Bridge GTPS kCal/Kg 10572 10572 10572 10572 10572 10572
Valathur - Unit 1 kCal/SCM 10000 10000 10000 10000 10000 10000
Valathur - Unit 2 kCal/SCM 10000 10000 10000 10000 10000 10000
NCTPS - Stage II kCal/Kg 3588 3588 3588 3615 3615 3615
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 248
June 2013
Name of the Power
Station Units
Petition Commission
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Mettur Stage III kCal/Kg 3562 3562 3562 3551 3551 3551
Ennore Expansion kCal/Kg 3080 3235
Table 233: GCV of secondary fuel approved by the Commission
Name of the Power Station Units Revised Submission Commission
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Ennore TPS kCal/Lt 10,470 10,480 10,470 10502 10502 10502
Tuticorin TPS kCal/Lt 10,645 10,645 10,645 10639 10639 10639
Mettur TPS kCal/Lt 10,104 10,104 10,104 10466 10466 10466
North Chennai TPS kCal/Lt 10,355 10,357 10,368 10343 10343 10343
NCTPS - Stage II kCal/Lt 10,355 10,357 10,368 10343 10343 10343
Mettur Stage III kCal/Lt 10,104 10,104 10,104 10466 10466 10466
Ennore Expansion kCal/Lt - - 10,470
10502
Station heat rate
4.176 TANGEDCO in its Petition has submitted that SHR proposed by it for the own
generating stations after considering factors such as condition of plan, age of the
plant, coal quality etc. Commission reiterates its view that reasons specified by
TANGEDCO are not appropriate and Commission is guided by clause 37 (3) of
TNERC tariff regulations for approving SHR.
“37. Norms for operation
-------
(iii) Gross Station Heat Rate
(a) .Norms for the existing Coal-based Thermal Power Generating Stations Station Heat Rate
1. ETPS 3200 kcal/kwh
2. TTPS 2453 kCal/kWh .
3. MTPS 2500 kCal/kWh
4. NCTPS 2393 kCal/kWh
(b) Norms for the new Thermal Power Generating Stations
200/210/250 MW sets 500 MW and above sets
During Stabilization period 2600 KCal/kWh 2550 Kcal/kWh
Subsequent period 2500 KCal/kWh 2450 Kcal/kWh
Note-1 : In respect of 500 MW and above units where the boiler feed pumps are
electrically operated, the heat rate of 40 kCal/kWh shall be reduced from the
Generating Station heat rate indicated above.
Note-2 : For Generating Stations having combination of 200/210/250 MW sets and 500 MW
and above sets, the normative gross Generating Station heat rate shall be the weighted
average Generating Station heat rate of various sets.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 249
June 2013
……..
(d) Gas-Turbine / combined cycle Generating Stations
Advanced class machine E/EA/EC/E2 class machine
Open Cycle 2685 Kcal / kWh 2830 Kcal / kWh
Combined cycle 1850 Kcal/ kWh 1950 Kcal / kWh”
4.177 Commission in accordance to its regulations has considered the station heat rate for
thermal stations except of BBGTPS. The generation from BBGTPS station is very
limited. 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. Hence, Commission approves a relaxed SHR during the second
control period for BBGTPS as that approved for FY 2012-13.
4.178 For new generating stations considering stabilization period in accordance to its regulation, Commission has approved a relaxed SHR during the year of
commissioning. The SHR for thermal stations filed by the Petitioner and approved by
the Commission is given below.
Table 234: Station heat rate (kCal/kWh) approved by the Commission
Name of the Power Station
Petition Commission
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Ennore TPS 3906 3858 3822 3200 3200 3200
Tuticorin TPS 2705 2705 2705 2453 2453 2453
Mettur TPS 2500 2500 2500 2500 2500 2500
North Chennai TPS 2485 2487 2489 2393 2393 2393
Tirumakottai GTPS 1850 1850 1850 1850 1850 1850
Kuttalum GTPS 1850 1850 1850 1850 1850 1850
Basin Bridge GTPS 3219 3219 3219 3219 3219 3219
Valathur - Unit 1 1850 1850 1850 1850 1850 1850
Valathur - Unit 2 1850 1850 1850 1850 1850 1850
NCTPS - Stage II 2450 2450 2450 2500 2450 2450
Mettur Stage III 2450 2450 2450 2500 2450 2450
Ennore Expansion 2450 2550
Auxiliary consumption and Secondary fuel oil consumption
4.179 In chapter 4, Commission has approved auxiliary consumption for arriving at the
energy availability. Commission has considered the same auxiliary consumption for
estimating the energy charges. The auxiliary consumption filed and approved by the
Commission is tabulated below.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 250
June 2013
Table 235: Auxiliary consumption approved by the Commission for estimating energy charges
Name of the Power Station Petition Commission
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Ennore TPS 15.00% 15.00% 15.00% 15.00% 15.00% 15.00%
Tuticorin TPS 8.50% 8.50% 8.50% 8.50% 8.50% 8.50%
Mettur TPS 8.55% 8.55% 8.55% 8.50% 8.50% 8.50%
North Chennai TPS 8.50% 8.50% 8.50% 8.50% 8.50% 8.50%
Tirumakottai GTPS 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%
Kuttalum GTPS 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%
Basin Bridge GTPS 0.99% 0.99% 1.00% 0.99% 0.99% 0.99%
Valathur - Unit 1 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%
Valathur - Unit 2 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%
NCTPS - Stage II (Unit 1) 8.50% 8.50% 8.50% 8.88% 8.50% 8.50%
NCTPS - Stage II (Unit 2) 8.50% 8.50% 8.50% 8.83% 8.50% 8.50%
Mettur Stage III 8.50% 8.50% 8.50% 8.83% 8.50% 8.50%
Ennore Expansion
8.50%
9.00%
4.180 The norms for secondary fuel oil consumption for thermal stations as per TNERC
tariff regulations, 2005 is given below:
“37. Norms of operation
(iv) Secondary fuel oil consumption
(a) Coal-based Generating Stations:
During stabilization period : 4.5 ml/kWh
Subsequent period (except ETPS) : 2.0 ml/kWh
ETPS : 12.ml/kWh
(b) Lignite fired Generating Stations:
During stabilization period : 5.0 ml/kWh
Subsequent period (except ETPS) : 3.0 ml/kWh”
4.181 Commission has considered the SFO in accordance with its regulations for its thermal
stations. For new generating stations in accordance with Tariff Regulations
considering the stabilization period Commission has approved the SFO consumption.
The SFO consumption for coal based stations filed by TANGEDCO and approved by
the Commission for the second control period is tabulated below.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 251
June 2013
Table 236: SFO approved for coal based stations by the Commission during the second control period
(ml/kWh)
Name of the Power Station Petition Commission
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Ennore TPS 12.00 12.00 12.00 12.00 12.00 12.00
Tuticorin TPS 3.00 3.00 3.00 2.00 2.00 2.00
Mettur TPS 1.29 1.29 1.29 2.00 2.00 2.00
North Chennai TPS 0.94 0.94 0.94 2.00 2.00 2.00
NCTPS - Stage II 2.00 2.00 2.00 3.25 2.00 2.00
Mettur Stage III 2.00 2.00 2.00 3.25 2.00 2.00
Ennore Expansion
2.00
4.50
Variable Cost for Thermal Stations
4.182 On the basis of above submissions, the Commission has calculated the variable cost
for thermal power stations of TANGEDCO which is tabulated as under. Commission
has estimated the variable cost – ex bus considering the entire fuel cost including oil.
ETPS
Table 237: Variable Cost approved by the Commission for ETPS
Description Unit 2013-14 2014-15 2015-16
Capacity MW 450 450 450
Gross Station Heat Rate Kcal/kWh 3200 3200 3200
Secondary fuel oil
consumption ml/kWh 12.00 12.00 12.00
Average calorific value of oil Kcal/l 10502 10502 10502
Average calorific value of
Coal Kcal/Kg 3235 3235 3235
Weighted average price of oil Rs./Kl 49112 49112 49112
Average landed cost of coal Rs./MT 2841 2841 2841
Rate energy charges from Oil Paisa/kWh 58.93 58.93 58.93
Heat contributed from Oil Kcal/kWh 126.02 126.02 126.02
Heat contributed from Coal Kcal/kWh 3073.98 3073.98 3073.98
Specific consumption of coal Kg/kWh 0.95 0.95 0.95
Rate of energy from Coal Paisa/kWh 269.96 269.96 269.96
Variable Cost - Gross Paisa/kWh 328.89 328.89 328.89
Auxiliary Consumption % 15.00% 15.00% 15.00%
Variable Cost - Ex bus Paisa/kWh 386.93 386.93 386.93
Petition Paisa/kWh 435.13 456.87 479.73
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 252
June 2013
TTPS
Table 238: Variable Cost approved by the Commission for TTPS
Description Unit 2013-14 2014-15 2015-16
Capacity MW 1050 1050 1050
Gross Station Heat Rate Kcal/kWh 2453 2453 2453
Secondary fuel oil
consumption ml/kWh 2.00 2.00 2.00
Average calorific value of oil Kcal/l 10639 10639 10639
Average calorific value of
Coal Kcal/Kg 3405 3405 3405
Weighted average price of oil Rs./Kl 47916 47916 47916
Average landed cost of coal Rs./MT 3659 3659 3659
Rate energy charges from Oil Paisa/kWh 9.58 9.58 9.58
Heat contributed from Oil Kcal/kWh 21.28 21.28 21.28
Heat contributed from Coal Kcal/kWh 2431.72 2431.72 2431.72
Specific consumption of coal Kg/kWh 0.71 0.71 0.71
Rate of energy from Coal Paisa/kWh 261.31 261.31 261.31
Variable Cost - Gross Paisa/kWh 270.90 270.90 270.90
Auxiliary Consumption % 8.50% 8.50% 8.50%
Variable Cost - Ex bus Paisa/kWh 296.06 296.06 296.06
Petition Paisa/kWh 319.37 335.34 352.11
MTPS
Table 239: Variable Cost approved by the Commission for MTPS
Description Unit 2013-14 2014-15 2015-16
Capacity MW 840 840 840
Gross Station Heat Rate Kcal/kWh 2500 2500 2500
Secondary fuel oil
consumption ml/kWh 2.00 2.00 2.00
Average calorific value of oil Kcal/l 10466 10466 10466
Average calorific value of
Coal Kcal/Kg 3551 3551 3551
Weighted average price of oil Rs./Kl 47417 47417 47417
Average landed cost of coal Rs./MT 3916 3916 3916
Rate energy charges from Oil Paisa/kWh 9.48 9.48 9.48
Heat contributed from Oil Kcal/kWh 20.93 20.93 20.93
Heat contributed from Coal Kcal/kWh 2479.07 2479.07 2479.07
Specific consumption of coal Kg/kWh 0.70 0.70 0.70
Rate of energy from Coal Paisa/kWh 273.39 273.39 273.39
Variable Cost - Gross Paisa/kWh 282.87 282.87 282.87
Auxiliary Consumption % 8.50% 8.50% 8.50%
Variable Cost - Ex bus Paisa/kWh 309.15 309.15 309.15
Petition Paisa/kWh 304.32 325.84 342.13
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 253
June 2013
NCTPS
Table 240: Variable Cost approved by the Commission for NCTPS
Description Unit 2013-14 2014-15 2015-16
Capacity MW 630 630 630
Gross Station Heat Rate Kcal/kWh 2393 2393 2393
Secondary fuel oil
consumption ml/kWh 2.00 2.00 2.00
Average calorific value of oil Kcal/l 10343 10343 10343
Average calorific value of
Coal Kcal/Kg 3615 3615 3615
Weighted average price of oil Rs./Kl 47346 47346 47346
Average landed cost of coal Rs./MT 3407 3407 3407
Rate energy charges from Oil Paisa/kWh 9.47 9.47 9.47
Heat contributed from Oil Kcal/kWh 20.69 20.69 20.69
Heat contributed from Coal Kcal/kWh 2372.31 2372.31 2372.31
Specific consumption of coal Kg/kWh 0.66 0.66 0.66
Rate of energy from Coal Paisa/kWh 223.58 223.58 223.58
Variable Cost - Gross Paisa/kWh 233.05 233.05 233.05
Auxiliary Consumption % 8.50% 8.50% 8.50%
Variable Cost - Ex bus Paisa/kWh 254.70 254.70 254.70
Petition Paisa/kWh 258.58 271.51 285.07
NCTPS Stage-II (Unit 1)
Table 241: Variable Cost approved by the Commission for NCTPS stage II (Unit 1)
Description Unit 2013-14 2014-15 2015-16
Capacity MW 600 600 600
Gross Station Heat Rate Kcal/kWh 2500 2450 2450
Secondary fuel oil
consumption ml/kWh 3.25 2.00 2.00
Average calorific value of oil Kcal/l 10343 10343 10343
Average calorific value of
Coal Kcal/Kg 3615 3615 3615
Weighted average price of oil Rs./Kl 47346 47346 47346
Average landed cost of coal Rs./MT 3407 3407 3407
Rate energy charges from Oil Paisa/kWh 15.39 9.47 9.47
Heat contributed from Oil Kcal/kWh 33.61 20.69 20.69
Heat contributed from Coal Kcal/kWh 2466.39 2429.31 2429.31
Specific consumption of coal Kg/kWh 0.68 0.67 0.67
Rate of energy from Coal Paisa/kWh 232.45 228.95 228.95
Variable Cost - Gross Paisa/kWh 247.83 238.42 238.42
Auxiliary Consumption % 8.88% 8.50% 8.50%
Variable Cost - Ex bus Paisa/kWh 271.97 260.57 260.57
Petition Paisa/kWh 330.38 346.90 364.24
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 254
June 2013
NCTPS Stage-II (Unit 2)
Table 242: Variable Cost approved by the Commission for NCTPS stage II (Unit 2)
Description Unit 2013-14 2014-15 2015-16
Capacity MW 600 600 600
Gross Station Heat Rate Kcal/kWh 2500 2450 2450
Secondary fuel oil
consumption ml/kWh 3.25 2.00 2.00
Average calorific value of oil Kcal/l 10343 10343 10343
Average calorific value of
Coal Kcal/Kg 3615 3615 3615
Weighted average price of oil Rs./Kl 47346 47346 47346
Average landed cost of coal Rs./MT 3407 3407 3407
Rate energy charges from Oil Paisa/kWh 15.39 9.47 9.47
Heat contributed from Oil Kcal/kWh 33.61 20.69 20.69
Heat contributed from Coal Kcal/kWh 2466.39 2429.31 2429.31
Specific consumption of coal Kg/kWh 0.68 0.67 0.67
Rate of energy from Coal Paisa/kWh 232.45 228.95 228.95
Variable Cost - Gross Paisa/kWh 247.83 238.42 238.42
Auxiliary Consumption % 8.83% 8.50% 8.50%
Variable Cost - Ex bus Paisa/kWh 271.85 260.57 260.57
Petition Paisa/kWh 330.38 346.90 364.24
Mettur stage III
Table 243: Variable Cost approved by the Commission for Mettur Stage III
Description Unit 2013-14 2014-15 2015-16
Capacity MW 600 600 600
Gross Station Heat Rate Kcal/kWh 2500 2450 2450
Secondary fuel oil
consumption ml/kWh 3.25 2.00 2.00
Average calorific value of oil Kcal/l 10466 10466 10466
Average calorific value of
Coal Kcal/Kg 3551 3551 3551
Weighted average price of oil Rs./Kl 47417 47417 47417
Average landed cost of coal Rs./MT 3916 3916 3916
Rate energy charges from Oil Paisa/kWh 15.41 9.48 9.48
Heat contributed from Oil Kcal/kWh 34.01 20.93 20.93
Heat contributed from Coal Kcal/kWh 2465.99 2429.07 2429.07
Specific consumption of coal Kg/kWh 0.69 0.68 0.68
Rate of energy from Coal Paisa/kWh 271.95 267.87 267.87
Variable Cost - Gross Paisa/kWh 287.36 277.36 277.36
Auxiliary Consumption % 8.83% 8.50% 8.50%
Variable Cost - Ex bus Paisa/kWh 315.20 303.12 303.12
Petition Paisa/kWh 373.99 392.69 412.32
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 255
June 2013
Ennore Expansion
Table 244: Variable Cost approved by the Commission for Mettur Stage III
Description Unit 2013-14 2014-15 2015-16
Capacity MW
660
Gross Station Heat Rate Kcal/kWh
2550
Secondary fuel oil
consumption ml/kWh
4.50
Average calorific value of oil Kcal/l
10502
Average calorific value of
Coal Kcal/Kg
3235
Weighted average price of oil Rs./Kl
49112
Average landed cost of coal Rs./MT
2841
Rate energy charges from Oil Paisa/kWh
22.10
Heat contributed from Oil Kcal/kWh
47.26
Heat contributed from Coal Kcal/kWh
2502.74
Specific consumption of coal Kg/kWh
0.77
Rate of energy from Coal Paisa/kWh
219.79
Variable Cost - Gross Paisa/kWh
241.89
Auxiliary Consumption %
9.00%
Variable Cost - Ex bus Paisa/kWh
265.82
Petition Paisa/kWh
256.91
TGTPS
Table 245: Variable Cost approved by the Commission for TGTPS
Description Unit 2013-14 2014-15 2015-16
Capacity MW 108 108 108
Gross Station Heat Rate Kcal/kWh 1850 1850 1850
Average calorific value of gas Kcal/SCM 10000 10000 10000
Average Cost of Gas Rs./ SCM 9.32 9.32 9.32
Rate of energy from Gas Ps/ kWh 172.42 172.42 172.42
Auxiliary Consumption % 6.00% 6.00% 6.00%
Rate of energy - Net Ex bus Ps/ kWh 183.43 183.43 183.43
Net Generation Mus 711.45 711.45 713.40
Total Cost excluding Transportation Rs. Crore 130.50 130.50 130.86
Transportation Cost Rs. Crore 1.96 2.06 2.16
Total Cost Rs. Crore 132.46 132.56 133.02
Variable Cost Ps/ kWh 186.18 186.32 186.45
Petition Ps/ kWh 217.06 227.80 239.18
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 256
June 2013
KGTPS
Table 246: Variable Cost approved by the Commission for KGTPS
Description Unit 2013-14 2014-15 2015-16
Capacity MW 101 101 101
Gross Station Heat Rate Kcal/kWh 1850 1850 1850
Average calorific value of gas Kcal/SCM 10000 10000 10000
Average Cost of Gas Rs./ SCM 9.32 9.32 9.32
Rate of energy from Gas Ps/ kWh 172.42 172.42 172.42
Auxiliary Consumption % 6.00% 6.00% 6.00%
Rate of energy - Net Ex bus Ps/ kWh 183.43 183.43 183.43
Net Generation Mus 665.34 665.34 667.16
Total Cost excluding Transportation Rs. Crore 122.04 122.04 122.37
Transportation Cost Rs. Crore 1.96 2.06 2.16
Total Cost Rs. Crore 124.00 124.10 124.53
Variable Cost Ps/ kWh 186.37 186.52 186.66
Petition Ps/ kWh 205.76 216.05 226.98
BBGTPS
Table 247: Variable Cost approved by the Commission for BBGTPS
Description Unit 2013-14 2014-15 2015-16
Capacity MW 120 120 120
Gross Station Heat Rate Kcal/kWh 3219 3219 3219
Average calorific value of Naptha Kcal/Kg 10572 10572 10572
Average Cost of Naptha Rs./ MT 40625.00 40625.00 40625.00
Rate of energy from Naptha Ps/ kWh 1236.96 1236.96 1236.96
Auxiliary Consumption % 0.99% 0.99% 0.99%
Rate of energy - Net Ex bus Ps/ kWh 1249.33 1249.33 1249.33
Net Generation Mus 59.43 59.43 59.43
Total Cost excluding Transportation Rs. Crore 74.25 74.25 74.25
Transportation Cost Rs. Crore 0.00 0.00 0.00
Total Cost Rs. Crore 74.25 74.25 74.25
Variable Cost Ps/ kWh 1249.33 1249.33 1249.33
Petition Ps/ kWh 1570.50 1649.03 1731.65
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 257
June 2013
VGTPS – Unit 1
Table 248: Variable Cost approved by the Commission for VGTPS – unit 1
Description Unit 2013-14 2014-15 2015-16
Capacity MW 95 95 95
Gross Station Heat Rate Kcal/kWh 1850 1850 1850
Average calorific value of gas Kcal/SCM 10000 10000 10000
Average Cost of Gas Rs./ SCM 8.76 8.76 8.76
Rate of energy from Gas Ps/ kWh 162.06 162.06 162.06
Auxiliary Consumption % 6.00% 6.00% 6.00%
Rate of energy - Net Ex bus Ps/ kWh 172.40 172.40 172.40
Net Generation Mus 625.81 625.81 627.53
Total Cost excluding Transportation Rs. Crore 107.89 107.89 108.19
Transportation Cost Rs. Crore 3.65 3.83 4.02
Total Cost Rs. Crore 111.54 111.72 112.21
Variable Cost Ps/ kWh 178.24 178.52 178.81
Petition Ps/ kWh 342.15 359.26 377.45
VGTPS – Unit 2
Table 249: Variable Cost approved by the Commission for VGTPS – unit 2
Description Unit 2013-14 2014-15 2015-16
Capacity MW 92 92 92
Gross Station Heat Rate Kcal/kWh 1850 1850 1850
Average calorific value of gas Kcal/SCM 10000 10000 10000
Average Cost of Gas Rs./ SCM 8.78 8.78 8.78
Rate of energy from Gas Ps/ kWh 162.43 162.43 162.43
Auxiliary Consumption % 6.00% 6.00% 6.00%
Rate of energy - Net Ex bus Ps/ kWh 172.80 172.80 172.80
Net Generation Mus 606.05 606.05 607.71
Total Cost excluding Transportation Rs. Crore 104.72 104.72 105.01
Transportation Cost Rs. Crore 3.65 3.83 4.02
Total Cost Rs. Crore 108.37 108.55 109.03
Variable Cost Ps/ kWh 178.82 179.12 179.41
Petition Ps/ kWh 336.21 353.02 370.67
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 258
June 2013
Hydro Generating Stations
4.183 Clause 53 of TNERC Tariff Regulations, 2005 stipulates guidelines for recovery of primary energy charges.
“53. Computation of Annual Energy Charges
(1) The two part tariff for sale of electricity from a hydro power generating
station shall comprise a recovery of annual capacity (fixed) charges and
primary energy charges.
-------
-------
(3) Primary Energy Charges shall be the operating expenses like cost of water,
lubricants, consumables and station supplies.”
4.184 TANGEDCO in accordance to the regulation has claimed primary energy charges for
hydro generating stations on account of water charges, lubricants etc. However,
primary energy charges claimed by TANGEDCO in its Petition for Tirunelveli hydro
generation circle have increased significantly compared to Commissions approval in
last tariff order. TANGEDCO has not provided adequate reasons for increase in
primary energy charges for Tirunelveli hydro generation circle in its Petition. In view
of the above submissions, Commission has considered the primary energy charges as
approved for FY 13 during the second control period for all the hydro stations
including Tirunelveli Hydro Generation circle.
Table 250: Primary energy charges approved by the Commission for Hydro Generation Circles (Rs. Cr)
Generation
Circles
FY 2013-14 FY 2014-15 FY 2015-16
Petition Commission Petition Commission Petition Commission
Erode 0.11 0.04 0.11 0.04 0.12 0.04
Kundah 0.01 0.23 0.01 0.23 0.01 0.23
Kadamparai 0.00 0.00 0.00 0.00 0.00 0.00
Tirunelveli 3.12 0.26 3.28 0.26 3.44 0.26
Wind Generating Stations
4.185 The Commission in tariff order date 31st July 2010 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 31st July 2010 order.
4.186 In its Petition TANGEDCO has considered the transfer price of Rs. 2.75 per unit as cost of generation from its wind mills in accordance to Commission’s order. Hence
Commission is accepting the TANGEDCO submission and is approving the cost of
wind generation from its own wind mills at Rs. 2.75 per unit during the second
control period.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 259
June 2013
Power Purchase from other sources
4.187 In its Petition TANGEDCO has estimated the energy availability considering the
actual procurement during the first half of FY 2012-13 and using merit order dispatch
principle.
4.188 Apart from own generating stations, TANGEDCO procures power from CGS, IPPs,
renewable energy sources, captive power plants and traders
4.189 This section details out the approach adopted by the Commission in approving the
power purchase expenses for second control period.
Central generating stations
4.190 TANGEDCO in its Petition has projected the power purchase expenses considering a 5% escalation in fixed costs and 4% escalation in per unit variable cost. For the new
generating stations, TANGEDCO has assumed a single part tariff of Rs. 3.50 per unit
during the year of commissioning and escalated it by 4% for arriving at the per unit
variable costs for other years of the control period.
4.191 CERC has issued provisional orders and final orders for approving the capacity charges with respect to central generating stations for the period FY 2009-10 to FY
2013-14. The relevant details from the latest Order from FY 2009-10 to FY 2013-14
available on the website of CERC are tabulated below:
Table 251: Capacity charges approved by CERC for CGS (FY 2013-14)
Particulars
Capacity
(MW) Order
FY 2013-14
(Rs. Crore) TN Share*
Capacity charges
(Rs. Crore)
NLC TS-I 600 T.O. dated 9.04.2012 292.09 100.00% 292.09
NLC-II (Stage-I) 630 T.O. dated 27.06.2011 231.24 32.36% 74.83
NLC-II (Stage-II) 840 T.O. dated 27.06.2011 314.82 32.36% 101.88
NLC TS-I
Expansion 420 T.O. dated 31.08.2010 360.87 53.84% 194.28
NTPC (SR)-
Ramagundam (I &
II) 2100 T.O. dated 31.8.2012 870.19 26.09% 227.03
NTPC-SR Stage-
III 500 T.O. dated 7.5.2012 336.39 27.40% 92.17
NTPC Talcher
Stage-II 2000
Provisional T.O. dated
6.07.2011 1102.37 25.22% 278.00
NTPC - Simhadri 1000 T.O. dated 26.09.2012 1188.24 22.84% 271.40
*TN share including unallocated power based on March 2013 SRPC report
4.192 Commission has considered the capacity charges for all the years of the second
control period equivalent to those estimated for FY 2013-14 after taking into account
TN share and approved capacity charges for CGS by CERC for FY 2013-14.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 260
June 2013
4.193 As regards variable charges, the Commission has considered the per unit variable
charges for all years of the control period to be equivalent to that approved for FY
2012-13 in this order. Commission has not considered any escalation in the energy
charges and directs TANGEDCO to file a FPCA Petition for any variation in actual
energy charges compared to energy charges approved in this order.
4.194 For new coal based CGS, TANGEDCO has considered a single part tariff of Rs. 3.50 per unit. However, Commission is of the view that it is not appropriate to consider
single part tariff as TANGEDCO will be required to pay fixed charges in cases where
the energy is not getting scheduled under MoD. Hence, Commission has provisionally
considered a fixed cost of Rs. 1.50 per unit and variable cost of Rs. 2.00 per unit for
all coal based new CGS. For new nuclear CGS, Commission has considered the single
part tariff equivalent to that of KAIGA. The power purchase expenses approved by
the Commission in its order with respect to CGS have been tabulated below.
Table 252: Power purchase from CGS approved by the Commission in FY 2013-14
Source
Petition Commission
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Cost
(Rs.
Crore)
NTPC SR
(I&II) 4164 240 1.72 715 955 3952 227 1.68 664 891
NTPC SR III 1074 97 2.02 217 314 988 92 2.00 198 290
NLC TS - I 2937 171 1.79 526 697 3469 292 2.24 777 1069
NLC TS - II 3450 217 2.10 724 941 3188 177 1.98 631 808
NLC TS
Expansion I 1749 234 1.96 343 578 1470 194 1.80 265 459
NTPC Talcher 3567 313 2.21 789 1102 3361 278 1.41 474 752
NTPC
Simhadri 638 81 2.37 151 232 1556 271 1.99 310 581
MAPS 1986 0 2.15 428 428 1568 0 2.04 320 320
KAIGA 1278 0 3.38 432 432 1176 0 3.02 355 355
NTPC ER 0 48 0.00 0 48 0 0 0 0 0
NTPC Dadri 599 17 2.84 170 187 0 0 0 0 0
NTPC Vallur 4676 0 3.64 1703 1703 4955 743 2.00 991 1734
Kudankulum 2426 0 3.64 883 883 1663 0 3.02 502 502
PFBR
Kalpakkam 0 0 0.00 0 0 0 0 3.02 0 0
NLC TS - II
Expansion 1449 0 3.64 527 527 89 13 2.00 18 31
NLC -
Tuticorin 257 0 3.50 90 90 518 78 2.00 104 181
Total 30250 1418 2.54 7697 9116 27954 2366 2.01 5607 7973
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 261
June 2013
Table 253: Power purchase from CGS approved by the Commission in FY 2014-15
Source
Petition Commission
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Cost
(Rs.
Crore)
NTPC SR
(I&II) 4164 252 1.79 744 995 3952 227 1.68 664 891
NTPC SR III 1074 102 2.10 226 328 988 92 2.00 198 290
NLC TS - I 2937 180 1.86 547 726 3469 292 2.24 777 1069
NLC TS - II 3450 228 2.18 753 981 3188 177 1.98 631 808
NLC TS
Expansion I 1749 246 2.04 357 603 1470 194 1.80 265 459
NTPC Talcher 3567 329 2.30 820 1149 3361 278 1.41 474 752
NTPC
Simhadri 678 85 2.46 167 252 1556 271 1.99 310 581
MAPS 1986 0 2.24 445 445 1568 0 2.04 320 320
KAIGA 1278 0 3.51 449 449 1176 0 3.02 355 355
NTPC ER 0 50 0.00 0 50 0 0 0 0 0
NTPC Dadri 638 17 2.95 188 206 0 0 0 0 0
NTPC Vallur 6704 0 3.75 2514 2514 7092 1064 2.00 1418 2482
Kudankulum 4316 0 3.81 1645 1645 4376 0 3.02 1321 1321
PFBR
Kalpakkam 0 0 0.00 0 0 494 0 3.02 149 149
NLC TS - II
Expansion 1546 0 3.79 585 585 1752 263 2.00 350 613
NLC -
Tuticorin 1219 0 3.64 444 444 2643 397 2.00 529 925
Total 35307 1489 2.80 9884 11373 37086 3255 2.09 7761 11016
Table 254: Power purchase from CGS approved by the Commission in FY 2015-16
Source
Petition Commission
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Cost
(Rs.
Crore)
NTPC SR
(I&II) 4164 264 1.86 774 1038 3963 227 1.68 666 893
NTPC SR III 1074 107 2.19 235 342 991 92 2.00 198 290
NLC TS - I 1469 189 1.94 284 473 3478 292 2.24 779 1071
NLC TS - II 3450 240 2.27 783 1023 3196 177 1.98 633 809
NLC TS
Expansion I 1749 258 2.12 371 630 1474 194 1.80 265 460
NTPC Talcher 3567 345 2.39 853 1198 3370 278 1.41 475 753
NTPC
Simhadri 678 90 2.56 174 263 1560 271 1.99 311 582
MAPS 1986 0 2.33 462 462 1573 0 2.04 321 321
KAIGA 1278 0 3.65 467 467 1179 0 3.02 356 356
NTPC ER 0 53 0.00 0 53 0 0 0 0 0
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 262
June 2013
Source
Petition Commission
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Cost
(Rs.
Crore)
NTPC Dadri 678 18 3.07 208 227 0 0 0 0 0
NTPC Vallur 7141 0 3.90 2785 2785 7112 1067 2.00 1422 2489
Kudankulum 5544 0 3.90 2162 2162 4388 0 3.02 1325 1325
PFBR
Kalpakkam 0 0 0.00 0 0 792 0 3.02 239 239
NLC TS - II
Expansion 1642 0 3.94 647 647 2220 333 2.00 444 777
NLC -
Tuticorin 1300 0 3.79 492 492 2651 398 2.00 530 928
Total 35721 1564 2.99 10698 12261 37948 3329 2.10 7965 11294
Independent Power Producers
4.195 TANGEDCO in its Petition has projected the power purchase expenses considering a 5% escalation in fixed costs and 4% escalation in per unit variable cost. Although the
liquid fuel IPPs do not fall under MoD. In response to Commission’s query on PPA’s
with respect to IPPs, TANGEDCO has replied that PPA’s with M/s GMR and M/s
SPC are expiring on 15th Feb 2014 and 29
th Feb 2016 respectively in this control
period.
4.196 Commission has considered the capacity charges for all the years of the second
control period equivalent to those estimated for FY 2012-13 after taking into actual
capacity charges paid by TANGEDCO. However with respect to IPPs whose PPA is
expiring in the control period, Commission has not allowed any capacity charges after
the expiry of PPA.
4.197 As regards variable charges, the Commission has considered the per unit variable
charges for all years of the control period to be equivalent to that approved for FY
2012-13 in this order. Commission has not considered any escalation in the energy
charges and directs TANGEDCO to file a FPCA Petition for any variation in actual
energy charges compared to energy charges approved in this order.
4.198 The capacity charges and variable energy charges approved for IPPs by the Commission for the second control period are tabulated below. However, the despatch
of energy from IPPs will be governed by MoD principle.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 263
June 2013
Table 255: Power purchase from IPPs approved by the Commission in FY 2013-14
Source
Petition Commission
Units
(MU
)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Charges
(Rs.
Crore)
Units
(MU
)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Charge
s (Rs.
Crore)
GMR * 0 175
0 175 945 147 10.41
147
Samalpatti* 0 128
0 128 472 109 10.18
109
PPN* 0 315
0 315 2103 292 8.55
292
Madurai* 0 137
0 137 455 110 10.96
110
ST-CMS 1819 347 2.41 439 786 1665 364 2.32 385 749
ABAN 375 117 1.91 72 189 783 117 2.00 157 274
Penna 759 62 1.93 147 209 353 58 2.04 72 130
Total 2953 1281 2.23 658 1938 6775 1197
614 1811
*Not getting despatched under MOD
Table 256: Power purchase from IPPs approved by the Commission in FY 2014-15
Source
Petition Commission
Units
(MU
)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Charges
(Rs.
Crore)
Units
(MU
)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Charge
s (Rs.
Crore)
GMR 0 183.54 0.00 0.00 183.54 0 0.00 0.00
0.00
Samalpatti* 0 134.12 0.00 0.00 134.12 472 108.96 10.18
108.96
PPN* 0 330.50 0.00 0.00 330.50 2103 292.41 8.55
292.41
Madurai* 0 143.89 0.00 0.00 143.89 455 110.39 10.96
110.39
ST-CMS 1844 364.21 2.51 462.86 827.07 1665 363.63 2.32 385.39 749.03
ABAN 375 123.29 1.99 74.62 197.90 783 117.49 2.00 156.54 274.03
Penna 810 65.16 2.01 162.94 228.10 353 57.88 2.04 72.15 130.03
Total 3029 1344.72 2.31 700.42 2045.14 5830 1050.76
614.08 1664.85
*Not getting despatched under MOD
Table 257: Power purchase from IPPs approved by the Commission in FY 2015-16
Source
Petition Commission
Units
(MU
)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Charges
(Rs.
Crore)
Units
(MU
)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Charge
s (Rs.
Crore)
GMR 0 192.72 0.00 0.00 192.72 0 0.00 0.00
0.00
Samalpatti* 0 140.83 0.00 0.00 140.83 433 99.88 10.18
99.88
PPN* 0 347.03 0.00 0.00 347.03 2103 292.41 8.55
292.41
Madurai* 0 151.09 0.00 0.00 151.09 455 110.39 10.96
110.39
ST-CMS 1869 382.42 2.61 487.90 870.32 1665 363.63 2.32 385.39 749.03
ABAN 375 129.45 2.07 77.60 207.05 783 117.49 2.00 156.54 274.03
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 264
June 2013
Source
Petition Commission
Units
(MU
)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Charges
(Rs.
Crore)
Units
(MU
)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charge
s (Rs.
Crore)
Total
Charge
s (Rs.
Crore)
Penna 810 68.42 2.09 169.46 237.88 353 57.88 2.04 72.15 130.03
Total 3054 1411.96 2.41 734.96 2146.92 5791 1041.68
614.08 1655.77
*Not getting despatched under MOD
Non conventional energy sources and Captive power plants
4.199 TANGEDCO in its Petition has projected the power purchase expenses from non
conventional energy sources and captive power plants considering a 5% escalation in
per unit energy charges.
4.200 Commission has adopted the following approach for estimation of power purchase
expenses from non conventional sources and captive power plants
a) For existing purchase from renewable energy sources and captive
power plants, Commission has considered the per unit energy charges
for all the years of the second control period equal to that approved
for FY 2012-13 based on TANGEDCO’s provisional estimate of
actual energy charges.
b) For new cogeneration plants, Commission has assumed the energy
and fixed charges in accordance to that approved by the Commission
in its tariff order on determination of tariff for procurement of power
from Bagasse based Cogeneration plants dated 31st July 2012.
4.201 The power purchase expenses from renewable energy sources and captive power
plants filed by TANGEDCO and approved by the Commission are tabulated below.
Table 258: Power purchase expenses from non conventional sources and CPP approved by the
Commission for FY 2013-14
Source
Petition Commission
Units
(MU)
Variable
Cost
(Rs./Unit )
Total Cost
(Rs. Crore)
Units
(MU)
Variable
Cost
(Rs./Unit )
Total Cost
(Rs. Crore)
Captive 719 4.58 329 595 3.94 234
Wind 5320 3.42 1818 7145 3.12 2229
Biomass 799 4.98 398 11 4.45 5
Cogeneration 2562 4.08 1045 1428 3.51 501
New Cogeneration Plants 0
502 3.85 193
Solar 208 4.96 103 16 4.62 7
NTPC NVVN 694 4.17 289 35 4.45 16
Total 10302 3.87 3983 9732 3.27 3186
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 265
June 2013
Table 259: Power purchase expenses from non conventional sources and CPP approved by the
Commission for FY 2014-15
Source
Petition Commission
Units
(MU)
Variable
Cost
(Rs./Unit )
Total Cost
(Rs. Crore)
Units
(MU)
Variable
Cost
(Rs./Unit )
Total Cost
(Rs. Crore)
Captive 755 4.8 363 595 3.94 234
Wind 5586 3.59 2005 7145 3.12 2229
Biomass 839 5.23 439 11 4.45 5
Cogeneration 3049 4.28 1306 1428 3.51 501
New Cogeneration Plants 0
802 3.96 318
Solar 768 5.21 400 16 4.62 7
NTPC NVVN 694 4.38 304 35 4.38 15
Total 11691 4.12 4816 10032 3.30 3310
Table 260: Power purchase expenses from non conventional sources and CPP approved by the
Commission for FY 2015-16
Source
Petition Commission
Units
(MU)
Variable
Cost
(Rs./Unit )
Total Cost
(Rs. Crore)
Units
(MU)
Variable
Cost
(Rs./Unit )
Total Cost
(Rs. Crore)
Captive 793 5.04 400 595 3.94 234
Wind 5866 3.77 2210 7145 3.12 2229
Biomass 881 5.49 484 11 4.45 5
Cogeneration 3126 4.5 1406 1428 3.51 501
New Cogeneration Plants 0 0 0 805 4 322
Solar 769 5.47 421 16 4.62 7
NTPC NVVN 694 4.6 319 35 4.45 16
Total 12128 4.32 5239 10035 3.30 3315
Power purchase from traders and other sources
4.202 TANGEDCO has proposed the purchase of power from traders and estimated the
expenses from that purchase by considering an escalation of 5% on per unit energy
charges of FY 2012-13. However, TANGEDCO has not provided any information of
sources from which the proposed purchase from traders is being procured.
4.203 TANGEDCO has later revised the cost of power procurement from bilateral to Rs.
5.13/unit in FY 2012-13 as against Rs. 3.12/unit estimated in Petition. Considering
improved power availability and TANGEDCO’s revised cost of power procurement
from traders in FY 2012-13, Commission is not approving the additional power
procurement from traders proposed by TANGEDCO.
4.204 In response to Commission’s query on case 1 bidding, TANGEDCO has submitted
that 500 MW of power is being procured under medium term through case-1 bidding
from bilateral transactions with M/s National Energy Trading and Services (Lanco),
M/s Adani Enterprises Ltd and M/s Jindal Power Limited.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 266
June 2013
4.205 Commission has approved the levellized tariff for procurement of power from these
sources through orders on P.P.A.P. No. 7 of 2012 and P.P.A.P No. 1 of 2012 dated
17th April 2013 and 21
st June 2012 respectively. Commission has considered the
approved levellized tariffs in these orders for the purpose of estimation of power
purchase expenses.
Table 261: Levelized tariff approved by the Commission for case-1 bidding
Source Capacity (MW) Duration Levellized Tariff
(in Rs./Unit)
M/s Jindal Power 200 June 16, 2013 to Nov 30, 2015 4.92
M/s Adani Power 200 June 16, 2013 to Dec 31, 2015 4.99
M/s Lanco Power 100 June 16, 2013 to May, 2016 4.88
4.206 Power from case-1 bidding is procured under two-part tariff. Commission has
considered the capacity charges in Rs./Unit as per the quotation of the bidders and
then arrived at the variable cost per unit by reducing the per unit capacity charges
from the approved levellized tariff. The per unit capacity charges considered by the
Commission is tabulated below.
Table 262: Capacity charges considered by the Commission for procurement of power under case-1
bidding (Rs./Unit)
Source FY 2013-14 FY 2014-15 FY 2015-16
Jindal Power 2.11 2.20 2.35
Adani Power 1.50 1.69 1.75
Lanco Power 1.72 2.45 2.45
4.207 The power purchase expenses approved by the Commission from the second control
period from these sources are given below.
Table 263: Power purchase expenses approved for case 1-bidding and traders – FY 2013-14
Source
Petition Commission
Units
(MU)
Total Cost
(Rs./Unit )
Total Cost
(Rs. Crore)
Units
(MU)
Total Cost
(Rs./Unit )
Total Cost
(Rs. Crore)
Traders 1413 3.28 463
Case - 1 Bidding
3468 4.94 1713
Total 1413 3.28 463 3468 4.94 1713
Table 264: Power purchase expenses approved for case 1-bidding and traders – FY 2014-15
Source
Petition Commission
Units
(MU)
Total Cost
(Rs./Unit )
Total Cost
(Rs. Crore)
Units
(MU)
Total Cost
(Rs./Unit )
Total Cost
(Rs. Crore)
Traders 804 3.44 277
Case - 1 Bidding
4380 4.94 2163
Total 804 3.44 277 4380 4.94 2163
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 267
June 2013
Table 265: Power purchase expenses approved for case 1-bidding and traders – FY 2015-16
Source
Petition Commissions
Units
(MU)
Total Cost
(Rs./Unit )
Total Cost
(Rs. Crore)
Units
(MU)
Total Cost
(Rs./Unit )
Total Cost
(Rs. Crore)
Traders 933 3.62 338
Case - 1 Bidding
3370 4.94 1664
Total 933 3.62 338 3370 4.94 1664
Power Grid Corporation of India Limited (PGCIL) Charges
4.208 TANGEDCO has proposed PGCIL charges considering an escalation of 5%. In
addition, TANGEDCO has proposed ABTPGCIL charges under PGCIL charges. In
response to Commission’s query, TANGEDCO has replied that they have
inadvertently claimed ABTPGCIL charges under PGCIL charges and these charges
correspond to UI. Hence, Commission is not approving these charges claimed by
TANGEDCO as it has not considered UI as a source of power. Also, Commission is
not considering the reactive energy charges and will revisit at the time of true-up.
4.209 It is pertinent to mention that with new CGS stations commissioning in FY 2013-14,
the transmission charges are expected to increase due to increase in wheeled energy,
Hence, Commission has considered the PGCIL wheeling charges in accordance with
the submission of TANGEDCO from FY 2013-14 to FY 2015-16. The PGCIL Cost
as approved by the Commission from FY 2013-14 to FY 2015-16 in this Order is
tabulated below:
Table 266: PGCIL Charges approved by the Commission for the second control period - Rs. Cr
Parameter FY 2013-14 FY 2014-15 FY 2015-16
Petition Commission Petition Commission Petition Commission
PGCIL - SR and ER wheeling 578 578 607 607 637 637
PGCIL - Reactive energy 19 0 19 0 21 0
ABTPGCIL 345
362
380
Total 942 578 988 607 1038 637
Intrastate Transmission Charges
4.210 TANGEDCO has claimed intrastate transmission charges for the second control
period based on the ARR estimate as per TANTRANSCO Petition.
4.211 However, Commission has determined the transmission charges applicable to
TANGEDCO considering approved ARR of TANTRANSCO in Order on T.P. No. 2
of 2013 and the allotted capacity of TANGEDCO. The intrastate transmission charges
approved by the Commission for the second control period are given below.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 268
June 2013
Table 267: Transmission Charges payable to TANTRANSCO for the second control period (Rs. Cr.)
Parameter
2013-14 2014-15 2015-16
Petition Commission Petition Commission Petition Commission
Transmission charges
payable to TANTRANSCO 2329 1533 2888 2850 3629 3632
Merit order Dispatch
4.212 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”.
4.213 For the purpose of determination of power purchase cost, the Commission has
followed the methodology given below:
i. Energy available from Must-Run Power plants will be dispatched first
ii. Energy availability from Hydro generating plants will not be subjected to
MoD
4.214 The Tamil Nadu Electricity Grid Code stipulates following guidelines for scheduling
and despatch of power.
“8. Scheduling and Despatch
2. (b) SLDC shall regulate the overall State generation in such a manner that
generation from following types of power stations where energy potential, if
unutilized, goes, as a waste shall not be curtailed
• Run of river or canal based hydro stations.
• Hydro-station where water level is at peak reservoir level or expected to
touch peak reservoir level (as per inflows).
• Wind Power Stations and Renewable Energy Sources
• Nuclear Power Station”
4.215 The total energy availability from must run power plants estimated by the
Commission for the second control period is given below:
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 269
June 2013
Table 268: Energy available from must run plants – MUs
Source Power Procurement Energy Available at TN Periphery
FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016
CGS
MAPS 1568 1568 1573 1500 1500 1504
KAIGA 1176 1176 1179 1125 1125 1128
Kundakulum 1663 4376 4388 1591 4186 4197
PFBR
Kalpakam 0 494 792 0 473 758
Sub Total 4408 7614 7932 4216 7284 7587
Wind (Private) 7145 7145 7145 7145 7145 7145
Wind Mills -
TANGEDCO 12 12 12 12 12 12
Cogeneration 1930 2230 2233 1930 2230 2233
Solar 16 16 16 16 16 16
NTPC NVVN 35 35 35 35 35 35
Biomass 11 11 11 11 11 11
Total 13557 17064 17384 13366 16733 17039
4.216 For hydro-energy generation, TANGEDCO will majorly incur only fixed expenses.
Also, Commission is of the view that TANGEDCO can plan its energy despatch from
hydro generation suitably meeting its load requirements. Hence, Commission has not
subjected the energy available from hydro generating stations under MoD. The energy
available from hydro generating stations is tabulated below.
Table 269: Energy available from Hydro Generation - in MUs
Source FY 2014 FY 2015 FY 2016
Hydro Stations 4844 4844 4844
4.217 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 at Tamil Nadu periphery calculated by the Commission on Merit Order
Ranking basis. For arriving at the energy available from CGS must run plants,
Commission has considered an inter-state transmission loss of 4.34%. The energy
required to be purchased on Merit Order Despatch basis is given below:
Table 270: Energy required to be purchased under MoD (Tamil Nadu periphery) - MUs
Parameter FY 2014 FY 2015 FY 2016
Energy Requirement (TN Periphery) 67515 73919 77374
Less: Must run plants (CGS) 4216 7284 7587
Less: other Must run plants 9150 9450 9452
Less: Hydro 4844 4844 4844
Energy required to be purchased under MoD 49305 52342 55491
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 270
June 2013
4.218 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 energy requirement at TN periphery on the basis of calculation shown above. For
the CGS plants Commission has assumed an inter-state loss of 4.34%. 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 271: Merit order ranking of available energy sources for FY 2013-14
Source
Variable
Cost (Rs./
Unit)
Energy
available at
TN Periphery
(MUs)
Cumulative
available
energy (Mus) -
TN Periphery
Energy to be
purchased
(TN
Periphery)
Total Energy to be
purchased (Mus)
NTPC Talcher 1.41 3215 3215 3215 3361
NTPC SR (I&II) 1.68 3781 6996 3781 3952
Vallathur Gas
Power Plant 1.73 1232 8228 1232 1232
NLC TS – I
Expansion 1.80 1406 9634 1406 1470
TGTPS 1.86 711 10346 711 711
KGTPS 1.86 665 11011 665 665
NLC TS - II 1.98 3049 14060 3049 3188
NTPC Simhadri 1.99 1489 15549 1489 1556
ABAN 2.00 783 16332 783 783
NTPC Vallur 2.00 4740 21072 4740 4955
NLC TS - II
Expansion 2.00 84 21156 84 88
NLC - Tuticorin 2.00 496 21651 496 518
NTPC SR III 2.00 945 22597 945 988
Penna 2.04 353 22950 353 353
NLC TS - I 2.24 3469 26419 3469 3469
ST-CMS 2.32 1665 28083 1665 1665
NCTPS 2.55 4494 32577 4494 4494
NCTPS Stage - II 2.72 5429 38006 5429 5429
M/s Jindal Power 2.81 1387 39393 1387 1387
TTPS 2.96 7154 46547 7154 7154
MTPS 3.09 5992 52539 2759 2759
Table 272: Merit order ranking of available energy sources for FY 2014-15
Source
Variable
Cost (Rs./
Unit)
Energy
available at
TN Periphery
(MUs)
Cumulative
available
energy (Mus) -
TN Periphery
Energy to be
purchased
(TN
Periphery)
Total Energy to
be purchased
(Mus)
NTPC Talcher 1.41 3215 3215 3215 3361
NTPC SR (I&II) 1.68 3781 6996 3781 3952
VGTPS 1.73 1232 8228 1232 1232
NLC TS I –
Expansion 1.80 1406 9634 1406 1470
TGTPS 1.86 711 10346 711 711
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 271
June 2013
Source
Variable
Cost (Rs./
Unit)
Energy
available at
TN Periphery
(MUs)
Cumulative
available
energy (Mus) -
TN Periphery
Energy to be
purchased
(TN
Periphery)
Total Energy to
be purchased
(Mus)
KGTPS 1.87 665 11011 665 665
NLC TS - II 1.98 3049 14060 3049 3188
NTPC Simhadri 1.99 1489 15549 1489 1556
ABAN 2.00 783 16332 783 783
NTPC Vallur 2.00 6785 23116 6785 7092
NLC TS - II
Expansion 2.00 1676 24792 1676 1752
NLC - Tuticorin 2.00 2529 27321 2529 2643
NTPC SR III 2.00 945 28266 945 988
Penna 2.04 353 28619 353 353
NLC TS - I 2.24 3469 32088 3469 3469
ST-CMS 2.32 1665 33753 1665 1665
M/s Lanco Power 2.43 876 34629 876 876
NCTPS 2.55 4494 39123 4494 4494
NCTPS Stage - II 2.61 8176 47299 8176 8176
M/s Jindal Power 2.72 1752 49051 1752 1752
TTPS 2.96 7154 56204 3291 3291
Table 273: Merit order ranking of available energy sources for FY 2015-16
Source
Variable
Cost (Rs./
Unit)
Energy
available at
TN Periphery
(MUs)
Cumulative
available
energy (MUs) -
TN Periphery
Energy to be
purchased
(TN
Periphery)
Total Energy to
be purchased
(MUs)
NTPC Talcher 1.41 3224 3224 3224 3370
NTPC SR (I&II) 1.68 3791 7015 3791 3963
VGTPS 1.73 1235 8251 1235 1235
NLC TS I
Expansion 1.80 1410 9661 1410 1474
TGTPS 1.86 713 10374 713 713
KGTPS 1.87 667 11041 667 667
NLC TS - II 1.98 3058 14099 3058 3196
NTPC Simhadri 1.99 1493 15591 1493 1560
ABAN 2.00 783 16374 783 783
NTPC Vallur 2.00 6803 23178 6803 7112
NLC TS - II
Expansion 2.00 2124 25302 2124 2220
NLC - Tuticorin 2.00 2536 27837 2536 2651
NTPC SR III 2.00 948 28785 948 991
Penna 2.04 353 29138 353 353
NLC TS - I 2.24 3478 32617 3478 3478
ST-CMS 2.32 1665 34281 1665 1665
M/s Lanco Power 2.43 878 35160 878 878
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 272
June 2013
Source
Variable
Cost (Rs./
Unit)
Energy
available at
TN Periphery
(MUs)
Cumulative
available
energy (MUs) -
TN Periphery
Energy to be
purchased
(TN
Periphery)
Total Energy to
be purchased
(MUs)
NCTPS 2.55 4507 39666 4507 4507
M/s Jindal Power 2.57 1171 40837 1171 1171
NCTPS Stage - II 2.61 8198 49035 8198 8198
Ennore Expansion 2.66 1049 50085 1049 1049
TTPS 2.96 7173 57258 5406 5406
4.219 The fixed cost as per Regulations or PPA has been allowed for the Power Plants which are not scheduled as per Merit Order Despatch shown above.
4.220 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 following reasons, TANGEDCO
may require to draw power from other available sources based on MOD principle.
a) Availability of energy is considered on annual basis and there could be differences on
monthly/daily basis.
b) Restriction of power flow from other regions due to corridor constraints.
c) Delay in commissioning of new CGS and own generating stations
d) With reduced load shedding, the demand may increase and exceed the consumption
estimates
e) During non wind seasons, the availability from WEGs might decrease resulting in
demand-supply mismatch.
4.221 Hence, Commission allows TANGEDCO to draw power from the other available
regulated sources during these circumstances. However, TANGEDCO shall follow
the MOD and optimize the power purchase cost on the basis of Merit Order Ranking.
Commission directs TANGEDCO to use the energy availability from its hydro power
plants judiciously in order to address the short fall of energy availability during non
wind seasons.
4.222 Commission is of the view that TANGEDCO should project power availability for
shorter time intervals such as monthly to arrive at short term power management
using the sources listed above leading to overall optimization of power purchase cost.
This time interval for projection could be reduced to a fortnight or ten days in due
course
4.223 In this context, Commission directs TANGEDCO to provide the monthly energy
demand and availability and its plan of scheduling power in accordance to MoD
on quarterly basis. For power procurement with variable cost more than Rs. 3.50 per
unit from unapproved sources and sources not getting dispatched under MoD,
TANGEDCO is directed to take prior approval of the Commission before purchasing
energy.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 273
June 2013
Summary of power purchase costs
4.224 The summary of power purchase costs approved by the Commission for the second
control period from own generation and other sources after considering MoD is
tabulated below:
Table 274: Summary of power purchase cost approved by the Commission for FY 2013-14
Source
Petition Commission
Units
(MU)
Capac
ity
Charg
es (Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energ
y
Charg
es (Rs.
Crore)
Total
Cost
(Rs.
Crore)
Own
Generating
Stations
Coal Based
Power Plants
ETPS 987 227 4.35 429 656
258 3.87 0 258
TTPS 6963 542 3.19 2224 2766 7154 436 2.96 2118 2554
MTPS 5990 308 3.04 1823 2131 2758 300 3.09 853 1153
NCTPS 4502 541 2.59 1164 1705 4494 359 2.55 1145 1504
Sub Total 18442 1619 3.06 5640 7259 14406 1354 2.86 4115 5469
Gas Based
Power Plants
TGTPS 669 117 2.17 145 262 711 79 1.86 132 212
KGTPS 614 90 2.06 126 217 665 89 1.86 124 213
VGTPS 1211 154 3.39 411 565 1232 157 1.73 213 370
BBGTPS 59 116 15.71 93 209
116 12.49 0 116
Sub Total 2554 476 3.04 776 1252 2609 441 1.80 469 910
Hydro
Genration
Circles
Erode
5768
285
0 285
4844
218
0 218
Kundah 173
0 173 202
0 202
Tirunelveli 151
3 154 101
0 102
Kadamparai 82
0 82 76
0 76
Wind Mills 0.00
0.00 0 0 12.00
2.75 3 3
Sub Total -
Existing
Stations
26764 2785 2.40 6419 9204 21870 2392 2.10 4588 6980
New Stations
NCTPS Stage
- II 6387 895 3.30 2110 3005 5429 602 2.72 1476 2078
MTPS – Stage
III 3587 773 3.74 1342 2115
343 3.15 0 343
Ennore
Expansion 0 0 0.00
0 0
Sub Total 9974 1668 3.46 3452 5120 5429 945 2.72 1476 2421
Total - Own
Generating 36738 4453 2.69 9871 14324 27298 3337 2.22 6064 9401
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 274
June 2013
Source
Petition Commission
Units
(MU)
Capac
ity
Charg
es (Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energ
y
Charg
es (Rs.
Crore)
Total
Cost
(Rs.
Crore)
Stations
Central
Generation
Stations
NTPC SR
(I&II) 4164 240 1.72 715 955 3952 227 1.68 664 891
NTPC SR III 1074 97 2.02 217 314 988 92 2.00 198 290
NLC TS - I 2937 171 1.79 526 697 3469 292 2.24 777 1069
NLC TS - II 3450 217 2.10 724 941 3188 177 1.98 631 808
NLC TS I
Expansion 1749 234 1.96 343 578 1470 194 1.80 265 459
NTPC Talcher 3567 313 2.21 789 1102 3361 278 1.41 474 752
NTPC
Simhadri 638 81 2.37 151 232 1556 271 1.99 310 581
MAPS 1986 0 2.15 428 428 1568 0 2.04 320 320
KAIGA 1278 0 3.38 432 432 1176 0 3.02 355 355
NTPC ER 0 48 0.00 0 48 0 0 0.00 0 0
NTPC Dadri 599 17 2.84 170 187 0 0 0.00 0 0
NTPC Vallur 4676 0 3.64 1703 1703 4955 743 2.00 991 1734
Kudankulam 2426 0 3.64 883 883 1663 0 3.02 502 502
PFBR
Kalpakkam 0 0 0.00
0 0 3.02 0 0
NLC TS - II
Expansion 1449 0 3.64 527 527 89 13 2.00 18 31
NLC -
Tuticorin 257 0 3.50 90 90 518 78 2.00 104 181
Sub Total 30250 1418 2.54 7697 9116 27954 2366 2.01 5608 7973
IPPs
GMR 0 175 0.00 0 175
147 10.41 0 147
Samalpatti 0 128 0.00 0 128
109 10.18 0 109
PPN 0 315 0.00 0 315
292 8.55 0 292
Madurai 0 137 0.00 0 137
110 10.96 0 110
ST-CMS 1819 347 2.41 439 786 1665 364 2.32 385 749
ABAN 375 117 1.91 72 189 783 117 2.00 157 274
Penna 759 62 1.93 147 209 353 58 2.04 72 130
Sub Total 2953 1281 2.23 658 1938 2800 1197 2.19 614 1811
Renewable
Energy
Sources and
CPP
Captive 719 0 4.58 329 329
3.94 0 0
Wind 5320 0 3.42 1818 1818 7145
3.12 2229 2229
Biomass 799 0 4.98 398 398 11
4.45 5 5
Cogeneration 2562 0 4.08 1045 1045 1428
3.51 501 501
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 275
June 2013
Source
Petition Commission
Units
(MU)
Capac
ity
Charg
es (Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energ
y
Charg
es (Rs.
Crore)
Total
Cost
(Rs.
Crore)
New
Cogeneration
Plants
0 0 0.00 0 0 502
3.85 194 194
Solar 208 0 4.96 103 103 16
4.62 7 7
Sub Total 9608
3.84 3694 3694 9102
3.23 2936 2936
Other Sources
Trading -
Bilateral &
Exchange
1413
3.28 463 463 0 0 0.00 0 0
Jindal Power 0
0.00 0 0 1387 293 2.81 389 682
Adani Power 0
0.00
208 3.49 0 208
Lanco Power 0
0.00
119 3.16 0 119
UI 0
0.00 0 0 0 0 0.00 0 0
NTPC NVVN 694
4.17 289 289 35 0 4.45 16 16
Sub Total 2107
3.57 753 753 1423 620 2.85 405 1025
Total - Other
Power
Purchase
44917 2699 2.85 12801 15500 41279 4183 2.32 9563 13746
Transmission
Charges
PGCIL - ER &
SR 578
578
PGCIL -
Reactive
Energy
Charges
19
0
ABTPCIL
345
0
Sub Total
942
578
Grand Total 81656 7152 2.78 22672 30766 68578 7521 2.28 15627 23726
Table 275: Summary of power purchase cost approved by the Commission for FY 2014-15
Source
Petition Commission
Units
(MU)
Capac
ity
Charg
es (Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energ
y
Charg
es (Rs.
Crore)
Total
Cost
(Rs.
Crore)
Own
Generating
Stations
Coal Based
Power Plants
ETPS 959 251 4.57 438 689
268 3.87 0 268
TTPS 7096 587 3.35 2380 2966 3291 449 2.96 974 1424
MTPS 5990 335 3.26 1952 2286
320 3.09 0 320
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 276
June 2013
Source
Petition Commission
Units
(MU)
Capac
ity
Charg
es (Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energ
y
Charg
es (Rs.
Crore)
Total
Cost
(Rs.
Crore)
NCTPS 4639 559 2.72 1260 1819 4494 368 2.55 1145 1513
Sub Total 18684 1731 3.23 6029 7760 7785 1406 2.72 2119 3525
Gas Based
Power Plants
TGTPS 694 118 2.28 158 276 711 79 1.86 133 212
KGTPS 614 91 2.16 133 223 665 88 1.87 124 212
VGTPS 1173 151 3.56 418 569 1232 156 1.73 213 369
BBGTPS 59 117 16.49 98 215
47 12.49 0 47
Sub Total 2541 475 3.18 807 1282 2609 370 1.80 469 840
Hydro
Genration
Circles
Erode
5801
284
0 284
4844
332
0 332
Kundah 191
0 191 202
0 203
Tirunelveli 149
3 153 114
0 114
Kadamparai 95
0 95 77
0 77
Wind Mills 0
0 0 0 12
2.75 3 3
Sub Total -
Existing
Stations
27026 2926 2.53 6839 9765 15250 2501 1.70 2592 5093
New Stations
NCTPS Stage
- II 7774 1142 3.47 2697 3839 8176 1031 2.61 2130 3162
MTPS – Stage
III 3990 752 3.93 1567 2319
596 3.03 0 596
Ennore
Expansion 0 0 0.00
0 0
Sub Total 11764 1894 3.62 4264 6158 8176 1628 2.61 2130 3758
Total - Own
Generating
Stations
38790 4820 2.86 11103 15923 23426 4129 2.02 4723 8851
Central
Generation
Stations
NTPC SR
(I&II) 4164 252 1.79 744 995 3952 227 1.68 664 891
NTPC SR III 1074 102 2.10 226 328 988 92 2.00 198 290
NLC TS - I 2937 180 1.86 547 726 3469 292 2.24 777 1069
NLC TS - II 3450 228 2.18 753 981 3188 177 1.98 631 808
NLC TS I
Expansion 1749 246 2.04 357 603 1470 194 1.80 265 459
NTPC Talcher 3567 329 2.30 820 1149 3361 278 1.41 474 752
NTPC
Simhadri 678 85 2.46 167 252 1556 271 1.99 310 581
MAPS 1986 0 2.24 445 445 1568 0 2.04 320 320
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 277
June 2013
Source
Petition Commission
Units
(MU)
Capac
ity
Charg
es (Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energ
y
Charg
es (Rs.
Crore)
Total
Cost
(Rs.
Crore)
KAIGA 1278 0 3.51 449 449 1176 0 3.02 355 355
NTPC ER 0 50 0.00 0 50 0 0 0.00 0 0
NTPC Dadri 638 17 2.95 188 206 0 0 0.00 0 0
NTPC Vallur 6704 0 3.75 2514 2514 7092 1064 2.00 1418 2482
Kudankulam 4316 0 3.81 1645 1645 4376 0 3.02 1321 1321
PFBR
Kalpakkam 0 0 0.00
494 0 3.02 149 149
NLC TS - II
Expansion 1546 0 3.79 585 585 1752 263 2.00 350 613
NLC -
Tuticorin 1219 0 3.64 444 444 2643 397 2.00 529 925
Sub Total 35307 1489 2.80 9884 11373 37086 3255 2.09 7761 11016
IPPs
GMR 0 184 0.00 0 184 0 0 0.00 0 0
Samalpatti 0 134 0.00 0 134
109 10.18 0 109
PPN 0 331 0.00 0 331
292 8.55 0 292
Madurai 0 144 0.00 0 144
110 10.96 0 110
ST-CMS 1844 364 2.51 463 827 1665 364 2.32 385 749
ABAN 375 123 1.99 75 198 783 117 2.00 157 274
Penna 810 65 2.01 163 228 353 58 2.04 72 130
Sub Total 3029 1345 2.31 700 2045 2800 1051 2.19 614 1665
Renewable
Energy
Sources and
CPP
Captive 755
4.80 363 363
3.94 0 0
Wind 5586
3.59 2005 2005 7145
3.12 2229 2229
Biomass 839
5.23 439 439 11
4.45 5 5
Cogeneration 3049
4.28 1306 1306 1428
3.51 501 501
New
Cogeneration
Plants
0
0.00 0 0 802
3.96 318 318
Solar 768
5.21 400 400 16
4.62 7 7
Sub Total 10997
4.10 4512 4512 9402
3.26 3061 3061
Other Sources
Trading -
Bilateral &
Exchange
804
3.44 277 277 0 0 3.44 0 0
Jindal Power 0
0.00 0 0 1752 385 2.72 476 861
Adani Power 0
0.00 0 0
296 3.30 0 296
Lanco Power 0
0.00 0 0 876 215 2.43 213 428
UI 0
0.00 0 0 0 0 0.00 0 0
NTPC NVVN 694
4.38 304 304 35 0 4.38 16 16
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 278
June 2013
Source
Petition Commission
Units
(MU)
Capac
ity
Charg
es (Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energ
y
Charg
es (Rs.
Crore)
Total
Cost
(Rs.
Crore)
Sub Total 1498
3.88 581 581 2663 896 2.65 705 1601
Total - Other
Power
Purchase
50831 2834 3.08 15677 18511 51952 5202 2.34 12140 17342
Transmission
Charges
PGCIL - ER &
SR 607
607
PGCIL -
Reactive
Energy
Charges
20
0
ABTPCIL
362
0
Sub Total
989
607
Grand Total 89621 7654 2.99 26780 35423 75378 9330 2.24 16863 26800
Table 276: Summary of power purchase cost approved by the Commission for FY 2015-16
Source
Petition Commission
Units
(MU)
Capac
ity
Charg
es (Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energ
y
Charg
es (Rs.
Crore)
Total
Cost
(Rs.
Crore)
Own
Generating
Stations
Coal Based
Power Plants
ETPS 920 264 4.80 441 705
274 3.87 0 274
TTPS 7200 592 3.52 2535 3127 5406 471 2.96 1601 2071
MTPS 5990 351 3.42 2049 2401
343 3.09 0 343
NCTPS 4640 536 2.85 1323 1859 4507 379 2.55 1148 1527
Sub Total 18749 1744 3.39 6348 8092 9913 1466 2.77 2748 4215
Gas Based
Power Plants
TGTPS 697 114 2.39 167 281 713 79 1.86 133 212
KGTPS 593 88 2.27 135 223 667 87 1.87 125 211
VGTPS 1191 146 3.74 445 592 1235 156 1.73 213 369
BBGTPS 59 114 17.32 103 216
45 12.49 0 45
Sub Total 2540 462 3.34 850 1312 2616 367 1.80 471 838
Hydro
Genration
Circles
Erode 6353
275
0 275 4844
337
0 337
Kundah 201
0 201 204
0 204
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 279
June 2013
Source
Petition Commission
Units
(MU)
Capac
ity
Charg
es (Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energ
y
Charg
es (Rs.
Crore)
Total
Cost
(Rs.
Crore)
Tirunelveli 150
3 153 118
0 119
Kadamparai 107
0 107 78
0 78
Wind Mills 0
0.00 0 0 12
2.75 3 3
Sub Total -
Existing
Stations
27643 2939 2.61 7202 10140 17384 2570 1.85 3223 5793
New Stations
NCTPS Stage
- II 8275 1082 3.64 3014 4096 8198 1014 2.61 2136 3151
MTPS – Stage
III 4240 728 4.12 1748 2476
584 3.03 0 584
Ennore
Expansion 1058 333 2.57 272 604 1049 124 2.66 279 403
Sub Total 13573 2143 3.71 5034 7177 9247 1723 2.61 2415 4138
Total - Own
Generating
Stations
41216 5081 2.97 12236 17317 26632 4293 2.12 5638 9931
Central
Generation
Stations
NTPC SR
(I&II) 4164 264 1.86 774 1038 3963 227 1.68 666 893
NTPC SR III 1074 107 2.19 235 342 991 92 2.00 198 290
NLC TS - I 1469 189 1.94 284 473 3478 292 2.24 779 1071
NLC TS - II 3450 240 2.27 783 1023 3196 177 1.98 633 809
NLC TS I
Expansion 1749 258 2.12 371 630 1474 194 1.80 265 460
NTPC Talcher 3567 345 2.39 853 1198 3370 278 1.41 475 753
NTPC
Simhadri 678 90 2.56 174 263 1560 271 1.99 311 582
MAPS 1986 0 2.33 462 462 1573 0 2.04 321 321
KAIGA 1278 0 3.65 467 467 1179 0 3.02 356 356
NTPC ER 0 53 0.00 0 53 0 0 0.00 0 0
NTPC Dadri 678 18 3.07 208 227 0 0 0.00 0 0
NTPC Vallur 7141 0 3.90 2785 2785 7112 1067 2.00 1422 2489
Kudankulam 5544 0 3.90 2162 2162 4388 0 3.02 1325 1325
PFBR
Kalpakkam 0 0 0.00
792 0 3.02 239 239
NLC TS - II
Expansion 1642 0 3.94 647 647 2220 333 2.00 444 777
NLC -
Tuticorin 1300 0 3.79 492 492 2651 398 2.00 530 928
Sub Total 35721 1564 2.99 10698 12261 37948 3329 2.10 7965 11294
IPPs
GMR 0 193 0.00 0 193 0 0 0.00 0 0
Samalpatti 0 141 0.00 0 141
100 10.18 0 100
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 280
June 2013
Source
Petition Commission
Units
(MU)
Capac
ity
Charg
es (Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energy
Charges
(Rs.
Crore)
Total
Cost
(Rs.
Crore)
Units
(MU)
Capacity
Charges
(Rs.
Crore)
Energy
Charge
s (Rs./
Unit )
Energ
y
Charg
es (Rs.
Crore)
Total
Cost
(Rs.
Crore)
PPN 0 347 0.00 0 347
292 8.55 0 292
Madurai 0 151 0.00 0 151
110 10.96 0 110
ST-CMS 1869 382 2.61 488 870 1665 364 2.32 385 749
ABAN 375 129 2.07 78 207 783 117 2.00 157 274
Penna 810 68 2.09 169 238 353 58 2.04 72 130
Sub Total 3054 1412 2.41 735 2147 2800 1042 2.19 614 1656
Renewable
Energy
Sources and
CPP
Captive 793
5.04 400 400
3.94 0 0
Wind 5866
3.77 2210 2210 7145
3.12 2229 2229
Biomass 881
5.49 484 484 11
4.45 5 5
Cogeneration 3126
4.50 1406 1406 1428
3.51 501 501
New
Cogeneration
Plants
0
0.00 0 0 805
4.00 322 322
Solar 769
5.47 421 421 16
4.62 7 7
Sub Total 11434
4.30 4920 4920 9405
3.26 3065 3065
Other Sources
Trading -
Bilateral &
Exchange
933
3.62 338 338 0 0 0.00 0 0
Jindal Power 0
0.00 0 0 1171 275 2.57 301 576
Adani Power 0
0.00 0 0
231 3.24 0 231
Lanco Power 0
0.00 0 0 878 215 2.43 214 429
UI 0
0.00 0 0 0 0 0.00 0 0
NTPC NVVN 694
4.60 319 319 35 0 4.45 16 16
Sub Total 1627
4.03 657 657 2085 721 2.54 530 1252
Total - Other
Power
Purchase
51836 2976 3.28 17009 19985 52238 5092 2.33 12174 17266
Transmission
Charges
PGCIL - ER &
SR 637
637
PGCIL -
Reactive
Energy
Charges
21
0
ABTPCIL
380
0
Sub Total
1038
637
Grand Total 93052 8057 3.14 29245 38340 78870 9385 2.26 17812 27834
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 281
June 2013
Aggregate Revenue Requirement for the second control period
4.225 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
thefollowing:-
(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”
4.226 Based on the approved expenses in the above sections of this Chapter, the Aggregate Revenue Requirement approved by the Commission for the second control period is
tabulated below:
Table 277: ARR approved by the Commission for the second control period (Rs. Cr.)
Parameter Petition Commission
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Expenses in respect of own
Generation 14324 15923 17317 9401 8851 9931
Power Purchase Cost 16442 19499 21023 14324 17949 17903
Annual Transmission
Charges payable to
TANTRANSCO
2329 2888 3629 1533 2850 3632
Operation and Maintenance
Expenses 4100 4582 5276 3779 4068 4396
Depreciation 328 388 530 362 435 519
Interest on Long term loan 2238 2376 2495 1525 1740 1938
Other Debits 30 36 38 20 26 28
Prior Period Expenses 0 0 0 0 0 0
Return on Equity 405 601 966 0 0 0
Interest on Working Capital 808 1237 1387 0 0 0
Contribution to
Contingency Reserves 75 89 122 0 0 0
ARR 41079 47618 52784 30945 35918 38347
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 282
June 2013
Non Tariff Income (NTI) and Other Income
4.227 The NTI has been approved by the Commission based on the same methodology as
done for FY 2012-13. The Commission has used the same year on year escalation rate
and based on its estimates for FY 2012-13, approved NTI for the second control
period.
4.228 TANGEDCO in its petition has filed Other Income for FY 2013-14 to FY 2015-16
separately for Generation and Distribution business. The Commission based on its
approach followed for the first control period has approved the Other Income as filed
by TANGEDCO for the said years. The non tariff income and other income approved
by the Commission for the distribution business is tabulated below.
Table 278: Non Tariff and Other Income approved by the Commission for the second control period (Rs.
Cr)
Particulars Petition Approved
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Non Tariff Income 737.23 789.14 844.82 634.61 679.98 728.70
Other Income 303.47 341.00 363.54 303.47 341.00 363.54
Total 1040.70 1130.14 1208.36 938.08 1020.98 1092.24
Higher interest expenses due to abnormal Capitalization
4.229 In its Petition, TANGEDCO has proposed capital expenditure of around Rs. 16 Cr/MW – Rs. 18 Cr/MW for its new hydro stations.
Table 279: Capital expenditure for new hydro stations as per TANGEDCO MYT Petition (Rs. Cr)
Name of Power Plant Installed Capacity (in MW) Cost as on COD
Bhavani Barrage II 2 x 5 MW = 10 MW 187.61 Crores
Bhavani Kattalai
Barrage II
2 x 15 MW = 30 MW 497.46 Crores
Periyar Vaigai I 2 x 2 MW = 4 MW 62.00 Crores
Periyar Vaigai II 2 x 1.25 MW = 2.5 MW 48.29 Crores
4.230 In the revised capital expenditure and capitalization information submitted by
TANGEDCO, the capitalization of these hydro generating stations is shown around
Rs. 23Cr/MW to Rs. 33 Cr/MW. Commission is of the view that the proposed capital
cost is extremely high compared to industry norms. Inspite of repeated directions,
TANGEDCO has not filed any Petition for the approval of the capital cost of new
hydro stations. In view of this, Commission has disallowed the interest expenses on
higher capitalization considering the capital cost of Rs. 5.50 Crs/MW for small hydro
plants in accordance with CERC RE Tariff regulations. The disallowed capitalization
and interest expenses for the second control period are given below.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 283
June 2013
Table 280: Capital cost as per revised filing and CERC norms
Power Plant Capitalization (Rs. Cr) Capacity
(MW)
Cost (Rs.
Cr /MW) CERC Norms
2013-14 2014-15 Total Cost – Rs.
Cr/MW
Cost – Rs.
Cr
Bhavani Barrage 307.18 22.34 329.52 10.00 32.95 5.50 55.00
Bhavani Katlai 837.02 7.59 844.61 30.00 28.15 5.50 165.00
Periyar 125.88 26.06 151.94 6.50 23.37 5.50 35.75
Table 281: Disallowed Capitalization and Capital Cost
Power Plant Disallowed Capital
Cost (Rs. Cr)
Disallowed Capitalization (Rs. Cr)
FY 2013-14 FY 2014-15
Bhavani Barrage 274.52 255.91 18.61
Bhavani Katlai 679.61 673.50 6.11
Periyar 116.19 96.26 19.93
Table 282: Disallowed Interest Expenses (Rs. Cr)
Power Plant FY 2013-14 FY 2014-15 FY 2014-15
Bhavani Barrage 15.33 31.78 32.89
Bhavani Katlai 40.35 81.07 81.43
Periyar 5.77 12.73 13.92
Total 61.45 125.57 128.25
Note: Interest expenses have been disallowed considering interest rate of 11.98%, estimated
based on average interest rate for FY 2010-11 and FY 2011-12
4.231 Based on the above submissions, the net ARR approved for the second control period
is tabulated below:
Table 283: Net Revenue Requirement approved by the Commission for the second control period (Rs.
Cr.)
Parameter Petition Commission
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Aggregate Revenue
requirement 41079 47618 52784 30945 35918 38347
Less: Other income and
NTI 1041 1130 1208 938 1021 1092
Less: Higher interest
expenses 0 0 0 61 126 128
Net Revenue
Requirement 40038 46488 51576 29946 34771 37127
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 284
June 2013
A5: ESTIMATION OF REVENUE GAP AND TARIFF
DETERMINATION FOR FY 2013-14
Revenue from Sale of Power –FY 2013-14
5.1 The following table details the revenue at existing and proposed tariff as revised and
filed by TANGEDCO for FY 2013-14 in its reply to data gaps.
Table 284: Revised filing of revenue at existing and proposed tariff for FY 2013-14
Particulars
Existing
Tariff
Proposed
Tariff
Rs. Crores Rs. Crores
HT Consumer Category
I-A HT Industries 5,616 5,616
I-B Railway Traction 519 519
II-A Govt. Educational Inst. etc. 560 560
II-B Pvt. Educational Inst. etc. 175 175
III HT Commercial 1,387 1,387
IV Lift Irrigation 2 2
V Others 338 338
VI Temporary supply 186 186
Total HT 8,783 8,783
LT Consumer Category
I-A Domestic 7,137 7,137
I-B Huts 105 220
I-C LT bulk supply 4 4
II-A Public Lighting and Water Supply 963 963
II-B-1 Govt. Educational Inst. etc. 74 74
II-B-2 Pvt. Educational Inst. etc. 163 163
IIC Places of Public Worship 71 71
IIIA 1 Cottage and Tiny Industries 53 53
IIIA 2 Power Looms 460 460
IIIB L.T. Industries 2,996 2,996
IV L.T. Agriculture 2,005 2,864
V L.T. Commercial 4,130 4,130
VI Temporary supply 50 50
Total LT 18,211 19,184
Total HT + LT 26,993 27,967
5.2 The Commission based on its revised estimation of sales, consumer load and number
of connections has calculated the revenue from sale of power based on the existing
and proposed tariff filed by TANGEDCO in its petition.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 285
June 2013
5.3 TANGEDCO has proposed to revise the tariffs of LT I-B and LT IV categories. It is
pertinent to mention that the cost of entire consumption on account of huts as well as
on account of agricultural consumption is being borne by the Government of Tamil
Nadu by way of subsidy under Section 65 of the Electricity Act 2003. In this matter,
GoTN has given commitment letter No. 2369/A1/2013 dated 10th June 2013 detailing
provision of tariff subsidy to LT IB and LT IV categories of electricity consumers.
GoTN has also stated that the budget provision for necessary additional expenditure
has already been made in the budget for the year FY 2013-14 and a formal order of
GoTN in this regard will be issued shortly. Hence, the additional revenue from the
proposed tariff increase will be fully received as Government subsidy. The category-
wise revenue including subsidy approved by the Commission for FY 2013-14 is
tabulated below.
Table 285: Revenue from sales as approved by the Commission at existing and proposed tariff for FY
2013-14
Particulars
Existing
Tariff
Proposed
Tariff
Rs. Crores Rs. Crores
HT Consumer Category
I-A HT Industries 6,199 6,199
I-B Railway Traction 529 529
II-A Govt. Educational Inst. etc. 561 561
II-B Pvt. Educational Inst. etc. 175 175
III HT Commercial 1,399 1,399
IV Lift Irrigation 2 2
V Temporary supply 187 187
Total HT 9,052 9,052
LT Consumer Category
I-A Domestic 6,876 6,876
I-B Huts 106 222
I-C LT bulk supply 4 4
II-A Public Lighting and Water Supply 963 963
II-B-1 Govt. Educational Inst. etc. 75 75
II-B-2 Pvt. Educational Inst. etc. 162 162
IIC Places of Public Worship 71 71
IIIA 1 Cottage and Tiny Industries 57 57
IIIA 2 Power Looms 460 460
IIIB L.T. Industries 2,998 2,998
IV L.T. Agriculture 1,980 2,829
V L.T. Commercial 4,159 4,159
VI Temporary supply 50 50
Total LT 17,962 18,926
Total HT + LT 27,014 27,978
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 286
June 2013
5.4 Therefore the Revenue from sale of power for FY 2013-14 approved by the
Commission is Rs. 27,014 Crores and Rs. 27,978 Crores at the existing and proposed
tariff. This revenue is inclusive of the Government subsidy component. Commission
envisages additional revenue of Rs. 964 Cr from the proposed tariff increase.
5.5 The Retail Tariff for various consumer categories as proposed by TANGEDCO and
approved by the Commission is as follows.
Table 286: Existing and Approved retail tariff schedule for FY 2013-14
Category
Slabs (Per
Month) Sub Category
Existing Tariff Approved Tariff
Energy
Charges
Rs./kWh
Demand
Charges/ Fixed
Charge
Energy
Charges
Rs./kWh
Demand
Charges/ Fixed
Charge
Low Tension
LT - IA Domestic
1-50 kWh 2.60 10 Rs per month 2.60 10 Rs per month
1-100 kWh 2.80 10 Rs per month 2.80 10 Rs per month
Above 100
kWh - Upto
250 kWh
0-100 kWh 3.00 15 Rs per month 3.00 15 Rs per month
101-250 kWh 4.00 15 Rs per month 4.00 15 Rs per month
Above 250
kWh
0-100 kWh 3.00 20 Rs per month 3.00 20 Rs per month
101-250 kWh 4.00 20 Rs per month 4.00 20 Rs per month
Above 250
kWh 5.75 20 Rs per month 5.75 20 Rs per month
LT - IB Huts
Single Slab
2.5
(On
Installati
on
of Energy
Meter)
60 Rs/kW per
month
4.3
(On
Installati
on
of
Energy
Meter) 125 Rs per month
LT - IC
LT bulk
supply
Single Slab 4.00 50 Rs per month 4.00 50 Rs per month
LT - IIA
Public
Lighting and
Water
Supply
Single Slab 5.50 0 Rs per month 5.50 0 Rs per month
LT - IIB
(1)
Govt.
Educational
Inst. etc.
Single Slab 5.00 50 Rs/kW per 5.00 50 Rs/kW per
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 287
June 2013
Category
Slabs (Per
Month) Sub Category
Existing Tariff Approved Tariff
Energy
Charges
Rs./kWh
Demand
Charges/ Fixed
Charge
Energy
Charges
Rs./kWh
Demand
Charges/ Fixed
Charge
month month
LT - IIB
(2)
Pvt.
Educational
Inst. etc.
Single Slab 6.50
50 Rs/kW per
month 6.50
50 Rs/kW per
month
LT - IIC
Places of
Public
Worship
0-60 kWh 5.00
50 Rs/kW per
month 5.00
50 Rs/kW per
month
Above 60
kWh 5.00
50 Rs/kW per
month 5.00
50 Rs/kW per
month
LT -
IIIA (1)
Cottage and
Tiny
Industries
0-250 kWh 3.50
15 Rs/kW per
month 3.50
15 Rs/kW per
month
Above 250
kWh 4.00
15 Rs/kW per
month 4.00
15 Rs/kW per
month
LT -
IIIA (2)
Power
Looms
0-250 kWh 4.50
50 Rs/kW per
month 4.50
50 Rs/kW per
month
Above 250
kWh 5.00
50 Rs/kW per
month 5.00
50 Rs/kW per
month
LT -
IIIB
L.T.
Industries
Single Slab 5.50
30 Rs/kW per
month 5.50
30 Rs/kW per
month
LT - IV
L.T.
Agriculture
Single Slab
1.3
(On
Installati
on
of Energy
Meter)
1750
Rs/HP/Annum
2.8
(On
Installati
on
of
Energy
Meter)
2500
Rs/HP/Annum
LT - V
L.T.
Commercial
0-50 kWh 4.30
60 Rs/kW per
month 4.30
60 Rs/kW per
month
All Units 7.00 60 Rs/kW per 7.00 60 Rs/kW per
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 288
June 2013
Category
Slabs (Per
Month) Sub Category
Existing Tariff Approved Tariff
Energy
Charges
Rs./kWh
Demand
Charges/ Fixed
Charge
Energy
Charges
Rs./kWh
Demand
Charges/ Fixed
Charge
month month
LT - VI
Temporary
supply
Single Slab 10.50 100 Rs/kW/Day* 10.50
300 Rs/kW per
month
High Tension
HT - IA
HT
Industries
Single Slab 5.50
300 Rs/kVA per
month 5.50
300 Rs/kVA per
month
HT - IB
Railway
Traction
Single Slab 5.50
250 Rs/kVA per
month 5.50
250 Rs/kVA per
month
HT - IIA
Govt.
Educational
Inst. etc.
Single Slab 4.50
300 Rs/kVA per
month 4.50
300 Rs/kVA per
month
HT - IIB
Pvt.
Educational
Inst. etc.
Single Slab 5.50
300 Rs/kVA per
month 5.50
300 Rs/kVA per
month
HT - III
HT
Commercial
Single Slab 7.00
300 Rs/kVA per
month 7.00
300 Rs/kVA per
month
HT - IV
Lift
Irrigation
Societies
Single Slab 3.50
0 Rs/kVA per
month 3.50
0 Rs/kVA per
month
HT - V
Temporary
supply
Single Slab 9.50
300 Rs/kVA per
month 9.50
300 Rs/kVA per
month
*Minimum Charges
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 289
June 2013
Revenue gap and determination of Regulatory Asset
5.6 TANGEDCO in its Petition has projected revenue gap to be recovered based on,
• Final true-up for FY 11
• Provisional true-up for FY 12
• Annual Performance Review for FY 13
• Aggregate Revenue Requirement for FY 14
Table 287: Consolidated Revenue Gap calculated by TANGEDCO (Rs. Crores)
Particulars Petition
2010-11 2011-12 2012-13 2013-14
Aggregate Revenue Requirement 13,415 34,431 36,247 41,079
Less : Non Tariff Income 217 644 689 737
Less : Other Income 93 141 132 303
Less : Other Income from Generation 0 2 0 0
Aggregate Revenue Requirement 13,105 33,645 35,426 40,039
Total Revenue including Subsidy 7,332 18763 25,707 29,695
Revenue Gap at Existing Tariff 5,773 14,882 9,719 10,344
Table 288: Additional revenue gap arrived by TANGEDCO in its petition (Rs. Crores)
Year Gap Approved
by Commission last year
Gap Arrived in
this Petition
2010-11 4,187 5,773
2011-12 13,409 14,882
2012-13 -6 9,719
2013-14 0 10,344
Total 17,590 40,718
5.7 TANGEDCO has submitted a total revenue gap of Rs. 40,718 Cr upto FY 2013-14 in
its petition for the post unbundling period.
5.8 Commission has arrived at the revised revenue gap considering the approved net
revenue requirement and revenue at existing tariffs from FY 2010-11 to FY 2013-14.
For FY 2013-14, Commission has arrived at the revised revenue gap after considering
the additional revenue estimated to accrue to TANGEDCO through tariff hike. The
revenue gap determined by the Commission from FY 2010-11 to FY 2013-14 is
tabulated below.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 290
June 2013
Table 289: Revenue Gap re-estimated by the Commission for the period FY 2010-11 to FY 2013-14 (Rs.
Cr)
Particulars 2010-11 2011-12 2012-13 2013-14 Total
Net Revenue Requirement 11898 28953 30472 29946 101269
Less: Revenue from Sale of
Power at Existing Tariff
including Tariff Subsidy
7848 19475 23561 27014 77898
Revenue Gap at existing
tariff 4050 9478 6911 2932 23371
Less: Additional revenue
through tariff increase 964 964
Revenue Gap at revised
tariff 1,968 22407
Revenue Account and Amortization of Regulatory Asset
5.9 TANGEDCO in its petition has revised its total outstanding Regulatory Asset based
on the total gap arrived in its petition, which is cumulative of gap for FY 2010-11
(true-up for 5 months), FY 2011-12 (on provisional true-up), FY 2012-13 (Estimated
for current year) and FY 2013-14 (gap for ensuing year), It has submitted that the
revised calculation of Regulatory Assets may kindly be approved.
5.10 It is also to be noted that the current tariff hike as estimated by TANGEDCO will
result in additional revenue to the tune of Rs 973 Crores, which would be met through
Government subsidy.
Table 290: Regulatory Assets as claimed by TANGEDCO
Particulars Rs. Crores
Loss for the year
FY 2010-11 5,773
FY 2011-12 14,882
FY 2012-13 9,719
FY 2013-14 10,344
Total Gap arrived in this Petition 40,718
Total Regulatory Asset approved by Commission 19,571
Less : Tariff hike proposed 973
Additional Regulatory Asset Proposed 20,173
Total Regulatory Asset Proposed 39,744
5.11 In the last order Commission has directed TANGEDCO not to mix up the capital
accounts and revenue accounts. Hence, Commission in line with its direction is
treating the revenue account separately. Commission has arrived at the consolidated
revenue gap of Rs. 23677 Cr as on March 2013 by considering the approved revenue
gap for each year of the first control period in this order and allowing interest
expenses at 11%. The consolidated revenue gap arrived at closing of FY 2013 is given
below.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 291
June 2013
Table 291: Revenue account for the first control period (Rs. Cr)
Parameter FY 2010-11 FY 2011-12 FY 2012-13
Opening 0 4145 14657
Additions (Revenue gap approved
by the Commission) 4050 9478 6912
Add: Interest Expenses 95 1034 2108
Closing 4145 14657 23677
Average 2073 9401 19167
5.12 Considering the approved revenue gap of Rs. 1967 Crs for FY 2013-14, Commission
has arrived at the net regulatory asset of Rs. 25644 Crs for FY 2013-14.
Table 292: Regulatory Asset arrived by the Commission (Rs. Cr)
Parameter Amount (Rs. Cr.)
Revenue Gap - Ending March 2013 23677
Revenue Gap - FY 2013-14 1967
Regulatory Asset 25644
5.13 In the Tariff Order No. 1 dated 30th March 2012, the proposed methodology for
Amortization of the Regulatory Asset had been laid down as follows.
“Para 9.8.2: The Regulatory Asset is proposed to be amortized over a period of 5
years commencing from the year 2013-14 onwards. Once the Regulatory Asset is
arrived at, 1/5th of the Regulatory Asset would be amortized along with the carrying
cost. When the tariff order for 2014 – 15 is done, the Regulatory Asset would be re-
worked out and 1/4th of such Regulatory Asset would be amortized in that tariff order
along with that cost and so on until the entire Regulatory Asset is amortized. The
carrying cost would correspond to the weighted average rate of interest for medium
/long term loans of TANGEDCO in the corresponding year in which the amortization
of the Regulatory Asset is done. The amortization is in-principle approved to be met
by Government of Tamil Nadu as per their letter (Ms.) No. 32 dated 25-03-2012 as
enclosed in Annexure IX. The Commission is of the view that creation of Regulatory
Asset could not be avoided in view of the accumulation of Regulatory Asset over a
period due to phenomenal load growth, less addition to the generating capacity, high
power purchase costs, increase in costs and non filing of tariff petition.”
5.14 The Regulatory Asset determined in Table 292 shall be taken into consideration while
amortization the outstanding regulatory asset for this year.
5.15 In response to TANGEDCO’s letter on amortization of regulatory asset, GoTN has
agreed for amortization of regulatory asset through Letter(Ms.) No. 59/C2/2012 dated
7th June 2013. The relevant extracts of the letter received from GoTN are reproduced
below:
a) GoTN has agreed to the financial restructuring of the state Discoms
announced by GoI on 5th October 2012. Accordingly, GoTN will take over
50% of TANGEDCOs short term liabilities to the tune of Rs. 6382.68 Crs in a
phased manner.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 292
June 2013
b) In GoTN annual budget for FY 2013-14, Rs. 3000 Cr has been provided for the takeover during the current financial year. The remaining liabilities would
continue to be in books of TANGEDCO till the time of eventual takeover.
However, the interest on these liabilities will be paid by the GoTN.
c) Keeping in view, the financial restructuring plan and available audited accounts GoTN has proposed following approach for amortization of
Regulatory Asset.
i. As the audited accounts are available only for the year FY 2010-11, the
amortization may be carried out for the regulatory assets of the year for
which audited accounts are available. For subsequent years, the
regulatory assets would be reassessed for amortization as soon as
audited accounts are available.
ii. The carrying cost of the Regulatory Assets can be linked to the actual
cost of cash loss financing after the financial restructuring. At present
it is 11%. Hence, the same interest rate may be taken as carrying cost.
iii. Since the GoTN is already taking over Rs. 6382.68 Cr of short term
liabilities of TANGEDCO, part of this amount may be accounted for
amortization to the extent of 1/5th of the regulatory assets as per the
audited accounts of FY 2010-11
iv. The balance amount can be adjusted towards amortization of the
regulatory assets in subsequent years.
v. Since the GoTN is also paying interest on the balance amount, the
carrying cost of such amount can be discounted in arriving at the
regulatory assets in subsequent years.
vi. The GoTN has in-principle agreed to amortisation of Regulatory
Assets. The details are to be worked out in conjunction with tariff
revision.
5.16 Commission considering the letter received from GoTN has estimated the Regulatory
Asset pertaining to FY 2010-11 at a carrying cost of 11%. Commission has then
amortized 1/5 of the estimated Regulatory Asset pertaining to FY 2010-11.
Table 293: Regulatory Asset amortized during FY 2013-14 (Rs. Cr)
Parameter FY 2011 FY 2012 FY 2013
Opening 0 4145 4628
Additions 4050 0 0
Interest Expenses 95 482 539
Closing 4145 4628 5166
Regulatory Asset to be Amortized
(1/5 of the RA as on March 2013) 1033
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 293
June 2013
5.17 Commission approves Regulatory Asset of Rs. 24611 Crs after the considering the
amortized regulatory asset.
Table 294: Regulatory Asset approved by the Commission (Rs. Cr)
Parameter Amount (Rs. Cr.)
Regulatory Asset (Initial Estimate) 25644
Amortized Regulatory Asset 1033
Revised Regulatory Asset 24611
5.18 It is pertinent to mention that Commission still have an approval of GoTN for
amortization of Rs. 5350 Crs, which will be adjusted towards amortization in the
subsequent years. In addition, Commission will not consider interest expenses on this
amount while calculating the regulatory asset for subsequent years.
5.19 In this order Commission has increased tariff only for two cagetories i.e Agriculture
and Huts. With new capacities getting added this year after considerable delay,
Commission expects the average power purchase cost to reduce with increase in
regulated power purchase besides improving the power supply position. Further in FY
2012-13 tariffs were increased to all LT consumers by a big margin. Also, GoTN has
in principle agreed for amortisation of Regulatory Asset in conjunction with tariff
revision.
“Point 4(f) of Letter (Ms) No. 59/C2/2012 dated 7th June 2013
The Government in its letter cited first above has agreed in-principle with a request of
amortisation of regulatory assets. The details are to be worked out in conjuction with
tariff revision.”
5.20 Based on above submissions, Commission is of the view that tariffs can be reviewed
later along with the amortisation of balance regulatory asset. Also, TANGEDCO is in
the process of finalization of its Financial Restructuring Plan (FRP) scheme and once
the scheme is finalized, the amortization of balance regulatory asset can be worked
out considering GoTN support, FRP scheme etc.
5.21 Commission wants to reiterate its view regarding opening loans allocated to
TANGEDCO through provisional transfer scheme. TANGEDCO is borrowing new
loans for repayment the loans allocated and these borrowings can only be reduced by:
a) Additional cash infusion into the business
b) Revision of transfer scheme through which the opening loans
allocated to TANGEDCO gets reduced.
These issued need to be kept in view by TANGEDCO and GoTN while
finalizing the Transfer Scheme and the opening balance sheet as on 1st
November 2010.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 294
June 2013
Voltage wise Cost to Serve, Average Cost of Supply and Cross subsidy
reduction
Voltage wise cost to serve for FY 2013-14
5.22 Pursuant to the directives of the Hon’ble Appellate Tribunal in its judgement dated
28.7.2011 in Appeal no. 192 & 206 of 2010 in which the Tariff Order dated 31.7.2010
was challenged, the Commission had estimated the voltage wise cost to serve in its
tariff order dated 30.3.2012, but had not determined the cross subsidy based on it.
5.23 The Commission has also very clearly stated its views in the same order as its
response to stakeholder comments in Para 2.1.461:
“………..
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.
vii. 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.”
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 295
June 2013
5.24 Further the Commission in line with the directives of the Hon’ble Appellate Tribunal
had also directed TANGEDCO to undertake data collection for computing accurate
cost of supply and submit a study report computing the consumer category wise and
voltage wise cost to serve. TANGEDCO in partial compliance to the above directive
has undertaken a technical study and computed the category wise cost of service but
has stated its inability to compute voltage wise cost to serve as its accounting system
are not robust enough to capture cost details voltage wise.
5.25 Consequently in the Order of Hon’ble Appellate Tribunal of Electricity dated 9th April
2013 in Appeal Nos. 257 of 2012 in which the the Commissions tariff order dated
30.3.2012 was challenged, the Appellate Tribunal’s opinion on this issue of cross
subsidy reduction is extracted below:
“13. The fifth issue is regarding increase in cross subsidy.
13.1 According to the Appellant the cross subsidy for HT consumers has been
increased from 17% to 47% and the State Commission has also failed to
comply with the directions given by the Tribunal regarding determination of
voltage wise cost of supply in Appeal no. 192 of 2010.
13.2 According to learned counsel for the State Commission, the cross subsidy with
respect to average cost of supply for Industries was 122% for the FY 2010-11
as per the tariff order dated 31.7.2010 which has been increased to 147% in
the impugned order. However, the Tariff Order dated 31.7.2010 for FY 2010-
11 was not a matching Tariff Order in which large gap was left between the
revenue requirement and ARR allowed whereas the impugned order was
issued for the entire ARR without leaving any revenue gap. However, in the
impugned order while the tariff of Appellant was increased by 19%, the
increase in tariff to some of the subsidized categories was Domestic 42%,
Huts 400%, Power looms 130% and Agriculture 589%. Further increase to
subsidized categories would give great tariff shock to these categories. The
contribution of major LT consumers towards cost was also raised from 54% to
80%. Further, the voltage wise cost of supply could not be determined as the
distribution licensee could not supply the requisite data. The essential
requirement laid down in Section 61(g) of the Act in regard to tariff being
progressively reflecting the cost of supply and also reduction in cross subsidy
could be verified only from the next tariff order of the State Commission.
13.3 We notice that the first tariff order was given by the State Commission on
15.3.2003. Thereafter, the tariff was determined only by order dated 31.7.2010
for FY 2010-11 after a lapse of seven years. During these seven years, the
accumulated losses of the distribution licensee increased manifold. However,
the State Commission did not allow recovery of the accumulated losses of the
previous years in the tariff and decided that the financial losses of the
previous years would have to be addressed by restructuring with intervention
of the State Government. The State Commission decided to leave revenue gap
and create regulatory assets in the anticipated revenue during the control
period 2010-11 to 2012-13. For the years 2010-11 and 2011-12, the State
Commission had left revenue gap of Rs. 7904.04 crores and Rs. 6062.24
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 296
June 2013
crores respectively. Thus, the tariff for FY 2010-11 was fixed after leaving
huge revenue gap which was uncovered by tariff even though the tariff was
determined after a lapse of seven years.
13.4 Let us now examine the directions of the Tribunal in judgment dated 28.7.2011
in Appeal no. 192 of 2010 in which the tariff order dated 31.7.2010 was
challenged.
"13.4. The fourth issue is regarding cost to serve each category of consumer.
We have noticed that the State Commission has not determined the cost of
supply according to its Regulations as also the variation in tariff of different
categories of consumers with reference to average cost of supply. In the
absence of this information, we are not able to verify that the tariff of
categories of consumers is within ± 20% of the average cost of supply and
whether the cross subsidy has been reduced or increased with respect to the
previous year. The issue regarding cost of supply has been dealt with in this
Tribunal's Judgment dated 30th May, 2011 in Appeal Nos. 102, 103 and 112
of 2010 in the matter of Tata Steel Limited vs. Orissa Electricity Regulatory
Commission, etc. Accordingly, the State Commission is directed to determine
the voltage wise cost of supply within six months from the date of this
Judgment to ensure that in the future tariff orders cross subsidies for different
categories of consumers are determined according to the Regulations and the
cross subsidies are reduced as per the provisions of the Act. The State
Commission is also directed to determine the variation of tariff of different
categories of consumers with respect to average cost of supply and provide
consequential relief, if any, to the appellant's consumer category in terms
with our findings after hearing all concerned."
13.5 We notice that that State Commission has estimated the voltage wise cost to
serve in the impugned order but has not determined the cross subsidy with
respect to voltage wise cost to serve and has directed the distribution licensee
to carry out some data collection exercise for computing accurate cost of
supply and submit a study report on computation of consumer category wise
and voltage wise cost to serve.
13.6 It is noticed that the State Commission has increased the tariff of the
subsidized categories considerably. The increase in the tariff of various
subsidized categories as given in Table 227 of the impugned order is as under:
LT Domestic 40%
Hut 755%
Power Looms 143%
LT Agriculture 593%
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 297
June 2013
LT Total 48%
Thus, we agree with the contention of the State Commission that the State
Commission has increased the tariff of the subsidized categories considerably
and further increase would have caused greater tariff shock to these
categories.
13.7 We find that if the tariff of Appellant's category is kept within plus 20% of the
average cost of supply it may require increase in tariff of subsidized LT
consumers by 110% of the pre-revised tariff causing greater tariff shock to
them. This would be evident by following:
i)Consumption of industries category IA 13545 MU
ii)Revenue at the revised tariff of Rs. 7.32 per kWh 9914 crores
iii)Tariff at + 20% of average cost of supply (Rs.4.99 per kWh) Rs. 6 per kWh
iv)Revenue at Rs. 6 per kWh 8127 crores
v)Loss of revenue from industries category IA 1787 crores
vi)Consumption of LT subsidized consumers 29709 MU
vii)Increase in average tariff to recover loss of revenue from industrial category
IA
(v)
( ______x 10)
(vi)
Rs. 0.60 per
kWh
viii)Average tariff of subsidized LT consumers after tariff increase Rs. 2.86
ix)Increased average tariff required to cover the loss of revenue Rs.3.46 per
kWh
x)Average tariff of subsidized LT consumers prior to revision Rs.1.65 per
kWh
xi)Desired average increase in LT tariff to cover loss of revenue %age About 110%
xii)Average increase allowed to LT subsidized category About 73%
Thus, against present average increase of about 73% allowed to the
subsidized LT categories, the increase required to bring the HT, IA category
alone to + 20% of average cost of supply would be about 110%. If other
subsidizing consumers had to be brought within +20% or average cost of
supply, the required increase in tariff in the subsidized categories would have
been much higher.
13.9 Let us now examine the findings of the State Commission in the impugned order
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 298
June 2013
"9.7.2 The Commission notes that the present level of cross subsidisation of
LT category consumers has been brought down from 46% to 20%, which is a
huge shift towards the final goal of +20% of Average Cost of Supply.
9.7.3 Retail Tariff in State of Tamil Nadu was not revised for a period from
FY 2003-04 to FY 2009-10, on account of non filing of the tariff petition by
erstwhile TNEB. Increase in average cost of supply has been sought by
TANGEDCO, in this Tariff Petition. Cross-subsidy has been in existence
historically even in the period where there was no tariff revision. The
Commission also observes that tariff that was charged to most of the
categories of consumers was below average cost of supply. Hence, now when
the TANGEDCO has sought actual pass through of revenue gap in the form
of Tariff Increase and Regulatory Asset, the impact on each category of
consumers is significant. The Commission has attempted to reduce the cross-
subsidy between the consumer categories in this Order, by rationalising the
tariff for subsidised categories and suitably adjusting the tariff for
subsidising categories, vis-à-vis the prevailing average cost of supply, while
at the same time, trying to ensure that there is no tariff shock to any
consumer category. However, since the average cost of supply has been
increasing steadily, the average tariff increase required to meet the revenue
gap is also increasing, and hence, the subsidising consumers have not been
able to experience tariff reduction in absolute terms.”
13.10 In the circumstances of the case, we feel that the State commission has tried to
increase the tariff of the subsidized categories substantially so as to reduce the
component of cross subsidy. The comparison of charge in cross subsidy with
the previous tariff order for FY 2010-11 may not give correct picture as in the
previous tariff order the tariffs were not increased adequately to meet the
revenue gap and a huge revenue gap was left uncovered. The State
Commission has already increased the tariff of subsidized categories
substantially and further increase would have caused greater tariff shock to
them which may not be desirable.
13.11 Accordingly, we are not inclined to interfere in the tariff determined by the
State Commission. However, the State Commission is directed to determine
the voltage-wise cost of supply and corresponding cross subsidy for each
category of consumer in the future tariff order.”
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 299
June 2013
5.26 The Commission has noted that sufficient data is not available for metering and
segregation of the network costs for determination of cost of supply for different
categories of consumers. To undertake an accurate and logically sound voltage wise
cost of supply study, TANGEDCO should select sample feeders/ consumers for load
research study. The selected sample should be statistically verified to be
representative of the population. Hourly load data and energy consumption should be
collected from selected feeders/ consumers for each voltage category of consumers.
From the data so collected TANGEDCO should undertake a load research study to
determine the contribution to Coincident Factor and Class Load Factor for each
voltage category. Further TANGEDCO should have accurately classified voltage wise
losses, voltage wise number of consumers and their load. Based on such a study a
representative cost to serve various voltage classes can be arrived at. TANGEDCO
has so far not conducted such a study and gathered the required information.
5.27 The Commission would also like to note that the year FY2012-13 has seen severe
shortage of power due to which more stringent R&C measures as well as load
shedding was unavoidable. Given such a situation where cyclical load shedding was
adopted, the voltage wise consumer contribution to peak would have been misleading.
Considering the peculiar difficulties in this specific situation as well as the fact that
sufficient data is unavailable, the Commission has resorted to estimate the voltage
wise cost to serve based on the data made available.
Embedded cost method
5.28 The annual revenue requirement has been allocated to consumers connected at
different voltage levels based on a combination of allocation factors. The factors are:
contribution of a voltage class to the power purchase, voltage wise cost contribution
to network assets, contribution of a voltage class to T&D losses, number of
consumers in a voltage class and connected load of consumers in a voltage class.
5.29 The Commission has calculated the voltage wise cost to serve using three steps
namely functionalisation, classification and allocation of costs to various voltage
classes.
A. Functionalisation:
5.30 Firstly the total costs have been segregated according to the major operating functions
of the utility, such as generation, transmission or distribution.
Table 295: Functionalisation of costs of TANGEDCO for FY 14 (Crs)
Sl. No Cost Heads Generation Transmission Distribution
1 Power Purchase Cost 23,726
2 Transmission Cost 1,533
3 Distribution Cost
Employees costs 3,610
Repair & Maintenance 68
Administration & General expenses
101
Depreciation
362
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 300
June 2013
Sl. No Cost Heads Generation Transmission Distribution
Interest on Long term loan* 1,464
Other Debits & extra ordinary items 20
Prior Period Debit/(Credit) Charges
-
Reasonable Return / Return on Equity
-
Interest on Working Capital -
Contribution to Contingency Reserves -
Total expenditure 5,625
Less Other Income and Non tariff income 938
Total Distribution cost 4,687
*After deducting the interest expenses disallowed for new hydro stations
B. Classification of costs:
5.31 The objective of cost classification is to arrange costs into groups that bear a
relationship to a measurable cost-defining characteristic of the service being rendered.
Functionalized costs are classified as:
• Demand related
• Energy related and
• Customer related
5.32 The Demand classification relates to costs expended for providing capacity to serve
system load requirements. The Energy related classification consists of those
expenses that vary with any change in the consumption, such as energy component of
power purchase cost. The Customer related classification is related to expenses linked
directly to and varies by the number and type of customers served.
a. Classification of Generation Expenses:
Power is procured from both own generating stations of TANGEDCO as well as
purchased from various allocated CGS stations, IPPs, NCES and Other short term
sources.
The power procurement cost has both fixed and variable component and hence
ideally the total fixed cost of own generation and power purchase should be
classified as demand related and the total variable cost of own generation and
power purchase as energy related costs.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 301
June 2013
The Commission observes that the Power purchase costs are identified as both
demand and energy related as TANGEDCO should not only be able to supply
adequate energy for sale to consumers but also have sufficient installed capacity
or purchase capacity to satisfy the system peak demand. For this segregation
TANGEDCO would have to provide information pertaining to contribution of
individual class to coincidental peak demand. It has been observed from the
Technical Paper on Cost to Serve submitted by TANGEDCO that the above
information is not available with them. Thus the Commission has treated the
entire own generation as well as power purchase cost as energy related costs, so as
to have a logical basis for apportioning the cost as an approximation. As and when
the required details become available calculations will have to be made by
dividing the power procurement costs with demand related and energy related
costs.
b. Classification of Transmission Expenses:
Usually the entire transmission costs are classified as demand related. However, a
minor portion of transmission investment is utilised for reducing the energy losses
in the transmission system. Hence 2% of transmission charges are classified as
energy related costs and 98% as demand related.
c. Classification of Distribution Expenses:
A large quantum of the distribution costs are related to the creation and
maintenance of the network. This cost is classified as being demand related. The
Distribution utility also incurs expenses to provide service to customers and is also
required to meet customer peak demand requirements. This component of expense
varies with the number of customers to be served, like providing connections to
new consumers which in turn also adds to the utilities system capacity to meet
peak demand. Thus they exhibit attributes of both demand and customer charges
and have been apportioned thus.
Table 296: Classification of functional costs
Cost Heads Demand Energy Customer Total
Power Purchase Cost 0% 100% 0% 100%
Transmission Cost 98% 2% 0% 100%
Employees costs 60% 0% 40% 100%
Repair & Maintenance 50% 5% 45% 100%
Administration & General expenses 75% 5% 20% 100%
Depreciation 95% 5% 0% 100%
Interest on Long term loan 95% 5% 0% 100%
Other Debits & extra ordinary items 95% 5% 0% 100%
Prior Period Debit/(Credit) Charges 95% 5% 0% 100%
Reasonable Return / Return on Equity 95% 5% 0% 100%
Interest on Working Capital 95% 5% 0% 100%
Contribution to Contingency Reserves 95% 5% 0% 100%
Less Other Income and Non tariff income 95% 5% 0% 100%
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 302
June 2013
C. Allocation of costs:
5.33 The last step is the process of apportioning the classified costs to each voltage class
on the basis of an appropriate methodology apt for that class of cost. The Commission
has used the following apportioning methodology for the three heads of cost.
a. Demand cost allocation
5.34 Transmission and Distribution demand cost – The costs incurred under these heads
have been allocated by the Commission to voltage classes based on the proportion of
network assets utilised to serve the consumers at specific voltages. These ratios have
been arrived at by first arriving at the total value of voltage wise assets at the end of
FY2012-13 as follows.
5.35 The Commission has based its estimations, on the voltage wise per unit cost and asset
quantum and has arrived at the proportion of asset at each voltage level as follows.
Table 297: Total Line cost as at end of FY 2012-13
Voltage Total cost proportion
>230 kV 17%
110 kV 23%
33 kV 4%
22 kV 5%
11 kV 12%
LT 38%
Total 100%
5.36 On arriving at this preliminary voltage wise cost proportion, a further reclassification
of the same has been done based on the voltage wise sales and wheeled energy
grossed up for losses. This has been done in light of the fact that the higher voltage
systems act as the backbone network for lower voltage systems and hence its full cost
cannot be allocated only to the voltage class it pertains to but also to lower voltage
systems in the proportion of its utilisation i.e. energy requirement at the specific
voltage periphery.
5.37 Explaining further, the reclassification ratios as applied by the Commission are as
follows. The proportion of energy requirement at a particular voltage to total energy
requirement has been calculated and progressively the same logic has been extended
to arrive at the proportion by limiting total requirement upto a lower voltage level.
These ratios are then used to allocate the voltage wise costs arrived at each voltage
level to all lower voltages also.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 303
June 2013
Table 298: Reclassification ratios based on voltage wise energy requirement
Voltage
Energy at
Voltage
Periphery
(MU)*
Total
sales
Upto 110
kV
Upto 33
KV
Upto 22
kV
Upto 11
kV
Only LT
kV
>230
KV 1,044 1.4%
110 KV 4,770 6.2% 6.3%
33 KV 2,145 2.8% 2.8% 3.0%
22 KV 4,116 5.3% 5.4% 5.8% 7.2%
11 KV 11,849 15.3% 15.6% 16.6% 0.0% 18.2%
LT 53,311 69.0% 70.0% 74.6% 92.8% 81.8% 100%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
*Wheeling units at different voltages have been arrived by certain assumptions
Table 299: Voltage wise demand cost allocation factor
Voltage Total cost proportion Reclassification proportion
>230 kV 17% 0.2%
110 kV 23% 2.5%
33 kV 4% 1.3%
22 kV 5% 2.8%
11 kV 12% 9.2%
LT 38% 84.1%
Total 100% 100.0%
b. Energy cost allocation
5.38 Total energy cost – The total cost classified by the Commission as energy related
costs are allocated in the ratio of energy requirement for consumers of a specific
voltage class. The energy requirement includes voltage wise sales and voltage level
losses.
Voltage wise Energy Related Cost = Total Energy Cost x (Voltage wise Sales +
Voltage wise Energy Losses) / Total energy
requirement at transmission periphery
5.39 The power purchase at transmission periphery has been arrived at considering a total
loss of 16.4%. The table below captures the sales, losses and energy requirement for
each voltage class.
5.40 The Commission has based its estimations, on the energy balance data and voltage
wise losses data furnished by TANGEDCO.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 304
June 2013
Table 300: Voltage wise energy cost allocation factor
Sl. No Voltage
Energy
cost
allocation
factor
1 >230 kV 1.1%
2 110 kV 4.8%
4 33 kV 1.6%
5 22 kV 3.1%
6 11 kV 8.9%
7 LT 80.6%
Total 100.0%
c. Customer cost allocation
5.41 Total customer related cost - The costs incurred under this head have been allocated
by the Commission to voltage classes based on the number of consumers in each
voltage class. However, the number of consumers in each class has been weighted to
reflect the appropriate cost causation aspects of the voltage class. The weights are a
function of two parameters namely sales per consumer and load per consumer.
5.42 Allocation of customer related costs are illustrated below in which sales per consumer
and load per consumer has been taken on a weight scale of 1-200 to enable a
meaningful comparison.
Table 301: Voltage wise customer cost allocation factor
Scale 1 200
Voltage
Connecte
d Load
No. of
Consumers Sales
Sales
weightage
Load
weightage
Average
weightage
Total
weight Customer
cost
allocation
factor MW No. MU
Sales Per
Consumer
Load Per
Consumer AW AW*No.
>230kV 429 12 721 200 200 200 2,355 0.01%
110 kV 1,586 183 3,067 200 200 200 36,614 0.14%
33kV 1,036 185 1,027 200 200 200 37,042 0.14%
22kV 1,959 1,829 1,917 200 200 200 365,708 1.37%
11kV 5,433 6,097 5,514 200 200 200 1,219,382 4.58%
LT 51,628 24,952,457 44,953 1 1 1 24,952,457 93.76%
Total 62,071 24,960,762 57,199
26,613,557 100.00%
Voltage wise cost to serve
5.43 Based on the above allocation factors the Commission has allocated the entire ARR to
each voltage class. The sum of the allocated voltage wise demand cost, energy cost
and consumer cost will result in the total cost allocated to each voltage class. Based
on the sales to each voltage class the Commission has arrived at the voltage wise cost
to serve as follows.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 305
June 2013
Table 302: Voltage wise total cost allocation
Voltage
level
Demand
cost
Crores
Demand cost
allocation
factor
Energy
cost
Crores
Energy cost
allocation
factor
Customer
cost
Crores
Customer
cost allocation
factor
Total
cost
Crores
>230 kV 11 0.2% 262 1.1% 0 0.01% 272
110 kV 116 2.5% 1,134 4.8% 2 0.14% 1,252
33 kV 58 1.3% 382 1.6% 2 0.14% 443
22 kV 128 2.8% 734 3.1% 21 1.37% 883
11 kV 425 9.2% 2,113 8.9% 68 4.58% 2,606
LT 3,904 84.1% 19,185 80.6% 1,401 93.76% 24,490
Total
Cost 4,641 23,810 1,495 29,946
Table 303: Voltage wise Cost to Serve
Voltage level
Demand
related cost
(Rs./ kWh)
Energy related
cost
(Rs./ kWh)
Customer
related cost
(Rs./ kWh)
Cost of
supply per
unit
(Rs/kWh)
>230 KV 0.15 3.63 0.00 3.78
110 KV 0.38 3.70 0.01 4.08
33 KV 0.57 3.72 0.02 4.31
22 KV 0.67 3.83 0.11 4.60
11 KV 0.77 3.83 0.12 4.73
LT 0.87 4.27 0.31 5.45
Total 0.81 4.16 0.26 5.24
5.44 It is clear that the cost to serve lower voltage classes is higher than the cost to serve
higher voltage classes primarily due to higher losses, both technical and commercial,
larger consumer base and consumer load.
5.45 The Commission would like to continue to take the stance as taken last year
recognising the importance of carrying out such an exercise in detail enables itself to
test the retail tariff. As mentioned earlier, for arriving at realistic and accurate costs an
extensive data collection exercise has to be carried out by TANGEDCO which will
include a 12-month load profile study of each voltage wise consumer category.
Gathering of load data will require appropriate statistical selection procedure so that
the data is representative of the population at large. It will be imperative to first
determine the criteria for selection of sample data to arrive at close to accurate costs.
5.46 Even though TANGEDCO has attempted to calculate cost to serve, it has been
unsuccessful in doing so at various voltage classes. The Commission once again
directs TANGEDCO to submit a study report on methodology for computation of
voltage wise ‘cost to serve’ (CoS) along with the basis of allocation of different costs
and losses to various voltage levels. This shall be examined by the Commission and
approved with such modifications as it may deem fit or consider a better alternate
computation. The Commission also directs TANGEDCO to submit the action taken
report within 90 days of the issuance of this report.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 306
June 2013
5.47 Finally in the absence of accurate and necessary information from TANGEDCO, the
Commission will base its calculation of cross subsidy on the average cost of supply as
done last year.
Average Cost of Supply and Cross subsidy reduction
5.48 At the outset the Commission brings out the fact that with no tariff increase to most of
the consumers and with increase in cost of supply compared to last tariff order, there
is an inherent decrease in cross subsidy levels.
5.49 Commission has worked out the prevailing cross-subsidy and the reduction in cross-
subsidy for the subsidizing consumers based on the Average cost of supply method.
Table 304: Cross subsidy trajectory estimated by the Commission
Categories
Average cost
of supply
(ACoS) FY14
ABR as per
Existing tariff
ABR as per
Proposed
tariff
Cross subsidy reduction
Last
order
ABR(ET)
/ACoS
ABR(PT)
/ACoS
HT Category
HT Industries 5.24 7.41 7.41 147% 141% 141%
Railway Traction 5.24 6.51 6.51 132% 124% 124%
Government
Educational
Institution Etc.
(HT)
5.24 5.42 5.42 114% 104% 104%
Pvt. Educational
Institutions etc. 5.24 6.84 6.84 139% 131% 131%
Commercial and
Other HT 5.24 8.61 8.61 187% 164% 164%
Lift Irrigation and
co-ops (HT) 5.24 3.50 3.50 71% 67% 67%
Temporary 5.24 10.68 10.68
204% 204%
Total HT 5.24 7.39 7.39 149% 141% 141%
LT Category
Domestic 5.24 3.44 3.44 69% 66% 66%
Huts 5.24 2.12 4.43 50% 41% 85%
Bulk supply 5.24 4.06 4.06 80% 77% 77%
Public Lighting &
Water Works 5.24 5.50 5.50 110% 105% 105%
Government
Educational
Institution
5.24 6.03 6.03 115% 115% 115%
Pvt. Educational
Institutions 5.24 7.37 7.37 137% 141% 141%
Places of Public
Worship (LT) 5.24 5.93 5.93 84% 113% 113%
Cottage and Tiny
Industries 5.24 4.02 4.02 84% 77% 77%
Power Loom 5.24 5.33 5.33 106% 102% 102%
Industries 5.24 6.20 6.20 127% 118% 118%
Agriculture &
Government seed 5.24 1.83 2.61 37% 35% 50%
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 307
June 2013
Categories
Average cost
of supply
(ACoS) FY14
ABR as per
Existing tariff
ABR as per
Proposed
tariff
Cross subsidy reduction
Last
order
ABR(ET)
/ACoS
ABR(PT)
/ACoS
farm
Commercial and
Other 5.24 7.53 7.53 153% 144% 144%
Temporary Supply 5.24 11.62 11.62 211% 222% 222%
Total LT 5.24 4.00 4.21 80% 76% 80%
Total LT+HT 5.24 4.72 4.89 100% 90% 93%
5.50 The Commission would like to note that there is inherent reduction in cross subsidy
being borne by the subsidising consumers as there has been an increase in the average
cost of supply but no increase in the tariff charged to consumers. The Commission
notes that the proportion of cross subsidy that the HT consumers are bearing has come
down from 49% to 41%, which is a positive step towards achieving the target
stipulated by the National Tariff Policy of +20% of average cost of supply. However,
since the average cost of supply has been increasing steadily, the subsidising
consumers have not been able to experience tariff reduction in absolute terms. Further
for the year FY 14, the tariffs have been increased only for two LT categories namely
Huts and Agriculture & Government seed farm which in-turn increases the realisation
from the subsidised consumers. For these two categories the recovery from tariff has
increased from 50% to 84% and 37% to 50% respectively. For the other subsidised
categories there is a marginal reduction in the recovery percentage caused due to the
increase in the average cost of supply.
5.51 Retail Tariff in State of Tamil Nadu was not revised for a period from FY 04 to FY
10, on account of non filing of the tariff petition by erstwhile TNEB. Cross-subsidy
has been in existence historically even in the period where there was no tariff
revision. The Commission also observes that tariff that was charged to most of the
categories of consumers was below average cost of supply. Hence, last year when
TANGEDCO had sought for pass through of revenue gap in the form of tariff
increase, the impact on each category of consumers was significant. In the light of
significant hike in tariff to all categories last year the Commission has approved the
proposition of tariff hike only for two categories as mentioned above this year, so as
to avoid tariff shock to the consumers of the State.
5.52 While the tariff for consumer categories have been approved as sought by
TANGEDCO with minor modifications as detailed in the next section, the revenue
gap considered for the year is not met entirely through the revision in tariff. To
address the shortfall for the year as well as of the past years, the Financial
Restructuring Plan (FRP) will be rolled out from the current financial year along with
amortisation of Regulatory Asset. Further it is possible that the actual revenue earned
by TANGEDCO may be higher or lower than that considered by the Commission, on
account of minor re-categorisation. The revenue shortfall/surplus, if any, will be trued
up at the time of truing up for FY 2013-14.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 308
June 2013
Open Access Charges
Wheeling Charges
5.53 The Tamil Nadu Electricity Regulatory Commission (Terms and Conditions for
Determination of Tariff) Regulation – 2005 clearly stipulated the method for
computing the wheeling charges. The relevant portion has been extracted below:
86. Wheeling Charges for Open Access Customers
(1) The Distribution licensee shall provide open access to any consumer within
the area of his supply on payment of wheeling charges.
(2) The wheeling charges for a consumer category shall be based on costs of
Distribution licensee for its pure wire business. Thus all items of revenue
requirement of the Distribution licensee excluding cost of power purchase and
interest on Security Deposit from consumers shall be the cost of Distribution
licensee for his wire business.
5.54 The Electricity Act 2003 (the Act) allows non discriminatory Open Access to the
network of a Licensee on payment of applicable charges. To arrive at the wheeling
charge, TANGEDCO has proposed the Annual Distribution charge for FY 2013-14 as
shown in the table below. The approved Annual Distribution charge re-estimated by
the Commission and as filed by TANGEDCO in its petition are tabulated below.
Table 305: Annual Distribution Charges for FY 2013-14
S. No. Particular TANGEDCO
Rs. Crores
Approved
Rs. Crores
1 Net O&M Expenses 4,100.31 3,778.81
2 Interest on Loan 2,237.78 1,463.61
3 Interest on Working Capital 808.09 0.00
4 Depreciation 327.61 362.39
4 Return on equity 404.66 0.00
5 Other debits 15.73 19.93
6 Provision for Bad Debts 14.21 0.00
7 Annual Wheeling Charges 7,908.38 5,624.74
8 Less: Interest on Security Deposit 419.01 449.60
9 Net Annual Distribution Charges 7,489.38 5,175.14
10 Annual Wheeling Charges 1611.92 1247.58
5.55 As HT consumers are eligible for Open Access, the above charges have been
allocated to them, in the ratio of the HT distribution network to the total of HT and LT
distribution network. TANGEDCO has provided this ratio as 22:78 based on existing
HT and LT lines as on 31st March, 2012. Based on the revised data on HT and LT line
lengths as on 31st March 2013, submitted by TANGEDCO in its reply to data gaps,
the Commission has re-estimated the network ratio as follows.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 309
June 2013
Table 306: Allocation of Wheeling Charges into LT & HT Category
Sl. No. Particulars TANGEDCO Approved
No.s Ratio No.s Ratio
1 HT Lines (lakh ckt. km.) 1.56 21.52% 1.84 24.11%
3 LT Lines (lakh ckt. km.) 5.67 78.48% 5.78 75.89%
Total 7.23
7.62
5.56 Based on the above ratio and the Annual Distribution charges as approved, the
wheeling charge per unit for the year FY 2013-14 estimated by the Commission are as
follows.
Table 307: Wheeling Charges per unit for FY 2013-14
Particulars FY 14
Energy fed into Grid (in MU) 79,703
230 kV Losses approved by the Commission 0.80%
230 kV Losses (MU) 638
Wheeling units - 230 kV (MU) 315
TANGEDCO - 230 kV Sales (MU) 721
Energy input at 110 kV (MU) 78,030
110 kV Losses approved by the Commission 1.90%
110 kV Losses (MU) 1,483
Wheeling units - 110 kV (MU) 1,575
TANGEDCO - 110 kV Sales (MU) 3,067
Energy Input at Distribution Periphery (MU) 71,905
Total Annual Wheeling Charges (Rs.Crs) 1247.58
Wheeling charges for Open Access Customer (Ps/ unit) 17.35
5.57 Based on the estimated sales and voltage wise losses the Commission has determined
the wheeling charge per unit as 17.35 paise/ kWh for FY 2013-14.
Cross Subsidy Surcharge
5.58 The Electricity Act 2003 clearly lays down the charges recoverable by the distribution
licensee for allowing open access. Extract of the same has been produced below.
Provisos to Section 42 (2) of Electricity Act 2003 stipulates as under:
“Provided that such Open Access shall be allowed on payment of a surcharge in
addition to the charges for wheeling as may be determined by the State Commission
Provided further that such surcharge shall be utilized to meet the requirements of
current level of cross-subsidy within the area of supply of the distribution licensee”
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 310
June 2013
5.59 The Tamil Nadu Electricity Regulatory Commission (Terms and Conditions for
Determination of Tariff) Regulation – 2005, under Section (3) Power to
determine tariff lays down the following:
3. Power to determine Tariff
(1) Under Section 62 of the Act, the Commission shall determine tariff and terms and
conditions therefor in the following cases:
………….
..............
(vi) Surcharge payable by the consumer who is allowed open access in
addition to the charges for wheeling under the first proviso to sub-section (2)
of section 42 of the Act and in accordance with the TNERC Open Access
Regulations.
5.60 Further the National Tariff Policy 2006, in Para 8.5 lays down the formula for
calculating the cross subsidy surcharge payable by open access consumers as follows:
Surcharge formula:
S = T - [C (1+L/100) + D]
Where:
S is the surcharge
T is the Tariff payable by the relevant category of consumers;
C is the Weighted average cost of power purchase of top 5% at the margin
excluded liquid fuel based generation and renewable power
D is the Wheeling charge
L is the system Losses for the applicable voltage level, expressed as a
Percentage
5.61 As per National Tariff Policy, the Cross Subsidy Surcharge has been determined by
TANGEDCO based on avoided cost methodology. TANGEDCO has determined the
5% marginal cost of power purchase in its petition for FY 2013-14 as 3.41 Rs./ kWh
and the same has been estimated by the Commission on the basis of merit order for
FY 2013-14 as 3.59 Rs./ kWh. The tables below capture the same.
Table 308: Weighted average cost of power purchase of top 5% at the margin as filed by TANGEDCO
Sl.
No Station
Units purchased Total purchase cost Cost per
unit
MUs Rs. Crores Rs./unit
1 ABAN 375 189 5.04
2 NTPC - Talcher II 3,567 1,102 3.09
3 Kudankulam Uni t - I 2,426 883 3.64
Total 6,368 2,174 3.41
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 311
June 2013
Table 309: Weighted average cost of power purchase of top 5% at the margin as approved by the
Commission
Station Units purchased Total purchase cost
Cost per
unit
MUs Rs. Crores Rs./unit
Penna 353 130 3.68
Mettur 353 130 3.59
Tuticorin Thermal
Power Station 2723 972 3.57
Total 3429 1232 3.59
5.62 Based on the above weighted average cost of marginal power stations, the
Commission has calculated the cross subsidy surcharge payable by HT consumers for
availing open access.
Table 310: Cross Subsidy Surcharge for HT Categories approved by the Commission (in Paise kWh)
Sl.
No Injection Voltage Drawal Voltage
Total Loss
(%)
Marginal
Cost of Power
Purchase
Wheeling
Charges
Weighted
Average
Power
Purchase Cost
1 230 kV 230 kV 0.80% 359 17.35 380
2 230 kV 110 kV 1.75% 359 17.35 383
3 230 kV 33 kV 2.08% 359 17.35 384
4 230 kV 22 kV 3.46% 359 17.35 390
5 230 kV 11 kV 3.51% 359 17.35 390
6 110 kV 230 kV 1.75% 359 17.35 383
7 110 kV 110 kV 2.70% 359 17.35 387
8 110 kV 33 kV 3.03% 359 17.35 388
9 110 kV 22 kV 4.41% 359 17.35 393
10 110 kV 11 kV 4.46% 359 17.35 394
11 33 kV 230 kV 2.08% 359 17.35 384
12 33 kV 110 kV 3.03% 359 17.35 388
13 33 kV 33 kV 3.36% 359 17.35 389
14 33 kV 22 kV 4.74% 359 17.35 395
15 33 kV 11 kV 4.80% 359 17.35 395
16 22 kV 230 kV 3.46% 359 17.35 390
17 22 kV 110 kV 4.41% 359 17.35 393
18 22 kV 33 kV 4.74% 359 17.35 395
19 22 kV 22 kV 6.12% 359 17.35 400
20 22 kV 11 kV 6.17% 359 17.35 400
21 11 kV 230 kV 3.51% 359 17.35 390
22 11 kV 110 kV 4.46% 359 17.35 394
23 11 kV 33 kV 4.80% 359 17.35 395
24 11 kV 22 kV 6.17% 359 17.35 400
25 11 kV 11 kV 6.23% 359 17.35 401
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 312
June 2013
Table 311: Cross Subsidy Surcharge for HT consumers
Sl.
No
Injection
Voltage
Drawal
Voltage
Industry Railway
traction
Government
Educational
Institution Etc.
Pvt.
Educational
Institutions
etc.
Commercial
and Other
Cross Subsidy Surcharge (Paise/kWh)
1 230 kV 230 kV 361.12 271.14 162.46 304.67 481.28
2 230 kV 110 kV 357.62 267.64 158.95 301.16 477.78
3 230 kV 33 kV 356.38 266.41 157.72 299.93 476.54
4 230 kV 22 kV 351.14 261.17 152.48 294.69 471.30
5 230 kV 11 kV 350.93 260.95 152.26 294.47 471.09
6 110 kV 230 kV 357.62 267.64 158.95 301.16 477.78
7 110 kV 110 kV 354.05 264.07 155.38 297.59 474.21
8 110 kV 33 kV 352.79 262.81 154.12 296.33 472.95
9 110 kV 22 kV 347.44 257.47 148.78 290.99 467.60
10 110 kV 11 kV 347.22 257.25 148.56 290.77 467.38
11 33 kV 230 kV 356.38 266.41 157.72 299.93 476.54
12 33 kV 110 kV 352.79 262.81 154.12 296.33 472.95
13 33 kV 33 kV 351.52 261.54 152.85 295.06 471.68
14 33 kV 22 kV 346.14 256.16 147.47 289.68 466.30
15 33 kV 11 kV 345.92 255.94 147.25 289.46 466.08
16 22 kV 230 kV 351.14 261.17 152.48 294.69 471.30
17 22 kV 110 kV 347.44 257.47 148.78 290.99 467.60
18 22 kV 33 kV 346.14 256.16 147.47 289.68 466.30
19 22 kV 22 kV 340.60 250.62 141.93 284.14 460.76
20 22 kV 11 kV 340.37 250.39 141.70 283.92 460.53
21 11 kV 230 kV 350.93 260.95 152.26 294.47 471.09
22 11 kV 110 kV 347.22 257.25 148.56 290.77 467.38
23 11 kV 33 kV 345.92 255.94 147.25 289.46 466.08
24 11 kV 22 kV 340.37 250.39 141.70 283.92 460.53
25 11 kV 11 kV 340.14 250.17 141.48 283.69 460.30
5.63 At the outset the Commission notes that there has been a marked shift in HT
consumers opting for open access, which has lead to the average billing rate to
increase substantially. The Commission has tabulated below the increase in wheeling
units over the last three years, representing the number of units sourced through other
sources apart from the utility.
Table 312: Wheeled energy over the last there years from FY 2010-11 to FY 2012-13
Particulars FY 2010-11 FY 2011-12 FY 2012-13
MU's MU's MU's
Sale to HT Industrial, HT
Commercial and Educational
Institutions
13,857 11,664 8,646
Wheeling for HT Industries 4,716 6,750 7,871
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 313
June 2013
Particulars FY 2010-11 FY 2011-12 FY 2012-13
MU's MU's MU's
Wheeling for HT Commercial 155 289 318
Wheeling for Educational Institutions 7 10 11
Total Wheeling Units 4,878 7,049 8,200
Total Sales (Including Wheeling) 18,735 18,713 16,846
Percentage of Wheeling Units 26.04% 37.67% 48.67%
5.64 It can be inferred from above table that percentage of wheeling units from 26.04% in
FY 2010-11 increased to 48.67% in FY 2012-13. The R&C measures in place are
making the consumers to depend on other available options for power procurement.
The utility is losing significant revenue due to reduced HT sales. Hence, the per unit
cross subsidy surcharge has marginally increased due to higher ABR due to loss of
revenue with HT consumers moving out of the system.However, due to better energy
availability in FY 2013-14 the number of consumers, other than those consumers who
have permanently left the system due to captive wheeling, opting to source power
through open access is expected to reduce and cause the average billing rate to reduce.
Grid Availability Charges
5.65 TANGEDCO in its petition has requested the Commission for approval of energy
charges plus the energy equated demand charges applicable to HT Temporary supply
tariff as Grid Availability Charges.
5.66 TANGEDCO submitted that the Grid Availability Charges are for providing standby
arrangements to Open Access customers in the following cases:
• In case of outages of Generator supplying to an open access consumer.
• For start up power by generator.
• When the generation as per schedule is not maintained and when the drawal by the open
access consumer is in excess of the schedule.
5.67 The tariff applicable to start-up power has been dealt in Tariff schedule of this Order
5.68 With regards grid availability charges for open access consumers, Commission
approves following norms
1) Scheduling of all transactions pursuant to grant of long-term open access or
medium-term open access or short-term open access shall be carried out on
day-ahead basis in accordance with the relevant provisions of IEGC/CERC
Open Access Regulations for inter-State transactions and in accordance with
State Grid Code/Commission’s Regulations / orders for intra-State
transactions.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 314
June 2013
2) Deviations between the schedule and the actual injection/drawal in respect of a open access customer who is not a consumer of the distribution licensee and
the Generating Stations, shall come under the purview of the intra-state ABT,
as notified by the Commission and shall be settled based on the composite
accounts for imbalance transactions issued by SLDC on a weekly cycle in
accordance with the UI charges specified by the Commission. Billing,
collection and disbursement of any amounts under the above transactions shall
be in accordance with the Commission’s orders on Intra-state ABT, as may be
applicable from time to time. Till the implementation of Intra-State ABT, the
imbalance charge shall be at the rate of applicable temporary supply tariff.
3) In case of deviation by Open Access Customer who is also a consumer of
distribution licensee, the difference between the applicable scheduled open
access load and actual drawl shall be accounted Block wise and shall be
settled in accordance with the following:
a) The energy consumption of such customer shall be recorded in 15 minutes
time block.
b) Deviations between the schedule and the actual injection/drawal shall come under the purview of the intra-state ABT, as notified by the
Commission and shall be settled based on the composite accounts for
imbalance transactions issued by SLDC on a weekly cycle in accordance
with the UI charges specified by the Commission. Billing, collection and
disbursement of any amounts under the above transactions shall be in
accordance with the Commission’s orders on Intra-state ABT, as may be
applicable from time to time. Till the implementation of Intra-State ABT,
the imbalance charge shall be regulated as below:
i. In case of actual energy/demand drawl is more than the scheduled
energy/demand but within the permitted energy/demand (based on
contracted load and energy or quota demand and energy as applicable),
customer shall be liable to pay for such over drawl at the applicable
tariff rates of that category of consumer as determined by the
Commission from time to time.
ii. In case of actual energy/demand drawl is more than the scheduled
energy/demand drawl and also more than the permitted energy/demand
(based on contracted load and energy or quota demand and energy as
applicable), payment for the capacity above the contract demand shall
have to be made at the excess demand/energy charges as specified by
the Commission for such categories of customers in the
regulation/order.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 315
June 2013
Additional Surcharge
5.69 TANGEDCO has in its petition clearly stated that Additional Surcharge will not be
charged by it as there is shortage of available capacity. It has further elaborated that
the Additional surcharge will become applicable only if it is conclusively
demonstrated that its obligation as a licensee in terms of existing power purchase
commitments, has been and will continue to be stranded, or there is an unavoidable
obligation and incidence to bear fixed costs consequent to such a contract.
5.70 Hence the Commission accepts the proposal of TANGEDCO that Additional
Surcharge will be levied on the Open access consumers if and only if stranded
capacity costs are established by TANGEDCO
Restoration Charges
5.71 Any default in payment of the various OA charges specified in the regulations, within
the time stipulated by the Commission will result in the discontinuance of the open
access to the consumer. Restoration of such discontinued open access shall be subject
to the payment of reconnection charges applicable to that voltage level of the
customer as approved by the Commission in the Order on “Non-tariff related
Miscellaneous charges” issued from time to time.
Fuel and power purchase cost adjustment mechanism (FPCA)
5.72 Electricity Act 2003 under section 62 sub section 4, states
“No tariff or part of any tariff may ordinarily be amended more frequently, than once
in a financial year, except in respect of any changes expressly permitted under the
terms of any fuel surcharge formula as may be specified.”
The National Tariff Policy under provision 5.3(h) (4)
“Uncontrollable costs should be recovered speedily to ensure that future consumers
are not burdened with past costs. Uncontrollable costs would include (but not limited
to) fuel costs, costs on account of inflation, taxes and cess, variations in power
purchase unit costs including on account of hydro thermal mix in case of adverse
natural events,”
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
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 316
June 2013
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.”
5.73 TANGEDCO in its current petition has not proposed the recovery of actual fuel price
through the Fuel and power purchase cost adjustment mechanism. The Commission
had proposed the below formula to enable TANGEDCO to recover the fuel price
variations in its tariff order dated 30th March 2012.
(1) Adjustment Amount
A= CVC.GEN + CVC.pp
A= Adjustment Amount (during this quarter)
CVC.GEN = Change in Variable Cost of TANGEDCO’s thermal stations.
CVC.pp = Change in Power Purchase cost from other sources excluding own
generation.
(2) Chargeable FPCA from the consumers
Metered Category
FPCAM= AM / UM
Un-Metered Category
FPCAHP= AHP / LHP
AM and AHP are to be arrived at by apportioning A on the basis of consumption of
metered and un-metered category.
UM is the number of units billed to metered consumers during quarter under
consideration
LHP is sum of the connected load of un-metered consumers at the end of each month
for the quarter under consideration.
(3) The approved formula is subject to the following:
i. Commission can review the formula at any stage.
ii. For levy of FPCA surcharge, petition containing the basis of
calculations/authenticated data shall be submitted by TANGEDCO by
August, November, February and May end each year for the FCA increases
for the 1st,2
nd, 3
rd and 4
th quarter, respectively, of each year.
iii. The FPCA amount shall be calculated on the basis of norms fixed by the
Commission for various parameters including SHR, Transit loss of coal,
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 317
June 2013
Auxiliary consumption at the thermal plants, T&D losses or any other
parameter as may be specified by the Commission.
iv. The FPCA for the first quarter of a financial year, i.e., from April to June shall
be worked out by TANGEDCO and submitted to the Commission by end of
August of the year and approved by the Commission by the end of September
of the same year so that FPCA is charged from October onwards. Similarly,
FPCA for 2nd quarter of a financial year, i.e., from July to September shall be
worked out by TANGEDCO and submitted to the Commission by November
of that year and approved by the Commission by December of the same year,
so that Fuel and Power Purchase Cost Adjustment is charged from January
onwards. Similar schedule shall be followed for charging FCA for third and
fourth quarters.
v. Any under recovery/over recovery in cost pertaining to FPCA would be trued
up based on the Audited accounts as a part of truing up exercise in the tariff
determination process.
5.74 The Commission had in principle approved the implementation of FPCA mechanism,
and also directed TANGEDCO to submit its preparedness, implementation plan and
sample FPCA calculations for the last quarter, to the Commission for approval, within
30 days of issuance of last year’s Order.
5.75 In line with the above directive TANGEDCO had submitted sample calculations for
the last quarter for which data was available to the Commission, the same was
withdrawn on 18th October 2012 and no further petition for recovery of actual fuel
cost was filed. The Commission opines that this mechanism has been designed to
benefit TANGEDCO by allowing it to recover its actual fuel cost, subject to prudence
check in a speedy manner.
5.76 Hence in line with the in principle approval of the implementation of the FPCA
mechanism in the State, the Commission has decided not to allow the 4% escalation
in fuel price as sought for by TANGEDCO in its petition for the current MYT period.
TANGEDCO shall file quarterly FPCA petitions to the Commission to recover the
actual cost of fuel incurred and the actual cost of power purchase, if the same are in
variance from the figures approved in this Tariff Order.
5.77 TANGEDCO is directed to file its FPCA petitions to the Commission starting
this October 2013 as outlined in the formula and filing mechanism for
calculating the FPAC.
Tariff rationalization and revision of retail supply tariffs
PF Incentive
5.78 The Commission has received comments from industrial consumers to reinstate the
incentive for maintaining near about unity power factor.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 318
June 2013
Regulation 12 of TNERC Tariff Regulations states as under:
“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”
5.79 The amendment to the Supply Code Regulation introduced in Nov 2010 clearly brings
out the reasons for removing the power factor incentive. The Commission is
following same regulation for disincentive in PF below the prescribed level. Hence all
the consumers are required to maintain the PF at the minimum prescribed levels in the
regulation.
TOD Tariff
5.80 The Appellate Tribunal’s directive on peak hour charges in the Appeal No. 257 of
2012 dated 9th April, 2013, has been extracted below.
“14.4 We notice that the State Commission has provided for 20% extra charge on
energy charges for the energy consumed during peak hours i.e. 6:00 AM to 9:00 AM
and 6:00 PM to 9:00 PM for the HT industrial consumers. On the other hand the HT
industrial consumers are allowed a reduction of 5% in the energy charges for the
consumption during off-peak hours i.e. from 10:00 PM to 5:00 AM, as an incentive
for night hours consumption. These charges/incentive have been continuing from the
past. However, the State Commission has decided to maintain the rates which were
prevailing earlier and has not decided the rates based on some study. We find that the
State Commission has provided disincentive for peak hours drawal in view of high
cost of procurement of expensive power during peak hours and balance demand.
However, incentive for off-peak hours has been continued despite shortage during the
off-peak hours.
14.5 The aim of providing differential tariff for peak and off-peak hours is to shift
load from peak to off-peak hours with a view to optimize the generation capacity and
minimize the cost of power procurement for the distribution licensee. However, in the
absence of a specific study for pricing of electricity at off-peak and peak hours, the
weighted average of energy rates for the peak,off-peak and normal hours (other than
peak and off-peaks) should be equal to the average energy rate decided for a
particular category of consumer. In the present case when no specific study for
peak/off-peak pricing has been carried out, the energy rate of the tariff decided by the
Commission for the Appellant's category is lower than the weighted average rate of
energy for peak, off-peak and the normal hours.
14.6 We also notice that the Restriction and Control Measures are also in vogue in
the State and the HT industrial consumers are allowed a small quota of demand and
energy during the peak hours. The drawal in excess of the specified quota results in
imposition of penal rates at substantially higher rate than the normal rates. The State
Commission may also consider whether in view of the Restriction and Control
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 319
June 2013
Measures and penal rates of excess drawal over the peak hours demand and energy
quota whether there is any purpose of having a differential energy tariff ff-peak hours.
14.7 We, therefore, direct the State Commission to reconsider and re-determine the
differential pricing of energy during peak and off-peak hours. Accordingly, the matter
is remanded back to the State Commission.”
5.81 The Commission feels that a detailed study pertaining to load pattern needs to be done
by TANGEDCO. Hence Commission pending a detailed study, proposes to retain the
peak hour charges and off peak rebate at the exiting levels. Commission directs
TANGEDCO in this order to carry out a detail study on this regard and furnish the
same to the Commission. Accordingly after reviewing the report furnished by
TANGEDCO, Commission will address this issue in the next tariff order.
Continuation of ToD peak charge
5.82 The Commission has sought and analysed the system load curve data from July 2012
to May 2013. It can be inferred from the load data that there is no surplus even in the
off- peak hours, even in the month of May to September when wind energy is
available. Similarly in the peak hour, it is only the restricted demand under R&C that
is being met. Hence it can be concluded that there is a shortage in the peak hours and
no surplus power available in the off peak hours.
5.83 Also with respect to the question of discontinuing the peak hour charge when R&C is
being imposed, the Commission would like state that R&C by design enforces
demand cut, in a situation of shortage. This mechanism unlike peak hour charge is not
aimed at shifting load to other time slabs, as this mechanism ensures reduction in
demand across all time slabs. Hence when even in the case of reduced demand the
utility is procuring costly power to supply to its consumers, the question of
disallowing that as a pass through does not arise.
5.84 Various legislative and legal frameworks existing in the country which promote
implementation of TOD as an important DSM tool are:
Electricity Act
The relevant provision of Section 62(3) of the Act which guides the SERCs to
incorporate TOD tariff is:
“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 consumer's 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.”
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 320
June 2013
Tariff Policy
The relevant provisions of the Tariff Policy, which define the tariff components and
their applicability states as under:
“8.4 Definition of tariff components and their applicability
1. Two-part tariffs featuring separate fixed and variable charges and Time
differentiated tariff shall be introduced on priority for large consumers (say,
consumers with demand exceeding 1 MW) within one year. This would also help in
flattening the peak and implementing various energy conservation measures.”
National Electricity Policy
Clause: 5.9.6
In order to reduce the requirements for capacity additions, the difference between
electrical power demand during peak periods and off-peak periods would have to be reduced.
Suitable load management techniques should be adopted for this purpose. Differential tariff
structure for peak and off peak supply and metering arrangements (Time of Day metering)
should be conducive to load management objectives. Regulatory Commissions should ensure
adherence to energy efficiency standards by utilities.
5.85 Thus the Commission will maintain status quo for applying the time of day charges to
prescribed consumers till the time the issue remanded by APTEL recently in Appeal
No. 257 of 2012 is decided.
5.86 The Commission further directs TANGEDCO to conduct a study of power purchase
for consumption during peak hours and also take into cognisance the time slots during
which the R&C is imposed. This will help in obtaining a clear understanding of the
additional costly power purchase on one hand as well as relief availed under R&C and
its impact on power purchase on the other.
Applicability of Revised Tariffs
5.87 The revised tariffs will be applicable from 21.06.2013. For cases where there is a
billing cycle difference for a consumer with respect to the date of applicability of the
revised tariff, the revised tariff should be made applicable on a pro-rata basis for the
consumption. The bills for the respective periods as per existing tariff and revised
tariffs shall be calculated based on the pro-rata consumption during each of these
periods (units consumed during respective period arrived at on the basis of average
unit consumption per day multiplied by number of days in the respective period
falling under the billing cycle).
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 321
June 2013
A6: TARIFF SCHEDULE
TARIFF FOR HIGH TENSION SUPPLY CONSUMERS
6.1 General Provisions applicable for High Tension Supply
i. Categories of supply: The categories of supply are as specified in the Tamil Nadu
Electricity Distribution Code and Tamil Nadu Electricity Supply Code. The HT
tariff specified for different categories of HT consumers are also applicable to the
consumers who are supplied at EHT level in accordance with above said Codes.
ii. Harmonics: As specified in the Supply Code, when the consumer fails to provide
adequate harmonic filtering equipment to avoid dumping of harmonics into
Licensee’s network beyond the permissible limits as specified by CEA regulations,
the consumer is liable to pay compensation at 15% of the respective tariff. As and
when the consumer brings down the harmonics within the limit, compensation
charges shall be withdrawn. The measurement of harmonics shall be done by the
Distribution Licensee using standard meters/equipment in the presence of
consumers or their representatives. This compensation charges is applicable to HT-I
& HT-III category of consumers. TANGEDCO shall give three months clear notice
to all consumers under these categories stating that they shall pay 15%
compensation charges if the harmonics introduced by their load is not within the
limits set by CEA. The TANGEDCO shall implement the compensation provision
after three months period from the date of measurement if the harmonics measured
is more than the permissible limits.
iii. In case of supply under HT Tariff, except for HT tariff-IV and V, supply used for
creating facilities for the compliance of Acts/Laws or for the facilities incidental to
the main purpose of the establishment of the consumer, such as facilities extended
to their employees/students/patients/residents as the case may be, within the
premises of the consumer, shall be considered to be bonafide purpose. However, if
such facilities are extended to the public, the energy consumption to such facilities
shall be metered by the licensee separately and only the energy charged under
appropriate LT tariff. Such metered energy consumption shall be deducted from the
total energy consumption registered in the main meter of the HT/EHT supply for
billing.
iv. In case of supply under HT Tariff IA, IIA, II B and III, the use of electricity for
residential quarters, within the premises, shall be metered separately by the licensee
if opted by the consumer and only the energy shall be charged under LT Tariff IC.
Such metered consumption shall be deducted from the total consumption registered
in the main meter of the HT/EHT supply for billing.
v. In case of HT supply under IA, IIA, IIB, III, the supply used for any additional
construction of building within the consumer’s premises not exceeding 2000 square
feet may be allowed from the existing service and charged under the existing tariff.
The use of electricity for the additional construction beyond 2000 square feet and
lavish illumination (as defined under LT tariff VI) shall be metered separately by
the licensee and only the energy shall be charged under LT Tariff VI. Such metered
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 322
June 2013
energy consumption shall be deducted from the total consumption registered in the
main meter of the HT/EHT supply for billing.
vi. Low Power Factor Compensation: In respect of High Tension service
connections the average power factor of the consumers installation shall not be less
than 0.90. Where the average power factor of High Tension service connection is
less than the stipulated limit of 0.90 the following compensation charges will be
levied.
Particulars Dispensation of Power Factor compensation
Below 0.90 and
up to 0.85
One per cent of the current consumption charges for every reduction
of 0.01 in power factor from 0.90
Below 0.85 to
0.75
One and half per cent of the current consumption charges for every
reduction of 0.01 in power factor from 0.90
Below 0.75 Two per cent of the current consumption charges for every reduction
of 0.01 in power factor from 0.90
vii. Billable Demand: In case of HT Consumers, maximum Demand Charges for any
month will be levied on the kVA demand actually recorded in that month or 90% of
the contracted demand whichever is higher.
Provided, that whenever the restriction and control measures are in force, the
billable demand in case of two part tariff for any month will be the actual recorded
maximum demand or 90% of demand quota, as fixed from time to time through
restriction and control measures, whichever is higher.
6.2 High Tension Tariff I A:
Tariff category
Tariff
Demand Charge
in Rs/kVA/
month
Energy charge
in Paise per kWh
(Unit)
High Tension
Tariff I A 300 550
i. This Tariff is applicable to:
a) All manufacturing and industrial establishments and registered factories
including Tea Estates, Textiles, Fertilizer Plants, Steel Plants, Heavy Water
Plants, Chemical plants,
b) Common effluent treatment plants, Industrial estate’s water treatment/supply
works,
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 323
June 2013
c) Cold storage units
ii. This tariff is also applicable to Information Technology services as defined
in the ICT Policy 2008 of Government of Tamil Nadu. The definition is
reproduced below:
“IT services are broadly defined as systems integration, processing services,
information services outsourcing, packaged software support and
installation, hardware support and installation.”
Information Technology Services includes:
a) Systems integration includes:
1) Network Management Services
2) Applications Integration
b) Processing services includes:
1) Outsourced Services in Banking, HR, finance, Technology and other areas
2) Outsourced Bank office support or Business transformation and
Process Consulting Services.
c) Information Services Outsourcing includes:
1) Outsourced Global Information Support Services
2) Knowledge Process Outsourcing
3) Outsourced Global Contact Centre Operations
4) Outsourced Process Consulting Services.
d) Packaged Software Support and Installation includes:
1) Software Design and Development, Support and Maintenance
2) Application installation, support and maintenance
3) Application testing.
e) Hardware Support and Installation includes:
1) Technical and network operations support
2) Hardware installation, administration and management
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 324
June 2013
3) Hardware infrastructure maintenance and support
iii. The HT Industrial consumers (HT IA) shall be billed at 20% extra on the
energy charges for the energy recorded during peak hours. The duration of
peak hours shall be 6.00 A.M to 9.00 A.M and 6.00 P.M to 9.00 P.M.
iv. The HT Industrial Consumers (HT I A) shall be allowed a reduction of 5%
on the energy charges for the consumption recorded during 10.00 P.M to
5.00 A.M as an incentive for night consumption.
v. High Tension Industries under Tariff I-A having arc, induction furnaces or
steel rolling process the integration period for arriving at the maximum
demand in a month will be fifteen minutes.
6.3 High Tension Tariff I B:
Tariff
category
Tariff
Demand
Charge
in Rs/kVA/
month
Energy charge
in Paise per kWh (Unit)
High
Tension
Tariff I B
250 550
i. This tariff is applicable to Railway traction.
6.4 High Tension Tariff II-A
Tariff category
Tariff
Demand Charge
in Rs/kVA/ month
Energy charge
in Paise per kWh
(Unit)
High Tension
Tariff II A 300 450
i. This tariff is applicable for the following services under the control of
Central/State Governments /Local Bodies/TWAD Board/CMWSSB:
a) Educational institutions including government aided educational institutions
and Hostels.
b) Teaching and Training institutions of Ministry of Defence and CRPF
establishments,
c) Hospitals, Primary Health Centres and Health Sub-Centres, Veterinary
Hospitals, Leprosy Centres and Sub-Centres.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 325
June 2013
d) Public Water works and sewerage works and Desalination plants,
e) Residential colonies and Housing complexes, Senior citizen communities,
Old age Homes and Orphanages,
f) Public Lighting and Electric crematorium.
g) Public Libraries and Art Galleries,
h) Research Laboratories and institutions
i) Dairy units
ii. This tariff is also applicable to the following
a) Hospitals and Rehabilitation centres, Training & Rehabilitation centres, Old
Age Homes and Orphanages run by charitable trusts which offer totally free
treatment/services for all categories of patients/inmates on par with
government hospitals and institutions.
b) Desalination plant at Kudankulam Nuclear Power Plant and Minjur
Desalination plant of Chennai Water Desalination Ltd. Water Supply Works
by new Tirupur Area Development Corporation as long as they supply
drinking water predominantly to local bodies/public.
c) Single point supply to Cooperative group housing society and for the residential purpose of the employees as specified in “The Electricity
(Removal of difficulties) Eighth Order 2005”.
d) Actual places of public worship.
6.5 High Tension Tariff II – B :
Tariff category
Tariff
Demand Charge in
Rs/kVA/ month
Energy charge in
Paise per kWh
(Unit)
High Tension
Tariff II B 300 550
i. The tariff is applicable to all Private educational institutions and hostels run
by them.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 326
June 2013
6.6 High Tension Tariff III :
Tariff category
Tariff
Demand Charge
in Rs/kVA/ month
Energy charge
in Paise per kWh
(Unit)
High Tension Tariff
III 300 700
i. This tariff is applicable to all other categories of consumers not covered
under High Tension Tariff IA, IB, IIA, IIB, IV and V.
6.7 High Tension Tariff IV :
Tariff
category
Approved Tariff rate Subsidy
for
Energy
Charges
in Paise
per kWh
Tariff rate payable by
Consumer
Demand
Charge
in
Rs/kVA/
month
Energy
charge
in Paise
per kWh
Demand Charge
in Rs/kVA/
month
Energy
charge
in Paise
per kWh
High
Tension
Tariff IV
Nil 350 350 Nil Nil
i. This tariff is applicable to the Lift Irrigation Societies for Agriculture
registered under Co-operative Societies or under any other Act.
6.8 High Tension Tariff V
Tariff category
Tariff
Demand Charge
in Rs/kVA/ month
Energy charge in
Paise per kWh
(Unit)
High Tension
Tariff V 300 950
i. This tariff is applicable to Temporary supply for construction and for other
temporary purposes.
a) For this category of supply, the initial/in-principle approval for such construction or to conduct such temporary activity obtained by the applicant
from the appropriate authority, wherever necessary, is adequate to effect the
supply.
b) In case of conversion of temporary supply into applicable permanent supply,
the same shall be done subject to compliance of codes/regulations/orders.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 327
June 2013
c) This tariff is also applicable to start-up power provided to generators. The generators are eligible to get start-up power under this tariff after declaration
of CoD. The demand shall be limited to 10% of the highest capacity of the
generating unit of the generating station or the percentage auxiliary
consumption as specified in the regulation, whichever is less. The supply
shall be restricted to 42 days in a year. Drawal of power for a day or part
thereof shall be accounted as a day for this purpose. Power factor
compensation charges are not applicable for start-up power.
TARIFF FOR LOW TENSION SUPPLY CONSUMERS
6.9 General Provisions applicable for Low Tension Supply
i. All motors/pump sets connected in this category of supply shall be certified /
approved by BIS/BEE and motors/pump sets of 3 HP and above shall be
provided with adequate BIS certified capacitors. Non compliance shall invite
compensation charges as specified in the Codes/regulations.
ii. In case of LT Tariff III-B and LT Tariff V, all services with a connected load
of 18.6 kW (25 HP) and above should maintain a power factor of not less
than 0.85. Where the average power factor of Low Tension Service
connection is less than the stipulated limit of 0.85 the following
compensation charges will be levied.
Power Factor Dispensation of Power Factor compensation
Below 0.85 and upto
0.75
One per cent of the current consumption charges for
every reduction of 0.01 in power factor from 0.85.
Below 0.75 One and half per cent of the current consumption
charges for every reduction of 0.01 in power factor
from 0.85
iii. In the event of disconnection of services, the consumers shall be liable to pay
the fixed charges applicable for the respective category during the
disconnection period.
iv. In case of LT Tariff IIB 1, II B2, IIC, IIIA 1, IIIA2, IIIB, V and VI, the fixed
charges shall be calculated based on the contracted demand.
v. Supply used for any additional construction of building not exceeding 2000
square feet within the consumer’s premises shall be charged under the
respective existing tariff except in case of LT tariff I-B and IV. The use of
electricity for the additional construction purposes beyond 2000 square feet
shall be provided with a separate service connection by the licensee and
charged under LT Tariff VI.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 328
June 2013
6.10 Low Tension Tariff 1-A :
Tariff
Consumption slabs –
Range in kWh(units)
and billing period
(one or two months)
Approved Tariff rate Subsidy
for
Energy
Charges
in paise /
kWh
Tariff rate payable by
consumer
Fixed charges
(Rupees per
month)
Energy
charges
in paise /
kWh
Fixed
charges
(Rupees per
month)
Energy
Charges in
paise / kWh
Low
Tension
Tariff I-A
For consumers who consume upto 50 units per month or 100 units for two months
From 0 to 50 units per
month (or) 0 to 100
units for two months
10
260
160 10
100
For consumers who consume from 51 units to 100 units per month (or) 101 to 200 units for two
months
From 0 to 100 units
per month (or) 0 to
200 units for two
months
10
280
130 10
150
For consumers who consume from 101 units to 250 units per month (or) 201 units to 500 units for
two months
From 0 to 100 units
per month (or) 0 to
200 units for two
months 15
300 100
15
200
From 101 to 250 units
per month (or) 201 to
500 units for two
months
400 100 300
For consumers who consume 251 units and above per month (or) 501 units and above for two months
From 0 to 100 units
per month (or) 0 to
200 units for two
months
20
300 Nil
20
300
From 101 to 250 units
per month (or) 201 to
500 units for two
months
400 Nil 400
From 251units and
above per month (or)
501 units and above
for two months
575 Nil 575
On account of Government subsidy, there will be no fixed and energy charges for Handloom
consumers consuming up to 100 units for two months and if consumption exceeds 100 units for 2
months they will be charged as per slab mentioned above and Rs. 100 will be deducted from the bill
amount.
i. This tariff is applicable to the following:
a) Domestic/Residential purposes of lights, fans, Air conditioners, radio/TV
and all other home appliances.
b) Supply used in the house/residence/premises for the following purpose with
a total connected load not exceeding 2 kW.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 329
June 2013
1. To provide lighting, water and other facilities to domestic animals/pets
including chaff cutting, milking etc.
2. Watering for gardening including growing of trees in and around
residential houses/buildings.
c) Handlooms in residences of handloom weavers and handlooms in sheds
regardless of use of outside labour and where energy is availed of only for
lighting, fans and all other residential uses.
d) Public conveniences and Integrated woman sanitary Complexes.
e) Community Nutrition Centres, Anganwadi Centres and Nutritious Meal
Centers.
f) Old Age Homes, Leprosy Centers and sub centres. Orphanages, Homes for
destitute run by Government/Local bodies/Charitable Institutions rendering
totally free services.
g) Consulting rooms of size limited to 200 square feet of any professionals
attached to the residence of such professionals. This facility is extended
exclusively to take advantage of using the residence by the professionals.
h) In respect of multi tenements/residential complexes supply used for common
lighting, water supply, lift and such other facilities provided only to the
residents alone may be given a separate connection and charged under this
tariff. Only one service connection shall be given for the premises for all
common facilities.
i) In respect of multi tenements/multistory flats/residential complexes having
both domestic and non-domestic utilities, common facilities such as common
lighting, common water supply, lift and such other facilities will be charged
under this tariff only if the non-residential built up area does not exceed
25% of the total built up area.
j) In multi tenements residential buildings/Group Houses the additional service
connections requested by the owners/tenants shall be given. If only a meter is
required to effect the additional service connection, service line charges shall
not be collected.
k) Electric crematorium of local bodies.
l) Handicraft/Artisan works carried out by Potters, Goldsmiths etc. attached to
the residence, done predominantly by self or family members using a
connected load not exceeding 1 kW. This facility is extended exclusively to
take advantage of utilizing the space in and around the residence and
participation of family members in the small scale production.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 330
June 2013
m) Any additional lights, serial lights etc. used in the pandals/shamiana and in
the premises of the existing domestic/residential service connection of the
consumer for a period not exceeding one week at a time, with a connected
load not exceeding 3 kW for the family functions/occasions.
6.11 Low Tension Tariff I-B:
Tariff Description
Approved Tariff Rate
Subsidy for
Fixed
Charges/
Energy
Charge
Tariff Rate payable by
Consumer
Energy
charges
in Paise /
kWh
Fixed
charges
(Rupees /
Month)
Fixed
Charges
(Rupees /
Month)
Energy
charges in
Paise / kWh
Low
Tension
Tariff
I-B
Till
installation of
Energy Meter
Nil 125
125 Rupees
/service/
Month
Nil Nil
On Installation
of Energy
Meter
430 Nil 430
Paise/kWh Nil Nil
i. This tariff is applicable to huts in Village Panchayats and special grade
panchayats, houses constructed under Jawahar Velai Vaiippu Thittam,
TAHDCO Kamarajar Adi Dravidar housing schemes, huts in Nilgiris District
and hut with concrete wall in the schemes of state and central Governments.
This tariff is applicable subject to following conditions:
a) Hut means a living place not exceeding 250 square feet area with mud wall
and the thatched roof / tiles / asbestos / metal sheets like corrugated G.I.
sheets for roofing/ concrete Roof and concrete wall with specification of
square feet as approved in the schemes of State/ Central Government.
b) Only one light not exceeding 40 watts shall be permitted per hut.
c) As and when the government provides other appliances such as Colour TV,
fan, Mixie, Grinder and Laptops to these hut dwellers, the usage of
appropriate additional load may be permitted.
ii. Whenever the norms prescribed in (a) to (c) above is violated, the service
category shall be immediately brought under Low Tension Tariff I-A and
billed accordingly
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 331
June 2013
6.12 Low Tension Tariff I-C:
Tariff
Tariff
Energy charges in
paise / kWh
Fixed charges (Rupees
/ Month)
Low Tension Tariff I-C
400
50
i. This tariff is applicable to LT bulk supply for residential colonies of
employees such as railway colonies, plantation worker colonies, defence
colonies, Police Quarters, Residential quarters of Koodankulum Nuclear
power project etc.
ii. The energy charge of this tariff is also applicable for the HT/EHT consumers
who opt for extending supply under this category for their residential
colonies / quarters.
iii. Single point supply to Cooperative group housing society and for the
residential purpose of the employees as specified in “The Electricity
(Removal of difficulties) Eighth Order 2005”.
6.13 Low Tension Tariff II-A:
Tariff Energy Charges in paise/KWh fixed charges
(Rupees /Month)
Low Tension
Tariff II-A
550 Nil
i. This tariff is applicable to Public Lighting by Government/Local Bodies and
Public Water Supply & Public Sewerage System by Government/Local
Bodies /TWAD Board/CMWSSB.
ii. Private agriculture wells/private wells hired by Government/Local
bodies/CMWSSB/TWAD Board/ to draw water for public distribution.
iii. Public Water Supply by New Tirupur Area Development Corporation as
long as they supply drinking water predominantly to local bodies/public and
Public Water Supply in plantation colonies.
iv. Separate service connections for street lights for SIDCO and other industrial
estates.
v. Supply to Railway level crossings.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 332
June 2013
6.14 Low Tension Tariff II-B (1)
Tariff
Tariff
Energy charges in
paise / kWh
Fixed charges
(in Rupees per kW
per month)
Low Tension Tariff II-B
(1)
500 50
i. This tariff is applicable to the following entities owned or aided by the
Government/Government Agencies/Local Bodies:
a) Educational/Welfare Institutions and Hostels run by such institutions, Other
Hostels, Youth/Student Hostels and Scouts camps.
b) Hospitals, Dispensaries, Primary Health Centers & sub-centers and
Veterinary Hospitals.
c) Research Laboratories/Institutes,
d) Elephant Health camp
e) State Legal Udhavi Maiyam.
f) Art Galleries and Museums
g) Public libraries
ii. This tariff is applicable to the following entities which offer totally free
services.
a) Dispensaries, Creches and Recreation centers.
b) Libraries.
c) Emergency accident relief centers on highways, Hospitals and Rehabilitation
Centres for mentally ill & blind and others, Terminal cancer care centre and
Hospital in Tribal areas.
d) Institutes run for /by the physically challenged.
e) Training & Rehabilitation centres.
f) Student Hostel.
iii. This tariff is also applicable to Private Art Galleries and Museums run with
service motive.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 333
June 2013
6.15 Low Tension Tariff II-B (2)
Tariff
Tariff
Energy charges
in paise / kWh
Fixed charges
(in Rupees per kW
per month)
Low Tension Tariff II-B (2) 650 50
i. This tariff is applicable to Private educational institutions and hostels run by
them.
6.16 Low Tension Tariff II-C:
Tariff
Consumption
slabs – Range in
kWh and billing
period
Approved Tariff Rate Subsidy
for
Energy
Charges
in Paise
per kWh
Tariff Rate Payable by
the Consumer
Fixed
Charges
(Rupees
per kW
per
month)
Energy
Charges in
Paise per
kWh
Fixed
Charges
(Rupees
per kW
per
month)
Energy
Charges in
Paise per
kWh
Low
Tension
Tariff II-C
0 to 60 units per
month or 0 to
120 units
bimonthly 50
500 250
50
250
Above 60 units
per month or
above 120 units
bimonthly
500 Nil 500
i. This tariff is applicable to actual places of public worship including Trichy
Rockfort temple, its environs and for the road and path ways leading to the
temple.
ii. The existing concessions to the actual places of worship as already notified
by GoTN having annual income less than Rs. 1000 shall be continued under
the same terms and conditions, until further Order of the Commission.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 334
June 2013
6.17 Low Tension Tariff III-A (1):
Tariff Consumption slabs –
Range in kWh and
billing period
Tariff
Fixed Charges (Rupees
per kW per month)
Energy Charges in
Paise per kWh
Low Tension Tariff
III-A(1)
0 to 250 units per month
or
0 to 500 units bimonthly
15
350
From 251 units and
above units per month or
501 units and above
bimonthly
400
i. The connected load for supply under this tariff category shall not exceed 10
HP.
ii. This tariff is applicable to Cottage and tiny industries, Micro enterprises
engaged in the manufacture or production of goods pertaining to any
industries specified in the first schedule to Industries (Development and
Regulations) Act 1951 (Central Act 65 of 1951).
iii. The intending consumers applying for service connection under LT Tariff III
A (1) claiming to have established the micro enterprise engaged in the
manufacture or production of goods shall produce the cottage industries
certificates from the industrial department /acknowledgement issued by the
District Industries Centre under the Micro Small and Medium Enterprises
Development Act, 2006 (Act 27 of 2006 ) as proof for having filed
Entrepreneurs Memorandum for setting up of Micro Enterprises for
manufacture or production of goods with District Industries Centre under
whose jurisdiction the Enterprise is located.
iv. The existing consumers who are classified under LT Tariff III A (1) based on
the SSI / Tiny Industries Certificate may be continued to be charged under
the same tariff
v. This tariff is applicable to Small Gem cutting units, Waste land development,
laundry works and Common effluent treatment plants.
vi. This tariff is also applicable to Coffee grinding, Ice factory, Vehicle Body
building units, saw mills, rice mills, flour Mills, battery charging units and
Dairy units.
vii. This tariff is also applicable for sericulture, floriculture, horticulture,
mushroom cultivation, cattle farming, poultry & bird farming and fish/prawn
culture.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 335
June 2013
viii. This tariff is also applicable for pumping of water/supply of water for the
purpose of “agriculture and allied activities” as specified in LT Tariff IV
provided that the applicant is unable to get supply under LT tariff IV as per
the seniority maintained specifically for the purpose of providing supply to
Agriculture under LT tariff IV. Such LT Tariff III-A(1) consumer is eligible
to apply for LT Tariff IV. As and when such applicant becomes eligible to
get regular supply under LT Tariff IV as per the specific seniority maintained
for that purpose by the licensee, the supply obtained under LT Tariff III-A(1)
for the specific purpose mentioned in this sub clause shall be converted into
LT tariff IV. Thereafter, the terms and conditions of LT Tariff IV only will
apply.
6.18 Low Tension Tariff III-A (2):
Tariff
Consumption
slabs – Range in
kWh and billing
period
Approved Tariff Rate Subsidy for
energy in
Paise/kWh
and fixed
charges in
Rs/kW per
month
Tariff Rate payable by
consumer
Fixed
Charges
(Rupees per
kW per
month)
Energy
Charges in
Paise per
kWh
Fixed
Charges
(Rupees per
kW per
month)
Energy
Charges in
Paise per kWh
(i) For consumer who consume up to 250 units per month (or) 500 units for two months
Low
Tension
Tariff
III-A (2)
0 to 250 units per
month or 0 to
500 units
bimonthly
50 450 450/kWh
Rs.50/kW/pm Nil Nil
ii) For consumers who consume 251 units and above per month (or) 501 units and above for two
months
0 to 250 units per
month or 0 to 500
units bimonthly
50
450 450/kWh
Rs.20/kW/pm
30
Nil
251 to 500 units
per month or
501 to 1000 units
bimonthly
500 300/kWh
Rs.20/kW/pm 200
501 to 750 units
per month or
1001 to 1500
units bimonthly
500 200/kWh
Rs.20/kW/pm 300
From 751 units
and above per
month or 1501
units and above
bimonthly
500 100/kWh
Rs.20/kW/pm 400
i. The connected load shall not exceed 10 HP under this category.
ii. The tariff is applicable to Power looms, Braided Cords Manufacturing and
related ancillary tiny industries engaged in warping, twisting, and winding.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 336
June 2013
6.19 Low Tension Tariff III-B:
Tariff Fixed Charges
(Rupees per kW per
month)
Energy Charges in Paise per
kWh
Low Tension Tariff III-B 30 550
i. This tariff is applicable to all industries not covered under LT Tariff III A (1)
and III-A (2). All industries covered under LT Tariff III A (1) and III A (2)
shall also fall under this tariff category if the connected load of such
industries exceeds 10 HP.
ii. This tariff is also applicable to Welding sets irrespective of its capacity.
Supply to welding sets shall be charged 15% extra.
iii. This tariff is applicable to Information Technology services as defined in the
ICT Policy 2008 of Government of Tamil Nadu and amended from time to
time. The definition is reproduced below:
“IT services are broadly defined as systems integration, processing services,
information services outsourcing, packaged software support and
installation, hardware support and installation.”
Information Technology Services includes:
a) Systems integration includes :
1) Network Management Services
2) Applications Integration
b) Processing services includes:
1) Outsourced Services in Banking, HR, finance, Technology and
other areas
2) Outsourced Bank office support or Business transformation and
Process Consulting Services.
c) Information Services Outsourcing includes:
1) Outsourced Global Information Support Services
2) Knowledge Process Outsourcing
3) Outsourced Global Contact Centre Operations
4) Outsourced Process Consulting Services.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 337
June 2013
d) Packaged Software Support and Installation includes:
1) Software Design and Development, Support and Maintenance
2) Application installation, support and maintenance
3) Application testing.
e) Hardware Support and Installation includes:
1) Technical and network operations support
2) Hardware installation, administration and management
3) Hardware infrastructure maintenance and support.
iv. The intending consumers applying for service connection under LT Tariff III
B claiming to have established the industries engaged in the manufacture or
production of goods shall produce certificate from the District Industries
centre.
6.20 Low Tension Tariff IV:
Tariff Description
Approved Tariff rate
Subsidy for Fixed
Charges / Energy
Charge
Tariff rate payable by consumer
Energy
charges in
Paise / kWh
Fixed
charges
(Rupees per
HP per
annum)
Fixed
Charges
(Rupees per
HP per
annum
Energy charges in
Paise / kWh
Low
Tension
Tariff IV
Till installation of
Energy Meter Nil 2500
Rs. 2500 per HP
per annum Nil Nil
On Installation of
Energy Meter 280 Nil 280 paise/kWh Nil Nil
i. This tariff is applicable for pumping of water/supply of water to all
agricultural and allied activities such as cultivation of food crops, vegetables,
seeds, trees and other plants. Sericulture, floriculture, horticulture,
mushroom cultivation, cattle farming, poultry and other bird farming,
fish/prawn culture carried out as allied activities of agriculture shall be
construed as agricultural activities.
ii. The services under this tariff shall be permitted to have lighting loads up to
50 watts per 1000 watts of contracted load subject to a maximum of 150
watts inclusive of wattage of pilot lamps for bonafide use .
iii. Subject to the limit of contracted load, the supply under this category can be
utilised for milking, sugar cane crushing, harvesting, stalk/chaff cutting,
thrashing and cleaning of agricultural produces, crane used for lifting
mud/silt from well by having a change over switch as approved and sealed
by the licensee. The change over switch is meant for using the supply either
to the pump set or to any one or more of the purposes mentioned in this
clause. Using supply both to the pump sets and to the other purpose(s) at the
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 338
June 2013
same time is strictly prohibited. The consumer shall abide by the safety
norms for any additional wiring for this purpose.
iv. This tariff is applicable irrespective of owner ship of land if the usage of
electricity is for agriculture and its allied activities.
v. Agricultural consumers shall be permitted to use the water pumped from the
well for bonafide domestic purposes in the farmhouse including for
construction of farm house and sheds for allied works.
vi. Supply for other purpose exceeding the limit permitted for lighting purpose
shall be provided only by separate service connections under appropriate LT
Tariff. Service connections for water pumping for non agricultural purpose
under appropriate tariff is permitted in the same well.
vii. This Tariff is applicable to pump sets of Tamil Nadu Agriculture university
and Research centres, Government Seed Farms, pump sets of Tamil Nadu
Forest department, Pump sets of Government coconut nurseries, Pump sets
of Government oil seed farms.
viii. Pumping and purifying of drainage water for the purpose of agriculture use.
6.21 Low Tension Tariff V:
Tariff Consumption slabs – Range in kWh
and billing period
Fixed Charges
(Rupees per kW
per month)
Energy
Charges
in Paise per
kWh
Low Tension
Tariff V
For consumer with consumption 50
units per month or 100 units bimonthly 60 430
For consumer with consumption above
50 units per month or above 100 units
bimonthly (For all units)
60 700
i. This tariff is applicable to consumers not categorized under LT IA, IB, IC,
IIA, IIB (1), II B (2), IIC, IIIA (I), III A (2), IIIB, IV and VI
ii. In respect of multi tenements/multi-storeyed buildings/residential complexes
where the number of flats/Tenements utilized for commercial and other
purposes exceeds 25% of the total built up area, the LT services relating to
common utilities such as common lighting, water supply, lift and other
facilities shall be charged under this tariff.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 339
June 2013
6.22 Low Tension Tariff VI:
Tariff Fixed Charges (Rupees per
kW per month) Energy charges in paise/kWh
Low Tension
Tariff VI
300
1050
i. This tariff is applicable for supply of power for temporary activities,
construction of buildings and lavish illumination.
ii. The electricity supply for the additional construction beyond 2000 square
feet in the premises of an existing consumer shall be provided only through a
separate service connection and charged under this tariff.
iii. For temporary supply, the initial/in-principle approval for such construction
or to conduct such temporary activity obtained by the applicant from the
appropriate authority, wherever necessary, is adequate to effect the supply.
iv. In case of conversion of temporary supply into applicable permanent supply,
the same shall be done subject to compliance of codes/regulations/orders.
v. In case of lavish illumination, if the illumination is done frequently or
permanently, separate regular service connection shall be provided for lavish
illumination and charged under this tariff.
vi. If the supply is availed for short duration for the temporary
activity/illumination from an existing metered service connection, the
computation of energy/fixed charges for temporary illumination/activity
shall be done based on the connected load and duration of temporary supply.
Connected load shall be accounted in kW or part thereof. Fixed charges shall
be for a month or part thereof. Due credit for such computed energy, limited
to the meter consumption of the respective billing period, shall be given in
the energy recorded by the meter during the respective billing period for the
purpose of regular billing of the existing service connection. The consumer
shall abide by the safety norms for wiring.
vii. The following are considered as Lavish Illumination.
a) Illumination done for hoardings & advertisement boards.
b) Extra/additional illumination done outside the building and in the open areas
for parties/functions/occasions.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 340
June 2013
c) Illumination done in the outer surface/outside the buildings/shops by display
lights, serial lamps, decorative lights, special effect lamps, neon lamps,
ornamental lamps, flood lights etc.
d) Temporary Illumination done for public meetings in pandals/shamianas, path
ways, streets and roads.
Explanation: The supply used for the purpose of indicating/displaying the name and
other details of the shop/buildings shall not be considered as lavish illumination.
6.23 Applicability of the Tariff Schedule
i. The above tariff schedule shall be read with the General Terms and
Conditions of Supply Code and Distribution code specified by the
Commission.
ii. Effecting change in tariff category for a consumer in accordance with this
order shall be the responsibility of TANGEDCO.
iii. The tariff schedule of this order shall be displayed prominently by the
licensee in all section and other offices of TANGEDCO.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 341
June 2013
A7: SUMMARY OF DIRECTIVES
7.1 The Commission directs TANGEDCO
a) To file their Tariff Petition on a timely basis every year, as per the TNERC
Tariff Regulations.
b) To maintain quality of supply as specified in Tamil Nadu Electricity
Distribution Standards of Performance Regulations dated 21-07-2004.
c) To effectively monitor the on-going projects so that they are commissioned
without further delay. The projects which were scheduled to get commissioned
last year but have not been so far have to be commissioned at the earliest.
TANGEDCO should also ensure that the TANTRANSCO also simultaneously
completes all the associated transmission system for evacuation of power from
the generating stations which are getting commissioned during the year 2013-
14, so that power generated is transmitted up to the load centres without any
bottle necks. TANGEDCO should also ensure that the power should be
delivered to the consumption points by way of appropriate distribution
network. All these capacity addition as well as system strengthening plans will
have to be carried out through a well structured cohesive business plan and
detailed individual schemes catering to the need of the business plan. All such
plans and schemes shall be submitted to the Commission in accordance with
the Terms and Conditions of Tariff Regulations 2005, MYT Tariff
Regulations 2009, as well as Licensing Regulations 2005. The submission for
approval in this regard so far has been highly 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
serious and without fail.
d) To file separate petition for the approval of capital cost and tariff
determination of new power plants including hydro stations, within 90 days of
issuance of this Order.
e) To file the progress of the capital expenditure and capitalization on a quarterly basis.
f) The amount approved for R&M expenses should not be diverted for any other
purpose.
g) To comply with the Order on SMP 3 dated 4th June 2013 for accurate
measurement of T&D Loss and unmetered consumption.
h) To submit a time bound program for 100% metering at feeder level and at
distribution transformer level.
Determination of Tariff for Generation and Distribution – Order dated 20-06-2013
Tamil Nadu Electricity Regulatory Commission Page 342
June 2013
i) To submit data on ToD consumption along with the subsequent Tariff
Application for all consumers where ToD meters have been installed. The
power purchase for meeting this demand should also be studied by
TANGEDCO, while taking into consideration the R&C measures in vogue.
j) To introduce kVAh billing for LT and HT consumers.
k) To provide the monthly energy demand and availability and its plan of
scheduling power in accordance to MoD on quarterly basis.
l) To take prior approval for purchasing energy from unapproved sources for
quantum and rate than that specified by the Commission in this Tariff Order.
m) To take prior approval for power procurement with variable cost more than
Rs. 3.50 from unapproved sources and sources not getting dispatched under
MoD, before purchasing energy.
n) To pay transmission charges determined by the Commission to
TANTRANSCO based on the allotted transmission capacity for FY 2013-14.
o) To file to the Commission its quarterly FPCA petitions starting this October,
to recover the actual cost of fuel incurred and the actual cost of power
purchase.
p) To start maintaining regulatory accounts for the purpose of ARR.
q) To comply with various provision of Energy Conservation Act 2001
pertaining to energy audit.
r) To submit a study report on computation of voltage wise ‘cost to serve’ (CoS)
along with the basis of allocation of different costs and losses to various
voltage levels. The Commission also directs TANGEDCO to submit the action
taken report within 90 days of the issuance of this order.
Sd/- Sd/-
(S. Nagalsamy) (K. Venugopal)
Member Member
(By Order of the Commission)
Sd/-
(S. GUNASEKARAN)
SECRETARY
Tamil Nadu Electricity
Regulatory Commission
top related